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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 001-12482
GLIMCHER REALTY TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 31-1390518
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 SOUTH THIRD STREET 43215
COLUMBUS, OHIO (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (614) 621-9000
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class Name of Each Exchange on which Registered
------------------- -----------------------------------------
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COMMON SHARES OF BENEFICIAL INTEREST, PAR VALUE NEW YORK STOCK EXCHANGE
$0.01 PER SHARE 9 1/4% SERIES B CUMULATIVE REDEEMABLE NEW YORK STOCK EXCHANGE
PREFERRED SHARES OF BENEFICIAL INTEREST,
PAR VALUE $0.01 PER SHARE
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Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].
As of March 10, 1999, there were 23,720,755 Common Shares of Beneficial Interest
outstanding, par value $0.01 per share, and the aggregate market value of such
stock held by non-affiliates of the Registrant was $351,168,105 (based on the
closing price on the New York Stock Exchange on such date).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1998 Glimcher Realty Trust Proxy Statement to be filed with the
Securities and Exchange Commission within 120 days after the year covered by
this Form 10-K with respect to the Annual Meeting of Shareholders to be held on
May 12, 1999 are incorporated by reference into Part III.
1 of 74 pages
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TABLE OF CONTENTS
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FORM
10-K
REPORT
PAGE
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ITEM NO.
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PART I
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1. Business.................................................................................... 3
2. Properties.................................................................................. 10
3. Legal Proceedings........................................................................... 22
4. Submission of Matters to a Vote of Security Holders......................................... 22
PART II
5. Market for the Registrant's Common Equity and Related Shareholder Matters................... 23
6. Selected Financial Data..................................................................... 24
7. Management's Discussion and Analysis of Financial Condition and Results of Operations...... 25
7A. Quantitative and Qualitative Disclosures About Market Risk.................................. 35
8. Financial Statements and Supplementary Data................................................. 36
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........ 36
PART III
10. Directors and Executive Officers of the Registrant.......................................... 36
11. Executive Compensation...................................................................... 36
12. Security Ownership of Certain Beneficial Owners and Management.............................. 36
13. Certain Relationships and Related Transactions.............................................. 36
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K........................... 37
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PART I
This Form 10-K, together with other statements and information publicly
disseminated by Glimcher Realty Trust ("GRT"), contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Such statements are based on assumptions and expectations which may not be
realized and are inherently subject to risks and uncertainties, many of which
cannot be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, financial and otherwise, may
differ from the results discussed in the forward-looking statements. Risks and
other factors that might cause differences, some of which could be material,
include, but are not limited to, the effect of economic and market conditions;
failure to consummate financing and joint venture arrangements; development
risks, including lack of satisfactory financing, construction and lease-up
delays and cost overruns; the level and volatility of interest rates; the
financial stability of tenants within the retail industry; the rate of revenue
increases versus expense increases, as well as other risks listed from time to
time in this Form 10-K and in GRT's other reports filed with the Securities and
Exchange Commission.
ITEM 1. BUSINESS
(a) General Development of Business
GRT is a fully-integrated, self-administered and self-managed Maryland
REIT which was formed on September 1, 1993 to continue the business of The
Glimcher Company ("TGC"), and its affiliates, of owning, leasing, acquiring,
developing and operating a portfolio of retail properties consisting of regional
and super regional malls (including, most recently, value-oriented
super-regional malls) (the "Mall Properties") and community shopping centers
(including single tenant retail properties) (the "Community Centers"). The Mall
Properties and Community Centers are each individually referred to herein as a
"Property" and the Mall Properties and Community Centers in which GRT holds an
ownership position are collectively referred to herein as the "Properties". On
January 26, 1994, GRT consummated an initial public offering (the "IPO") of
15,825,000 of its common shares of beneficial interest (the "Shares"). On
February 3, 1994, GRT sold an additional 2,373,750 Shares as a result of the
underwriters exercising the over-allotment option granted to them in connection
with the IPO. The net proceeds of the IPO were used by GRT primarily to acquire
(at the time of the IPO) an 86.2% interest in Glimcher Properties Limited
Partnership (the "Operating Partnership"), a Delaware limited partnership of
which Glimcher Properties Corporation ("GPC"), a Delaware corporation and a
wholly owned subsidiary of GRT, is sole general partner, and to repay mortgage
indebtedness with respect to one of the Properties acquired in connection with
the IPO (the "IPO Properties). The Operating Partnership and/or its subsidiaries
applied the portion of the net proceeds received by it from GRT towards (i) the
acquisition of 46 Properties (the "Acquisition Properties"), (ii) the repayment
of certain mortgage indebtedness and prepayment penalties on 29 Properties (the
"Glimcher Properties") contributed to the Operating Partnership and its
affiliates by entities affiliated with Herbert Glimcher and David J. Glimcher or
the beneficial owners of such entities (collectively, the "Glimcher Entities"),
(iii) the payment to persons unaffiliated with TGC of the purchase price for
minority interests in certain of the Glimcher Properties, (iv) the payment of
other costs and expenses associated with the IPO transactions, and (v) for
working capital and other general business purposes. The net proceeds from the
exercise of the over-allotment option were used entirely to reduce the then
outstanding balance of GRT's credit facility.
On June 27, 1995 and October 6, 1997, GRT completed public offerings
for an additional 3,500,000 and 1,750,000 Shares, respectively, (the "Additional
Offerings"). The net proceeds from the Additional Offerings were used by GRT to
acquire additional units of limited partnership in the Operating Partnership.
The Operating Partnership then used the proceeds obtained in exchange for the
GRT units to reduce variable rate indebtedness. On November 17, 1997, GRT
completed a public offering of 4,800,000 shares of 9 1/4% Series B cumulative
redeemable preferred shares of beneficial interest (the "Series B Preferred
Shares"), par value $0.01 per share, with each share having a liquidation
preference of $25.00. On November 25, 1997, GRT sold an additional 318,000
Series B Preferred Shares as a result of the underwriters exercising the
over-allotment option granted to them. The net proceeds were contributed to the
Operating Partnership and were used to (i) repay the balance of a $34.4 million
bridge loan facility and (ii) to repay a portion of the outstanding borrowings
on GRT's credit facility.
On November 27, 1996, the Company issued 34,000 shares of its 40,000
authorized Series A convertible preferred shares. The Series A preferred shares
were offered and sold in a private placement to an affiliate of Nomura Asset
Capital Corporation ("Nomura"), for an aggregate cash consideration of $34.0
million and may be
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redeemed by the Company at any time, prior to conversion, at its option without
any penalty or premiums. On November 7, 1997, the Series A preferred shares were
exchanged for Series A-1 preferred shares (the "Series A-1 Preferred Shares")
having substantially the same terms. Beginning in November 2001, the Series A-1
Preferred Shares are convertible into the number of Shares obtained by dividing
the liquidation preference by the conversion price per Share. The conversion
price per Share is the product of (i) the average market price per Share over
the 30 trading days prior to the conversion, multiplied by (ii) the applicable
conversion percentage which begins at 90.0% and decreases annually 5.0%, 5.0%
and 10.0% to 70.0%.
On December 5, 1997, the Company issued 56,000 shares of its Series C
convertible preferred shares (the "Series C Preferred Shares"). The Series C
Preferred Shares were offered and sold in a private placement to an affiliate of
Nomura for an aggregate cash consideration of $56.0 million and may be redeemed
by the Company at any time, prior to conversion, at its option without any
penalty or premiums. On June 4, 1998, the Series C Preferred Shares were
exchanged for Series D preferred shares (the "Series D Preferred Shares") having
substantially the same terms. Beginning in December 2002, the Series D Preferred
Shares are convertible into the number of Shares obtained by dividing the
liquidation preference by the conversion price per Share. The conversion price
per Share is the product of (i) the average market price per Share over the 30
trading days prior to the conversion, multiplied by (ii) the applicable
conversion percentage which begins at 90.0% and decreases annually 5.0%, 5.0%
and 10.0% to 70.0%.
The sale of the Series A-1 and Series D Preferred Shares was exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act") by virtue of the fact that the Series A-1 and Series D Preferred Shares
were sold to Nomura affiliates for their account for investment and not with a
view towards the resale, transfer or distribution thereof, nor with any present
intention of distributing the Series A-1 and Series D Preferred Shares, thus
qualifying the sale as a transaction by an issuer not involving any public
offering in accordance with Section 4(2) of the Securities Act. In addition the
Nomura affiliates are "accredited investors" as defined in Rule 501 (a) under
the Securities Act.
The Operating Partnership is a 99.0% limited partner of six Delaware
limited partnerships, Glimcher Holdings Limited Partnership ("Holdings"),
Glimcher Centers Limited Partnership ("Centers"), Grand Central Limited
Partnership ("GCLP"), Glimcher York Associates Limited Partnership ("York"),
Glimcher University Mall Limited Partnership ("University"), Montgomery Mall
Associates Limited Partnership ("Montgomery"), one Ohio limited partnership,
Morgantown Mall Associates Limited Partnership ("Morgantown") and three Delaware
limited liability companies, Glimcher Northtown Venture, LLC ("Northtown"),
Weberstown Mall, LLC ("Weberstown") and Glimcher Lloyd Venture, LLC ("Lloyd").
The general partner in each entity is either (i) GPC, (ii) wholly-owned by GPC,
or (iii) wholly-owned by GRT. The Operating Partnership is (i) an 81.8% member
of a Colorado limited liability company, Olathe Mall LLC ("Olathe") which is a
55.0% member in Great Plains Metro Mall LLC, a Delaware limited liability
company ("Great Plains"), (ii) a 32.3% member of a Delaware limited liability
company, Johnson City Venture, LLC, whose managing member, Glimcher Johnson
City, Inc., a Delaware corporation, is a 1.0% member (collectively ,"Johnson
City"); (iii) a 39.0% member of a Delaware limited liability company, Dayton
Mall Venture, LLC, whose managing member, Glimcher Dayton Mall, Inc., is a 1.0%
member (collectively, "Dayton"); (iv) a 39.5% limited partner of a Delaware
limited partnership, Colonial Park Mall Limited Partnership, whose general
partner, Glimcher Colonial Trust, a Delaware business trust, is a 0.5% member
(collectively, "Colonial"), with an option to acquire the remaining 11.0%
interest in the entity which owns the Colonial Park Mall; (v) a 50.0% member of
a Delaware limited liability company, Glimcher New Jersey Metro Mall, LLC
("NJM"), which is a 60.0% member in Elizabeth Metro Mall, LLC, a Delaware
limited liability company; (vi) a 33.85% member of Glimcher SuperMall Venture
LLC, ("SuperMall"), a Delaware limited liability company, whose managing member,
Glimcher Auburn Inc., a Delaware corporation, is a 1.0% member, (vii) a 20.0%
interest in San Mall, LLC, a Delaware limited liability company, which is a
99.5% member of San Mall Limited Partnership, a Delaware limited partnership,
whose managing member, San Mall Corporation, a Delaware corporation, is a 0.5%
member, (viii) a 50.0% interest in Polaris Center, LLC, a Delaware limited
liability company, (ix) a 20.0% interest in Eastland Mall, LLC, a Delaware
limited liability company, which is a 99.5% member of Eastland Mall Limited
Partnership, a Delaware limited partnership, whose managing member, Eastland
Retail Corporation, a Delaware Corporation, is a 0.5% member and (x) a common
shareholder of Glimcher Development Corporation ("GDC"), a Delaware corporation,
with 95.0% economic interest and no voting interest. GDC was incorporated on
October 16, 1996; the construction, development, leasing and legal departments
of GRT were transferred to GDC on November 1, 1996, and provide their services
for a fee to ventures in which GRT has an ownership interest, as well as to
third parties. The operation of GDC allows the Company to earn non-qualified
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revenues without jeopardizing its REIT status. The Operating Partnership and
entities directly or indirectly owned or controlled by GRT, on a consolidated
basis, are hereinafter referred to as the "Company."
The Company does not engage or pay a REIT advisor. Management, leasing,
accounting, design and construction supervision expertise is provided through
its own personnel, through GDC, or, where appropriate, through outside
professionals.
(b) Acquisitions, Expansions, Renovations and Developments During the 1998
Fiscal Year
ACQUISITIONS
The Company's objective is to acquire retail properties which appeal to
a wide range of national and regional tenants. The Company focuses primarily on
properties which individually or in combination with other Properties owned by
the Company, are capable of becoming a dominant retail property in their
respective trade areas. Additionally, the Company seeks accretive acquisitions
which can achieve increases in cash flow as a result of the Company's management
and leasing expertise. Consistent with this strategy, during 1998 the Company
acquired interests in joint ventures which purchased four Mall Properties
totaling approximately 3.5 million square feet of gross leasable area ("GLA")
for a total purchase price of approximately $196.0 million and acquired four
Mall Properties totaling approximately 3.9 million square feet of GLA in which
it invested approximately $315.0 million.
On January 15, 1998, the Company, in a joint venture with Nomura
completed a transaction for the recapitalization of the ownership of the
SuperMall of the Great Northwest in Seattle, Washington, for $103.0 million. The
SuperMall of the Great Northwest consists of approximately 933,000 square feet
of GLA including nine anchors. The Company has a 34.85% ownership interest in
this Property.
On March 31, 1998, the Company purchased an interest in a joint venture
which owned Almeda Mall and Northwest Mall, both in Houston, Texas. The two
Properties were previously purchased by Nomura for $39.0 million. Almeda Mall
consists of approximately 792,000 square feet of GLA including five anchors and
Northwest Mall consists of approximately 799,000 square feet of GLA including
four anchors. The Company had managed these Properties since November 1, 1997.
The Company has a 20.0% ownership interest in the entity that owns these
Properties.
On June 1, 1998, the Company completed the acquisition of Northtown
Mall in Blaine, Minnesota, for a purchase price of approximately $54.0 million.
Northtown Mall consists of approximately 825,000 square feet of GLA and includes
anchors Best Buy, HomePlace, Kohl's, Mervyn's California and Montgomery Ward.
On July 16, 1998, the Company completed the acquisition of Montgomery
Mall in Montgomery, Alabama, for a purchase price of approximately $70.0
million. Montgomery Mall consists of approximately 728,000 square feet of GLA
and includes anchors Dillard's, JCPenney and Parisian.
On August 1, 1998, the Company completed the acquisition of Weberstown
Mall in Stockton, California, for a purchase price of approximately $23.0
million. Weberstown Mall has approximately 839,000 square feet of GLA and
includes anchors Barnes & Noble, Dillard's, JCPenney and Sears.
On August 20, 1998, the Company, in a joint venture with Nomura
completed the acquisition of Eastland Mall in Charlotte, North Carolina, for a
purchase price of $54.0 million. The Company has a 20.0% ownership interest in
the entity that owns this Property. Eastland Mall consists of approximately 1.1
million square feet of GLA and includes anchors Belk, Dillard's, Ice Chalet,
JCPenney and Sears.
On September 15, 1998, the Company completed the acquisition of Lloyd
Center in Portland, Oregon, for a purchase price of approximately $168.0
million. Lloyd Center consists of approximately 1.5 million square feet of GLA
and includes anchors Ice Chalet, Lloyd Mall Cinemas, Marshalls, Meier & Frank,
Nordstrom and Toys "R" Us.
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EXPANSIONS AND RENOVATIONS
The Company maintains a strategy of selective expansion and renovation
of its Properties in order to improve the operating performance and the
competitive position of its existing Properties. The Company also engages in an
active redevelopment program with the objective of attracting innovative
retailers which management believes will enhance the operating performance of
the Properties. Certain examples of the Company's recent Property expansions and
renovations are described below.
In 1996, the Company began expanding and renovating the Grand Central
Mall in Parkersburg, West Virginia. The renovation focused on enhancing the
entertainment component of the Mall Property, adding a food court and expanding
the existing cinema into an approximately 37,000 square-foot 12-screen complex.
The Company has made additional revenue enhancing expansions of this Mall
Property, including an approximately 83,000 square-foot Proffitt's which opened
in March 1998 and a County Market store, currently under construction. County
Market will be relocating to the new 58,000 square-foot outparcel building in
March 1999 and the Company expects to retenant the existing 38,500 square-foot
building during 1999.
In 1997, the Company expanded the Indian Mound Mall, located in
Newark/Heath, Ohio, by approximately 122,000 square feet of GLA, which increased
its total GLA to approximately 543,000 square feet. The Company believes that
this expansion has enabled this Mall Property to continue to dominate its
market. The expansion is consistent with the Company's focus of combining strong
anchor tenants with an expanded entertainment component to provide a compelling
destination focus for shoppers. An approximately 93,000 square- foot Sears store
opened in September 1997, and the expansion of the current cinema from
approximately 18,000 square feet to approximately 42,000 square feet, as well as
the addition of approximately 5,000 square feet of mall shops, was completed
during the fourth quarter of 1997. The existing Elder-Beerman store is being
expanded by approximately 21,000 square feet of GLA and is set to open early in
1999. Upon completion of the Elder-Beerman store, the Property's GLA will
increase to approximately 564,000 square feet.
In 1998, the Company expanded Georgesville Square, in Columbus, Ohio,
by adding a 63,000 square-foot 16-screen cinema. Additionally, the Company
expanded River Valley Mall, in Lancaster, Ohio, by adding a 23,500 square-foot
OfficeMax on one of the Property's outparcels, which opened in August 1998.
Finally, the Company announced an expansion at The Mall of Fairfield Commons,
with the addition of an approximately 89,000 square-foot Regal Cinemas on one of
the Property's outparcels, which is under construction and expected to open in
the second quarter of 1999.
DEVELOPMENTS
One of the Company's objectives is to increase its portfolio by
developing new retail properties. The Company's management team has developed
over 100 retail properties nationwide and has significant experience in all
phases of the development process, including site selection, zoning, design,
predevelopment leasing, construction financing and construction management.
The Company has begun developing value-oriented super-regional malls
while continuing to acquire and develop traditional regional mall and community
shopping center properties. These value-oriented super-regional malls transcend
the typical design and format of the value-oriented mall by combining the
amenities and comforts of a contemporary regional mall with significant
entertainment facilities and diversified tenants.
The Company, in a joint venture in which the Company has a 30.0%
ownership interest, is currently developing a 1.3 million square-foot
value-oriented fashion and entertainment megamall, located in Elizabeth, New
Jersey ("Jersey Gardens"). Construction of the Mall Property and related
infrastructure is underway, and completion is projected for October of 1999.
In March 1998, the Company, in a joint venture in which it has a 50.0%
ownership interest, commenced construction of an approximately 700,000
square-foot power Community Center in northern Columbus, Ohio ("Polaris Towne
Center"). Upon completion, Polaris Towne Center will feature grocery and
discount store anchors, restaurants, big box retailers and several specialty
shops. Kroger opened in December 1998 with approximately 64,000 square feet of
GLA. The remainder of the shops are set to open through the fall of 1999.
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In March 1998, the Company announced plans for the development of an
approximately 1.5 million square-foot new super-regional Mall Property in
northern Columbus, Ohio ("Polaris Fashion Place"). Polaris Fashion Place is
expected to be a bi-level mall featuring six anchor tenants, approximately 150
mall stores and 4 restaurants, which will be located across the street from
Polaris Towne Center and is projected to open in 2001.
In October 1998, the Company announced plans for the development of a
1.0 million square-foot super-regional Mall Property in the Chicago suburb of
Bolingbrook, Illinois. The Company has obtained an option to acquire a 203 acre
parcel as the site of this project which could open in 2001.
The Company has a contingent contract to acquire the land for a
value-oriented super-regional mall located in Carson, California.
(c) Narrative Description of Business
GENERAL The Company concentrates its business on two broad types of
retail properties, Mall Properties and Community Centers. At December 31, 1998,
the Properties consisted of 21 Mall Properties containing an aggregate of 16.9
million square feet of GLA (7.0 million square feet of GLA is owned in joint
ventures) and 104 Community Centers (including 17 single tenant retail
properties) containing an aggregate of 13.4 million square feet of GLA (64,000
square feet of GLA is owned in a joint venture).
As of December 31, 1998, the occupancy rate for all of the Properties
was 93.8%, of which 89.3%, 4.5% and 6.2% was leased to national retailers,
regional retailers and local retailers, respectively. The Company's focus is to
maintain high occupancy rates for the Properties by capitalizing on management's
long-standing relationships with national and regional tenants and its extensive
experience in marketing to local retailers.
As of December 31, 1998, the Properties had average annualized minimum
rents of $8.23 per square-foot of GLA. Approximately 83.3%, 5.8% and 10.9% of
the annualized minimum rents of the Properties as of December 31, 1998, was
derived from national retail chains, regional retail chains and local retailers,
respectively. Wal-Mart, Kmart and The Limited, Inc. and its consolidated
entities, represented approximately 6.0%, 4.7% and 4.6%, respectively, of the
aggregate annualized minimum rents of the Properties as of December 31, 1998; no
other tenant represented more than 3.0% of the aggregate annualized minimum
rents of the Properties for such period.
MALL PROPERTIES The Mall Properties provide a broad range of shopping
alternatives to serve the needs of customers in all market segments. Each of the
Mall Properties is anchored by two to five department stores including Bon-Ton,
Boscov's, Dillard's, Elder-Beerman, JCPenney, Kohl's, Lazarus, Nordstrom, Meier
& Frank Co., Parisian, Proffitt's and Sears. Mall stores, most of which are
national retailers, include Footlocker, Hallmark, Lerner New York, Limited
Express, Radio Shack, The Disney Store, The Gap, The Limited, Warner Brothers
and Waldenbooks. To provide a complete shopping, dining and entertainment
experience, the Mall Properties generally have at least one theme restaurant, a
food court which offers a variety of fast food alternatives, multiple screen
movie theaters and other entertainment activities. The largest of the Mall
Properties has 1.5 million square feet of GLA and approximately 250 stores and
the smallest has 225,000 square feet of GLA and approximately 40 stores. The
Mall Properties also have additional restaurants and retail businesses such as
Chi-Chi's, Red Lobster and Toys "R" Us located along the perimeter of the
parking areas.
As of December 31, 1998, the Mall Properties accounted for 55.8% of the
total GLA, 65.1% of the aggregate annualized minimum rents of the Properties and
had an overall occupancy rate of 91.8%.
COMMUNITY CENTERS The Company's Community Centers are designed to
attract local and regional area customers and are typically anchored by a
combination of supermarkets, discount department stores or drug stores
("Community Anchors") which attract shoppers to each center's smaller shops. The
tenants at the Company's Community Centers typically offer day-to-day
necessities and value-oriented merchandise. Community Anchors include nationally
recognized retailers such as JCPenney, Kmart, Lowe's, Target and Wal-Mart and
supermarkets such as Big Bear, Kroger and Winn-Dixie. Many of the Community
Centers have retail businesses including Toys "R" Us and OfficeMax or
restaurants including Applebee's, Burger King, Lone Star, McDonald's, and
Wendy's located along the perimeter of the parking areas.
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As of December 31, 1998, the Community Centers accounted for 44.2% of
the total GLA, 34.9% of the aggregate annualized minimum rents of the Properties
and had an overall occupancy rate of 96.3%.
GROWTH STRATEGIES AND OPERATING POLICIES Management of the Company
believes per share growth in funds from operations ("FFO") is the critical
factor in enhancing shareholder value. The Company's primary business objective
is to achieve growth in FFO by developing and acquiring retail properties, by
improving the operating performance and value of its existing portfolio through
selective expansion and renovation of its Properties and by maintaining high
occupancy rates, increasing minimum rents per square-foot of GLA and
aggressively controlling costs.
Key elements of the Company's growth strategies and operating policies
are to: (i) increase Property values by aggressively marketing available GLA and
renewing existing leases; (ii) negotiate and sign leases which provide for
regular or periodic fixed contractual increases to minimum rents; (iii)
capitalize on management's long-standing relationships with national and
regional retailers and extensive experience in marketing to local retailers, as
well as exploit the leverage inherent in a larger portfolio of properties in
order to lease available space; (iv) utilize its team management approach to
increase productivity and efficiency; (v) hold Properties for long-term
investment and emphasize regular maintenance, periodic renovation and capital
improvements to preserve and maximize value; (vi) control operating costs by
utilizing Company employees and/or GDC employees to perform management, leasing,
marketing, finance, accounting, construction supervision, legal and data
processing activities; and (vii) renovate, reconfigure or expand Properties and
utilize existing land available for expansion and development of outparcels to
meet the needs of existing or new tenants. Additionally, the Company seeks to
utilize its development capabilities to develop quality Properties at the lowest
possible cost.
The Company intends to operate in a manner consistent with the
requirements of the Internal Revenue Code of 1986, as amended (the "Code"),
applicable to REITs and related regulations with respect to the composition of
the Company's portfolio and the derivation of income unless, because of
circumstances or changes in the Code (or any related regulation), the trustees
of the Company determine that it is no longer in the best interests of the
Company to qualify as a REIT.
The Company's acquisition strategies are to selectively acquire
strategically located Properties in regional markets where management generally
has extensive operating experience and/or where it has been able to capitalize
on its strong working relationships with national, regional and local retailers,
to enhance such center's operating performance through a comprehensive program
of leasing, merchandising, reconfiguration, proactive management, renovation and
expansion.
The following factors, among others, are considered by the Company in
making acquisitions: (i) the geographic area and type of property; (ii) the
location, construction quality, condition and design of the property; (iii) the
current FFO generated by the property and the ability to increase FFO through
property repositioning and proactive management of the tenant base; (iv) the
potential for capital appreciation; (v) the terms of tenant leases; (vi) the
existing tenant mix at the property; (vii) the potential for economic growth and
the tax and regulatory environment of the communities in which the properties
are located; (viii) the occupancy rates and demand by tenants for properties of
similar type in the vicinity; and (ix) the prospects for financing or
refinancing the property.
The Company acquires and develops its Properties as long-term
investments. Therefore, its focus is to provide for regular maintenance of its
Properties and to conduct periodic renovations and refurbishments to preserve
and increase Property values while also increasing the retail sales prospects of
its tenants. The projects usually include renovating existing facades,
installing uniform signage, updating interior decor, resurfacing parking lots
and increasing parking lot lighting. To meet the needs of existing or new
tenants and changing consumer demands, the Company also reconfigures and expands
its Properties, including utilizing land available for expansion and development
of outparcels for the addition of new anchors. In addition, the Company works
closely with its tenants to renovate their stores and enhance their
merchandising capabilities.
FINANCING STRATEGIES At December 31, 1998, the Company had a
debt-to-total-market-capitalization ratio of 61.0%, based upon the closing price
of the Shares on the New York Stock Exchange as of December 31, 1998. The
Company expects that it may from time to time reevaluate its policy with respect
to its ratio of total-debt-to-total market-capitalization in light of then
current economic conditions; relative costs of debt and equity capital; market
values of its Properties; acquisition, development and expansion opportunities;
and other factors, including
8
<PAGE> 9
meeting the taxable income distribution requirement for REITs under the Code in
the event the Company has taxable income without receipt of cash sufficient to
enable the Company to meet such distribution requirements.
On November 17, 1997, the Company completed a public offering of
5,118,000 Series B Preferred Shares (including 318,000 Series B Preferred Shares
sold as a result of the underwriters exercising the over-allotment option
granted to them). The net proceeds of approximately $123.1 million were
contributed by the Company to the Operating Partnership and were used to: (i)
repay the balance of a $34.4 million bridge loan facility and (ii) repay a
portion of the outstanding borrowings on the Operating Partnership's credit
facility.
On October 6, 1997, the Company completed a second offering of
1,750,000 Shares and used the net proceeds of approximately $37.8 million to
acquire additional units of limited partnership in the Operating Partnership.
The Operating Partnership then used the proceeds obtained in exchange for the
GRT units to repay a portion of the outstanding borrowings on its credit
facility.
CORPORATE HEADQUARTERS The Company's headquarters are located at 20
South Third Street, Columbus, Ohio 43215, and its telephone number is (614)
621-9000. In addition, the Company maintains management offices at each of its
Mall Properties.
COMPETITION All of the Properties are located in areas which have
shopping centers and other retail facilities. Generally, there are other retail
properties within a five-mile radius of a Property. The amount of rentable
retail space in the vicinity of the Company's Properties could have a material
adverse effect on the amount of rent charged by the Company and on the Company's
ability to rent vacant space and/or renew leases of such Properties. There are
numerous commercial developers, real estate companies and major retailers that
compete with the Company in seeking land for development, properties for
acquisition and tenants for properties, some of which may have greater financial
resources than the Company and more operating or development experience than
that of the Company. There are numerous shopping facilities that compete with
the Company's Properties in attracting retailers to lease space. In addition,
retailers at the Properties may face increasing competition from the Internet,
outlet malls, discount shopping clubs, catalog companies, direct mail and
telemarketing.
EMPLOYEES At December 31, 1998, the Company, GDC and the ventures in
which the Company has an interest, had an aggregate of 541 employees, of which
154 were part-time.
REAL ESTATE AND OTHER CONSIDERATIONS As an owner and developer of real
estate, the Company is subject to risks arising in connection with such
activities and with the underlying real estate, including unknown deficiencies
of and the inability to manage recently acquired Properties, poor economic
conditions in those areas where Properties are located, joint venture
bankruptcies, unanticipated conflicts of interest between the Company and joint
venturers, failure to obtain consents of joint venturers with respect to sale,
refinancing and other activities, the joint venturers removing the Company as
managing agent or managing member with respect to a Property, buy-sell
arrangements with joint venturers exercised at inopportune times, defaults under
or non-renewal of tenant leases, tenant bankruptcies, competition, liquidity of
real estate, inability to rent unleased space, failure to generate sufficient
income to meet operating expenses, including debt service, capital expenditures
and tenant improvements, balloon payments on debt, environmental matters,
financing availability, defaults under and failure to repay borrowings,
fluctuations in interest rates, changes in real estate and zoning laws, cost
overruns, delays, unavailability of satisfactory financing and other risks of
development activities. The success of the Company also depends upon certain key
personnel, its ability to maintain its qualification as a REIT and trends in the
national and local economy, including income tax laws, governmental regulations
and legislation and population trends.
TAX STATUS The Company intends to continue to be taxed as a REIT under
Sections 856 through 860 of the Code. As such, the Company generally will not be
subject to Federal income tax to the extent it distributes at least 95.0% of its
REIT taxable income to its shareholders. If the Company fails to qualify as a
REIT in any taxable year, the Company will be subject to Federal income tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. As a qualified REIT, the Company is subject to certain
state and local taxes on its income and property and to federal income and
excise taxes on its undistributed income.
9
<PAGE> 10
ITEM 2. PROPERTIES
At December 31, 1998, the Company managed and leased a total of 125
Properties, 116 of which were wholly-owned and nine of which were partially
owned in ventures. The Properties are located in 27 states primarily throughout
the East and the Midwest as follows: Ohio (29), Pennsylvania (13), Tennessee
(10), Kentucky (8), West Virginia (8), North Carolina (7), New York (6), South
Carolina (6), Indiana (5), Florida (4), Texas (3), Virginia (3), Washington (3),
Alabama (2), Illinois (2), Kansas (2), Massachusetts (2), Missouri (2),
Wisconsin (2), Arizona (1), California (1), Colorado (1), Georgia (1), Michigan
(1), Minnesota (1), Nebraska (1), Oregon (1).
(a) Mall Properties
Twenty-one of the Properties are Mall Properties and range in size from
225,000 square feet of GLA to 1.5 million square feet of GLA. Five of the Mall
Properties are located in Ohio and 16 are located throughout the country in the
states of Texas (2), West Virginia (2), Alabama (1), California (1), Florida
(1), Kansas (1), Kentucky (1), Minnesota (1), New York (1), North Carolina (1),
Oregon (1), Pennsylvania (1), Tennessee (1) and Washington (1). The location,
general character and major tenant information are set forth below.
SUMMARY OF MALL PROPERTIES AT DECEMBER 31, 1998
-----------------------------------------------
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (3)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPANY OWNED PROPERTIES:
Ashland Town Center JCPenney 10/31/04
Ashland, KY............... 226,862 189,793 416,655 100.0 82.4 Proffitt's 01/31/10
Wal-Mart 11/10/09
Grand Central Mall Goody's 04/30/03
Parkersburg/Vienna, WV.. 562,394 335,923 898,317 100.0 85.1 JCPenney 09/30/02
Phar-Mor 04/30/07
Regal Cinemas 11/30/16
Sears 09/25/02
Elder-Beerman (2) 01/31/33
Proffitt's 03/31/18
Indian Mound Mall Crown Cinema 12/31/07
Newark/Heath, OH........ 369,215 173,569 542,784 100.0 75.3 Elder-Beerman 09/30/06
Hills 01/31/12
JCPenney 10/31/01
Lazarus 09/30/01
Sears (2) 09/23/27
Lloyd Center Ice Chalet 12/31/00
Portland, OR........... 752,484 732,313 1,484,797 75.1 92.6 Lloyd Mall Cinemas 01/31/12
Marshalls 01/31/04
Meier & Frank Co. 01/31/06
Nordstrom (5)
Toys "R" Us 11/30/05
Mall at Fairfield Commons, The Elder-Beerman 10/31/13
Beavercreek/Dayton, OH....... 683,703 356,840 1,040,543 100.0 93.9 JCPenney 10/31/08
Lazarus (2) 01/31/15
Parisian 01/31/14
Sears 10/31/08
Montgomery Mall Dillard's 01/31/01
Montgomery, AL......... 460,341 267,687 728,028 100.0 96.1 JCPenney 04/30/00
Parisian (5)
</TABLE>
10
<PAGE> 11
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (3)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Morgantown Mall Carmike Cinemas 10/31/05
Morgantown, WV.......... 359,171 183,226 542,397 100.0 78.2 Elder-Beerman 09/30/10
JCPenney 09/30/05
Proffitt's 03/15/11
Sears 09/30/05
New Towne Mall Elder-Beerman 10/31/08
New Philadelphia, OH......... 338,838 169,516 508,354 100.0 78.4 Hills 01/31/14
Regal Cinemas 03/31/05
JCPenney 09/30/03
OfficeMax 11/30/11
Phar-Mor 06/30/10
Sears 10/31/03
Northtown Mall Best Buy 01/31/10
Blaine, MN ............. 488,546 336,803 825,349 100.0 74.0 HomePlace 10/31/11
Kohl's 08/31/08
Mervyn's California 01/31/03
Montgomery Ward (5)
River Valley Mall Elder-Beerman 09/30/07
Lancaster, OH................ 316,947 261,391 578,338 100.0 88.3 Hills 01/31/13
Regal Cinemas 12/31/04
JCPenney 09/30/02
Lazarus 09/30/02
Sears 10/31/04
Southside Mall JCPenney 07/31/01
Oneonta, NY............. 142,719 81,821 224,540 100.0 77.0 Kmart 06/30/08
OfficeMax 12/31/12
University Mall Burdines (5)
Tampa, FL.................... 890,743 411,707 1,302,450 100.0 85.8 Cobb Theatre 12/31/11
Dillard's (5)
JCPenney 10/31/04
Montgomery Ward (5)
Sears (5)
Weberstown Mall Barnes & Noble 01/31/09
Stockton, CA................ 602,817 235,895 838,712 100.0 79.7 Dillard's (5)
JCPenney 03/31/04
Sears (2) 01/31/03
---------- --------- ---------
SUBTOTAL ...................... 6,194,780 3,736,484 9,931,264 97.0 85.7
--------- --------- ---------
PROPERTIES OWNED IN VENTURES: (4)
Almeda Mall, Foley's (5)
Houston, TX.................. 584,403 207,359 791,762 95.4 72.6 JCPenney (5)
Palais Royal 12/31/09
Ross Stores 03/31/03
Colonial Park Mall Bon-Ton 01/29/05
Harrisburg, PA.......... 504,446 244,254 748,700 100.0 92.6 Boscov's (5)
Sears (5)
Dayton Mall, The JCPenney 03/31/11
Dayton, OH ............. 836,967 484,838 1,321,805 100.0 84.5 Lazarus (5)
Sears (5)
Elder-Beerman (5)
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (3)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Eastland Mall Belk (5)
Charlotte, NC............ 725,720 341,022 1,066,742 100.0 89.0 Dillard's (5)
Ice Chalet 08/01/05
JCPenney (5)
Sears (5)
Great Mall of the Great Plains, The Burlington Coat
Olathe, KS.............. 397,211 384,664 781,875 100.0 73.7 Factory 01/31/08
Dickinson Theatres 12/31/08
Dillard's Clearance 08/14/01
Foozles 08/13/02
Group USA 08/13/07
Jeepers! 12/31/06
Kitchen & Co. 01/31/08
Linens'n Things 01/31/08
Marshalls 01/31/13
Oshman's
SuperSports USA 01/31/13
Mall at Johnson City, The Goody's 05/31/06
Johnson City, TN............. 334,605 215,138 549,743 100.0 86.7 JCPenney 03/31/00
Proffitt's for Her 10/31/12
Proffitt's for Men,
Kids & Home 06/30/06
Sears 03/09/01
Northwest Mall Foley's (5)
Houston, TX.................. 558,047 240,747 798,794 100.0 72.7 JCPenney (5)
OfficeMax 06/30/00
Palais Royal 12/31/09
SuperMall of the Great Northwest
Auburn, WA................... Ann Taylor Loft 01/31/06
532,750 400,274 933,024 65.6 80.6 Bed Bath &
Beyond 08/31/05
Burlington Coat
Factory 08/31/05
Foozles 12/31/05
Marshalls 12/31/11
Nordstrom Rack 08/31/05
Oshman's
SuperSports USA 01/31/11
---------- --------- -----------
SUBTOTAL....................... 4,474,149 2,518,296 6,992,445 95.3 81.7
---------- --------- ----------
TOTAL.......................... 10,668,929 6,254,780 16,923,709 96.3 84.1
========== ========= ==========
</TABLE>
(1) Includes outparcels.
(2) This is a ground lease. The Company owns the land and not the building.
(3) Lease expiration dates do not consider options to renew.
(4) The Operating Partnership has investments in these Mall Properties
ranging from 20.0% to 45.0%. The Company as the venture's managing
general partner, and GDC are responsible for management and leasing
services, respectively, and receive fees for providing these services.
(5) The tenant owns the land and the building and operates under an
operating agreement.
12
<PAGE> 13
(b) Community Centers
One hundred four of the Properties are Community Centers (including 17
single tenant retail properties) ranging in size from 13,000 to 490,400 square
feet of GLA. They are located in 24 states primarily in the East and the Midwest
as follows: Ohio (24), Pennsylvania (12), Tennessee (9), Kentucky (7), North
Carolina (6), South Carolina (6), West Virginia (6), Indiana (5), New York (5),
Florida (3), Virginia (3), Illinois (2), Massachusetts (2), Missouri (2),
Washington (2), Wisconsin (2), Alabama (1), Arizona (1), Colorado (1), Georgia
(1), Kansas (1), Michigan (1), Nebraska (1) and Texas (1). The location, general
character and major tenant information are set forth below.
SUMMARY OF COMMUNITY CENTERS AT DECEMBER 31, 1998
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMPANY OWNED PROPERTIES:
Arnold Plaza Kmart 11/30/02
Arnold, MO.................. 140,340 14,860 155,200 100.0 100.0 National 07/31/03
Supermarket
Artesian Square JCPenney 04/30/08
Martinsville, IN............ 150,601 25,400 176,001 100.0 100.0 Kroger 11/30/09
Wal-Mart 09/29/09
Ashland Plaza
Ashland, KY................. 90,574 42,126 132,700 100.0 100.0 Hills 01/31/03
Audubon Village
Henderson, KY............... 85,491 39,099 124,590 100.0 77.5 Wal-Mart 01/31/08
Aviation Plaza Piggly Wiggly 12/31/09
Oshkosh, WI................. 123,538 51,177 174,715 100.0 74.8 Wal-Mart 12/31/09
Ayden Plaza
Ayden, NC.................. 21,000 11,800 32,800 100.0 69.5 Food Lion 10/31/07
Barren River Plaza Goody's 10/31/00
Glasgow, KY................. 216,895 28,400 245,295 100.0 95.8 Wal-Mart 09/18/10
Peebles 09/26/10
Winn-Dixie 10/03/10
Bollweevil Shopping Center
Enterprise, AL.............. 30,625 12,760 43,385 100.0 92.2 Winn-Dixie 05/30/04
Buckhannon Plaza Ames 05/31/00
Tennerton, WV............... 70,951 13,865 84,816 100.0 85.6 A&P 04/30/00
Cambridge Plaza
Cambridge, OH............... 79,949 15,070 95,019 100.0 100.0 Hills 01/31/13
Canal Place Plaza
Rome, NY.................... 117,162 32,800 149,962 100.0 89.0 Kmart 08/31/19
Chillicothe Plaza
Chillicothe, OH............. 91,508 7,675 99,183 100.0 100.0 Hills 01/31/13
Clarksville Plaza Crossroads
Clarksville, IN............. 93,672 18,170 111,842 100.0 100.0 Furniture 01/31/04
Service
Merchandise 01/31/03
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
College Plaza Food Lion 09/29/12
Bluefield, VA............... 148,181 30,250 178,431 100.0 100.0 Wal-Mart 05/29/12
Corry Plaza G.C. Murphy Co. 04/30/02
Corry, PA.................. 69,698 38,669 108,367 100.0 100.0 Quality Farm
& Fleet 08/31/04
Cross Creek Plaza JCPenney 02/28/10
Beaufort, SC................ 170,406 71,712 242,118 100.0 92.9 Wal-Mart 11/10/09
Winn-Dixie 07/17/11
Crossing Meadows Festival Foods 06/27/10
Onalaska, WI................ 178,599 55,385 233,984 100.0 100.0 Wal-Mart 08/23/11
Crossroads Centre Goody's 10/31/01
Knoxville, TN............... 200,980 41,450 242,430 100.0 83.1 Ingles 09/25/10
Wal-Mart 01/31/09
Cumberland Crossing Food City 12/13/10
Jacksboro, TN............... 100,034 44,700 144,734 100.0 100.0 Wal-Mart 09/28/10
Cypress Bay Village Food Lion 12/20/10
Morehead City, NC........... 197,821 59,032 256,853 100.0 100.0 Sears 02/13/00
Wal-Mart 09/29/09
Dallas Plaza
Balch Springs, TX........... 112,609 10,500 123,109 100.0 100.0 Kmart 11/30/00
Daytona Plaza
Daytona Beach, FL............ 116,907 24,346 141,253 100.0 57.2 Kmart 11/30/03
Delaware Community Plaza
Delaware, OH................. 54,152 99,299 153,451 100.0 94.2 Kroger 03/31/13
East Pointe Plaza Food Lion 11/16/10
Columbia, SC................. 183,340 90,768 274,108 100.0 96.7 SuperPetz 03/31/06
Wal-Mart 01/31/09
East Pointe Plaza Big Bear 09/30/13
Marysville, OH............... 107,211 37,900 145,111 100.0 91.6 Wal-Mart 11/09/10
Franklin Square Goody's 05/31/99
Spartanburg, SC............. 197,764 38,800 236,564 100.0 100.0 Ingles 11/30/07
Wal-Mart 07/31/07
Georgesville Square Lowe's 10/31/16
Columbus, OH................ 194,909 99,793 294,702 100.0 92.8 Kroger 04/30/17
Grand Union
Chatham, NY................. 21,756 N/A 21,756 100.0 N/A Grand Union 07/31/19
Grand Union Plaza
South Glens Falls, NY....... 61,335 N/A 61,335 100.0 N/A Grand Union 06/30/19
Gratiot Center Kessel Food
Saginaw, MI................. 173,160 28,151 201,311 84.7 100.0 Market 10/31/09
Kmart 11/30/13
</TABLE>
14
<PAGE> 15
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Hills Plaza East
Erie, PA.................... 77,000 19,025 96,025 100.0 66.4 Hills 10/31/02
Hocking Valley Mall Kmart 09/30/03
Lancaster, OH................ 147,817 31,670 179,487 100.0 100.0 Kroger 09/30/02
Horizon Park
Longmont, CO (3)............. 84,180 N/A 84,180 100.0 N/A Kmart 11/30/00
Hunter's Ridge Shopping Center
Gahanna, OH.................. 84,180 92,430 176,610 100.0 92.7 Kmart 06/30/01
Huntington Plaza
Huntington, WV............... 24,975 7,200 32,175 100.0 100.0 Kroger 10/31/01
Indian Mound Plaza
Heath, OH.................... N/A 16,600 16,600 N/A 36.1 N/A N/A
Kmart
Alliance, NE (3)............. 40,800 N/A 40,800 100.0 N/A Kmart 03/31/08
Kmart
Bloomington, IN............... 87,405 N/A 87,405 100.0 N/A Kmart 11/30/05
Kmart
Clifton Heights, PA.......... 87,543 N/A 87,543 100.0 N/A Kmart 10/31/04
Kmart
Fairhaven, MA................ 91,653 N/A 91,653 100.0 N/A Kmart 11/30/02
Kmart
Feasterville, PA............. 94,500 N/A 94,500 100.0 N/A Kmart 06/30/03
Kmart
Langhorne, PA................ 95,810 N/A 95,810 100.0 N/A Kmart 11/30/99
Kmart
Leechburg, PA................ 85,909 N/A 85,909 100.0 N/A Kmart 05/31/06
Kmart
Norfolk, VA (3).............. 120,997 N/A 120,997 100.0 N/A Kmart 07/30/99
Kmart Shopping Center
Puyallup, WA................. 91,657 38,509 130,166 100.0 76.6 Kmart 11/30/03
Kmart
Seekonk, MA.................. 105,900 N/A 105,900 0.0 N/A N/A N/A
Kmart
Yakima, WA................... 116,799 N/A 116,799 100.0 N/A Kmart 09/30/99
Knox Village Square Big Bear 01/29/13
Mount Vernon, OH............. 173,033 34,400 207,433 100.0 100.0 JCPenney 05/31/08
Kmart 01/31/18
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lexington Parkway Plaza Belk (2) 04/10/11
Lexington, NC................ 152,852 57,298 210,150 100.0 100.0 Goody's 03/31/00
Ingles 09/25/10
Wal-Mart 12/29/09
Liberty Plaza
Morristown, TN............... 29,000 29,700 58,700 100.0 81.1 Food Lion 05/31/03
Linden Corners
Buffalo, NY.................. 80,000 10 80,010 100.0 100.0 Hills 01/31/14
Logan Place Houchens 11/30/08
Russellville, KY............. 89,848 24,900 114,748 100.0 100.0 Wal-Mart 03/31/08
Lowe's
Altoona, PA.................. 121,148 N/A 121,148 100.0 N/A Lowe's 11/30/14
Lowe's
Columbus, OH................. 125,357 N/A 125,357 100.0 N/A Lowe's 12/31/14
Lowe's
Marion, OH................... 72,507 N/A 72,507 100.0 N/A Lowe's 07/31/13
Lowe's
Wooster, OH.................. 71,463 N/A 71,463 100.0 N/A Lowe's 07/31/13
Loyal Plaza Bi-Lo 05/31/12
Loyalsock, PA (3).......... 174,617 109,417 284,034 100.0 100.0 Family Toy
Warehouse 01/31/03
Kmart 08/31/01
Marion Towne Centre Piggly Wiggly 08/31/12
Marion, SC................... 102,913 53,630 156,543 100.0 97.5 Wal-Mart 06/19/12
Meadowview Square
Ravenna/Kent, OH............. 126,242 25,000 151,242 100.0 38.0 Wal-Mart 01/28/17
Middletown Plaza
Middletown, OH............... 104,125 26,000 130,125 73.9 59.6 Hills 02/28/02
Mill Run
Columbus, OH................. 125,357 46,862 172,219 100.0 100.0 Lowe's 12/31/14
Monroe Shopping Center Ingles 11/30/02
Madisonville, TN............. 64,746 28,450 93,196 100.0 100.0 Wal-Mart 01/31/03
Morgantown Commons OfficeMax 08/31/11
Morgantown, WV............... 200,187 30,656 230,843 100.0 90.1 Phar-Mor 06/30/06
SuperKmart 02/28/21
Morgantown Plaza
Star City, WV................ 74,540 28,824 103,364 100.0 86.5 Hills 10/31/02
Morningside Plaza
Dade City, FL................ 33,896 41,221 75,117 100.0 77.9 Kash `N Karry 06/30/05
Mount Vernon Plaza Heilig-Meyers 09/12/06
Mt.Vernon, OH................ 49,932 11,756 61,688 100.0 100.0 Odd Lots 01/31/04
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
New Boston Mall
Portsmouth, OH............... 84,180 44,550 128,730 100.0 90.0 Kmart 11/30/03
Newberry Square Shopping Wal-Mart 09/30/07
Center - Newberry, SC........ 104,588 22,240 126,828 100.0 100.0 Winn-Dixie 12/09/07
Newport Plaza II
Newport, KY (3).............. 84,180 14,800 98,980 100.0 100.0 Kmart 06/13/04
North Horner Shopping Center
Sanford, NC.................. 22,486 17,650 40,136 100.0 47.9 Food Lion 09/11/02
Northtowne Square
Chattanooga, TN.............. 42,130 29,200 71,330 100.0 95.9 Bi-Lo 09/30/01
Ohio River Plaza Big Bear 11/18/09
Gallipolis, OH............... 105,857 43,136 148,993 100.0 94.4 Hills 01/31/20
Pea Ridge Shopping Center Kmart 10/31/04
Huntington, WV............... 110,192 39,860 150,052 100.0 100.0 Kroger 02/29/00
Perdido Point Plaza
Pensacola, FL................ 36,987 9,600 46,587 100.0 100.0 Delchamps 04/30/05
Plaza Vista Mall JCPenney 02/28/04
Sierra Vista, AZ............. 161,043 53,229 214,272 100.0 100.0 Wal-Mart 10/14/11
Prestonsburg Village Center Big Lots 12/31/00
Prestonsburg, KY............. 134,057 41,290 175,347 100.0 94.2 Wal-Mart 09/30/05
Winn-Dixie 01/30/06
Rend Lake Shopping Center Big John's 10/31/99
Benton, IL................... 96,913 24,470 121,383 100.0 95.1 Wal-Mart 01/31/07
Rhea County Shopping Ingles 02/28/03
Dayton, TN................... 71,952 40,050 112,002 100.0 96.0 Wal-Mart 09/30/03
River Edge Plaza Food City 11/01/08
Sevierville, TN (3).......... 108,829 27,396 136,225 100.0 55.9 Wal-Mart (6) 09/30/03
River Valley Plaza Big Bear 05/31/09
Lancaster, OH................ 173,000 50,865 223,865 100.0 100.0 Family Toy
Warehouse 10/30/99
Target 10/03/14
Roane County Plaza Goody's 02/28/00
Rockwood, TN................. 124,848 35,350 160,198 100.0 100.0 Ingles 02/28/10
Wal-Mart 01/31/10
Scott Town Plaza
Bloomsburg, PA............... 47,334 30,300 77,634 100.0 72.3 Kmart 08/31/01
Shady Springs Plaza
Beaver, WV................... 37,232 30,345 67,577 100.0 74.6 Kroger 09/30/08
Sidney Shopping Center
Sidney, NY................... 50,071 N/A 50,071 100.0 N/A Grand Union 07/31/19
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Southside Plaza Food Lion 12/17/11
Sanford, NC.................. 147,693 24,600 172,293 100.0 100.0 Wal-Mart 12/29/11
Springfield Commons West Big Bear 03/31/15
Springfield, OH.............. 213,017 N/A 213,017 100.0 N/A Lowe's 01/31/15
Toys "R" Us 01/31/08
Steamboat Bend Hannibal Farm
Hannibal, MO................. 81,272 25,420 106,692 100.0 100.0 & Home 08/25/02
Wetterau 10/31/00
Stewart Plaza
Mansfield, OH................ 30,979 27,069 58,048 100.0 100.0 Kroger 10/31/99
Sunbury Plaza Ames 08/14/03
Sunbury, PA.................. 91,131 49,265 140,396 100.0 75.6 Bi-Lo (5) 08/31/03
Sycamore Square Food Lion 01/20/10
Ashland City, TN............. 75,552 27,000 102,552 100.0 83.0 Wal-Mart 11/11/08
Target Plaza
Heath, OH.................... 97,000 N/A 97,000 100.0 N/A Target 11/29/14
Torresdale Plaza
Philadelphia, PA............. 130,882 11,400 142,282 73.2 0.0 Kmart 11/30/01
Twin County Plaza Ingles 01/31/07
Galax, VA.................... 122,273 38,440 160,713 100.0 95.8 Wal-Mart 12/31/07
Village Plaza Bi-Lo 11/30/08
Augusta, GA.................. 450,331 40,100 490,431 100.0 83.0 Goody's 11/30/98
Home Quarters 01/31/09
OfficeMax 01/31/02
Sam's Club 07/11/08
Wal-Mart 10/28/08
Village Plaza Falley's Food
Manhattan, KS................ 31,431 24,276 55,707 100.0 89.9 4 Less 10/31/00
Village Square
Kutztown, PA................. N/A 28,450 28,450 N/A 100.0 N/A N/A
Vincennes Kmart 06/30/99
Vincennes, IN (3)............ 108,682 N/A 108,682 100.0 N/A Kroger 12/31/00
Walgreens
Louisville, KY............... 13,000 N/A 13,000 100.0 N/A Walgreens 01/31/25
Walgreens
New Albany, IN................. 13,000 N/A 13,000 100.0 N/A Walgreens 09/30/24
Wal-Mart Plaza
Springfield, OH.............. 155,198 45,305 200,503 80.3 58.8 Wal-Mart 10/27/15
Walnut Cove
Walnut Cove, NC.............. 32,000 26,450 58,450 100.0 72.8 Ingles 03/31/06
</TABLE>
18
<PAGE> 19
<TABLE>
<CAPTION>
% OF % OF LEASE
ANCHORS STORES TOTAL ANCHORS STORES EXPIRATION
PROPERTY/LOCATION GLA GLA (1) GLA OCCUPIED OCCUPIED ANCHORS (4)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Walterboro Plaza Piggly Wiggly 09/09/10
Walterboro, SC............... 99,730 32,400 132,130 100.0 100.0 Wal-Mart 06/23/09
Westpark Plaza
Carbondale, IL (3)........... 31,170 24,152 55,322 100.0 78.2 Kroger 03/31/08
--------- --------- ----------
SUBTOTAL....................... 10,530,276 2,816,173 13,346,449 97.9 90.2
---------- --------- ----------
PROPERTY OWNED IN VENTURE: (7)
Polaris Towne Center
Columbus, OH................. 64,280 N/A 64,280 100.0 N/A Kroger 11/30/18
--------- --------- ----------
SUBTOTAL....................... 64,280 N/A 64,280 100.0 N/A
--------- --------- ----------
TOTAL.......................... 10,594,556 2,816,173 13,410,729 97.9 90.2
========== ========= ==========
</TABLE>
(1) Includes outparcels
(2) This is a ground lease. The Company owns the land and not the building.
(3) The Company ground leases the land for this Community Center.
(4) Lease expiration dates do not consider options to renew.
(5) Bi-Lo vacated the store on October 31, 1998, but continues to pay rent
through lease expiration 08/31/03.
(6) Wal-Mart vacated the store on September 30, 1995, but continues to pay
rent through lease expiration 9/30/03.
(7) The Operating Partnership has an investment in this Community Center of
50.0%. The Company as the venture's managing general partner, and GDC
are responsible for management and leasing services, respectively, and
receive fees for providing these services.
Eight of the Community Centers are subject to long-term ground leases
where a third party owns the underlying land and has leased the land to the
Company. The expiration dates of the ground leases (assuming the exercise by the
Company of all of its options to extend the terms of such leases) range from May
2038 to April 2082. The Company pays rent, ranging from $1,500 to $60,000 per
annum, for the use of the land and generally is responsible for the costs and
expenses associated with maintaining the building and improvements thereto. In
addition, some of the ground leases provide for sharing of the percentage rents
collected, if any. At the end of the lease term, unless extended, the land,
together with all improvements thereon, will revert to the land owner without
compensation to the lessee.
(d) Properties Subject to Indebtedness
To finance the acquisition and development of the Properties, the
Company has entered into mortgage loans and a credit facility which are
described below.
THE NOMURA LOAN ($181.0 MILLION)
The Nomura loan was originated by Nomura and is evidenced by four notes
(collectively, the "Notes" and individually, a "Note"): (i) two notes, each in
the principal amount of $40.0 million, one of which bears interest at the rate
of 6.995% per annum and matures on February 1, 1999, and the other of which
bears interest at the rate of 7.505% per annum and that was scheduled to mature
on February 1, 2003; (ii) a note in the principal amount of $76.0 million which
bears interest at the rate of 7.625% per annum and matures on August 1, 2000;
and (iii) a note in the principal amount of $25.0 million which bears interest
at the rate of 6.935% per annum and matures on October 1, 2000. Each of the
Notes provides for monthly payments of interest only with the principal amount
due on maturity. The borrowers under the Nomura loan are Holdings, Centers and
GCLP (collectively, the "Borrowers").
19
<PAGE> 20
Each Note prohibits prepayment (other than upon casualty or
condemnation), except that the $40.0 million Note executed by Holdings which was
scheduled to mature on February 1, 1999 may be prepaid during the last six
months of its term and the other three Notes may be prepaid during the last 12
months of their respective terms. The $40.0 million note was prepaid, in full,
without penalty on January 28, 1999 in conjunction with the refinancing of Grand
Central Mall. Upon payment of the $40.0 million note, Grand Central Mall was
released from the loan collateral and GCLP was released as Borrower.
The Nomura loan is a non-recourse loan. Payment of principal and
interest on the Nomura loan is secured by first mortgage liens on 55 Properties,
26 of which are owned by Holdings and 29 of which are owned by Centers (the
"Nomura Properties"), and a pledge of the partnership interests in each of the
Borrowers, which interests are held by an affiliate of GRT. These mortgages are
cross-collateralized and cross-defaulted.
The Nomura loan contains customary representations, covenants and
events of default. In addition, it requires that (i) the Borrowers comply with
certain affirmative and negative covenants, including covenants restricting the
incurrence of additional indebtedness on the Nomura Properties; (ii) each
Borrower establish and maintain certain reserve funds; and (iii) the general
partner of each Borrower have an independent director whose vote will be
required for certain specified actions, including the making of any bankruptcy
filing by the respective Borrower. Neither GRT nor the Operating Partnership is
a party to, and neither has guaranteed any amount in respect of, the Nomura
loan, other than certain limited indemnification obligations primarily relating
to potential environmental liabilities and the pledge of partnership interests
as described above.
The Nomura loan also provides that the Nomura Properties will be
managed by the Company or a third party selected by the Company, provided that
the Company, or any other party then managing such property, may be removed as
manager of such properties if an event of default occurs under such loan or if
the ratio of the sum of (i) the net operating income of the Nomura Properties
during the preceding 12 calendar months and (ii) all interest earned during such
period on U.S. government obligations delivered to Nomura as substituted
collateral for the Nomura Properties released (as described in the paragraph
above), decreases below an amount equal to 75.0% of the net operating income for
the Nomura Properties determined as of September 30, 1993, (approximately $23.8
million) for three consecutive months.
THE CIGNA LOAN ($50.0 MILLION)
The CIGNA loan is secured by first mortgage liens on 10 Properties,
bears interest at a rate equal to 7.470% per annum and is payable, interest
only, until maturity on October 26, 2002. These mortgages are
cross-collateralized and cross-defaulted. On January 1, 1998, CIGNA sold this
loan to The Lincoln National Life Insurance Company.
THE CREDIT FACILITY ($190.0 MILLION)
In May 1997, the Company amended its credit facility to (i) increase
the amount the Company can borrow thereunder to $190.0 million, (ii) extend the
term of the credit facility, to July 31, 1998, which term could be extended to
July 31, 1999 (iii) reduce the interest rate schedule, and (iv) grant first
mortgage liens on 11 Properties. On April 29, 1998, the Company extended the
term of the credit facility to July 31, 1999. Borrowings under the credit
facility currently bear interest at a rate equal to LIBOR plus 170 basis points
per annum (6.8125% at December 31, 1998). Payments due under the credit facility
are guaranteed by GRT and by GPC. As of December 31, 1998, the Company had
outstanding borrowings of approximately $163.0 million under the credit
facility.
The credit facility, as amended, contains customary covenants,
representations, warranties and events of default, including maintenance of a
specified minimum net worth requirement, loan to value ratios, project costs to
asset value ratios, total debt to asset value ratios and EBITDA to total debt
service, restrictions on the incurrence of additional indebtedness and approval
of anchor leases with respect to the Properties which secure the credit
facility.
20
<PAGE> 21
THE UNIVERSITY MALL LOAN ($71.4 MILLION)
The University Mall loan was originated by Nomura and is secured by a
first mortgage lien on University Mall. The loan consists of (i) a note in the
principal amount of $64.9 million with interest at a rate of approximately 8.23%
per annum and maturing in January 2028 with a prepayment option in January 2013
and (ii) a buy up payment from Nomura of $6.5 million which reduces the
effective interest rate to 7.09% per annum.
THE COMMUNITY CENTER LOANS ($101.9 MILLION)
The Community Center loans are secured by first mortgage liens on 15
Properties. The loans bear interest at rates ranging from 7.375% to 9.125% per
annum, require payments of principal and interest and mature between June 1999
and April 2016.
THE BRIDGE LOANS ($89.0 MILLION)
The bridge loans are secured by first mortgage liens on 15 Properties
and second mortgage liens on two Properties. The bridge loans bear interest at
interest rates ranging from LIBOR plus 160 to 575 basis points per annum (7.147%
to 11.375% at December 31, 1998), require payments of interest only and mature
between February 1999 and July 1999. A $15.0 million bridge loan on Montgomery
Mall was paid off at maturity on February 1, 1999 and a one-time principal
payment of $1.0 million on Weberstown Mall was due and paid on January 13, 1999.
THE NORTHTOWN MALL LOAN ($40.0 MILLION)
The Northtown Mall loan was originated by Nomura and is secured by a
first mortgage lien on Northtown Mall. The loan bears interest at a rate equal
to LIBOR, which is fixed at 5.662% per annum during the loan term pursuant to an
existing interest rate swap agreement, plus 125 basis points per annum (6.912%
at December 31, 1998) and is payable interest only until maturity on August 30,
2001.
THE WEBERSTOWN MALL LOAN ($11.5 MILLION)
The Weberstown Mall loan is secured by a first mortgage lien on
Weberstown Mall. The loan bears interest at a rate equal to 8.80% per annum and
requires payments of principal and interest until maturity on November 15, 2016.
THE MONTGOMERY MALL LOAN ($47.6 MILLION)
The Montgomery Mall loan was originated by Lehman Brothers and is
secured by a first mortgage lien on Montgomery Mall. The loan bears interest at
a rate equal to 6.74% per annum and requires payments of principal and interest
until maturity on August 1, 2028. The loan has a prepayment option in August
2005.
THE MORGANTOWN MALL LOAN ($58.2 MILLION)
The Morgantown Mall loan was originated by Nomura and is secured by
first mortgage liens on Morgantown Mall and Morgantown Commons. The loan bears
interest at a rate equal to 6.89% per annum and requires payments of principal
and interest until maturity on September 11, 2028. The loan has a prepayment
option in September 2008. Both Properties were previously encumbered under a
$50.2 million loan which was prepaid without penalty on September 1, 1998.
THE LLOYD CENTER LOAN ($130.0 MILLION)
The Lloyd Center loan was originated by Goldman Sachs and is secured by
a first mortgage lien on Lloyd Center. The loan bears interest at a rate equal
to LIBOR plus 125 basis points per annum (6.790% at December 31, 1998) and is
payable interest only until maturity on October 11, 2001.
21
<PAGE> 22
THE CONSTRUCTION LOANS
Georgesville Square Loan
In September 1996, the Company entered into a construction loan to
finance the development of Georgesville Square, a Community Center in Columbus,
Ohio, pursuant to which the Company has a right to borrow $16.9 million. The
construction loan is due October 1, 1999, is subject to two extensions of six
months each, and is payable monthly, interest only, at LIBOR plus 200 basis
points (7.626% at December 31, 1998). As of December 31, 1998, the Company had
borrowed $16.9 million under this construction loan.
Georgesville Cinema Loan
In December 1997, the Company entered into a construction loan to
finance the development of a 63,000 square-foot Regal Cinema at Georgesville
Square, a Community Center in Columbus, Ohio, pursuant to which the Company has
the right to borrow $6.2 million. The construction loan is due October 1, 1999,
is subject to two extensions of six months each, and is payable monthly,
interest only at LIBOR plus 200 basis points (7.626% at December 31, 1998).
As of December 31, 1998, the Company had borrowed $5.6 million under this
construction loan.
Meadowview Square Loan
In October 1996, the Company entered into a construction loan to
finance the development of Meadowview Square, a Community Center in Kent, Ohio,
pursuant to which the Company has a right to borrow $9.8 million. The
construction loan is due November 1, 1999, is subject to two extensions of six
months each, and is payable monthly, interest only, at LIBOR plus 200 basis
points (7.626% at December 31, 1998). As of December 31, 1998, the Company had
borrowed $9.5 million under this construction loan.
ITEM 3. LEGAL PROCEEDINGS
The Company is not presently involved in any material litigation nor,
to its knowledge, is any material litigation threatened against the Company or
its Properties, other than routine litigation arising in the ordinary course of
business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of fiscal year
1998.
22
<PAGE> 23
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
(a) Market Information
The Shares are currently listed and traded on the New York Stock
Exchange ("NYSE") under the symbol "GRT." On March 10, 1999, the last reported
sales price of the Shares on the NYSE was $15.000. The following table shows the
high and low sales prices for the Shares on the NYSE for the 1998 and 1997
quarterly periods indicated as reported by the New York Stock Exchange Composite
Tape and the cash distributions per Share paid by GRT with respect to each of
such periods.
<TABLE>
<CAPTION>
DISTRIBUTIONS
QUARTER ENDED HIGH LOW PER SHARE
------------- ---- --- ---------
<S> <C> <C> <C>
March 31, 1997 $21.750 $19.500 $0.4808
June 30, 1997 21.250 17.875 0.4808
September 30, 1997 23.000 20.438 0.4808
December 31, 1997 23.063 20.875 0.4808
March 31, 1998 22.750 21.125 0.4808
June 30, 1998 22.125 19.438 0.4808
September 30, 1998 20.125 16.250 0.4808
December 31, 1998 17.125 15.000 0.4808
</TABLE>
(b) Holders
The number of holders of record of the Shares was 969 as of March 10,
1999.
(c) Distributions
Future Share distributions paid by GRT will be at the discretion of the
trustees of GRT and will depend upon the actual cash flow of GRT, its financial
condition, capital requirements, the annual distribution requirements under the
REIT provisions of the Code and such other factors as the trustees of GRT deem
relevant.
GRT has implemented a Distribution Reinvestment and Share Purchase Plan
under which its shareholders or Operating Partnership unit holders may elect to
purchase additional Shares and/or automatically reinvest their distributions in
Shares. In order to fulfill its obligations under the plan, GRT may purchase
Shares in the open market or issue Shares that have been registered and
authorized specifically for the plan. As of December 31, 1998, 250,000 Shares
were authorized of which 45,713 Shares have been issued.
(d) Recent Sales of Unregistered Securities
The information required herein, is set forth under Item 1 (a), General
Development of Business.
23
<PAGE> 24
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth Selected Financial Data for the Company.
This information should be read in conjunction with the financial statements of
the Company and Management's Discussion and Analysis of the Financial Condition
and Results of Operations, each included elsewhere in this Form 10-K.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
OPERATING DATA (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS):
<S> <C> <C> <C> <C> <C>
Total revenues................................. $ 184,091 $ 140,138 $ 117,678 $ 104,248 $ 90,792
Operating expenses............................. 44,824 29,548 27,212 22,706 22,078
Depreciation and amortization.................. 35,825 27,869 22,418 20,560 17,599
General and administrative..................... 10,011 8,286 9,371 6,409 6,182
Interest expense............................... 48,823 42,146 29,297 26,215 22,928
Equity in income (loss) from unconsolidated entities (2,388) (661) 42
Interest income................................ 1,883 1,032 506 649 655
Gain on sales of property/outparcels........... 155 1,506
Non-recurring transfer cost.................... 2,055
Minority interest in operating partnership..... 2,623 3,022 3,385 3,294 2,137
Extraordinary item:
Extinguishment of debt-prepayment fees
and write-off of deferred financing cost.... 490 5,864
Net income..................................... 40,990 29,793 28,049 25,713 12,604
Preferred stock dividends...................... 20,079 4,705 268
Net income available to common shareholders.... 20,911 25,088 27,781 25,713 12,604
Per Common Share Data:
Earnings per share (basic and diluted)....... $ 0.88 $ 1.12 $ 1.27 $ 1.27 $ 0.74
Distributions................................ $ 1.9232 $ 1.9232 $ 1.9232 $ 1.9099 $ 1.7405
BALANCE SHEET DATA (IN THOUSANDS):
Real estate, before accumulated depreciation... $1,428,641 $1,091,422 $ 949,138 $696,898 $644,379
Real estate, after accumulated depreciation.... 1,291,412 983,811 862,717 630,199 595,413
Total assets................................... 1,558,495 1,163,798 949,402 669,003 637,084
Total debt..................................... 994,011 591,688 575,247 324,779 345,348
Total shareholders' equity (deficit).......... 391,075 411,055 269,211 284,691 (230,246)
OTHER DATA:
Ratio of earnings to combined fixed charges and
preferred stock dividends.................. 1.54x 1.59x 1.81x 1.98x 1.70x
Funds from operations (1) (in thousands)....... $ 64,803 $ 55,898 $ 51,382 $ 46,983 $ 38,686
Cash provided by operating activities (in thousands) 76,796 56,406 53,918 40,972 31,644
Cash (used in) investing activities (in thousands) (408,951) (244,823) (161,251) (49,195)(219,295)
Cash provided by financing activities (in thousands) 333,670 186,883 110,469 7,013 184,933
Number of properties (2)....................... 125 120 113 88 84
Total GLA (in thousands) (3) (4)............... 30,334 25,450 18,554 13,154 12,298
Occupancy rate % (2) (3)....................... 93.8% 94.0% 95.4% 95.6% 95.7%
</TABLE>
(1) Management considers funds from operations (FFO) to be a supplemental
measure of the Company's operating performance. FFO, as modified in January
1996 by NAREIT is defined as net income (computed in accordance with
Generally Accepted Accounting Principles ("GAAP")), less gains or losses
from debt restructuring, plus real estate depreciation and amortization and
plus minority interest in partnership. FFO does not represent cash
generated from operating activities in accordance with GAAP and is not
necessarily indicative of cash available to fund cash needs. FFO should not
be considered as an alternative to net income, as the primary indicator of
the Company's operating performance, or as an alternative to cash flow as a
measure of liquidity.
(2) Number of Properties open at the end of the period including three
Properties at December 31, 1997, leased or managed by the Company, in which
the Company did not hold an ownership interest. Occupancy of the Properties
is defined as any space where a tenant is open and/or paying rent at the
date indicated, excluding all tenants with leases having an initial term of
less than one year.
(3) 1998 includes 7.1 million square feet of GLA, 1997 includes 3.4 million
square feet of GLA and 1996 includes 549,000 square feet of GLA, owned
by joint ventures in which the Operating Partnership has interests
ranging from 20.0% to 50.0%.
(4) 1997 includes 2.5 million square feet of GLA leased or managed by the
Company in which the Company did not hold an ownership interest.
24
<PAGE> 25
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following should be read in conjunction with the unaudited
consolidated financial statements of GRT including the respective notes thereto,
all of which are included in this Form 10-K.
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997
REVENUES
Total revenues increased 31.4%, or $44.0 million, for the year ended
December 31, 1998. Of the $44.0 million increase, $41.1 million was the result
of increased revenues at the Mall Properties, $2.1 million was the result of
increased revenues at the Community Centers, $1.5 million was the result of
decreased revenues from dispositions and $2.3 million was related to other
revenue increases.
Minimum rents
Minimum rents increased 22.3%, or $24.0 million, for the year ended
December 31, 1998.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
------------------------------------------------------------
MALL COMMUNITY PERCENT
PROPERTIES CENTERS TOTAL TOTAL
---------- ------- ----- -----
<S> <C> <C> <C> <C>
Same center.................. $ 1.6 $ 1.5 $ 3.1 2.9%
Acquisitions/Developments.... 22.0 0.1 22.1 20.5
Dispositions................. 0.0 (1.2) (1.2) (1.1)
------- ------ ----- -----
$23.6 $ 0.4 $24.0 22.3%
====== ===== ===== ====
</TABLE>
Percentage rents
Percentage rents increased $1.5 million for the year ended December 31,
1998. Percentage rents at the Mall Properties increased $1.7 million while
percentage rents at the Community Centers decreased $200,000.
Tenant recoveries
Tenant recoveries reflect a net increase of 56.8%, or $13.7 million, for
the year ended December 31, 1998.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
------------------------------------------------------------
MALL COMMUNITY PERCENT
PROPERTIES CENTERS TOTAL TOTAL
---------- ------- ----- -----
<S> <C> <C> <C> <C>
Same center.................. $1.4 $ 0.4 $ 1.8 7.5%
Acquisitions/Developments.... 12.1 0.0 12.1 50.1
Dispositions................. 0.0 (0.2) (0.2) (0.8)
------- ------- ----- ----
$13.5 $ 0.2 $13.7 56.8%
===== ======= ===== ====
</TABLE>
Other revenues
The $4.7 million increase in other revenues is primarily the result of
increases in management fee revenues of $2.4 million, and an increase of $2.3
million in temporary tenant income at the Mall Properties.
25
<PAGE> 26
OPERATING EXPENSES
Total operating expenses increased 51.7%, or $15.3 million, for the
year ended December 31, 1998. Recoverable operating expenses increased $15.1
million, the provision for credit losses decreased $600,000 and other operating
expenses increased $700,000.
Recoverable expenses
Recoverable expenses increased 57.4%, or $15.1 million for the year
ended December 31, 1998.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-----------------------------------------------------------
MALL COMMUNITY PERCENT
PROPERTIES CENTERS TOTAL TOTAL
---------- ------- ----- -----
<S> <C> <C> <C> <C>
Same center.................. $ 2.0 $ 0.7 $ 2.7 10.3%
Acquisitions/Developments... 12.7 0.0 12.7 48.2
Dispositions................. 0.0 (0.3) (0.3) (1.1)
----- ----- ----- -----
$14.7 $ 0.4 $ 15.1 57.4%
===== ===== ====== =====
</TABLE>
Provision for credit losses
The provision for credit losses was approximately $1.7 million and
represented 1.0% of tenant revenues for the year ended December 31, 1998,
compared to 1.6% of tenant revenues for the year ended December 31, 1997.
Depreciation and amortization
The $8.0 million increase in depreciation and amortization consists
primarily of an increase of $5.9 million from Mall Property acquisitions, an
increase of $1.5 million in the core portfolio Properties and an $800,000
increase in corporate expense, offset with a decrease of $200,000 from
dispositions.
GENERAL AND ADMINISTRATIVE
General and administrative expense was $10.0 million and represented
5.4% of total revenues for the year ended December 31, 1998, compared to $8.3
million and 5.9% of total revenues for the corresponding period in 1997. The
increase in expense is primarily due to an increase in the number of corporate
associates as a result of the Company's growth during 1998.
INTEREST EXPENSE/CAPITALIZED INTEREST
Interest expense increased 15.8%, or $6.7 million, for the year ended
December 31, 1998. The summary below identifies the increase by its various
components (dollars in thousands).
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
--------------------------------------------------
1998 1997 INC. (DEC.)
---- ---- -----------
<S> <C> <C> <C>
Average loan balance..................... $806,253 $586,916 $219,337
Average rate............................. 7.25% 7.66% (0.41)%
Total interest........................... 58,453 44,970 13,483
Less: Capitalized interest.............. (6,666) (3,053) (3,613)
Add: Amortization of rate buydown....... 517 776 (259)
Other (1)................................ (3,481) (547) (2,934)
-------- --------- ---------
Interest expense......................... $ 48,823 $ 42,146 $ 6,677
======== ========= =========
</TABLE>
(1) Other consists primarily of interest costs billed to joint venture entities.
26
<PAGE> 27
RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
REVENUES
Total revenues increased 19.1%, or $22.5 million, for the year ended
December 31, 1997. Of the $22.5 million increase, $1.1 million was the result of
increased revenues at the Mall Properties, $21.7 million was the result of
increased revenues at the Community Centers, and $345,000 was related to
non-property revenue decreases.
Minimum rents
Minimum rents increased 23.1%, or $20.2 million, for the year ended
December 31, 1997.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-------------------------------------------------------
MALL COMMUNITY PERCENT
PROPERTIES CENTERS TOTAL TOTAL
---------- --------- ----- -------
<S> <C> <C> <C> <C>
Same center................... $ 0.6 $ 0.1 $ 0.7 0.8%
Acquisitions/Developments..... 0.4 19.0 19.4 22.2
Dispositions.................. 0.0 0.1 0.1 0.1
------- ------- ------- -----
$ 1.0 $ 19.2 $ 20.2 23.1%
====== ======= ======= ====
</TABLE>
Percentage rents
Percentage rents increased $600,000 for the year ended December 31,
1997. Of this increase, $160,000 was earned at the Mall Properties and $440,000
was earned at the Community Centers.
Tenant recoveries
Tenant recoveries reflect a net increase of 8.1%, or $1.8 million, for
the year ended December 31, 1997 compared to the year ended December 31, 1996.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-----------------------------------------------------
MALL COMMUNITY PERCENT
PROPERTIES CENTERS TOTAL TOTAL
---------- --------- ----- -------
<S> <C> <C> <C> <C>
Same center................... $ (0.5) $ (0.1) $ (0.6) (2.7)%
Acquisitions/Developments..... 0.2 2.2 2.4 10.8
------ ------ ------ ----
$ (0.3) $ 2.1 $ 1.8 8.1%
====== ====== ====== =====
</TABLE>
Other revenues
The $180,000 decrease in other revenues is primarily the result of
increases in management fee revenues from unconsolidated joint ventures of $1.2
million and an increase of $410,000 in temporary tenant income at the Mall
Properties, offset by a decrease of $2.0 million from the RPI Properties
incentive management fee in 1996.
OPERATING EXPENSES
Total operating expenses increased 8.6%, or $2.3 million, for the year
ended December 31, 1997. Recoverable expenses increased $2.2 million, the
provision for credit losses increased $170,000 and other operating expenses
decreased $90,000 primarily as a result of the acquisition and development
activities.
27
<PAGE> 28
Recoverable expenses
Recoverable operating expenses increased 9.4%, or $2.2 million, for the year
ended December 31, 1997.
<TABLE>
<CAPTION>
INCREASE (DOLLARS IN MILLIONS)
-------------------------------------------------------
MALL COMMUNITY PERCENT
PROPERTIES CENTERS TOTAL TOTAL
---------- --------- ----- -------
<S> <C> <C> <C> <C>
Same center.................. $ (0.7) $ (0.1) $ (0.8) (3.4)%
Acquisitions/Developments.... 0.2 2.8 3.0 12.8
------- ------ ------ ----
$ (0.5) $ 2.7 $ 2.2 9.4%
====== ====== ====== ====
</TABLE>
The decrease in the same center expenses at the Mall Properties
reflects a $1.0 million decrease in real estate taxes and a $330,000 increase in
other operating expenses. Same center Community Center expenses reflect an
increase in real estate taxes of $30,000 and a decrease of $120,000 in other
operating expenses. The increase in recoverable operating expenses from
acquisitions and developments was primarily the result of the RPI Properties
acquisition.
Provision for credit losses
The provision for credit losses was $2.2 million and represented 1.6%
of tenant revenues for the year ended December 31, 1997, compared to 1.8% of
tenant revenues for the year ended December 31, 1996.
Depreciation and amortization
The $5.5 million increase in depreciation and amortization consists of
an increase of $3.9 million from acquisitions (principally the RPI Properties),
an increase of $450,000 from the opening of two new Community Centers, an
increase of $710,000 in the core portfolio Properties and the balance from
increased loan fee amortization on the Company's credit facility.
GENERAL AND ADMINISTRATIVE
In the second quarter of 1996, the Company began to increase its staff
levels to support the RPI Properties acquisition and expand development and
construction activities. In addition, the Company formed GDC on October 16,
1996, and transferred 51 employees in the construction, development, leasing and
legal departments to GDC. The GDC staff provides services to the Company, to
ventures in which the Company has an ownership interest and to third parties for
a fee. GDC, an unconsolidated non-qualified REIT subsidiary, is subject to
federal income taxes. The Company also receives management fees for the services
provided by its operations staff to ventures.
INTEREST EXPENSE/CAPITALIZED INTEREST
Interest expense increased 43.9%, or $12.8 million, for the year ended
December 31, 1997. The summary below identifies the increase by its various
components (dollars in thousands).
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------
1997 1996 INC. (DEC.)
---- ---- -----------
<S> <C> <C> <C>
Average loan balance..................... $586,916 $421,661 $165,255
Average rate............................. 7.66% 7.46% 0.20%
Total interest........................... 44,970 31,456 13,514
Less: Capitalized interest.............. (3,053) (3,394) 341
Add: Amortization of rate buydown....... 776 776
Other.................................... (547) 459 (1,006)
--------- --------- ---------
Interest expense......................... $ 42,146 $ 29,297 $ 12,849
========= ========= =========
</TABLE>
28
<PAGE> 29
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The Company has several active development, renovation and expansion
projects and will continue to secure other projects in these areas.
On April 29, 1998, the Company elected to extend the term of its credit
facility to July 31, 1999. The Company is currently in discussions with its bank
group and expects to execute an 18 month extension of its credit facility prior
to July 31, 1999. In June 1998, the Company, in connection with the Northtown
Mall acquisition, secured a $40.0 million mortgage note payable which matures on
August 30, 2001 and bears interest at LIBOR plus 125 points. In August 1998, the
Company entered into a SWAP agreement which fixed the LIBOR rate at 5.662% per
annum and fixed the interest rate on this note at 6.912% per annum. In July
1998, the Company, in connection with the Montgomery Mall acquisition, secured a
$47.6 million mortgage note payable which matures in August 2028 with a
prepayment option in August 2005 and bears interest at 6.740% per annum. In
August 1998, the Company, in connection with the Weberstown Mall acquisition,
assumed an existing mortgage of $11.5 million which matures in November 2016 and
bears interest at 8.800% per annum. Also in August 1998, the Company refinanced
a maturing $50.2 million mortgage note payable on Morgantown Mall, with a new
$58.2 million mortgage note payable which matures in September 2028 with a
prepayment option in September 2008 and bears interest at 6.890% per annum. In
September 1998, the Company, in connection with the Lloyd Center acquisition,
secured a $130.0 million mortgage note payable which matures in October 2001 and
bears interest at LIBOR plus 125 basis points. The Company entered into an
interest rate protection agreement for this loan which capped LIBOR at 7.750%
per annum. Additionally, the Company entered into three short term notes payable
agreements of $39.0 million, of which $10.0 million has a maturity date of March
15, 1999, $15.0 million has a maturity date of February 1999 and $14.0 million
has a maturity date of April 13, 1999. The $15.0 million note payable was
paid-off at maturity.
Management anticipates that the funds available under its credit
facility, its construction financing, long-term mortgage debt, venture structure
for acquisitions and developments, the issuance of preferred and common stock
and the proceeds from the sale of assets will provide sufficient capital
resources to carry out the Company's business strategy relative to the
renovations, expansions and developments discussed herein. Based upon its
current debt-to-market capitalization, the Company does not expect to pursue
significant additional acquisitions until such time as the Company has access to
additional equity capital.
At December 31, 1998, the Company's debt-to-total-market capitalization
was 61.0%, as a result of a lower equity price for the Company's Shares and an
increase in outstanding debt. The Company's intent is to maintain this ratio
between approximately 40.0% and 60.0% and the Company is working toward reducing
this ratio below 60.0% in 1999.
Net cash provided by operating activities for the twelve months ended
December 31, 1998, was $76.8 million versus $56.4 million for the corresponding
period of 1997. Net income adjusted for non-cash items accounted for a $20.3
million increase, while changes in operating assets and liabilities accounted
for a $75,000 increase.
Net cash used in investing activities for the twelve months ended
December 31, 1998, was $409.0 million, and reflects additional direct
investments in real estate assets, including the acquisition of Northtown Mall
for approximately $54.0 million, Montgomery Mall for $70.0 million and Lloyd
Center for $168.0 million and additional indirect investments in real estate
through investments in unconsolidated entities of $75.6 million.
Net cash provided by financing activities for the twelve months ended
December 31, 1998, was $333.7 million. Cash was provided by net additional
borrowings under the credit facility of $73.0 million and issuance of mortgage
and notes payable of $390.0 million. Cash was used to fund distributions of
$67.3 million and principal payments on mortgage and notes payable of $62.4
million.
29
<PAGE> 30
ACQUISITION, EXPANSION, RENOVATION AND DEVELOPMENT ACTIVITY
The Company continues to be active in its acquisition, expansion,
renovation and development activities. Its business strategy is to grow the
Company's assets and cash flow available to, among other things, provide for
dividend requirements.
ACQUISITIONS
During 1998, the Company completed certain strategic acquisitions which
will complement and enhance its existing portfolio. On January 15, 1998, the
Company, in a joint venture with Nomura, completed a transaction for the
recapitalization of the ownership of the SuperMall of the Great Northwest in
Seattle, Washington, for $103.0 million. The SuperMall of the Great Northwest
consists of approximately 933,000 square feet of GLA including nine anchors. The
Company has a 34.85% ownership interest in this Property.
On March 31, 1998, the Company purchased an interest in a joint venture
which owns Almeda Mall and Northwest Mall, both in Houston, Texas. The two
Properties were previously purchased by Nomura on October 1, 1997 for $39.0
million. Almeda Mall consists of approximately 792,000 square feet of GLA
including five anchors and Northwest Mall consists of approximately 799,000
square feet of GLA including four anchors. The Company had managed these
Properties since November 1, 1997. The Company has a 20.0% ownership interest in
the entity that owns these Properties.
On June 1, 1998, the Company completed the acquisition of Northtown
Mall in Blaine, Minnesota, for a purchase price of approximately $54.0 million.
Northtown Mall consists of approximately 825,000 square feet of GLA and includes
as anchors Best Buy, HomePlace, Kohl's, Mervyn's California and Montgomery Ward.
On July 16, 1998, the Company completed the acquisition of Montgomery
Mall in Montgomery, Alabama, for a purchase price of approximately $70.0
million. Montgomery Mall consists of approximately 728,000 square feet of GLA
and includes as anchors Dillard's, Parisian and JCPenney.
On August 1, 1998, the Company completed the acquisition of Weberstown
Mall in Stockton, California, for a purchase price of approximately $23.0
million. Weberstown Mall has approximately 839,000 square feet of GLA and
includes as anchors Barnes & Noble, Dillard's, JCPenney and Sears.
On August 20, 1998, the Company, in a joint venture with Nomura
completed the acquisition of Eastland Mall in Charlotte, North Carolina, for a
purchase price of $54.0 million. The Company has a 20.0% ownership interest in
the entity that owns this Property. Eastland Mall consists of approximately 1.1
million square feet of GLA and includes as anchors Belk, Dillard's, Ice Chalet,
JCPenney and Sears.
On September 15, 1998, the Company completed the acquisition of Lloyd
Center in Portland, Oregon, for a purchase price of approximately $168.0
million. Lloyd Center consists of approximately 1.5 million square feet of GLA
and includes as anchors Ice Chalet, Lloyd Mall Cinemas, Marshalls, Meier &
Frank, Nordstrom and Toys "R" Us.
EXPANSIONS AND RENOVATIONS
The Company maintains a strategy of selective expansions and
renovations in order to improve the operating performance and the competitive
position of its existing portfolio. The Company also engages in an active
redevelopment program with the objective of attracting innovative retailers
which management believes will enhance the operating performance of the
Properties.
Grand Central Mall
The expansion and renovation of this Mall Property located in
Parkersburg, West Virginia, continues and will increase its GLA to approximately
900,000 square feet upon completion. The initial phase, which was completed in
1996, added a food court as well as relocated and enlarged the cinema. An
approximately 23,500 square-foot OfficeMax opened in January 1998 and a new
83,000 square-foot Proffitt's opened in March 1998.
30
<PAGE> 31
County Market will be relocating to a new 58,000 square-foot outparcel building
currently under construction in March 1999 and the Company expects to retenant
the existing 38,500 square-foot building in 1999.
Georgesville Square
A new 63,000 square-foot 16-screen cinema opened in May 1998. The
budgeted construction costs for the cinema totaled approximately $6.2 million,
of which $5.6 million has been spent to date.
River Valley Mall
In March 1998, the Company announced plans for an expansion at this
Mall Property with the addition of an approximately 23,500 square-foot OfficeMax
on one of the Property's outparcels, which opened in August 1998.
Indian Mound Mall
The Company is in the process of expanding the existing Elder-Beerman
store at this Mall Property by approximately 21,000 square feet of GLA. Upon
completion in the first quarter of 1999, the mall's GLA will increase to
approximately 564,000 square feet.
The Mall at Fairfield Commons
The Company is in the process of expanding this Mall Property with the
addition of an 89,000 square-foot Regal Cinemas on one of the Property's
outparcels, which is expected to open in the second quarter of 1999.
DEVELOPMENTS
Polaris Towne Center
In March 1998, the Company, in a joint venture in which it has a 50.0%
ownership interest, commenced construction of an approximately 700,000 696,000
square-foot power Community Center in northern Columbus, Ohio. Upon completion,
the Community Center will feature grocery and discount store anchors,
restaurants, big box retailers and several specialty shops. The initial anchor,
Kroger, opened in the fourth quarter of 1998 with the remainder of the space
expected to open through the fall of 1999. The required equity for Polaris Towne
Center was funded in the joint venture during 1998 and the joint venture has a
construction loan facility in place that is sufficient to fund the balance of
the estimated cost of the project.
Jersey Gardens
The Company, in a joint venture in which the Company has a 30.0%
ownership interest, is currently developing a 1.3 million square-foot
value-oriented fashion and entertainment megamall, ("Jersey Gardens"), located
in Elizabeth, New Jersey. Construction of the Mall Property and related
infrastructure is underway and completion is projected for fourth quarter of
1999. The required equity for Jersey Gardens and off-site improvements have been
funded. The Company has also arranged a construction loan facility for the
project and has met the pre-leasing requirements of the loan.
Polaris Fashion Place
In March 1998, the Company announced plans for the development of a new
super-regional Mall Property of approximately 1.5 million square feet in
northern Columbus, Ohio. Polaris Fashion Place is expected to be a bi-level mall
featuring six anchor tenants, approximately 150 mall stores and four
restaurants, which will be located across the street from Polaris Towne Center
and is projected to open in 2001.
31
<PAGE> 32
Carson
The Company has a contingent contract to acquire the land for a
value-oriented super-regional Mall Property located in Carson, California.
Bolingbrook
In October 1998, the Company announced plans for the development of a
1.0 million square-foot super-regional Mall Property in the Chicago suburb of
Bolingbrook, Illinois. The Company has obtained an option to acquire a 203-acre
parcel as the site of this project, which could open in 2001.
Capital Invested in Real Estate
Investment in real estate has increased $337.2 million since December
31, 1997 (in thousands):
<TABLE>
<CAPTION>
NAME OF PROPERTY/DESCRIPTION COST PROJECT TYPE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Northtown Mall $ 53,902 Acquisition
Montgomery Mall 70,567 Acquisition
Weberstown Mall 26,454 Acquisition
Lloyd Center 168,456 Acquisition
Georgesville Square 3,738 Development
Grand Central Mall 5,181 Renovation/Expansion
Indian Mound Mall 1,774 Renovation/Expansion
The Mall at Fairfield Commons 1,484 Expansion
River Valley Mall 1,557 Renovation/Expansion
Piedmont Plaza (10,414) Sale
Capital Expenditures 7,787 Various (1)
Various Properties, Net 6,733
--------
$337,219
========
</TABLE>
(1) Capital expenditures include tenant improvements and tenant allowances on
second generation space of $5,501 and routine, recurring maintenance capital
expenditures that cannot be passed through to the tenants of $2,286.
PORTFOLIO DATA
Tenants reporting sales data in the table below for the twelve month
periods ended December 31, 1998 and 1997, represent 15.4 million square feet of
GLA, or 84.9% of the 1998/1997 "same store" population.
<TABLE>
<CAPTION>
MALL PROPERTIES COMMUNITY CENTERS
------------------------- ----------------------
PROPERTY TYPE SALES PSF % INCREASE SALES PSF %INCREASE
------------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Anchors............................ $ 164.83 (0.1)% $ 239.12 2.7%
Stores............................. $ 266.48 3.8 % $ 190.13 6.2%
Total.............................. $ 213.87 2.1 % $ 233.15 3.0%
</TABLE>
32
<PAGE> 33
Portfolio occupancy statistics by property type are summarized below:
<TABLE>
<CAPTION>
OCCUPANCY (1) (2)
-------------------------------------------------------------
12/31/98 9/30/98 6/30/98 3/31/98 12/31/97
-------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Mall Anchors........................ 96.3% 96.5% 97.7% 97.6% 99.5%
Mall Stores......................... 84.1% 82.5% 79.2% 79.8% 82.6%
Mall Stores Comparable 12 Months.... 84.1% 82.3% 82.8% 82.1% 82.6%
Total Mall Portfolio................ 91.8% 91.3% 91.0% 91.1% 93.3%
Community Center Anchors............ 98.7% 97.9% 97.9% 97.6% 97.3%
Community Center Stores............. 90.2% 88.1% 87.6% 85.9% 85.9%
Total Community Centers............. 96.7% 95.6% 95.5% 94.9% 94.7%
Single Tenant Retail Properties..... 92.2% 92.2% 92.2% 92.2% 92.2%
Total Community Center Portfolio.... 96.3% 95.3% 95.2% 94.6% 94.4%
</TABLE>
(1) Occupancy statistics included in the above table are based on the total
Company Portfolio which includes Properties owned by the Company and
Properties held in joint ventures.
(2) Occupied space is defined as any space where a tenant is occupying the
space and/or paying rent at the date indicated, excluding all tenants
with leases having an initial term of less than one year.
FUNDS FROM OPERATIONS
Management considers FFO to be a supplemental measure of the Company's
operating performance. FFO does not represent cash generated from operating
activities in accordance with GAAP and is not necessarily indicative of cash
available to fund cash needs. FFO should not be considered as an alternative to
net income, as the primary indicator of the Company's operating performance, or
as an alternative to cash flow as a measure of liquidity. The following table
illustrates the calculation of FFO for the years ending December 31, 1998, 1997
and 1996 (in thousands):
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net income available to common shareholders............... $20,911 $25,088 $27,781
Add back (less):
Real estate depreciation and amortization............ 32,151 25,283 20,173
GRT share of joint venture depreciation
and amortization.................................. 8,628 2,660 43
Gain on sale......................................... (155)
Extraordinary item................................... 490
Minority interest in partnership..................... 2,623 3,022 3,385
-------- --------- ---------
Funds from operations..................................... $64,803 $55,898 $51,382
======= ======= =======
</TABLE>
FFO increased 15.9%, or $8.9 million for the year ended December 31,
1998. The increase was the result of improved property net operating income of
$28.7 million and an increase in the FFO from unconsolidated entities of $4.2
million, partially offset by increased interest expense of $6.7 million, and an
increase in preferred stock dividends of $15.4 million.
FFO increased 8.8%, or $4.5 million for the year ended December 31,
1997. The increase was the result of improved property net operating income of
$20.1 million and an increase in the FFO from unconsolidated entities of $2.6
million, partially offset by increased interest expense of $12.8 million and an
increase in preferred stock dividends of $4.4 million.
ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 131, "Disclosures About Segments
of an Enterprise and Related Information." SFAS No. 131 is effective for
financial statements for fiscal years beginning after December 15, 1997. SFAS
No. 131
33
<PAGE> 34
establishes standards for publicly-held business enterprises to report
information about operating segments in annual financial statements and requires
that these enterprises report selected information about operating segments in
interim financial reports issued to shareholders. The Company has adopted SFAS
No. 131 in its 1998 annual report on Form 10-K.
In July 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 is effective for financial statements for fiscal quarter of fiscal years
beginning after June 15, 1999. The Company will be required to adopt SFAS No.
133 effective January 1, 2000. SFAS No. 133 standardizes the accounting for
derivative instruments by requiring that all entities recognize them as assets
and liabilities in the balance sheet and subsequently measure them at fair
market value. It also prescribes specific accounting principles to be applied to
hedging activities and hedging transactions which are significantly different
from prior accounting principles. The Company has not yet determined the impact
of SFAS No. 133.
The Company recognizes that Year 2000 issues may have an impact on its
business, operations and financial condition. The Company has completed an
assessment of its Year 2000 readiness with respect to all of its information
technology ("IT") systems and the reliability and condition of its non-IT
systems. The Company has obtained status updates regarding Year 2000 issues on
these systems either via contacting the manufacturers and vendors, or by
acquiring the necessary information from their websites.
The Company's IT systems generally consist of file servers, operating
systems, application programs and workstations that utilize purchased systems.
The Company has evaluated the Year 2000 compliance status of each vendor and
believes that its existing systems and planned upgrades, to be completed by
second quarter 1999, will be Year 2000 compliant. Implementation of planned
upgrades will not result in significant additional cost to the Company. The
Company does not have any mainframe/midrange computer codes to verify. The data
generated using off-the-shelf packages is being analyzed and fixed to use the
proper date format.
All of the Company's servers and workstations use Intel based
processors and the Company has used third party applications to verify these
systems. Planned upgrades and new purchases have eliminated several
non-compliant systems. The Company plans to phase-out the remaining older
computers during the second quarter 1999. The majority of the remaining issues
will be resolved via a planned upgrade to Windows 2000 and MS Office 2000 later
this year. The Company is currently negotiating with IT firms to verify its
tests and validate its correction and testing methods.
The costs incurred by the Company at the present time have been
internal costs only. The Company expects to spend no more than $30,000 for
outside consultants to give additional assurance on its IT systems. The source
of these funds will be from operations. The significant risks to the Company in
the event that Year 2000 issues are not identified and corrected include the
possibility that IT system problems could cause delays or errors in processing
financial and operation information. The Year 2000 issue has not affected any of
the Company's IT system decisions. At the present time the Company has planned
upgrades in progress that will not be delayed or accelerated due to Year 2000
issues.
The Company's contingency plan recognizes that the biggest exposures
are non-IT systems which may result in Year 2000 issues. These exposures are
facility related and encompass areas such as HVAC systems, elevators, security,
lighting, telecommunications, electrical, plumbing, fire and sprinkler controls,
as well as our reliance on outside contractors for services such as security,
janitorial and exterior maintenance. At the present time, the Company has not
identified any instances where Year 2000 issues will require material costs to
repair or replace any of these systems. If failure does incur in any of these
provided services as a result of Year 2000 issues, the Company is prepared to
correct the problem with manual labor, either hired or internally which could
cause a short term limitation in the efficiency of the Company's Properties
operations.
While the Company believes its planning efforts are adequate to address
its Year 2000 concerns, there can be no guarantee that the systems of other
companies on which the Company's systems and operations rely will be converted
on a timely basis and will not have a material effect on the Company.
34
<PAGE> 35
OTHER
The shopping center industry is seasonal in nature, particularly in the
fourth quarter during the holiday season when tenant occupancy and retail sales
are typically at their highest levels. In addition, shopping malls achieve most
of their temporary tenant rents during the holiday season. As a result of the
above, earnings are generally highest in the fourth quarter of each year.
The retail industry has experienced some difficulty, which is reflected
in sales trends and in the bankruptcies and continued restructuring of several
prominent retail organizations. Continuation of these trends could impact future
earnings performance.
INFLATION
Inflation has remained relatively low during the past three years and
has had a minimal impact on the Company's Properties. Many tenants' leases
contain provisions designed to lessen the impact of inflation. Such provisions
include clauses enabling the Company to receive percentage rentals based on
tenants' gross sales, which generally increase as prices rise, and/or escalation
clauses, which generally increase rental rates during the terms of the leases.
In addition, many of the leases are for terms of less than 10 years, which may
enable the Company to replace existing leases with new leases at higher base
and/or percentage rentals if rents of the existing leases are below the
then-existing market rate. Substantially all of the leases, other than those for
anchors, require the tenants to pay a proportionate share of common area
maintenance, real estate taxes and insurance, thereby reducing the Company's
exposure to increases in costs and operating expenses resulting from inflation.
Inflation may however, have a negative impact on some of the Company's
other operating items. Interest expense and general and administrative expenses
may be adversely affected by inflation as these specified costs could increase
at a rate higher than rents. Also, for tenant leases with stated rent increases,
inflation may have a negative effect as the stated rent increases in these
leases could be lower than the increase in inflation at any given time.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following table presents descriptions of the financial instruments
and derivative instruments that are held by the Company at December 31, 1998,
and which are sensitive to changes in interest rates. The Company enters into
derivative financial instrument transactions in order to manage or reduce market
risk. Under interest-rate swaps, the Company agrees with other parties to
exchange, at specified intervals, the difference between fixed-rate and floating
rate interest amounts calculated by reference to an agreed notional principal
amount. The Company does not enter into derivative financial instrument
transactions for speculative purposes.
For the liabilities, the table represents principal calendar year cash
flows that exist by maturity date and the related average interest rate. For the
interest rate derivatives, the table presents the notional amounts and expected
interest rates that exist by contractual dates. The notional amount is used to
calculate the contractual payments to be exchanged under the contract. The
variable rates are estimated based upon the 30-day forward LIBOR rate which at
December 31, 1998 was 5.113%.
In August 1998, the Company entered into a three-year interest-rate
swap agreement which fixed LIBOR at 5.662% per annum on a notional amount of
$40,000. In September 1998, the Company also entered into a three-year interest
rate protection agreement on $130,000 of borrowings in which the obligor agreed
to reimburse the Company as a result of an increase in LIBOR above 7.750% per
annum. Both of these agreements have been reflected in the table below.
35
<PAGE> 36
All amounts are reflected in thousands:
<TABLE>
<CAPTION>
FAIR
1999 2000 2001 2002 2003 THEREAFTER TOTAL VALUE
---- ---- ---- ---- ---- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES:
Fixed rate............ $ 78,065 $ 133,045 $ 66,005 $58,216 $43,116 $201,510 $579,957 $582,433
Average interest rate. 7.259% 7.729% 7.934% 8.289% 7.183% 6.745% 7.253%
Variable rate......... $284,055 $130,000 $414,055 $414,055
Average interest rate. 7.163% 6.363% 6.913%
INTEREST RATE DERIVATIVES:
Notional amount....... $170,000 $170,000 $170,000 $170,000 $ (572)
Average pay rate...... 5.242% 5.242% 5.242% 5.242%
Average receive rate.. 5.113% 5.113% 5.113% 5.113%
</TABLE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and financial statement schedule of Glimcher
Realty Trust and the Report of Independent Accountants thereon are filed
pursuant to this Item 8 and are included in this report in Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding Trustees and executive officers of the Company is
incorporated herein by reference to GRT's definitive proxy statement to be filed
with the Securities and Exchange Commission within 120 days after the year
covered by this Form 10-K with respect to its Annual Meeting of Shareholders to
be held on May 12, 1999.
ITEM 11. EXECUTIVE COMPENSATION
Information regarding executive compensation of the Company is
incorporated herein by reference to GRT's definitive proxy statement to be filed
with the Securities and Exchange Commission within 120 days after the year
covered by this Form 10-K with respect to its Annual Meeting of Shareholders to
be held on May 12, 1999.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners
and management of the Company is incorporated herein by reference to GRT's
definitive proxy statement to be filed with the Securities and Exchange
Commission within 120 days after the year covered by this Form 10-K with respect
to its Annual Meeting of Shareholders to be held on May 12, 1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions of
the Company is incorporated herein by reference to GRT's definitive proxy
statement to be filed with the Securities and Exchange Commission within 120
days after the year covered by this Form 10-K with respect to its Annual Meeting
of Shareholders to be held on May 12, 1999.
36
<PAGE> 37
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
(a) (1) FINANCIAL STATEMENTS PAGE NUMBER
-------------------- -----------
<S> <C>
- Report of Independent Accountants.................................. 44
- Glimcher Realty Trust Consolidated Balance Sheets as of
December 31, 1998 and 1997......................................... 45
- Glimcher Realty Trust Consolidated Statements of Operations
for the years ended December 31, 1998, 1997 and 1996............. 46
- Glimcher Realty Trust Consolidated Statements of Shareholders'
Equity ended December 31, 1998, 1997 and 1996...................... 47
- Glimcher Realty Trust Consolidated Statements of Cash Flows
for the years ended December 31, 1998, 1997 and 1996............. 48
- Notes to Consolidated Financial Statements......................... 49
(2) FINANCIAL STATEMENT SCHEDULE
- Schedule III - Real Estate and Accumulated Depreciation............ 64
- Notes to Schedule III.............................................. 73
</TABLE>
(3) EXHIBITS
3.1 Amended and Restated Declaration of Trust of Glimcher
Realty Trust. (2)
3.2 Bylaws, as amended. (2)
3.3 Amendment to the Company's Amended and Restated
Declaration of Trust. (1)
3.4 Limited Partnership Agreement of Glimcher Properties
Limited Partnership. (13)
3.5 Amendment to Limited Partnership Agreement of
Glimcher Properties Limited Partnership. (13)
3.6 Amendment No.1 to Limited Partnership Agreement of
Glimcher Properties Limited Partnership. (13)
3.7 Amendment No.2 to Limited Partnership Agreement of
Glimcher Properties Limited Partnership. (13)
3.8 Amendment No.3 to Limited Partnership Agreement of
Glimcher Properties Limited Partnership. (13)
3.9 Amendment No.4 to Limited Partnership Agreement of
Glimcher Properties Limited Partnership. (13)
4.1 Specimen Certificate for Common Shares of Beneficial
Interest. (2)
4.2 Specimen Certificate evidencing 34,000 Shares of
Series A Convertible Preferred Shares. (8)
4.3 Specimen Certificate evidencing Series A-1
Convertible Preferred Shares. (11)
4.4 Specimen Certificate evidencing 9 1/4% Series B
Cumulative Redeemable Preferred Shares of Beneficial
Interest. (11)
4.5 Specimen Certificate evidencing Series C Convertible
Preferred Shares. (13)
4.6 Specimen Certificate evidencing 56,000 Shares of
Series D Convertible Preferred Shares of Beneficial
interest. (14)
10.1 Loan Agreement between Glimcher Properties Limited
Partnership, Glimcher Realty Trust, Glimcher
Properties Corporation and The Huntington National
Bank relating to the Credit Facility. (1)
10.2 First Amendment to Loan Agreement by and among The
Huntington National Bank, Glimcher Realty Trust and
Glimcher Properties Corporation relating to the
Credit Facility. (1)
10.3 Second Amendment to Loan Agreement, First Note
Extension Agreement and First Amendment to a Credit
Line Deed of Trust by and among The Huntington
National Bank, Glimcher Properties Limited
Partnership, Glimcher Realty Trust and Glimcher
Properties Corporation relating to the Credit
Facility. (1)
10.4 Revolving Note issued by Glimcher Properties Limited
Partnership in connection with the Credit Facility.
(1)
10.5 Executed Form of Open-End Mortgage, Assignment of
Rents and Security Agreement issued by Glimcher
Properties Limited Partnership in connection with the
Credit Facility. (1)
37
<PAGE> 38
10.6 Promissory Note issued by Morgantown Mall Associates
Limited Partnership in connection with the Morgantown
Loan. (2)
10.7 Credit Line Deed of Trust and Security Agreement,
issued by Morgantown Mall Associates Limited
Partnership in connection with the Morgantown Loan.
