MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING STATEMENT Dated as of August 28, 2009 From

 

 

 

MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FILING STATEMENT

Dated as of August 28, 2009

From

BLUE RIDGE WNJ, LLC

(the “Company” )

To

WELLS FARGO BANK NORTHWEST, N.A. AS TRUSTEE

(the “Mortgagee” )

 

Walgreen Eastern Co., Inc. Store

This instrument was

northeast corner New Jersey State Highway

prepared by and when recorded

and Route No. 9

return to:

City of Tom’s River

Daniel J. Favero, Esq.

County of Ocean, New Jersey

Chapman and Cutler LLP

111 West Monroe Street

Chicago, Illinois  60603

 

 

2673218.01.02.doc

1914001

 

 

 

TABLE OF CONTENTS

SECTION

HEADING

PAGE

Parties

1

Recitals

1

Granting Clauses

2

SECTION 1.

DEFINITIONS

8

SECTION 2.

GENERAL COVENANTS AND WARRANTIES

14

Section 2.1.

Office for Notices

14

Section 2.2.

Maintenance of Existence, Rights

14

Section 2.3.

Negative Covenants

14

Section 2.4.

Mergers and Consolidations

18

Section 2.5.

Financial Information and Reports

18

Section 2.6.

Notice of Default

19

Section 2.7.

Mortgage Title Insurance Policy

19

Section 2.8.

Payment of Certain Taxes

20

Section 2.9.

Ownership of Mortgaged Property

20

Section 2.10.

Further Assurances

20

Section 2.11.

Payment of Principal and Interest

20

Section 2.12.

Prepayment of Note

20

Section 2.13.

Method and Place of Payment of Principal and Interest

21

Section 2.14.

Maintenance of Mortgaged Property, Other Liens, Compliance with Laws, Etc  22

Section 2.15.

Insurance

23

Section 2.16.

Payment of Taxes and Other Charges

25

Section 2.17.

Limitation on Liens

26

Section 2.18.

Assignment; Obligations and Terms Respecting the Lease, the Other Leases and the Lease Guaranties  27

Section 2.19.

Advances

31

Section 2.20.

Recordation

31

Section 2.21.

After-Acquired Property

32

Section 2.22.

Environmental Indemnity

32

Section 2.23.

Separate Identity

32

Section 2.24.

General Indemnity

33

Section 2.25.

No Forfeiture

34

SECTION 3.

POSSESSION, USE AND RELEASE OF PROPERTY

34

Section 3.1.

The Company’s Right of Possession

34

Section 3.2.

Release of Mortgaged Property - Event of Loss and Prepayment of Note

34

 

 

 

 

 

Section 3.3.

Eminent Domain

34

SECTION 4.

APPLICATION OF INSURANCE AND CERTAIN OTHER MONEYS RECEIVED BY THE MORTGAGEE

35

Section 4.1.

Insurance Proceeds and Condemnation Awards

35

Section 4.2.

Title Insurance

36

Section 4.3.

Investment of Insurance Proceeds and Condemnation Awards or Compensation  36

Section 4.4.

Application If Event of Default Exists

37

SECTION 5.

DEFAULTS AND REMEDIES THEREFOR

37

Section 5.1.

Events of Default

37

Section 5.2.

Remedies

39

Section 5.3.

Application of Proceeds

42

Section 5.4.

Waiver of Extension, Appraisement and Stay Laws

42

Section 5.5.

Costs and Expenses of Foreclosure

43

Section 5.6.

Delay or Omission Not a Waiver

43

Section 5.7.

Restoration of Positions

44

Section 5.8.

Note to Become Due upon Sale

44

SECTION 6.

MISCELLANEOUS

44

Section 6.1.

Successors and Assigns

44

Section 6.2.

Severability

44

Section 6.3.

Addresses for Notices and Demands

44

Section 6.4.

Headings and Table of Contents

45

Section 6.5.

Release of Mortgage

45

Section 6.6.

Counterparts

45

Section 6.7.

Successor Mortgagee

45

Section 6.8.

Governing Law

45

Section 6.9.

Time

45

Section 6.10.

Limitations of Liability

45

Section 6.11.

Expenses, Stamp Tax Indemnity

46

Section 6.12.

Cooperation

46

Section 6.13.

No Merger of Estates

47

Section 6.14.

NAIC Filing.

47

Section 6.15.

Commitment.

47

Signature Page

49

 

ATTACHMENTS TO MORTGAGE:

 

EXHIBIT A

—

Legal Description of Real Property

 

 

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MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING STATEMENT dated as of August 28, 2009 (the “Mortgage” ) , from BLUE RIDGE WNJ, LLC , a limited liability company organized under the laws of the State of New Jersey (the “Company” ), having its principal office at P.O. Box 707, Blakeslee, Pennsylvania  18610, to WELLS FARGO BANK NORTHWEST, N.A. AS TRUSTEE under that certain Pass-Through Trust Agreement and Declaration of Trust dated as of August 28, 2009 (the “Mortgagee” ), whose address is MAC:  1228-120, 299 South Main Street, 12th Floor, Salt Lake City, Utah 84111.

This Mortgage is also a Security Agreement and financing statement under the Uniform Commercial Code of the State of New Jersey and in compliance therewith the following information is set forth:

1.

The names and addresses of the Debtor and Secured Party are:

Debtor:

Blue Ridge WNJ, LLC
P.O. Box 707
Blakeslee, Pennsylvania  18610
Attention:  Eldon D. Dietterick

 

Secured Party:

Wells Fargo Bank Northwest, N.A. as Trustee

MAC:  1228-120

299 South Main Street, 12th Floor

Salt Lake City, Utah  84111
Attention:  Corporate Trust Services

2.

The property covered by this Security Agreement and financing statement is described in the Granting Clauses hereof.

3.

Some or all of the fixtures, equipment and other property described herein are or may become fixtures.

4.

The Debtor is the record owner of the real estate described in Exhibit A attached hereto and made a part hereof.

RECITALS

A.

