exv10w33w4






Exhibit 10.33.4




Prepared by and Upon

Recordation Return to:




	 	 	 	 	 

	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 
	Attention:
	 	 	 	 
	 

	 	 

	 	 






 





Space above for Recorder’s Use



THIS MORTGAGE COVERS GOODS WHICH ARE OR ARE TO BECOME FIXTURES AND IS TO BE RECORDED IN THE REAL
ESTATE RECORDS AS A FIXTURE FILING




	 	 	 

	 
	 	 
	 


	 	 
	 


	 	 
	 


	 	 






individually and collectively, as mortgagor (Mortgagor)




to



	 	 	 

	 
	 	 
	 


	 	 






, as mortgagee (Mortgagee)



[FEE], [LEASEHOLD] [AND] [SUBLEASEHOLD] MORTGAGE,

FIXTURE FILING AND SECURITY AGREEMENT




	 	 	 	 	 	 	 

	 

	 	Dated:
	 	As of                     , 20___	 	 
	 
	 	 	 	 	 	 
	 

	 	Location:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	County:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	File No.:	 	 	 	 
	 

	 	 	 	 

	 	 






 









 








     THIS [FEE], [LEASEHOLD] [AND] [SUBLEASEHOLD] MORTGAGE, FIXTURE FILING AND SECURITY AGREEMENT
(this “Security Instrument”) is made as of the       day of                     , 20     , by [                    ,
a(n)                     , as [fee owner and] mortgagor, having its principal place of business at
                     (“Owner”),                     , a(n)                     , having its
principal place of business at                      (“Ground Lessee”), as ground lessee and
mortgagor, and                     , a(n)                     , having its principal place of business
at                      (“Operating Lessee”, and together with Ground Lessee, each, a “                    
Borrower” and collectively, the “                     Borrowers”), as operating lessee and mortgagor (Owner,
Ground Lessee and Operating Lessee being sometimes referred to hereinafter, individually, as a
“Mortgagor” or, collectively, as “Mortgagors”)], to FORTRESS CREDIT CORP., a Delaware corporation
(“FCC”), having its principal place of business at c/o Drawbridge Special Opportunities Fund LP,
1345 Avenue of the Americas, 46th Floor, New York, New York 10105, in its capacity as the
Administrative Agent for the Lenders under the Loan Agreement (in such capacity, “Mortgagee”). All
capitalized terms not defined herein shall have the respective meanings set forth in the Loan
Agreement (defined below).



RECITALS:




     [WHEREAS, Owner owns the fee simple interest in the real property described in
Exhibit A attached hereto and made a part hereof (the “Land”);]



     [WHEREAS, Ground Lessee is the owner of the leasehold estate created pursuant to that certain
Ground Lease dated                     , 20     , by and between Owner, as lessor, and Ground Lessee, as
lessee, and evidenced by that certain [Memorandum of Lease] recorded in the                                         
on                     , 20     , as modified by [list modification instruments] [to be] recorded
[concurrently herewith] in the                      (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the “Ground Lease”)];



     [WHEREAS, Operating Lessee is the owner of the subleasehold estate created pursuant to that
certain Lease Agreement dated                     , 20     , by and between Owner [(formerly known as
                    )], as lessor, and                     , as lessee, as modified by [list
modification instruments] [to be] recorded [concurrently herewith] in the                     , and
assigned by [list assignment instruments] [to be] recorded [concurrently herewith] in the
                    , and evidenced by that certain [Memorandum of Lease] recorded in the
                     (as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time, the “Operating Lease”)];



     WHEREAS, the                      Borrowers and certain other parties, collectively, as borrowers
(together with the                      Borrowers, collectively, the “Borrowers”), Mortgagee, as
Administrative Agent, and FCC, in its capacity as Initial Lender, and certain other Persons,
collectively, as lenders, have entered into that certain Credit Agreement dated as of the date
hereof, as modified by that certain Letter Agreement dated as of the date hereof, between
Administrative Agent, Initial Lender, Borrowers and FelCor Lodging Limited Partnership (as so
modified, and as the same may be further amended, restated, replaced, supplemented or otherwise
modified from time to time, the “Loan Agreement”), pursuant to which the Mortgagee and the other
lenders named therein have agreed to make a loan (the “Loan”) to the



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Borrowers in the original principal sum of TWO HUNDRED TWELVE MILLION and 00/100 Dollars
($212,000,000.00), which Loan shall be evidenced by the Note;




     WHEREAS,                      Borrowers are obligated under the Loan Agreement to grant to Mortgagee as
security for the payment and performance of the Obligations a valid, enforceable, first-priority
mortgage lien on the Property (hereinafter defined);



     WHEREAS, Owner owns 100% of the direct and indirect equity interests in the                     
Borrowers, and Owner will derive significant benefits if the Borrowers consummate the transactions
contemplated in the Loan Agreement. [The Loan Agreement requires Owner to execute, acknowledge and
deliver a mortgage encumbering Owner’s fee simple interest in the Property, and pursuant to Section
6.01(a) of the Ground Lease, Owner is required, upon the request of Ground Lessee, to subject
Owner’s fee simple estate in the Property to a security instrument encumbering the Leasehold Estate
(hereinafter defined)];



     WHEREAS, Mortgagors are entering into this Security Instrument pursuant to the terms of the
Loan Agreement, to secure the payment, fulfillment, and performance by                      Borrowers of their
obligations thereunder and under the other Loan Documents, and each and every term and provision of
the Loan Agreement, the Note, and that certain Assignment of Leases and Rents dated the date
hereof, made by Mortgagors in favor of Mortgagee and delivered in connection with this Security
Instrument (as the same may be amended, restated, replaced, supplemented or otherwise modified from
time to time, the “Assignment of Leases”), including the rights, remedies, obligations, covenants,
conditions, agreements, indemnities, representations and warranties of the parties therein, are
hereby incorporated by reference herein as though set forth in full and shall be considered a part
of this Security Instrument (the Loan Agreement, the Note, this Security Instrument, the Assignment
of Leases and all other documents evidencing or securing the Obligations (including all additional
mortgages, deeds of trust, deeds to secure debt and assignments of leases and rents) or executed or
delivered in connection therewith, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, are hereinafter referred to collectively as the “Loan
Documents”); and



     WHEREAS, it is in the best interest of [Owner, Ground Lessee and Operating Lessee] to execute
this Security Instrument inasmuch as the                      Borrowers will derive substantial benefits from
this Loan.



     NOW, THEREFORE, in consideration of the making of the Loan by Administrative Agent, FCC and
the other Lenders to the Borrower and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged:



ARTICLE 1 — GRANTS OF SECURITY




     Section 1.1 Property Mortgaged. That for and in consideration of the sum of TEN AND
00/100 DOLLARS and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged,



          [(A) Owner does hereby irrevocably grant, bargain, sell, pledge, assign, warrant, transfer and
convey to Mortgagee, and grant a security interest to Mortgagee in, the fee simple estate of Owner,
now owned or hereafter acquired in and to the Land, subject to the Permitted Liens];



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          [(B) Ground Lessee does hereby irrevocably grant, bargain, sell, pledge, assign, warrant,
transfer and convey to Mortgagee, and grant a security interest to Mortgagee in, the Ground Lease
and the leasehold estate created thereby (the “Leasehold Estate”), subject to the Permitted Liens;
and]




          [(C) Operating Lessee does hereby irrevocably grant, bargain, sell, pledge, assign, warrant,
transfer and convey to Mortgagee, and grant a security interest to Mortgagee in, the Operating
Lease and the subleasehold estate created thereby in the Land, subject to the Permitted Liens;]




          TOGETHER WITH, in the case of each of [Owner, Ground Lessee and Operating Lessee], all right,
title, interest and the estate of each of the Mortgagors now owned or hereafter acquired in and to
the following property, rights, interests and estates (the foregoing property, rights, interests
and estates, together with the following property, rights, interests and estates being hereinafter
collectively referred to as the “Property”):




          (a) [Ground Lease. The Ground Lease and the Leasehold Estate, including all
assignments, modifications, extensions and renewals of the Ground Lease and all credits, deposits,
options, privileges and rights of Ground Lessee as tenant under the Ground Lease, including, but
not limited to, the right, if any, to renew or extend the Ground Lease for a succeeding term or
terms, and also including all the right, title, claim or demand whatsoever of Ground Lessee either
in law or in equity, in possession or expectancy, of, in and to Ground Lessee’s right, as tenant
under the Ground Lease, to elect under the Bankruptcy Code to terminate or treat the Ground Lease
as terminated or to consent to the transfer of Owner’s interest in the Land and the Improvements
free and clear of the Ground Lease under Section 363 of the Bankruptcy Code in the event of (i) the
bankruptcy, reorganization or insolvency of Owner, and (ii) (A) the rejection of the Ground Lease
by Owner, as debtor in possession, or by a trustee for Owner, pursuant to Section 365 of the
Bankruptcy Code or (B) any attempt by Owner, as debtor in possession, or by a trustee for Owner, to
transfer Owner’s interest in the Land and the Improvements under Section 363 of the Bankruptcy
Code;]




          (b) [Operating Lease. The Operating Lease and the subleasehold estate created thereby,
including all assignments, modifications, extensions and renewals of the Operating Lease and all
credits, deposits, options, privileges and rights of Operating Lessee as tenant under the Operating
Lease, including, but not limited to, rights of first refusal, if any, and the right, if any, to
renew or extend the Operating Lease for a succeeding term or terms, and also including all the
right, title, claim or demand whatsoever of Operating Lessee either in law or in equity, in
possession or expectancy, of, in and to Operating Lessee’s right, as tenant under the Operating
Lease, to elect under Section 365(h)(l) of the Bankruptcy Code, Title 11 U.S.C.A. §101 et seq. (the
“Bankruptcy Code”) to terminate or treat the Operating Lease as terminated in the event of (i) the
bankruptcy, reorganization or insolvency of the lessor thereunder, and (ii) the rejection of the
Operating Lease by the lessor thereunder, as debtor in possession, or by a trustee for the lessor
thereunder, pursuant to Section 365 of the Bankruptcy Code;]




          (c) Additional Land. All additional lands, estates and development rights hereafter
acquired by Mortgagors for use in connection with the Land and the development of the Land and all
additional lands and estates therein which may, from time to time, by supplemental mortgage or
otherwise be expressly made subject to the lien of this Security Instrument;







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          (d) Improvements. The buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or hereafter erected or
located on the Land (the “Improvements”);




          (e) Easements. All easements, rights-of-way or use, rights, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air
rights and development rights, and all estates, rights, titles, interests, privileges, liberties,
servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or
hereafter belonging, relating or pertaining to the Land and the Improvements, including, but not
limited to, those arising under and by virtue of the [Operating Lease], and the reversion and
reversions, remainder and remainders, and all land lying in the bed of any street, road or avenue,
opened or proposed, in front of or adjoining the Land, to the center line thereof and all the
estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy,
property, possession, claim and demand whatsoever, both at law and in equity, of Mortgagors of, in
and to the Land and the Improvements, including, but not limited to, those arising under and by
virtue of [the Ground Lease and/or the Operating Lease] and every part and parcel thereof, with the
appurtenances thereto;




          (f) Fixtures and Personal Property. All machinery, equipment, fixtures (including,
but not limited to, all heating, air conditioning, plumbing, lighting, communications and elevator
fixtures, inventory and goods), inventory and articles of personal property and accessions thereof
and renewals, replacements thereof and substitutions therefor (including, but not limited to, beds,
bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting,
drapes, draperies, curtains, shades, venetian blinds, screens, paintings, hangings, pictures,
divans, couches, luggage carts, luggage racks, stools, sofas, chinaware, linens, pillows, blankets,
glassware, silverware, foodcarts, cookware, dry cleaning facilities, dining room wagons, keys or
other entry systems, bars, bar fixtures, liquor and other drink dispensers, icemakers, radios,
television sets, intercom and paging equipment, electric and electronic equipment, dictating
equipment, private telephone systems, medical equipment, potted plants, heating, lighting and
plumbing fixtures, fire prevention and extinguishing apparatus, cooling and air-conditioning
systems, elevators, escalators, fittings, plants, apparatus, stoves, ranges, refrigerators, laundry
machines, tools, machinery, engines, dynamos, motors, boilers, incinerators, switchboards,
conduits, compressors, vacuum cleaning systems, floor cleaning, waxing and polishing equipment,
call systems, brackets, electrical signs, bulbs, bells, ash and fuel, conveyors, cabinets, lockers,
shelving, spotlighting equipment, dishwashers, garbage disposals, washers and dryers), other
customary hotel equipment and other tangible property of every kind and nature whatsoever owned by
Mortgagors, or in which Mortgagors have or shall have an interest, now or hereafter located upon
the Land and the Improvements, or appurtenant thereto, and usable in connection with the present or
future operation and occupancy of the Land and the Improvements and all building equipment,
materials and supplies of any nature whatsoever owned by Mortgagors, or in which Mortgagors have or
shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant
thereto, or usable in connection with the present or future operation and occupancy of the Land and
the Improvements (collectively, the “Personal Property”), and the right, title and interest of
Mortgagors in and to any of the Personal Property which may be subject to any security interests,
as defined in the Uniform Commercial Code, as adopted and enacted by the State or States where any
of the Property is located (the “Uniform Commercial Code”), superior in lien to the lien of this
Security Instrument and all proceeds and products of the above;







