Exhibit 10.16
Table of Contents
|
|
Page
|
|
|
|
|
1.
|
Definition of
Terms.
|
4
|
|
|
1.1.
|
Certain
Definitions
|
4
|
|
|
1.2.
|
Other
Capitalized Terms, Certain Usages and Gender
|
8
|
|
2.
|
Warranties,
Covenants and Representations of the Mortgagor
|
8
|
|
|
2.1.
|
Payment and
Performance of the Secured Obligations
|
8
|
|
|
2.2.
|
Title to the
Mortgaged Property
|
8
|
|
|
2.3.
|
Maintenance,
Operation, Inspection and Use of the Mortgaged Property
|
8
|
|
|
2.4.
|
Insurance;
Repair and Restoration.
|
9
|
|
|
2.5.
|
Condemnation
|
10
|
|
|
2.6.
|
Application of
Proceeds of Casualty.
|
10
|
|
|
2.7.
|
Impositions
|
12
|
|
|
2.8.
|
Payment of
Liens
|
12
|
|
|
2.9.
|
Defending the
Lien of this Mortgage
|
12
|
|
|
2.10.
|
Reimbursement
of Advances and Expenses
|
12
|
|
|
2.11.
|
Interest on
Advances and Expenses
|
13
|
|
|
2.12.
|
Indemnification.
|
13
|
|
|
2.13.
|
Prohibition
Against Conveyances and Encumbrances
|
14
|
|
|
2.14.
|
Estoppel
Certificates
|
14
|
|
|
2.15.
|
Assignment of
Leases and Property Income
|
14
|
|
|
2.16.
|
Additional
Representations, Warranties, and Covenants Respecting Compliance
with Laws.
|
15
|
|
3.
|
Security
Agreement.
|
16
|
|
|
3.1.
|
Additional
Covenants and Representations of the Mortgagor
|
16
|
|
|
3.2.
|
Mortgage as
Security Agreement and Financing Statement
|
17
|
|
4.
|
Default and
Remedies.
|
17
|
|
|
4.1.
|
Events of
Default
|
17
|
|
|
4.2.
|
Remedies
|
17
|
|
|
4.3.
|
General
Provisions Regarding Remedies.
|
19
|
|
5.
|
No
Usury
|
22
|
|
6.
|
Miscellaneous.
|
22
|
|
|
6.1.
|
Notices.
|
22
|
|
|
6.2.
|
Binding
Obligations; Successors and Assigns
|
23
|
|
|
6.3.
|
Headings;
Integration
|
23
|
|
|
6.4.
|
Further
Assurances
|
23
|
|
|
6.5.
|
Severability
|
24
|
|
|
6.6.
|
The Mortgagor's
Obligations Absolute
|
24
|
|
|
6.7.
|
Other Loan
Documents and Schedules
|
24
|
|
|
6.8.
|
Governing Law;
Jurisdiction
|
25
|
|
|
6.9.
|
Merger
|
25
|
CYALUME TECHNOLOGIES, INC.
MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS,
AND SECURITY
AGREEMENT
96 Windsor Street
West Springfield,
MA
After recording, please return to:
James R. Kane,
Esq.
Choate, Hall
& Stewart LLP
Two
International Place
Boston,
Massachusetts 02110
MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS,
AND SECURITY
AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
AND SECURITY AGREEMENT (as amended, modified or supplemented from
time to time, this "Mortgage") is executed and delivered this 19th
day of December, 2008, by CYALUME TECHNOLOGIES, INC., a Delaware
corporation (the “Mortgagor”) having a principal place
of business at 96 Windsor Street, West Springfield, MA, for
the benefit of TD BANK, N.A., a national banking association, as
agent for the Lenders, (the “Mortgagee”), having an
office at 370 Main Street, Worcester, MA 01608.