The Company and the Mortgagee have executed and delivered the Note Purchase Agreement dated as of August 28, 2009 (the “Note Purchase Agreement” ) providing for the commitment of the Mortgagee to purchase the 6.90% Senior Secured Note, due August 15, 2031 (the “Note” ) of the Company in the principal amount of $4,038,000, to be dated the date of issue, expressed to bear interest from the date of issue until maturity at the rate of 6.90% per annum and will amortize as set forth in the amortization schedule attached thereto.  Interest on the Note will be computed on the basis of a 360-day year of twelve 30-day months.

 

 

 

 

 

 

 

B.

The Company, as successor-in-interest to Net Lease Development LLC, has leased the Property described in Granting Clause First below to Walgreen Eastern Co., Inc., a corporation organized under the laws of the State of New York (the “Tenant” ), under and pursuant to the terms of that certain Lease dated May 18, 2005 (such Lease as it may heretofore or hereafter be amended, supplemented or modified and any replacement thereof is herein referred to as the “Lease” ) and is assigning all of its right, title and interest in and to the Lease to the Mortgagee pursuant to this Mortgage.  The obligations of the Tenant under the Lease have been guaranteed by Walgreen Co., an Illinois corporation (the “Credit Lease Guarantor” ) in accordance with the terms of that certain Guaranty dated May 18, 2005 (the “Credit Lease Guaranty” ).

C.

The Note, as may be amended from time to time, and all principal thereof, premium, if any, and interest thereon and all additional amounts and other sums at any time due and owing from, and required to be paid by the Company under the terms of the Note, the Note Purchase Agreement, this Mortgage and the other Operative Agreements (as defined herein) are collectively hereinafter sometimes referred to as the “Indebtedness Hereby Secured.”

D.

The Company is duly authorized under all applicable provisions of law and its Organizational Documents (as defined herein) to issue the Note, to execute and deliver this Mortgage and to mortgage, convey and assign the Mortgaged Property (as defined herein) to the Mortgagee as security for the Indebtedness Hereby Secured and all action and all consents, approvals and other authorizations and all other acts and things necessary to make this Mortgage the valid, binding and legal instrument for the security of the Indebtedness Hereby Secured have been done and performed.

NOW , THEREFORE , THIS MORTGAGE WITNESSETH :  That the Company, in consideration of the premises, the purchase and acceptance of the Note by the Mortgagee and of the sum of Ten Dollars received by the Company from the Mortgagee and other good and valuable consideration, receipt whereof is hereby acknowledged, and in order to secure the payment of the principal of, premium, if any, and interest on the Note according to its tenor and effect, and to secure the payment of all other Indebtedness Hereby Secured and the performance and observance of all the covenants, agreements and conditions contained in or incorporated by reference into the Note, this Mortgage, the Note Purchase Agreement or the other Operative Agreements, the Company does hereby grant, warrant, mortgage, assign, pledge, sell, demise, bargain, convey, transfer, set over and hypothecate unto the Mortgagee, its successors and assigns, forever, WITH POWER OF SALE , to the extent permitted by law, and grants to the Mortgagee, its successors and assigns, forever, a security interest in and to all and singular the following described properties, rights, interest and privileges and all of the Company’s estate, right, title and interest therein, thereto and thereunder (all of which properties, rights, interests and privileges hereby mortgaged, assigned, pledged and hypothecated or intended so to be are hereinafter collectively referred to as the “Mortgaged Property” ):

 

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GRANTING CLAUSE FIRST

THE PROPERTY

The parcel of land in County of Ocean, State of New Jersey, described in Exhibit A attached hereto and made a part hereof, together with the entire interest of the Company in and to all buildings, structures, improvements and appurtenances now standing, or at any time hereafter constructed or placed, upon such land, including all right, title and interest of the Company, if any, in and to all building material, building equipment and fixtures of every kind and nature whatsoever on said land or in any building, structure or improvement now or hereafter standing on said land which are classified as fixtures under applicable law and which are used in connection with the operation, maintenance or protection of said buildings, structures and improvements as such (including, without limitation, all boilers, air conditioning, ventilating, plumbing, heating, lighting and electrical systems and apparatus, all communications equipment and intercom systems and apparatus, all sprinkler equipment and apparatus and all elevators and escalators) and the reversion or reversions, remainder or remainders, in and to said land, and together with the entire interest of the Company in and to all and singular the tenements, hereditaments, easements, rights of way, rights, privileges and appurtenances to said land, belonging or in anywise appertaining thereto, including, without limitation, the entire right, title and interest of the Company in, to and under any streets, ways, alleys, gores or strips of land adjoining said land, and all claims or demands whatsoever of the Company either in law or in equity, in possession or expectancy, of, in and to said land, it being the intention of the parties hereto that, so far as may be permitted by law, all property of the character hereinabove described, which is now owned or is hereafter acquired by the Company and is affixed or attached or annexed to said land, shall be and remain or become and constitute a portion of said land and the security covered by and subject to the lien of this Mortgage, together with all accessions, parts and appurtenances appertaining or attached thereto and all substitutions, renewals or replacements of and additions, improvements, accessions and accumulations to any and all thereof, and together with all rents, income, revenues, awards, issues and profits thereof, and the present and continuing right to make claim for, collect, receive and receipt for any and all of such rents, income, revenues, awards, issues and profits arising therefrom or in connection therewith (collectively, the “Property” ).