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          (g) Leases and Rents. All leases [(including the Ground Lease)], subleases
[(including the Operating Lease)], rental agreements, registration cards and agreements, if any,
and other agreements, whether or not in writing, affecting the use, enjoyment or occupancy of the
Land and/or the Improvements heretofore or hereafter entered into and all extensions, amendments
and modifications thereto, whether before or after the filing by or against Mortgagors of any
petition for relief under the Bankruptcy Code (the “Leases”) and all right, title and interest of
Mortgagors, their respective successors and assigns therein and thereunder, including, without
limitation, any guaranties of the lessees’ obligations thereunder, cash or securities deposited
thereunder to secure the performance by the lessees of their obligations thereunder and all rents,
additional rents, revenues, issues, registration fees, if any, and profits (including all oil and
gas or other mineral royalties and bonuses and all rents, revenues, bonus money, royalties, rights
and benefits accruing to Mortgagors under all present and future oil, gas and mineral leases on any
parts of the Land and the Improvements) from the Land and the Improvements, all income, rents, room
rates, issues, profits, revenues, deposits, accounts and other benefits from the operation of the
hotel on the Land and/or the Improvements, including, without limitation, all revenues and credit
card receipts collected from guest rooms, restaurants, bars, mini-bars, meeting rooms, banquet
rooms and recreational facilities and otherwise, all receivables, customer obligations, installment
payment obligations and other obligations now existing or hereafter arising or created out of sale,
lease, sublease, license, concession or other grant of the right of the possession, use or
occupancy of all or any portion of the Land and/or Improvements, or personalty located thereon, or
rendering of services by Mortgagors or any operator or manager of the hotel or the commercial space
located in the Improvements or acquired from others including, without limitation, from the rental
of any office space, retail space, commercial space, guest room or other space, halls, stores or
offices, including any deposits securing reservations of such space, exhibit or sales space of
every kind, license, lease, sublease and concession fees and rentals, health club membership fees,
food and beverage wholesale and retail sales, service charges, vending machine sales and proceeds,
if any, from business interruption or other loss of income insurance relating to the use, enjoyment
or occupancy of the Land and/or the Improvements whether paid or accruing before or after the
filing by or against Mortgagor of any petition for relief under the Bankruptcy Code (the “Rents”)
and all proceeds from the sale or other disposition of the Leases and the right to receive and
apply the Rents to the payment of the Obligations;




          (h) Condemnation Awards. All awards or payments, including interest thereon, which
may heretofore and hereafter be made with respect to the Land, the Improvements, the Personal
Property and the other Property granted under this Section 1.1, whether from the exercise
of the right of eminent domain (including but not limited to any transfer made in lieu of or in
anticipation of the exercise of the right), or for a change of grade, or for any other injury to or
decrease in the value of the Property;




          (i) Insurance Proceeds. All proceeds of and any unearned premiums on any insurance
policies covering the Land, the Improvements, the Personal Property and the other Property granted
under this Section 1.1, including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the
Property;




          (j) Tax Certiorari. All refunds, rebates or credits in connection with a reduction in
real estate taxes and assessments charged against the Land, the Improvements, the






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Personal Property and the other Property granted under this Section 1.1 as a result of
tax certiorari or any applications or proceedings for reduction;




          (k) Conversion. All proceeds of the conversion, voluntary or involuntary, of any of
the foregoing including, without limitation, proceeds of insurance and condemnation awards, into
cash or liquidation claims;




          (l) Rights. The right, in the name and on behalf of each of the Mortgagors, to appear
in and defend any action or proceeding brought with respect to the Property and to commence any
action or proceeding to protect the interest of Mortgagee in the Land, the Improvements, the
Personal Property and the other Property granted under this Section 1.1;




          (m) Agreements. Except for the Franchise Agreement (hereinafter defined), all
agreements, contracts, certificates, instruments, franchises, permits, licenses, plans,
specifications and other documents, now or hereafter entered into, and all rights therein and
thereto, respecting or pertaining to the use, occupation, construction, management or operation of
the Land and any part thereof and any Improvements or respecting any business or activity conducted
on the Land and any part thereof and all right, title and interest of any of the Mortgagors therein
and thereunder, including, without limitation, the right, upon the happening of any Event of
Default to receive and collect any sums payable to any of the Mortgagors thereunder;




          (n) Intangibles. All trade names, trademarks, servicemarks, logos, copyrights,
goodwill, books and records, tenant or guest lists, advertising materials, telephone exchange
numbers identified in such materials and all other general intangibles relating to or used in
connection with the operation of the Land, the Improvements and the Personal Property;




          (o) Accounts. All Accounts, Account Collateral, reserves, escrows and deposit
accounts maintained by any of the Mortgagors with respect to the Property, including, without
limitation, the Property Accounts, the Concentration Accounts and the Lockbox Account, and all
complete securities, investments, property and financial assets held therein from time to time and
all proceeds, products, distributions or dividends or substitutions thereon and thereof;




          (p) Causes of Action. All causes of action and claims (including, without limitation,
all causes of action or claims arising in tort, by contract, by fraud or by concealment of material
fact) against any Person for damages or injury to the Property or in connection with any
transactions financed in whole or in part by the proceeds of the Loan (“Causes of Action”);




          (q) Interest Rate Cap Agreement. All right, title, interest and claim of any of the
Mortgagors in, to, under or pursuant to any interest rate cap confirmation purchased by any of the
Mortgagors pursuant to the terms of the Loan Documents (the “Confirmation”), together with the
corresponding interest rate cap agreement relating thereto (the “Rate Agreement”), and in, to,
under or pursuant to any and all amendments, supplements and additions thereto (the Confirmation
and the Rate Agreement, together with any amendments, additions or supplements thereto being
hereinafter collectively referred to as the “Cap Agreement”), and all claims of Mortgagors for
breach by any counterparty of any covenant, agreement, representation or warranty contained in the
Cap Agreement;







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          (r) Accounts Receivables. All right, title and interest of each of the Mortgagors
arising from the operation of the Land and the Improvements in and to all payments for goods or
property sold or leased or for services rendered, whether or not yet earned by performance, and not
evidenced by an instrument or chattel paper, (hereinafter referred to as “Accounts Receivable”)
including, without limiting the generality of the foregoing, (i) all accounts, contract rights,
book debts, and notes arising from the operation of a hotel on the Land and the Improvements or
arising from the sale, lease or exchange of goods or other property and/or the performance of
services, (ii) each of the Mortgagors’ rights to payment from any consumer credit/charge card
organization or entities which sponsor and administer such cards as the American Express Card, the
Visa Card and the Mastercard, (iii) each of the Mortgagors’ rights in, to and under all purchase
orders for goods, services or other property, (iv) each of the Mortgagors’ rights to any goods,
services or other property represented by any of the foregoing, (v) monies due to or to become due
to each of the Mortgagors under all contracts for the sale, lease or exchange of goods or other
property and/or the performance of services including the right to payment of any interest or
finance charges in respect thereto (whether or not yet earned by performance on the part of the
respective Mortgagor) and (vi) all collateral security and guaranties of any kind given by any
person or entity with respect to any of the foregoing. Accounts Receivable shall include those now
existing or hereafter created, substitutions therefor, proceeds (whether cash or non-cash, movable
or immovable, tangible or intangible) received upon the sale, exchange, transfer, collection or
other disposition or substitution thereof and any and all of the foregoing and proceeds therefrom;




          (s) Security Interests. All right, title and interest of lessor under the [Operating
Lease] as secured party in the personal property and collateral pursuant to the security interest
granted by [Operating Lessee] to the lessor thereunder in the [Operating Lease] (the “Operating
Lease Security Agreement”);




          (t) Proceeds. All proceeds of any of the foregoing items set forth in Subsections
(a) through (s) above, including, without limitation, Insurance Proceeds and Awards and
Causes of Action which may at any time be converted into cash or liquidation claims; and




          (u) Other Rights. Any and all other rights of Mortgagors in and to the items set
forth in Subsections (a) through (t) above.




     Section 1.2 Assignment of Leases and Rents. Each of the Mortgagors hereby absolutely
and unconditionally assigns to Mortgagee all of such Mortgagor’s right, title and interest in and
to all current and future Leases and Rents [and the Operating Lease Security Agreement]; it being
intended by Mortgagors that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms of this Section
1.2, Section 9.1(h) of this Security Instrument and the Loan Agreement, Mortgagee
grants to Mortgagors a revocable license to collect and receive the Rents. Subject to the terms of
the Loan Agreement relating to cash management at the Property, Mortgagors shall hold the Rents, or
a portion thereof sufficient to discharge all current sums due on the Obligations, for use in the
payment of such sums.



     Section 1.3 Security Agreement. This Security Instrument is both a real property
mortgage and a “security agreement” within the meaning of the Uniform Commercial Code. The
Property includes both real and personal property and all other rights and interests, whether
tangible or intangible in nature, of Mortgagors in the Property. By executing and delivering this
Security Instrument, each of the Mortgagors hereby grants to Mortgagee, as security for the



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Obligations, a security interest in the Personal Property and the other collateral given as
security for the repayment of the Obligations (whether denominated as part of the Property or
otherwise) to the extent that under applicable law the same would be governed by the Uniform
Commercial Code (collectively, “UCC Collateral”) to the full extent that the Personal Property and
other UCC Collateral may be subject to the Uniform Commercial Code.




     Section 1.4 Pledge of Monies Held. Mortgagors hereby pledge to Mortgagee any and all
monies now or hereafter held by Mortgagee, including, without limitation, any sums deposited in the
Reserve Funds, the Accounts, Net Proceeds and Awards, as additional security for the Obligations
until expended or applied as provided in the Loan Agreement or this Security Instrument.



     Section 1.5 Fixture Filing. Without in any manner limiting the generality of any of
the other provision of this Security Instrument: (a) some portions of the goods described or to
which reference is made herein are or are to become fixtures on the Land described or to which
reference is made herein or on Exhibit A attached to this Security Instrument; (b) this
Security Instrument is to be filed of record in the real estate records as a financing statement
and shall constitute a “fixture filing” for purposes of the Uniform Commercial Code; and (c)
Mortgagors are the record owners of the real estate or interests in the real estate constituting
the Property hereunder, subject to the Permitted Liens. Information concerning the security
interest herein granted may be obtained at the addresses set forth on the first page hereof. This
Security Instrument shall be effective as a financing statement filed as a fixture filing with
respect to all fixtures included within the Property and is to be filed for record in the real
property or other applicable records in the office of the County Clerk or Recorder, as applicable,
where the Property (including said fixtures) is situated. This Security Instrument shall also be
effective as a financing statement covering as-extracted minerals or the like (including oil and
gas) and accounts subject to the applicable provisions of the Uniform Commercial Code of the State
in which the Property is located, if applicable. The address of the Debtor (Mortgagor) is set
forth on the first page hereof and the address of the Secured Party (Mortgagee) is set forth below.
In that regard, the following information is provided:



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	Name of First Debtor:
	 	 
	 
	 	 
	Type of Organization:

	 	[Limited Partnership] [Limited Liability Company]
	 
	 	 
	State:

	 	[Delaware]
	 
	 	 
	Organizational ID Number:

	 	[Delaware                     ]
	 
	 	 
	Name of Secured Party:

	 	Fortress Credit Corp., as Administrative Agent
	 
	 	 
	Address of Secured Party:

	 	c/o Drawbridge Special Opportunities Fund LP

1345 Avenue of the Americas, 46th Floor

New York, New York 10105

Attention: James K. Noble, III, Esq.
	 
