Document:

Exhibit
10.2

 

OPEN-END
LEASEHOLD MORTGAGE AND SECURITY AGREEMENT

 

This is an Open-End Leasehold Mortgage
and secures future advances pursuant to 42 PA C.S.A. §§§ 8143 and 8144,
act. No. 126 of 1990.

 

KNOW ALL MEN BY THESE PRESENTS that FT-CHURCHILL
PROPERTY L.P., a Delaware limited partnership having an address at c/o First
Union Real Estate Equity and Mortgage Investments, 7 Bulfinch Place, Suite 500,
P.O. Box 9507, Boston, Massachusetts 02114 (hereinafter called “Mortgagor”), for consideration paid, hereby grants, conveys,
transfers, assigns and sets-over unto KEYBANK NATIONAL ASSOCIATION, a national
banking association,  as agent
under a Loan Agreement (hereinafter called the “Loan
Agreement”) of even date among the FT-FIN ACQUISITION LLC, a
Delaware limited liability company (the “Borrower”), KeyBank
National Association and the other lending institutions which become parties to
the Loan Agreement (KeyBank National Association and the other lending
institutions which become parties to the Loan Agreement are collectively
referred to as the “Lenders” and
individually as the “Lender”), and KeyBank
National Association, as Agent (hereinafter called the “Agent”),
having a place of business at 101 Federal Street, Boston, Massachusetts 02110,
with mortgage covenants, the Mortgaged Property (as defined below) to secure
the Obligations (as defined below).

 

This Mortgage (as defined below) is an “Open-End
Mortgage” as set forth in 42 PA. C.S.A. § 8143 and secures all obligations
by the Guaranty (as defined below), plus accrued and unpaid interest, which
obligations include, but are not limited to, advances for the payment of taxes
and municipal assessments, maintenance charges, insurance premiums, costs
incurred for the protection of the Property or the lien of this Mortgage,
expenses incurred by Agent by reason of any Default or circumstance, which with
the passage of time, or giving of notice, or both, would constitute a Default,
including, without limitation, legal fees and costs, and advances for
construction, alteration or renovation on the Property, together with all other
sums due hereunder or secured hereby.

 

The term “Mortgagor”
shall include, wherever the context permits, its successors and assigns.

 

The terms “Agent” and “Lenders” shall
include, wherever the context permits, their respective successors and assigns
as the holder for the time being of this Open-End Leasehold Mortgage and
Security Agreement and other Obligations hereby secured.

 

R E C I T A L S:

 

A.                                   Pursuant to the
terms and conditions of the Loan Agreement, the Lenders have agreed to make a
Loan to the Borrower in a principal amount not to exceed FIFTY-THREE MILLION
DOLLARS ($53,000,000.00);

 

B.                                     The Mortgagor has
executed and delivered to the Agent its Guaranty of even date herewith (as such
may be amended, modified, supplemented or restated hereafter, the “Guaranty”), pursuant to which the Mortgagor has guaranteed
the obligations of the Borrower under the Loan Agreement;

 

C.                                     The Mortgagor owns
(i) a leasehold estate interest in the Land (as defined herein) as established
under the Ground Lease (as defined herein) which is currently set to expire on

 

1

 

December 31, 2010, unless otherwise renewed pursuant to its terms
and conditions, and (ii) a fee simple interest in the Improvements (as defined
herein); and

 

D.                                    It is a condition
precedent to the Lenders making the Loan or otherwise extending credit to the
Borrower under the Loan Agreement that the Mortgagor execute and deliver to the
Agent this Agreement.

 

This  Open-End Leasehold Mortgage  and Security Agreement (hereinafter, the “Mortgage”) is granted pursuant to the terms, provisions and
conditions of the Loan Agreement.  Capitalized
terms used herein which are not otherwise specifically defined herein shall
have the meaning ascribed to such terms under the Loan Agreement, which Loan
Agreement and other Loan Documents are incorporated by reference herein and
made part of this Mortgage.

 

The term “Mortgaged
Property” shall mean and include all of the following described
property:

 

A.                                   Real Estate.  The Mortgagor’s interest in and to the land
more particularly described on Exhibit A which is annexed hereto and
made a part hereof (hereinafter, the “Land”), together with the
improvements and other structures now or hereafter situated thereon (such
improvements being sometimes called the “Improvements”)
located at 1310 Beulah Road, Pittsburgh, Pennsylvania, together with all
rights, privileges, tenements, hereditaments, appurtenances, easements,
including, but not limited to, rights and easements for access and egress and
utility connections, and other rights now or hereafter appurtenant thereto
(hereinafter, the “Real Estate”);

 

B.                                     Fixtures.  All real estate fixtures or items which by
agreement of the parties may be deemed to be such fixtures, now or hereafter
owned by Mortgagor, or in which Mortgagor has or hereafter obtains an interest,
and now or hereafter located in or upon the Real Estate, or now or hereafter
attached to, installed in, or used in connection with any of the Real Estate,
including, but not limited to, any and all portable or sectional buildings,
bathroom, plumbing, heating, lighting, refrigerating, ventilating and
air-conditioning apparatus and equipment, garbage incinerators and receptacles,
elevators and elevator machinery, boilers, furnaces, stoves, tanks, motors,
sprinkler and fire detection and extinguishing systems, doorbell and alarm
systems, window shades, screens, awnings, screen doors, storm and other
detachable windows and doors, mantels, partitions, built-in cases, counters and
other fixtures whether or not included in the foregoing enumeration
(hereinafter, the “Fixtures”);

 

C.                                     Additional
Appurtenances. All bridges, easements, rights of way, licenses, privileges,
hereditaments, permits and appurtenances hereafter belonging to or enuring to
the benefit of the Real Estate and all right, title and interest of Mortgagor
in and to the land lying within any street or roadway adjoining any of the Real
Estate and all right, title and interest of Mortgagor in and to any vacated or
hereafter vacated streets or roads adjoining any of the Real Estate and any and
all reversionary or remainder rights (hereinafter, the “Additional
Appurtenances”);

 

D.                                    Awards.  All of the right, title and interest of
Mortgagor in and to any award or awards heretofore made or hereafter to be made
by any municipal, county, state or federal authorities to the present or any
subsequent owners of any of the Real Estate or the Land, or the Improvements,
or the Fixtures, or the Additional Appurtenances, or the Leases or the Personal
Property, including, without limitation, any award or awards, or settlements or
payments, or other compensation hereafter made resulting from (x) condemnation
proceedings or the taking of

 

2

 

the Real Estate, or the Land, or the Improvements, or the Fixtures, or
the Additional Appurtenances, or the Leases or the Personal Property, or any
part thereof, under the power of eminent domain, or (y) the alteration of grade
or the location or discontinuance of any street adjoining the Land or any
portion thereof, or (z) any other injury to or decrease in value of the
Mortgaged Property (hereinafter, the “Awards”);

 

E.                                      Leases.  All leases and subleases now or hereafter
entered into of the Real Estate, or any portion thereof, and all rents, issues,
profits, revenues, earnings and royalties therefrom, and all right, title and
interest of Mortgagor thereunder, including, without limitation, purchase or
sale options, cash, letters of credit, or securities deposited thereunder to
secure performance by the tenants or occupants of their obligations thereunder,
whether such cash, letters of credit, or securities are to be held until the
expiration of the terms of such leases or occupancy agreements or applied to
one or more of the installments of rent coming due prior to the expiration of
such terms including, without limitation, the right to receive and collect the
rents and other payments due thereunder (hereinafter, the “Leases”);

 

F.                                      Purchase and
Sale Agreements.  All purchase and
sale agreements now or hereafter entered into of the Real Estate, or any
portion thereof, or any condominium units into which the Real Estate may be
converted including, without limitation, cash, letters of credit or securities
deposited thereunder to secure performance by the purchasers of their
obligations thereunder (hereinafter, the “Purchase and Sale
Agreements”);

 

G.                                     Ground Lease.  All of the right, title and interest of the Mortgagor,
as ground lessee, in and to the Land pursuant to that certain Ground Lease
dated as of November 15, 1985, (hereinafter, together with any amendments,
modifications, extensions, renewals, replacements, and assignments thereof, the
“Ground Lease”); and

 

H.                                    Personal
Property.  All tangible and
intangible personal property now owned or at any time hereafter acquired by
Mortgagor of every nature and description, and whether or not used in any way
in connection with the Real Estate, the Fixtures, the Additional Appurtenances,
the Purchase and Sale Agreements or any other portion of the Mortgaged
Property, including, without limitation express or implied upon the generality
of the foregoing, all Equipment, Goods, Inventory, Fixtures, Accounts,
Instruments, Documents and General Intangibles (as each such capitalized term
is defined in the Uniform Commercial Code in effect in the state where the Real
Estate is situated) and further including, without any such limitation, the
following whether or not included in the foregoing: materials; supplies;
furnishings; chattel paper; money; bank accounts; security deposits; utility
deposits; any insurance or tax reserves deposited with Agent; any cash
collateral deposited with Agent; claims to rebates, refunds or abatements of real
estate taxes or any other taxes; contract rights; plans and specifications;
licenses, permits, approvals and other rights; the rights of Mortgagor under
contracts with respect to the Real Estate or any other portion of the Mortgaged
Property; signs, brochures, advertising, the name by which the Mortgaged
Property is known and any variation of the words thereof, and good will;
copyrights, service marks, and all goodwill associates therewith; and
trademarks; all proceeds paid for any damage or loss to all or any portion of
the Real Estate, the Fixtures, the Additional Appurtenances, any other Personal
Property or any other portion of the Mortgaged Property (hereinafter, the “Insurance Proceeds”); all Awards; all Leases; all Purchase
and Sale Agreements; all books and records; and all proceeds, products,
additions, accessions, substitutions and replacements to any one or more of the
foregoing (collectively, the “Personal Property”).

