Massachusetts-Marlborough-Solomon Pond Corporate Center Leasehold Mortgage and Security Agreement [Mortgage No. 2] - Waterford Park LLC and Sepracor Inc.
Location of Property:
Town of Marlborough
County of Middlesex
Commonwealth of Massachusetts
Dated as of January 30, 2001
LEASEHOLD MORTGAGE AND SECURITY AGREEMENT
("Second Mortgage")
From
WATERFORD PARK, LLC, as Mortgagor
to
SEPRACOR, INC., as Mortgagee
This instrument was prepared by and, after
recording, please return to:
Thomas Howard Brown, P.C.
Nixon Peabody LLP
101 Federal Street
Boston, MA 02110
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TABLE OF CONTENTS
Page
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ARTICLE I SECURED OBLIGATIONS..................................................2
1.1 Security...............................................................2
1.2 Secured Obligations....................................................2
ARTICLE II GRANT OF MORTGAGED PROPERTIES.......................................2
2.1 Mortgaged Property.....................................................2
2.2 Release of Mortgage....................................................5
ARTICLE III SECURITY AGREEMENT.................................................6
3.1 Grant of Security Interest.............................................6
3.2 Covenants of Debtor....................................................6
ARTICLE IV CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR .....7
4.1 Payment of Indebtedness................................................8
4.2 Title..................................................................8
4.3 Maintenance of Existence; Due Authorization; Compliance with Laws;
Etc...................................................................8
4.4 Compliance With Law and Insurance Requirements; Maintaining Permits;
Etc...................................................................9
4.5 Taxes and other Charges; Deposits with Mortgagee......................10
4.6 Discharge of Liens....................................................11
4.7 Contest of Impositions................................................12
4.8 Mortgagee's Taxes.....................................................12
4.9 Use of Mortgaged Property.............................................12
4.10 Maintenance of Mortgaged Property..................................13
4.11 Maintenance of Personal Property...................................13
4.12 Alterations........................................................13
4.13 Waste..............................................................14
4.14 Insurance..........................................................14
4.15 Damage or Destruction..............................................18
4.16 Condemnation; Knowledge of Proceedings.............................19
4.17 General Right of Entry.............................................21
4.18 Separate Tax Lots..................................................22
4.19 Books of Account; Financial Statements.............................22
4.20 Limitations on Transfer............................................24
4.21 Recording, Filing and Perfection of Security Interests; Fees.......24
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4.22 Further Acts and Assurances........................................24
ARTICLE V EVENTS OF DEFAULT...................................................25
5.1 Events of Default.....................................................25
ARTICLE VI REMEDIES AND RELATED MATTERS.......................................25
6.1 Remedies..............................................................25
6.2 Foreclosure and Sale; Application of Proceeds; Waiver of Right of
Redemption; Etc......................................................26
6.3 No Conditions Precedent to Exercise of Remedies.......................31
6.4 No Merger.............................................................31
6.5 Remedies Cumulative...................................................31
6.6 Mortgagee's Performance of Mortgagor's Obligations....................32
ARTICLE VII MISCELLANEOUS.....................................................32
7.1 Enforceability........................................................32
7.2 Maximum Rate of Interest..............................................32
7.3 Notices...............................................................34
7.4 No Release............................................................35
7.5 Attorneys' Fees and Costs of Mortgagee................................35
7.6 Brokerage.............................................................35
7.7 Indemnification.......................................................35
7.8 Environmental Matters.................................................37
7.9 Limitations on Recourse...............................................37
7.10 Estoppel Certificates..............................................37
7.11 Effect of Extensions and Amendments................................38
7.12 No Joint Venture...................................................38
7.13 Funds Held in Accounts.............................................38
7.14 Expenses of Mortgagee..............................................38
7.15 Governing Law......................................................38
7.16 Captions and Pronouns..............................................38
7.17 Amendments, Waivers, Etc...........................................39
7.18 Entire Agreement; Controlling Provisions...........................39
7.19 Covenants Running With the Land; Successors and Assigns............39
7.20 Statutory Condition................................................39
7.21 Forbearance; Subordination.........................................39
EXHIBIT A: LAND DESCRIPTION.................................................1
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This LEASEHOLD MORTGAGE AND SECURITY AGREEMENT (hereinafter called the
"Second Mortgage") is made as of the 30th day of January, 2001, by WATERFORD
PARK, LLC, a Massachusetts limited liability company ("Mortgagor"), having a
principal place of business c/o Waterford Development Corp., 175 Highland
Avenue, Needham, Massachusetts 02494, as Mortgagor, to SEPRACOR, INC., a
Delaware corporation having an address at 111 Locke Drive, Marlborough,
Massachusetts 01752, and any subsequent holder of the Secured Obligations
hereinafter set forth (all of whom shall be included within the term "Mortgagee"
as used herein), as Mortgagee, Assignee, and Secured Party, as more fully
hereinafter set forth.
W I T N E S S E T H:
WHEREAS, Mortgagee has loaned (the "Loan") to Mortgagor the aggregate
principal amount of SIX MILLION FOUR HUNDRED FIFTY-EIGHT THOUSAND FIVE HUNDRED
NINETY-SEVEN and 00/100 Dollars ($6,458,597.00), evidenced by a note, dated
January 30, 2001, in such amount (the "Note"); and
WHEREAS, Mortgagor alone, or Mortgagor and/or certain other parties, as
the case may be, have executed and delivered to Mortgagee simultaneously with
the execution and delivery of the Note, a Loan Agreement (Second Lien) dated as
of January 30, 2001 (the "Second Loan Agreement"), an Environmental Indemnity
Agreement dated as of January 30, 2001 (the "Indemnity Agreement"), a Joint and
Several Limited Guaranty Agreement dated as of January 30, 2001 (the
"Guaranty"), an Assignment of Leases and Rents dated as of January 30, 2001 (the
"Assignment of Leases") and Collateral Assignment of Contracts, Licenses,
Permits, Agreements, Warranties and Approvals dated as of January 30, 2001 (the
"Assignment of Contracts");
WHEREAS, simultaneously with the execution and delivery of the Note, the
Second Loan Agreement, the Indemnity Agreement, the Guaranty, the Assignment of
Leases and the Assignment of Contracts, Mortgagor has entered into this Second
Mortgage with Mortgagee to secure, among other things, the payment of the Note,
the obligations and payments of Mortgagor under the Second Loan Agreement, the
Indemnity Agreement, the Guaranty, the Assignment of Leases and the Assignment
of Contracts, and all of the advances made and which may be made under the
Second Mortgage covering all of the interests of Mortgagor in and to the
Mortgaged Property (as hereinafter defined);
WHEREAS, Mortgagor and/or certain other parties, as the case may be, have
executed and delivered to Mortgagee simultaneously with the execution of the
Note and Second Loan Agreement, a Note, First Loan Agreement (First Lien) and
Leasehold Mortgage and Security Agreement (the "Mortgage") for the principal
amount of $20,860,000.
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
SECURED OBLIGATIONS
1.1 Security. This Second Mortgage is executed and delivered by Mortgagor
to secure the payment and performance of certain indebtedness, liabilities and
obligations owing and to become owing to or in favor of Mortgagee, as follows:
1.1.1 The outstanding principal balance of the Note, payable to the
order of Mortgagee in the aggregate original principal amount of SIX MILLION and
00/100 Dollars ($6,000,000.00), together with all interest accruing thereon,
being payable in the amounts, at the interest rates and on the dates stipulated
therein and in the Second Loan Agreement, said Note being dated January 30,
2001;
1.1.2 Any and all other amounts, liabilities, and obligations for
which or for the performance of which Mortgagor may become indebted or obligated
under the terms of this Second Mortgage, the Note, the Second Loan Agreement,
the Indemnity Agreement, the Assignment of Leases and the Assignment of
Contracts and any other documents, instruments, recordings or filings that may
hereafter be entered into by and between Mortgagor and Mortgagee or may be
executed and delivered by Mortgagor on behalf of Mortgagee in connection with
the Loan (this Second Mortgage, the Note, the Second Loan Agreement, the
Indemnity Agreement, the Assignment of Leases and the Assignment of Contracts
and all such documents, instruments, recordings and filings are herein
collectively referred to as the "Loan Documents", but the First Mortgage Loan
Documents (as defined in the Loan Agreement) shall not be included in the Loan
Documents);
1.1.3 Any and all renewals, increases, rearrangements,
modifications, supplements, restatements and extensions of the foregoing items
of indebtedness and obligations.
1.2 Secured Obligations. Each and every item of indebtedness described and
included in this Second Mortgage is intended to be fully secured by the liens,
assignments, and security interests created under and by virtue of this Second
Mortgage; and all such items so secured (now or hereafter existing) are
hereinafter collectively called the "Secured Obligations." Secured Obligations
do not, however, include any obligation of Borrower to Lender set forth in the
First Mortgage Loan Documents or the Tenant Lease (hereinafter defined).
ARTICLE II
GRANT OF MORTGAGED PROPERTIES
2.1 Mortgaged Property. For the purposes and trusts hereinafter set forth,
and for TEN AND 0O/000 DOLLARS ($10.00) and other good and valuable
consideration paid to Mortgagor, the receipt and sufficiency of which are hereby
acknowledged, Mortgagor has GRANTED and by these presents does GRANT unto
Mortgagee, WITH MORTGAGE
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COVENANTS, all the following described property (collectively, the "Mortgaged
Property"), to wit:
2.1.1 All of Mortgagor's right, title and interest in and to those
certain tracts, pieces and parcels of land described in Exhibit A attached
hereto and hereby made a part hereof (the "Land") (the State in which the Land
is located is sometimes hereinafter referred to as the "Jurisdiction"), as
lessee under the Ground Lease dated as of January 30, 2001, from HILLSIDE
SCHOOL, INC., a Massachusetts non-profit corporation ("Fee Owner"), as landlord,
and Mortgagor as tenant (the "Ground Lease"), a notice of the Ground Lease being
recorded with the Middlesex South District Registry of Deeds herewith;
2.1.2 All of Mortgagor's right, title and interest in and to all
structures, improvements, buildings and any additions and alterations thereto or
replacements thereof, now or hereafter erected upon the Land (all of the
foregoing being collectively referred to as the "Improvements"), and in
addition, all of Mortgagor's right, title and interest in and to all equipment,
apparatus, furnishings, furniture, machinery, fixtures of every kind and nature
whatsoever (the "Personal Property") now or hereafter located in and about said
Improvements, including without limitation all fixtures, fittings, appliances,
apparatus, equipment, machinery, furnishings and articles of personal property
now or hereafter attached or affixed to, placed upon or used in any way in
connection with the use, enjoyment, operation or occupancy of the Improvements,
including without limitation all landscaping and gardening equipment, all
heating and incinerating apparatus and equipment whatsoever, all boilers,
engines, motors, dynamos, generating equipment, piping and plumbing fixtures,
ranges, cooking utensils and apparatus and mechanical kitchen equipment,
refrigerators, cooling, ventilating, sprinkling and vacuum cleaning systems,
fire extinguishing and prevention apparatus, gas and electrical fixtures,
elevators, escalators, partitions, lockers, cabinets, window covering and all
hardware therefor, carpeting and other floor coverings, lighting fixtures, lamps
and office furniture, window shades, blinds, screens, storm sashes, awnings,
furnishings of public spaces, halls and lobbies and shrubbery and plants, all of
which property mentioned in this paragraph shall be deemed part of the realty
mortgaged hereby (the Land, the Improvements and the Personal Property being
collectively referred to herein as the "Premises"). Notwithstanding the
agreement hereinabove expressed that certain articles of property form a part of
the realty covered by this Second Mortgage and be appropriated to its use and
deemed to be realty, to the extent that such agreement and declaration may not
be effective and that any of said articles may constitute goods (as said term is
used in the Uniform Commercial Code as enacted in the Jurisdiction), this
instrument shall constitute a security agreement, creating a security interest
in such goods, as collateral, in Mortgagee as a secured party and Mortgagor as
debtor, all in accordance with said Uniform Commercial Code, as more
particularly set forth in Article III hereof;
2.1.3 All of Mortgagor's estate, of whatever nature, in and to all
of the easements, rights, privileges, appurtenances, air rights and development
rights now or hereafter belonging or in any wise appertaining to the Premises
(the "Appurtenant Rights"), and all of the estate, right, title, interest, claim
or demand whatsoever, either in law or in equity, in possession or expectancy of
Mortgagor therein and in the streets and
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ways, open or proposed, adjacent thereto, and in and to all strips and gores,
vaults, alleyways, sidewalks and passages used in connection with the Land;
2.1.4 All of Mortgagor's right, title and interest in all reserves
and/or escrow accounts or the like maintained with respect to the Mortgaged
Property and whether held by or in the name of either Mortgagor or Mortgagee,
all inventory accounts, accounts receivable, contract rights, general
intangibles, chattel paper, instruments, documents, Note, drafts, letters of
credit and insurance policies (including without limitation environmental and/or
flood insurance policies) arising from or related to the Premises (collectively,
the "Accounts") and including all replacements and substitutions for, or
additions to, all products and proceeds of any of the foregoing;
2.1.5 All of Mortgagor's interest in all agreements, contracts,
certificates, instruments and other documents, now or hereafter entered into,
pertaining to the construction, operation or management of the Premises and all
right, title and interest of Mortgagor, therein;
2.1.6 All unearned premiums accrued or to accrue under all insurance
policies for the Premises obtained by Mortgagor, all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or liquidated
claims, proceeds of insurance and condemnation awards, and all rights of
Mortgagor to refunds of real estate taxes and assessments with respect to the
Premises (the "Proceeds");
2.1.7 A non-exclusive right to Mortgagor's right, title and interest
in and to all trade names, trademarks and service marks now or hereafter used in
connection with the Premises or any part thereof or any other part of the
Premises, together with good will appurtenant thereto;
2.1.8 All of Mortgagor's right, title and interest in and to all
leases, subleases, lettings, licenses and other occupancy agreements, and
guarantees thereof, for the Premises or any part thereof including without
limitation the Lease dated as of January 30, 2001 between Mortgagor, as landlord
and Sepracor, Inc., as tenant (the "Tenant Lease") (collectively, "Leases" and,
individually, a "Lease"), including any cash or other security deposited
thereunder, and the rents, issues, profits, revenue, royalties (collectively the
"Rents") payable under the Leases; the Tenant Lease being a Permitted Exception
(as hereinafter defined);
2.1.9 All of Mortgagor's right, title and interest in and to all of
the books, computer software, records and files of or relating to the Premises
now or hereafter maintained by Mortgagor or for its account;
2.1.10 All of Mortgagor's right, title and interest in and to all
awards and claims for damages made and to be made for the taking by eminent
domain of the whole or any part of the Premises, including without limitation
any awards for change of grade of streets, all of which awards Mortgagor hereby
assigns to Mortgagee;
2.1.11 All of Mortgagor's right, title and interest in and to all
licenses, permits, and warranties attributable, allocable or relating to all or
any portion of the
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Premises, both real and personal, but only to the extent such licenses, permits
and warranties may be assigned, transferred or pledged without violation of the
terms thereof; and
2.1.12 All of Mortgagor's right, title and interest in and to all
mineral, water, oil and gas rights and privileges and royalties pertaining to
the Premises;
2.1.13 This Mortgage and the lien hereof (i) is subject and
subordinate to all rights of Sepracor, Inc. in and to the "Specialized Leasehold
Improvements", and (ii) do not encumber or create any security interest in any
personal property owned by Sepracor, Inc. and located in the Improvements.