	 	 
	Name of Second Debtor:
	 	 
	 
	 	 
	Type of Organization:

	 	[Limited Partnership] [Limited Liability Company]
	 
	 	 
	State:

	 	[Delaware]
	 
	 	 
	Organizational ID Number:

	 	[Delaware                     ]
	 
	 	 
	Name of Secured Party:

	 	Fortress Credit Corp., as Administrative Agent
	 
	 	 
	Address of Secured Party:

	 	c/o Drawbridge Special Opportunities Fund LP

1345 Avenue of the Americas, 46th Floor

New York, New York 10105

Attention: James K. Noble, III, Esq.
	 
	 	 
	Name of Third Debtor:
	 	 
	 
	 	 
	Type of Organization:

	 	[Limited Partnership] [Limited Liability Company]
	 
	 	 
	State:

	 	[Delaware]
	 
	 	 
	Organizational ID Number:

	 	[Delaware                     ]
	 
	 	 
	Name of Secured Party:

	 	Fortress Credit Corp., as Administrative Agent
	 
	 	 
	Address of Secured Party:

	 	c/o Drawbridge Special Opportunities Fund LP

1345 Avenue of the Americas, 46th Floor

New York, New York 10105

Attention: James K. Noble, III, Esq.








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     Section 1.6 Conditions to Grant. TO HAVE AND TO HOLD the above granted and described
Property unto and to the use and benefit of Mortgagee, and for its successors and assigns, forever,
subject to the Permitted Liens; PROVIDED, HOWEVER, these presents are upon the express condition
that, if                     Borrowers shall well and truly pay to Mortgagee the Obligations at the time and
in the manner provided in the Loan Agreement, the Note and this Security Instrument, shall well and
truly perform the Other Obligations (hereinafter defined) as set forth in this Security Instrument
and shall well and truly abide by and comply with each and every covenant and condition set forth
herein, in the Note and in the Loan Agreement, these presents and the estate hereby granted shall
cease, terminate and be void.



ARTICLE 2 — DEBT AND OBLIGATIONS SECURED




     Section 2.1 Debt. This Security Instrument and the grants, assignments and transfers
made in Article 1 are given for the purpose of securing the Obligations, including without
limitation:



          (a) the payment of the indebtedness evidenced by the Note in lawful money of the United States
of America;




          (b) the payment of interest, default interest, late charges and other sums, as provided in the
Note, the Loan Agreement, this Security Instrument or the other Loan Documents;




          (c) the payment of the Breakage Costs, if any;




          (d) the payment of all other moneys agreed or provided to be paid by Borrowers in the Note,
the Loan Agreement, this Security Instrument or the other Loan Documents;




          (e) the payment of all sums advanced pursuant to the Loan Agreement or this Security
Instrument to protect and preserve the Property and the lien and the security interest created
hereby; and




          (f) the payment of all sums advanced and costs and expenses incurred by Mortgagee in
connection with the Obligations or any part thereof, any modification, amendment, renewal,
extension, or change of or substitution for the Obligations or any part thereof, or the acquisition
or perfection of the security therefor, whether made or incurred at the request of Mortgagors or
Mortgagee.




     Section 2.2 Other Obligations. This Security Instrument and the grants, assignments
and transfers made in Article 1 are also given for the purpose of securing the following (the
“Other Obligations”):



          (a) the performance of all other obligations of Mortgagors contained herein;




          (b) the performance of each obligation of Mortgagors contained in any other agreement given by
the applicable Mortgagor to Mortgagee which is for the purpose of further securing the obligations
secured hereby, and any renewals, extensions, substitutions, replacements, amendments,
modifications and changes thereto; and







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          (c) the performance of each obligation of Mortgagors contained in any renewal, extension,
amendment, modification, consolidation, change of, or substitution or replacement for, all or any
part of the Note, the Loan Agreement, this Security Instrument or the other Loan Documents.




ARTICLE 3 — MORTGAGOR COVENANTS




     Mortgagors covenant and agree as follows:



     Section 3.1 Payment of Obligations.                     Borrowers will pay and perform the
Obligations at the time and in the manner provided in the Note, the Loan Agreement, this Security
Instrument and the other Loan Documents.



     Section 3.2 Incorporation by Reference. All the covenants, conditions and agreements
contained in the Loan Agreement, the Note and all and any of the other Loan Documents, are hereby
made a part of this Security Instrument to the same extent and with the same force as if fully set
forth herein.



     Section 3.3 Insurance.                     Borrowers shall obtain and maintain, or cause to be
maintained, insurance in full force and effect at all times with respect to the Borrowers and the
Property as required pursuant to the Loan Agreement.



     Section 3.4 Payment of Taxes, etc.                     Borrowers shall promptly pay all Taxes
and Other Charges in accordance with the terms of the Loan Agreement.



     Section 3.5 Maintenance and Use of Property.                     Borrowers shall cause the
Property to be maintained in a good and safe condition and repair in accordance with the terms of
the Loan Agreement. Subject to the terms of the Loan Agreement, the Improvements and the Personal
Property shall not be removed, demolished or materially altered or expanded (except for normal
replacement of the Personal Property) without the consent of Mortgagee. Subject to the terms of
the Loan Agreement,                     Borrowers shall promptly repair, replace or rebuild any part of the
Property which may be destroyed by any Casualty, or become damaged, worn or dilapidated or which
may be affected by any Condemnation and shall complete and pay for any structure at any time in the
process of construction or repair on the Land. Subject to the terms of the Loan Agreement,
Mortgagors shall not initiate, join in, acquiesce in, or consent to any change in any private
restrictive covenant, zoning law or other public or private restriction, limiting or defining the
uses which may be made of the Property or any part thereof. If under applicable zoning provisions
the use of all or any portion of the Property is or shall become a nonconforming use, Mortgagors
will not cause or permit the nonconforming use to be discontinued or the nonconforming Improvement
to be abandoned without the express written consent of Mortgagee.



     Section 3.6 Waste. Mortgagors shall not commit or suffer any waste of the Property or
make any change in the use of the Property which will in any way materially increase the risk of
fire or other hazard arising out of the operation of the Property, or take any action that might
invalidate or give cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way impair the value of the Property or the security of this Security
Instrument. Mortgagors will not, without the prior written consent of Mortgagee, permit any
drilling or exploration for or extraction, removal, or production of any minerals from the surface



11









 




or the subsurface of the Land, regardless of the depth thereof or the method of mining or
extraction thereof.




     Section 3.7 Payment For Labor and Materials.



          (a) Subject to Section 3.7(b) below,                     Borrowers will promptly pay (or cause
to be paid) when due all bills and costs for labor, materials, and specifically fabricated
materials incurred in connection with the Property (each, a “Work Charge”) and never permit to
exist beyond the due date thereof in respect of the Property or any part thereof any Lien or
security interest other than the Permitted Liens, even though inferior to the Liens and the
security interests hereof, and in any event never permit to be created or exist in respect of the
Property or any part thereof any other or additional Lien or security interest other than the Liens
or security interests hereof except for the Permitted Liens.                     Borrowers represent there
are no claims for payment for work, labor or materials affecting the Property which are or may
become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.




          (b) After prior written notice to Mortgagee, any Mortgagor, at its own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the validity of any Work Charge, the applicability of any Work Charge to Mortgagors or
to the Property or any alleged non-payment of any Work Charge, provided that (i) no Event
of Default has occurred and is continuing; (ii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any instrument to which the applicable Mortgagor is
subject and shall not constitute a default thereunder and such proceeding shall be conducted in
accordance with all applicable Legal Requirements; (iii) neither the Property nor any part thereof
or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost
during the duration of such legal proceeding; (iv) the applicable Mortgagor shall promptly upon
final determination thereof pay (or cause to be paid) any such Work Charge determined to be valid,
applicable and unpaid; (v) such proceeding shall suspend the collection of such contested Work
Charge from the Property, or Mortgagors shall have paid the same (or shall have caused the same to
be paid) under protest; and (vi) Mortgagors shall furnish (or cause to be furnished) such security
as may be required in the proceeding by applicable Laws or Legal Requirements, or as may be
reasonably requested by Mortgagee, to insure payment of such Work Charge, together with all
interest and penalties payable in connection therewith. Mortgagee may apply any such security or
part thereof, as necessary to pay for such Work Charge at any time when, in the sole but reasonable
judgment of Mortgagee, the validity, applicability and non-payment of such Work Charge is finally
established or the Property (or any part thereof or interest therein) shall be in danger of being
sold, forfeited, terminated, cancelled or lost during or as a result of such legal proceeding or
Work Charge.




     Section 3.8 Performance of Other Agreements. Mortgagors shall observe and perform
each and every term to be observed or performed by Mortgagors pursuant to the terms of the Loan
Agreement, any other Loan Documents and any agreement or recorded instrument affecting or
pertaining to the Property, including, but not limited to, the [Operating Lease] and any management
agreements or franchise agreements, or given by any Mortgagor to Mortgagee for the purpose of
further securing the Obligations and any amendments, modifications or changes thereto.



     Section 3.9 Change of Name, Identity or Structure. Except as may be permitted under
the Loan Agreement, no Mortgagor will change such Mortgagor’s name, identity (including its trade
name or names) or corporate, partnership or other structure without first obtaining the prior



12









 




written consent of Mortgagee. Mortgagors shall execute and deliver to Mortgagee, prior to or
contemporaneously with the effective date of any such change, any financing statement or financing
statement change required by Mortgagee to establish or maintain the validity, perfection and
priority of the security interest granted herein. At the request of Mortgagee, Mortgagors shall
execute a certificate in form satisfactory to Mortgagee listing the trade names under which the
applicable Mortgagor intends to operate the Property, and representing and warranting that such
Mortgagor does business under no other trade name with respect to the Property.




     Section 3.10 Property Use. The Property shall be used only for a hotel and any
ancillary uses relating thereto, and for no other uses without the prior written consent of
Mortgagee, which consent may be withheld in Mortgagee’s sole and absolute discretion.



     Section 3.11 Compliance with Laws.



          (a) Subject to Section 7.1(b) of the Loan Agreement, Mortgagors shall promptly comply with all
Laws affecting the Property, or the use thereof, including Environmental Laws.




          (b) Mortgagors shall from time to time, upon Mortgagee’s reasonable request, provide Mortgagee
with evidence reasonably satisfactory to Mortgagee that the Property complies with all Laws or is
exempt from compliance with Laws.




          (c) Notwithstanding any provisions set forth herein or in any document regarding Mortgagee’s
approval of alterations of the Property, Mortgagors shall not alter the Property in any manner
which would materially increase Mortgagors’ responsibilities for compliance with Laws without the
prior written consent of Mortgagee. Mortgagee’s approval of the plans, specifications or working
drawings for alterations of the Property shall create no responsibility or liability on behalf of
Mortgagee for their completeness, design, sufficiency or their compliance with Laws. The foregoing
shall apply to tenant improvements constructed by Mortgagors or by any of their tenants. Mortgagee
may condition any such approval upon receipt of a certificate of compliance with Laws from an
independent architect, engineer or other Person reasonably acceptable to Mortgagee.




          (d) Mortgagors shall give prompt notice to Mortgagee of the receipt by Mortgagors of any
notice related to a violation of any Laws and of the commencement of any proceedings or
investigations which relate to compliance with Laws.




          (e) After prior written notice to Mortgagee, Mortgagors, at their own expense, may contest by
appropriate legal proceeding, promptly initiated and conducted in good faith and with due
diligence, the Laws affecting the Property, provided that (i) no Event of Default has
occurred and is continuing under the Note, this Security Agreement or any other Loan Document; (ii)
Mortgagors are permitted to do so under the provisions of any other mortgage, deed of trust or deed
to secure debt affecting the Property; (iii) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which Mortgagors or the
Property is subject and shall not constitute a default thereunder; (iv) neither the Property, any
part thereof or interest therein, any of the tenants or occupants thereof, nor Mortgagors shall be
affected in any material adverse way as a result of initiating or prosecuting such proceeding; (v)
either non-compliance with the Laws shall not impose civil or criminal liability on Mortgagors or
Mortgagees or Mortgagors shall comply with the Laws






13









 







during the pendency of the proceeding; (vi) Mortgagors shall have furnished the security as
may be required in the proceeding or by Mortgagee to ensure compliance by Mortgagors with the Laws;
and (vii) Mortgagors shall have furnished to Mortgagee all other items reasonably requested by
Mortgagee.