GRANTING CLAUSES
FOR GOOD AND VALUABLE CONSIDERATION, the receipt
and sufficiency of which are hereby acknowledged, and to secure the
payment and performance of the Secured Obligations (as hereinafter
defined), the Mortgagor hereby MORTGAGES, GRANTS, ASSIGNS AND
WARRANTS unto the Mortgagee and to the Mortgagee’s successors
and assigns, for the pro rata benefit of the Lenders, with MORTGAGE
COVENANTS, the following property:
The parcel or parcels of land described in
Exhibit A attached hereto and by this reference made a part hereof
(sometimes hereinafter collectively referred to as the
"Land");
TOGETHER with all buildings, structures and
improvements (including all fixtures) now or hereafter located on
or in the Land (sometimes hereinafter collectively referred to as
the "Improvements");
TOGETHER with all right, title and interest of
the Mortgagor in and to the streets and roads, opened or proposed,
abutting the Land, all strips and gores within or adjoining the
Land, the air space and right to use the air space above the Land,
all rights of ingress and egress to and from the Land, all
easements, rights of way, reversions, remainders, hereditaments,
and appurtenances now or hereafter affecting the Land or the
Improvements, all royalties, rights and privileges appertaining to
the use and enjoyment of the Land or the Improvements, including
all air, lateral support, alley, drainage, water, oil, gas and
mineral rights, all options to purchase or lease, and all other
interests, estates or claims, in law or in equity, which the
Mortgagor now has or hereafter may acquire in or with respect to
the Land or the Improvements (sometimes hereinafter collectively
referred to as the "Appurtenances");
The Land, the Improvements, and the
Appurtenances are sometimes hereinafter collectively referred to as
the "Premises";
TOGETHER with (a) all of the
intangible personal property of the Mortgagor described in clauses
(ii) through (v) below (but none of its obligations with respect
thereto), whether now owned or existing or hereafter acquired or
arising, now or hereafter relating to the ownership, maintenance,
operation and enjoyment of the Premises for any lawful purpose,
together with any and all substitutions, replacements, proceeds and
products thereof, and (b) all of the tangible personal property and
fixtures of the Mortgagor (but none of its obligations with respect
thereto), whether now owned or existing or hereafter acquired or
arising, now or hereafter located or placed on or in the Premises
or relating to the ownership, maintenance, operation and enjoyment
of the Premises for any lawful purpose, including the tangible
personal property and fixtures described in clauses (i) through (v)
below, together with any and all additions, accessions and
attachments thereto and substitutions, replacements, proceeds and
products thereof (all of the foregoing intangible and tangible
personal property and fixtures sometimes hereinafter collectively
referred to as the "Related Personalty"):
(i)
all equipment, machinery, fixtures, furniture,
furnishings, computers and related equipment, office equipment and
supplies, tools, jigs, dies, manufacturing implements, forklifts,
trucks, trailers, railcars, barges and other vehicles, all
personalty relating to the ownership, maintenance, operation and
enjoyment of the Premises for any lawful purpose, (the foregoing
items in this clause (i) being sometimes hereinafter collectively
referred to as the "Equipment");
(ii) all
permits, licenses, variances, approvals and franchises relating to
or arising out of the operation of the Mortgaged Property (as
hereinafter defined), all contract rights of the Mortgagor under
leases of Equipment located on or used in connection with the
Mortgaged Property, and all books, records, plans, specifications,
good will, actions and causes of action relating to or arising out
of the operation of the Mortgaged Property (the foregoing items in
this clause (ii) being sometimes hereinafter collectively referred
to as the "Intangibles");
(iii)
all right, title and interest of the Mortgagor in and under
all leases, subleases, occupancy agreements, lettings, tenancies
and licenses, if any, of the Premises or any part thereof now or
hereafter entered into and all amendments, extensions and renewals
thereof, all security therefor, and all moneys payable thereunder
(the foregoing items in this clause (iii) being sometimes
hereinafter collectively referred to as the "Leases");
(iv)
all rents, income, issues, profits, deposits,
security deposits, escrows, reserves and other moneys and benefits
to which the Mortgagor may now or hereafter be entitled from all or
any part of the Premises and/or the Related Personalty (the
foregoing items in this clause (iv) being sometimes hereinafter
collectively referred to as the "Property Income"); and
(v)
all proceeds, judgments, claims, compensation, awards of
damages and settlements with respect to or hereafter made as a
result of or in lieu of any Taking (as hereinafter defined) of the
Premises and/or the Related Personalty, all proceeds of insurance
(including rental interruption insurance) maintained with respect
to any component of the Mortgaged Property, any casualty loss of or
damage to the Premises and/or the Related Personalty, all refunds
with respect to the payment of Impositions (as hereinafter
defined), and all other proceeds of the conversion, voluntary or
involuntary, of the Mortgaged Property (as hereinafter defined) or
any part thereof into cash or liquidated claims (the foregoing
items in this clause (v) being sometimes hereinafter collectively
referred to as the "Proceeds").The Premises and the Related
Personalty are sometimes hereinafter collectively referred to as
the "Mortgaged Property."