GRANTING CLAUSE SECOND

THE LEASE, THE OTHER LEASES, RENTS AND THE LEASE GUARANTIES

The Lease, the Other Leases (defined below) and all of the Company’s estate, right, title, interest, claim and demand as landlord in, to and under the Lease and the Other Leases, including all extensions and renewals of the term thereof, and all existing or future amendments, supplements or modifications of the Lease and the Other Leases (and to any short memorandum form of the Lease and the Other Leases executed for recording purposes), together with all rights, powers, privileges, options and other benefits of the Company, if any, in, to and under the Lease Guaranties (as defined herein) and all rights, powers, privileges, options and other benefits of the Company as landlord under the Lease and the Other Leases, including, without limitation,

 

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(a) the immediate and continuing right (whether or not an Event of Default under this Mortgage shall have occurred and be continuing) to receive and collect all rents (whether as fixed rent, basic rent, percentage rent, additional rent or otherwise), income, revenues, issues, profits, insurance proceeds, condemnation awards, bankruptcy claims, liquidated damages, purchase price proceeds and other payments, tenders and security payable to or receivable by the landlord under the Lease and the Other Leases; (b) if the Tenant exercises any right, or shall be required, to purchase the Mortgaged Property or the landlord’s interest therein, the right and power (such power and right being coupled with an interest) to execute and deliver as agent and attorney-in-fact of the landlord under the Lease and the Other Leases, an appropriate deed or other instruments of transfer necessary or appropriate for the conveyance and transfer to the purchaser of the Mortgaged Property or the portion thereof being so purchased, and all interest of the landlord therein and to perform in the name and for and on behalf of the landlord, as such agent and attorney-in-fact, any and all other necessary or appropriate acts with respect to any such purchase, conveyance and transfer; (c) the right to make all waivers, consents and agreements; (d) the right to give and receive copies of all notices and other instruments or communications; (e) the right to take such action upon the occurrence of an event of default or default under the Lease, the Other Leases and the Lease Guaranties, including the commencement, conduct and consummation of legal, administrative or other proceedings, as shall be permitted by the Lease, the Other Leases, the Lease Guaranties, or by law; and (f) the right to do any and all other things whatsoever which the Company or any landlord is or may be entitled to do under the Lease, the Other Leases and the Lease Guaranties, or by law.

GRANTING CLAUSE THIRD

CONDEMNATION AWARDS

All of the right, title and interest of the Company in and to any award or awards or settlements or payments heretofore made or hereafter to be made by any municipal, county, state or federal authorities to the present or any subsequent owners of the Mortgaged Property, including without limitation any award or awards, or settlements or payments, hereafter made resulting from (i) condemnation proceedings or the taking of the Mortgaged Property, or any part thereof, under the power of eminent domain; or (ii) the alteration of grade or the location or the discontinuance of any street adjoining the Mortgaged Property or any portion thereof, or (iii) any other injury to or decrease in value of the Mortgaged Property; and the Company hereby agrees to execute and deliver from time to time such further instruments as may be requested by the Mortgagee to confirm such assignment to Mortgagee of any such award, damage, payment or other compensation.

GRANTING CLAUSE FOURTH

PERSONAL PROPERTY

All tangible and intangible personal property now owned or at any time hereafter acquired by the Company of every nature and description, and used in any way in connection with the Mortgaged Property, or any other portion of the same, including, without limitation, all

 

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inventory; goods; materials; supplies; equipment; furnishings; fixtures; accounts; accounts receivable; chattel paper; documents; instruments; investment property; money; bank accounts (including, without limitation, the Escrow Reserves (as defined in the Escrow and Servicing Agreement (as defined herein)) any accounts or reserves held by Mortgagee or by the Escrow Agent (as defined herein) under the terms of the Escrow and Servicing Agreement); deposit accounts; security deposits; claims to rebates, refunds or abatements of real estate taxes or any other taxes; contract rights, plans and specifications; permits, licenses and general intangibles; the rights of the Company under contracts, with respect to the Mortgaged Property or any portion thereof; signs, brochures, advertising and good will.

GRANTING CLAUSE FIFTH

OTHER AND AFTER-ACQUIRED PROPERTY

Any and all moneys and other property (including each amendment or supplement to any and all instruments included in the Mortgaged Property) which may from time to time, by delivery to the Mortgagee or by any instrument, including this Mortgage, be subjected to the lien hereof by the Company or by anyone on the behalf of the Company or with the consent of the Company, or which may come into the possession or be subject to the control of the Mortgagee pursuant to this Mortgage, or pursuant to any instrument included in the Mortgaged Property, it being the intention of the Company and the Mortgagee and it being hereby agreed by them that all property hereafter acquired by the Company and required to be subjected to the lien of this Mortgage or intended so to be shall forthwith upon the acquisition thereof by the Company be as fully embraced within the lien of this Mortgage as if such property were now owned by the Company and were specifically described in this Mortgage and granted hereby or pursuant hereto.

GRANTING CLAUSE SIXTH

PROCEEDS

All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquidated claims, including, without limitation, all proceeds of insurance and condemnation awards and payments and all products, additions, accessions, substitutions and replacements of any of the foregoing.  

SUBJECT , HOWEVER , as to all property or rights in property at any time subject to the lien hereof (whether now owned or hereafter acquired), to the following:

(a)

The agreement of the parties hereto that any and all improvements, trade fixtures, signs, furniture, furnishings, equipment, machinery or other tangible or intangible personal property located on the Mortgaged Property not owned by the Company, whether or not classified as fixtures under applicable law, are expressly excluded from the lien and security interest created by this Mortgage, and that the same

 

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shall in no instance be deemed to be encompassed within the term “Mortgaged Property” ; and

(b)

The Permitted Encumbrances, as defined in Section 1 hereof; and

(c)

Excepted Rights.

TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee and its successors and assigns, in fee simple title forever, with the purpose of securing performance of each agreement, covenant and warranty of the Company contained in the Operative Agreements and payment of all Indebtedness Hereby Secured.

IN TRUST , NEVERTHELESS , WITH POWER OF SALE ( to the extent permitted by law ) , upon the terms and trusts herein set forth for the benefit and security of all present and future holders of the Indebtedness Hereby Secured in accordance with its terms and all other sums payable hereunder or under the Note, and for the performance and observance of the Note and this Mortgage, all as herein set forth.

PROVIDED , NEVERTHELESS , and these presents are upon the express condition that if the Company performs the covenants herein contained and pays to the Mortgagee, its successors or assigns, the full amount of all Indebtedness Hereby Secured, the estate, right and interest of the Mortgagee in the property hereby conveyed shall cease and this Mortgage shall become null and void, but otherwise to remain in full force and effect.

It is agreed and understood by the parties hereto that:

1.

This Mortgage is intended to and shall constitute security for the entire Indebtedness Hereby Secured.

2.

Any part of the security herein described, and any security described in any other mortgage, assignment of lease or other instrument now or hereafter given to secure the indebtedness which is secured by this Mortgage, may be released by the Mortgagee without affecting the lien hereof on the remainder.