 

3

 

The term “Obligations”
shall mean and include:

 

A.                                   The Guaranteed
Obligations, as such term is defined in the Guaranty;

 

B.                                     The payment,
performance, discharge and satisfaction of each covenant, warranty,
representation, undertaking and condition to be paid, performed, satisfied and
complied with by Mortgagor under and pursuant to this Mortgage, the Guaranty,
and also by Mortgagor under and pursuant to each of the other Loan Documents
referred to in, or executed in connection therewith;

 

C.                                     The payment of all
costs, expenses, legal fees and liabilities incurred by Agent and the Lenders
in connection with the enforcement of any of Agent’s or any Lender’s rights or
remedies after a Default under this Mortgage, the Guaranty, the other Loan
Documents, or any other instrument, agreement or document which evidences or
secures any other obligations or collateral therefor, whether now in effect or
hereafter executed; and

 

D.                                    The payment,
performance, discharge and satisfaction of all other liabilities and
obligations of Mortgagor to Agent or any Lender, whether now existing or
hereafter arising, direct or indirect, absolute or contingent, arising under
this Mortgage, the Guaranty, the Loan Documents, or any other documents
executed therewith. and including, without limitation express or implied upon the
generality of the foregoing.

 

PROVIDED ALWAYS, that this instrument is upon
the express condition that, if Mortgagor performs the Obligations (as defined
herein), in accordance with the provisions of this Mortgage and the Loan
Documents, at the times and in the manner specified, without deduction, fraud
or delay, and if Mortgagor performs and complies with all the agreements,
conditions, covenants, provisions and stipulations contained herein and in the
other Loan Documents, then this Mortgage and the estate hereby granted shall
cease and become void and Agent shall provide and deliver to Mortgagor a
discharge of this Mortgage in proper form for recording.

 

Mortgagor hereby grants to Agent, on behalf
of the Lenders, a continuing security interest in all of the Mortgaged Property
in which a security interest may be granted under the Uniform Commercial Code
as such is in effect in the Commonwealth of Massachusetts and the Commonwealth
of Pennsylvania including, without limitation, the Fixtures, the Personal
Property and the Purchase and Sale Agreements, together with all proceeds and
products, whether now or at any time hereafter acquired and whether or not used
in any way in connection with the development, construction, marketing or
operation of the Real Estate, to secure all Obligations.

 

This instrument is intended to take effect as
a mortgage pursuant to Pennsylvania law, and as a security agreement to the UCC
and is to be filed with Office of the Recorder of Deeds of Allegheny County,
Pennsylvania as a fixture financing statement pursuant to the UCC.

 

Mortgagor hereby covenants, warrants,
represents and agrees with Agent, its successors and assigns, and the Lenders
that:

 

1.                                       Title.  Mortgagor has good marketable title to the
Mortgaged Property and has good right, full power and lawful authority to grant
and convey the same in the manner aforesaid; and that the Mortgaged Property is
free and clear of all encumbrances and exceptions, except for the Permitted
Title Exceptions, if any, as set forth on Schedule B, Section II of
Title Insurance Policy No.                    
issued by Fidelity National Title Insurance Co.

 

4

 

Mortgagor shall make any
further assurances of title that Agent may in good faith require including,
without limitation, such further instruments as may be requested by Agent to
confirm the assignment to Agent of all Awards.

 

2.                                       Performance
of Obligations.  Mortgagor shall perform
and observe all of the obligations and conditions set forth in each of the Guaranty,
this Mortgage, the Collateral Assignment of Leases and Rents, and each of the
other agreements, if any, executed by Mortgagor in connection with the Loan.

 

3.                                       Protection
and Maintenance.  Mortgagor shall
protect and maintain, or cause to be protected and maintained by the Tenant, in
good, first-class and substantial order, repair and tenantable condition at all
times, the buildings and structures now standing or hereafter erected on the
Mortgaged Property, and any additions and improvements thereto, and all
Personal Property now or hereafter situated therein, and the utility services,
the parking areas and access roads, and all building fixtures and equipment and
articles of personal property now or hereafter acquired and used in connection
with the operation of the Mortgaged Property. 
Mortgagor shall promptly replace, or shall cause Tenant to promptly
replace, any of the aforesaid which may become lost, destroyed or unsuitable
for use with other property of similar character.

 

4.                                       Insurance
Coverages.  Mortgagor shall insure,
or shall cause to be insured by Tenant, the Mortgaged Property and the
operation thereof with such coverages and in such amounts as are required by
the provisions of the Loan Agreement and shall at all times keep, or cause the
Tenant to keep, such insurance in full force and effect and pay all premiums
therefor.  Certificates of insurance
shall be delivered to Agent and the Lenders, and Mortgagor shall deliver to the
Agent and the Lenders such a certificate as a replacement for an expiring
certificate required to be deposited hereunder at least thirty (30) days before
the date of such expiration.  Mortgagor
hereby irrevocably appoints Agent its true and lawful attorney-in-fact, with
full power of substitution, to assign any such policy in the event of the
foreclosure of this Mortgage.

 

5.                                       Insurance
Proceeds.  Subject to the provisions
of the Loan Agreement relating to the application of insurance proceeds, which
provisions are expressly incorporated by reference herein and which Mortgagor
is hereby made a third-party beneficiary of, the proceeds of any hazard
insurance shall be used for the repair and restoration of the Mortgaged
Property or applied to or toward the indebtedness secured hereby in such order
as Agent may determine.  Notwithstanding
anything in this Section 5 to the contrary, however, if the insurer denies
liability to Mortgagor, Mortgagor shall not be relieved of any obligation under
Section 3 of this Mortgage.

 

6.                                       Eminent
Domain.  Subject to the provisions of
the Loan Agreement relating to the application of Awards, which provisions are
expressly incorporated by reference herein and which Mortgagor is hereby made a
third-party beneficiary of, any Awards shall be used for the repair and
restoration of the Mortgaged Property or applied to or toward the indebtedness
secured hereby in such order as Agent may determine.

 

5

 

7.                                       No
Waste; Compliance With Law. 
Mortgagor shall not commit or suffer, or allow the Tenant to commit or
suffer, any strip or waste of the Mortgaged Property, or any portion thereof,
or any violation of any law, rule, regulation, ordinance, license or permit, or
the requirements of any licensing authority affecting the Mortgaged Property or
any business conducted thereon, and shall not commit or suffer, or allow the
Tenant to commit or suffer, any demolition, removal or material alteration of
any of the Mortgaged Property (except for the replacement of Fixtures and
Personal Property in the ordinary course of business, so long as items of
comparable value and quality are installed free and clear of liens in favor of
any other party), without the express prior written consent of Agent in each
instance, which consent shall not be unreasonably withheld or delayed, and
shall not violate or suffer, or allow the Tenant to violate or suffer, the
violation of the covenants and agreements, if any, of record against the
Mortgaged Property, and in all respects Mortgagor shall do, or shall cause the
Tenant to do, all things necessary to comply with, and keep in full force and
effect all licenses, permits and other governmental authorizations for the
operation of the Mortgaged Property for its intended purposes, including,
without limitation express or implied, the licenses, permits and authorizations
referenced in the Loan Agreement.

 

8.                                       Environmental
and Related Matters; Indemnification. 
Mortgagor shall at all times comply with all of the terms, conditions
and provisions imposed on the Indemnitors under the Environmental Indemnity.

 

9.                                       Payment
of Taxes and Prevention of Liens. 
The Mortgagor shall pay, or shall cause the Tenant to pay, before
delinquent or before any penalty for nonpayment attaches thereto, all taxes,
assessments and charges of every nature and to whomever assessed that may now
or hereafter be levied or assessed upon the Mortgaged Property or any part
thereof, or upon the rents, issues, income or profits thereof or upon the lien
or estate hereby created, whether any or all of said taxes, assessments or
charges be levied directly or indirectly or as excise taxes or as income
taxes.  Mortgagor may apply, or may allow
the Tenant to apply, for tax abatements and prosecute diligently and in good
faith claims for refund so long as: (i) no additional taxes, interest thereon
or penalties are incurred thereby and (ii) no proceedings are instituted to
divest Mortgagor of title to all or any portion of the Mortgaged Property.  Mortgagor shall pay all sums which, if
unpaid, may result in the imposition of a lien on the Mortgaged Property before
such lien may attach (except that real estate taxes need not be paid prior to
the due date thereof) or which may result in conferring upon a tenant of any
part or all of the Mortgaged Property a right to recover such sums as prepaid
rent.