TO HAVE AND TO HOLD the Mortgaged Property, with
all the privileges and appurtenances to the same belonging, and
with the possession and right of possession thereof, unto the
Mortgagee and to the Mortgagee’s successors and assigns
forever, for the pro rata benefit of the Lenders, upon the terms
and conditions, herein set forth.
In furtherance of the intent that a security
interest be granted under and evidenced by this Mortgage, the
Mortgagor also hereby grants to the Mortgagee, for the pro rata
benefit of the Lenders, a Lien on the Related
Personalty. The security interest granted hereby is in
addition to and not in lieu of any other security interest or
security agreement in favor of the Mortgagee.
1.1. Certain
Definitions . As used in this Mortgage, the terms
set forth below shall have the following meanings:
" Appurtenances " shall have the meaning
specified in the Granting Clauses.
" Bankruptcy Proceeding " shall mean any
proceeding, action, petition or filing under the Federal Bankruptcy
Code or any similar state or Federal law now or hereafter in effect
relating to bankruptcy, reorganization or insolvency, or the
arrangement or adjustment of debts.
" Default " shall mean any condition or
event which constitutes or, after notice or lapse of time or both,
would constitute an Event of Default.
“ Environmental Laws ” shall
mean any and all applicable federal, state or municipal laws,
ordinances, rules and regulations now in force or subsequently
enacted, modified, or amended pertaining to the protection of the
environment or to health or safety risks arising therefrom,
including, but not limited to, control of air pollution, water
pollution, groundwater pollution, and the generation, manufacture,
management, handling, use, sale, transportation, delivery,
discharge, release, emission, treatment, storage, disposal or
release or threatened release of Hazardous Materials. To
the extent applicable, such laws include, but are not limited to:
(a) the Clean Air Act, 42 U.S.C. § 7401, et seq; (b) the Clean
Water Act, 33 U.S.C. § 1251, et seq; (c) the Safe Drinking
Water Act, 42 U.S.C. § 300f, et seq; (d) the Resource
Conservation and Recovery Act (“RCRA”), 42 U.S.C.
§ 6901, et seq; (e) the Comprehensive Environmental Response,
Compensation and Liability Act (“CERCLA”), 42 U.S.C.
§ 9601, et seq; (f) the Toxic Substances Control Act
(“TSCA”), 15 U.S.C. § 2601, et seq; (g) Title III
of the Superfund Amendments and Reauthorization Act
(“SARA”), also known as the Emergency Planning and
Community Right-to-Know Act (“EPCRA”), 42 U.S.C. §
11001; (h) the Hazardous Materials Transportation Act, 49 U.S.C.
§ 1801 et seq; (i) federal regulations promulgated pursuant to
any of the foregoing statutes; (j) Massachusetts laws and
regulations enacted in order to implement federal environmental
statutes and regulations; (k) the Massachusetts Hazardous Waste
Management Act, M.G.L. c. 21C; (l) the Massachusetts Oil and
Hazardous Materials Release Prevention and Response Act, M.G.L. c.
21E; (m) the Hazardous Substances Disclosure by Employers Act,
M.G.L. c. 111F; (n) Massachusetts regulations promulgated pursuant
to the authority of applicable state environmental laws; and (o)
local ordinances and regulations including those adopted by local
emergency planning districts pursuant to Title III of SARA and
implementing state legislation.
" Equipment " shall have the meaning
specified in the Granting Clauses.
" Event of Defaul t" shall have the
meaning specified in section 4.1.
" Expenses " shall mean any and all costs
and expenses of every kind and nature incidental to the collection
of the Secured Obligations, including all costs and expenses
relating to any foreclosure, enforcement, compromise or settlement
of this Mortgage, any of the other Loan Documents, any protection
of the Mortgaged Property and the maintenance and execution of this
Mortgage or any of the other Loan Documents and the protection of
the Lien of this Mortgage and/or the Lien and security interest of
any of the other Loan Documents (including any and all costs and
expenses incurred by the Mortgagee in any legal, equitable,
bankruptcy or administrative proceedings pertaining to the
Mortgaged Property, any of the other Collateral, or the Secured
Obligations) and any exercise of any right or remedy hereunder or
thereunder or in equity or under applicable law and any defense or
assertion of the rights or claims of the Mortgagee in respect
hereof and thereof, by litigation or otherwise, including
reasonable attorneys' fees and the fees and expenses of receivers,
trustees, liquidators or similar officials, appraisers, engineers,
surveyors, management companies, consultants, environmental
engineers and title examiners.