ARTICLE 4 — REPRESENTATIONS AND WARRANTIES




     Mortgagors represent and warrant to Mortgagee that:



     Section 4.1 Warranty of Title. Mortgagors have good fee or leasehold title, as
applicable, to the Property and have the right to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the same. [(i) Owner possesses an unencumbered fee simple absolute
estate, (ii) Ground Lessee possesses an unencumbered leasehold interest (created by and pursuant to
the Ground Lease) in the Land and the Improvements and (iii) Operating Lessee possesses an
unencumbered leasehold estate (created by and pursuant to the terms of the Operating Lease) in the
Land and the Improvements]. [Owner owns the Property free and clear of all liens, encumbrances and
charges whatsoever except for the Permitted Liens]. The Permitted Liens do not and will not
materially adversely affect or interfere with the value, or materially adversely affect or
interfere with the current use or operation, of the Property, or the security intended to be
provided by this Security Instrument or the ability of                     Borrowers to repay the Note or any
other amount owing under the Note, this Security Instrument, the Loan Agreement, or the other Loan
Documents or to perform its obligations thereunder in accordance with the terms of the Loan
Agreement, the Note, this Security Instrument or the other Loan Documents. This Security
Instrument, when properly recorded in the appropriate records, together with the Assignment of
Leases and any Uniform Commercial Code financing statements required to be filed in connection
therewith, will create (i) a valid, perfected first priority lien on the Property, subject only to
Permitted Liens and (ii) perfected security interests in and to, and perfected collateral
assignments of, all personalty (including the Leases), all in accordance with the terms thereof,
subject only to Permitted Liens. The Assignment of Leases, when properly recorded in the
appropriate records, creates a valid first priority assignment of, or a valid first priority
security interest in, certain rights under the related Leases, subject only to a license granted to
Mortgagors to exercise certain rights and to perform certain obligations of the lessor under such
Leases, including the right to operate the Property. No Person other than Mortgagors owns any
interest in any payments due under such Leases that is superior to or of equal priority with the
Mortgagee’s interest therein. Mortgagors shall forever warrant, defend and preserve the title and
the validity and priority of the lien of this Security Instrument and shall forever warrant and
defend the same to Mortgagee against the claims of all persons whomsoever.



ARTICLE 5 — OBLIGATIONS AND RELIANCES




     Section 5.1 Relationship of Mortgagors and Mortgagee. The relationship between
Mortgagors and Mortgagee is solely that of debtor and creditor, and Mortgagee has no fiduciary or
other special relationship with any of the Mortgagors, and no term or condition of any of the Loan
Agreement, the Note, this Security Instrument and the other Loan Documents shall be construed so as
to deem the relationship between Mortgagors and Mortgagee to be other than that of debtor and
creditor.



     Section 5.2 No Reliance on Mortgagee. The members, general partners, principals and
(if any Mortgagor is a trust) beneficial owners of Mortgagors are experienced in the



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ownership and operation of properties similar to the Property, and Mortgagors and Mortgagee
are relying solely upon such expertise and business plan in connection with the ownership and
operation of the Property. Mortgagors are not relying on Mortgagee’s expertise, business acumen or
advice in connection with the Property.




     Section 5.3 No Mortgagee or Mortgagee Obligations. (a) Notwithstanding the
provisions of Section 1.1(g), (l) and (m) or Section 1.2, Mortgagee
is not undertaking the performance of (i) any obligations under the Leases; or (ii) any obligations
with respect to such agreements, contracts, certificates, instruments, franchises, permits,
trademarks, licenses and other documents.



          (b) By accepting or approving anything required to be observed, performed or fulfilled or to
be given to Mortgagee pursuant to this Security Instrument, the Loan Agreement, the Note or the
other Loan Documents, including without limitation, any officer’s certificate, balance sheet,
statement of profit and loss or other financial statement, survey, appraisal, or insurance policy,
Mortgagee shall not be deemed to have warranted, consented to, or affirmed the sufficiency, the
legality or effectiveness of same, and such acceptance or approval thereof shall not constitute any
warranty or affirmation with respect thereto by Mortgagee.




     Section 5.4 Reliance. Mortgagors recognize and acknowledge that in accepting the
Note, the Loan Agreement, this Security Instrument and the other Loan Documents, (i) Mortgagee is
expressly and primarily relying on the truth and accuracy of the warranties and representations set
forth in Article 6 of the Loan Agreement and Articles 3 and 4 hereof
without any obligation to investigate the Property and notwithstanding any investigation of the
Property by Mortgagee; (ii) that such reliance existed on the part of Mortgagee prior to the date
hereof; (iii) that the warranties and representations are a material inducement to Mortgagee in
accepting the Note, the Loan Agreement, this Security Instrument and the other Loan Documents; and
that Mortgagee would not be willing to make the Loan and accept this Security Instrument in the
absence of the warranties and representations as set forth in Article 6 of the Loan
Agreement and Articles 3 and 4 hereof.



ARTICLE 6 — FURTHER ASSURANCES




     Section 6.1 Recording of Security Instrument, etc. Mortgagors forthwith upon the
execution and delivery of this Security Instrument and thereafter, from time to time, will cause
this Security Instrument and any of the other Loan Documents creating a lien or security interest
or evidencing the lien hereof upon the Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be required by any present
or future law in order to publish notice of and fully to protect and perfect the lien or security
interest hereof upon, and the interest of Mortgagee in, the Property.                     Borrowers will pay
all taxes, filing, registration or recording fees, and all expenses incident to the preparation,
execution, acknowledgment and/or recording of the Note, the Loan Agreement, this Security
Instrument, the other Loan Documents, and any instrument of further assurance, and any modification
or amendment of the foregoing documents, and all federal, state, county and municipal taxes,
duties, imposts, assessments and charges arising out of or in connection with the execution and
delivery of this Security Instrument, the other Loan Documents, or any instrument of further
assurance, and any modification or amendment of the foregoing documents, except where prohibited by
law so to do.



15









 





     Section 6.2 Further Acts, etc. Mortgagors will, at the cost of Mortgagors, and
without expense to Mortgagee, do, execute, acknowledge and deliver all and every such further acts,
deeds, conveyances, deeds of trust, mortgages, assignments, notices of assignments, transfers and
assurances as Mortgagee shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Mortgagee the Property and rights hereby
deeded, mortgaged, granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Mortgagors may be or may hereafter
become bound to convey or assign to Mortgagee, or for carrying out the intention or facilitating
the performance of the terms of this Security Instrument or for filing, registering or recording
this Security Instrument, or for complying with all Legal Requirements. Mortgagors, on demand,
will execute and deliver and hereby authorize Mortgagee, following ten (10) days’ notice to the
applicable Mortgagor(s), to execute in the name of such Mortgagor(s) or without the signature of
such Mortgagor(s) to the extent Mortgagee may lawfully do so, one or more financing statements,
chattel mortgages or other instruments, to evidence more effectively the security interest of
Mortgagee in the Property or any UCC Collateral. Mortgagors grant to Mortgagee an irrevocable
power of attorney coupled with an interest for the purpose of, from and after an Event of Default
(as defined in the Loan Agreement), exercising and perfecting any and all rights and remedies
available to Mortgagee at law and in equity, including, without limitation, such rights and
remedies available to Mortgagee pursuant to this Section 6.2.



     Section 6.3 Changes in Tax, Debt Credit and Documentary Stamp Laws.



          (a) If any law is enacted or adopted or amended after the date of this Security Instrument
which deducts the amount of the Obligations from the value of the Property for the purpose of
taxation or which imposes a tax, either directly or indirectly, on the amount of the Obligations or
Mortgagee’s interest in the Property,                     Borrowers will pay the tax, with interest and
penalties thereon, if any. If Mortgagee is advised by counsel chosen by it that the payment of tax
by                     Borrowers would be unlawful or taxable to Mortgagee or unenforceable or provide the
basis for a defense of usury, then Mortgagee shall have the option, exercisable by written notice
of not less than ninety (90) days to declare the Obligations immediately due and payable.




          (b) Mortgagors will not claim or demand or be entitled to any credit or credits on account of
the Obligations for any part of the Taxes or Other Charges assessed against the Property, or any
part thereof, and no deduction shall otherwise be made or claimed from the assessed value of the
Property, or any part thereof, for real estate tax purposes by reason of this Security Instrument
or the Obligations. If such claim, credit or deduction shall be required by law, Mortgagee shall
have the option, exercisable by written notice of not less than ninety (90) days, to declare the
Obligations immediately due and payable.




          (c) If at any time the United States of America, any State thereof or any subdivision of any
such State shall require revenue or other stamps to be affixed to the Note, the Loan Agreement,
this Security Instrument, or any of the other Loan Documents or impose any other tax or charge on
the same, Mortgagors will pay for the same, with interest and penalties thereon, if any.




     Section 6.4 Replacement Documents. Upon receipt of an affidavit of an officer of
Mortgagee as to the loss, theft, destruction or mutilation of the Note or any other Loan Document
which is not of public record, and, in the case of any such mutilation, upon surrender and
cancellation of such Note or other Loan Documents,                     Borrowers will issue, in lieu



16









 




thereof, a replacement Note or other Loan Documents, dated the date of such lost, stolen,
destroyed or mutilated Note or other Loan Documents in the same principal amount thereof and
containing substantially identical terms.




     Section 6.5 Performance at Mortgagors’ Expense. Mortgagors acknowledge and confirm
that Mortgagee shall impose certain administrative processing and/or commitment fees in connection
with (a) the extension, renewal, modification, amendment and termination of the Loan, (b) the
release or substitution of collateral therefor, (c) obtaining certain consents, waivers and
approvals with respect to the Property, or (d) the review of any Lease or proposed Lease or the
preparation or review of any subordination, non-disturbance agreement (the occurrence of any of the
above shall be called an “Event”). Mortgagors further acknowledge and confirm that Mortgagors
shall be responsible for the payment of all costs of reappraisal of the Property or any part
thereof, whether required by law, regulation, Mortgagee or any governmental or quasi-governmental
authority. Mortgagors hereby acknowledge and agree to pay, immediately, with or without demand,
all such fees (as the same may be increased or decreased from time to time), and any additional
fees of a similar type or nature which may be imposed by Mortgagee from time to time, upon the
occurrence of any Event. Wherever it is provided for herein that Mortgagors pay any costs and
expenses, such costs and expenses shall include, but not be limited to, all reasonable legal fees
and disbursements of Mortgagee (excluding legal fees for in-house staff), whether with respect to
retained firms or otherwise.



     Section 6.6 Legal Fees for Enforcement. (a) Mortgagors shall pay all reasonable legal
fees incurred by Mortgagee in connection with (i) the preparation of the Loan Agreement, the Note,
this Security Instrument and the other Loan Documents and (ii) the items set forth in Section
6.5 above, and (b) Mortgagors shall pay to Mortgagee on demand any and all expenses, including
legal expenses and reasonable attorneys’ fees, incurred or paid by Mortgagee in protecting its
interest in the Property or in collecting any amount payable hereunder or in enforcing its rights
hereunder with respect to the Property (including commencing any foreclosure action), whether or
not any legal proceeding is commenced hereunder or thereunder, together with interest thereon at
the Default Rate from the date paid or incurred by Mortgagee until such expenses are paid by
Mortgagors.



ARTICLE 7 — DUE ON SALE/ENCUMBRANCE




     Section 7.1 Mortgagee Reliance. Mortgagors acknowledge that Mortgagee has examined
and relied on the experience of Mortgagors and its partners, members, principals and (if any
Mortgagor is a trust) beneficial owners in owning and operating properties such as the Property in
agreeing to make the Loan, and will continue to rely on Mortgagors’ ownership of the Property as a
means of maintaining the value of the Property as security for payment and performance of the
Obligations. Mortgagors acknowledge that Mortgagee has a valid interest in maintaining the value
of the Property so as to ensure that, should Mortgagors default in the payment and performance of
the Obligations, Mortgagee can recover the Obligations by a sale of the Property.