 

10.                                 Due
On Sale; No Other Encumbrances; No Transfer of Ownership Interests; Failure to
Comply with Permitted Exceptions. 
Except as otherwise specifically provided for in the Loan Agreement, or
in this Mortgage, it shall be an Event of Default under the Loan Agreement, a
breach of the conditions of this Mortgage and an event permitting Agent or any
Lender to accelerate all indebtedness secured hereby, if, without Agent’s prior
written consent in each instance, which consent may be granted, withheld or
conditionally granted in Agent’s sole discretion: (a) there is any sale,
conveyance,

 

6

 

transfer or encumbrance
of, or lien imposed upon, all or any portion of the Mortgaged Property; or (b)
there is any transfer or assignment of, or grant of any security interest in,
any of the direct or indirect ownership interests in Mortgagor; or (c) there is
a failure to comply with the provisions of, or there is a default under, any of
the Permitted Title Exceptions unless cured within any applicable grace period
provided for in the applicable Permitted Title Exception.

 

11.                                 Agent’s
and Lenders’ Rights.  If Mortgagor
shall neglect or refuse: (a) to maintain and keep, or cause Tenant to maintain
and keep, in good repair the Mortgaged Property or any part thereof as required
by this Mortgage or the Loan Agreement, or (b) to maintain and pay, or cause
the Tenant to maintain and pay, the premiums for insurance which may be
required by this Mortgage or the Loan Agreement, or (c) to pay and discharge, or
cause the Tenant to pay and discharge, all taxes of whatsoever nature,
assessments and charges of every nature and to whomever assessed, as required
by this Mortgage or the Loan Agreement, or (d) to pay the sums required to be
paid by this Mortgage or the Loan Agreement, or (e) to satisfy any other terms
or conditions of this Mortgage, or any instrument secured hereby, Agent may, at
its election in each instance, but without any obligation whatsoever to do so,
upon thirty (30) days prior written notice (except in the case of (i) an
emergency where there is danger to person or property, or (ii) required
insurance coverage would lapse, or (iii) an Event of Default exists, in each of
which events no notice shall be required), cause such repairs or replacements
to be made, obtain such insurance or pay said taxes, assessments, charges, and
sums, incur and pay reasonable amounts in protecting its rights hereunder and
the security hereby granted, pay any balance due under any conditional
agreement of sale (or lease) of any property included as a part of the
Mortgaged Property, and pay any amounts as Agent deems reasonably necessary or
appropriate to satisfy any term or condition of this Mortgage, which Mortgagor
shall have failed to satisfy, or to remedy any breach of such term or
condition, and any amounts or expenses so paid or incurred, together with
interest thereon from the date of payment by Agent or the Lenders at the
Default Rate as provided in the Guaranty or Loan Agreement, shall be
immediately due and payable by Mortgagor to Agent and the Lenders and until
paid shall be secured hereby equally and ratably, and the same may be collected
as part of said principal debt in any suit hereon or upon the Note.  No payment by Agent or the Lenders shall
relieve Mortgagor from any default hereunder or impair any right or remedy of
Agent consequent thereon.

 

12.                                 Tax
Reserve and Insurance Reserve. 
Unless paid, or required to be paid, by the Tenant under the Lease, Mortgagor
shall, upon the request of Agent, from time to time if an Event of Default
shall be in existence, pay to Agent, such amount as Agent from time to time
estimates as necessary to create and maintain a reserve fund from which to pay
before the same become due: (a) all taxes, assessments, liens and charges on or
against the Mortgaged Property, and (b) all premiums for insurance policies
which are required by this Mortgage. 
Such payments, if so requested, shall be invested in an interest-bearing
account with the interest earned to be added to the reserve account  which shall be held by Agent as Cash Collateral,
and so long as no Event of Default exists hereunder or under any of other Loan
Documents, shall be paid to or for Mortgagor’s benefit as set forth

 

7

 

below.  Payments from such reserve fund for said
purposes may be made by Agent at its discretion even though subsequent owners
of the property described herein may benefit thereby.  In the event of any Event of Default under
the Loan Agreement or under the terms of this Mortgage, any part or all of such
reserve fund may be applied, at the option of Agent, to cure any such Event of
Default or to any part of the indebtedness hereby secured.  Prior to an Event of Default, the amount in
such reserve fund, but not in excess of the applicable real estate taxes or
insurance premiums then due, shall be paid to the taxing authority or the
insurer upon written request of Mortgagor provided that such request is
accompanied by the applicable current billing from the taxing authority or the
insurer.

 

13.                                 Certain
Expenses.  If any action or
proceeding is commenced, including, without limitation, an action to foreclose
this Mortgage or to collect the debt hereby secured, to which action or
proceeding Agent or any Lender is made a party by reason of the execution of
this Mortgage, or by reason of any obligation which it secures, or by reason of
entry or any other action under this Mortgage, or if in Agent’s judgment it
becomes necessary in connection with legal proceedings or otherwise to defend
or uphold the Mortgage hereby granted or the lien hereby created or any act
taken to defend or uphold the Mortgage hereby granted or the lien hereby
created or any act taken under this Mortgage, all sums reasonably paid or
incurred by Agent or any Lender for the expense of any litigation or otherwise,
in connection with any rights created by this Mortgage or any other Loan
Document, shall be paid by Mortgagor, or may at the option of Agent, if not so
paid, be added to the debt secured hereby and shall be secured hereby equally
and ratably and shall bear interest until paid at the Default Rate set forth in
the Guaranty or the Loan Agreement.

 

14.                                 Regarding
Leases.  Except as otherwise provided
in the Loan Agreement, Mortgagor shall not enter into any leases or occupancy
agreements with respect to the Mortgaged Property and shall not modify or amend
any such leases or occupancy agreements without Agent’s prior written consent
in each instance.  As to each permitted
lease or occupancy agreement, Mortgagor will perform every material obligation
of the lessor and, to the extent commercially reasonable, will enforce every
material obligation of the lessee in the leases in effect with respect to all
or any part or all of the Mortgaged Property and, except as otherwise provided
in the Loan Agreement, Mortgagor will not: (i) cancel any Lease, nor terminate
or accept a surrender thereof, or reduce the rent payable thereunder or alter,
modify or amend any Lease; (ii) accept any prepayment of rent thereunder
(except any rent which may be required to be prepaid by the terms of any such
lease) more than one (1) month in advance of the time when the same shall be
due; (iii) enter into any new leases, without first obtaining on each occasion
the prior written consent of Agent; (iv) execute any assignment of Mortgagor’s
interest in any Lease (other than the Collateral Assignment of Leases and Rents)
or assignment of rents arising or accruing from any Lease or from the Mortgaged
Property; (v) subordinate any Lease to any mortgage or other encumbrance, or
permit, consent or agree to such subordination, without Agent’s prior written
consent in each instance; (vi) convey or transfer or suffer or permit a
conveyance or transfer of the premises demised by any Lease or of any interest

 

8

 

therein so as to affect,
directly or indirectly, a merger of the estates and rights, or a termination or
diminution of the obligations, of any lessee thereunder; (vii) alter, modify or
change the terms of any guaranty of any Lease, or any security for any Lease,
or cancel or terminate any such guaranty, or release or reduce any such
security, without the prior written consent of Agent in each instance; or
(viii) consent to any assignment of, or subleasing under, any Lease (except in
accordance with the terms of any Lease) without the prior written consent of
Agent in each instance.  As to all leases
and occupancy agreements, Agent, at its option from time to time, may require
that all security deposits and similar funds or security provided by a lessee
or occupant be deposited with Agent, or with an escrow agent satisfactory to
Agent, subject to the rights of the lessee or occupant, but otherwise subject
to a security interest in favor of Agent.

 

15.                                 Declaration
of Subordination.  At the option of
Agent, which may be exercised at any time or from time to time by written
notice to Mortgagor and to any applicable tenant, this Mortgage shall become
subject and subordinate, in whole or in part (but not with respect to priority
of entitlement to insurance proceeds or condemnation proceeds), to any and all
leases of all or any part of the Mortgaged Property upon the execution by Agent
and recording or filing thereof, at any time hereafter in the appropriate
official records of the county wherein the Mortgaged Property are situated  of a unilateral declaration to that
effect.

 

16.                                 Further
Assignment by Mortgagor.  Mortgagor
hereby further assigns to Agent, as security for the Obligations, the lessor’s
interests in any or all Leases, now or hereafter outstanding, and to the extent
it may lawfully do so Mortgagor’s interests in all agreements, contracts,
licenses and permits, now or hereafter outstanding, affecting all or any
portion of the Mortgaged Property. 
Mortgagor shall execute, acknowledge and deliver such further or
confirmatory assignments thereof, by instruments in form satisfactory to the
Agent, as Agent may reasonably require. 
Mortgagor hereby authorizes Agent in the event of foreclosure, to sell
and assign said interests to the purchaser at foreclosure, but neither such
assignment nor any such future assignment shall be construed as binding Agent
to any lease, agreement, contract, license or permit so assigned, or to impose
upon Agent any obligations with respect thereto.  Mortgagor hereby irrevocably appoints Agent,
or any agent designated by Agent, the true and lawful attorney-in-fact of
Mortgagor, with full power of substitution, to execute, acknowledge and deliver
any such assignment on behalf of Mortgagor which Mortgagor fails or refuses to
do.