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee and its
substitutes or successors forever, and Mortgagor does hereby bind itself, its
successors, assigns, executors and administrators to warrant and forever defend
all and singular the Mortgaged Property unto Mortgagee, its successors and
assigns, against every person whomsoever lawfully claiming or to claim an
interest in the same, or any part thereof. Subject only to the specific matters
set forth in Schedule B, Section 2 of the Commitment for Title Insurance issued
by Chicago Title Insurance Company, No. 2051-25071, as approved by Mortgagee,
and any future matters expressly permitted by this Second Mortgage, the Second
Loan Agreement or the Assignment of Leases or approved in writing by Mortgagee
as permitted exceptions (collectively, "Permitted Exceptions"). Permitted
Exceptions include taxes which are a lien on the Premises but are not delinquent
and any Leases permitted under the Assignment of Leases.
2.2 Release of Mortgage. This conveyance, however, is intended as a
mortgage and security agreement and is made upon the following trust, terms, and
conditions, to wit: In the event Mortgagor shall perform and pay the Secured
Obligations (including payment of all principal and interest, and all charges,
disbursements and fees of Mortgagee's attorneys, if any, owing or to become
owing thereon) to Mortgagee in accordance with the applicable Loan Documents,
then this Second Mortgage shall be null and void and shall be released at
Mortgagor's sole cost and expense; otherwise this Second Mortgage shall continue
in full force and effect.
2.3 Prior Mortgages. Mortgagor shall perform all of Mortgagor's
obligations under any mortgage or other security agreement with a lien that has
priority over this Second Mortgage, including Mortgagor's covenants to make
payments when due. Mortgagor shall pay or cause to be paid all taxes,
assessments, and other charges, fines and impositions attributable to the
Premises which may attain priority over this Second Mortgage, and leasehold
payments or ground rents, if any. This Second Mortgage, and the lien hereof, is
subordinate to the First Mortgage, and the lien thereof.
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ARTICLE III
SECURITY AGREEMENT
3.1 Grant of Security Interest. Without limiting any of the other
provisions of this Second Mortgage, Mortgagor, as Debtor (referred to in this
Article III as "Debtor," whether one or more), expressly GRANTS unto Mortgagee,
as Secured Party (referred to in this Article III as "Secured Party," whether
one or more), a security interest in all the Mortgaged Property (including both
those now and those hereafter existing) to the full extent that any portion of
the Mortgaged Property may be subject to the Uniform Commercial Code as enacted
in the Jurisdiction (hereinafter referred to as the "Uniform Commercial Code").
3.2 Covenants of Debtor. Debtor covenants and agrees with Secured Party
that:
3.2.1 In addition to any other remedies granted in this Second
Mortgage to Secured Party (including specifically, but not limited to, the right
to proceed against the Mortgaged Property in accordance with the rights and
remedies in respect of the Mortgaged Property which are real property pursuant
to the Uniform Commercial Code), Secured Party may, should an Event of Default
(as defined in Article V hereof) occur and be continuing, proceed under the
Uniform Commercial Code as to all or any part of the personal property (tangible
or intangible) and fixtures included in the Mortgaged Property (such portion of
the Mortgaged Property being referred to in this Article III as the
"Collateral"), and shall have and may exercise with respect to the Collateral
all the rights, remedies, and powers of a secured party under the Uniform
Commercial Code, including without limitation the right and power to sell, at
one or more public or private sales, or otherwise dispose of, lease, or utilize
the Collateral and any part or parts thereof in any manner authorized or
permitted under the Uniform Commercial Code after default by a debtor. Without
limiting the foregoing, Secured Party shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
and sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in Debtor, whether on Land or elsewhere.
Debtor further agrees to allow Secured Party to use or occupy the Mortgaged
Property, without charge, for the purpose of perfecting any of Secured Party's
remedies in respect of the Collateral. The net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
actual expenses of every kind incurred therein or incidental to the care,
safekeeping or otherwise of any or all of the Collateral or in any way relating
to the rights of Secured Party hereunder, including all attorneys' charges,
disbursements and reasonable fees, shall be received by Secured Party and
credited against the payment in whole or in part of the indebtedness secured
hereby. To the extent permitted by applicable law, Debtor waives all claims,
damages, and demands against Secured Party arising out of the repossession,
retention or sale of the Collateral, except for claims, damages and demands due
to the gross negligence or willful misconduct of Secured Party (including its
agents, employees and contractors) in dealing with such Collateral. Mortgagor
agrees that Secured Party need not give more than ten (10) days' notice of the
time and place or any public sale or of the time at which a private sale will
take place and that such notice is reasonable notification of such matters.
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3.2.2 Debtor hereby authorizes Secured Party to file financing and
continuation statements with respect to the Collateral without the signature of
Debtor whenever lawful, and Debtor irrevocably constitutes and appoints each of
Secured Party, and each of the officers of Secured Party, as Debtor's
attorney-in-fact coupled with an interest for such purpose; and Debtor agrees to
execute such financing and continuation statements as Secured Party may
reasonably request.
3.2.3 Debtor hereby represents and warrants that no financing
statement (other than financing statements which will be terminated promptly
following the date hereof and financing statements showing Secured Party as the
sole secured party, or with respect to liens or encumbrances, if any, expressly
permitted by this Second Mortgage covering any of the Collateral or any proceeds
thereof) is on file in any public office except pursuant hereto; and Debtor will
at its own cost and expense, upon demand, furnish to Secured Party such further
information and will execute and deliver to Secured Party such financing
statements and other documents in form reasonably satisfactory to Secured Party
and will do all such acts as Secured Party may at any time or from time to time
reasonably request or as may be necessary or reasonably appropriate to establish
and maintain a perfected security interest in the Collateral as security for the
Secured Obligations, subject to no other liens or encumbrances, other than liens
or encumbrances benefiting Secured Party and no other party and to liens and
encumbrances (if any) expressly permitted by this Second Mortgage or the Second
Loan Agreement; and Debtor will pay the actual expense of filing or recording
such financing statements or other documents, and this instrument, in all public
offices wherever filing or recording is reasonably deemed by Secured Party to be
desirable.
3.2.4 To the extent permitted by applicable law, the security
interest created hereby is specifically intended to cover all rents, royalties,
issues and profits, and all inventory accounts, accounts receivable and other
revenues of the Mortgaged Property.
3.2.5 Certain of the Collateral is or will become "fixtures" (as
that term is defined in the Uniform Commercial Code) on the Land and
Improvements, and this Mortgage upon being filed for record in the Middlesex
South District Registry of Deeds shall operate also as a financing statement and
fixture filing upon such of the Collateral which is or may become fixtures.
3.2.6 Any copy of this Second Mortgage which is signed by Debtor or
any carbon, photographic or other reproduction of this Second Mortgage may also
serve as a financing statement under the Uniform Commercial Code by Debtor,
whose address is set forth hereinabove, in favor of Secured Party, whose address
is set out hereinabove.
ARTICLE IV
CERTAIN REPRESENTATIONS, WARRANTIES
AND COVENANTS OF MORTGAGOR
Mortgagor hereby represents and warrants to and covenants with Mortgagee
as follows:
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4.1 Payment of Indebtedness. Mortgagor shall (a) punctually pay the
Secured Obligations at the time and place and in the manner specified in the
Loan Documents, according to the true intent and meaning thereof, all in such
coin or currency of the United States of America which at the time of such
payment shall be legal tender for the payment of public and private debts, and
(b) timely, fully and faithfully perform, discharge, observe and comply with
each and all of Mortgagor's obligations to be performed under the Loan
Documents. Mortgagor hereby represents and warrants that, as of the date hereof,
there exist no offsets, counterclaims or defenses against the Secured
Obligations.
4.2 Title. Mortgagor has and will at all times have (subject to the
further provisions of this Second Mortgage) a valid and subsisting leasehold
estate in and to the Mortgaged Property as lessee under the Ground Lease,
subject to no lien, pledge, mortgage, mechanic's or materialman's lien, deed of
trust, security interest, claim, lease, charge, option, right of first refusal,
easement, restrictive covenant, encumbrance or other restriction, limitation,
charge or right of others of any kind whatsoever (collectively, "Liens"), other
than the Permitted Exceptions. Mortgagor will pay and perform, in timely manner,
all obligations of the tenant under the Ground Lease. This Second Mortgage is
and will at all times remain a valid and enforceable first lien on such
leasehold estate in the Mortgaged Property, subject only to the Permitted
Exceptions. Subject to the Permitted Exceptions, Mortgagor hereby covenants and
agrees that it will preserve such title, and will forever warrant and defend the
same to Mortgagee, its successors and assigns, and will forever warrant and
defend the validity and priority of the lien of this Second Mortgage against the
claims of all persons and parties whomsoever.
4.3 Maintenance of Existence; Due Authorization; Compliance with Laws;
Etc.
4.3.1 Mortgagor is and shall remain a limited liability company
validly organized and existing under the laws of The Commonwealth of
Massachusetts, and Mortgagor covenants that it will do or cause to be done all
things necessary to preserve and keep in full force and effect the existence,
rights and privileges of Mortgagor as a limited liability company under the laws
of such commonwealth. Mortgagor now has and shall continue to have the full
right, power and authority to operate and lease the Premises, to encumber the
Mortgaged Property as provided herein and to perform all of the other
obligations to be performed by Mortgagor under the Loan Documents. Mortgagor is
solvent, and no bankruptcy, reorganization, insolvency or similar proceeding
under any state or federal law with respect to Mortgagor has been initiated.
4.3.2 The execution and delivery of the Loan Documents by the
Mortgagor, and performance by Mortgagor of its obligations thereunder have been
duly authorized by all necessary action on the part of Mortgagor and its
constituent entities, and do not and will not violate any law or any regulation,
order, writ, injunction or decree of any court or governmental or
quasi-governmental body, agency or other instrumentality (collectively,
"Governmental Authorities") applicable to Mortgagor or the Mortgaged Property
(collectively, "Laws"), or result in a breach of any of the terms, conditions or
provisions of, or constitute a default under, or (except as created by this
Second Mortgage and/or the other Loan Documents) result in the creation or
imposition of any lien of any nature whatsoever upon any of the assets of
Mortgagor pursuant to the terms of, any mortgage,
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deed of trust, indenture, agreement or instrument to which Mortgagor is a party
or by which it or any of its properties is bound.
4.3.3 All authorizations, consents and approvals of, notices to,
registrations or filings with, or other actions in respect of or by any
Governmental Authority, required in connection with (i) the execution and
delivery of the Loan Documents by the Mortgagor have been, or concurrently
herewith will be, duly obtained, given or taken and are in full force and
effect, and (ii) the performance by Mortgagor of its obligations thereunder have
been, or will be in timely manner, duly obtained, given or taken and are, or
will be in timely manner, in full force and effect.
4.3.4 No material default has occurred and is continuing under any
indenture or other material agreement or instrument to which Mortgagor is a
party or by which its property is bound, including without limitation the Ground
Lease.
4.3.5 Mortgagor is and shall remain a single asset entity and agrees
that it will not engage in any activities or acquire any interest in any
property other than the Mortgaged Property (including future Improvements and
Fixtures thereto, if any) without the prior written consent of Mortgagee which
consent may be withheld in Mortgagee's sole discretion.
4.4 Compliance With Law and Insurance Requirements; Maintaining Permits;
Etc.
4.4.1 Mortgagor, at no cost or expense to Mortgagee and subject to
the tenant's rights under the Tenant Lease, shall promptly comply with (or cause
to be complied with) in all material regards all Laws, and all orders, rules and
regulations (collectively, "Orders") of the National and Local Boards of Fire
Underwriters or any other body or bodies exercising similar functions, foreseen
or unforeseen, ordinary as well as extraordinary, applicable to the Mortgaged
Property or any part thereof, or to the use or manner of use of the Mortgaged
Property or the owners, tenants or occupants thereof, whether or not any such
Laws or Orders shall necessitate structural changes or improvements or interfere
with the use or enjoyment of the Mortgaged Property. Mortgagor shall also
procure, pay for and maintain (or cause to be procured, paid for and maintained)
all permits, licenses, approvals and other authorizations, necessary for the
operation of its business at the Premises and the lawful use and occupancy of
the Premises, or any part thereof, in connection therewith.
4.4.2 Mortgagor shall, at no cost or expense to Mortgagee, observe
and comply (or cause to be observed and complied with) in all material respects
with the requirements of the policies of public liability, fire and all other
insurance at any time in force with respect to the Mortgaged Property, and
Mortgagor shall, in the event of any violation or attempted violation of the
provisions of this subsection or subsection 4.4.1 by any occupant of any portion
of the Premises, take steps, immediately upon actual knowledge of such violation
or attempted violation, to remedy or prevent the same, as the case may be.