     Section 7.2 No Sale/Encumbrance. No Mortgagor nor any Restricted Party shall Transfer
the Property or any part thereof or any interest therein or permit or suffer the Property or any
part thereof or any interest therein to be Transferred other than as expressly permitted pursuant
to the terms of the Loan Agreement.



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ARTICLE 8 — PREPAYMENT




     Section 8.1 Prepayment. The Obligations may not be prepaid in whole or in part except
in accordance with the express terms and conditions of the Loan Agreement.



ARTICLE 9 — RIGHTS AND REMEDIES




     Section 9.1 Remedies. Upon the occurrence and during the continuance of any Event of
Default, Mortgagors agree that Mortgagee may take such action, without notice or demand, as it
deems advisable to protect and enforce its rights against one or more of the Mortgagors and in and
to the Property (or any portion thereof), including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in such order as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting the other rights
and remedies of Mortgagee:



          (a) declare the entire unpaid Obligations to be immediately due and payable; provided,
however, that notwithstanding the foregoing, if and to the extent the Loan Agreement
provides for automatic acceleration of the Loan upon the occurrence of certain Events of Default,
such provisions with respect to automatic acceleration shall govern and control, without any
further notice, demand or any other action by Mortgagee or any other Person;




          (b) institute proceedings, judicial or otherwise, for the complete foreclosure of this
Security Instrument under any applicable provision of law in which case the Property or any
interest therein (or any portion thereof) may be sold for cash or upon credit in one or more
parcels or in several interests or portions and in any order or manner;




          (c) with or without entry, to the extent permitted and pursuant to the procedures provided by
Law, institute proceedings for the partial foreclosure of this Security Instrument for the portion
of the Obligations then due and payable, subject to the continuing lien and security interest of
this Security Instrument for the balance of the Obligations not then due, unimpaired and without
loss of priority;




          (d) sell for cash or upon credit the Property or any part thereof and all estate, claim,
demand, right, title and interest of one or more of the Mortgagors therein and rights of redemption
thereof, pursuant to power of sale or otherwise, at one or more sales, in one or more parcels, at
such time and place, upon such terms and after such notice thereof as may be required or permitted
by Law;




          (e) institute an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein, in the Note, the Loan Agreement, or in the other
Loan Documents;




          (f) recover judgment on the Note either before, during or after any proceedings for the
enforcement of this Security Instrument or the other Loan Documents;




          (g) apply for the appointment of a receiver, trustee, liquidator or conservator of the
Property, without notice and without regard for the adequacy of the security for the Obligations
and without regard for the solvency of any of the Mortgagors, any Guarantor or of any Person liable
for the payment of the Obligations;







18









 








          (h) subject to any Law, the license granted to Mortgagors under Section 1.2 hereof
shall automatically be revoked, and Mortgagee may enter into or upon the Property, either
personally or by its agents, nominees or attorneys and dispossess one or more of the Mortgagors and
its agents and servants therefrom, without liability for trespass, damages or otherwise and exclude
one or more of the Mortgagors and their respective agents, licensees or servants wholly therefrom,
and take possession of all books, records and accounts relating thereto, and each Mortgagor agrees
to surrender possession of the Property and of such books, records and accounts to Mortgagee upon
demand, and thereupon Mortgagee may (i) use, operate, manage, control, insure, maintain, repair,
restore and otherwise deal with all and every part of the Property and conduct business thereon;
(ii) complete any construction on the Property in such manner and form as Mortgagee deems
advisable; (iii) make reasonably necessary alterations, additions, renewals, replacements and
improvements to or on the Property to preserve the same good condition; (iv) exercise all rights
and powers of each of the Mortgagors with respect to the Property, whether in the name of such
Mortgagor(s) or otherwise, including, without limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents of the
Property and every part thereof; (v) require one or more of the Mortgagors to pay monthly in
advance to Mortgagee, or any receiver appointed to collect the Rents, the fair and reasonable
rental value for the use and occupation of such part of the Property as may be occupied by
Mortgagors; (vi) require one or more of the Mortgagors to vacate and surrender possession of the
Property to Mortgagee or to such receiver and, in default thereof, Mortgagors may be evicted by
summary proceedings or otherwise; and (vii) except as otherwise expressly provided for in the Loan
Agreement, apply the receipts from the Property to the payment of the Obligations, in such order,
priority and proportions as Mortgagee shall deem appropriate in its sole discretion after deducting
therefrom all expenses (including reasonable attorneys’ fees) incurred in connection with the
aforesaid operations and all amounts necessary to pay the Taxes, Other Charges, Insurance Premiums
and other expenses in connection with the Property, as well as just and reasonable compensation for
the services of Mortgagee, its outside counsel, agents and, to the extent hired or engaged
expressly and solely for this purpose, its employees;




          (i) exercise any and all rights and remedies granted to a secured party upon default under the
Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the right
to take possession of any UCC Collateral (including, without limitation, the Personal Property) or
any part thereof, and to take such other measures as Mortgagee may deem necessary for the care,
protection and preservation of the UCC Collateral (including, without limitation, the Personal
Property), and (ii) request one or more of the Mortgagors at its respective expense to assemble the
UCC Collateral, including without limitation, the Personal Property, and make it available to
Mortgagee at a convenient place acceptable to Mortgagee. Any notice of sale, disposition or other
intended action by Mortgagee with respect to the UCC Collateral, including, without limitation, the
Personal Property, sent to Mortgagors in accordance with the provisions hereof at least five (5)
days prior to such action, shall constitute commercially reasonable notice to Mortgagors;




          (j) apply any sums then deposited in the Accounts and any other sums held in escrow or
otherwise by Mortgagee in accordance with the terms of this Security Instrument, the Loan
Agreement, or any other Loan Documents to the payment of the following items in any order in its
sole discretion:





          (i) Taxes and Other Charges;



19









 






          (ii) Insurance Premiums;




          (iii) interest on the unpaid principal balance of the Note;




          (iv) amortization of the unpaid principal balance of the Note; or




          (v) all other sums payable pursuant to the Note, the Loan Agreement, this Security
Instrument and the other Loan Documents, including, without limitation, advances made by
Mortgagee pursuant to the terms of this Security Instrument;



          (k) surrender the Policies, collect the unearned Insurance Premiums and apply such sums as a
credit on the Obligations in such priority and proportion as Mortgagee in its discretion shall deem
proper, and in connection therewith, Mortgagors hereby appoint Mortgagee as agent and
attorney-in-fact (which is coupled with an interest and is therefore irrevocable) for Mortgagors to
collect such Insurance Premiums;




          (l) apply the undisbursed balance of any Net Proceeds Deficiency deposit, together with
interest thereon, to the payment of the Obligations in such order, priority and proportions as
Mortgagee shall deem to be appropriate in its discretion;




          (m) foreclose by power of sale or otherwise and apply the proceeds of any recovery to the
Obligations in accordance with Section 9.2 or to any deficiency under this Security
Instrument;




          (n) exercise all rights and remedies under any Causes of Action, whether before or after any
sale of the Property by foreclosure, power of sale, or otherwise and apply the proceeds of any
recovery to the Obligations in accordance with Section 9.2 or to any deficiency under this
Security Instrument; or




          (o) pursue such other remedies as Mortgagee may have under Law.



In the event of a sale, by foreclosure, power of sale, or otherwise, of less than all of the
Property, this Security Instrument shall continue as a lien and security interest on the remaining
portion of the Property unimpaired and without loss of priority.




     Section 9.2 Application of Proceeds. Except as otherwise expressly set forth in the
Loan Agreement, the purchase money, proceeds and avails of any disposition of the Property, or any
part thereof, or any other sums collected by Mortgagee pursuant to the Note, this Security
Instrument, the Loan Agreement, or the other Loan Documents, may be applied by Mortgagee to the
payment of the Obligations in such priority and proportions as Mortgagee in its discretion shall
deem proper.



     Section 9.3 Right to Cure Defaults. Upon the occurrence and during the continuance of
any Default or Event of Default, Mortgagee may, but without any obligation to do so and without
notice to or demand on Mortgagors and without releasing Mortgagors from any obligation hereunder,
cure any default of any of the Mortgagors’ obligation under the Loan Documents in such manner and
to such extent as Mortgagee may deem necessary to protect the security hereof. Mortgagee is
authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action
or proceeding to protect its interest in the Property or to foreclose this Security Instrument or
collect the Obligations. The cost and expense of any cure hereunder



20









 




(including reasonable attorneys’ fees to the extent permitted by Law), with interest as
provided below, shall constitute a portion of the Obligations and shall be due and payable to
Mortgagee upon demand. All such costs and expenses incurred by Mortgagee in remedying such Default
or Event of Default shall bear interest at the Default Rate for the period after notice from
Mortgagee that such cost or expense was incurred to the date of payment to Mortgagee and shall be
deemed to constitute a portion of the Obligations and be secured by this Security Instrument and
the other Loan Documents and shall be immediately due and payable upon demand by Mortgagee
therefor.




     Section 9.4 Actions and Proceedings. Mortgagee has the right to appear in and defend
any action or proceeding brought with respect to the Property and, after the occurrence and during
the continuance of an Event of Default, to bring any action or proceeding, in the name and on
behalf of any of the Mortgagors, which Mortgagee, in its discretion, decides should be brought to
protect its interest in the Property.



     Section 9.5 Recovery of Sums Required To Be Paid. Mortgagee shall have the right from
time to time to take action to recover any sum or sums which constitute a part of the Obligations
as the same become due, without regard to whether or not the balance of the Obligations shall be
due, and without prejudice to the right of Mortgagee thereafter to bring an action of foreclosure,
or any other action, for a Default or Defaults by one or more of the Mortgagors existing at the
time such earlier action was commenced.



     Section 9.6 Other Rights, etc. (a) The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of this Security
Instrument. Mortgagors shall not be relieved of Mortgagors’ obligations hereunder by reason of (i)
the failure of Mortgagee to comply with any request of any Mortgagor or any Guarantor to take any
action to foreclose this Security Instrument or otherwise enforce any of the provisions hereof or
of the Note or the other Loan Documents, (ii) the release, regardless of consideration, of the
whole or any part of the Property, or of any person liable for the Obligations or any portion
thereof, or (iii) any agreement or stipulation by Mortgagee extending the time of payment or
otherwise modifying or supplementing the terms of the Note, the Loan Agreement, this Security
Instrument or the other Loan Documents.



          (b) It is agreed that the risk of loss or damage to the Property is on Mortgagors, and
Mortgagee shall have no liability whatsoever for decline in value of the Property, for failure to
maintain the Policies, or for failure to determine whether insurance in force is adequate as to the
amount of risks insured. Possession by Mortgagee shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to the Property or any other
UCC Collateral not in Mortgagee’s possession.




          (c) Mortgagee may resort for the payment of the Obligations to any other security held by
Mortgagee in such order and manner as Mortgagee, in its discretion, may elect. Mortgagee may take
action to recover the Obligations, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Mortgagee thereafter to foreclose this Security Instrument. The
rights of Mortgagee under this Security Instrument shall be separate, distinct and cumulative and
none shall be given effect to the exclusion of the others. No act of Mortgagee shall be construed
as an election to proceed under any one provision herein to the exclusion of any other provision.
Mortgagee shall not be limited exclusively to the rights and remedies herein stated but shall be
entitled to every right and remedy now or hereafter afforded at law or in equity.







21









 








     Section 9.7 Right to Release Any Portion of the Property. Mortgagee may release any
portion of the Property for such consideration as Mortgagee may require without, as to the
remainder of the Property, in any way impairing or affecting the lien or priority of this Security
Instrument, or improving the position of any subordinate lienholder with respect thereto, except to
the extent that the obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Mortgagee for such release, and may accept by assignment, pledge
or otherwise any other property in place thereof as Mortgagee may require without being accountable
for so doing to any other lienholder. This Security Instrument shall continue as a lien and
security interest in the remaining portion of the Property.



     Section 9.8 Violation of Laws. Subject to Section 7.1(b) of the Loan Agreement, if
the Property is not in compliance with Legal Requirements, Mortgagee may impose reasonable
additional requirements upon Mortgagors in connection herewith including, without limitation,
monetary reserves or financial equivalents.