“ Governmental Authority ”
shall mean all agencies, authorities, bodies, boards, commissions,
courts, instrumentalities, legislatures and offices of any nature
whatsoever of any government unit or political subdivision, whether
federal, state, county, district, municipal, city, or otherwise,
and whether now or hereafter in existence.
“ Granting Clauses ” shall
mean the provisions contained under the heading “Granting
Clauses” and before the beginning of Section 1
hereof.
“ Hazardous Materials ” shall
mean products, wastes and substances which, because of their
quantitative concentration, chemical, radioactive, infectious or
other characteristics, constitute or may reasonably be expected to
constitute or contribute to a danger or hazard to public health,
safety, welfare, or to the environment, including asbestos (whether
or not friable), flammable materials, explosives, radioactive
substances, polychlorinated biphenyls, other carcinogens, oil and
other petroleum products, pollutants, solvents and chlorinated
oils, pesticides, herbicides, radon gas, reactive metals and
compounds, contaminants, and any other hazardous or toxic
materials, chemical, biological, radioactive, or other wastes and
substances which are defined, determined or identified as such in
or pursuant to any Environmental Laws.
" Impositions " shall mean all taxes of
every kind and nature (other than income, franchise and doing
business taxes of the Mortgagee), sewer rents, garbage removal
fees, charges for water, for setting or repairing meters and for
all other utilities serving the Mortgaged Property or any part
thereof, assessments, levies, inspection and license fees and all
other governmental charges or levies imposed upon or assessed
against the Mortgaged Property or any part thereof (including the
Property Income) and the use, maintenance and operation thereof,
the Secured Obligations and the Loan Documents, recording and
filing fees, and registration fees, excises and levies imposed upon
the Mortgagee by reason of its respective interests in the Secured
Obligations or this Mortgage, all revenue, documentary stamp and
similar taxes, mortgage taxes and other taxes which might be
required to be paid on the Secured Obligations or this Mortgage,
and all other charges which if unpaid might by law become a Lien or
charge upon the Mortgaged Property or any part thereof (regardless
of to whom assessed) or on any other property of the Mortgagor,
including interest and penalties on all of the
foregoing.
" Improvements " shall have the meaning
specified in the Granting Clauses.
" Indemnified Costs " shall have the
meaning specified in section 2.12.
" Indemnitee " shall have the meaning
specified in section 2.12.
“ Insurance Policies ” shall
have the meaning specified in section 2.4.
" Intangibles " shall have the meaning
specified in the Granting Clauses.
" Land " shall have the meaning specified
in the Granting Clauses.
" Leases " shall have the meaning
specified in the Granting Clauses.
“ Legal Requirements ” shall
mean all statutes, ordinances, by-laws, codes, rules, rulings,
regulations, restrictions, orders, judgments, decrees, writs,
judicial or administrative interpretations and injunctions,
including without limitation, all applicable building, health code,
zoning, subdivision and other land use licensing statutes,
ordinances, by-laws, codes, rules and regulations, whether now or
hereafter enacted, promulgated or issued by any Governmental
Authority, affecting the Mortgagor or the Mortgaged Property or the
ownership, construction, development, maintenance, management,
repair, use, occupancy, possession or operation thereof, including,
without limitation, any of the foregoing which may (a) require
repairs, modifications or alterations in or to the Mortgaged
Property, (b) in any way affect (adversely or otherwise) the use
and enjoyment of the Mortgaged Property or (c) require the
assessment, monitoring, cleanup, containment or removal of any
Hazardous Substances on, under or from the Mortgaged
Property. Without limiting the foregoing, the term Legal
Requirements shall also include all Permitted Encumbrances and all
permits and contracts issued by or entered into with any
Governmental Authority.
