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TD BANK MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT

Lease Assignment Agreement

TD BANK MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT | Document Parties: CYALUME TECHNOLOGIES, INC | TD BANK, NA You are currently viewing:
This Lease Assignment Agreement involves

CYALUME TECHNOLOGIES, INC | TD BANK, NA

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Title: TD BANK MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
Governing Law: Massachusetts     Date: 3/30/2009
Law Firm: Choate Hall;Loeb Loeb    

TD BANK MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT, Parties: cyalume technologies  inc , td bank  na
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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

 

i


 


 


 

 

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"):

 

2


 

(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.

 

3


 

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.       Definition of Terms .

 

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.

 

4


 

" 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.

 

5


 

" 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.

 

6


 

" 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.

 

7


 

" 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.  

 

8


 

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).

 

9


 

(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;

 

10


 

(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.

 

(b)          Whether or n


 
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