     Section 9.9 Right of Entry. Subject to the terms of the Loan Agreement, Mortgagee and
its agents shall have the right to enter and inspect the Property at all reasonable times.



     Section 9.10 Subrogation. If any or all of the proceeds of the Note have been used to
extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the
extent of the funds so used, to the extent permitted by Law, Mortgagee shall be subrogated to all
of the rights, claims, liens, titles, and interests existing against the Property heretofore held
by, or in favor of, the holder of such indebtedness and such former rights, claims, liens, titles,
and interests, if any, are not waived but rather are continued in full force and effect in favor of
Mortgagee and are merged with the lien and security interest created herein as cumulative security
for the repayment of the Obligations, and the performance and discharge of the Obligations.



     Section 9.11 Additional Provisions. With respect to the Personal Property, until the
Obligations are paid and performed in full or this Security Instrument is otherwise released by
written instrument executed by Mortgagee and authorized to be recorded in the applicable public
records of the jurisdiction in which the Property is located, Mortgagee is hereby irrevocably
appointed the true and lawful attorney of Mortgagors (coupled with an interest), in Mortgagors’
names and stead, to, upon and during the continuance of any Event of Default, make all necessary
conveyances, assignments, transfers and deliveries of the Personal Property, and for that purpose
Mortgagee may execute all necessary instruments of conveyance, assignment, transfer and delivery,
and may substitute one or more Persons with such power, Mortgagors hereby ratifying and confirming
all that the said attorney or such substitute or substitutes shall lawfully do by virtue hereof.
Notwithstanding the foregoing, Mortgagors, if so requested by Mortgagee, shall ratify and confirm
any such sale or sales by executing and delivering to Mortgagee or to such purchaser or purchasers
all such instruments as may be advisable, in the judgment of Mortgagee, for such purpose, and as
may be designated in such request. To the extent permitted by Laws, any such sale or sales made
under or by virtue of this Section 9.11 shall operate to divest all the estate, right,
title, interest, claim and demand whatsoever, whether at law, or in equity, of Mortgagors in and to
the properties and rights so sold, and shall be a perpetual bar both at law and in equity against
Mortgagors and against any and all Persons claiming or who may claim the same, or any part thereof,
from, through or under Mortgagors. Upon any sale made under or by virtue of this Section
9.11, Mortgagee may, to the extent permitted by Laws, bid for and acquire the Property or any
part thereof and in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the Obligations secured



22









 




hereby the net sales price after deducting therefrom the expenses of the sale and the cost of
the auction and any other sums which Mortgagee is authorized to deduct by Laws or under this
Security Instrument. At any sale pursuant to this Section 9.11, whether made under power
herein granted, under or as otherwise authorized by applicable Laws or pursuant to Legal
Requirements, or by virtue of any judicial proceeding or any other legal right, remedy or recourse,
it shall not be necessary for Mortgagee to be physically present, or to have constructive
possession of, the Property, and the title to and right of possession of any such property shall
pass to the purchaser thereof as completely as if the same had been actually presented and
delivered to the purchaser at such sale.




ARTICLE 10 — INDEMNIFICATIONS




     Section 10.1 General Indemnification. Mortgagors shall, at their sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnitees from and against any
and all losses, claims, damages, liabilities and related expenses (including the reasonable fees,
charges and disbursements of any counsel for an Indemnitee) (collectively, “Losses”) imposed upon
or incurred by or asserted against any Indemnitees and directly or indirectly arising out of or in
any way relating to any one or more of the following: (a) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Property or any part thereof
or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(b) any use, nonuse or condition in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(c) performance of any labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof; (d) any failure of the Property to be in compliance
with any Legal Requirements; (e) any and all claims and demands whatsoever which may be asserted
against Mortgagee by reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants, or agreements contained in any Lease; or (f) the payment of
any commission, charge or brokerage fee to anyone which may be payable in connection with the
funding of the Loan evidenced by the Note and secured by this Security Instrument provided
that such indemnity shall not, as to any Indemnitee, be available to the extent that such Losses
(i) are determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or (ii) result from a
claim brought by any Mortgagor or other Loan Party against an Indemnitee for breach in bad faith of
such Indemnitee’s obligations hereunder or under any other Loan Document, if any Mortgagor or such
other Loan Party has obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction. Any amounts payable to Mortgagee by reason of the
application of this Section 10.1 shall become immediately due and payable and shall bear
interest at the Default Rate from the date loss or damage is sustained by Mortgagee until paid.



     Section 10.2 Mortgage and/or Intangible Tax. Mortgagors shall, at their sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnitees from and against any
and all Losses upon or incurred by or asserted against any Indemnitees and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording of this Security
Instrument, the Loan Agreement, the Note or any other Loan Document.



     Section 10.3 Duty to Defend; Legal Fees and other Fees and Expenses. Upon written
request by any Indemnitee, Mortgagors shall defend such Indemnitee (if requested by any Indemnitee,
in the name of the Indemnitee) by attorneys and other professionals reasonably approved by the
Indemnitee. Notwithstanding the foregoing, any Indemnitee may, in its sole



23









 




discretion, engage its own attorneys and other professional to defend or assist it, and, at
the option of the Indemnitee, its attorneys shall act as co-counsel in connection with the
resolution of any claim or proceeding; provided, however, that upon and during the
continuance of any Event of Default under the Note, this Security Agreement or any of the other
Loan Documents, the attorneys of Indemnitee shall control the resolution of any claim or
proceeding. Upon demand, Mortgagors shall pay or, in the sole discretion of the Indemnitees,
reimburse, the Indemnitees for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in connection therewith.




     Section 10.4 Environmental Indemnity; Environmental Covenants.



          (a) Simultaneously with this Security Instrument, Borrowers and Guarantor have executed and
delivered the Environmental Indemnity.




          (b) Certain Loan Parties have provided representations, warranties and covenants regarding
environmental matters set forth either in the Loan Agreement or in the Environmental Indemnity, and
Mortgagors shall comply with the aforesaid covenants regarding environmental matters.




     Section 10.5 Mortgagee’s Rights. Mortgagee and any other Person designated by
Mortgagee, including, but not limited to, any representative of a Governmental Authority, and any
environmental consultant, and any receiver appointed by any court of competent jurisdiction, shall
have the right, but not the obligation, to enter upon the Property at all reasonable times and on
not less than one (1) Business Day advance notice to Mortgagors to assess any and all aspects of
the environmental condition of the Property and its use, including, but not limited to, conducting
any environmental assessment or audit (the scope of which shall be determined in Mortgagee’s sole
(but reasonable) discretion) and taking samples of soil, groundwater or other water, air, or
building materials, and conducting other invasive testing. Each Mortgagor shall cooperate with and
provide access to Mortgagee and any such Person designated by Mortgagee. Mortgagee agrees that it
shall not exercise its rights under this Section 10.5 more frequently than once per
calendar year, unless Mortgagee reasonably believes that the Property is not in full compliance
with all Environmental Laws.



ARTICLE 11 — WAIVERS




     Section 11.1 Waiver of Counterclaim. Each Mortgagor hereby waives the right to assert
a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding
brought against it by Mortgagee arising out of or in any way connected with this Security
Instrument, the Note, the Loan Agreement, any of the other Loan Documents, or the Obligations.



     Section 11.2 Marshalling and Other Matters. Each Mortgagor hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay, extension, reinstatement
and redemption laws now or hereafter in force and all rights of marshalling in the event of any
sale hereunder of the Property or any part thereof or any interest therein. Further, each
Mortgagor hereby expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of this Security Instrument on behalf of such Mortgagor, and on behalf of
each Person acquiring any interest in or title to the Property subsequent to the date of this
Security Instrument and on behalf of all persons to the extent permitted by Legal Requirements.



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     Section 11.3 Waiver of Notice. Mortgagors shall not be entitled to any notices of any
nature whatsoever from Mortgagee except (a) with respect to matters for which this Security
Instrument, the Loan Agreement or any other Loan Document, specifically and expressly provides for
the giving of notice by Mortgagee to Mortgagors, and (b) with respect to matters for which
Mortgagee is required by any Law to give notice, and except as provided above in this Section
11.3, each Mortgagor hereby expressly waives the right to receive any notice from Mortgagee
with respect to any matter for which this Security Instrument does not specifically and expressly
provide for the giving of notice by Mortgagee to Mortgagor.



     Section 11.4 Waiver of Statute of Limitations. Each Mortgagor hereby expressly waives
and releases to the fullest extent permitted by Law, the pleading of any statute of limitations as
a defense to payment or performance of the Obligations.



     Section 11.5 Sole Discretion of Mortgagee. Wherever pursuant to this Security
Instrument (a) Mortgagee exercises any right given to it to approve or disapprove, (b) any
arrangement or term is to be satisfactory to Mortgagee, or (c) any other decision or determination
is to be made by Mortgagee, the decision of Mortgagee to approve or disapprove, all decisions that
arrangements or terms are satisfactory or not satisfactory and all other decisions and
determinations made by Mortgagee, shall be in the sole and absolute discretion of Mortgagee, except
as may be otherwise expressly and specifically provided herein or in any of the other Loan
Documents.



     Section 11.6 Waiver of Trial by Jury. EACH MORTGAGOR HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT OR
ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH MORTGAGOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.



     Section 11.7 Waiver of Foreclosure Defense. Each Mortgagor hereby waives any defense
such Mortgagor might assert or have by reason of Mortgagee’s failure to make any tenant or lessee
of the Property a party defendant in any foreclosure proceeding or action instituted by Mortgagee.



     Section 11.8 Mortgagors’ Knowledge. EACH MORTGAGOR SPECIFICALLY ACKNOWLEDGES AND
AGREES (a) THAT IT HAS A DUTY TO READ THIS SECURITY INSTRUMENT AND THAT IT IS CHARGED WITH NOTICE
AND KNOWLEDGE OF THE TERMS HEREOF, (b) THAT IT HAS IN FACT READ THIS SECURITY INSTRUMENT AND IS
FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS
SECURITY INSTRUMENT, (c) THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS SECURITY INSTRUMENT AND HAS RECEIVED THE ADVICE OF
SUCH COUNSEL IN CONNECTION WITH ENTERING INTO THIS SECURITY INSTRUMENT, AND (d) THAT IT RECOGNIZES
THAT CERTAIN OF THE TERMS OF THIS SECURITY INSTRUMENT PROVIDE FOR (i) CERTAIN WAIVERS AND FOR (ii)
THE ASSUMPTION BY ONE PARTY OF, AND/OR



25









 




RELEASE OF THE OTHER PARTY FROM, CERTAIN LIABILITIES THAT SUCH PARTY MIGHT OTHERWISE BE
RESPONSIBLE FOR UNDER APPLICABLE LAWS. EACH MORTGAGOR FURTHER AGREES AND COVENANTS THAT IT WILL
NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY SUCH PROVISIONS OF THIS SECURITY INSTRUMENT ON
THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT SUCH PROVISIONS ARE
NOT “CONSPICUOUS.”




     Section 11.9 Usury Savings. It is the intent of Mortgagee and Mortgagors in the
execution of the Loan Agreement and the other Loan Documents and any other written or oral
agreement by Mortgagors in favor of Mortgagee to contract in strict compliance with applicable
usury Laws. In furtherance thereof, Mortgagee and Mortgagors stipulate and agree that none of the
terms and provisions contained in the Loan Agreement and the other Loan Documents, or in any other
written or oral agreement by Mortgagors, any other Borrower or any other party to any of the other
Loan Documents in favor of Mortgagee, shall ever be construed to create a contract to pay for the
use, forbearance or detention of money, or interest at a rate in excess of the maximum interest
rate permitted to be charged by applicable Laws; that neither Mortgagors nor any guarantors,
endorsers or other Persons now or hereafter becoming liable for payment of the Obligations are
agreeing to pay at a rate in excess of the maximum interest that may be lawfully charged under
applicable Laws; and that the provisions of this subsection shall control over all other provisions
of the Loan Agreement and the other Loan Documents or any other oral or written agreements which
may be in apparent conflict herewith. Mortgagee expressly disavows any intention to charge or
collect excessive unearned interest or finance charges in the event the maturity of the Loan or the
remaining Obligations are accelerated. If the maturity of the Loan or the remaining Obligations
shall be accelerated for any reason or if the principal of the Loan or the remaining Obligations
are paid prior to the end of the term of the Loan or the Obligations, as applicable, and as a
result thereof the interest received for the actual period of existence of the Loan or the
Obligations, as applicable, exceeds the applicable maximum lawful rate, Mortgagee shall, at
Mortgagee’s option, either refund to                     Borrowers the amount of such excess or credit the
amount of such excess against the principal balance of the Obligations then outstanding and thereby
shall render inapplicable any and all penalties of any kind provided by applicable Laws as a result
of such excess interest. If Mortgagee shall contract for, charge or receive any amount or amounts
and/or any other thing of value which are determined to constitute interest which would increase
the effective interest rate on the Loan or the Obligations to a rate in excess of that permitted to
be charged by applicable Laws, an amount equal to interest in excess of the lawful rate shall, upon
such determination, at the option of Mortgagee, be either immediately returned to
                    Borrowers or credited against the Obligations then outstanding, in which event any and
all penalties of any kind under applicable Laws as a result of such excess interest shall be
inapplicable.