" Lien " shall mean any mortgage, pledge,
hypothecation, assignment, deposit arrangement, Lien (statutory or
otherwise), preference, priority, security interest, chattel
mortgage or other charge or encumbrance of any kind, or any other
type of preferential arrangement, including the Lien or retained
security title of a conditional vendor and any easement, right of
way or other encumbrance on title to real property and any lease
having substantially the same effect as any of the
foregoing.
" Loan Agreement " shall mean that
certain Revolving Credit and Term Loan Agreement by and among
Cyalume Technologies Holdings, Inc., the Mortgagor, the Subsidiary
Guarantors from time to time party thereto, the Mortgagee and the
Lenders from time to time party thereto, dated the date
hereof.
" Loan Documents " shall have the meaning
specified in the Loan Agreement.
" Mortgage " shall have the meaning
specified at the beginning of this instrument.
" Mortgagee " shall mean the meaning
specified at the beginning of this instrument.
" Mortgaged Property " shall have the
meaning specified in the Granting Clauses.
" Mortgagor " shall mean Cyalume
Technologies, Inc., a Delaware corporation, each subsequent owner
of the Mortgaged Property (or any portion thereof), and its
successors and assigns.
“ Officers’ Certificate
” shall have the meaning specified in the Notes.
" Permitted Encumbrances " shall mean the
Liens on, and other exceptions to title to and matters affecting,
the Mortgaged Property set forth on Exhibit B hereto.
" Person " shall have the meaning
specified in the Notes.
" Premises " shall have the meaning
specified in the Granting Clauses.
" Proceeds " shall have the meaning
specified in the Granting Clauses.
" Property Income " shall have the
meaning specified in the Granting Clauses.
" Related Personalty " shall have the
meaning specified in the Granting Clauses.
“ Restoration ” shall have
the meaning specified in section 2.6.
" Secured Obligations " shall
mean:
(a) principal of and
premium, if any, and interest on and fees (including, without
limitation, the Origination Fee, the Commitment Fee, the Term
Loan A Commitment Fee, and all other fees from time to time
due from Mortgagor pursuant to the Loan Agreement) and other
amounts payable with respect to the Term A Note, the Term B Note,
or the Revolving Credit Note (or any of them), all Derivative
Contracts and any guarantees thereof; and
(b) any and all other
indebtedness and obligations of the Mortgagor and/or any of its
Subsidiaries under the Loan Agreement or under any other agreement,
document or instrument relating thereto, including, without
limitation, all Derivative Contracts, all as amended, modified or
supplemented from time to time, related in any way to the Term A
Note, the Term B Note or the Revolving Credit Note (or any of them)
or Derivative Contracts.
" Spill " shall mean a discharge,
spillage, uncontrolled loss, seepage, contamination or filtration
of Hazardous Materials.
" State " shall mean The Commonwealth of
Massachusetts.
" Taking " shall have the meaning
specified in section 2.5.
" Uniform Commercial Code " shall mean
the Uniform Commercial Code of the State, as the same may be
amended, modified or supplemented from time to time.
1.2.
Other Capitalized Terms, Certain Usages and Gender
. Other capitalized terms used herein without definition
shall have the meanings ascribed to them in the Loan
Agreement. The terms "include" and "including" shall be
construed as if followed by the phrase "without
limitation." All terms contained herein shall be
construed, whenever the context of this Mortgage so requires, so
that the singular number shall include the plural, and the plural
the singular, and the use of any gender shall include all
genders.
2.
Warranties, Covenants and Representations of the Mortgagor
. In addition to the warranties and representations and
covenants and agreements contained in the Loan Documents, the
Mortgagor hereby warrants and represents to and covenants and
agrees with the Mortgagee as follows:
2.1.
Payment and Performance of the Secured Obligations
. The Mortgagor shall punctually pay and perform the
Secured Obligations at the times and in the manner provided in the
Loan Documents, all payments to be made in lawful money of the
United States of America.
2.2.
Title to the Mortgaged Property . The Mortgagor
(a) is the sole and exclusive owner of the Mortgaged Property and
has good and marketable fee simple absolute title to the Premises
and good and indefeasible title to the balance of the Mortgaged
Property, free from any Liens (including any restrictions on
transfer thereof), Leases and other encumbrances, other than (i)
the Liens arising hereunder and (ii) Permitted Encumbrances; and
(b) will forever warrant and defend the Mortgaged Property, and the
validity and first priority of the Lien created or intended to be
created hereby, against all claims and demands of all Persons at
any time claiming the same or any interest therein.