 

17.                                 UCC
Filing.  Mortgagor, upon Agent’s
written request, shall promptly cause this Mortgage and any required financing
statements to be recorded and re-recorded, registered and re-registered, filed
and re-filed at such times and places as may be required by law or reasonably
deemed advisable by Agent to create, preserve or protect the priority hereof
and of any lien created hereby upon the Mortgaged Property or any part thereof;
and Mortgagor shall from time to time do and cause to be done all such things
as may be required by Agent, or required by law, including all things which may
from time to time be necessary under the Uniform Commercial Code of the Commonwealth
of

 

9

 

Pennsylvania fully to
create, preserve and protect the priority hereof and of any lien created hereby
upon said property.  Mortgagor hereby
irrevocably appoints Agent, or any agent designated by Agent, the true and
lawful attorney-in-fact of Mortgagor, with full power of substitution, to
execute, acknowledge and deliver any such things on behalf of Mortgagor which
Mortgagor fails or refuses to do.

 

18.                                 Right
to Deal with Successor.  Agent may,
without notice to any person, deal with any successor in interest of Mortgagor
herein regarding this Mortgage and the debt hereby secured in all respects as
it might deal with Mortgagor herein, without in any way affecting the liability
hereunder or upon the debt hereby secured of any predecessor in interest of the
person so dealt with; and no sale of the premises hereby mortgaged, nor any
forbearance on the part of Agent, not any extension by Agent of the time for
payment of the debt hereby secured, shall operate to release, discharge,
modify, change or affect the original liability of any predecessor in interest
of the equity owner at the time of such sale, forbearance or extension.

 

19.                                 Acceleration
of Debt.  If there is an Event of
Default or if an event occurs which pursuant to which entitles Agent to
exercise its rights and remedies under the Guaranty, then, at the option of
Agent, the entire indebtedness hereby secured shall become immediately due and
payable without further notice.

 

20.                                 Additional
Rights of Agent.

 

a.                                       Enter
and Perform.  Mortgagor authorizes
Agent, in addition to all other rights granted by law or by this Mortgage, or
by any of the other instruments executed herewith, whenever and as long as any Event
of Default hereunder or under the Loan Agreement shall exist and remain uncured
beyond the applicable grace period, if any, and without notice beyond the
notice, if any, required to be given by the terms of the Loan Agreement, or
upon the occurrence of an Event of Default under the Loan Agreement, to enter
and take possession of all or any part of the Mortgaged Property and to use,
lease, operate, manage and control the same and conduct the business thereof,
and perform lessor’s obligations under any lease or the seller’s obligations
under any Purchase and Sale Agreement or Mortgagor’s obligations under any
other agreement affecting all or any part of the Mortgaged Property, perform
the obligations of the seller under any contracts,  and collect the rents, profits and all receipts of every
nature therefrom as Agent shall deem best.

 

b.                                      Repairs
and Improvements.  Upon every such
entry, Agent may, but shall not be obligated to, exercise all rights and powers
of Mortgagor, either in the name of Mortgagor, or otherwise as Agent shall determine.  Without limitation express or implied upon
the generality of the foregoing, Agent shall have the right to do all things
necessary or desirable in order to keep in full force and effect all applicable
licenses, permits and authorizations and any amendments thereto.

 

10

 

c.                                       Pay
Costs and Expenses.  Upon such entry,
Agent may, at its option, but without any obligation to do so, do any one or
more of the following: pay and incur all expenses necessary or deemed by it
appropriate for the holding and operating of the Mortgaged Property, the
conduct of any business thereon, the maintenance of the Mortgaged Property,
including without limitation payments of taxes, assessments, insurance, wages
of employees connected with the Mortgaged Property or any business conducted
thereon, charges and reasonable compensation for services of Agent, its
attorneys and accountants and all other persons engaged or employed in
connection with the Mortgaged Property or of any business conducted thereon
and, in addition, Agent, at its option, may, but shall not be obligated to,
make payments or incur liability with respect to obligations arising prior to
the date it takes possession.

 

d.                                      Add
to Secured Indebtedness.  All
obligations so paid or incurred by Agent shall be reimbursed or paid for by
Mortgagor upon demand and prior to the repayment thereof shall be added to the
debt secured hereby and shall bear interest at the Default Rate provided for in
the Guaranty or the Loan Agreement, and shall be secured hereby equally and
ratably.  Agent may also reimburse itself
therefor from the income or receipts of the Mortgaged Property or any business
conducted thereon, or from the sale of all or any portion of the Mortgaged
Property.  Agent may also apply toward
any of the Obligations any tax or insurance reserve account, deposit or any sum
credited or due from Agent to Mortgagor without first enforcing any other
rights of Agent against Mortgagor or the against any other guarantor of any of the
Obligations or against the Mortgaged Property.

 

e.                                       Attorney-In-Fact.  Mortgagor hereby irrevocably constitutes and
appoints Agent, or any agent designated by Agent, for so long as this Mortgage
remains undischarged of record, as attorney-in-fact of Mortgagor to execute,
acknowledge, seal and deliver all instruments, agreements, deeds, certificates
and other documents of every nature and description in order to carry out or
implement the exercise of Agent’s rights hereunder and under the other Loan
Documents.

 

f.                                         Foreclosure.  Agent may institute an action of mortgage
foreclosure, or take such other action at law or in equity for the enforcement
of this Mortgage and realization on the mortgage security or any other security
herein or elsewhere provided for, as the law may allow, and may proceed therein
to final judgment and execution for the entire unpaid balance of the principal
debt, with interest at the rate(s) stipulated in the Loan Agreement, together
with all other sums due from Mortgagor in accordance with the provisions of the
Loan Agreement, including all sums which may have been loaned by Agent to
Mortgagor after the date of this Mortgage, all sums which may have been
advanced by Agent to Mortgagor after the date of this Mortgage, all sums which
may have been advanced by Agent for taxes, water or sewer rents, other lienable
charges or claims, insurance or repairs or maintenance after the date of this
Mortgage (including the period after the entry of any judgment in mortgage
foreclosure or

 

11

 

other judgment entered
pursuant to this Mortgage or the Loan Agreement), and all costs of suit,
including counsel fees (as permitted by applicable law).  Mortgagor authorizes Agent at its option to
foreclose this Mortgage subject to the rights of any tenants of the Mortgaged
Property, and the failure to make any such tenants parties defendant to any
such foreclosure proceedings and to foreclose their rights will not be asserted
by Mortgagor as a defense to any proceedings instituted by Agent to recover the
indebtedness secured hereby or any deficiency remaining unpaid after the
foreclosure sale of the Mortgaged Property; however, nothing herein contained
shall prevent Mortgagor from asserting in any proceedings disputing the amount
of the deficiency or the sufficiency of any bid at such foreclosure sale that
any such tenants adversely affect the value of the Mortgaged Property.

 

In connection with the
exercise of Agent’s rights above, Mortgagor hereby authorizes and empowers any
attorney of any court of record in the Commonwealth of Pennsylvania or
elsewhere, as attorney for Agent and all persons claiming under or through
Agent, to appear for and confess judgment in ejectment against Mortgagor for
the possession of the Mortgaged Property and to appear for and confess judgment
against Mortgagor and against all persons claiming under or through Mortgagor,
in favor of Agent, for recovery by Agent of possession thereof, for which this
Mortgage, or a copy thereof verified by affidavit, shall be a sufficient
warrant; and thereupon a writ of possession may immediately issue for
possession of the Mortgaged Property, without any prior writ or proceeding
whatsoever and without any stay of execution. 
If for any reason after such action has been commenced it shall be
discontinued, or possession of the Mortgaged Property shall remain in or be
restored to Mortgagor, Agent shall have the right for the same default or any
subsequent default to bring one or more further actions as above provided to
recover possession of the Mortgaged Property. 
Agent may confess judgment in ejectment therein before or after the
institution of proceedings to foreclose this Mortgage or to enforce the Loan
Documents, or after entry of judgment on this Mortgage or on the other Loan
Documents executed in connection therewith, or after a sheriff’s sale of the
Mortgaged Property in which Agent or any Lender is the successful bidder.   The authorization to pursue such proceedings
for obtaining possession is an essential part of the enforcement of this
Mortgage, or the other Loan Documents, and shall survive any execution sale to
Agent.

 

21.                                 Setoff.  Mortgagor hereby grants to Agent and each of
the Lenders, a lien, security interest and right of setoff as security for all
liabilities and obligations to Agent and the Lenders, whether now existing or
hereafter arising, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control
of Agent or any Lender or any entity under the control of KeyBank National
Association, or in transit to any of them. 
At any time, without demand or notice, after the occurrence of an Event
of Default, Agent or any Lender may set off the same or any part thereof and
apply the same to any liability or obligation of Mortgagor even though

 

12

 

unmatured and regardless
of the adequacy of any other collateral securing the Loan.  ANY AND ALL RIGHTS TO REQUIRE AGENT OR ANY
LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE MORTGAGOR, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

22.                                 Notices.  All notices, requests and demands to or upon
the Agent, the Lenders or the Mortgagor under this Mortgage shall be in writing
and given as provided in the Loan Agreement (and with respect to the Mortgagor,
c/o the Borrower at the address of the Borrower as set forth in the Loan
Agreement).