ARTICLE 12 — EXCULPATION




     Section 12.1 Exculpation. Notwithstanding anything to the contrary contained in this
Security Instrument, the liability of any party to this Security Instrument to pay the Obligations
and for the performance of the other agreements, covenants and obligations contained herein and in
the Note, the Loan Agreement and the other Loan Documents shall be limited as set forth in
Section 12.9 of the Loan Agreement.



26









 





ARTICLE 13 — SUBMISSION TO JURISDICTION




     Section 13.1 Submission to Jurisdiction. With respect to any claim or action arising
hereunder or under the Note or the other Loan Documents, each of the Mortgagors (a) irrevocably
submits to the nonexclusive jurisdiction of the courts of the State of New York located in the
Borough of Manhattan in New York, New York and the United States District Court located in the
Borough of Manhattan in New York, New York, and appellate courts from any thereof, and (b)
irrevocably waives any objection which it may have at any time to the laying of venue of any suit,
action or proceeding arising out of or relating to this Security Instrument brought in any such
court, irrevocably waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Nothing in this Security Instrument will be
deemed to preclude Mortgagee from bringing an action or proceeding with respect hereto in any other
jurisdiction.



ARTICLE 14 — APPLICABLE LAW




     Section 14.1 CHOICE OF LAW. THIS SECURITY INSTRUMENT SHALL BE DEEMED TO BE A CONTRACT
ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED,
CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK;
PROVIDED, HOWEVER, THAT WITH RESPECT TO THE CREATION, PERFECTION, PRIORITY AND
ENFORCEMENT OF THE LIEN OF THIS SECURITY INSTRUMENT, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS,
AND THE TRANSFER OF ANY INTEREST IN REAL PROPERTY, THE LAWS OF THE STATE WHERE THE LAND IS LOCATED
SHALL APPLY.



     Section 14.2 Provisions Subject to Applicable Law. All rights, powers and remedies
provided in this Security Instrument may be exercised only to the extent that the exercise thereof
does not violate any applicable provisions of Law and are intended to be limited to the extent
necessary so that they will not render this Security Instrument invalid, unenforceable or not
entitled to be recorded, registered or filed under the provisions of any Legal Requirements.



ARTICLE 15 — DEFINITIONS




     Section 15.1 General Definitions. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this Security Instrument may
be used interchangeably in singular or plural form and the word “Mortgagor” shall mean “each
Mortgagor and any subsequent owner or owners of the Property or any part thereof or any interest
therein,” the word “Mortgagee” shall mean “Mortgagee and any subsequent holder of the Note,” the
word “Note” shall mean “the Note and any other evidence of indebtedness secured by this Security
Instrument,” the word “Property” shall include any portion of the Property and any interest of any
Mortgagor therein, and the phrases “legal fees”, “attorneys’ fees” and “counsel fees” shall include
any and all attorneys’, paralegal and law clerk fees and disbursements, including, but not limited
to, fees and disbursements at the pre-trial, trial and appellate levels incurred or paid by
Mortgagee in protecting its interest in the Property, the Leases and the Rents and enforcing its
rights hereunder.



     Section 15.2 Headings, etc. The headings and captions of various Articles and
Sections of this Security Instrument are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the provisions hereof.



27









 





ARTICLE 16 — MISCELLANEOUS PROVISIONS




     Section 16.1 No Oral Change. This Security Instrument and any provisions hereof may
not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act
or failure to act on the part of Mortgagors or Mortgagee, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.



     Section 16.2 Intentionally Deleted.



     Section 16.3 Liability. If Mortgagors consists of more than one Person, the
obligations and liabilities of each such Person hereunder shall be joint and several. This
Security Instrument shall be binding upon and inure to the benefit of Mortgagors and Mortgagee and
their respective successors and assigns forever.



     Section 16.4 Inapplicable Provisions. If any term, covenant or condition of this
Security Instrument or any other Loan Document is held to be invalid, illegal or unenforceable in
any respect, the Note and this Security Instrument or the other Loan Documents, as the case may be,
shall be construed without such provision.



     Section 16.5 Duplicate Originals; Counterparts. This Security Instrument may be
executed in any number of duplicate originals and each duplicate original shall be deemed to be an
original. This Security Instrument may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party hereto to execute this Security Instrument,
or any counterpart hereof, shall not relieve the other signatories from their obligations
hereunder.



     Section 16.6 Number and Gender. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and the singular form
of nouns and pronouns shall include the plural and vice versa.



     Section 16.7 Notice. All notices required or permitted under this Security Instrument
shall be given and be effective in accordance with Section 12.2 of the Loan Agreement.



ARTICLE 17 — CROSS-COLLATERALIZATION




     Section 17.1 Cross-Collateralization. Mortgagors acknowledge that the Obligations are
secured by this Security Instrument together with those additional mortgages, deeds of trust and
deeds to secure debt (collectively, the “Other Security Instruments”) given by the other Borrowers
and/or certain Affiliates of Mortgagors to Mortgagee, together with their respective Assignments of
Leases and other Loan Documents securing or evidencing the Obligations, and encumbering the other
Collateral Properties, all as more specifically set forth in the Loan Agreement. Upon the
occurrence and during the continuance of an Event of Default, Mortgagee shall have the right to
institute a proceeding or proceedings for the total or partial foreclosure of this Security
Instrument and any or all of the Other Security Instruments whether by court action, power of sale
or otherwise, under any applicable provision of Law, for all of the Obligations or the portion of
the Obligations allocated to the Property in the Loan Agreement, and the lien and the security
interest created by the Other Security Instruments shall continue in full force and effect without
loss of priority as a lien and security interest securing the payment of that portion of the
Obligations then due and payable but still outstanding. Mortgagors acknowledge and



28









 




agree that the Property and the other Collateral Properties are located in one or more States
and counties, and therefore Mortgagee shall be permitted to enforce payment of the Obligations and
the performance of any term, covenant or condition of the Note, this Security Instrument, the Loan
Documents or the Other Security Instruments and exercise any and all rights and remedies under the
Note, this Security Instrument, the other Loan Documents or the Other Security Instruments, or as
provided by Law or at equity, by one or more proceedings, whether contemporaneous, consecutive or
both, to be determined by Mortgagee, in its sole discretion, in any one or more of the States or
counties in which the Property or any other Collateral Property is located. Neither the acceptance
of this Security Instrument, the other Loan Documents or the Other Security Instruments nor the
enforcement thereof in any one State or county, whether by court action, foreclosure, power of sale
or otherwise, shall prejudice or in any way limit or preclude enforcement by court action,
foreclosure, power of sale or otherwise, of the Note, this Security Instrument, the other Loan
Documents, or any Other Security Instruments through one or more additional proceedings in that
State or county or in any other State or county. Any and all sums received by Mortgagee under the
Note, this Security Instrument, and the other Loan Documents shall be applied to the Obligations in
such order and priority as Mortgagee shall determine, in its sole discretion, without regard to the
Allocated Loan Amount for the Property or any other Collateral Property or the appraised value of
the Property or any other Collateral Property.




ARTICLE 18 — SECONDARY MARKET




     Section 18.1 Transfer of Loan. Subject to the provisions of Article 14 of the Loan
Agreement, Mortgagee may, at any time, (a) sell, transfer or assign the Note, this Security
Instrument and the Other Security Instruments, and any or all servicing rights with respect
thereto, or (b) grant participations therein (“Participations”), or (c) issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or unrated public
offering or private placements (the “Securities”), or (d) enter into any other Secondary Market
Transaction contemplated in Article XIV of the Loan Agreement, which is incorporated herein by
reference. In addition to its other right under said Article XIV of the Loan Agreement, Mortgagee
may forward to each purchaser, transferee, assignee, servicer, participant or investor in such
Participations or Securities, (collectively, an “Investor”) or any Rating Agency rating such
Securities, each prospective Investor, and any organization maintaining databases on the
underwriting and performance of commercial mortgage loans, all documents and information which
Mortgagee now has or may hereafter acquire relating to the Loan and to the Mortgagors and the other
Loan Parties, any Guarantor and the Property, whether furnished by the Mortgagors, any Guarantor or
otherwise, as Mortgagee determines necessary or desirable. Mortgagors irrevocably waive any and
all rights they may have under Laws to prohibit such disclosure, including, but not limited to any
right of privacy.



     Section 18.2 Cooperation. Mortgagors and any Guarantor agree to cooperate with
Mortgagee in connection with any transfer made or any Securities created pursuant to this
Article 18, including, without limitation, complying with all of the terms and conditions
of Article XIV of the Loan Agreement.



     Section 18.3 Reserves/Escrows. If Securities are issued in connection with the Loan,
all funds held by Mortgagee in escrow or pursuant to reserves in accordance with this Security
Instrument or the Other Security Instruments shall be deposited in eligible accounts at eligible
institutions as then defined and required by the Rating Agencies.



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ARTICLE 19 — [GROUND LEASE PROVISIONS]




     Section 19.1 No Merger of Fee and Leasehold Estates; Releases. So long as any portion
of the Obligations shall remain unpaid, unless Mortgagee shall otherwise consent, the fee title to
the Land, the Leasehold Estate created by the Ground Lease and the subleasehold estate created by
the Operating Lease shall not merge but shall always be kept separate and distinct, notwithstanding
the union of such estates in Mortgagors, Owner, Ground Lessee or in any other Person by purchase,
operation of law or otherwise. Mortgagee reserves the right, at any time, to release portions of
the Property, including, but not limited to, the Leasehold Estate and the subleasehold estate
created by the Operating Lease, with or without consideration, at Mortgagee’s election, without
waiving or affecting any of its rights hereunder or under the Note or the other Loan Documents and
any such release shall not affect Mortgagee’s rights in connection with the portion of the Property
not so released.



     Section 19.2 Mortgagor’s Acquisition of Fee Estate. So long as any portion of the
Obligations remains unpaid, the lien created by this Security Instrument shall include and be
deemed to be spread to cover Owner’s fee simple title to the Land and other portions of the
Property in which Owner holds an interest, and said fee simple title shall be deemed to be included
in the Property. Owner agrees, at its sole cost and expense, including without limitation,
Mortgagee’s reasonable attorneys’ fees, to (i) execute any and all documents or instruments
necessary to subject its fee simple title to the Land to the lien of this Security Instrument; and
(ii) provide a title insurance policy which shall insure that the lien of this Security Instrument
is a first lien on Owner’s fee simple title to the Land.



     Section 19.3 Bankruptcy.



          (a) Subject to the terms of the Loan Agreement, Ground Lessee shall not, in any event,
including the bankruptcy, reorganization or insolvency of Ground Lessee or Owner, (i) surrender the
Leasehold Estate, or any portion thereof, nor terminate, cancel or acquiesce in the rejection of
the Ground Lease; or (ii) modify, change, supplement, alter or amend the Ground Lease in any
respect, either orally or in writing. Subject to the terms of the Loan Agreement, Ground Lessee
does hereby expressly release, assign, relinquish and surrender unto Mortgagee all of Ground
Lessee’s right, power and authority to terminate, cancel, acquiesce in the rejection of, modify,
change, supplement, alter or amend the Ground Lease in any respect, either orally or in writing, at
any time, including in the event of the bankruptcy, reorganization or insolvency of Ground Lessee
or Owner, and any attempt on the part of Ground Lessee to exercise any such right without the
consent of Mortgagee shall be null and void. Notwithstanding the foregoing, in the event of a
threatened termination of the Ground Lease due to the bankruptcy, reorganization or insolvency of
Ground Lessee or Owner, Ground Lessee shall, at Mortgagee’s election, absolutely assign to
Mortgagee, in lieu of such termination, all of Ground Lessee’s right, title and interest in and to
the Ground Lease.