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4.4.3 Mortgagor shall have the right, with Notice to Mortgagee, to
contest by appropriate legal proceedings, diligently conducted in good faith, in
the name of Mortgagor, the validity or application of any Laws, Orders or other
matters of the nature referred to in subsection 4.4.1, subject to the following:
(i) If by the terms of any such Law, Order or other matter,
compliance therewith pending the prosecution of any such proceeding may legally
be delayed without subjecting Mortgagor or Mortgagee to any liability (other
than for the payment or accrual of interest and civil penalties), civil or
criminal, for failure so to comply therewith, or if any lien, charge or civil
liability would be incurred by reason of any such delay, the same would not
subject the Mortgaged Property or any part thereof to forfeiture, loss or
suspension of operations, and Mortgagor (a) furnishes Mortgagee security
reasonably satisfactory to Mortgagee against any loss or injury by reason of
such contest or delay, and (b) prosecutes the contest with due diligence, then
Mortgagor may delay compliance therewith until the final determination of any
such proceeding.
Mortgagor covenants that Mortgagee shall not suffer or sustain any
liabilities or expenses by reason of any act or thing done or omitted to be done
by Mortgagor pursuant to this subsection and that Mortgagor shall indemnify and
hold harmless Mortgagee from any such liability or expense.
4.5 Taxes and other Charges; Deposits with Mortgagee.
4.5.1 Subject to the provisions of Section 4.7 hereof, and subject
to the tenant's rights under the Tenant Lease, Mortgagor, from time to time when
the same shall become due and payable and before any fine, penalty or additional
interest may be added or imposed for late payments, will pay and discharge, or
cause to be paid and discharged, all of the following to the extent that they
are or may become a lien on the Mortgaged Property: taxes of every kind and
nature (including real and personal property taxes and income, franchise,
withholding, profits and gross receipts taxes), all general and special
assessments, levies, permits, inspection and license fees, all water and sewer
rents and charges, and all other public charges, whether of a like or different
nature, and any easement fees or charges, imposed upon or assessed against the
Mortgaged Property or any part thereof or upon the revenues, rents, issues,
income and profits of the Mortgaged Property or arising in respect of the
occupancy, use, possession or sale thereof (collectively, "Impositions"). If any
special assessment is payable in installments without payment of any penalty or
premium, other than interest at a non-default rate prior to the due date of such
installment, then Mortgagor may pay the same in installments. Mortgagor will
deliver to Mortgagee receipts or other evidence reasonably satisfactory to
Mortgagee of the payment of all Impositions promptly after receipt of a specific
request from Mortgagee. Mortgagor shall not claim or demand or be entitled to
any credit or credits on account of the Secured Obligations for any part of the
Impositions, and no deduction shall otherwise be made or claimed from the
taxable value of this Second Mortgage or the Secured Obligations.
4.5.2 Except to the extent such matters are obligations of tenant
under the Tenant Lease and the Tenant Lease is not in default, Mortgagee may, at
its option to be exercised at any time, require the monthly deposit by Mortgagor
of an additional amount
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sufficient to discharge the obligations of Mortgagor under subsection 4.5.1
above with respect to real and personal property taxes and assessments when they
become due and to pay all of the premiums on any insurance policies required by
this Second Mortgage. The determination of the amount so payable and of the
fractional part thereof to be deposited with Mortgagee, so that the aggregate of
such deposits shall be sufficient for this purpose, shall be made by Mortgagee
in its reasonable discretion. Such amounts shall be held by Mortgagee in an
interest bearing account and applied to the payment of the obligations in
respect of which such amounts were deposited on or before the respective dates
on which the same or any of them would become delinquent or, at Mortgagee's
option, after an Event of Default, to the payment of any Secured Obligation in
such order and priority as Mortgagee shall determine. Subject to the tenant's
rights under the Tenant Lease, if Mortgagee shall reasonably determine that the
amounts then on deposit therefor shall be insufficient for the payment of such
obligations in full, Mortgagor shall, within ten business days after demand,
deposit the amount of the deficiency with Mortgagee. Nothing herein contained
shall be deemed to affect any right or remedy of Mortgagee under any provisions
of this Mortgage or of any Law to pay any such amount and to add the amount so
paid, together with interest at the Default Rate (as defined in the Note), to
the Secured Obligations.
4.6 Discharge of Liens. Subject to the tenant's rights under the Tenant
Lease, Mortgagor shall pay, from time to time when the same shall become due,
all claims and demands of mechanics, materialmen, laborers and others which, if
unpaid, would result in or permit the creation of a lien on the Mortgaged
Property or any part thereof, or on the revenues, rents, royalties, issues,
income and profits arising therefrom, and in general will do or cause to be done
everything necessary so that the first lien of the Second Mortgage shall be
fully preserved at the sole cost and expense of Mortgagor and without expense to
Mortgagee. Subject to the tenant's rights under the Tenant Lease, if any such
liens are filed, Mortgagor will cause the same to be permanently discharged of
record by payment or otherwise, unless Mortgagor shall in good faith and at its
own expense, be contesting such lien or liens or the validity thereof by
appropriate legal proceedings which shall operate to prevent the collection
thereof or other realization thereon or the sale or forfeiture of the Mortgaged
Property or any part thereof to satisfy the same; provided that during such
contest Mortgagor shall provide either (a) an indemnity bond, title insurance or
other security reasonably satisfactory to Mortgagee to cover the amount of the
contested item or items and the amount of the interest and penalties covering
the period through which such proceedings may be expected to last, and in any
event assuring the discharge of Mortgagor's obligation under this Section 4.6
and of any additional charge, penalty or expense arising from or incurred as a
result of such contest; and if Mortgagor shall have posted a bond as security
against payment of any such lien, interest, penalties and other charges related
thereto, Mortgagee shall be named as an additional obligee under the bond; or
(b) title insurance specifically insuring the priority of the lien of this
Second Mortgage over such lien (but such title insurance shall be sufficient
only during the period of such contest). Except as provided above, Mortgagor
will not directly or indirectly create, incur or suffer to exist any lien on the
Mortgaged Property or any part thereof (including without limitation any lien
securing the repayment of a loan made to Mortgagor by any partner(s),
shareholder(s), officer(s), director(s) or trustee(s) of Mortgagor), whether or
not junior to the lien of this Second Mortgage, other than the Permitted
Exceptions, such other documents as may be executed as further security for the
Note or in favor of Mortgagee,
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and such other matters (if any) as may be expressly permitted by the provisions
of any Loan Document or as may be approved by Mortgagee.
4.7 Contest of Impositions. Nothing in Section 4.5 shall require the
payment or discharge of any Imposition so long as Mortgagor or the tenant under
the Tenant Lease shall in good faith and at its own expense, contest the same or
the validity thereof by appropriate legal proceedings which shall operate to
prevent the collection thereof or other realization thereon or the sale or
forfeiture of the Mortgaged Property or any part thereof to satisfy the same;
provided that during such contest Mortgagor shall provide security reasonably
satisfactory to Mortgagee to cover the amount of the contested item or items and
the amount of the interest and penalties covering the period through which such
proceedings may be expected to last, and in any event assuring the discharge of
Mortgagor's obligation under this Section 4.7 and of any additional charge,
penalty or expense arising from or incurred as a result of such contest. If
Mortgagor shall have posted a bond as security against payment of any
Imposition, interest, penalties and other charges related thereto, Mortgagee
shall be named as an additional obligee under the bond.
4.8 Mortgagee's Taxes. Mortgagor will pay all Massachusetts taxes incurred
by Mortgagee by reason of Mortgagee's ownership of the Note, this Second
Mortgage or any other Loan Document, including without limitation all real
estate transfer and like taxes imposed in connection with a transfer of
ownership of all or a portion of the Mortgaged Property pursuant to a
foreclosure, a deed in lieu of foreclosure or otherwise. Notwithstanding the
foregoing, Mortgagor shall not be required to pay any net income or franchise
taxes imposed on Mortgagee or any taxes incurred due to an assignment of the
Loan Documents or any interest therein by Mortgagee or its successors and/or
assigns.
4.9 Use of Mortgaged Property. Mortgagor will maintain, preserve and renew
from time to time such rights of way, easements, grants, privileges, licenses
and franchises as are necessary for the use and operation of the Mortgaged
Property for Permitted Purposes (as hereafter defined), and will not use or
operate, or permit the use or operation of, the Mortgaged Property for any other
purpose without the consent of the Mortgagee, subject to the provisions of
Section 7.18, or initiate, join in or consent to any new private restrictive
covenant (apart from any Permitted Exception) easement or other public or
private restrictions to the use of the Mortgaged Property, without the consent
in each instance of Mortgagee, subject to the provisions of Section 7.18, and
except for the contemplated development activities as set forth in the Second
Loan Agreement. Mortgagor shall, moreover, comply in all material respects with
all lawful and restrictive covenants which may at any time affect the Mortgaged
Property and with zoning ordinances and other private or public restrictions as
to the use thereof. Mortgagor will not cause or maintain any nuisance in, at or
on the Mortgaged Property. Mortgagor will pay or cause to be paid all charges
for all public and private utility services, all public or private rail and
highway services (if any), all public or private communications services and all
sprinkler systems and protective services at any time rendered to or in
connection with the Mortgaged Property or any part thereof, will comply in all
material respects or use reasonable efforts to cause compliance with all
contracts relating to any such services, and will do all other things required
for the maintenance and continuance of all such services. However, Mortgagor
will not be required to pay or cause to be paid such charges if incurred by
third parties (such as tenants) unless the failure to pay such charges would
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result in a lien on the Mortgaged Property. "Permitted Purposes" means general
office use, research and development and laboratory use, uses permitted by the
Tenant Lease and any other Lease specifically approved by Lender, parking and
storage relating to the foregoing, and other incidental uses related to the
foregoing uses; provided, however, that the foregoing shall be limited to uses
which are in compliance with all applicable laws, regulations, governmental
permits and/or approvals and the provisions of any insurance policies maintained
with respect to the Mortgaged Property; and provided further that "Permitted
Purposes" shall mean any lawful use subsequent to a termination of the Tenant
Lease.
4.10 Maintenance of Mortgaged Property. Except as provided in or permitted
by the Second Loan Agreement, Mortgagor shall maintain or cause to be maintained
the Mortgaged Property, including all streets, sidewalks and curbs comprising
same, in good repair and condition, and will continuously (other than during
periods of repair after casualty or condemnation, with respect to the portions
of the Mortgaged Property damaged or condemned) operate the Mortgaged Property
only for Permitted Purposes, and, at no cost or expense to Mortgagee, will make
or cause to be made, as and when the same shall become necessary, all structural
and non-structural, exterior and interior, ordinary or extraordinary, foreseen
and unforeseen repairs, renewals and replacements necessary to that end, and
upon being apprised of any material defect in the repair or condition of the
Mortgaged Property, will repair or cure, or cause to be repaired or cured, such
defect, in each case with due diligence and no cost or expense to Mortgagee. All
such repairs, renewals and replacements shall be at least substantially equal in
quality to the original Improvements. To the extent that the Tenant Lease
requires that all or any of the foregoing obligations be performed by the tenant
thereunder, Mortgagor shall be relieved of such obligations hereunder for so
long as the Tenant Lease shall be in effect.
4.11 Maintenance of Personal Property. Mortgagor shall cause the
Improvements to be equipped with the Personal Property as, to the extent and in
the manner, as shall be necessary, appropriate or required for the operation of
the Premises. Except where appropriate replacements, free of superior liens, are
promptly made of a value at least equal to the value of the Personal Property
being removed, no Personal Property covered hereunder with a value of more than
$10,000 shall be permanently removed from the Premises without the consent of
Mortgagee, subject to the provisions of Section 7.18. The Personal Property so
disposed of shall be promptly replaced by Personal Property of the same
character and of at least equal usefulness and quality. Mortgagor shall not be
required to replace any item of Personal Property which has become unnecessary
or inappropriate for the operation or maintenance of the Premises. To the extent
that the Tenant Lease requires that all or any of the foregoing obligations be
performed by the tenant thereunder, Mortgagor shall be relieved of such
obligations hereunder for so long as the Tenant Lease shall be in effect.
4.12 Alterations. Except as provided in or permitted by the Second Loan
Agreement, or the Tenant Lease, Mortgagor shall not, without the consent of
Mortgagee, construct any new Improvements on the Premises other than those which
are permitted by the following provisions of this Section 4.12. Mortgagor shall
give Mortgagee Notice of, and a copy of any plans prepared for any alteration
(excluding, however, tenant improvements unless they involve structural work)
which is reasonably estimated to cost $1,000,000 (the
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"Alteration Threshold") (inclusive of architectural and engineering fees) or is
structural. So long as no Event of Default shall have occurred and be continuing
hereunder, Mortgagor shall have the right at any time and from time to time to
make or cause to be made reasonable alterations of and additions to the
Mortgaged Property or any part thereof, provided that any alteration or addition
(i) shall not change the general character of the Mortgaged Property, or reduce
the fair market value thereof below its fair market value immediately before
such alteration or addition, or otherwise materially and adversely alter the
overall quality of the Mortgaged Property, (ii) shall be effected with due
diligence, in a good and workmanlike manner and with first-class materials and
in compliance in all material respects with all requirements of applicable Laws,
(iii) shall (subject to Mortgagor's right to contest the same in accordance with
the provisions of Section 4.6 hereof) be promptly and fully paid for, or caused
to be paid for, by Mortgagor at no cost or expense to Mortgagee, if failure to
make such payment would result in a lien on the Mortgaged Property, and (iv)
shall be made, in case the estimated cost of such alteration or addition
(excluding, however, tenant improvements unless they involve structural work)
exceeds the Alteration Threshold, (1) only after Mortgagee shall have consented
thereto prior to the commencement of such work and in all material respects in
accordance with plans and specifications reasonably satisfactory to Mortgagee,
(2) only after Mortgagor shall have furnished to Mortgagee a completion or
performance bond, a letter of credit or cash deposit or other security
reasonably satisfactory to Mortgagee as security for the completion of such
work, and (3) if structural, only after submission of appropriate plans to
Mortgagee and approval thereof by Mortgagee (such approval not to be
unreasonably withheld or delayed). For purposes of clause (iv) of this
subsection, the Alteration Threshold limitation shall apply to any alteration or
addition taken separately or, if such alteration or addition is made together
with other alterations or additions that constitute a single construction plan
or project (whether accomplished in successive stages or procedures), then taken
in the aggregate as well. The cost of all such alterations and additions to the
Mortgaged Property shall be paid in cash or its equivalent, so that the
Mortgaged Property shall at all times be free of liens for labor and materials
supplied or claimed to have been supplied to the Mortgaged Property (subject to
Mortgagor's rights of contest provided for in Section 4.6 hereof). All
alterations of and additions to the Mortgaged Property shall immediately become
and shall remain a part of the Mortgaged Property, and shall be subject to the
lien of this Second Mortgage; but tenant improvements shall also be subject to
the rights therein of the relevant tenants. To the extent that the Tenant Lease
requires that all or any of the foregoing obligations be performed by the tenant
thereunder, Mortgagor shall be relieved of such obligations hereunder for so
long as the Tenant Lease shall be in effect.