 

23.                                 Agent/Lender
Not Obligated; Cumulative Rights. 
Nothing in this instrument shall be construed as obligating Agent or any
Lender to take any action or incur any liability with respect to the Mortgaged
Property or any business conducted thereon, and all options given to Agent are
for its benefit and shall and may be exercised in such order and in such
combination as Agent may from time to time decide.

 

24.                                 Severability.  In case any one or more of the provisions of
this Mortgage, the Guaranty, the Collateral Assignment of Leases and Rents, the
Loan Agreement, or any other agreement now or hereafter executed in connection
with any one or more of the foregoing are held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision hereof.  Each
of the provisions of every such agreement, document or instrument shall be
enforceable by Agent to the fullest extent now or hereafter not prohibited by
applicable law.

 

25.                                 No
Waiver.  No consent or waiver,
express or implied, by Agent to or of any Default by Mortgagor shall be
construed as a consent or waiver to or of any other Default at the same time or
upon any future occasion.

 

26.                                 Waivers
By Mortgagor.  Mortgagor, to the
fullest extent that Mortgagor may do so, hereby: (a) agrees that Mortgagor will
not at any time insist upon, plead, claim or take the benefit or advantage of
any law now or hereafter in force providing for any appraisement, valuation,
stay or extension, or any redemption after foreclosure sale, and waives and
releases all rights of redemption after foreclosure sale, valuation,
appraisement, stay of execution, notice of election to mature or declare due
the debt secured hereby; and (b) waives all rights to a marshalling of the
assets of Mortgagor, including the Mortgaged Property, or to a sale in inverse
order of alienation in the event of a sale hereunder of the Mortgaged Property,
and agrees not to assert any right under any statute or rule of law pertaining
to the marshalling of assets, sale in inverse order of alienation, or other
matters whatever to defeat, reduce or affect the right of Agent under the terms
of this Mortgage or the Guaranty to a sale of the Mortgaged Property for the
collection of the indebtedness evidenced by the Guaranty without any prior or
different resort for collection, or the right of Agent to the payment of such
indebtedness out of the proceeds of sale of the Mortgaged Property in preference
to every other claimant whatever.

 

13

 

27.                                 Business
Loan: Not Personal Residence. 
Mortgagor covenants, warrants and represents that all of the proceeds of
the Loan secured hereby shall be used for business or commercial purposes, none
of the proceeds of the Loan secured hereby shall be used for personal, family
or household purposes, and that no individual liable for the Loan resides or
intends to reside in any portion of the Mortgaged Property.

 

28.                                 Certification.
The undersigned hereby certify that (a) Mortgagor is a duly organized, validly
existing limited partnership organized and in good standing under the laws of
the State of Delaware, and (b) that the execution and delivery hereof and of
all of the other Loan Documents by Mortgagor has been duly authorized by a
resolution of First Union Real Estate Equity and Mortgage Investments which is
in full force and effect.

 

29.                                 Governing
Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial.

 

a.                                       Substantial
Relationship.  It is understood and
agreed that all of the Loan Documents were delivered in the Commonwealth of
Massachusetts, which Commonwealth the parties agree has a substantial
relationship to the parties and to the underlying transactions embodied by the
Loan Documents.

 

b.                                      Place
of Delivery.  Mortgagor agrees to
furnish to Agent at Agent’s office in Boston, Massachusetts all further
instruments, certifications and documents to be furnished hereunder.

 

c.                                       Governing
Law.  This Mortgage, except as otherwise
provided in herein, and each of the other Loan Documents shall in all respects
be governed, construed, applied and enforced in accordance with the internal
laws of the Commonwealth of Massachusetts without regard to principles of
conflicts of law.

 

d.                                      Exceptions.  Notwithstanding the foregoing choice of law:

 

i)                                         The
procedures governing the enforcement by Agent of its foreclosure and other
remedies against Mortgagor under this Mortgage and under the other Loan
Documents with respect to the Mortgaged Property or other assets situated in
the Commonwealth of Pennsylvania, including by way of illustration, but not in
limitation, actions for foreclosure, for injunctive relief or for the
appointment of a receiver shall be governed by the laws of the Commonwealth of
Pennsylvania;

 

ii)                                      Agent
and each of the Lenders shall comply with applicable law in the Commonwealth of
Pennsylvania to the extent required by the law of such jurisdiction in
connection with the foreclosure of the security interests and liens created
under this Mortgage and the other Loan

 

14

 

Documents with respect to
the Mortgaged Property or other assets situated in the Commonwealth of
Pennsylvania; and

 

iii)                                   provisions
of Federal law and the law of the Commonwealth of Pennsylvania shall apply in
defining the terms Hazardous Materials, Environmental Legal Requirements and
Legal Requirements applicable to the Mortgaged Property as such terms are used
in this Mortgage.

 

Nothing
contained herein or any other provisions of the Loan Documents shall be
construed to provide that the substantive laws of the Commonwealth of
Pennsylvania shall apply to any parties’ rights and obligations under any of
the Loan Documents, which, except as expressly provided in clauses (i), (ii)
and (iii) of this Section 30(d), are and shall continue to be governed by
the substantive law of Commonwealth of Massachusetts, except as set forth in
clauses (i), (ii) and (iii) of this Section 30(d).  In addition, the fact that portions of the
Loan Documents may include provisions drafted to conform to the law of the Commonwealth
of Pennsylvania is not intended, nor shall it be deemed, in any way, to
derogate the parties’ choice of law as set forth or referred to in this
Mortgage or in the other Loan Documents. 
The parties further agree that the Agent may enforce its rights under
the Loan Documents including, but not limited to, its rights to sue the
Mortgagor or to collect any outstanding indebtedness in accordance with
applicable law.

 

e.                                       Consent
to Jurisdiction.  Mortgagor hereby
consents to personal jurisdiction in any state or Federal court located within
the Commonwealth of Massachusetts.

 

30.                                 Advance
Money Mortgage. This Mortgage secures future advances made pursuant to the
Loan Agreement, which future advances are guarantied by the Mortgagor pursuant
to the Guaranty.  Without limiting the
foregoing, this Mortgage secures all advances made by Agent or any Lender of
any kind or nature described in 42 Pa. C.S. §8144.  The maximum principal amount that may be
secured by this Mortgage is $53,000,000.00, plus all advances made pursuant to
any provisions of the Mortgage; provided that in no event shall any Lender be
obligated to advance in excess of the stated principal amount of the Note
evidencing the indebtedness secured hereby. 
If Mortgagor sends a written notice to Agent or any Lender which
purports to limit the indebtedness secured by this Mortgage and to release the
obligation of Agent or any Lender to make any additional advances, such notice
shall be ineffective as to any future advances made: (i) to enable completion
of improvements on the Property for which the loan secured hereby was
originally made; (ii) to pay taxes, assessments, maintenance charges and
insurance premiums; (iii) for costs incurred for protection of the Property or
the lien of this Mortgage; (iv) expenses incurred by Agent or any Lender by
reason of a default of Mortgagor hereunder or under the Loan Documents; and (v)
any other costs incurred by Agent or any Lender to protect and preserve the
Property.  It is the intention of the
parties hereto that any such advance made by Agent or any Lender after any such
notice by Mortgagor shall be secured by the lien of this Mortgage on the
Property.

 

15

 

31.                                 Representations,
Warranties and Covenants Regarding the Ground Lease.  In addition to Mortgagor’s representations,
warranties and covenants elsewhere contained herein, the Mortgagor represents,
warrants, covenants and agrees as follows:

 

a.                                       The
Ground Lease is valid, binding and will be in full force and effect with
respect to the Mortgagor until December 31, 2010, unless the same is
renewed in accordance with its terms and conditions.

 

b.                                      The
Mortgagor will promptly pay, when due and payable, the rent and all other sums
and charges mentioned in and made payable by Mortgagor, as “Lessee” under the
Ground Lease.

 

c.                                       The
Mortgagor will promptly perform and observe all of the terms, covenants and
conditions required to be performed and observed by Mortgagor, as “Lessee”
under the Ground Lease, within the periods provided in the Ground Lease, and
will do all things necessary to preserve and to keep unimpaired its rights
under the Ground Lease.

 

d.                                      The
Mortgagor shall (a) promptly notify the Agent in writing of the receipt by Mortgagor
of any notice (other than notices customarily sent on a regular periodic basis)
from the lessor under the Ground Lease of any default in the performance or
observance of any of the terms, covenants, or conditions on the part of Mortgagor
to be performed or observed under the Ground Lease; (b) promptly notify the
Agent and the Lenders in writing of the receipt by Mortgagor of any notice from
the lessor under the Ground Lease of any attempted termination of the Ground
Lease pursuant to the provisions of the Ground Lease; and (c) promptly cause a
copy of each such notice received by Mortgagor from the lessor under the Ground
Lease to be delivered to the Agent.

 

e.                                       The
Mortgagor will, within twenty (20) days after written demand from the Agent,
deliver to the Agent an estoppel certificate in form and substance satisfactory
to the Agent.

 

f.                                         The
Mortgagor will furnish the Agent upon demand, proof of payment of all items
which are required to be paid by the Mortgagor pursuant to the Ground Lease.

 

g.                                      The
Mortgagor shall not consent to any waiver or modification, amendment or
cancellation of any provision of the Ground Lease without the prior written
consent of the Agent, and any such waiver, modification, amendment or
cancellation shall be null and void; the Mortgagor shall not consent to the
subordination of the Ground Lease to any mortgage of the leasehold interest of
the Mortgagor in the Mortgaged Property without the prior written consent of
the Agent.