          (b) If the Ground Lease is rejected by Owner, as debtor in possession, or by a trustee for
Owner, pursuant to Section 365 of the Bankruptcy Code, Ground Lessee shall not exercise its right
to elect under Section 365(h)(1) of the Bankruptcy Code to terminate or treat the Ground Lease as
terminated. Any such election made shall be null and void. In any event, Ground Lessee hereby
waives, for the benefit of Mortgagee, its successors and assigns only, and not enforceable by
anyone else, the provisions of Section 365 of the Bankruptcy Code, or of any statute or rule of law
now or hereafter in effect which gives or purports to give Ground Lessee any right of election to
terminate the Ground Lease, to acquiesce in the termination of the






30









 







Ground Lease or to surrender possession of the Property in the event of the bankruptcy,
reorganization or insolvency of Owner or any other party.




          (c) If Owner, as debtor in possession, or by a trustee for Owner, attempts to transfer its
interest in the Land and the Improvements free and clear of the Ground Lease pursuant to Section
363 of the Bankruptcy Code, Ground Lessee shall not consent, acquiesce or fail to object to such
attempted transfer. Any such consent, acquiescence or failure to object made shall be null and
void. In any event, Ground Lessee hereby waives, for the benefit of Mortgagee, its successors and
assigns only, and not enforceable by anyone else, the provisions of Section 363 of the Bankruptcy
Code, or of any statute or rule of law now or hereafter in effect which gives or purports to give
Ground Lessee any right to consent to or acquiesce in the transfer of Owner’s interest in the Land
and the Improvements free and clear of the Ground Lease, to acquiesce in the termination of the
Ground Lease or to surrender possession of the Property in the event of the bankruptcy,
reorganization or insolvency of Owner or any other party.




ARTICLE 20 — [OPERATING LEASE PROVISIONS]




     Section 20.1 No Merger of Leasehold and Sub-Leasehold Estates; Release. So long as
any portion of the Obligations shall remain unpaid, unless Mortgagee shall otherwise consent, the
Leasehold Estate and the subleasehold estate therein created pursuant to the provision of the
Operating Lease shall not merge but shall always be kept separate and distinct, notwithstanding the
union of such estates in Operating Lessee, Ground Lessee or Owner, or in any other Person by
purchase, operation of law or otherwise. Mortgagee reserves the right, at any time, to release
portions of the Property, including, but not limited to, the subleasehold estate created by the
Operating Lease, with or without consideration, at Mortgagee’s election, without waiving or
affecting any of its rights hereunder or under the Note or any of the other Loan Documents and any
such release shall not affect Mortgagee’s rights in connection with the portion of the Property not
so released.



     Section 20.2 Subordination/Purchase
Rights. (a) Any option to purchase,
right of first refusal to purchase, right of first refusal to lease additional space at the
Property or any interest therein, right to bid at any sale of the Property by foreclosure, power of
sale, or otherwise, or any similar right of Operating Lessee, whether pursuant to the Operating
Lease or otherwise (collectively, the “Purchase Rights”), are and shall at all times continue to be
subject and subordinate in all respects to the terms, covenants and provisions of this Security
Instrument and to the lien hereof, including without limitation, all renewals, increases,
modifications, spreaders, consolidations, replacements and extensions thereof and to all sums
secured thereby and advances made thereunder with the same force and effect as if the Security
Instrument had been executed, delivered and recorded prior to the execution and delivery of the
Operating Lease or such other document containing any Purchase Right. Operating Lessee hereby
acknowledges and agrees that its right to receive any payments pursuant to the terms of the
Operating Lease is subordinate to the payment of the interest, principal and other sums due
pursuant to the Loan Agreement, the Note and the other Loan Documents.



          (b) Operating Lessee represents and warrants that (i) Operating Lessee is the sole owner and
holder of all of the Purchase Rights; (ii) Operating Lessee has not granted or made any assignment,
transfer, conveyance or other disposition of the Purchase Rights; (iii) Operating Lessee has not
granted or created any lien or encumbrance of any Purchase Rights; and (iv) Operating Lessee has
not exercised any Purchase Rights.







31









 








          (c) Operating Lessee hereby agrees that so long as the Loan is outstanding, Operating Lessee
shall not exercise any of the Purchase Rights or assign, transfer or convey all or any of the
Purchase Rights.




          (d) Mortgagors agree to notify Mortgagee in writing of (i) the proposed exercise of any of the
Purchase Rights not less than thirty (30) days prior to the date of the exercise of any of the
Purchase Rights, (ii) any notice given to any Mortgagor with respect to exercise of any of the
Purchase Rights, concurrently with the giving of such notice to the applicable Mortgagor, and shall
include a copy of any notice given to such Mortgagor with respect to such exercise and (iii) any
proposed assignment, transfer or conveyance of all or any of the Purchase Rights, or agreement to
do so, in the case of Operating Lessee, not less than thirty (30) days prior to the date of any
such assignment, transfer or conveyance, and in the case of Ground Lessee, concurrently with Ground
Lessee’s receipt of any notice of such proposed assignment, transfer or conveyance.




     Section 20.3 Mortgagors’ Fee Simple Estate. The lien of this Security Instrument
shall encumber and be deemed to be spread to cover the fee simple title to the Land, and said fee
simple title shall be deemed to be included in the Property. Mortgagors agree, at their sole cost
and expense, including without limitation, Mortgagee’s reasonable attorney’s fees, to (i) execute
any and all documents or instruments necessary to further evidence or perfect the fact that the fee
simple estate in the Property is subject to the lien of this Security Instrument; and (ii) provide
a title insurance policy which shall insure that the lien of this Security Instrument is a first
lien on Mortgagors’ fee simple title to the Property.



     Section 20.4 Consent of Ground Lessee. Notwithstanding anything to the contrary set
forth in the Operating Lease, including, without limitation, Article 11 thereof, Ground
Lessee hereby consents to the granting by Operating Lessee to Mortgagee, pursuant to this Security
Instrument, of a security interest in the Operating Lease and the subleasehold estate created
thereby in the Land, and all of Operating Lessee’s right, title and interest in and to the
Property.



     Section 20.5 Consent and Waiver of Operating Lessee. Notwithstanding anything to the
contrary set forth in the Operating Lease, including, without limitation, Article 34
thereof, Operating Lessee hereby consents to the granting by Ground Lessee to Mortgagee, pursuant
to this Security Instrument, of a security interest in the Ground Lease and the Leasehold Estate
created thereby, and all of Ground Lessee’s right, title and interest in and to the Property, and
Operating Lessee hereby acknowledges and agrees that the provisions set forth in Section
34.1 of the Operating Lease with respect to the granting of encumbrances by Ground Lessee shall
not be effective as to this Security Instrument.



     Section 20.6 Bankruptcy.



          (a) Subject to the terms of the Loan Agreement, Operating Lessee shall not, in any event,
including the bankruptcy, reorganization or insolvency of Operating Lessee, Ground Lessee or Owner,
(i) surrender the subleasehold estate in the Land created by the Operating Lease, or any portion
thereof, nor terminate, cancel or acquiesce in the rejection of the Operating Lease; or (ii)
modify, change, supplement, alter or amend the Operating Lease in any respect, either orally or in
writing. Subject to the terms of the Loan Agreement, Operating Lessee does hereby expressly
release, assign, relinquish and surrender unto Mortgagee all of Operating Lessee’s right, power and
authority to terminate, cancel, acquiesce in the rejection of, modify, change, supplement, alter or
amend the Operating Lease in any respect, either orally or in






32









 







writing, at any time, including in the event of the bankruptcy, reorganization or insolvency
of Operating Lessee, Ground Lessee or Owner, and any attempt on the part of Operating Lessee to
exercise any such right without the consent of Mortgagee shall be null and void. Notwithstanding
the foregoing, in the event of a threatened termination of the Operating Lease due to the
bankruptcy, reorganization or insolvency of Ground Lessee or Owner, Operating Lessee shall, at
Mortgagee’s election, absolutely assign to Mortgagee, in lieu of such termination, all of Operating
Lessee’s right, title and interest in and to the Operating Lease.




          (b) If the Operating Lease is rejected by Ground Lessee or Owner, as debtor in possession, or
by a trustee for Ground Lessee or Owner, pursuant to Section 365 of the Bankruptcy Code, Operating
Lessee shall not exercise its right to elect under Section 365(h)(1) of the Bankruptcy Code to
terminate or treat the Operating Lease as terminated. Any such election made shall be null and
void. In any event, Operating Lessee hereby waives, for the benefit of Mortgagee, its successors
and assigns only, and not enforceable by anyone else, the provisions of Section 365 of the
Bankruptcy Code, or of any statute or rule of law now or hereafter in effect which gives or
purports to give Operating Lessee any right of election to terminate the Operating Lease, to
acquiesce in the termination of the Operating Lease or to surrender possession of the Property in
the event of the bankruptcy, reorganization or insolvency of Ground Lessee, Owner or any other
party.




          (c) If Ground Lessee or Owner, as debtor in possession, or by a trustee for Ground Lessee or
Owner, attempts to transfer its interest in the Land and the Improvements free and clear of the
Operating Lease pursuant to Section 363 of the Bankruptcy Code, Operating Lessee shall not consent,
acquiesce or fail to object to such attempted transfer. Any such consent, acquiescence or failure
to object made shall be null and void. In any event, Operating Lessee hereby waives, for the
benefit of Mortgagee, its successors and assigns only, and not enforceable by anyone else, the
provisions of Section 363 of the Bankruptcy Code, or of any statute or rule of law now or hereafter
in effect which gives or purports to give Operating Lessee any right to consent to or acquiesce in
the transfer of Owner’s or Ground Lessee’s interest in the Land and the Improvements free and clear
of the Operating Lease, to acquiesce in the termination of the Operating Lease or to surrender
possession of the Property in the event of the bankruptcy, reorganization or insolvency of Ground
Lessee, Owner or any other party.




ARTICLE 21 — [STATE SPECIFIC PROVISIONS]




[NO FURTHER TEXT ON THIS PAGE]



33









 





     IN WITNESS WHEREOF, this Security Instrument has been executed by Mortgagors as of the day and
year first above written.



         
                
                
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ACKNOWLEDGMENTS




STATE OF         
            




COUNTY OF         
            




     The foregoing instrument was acknowledged
before me on the       day of       
              ,
20      by        
               
               
   , the            
               
               of
               
               
          , a(n)     
                 
                 
  , the              
        of         
               
               
  , a(n)             
        , on behalf of said     
                , and who   
    is known to me, OR          
            has produced    
                  as identification.



	 	 	 	 	 	 	 

	[SEAL]
	 	 	 	 	 	 
	 

	 	 	 	 

Notary Public
	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	MY COMMISSION EXPIRES:     
                 
               






STATE OF       
              



COUNTY OF       
              




     The foregoing instrument was
acknowledged before me on the       day of       
              ,
20___ by               
                  
        , the          
                 
               of
                  
                  
    , a(n)              
                  
         , the         
            
of                   
                  
    , a(n)               
      , on behalf of said           
          ,
and who       is known to me, OR       has produced   
                   as identification.



	 	 	 	 	 	 	 

	[SEAL]
	 	 	 	 	 	 
	 

	 	 	 	 

Notary Public
	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	MY COMMISSION EXPIRES:     
                
                


















 









 







STATE OF      
               



COUNTY OF      
               




     The foregoing instrument was acknowledged
before me on the ___day of              
       ,
20___ by                 
                   
     , the              
                   
        
of                   
                   
   , a(n)                
                   
      ,
the                   
   of                 
                   
     , a(n)              
       , on behalf of
said                   
  , and who       is known to me, OR       has
produced              
        as identification.



	 	 	 	 	 	 	 

	[SEAL]
	 	 	 	 	 	 
	 

	 	 	 	 

Notary Public
	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	MY COMMISSION EXPIRES:     
                
                











 









 








EXHIBIT A




(DESCRIPTION OF LAND)