3.

The Company for itself and all who may claim through or under it waives any and all right to have the property and estates comprising the Mortgaged Property marshalled upon any foreclosure of the lien hereof, or to have the Mortgaged Property hereunder and the property covered by any other mortgage or assignment of lease securing the Note marshalled upon any foreclosure of any of said mortgages or assignments of leases, and agrees that any court having jurisdiction to foreclose such lien may order the Mortgaged Property sold as an entirety.

4.

Upon the occurrence of an Event of Default hereunder, the Mortgagee has, among other things, the right to foreclose on the Mortgaged Property and dispose of the same.  To the extent permitted by law, the Mortgagee’s deed or other instrument of

 

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conveyance, transfer or release (which, if permitted by law, may be in the name of the Mortgagee or as attorney for the Company and the Mortgagee hereby is irrevocably appointed) shall be effective to convey and transfer to the grantee an indefeasible title to the property covered thereby, discharged of all rights of redemption by the Company or any person claiming under it, and to bar forever all claims by the Company or the said Mortgagee to the property covered thereby and no grantee from the Mortgagee shall be under any duty to inquire as to the authority of the Mortgagee to execute the same, or to see to the application of the purchase money.

5.

The assignment made under Granting Clause Second and Section 2.18 hereof is executed as a present, unconditional and absolute assignment and not merely as collateral security, and the execution and delivery of this Mortgage shall not in any way impair or diminish any obligations of the Company as landlord under the Lease nor impair, affect or modify any of the terms and conditions of the Note or the Note Purchase Agreement, nor shall any of such obligations be imposed upon the Mortgagee, including but not limited to collecting rentals or enforcing performance by the Tenant.  Without limiting the generality of the foregoing, the Mortgagee shall not be obligated to perform or discharge, nor does the Mortgagee hereby undertake to perform or discharge, any obligation, duty or liability under the Lease, or under or by reason of this Mortgage; and it is further understood and agreed that this Mortgage shall not operate to place responsibility for the control, care, management or repair of the Mortgaged Property upon the Mortgagee, nor for the carrying out of any of the terms and conditions of the Lease, nor shall it operate to make the Mortgagee responsible or liable for any waste committed on the Mortgaged Property by the Tenant or any other parties, or for any dangerous or defective condition of the Mortgaged Property, or for any negligence of the management, upkeep, or repair or control of the Mortgaged Property resulting in loss or injury or death to any tenant, licensee, employee or stranger.  The Mortgagee may, at its option, although it shall not be obligated to do so, after giving written notice to the Tenant and the Company, perform any Lease covenant for and on behalf of the Company and may recover any money advanced, for any such purpose from the Company on demand, with interest at the Default Rate (as defined herein) (or at the maximum rate permitted by applicable law, whichever is less) from date of advancement.  Upon the payment of the principal of (and premium, if any) and all interest on the Note and of all other sums payable on the Note or under the Note Purchase Agreement or this Mortgage or any other Operative Agreement and the performance and observance of the provisions thereof, this Mortgage shall cease and terminate and all the estate, right, title, interest, claim and demand of the Company under the Lease in and to the above-described assigned property shall revert to the Company under the Lease, and the Mortgagee shall at the request of the Company deliver to the Company an instrument cancelling the assignment of Lease set forth in this Mortgage and reassigning the above-described assigned property to the Company.

6.

The Company does hereby irrevocably constitute and appoint the Mortgagee, its true and lawful attorney with full power of substitution, for it and in its name, place and stead, to ask, demand, collect, receive, receipt for, sue for, compound

 

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and give acceptance for any and all rents, income and other sums which are assigned under the Granting Clauses of this Mortgage with full power to sue for, settle, adjust or compromise any claim thereunder as surely as the Company could itself do and to endorse the name of the Company on all commercial paper given in payment or in part payment thereof, and in its discretion to file any claim or take any other action or proceedings either in its own name or in the name of the Company or otherwise, which the Mortgagee may deem necessary or appropriate to protect and preserve the right, title and interest of the Mortgagee in and to such rents and other sums and the security intended to be afforded by this Mortgage.

SECTION 1.

DEFINITIONS .

The following terms shall have the following meanings for all purposes of this Mortgage (any capitalized terms not otherwise defined herein shall have the meanings set forth therefor in the Note Purchase Agreement):

“Affiliate” of any specified Person, shall mean any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person, and any immediate family member of such specified Person and their Affiliates.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Bankruptcy Claims” is defined in Section 2.18(a) of this Mortgage.

“Bankruptcy Code” is defined in Section 2.18(a) of this Mortgage.

“Closing Date” is defined in the Note Purchase Agreement.

“Company” shall mean not only Blue Ridge WNJ, LLC, but also its successors and assigns.

“Credit Lease Guarantor” is defined in the Recitals hereto.

“Credit Lease Guaranty” is defined in the Recitals hereto.

“Default” shall mean any event which would constitute an Event of Default if any requirement in connection therewith for the giving of notice, or the lapse of time, or the happening of any further condition, event or action had been satisfied.

“Default Rate” shall mean 8.90% per annum.

“Environmental Legal Requirement” shall mean any applicable local, state or federal law, statute, ordinance, rule or regulation relating to public health, safety or the environment,

 

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including, without limitation, relating to releases, discharges or emissions to air, water, land or groundwater, to the withdrawal or use of groundwater, to the use and handling of polychlorinated biphenyls or asbestos, to the disposal, transportation, treatment, storage or management of solid or hazardous wastes or to exposure to toxic or hazardous materials, to the handling, transportation, discharge or release of gaseous or liquid substances and any regulation, order, notice or demand issued pursuant to such law, statute, ordinance, rule or regulation, in each case applicable to the property of the Company and its Subsidiaries or the operation, construction or modification of any thereof, including without limitation the following: the Clean Air Act, the Federal Water Pollution Control Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Comprehensive Environmental Response Compensation and Liability Act as amended by the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act as amended by the Solid and Hazardous Waste amendments of 1984, the Occupational Safety and Health Act, the Emergency Planning and Community Right-to-Know Act of 1986, the Hazardous Materials Transportation Act, the Solid Waste Disposal Act, all as amended, and any local, state or federal laws, statutes, ordinances, rules or regulations addressing similar matters, and any local, state or federal law, statute, ordinance, rule or regulation providing for financial responsibility for cleanup or other actions with respect to the release or threatened release of hazardous substances and any local, state or federal nuisance law, statute, ordinance, rule or regulation.