(2)
10.8 Amended and Restated Loan Agreement among Nomura
Asset Capital Corporation, Glimcher Holdings Limited
Partnership, Glimcher Centers Limited Partnership and
Grand Central Limited Partnership relating to the
Nomura Loan. (1)
10.9 Holdings A Note, Nonrecourse Mortgage Note executed
by Glimcher Holdings Limited Partnership, Glimcher
Centers Limited Partnership and Grand Central Limited
Partnership relating to the Nomura Loan. (1)
10.10 Holdings B Note, Nonrecourse Mortgage Note executed
by Glimcher Holdings Limited Partnership, Glimcher
Centers Limited Partnership and Grand Central Limited
Partnership relating to the Nomura Loan. (1)
10.11 Centers Note, Nonrecourse Mortgage Note executed by
Glimcher Holdings Limited Partnership, Glimcher
Centers Limited Partnership and Grand Central Limited
Partnership relating to the Nomura Loan. (1)
10.12 Grand Central Note, Nonrecourse Mortgage Note
executed by Glimcher Holdings Limited Partnership,
Glimcher Centers Limited Partnership and Grand
Central Limited Partnership relating to the Nomura
Loan. (1)
10.13 ISDA Master Agreement between The Huntington National
Bank and Glimcher Properties Limited Partnership. (1)
10.14 Agreement by and between Glimcher Properties Limited
Partnership and Start Marketing, Inc. (1)
10.15 Continuing Guaranty issued by Glimcher Realty Trust
guaranteeing payment of obligations of Glimcher
Properties Limited Partnership in connection with the
Credit Facility. (1)
10.16 Continuing Guaranty issued by Glimcher Properties
Corporation guaranteeing payment of obligations of
Glimcher Properties Limited Partnership in connection
with the Credit Facility. (1)
10.17 Exemplar of Mortgage/Deed of Trust, Assignment of
Leases, Security Agreement and Fixture Filing issued
by Glimcher Holdings Limited Partnership in
connection with the Nomura Loan. (1)
10.18 Exemplar of Mortgage/Deed of Trust, Assignment of
Leases, Security Agreement and Fixture Filing and
Modification of Mortgage/Deed of Trust issued by
Glimcher Centers Limited Partnership in connection
with the Nomura Loan. (1)
10.19 Deed of Trust, Assignment of Leases, Security
Agreement and Fixture Filing and Modification of Deed
of Trust issued by Grand Central Limited Partnership
in connection with the Nomura Loan. (1)
10.20 Glimcher Realty Trust 1993 Employee Share Option
Plan. (2)
10.21 Glimcher Realty Trust 1993 Trustee Share Option Plan.
(2)
10.22 First Amended and Restated Loan Agreement dated as of
June 30, 1995, between Glimcher Properties Limited
Partnership, Glimcher Realty Trust, Glimcher
Properties Corporation, The Huntington National Bank,
Society National Bank and a Bank Group. (3)
10.23 Revolving Promissory Note dated June 30, 1995, in the
amount of $87.5 million executed by Glimcher
Properties Limited Partnership to The Huntington
National Bank. (3)
10.24 Revolving Promissory Note dated June 30, 1995, in the
amount of $87.5 million executed by Glimcher
Properties Limited Partnership to Society National
Bank. (3)
10.25 Guaranty dated June 30, 1995, issued by Glimcher
Realty Trust in favor of The Huntington National
Bank. (3)
10.26 Guaranty dated June 30, 1995, issued by Glimcher
Properties Corporation in favor of The Huntington
National Bank.(3)
10.27 Guaranty dated June 30, 1995, issued by Glimcher
Realty Trust in favor of Society National Bank.(3)
10.28 Guaranty dated June 30, 1995, issued by Glimcher
Properties Corporation in favor of Society National
Bank. (3)
10.29 Promissory Note dated as of October 26, 1995, issued
by Glimcher Properties Limited Partnership in the
amount of twenty seven million six hundred thousand
dollars ($27,600,000). (4)
38
<PAGE> 39
10.30 Exemplar Open-End Mortgage, Security Agreement and
Fixture Filing issued by Glimcher Properties Limited
Partnership in connection with the Connecticut
General Life Insurance Company Loan. (4)
10.31 Exemplar Second Mortgage and Security Agreement dated
as of October 26, 1995, issued by Glimcher Properties
Limited Partnership in connection with the
Connecticut General Life Insurance Company Loan. (4)
10.32 Exemplar Assignment of Rents and Leases dated as of
October 26, 1995, issued by Glimcher Properties
Limited Partnership in connection with the
Connecticut General Life Insurance Company Loan. (4)
10.33 Promissory Note dated as of October 26, 1995, issued
by Glimcher Properties Limited Partnership in the
amount of six million two hundred thousand dollars
($6,200,000). (4)
10.34 Promissory Note dated as of October 26, 1995, issued
by Glimcher Properties Limited Partnership in the
amount of three million six hundred thousand dollars
($3,600,000). (4)
10.35 Promissory Note dated as of October 26, 1995, issued
by Glimcher Properties Limited Partnership in the
amount of three million three hundred thousand
dollars ($3,300,000). (4)
10.36 Promissory Note dated as of October 26, 1995, issued
by Glimcher Properties Limited Partnership in the
amount of four million two hundred thousand dollars
($4,200,000). (4)
10.37 Promissory Note dated as of October 26, 1995, issued
by Glimcher Properties Limited Partnership in the
amount of five million one hundred thousand dollars
($5,100,000). (4)
10.38 Completion Guaranty dated as of October 26, 1995,
issued by Glimcher Properties Limited Partnership and
Glimcher Realty Trust in favor of Connecticut General
Life Insurance Company. (4)
10.39 Purchase and Sale Agreement by and among the Company
and Retail Property Investors, Inc., PaineWebber
Retail Property Investments, Ltd., PaineWebber Retail
Property Investments Joint Venture, PaineWebber
College Plaza, LP., and PaineWebber Marion Towne,
L.P., dated as of March 11, 1996, as amended. (6)
10.40 Securities Purchase Agreement among Partnership
Acquisition Trust II, Glimcher Properties Limited
Partnership and Glimcher Realty Trust, dated November
26, 1996. (7)
10.41 Articles Supplementary designating 40,000 Shares of
Series A Convertible Preferred Shares Beneficial
Interest. (8)
10.42 Second Amendment to First Amended and Restated Loan
Agreement. (7)
10.43 Second Amended and Restated Loan Agreement dated as
of May 15, 1997, between Glimcher Properties Limited
Partnership, Glimcher Realty Trust, Glimcher
Properties Corporation, The Huntington National Bank,
("Huntington"), KeyBank National Association
("KeyBank"), Fleet National Bank ("Fleet"), Star
Bank, National Association ("Star"), PNC Bank,
National Association ("PNC"), The Provident Bank
("Provident"), National City Bank of Columbus
("National City") and Bankers Trust Company ("Bankers
Trust"). (9)
10.44 Form of Revolving Note for each of the eight (8)
individual notes, dated May 15, 1997, and executed by
Glimcher Properties Limited Partnership. (9)
a. Huntington in the amount of $32.5 million;
b. KeyBank in the amount of $32.5 million;
c. Fleet in the amount of $20 million;
d. Star in the amount of $20 million;
e. PNC in the amount of $25 million;
f. Provident in the amount of $10 million;
g. National City in the amount of $20 million; and
h. Bankers Trust in the amount of $30 million.
10.45 Form of Guaranty for each of the eight (8) individual
guarantees, dated May 15, 1997, and issued by
Glimcher Realty Trust and Glimcher Properties
Corporation (9)
a. Huntington to the extent of $32.5 million;
b. KeyBank to the extent of $32.5 million;
c. Fleet to the extent of $20 million;
d. Star to the extent of $20 million;
e. PNC to the extent of $25 million;
f. Provident to the extent of $10 million;
g. National City to the extent of $20 million; and
h. Bankers Trust to the extent of $30 million.
39
<PAGE> 40
10.46 Security Agreement - Interest Rate Protection
Contract dated May 15, 1997, executed by Glimcher
Properties Limited Partnership in favor of Huntington
as Administrative Agent for the lenders. (9)
10.47 Executed Form of Open-End Mortgage, Assignment of
Rents and Security Agreement for each of the three
(3) individual mortgages, dated May 15, 1997, and
issued by Glimcher Properties Limited Partnership in
connection with the Credit Facility. (9)
10.48 Severance Benefits Agreement dated June 11, 1997, by
and among Glimcher Realty Trust, Glimcher Properties
Limited Partnership and Herbert Glimcher. (13)
10.49 Severance Benefits Agreement dated June 11, 1997, by
and among Glimcher Realty Trust, Glimcher Properties
Limited Partnership and William G. Cornely. (13)
10.50 Severance Benefits Agreement dated June 11, 1997, by
and among Glimcher Realty Trust, Glimcher Properties
Limited Partnership and William R. Husted. (13)
10.51 Severance Benefits Agreement dated June 11, 1997, by
and among Glimcher Realty Trust, Glimcher Properties
Limited Partnership and Michael P. Glimcher. (13)
10.52 Severance Benefits Agreement dated June 11, 1997, by
and among Glimcher Realty Trust, Glimcher Properties
Limited Partnership and George A. Schmidt. (13)
10.53 Severance Benefits Agreement dated June 11, 1997, by
and among Glimcher Realty Trust, Glimcher Properties
Limited Partnership and Timothy C. Getz. (13)
10.54 Underwriting Agreement, dated as of September 30,
1997, among Glimcher Realty Trust, Glimcher
Properties Limited Partnership and Prudential
Securities Incorporated. (10)
10.55 Amendment No. 1 dated as of November 6, 1997 to
Securities Purchase Agreement among Partnership
Acquisition Trust II, Glimcher Properties Limited
Partnership and Glimcher Realty Trust, dated November
26, 1996. (11)
10.56 Articles Supplementary classifying 5,520,000 Shares
of beneficial interest on Series B Cumulative
Redeemable Preferred Shares of Beneficial Interest.
(13)
10.57 Articles Supplementary designating 40,000 Shares of
Series A-1 Convertible Preferred Shares Beneficial
Interest. (13)
10.58 Articles Supplementary designating 56,000 Shares of
Series C Convertible Preferred Shares Beneficial
Interest. (13)
10.59 Promissory Note dated as of December 17, 1997, issued
by Glimcher University Mall Limited Partnership in
the amount of sixty four million eight hundred ninety
eight thousand five hundred forty six dollars
($64,898,546). (12)
10.60 Mortgage, assignment of rents, security agreement and
fixture filing by Glimcher University Mall Limited
Partnership to Nomura Asset Capital Corporation dated
as of December 17, 1997. (12)
10.61 Glimcher Realty Trust 1997 Incentive Plan. (13)
10.62 Articles Supplementary designating 56,000 Shares of
Series D Convertible Preferred Shares of Beneficial
interest. (14)
10.63 Exhibit A to Glimcher Properties Limited Partnership
Agreement, as amended, showing new OP Unit holders
following the purchase of Polaris Center, LLC. (13)
10.64 Promissory Note dated as of June 1, 1998, issued by
Glimcher Properties Limited Partnership in the amount
of fifty million dollars ($50,000,000).
10.65 Mortgage, assignment of leases and rents and security
agreement to Nomura Asset Capital Corporation dated
as of June 1, 1998.
10.66 Promissory Note dated as of June 1, 1998, issued by
Glimcher Northtown Venture, LLC in the amount of
forty million dollars ($40,000,000).
10.67 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.
10.68 Promissory note dated as of July 15, 1998, issued by
Montgomery Mall Associates Limited Partnership in the
amount of forty seven million seven hundred fifty
thousand dollars ($47,750,000).
10.69 Mortgage and security agreement by Montgomery Mall
Associates Limited Partnership to Lehman Brothers
Holdings, Inc. dated as of July 15, 1998.
10.70 Promissory note dated as of July 15, 1998, issued by
Glimcher Properties Limited Partnership in the amount
of fifteen million dollars ($15,000,000).
40
<PAGE> 41
10.71 Mortgage loan assumption agreement by and among
Weberstown Shopping Center, Center Properties,
Weberstown Mall, LLC and Aid Association for
Lutherans dated as of August 1, 1998.
10.72 Promissory Note dated as of September 1, 1998, issued
by Morgantown Mall Associates Limited Partnership in
the amount of fifty eight million three hundred fifty
thousand dollars ($58,350,000).
10.73 Deed of trust, assignment of leases and rents and
security agreement by Morgantown Mall Associates
Limited Partnership to Michael B. Keller (Trustee)
for the use and benefit of The Capital Company of
America, LLC dated as of September 1, 1998.
10.74 Promissory Note dated as of September 15, 1998,
issued by Glimcher Lloyd Venture, LLC in the amount
of one hundred thirty million dollars ($130,000,000).
10.75 Mortgage loan cooperation agreement to Goldman Sachs
Mortgage Company dated as of September 15, 1998.
10.76 Promissory Note dated as of September 15, 1998,
issued by Glimcher Properties Limited Partnership in
the amount of ten million dollars ($10,000,000).
10.77 Promissory Note dated as of October 13, 1998, issued
by Glimcher Properties Limited Partnership in the
amount of fourteen million dollars ($14,000,000).
10.78 Mortgage, assignment of rents and security agreement
by Glimcher Development Corporation to The Huntington
National Bank dated as of October 13, 1998.
10.79 Mortgage, assignment of rents and security agreement
by Glimcher Properties Limited Partnership to The
Huntington National Bank dated as of October 13,
1998.
10.80 Deed of Trust, assignment of rents and security
agreement by Glimcher Properties Limited Partnership
to The Huntington National Bank dated as of October
13, 1998.
10.81 Deed of Trust, assignment of rents and security
agreement by Glimcher Properties Limited Partnership
to The Huntington National Bank dated as of October
13, 1998.
10.82 Mortgage loan to Bankers Trust Company for Ohio
property, dated as of October 30, 1998.
10.83 Mortgage loan to Bankers Trust Company for Kansas
property, dated as of October 30, 1998.
10.84 Mortgage loan to Bankers Trust Company for New York
property, dated as of October 30, 1998.
10.85 Promissory Note dated as of November 1, 1998, issued
by Glimcher Properties Limited Partnership in the
amount of nineteen million dollars ($19,000,000).
21.1 Subsidiaries of the Registrant
23.1 Consent of Independent Accountants
27 Financial Data Schedule. (5)
(1) Incorporated by reference to GRT's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, filed with the
Securities and Exchange Commission on March 21, 1995.
(2) Incorporated by reference to GRT's Registration Statement No.
33-69740.
(3) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on July 26, 1995.
(4) Incorporated by reference to GRT's Form 8-K filed with the
Securities and exchange Commission on December 13, 1995.
(5) This exhibit is filed for EDGAR filing purposes only.
(6) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on November 7, 1996.
(7) Incorporated by reference to GRT's Annual Report Form 10-K for
the fiscal year ended December 31, 1996, filed with the
Securities and Exchange Commission on March 25, 1997.
(8) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on February 5, 1997.
(9) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission June 23, 1997.
(10) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on November 4, 1997.
(11) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on November 14, 1997.
(12) Incorporated by reference to GRT's Form 8-K filed with the
Securities and Exchange Commission on December 31, 1997.
41
<PAGE> 42
(13) Incorporated by reference to GRT's Annual Report Form 10-K for
the fiscal year ended December 31, 1997, filed with the
Securities and Exchange Commission on March 31, 1998.
(14) Incorporated by reference to GRT's Quarterly Report Form 10-Q
for the period ended June 30, 1998, filed with the Securities
and Exchange Commission on August 11, 1998.
(b) REPORTS ON FORM 8-K
-------------------
During the fiscal year ended December 31, 1998, the Company filed
the following Reports on Form 8-K.
- Form 8-K/A dated January 27, 1998, filed January 28, 1998.
- Form 8-K dated June 19, 1998, filed June 19, 1998.
- Form 8-K dated September 29, 1998, filed September 29, 1998.
- Form 8-K/A dated October 1, 1998, filed October 1, 1998.
42
<PAGE> 43
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
GLIMCHER REALTY TRUST
/s/ Herbert Glimcher
-------------------------------------------
Herbert Glimcher
Chairman of the Board, President and Chief
Executive Officer
March 9, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been executed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Herbert Glimcher Chairman of The Board, President March 9, 1999
- -------------------------------------------------- Chief Executive Officer (Principal
Herbert Glimcher Executive Officer) and Trustee
/s/ William G. Cornely Senior Executive Vice President, March 9, 1999
- ------------------------------------------------- Chief Operating Officer
William G. Cornely and Chief Financial Officer
/s/ William R. Husted Senior Vice President March 9, 1999
- -------------------------------------------------- of Construction and Trustee
William R. Husted
/s/ Michael P. Glimcher Senior Vice President March 9, 1999
- ------------------------------------------------- of Development,
Michael P. Glimcher Leasing and Trustee
/s/ Philip G. Barach Member, Board of Trustees March 9, 1999
- --------------------------------------------------
Philip G. Barach
/s/ Oliver Birckhead Member, Board of Trustees March 9, 1999
- --------------------------------------------------
Oliver Birckhead
/s/ E. Gordon Gee Member, Board of Trustees March 9, 1999
- --------------------------------------------------
E. Gordon Gee
/s/ David J. Glimcher Member, Board of Trustees March 9, 1999
- --------------------------------------------------
David J. Glimcher
/s/ Alan R. Weiler Member, Board of Trustees March 9, 1999
- --------------------------------------------------
Alan R. Weiler
/s/ Harvey Weinberg Member, Board of Trustees March 9, 1999
- --------------------------------------------------
Harvey Weinberg
</TABLE>
43
<PAGE> 44
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders
of Glimcher Realty Trust
In our opinion, the consolidated financial statements listed in the
index appearing under Item 14 (a) (1) present fairly, in all material respects,
the financial position of Glimcher Realty Trust and its subsidiaries at December
31, 1998 and 1997, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles. In addition, in our opinion, the
financial statement schedules listed in the index appearing under Item 14 (a)
(2) present fairly, in all material respects, the information set forth therein.
These financial statements and financial statement schedules are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements and financial statement schedules based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Columbus, Ohio
February 15, 1999
except for the last paragraph of Note 5, for which the date is March 9, 1999
44
<PAGE> 45
GLIMCHER REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PAR VALUE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1998 1997
---- ----
<S> <C> <C>
Investment in real estate:
Land................................................................ $ 171,266 $ 92,247
Buildings, improvements and equipment............................... 1,240,121 976,645
Developments in progress:
Land .............................................................. 6,183 6,541
Developments....................................................... 11,071 15,989
---------- ----------
1,428,641 1,091,422
Less accumulated depreciation....................................... 137,229 107,611
---------- ----------
Net investment in real estate...................................... 1,291,412 983,811
Cash and cash equivalents.............................................. 8,949 7,434
Cash in escrow......................................................... 11,327 7,668
Investment in unconsolidated entities.................................. 200,205 118,195
Tenant accounts receivable, net........................................ 29,050 23,507
Deferred expenses, net................................................. 10,742 7,980
Prepaid and other assets............................................... 6,810 15,203
---------- ----------
$1,558,495 $1,163,798
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable................................................. $ 831,011 $ 501,688
Notes payable.......................................................... 163,000 90,000
Accounts payable and accrued expenses.................................. 31,927 25,069
Distributions payable.................................................. 18,126 14,079
---------- ---------
1,044,064 630,836
Commitments and contingencies
Minority interest in partnership....................................... 33,356 31,907
Redeemable preferred shares:
Series A-1 and Series D convertible preferred shares of beneficial interest,
$0.01 par value, 90,000 shares issued and
outstanding as of December 31, 1998 and 1997, respectively........ 90,000 90,000
Shareholders' equity:
Series B cumulative 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, 23,711,098
and 23,669,960 shares issued and outstanding as of December 31,
1998 and 1997, respectively....................................... 237 237
Additional paid-in capital........................................... 353,117 348,433
Distributions in excess of accumulated earnings...................... (90,229) (65,565)
---------- ----------
$1,558,495 $1,163,798
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
45
<PAGE> 46
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Revenues:
Minimum rents.................................................... $131,918 $107,895 $ 87,660
Percentage rents................................................. 4,989 3,499 2,896
Tenant recoveries................................................ 37,928 24,186 22,384
Other............................................................ 9,256 4,558 4,738
--------- --------- ----------
Total revenues................................................. 184,091 140,138 117,678
--------- --------- ----------
Operating expenses:
Real estate taxes................................................ 16,662 10,868 10,233
Recoverable operating expenses................................... 24,866 15,515 13,893
--------- --------- ----------
41,528 26,383 24,126
Other operating expenses......................................... 3,296 3,165 3,086
--------- --------- ----------
Total operating expenses....................................... 44,824 29,548 27,212
--------- --------- ----------
Property net operating income.................................. 139,267 110,590 90,466
Depreciation and amortization......................................... 35,825 27,869 22,418
General and administrative............................................ 10,011 8,286 9,371
Gain on sales of property/outparcels.................................. 155 1,506
Interest income....................................................... 1,883 1,032 506
Interest expense...................................................... 48,823 42,146 29,297
Equity in income (loss) of unconsolidated entities.................... (2,388) (661) 42
Minority interest in operating partnership............................ 2,623 3,022 3,385
--------- --------- ----------
Income before extraordinary item...................................... 41,480 29,793 28,049
Extraordinary item:
Extinguishment of debt prepayment fees and write-off of
deferred financing fees......................................... 490
--------- --------- ----------
Net income..................................................... 40,990 29,793 28,049
Preferred stock dividends............................................. 20,079 4,705 268
--------- --------- ----------
Net income available to common shareholders.................... $ 20,911 $ 25,088 $ 27,781
========= ========= ==========
Earnings per share before extraordinary item (basic and diluted)...... $ 0.90 $ 1.12 $ 1.27
Extraordinary item ................................................... 0.02
--------- --------- -----------
Earnings per share (basic and diluted)................................ $ 0.88 $ 1.12 $ 1.27
========= ========= ==========
Cash distributions declared per common share of beneficial interest... $ 1.9232 $ 1.9232 $ 1.9232
========= ========= ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
46
<PAGE> 47
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON SHARES OF
SERIES A-1 AND D SERIES B BENEFICIAL INTEREST
CONVERTIBLE CUMULATIVE -----------------------
PREFERRED SHARES PREFERRED SHARES SHARES AMOUNT
---------------- ----------------- ------ ------
<S> <C> <C> <C> <C>
Balance, December 31, 1995........ 21,881,921 $219
---------- ----
Distributions declared, $1.9232 per share.
Proceeds from Distribution Reinvestment
and Share Purchase Plan 3,540
Other issuance of shares.................. 3,470
Preferred equity.......................... $34,000
Preferred stock dividends declared........
Net income................................
------- ---------- ----
Balance, December 31, 1996................. 34,000 21,888,931 219
------- ---------- ----
Distributions declared, $1.9232 per share.
Proceeds from Distribution Reinvestment
and Share Purchase Plan 11,211
Other issuance of shares.................. 19,818
Proceeds from Series B public offering.... $ 127,950
Net proceeds from public offering......... 1,750,000 18
Preferred equity.......................... 56,000
Preferred stock dividends declared........
Net income................................
Transfer to minority interest in partnership.
------- --------- ---------- ----
Balance, December 31, 1997................. 90,000 127,950 23,669,960 237
------- --------- ---------- ----
Distributions declared, $1.9232 per share
Proceeds from Distribution Reinvestment
and Share Purchase Plan 19,103
Other issuance of shares.................. 16,921
OP unit conversion........................ 5,114
Additional OP units issued ...............
Preferred stock dividends declared........
Net income................................
Transfer to minority interest in partnership.
------- --------- ---------- ----
Balance, December 31, 1998................. $90,000 $ 127,950 23,711,098 $237
======= ========= ========== ====
<CAPTION>
DISTRIBUTIONS
ADDITIONAL IN EXCESS OF
PAID-IN ACCUMULATED
CAPITAL EARNINGS TOTAL
---------- ----------- ----------
<S> <C> <C> <C>
Balance, December 31, 1995........ $316,558 $ (32,086) $ 284,691
-------- ---------- ----------
Distributions declared, $1.9232 per share. (42,096) (42,096)
Proceeds from Distribution Reinvestment
and Share Purchase Plan 60 60
Other issuance of shares.................. 55 55
Preferred equity.......................... (1,280) 32,720
Preferred stock dividends declared........ (268) (268)
Net income................................ 28,049 28,049
-------- ---------- ----------
Balance, December 31, 1996................. 316,673 (47,681) 303,211
-------- ---------- ----------
Distributions declared, $1.9232 per share. (42,972) (42,972)
Proceeds from Distribution Reinvestment
and Share Purchase Plan 232 232
Other issuance of shares.................. 342 342
Proceeds from Series B public offering.... (4,878) 123,072
Net proceeds from public offering......... 37,828 37,846
Preferred equity.......................... 56,000
Preferred stock dividends declared........ (4,705) (4,705)
Net income................................ 29,793 29,793
Transfer to minority interest in partnership. (1,764) (1,764)
-------- ---------- ----------
Balance, December 31, 1997................. 348,433 (65,565) 501,055
-------- ---------- ----------
Distributions declared, $1.9232 per share (45,575) (45,575)
Proceeds from Distribution Reinvestment
and Share Purchase Plan 275 275
Other issuance of shares.................. 209 209
OP unit conversion........................ 16 16
Additional OP units issued ............... 4,235 4,235
Preferred stock dividends declared........ (20,079) (20,079)
Net income................................ 40,990 40,990
Transfer to minority interest in partnership. (51) (51)
-------- ---------- ----------
Balance, December 31, 1998................. $353,117 $ (90,229) $ 481,075
======== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
47
<PAGE> 48
GLIMCHER REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................................... $ 40,990 $ 29,793 $ 28,049
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for doubtful accounts.......................... 1,670 2,242 2,072
Depreciation and amortization............................ 35,825 27,869 22,418
Equity in (income) loss of unconsolidated entities....... 2,388 661 (42)
Other non-cash expenses.................................. 537 776 816
Minority interest in partnership......................... 2,623 3,022 3,385
Gains on sales of outparcels............................. (155) (1,506)
Extraordinary loss on long term debt extinguishment...... 490
Net changes in operating assets and liabilities:
Tenant accounts receivable, net.......................... (7,217) (4,759) (7,222)
Deferred expenses, prepaid and other assets.............. (2,723) 1,065 (898)
Accounts payable and accrued expenses.................... 2,213 (4,108) (5,050)
----------- ----------- ------------
Net cash provided by operating activities............. 76,796 56,406 53,918
---------- ---------- ----------
Cash flows from investing activities:
Additions to investment in real estate....................... (32,570) (26,909) (36,615)
Acquisition of properties.................................... (296,393) (122,579) (88,482)
Investment in unconsolidated entities........................ (75,581) (77,505) 41,309
Proceeds from sales of properties/outparcels................. 253 4,330
Withdrawals from (payments to) cash in escrow................ 379 (1,875) 997
Additions to deferred expenses, prepaid and other assets..... (4,786) (16,208) (172)
------------- ----------- ------------
Net cash used in investing activities................. (408,951) (244,823) (161,251)
----------- ---------- ---------
Cash flows from financing activities:
Proceeds from (payments to) revolving line of credit, net.... 73,000 (13,000) (69,800)
Proceeds from issuance of mortgages and notes payable........ 390,006 76,538 58,128
Principal payments on mortgage and notes payable............. (62,422) (43,497) (3,155)
Net proceeds from issuance of common shares.................. 420 38,418 77
Net proceeds from issuance of redeemable preferred shares... 179,072 32,720
Cash distributions........................................... (67,334) (50,648) (47,101)
------------ ---------- ------------
Net cash provided by financing activities............. 333,670 186,883 110,469
---------- ---------- ----------
Net change in cash and cash equivalents....................... 1,515 (1,534) 3,136
Cash and cash equivalents, at beginning of period............. 7,434 8,968 5,832
------------ ------------ ------------
Cash and cash equivalents, at end of period................... $ 8,949 $ 7,434 $ 8,968
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
48
<PAGE> 49
GLIMCHER REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Glimcher Realty Trust (the "Company" or "GRT") is a fully-integrated,
self-administered and self-managed Maryland real estate investment trust
("REIT"), which owns, leases, manages and develops a portfolio of retail
properties (the "Property" or "Properties") consisting of regional malls ("Mall
Properties") and community shopping centers (including single tenant retail
properties) ("Community Centers"). At December 31, 1998, the Company, managed
and leased a total of 125 Properties, 116 of which were wholly owned and nine of
which were partially owned in ventures, consisting of 21 Mall Properties and 104
Community Centers. Glimcher Properties Limited Partnership (the "Operating
Partnership") also holds substantially all of the economic interest in Glimcher
Development Corporation ("GDC"), a non-qualified REIT subsidiary which provides
development, construction, leasing and legal services to the Company, ventures
in which the Company has an ownership interest and to third parties.
Basis of Presentation
The accompanying consolidated financial statements include the accounts
of GRT, the Operating Partnership (88.9% owned by GRT at December 31, 1998 and
90.1% at December 31, 1997), six Delaware limited partnerships (Glimcher
Holdings Limited Partnership, Glimcher Centers Limited Partnership, Grand
Central Limited Partnership, Glimcher York Associates Limited Partnership,
Glimcher University Mall Limited Partnership and Montgomery Mall Associates
Limited Partnership), three Delaware limited liability companies, (Glimcher
Northtown Venture, LLC, Weberstown Mall, LLC, and Glimcher Lloyd Venture, LLC)
and one Ohio limited partnership (Morgantown Mall Associates Limited
Partnership), all of which are owned directly or indirectly by GRT. The
Operating Partnership has an investment in several joint ventures and one other
corporation which are accounted for under the equity method. All significant
inter-entity balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. For example, estimates are used to establish common area
maintenance, real estate tax and insurance tenant accounts receivable,
percentage rents and accounts receivable reserves. The Company bases its
estimates on historical sales performance of tenants, changes in Property
occupancy, mix of tenants and industry trends of tenant credit risk. Actual
results could differ from those estimates.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investment in Real Estate
Real estate assets including acquired assets, are stated at cost. Costs
incurred for the development, construction and improvement of Properties are
capitalized, including direct costs incurred by GRT for these activities.
Interest and real estate taxes incurred during construction periods are
capitalized and amortized on the same basis as the related assets.
49
<PAGE> 50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Depreciation expense is computed using the straight-line method and
estimated useful lives for building and improvements of 40 years and equipment
and fixtures of five to 10 years. Expenditures for leasehold improvements and
construction allowances paid to tenants are capitalized and amortized over the
remaining life of the initial terms of each lease. Maintenance and repairs are
charged to expense when incurred.
Management evaluates the recoverability of its investment in real
estate assets in accordance with Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for Impairment of Long-Lived Assets and Long-Lived
Assets To Be Disposed Of. " This statement requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances indicate
that full asset recoverability is questionable. Management's assessment of
recoverability of its real estate assets under this statement includes, but is
not limited to, recent operating results, expected net operating cash flow and
management's plans for future operations.
Cash and Cash Equivalents
For purposes of the statements of cash flows, all highly liquid
investments purchased with original maturities of three months or less are
considered to be cash equivalents. The carrying amounts approximate fair value.
Cash in Escrow
Cash in escrow consists primarily of cash held for real estate taxes,
insurance and Property reserves for maintenance and expansion or leasehold
improvements as required by certain of the loan agreements.
Deferred Expenses
Deferred expenses consist principally of financing fees, leasing
commissions paid to third parties and direct costs related to leasing
activities. These costs are amortized on a straight-line basis over the terms of
the respective agreements. Deferred expenses in the accompanying consolidated
balance sheets are shown net of accumulated amortization of $11,927 and $12,187
as of December 31, 1998 and 1997, respectively.
Derivative Financial Instruments
Gains and losses related to interest rate swaps, caps, collars and
floors are recognized as an adjustment to interest expense over the life of the
agreement. Any premiums paid are recorded as assets and amortized over the life
of the underlying derivative agreement.
Revenue Recognition
Minimum rents are recognized on an accrual basis over the terms of the
related leases which approximate a straight-line basis. Percentage rents are
recognized on an accrual basis. Recoveries from tenants for taxes, insurance and
other shopping center operating expenses are recognized as revenues in the
period the applicable costs are accrued.
An allowance for doubtful accounts has been provided against the
portion of tenant accounts receivable which is estimated to be uncollectible.
Tenant accounts receivable in the accompanying balance sheets are shown net of
an allowance for doubtful accounts of $3,995, $5,030 and $4,463 as of December
31, 1998, 1997 and 1996, respectively.
50
<PAGE> 51
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Interest Costs YEAR ENDED DECEMBER 31,
-----------------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Interest capitalized........................ $ 6,666 $ 3,053 $ 3,394
Interest expense............................ 48,306 41,370 28,521
Amortization of interest rate buydown....... 517 776 776
------- ------- -------
Total interest costs........................ $55,489 $45,199 $32,691
======= ======= =======
</TABLE>
Advertising Costs
The Company promotes its Properties on behalf of its tenants through
various media. The majority of the advertising expenses incurred are recovered
from the tenants through lease obligations. Net advertising expense was $79,
$269 and $308 for the years ended December 31, 1998, 1997 and 1996,
respectively.
Income Taxes
GRT files as a REIT under Sections 856-860 of the Internal Revenue Code
(the "Code"). In order to qualify as a REIT, GRT is required to distribute at
least 95.0% of its taxable income to shareholders and to meet certain asset and
income tests as well as certain other requirements. GRT will generally not be
liable for federal income taxes, provided it satisfies the necessary
distribution requirements. Even as a qualified REIT, the Company is subject to
certain state and local taxes on its income and property.
The Company has an equity investment in GDC, which is a non-qualified
REIT subsidiary under Section 856 (I) of the Code. For federal income tax
purposes, GDC is treated as a separate entity and taxed as a regular
C-Corporation.
Supplemental Disclosure of Non-Cash Financing and Investing Activities
Accounts payable of $3,390, $5,991 and $5,617 were accrued for real
estate improvements and other assets as of December 31, 1998, 1997 and 1996,
respectively.
GRT, through the Operating Partnership, acquired four Mall Properties
during the year ended December 31, 1998. The purchase price included cash of
$296,393 and the assumption of net liabilities of $27,539. GRT, through the
Operating Partnership, acquired one Mall Property during the year ended December
31, 1997. The purchase price included cash of $122,579 and the assumption of net
liabilities of $606. GRT, through the Operating Partnership, acquired 23
Community Centers during the year ended December 31, 1996. The purchase price
included cash of $88,482 and the assumption of net liabilities of $125,738.
Share distributions of $11,400, $11,381 and $10,524 and Operating
Partnership distributions of $1,429, $1,252 and $1,252 had been declared but not
paid as of December 31, 1998, 1997 and 1996, respectively. Series A-1
convertible preferred share distributions of $883, $734 and $268 had been
declared but not paid as of December 31, 1998, 1997 and 1996, respectively.
Series D convertible preferred share distributions of $1,454 and $355 had been
declared but not paid as of December 31, 1998 and 1997, respectively. Series B
cumulative preferred share distributions of $2,959 and $357 had been declared
but not paid as of December 31, 1998 and 1997, respectively.
Amounts paid for interest were $46,384, $44,935 and $30,295 in 1998,
1997 and 1996, respectively.
Amounts paid for state and local income taxes were $1,017, $878 and
$572 in 1998, 1997 and 1996, respectively.
51
<PAGE> 52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Reclassifications
Certain reclassifications of prior period amounts have been made in the
financial statements to conform to the 1998 presentation.
3. MORTGAGE NOTES PAYABLE AS OF DECEMBER 31, 1998 AND 1997 CONSIST OF THE
FOLLOWING:
<TABLE>
<CAPTION>
CARRYING AMOUNT OF PAYMENT PAYMENT AT MATURITY
DESCRIPTION MORTGAGE NOTES PAYABLE INTEREST RATE TERMS MATURITY DATE
- -----------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Grand Central Limited Partnership $ 25,000 $ 25,000 6.935% 6.935% (a) $25,000 Oct. 1, 2000
Glimcher Holdings L.P. - Loan A.. 40,000 40,000 6.995% 6.995% (a) 40,000 Feb. 1, 1999
Glimcher Holdings L.P. - Loan B.. 40,000 40,000 7.505% 7.505% (a) 40,000 Feb. 1, 2003
Glimcher Centers L.P............. 76,000 76,000 7.625% 7.625% (a) 76,000 Aug. 1, 2000
Morgantown Mall Associates L.P... 58,214 50,200 6.890% 7.500% (b) (c) (c)
University Mall Limited Partnership 70,695 71,376 7.090% 7.090% (b) (d) (d)
Northtown Mall, LLC.............. 40,000 (e) (a) 40,000 Aug. 30, 2001
Montgomery Mall Associates, LP... 47,602 6.740% (b) (f) (f)
Weberstown Mall ................. 11,520 8.800% (b) Nov. 15, 2016
Glimcher Lloyd Venture, LLC...... 130,000 (g) (a) 130,000 Oct. 11, 2001
Glimcher Properties L.P. Mortgage
Notes Payable:
Glimcher Properties L.P...... 50,000 50,000 7.470% 7.470% (a) 50,000 Oct. 26, 2002
Other Mortgage Notes......... 101,925 113,872 (h) (h) (b) 91,229 (i)
Other Bridge Facilities...... 89,000 (j) (a) 89,000 (k)
Tax Exempt Bonds............. 19,000 6.000% (n) Nov. 1, 2028
Construction Loans........... 32,055 35,240 (l) (l) (a) (m)
-------- --------
Total Mortgage Notes Payable..... $831,011 $501,688
======== ========
</TABLE>
(a) The loan requires monthly payments of interest only.
(b) The loan requires monthly payments of principal and interest.
(c) The loan matures in September 2028, with an optional prepayment date in
2008.
(d) The loan matures in January 2028, with an optional prepayment date in
2013.
(e) Interest rate of LIBOR (fixed at 5.662% until maturity) plus 125 basis
points (6.912% at December 31, 1998).
(f) The loan matures in August 2028, with an optional prepayment date in
2005.
(g) Interest rate of LIBOR (capped at 7.750% until maturity) plus 125 basis
points (6.790% at December 31, 1998).
(h) Interest rates ranging from 7.375% to 9.125%.
(i) Final maturity dates ranging from June 1999 to April 2016.
(j) Interest rates of LIBOR plus 160-575 basis points (7.147% - 11.375% at
December 31, 1998).
(k) Final maturity dates ranging from February 1999 to July 1999.
(l) Interest rates of 7.626% at December 31, 1998 and ranging from 7.688%
to 8.000% in 1997.
(m) Maturity dates ranging from October 1999 to November 1999 with one year
extension options.
(n) The loan requires semi-annual payments of interest.
All mortgage notes payable are collateralized by certain Properties
owned by the respective partnerships. Certain of the loans contain financial
covenants regarding minimum net operating income and coverage ratios.
Principal maturities (excluding extension options) on mortgage notes
payable during the five years subsequent to December 31, 1998, are as follows:
1999-$199,120; 2000-$133,045; 2001-$196,005; 2002-$58,216; 2003-$43,116;
thereafter-$201,510.
52
<PAGE> 53
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
4. NOTES PAYABLE
In May 1997, the Company amended its revolving line of credit (the
"Credit Facility") to (i) increase the amount the Company can borrow thereunder
to $190,000, (ii) extend the term of the Credit Facility to July 31, 1998, which
term could be extended to July 31, 1999, (iii) reduce the interest rate
schedule, and (iv) grant first mortgage liens on 11 Properties. On April 29,
1998, the Company extended the term of the Credit Facility to July 31, 1999.
Borrowings under the Credit Facility currently bear interest at a rate equal to
LIBOR plus 170 basis points per annum (6.8125% at December 31, 1998 and 7.4375%
at December 31, 1997). Payments due under the Credit Facility are guaranteed by
GRT and by Glimcher Properties Corporation, a wholly owned subsidiary of the
Company. During 1998 and 1997, the weighted average interest rate was 7.241% and
7.465%, respectively.
The Credit Facility, as amended, contains customary covenants,
representations, warranties and events of default, including maintenance of a
specified minimum net worth requirement, loan to value ratios, project costs to
asset value ratios, total debt to asset value ratios and EBITDA to total debt
service, restrictions on the incurrence of additional indebtedness and approval
of anchor leases with respect to the Properties which secure the Credit
Facility.
At December 31, 1998, the balance outstanding on the Credit Facility
was $163,000. In addition, $1,725 represents a holdback on the available balance
of the Credit Facility for letters of credit issued under the Credit Facility.
As of December 31, 1998, the unused balance of the Credit Facility available to
the Company was $25,275.
5. SERIES A-1, B, D AND E PREFERRED SHARES
The Company's Declaration of Trust authorizes the Company to issue up
to an aggregate 100,000,000 shares of the Company, consisting of common shares
or one or more series of preferred shares of beneficial interest.
On November 27, 1996, the Company sold 34,000 of its Series A
convertible preferred shares. On November 7, 1997, the Series A preferred shares
were exchanged for Series A-1 preferred shares (the "A-1 Preferred Shares")
having substantially the same terms. Distributions on the A-1 Preferred Shares
are paid quarterly based upon 90-day LIBOR plus a spread based on leverage
(10.163% at December 31, 1998 and 8.631% at December 31, 1997). The Company may
redeem the A-1 Preferred Shares at any time, prior to conversion, at its option
without any penalty or premiums. Beginning in November 2001, the A-1 Preferred
Shares are convertible into the number of shares obtained by dividing the
liquidation preference by the conversion price per share. The conversion price
per share is the product of (i) the average market price per share over the 30
trading days prior to the conversion, multiplied by (ii) the applicable
conversion percentage which begins at 90.0% and decreases annually 5.0%, 5.0%
and 10.0% to 70.0%.
On December 5, 1997, the Company sold 56,000 shares of its Series C
convertible preferred shares. On June 4, 1998, the Series C convertible
preferred shares were converted to Series D convertible preferred shares (the "D
Preferred Shares") having substantially the same terms. Terms of the D Preferred
Shares are substantially the same as the A-1 Preferred Shares except that the
holder can redeem the shares beginning in December 2002.
On November 17, 1997, the Company completed a $120,000 public offering
of 4,800,000 shares of 9 1/4% Series B cumulative preferred shares of
beneficial interest (the "B Preferred Shares"). On November 25, 1997, the
Company sold an additional 318,000 B Preferred Shares as a result of the
underwriters exercising the over-allotment option granted to them. Aggregate net
proceeds of the offering were $123,072. Distributions on the B Preferred Shares
are payable quarterly in arrears. The Company generally may redeem the B
Preferred Shares anytime on or after November 15, 2002, at a redemption price of
$25.00 per share, plus accrued and unpaid distributions.
53
<PAGE> 54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The redemption price (other than the portion thereof consisting of
accrued and unpaid distributions) is payable solely out of the sale proceeds of
other capital shares of the Company, which may include other series of preferred
shares. The Company contributed the proceeds to the Operating Partnership in
exchange for preferred units. The Operating Partnership pays a preferred
distribution to the Company equal to the dividends paid on the B Preferred
Shares.
On March 9, 1999, the Board of Trustees adopted a Preferred Share
Purchase Plan (the"Plan") pursuant to which a distribution will be made of one
preferred share purchase right (a "Right") for each outstanding common share.
The distribution is payable on March 22, 1999 to the shareholders of record at
the close of business on that date. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a Series E Junior Participating
Preferred Share of the Company, par value $0.01 per share (the "Preferred
Shares"), at a price of $55.00 per one one-hundredth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The Rights will become exercisable in
the event that any person or group acquires or announces its intention to
acquire, beneficial ownership of 15.0% or more of the outstanding common shares
of the Company (an "Acquiring Person"). Alternatively each Right holder, except
the Acquiring Person, will have the right to receive upon exercise that number
of common shares having a market value of two times the Purchase Price of the
Right. At any time before any person or group becomes an Acquiring Person, the
Board of Trustees may redeem the Rights at a price of $0.01 per Right at which
time the right to exercise the Rights will terminate. At any time after a person
or group becomes an Acquiring Person, the Board of Trustees may exchange the
Rights at an exchange ratio of one common share or one Preferred Share per
Right. The Plan expires on March 9, 2009.
6. DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments to manage interest
rate risks associated with long-term, floating rate debt. In August 1998, the
Company entered into a three-year interest rate swap agreement which fixed LIBOR
at 5.662% per annum on a notional amount of $40,000. In September 1998, the
Company also entered into a three-year interest rate protection agreement on
$130,000 of borrowings in which the obligor agreed to reimburse the Company as a
result of an increase in LIBOR above 7.750% per annum. The Company is exposed to
credit loss in the event of non-performance by the obligors. However, the
Company does not anticipate non-performance by the obligors.
7. RENTALS UNDER OPERATING LEASES
GRT receives rental income from the leasing of retail shopping center
space under operating leases with expiration dates through the year 2025. The
minimum future base rentals under non-cancelable operating leases as of December
31, 1998 are as follows:
<TABLE>
<S> <C> <C>
1999.................................. $ 141,638
2000.................................. 132,811
2001.................................. 121,485
2002.................................. 111,033
2003.................................. 96,851
Thereafter............................ 566,684
----------
$1,170,502
==========
</TABLE>
54
<PAGE> 55
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Minimum future base rentals do not include amounts which may be
received from certain tenants based upon a percentage of their gross sales or as
reimbursement of operating expenses. Minimum rents contain straight-line
adjustments for rental revenue increases which aggregated $2,115, $1,324 and
$1,747 for the years ended December 31, 1998, 1997 and 1996, respectively.
In 1998 and 1997, no tenant collectively accounted for more than 10.0%
of rental income. In 1996, Kmart represented approximately 10.0% of rental
income. The tenant base includes national, regional and local retailers, and
consequently the credit risk is concentrated in the retail industry.
8. INVESTMENT IN UNCONSOLIDATED ENTITIES
Investment in unconsolidated entities consists of preferred stock and
non-voting common stock of Glimcher Development Corporation, a 45.00% interest
in Great Plains Metro Mall, LLC, a 33.33% interest in Johnson City Venture, LLC,
a 40.00% interest in Dayton Mall Venture, LLC, a 40.00% interest in Colonial
Park Mall Limited Partnership, a 30.00% interest in Elizabeth Metro Mall, LLC, a
34.85% interest in Glimcher SuperMall Venture, LLC, a 20.00% interest in San
Mall, LLC, a 50.00% interest in Polaris Center, LLC and a 20.00% interest in
Eastland Mall, LLC.
The net income (loss) for each unconsolidated entity is allocated in
accordance with the provisions of the applicable operating agreements. The
allocation provisions in these agreements may differ from the ownership interest
held by each member under the terms of these agreements.
The summary financial information of the Company's unconsolidated
entities, accounted for using the equity method, and a summary of the Operating
Partnership's investment in and share of net income (loss) from such
unconsolidated entities are presented below:
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1998 1997
---------- -----------
<S> <C> <C>
Assets:
Investment properties at cost, net........... $ 675,993 $ 357,416
Other assets................................. 41,701 19,423
---------- -----------
$ 717,694 $ 376,839
========= ==========
Liabilities and Members' Equity:
Mortgage note payable........................ $ 401,927 $ 205,058
Accounts payable and accrued expenses........ 113,837 25,813
---------- -----------
515,764 230,871
Members' equity.............................. 201,930 145,968
---------- ----------
$ 717,694 $ 376,839
========= ==========
Operating Partnership's Share of:
Members' equity.............................. $ 136,645 $ 111,529
========= ==========
RECONCILIATION OF MEMBERS' EQUITY TO COMPANY
INVESTMENT IN UNCONSOLIDATED ENTITIES:
Members' equity.............................. $ 136,645 $ 111,529
Advances and additional costs................ 63,560 6,666
--------- ----------
Investment in unconsolidated entities........ $ 200,205 $ 118,195
========= ==========
</TABLE>
55
<PAGE> 56
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31,
------------------------------------
1998 1997
------------- ------------
<S> <C> <C>
Total revenues......................................................... $ 85,662 $ 26,427
Operating expenses..................................................... (43,160) (13,608)
----------- ------------
Net operating income................................................... 42,502 12,819
Depreciation and amortization.......................................... (14,784) (4,039)
Interest expense....................................................... (25,564) (7,569)
----------- -------------
Net income............................................................. $ 2,154 $ 1,211
=========== =============
Operating Partnership's share of net loss.............................. $ (2,388) $ (661)
=========== =============
</TABLE>
9. TRANSACTIONS WITH AFFILIATES
On October 16, 1996, the Company formed GDC, an unconsolidated
non-qualified REIT subsidiary which is owned by the Operating Partnership,
Herbert Glimcher and Michael P. Glimcher. The Operating Partnership holds 95.0%
of the ownership interest; the Glimchers hold 100.0% of the voting interest and
5.0% of the ownership interest. GDC provides services for a fee, to the Company,
to ventures in which the Company has an ownership interest and to third parties.
In 1998 and 1997, GDC recognized fee income of $8,893 and $1,293, respectively,
for services provided to these ventures.
The Company reimbursed The Glimcher Company ("TGC") and Corporate
Flight, Inc. ("CFI") $2 and $36 in 1998 and $11 and $179 in 1997, respectively,
for the use, in connection with Company related matters, of a bus owned by TGC
and an airplane owned by CFI; GDC reimbursed the same two companies $5 and $688
in 1998 and $25 and $895 in 1997, respectively. In 1996, the Company purchased a
parcel of land from TGC for $215 and reimbursed TGC and CFI $20 and $59,
respectively.
Effective January 1994, the Company engaged Archer-Meek-Weiler Agency,
Inc. ("AMW"), an agency in which Alan R. Weiler (a Trustee of GRT) is president,
to provide property and employee practices liability insurance services to the
Company. Total commissions received by AMW during 1998, 1997 and 1996 were
approximately $179, $137 and $128, respectively.
Certain of the properties also have tenants in which officers of GRT
hold a financial interest. Annual base minimum rents and tenant accounts
receivable from these tenants are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Minimum rents..................................................... $506 $559 $580
Tenant accounts receivable (payable).............................. 162 (9) 27
</TABLE>
10. COMMITMENTS
The Operating Partnership leases office space under an operating lease
that had an initial term of ten years commencing on March 21, 1994.
Additionally, eight of GRT's Properties are subject to long-term ground leases
where a third party owns the underlying land and has leased the land to GRT. GRT
pays rent, ranging from $2 to $60 per annum, for the use of the land and
generally is responsible for the costs and expenses associated with maintaining
the building and improvements thereto. Future minimum rental payments as of
December 31, 1998 are as follows:
56
<PAGE> 57
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
OFFICE LEASE GROUND LEASES
------------ -------------
<S> <C> <C> <C>
1999........................................................ $ 798 $ 220
2000........................................................ 818 223
2001........................................................ 848 224
2002........................................................ 683 178
2003........................................................ 570 147
Thereafter.................................................. 144 7,427
-------- -------
$3,861 $8,419
====== ======
</TABLE>
Total rental expenses (including miscellaneous month-to-month lease
rentals) for the years ended December 31, 1998, 1997 and 1996 were $707, $612
and $618, respectively. Ground lease expenses for the years ended December 31,
1998, 1997 and 1996 were $258, $256 and $330, respectively.
In connection with the development of The Great Mall of the Great
Plains, the Operating Partnership provided the lender with a completion
guarantee and an unconditional guarantee of payment of the greater of (i) 25.0%
of the outstanding obligation on the indebtedness, or (ii) the indebtedness less
capitalized net operating income calculated in accordance with the agreement.
In connection with a mortgage note payable for Johnson City Venture,
LLC, the Operating Partnership provided an unconditional guarantee for the
payment of the lesser of $6,200 or the outstanding balance of the loan.
In connection with the development of Polaris Towne Center, the
Operating Partnership provided the lender with a completion guarantee and an
unconditional guarantee of payment of 50.0% of the outstanding obligation on the
indebtedness until the Property achieves a coverage ratio of 1.2 at which time
the guarantee is reduced to 25.0%.
In connection with the development of Jersey Gardens, the Operating
Partnership provided the senior lending group with a completion guarantee and
payment of interest on the senior portion of the construction facility to a
maximum of $25.0 million until the Property achieves a coverage ratio of 1.25.
11. SHARE OPTION PLANS
GRT has established the Employee Share Option Plan (the "Employee
Plan"), the Trustee Share Option Plan (the "Trustee Plan") and the 1997
Incentive Plan (the "Incentive Plan") for the purpose of attracting and
retaining the Company's trustees, executive and other employees. A maximum of
400,000 shares have been reserved for issuance under the Employee Plan, a
maximum of 700,000 shares have been reserved for issuance under the Trustee Plan
and a maximum of 3,000,000 shares have been reserved for issuance under the
Incentive Plan.
The Company applies Accounting Principles Board Opinion No. 25 and
related interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized related to options granted under the
plans. Had compensation cost for the plans been determined based on the fair
value at the grant dates for grants under these plans consistent with SFAS No.
123, the Company's net income available to common shareholders would have been
decreased to the pro forma amounts indicated below:
57
<PAGE> 58
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net income available to common shareholders:
As reported................................... $20,911 $25,088 $27,781
Pro forma..................................... 20,640 24,961 27,742
Earnings per share (basic and diluted)
As reported................................... $ 0.88 $ 1.12 $ 1.27
Pro forma..................................... 0.87 1.12 1.27
</TABLE>
The fair value of each option grant was estimated on the date of the
grant using the Black-Scholes options pricing model with the following
assumptions: average risk free interest rates ranging from 5.38% to 6.74%,
expected average lives of five years, annual dividend rates of $1.9232 and
volatility of 14.32%.
A summary of the status of the Company's three option plans at December
31, 1998, 1997 and 1996 and changes during the years ending on those dates is
presented below. Options issued under the Incentive Plan are included under the
Trustee Plan and Employee Plan.
<TABLE>
<CAPTION>
1996 1997 1998
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
TRUSTEE PLAN:
- -------------
Outstanding at beginning of year............ 129,000 $20.250 242,000 $18.732 576,500 $18.707
Granted..................................... 114,000 17.000 371,000 18.750 115,000 20.500
Exercised................................... (1,000) 17.000 (1,500) 18.750 - -
Forfeited................................... - - (35,000) 19.320 - -
------- ------- -------
Outstanding at end of year.................. 242,000 18.732 576,500 18.707 691,500 19.585
======= ======= =======
EMPLOYEE PLAN:
- --------------
Outstanding at beginning of year............ 150,250 $20.262 284,550 $18.456 360,372 $18.993
Granted..................................... 181,800 17.092 141,500 19.606 270,500 20.520
Exercised................................... (18,128) 17.069 (16,921) 17.645
Forfeited................................... (47,500) 18.950 (47,550) 18.337 (76,302) 20.175
------- ------- -------
Outstanding at end of year.................. 284,550 18.456 360,372 18.993 537,649 19.636
======= ======= =======
Options exercisable at year-end under
the Trustee Plan.......................... 90,333 144,800 314,867
Options exercisable at year-end under
the Employee Plan......................... 76,333 136,386 177,483
Weighted-average fair value of options
granted during the year................... $0.4781 $0.8384 $0.8067
</TABLE>
58
<PAGE> 59
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table summarizes information regarding the options
outstanding at December 31, 1998 under the Company's two plans:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
---------------------------------------------------- ---------------------------------------
WEIGHTED- WEIGHTED
NUMBER AVERAGE AVERAGE NUMBER WEIGHTED
RANGE OF OUTSTANDING AT REMAINING EXERCISE EXERCISABLE AT AVERAGE
EXERCISE PRICES DECEMBER 31, 1998 CONTRACTUAL LIFE PRICE DECEMBER 31,1998 EXERCISE PRICE
- ----------------- ----------------- ---------------- ----- ---------------- --------------
<S> <C> <C> <C> <C> <C>
TRUSTEE PLAN:
-------------
$20.250 102,000 5.1 $20.250 102,000 $20.250
20.250 2,000 6.2 20.250 2,000 20.250
17.000 103,000 7.2 17.000 69,700 17.000
18.750 - 20.750 369,500 8.4 19.833 126,167 19.833
20.500 - 21.500 115,000 9.4 20.500 15,000 20.500
------- -------
17.000 - 21.500 691,500 7.9 19.585 314,867 19.375
======= =======
EMPLOYEE PLAN:
--------------
$20.250 76,650 5.1 $20.250 76,650 $20.250
16.250 - 19.750 92,999 7.3 17.065 62,000 17.065
18.750 - 21.875 116,500 8.4 19.371 38,833 19.371
18.750 - 22.250 251,500 9.4 20.517 - -
------- -------
16.250 - 22.250 537,649 8.3 19.636 177,483 18.945
======= =======
</TABLE>
All but 20,000 options granted in 1996 under the Employee Plan will be
exercisable at the rate of 33.3% per annum over a three-year period beginning
with the first anniversary of the date of grant and will remain exercisable
through the tenth anniversary of such date. Options for 20,000 shares will be
exercisable at the rate of 50.0% per annum over a two-year period beginning with
the first anniversary of the date of grant and will remain exercisable through
the tenth anniversary of such date. All but 4,000 options granted under the
Trustee Plan in 1996 will be exercisable at the rate of 33.3% per annum over a
three-year period beginning with the first anniversary of the date of grant and
will remain exercisable through the tenth anniversary of such date. Options for
4,000 shares were exercisable immediately, and will remain exercisable through
the tenth anniversary of such date.
All of the options granted in 1997 under the Employee Plan will be
exercisable at the rate of 33.3% per annum over a three year period beginning
with the first anniversary of the date of grant and will remain exercisable
through the tenth anniversary of such date. All but 6,000 options granted under
the Trustee Plan in 1997 will be exercisable at the rate of 33.3% per annum over
a three-year period beginning with the first anniversary of the date of grant
and will remain exercisable through the tenth anniversary of such date. Options
for 6,000 shares were exercisable immediately, and will remain exercisable
through the tenth anniversary of such date.
All but 15,000 options granted under the Incentive Plan in 1998 will be
exercisable at the rate of 33.3% per annum over a three-year period beginning
with the first anniversary of the date of grant and will remain exercisable
through the tenth anniversary of such date. Options for 15,000 shares were
exercisable immediately, and will remain exercisable through the tenth
anniversary of such date.
59
<PAGE> 60
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
12. EMPLOYEE BENEFIT PLAN - 401(k) PLAN
In January 1996, the Company established a qualified retirement savings
plan under IRC 401(k) for eligible employees which contains a cash or deferred
arrangement which permits participants to defer up to a maximum of 15.0% of
their compensation, subject to certain limitations. Participant's salary
deferrals up to a maximum of 4.0% of qualified compensation will be matched at
50.0%. The Company matching will be in the form of GRT shares. The Company
contributed $127, $109 and $89 to the plan in 1998, 1997 and 1996, respectively.
13. DISTRIBUTIONS
For the years ended December 31, 1998, 1997 and 1996, approximately
54.8%, 30.6% and 31.0%, respectively, of the distributions received by common
shareholders were considered to be a return of capital for tax purposes. Also,
0.68% of each quarterly distribution declared in 1996 was designated and
considered to be long-term capital gain for tax purposes.
14. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share." SFAS No. 128 establishes standards for computing and presenting earnings
per share ("EPS") and replaces the presentation of primary EPS with a
presentation of basic EPS and diluted EPS, as summarized in the table below:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1998 1997 1996
------------------------------ --------------------------- -------------------------
PER PER PER
INCOME SHARES SHARE INCOME SHARES SHARE INCOME SHARES SHARE
------ ------ ----- ------ ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BASIC EPS
Income available to
Common stockholders............ $20,911 23,694 $0.88 $25,088 22,321 $1.12 $27,781 21,888 $1.27
EFFECT OF DILUTIVE SECURITIES
Operating Partnership units.... 2,623 2,969 3,022 2,604 - 3,386 2,604
- -
Options........................ - 31 - 71 - 10
- - -
DILUTED EPS
Income available plus
------- ------ ----- ------- ------ ----- ------- ------ -----
assumed conversions.......... $23,534 26,694 $0.88 $28,110 24,996 $1.12 $31,167 24,502 $1.27
======= ====== ===== ======= ====== ===== ======= ====== =====
</TABLE>
The Series A-1 and Series D Preferred Shares include certain conversion features
that could potentially dilute basic EPS in the future, but were not included in
the computation of diluted EPS because to do so would have been antidilutive
(based on period end share prices) for the periods presented.
60
<PAGE> 61
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
15. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents, cash in escrow,
tenant accounts receivable, accounts payable and accrued expenses are reasonable
estimates of their fair values because of the short maturity of these financial
instruments. The carrying value of the Credit Facility is also a reasonable
estimate of its fair value because it bears variable rate interest at current
market rates. Based on the discounted amount of future cash flows using rates
currently available to GRT for similar liabilities (ranging from 6.00% to 11.38%
per annum at December 31, 1998 and 6.82% to 8.88% per annum at December 31,
1997), the fair value of GRT's mortgage notes payable is estimated at $833,487
and $500,470 at December 31, 1998 and 1997, respectively. The fair value of the
debt instruments identified with GRT considers in part the credit of GRT as an
entity, and not just the individual entities and properties owned by GRT.
The fair value of interest rate protection agreements are estimated
based on quotes from the market makers of these instruments and represent the
estimated amounts that GRT would expect to receive or pay to terminate such
agreements. All derivatives have no carrying value. Because the Company hedges
only with instruments that have high correlations with the underlying
transaction, changes in derivatives fair value are expected to be offset by
changes in pricing. At December 31, 1998, the total notional amounts hedged were
$170,000 with fair values totaling ($572).
<TABLE>
<CAPTION>
16. PROPERTY ACQUISITIONS NET
AMOUNT LIABILITIES
ACQUISITION PROPERTY NAME ALLOCATED TO AND DEBT
DATE AND LOCATION ASSETS ACQUIRED CASH ASSUMED
- -----------------------------------------------------------------------------------------------------------------
ACQUISTIONS - 1998
<S> <C> <C> <C> <C>
June 1998 Northtown Mall -
Blaine, Minnesota..................... $ 55,131 $ 54,961 $ 170
July 1998 Montgomery Mall -
Montgomery, Alabama................... 71,023 70,602 421
August 1998 Weberstown Mall -
Stockton, California................. 24,586 24,586
September 1998 Lloyd Center -
Portland, Oregon...................... 173,192 170,830 2,362
--------- ---------- ---------
Total.......................................................... $323,932 $ 296,393 $ 27,539
======== ========= =========
ACQUISITIONS - 1997
December 1997 University Mall -
Tampa, Florida........................ $ 123,185 $ 122,579 $ 606
========= ========= =========
</TABLE>
61
<PAGE> 62
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
17. SEGMENT REPORTING
In June 1997, the Financial Accounting Standards Board SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information." SFAS No.
131 establishes standards for publicly-held business enterprises to report
information about operating segments in annual financial statements and requires
that these enterprises report selected information about operating segments in
interim financial reports issued to shareholders, as summarized in the table
below:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998
---------------------------------------------------------
COMMUNITY
MALLS CENTERS CORPORATE TOTAL
----- ------- --------- -----
<S> <C> <C> <C> <C>
Total revenues.................... $105,249 $ 78,842 $ - $ 184,091
Total operating expenses.......... 31,247 13,577 44,824
-------- --------- -------- -----------
Property net operating income..... $ 74,002 $ 65,265 $ - $ 139,267
======== ========= ======== ===========
Net investment in real estate $744,177 $ 543,813 $ 3,422 $ 1,291,412
======== ========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
---------------------------------------------------------
COMMUNITY
MALLS CENTERS CORPORATE TOTAL
----- ------- --------- -----
<S> <C> <C> <C> <C>
Total revenues.................... $ 61,801 $ 78,337 $ - $ 140,138
Total operating expenses.......... 16,099 13,449 - 29,548
-------- --------- --------- -----------
Property net operating income..... $ 45,702 $ 64,888 $ $ 110,590
======== ========= ========= ===========
Net investment in real estate..... $422,996 $557,831 $ 2,984 $ 983,811
======== ======== ========= ===========
</TABLE>
<TABLE>
FOR THE YEAR ENDED DECEMBER 31, 1996
--------------------------------------------------------
COMMUNITY
MALLS CENTERS CORPORATE TOTAL
----- ------- --------- -----
<S> <C> <C> <C> <C>
Total revenues.................... $ 61,074 $ 56,604 $ - $ 117,678
Total operating expenses.......... 17,009 10,203 - 27,212
--------- --------- --------- -----------
Property net operating income..... $ 44,065 $ 46,401 $ - $ 90,466
======== ========= ========== ===========
Net investment in real estate..... $294,132 $ 566,281 $ 2,304 $ 862,717
======== ========= ========== ===========
</TABLE>
62
<PAGE> 63
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
18. INTERIM FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
YEAR ENDED DECEMBER 31, 1998 QUARTER QUARTER QUARTER QUARTER
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues ............................................... $39,664 $40,190 $46,502 $57,735
Income before minority interest in partnership and
extraordinary item.......................................... 10,879 10,305 10,650 12,269
Extraordinary item............................................ 490
Preferred stock dividends..................................... 4,908 4,894 4,982 5,295
Net income available to common shareholders................... 5,304 4,808 4,600 6,199
Earnings per share before extraordinary item..................
(basic and diluted)......................................... 0.22 0.20 0.21 0.26
Earnings per share (basic and diluted)........................ 0.22 0.20 0.19 0.26
Distributions declared per share.............................. 0.4808 0.4808 0.4808 0.4808
</TABLE>
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
YEAR ENDED DECEMBER 31, 1997 QUARTER QUARTER QUARTER QUARTER
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total revenues .............................................. $34,390 $34,721 $34,401 $36,626
Income before minority interest in partnership................ 7,769 7,960 7,196 9,890
Preferred stock dividends..................................... 715 726 728 2,536
Net income available to common shareholders................... 6,217 6,360 5,677 6,834
Earnings per share (basic and diluted)........................ 0.28 0.29 0.26 0.29
Pro forma earnings per share if EITF 98-9 adopted 1/1/97...... 0.27 0.27 0.25 0.33
Distributions declared per share.............................. 0.4808 0.4808 0.4808 0.4808
</TABLE>
63
<PAGE> 64
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- -------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MALL PROPERTIES
Ashland Town Center
Ashland, KY [g] $ 3,866 $ 21,454 $ 5,504
Grand Central Mall
Parkersburg/Vienna, WV [g] 3,960 41,136 34,841
Indian Mound Mall
Newark/Heath, OH [f] 892 19,497 6,815
Lloyd Center Mall
Portland, OR $ 130,000 168,456
The Mall at Fairfield Commons
Beavercreek/Dayton, OH [f] 5,438 102,914 5,492
Montgomery Mall
Montgomery, AL [n] 70,693
Morgantown Mall
Morgantown, WV [i] 1,273 40,484 2,702
New Towne Mall
New Philadelphia, OH [f] 1,190 23,475 8,198
Northtown Mall
Blaine, MN 40,000 54,252
River Valley Mall
Lancaster, OH [g] 875 26,910 13,463
Southside Mall
Oneonta, NY [g] 1,194 10,643 1,608
University Mall
Tampa, FL 70,695 13,314 108,230 1,141
Weberstown Mall
Stockton, CA [l],[m] 26,716
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Life Upon Which
Date Depreciation in
Buildings and Construction Late Statement
Description and Location Improvements Total Accumulated Was Date of Operations
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired is Computed
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MALL PROPERTIES
Ashland Town Center
Ashland, KY $ 4,144 $ 26,680 $ 30,824 $ 6,273 1989 [e]
Grand Central Mall
Parkersburg/Vienna, WV 3,961 63,716 67,677 7,797 1993 [e]
Indian Mound Mall
Newark/Heath, OH 802 26,402 27,204 7,814 1986 [e]
Lloyd Center Mall
Portland, OR 51,918 116,538 168,456 751 1998
The Mall at Fairfield Commons
Beavercreek/Dayton, OH 5,438 108,406 113,844 18,151 1993 [e]
Montgomery Mall
Montgomery, AL 10,382 60,311 70,693 739 1998
Morgantown Mall
Morgantown, WV 1,249 43,210 44,459 11,847 1990 [e]
New Towne Mall
New Philadelphia, OH 1,249 31,614 32,863 9,366 1988 [e]
Northtown Mall
Blaine, MN 13,264 40,988 54,252 605 1998
River Valley Mall
Lancaster, OH 1,001 40,247 41,248 11,463 1987 [e]
Southside Mall
Oneonta, NY 1,194 12,251 13,445 1,433 1994 [e]
University Mall
Tampa, FL 13,314 109,371 122,685 3,157 1997
Weberstown Mall
Stockton, CA 3,237 23,479 26,716 437 1998
</TABLE>
64
<PAGE> 65
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- ------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMUNITY CENTERS
Arnold Plaza
Arnold, MO [g] $ 527 $ 4,965 $ 143
Artesian Square
Martinsville, IN $ 5,268 760 6,791 35
Ashland Plaza
Ashland, KY [g] 312 1,633 493
Audubon Village
Henderson, KY 4,063 606 5,453 7
Aviation Plaza
Oshkosh, WI 6,592 914 8,227 19
Ayden Plaza
Ayden, NC [g] 138 1,243
Barren River Plaza
Glasgow, KY 7,894 1,215 10,932
Bollweevil Shopping Center
Enterprise, AL [g] 215 1,916 2
Buckhannon Plaza
Tennerton, WV [g] 269 2,464
Cambridge Plaza
Cambridge, OH [g] 195 691 365
Canal Place Plaza
Rome, NY [h] 420 6,264 134
Chillicothe Plaza
Chillicothe, OH [g] 78 410 180
Clarksville Plaza
Clarksville, IN [f] 127 621 470
College Plaza
Bluefield, VA [j] 1,072 9,650
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
---------------------------
Date
Buildings and Construction
Description and Location Improvements Total Accumulated Was Date
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
COMMUNITY CENTERS
Arnold Plaza
Arnold, MO $ 527 $ 5,108 $ 5,635 $ 607 1994
Artesian Square
Martinsville, IN 760 6,826 7,586 372 1996
Ashland Plaza
Ashland, KY 312 2,126 2,438 1,048 1968
Audubon Village
Henderson, KY 606 5,460 6,066 297 1996
Aviation Plaza
Oshkosh, WI 914 8,246 9,160 449 1996
Ayden Plaza
Ayden, NC 138 1,243 1,381 153 1994
Barren River Plaza
Glasgow, KY 1,215 10,932 12,147 592 1996
Bollweevil Shopping Center
Enterprise, AL 215 1,918 2,133 237 1994
Buckhannon Plaza
Tennerton, WV 269 2,464 2,733 301 1994
Cambridge Plaza
Cambridge, OH 195 1,056 1,251 674 1965
Canal Place Plaza
Rome, NY 420 6,398 6,818 776 1994
Chillicothe Plaza
Chillicothe, OH 78 590 668 210 1964
Clarksville Plaza
Clarksville, IN 127 1,091 1,218 312 1968
College Plaza
Bluefield, VA 1,072 9,650 10,722 523 1996
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
---------------------------
Life Upon Which
Depreciation in
Late Statement
Description and Location of Operations
of Property is Computed
- -------------------------------------------------
<S> <C>
COMMUNITY CENTERS
Arnold Plaza
Arnold, MO [e]
Artesian Square
Martinsville, IN [e]
Ashland Plaza
Ashland, KY [e]
Audubon Village
Henderson, KY [e]
Aviation Plaza
Oshkosh, WI [e]
Ayden Plaza
Ayden, NC [e]
Barren River Plaza
Glasgow, KY [e]
Bollweevil Shopping Center
Enterprise, AL [e]
Buckhannon Plaza
Tennerton, WV [e]
Cambridge Plaza
Cambridge, OH [e]
Canal Place Plaza
Rome, NY [e]
Chillicothe Plaza
Chillicothe, OH [e]
Clarksville Plaza
Clarksville, IN [e]
College Plaza
Bluefield, VA [e]
</TABLE>
65
<PAGE> 66
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- ----------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corry Plaza
Corry, PA [g] $ 265 $ 2,472 $ 184
Cross Creek Plaza
Beaufort, SC [j] 1,317 11,854 1,590
Crossing Meadows
Onalaska, WI $ 9,147 1,334 12,006 50
Crossroads Centre
Knoxville, TN 6,424 883 7,944
Cumberland Crossing
Jacksboro, TN 5,006 729 6,562 5
Cypress Bay Village
Morehead City, NC [j] 1,121 10,089 66
Dallas Plaza
Balch Springs, TX [g] 262 2,326 19
Daytona Plaza
Daytona Beach, FL [g] 420 3,807 119
Delaware Community Plaza
Delaware, OH 7,980 1,250 11,118 9
East Pointe Plaza
Columbia, SC 10,936 1,255 11,294
East Pointe Plaza
Marysville, OH [f] 453 4,112 3,430
Franklin Square
Spartanburg, SC [j] 977 8,789
Georgesville Square
Columbus, OH 22,512 28,334
Grand Union
Chatham, NY [k] 227 2,042
Grand Union Plaza
South Glens Falls, NY [k] 507 4,566
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
---------------------------
Date
Buildings and Construction
Description and Location Improvements Total Accumulated Was Date
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Corry Plaza
Corry, PA $ 265 $ 2,656 $ 2,921 $ 326 1994
Cross Creek Plaza
Beaufort, SC 1,317 13,444 14,761 702 1996
Crossing Meadows
Onalaska, WI 1,334 12,056 13,390 656 1996
Crossroads Centre
Knoxville, TN 883 7,944 8,827 430 1996
Cumberland Crossing
Jacksboro, TN 729 6,567 7,296 357 1996
Cypress Bay Village
Morehead City, NC 1,121 10,155 11,276 565 1996
Dallas Plaza
Balch Springs, TX 262 2,345 2,607 290 1994
Daytona Plaza
Daytona Beach, FL 420 3,926 4,346 511 1994
Delaware Community Plaza
Delaware, OH 1,250 11,127 12,377 814 1996
East Pointe Plaza
Columbia, SC 1,255 11,294 12,549 612 1996
East Pointe Plaza
Marysville, OH 427 7,568 7,995 1,201 1992
Franklin Square
Spartanburg, SC 977 8,789 9,766 476 1996
Georgesville Square
Columbus, OH 2,921 20,102 23,023 863 1996
Grand Union
Chatham, NY 227 2,042 2,269 230 1994
Grand Union Plaza
South Glens Falls, NY 507 4,566 5,073 523 1994
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
---------------------------
Life Upon Which
Depreciation in
Late Statement
Description and Location of Operations
of Property is Computed
- ------------------------------------------------
<S> <C>
Corry Plaza
Corry, PA [e]
Cross Creek Plaza
Beaufort, SC [e]
Crossing Meadows
Onalaska, WI [e]
Crossroads Centre
Knoxville, TN [e]
Cumberland Crossing
Jacksboro, TN [e]
Cypress Bay Village
Morehead City, NC [e]
Dallas Plaza
Balch Springs, TX [e]
Daytona Plaza
Daytona Beach, FL [e]
Delaware Community Plaza
Delaware, OH [e]
East Pointe Plaza
Columbia, SC [e]
East Pointe Plaza
Marysville, OH [e]
Franklin Square
Spartanburg, SC [e]
Georgesville Square
Columbus, OH
Grand Union
Chatham, NY [e]
Grand Union Plaza
South Glens Falls, NY [e]
</TABLE>
66
<PAGE> 67
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- -------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gratiot Center
Saginaw, MI [h] $ 1,196 $ 10,778 $ 12
Hills Plaza East
Erie, PA [g] 241 2,240 249
Hocking Valley Mall
Lancaster, OH [g] 606 5,550 101
Horizon Park
Longmont, CO [g] 219 1,908 40
Hunter's Ridge Shopping Center
Gahanna, OH [h] 850 7,713 264
Huntington Plaza
Huntington, WV 175 525 41
Indian Mound Plaza
Heath, OH 22 384 40
Kmart
Alliance, NE [g] 175 1,567 6
Kmart
Bloomington, IN [g] 298 2,689
Kmart
Clifton Heights, PA [g] 277 2,491 122
Kmart
Fairhaven, MA [g] 221 1,995
Kmart
Feasterville, PA [g] 244 2,204
Kmart
Langhorne, PA [g] 314 2,936
Kmart
Leechburg, PA [g] 261 2,338 12
Kmart
Norfolk, VA [g] 188 1,662 49
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Date
Buildings and Construction
Description and Location Improvements Total Accumulated Was Date
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gratiot Center
Saginaw, MI $ 1,196 $ 10,790 $ 11,986 $ 1,236 1994
Hills Plaza East
Erie, PA 241 2,489 2,730 281 1994
Hocking Valley Mall
Lancaster, OH 606 5,651 6,257 699 1994
Horizon Park
Longmont, CO 219 1,948 2,167 230 1994
Hunter's Ridge Shopping Center
Gahanna, OH 850 7,977 8,827 847 1994
Huntington Plaza
Huntington, WV 175 566 741 200 1966
Indian Mound Plaza
Heath, OH 22 424 446 107 1988
Kmart
Alliance, NE 175 1,573 1,748 193 1994
Kmart
Bloomington, IN 298 2,689 2,987 327 1994
Kmart
Clifton Heights, PA 277 2,613 2,890 311 1994
Kmart
Fairhaven, MA 221 1,995 2,216 244 1994
Kmart
Feasterville, PA 244 2,204 2,448 270 1994
Kmart
Langhorne, PA 314 2,936 3,250 358 1994
Kmart
Leechburg, PA 261 2,350 2,611 288 1994
Kmart
Norfolk, VA 188 1,711 1,899 204 1994
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Life Upon Which
Depreciation in
Late Statement
Description and Location of Operations
of Property is Computed
- -------------------------------------------------
<S> <C>
Gratiot Center
Saginaw, MI [e]
Hills Plaza East
Erie, PA [e]
Hocking Valley Mall
Lancaster, OH [e]
Horizon Park
Longmont, CO [e]
Hunter's Ridge Shopping Center
Gahanna, OH [e]
Huntington Plaza
Huntington, WV [e]
Indian Mound Plaza
Heath, OH [e]
Kmart
Alliance, NE [e]
Kmart
Bloomington, IN [e]
Kmart
Clifton Heights, PA [e]
Kmart
Fairhaven, MA [e]
Kmart
Feasterville, PA [e]
Kmart
Langhorne, PA [e]
Kmart
Leechburg, PA [e]
Kmart
Norfolk, VA [e]
</TABLE>
67
<PAGE> 68
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- --------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Kmart
Seekonk, MA [g] $ 244 $ 2,182 $ 1
Kmart
Puyallup, WA [g] 426 3,870 34
Kmart
Yakima, WA [g] 256 2,305
Knox Village Square
Mount Vernon, OH [g] 865 8,479 159
Lexington Parkway Plaza
Lexington, NC $ 7,181 1,003 9,029 31
Liberty Plaza
Morristown, TN [g] 369 3,312
Linden Corners
Buffalo, NY [g] 414 3,726
Logan Place
Russellville, KY 2,190 367 3,307 20
Lowe's
Altoona, PA [h] 1,452 4,877 2
Lowe's
Columbus, OH [h] 1,330 4,569 18
Lowe's
Marion, OH [g] 626 2,454 2
Lowe's
Wooster, OH [g] 500 2,515 37
Loyal Plaza
Loyalsock, PA [g] 1,718 15,513 498
Marion Towne Center
Marion, SC 5,590 754 6,787 17
Meadowview Square
Kent, OH 9,542 9,522
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Date
Buildings and Construction
Description and Location Improvements Total Accumulated Was Date
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kmart
Seekonk, MA $ 244 $ 2,183 $ 2,427 $ 268 1994
Kmart
Puyallup, WA 426 3,904 4,330 487 1994
Kmart
Yakima, WA 256 2,305 2,561 283 1994
Knox Village Square
Mount Vernon, OH 865 8,638 9,503 1,356 1992
Lexington Parkway Plaza
Lexington, NC 1,003 9,060 10,063 494 1996
Liberty Plaza
Morristown, TN 369 3,312 3,681 407 1994
Linden Corners
Buffalo, NY 414 3,725 4,139 457 1994
Logan Place
Russellville, KY 367 3,327 3,694 180 1996
Lowe's
Altoona, PA 1,452 4,879 6,331 497 1994
Lowe's
Columbus, OH 1,330 4,587 5,917 459 1994
Lowe's
Marion, OH 626 2,455 3,081 335 1993
Lowe's
Wooster, OH 520 2,532 3,052 345 1993
Loyal Plaza
Loyalsock, PA 1,718 16,011 17,729 1,981 1994
Marion Towne Center
Marion, SC 754 6,804 7,558 370 1996
Meadowview Square
Kent, OH 408 9,114 9,522 418
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Life Upon Which
Depreciation in
Late Statement
Description and Location of Operations
of Property is Computed
- -------------------------------------------------
<S> <C>
Kmart
Seekonk, MA [e]
Kmart
Puyallup, WA [e]
Kmart
Yakima, WA [e]
Knox Village Square
Mount Vernon, OH [e]
Lexington Parkway Plaza
Lexington, NC [e]
Liberty Plaza
Morristown, TN [e]
Linden Corners
Buffalo, NY [e]
Logan Place
Russellville, KY [e]
Lowe's
Altoona, PA [e]
Lowe's
Columbus, OH [e]
Lowe's
Marion, OH [e]
Lowe's
Wooster, OH [e]
Loyal Plaza
Loyalsock, PA [e]
Marion Towne Center
Marion, SC [e]
Meadowview Square
Kent, OH
</TABLE>
68
<PAGE> 69
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- --------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Middletown Plaza
Middletown, OH [f] $ 127 $ 1,159 $ 175
Mill Run
Columbus, OH [h] 2,711 6,935 68
Monroe Shopping Center
Madisonville, TN [g] 375 3,522 72
Morgantown Commons
Morgantown, WV [i] 175 7,549 11,196
Morgantown Plaza
Star City, WV [f] 305 1,137 704
Morningside Plaza
Dade City, FL [g] 487 4,300 67
Mount Vernon Plaza
Mount Vernon, OH [k] 58 431 866
New Boston Mall
Portsmouth, OH [g] 537 4,906 167
Newberry Square Shopping Center
Newberry, SC [h] 594 5,355
Newport Plaza II
Newport, KY [g] 462 4,176 154
North Horner Shopping Center
Sanford, NC [g] 206 1,875
Northtowne Square
Chattanooga, TN [g] 390 3,516 61
Ohio River
Gallipolis, OH [f] 502 6,373 85
Pea Ridge Shopping Center
Huntington, WV [g] 687 6,160 265
Perdido Point Plaza
Pensacola, FL [g] 329 2,957
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Date
Buildings and Construction
Description and Location Improvements Total Accumulated Was Date
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Middletown Plaza
Middletown, OH $ 127 $ 1,334 $ 1,461 $ 247 1972
Mill Run
Columbus, OH 2,711 7,003 9,714 688 1995
Monroe Shopping Center
Madisonville, TN 375 3,594 3,969 430 1994
Morgantown Commons
Morgantown, WV 358 18,562 18,920 2,359 1991
Morgantown Plaza
Star City, WV 305 1,841 2,146 789 1967
Morningside Plaza
Dade City, FL 487 4,367 4,854 570 1994
Mount Vernon Plaza
Mount Vernon, OH 58 1,297 1,355 719 1963
New Boston Mall
Portsmouth, OH 537 5,073 5,610 621 1994
Newberry Square Shopping Center
Newberry, SC 594 5,355 5,949 573 1994
Newport Plaza II
Newport, KY 462 4,330 4,792 516 1994
North Horner Shopping Center
Sanford, NC 206 1,875 2,081 230 1994
Northtowne Square
Chattanooga, TN 390 3,577 3,967 441 1994
Ohio River
Gallipolis, OH 461 6,499 6,960 1,473 1989
Pea Ridge Shopping Center
Huntington, WV 687 6,425 7,112 813 1994
Perdido Point Plaza
Pensacola, FL 329 2,957 3,286 363 1994
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Life Upon Which
Depreciation in
Late Statement
Description and Location of Operations
of Property is Computed
- --------------------------------------------------
<S> <C>
Middletown Plaza
Middletown, OH [e]
Mill Run
Columbus, OH [e]
Monroe Shopping Center
Madisonville, TN [e]
Morgantown Commons
Morgantown, WV [e]
Morgantown Plaza
Star City, WV [e]
Morningside Plaza
Dade City, FL [e]
Mount Vernon Plaza
Mount Vernon, OH [e]
New Boston Mall
Portsmouth, OH [e]
Newberry Square Shopping Center
Newberry, SC [e]
Newport Plaza II
Newport, KY [e]
North Horner Shopping Center
Sanford, NC [e]
Northtowne Square
Chattanooga, TN [e]
Ohio River
Gallipolis, OH [e]
Pea Ridge Shopping Center
Huntington, WV [e]
Perdido Point Plaza
Pensacola, FL [e]
</TABLE>
69
<PAGE> 70
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- ------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Plaza Vista Mall
Sierra Vista, AZ [f] $ 1,531 $ 6,436 $ 3,585
Prestonsburg Village Center
Prestonsburg, KY [h] 663 6,002 112
Rend Lake Shopping Center
Benton, IL [g] 462 4,175 11
Rhea County Shopping Center
Dayton, TN [g] 395 3,524 31
River Edge Plaza
Sevierville, TN [g] 553 5,054
River Valley Plaza
Lancaster, OH [g] 320 5,035 676
Roane County Plaza
Rockwood, TN $ 4,883 630 5,669
Scott Town Plaza
Bloomsburg, PA [g] 188 1,730 56
Shady Springs Plaza
Beaver, WV [g] 455 4,094 116
Sidney Shopping Center .
Sidney, NY [k] 518 4,656
Southside Plaza
Sanford, NC [j] 960 8,644
Springfield Commons West
Springfield, OH [h],[l] 859 8,707 2,904
Steamboat Bend
Hannibal, MO [f] 100 1,649 409
Stewart Plaza
Mansfield, OH [f] 563 1,867 (149)
Sunbury Plaza
Sunbury, PA [g] 448 4,074 33
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
---------------------------
Date
Buildings and Construction
Description and Location Improvements Total Accumulated Was Date
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Plaza Vista Mall
Sierra Vista, AZ $ 1,395 $ 10,157 $ 11,552 $ 2,095 1988
Prestonsburg Village Center
Prestonsburg, KY 663 6,114 6,777 641 1994
Rend Lake Shopping Center
Benton, IL 462 4,186 4,648 512 1994
Rhea County Shopping Center
Dayton, TN 395 3,555 3,950 434 1994
River Edge Plaza
Sevierville, TN 553 5,054 5,607 618 1994
River Valley Plaza
Lancaster, OH 304 5,727 6,031 1,255 1988
Roane County Plaza
Rockwood, TN 630 5,669 6,299 307 1996
Scott Town Plaza
Bloomsburg, PA 188 1,786 1,974 234 1994
Shady Springs Plaza
Beaver, WV 455 4,210 4,665 517 1994
Sidney Shopping Center
Sidney, NY 518 4,656 5,174 524 1994
Southside Plaza
Sanford, NC 960 8,644 9,604 468 1996
Springfield Commons West
Springfield, OH 1,139 11,331 12,470 880 1995
Steamboat Bend
Hannibal, MO 100 2,058 2,158 466 1988
Stewart Plaza
Mansfield, OH 263 2,018 2,281 950 1979
Sunbury Plaza
Sunbury, PA 448 4,107 4,555 512 1994
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
---------------------------
Life Upon Which
Depreciation in
Late Statement
of Property is Computed
- -------------------------------------------------
<S> <C>
Plaza Vista Mall
Sierra Vista, AZ [e]
Prestonsburg Village Center
Prestonsburg, KY [e]
Rend Lake Shopping Center
Benton, IL [e]
Rhea County Shopping Center
Dayton, TN [e]
River Edge Plaza
Sevierville, TN [e]
River Valley Plaza
Lancaster, OH [e]
Roane County Plaza
Rockwood, TN [e]
Scott Town Plaza
Bloomsburg, PA [e]
Shady Springs Plaza
Beaver, WV [e]
Sidney Shopping Center
Sidney, NY [e]
Southside Plaza
Sanford, NC [e]
Springfield Commons West
Springfield, OH [e]
Steamboat Bend
Hannibal, MO [e]
Stewart Plaza
Mansfield, OH [e]
Sunbury Plaza
Sunbury, PA [e]
</TABLE>
70
<PAGE> 71
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- ------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sycamore Square
Ashland City, TN [j] $ 334 $ 3,010 $ 6
Target Plaza
Heath, OH [l] 171 17
Torresdale Plaza
Philadelphia, PA [g] 476 4,282 60
Twin County Plaza
Galax, VA [l] 575 5,199 42
Village Plaza
Augusta, GA $ 18,556 2,194 19,747 41
Village Plaza
Manhattan, KS [k] 100 1,481 273
Village Square
Kutztown, PA [g] 225 2,013 68
Vincennes
Vincennes, IN [g] 208 1,875 136
Walgreens
Louisville, KY [g] 128 1,141 27
Walgreens
New Albany, IN [g] 123 1,093 28
Walmart Plaza
Springfield, OH [h] 875 7,952 36
Walnut Cove
Walnut Cove, NC [g] 209 1,855 14
Walterboro Plaza
Walterboro, SC [j] 629 5,660 96
Westpark Plaza
Carbondale, IL [g] 432 3,881 33
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
-------------------------------
Date
Buildings and Construction
Description and Location Improvements Total Accumulated Was Date
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Sycamore Square
Ashland City, TN $ 334 $ 3,016 $ 3,350 $ 165 1996
Target Plaza
Heath, OH 171 17 188 1 1995
Torresdale Plaza
Philadelphia, PA 476 4,342 4,818 528 1994
Twin County Plaza
Galax, VA 575 5,241 5,816 437 1995
Village Plaza
Augusta, GA 2,194 19,788 21,982 1,081 1996
Village Plaza
Manhattan, KS 100 1,754 1,854 502 1988
Village Square
Kutztown, PA 225 2,080 2,305 250 1994
Vincennes
Vincennes, IN 208 2,011 2,219 236 1994
Walgreens
Louisville, KY 128 1,168 1,296 141 1994
Walgreens
New Albany, IN 123 1,121 1,244 136 1994
Walmart Plaza
Springfield, OH 875 7,988 8,863 711 1995
Walnut Cove
Walnut Cove, NC 209 1,869 2,078 228 1994
Walterboro Plaza
Walterboro, SC 721 5,664 6,385 308 1996
Westpark Plaza
Carbondale, IL 432 3,914 4,346 477 1994
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
-------------------------------
Life Upon Which
Depreciation in
Late Statement
Description and Location of Operations
of Property is Computed
- --------------------------------------------
<S> <C>
Sycamore Square
Ashland City, TN [e]
Target Plaza
Heath, OH [e]
Torresdale Plaza
Philadelphia, PA [e]
Twin County Plaza
Galax, VA [e]
Village Plaza
Augusta, GA [e]
Village Plaza
Manhattan, KS [e]
Village Square
Kutztown, PA [e]
Vincennes
Vincennes, IN [e]
Walgreens
Louisville, KY [e]
Walgreens
New Albany, IN [e]
Walmart Plaza
Springfield, OH [e]
Walnut Cove
Walnut Cove, NC [e]
Walterboro Plaza
Walterboro, SC [e]
Westpark Plaza
Carbondale, IL [e]
</TABLE>
71
<PAGE> 72
GLIMCHER REALTY TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
as of December 31, 1998
(dollars in thousands)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent
Initial Cost to Acquisition
---------------------- -------------------
Buildings and
Description and Location Improvements
of Property Encumbrances [d] Land [a] Improvements
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PARTNERSHIPS
Glimcher Properties Limited
Partnership 1,780 2,433
---------- ---------- ----------
88,730 867,542 471,769
---------- ---------- ----------
DEVELOPMENTS IN PROGRESS
Georgesville Square
Columbus, OH
Grand Central Mall
Parkersburg, WV
Indian Mound Mall
Heath, OH
Mall at Fairfield Commons
Beavercreek, OH
Meadowview Square
Kent, OH 1,752
Other Developments - - 3,207
---------- ---------- ----------
- - 4,959
---------- ---------- ----------
Total $ 88,730 $ 867,542 $ 476,728
========== ========== ==========
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Date
Buildings and Construction
Description and Location Improvements Total Accumulated Was Date
of Property Land [b] [c] [b] [c] Depreciation Completed Acquired
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PARTNERSHIPS
Glimcher Properties Limited
Partnership 5,133 5,133 1,711 1994
---------- ------------ ------------ ----------
171,266 1,240,121 1,411,387 137,229
---------- ------------ ------------ ----------
DEVELOPMENTS IN PROGRESS
Georgesville Square
Columbus, OH 3,330 130 3,460
Grand Central Mall
Parkersburg, WV 4,363 4,363
Indian Mound Mall
Heath, OH 1,648 1,648
Mall at Fairfield Commons
Beavercreek, OH 1,808 1,808
Meadowview Square
Kent, OH 1,711 31 1,742
Other Developments 1,142 3,091 4,233 -
---------- ------------ ------------ ----------
6,183 11,071 17,254 -
---------- ------------ ------------ ----------
Total $ 177,449 $ 1,251,192 $ 1,428,641 $ 137,229
========== ============ ============ ==========
<CAPTION>
Gross Amounts at Which
Carried at Close of Period
----------------------------
Life Upon Which
Depreciation in
Late Statement
Description and Location of Operations
of Property is Computed
- ----------------------------------------------
<S> <C>
PARTNERSHIPS
Glimcher Properties Limited
Partnership [e]
DEVELOPMENTS IN PROGRESS
Georgesville Square
Columbus, OH
Grand Central Mall
Parkersburg, WV
Indian Mound Mall
Heath, OH
Mall at Fairfield Commons
Beavercreek, OH
Meadowview Square
Kent, OH
Other Developments
Total
</TABLE>
72
<PAGE> 73
73
GLIMCHER REALTY TRUST
NOTES TO SCHEDULE III
(DOLLARS IN THOUSANDS)
(a) Initial cost for constructed and acquired property is cost at end
of first complete calendar year subsequent to opening or acquisition. For
centers that opened during 1998 and have not yet completed their first calendar
year subsequent to opening, the initial cost is cost incurred through December
31, 1998.
(b) The aggregate gross cost of land and buildings, improvements and
equipment for federal income tax purposes is
approximately $1,427,041.
(c) RECONCILIATION OF REAL ESTATE
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year...................................... $1,091,422 $ 949,138 $ 696,898
Additions:
Improvements................................................ 27,725 29,375 41,841
Acquisitions................................................ 322,284 121,254 214,220
Deductions........................................................ (12,790) (8,345) (3,821)
---------- ----------- ---------
Balance at close of year.......................................... $1,428,641 $1,091,422 $ 949,138
========== ========== =========
</TABLE>
RECONCILIATION OF ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year...................................... $ 107,611 $ 86,421 $ 66,699
Depreciation expense............................................ 32,090 25,150 20,124
Deductions...................................................... (2,472) (3,960) (402)
------------- ------------- ------------
Balance at close of year.......................................... $ 137,229 $ 107,611 $ 86,421
=========== =========== ==========
(d) See description of debt in notes 3 and 4 of Notes to Consolidated Financial Statements.
(e) Depreciation is computed based upon the following estimated lives:
Buildings and improvements 40 years
Equipment and fixtures 5-10 years
(f) Properties cross-collateralize the Credit Facility with a
consortium of banks of up to $190,000.
(g) Properties cross-collateralize the following loans:
Glimcher Holdings Limited Partnership Loan A............................. $40,000
Glimcher Holdings Limited Partnership Loan B............................. $40,000
Glimcher Centers Limited Partnership..................................... $76,000
Grand Central Limited Partnership........................................ $25,000
(h) Properties cross-collateralize the following loan:
Glimcher Properties Limited Partnership.................................. $50,000
(i) Properties cross-collateralize the following loan:
Morgantown Mall Associates Limited Partnership........................... $58,214
(j) Properties cross-collateralize the following bridge loan:
Glimcher Properties Limited Partnership.................................. $50,000
</TABLE>
73
<PAGE> 74
<TABLE>
<S> <C>
(k) Properties cross-collaterize the following bridge loan:
Glimcher Properties Limited Partnership.................................. $10,000
(l) Properties cross-collateralize the following bridge loan:
Glimcher Properties Limited Partnership.................................. $14,000
(m) The Property collateralizes the following loan:
Weberstown Mall, LLC..................................................... $11,520
(n) The Property collateralizes the following loans:
Montgomery Mall Associates Limited Partnership........................... $47,602
Glimcher Properties Limited Partnership.................................. $15,000
</TABLE>
74
<PAGE> 1
Exhibit 10.64
PROMISSORY NOTE
New York, New York
$50,000,000 June 1, 1998
FOR VALUE RECEIVED, GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership (hereinafter "MAKER"), having its principal place
of business at 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 FIFTY
MILLION AND NO/100 DOLLARS ($50,000,000), 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 Applicable 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, 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 (as
hereinafter defined)).
and the balance of said principal sum together with all accrued and unpaid
interest thereon shall be due and payable on a date (the "MATURITY DATE") which
is July 30, 1999. 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. 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) those certain (x) Deed of Trust, Assignment of Leases
and Rents and Security Agreements, (y) Mortgage, Assignment of Leases and Rents
and Security Agreements and (z) Deed to Secure Debt, Assignment of Leases and
Rents and Security Agreements ((x), (y) and (z), each a "MORTGAGE"), each dated
as of the date hereof, given by Maker, as mortgagor, for the use and benefit of
Payee, as mortgagee, each encumbering the fee estate of Maker in certain
property more particularly described in each such Mortgage,
<PAGE> 2
(b) those certain 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
each Mortgage, each 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 each
Mortgage, each 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 Mortgage, any Assignment of Leases or other Loan
Documents and no other provision of this Note or of any Mortgage, any Assignment
of Leases or any 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 each Mortgage, each 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.
2. 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.
3. 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.
4. 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
2
<PAGE> 3
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.
5. 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, such tender by Maker shall be deemed to be voluntary and Maker
shall pay, in addition to the Debt. 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.
6. All of the Debt shall be due and payable on the Maturity
Date.
7. 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 reformed and the amounts thereafter
collectible hereunder and thereunder reduced,
3
<PAGE> 4
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.
8. INTENTIONALLY DELETED
9. 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.
10. 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.
11. 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.
12. 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.
4
<PAGE> 5
13. 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.
14. 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.
15. MAKER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO
THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE
LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION
THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY MAKER, AND IS INTENDED TO 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.
16. 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.
Maker has duly executed this Promissory Note the day and year
first above written.
GLIMCHER PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: GLIMCHER PROPERTIES
CORPORATION, a Delaware corporation,
its general partner
By: /s/ George A. Schmidt
------------------------------
Name: George A. Schmidt
Title: Senior Vice President
5
<PAGE> 6
Pay to the order of _________________________________________________,
without recourse.
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:
Name:
Title:
6
<PAGE> 1
Exhibit 10.65
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
MORTGAGOR: 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
MORTGAGE AMOUNT: $50,000,000
DATE: As of June 1, 1998
RECORD AND RETURN TO:
Weil, Gotshal and Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8097
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
PARTNERS LIMITED PARTNERSHIP, a Delaware limited partnership ("MORTGAGOR"), with
an address for the transaction of business at 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 State of South Carolina, 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 Mortgagor in the original principal amount of
$50,000,000 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 $50,000,000,
together with interest thereon, with final payment being due on or before the
Stated Maturity Date (all capitalized terms not otherwise defined herein shall
have the meaning set forth in the Loan Agreement); and
C. The Loan is secured by certain other (x) deeds of trust,
(y) mortgages and (z) assignments of leases and rents (the "OTHER LOAN
DOCUMENTS") now encumbering other real properties which are now owned by
Mortgagor; and
D. 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; and
E. 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:
THAT, in order to secure the payment of an indebtedness in the
principal sum of FIFTY MILLION and No/100 Dollars ($50,000,000), 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, this
Mortgage and the
2
<PAGE> 3
Other Loan Documents (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 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;
3
<PAGE> 4
(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 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
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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 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.
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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 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.
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
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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), without the need for
notice or demand, the license granted to Mortgagor herein shall automatically be
revoked, and Mortgagee shall immediately be entitled to take possession of the
Leases and receive and apply all Rents, whether or not Mortgagee enters upon or
takes control of the Mortgaged Property. Mortgagee is hereby granted and
assigned by Mortgagor the right, at its option, upon revocation of the license
granted herein, to enter upon the Mortgaged Property in person, by agent or by
court-appointed receiver to collect the Rents. Any Rents collected after the
revocation of the license 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) INTENTIONALLY DELETED
(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
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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.
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
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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.
(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
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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 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
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appointment of a receiver or any other relevant action, Mortgagor will, at the
cost of Mortgagor and without expense to Mortgagee, cooperate fully and
completely to effect the assignment or transfer of any license, permit,
agreement or any other right necessary or useful to the operation of the
Mortgaged Property. Mortgagor grants to Mortgagee an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
any and all rights and remedies available to Mortgagee at law and in equity,
including, without limitation, such rights and remedies available to Mortgagee
pursuant to this Paragraph.
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 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;
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(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;
(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);
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(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 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 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:
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(i) declare the entire Debt to be immediately due and
payable;
(ii) institute a proceeding or proceedings, judicial
or nonjudicial, by advertisement or otherwise, for the
complete foreclosure of this Mortgage, in which case the
Mortgaged Property or any interest therein may be sold for
cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner;
(iii) with or without entry, to the extent permitted
and pursuant to the procedures provided by applicable law,
institute proceedings for the partial foreclosure of this
Mortgage for the portion of the Debt then due and payable,
subject to the continuing lien of this Mortgage for the
balance of the Debt not then due;
(iv) sell for cash or upon credit the Mortgaged
Property or any part thereof and all estate, claim, demand,
right, title and interest of Mortgagor therein and rights of
redemption thereof, pursuant to power of sale or otherwise, at
one or more sales, as an entirety or in parcels, at such time
and place, upon such terms and after such notice thereof as
may be required or permitted by law;
(v) institute an action, suit or proceeding in equity
for the specific performance of any covenant, condition or
agreement contained herein or in any of the other Loan
Documents;
(vi) recover judgment on the Note either before,
during or after any proceedings for the enforcement of this
Mortgage; (vii) apply for the appointment of a trustee,
receiver, liquidator or conservator of the Mortgaged Property,
without notice and without regard for the adequacy of the
security for the Debt and without regard for the solvency of
the Mortgagor, or of any person, firm or other entity liable
for the payment of the Debt;
(viii) enforce Mortgagee's interest in the Leases and
Rents and enter into or upon the 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
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(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. In
the event of a sale, by foreclosure or otherwise, of less than
all of the Mortgaged Property, this Mortgage shall continue as
a lien on the remaining portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this
Paragraph 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 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
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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. 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.
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(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 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
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(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.
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.
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
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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 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
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
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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 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
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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 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
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<PAGE> 22
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 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 Mortgagor
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.
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<PAGE> 23
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 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
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<PAGE> 24
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 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 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.
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<PAGE> 25
(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 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.
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(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 July 30, 1999 (the Stated 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 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:
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<PAGE> 27
(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 Mortgagor 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:
(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. Annexed hereto as Exhibit B are additional
provisions which shall be deemed incorporated herein by reference. In the event
of any inconsistencies between
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<PAGE> 28
the provisions of this Mortgage and the provisions of Exhibit B, the provisions
of Exhibit B shall control and be binding.
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.
54. WAIVER OF APPRAISAL RIGHTS. The laws of South Carolina
provide that in any real estate foreclosure proceeding a defendant against whom
a personal judgment is taken or asked may within thirty (30) days after the sale
of the mortgaged property apply to the court for an order of appraisal. The
statutory appraisal value as approved by the court would be substituted for the
high bid and may decrease the amount of any deficiency owing in connection with
the transaction. THE UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE STATUTORY
APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL
BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE MORTGAGED
PROPERTY.
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 PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: GLIMCHER PROPERTIES CORPORATION,
a Delaware corporation, its
general partner
By: /s/ George A. Schmidt
--------------------------------
Name: George A. Schmidt
Title: Senior Vice President
[CORPORATE SEAL]
WITNESSES:
Name:
-------------------------
Name:
-------------------------
28
<PAGE> 29
STATE OF ______________ )
) ss.
COUNTY OF _____________ )
On this _____ day of ___________, before me, a notary public
in and for said State, personally came , to me known, who, being by me duly
sworn, did depose and say that he resides at
_________________________________________________; that he is a
__________________ of ____________________________________, a ____________
corporation and the ________ of _______________________________, the
_____________ named in the foregoing instrument; and that he executed such
instrument as the act and deed of, and on behalf of, said limited liability
company.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed
my official seal the day and year in this certificate first above written.
/s/ Judith Tompkins
---------------------------------
Notary Public
[NOTORIAL SEAL]
My commission expires: December 26, 1999
29
<PAGE> 30
EXHIBIT A
LEGAL DESCRIPTION
30
<PAGE> 31
EXHIBIT B
LOCAL LAW
None.
31
<PAGE> 1
Exhibit 10.66
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
1
<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
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counsel whether or not suit be brought.
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
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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
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
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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.
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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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
its: Senior Vice President
Pay to the order of
without recourse. -----------------------,
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:
--------------------------------
Name:
Title:
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<PAGE> 1
Exhibit 10.67
===============================================================================
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:
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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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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 construction, repair or other work upon the Premises, the Improvements
or the Equipment and
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<PAGE> 5
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 Documents are hereby made a part of this Mortgage
to the same extent and with the same force as if fully set forth herein.
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<PAGE> 6
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 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.
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<PAGE> 7
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.
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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.
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.ss. 576.01, Subd. 2 in the priority
numbered;
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(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;
(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.
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(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. 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
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<PAGE> 11
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, 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
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<PAGE> 12
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.
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;
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<PAGE> 13
(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.
(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
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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
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
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useful to the operation of the Mortgaged Property. Mortgagor grants to Mortgagee
an irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Mortgagee
at law and in equity, including, without limitation, such rights and remedies
available to Mortgagee pursuant to this Paragraph.
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
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Loan Document or in any certificate, report, financial statement or
other instrument, agreement 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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(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 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.
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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;
(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
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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.
(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
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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 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
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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. 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.
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(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.
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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 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.
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(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.
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.
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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.
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.
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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 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,
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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 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
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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 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.
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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 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
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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 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.
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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 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
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<PAGE> 32
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 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
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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 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
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<PAGE> 34
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 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
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<PAGE> 35
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 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.
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<PAGE> 36
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:
(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
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<PAGE> 37
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
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 12/26/99
<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 60(Degree)
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 57(Degree) 29'
46" East a distance of 1009.34 feet to the East line of said Lot 4; thence South
00(Degree) 28' 56" East along said East line a distance of 420.93 feet; thence
South 89(Degree) 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 90(Degree) 00' 00" and an arc length of 314.16 feet; thence
tangent to said curve South 00(Degree) 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 35(Degree) 16' 49" and an arc length of 92.36
feet; thence nontangential to said curve South 55(Degree) 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 35(Degree) 16' 49",
an arc length of 141.62 feet, a chord bearing of South 17(Degree) 16' 38" West
and a chord distance of 139.40 feet; thence tangent to said curve South
00(Degree) 21' 46" East a distance of 60.00 feet to the South line of said Lot
4; thence South 89(Degree) 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 77(Degree) 28' 16"
and an arc length of 285.07 feet; thence tangent to said curve North 12(Degree)
53' 30" West a distance of 165.85 feet; thence 32(Degree) 59' 20" West a
distance of 108.06 feet; thence North 68(Degree) 45' 03" West a distance of
72.38 feet; thence North 19(Degree) 29' 46" West a distance of 303.39 feet;
thence South 00(Degree) 21' 46" East a distance of 228.82 feet to the centerline
of vacated University Avenue Northeast; thence North 19(Degree) 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 40(Degree) 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 13(Degree) 01' 26" and an arc length of 124.04
feet; thence South 43(Degree) 31' 40" West a distance of 75.00 feet; thence
North 34(Degree) 31' 26" West a distance of 148.02 feet; thence North 07(Degree)
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
30(Degree) 05' 34", an arc length of 247.20 feet, a chord bearing of North
13(Degree) 04' 08" East and a chord distance of 244.37 feet; thence South
57(Degree) 29' 46" East a distance of 310.20 feet; thence South 32(Degree) 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 90(Degree) 00' 00" and an arc length of 298.45 feet; thence South 57(Degree)
29' 46" East tangent to said curve a distance of 456.16; thence Southeasterly
along a tangential curve concave to the Southwest having a radius of 190.00
feet, a central angle of 38(Degree) 00' 00" and an arc length of 126.01 feet;
thence South 19(Degree) 29' 46" East tangent to said curve a distance of 84.67
feet; thence North 32(Degree) 30' 14" East a distance of 257.40 feet; thence
<PAGE> 40
North 57(Degree) 29' 46" West a distance of 150.00 feet; thence North 32(Degree)
30' 14" East a distance of 460.00 feet; thence South 57(Degree) 29' 46" East a
distance of 85.00 feet; thence North 32(Degree) 30' 14" East a distance of
230.00 feet; thence North 57(Degree) 29' 46" West a distance of 55.50 feet;
thence North 32(Degree) 30' 14" East a distance of 147.42 feet to the point of
beginning and there terminating.