2.3.
Maintenance, Operation, Inspection and Use of the Mortgaged
Property . The Mortgagor shall maintain the
Mortgaged Property in present condition and from time to time make
all needful and proper repairs, renewals and
replacements. The Mortgagor shall comply with all Legal
Requirements applicable to the Mortgaged Property (including all
Environmental Laws) and all covenants, conditions and restrictions
applicable to the Mortgaged Property (including Permitted
Encumbrances), and shall permit the Mortgagee to enter upon and
inspect the Mortgaged Property upon request from time to
time. The Mortgagor shall not (a) change the use of the
Mortgaged Property or cause or permit the use or occupancy of any
part of the Mortgaged Property to be discontinued if such changed
use or discontinuance would violate any permit, approval, Permitted
Encumbrance or zoning, land use or other law, ordinance or
regulation, (b) consent to any zoning reclassification,
modification or restriction adversely affecting the Premises or (c)
threaten, commit or permit any waste, structural or material
alteration, demolition or removal of the Mortgaged Property or any
part thereof.
2.4.
Insurance; Repair and Restoration .
(a) The
Mortgagor shall keep or cause to be kept the Mortgaged Property
insured against damage by fire and the other hazards covered by an
all-risk coverage insurance policy for the full insurable value
thereof (which shall mean the full repair and replacement value
thereof) without reduction for depreciation or co-insurance and in
no event less that $2,500,000, subject to any limitation of
applicable law. The Mortgagor shall also maintain or
cause to be maintained public liability insurance with respect to
the Mortgaged Property provided for limits of liability in amounts
satisfactory to the Mortgagee for both injury to and death of
Persons or individuals and for property damage. The
Mortgagee may require the Mortgagor to obtain such other insurance,
including business interruption, flood, earthquake, war risk,
nuclear explosion, demolition and contingent liability from the
operation of “nonconforming” improvements of the
Mortgaged Property, all within 10 days after demand by the
Mortgagee, and the Mortgagor shall maintain or cause to be
maintained such other coverages, in such amounts, as may from time
to time be required under the Loan Agreement. The
Mortgagor shall not maintain any separate or additional insurance,
unless it is properly endorsed and otherwise reasonably
satisfactory to the Mortgagee in all respects. The
proceeds of insurance paid on account of any damage or destruction
to the Mortgaged Property or any part thereof shall be paid over to
the Mortgagee to be applied as hereinafter provided.
(b) All
insurance policies (collectively, the “Insurance
Policies”) required pursuant to this Mortgage shall be
endorsed to name the Mortgagee as an additional insured and loss
payee, as the case may be, thereunder, as its interests may appear,
without contribution, under a long-form, non-contributory mortgagee
clause, or otherwise endorsed as the Mortgagee may reasonably
require. All such insurance policies and endorsements
shall be fully paid for and contain such provisions and expiration
dates and be in such form and issued by such insurance companies
licensed to do business in the State, with the highest or second
highest rating available from A.M. Best Company or an equivalent
Person, as shall be approved by the Mortgagee or otherwise
comparable to the insurance in place at the time this Mortgage is
recorded. Without limiting the foregoing, each policy
shall provide that such policy may not be cancelled or materially
changed except upon 30 days prior written notice to the Mortgagee
of intention of non-renewal, cancellation or material change, and
that no act or thing done by the Mortgagor or the Mortgagee shall
invalidate the policy as against the Mortgagee. The
Mortgagor shall deliver or cause to be delivered all original
policies, or copies thereof certified by the insurance company or
authorized agent as being true copies, to the Mortgagee (together
with the endorsements thereto required hereunder) upon request by
the Mortgagee. If the Mortgagor fails to maintain
insurance as required by this Mortgage, the Mortgagee may, but
shall not be obligated to, maintain such insurance.