“Escrow Agent” shall mean RBC Capital Advisors, Inc., as Escrow Agent under the Escrow and Servicing Agreement, and its successors and assigns.

“Escrow and Servicing Agreement” shall mean that certain Escrow and Servicing Agreement dated as of the date hereof among the Company, the Mortgagee and the Escrow Agent.

“Escrow Shortfall” is defined in the Escrow and Servicing Agreement.

“Event of Default” shall mean any events specified in Section 5.1 hereof including all notice, cure and grace periods.

“Event of Loss” with respect to the Mortgaged Property shall mean any casualty or condemnation described in the Lease.

“Excepted Rights” shall mean the Company’s right prior to the occurrence of a Default or an Event of Default, but not to Mortgagee’s exclusion (1) to receive from the Tenant certificates and other documents and information that the Tenant is required to give or furnish to the Company in accordance with the Lease, ( 2) to inspect the Mortgaged Property and all records relating thereto, and ( 3) to demand performance or observance by the Tenant under the Lease of the applicable terms, conditions and agreements of the Lease as allowed by law, equity, or the Lease; provided, however, the Company may not (X) accelerate payment of Rent, or (Y) give any notice, sue or pursue any remedy or take any action under the Lease that might have the effect of (A) terminating the Lease, (B) dispossessing the Tenant, (C) declaring the Lease forfeited or terminated, (D) reducing any of the Tenant's obligations under the Lease, or

 

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(E) adversely affecting the rights of the Company as landlord under the Lease, the value of the Mortgaged Property or the rights or interests of Mortgagee under the Operative Agreements, without in each instance Mortgagee’s prior written consent which Mortgagee may grant or withhold in its sole discretion.

“Existing Guarantors” shall mean the owners of the Company acting as guarantors under the Indemnity and Guaranty Agreement.

“Existing Indemnitors” shall mean the owners of the Company acting as indemnitors under the Hazardous Material Indemnity Agreement.

“Existing Owner” is defined in Section 2.3(h) of this Mortgage.

“Hazardous Material” shall mean any hazardous, toxic or harmful chemical, substance, waste, material, byproduct, pollutant, contaminant, compound or product, including without limitation, asbestos, polychlorinated byphenyls, petroleum products (including crude oil or any fraction thereof), flammable explosives, radioactive materials, mold, mildew, infectious substances or raw materials which include hazardous constituents and any other substance or material the exposure, use, disposal or handling of which is regulated by any Environmental Legal Requirement.

“Hazardous Material Indemnity Agreement” shall mean that certain Hazardous Material Indemnity Agreement dated as of August 28, 2009 from the Existing Indemnitors and the Company in favor of the Mortgagee.

“Improvements” means all buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements, improvements and appurtenances now standing, or at any time hereafter constructed or placed, upon the land described on Exhibit A hereto.

“Indebtedness” of any Person shall mean, without duplication (a) all obligations of such Person for borrowed money or which have been incurred in connection with the acquisition of property or assets, (b) rents payable by such Person under all leases (whether or not capitalized on the books of such Person in accordance with generally accepted accounting principles) having a fixed term of one year or more from the original date or which are renewable or extendible by the lessee for a period or periods aggregating one year or more from the original date, (c) all indebtedness, obligations and liabilities secured by any lien existing on property owned by such Person subject to such lien, whether or not such indebtedness, obligations or liabilities have been assumed, and (d) all guarantees (whether by discount or otherwise), endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, or otherwise acquire, or become liable upon or in respect of, the indebtedness, obligations or liabilities of any Person or other entity whether or not reflected in the balance sheet of such Person.

“Indebtedness Hereby Secured” is defined in Recital C hereto.

 

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“Indemnified Liabilities” is defined in Section 2.24 of this Mortgage.

“Indemnitor” shall mean any Existing Indemnitor or any Successor Indemnitor.

“Indemnity and Guaranty Agreement” shall mean that certain Indemnity and Guaranty Agreement dated as of August 28, 2009 from the Existing Guarantors in favor of the Mortgagee.

“Investment Grade” shall mean a rating of “BBB” or better, as rated by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. or a rating of “Baa” or better, as rated by Moody’s Investor Service, Inc.

“Lease” is defined in Recital B hereto.

“Lease Assignment” shall mean the assignment of the Lease, the Other Leases, the Lease Guaranties and Rents set forth in Granting Clause Second and Section 2.18 of this Mortgage.

“Lease Guarantor” is defined in Section 2.18(a) of this Mortgage.

“Lease Guaranty” is defined in Section 2.18(a) of this Mortgage.

“Loan” is defined in Section 6.12 of this Mortgage.

“Make-Whole Amount” means, with respect to the Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

“Called Principal” means, with respect to the Note, the principal of such Note that is to be prepaid pursuant to Section 2.12 of this Mortgage or has become or is declared to be immediately due and payable pursuant to Section 5.2 of this Mortgage, as the context requires.

“Discounted Value” means, with respect to the Called Principal of the Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Note is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of the Note, 0.50% over the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX-1” on the Bloomberg Financial Markets (or such other display as may replace Page PX-1 on the Bloomberg Financial Markets) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such

 

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Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the duration closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the duration closest to and less than the Remaining Average Life.

“Remaining Average Life” means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of the Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Note, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 2.12 of this Mortgage or Section 5.2 of this Mortgage.

“Settlement Date” means, with respect to the Called Principal of the Note, the date on which such Called Principal is to be prepaid pursuant to Section 2.12 of this Mortgage or has become or is declared to be immediately due and payable pursuant to Section 5.2 of this Mortgage, as the context requires.

“Management Agreement” is defined in Section 2.14(e) of this Mortgage.

“Maturity Date” shall mean August 15, 2031.

“Mortgaged Property” is defined in the Recitals hereto.