4.13 Waste; No Impairment. Mortgagor shall not commit or suffer any waste
of the Mortgaged Property, or do or permit to be done thereon anything that may
in any way materially impair the security of this Second Mortgage.
4.14 Insurance.
4.14.1 Mortgagor shall effect and maintain, or cause to be
maintained, insurance for Mortgagor and the Mortgaged Property providing at
least the following coverages:
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(i) comprehensive all risk insurance on the Improvements and the
Personal Property, including coverage against loss or damage by fire, collapse,
lightning, windstorm, tornado, hail, vandalism and malicious mischief,
electrical short circuit, sprinkler leakage, water damage, back-up of sewers and
drains, bursting water mains, debris removal, and against loss or damage by such
other, further and additional risks as now are or hereafter may be embraced by
the standard extended coverage forms of endorsements, in each case (A) in an
amount equal to 100% of their "Full Replacement Cost," which for purposes of
this Second Mortgage shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings); (B) containing an
agreed amount endorsement with respect to the Improvements and Personal Property
waiving all co-insurance provisions; (C) containing an endorsement that all
covered losses will be paid on a replacement cost basis, which shall mean the
actual cost to repair or without deduction for depreciation; and (D) providing
for no deductible in excess of $25,000.
(ii) Commercial General Liability insurance against claims for
personal injury or bodily injury including death or property damage occurring
upon, in or about the Premises, occurring as a result of construction and use
and occupancy of facilities located in or on the Premises or as a result of the
construction thereof, such insurance to (A) be on the so-called "occurrence"
form with a combined single limit and appropriate annual aggregate limitations;
(B) afford immediate protection at the date hereof to the limit of not less than
$2,000,000 in respect of each personal injury, bodily injury or death to any
person, to the limit of not less than $5,000,000 in respect of any one
occurrence, and to the limit of not less than $1,000,000 in respect of any one
occurrence for property damage (the foregoing limits may be achieved through
so-called "umbrella" coverage); and (C) continue at not less than the said
limits until required to be changed by Mortgagee, by Notice to Mortgagor, by
reason of changed economic conditions making such protection inadequate;
(iii) as and if available at commercially reasonable rates, business
interruption insurance or, as the case may be, rental loss insurance, (A) with
loss payable to Mortgagee; (B) covering all risks required to be covered by the
insurance provided for in subdivision (i) above; (C) containing an agreed amount
endorsement waiving all co-insurance provisions; (D) agreeing to pay for losses
whether the Premises are open to the public or not; and (E) in an amount equal
to 100% of the projected gross income from the Premises for a period of twelve
(12) months. The amount of such business interruption insurance shall be
determined prior to the date hereof and at least once each year thereafter based
on Mortgagor's reasonable estimate of the gross income from the Premises for the
succeeding twelve-month period. In the event that all or any portion of the
Premises shall be damaged or destroyed, Mortgagor shall and hereby does assign
to Mortgagee all claims under the policies of such insurance, and all amounts
payable thereunder, and all net amounts, when collected by Mortgagee under such
policies, shall be held in trust by Mortgagee and shall be applied to taxes,
insurance premiums, other operating expenses of the Premises which are
obligations of Mortgagor and to any other Secured Obligations from time to time
due and payable hereunder and under the Note; provided, however, that nothing
herein contained shall be deemed to relieve Mortgagor of its obligations to pay
the Secured Obligations on the respective dates of payment provided for in the
Note except to the extent such amounts are actually paid out of the proceeds of
such business interruption insurance;
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(iv) at all times when required due to construction, structural
repairs or alterations with respect to the Improvements (A) owner's contingent
or protective liability insurance covering claims not covered by or under the
terms or provisions of the above mentioned Commercial General Public Liability
insurance policy; and (B) the insurance provided for in subdivision (i) of this
subsection written in a so-called builder's risk completed value form (1) on a
non-reporting basis, (2) against all risks insured against pursuant to
subdivision (i) of this subsection, and (3)including permission to occupy the
Premises and with an agreed amount endorsement waiving co-insurance;
(v) workers' compensation, subject to the statutory limits of the
Jurisdiction, and employer's liability insurance with a limit of at least
$1,000,000.00 per accident, disease per employee, and disease aggregate, in
respect of any work or operations on, about, or in connection with, the
Mortgaged Property (if applicable);
(vi) comprehensive boiler and machinery insurance, in such amounts
as shall be reasonably required by Mortgagee; and
(vii) such other insurance and in such amounts as Mortgagee from
time to time may reasonably request against such other insurable hazards which
at the time are commonly insured against in respect of property similar to the
Premises located in or around the greater Boston area.
4.14.2 All insurance provided for in subsection 4.14.1 hereof shall
be effected under valid and enforceable policies, in such forms and, from time
to time after the date hereof, in such amounts as may from time to time be
reasonably satisfactory to Mortgagee, issued by financially sound and
responsible insurance companies authorized to do business in the Jurisdiction as
approved admitted or unadmitted carriers which have been approved by Mortgagee
said carriers to be rated A- or better for claims paying ability by A. M. Best &
Co. unless Mortgagee has consented to a different rating, subject to the
provisions of Sections 7.18 hereof. Prior to the date hereof, and thereafter not
less than thirty (30) days prior to the expiration dates of the policies
theretofore furnished to Mortgagee pursuant to subsection 4.14.1, certified
copies of the policies accompanied by evidence satisfactory to Mortgagee of
payment of the first installment of the premiums, shall be delivered by
Mortgagor to Mortgagee; provided, however, that in the case of renewal policies,
Mortgagor may furnish Mortgagee with binders therefor to be followed by
certified copies of the policies when issued. Mortgagee shall have the right to
hold the policies and renewals thereof, subject to terms of any other mortgage
or other security agreement with a lien that has priority over this Second
Mortgage.
4.14.3 Mortgagor shall not take out (1) separate insurance
concurrent in form or contributing in the event of loss with that required in
subsection 4.14.1 to be furnished by, or which may be reasonably required to be
furnished by, Mortgagor, or (2) any casualty policy intended to provide any
coverage from time to time required hereunder with respect to the Mortgaged
Property unless, in each case, Mortgagee is included therein as an insured, with
loss payable as in this Second Mortgage provided. Mortgagor shall immediately
notify Mortgagee of the taking out of any such separate insurance or umbrella or
blanket policy by it and shall cause certified copies of the policies therefor
to be delivered
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as required in subsection 4.14.1. Any blanket insurance policy shall
specifically allocate to the Mortgaged Property the amount of coverage from time
to time required hereunder and shall otherwise provide the same protection as
would a separate policy insuring only the Mortgaged Property in compliance with
the provisions of subsection 4.14.1.
4.14.4 All policies of insurance provided for or contemplated by
subsection 4.14.1 shall name Mortgagee and Mortgagor, as the insured or
additional insured, as their respective interests may appear, and in the case of
property damage insurance, shall contain a so-called New York standard mortgagee
clause in favor of Mortgagee providing that the loss thereunder shall be payable
to Mortgagee.
4.14.5 All policies of insurance provided for in subsection 4.14.1
hereof shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Mortgagor, or anyone acting for
Mortgagor, or of any tenant under any Lease or other occupant or failure to
comply with the provisions of any policy which might otherwise result in a
forfeiture of such insurance or any part thereof shall in any way affect the
validity or enforceability of such insurance insofar as Mortgagee is concerned;
(ii) such policies shall not be materially changed (other than to
increase the coverage provided thereby) canceled or non-renewed without at least
30 days' written notice to Mortgagee; and
(iii) Mortgagee shall not be liable for any premiums thereon or
subject to any assessments thereunder.
4.14.6 Claims under each policy of insurance provided for or
contemplated by subsection 4.14.1 (excluding third party liability, Workers
Compensation and Employers liability insurance) in excess of $500,000 shall be
adjusted with the insurers and/or underwriters by Mortgagee and Mortgagor,
respectively (provided that, so long as no Event of Default shall then have
occurred and be continuing, Mortgagee agrees that it shall not settle any such
claims without Mortgagor's consent (not to be unreasonably withheld, conditioned
or delayed), and Mortgagor shall (subject to Mortgagee's reasonable discretion)
be entitled to lead all negotiations with insurers and underwriters in
connection with such claims). Any such claims which do not exceed $500,000
shall, so long as no Event of Default exists hereunder, be adjusted by
Mortgagor. All costs and expenses of collecting or recovering any insurance
proceeds under such policies (including without limitation the actual and
reasonable out-of-pocket expenses incurred by Mortgagee, if any), including
without limitation any and all reasonable fees of attorneys, appraisers and
adjusters, shall be paid by Mortgagor.
4.14.7 To the extent that the Tenant Lease requires that all or any
of the foregoing obligations be performed by the tenant thereunder, Mortgagor
shall be relieved of such obligations hereunder for so long as the Tenant Lease
shall be in effect.
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4.15 Damage or Destruction.
4.15.1 In the event of any damage to or destruction of the Premises
for which the cost of repair might reasonably be expected to exceed $500,000,
Mortgagor shall, promptly after obtaining knowledge of the occurrence thereof,
give notice thereof to Mortgagee and shall, regardless of the dollar amount of
such damage, proceed with reasonable diligence, at Mortgagor's sole cost and
expense, to repair and restore or cause to be repaired or restored the Premises
or the portion thereof so damaged as nearly as practically possible to the
condition the same were in immediately prior to such damage. If any Personal
Property is damaged or lost as a result of such fire or other casualty,
Mortgagor shall likewise, at its sole cost and expense, whether or not any
insurance proceeds are available or adequate for such purpose, replace or cause
to be replaced the Personal Property so damaged or lost. In the event that
Mortgagor fails to advance any funds required for the completion of any such
repairs or restoration, Mortgagee may, but shall not be obligated to, advance
the required funds or any portion thereof, and Mortgagor shall, on demand,
reimburse Mortgagee for all sums advanced and actual expenses incurred by
Mortgagee in connection therewith, together with interest thereon at the Default
Rate (as defined in the Note) from the date each such advance is made to the
date of receipt by Mortgagee of reimbursement from Mortgagor, which amounts and
interest shall become part of the Secured Obligations and be secured hereby. All
repairs and restoration required to be made by Mortgagor hereunder shall be
performed in material compliance with all Laws and Orders and shall be without
any liability or actual expense of any kind to Mortgagee. Notwithstanding the
foregoing, Mortgagor should not be obligated to repair, restore or replace the
Premises and/or Personal Property in the event that (i) Mortgagee requires
(pursuant to clause (A) of Section 4.15.2(ii)) the application of insurance
proceeds to the payment of Secured Obligations at a time when no Event of
Default has occurred and is continuing or (ii) Mortgagor elects not to restore
pursuant to Section 4.15.2(iii).
4.15.2 If by reason of any damage or destruction, any insurance
proceeds are paid under any insurance policy maintained pursuant to subsection
4.14.1 hereof or otherwise (other than business interruption insurance proceeds
or, as the case may be, rental loss insurance proceeds, which shall be paid as
provided in clause (iii) of subsection 4.14.1), such proceeds shall be paid as
follows:
(i) If the aggregate insurance proceeds received by reason of any
single instance of damage or destruction shall not exceed $500,000, such
insurance proceeds shall be paid over to Mortgagor, and Mortgagor shall hold the
same as a trust fund, to be used first for the payment of the entire cost of
repairing and restoring the Premises and/or Personal Property and the balance
thereof shall be paid to the Mortgagor; provided, however, that, if any Event of
Default shall exist hereunder at the time all such insurance proceeds are so to
be paid over to Mortgagor, or if Mortgagee shall have accelerated the Secured
Obligations, all such insurance proceeds (in whatever amount) shall be paid over
to Mortgagee and not to Mortgagor for application pursuant to clause (B) below.
(ii) If the aggregate insurance proceeds received by reason of any
single instance of damage or destruction shall exceed $500,000, such insurance
proceeds shall be paid over to Mortgagee and held in an interest-bearing
account. The Mortgagee shall apply
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such insurance proceeds to the repair and restoration of the Mortgaged Property
by disbursing the same to Mortgagor on a periodic basis and with such retainage
(not to exceed 10%) as Mortgagee reasonably shall deem appropriate, but no more
frequently than monthly, as the repair and restoration work progresses, upon
receipt by Mortgagee of such guaranties of completion (from Mortgagor and/or
other third parties acceptable to Mortgagee), surety bonds, requisitions,
architect's certificates and title updates as Mortgagee shall in its good faith
discretion require (including without limitation requiring Mortgagor, inter
alia, to provide to Mortgagee for its approval appropriate plans and
specifications and budgets, and to show that there are at all times sufficient
funds (in addition to the available insurance proceeds, as the case may be)
available for the completion of the repair and restoration in question and to
pay all amounts due under this Second Mortgage and the Note during such repair
and restoration). All amounts held by Mortgagee as retainage shall be paid to
Mortgagor upon substantial completion of the repair and restoration work. If any
excess proceeds shall remain after the repair and restoration work has been
completed and paid for in full out of such insurance proceeds, such excess
proceeds shall be paid to Mortgagor if the Premises have been restored to their
condition prior to such change or destruction, but otherwise such excess
proceeds shall be retained by Mortgagee and applied to the partial prepayment of
the Note, at par. Interest earned on insurance proceeds while held by Mortgagee
shall be added to the amount of such insurance proceeds. If while any such
insurance proceeds are held by Mortgagee an Event of Default shall have occurred
and be continuing or Mortgagee shall have accelerated the Secured Obligations,
Mortgagee shall have no duty to make advances to Mortgagor as provided for in
this clause (ii).