<PAGE> 1
Exhibit 10.68
PROMISSORY NOTE
$47,750,000 New York, New York
As of July 15, 1998
FOR VALUE RECEIVED MONTGOMERY MALL ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited partnership, as maker, having its principal
place of business at 20 South Third Street, Columbus, Ohio 43215 ("BORROWER"),
hereby unconditionally promises to pay to the order of LEHMAN BROTHERS HOLDINGS
INC., a Delaware corporation, d/b/a LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., as lender, having an address at Three World Financial
Center, New York, New York 10281 ("LENDER"), or at such other place as the
holder hereof may from time to time designate in writing, the principal sum of
FORTY-SEVEN MILLION SEVEN HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($47,750,000), in lawful money of the United States of America with interest
thereon to be computed from the date of this Note at the Applicable Interest
Rate, and to be paid in accordance with the terms of this Note and that certain
Loan Agreement of even date herewith between Borrower and Lender (the "LOAN
AGREEMENT"). All capitalized terms not defined herein shall have the respective
meanings set forth in the Loan Agreement.
ARTICLE 1: PAYMENT TERMS
Borrower agrees to pay the principal sum of this Note and
interest on the unpaid principal sum of this Note from time to time outstanding
at the rates and at the times specified in Article 2 of the Loan Agreement and
the outstanding balance of the principal sum of this Note and all accrued and
unpaid interest thereon shall be due and payable on the Maturity Date.
ARTICLE 2: DEFAULT AND ACCELERATION
The Debt shall without notice become immediately due and
payable at the option of Lender if any payment required in this Note is not paid
on or prior to the date when due or if not paid on the Maturity Date or on the
happening of any other Event of Default.
ARTICLE 3: LOAN DOCUMENTS
This Note is secured by the Mortgage and the other Loan
Documents. All of the terms, covenants and conditions contained in the Loan
Agreement, the Mortgage and the other Loan Documents are hereby made part of
this Note to the same extent and with the same force as if they were fully set
forth herein. In the event of a conflict or inconsistency between the terms of
this Note and the Loan Agreement, the terms and provisions of the Loan Agreement
shall govern.
<PAGE> 2
ARTICLE 4: SAVINGS CLAUSE
Notwithstanding anything to the contrary, (a) all agreements
and communications between Borrower and Lender are hereby and shall
automatically be limited so that, after taking into account all amounts deemed
interest, the interest contracted for, charged or received by Lender shall never
exceed the maximum lawful rate or amount, (b) in calculating whether any
interest exceeds the lawful maximum, all such interest shall be amortized,
prorated, allocated and spread over the full amount and term of all principal
indebtedness of Borrower to Lender, and (c) if through any contingency or event,
Lender receives or is deemed to receive interest in excess of the lawful
maximum, any such excess shall be deemed to have been applied toward payment of
the principal of any and all then outstanding indebtedness of Borrower to
Lender, or if there is no such indebtedness, shall immediately be returned to
Borrower.
ARTICLE 5: NO ORAL CHANGE
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 Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
ARTICLE 6: WAIVERS
Borrower 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, notice of intention to accelerate, notice of
acceleration, protest and notice of protest and non-payment and all other
notices of any kind. No release of any security for the Debt or extension of
time for payment of this Note or any installment hereof, and no alteration,
amendment or waiver of any provision of this Note, the Loan Agreement or the
other Loan Documents made by agreement between Lender or any other Person shall
release, modify, amend, waive, extend, change, discharge, terminate or affect
the liability of Borrower, and any other Person who may become liable for the
payment of all or any part of the Debt, under this Note, the Loan Agreement or
the other Loan Documents. No notice to or demand on Borrower shall be deemed to
be a waiver of the obligation of Borrower or of the right of Lender to take
further action without further notice or demand as provided for in this Note,
the Loan Agreement or the other Loan Documents. If Borrower is a partnership,
the agreements herein contained shall remain in force and applicable,
notwithstanding any changes in the individuals comprising the partnership, and
the term "Borrower," as used herein, shall include any alternate or successor
partnership, but any predecessor partnership and their partners shall not
thereby be released from any liability. If Borrower is a corporation, the
agreements contained herein shall remain in full force and applicable
notwithstanding any changes in the shareholders comprising, or the officers and
directors relating to, the corporation, and the term "Borrower" as used herein,
shall include any alternative or successor corporation, but any predecessor
corporation shall not be relieved of liability hereunder. (Nothing in the
foregoing sentence shall be construed as a consent to, or a waiver of, any
prohibition or restriction on
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<PAGE> 3
transfers of interests in such partnership which may be set forth in the Loan
Agreement, the Mortgage or any other Loan Document.)
ARTICLE 7: TRANSFER
Upon the transfer of this Note, Borrower hereby waiving notice
of any such transfer, Lender may deliver all the collateral mortgaged, granted,
pledged or assigned pursuant to the Loan Documents, or any part thereof, to the
transferee who shall thereupon become vested with all the rights herein or under
applicable law given to Lender with respect thereto, and Lender shall thereafter
forever be relieved and fully discharged from any liability or responsibility in
the matter; but Lender shall retain all rights hereby given to it with respect
to any liabilities and the collateral not so transferred.
ARTICLE 8: EXCULPATION
The provisions of Section 9.4 of the Loan Agreement are
hereby incorporated by reference into this Note to the same extent and with the
same force as if fully set forth herein.
ARTICLE 9: GOVERNING LAW
(A) THIS NOTE WAS NEGOTIATED IN THE STATE OF NEW YORK, AND
MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE
PROCEEDS OF THIS NOTE WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS NOTE AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS NOTE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS NOTE MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
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<PAGE> 4
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT
CT CORPORATION SYSTEM, INC.
1633 BROADWAY, 23RD FLOOR
NEW YORK, NEW YORK 10019
ATTENTION: SERVICE OF PROCESS DEPARTMENT
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
ARTICLE 10: NOTICES
All notices or other written communications hereunder shall be
delivered in accordance with Section 10.6 of the Loan Agreement.
[NO FURTHER TEXT ON THIS PAGE]
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<PAGE> 5
IN WITNESS WHEREOF, Borrower has duly executed this Note as of
the day and year first above written.
MONTGOMERY MALL ASSOCIATES
LIMITED PARTNERSHIP, a Delaware
limited partnership
By: GLIMCHER MONTGOMERY, INC., a
Delaware corporation, its sole general
partner
By: /s/ George A. Schmidt
-------------------------------------
Name: George A. Schmidt
Title: Senior Vice President
<PAGE> 1
Exhibit 10.69
===============================================================================
MONTGOMERY MALL ASSOCIATES LIMITED PARTNERSHIP
a Delaware limited partnership, as Borrower
(Borrower)
to
LEHMAN BROTHERS HOLDINGS INC., D/B/A LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC., as Lender
(Lender)
--------------------------
MORTGAGE AND
SECURITY AGREEMENT
--------------------------
Dated: As of July 15, 1998
Location: Montgomery Mall
McGehee Road & South Boulevard
County: Montgomery
PREPARED BY AND UPON
RECORDATION RETURN TO:
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: Paul A. Keenan, Esq.
===============================================================================
<PAGE> 2
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT (this "MORTGAGE") is made
as of this 15th day of July, 1998, by MONTGOMERY MALL ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited partnership, having its principal place of
business at 20 South Third Street, Columbus, Ohio 43215, as mortgagor
("BORROWER") for the benefit of LEHMAN BROTHERS HOLDINGS INC., a Delaware
corporation, d/b/a LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS HOLDINGS INC.,
having an address at Three World Financial Center, New York, New York 10281, as
mortgagee ("LENDER").
W I T N E S S E T H:
WHEREAS, this Mortgage is given to secure a loan (the "LOAN")
in the principal sum of FORTY-SEVEN MILLION SEVEN HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($47,750,000) advanced pursuant to that certain Loan Agreement
dated as of the date hereof between Borrower and Lender (as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time, the "LOAN AGREEMENT") and evidenced by that certain Promissory Note dated
the date hereof made by Borrower to Lender (such Note, together with all
extensions, renewals, replacements, restatements or modifications thereof being
hereinafter referred to as the "NOTE");
WHEREAS, Borrower desires to secure the payment of the Debt
(as defined in the Loan Agreement) and the performance of all of its obligations
under the Note, the Loan Agreement and the other Loan Documents; and
WHEREAS, this Mortgage is given pursuant to the Loan
Agreement, and payment, fulfillment, and performance by Borrower of its
obligations thereunder and under the other Loan Documents are secured hereby,
and each and every term and provision of the Loan Agreement and the Note,
including the rights, remedies, obligations, covenants, conditions,
agreements, indemnities, representations and warranties of the parties
therein, are hereby incorporated by reference herein as though set forth in
full and shall be considered a part of this Mortgage (the Loan Agreement, the
Note, this Mortgage, that certain Assignment of Leases and Rents of even date
herewith made by Borrower in favor of Lender (the "ASSIGNMENT OF LEASES") and
all other documents evidencing or securing the Debt are hereinafter referred
to collectively as the "LOAN DOCUMENTS").
NOW THEREFORE, in consideration of the making of the Loan by
Lender and the covenants, agreements, representations and warranties set forth
in this Mortgage:
Article 1 - GRANTS OF SECURITY
Section 1.1 PROPERTY MORTGAGED . Borrower does hereby
irrevocably mortgage, grant, bargain, sell, pledge, assign, warrant, transfer
and convey to Lender and its successors and assigns, together with a power of
sale, the following property, rights, interests and estates now owned, or
hereafter acquired by Borrower (collectively, the "PROPERTY"):
<PAGE> 3
(a) LAND. The real property described in EXHIBIT A
attached hereto and made a part hereof (the "LAND");
(b) ADDITIONAL LAND. All additional lands, estates
and development rights hereafter acquired by Borrower for use
in connection with the Land and the development of the Land
and all additional lands and estates therein which may, from
time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Mortgage;
(c) IMPROVEMENTS. The buildings, structures,
fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter
erected or located on the Land (collectively, the
"IMPROVEMENTS");
(d) EASEMENTS. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys,
passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates,
rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging, relating or
pertaining to the Land and the Improvements and the reversion
and reversions, remainder and remainders, and all land lying
in the bed of any street, road or avenue, opened or proposed,
in front of or adjoining the Land, to the center line thereof
and all the estates, rights, titles, interests, dower and
rights of dower, curtesy and rights of curtesy, property,
possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the
Improvements and every part and parcel thereof, with the
appurtenances thereto;
(e) EQUIPMENT. All "equipment," as such term is
defined in Article 9 of the Uniform Commercial Code, now owned
or hereafter acquired by Borrower, which is used at or in
connection with the Improvements or the Land or is located
thereon or therein (including, but not limited to, all
machinery, equipment, furnishings, and electronic
data-processing and other office equipment now owned or
hereafter acquired by Borrower and any and all additions,
substitutions and replacements of any of the foregoing),
together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto
(collectively, the "EQUIPMENT"). Notwithstanding the
foregoing, Equipment shall not include any property belonging
to tenants under leases except to the extent that Borrower
shall have any right or interest therein;
(f) FIXTURES. All Equipment now owned, or the
ownership of which is hereafter acquired, by Borrower which is
so related to the Land and Improvements forming part of the
Property that it is deemed fixtures or real property under the
law of the particular state in which the Equipment is located,
including, without limitation, all building or construction
materials intended for
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<PAGE> 4
construction, reconstruction, alteration or repair of or
installation on the Property, construction equipment,
appliances, machinery, plant equipment, fittings, apparatuses,
fixtures and other items now or hereafter attached to,
installed in or used in connection with (temporarily or
permanently) any of the Improvements or the Land, including,
but not limited to, engines, devices for the operation of
pumps, pipes, plumbing, cleaning, call and sprinkler systems,
fire extinguishing apparatuses and equipment, heating,
ventilating, plumbing, laundry, incinerating, electrical, air
conditioning and air cooling equipment and systems, gas and
electric machinery, appurtenances and equipment, pollution
control equipment, security systems, disposals, dishwashers,
refrigerators and ranges, recreational equipment and
facilities of all kinds, and water, gas, electrical, storm and
sanitary sewer facilities, utility lines and equipment
(whether owned individually or jointly with others, and, if
owned jointly, to the extent of Borrower's interest therein)
and all other utilities whether or not situated in easements,
all water tanks, water supply, water power sites, fuel
stations, fuel tanks, fuel supply, and all other structures,
together with all accessions, appurtenances, additions,
replacements, betterments and substitutions for any of the
foregoing and the proceeds thereof (collectively, the
"FIXTURES"). Notwithstanding the foregoing, "Fixtures" shall
not include any property which tenants are entitled to remove
pursuant to leases except to the extent that Borrower shall
have any right or interest therein;
(g) PERSONAL PROPERTY. All furniture, furnishings,
objects of art, machinery, goods, tools, supplies, appliances,
general intangibles, contract rights, accounts, accounts
receivable, franchises, licenses, certificates and permits,
and all other personal property of any kind or character
whatsoever (as defined in and subject to the provisions of the
Uniform Commercial Code as hereinafter defined), other than
Fixtures, which are now or hereafter owned by Borrower and
which are located within or about the Land and the
Improvements, together with all accessories, replacements and
substitutions thereto or therefor and the proceeds thereof
(collectively, the "PERSONAL PROPERTY"), and the right, title
and interest of Borrower in and to any of the Personal
Property which may be subject to any security interests, as
defined in the Uniform Commercial Code, as adopted and enacted
by the state or states where any of the Property is located
(the "UNIFORM COMMERCIAL CODE"), superior in lien to the lien
of this Mortgage and all proceeds and products of the above;
(h) LEASES AND RENTS. All leases and other agreements
affecting the use, enjoyment or occupancy of the Land and the
Improvements heretofore or hereafter entered into, whether
before or after the filing by or against Borrower of any
petition for relief under 11 U.S.C. ss.101 et seq., as the
same may be amended from time to time (the "BANKRUPTCY CODE")
(collectively, the "LEASES") and all right, title and interest
of Borrower, its successors and assigns therein and
thereunder, including, without limitation, cash or securities
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<PAGE> 5
deposited thereunder to secure the performance by the lessees
of their obligations thereunder and all rents, additional
rents, revenues, issues and profits (including all oil and gas
or other mineral royalties and bonuses) from the Land and the
Improvements whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under
the Bankruptcy Code (collectively, the "RENTS") and all
proceeds from the sale or other disposition of the Leases and
the right to receive and apply the Rents to the payment of the
Debt;
(i) CONDEMNATION AWARDS. All awards or payments,
including interest thereon, which may heretofore and hereafter
be made with respect to the Property, whether from the
exercise of the right of eminent domain (including but not
limited to any transfer made in lieu of or in anticipation of
the exercise of the right), or for a change of grade, or for
any other injury to or decrease in the value of the Property;
(j) INSURANCE PROCEEDS. All proceeds in respect of
the Property under any insurance policies covering the
Property, including, without limitation, the right to receive
and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property;
(k) TAX CERTIORARI. All refunds, rebates or credits
in connection with reduction in real estate taxes and
assessments charged against the Property as a result of tax
certiorari or any applications or proceedings for reduction;
(l) CONVERSION. All proceeds of the conversion,
voluntary or involuntary, of any of the foregoing including,
without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims;
(m) RIGHTS. The right, in the name and on behalf of
Borrower, to appear in and defend any action or proceeding
brought with respect to the Property and to commence any
action or proceeding to protect the interest of Lender in the
Property;
(n) AGREEMENTS. All agreements, contracts,
certificates, instruments, franchises, permits, licenses,
plans, specifications and other documents, now or hereafter
entered into, and all rights therein and thereto, respecting
or pertaining to the use, occupation, construction, management
or operation of the Land and any part thereof and any
Improvements or respecting any business or activity conducted
on the Land and any part thereof and all right, title and
interest of Borrower therein and thereunder, including,
without limitation, the right, upon the happening of any
default hereunder, to receive and collect any sums payable to
Borrower thereunder;
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<PAGE> 6
(o) TRADEMARKS. All tradenames, trademarks,
servicemarks, logos, copyrights, goodwill, books and records
and all other general intangibles relating to or used in
connection with the operation of the Property;
(p) OTHER RIGHTS. Any and all other rights of
Borrower in and to the items set forth in Subsections (a)
through (o) above.
AND without limiting any of the other provisions of this
Mortgage, to the extent permitted by applicable law, Borrower expressly grants
to Lender, as secured party, a security interest in the portion of the Property
which is or may be subject to the provisions of the Uniform Commercial Code
which are applicable to secured transactions; it being understood and agreed
that the Improvements and Fixtures are part and parcel of the Land (the Land,
the Improvements and the Fixtures collectively referred to as the "REAL
PROPERTY") appropriated to the use thereof and, whether affixed or annexed to
the Real Property or not, shall for the purposes of this Mortgage be deemed
conclusively to be real estate and mortgaged hereby.
Section 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely
and unconditionally assigns to Lender all of Borrower's right, title and
interest in and to all current and future Leases and Rents; it being intended by
Borrower that this assignment constitutes a present, absolute assignment and not
an assignment for additional security only. Nevertheless, subject to the terms
of the Assignment of Leases and Section 7.1(h) of this Mortgage, Lender grants
to Borrower a revocable license to collect, receive, use and enjoy the Rents.
Borrower shall hold the Rents, or a portion thereof sufficient to discharge all
current sums due on the Debt, for use in the payment of such sums.
Section 1.3 SECURITY AGREEMENT. This Mortgage is both a real
property mortgage and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Mortgage, Borrower
hereby grants to Lender, as security for the Obligations (hereinafter defined),
a security interest in the Fixtures, the Equipment and the Personal Property to
the full extent that the Fixtures, the Equipment and the Personal Property may
be subject to the Uniform Commercial Code (said portion of the Property so
subject to the Uniform Commercial Code being called the "Collateral"). If an
Event of Default shall occur and be continuing, Lender, in addition to any other
rights and remedies which it may have, shall have and may exercise immediately
and without demand, any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Collateral or
any part thereof, and to take such other measures as Lender may deem necessary
for the care, protection and preservation of the Collateral. Upon request or
demand of Lender after the occurrence and during the continuance of an Event of
Default, Borrower shall, at its expense, assemble the Collateral and make it
available to Lender at a convenient place (at the Land if tangible property)
reasonably acceptable to Lender. Borrower shall pay to Lender on demand any and
all expenses, including reasonable legal expenses and attorneys' fees, incurred
-5-
<PAGE> 7
or paid by Lender in protecting its interest in the Collateral and in enforcing
its rights hereunder with respect to the Collateral after the occurrence and
during the continuance of an Event of Default. Any notice of sale, disposition
or other intended action by Lender with respect to the Collateral sent to
Borrower in accordance with the provisions hereof at least ten (10) business
days prior to such action, shall, except as otherwise provided by applicable
law, constitute reasonable notice to Borrower. The proceeds of any disposition
of the Collateral, or any part thereof, may, except as otherwise required by
applicable law, be applied by Lender to the payment of the Debt in such priority
and proportions as Lender in its discretion shall deem proper. Borrower's
(Debtor's) principal place of business is as set forth on page one hereof and
the address of Lender (Secured Party) is as set forth on page one hereof.
Section 1.4 FIXTURE FILING. Certain of the Property is or will
become "fixtures" (as that term is defined in the Uniform Commercial Code) on
the Land, described or referred to in this Mortgage, and this Mortgage, upon
being filed for record in the real estate records of the city or county wherein
such fixtures are situated, shall operate also as a financing statement filed as
a fixture filing in accordance with the applicable provisions of said Uniform
Commercial Code upon such of the Property that is or may become fixtures.
Section 1.5 PLEDGES OF MONIES HELD. Borrower hereby pledges to
Lender any and all monies now or hereafter held by Lender or on behalf of
Lender, including, without limitation, any sums deposited in the Lockbox
Account, the Reserve Funds and Net Proceeds, as additional security for the
Obligations until expended or applied as provided in this Mortgage.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property
unto and to the use and benefit of Lender and its successors and assigns,
forever;
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Borrower shall well and truly pay to Lender the Debt at the
time and in the manner provided in the Note, the Loan Agreement and this
Mortgage, shall well and truly perform the Other Obligations as set forth in
this Mortgage and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, the Loan Agreement and
the other Loan Documents, these presents and the estate hereby granted shall
cease, terminate and be void; provided, however, that Borrower's obligation to
indemnify and hold harmless Lender pursuant to the provisions hereof shall
survive any such payment or release.
Article 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 DEBT. This Mortgage and the grants, assignments
and transfers made in Article 1 are given for the purpose of securing the Debt.
-6-
<PAGE> 8
Section 2.2 OTHER OBLIGATIONS. This Mortgage and the grants,
assignments and transfers made in Article 1 are also given for the purpose of
securing the following (the "OTHER OBLIGATIONS"):
(a) the performance of all other obligations of
Borrower contained herein;
(b) the performance of each obligation of Borrower
contained in the Loan Agreement and any other Loan Document;
and
(c) the performance of each obligation of Borrower
contained in any renewal, extension, amendment, modification,
consolidation, change of, or substitution or replacement for,
all or any part of the Note, the Loan Agreement or any other
Loan Document.
Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations
for the payment of the Debt and the performance of the Other Obligations shall
be referred to collectively herein as the "OBLIGATIONS."
Article 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the
time and in the manner provided in the Loan Agreement, the Note and this
Mortgage.
Section 3.2 INCORPORATION BY REFERENCE. All the covenants,
conditions and agreements contained in (a) the Loan Agreement, (b) the Note and
(c) all and any of the other Loan Documents, are hereby made a part of this
Mortgage to the same extent and with the same force as if fully set forth
herein.
Section 3.3 INSURANCE. Borrower shall obtain and maintain, or
cause to be maintained, in full force and effect at all times insurance with
respect to Borrower and the Property as required pursuant to the Loan Agreement.
Section 3.4 MAINTENANCE OF PROPERTY. Borrower shall cause the
Property to be maintained in a good and safe condition and repair. The
Improvements, the Fixtures, the Equipment and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of the
Fixtures, the Equipment or the Personal Property, tenant finish and
refurbishment of the Improvements) without the consent of Lender. Borrower shall
promptly repair, replace or rebuild any part of the Property which may be
destroyed by any casualty, or become damaged, worn or dilapidated and shall
complete and pay for any structure at any time in the process of construction or
repair on the Land.
Section 3.5 WASTE. Borrower shall not commit or suffer any
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take
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<PAGE> 9
any action that might invalidate or allow the cancellation of any Policy, or do
or permit to be done thereon anything that may in any way materially impair the
value of the Property or the security of this Mortgage. Borrower will not,
without the prior written consent of Lender, permit any drilling or exploration
for or extraction, removal, or production of any minerals from the surface or
the subsurface of the Land, regardless of the depth thereof or the method of
mining or extraction thereof.
Section 3.6 PAYMENT FOR LABOR AND MATERIALS. (a) Borrower will
promptly pay when due all bills and costs for labor, materials, and specifically
fabricated materials ("LABOR AND MATERIAL COSTS") incurred in connection with
the Property and never permit to exist beyond the due date thereof in respect of
the Property or any part thereof any lien or security interest, even though
inferior to the liens and the security interests hereof, and in any event never
permit to be created or exist in respect of the Property or any part thereof any
other or additional lien or security interest other than the liens or security
interests hereof except for the Permitted Encumbrances.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any of the Labor and Material Costs, provided
that (i) no Event of Default has occurred and is continuing under the Loan
Agreement, the Note, this Mortgage or any of the other Loan Documents, (ii)
Borrower is permitted to do so under the provisions of any other mortgage, deed
of trust or deed to secure debt affecting the Property, (iii) such proceeding
shall suspend the collection of the Labor and Material Costs from Borrower and
from the Property or Borrower shall have paid all of the Labor and Material
Costs under protest, (iv) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
Borrower is subject and shall not constitute a default thereunder, (v) neither
the Property nor any part thereof or interest therein will be in danger of being
sold, forfeited, terminated, canceled or lost, and (vi) Borrower shall have
furnished the security as may be required in the proceeding, or as may be
reasonably requested by Lender to insure the payment of any contested Labor and
Material Costs, together with all interest and penalties thereon.
Section 3.7 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall
observe and perform each and every term, covenant and provision to be observed
or performed by Borrower pursuant to the Loan Agreement, any other Loan Document
and any other agreement or recorded instrument affecting or pertaining to the
Property and any amendments, modifications or changes thereto.
Section 3.8 CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower
shall not change Borrower's name, identity (including its trade name or names)
or, if not an individual, Borrower's corporate, partnership or other structure
without notifying Lender of such change in writing at least thirty (30) days
prior to the effective date of such change and, in the case of a change in
Borrower's structure, without first obtaining the prior written consent of
Lender,. Borrower shall execute and deliver to Lender, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change required by
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Lender to establish or maintain the validity, perfection and priority of the
security interest granted herein. At the request of Lender, Borrower shall
execute a certificate in form satisfactory to Lender listing the trade names
under which Borrower intends to operate the Property, and representing and
warranting that Borrower does business under no other trade name with respect to
the Property.
Article 4 - OBLIGATIONS AND RELIANCES
Section 4.1 RELATIONSHIP OF BORROWER AND LENDER. The
relationship between Borrower and Lender is solely that of debtor and creditor,
and Lender has no fiduciary or other special relationship with Borrower, and no
term or condition of any of the Loan Agreement, the Note, this Mortgage and the
other Loan Documents shall be construed so as to deem the relationship between
Borrower and Lender to be other than that of debtor and creditor.
Section 4.2 NO RELIANCE ON LENDER. The general partners,
members, principals and (if Borrower is a trust) beneficial owners of Borrower
are experienced in the ownership and operation of properties similar to the
Property, and Borrower and Lender are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property.
Section 4.3 NO LENDER OBLIGATIONS. (a) Notwithstanding the
provisions of SUBSECTIONS 1.1(H) AND (N) or SECTION 1.2, Lender is not
undertaking the performance of (i) any obligations under the Leases; or (ii) any
obligations with respect to such agreements, contracts, certificates,
instruments, franchises, permits, trademarks, licenses and other documents.
(b) By accepting or approving anything required to be
observed, performed or fulfilled or to be given to Lender pursuant to this
Mortgage, the Loan Agreement, the Note or the other Loan Documents, including,
without limitation, any officer's certificate, balance sheet, statement of
profit and loss or other financial statement, survey, appraisal, or insurance
policy, Lender shall not be deemed to have warranted, consented to, or affirmed
the sufficiency, the legality or effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.
Section 4.4 RELIANCE. Borrower recognizes and acknowledges
that in accepting the Loan Agreement, the Note, this Mortgage and the other Loan
Documents, Lender is expressly and primarily relying on the truth and accuracy
of the warranties and representations set forth in Section 4.1 of the Loan
Agreement without any obligation to investigate the Property and notwithstanding
any investigation of the Property by Lender; that such reliance existed on the
part of Lender prior to the date hereof, that the warranties and representations
are a material inducement to Lender in making the Loan; and that Lender would
not be willing to make the Loan and accept this Mortgage in the absence of the
warranties and representations as set forth in Section 4.1 of the Loan
Agreement.
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Article 5 - FURTHER ASSURANCES
Section 5.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower
forthwith upon the execution and delivery of this Mortgage and thereafter, from
time to time, will cause this Mortgage and any of the other Loan Documents
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect and perfect the
lien or security interest hereof upon, and the interest of Lender in, the
Property. Borrower will pay all taxes, filing, registration or recording fees,
and all expenses incident to the preparation, execution, acknowledgment and/or
recording of the Note, this Mortgage, the other Loan Documents, any note, deed
of trust or mortgage supplemental hereto, any security instrument with respect
to the Property and any instrument of further assurance, and any modification or
amendment of the foregoing documents, and all federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Mortgage, any deed of trust
or mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.
Section 5.2 FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, deeds of trust, mortgages,
assignments, notices of assignments, transfers and assurances as Lender shall,
from time to time, reasonably require, for the better assuring, conveying,
assigning, transferring, and confirming unto Lender the property and rights
hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed,
pledged, assigned, warranted and transferred or intended now or hereafter so to
be, or which Borrower may be or may hereafter become bound to convey or assign
to Lender, or for carrying out the intention or facilitating the performance of
the terms of this Mortgage or for filing, registering or recording this
Mortgage, or for complying with all Legal Requirements. Borrower, on demand,
will execute and deliver, and in the event it shall fail to so execute and
deliver, hereby authorizes Lender to execute in the name of Borrower or without
the signature of Borrower to the extent Lender may lawfully do so, one or more
financing statements to evidence more effectively the security interest of
Lender in the Property. Borrower grants to Lender an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
any and all rights and remedies available to Lender at law and in equity,
including without limitation such rights and remedies available to Lender
pursuant to this SECTION 5.2. Nothing contained in this SECTION 5.2 shall be
deemed to create an obligation on the part of Borrower to pay any costs and
expenses incurred by Lender in connection with the Securitization or other sale
or transfer of the Loan.
Section 5.3 CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP
LAWS. (a) If any law is enacted or adopted or amended after the date of this
Mortgage which deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Lender's interest in the Property, Borrower
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will pay the tax, with interest and penalties thereon, if any. If Lender is
advised by counsel chosen by it that the payment of tax by Borrower would be
unlawful or taxable to Lender or unenforceable or provide the basis for a
defense of usury then Lender shall have the option by written notice of not less
than one hundred twenty (120) days to declare the Debt immediately due and
payable.
(b) Borrower 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 Property, or any part thereof, and no deduction
shall otherwise be made or claimed from the assessed value of the Property, or
any part thereof, for real estate tax purposes by reason of this Mortgage or the
Debt. If such claim, credit or deduction shall be required by law, Lender shall
have the option, by written notice of not less than one hundred twenty (120)
days, to declare the Debt immediately due and payable.
(c) 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, this Mortgage, or any of the other Loan
Documents or impose any other tax or charge on the same, Borrower will pay for
the same, with interest and penalties thereon, if any.
Section 5.4 SPLITTING OF MORTGAGE. This Mortgage and the Note
shall, at any time until the same shall be fully paid and satisfied, at the sole
election of Lender, be split or divided into two or more notes and two or more
security instruments, each of which shall cover all or a portion of the Property
to be more particularly described therein. To that end, Borrower, upon written
request of Lender, shall execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered by the then owner of the Property, to
Lender and/or its designee or designees substitute notes and security
instruments in such principal amounts, aggregating not more than the then unpaid
principal amount of this Mortgage, and containing terms, provisions and clauses
similar to those contained herein and in the Note, and such other documents and
instruments as may be required by Lender.
Section 5.5 REPLACEMENT DOCUMENTS. Upon receipt of an
affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of the Note or any other Loan Document which is not of public record,
and, in the case of any such mutilation, upon surrender and cancellation of such
Note or other Loan Document, Borrower will issue, in lieu thereof, a replacement
Note or other Loan Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Loan Document in the same principal amount thereof and
otherwise of like tenor.
Article 6 - DUE ON SALE/ENCUMBRANCE
Section 6.1 LENDER RELIANCE. Borrower acknowledges that Lender
has examined and relied on the experience of Borrower and its general partners,
members, principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Property in agreeing to make the Loan, and will
continue to rely on Borrower's ownership of the Property as a means of
maintaining the value of the Property as security for
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repayment of the Debt and the performance of the Other Obligations. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the
Property so as to ensure that, should Borrower default in the repayment of the
Debt or the performance of the Other Obligations, Lender can recover the Debt by
a sale of the Property.
Section 6.2 NO SALE/ENCUMBRANCE. Borrower agrees that Borrower
shall not, without the prior written consent of Lender, sell, convey, mortgage,
grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or
any part thereof or permit the Property or any part thereof to be sold,
conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred, unless Lender shall consent thereto in accordance with
SECTION 6.4 hereof.
Section 6.3 SALE/ENCUMBRANCE DEFINED. A sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within
the meaning of this Article 6 shall be deemed to include, but not be limited to,
(a) an installment sales agreement wherein Borrower agrees to sell the Property
or any part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Leases or any Rents; (c) the voluntary or involuntary sale,
conveyance, transfer or pledge of the stock of the general partner of Borrower
(or the stock of any corporation directly or indirectly controlling such general
partner by operation of law or otherwise) or the creation or issuance of new
stock by which an aggregate of more than ten percent (10%) of such general
partner's stock shall be vested in a party or parties who are not now
stockholders; (d) the voluntary or involuntary sale, conveyance, transfer or
pledge of any general or limited partnership interest in Borrower; (e) if
Borrower, any general partner of Borrower, any guarantor or any indemnitor is a
limited liability company, the change, removal or resignation of a member or
managing member or the transfer or pledge of the interest of any member or
managing member or any profits or proceeds relating to such interest; or (f) any
other transfer prohibited by the terms of the Loan Agreement.
Section 6.4 LENDER'S RIGHTS. Lender reserves the right to
condition the consent required hereunder upon (a) a modification of the terms
hereof and of the Loan Agreement, the Note or the other Loan Documents; (b) an
assumption of the Loan Agreement, the Note, this Mortgage and the other Loan
Documents as so modified by the proposed transferee, subject to the provisions
of Section 9.4 of the Loan Agreement; (c) payment of all of Lender's reasonable
expenses incurred in connection with such transfer; (d) the confirmation in
writing by the applicable Rating Agencies that the proposed transfer will not,
in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned in connection with any
Securitization; (e) the delivery of a nonconsolidation opinion reflecting the
proposed transfer satisfactory in form and substance to Lender; (f) the proposed
transferee's continued compliance with the representations and covenants set
forth in Section 4.1.30 and 5.2.12 of the Loan Agreement; (g) the delivery of
evidence satisfactory to Lender that the single purpose nature and bankruptcy
remoteness of Borrower, its shareholders, partners or members, as the case may
be, following such transfers
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<PAGE> 14
are in accordance with the standards of the Rating Agencies, or (h) such other
conditions as Lender shall determine in its reasonable discretion to be in the
interest of Lender, including, without limitation, the creditworthiness,
reputation and qualifications of the transferee with respect to the Loan and the
Property. Lender shall not be required to demonstrate any actual impairment of
its security or any increased risk of default hereunder in order to declare the
Debt immediately due and payable upon Borrower's sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, or transfer of the Property
without Lender's consent. This provision shall apply to every sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property regardless of whether voluntary or not, or whether or not Lender has
consented to any previous sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property.
Article 7 - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1 REMEDIES. Upon the occurrence and during the
continuance of any Event of Default, Borrower agrees that Lender may take such
action, without notice or demand, as it deems advisable to protect and enforce
its rights against Borrower and in and to the Property, including, but not
limited to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Lender may determine, in its sole
discretion, without impairing or otherwise affecting the other rights and
remedies of Lender:
(a) declare the entire unpaid Debt to be immediately due and
payable;
(b) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Mortgage under any applicable provision of
law, in which case the Property or any interest therein may be sold for
cash or upon credit in one or more parcels or in several interests or
portions and in any order or manner;
(c) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of this Mortgage for the
portion of the Debt then due and payable, subject to the continuing
lien and security interest of this Mortgage for the balance of the Debt
not then due, unimpaired and without loss of priority;
(d) sell for cash or upon credit the Property or any part
thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to power of
sale or otherwise, at one or more sales, as an entity or in parcels, at
such time and place, upon such terms and after such notice thereof as
may be required or permitted by law;
(e) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein, in the Note, the Loan Agreement or in the other Loan Documents;
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(f) recover judgment on the Note either before, during or
after any proceedings for the enforcement of this Mortgage or the other
Loan Documents;
(g) apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property, without notice and without
regard for the adequacy of the security for the Debt and without regard
for the solvency of Borrower, any guarantor, indemnitor with respect to
the Loan or of any Person, liable for the payment of the Debt;
(h) the license granted to Borrower under SECTION 1.2 hereof
shall automatically be revoked and Lender may enter into or upon the
Property, either personally or by its agents, nominees or attorneys and
dispossess Borrower and its agents and servants therefrom, without
liability for trespass, damages or otherwise and exclude Borrower and
its agents or servants wholly therefrom, and take possession of all
books, records and accounts relating thereto and Borrower agrees to
surrender possession of the Property and of such books, records and
accounts to Lender upon demand, and thereupon Lender may (i) use,
operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the
business thereat; (ii) complete any construction on the Property in
such manner and form as Lender deems advisable; (iii) make alterations,
additions, renewals, replacements and improvements to or on the
Property; (iv) exercise all rights and powers of Borrower with respect
to the Property, whether in the name of Borrower or otherwise,
including, without limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand, sue for, collect
and receive all Rents of the Property and every part thereof; (v)
require Borrower to pay monthly in advance to Lender, or any receiver
appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of such part of the Property as may be
occupied by Borrower; (vi) require Borrower to vacate and surrender
possession of the Property to Lender or to such receiver and, in
default thereof, Borrower may be evicted by summary proceedings or
otherwise; and (vii) apply the receipts from the Property to the
payment of the Debt, in such order, priority and proportions as Lender
shall deem appropriate in its sole discretion after deducting therefrom
all expenses (including reasonable attorneys' fees) incurred in
connection with the aforesaid operations and all amounts necessary to
pay the Taxes, Other Charges, insurance and other expenses in
connection with the Property, as well as just and reasonable
compensation for the services of Lender, its counsel, agents and
employees;
(i) exercise any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing: (i) the
right to take possession of the Fixtures, the Equipment, the Personal
Property or any part thereof, and to take such other measures as Lender
may deem necessary for the care, protection and preservation of the
Fixtures, the Equipment, the Personal Property, and (ii) request
Borrower at its expense to assemble the Fixtures, the Equipment, the
Personal Property and make it available to Lender at a convenient place
acceptable to Lender. Any notice of sale, disposition or other
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intended action by Lender with respect to the Fixtures, the Equipment,
the Personal Property sent to Borrower in accordance with the
provisions hereof at least five (5) days prior to such action, shall
constitute commercially reasonable notice to Borrower;
(j) apply any sums then deposited or held in escrow or
otherwise by or on behalf of Lender in accordance with the terms of the
Loan Agreement, this Mortgage or any other Loan Document to the payment
of the following items in any order in its uncontrolled discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal balance of
the Note;
(iv) Amortization of the unpaid principal balance
of the Note;
(v) All other sums payable pursuant to the Note,
the Loan Agreement, this Mortgage and the
other Loan Documents, including without
limitation advances made by Lender pursuant
to the terms of this Mortgage;
(k) pursue such other remedies as Lender may have under
applicable law; or
(1) apply the undisbursed balance of any Net Proceeds
Deficiency deposit, together with interest thereon, to the payment of
the Debt in such order, priority and proportions as Lender shall deem
to be appropriate in its discretion.
In the event of a sale, by foreclosure, power of sale or otherwise, of less than
all of Property, this Mortgage shall continue as a lien and security interest on
the remaining portion of the Property unimpaired and without loss of priority.
Section 7.2 APPLICATION OF PROCEEDS. The purchase money,
proceeds and avails of any disposition of the Property, and or any part thereof,
or any other sums collected by Lender pursuant to the Note, this Mortgage or the
other Loan Documents, may be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall deem proper, to
the extent consistent with law.
Section 7.3 RIGHT TO CURE DEFAULTS. Upon the occurrence and
during the continuance of any Event of Default, Lender may, but without any
obligation to do so and without notice to or demand on Borrower, and without
releasing Borrower from any obligation hereunder, make or do the same in such
manner and to such extent as Lender may deem necessary to protect the security
hereof. Lender is authorized to enter upon action or proceeding to the Property
for such purposes, or appear in, defend, or bring any action or proceeding to
protect its interest in the Property or to foreclose this Mortgage or collect
the Debt, and the cost and expense thereof (including reasonable attorneys' fees
to the extent
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permitted by law), with interest as provided in this SECTION 7.3, shall
constitute a portion of the Debt and shall be due and payable to Lender upon
demand. All such costs and expenses incurred by Lender in remedying such Event
of Default or such failed payment or act or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default Rate,
for the period after notice from Lender that such cost or expense was incurred
to the date of payment to Lender. All such costs and expenses incurred by Lender
together with interest thereon calculated at the Default Rate shall be deemed to
constitute a portion of the Debt and be secured by this Mortgage and the other
Loan Documents and shall be immediately due and payable upon demand by Lender
therefor.
Section 7.4 ACTIONS AND PROCEEDINGS. Lender has the right to
appear in and defend any action or proceeding brought with respect to the
Property and to bring any action or proceeding, in the name and on behalf of
Borrower, which Lender, in its discretion, decides should be brought to protect
its interest in the Property.
Section 7.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall
have the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.
Section 7.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable
times and upon reasonable notice, Lender, its agents, accountants and attorneys
shall have the right to examine the records, books, management and other papers
of Borrower which reflect upon their financial condition, at the Property or at
any office regularly maintained by Borrower where the books and records are
located. Lender and its agents shall have the right to make copies and extracts
from the foregoing records and other papers. In addition, at reasonable times
and upon reasonable notice, Lender, its agents, accountants and attorneys shall
have the right to examine and audit the books and records of Borrower pertaining
to the income, expenses and operation of the Property during reasonable business
hours at any office of Borrower where the books and records are located. This
SECTION 7.6 shall apply throughout the term of the Note and without regard to
whether an Event of Default has occurred or is continuing.
Section 7.7 OTHER RIGHTS, ETC. (a) The failure of Lender to
insist upon strict performance of any term hereof shall not be deemed to be a
waiver of any term of this Mortgage. Borrower shall not be relieved of
Borrower's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower or any guarantor or indemnitor with respect
to the Loan to take any action to foreclose this Mortgage or otherwise enforce
any of the provisions hereof or of the Note or the other Loan Documents, (ii)
the release, regardless of consideration, of the whole or any part of the
Property, or of any person liable for the Debt or any portion thereof, or (iii)
any agreement or stipulation by Lender extending the time of payment or
otherwise modifying or supplementing the terms of the Note, this Mortgage or the
other Loan Documents.
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<PAGE> 18
(b) It is agreed that the risk of loss or damage to the
Property is on Borrower, and Lender shall have no liability whatsoever for
decline in value of the Property, for failure to maintain the Policies, or for
failure to determine whether insurance in force is adequate as to the amount of
risks insured. Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its discretion,
may elect. Lender may take action to recover the Debt, or any portion thereof,
or to enforce any covenant hereof without prejudice to the right of Lender
thereafter to foreclose this Mortgage. The rights of Lender under this Mortgage
shall be separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Lender shall be construed as an election to
proceed under any one provision herein to the exclusion of any other provision.
Lender shall not be limited exclusively to the rights and remedies herein stated
but shall be entitled to every right and remedy now or hereafter afforded at law
or in equity.
Section 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.
Lender may release any portion of the Property for such consideration as Lender
may require without, as to the remainder of the Property, in any way impairing
or affecting the lien or priority of this Mortgage, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Mortgage shall continue as a lien and security interest in the remaining portion
of the Property.
Section 7.9 VIOLATION OF LAWS. If the Property is not in
material compliance with Legal Requirements, Lender may impose additional
requirements upon Borrower in connection herewith including, without limitation,
monetary reserves or financial equivalents.
Section 7.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding
any other provision of this Mortgage or the Loan Agreement, including, without
limitation, Section 9.4 of the Loan Agreement, Lender and other Indemnified
Parties (as hereinafter defined) are entitled to enforce the obligations of
Borrower, any guarantor and indemnitor contained in Sections 9.2, 9.3 and 9.4
herein and Section 9.2 of the Loan Agreement without first resorting to or
exhausting any security or collateral and without first having recourse to the
Note or any of the Property, through foreclosure or acceptance of a deed in lieu
of foreclosure or otherwise, and in the event Lender commences a foreclosure
action against the Property, Lender is entitled to pursue a deficiency judgment
with respect to such obligations against Borrower and any guarantor or
indemnitor with respect to the Loan. The provisions of Sections 9.2, 9.3 and 9.4
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herein and Section 9.2 of the Loan Agreement are exceptions to any non-recourse
or exculpation provisions in the Loan Agreement, the Note, this Mortgage or the
other Loan Documents, and Borrower and any guarantor or indemnitor with respect
to the Loan are fully and personally liable for the obligations pursuant to
Sections 9.2, 9.3 and 9.4 herein and Section 9.2 of the Loan Agreement. The
liability of Borrower and any guarantor or indemnitor with respect to the Loan
pursuant to Sections 9.2, 9.3 and 9.4 herein and Section 9.2 of the Loan
Agreement is not limited to the original principal amount of the Note.
Notwithstanding the foregoing, nothing herein shall inhibit or prevent Lender
from foreclosing or exercising any other rights and remedies pursuant to the
Loan Agreement, the Note, this Mortgage and the other Loan Documents, whether
simultaneously with foreclosure proceedings or in any other sequence. A separate
action or actions may be brought and prosecuted against Borrower pursuant to
Sections 9.2, 9.3 and 9.4 herein and Section 9.2 of the Loan Agreement, whether
or not action is brought against any other Person or whether or not any other
Person is joined in the action or actions. In addition, Lender shall have the
right but not the obligation to join and participate in, as a party if it so
elects, any administrative or judicial proceedings or actions initiated in
connection with any matter addressed in Article 8 or Section 9.4 herein.
Section 7.11 RIGHT OF ENTRY. Upon reasonable notice to
Borrower, Lender and its agents shall have the right to enter and inspect the
Property at all reasonable times.
Article 8 - ENVIRONMENTAL HAZARDS
Section 8.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Based upon an environmental assessment of the Property and information that
Borrower knows after due inquiry of the Manager, and except as otherwise
disclosed by that certain Environmental Site Assessment of the Property
delivered to Lender (such report is referred to below as the "ENVIRONMENTAL
REPORT"), (a) there are no Hazardous Substances (defined below) or underground
storage tanks in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws (defined below) and with permits issued
pursuant thereto and (ii) fully disclosed to Lender in writing pursuant the
Environmental Report; (b) there are no past, present or threatened Releases
(defined below) of Hazardous Substances in, on, under or from the Property which
has not been fully remediated in accordance with Environmental Law; (c) there is
no threat of any Release of Hazardous Substances migrating to the Property; (d)
there is no past or present non-compliance with Environmental Laws, or with
permits issued pursuant thereto, in connection with the Property which has not
been fully remediated in accordance with Environmental Law; (e) Borrower does
not know of, and has not received, any written or oral notice or other
communication from any Person (including but not limited to a governmental
entity) relating to Hazardous Substances or Remediation (defined below) thereof,
of possible liability of any Person pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with any of the
foregoing; and (f) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to conditions in, on, under or from
the Property that is known to Borrower and that is contained in Borrower's files
and records, including but not limited to any reports relating to Hazardous
Substances in, on, under or from the Property and/or to the environmental
condition of the Property.
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"ENVIRONMENTAL LAW" means any present and future federal,
state and local laws, statutes, ordinances, rules, regulations and the like, as
well as common law, relating to protection of human health or the environment,
relating to Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or relating to
liability for or costs of other actual or threatened danger to human health or
the environment. Environmental Law includes, but is not limited to, the
following statutes, as amended, any successor thereto, and any regulations
promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Substances Transportation Act;
the Resource Conservation and Recovery Act (including but not limited to
Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the
Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal
Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy Act; and the
River and Harbors Appropriation Act. Environmental Law also includes, but is not
limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning
transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of the Property; requiring
notification or disclosure of Releases of Hazardous Substances or other
environmental condition of the Property to any governmental authority or other
Person, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Property; and relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Property.
"HAZARDOUS SUBSTANCES" include but are not limited to any and
all substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may have a
negative impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives, but excluding substances of kinds and in amounts ordinarily and
customarily used or stored in similar properties for the purpose of cleaning or
other maintenance or operations and otherwise in compliance with all
Environmental Laws.
"RELEASE" of any Hazardous Substance includes but is not
limited to any release, deposit, discharge, emission, leaking, spilling,
seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping,
disposing or other movement of Hazardous Substances.
"REMEDIATION" includes but is not limited to any response,
remedial, removal, or corrective action, any activity to cleanup, detoxify,
decontaminate, contain or otherwise
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remediate any Hazardous Substance, any actions to prevent, cure or mitigate any
Release of any Hazardous Substance, any action to comply with any Environmental
Laws or with any permits issued pursuant thereto, any inspection, investigation,
study, monitoring, assessment, audit, sampling and testing, laboratory or other
analysis, or evaluation relating to any Hazardous Substances or to anything
referred to in Article 8.
Section 8.2 ENVIRONMENTAL COVENANTS. Borrower covenants and
agrees that: (a) all uses and operations on or of the Property, whether by
Borrower or any other Person, shall be in compliance with all Environmental Laws
and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous
Substances in, on, under or from the Property; (c) there shall be no Hazardous
Substances in, on, or under the Property, except those that are both (i) in
compliance with all Environmental Laws and with permits issued pursuant thereto
and (ii) fully disclosed to Lender in writing; (d) Borrower shall keep the
Property free and clear of all liens and other encumbrances imposed pursuant to
any Environmental Law, whether due to any act or omission of Borrower or any
other Person (the "ENVIRONMENTAL LIENS"); (e) Borrower shall, at its sole cost
and expense, fully and expeditiously cooperate in all activities pursuant to
SECTION 8.3 below, including but not limited to providing all relevant
information and making knowledgeable persons available for interviews; (f)
Borrower shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
the Property, pursuant to any reasonable written request of Lender made in the
event that Lender has reason to believe that an environmental hazard exists on
the Property (including but not limited to sampling, testing and analysis of
soil, water, air, building materials and other materials and substances whether
solid, liquid or gas), and share with Lender the reports and other results
thereof, and Lender and other Indemnified Parties shall be entitled to rely on
such reports and other results thereof; (g) Borrower shall, at its sole cost and
expense, comply with all reasonable written requests of Lender to made in the
event that Lender has reason to believe that an environmental hazard exists on
the Property (i) reasonably effectuate Remediation of any condition (including
but not limited to a Release of a Hazardous Substance) in, on, under or from the
Property; (ii) comply with any Environmental Law; (iii) comply with any
directive from any governmental authority; and (iv) take any other reasonable
action necessary or appropriate for protection of human health or the
environment; (h) Borrower shall not do or allow any tenant or other user of the
Property to do any act that materially increases the dangers to human health or
the environment, poses an unreasonable risk of harm to any Person (whether on or
off the Property), impairs or may impair the value of the Property, is contrary
to any requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; and (i) Borrower shall immediately notify Lender in
writing of (A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Property; (B) any
non-compliance with any Environmental Laws related in any way to the Property;
(C) any actual or potential Environmental Lien; (D) any required or proposed
Remediation of environmental conditions relating to the Property; and (E) any
written or oral notice or other communication of which Borrower becomes aware
from any source whatsoever (including but not limited to a governmental entity)
relating in any way to Hazardous Substances or Remediation thereof, possible
liability of any Person pursuant to any
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Environmental Law, other environmental conditions in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Article 8.
Section 8.3 LENDER'S RIGHTS. In the event that Lender has
reason to believe that an environmental hazard exists on the Property, upon
reasonable notice from Lender, Borrower shall, at Borrower's expense, promptly
cause an engineer or consultant satisfactory to Lender to conduct any
environmental assessment or audit (the scope of which shall be determined in
Lender's sole and absolute discretion) and take any samples of soil, groundwater
or other water, air, or building materials or any other invasive testing
requested by Lender and promptly deliver the results of any such assessment,
audit, sampling or other testing; provided, however, if such results are not
delivered to Lender within a reasonable period, upon reasonable notice to
Borrower, Lender and any other Person designated by Lender, including but not
limited to any receiver, any representative of a governmental entity, and any
environmental consultant, shall have the right, but not the obligation, to enter
upon the Property at all reasonable times to assess any and all aspects of the
environmental condition of the Property and its use, including but not limited
to conducting any environmental assessment or audit (the scope of which shall be
determined in Lender's sole and absolute discretion) and taking samples of soil,
groundwater or other water, air, or building materials, and reasonably
conducting other invasive testing. Borrower shall cooperate with and provide
access to Lender and any such Person designated by Lender.
Article 9 - INDEMNIFICATION
Section 9.1 GENERAL INDEMNIFICATION. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, punitive damages, foreseeable and unforeseeable consequential
damages, of whatever kind or nature (including but not limited to reasonable
attorneys' fees and other costs of defense) (collectively, the "LOSSES") imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following: (a) ownership of this Mortgage, the Property or any interest therein
or receipt of any Rents; (b) any amendment to, or restructuring of, the Debt,
and the Note, the Loan Agreement, this Mortgage, or any other Loan Documents;
(c) any and all lawful action that may be taken by Lender in connection with the
enforcement of the provisions of this Mortgage or the Loan Agreement or the Note
or any of the other Loan Documents, whether or not suit is filed in connection
with same, or in connection with Borrower, any guarantor or indemnitor and/or
any partner, joint venturer or shareholder thereof becoming a party to a
voluntary or involuntary federal or state bankruptcy, insolvency or similar
proceeding; (d) any accident, injury to or death of persons or loss of or damage
to property occurring in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (e) any use, nonuse or condition in, on or about the Property or any
part thereof or on the adjoining sidewalks, curbs, adjacent property or
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adjacent parking areas, streets or ways; (f) any failure on the part of Borrower
to perform or be in compliance with any of the terms of this Mortgage; (g)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof; (h) the failure of any
person to file timely with the Internal Revenue Service an accurate Form 1099-B,
Statement for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with this Mortgage,
or to supply a copy thereof in a timely fashion to the recipient of the proceeds
of the transaction in connection with which this Mortgage is made; (i) any
failure of the Property to be in compliance with any Legal Requirements; (j) the
enforcement by any Indemnified Party of the provisions of this Article 9; (k)
any and all claims and demands whatsoever which may be asserted against Lender
by reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants, or agreements contained in any Lease; (1)
the payment of any commission, charge or brokerage fee to anyone claiming
through Borrower which may be payable in connection with the funding of the
Loan; or (m) any misrepresentation made by Borrower in this Mortgage or any
other Loan Document. Notwithstanding the foregoing, Borrower shall not be liable
to the Indemnified Parties under this SECTION 9.1 for any Losses to which the
Indemnified Parties may become subject to the extent such Losses arise by reason
of the gross negligence, illegal acts, fraud or willful misconduct of the
Indemnified Parties. Any amounts payable to Lender by reason of the application
of this SECTION 9.1 shall become immediately due and payable and shall bear
interest at the Default Rate from the date loss or damage is sustained by Lender
until paid. For purposes of this Article 9, the term "INDEMNIFIED PARTIES" means
Lender and any Person who is or will have been involved in the origination of
the Loan, any Person who is or will have been involved in the servicing of the
Loan secured hereby, any Person in whose name the encumbrance created by this
Mortgage is or will have been recorded, persons and entities who may hold or
acquire or will have held a full or partial interest in the Loan secured hereby
(including, but not limited to, investors or prospective investors in the
Securities, as well as custodians, trustees and other fiduciaries who hold or
have held a full or partial interest in the Loan secured hereby for the benefit
of third parties) as well as the respective directors, officers, shareholders,
partners, employees, agents, servants, representatives, contractors,
subcontractors, affiliates, subsidiaries, participants, successors and assigns
of any and all of the foregoing (including but not limited to any other Person
who holds or acquires or will have held a participation or other full or partial
interest in the Loan, whether during the term of the Loan or as a part of or
following a foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of Lender's assets and business).
Section 9.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making and/or
recording of this Mortgage, the Note or any of the other Loan Documents, but
excluding any income, franchise or other similar taxes.
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Section 9.3 ERISA INDEMNIFICATION. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.1.9 or 5.2.12 of the Loan Agreement.
Section 9.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses and costs of
Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including but not
limited to sampling, testing, and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas)
imposed upon or incurred by or asserted against any Indemnified Parties, and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Property; (b) any past, present or threatened Release of Hazardous
Substances in, on, above, under or from the Property; (c) any activity by
Borrower, any Person affiliated with Borrower or any tenant or other user of the
Property in connection with any actual, proposed or threatened use, treatment,
storage, holding, existence, disposition or other Release, generation,
production, manufacturing, processing, refining, control, management, abatement,
removal, handling, transfer or transportation to or from the Property of any
Hazardous Substances at any tine located in, under, on or above the Property;
(d) any activity by Borrower, any Person affiliated with Borrower or any tenant
or other user of the Property in connection with any actual or proposed
Remediation of any Hazardous Substances at any time located in, under, on or
above the Property, whether or not such Remediation is voluntary or pursuant to
court or administrative order, including but not limited to any removal,
remedial or corrective action; (e) any past or present non-compliance or
violations of any Environmental Laws (or permits issued pursuant to any
Environmental Law) in connection with the Property or operations thereon,
including but not limited to any failure by Borrower, any Affiliate of Borrower
or any tenant or other user of the Property to comply with any order of any
Governmental Authority in connection with any Environmental Laws; (f) the
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 8 and this
SECTION 9.4; (h) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with the Property, including but
not limited to costs to investigate and assess such injury, destruction or loss;
(i) any acts of Borrower or other users of the Property in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Substances owned or possessed by such
Borrower or other users, at any facility or incineration vessel owned or
operated by another Person and containing such or any similar Hazardous
Substance; (j) any acts of Borrower or other users of the Property, in accepting
any Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites selected by Borrower or such other users,
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from which there is a Release, or a threatened Release of any Hazardous
Substance which causes the incurrence of costs for Remediation; (k) any personal
injury, wrongful death, or property damage arising under any statutory or common
law or tort law theory, including but not limited to damages assessed for the
maintenance of a private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Property; and (1) any
misrepresentation or inaccuracy in any representation or warranty or material
breach or failure to perform any covenants or other obligations pursuant to
Article 8. Notwithstanding the foregoing, Borrower shall not be liable under
this SECTION 9.4 for any Losses or costs of Remediation to which the Indemnified
Parties may become subject to the extent such Losses or costs of Remediation
arise by reason of the gross negligence, illegal acts, fraud of willful
misconduct of the Indemnified Parties. This indemnity shall survive any
termination, satisfaction or foreclosure of this Mortgage, subject to the
provisions of SECTION 10.5.
Section 9.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, if the defendants in any
such claim or proceeding include both Borrower and any Indemnified Party and
Borrower and such Indemnified Party shall have reasonably concluded that there
are any legal defenses available to it and/or other Indemnified Parties that are
different from or additional to those available to Borrower, such Indemnified
Party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Party, provided that no compromise or settlement shall be
entered without Borrower's consent, which consent shall not be unreasonably
withheld. Upon demand, Borrower shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.
Article 10 - WAIVERS
Section 10.1 WAIVER OF COUNTERCLAIM. To the extent permitted
by applicable law, Borrower hereby waives the right to assert a counterclaim,
other than a mandatory or compulsory counterclaim, in any action or proceeding
brought against it by Lender arising out of or in any way connected with this
Mortgage, the Loan Agreement, the Note, any of the other Loan Documents, or the
Obligations.
Section 10.2 MARSHALLING AND OTHER MATTERS. To the extent
permitted by applicable law, Borrower hereby waives, to the extent permitted by
law, the benefit of all appraisement, valuation, stay, extension, reinstatement
and redemption laws now or hereafter in force and all rights of marshalling in
the event of any sale hereunder of the Property or any part thereof or any
interest therein. Further, Borrower hereby expressly waives any and all rights
of redemption from sale under any order or decree of foreclosure of this
Mortgage on behalf of Borrower, and on behalf of each and every person acquiring
any interest in or title to
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the Property subsequent to the date of this Mortgage and on behalf of all
persons to the extent permitted by applicable law.
Section 10.3 WAIVER OF NOTICE. To the extent permitted by
applicable law, Borrower shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Mortgage or
the Loan Documents specifically and expressly provide for the giving of notice
by Lender to Borrower and except with respect to matters for which Lender is
required by applicable law to give notice, and Borrower hereby expressly waives
the right to receive any notice from Lender with respect to any matter for which
this Mortgage does not specifically and expressly provide for the giving of
notice by Lender to Borrower.
Section 10.4 WAIVER OF STATUTE OF LIMITATIONS. To the extent
permitted by applicable law, Borrower hereby expressly waives and releases to
the fullest extent permitted by law, the pleading of any statute of limitations
as a defense to payment of the Debt or performance of its Other Obligations.
Section 10.5 SURVIVAL. The indemnifications made pursuant to
SECTIONS 9.3 AND 9.4 herein and the representations and warranties, covenants,
and other obligations arising under Article 8, shall continue indefinitely in
full force and effect and shall survive and shall in no way be impaired by: any
satisfaction or other termination of this Mortgage, any assignment or other
transfer of all or any portion of this Mortgage or Lender's interest in the
Property (but, in such case, shall benefit both Indemnified Parties and any
assignee or transferee), any exercise of Lender's rights and remedies pursuant
hereto including but not limited to foreclosure or acceptance of a deed in lieu
of foreclosure, any exercise of any rights and remedies pursuant to the Loan
Agreement, the Note or any of the other Loan Documents, any transfer of all or
any portion of the Property (whether by Borrower or by Lender following
foreclosure or acceptance of a deed in lieu of foreclosure or at any other
time), any amendment to this Mortgage, the Loan Agreement, the Note or the other
Loan Documents, and any act or omission that might otherwise be construed as a
release or discharge of Borrower from the obligations pursuant hereto.
Notwithstanding anything to the contrary contained in this Mortgage or the other
Loan Documents, Borrower shall not have any obligations or liabilities under the
indemnification under SECTION 9.4 herein or other indemnifications with respect
to Hazardous Substances contained in the other Loan Documents with respect to
those obligations and liabilities that Borrower can prove arose solely from
Hazardous Substances that (i) were not present on or a threat to the Property
prior to the date that Lender or its nominee acquired title to the Property,
whether by foreclosure, exercise by power of sale, acceptance of a deed-in-lieu
of foreclosure or otherwise and (ii) were not the result of any act or
negligence of Borrower or any of Borrower's affiliates, agents or contractors.
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Article 11 - EXCULPATION
The provisions of Section 9.4 of the Loan Agreement are hereby
incorporated by reference into this Mortgage to the same extent and with the
same force as if fully set forth herein.
Article 12 - NOTICES
All notices or other written communications hereunder shall be
delivered in accordance with Section 10.6 of the Loan Agreement.
Article 13 - APPLICABLE LAW
Section 13.1 GOVERNING LAW. (A) THIS MORTGAGE WAS NEGOTIATED
IN THE STATE OF NEW YORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE
STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE SECURED HEREBY WERE DISBURSED
FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY,
AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS MORTGAGE AND
THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE
PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN
DOCUMENTS WITH RESPECT TO THE PROPERTY SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE
LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS MORTGAGE AND THE OR THE OTHER LOAN DOCUMENTS,
AND THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
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(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR
BORROWER ARISING OUT OF OR RELATING TO THIS MORTGAGE MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT
CT CORPORATION SYSTEM, INC.
1633 BROADWAY, 23RD FLOOR
NEW YORK, NEW YORK 10019
ATTENTION: SERVICE OF PROCESS DEPARTMENT
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 13.2 USURY LAWS. Notwithstanding anything to the
contrary, (a) all agreements and communications between Borrower and Lender are
hereby and shall automatically be limited so that, after taking into account all
amounts deemed interest, the interest contracted for, charged or received by
Lender shall never exceed the maximum lawful rate or amount, (b) in calculating
whether any interest exceeds the lawful maximum, all such interest shall be
amortized, prorated, allocated and spread over the full amount and term of all
principal indebtedness of Borrower to Lender, and (c) if through any contingency
or event, Lender receives or is deemed to receive interest in excess of the
lawful maximum, any such excess shall be deemed to have been applied toward
payment of the principal of any and all
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then outstanding indebtedness of Borrower to Lender, or if there is no such
indebtedness, shall immediately be returned to Borrower.
Section 13.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights,
powers and remedies provided in this Mortgage may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Mortgage invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable law. If any term of
this Mortgage or any application thereof shall be invalid or unenforceable, the
remainder of this Mortgage and any other application of the term shall not be
affected thereby.
Article 14 - DEFINITIONS
All capitalized terms not defined herein shall the respective
meanings set forth in the Loan Agreement. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage may be used interchangeably in singular or plural form and the
word "BORROWER" shall mean "each Borrower and any subsequent owner or owners of
the Property or any part thereof or any interest therein," the word "LENDER"
shall mean "Lender and any subsequent holder of the Note," the word "NOTE" shall
mean "the Note and any other evidence of indebtedness secured by this Mortgage,"
the word "PROPERTY" shall include any portion of the Property and any interest
therein, and the phrases "ATTORNEYS' FEES", "LEGAL FEES" and "COUNSEL FEES"
shall include any and all attorneys', paralegal and law clerk fees and
disbursements, including, but not limited to, fees and disbursements at the
pre-trial, trial and appellate levels incurred or paid by Lender in protecting
its interest in the Property, the Leases and the Rents and enforcing its rights
hereunder.
Article 15 - MISCELLANEOUS PROVISIONS
Section 15.1 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 Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
Section 15.2 SUCCESSORS AND ASSIGNS. This Mortgage shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.
Section 15.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Loan Agreement, the Note or this Mortgage is held to be
invalid, illegal or unenforceable in any respect, the Loan Agreement, the Note
and this Mortgage shall be construed without such provision.
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<PAGE> 30
Section 15.4 HEADINGS, ETC. The headings and captions of
various Sections 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.
Section 15.5 NUMBER AND GENDER. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa.
Section 15.6 SUBROGATION. If any or all of the proceeds of the
Note have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's obligations hereunder, under the Loan Agreement, the
Note and the other Loan Documents and the performance and discharge of the Other
Obligations.
Section 15.7 ENTIRE AGREEMENT. The Note, the Loan Agreement,
this Mortgage and the other Loan Documents constitute the entire understanding
and agreement between Borrower and Lender with respect to the transactions
arising in connection with the Debt and supersede all prior written or oral
understandings and agreements between Borrower and Lender with respect thereto.
Borrower hereby acknowledges that, except as incorporated in writing in the
Note, the Loan Agreement, this Mortgage and the other Loan Documents, there are
not, and were not, and no persons are or were authorized by Lender to make, any
representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the transaction which is the subject of the Note, the
Loan Agreement, this Mortgage and the other Loan Documents.
Section 15.8 LIMITATION ON LENDER'S RESPONSIBILITY. No
provision of this Mortgage shall operate to place any obligation or liability
for the control, care, management or repair of the Property upon Lender, nor
shall it operate to make Lender responsible or liable for any waste committed on
the Property by the tenants or any other Person, or for any dangerous or
defective condition of the Property, or for any negligence in the management,
upkeep, repair or control of the Property resulting in loss or injury or death
to any tenant, licensee, employee or stranger. Nothing herein contained shall be
construed as constituting Lender a "mortgagee in possession."
Article 16 - STATE-SPECIFIC PROVISIONS
Section 16.1 PRINCIPLES OF CONSTRUCTION. In the event of any
inconsistencies between the terms and conditions of this Article 16 and the
terms and conditions of this Mortgage, the terms and conditions of this Article
16 shall control and be binding.
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<PAGE> 31
Section 16.2 ADDITIONAL REMEDIES - POWER OF SALE. In addition
to the remedies set forth in Section 7.1, upon the occurrence and during the
continuance of any Event of Default, Lender may sell the Property at public
outcry to the highest bidder for cash in front of the courthouse door in the
county where said Property is located, either in person or by auctioneer or
other personal representative, after having given notice of the time, place and
terms of sale by publication once a week for three (3) successive weeks prior to
said sale in some newspaper published in said county, and upon payment of the
purchase money, Lender, its agent, attorney, or any person conducting the sale
for Lender, is authorized to execute to the purchaser at said sale a deed to the
Property so purchased. Lender, its successors and assigns, may bid at said sale
and purchase said Property, or any part thereof, if the highest bidder therefor.
Proceeds of such sale shall be applied as provided in the Mortgage. The
purchaser at any such sale shall be under no obligation to see to the proper
application of the purchase money.
Section 16.3 MATURITY DATE. The Note presently matures on
August 1, 2028.
Section 16.4 DEBT. The term "Debt", as defined in the Loan
Agreement, means the outstanding principal amount set forth in, and evidenced
by, the Note, the Loan Agreement and this Mortgage, together with all interest
accrued and unpaid thereon and all other sums (including the Yield Maintenance
Premium) due to Lender in respect of the Loan under the Note, the Loan
Agreement, this Mortgage or any other Loan Document.
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<PAGE> 32
IN WITNESS WHEREOF, THIS MORTGAGE has been executed by
Borrower as of the day and year first above written.
MONTGOMERY MALL ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: GLIMCHER MONTGOMERY, INC., a
Delaware corporation, its sole general
partner
By:/s/ GEORGE A. SCHMIDT
-------------------------------------------
Name: George A. Schmidt
Title: Senior Vice President
<PAGE> 33
ACKNOWLEDGMENT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, Gus G. Sentementes, a Notary Public in and for said county
in said state, hereby certify that George A. Schmidt, whose name as Senior Vice
President of Glimcher Montgomery, Inc., a Delaware corporation, acting in its
capacity as the sole general partner of MONTGOMERY MALL ASSOCIATES LIMITED
PARTNERSHIP, a Delaware limited partnership, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that,
being informed of the contents of said instrument, he, as such officer of said
corporation, acting in its capacity as the general partner of said limited
partnership, and with fully authority, executed the same voluntarily for and as
the act of said corporation acting in its capacity as such general partner of
said limited partnership.
Given under my hand on this 15th day of July, 1998.
/s/ Gus G. Sentementes
------------------------
Notary Public
AFFIX SEAL
My commission expires: March 30, 2000
--------------------
<PAGE> 34
EXHIBIT A
LEGAL DESCRIPTION
<PAGE> 1
Exhibit 10.70
NOTE
$15,000,000.00
New York, New York
July 15, 1998
FOR VALUE RECEIVED, the undersigned, Glimcher Properties
Limited Partnership, a Delaware limited partnership, hereby unconditionally
promises to pay to the order of Lehman Brothers Holdings Inc., a Delaware
corporation, d/b/a Lehman Capital, a division of Lehman Brothers Holdings Inc.
("MEZZANINE LENDER"), located at Three World Financial Center, New York, New
York 10285, to such account as Mezzanine Lender may direct in written notice to
Borrower, in lawful money of the United States of America and by wire transfer
of immediately available funds, the principal amount of Fifteen Million Dollars
($15,000,000.00), in such amounts and at such times as set forth in the
Mezzanine Loan Agreement, with a final payment of the unpaid principal amount
hereof, together with unpaid interest accrued hereon and all other amounts due
hereunder, on the Maturity Date (as defined in the Mezzanine Loan Agreement).
The undersigned further agrees to pay interest in like money
to such account on the unpaid principal amount hereof from time to time from the
date hereof and on the dates and at the applicable rate per annum as provided in
the Mezzanine Loan Agreement until paid in full (both before and after
judgment).
This Note is the Mezzanine Note referred to in the loan
agreement, dated as of the date of this note (the "MEZZANINE LOAN AGREEMENT"),
between the undersigned and Mezzanine Lender and is entitled to the benefits
thereof and subject to the terms thereof. Capitalized terms used herein but not
defined herein shall have the meanings ascribed thereto in the Mezzanine Loan
Agreement.
Upon the occurrence of any one or more of the Events of
Default specified in the Mezzanine Loan Agreement, all amounts then remaining
unpaid on this Note shall become, or may be declared to be, immediately due and
payable all as provided therein.
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 Borrower or Mezzanine Lender, but only by an agreement in writing signed
by the party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought. Whenever used, the
singular number shall include the plural, the plural the singular, and the words
"Mezzanine Lender" and "Borrower" shall include their respective successors,
assigns, heirs, executors and administrators.
24
<PAGE> 2
Borrower and all others who may become liable for the payment
of all or any part of the indebtedness hereunder do hereby severally waive
presentment and demand for payment, notice of dishonor, protest, notice of
protest, notice of nonpayment, notice of intent to accelerate the maturity
hereof and of acceleration. No release of any security for the indebtedness
hereunder or any person liable for payment of the indebtedness hereunder, no
extension of time for payment of this Note or any installment hereof, and no
alteration, amendment or waiver of any provision of the Mezzanine Loan Documents
made by agreement between Mezzanine Lender and any other person or party shall
release, modify, amend, waive, extend, change, discharge, terminate or affect
the liability of Borrower, and any other person or party who may become liable
under the Mezzanine Loan Documents for the payment of all or any part of the
indebtedness hereunder.
Borrower (and the undersigned representative of Borrower, if
any) represents that Borrower has full power, authority and legal right to
execute, deliver and perform its obligations pursuant to this Note, the
Mezzanine Loan Agreement and the other Mezzanine Loan Documents and that this
Note, the Mezzanine Loan Agreement and the other Mezzanine Loan Documents
constitute valid and binding obligations of Borrower.
All notices or other communications required or permitted to
be given pursuant hereto shall be given in the manner specified in the Mezzanine
Loan Agreement directed to the parties at their respective addresses as provided
therein.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed and delivered as of the day first above written.
GLIMCHER PROPERTIES LIMITED
PARTNERSHIP, as Borrower
By: Glimcher Properties Corporation
By: /s/ George A. Schmidt
---------------------------------
Name: George A. Schmidt
Title: Senior Vice President
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<PAGE> 1
Exhibit 10.71
ASSUMPTION AGREEMENT
3/27/99
This instrument was prepared by and |
after recordation should be returned to: |
|
Aid Association for Lutherans |
4321 North Ballard Road |
Appleton, WI 54919 |
Attn: Law Department |
|
|
__________________________________________SPACE ABOVE THIS LINE FOR
RECORDER'S USE
ASSUMPTION AGREEMENT
This ASSUMPTION AGREEMENT ("Assumption") is made as of the 1st day of August,
1998 by and among WEBERSTOWN SHOPPING CENTER, A CALIFORNIA LIMITED PARTNERSHIP,
AND CENTER PROPERTIES, A HAWAII JOINT VENTURE (collectively, the "Assignor"),
WEBERSTOWN MALL LLC, A DELAWARE LIMITED LIABILITY COMPANY ("Assignee"), and AID
ASSOCIATION FOR LUTHERANS, A WISCONSIN CORPORATION ("Lender").
R E C I T A L SE C I T A L SC I T A L SI T A L S
A. Assignor and Lender have entered into that certain loan agreement
pursuant to which Lender agreed to loan to Assignor the principal sum
of Thirteen Million One Hundred Thousand and No/100 Dollars
($13,100,000.00) (the "Loan"). The Loan is evidenced by that certain
Secured Promissory Note dated October 13, 1994, executed by Assignor in
favor of Lender (the "Note"), and is secured by, among other things,
that certain Deed of Trust, Financing Statement, Fixture Filing and
Security Agreement (With Assignment of Rents) dated as of October 13,
1994, executed by Assignor in favor of Lender, and recorded on October
19, 1994, in the San Joaquin County Recorder's Office as Instrument No.
94115527, as amended by that certain Amendment to Deed of Trust and
Documents of Record dated August 7, 1996 and recorded on August 8,
1996, in the San Joaquin County Recorder's Office as Instrument No.
96081976 (collectively, the "Deed of Trust"). The Deed of Trust
encumbers certain real property owned by Assignor located at 4950
Pacific Avenue, City of Stockton, California, as more particularly
described in EXHIBIT A attached hereto and incorporated herein by this
reference (the "Property").
B. The Loan also is secured by that certain Assignment of Rents and
Leases, dated as of October 13, 1994, from Assignor, as assignor, in
favor of Lender, as assignee, which was recorded on October 19, 1994,
in the San Joaquin County Recorder's Office as Instrument No. 94115528
(the "Assignment of Rents"), pursuant to which Assignor assigned to
Lender all of Assignor's rights, interests and privileges under the
Leases (as
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<PAGE> 2
defined in the Assignment of Rents).
C. Assignor, as debtor, executed that certain UCC-1 Financing Statement
dated October 13, 1994 in favor of Lender, as secured party, which was
filed with the California Secretary of State's Office on November 15,
1994 as Instrument No. 9433661459 (the "Financing Statement"),
covering, among other things, all right, title and interest of Assignor
in and to all tangible personal property owned by Assignor located on
or at the Property and all tangible and intangible personal property
and General Intangibles (as defined in the Financing Statement) owned
or acquired by Assignor and relating to, generated from, arising out
of, or incidental to, the ownership, development or operation of the
Property or the improvements thereon.
D. Assignor also executed and delivered to Lender that certain letter
waiving any rights Assignor may have under California Civil Code
Section 2954.10 (the "Waiver Letter").
E. The Note, Deed of Trust, Assignment of Rents, Financing Statement,
Waiver Letter and all other documents executed by Assignor and/or
Lender in connection with the Loan are incorporated herein by this
reference and shall be referred to hereafter collectively as the "Loan
Documents".
F. Concurrently with the execution of the Loan Documents, Frederick M.
Nicholas, as indemnitor, and Lender, as indemnitee, entered into that
certain Environmental Indemnity Agreement dated October 13, 1994 (the
"Indemnity Agreement"), pursuant to which, among other things,
indemnitor made certain representations, warranties, covenants and
indemnifications in favor of Lender relating to, among other things,
the environmental condition of the Property. The Indemnity Agreement is
incorporated herein by this reference.
G. Assignor and Assignee have executed that certain Contribution Agreement
dated June 16, 1998 (the "Contribution Agreement") pursuant to which
Assignor agrees to assign to Assignee the Property.
H. As a condition of Assignor transferring its interest in the Property to
Assignee pursuant to the Contribution Agreement, Assignee has agreed to
assume, perform and otherwise be bound by all of the terms, covenants,
conditions and obligations imposed upon Assignor under the Loan
Documents and under the Indemnity Agreement; provided, however, that
Assignor shall continue to be fully liable to Lender for all
obligations of Assignor under the Loan Documents and of indemnitor
under the Indemnity Agreement notwithstanding the assignment made
herein.
I. Lender is willing to consent to an assumption of the Loan Documents by
Assignee on the terms and conditions described herein; provided,
however, that Lender shall not be deemed to have released Assignor from
any of its liability to Lender under the Loan Documents in any way due
to this Assumption.
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<PAGE> 3
NOW, THEREFORE, in consideration of the foregoing Recitals, which Recitals are
incorporated herein by this reference, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. ASSIGNMENT OF INTEREST. Assignor hereby grants, bargains, sells,
conveys, transfers and assigns to Assignee, effective as of the date
hereof, all of its right, title and interest under the Loan Documents.
Notwithstanding the foregoing, Assignor shall not be released from any
liability of Assignor to Lender under the Loan Documents or of
indemnitor under the Indemnity Agreement in any way due to this
Assumption and Lender may proceed directly against either Assignor or
Assignee for any obligations relating to the Loan Documents and against
Assignor under the Indemnity Agreement as if this assignment had not
occurred. Lender and Assignor agree that Assignor's liability to Lender
under the Loan Documents or under the Indemnity Agreement shall not be
diminished in any way due to Lender's acceptance of Assignee's
performance under, or compliance with, the Loan Documents and the
Environmental Indemnity Agreement referred to in Section 3(a).
Assignor's liability to Lender under the Loan Documents shall be joint
and several with Assignee and shall not be that of a surety of
Assignee's obligations, except to the extent, if any, that such may be
required by law.
2. ASSIGNMENT OF OBLIGATIONS. Assignee hereby accepts such grant, transfer
and assignment and assumes and agrees to perform and be bound by all of
the terms, covenants, conditions and obligations of Assignor under the
Loan Documents.
3. CONSENT OF LENDER. Lender hereby consents to this Assumption provided,
that, on or before the closing of the purchase and sale of the
Property, as contemplated in the Contribution Agreement, the following
terms have been met:
(a) Assignee has duly executed and delivered to Lender an
Environmental Indemnity Agreement, an Authorization Agreement
for Preauthorized Payments, a California UCC-2 Amendment to
Financing Statement, or a new Financing Statement, if
necessary, a Form W-9, and a Certification of Non-Foreign
Status, all in a form acceptable to Lender;
(b) Lender has been provided by Assignee at Assignee's expense
such endorsements to the ALTA Lender's Policy of Title
Insurance issued to Lender on October 19, 1994 by Stewart
Title Guaranty Company (Policy No. CL-1530-206138/Order No.
36761) as may be requested by Lender (including, without
limitation, a modified form of CLTA Endorsement No. 111.4), or
a new policy if such endorsements are not available, to assure
the continued priority of the lien of the Deed of Trust and to
reflect the new owner of the Property;
(c) Assignee has procured the insurance policies required to be
maintained by Trustor pursuant to the Deed of Trust, which
insurance shall be approved by Lender in its sole discretion
as to amount, form, deductibles and insurer;
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<PAGE> 4
(d) Assignee and Assignor have delivered to Lender such other
documents and items as Lender may request in Lender's sole
discretion to assure Assignor's continuing liability under the
Loan Documents and the Indemnity Agreement, Assignee's
assumption of the obligations of Assignor under the Loan
Documents and the Indemnity Agreement, and Lender's continued
priority of its security interest granted pursuant to the Loan
Documents;
(e) The delivery to Lender of (i) a copy of the resolution or
resolutions of the members of Assignee, satisfactory to Lender
in its sole and absolute discretion and certified by the
members of Assignee as being in full force and effect,
authorizing the borrowing provided for herein and the
execution, delivery and performance of this Assumption and any
other instrument or agreement required hereunder and attaching
certified copies of Assignee's Operating Agreement; (ii) a
certificate, signed by the members of Assignee, as to the
incumbency, and containing the specimen signature or
signatures, of the person or persons authorized to execute and
deliver this Assumption and any other instrument or agreement
required hereunder on behalf of Assignee; and (iii) a copy of
Assignee's Certificate of Good Standing issued by the State of
California; and
(f) The representations and warranties set forth herein and in the
Loan Documents shall be true, correct and complete.
4. WAIVER OF RIGHTS. Assignor and Assignee waive any rights, if any, to
assert any defenses, rights or protections that either may have, if
any, under California Code of Civil Procedure Sections 726, 580a, 580b
or 580d.
5. COSTS AND FEES. Assignee agrees to pay to Lender before closing Five
Thousand and No/100 Dollars ($5,000.00) as a processing fee for this
transaction and to pay all transfer taxes, recording fees and the fees
and costs of special counsel of Lender. Assignee shall pay any fees and
costs of the broker or other similar party for services rendered in
this transaction.
6. ASSIGNOR'S INDEMNIFICATION. Assignor hereby agrees to indemnify, defend
and hold each of Assignee and Lender harmless from all claims,
liabilities, damages, losses, demands, judgments, costs or expenses
(including actual attorneys' fees and costs) made against or suffered
by Assignee or Lender, as the case may be, which relate to any
obligations of Assignor accruing, to be performed or arising out of
events occurring prior to the date hereof in respect of the Loan
Documents or the Property.
7. ASSIGNEE'S INDEMNIFICATION. Assignee hereby agrees to indemnify, defend
and hold each of Assignor and Lender harmless from all claims,
liabilities, damages, losses, demands, judgments, costs or expenses
(including actual attorneys' fees and costs) made against or suffered
by Assignor or Lender, as the case may be, which relate to any
obligations of Assignee, arising out of events occurring on or after
the date hereof in respect of the Loan Documents or the Property.
-4-
<PAGE> 5
8. ASSIGNOR'S REPRESENTATIONS. Assignor represents and warrants to and for
the benefit of Assignee and Lender that as of the date hereof:
(a) The execution, delivery and performance of this Assumption has
been duly authorized by the governing authorities of Assignee
and Assignor and no other action of Assignee, Assignor or any
other party is requisite to the execution, delivery and
performance of this Assumption;
(b) The Loan Documents and Indemnity Agreement are in full force
and effect;
(c) Neither the Loan Documents nor the Indemnity Agreement have
been amended, modified, supplemented or assigned except as set
forth herein;
(d) There are no defaults nor any events which, with the passage
of time or notice, shall constitute a default by Assignor
under the Loan Document nor any breach of any obligation of
Assignor under the Indemnity Agreement;
(e) Assignor has no defense as to any of its obligations under the
Loan Documents or the Indemnity Agreement; and
(f) The representations and warranties contained in the Loan
Agreement and the other Loan Documents are true, correct and
complete as of the date hereof.
9. ASSIGNEE'S REPRESENTATIONS. Assignee represents and warrants to and for
the benefit of Assignor and Lender that:
(a) Assignee has delivered to Lender a true, correct and complete
copy of its Operating Agreement. The Operating Agreement has
not been modified, amended or otherwise changed since the date
thereof and all documents required to be filed in connection
with the conduct of Assignee's business have been filed in the
appropriate offices;
(b) All statements, representations, and warranties contained in
any writing previously delivered by Assignee to Lender in
connection with the transfer of the Loan are true and correct
in all material respects, and all obligations of Assignee and
all conditions to the making of the transfer of the Loan have
been performed and satisfied;
(c) There have been no material adverse changes, financial or
otherwise, in the condition of Assignee from that submitted to
Lender by Assignee or in any supporting data submitted
therewith, and all of the information contained therein is
true and correct;
(d) There is no claim, investigation, litigation or condemnation
proceeding pending or
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<PAGE> 6
threatened against Assignee except as heretofore disclosed in
writing to Lender;
(e) There is no judgment, decree, or order of any court or
governmental or administrative agency or instrumentality which
has been issued against Assignee and which has or may have any
material effect on the Property or on the business of
Assignee, except as have been heretofore disclosed to Lender
in writing;
(f) This Assumption and all other documents required to be
executed by Assignee pursuant to the terms hereof have been
duly authorized, executed and delivered and the Assumption and
Loan Documents constitute valid and binding obligations of
Assignee enforceable in accordance with their respective
terms. No approval, consent, order or authorization of any
governmental authority and no designation, registration,
declaration or filing with any governmental entity is required
in connection with the execution and delivery by Assignee of
the Assumption or the assumption of the Loan Documents; and
(g) The assumption of the Loan Documents will not violate or
contravene any agreement, indenture, or instrument to which
Assignee is a party or by which it or the Property may be
bound, or be in conflict with, result in a breach of, or
constitute a default under any such agreement, indenture, or
other instrument, or result in the creation or imposition of
any lien, charge, or encumbrance of any nature whatsoever upon
any of the property or assets of Assignee except as
contemplated by the provisions of the Loan Documents, and no
action or approval with respect thereto by any third person is
required.
10. NOTICES. Whenever any party desires to give or serve any notice, demand
or request with respect to this Assumption, each such communication
shall be in writing and shall be effective only when it is delivered by
personal service or shall be effective three (3) days after deposit in
the United States mail, mailed by certified mail, postage pre-paid,
return receipt requested, to the parties addressed as follows:
If to Assignor: Weberstown Shopping Center
c/o The Hapsmith Company
9300 Wilshire Boulevard, Suite 200
Beverly Hills, California 90212
If to Assignee: Weberstown Mall LLC
c/o Glimcher Properties Limited Partnership
20 West Third Street
Columbus, Ohio 43215
Attn: George A. Schmidt, Esq.
If to Lender: Aid Association for Lutherans
4321 North Ballard Road
Appleton, Wisconsin 54919
Attention: Law Department
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<PAGE> 7
11. FURTHER ASSURANCES. Assignor shall execute, acknowledge, and deliver
all such instruments, and take all such action as may be necessary to
further assure to Assignee and Lender the rights assigned hereby and
the full benefits hereof and to preserve and protect this Assumption
and all of the rights, powers, and remedies of Assignee provided for
herein.
12. ASSIGNEE'S REVIEW OF DOCUMENTS. Assignee acknowledges that it has
reviewed and approved the Loan Documents.
13. FUTURE TRANSFERS OR ASSIGNMENTS. Assignor and Assignee acknowledge that
Lender's consent to this Assumption does not constitute a consent by
Lender to any future transfer, conveyance, or assignment of any right,
title, or interest under the Loan Documents and such transfers,
conveyances and assignments are subject to the provisions of the Loan
Documents.
14. VALIDITY OF ASSIGNMENT. Assignor and Assignee acknowledges that this
Assumption shall have no force, effect or validity unless Assignor and
Assignee consummate the purchase and sale of the Property as
contemplated under the Contribution Agreement.
15. SUCCESSOR AND ASSIGNS. This Assumption shall be binding upon and inure
to the benefit of the successors and assigns of the respective parties
hereto.
16. GOVERNING LAW. This Assumption shall be governed by and construed in
accordance with the laws of the same state as the Loan Documents.
17. ATTORNEYS' FEES. In the event of the bringing of any action or suit by
a party hereto against another party hereto by reason of any breach of
any of the covenants, conditions, agreements, or provisions on the part
of the other party arising out of this Assumption, the prevailing party
shall be entitled to have and recover of and from the other party all
costs and expenses of the action or suit, including attorneys' fees and
court costs.
18. COUNTERPARTS. This Assumption may be executed in several counterparts,
each of which shall be an original, but all of which taken together
shall constitute one and the same instrument.
19. CAPTIONS, GENDER, AND NUMBER. Any section, paragraph, title or caption
contained in this Assumption is for convenience only and shall not be
deemed a part of this Assumption. As used in this Assumption, the
masculine, feminine, or neuter gender, and the singular or plural
number shall each be deemed to include the others whenever the context
so indicates.
IN WITNESS WHEREOF, this Assumption is executed by the parties as of the date
first above written.
-7-
<PAGE> 8
ASSIGNOR:
WEBERSTOWN SHOPPING CENTER,
A CALIFORNIA LIMITED PARTNERSHIP
By: /s/ Frederick M. Nicholas
-------------------------------------------
Frederick M. Nicholas, General Partner
CENTER PROPERTIES,
A HAWAII GENERAL PARTNERSHIP
By: Fremont Hub Shopping Center,
a California partnership, General Partner
By: /s/ Frederick M. Nicholas
-------------------------------------------
Frederick M. Nicholas
General Partner
By: Fremont Hub Shopping Center B
Second Unit, a California limited
Partnership, General Partner
By: /s/ Frederick M. Nicholas
-------------------------------------------
Frederick M. Nicholas
General Partner
By: Fremont Associates,
a California limited partnership
General Partner
By: /s/ Frederick M. Nicholas
-------------------------------------------
Frederick M. Nicholas
General Partner
(SIGNATURES CONTINUED ON NEXT PAGE)
-8-
<PAGE> 9
(SIGNATURES CONTINUED FROM PREVIOUS PAGE)
By: Hapsmith-Fremont,
a California limited partnership,
General Partner
By: /S/ FREDERICK M. NICHOLAS
-------------------------------
Frederick M. Nicholas
General Partner
By: The Berman Family Trust Partnership,
a California limited partnership,
General Partner
By: Hapsmith Development Corporation,
a California corporation, General
Partner
By: /S/ FREDERICK M. NICHOLAS
---------------------------
Frederick M. Nicholas
Chairman
ASSIGNEE:
WEBERSTOWN MALL LLC,
A DELAWARE LIMITED LIABILITY COMPANY
By: ____________________________________
Name:
Title:
LENDER:
AID ASSOCIATION FOR LUTHERANS, A
WISCONSIN CORPORATION
By: /S/ WAYNE C. STRECK
------------------------------------
Wayne C. Streck
Vice President -
Mortgages and Real Estate
By: /S/ DAVID CRIST
------------------------------------
David Crist
Assistant Secretary
-9-
<PAGE> 10
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On July 29, 1998, before me, Lynn M. Collings, personally appeared Frederick M.
Nicholas, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument and
that by his signature on the instrument the person, or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL) --------------------------------
Notary Public
My commission expires _____________.
My Commission Expires: June 23, 2002.
STATE OF )
) ss.
COUNTY OF )
On ____________, 1998, before me, ___________________, personally appeared
________________________, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and that by his signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL) --------------------------
Notary Public
My commission expires _____________.
My Commission Expires: ________________.
-10-
<PAGE> 11
STATE OF WISCONSIN )
) ss.
COUNTY OF OUTAGAMIE )
On July 30, 1998, before me, Ruth M. Mueller, personally appeared Wayne C.
Streck and David Crist, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the persons whose names are subscribed to the
within instrument and that by their signatures on the instrument the persons, or
the entity upon behalf of which the persons acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL) ----------------------------------
Notary Public
My commission expires July 22, 2001.
-11-
<PAGE> 12
EXHIBIT A
-12-
<PAGE> 1
Exhibit 10.72
PROMISSORY NOTE
New York, New York
$58,350,000 September 1, 1998
FOR VALUE RECEIVED, MORGANTOWN MALL ASSOCIATES LIMITED
PARTNERSHIP, an Ohio limited partnership, having its principal place of business
at c/o Glimcher Properties Limited Partnership, 20 South Third Street, Columbus,
Ohio 43215 (hereinafter referred to as "MAKER"), promises to pay to the order of
The Capital Company of America LLC, a Delaware limited liability company, at its
principal place of business at Two World Financial Center, Building B, New York,
New York 10281 (hereinafter referred to as "PAYEE"), or at such place as the
holder hereof may from time to time designate in writing, the principal sum of
FIFTY-EIGHT MILLION THREE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($58,350,000), 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 Applicable Interest Rate (as hereinafter defined), and to be
paid in installments as follows:
A. One installment of interest, in advance, only on the date
hereof, for the period commencing on (and including) the date
hereof and ending on (and including) September 10, 1998; and
B. A constant payment of $383,902.97 (such payment hereinafter
the "MONTHLY DEBT SERVICE PAYMENT AMOUNT"), on October 11,
1998 and on the eleventh day of each calendar month thereafter
(or, if such eleventh day is not a Business Day, the next day
which is a Business Day) up to and including the Maturity Date
(as hereinafter defined), each of such payments to be applied
(a) to the payment of interest on the unpaid principal balance
of this Note from time to time outstanding at the Initial
Interest Rate (as hereinafter defined) and (b) the balance to
the reduction of the outstanding principal sum; and
C. Payment of interest accrued at the Adjusted Interest Rate (as
hereinafter defined) and not paid pursuant to CLAUSE B above
shall be deferred and accrued monthly or paid in accordance
with Paragraph 7 hereof;
and the balance of said principal sum together with all accrued and unpaid
interest thereon shall be due and payable on September 11, 2028 (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. The payments of the Monthly
<PAGE> 2
Debt Service Payment Amount required hereunder are based upon an amortization
term of three hundred sixty (360) months. 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. The term "APPLICABLE INTEREST RATE" as used in this Note
shall mean (a) from the date of this Note through but not including September
11, 2008, a rate of six and eighty-nine hundredths percent (6.89%) per annum
(the "INITIAL INTEREST RATE") and (b) from and after September 11, 2008 through
and including the date this Note is paid in full, a rate per annum equal to the
Adjusted Interest Rate. For purposes of this Note, the term "ADJUSTED INTEREST
RATE" shall mean a rate per annum equal to the greater of (i) the Treasury Rate
(as defined in the Loan Agreement (as hereinafter defined)) plus four and five
hundreths percent (4.05%) and (ii) the Initial Interest Rate plus four and five
hundreths percent (4.05%). Also, for purposes of this Note, the term "OPTIONAL
PREPAYMENT DATE" shall mean September 11, 2008.
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 Deed of Trust Assignment of Leases and Rents and
Security Agreement dated as of the date hereof, given by Maker, as grantor, to
Michael B. Keller, as trustee, for the benefit of Payee, encumbering the fee
estate of Maker in a certain property located in the District of Grant, County
of Monongalia, and State of West Virginia, as more particularly described
therein (the "MORTGAGE"), (b) an Assignment 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 and the 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
2
<PAGE> 3
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.
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.
3
<PAGE> 4
6. Other than as set forth in Section 2.3.2 of the Loan
Agreement, this Note may not be prepaid prior to the Optional Prepayment Date;
PROVIDED, however, that Maker shall have the right and option to release all of
the Mortgaged Property from the lien of the Mortgage in accordance with the
terms and provisions set forth in Sections 2.3 and 2.4 of the Loan Agreement
(the "DEFEASANCE OPTION"). On the Optional Prepayment Date or on any scheduled
payment date thereafter, Maker may, at its option and upon thirty (30) days
prior written notice from Maker to Payee, prepay in whole or in part the Debt
without payment of the Yield Maintenance Premium (as defined in the Loan
Agreement) or any other premium or penalty. If prior to the Optional Prepayment
Date and following the occurrence of any Event of Default, Maker shall tender
payment of an amount sufficient to satisfy the Debt, such tender by Maker shall
be deemed to be voluntary and Maker shall pay, in addition to the Debt, the
Yield Maintenance Premium, if any, that would be required under the Defeasance
Option. Each voluntary prepayment after the Optional Prepayment Date shall be
made on a scheduled payment date and include all accrued and unpaid interest up
to but not including such scheduled payment date or, if not paid on a scheduled
payment date, include interest that would have accrued on such prepayment
through the next regularly scheduled payment date. 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 except that if at the
time of such application a Default or an Event of Default has occurred and is
continuing, then Maker shall pay to Payee an additional amount equal to the
Yield Maintenance Premium, if any, that would be required under the Defeasance
Option.
7. In the event that Maker does not prepay the entire Debt on
the Optional Prepayment Date, Maker shall make payments in monthly installments
on the Optional Prepayment Date and on the eleventh day of each calendar month
thereafter (or, if such eleventh day is not a Business Day, the next day which
is a Business Day) up to and including the Maturity Date in an amount equal to
the Monthly Debt Service Payment Amount. Each Monthly Debt Service Payment
Amount paid on and after the Optional Prepayment Date shall be applied first to
the payment of interest computed at the Initial Interest Rate with the remainder
of the Monthly Debt Service Payment Amount applied to the reduction of the
outstanding principal balance of this Note. Interest accrued at the Adjusted
Interest Rate and not paid pursuant to the first sentence of this Paragraph 7
shall be deferred and added to the Debt and shall earn interest at the Adjusted
Interest Rate to the extent permitted by applicable law (such accrued interest,
with interest thereon, hereinafter "ACCRUED INTEREST"). Accrued Interest shall
be paid after payment of the principal balance of this Note in full pursuant to
Section 10.9.2 of the Loan Agreement. All of the Debt, including any outstanding
Accrued Interest, 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
4
<PAGE> 5
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
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
5
<PAGE> 6
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.
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.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
Maker has duly executed this Promissory Note the day and year
first above written.
MORGANTOWN MALL ASSOCIATES LIMITED
PARTNERSHIP, an Ohio limited partnership
By: GLIMCHER MORGANTOWN MALL,
INC., a Delaware corporation,
its sole general partner
6
<PAGE> 7
By: /s/ GEORGE A. SCHMIDT
------------------------------
George A. Schmidt
Senior Vice President
Pay to the order of__________________________________________________,
without recourse.
THE CAPITAL COMPANY OF AMERICA LLC,
a Delaware limited liability company
By:
-------------------------------
Name:
Title:
7
<PAGE> 1
Exhibit 10.73
MORGANTOWN MALL ASSOCIATES LIMITED PARTNERSHIP
(Grantor)
to
MICHAEL B. KELLER
(Trustee)
for the use and benefit of
THE CAPITAL COMPANY OF AMERICA LLC
(Beneficiary)
----------------------------------
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT
----------------------------------
Dated: As of September 1, 1998
Property: Morgantown Mall and Morgantown Commons
District of Grant
County of Monongalia
State of West Virginia
-------------------------------
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
Samuel M. Zylberberg, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
<PAGE> 2
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND
SECURITY AGREEMENT (this "DEED OF TRUST"), is made as of September [1,] 1998,
among MORGANTOWN MALL ASSOCIATES LIMITED PARTNERSHIP, an Ohio limited
partnership, ("GRANTOR"), having its principal place of business at c/o Glimcher
Properties Limited Partnership, 20 South Third Street, Columbus, Ohio 43215,
MICHAEL B. KELLER, a resident of Berkeley County ("TRUSTEE"), whose address is
Bowles, Rice, McDonald, Graff & Love, PLLC, 105 West Burke Street, Martinsburg,
West Virginia 25401, and THE CAPITAL COMPANY OF AMERICA LLC, a Delaware limited
liability company ("BENEFICIARY"), 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. Grantor is the owner of fee simple title to those certain
parcels of real property located in the District of Grant, County of Monongalia,
State of West Virginia, and more particularly described on EXHIBIT A attached
hereto and incorporated herein by this reference (collectively, 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 Grantor and Beneficiary, Beneficiary
is making a loan (the "LOAN") to Grantor in the original principal amount of
$58,350,000 and Grantor 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 Beneficiary, together with interest thereon, with final payment being
due on or before 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 Beneficiary to make the Loan to Grantor 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 Deed of Trust.
NOW, THEREFORE, in consideration of the mutual premises herein
contained and other good and valuable consideration, the receipt and legal
sufficiency whereof are hereby acknowledged, Grantor hereby agrees:
THAT, IN ORDER to secure the payment of an indebtedness in the
principal sum of FIFTY-
2
<PAGE> 3
EIGHT MILLION THREE HUNDRED FIFTY THOUSAND AND 00/100 Dollars ($58,350,000), 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 Grantor to Beneficiary with respect to the Premises (as such assignment
may be amended from time to time, the "ASSIGNMENT"), together with the Note and
this Deed of Trust (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 Deed of Trust 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, GRANTOR HAS GRANTED, BARGAINED,
SOLD, CONVEYED, TRANSFERRED AND ASSIGNED, AND BY THESE PRESENTS DOES HEREBY
IRREVOCABLY GRANT, BARGAIN, SELL, CONVEY, TRANSFER AND ASSIGN, TO TRUSTEE, ITS
SUCCESSORS AND ASSIGNS, IN TRUST, WITH POWER OF SALE AND RIGHT OF ENTRY AND
POSSESSION, the Premises and the Improvements, together with all right, title,
interest and estate of Grantor 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 any part of 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 Grantor 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 Grantor, or in which Grantor has or shall have an interest,
now or hereafter located upon the Premises and the Improvements, or appurtenant
thereto, and usable in connection with the present or future operation and
occupancy of the Premises and the Improvements and all building equipment,
materials and supplies of any nature whatsoever owned by Grantor, or in which
Grantor 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
3
<PAGE> 4
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 Grantor 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 Deed of Trust;
(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 Grantor 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, management agreements, contract
rights (including, without limitation, any contract with any architect or
engineer or with any other provider of goods or services for or in connection
with any construction, repair or other work upon the Premises, the Improvements
or the Equipment and all rights, interest and privileges which Grantor has or
may have as developer or declarant under any covenants, restrictions or
declarations now or hereafter relating to any part of the Premises or the
Improvements), approvals,
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actions, refunds of real estate taxes and assessments (and any other
governmental impositions related to any part of 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 any part of the Premises now
or hereafter in effect (hereinafter collectively referred to as the "Options");
(h) the right, in the name and on behalf of Grantor, to appear
in and defend any action or proceeding brought with respect to any part of 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
Beneficiary in any part of 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 Trustee and his substitutes or successors and assigns, forever,
and Grantor hereby binds itself and its heirs, executors, administrators,
personal representatives, successors and assigns to warrant and forever defend
the Mortgaged Property unto Trustee, his substitutes or successors and assigns,
against the claim or claims of all persons claiming or to claim the same or any
part thereof;
PROVIDED, HOWEVER, these presents are upon the express
condition that if Grantor shall well and truly pay to Beneficiary the Debt at
the time and in the manner provided in the Note, the Loan Agreement, this Deed
of Trust and the other Loan Documents and shall well and truly abide by and
comply with each and every covenant and condition set forth herein, in the Note,
in the Loan Agreement and in the other Loan Documents in a timely manner, then,
and in that event only, all rights under this Deed of Trust shall terminate
(except to the extent expressly provided herein with respect to indemnifications
and other rights which are to continue following the release hereof) and the
Mortgaged Property shall become wholly free of the liens, security interests,
conveyances and assignments created and evidenced hereby, and such liens and
security interests shall be released by Beneficiary in due form at Grantor's
cost.
AND, for the purpose of further securing the Debt and for the
protection of the security of this Deed of Trust, for so long as the Debt or any
part thereof remains unpaid, Grantor represents and warrants to and covenants
and agrees with Beneficiary as follows:
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GENERAL PROVISIONS
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS
AND AGREEMENTS. Grantor shall pay the Debt at the time and in the manner
provided in the Note, the Loan Agreement, this Deed of Trust and the other Loan
Documents. All the covenants, conditions and agreements contained in the Note,
the Loan Agreement and the other Loan Documents are hereby made a part of this
Deed of Trust to the same extent and with the same force as if fully set forth
herein.
2. WARRANTY OF TITLE. Grantor hereby warrants that: (a)
Grantor has good, marketable and insurable title to the Mortgaged Property; (b)
Grantor has the full power, authority and right to execute, deliver and perform
its obligations under this Deed of Trust and to encumber, grant, bargain, sell,
convey, assign and mortgage the Mortgaged Property in the manner and form hereby
done or intended; (c) Grantor possesses an unencumbered fee simple estate in the
Premises and the Improvements and Grantor 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 Deed of
Trust; and (d) this Deed of Trust 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
Deed of Trust. Grantor shall forever warrant, defend and preserve such title and
the validity and priority of the lien of this Deed of Trust and shall forever
warrant and defend the same to Trustee and Beneficiary against the claims of all
persons whomsoever. The foregoing warranty of title shall survive the
foreclosure of this Deed of Trust and shall inure to the benefit of and be
enforceable by Beneficiary in the event Beneficiary acquires title to the
Mortgaged Property pursuant to any foreclosure.
3. INSURANCE.
(a) Grantor, at its sole cost and expense, for the mutual
benefit of Grantor and Beneficiary, shall obtain and maintain during the entire
term of this Deed of Trust 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"), Grantor shall
give prompt written notice thereof to Beneficiary. Following the occurrence of a
Casualty, Grantor, 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.
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4. PAYMENT OF TAXES, ETC. Subject to Section 5.1(b) of the
Loan Agreement, Grantor 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 Property or any part thereof (the "OTHER
Charges"), before delinquency; PROVIDED, however, that Grantor's obligation to
directly pay Taxes shall be suspended for so long as Grantor complies with the
terms and provisions of Section 7.3 of the Loan Agreement.
5. CONDEMNATION.
(a) Grantor shall promptly give Beneficiary 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 Beneficiary copies of any and all papers
served in connection with such Condemnation. Following the occurrence of a
Condemnation, Grantor, 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) Beneficiary is hereby irrevocably appointed as Grantor'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 Deed of Trust 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), Grantor shall continue to pay the Debt at the time and in the
manner provided for in the Note, the Loan Agreement, this Deed of Trust 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 Beneficiary to expenses
of collecting the Award and to discharge of the Debt. Beneficiary 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) Grantor does hereby irrevocably, absolutely and
unconditionally assign to Beneficiary, its successors and assigns, all of
Grantor's right, title and interest in and to all current and future Leases and
Rents, it being intended by Grantor that this assignment constitutes a present,
absolute and unconditional assignment and not an
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assignment for additional security only. Such assignment to Beneficiary shall
not be construed to bind Beneficiary to the performance of any of the covenants,
conditions or provisions contained in any such Lease or otherwise impose any
obligation upon Beneficiary. Grantor agrees to execute and deliver to
Beneficiary such additional instruments, in form and substance satisfactory to
Beneficiary, as may hereafter be requested by Beneficiary to further evidence
and confirm such assignment. Nevertheless, subject to the terms of this
Paragraph, Beneficiary grants to Grantor 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 Beneficiary for
deposit into an account designated and established by Beneficiary to secure
repayment of the Debt, all in accordance with the terms, covenants and
conditions contained in the Loan Agreement. Any Rents collected by Grantor shall
be held by Grantor in trust for the benefit of Beneficiary for use in the
payment of the Debt. Upon the occurrence of an Event of Default (as hereinafter
defined), without the need for notice or demand, the license granted to Grantor
herein shall automatically be revoked, and Beneficiary shall immediately be
entitled to take possession of the Leases and receive and apply all Rents,
whether or not Beneficiary enters upon or takes control of the Mortgaged
Property. Beneficiary is hereby granted and assigned by Grantor the right, at
its option, upon revocation of the license granted herein, to enter upon the
Mortgaged Property in person, by agent or by court-appointed receiver to collect
the Rents. Any Rents collected after the revocation of the license herein
granted may be applied toward payment of the Debt in such priority and
proportions as Beneficiary, in its sole discretion, shall deem proper.