“Mortgagee” shall mean Wells Fargo Bank Northwest, N.A. as Trustee under that certain Pass-Through Trust Agreement and Declaration of Trust dated as of August 28, 2009 and its successors and assigns.

 

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“Non-Recourse Person” is defined in Section 6.10 of this Mortgage.

“Note” is defined in Recital A hereto.

“Note Purchase Agreement” is defined in Recital A hereto.

“Operative Agreements” shall mean, collectively, the Note Purchase Agreement, the Lease, this Mortgage, the Hazardous Material Indemnity Agreement, the Indemnity and Guaranty Agreement, the SNDA Agreement, the Escrow and Servicing Agreement, and the Note.

“Organizational Documents” of any entity shall mean (a) in the case of a corporation, the articles or certificate of incorporation (or the equivalent of such items under state law) and the by-laws of such corporation, (b) in the case of a limited liability company, the certificate or articles of existence or formation and the operating agreement of such limited liability company, (c) in the case of a limited partnership, the certificate of formation and limited partnership agreement of such limited partnership and the Organizational Documents of the general partner of such limited partnership, (d) in the case of a trust, the certificate of formation (if applicable) and the trust agreement for such trust, and (e) any equivalent documents, to the foregoing under the State law where such entity was organized or formed.

“Other Leases” is defined in Section 2.18(a) of this Mortgage.

“Permitted Encumbrances” shall mean the liens described in clauses (a) through (i) of Section 2.17 of this Mortgage.

“Person” shall mean an individual, partnership, limited liability company, corporation, trust or unincorporated organization.

“Personal Property” shall mean the personal property described in Granting Clause Fourth of this Mortgage.

“Rents” is defined in Section 2.18(a) of this Mortgage.

“Restoration” is defined in Section 4.1 of this Mortgage.

“Restoration Funds” is defined in Section 4.1 of this Mortgage.

“Secondary Market Transaction” is defined in Section 6.12 of this Mortgage.

“Security” shall have the same meaning as in Section 2(1) of the Securities Act of 1933, as amended.

“SNDA Agreement” shall mean the Subordination, Non-Disturbance and Attornment Agreement among the Mortgagee, the Tenant and the Company.

 

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“Subsidiary” shall mean any Person of which more than 50% (by number of votes) of the Voting Interest is owned and controlled by the Company and/or one or more Persons which are Subsidiaries of the Company.

“Successor Company” is defined in Section 2.3(g) of this Mortgage.

“Successor Indemnitor” is defined in Section 2.3(g) of this Mortgage.

“Successor Owner” is defined in Section 2.3(h) of this Mortgage.

“Taxes” is defined in Section 2.16 of this Mortgage.

“Tenant” shall mean not only Walgreen Eastern Co., Inc., a New York corporation, but also its successors and assigns.

“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in the State of New Jersey, as amended.

“Voting Interest” shall mean Securities or equity ownership interest of any class or classes of a Person, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions).

SECTION 2.

GENERAL COVENANTS AND WARRANTIES .

From and after the Closing Date (as defined in the Note Purchase Agreement) and continuing so long as the Indebtedness Hereby Secured, remains unpaid, the Company covenants that:

Section 2.1.

Office for Notices .  The Company will keep an office at P.O. Box 707, Blakeslee, Pennsylvania 18610 where notices, presentations and/or demands to or upon the Company in respect of said Note or this Mortgage may be given or made, until such time as the Company shall so notify the Mortgagee in writing of any change of location of such office.

Section 2.2.

Maintenance of Existence, Rights .  The Company will at all times preserve and keep in full force and effect its existence and will obtain and maintain in full force and effect all franchises, privileges, rights, licenses and permits and all other consents, approvals and authorizations of any governmental authority necessary for the ownership and efficient operation and maintenance of its business and property which failure to obtain and maintain would materially and adversely affect the properties, business, prospects, profits or condition of the Company.

Section 2.3.

Negative Covenants .  The Company will not:

(a)

engage in any business other than the ownership and development of the Mortgaged Property, the leasing of the Mortgaged Property to the Tenant and the

 

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financing thereof through the issuance of the Note, as expressly contemplated by the Operative Agreements to which the Company is a party;

(b)

be or become liable in respect of any guaranty, except for any guaranties that are part of, or permitted by the Operative Agreements;

(c)

incur any Indebtedness other than (i) Indebtedness Hereby Secured, (ii) Taxes not yet due and payable and items being contested pursuant to Section 2.16(b), (iii) trade payables incurred in the ordinary course of business not exceeding $500.00 paid within sixty (60) days of date incurred, and (iv) obligations under the Lease;

(d)

make, or permit to remain outstanding, any investment, loan or advance to, or own or acquire any stock or Securities of, any Person except that the Company may make any investment, loan or advance required to be made to satisfy its obligations under the Operative Agreements to which the Company is a party;

(e)

pay or declare any dividend, or make any other distribution if, after giving effect thereto, a Default or Event of Default would exist;

(f)

enter into any lease of any of the Mortgaged Property, whether as lessor or as lessee, other than the Lease or any sublease permitted under the Lease;

(g)

sell, transfer, exchange or otherwise dispose of the Mortgaged Property or any part or portion thereof, except as expressly permitted by this Mortgage, provided, however, that in addition to sales and/or transfers permitted by this Mortgage, one time prior to the maturity date of the Note the Company shall have the right to sell the entire Mortgaged Property to another entity (such entity is herein referred to as the “Successor Company” ); provided, further, that in connection with any such transfer sale, the following conditions are met:

(i)

the Successor Company shall be a single purpose entity (the Organizational Documents of which shall contain provisions acceptable to the Mortgagee and similar to those required by the Mortgagee to be added to the Company’s Organizational Documents in connection with the issuance of the Note) and shall obtain all required governmental consents, approvals and authorizations;

(ii)

after giving effect to the sale, the Successor Company shall be in compliance with this Mortgage and no Default or Event of Default shall have occurred which shall then be continuing;

(iii)

the Successor Company shall assume all rights, duties and obligations of the Company under the Operative Agreements arising after the date of such assumption;

 