4.15.3 No destruction of or damage to the Mortgaged Property, or any
part thereof, by fire or other casualty whatsoever, whether such damage or
destruction be partial or total or otherwise, shall relieve Mortgagor from its
liability to pay in full as and when due the Secured Obligations, or from
timely, fully and faithfully performing all its other obligations hereunder and
under the Loan Documents. No application of insurance proceeds to the reduction
of the Secured Obligations shall have the effect of releasing the lien of this
Second Mortgage from all or any portion of the Mortgaged Property until and
unless all of the Secured Obligations have been paid in full.
4.15.4 For so long as the Tenant Lease shall be in effect and not in
default, if and to the extent that the provisions of the Tenant Lease are
inconsistent with the provisions of this Section 4.15, such provisions of the
Tenant Lease shall govern, including without limitation, that if the tenant
under the Tenant Lease is required to restore the Premises under the Tenant
Lease, the Mortgagee shall make insurance proceeds available for such purpose.
4.16 Condemnation; Knowledge of Proceedings.
4.16.1 Mortgagor, promptly upon obtaining knowledge of the
institution or pending institution of any proceedings for the condemnation of
the Mortgaged Property or any material portion thereof, shall notify Mortgagee
thereof, and Mortgagee may participate in any such proceedings and be
represented by counsel of its selection. Mortgagor shall not make any agreement
in lieu of condemnation of the Mortgaged Property or any portion thereof without
the prior written consent of Mortgagee in each
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instance, which consent shall not be (i) unreasonably withheld or delayed in the
case of the taking of any insubstantial portion of the Mortgaged Property or
(ii) withheld or delayed if the Secured Obligations will be paid in full from
the net condemnation proceeds. In the event of the condemnation of the Mortgaged
Property, or any portion thereof, any awards for condemnation or payments in
lieu thereof are hereby assigned and shall be paid to Mortgagee, subject to the
terms of any mortgage or other security agreement with a lien that has priority
over this Second Mortgage.
4.16.2 In the event that Mortgagee shall determine in its good faith
judgment after an event of condemnation that the taking of the Mortgaged
Property was so extensive as to make continued operation thereof after
restoration not commercially viable, all of the Secured Obligations shall become
immediately due and payable, and any awards for condemnation or payments in lieu
thereof shall be paid over to Mortgagee and applied in reduction of the Secured
Obligations in such order as Mortgagee may determine in its discretion, but
without any prepayment premium, and any excess shall be paid to Mortgagor. Any
remaining Secured Obligations shall be prepaid by Mortgagor without any
prepayment premium. Otherwise, whether or not any condemnation proceeds are
available therefor, Mortgagor shall proceed with reasonable diligence, at
Mortgagor's sole cost and expense, to repair and restore or cause to be repaired
or restored the Mortgaged Property into an architectural and commercially viable
premises comparable to or better than (to the greatest extent possible) the
previously existing structure, with such additional improvements as Mortgagor
may elect to add. In the case of a condemnation which is not so extensive as to
make continued operation of the Mortgaged Property after restoration not
commercially viable, the Mortgagee shall hold the condemnation proceeds in an
interest bearing account and apply such proceeds to the repair and restoration
of the Mortgaged Property by disbursing the same to Mortgagor on a periodic
basis and with such retainage (not to exceed 10%) as Mortgagee reasonably shall
deem appropriate, but no more frequently than monthly, as the repair and
restoration work progresses, and upon receipt by Mortgagee of such guaranties of
completion, surety bonds, requisitions, architect's certificates and title
updates as Mortgagee shall in its good faith discretion require (including
without limitation requiring Mortgagor to show that there are at all times
sufficient funds (in addition to the available condemnation proceeds, as the
case may be) available for the repair and restoration in question). Provided
that Mortgagee shall not have elected to cause the acceleration of the Secured
Obligations pursuant to the first sentence of this subsection, in the event that
Mortgagor fails to make any payment in respect of any such repairs and
restorations, Mortgagee may, but shall not be obligated to, advance funds
required for the completion of such repairs or restoration, and Mortgagor shall,
on demand, reimburse Mortgagee for all sums advanced and expenses actually
incurred by Mortgagee in connection therewith (including without limitation the
charges, disbursements and reasonable fees of Mortgagee's counsel), together
with interest thereon at the Default Rate (as defined in the Note) from the date
each such advance is made or expense paid by Mortgagee until the date on which
repayment thereof is received by Mortgagee, which amounts and the interest
thereon shall become part of the Secured Obligations and be secured hereby. All
amounts held by Mortgagee as retainage shall be paid to Mortgagor upon
substantial completion of the repair and restoration work. In the event that
there are surplus proceeds of any award for condemnation or payments in lieu
thereof, all such surplus proceeds shall be paid over to and/or retained by
Mortgagee and shall be applied in accordance with the Second Loan Agreement.
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4.16.3 Notwithstanding any taking by public or quasi-public
authority through eminent domain or otherwise, Mortgagor agrees to continue to
pay all amounts due in respect of the Secured Obligations, which shall not be
reduced until any award or payment therefor shall have been actually received by
Mortgagee for application to the discharge of the Secured Obligations in
accordance with the Second Loan Agreement. No application of the proceeds of any
award for condemnation or payments in lieu thereof to the reduction of the
Secured Obligations shall have the effect of releasing the lien of this Second
Mortgage from the portion, if any, of the Mortgaged Property not taken until and
unless the principal sum secured hereby, the interest thereon and the remainder
of the Secured Obligations have been paid in full.
4.16.4 In the event of any temporary taking of the Mortgaged
Property or any portion thereof in condemnation or by eminent domain, Mortgagor
shall continue to pay all principal, interest and other sums and charges secured
hereby when due and payable under the Note and the other Loan Documents and, so
long as there has occurred no Event of Default, receive the proceeds of any
award for a temporary taking; provided, however, that if any award payable to
Mortgagor on account of such taking is made in a lump sum or is payable other
than in equal monthly installments, then the award shall be paid over to
Mortgagee (who shall hold the same in an interest bearing account) and applied
by Mortgagee to the payment of each monthly installment of interest and
principal due under the Note and all of the other Secured Obligations as and
when the same become due and payable; and provided, further, that the excess (if
any) of such award received by Mortgagee over such monthly installment of
interest and other Secured Obligations falling due for the entire period with
respect to which such award was paid shall, monthly, be paid to or on behalf of
Mortgagor for use solely in paying, with respect to the Premises, real estate
and personal property taxes, insurance premiums, labor charges, repairs,
utilities, accounting and legal expenses and other operating expenses; and
provided further, that any unapplied portion of such award held by Mortgagee
when such taking ceases or expires, or after all of the Secured Obligations
shall have been paid in full (whichever first occurs), plus any interest accrued
thereon, shall be repaid to Mortgagor. If while the proceeds of any such award
are held by Mortgagee an Event of Default shall have occurred and be continuing,
or Mortgagee shall have accelerated the Secured Obligations, Mortgagee may apply
such proceeds in reduction of the Secured Obligations in such order and priority
as Mortgagee shall in its discretion determine.
4.16.5 For so long as the Tenant Lease shall be in effect, if and to
the extent that the provisions of the Tenant Lease are inconsistent with the
provisions of this Section 4.16, such provisions of the Tenant Lease shall
govern.
4.17 General Right of Entry. Mortgagor agrees that it will permit
Mortgagee from time to time upon reasonable advance notice (not exceeding one
business day) and during regular business hours (or upon occurrence of any
emergency situation, without advance notice and at any time), but subject to the
rights of tenants under their leases, to enter upon and inspect the Mortgaged
Property to determine its compliance with the requirements of this Second
Mortgage and the other Loan Documents and to ascertain its condition.
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4.18 Separate Tax Lots. Mortgagor agrees that if and to the extent the
Mortgaged Property is not assessed for real estate tax purposes as a wholly
independent tax lot (or lots), separate from any adjoining land or improvements
not constituting a part of such lot or lots, it will enter into, or cause to be
entered into, a tax sharing agreement (or agreements), reasonably satisfactory
in form and substance to Mortgagee, with the respect to the party or parties
responsible for paying real estate taxes as to any such adjacent land or
improvements.
4.19 Books of Account; Financial Statements.
4.19.1 Mortgagor will keep adequate records and books of account of
Mortgagor and the Premises at the principal office of Mortgagor or the
management agent for the Premises in accordance with generally accepted
accounting principles, tax accounting principles or other sound accounting
principles consistently applied reflecting all financial transactions of the
Mortgagor in respect of the Mortgaged Property and will permit Mortgagee (at the
cost and expense of Mortgagee unless an error in excess of 5% of net operating
income is discovered in which event the cost of such examination shall be borne
by Mortgagor), by its agents, accountants and attorneys, to visit the Mortgaged
Property and the office of Mortgagor and examine and make copies and extracts of
Mortgagor's records and books of account and to discuss Mortgagor's affairs,
finances and accounts with the officers of Mortgagor and its accountants, at
such reasonable times during business hours with reasonable advance notice
(which may be by telephone) of not less than one business day. Promptly upon
demand by Mortgagee, but not more than once in any twelve (12) month period, the
Mortgagor, shall use reasonable efforts to cause to be delivered to Mortgagee
reports established and/or maintained by any rating agency and/or credit
verification organization designated by Mortgagee (collectively, the "Credit
Agencies") with respect to the credit status and/or financial condition of,
and/or history of default with respect to credit transactions by, Mortgagor
and/or the Guarantors (as defined in Section 7.9) (collectively the "Credit
Reports") and Mortgagor hereby expressly grants to Mortgagee the right, license
and privilege to obtain the Credit Reports directly from the Credit Agencies at
Mortgagee's cost.
4.19.2 Mortgagor covenants that it will, at its own expense, deliver
to the Mortgagee, within (10) ten days after any request by Mortgagee (which
request shall reference this subsection and such ten (10) day requirement) a
written certificate, in recordable form, setting forth to its knowledge the
amount then due under this Second Mortgage and whether to its knowledge any
offsets or defenses exist against the indebtedness secured hereby; and, if any
such offsets or defenses are alleged to exist, then the nature of such offsets
or defenses. Such certificate shall also contain a statement that the Mortgagor
has no knowledge of the occurrence of any Event of Default nor of any other
event, which, with the giving of notice or passage of time, or both, would
constitute an Event of Default which has occurred and remains uncured as of the
date of such certificate; or, if any such Event of Default or other default has
occurred and remains uncured as of the date of such certificate, then such
certificate shall contain a statement specifying the nature thereof, the time
for which the same has continued and the action which the Mortgagor has taken or
proposes to take with respect thereto and setting forth or describing such
additional matters with respect to the Mortgagor, Loan or the Mortgaged Property
as the Mortgagee shall reasonably request and such additional information as the
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Mortgagee may reasonably request. Such certificate shall be certified to, and
may be relied upon by, such parties as the Mortgagee shall direct.
4.19.3 Mortgagor will deliver to Mortgagee within ninety (90) days
after the close of its respective fiscal year its balance sheets and statements
of profit and loss setting forth in comparative form, figures for the preceding
year reviewed or audited by a reputable certified public accounting firm.
Mortgagor shall also deliver within ninety (90) days after the close of the
calendar year an annual operating statement for Mortgaged Property setting
forth, in comparative form, figures for the preceding year, and a schedule
showing all Leases (excluding subleases) and basic information with respect
thereto in form approved by Mortgagor and Mortgagee as part of the application
by Mortgagor for the loan secured hereby, in each case certified by a principal
financial or accounting officer of Mortgagor. Throughout the term of this Second
Mortgage, Mortgagor, with reasonable promptness, will deliver to Mortgagee such
other information with respect to Mortgagor as Mortgagee may reasonably request
from time to time. All financial statements of Mortgagor shall be prepared in a
manner reasonably satisfactory to Mortgagee shall be delivered in duplicate, and
in the case of Mortgagor, shall be accompanied by the certificate of a principal
financial or accounting officer of Mortgagor, dated within five (5) days of the
delivery of such statements to Mortgagee, stating that such financial statements
are, to the best of such officer's knowledge after diligent inquiry, true and
correct and that he/she knows of no Event of Default, nor of any default which
after notice or lapse of time or both would constitute an Event of Default,
which has occurred and is continuing, or, if any such default or Event of
Default has occurred and is continuing, specifying the nature and period of
existence thereof and what action Mortgagor has taken or proposes to take with
respect thereto, and, except as otherwise specified, stating that, to the best
of such officer's knowledge after diligent inquiry, Mortgagor has fulfilled all
its obligations under this Second Mortgage which are required to be fulfilled on
or prior to the date of such certificate.
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4.20 Limitations on Transfer. Mortgagor hereby covenants and agrees that
neither Mortgagor will, without the prior written consent in each instance of
Mortgagee, which may be withheld in Mortgagee's sole discretion, (i) convey,
sell, assign, lease or otherwise transfer any interest of Mortgagor in the
Mortgaged Property or any portion thereof, (ii) pledge, mortgage, hypothecate,
place a deed of trust or other lien on or otherwise encumber Mortgagor's
interest in the Mortgaged Property or any portion thereof, (iii) permit the
conveyance, sale, assignment, pledge, mortgage, hypothecation or other transfer
or disposition, either directly or indirectly or through one or more step
transactions or tiered transactions, of interests in Mortgagor or in the
partners, shareholders, principals, trustee or beneficiary of Mortgagor or in
the partners, shareholders, principals, trustees or beneficiaries of such
partners, shareholders, principals, trustee or beneficiary, or any portion
thereof, or (iv) enter into or permit to be entered into any agreement or
arrangement to do any of the foregoing unless such agreement or arrangement is
expressly made subject to Mortgagee's approval (each of the aforesaid acts
referred to in clauses (i) through (iv) above being referred to herein as a
"Transfer"). Any conveyance, sale, assignment, lease, pledge, mortgage,
hypothecation, encumbrance or transfer deemed to be such by operation of Law
shall also be deemed to be a Transfer. Any attempted Transfer in violation of
this Section shall be void and of no force or effect. Transfers of membership
interests in the Borrower shall not be permitted without the prior written
consent of Mortgagee, which consent will not be unreasonably withheld or
delayed. Notwithstanding the same, transfers which (i) do not result in more
than a majority of the membership interests of Class B Members of spouse, child
or entity for which the member, a spouse and/or child are the sole
beneficiary(ies), shall be permitted without consent of Mortgagee.