Beneficiary is obligated to account only for such Rents as are actually
collected or received by Beneficiary. Neither the exercise by Beneficiary 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.
Grantor has executed the Assignment covering all of the right, title and
interest of Grantor, as landlord, in and to any Leases relating to all or
portions of the Mortgaged Property. All rights and remedies granted to
Beneficiary under the Assignment shall be in addition to and cumulative of all
rights and remedies granted to Beneficiary hereunder.
(b) Grantor shall duly and punctually comply with its
obligations under Section 5.1(t) of the Loan Agreement which sets forth certain
covenants of Grantor with regard to leasing of the Mortgaged Property.
(c) All security deposits of tenants, whether held in cash or
any other form, shall not be commingled with any other funds of Grantor and, if
cash, shall be deposited by Grantor at such commercial or savings bank or banks
as may be reasonably satisfactory to Beneficiary. Any bond or other instrument
which Grantor 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
Beneficiary, shall, if permitted pursuant to any legal requirements, name
Beneficiary as payee or mortgagee thereunder (or at Beneficiary's option, be
fully assignable to Beneficiary) and shall, in all respects, comply with any
applicable legal requirements and otherwise be reasonably satisfactory to
Beneficiary. Grantor shall, upon request, provide Beneficiary with evidence
reasonably satisfactory to Beneficiary of Grantor's compliance with the
foregoing. Following the occurrence and during the continuance of any Event of
Default, Grantor shall, upon Beneficiary's request, if permitted by any
applicable legal
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requirements, turn over to Beneficiary the security deposits (and any interest
theretofore earned thereon) with respect to all or any portion of the Mortgaged
Property, to be held by Beneficiary subject to the terms of the Leases.
7. PROPERTY MANAGEMENT AGREEMENT; LICENSES. Grantor hereby
represents and warrants to Beneficiary as follows:
(a) The Property Management Agreement, dated as of the date
hereof (the "MANAGEMENT AGREEMENT"), among Grantor, Glimcher Properties Limited
Partnership, as manager, and Glimcher Development Corporation, as services
provider, pursuant to which such manager operates the Mortgaged Property as
retail shopping centers, 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 Grantor's performance thereunder, the recordation of this Deed of Trust, nor
the exercise of any remedies by Beneficiary, will adversely affect Grantor's
rights under the 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
retail shopping centers, have been obtained and are in full force and effect.
8. MAINTENANCE OF MORTGAGED PROPERTY. Grantor 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 Beneficiary, Grantor 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, Grantor 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. Grantor 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
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all or any portion of the Mortgaged Property is or shall become a nonconforming
use, Grantor will not cause or permit such nonconforming use to be discontinued
or abandoned without the express written consent of Beneficiary. Grantor 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. Grantor will not
install or permit to be installed on the Premises any underground storage tank
without Beneficiary's prior written consent.
9. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY.
(a) Grantor acknowledges that Beneficiary, in agreeing to make
the Loan, has examined and relied on the creditworthiness and experience of
Grantor in owning and operating properties such as the Mortgaged Property, and
that Beneficiary will continue to rely on Grantor'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. Grantor acknowledges that
Beneficiary has a valid interest in maintaining the value of the Mortgaged
Property so as to ensure that, should Grantor default in the repayment of the
Debt, Beneficiary can recover all or a portion of the Debt by a sale of the
Mortgaged Property or any part thereof. Accordingly, except as permitted in the
Loan Agreement, Grantor shall not, without the prior written consent of
Beneficiary, 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 within the meaning of this Paragraph 9 shall be deemed to
include: (i) an installment sales agreement wherein Grantor 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 Grantor 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, Grantor's right, title and interest in and to any Leases
or any Rents; (iii) if Grantor or any general partner or managing member of
Grantor 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 Grantor or any general partner
or managing member of Grantor 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 Grantor 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 a controlling interest
of any person having a direct legal or beneficial ownership in
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Grantor, including any legal or beneficial interest in any constituent partner
or member of Grantor; (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 Grantor or any general partner or
managing member of Grantor or the merger or consolidation of Grantor or any
general partner or managing member of Grantor with any other person.
(c) Beneficiary 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 Grantor's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property or any part thereof without Beneficiary's consent. This
provision shall apply to every sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property or any part thereof
regardless of whether voluntary or not, or whether or not Beneficiary has
consented to any previous sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Mortgaged Property or any part thereof.
(d) Beneficiary's consent to one sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Mortgaged Property or any part
thereof shall not be deemed to be a waiver of Beneficiary'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
or any part thereof 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 Deed of Trust 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 Beneficiary's
interest in the Mortgaged Property, Grantor will pay such tax, with interest and
penalties thereon, if any. In the event Beneficiary is advised by counsel chosen
by it that the payment of such tax or interest and penalties by Grantor would be
unlawful or taxable to Beneficiary or unenforceable or provide the basis for a
defense of usury, then, in any such event, Beneficiary shall have the option, by
written notice to Grantor of not less than ninety (90) days, to declare the Debt
immediately due and payable.
11. NO CREDITS ON ACCOUNT OF THE DEBT. Grantor 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 Deed of Trust or the Debt. In the event such
claim, credit or deduction shall be required by law, Beneficiary 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 Deed of Trust, or
impose any intangible tax or
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any other tax or charge on the same, Grantor 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 Grantor and Beneficiary at all times to comply with
applicable state law or applicable United States federal law (to the extent that
it permits Beneficiary 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 Deed of Trust 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 Beneficiary's exercise of the option to accelerate
the maturity of the Note or any prepayment by Grantor results in Grantor having
paid any interest in excess of that permitted by applicable law, then it is
Grantor's and Beneficiary's express intent that all excess amounts theretofore
collected by Beneficiary shall be credited on the principal balance of the Note
and all other Debt and the provisions of the Note, this Deed of Trust 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 Beneficiary 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. Grantor shall observe and
perform each and every term to be observed or performed by Grantor pursuant to
the terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property.
15. FURTHER ACTS, ETC. Grantor will, at the cost of Grantor,
and without expense to Beneficiary, 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 Beneficiary shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring
and confirming unto Beneficiary the property and rights hereby granted,
bargained, sold, conveyed, assigned, transferred and mortgaged or intended now
or hereafter so to be, or which Grantor may be or may hereafter become bound to
convey or assign to Beneficiary, or for carrying out the intention or
facilitating the performance of the terms of this Deed of Trust or for filing,
registering or recording this Deed of Trust or for facilitating the sale and
transfer of the Loan and the Loan Documents as described in Section 9.1 of the
Loan Agreement. Grantor, on demand, will execute and deliver, and Grantor hereby
authorizes Beneficiary to execute in the name of Grantor or without the
signature of Grantor to the extent
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Beneficiary may lawfully do so, one or more financing statements, chattel
mortgages or other instruments to evidence more effectively the security
interest of Beneficiary in the Mortgaged Property. Upon foreclosure, the
appointment of a receiver or any other relevant action, Grantor will, at the
cost of Grantor and without expense to Beneficiary, 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. Grantor grants to Beneficiary an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
any and all rights and remedies available to Beneficiary at law and in equity,
including, without limitation, such rights and remedies available to Beneficiary
pursuant to this Paragraph.
16. RECORDING OF DEED OF TRUST, ETC. Grantor forthwith upon
the execution and delivery of this Deed of Trust and thereafter, from time to
time, will cause this Deed of Trust 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 Beneficiary in, the Mortgaged Property. Grantor
will pay all filing, registration or recording fees, and all expenses incident
to the preparation, execution and acknowledgment, of this Deed of Trust, any
deed of trust 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 Deed of
Trust, any deed of trust 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. Grantor shall hold harmless and indemnify
Beneficiary, its successors and assigns, against any liability incurred by
reason of the imposition of any tax on the making and recording of this Deed of
Trust.
17. REPORTING REQUIREMENTS. Grantor agrees to give prompt
notice to Beneficiary of the insolvency or bankruptcy filing of Grantor or any
general partner or managing member of Grantor.
18. EVENTS OF DEFAULT. The Debt shall become immediately due
and payable at the option of Beneficiary 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 Beneficiary within ten (10) days of request;
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(d) except as expressly permitted in Section 6.1(j) of the
Loan Agreement and this Deed of Trust, Grantor transfers or encumbers any
portion of the Mortgaged Property or any interest therein without Beneficiary's
prior written consent;
(e) any representation or warranty of Grantor made herein or
in any other Loan Document or in any certificate, report, financial statement or
other instrument, agreement or document furnished to Beneficiary 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 Lender;
(f) Grantor shall make an assignment for the benefit of
creditors;
(g) a receiver, liquidator or trustee shall be appointed for
Grantor or Grantor 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 Grantor or any proceeding for the dissolution
or liquidation of Grantor shall be instituted; PROVIDED, however, that if such
appointment, adjudication, petition or proceeding was involuntary and not
consented to by Grantor, 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) Grantor shall be in default under any other deed of trust
or security agreement covering any part of the Mortgaged Property whether it be
superior or junior in lien to this Deed of Trust;
(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 Beneficiary, cash or other
security satisfactory to Beneficiary 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 from the Mortgaged
Property within such sixty (60) days;
(j) Grantor 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 Grantor 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
Grantor 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
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be extended for such time as is reasonably necessary for Grantor in the exercise
of due diligence to cure such violation, such additional period not to exceed
ninety (90) days;
(k) except as expressly permitted in this Deed of Trust 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 Beneficiary;
(l) without Beneficiary's prior consent and except as
permitted in the Loan Agreement, (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) except as otherwise permitted in the Loan Agreement, a
default has occurred and continues beyond any applicable cure period under the
Property Management Agreement (or any property successor management agreement)
if such default permits the manager to terminate or cancel the Property
Management Agreement (or any successor property management agreement);
(n) Grantor ceases to do business as retail shopping centers
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) Grantor fails to cure a default under any other term,
covenant or provision of this Deed of Trust not specified in clauses (a) through
(n) above, within ten (10) days after Grantor first receives notice of such
default in the case of any default which can be cured by the payment of a sum of
money only or within thirty (30) days after Grantor 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 Grantor 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 Grantor in the exercise of due
diligence to cure such default, such additional period not to exceed ninety (90)
days; or
(p) Grantor 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 Grantor 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 Beneficiary 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, Grantor shall pay to Beneficiary 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
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expenses incurred by Beneficiary in handling and processing such delinquent
payment and to compensate Beneficiary for the loss of the use of such delinquent
payment, and such amount shall be secured by this Deed of Trust.
(b) Upon the occurrence of an Event of Default, Grantor shall
pay to Beneficiary interest on the entire unpaid principal amount of the Note
and any other amounts due (including interest to the extent permitted by
applicable law) at the Default Rate (as defined in the Loan Agreement) and all
interest payable pursuant to this paragraph shall be secured by this Mortgage.
20. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event
of Default or if Grantor fails to make any payment or to do any act as herein
provided, Beneficiary may, but without any obligation to do so and without
notice to or demand on Grantor and without releasing Grantor from any obligation
hereunder, make or do the same in such manner and to such extent as Beneficiary
may deem necessary to protect the security hereof. Beneficiary 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 Deed of Trust or collect the Debt, and the cost and expense
thereof (including reasonable attorneys' fees and disbursements to the extent
permitted by law), with interest at the Default Rate (as defined in the Loan
Agreement) for the period from the date such cost or expense was incurred by
Beneficiary to the date of payment to Beneficiary, shall constitute a portion of
the Debt, shall be secured by this Deed of Trust and the other Loan Documents
and shall be due and payable to Beneficiary 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,
Beneficiary shall have the right, forthwith, at Beneficiary's election, by and
through the Trustee or otherwise, to exercise any and all rights and remedies
granted to Beneficiary under this Deed of Trust, the Note, the Loan Agreement or
any of the other Loan Documents or otherwise available to Beneficiary at law or
in equity, all of which rights and remedies shall be cumulative and not
exclusive, and which shall include, without limitation, the following:
(i) Beneficiary shall have the right forthwith, at
Beneficiary's election, by and through the Trustee or otherwise, to
declare the entire indebtedness of Grantor under the Note immediately
due and payable; and, in any such case, the prepayment premium, if any,
which would have been applicable to a voluntary prepayment of such
indebtedness at the time of such declaration by Beneficiary shall be
treated as part of the indebtedness secured hereby and added to and
become a part of the principal thereof.
(ii) Beneficiary shall have the right, forthwith,
at Beneficiary's election, by and through the Trustee or otherwise, and
without further notice or demand and without the commencement of any
action to foreclose this Deed of Trust, to enter immediately upon and
take possession of the Mortgaged Property
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<PAGE> 17
without further consent or assignment by Grantor, with the right to
lease the Mortgaged Property, or any part thereof, and to collect and
receive all of the Rents and all other amounts past due, due or to
become due to Grantor by reason of Grantor's ownership of the Mortgaged
Property, and to apply the same, after the payment of all necessary
charges and expenses in connection with the operation of the Mortgaged
Property (including any managing agent's commission, at the option of
Beneficiary), on account of interest and principal amortization under
the Note, taxes, payments in lieu of taxes, water and sewer charges,
assessments and insurance premiums with respect to the Mortgaged
Property, and any advance made by Beneficiary for improvements,
alterations or repairs to the Mortgaged Property or on account of any
other Debt hereby secured. Grantor hereby irrevocably appoints
Beneficiary as Grantor's attorney-in-fact to institute summary
proceedings against any tenant, licensee, concessionaire or other
occupant of any portion of the Mortgaged Property who shall fail to
comply with the provisions of any covenant, agreement or condition
applicable to the possession or occupancy of the Mortgaged Property by
such tenant, licensee, concessionaire or other occupant. If Grantor or
any other person claiming by, through or under Grantor is occupying all
or any part of the Mortgaged Property, it is hereby agreed that Grantor
and each such other person shall, at the option of Beneficiary, either
immediately surrender possession of the Mortgaged Property to
Beneficiary and vacate the part of the Mortgaged Property so occupied
or pay a reasonable rental for the use thereof, monthly in advance, to
Beneficiary.
(iii) Beneficiary shall have the right forthwith,
at Beneficiary's election, by and through the Trustee or otherwise, to
sell or offer for sale the Mortgaged Property in such portions, order
and parcels as Beneficiary may determine, with or without having first
taken possession of same, at public auction for cash or cash
equivalent, including, without limitation, for certified checks, bank
drafts, wire transfer funds, cashier checks and any other method of
payment which, in the sole discretion of Beneficiary, is "cash
equivalent", to the highest and best bidder during legal hours, at any
front door of the county courthouse of the county in which the Premises
are situated after having advertised and given notice of said sale,
giving the time, place and terms thereof, together with a description
of the Premises according to the laws of the state where the Mortgaged
Property is located which govern sales of land under deeds of trust in
force at the time the publication of said notice has begun. If the
Premises are situated in two or more counties or in two judicial
districts of the same county, then the Trustee shall have the power, in
case the Trustee is directed to foreclose under this Deed of Trust, to
select in which county, or judicial district, the sale of all the
Mortgaged Property shall be made, and the selection shall be binding
upon Grantor and Beneficiary and all persons claiming through or under
them, whether by contract or by law. The Trustee shall have full power
to fix the day, time and place of sale, and may sell the Mortgaged
Property in parcels or as a whole as the Trustee may deem best. The
Trustee shall have full power to conduct any sale through an agent
appointed by the Trustee for such purpose, but said appointment of
agent need not be recorded. At any such sale: (A) the Trustee shall not
be
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required to have physically present, or to have constructive possession
of, the Mortgaged Property (Grantor hereby covenanting and agreeing to
deliver to the Trustee any portion of the Mortgaged Property not
actually or constructively possessed by the Trustee immediately upon
demand by the Trustee) and the title to and right of possession of any
such Mortgaged Property shall pass to the purchaser thereof as
completely as if the same had been actually present and delivered to
the purchaser at such sale; (B) the Trustee may, from time to time,
adjourn said sale to a later date without readvertising, by giving
notice of the time and place of such continued sale at the time when
and where the Trustee shall make such adjournment; (C) each and every
recital contained in any instrument of conveyance made by the Trustee
shall conclusively establish the truth and accuracy of the matters
recited therein, including, without limitation, nonpayment of the Debt
secured by this Deed of Trust, advertisement and conduct of such sale
in the manner provided herein and otherwise by law and by appointment
of any successor Trustee hereunder; (D) any and all prerequisites to
the validity of such sale shall be conclusively presumed to have been
performed; (E) the receipt of the Trustee or of such other party making
the sale shall be a sufficient discharge to the purchaser for its or
his purchase money and no such purchaser, or its or his assigns,
successors or personal representatives, shall thereafter be obligated
to see to the application of such purchase money or be in any way
answerable for any loss, misapplication or nonapplication thereof; (F)
Grantor shall be completely and irrevocably divested of all of
Grantor's right, title, interest, claim and demand whatsoever, either
at law or in equity, in and to the property sold and such sale shall be
a perpetual bar both at law and in equity against Grantor, and against
any and all other persons claiming or to claim the Mortgaged Property
sold or any part thereof; (G) Beneficiary may be a purchaser at any
such sale; and (H) the Trustee, in Beneficiary's name or as the
attorney of Grantor (the Trustee being for that purpose by this Deed of
Trust duly and irrevocably authorized and appointed as Grantor's agent
and attorney in fact, coupled with an interest and with full power of
substitution, delegation and revocation) to make, execute, acknowledge
and deliver to the purchaser or purchasers thereof a good and
sufficient deed or deeds of the Mortgaged Property in fee simple and to
receive the proceeds of such sale or sales.
Should the Mortgaged Property be sold in one or more parcels
as permitted herein, the right of sale arising out of any Event of
Default shall not be exhausted by any one or more such sales, but other
and successive sales may be made until all of the Mortgaged Property
has been sold or until the Debt secured by this Deed of Trust has been
fully satisfied.
Grantor hereby irrevocably and unconditionally waives and
releases: (A) all benefits that might accrue to Grantor by virtue of
any present or future law exempting the Mortgaged Property from
attachment, levy or sale or execution or providing for any
appraisement, valuation, stay of execution, exemption from civil
process, redemption or extension of time for payment; (B) all notices
of any Event of Default or of the Trustee's exercise of any right,
remedy or recourse provided for hereunder or under any of the other
Loan
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Documents, (unless the Loan Documents explicitly require any such
notice to be given to Grantor; and (C) any right to a marshalling of
assets or a sale in inverse order of alienation.
(iv) Beneficiary shall have the right forthwith, at
Beneficiary's election, by and through the Trustee or otherwise, to
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.
(v) Beneficiary shall have the right forthwith, at
Beneficiary's election, by and through the Trustee or otherwise, to
apply for the appointment of a trustee, receiver, liquidator or
conservator of the Mortgaged Property, without notice and without
regard for the adequacy of the security for the Debt and without regard
for the solvency of Grantor or of any person, firm or other entity
liable for the payment of the Debt.
(vi) Beneficiary shall have the right forthwith, at
Beneficiary's election, by and through the Trustee or otherwise, to
notify the account debtors and obligors of any accounts, chattel paper,
negotiable instruments or other evidences of indebtedness to Grantor
included in the Mortgaged Property to pay Beneficiary directly.
(b) The proceeds of any sale made under or by virtue of this
Paragraph, together with any other sums which then may be held by Beneficiary
under this Deed of Trust, whether under the provisions of this Paragraph or
otherwise, shall be applied by Beneficiary to the payment of the Debt in such
priority and proportion as Beneficiary in its sole discretion shall deem proper.
(c) Upon any sale made under or by virtue of this Paragraph,
whether made under a power of sale or under or by virtue of judicial proceedings
or of a judgment or decree of foreclosure and sale, Beneficiary 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 Beneficiary is authorized to deduct under
this Deed of Trust or by law.
(d) No recovery of any judgment by Beneficiary and no levy of
an execution under any judgment upon the Mortgaged Property or upon any other
property of Grantor shall affect in any manner or to any extent the lien of this
Deed of Trust upon the Mortgaged Property or any part thereof, or any liens,
rights, powers or remedies of Beneficiary hereunder, but such liens, rights,
powers and remedies of Beneficiary shall continue unimpaired as before.
(e) Beneficiary may resort to any remedies and the security
given by the Note, this Deed of Trust or any of the other Loan Documents, in
whole or in part, and in such portions and in such order as determined by
Beneficiary in Beneficiary's sole discretion. No such action shall in any way be
considered a waiver of any rights, benefits
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or remedies evidenced or provided by the Note, this Deed of Trust or any of the
other Loan Documents. The failure of Beneficiary to exercise any right, remedy
or option provided in the Note, this Deed of Trust 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 Deed of Trust or any of the
other Loan Documents. No acceptance by Beneficiary of any payment after the
occurrence of any Event of Default and no payment by Beneficiary of any
obligation for which Grantor is liable hereunder shall be deemed to waive or
cure any Event of Default with respect to Grantor, or Grantor's liability to pay
such obligation. No sale of all or any portion of the Mortgaged Property, no
forbearance on the part of Beneficiary and no extension of time for the payment
of the whole or any portion of the Debt, or any other indulgence given by
Beneficiary to Grantor, shall operate to release or in any manner affect the
interest of Beneficiary in the remaining Mortgaged Property or the liability of
Grantor to pay the Debt. No waiver by Beneficiary shall be effective unless it
is in writing and then only to the extent specifically stated. All costs and
expenses of Beneficiary 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 Grantor immediately upon notice from
Beneficiary, with interest at the Default Rate from the date incurred by
Beneficiary until repaid by Grantor, and such costs and expenses, with interest
as aforesaid, shall constitute a portion of the Debt and shall be secured by
this Deed of Trust.
(f) The interests and rights of Beneficiary under the Note,
this Deed of Trust or any of the other Loan Documents shall not be impaired by
any indulgence, including (i) any renewal, extension or modification which
Beneficiary may grant with respect to any of the Debt, (ii) any surrender,
compromise, release, renewal, extension, exchange or substitution which
Beneficiary 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.
(g) In case Beneficiary or the Trustee, on behalf of
Beneficiary, shall have proceeded to invoke any right, remedy or recourse
permitted hereunder or under any of the other Loan Documents and shall hereafter
elect to discontinue or abandon the same for any reason, Beneficiary or the
Trustee, on behalf of Beneficiary, as applicable, shall have the unqualified
right so to do and, in such event, Grantor, Beneficiary and the Trustee shall be
restored to their former positions with respect to the Debt secured hereby, this
Deed of Trust, the Loan Documents, the Mortgaged Property and otherwise, and the
rights, remedies, recourses and powers of Beneficiary and the Trustee, on behalf
of Beneficiary, shall continue as if the same had never been invoked.
22. RIGHT OF ENTRY. In addition to any other rights or
remedies granted under this Deed of Trust, Beneficiary 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 Grantor should Beneficiary
determine that an Event of Default exists, including the cost of all follow up
or additional investigations or inquiries deemed reasonably necessary by
Beneficiary. The cost of such inspections, if not paid for by Grantor
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following demand, may be added to the principal balance of the sums due under
the Note and this Deed of Trust and shall bear interest thereafter until paid at
the Default Rate.
23. SECURITY AGREEMENT.
(a) This Deed of Trust is both a real property deed of trust
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 Grantor in
the Mortgaged Property. Grantor by executing and delivering this Deed of Trust
has granted and hereby grants to Beneficiary, 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"). Grantor hereby agrees
with Beneficiary to execute and deliver to Beneficiary, in form and substance
satisfactory to Beneficiary, such financing statements and such further
assurances as Beneficiary may from time to time reasonably consider necessary to
create, perfect and preserve Beneficiary's security interest herein granted.
This Deed of Trust shall also constitute a "fixture filing" for the purposes of
the Uniform Commercial Code. As such, this Deed of Trust 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 Deed of Trust.
If an Event of Default shall occur, Beneficiary, in addition to any other rights
and remedies which it may have, shall have and may exercise, immediately and
without demand, any and all rights and remedies granted to a secured party upon
default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Collateral or
any part thereof and to take such other measures as Beneficiary may deem
necessary for the care, protection and preservation of the Collateral. Upon
request or demand of Beneficiary, Grantor shall at its expense assemble the
Collateral and make it available to Beneficiary at a convenient place acceptable
to Beneficiary. Grantor shall pay to Beneficiary on demand any and all expenses,
including attorneys' fees and disbursements, incurred or paid by Beneficiary 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 Beneficiary to the payment of
the Debt in such priority and proportions as Beneficiary in its sole discretion
shall deem proper. In the event of any change in name, identity or structure of
any Grantor, such Grantor shall notify Beneficiary thereof and promptly after
request shall execute, file and record such Uniform Commercial Code forms as are
necessary to maintain the priority of Beneficiary'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 Beneficiary shall require the filing
or recording of additional Uniform Commercial Code forms or continuation
statements, Grantor shall, promptly after request, execute, file and record such
Uniform Commercial Code forms or continuation statements as Beneficiary shall
deem necessary, and shall pay all expenses and fees in connection with the
filing and recording thereof. Grantor hereby irrevocably appoints Beneficiary 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
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Beneficiary, as secured party, in connection with the Collateral covered by this
Deed of Trust.
(b) Upon an Event of Default Beneficiary shall have the right,
at Beneficiary's opinion, by and through the Trustee or otherwise:
(i) To proceed as to both the real and personal
property covered by this Deed of Trust in accordance with Beneficiary'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 Grantor 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.
24. ACTIONS AND PROCEEDINGS. Beneficiary 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 Grantor, which Beneficiary, in its sole discretion, decides should be
brought to protect their interest in the Mortgaged Property. Beneficiary 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.
25. WAIVER OF SETOFF AND COUNTERCLAIM. All amounts due under
this Deed of Trust, the Note and the other Loan Documents shall be payable
without setoff, counterclaim (except for compulsory counterclaims), or any
deduction whatsoever. Grantor hereby waives the right to assert a setoff,
counterclaim (except on compulsory counterclaims) or deduction in any action or
proceeding in which Beneficiary is a participant, or arising out of or in any
way connected with this Deed of Trust, the Note, any of the other Loan
Documents, or the Debt.
26. RECOVERY OF SUMS REQUIRED TO BE PAID. Beneficiary 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 Beneficiary thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Grantor existing at the time such earlier
action was commenced.
27. MARSHALLING AND OTHER MATTERS.
(a) Grantor 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
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<PAGE> 23
Mortgaged Property or any part thereof or any interest therein. Further, Grantor
hereby expressly waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Deed of Trust on behalf of Grantor and on
behalf of each and every person acquiring any interest in or title to the
Mortgaged Property subsequent to the date of this Deed of Trust and on behalf of
all persons to the extent permitted by applicable law. To the extent permitted
by law, Grantor 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 Beneficiary under the terms of this Deed of Trust to a sale of the
Mortgaged Property or any part thereof, for the collection of the Debt without
any prior or different resort for collection, or the right of Beneficiary under
the terms of this Deed of Trust to the payment of the Debt out of the proceeds
of sale of the Mortgaged Property or any part thereof in preference to every
other claimant whatever. Further, Grantor 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 Deed of Trust or to collect any of the Debt secured hereby to
the fullest extent permitted by law.
(b) Grantor acknowledges and agrees that the lien of this Deed
of Trust shall be absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions whatsoever of Beneficiary and,
without limiting the generality of the foregoing, the lien hereof shall not be
impaired by any acceptance by Beneficiary of any other security for any portion
of the Debt, or by any failure, neglect or omission on the part of Beneficiary
to realize upon or protect any portion of the Debt or any collateral security
therefor. The lien of this Deed of Trust shall not in any manner be impaired or
affected by any release (except as to the 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 Beneficiary may foreclose, or exercise any
other remedy available to Beneficiary, without first exercising or enforcing any
of its remedies under this Deed of Trust and any exercise of the rights and
remedies of Beneficiary hereunder shall not in any manner impair the Debt or any
of Beneficiary's rights and remedies hereunder.
28. HAZARDOUS SUBSTANCES. Grantor hereby represents and
warrants to Beneficiary that except as set forth in the environmental report
delivered to Beneficiary 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
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<PAGE> 24
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 Grantor, no Hazardous Substances are or have been
(including the period prior to Grantor'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 Grantor, 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 Grantor, no underground storage tanks exist on the Mortgaged
Property. So long as Grantor owns or is in possession of the Mortgaged Property,
Grantor: (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
Beneficiary in writing if Grantor shall become aware of any Hazardous Substances
on or near the Mortgaged Property and/or if Grantor shall become aware that the
Mortgaged Property is in direct or indirect violation of any Environmental Laws
and/or if Grantor 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 Beneficiary 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 Beneficiary), promptly after
Grantor becomes aware of the same, at Grantor's sole expense. The obligations
and liabilities of Grantor under this Paragraph 28 shall survive any
termination, satisfaction or assignment of this Deed of Trust and the exercise
by Beneficiary 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. Grantor shall
give prompt written notice to Beneficiary 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 Grantor or the Mortgaged Property relating to any loss or
injury resulting from any Hazardous Substance; and (c) Grantor's discovery of
any occurrence or condition on any real property adjoining or in the vicinity of
the
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Mortgaged Property that could cause the Mortgaged Property to be subject to
any investigation or clean-up pursuant to any Environmental Law. Grantor shall
permit Beneficiary 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 Grantor shall
pay all attorneys' fees and disbursements incurred by Beneficiary in connection
therewith. Upon Beneficiary's request, at any time and from time to time while
this Deed of Trust is in effect, Grantor shall provide, at Grantor'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 Beneficiary 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
Beneficiary may not require Grantor to provide such inspection or audit unless:
(i) Beneficiary is required by law to obtain such inspection or audit, (ii) such
inspection or audit is requested by Beneficiary in conjunction with a
foreclosure or other enforcement proceeding under the Loan Documents, or (iii)
Beneficiary 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 Grantor fails to provide any such inspection
or audit within sixty (60) days after such request, Beneficiary may order same,
and Grantor hereby grants to Beneficiary 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, Grantor shall cause such operations and maintenance
plan to be prepared and implemented at Grantor's expense upon request of
Beneficiary. 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 Deed of Trust in connection with any
Hazardous Substance (the "REMEDIAL WORK"), Grantor shall commence and thereafter
diligently prosecute to completion all such Remedial Work within thirty (30)
days after written demand by Beneficiary 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 Beneficiary and
under the supervision of a consulting engineer approved by Beneficiary. All
costs and expenses of such Remedial Work shall be paid by Grantor, including,
without limitation, Beneficiary's reasonable attorneys' fees and disbursements
incurred in connection with monitoring or review of such Remedial Work. In the
event Grantor shall fail to timely commence, or cause to be commenced, or fail
to diligently prosecute to completion, such Remedial Work, Beneficiary 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.
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(a) Grantor 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 Beneficiary's approval of alterations of the Mortgaged
Property, Grantor shall not alter the Mortgaged Property in any manner which
would increase Grantor's responsibilities for compliance with the applicable
Access Laws without the prior written approval of Beneficiary. The foregoing
shall apply to tenant improvements constructed by Grantor or by any of its
tenants. Beneficiary may condition any such approval upon receipt of a
certificate of Access Law compliance from an architect, engineer or other person
acceptable to Beneficiary.
(c) Grantor agrees to give prompt written notice to
Beneficiary of the receipt by Grantor 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, Grantor shall protect, defend,
indemnify and hold harmless Beneficiary from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including, without limitation, reasonable attorneys'
fees and disbursements), imposed upon or incurred by or asserted against
Beneficiary (other than as a direct result of Beneficiary's fraud or wilful
misconduct) by reason of: (a) ownership of this Deed of Trust, 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 Grantor to
perform or comply with any of the terms of this Deed of Trust; (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
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any Access Laws; (i) any representation or warranty made in the Note, this Deed
of Trust 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
Beneficiary 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
Beneficiary, 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
Beneficiary receiving less than the full amount of all principal, interest and
other sums payable by Grantor 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 Beneficiary. Any amounts payable to Beneficiary by
reason of the application of this Paragraph shall be secured by this Deed of
Trust and shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Beneficiary until
paid. The obligations and liabilities of Grantor under this Paragraph 31 shall
survive any termination, satisfaction or assignment of this Deed of Trust and
the exercise by Beneficiary 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. Grantor (and the undersigned representative of
Grantor, 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 Deed of Trust 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 Deed of Trust on Grantor's part to be
performed; and Grantor represents and warrants that Grantor 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. Grantor shall not be entitled to any
notices of any nature whatsoever from Beneficiary except with respect to matters
for which the
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Loan Documents specifically and expressly provide for the giving of notice by
Beneficiary to Grantor and except with respect to matters for which Beneficiary
is required by applicable law to give notice. To the extent permitted by
applicable law, Grantor hereby expressly waives the right to receive any notice
from Beneficiary with respect to any matter for which this Deed of Trust does
not specifically and expressly provide for the giving of notice by Beneficiary
to Grantor.
35. REMEDIES OF GRANTOR. In the event that a claim or
adjudication is made that Beneficiary has acted unreasonably or unreasonably
delayed acting in any case where by law or under the Note, this Deed of Trust or
the other Loan Documents it has an obligation to act reasonably or promptly,
Beneficiary shall not be liable for any monetary damages, and Grantor's remedies
shall be limited to injunctive relief or declaratory judgment.
36. SOLE DISCRETION OF BENEFICIARY. Wherever pursuant to this
Deed of Trust, Beneficiary 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 Beneficiary, the decision of Beneficiary 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 Beneficiary
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
37. NON-WAIVER. The failure of Beneficiary to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Deed of Trust. Grantor shall not be relieved of Grantor's
obligations hereunder by reason of: (a) the failure of Beneficiary to comply
with any request of Grantor or to take any action to foreclose this Deed of
Trust or 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 Beneficiary extending the time of payment or otherwise modifying
or supplementing the terms of the Note, the Loan Agreement, this Deed of Trust
or any of the other Loan Documents. Beneficiary may resort for the payment of
the Debt to any other security held by Beneficiary in such order and manner as
Beneficiary, in its sole discretion, may elect. Beneficiary may take action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Beneficiary thereafter to foreclosure this
Deed of Trust. The rights and remedies of Beneficiary under this Deed of Trust
shall be separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Beneficiary shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision. Beneficiary 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 Deed of Trust, 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 Grantor or
Beneficiary, but only by an
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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 Deed of
Trust as Grantor, the obligations and liabilities of each such person hereunder
shall be joint and several. Subject to the provisions hereof requiring
Beneficiary's consent to any transfer of the Mortgaged Property, this Deed of
Trust shall be binding upon and inure to the benefit of Grantor and Beneficiary
and their respective successors and assigns.
40. INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Note or this Deed of Trust is held to be invalid, illegal or
unenforceable in any respect, the Note and this Deed of Trust shall be construed
without such provision.
41. HEADINGS, ETC. The headings and captions of various
paragraphs of this Deed of Trust 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 Deed of Trust 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 Deed of Trust may be used interchangeably in singular or plural form and
(a) the word "GRANTOR" shall mean "each Grantor and any subsequent owner or
owners of the Mortgaged Property or any part thereof or any interest therein,"
(b) the word "BENEFICIARY" shall mean "Beneficiary and any subsequent holder of
this Deed of Trust," (c) the word "NOTE" shall mean "the Note and any other
evidence of indebtedness secured by this Deed of Trust," (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 reasonable attorneys' fees, paralegal and law
clerk fees, including, without limitation, fees at the pre-trial, trial and
appellate levels, incurred or paid by Beneficiary 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. Beneficiary shall have the right to assign or
transfer its rights under this Deed of Trust without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded Beneficiary under this
Deed of Trust.
45. WAIVER OF JURY TRIAL. GRANTOR 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
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WITH REGARD TO THE NOTE, THIS DEED OF TRUST 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 GRANTOR,
AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO
WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. BENEFICIARY IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY GRANTOR.
46. MISCELLANEOUS.
(a) Any consent or approval by Beneficiary in any single
instance shall not be deemed or construed to be Beneficiary's consent or
approval in any like matter arising at a subsequent date, and the failure of
Beneficiary 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 Beneficiary be estopped from exercising such right,
power, remedy, consent or approval at a later date. Any consent or approval
requested of and granted by Beneficiary pursuant hereto shall be narrowly
construed to be applicable only to Grantor 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
Beneficiary a venturer or partner with Grantor nor shall privity of contract be
presumed to have been established with any such third party. If Beneficiary
deems it to be in its best interest to retain 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, Grantor shall reimburse Beneficiary for all out of pocket
costs (except after an Event of Default, Grantor shall reimburse Lender for all
costs and expenses) reasonably incurred in connection with the employment of
such persons, firms or corporations.
(b) Grantor covenants and agrees that during the term of this
Deed of Trust, unless Beneficiary shall have previously consented in writing:
(i) Grantor 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 Grantor to constitute "plan assets" of one or
more such plans within the meaning of 29 C.F.R. Section 2510.3-101; and (ii)
Grantor 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 Grantor to state statutes regulating investments
of, and fiduciary obligations with respect to, governmental plans. Grantor 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
Beneficiary its written assumption of the obligations of the foregoing
covenants. Grantor further covenants and agrees to protect, defend, indemnify
and hold Beneficiary 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
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Beneficiary may incur as a result of Grantor's breach of the foregoing
covenants. These covenants and indemnity shall survive the extinguishment of the
lien of this Deed of Trust by foreclosure or action in lieu thereof provided
such indemnity relates to facts in existence prior to the extinguishment of the
lien of this Deed of Trust. In addition, the foregoing indemnity shall be a
recourse obligation of Grantor and shall supersede any limitations on Grantor's
liability under any of the Loan Documents.
(c) The Loan Documents contain the entire agreement between
Grantor and Beneficiary 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 Deed of Trust.
(e) Grantor represents and warrants to Beneficiary that there
has not been committed by Grantor, to Grantor's knowledge, or any other person
in occupancy of or involved with the operation or use of the Mortgaged Property
any act or omission affording the federal government or any state or local
government the right of forfeiture as against the Mortgaged Property or any part
thereof or any monies paid in performance of Grantor's obligations under the
Note or under any of the other Loan Documents. Grantor 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, Grantor
hereby indemnifies Beneficiary and agrees to defend and hold Beneficiary
harmless from and against any loss, damage or injury by reason of the breach of
the covenants and agreements or the representations and warranties set forth in
this Paragraph. Without limiting the generality of the foregoing, the filing of
formal charges or the commencement of proceedings against Grantor 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 Grantor's obligations under the Loan Documents is a potential
result, shall, at the election of Beneficiary, constitute an Event of Default
hereunder without notice or opportunity to cure.
(f) The relationship between Grantor and Beneficiary under the
Loan Documents 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.
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(i) This document may be construed as a deed of trust,
mortgage, 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 Grantor or the general partners, members or principals in Grantor, or
their respective creditors or property, Beneficiary, 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 Beneficiary 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 Grantor hereunder after such date.
47. DEFEASANCE. Provided no Event of Default exists, this Deed
of Trust may be satisfied and discharged of record by Grantor prior to the
maturity date of the Debt set forth in Paragraph 48 below only in accordance
with the terms and provisions set forth in Sections 2.3 and 2.4 of the Loan
Agreement and upon satisfaction by Grantor of all the terms and conditions
continued therein.
48. MATURITY DATE. The maturity date of the Debt secured
hereby is the Stated Maturity Date.
49. FUTURE ADVANCES. This Deed of Trust secures such future or
additional advances as may be made by Beneficiary or the holder hereof, at its
exclusive option, to Grantor 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 Deed of Trust and this Deed of Trust shall
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 Deed of Trust.
It is agreed that any additional sum or sums advanced by Beneficiary 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 Deed of Trust,
whether or not such additional loans or advances are evidenced by other
promissory notes or other guaranties of Grantor and whether or not identified by
a recital that it or they are secured by this Deed of Trust. 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 Deed of Trust.
50. AFTER-ACQUIRED PROPERTY. All property acquired by Grantor
after the date of this Deed of Trust which by the terms of this Deed of Trust
shall be subject to the lien and/or the security interest created hereby, shall
immediately upon the acquisition thereof by Grantor and without any further
mortgage, conveyance or assignment become subject to the lien and security
interest created by this Deed of Trust. Nevertheless, Grantor shall execute,
acknowledge, deliver and record or file, as appropriate, all and
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every such further mortgages, security agreements, financing statements,
assignments and assurances as Beneficiary shall require for accomplishing the
purposes of this Deed of Trust.
51. CERTAIN RETAIL COVENANTS. Grantor further covenants and
agrees with Beneficiary as follows:
(a) Grantor shall:
(i) promptly perform and/or observe all of the
covenants and agreements required to be performed and observed by it
under the Management Agreement and do all things necessary to preserve
and to keep unimpaired its material rights thereunder;
(ii) promptly notify Beneficiary in writing of any
default under the Management Agreement of which it is aware;
(iii) promptly deliver to Beneficiary 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) Grantor shall not, without Beneficiary's prior written
consent:
(i) surrender, terminate or cancel the Management
Agreement or otherwise replace the manager under the Management
Agreement or enter into any other management agreements with respect to
the Mortgaged Property, PROVIDED, however, that Grantor may terminate
or cancel the Management Agreement in accordance with the terms thereof
so long as, prior to such termination or cancellation, Grantor has
selected a replacement manager and such replacement manager has been
approved by Beneficiary;
(ii) reduce or consent to the reduction of the term
of the Management Agreement;
(iii) increase or consent to the increase of the
amount of any charges under the Management Agreement; or
(iv) otherwise modify, change, supplement, alter or
amend, or waive or release any of its rights and remedies under, the
Management Agreement in any material respect which adversely effects
Grantor's rights thereunder or Beneficiary's interest in the Mortgaged
Property.
(c) Grantor shall not, without Beneficiary's prior written
consent, enter into transactions with any affiliate, including, without
limitation, any arrangement
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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 Grantor if the monetary or business
consideration arising therefrom would be substantially as advantageous to
Grantor as the monetary or business consideration that Grantor would obtain in a
comparable transaction with a person not an affiliate of Grantor.
(d) Grantor will enter into and cause the manager to enter
into an assignment and subordination of the Management Agreement in form
satisfactory to Beneficiary, assigning to Beneficiary all of Grantor's rights
and interest under the Management Agreement and subordinating the manager's
interest in the Mortgaged Property and all fees and other rights of the manager
pursuant to the Management Agreement to this Deed of Trust and the other Loan
Documents and the rights of Beneficiary hereunder and thereunder. If a monetary
default or an Event of Default shall occur, Grantor, at Beneficiary's request
made at any time while such monetary default or such Event of Default is
continuing, shall terminate the Management Agreement and replace the manager
with a manager approved by Beneficiary on terms and conditions satisfactory to
Beneficiary.
52. LOCAL LAW. Annexed hereto as EXHIBIT B are additional
provisions which shall be deemed incorporated herein by reference. In the event
of any inconsistencies between the provisions of this Deed of Trust and the
provisions of EXHIBIT B, the provisions of EXHIBIT B shall control and be
binding.
53. THE TRUSTEE.
(a) It shall be no part of the duty of Trustee to see to any
recording, filing or registration of this Deed of Trust or any other instrument
in addition or supplemental hereto, or to give any notice thereof, or to see to
the payment of or be under any duty in respect of any tax or assessment or other
governmental charge which may be levied or assessed on the Mortgaged Property,
or any part thereof, or against Grantor, or to see to the performance or
observance by Grantor of any of the covenants and agreements contained herein.
Trustee shall not be responsible for the execution, acknowledgement or validity
of this Deed of Trust or of any instrument in addition or supplemental hereto or
for the sufficiency of the security purported to be created hereby, and makes no
representation in respect thereof or in respect of the rights of Beneficiary.
Trustee shall have the right to advice of counsel upon any matters arising
hereunder and shall be fully protected in relying as to legal matters on the
advice of counsel. Trustee shall not incur any personal liability hereunder
except for his own gross negligence or willful misconduct and Trustee shall have
the right to rely on any instrument, document or signature authorizing or
supporting any action taken or proposed to be taken by Trustee hereunder and
believed by Trustee in good faith to be genuine.
(b) Trustee may resign by an instrument in writing addressed
to Beneficiary, or Trustee may be removed at any time with or without cause by
an instrument in writing executed by Beneficiary. In case of the death,
resignation, removal or disqualification of Trustee, or if for any reason
Beneficiary shall deem it desirable to
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<PAGE> 35
appoint a substitute or successor trustee to act instead of the herein named
trustee or any substitute or successor trustee, then Beneficiary shall have the
right and is hereby authorized and empowered to appoint a successor trustee, or
a substitute trustee, without other formality than appointment and designation
in writing executed by Beneficiary, and the authority hereby conferred shall
extend to the appointment of other successor and substitute trustees
successively until the Debt secured hereby has been paid in full, or until the
Mortgaged Property is fully and finally sold hereunder. Such appointment and
designation by Beneficiary shall be full evidence of the right and authority to
make the same and of all facts therein recited. If Beneficiary is a corporation
or association and such appointment is executed in its behalf by an officer of
such corporation or association, such appointment shall be conclusively presumed
to be executed with authority and shall be valid and sufficient without proof of
any action by the board of directors or any superior officer of the corporation
or association. Upon the making of any such appointment and designation, all of
the estate and title of Trustee in the Mortgaged Property shall vest in the
named successor or substitute Trustee, and he shall thereupon succeed to and
shall hold, possess and execute all of the rights, powers, privileges,
immunities and duties herein conferred upon Trustee; but, nevertheless, upon the
written request of Beneficiary or of the successor or substitute Trustee, the
trustee ceasing to act shall execute and deliver an instrument transferring to
such successor or substitute Trustee all of the estate and title in the
Mortgaged Property of the trustee so ceasing to act, together with all the
rights, powers, privileges, immunities and duties herein conferred upon the
Trustee, and shall duly assign, transfer and deliver any of the properties and
moneys held by said trustee hereunder to said successor or substitute Trustee.
All references herein to "TRUSTEE" shall be deemed to refer to Trustee
(including any successor or substitute appointed and designated as herein
provided) from time to time acting hereunder.
(c) Trustee shall not be liable for any error of judgement or
act done by Trustee in good faith, or be otherwise responsible or accountable
under any circumstances whatsoever (including Trustee's negligence), except for
Trustee's gross negligence or willful misconduct. Trustee shall have the right
to rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by him hereunder, believed by him in good
faith to be genuine. All moneys received by Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated in any manner from any other moneys (except
to the extent required by law), and Trustee shall be under no liability for
interest on any moneys received by him hereunder. Grantor hereby ratifies and
confirms any and all acts which the herein-named Trustee or his successor or
successors, substitute or substitutes, in this trust, shall do lawfully by
virtue hereof. Grantor will reimburse Trustee for, and save him harmless
against, any and all liability and expenses which may be incurred by him in the
performance of his duties. The foregoing indemnity shall not terminate upon
discharge of the secured Debt or foreclosure, or release or other termination,
of this Deed of Trust.
54. CHOICE OF LAW. THIS DEED OF TRUST SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE WHERE THE MORTGAGED
PROPERTY IS LOCATED WITHOUT
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<PAGE> 36
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 DEED OF TRUST.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
36
<PAGE> 37
IN WITNESS WHEREOF, Grantor has executed this Deed of Trust,
Assignment of Leases and Rents and Security Agreement as of the day and year
first above written.
MORGANTOWN MALL ASSOCIATES LIMITED PARTNERSHIP,
an Ohio limited partnership
By: GLIMCHER MORGANTOWN MALL, INC., a
Delaware corporation, its general
partner
/s/ George A. Schmidt
---------------------------------------
By: George A. Schmidt
Senior Vice President
[CORPORATE SEAL]
37
<PAGE> 38
STATE OF NEW YORK,
COUNTY OF NEW YORK, to-wit:
The foregoing instrument was acknowledged before me this 1st
day of September, 1998, by George A. Schmidt, the Senior Vice President of
Glimcher Morgantown Mall, Inc., a Delaware corporation, for and on behalf of
said corporation in its capacity as the general partner of Morgantown Mall
Associates Limited Partnership, an Ohio limited partnership, for and on behalf
of said limited partnership.
My commission expires December 26, 1999.
------------------
By: /s/ Judith Tompkins
-----------------------
Notary Public
[Notarial Stamp]
This instrument was prepared by:
Samuel M. Zylberberg, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
38
<PAGE> 39
EXHIBIT A
LEGAL DESCRIPTION
39
<PAGE> 40
EXHIBIT B
---------
EXHIBIT B
(LOCAL LAW)
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT
MORGANTOWN MALL ASSOCIATES
LIMITED PARTNERSHIP, GUARANTOR
MICHAEL B. KELLAR, TRUSTEE
THE CAPITAL COMPANY OF AMERICA
LLC, BENEFICIARY
1. BENEFICIAL OWNER: At the time of the execution and
delivery of this Deed of Trust, the beneficial owner of the
Debt secured hereby is:
The Capital Company of America LLC
Two World Financial Center
Building B
New York, New York 10281
2. FUTURE ADVANCES: Notwithstanding the language of
Paragraph 49 of this Deed of Trust, this is not a credit line
deed of trust, and Beneficiary will not be making future
advances but, rather, will be advancing the entire Loan amount
at closing.
3. REMEDIES: The first full paragraph of Subparagraph
(a)(iii) of Paragraph 21 of this Deed of Trust is deleted and
the following eight subparagraphs included in lieu thereof: At
any time after the exercise by Beneficiary of the option to
declare the entire indebtedness of Grantor under the Note to
be immediately due and payable, Trustee, upon the written
request of Beneficiary, shall foreclose upon and sell the
Mortgaged Property to satisfy the Debt at public auction at
the front door of the courthouse of Monongalia County, West
Virginia, for cash or cash equivalent (including, without
limitation, for certified checks, bank drafts, wire transfer
funds, cashier checks and any other method of payment which,
in the sole discretion of Beneficiary, is "cash equivalent"),
in hand on the day of sale, after first giving notice of such
sale by publishing such notice in some newspaper of general
circulation published in the county wherein the Mortgaged
Property is located, or if there be no such newspaper, in a
qualified newspaper of general circulation in said county,
once a week for two successive weeks preceding the day of sale
and after giving notice to
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<PAGE> 41
Grantor and to any subordinate lienholder who has previously
notified Beneficiary of the existence of a subordinate lien,
at least 20 days prior to the sale, and no other notice of
such sale shall be required. Beneficiary may be a purchaser at
any such sale.
Any sale made hereunder may be adjourned from time to
time without notice other than by oral proclamation of such
adjournment at the time and place of sale, or at the time and
place of any adjourned sale.
Out of the proceeds of such sale Trustee shall pay,
first, the costs and expenses of executing this trust,
including a reasonable fee to Trustee, or to the one so
acting, as his or their commission hereunder; second, to
Beneficiary and Trustee all moneys which they or any of them
may have paid for taxes, assessments or other governmental
charges or fees, insurance, repairs, court costs, and all
other costs and expenses incurred or paid under the provisions
of this Deed of Trust, together with interest thereon at the
Default Rate from the date of payment; third, to Beneficiary
the full amount due and unpaid on the Note and all other
indebtedness hereby secured, together with all interest
accrued thereon to date of payment; and fourth, the balance,
if any, to Grantor, its successors or assigns, upon delivery
of and surrender to the purchaser or purchasers of possession
of the Mortgaged Property less the expense, if any, of
obtaining such possession.
In the event that foreclosure proceedings are
instituted hereunder but are not completed, Trustee shall be
reimbursed for all costs and expenses and a reasonable fee for
so acting in commencing and terminating such proceedings, and
all costs and expenses so incurred by Trustee, together with
interest thereon until paid at the Default Rate, and said fee
shall all be payable by Grantor on demand, and shall be and
become a part of the Debt and shall be collectible as such.
Trustee or if more than one is named as Trustee, the
"Trustees," may act in the execution of this trust, and in the
event either of Trustees shall act alone, the authority and
power of the Trustee so acting shall be as full and complete
as if the powers and authority granted to Trustees herein
jointly had been granted to such Trustee alone; and either or
both of Trustees are hereby authorized to act by agent or
attorney in the execution of this trust. It shall not be
necessary for any Trustee to be present in person at any
foreclosure sale hereunder.
It is expressly covenanted and agreed by all parties
hereto that Beneficiary may, at any time and from time to time
hereafter, without notice, appoint and substitute another
Trustee or Trustees, corporations or persons, in place of the
Trustee herein named to execute the trust herein created. Upon
such appointment, either with or without a conveyance to said
substituted Trustee or Trustees by the Trustee herein named,
or by any substituted Trustee in case the said right of
appointment is exercised more than once, the new and
substituted Trustee or Trustees in each instance shall be
vested with all the rights, titles, interests, powers, duties
and trusts in the premises which are vested in and conferred
upon the
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<PAGE> 42
Trustee herein named; and such new and substituted Trustee or
Trustees shall be considered the successors and assigns of the
Trustee who is named herein and substituted in his or her
place and stead. Each such appointment and substitution shall
be evidenced by an instrument in writing which shall recite
the parties to, and the book and page of record of, this Deed
of Trust, and the description of the real property herein
described, which instrument, executed and acknowledged by
Beneficiary or by its successors or assigns and recorded in
the office of the Clerk of the County Commission of Monongalia
County, West Virginia, shall be conclusive proof of the proper
substitution and appointment of such successor Trustee or
Trustees, and notice of such proper substitution and
appointment to all parties in interest. Notwithstanding any
other provisions hereof to the contrary, a copy of any notice
of trustee's sale under this Deed of Trust shall be served on
Grantor by certified mail, return receipt requested, directed
to Grantor at the address stated above on the first page of
this Deed of Trust or to such other address given to
Beneficiary in writing by Grantor, subsequent to the execution
and delivery of this Deed of Trust. 4. REMEDIES: Subparagraph
(b) of Paragraph 21 of this Deed of Trust is deleted. 5.
NOTICE: Paragraph 32 of this Deed of Trust is deleted and the
following language included in lieu thereof: 32. NOTICES.
Except as otherwise specifically required by the terms hereof,
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.
42
<PAGE> 1
Exhibit 10.74
Promissory Note
---------------
$130,000,000.00 September 15, 1998
New York, New York
FOR VALUE RECEIVED, the undersigned, GLIMCHER LLOYD VENTURE,
LLC, a Delaware limited liability company ("MAKER"), promises to pay to the
order of Archon Financial, L.P., a Delaware limited partnership, its successors
and assigns ("HOLDER"), on or before the Maturity Date at such place as Holder
may from time to time designate in writing, the principal sum of One Hundred
Thirty Million and 00/100 DOLLARS ($130,000,000.00) in lawful money of the
United States of America, together with interest thereon, to be computed and
paid as more particularly set forth in the Loan Agreement (as hereinafter
defined).
Except as otherwise defined or limited herein, capitalized
terms used herein shall have the meanings ascribed to them in the Loan Agreement
(the "LOAN AGREEMENT"), dated as of September ____, 1998, by and between Maker
and Holder. This is the Note referred to in the Loan Agreement. The terms of
this Note are hereby supplemented in full by the terms of the Loan Agreement,
the Deed of Trust and the other Loan Documents, including, without limitation,
with respect to Loan repayment and Breakage Costs, Prepayment Premiums, Exit
Fees, Spread Maintenance Premiums, offsets, counterclaims and defenses and
expenses of Lender.
1. PAYMENTS OF PRINCIPAL AND INTEREST
On the date hereof, Maker shall pay an installment of interest
as set forth in Section 2.3.1 of the Loan Agreement.
Commencing with the Payment Date on November 11, 1998, and on
each and every Payment Date thereafter through but excluding the Maturity Date,
Maker shall pay interest at the Applicable Interest Rate on the outstanding
principal balance hereof calculated as more fully set forth in the Loan
Agreement. Interest on the Loan shall be calculated on the basis of the actual
number of days elapsed in the Interest Accrual Period in question in a 360-day
year.
Interest on the principal sum shall begin to accrue on the
date hereof. On the Maturity Date, payment in full of all remaining obligations
of Maker under this Note, the Loan Agreement and the other Loan Documents shall
become due and payable.
Payments made at any time hereon (including payments from the
proceeds of any sale of any Collateral (as hereinafter defined) pursuant to any
of the Loan Documents) shall be applied as provided in the Loan Agreement and
the Deed of Trust. For purposes of this Note, "COLLATERAL" shall mean all
monies, accounts, instruments and other property (including, without limitation,
all rent, revenues, issues, Proceeds, profits, security and other monies payable
or receivable under any Loan Document or with respect thereto and the
after-acquired property clauses thereof) subject or intended to be subject to
the Deed of Trust and the other Loan
<PAGE> 2
Documents for the performance by Maker of its obligations thereunder or
hereunder as of any particular time, and the proceeds of the foregoing.
2. SECURITY FOR THE LOAN.
This Note is issued pursuant to the Loan Agreement, and the
Holder is and shall be entitled to the benefits thereof and remedies provided
therein and the security provided for therein including, without limitation, the
security provided by the Deed of Trust encumbering the Trust Property (as
defined in the Deed of Trust) and the Lien on and security interest in certain
other property described therein, and by other Loan Documents affecting and
granting a Lien on and security interest in other portions of the Collateral,
including but not limited to, the Assignment of Leases and the Assignment of
Agreements.
3. ACCELERATION; PREPAYMENT PREMIUMS.
The Loan Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events, and for the payment of certain prepayment premiums (if the circumstances
require) by Maker upon the terms and conditions therein specified.
4. EVENTS OF DEFAULT.
Upon the occurrence of an Event of Default, the entire
principal sum hereof outstanding, together with accrued interest hereon and all
other fees, premiums, charges, and costs due under the Loan Documents, if any,
shall, at the option of the Holder (unless otherwise specified under the Loan
Agreement), at once become due and payable without notice. Failure to exercise
the aforementioned option shall not constitute a waiver of the right to exercise
the same in the event of any subsequent Event of Default. In addition to
principal and interest, Maker agrees to pay to Holder (i) all costs of
collection incurred by Holder, including reasonable attorneys' fees and
disbursements and (ii) any other payments which may become due under the Loan
Agreement or the other Loan Documents.
5. DEFAULT INTEREST RATE.
Maker does hereby agree that, if an Event of Default shall
have occurred and is continuing, Maker shall pay interest at the Default Rate on
the outstanding amount of the Loan and due but unpaid interest thereon, upon
demand from time to time, to the extent permitted by applicable law.
6. AUTHORITY.
Maker represents that it has full power, authority and legal
right to execute and deliver this Note and to perform its obligations hereunder,
and that this Note constitutes the valid and binding obligation of Maker,
enforceable against Maker in accordance with its terms, except as enforceability
may be limited by (i) applicable bankruptcy, insolvency, reorganization,
2
<PAGE> 3
moratorium, or similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity, regardless of whether
considered in proceedings at law or in equity.
7. NOTICES.
All notices or other communications required or permitted to
be given pursuant hereto shall be given in the manner specified in the Loan
Agreement directed to the parties at their respective addresses as provided
therein.
8. CONSENT TO JURISDICTION; GOVERNING LAW.
(a) THIS NOTE WAS NEGOTIATED IN THE STATE OF NEW YORK, AND
MADE BY MAKER AND ACCEPTED BY HOLDER IN THE STATE OF NEW YORK, AND THE PROCEEDS
DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE
THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS
OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO NOTES MADE AND PERFORMED IN SUCH STATE AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. IT IS UNDERSTOOD THAT THE
LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND THE ENFORCEABILITY OF
THIS NOTE AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING HEREUNDER OR UNDER
ANY OTHER LOAN DOCUMENT (EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANOTHER LOAN
DOCUMENT). TO THE FULLEST EXTENT PERMITTED BY LAW, MAKER HEREBY UNCONDITIONALLY
AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER
JURISDICTION GOVERNS THIS NOTE.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST MAKER OR
HOLDER ARISING OUT OF OR RELATING TO THIS NOTE SHALL BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND MAKER WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING, AND MAKER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING. MAKER DOES HEREBY
DESIGNATE AND APPOINT CT CORPORATION SYSTEM WITH OFFICES AT 1633 BROADWAY, NEW
YORK, NEW YORK 10019, OR AT SUCH OTHER OFFICE IN [NEW YORK], NEW YORK, AS ITS
AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL
PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS
UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR
DELIVERED TO MAKER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED
3
<PAGE> 4
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON MAKER, IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. MAKER (I) SHALL GIVE PROMPT
NOTICE TO HOLDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE
ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A
SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW
YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
9. WAIVER OF JURY TRIAL.
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.
HOLDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY MAKER.
10. SAVINGS CLAUSE.
It is expressly stipulated and agreed to be the intent of
Maker and Holder at all times to comply with applicable state law or applicable
United States federal law (to the extent that it permits Holder to contract for,
charge, take, reserve, or receive a greater amount of interest than under state
law) and that this paragraph shall control every other covenant and agreement in
this Note and the other Loan Documents. If the applicable law (state or federal)
is ever judicially interpreted so as to render usurious any amount called for
under this Note or under any of the other Loan Documents, or contracted for,
charged, taken, reserved, or received with respect to the Debt, or if Holder's
exercise of the option to accelerate the Maturity Date, or if any prepayment
results in Maker having paid any interest in excess of that permitted by
applicable law, then it is Holder's express intent that all excess amounts
theretofore collected by Holder shall be credited on the principal balance of
this Note and all other Debt and the provisions of this Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
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 Holder 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
4
<PAGE> 5
long as the Debt is outstanding. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, it is not the intention
of Holder to accelerate the maturity of any interest that has not accrued at the
time of such acceleration or to collect unearned interest at the time of such
acceleration.
11. MISCELLANEOUS.
(a) No release of any security for the Debt evidenced hereby
or any Person liable for payment of the Debt evidenced hereby, no extension of
time for payment of the Debt evidenced hereby or any installment hereof, and no
alteration, amendment or waiver of any provision of the Loan Documents made by
agreement between Holder and any other Person or party shall release, modify,
amend, waive, extend, change, discharge, terminate or affect the liability of
Maker or any other Person or party who might be or become liable for the payment
of all or any part of the Debt evidenced hereby, under the Loan Documents,
except as explicitly provided in a writing satisfying the requirements of
paragraph 11(c) hereof.
(b) Maker and all others who may become liable for the payment
of all or any part of the Debt evidenced hereby do hereby severally waive
presentment and demand for payment, notice of dishonor, protest, notice of
protest, notice of non-payment, and notice of intent to accelerate the maturity
hereof and (except as may be expressly provided for in the Loan Documents) of
actual acceleration.
(c) 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 Holder, 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.
(d) Whenever used, the singular number shall include the
plural, the plural the singular, and the words "Holder" and "Maker" shall
include their respective successors, assigns, heirs, executors and
administrators as permitted under the Loan Documents.
(e) The provisions of Section 12.24 of the Loan Agreement,
relating to the exculpation of Maker, are hereby incorporated by reference, as
if set forth in full herein.
[signature on next page.]
5
<PAGE> 6
IN WITNESS WHEREOF, Maker has duly executed or has caused its
respective duly authorized officers to execute this Note on its behalf, as of
the day and year first above written.
MAKER: GLIMCHER LLOYD VENTURE, LLC,
a Delaware limited liability company
By: Glimcher Portland, Inc.,
its managing member
By: /s/ George A. Schmidt
---------------------------
George A. Schmidt
Senior Vice President
<PAGE> 7
COUNTY OF NEW YORK )
ss:
STATE OF NEW YORK )
On the ____ day of September, 1998 before me, the undersigned, a notary public
in and for said State, personally appeared George A. Schmidt, personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her capacity, and that by his/her signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.
/s/ Debra Paoli
- -------------------------------------
Notary Public
<PAGE> 1
Exhibit 10.75
MORTGAGE LOAN COOPERATION AGREEMENT, dated as of September 15,
1998 (this "Agreement"), among GLIMCHER LLOYD VENTURE, LLC, a Delaware limited
liability company ("Borrower"), GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
Delaware limited partnership ("Borrower Parent/Sponsor"), and GOLDMAN SACHS
MORTGAGE COMPANY, a New York limited partnership ("GSMC").
WHEREAS, Borrower is the owner of the real property commonly
known as Lloyd Center, located in Portland, Oregon (the "Property"); and
WHEREAS, GSMC has agreed to provide certain financing to
Borrower in the approximate aggregate amount of $130,000,000.00 secured by,
among other things, the Property on the terms set forth in a Loan Agreement,
dated as of the date hereof, between Borrower and GSMC, (as same may be amended
from time to time, the "Loan") this Agreement and the other Loan Documents (as
such term is defined in said Loan Agreement) (all terms used but not defined
herein shall have the meaning given such terms in the Loan Agreement); and
WHEREAS, it is contemplated that, subsequent to the funding of
the Loan by GSMC, the Loan will be sold, in whole or in part, whether as a whole
loan sale, or a sale of participation interests, a private placement, Rule 144A
offering or registered public offering of pass-through trust certificates or of
debt or equity securities issued by Borrower, GSMC (or an affiliate thereof), or
otherwise; and GSMC may deem it necessary or desirable to amend or modify
certain of the Loan Documents in connection therewith.
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions. When used herein, the following
capitalized terms shall have the following meanings:
"Certificates" shall mean, collectively, any senior and/or
subordinate note, debenture or pass-through certificate(s), or other evidence(s)
of indebtedness, or debt or equity security(ies), or any combination of the
foregoing, representing a direct or beneficial interest, in whole or in part, in
the Loan either alone or together with other loans. Certificates may be issued
in a single class or multiple classes.
"Bifurcation" shall mean the restructuring of the loan as two
(2) or more separate loans in accordance with, and pursuant to, the provisions
of Section 2(h) hereof.
"Bifurcation Borrowers" shall mean, collectively and/or
individually, the Borrower and the members of Borrower who shall be the borrower
under a Bifurcation Loan.
"Bifurcation Loans" shall mean, collectively and/or
individually, one (1) or more loans to the Borrower and/or the members of
Borrower secured by the Property and/or liens on all membership interests in
Borrower which shall result from a Bifurcation.
<PAGE> 2
"Rating Agencies" shall mean each of Standard & Poor's Ratings
Group, Duff & Phelps Credit Rating Co., Moody's Investors Service, Inc., Fitch
IBCA, Inc. or such other nationally recognized statistical securities rating
organizations as may be designated by GSMC to assign a rating to the Loan or any
Certificates.
"Rating Agency Requirements" shall mean such requirements as
the Rating Agencies may impose, after such discussions as GSMC (in its sole
discretion) shall determine to be appropriate, as a condition to their assigning
to the Loan or any Certificates such ratings as may be acceptable to GSMC.
Borrower and Borrower Parent/Sponsor acknowledge that the Loan and/or
Certificates are contemplated to include the highest ratings assigned by the
Rating Agencies.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securitization" shall mean the first transaction in which
GSMC actually (i) sells or participates one hundred percent (100%) of the Loan,
the Notes and the other Loan Documents to one or more investors as a whole loan,
(ii) deposits the Loan, the Deed of Trust, the Notes and other Loan Documents
with a trust (including a REMIC trust), and such trust issues Certificates, one
hundred percent (100%) of which Certificates are offered and sold (except for
any Certificate representing any non-economic residual interest in such REMIC
trust that may be retained by GSMC or any affiliate thereof), or (iii) otherwise
sells the Loan or all interests therein to investors, including through the sale
of Certificates, provided that no Securitization shall be deemed to have
occurred for purposes hereof and the Loan Agreement, if (x) following the
completion of any sale or participation described above in this definition, GSMC
or any affiliate of GSMC shall continue to have a participation or any other
economic interest in the Loan (except for any Certificate representing any
non-economic residual interest in such REMIC trust that may be retained by GSMC
or any affiliate thereof); or (y) the Loan is purchased by a third-party that
represents and warrants to GSMC that (A) such purchaser (either directly or
through its affiliates) is regularly engaged in the business of buying loans for
subsequent securitization and (B) it is such purchaser's intention, as of the
time of such purchase, to securitize or cause the securitization of the Loan
within one (1) year. Notwithstanding the foregoing, the conveyance by GSMC of
its interest in the Loan to LaSalle National Bank, as custodian and collateral
agent (the "Custodian"), in connection with the commercial-mortgage-loan-sale
facility (the "Facility") created by GSMC with a commercial paper issuer (the
"CP Issuer") sponsored by Societe Generale pursuant to that certain Seller
Agreement, dated as of December 18, 1996, among GSMC, as seller, Barton Capital
Corporation, as purchaser, and Societe Generale, as agent, and that certain
Mortgage Loan Purchase Agreement, dated as of December 18, 1996, among GSMC, as
administrator, Barton Capital Corporation, as purchaser, and Societe Generale,
as agent, and any reconveyance of such interest by the Custodian to GSMC shall
not constitute a Securitization under this Agreement even after the first
anniversary of any such conveyance. In connection with the conveyance by GSMC of
the Loan to the Custodian, GSMC will not convey its rights under this Agreement
to the Custodian or the CP Issuer and therefore neither the Custodian nor the CP
Issuer shall have any rights under this Agreement.
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<PAGE> 3
Section 2. General Obligation to Cooperate. Without limiting
any obligations of Borrower imposed in any other Loan Document, Borrower hereby
agrees that it shall:
(a) Use reasonable efforts, at GSMC's request, to satisfy the
market standards to which GSMC customarily adheres or which may be
reasonably required in the marketplace or by the Rating Agencies in
connection with a Securitization; cooperate fully and in good faith
with GSMC's efforts to structure and document the Loan and to arrange
for the issuance and sale of Certificates and the other actions
contemplated hereby; and take any and all actions that may reasonably
be requested by GSMC to permit the issuance of Certificates and the
sale thereof on such terms as GSMC may determine to be necessary or
desirable. Without limiting the generality of the foregoing, each
Person will (i) cooperate in any manner that may reasonably be
requested by GSMC with each Rating Agency, the SEC, the underwriters
and/or placement agents for any Certificates, any accountants, due
diligence firms, trustees, servicers or other service providers engaged
in connection with the Securitization, counsel to any such persons, and
such other persons as may be designated by GSMC from time to time and
(ii) execute and deliver all documentation and take all actions deemed
reasonably necessary or desirable by GSMC for the implementation of any
Securitization, including in connection with:
(1) The preparation, completion, execution
and delivery of (a) in the case of a public offering of
Certificates, a registration statement and accompanying
prospectus (and all necessary amendments thereto) for the
offer and sale of Certificates, or (b) in the case of a
private placement or Rule 144A offering of Certificates, all
necessary offering circulars and/or private placement
memoranda, in either case containing such information
regarding Borrower, the Loan, the Property, any Person and
such other matters as may be customary for public offerings or
private offerings (as applicable) of securities similar to the
Certificates or as may be required by the SEC or deemed
appropriate by GSMC in connection therewith, including audited
and unaudited financial statements (including, if requested by
GSMC, interim audited financial statements) fulfilling SEC and
GSMC requirements as to form, content and period covered, an
auditors' comfort letter from a "Big Five" accounting firm (or
successor thereto), and an agreed-upon-procedures letter
issued by such firm regarding income-in-place at the Property;
(2) The satisfaction of all Rating Agency
Requirements; and
(3) The satisfaction of ongoing periodic
reporting requirements under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), arising out of the
registration of the Certificates.
For greater certainty, certain specific actions that GSMC
expects will be required in connection with the Securitization
and the Bifurcation, if required by GSMC, are set forth
herein. However, the specific agreements set forth herein
shall not be construed to limit the generality of the
obligations of any Person under this Section 2, except to the
extent expressly set forth below;
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<PAGE> 4
(b) Provide (or cause its affiliates to provide) (i)
to the Rating Agencies and (ii) to GSMC any information in
Borrower's possession or which can be obtained by Borrower and
can be disclosed without violating any applicable law or
breaching any applicable confidentiality agreement (including
financial statements) that, in the opinion of GSMC, is
necessary or desirable (for legal disclosure or marketing
purposes) for inclusion in any registration statement,
preliminary or final prospectus, preliminary or final private
placement memorandum or other disclosure documents used in any
such public offering or Rule 144A or private placement
(collectively, together with any amendment thereof or
supplement thereto, "Disclosure Documents");
(c) Provide such financial and other information (to
the extent such information is in Borrower's possession or can
be reasonably obtained by Borrower and can be disclosed
without violating any applicable law or breaching any
applicable confidentiality agreement) with respect to the
Property, Borrower and its Affiliates, the Property Manager
and any Tenants; provide business plans and budgets, to the
extent available, relating to the Property and perform or
permit or cause to be performed or permitted such site
inspections, appraisals, market studies, environmental reviews
and reports (Phase I's and, if appropriate, Phase II's),
engineering reports and other due diligence investigations of
the Property, as may be reasonably requested in writing by
GSMC or the Rating Agencies or as may be necessary or
appropriate, in GSMC's opinion, in connection with the
Securitization, together, if customary, with appropriate
verification and/or consents of such information and materials
through letters of auditors or opinions of counsel of
independent attorneys reasonably acceptable to GSMC and the
Rating Agencies;
(d) Use best efforts to cause counsel to render
opinions as to non-consolidation, fraudulent conveyance and
true sale, and any other opinion customary in securitization
or loan transactions, with respect to the Property and
Borrower and its Affiliates, which counsel and opinions shall
be reasonably satisfactory to GSMC and the Rating Agencies;
(e) Make such representations and warranties as of
the closing date of the Securitization and the Bifurcation
with respect to the Property, Borrower and the Loan Documents
as are customarily provided in securitization transactions or
as may be reasonably requested by the holder of the Notes or
the Rating Agencies and consistent with the facts covered by
such representations and warranties as they exist on the date
thereof, including the representations and warranties made in
the Loan Documents as of the Closing Date, in each case
specifying any exceptions to such representations and
warranties (and the existence of such exceptions (to the
extent arising in the period subsequent to the Closing Date)
shall not, in and of itself, be a breach of this Agreement or
of any of the Loan Documents);
(f) Subject to Section 4, promptly upon request of
GSMC (and in no event more than ten (10) business days after
being provided with a form of
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<PAGE> 5
such document), execute such restatements, amendments,
supplements, replacements or other modifications to the Loan
Documents and, if required by GSMC, documentation for the
Bifurcation Loans, and the Bifurcation generally and
Borrower's and the Bifurcation Borrowers', if any,
organizational documents (or the organizational documents of
Borrower's, of the Bifurcation Borrowers', if any, general
partner or member if Borrower, or if the Bifurcation
Borrowers, if any, are limited partnerships or limited
liability companies, respectively) as may be requested by GSMC
in order to permit the Securitization and the Bifurcation or
in order to satisfy Rating Agency Requirements, including any
of the foregoing to better ensure that Borrower and the
Bifurcation Borrowers, if any, are special purpose bankruptcy
remote entities, to require periodic updates of accounting
matters, appraisals and environmental and engineering
assessments at origination of and/or during the term of the
Loan, and to incorporate customary mortgage and/or indenture
terms and restrictions for transactions involving the issuance
of rated debt through means such as the Certificates. In
respect of this Agreement, Borrower acknowledges that it is
generally familiar with the requirements imposed by rated
securitization transactions and the mortgage loan and
securities offering documentation required thereby;
(g) Deliver certificates of the relevant Governmental
Authorities in all relevant jurisdictions indicating the good
standing and qualification of Borrower and the Bifurcation
Borrowers, if any, as of the date of the Securitization and
Bifurcation, as applicable; and
(h) Cooperate fully, at GSMC's request, which
requests shall be made or withheld at the sole discretion of
GSMC, to accomplish a Bifurcation by restructuring the Loan as
two (2) or more separate loans whose initial principal
balances shall be in such proportion as GSMC shall request,
but whose aggregate principal balance shall be the Loan
Amount. The Bifurcation shall result in two (2) or more
Bifurcation Loans which shall be secured by deed of trust
liens on the Property and Borrower's other assets. The
respective interest rates payable under the Bifurcation Loans
shall be as GSMC shall elect, provided that the average
interest rate for both of such loans (weighted by the sum of
the outstanding principal balances thereof) shall not exceed
the interest rate on the Loan as specified in the Loan
Agreement.
Section 3. Intentionally Deleted.
Section 4. Limitation on Borrower's Obligations.
NOTWITHSTANDING THE PROVISIONS OF SECTION 2, BORROWER SHALL NOT BE OBLIGATED
HEREUNDER TO AGREE TO ANY MODIFICATION OF A LOAN DOCUMENT OR ANY BORROWER
ORGANIZATIONAL DOCUMENTS THAT WOULD MATERIALLY AND ADVERSELY AFFECT BORROWER OR
THAT WOULD CHANGE THE OUTSTANDING PRINCIPAL BALANCE, INCREASE THE INTEREST RATE
OR INTEREST PAYMENTS, INCREASE THE RATE OF AMORTIZATION, SHORTEN THE MATURITY
DATE OR
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<PAGE> 6
AFFECT THE LIMITATIONS ON RECOURSE AGAINST BORROWER SET FORTH IN THE LOAN
DOCUMENTS.
Section 5. Securitization Indemnification.
(a) Offering of Certificates. Borrower acknowledges that
Certificates may be offered in a public offering registered with the SEC, in a
private placement or Rule 144A transaction, in an unregistered public offering
outside the United States or in some combination thereof, and Borrower
understands and agrees that any of the information provided or to be provided by
Borrower or Borrower Parent/Sponsor in connection with the Securitization,
whether hereunder or under any Loan Document or otherwise (collectively, the
"Provided Information") may be included in a Disclosure Document and in filings
with the SEC pursuant to the Securities Act or the Exchange Act, or, subject to
the provisions of this Section 5, provided or made available to investors or
prospective investors in the course of effecting a Securitization, the Rating
Agencies and service providers relating to the Securitization. Upon request,
Borrower will provide GSMC and any underwriter or placement agent for any
Certificates with written confirmation of the origin and/or accuracy of any
Provided Information. In the event that a Disclosure Document is required to be
revised prior to the sale of all Securities, Borrower will cooperate with GSMC
or the holder of the Notes in updating the Provided Information for inclusion or
summary in such Disclosure Document by providing all current information in
Borrower's or Borrower Parent/Sponsor's possession or reasonably obtainable by
Borrower or Borrower Parent/Sponsor (to the extent that the disclosure of such
information would not violate any applicable law or breach any confidentiality
agreement pertaining to Borrower or Borrower Parent/Sponsor or the Property)
necessary to keep such Disclosure Document accurate and complete in all material
respects with respect to the matters covered in the Provided Information.
Borrower hereby consents (on behalf of itself and each of its related Persons)
to the inclusion in any such Disclosure Document of any Provided Information now
in possession of GSMC or acquired by GSMC pursuant to this Agreement or
otherwise.
(b) Each of Borrower and Borrower Parent/Sponsor hereby agrees
to deliver the certificate and provide the indemnification set forth in Section
5(c) below and to provide the indemnification set forth in Section 5(e) below;
provided that each of Borrower and Borrower Parent/Sponsor have been given at
least a five (5) Business Day period to review the applicable Disclosure
Document or filing (or a two (2) Business Day period with respect to any amended
or final Disclosure Document or filing which has previously been reviewed) (such
five (5) or two (2) Business Day period, as applicable, being referred to herein
as the "Review Period") so that each of Borrower and Borrower Sponsor/Parent
may, with respect to the portions contained therein specifically relating to
Borrower Parent/Sponsor, Borrower, the Bifurcation Borrowers, if any, the
Property, the Loan, or the Bifurcation Loans, if any, and any other sections
pertaining to Borrower, Borrower Parent/Sponsor, Bifurcation Borrowers, if any,
the Property, the Loan or the Bifurcation Loans, if any, that GSMC has
reasonably requested Borrower and Borrower Parent/Sponsor to review (the
"Borrower Disclosure Information") either confirm for themselves that the same
is accurate and complete in all material respects or propose in writing to GSMC
such corrections, additions, deletions or qualifications as shall be reasonably
required by Borrower and Borrower Parent/Sponsor to issue the certificate
required in Section 5(c)(i) and provide the indemnification set forth in Section
5(c)(ii) or 5(e) below.
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<PAGE> 7
(c) In connection with each Disclosure Document which Borrower
and Borrower Parent/Sponsor have had an opportunity to review pursuant to
Section 5(b) above and which reflect any changes reasonably required by Borrower
and Borrower Parent/Sponsor in writing prior to the expiration of the applicable
Review Period to issue the certificate required in Section 5(c)(i) below and to
provide the indemnity set forth in Section 5(c)(ii) below, each of Borrower and
Borrower Parent/Sponsor hereby agrees to:
(i) Upon GSMC's reasonable request from time
to time, provide a certificate to GSMC in substantially the
form set forth on Exhibit A hereto certifying that (1)
Borrower and Borrower Parent/Sponsor have examined the
Borrower Disclosure Information in such Disclosure Document
including the Borrower Disclosure Information contained in
applicable portions of the sections entitled "Special
Considerations", "Description of the Mortgages", "Description
of the Mortgage Loans and Mortgaged Properties", "The
Manager", "The Borrower" and (to the extent it relates to the
Loan) "Certain Legal Aspects of the Mortgage Loan[s]", (2)
such Borrower Disclosure Information does not, as of the date
of such certificate, contain any untrue statement of a
material fact and such Disclosure Document does not, as of the
date of such certificate, omit to state a material fact
specifically relating to Borrower, Borrower Parent/Sponsor,
Bifurcation Borrowers, if any, the Property, the Loan or the
Bifurcation Loans, if any, necessary in order to make the
statements made in the Disclosure Document specifically
relating to Borrower, Borrower Parent/Sponsor, Bifurcation
Borrowers, if any, the Property, the Loan or the Bifurcation
Loans, if any, in the light of the circumstances under which
they were made, not misleading except, with respect to such
omissions, to the extent specifically set forth in such
certificate and (3) that such Borrower Disclosure Information
is accurate and complete in all material respects;
(ii) indemnify and hold harmless, with
respect to such Disclosure Document, each of The Goldman Sachs
Group, L.P., Goldman, Sachs & Co., GSMC and any other
Affiliate of The Goldman Sachs Group, L.P. ("Goldman"), and
each of their respective directors and officers, and each
Person who controls any Person that is included within the
definition of Goldman within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act
(collectively, the "Goldman Group"), and any other
underwriters in a Securitization and any of such underwriters'
Affiliates (the "Underwriters"), and each of the Underwriters'
respective directors and officers, and each Person who
controls any Person that is included within the definition of
Underwriter within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (collectively, the
"Underwriter Group") against any losses, claims, damages or
liabilities, joint and several (the "Liabilities"), to which
the Goldman Group in its capacity as an issuer, an underwriter
or otherwise, and/or the Underwriter Group in its capacity as
an underwriter or otherwise, may become subject under the Act
or otherwise insofar as the Liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in
the Borrower Disclosure Information, or arise out of or are
based upon the omission or
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<PAGE> 8
alleged omission to state in the Disclosure Document a
material fact specifically relating to Borrower, Borrower
Parent/Sponsor, Bifurcation Borrowers, if any, the Property,
the Loan or the Bifurcation Loans, if any, required to be
stated in the Disclosure Document necessary in order to make
the statements specifically relating to Borrower, Borrower
Parent/Sponsor, Bifurcation Borrowers, if any, the Property,
the Loan or the Bifurcation Loans, if any, in the Disclosure
Document not misleading (except if the failure to state such
fact was specifically set forth in the certificate referred to
in Section 5(c)(i) above) or arise out of or are based upon
the failure of the Borrower Disclosure Information to be
accurate and complete in all material respects (except that
the obligation of Borrower and Borrower Parent/Sponsor to
indemnify in respect of any decrement or weighted average life
tables included in the Registration Statement prepared by a
person other than Borrower or Borrower Parent/Sponsor (and not
on behalf of Borrower or Borrower Parent/Sponsor) shall be
limited to any untrue statement or alleged untrue statement
therein or omission therefrom that results directly from an
error in any information provided by or on behalf of Borrower
or Borrower Parent/Sponsor).
(iii) Reimburse the Goldman Group and/or the
Underwriter Group for any legal or other expenses reasonably
incurred by any such Persons in connection with investigating
or defending the Liabilities as such expenses are incurred.
This indemnity agreement will be in addition to any liability
which Borrower or Borrower Parent/Sponsor may otherwise have.
(d) In connection with each filing under the Exchange Act
which Borrower and Borrower Parent/Sponsor have had an opportunity to review
pursuant to Section 5(b) above and which reflects any changes reasonably
required by Borrower and Borrower Parent/Sponsor in writing prior to the
expiration of the applicable Review Period to provide the indemnity set forth in
this Section 5(d), each of Borrower and Borrower Parent/Sponsor agrees to (i)
indemnify and hold harmless the Goldman Group for any Liabilities, joint and
several, to which the Goldman Group may become subject insofar as the
Liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Borrower Disclosure Information contained in such filings or the omission or
alleged omission to state in the Disclosure Document, contained in such filings
a material fact specifically relating to Borrower, Borrower Parent/Sponsor, the
Bifurcation Borrowers, if any, the Property, the Loan or the Bifurcation Loans,
if any, required to be stated in the Disclosure Document necessary in order to
make the statements in the Disclosure Document specifically relating to
Borrower, Borrower Parent/Sponsor, Bifurcation Borrowers, if any, the Property,
the Loan or the Bifurcation Loans, if any, in light of the circumstances under
which they were made, not misleading (except if such omitted fact was
specifically identified in a writing delivered to GSMC prior to the expiration
of the applicable review period) or arise out of or are based upon the failure
of the Borrower Disclosure Information to be accurate and complete in all
material respects and (ii) reimburse the Goldman Group and/or the Underwriter
Group for any legal or other expenses reasonably incurred by the Goldman Group
and/or the Underwriter Group in connection with defending or investigating the
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<PAGE> 9
Liabilities as such expenses are incurred. This indemnity agreement will be in
addition to any liability which Borrower or Borrower Parent/Sponsor may
otherwise have.
(e) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify Borrower and Borrower Parent/Sponsor in writing
of the commencement thereof, but the omission to so notify shall not relieve
Borrower and Borrower Parent/Sponsor from any liability which any of them may
have to any indemnified party hereunder. In the event that any action is brought
against any indemnified party, and it notifies Borrower and Borrower
Parent/Sponsor of the commencement thereof, each of Borrower and Borrower
Parent/Sponsor will be entitled to participate therein and, to the extent that
they in their sole discretion may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party (in its reasonable discretion, but such counsel shall
not, except with the consent of the indemnified party in its sole discretion, be
counsel to the indemnifying party). No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party. After notice from Borrower or Borrower
Parent/Sponsor to such indemnified party under this Section, neither Borrower
nor Borrower Parent/Sponsor shall be liable hereunder for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided, however,
if the defendants in any such action include both (x) the indemnified party and
(y) each of Borrower and Borrower Parent/Sponsor, and the indemnified party
shall have reasonably concluded that there are any legal defenses available to
it and/or other indemnified parties that are different from or additional to
those available to Borrower and Borrower Parent/Sponsor, the indemnified party
or parties shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Neither Borrower nor Borrower Parent/Sponsor
shall be liable for the expenses of more than one separate counsel for all
indemnified parties unless an indemnified party reasonably determines that joint
representation of such indemnified party and another indemnified party by the
same counsel would constitute a significant conflict of interest that cannot be
avoided without retaining separate counsel.
(f) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 5(c) or
5(d) is for any reason held to be unenforceable by an indemnified party in
respect of any losses, claims, damages or liabilities (or action in respect
thereof) referred to therein which would otherwise be indemnifiable under
Section 5(c) or 5(d), each of Borrower and Borrower Parent/Sponsor shall
contribute to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages or liabilities (or action in respect thereof);
provided, however, that no Person guilty of fraudulent misrepresentation (within
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<PAGE> 10
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which the
respective parties are entitled, the following factors shall be considered: (i)
the relative knowledge of, and access to, information concerning the matter with
respect to which the claim was asserted of the Goldman Group and the Underwriter
Group, on the one hand, and of Borrower and Borrower Parent/Sponsor on the
other; (ii) the opportunity to correct and prevent any statement or omission;
and (iii) any other equitable considerations appropriate in the circumstances.
Borrower and Borrower Parent/Sponsor hereby agree that it may not be equitable
if the amount of such contribution were determined by pro rata or per capita
allocation.
Section 6. Rating Surveillance. GSMC will have the right to
retain the Rating Agencies to provide rating surveillance services on the
Certificates and the annual cost of such ongoing rating surveillance will be at
the expense of GSMC.
Section 7. Retention of Servicer. GSMC reserves the right to
retain a Servicer (as well as a special servicer) to act as its agent hereunder
with such powers as are specifically delegated to the Servicer (or such special
servicer) by GSMC, whether pursuant to the Loan Agreement, a Servicing
Agreement, a Deposit Account Agreement or otherwise, together with such other
powers as are reasonably incidental thereto. Borrower shall not be responsible
for the payment of the Servicer's annual fee for master servicing (as
distinguished from special servicing); provided that, Borrower shall pay any
fees and expenses of the Servicer in connection with a prepayment of the Loan,
release of the Property, assumption of the Loan, modification of the Loan made
at Borrower's request, any requests by Borrower for waivers or consents, and the
enforcement of the Loan Documents after an Event of Default and any other
expenses of GSMC that are required to be paid by Borrowers under the Loan
Documents.
Section 8. Breach of Agreement. In the event Borrower or
Borrower Parent/Sponsor fails to fulfill its obligations under this Agreement,
GSMC shall be entitled to notify Borrower or Borrower Parent/Sponsor, as the
case may be, in writing (including by facsimile) of such failure; thereupon,
Borrower or Borrower Parent/Sponsor, as the case may be, shall have five (5)
Business Days from the receipt of any such notice to cure such failure to
fulfill its obligations hereunder. If, following notice from GSMC and the
expiration of such period, the continued failure by Borrower or Borrower
Parent/Sponsor or any other Person to fulfill its obligations under this
Agreement in respect of which GSMC has delivered notice hereunder, will, upon
further written notice from GSMC, in and of itself constitute an immediate event
of default under this Agreement, and if the following occurs at a time when the
Loan is not an asset of or collateral for a Securitization, an immediate Event
of Default under each Loan Document to which Borrower or Borrower Parent/Sponsor
is now or hereafter becomes a party (without regard to any notice requirement or
cure period provided in any such document and whether or not expressly provided
for as an Event of Default) and will entitle GSMC to pursue any or all of its
remedies at law and under any such document. The terms of Section 12.24 of the
Loan Agreement (captioned "Exculpation") shall not be applicable with respect to
the obligations of Borrower and Borrower Parent/Sponsor under this Agreement.
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Section 9. Termination. This Agreement shall terminate if a
Securitization has not occurred on or before the second anniversary of this
Agreement. From and after the closing of a Securitization, Borrower and Borrower
Parent/Sponsor shall no longer have any obligations under Section 2 (other than
Section 2(a)(3)) of this Agreement.
Section 10. Loan Summary. In addition to any other certificate
required under the terms of this Agreement, upon the request of GSMC and as soon
as reasonably practical after the date hereof each of Borrower and Borrower
Parent/Sponsor shall execute a certificate in favor of GSMC in substantially the
form set forth on Exhibit B hereto (A) certifying that (i) each of Borrower and
Borrower Parent/Sponsor has reviewed the summary of the Loan prepared on behalf
of GSMC for inclusion in the Disclosure Document (the "Loan Summary") and (ii)
as of the date hereof, the information contained in the Loan Summary pertaining
to Borrower, Borrower Parent/Sponsor, the Bifurcation Borrowers, if any, the
Property, the Loan and the Bifurcation Loans is accurate and complete in all
material respects and does not contain any untrue statement of a material fact
and does not omit to state a material fact specifically relating to Borrower,
Borrower Parent/Sponsor, the Bifurcation Borrowers, if any, the Property, the
Loan or the Bifurcation Loans, if any, necessary to make the statements made in
the Loan Summary specifically relating to Borrower, Borrower Parent/Sponsor,
Bifurcation Borrowers, if any, the Property, the Loan or the Bifurcation Loans,
if any, in light of the circumstances under which they were made, not misleading
and (B) consenting to GSMC's use of such Loan Summary in a Disclosure Document.
Section 11. Governing Law. THIS AGREEMENT WAS NEGOTIATED IN
THE STATE OF NEW YORK, AND MADE BY GSMC AND ACCEPTED BY BORROWER AND BORROWER
PARENT/SPONSOR IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN ARE BEING
DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF BORROWER AND BORROWER
PARENT/SPONSOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT
THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, AND THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK PURSUANT TO ss. 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
Section 12. Submission to Jurisdiction. ANY LEGAL SUIT, ACTION
OR PROCEEDING AGAINST BORROWER, BORROWER PARENT/SPONSOR OR GSMC ARISING OUT OF
OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT
IN NEW YORK, NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, AND EACH OF BORROWER, BORROWER PARENT/SPONSOR AND GSMC WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH SUIT, ACTION OR PROCEEDING AND HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
11
<PAGE> 12
ACTION OR PROCEEDING. EACH OF BORROWER AND BORROWER PARENT/SPONSOR DOES HEREBY
DESIGNATE AND APPOINT CT CORPORATION SYSTEM, 1633 BROADWAY, NEW YORK, NEW YORK
10019 OR AT SUCH OTHER OFFICE IN NEW YORK, NEW YORK, AS MAY BE DESIGNATED FROM
TIME TO TIME AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF
SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT
SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID
SERVICE OF BORROWER AND BORROWER PARENT/SPONSOR MAILED OR DELIVERED TO ANY OF
BORROWER AND BORROWER PARENT/SPONSOR IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER AND BORROWER
PARENT/SPONSOR, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK.
EACH OF BORROWER AND BORROWER PARENT/SPONSOR (I) SHALL GIVE PROMPT NOTICE TO
GSMC OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS
FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF
ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS
DISSOLVED WITHOUT LEAVING A SUCCESSOR.
Section 13. Waiver of Jury Trial. BORROWER AND BORROWER
PARENT/SPONSOR EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
AGREEMENT, 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 EACH OF BORROWER AND BORROWER PARENT/SPONSOR, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. GSMC IS HEREBY AUTHORIZED TO FILE A COPY
OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH
OF BORROWER AND BORROWER PARENT/SPONSOR
Section 14. Notices. All notices, requests, demands and other
communications required under the terms and provisions hereof shall be in
writing and shall become effective when delivered by hand or received by
telecopier, telegram, certified or registered airmail, postage prepaid, or an
established overnight delivery service, addressed as follows:
12
<PAGE> 13
If to GSMC:
Goldman Sachs Mortgage Company
85 Broad Street
New York, New York 10004
Attention: Mr. Mark J. Kogan
with a copy to:
Archon Financial, L.P.
600 E. Las Colinas Blvd.
Suite 800
Irving, Texas 75039
Attention: Michael W. Forbes
with a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Jeffrey A. Lenobel, Esq.
If to Borrower:
Glimcher Lloyd Venture, LLC
20 South Third Street
Columbus, Ohio 43215
Attention: George A. Schmidt,
Sr. Vice President
with a copy to:
Frost & Jacobs LLP
One Columbus - Suite 1000
10 West Broad Street
Columbus, Ohio 43215-3467
Attention: John I. Cadwallader, Esq.
If to Borrower Parent/Sponsor:
Glimcher Properties Limited Partnership
20 South Third Street
Columbus, Ohio 43215
Attention: George A. Schmidt,
Sr. Vice President
13
<PAGE> 14
with a copy to:
Frost & Jacobs LLP
One Columbus - Suite 1000
10 West Broad Street
Columbus, Ohio 43215-3467
Attention: John I. Cadwallader, Esq
or to such other address (and such additional addressees, not to exceed four (4)
in number for each party hereto) as the party to receive the notice shall
designate by notice to the other parties.
Section 15. Rules of Construction. The headings used in this
Agreement are for convenience only and constitute no part of this Agreement, and
references herein to articles, sections, subsections or clauses are to this
Agreement unless otherwise specified. Unless otherwise specified, the words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. The words "includes", "including" and similar terms
shall be construed as if followed by the words "without limitation". Unless
otherwise specified, all meanings attributed to defined terms herein shall be
equally applicable to both the singular and plural forms of the terms so
defined. As used herein, the term "reasonably obtainable" by Borrower or similar
terms, when qualifying Borrower's obligation to deliver a report, statement or
other item hereunder, shall take into account the other obligations of Borrower
and Borrower Parent/Sponsor under the Loan Documents that may relate to the
preparation and/or delivery of such report, statement or other item, and shall
be construed to mean reasonably obtainable by the Borrower, its asset manager,
its property manager, and/or Borrower Parent/Sponsor. Whenever in this Agreement
any Person is referred to, such reference shall be deemed to include the legal
representatives, successors and assigns of such Person.
Section 16. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
Section 17. Modification, Waiver in Writing. No modification,
amendment, extension, discharge, termination or waiver of any provision of this
Agreement, nor consent to any departure by Borrower or Borrower Parent/Sponsor
therefrom, shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given. Except as otherwise expressly provided herein, no notice to, or
demand on Borrower or Borrower Parent/Sponsor, shall entitle Borrower or
Borrower Parent/Sponsor to any other or future notice or demand in the same,
similar or other circumstances. Any failure or delay by GSMC in insisting upon
strict performance of any term, condition, covenant or agreement, or exercising
any right, power, remedy or privilege hereunder, shall operate as or constitute
a waiver thereof, nor shall a single or partial exercise thereof preclude any
other future exercise, or the exercise of any other right, power, remedy or
privilege.
Section 18. Severability. Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any
14
<PAGE> 15
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
Section 19. No Third Party Beneficiaries. This Agreement is
solely for the benefit of the parties hereto, together with the Goldman Group
and the Underwriter Group, and nothing contained herein shall be deemed to
confer upon other Person any right to insist upon or to enforce the performance
or observance of any of the obligations contained herein.
Section 20. Obligations Joint and Several The obligations of
Borrower and Borrower Parent/Sponsor hereunder shall be joint and several as
among Borrower Parent/Sponsor and each of the Persons included hereinabove
within the definition of "Borrower", and their respective successors and
assigns.
Section 21. No Securitization or Bifurcation Expense to
Borrower or Borrower Parent/Sponsor. Notwithstanding anything contained herein
to the contrary, neither Borrower nor Borrower Parent/Sponsor shall have
obligation to pay or reimburse GSMC for any expenses incurred by GSMC or its
affiliates in connection with the Securitization, the issuance of Certificates
and any related arrangements or incurred in connection with a Bifurcation;
provided, however, that the foregoing shall not be construed to apply to the
obligations set forth in Sections 5 or 8 hereof.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
15
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first hereinabove set forth.
GOLDMAN SACHS MORTGAGE COMPANY, a New
York limited partnership
By: Goldman Sachs Real Estate Funding Corp., a
Delaware corporation, its General Partner
By: /s/ Richard Weissmann
----------------------------------------
Name: Richard Weissmann
Title: Authorized Signatory
GLIMCHER LLOYD VENTURE, LLC,
a Delaware limited liability company
By: Glimcher Portland, Inc.,
its managing member
By: /s/ George A. Schmidt
----------------------------------------
George A. Schmidt
Senior Vice President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Glimcher Properties Corporation,
its general partner
By: /s/ George A. Schmidt
----------------------------------------
George A. Schmidt
Senior Vice President
<PAGE> 17
EXHIBIT A
CERTIFICATE
Reference is made to that certain Mortgage Loan Cooperation
Agreement, dated as of September [___], 1998 (the "Cooperation Agreement") among
GLIMCHER LLOYD VENTURE, LLC, a Delaware limited liability company ("Borrower"),
GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership
("Borrower Parent/Sponsor") and GOLDMAN SACHS MORTGAGE COMPANY, a New York
limited partnership ("GSMC"). Capitalized terms used but not defined herein
shall have the meaning given to them in the Cooperation Agreement. Pursuant to,
and on the terms set forth in, the Cooperation Agreement, each of the
undersigned hereby certifies to GSMC that:
(i) it has examined the information specifically
relating to Borrower, Borrower Parent/Sponsor, the Property or
the Loan (and such other sections pertaining to the Borrower,
Borrower Parent/Sponsor, [the Bifurcation Borrowers,] the
Property [or the Bifurcation Loans] [or the Loan] that GSMC
has reasonably requested that we review) contained in the
[Preliminary Prospectus Supplement] [Final Prospectus
Supplement] dated [_________], 199[_] (the "Prospectus
Supplement"), including such information contained in
applicable portions of the sections entitled "Special
Considerations", "Description of the Mortgages", "The
Manager", "The Borrower" and, to the extent it relates to the
Loan, "Certain Legal Aspects of the Mortgage Loans"
(collectively, the "Covered Portions"), copies of which are
attached hereto as Exhibit A;
(ii) such Covered Portions do not, as of the date
hereof, contain any untrue statement of a material fact and
such Prospectus Supplement does not, as of the date hereof,
omit to state a material fact, in both instances, specifically
relating to Borrower, Borrower Parent/Sponsor, the Property or
the Loan necessary in order to make the statements made in the
Prospectus Supplement specifically relating to Borrower,
Borrower Parent/Sponsor, Bifurcation Borrowers, if any, the
Property, the Loan or the Bifurcation Loans, if any, in light
of the circumstances under which they were made, not
misleading; and
(iii) each of the undersigned has examined the
Covered Portions and such Covered Portions are accurate and
complete in all material respects specifically relating to
Borrower, Borrower Parent/Sponsor, Bifurcation Borrowers, if
any, the Property, the Loan or the Bifurcation Loans, if any.
Nothing herein amends or modifies any of the terms of the
Cooperation Agreement.
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Certificate as of the [___] day of [________], 1998.
GLIMCHER LLOYD VENTURE, LLC,
a Delaware limited liability company
By: Glimcher Portland, Inc.,
its managing member
By: /s/ George A. Schmidt
---------------------------
George A. Schmidt
Senior Vice President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Glimcher Properties Corporation,
its general partner
By: /s/ George A. Schmidt
---------------------------
George A. Schmidt
Senior Vice President
<PAGE> 19
EXHIBIT B
CERTIFICATE
Reference is made to that certain Mortgage Loan Cooperation
Agreement, dated as of the date hereof (the "Cooperation Agreement") among
GLIMCHER LLOYD VENTURE, LLC, a Delaware limited liability company ("Borrower"),
GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership
("Borrower Parent/Sponsor") and GOLDMAN SACHS MORTGAGE COMPANY, a New York
limited partnership ("GSMC"). Capitalized terms used but not defined herein
shall have the meaning given to them in the Cooperation Agreement. Pursuant to,
and on the terms set forth in, Section 10 of the Cooperation Agreement, each of
the undersigned hereby certifies to GSMC that:
(i) it has reviewed the summary of the Loan attached
hereto as Exhibit A (the "Loan Summary");
(ii) as of the date hereof, the information contained
in the Loan Summary pertaining to Borrower, Borrower
Parent/Sponsor, the Property and the Loan is accurate and
complete in all material respects and does not, as of the date
hereof, contain any untrue statement of a material fact and
does not omit to state a material fact specifically relating
to Borrower, Borrower Parent/Sponsor, the Property or the Loan
necessary in order to make the statements made in such Loan
Summary specifically relating to Borrower, Borrower
Parent/Sponsor, the Property or the Loan, in light of the
circumstances under which they were made, not misleading; and
(iii) it hereby consents and agrees that GSMC may
include such Loan Summary in a Disclosure Document.
Nothing herein amends or modifies any of the terms of the
Cooperation Agreement.
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Certificate as of the [___]th day of _________, 1998.
GLIMCHER LLOYD VENTURE, LLC,
a Delaware limited liability company
By: Glimcher Portland, Inc.,
its managing member
By: /s/ George A. Schmidt
---------------------------
George A. Schmidt
Senior Vice President
GLIMCHER PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Glimcher Properties Corporation,
its general partner
By: /s/ George A. Schmidt
---------------------------
George A. Schmidt
Senior Vice President
<PAGE> 1
Exhibit 10.76
PROMISSORY NOTE
$10,000,000.00 September 15, 1998
FOR VALUE RECEIVED, GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware
limited partnership ("GPLP") and GLIMCHER PROPERTIES CORPORATION, a Delaware
corporation ("GPC"; GPLP and GPC collectively referred to as "Borrower"), each
having an address at 20 South Third Street, Columbus, Ohio 43215, jointly and
severally promise to pay to BANKERS TRUST COMPANY, a New York banking
corporation ("Lender"), or order, at 130 Liberty Street, Twenty-Fifth Floor, New
York, New York 10006, or at such other place as Lender may from time to time in
writing designate, in lawful money of the United States of America, the
principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) or such other
sum as may be the total amount outstanding pursuant to this Note, on or before
the Maturity Date (as hereinafter defined), together with accrued interest on
the principal balance outstanding from time to time, in like money, from the
date of this Note until fully repaid at the rates hereinafter set forth.
Interest shall be computed and shall accrue on the principal amount from time to
time outstanding from the date hereof to and including the Maturity Date at a
rate per annum equal to the Applicable Interest Rate (as hereinafter defined)
from time to time in effect. Principal payments shall be payable at the time and
in the manner specified in this Note.
1. DEFINITIONS. As used herein, the terms "Borrower" and "Lender" have
the meanings assigned in the preceding paragraph, and the following terms have
the following meanings:
"Applicable Interest Rate" shall mean, (i) for the period from
and including the date hereof to and including the Initially Scheduled
Maturity Date, a rate per annum equal to the LIBOR Rate from time to
time in effect plus 550 basis points and (ii) if the Note is extended
in accordance with Section 5 hereof, for the period following the
Initially Scheduled Maturity Date, a rate per annum equal to the LIBOR
Rate from time to time in effect plus 575 basis points.
<PAGE> 2
"Borrowing Date" shall have the meaning assigned to such term
in Section 2(c) hereof.
"Cash Flow After Debt Service" shall mean, for any period of
determination thereof, with respect to any Project or Other Property
the excess, if any, of the Project Income for such period over the
aggregate of (i) the Project Expenses for such period and (ii) an
assumed reserve for capital expenditures, tenant improvements, leasing
commissions and other tenant expenditures in an amount as determined by
Lender.
"Default" shall mean any event which, with the giving of any
applicable notice and/or the passage of any applicable time period to
cure, would constitute an Event of Default.
"Default Rate" shall mean, subject to the provisions of
Section 8 hereof, a rate per annum equal to four percent (4%) plus the
Applicable Interest Rate in effect from time to time.
"Event of Default" shall mean the occurrence or happening,
from time to time, of any one or more of the following:
(a) If Borrower shall default in the due and punctual
payment of all or any portion of any installment of the Indebtedness as
and when the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment or by acceleration or
otherwise and, if such default relates to the failure to make a payment
of interest, such default shall continue for a period of three days
from the date that such payment was due.
(b) If Borrower shall default in the payment of any
late charge due under this Note as and when the same shall become due
and payable.
(c) If any Pledgor shall default in the due
observance or performance of any of the Obligations other than payment
of any installment of the Indebtedness and such default shall not be
curable, or if curable shall continue for a period of 30 days after
written notice thereof from Lender to the relevant Pledgor (unless such
default, if curable, requires work to be performed, acts to be done or
conditions to be remedied which by their nature cannot be performed,
done or remedied, as the case may be, within such
<PAGE> 3
3
30-day period and the relevant Pledgor shall commence to cure such
default within such 30-day period and shall thereafter diligently and
continuously process the same to completion, but in no event shall the
period for cure exceed 60 days unless otherwise agreed in writing by
Lender, and in no event shall the period for such cure extend beyond
the Maturity Date).