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(iv)

the Successor Company shall have delivered to the Mortgagee an opinion of its counsel which is satisfactory in form to the Mortgagee covering the due authorization, execution, delivery and enforceability of documents entered into by the Successor Company to comply with the foregoing conditions of this paragraph (g) and covering such other related matters as the Mortgagee or special counsel to the beneficial holder of the Note may reasonably require;

(v)

the Successor Company and the beneficial owner or owners of equity interests in the Successor Company (the “Successor Indemnitors” ) shall have entered into and delivered to the Mortgagee a Hazardous Material Indemnity Agreement and an Indemnity and Guaranty Agreement as applicable, in the same form as such documents delivered to the Mortgagee on the Closing Date and the reputation, creditworthiness and experience of the Successor Indemnitors in real estate management and development shall be reasonably acceptable to the Mortgagee; provided, however, it shall not be unreasonable for the Mortgagee to reject a Successor Indemnitor that has a net worth less than the net worth of the Existing Indemnitor. Upon the execution and delivery of the Indemnity and Guaranty Agreement and the Hazardous Material Indemnity Agreement by the Successor Company and the Successor Indemnitors, as applicable, to the Mortgagee, the Company, the Existing Indemnitors and the Existing Guarantors shall be released from any future liability accruing from and after the effective date thereof;

(vi)

all filings, recordings and title insurance date downs or endorsements which are deemed necessary by the Mortgagee or special counsel to the beneficial holder of the Note shall have been made in appropriate public offices;

(vii)

the Company shall (A) pay to the Mortgagee a fee equal to 1.00% of the then outstanding principal amount of the Note ( provided, however, no such fee shall be due if the Mortgaged Property is sold to family members or trusts for estate planning purposes) and (B) pay all of the reasonable legal fees and expenses of the special counsel representing the beneficial holder of the Note in connection with the sale of the Mortgaged Property to the Successor Company; and

(viii)

the Company shall deliver to the Mortgagee a copy of a waiver executed by the Tenant pursuant to which the Tenant waives any right of first refusal, right of first offer or other purchase option (if any) vested in the Tenant pursuant to the terms of the Lease or otherwise.

Notwithstanding anything to the contrary contained herein or in any other Operative Agreement, the Company shall not be permitted to sell the Mortgaged Property to the Tenant without the prior written consent of the Mortgagee.

 

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If the Mortgaged Property is sold in accordance with the terms of this Section 2.3(g), then upon satisfaction of the conditions set forth therein, the Company shall be released from all liability under this Mortgage and the other Operative Agreements, except for obligations accruing prior to the date of such sale;  

(h)

permit any direct or indirect holder or owner of an equity, ownership, membership, partnership, or voting interest in the Company (an “Existing Owner” ) to sell, transfer, exchange or otherwise dispose of such interest in any transaction or series of transactions that would result in a different Person or entity holding or owning, directly or indirectly, a controlling interest in the Company than held or owned such controlling interest on the Closing Date (each a “Transfer” ) (nothing herein shall be deemed a limitation on the transfer, directly or indirectly, of non-controlling ownership interests in the Company so long as the same Person or entity holding or owning a controlling interest in the Company on the Closing Date continues to hold or own such controlling interest after giving effect to such transfer); provided, however, that one time prior to the maturity date of the Note the holder or holders of a controlling interest in the Company shall have the right to sell such controlling interest to another Person or entity (the “Successor Owner” ); provided that in connection with such sale, the following conditions are met:

(i)

after giving effect to the sale, the Company shall be in compliance with this Mortgage and no Default or Event of Default shall have occurred which shall then be continuing;

(ii)

the Successor Owner shall have assumed the obligations of the Existing Guarantors and Existing Indemnitors under, or entered into agreements in the same form as, the Indemnity and Guaranty Agreement and the Hazardous Material Indemnity Agreement delivered on the Closing Date;

(iii)

the reputation, creditworthiness and experience of such Successor Owner in real estate management and development shall be reasonably acceptable to the Mortgagee; provided, however, it shall not be unreasonable for the Mortgagee to reject a Successor Owner that has a net worth less than the net worth of the Existing Indemnitor; and

(iv)

the Successor Owner shall (A) pay to the Mortgagee a fee equal to 1.00% of the then outstanding principal amount of the Note ( provided, however, no such fee shall be due if the Mortgaged Property is sold to family members or trusts for estate planning purposes) and (B) pay all of the reasonable legal fees and expenses of the special counsel representing the beneficial holder of the Note in connection with the sale of such interest to the Successor Owner.

If a controlling interest in the Company is sold in accordance with the terms of this Section 2.3(h), then upon satisfaction of the conditions set forth therein, the Existing

 

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Owner shall be released from all liability under this Mortgage and the other Operative Agreements, except for obligations accruing prior to the date of such sale;

(i)

a Transfer within the meaning of Section 2.3(h) shall not include (i) transfers of ownership interests in the Company made by devise or descent or by operation of law upon the death of a member of the Company, subject however, to all the following requirements:  (A) written notice of any transfer under this Section 2.3(i) whether by will, trust or other written instrument, operation of law or otherwise, is provided to Mortgagee, together with copies of such documents relating to the transfer as Mortgagee may reasonably request, (B) control over the management and operation of the Mortgaged Property thereafter is assumed by persons who are acceptable in all respects to Mortgagee in its reasonable discretion, (C) no such transfer will release the respective estate from any liability as an Existing Indemnitor, and (D) no such transfer, death or other event has any adverse effect either on the bankruptcy-remote status of the Company or on the status of the Company as a continuing legal entity liable for the payment of the Indebtedness Hereby Secured and the performance of all other obligations secured hereby;

(j)

institute proceedings to be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against it, or file a petition under state law relating to bankruptcy or insolvency, or consent to the appointment of a receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of the Company, or a substantial part of its property, or make any assignment for the benefit of creditors, or, except as required by law, admit in writing its inability to pay its debts generally as they become due, or take any company action in furtherance of any such action;

(k)

amend or modify the Organizational Documents of the Company;

(l)

create, organize or establish any Subsidiary;

(m)

conduct its business in any manner that would likely result in the substantive consolidation of the Company with its member or members in bankruptcy; or

(n)

violate, or permit any holder of an equity interest in the Company to violate, the shopping center use restrictions outlined in Section 8 of the Lease.