4.21 Recording, Filing and Perfection of Security Interests; Fees.
4.21.1 Mortgagor, promptly upon the execution and delivery of the
Note, this Second Mortgage, the Assignment of Leases and the Indemnity Agreement
and thereafter from time to time, will cause this Second Mortgage, the
Assignment of Leases and any other Loan Document creating a lien or evidencing
the lien of this Second Mortgage 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 to protect the lien hereof upon, and the interest of Mortgagee in,
the Mortgaged Property.
4.21.2 Mortgagor will pay all filing, registration and recording
fees, and all expenses incident to the execution and acknowledgment of the
Second Mortgage and any other Loan Document (including any security instrument
with respect to the Personal Property and Proceeds) and any instrument of
further assurance, and all federal, state, county and municipal mortgage
recording taxes, stamp taxes and other taxes, duties, imports, assessments and
charges arising out of or in connection with the execution and delivery of the
Loan Documents, any deed of trust supplemental hereto, any supplemental security
instrument with respect to the Personal Property and Proceeds or any instrument
of further assurance.
4.22 Further Acts and Assurances. Mortgagor will, at its sole cost and
expense, and without actual expense to Mortgagee, do, execute, acknowledge and
deliver all and
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every such further acts, deeds, conveyances, deeds of trust, mortgages,
assignments, notices of assignment, 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 conveyed or assigned 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 Second Mortgage, or filing, registering or recording this Second
Mortgage, and, on demand, will execute and deliver, and hereby authorizes
Mortgagee to execute and file in Mortgagor's name, to the extent it may lawfully
do so, one or more financing statements, chattel mortgages or comparable
security instruments, to evidence more effectively the lien of this Second
Mortgage or the lien intended hereby upon the Mortgaged Property.
ARTICLE V
EVENTS OF DEFAULT
5.1 Events of Default. It shall be an event of default ("Event of
Default") hereunder if any one or more Event of Default as defined in the Second
Loan Agreement shall occur.
ARTICLE VI
REMEDIES AND RELATED MATTERS
6.1 Remedies. Upon the occurrence and continuance of any Event of Default,
the Mortgagee, at the option of the Mortgagee, may:
6.1.1 by Notice to the Mortgagor, declare the entire principal
amount under the Note then outstanding, and all accrued and unpaid interest
thereon, to be immediately due and payable, and upon such declaration such
principal amount and said accrued and unpaid interest and all other Secured
Obligations shall become and be immediately due and payable, anything in either
Note or in this Second Mortgage to the contrary notwithstanding;
6.1.2 by itself, its agents or attorneys, or by a court-appointed
receiver, enter into and upon all or any part of the Mortgaged Property and each
and every part thereof and exclude the Mortgagor, its agents and servants wholly
therefrom; and having and holding the same, use, operate, manage and control the
Mortgaged Property and conduct the business thereof, either personally or by its
superintendents, managers, agents, servants, attorneys or receivers; and upon
every such entry, at the expense of the Mortgaged Property, from time to time,
either by purchase, repairs or construction, maintain and restore the Mortgaged
Property and, likewise make all necessary or proper repairs, renewals and
replacements and such alterations, betterments, additions and improvements
thereto and thereon as it may deem advisable and insure the same; and in every
such case the Mortgagee shall have the right to manage and operate the Mortgaged
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Property and to carry on the business thereof and exercise all rights and powers
of the Mortgagor, as its attorney-in-fact, coupled with an interest, or
otherwise, as it shall deem best; and the Mortgagee shall be entitled to collect
and receive all Rents and other earnings, revenues, issues, profits and income
of the Mortgaged Property and after deducting the expenses of conducting the
business thereof and all maintenance, repairs, renewals, replacements,
alterations, additions, betterments and improvements and amounts necessary to
pay for taxes, assessments, insurance and prior or other proper charges upon the
Mortgaged Property or any part thereof, as well as just and reasonable
compensation for the services of all attorneys, counsel, agents, clerks,
servants and other employees engaged or employed by it, the Mortgagee may apply
the remainder of the monies so received by it, first to the payment of any other
sums required to be paid by the Mortgagor under this Second Mortgage; then to
the payment of all other Secured Obligations in such order as Mortgagee shall
elect; and the balance, if any, shall be turned over to the Mortgagor or such
other person as may be lawfully entitled thereto;
6.1.3 with or without entry, personally or by its agents or
attorneys insofar as applicable:
(a) foreclose the lien and security interest of this Second
Mortgage against the Mortgaged Property, or any portion thereof, in accordance
with the laws of The Commonwealth of Massachusetts and the provisions hereof for
all Secured Obligations secured hereby or for any portion of such Secured
Obligations or any other sums secured hereby which are then due and payable,
subject to the continuing lien of this Second Mortgage for the balance of the
Secured Obligations not then due; it being agreed that several sales may be made
hereunder without exhausting the rights of sale for any other breach by the
Mortgagor of any of the Secured Obligations secured hereby, it being the purpose
to provide for foreclosure and sale of the Mortgaged Property, or any portion
thereof, for any matured portion of any of the Secured Obligations secured
hereby or otherwise provided for herein without exhausting the power to
foreclose and sell the Mortgaged Property, or any portion thereof, for any other
part of the Secured Obligations secured hereby, whether matured at the time or
subsequently maturing; or
(b) take such other steps to protect and enforce their
respective rights, whether by action, suit or proceeding in equity or at law for
the specific performance of any covenant, condition or agreement in the Note,
this Second Mortgage, the Second Loan Agreement or any other Loan Document, or
in aid of the execution of any power granted herein or in the Note, this Second
Mortgage, the Second Loan Agreement or any other Loan Document, or for any
foreclosure hereunder, or for the enforcement of any other appropriate legal or
equitable remedy or otherwise as the Mortgagee may elect.
6.2 Foreclosure and Sale; Application of Proceeds; Waiver of Right of
Redemption; Etc.
6.2.1 Foreclosure and Sale. During the continuance of any Event of
Default, the Mortgagee, personally or by its agents or attorneys, may sell the
Mortgaged Property, or any part or parts thereof, and all estate, right, title,
interest, claim and demand therein, at public auction at such time and place and
upon such terms and conditions as the Mortgagee may deem appropriate or as may
be required or permitted by applicable law or
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rule of court, having first given notice prior to the sale of such time, place
and terms by advertisement in at least one newspaper published or having a
general circulation in the county or counties in which the Mortgaged Property is
located or at such time or times as may be required by applicable law or rule of
court, and at such other times and by such other methods, if any, as the
Mortgagee may deem appropriate.
6.2.2 Adjournment of Sale. The Mortgagee may adjourn from time to
time any sale to be made by it under or by virtue of this Second 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 an applicable provision of
law or rule of court, the Mortgagee, without further notice or publication, may
make such sale at the time and place to which the same shall be so adjourned.
6.2.3 Effect of Sale Upon Mortgagor. Any sale or sales made under or
by virtue of this Article, whether made under the power of sale herein granted
or under or by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale, shall operate to divest all the estate, right, title,
interest, claim and demand whatsoever, whether at law or in equity, of the
Mortgagor in and to the properties and rights so sold, and shall be a perpetual
bar both at law and in equity against the Mortgagor and against any and all
persons claiming or who may claim the same, or any part thereof from, through or
under the Mortgagor.
6.2.4 Acceleration Upon Sale. In the event of any sale or sales made
under or by virtue of this Subsection, whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale, all Secured Obligations, if not previously due
and payable, and all other sums required to be paid by the Mortgagor pursuant to
the Note, this Second Mortgage and the other Loan Documents, shall, at the
option of the Mortgagee, immediately become due and payable, in full, anything
in the Note, this Second Mortgage, the Second Loan Agreement or the other Loan
Documents to the contrary notwithstanding. If an Event of Default should occur,
and following the acceleration of maturity as herein provided, a tender of
payment by the Mortgagor of the amount then necessary to satisfy all Secured
Obligations made at any time prior to any sale made under or by virtue of this
Subsection, whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, shall constitute an evasion of the provisions of the Note prohibiting
prepayment, and, to the extent permitted by applicable law, such payment shall
include the Prepayment Premiums (as defined in the Note), and other payments
required by the Note.
6.2.5 Appointment of Receiver. During the continuance of an Event of
Default, the Mortgagee shall be entitled (and, to the extent permitted under the
laws of The Commonwealth of Massachusetts, with five (5) days' notice, without
regard to the adequacy of any security for the Secured Obligations and without
regard to the solvency of any person, partnership or entity liable for the
payment thereof) to the appointment of a receiver or receivers of the Mortgaged
Property and of all of the earnings, revenues, rents, issues, profits and income
there from, and the Mortgagor hereby consents to the appointment of such
receiver and agrees that it will not oppose any such appointment; provided,
however, that notwithstanding the appointment of any receiver as aforesaid, the
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Mortgagee shall be entitled to retain possession and control of the Mortgaged
Property. Such receiver shall have all of the powers and authority permitted by
applicable law.
6.2.6 Application of Proceeds. The proceeds of any sale made under
or by virtue of this Article, whether made under the power of sale herein
granted or under or by virtue of judicial proceedings or of a judgment or decree
of foreclosure and sale, together with any other sums which may then be held by
the Mortgagee pursuant to this Second Mortgage, whether under the provisions of
this Subsection or otherwise, shall be applied as follows:
First: To the payment of the actual costs and expenses of such
sale or sales, including compensation to Mortgagee and the fees, charges and
disbursements of its agents, and the charges, disbursements and reasonable fees
of its counsel, and of any judicial or other proceedings wherein the same may be
made, and of all expenses, liabilities and advances made or incurred by
Mortgagee under this Second Mortgage, together with interest at the Default Rate
(as defined in the Note) on all advances made by Mortgagee, and of taxes,
assessments or other charges, except any taxes, assessments or other charges
subject to which the Mortgaged Property shall have been sold.
Second: To the payment of any actual expenses, charges,
losses, indemnities, penalties, premiums (including, without limitation,
Prepayment Premiums (as defined in the Note) and late payment premiums) and all
other amounts due under the Loan Documents, excluding interest and principal.
Third: To the payment of interest on the unpaid principal due
under the Note including Additional Interest.
Fourth: To the payment of principal due under the Note.
Fifth: To the payment of all other Secured Obligations.
Sixth: To the payment of the surplus, if any, to whomsoever
may be lawfully entitled to receive the same (including, if applicable,
Mortgagor, or the beneficiary of Mortgagor).
6.2.7 Application of Purchase Money. In the event of any sale made
under or by virtue of this Section 6.2, whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale, the receipt of the officer making the sale under
judicial proceedings or of the Mortgagee for the payment of the purchase money
shall be full and sufficient discharge of the purchaser of the Mortgaged
Property for the purchase money and no such purchaser, after paying such
purchase money and receiving such a receipt, shall be bound or liable to see to
the application of such purchase money.
6.2.8 Conveyance of the Mortgaged Property. Upon the completion of
any sale or sales made under or by virtue of this Section, whether made under
the power of sale herein granted or under or by virtue of judicial proceedings
or of a judgment or decree of foreclosure and sale, the Mortgagee or an officer
of the court empowered so to do, shall
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execute and deliver to the purchaser or purchasers a good and sufficient
instrument or instruments, conveying, assigning and transferring all estate,
right, title and interest of the Mortgagor in and to the Mortgaged Property and
rights sold, including the estate of the Mortgagor as lessor under the Leases
(excluding subleases), but without any covenant or warranty, express or implied.
The recitals in such instrument(s) of any matters of fact shall be conclusive
proof of the truthfulness thereof. The Mortgagee is hereby appointed, which
appointment is coupled with an interest and is irrevocable, and which
appointment shall become effective upon the occurrence of an Event of Default,
the true and lawful attorney of the 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 the Mortgagee may
execute all necessary instruments of conveyance, assignment and transfer, and
may substitute one or more persons with like power, the Mortgagor hereby
ratifying and confirming all that its said attorney or such substitute or
substitutes shall lawfully do by virtue hereof. Nevertheless, the Mortgagor, if
so requested by the Mortgagee, shall ratify and confirm any such sale or sales
by executing and delivering to the Mortgagee or to such purchaser or purchasers,
all such instruments as may be advisable, in the judgment of the Mortgagee, for
that purpose, and as may be designated in any such request.
6.2.9 Purchase of Mortgaged Property. The Mortgagee shall have the
right to be a purchaser at any sale made under or by virtue of this Second
Mortgage, whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, and on so purchasing shall have the right to be credited upon the amount
of the bid made therefor with the amount payable to the Mortgagee out of the net
proceeds of such sale. In the event of any such sale, the Secured Obligations,
if not previously due, shall be and become immediately due and payable without
demand or notice of any kind.
6.2.10 Waiver of Right of Redemption - Exemptions Waived. The
Mortgagor will not at any time insist upon, or plead, or in any manner whatever
claim or take any benefit or advantage of a stay or extension or moratorium law,
any exemption from attachment, execution or sale of the Mortgaged Property, or
any part thereof, whether enacted now or at any time hereafter in force, which
may affect the covenants and terms of performance of this Second Mortgage, nor
claim, take or insist upon any benefit or advantage of any law now or hereafter
in force providing for the valuation or appraisal of the Mortgaged Property, or
any part thereof, prior to any sale or sales thereof which may be made pursuant
to any provision herein, or pursuant to the decree, judgment or order of any
court of competent jurisdiction; nor after any such sale or sales, claim or
exercise any right under any statute heretofore or hereafter enacted to redeem
the Mortgaged Property so sold, or any part thereof, and the Mortgagor hereby
expressly waives all benefit and advantage of any such law or laws, and
covenants not to hinder, delay or impede the execution of any right, power or
remedy herein granted or delegated to the Mortgagee, but to suffer and permit
the execution of every right, power or remedy as though no such law or laws had
been made or enacted. The Mortgagor, for itself and all who claim under it,
waives, to the extent that it lawfully may, the benefit of any homestead
exemption and any and all right to have the Mortgaged Property marshaled upon
any sale or foreclosure hereunder.