 

h.                                      The
Mortgagor shall execute and deliver, on request of the Agent, such instruments
as the Agent may reasonably request and deem useful or required to

 

16

 

permit the Agent to cure
any default under the Ground Lease or permit the Agent to take such other
action as the Agent considers desirable to cure or remedy the matter in default
and preserve the interest of the Agent in the Mortgaged Property.

 

i.                                          Upon
the occurrence of an Event of Default hereunder and the expiration of any
applicable grace period without the cure thereof, or upon the failure of the Mortgagor
to take any action under this Section upon two (2) days written notice
from the Agent requesting such action, the Mortgagor hereby authorizes the Agent
to pay any and all rental payments or similar sums to be paid by the Mortgagor,
payment of which is then due under the Ground Lease, with interest or penalties
thereon if charged by the lessor under the Ground Lease; and to incur and pay
all sums reasonably necessary to protect Agent’s rights hereunder and under the
Ground Lease.  Such sums shall be
included in the Obligations secured hereby.

 

32.                                 Headings.  Headings and captions in this Mortgage are
for convenience and reference only and the words and phrases contained therein
shall in no way be held to explain, modify, amplify or aid in the
interpretation, construction or meaning of any of the provisions hereof.

 

33.                                 Time
of Essence.  Time shall be of the
essence of each and every provision of this Mortgage and each of the other Loan
Documents.

 

[SIGNATURE PAGE FOLLOWS]

 

17

 

IN WITNESS WHEREOF, Mortgagor has caused this Mortgage
to be duly executed and delivered as a sealed instrument as of the     
day of November, 2004.

 

	
   

  	
   

  	
  Mortgagor:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FT-CHURCHILL PROPERTY L.P.,

  a Delaware limited partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  FT-FIN GP LLC, its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  FIRST UNION REAL ESTATE

  EQUITY AND MORTGAGE

  INVESTMENTS, its Sole Member

  
	
  Sealed and delivered

  	
   

  	
   

  	
   

  
	
  in the presence of:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Carolyn Tiffany

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  

 

18

 

STATE OF NEW YORK

 

                                 ,
ss.

 

On this date, November        ,
2004, before me, the undersigned notary public, personally appeared Carolyn
Tiffany, as Chief Operating Officer of First Union Real Estate Equity and
Mortgage Investments, the sole member of FT-Fin GP LLC, the general partner of
FT-Churchill Property L.P., a limited partnership, proved to me through
satisfactory evidence of identification, which were                                             ,
to be the person whose name is signed on the preceding or attached document,
and acknowledged to me that he/she signed it voluntarily for its stated
purpose.

 

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notary
  Public

  
	
   

  	
   

  
	
   

  	
  My commission expires:

  

 

19

 

EXHIBIT “A”

 

LEGAL DESCRIPTION

 

20Exhibit
10.3

 

OWNERSHIP
INTEREST  PLEDGE AND
SECURITY AGREEMENT

 

OWNERSHIP INTEREST PLEDGE AND SECURITY
AGREEMENT (this “Pledge Agreement”),
dated as of November 18, 2004, by and between FT-FIN ACQUISITION LLC, a Delaware limited liability company (“Borrower”), and KEYBANK NATIONAL ASSOCIATION, a national banking association
having an address at 101 Federal Street, Boston, Massachusetts 02110, as agent
(KeyBank National Association, in such capacity as agent, hereinafter referred
to as “Agent”) for a syndicate of
Lenders (singly and collectively, the “Lenders”)
as specifically provided in the Loan Agreement (as defined below).

 

W  I  T  N  E  S
S  E  T  H

 

WHEREAS, pursuant to that certain Loan
Agreement dated as of November    , 2004 (as amended,
supplemented or otherwise modified from time to time, the “Loan Agreement”) entered into by and among the
Borrower, the Agent and the Lenders, the Agent and the Lenders have agreed to
make a loan to the Borrower in the aggregate principal amount of $53,000,000.00
(the “Loan”), upon the terms and
subject to the conditions set forth therein.

 

WHEREAS, the Borrower (i) is the record owner
and beneficial owner of those certain limited partnership interests listed on Schedule 1
attached hereto issued by the limited partnerships named therein (the “Limited Partnerships”), and (ii) is the
record owner and beneficial owner of those certain membership interests listed
on Schedule 1 attached hereto issued by the limited liability
companies named therein (the “Companies”),
(the “Limited Partnerships”, and the
“Companies” are hereinafter
collectively referred to as the “Subsidiaries”).

 

WHEREAS, as a condition to extending the
Loan, the Agent and the Lenders have required the Borrower to execute and
deliver this Pledge Agreement and certain other Security Documents to secure the
Borrower’s obligations under the Loan Agreement.

 

NOW, THEREFORE, in consideration of the
premises and to induce the Lenders to make the Loan under the Loan Agreement, the
Borrower hereby agrees with Agent and the Lenders as follows:

 

1.                                       Defined
Terms.  Unless otherwise defined herein,
terms which are defined in the Loan Agreement and used herein are so used as so
defined, and the following terms shall have the following meanings:

 

“Agent”:  as defined in the first paragraph of this
Pledge Agreement.

 

“Borrower”:  as defined in the first paragraph of this
Pledge Agreement.

 

“Cash
Management Agreement”: shall mean that certain Cash Management Agreement of
even date among the Borrower, various subsidiaries of the Borrower, the Agent
and the Lenders, as amended, supplemented or otherwise modified from time to
time.

 

1

 

“Collateral”:  means the Pledged Interests and all Proceeds
thereof.

 

“Consents”:  shall mean those certain Consents from the
Subsidiaries referenced in Section 4 of this Pledge Agreement.

 

“Lenders”:  as defined in the first paragraph hereto.

 

“Loan
Agreement”:  as defined in the
recitals of this Pledge Agreement.

 

“Loans”:  as defined in the recitals of this Pledge
Agreement.

 

“Loan”:  as defined in the recitals of this Pledge
Agreement.

 

“Obligations”:  means all indebtedness, obligations and
liabilities of “Borrower”:  as
defined in the first paragraph of this Pledge Agreement to the Agent and/or any
of the Lenders, whether now existing or hereafter arising, direct or indirect,
absolute or contingent, under any one or more of: (i) this Pledge Agreement;
(ii) the Loan Agreement, Note or any other Loan Document; and (iii) each of the
same as hereafter modified, amended, extended or replaced, including, without
limitation, the Obligations (as defined in the Loan Agreement).

 

“Pledge
Agreement”:  means this Ownership
Interest Pledge and Security Agreement, as amended, supplemented or otherwise
modified from time to time.

 

“Pledged
Interests”:  means all right, title
and interest of Borrower, whether now owned or hereafter acquired, in and to
the Subsidiaries, as listed on Schedule 1 hereto, together with all
interests, certificates, options or rights of any nature whatsoever which may
be issued or granted to Borrower by the Subsidiaries in respect of the
foregoing.

 

“Proceeds”:  means (i) Borrower’s right, title and
interest in and to all Distributions, monies, fees, payments, compensations and
proceeds now or hereafter payable in respect of the Pledged Interests, whether
payable as profits, Distributions, asset Distributions, repayment of loans or
capital or otherwise and including all “proceeds” as such term is defined in Section 9-102
of the UCC; (ii) all books, records, electronically stored data and information
relating to the Pledged Interests and all rights of access to such books,
records and information; (iii) all contract rights, general intangibles,
claims, powers, privileges, benefits and remedies of Borrower relating to the
foregoing; (iv) all additions to the Pledged Interests, all substitutions
therefor and all replacements thereof; and (v) all cash or non-cash proceeds of
any of the foregoing.

 

“Subsidiaries”:  as defined in the recitals of this Pledge Agreement.

 

“UCC”:  means the Uniform Commercial Code from time
to time in effect in The Commonwealth of Massachusetts; provided, that if by
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest granted hereunder in the Collateral is
governed by the Uniform Commercial Code of a jurisdiction other than
Massachusetts, “UCC” means the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of provisions hereof relating to such perfection
or effect of perfection on non-perfection.

 

2

 

2.                                       Pledge;
Grant of Security Interest.  As security
for the full and punctual payment and performance of the Obligations when due
and payable (whether upon stated maturity, by acceleration or otherwise), Borrower
hereby transfers, assigns, grants, bargains, sells, conveys, hypothecates,
pledges, sets over, endorses over and delivers to Agent all the Pledged
Interests, and Borrower hereby grants, pledges, hypothecates, transfers and
assigns to Agent a continuing lien on and security interest in all of the
Collateral.

 

3.                                       Delivery
of Certificates, Instruments, Etc.  Borrower
shall deliver to Agent:

 

a.                                       all
original certificates, instruments and other documents, if any, evidencing or
representing the Pledged Interests, concurrently with the execution and
delivery of this Pledge Agreement; and

 

b.                                      the
original certificates, instruments or other documents, if any, evidencing or
representing all other Collateral (except for collateral which this Pledge
Agreement specifically permits Borrower to retain) within five (5) days after Borrower’s
receipt thereof.