Section 2.4.

Mergers and Consolidations .   The Company will not consolidate with or be a party to a merger with any other Person.

Section 2.5.

Financial Information and Reports .   The Company will keep proper books of record and account in which full, true and correct entries will be made of all dealings or transactions of or in relation to the business and affairs of the Company in accordance with the accounting basis used for income tax purposes and will furnish to the Mortgagee:

 

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(a)

As soon as available and in any event within one hundred twenty (120) days after the close of each fiscal year of the Company, copies of:

(i)

a balance sheet of the Company as of the close of such fiscal year, and

(ii)

a statement of operating income, retained earnings and cash flows of the Company for such fiscal year,

in each case setting forth in comparative form the figures for the preceding fiscal year, all in reasonable detail and accompanied by a certificate of an officer of the Company to the effect that such financial statements have been prepared in accordance with the accounting basis used for tax purposes, are complete and correct and present fairly, in all material respects, the financial condition of the Company; provided, that if the financial statements required by this paragraph (a) shall be prepared by a firm of independent public accountants, then in lieu of a statement certified by an officer of the Company, copies of such statements shall be furnished to the Mortgagee at the times required by the preceding provisions of this paragraph (a);

(b)

Within the periods provided in paragraph (a) above, the written statement of the Company, signed by an authorized officer of the Company, stating whether, to the best of his knowledge, there existed as of the date of such financial statements and on the date of the certificate any Default or Event of Default under this Mortgage, and specifying the nature and period of existence thereof and the action the Company is taking and proposes to take with respect thereto; and

(c)

Such additional information as the Mortgagee may reasonably request concerning the Company.

The Company will permit the Mortgagee (or such Persons as the Mortgagee may designate) to visit and inspect the Mortgaged Property under the Company’s guidance, to examine all of its books of account, records, reports and other papers, to make copies and extracts therefrom and to discuss its affairs, finances and accounts with its officers, agents and representatives, all at such reasonable times and as often as any such holder may reasonably desire, in each case subject to the terms and conditions set forth in the Lease, provided, that at any time when an Event of Default shall have occurred and be then continuing, such visit and inspection shall be at the expense of the Company.

Section 2.6.

Notice of Default .  The Company will, immediately upon an officer or member of the Company acquiring actual knowledge of a Default or Event or Default, furnish a written notice to the Mortgagee specifying the nature and period of existence of such condition or event and what action the Company is taking or proposes to take with respect thereto.

Section 2.7.

Mortgage Title Insurance Policy .   The Company will, within sixty (60) days following the Closing Date, at its own cost and expense, procure and deliver to the

 

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Mortgagee or its counsel an ALTA Policy issued by a title insurance company acceptable to the Mortgagee which policy shall conform to the commitment or pro forma, as applicable, for title insurance issued to the Beneficiary in the form attached as an exhibit to the Escrow Instruction Letter delivered at Closing which policy shall be not less than the principal amount of the Note issued and delivered on the Closing Date covering the Mortgaged Property showing marketable fee title to the Mortgaged Property to be in the Company, subject only to Permitted Encumbrances, which policy shall also insure the Mortgagee against all loss or damage sustained by reason of this Mortgage not being a first and paramount lien at the date of such policy upon title to the Mortgaged Property and which policy shall show recordation of this Mortgage and the SNDA Agreement, shall be dated the Closing Date and shall otherwise be in form and substance satisfactory to the Mortgagee.

Section 2.8.

Payment of Certain Taxes .  The Company covenants and agrees to pay all taxes, assessments and governmental charges or levies imposed upon this Mortgage or the Note or any other Indebtedness Hereby Secured.

Section 2.9.

Ownership of Mortgaged Property .  The Company covenants and warrants that it has good and marketable title to the Mortgaged Property hereinbefore conveyed to the Mortgagee free and clear of all liens, charges and encumbrances whatever except Permitted Encumbrances, and the Company has full right, power and authority to grant, warrant, mortgage, pledge, assign, sell, demise, bargain, hypothecate, convey, grant a security interest in, transfer and set over the same to the Mortgagee for the uses and purposes in this Mortgage set forth; and the Company will warrant and defend the title to the Mortgaged Property against all claims and demands whatsoever.  Without limiting the foregoing, the Company represents and warrants that the restrictions, exceptions, reservations, limitations, interests and other matters, if any, set forth immediately following the specific descriptions of the parcels of land in Exhibit A attached hereto, together with all other restrictions, exceptions, reservations, limitations, interests and other matters, if any, existing on the date of execution and delivery of this Mortgage, do not in the aggregate impair the value of the Mortgaged Property or adversely affect the utility, structural integrity or beneficial enjoyment of the Mortgaged Property for the uses to which the Mortgaged Property is being put.

Section 2.10.

Further Assurances .  The Company will, at its own expense, do, execute, acknowledge and deliver all and every further act, deed, conveyance, transfer and assurance necessary or proper for the better assuring, conveying, assigning and confirming unto the Mortgagee all of the Mortgaged Property, or property intended so to be, whether now owned or hereafter acquired.

Section 2.11.

Payment of Principal and Interest .  The Company will duly and punctually pay the principal of, and premium of, if any, and interest on the Note secured hereby according to the terms thereof.

Section 2.12.

Prepayment of Note .   No prepayment of the Note may be made except to the extent and in the manner expressly permitted by this Section 2.12.

 

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(a)

Required Prepayment without Make-Whole Amount in the Event of Casualty or Condemnation .  In the event of a casualty or condemnation of all or a portion of the Mortgaged Property which results in a termination of the Lease, the Company shall prepay the Note in whole, but not in part, by payment of the principal amount of the Note then outstanding, together with accrued interest thereon to the date of such prepayment, which prepayment shall be made taking into account the proceeds paid under any insurance policies carried pursuant to this Mortgage, but without any Make-Whole Amount.

(b)

Optional Prepayment with Make-Whole Amount.   The Company shall have the privilege, at any time and from time to time, of prepaying the outstanding Note,