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6.2.11 Recovery of Judgment. A. During the continuation of any Event
of Default, the Mortgagee shall be entitled and empowered to institute such
actions or proceedings at law or in equity as it may consider advisable for the
collection of the Secured Obligations, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such judgment or
final decree against the Mortgagor in any manner provided by law. The Mortgagee
shall be entitled to recover judgment as aforesaid either before, after or
during the pendency of any proceeding for the enforcement of any remedies
provided for in the Note, this Second Mortgage, the Second Loan Agreement or the
other Loan Documents and the right of the Mortgagee to recover judgment as
aforesaid shall not be affected by any sale hereunder, or by the passage or
entry of a decree for the sale of the Mortgaged Property, or any part thereof,
or by the enforcement of the provisions of the Note, this Second Mortgage, the
Second Loan Agreement and the other Loan Documents or the foreclosure of the
lien hereof. In the event of a sale of the Mortgaged Property, and of the
application of the proceeds of sale, as in this Second Mortgage provided, to the
payment of the Secured Obligations, the Mortgagee, except as otherwise provided
in the Note, shall be entitled to enforce payment of, and to receive all amounts
then remaining due and unpaid with respect to the Secured Obligations, and shall
be entitled to recover judgment for any portion of the Secured Obligations
remaining unpaid, together with interest as provided in the Note. In case of
proceedings against the Mortgagor in insolvency or bankruptcy or any proceedings
for its reorganization or involving the liquidation of its assets, then the
Mortgagee shall be entitled to prove the whole amount due on account of the
Secured Obligations, without deducting therefrom any proceeds obtained from the
sale of the whole or any part of the Mortgaged Property; provided, however, that
in no case shall the Mortgagee receive a greater amount than the total amount
due on account of the Secured Obligations from the aggregate amount of the
proceeds of the sale of the Mortgaged Property and the distribution from the
estate of the Mortgagor.
B. No recovery of any judgment upon the Mortgaged Property or
upon any other property of the Mortgagor shall affect, in any manner or to any
extent, the lien of this Second Mortgage upon the Mortgaged Property, or any
part thereof, or any liens, rights, powers or remedies of the Mortgagee
hereunder, but such liens, rights, powers and remedies of the Mortgagee shall
continue unimpaired as before.
6.2.12 Discontinuance of Proceedings. If the Mortgagee shall
commence any proceeding to enforce any right, power or remedy hereunder or under
the Note or the other Loan Documents and such proceeding shall be discontinued
or abandoned for any reason, then in every such case the parties shall be
restored to their former positions and the rights, powers and remedies of the
Mortgagee shall continue as if no such proceeding had been commenced.
6.2.13 Judicial Foreclosure. The provisions hereinabove set forth
relating to the remedy of foreclosure of the lien of this Second Mortgage by
public sale to be conducted by the Mortgagee, are not intended as an exclusive
method of foreclosure hereunder or to deprive the Mortgagee of any other legal
or equitable remedies available to it. Accordingly, it is specifically agreed
that such remedy shall be cumulative and shall not in any way be construed as an
exclusive remedy, and Mortgagee shall be fully entitled to a court
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foreclosure and to avail itself of any and all other legal or equitable remedies
at any time available under the laws of The Commonwealth of Massachusetts.
6.2.14 Request for Notice of Default. Mortgagor and Mortgagee hereby
request the holder of any mortgage with a lien which has priority over this
Second Mortgage to give Notice to Mortgagee, at Mortgagee's address set froth on
page one of this Second Mortgage, of any default under the superior encumbrance
and of any sale or other foreclosure action thereunder.
6.3 No Conditions Precedent to Exercise of Remedies. The Mortgagor shall
not be relieved of any obligation by reason of the failure of the Mortgagee to
comply with any request of the Mortgagor or of any other person to take action
to foreclose on this Mortgage or otherwise to enforce any provisions of the
Note, this Second Mortgage, the Second Loan Agreement or the other Loan
Documents, or by reason of the release, regardless of consideration, of all or
any part of the Mortgaged Property, or by reason of any agreement or stipulation
between any subsequent owner of the Mortgaged Property and the Mortgagee
extending the time of payment or modifying the terms of the Note, this Second
Mortgage or the other Loan Documents without first having obtained the consent
of the Mortgagor, and, in the latter event, the Mortgagor shall continue to be
liable to make payment according to the terms of any such extension or
modification agreement, unless expressly released and discharged in writing by
the Mortgagee. The Mortgagee shall not be required to proceed hereunder before
proceeding against any other security held by the Mortgagee for the payment of
the Secured Obligations or for the performance by the Mortgagor of all of its
obligations under the Note, this Second Mortgage or any of the Loan Documents,
nor shall the Mortgagee be required to proceed against such other security
before proceeding hereunder. The Mortgagee shall be entitled to proceed
hereunder and against such other security in such order and manner as it may
elect and no such action by the Mortgagee shall operate to preclude it from
proceeding against any or all of any security at the same time or in any order.
6.4 No Merger. It is the intention of the parties hereto that if the
Mortgagee shall at any time hereafter acquire title to all or any portion of the
Mortgaged Property, then, and until the Secured Obligations have been satisfied
in full, the interest of the Mortgagee hereunder and the lien of this Second
Mortgage shall not merge or become merged in or with the estate and interest of
the Mortgagee as the holder and owner of title to all or any portion of the
Mortgaged Property and that, until such payment, the estate of the Mortgagee in
the Mortgaged Property and the lien of this Second Mortgage and the interest of
the Mortgagee hereunder shall continue in full force and effect to the same
extent as if the Mortgagee had not acquired title to all or any portion of the
Mortgaged Property.
6.5 Remedies Cumulative. The remedies specified in this Section shall be
in addition to all other rights and remedies provided herein or in any other
Loan Document and which the Mortgagee may have at law or in equity and no single
or partial exercise by the Mortgagee of any right or remedy hereunder or under
any other Loan Document or which the Mortgagee may have at law or in equity
shall exhaust the same or shall preclude any other or further exercise thereof
or of any other right or remedy hereunder or under any other Loan Document or
which the Mortgagee may have at law or in equity, and every
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such right or remedy hereunder or under any other Loan Document or which the
Mortgagee may have at law or in equity may be exercised at any time and from
time to time after the occurrence of an Event of Default.
6.6 Mortgagee's Performance of Mortgagor's Obligations. If, after the
giving of any applicable notice and expiration of any applicable grace and/or
cure period, Mortgagor shall fail timely to perform any of the covenants
contained in this Second Mortgage, the Note, the Second Loan Agreement or any
other Loan Document, Mortgagee may make advances to perform the same on
Mortgagor's behalf (except that Mortgagee agrees that it shall not make advances
under this Section to pay any amount(s) secured by a Lien, or any Imposition,
which Mortgagor is then contesting fully in accordance with the provisions of
Section 4.6 or Section 4.7, as applicable). Inaction of Mortgagee shall never be
considered as a waiver of any right accruing to it on account of any Event of
Default nor shall the provisions of this Section 6.6 or any exercise by
Mortgagee of its rights hereunder prevent any default from constituting an Event
of Default. Mortgagee, in making any payment hereby authorized (a) relating to
Impositions, may do so according to any bill, statement or estimate, without
inquiry into the validity of any such Imposition; (b) for the purchase,
discharge, compromise or settlement of any lien, may do so without inquiry as to
the validity or amount of any claim for lien which may be asserted; or (c) in
connection with the completion of construction or alterations, furnishing or
equipping of the Improvements or the rental, operation or management of the
Mortgaged Property or the payment of operating costs thereof, may do so in such
amounts and to such persons as Mortgagee may deem appropriate. Nothing contained
herein shall be construed to require Mortgagee to advance monies for any
purpose.
ARTICLE VII
MISCELLANEOUS
7.1 Enforceability. In the event that any provision of this Second
Mortgage, the Note, the Second Loan Agreement or any other Loan Document or the
application thereof to Mortgagor or any circumstance in any jurisdiction
governing this Second Mortgage, the Note, the Second Loan Agreement or such Loan
Document shall, to any extent, be invalid or unenforceable under any Law, such
provision shall be deemed inoperative only to the extent that it may conflict
therewith and shall be deemed modified to conform to such Law, and the remainder
of this Second Mortgage, the Note, the Second Loan Agreement or such Loan
Document and the application of such invalid or unenforceable provision to
parties, jurisdictions or circumstances other than to whom or to which it is
held invalid or unenforceable shall not be affected thereby nor shall the same
affect the validity or enforceability of any other provision of this Second
Mortgage, the Note, the Second Loan Agreement or such Loan Document.
7.2 Maximum Rate of Interest. Notwithstanding any contrary provision of
this Second Mortgage, in no event shall the aggregate of the interest payable
hereunder or under the Note, the Second Loan Agreement or any other Loan
Document, or penalties or premiums for late payments, Prepayment Premiums (as
defined in the Note) loan servicing fees, application fees, commitment fees,
"points" or any other amounts, fees or charges
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which would under any applicable Law be deemed "interest" ever exceed the
maximum amount of interest which under any applicable Law could be lawfully
charged on the principal balance of the Note from time to time outstanding. In
this connection, it is expressly stipulated and agreed that it is the intention
of Mortgagee and Mortgagor in the execution and delivery of the Note, this
Second Mortgage, the Second Loan Agreement, the Assignment of Leases, the
Indemnity Agreement and any other Loan Document contractually to limit the
maximum amounts charged to, contracted for with, or received from Mortgagor in
connection with the Secured Obligations which would be deemed "interest" under
any applicable Law to the maximum non-usurious amount of interest which would be
permitted under such Law. In furtherance thereof, it is stipulated and agreed
that none of the terms of this Second Mortgage, the Note, the Second Loan
Agreement, the Assignment of Leases, the Indemnity Agreement or any other Loan
Document shall ever be construed to create a contract to pay for the use,
forbearance or detention of money interest at a rate in excess of the maximum
non-usurious interest rate permitted to be charged to, contracted for with, or
received from Mortgagor by Mortgagee under any applicable Law; neither Mortgagor
nor any Guarantor (as defined in Section 7.9) under the Guaranty (as defined in
Section 7.9), endorser or other parties now or hereafter becoming liable for the
payment of the Secured Obligations shall ever be liable for interest in excess
of the maximum non-usurious interest that under any applicable Law could be
charged, contracted for or received from Mortgagor by Mortgagee; and the
provisions of this Section shall be deemed to govern the maximum rate and amount
of interest which may be paid under the Note, the Second Loan Agreement, the
Indemnity Agreement, the Assignment of Leases and any other Loan Document, and
shall control over all other provisions of this Second Mortgage, the Note, the
Second Loan Agreement, the Assignment of Leases or any other Loan Document which
might be in apparent conflict herewith. Specifically and without limiting the
generality of the foregoing, it is expressly provided:
7.2.1 If and when any installment of the interest calculated under
the Note becomes due and the aggregate amount thereof, when added to the
aggregate amount of any other amounts which constitute interest on the
indebtedness evidenced thereby and which have been heretofore paid on said
indebtedness, would be in excess of the maximum non-usurious amount of interest
permitted by any applicable Law, in light of all discounts, payments or
prepayments theretofore made on said indebtedness and presuming the Secured
Obligations will be paid at their stated maturity date, then the aggregate
amount of such interest installment shall be automatically reduced to the
maximum sum, if any, which could lawfully be paid as interest on the principal
balance of the Note on such date under such circumstances.
7.2.2 If under any circumstances the aggregate amounts paid on the
Note, this Second Mortgage, the Second Loan Agreement, the Indemnity Agreement,
the Assignment of Leases and any other Loan Document prior to and incident to
final payment thereof include any amounts which under any applicable Law would
be deemed interest and which would exceed the maximum non-usurious amount of
interest which, under any applicable Law, could lawfully have been collected on
such indebtedness, Mortgagor and Mortgagee stipulate that such payment and
collection will have been and will be deemed to have been the result of
mathematical error on the part of both Mortgagor and Mortgagee, and the person
or entity receiving such excess payment shall promptly refund the amount of such
excess (to the extent only of the excess of such interest payments above the
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maximum non-usurious amount which could lawfully have been collected and
retained under any applicable Law) upon discovery of such error by the person or
entity receiving such payment or Notice thereof from the person or entity making
such payment; and
7.2.3 All amounts paid or agreed to be paid in connection with the Secured
Obligations which would under any applicable Law be deemed "interest" shall, to
the extent permitted by such Law, be amortized, prorated, allocated and spread
throughout the full term of the Note.
7.3 Notices. All notices, requests for approval or consent, demands,
consents, approvals and other communications (collectively, "Notices") hereunder
shall be in writing and shall be sent by hand, or by telecopy (with a duplicate
copy sent the same day by reputable overnight courier service, postage prepaid),
or by postage prepaid, certified or registered mail, return receipt requested,
or by reputable overnight courier service, postage prepaid, addressed to the
party to be notified as set forth below:
(a) if to Mortgagee,
SEPRACOR, INC.
111 Locke Drive
Marlborough, Massachusetts 01752
Attn: Vice President for Finance and Administration
with a copy to:
Nixon Peabody LLP
101 Federal Street
Boston, MA 02110
Attn: William C. Stone, PC
Telecopy No.: 617-345-1300
(b) if to Mortgagor,
WATERFORD PARK, LLC
c/o Waterford Development Corp.
175 Highland Avenue
Needham, MA 02494
Attn: Robert E. Shapiro
with a copy to:
Garrity Levin & Muir
99 Summer Street
Boston, Massachusetts 02110
Attn: Jonathan Levin, Esq.
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Notices shall be deemed given when so delivered by hand or when a legible
copy is received by telecopier (with receipt being verified by telephone
confirmation and provided that a copy is sent on the same day by reputable
overnight courier service), or if mailed, five (5) business days after mailing
(or one (1) business day for reputable overnight courier service), with failure
to accept delivery constituting delivery for this purpose. Any party hereto may
change the addresses for Notices set forth above by giving at least ten (10)
days' prior Notice of such change in writing to the other party as aforesaid and
otherwise in accordance with these provisions.
7.4 No Release. Mortgagor agrees that no other security, now existing or
hereafter taken, for the Secured Obligations shall be impaired or affected in
any manner by the execution hereof; no security subsequently taken by any holder
of the Secured Obligations shall impair or affect in any manner the security
given by this Second Mortgage; all security for the payment of the Secured
Obligations shall be taken, considered, and held as cumulative; and the taking
of additional security shall at no time release or impair any security by
endorsement or otherwise previously given. Mortgagor further agrees that any
part of the security herein described may be released without in any way
altering, varying, or diminishing the force, effect, or lien of this Second
Mortgage, or of any renewal or extension of said lien, and that this Second
Mortgage shall continue as a first lien, assignment, and security interest on
all the Mortgaged Property not expressly released until all Secured Obligations
are fully discharged and paid.