(d) If voluntary or involuntary proceedings under the
Federal Bankruptcy Code, as amended, shall be commenced by or against
either Borrower, any Project Owner, York, any Pledgor or the REIT, or
bankruptcy, receivership, insolvency, reorganization, dissolution,
liquidation or other similar proceedings shall be instituted by or
against either Borrower, any Project Owner, York, any Pledgor or the
REIT with respect to all or any part of the property of either
Borrower, any Project Owner, York, such Pledgor or the REIT under the
Federal Bankruptcy Code, as amended, or other law of the United States
or of any state or other competent jurisdiction, and if such
proceedings are instituted against either Borrower, any Project Owner,
York, any Pledgor or the REIT, any such party shall consent thereto or
shall fail to cause the same to be discharged within 60 days.
(e) If any representation or warranty made by any
Borrower or any Pledgor in, under or pursuant to this Note, the Pledge
Agreement or the other Loan Documents shall prove to have been false or
misleading in any material respect as of the date on which such
representation or warranty was made.
(f) If any lender or servicer institutes foreclosure
or other proceedings for the enforcement of its remedies under any of
the Mortgage Loan Documents (as defined in the Pledge Agreement), or if
a default exists and is continuing beyond any applicable grace or cure
period under any Mortgage Loan Document. Notwithstanding anything
herein to the contrary, the filing of a foreclosure proceeding or suit
to collect any loan under the Mortgage Loan Documents shall, at
Lender's sole option and without notice to Borrower, immediately
constitute an Event of Default hereunder.
<PAGE> 4
4
(g) If a default shall occur and be continuing after
the expiration of any applicable grace or cure period under any of the
Loan Documents.
(h) If a final judgment for the payment of money in
excess of Two Hundred Fifty Thousand Dollars ($250,000.00) shall be
rendered against any Project Owner or York, or if a final judgment for
the payment of money in excess of One Million Dollars ($1,000,000)
shall be rendered against either GPLP or the REIT and the same shall
remain unpaid for a period of 60 days during which period execution
shall not be effectively stayed.
(i) The dissolution or termination, as may be
applicable, of any Project Owner, York, any Pledgor or the REIT.
(j) If any Project Owner, York or GPI shall default
in the timely payment of any outstanding indebtedness which it is
legally obligated to pay in excess of $250,000, in aggregate, or if
either GPLP or the REIT shall default in the timely payment of any
outstanding indebtedness which it is legally obligated to pay in excess
of $1,000,000, in the aggregate, or if a joint venture (other than any
Project Owner) in which GPLP is a member or partner shall default in
the timely payment of any outstanding indebtedness which it is legally
obligated to pay in excess of $1,000,000, in the aggregate, in each
case beyond any applicable cure or grace period.
(k) Any Loan Document shall for any reason cease to
be valid and binding on or enforceable or create the security interest
it purports to create against Borrower or the Pledgors, as the case may
be, or their assets, any other person party thereto or any collateral
is transferred or assigned in breach of the terms of the Loan
Documents.
(l) If, with respect to any calendar month, the
Qualifying Cash Flow After Debt Service for all Projects and Other
Property in the aggregate shall fall below $660,000.
(m) If there shall occur a material adverse change in
the financial condition or business prospect of any Project Owner or
any Project.
<PAGE> 5
5
(n) If the New Collateral (together with other
customary documentation) is not delivered to Lender on or before
October 31, 1998.
"Extended Maturity Date" shall have the meaning assigned to
such term in Section 5 hereof.
"Extension" shall have the meaning assigned to such term in
Section 5 hereof.
"Extension Fee" shall mean a fee payable to Lender in
consideration for the Extension, in an amount equal to 0.50% of the
Principal Balance.
"Extension Notice" shall have the meaning assigned to such
term in Section 5(a) hereof.
"Indebtedness" shall mean the principal of and accrued
interest on and all other amounts, payments and premiums due under this
Note (including any future advances), and all other amounts, now
existing or hereafter arising of any Pledgor owing to Lender under
and/or secured by the Loan Documents, or any amendments, modifications,
renewals, substitutions and extensions of any of the foregoing.
"Initial LIBOR Rate" shall have the meaning assigned to such
term in Section 3 hereof.
"Initially Scheduled Maturity Date" shall mean December 15,
1998.
"Interest Payment Date" shall have the meaning assigned to
such term in Section 4(a) hereof.
"LIBOR Rate" shall mean either (i) the rate per annum for U.S.
dollar deposits with a three month maturity in the London U.S. dollar
interbank market appearing on Telerate Page 3750 as of 11:00 a.m. New
York City time on the day that the Applicable Interest Rate is to be
determined hereunder, rounded upward to the nearest whole multiple of
1/100 of 1% per annum, or (ii) if the rate referred to in the preceding
subparagraph (i) is not available or cannot be determined, such other
page or service that shall replace it
<PAGE> 6
6
for purposes of displaying London interbank offered rates of major U.S.
banks for U.S. Dollar deposits.
"Loan" shall mean the loan made by Lender to Borrower
evidenced by this Note.
"Loan Documents" shall mean this Note, the Pledge Agreement
and any and all other documents now or hereafter executed by either
Pledgor by or in favor of Lender, which wholly or partially evidence,
guaranty, or secure the Loan, or are executed in connection therewith,
together with all amendments, modifications, renewals, substitutions
and extensions of any of the foregoing.
"Loan Month" shall mean any full calendar month during the
term of this Note, with the first Loan Month being September 1998.
"Maturity Date" shall mean the earlier to occur of (i) the
Initially Scheduled Maturity Date (or in the event that this Note is
extended in accordance with Section 5 hereof, the Extended Maturity
Date), or (ii) the date on which the entire principal amount evidenced
by this Note and all accrued interest thereon shall be paid or be
required to be paid in full, whether by prepayment, acceleration or
otherwise; provided, that Lender shall have the right to give written
notice to Borrower at any time after October 31, 1998 of demand for
payment in full of the entire principal amount of the Note and all
accrued interest thereon, which shall then become due and payable.
"Maximum Rate" shall mean the highest interest rate allowed by
New York law, as applicable, as amended from time to time, in effect on
the date for which a determination of interest accrued hereunder is
made; provided however, if United States federal law is preemptive and
requires a lower interest rate such rate shall be applicable.
"New Collateral" shall mean (i) a first mortgage lien on each
Other Property, which lien shall be insured by a national title
insurance company, and which lien shall be subject only to such
exceptions as are acceptable to Lender and its counsel and (ii) a full
pledge by GPLP of 49% of the equity interests in Dayton Mall Venture,
LLC, a Delaware limited
<PAGE> 7
7
liability company and in Glimcher University Mall Limited Partnership,
a Delaware limited partnership.
"Obligations" shall have the meaning assigned to such term in
the Pledge Agreement.
"Other Property" shall mean each property identified on
Exhibit A attached hereto.
"Other Property Owner" shall mean, with respect to the
properties identified on Exhibit A and located in Chatham, New York,
South Glens Falls, New York and Sidney, New York, Glimcher York
Associates Limited Partnership, a Delaware limited partnership and,
with respect to the properties identified on Exhibit A and located in
Mount Vernon, Ohio and Manhattan, Kansas, Glimcher Properties Limited
Partnership, a Delaware limited partnership.
"Pledge Agreement" shall mean that certain Pledge Agreement of
even date herewith, executed by Borrower and certain other entities in
favor of Lender, as the same may be amended, restated, supplemented or
of otherwise modified from time to time.
"Pledgors; Pledgor" shall have the meaning assigned thereto in
the Pledge Agreement.
"Principal Balance" shall mean the balance of the following
sums outstanding from time to time: (i) the initial $10,000,000.00
advanced hereunder, plus (ii) any other sums advanced under the Loan
Documents, less (iii) any applicable reduction of principal made in
accordance with the terms of this Note.
"Project" shall mean each of Montgomery Mall, Montgomery
County, Alabama; University Mall, Hillsborough County, Florida; and
Dayton Mall, Montgomery County, Ohio.
"Project Expenses" shall mean, with respect to any Project or
Other Property, for any period and as calculated on the accrual basis
of accounting, all expenses incurred by any Project Owner or Other
Property Owner during such period in connection with the ownership,
management, operation,
<PAGE> 8
8
cleaning, maintenance, repair, restoration or leasing of such Project
or Other Property, including:
(a) costs and expenses in connection with the
cleaning, ordinary repair, maintenance, decoration and painting of such
Project or Other Property;
(b) wages, benefits, payroll taxes, uniforms,
insurance costs and all other related expenses for employees of such
Project Owner or Other Property Owner engaged in the management,
operation, cleaning, maintenance, repair, restoration and leasing of
such Project or Other Property and service to tenants at such Project
or Other Property;
(c) management fees in an assumed amount equal to
4-1/2% of the gross revenues;
(d) the cost of all services and utilities with
respect to such Project or Other Property, including all electricity,
oil, gas, water, steam, heating, ventilation, air conditioning,
elevator, escalator, landscaping, model furniture, answering services,
telephone maintenance, credit check, snow removal, trash removal and
pest extermination costs and expenses and any other energy, utility or
similar item and overtime services with respect to such Project or
Other Property;
(e) the cost of building and cleaning supplies with
respect to such Project or Other Property;
(f) insurance premiums;
(g) legal, accounting and engineering fees, costs and
expenses incurred by or on behalf of such Project Owner or Other
Property Owner in connection with the ownership, management, operation,
maintenance, repair, restoration, and leasing of such Project or Other
Property, including collection costs and expenses;
(h) costs and expenses of security and security
systems provided to and/or installed and maintained with respect to
such Project or Other Property;
<PAGE> 9
9
(i) real property taxes and assessments with respect
to such Project or Other Property and the costs incurred in seeking to
reduce such taxes or the assessed value of such Project or Other
Property;
(j) advertising, marketing and promotional costs and
expenses with respect to such Project or Other Property;
(k) costs and expenses incurred in connection with
lock changes, storage, moving, appraisals, surveys, valuations, title
insurance, inspections, market surveys, permits (and the application or
registration therefor), and licenses (and the application or
registration therefor) with respect to such Project or Other Property;
(l) maintenance and cleaning costs related to tenant
amenities with respect to such Project or Other Property;
(m) contributions by such Project Owner or Other
Property Owner to any merchants' association, whether as dues or
advertising costs or otherwise with respect to such Project or Other
Property;
(n) costs incurred pursuant to any reciprocal
easement agreement affecting such Project or Other Property;
(o) refunds such Project Owner or Other Property
Owner must pay to tenants and other occupants of such Projects; and
(p) all other ongoing expenses which in accordance
with the accrual basis of accounting should be included in such Project
Owner's or Other Property Owners' annual financial statements as
operating expenses of such Project or Other Property.
Notwithstanding the foregoing, Project Expenses shall not
include depreciation and amortization.
"Project Income" shall mean, for any period and as calculated
on the accrual basis of accounting, all regular income received during
such period from the operation of and with respect to each Project and
Other Property, as follows:
<PAGE> 10
10
(a) all rents, other income, forfeited security
deposits and other benefits which such Project Owner or Other Property
Owner now or hereafter receive from or in connection with such Project
or Other Property, including all income received from tenants,
licensees, concessionaires and other persons for the occupancy of space
at such Project or Other Property and/or for rendering services to such
Project's or Other Propertys' tenants and other occupants, but
excluding, however, any moneys refunded to such Project Owner or Other
Property Owner as a result of tax certiorari or similar proceedings if
and only to the extent such refund relates to impositions assessed for
a fiscal period ending prior to the closing date;
(b) rent and business interruption insurance proceeds
with respect to such Project or Other Property; and
(c) all other amounts with respect to such Project or
Other Property which are included in the Project Owner's or Other
Property Owners' annual accrual basis financial statements as operating
income.
Notwithstanding the foregoing, Project Income with
respect to each Project or Other Property shall not include (a) any
condemnation proceeds or insurance proceeds (other than insurance
proceeds with respect to rental loss or business interruption insurance
or condemnation proceeds with respect to a temporary taking with
respect to such Project or Other Property and, in either such case,
only to the extent allocable to the applicable period), (b) any
proceeds resulting from the sale, exchange, transfer, financing or
refinancing of all or any portion of such Project or Other Property,
(c) any rent attributable to a lease agreement affecting such Project
or Other Property prior to the date on which the actual payment of rent
is required to commence thereunder (provided that such prepaid rent
shall be included in Project Income at such time as the obligation to
pay such rent accrues), (d) any item of income otherwise includable in
Project Income with respect to such Project or Other Property but paid
directly by any tenant to a person other than the respective Project
Owner or Other Property Owner, or (e) security deposits received from
tenants with respect to such Project or Other Property until forfeited.
<PAGE> 11
11
"Project Owner" shall mean each of Dayton Mall Venture, LLC, a
Delaware limited liability company; Glimcher University Mall Limited
Partnership, a Delaware limited partnership; and Montgomery Mall
Associates Limited Partnership, a Delaware limited partnership.
"Qualifying Cash Flow After Debt Service" shall mean, with
respect to any Project or Other Property, the portion of Cash Flow
After Debt Service that is payable to each Pledgor.
"REIT" shall mean GPC.
"York" shall mean Glimcher York Associates Limited
Partnership, a Delaware limited partnership.
2. THE LOAN. On the date hereof, Lender has advanced the Loan in the
amount of $10,000,000 to Borrower.
3. INTEREST RATE. Subject to Sections 8, 10 and 11 below, from the date
of this Note to and including the Maturity Date, the Principal Balance shall
bear interest at the Applicable Interest Rate from time to time in effect. The
initial Applicable Interest Rate shall be based upon the LIBOR Rate in effect
(the "Initial LIBOR Rate") on the last business day prior to the date hereof.
The Applicable Interest Rate shall be adjusted monthly, commencing on the first
day of the calendar month immediately following the date hereof and on the first
day of each succeeding month to and including the first day of the month in
which the Maturity Date occurs; provided, however, that such Applicable Interest
Rate shall be based on the LIBOR Rate in effect on the last business day of the
preceding calendar month. Interest shall be calculated using the actual days the
Principal Balance is outstanding hereunder divided by 360 days and multiplied by
the Applicable Interest Rate.
<PAGE> 12
12
4. PAYMENT OF PRINCIPAL AND INTEREST.
(a) Payment of Interest. Commencing on October 1, 1998, and on
the first day of each succeeding month (each, an "Interest Payment
Date") to and including the first day of the Loan Month in which the
Initially Scheduled Maturity Date (or the Extended Maturity Date, if
applicable) occurs, interest on the Principal Balance of the Loan at
the Applicable Interest Rate shall be payable monthly in arrears.
(b) Payments on the Maturity Date. On the Maturity Date, a
final installment shall be payable, which installment shall include:
(i) all unpaid amounts of the Principal Balance of
the Loan;
(ii) interest accrued and unpaid thereon at the
Applicable Interest Rate; and
(iii) all other sums due under this Note, the Pledge
Agreement and the other Loan Documents.
5. EXTENSION. So long as no Event of Default has occurred and is
continuing, Borrower shall have the right to extend the maturity of this Note to
the date (the "Extended Maturity Date") that is 180 days from the date hereof
(the "Extension") provided that Borrower's right to extend the Loan shall be
subject to the delivery to Lender of (a) a written notice (the "Extension
Notice") of the proposed extension on or before a date which is not less than
ten (10) days prior to the Initially Scheduled Maturity Date, and (b) the
Extension Fee on the date that the Extension Notice is delivered.
6. APPLICATION OF PAYMENTS. Each payment received by Lender from
Borrower with respect to this Note shall be applied: First, to the payment of
any late charges due and payable hereunder; Second, to the repayment of any
amounts advanced by Lender in accordance with the Loan Documents for insurance
premiums, taxes, assessments or for preservation or protection of the collateral
covered by those documents and to the payment of all costs and expenses incurred
by Lender in connection with the collection of this Note (including, without
limitation, all
<PAGE> 13
13
attorneys' fees payable hereunder); Third, to the payment of accrued interest;
and Fourth, to reduction of the Principal Balance, or in such order or
proportion as Lender, in Lender's sole discretion, may determine. Payments shall
be deemed made when checks drawn against good funds are received by Lender.
7. PREPAYMENT.
(a) This Note may be prepaid in whole but not in part at any
time without premium, on any Interest Payment Date upon not less than
10 days prior written notice to Lender (in accordance with the terms of
this Section), provided that any such prepayment of all or any portion
of the Principal Balance, whether voluntary or involuntary, shall be
accompanied by interest accrued to the date of prepayment on the
principal amount prepaid.
(b) Amounts prepaid under this Note may not be reborrowed.
(c) In the event of a sale of any Project or Other Property,
the net proceeds payable to the respective Project Owner or Other
Property Owner shall, within two (2) days of such sale, be paid to
Lender, in repayment of the unpaid principal balance of the Note.
8. MAXIMUM RATE OF INTEREST. All agreements between the Borrower and
the Lender, whether now existing or hereafter arising and whether written or
oral, are hereby expressly limited so that in no contingency or event, whether
by reason of acceleration of the maturity of this Note or otherwise, shall the
amount paid, or agreed to be paid to Lender for the use, forbearance, or
detention of the money to be loaned under this Note or otherwise or for the
payment or performance of any covenant or obligation contained herein or in any
other document evidencing, securing or pertaining to the Loan exceed the Maximum
Rate. If from any circumstances whatsoever fulfillment of any provision hereof
or any of such other agreements shall cause the amount paid to exceed the
Maximum Rate, then ipso facto, the amount paid to Lender shall be reduced to the
Maximum Rate, and if from any such circumstances the Lender shall ever receive
interest or an amount which might be deemed interest under applicable law which
exceeds the Maximum Rate, such amount which would be excessive interest shall be
applied to the reduction of
<PAGE> 14
14
the principal of this Note and not to the payment of interest, or if such
excessive interest exceeds the unpaid balance of principal of this Note such
excess shall be refunded to the Borrower. All sums paid or agreed to be paid to
Lender for the use, forbearance or detention of the indebtedness of Borrower to
Lender, shall, to the extent permitted by applicable law, (i) be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the actual rate of interest on account of such
indebtedness does not exceed the Maximum Rate now or as hereafter amended,
throughout the term thereof, (ii) be characterized as a fee, expense or other
charge other than interest, and/or (iii) exclude any voluntary prepayments and
the effects thereof. The terms and provisions of this paragraph shall control
and supersede every other provision of all agreements between the Lender and the
Borrower.
9. SECURITY. Payment of this Note is secured by the Pledge Agreement
and the Loan Documents. All of the agreements, conditions, covenants, provisions
and stipulations contained in the Pledge Agreement and the other Loan Documents
which are to be kept and performed by Borrower are hereby made a part of this
Note to the same extent and with the same force and effect as if they were fully
set forth herein, and Borrower covenants and agrees to keep and perform them, or
cause them to be kept and performed, strictly in accordance with their terms.
10. LATE CHARGES. Time is of the essence hereof and if any of the
Principal Balance or interest on this Note or other sum due hereunder is not
paid within 10 days of notice that such payment is due, Borrower shall, at
Lender's sole option, pay to Lender a late charge payment of up to four percent
(4%) of the amount of such installment as specified in a written demand for
same. Such late charge shall not be applicable to the total payment due on the
Maturity Date; provided, however, no applicable grace or cure period shall apply
to such final payment. Such late charge shall be paid without prejudice to the
right of Lender to collect any other amounts provided to be paid or to declare a
default under this Note, the Pledge Agreement or the Loan Documents. Any late
charges which may accrue shall be due and payable not later than the date the
next monthly installment is due under this Note. Borrower agrees that the late
charge is intended to compensate Lender for damages Lender will suffer as a
result of Borrower's late payment. Such damages
<PAGE> 15
15
include additional expenses in servicing the Loan, sending out notices,
computing interest, segregating delinquent sums and accounting and data
processing costs. Borrower agrees that such damages are difficult or impractical
to ascertain, and the late charge is a fair and reasonable approximation of the
amount of damages sustained by Lender for each late payment. Notwithstanding
anything herein to the contrary, the 10 day grace period is only applicable with
respect to the assessment of the late charge, and should not be construed as a
modification or waiver of the due date otherwise specified for any sums due
Lender hereunder or under the other Loan Documents. Failure to pay said late
charge following written demand shall constitute an Event of Default.
11. DEFAULT. Upon the occurrence of any Event of Default, the
outstanding balance of this Note, plus all amounts then unpaid under any Loan
Document, shall each bear interest at the Default Rate for so long as the Event
of Default shall remain uncured, payable on each Interest Payment Date. In
addition, Lender, at its option and without further notice, demand or
presentment for payment to Borrower or others, may declare immediately due and
payable the unpaid Principal Balance and interest accrued thereon together with
all other sums owed by Borrower under this Note, the Pledge Agreement and the
other Loan Documents (including, but not limited to reasonable attorneys' fees
as provided in Section 13), anything in this Note, the Pledge Agreement and the
other Loan Documents to the contrary notwithstanding. Payment of such sums may
be enforced and recovered in whole or in part at any time by one or more of the
remedies provided to Lender in this Note, the Pledge Agreement or the other Loan
Documents. Notwithstanding the foregoing, upon an Event of Default under clause
(d) of the definition thereof, the unpaid Principal Balance and interest accrued
thereon together with all other sums owed by Borrower under this Note, the
Pledge Agreement and the other Loan Documents (including, but not limited to
reasonable attorneys' fees as provided in Section 13) shall automatically become
due and payable.
12. REMEDIES CUMULATIVE. The remedies of Lender, as provided in this
Note, the Pledge Agreement and the Loan Documents, shall be cumulative and
concurrent and may be pursued singularly, successively or together, at the sole
discretion of Lender, and may be exercised as open as occasion therefor shall
occur; and the failure to exercise any such right or remedy shall
<PAGE> 16
16
in no event be construed as a waiver or release thereof. In any action, sale of
collateral, or other proceedings to enforce this Note, the Pledge Agreement or
any other Loan Document, Lender need not file or produce the original of this
Note, but only need file or produce a photocopy of this Note certified by Lender
to be a true and correct copy of this Note.
13. ATTORNEYS' FEES. In the event that suit be brought hereon, or an
attorney be employed or expenses be incurred to compel payment of this Note or
any portion of the indebtedness evidenced hereby, or to defend the Lender's
interest under the Pledge Agreement or as otherwise provided in the Pledge
Agreement, Borrower promises to pay all such reasonable attorneys' fees, costs
and expenses (including attorneys' fees incurred in collecting attorneys' fees)
all as actually incurred by Lender as a result thereof and including, without
limitation (a) reasonable attorneys' fees, costs and expenses incurred in
appellate proceedings or in any action or participation in, or in connection
with, any case or proceeding under Chapters 7 or 11 of the United States
Bankruptcy Code or any successor thereto, and (b) reasonable attorneys fees,
costs and expenses incurred as a result of Lender exercising its rights to cure
any Event of Default by Borrower under this Note, the Pledge Agreement or any
other Loan Document, or as a result of the foreclosure, assignment in lieu
thereof or enforcement of the Pledge Agreement. Additionally, Borrower agrees to
pay all reasonable attorneys' fees, costs and expenses attributable to any
subsequent modification or restructure of this Note.
14. WAIVER OF NOTICE BY BORROWER. BORROWER WAIVES DILIGENCE,
PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF DEMAND, NOTICE OF PROTEST, NOTICE OF
NONPAYMENT OR DISHONOR, NOTICE OF INTENTION TO ACCELERATE, NOTICE OF
ACCELERATION, PROTEST AND NOTICE OF PROTEST OF THIS NOTE, AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ALL OTHER NOTICES (EXCEPT AS EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS) IN CONNECTION WITH THE DELIVERY, ACCEPTANCE,
PERFORMANCE, DEFAULT, OR ENFORCEMENT OF THE PAYMENT OF THIS NOTE. BORROWER
FURTHER WAIVES ALL VALUATION AND APPRAISEMENT PRIVILEGES, THE BRINGING OF SUIT,
CLAIMS OF LACK OF DILIGENCE OR DELAYS IN COLLECTION OR ENFORCEMENT OF THIS NOTE,
THE RELEASE OF ANY PARTY LIABLE, THE RELEASE OF ANY SECURITY FOR THE DEBT, THE
TAKING OF ANY ADDITIONAL SECURITY AND ANY OTHER INDULGENCE OR FORBEARANCE.
<PAGE> 17
17
15. NO WAIVER BY LENDER. Lender shall not be deemed, by any act of
omission or commission, to have waived any of its rights or remedies hereunder
unless such waiver is in writing and signed by Lender, and then only to the
extent specifically set forth in the writing. The acceptance by Lender of any
payment hereunder which is less than payment in full of all amounts due and
payable at the time of such payment shall not constitute a waiver of the right
to exercise any of the foregoing options at that time or at any subsequent time
or nullify any prior exercise of any such option without the express consent of
Lender, except as and to the extent otherwise provided by law. A waiver with
reference to one event shall not be construed as continuing or as a bar to or
waiver of any right or remedy as to a subsequent event.
16. GOVERNING LAW AND CONSENT TO JURISDICTION. PURSUANT TO SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BORROWER AGREES
THAT THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF
AMERICA AND THE LAWS OF THE STATE OF NEW YORK (EXCLUSIVE OF ITS LAWS RELATING TO
CONFLICT OF LAWS). IN ACCORDANCE WITH SECTION 5-1402 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK, BORROWER AGREES THAT ANY ACTION TO ENFORCE THE
TERMS OF THIS NOTE MAY BE COMMENCED IN ANY COURT LOCATED IN THE STATE OF NEW
YORK. BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, AND BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING. AT THE SOLE OPTION OF LENDER, LENDER MAY BRING AN ACTION TO ENFORCE
THIS NOTE IN THE STATE OF OREGON AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF UNITED STATES DISTRICT COURT FOR THE STATE OF OREGON OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, AND BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING.
17. CONSTRUCTION OF CERTAIN TERMS. Whenever used, the singular number
shall include the plural, the plural shall include the singular, and the words
"Lender" and "Borrower" shall
<PAGE> 18
18
be deemed to include their respective heirs, administrators, executors,
successors and assigns.
18. NOTICE. All notices which Lender or Borrower may be required or
permitted to give hereunder shall be made in the same manner as set forth in
Section 17 of the Pledge Agreement.
19. SEVERABILITY OF PROVISIONS. In the event any one or more of the
provisions hereof shall be invalid, illegal or unenforceable in any respect, the
validity of the remaining provisions hereof shall be in no way affected,
prejudiced or disturbed thereby.
20. SALE OF INTEREST. Borrower acknowledges that Lender may, in its
sole discretion, sell all or any part of its interest in the Loan as evidenced
by this Note, including participating interests therein. Any such sale may be at
a discount or premium, subject to a brokerage fee or involve a servicing
agreement.
21. HEADING. The section captions are inserted for convenience of
reference only and shall in no way alter or modify the text of such sections.
22. WAIVER OF JURY TRIAL. BORROWER AND LENDER MUTUALLY, EXPRESSLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY FOR ANY PROCEEDINGS ARISING
OUT OF OR IN CONNECTION WITH THIS NOTE, OR ANY OTHER SECURITY DOCUMENT CONNECTED
WITH THIS TRANSACTION, IN THE INTEREST OF AVOIDING DELAYS AND EXPENSES
ASSOCIATED WITH JURY TRIALS.
23. ENTIRE AGREEMENT. Borrower and Lender, by acceptance of this Note,
hereby agree that the Loan Documents supersede any prior oral or written
agreements of the parties.
24. TIME OF THE ESSENCE. Time is of the essence for the performance of
each and every covenant of Borrower hereunder. No excuse, delay, act of God, or
other reason, whether or not within the control of Borrower, shall operate to
defer, reduce or waive Borrower's performance of any such covenant or
obligation.
<PAGE> 19
19
25. FEES AND EXPENSES. (a) On the date hereof, the Borrower shall pay
or reimburse the Lender for all of its reasonable costs and expenses incurred in
connection with the negotiation, preparation and execution of, the Loan
Documents, and any other documents and instruments prepared in connection
herewith or therewith, and the consummation of the transactions contemplated
hereby, including, without limitation, Lender's due diligence and underwriting
expenses, appraisal fees, the reasonable fees and disbursements of Lender's
outside counsel and special local counsel to the Lender. If invoices are not
available for any of such costs and expenses, Borrower shall pay such costs and
expenses promptly after request by Lender.
(b) On the date hereof, Borrower shall pay to Lender a loan
fee equal to 1.5% of the original principal amount of this Note.
26. JOINT AND SEVERAL OBLIGATIONS. The obligations of each Borrower
under this Note shall be joint and several and Lender may enforce such
obligations against either or both parties comprising Borrower in such order as
Lender may determine in its sole discretion.
27. FINANCIAL REPRESENTATIONS. The Qualifying Cash Flow After Debt
Service with respect to all of the Projects and Other Property in the aggregate
for the trailing twelve month period ending August 31, 1998 was approximately
$8,800,000.
28. FINANCIAL STATEMENTS. Not later than thirty (30) days after the end
of each monthly period, each Project Owner and Other Property Owner shall
prepare, or cause to be prepared, and deliver to Lender, monthly operating
statements relating to its respective Project or Other Property for such monthly
period (which statements shall include income and disbursements). Each Project
Owner and Other Property Owner shall provide, along with the such financial
statements required by this Section, a statement of the Qualifying Cash Flow
After Debt Service for the immediately preceding month completed.
<PAGE> 20
20
IN WITNESS WHEREOF, each Borrower, intending to be legally bound
hereby, has duly executed this Note the day and year first above written.
GLIMCHER PROPERTIES LIMITED PARTNERSHIP
By: Glimcher Properties Corporation,
general partner
By: /s/ George A. Schmidt
-------------------------------
Name: George A. Schmidt
Title: Senior Vice President
GLIMCHER PROPERTIES CORPORATION
By: /s/ George A. Schmidt
-------------------------------
Name: George A. Schmidt
Title: Senior Vice President
<PAGE> 21
EXHIBIT A
1. Grand Union, Chatham, New York
2. Grand Union, South Glens Falls, New York
3. Grand Union, Sidney, New York
4. Mount Vernon Plaza, Mount Vernon, Ohio
5. Village Plaza, Manhattan, Kansas
<PAGE> 1
Exhibit 10.77
PROMISSORY NOTE
$14,000,000.00 Columbus, Ohio October 13, 1998
FOR VALUE RECEIVED, the undersigned, jointly and severally if more
than one, promise to pay to the order of THE HUNTINGTON NATIONAL BANK
(hereinafter called the "Bank," which term shall include any holder hereof) at
such place as the Bank may designate or, in the absence of such designation, at
any of the Bank's offices, the sum of Fourteen Million and 00/100 Dollars
($14,000,000.00), or so much thereof as shall have been advanced by the Bank at
any time and not hereafter repaid (hereinafter referred to as the "Principal
Sum"), together with interest as hereinafter provided and payable at the time(s)
and in the manner(s) hereinafter provided. The undersigned agree that the
advance of the Principal Sum made by the Bank will be evidenced by entries made
by the Bank into its electronic data processing system and/or internal memoranda
maintained by the Bank. The undersigned further agree that the sum or sums shown
on the most recent printout from the Bank's electronic data processing system
and/or on such memoranda shall be rebuttably presumptive evidence of the amount
of the Principal Sum and of the amount of any accrued interest.
INTEREST
Interest shall accrue on the outstanding balance of the Principal
Sum at a rate of interest equal to the LIBO Rate (as hereinafter defined) plus
three percent (3%) per annum. At all times during such periods as the LIBO Rate
may become unavailable pursuant to the terms of this Note, interest will accrue
on the unpaid balance of the Principal Sum until paid at a variable rate of
interest per annum, which shall change in the manner set forth below, equal to
the Prime Commercial Rate.
All interest shall be calculated on the basis of a 360 day year
for the actual number of days the Principal Sum or any part thereof remains
unpaid. Upon default, whether by acceleration or otherwise, interest will accrue
on the unpaid balance of the Principal Sum and unpaid interest, if any, until
paid at a variable rate of interest per annum, which shall change in the manner
set forth below, equal to the Prime Commercial Rate plus two percent (2%).
As used herein, Prime Commercial Rate shall mean the rate
established by the Bank from time to time based on its consideration of
economic, money market, business and competitive factors. The Prime Commercial
Rate is not necessarily the Bank's most favored rate. Subject to any maximum or
minimum interest rate limitation specified herein or by applicable law, the rate
of interest on every Prime Interest Rate Advance obtained hereunder shall change
automatically without notice to the undersigned immediately with each change in
the Prime Commercial Rate. "Prime Interest Rate Advance" shall mean any amount
borrowed pursuant to this Note that bears interest at a rate calculated with
reference to the Prime Commercial Rate.
<PAGE> 2
"LIBO Rate" shall mean, with respect to any LIBO Rate Advance (as
hereinafter defined) and the related Interest Period (as hereinafter defined),
the per annum rate that is equal to the quotient of:
(a) the actual or estimated arithmetic mean of the per annum rates
of interest at which deposits in U.S. dollars for a period of one (1) month and
in an aggregate amount comparable to the amount of such LIBO Rate Advance are
being offered to U.S. banks by one or more prime banks in the London interbank
market on the LIBO business day on which the determination is made or, if
determination is made on a day other than a LIBO business day, on the most
recently elapsed LIBO business day, as determined by the Bank in its discretion
based upon reference to information appearing in Telerate, a service of Telerate
Systems Incorporated, in the section captioned "British Bankers Assoc. Interest
Settlement Rates," or any comparable index selected by the Bank, the obtaining
of rate quotations, or any other reasonable procedure, all as determined by the
Bank; divided by
(b) a percentage equal to 100% minus the rate (expressed as a
percentage), if any, at which reserve requirements are imposed on the Bank, as
of the most recent LIBO business day with respect to any "Eurocurrency
liabilities" under Regulation D of the Board of Governors of the Federal Reserve
System or any other regulations of any governmental authority having
jurisdiction with respect thereto (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) for an interest period of
one (1) month. This provision is for the benefit of the Bank and is not intended
to increase the expected yield to the Bank above the rates of interest provided
for in this Note.
"LIBO Rate Advance" shall mean any amount borrowed pursuant to
this Note that bears interest at a rate calculated with reference to the LIBO
Rate. "LIBO business day" shall mean, with respect to any LIBO Rate Advance, a
day which is both a day on which the Bank is open for business and a day on
which dealings in U.S. dollar deposits are carried out in the London interbank
market. Subject to any maximum or minimum interest rate limitation specified
herein or by applicable law, the rate of interest on every LIBO Rate Advance
obtained hereunder shall change automatically without notice to the undersigned
immediately with each change in the LIBO Rate.
"Interest Period" shall mean:
(a) With respect to any LIBO Rate Advance, an initial period
commencing, as the case may be, on the day such an Advance shall be made by the
Bank, or on the day of conversion of any then outstanding Advance to an Advance
of such type, and ending on the date one (1) month thereafter, provided, that
(a) any Interest Period with respect to a LIBO Rate Advance that shall commence
on the last LIBO business day of the calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last LIBO business day of the appropriate subsequent
calendar month; and (b) each
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<PAGE> 3
Interest Period with respect to a LIBO Rate Advance that would otherwise end on
a day which is not a LIBO business day shall end on the next succeeding LIBO
business day or, if such next succeeding LIBO business day falls in the next
succeeding calendar month, on the next preceding LIBO business day.
(b) With respect to a Prime Interest Rate Advance, an initial
period commencing, as the case may be, on the day such an Advance shall be made
by the Bank, or on the day of conversion of any then outstanding Advance to an
Advance of such type, and ending on the day of conversion to an Advance of a
different type.
Notwithstanding the provisions of (a) or (b) above, no Interest
Period shall be permitted which would end after the maturity of this Note.
Interest shall be due and payable on each Interest Payment
Date. "Interest Payment Date" shall mean the last day of each Interest Period,
the date of conversion from one type of Advance to another type of Advance and,
in the case of a Prime Interest Rate Advance, the first business day of each
month.
In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect, or any interpretation
or administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Bank with any
request or directive of any such authority (whether or not having the force of
law) (each of the foregoing being referred to as a "Regulatory Requirement"),
shall (a) affect the basis of taxation of payments to the Bank of any amounts
payable by the undersigned for LIBO Rate Advances under this Note (other than
taxes imposed on the overall net income of the Bank by the jurisdiction, or by
any political subdivision or taxing authority of any such jurisdiction, in which
the Bank has its principal office), or (b) shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by the Bank, or (c)
shall impose any other condition, requirement or charge with respect to this
Note (including, without limitation, any capital adequacy requirement, any
requirement which affects the manner in which the Bank allocates capital
resources to its commitments or any similar requirement), and the result of any
of the foregoing is to increase the cost to the Bank of making or maintaining
the loan evidenced hereby or any Advance thereunder, to reduce the amount of any
sum receivable by the Bank thereon, or to reduce the rate of return on the
Bank's capital, provided such Regulatory Requirement is then being applied or
directed to all banks or a class of banks and not just one or more banks as a
result of their non-compliance with existing laws, treaties, rules or
regulations or existing directive of an authority interpreting or administering
the same, then the undersigned shall pay to the Bank, from time to time, upon
request of the Bank, additional amounts sufficient to compensate the Bank for
such increased cost, reduced sum receivable or reduced rate of return
(collectively, "Reduced Earnings") to the extent the Bank is not compensated
therefor in the computation of the interest rates applicable to the Principal
Sum and provided such Reduced Earnings are not the result of a decline in the
economic performance of such bank not resulting
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<PAGE> 4
from a Regulatory Requirement. A detailed statement as to the amount of such
Reduced Earnings, prepared in good faith and submitted by the Bank to the
undersigned, shall be conclusive and binding for all purposes relative to the
Bank, absent manifest error in computation. This provision shall survive the
payment in full of this Note.
Notwithstanding any other provision of this Note to the
contrary, if, upon receiving a request for an Advance or a request for a
continuation of an Advance as an Advance of the then existing type or conversion
of an Advance to an Advance of another type (a) in the case of any LIBO Rate
Advance, deposits in dollars for periods of one (1) month are not available to
the Bank in the London interbank market, or (b) the LIBO Rate will not
accurately cover the cost to the Bank of making or maintaining the related LIBO
Rate Advance, or (c) by reason of national or international financial, political
or economic conditions or by reason of any applicable law, treaty, rule or
regulation (whether domestic or foreign) now or hereafter in effect, or the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by the Bank
with any request or directive of such authority (whether or not having the force
of law), including without limitation exchange controls, it is impracticable,
unlawful or impossible for the Bank (i) to make the relevant LIBO Rate Advance
or (ii) to continue such Advance as a LIBO Rate Advance or (iii) to convert an
Advance to a LIBO Rate Advance, then the undersigned shall not be entitled, so
long as such circumstances continue, to request a LIBO Rate Advance or a
continuation of or conversion to such Advance from the Bank. In the event that
such circumstances no longer exist, the Bank shall again consider requests for
LIBO Rate Advances and requests for continuations of and conversions to such
type of Advance.
In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect, or any interpretation
or administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Bank with any
request or directive of such authority (whether or not having the force of law),
including without limitation exchange controls, shall make it unlawful or
impossible for the Bank to maintain any Advance under this Note, the undersigned
shall, upon receipt of notice thereof from the Bank, repay in full the then
outstanding principal amount of all Advances made by the Bank together with all
accrued interest thereon to the date of payment and all other amounts due to the
Bank hereunder, (a) on the next Interest Payment Date, if the Bank may lawfully
continue to maintain such Advance to such day, or (b) immediately if the Bank
may not continue to maintain such Advance to such day. This provision is for the
benefit of the Bank and is not intended to increase the yield to the Bank above
the rates of interest provided for in this Note. This paragraph shall apply only
as long as such illegality exists. The Bank shall use reasonable, lawful efforts
to avoid the impact of such law, treaty, rule or regulation. As an alternative
to the repayment obligation provided in this paragraph, the undersigned may, at
its option, and at the time provided in this paragraph, convert any affected
Advance to a Prime Interest Rate Advance.
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<PAGE> 5
If the undersigned fails to borrow any Advance after notice has
been given to the Bank, or fails to make any payment of principal or interest in
respect of an Advance when due or at the maturity of this Note, the undersigned
shall reimburse the Bank on demand for any resulting loss or expense incurred by
the Bank, determined in the Bank's reasonable opinion, including without
limitation any loss incurred in obtaining, liquidating or employing deposits
from third parties. A detailed statement as to the amount of such loss or
expense, prepared in good faith and submitted by the Bank to the undersigned
shall be conclusive and binding for all purposes absent manifest error in
computation.
MANNER OF PAYMENT
The undersigned agree to pay an origination fee in the amount of
$70,000.00 upon the execution and delivery of this Note. A principal payment in
the amount of $1,000,000.00 shall be payable on January 13, 1999. The balance of
the Principal Sum shall be payable on April 13, 1999. Accrued interest shall be
due and payable on each Interest Payment Date, and at maturity, whether by
demand, acceleration or otherwise.
LATE CHARGE
Any installment or other payment not made within 10 days of the
date such payment or installment is due shall be subject to a late charge equal
to 5% of the amount of the installment or payment.
SECURITY
This Note is secured by real estate mortgage deeds, deeds of
trust and related security documents executed and delivered contemporaneously
herewith.
If, at the time of the payment and discharge hereof, any of the
undersigned shall be then directly or contingently liable to the Bank as maker,
indorser, surety or guarantor of any other note, bill of exchange, or other
instrument that is then in default beyond any applicable cure period, then the
Bank may continue to hold any collateral deposited hereunder after the payment
of this Note for so long as such other note, bill of exchange or other
instrument is in default, and the Bank may thereafter exercise all rights with
respect to said collateral granted herein, even though this Note shall have been
surrendered to the undersigned. The Bank shall not be bound to take any steps
necessary to preserve any rights in the collateral against prior parties. If any
obligation evidenced by this Note is not paid when due, the Bank may, at its
option, demand, sue for, collect or make any compromise or settlement it deems
desirable with reference to the collateral, and shall have the rights of a
secured party under the laws of the State of Ohio, and the undersigned shall be
liable for any deficiency.
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<PAGE> 6
DEFAULT
Upon the occurrence of any of the following events:
(a) the failure of the undersigned to pay any installment on
or before five days after the date such installment is due
hereunder or due under any obligation of the undersigned to the
Bank, whether in the Bank's individual capacity or as the member
of any bank group;
(b) if the undersigned shall fail to furnish true and
complete financial statements from time to time on request of the
Bank;
(c) the dissolution of any of the undersigned, or any
indorser, surety, or guarantor;
(d) if the undersigned or any one of them shall become
insolvent or bankrupt, or make an assignment for the benefit of
creditors or consent to the appointment of a trustee, receiver or
liquidator;
(e) if bankruptcy, reorganization, arrangement, insolvency,
liquidation or receivership proceedings are instituted by or
against the undersigned (or any one of them) under federal or
state law;
(f) if any representation, warranty or other statement given
to the Bank by or on behalf of any of the undersigned, or by any
indorser, surety or guarantor, shall prove to be false, untrue or
misleading in any material respect;
(g) if the undersigned shall fail to perform or observe any
covenant contained in this Note or to perform any obligation of
the undersigned to the Bank, whether in the Bank's individual
capacity or as the member of any bank group, and such failure
continues for more than 30 days after such failure shall first
become known to any executive officer of any of the undersigned or
of any guarantor hereof; or
(h) the failure of the undersigned to pay any sum owing from
the undersigned to any third party pursuant to any agreement to
repay borrowed money, and any applicable grace period has expired;
or
(i) if the Bank shall for any reason deem itself insecure
with respect to the obligations evidenced hereby;
then the Bank may, at its option, without notice or demand, accelerate the
maturity of the obligations evidenced hereby, which obligations shall become
immediately due and payable. In the event the Bank shall institute any action
for the enforcement or collection of the obligations
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<PAGE> 7
evidenced hereby, the undersigned agree to pay all costs and expenses of such
action, including reasonable attorneys' fees, to the extent permitted by law.
GENERAL PROVISIONS
Each of the parties executing this Note, and any indorser, surety,
or guarantor, hereby jointly and severally waive presentment, notice of
dishonor, protest, notice of protest, and diligence in bringing suit against any
party hereto, waive the defenses of impairment of collateral for the obligation
evidenced hereby, impairment of a person against whom the Bank has any right of
recourse, and any defenses of any accommodation maker and consent that without
discharging any of them, the time of payment and any other provision of this
Note may be extended or modified an unlimited number of times before or after
maturity without notice to the undersigned. Each of the undersigned jointly and
severally agrees that it will pay the obligations evidenced hereby, irrespective
of any action or lack of action on the Bank's part in connection with the
acquisition, perfection, possession, enforcement, disposition, or modification
of all the obligations evidenced hereby or any and all security therefor, and no
omission or delay on the Bank's part in exercising any right against, or taking
any action to collect from or pursue the Bank's remedies against any party
hereto will release, discharge, or modify the duties of the undersigned, or any
of them, to make payments hereunder. Each of the undersigned agrees that the
Bank, without notice to or further consent from the undersigned, may release or
modify any collateral, security, document or other guaranties now held or
hereafter acquired, or substitute other collateral, security or other
guaranties, and no such action will release, discharge or modify the duties of
the undersigned, or any of them, hereunder. Each of the undersigned agrees that
the Bank will not be required to pursue or exhaust any of its rights or remedies
against the undersigned, or any of them, or any guarantors of the obligations
evidenced hereby with respect to the payment of any said obligations, or to
pursue, exhaust or preserve any of the Bank's rights or remedies with respect to
any collateral, security or other guaranties given to secure said obligations.
Each of the undersigned waives any claim or other right which it might now have
or hereafter acquire against any other person or entity that is primarily or
contingently liable on the obligations that arise from the existence or
performance of each of the obligations of the undersigned under this Note,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, or any right to participate in any
claim or remedy of the Bank or any collateral security which the Bank now has or
hereafter acquires, whether such claim, remedy or right arises in equity, under
contract or statute, at common law, or otherwise.
The obligations evidenced hereby may from time to time be
evidenced by another note or notes given in substitution, renewal or extension
hereof. Any security interest or mortgage lien that secures the obligations
evidenced hereby shall remain in full force and effect notwithstanding any such
substitution, renewal, or extension.
The captions used herein are for reference only and shall not be
deemed a part of this Note. If any of the terms or provisions of this Note shall
be deemed unenforceable, the
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<PAGE> 8
enforceability of the remaining terms and provisions shall not be affected. This
Note shall be governed by and construed in accordance with the law of the State
of Ohio.
WAIVER OF RIGHT TO TRIAL BY JURY
THE UNDERSIGNED ACKNOWLEDGE THAT, AS TO ANY AND ALL DISPUTES
THAT MAY ARISE BETWEEN THE UNDERSIGNED AND THE BANK, THE COMMERCIAL NATURE OF
THE TRANSACTION OUT OF WHICH THIS NOTE ARISES WOULD MAKE ANY SUCH DISPUTE
UNSUITABLE FOR TRIAL BY JURY. ACCORDINGLY, THE UNDERSIGNED HEREBY WAIVE ANY
RIGHT TO TRIAL BY JURY AS TO ANY AND ALL DISPUTES THAT MAY ARISE RELATING TO
THIS NOTE OR TO ANY OF THE OTHER INSTRUMENTS OR DOCUMENTS EXECUTED IN CONNECTION
HEREWITH.
GLIMCHER PROPERTIES LIMITED
PARTNERSHIP
By: Glimcher Properties Corporation,
Its: Sole General Partner
By: /s/ George A. Schmidt
-----------------------------------
Its: Senior Vice President
-----------------------------------
GLIMCHER DEVELOPMENT CORPORATION
By: /s/ George A. Schmidt
-----------------------------------
Its: Senior Vice President
-----------------------------------
WEBERSTOWN MALL, LLC
By: Glimcher Weberstown, Inc.
Its: Managing Member
By: /s/ George A. Schmidt
Its: Senior Vice President
-----------------------------------
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<PAGE> 1
Exhibit 10.78
Toys R Us
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
KNOW ALL MEN BY THESE PRESENTS, that GLIMCHER DEVELOPMENT CORPORATION,
a Delaware corporation, having an office at 20 South Third Street, Columbus,
Ohio 43215 ("Borrower"), in consideration of the sum of Fourteen Million Dollars
($14,000,000.00) does hereby GRANT, BARGAIN, SELL, MORTGAGE AND CONVEY certain
real property more fully described in Exhibit "A" attached hereto and
incorporated herein (the "Property") unto THE HUNTINGTON NATIONAL BANK, a
national banking association, having an office at 41 South High Street,
Columbus, Ohio 43215 ("Huntington").
TOGETHER WITH the following, whether now owned or hereafter acquired
by Borrower: (a) all improvements now or hereafter attached to or placed,
erected, constructed or developed on the Property (collectively the
"Improvements"); (b) all fixtures, furnishings, equipment, inventory, and other
articles of personal property (collectively the "Personal Property") that are
now or hereafter attached to or used in or about the Improvements or that are
necessary or useful for the complete and comfortable use and occupancy of the
Improvements for the purposes for which they were or are to be attached, placed,
erected, constructed or developed or that may be used in or related to the
planning, development, financing or operation of the Improvements, and all
renewals of or replacements or substitutions for any of the foregoing, whether
or not the same are or shall be attached to the Improvements or the Property;
(c) all water and water rights, timber, crops, and mineral interests pertaining
to the Property; (d) all building materials and equipment now or hereafter
delivered to and intended to be installed in or on the Improvements or the
Property; (e) all plans and specifications for the Improvements; (f) all
contracts relating to the Property, the Improvements or the Personal Property;
(g) all deposits (including, without limitation, tenants' security deposits),
bank accounts, funds, documents, contract rights, accounts, commitments,
construction agreements, architectural agreements, general intangibles
(including, without limitation, trademarks, trade names and symbols),
instruments, notes and chattel paper arising from or by virtue of any
transactions related to the Property, the Improvements or the Personal Property;
(h) all permits, licenses, franchises, certificates, and other rights and
privileges obtained in connection with the Property, the Improvements or the
Personal Property; (i) all proceeds arising from or by virtue of the sale, lease
or other disposition of the Property, the Improvements, the Personal Property or
any portion thereof or interest therein; (j) all proceeds (including, without
limitation, premium refunds) of each policy of insurance relating to the
Property, the Improvements or the Personal Property; (k) all proceeds from the
taking of any of the Property, the Improvements, the Personal Property or any
rights appurtenant thereto by right of eminent domain or by private or other
purchase in lieu thereof (including, without limitation, change of grade of
streets, curb cuts or other rights of access), for any public or quasi-public
use under any law; (l) all right, title and interest of Borrower in and to all
streets, roads, public places, easements and rights-of-way, existing or
proposed, public or private, adjacent to or used in connection with, belonging
or pertaining to the Property; (m) all of the leases, licenses, occupancy
agreements, rents (including without limitation, room rents), royalties,
bonuses, issues, profits, revenues or other benefits of the Property, the
Improvements or the Personal Property, including, without limitation, cash or
securities deposited pursuant to leases to secure performance by the lessees of
their obligations thereunder; (n) all rights, hereditaments and appurtenances
pertaining to the foregoing; and (o) other interests of every kind and character
that Borrower now has or at any time hereafter acquires in and to the Property,
Improvements, and Personal Property described herein and all property that is
used or useful in connection therewith, including rights of ingress and egress
and all reversionary rights or interests of Borrower with respect thereto (all
of the same, including the Property, collectively the "Mortgaged Property").
<PAGE> 2
TO HAVE AND TO HOLD the Mortgaged Property, together with the rights,
privileges and appurtenances thereto belonging, unto Huntington and its
successors and assigns forever, and Borrower hereby binds itself and its
successors and assigns to warrant and forever defend the Mortgaged Property unto
Huntington and its successors and assigns, against the claim or claims of all
persons claiming or to claim the same or any part thereof, except rights of
tenants in possession under leases, and easements, agreements and restrictions
of record and current real estate taxes and assessments.
THE MORTGAGE IS GIVEN TO SECURE: the full and prompt payment, whether
at stated maturity, accelerated maturity or otherwise, of any and all
indebtedness, whether fixed or contingent (collectively the "Indebtedness") and
the complete, faithful and punctual performance of any and all other obligations
(collectively the "Obligations") of Borrower to Huntington under the terms and
conditions of (a) a Note of even date herewith made by Borrower, Weberstown
Mall, LLC and Glimcher Properties Limited Partnership in the amount of Fourteen
Million Dollars ($14,000,000.00), payable not later than ___________, 1999,
unless extended, and any and all renewals, amendments, modifications, reductions
and extensions thereof and substitutions therefor (the "Note"); (b) the
Mortgage; and (c) any other instrument, document, certificate or affidavit
heretofore, now or hereafter given by Borrower evidencing or securing or by any
person guaranteeing (the "Guarantors") all or any part of the foregoing (the
same together with the Note and the Mortgage, collectively the "Loan
Documents").
Borrower, for itself and its successors and assigns, hereby covenants
with Huntington, its successors and assigns, that:
1. TITLE. Borrower represents that it has good and marketable title in
fee simple to the Mortgaged Property, except for rights of tenants in possession
under leases, and easements, agreements and restrictions of record and current
real estate taxes and assessments. If the interest of Huntington in the
Mortgaged Property or any part thereof shall be endangered or shall be attacked,
directly or indirectly, Borrower hereby authorizes Huntington, at Borrower's
expense, to take all necessary and proper steps for the defense of such
interest, including the employment of counsel, the prosecution or defense of
litigation and the compromise or discharge of claims made against such interest.
Any sums so expended by Huntington shall be charged against Borrower and
collectible in accordance with the terms of Section 12 hereof.
2. FURTHER ASSURANCES. Borrower, upon the request of Huntington, shall
execute, acknowledge, deliver, file and record such further instruments and do
such further acts as may be necessary, desirable or proper to carry out the
purposes of the Loan Documents and to subject to the liens and security
interests created thereby any property intended by the terms thereof to be
covered thereby, including specifically, but without limitation, any renewals,
additions, substitutions, replacements, improvements or appurtenances to the
Mortgaged Property.
3. SUBROGATION FOR FURTHER SECURITY. Huntington shall be subrogated for
its further security to the lien, although released of record, of any and all
encumbrances paid with any advance of Indebtedness; provided, however, that the
terms and provisions hereof shall govern the rights and remedies of Huntington
and shall supersede the terms, provisions, rights, and remedies under the lien
or liens to which Huntington is subrogated.
4. STATUS QUO. Except as expressly permitted herein or except with the
written consent of Huntington, which consent may be withheld in Huntington's
sole discretion, Borrower shall not (a) sell, assign, mortgage, pledge, lease
(except for leases in the ordinary course of Borrower's business) or otherwise
convey or further encumber the Mortgaged Property, or any portion thereof, or
legal, equitable or beneficial interest therein; (b) sell, assign, pledge or
otherwise transfer any beneficial interests in Borrower which individually or in
the aggregate would have the effect of transferring the power to direct the
operations of Borrower or the Mortgaged Property; (c) contract for any of the
same; (d) permit the Mortgaged Property, or any portion thereof, or legal,
equitable or beneficial interest therein, to be subject to any superior or
inferior lien or encumbrance; (e) subdivide, resubdivide or submit to the
condominium form of ownership all or any portion of the Mortgaged Property, or
any portion thereof; or (f) initiate or acquiesce in any change in the zoning
classification of the Property or any portion thereof.
2
<PAGE> 3
5. PAYMENT OF INDEBTEDNESS. Borrower shall promptly pay the
Indebtedness as the same becomes due and payable.
6. ESTOPPEL CERTIFICATE. Borrower shall furnish to Huntington within
ten (10) days of any written request of Huntington, a written statement, duly
acknowledged by Borrower, setting forth the sums secured by the Mortgage and any
right of set-off, counterclaim or other defense which Borrower alleges to exist
against such sums and obligations secured by the Mortgage.
7. TAXES AND OTHER IMPOSITIONS. Borrower shall promptly pay before
delinquency all taxes, assessments, charges, fines or impositions, general,
local or special (collectively the "Impositions"), levied upon the Mortgaged
Property, or any part thereof, or upon Huntington's interest therein, or upon
the Mortgage or the Indebtedness, by any duly or legally constituted public
authority, municipality, township, county or state or the United States, and
upon request, will provide evidence of the payment thereof to Huntington;
provided that Borrower, at Borrower's own cost and expense may, if it shall in
good faith so desire, contest the validity or amount of any Impositions, in
which event Borrower may defer the payment thereof for such period as such
contest shall be actively prosecuted and shall be pending undetermined; further
provided, however, that Borrower shall not allow any such Impositions so
contested to remain unpaid for such length of time as shall permit all or any
portion of the Mortgaged Property, or the lien thereon created by such item, to
be sold by federal, state, county or municipal authority for the nonpayment
thereof. Pending any such contest, Borrower shall maintain adequate book
reserves with respect to such Impositions being contested.
In the event that one or more of the Impositions on Huntington's
interest in the Mortgaged Property, the Mortgage or the Indebtedness cannot be
lawfully paid by Borrower, then Borrower shall repay the Indebtedness in full
without penalty within sixty (60) days after demand therefor by Huntington.
8. INSURANCE AND INDEMNIFICATION. Borrower shall provide, maintain and
keep in force at all times the following policies of insurance:
(a) Insurance against loss or damage to the Improvements and
the Personal Property caused by fire and any of the risks covered by insurance
of the type now known as "coverage against all risks of physical loss", in an
amount equal to one hundred percent (100%) of the replacement cost of the
Improvements and the Personal Property and sufficient to prevent Borrower and
Huntington from becoming co-insurers, and otherwise with terms and conditions
acceptable to Huntington;
(b) Comprehensive broad form general liability insurance,
insuring against any and all claims for personal injury, death or property
damage occurring on, in or about the Property, the Improvements and the
adjoining streets, sidewalks and passageways, subject to a combined single limit
of not less than Two Million Dollars ($2,000,000.00) for personal injury, death
or property damage arising out of any one accident and a general aggregate limit
of not less than Five Million Dollars ($5,000,000.00), and otherwise with terms
and conditions acceptable to Huntington;
(c) Worker's compensation insurance (including employer's
liability insurance, if available and requested by Huntington) for all employees
of Borrower engaged on or with respect to the Property and the Improvements in
the limits established by law or, if limits are not so established, in such
amounts as are acceptable to Huntington;
(d) During the course of any development or construction of
the Improvements, builder's completed value risk insurance against "all risks of
physical loss", including collapse and transit coverage, in the amounts set
forth in Subsection 8(a) above, and otherwise with terms and conditions
acceptable to Huntington;
3
<PAGE> 4
(e) Upon obtaining a certificate of occupancy for the
Improvements or any portion thereof, business interruption insurance and/or loss
of "rental value" insurance in an amount not less than the appraised rentals for
the Mortgaged Property for a minimum of twelve (12) months, and otherwise with
terms and conditions acceptable to Huntington;
(f) If the Improvements are located in a federally-designated
flood hazard area, then flood hazard coverage, in the maximum amount available
and otherwise with terms and conditions acceptable to Huntington; and
(g) Such other insurance coverage, and in such amount, as may
from time to time be required by Huntington against the same or other hazards.
All such policies shall be in a form acceptable to Huntington. Each
policy of casualty insurance shall contain a mortgagee clause, substantially in
the form of the standard New York mortgagee clause or otherwise acceptable to
Huntington, showing Huntington as mortgagee. Each policy of liability insurance
shall show Huntington as an additional insured. Unless the policy so provides,
each policy of insurance required by the terms of the Mortgage shall contain an
endorsement by the insurer, for the benefit of Huntington, (i) that any loss
shall be payable in accordance with the terms of such policy notwithstanding any
act or negligence of Borrower which might otherwise result in forfeiture of said
insurance, (ii) that any rights of set-off, counterclaim or deductions against
Borrower are waived and (iii) that such policy shall not be canceled or changed
except upon not less than thirty (30) days prior written notice delivered to
Huntington.
All such insurance policies and renewals thereof shall be written by
companies with a Best's Insurance Reports policy holders rating of A+ and a
financial size category of Class XV or be expressly approved by Huntington in
writing.
Huntington shall have the right to hold the policies, or certificates
thereof acceptable to Huntington with certified copies of the policies, and
Borrower shall promptly furnish to Huntington all renewal notices and all
receipts of paid premiums. At least thirty (30) days prior to the expiration
date of any such policy, Borrower shall deliver to Huntington a renewal policy,
or certificate thereof, in form acceptable to Huntington.
If Huntington is made a party defendant to any litigation concerning
the Loan Documents or the Mortgaged Property or any part thereof or interest
therein or the occupancy thereof by Borrower, then Borrower shall indemnify,
defend and hold Huntington harmless from all liability by reason of said
litigation, including reasonable attorneys' fees and expenses incurred by
Huntington in any such litigation, whether or not any such litigation is
prosecuted to judgment. Borrower waives any and all right to claim or recover
against Huntington, its officers, employees, agents and representatives, for
loss of or damage to Borrower, the Mortgaged Property, other property of
Borrower or the property of others under control of Borrower from any cause
insured against or required to be insured against by the provisions of the
Mortgage.
Borrower shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section unless Huntington has approved the insurance company and the form and
content of the insurance policy, including, without limitation, the naming
thereon of Huntington as a named insured with loss payable to Huntington under a
standard mortgage clause of the character above described. Borrower shall
immediately notify Huntington whenever any such separate insurance is taken out
and shall promptly deliver to Huntington copies of the policies and certificates
evidencing such insurance.
Nothing contained in this Section 8 shall prevent Borrower from keeping
the Improvements and Personal Property insured or causing the same to be insured
against the risks referred to in this Section 8 under a policy or policies of
blanket insurance which may cover other property not subject to the lien of the
Mortgage; provided, however, that any such policy of blanket insurance (i) shall
specify therein the amount of the total insurance allocated to the Improvements
and Personal Property, which amount shall be not less than the amount otherwise
required to be carried under the Mortgage; (ii) shall not contain any clause
which would result in
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the insured thereunder becoming a co-insurer of any loss with the insurer under
such policy; and (iii) shall in all other respects comply with the provisions of
the Mortgage.
In the event the damage or destruction to the Improvements is in an
amount of $500,000.00 or less, and provided there is no Event of Default, as
hereinafter defined, the insurance proceeds shall be paid to Borrower, and used
by Borrower to (i) repair or restore the Improvements to the same condition in
which they were prior to the Casualty, or (ii) for its own purposes, after first
making such repairs to the remaining Improvements so that the same may continue
as a first class shopping center, both architecturally and aesthetically.
Borrower may elect option (ii) above only if it first provides to Huntington
evidence satisfactory to Huntington that there will be no material decrease in
the fair market value of the Mortgaged Property.
In the event the damage or destruction to the Improvements is in an
amount in excess of $500,000.00, and provided there is no Event of Default, as
hereinafter defined, the insurance proceeds are to be applied toward the
restoration of the Improvements. Such sums shall be deposited in escrow with
Huntington as escrow agent for the purpose of repairing, restoring or
reconstructing the Improvements. Such proceeds shall be disbursed by Huntington
as work progresses, provided that prior to any disbursement, Huntington is in
receipt of proof reasonably satisfactory to it that: (i) the work has been
completed, (ii) there are no outstanding mechanics liens or materialmen's liens,
and (iii) that all charges, costs and expenses incurred with respect to work
completed have been paid in full or will be paid in full with such proceeds.
Prior to the release of any proceeds, Huntington must be satisfied that repair,
restoration or reconstruction of the damaged or destroyed Improvements will be
substantially equal in size, quality and value to the Improvements then
presently erected on the Mortgaged Property as existed immediately prior to the
loss and the plans and specifications therefor must be approved by Huntington.
In the event Huntington believes it is necessary in order to establish value,
Huntington may, at its option, cause the Mortgaged Property to be reappraised at
Borrower's expense. All insurance proceeds shall be payable to Huntington. The
adjustment of such insurance proceeds with the carrier must be approved by
Huntington.
Anything in this Section 8 to the contrary notwithstanding, if there
shall be an Event of Default, as hereinafter defined, the insurance proceeds
shall, at the sole option of Huntington, be applied by Huntington to the
Indebtedness in such order as Huntington may determine.
9. ESCROW. Borrower, in order to more fully protect the security of the
Mortgage, does hereby covenant and agree that, if Borrower shall fail to timely
pay taxes, assessments or insurance premiums as provided above, or in the event
of any other default and Huntington does not then elect to exercise its other
remedies, then Borrower shall, upon request of Huntington, pay to Huntington on
the first day of each month, until the Indebtedness is fully paid, a sum equal
to one-twelfth (1/12) of the known or estimated yearly taxes, assessments,
premiums for such insurance as may be required by the terms hereof. Huntington
shall hold such monthly payments which may be mingled with its general funds,
without obligation to pay interest thereon, unless otherwise required by
applicable law, to pay such taxes, assessments, and insurance premiums when due.
Borrower agrees that sufficient funds shall be so accumulated for the payment of
said charges one (1) month prior to the due date thereof and that Borrower shall
furnish Huntington with proper statements covering the same fifteen (15) days
prior to the due dates thereof. In the event of foreclosure of the Mortgage, or
if Huntington should take a deed in lieu of foreclosure, the amount so
accumulated shall be credited on account of the unpaid principal or interest. If
the total of the monthly payments as made under this Section 9 shall exceed the
payments actually made by Huntington, such excess shall be credited on
subsequent monthly payments of the same nature, but if the total of such monthly
payments so made under this Section 9 shall be insufficient to pay such taxes,
assessments, and insurance premiums then due, then said Borrower shall pay upon
demand the amount necessary to make up the deficiency, which payments shall be
secured by the Mortgage. To the extent that all the provisions of this Section 9
for such payments of taxes, assessments, and insurance premiums to Huntington,
are complied with, Borrower shall be relieved of compliance with the covenants
contained in Sections 7 and 8 herein as to the amounts paid only, but nothing
contained in this Section 9 shall be construed as in any way limiting the rights
of Huntington at its option to pay any and all of said items when due.
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10. WASTE; REPAIR. Borrower shall neither commit nor permit any waste
on the Property and shall keep all Improvements now or hereafter erected on the
Property in good condition and repair.
11. ALTERATIONS; CONSTRUCTION. Borrower shall have the right to remove,
demolish or alter any of the Improvements, now existing or hereafter constructed
on the Property, or any of the Personal Property in or on the Property or
Improvements to the extent the value of the same in not diminished or when
incident to the replacement of any of the items of Personal Property with items
of like kind and value.
12. ADVANCES SECURED BY MORTGAGE. Upon failure of Borrower to comply
with any of these covenants and agreements as to the payment of taxes,
assessments, insurance premiums, repairs, protection of the Mortgaged Property
or Huntington's lien thereon, and other charges and the costs of procurement of
title evidence and insurance as aforesaid, Huntington may, at its option, pay
the same, and any sums so paid by Huntington, together with the reasonable fees
of counsel employed by Huntington in consultation and in connection therewith,
shall be charged against Borrower, shall be immediately due and payable by
Borrower, shall bear interest at the Default Rate of Interest (as defined in the
Note) and shall be a lien upon the Mortgaged Property and be secured by the
Mortgage and may be collected in the same manner as the principal debt hereby
secured.
13. USE. Unless Huntington otherwise agrees in writing, Borrower shall
not allow changes in the nature of the occupancy for which the Property and
Improvements were intended at the time the Mortgage was executed. Borrower shall
comply with the laws, ordinances, regulations and requirements of any
governmental body applicable to the Mortgaged Property, both during the
construction of any Improvements on the Property and subsequent to the
completion thereof, and Borrower shall not permit the use thereof for any
illegal purpose.
14. INSPECTION. Any person authorized by Huntington shall have the
right to enter upon and inspect the Mortgaged Property after reasonable notice
to Borrowers and during normal business hours. Huntington shall have no duty,
however, to make such inspections. Any inspection of the Mortgaged Property by
Huntington shall be entirely for its benefit, and Borrower shall in no way rely
or claim reliance thereon.
15. MINERALS. Without the prior written consent of Huntington, there
shall be no drilling or exploring for, or extraction, removal, or production of,
minerals from the surface or subsurface of the Property. The term "minerals" as
used herein shall include, without limitation, oil, gas, casinghead gas, coal,
lignite, hydrocarbons, methane, carbon dioxide, helium, uranium and all other
natural elements, compounds and substances, including sand and gravel.
16. CONDEMNATION. If all the Mortgaged Property and Improvements are
taken or acquired in any condemnation proceeding or by exercise of the right of
eminent domain or, with Huntington's consent, by any conveyance in lieu thereof,
the amount of any award or other payment for such taking, or conveyance or
damages made in consideration thereof, to the extent of the full amount of the
then remaining unpaid Indebtedness, is hereby assigned to Huntington, and
Huntington is empowered to collect and receive the same and to give proper
receipts therefor in the name of Borrower, and the same shall be paid forthwith
to Huntington. Such award or payment so received by Huntington shall be applied
to the Indebtedness (whether or not then due and payable).
In the event a portion of the Property Improvements are acquired in any
condemnation proceeding or by the exercise of the right of eminent domain, to
the extent that the damage to the Property or improvements is in the amount of
$500,000.00 or less, and provided there is no Event of Default, as hereinafter
defined, the proceeds of any such condemnation or eminent domain award shall be
paid to Borrower, who shall use such proceeds as provided for in paragraph 8
hereof with respect to the disbursement of insurance proceeds where the damage
or destruction is in an amount of $500,000.00 or less. The provisions of
paragraph 8 where there is damage or destruction in an amount of $500,000.00 or
less shall apply as if fully rewritten.
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In the event the damage to the Improvements or Property by virtue of
such condemnation proceeding or eminent domain proceeding is in an amount in
excess of $500,000.00, and provided there is no Event of Default, as hereinafter
defined, the proceeds of such eminent domain or condemnation award shall be
deposited in escrow with Huntington as escrow agent for the purpose of
repairing, restoring, or reconstructing the Improvements and/or Property, and
shall be disbursed by Huntington in accordance with the provisions of paragraph
8 hereof with respect to the disbursement of insurance proceeds, where the
damage or destruction is in an amount of $500,000.00 or greater. The conditions
to disbursement, including the requirement that Huntington be satisfied that the
repaired or restored Improvements would be equal in size, quality and value to
those which existed previously, and the right to cause the Mortgaged Property to
be reappraised, as provided for where there is damage or destruction of
$500,000.00 or greater, shall be applicable as if fully rewritten.
Anything in this Section 16 to the contrary notwithstanding, if there
shall be an Event of Default, as hereinafter defined, the proceeds of such
eminent domain or condemnation award shall, at the sole option of Huntington, be
applied by Huntington to the Indebtedness in such order as Huntington may
determine.
17. ASSIGNMENT OF RENTS AND LEASES.
(a) Borrower hereby absolutely and unconditionally assigns,
transfers and sets over unto Huntington and Huntington's successors and assigns
all present and future leases covering all or any part of the Mortgaged Property
(the "Leases"), together with any extensions or renewals thereof and any
guaranties of any tenants' obligations thereunder, and all of the rents,
royalties, bonuses, income, receipts, revenues, issues and profits now due or
which may hereafter become due under the Leases or any extensions or renewals
thereof, as well as all moneys due and to become due to Borrower under the
Leases for services, materials or installations supplied whether or not the same
were supplied under the terms of the Leases, all liquidated damages following
default under the Leases and all proceeds payable under any policy of insurance
covering loss of rents resulting from untenantability caused by damage to any
part of the Mortgaged Property (such rents, income, receipts, revenues, issues,
profits and other moneys assigned hereby are hereinafter collectively called
"Rents"), together with any and all rights and remedies which Borrower may have
against any tenant under any of the Leases or others in possession of the
Mortgaged Property or any part thereof for the collection or recovery of Rents
so assigned. Prior to an Event of Default, as hereinafter defined, Borrower
shall have a license to collect and receive all Rents as trustee for the benefit
of Huntington and Borrower.
(b) Borrower hereby represents, warrants and agrees that:
(i) Borrower has good title to the Leases and Rents
hereby assigned and has the right, power and capacity to make this assignment.
No person or entity other than Borrower has or will have any right, title or
interest in or to the Leases or Rents, except for the Permitted Encumbrances.
(ii) Borrower shall, at Borrower's sole cost and
expense, perform and discharge all of the obligations and undertakings of the
landlord under the Leases and give prompt notice to Huntington of any failure to
do so. Borrower shall use all reasonable efforts to enforce or secure the
performance of each and every obligation and undertaking of the tenants under
the Leases and shall appear in and prosecute or defend any action or proceeding
arising under, or in any manner connected with, the Leases or the obligations
and undertakings of the tenants thereunder.
(iii) Borrower shall generally operate and maintain
the Mortgaged Property in a manner to insure maximum Rents.
(iv) Borrower shall not pledge, transfer, mortgage or
otherwise encumber or assign the Leases or the Rents.
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(v) Borrower shall not collect Rents more than thirty
(30) days prior to accrual.
(c) Huntington shall not be obligated to perform or discharge
any obligation or duty to be performed or discharged by Borrower under any of
the Leases; and Borrower hereby agrees to indemnify Huntington for, and to save
Huntington harmless from, any and all liability, damage or expense arising from
any of the Leases or from this assignment, including, without limitation, claims
by tenants for security deposits or for rental payments more than one (1) month
in advance and not delivered to Huntington. All amounts indemnified against
hereunder, including reasonable attorneys' fees if paid by Huntington, shall
bear interest at the Default Rate of Interest, as defined in the Note, and shall
be payable by Borrower immediately without demand and shall be secured hereby.
This assignment shall not place responsibility for the control, care,
management, or repair of the Mortgaged Property upon Huntington or make
Huntington responsible or liable for any negligence in the management,
operation, upkeep, repair or control of same resulting in loss or damage or
injury or death to any party.
(d) Upon the occurrence of an Event of Default as hereinafter
defined:
(i) All Rents assigned hereunder shall be paid
directly to Huntington, and Huntington may notify the tenants under the Leases
(or any other parties in possession of the Mortgaged Property) to pay all of the
Rents directly to Huntington at the address specified in Section 27 hereof, for
which this assignment shall be sufficient warrant;
(ii) Huntington shall have the right to forthwith
enter and take possession of the Mortgaged Property and to manage, operate,
lease and develop the same; to collect as hereunder provided all or any Rents
payable under the Leases; to make repairs as Huntington deems appropriate; and
to perform such other acts in connection with the management, operation,
development, leasing and construction of the Mortgaged Property as Huntington,
in its sole discretion, may deem proper; and
(iii) Huntington shall have the right to forthwith
enter into and upon the Mortgaged Property and take possession thereof, and to
appoint an agent, or in the event of the institution of foreclosure proceedings
to have a receiver appointed for the collection of the Rents.
In the event that Huntington shall pursue its remedies under
Subsections 17(d)(ii) or (iii) above, the net income, after allowing a
reasonable fee for the collection thereof and the management of the Mortgaged
Property, may be applied toward the payment of taxes, assessments, insurance
premiums, repairs, protection of the Mortgaged Property or Huntington's lien
thereon, and other charges against the Mortgaged Property and the costs of
procurement of such insurance and of evidence of title to the Mortgaged
Property, or any of them, or in the reduction of the Indebtedness and the
payment of interest, as Huntington may elect. If the Rents are not sufficient to
meet the costs, if any, of taking control of and managing the Mortgaged Property
and collecting the Rents, any funds expended by Huntington for such purposes
shall become indebtedness of Borrower to Huntington secured by the Mortgage.
Unless Huntington and Borrower agree in writing to other terms of payment, such
amounts shall be payable upon demand from Huntington to Borrower and shall bear
interest from the date of disbursement at the Default Rate of Interest stated in
the Note.
The exercise or failure to exercise any of the above remedies shall not
in any way preclude or abridge the right of Huntington to foreclose the Mortgage
or to take any other legal or equitable action thereon. Huntington shall have
such rights or privileges as aforesaid regardless of the value of the Mortgaged
Property given as security hereunder, and regardless of the solvency or
insolvency of any party bound for the payment of the Indebtedness or the other
sums hereby secured.
(e) Borrower hereby authorizes and directs the tenants under
the Leases to pay Rents to Huntington upon written demand by Huntington, without
further consent of Borrower, and the tenants may rely upon any written statement
delivered by Huntington to the
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tenants. Any such payment to Huntington shall constitute payment to Borrower
under the Leases.
(f) There shall be no merger of the leasehold estates created
by the Leases with the fee estate of the Property and Improvements without the
prior written consent of Huntington.
18. SECURITY AGREEMENT. The Mortgage is intended to be a security
agreement pursuant to the Uniform Commercial Code as enacted in the State of
Ohio (the "UCC") for any of the Mortgaged Property comprising personal property
and fixtures which may be subject to a security interest pursuant to the UCC,
and Borrower hereby grants to Huntington a security interest in said personal
property and fixtures, whether said property is now existing or hereafter
acquired, together with replacements, replacement parts, additions, repairs and
accessories incorporated therein or affixed thereto and, if sold or otherwise
disposed of, the proceeds (including insurance proceeds) thereof. Borrower
agrees to execute and deliver to Huntington UCC financing statements covering
said personal property and fixtures from time to time and in such form as
Huntington may require to perfect or maintain the priority of Huntington's
security interest with respect to said personal property and fixtures, and
Borrower shall bear all costs thereof. Borrower shall not create or suffer to be
created any other security interest in said personal property and fixtures,
including replacements thereof and additions thereto. Upon the occurrence of any
Event of Default as set forth in Section 19 hereof, Huntington shall have the
remedies of a secured party under the UCC and, at Huntington's option, may also
invoke the remedies provided in Section 19 hereof with respect to such property.
19. DEFAULT. The term "Event of Default" shall have the same meaning as
set forth in the Note, which meaning is incorporated by this reference herein.
Upon the occurrence of any such Event of Default beyond any applicable
cure period, at the option of Huntington, without notice or demand, the same
being hereby expressly waived, the entire amount shall become immediately due
and payable, and, in addition to any other right or remedy which Huntington may
now or hereafter have at law, in equity, or under the Loan Documents, Huntington
shall have the right and power: (a) to foreclose upon the Mortgage and the lien
hereof; (b) to sell the Mortgaged Property according to law; and (c) to enter
upon and take possession of the Mortgaged Property and/or have a receiver
appointed therefor as set forth in Section 17 hereof.
20. NO WAIVER. The failure of Huntington to exercise any option to
declare the maturity of the principal debt or any other sums hereby secured
under any provision of any of the Loan Documents, or to forbear from exercising
any right or remedy available to Huntington under any provision of any of the
other Loan Documents, shall not be deemed a waiver of the right to exercise such
option, right or remedy or declare such maturity as to such past, continuing or
subsequent violation of any of the covenants and agreements of the Loan
Documents. Acceptance by Huntington of partial payments shall not constitute a
waiver of any Event of Default. From time to time, Huntington may, at
Huntington's option, without giving notice to or obtaining the consent of
Borrower, Borrower's successors or assigns, any junior lienholder or any of the
Guarantors, without liability on Huntington's part and notwithstanding
Borrower's breach of any covenant or agreement of Borrower in the Mortgage,
extend the time for payment of the Indebtedness, or any part thereof, reduce the
payments thereon, release anyone liable on any of said Indebtedness, accept a
renewal note or notes therefor, release from the lien of the Mortgage any part
of the Mortgaged Property, take or release other or additional security,
reconvey any part of the Mortgaged Property, consent to any map or plan of the
Mortgaged Property, consent to the granting of any easement, join in any
extension or subordination agreement, or agree in writing with Borrower to
modify the rate of interest or period of amortization of the Note or to change
the amount of the monthly installments payable thereunder. Any actions taken by
Huntington pursuant to the terms of this Section 20 shall not affect the
obligation of Borrower or Borrower's successors or assigns to pay the sums
secured by the Mortgage and to observe the covenants of Borrower contained
herein, shall not affect the guaranty of any of the Guarantors, and shall not
affect the lien or priority of lien of the Mortgage on the Mortgaged Property.
Borrower shall pay Huntington a reasonable service charge, together with such
title insurance
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premiums and attorney's fees as may be incurred at Huntington's option for any
such action if taken at Borrower's request.
21. PARCELS; WAIVER OF MARSHALLING. In the event of foreclosure of the
Mortgage, the Mortgaged Property may be sold in one or more parcels or as an
entirety as Huntington may elect.
Notwithstanding the existence of any other security interests in the
Mortgaged Property held by Huntington or by any other party, Huntington shall
have the right to determine the order in which any or all of the Mortgaged
Property shall be subjected to the remedies provided herein. Huntington shall
have the right to determine the order in which any or all portions of the
Indebtedness are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Borrower, any party who becomes liable for Borrower's
obligations and covenants under the Mortgage, and any party who now or hereafter
acquires a security interest in the Mortgaged Property, or any portion thereof,
hereby waives any and all right to require the marshalling of assets in
connection with the exercise of any of the remedies permitted by applicable law
or provided herein.
22. COSTS OF COLLECTION. Borrower hereby agrees to pay to Huntington
all costs of foreclosing the Mortgage, and all costs of enforcing, collecting
and securing, and of attempting to enforce, collect and secure, the Note,
including, without limitation, reasonable attorneys' fees, appraisers' fees,
court costs, notice charges and title insurance charges, whether such attempt be
made by suit, in bankruptcy, or otherwise, and such costs and any other sums due
Huntington under the Loan Documents may be included in any judgment or decree
rendered.
23. RENT ROLL AND FINANCIAL STATEMENTS. Borrower shall maintain full
and correct books and records open to Huntington's inspection showing in detail
the income, expenses and earnings of Borrower and of the Mortgaged Property, and
shall provide Huntington the following:
(a) a financial statement for the Mortgaged Property
consisting of a complete itemized statement of income and operating expenses,
prepared in accordance with general accounting principles or otherwise in form
acceptable to Huntington and certified by Borrower's chief executive or
financial officer, within ninety (90) days after the end of each fiscal year of
Borrower, or as requested from time to time by Huntington, but not more often
than quarterly;
(b) a rent roll of the Mortgaged Property, certified by the
chief executive or financial officer of Borrower, within thirty (30) days after
the end of each fiscal year of Borrower, or as requested from time to time by
Huntington, but not more often than quarterly, containing the name and address
of each tenant, square footage of leased premises, annual rent, rent per square
foot, lease commencement date, lease expiration date, date through which rent is
paid, and the nature and extent of any defaults by each tenant;
(c) a financial statement for Borrower consisting of a balance
sheet and a complete itemized statement of annual income and operating expenses
of Borrower, prepared in accordance with generally accepted accounting
principles or otherwise in form acceptable to Huntington and certified by
Borrower's chief executive or financial officer, within ninety (90) days after
the end of each fiscal year of Borrower, or as requested from time to time by
Huntington;
(d) such other financial information as Huntington may
reasonably require, when requested from time to time by Huntington.
24. HAZARDOUS SUBSTANCES. (a) Borrower hereby covenants and agrees with
Huntington that the following terms shall have the following meanings:
(i) "Environmental Laws" mean all federal, state and
local laws, statutes, ordinances and codes relating to the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of any Hazardous Substance and the rules,
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regulations, policies, guidelines, interpretations, decisions, orders and
directives with respect thereto.
(ii) "Hazardous Substance" means, without limitation,
any flammable explosives, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, petroleum and petroleum based
products, methane, hazardous materials, hazardous wastes, hazardous or toxic
substances or related materials, as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801, et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901, et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. Sections 2601, et seq.), or any other applicable
Environmental Law.
(iii) "Indemnitee" means Huntington, its participants
in the loan evidenced by the Note and all subsequent holders of the Mortgage,
their respective successors and assigns, their respective officers, directors,
employees, agents, representatives, contractors and subcontractors and any
subsequent owner of the Property and Improvements who acquires title thereto
from or through Huntington.
(iv) "Release" has the same meaning as given to that
term in the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Sections 9601, et seq.) and the regulations
promulgated thereunder.
(b) Borrower represents and warrants to Huntington that, to its
knowledge after due investigation except as may be set forth in the
environmental report for the Property delivered to Huntington in connection
herewith: (i) the Property and Improvements are not being or have not been used
for the storage, treatment, generation, transportation, processing, handling,
production or disposal of any Hazardous Substance in violation of any
Environmental Laws; (ii) the Property and Improvements do not contain any
Hazardous Substances in violation of any Environmental Laws; (iii) there has
been no Release of any Hazardous Substance on, at or from the Property and
Improvements or any property adjacent to or within the immediate vicinity of the
Property and Improvements and Borrower has not received any form of notice or
inquiry with regard to such a Release or threat of such a Release; (iv) no event
has occurred with respect to the Property and Improvements which, with the
passage of time or the giving of notice, or both, would constitute a violation
of any applicable Environmental Law; (v) there are no agreements or orders or
directives of any federal, state or local governmental agency or authority
relating to the Property and Improvements which require any work, repair,
construction, containment, clean up, investigations, studies, removal or other
remedial action with respect to the Property and Improvements; and (vi) there
are no actions, suits, claims or proceedings, pending or threatened, which seek
any remedy, that arise out of the condition, ownership, use, operation, sale,
transfer or conveyance of the Property and Improvements and (1) a violation or
alleged violation of any applicable Environmental Law, (2) the presence of any
Hazardous Substance or a Release of any Hazardous Substance or the threat of
such a Release, or (3) human exposure to any Hazardous Substance.
(c) Borrower covenants and agrees with Huntington as follows:
(i) Borrower shall keep, and shall cause all
operators, tenants, subtenants, licensees and occupants of the Property and
Improvements to keep, the Property and Improvements free of all Hazardous
Substances, except for Hazardous Substances stored, treated, generated,
transported, processed, handled, produced or disposed of in the normal operation
of the Property and Improvements as a shopping center in accordance with all
Environmental Laws.
(ii) Borrower shall comply with, and shall cause all
operators, tenants, subtenants, licensee and occupants of the Property and
Improvements to comply with, all Environmental Laws.
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(iii) Borrower shall promptly provide Huntington with
a copy of all notifications which it gives or receives with respect to any past
or present Release of any Hazardous Substance or the threat of such a Release
on, at or from the Property and Improvements or any property adjacent to or
within the immediate vicinity of the Property and Improvements.
(iv) Borrower shall undertake and complete all
investigations, studies, sampling and testing for Hazardous Substances
reasonably required by Huntington and, in accordance with all Environmental
Laws, all removal and other remedial actions necessary to contain, remove and
clean up all Hazardous Substances that are determined to be present at the
Property and Improvements in violation of any Environmental Laws.
(v) Huntington shall have the right, but not the
obligation, to cure any violation by Borrower of the Environmental Laws and
Huntington's cost and expense to so cure shall be secured by the Mortgage.
(d) Borrower covenants and agrees, at its sole cost and expense, to
indemnify, defend and save harmless Indemnitee from and against any and all
damages, losses, liabilities, obligations, penalties, claims, litigation,
demands, defenses, judgments, suits, actions, proceedings, costs, disbursements
and/or expenses (including, without limitation, reasonable attorneys' and
experts' fees and expenses) of any kind or nature whatsoever which may at any
time be imposed upon, incurred by or asserted or awarded against Indemnitee
arising out of the condition, ownership, use, operation, sale, transfer or
conveyance of the Property and Improvements and (i) the storage, treatment
generation, transportation, processing, handling, production or disposal of any
Hazardous Substance, (ii) the presence of any Hazardous Substance or a Release
of any Hazardous Substance or the threat of such a Release, (iii) human exposure
to any Hazardous Substance, (iv) a violation of any Environmental Law, or (v) a
material misrepresentation or inaccuracy in any representation or warranty or
material breach of or failure to perform any covenant made by Borrower herein
(collectively, the "Indemnified Matters").
The liability of Borrower to Indemnitee hereunder shall in no way be
limited, abridged, impaired or otherwise affected by (i) the repayment of all
sums and the satisfaction of all obligations of Borrower under the Note, the
Mortgage or other Loan Documents, (ii) the foreclosure of the Mortgage or the
acceptance of a deed in lieu thereof, (iii) any amendment or modification of the
Loan Documents by or for the benefit of Borrower or any subsequent owner of the
Property and Improvements, (iv) any extensions of time for payment or
performance required by any of the Loan Documents, (v) the release or discharge
of the Mortgage or of Borrower, any of the Guarantors or any other person from
the performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Loan Documents whether by Huntington, by
operation of law or otherwise, (vi) the invalidity or unenforceability of any of
the terms or provisions of the Loan Documents, (vii) any exculpatory provision
contained in any of the Loan Documents limiting Huntington recourse to property
encumbered by the Mortgage or to any other security or limiting Huntington
rights to a deficiency judgment against Borrower, (viii) any applicable statute
of limitations, (ix) the sale or assignment of the Note or the Mortgage, (x) the
sale, transfer or conveyance of all or part of the Property and Improvements,
(xi) the dissolution or liquidation of Borrower, (xii) the death or legal
incapacity of Borrower, (xiii) the release or discharge, in whole or in part, of
Borrower in any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding, or (xiv) any other
circumstances which might otherwise constitute a legal or equitable release or
discharge, in whole or in part, of Borrower under the Note or the Mortgage.
The foregoing indemnity shall be in addition to any and all other
obligations and liabilities Borrower may have to Huntington at common law.
25. SUBORDINATE MORTGAGES. Borrower shall not, without the prior
written consent of Huntington, which consent may be withheld in Huntington's
sole discretion, grant or permit to be created any lien, security interest or
other encumbrance, other than Permitted Encumbrances, covering any of the
Mortgaged Property (each a "Subordinate Mortgage"). If Huntington
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consents to a Subordinate Mortgage or if the foregoing prohibition is determined
by a court of competent jurisdiction to be unenforceable, any such Subordinate
Mortgage shall contain express covenants to the effect that:
(a) the lien of the Subordinate Mortgage and all instruments
incorporated therein by reference is and always shall be unconditionally
subordinate to the lien of the Mortgage and to all advances made pursuant to,
and sums secured by, the Mortgage, and the Mortgage and all instruments
incorporated herein by reference may be renewed, extended, restructured,
modified, increased or reinstated at any time without giving notice to or
obtaining the consent of the Subordinate Mortgage holder;
(b) if any action shall be instituted to foreclose or
otherwise enforce the Subordinate Mortgage, no tenant of any of the Leases shall
be named as a party defendant and no action shall be taken which would terminate
any occupancy or tenancy without the prior written consent of Huntington;
(c) in the event of any conflict between the covenants and
agreements of the Mortgage and the Subordinate Mortgage, the covenants and
agreements of the Mortgage shall prevail;
(d) Rents, if collected by or for the holder of the
Subordinate Mortgage, shall be applied first to the payment of the Indebtedness
and expenses incurred in the ownership, operation and maintenance of the
Mortgaged Property in such order as Huntington may determine, prior to being
applied to any indebtedness secured by the Subordinate Mortgage;
(e) a copy of any notice of default under the Subordinate
Mortgage and written notice and opportunity to cure of not less than thirty (30)
days prior to the commencement of any action to foreclose or otherwise enforce
the Subordinate Mortgage shall be given to Huntington; and
(f) the holder of the Subordinate Mortgage shall acknowledge
the existence of the Indebtedness secured hereby and further acknowledge that
the lien of the Mortgage shall at all times be and remain superior and prior to
the lien of the Subordinate Mortgage to the extent of the entire Indebtedness
secured hereby, notwithstanding any change in the variable rate of interest
being charged under the Note.
26. PRIORITY OF MORTGAGE LIEN. Huntington, at Huntington's option, is
authorized and empowered to do all things provided to be done by a mortgagee
under Section 1311.14 of the Ohio Revised Code, and any present or future
amendments or supplements thereto, for the protection of Huntington's interest
in the Mortgaged Property.
27. NOTICE. Any notice required or permitted to be given hereunder
shall be in writing. If mailed by first class United States mail, postage
prepaid, registered or certified with return receipt requested, then such shall
be effective upon its deposit in the mails. Notice given in any other manner
shall be effective only if and when received by the addressee. For purposes of
notice, the addresses of Borrower and Huntington shall be as set forth below;
provided however, that either party shall have the right to change such party's
address for notice hereunder to any other location within the continental United
States by the giving of thirty (30) days' notice to the other party.
If to Borrower: Glimcher Properties Limited Partnership
20 South Third Street
Columbus, Ohio 43215
Attention: General Counsel
If to Huntington: The Huntington National Bank
Commercial Real Estate Group
41 South High Street
Columbus, Ohio 43215
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28. MISCELLANEOUS. The covenants herein contained shall bind, and the
benefits and advantages shall inure to, the respective successors and assigns of
the parties hereto. Whenever used, the singular number shall include the plural,
the plural the singular, and the use of any gender shall include all genders. If
any provision of the Mortgage is illegal, or hereafter rendered illegal, or is
for any other reason void, voidable or otherwise unenforceable, or hereafter
rendered void, voidable or otherwise unenforceable, the remainder of the
Mortgage shall not be affected thereby, but shall be construed as if it does not
contain such provision. Each right and remedy provided in the Mortgage is
distinct and cumulative to all other rights or remedies under the Mortgage or
afforded by law or equity, and may be exercised concurrently, independently or
successively, in any order whatsoever. The Mortgage shall be governed by and
construed under the laws of the State of Ohio.
HUNTINGTON, BY ACCEPTANCE OF THIS MORTGAGE, AND BORROWER HEREBY
MUTUALLY, VOLUNTARILY, IRREVOCABLY AND UNCONDITIONALLY WAIVE FOR THE BENEFIT OF
THE OTHER ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE LOAN DOCUMENTS, THE TRANSACTIONS RELATED
THERETO OR THE RELATIONSHIP ESTABLISHED THEREBY. THIS PROVISION IS A MATERIAL
INDUCEMENT TO HUNTINGTON AND BORROWER TO ENTER INTO THIS TRANSACTION. IT SHALL
NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY HUNTINGTON'S ABILITY TO
PURSUE ITS REMEDIES.
PROVIDED, HOWEVER, that these presents are upon the condition that if
Borrower shall fully and promptly pay when due the Indebtedness and shall
completely, faithfully and punctually perform all of the Obligations under the
terms and conditions of the Loan Documents, then the Mortgage shall be void;
otherwise it shall remain in full force and effect in law and equity forever.
IN WITNESS WHEREOF, Borrower has caused the Mortgage to be executed as
of the 13th day of October, 1998.
Signed and acknowledged Borrower:
in the presence of: GLIMCHER DEVELOPMENT
CORPORATION, a Delaware corporation
/s/ Robert C. Kiger
- -------------------------------
Witness Robert C. Kiger
-----------------------
(printed) By: /s/ George A. Schmidt
---------------------------
/s/ Dennis J. Kovatch Its: Senior Vice President
- ------------------------------- --------------------------
Witness Dennis J. Kovatch
-----------------------
(printed)
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STATE OF OHIO
COUNTY OF FRANKLIN, SS:
The foregoing instrument was acknowledged before me this 13th day of
October, 1998, by George A. Schmidt, Senior Vice President, of GLIMCHER
DEVELOPMENT CORPORATION, a Delaware corporation, on behalf of the corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/ Robert C. Kiger
-----------------------------
Notary Public
Commission
Expiration:_________________
This instrument prepared by:
Robert C. Kiger, Attorney at Law
Porter, Wright, Morris & Arthur
41 South High Street
Columbus, Ohio 43215
The Huntington National Bank
Commercial Real Estate Group
January 3, 1994 Revision
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EXHIBIT "A"
LEGAL DESCRIPTION
<PAGE> 1
Exhibit 10.79
Target
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
KNOW ALL MEN BY THESE PRESENTS, that GLIMCHER PROPERTIES LIMITED
PARTNERSHIP, a Delaware limited partnership, having an office at 20 South Third
Street, Columbus, Ohio 43215 ("Borrower"), in consideration of the sum of
Fourteen Million Dollars ($14,000,000.00) does hereby GRANT, BARGAIN, SELL,
MORTGAGE AND CONVEY the fee simple title and the lessor's interest under a
certain ground lease with Dayton Hudson Corporation as tenant dated November 30,
1994, a Short Form of which is of record in Volume 682, Page 860, Recorder's
Office, Licking County, Ohio in and to certain real property more fully
described in Exhibit "A" attached hereto and incorporated herein (the
"Property") unto THE HUNTINGTON NATIONAL BANK, a national banking association,
having an office at 41 South High Street, Columbus, Ohio 43215 ("Huntington").
TOGETHER WITH the following, whether now owned or hereafter acquired
by Borrower: (a) all improvements now or hereafter attached to or placed,
erected, constructed or developed on the Property (collectively the
"Improvements"); (b) all fixtures, furnishings, equipment, inventory, and other
articles of personal property (collectively the "Personal Property") that are
now or hereafter attached to or used in or about the Improvements or that are
necessary or useful for the complete and comfortable use and occupancy of the
Improvements for the purposes for which they were or are to be attached, placed,
erected, constructed or developed or that may be used in or related to the
planning, development, financing or operation of the Improvements, and all
renewals of or replacements or substitutions for any of the foregoing, whether
or not the same are or shall be attached to the Improvements or the Property;
(c) all water and water rights, timber, crops, and mineral interests pertaining
to the Property; (d) all building materials and equipment now or hereafter
delivered to and intended to be installed in or on the Improvements or the
Property; (e) all plans and specifications for the Improvements; (f) all
contracts relating to the Property, the Improvements or the Personal Property;
(g) all deposits (including, without limitation, tenants' security deposits),
bank accounts, funds, documents, contract rights, accounts, commitments,
construction agreements, architectural agreements, general intangibles
(including, without limitation, trademarks, trade names and symbols),
instruments, notes and chattel paper arising from or by virtue of any
transactions related to the Property, the Improvements or the Personal Property;
(h) all permits, licenses, franchises, certificates, and other rights and
privileges obtained in connection with the Property, the Improvements or the
Personal Property; (i) all proceeds arising from or by virtue of the sale, lease
or other disposition of the Property, the Improvements, the Personal Property or
any portion thereof or interest therein; (j) all proceeds (including, without
limitation, premium refunds) of each policy of insurance relating to the
Property, the Improvements or the Personal Property; (k) all proceeds from the
taking of any of the Property, the Improvements, the Personal Property or any
rights appurtenant thereto by right of eminent domain or by private or other
purchase in lieu thereof (including, without limitation, change of grade of
streets, curb cuts or other rights of access), for any public or quasi-public
use under any law; (l) all right, title and interest of Borrower in and to all
streets, roads, public places, easements and rights-of-way, existing or
proposed, public or private, adjacent to or used in connection with, belonging
or pertaining to the Property; (m) all of the leases, licenses, occupancy
agreements, rents (including without limitation, room rents), royalties,
bonuses, issues, profits, revenues or other benefits of the Property, the
Improvements or the Personal Property, including, without limitation, cash or
securities deposited pursuant to leases to secure performance by the lessees of
their obligations thereunder; (n) all rights, hereditaments and appurtenances
pertaining to the foregoing; and (o) other interests of every kind and character
that Borrower now has or at any time hereafter acquires in and to the Property,
Improvements, and Personal Property described herein and all property that is
used or useful in connection therewith, including rights of ingress and egress
and all reversionary rights or interests of Borrower with respect thereto (all
of the same, including the Property, collectively the "Mortgaged Property").
<PAGE> 2
TO HAVE AND TO HOLD the Mortgaged Property, together with the rights,
privileges and appurtenances thereto belonging, unto Huntington and its
successors and assigns forever, and Borrower hereby binds itself and its
successors and assigns to warrant and forever defend the Mortgaged Property unto
Huntington and its successors and assigns, against the claim or claims of all
persons claiming or to claim the same or any part thereof, except rights of
Dayton Hudson Corporation as tenant under the aforementioned ground lease (the
"Ground Lease"), and easements, agreements and restrictions of record and
current real estate taxes and assessments.
THE MORTGAGE IS GIVEN TO SECURE: the full and prompt payment, whether
at stated maturity, accelerated maturity or otherwise, of any and all
indebtedness, whether fixed or contingent (collectively the "Indebtedness") and
the complete, faithful and punctual performance of any and all other obligations
(collectively the "Obligations") of Borrower to Huntington under the terms and
conditions of (a) a Note of even date herewith made by Borrower, Weberstown
Mall, LLC and Glimcher Development Corporation in the amount of Fourteen Million
Dollars ($14,000,000.00), payable not later than ___________, 1999, unless
extended, and any and all renewals, amendments, modifications, reductions and
extensions thereof and substitutions therefor (the "Note"); (b) the Mortgage;
and (c) any other instrument, document, certificate or affidavit heretofore, now
or hereafter given by Borrower evidencing or securing or by any person
guaranteeing (the "Guarantors") all or any part of the foregoing (the same
together with the Note and the Mortgage, collectively the "Loan Documents").
Borrower, for itself and its successors and assigns, hereby covenants
with Huntington, its successors and assigns, that:
1. TITLE. Borrower represents that it has good and marketable title in
fee simple to the Mortgaged Property, subject to the Ground Lease, and
easements, agreements and restrictions of record and current real estate taxes
and assessments. If the interest of Huntington in the Mortgaged Property or any
part thereof shall be endangered or shall be attacked, directly or indirectly,
Borrower hereby authorizes Huntington, at Borrower's expense, to take all
necessary and proper steps for the defense of such interest, including the
employment of counsel, the prosecution or defense of litigation and the
compromise or discharge of claims made against such interest. Any sums so
expended by Huntington shall be charged against Borrower and collectible in
accordance with the terms of Section 12 hereof.
2. FURTHER ASSURANCES. Borrower shall furnish to Huntington evidence of
the title of Borrower to the Mortgaged Property from time to time hereafter as
may be deemed reasonably necessary by and satisfactory to Huntington, and
Borrower shall promptly pay the cost of said title evidence when due and
payable.
Borrower, upon the request of Huntington, shall execute, acknowledge,
deliver, file and record such further instruments and do such further acts as
may be necessary, desirable or proper to carry out the purposes of the Loan
Documents and to subject to the liens and security interests created thereby any
property intended by the terms thereof to be covered thereby, including
specifically, but without limitation, any renewals, additions, substitutions,
replacements, improvements or appurtenances to the Mortgaged Property.
3. SUBROGATION FOR FURTHER SECURITY. Huntington shall be subrogated for
its further security to the lien, although released of record, of any and all
encumbrances paid with any advance of Indebtedness; provided, however, that the
terms and provisions hereof shall govern the rights and remedies of Huntington
and shall supersede the terms, provisions, rights, and remedies under the lien
or liens to which Huntington is subrogated.
4. STATUS QUO. Except as expressly permitted herein or except with the
written consent of Huntington, which consent may be withheld in Huntington's
sole discretion, Borrower shall not (a) sell, assign, mortgage, pledge or
otherwise convey or further encumber the Mortgaged Property, or any portion
thereof, or legal, equitable or beneficial interest therein; (b) sell, assign,
pledge or otherwise transfer any beneficial interests in Borrower which
individually or in the aggregate would have the effect of transferring the power
to direct the operations of Borrower or the Mortgaged Property; (c) contract for
any of the same; (d) permit the Mortgaged Property,
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or any portion thereof, or legal, equitable or beneficial interest therein, to
be subject to any superior or inferior lien or encumbrance; (e) subdivide,
resubdivide or submit to the condominium form of ownership all or any portion of
the Mortgaged Property, or any portion thereof; or (f) initiate or acquiesce in
any change in the zoning classification of the Property or any portion thereof.
5. PAYMENT OF INDEBTEDNESS. Borrower shall promptly pay the
Indebtedness as the same becomes due and payable.
6. ESTOPPEL CERTIFICATE. Borrower shall furnish to Huntington within
ten (10) days of any written request of Huntington, a written statement, duly
acknowledged by Borrower, setting forth the sums secured by the Mortgage and any
right of set-off, counterclaim or other defense which Borrower alleges to exist
against such sums and obligations secured by the Mortgage.
7. TAXES AND OTHER IMPOSITIONS. Borrower shall promptly pay or cause to
be paid before delinquency all taxes, assessments, charges, fines or
impositions, general, local or special (collectively the "Impositions"), levied
upon the Mortgaged Property, or any part thereof, or upon Huntington's interest
therein, or upon the Mortgage or the Indebtedness, by any duly or legally
constituted public authority, municipality, township, county or state or the
United States, and upon request, will provide evidence of the payment thereof to
Huntington; provided that Borrower, at Borrower's own cost and expense may, if
it shall in good faith so desire, contest the validity or amount of any
Impositions, in which event Borrower may defer the payment thereof for such
period as such contest shall be actively prosecuted and shall be pending
undetermined; further provided, however, that Borrower shall not allow any such
Impositions so contested to remain unpaid for such length of time as shall
permit all or any portion of the Mortgaged Property, or the lien thereon created
by such item, to be sold by federal, state, county or municipal authority for
the nonpayment thereof. Pending any such contest, Borrower shall maintain
adequate book reserves with respect to such Impositions being contested.
In the event that one or more of the Impositions on Huntington's
interest in the Mortgaged Property, the Mortgage or the Indebtedness cannot be
lawfully paid by Borrower, then Borrower shall repay the Indebtedness in full
without penalty within sixty (60) days after demand therefor by Huntington.
8. ESCROW. Borrower, in order to more fully protect the security of the
Mortgage, does hereby covenant and agree that, if Borrower shall fail to timely
pay or cause to be paid taxes or assessments as provided above, or in the event
of any other default and Huntington does not then elect to exercise its other
remedies, then Borrower shall, upon request of Huntington, pay to Huntington on
the first day of each month, until the Indebtedness is fully paid, a sum equal
to one-twelfth (1/12) of the known or estimated yearly taxes, assessments,
premiums for such insurance as may be required by the terms hereof. Huntington
shall hold such monthly payments which may be mingled with its general funds,
without obligation to pay interest thereon, unless otherwise required by
applicable law, to pay such taxes, assessments, and insurance premiums when due.
Borrower agrees that sufficient funds shall be so accumulated for the payment of
said charges one (1) month prior to the due date thereof and that Borrower shall
furnish Huntington with proper statements covering the same fifteen (15) days
prior to the due dates thereof. In the event of foreclosure of the Mortgage, or
if Huntington should take a deed in lieu of foreclosure, the amount so
accumulated shall be credited on account of the unpaid principal or interest. If
the total of the monthly payments as made under this Section 9 shall exceed the
payments actually made by Huntington, such excess shall be credited on
subsequent monthly payments of the same nature, but if the total of such monthly
payments so made under this Section 9 shall be insufficient to pay such taxes,
assessments, and insurance premiums then due, then said Borrower shall pay upon
demand the amount necessary to make up the deficiency, which payments shall be
secured by the Mortgage. To the extent that all the provisions of this Section 9
for such payments of taxes, assessments, and insurance premiums to Huntington,
are complied with, Borrower shall be relieved of compliance with the covenants
contained in Sections 7 and 8 herein as to the amounts paid only, but nothing
contained in this Section 9 shall
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<PAGE> 4
be construed as in any way limiting the rights of Huntington at its option to
pay any and all of said items when due.
9. INSURANCE. In the event Borrower shall acquire title to the
Improvements, it shall furnish Huntington such insurance coverage, and in such
amounts as Huntington may reasonably require.
10. WASTE; REPAIR. Borrower shall neither commit nor permit any waste
on the Property and shall keep all Improvements now or hereafter erected on the
Property in good condition and repair.
11. ADVANCES SECURED BY MORTGAGE. Upon failure of Borrower to comply
with any of these covenants and agreements as to the payment of taxes or
assessment, and other charges, Huntington may, at its option, pay the same, and
any sums so paid by Huntington, together with the reasonable fees of counsel
employed by Huntington in consultation and in connection therewith, shall be
charged against Borrower, shall be immediately due and payable by Borrower,
shall bear interest at the Default Rate of Interest (as defined in the Note) and
shall be a lien upon the Mortgaged Property and be secured by the Mortgage and
may be collected in the same manner as the principal debt hereby secured.
12. USE. Unless Huntington otherwise agrees in writing, Borrower shall
not allow changes in the nature of the occupancy for which the Property and
Improvements were intended at the time the Mortgage was executed. Borrower shall
comply with the laws, ordinances, regulations and requirements of any
governmental body applicable to the Mortgaged Property, both during the
construction of any Improvements on the Property and subsequent to the
completion thereof, and Borrower shall not permit the use thereof for any
illegal purpose.