 

4.                                       Powers
and Transfer Instruments.  Concurrently
with the delivery to the Agent of this Pledge Agreement and each certificate,
if any, representing the Pledged Interests, Borrower shall deliver a duly
executed Consent from each Subsidiary.

 

5.                                       Representations
and Warranties.  Borrower represents and
warrants that:

 

a.                                       Except
for any consents as may be required in connection with any disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally or as otherwise contemplated by the Loan Agreement, no consent of any
other person or entity (including, without limitation, any owner or creditor of
Borrower), and no license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing (other than the filing of
financing statements under the UCC in order to perfect a security interest in
that portion of the Collateral in which a security interest is perfected by
filing) or declaration with any governmental instrumentality is required in
connection with (i) the execution, delivery, performance, validity or
enforceability of this Pledge Agreement, (ii) the perfection or maintenance of
the security interest created hereby (including the first priority nature of
such security interest) or (iii) the exercise by the Agent of any rights
provided for in this Pledge Agreement;

 

b.                                      The
Pledged Interests constitute all of the ownership interests owned by Borrower
in each of the Subsidiaries;

 

c.                                       All
the Pledged Interests have been duly and validly issued and are fully
paid.  No certificate or other instrument
has been issued at any time to evidence the Pledged

 

3

 

Interests that has not
been delivered to the Agent pursuant to Section 3 of this Pledge
Agreement.  None of the limited
partnership interests or the membership interests comprising the Collateral are
dealt in or traded on securities exchanges or in securities markets, and none
by its terms expressly provides that it is a security governed by Article 8
of the UCC or that it is an investment company security, and none is held in a
securities account (as defined in Section 8-501 of the UCC);

 

d.                                      Borrower
is the sole holder of record and sole beneficial owner of, and has good and
valid title to, the Pledged Interests, free of any and all liens or options in
favor of, or claims of, any other Person, except the liens in existence on the
date hereof and described on Schedule 1 hereto (“Permitted Liens”) and the lien created in
favor of the Agent by this Pledge Agreement;

 

e.                                       Upon
the filing of the Form UCC-1 Statements referred to in Section 13, the
lien granted pursuant to this Pledge Agreement will constitute a valid,
perfected lien on such Pledged Interests and related Collateral, subject only
to Permitted Liens, with respect to that portion of the Collateral in which a
security interest is perfected by the filing of a financing statement,
enforceable as such against all creditors of Borrower and any Persons
purporting to purchase any Pledged Interests and related Collateral from Borrower;
and

 

f.                                         There
are no restrictions on the transfer of the Collateral to the Agent hereunder,
or with respect to any subsequent transfer thereof or realization thereupon by
the Agent and/or the Lenders (or, if there are any such restrictions, such
transfer restrictions have been duly waived by all required parties), and, as set
forth in the Consents, Borrower has obtained all consents needed in connection
with any such transfer or subsequent transfer, subject to matters resulting
from the operation of law.

 

6.                                       Covenants.   Borrower covenants and agrees with Agent and
the Lenders that from and after the date of this Pledge Agreement until this
Pledge Agreement shall be terminated:

 

a.                                       If
Borrower shall, as a result of its ownership of the Pledged Interests, become
entitled to receive or shall receive (i) any limited liability company
certificate (including, without limitation, any certificate representing a
dividend or a Distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights, (ii) any stock, (iii) any limited
partnership interests (including, without limitation, any certificate
representing a dividend or a Distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights, or (iv) any property
other than cash, whether in addition to, in substitution of, as a conversion
of, or in

 

4

 

exchange for any of the
Pledged Interests, or otherwise in respect thereof, Borrower shall accept the
same as Agent’s agent, hold the same in trust for Agent and deliver the same
forthwith to Agent in the exact form received, duly endorsed by Borrower to
Agent, if required, together with an undated assignment or power covering such
certificate, duly executed in blank and with, if Agent so requests, signature
guaranteed, to be held by Agent hereunder as additional security for the
Obligations.

 

b.                                      Without
the prior written consent of Agent, Borrower will not, directly or indirectly
(i) vote to enable, or take any other action to permit, the issuer(s) of the
Pledged Interests to issue any interests or shares, as applicable, or to issue
any other securities convertible into or granting the right to purchase or
exchange for any interests of the issuer(s) of the Pledged Interests, or (ii)
if prohibited by the Loan Agreement, sell, assign, transfer, exchange or
otherwise dispose of, or grant any option with respect to, the Collateral, or
(iii) create, incur or permit to exist any lien or option in favor of, or any
claim of any person or entity with respect to, any of the Collateral, or any
interest therein, except for the lien provided for by this Pledge Agreement and
liens permitted under the Loan Agreement. 
Borrower will defend the right, title and interest of Agent in and to
the Collateral against the claims and demands of all Persons whomsoever.

 

c.                                       At
any time and from time to time, upon the written request of Agent, and at the
sole expense of Borrower, Borrower will promptly and duly execute and deliver
such further instruments and documents and take such further actions as Agent
may reasonably request for the purposes of obtaining or preserving the full
benefits of this Pledge Agreement and of the rights and powers herein
granted.  If any amount payable under or
in connection with any of the Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be promptly delivered to Agent, duly endorsed in a manner
satisfactory to Agent, to be held as Collateral pursuant to this Pledge
Agreement.

 

d.                                      Borrower
agrees to pay, and to indemnify and save Agent harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
stamp, excise, sales or other taxes (other than income taxes on the income of
Agent or any of the Lenders) which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Pledge Agreement.

 

e.                                       Borrower
shall, upon request from the Agent, from time to time, cause the issuer of any
securities comprising any of the Collateral which may be, but have not been,
certificated, to issue certificates with respect thereto in the name of

 

5

 

Borrower or, if so
requested by the Agent, in the name of the Agent as secured party.

 

f.                                         Borrower
shall not exercise any right with respect to the Collateral which would dilute
or adversely affect Agent’s rights in the Collateral.

 

7.                                       Cash
Dividends; Distributions; Voting Rights.

 

a.                                       Unless
an Event of Default shall have occurred and be continuing, Borrower shall be
permitted to exercise all voting rights with respect to the Pledged Interests; provided,
however, that Borrower shall not, without the prior written consent of
Agent in each instance, which consent shall not be unreasonably withheld, vote
the Collateral in favor of, or consent to, any resolution or action which does
or might:

 

i.                                          impose
any restrictions upon the sale, transfer or disposition of the Collateral other
than restrictions, if any, the application of which is waived to the full
satisfaction of the Agent as to the Collateral; or

 

ii.                                       result
in the issuance of any additional interest in the Subsidiaries, or of any class
of security, which issuance might adversely affect the value of the Collateral;
or

 

iii.                                    vest
additional powers, privileges, preferences or priorities to any other class of
interest in the Subsidiaries to the detriment of the value of, or rights
accruing to, the Collateral; or

 

iv.                                   except
as permitted in the Loan Agreement, permit the Subsidiaries to sell, transfer,
assign, pledge, mortgage or otherwise encumber any property owned by any of
them, or to incur any new indebtedness in respect of such property, unless
Agent has given its prior written consent.

 

b.                                      Subject
to the terms and provisions hereof relating to the rights and remedies of the
Agent after the occurrence and during the continuance of an Event of Default,
in accordance with the terms and conditions of the Loan Agreement (including,
without limitation, Sections 7.14, 7.15 and 7.16 thereof), the Consents, the
Payment Direction Letters and the Cash Management Agreement (including, without
limitation, Section 2.2 thereof), any and all cash dividends or
Distributions or any other payments received by Borrower in respect of the
Collateral shall be directly deposited in a designated Depository Account in
the name of Borrower.  Borrower agrees
that, to the extent that Borrower receives directly any cash dividends or
Distributions or any other payments which are required to be deposited in a
designated Depository Account as provided for in the Loan Agreement, the
Consents and/or the Cash Management Agreement, then

 

6

 

(i) such amounts shall be
deemed to be Collateral and shall be held in trust for the benefit of Agent,
(ii) such amounts shall not be commingled with any other funds or property of Borrower,
and (iii) Borrower shall deposit such amounts in the applicable Depository
Account within three Business Days of receipt.

 

8.                                       Rights
of Agent.

 

a.                                       If
an Event of Default shall have occurred and be continuing, Agent shall have the
right to receive any and all cash dividends or Distributions or any other
amounts paid in respect of the Collateral and make application thereof to the Borrower
Obligations, in such order as Agent, in its sole discretion, may elect.  In connection therewith, if an Event of
Default shall have occurred and be continuing, the Agent shall have the right
to direct the issuer(s) of the Pledged Interests to pay all such cash dividends
or Distributions or any other payments directly to the Agent or as otherwise directed
by the Agent.

 

b.                                      If
an Event of Default shall have occurred and be continuing, then all such
Pledged Interests at Agent’s option shall be registered in the name of Agent or
its nominee, and Agent or its nominee may thereafter exercise (x) all voting
and other rights pertaining to such Pledged Interests and (y) any and all
rights of conversion, exchange, subscription and any other rights, privileges
or options pertaining to such Pledged Interests as if Agent were the absolute
owner thereof (including, without limitation, the right to exchange at its
discretion any and all of the Pledged Interests upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the
organizational structure of Borrower, or upon the exercise by Borrower or Agent
of any right, privilege or option pertaining to such Pledged Interests, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Interests with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as it may determine),
all without liability except to account for property actually received by it,
but Agent shall have no duty to exercise any such right, privilege or option
and shall not be responsible for any failure to do so or delay in so doing.