7.5 Attorneys' Fees and Costs of Mortgagee. Mortgagor agrees to pay,
within ten (10) business days of demand of Mortgagee, all actual reasonable
out-of-pocket expenses incurred by Mortgagee, including without limitation
attorneys' charges, disbursements and reasonable fees, in connection with the
enforcement by Mortgagee of any of the Note, this Second Mortgage, the Second
Loan Agreement, the Guaranty, the Indemnity Agreement, the Assignment of Leases
or any of the other Loan Documents.
7.6 Brokerage. Mortgagor hereby indemnifies and holds harmless Mortgagee
against all liability, cost and expense, including without limitation attorneys'
charges, disbursements and reasonable fees, incurred in connection with any
claims which may be asserted by any broker or finder or similar agent alleging
to have dealt with Mortgagor in any of the transactions contemplated hereby;
excluding however such amounts, if any, which Mortgagee has agreed in writing to
pay.
7.7 Indemnification. Mortgagor will protect, indemnify and save harmless
Mortgagee from and against any and all liabilities, obligations, claims,
damages, penalties, assessments, fines, causes of action and actual reasonable
out-of-pocket expenses (including without limitation attorneys' disbursements,
charges and reasonable fees) imposed upon or incurred by or asserted against
Mortgagee or the Mortgaged Property or any of Mortgagee's interest therein, by
reason of the execution of this Second Mortgage, the Note, the Second Loan
Agreement or any other Loan Document or the Guaranty, or the consummation of the
transactions contemplated hereby or thereby, or the occurrence or existence
during or prior to the term of this Second Mortgage of any of the following: (i)
ownership by Mortgagor of any interest in the Mortgaged Property or receipt of
any rent or other sum therefrom during any period when Mortgagor has not been
excluded from possession; (ii) any accident, injury to or death of persons or
loss of or damage to property
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occurring on or about the Mortgaged Property or any part thereof or the
adjoining sidewalks, curbs, vaults and vault space, if any, and streets and ways
during any period when Mortgagor has not been excluded from possession; (iii)
any design, construction, operation, use, nonuse or condition of the Mortgaged
Property or any part thereof or the adjoining sidewalks, curbs, vaults and vault
space, if any, and streets and ways, including, without limitation, claims or
penalties arising from violation of any requirement of law or insurance
requirements as well as any claim based on any patent or latent defect, whether
or not discoverable by Mortgagor, any claim as to which the insurance is
inadequate, and any claim in respect of any adverse environmental impact or
effect; (iv) any negligence or tortious act or omission on the part of Mortgagor
or any of its agents, contractors, servants, employees, sublessees, licensees,
guests or invitees; (v) any failure by Mortgagor to perform its obligations
under this Second Mortgage, the Note, the Second Loan Agreement, the Indemnity
Agreement, the Assignment of Leases, the Assignment of Contracts or any other
Loan Document; or (vi) any claims arising from the alleged or actual breach of
Mortgagor's obligations under Section 7.6 hereof, whether such claim proves true
or false. Mortgagor further agrees that its obligations under this Section 7.7
shall include, but are not limited to, liability for damages resulting from the
personal injury or death of an employee of Mortgagor, regardless of whether
Mortgagor has paid the employee under the worker's compensation laws of the
Jurisdiction, or other similar federal or state legislation for the protection
of employees. Mortgagor agrees that its obligations under this Section 7.7 shall
include indemnifying Mortgagee for all reasonable attorney's charges,
disbursements and fees, and all other actual and reasonable out-of-pocket
expenses incurred by Mortgagee to enforce the terms of this Section. Mortgagor's
obligations under this Section are exclusive of, and in addition to, any and all
insurance obligations which Mortgagor has under this Second Mortgage and any of
its obligations under the Indemnity Agreement. If any action or proceeding shall
be commenced (including without limitation an action to foreclose this Second
Mortgage or to collect the indebtedness secured hereby or to enforce Mortgagee's
rights under the Note, the Second Loan Agreement, the Indemnity Agreement, the
Assignment of Leases and the Assignment of Contracts or any other Loan Document)
by Mortgagee or Mortgagor or any third party, to which action or proceeding
Mortgagee is made a party by reason of the execution of this Second Mortgage,
the Note, the Second Loan Agreement, the Indemnity Agreement, the Assignment of
Leases and the Assignment of Contracts or any other Loan Document in which it
becomes necessary to enforce, defend or uphold the lien of this Second Mortgage
or Mortgagee's rights under the Note, all actual and reasonable out-of-pocket
expenses incurred by Mortgagee in connection with any litigation to enforce,
prosecute or defend the rights and lien created hereby or otherwise incurred in
connection with any action or proceeding referred to in this Section (including
without limitation attorneys' charges, disbursements and reasonable fees) shall
be paid by Mortgagor to Mortgagee within ten (10) days after demand. In case any
action, suit or proceeding is brought against Mortgagee by reason of any such
occurrence, Mortgagor, upon request of Mortgagee, will, at Mortgagor's sole cost
and expense, resist and defend such action, suit or proceeding or cause the same
to be resisted or defended by counsel designated by Mortgagor and approved by
Mortgagee, which approval shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Mortgagor shall have no obligations under this
Section 7.7 with respect to any claims arising solely out of the grossly
negligent or intentional acts of Mortgagee or its employees, agents or other
persons acting on its behalf.
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7.8 Environmental Matters. Without limiting the foregoing obligations and
indemnities of Mortgagor, Mortgagor hereby represents and warrants that, to the
best of its knowledge and belief after reasonable investigation, it is currently
in compliance in all material regards with, and covenants and agrees (subject to
the rights of the tenant under the Tenant Lease) that it will manage and operate
the Mortgaged Property and will, in accordance with prudent commercial business
practices, cause each tenant under any Lease to occupy its demised portion of
the Mortgaged Property in compliance in all material regards with, Environmental
Laws (as that term is defined in the Indemnity Agreement). Subject to the rights
of the tenant under the Tenant Lease, Mortgagor further covenants and agrees
that, in accordance with prudent commercial business practices, it shall not
install or permit to be installed in the Mortgaged Property any Hazardous
Materials (as that term is defined in the Indemnity Agreement) (other than those
lawful amounts of cleaning supplies and other materials incidental to the
Permitted Uses of the Mortgaged Property, and except as disclosed in the
Existing Reports, as that term is defined in the Indemnity Agreement). Mortgagor
hereby represents and warrants that, to the best of its knowledge after
reasonable investigation, it has heretofore delivered to Mortgagee true, correct
and complete copies of all reports, citations, notices and other writings,
including without limitation hazardous waste disposal manifests, which Mortgagor
has received from or delivered to any governmental authority empowered to
regulate or oversee any of the foregoing activities; and Mortgagor covenants and
agrees that it shall from and after the date hereof deliver to Mortgagee within
ten (10) days of receipt thereof, true, correct and complete copies of all such
writings prepared or received by Mortgagor. Mortgagor shall use reasonable
efforts to cause the tenant under the Tenant Lease to remove from the Mortgaged
Property and dispose of any Hazardous Materials in violation of Environmental
Laws in a manner consistent with and in compliance with applicable Environmental
Laws and shall take any and all other action to remedy, rectify, rehabilitate
and correct any violation of any applicable Environmental Law or any violation
of any agreement entered into between Mortgagor and Mortgagee and/or any third
party with respect to Hazardous Materials. Mortgagor agrees to indemnify, defend
with counsel reasonably acceptable to Mortgagee (at Mortgagor's sole cost and
expense), and hold Mortgagee harmless against any claim, response or other
actual expenses, damages, liability or demand (including without limitation all
reasonable attorneys' charges, disbursements and reasonable fees incurred by
Mortgagee) arising out of any claimed violation by Mortgagor of any
Environmental Laws or breach of any of the foregoing covenants or agreements
except to the extent caused solely by the actions of Mortgagee or its employees,
agents or other persons acting on its behalf. The foregoing provision shall not
be construed as imposing on Borrower any obligation or liability for any act or
omission of tenant under the Tenant Lease.
7.9 Limitations on Recourse. The provisions of Section 10 of the Note,
Limitations on Recourse, are applicable to this Second Mortgage.
7.10 Estoppel Certificates. Mortgagor and Mortgagee agree at any time and
from time to time, upon ten (10) business days prior written notice from either
party, to execute and deliver to such party, or to any person or entity
designated by such party, a statement in writing certifying (i) the outstanding
principal balance of the Secured Obligations, (ii) the last date to which
interest has been paid by Mortgagor, (iii) that the Loan is in full force and
effect, (iv) to the knowledge of Mortgagor, whether Mortgagor has any defenses
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or offsets thereto, and (v) whether any default on the part of Mortgagor has
occurred (if made by Mortgagee, subject to its knowledge).
7.11 Effect of Extensions and Amendments. If the payment of the Secured
Obligations, or any part thereof, shall be extended or varied, or if any part of
the security or guaranties therefor be released, all persons (including, without
limitation the Guarantors under the Guaranty now or at any time hereafter liable
therefor, or interested in the Mortgaged Property, shall be held to assent to
such extension, variation or release, and their liability, and the lien, and all
provisions hereof, shall continue in full force and effect; the right of
recourse against all such persons being expressly reserved by Mortgagee,
notwithstanding any such extension, variation or release (subject to the express
limitations set forth in Section 7.9). Any person, firm or corporation taking a
junior deed of trust or other Lien upon the Mortgaged Property or any part
thereof or any interest therein, shall, without waiving any other limitations in
this Second Mortgage on such Liens, take the said Lien subject to the rights of
Mortgagee to amend, modify, extend or release the Note, this Second Mortgage or
any other document or instrument evidencing, securing or guarantying the
indebtedness secured hereby, in each case without obtaining the consent of the
holder of such junior Lien and without the lien of this Second Mortgage losing
its priority over the rights of any such junior Lien.
7.12 No Joint Venture. Mortgagor acknowledges that the relationship
between the parties is that of mortgagor and mortgagee and that in no event
shall Mortgagee be deemed to be a partner or joint venturer with Mortgagor.
Mortgagee shall not be deemed to be such a partner or joint venturer by reason
of its becoming a mortgagee in possession or exercising any rights pursuant to
this Second Mortgage or any other of the Loan Documents.
7.13 Funds Held in Accounts. Mortgagor hereby agrees that Mortgagee shall
have no liability for any investment losses or reduction in value which accrue
or occur with respect to any amounts held by Mortgagee in any accounts hereunder
for the benefit or account of Mortgagor or the Premises (such as insurance
proceeds or partial condemnation awards) and any such losses shall be borne
solely by Mortgagor except where such losses are caused by Mortgagee's gross
negligence or willful misconduct. In addition, Mortgagor agrees that all
interest and/or other income on such funds shall for income tax purposes be
deemed to belong to Mortgagor.
7.14 Expenses of Mortgagee. Any reference herein to "actual expenses
incurred by Mortgagee" shall be deemed to refer to actual costs and expenses
incurred by Mortgagee paid or payable to third parties (as opposed to
Mortgagee's general overhead expenses).
7.15 Governing Law. This Second Mortgage shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts and
any applicable laws of the United States of America.
7.16 Captions and Pronouns. The captions and headings of the various
sections of this Second Mortgage are for convenience only, and are not to be
construed as confining or limiting in any way the scope or intent of the
provisions hereof. Whenever the context
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requires or permits, the singular shall include the plural, the plural shall
include the singular, and the masculine, feminine and neuter shall be freely
interchangeable.
7.17 Amendments, Waivers, Etc. No amendment, modification, termination, or
waiver of any provision of this Second Mortgage nor consent to any departure
therefrom shall in any event be effective unless the same shall be in writing
and signed by the party against which such action or waiver is sought to be
charged, and then such action or waiver shall be effective only in the specific
instance and for the specific purpose for which given or omitted. No notice to
or demand on Mortgagor in any case shall entitle Mortgagor to any other or
further notice or demand in similar or other circumstances except as provided in
this Second Mortgage.
7.18 Entire Agreement; Controlling Provisions. This Second Mortgage, the
Note, the Second Loan Agreement, the Indemnity Agreement, the Assignment of
Leases and the other Loan Documents embody the entire agreement between the
parties hereto and supersede all prior agreements and understandings between
them relating to the same subject matter. If and to the extent the provisions of
this Second Mortgage conflict with the provisions of the Second Loan Agreement,
the provisions of the Second Loan Agreement shall govern.
7.19 Covenants Running With the Land; Successors and Assigns. All of the
grants, covenants, terms, provisions and conditions of this Second Mortgage
shall run with the land and shall apply to and bind the successors and assigns
of Mortgagor, and apply to and inure to the benefit of the successors and
assigns of Mortgagee.
7.20 Statutory Condition. This Second Mortgage is upon the STATUTORY
CONDITION, subject to the applicable notice, grace and cure provisions provided
herein, and upon the further condition that all covenants and agreements of
Mortgagor contained herein shall be kept and performed and for any breach of
which Mortgagee shall have the STATUTORY POWER OF SALE.
7.21 Forbearance; Subordination. Under the circumstances described in, and
subject to the terms and conditions of, Section 15 of the Loan Agreement,
Mortgagee is obligated to forebear from exercising remedies hereunder and to
subordinate the lien hereof to an alternative financing by Borrower.
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IN WITNESS WHEREOF, Mortgagor has executed this Second Mortgage under seal
as of date first set forth above.
WATERFORD PARK, LLC,
By: /s/ Richard N. Houlding
---------------------------------
Richard N. Houlding
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, ss. January ____, 2001
Then appeared the above-named Richard N. Houlding, Manager of WATERFORD
PARK, LLC, and acknowledged the foregoing to be his free act and deed as Manager
of WATERFORD PARK, LLC, before me
------------------------------------
Notary Public
My Commission Expires:_____________
(Seal)
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EXHIBIT A
LAND DESCRIPTION
Those certain parcels of land with the buildings thereon situated in
Marlborough, Middlesex County, Massachusetts, being bounded and described as
follows:
1