13. CONDEMNATION. If all or any part of the Property or Improvements is
damaged, taken or acquired, either temporarily or permanently, in any
condemnation proceeding or by exercise of the right of eminent domain or, with
Huntington's consent, by any conveyance in lieu thereof, the amount of any award
or other payment for such taking relating to the Property, or conveyance or
damages made in consideration thereof, to the extent of the full amount of the
then remaining unpaid Indebtedness, is hereby assigned to Huntington, and
Huntington is empowered to collect and receive the same and to give proper
receipts therefor in the name of Borrower, and the same shall be paid forthwith
to Huntington. Any award or payment so received by Huntington may at the option
of Huntington be retained and applied, in whole or in part, to the Indebtedness
(whether or not then due and payable) in such manner as Huntington may determine
or released in whole or in part to Borrower.
14. ASSIGNMENT OF GROUND LEASE.
(a) Borrower hereby absolutely and unconditionally assigns,
transfers and sets over unto Huntington and Huntington's successors and assigns
all of its right, title and interest as lessor under the Ground Lease and all
future leases covering the Mortgaged Property, together with any extensions or
renewals thereof and any guaranties of any tenants' obligations thereunder, and
all of the rents, royalties, bonuses, income, receipts, revenues, issues and
profits now due or which may hereafter become due under the Ground Lease or any
extensions or renewals thereof, all liquidated damages following default under
the Ground Lease and all proceeds payable under any policy of insurance covering
loss of rents resulting from untenantability caused by damage to any part of the
Mortgaged Property (such rents, income, receipts, revenues, issues, profits and
other moneys assigned hereby are hereinafter collectively called "Rents"),
together with any and all rights and remedies which Borrower may have against
the tenant under the Ground Lease or others in possession of the Mortgaged
Property or any part thereof for the collection or recovery of Rents so
assigned. Prior to an Event of Default, as hereinafter defined, Borrower shall
have a license to collect and receive all Rents as trustee for the benefit of
Huntington and Borrower.
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<PAGE> 5
(b) Borrower hereby represents, warrants and agrees that:
(i) Borrower has good title to lessor's interest in
the Ground Lease and Rents hereby assigned and has the right, power and capacity
to make this assignment. No person or entity other than Borrower has or will
have any right, title or interest in or to the Ground Lease or Rents.
(ii) Borrower shall, at Borrower's sole cost and
expense, perform and discharge all of the obligations and undertakings of the
landlord under the Ground Lease and give prompt notice to Huntington of any
failure to do so. Borrower shall use all reasonable efforts to enforce or secure
the performance of each and every obligation and undertaking the tenant under
the Ground Lease and shall appear in and prosecute or defend any action or
proceeding arising under, or in any manner connected with, the Ground Lease or
the obligations and undertakings of the tenant thereunder.
(iii) Borrower shall not further pledge, transfer,
mortgage or otherwise encumber the Ground Lease or the Rents.
(c) Huntington shall not be obligated to perform or discharge
any obligation or duty to be performed or discharged by Borrower under the
Ground Lease; and Borrower hereby agrees to indemnify Huntington for, and to
save Huntington harmless from, any and all liability, damage or expense arising
from the Ground Lease or from this assignment. All amounts indemnified against
hereunder, including reasonable attorneys' fees if paid by Huntington, shall
bear interest at the Default Rate of Interest, as defined in the Note, and shall
be payable by Borrower immediately without demand and shall be secured hereby.
This assignment shall not place responsibility for the control, care,
management, or repair of the Mortgaged Property upon Huntington or make
Huntington responsible or liable for any negligence in the management,
operation, upkeep, repair or control of same resulting in loss or damage or
injury or death to any party.
(d) Upon the occurrence of an Event of Default as hereinafter
defined:
(i) All Rents assigned hereunder shall be paid
directly to Huntington, and Huntington may notify the tenant under the Ground
Lease to pay all of the Rents directly to Huntington, for which this assignment
shall be sufficient warrant;
(ii) Huntington shall have the right in the event of
the institution of foreclosure proceedings to have a receiver appointed for the
collection of the Rents.
In the event that Huntington shall pursue its remedies under
Subsections (i) or (ii) above, the net income, after allowing a reasonable fee
for the collection thereof of the Mortgaged Property, may be applied toward the
payment of taxes and assessments and protection of the Mortgaged Property or
Huntington's lien thereon, and other charges against the Mortgaged Property, or
in the reduction of the Indebtedness and the payment of interest, as Huntington
may elect. If the Rents are not sufficient to meet the costs of collecting the
Rents, any funds expended by Huntington for such purposes shall become
indebtedness of Borrower to Huntington secured by the Mortgage. Unless
Huntington and Borrower agree in writing to other terms of payment, such amounts
shall be payable upon demand from Huntington to Borrower and shall bear interest
from the date of disbursement at the Default Rate of Interest stated in the
Note.
The exercise or failure to exercise any of the above remedies shall not
in any way preclude or abridge the right of Huntington to foreclose the Mortgage
or to take any other legal or equitable action thereon. Huntington shall have
such rights or privileges as aforesaid regardless of the value of the Mortgaged
Property given as security hereunder, and regardless of the solvency or
insolvency of any party bound for the payment of the Indebtedness or the other
sums hereby secured.
(e) Borrower hereby authorizes and directs the tenant under
the Ground Lease to pay Rents to Huntington upon written demand by Huntington,
without further consent of Borrower the tenant under the Ground Lease may rely
upon any written statement delivered by
5
<PAGE> 6
Huntington to it. Any such payment to Huntington shall constitute payment to
Borrower under the Ground Lease.
(f) There shall be no merger of the estates created by the
Ground Lease with the fee estate of the Property and Improvements without the
prior written consent of Huntington.
15. SECURITY AGREEMENT. The Mortgage is intended to be a security
agreement pursuant to the Uniform Commercial Code as enacted in the State of
Ohio (the "UCC") for any of the Mortgaged Property comprising personal property
and fixtures which may be subject to a security interest pursuant to the UCC,
and Borrower hereby grants to Huntington a security interest in said personal
property and fixtures, whether said property is now existing or hereafter
acquired, together with replacements, replacement parts, additions, repairs and
accessories incorporated therein or affixed thereto and, if sold or otherwise
disposed of, the proceeds (including insurance proceeds) thereof. Borrower
agrees to execute and deliver to Huntington UCC financing statements covering
said personal property and fixtures from time to time and in such form as
Huntington may require to perfect or maintain the priority of Huntington's
security interest with respect to said personal property and fixtures, and
Borrower shall bear all costs thereof. Borrower shall not create or suffer to be
created any other security interest in said personal property and fixtures,
including replacements thereof and additions thereto. Upon the occurrence of any
Event of Default as set forth herein, Huntington shall have the remedies of a
secured party under the UCC and, at Huntington's option, may also invoke the
remedies provided herein with respect to such property.
16. DEFAULT. The term "Event of Default" shall have the same meaning as
set forth in the Note, which meaning is incorporated by this reference herein.
Upon the occurrence of any such Event of Default beyond any applicable
cure period, at the option of Huntington, without notice or demand, the same
being hereby expressly waived, the entire amount shall become immediately due
and payable, and, in addition to any other right or remedy which Huntington may
now or hereafter have at law, in equity, or under the Loan Documents, Huntington
shall have the right and power: (a) to foreclose upon the Mortgage and the lien
hereof; (b) to sell the Mortgaged Property according to law; and (c) to enter
upon and take possession of the Mortgaged Property subject to the rights of the
tenant under the Ground Lease and/or have a receiver appointed therefor as set
forth herein.
17. NO WAIVER. The failure of Huntington to exercise any option to
declare the maturity of the principal debt or any other sums hereby secured
under any provision of any of the Loan Documents, or to forbear from exercising
any right or remedy available to Huntington under any provision of any of the
other Loan Documents, shall not be deemed a waiver of the right to exercise such
option, right or remedy or declare such maturity as to such past, continuing or
subsequent violation of any of the covenants and agreements of the Loan
Documents. Acceptance by Huntington of partial payments shall not constitute a
waiver of any Event of Default. From time to time, Huntington may, at
Huntington's option, without giving notice to or obtaining the consent of
Borrower, Borrower's successors or assigns, any junior lienholder or any of the
Guarantors, without liability on Huntington's part and notwithstanding
Borrower's breach of any covenant or agreement of Borrower in the Mortgage,
extend the time for payment of the Indebtedness, or any part thereof, reduce the
payments thereon, release anyone liable on any of said Indebtedness, accept a
renewal note or notes therefor, release from the lien of the Mortgage any part
of the Mortgaged Property, take or release other or additional security,
reconvey any part of the Mortgaged Property, consent to any map or plan of the
Mortgaged Property, consent to the granting of any easement, join in any
extension or subordination agreement, or agree in writing with Borrower to
modify the rate of interest or period of amortization of the Note or to change
the amount of the monthly installments payable thereunder. Any actions taken by
Huntington pursuant to the terms of this Section 16 shall not affect the
obligation of Borrower or Borrower's successors or assigns to pay the sums
secured by the Mortgage and to observe the covenants of Borrower contained
herein, shall not affect the guaranty of any of the Guarantors, and shall not
affect the lien or priority of lien of the Mortgage on the Mortgaged Property.
Borrower shall pay Huntington a reasonable service charge, together with such
title insurance
6
<PAGE> 7
premiums and attorney's fees as may be incurred at Huntington's option for any
such action if taken at Borrower's request.
18. PARCELS; WAIVER OF MARSHALLING. In the event of foreclosure of the
Mortgage, the Mortgaged Property may be sold in one or more parcels or as an
entirety as Huntington may elect.
Notwithstanding the existence of any other security interests in the
Mortgaged Property held by Huntington or by any other party, Huntington shall
have the right to determine the order in which any or all of the Mortgaged
Property shall be subjected to the remedies provided herein. Huntington shall
have the right to determine the order in which any or all portions of the
Indebtedness are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Borrower, any party who becomes liable for Borrower's
obligations and covenants under the Mortgage, and any party who now or hereafter
acquires a security interest in the Mortgaged Property, or any portion thereof,
hereby waives any and all right to require the marshalling of assets in
connection with the exercise of any of the remedies permitted by applicable law
or provided herein.
19. COSTS OF COLLECTION. Borrower hereby agrees to pay to Huntington
all costs of foreclosing the Mortgage, and all costs of enforcing, collecting
and securing, and of attempting to enforce, collect and secure, the Note,
including, without limitation, reasonable attorneys' fees, appraisers' fees,
court costs, notice charges and title insurance charges, whether such attempt be
made by suit, in bankruptcy, or otherwise, and such costs and any other sums due
Huntington under the Loan Documents may be included in any judgment or decree
rendered.
20. HAZARDOUS SUBSTANCES. (a) Borrower hereby covenants and agrees with
Huntington that the following terms shall have the following meanings:
(i) "Environmental Laws" mean all federal, state and
local laws, statutes, ordinances and codes relating to the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of any Hazardous Substance and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives with respect
thereto.
(ii) "Hazardous Substance" means, without limitation,
any flammable explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum and
petroleum based products, methane, hazardous materials, hazardous
wastes, hazardous or toxic substances or related materials, as defined
in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections
1801, et seq.), the Resource Conservation and Recovery Act, as amended
(42 U.S.C. Sections 6901, et seq.), the Toxic Substances Control Act,
as amended (15 U.S.C. Sections 2601, et seq.), or any other applicable
Environmental Law.
(iii) "Indemnitee" means Huntington, its participants
in the loan evidenced by the Note and all subsequent holders of the Mortgage,
their respective successors and assigns, their respective officers, directors,
employees, agents, representatives, contractors and subcontractors and any
subsequent owner of the Property and Improvements who acquires title thereto
from or through Huntington.
(iv) "Release" has the same meaning as given to that
term in the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Sections 9601, et seq.) and the regulations
promulgated thereunder.
(b) Borrower represents and warrants to Huntington that, to its
knowledge after due investigation except as may be set forth in the
environmental report for the Property delivered to Huntington in connection
herewith: (i) the Property and Improvements are not being or have not been used
for the storage, treatment, generation, transportation, processing, handling,
production or disposal of any Hazardous Substance in violation of any
Environmental Laws; (ii) the Property and Improvements do not contain any
Hazardous Substances in violation of any
7
<PAGE> 8
Environmental Laws; (iii) there has been no Release of any Hazardous Substance
on, at or from the Property and Improvements or any property adjacent to or
within the immediate vicinity of the Property and Improvements and Borrower has
not received any form of notice or inquiry with regard to such a Release or
threat of such a Release; (iv) no event has occurred with respect to the
Property and Improvements which, with the passage of time or the giving of
notice, or both, would constitute a violation of any applicable Environmental
Law; (v) there are no agreements or orders or directives of any federal, state
or local governmental agency or authority relating to the Property and
Improvements which require any work, repair, construction, containment, clean
up, investigations, studies, removal or other remedial action with respect to
the Property and Improvements; and (vi) there are no actions, suits, claims or
proceedings, pending or threatened, which seek any remedy, that arise out of the
condition, ownership, use, operation, sale, transfer or conveyance of the
Property and Improvements and (1) a violation or alleged violation of any
applicable Environmental Law, (2) the presence of any Hazardous Substance or a
Release of any Hazardous Substance or the threat of such a Release, or (3) human
exposure to any Hazardous Substance.
(c) Borrower covenants and agrees with Huntington as follows:
(i) Borrower shall keep, and shall cause the tenant
under the Ground Lease and all subtenants, licensees and occupants of the
Property and Improvements to keep, the Property and Improvements free of all
Hazardous Substances, except for Hazardous Substances stored, treated,
generated, transported, processed, handled, produced or disposed of in the
normal operation of the Property and Improvements as a shopping center in
accordance with all Environmental Laws.
(ii) Borrower shall comply with, and shall cause the
tenant under the Ground Lease, all operators, subtenants, licensee and occupants
of the Property and Improvements to comply with, all Environmental Laws.
(iii) Borrower shall promptly provide Huntington with
a copy of all notifications which it gives or receives with respect to any past
or present Release of any Hazardous Substance or the threat of such a Release
on, at or from the Property and Improvements or any property adjacent to or
within the immediate vicinity of the Property and Improvements.
(iv) Borrower shall undertake and complete all
investigations, studies, sampling and testing for Hazardous Substances
reasonably required by Huntington and, in accordance with all Environmental
Laws, all removal and other remedial actions necessary to contain, remove and
clean up all Hazardous Substances that are determined to be present at the
Property and Improvements in violation of any Environmental Laws.
(v) Huntington shall have the right, but not the
obligation, to cure any violation by Borrower of the Environmental Laws and
Huntington's cost and expense to so cure shall be secured by the Mortgage.
(d) Borrower covenants and agrees, at its sole cost and expense, to
indemnify, defend and save harmless Indemnitee from and against any and all
damages, losses, liabilities, obligations, penalties, claims, litigation,
demands, defenses, judgments, suits, actions, proceedings, costs, disbursements
and/or expenses (including, without limitation, reasonable attorneys' and
experts' fees and expenses) of any kind or nature whatsoever which may at any
time be imposed upon, incurred by or asserted or awarded against Indemnitee
arising out of the condition, ownership, use, operation, sale, transfer or
conveyance of the Property and Improvements and (i) the storage, treatment
generation, transportation, processing, handling, production or disposal of any
Hazardous Substance, (ii) the presence of any Hazardous Substance or a Release
of any Hazardous Substance or the threat of such a Release, (iii) human exposure
to any Hazardous Substance, (iv) a violation of any Environmental Law, or (v) a
material misrepresentation or inaccuracy in any representation or warranty or
material breach of or failure to perform any covenant made by Borrower herein
(collectively, the "Indemnified Matters").
8
<PAGE> 9
The liability of Borrower to Indemnitee hereunder shall in no way be
limited, abridged, impaired or otherwise affected by (i) the repayment of all
sums and the satisfaction of all obligations of Borrower under the Note, the
Mortgage or other Loan Documents, (ii) the foreclosure of the Mortgage or the
acceptance of a deed in lieu thereof, (iii) any amendment or modification of the
Loan Documents by or for the benefit of Borrower or any subsequent owner of the
Property and Improvements, (iv) any extensions of time for payment or
performance required by any of the Loan Documents, (v) the release or discharge
of the Mortgage or of Borrower, any of the Guarantors or any other person from
the performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Loan Documents whether by Huntington, by
operation of law or otherwise, (vi) the invalidity or unenforceability of any of
the terms or provisions of the Loan Documents, (vii) any exculpatory provision
contained in any of the Loan Documents limiting Huntington recourse to property
encumbered by the Mortgage or to any other security or limiting Huntington
rights to a deficiency judgment against Borrower, (viii) any applicable statute
of limitations, (ix) the sale or assignment of the Note or the Mortgage, (x) the
sale, transfer or conveyance of all or part of the Property and Improvements,
(xi) the dissolution or liquidation of Borrower, (xii) the death or legal
incapacity of Borrower, (xiii) the release or discharge, in whole or in part, of
Borrower in any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding, or (xiv) any other
circumstances which might otherwise constitute a legal or equitable release or
discharge, in whole or in part, of Borrower under the Note or the Mortgage.
The foregoing indemnity shall be in addition to any and all other
obligations and liabilities Borrower may have to Huntington at common law.
21. SUBORDINATE MORTGAGES. Borrower shall not, without the prior
written consent of Huntington, which consent may be withheld in Huntington's
sole discretion, grant or permit to be created any lien, security interest or
other encumbrance, other than Permitted Encumbrances, covering any of the
Mortgaged Property (each a "Subordinate Mortgage"). If Huntington consents to a
Subordinate Mortgage or if the foregoing prohibition is determined by a court of
competent jurisdiction to be unenforceable, any such Subordinate Mortgage shall
contain express covenants to the effect that:
(a) the lien of the Subordinate Mortgage and all instruments
incorporated therein by reference is and always shall be unconditionally
subordinate to the lien of the Mortgage and to all advances made pursuant to,
and sums secured by, the Mortgage, and the Mortgage and all instruments
incorporated herein by reference may be renewed, extended, restructured,
modified, increased or reinstated at any time without giving notice to or
obtaining the consent of the Subordinate Mortgage holder;
(b) if any action shall be instituted to foreclose or
otherwise enforce the Subordinate Mortgage, no tenant of any of the Leases shall
be named as a party defendant and no action shall be taken which would terminate
any occupancy or tenancy without the prior written consent of Huntington;
(c) in the event of any conflict between the covenants and
agreements of the Mortgage and the Subordinate Mortgage, the covenants and
agreements of the Mortgage shall prevail;
(d) Rents, if collected by or for the holder of the
Subordinate Mortgage, shall be applied first to the payment of the Indebtedness
and expenses incurred in the ownership, operation and maintenance of the
Mortgaged Property in such order as Huntington may determine, prior to being
applied to any indebtedness secured by the Subordinate Mortgage;
(e) a copy of any notice of default under the Subordinate
Mortgage and written notice and opportunity to cure of not less than thirty (30)
days prior to the commencement of any action to foreclose or otherwise enforce
the Subordinate Mortgage shall be given to Huntington; and
9
<PAGE> 10
(f) the holder of the Subordinate Mortgage shall acknowledge
the existence of the Indebtedness secured hereby and further acknowledge that
the lien of the Mortgage shall at all times be and remain superior and prior to
the lien of the Subordinate Mortgage to the extent of the entire Indebtedness
secured hereby, notwithstanding any change in the variable rate of interest
being charged under the Note.
22. PRIORITY OF MORTGAGE LIEN. Huntington, at Huntington's option, is
authorized and empowered to do all things provided to be done by a mortgagee
under Section 1311.14 of the Ohio Revised Code, and any present or future
amendments or supplements thereto, for the protection of Huntington's interest
in the Mortgaged Property.
23. NOTICE. Any notice required or permitted to be given hereunder
shall be in writing. If mailed by first class United States mail, postage
prepaid, registered or certified with return receipt requested, then such shall
be effective upon its deposit in the mails. Notice given in any other manner
shall be effective only if and when received by the addressee. For purposes of
notice, the addresses of Borrower and Huntington shall be as set forth below;
provided however, that either party shall have the right to change such party's
address for notice hereunder to any other location within the continental United
States by the giving of thirty (30) days' notice to the other party.
If to Borrower: Glimcher Properties Limited Partnership
20 South Third Street
Columbus, Ohio 43215
Attention: General Counsel
If to Huntington: The Huntington National Bank
Commercial Real Estate Group
41 South High Street
Columbus, Ohio 43215
24. MISCELLANEOUS. The covenants herein contained shall bind, and the
benefits and advantages shall inure to, the respective successors and assigns of
the parties hereto. Whenever used, the singular number shall include the plural,
the plural the singular, and the use of any gender shall include all genders. If
any provision of the Mortgage is illegal, or hereafter rendered illegal, or is
for any other reason void, voidable or otherwise unenforceable, or hereafter
rendered void, voidable or otherwise unenforceable, the remainder of the
Mortgage shall not be affected thereby, but shall be construed as if it does not
contain such provision. Each right and remedy provided in the Mortgage is
distinct and cumulative to all other rights or remedies under the Mortgage or
afforded by law or equity, and may be exercised concurrently, independently or
successively, in any order whatsoever. The Mortgage shall be governed by and
construed under the laws of the State of Ohio.
HUNTINGTON, BY ACCEPTANCE OF THIS MORTGAGE, AND BORROWER HEREBY
MUTUALLY, VOLUNTARILY, IRREVOCABLY AND UNCONDITIONALLY WAIVE FOR THE BENEFIT OF
THE OTHER ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE LOAN DOCUMENTS, THE TRANSACTIONS RELATED
THERETO OR THE RELATIONSHIP ESTABLISHED THEREBY. THIS PROVISION IS A MATERIAL
INDUCEMENT TO HUNTINGTON AND BORROWER TO ENTER INTO THIS TRANSACTION. IT SHALL
NOT IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY HUNTINGTON'S ABILITY TO
PURSUE ITS REMEDIES.
PROVIDED, HOWEVER, that these presents are upon the condition that if
Borrower shall fully and promptly pay when due the Indebtedness and shall
completely, faithfully and punctually perform all of the Obligations under the
terms and conditions of the Loan Documents, then the Mortgage shall be void;
otherwise it shall remain in full force and effect in law and equity forever.
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<PAGE> 11
IN WITNESS WHEREOF, Borrower has caused the Mortgage to be executed as
of the 13th day of October, 1998.
Signed and acknowledged Borrower:
in the presence of: GLIMCHER PROPERTIES LIMITED
PARTNERSHIP
/s/ Robert C. Kiger By: Glimcher Properties Corporation,
- -------------------------------- a Delaware corporation,
Witness Robert C. Kiger its sole General Partner
------------------------
(printed)
/s/ Dennis J. Kovatch By: /s/ George A. Schmidt
- -------------------------------- -------------------------------
Witness Dennis J. Kovatch
------------------------
(printed) Its: Senior Vice President
-------------------------------
STATE OF OHIO
--------------------
COUNTY OF FRANKLIN, SS:
--------------------
On this 13th day of October, 1998, before me, a Notary Public in and
for said County and State, personally appeared George A. Schmidt, who
acknowledged himself to be the Senior Vice President, of GLIMCHER PROPERTIES
CORPORATION, a Delaware corporation, the sole general partner of GLIMCHER
PROPERTIES LIMITED PARTNERSHIP, the Delaware limited partnership which executed
the foregoing instrument, and who acknowledged that he, as such Senior Vice
President of said corporation, being duly authorized by the board of directors
of said corporation, did execute the foregoing instrument for and on behalf of
said limited partnership and that such signing is the free act and deed of said
limited partnership for the uses and purposes therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/ Robert C. Kiger
--------------------------------
Notary Public
Commission
Expiration:_________________
This instrument prepared by:
Robert C. Kiger, Attorney at Law
Porter, Wright, Morris & Arthur
41 South High Street
Columbus, Ohio 43215
The Huntington National Bank
Commercial Real Estate Group
January 3, 1994 Revision
11
<PAGE> 12
EXHIBIT "A"
LEGAL DESCRIPTION
<PAGE> 1
Exhibit 10.80
This Instrument Prepared By:
Robert C. Kiger, Attorney-at-Law Twin County Plaza
PORTER, WRIGHT, MORRIS & ARTHUR Galax, VA
41 South High Street
Columbus, Ohio 43215
THIS IS A DEED OF TRUST,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (herein
"Instrument") is made this 13th day of October, 1998, between the Mortgagor,
GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, whose
address is 20 South Third Street, Columbus, Ohio 43215 (herein "Trustor/Grantor"
or "Borrower"), ALEXANDER TITLE AGENCY, INC., a Virginia corporation, with its
principal office at 7921 Jones Branch Drive, McLean, Virginia 22102, as Trustee
(herein "Trustee/Grantee") and THE HUNTINGTON NATIONAL BANK, a national banking
association, whose address is 41 South High Street, Columbus, Ohio 43215 (herein
"Beneficiary" or "Lender"), also a Grantee for purposes of indexing. The address
for Lender to which any notice shall be given is 41 South High Street, Columbus,
Ohio 43215.
WHEREAS, Borrower is indebted to Lender in the principal sum of
Fourteen Million and 00/100 Dollars ($14,000,000.00), which indebtedness is
evidenced by a promissory note of even date herewith from Borrower (the "Note"),
the terms and conditions of which are made a part hereof as if fully restated
herein, and which provides for installments of interest, with the balance of the
indebtedness, if not sooner paid, due and payable on April 13, 1999.
WHEREAS, the Real Estate and Improvements, both as hereinafter defined,
and the personal property and fixtures described below (all of the foregoing
herein collectively the "Property") encumbered by this Instrument constitutes
one of four shopping center properties mortgaged by Borrower to Lender as
security for such indebtedness pursuant to security instruments of even date
herewith;
NOW, THEREFORE, IN ORDER TO SECURE, TO THE EXTENT OF THREE MILLION AND
00/100 DOLLARS ($3,000,000.00) WITH INTEREST THEREON the repayment of the
indebtedness evidenced by the Note of even date herewith, and all renewals,
extensions and modifications thereof, and the performance of the covenants and
agreements of Borrower contained in the Note; AND IN ORDER TO SECURE ALSO the
payment of all other sums with interest thereon advanced in accordance herewith
to protect the security of this Instrument; and the performance of the covenants
and agreements of Borrower herein (and in other security instruments securing
the indebtedness) contained, Borrower does hereby grant, convey and assign to
Trustee, its successors and assigns in trust, with power of sale, for the
purpose of securing the foregoing indebtedness and obligations, the following
described real property:
See legal description attached hereto as Exhibit "A" and made a part
hereof (the "Real Estate");
TOGETHER WITH the following, whether now owned or hereafter acquired by
Borrower: (a) all improvements now or hereafter attached to or placed, erected,
constructed or developed on the property (collectively the "Improvements"); (b)
all fixtures, furnishings, equipment, inventory, and other articles of personal
property (collectively the "Personal Property") that are now or hereafter
attached to or used in or about the Improvements or that are necessary or useful
for the complete and comfortable use and occupancy of the Improvements for the
purposes for which they were or are to be attached, placed, erected, constructed
or developed or that may be used in or related to the planning, development,
financing or operation of the Improvements, and all renewals of or replacements
or substitutions for any of the foregoing, whether or not the same are or shall
be attached to the Improvements or the property; (c) all water and water rights,
timber, crops, and mineral interests pertaining to the property; (d) all
building materials and equipment now or hereafter delivered to and intended to
be installed in or on the Improvements or the property; (e) all plans and
specifications for the Improvements; (f) all contracts relating to the property,
the Improvements or the Personal Property; (g) all deposits (including, without
limitation, tenants' security deposits), bank accounts, funds, documents,
contract rights, accounts, commitments, construction agreements, architectural
agreements, general intangibles (including, without limitation, trademarks,
trade names and symbols), instruments, notes and chattel paper arising from or
by virtue of any transactions related to the property, the Improvements or the
Personal Property; (h) all permits, licenses, franchises, certificates, and
other rights and privileges obtained in connection with the
<PAGE> 2
property, the Improvements or the Personal Property; (i) all proceeds arising
from or by virtue of the sale, lease or other disposition of the property, the
Improvements, the Personal Property or any portion thereof or interest therein;
(j) all proceeds (including, without limitation, premium refunds) of each policy
of insurance relating to the property, the Improvements or the Personal
Property; (k) all proceeds from the taking of any of the property, the
Improvements, the Personal Property or any rights appurtenant thereto by right
of eminent domain or by private or other purchase in lieu thereof (including,
without limitation, change of grade of streets, curb cuts or other rights of
access), for any public or quasi-public use under any law; (l) all right, title
and interest of Borrower in and to all streets, roads, public places, easements
and rights-of-way, existing or proposed, public or private, adjacent to or used
in connection with, belonging or pertaining to the property; (m) all of the
leases, licenses, occupancy agreements, rents (including without limitation,
room rents), royalties, bonuses, issues, profits, revenues or other benefits of
the property, the Improvements or the Personal Property, including, without
limitation, cash or securities deposited pursuant to leases to secure
performance by the lessees of their obligations thereunder; (n) all rights,
hereditaments and appurtenances pertaining to the foregoing; and (o) other
interests of every kind and character that Borrower now has or at any time
hereafter acquires in and to the property, Improvements, and Personal Property
described herein and all property that is used or useful in connection
therewith, including rights of ingress and egress and all reversionary rights or
interests of Borrower with respect thereto (all of the same, including the
property, collectively the "Property").
Borrower covenants that Borrower is lawfully seized of the estate
hereby conveyed and has the right to mortgage, grant, convey and assign the
Property; that the Property is unencumbered except for the lien of this
Instrument and the lien of real estate taxes and assessments not yet due; and
that Borrower will warrant and defend generally the title to the Property
against all claims and demands, whatsoever, except for the lien of real estate
taxes and assessments, easements and restrictions of record and any other
encumbrances approved by Lender for inclusion in the title insurance policy to
be issued to insure the lien of this Instrument.
Borrower and Lender covenant and agree as follows:
1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly pay when
due the principal of and interest on the indebtedness evidenced by the Note, any
prepayment and late charges provided in the Note, and all other sums secured by
this Instrument. Borrower shall timely perform its other obligations under the
Note and under the other instruments given to secure the indebtedness secured by
this Instrument.
2. TAXES AND OTHER IMPOSITIONS. Borrower shall promptly pay before
delinquency all taxes, assessments, charges, fines or impositions, general,
local or special (collectively the "Impositions"), levied upon the Property, or
any part thereof, or upon Lender's interest therein, or upon the Property or the
Indebtedness, by any duly or legally constituted public authority, municipality,
township, county or state or the United States, and upon request, will provide
evidence of the payment thereof to Lender; provided that Borrower, at Borrower's
own cost and expense may, if it shall in good faith so desire, contest the
validity or amount of any Impositions, in which event Borrower may defer the
payment thereof for such period as such contest shall be actively prosecuted and
shall be pending undetermined; further provided, however, that Borrower shall
not allow any such Impositions so contested to remain unpaid for such length of
time as shall permit all or any portion of the Property, or the lien thereon
created by such item, to be sold by federal, state, county or municipal
authority for the nonpayment thereof. Pending any such contest, Borrower shall
maintain adequate book reserves with respect to such Impositions being
contested.
In the event that one or more of the Impositions on Lender's interest
in the Property, the Deed of Trust or the Indebtedness cannot be lawfully paid
by Borrower, then Borrower shall repay the Indebtedness in full without penalty
within sixty (60) days after demand therefor by Lender.
Upon default in payment of any of the following described items, or
upon the occurrence of any other event of default under this Instrument or under
the Note, Lender shall have the right, at its option, and if Lender does not
elect to accelerate the indebtedness secured hereby and to pursue its other
remedies, to require Borrower to pay to Lender on the day monthly installments
of principal or interest are payable under the Note (or on another day
designated in writing by Lender), until the Note is paid in full, a sum (herein
"Funds") equal to one-twelfth of (a) the yearly water and sewer rates and taxes
and assessments which may be levied on the Property; (b) the yearly ground
rents, if any; (c) the yearly premium installments for fire and other hazard
insurance, rent loss insurance and such other insurance
2
<PAGE> 3
covering the Property as Lender may require pursuant to paragraph 5 hereof; and
(d) such other Funds for other taxes, charges, premiums, assessments and
impositions in connection with Borrower or the Property which Lender shall
reasonably deem necessary to protect Lender's interests (herein "Other
Impositions"); all as reasonably estimated initially and from time to time by
Lender.
The Funds shall be held and applied by Lender to pay said rates, rents,
taxes, assessments, insurance premiums and Other Impositions so long as Borrower
is not in breach of any covenant or agreement of Borrower in this Instrument.
Lender shall make no charge for so holding and applying the Funds, analyzing
said account or for verifying and compiling said assessments and bills, unless
Lender is required under applicable law to pay Borrower interest, earnings or
profits on the Funds and applicable law permits Lender to make such a charge.
Unless applicable law requires interest, earnings or profits to be paid, Lender
shall not be required to pay Borrower any interest, earnings or profits on the
Funds. Lender shall give to Borrower, without charge, an annual accounting of
the Funds in Lender's normal format showing credits and debits to the Funds and
the purpose for which each debit to the Funds was made. The Funds are pledged as
additional security for the sums secured by this Instrument and shall be subject
to the right of set off.
If the amount of the Funds held by Lender at the time of the annual
accounting thereof shall exceed the amount deemed necessary by Lender to provide
for the payment of water and sewer rates, taxes, assessments, insurance
premiums, rents and Other Impositions, as they fall due, such excess shall be
credited to Borrower on the next monthly installment or installments of Funds
due. If at any time the amount of the Funds held by Lender shall be less than
the amount deemed necessary by Lender to pay water and sewer rates, taxes,
assessments, insurance premiums, rents and Other Impositions, as they fall due,
Borrower shall pay to Lender any amount necessary to make up the deficiency
immediately after notice from Lender to Borrower requesting payment thereof.
Upon Borrower's breach of any covenant or agreement of Borrower in this
Instrument, Lender may apply, in any amount and in any order as Lender shall
determine in Lender's sole discretion, any Funds held by Lender at the time of
application (a) to pay rates, rents, taxes, assessments, insurance premiums and
Other Impositions which are now or will hereafter become due, or (b) as a credit
against sums secured by this Instrument. Upon payment in full of all sums
secured by this Instrument, Lender shall promptly refund to Borrower any Funds
held by Lender.
3. APPLICATION OF PAYMENTS. Unless applicable law provides otherwise,
all payments received from Borrower under the Note or this Instrument shall be
applied in the following order of priority: (a) amounts payable to Lender by
Borrower under paragraph 2 hereof; (b) interest payable on the Note; (c)
principal of the Note; (d) interest payable on advances made pursuant to
paragraph 8 hereof; (e) principal of advances made pursuant to paragraph 8
hereof; and (f) any other sums secured by this Instrument in such order as
Lender, at Lender's option, may determine; provided, however, that Lender may,
at Lender's option, apply any sums payable pursuant to paragraph 8 hereof prior
to interest on and principal of the Note, but such application shall not
otherwise affect the order of priority of application specified in this
paragraph 3.
4. CHARGES; LIENS. Borrower shall promptly discharge any lien which
has, or may have, priority over or equality with, the lien of this Instrument
(other than the lien of real estate taxes and assessments which shall be paid in
accordance with the preceding paragraph), and Borrower shall pay, when due, the
claims of all persons supplying labor or materials to or in connection with the
Property. Without Lender's prior written permission, Borrower shall not allow
any lien, encumbrance, or other interest in the Property inferior to the lien of
this Instrument to be perfected against the Property, provided that Borrower may
contest any mechanic's or materialman's lien in good faith and by appropriate
proceedings; further provided that Borrower shall cause such mechanic's or
materialman's lien to be promptly discharged of record upon commencement of any
judicial proceeding to enforce such lien and shall pay all expenses incurred by
Lender in order to protect the lien of this Instrument.
5. INSURANCE AND INDEMNIFICATION. Borrower shall provide, maintain and
keep in force at all times the following policies of insurance:
(a) Insurance against loss or damage to the Improvements and
the Property caused by fire and any of the risks covered by insurance of the
type now known as "coverage against all risks of physical loss", in an amount
equal to one hundred percent (100%) of the replacement cost of the Improvements
and the Property and sufficient to prevent Borrower and Lender from becoming
co-insurers, and otherwise with terms and conditions acceptable to Lender;
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(b) Comprehensive broad form general liability insurance,
insuring against any and all claims for personal injury, death or property
damage occurring on, in or about the Property, the Improvements and the
adjoining streets, sidewalks and passageways, subject to a combined single limit
of not less than Two Million Dollars ($2,000,000.00) for personal injury, death
or property damage arising out of any one accident and a general aggregate limit
of not less than Five Million Dollars ($5,000,000.00), and otherwise with terms
and conditions acceptable to Lender;
(c) Worker's compensation insurance (including employer's
liability insurance, if available and requested by Lender) for all employees of
Borrower engaged on or with respect to the Property and the Improvements in the
limits established by law or, if limits are not so established, in such amounts
as are acceptable to Lender;
(d) During the course of any development or construction of
the Improvements, builder's completed value risk insurance against "all risks of
physical loss", including collapse and transit coverage, in the amounts set
forth in Subsection 5(a) above, and otherwise with terms and conditions
acceptable to Lender;
(e) Upon obtaining a certificate of occupancy for the
Improvements or any portion thereof, business interruption insurance and/or loss
of "rental value" insurance in an amount not less than the appraised rentals for
the Property for a minimum of twelve (12) months, and otherwise with terms and
conditions acceptable to Lender;
(f) If the Improvements are located in a federally-designated
flood hazard area, then flood hazard coverage, in the maximum amount available
and otherwise with terms and conditions acceptable to Lender; and
(g) Such other insurance coverage, and in such amount, as may
from time to time be required by Lender against the same or other hazards.
All such policies shall be in a form acceptable to Lender. Each policy
of casualty insurance shall contain a mortgagee clause, substantially in the
form of the standard New York mortgagee clause or otherwise acceptable to
Lender, showing Lender as mortgagee. Each policy of liability insurance shall
show Lender as an additional insured. Unless the policy so provides, each policy
of insurance required by the terms of this Instrument shall contain an
endorsement by the insurer, for the benefit of Lender, (i) that any loss shall
be payable in accordance with the terms of such policy notwithstanding any act
or negligence of Borrower which might otherwise result in forfeiture of said
insurance, (ii) that any rights of set-off, counterclaim or deductions against
Borrower are waived and (iii) that such policy shall not be canceled or changed
except upon not less than thirty (30) days prior written notice delivered to
Lender.
All such insurance policies and renewals thereof shall be written by
companies with a Best's Insurance Reports policy holders rating of A+ and a
financial size category of Class XV or be expressly approved by Lender in
writing.
Lender shall have the right to hold the policies, or certificates
thereof acceptable to Lender with certified copies of the policies, and Borrower
shall promptly furnish to Lender all renewal notices and all receipts of paid
premiums. At least thirty (30) days prior to the expiration date of any such
policy, Borrower shall deliver to Lender a renewal policy, or certificate
thereof, in form acceptable to Lender.
If Lender is made a party defendant to any litigation concerning the
Loan Documents as hereinafter defined or the Property or any part thereof or
interest therein or the occupancy thereof by Borrower, then Borrower shall
indemnify, defend and hold Lender harmless from all liability by reason of said
litigation, including reasonable attorneys' fees and expenses incurred by Lender
in any such litigation, whether or not any such litigation is prosecuted to
judgment. Borrower waives any and all right to claim or recover against Lender,
its officers, employees, agents and representatives, for loss of or damage to
Borrower, the Property, other property of Borrower or the property of others
under control of Borrower from any cause insured against or required to be
insured against by the provisions of this Instrument.
Borrower shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section unless Lender has approved the insurance company and the form and
content of the insurance policy, including, without limitation, the naming
thereon of Lender as a named insured with loss payable to Lender under a
standard mortgage clause of
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<PAGE> 5
the character above described. Borrower shall immediately notify Lender whenever
any such separate insurance is taken out and shall promptly deliver to Lender
copies of the policies and certificates evidencing such insurance.
Nothing contained in this Section 5 shall prevent Borrower from keeping
the Improvements and Property insured or causing the same to be insured against
the risks referred to in this Section 5 under a policy or policies of blanket
insurance which may cover other property not subject to the lien of this
Instrument; provided, however, that any such policy of blanket insurance (i)
shall specify therein the amount of the total insurance allocated to the
Improvements and Property, which amount shall be not less than the amount
otherwise required to be carried under this Instrument; (ii) shall not contain
any clause which would result in the insured thereunder becoming a co-insurer of
any loss with the insurer under such policy; and (iii) shall in all other
respects comply with the provisions of this Instrument.
In the event the damage or destruction to the Improvements is in an
amount of $500,000.00 or less, and provided there is no Event of Default, as
hereinafter defined, the insurance proceeds shall be paid to Borrower, and used
by Borrower to (i) repair or restore the Improvements to the same condition in
which they were prior to the Casualty, or (ii) for its own purposes, after first
making such repairs to the remaining Improvements so that the same may continue
as a first class shopping center, both architecturally and aesthetically.
Borrower may elect option (ii) above only if it first provides to Lender
evidence satisfactory to Lender that there will be no material decrease in the
fair market value of the Property.
In the event the damage or destruction to the Improvements is in an
amount in excess of $500,000.00, and provided there is no Event of Default, as
hereinafter defined, the insurance proceeds are to be applied toward the
restoration of the Improvements. Such sums shall be deposited in escrow with
Lender as escrow agent for the purpose of repairing, restoring or reconstructing
the Improvements. Such proceeds shall be disbursed by Lender as work progresses,
provided that prior to any disbursement, Lender is in receipt of proof
reasonably satisfactory to it that: (i) the work has been completed, (ii) there
are no outstanding mechanics liens or materialmen's liens, and (iii) that all
charges, costs and expenses incurred with respect to work completed have been
paid in full or will be paid in full with such proceeds. Prior to the release of
any proceeds, Lender must be satisfied that repair, restoration or
reconstruction of the damaged or destroyed Improvements will be substantially
equal in size, quality and value to the Improvements then presently erected on
the Property as existed immediately prior to the loss and the plans and
specifications therefor must be approved by Lender. In the event Lender believes
it is necessary in order to establish value, Lender may, at its option, cause
the Property to be reappraised at Borrower's expense. All insurance proceeds
shall be payable to Lender. The adjustment of such insurance proceeds with the
carrier must be approved by Lender.
Anything in this Section 5 to the contrary notwithstanding, if there
shall be an Event of Default, as hereinafter defined, the insurance proceeds
shall, at the sole option of Lender, be applied by Lender to the Indebtedness in
such order as Lender may determine.
6. PRESERVATION AND MAINTENANCE OF PROPERTY. Borrower (a) shall not
commit waste or permit impairment or deterioration of the Property, (b) shall
not abandon the Property, (c) shall restore or repair promptly and in a good and
workmanlike manner all or any part of the Property to the equivalent of its
original condition, or such other condition as Lender may approve in writing, in
the event of any damage, injury or loss thereto, whether or not insurance
proceeds are sufficient to cover in whole or in part the costs of such
restoration or repair, (d) shall keep the Property, including Improvements,
fixtures, equipment, machinery and appliances thereon in good repair and shall
replace fixtures, equipment, machinery and appliances on the Property when
necessary to keep such items in good repair, (e) materially shall comply with
all laws, ordinances, regulations and requirements of any governmental body
applicable to the Property, (f) shall operate the Property as a shopping center,
and (g) shall give notice in writing to Lender of and, unless otherwise directed
in writing by Lender, appear in and defend any action or proceeding purporting
to affect the Property, the security of this Instrument or the rights or powers
of Lender. Neither Borrower nor any tenant or other person shall remove,
demolish or alter any improvement now existing or hereafter erected on the
Property or any fixture, equipment, machinery or appliance in or on the Property
except when incident to the replacement of fixtures, equipment, machinery and
appliances with items of like kind.
7. USE OF PROPERTY. Unless required by applicable law or unless Lender
has otherwise agreed in writing, Borrower shall not allow changes in the use for
which all or any part of the
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Property was intended at the time this Instrument was executed. Borrower shall
not initiate or acquiesce in a change in the zoning classification of the
Property without Lender's prior written consent.
8. PROTECTION OF LENDER'S SECURITY. If Borrower fails to perform the
covenants and agreements contained in this Instrument, or if any action or
proceeding is commenced which affects the Property or title thereto or the
interest of Lender therein, including, but not limited to, eminent domain,
insolvency, code enforcement, or arrangements or proceedings involving a
bankrupt or decedent, then Lender at Lender's option may make such appearances,
disburse such sums and take such action as Lender deems necessary, in its sole
discretion, to protect Lender's interest, including, but not limited to, (a)
disbursement of attorney's fees, (b) entry upon the Property to make repairs,
and (c) procurement of satisfactory insurance as provided in paragraph 5 hereof.
Any amounts disbursed by Lender pursuant to this paragraph, with
interest thereon, shall become additional indebtedness of Borrower secured by
this Instrument. Unless Borrower and Lender agree to other terms of payment,
such amounts shall be immediately due and payable and shall bear interest from
the date of disbursement at the rate stated in the Note unless collection from
Borrower of interest at such rate would be contrary to applicable law, in which
event such amounts shall bear interest at the highest rate which may be
collected from Borrower under applicable law. Borrower hereby covenants and
agrees that Lender shall be subrogated to the lien of any deed of trust or other
lien discharged, in whole or in part, by the indebtedness secured hereby.
Nothing contained in this paragraph shall require Lender to incur any expense or
take any action hereunder.
9. INSPECTION. Any person authorized by Lender shall have the right to
enter upon and inspect the Property after reasonable notice to Borrowers and
during normal business hours. Lender shall have no duty, however, to make such
inspections. Any inspection of the Property by Lender shall be entirely for its
benefit, and Borrower shall in no way rely or claim reliance thereon.
10. RENT ROLL AND FINANCIAL STATEMENTS. Borrower shall maintain full
and correct books and records open to Lender's inspection showing in detail the
income, expenses and earnings of Borrower and of the Property, and shall provide
Lender the following:
(a) a financial statement for the Property consisting of a
complete itemized statement of income and operating expenses, prepared in
accordance with general accounting principles or otherwise in form acceptable to
Lender and certified by Borrower's chief executive or financial officer, within
ninety (90) days after the end of each fiscal year of Borrower, or as requested
from time to time by Lender, but not more often than quarterly;
(b) a rent roll of the Property, certified by the chief
executive or financial officer of Borrower, within thirty (30) days after the
end of each fiscal year of Borrower, or as requested from time to time by
Lender, but not more often than quarterly, containing the name and address of
each tenant, square footage of leased premises, annual rent, rent per square
foot, lease commencement date, lease expiration date, date through which rent is
paid, and the nature and extent of any defaults by each tenant;
(c) a financial statement for Borrower consisting of a balance
sheet and a complete itemized statement of annual income and operating expenses
of Borrower, prepared in accordance with generally accepted accounting
principles or otherwise in form acceptable to Lender and certified by Borrower's
chief executive or financial officer, within ninety (90) days after the end of
each fiscal year of Borrower, or as requested from time to time by Lender;
(d) such other financial information as Lender may reasonably
require, when requested from time to time by Lender.
11. CONDEMNATION. If all the Property and Improvements are taken or
acquired in any condemnation proceeding or by exercise of the right of eminent
domain or, with Lender's consent, by any conveyance in lieu thereof, the amount
of any award or other payment for such taking, or conveyance or damages made in
consideration thereof, to the extent of the full amount of the then remaining
unpaid Indebtedness, is hereby assigned to Lender, and Lender is empowered to
collect and receive the same and to give proper receipts therefor in the name of
Borrower, and the same shall be paid forthwith to Lender. Such award or payment
so received by Lender shall be applied to the Indebtedness (whether or not then
due and payable).
In the event a portion of the Property Improvements are acquired in any
condemnation proceeding or by the exercise of the right of eminent domain, to
the extent that the damage to the
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Property or improvements is in the amount of $500,000.00 or less, and provided
there is no Event of Default, as hereinafter defined, the proceeds of any such
condemnation or eminent domain award shall be paid to Borrower, who shall use
such proceeds as provided for in paragraph 5 hereof with respect to the
disbursement of insurance proceeds where the damage or destruction is in an
amount of $500,000.00 or less. The provisions of paragraph 5 where there is
damage or destruction in an amount of $500,000.00 or less shall apply as if
fully rewritten.
In the event the damage to the Improvements or Property by virtue of
such condemnation proceeding or eminent domain proceeding is in an amount in
excess of $500,000.00, and provided there is no Event of Default, as hereinafter
defined, the proceeds of such eminent domain or condemnation award shall be
deposited in escrow with Lender as escrow agent for the purpose of repairing,
restoring, or reconstructing the Improvements and/or Property, and shall be
disbursed by Lender in accordance with the provisions of paragraph 5 hereof with
respect to the disbursement of insurance proceeds, where the damage or
destruction is in an amount of $500,000.00 or greater. The conditions to
disbursement, including the requirement that Lender be satisfied that the
repaired or restored Improvements would be equal in size, quality and value to
those which existed previously, and the right to cause the Property to be
reappraised, as provided for where there is damage or destruction of $500,000.00
or greater, shall be applicable as if fully rewritten.
Anything in this Section 11 to the contrary notwithstanding, if there
shall be an Event of Default, as hereinafter defined, the proceeds of such
eminent domain or condemnation award shall, at the sole option of Lender, be
applied by Lender to the Indebtedness in such order as Lender may determine.
12. BORROWER AND LIEN NOT RELEASED. From time to time, Lender may, at
Lender's option, without giving notice to or obtaining the consent of Borrower,
Borrower's successors or assigns or of any junior lienholder or guarantors,
without liability on Lender's part and notwithstanding Borrower's breach of any
covenant or agreement of Borrower in this Instrument, extend the time for
payment of said indebtedness or any part thereof, reduce the payments thereon,
release anyone liable on any of said indebtedness, accept a renewal note or
notes therefor, direct Trustee to release from the lien of this Instrument any
part of the Property, take or release other or additional security, reconvey any
part of the Property, consent to any map or plan of the Property, consent to the
granting of any easement, join in any extension or subordination agreement, or
agree in writing with Borrower to modify the rate of interest or period of
amortization of the Note or to change the amount of the monthly installments
payable thereunder. Any actions taken by Lender pursuant to the terms of this
paragraph shall not affect the obligation of Borrower or Borrower's successors
or assigns to pay the sums secured by this Instrument and to observe the
covenants of Borrower contained herein, shall not affect the guaranty of any
person, corporation, partnership or other entity for payment of the indebtedness
secured hereby, and shall not affect the lien or priority of lien hereof on the
Property. Borrower shall pay Lender a reasonable service charge, together with
such title insurance premiums and attorney's fees as may be incurred at Lender's
option for any such action if taken at Borrower's request.
13. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by Lender in
exercising any right or remedy hereunder, or otherwise afforded by applicable
law, shall not be a waiver of or preclude the exercise of any right or remedy.
The acceptance by Lender of payment of any sum secured by this Instrument after
the due date of such payment shall not be a waiver of Lender's right to either
require prompt payment when due of all other sums so secured or to declare a
default for failure to make prompt payment. The procurement of insurance or the
payment of taxes or other liens or charges by Lender shall not be a waiver of
Lender's right to accelerate the maturity of the indebtedness secured by this
Instrument. Lender's receipt of any awards, proceeds or damages under paragraphs
5 and 11 hereof shall not operate to cure or waive Borrower's default in payment
of sums secured by this Instrument.
14. ESTOPPEL CERTIFICATE. Borrower shall, within 10 days of a written
request from Lender, furnish Lender with a written statement, duly acknowledged,
setting forth the sums secured by this Instrument and any right of set-off,
counterclaim or other defense which exists against such sums and the obligations
of this Instrument.
15. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. In addition to being a
deed of trust and assignment of rents, this Instrument is intended to be a
security agreement pursuant to the Uniform Commercial Code for any of the items
specified above as part of the Property which under applicable law, may be
subject to a security interest pursuant to the Uniform Commercial Code, and
Borrower hereby grants Lender a security interest in said items. Borrower agrees
that Lender
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may file this Instrument, or a reproduction thereof, in the real estate records
or other appropriate index, as a financing statement for any of the items
specified above as part of the Property. Any reproduction of this Instrument or
of any other security agreement or financing statement shall be sufficient as a
financing statement. In addition, Borrower agrees to execute and deliver to
Lender, upon Lender's request, any financing statements, as well as extensions,
renewals and amendments thereof, and reproductions of this Instrument in such
form as Lender may require to perfect a security interest with respect to said
items. Borrower shall pay all costs of filing such financing statements and any
extensions, renewals, amendments and releases thereof. Without the prior written
consent of Lender, Borrower shall not create or suffer to be created pursuant to
the Uniform Commercial Code any other security interest in said items, including
replacements and additions thereto. Upon Borrower's breach of any covenant or
agreement of Borrower contained in this Instrument, including the covenants to
pay when due all sums secured by this Instrument, Lender shall have the remedies
of a secured party under the Uniform Commercial Code and, at Lender's option,
may also invoke the remedies provided in paragraph 25 of this Instrument as to
such items. In exercising any of said remedies, Lender may proceed against the
items of real property and any items of personal property specified above as
part of the Property separately or together and in any order whatsoever, without
in any way affecting the availability of Lender's remedies under the Uniform
Commercial Code or of the remedies provided in paragraph 25 of this Instrument.
16. LEASES OF THE PROPERTY. Borrower shall comply with and observe
Borrower's obligations as landlord under all leases of the Property or any part
thereof. Borrower shall furnish Lender with executed copies of all leases now
existing or hereafter made of all or any part of the Property.
Borrower shall, at Borrower's sole cost and expense, perform and
discharge all of the obligations and undertakings of the landlord under the
Leases and give prompt notice to Huntington of any failure to do so. Borrower
shall use all reasonable efforts to enforce or secure the performance of each
and every obligation and undertaking of the tenants under the Leases and shall
appear in and prosecute or defend any action or proceeding arising under, or in
any manner connected with, the Leases or the obligations and undertakings of the
tenants thereunder.
Borrower does hereby assign to Lender, as additional security, all
leases now existing or hereafter made of all or any part of the Property and, to
the extent permitted by applicable law, all security deposits made by tenants in
connection with such leases of the Property. Upon Borrower's default, Lender, at
Lender's option, shall have all of the rights and powers possessed by Borrower
prior to such assignment.
17. REMEDIES CUMULATIVE. Each remedy provided in this Instrument is
distinct and cumulative to all other rights or remedies under this Instrument or
afforded by law or equity, and may be exercised concurrently, independently, or
successively, in any order whatsoever.
18. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower shall
voluntarily file a petition under the Federal Bankruptcy Code, as such Code may
from time to time be amended, or under any similar or successor Federal Statute
relating to bankruptcy, insolvency, arrangements or reorganizations, or under
any state bankruptcy or insolvency act, or file an answer in an involuntary
proceeding admitting insolvency or failure to pay debts as they come due, or if
Borrower shall fail within 60 days to obtain a vacation, stay or dismissal of
involuntary proceedings brought for the reorganization, dissolution or
liquidation of Borrower, or if an order for relief under the Federal Bankruptcy
Code shall be entered against Borrower, or if a trustee, receiver or custodian
shall be appointed for Borrower or Borrower's property, or if the Property shall
become subject to the jurisdiction of a Federal bankruptcy court or similar
state court, or if Borrower shall make an assignment for the benefit of
Borrower's creditors, or if there is an attachment, execution or other judicial
seizure of any portion of Borrower's assets and such seizure is not discharged
within 60 days, then Lender may, at Lender's option, declare all of the sums
secured by this Instrument to be immediately due and payable without prior
notice to Borrower, and Lender may invoke any remedies permitted by paragraph 25
of this Instrument. Any attorney's fees and other expenses incurred by Lender in
connection with Borrower's bankruptcy or any of the other aforesaid events shall
be additional indebtedness of Borrower secured by this Instrument pursuant to
paragraph 8 hereof.
19. TRANSFERS OF THE PROPERTY OR BENEFICIAL INTERESTS IN BORROWER. On
sale, encumbrance. or transfer of (a) all or any part of the Property, or any
interest therein, or (b) beneficial interests in Borrower, Lender may, at
Lender's option, declare all of the sums
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secured by this Instrument to be immediately due and payable, and Lender may
invoke any remedies permitted by paragraph 25 of this Instrument. This option
shall not apply in case of:
(i) transfers by devise or descent or by operation of
law upon the death of a tenant in common or a partner;
(ii) the grant of a leasehold interest in a part of
the Property of three years or less (or such longer lease term as Lender may
permit by prior written approval) not containing an option to purchase (except
any interest in the ground lease, if this Instrument encumbers a leasehold); and
(iii) sales or transfers of fixtures or any personal
property pursuant to paragraph 6 hereof.
20. NOTICE. Any notice required or permitted to be given hereunder
shall be in writing. If mailed by first class United States mail, postage
prepaid, registered or certified with return receipt requested, then such shall
be effective upon its deposit in the mails. Notice given in any other manner
shall be effective only if and when received by the addressee. For purposes of
notice, the addresses of Borrower and Lender shall be as set forth below;
provided however, that either party shall have the right to change such party's
address for notice hereunder to any other location within the continental United
States by the giving of thirty (30) days' notice to the other party.
If to Borrower: Glimcher Properties Limited Partnership
20 South Third Street
Columbus, Ohio 43215
Attention: General Counsel
If to Lender: The Huntington National Bank
Commercial Real Estate Group
41 South High Street
Columbus, Ohio 43215
21. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; AGENTS;
CAPTIONS. The covenants and agreements herein contained shall bind, and the
rights hereunder shall inure to, the respective successors and assigns of Lender
and Borrower, subject to the provisions of paragraph 19 hereof. All covenants
and agreements of Borrower shall be joint and several. In exercising any rights
hereunder or taking any actions provided for herein, Lender may act through its
employees, agents or independent contractors as authorized by Lender. The
captions and headings of the paragraphs of this Instrument are for convenience
only and are not to be used to interpret or define the provisions hereof.
22. GOVERNING LAW; SEVERABILITY. This Instrument shall be governed by
the law of the jurisdiction in which the Property is located. In the event that
any provision of this Instrument or the Note conflicts with applicable law, such
conflict shall not affect other provisions of this Instrument or the Note which
can be given effect without the conflicting provisions, and to this end the
provisions of this Instrument and the Note are declared to be severable. In the
event that any applicable law limiting the amount of interest or other charge
permitted to be collected from Borrower is interpreted so that any charge
provided for in this Instrument or in the Note, whether considered separately or
together with other charges levied in connection with this Instrument and the
Note, violates such law, and Borrower is entitled to the benefit of such law,
such charge is hereby reduced to the extent necessary to eliminate such
violation. The amounts, if any, previously paid to Lender in excess of the
amounts payable to Lender pursuant to such charges as reduced shall be applied
by Lender to reduce the principal of the indebtedness evidenced by the Note. For
the purpose of determining whether any applicable law limiting the amount of
interest or other charges permitted to be collected from Borrower has been
violated, all indebtedness which is secured by this Instrument or evidenced by
the Note and which constitutes interest, as well as all other charges levied in
connection with such indebtedness which constitute interest, shall be deemed to
be uniformly allocated and spread over the stated term of the Note.
23. WAIVER OF STATUTE OF LIMITATIONS; WAIVER OF APPRAISAL. To the
extent permitted by applicable law, Borrower hereby waives the right to assert
any statute of limitations
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as a bar to the enforcement of the lien of this Instrument or to any action
brought to enforce the Note or any other obligation secured by this Instrument.
To the extent permitted by applicable law, Borrower hereby waives any
right of appraisal of the Property. In the event of foreclosure pursuant to
paragraph 25 hereof, Lender may, at Lender's option, obtain an appraisal of the
Property, and any funds expended by Lender for such purpose shall become
indebtedness of Borrower to Lender secured by this Instrument.
24. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the Property held by Lender or by any other party, Lender
shall have the right to determine the order in which any or all of the Property
shall be subjected to the remedies provided herein. Lender shall have the right
to determine the order in which any or all portions of the indebtedness secured
hereby are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Borrower, any party who consents to this Instrument,
and any party who now or hereafter acquires a security interest in the Property
and who has actual or constructive notice hereof hereby waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or provided herein, to the extent
permitted by applicable law.
25. ACCELERATION; REMEDIES. Upon Borrower's breach of any covenant or
agreement of Borrower in the Note or this Instrument, including, but not limited
to, the covenants to pay when due, after the expiration of any applicable grace
period, any sums secured by this Instrument, Lender, at Lender's option, may
declare all of the sums secured by this Instrument to be immediately due and
payable without further demand and may invoke the power of sale and any other
remedies permitted by applicable law or as provided herein. Borrower
acknowledges that the power of sale herein granted may be invoked by Lender and
exercised by Trustee without prior judicial hearing. Borrower has the right to
bring an action to assert the non-existence of a breach or any other defense of
Borrower to acceleration and sale. Lender shall be entitled to collect all costs
and expenses incurred in pursuing such remedies, including, but not limited to
attorneys fees, costs of documentary evidence, abstracts and title reports.
Reference in this paragraph 25 and in other paragraphs of this Instrument to
"breach" or "default" shall mean the continuance of such event or circumstance
beyond any applicable grace period or notice and cure period provided in this
Instrument or in the Note.
If Lender invokes the power of sale, Lender or Trustee shall give to
Borrower a copy of a notice of sale in the manner prescribed by applicable law.
Trustee shall give public notice of sale in the manner prescribed by applicable
law and shall sell the Property in accordance with the laws of Virginia.
Trustee, without demand on Borrower, shall sell the Property at public auction
to the highest bidder at the time and place and under the terms designated in
the notice of sale in one or more parcels and in such order as Trustee may
determine. Trustee may postpone sale of all or any parcel of the Property by
public announcement at the time and place of any previously scheduled sale or by
advertising in accordance with applicable law. Lender or Lender's designee may
purchase the Property at any sale.
Trustee shall deliver to the purchaser Trustee's deed conveying the
Property so sold with special warranty of title. The recitals in Trustee's deed
shall be prima facie evidence of the truth of the statements made therein.
Trustee shall apply the proceeds of the sale in accordance with the provisions
of Section 55-59.4 of the Code of Virginia, as amended and effective on the date
hereof. Trustee shall not be required to provide possession of the Property to
the purchaser at such sale.
26. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.
As part of the consideration for the indebtedness evidenced by the Note,
Borrower hereby absolutely and unconditionally assigns and transfers to Lender
all the rents and revenues of the Property, including those now due, past due,
or to become due by virtue of any lease, license or other agreement for the
occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable. Borrower hereby authorizes
Lender or Lender's agents to collect the aforesaid rents and revenues and hereby
directs each tenant of the Property to pay such rents to Lender or Lender's
agents; provided, however, that prior to written notice given by Lender to
Borrower of the breach by Borrower of any covenant or agreement of Borrower in
this Instrument, Borrower shall collect and receive all rents and revenues of
the Property as trustee for the benefit of Lender and Borrower, to apply the
rents and revenues so collected to the sums secured by this Instrument in the
order provided in paragraph 3 hereof with the balance, so long as no such breach
has occurred, to the account of Borrower, it being intended by Borrower and
Lender that this assignment of rents constitutes an absolute assignment and not
an assignment for additional security only. Upon delivery of written notice by
Lender to Borrower of the breach by Borrower of any covenant or
10
<PAGE> 11
agreement of Borrower in this Instrument, and without the necessity of Lender
entering upon and taking and maintaining full control of the Property in person,
by agent or by a court-appointed receiver, Lender shall immediately be entitled
to possession of all rents and revenues of the Property as specified in this
paragraph as the same become due and payable, including but not limited to rents
then due and unpaid, and all such rents shall immediately upon delivery of such
notice be held by Borrower as trustee for the benefit of Lender only; provided,
however, that the written notice by Lender to Borrower of the breach by Borrower
shall contain a statement that Lender exercises its rights to such rents.
Borrower agrees that commencing upon delivery of such written notice of
Borrower's breach by Lender to Borrower, each tenant of the Property shall make
such rents payable to and pay such rents to Lender or Lender's agents on
Lender's written demand to each tenant therefor, delivered to each tenant
personally, by mail or delivering such demand to each rental unit, without any
liability on the part of said tenant to inquire further as to the existence of a
default by Borrower.
Borrower hereby covenants that Borrower has not executed any prior
assignment of said rents, that Borrower has not performed, and will not perform,
any acts and has not executed, and will not execute, any instrument which would
prevent Lender from exercising its rights under this paragraph, and that at the
time of execution of this Instrument there has been no anticipation or
prepayment of any of the rents of the Property for more than 1 month prior to
the due dates of such rents. Borrower covenants that Borrower will not hereafter
collect or accept payment of any rents of the Property more than 1 month prior
to the due dates of such rents. Borrower further covenants that Borrower will
execute and deliver to Lender such further assignments of rents and revenues of
the Property as Lender may from time to time request.
Upon Borrower's breach of any covenant or agreement of Borrower in this
Instrument, Lender may in person, by agent or by a court-appointed receiver,
regardless of the adequacy of Lender's security, enter upon and take and
maintain full control of the Property in order to perform all acts necessary and
appropriate for the operation and maintenance thereof including, but not limited
to, the execution, cancellation or modification of leases, the collection of all
rents and revenues of the Property, the making of repairs to the Property and
the execution or termination of contracts providing for the management or
maintenance of the Property, all on such terms as are deemed best to protect the
security of this Instrument. In the event Lender elects to seek the appointment
of a receiver for the Property upon Borrower's breach of any covenant or
agreement of Borrower in this Instrument, Borrower hereby expressly consents to
the appointment of such receiver. Lender or the receiver shall be entitled to
receive a reasonable fee for so managing the Property.
All rents and revenues collected subsequent to delivery of written
notice by Lender to Borrower of the breach by Borrower of any covenant or
agreement of Borrower in this Instrument shall be applied first to the costs, if
any, of taking control of and managing the Property and collecting the rents,
including, but not limited to, attorney's fees, receiver's fees, premiums on
receiver's bonds, costs of repairs to the Property, premiums on insurance
policies, taxes, assessments and other charges on the Property, and the costs of
discharging any obligation or liability of Borrower as lessor or landlord of the
Property and then to the sums secured by this Instrument. Lender or the receiver
shall have access to the books and records used in the operation and maintenance
of the Property and shall be liable to account only for those rents actually
received. Lender shall not be liable to Borrower, anyone claiming under or
through Borrower or anyone having an interest in the Property by reason of
anything done or left undone by Lender under this paragraph.
If the rents of the Property are not sufficient to meet the costs, if
any, of taking control of and managing the Property and collecting the rents,
any funds expended by Lender for such purposes shall become indebtedness of
Borrower to Lender secured by this Instrument pursuant to paragraph 8 hereof.
Unless Lender and Borrower agree in writing to other terms of payment, such
amounts shall be payable upon notice from Lender to Borrower requesting payment
thereof and shall bear interest from the date of disbursement at the rate stated
in the Note.
Any entering upon and taking and maintaining of control of the Property
by Lender or the receiver and any application of rents as provided herein shall
not cure or waive any default hereunder or invalidate any other right or remedy
of Lender under applicable law or as provided herein. This assignment of rents
shall terminate at such time as this Instrument ceases to secure indebtedness
held by Lender.
11
<PAGE> 12
27. HAZARDOUS SUBSTANCES.
(a) Borrower hereby covenants and agrees with Lender that the
following terms shall have the following meanings:
(i) "Environmental Laws" means all federal, state and
local laws, statutes, ordinances, and codes relating to the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of any Hazardous Substance and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives with respect
thereto.
(ii) "Hazardous Substance" means, without limitation,
any flammable explosives, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, petroleum and petroleum based
products, methane, hazardous materials, hazardous wastes, hazardous or toxic
Substances or related materials, as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801, et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901, et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. Sections 2601, et seq.), or any other applicable
Environmental Law.
(iii) "Indemnitee" means Lender, its participants in
the loan, and all subsequent holders of this Instrument, their respective
successors and assigns, their respective officers, directors, employees, agents,
representatives, contractors and subcontractors and any subsequent owner of the
Property who acquires title thereto from or through Lender.
(iv) "Release" has the same meaning as given to that
term in the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Sections 9601, et seq.), and the regulations
promulgated thereunder.
(b) Borrower represents and warrants to Lender that, to its
knowledge after due investigation except as may be set forth in the
environmental report for the Property delivered to Lender in connection
herewith: (i) the Property is not being and has not been used for the storage,
treatment, generation, transportation, processing, handling, production or
disposal of any Hazardous Substance in violation of any Environmental Laws; (ii)
the Property does not contain any Hazardous Substance in violation of any
Environmental Laws; (iii) there has been no Release of any Hazardous Substance
on, at or from the Property or any property adjacent to or within the immediate
vicinity of the Property, and Borrower has not received any form of notice or
inquiry with regard to such a Release or the threat of such a Release; (iv) no
event has occurred with respect to the Property which, with the passage of time
or the giving of notice, or both, would constitute a violation of any applicable
Environmental Law; (v) there are no agreements or orders or directives of any
federal, state or local governmental agency or authority relating to the
Property which require any work, repair, construction, containment, clean up,
investigations, studies, removal or other remedial action with respect to the
Property and (vi) there are no actions, suits, claims or proceedings, pending or
threatened, which seek any remedy that arise out of the condition, ownership,
use, operation, sale, transfer or conveyance of the Property and (a) a violation
or alleged violation of any applicable Environmental Law, (b) the presence of
any Hazardous Substance or a Release of any Hazardous Substance or the threat of
such a Release, or (c) human exposure to any Hazardous Substance.
(c) Borrower covenants and agrees with Lender as follows:
(i) Borrower shall keep, and shall use reasonable
efforts to cause all operators, tenants, sub-tenants, licensees, and occupants
of the Property to keep, the Property free of all Hazardous Substances, except
for Hazardous Substances stored, treated, generated, transported, processed,
handled, produced or disposed of in the normal operation of the Property as a
shopping center in accordance with all Environmental Laws.
(ii) Borrower shall comply with, and shall use
reasonable efforts to cause all operators, tenants, sub-tenants, licensees, and
occupants of the Property to comply with, all Environmental Laws.
(iii) Borrower shall promptly provide Lender with a
copy of all notifications which it gives or receives with respect to any past or
present Release of any Hazardous Substance or the threat of such a Release on,
at or from the Property or any property adjacent to or within the immediate
vicinity of the Property.
12
<PAGE> 13
(iv) Borrower shall undertake and complete all
investigations, studies, sampling and testing for Hazardous Substances
reasonably required by Lender and, in accordance with all Environmental Laws,
all removal and other remedial actions necessary to contain, remove, and clean
up all Hazardous Substances that are determined to be present at the Property in
violation of any Environmental Law.
(v) Lender shall have the right, but not the
obligation, to cure any violation by Borrower of the Environmental Laws and
Lender's cost and expense to so cure shall be secured by this Instrument.
(d) Borrower covenants and agrees, at its sole cost and
expense, to indemnify, defend and save harmless Indemnitee from and against any
and all damages, losses, liabilities, obligations, penalties, claims,
litigation, demands, defenses, judgments, suits, actions, proceedings, costs,
disbursements and/or expenses (including, without limitation, reasonable
attorneys' and experts' fees and expenses) of any kind or nature whatsoever
which may at any time be imposed upon, incurred by or asserted or awarded
against Indemnitee arising out of the condition, ownership, use, operation,
sale, transfer or conveyance of the Property and (i) the storage, treatment,
generation, transportation, processing, handling, production or disposal of any
Hazardous Substance, (ii) the presence of any Hazardous Substance or a Release
of any Hazardous Substance or the threat of such a Release, (iii) human exposure
to any Hazardous Substance, (iv) a violation of any Environmental Law, or (v) a
material misrepresentation or inaccuracy in any representation or warranty or
material breach of or failure to perform any covenant made by Borrower herein
(collectively the "Indemnified Matters").
The liability of Borrower to Indemnitee hereunder shall in no way be
limited, abridged, impaired or otherwise affected by (a) the repayment of all
sums and the satisfaction of all obligations of Borrower under the Note, this
Instrument, or any other instrument evidencing or securing the Note (herein
collectively the "Loan Documents"), (b) the foreclosure of this Instrument or
the acceptance of a deed in lieu thereof, (c) any amendment or modification of
the Loan Documents by or for the benefit of Borrower or any subsequent owner of
the Property, (d) any extensions of time for payment or performance required by
any of the Loan Documents, (e) the release or discharge of this Instrument or of
Borrower, any guarantor of the loan, or any other person from the performance or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents whether by Lender, by operation of law, or otherwise,
(f) the invalidity or unenforceability of any of the terms or provisions of the
Loan Documents, (g) any applicable statute of limitations, (h) the sale or
assignment of the Note or this Instrument, (i) the sale, transfer, or conveyance
of all or part of the Property, (j) the dissolution or liquidation of Borrower,
(k) the release or discharge, in whole or in part, of Borrower in any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or similar proceeding, or (l) any other circumstances which might
otherwise constitute a legal or equitable release or discharge, in whole or in
part, of Borrower under the Note or this Instrument.
The foregoing indemnity shall be in addition to any and all other
obligations and liabilities Borrower may have to Lender at common law.
28. RELEASE. Upon payment of all sums secured by this Instrument,
Lender shall request Trustee to release this Instrument and shall surrender all
notes evidencing indebtedness secured by this Instrument to Trustee. Trustee
shall release this Instrument. Borrower shall pay Trustee's reasonable costs
incurred in releasing this Instrument.
29. SUBSTITUTE TRUSTEE. Lender may from time to time in Lender's
discretion, for any reason whatsoever, remove Trustee and appoint a successor
trustee to any Trustee appointed hereunder in the manner provided by Section
55-59 of the Code of Virginia, as amended and effective on the date hereof.
Without conveyance of the Property, the successor trustee shall succeed to all
the title, power and duties conferred upon the Trustee herein and by applicable
law.
30. IDENTIFICATION OF NOTE. The Note is identified by a certificate on
the Note executed by any Notary Public who certifies an acknowledgement hereto.
31. PRIORITY OF LIEN. This Instrument shall remain in full force and
effect notwithstanding any extension or extensions of the maturity date or other
reamortization of the obligations which this Instrument secures and
notwithstanding the fact that such extensions and reamortizations may be
evidenced by a note or notes signed and dated after the date of this Instrument.
13
<PAGE> 14
IN WITNESS WHEREOF, Borrower has caused this Instrument to be executed
by its duly authorized representative.
GLIMCHER PROPERTIES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Glimcher Properties Corporation, a Delaware
Corporation, its Sole General Partner
By: /s/ George A. Schmidt
------------------------------------------
Its: Senior Vice President
------------------------------------------
STATE OF OHIO,
COUNTY OF FRANKLIN, SS:
On this 13th day of October, 1998, before me, a Notary Public in and
for said County and State, personally appeared, George A. Schmidt who
acknowledged himself to be the Senior Vice President of Glimcher Properties
Corporation, a Delaware corporation, the corporation named in the foregoing
instrument as the sole General Partner of GLIMCHER PROPERTIES LIMITED
PARTNERSHIP, the limited partnership which executed the foregoing instrument,
and who acknowledged to me that he, as such Senior Vice President of said
corporation, being duly authorized by the Board of Directors of said
corporation, did execute the foregoing instrument for and on behalf of said
corporation and limited partnership and that such signing is the free act and
deed of said corporation and limited partnership for the uses and purposes
therein mentioned.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/ Robert C. Kiger
--------------------------------------
[AFFIX NOTARIAL SEAL] Notary Public
My Commission Expires:
----------------
<PAGE> 1
Exhibit 10.81
AFTER RECORDING MAIL TO:
Porter, Wright, Morris & Arthur
41 S. High Street, 31st Floor
Columbus, Ohio 43215
Attention: Robert C. Kiger, Esq.
________________SPACE ABOVE THIS LINE FOR RECORDER'S USE_______________________
LONG-FORM DEED OF TRUST,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
THIS LONG-FORM DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY
AGREEMENT (herein "Instrument") is made this 13th day of October, 1998, between
the Trustor, WEBERSTOWN MALL, LLC, a Delaware limited liability company, whose
address is 20 South Third Street, Columbus, Ohio 43215 (herein "Borrower"),
CHICAGO TITLE INSURANCE COMPANY, 4612 McGraw Street, Stockton, California 95207,
(herein "Trustee") and the Beneficiary, THE HUNTINGTON NATIONAL BANK, a national
banking association organized and existing under the laws of The United States,
whose address is 41 South High Street, Columbus, Ohio 43215, (herein "Lender").
WHEREAS, Borrower is indebted to Lender in the principal sum of
Fourteen Million and 00/100 Dollars ($14,000,000.00), which indebtedness is
evidenced by a certain note of even date herewith, executed by Borrower,
Glimcher Properties Limited Partnership and Glimcher Development Corporation.
The $14,000,000.00 indebtedness referenced above together with all sums due or
to become due as above provided are herein referred to collectively as the
"Loan". All notes, guaranties and other documents evidencing, securing or
relating to the Loan, together with all renewals thereof, substitutions
therefor, and extensions and modifications thereto are herein referred to
collectively as the "Note"; and
WHEREAS, all real and personal property collateral securing repayment
of the Loan shall be directed to and held by, in the State of California,
Trustee, for the benefit of Lender.
NOW, THEREFORE, IN ORDER TO SECURE TO LENDER (a) the repayment of the
Loan, with interest thereon, and all renewals, extensions, modifications and
revolving re-advances thereof; (b) the payment of all other sums with interest
thereon advanced and re-advanced in accordance herewith to protect the security
of this Instrument; and (c) the performance of the covenants and agreements of
Borrower herein contained, Borrower does hereby grant, convey and assign to
Trustee in trust with power of sale the following described property:
See Exhibit A attached hereto and
incorporated herein by reference.
TOGETHER WITH the following, whether now owned or hereafter acquired by
Borrower: (a) all improvements now or hereafter attached to or placed, erected,
constructed or developed on the property (collectively the "Improvements"); (b)
all fixtures, furnishings, equipment, inventory, and other articles of personal
property (collectively the "Personal Property") that are now or hereafter
attached to or used in or about the Improvements or that are necessary or useful
for the complete and comfortable use and occupancy of the Improvements for the
purposes for which they were or are to be attached, placed, erected, constructed
or developed or that may be used in or related to the planning, development,
financing or operation of the Improvements, and all renewals of or replacements
or substitutions for any of the foregoing, whether or not the same are or shall
be attached to the Improvements or the property; (c) all water and water rights,
timber, crops, and mineral interests pertaining to the property; (d) all
building materials and equipment now or hereafter delivered to and intended to
be installed in or on the Improvements or the property; (e) all plans and
specifications for the Improvements; (f) all contracts relating to the property,
the Improvements or the Personal Property; (g) all deposits (including, without
limitation, tenants' security deposits), bank accounts, funds, documents,
contract rights, accounts, commitments, construction agreements, architectural
agreements,
<PAGE> 2
general intangibles (including, without limitation, trademarks, trade names and
symbols), instruments, notes and chattel paper arising from or by virtue of any
transactions related to the property, the Improvements or the Personal Property;
(h) all permits, licenses, franchises, certificates, and other rights and
privileges obtained in connection with the property, the Improvements or the
Personal Property; (i) all proceeds arising from or by virtue of the sale, lease
or other disposition of the property, the Improvements, the Personal Property or
any portion thereof or interest therein; (j) all proceeds (including, without
limitation, premium refunds) of each policy of insurance relating to the
property, the Improvements or the Personal Property; (k) all proceeds from the
taking of any of the property, the Improvements, the Personal Property or any
rights appurtenant thereto by right of eminent domain or by private or other
purchase in lieu thereof (including, without limitation, change of grade of
streets, curb cuts or other rights of access), for any public or quasi-public
use under any law; (l) all right, title and interest of Borrower in and to all
streets, roads, public places, easements and rights-of-way, existing or
proposed, public or private, adjacent to or used in connection with, belonging
or pertaining to the property; (m) all of the leases, licenses, occupancy
agreements, rents (including without limitation, room rents), royalties,
bonuses, issues, profits, revenues or other benefits of the property, the
Improvements or the Personal Property, including, without limitation, cash or
securities deposited pursuant to leases to secure performance by the lessees of
their obligations thereunder; (n) all rights, hereditaments and appurtenances
pertaining to the foregoing; and (o) other interests of every kind and character
that Borrower now has or at any time hereafter acquires in and to the property,
Improvements, and Personal Property described herein and all property that is
used or useful in connection therewith, including rights of ingress and egress
and all reversionary rights or interests of Borrower with respect thereto (all
of the same, including the property, collectively the "Property").
Borrower covenants that Borrower is lawfully seized of the estate
hereby conveyed and has the right to mortgage, grant, convey and assign the
Property, that the Property is unencumbered except for the lien of a certain
Deed of Trust dated October 13, 1994 in favor of Aid Association for Lutherans,
as beneficiary, recorded as Instrument No. 94115527 in Official Records of San
Joaquin County, California, as amended by Amendment to Deed of Trust dated
August 6, 1996 and recorded as Instrument No. 96081976 in the Official Records
of San Joaquin County, California (the "First Deed of Trust") the lien of this
Instrument and the lien of real estate taxes and assessments not yet due, and
that Borrower will warrant and defend generally the title the Property against
all claims and demands, except for those items approved by Lender for inclusion
in the title insurance policy to be issued.
Borrower and Lender covenant and agree as follows:
1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly pay when
due the principal of and interest on the indebtedness evidenced by the Note, any
prepayment and late charges provided in the Note, and all other sums secured by
this Instrument.
2. TAXES AND OTHER IMPOSITIONS. Borrower shall promptly pay before
delinquency all taxes, assessments, charges, fines or impositions, general,
local or special (collectively the "Impositions"), levied upon the Property, or
any part thereof, or upon Lender's interest therein, or upon the Property or the
Indebtedness, by any duly or legally constituted public authority, municipality,
township, county or state or the United States, and upon request, will provide
evidence of the payment thereof to Lender; provided that Borrower, at Borrower's
own cost and expense may, if it shall in good faith so desire, contest the
validity or amount of any Impositions, in which event Borrower may defer the
payment thereof for such period as such contest shall be actively prosecuted and
shall be pending undetermined; further provided, however, that Borrower shall
not allow any such Impositions so contested to remain unpaid for such length of
time as shall permit all or any portion of the Property, or the lien thereon
created by such item, to be sold by federal, state, county or municipal
authority for the nonpayment thereof. Pending any such contest, Borrower shall
maintain adequate book reserves with respect to such Impositions being
contested.
In the event that one or more of the Impositions on Lender's interest
in the Property, the Deed of Trust or the Indebtedness cannot be lawfully paid
by Borrower, then Borrower shall repay the Indebtedness in full without penalty
within sixty (60) days after demand therefor by Lender.
2
<PAGE> 3
Upon default in payment of any of the following described items, or
upon the occurrence of any other event of default under this Instrument or under
the Note, Lender shall have the right, at its option, and if Lender does not
elect to accelerate the indebtedness secured hereby and to pursue its other
remedies, to require Borrower to pay to Lender on the day monthly installments
of principal or interest are payable under the Note (or on another day
designated in writing by Lender), until the Note is paid in full, a sum (herein
"Funds") equal to one-twelfth of (a) the yearly water and sewer rates and taxes
and assessments which may be levied on the Property; (b) the yearly ground
rents, if any; (c) the yearly premium installments for fire and other hazard
insurance, rent loss insurance and such other insurance covering the Property as
Lender may require pursuant to paragraph 5 hereof; and (d) such other Funds for
other taxes, charges, premiums, assessments and impositions in connection with
Borrower or the Property which Lender shall reasonably deem necessary to protect
Lender's interests (herein "Other Impositions"); all as reasonably estimated
initially and from time to time by Lender.
The Funds shall be held and applied by Lender to pay said rates, rents,
taxes, assessments, insurance premiums and Other Impositions so long as Borrower
is not in breach of any covenant or agreement of Borrower in this Instrument.
Lender shall make no charge for so holding and applying the Funds, analyzing
said account or for verifying and compiling said assessments and bills, unless
Lender is required under applicable law to pay Borrower interest, earnings or
profits on the Funds and applicable law permits Lender to make such a charge.
Unless applicable law requires interest, earnings or profits to be paid, Lender
shall not be required to pay Borrower any interest, earnings or profits on the
Funds. Lender shall give to Borrower, without charge, an annual accounting of
the Funds in Lender's normal format showing credits and debits to the Funds and
the purpose for which each debit to the Funds was made. The Funds are pledged as
additional security for the sums secured by this Instrument and shall be subject
to the right of set off.
If the amount of the Funds held by Lender at the time of the annual
accounting thereof shall exceed the amount deemed necessary by Lender to provide
for the payment of water and sewer rates, taxes, assessments, insurance
premiums, rents and Other Impositions, as they fall due, such excess shall be
credited to Borrower on the next monthly installment or installments of Funds
due. If at any time the amount of the Funds held by Lender shall be less than
the amount deemed necessary by Lender to pay water and sewer rates, taxes,
assessments, insurance premiums, rents and Other Impositions, as they fall due,
Borrower shall pay to Lender any amount necessary to make up the deficiency
immediately after notice from Lender to Borrower requesting payment thereof.
Upon Borrower's breach of any covenant or agreement of Borrower in this
Instrument, Lender may apply, in any amount and in any order as Lender shall
determine in Lender's sole discretion, any Funds held by Lender at the time of
application (a) to pay rates, rents, taxes, assessments, insurance premiums and
Other Impositions which are now or will hereafter become due, or (b) as a credit
against sums secured by this Instrument. Upon payment in full of all sums
secured by this Instrument, Lender shall promptly refund to Borrower any Funds
held by Lender.
3. APPLICATION OF PAYMENTS. Unless applicable law provides otherwise,
all payments received by Lender from Borrower under the Note or this Instrument
shall be applied by Lender in the order provided in the following order of
priority: (a) amounts payable to Lender by Borrower under paragraph 2 hereof;
(b) interest payable on the Note; (c) principal payable on the Note; (d)
interest payable on advances made pursuant to paragraph 8 hereof; (e) principal
of advances made pursuant to paragraph 8 hereof; and (f) any other sums secured
by this Instrument in such order as Lender, at Lender's option, may determine;
provided, however, that Lender may, at Lender's option, apply any sums payable
pursuant to paragraph 8 hereof prior to interest on and principal of the Note,
but such application shall not otherwise affect the order of priority of
application specified in this paragraph 3.
4. CHARGES; LIENS. Except for the First Deed of Trust, which Borrower
shall pay according to its terms, Borrower shall promptly discharge any lien
which has, or may have, priority over or equality with, the lien of this
Instrument, and Borrower shall pay, when due, the claims of all persons
supplying labor or materials to or in connection with the Property. Without
Lender's prior written permission, Borrower shall not allow any lien,
encumbrance, or other interest in the Property inferior to the lien of this
Instrument to be perfected against the Property.
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5. INSURANCE AND INDEMNIFICATION. Borrower shall provide, maintain and
keep in force at all times the following policies of insurance:
(a) Insurance against loss or damage to the Improvements and
the Personal Property caused by fire and any of the risks covered by insurance
of the type now known as "coverage against all risks of physical loss", in an
amount equal to one hundred percent (100%) of the replacement cost of the
Improvements and the Personal Property and sufficient to prevent Borrower and
Lender from becoming co-insurers, and otherwise with terms and conditions
acceptable to Lender;
(b) Comprehensive broad form general liability insurance,
insuring against any and all claims for personal injury, death or property
damage occurring on, in or about the Property, the Improvements and the
adjoining streets, sidewalks and passageways, subject to a combined single limit
of not less than Two Million Dollars ($2,000,000.00) for personal injury, death
or property damage arising out of any one accident and a general aggregate limit
of not less than Five Million Dollars ($5,000,000.00), and otherwise with terms
and conditions acceptable to Lender;
(c) Worker's compensation insurance (including employer's
liability insurance, if available and requested by Lender) for all employees of
Borrower engaged on or with respect to the Property and the Improvements in the
limits established by law or, if limits are not so established, in such amounts
as are acceptable to Lender;
(d) During the course of any development or construction of
the Improvements, builder's completed value risk insurance against "all risks of
physical loss", including collapse and transit coverage, in the amounts set
forth in Subsection 5(a) above, and otherwise with terms and conditions
acceptable to Lender;
(e) Upon obtaining a certificate of occupancy for the
Improvements or any portion thereof, business interruption insurance and/or loss
of "rental value" insurance in an amount not less than the appraised rentals for
the Property for a minimum of twelve (12) months, and otherwise with terms and
conditions acceptable to Lender;
(f) If the Improvements are located in a federally-designated
flood hazard area, then flood hazard coverage, in the maximum amount available
and otherwise with terms and conditions acceptable to Lender; and
(g) Such other insurance coverage, and in such amount, as may
from time to time be required by Lender against the same or other hazards.
All such policies shall be in a form acceptable to Lender. Each policy
of casualty insurance shall contain a mortgagee clause, substantially in the
form of the standard California BFU-438 loss payable endorsement or otherwise
acceptable to Lender, showing Lender as mortgagee. Each policy of liability
insurance shall show Lender as an additional insured. Unless the policy so
provides, each policy of insurance required by the terms of the Deed of Trust
shall contain an endorsement by the insurer, for the benefit of Lender, (i) that
any loss shall be payable in accordance with the terms of such policy
notwithstanding any act or negligence of Borrower which might otherwise result
in forfeiture of said insurance, (ii) that any rights of set-off, counterclaim
or deductions against Borrower are waived and (iii) that such policy shall not
be canceled or changed except upon not less than thirty (30) days prior written
notice delivered to Lender.
All such insurance policies and renewals thereof shall be written by
companies with a Best's Insurance Reports policy holders rating of A+ and a
financial size category of Class XV or be expressly approved by Lender in
writing.
Lender shall have the right to hold the policies, or certificates
thereof acceptable to Lender with certified copies of the policies, and Borrower
shall promptly furnish to Lender all renewal notices and all receipts of paid
premiums. At least thirty (30) days prior to the expiration date of any such
policy, Borrower shall deliver to Lender a renewal policy, or certificate
thereof, in form acceptable to Lender.
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If Lender is made a party defendant to any litigation concerning the
Loan Documents or the Property or any part thereof or interest therein or the
occupancy thereof by Borrower, then Borrower shall indemnify, defend and hold
Lender harmless from all liability by reason of said litigation, including
reasonable attorneys' fees and expenses incurred by Lender in any such
litigation, whether or not any such litigation is prosecuted to judgment.
Borrower waives any and all right to claim or recover against Lender, its
officers, employees, agents and representatives, for loss of or damage to
Borrower, the Property, other property of Borrower or the property of others
under control of Borrower from any cause insured against or required to be
insured against by the provisions of the Deed of Trust.
Borrower shall not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section unless Lender has approved the insurance company and the form and
content of the insurance policy, including, without limitation, the naming
thereon of Lender as a named insured with loss payable to Lender under a
standard mortgage clause of the character above described. Borrower shall
immediately notify Lender whenever any such separate insurance is taken out and
shall promptly deliver to Lender copies of the policies and certificates
evidencing such insurance.
Nothing contained in this Section 5 shall prevent Borrower from keeping
the Improvements and Personal Property insured or causing the same to be insured
against the risks referred to in this Section 5 under a policy or policies of
blanket insurance which may cover other property not subject to the lien of the
Deed of Trust; provided, however, that any such policy of blanket insurance (i)
shall specify therein the amount of the total insurance allocated to the
Improvements and Personal Property, which amount shall be not less than the
amount otherwise required to be carried under the Deed of Trust; (ii) shall not
contain any clause which would result in the insured thereunder becoming a
co-insurer of any loss with the insurer under such policy; and (iii) shall in
all other respects comply with the provisions of the Deed of Trust.
Subject to the rights of the holder of the First Deed of Trust, in the
event the damage or destruction to the Improvements is in an amount of
$500,000.00 or less, and provided there is no Event of Default, as hereinafter
defined, the insurance proceeds shall be paid to Borrower, and used by Borrower
to (i) repair or restore the Improvements to the same condition in which they
were prior to the Casualty, or (ii) for its own purposes, after first making
such repairs to the remaining Improvements so that the same may continue as a
first class shopping center, both architecturally and aesthetically. Borrower
may elect option (ii) above only if it first provides to Lender evidence
satisfactory to Lender that there will be no material decrease in the fair
market value of the Property.
Subject to the rights of the holder of the First Deed of Trust, in the
event the damage or destruction to the Improvements is in an amount in excess of
$500,000.00, and provided there is no Event of Default, as hereinafter defined,
the insurance proceeds are to be applied toward the restoration of the
Improvements. Such sums shall be deposited in escrow with Lender as escrow agent
for the purpose of repairing, restoring or reconstructing the Improvements. Such
proceeds shall be disbursed by Lender as work progresses, provided that prior to
any disbursement, Lender is in receipt of proof reasonably satisfactory to it
that: (i) the work has been completed, (ii) there are no outstanding mechanics
liens or materialmen's liens, and (iii) that all charges, costs and expenses
incurred with respect to work completed have been paid in full or will be paid
in full with such proceeds. Prior to the release of any proceeds, Lender must be
satisfied that repair, restoration or reconstruction of the damaged or destroyed
Improvements will be substantially equal in size, quality and value to the
Improvements then presently erected on the Property as existed immediately prior
to the loss and the plans and specifications therefor must be approved by
Lender. In the event Lender believes it is necessary in order to establish
value, Lender may, at its option, cause the Property to be reappraised at
Borrower's expense. All insurance proceeds shall be payable to Lender. The
adjustment of such insurance proceeds with the carrier must be approved by
Lender.
Subject to the rights of the holder of the First Deed of Trust,
anything in this Section 5 to the contrary notwithstanding, if there shall be an
Event of Default, as hereinafter defined, the insurance proceeds shall, at the
sole option of Lender, be applied by Lender to the Indebtedness in such order as
Lender may determine.
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6. PRESERVATION AND MAINTENANCE OF PROPERTY; LEASEHOLDS. Borrower (a)
shall not commit waste or permit impairment or deterioration of the Property,
(b) shall not abandon the Property, (c) shall restore or repair promptly and in
a good and workmanlike manner all or any part of the Property to the equivalent
of its original condition, or such other condition as Lender may approve in
writing, in the event of any damage, injury or loss thereto, whether or not
insurance proceeds are sufficient to cover in whole or in part the costs of such
restoration or repair, (d) shall keep the Property, including improvements,
fixtures, equipment, machinery and appliances thereon in good repair and shall
replace fixtures, equipment, machinery and appliances on the Property when
necessary to keep such items in good repair, (e) shall comply with all laws,
ordinances, regulations and requirements of any governmental body applicable to
the Property, (f) shall operate the Property as a shopping center, and (g) shall
give notice in writing to Lender of and, unless otherwise directed in writing by
Lender, appear in and defend any action or proceeding purporting to affect the
Property, the security of this Instrument or the rights or powers of Lender or
Trustee. Neither Borrower nor any tenant or other person shall remove, demolish
or alter any improvement now existing or hereafter erected on the Property or
any fixture, equipment, machinery or appliance in or on the Property except when
incident to the replacement of fixtures, equipment, machinery and appliances
with items of like kind.
Borrower shall keep and perform all of the terms and provisions of the
First Deed of Trust; shall promptly pay all sums secured thereby when due and
shall make no further borrowings on the security thereof without the prior
written consent of Lender, which consent Lender may withhold in its sole
discretion. In the event Borrower shall receive a notice that it is in default
under the First Deed of Trust, it will promptly communicate such fact to Lender.
7. USE OF PROPERTY. Unless required by applicable law or unless Lender
has otherwise agreed in writing, Borrower shall not allow changes in the use for
which all or any part of the Property was intended at the time this Instrument
was executed. Borrower shall not initiate or acquiesce in a change in the zoning
classification of the Property without Lender's prior written consent.
8. PROTECTION OF LENDER'S OR TRUSTEE'S SECURITY. If Borrower fails to
perform the covenants and agreements contained in this Instrument, or if any
action or proceeding is commenced which affects the Property or title thereto or
the interest of Lender or Trustee therein, including, but not limited to,
eminent domain, insolvency, code enforcement, or arrangements or proceedings
involving a bankrupt or decedent, then Trustee or Lender at Trustee's or
Lender's respective option may make such appearances, disburse such sums and
take such action as Trustee or Lender deems necessary, in its sole discretion,
to protect Trustee's or Lender's interest, including, but not limited to, (a)
disbursement of attorney's fees, (b) entry upon the Property to make repairs,
(c) procurement of satisfactory insurance as provided in paragraph 5 hereof, and
(d) if this Instrument encumbers a leasehold, exercise of any option to renew or
extend the ground lease on behalf of Borrower and the curing of any default of
Borrower in the terms and conditions of the ground lease.
Any amounts disbursed by Trustee or Lender pursuant to this paragraph,
with interest thereon, shall become additional indebtedness of Borrower secured
by this Instrument. Unless Borrower and Trustee or Lender agree to other terms
of payment, such amounts shall be immediately due and payable and shall bear
interest from the date of disbursement at the rate stated in the Note unless
collection from Borrower of interest at such rate would be contrary to
applicable law, in which event such amounts shall bear interest at the highest
rate which may be collected from Borrower under applicable law. Borrower hereby
covenants and agrees that Lender shall be subrogated to the lien of any mortgage
or other lien discharged, in whole or in part, by the indebtedness secured
hereby. Nothing contained in this paragraph shall require Trustee or Lender to
incur any expense or take any action hereunder.
9. INSPECTION. Any person authorized by Lender shall have the right to
enter upon and inspect the Property after reasonable notice to Borrowers and
during normal business hours. Lender shall have no duty, however, to make such
inspections. Any inspection of the Property by Lender shall be entirely for its
benefit, and Borrower shall in no way rely or claim reliance thereon.
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10. RENT ROLL AND FINANCIAL STATEMENTS. Borrower shall maintain full
and correct books and records open to Lender's inspection showing in detail the
income, expenses and earnings of Borrower and of the Property, and shall provide
Lender the following:
(a) a financial statement for the Property consisting of a
complete itemized statement of income and operating expenses, prepared in
accordance with general accounting principles or otherwise in form acceptable to
Lender and certified by Borrower's chief executive or financial officer, within
ninety (90) days after the end of each fiscal year of Borrower, or as requested
from time to time by Lender, but not more often than quarterly;
(b) a rent roll of the Property, certified by the chief
executive or financial officer of Borrower, within thirty (30) days after the
end of each fiscal year of Borrower, or as requested from time to time by
Lender, but not more often than quarterly, containing the name and address of
each tenant, square footage of leased premises, annual rent, rent per square
foot, lease commencement date, lease expiration date, date through which rent is
paid, and the nature and extent of any defaults by each tenant;
(c) a financial statement for Borrower consisting of a balance
sheet and a complete itemized statement of annual income and operating expenses
of Borrower, prepared in accordance with generally accepted accounting
principles or otherwise in form acceptable to Lender and certified by Borrower's
chief executive or financial officer, within ninety (90) days after the end of
each fiscal year of Borrower, or as requested from time to time by Lender;
(d) such other financial information as Lender may reasonably
require, when requested from time to time by Lender.
11. CONDEMNATION. If all the Property and Improvements are taken or
acquired in any condemnation proceeding or by exercise of the right of eminent
domain or, with Lender's consent, by any conveyance in lieu thereof, the amount
of any award or other payment for such taking, or conveyance or damages made in
consideration thereof, to the extent of the full amount of the then remaining
unpaid Indebtedness, is, subject to the rights of the holder of the First Deed
of Trust, hereby assigned to Lender, and Lender is empowered to collect and
receive the same and to give proper receipts therefor in the name of Borrower,
and the same shall be paid forthwith to Lender. Such award or payment so
received by Lender shall be applied to the Indebtedness (whether or not then due
and payable).
Subject to the rights of the holder of the First Deed of Trust, in the
event a portion of the Property Improvements are acquired in any condemnation
proceeding or by the exercise of the right of eminent domain, to the extent that
the damage to the Property or improvements is in the amount of $500,000.00 or
less, and provided there is no Event of Default, as hereinafter defined, the
proceeds of any such condemnation or eminent domain award shall be paid to
Borrower, who shall use such proceeds as provided for in paragraph 5 hereof with
respect to the disbursement of insurance proceeds where the damage or
destruction is in an amount of $500,000.00 or less. The provisions of paragraph
5 where there is damage or destruction in an amount of $500,000.00 or less shall
apply as if fully rewritten.
Subject to the rights of the holder of the First Deed of Trust, in the
event the damage to the Improvements or Property by virtue of such condemnation
proceeding or eminent domain proceeding is in an amount in excess of
$500,000.00, and provided there is no Event of Default, as hereinafter defined,
the proceeds of such eminent domain or condemnation award shall be deposited in
escrow with Lender as escrow agent for the purpose of repairing, restoring, or
reconstructing the Improvements and/or Property, and shall be disbursed by
Lender in accordance with the provisions of paragraph 5 hereof with respect to
the disbursement of insurance proceeds, where the damage or destruction is in an
amount of $500,000.00 or greater. The conditions to disbursement, including the
requirement that Lender be satisfied that the repaired or restored Improvements
would be equal in size, quality and value to those which existed previously, and
the right to cause the Property to be reappraised, as provided for where there
is damage or destruction of $500,000.00 or greater, shall be applicable as if
fully rewritten.
Anything in this Section 11 to the contrary notwithstanding, if there
shall be an Event of Default, as hereinafter defined, the proceeds of such
eminent domain or condemnation award
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shall, at the sole option of Lender, be applied by Lender to the Indebtedness in
such order as Lender may determine.
12. BORROWER AND LIEN NOT RELEASED. From time to time, Trustee at
Lender's direction and Lender may, at Lender's option, without giving notice to
or obtaining the consent of Borrower, Borrower's successors or assigns or of any
junior lienholder or guarantors, without liability on Trustee's or Lender's part
and notwithstanding Borrower's breach of any covenant or agreement of Borrower
in this Instrument, extend the time for payment of said indebtedness or any part
thereof, reduce the payments thereon, release anyone liable on any of said
indebtedness, accept a renewal note or notes therefor, release from the lien of
this Instrument any part of the Property, take or release other or additional
security, reconvey any part of the Property, consent to any map or plan of the
Property, consent to the granting of any easement, join in any extension or
subordination agreement, agree in writing with Borrower to modify the rate of
interest or period of amortization of the Note, or change the amount of the
monthly installments payable thereunder. Any actions taken by Trustee or Lender
pursuant to the terms of this paragraph shall not affect the obligation of
Borrower or Borrower's successors or assigns to pay the sums secured by this
Instrument and to observe the covenants of Borrower contained herein, shall not
affect the guaranty of any person, corporation, partnership or other entity for
payment of the indebtedness secured hereby, and shall not affect the lien or
priority of lien hereof on the Property. Borrower shall pay Trustee and Lender a
reasonable service charge, together with such title insurance premiums and
attorney's fees as may be incurred at Lender's option for any such action if
taken at Borrower's request.
13. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by Lender in
exercising or directing any right or remedy hereunder, or otherwise afforded by
applicable law, shall not be a waiver of or preclude the exercise of any right
or remedy. The acceptance by Lender of payment of any sum secured by this
Instrument after the due date of such payment shall not be a waiver of Lender's
right to either-require prompt payment when due of all other sums so secured or
to declare a default for failure to make prompt payment. The procurement of
insurance or the payment of taxes or other liens or charges by Lender shall not
be a waiver of Lender's right to accelerate the maturity of the indebtedness
secured by this Instrument. Lender's receipt of any awards, proceeds or damages
under paragraphs 5 and 11 hereof shall not operate to cure or waive Borrower's
default in payment of sums secured by this Instrument.
14. ESTOPPEL CERTIFICATE. Borrower shall, within ten days of a written
request from Lender, furnish Lender with a written statement, duly acknowledged,
setting forth the sums secured by this Instrument and any right of set-off,
counterclaim or other defense which exists against such sums and the obligations
of this Instrument.
15. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. In addition to being a
Long-Form Deed of Trust and Assignment of Rents, this Instrument is intended to
be a security agreement pursuant to the Uniform Commercial Code for any of the
items specified above as part of the Property which under applicable law, may be
subject to a security interest pursuant to the Uniform Commercial Code, and
Borrower hereby grants Lender a security interest in said items. Borrower agrees
that Lender may file this Instrument, or a reproduction thereof, in the real
estate records or other appropriate index, as a financing statement for any of
the items specified above as part of the Property. Any reproduction of this
Instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement. In addition, Borrower agrees to execute and
deliver to Lender, upon Lender's request, any financing statements, as well as
extensions, renewals and amendments thereof, and reproductions of this
Instrument in such form as Lender may require to perfect a security interest
with respect to said items. Borrower shall pay all costs of filing such
financing statements and any extensions, renewals, amendments and releases
thereof. Without the prior written consent of Lender, Borrower shall not create
or suffer to be created pursuant to the Uniform Commercial Code any other
security interest in said items, including replacements and additions thereto.
Upon Borrower's breach of any covenant or agreement of Borrower contained in
this Instrument, including the covenants to pay when due all sums secured by
this Instrument, Lender shall have the remedies of a secured party under the
Uniform Commercial Code and, at Lender's option, may also invoke the remedies
provided in paragraph 25 of this Instrument as to such items. In exercising any
of said remedies, Lender may proceed against the items of real property and any
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<PAGE> 9
items of personal property specified above as part of the Property separately or
together and in any order whatsoever, without in any way affecting the
availability of Lender's remedies under the Uniform Commercial Code or of the
remedies provided in paragraph 25 of this Instrument.
16. LEASES OF THE PROPERTY. Borrower shall comply with and observe
Borrower's obligations as landlord under all leases of the Property or any part
thereof. Borrower shall furnish Lender with executed copies of all leases now
existing or hereafter made of all or any part of the Property.
Borrower shall, at Borrower's sole cost and expense, perform and
discharge all of the obligations and undertakings of the landlord under the
Leases and give prompt notice to Huntington of any failure to do so. Borrower
shall use all reasonable efforts to enforce or secure the performance of each
and every obligation and undertaking of the tenants under the Leases and shall
appear in and prosecute or defend any action or proceeding arising under, or in
any manner connected with, the Leases or the obligations and undertakings of the
tenants thereunder.
Borrower does hereby assign to Lender, as additional security, all
leases now existing or hereafter made of all or any part of the Property and, to
the extent permitted by applicable law, all security deposits made by tenants in
connection with such leases of the Property. Upon Borrower's default, Lender, at
Lender's option, shall have all of the rights and powers possessed by Borrower
prior to such assignment.
17. REMEDIES CUMULATIVE. Each remedy provided in this Instrument is
distinct and cumulative to all other rights or remedies under this Instrument or
afforded by law or equity, and may be exercised concurrently, independently, or
successively, in any order whatsoever.
18. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower shall
voluntarily file a petition under the Federal Bankruptcy Code, as such Code may
from time to time be amended, or under any similar or successor Federal Statute
relating to bankruptcy, insolvency, arrangements or reorganizations, or under
any state bankruptcy or insolvency act, or file an answer in an involuntary
proceeding admitting insolvency or failure to pay debts as they come due, or if
Borrower shall fail within 60 days to obtain a vacation, stay or dismissal of
involuntary proceedings brought for the reorganization, dissolution or
liquidation of Borrower, or if an order for relief under the Federal Bankruptcy
Code shall be entered against the Borrower, or if a trustee, receiver or
custodian shall be appointed for Borrower or Borrower's property, or if the
Property shall become subject to the jurisdiction of a Federal bankruptcy court
or similar state court, or if Borrower shall make an assignment for the benefit
of Borrower's creditors, or if there is an attachment, execution or other
judicial seizure of any portion of Borrower's assets and such seizure is not
discharged within 60 days, then Lender may, at Lender's option, declare all of
the sums secured by this Instrument to be immediately due and payable without
prior notice to Borrower, and Lender may invoke any remedies permitted by
paragraph 25 of this Instrument. Any attorney's fees and other expenses incurred
by Lender in connection with Borrower's bankruptcy or any of the other aforesaid
events shall be additional indebtedness of Borrower secured by this Instrument
pursuant to paragraph 8 hereof.