(c) In
the event of any damage or destruction to the Mortgaged Property,
promptly following Mortgagor gaining knowledge of the same the
Mortgagor shall give written notice to the Mortgagee. In
case of loss or damage covered by any of the Insurance Policies,
the Mortgagee (or, after entry of decree of foreclosure, the
purchaser at the foreclosure sale or decree creditor, as the case
may be) is hereby authorized at its option either (i) to settle and
adjust any claim under such Insurance Policies without the consent
of the Mortgagor, or (ii) to allow the Mortgagor to settle and
adjust such claim; provided that in either case the Mortgagee
shall, and is hereby authorized to, collect and receipt for any
such insurance proceeds; and the expenses incurred by the Mortgagee
in the adjustment and collection of insurance proceeds shall be
deemed Secured Obligations, and shall be reimbursed to the
Mortgagee upon demand or may be deducted by the Mortgagee from said
insurance proceeds prior to any other application
thereof. Each insurance company which has issued an
Insurance Policy is hereby authorized and directed to make payment
for all losses covered by an Insurance Policy to the Mortgagee
alone, and not to the Mortgagee and the Mortgagor
jointly. Notwithstanding the foregoing, so long as no
Default or Event of Default has occurred and is continuing the
Mortgagor may adjust and settle any claim under such Insurance
Policies without the consent of the Mortgagee so long as the cost
of Restoration with respect to such claims does not exceed Two
Hundred Fifty Thousand Dollars ($250,000).
(d) In
the event of foreclosure of this Mortgage or other transfer of
title to or assignment of the Mortgaged Property toward
extinguishment, in whole or in part, of the Secured Obligations,
all right, title and interest of the Mortgagor in and to all
policies of insurance required by this Mortgage and any proceeds
thereof shall inure to the benefit of and pass to the Mortgagee or
any purchaser or transferee of the Mortgaged Property, as the case
may be.
(e) The
Mortgagor hereby irrevocably appoints the Mortgagee as the
Mortgagor’s attorney-in-fact, coupled with an interest, to be
used during the continuance of an Event of Default to endorse any
checks, drafts or other instruments representing any insurance
proceeds, whether payable by reason of loss thereunder or
otherwise.
2.5.
Condemnation . The Mortgagor, immediately upon
obtaining knowledge of the institution of any proceedings for the
condemnation, taking or purchase in lieu thereof, of the Mortgaged
Property or any part thereof (each, a "Taking"), shall notify the
Mortgagee of the pendency of such proceedings. The
Mortgagee may participate in such proceedings, and the Mortgagor
from time to time shall deliver to the Mortgagee all instruments
requested by it to permit such participation. The
Mortgagee is hereby irrevocably appointed as the Mortgagor's
attorney-in-fact, coupled with an interest, with power to collect
and receive, the proceeds of any Taking, and, to make any
compromise or settlement in connection with such
proceedings. In any event, the Mortgagor shall not
adjust, compromise or settle such proceedings and shall not enter
into any agreement with respect to such matters without the prior
written consent of the Mortgagee (which consent shall not be
unreasonably withheld, delayed or conditioned). The
Mortgagor, upon written request by the Mortgagee, shall execute and
deliver any and all instruments from time to time reasonably
requested for the purposes of confirming the foregoing assignment
to the Mortgagee. The proceeds of any Taking shall be
applied to or toward the Secured Obligations.
2.6.
Application of Proceeds of Casualty .
(a)
The Mortgagee shall permit the
application of the proceeds of Insurance Policies consequent upon
any casualty to the cost of restoring, repairing, replacing or
rebuilding the loss or damage caused by such casualty (collectively
“Restoration”) if and so long as the following
conditions are met:
(i)
the
Restoration is accomplished in accordance with the terms of Section
2.6(c) provided that if the cost of the Restoration does not exceed
Two Hundred Fifty Thousand Dollars ($250,000) then the proceeds
shall be paid directly to the Mortgagor who will promptly and in a
good and workmanlike manner complete the Restoration;
(ii) the
cost of the Restoration (as estimated by the Mortgagee) does not
exceed more than fifty percent (50%) of the outstanding aggregate
principal balance of the Secured Obligations at the time of the
casualty;
(iii) there
is no Default or event which, with the giving of notice or passage
of time, or both, would constitute a Default; and
(iv)
the Restoration can be completed within one year after the casualty
and at least six (6) months prior to maturity of the
Note. If the conditions set forth in clauses (1) through
(4) of this section 2.6(a) are not satisfied, the Mortgagee may, in
its sole discretion, elect to apply all or any part of the proceeds
of Insurance Policies consequent upon such casualty to or toward
the Secured Obligations.