19. TRANSFERS OF THE PROPERTY OR BENEFICIAL INTERESTS IN BORROWER. On
sale, encumbrance. or transfer of (a) all or any part of the Property, or any
interest therein, or (b) beneficial interests in Borrower, Lender may, at
Lender's option, declare all of the sums secured by this Instrument to be
immediately due and payable, and Lender may invoke any remedies permitted by
paragraph 25 of this Instrument. This option shall not apply in case of:
(i) transfers by devise or descent or by operation of law upon
the death of a tenant in common or a partner;
(ii) the grant of a leasehold interest in a part of the
Property of three years or less (or such longer lease term as Lender may permit
by prior written approval) not containing an option to purchase (except any
interest in the ground lease, if this Instrument encumbers a leasehold); and
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<PAGE> 10
(iii) sales or transfers of fixtures or any personal property
pursuant to paragraph 6 hereof.
20. NOTICE. Any notice required or permitted to be given hereunder
shall be in writing. If mailed by first class United States mail, postage
prepaid, registered or certified with return receipt requested, then such shall
be effective upon its deposit in the mails. Notice given in any other manner
shall be effective only if and when received by the addressee. For purposes of
notice, the addresses of Borrower and Lender shall be as set forth below;
provided however, that either party shall have the right to change such party's
address for notice hereunder to any other location within the continental United
States by the giving of thirty (30) days' notice to the other party.
If to Borrower: Weberstown Mall, LLC
20 South Third Street
Columbus, Ohio 43215
Attention: General Counsel
If to Lender: The Huntington National Bank
Commercial Real Estate Group
41 South High Street
Columbus, Ohio 43215
21. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; AGENTS;
CAPTIONS. The covenants and agreements herein contained shall bind, and the
rights hereunder shall inure to, the respective successors and assigns of
Trustee, Lender and Borrower, subject to the provisions of paragraph 19 hereof.
Lender or any successor in ownership of any indebtedness secured hereby, may
from time to time, by instrument in writing, substitute a successor or
successors to any Trustee named herein or acting hereunder, which instrument,
executed by the Lender and duly acknowledged and recorded in the office of the
recorder of the county or counties where said property is situated, shall be
conclusive proof of proper substitution of such successor Trustee or Trustees,
who shall, without conveyance from the Trustee predecessor, succeed to all its
title, estate, rights, powers and duties. Said instrument must contain the name
of the original Borrower, Trustee and Lender hereunder, the book and page where
this Deed is recorded and the name and address- of the new Trustee. All
covenants and agreements of Borrower shall be joint and several. In exercising
any rights hereunder or taking any actions provided for herein, Lender may act
through its employees, agents or independent contractors as authorized by
Lender. The captions and headings of the paragraphs of this Instrument are for
convenience only and are not to be used to interpret or define the provisions
hereof.
22. GOVERNING LAW; SEVERABILITY. This Instrument shall be governed by
the law of the jurisdiction in which the Property is located. In the event that
any provision of this Instrument or the Note conflicts with applicable law, such
conflict shall not affect other provisions of this Instrument or the Note which
can be given effect without the conflicting provisions, and to this end the
provisions of this Instrument and the Note are declared to be severable. In the
event that any applicable law limiting the amount of interest or other charge
permitted to be collected from Borrower is interpreted so that any charge
provided for in this Instrument or in the Note, whether considered separately or
together with other charges levied in connection with this Instrument and the
Note, violates such law, and Borrower is entitled to the benefit of such law,
such charge is hereby reduced to the extent necessary to eliminate such
violation. The amounts, if any, previously paid to Lender in excess of the
amounts payable to Lender pursuant to such charges as reduced shall be applied
by Lender to reduce the principal of the indebtedness evidenced by the Note. For
the purpose of determining whether any applicable law limiting the amount of
interest or other charges permitted to be collected from Borrower has been
violated, all indebtedness which is secured by this Instrument or evidenced by
the Note and which constitutes interest, as well as all other charges levied in
connection with such indebtedness which constitute interest, shall be deemed to
be uniformly allocated and spread over the stated term of the Note.
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<PAGE> 11
23. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the right
to assert any statute of limitations as a bar to the enforcement of the lien of
this Instrument or to any action brought to enforce the Note or any other
obligation secured by this Instrument.
24. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interests in the Property held by Trustee or Lender or by any other
party, Lender shall have the right to determine the order in which any or all of
the Property shall be subjected 'to the remedies provided herein. Lender shall
have the right to determine the order in which any or all portions of the
indebtedness secured hereby are satisfied from the proceeds realized upon the
exercise of the remedies provided herein. Borrower, any party who consents to
this Instrument, and any party who now or hereafter acquires a security interest
in the Property and who has actual or constructive notice hereof hereby, waives
any and all right to require the marshalling of assets in connection with the
exercise of any of the remedies permitted by applicable law or provided herein.
25. ACCELERATION; REMEDIES. Upon default by Borrower in payment of any
indebtedness secured hereby or in performance of any agreement hereunder, Lender
may declare all sums secured hereby, immediately due and payable by delivery to
Trustee of written declaration of default and demand for sale and of written
notice of default and of election to cause to be sold said property, which
notice Trustee shall cause to be filed for record. Lender also shall deposit
with Trustee this Deed, the Note and all documents evidencing expenditures
secured hereby.
After the lapse of such time as may then be required by law following
the recordation of said notice of default, and notice of sale having been given
as then required by law, Trustee, without demand on Borrower, shall sell said
property at the time and place fixed by it in said notice of sale, either as a
whole or in separate parcels, and in such order as it may determine, at public
auction to the highest bidder for cash in lawful money of the United States,
payable at time of sale. Trustee may postpone sale of all or any portion of said
property by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement at the time fixed
by the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including Borrower, Trustee, or
Lender may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this
Trust, including cost of evidence of title in connection with sale, Trustee
shall apply the proceeds of sale to payment of: all sums expended under the
terms hereof, not then repaid, with accrued interest at the amount allowed by
law in effect at the date hereof; all other sums then secured hereby; and the
remainder, if any, to the person or persons legally entitled thereto.
26. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.
As part of the consideration for the indebtedness evidenced by the Note, subject
to the rights of the holder of the First Deed of Trust, Borrower hereby
absolutely and unconditionally assigns and transfers to Lender all the rents and
revenues of the Property, including those now due, past due, or to become due by
virtue of any lease, license or other agreement for the occupancy or use of all
or any part of the Property, regardless of to whom the rents and revenues of the
Property are payable. Subject to the rights of the holder of the First Deed of
Trust, Borrower hereby authorizes Lender or Lender's agents to collect the
aforesaid rents and revenues and hereby directs each tenant of the Property to
pay such rents to Lender or Lender's agents; provided, however, that prior to
written notice given by Lender to Borrower of the breach by Borrower of any
covenant or agreement of Borrower in this Instrument, Borrower shall collect and
receive all rents and revenues of the Property as trustee for the benefit of
Lender and Borrower, to apply the rents and revenues so collected to the sums
secured by this Instrument in the order provided in paragraph 3 hereof with the
balance, so long as no such breach has occurred, to the account of Borrower, it
being intended by Borrower and Lender that this assignment of rents constitutes
an absolute assignment and not an assignment for additional security only. Upon
delivery of written notice by Lender to Borrower of the breach by Borrower of
any covenant or agreement of Borrower in this Instrument, and without the
necessity of Lender entering upon and taking and maintaining full control of the
Property in person, by agent
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<PAGE> 12
or by a court-appointed receiver, Lender shall, subject to the rights of the
holder of the First Deed of Trust, immediately be entitled to possession of all
rents and revenues of the Property as specified in this paragraph as the same
become due and payable, including but not limited to rents then due and unpaid,
and all such rents shall immediately upon delivery of such notice be held by
Borrower as trustee for the benefit of Lender only; provided, however, that the
written notice by Lender to Borrower of the breach by Borrower shall contain a
statement that Lender exercises its rights to such rents. Borrower agrees that
commencing upon delivery of such written notice of Borrower's breach by Lender
to Borrower, each tenant of the Property shall, subject to the rights of the
holder of the First Deed of Trust, make such rents payable to and pay such rents
to Lender or Lender's agents on Lender's written demand to each tenant therefor,
delivered to each tenant personally, by mail or delivering such demand to each
rental unit, without any liability on the part of said tenant to inquire further
as to the existence of a default by Borrower.
Except for an assignment in favor of the holder of the First Deed of
Trust, Borrower hereby covenants that Borrower has not executed any prior
assignment of said rents, that Borrower has not performed, and will not perform,
any acts or has not executed, and will not execute, any instrument which would
prevent Lender from exercising its rights under this paragraph, and that at the
time of execution of this Instrument there has been no anticipation or
prepayment of any of the rents of the Property for more than one month prior to
the due dates of such rents. Borrower covenants that Borrower will not hereafter
collect or accept payment of any rents of the Property more than one month prior
to the due dates of such rents. Borrower further covenants that Borrower will
execute and deliver to Lender such further assignments of rents and revenues of
the Property as Lender may from time to time request.
Upon Borrower's breach of any covenant or agreement of Borrower in this
Instrument, Lender may, subject to the rights of the holder of the First Deed of
Trust, in person, by agent or by a court-appointed receiver, regardless of the
adequacy of Lender's security, enter upon and take and maintain full control of
the Property in order to perform all acts necessary and appropriate for the
operation and maintenance thereof including, but not limited to, the execution,
cancellation or modification of leases, the collection of all rents and revenues
of the Property, the making of repairs to the Property and the execution or
termination of contracts providing for the management or maintenance of the
Property, all on such terms as are deemed best to protect the security of this
Instrument. In the event Lender elects to seek the appointment of a receiver for
the Property upon Borrower's breach of any covenant or agreement of Borrower in
this Instrument, Borrower hereby expressly consents to the appointment of such
receiver. Lender or the receiver shall be entitled to receive a reasonable fee
for so managing the Property.
Subject to the rights of the holder of the First Deed of Trust, all
rents and revenues collected subsequent to delivery of written notice by Lender
to Borrower of the breach by Borrower of any covenant or agreement of Borrower
in this Instrument shall be applied first to the costs, if any, of taking
control of and managing the Property and collecting the rents, including, but
not limited to, attorney's fees, receiver's fees, premiums on receiver's bonds,
costs of repairs to the Property, premiums on insurance policies, taxes,
assessments and other charges on the Property, and the costs of discharging any
obligation or liability of Borrower as lessor or landlord of the Property and
then to the sums secured by this Instrument. Lender or the receiver shall have
access to the books and records used in the operation and maintenance of the
Property and shall be liable to account only for those rents actually received.
Lender shall not be liable to Borrower, anyone claiming under or through
Borrower or anyone having an interest in the Property by reason of anything done
or left undone by Lender under this paragraph.
If the rents of the Property are not sufficient to meet the costs, if
any, of taking control of and managing the Property and collecting the rents,
any funds expended by Lender for such purposes shall become indebtedness of
Borrower to Lender secured by this Instrument pursuant to paragraph 8 hereof.
Unless Lender and Borrower agree in writing to other terms of payment, such
amounts shall be payable upon notice from Lender to Borrower requesting payment
thereof and shall bear interest from the date of disbursement at the rate stated
in the Note.
Any entering upon and taking and maintaining of control of the Property
by Lender or the receiver and any application of rents as provided herein shall
not cure or waive any default hereunder or invalidate any other right or remedy
of Lender under applicable law or as provided
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<PAGE> 13
herein. This assignment of rents shall terminate at such time as this Instrument
ceases to secure indebtedness held by Lender.
27. HAZARDOUS SUBSTANCES.
(a) Borrower hereby covenants and agrees with Lender that the
following terms shall have the following meanings:
(i) "Environmental Laws" means all federal, state and
local laws, statutes, ordinances, and codes relating to the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of any Hazardous Substance and the rules, regulations, policies,
guidelines, interpretations, decisions, orders and directives with respect
thereto.
(ii) "Hazardous Substance" means, without limitation,
any flammable explosives, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, petroleum and petroleum based
products, methane, hazardous materials, hazardous wastes, hazardous or toxic
Substances or related materials, as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801, et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901, et seq.), the Toxic Substances Control Act, as
amended (15 U.S.C. Sections 2601, et seq.), or any other applicable
Environmental Law.
(iii) "Indemnitee" means Lender, its participants in
the loan, and all subsequent holders of this Instrument, their respective
successors and assigns, their respective officers, directors, employees, agents,
representatives, contractors and subcontractors and any subsequent owner of the
Property who acquires title thereto from or through Lender.
(iv) "Release" has the same meaning as given to that
term in the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (42 U.S.C. Sections 9601, et seq.), and the regulations
promulgated thereunder.
(b) Borrower represents and warrants to Lender that, to its
knowledge after due investigation except as may be set forth in the
environmental report for the Property delivered to Lender in connection
herewith: (i) the Property is not being and has not been used for the storage,
treatment, generation, transportation, processing, handling, production or
disposal of any Hazardous Substance in violation of any Environmental Laws; (ii)
the Property does not contain any Hazardous Substance in violation of any
Environmental Laws; (iii) there has been no Release of any Hazardous Substance
on, at or from the Property or any property adjacent to or within the immediate
vicinity of the Property, and Borrower has not received any form of notice or
inquiry with regard to such a Release or the threat of such a Release; (iv) no
event has occurred with respect to the Property which, with the passage of time
or the giving of notice, or both, would constitute a violation of any applicable
Environmental Law; (v) there are no agreements or orders or directives of any
federal, state or local governmental agency or authority relating to the
Property which require any work, repair, construction, containment, clean up,
investigations, studies, removal or other remedial action with respect to the
Property and (vi) there are no actions, suits, claims or proceedings, pending or
threatened, which seek any remedy that arise out of the condition, ownership,
use, operation, sale, transfer or conveyance of the Property and (a) a violation
or alleged violation of any applicable Environmental Law, (b) the presence of
any Hazardous Substance or a Release of any Hazardous Substance or the threat of
such a Release, or (c) human exposure to any Hazardous Substance.
(c) Borrower covenants and agrees with Lender as follows:
(i) Borrower shall keep, and shall use reasonable
efforts to cause all operators, tenants, sub-tenants, licensees, and occupants
of the Property to keep, the Property free of all Hazardous Substances, except
for Hazardous Substances stored, treated, generated, transported, processed,
handled, produced or disposed of in the normal operation of the Property as a
shopping center in accordance with all Environmental Laws.
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<PAGE> 14
(ii) Borrower shall comply with, and shall use
reasonable efforts to cause all operators, tenants, sub-tenants, licensees, and
occupants of the Property to comply with, all Environmental Laws.
(iii) Borrower shall promptly provide Lender with a
copy of all notifications which it gives or receives with respect to any past or
present Release of any Hazardous Substance or the threat of such a Release on,
at or from the Property or any property adjacent to or within the immediate
vicinity of the Property.
(iv) Borrower shall undertake and complete all
investigations, studies, sampling and testing for Hazardous Substances
reasonably required by Lender and, in accordance with all Environmental Laws,
all removal and other remedial actions necessary to contain, remove, and clean
up all Hazardous Substances that are determined to be present at the Property in
violation of any Environmental Law.
(v) Lender shall have the right, but not the
obligation, to cure any violation by Borrower of the Environmental Laws and
Lender's cost and expense to so cure shall be secured by this Instrument.
(d) Borrower covenants and agrees, at its sole cost and expense,
to indemnify, defend and save harmless Indemnitee from and against any and all
damages, losses, liabilities, obligations, penalties, claims, litigation,
demands, defenses, judgments, suits, actions, proceedings, costs, disbursements
and/or expenses (including, without limitation, reasonable attorneys' and
experts' fees and expenses) of any kind or nature whatsoever which may at any
time be imposed upon, incurred by or asserted or awarded against Indemnitee
arising out of the condition, ownership, use, operation, sale, transfer or
conveyance of the Property and (i) the storage, treatment, generation,
transportation, processing, handling, production or disposal of any Hazardous
Substance, (ii) the presence of any Hazardous Substance or a Release of any
Hazardous Substance or the threat of such a Release, (iii) human exposure to any
Hazardous Substance, (iv) a violation of any Environmental Law, or (v) a
material misrepresentation or inaccuracy in any representation or warranty or
material breach of or failure to perform any covenant made by Borrower herein
(collectively the "Indemnified Matters").
The liability of Borrower to Indemnitee hereunder shall in no way
be limited, abridged, impaired or otherwise affected by (a) the repayment of all
sums and the satisfaction of all obligations of Borrower under the Note, this
Instrument, or any other instrument evidencing or securing the Note (herein
collectively the "Loan Documents"), (b) the foreclosure of this Instrument or
the acceptance of a deed in lieu thereof, (c) any amendment or modification of
the Loan Documents by or for the benefit of Borrower or any subsequent owner of
the Property, (d) any extensions of time for payment or performance required by
any of the Loan Documents, (e) the release or discharge of this Instrument or of
Borrower, any guarantor of the loan, or any other person from the performance or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents whether by Lender, by operation of law, or otherwise,
(f) the invalidity or unenforceability of any of the terms or provisions of the
Loan Documents, (g) any applicable statute of limitations, (h) the sale or
assignment of the Note or this Instrument, (i) the sale, transfer, or conveyance
of all or part of the Property, (j) the dissolution or liquidation of Borrower,
(k) the release or discharge, in whole or in part, of Borrower in any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or similar proceeding, or (l) any other circumstances which might
otherwise constitute a legal or equitable release or discharge, in whole or in
part, of Borrower under the Note or this Instrument.
The foregoing indemnity shall be in addition to any and all other
obligations and liabilities Borrower may have to Lender at common law.
28. RELEASE. Upon payment of all sums secured by this Instrument,
Lender shall discharge this Instrument. Borrower shall pay Lender's reasonable
costs incurred in discharging this Instrument.
29. TRUSTEE. Trustee accepts this Trust when this Deed, duly executed
and acknowledged, is made a public record as provided by law. Trustee is not
obligated to notify any
14
<PAGE> 15
party hereto of pending sale under any other Deed of Trust or of any action or
proceeding in which Borrower, Lender or Trustee shall be a party unless brought
by Trustee.
30. MISCELLANEOUS. The covenants herein contained shall bind, and the
benefits and advantages shall inure to, the respective successors and assigns of
the parties hereto. Whenever used, the singular number shall include the plural,
the plural the singular, and the use of any gender shall include all genders. If
any provision of the Deed of Trust is illegal, or hereafter rendered illegal, or
is for any other reason void, voidable or otherwise unenforceable, or hereafter
rendered void, voidable or otherwise unenforceable, the remainder of the Deed of
Trust shall not be affected thereby, but shall be construed as if it does not
contain such provision. Each right and remedy provided in the Deed of Trust is
distinct and cumulative to all other rights or remedies under the Deed of Trust
or afforded by law or equity, and may be exercised concurrently, independently
or successively, in any order whatsoever. The Deed of Trust shall be governed by
and construed under the laws of the State of California.
LENDER, BY ACCEPTANCE OF THIS DEED OF TRUST, AND BORROWER HEREBY
MUTUALLY, VOLUNTARILY, IRREVOCABLY AND UNCONDITIONALLY WAIVE FOR THE BENEFIT OF
THE OTHER ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE LOAN, THE TRANSACTIONS RELATED THERETO OR THE
RELATIONSHIP ESTABLISHED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO
LENDER AND BORROWER TO ENTER INTO THIS TRANSACTION. IT SHALL NOT IN ANY WAY
AFFECT, WAIVE, LIMIT, AMEND OR MODIFY LENDER'S ABILITY TO PURSUE ITS REMEDIES.
IN WITNESS WHEREOF, Borrower, by its duly authorized officer, has
executed this Instrument.
Signed and acknowledged WEBERSTOWN MALL, LLC, a Delaware Limited
in the presence of liability company
Glimcher Weberstown, Inc., a Delaware
corporation Managing Member
/s/ Robert C. Kiger By: /s/ George A. Schmidt
- --------------------------------- ------------------------------------
/s/ Dennis J. Kovatch Its: Senior Vice President
- --------------------------------- ------------------------------------
STATE OF OHIO,
COUNTY OF FRANKLIN, SS:
On this 13th day of October, 1998, before me, a Notary Public in and
for said County and State, personally appeared George A. Schmidt known to me to
be the person who as Senior Vice President of Glimcher Weberstown, Inc., the
corporation which executed the foregoing instrument, as managing member of
Weberstown Mall, LLC, signed the same, and acknowledged to me that they did so
sign said instrument in the name and upon behalf of said corporation as such
officer and by authority of a resolution of its board directors; and that the
same is his free act and deed as such officer, and the free and corporate act
and deed of said corporation as managing member as aforesaid and the free act
and deed of Weberstown Mall, LLC.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
/s/ Robert C. Kiger
--------------------------------
Notary Public
15
<PAGE> 16
This instrument prepared by:
Robert C. Kiger, Attorney-at-Law
PORTER, WRIGHT, MORRIS & ARTHUR
41 South High Street
Columbus, Ohio 43215
16
<PAGE> 1
Exhibit 10.82
[Ohio]
MORTGAGE
from
GLIMCHER PROPERTIES LIMITED PARTNERSHIP, Mortgagor
to
BANKERS TRUST COMPANY, Mortgagee
DATED AS OF OCTOBER 30, 1998
After recording, please return to:
Simpson Thacher & Bartlett
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Daniel Karp, Esq.
<PAGE> 2
[Ohio]
MORTGAGE
THIS MORTGAGE, dated as of October 30, 1998, is made by
GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership
Mortgagor"), whose address is 20 South Third Street, Columbus, Ohio 43215, to
BANKERS TRUST COMPANY ("Mortgagee"), whose address is 130 Liberty Street, New
York, New York 10006. References to this "Mortgage" shall mean this instrument
and any and all renewals, modifications, amendments, supplements, extensions,
consolidations, substitutions, spreaders and replacements of this instrument.
Background
Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with all of the
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "Improvements"), being collectively referred to as the "Real
Estate"). Mortgagor and the general partner of Mortgagor is the maker of a note
(as the same may be amended, supplemented, modified, extended, restated or
replaced from time to time, the "Note"), dated as of September 15, 1998, made
payable to Mortgagee in the amount of $10,000,000. The Note bears interest at
the rate stated in the Note; references in this Mortgage to the "Default Rate"
shall have the meaning given to such term in the Note.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the
Note, and (ii) all interest and fees payable thereon (the items set
forth in clauses (i) and (ii) being referred to collectively as the
"Indebtedness"); and
(b) the performance of all covenants, agreements, obligations
and liabilities (the "Obligations") of GPLP under or pursuant to the
provisions of the Note, and of Mortgagor under this Mortgage, any other
document securing payment of the Indebtedness (the "Security
Documents") and any amendments, supplements, extensions, renewals,
restatements, replacements or modifications of any of the foregoing
(the Note, the Security Documents and all other documents and
instruments
<PAGE> 3
2
from time to time evidencing, securing or guaranteeing the payment of
the Indebtedness or the performance of the Obligations, as any of the
same may be amended, supplemented, extended, renewed, restated,
replaced or modified from time to time, are collectively referred to as
the "Loan Documents");
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Mortgagor, in possession or expectancy, in and to the Real Estate or
any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and
riparian rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents, issues, profits
and revenue thereof and all land lying in the bed of any street, road
or avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) all of the fixtures, chattels, business machines,
machinery, apparatus, equipment, furnishings, fittings and articles of
personal property of every kind and nature whatsoever, and all
appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts
and accessories) currently owned or subsequently acquired by Mortgagor
and now or subsequently attached to, or contained in or used or usable
in any way in connection with any operation or letting of the Real
Estate, including but without limiting the generality of the foregoing,
all screens, awnings, shades, blinds, curtains, draperies, artwork,
carpets, rugs, storm doors and windows, furniture and furnishings,
heating, electrical, and mechanical equipment, lighting, switchboards,
plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems,
motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description (all of the
foregoing in this paragraph (D) being referred to as the "Equipment");
<PAGE> 4
3
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Mortgagor or constructed, assembled or placed by Mortgagor on the
Real Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials whether stored at the Real Estate or offsite, and,
in each such case, without any further mortgage, conveyance, assignment
or other act by Mortgagor;
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "Leases"), and all
rights of Mortgagor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Mortgaged Property (as defined below)
(collectively, the "Rents");
(G) all trade names, trade marks, logos, copyrights, good will
and books and records relating to or used in connection with the
operation of the Real Estate or the Equipment or any part thereof; all
general intangibles related to the operation of the Improvements now
existing or hereafter arising;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's interest in and to all proceeds of any such
insurance policies (including title insurance policies) including the
right to collect and receive such proceeds, subject to the provisions
relating to insurance generally set forth below; and all awards and
other compensation, including the interest payable thereon and the
right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or Equipment for the taking by
eminent domain, condemnation or otherwise, of all or any part of the
Real Estate or any easement or other right therein;
(I) all right, title and interest of Mortgagor in and to (i)
all contracts from time to time executed by Mortgagor or any manager or
agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the
Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or
any property which is adjacent or
<PAGE> 5
4
peripheral to the Real Estate, together with the right to exercise such
options and all leases of Equipment (collectively, the "Contracts"),
(ii) all consents, licenses, building permits, certificates of
occupancy and other governmental approvals relating to construction,
completion, occupancy, use or operation of the Real Estate or any part
thereof (collectively, the "Permits") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage; all capital, operating, reserve
or similar accounts held by or on behalf of Mortgagor and related to
the operation of the Mortgaged Property, whether now existing or
hereafter arising and all monies held in any of the foregoing accounts
and any certificates or instruments related to or evidencing such
accounts;
(K) all accounts and revenues arising from the operation of
the Improvements including, without limitation, (i) any right to
payment now existing or hereafter arising for rental of hotel rooms or
other space or for goods sold or leased or for services rendered,
whether or not yet earned by performance, arising from the operation of
the Improvements or any other facility on the Mortgaged Property and
(ii) all rights to payment from any consumer credit-charge card
organization or entity including, without limitation, payments arising
from the use of the American Express Card, the Visa Card, the Carte
Blanche Card, the Mastercard or any other credit card, including those
now existing or hereafter created, substitutions therefor, proceeds
thereof (whether cash or non-cash, movable or immovable, tangible or
intangible) received upon the sale, exchange, transfer, collection or
other disposition or substitution thereof and any and all of the
foregoing and proceeds therefrom; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through (L) are
collectively referred to as the "Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
<PAGE> 6
5
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants the title to the
Premises, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Mortgagee to insure the lien
of this Mortgage (the "Permitted Exceptions").
2. Intentionally Deleted.
3. Requirements.
(a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall
not by act or omission permit any building or other improvement on any premises
not subject to the lien of this Mortgage to rely on the Premises or any part
thereof or any interest therein to fulfill any Legal Requirement, and Mortgagor
hereby assigns to Mortgagee any and all rights to give consent for all or any
portion of the Premises or any interest therein to be so used. Mortgagor shall
not by act or omission impair the integrity of any of the Real Estate as a
single zoning lot separate and apart from all other premises. Mortgagor
represents that each parcel of the Real Estate constitutes a legally subdivided
lot, in compliance with all subdivision laws and similar Legal Requirements. Any
act or omission by Mortgagor which would result in a violation of any of the
provisions of this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Promptly when
due, Mortgagor shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes), all
charges for any easement or agreement maintained for the
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benefit of any of the Mortgaged Property, all general and special assessments,
levies, permits, inspection and license fees, all water and sewer rents and
charges, vault taxes, and all other public charges even if unforeseen or
extraordinary, imposed upon or assessed against or which may become a lien on
any of the Mortgaged Property, or arising in respect of the occupancy, use or
possession thereof, together with any penalties or interest on any of the
foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Upon request by Mortgagee, Mortgagor shall deliver to Mortgagee
(i) original or copies of receipted bills and canceled checks evidencing payment
of such Imposition if it is a real estate tax or other public charge and (ii)
evidence acceptable to Mortgagee showing the payment of any other such
Imposition. If by law any Imposition, at Mortgagor's option, may be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Mortgagor may elect to pay such Imposition in such installments and
shall be responsible for the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such Imposition shall have
become due. Any sums paid by Mortgagee in discharge of any Impositions shall be
payable on demand by Mortgagor to Mortgagee together with interest at the
Default Rate.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any taxes assessed against the Mortgaged Property
or any part thereof, and shall not claim any deduction from the taxable value of
the Mortgaged Property by reason of this Mortgage.
(d) Mortgagor shall have the right before any delinquency
occurs to contest or object in good faith to the amount or validity of any
Imposition by appropriate legal proceedings, but such right shall not be deemed
or construed in any way as relieving, modifying, or extending Mortgagor's
covenant to pay any such Imposition at the time and in the manner provided in
this Section unless (i) Mortgagor has given prior written notice to Mortgagee of
Mortgagor's intent so to contest or object to an Imposition, (ii) Mortgagor
shall demonstrate to Mortgagee's satisfaction that the legal proceedings shall
operate conclusively to prevent the sale of the Mortgaged Property, or any part
thereof, to satisfy such Imposition prior to final determination of such
proceedings and (iii) Mortgagor shall furnish a good and sufficient bond or
surety as requested by and reasonably satisfactory to Mortgagee in the amount of
the Impositions which are being contested plus any interest and penalty which
may be imposed thereon and which could become a lien against the Real Estate or
any part of the Mortgaged Property.
5. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on all of the Premises
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(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss. The policy shall include building ordinance law
endorsements and the policy limits shall be automatically reinstated
after each loss;
(ii) comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), covering all claims for personal injury,
bodily injury or death, or property damage occurring on, in or about
the Premises in an amount not less than $10,000,000 combined single
limit with respect to injury and property damage relating to any one
occurrence plus such excess limits as Mortgagee shall request from time
to time;
(iii) when and to the extent required by Mortgagee, insurance
against loss or damage by any other risk commonly insured against by
persons occupying or using like properties in the locality or
localities in which the Real Estate is situated;
(iv) insurance against rent loss, extra expense or business
interruption (and/or soft costs, in the case of new construction), if
applicable, in amounts satisfactory to Mortgagee, but not less than one
year's gross rent or gross income;
(v) during the course of any construction or repair of
Improvements, comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), (including coverage for elevators and
escalators, if any). The policy shall include coverage for independent
contractors and completed operations. The completed operations coverage
shall stay in effect for two years after construction of any
Improvements has been completed. The policy shall provide coverage on
an occurrence basis against claims for personal injury, including,
without limitation, bodily injury, death or property damage occurring
on, in or about the Premises and the adjoining streets, sidewalks and
passageways, such insurance to afford immediate minimum protection to a
limit of not less than that required by Mortgagee with respect to
personal injury, bodily injury or death to any one or more persons or
damage to property;
(vi) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Mortgagor engaged on or with
respect to the Premises in such amounts as are reasonably satisfactory
to Mortgagee, but in no event less than the limits established by law;
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(vii) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed
value form insurance against "all risks of physical loss," including
collapse, water damage, flood and earthquake and transit coverage,
during construction or repairs of the Improvements, with deductible
approved by Mortgagee, in nonreporting form, covering the total value
of work performed and equipment, supplies and materials furnished (with
an appropriate limit for soft costs in the case of construction);
(viii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping,
heating, air conditioning and elevator equipment and escalator
equipment, provided the Improvements contain equipment of such nature,
and insurance against rent, extra expense, business interruption and
soft costs, if applicable, arising from any such breakdown, in such
amounts as are reasonably satisfactory to Mortgagee but not less than
the lesser of $1,000,000 or 10% of the value of the Improvements;
(ix) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, flood insurance in an
amount satisfactory to Mortgagee, but in no event less than the maximum
limit of coverage available under the National Flood Insurance Act of
1968, as amended; and
(x) such other insurance in such amounts as Mortgagee may
reasonably request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be canceled, non-renewed or materially
amended without 30-days' prior written notice to Mortgagee, and (ii) with
respect to all property insurance, provide for deductibles not to exceed
$100,000, contain a "Replacement Cost Endorsement" without any deduction made
for depreciation and with no co-insurance penalty (or attaching an agreed amount
endorsement satisfactory to Mortgagee), with loss payable solely to Mortgagee
(modified, if necessary, to provide that proceeds in the amount of replacement
cost may be retained by Mortgagee without the obligation to rebuild) as its
interest may appear, without contribution, under a "standard" or "New York"
mortgagee clause acceptable to Mortgagee and be written by insurance companies
having an A.M. Best Company, Inc. rating of A or higher and a financial size
category of not less than XII, or otherwise as approved by Mortgagee. Liability
insurance policies shall name Mortgagee as an additional insured and contain a
waiver of subrogation against Mortgagee; all such policies shall indemnify and
hold Mortgagee harmless from all liability claims occurring on, in or about the
Premises and the adjoining streets, sidewalks and passageways. The amounts of
each insurance policy and the form of each such policy shall at all times be
satisfactory to Mortgagee. Each policy shall expressly provide that any proceeds
<PAGE> 10
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which are payable to Mortgagee shall be paid by check payable to the order of
Mortgagee only and requiring the endorsement of Mortgagee only. If any required
insurance shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the capital of
any insurer, or if for any other reason whatsoever such insurance shall become
unsatisfactory to Mortgagee, Mortgagor shall immediately obtain new or
additional insurance satisfactory to Mortgagee. Mortgagor shall not take out any
separate or additional insurance which is contributing in the event of loss
unless it is properly endorsed and otherwise satisfactory to Mortgagee in all
respects.
(b) Mortgagor shall deliver to Mortgagee an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Mortgagee, together with a copy of the declaration page for each
such policy. Mortgagor shall (i) pay as they become due all premiums for such
insurance, (ii) not later than 15 days prior to the expiration of each policy to
be furnished pursuant to the provisions of this Section, deliver a renewed
policy or policies, or duplicate original or originals thereof, marked "premium
paid," or accompanied by such other evidence of payment satisfactory to
Mortgagee with standard non-contributory mortgage clauses in favor of and
acceptable to Mortgagee. Upon request of Mortgagee, Mortgagor shall cause its
insurance underwriter or broker to certify to Mortgagee in writing that all the
requirements of this Mortgage governing insurance have been satisfied.
(c) If Mortgagor is in default of its obligations to insure or
deliver any such prepaid policy or policies, then Mortgagee, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Mortgagor shall pay to Mortgagee on demand such
premium or premiums so paid by Mortgagee with interest from the time of payment
at the Default Rate.
(d) Mortgagor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12 months
from the date of this Mortgage and each successive 12 month period to occur
thereafter) by using the F.W. Dodge Building Index or an equivalent index to
determine whether there shall have been an increase in the replacement value
since the most recent adjustment and, if there shall have been such an increase,
the amount of insurance required shall be adjusted accordingly.
(e) Mortgagor promptly shall comply with and conform to (i)
all provisions of each such insurance policy, and (ii) all requirements of the
insurers applicable to Mortgagor or to any of the Mortgaged Property or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. Mortgagor shall not use or permit the
use of the Mortgaged Property in any manner which would permit any insurer to
cancel any insurance policy or void coverage required to be maintained by this
Mortgage.
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(f) If the Mortgaged Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Mortgagor for any personal
injury, bodily injury or property damage incurred on or about the Premises,
Mortgagor shall give immediate notice thereof to Mortgagee. If the Mortgaged
Property is damaged by fire or other casualty and the cost to repair such damage
is less than the lesser of (i) 15% of the replacement cost of the Improvements
at the affected Real Estate site and (ii) $300,000, then provided that no Event
of Default shall have occurred and be continuing, Mortgagor shall have the right
to adjust such loss, and the insurance proceeds relating to such loss may be
paid over to Mortgagor; provided that Mortgagor shall, promptly after any such
damage, repair all such damage regardless of whether any insurance proceeds have
been received or whether such proceeds, if received, are sufficient to pay for
the costs of repair. If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds the above limit, or if an
Event of Default shall have occurred and be continuing, then Mortgagor
authorizes and empowers Mortgagee, at Mortgagee's option and in Mortgagee's sole
discretion, as attorney-in-fact for Mortgagor, to make proof of loss, to adjust
and compromise any claim under any insurance policy, to appear in and prosecute
any action arising from any policy, to collect and receive insurance proceeds
and to deduct therefrom Mortgagee's expenses incurred in the collection process.
Each insurance company concerned is hereby authorized and directed to make
payment for such loss directly to Mortgagee. Mortgagee shall have the right to
require Mortgagor to repair or restore the Mortgaged Property, and Mortgagor
hereby designates Mortgagee as its attorney-in-fact for the purpose of making
any election required or permitted under any insurance policy relating to repair
or restoration. The insurance proceeds or any part thereof received by Mortgagee
may be applied by Mortgagee toward reimbursement of all costs and expenses of
Mortgagee in collecting such proceeds, and the balance: (i) providing that no
Event of Default shall have occurred and is continuing, shall be made available
to Mortgagor for purposes of restoration or repair of the property damaged; or
(ii) should an Event of Default have occurred and be continuing, at Mortgagee's
option in its sole and absolute discretion, to the principal (to the
installments in inverse order of maturity, if payable in installments) and
interest due or to become due under the Note, to fulfill any other Obligation of
Mortgagor, to the restoration or repair of the property damaged, or released to
Mortgagor. In the event Mortgagee elects to release such proceeds to Mortgagor,
Mortgagor shall be obligated to use such proceeds to restore or repair the
Mortgaged Property. Application by Mortgagee of any insurance proceeds toward
the last maturing installments of principal and interest due or to become due
under the Note shall not excuse GPLP from making any regularly scheduled
payments due thereunder, nor shall such application extend or reduce the amount
of such payments.
(g) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any insurance
policies then in force shall pass to the purchaser or grantee
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and Mortgagor hereby appoints Mortgagee its attorney-in-fact, in Mortgagor's
name, to assign and transfer all such policies and proceeds to such purchaser or
grantee.
(h) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
Mortgagor; provided, however, that (A) any such policy shall specify, or
Mortgagor shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Mortgaged Property and
any sublimits in such blanket policy applicable to the Premises and the other
Mortgaged Property, (B) each such blanket policy shall include an endorsement
providing that, in the event of a loss resulting from an insured peril,
insurance proceeds shall be allocated to the Mortgaged Property in an amount
equal to the coverages required to be maintained by Mortgagor as provided above
and (C) the protection afforded under any such blanket policy shall be no less
than that which would have been afforded under a separate policy or policies
relating only to the Mortgaged Property.
6. Restrictions on Liens and Encumbrances. Except for the lien
of this Mortgage and the Permitted Exceptions, Mortgagor shall not further
mortgage, nor otherwise encumber the Mortgaged Property nor create or suffer to
exist any lien, charge or encumbrance on the Mortgaged Property, or any part
thereof, whether superior or subordinate to the lien of this Mortgage and
whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Mortgagor
shall not sell, transfer, convey or assign all or any portion of, or any
interest in, the Mortgaged Property.
8. Limitation on Fundamental Changes. Mortgagor agrees that:
(i) if Mortgagor is a partnership, Mortgagor shall not
dissolve or terminate or materially amend the terms of its partnership
agreement; and
(ii) Mortgagor shall not enter into any transaction of merger
or consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or acquire by purchase or otherwise all or
substantially all the business or assets of, or any stock or other
evidence of beneficial ownership of, any entity.
9. Maintenance; No Alteration; Inspection; Utilities. (a)
Mortgagor shall maintain or cause to be maintained all the Improvements in good
condition and repair and shall not commit or suffer any waste of the
Improvements. Mortgagor shall repair, restore, replace or rebuild promptly any
part of the Premises which may be damaged or destroyed by any casualty
whatsoever. The Improvements shall not be demolished or materially altered, nor
any material additions built, without the prior written consent of Mortgagee.
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(b) Mortgagee and any persons authorized by Mortgagee shall
have the right to enter and inspect the Premises and the right to inspect all
work done, labor performed and materials furnished in and about the Improvements
and the right to inspect and make copies of all books, contracts and records of
Mortgagor relating to the Mortgaged Property.
(c) Mortgagor shall pay or cause to be paid when due all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
10. Condemnation/Eminent Domain. Immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's
option and in Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to
commence, appear in and prosecute, in Mortgagee's or Mortgagor's name, any
action or proceeding relating to any condemnation of the Mortgaged Property, or
any portion thereof, and to settle or compromise any claim in connection with
such condemnation. If Mortgagee elects not to participate in such condemnation
proceeding, then Mortgagor shall, at its expense, diligently prosecute any such
proceeding and shall consult with Mortgagee, its attorneys and experts and
cooperate with them in any defense of any such proceedings. All awards and
proceeds of condemnation shall be assigned to Mortgagee to be applied in the
same manner as insurance proceeds, as provided above, and Mortgagor agrees to
execute any such assignments of all such awards as Mortgagee may request.
11. Restoration. At any time when Mortgagee releases funds to
Mortgagor for restoration of any of the Mortgaged Property, then such
restoration shall be performed only in accordance with the following conditions:
(i) prior to the commencement of any restoration, the plans
and specifications for such restoration, and the budgeted costs, shall
be submitted to and approved by Mortgagee;
(ii) prior to making any advance of restoration funds,
Mortgagee shall be satisfied that the remaining restoration funds are
sufficient to complete the restoration and to pay all related expenses,
including interest on the Indebtedness and real estate taxes on the
Premises, during restoration;
(iii) at the time of any disbursement of the restoration
funds, (A) no Default (as defined below) shall then exist, (B) no
mechanics' or materialmen's liens shall have been filed and remain
undischarged, except those discharged by the disbursement of the
requested restoration funds and (C) a satisfactory bring-down or
continuation of title insurance on the Premises shall be delivered to
Mortgagee;
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(iv) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of satisfactory evidence of the stage of
completion and of performance of the work in a good and workmanlike
manner and in accordance with the contracts, plans and specifications
acceptable to Mortgagee;
(v) with respect to each advance of restoration funds,
Mortgagee may retain 10% of the amount of such advance as a holdback
until the restoration is fully completed;
(vi) the restoration funds shall bear no interest and may be
commingled with Mortgagee's other funds;
(vii) Mortgagee may impose such other conditions as are
customarily imposed by construction lenders; and
(viii) any restoration funds remaining shall be retained by
Mortgagee and may be applied by Mortgagee, in its sole discretion, to
the Indebtedness in the inverse order of maturity.
12. Leases. (a) Mortgagor shall not (i) execute an assignment
or pledge of any Lease relating to all or any portion of the Mortgaged Property
other than in favor of Mortgagee, or (ii) without the prior written consent of
Mortgagee, execute any new Lease for space in excess of 10,000 square feet.
(b) As to any existing or new Lease Mortgagor shall:
(i) promptly perform all of the provisions of the Lease on the
part of the lessor thereunder to be performed;
(ii) promptly enforce all of the provisions of the Lease on
the part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Mortgagor as lessor or of the lessee thereunder;
(iv) exercise, within 5 days after a request by Mortgagee, any
right to request from the lessee a certificate with respect to the
status thereof;
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(v) simultaneously deliver to Mortgagee copies of any notices
of default which Mortgagor may at any time forward to or receive from
the lessee;
(vi) upon request, promptly deliver to Mortgagee a fully
executed counterpart of the Lease; and
(vii) promptly deliver to Mortgagee, upon Mortgagee's request,
an assignment of the Mortgagor's interest under such Lease.
(c) Mortgagor shall deliver to Mortgagee, within 10 days after
a request by Mortgagee, a written statement, certified by Mortgagor as being
true, correct and complete, containing the names of all lessees and other
occupants of the Mortgaged Property, the terms of all Leases and the spaces
occupied and rentals payable thereunder, and a list of all Leases which are then
in default, including the nature and magnitude of the default; such statement
shall be accompanied by credit information with respect to the lessees and such
other information as Mortgagee may reasonably request.
(d) All Leases entered into by Mortgagor after the date
hereof, if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage unless
Mortgagee shall otherwise elect in writing.
(e) As to any existing or new Lease for space in excess of
10,000 square feet, Mortgagor shall not accept a surrender or terminate, cancel,
rescind, supplement, alter, revise, modify or amend such Lease or permit any
such action to be taken without the prior written consent of Mortgagee. As to
any exiting or new Lease, Mortgagor shall not accept the payment of rent more
than thirty (30) days in advance of its due date.
(f) If any act or omission of Mortgagor would give any lessee
under any Lease the right, immediately or after lapse of a period of time, to
cancel or terminate such Lease, or to abate or offset against the payment of
rent or to claim a partial or total eviction, such lessee shall not exercise
such right until it has given written notice of such act or omission to
Mortgagee and until a reasonable period for remedying such act or omission shall
have elapsed following the giving of such notice without a remedy being
effected.
(g) In the event of the enforcement by Mortgagee of any remedy
under this Mortgage, the lessee under each Lease shall, if requested by
Mortgagee or any other person succeeding to the interest of Mortgagee as a
result of such enforcement, attorn to Mortgagee or to such person and shall
recognize Mortgagee or such successor in interest as lessor under the Lease
without change in the provisions thereof; provided however, that Mortgagee or
such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
modification to the Lease made without the
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consent of Mortgagee or such successor in interest; (iii) liable for any
previous act or omission of Mortgagor (or its predecessors in interest); (iv)
responsible for any monies owing by Mortgagor to the credit of such lessee or
subject to any credits, offsets, claims, counterclaims, demands or defenses
which the lessee may have against Mortgagor (or its predecessors in interest);
(v) bound by any covenant to undertake or complete any construction of the
Premises or any portion thereof; or (vi) obligated to make any payment to such
lessee other than any security deposit actually delivered to Mortgagee or such
successor in interest. Each lessee or other occupant, upon request by Mortgagee
or such successor in interest, shall execute and deliver an instrument or
instruments confirming such attornment. In addition, Mortgagor agrees that each
Lease entered into after the date of this Mortgage shall include language to the
effect of subsections (d)-(g) of this Section; provided that the provisions of
such subsections shall be self-operative and any failure of any Lease to include
such language shall not impair the binding effect of such provisions on any
lessee under such Lease.
13. Further Assurances/Estoppel Certificates. To further
assure Mortgagee's rights under this Mortgage, Mortgagor agrees upon demand of
Mortgagee to do any act or execute any additional documents (including, but not
limited to, security agreements on any personalty included or to be included in
the Mortgaged Property and a separate assignment of each Lease in recordable
form) as may be required by Mortgagee to confirm the lien of this Mortgage and
all other rights or benefits conferred on Mortgagee. Mortgagor, within 5
business days after request, shall deliver, in form and substance satisfactory
to Mortgagee, a written statement, duly acknowledged, setting forth the amount
of the Indebtedness, and whether any offsets, claims, counterclaims or defenses
exist against the Indebtedness and certifying as to such other matters as
Mortgagee shall reasonably request.
14. Mortgagee's Right to Perform. If Mortgagor fails to
perform any of the covenants or agreements of Mortgagor, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage, may, at any time (but shall be under no obligation to) pay or perform
the same, and the amount or cost thereof, with interest at the Default Rate,
shall immediately be due from Mortgagor to Mortgagee. To the extent that any
such amounts or costs paid by Mortgagee shall constitute payment of (i)
Impositions; (ii) premiums on insurance policies covering the Premises; (iii)
expenses incurred in upholding or enforcing the lien of this Mortgage,
including, but not limited to the expenses of any litigation to prosecute or
defend the rights and lien created by this Mortgage; (iv) costs of removal of or
otherwise related to Hazardous Materials (as defined below) or asbestos; or (v)
any amount, costs or charge to which Mortgagee becomes subrogated, upon payment,
whether under recognized principles of law or equity, or under express statutory
authority; then, and in each such event, such amounts or costs, together with
interest thereon at the Default Rate, shall be added to the Indebtedness and
shall be secured by this Mortgage and shall be a lien on the Mortgaged Property
prior to any right, title to, interest in, or claim upon the Mortgaged Property
attaching subsequent to the lien of this Mortgage. No payment or advance of
money
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by Mortgagee under this Section shall be deemed or construed to cure Mortgagor's
default or waive any right or remedy of Mortgagee.
15. Mortgagor's Existence, etc. Mortgagor shall do all things
necessary to preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state in which it was
formed and its right to own property and transact business in each state in
which the Real Estate is located. Mortgagor represents and warrants that
Mortgagor is a duly organized and validly existing corporation or general or
limited partnership, as the case may be, in good standing, and this Mortgage has
been executed by a duly authorized partner or officer thereof, as applicable.
This Mortgage constitutes the legal, valid and binding obligation of Mortgagor,
enforceable against Mortgagor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
16. Financial Statements; Certificates; Other Information. (a)
Mortgagor shall deliver to Mortgagee (i) within 120 days after the end of each
of its fiscal years annual operating statements and a rent roll for the Premises
and a copy of Mortgagor's annual audited report, including a statement of
sources and uses of funds of Mortgagor as at the end of such year, and related
statements of income and retained earnings and changes in financial position for
such year, and (ii) within 90 days after the end of each of its fiscal quarters
(other than the last) quarterly operating statements and a rent roll for the
Premises as at the end of such quarter. The foregoing financial statements shall
be certified by the chief financial officer of or by a partner in Mortgagor, as
the case may be, and with respect to Mortgagor's annual financial statements,
also by a certified public accountant approved by Mortgagee. All financial
statements delivered to Mortgagee shall be true and correct in all respects,
shall be prepared in accordance with generally accepted accounting principles,
consistently applied, and fairly present the financial condition of the subject
as of the dates thereof and each of the operating statements shall be in
reasonable detail and include cash flow and any other information reasonably
requested by Mortgagee. Any materially adverse change that occurs in the
financial condition reflected therein after the date thereof shall be reported
to Mortgagee promptly. None of the financial statements, or any certificate or
statement furnished to Mortgagee by or on behalf of Mortgagor in connection with
the transactions contemplated hereby, shall contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
(b) Mortgagor shall furnish to Mortgagee:
<PAGE> 18
17
(i) concurrently with the delivery of the financial statements
referred to in subsection (a), a certificate of an executive officer or
of a partner of Mortgagor stating that, to the best of such person's
knowledge, after such examination or investigation as is necessary to
enable such person to make an informed judgment, Mortgagor during such
period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Mortgage
and all other documents evidencing, securing or relating to the
Indebtedness to be observed, performed or satisfied by it, and that
such person has obtained no knowledge of any Event of Default or any
event which with the giving of notice or passage of time, or both,
would constitute an Event of Default ("Default"), except as specified
in such certificate;
(ii) not later than 60 days prior to the end of each 12-month
period, commencing with the 12-month period ending on the date one year
from the date of this Mortgage, a copy of the projections by Mortgagor
of the operating budget and cash flow for the Premises for such
12-month period; and
(iii) promptly, such additional financial and other
information as Mortgagee may from time to time reasonably request.
17. Notice of Certain Occurrences. Mortgagor shall give notice
to Mortgagee promptly upon the occurrence of:
(a) any Default or Event of Default;
(b) any (i) default or event of default under any provision of
any security issued by or any agreement, instrument or undertaking of Mortgagor
or which binds Mortgagor or any property thereof (collectively, "Contractual
Obligations") or (ii) litigation, investigation or proceeding which may exist at
any time between Mortgagor and any Governmental Authority, which, with respect
to both clauses (i) and (ii), could have a material adverse effect on the
business, operations, property or financial or other condition of Mortgagor;
(c) any litigation or proceeding affecting Mortgagor or the
Mortgaged Property or any part thereof in which the amount involved is $250,000
or more and not fully covered by insurance or in which injunctive or similar
relief is sought; and
(d) a material adverse change in the business, operations,
property or financial or other condition of Mortgagor or the Mortgaged Property
or any part thereof.
18 Hazardous Material. (a) Neither Mortgagor nor, to the best
knowledge of Mortgagor, any other person has ever caused or permitted, in
violation of any Legal Requirement, any Hazardous Material (as defined below) to
be placed, held, located or
<PAGE> 19
18
disposed of on, under or at the Premises, or any part thereof, and the Premises
have never been used (whether by Mortgagor or, to the best knowledge of
Mortgagor, by any other person, including any tenant) as a dump site or storage
(whether permanent or temporary) site for any Hazardous Material, in violation
of any Legal Requirement.
(b) Mortgagor represents that (i) to the best of Mortgagor's
knowledge, the Premises are free of all Hazardous Material that are in violation
of any Legal Requirement and (ii) neither the Premises nor any site within the
vicinity of the Premises is or has been adversely affected by any Hazardous
Material or is in violation of any applicable Legal Requirement of any
Governmental Authority regulating, relating to, or imposing liability or
standards of conduct concerning Hazardous Material.
(c) Mortgagor shall comply with any and all applicable Legal
Requirements governing the discharge and removal of Hazardous Material, shall
pay immediately when due the costs of removal of any Hazardous Material, and
shall keep the Premises free of any lien imposed pursuant to such Legal
Requirements. In the event Mortgagor fails to do so, after notice to Mortgagor
and the expiration of the earlier of (i) applicable cure periods hereunder, or
(ii) the cure period permitted under the applicable Legal Requirement, Mortgagee
may declare such failure an Event of Default or cause the Premises to be freed
from the Hazardous Material and the cost of the removal with interest at the
Default Rate shall immediately be due from Mortgagor to Mortgagee. Mortgagor
further agrees not to release or dispose of any Hazardous Material at the
Premises without the express approval of Mortgagee and any such release or
disposal shall comply with all applicable Legal Requirements and any conditions
established by Mortgagee. In addition, Mortgagor agrees not to allow the
manufacture, storage, transmission, presence or disposal of any Hazardous
Material over or upon the Premises. Mortgagee shall have the right at any time
to conduct an environmental audit of the Premises and Mortgagor shall cooperate
in the conduct of such environmental audit. Mortgagor shall give Mortgagee and
its agents and employees access to the Premises to remove Hazardous Material.
Mortgagor agrees to defend, indemnify and hold Mortgagee free and harmless from
and against all loss, costs, damage and expense (including attorneys' fees and
costs and consequential damages) Mortgagee may sustain by reason of (i) the
imposition or recording of a lien by any Governmental Authority pursuant to any
Legal Requirement relating to hazardous or toxic wastes or substances or the
removal thereof ("Hazardous Material Laws"); (ii) claims of any private parties
regarding violations of Hazardous Material Laws; (iii) costs and expenses
(including, without limitation, attorneys' fees and fees incidental to the
securing of repayment of such costs and expenses) incurred by Mortgagor or
Mortgagee in connection with the removal of any such lien or in connection with
Mortgagor's or Mortgagee's compliance with any Hazardous Material Laws; and (iv)
the assertion against Mortgagee by any party of any claim in connection with
Hazardous Material.
(d) For the purposes of this Mortgage, "Hazardous Material"
means and includes any hazardous, nuclear, toxic or dangerous waste, substance
or material defined as
<PAGE> 20
19
such in (or for purposes of) the Comprehensive Environmental Response,
Compensation, and Liability Act, any so-called "Superfund" or "Superlien" law,
or any other Legal Requirement regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, nuclear, toxic or dangerous
waste, substance or material, as now or at any time in effect.
(e) The foregoing indemnification shall survive repayment of
the Note, notwithstanding the delivery of any satisfaction, release or release
deed, discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.
19 Asbestos. Mortgagor shall not install or permit to be
installed in the Premises friable asbestos or any substance containing asbestos
and deemed hazardous by any Legal Requirement respecting such material, or any
other building material deemed to be harmful, hazardous or injurious by relevant
Legal Requirements and with respect to any such material currently present in
the Premises shall promptly either (a) remove any material which such Legal
Requirements deem harmful, hazardous or injurious and require to be removed or
(b) otherwise comply with such Legal Requirements, at Mortgagor's expense. If
Mortgagor shall fail to so remove or otherwise comply, Mortgagee may declare an
Event of Default and/or do whatever is necessary to eliminate such substances
from the Premises or otherwise comply with the applicable Legal Requirement, and
the costs thereof, with interest at the Default Rate, shall be immediately due
from Mortgagor to Mortgagee. Mortgagor shall give Mortgagee and its agents and
employees access to the Premises to remove such asbestos or substances.
Mortgagor shall defend, indemnify, and save Mortgagee harmless from all loss,
costs, damages and expense (including attorneys' fees and costs and
consequential damages) asserted or proven against Mortgagee by any party, as a
result of the presence of such substances or any removal or compliance with such
Legal Requirements. The foregoing indemnification shall survive repayment of the
Note, notwithstanding the delivery of any satisfaction, release or release deed,
discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.
20 Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default:
(a) an Event of Default shall occur under the Note;
(b) a failure to make payment of any other sums required to be
paid hereunder (including, without limitation, any Imposition) within
the period required by specific provision of this Mortgage or, if no
such period is so provided, by no later than three days after written
notice; or
(c) a failure (i) to keep in force the insurance required by
this Mortgage, or (ii) to comply with and conform to all provisions and
requirements of the insurance
<PAGE> 21
20
policies and the insurers thereunder which would affect Mortgagor's
ability to keep in force the insurance required by this Mortgage or to
collect any proceeds therefrom, or (iii) to comply with any other
material provisions of this Mortgage regarding insurance; or
(d) upon default, five business days after request, in
furnishing a statement of the outstanding amount secured by this
Mortgage and whether any offset or defense exists against the
Indebtedness; or
(e) upon the actual waste, removal or demolition of, or
material alteration to, any part of the Premises (other than necessary
replacements of worn or obsolete Equipment), or construction of any new
Improvements; or
(f) upon failure to comply promptly with any Legal Requirement
or order or notice of violation of law or ordinance issued by any
Governmental Authority having jurisdiction over the Premises, which
failure could materially adverse affect the Mortgaged Property; or
(g) if any representation or warranty made by Mortgagor in
this Mortgage shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(h) if any Obligor (as defined below) shall (i) default in any
payment of principal of or interest on any (A) indebtedness for
borrowed money in respect of which an Obligor is liable, contingently
or otherwise, as obligor, guarantor or otherwise, or in respect of
which such Obligor otherwise assures a creditor against loss or (B)
obligations under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as
capital leases for which obligations such Obligor is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or for
which obligations such Obligor assures a creditor against loss
(collectively referred to as "Debt") (other than the Note) beyond the
period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Debt was created; or (ii)
default in the observance or performance of any other agreement or
condition relating to any such Debt or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Debt (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, such Debt to become
due prior to its stated maturity; or
(i) if (i) Mortgagor or any Partner or any guarantor of
payment of all or any portion of the Indebtedness or performance of any
of the Obligations (a "Guarantor";
<PAGE> 22
21
Mortgagor, each Partner and each Guarantor being collectively referred
to as an "Obligor") shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
assets, or any Obligor shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against any Obligor
any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days (the events specified
in clauses (i) and (ii) of this subsection being referred to as
"Automatic Acceleration Defaults"); or (iii) there shall be commenced
against any Obligor any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets, which
results in the entry of an order for any such relief which shall not
have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) any Obligor shall take
any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clauses (i), (ii)
or (iii) above; or (v) any Obligor shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(j) if one or more judgments or decrees shall be entered
against any Obligor involving in the aggregate a liability (not paid or
fully covered by insurance) of $250,000 or more and all such judgments
or decrees shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or
(k) if any of the Mortgaged Property is damaged or destroyed
by an uninsured casualty and Mortgagor does not immediately provide
funds for the restoration of the damage caused by such casualty; or
(l) if Mortgagor shall further mortgage, pledge or otherwise
encumber the Mortgaged Property or any part thereof or any interest
therein or create or suffer to exist any lien, charge or other
encumbrance on the Mortgaged Property or any part thereof, whether
superior or subordinate to the lien of this Mortgage, whether recourse
or non-recourse; or
(m) if, except as permitted herein, Mortgagor shall (A) sell,
transfer, convey or assign the Mortgaged Property or any part thereof
or any interest therein (by
<PAGE> 23
22
operation of law or otherwise), or (B) lease any of the Mortgaged
Property without the prior written consent of Mortgagee;
(n) this Mortgage shall cease for any reason to be in full
force and effect or Mortgagor shall so assert in writing; or
(o) a failure of Mortgagor to duly perform and observe, or a
violation or breach of, any other terms, covenants, provisions or
conditions of this Mortgage and the continuation thereof for a 30-day
period after notice shall have been given to Mortgagor by Mortgagee
specifying such default and requiring such default be remedied; which
period may be extended to the extent required (but not longer than 180
days) if such default is not susceptible of cure within 30 days so long
as Mortgagor has commenced to cure such default within such 30-day
period and is thereafter diligently prosecuting such cure to completion
and so long as such delay is not likely to have a material adverse
effect on either the Mortgaged Property or Mortgagee's rights under
this Mortgage; provided, however, any such default that can be cured by
the payment of money shall be promptly cured after notice by Mortgagee.
21 Remedies.
(a) Upon the occurrence of any Event of Default, in addition
to any other rights and remedies Mortgagee may have pursuant to the
Loan Documents, or as provided by law, and without limitation, (a) if
such event is an Automatic Acceleration Default, automatically the
Indebtedness and all other amounts owing under the Note, this Mortgage
and the other Security Documents immediately shall become due and
payable, and (b) if such event is any other Event of Default, by notice
to Mortgagor, Mortgagee may declare the Indebtedness (together with
accrued interest thereon) and all other amounts payable under the Note,
this Mortgage and the other Security Documents to be immediately due
and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are
hereby expressly waived. In addition, upon the occurrence of any Event
of Default, Mortgagee may immediately 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, including, but
not limited to, the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such manner as Mortgagee
may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by
applicable law, (A) institute and maintain an action of
mortgage foreclosure against all or any part of the Mortgaged
Property, (B) institute and maintain an action on the Note,
(C) sell all or part of the Mortgaged Property (Mortgagor
expressly granting to
<PAGE> 24
23
Mortgagee the power of sale), or (D) take such other action at
law or in equity for the enforcement of this Mortgage or any
of the Loan Documents as the law may allow. Mortgagee may
proceed in any such action to final judgment and execution
thereon for all sums due hereunder, together with interest
thereon at the Default Rate and all costs of suit, including,
without limitation, reasonable attorneys' fees and
disbursements. Interest at the Default Rate shall be due on
any judgment obtained by Mortgagee from the date of judgment
until actual payment is made of the full amount of the
judgment.
(ii) Mortgagee may personally, or by its agents,
attorneys and employees and without regard to the adequacy or
inadequacy of the Mortgaged Property or any other collateral
as security for the Indebtedness and Obligations enter into
and upon the Mortgaged Property and each and every part
thereof and exclude Mortgagor and its agents and employees
therefrom without liability for trespass, damage or otherwise
(Mortgagor hereby agreeing to surrender possession of the
Mortgaged Property to Mortgagee upon demand at any such time)
and use, operate, manage, maintain and control the Mortgaged
Property and every part thereof. Following such entry and
taking of possession, Mortgagee shall be entitled, without
limitation, (x) to lease all or any part or parts of the
Mortgaged Property for such periods of time and upon such
conditions as Mortgagee may, in its discretion, deem proper,
(y) to enforce, cancel or modify any Lease and (z) generally
to execute, do and perform any other act, deed, matter or
thing concerning the Mortgaged Property as Mortgagee shall
deem appropriate as fully as Mortgagor might do.
(b) The holder of this Mortgage, in any action to foreclose
it, shall be entitled to the appointment of a receiver. In case of a
foreclosure sale, the Real Estate may be sold, at Mortgagee's election,
in one parcel or in more than one parcel and Mortgagee is specifically
empowered, (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the
Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and
notwithstanding to the contrary any exculpatory or non-recourse
language which may be contained herein, Mortgagee shall be entitled to
enjoin such breach and obtain specific performance of any covenant,
agreement, term or condition and Mortgagee shall have the right to
invoke any equitable right or remedy as though other remedies were not
provided for in this Mortgage.
22 Right of Mortgagee to Credit Sale. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial
<PAGE> 25
24
proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may
bid for and acquire the Mortgaged Property or any part thereof. In lieu of
paying cash therefor, Mortgagee may make settlement for the purchase price by
crediting upon the Indebtedness or other sums secured by this Mortgage the net
sales price after deducting therefrom the expenses of sale and the cost of the
action and any other sums which Mortgagee is authorized to deduct under this
Mortgage. In such event, this Mortgage, the Note and documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
23 Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property, and
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Mortgagee in case of entry as
provided in this Mortgage, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any part of the
Mortgaged Property, and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Mortgaged Property unless such
receivership is sooner terminated.
24 Extension, Release, etc. (a) Without affecting the lien or
charge of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure less
than all of the principal amount of the Indebtedness, it is expressly agreed
that any repayments of the principal amount of the Indebtedness shall not reduce
the amount of the lien of this Mortgage until the lien amount shall equal the
principal amount of the Indebtedness outstanding.
(b) 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 the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
<PAGE> 26
25
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien of
this Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid lien on the Mortgaged
Property for the amount secured hereby.
25 Security Agreement under Uniform Commercial Code. (a) It is
the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"Code") of the State of New York. If an Event of Default shall occur under this
Mortgage, then in addition to having any other right or remedy available at law
or in equity, Mortgagee shall have the option of either (i) proceeding under the
Code and exercising such rights and remedies as may be provided to a secured
party by the Code with respect to all or any portion of the Mortgaged Property
which is personal property (including, without limitation, taking possession of
and selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting the
Mortgaged Property in accordance with Mortgagee's rights, powers and remedies
with respect to the real property (in which event the default provisions of the
Code shall not apply). If Mortgagee shall elect to proceed under the Code, then
five days' notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited to,
attorneys' fees and legal expenses. At Mortgagee's request, Mortgagor shall
assemble the personal property and make it available to Mortgagee at a place
designated by Mortgagee which is reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; and (iv) the addresses of Mortgagor and Mortgagee are
as set forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time,
shall execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee, covering all or any part
of the Mortgaged Property and will further execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, any
<PAGE> 27
26
financing statement, affidavit, continuation statement or certificate or other
document as Mortgagee may request in order to perfect, preserve, maintain,
continue or extend the security interest under and the priority of this Mortgage
and such security instrument. Mortgagor further agrees to pay to Mortgagee on
demand all costs and expenses incurred by Mortgagee in connection with the
preparation, execution, recording, filing and re-filing of any such document and
all reasonable costs and expenses of any record searches for financing
statements Mortgagee shall reasonably require. Mortgagor shall from time to
time, on request of Mortgagee, deliver to Mortgagee an inventory in reasonable
detail of any of the Mortgaged Property which constitutes personal property. If
Mortgagor shall fail to furnish any financing or continuation statement within
10 days after request by Mortgagee, then pursuant to the provisions of the Code,
Mortgagor hereby authorizes Mortgagee, without the signature of Mortgagor, to
execute and file any such financing and continuation statements. The filing of
any financing or continuation statements in the records relating to personal
property or chattels shall not be construed as in any way impairing the right of
Mortgagee to proceed against any personal property encumbered by this Mortgage
as real property, as set forth above.
26 Assignment of Rents. Mortgagor hereby assigns to Mortgagee
the Rents as further security for the payment of the Indebtedness and
performance of the Obligations, and Mortgagor grants to Mortgagee the right to
enter the Mortgaged Property for the purpose of collecting the same and to let
the Mortgaged Property or any part thereof, and to apply the Rents on account of
the Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents and Mortgagor shall be entitled to collect, receive, use
and retain the Rents until the occurrence of an Event of Default under this
Mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate and
surrender the possession of the Mortgaged Property to Mortgagee or to such
receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any).
27 Trust Funds. (a) All lease security deposits of the Real
Estate in excess of $50,000 shall be treated as trust funds not to be commingled
with any other funds of Mortgagor. Within 10 days after request by Mortgagee,
Mortgagor shall furnish Mortgagee satisfactory evidence of compliance with this
subsection, together with a statement of all lease
<PAGE> 28
27
security deposits by lessees and copies of all Leases not previously delivered
to Mortgagee, which statement shall be certified by Mortgagor.
28 Additional Rights. The holder of any subordinate lien on
the Mortgaged Property shall have no right to terminate any Lease whether or not
such Lease is subordinate to this Mortgage nor shall any holder of any
subordinate lien join any tenant under any Lease in any action to foreclose the
lien or modify, interfere with, disturb or terminate the rights of any tenant
under any Lease. By recordation of this Mortgage all subordinate lienholders are
subject to and notified of this provision, and any action taken by any such
lienholder contrary to this provision shall be null and void. Upon the
occurrence of any Event of Default, Mortgagee may, in its sole discretion and
without regard to the adequacy of its security under this Mortgage, apply all or
any part of any amounts on deposit with Mortgagee under this Mortgage against
all or any part of the Indebtedness. Any such application shall not be construed
to cure or waive any Default or Event of Default or invalidate any act taken by
Mortgagee on account of such Default or Event of Default.
29 Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting from
the value of the Premises for the purposes of taxation any lien thereon, or
changing in any way the laws for the taxation of mortgages or debts secured
thereby for federal, state or local purposes, or the manner of collection of any
such taxes, and imposing a tax, either directly or indirectly, on mortgages or
debts secured thereby, the holder of this Mortgage shall have the right to
declare the Indebtedness due on a date to be specified by not less than 30 days'
written notice to be given to Mortgagor unless within such 30-day period
Mortgagor shall assume as an Obligation hereunder the payment of any tax so
imposed until full payment of the Indebtedness and such assumption shall be
permitted by law.
30 Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been sufficiently given or
served when presented personally, when delivered to an overnight courier service
with guaranteed next business day delivery or when deposited in the mail by
certified or registered mail, postage prepaid, addressed to Mortgagor at the
address given on the first page of this Mortgage Attention: General Counsel, and
to Mortgagee at the address given on the first page of this Mortgage, and shall
be deemed to have been received upon the earlier of actual receipt thereof or
the third calendar day after such mailing. Either party may change its address
by notice to the other party. If any party other than Mortgagor shall be
entitled to receive copies of notices, demands or approvals, failure of
Mortgagee to send such copies shall not impair the effectiveness of any notice
sent to Mortgagor.
31 No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage
<PAGE> 29
28
relating to this Mortgage shall be superior to the rights of the holder of any
intervening or subordinate lien or encumbrance.
32 Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage or
in any provisions of the Indebtedness or Loan Documents, the obligations of
Mortgagor and of any other obligor under the Indebtedness or Loan Documents
shall be subject to the limitation that Mortgagee shall not charge, take or
receive, nor shall Mortgagor or any other obligor be obligated to pay to
Mortgagee, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Mortgagee.
33 Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshaling in the event of foreclosure of the liens hereby created.
34 Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by mortgage, security agreement, pledge,
lien, assignment or otherwise. Neither the acceptance of this Mortgage nor its
enforcement, shall prejudice or in any manner affect Mortgagee's right to
realize upon or enforce any other security now or hereafter held by Mortgagee,
it being agreed that Mortgagee shall be entitled to enforce this Mortgage and
any other security now or hereafter held by Mortgagee in such order and manner
as Mortgagee may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Mortgagee is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be cumulative and
shall be
<PAGE> 30
29
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute. Every power or remedy given by any of the
Loan Documents to Mortgagee or to which it may otherwise be entitled, may be
exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by Mortgagee. In no event shall Mortgagee, in the exercise
of the remedies provided in this Mortgage (including, without limitation, in
connection with the assignment of Rents to Mortgagee, or the appointment of a
receiver and the entry of such receiver on to all or any part of the Mortgaged
Property), be deemed a "mortgagee in possession," and Mortgagee shall not in any
way be made liable for any act, either of commission or omission, in connection
with the exercise of such remedies.
35 Multiple Security. If (a) the Premises shall consist of one
or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold one or more additional mortgages, liens, deeds of trust or other
security (directly or indirectly) for the Indebtedness upon other property in
the State in which the Premises are located (whether or not such property is
owned by Mortgagor or by others) or (c) both the circumstances described in
clauses (a) and (b) shall be true, then to the fullest extent permitted by law,
Mortgagee may, at its election, commence or consolidate in a single foreclosure
action all foreclosure proceedings against all such collateral securing the
Indebtedness (including the Mortgaged Property), which action may be brought or
consolidated in the courts of any county in which any of such collateral is
located. Mortgagor acknowledges that the right to maintain a consolidated
foreclosure action is a specific inducement to Mortgagee to extend the
Indebtedness, and Mortgagor expressly and irrevocably waives any objections to
the commencement or consolidation of the foreclosure proceedings in a single
action and any objections to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have. Mortgagor further
agrees that if Mortgagee shall be prosecuting one or more foreclosure or other
proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Indebtedness, or if Mortgagee shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue foreclosure proceedings and exercise its other remedies
granted in this Mortgage against all or any part of the Mortgaged Property and
Mortgagor waives any objections to the commencement or continuation of a
foreclosure of this Mortgage or exercise of any other remedies hereunder based
on such other proceedings or judgments, and waives any right to seek to dismiss,
stay, remove, transfer or consolidate either any action under this Mortgage or
such other proceedings on such basis. Neither the commencement nor continuation
of proceedings to foreclose this Mortgage nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee's right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or
<PAGE> 31
30
outside the State in which the Premises are located) which directly or
indirectly secures the Indebtedness, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment in
such other proceedings or exercise of any remedies in such proceedings based
upon any action or judgment connected to this Mortgage, and Mortgagor also
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either such other proceedings or any action under this Mortgage on such basis.
It is expressly understood and agreed that to the fullest extent permitted by
law, Mortgagee may, at its election, cause the sale of all collateral which is
the subject of a single foreclosure action at either a single sale or at
multiple sales conducted simultaneously and take such other measures as are
appropriate in order to effect the agreement of the parties to dispose of and
administer all collateral securing the Indebtedness (directly or indirectly) in
the most economical and least time-consuming manner.
36 Expenses; Indemnification. (a) Mortgagor shall pay or
reimburse Mortgagee for all expenses incurred by Mortgagee before and after the
date of this Mortgage with respect to any and all transactions contemplated by
this Mortgage including without limitation, the preparation of any document
reasonably required hereunder or any amendment, modification, restatement or
supplement to this Mortgage, the delivery of any consent, non-disturbance
agreement or similar document in connection with this Mortgage or the
enforcement of any of Mortgagee's rights. Such expenses shall include, without
limitation, all title and conveyancing charges, recording and filing fees and
taxes, mortgage taxes, intangible personal property taxes, escrow fees, revenue
and tax stamp expenses, insurance premiums (including title insurance premiums),
title search and title rundown charges, brokerage commissions, finders' fees,
placement fees, court costs, surveyors', photographers', appraisers',
architects', engineers', consulting professional's, accountants' and attorneys'
fees and disbursements. Mortgagor acknowledges that from time to time Mortgagor
may receive statements for such expenses, including without limitation
attorneys' fees and disbursements. Mortgagor shall pay such statements promptly
upon receipt.
(b) If (i) any action or proceeding shall be commenced by
Mortgagee (including but not limited to any action to foreclose this Mortgage or
to collect the Indebtedness), or any action or proceeding is commenced to which
Mortgagee is made a party, or in which it becomes necessary to defend or uphold
the lien of this Mortgage (including, without limitation, any proceeding or
other action relating to the bankruptcy, insolvency or reorganization of any
Obligor), or in which Mortgagee is served with any legal process, discovery
notice or subpoena and (ii) in each of the foregoing instances such action or
proceeding in any manner relates to or arises out of this Mortgage or
Mortgagee's lending to Mortgagor or acceptance of a guaranty from a Guarantor of
the Indebtedness or of any of the Obligations or any of the transactions
contemplated by this Mortgage, then Mortgagor will immediately reimburse or pay
to Mortgagee all of the expenses which have been or may be incurred by Mortgagee
with respect to the foregoing (including reasonable counsel fees and
disbursements), together with interest thereon at the Default Rate, and as
further provided in
<PAGE> 32
31
the "Protected Advances" Section Below, any such sum and the interest thereon
shall be a lien on the Mortgaged Property, prior to any right, or title to,
interest in or claim upon the Mortgaged Property attaching or accruing
subsequent to the lien of this Mortgage, and shall be deemed to be secured by
this Mortgage. In any action or proceeding to foreclose this Mortgage, or to
recover or collect the Indebtedness, the provisions of law respecting the
recovering of costs, disbursements and allowances shall prevail unaffected by
this covenant.
(c) Mortgagor shall indemnify and hold harmless Mortgagee and
Mortgagee's affiliates, and the respective directors, officers, agents and
employees of Mortgagee and its affiliates from and against all claims, damages,
losses and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) arising out of or based upon any matter related to this
Mortgage, the Mortgaged Property or the occupancy, ownership, maintenance or
management of the Mortgaged Property by Mortgagor, including, without
limitation, any claims based on the alleged acts or omissions of any employee or
agent of Mortgagor. This indemnification shall be in addition to any other
liability which Mortgagor may otherwise have to Mortgagee.
37 Successors and Assigns. All covenants of Mortgagor
contained in this Mortgage are imposed solely and exclusively for the benefit of
Mortgagee and its successors and assigns, and no other person or entity shall
have standing to require compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Mortgagee at any time if in its sole
discretion it deems such waiver advisable. All such covenants of Mortgagor shall
run with the land and bind Mortgagor, the successors and assigns of Mortgagor
(and each of them) and all subsequent owners, encumbrancers and tenants of the
Mortgaged Property, and shall inure to the benefit of Mortgagee, its successors
and assigns. The word "Mortgagor" shall be construed as if it read "Mortgagors"
whenever the sense of this Mortgage so requires and if there shall be more than
one Mortgagor, the obligations of the Mortgagors shall be joint and several.
38 No Waivers, etc. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor.
Mortgagee may release, regardless of consideration and without the necessity for
any notice to or consent by the holder of any subordinate lien on the Mortgaged
Property, any part of the security held for the obligations secured by this
Mortgage without, as to the remainder of the security, in anywise impairing or
affecting the lien of this Mortgage or the priority of such lien over any
subordinate lien.
<PAGE> 33
32
39 Governing Law, etc. This Mortgage shall be governed by and
construed and interpreted in accordance with the laws of the State of Ohio.
Mortgagor hereby irrevocably agrees that any legal action, suit, or proceeding
against it with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Mortgage or the other Loan
Documents or for recognition or enforcement of any judgment rendered in any such
action, suit or proceeding may be brought in any of the courts of the State of
Ohio, as Mortgagee may elect, and, by execution and delivery of this Mortgage,
Mortgagor hereby irrevocably accepts and submits to the non-exclusive
jurisdiction of each of the aforesaid courts in persona, generally and
unconditionally with respect to any such action, suit or proceeding for itself
and in respect of its property. Mortgagor further agrees that final judgment
against it in any action, suit, or proceeding referred to herein shall be
conclusive and may be enforced in any other jurisdiction, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of its indebtedness.
40 Waiver of Trial by Jury. Mortgagor and Mortgagee each
hereby irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Mortgage and for any counterclaim brought
therein. Mortgagor hereby waives all rights to interpose any counterclaim in any
suit brought by Mortgagee hereunder and all rights to have any such suit
consolidated with any separate suit, action or proceeding.
41 Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form and the
word "Mortgagor" shall mean "each Mortgagor or any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein," the word
"Mortgagee" shall mean "Mortgagee or any subsequent holder of the Note," the
word "Note" shall mean "the Note or any other evidence of indebtedness secured
by this Mortgage," the word "person" shall include any individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, or other entity, and the words "Mortgaged Property" shall include any
portion of the Mortgaged Property or interest therein. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa. The captions in this Mortgage are for
convenience or reference only and in no way limit or amplify the provisions
hereof.
42 Protective Advances. Mortgagee shall have the right, but
not the obligation, to make protective advances with respect to the Mortgaged
Property for the payment of taxes, assessments, insurance premiums, repairs,
maintenance and other costs incurred in the protection of the Mortgaged Property
as contemplated by Section 5301.233 of the Ohio Revised Code, and such
protective advances, together with interest thereon at the Default Rate from the
date of each such advance until it is repaid in full, shall be secured by this
Mortgage to the fullest extent and with the highest priority contemplated by
such Section 5301.233.
<PAGE> 34
33
43 Mortgagee's Rights Under Mechanics' Lien Laws Mortgagee is
hereby authorized and empowered, at its option, to do as Mortgagee all things
provided in the mechanics' lien laws of Ohio, including without limitation,
Section 1311.14 of the Ohio Revised Code, and all amendments and supplements
thereto.
This Mortgage has been duly executed by Mortgagor on the date
first above written.
GLIMCHER PROPERTIES LIMITED
PARTNERSHIP
By: Glimcher Properties Corporation, general
partner
By: /s/ William G. Cornely
---------------------------------------------
Name: William G. Cornely
Its: Senior Executive Vice President, Chief
Financial Officer and Chief Operating Officer
<PAGE> 35
STATE OF OHIO )
) ss.:
COUNTY OF FRANKLIN )
On this 4th day of November, 1998, before me personally came
William G. Cornely, to me known, who, being by me duly sworn, did depose and say
the he resides at 20 South Third Street, Columbus, Ohio; that he is the Senior
Executive Vice President, CFO/COO of Glimcher Properties Corporation, the
corporation described in and which executed the foregoing instrument as a
general partner of Glimcher Properties Limited Partnership; and that he signed
his name thereto by the authority of the board of directors of said corporation.
/s/ Andrea L. Turner
-------------------------------
Notary Public
[Notarial Stamp]
<PAGE> 36
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
<PAGE> 1
Exhibit 10.83
[Kansas]
MORTGAGE
from
GLIMCHER PROPERTIES LIMITED PARTNERSHIP, Mortgagor
to
BANKERS TRUST COMPANY, Mortgagee
DATED AS OF OCTOBER 30, 1998
After recording, please return to:
Simpson Thacher & Bartlett
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Daniel Karp, Esq.
<PAGE> 2
[Kansas]
MORTGAGE
THIS MORTGAGE, dated as of October 30, 1998, is made by
GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership
("Mortgagor"), whose address is 20 South Third Street, Columbus, Ohio 43215, to
BANKERS TRUST COMPANY ("Mortgagee"), whose address is 130 Liberty Street, New
York, New York 10006. References to this "Mortgage" shall mean this instrument
and any and all renewals, modifications, amendments, supplements, extensions,
consolidations, substitutions, spreaders and replacements of this instrument.
Background
Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with all of the
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "Improvements"), being collectively referred to as the "Real
Estate"). Mortgagor and the general partner of Mortgagor is the maker of a note
(as the same may be amended, supplemented, modified, extended, restated or
replaced from time to time, the "Note"), dated as of September 15, 1998, made
payable to Mortgagee in the amount of $10,000,000. The Note bears interest at
the rate stated in the Note; references in this Mortgage to the "Default Rate"
shall have the meaning given to such term in the Note.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the
Note, and (ii) all interest and fees payable thereon (the items set
forth in clauses (i) and (ii) being referred to collectively as the
"Indebtedness"); and
(b) the performance of all covenants, agreements, obligations
and liabilities (the "Obligations") of GPLP under or pursuant to the
provisions of the Note, and of Mortgagor under this Mortgage, any other
document securing payment of the Indebtedness (the "Security
Documents") and any amendments, supplements, extensions, renewals,
restatements, replacements or modifications of any of the foregoing
(the Note, the Security Documents and all other documents and
instruments
<PAGE> 3
2
from time to time evidencing, securing or guaranteeing the payment of
the Indebtedness or the performance of the Obligations, as any of the
same may be amended, supplemented, extended, renewed, restated,
replaced or modified from time to time, are collectively referred to as
the "Loan Documents");
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Mortgagor, in possession or expectancy, in and to the Real Estate or
any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and
riparian rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents, issues, profits
and revenue thereof and all land lying in the bed of any street, road
or avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) all of the fixtures, chattels, business machines,
machinery, apparatus, equipment, furnishings, fittings and articles of
personal property of every kind and nature whatsoever, and all
appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts
and accessories) currently owned or subsequently acquired by Mortgagor
and now or subsequently attached to, or contained in or used or usable
in any way in connection with any operation or letting of the Real
Estate, including but without limiting the generality of the foregoing,
all screens, awnings, shades, blinds, curtains, draperies, artwork,
carpets, rugs, storm doors and windows, furniture and furnishings,
heating, electrical, and mechanical equipment, lighting, switchboards,
plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems,
motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description (all of the
foregoing in this paragraph (D) being referred to as the "Equipment");
<PAGE> 4
3
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Mortgagor or constructed, assembled or placed by Mortgagor on the
Real Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials whether stored at the Real Estate or offsite, and,
in each such case, without any further mortgage, conveyance, assignment
or other act by Mortgagor;
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "Leases"), and all
rights of Mortgagor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Mortgaged Property (as defined below)
(collectively, the "Rents");
(G) all trade names, trade marks, logos, copyrights, good will
and books and records relating to or used in connection with the
operation of the Real Estate or the Equipment or any part thereof; all
general intangibles related to the operation of the Improvements now
existing or hereafter arising;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's interest in and to all proceeds of any such
insurance policies (including title insurance policies) including the
right to collect and receive such proceeds, subject to the provisions
relating to insurance generally set forth below; and all awards and
other compensation, including the interest payable thereon and the
right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or Equipment for the taking by
eminent domain, condemnation or otherwise, of all or any part of the
Real Estate or any easement or other right therein;
(I) all right, title and interest of Mortgagor in and to (i)
all contracts from time to time executed by Mortgagor or any manager or
agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the
Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or
any property which is adjacent or
<PAGE> 5
4
peripheral to the Real Estate, together with the right to exercise such
options and all leases of Equipment (collectively, the "Contracts"),
(ii) all consents, licenses, building permits, certificates of
occupancy and other governmental approvals relating to construction,
completion, occupancy, use or operation of the Real Estate or any part
thereof (collectively, the "Permits") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage; all capital, operating, reserve
or similar accounts held by or on behalf of Mortgagor and related to
the operation of the Mortgaged Property, whether now existing or
hereafter arising and all monies held in any of the foregoing accounts
and any certificates or instruments related to or evidencing such
accounts;
(K) all accounts and revenues arising from the operation of
the Improvements including, without limitation, (i) any right to
payment now existing or hereafter arising for rental of hotel rooms or
other space or for goods sold or leased or for services rendered,
whether or not yet earned by performance, arising from the operation of
the Improvements or any other facility on the Mortgaged Property and
(ii) all rights to payment from any consumer credit-charge card
organization or entity including, without limitation, payments arising
from the use of the American Express Card, the Visa Card, the Carte
Blanche Card, the Mastercard or any other credit card, including those
now existing or hereafter created, substitutions therefor, proceeds
thereof (whether cash or non-cash, movable or immovable, tangible or
intangible) received upon the sale, exchange, transfer, collection or
other disposition or substitution thereof and any and all of the
foregoing and proceeds therefrom; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through (L) are
collectively referred to as the "Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
<PAGE> 6
5
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants the title to the
Premises, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Mortgagee to insure the lien
of this Mortgage (the "Permitted Exceptions").
2. Intentionally Deleted..
3. Requirements.
(a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall
not by act or omission permit any building or other improvement on any premises
not subject to the lien of this Mortgage to rely on the Premises or any part
thereof or any interest therein to fulfill any Legal Requirement, and Mortgagor
hereby assigns to Mortgagee any and all rights to give consent for all or any
portion of the Premises or any interest therein to be so used. Mortgagor shall
not by act or omission impair the integrity of any of the Real Estate as a
single zoning lot separate and apart from all other premises. Mortgagor
represents that each parcel of the Real Estate constitutes a legally subdivided
lot, in compliance with all subdivision laws and similar Legal Requirements. Any
act or omission by Mortgagor which would result in a violation of any of the
provisions of this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Promptly when
due, Mortgagor shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes), all
charges for any easement or agreement maintained for the
<PAGE> 7
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benefit of any of the Mortgaged Property, all general and special assessments,
levies, permits, inspection and license fees, all water and sewer rents and
charges, vault taxes, and all other public charges even if unforeseen or
extraordinary, imposed upon or assessed against or which may become a lien on
any of the Mortgaged Property, or arising in respect of the occupancy, use or
possession thereof, together with any penalties or interest on any of the
foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Upon request by Mortgagee, Mortgagor shall deliver to Mortgagee
(i) original or copies of receipted bills and canceled checks evidencing payment
of such Imposition if it is a real estate tax or other public charge and (ii)
evidence acceptable to Mortgagee showing the payment of any other such
Imposition. If by law any Imposition, at Mortgagor's option, may be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Mortgagor may elect to pay such Imposition in such installments and
shall be responsible for the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such Imposition shall have
become due. Any sums paid by Mortgagee in discharge of any Impositions shall be
payable on demand by Mortgagor to Mortgagee together with interest at the
Default Rate.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any taxes assessed against the Mortgaged Property
or any part thereof, and shall not claim any deduction from the taxable value of
the Mortgaged Property by reason of this Mortgage.
(d) Mortgagor shall have the right before any delinquency
occurs to contest or object in good faith to the amount or validity of any
Imposition by appropriate legal proceedings, but such right shall not be deemed
or construed in any way as relieving, modifying, or extending Mortgagor's
covenant to pay any such Imposition at the time and in the manner provided in
this Section unless (i) Mortgagor has given prior written notice to Mortgagee of
Mortgagor's intent so to contest or object to an Imposition, (ii) Mortgagor
shall demonstrate to Mortgagee's satisfaction that the legal proceedings shall
operate conclusively to prevent the sale of the Mortgaged Property, or any part
thereof, to satisfy such Imposition prior to final determination of such
proceedings and (iii) Mortgagor shall furnish a good and sufficient bond or
surety as requested by and reasonably satisfactory to Mortgagee in the amount of
the Impositions which are being contested plus any interest and penalty which
may be imposed thereon and which could become a lien against the Real Estate or
any part of the Mortgaged Property.
5. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on all of the Premises
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(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss. The policy shall include building ordinance law
endorsements and the policy limits shall be automatically reinstated
after each loss;
(ii) comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), covering all claims for personal injury,
bodily injury or death, or property damage occurring on, in or about
the Premises in an amount not less than $10,000,000 combined single
limit with respect to injury and property damage relating to any one
occurrence plus such excess limits as Mortgagee shall request from time
to time;
(iii) when and to the extent required by Mortgagee, insurance
against loss or damage by any other risk commonly insured against by
persons occupying or using like properties in the locality or
localities in which the Real Estate is situated;
(iv) insurance against rent loss, extra expense or business
interruption (and/or soft costs, in the case of new construction), if
applicable, in amounts satisfactory to Mortgagee, but not less than one
year's gross rent or gross income;
(v) during the course of any construction or repair of
Improvements, comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), (including coverage for elevators and
escalators, if any). The policy shall include coverage for independent
contractors and completed operations. The completed operations coverage
shall stay in effect for two years after construction of any
Improvements has been completed. The policy shall provide coverage on
an occurrence basis against claims for personal injury, including,
without limitation, bodily injury, death or property damage occurring
on, in or about the Premises and the adjoining streets, sidewalks and
passageways, such insurance to afford immediate minimum protection to a
limit of not less than that required by Mortgagee with respect to
personal injury, bodily injury or death to any one or more persons or
damage to property;
(vi) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Mortgagor engaged on or with
respect to the Premises in such amounts as are reasonably satisfactory
to Mortgagee, but in no event less than the limits established by law;
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(vii) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed
value form insurance against "all risks of physical loss," including
collapse, water damage, flood and earthquake and transit coverage,
during construction or repairs of the Improvements, with deductible
approved by Mortgagee, in nonreporting form, covering the total value
of work performed and equipment, supplies and materials furnished (with
an appropriate limit for soft costs in the case of construction);
(viii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping,
heating, air conditioning and elevator equipment and escalator
equipment, provided the Improvements contain equipment of such nature,
and insurance against rent, extra expense, business interruption and
soft costs, if applicable, arising from any such breakdown, in such
amounts as are reasonably satisfactory to Mortgagee but not less than
the lesser of $1,000,000 or 10% of the value of the Improvements;
(ix) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, flood insurance in an
amount satisfactory to Mortgagee, but in no event less than the maximum
limit of coverage available under the National Flood Insurance Act of
1968, as amended; and
(x) such other insurance in such amounts as Mortgagee may
reasonably request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be canceled, non-renewed or materially
amended without 30-days' prior written notice to Mortgagee, and (ii) with
respect to all property insurance, provide for deductibles not to exceed
$100,000, contain a "Replacement Cost Endorsement" without any deduction made
for depreciation and with no co-insurance penalty (or attaching an agreed amount
endorsement satisfactory to Mortgagee), with loss payable solely to Mortgagee
(modified, if necessary, to provide that proceeds in the amount of replacement
cost may be retained by Mortgagee without the obligation to rebuild) as its
interest may appear, without contribution, under a "standard" or "New York"
mortgagee clause acceptable to Mortgagee and be written by insurance companies
having an A.M. Best Company, Inc. rating of A or higher and a financial size
category of not less than XII, or otherwise as approved by Mortgagee. Liability
insurance policies shall name Mortgagee as an additional insured and contain a
waiver of subrogation against Mortgagee; all such policies shall indemnify and
hold Mortgagee harmless from all liability claims occurring on, in or about the
Premises and the adjoining streets, sidewalks and passageways. The amounts of
each insurance policy and the form of each such policy shall at all times be
satisfactory to Mortgagee. Each policy shall expressly provide that any proceeds
<PAGE> 10
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which are payable to Mortgagee shall be paid by check payable to the order of
Mortgagee only and requiring the endorsement of Mortgagee only. If any required
insurance shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the capital of
any insurer, or if for any other reason whatsoever such insurance shall become
unsatisfactory to Mortgagee, Mortgagor shall immediately obtain new or
additional insurance satisfactory to Mortgagee. Mortgagor shall not take out any
separate or additional insurance which is contributing in the event of loss
unless it is properly endorsed and otherwise satisfactory to Mortgagee in all
respects.
(b) Mortgagor shall deliver to Mortgagee an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Mortgagee, together with a copy of the declaration page for each
such policy. Mortgagor shall (i) pay as they become due all premiums for such
insurance, (ii) not later than 15 days prior to the expiration of each policy to
be furnished pursuant to the provisions of this Section, deliver a renewed
policy or policies, or duplicate original or originals thereof, marked "premium
paid," or accompanied by such other evidence of payment satisfactory to
Mortgagee with standard non-contributory mortgage clauses in favor of and
acceptable to Mortgagee. Upon request of Mortgagee, Mortgagor shall cause its
insurance underwriter or broker to certify to Mortgagee in writing that all the
requirements of this Mortgage governing insurance have been satisfied.
(c) If Mortgagor is in default of its obligations to insure or
deliver any such prepaid policy or policies, then Mortgagee, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Mortgagor shall pay to Mortgagee on demand such
premium or premiums so paid by Mortgagee with interest from the time of payment
at the Default Rate.
(d) Mortgagor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12 months
from the date of this Mortgage and each successive 12 month period to occur
thereafter) by using the F.W. Dodge Building Index or an equivalent index to
determine whether there shall have been an increase in the replacement value
since the most recent adjustment and, if there shall have been such an increase,
the amount of insurance required shall be adjusted accordingly.
(e) Mortgagor promptly shall comply with and conform to (i)
all provisions of each such insurance policy, and (ii) all requirements of the
insurers applicable to Mortgagor or to any of the Mortgaged Property or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. Mortgagor shall not use or permit the
use of the Mortgaged Property in any manner which would permit any insurer to
cancel any insurance policy or void coverage required to be maintained by this
Mortgage.
<PAGE> 11
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(f) If the Mortgaged Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Mortgagor for any personal
injury, bodily injury or property damage incurred on or about the Premises,
Mortgagor shall give immediate notice thereof to Mortgagee. If the Mortgaged
Property is damaged by fire or other casualty and the cost to repair such damage
is less than the lesser of (i) 15% of the replacement cost of the Improvements
at the affected Real Estate site and (ii) $300,000, then provided that no Event
of Default shall have occurred and be continuing, Mortgagor shall have the right
to adjust such loss, and the insurance proceeds relating to such loss may be
paid over to Mortgagor; provided that Mortgagor shall, promptly after any such
damage, repair all such damage regardless of whether any insurance proceeds have
been received or whether such proceeds, if received, are sufficient to pay for
the costs of repair. If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds the above limit, or if an
Event of Default shall have occurred and be continuing, then Mortgagor
authorizes and empowers Mortgagee, at Mortgagee's option and in Mortgagee's sole
discretion, as attorney-in-fact for Mortgagor, to make proof of loss, to adjust
and compromise any claim under any insurance policy, to appear in and prosecute
any action arising from any policy, to collect and receive insurance proceeds
and to deduct therefrom Mortgagee's expenses incurred in the collection process.
Each insurance company concerned is hereby authorized and directed to make
payment for such loss directly to Mortgagee. Mortgagee shall have the right to
require Mortgagor to repair or restore the Mortgaged Property, and Mortgagor
hereby designates Mortgagee as its attorney-in-fact for the purpose of making
any election required or permitted under any insurance policy relating to repair
or restoration. The insurance proceeds or any part thereof received by Mortgagee
may be applied by Mortgagee toward reimbursement of all costs and expenses of
Mortgagee in collecting such proceeds, and the balance: (i) providing that no
Event of Default shall have occurred and is continuing, shall be made available
to Mortgagor for purposes of restoration or repair of the property damaged; or
(ii) should an Event of Default have occurred and be continuing, at Mortgagee's
option in its sole and absolute discretion, to the principal (to the
installments in inverse order of maturity, if payable in installments) and
interest due or to become due under the Note, to fulfill any other Obligation of
Mortgagor, to the restoration or repair of the property damaged, or released to
Mortgagor. In the event Mortgagee elects to release such proceeds to Mortgagor,
Mortgagor shall be obligated to use such proceeds to restore or repair the
Mortgaged Property. Application by Mortgagee of any insurance proceeds toward
the last maturing installments of principal and interest due or to become due
under the Note shall not excuse Mortgagor from making any regularly scheduled
payments due thereunder, nor shall such application extend or reduce the amount
of such payments.
(g) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any insurance
policies then in force shall pass to the purchaser or grantee
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and Mortgagor hereby appoints Mortgagee its attorney-in-fact, in Mortgagor's
name, to assign and transfer all such policies and proceeds to such purchaser or
grantee.
(h) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
Mortgagor; provided, however, that (A) any such policy shall specify, or
Mortgagor shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Mortgaged Property and
any sublimits in such blanket policy applicable to the Premises and the other
Mortgaged Property, (B) each such blanket policy shall include an endorsement
providing that, in the event of a loss resulting from an insured peril,
insurance proceeds shall be allocated to the Mortgaged Property in an amount
equal to the coverages required to be maintained by Mortgagor as provided above
and (C) the protection afforded under any such blanket policy shall be no less
than that which would have been afforded under a separate policy or policies
relating only to the Mortgaged Property.
6. Restrictions on Liens and Encumbrances. Except for the lien
of this Mortgage and the Permitted Exceptions, Mortgagor shall not further
mortgage, nor otherwise encumber the Mortgaged Property nor create or suffer to
exist any lien, charge or encumbrance on the Mortgaged Property, or any part
thereof, whether superior or subordinate to the lien of this Mortgage and
whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Mortgagor
shall not sell, transfer, convey or assign all or any portion of, or any
interest in, the Mortgaged Property.
8. Limitation on Fundamental Changes. Mortgagor agrees that:
(i) if Mortgagor is a partnership, Mortgagor shall not
dissolve or terminate or materially amend the terms of its partnership
agreement; and
(ii) Mortgagor shall not enter into any transaction of merger
or consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or acquire by purchase or otherwise all or
substantially all the business or assets of, or any stock or other
evidence of beneficial ownership of, any entity.
9. Maintenance; No Alteration; Inspection; Utilities. (a)
Mortgagor shall maintain or cause to be maintained all the Improvements in good
condition and repair and shall not commit or suffer any waste of the
Improvements. Mortgagor shall repair, restore, replace or rebuild promptly any
part of the Premises which may be damaged or destroyed by any casualty
whatsoever. The Improvements shall not be demolished or materially altered, nor
any material additions built, without the prior written consent of Mortgagee.
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(b) Mortgagee and any persons authorized by Mortgagee shall
have the right to enter and inspect the Premises and the right to inspect all
work done, labor performed and materials furnished in and about the Improvements
and the right to inspect and make copies of all books, contracts and records of
Mortgagor relating to the Mortgaged Property.
(c) Mortgagor shall pay or cause to be paid when due all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
10. Condemnation/Eminent Domain. Immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's
option and in Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to
commence, appear in and prosecute, in Mortgagee's or Mortgagor's name, any
action or proceeding relating to any condemnation of the Mortgaged Property, or
any portion thereof, and to settle or compromise any claim in connection with
such condemnation. If Mortgagee elects not to participate in such condemnation
proceeding, then Mortgagor shall, at its expense, diligently prosecute any such
proceeding and shall consult with Mortgagee, its attorneys and experts and
cooperate with them in any defense of any such proceedings. All awards and
proceeds of condemnation shall be assigned to Mortgagee to be applied in the
same manner as insurance proceeds, as provided above, and Mortgagor agrees to
execute any such assignments of all such awards as Mortgagee may request.
11. Restoration. At any time when Mortgagee releases funds to
Mortgagor for restoration of any of the Mortgaged Property, then such
restoration shall be performed only in accordance with the following conditions:
(i) prior to the commencement of any restoration, the plans
and specifications for such restoration, and the budgeted costs, shall
be submitted to and approved by Mortgagee;
(ii) prior to making any advance of restoration funds,
Mortgagee shall be satisfied that the remaining restoration funds are
sufficient to complete the restoration and to pay all related expenses,
including interest on the Indebtedness and real estate taxes on the
Premises, during restoration;
(iii) at the time of any disbursement of the restoration
funds, (A) no Default (as defined below) shall then exist, (B) no
mechanics' or materialmen's liens shall have been filed and remain
undischarged, except those discharged by the disbursement of the
requested restoration funds and (C) a satisfactory bring-down or
continuation of title insurance on the Premises shall be delivered to
Mortgagee;
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(iv) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of satisfactory evidence of the stage of
completion and of performance of the work in a good and workmanlike
manner and in accordance with the contracts, plans and specifications
acceptable to Mortgagee;
(v) with respect to each advance of restoration funds,
Mortgagee may retain 10% of the amount of such advance as a holdback
until the restoration is fully completed;
(vi) the restoration funds shall bear no interest and may be
commingled with Mortgagee's other funds;
(vii) Mortgagee may impose such other conditions as are
customarily imposed by construction lenders; and
(viii) any restoration funds remaining shall be retained by
Mortgagee and may be applied by Mortgagee, in its sole discretion, to
the Indebtedness in the inverse order of maturity.
12. Leases. (a) Mortgagor shall not (i) execute an assignment
or pledge of any Lease relating to all or any portion of the Mortgaged Property
other than in favor of Mortgagee, or (ii) without the prior written consent of
Mortgagee, execute any new Lease for space in excess of 10,000 square feet.
(b) As to any existing or new Lease Mortgagor shall:
(i) promptly perform all of the provisions of the Lease on the
part of the lessor thereunder to be performed;
(ii) promptly enforce all of the provisions of the Lease on
the part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Mortgagor as lessor or of the lessee thereunder;
(iv) exercise, within 5 days after a request by Mortgagee, any
right to request from the lessee a certificate with respect to the
status thereof;
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(v) simultaneously deliver to Mortgagee copies of any notices
of default which Mortgagor may at any time forward to or receive from
the lessee;
(vi) upon request, promptly deliver to Mortgagee a fully
executed counterpart of the Lease; and
(vii) promptly deliver to Mortgagee, upon Mortgagee's request,
an assignment of the Mortgagor's interest under such Lease.
(c) Mortgagor shall deliver to Mortgagee, within 10 days after
a request by Mortgagee, a written statement, certified by Mortgagor as being
true, correct and complete, containing the names of all lessees and other
occupants of the Mortgaged Property, the terms of all Leases and the spaces
occupied and rentals payable thereunder, and a list of all Leases which are then
in default, including the nature and magnitude of the default; such statement
shall be accompanied by credit information with respect to the lessees and such
other information as Mortgagee may reasonably request.
(d) All Leases entered into by Mortgagor after the date
hereof, if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage unless
Mortgagee shall otherwise elect in writing.
(e) As to any existing or new Lease for space in excess of
10,000 square feet, Mortgagor shall not accept a surrender or terminate, cancel,
rescind, supplement, alter, revise, modify or amend such Lease or permit any
such action to be taken without the prior written consent of Mortgagee. As to
any exiting or new Lease, Mortgagor shall not accept the payment of rent more
than thirty (30) days in advance of its due date.
(f) If any act or omission of Mortgagor would give any lessee
under any Lease the right, immediately or after lapse of a period of time, to
cancel or terminate such Lease, or to abate or offset against the payment of
rent or to claim a partial or total eviction, such lessee shall not exercise
such right until it has given written notice of such act or omission to
Mortgagee and until a reasonable period for remedying such act or omission shall
have elapsed following the giving of such notice without a remedy being
effected.
(g) In the event of the enforcement by Mortgagee of any remedy
under this Mortgage, the lessee under each Lease shall, if requested by
Mortgagee or any other person succeeding to the interest of Mortgagee as a
result of such enforcement, attorn to Mortgagee or to such person and shall
recognize Mortgagee or such successor in interest as lessor under the Lease
without change in the provisions thereof; provided however, that Mortgagee or
such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
modification to the Lease made without the
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consent of Mortgagee or such successor in interest; (iii) liable for any
previous act or omission of Mortgagor (or its predecessors in interest); (iv)
responsible for any monies owing by Mortgagor to the credit of such lessee or
subject to any credits, offsets, claims, counterclaims, demands or defenses
which the lessee may have against Mortgagor (or its predecessors in interest);
(v) bound by any covenant to undertake or complete any construction of the
Premises or any portion thereof; or (vi) obligated to make any payment to such
lessee other than any security deposit actually delivered to Mortgagee or such
successor in interest. Each lessee or other occupant, upon request by Mortgagee
or such successor in interest, shall execute and deliver an instrument or
instruments confirming such attornment. In addition, Mortgagor agrees that each
Lease entered into after the date of this Mortgage shall include language to the
effect of subsections (d)-(g) of this Section; provided that the provisions of
such subsections shall be self-operative and any failure of any Lease to include
such language shall not impair the binding effect of such provisions on any
lessee under such Lease.
13. Further Assurances/Estoppel Certificates. To further
assure Mortgagee's rights under this Mortgage, Mortgagor agrees upon demand of
Mortgagee to do any act or execute any additional documents (including, but not
limited to, security agreements on any personalty included or to be included in
the Mortgaged Property and a separate assignment of each Lease in recordable
form) as may be required by Mortgagee to confirm the lien of this Mortgage and
all other rights or benefits conferred on Mortgagee. Mortgagor, within 5
business days after request, shall deliver, in form and substance satisfactory
to Mortgagee, a written statement, duly acknowledged, setting forth the amount
of the Indebtedness, and whether any offsets, claims, counterclaims or defenses
exist against the Indebtedness and certifying as to such other matters as
Mortgagee shall reasonably request.
14. Mortgagee's Right to Perform. If Mortgagor fails to
perform any of the covenants or agreements of Mortgagor, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage, may, at any time (but shall be under no obligation to) pay or perform
the same, and the amount or cost thereof, with interest at the Default Rate,
shall immediately be due from Mortgagor to Mortgagee. To the extent that any
such amounts or costs paid by Mortgagee shall constitute payment of (i)
Impositions; (ii) premiums on insurance policies covering the Premises; (iii)
expenses incurred in upholding or enforcing the lien of this Mortgage,
including, but not limited to the expenses of any litigation to prosecute or
defend the rights and lien created by this Mortgage; (iv) costs of removal of or
otherwise related to Hazardous Materials (as defined below) or asbestos; or (v)
any amount, costs or charge to which Mortgagee becomes subrogated, upon payment,
whether under recognized principles of law or equity, or under express statutory
authority; then, and in each such event, such amounts or costs, together with
interest thereon at the Default Rate, shall be added to the Indebtedness and
shall be secured by this Mortgage and shall be a lien on the Mortgaged Property
prior to any right, title to, interest in, or claim upon the Mortgaged Property
attaching subsequent to the lien of this Mortgage. No payment or advance of
money
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by Mortgagee under this Section shall be deemed or construed to cure Mortgagor's
default or waive any right or remedy of Mortgagee.
15. Mortgagor's Existence, etc. Mortgagor shall do all things
necessary to preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state in which it was
formed and its right to own property and transact business in each state in
which the Real Estate is located. Mortgagor represents and warrants that
Mortgagor is a duly organized and validly existing corporation or general or
limited partnership, as the case may be, in good standing, and this Mortgage has
been executed by a duly authorized partner or officer thereof, as applicable.
This Mortgage constitutes the legal, valid and binding obligation of Mortgagor,
enforceable against Mortgagor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
16. Financial Statements; Certificates; Other Information. (a)
Mortgagor shall deliver to Mortgagee (i) within 120 days after the end of each
of its fiscal years annual operating statements and a rent roll for the Premises
and a copy of Mortgagor's annual audited report, including a statement of
sources and uses of funds of Mortgagor as at the end of such year, and related
statements of income and retained earnings and changes in financial position for
such year, and (ii) within 90 days after the end of each of its fiscal quarters
(other than the last) quarterly operating statements and a rent roll for the
Premises as at the end of such quarter. The foregoing financial statements shall
be certified by the chief financial officer of or by a partner in Mortgagor, as
the case may be, and with respect to Mortgagor's annual financial statements,
also by a certified public accountant approved by Mortgagee. All financial
statements delivered to Mortgagee shall be true and correct in all respects,
shall be prepared in accordance with generally accepted accounting principles,
consistently applied, and fairly present the financial condition of the subject
as of the dates thereof and each of the operating statements shall be in
reasonable detail and include cash flow and any other information reasonably
requested by Mortgagee. Any materially adverse change that occurs in the
financial condition reflected therein after the date thereof shall be reported
to Mortgagee promptly. None of the financial statements, or any certificate or
statement furnished to Mortgagee by or on behalf of Mortgagor in connection with
the transactions contemplated hereby, shall contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
(b) Mortgagor shall furnish to Mortgagee:
<PAGE> 18
17
(i) concurrently with the delivery of the financial statements
referred to in subsection (a), a certificate of an executive officer or
of a partner of Mortgagor stating that, to the best of such person's
knowledge, after such examination or investigation as is necessary to
enable such person to make an informed judgment, Mortgagor during such
period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Mortgage
and all other documents evidencing, securing or relating to the
Indebtedness to be observed, performed or satisfied by it, and that
such person has obtained no knowledge of any Event of Default or any
event which with the giving of notice or passage of time, or both,
would constitute an Event of Default ("Default"), except as specified
in such certificate;
(ii) not later than 60 days prior to the end of each 12-month
period, commencing with the 12-month period ending on the date one year
from the date of this Mortgage, a copy of the projections by Mortgagor
of the operating budget and cash flow for the Premises for such
12-month period; and
(iii) promptly, such additional financial and other
information as Mortgagee may from time to time reasonably request.
17. Notice of Certain Occurrences. Mortgagor shall give notice
to Mortgagee promptly upon the occurrence of:
(a) any Default or Event of Default;
(b) any (i) default or event of default under any provision of
any security issued by or any agreement, instrument or undertaking of Mortgagor
or which binds Mortgagor or any property thereof (collectively, "Contractual
Obligations") or (ii) litigation, investigation or proceeding which may exist at
any time between Mortgagor and any Governmental Authority, which, with respect
to both clauses (i) and (ii), could have a material adverse effect on the
business, operations, property or financial or other condition of Mortgagor;
(c) any litigation or proceeding affecting Mortgagor or the
Mortgaged Property or any part thereof in which the amount involved is $250,000
or more and not fully covered by insurance or in which injunctive or similar
relief is sought; and
(d) a material adverse change in the business, operations,
property or financial or other condition of Mortgagor or the Mortgaged Property
or any part thereof.
18 Hazardous Material. (a) Neither Mortgagor nor, to the best
knowledge of Mortgagor, any other person has ever caused or permitted, in
violation of any Legal Requirement, any Hazardous Material (as defined below) to
be placed, held, located or
<PAGE> 19
18
disposed of on, under or at the Premises, or any part thereof, and the Premises
have never been used (whether by Mortgagor or, to the best knowledge of
Mortgagor, by any other person, including any tenant) as a dump site or storage
(whether permanent or temporary) site for any Hazardous Material, in violation
of any Legal Requirement.
(b) Mortgagor represents that (i) to the best of Mortgagor's
knowledge, the Premises are free of all Hazardous Material that are in violation
of any Legal Requirement and (ii) neither the Premises nor any site within the
vicinity of the Premises is or has been adversely affected by any Hazardous
Material or is in violation of any applicable Legal Requirement of any
Governmental Authority regulating, relating to, or imposing liability or
standards of conduct concerning Hazardous Material.
(c) Mortgagor shall comply with any and all applicable Legal
Requirements governing the discharge and removal of Hazardous Material, shall
pay immediately when due the costs of removal of any Hazardous Material, and
shall keep the Premises free of any lien imposed pursuant to such Legal
Requirements. In the event Mortgagor fails to do so, after notice to Mortgagor
and the expiration of the earlier of (i) applicable cure periods hereunder, or
(ii) the cure period permitted under the applicable Legal Requirement, Mortgagee
may declare such failure an Event of Default or cause the Premises to be freed
from the Hazardous Material and the cost of the removal with interest at the
Default Rate shall immediately be due from Mortgagor to Mortgagee. Mortgagor
further agrees not to release or dispose of any Hazardous Material at the
Premises without the express approval of Mortgagee and any such release or
disposal shall comply with all applicable Legal Requirements and any conditions
established by Mortgagee. In addition, Mortgagor agrees not to allow the
manufacture, storage, transmission, presence or disposal of any Hazardous
Material over or upon the Premises. Mortgagee shall have the right at any time
to conduct an environmental audit of the Premises and Mortgagor shall cooperate
in the conduct of such environmental audit. Mortgagor shall give Mortgagee and
its agents and employees access to the Premises to remove Hazardous Material.
Mortgagor agrees to defend, indemnify and hold Mortgagee free and harmless from
and against all loss, costs, damage and expense (including attorneys' fees and
costs and consequential damages) Mortgagee may sustain by reason of (i) the
imposition or recording of a lien by any Governmental Authority pursuant to any
Legal Requirement relating to hazardous or toxic wastes or substances or the
removal thereof ("Hazardous Material Laws"); (ii) claims of any private parties
regarding violations of Hazardous Material Laws; (iii) costs and expenses
(including, without limitation, attorneys' fees and fees incidental to the
securing of repayment of such costs and expenses) incurred by Mortgagor or
Mortgagee in connection with the removal of any such lien or in connection with
Mortgagor's or Mortgagee's compliance with any Hazardous Material Laws; and (iv)
the assertion against Mortgagee by any party of any claim in connection with
Hazardous Material.
(d) For the purposes of this Mortgage, "Hazardous Material"
means and includes any hazardous, nuclear, toxic or dangerous waste, substance
or material defined as
<PAGE> 20
19
such in (or for purposes of) the Comprehensive Environmental Response,
Compensation, and Liability Act, any so-called "Superfund" or "Superlien" law,
or any other Legal Requirement regulating, relating to, or imposing liability or
standards of conduct concerning, any hazardous, nuclear, toxic or dangerous
waste, substance or material, as now or at any time in effect.
(e) The foregoing indemnification shall survive repayment of
the Note, notwithstanding the delivery of any satisfaction, release or release
deed, discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.
19 Asbestos. Mortgagor shall not install or permit to be
installed in the Premises friable asbestos or any substance containing asbestos
and deemed hazardous by any Legal Requirement respecting such material, or any
other building material deemed to be harmful, hazardous or injurious by relevant
Legal Requirements and with respect to any such material currently present in
the Premises shall promptly either (a) remove any material which such Legal
Requirements deem harmful, hazardous or injurious and require to be removed or
(b) otherwise comply with such Legal Requirements, at Mortgagor's expense. If
Mortgagor shall fail to so remove or otherwise comply, Mortgagee may declare an
Event of Default and/or do whatever is necessary to eliminate such substances
from the Premises or otherwise comply with the applicable Legal Requirement, and
the costs thereof, with interest at the Default Rate, shall be immediately due
from Mortgagor to Mortgagee. Mortgagor shall give Mortgagee and its agents and
employees access to the Premises to remove such asbestos or substances.
Mortgagor shall defend, indemnify, and save Mortgagee harmless from all loss,
costs, damages and expense (including attorneys' fees and costs and
consequential damages) asserted or proven against Mortgagee by any party, as a
result of the presence of such substances or any removal or compliance with such
Legal Requirements. The foregoing indemnification shall survive repayment of the
Note, notwithstanding the delivery of any satisfaction, release or release deed,
discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.
20 Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default:
(a) an Event of Default shall occur under the Note;
(b) a failure to make payment of any other sums required to be
paid hereunder (including, without limitation, any Imposition) within
the period required by specific provision of this Mortgage or, if no
such period is so provided, by no later than three days after written
notice; or
(c) a failure (i) to keep in force the insurance required by
this Mortgage, or (ii) to comply with and conform to all provisions and
requirements of the insurance
<PAGE> 21
20
policies and the insurers thereunder which would affect Mortgagor's
ability to keep in force the insurance required by this Mortgage or to
collect any proceeds therefrom, or (iii) to comply with any other
material provisions of this Mortgage regarding insurance; or
(d) upon default, five business days after request, in
furnishing a statement of the outstanding amount secured by this
Mortgage and whether any offset or defense exists against the
Indebtedness; or
(e) upon the actual waste, removal or demolition of, or
material alteration to, any part of the Premises (other than necessary
replacements of worn or obsolete Equipment), or construction of any new
Improvements; or
(f) upon failure to comply promptly with any Legal Requirement
or order or notice of violation of law or ordinance issued by any
Governmental Authority having jurisdiction over the Premises, which
failure could materially adverse affect the Mortgaged Property; or
(g) if any representation or warranty made by Mortgagor in
this Mortgage shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(h) if any Obligor (as defined below) shall (i) default in any
payment of principal of or interest on any (A) indebtedness for
borrowed money in respect of which an Obligor is liable, contingently
or otherwise, as obligor, guarantor or otherwise, or in respect of
which such Obligor otherwise assures a creditor against loss or (B)
obligations under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as
capital leases for which obligations such Obligor is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or for
which obligations such Obligor assures a creditor against loss
(collectively referred to as "Debt") (other than the Note) beyond the
period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Debt was created; or (ii)
default in the observance or performance of any other agreement or
condition relating to any such Debt or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Debt (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, such Debt to become
due prior to its stated maturity; or
(i) if (i) Mortgagor or any Partner or any guarantor of
payment of all or any portion of the Indebtedness or performance of any
of the Obligations (a "Guarantor";
<PAGE> 22
21
Mortgagor, each Partner and each Guarantor being collectively referred
to as an "Obligor") shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
assets, or any Obligor shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against any Obligor
any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days (the events specified
in clauses (i) and (ii) of this subsection being referred to as
"Automatic Acceleration Defaults"); or (iii) there shall be commenced
against any Obligor any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets, which
results in the entry of an order for any such relief which shall not
have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) any Obligor shall take
any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clauses (i), (ii)
or (iii) above; or (v) any Obligor shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(j) if one or more judgments or decrees shall be entered
against any Obligor involving in the aggregate a liability (not paid or
fully covered by insurance) of $250,000 or more and all such judgments
or decrees shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or
(k) if any of the Mortgaged Property is damaged or destroyed
by an uninsured casualty and Mortgagor does not immediately provide
funds for the restoration of the damage caused by such casualty; or
(l) if Mortgagor shall further mortgage, pledge or otherwise
encumber the Mortgaged Property or any part thereof or any interest
therein or create or suffer to exist any lien, charge or other
encumbrance on the Mortgaged Property or any part thereof, whether
superior or subordinate to the lien of this Mortgage, whether recourse
or non-recourse; or
(m) if, except as permitted herein, Mortgagor shall (A) sell,
transfer, convey or assign the Mortgaged Property or any part thereof
or any interest therein (by
<PAGE> 23
22
operation of law or otherwise), or (B) lease any of the Mortgaged
Property without the prior written consent of Mortgagee;
(n) this Mortgage shall cease for any reason to be in full
force and effect or Mortgagor shall so assert in writing; or
(o) a failure of Mortgagor to duly perform and observe, or a
violation or breach of, any other terms, covenants, provisions or
conditions of this Mortgage and the continuation thereof for a 30-day
period after notice shall have been given to Mortgagor by Mortgagee
specifying such default and requiring such default be remedied; which
period may be extended to the extent required (but not longer than 180
days) if such default is not susceptible of cure within 30 days so long
as Mortgagor has commenced to cure such default within such 30-day
period and is thereafter diligently prosecuting such cure to completion
and so long as such delay is not likely to have a material adverse
effect on either the Mortgaged Property or Mortgagee's rights under
this Mortgage; provided, however, any such default that can be cured by
the payment of money shall be promptly cured after notice by Mortgagee.
21 Remedies.
(a) Upon the occurrence of any Event of Default, in addition
to any other rights and remedies Mortgagee may have pursuant to the
Loan Documents, or as provided by law, and without limitation, (a) if
such event is an Automatic Acceleration Default, automatically the
Indebtedness and all other amounts owing under the Note, this Mortgage
and the other Security Documents immediately shall become due and
payable, and (b) if such event is any other Event of Default, by notice
to Mortgagor, Mortgagee may declare the Indebtedness (together with
accrued interest thereon) and all other amounts payable under the Note,
this Mortgage and the other Security Documents to be immediately due
and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are
hereby expressly waived. In addition, upon the occurrence of any Event
of Default, Mortgagee may immediately 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, including, but
not limited to, the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such manner as Mortgagee
may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by
applicable law, (A) institute and maintain an action of
mortgage foreclosure against all or any part of the Mortgaged
Property, (B) institute and maintain an action on the Note,
(C) sell all or part of the Mortgaged Property (Mortgagor
expressly granting to
<PAGE> 24
23
Mortgagee the power of sale), or (D) take such other action at
law or in equity for the enforcement of this Mortgage or any
of the Loan Documents as the law may allow. Mortgagee may
proceed in any such action to final judgment and execution
thereon for all sums due hereunder, together with interest
thereon at the Default Rate and all costs of suit, including,
without limitation, reasonable attorneys' fees and
disbursements. Interest at the Default Rate shall be due on
any judgment obtained by Mortgagee from the date of judgment
until actual payment is made of the full amount of the
judgment.
(ii) Mortgagee may personally, or by its agents,
attorneys and employees and without regard to the adequacy or
inadequacy of the Mortgaged Property or any other collateral
as security for the Indebtedness and Obligations enter into
and upon the Mortgaged Property and each and every part
thereof and exclude Mortgagor and its agents and employees
therefrom without liability for trespass, damage or otherwise
(Mortgagor hereby agreeing to surrender possession of the
Mortgaged Property to Mortgagee upon demand at any such time)
and use, operate, manage, maintain and control the Mortgaged
Property and every part thereof. Following such entry and
taking of possession, Mortgagee shall be entitled, without
limitation, (x) to lease all or any part or parts of the
Mortgaged Property for such periods of time and upon such
conditions as Mortgagee may, in its discretion, deem proper,
(y) to enforce, cancel or modify any Lease and (z) generally
to execute, do and perform any other act, deed, matter or
thing concerning the Mortgaged Property as Mortgagee shall
deem appropriate as fully as Mortgagor might do.
(b) The holder of this Mortgage, in any action to foreclose
it, shall be entitled to the appointment of a receiver. In case of a
foreclosure sale, the Real Estate may be sold, at Mortgagee's election,
in one parcel or in more than one parcel and Mortgagee is specifically
empowered, (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the
Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and
notwithstanding to the contrary any exculpatory or non-recourse
language which may be contained herein, Mortgagee shall be entitled to
enjoin such breach and obtain specific performance of any covenant,
agreement, term or condition and Mortgagee shall have the right to
invoke any equitable right or remedy as though other remedies were not
provided for in this Mortgage.
22 Right of Mortgagee to Credit Sale. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial
<PAGE> 25
24
proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may
bid for and acquire the Mortgaged Property or any part thereof. In lieu of
paying cash therefor, Mortgagee may make settlement for the purchase price by
crediting upon the Indebtedness or other sums secured by this Mortgage the net
sales price after deducting therefrom the expenses of sale and the cost of the
action and any other sums which Mortgagee is authorized to deduct under this
Mortgage. In such event, this Mortgage, the Note and documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
23 Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property, and
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Mortgagee in case of entry as
provided in this Mortgage, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any part of the
Mortgaged Property, and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Mortgaged Property unless such
receivership is sooner terminated.
24 Extension, Release, etc. (a) Without affecting the lien or
charge of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure less
than all of the principal amount of the Indebtedness, it is expressly agreed
that any repayments of the principal amount of the Indebtedness shall not reduce
the amount of the lien of this Mortgage until the lien amount shall equal the
principal amount of the Indebtedness outstanding.
(b) 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 the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
<PAGE> 26
25
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien of
this Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid lien on the Mortgaged
Property for the amount secured hereby.
25 Security Agreement under Uniform Commercial Code. (a) It is
the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"Code") of the State of Kansas. If an Event of Default shall occur under this
Mortgage, then in addition to having any other right or remedy available at law
or in equity, Mortgagee shall have the option of either (i) proceeding under the
Code and exercising such rights and remedies as may be provided to a secured
party by the Code with respect to all or any portion of the Mortgaged Property
which is personal property (including, without limitation, taking possession of
and selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting the
Mortgaged Property in accordance with Mortgagee's rights, powers and remedies
with respect to the real property (in which event the default provisions of the
Code shall not apply). If Mortgagee shall elect to proceed under the Code, then
five days' notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited to,
attorneys' fees and legal expenses. At Mortgagee's request, Mortgagor shall
assemble the personal property and make it available to Mortgagee at a place
designated by Mortgagee which is reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; and (iv) the addresses of Mortgagor and Mortgagee are
as set forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time,
shall execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee, covering all or any part
of the Mortgaged Property and will further execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, any
<PAGE> 27
26
financing statement, affidavit, continuation statement or certificate or other
document as Mortgagee may request in order to perfect, preserve, maintain,
continue or extend the security interest under and the priority of this Mortgage
and such security instrument. Mortgagor further agrees to pay to Mortgagee on
demand all costs and expenses incurred by Mortgagee in connection with the
preparation, execution, recording, filing and re-filing of any such document and
all reasonable costs and expenses of any record searches for financing
statements Mortgagee shall reasonably require. Mortgagor shall from time to
time, on request of Mortgagee, deliver to Mortgagee an inventory in reasonable
detail of any of the Mortgaged Property which constitutes personal property. If
Mortgagor shall fail to furnish any financing or continuation statement within
10 days after request by Mortgagee, then pursuant to the provisions of the Code,
Mortgagor hereby authorizes Mortgagee, without the signature of Mortgagor, to
execute and file any such financing and continuation statements. The filing of
any financing or continuation statements in the records relating to personal
property or chattels shall not be construed as in any way impairing the right of
Mortgagee to proceed against any personal property encumbered by this Mortgage
as real property, as set forth above.
26 Assignment of Rents. Mortgagor hereby assigns to Mortgagee
the Rents as further security for the payment of the Indebtedness and
performance of the Obligations, and Mortgagor grants to Mortgagee the right to
enter the Mortgaged Property for the purpose of collecting the same and to let
the Mortgaged Property or any part thereof, and to apply the Rents on account of
the Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents and Mortgagor shall be entitled to collect, receive, use
and retain the Rents until the occurrence of an Event of Default under this
Mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate and
surrender the possession of the Mortgaged Property to Mortgagee or to such
receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any).
27 Trust Funds. (a) All lease security deposits of the Real
Estate in excess of $50,000 shall be treated as trust funds not to be commingled
with any other funds of Mortgagor. Within 10 days after request by Mortgagee,
Mortgagor shall furnish Mortgagee satisfactory evidence of compliance with this
subsection, together with a statement of all lease
<PAGE> 28
27
security deposits by lessees and copies of all Leases not previously delivered
to Mortgagee, which statement shall be certified by Mortgagor.
28 Additional Rights. The holder of any subordinate lien on
the Mortgaged Property shall have no right to terminate any Lease whether or not
such Lease is subordinate to this Mortgage nor shall any holder of any
subordinate lien join any tenant under any Lease in any action to foreclose the
lien or modify, interfere with, disturb or terminate the rights of any tenant
under any Lease. By recordation of this Mortgage all subordinate lienholders are
subject to and notified of this provision, and any action taken by any such
lienholder contrary to this provision shall be null and void. Upon the
occurrence of any Event of Default, Mortgagee may, in its sole discretion and
without regard to the adequacy of its security under this Mortgage, apply all or
any part of any amounts on deposit with Mortgagee under this Mortgage against
all or any part of the Indebtedness. Any such application shall not be construed
to cure or waive any Default or Event of Default or invalidate any act taken by
Mortgagee on account of such Default or Event of Default.
29 Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting from
the value of the Premises for the purposes of taxation any lien thereon, or
changing in any way the laws for the taxation of mortgages or debts secured
thereby for federal, state or local purposes, or the manner of collection of any
such taxes, and imposing a tax, either directly or indirectly, on mortgages or
debts secured thereby, the holder of this Mortgage shall have the right to
declare the Indebtedness due on a date to be specified by not less than 30 days'
written notice to be given to Mortgagor unless within such 30-day period
Mortgagor shall assume as an Obligation hereunder the payment of any tax so
imposed until full payment of the Indebtedness and such assumption shall be
permitted by law.
30 Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been sufficiently given or
served when presented personally, when delivered to an overnight courier service
with guaranteed next business day delivery or when deposited in the mail by
certified or registered mail, postage prepaid, addressed to Mortgagor at the
address given on the first page of this Mortgage Attention: General Counsel, and
to Mortgagee at the address given on the first page of this Mortgage, and shall
be deemed to have been received upon the earlier of actual receipt thereof or
the third calendar day after such mailing. Either party may change its address
by notice to the other party. If any party other than Mortgagor shall be
entitled to receive copies of notices, demands or approvals, failure of
Mortgagee to send such copies shall not impair the effectiveness of any notice
sent to Mortgagor.
31 No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage
<PAGE> 29
28
relating to this Mortgage shall be superior to the rights of the holder of any
intervening or subordinate lien or encumbrance.
32 Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage or
in any provisions of the Indebtedness or Loan Documents, the obligations of
Mortgagor and of any other obligor under the Indebtedness or Loan Documents
shall be subject to the limitation that Mortgagee shall not charge, take or
receive, nor shall Mortgagor or any other obligor be obligated to pay to
Mortgagee, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Mortgagee.
33 Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshaling in the event of foreclosure of the liens hereby created.
34 Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by mortgage, security agreement, pledge,
lien, assignment or otherwise. Neither the acceptance of this Mortgage nor its
enforcement, shall prejudice or in any manner affect Mortgagee's right to
realize upon or enforce any other security now or hereafter held by Mortgagee,
it being agreed that Mortgagee shall be entitled to enforce this Mortgage and
any other security now or hereafter held by Mortgagee in such order and manner
as Mortgagee may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Mortgagee is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be cumulative and
shall be
<PAGE> 30
29
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute. Every power or remedy given by any of the
Loan Documents to Mortgagee or to which it may otherwise be entitled, may be
exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by Mortgagee. In no event shall Mortgagee, in the exercise
of the remedies provided in this Mortgage (including, without limitation, in
connection with the assignment of Rents to Mortgagee, or the appointment of a
receiver and the entry of such receiver on to all or any part of the Mortgaged
Property), be deemed a "mortgagee in possession," and Mortgagee shall not in any
way be made liable for any act, either of commission or omission, in connection
with the exercise of such remedies.
35 Multiple Security. If (a) the Premises shall consist of one
or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold one or more additional mortgages, liens, deeds of trust or other
security (directly or indirectly) for the Indebtedness upon other property in
the State in which the Premises are located (whether or not such property is
owned by Mortgagor or by others) or (c) both the circumstances described in
clauses (a) and (b) shall be true, then to the fullest extent permitted by law,
Mortgagee may, at its election, commence or consolidate in a single foreclosure
action all foreclosure proceedings against all such collateral securing the
Indebtedness (including the Mortgaged Property), which action may be brought or
consolidated in the courts of any county in which any of such collateral is
located. Mortgagor acknowledges that the right to maintain a consolidated
foreclosure action is a specific inducement to Mortgagee to extend the
Indebtedness, and Mortgagor expressly and irrevocably waives any objections to
the commencement or consolidation of the foreclosure proceedings in a single
action and any objections to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have. Mortgagor further
agrees that if Mortgagee shall be prosecuting one or more foreclosure or other
proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Indebtedness, or if Mortgagee shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue foreclosure proceedings and exercise its other remedies
granted in this Mortgage against all or any part of the Mortgaged Property and
Mortgagor waives any objections to the commencement or continuation of a
foreclosure of this Mortgage or exercise of any other remedies hereunder based
on such other proceedings or judgments, and waives any right to seek to dismiss,
stay, remove, transfer or consolidate either any action under this Mortgage or
such other proceedings on such basis. Neither the commencement nor continuation
of proceedings to foreclose this Mortgage nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee's right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or
<PAGE> 31
30
outside the State in which the Premises are located) which directly or
indirectly secures the Indebtedness, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment in
such other proceedings or exercise of any remedies in such proceedings based
upon any action or judgment connected to this Mortgage, and Mortgagor also
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either such other proceedings or any action under this Mortgage on such basis.
It is expressly understood and agreed that to the fullest extent permitted by
law, Mortgagee may, at its election, cause the sale of all collateral which is
the subject of a single foreclosure action at either a single sale or at
multiple sales conducted simultaneously and take such other measures as are
appropriate in order to effect the agreement of the parties to dispose of and
administer all collateral securing the Indebtedness (directly or indirectly) in
the most economical and least time-consuming manner.
36 Expenses; Indemnification. (a) Mortgagor shall pay or
reimburse Mortgagee for all expenses incurred by Mortgagee before and after the
date of this Mortgage with respect to any and all transactions contemplated by
this Mortgage including without limitation, the preparation of any document
reasonably required hereunder or any amendment, modification, restatement or
supplement to this Mortgage, the delivery of any consent, non-disturbance
agreement or similar document in connection with this Mortgage or the
enforcement of any of Mortgagee's rights. Such expenses shall include, without
limitation, all title and conveyancing charges, recording and filing fees and
taxes, mortgage taxes, intangible personal property taxes, escrow fees, revenue
and tax stamp expenses, insurance premiums (including title insurance premiums),
title search and title rundown charges, brokerage commissions, finders' fees,
placement fees, court costs, surveyors', photographers', appraisers',
architects', engineers', consulting professional's, accountants' and attorneys'
fees and disbursements. Mortgagor acknowledges that from time to time Mortgagor
may receive statements for such expenses, including without limitation
attorneys' fees and disbursements. Mortgagor shall pay such statements promptly
upon receipt.
(b) If (i) any action or proceeding shall be commenced by
Mortgagee (including but not limited to any action to foreclose this Mortgage or
to collect the Indebtedness), or any action or proceeding is commenced to which
Mortgagee is made a party, or in which it becomes necessary to defend or uphold
the lien of this Mortgage (including, without limitation, any proceeding or
other action relating to the bankruptcy, insolvency or reorganization of any
Obligor), or in which Mortgagee is served with any legal process, discovery
notice or subpoena and (ii) in each of the foregoing instances such action or
proceeding in any manner relates to or arises out of this Mortgage or
Mortgagee's lending to Mortgagor or acceptance of a guaranty from a Guarantor of
the Indebtedness or of any of the Obligations or any of the transactions
contemplated by this Mortgage, then Mortgagor will immediately reimburse or pay
to Mortgagee all of the expenses which have been or may be incurred by Mortgagee
with respect to the foregoing (including reasonable counsel fees and
disbursements), together with interest thereon at the Default Rate, and
following the occurance
<PAGE> 32
31
of a Default any such sum and the interest thereon shall be a lien on the
Mortgaged Property, prior to any right, or title to, interest in or claim upon
the Mortgaged Property attaching or accruing subsequent to the lien of this
Mortgage, and shall be deemed to be secured by this Mortgage. In any action or
proceeding to foreclose this Mortgage, or to recover or collect the
Indebtedness, the provisions of law respecting the recovering of costs,
disbursements and allowances shall prevail unaffected by this covenant.
(c) Mortgagor shall indemnify and hold harmless Mortgagee and
Mortgagee's affiliates, and the respective directors, officers, agents and
employees of Mortgagee and its affiliates from and against all claims, damages,
losses and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) arising out of or based upon any matter related to this
Mortgage, the Mortgaged Property or the occupancy, ownership, maintenance or
management of the Mortgaged Property by Mortgagor, including, without
limitation, any claims based on the alleged acts or omissions of any employee or
agent of Mortgagor. This indemnification shall be in addition to any other
liability which Mortgagor may otherwise have to Mortgagee.
37 Successors and Assigns. All covenants of Mortgagor
contained in this Mortgage are imposed solely and exclusively for the benefit of
Mortgagee and its successors and assigns, and no other person or entity shall
have standing to require compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Mortgagee at any time if in its sole
discretion it deems such waiver advisable. All such covenants of Mortgagor shall
run with the land and bind Mortgagor, the successors and assigns of Mortgagor
(and each of them) and all subsequent owners, encumbrancers and tenants of the
Mortgaged Property, and shall inure to the benefit of Mortgagee, its successors
and assigns. The word "Mortgagor" shall be construed as if it read "Mortgagors"
whenever the sense of this Mortgage so requires and if there shall be more than
one Mortgagor, the obligations of the Mortgagors shall be joint and several.
38 No Waivers, etc. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor.
Mortgagee may release, regardless of consideration and without the necessity for
any notice to or consent by the holder of any subordinate lien on the Mortgaged
Property, any part of the security held for the obligations secured by this
Mortgage without, as to the remainder of the security, in anywise impairing or
affecting the lien of this Mortgage or the priority of such lien over any
subordinate lien.
<PAGE> 33
32
39 Governing Law, etc. This Mortgage shall be governed by and
construed and interpreted in accordance with the laws of the State of Kansas.
Mortgagor hereby irrevocably agrees that any legal action, suit, or proceeding
against it with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Mortgage or the other Loan
Documents or for recognition or enforcement of any judgment rendered in any such
action, suit or proceeding may be brought in any of the courts of the State of
Kansas, as Mortgagee may elect, and, by execution and delivery of this Mortgage,
Mortgagor hereby irrevocably accepts and submits to the non-exclusive
jurisdiction of each of the aforesaid courts in persona, generally and
unconditionally with respect to any such action, suit or proceeding for itself
and in respect of its property. Mortgagor further agrees that final judgment
against it in any action, suit, or proceeding referred to herein shall be
conclusive and may be enforced in any other jurisdiction, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of its indebtedness.
40 Waiver of Trial by Jury. Mortgagor and Mortgagee each
hereby irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Mortgage and for any counterclaim brought
therein. Mortgagor hereby waives all rights to interpose any counterclaim in any
suit brought by Mortgagee hereunder and all rights to have any such suit
consolidated with any separate suit, action or proceeding.
41 Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form and the
word "Mortgagor" shall mean "each Mortgagor or any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein," the word
"Mortgagee" shall mean "Mortgagee or any subsequent holder of the Note," the
word "Note" shall mean "the Note or any other evidence of indebtedness secured
by this Mortgage," the word "person" shall include any individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, or other entity, and the words "Mortgaged Property" shall include any
portion of the Mortgaged Property or interest therein. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa. The captions in this Mortgage are for
convenience or reference only and in no way limit or amplify the provisions
hereof.
42 Maximum Amount Secured. With respect to this Mortgage on
properties located in Kansas, the maximum amount secured hereby is $1,000,000.
Property located in Kansas may be released from this Mortgage upon payment of
the above amount secured in Kansas
<PAGE> 34
33
This Mortgage has been duly executed by Mortgagor on the date
first above written.
GLIMCHER PROPERTIES LIMITED
PARTNERSHIP
By: Glimcher Properties Corporation, general
partner
By: /s/ William G. Cornely
-----------------------------------------
Name: William G. Cornely
Its: Senior Executive Vice President, Chief
Financial Officer and Chief Operating
Officer
<PAGE> 35
STATE OF OHIO )
) ss.:
COUNTY OF FRANKLIN )
On this 4th day of November, 1998, before me personally came
William G. Cornely, to me known, who, being by me duly sworn, did depose and say
the he resides at 20 South Third Street, Columbus, Ohio; that he is the Senior
Executive Vice President, CFO/COO of Glimcher Properties Corporation, the
corporation described in and which executed the foregoing instrument as a
general partner of Glimcher Properties Limited Partnership; and that he signed
his name thereto by the authority of the board of directors of said corporation.
/s/ Andrea L. Turner
-------------------------------
Notary Public
[Notarial Stamp]
<PAGE> 36
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
<PAGE> 1
Exhibit 10.84
[Chatham, New York]
MORTGAGE
from
GLIMCHER YORK ASSOCIATES LIMITED PARTNERSHIP, Mortgagor
to
BANKERS TRUST COMPANY, Mortgagee
DATED AS OF OCTOBER 30, 1998
After recording, please return to:
Simpson Thacher & Bartlett
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Daniel Karp, Esq.
<PAGE> 2
[Chatham, New York]
MORTGAGE
THIS MORTGAGE, dated as of October 30, 1998, is made by
GLIMCHER YORK ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership
("Mortgagor"), whose address is 20 South Third Street, Columbus, Ohio 43215, to
BANKERS TRUST COMPANY ("Mortgagee"), whose address is 130 Liberty Street, New
York, New York 10006. References to this "Mortgage" shall mean this instrument
and any and all renewals, modifications, amendments, supplements, extensions,
consolidations, substitutions, spreaders and replacements of this instrument.
Background
Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with all of the
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "Improvements"), being collectively referred to as the "Real
Estate"). Glimcher Properties Limited Partnership, a Delaware limited
partnership ("GPLP"), and the parent of Mortgagor, is the maker of a note (as
the same may be amended, supplemented, modified, extended, restated or replaced
from time to time, the "Note"), dated as of September 15, 1998, made payable to
Mortgagee in the amount of $10,000,000. The Note bears interest at the rate
stated in the Note; references in this Mortgage to the "Default Rate" shall have
the meaning given to such term in the Note.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the
Note, and (ii) all interest and fees payable thereon (the items set
forth in clauses (i) and (ii) being referred to collectively as the
"Indebtedness"); and
(b) the performance of all covenants, agreements, obligations
and liabilities (the "Obligations") of GPLP under or pursuant to the
provisions of the Note, and of Mortgagor under this Mortgage, any other
document securing payment of the Indebtedness (the "Security
Documents") and any amendments, supplements, extensions, renewals,
restatements, replacements or modifications of any of the
<PAGE> 3
2
foregoing (the Note, the Security Documents and all other documents and
instruments from time to time evidencing, securing or guaranteeing the
payment of the Indebtedness or the performance of the Obligations, as
any of the same may be amended, supplemented, extended, renewed,
restated, replaced or modified from time to time, are collectively
referred to as the "Loan Documents");
(c) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
THE MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS SECURED BY THIS MORTGAGE
AT THE TIME OF EXECUTION OR WHICH UNDER ANY CONTINGENCY MAY HEREAFTER
BECOME SECURED HEREBY AT ANY TIME IS ONE MILLION AND 00/100 DOLLARS
($1,000,000); PROVIDED THAT SUCH LIMITATION SHALL NOT LIMIT THE
SECURITY OF THIS MORTGAGE WITH RESPECT TO (I) INTEREST ON THE AFORESAID
MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS AT THE RATES SET FORTH IN THE
NOTE, (II) SUMS TO PAY IMPOSITIONS (AS DEFINED BELOW), (III) SUMS TO
PAY PREMIUMS ON INSURANCE POLICIES COVERING THE MORTGAGED PROPERTY,
(IV) EXPENSES INCURRED IN UPHOLDING OR ENFORCING THE LIEN OF THIS
MORTGAGE, INCLUDING, BUT NOT LIMITED TO, THE EXPENSES OF ANY LITIGATION
TO PROSECUTE OR DEFEND THE RIGHTS AND LIEN CREATED BY THIS MORTGAGE,
(V) COSTS OF REMOVAL OF OR OTHERWISE RELATED TO HAZARDOUS MATERIALS OR
ASBESTOS, (VI) ANY AMOUNT, COSTS OR CHARGE TO WHICH MORTGAGEE BECOMES
SUBROGATED, UPON PAYMENT, WHETHER UNDER RECOGNIZED PRINCIPLES OF LAW OR
EQUITY, OR UNDER EXPRESS STATUTORY AUTHORITY AND (VII) ANY OTHER AMOUNT
SECURED BY THIS MORTGAGE WHICH IF NOT LIMITED BY SUCH LIMITATION WOULD
NOT INCREASE THE AMOUNT OF MORTGAGE RECORDING TAXES, IF ANY, PAYABLE
WITH RESPECT TO THIS MORTGAGE.
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Mortgagor, in possession or expectancy, in and to the Real Estate or
any part thereof;
<PAGE> 4
3
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and
riparian rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents, issues, profits
and revenue thereof and all land lying in the bed of any street, road
or avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) all of the fixtures, chattels, business machines,
machinery, apparatus, equipment, furnishings, fittings and articles of
personal property of every kind and nature whatsoever, and all
appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts
and accessories) currently owned or subsequently acquired by Mortgagor
and now or subsequently attached to, or contained in or used or usable
in any way in connection with any operation or letting of the Real
Estate, including but without limiting the generality of the foregoing,
all screens, awnings, shades, blinds, curtains, draperies, artwork,
carpets, rugs, storm doors and windows, furniture and furnishings,
heating, electrical, and mechanical equipment, lighting, switchboards,
plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems,
motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description (all of the
foregoing in this paragraph (D) being referred to as the "Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Mortgagor or constructed, assembled or placed by Mortgagor on the
Real Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials whether stored at the Real Estate or offsite, and,
in each such case, without any further mortgage, conveyance, assignment
or other act by Mortgagor;
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any
<PAGE> 5
4
of the foregoing may be amended, restated, extended, renewed or
modified from time to time, the "Leases"), and all rights of Mortgagor
in respect of cash and securities deposited thereunder and the right to
receive and collect the revenues, income, rents, issues and profits
thereof, together with all other rents, royalties, issues, profits,
revenue, income and other benefits arising from the use and enjoyment
of the Mortgaged Property (as defined below) (collectively, the
"Rents");
(G) all trade names, trade marks, logos, copyrights, good will
and books and records relating to or used in connection with the
operation of the Real Estate or the Equipment or any part thereof; all
general intangibles related to the operation of the Improvements now
existing or hereafter arising;
(H) all unearned premiums under insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's interest in and to all proceeds of any such
insurance policies (including title insurance policies) including the
right to collect and receive such proceeds, subject to the provisions
relating to insurance generally set forth below; and all awards and
other compensation, including the interest payable thereon and the
right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or Equipment for the taking by
eminent domain, condemnation or otherwise, of all or any part of the
Real Estate or any easement or other right therein;
(I) all right, title and interest of Mortgagor in and to (i)
all contracts from time to time executed by Mortgagor or any manager or
agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the
Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or
any property which is adjacent or peripheral to the Real Estate,
together with the right to exercise such options and all leases of
Equipment (collectively, the "Contracts"), (ii) all consents, licenses,
building permits, certificates of occupancy and other governmental
approvals relating to construction, completion, occupancy, use or
operation of the Real Estate or any part thereof (collectively, the
"Permits") and (iii) all drawings, plans, specifications and similar or
related items relating to the Real Estate (collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage; all capital, operating, reserve
or similar accounts held by or on behalf of Mortgagor and related to
the operation of the Mortgaged Property, whether now existing or
hereafter arising and all monies held in any of the foregoing accounts
and any certificates or instruments related to or evidencing such
accounts;
<PAGE> 6
5
(K) all accounts and revenues arising from the operation of
the Improvements including, without limitation, (i) any right to
payment now existing or hereafter arising for rental of hotel rooms or
other space or for goods sold or leased or for services rendered,
whether or not yet earned by performance, arising from the operation of
the Improvements or any other facility on the Mortgaged Property and
(ii) all rights to payment from any consumer credit-charge card
organization or entity including, without limitation, payments arising
from the use of the American Express Card, the Visa Card, the Carte
Blanche Card, the Mastercard or any other credit card, including those
now existing or hereafter created, substitutions therefor, proceeds
thereof (whether cash or non-cash, movable or immovable, tangible or
intangible) received upon the sale, exchange, transfer, collection or
other disposition or substitution thereof and any and all of the
foregoing and proceeds therefrom; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through (L) are
collectively referred to as the "Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants the title to the
Premises, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Mortgagee to insure the lien
of this Mortgage (the "Permitted Exceptions").
2. Intentionally Deleted.
3. Requirements.
(a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local
<PAGE> 7
6
government or other political subdivision thereof and any agency, department,
bureau, board, commission or other instrumentality of any of them, now existing
or subsequently created (collectively, "Governmental Authority") which has
jurisdiction over the Mortgaged Property and all covenants, restrictions and
conditions now or later of record which may be applicable to any of the
Mortgaged Property, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of any of the
Mortgaged Property. All present and future laws, statutes, codes, ordinances,
orders, judgments, decrees, rules, regulations and requirements of every
Governmental Authority applicable to Mortgagor or to any of the Mortgaged
Property and all covenants, restrictions, and conditions which now or later may
be applicable to any of the Mortgaged Property are collectively referred to as
the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall
not by act or omission permit any building or other improvement on any premises
not subject to the lien of this Mortgage to rely on the Premises or any part
thereof or any interest therein to fulfill any Legal Requirement, and Mortgagor
hereby assigns to Mortgagee any and all rights to give consent for all or any
portion of the Premises or any interest therein to be so used. Mortgagor shall
not by act or omission impair the integrity of any of the Real Estate as a
single zoning lot separate and apart from all other premises. Mortgagor
represents that each parcel of the Real Estate constitutes a legally subdivided
lot, in compliance with all subdivision laws and similar Legal Requirements. Any
act or omission by Mortgagor which would result in a violation of any of the
provisions of this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Promptly when
due, Mortgagor shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes), all
charges for any easement or agreement maintained for the benefit of any of the
Mortgaged Property, all general and special assessments, levies, permits,
inspection and license fees, all water and sewer rents and charges, vault taxes,
and all other public charges even if unforeseen or extraordinary, imposed upon
or assessed against or which may become a lien on any of the Mortgaged Property,
or arising in respect of the occupancy, use or possession thereof, together with
any penalties or interest on any of the foregoing (all of the foregoing are
collectively referred to as the "Impositions"). Upon request by Mortgagee,
Mortgagor shall deliver to Mortgagee (i) original or copies of receipted bills
and canceled checks evidencing payment of such Imposition if it is a real estate
tax or other public charge and (ii) evidence acceptable to Mortgagee showing the
payment of any other such Imposition. If by law any Imposition, at Mortgagor's
option, may be paid in installments (whether or not interest shall accrue on the
unpaid balance of such Imposition), Mortgagor may elect to pay such Imposition
in such installments and shall be responsible for the payment of such
installments with interest, if any.
<PAGE> 8
7
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such Imposition shall have
become due. Any sums paid by Mortgagee in discharge of any Impositions shall be
payable on demand by Mortgagor to Mortgagee together with interest at the
Default Rate.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any taxes assessed against the Mortgaged Property
or any part thereof, and shall not claim any deduction from the taxable value of
the Mortgaged Property by reason of this Mortgage.
(d) Mortgagor shall have the right before any delinquency
occurs to contest or object in good faith to the amount or validity of any
Imposition by appropriate legal proceedings, but such right shall not be deemed
or construed in any way as relieving, modifying, or extending Mortgagor's
covenant to pay any such Imposition at the time and in the manner provided in
this Section unless (i) Mortgagor has given prior written notice to Mortgagee of
Mortgagor's intent so to contest or object to an Imposition, (ii) Mortgagor
shall demonstrate to Mortgagee's satisfaction that the legal proceedings shall
operate conclusively to prevent the sale of the Mortgaged Property, or any part
thereof, to satisfy such Imposition prior to final determination of such
proceedings and (iii) Mortgagor shall furnish a good and sufficient bond or
surety as requested by and reasonably satisfactory to Mortgagee in the amount of
the Impositions which are being contested plus any interest and penalty which
may be imposed thereon and which could become a lien against the Real Estate or
any part of the Mortgaged Property.
5. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on all of the Premises
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss. The policy shall include building ordinance law
endorsements and the policy limits shall be automatically reinstated
after each loss;
(ii) comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), covering all claims for personal injury,
bodily injury or death, or property damage occurring on, in or about
the Premises in an amount not less than $10,000,000 combined single
limit with respect to injury and property damage relating to any one
occurrence plus such excess limits as Mortgagee shall request from time
to time;
<PAGE> 9
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(iii) when and to the extent required by Mortgagee, insurance
against loss or damage by any other risk commonly insured against by
persons occupying or using like properties in the locality or
localities in which the Real Estate is situated;
(iv) insurance against rent loss, extra expense or business
interruption (and/or soft costs, in the case of new construction), if
applicable, in amounts satisfactory to Mortgagee, but not less than one
year's gross rent or gross income;
(v) during the course of any construction or repair of
Improvements, comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), (including coverage for elevators and
escalators, if any). The policy shall include coverage for independent
contractors and completed operations. The completed operations coverage
shall stay in effect for two years after construction of any
Improvements has been completed. The policy shall provide coverage on
an occurrence basis against claims for personal injury, including,
without limitation, bodily injury, death or property damage occurring
on, in or about the Premises and the adjoining streets, sidewalks and
passageways, such insurance to afford immediate minimum protection to a
limit of not less than that required by Mortgagee with respect to
personal injury, bodily injury or death to any one or more persons or
damage to property;
(vi) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Mortgagor engaged on or with
respect to the Premises in such amounts as are reasonably satisfactory
to Mortgagee, but in no event less than the limits established by law;
(vii) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed
value form insurance against "all risks of physical loss," including
collapse, water damage, flood and earthquake and transit coverage,
during construction or repairs of the Improvements, with deductible
approved by Mortgagee, in nonreporting form, covering the total value
of work performed and equipment, supplies and materials furnished (with
an appropriate limit for soft costs in the case of construction);
(viii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping,
heating, air conditioning and elevator equipment and escalator
equipment, provided the Improvements contain equipment of such nature,
and insurance against rent, extra expense, business interruption and
soft costs, if applicable, arising from any such breakdown, in such
amounts as are
<PAGE> 10
9
reasonably satisfactory to Mortgagee but not less than the lesser of
$1,000,000 or 10% of the value of the Improvements;
(ix) if any portion of the Premises are located in an area
identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, flood insurance in an
amount satisfactory to Mortgagee, but in no event less than the maximum
limit of coverage available under the National Flood Insurance Act of
1968, as amended; and
(x) such other insurance in such amounts as Mortgagee may
reasonably request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be canceled, non-renewed or materially
amended without 30-days' prior written notice to Mortgagee, and (ii) with
respect to all property insurance, provide for deductibles not to exceed
$100,000, contain a "Replacement Cost Endorsement" without any deduction made
for depreciation and with no co-insurance penalty (or attaching an agreed amount
endorsement satisfactory to Mortgagee), with loss payable solely to Mortgagee
(modified, if necessary, to provide that proceeds in the amount of replacement
cost may be retained by Mortgagee without the obligation to rebuild) as its
interest may appear, without contribution, under a "standard" or "New York"
mortgagee clause acceptable to Mortgagee and be written by insurance companies
having an A.M. Best Company, Inc. rating of A or higher and a financial size
category of not less than XII, or otherwise as approved by Mortgagee. Liability
insurance policies shall name Mortgagee as an additional insured and contain a
waiver of subrogation against Mortgagee; all such policies shall indemnify and
hold Mortgagee harmless from all liability claims occurring on, in or about the
Premises and the adjoining streets, sidewalks and passageways. The amounts of
each insurance policy and the form of each such policy shall at all times be
satisfactory to Mortgagee. Each policy shall expressly provide that any proceeds
which are payable to Mortgagee shall be paid by check payable to the order of
Mortgagee only and requiring the endorsement of Mortgagee only. If any required
insurance shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the capital of
any insurer, or if for any other reason whatsoever such insurance shall become
unsatisfactory to Mortgagee, Mortgagor shall immediately obtain new or
additional insurance satisfactory to Mortgagee. Mortgagor shall not take out any
separate or additional insurance which is contributing in the event of loss
unless it is properly endorsed and otherwise satisfactory to Mortgagee in all
respects.
(b) Mortgagor shall deliver to Mortgagee an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Mortgagee, together with a copy of the declaration page for each
such policy. Mortgagor shall (i) pay as
<PAGE> 11
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they become due all premiums for such insurance, (ii) not later than 15 days
prior to the expiration of each policy to be furnished pursuant to the
provisions of this Section, deliver a renewed policy or policies, or duplicate
original or originals thereof, marked "premium paid," or accompanied by such
other evidence of payment satisfactory to Mortgagee with standard
non-contributory mortgage clauses in favor of and acceptable to Mortgagee. Upon
request of Mortgagee, Mortgagor shall cause its insurance underwriter or broker
to certify to Mortgagee in writing that all the requirements of this Mortgage
governing insurance have been satisfied.
(c) If Mortgagor is in default of its obligations to insure or
deliver any such prepaid policy or policies, then Mortgagee, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Mortgagor shall pay to Mortgagee on demand such
premium or premiums so paid by Mortgagee with interest from the time of payment
at the Default Rate.
(d) Mortgagor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12 months
from the date of this Mortgage and each successive 12 month period to occur
thereafter) by using the F.W. Dodge Building Index or an equivalent index to
determine whether there shall have been an increase in the replacement value
since the most recent adjustment and, if there shall have been such an increase,
the amount of insurance required shall be adjusted accordingly.
(e) Mortgagor promptly shall comply with and conform to (i)
all provisions of each such insurance policy, and (ii) all requirements of the
insurers applicable to Mortgagor or to any of the Mortgaged Property or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. Mortgagor shall not use or permit the
use of the Mortgaged Property in any manner which would permit any insurer to
cancel any insurance policy or void coverage required to be maintained by this
Mortgage.
(f) If the Mortgaged Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Mortgagor for any personal
injury, bodily injury or property damage incurred on or about the Premises,
Mortgagor shall give immediate notice thereof to Mortgagee. If the Mortgaged
Property is damaged by fire or other casualty and the cost to repair such damage
is less than the lesser of (i) 15% of the replacement cost of the Improvements
at the affected Real Estate site and (ii) $300,000, then provided that no Event
of Default shall have occurred and be continuing, Mortgagor shall have the right
to adjust such loss, and the insurance proceeds relating to such loss may be
paid over to Mortgagor; provided that Mortgagor shall, promptly after any such
damage, repair all such damage regardless of whether any insurance proceeds have
been received or whether such proceeds, if received, are sufficient to pay for
the costs of repair. If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair
<PAGE> 12
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such damage exceeds the above limit, or if an Event of Default shall have
occurred and be continuing, then Mortgagor authorizes and empowers Mortgagee, at
Mortgagee's option and in Mortgagee's sole discretion, as attorney-in-fact for
Mortgagor, to make proof of loss, to adjust and compromise any claim under any
insurance policy, to appear in and prosecute any action arising from any policy,
to collect and receive insurance proceeds and to deduct therefrom Mortgagee's
expenses incurred in the collection process. Each insurance company concerned is
hereby authorized and directed to make payment for such loss directly to
Mortgagee. Mortgagee shall have the right to require Mortgagor to repair or
restore the Mortgaged Property, and Mortgagor hereby designates Mortgagee as its
attorney-in-fact for the purpose of making any election required or permitted
under any insurance policy relating to repair or restoration. The insurance
proceeds or any part thereof received by Mortgagee may be applied by Mortgagee
toward reimbursement of all costs and expenses of Mortgagee in collecting such
proceeds, and the balance: (i) providing that no Event of Default shall have
occurred and is continuing, shall be made available to Mortgagor for purposes of
restoration or repair of the property damaged; or (ii) should an Event of
Default have occurred and be continuing, at Mortgagee's option in its sole and
absolute discretion, to the principal (to the installments in inverse order of
maturity, if payable in installments) and interest due or to become due under
the Note, to fulfill any other Obligation of Mortgagor or GPLP, to the
restoration or repair of the property damaged, or released to Mortgagor. In the
event Mortgagee elects to release such proceeds to Mortgagor, Mortgagor shall be
obligated to use such proceeds to restore or repair the Mortgaged Property.
Application by Mortgagee of any insurance proceeds toward the last maturing
installments of principal and interest due or to become due under the Note shall
not excuse GPLP from making any regularly scheduled payments due thereunder, nor
shall such application extend or reduce the amount of such payments.
(g) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any insurance
policies then in force shall pass to the purchaser or grantee and Mortgagor
hereby appoints Mortgagee its attorney-in-fact, in Mortgagor's name, to assign
and transfer all such policies and proceeds to such purchaser or grantee.
(h) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
Mortgagor; provided, however, that (A) any such policy shall specify, or
Mortgagor shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Mortgaged Property and
any sublimits in such blanket policy applicable to the Premises and the other
Mortgaged Property, (B) each such blanket policy shall include an endorsement
providing that, in the event of a loss resulting from an insured peril,
insurance proceeds shall be allocated to the Mortgaged Property in an amount
equal to the coverages required to be maintained by Mortgagor as provided above
and (C) the protection afforded under any such blanket policy
<PAGE> 13
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shall be no less than that which would have been afforded under a separate
policy or policies relating only to the Mortgaged Property.
6. Restrictions on Liens and Encumbrances. Except for the lien
of this Mortgage and the Permitted Exceptions, Mortgagor shall not further
mortgage, nor otherwise encumber the Mortgaged Property nor create or suffer to
exist any lien, charge or encumbrance on the Mortgaged Property, or any part
thereof, whether superior or subordinate to the lien of this Mortgage and
whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Mortgagor
shall not sell, transfer, convey or assign all or any portion of, or any
interest in, the Mortgaged Property.
8. Limitation on Fundamental Changes. Mortgagor agrees that:
(i) if Mortgagor is a partnership, Mortgagor shall not
dissolve or terminate or materially amend the terms of its partnership
agreement; and
(ii) Mortgagor shall not enter into any transaction of merger
or consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or acquire by purchase or otherwise all or
substantially all the business or assets of, or any stock or other
evidence of beneficial ownership of, any entity.
9. Maintenance; No Alteration; Inspection; Utilities. (a)
Mortgagor shall maintain or cause to be maintained all the Improvements in good
condition and repair and shall not commit or suffer any waste of the
Improvements. Mortgagor shall repair, restore, replace or rebuild promptly any
part of the Premises which may be damaged or destroyed by any casualty
whatsoever. The Improvements shall not be demolished or materially altered, nor
any material additions built, without the prior written consent of Mortgagee.
(b) Mortgagee and any persons authorized by Mortgagee shall
have the right to enter and inspect the Premises and the right to inspect all
work done, labor performed and materials furnished in and about the Improvements
and the right to inspect and make copies of all books, contracts and records of
Mortgagor relating to the Mortgaged Property.
(c) Mortgagor shall pay or cause to be paid when due all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
10. Condemnation/Eminent Domain. Immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such
<PAGE> 14
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proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's option and in
Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to commence,
appear in and prosecute, in Mortgagee's or Mortgagor's name, any action or
proceeding relating to any condemnation of the Mortgaged Property, or any
portion thereof, and to settle or compromise any claim in connection with such
condemnation. If Mortgagee elects not to participate in such condemnation
proceeding, then Mortgagor shall, at its expense, diligently prosecute any such
proceeding and shall consult with Mortgagee, its attorneys and experts and
cooperate with them in any defense of any such proceedings. All awards and
proceeds of condemnation shall be assigned to Mortgagee to be applied in the
same manner as insurance proceeds, as provided above, and Mortgagor agrees to
execute any such assignments of all such awards as Mortgagee may request.
11. Restoration. At any time when Mortgagee releases funds to
Mortgagor for restoration of any of the Mortgaged Property, then such
restoration shall be performed only in accordance with the following conditions:
(i) prior to the commencement of any restoration, the plans
and specifications for such restoration, and the budgeted costs, shall
be submitted to and approved by Mortgagee;
(ii) prior to making any advance of restoration funds,
Mortgagee shall be satisfied that the remaining restoration funds are
sufficient to complete the restoration and to pay all related expenses,
including interest on the Indebtedness and real estate taxes on the
Premises, during restoration;
(iii) at the time of any disbursement of the restoration
funds, (A) no Default (as defined below) shall then exist, (B) no
mechanics' or materialmen's liens shall have been filed and remain
undischarged, except those discharged by the disbursement of the
requested restoration funds and (C) a satisfactory bring-down or
continuation of title insurance on the Premises shall be delivered to
Mortgagee;
(iv) disbursements shall be made from time to time in an
amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of satisfactory evidence of the stage of
completion and of performance of the work in a good and workmanlike
manner and in accordance with the contracts, plans and specifications
acceptable to Mortgagee;
(v) with respect to each advance of restoration funds,
Mortgagee may retain 10% of the amount of such advance as a holdback
until the restoration is fully completed;
(vi) the restoration funds shall bear no interest and may be
commingled with Mortgagee's other funds;
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(vii) Mortgagee may impose such other conditions as are
customarily imposed by construction lenders; and
(viii) any restoration funds remaining shall be retained by
Mortgagee and may be applied by Mortgagee, in its sole discretion, to
the Indebtedness in the inverse order of maturity.
12. Leases. (a) Mortgagor shall not (i) execute an assignment
or pledge of any Lease relating to all or any portion of the Mortgaged Property
other than in favor of Mortgagee, or (ii) without the prior written consent of
Mortgagee, execute any new Lease for space in excess of 10,000 square feet.
(b) As to any existing or new Lease Mortgagor shall:
(i) promptly perform all of the provisions of the Lease on the
part of the lessor thereunder to be performed;
(ii) promptly enforce all of the provisions of the Lease on
the part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Mortgagor as lessor or of the lessee thereunder;
(iv) exercise, within 5 days after a request by Mortgagee, any
right to request from the lessee a certificate with respect to the
status thereof;
(v) simultaneously deliver to Mortgagee copies of any notices
of default which Mortgagor may at any time forward to or receive from
the lessee;
(vi) upon request, promptly deliver to Mortgagee a fully
executed counterpart of the Lease; and
(vii) promptly deliver to Mortgagee, upon Mortgagee's request,
an assignment of the Mortgagor's interest under such Lease.
(c) Mortgagor shall deliver to Mortgagee, within 10 days after
a request by Mortgagee, a written statement, certified by Mortgagor as being
true, correct and complete, containing the names of all lessees and other
occupants of the Mortgaged Property, the terms of all Leases and the spaces
occupied and rentals payable thereunder, and a list of all Leases which are then
in default, including the nature and magnitude of the default; such statement
<PAGE> 16
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shall be accompanied by credit information with respect to the lessees and such
other information as Mortgagee may reasonably request.
(d) All Leases entered into by Mortgagor after the date
hereof, if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage unless
Mortgagee shall otherwise elect in writing.
(e) As to any existing or new Lease for space in excess of
10,000 square feet, Mortgagor shall not accept a surrender or terminate, cancel,
rescind, supplement, alter, revise, modify or amend such Lease or permit any
such action to be taken without the prior written consent of Mortgagee. As to
any exiting or new Lease, Mortgagor shall not accept the payment of rent more
than thirty (30) days in advance of its due date. The provisions of this
subsection are made with reference to Section 291-f of the Real Property Law of
the State of New York.
(f) If any act or omission of Mortgagor would give any lessee
under any Lease the right, immediately or after lapse of a period of time, to
cancel or terminate such Lease, or to abate or offset against the payment of
rent or to claim a partial or total eviction, such lessee shall not exercise
such right until it has given written notice of such act or omission to
Mortgagee and until a reasonable period for remedying such act or omission shall
have elapsed following the giving of such notice without a remedy being
effected.
(g) In the event of the enforcement by Mortgagee of any remedy
under this Mortgage, the lessee under each Lease shall, if requested by
Mortgagee or any other person succeeding to the interest of Mortgagee as a
result of such enforcement, attorn to Mortgagee or to such person and shall
recognize Mortgagee or such successor in interest as lessor under the Lease
without change in the provisions thereof; provided however, that Mortgagee or
such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
modification to the Lease made without the consent of Mortgagee or such
successor in interest; (iii) liable for any previous act or omission of
Mortgagor (or its predecessors in interest); (iv) responsible for any monies
owing by Mortgagor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Mortgagor (or its predecessors in interest); (v) bound by any covenant
to undertake or complete any construction of the Premises or any portion
thereof; or (vi) obligated to make any payment to such lessee other than any
security deposit actually delivered to Mortgagee or such successor in interest.
Each lessee or other occupant, upon request by Mortgagee or such successor in
interest, shall execute and deliver an instrument or instruments confirming such
attornment. In addition, Mortgagor agrees that each Lease entered into after the
date of this Mortgage shall include language to the effect of subsections
(d)-(g) of this Section; provided that the provisions of such subsections
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shall be self-operative and any failure of any Lease to include such language
shall not impair the binding effect of such provisions on any lessee under such
Lease.
13. Further Assurances/Estoppel Certificates. To further
assure Mortgagee's rights under this Mortgage, Mortgagor agrees upon demand of
Mortgagee to do any act or execute any additional documents (including, but not
limited to, security agreements on any personalty included or to be included in
the Mortgaged Property and a separate assignment of each Lease in recordable
form) as may be required by Mortgagee to confirm the lien of this Mortgage and
all other rights or benefits conferred on Mortgagee. Mortgagor, within 5
business days after request, shall deliver, in form and substance satisfactory
to Mortgagee, a written statement, duly acknowledged, setting forth the amount
of the Indebtedness, and whether any offsets, claims, counterclaims or defenses
exist against the Indebtedness and certifying as to such other matters as
Mortgagee shall reasonably request.
14. Mortgagee's Right to Perform. If Mortgagor fails to
perform any of the covenants or agreements of Mortgagor, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage, may, at any time (but shall be under no obligation to) pay or perform
the same, and the amount or cost thereof, with interest at the Default Rate,
shall immediately be due from Mortgagor to Mortgagee. To the extent that any
such amounts or costs paid by Mortgagee shall constitute payment of (i)
Impositions; (ii) premiums on insurance policies covering the Premises; (iii)
expenses incurred in upholding or enforcing the lien of this Mortgage,
including, but not limited to the expenses of any litigation to prosecute or
defend the rights and lien created by this Mortgage; (iv) costs of removal of or
otherwise related to Hazardous Materials (as defined below) or asbestos; or (v)
any amount, costs or charge to which Mortgagee becomes subrogated, upon payment,
whether under recognized principles of law or equity, or under express statutory
authority; then, and in each such event, such amounts or costs, together with
interest thereon at the Default Rate, shall be added to the Indebtedness and
shall be secured by this Mortgage and shall be a lien on the Mortgaged Property
prior to any right, title to, interest in, or claim upon the Mortgaged Property
attaching subsequent to the lien of this Mortgage. No payment or advance of
money by Mortgagee under this Section shall be deemed or construed to cure
Mortgagor's default or waive any right or remedy of Mortgagee.
15. Mortgagor's Existence, etc. Mortgagor shall do all things
necessary to preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state in which it was
formed and its right to own property and transact business in each state in
which the Real Estate is located. Mortgagor represents and warrants that
Mortgagor is a duly organized and validly existing corporation or general or
limited partnership, as the case may be, in good standing, and this Mortgage has
been executed by a duly authorized partner or officer thereof, as applicable.
This Mortgage constitutes the legal, valid and binding obligation of Mortgagor,
enforceable against Mortgagor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
<PAGE> 18
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reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
16. Financial Statements; Certificates; Other Information. (a)
Mortgagor shall deliver to Mortgagee (i) within 120 days after the end of each
of its fiscal years annual operating statements and a rent roll for the Premises
and a copy of Mortgagor's annual audited report, including a statement of
sources and uses of funds of Mortgagor as at the end of such year, and related
statements of income and retained earnings and changes in financial position for
such year, and (ii) within 90 days after the end of each of its fiscal quarters
(other than the last) quarterly operating statements and a rent roll for the
Premises as at the end of such quarter. The foregoing financial statements shall
be certified by the chief financial officer of or by a partner in Mortgagor, as
the case may be, and with respect to Mortgagor's annual financial statements,
also by a certified public accountant approved by Mortgagee. All financial
statements delivered to Mortgagee shall be true and correct in all respects,
shall be prepared in accordance with generally accepted accounting principles,
consistently applied, and fairly present the financial condition of the subject
as of the dates thereof and each of the operating statements shall be in
reasonable detail and include cash flow and any other information reasonably
requested by Mortgagee. Any materially adverse change that occurs in the
financial condition reflected therein after the date thereof shall be reported
to Mortgagee promptly. None of the financial statements, or any certificate or
statement furnished to Mortgagee by or on behalf of Mortgagor in connection with
the transactions contemplated hereby, shall contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein or herein not misleading.
(b) Mortgagor shall furnish to Mortgagee:
(i) concurrently with the delivery of the financial statements
referred to in subsection (a), a certificate of an executive officer or
of a partner of Mortgagor stating that, to the best of such person's
knowledge, after such examination or investigation as is necessary to
enable such person to make an informed judgment, Mortgagor during such
period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Mortgage
and all other documents evidencing, securing or relating to the
Indebtedness to be observed, performed or satisfied by it, and that
such person has obtained no knowledge of any Event of Default or any
event which with the giving of notice or passage of time, or both,
would constitute an Event of Default ("Default"), except as specified
in such certificate;
(ii) not later than 60 days prior to the end of each 12-month
period, commencing with the 12-month period ending on the date one year
from the date of this Mortgage, a copy of the projections by Mortgagor
of the operating budget and cash flow for the Premises for such
12-month period; and
<PAGE> 19
18
(iii) promptly, such additional financial and other
information as Mortgagee may from time to time reasonably request.
17. Notice of Certain Occurrences. Mortgagor shall give notice
to Mortgagee promptly upon the occurrence of:
(a) any Default or Event of Default;
(b) any (i) default or event of default under any provision of
any security issued by or any agreement, instrument or undertaking of Mortgagor
or which binds Mortgagor or any property thereof (collectively, "Contractual
Obligations") or (ii) litigation, investigation or proceeding which may exist at
any time between Mortgagor and any Governmental Authority, which, with respect
to both clauses (i) and (ii), could have a material adverse effect on the
business, operations, property or financial or other condition of Mortgagor;
(c) any litigation or proceeding affecting Mortgagor or the
Mortgaged Property or any part thereof in which the amount involved is $250,000
or more and not fully covered by insurance or in which injunctive or similar
relief is sought; and
(d) a material adverse change in the business, operations,
property or financial or other condition of Mortgagor or the Mortgaged Property
or any part thereof.
18 Hazardous Material. (a) Neither Mortgagor nor, to the best
knowledge of Mortgagor, any other person has ever caused or permitted, in
violation of any Legal Requirement, any Hazardous Material (as defined below) to
be placed, held, located or disposed of on, under or at the Premises, or any
part thereof, and the Premises have never been used (whether by Mortgagor or, to
the best knowledge of Mortgagor, by any other person, including any tenant) as a
dump site or storage (whether permanent or temporary) site for any Hazardous
Material, in violation of any Legal Requirement.
(b) Mortgagor represents that (i) to the best of Mortgagor's
knowledge, the Premises are free of all Hazardous Material that are in violation
of any Legal Requirement and (ii) neither the Premises nor any site within the
vicinity of the Premises is or has been adversely affected by any Hazardous
Material or is in violation of any applicable Legal Requirement of any
Governmental Authority regulating, relating to, or imposing liability or
standards of conduct concerning Hazardous Material.
(c) Mortgagor shall comply with any and all applicable Legal
Requirements governing the discharge and removal of Hazardous Material, shall
pay immediately when due the costs of removal of any Hazardous Material, and
shall keep the Premises free of any lien imposed pursuant to such Legal
Requirements. In the event Mortgagor fails to do so, after
<PAGE> 20
19
notice to Mortgagor and the expiration of the earlier of (i) applicable cure
periods hereunder, or (ii) the cure period permitted under the applicable Legal
Requirement, Mortgagee may declare such failure an Event of Default or cause the
Premises to be freed from the Hazardous Material and the cost of the removal
with interest at the Default Rate shall immediately be due from Mortgagor to
Mortgagee. Mortgagor further agrees not to release or dispose of any Hazardous
Material at the Premises without the express approval of Mortgagee and any such
release or disposal shall comply with all applicable Legal Requirements and any
conditions established by Mortgagee. In addition, Mortgagor agrees not to allow
the manufacture, storage, transmission, presence or disposal of any Hazardous
Material over or upon the Premises. Mortgagee shall have the right at any time
to conduct an environmental audit of the Premises and Mortgagor shall cooperate
in the conduct of such environmental audit. Mortgagor shall give Mortgagee and
its agents and employees access to the Premises to remove Hazardous Material.
Mortgagor agrees to defend, indemnify and hold Mortgagee free and harmless from
and against all loss, costs, damage and expense (including attorneys' fees and
costs and consequential damages) Mortgagee may sustain by reason of (i) the
imposition or recording of a lien by any Governmental Authority pursuant to any
Legal Requirement relating to hazardous or toxic wastes or substances or the
removal thereof ("Hazardous Material Laws"); (ii) claims of any private parties
regarding violations of Hazardous Material Laws; (iii) costs and expenses
(including, without limitation, attorneys' fees and fees incidental to the
securing of repayment of such costs and expenses) incurred by Mortgagor or
Mortgagee in connection with the removal of any such lien or in connection with
Mortgagor's or Mortgagee's compliance with any Hazardous Material Laws; and (iv)
the assertion against Mortgagee by any party of any claim in connection with
Hazardous Material.
(d) For the purposes of this Mortgage, "Hazardous Material"
means and includes any hazardous, nuclear, toxic or dangerous waste, substance
or material defined as such in (or for purposes of) the Comprehensive
Environmental Response, Compensation, and Liability Act, any so-called
"Superfund" or "Superlien" law, or any other Legal Requirement regulating,
relating to, or imposing liability or standards of conduct concerning, any
hazardous, nuclear, toxic or dangerous waste, substance or material, as now or
at any time in effect.
(e) The foregoing indemnification shall survive repayment of
the Note, notwithstanding the delivery of any satisfaction, release or release
deed, discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.
19 Asbestos. Mortgagor shall not install or permit to be
installed in the Premises friable asbestos or any substance containing asbestos
and deemed hazardous by any Legal Requirement respecting such material, or any
other building material deemed to be harmful, hazardous or injurious by relevant
Legal Requirements and with respect to any such material currently present in
the Premises shall promptly either (a) remove any material which such Legal
Requirements deem harmful, hazardous or injurious and require to be removed or
<PAGE> 21
20
(b) otherwise comply with such Legal Requirements, at Mortgagor's expense. If
Mortgagor shall fail to so remove or otherwise comply, Mortgagee may declare an
Event of Default and/or do whatever is necessary to eliminate such substances
from the Premises or otherwise comply with the applicable Legal Requirement, and
the costs thereof, with interest at the Default Rate, shall be immediately due
from Mortgagor to Mortgagee. Mortgagor shall give Mortgagee and its agents and
employees access to the Premises to remove such asbestos or substances.
Mortgagor shall defend, indemnify, and save Mortgagee harmless from all loss,
costs, damages and expense (including attorneys' fees and costs and
consequential damages) asserted or proven against Mortgagee by any party, as a
result of the presence of such substances or any removal or compliance with such
Legal Requirements. The foregoing indemnification shall survive repayment of the
Note, notwithstanding the delivery of any satisfaction, release or release deed,
discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.
20 Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default:
(a) an Event of Default shall occur under the Note;
(b) a failure to make payment of any other sums required to be
paid hereunder (including, without limitation, any Imposition) within
the period required by specific provision of this Mortgage or, if no
such period is so provided, by no later than three days after written
notice; or
(c) a failure (i) to keep in force the insurance required by
this Mortgage, or (ii) to comply with and conform to all provisions and
requirements of the insurance policies and the insurers thereunder
which would affect Mortgagor's ability to keep in force the insurance
required by this Mortgage or to collect any proceeds therefrom, or
(iii) to comply with any other material provisions of this Mortgage
regarding insurance; or
(d) upon default, five business days after request, in
furnishing a statement of the outstanding amount secured by this
Mortgage and whether any offset or defense exists against the
Indebtedness; or
(e) upon the actual waste, removal or demolition of, or
material alteration to, any part of the Premises (other than necessary
replacements of worn or obsolete Equipment), or construction of any new
Improvements; or
(f) upon failure to comply promptly with any Legal Requirement
or order or notice of violation of law or ordinance issued by any
Governmental Authority
<PAGE> 22
21
having jurisdiction over the Premises, which failure could materially
adverse affect the Mortgaged Property; or
(g) if any representation or warranty made by Mortgagor in
this Mortgage shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(h) if any Obligor (as defined below) shall (i) default in any
payment of principal of or interest on any (A) indebtedness for
borrowed money in respect of which an Obligor is liable, contingently
or otherwise, as obligor, guarantor or otherwise, or in respect of
which such Obligor otherwise assures a creditor against loss or (B)
obligations under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as
capital leases for which obligations such Obligor is liable,
contingently or otherwise, as obligor, guarantor or otherwise, or for
which obligations such Obligor assures a creditor against loss
(collectively referred to as "Debt") (other than the Note) beyond the
period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Debt was created; or (ii)
default in the observance or performance of any other agreement or
condition relating to any such Debt or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Debt (or a trustee or agent on behalf of such holder or holders)
to cause, with the giving of notice if required, such Debt to become
due prior to its stated maturity; or
(i) if (i) Mortgagor or any Partner or any guarantor of
payment of all or any portion of the Indebtedness or performance of any
of the Obligations (a "Guarantor"; Mortgagor, each Partner and each
Guarantor being collectively referred to as an "Obligor") shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or
any Obligor shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against any Obligor any
case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days (the events specified in clauses (i)
and (ii) of this subsection being referred to as "Automatic
Acceleration Defaults"); or (iii) there shall be commenced against any
Obligor any case, proceeding or other action
<PAGE> 23
22
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets,
which results in the entry of an order for any such relief which shall
not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) any Obligor shall take
any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clauses (i), (ii)
or (iii) above; or (v) any Obligor shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(j) if one or more judgments or decrees shall be entered
against any Obligor involving in the aggregate a liability (not paid or
fully covered by insurance) of $250,000 or more and all such judgments
or decrees shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or
(k) if any of the Mortgaged Property is damaged or destroyed
by an uninsured casualty and Mortgagor does not immediately provide
funds for the restoration of the damage caused by such casualty; or
(l) if Mortgagor shall further mortgage, pledge or otherwise
encumber the Mortgaged Property or any part thereof or any interest
therein or create or suffer to exist any lien, charge or other
encumbrance on the Mortgaged Property or any part thereof, whether
superior or subordinate to the lien of this Mortgage, whether recourse
or non-recourse; or
(m) if, except as permitted herein, Mortgagor shall (A) sell,
transfer, convey or assign the Mortgaged Property or any part thereof
or any interest therein (by operation of law or otherwise), or (B)
lease any of the Mortgaged Property without the prior written consent
of Mortgagee;
(n) this Mortgage shall cease for any reason to be in full
force and effect or Mortgagor shall so assert in writing; or
(o) a failure of Mortgagor to duly perform and observe, or a
violation or breach of, any other terms, covenants, provisions or
conditions of this Mortgage and the continuation thereof for a 30-day
period after notice shall have been given to Mortgagor by Mortgagee
specifying such default and requiring such default be remedied; which
period may be extended to the extent required (but not longer than 180
days) if such default is not susceptible of cure within 30 days so long
as Mortgagor has commenced to cure such default within such 30-day
period and is thereafter diligently prosecuting such cure to completion
and so long as such delay is not likely to have a material adverse
effect on either the Mortgaged Property or Mortgagee's rights
<PAGE> 24
23
under this Mortgage; provided, however, any such default that can be
cured by the payment of money shall be promptly cured after notice by
Mortgagee.
21 Remedies.
(a) Upon the occurrence of any Event of Default, in addition
to any other rights and remedies Mortgagee may have pursuant to the
Loan Documents, or as provided by law, and without limitation, (a) if
such event is an Automatic Acceleration Default, automatically the
Indebtedness and all other amounts owing under the Note, this Mortgage
and the other Security Documents immediately shall become due and
payable, and (b) if such event is any other Event of Default, by notice
to Mortgagor, Mortgagee may declare the Indebtedness (together with
accrued interest thereon) and all other amounts payable under the Note,
this Mortgage and the other Security Documents to be immediately due
and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are
hereby expressly waived. In addition, upon the occurrence of any Event
of Default, Mortgagee may immediately 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, including, but
not limited to, the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such manner as Mortgagee
may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by
applicable law, (A) institute and maintain an action of
mortgage foreclosure against all or any part of the Mortgaged
Property, (B) institute and maintain an action on the Note,
(C) sell all or part of the Mortgaged Property (Mortgagor
expressly granting to Mortgagee the power of sale), or (D)
take such other action at law or in equity for the enforcement
of this Mortgage or any of the Loan Documents as the law may
allow. Mortgagee may proceed in any such action to final
judgment and execution thereon for all sums due hereunder,
together with interest thereon at the Default Rate and all
costs of suit, including, without limitation, reasonable
attorneys' fees and disbursements. Interest at the Default
Rate shall be due on any judgment obtained by Mortgagee from
the date of judgment until actual payment is made of the full
amount of the judgment.
(ii) Mortgagee may personally, or by its agents,
attorneys and employees and without regard to the adequacy or
inadequacy of the Mortgaged Property or any other collateral
as security for the Indebtedness and Obligations enter into
and upon the Mortgaged Property and each and every part
thereof and exclude Mortgagor and its agents and employees
therefrom without liability for trespass, damage or otherwise
(Mortgagor hereby agreeing to surrender
<PAGE> 25
24
possession of the Mortgaged Property to Mortgagee upon demand
at any such time) and use, operate, manage, maintain and
control the Mortgaged Property and every part thereof.
Following such entry and taking of possession, Mortgagee shall
be entitled, without limitation, (x) to lease all or any part
or parts of the Mortgaged Property for such periods of time
and upon such conditions as Mortgagee may, in its discretion,
deem proper, (y) to enforce, cancel or modify any Lease and
(z) generally to execute, do and perform any other act, deed,
matter or thing concerning the Mortgaged Property as Mortgagee
shall deem appropriate as fully as Mortgagor might do.
(b) The holder of this Mortgage, in any action to foreclose
it, shall be entitled to the appointment of a receiver. In case of a
foreclosure sale, the Real Estate may be sold, at Mortgagee's election,
in one parcel or in more than one parcel and Mortgagee is specifically
empowered, (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the
Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and
notwithstanding to the contrary any exculpatory or non-recourse
language which may be contained herein, Mortgagee shall be entitled to
enjoin such breach and obtain specific performance of any covenant,
agreement, term or condition and Mortgagee shall have the right to
invoke any equitable right or remedy as though other remedies were not
provided for in this Mortgage.
22 Right of Mortgagee to Credit Sale. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale 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. In lieu of paying cash therefor, Mortgagee may make settlement for the
purchase price by crediting upon the Indebtedness or other sums secured by this
Mortgage the net sales price after deducting therefrom the expenses of sale and
the cost of the action and any other sums which Mortgagee is authorized to
deduct under this Mortgage. In such event, this Mortgage, the Note and documents
evidencing expenditures secured hereby may be presented to the person or persons
conducting the sale in order that the amount so used or applied may be credited
upon the Indebtedness as having been paid.
23 Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction
<PAGE> 26
25
to appoint a receiver or receivers or other manager of the Mortgaged Property,
and Mortgagor hereby irrevocably consents to such appointment and waives notice
of any application therefor (except as may be required by law). Any such
receiver or receivers shall have all the usual powers and duties of receivers in
like or similar cases and all the powers and duties of Mortgagee in case of
entry as provided in this Mortgage, including, without limitation and to the
extent permitted by law, the right to enter into leases of all or any part of
the Mortgaged Property, and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Mortgaged Property unless such
receivership is sooner terminated.
24 Extension, Release, etc. (a) Without affecting the lien or
charge of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure less
than all of the principal amount of the Indebtedness, it is expressly agreed
that any repayments of the principal amount of the Indebtedness shall not reduce
the amount of the lien of this Mortgage until the lien amount shall equal the
principal amount of the Indebtedness outstanding.
(b) 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 the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien of
this Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid lien on the Mortgaged
Property for the amount secured hereby.
25 Security Agreement under Uniform Commercial Code. (a) It is
the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"Code") of the State of New York. If an
<PAGE> 27
26
Event of Default shall occur under this Mortgage, then in addition to having any
other right or remedy available at law or in equity, Mortgagee shall have the
option of either (i) proceeding under the Code and exercising such rights and
remedies as may be provided to a secured party by the Code with respect to all
or any portion of the Mortgaged Property which is personal property (including,
without limitation, taking possession of and selling such property) or (ii)
treating such property as real property and proceeding with respect to both the
real and personal property constituting the Mortgaged Property in accordance
with Mortgagee's rights, powers and remedies with respect to the real property
(in which event the default provisions of the Code shall not apply). If
Mortgagee shall elect to proceed under the Code, then five days' notice of sale
of the personal property shall be deemed reasonable notice and the reasonable
expenses of retaking, holding, preparing for sale, selling and the like incurred
by Mortgagee shall include, but not be limited to, attorneys' fees and legal
expenses. At Mortgagee's request, Mortgagor shall assemble the personal property
and make it available to Mortgagee at a place designated by Mortgagee which is
reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; and (iv) the addresses of Mortgagor and Mortgagee are
as set forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time,
shall execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee, covering all or any part
of the Mortgaged Property and will further execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, any financing statement,
affidavit, continuation statement or certificate or other document as Mortgagee
may request in order to perfect, preserve, maintain, continue or extend the
security interest under and the priority of this Mortgage and such security
instrument. Mortgagor further agrees to pay to Mortgagee on demand all costs and
expenses incurred by Mortgagee in connection with the preparation, execution,
recording, filing and re-filing of any such document and all reasonable costs
and expenses of any record searches for financing statements Mortgagee shall
reasonably require. Mortgagor shall from time to time, on request of Mortgagee,
deliver to Mortgagee an inventory in reasonable detail of any of the Mortgaged
Property which constitutes personal property. If Mortgagor shall fail to furnish
any financing or continuation statement within 10 days after request by
Mortgagee, then pursuant to the provisions of the Code, Mortgagor hereby
authorizes Mortgagee, without the signature of Mortgagor, to execute and file
any such financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property, as
set forth above.
<PAGE> 28
27
26 Assignment of Rents. Mortgagor hereby assigns to Mortgagee
the Rents as further security for the payment of the Indebtedness and
performance of the Obligations, and Mortgagor grants to Mortgagee the right to
enter the Mortgaged Property for the purpose of collecting the same and to let
the Mortgaged Property or any part thereof, and to apply the Rents on account of
the Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents and Mortgagor shall be entitled to collect, receive, use
and retain the Rents until the occurrence of an Event of Default under this
Mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate and
surrender the possession of the Mortgaged Property to Mortgagee or to such
receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any). The agreement
contained in this Section has been made with reference to section 291-f of the
Real Property Law of the State of New York.
27 Trust Funds. (a) Mortgagor shall receive the advances
secured hereby subject to the trust fund provisions of Section 13 of the Lien
Law of the State of New York.
(b) All lease security deposits of the Real Estate in excess
of $50,000 shall be treated as trust funds not to be commingled with any other
funds of Mortgagor. Within 10 days after request by Mortgagee, Mortgagor shall
furnish Mortgagee satisfactory evidence of compliance with this subsection,
together with a statement of all lease security deposits by lessees and copies
of all Leases not previously delivered to Mortgagee, which statement shall be
certified by Mortgagor.
28 Additional Rights. (a) The clauses and covenants contained
in this Mortgage that are construed by Section 254 of the Real Property Law of
the State of New York shall be construed as provided in those sections, except
that the provisions of subsection 4 of such Section 254 shall not in any manner
apply to or construe the provisions of this Mortgage; the additional clauses and
covenants contained herein shall afford rights supplemental to and not exclusive
of the rights conferred by the clauses and covenants construed by such Section
254 and shall not impair, modify, alter or defeat such rights (except
<PAGE> 29
28
that the provisions of this Mortgage governing insurance shall be exclusive of
and shall be in substitution for the rights which would be conferred by the
clauses and covenants construed by such subsection 4 of such Section 254),
notwithstanding that such additional clauses and covenants may relate to the
same subject matter or provide for different or additional rights in the same or
similar contingencies as the clauses and covenants construed by such Section
254; the rights of Mortgagee arising under clauses and covenants contained in
this Mortgage shall be separate, distinct and cumulative and none of them shall
be in 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, anything herein or otherwise to the contrary notwithstanding, and in
the event of any inconsistencies between the provisions of such Section 254 and
the provisions of this Mortgage, the provisions of this Mortgage shall prevail.
(b) The holder of any subordinate lien on the Mortgaged
Property shall have no right to terminate any Lease whether or not such Lease is
subordinate to this Mortgage nor shall any holder of any subordinate lien join
any tenant under any Lease in any action to foreclose the lien or modify,
interfere with, disturb or terminate the rights of any tenant under any Lease.
By recordation of this Mortgage all subordinate lienholders are subject to and
notified of this provision, and any action taken by any such lienholder contrary
to this provision shall be null and void. Upon the occurrence of any Event of
Default, Mortgagee may, in its sole discretion and without regard to the
adequacy of its security under this Mortgage, apply all or any part of any
amounts on deposit with Mortgagee under this Mortgage against all or any part of
the Indebtedness. Any such application shall not be construed to cure or waive
any Default or Event of Default or invalidate any act taken by Mortgagee on
account of such Default or Event of Default.
29 Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting from
the value of the Premises for the purposes of taxation any lien thereon, or
changing in any way the laws for the taxation of mortgages or debts secured
thereby for federal, state or local purposes, or the manner of collection of any
such taxes, and imposing a tax, either directly or indirectly, on mortgages or
debts secured thereby, the holder of this Mortgage shall have the right to
declare the Indebtedness due on a date to be specified by not less than 30 days'
written notice to be given to Mortgagor unless within such 30-day period
Mortgagor shall assume as an Obligation hereunder the payment of any tax so
imposed until full payment of the Indebtedness and such assumption shall be
permitted by law.
30 Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been sufficiently given or
served when presented personally, when delivered to an overnight courier service
with guaranteed next business day delivery or when deposited in the mail by
certified or registered mail, postage prepaid, addressed to Mortgagor at the
address given on the first page of this Mortgage Attention: General Counsel, and
to Mortgagee at the address given on the first page of this Mortgage,
<PAGE> 30
29
and shall be deemed to have been received upon the earlier of actual receipt
thereof or the third calendar day after such mailing. Either party may change
its address by notice to the other party. If any party other than Mortgagor
shall be entitled to receive copies of notices, demands or approvals, failure of
Mortgagee to send such copies shall not impair the effectiveness of any notice
sent to Mortgagor.
31 No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage relating to this Mortgage shall be superior to the rights of
the holder of any intervening or subordinate lien or encumbrance.
32 Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage or
in any provisions of the Indebtedness or Loan Documents, the obligations of
Mortgagor and of any other obligor under the Indebtedness or Loan Documents
shall be subject to the limitation that Mortgagee shall not charge, take or
receive, nor shall Mortgagor or any other obligor be obligated to pay to
Mortgagee, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Mortgagee.
33 Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshaling in the event of foreclosure of the liens hereby created.
34 Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and
<PAGE> 31
30
Obligations may now or hereafter be otherwise secured, whether by mortgage,
security agreement, pledge, lien, assignment or otherwise. Neither the
acceptance of this Mortgage nor its enforcement, shall prejudice or in any
manner affect Mortgagee's right to realize upon or enforce any other security
now or hereafter held by Mortgagee, it being agreed that Mortgagee shall be
entitled to enforce this Mortgage and any other security now or hereafter held
by Mortgagee in such order and manner as Mortgagee may determine in its absolute
discretion. No remedy herein conferred upon or reserved to Mortgagee is intended
to be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Mortgagee or to which it
may otherwise be entitled, may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by Mortgagee. In no event
shall Mortgagee, in the exercise of the remedies provided in this Mortgage
(including, without limitation, in connection with the assignment of Rents to
Mortgagee, or the appointment of a receiver and the entry of such receiver on to
all or any part of the Mortgaged Property), be deemed a "mortgagee in
possession," and Mortgagee shall not in any way be made liable for any act,
either of commission or omission, in connection with the exercise of such
remedies.
35 Multiple Security. If (a) the Premises shall consist of one
or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold one or more additional mortgages, liens, deeds of trust or other
security (directly or indirectly) for the Indebtedness upon other property in
the State in which the Premises are located (whether or not such property is
owned by Mortgagor or by others) or (c) both the circumstances described in
clauses (a) and (b) shall be true, then to the fullest extent permitted by law,
Mortgagee may, at its election, commence or consolidate in a single foreclosure
action all foreclosure proceedings against all such collateral securing the
Indebtedness (including the Mortgaged Property), which action may be brought or
consolidated in the courts of any county in which any of such collateral is
located. Mortgagor acknowledges that the right to maintain a consolidated
foreclosure action is a specific inducement to Mortgagee to extend the
Indebtedness, and Mortgagor expressly and irrevocably waives any objections to
the commencement or consolidation of the foreclosure proceedings in a single
action and any objections to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have. Mortgagor further
agrees that if Mortgagee shall be prosecuting one or more foreclosure or other
proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Indebtedness, or if Mortgagee shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue foreclosure proceedings and exercise its other remedies
granted in this Mortgage against all or any part of the Mortgaged Property
<PAGE> 32
31
and Mortgagor waives any objections to the commencement or continuation of a
foreclosure of this Mortgage or exercise of any other remedies hereunder based
on such other proceedings or judgments, and waives any right to seek to dismiss,
stay, remove, transfer or consolidate either any action under this Mortgage or
such other proceedings on such basis. Neither the commencement nor continuation
of proceedings to foreclose this Mortgage nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee's right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Premises are located)
which directly or indirectly secures the Indebtedness, and Mortgagor expressly
waives any objections to the commencement of, continuation of, or entry of a
judgment in such other proceedings or exercise of any remedies in such
proceedings based upon any action or judgment connected to this Mortgage, and
Mortgagor also waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other proceedings or any action under this Mortgage on
such basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Mortgagee may, at its election, cause the sale of all
collateral which is the subject of a single foreclosure action at either a
single sale or at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of the parties to
dispose of and administer all collateral securing the Indebtedness (directly or
indirectly) in the most economical and least time-consuming manner.
36 Expenses; Indemnification. (a) Mortgagor shall pay or
reimburse Mortgagee for all expenses incurred by Mortgagee before and after the
date of this Mortgage with respect to any and all transactions contemplated by
this Mortgage including without limitation, the preparation of any document
reasonably required hereunder or any amendment, modification, restatement or
supplement to this Mortgage, the delivery of any consent, non-disturbance
agreement or similar document in connection with this Mortgage or the
enforcement of any of Mortgagee's rights. Such expenses shall include, without
limitation, all title and conveyancing charges, recording and filing fees and
taxes, mortgage taxes, intangible personal property taxes, escrow fees, revenue
and tax stamp expenses, insurance premiums (including title insurance premiums),
title search and title rundown charges, brokerage commissions, finders' fees,
placement fees, court costs, surveyors', photographers', appraisers',
architects', engineers', consulting professional's, accountants' and attorneys'
fees and disbursements. Mortgagor acknowledges that from time to time Mortgagor
may receive statements for such expenses, including without limitation
attorneys' fees and disbursements. Mortgagor shall pay such statements promptly
upon receipt.
(b) If (i) any action or proceeding shall be commenced by
Mortgagee (including but not limited to any action to foreclose this Mortgage or
to collect the Indebtedness), or any action or proceeding is commenced to which
Mortgagee is made a party, or in which it becomes necessary to defend or uphold
the lien of this Mortgage (including, without limitation, any proceeding or
other action relating to the bankruptcy, insolvency or
<PAGE> 33
32
reorganization of any Obligor), or in which Mortgagee is served with any legal
process, discovery notice or subpoena and (ii) in each of the foregoing
instances such action or proceeding in any manner relates to or arises out of
this Mortgage or Mortgagee's lending to Mortgagor or acceptance of a guaranty
from a Guarantor of the Indebtedness or of any of the Obligations or any of the
transactions contemplated by this Mortgage, then Mortgagor will immediately
reimburse or pay to Mortgagee all of the expenses which have been or may be
incurred by Mortgagee with respect to the foregoing (including reasonable
counsel fees and disbursements), together with interest thereon at the Default
Rate, and following the occurrence of a Default any such sum and the interest
thereon shall be a lien on the Mortgaged Property, prior to any right, or title
to, interest in or claim upon the Mortgaged Property attaching or accruing
subsequent to the lien of this Mortgage, and shall be deemed to be secured by
this Mortgage. In any action or proceeding to foreclose this Mortgage, or to
recover or collect the Indebtedness, the provisions of law respecting the
recovering of costs, disbursements and allowances shall prevail unaffected by
this covenant.
(c) Mortgagor shall indemnify and hold harmless Mortgagee and
Mortgagee's affiliates, and the respective directors, officers, agents and
employees of Mortgagee and its affiliates from and against all claims, damages,
losses and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) arising out of or based upon any matter related to this
Mortgage, the Mortgaged Property or the occupancy, ownership, maintenance or
management of the Mortgaged Property by Mortgagor, including, without
limitation, any claims based on the alleged acts or omissions of any employee or
agent of Mortgagor. This indemnification shall be in addition to any other
liability which Mortgagor may otherwise have to Mortgagee.
37 Successors and Assigns. All covenants of Mortgagor
contained in this Mortgage are imposed solely and exclusively for the benefit of
Mortgagee and its successors and assigns, and no other person or entity shall
have standing to require compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Mortgagee at any time if in its sole
discretion it deems such waiver advisable. All such covenants of Mortgagor shall
run with the land and bind Mortgagor, the successors and assigns of Mortgagor
(and each of them) and all subsequent owners, encumbrancers and tenants of the
Mortgaged Property, and shall inure to the benefit of Mortgagee, its successors
and assigns. The word "Mortgagor" shall be construed as if it read "Mortgagors"
whenever the sense of this Mortgage so requires and if there shall be more than
one Mortgagor, the obligations of the Mortgagors shall be joint and several.
38 No Waivers, etc. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict
<PAGE> 34
33
performance by Mortgagor of any and all of the terms and provisions of this
Mortgage to be performed by Mortgagor. Mortgagee may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Mortgaged Property, any part of the
security held for the obligations secured by this Mortgage without, as to the
remainder of the security, in anywise impairing or affecting the lien of this
Mortgage or the priority of such lien over any subordinate lien.
39 Governing Law, etc. This Mortgage shall be governed by and
construed and interpreted in accordance with the laws of the State of New York.
Mortgagor hereby irrevocably agrees that any legal action, suit, or proceeding
against it with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Mortgage or the other Loan
Documents or for recognition or enforcement of any judgment rendered in any such
action, suit or proceeding may be brought in the United States Courts for the
Southern District of New York, or in the courts of the State of New York, as
Mortgagee may elect, and, by execution and delivery of this Mortgage, Mortgagor
hereby irrevocably accepts and submits to the non-exclusive jurisdiction of each
of the aforesaid courts in persona, generally and unconditionally with respect
to any such action, suit or proceeding for itself and in respect of its
property. Mortgagor further agrees that final judgment against it in any action,
suit, or proceeding referred to herein shall be conclusive and may be enforced
in any other jurisdiction, by suit on the judgment, a certified or exemplified
copy of which shall be conclusive evidence of the fact and of the amount of its
indebtedness.
40 Waiver of Trial by Jury. Mortgagor and Mortgagee each
hereby irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Mortgage and for any counterclaim brought
therein. Mortgagor hereby waives all rights to interpose any counterclaim in any
suit brought by Mortgagee hereunder and all rights to have any such suit
consolidated with any separate suit, action or proceeding.
41 Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form and the
word "Mortgagor" shall mean "each Mortgagor or any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein," the word
"Mortgagee" shall mean "Mortgagee or any subsequent holder of the Note," the
word "Note" shall mean "the Note or any other evidence of indebtedness secured
by this Mortgage," the word "person" shall include any individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, or other entity, and the words "Mortgaged Property" shall include any
portion of the Mortgaged Property or interest therein. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa. The captions in this Mortgage are for
convenience or reference only and in no way limit or amplify the provisions
hereof.
<PAGE> 35
34
42 Nonresidential. THIS MORTGAGE DOES NOT COVER REAL PROPERTY
PRINCIPALLY IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT
MORE THAN SIX RESIDENTIAL DWELLING UNITS, EACH HAVING ITS OWN SEPARATE COOKING
FACILITIES.
This Mortgage has been duly executed by Mortgagor on the date
first above written.
GLIMCHER YORK ASSOCIATES LIMITED
PARTNERSHIP
By: Glimcher York, Inc., general partner
By: /s/ William G. Cornely
---------------------------------------
Name: William G. Cornely
Title: Senior Executive Vice
President/Chief Operating Officer and
Chief Financial Officer
<PAGE> 36
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 4TH day of December, 1998, before me personally came
William G. Cornely, to me known, who, being by me duly sworn, did depose and say
the [he] [she] resides at 20 S. Third Street; Columbus, Ohio; that he is the
Senior Executive Vice President, Chief Operating Officer and Chief Financial
Officer of Glimcher York, Inc., the corporation described in and which executed
the foregoing instrument as a general partner of Glimcher York Associates
Limited Partnership; and that he signed his name thereto by the authority of the
board of directors of said corporation.
Andrea Turner
------------------------
Notary Public 11/8/2001
[Notarial Stamp]
<PAGE> 37
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
<PAGE> 1
Exhibit 10.85
PROMISSORY NOTE
$19,000,000 November 1, 1998
FOR VALUE RECEIVED, GLIMCHER PROPERTIES LIMITED PARTNERSHIP, a
limited partnership formed under the laws of the State of Delaware (the
"Borrower"), promises to pay to the order of the NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY, a public body corporate and politic and governmental instrumentality
of the State of New Jersey (the "Authority"), the principal sum of NINETEEN
MILLION DOLLARS and to pay interest from the date of issuance of this Note on
the unpaid principal amount of this Note, such principal and interest to be paid
at the times, in the amounts and at the interest rates hereinafter provided.
This Note evidences the Borrower's indebtedness to the
Authority under a Loan Agreement, dated as of November 1, 1998 (the "Loan
Agreement"), by and between the Authority and the Borrower, which Loan Agreement
provides for the Authority to issue its Economic Development Bonds (Glimcher
Properties Limited Partnership Project) Series 1998 in the principal amount of
$19,000,000 (the "Bonds") and for the proceeds of the Bonds to be loaned to the
Borrower to pay costs of the project described in the Loan Agreement (the
"Project"). In order to provide a source of payment for and to secure the Bonds,
the Authority has transferred and assigned to the Trustee (as defined below)
this Note and the Loan Agreement and, accordingly, all interest and principal
payments due hereunder shall be paid in lawful money of the United States of
America to First Union National Bank, 21 South Street, Morristown, New Jersey
07960, Attention: Corporate Trust Department, as trustee (the "Trustee") under
an Indenture of Trust, dated as of November 1, 1998 (the "Indenture"), as the
assignee and holder of this Note, or at such other place as the Trustee or other
holder of this Note may designate in writing to the Authority and the Borrower.
The Borrower shall pay or cause to be paid the principal,
premium, if any, and interest on this Note at such times and in such amounts
which will permit the Authority to make timely payments of the principal of,
premium, if any, and interest on the Bonds.
Interest on this Note shall be computed and shall be payable
on the same terms and conditions as the interest on the Bonds, and all of the
terms and provisions of the Bonds pertaining thereto are incorporated by
reference herein.
In any case where the date of maturity of interest on or
principal of this Note or the date fixed for prepayment or redemption of this
Note shall be on a Saturday, Sunday, a day on which commercial banks in the city
in which the corporate trust office of the Trustee is located are authorized by
law to close, then payment of principal, premium, if any, or interest need not
be made on such date but may be made on the next succeeding Business Day (as
defined in the Loan Agreement) with the same force and effect as if made on the
date of maturity or the date fixed for redemption, and no interest shall accrue
for the period after such date.
<PAGE> 2
The Borrower shall also pay to the Trustee any and all other
sums which the Authority is obligated to pay to the Trustee under the terms and
provisions of the Indenture or the Loan Agreement.
This Note is subject to prepayment or redemption in the same
manner as the Bonds, and all of the terms and provisions of the Bonds pertaining
thereto are incorporated by reference herein.
Upon the occurrence of any Event of Default (as defined in the
Loan Agreement) the entire unpaid balance of the principal and accrued interest
on this Note may, at the option of the Trustee or Bondholders of not less than
51% in aggregate principal amount of Outstanding Bonds, as provided in the Loan
Agreement, become immediately due and payable in the manner, with the effect and
subject to the conditions provided in the Loan Agreement.
This Note is subject to all of the terms and conditions of the
Loan Agreement, which are hereby incorporated herein, with the same effect as if
the Loan Agreement were fully set forth herein. Reference is hereby made to the
Loan Agreement, executed counterparts of which are on file with the Authority,
the Borrower and the Trustee, for a description of the security for the Note,
the rights and obligations of the Borrower and the Authority in connection with
the Project and the loan made to finance the Project, and other matters
affecting the indebtedness evidenced by this Note.
The Borrower and any endorsers hereof severally waive
presentment, demand, protest and notice (other than notices provided for in the
Loan Agreement or as required by law).
[The remainder of this page has been left blank intentionally.]
-2-
<PAGE> 3
IN WITNESS WHEREOF, the Borrower has caused this Note to be
duly executed on its behalf as of the date above.
[SEAL] GLIMCHER PROPERTIES LIMITED
PARTNERSHIP
Attest: By: Glimcher Properties Corporation,
its sole general partner
By: /s/ William G. Cornely By: /s/ George A. Schmidt
------------------------------- -------------------------------
William G. Cornely George A. Schmidt
Senior Executive Vice President Senior Vice President
-3-
<PAGE> 4
Pay To The Order of First Union National Bank, as Trustee,
Without Recourse.
[SEAL]
ATTEST: NEW JERSEY ECONOMIC DEVELOPMENT
AUTHORITY
/s/ Frank T. Mancini, Jr. By: /s/ Caren S. Franzini
- ------------------------------ ----------------------------------
Frank T. Mancini, Jr. Caren S. Franzini
Assistant Secretary Executive Director
-4-
<PAGE> 1
Exhibit 21.1
LIST OF SUBSIDIARIES
GLIMCHER REALTY TRUST ("GRT") HAS THE FOLLOWING SUBSIDIARIES:
1. Glimcher Properties Corporation, a Delaware corporation (100% shareholder);
2. Glimcher Properties Limited Partnership, a Delaware limited partnership
(approximately 90% limited partnership interest);
3. Glimcher Johnson City, Inc., a Delaware corporation (100% shareholder);
4. Glimcher Dayton Mall, Inc. a Delaware corporation (100% shareholder);
5. Glimcher Colonial Trust, a Delaware business trust (100% shareholders);
6. Glimcher Colonial Park Mall, Inc., a Delaware corporation (100%
shareholder);
7. Glimcher Tampa, Inc., a Delaware corporation (100% shareholder);
8. Glimcher Auburn, Inc., a Delaware corporation (100% shareholder);
9. Glimcher Weberstown, Inc., a Delaware corporation (100% shareholder);
10. Glimcher Blaine, Inc., a Delaware corporation (100% shareholder);
11. Glimcher Montgomery, Inc., a Delaware corporation (100% shareholder); and
12. Glimcher Portland, Inc., a Delaware corporation (100% shareholder).
GLIMCHER PROPERTIES CORPORATION HAS THE FOLLOWING SUBSIDIARIES:
1. Glimcher Holdings, Inc., a Delaware corporation (100% shareholder);
2. Glimcher Centers, Inc., a Delaware corporation (100% shareholder);
3. Glimcher Grand Central, Inc., a Delaware corporation (100% shareholder);
4. Glimcher York, Inc., a Delaware corporation (100% shareholder); and
5. Glimcher Morgantown Mall, Inc., an Ohio corporation (100% shareholder).
GLIMCHER PROPERTIES LIMITED PARTNERSHIP HAS THE FOLLOWING SUBSIDIARIES:
1. Glimcher Holdings Limited Partnership, a Delaware limited partnership (99%
limited partnership interest);
2. Glimcher Centers Limited Partnership, a Delaware limited partnership (99%
limited partnership interest);
3. Grand Central Limited Partnership, a Delaware limited partnership (99%
limited partnership interest);
4. Glimcher York Associates Limited Partnership, a Delaware limited
partnership (99% limited partnership interest);
<PAGE> 2
5. Glimcher University Mall Limited Partnership, a Delaware limited
partnership (99% limited partnership interest);
6. Morgantown Mall Associates Limited Partnership, an Ohio Limited partnership
(99% limited partnership interest);
7. Olathe Mall LLC, a Colorado limited liability company (approximately 82%
member interest);
8. Johnson City Venture LLC, a Delaware limited liability company
(approximately 32% member interest);
9. Dayton Mall Venture LLC, a Delaware limited liability company (39% member
interest);
10. Colonial Park Mall Limited Partnership, a Delaware limited partnership (39%
limited partners);
11. Glimcher New Jersey Metro Mall LLC, a Delaware limited liability company
(50% member interest);
12. Glimcher Development Corporation, a Delaware corporation (95% shareholder);
13. Weberstown Mall, LLC, a Delaware limited liability company (99% member
interest);
14. Glimcher Northtown Venture, LLC, a Delaware limited liability company (99%
member interest);
15. Montgomery Mall Associates Limited Partnership, a Delaware limited
partnership (99% limited partnership interest);
16. Glimcher Lloyd Venture, LLC, a Delaware limited liability company (99%
member interest);
17. Glimcher SuperMall Venture, LLC a Delaware limited liability company
(approximately 34% member interest);
18. San Mall, LLC, a Delaware limited liability company (20% member interest);
19. Polaris Center, LLC, a Delaware limited liability company (50% member
interest); and
20. Eastland Mall, LLC, a Delaware limited liability company (20% member
interest).
<PAGE> 1
Exhibit 23.1
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,
333-43319 and 333-61339), and on Forms S-8 (File Nos. 33-94542 and 333-10221) of
our report dated February 15, 1999, on our audits of the consolidated financial
statements and financial statement schedule of Glimcher Realty Trust as of
December 31, 1998 and 1997, and for the years ended December 31, 1998, 1997 and
1996, which is included in this Annual Report on Form 10-K of Glimcher Realty
Trust.
PricewaterhouseCoopers LLP
Columbus, Ohio
March 30, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 8,949
<SECURITIES> 0
<RECEIVABLES> 29,050
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,428,641
<DEPRECIATION> 137,229
<TOTAL-ASSETS> 1,558,495
<CURRENT-LIABILITIES> 0
<BONDS> 994,011
90,000
127,950
<COMMON> 237
<OTHER-SE> 443,346
<TOTAL-LIABILITY-AND-EQUITY> 1,558,495
<SALES> 0
<TOTAL-REVENUES> 184,091
<CGS> 0
<TOTAL-COSTS> 43,154
<OTHER-EXPENSES> 45,836
<LOSS-PROVISION> 1,670
<INTEREST-EXPENSE> 48,823
<INCOME-PRETAX> 41,480
<INCOME-TAX> 0
<INCOME-CONTINUING> 41,480
<DISCONTINUED> 0
<EXTRAORDINARY> 490
<CHANGES> 0
<NET-INCOME> 40,990
<EPS-PRIMARY> 0.88
<EPS-DILUTED> 0.88
</TABLE>