 

c.                                       The
rights of Agent hereunder shall not be conditioned or contingent upon the
pursuit by Agent of any right or remedy against Borrower or against any other
person or entity which may be or become liable in respect of all or any part of
the Obligations or against any other Collateral security therefor, guarantee
thereof or right of offset with respect thereto.  Agent shall not be liable for any failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so, nor shall it be under any obligation to sell or otherwise
dispose of any Collateral upon the request of Borrower or any other person or
entity or to take any other action whatsoever with regard to the Collateral or
any part thereof.

 

7

 

9.                                       Actions
By Agent.  Borrower hereby designates
Agent as the attorney-in-fact of Borrower to: (a) after the occurrence and
during the continuance of an Event of Default, endorse in favor of Agent any of
the Collateral; (b) after the occurrence and during the continuance of an Event
of Default, cause the transfer of any of the Collateral in such name as Agent
may from time to time determine; (c) cause the issuance of certificates for
book entry and/or uncertificated securities; (d) renew, extend or roll over any
Collateral; (e) make, demand and initiate actions to enforce any of the
Collateral or rights therein; and (f) take any other action to effectuate the
terms and provisions of this Pledge Agreement. 
Agent may take such action with respect to the Collateral as Agent may
reasonably determine to be necessary to protect and preserve its interest in
the Collateral.  Except as otherwise
provided herein, all of the rights, remedies, powers, privileges and
discretions included in this Section 9 may be exercised by Agent whether
or not the Obligations are then due and whether or not an Event of Default has
occurred.  The within designation and
grant of power of attorney is coupled with an interest, is irrevocable until
the lien created by this Pledge Agreement is terminated by a written instrument
executed by a duly authorized officer of Agent. 
The power of attorney shall not be affected by subsequent disability or
incapacity of Borrower.  Agent shall not
be liable for any act or omission to act pursuant to this Section 9,
except for any act or omission to act which is in actual bad faith.

 

10.                                 Remedies.

 

a.                                       If
an Event of Default shall have occurred and be continuing, Agent may exercise,
in addition to all other rights and remedies granted in this Pledge Agreement
and in any other instrument or agreement securing, evidencing or relating to
the Obligations, all rights and remedies of a secured party under the UCC.  Without limiting the generality of the
foregoing, Agent, if an Event of Default shall have occurred and be continuing,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon Borrower or any other person or entity (all and each of
which demands, presentments, protests, advertisements or notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give option or options to purchase or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker’s board or office of Agent or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk.  Agent shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in Borrower,
which right or equity is hereby waived or

 

8

 

released.  Agent shall apply any Proceeds from time to
time held by it and the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral
or the rights of Agent hereunder, including, without limitation, reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Obligations, in such order as Agent may elect, and only after such application
and after the payment by Agent of any other amount required by any provision of
law, including, without limitation, Section 9-615(a) of the UCC, need
Agent account for the surplus, if any, to Borrower.  To the extent permitted by applicable law, Borrower
waives all claims, damages and demands it may acquire against Agent arising out
of the exercise by Agent of any of its rights hereunder, except for any claims,
damages and demands it may have against Agent arising from the gross negligence
or willful misconduct of Agent.  If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition. 
Borrower shall remain liable for any deficiency if the proceeds of any
sale or other disposition of Collateral are insufficient to pay the Obligations
and the fees and disbursements of any attorneys employed by Agent to collect
such deficiency.

 

b.                                      If
any Event of Default occurs and is continuing, any deposits, balances or other
sums credited by or due from Agent, any affiliate of Agent or any of the
Lenders, or from any affiliate of any of the Lenders, to Borrower may to the
fullest extent not prohibited by applicable law at any time or from time to
time, without regard to the existence, sufficiency or adequacy of any other
collateral, and without notice or compliance with any other condition precedent
now or hereafter imposed by statute, rule of law or otherwise, all of which are
hereby waived to the fullest extent permitted by law, be set off, appropriated
and applied by Agent against any or all of the Obligations irrespective of
whether demand shall have been made, in such manner as Agent in its sole and
absolute discretion may determine. 
Within three (3) Business Days of making any such set off, appropriation
or application, Agent agrees to notify Borrower thereof, provided the failure
to give such notice shall not affect the validity of such set off or
appropriation or application.  ANY AND
ALL RIGHTS TO REQUIRE AGENT OR ANY OF THE LENDERS TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

9

 

11.                                 Private
Sales.

 

a.                                       Borrower
recognizes that Agent may be unable to effect a public sale of any or all the
Pledged Interests, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof.  Borrower acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to Agent
than if such sale were a public sale. 
Agent shall be under no obligation to delay a sale of any of the Pledged
Interests for the period of time necessary to permit Borrower to register such
securities for public sale under the Securities Act of 1933, as amended, or
under applicable state securities laws, even if Borrower would agree to do so.

 

b.                                      Borrower
further agrees to use its reasonable efforts to do or cause to be done all such
other acts as may be necessary to make any sale or sales of all or any portion
of the Pledged Interests pursuant to this paragraph 11 valid and binding and in
compliance with any and all other applicable requirements of law; provided,
however, that Borrower shall be under no obligation to register the
Pledged Interests for public sale under the Securities Act of 1933, as amended,
or under applicable state securities laws. 
Borrower further agrees that a breach of any of the covenants contained
in this paragraph 11 will cause irreparable injury to Agent, that Agent has no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this paragraph 11 shall be specifically
enforceable against Borrower, and Borrower hereby waives and agrees not to
assert any defenses against an action for specific performance of such
covenants except for a defense that no default has occurred with respect to the
Obligations.

 

12.                                 Limitation
on Duties Regarding Collateral.  Agent’s
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the UCC or
otherwise, shall be to deal with it in the same manner as Agent deals with
similar securities and property for its own account.  Neither Agent nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of Borrower or otherwise.

 

13.                                 Financing
Statements; Other Documents.  This Pledge
Agreement constitutes an authenticated record, and Borrower hereby authorizes
the Agent to file one or more UCC-1 financing statements, continuation
statements or other documents with respect to the

 

10

 

Collateral, without the
signature of Borrower, and in such filing offices as the Agent shall deem
reasonably appropriate.  Borrower agrees
to deliver any other document or instrument which Agent may reasonably request
in connection with the administration and enforcement of this Pledge Agreement
or with respect to the Collateral for the purposes of obtaining or preserving
the full benefits of this Pledge Agreement and of the rights and powers herein
granted.

 

14.                                 Powers
Coupled with an Interest.  All
authorizations and agencies and powers herein contained with respect to the
Collateral are irrevocable and coupled with an interest.

 

15.                                 Security
Interest Absolute.  All rights of the
Agent hereunder, the grant of a security interest in the Collateral and all
obligations of Borrower hereunder, shall be absolute and unconditional
irrespective of (i) any lack of validity or enforceability of the Loan
Agreement, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (ii) any change
in time, manner or place of payment of, or in any other term of, all or any of
the Obligations, or any other amendment or waiver of or any consent to any
departure from the Note or any other agreement or instrument, (iii) any
exchange, release or non-perfection of any other collateral, or any release or
amendment or waiver of or consent to or departure from any guarantee, for all
or any of the Obligations, or (iv) any other circumstance which might otherwise
constitute a defense available to (other than the defense of indefeasible
payment), or a discharge of, Borrower in respect of the Obligations or in
respect of this Pledge Agreement.

 

16.                                 Fees
and Expenses.   To the extent provided in
the Loan Agreement, Borrower shall be obligated to, upon demand, pay to the
Agent the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts or agents which the Agent
or any Lender may incur in connection with (i) the sale of, collection
from, or other realization upon, any of the Collateral, or (ii) during the
continuance of an Event of Default, the exercise or enforcement of any of the
rights of the Agent hereunder.  Any such amounts
payable as provided hereunder or thereunder shall be additional obligations
secured hereby and by the other Security Documents.

 

17.                                 Termination.  Upon the payment in full of the Obligations,
in immediately available funds, including, without limitation, all unreimbursed
costs and expenses of the Agent and of each Lender for which Borrower is
responsible, the Agent shall release the Collateral granted to the Agent as
provided for herein.  However, such
release by the Agent shall not be deemed to terminate or release Borrower from
any obligation or liability under this Pledge Agreement which specifically by
its terms survives the payment in full of the Obligations.

 

18.                                 Severability.  Any provision of this Pledge Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent

 

11

 

of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.

 

19.                                 Paragraph
Headings.  The paragraph headings used in
this Pledge Agreement are for convenience of reference only and are not to
affect the construction, or be taken into consideration in interpreting, this
Pledge Agreement.

 

20.                                 No
Waiver; Cumulative Remedies.  Agent shall
not by any act delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any default or in
any breach of any of the terms and conditions hereof.  No failure to exercise, nor any delay in
exercising, on the part of Agent, any right, power or privilege hereunder shall
operate as a waiver thereof.  No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.  A waiver by Agent of any
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which Agent would otherwise have on any future
occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any rights or remedies provided by law.

 

21.                                 Waivers
and Amendments; Successors and Assigns; Governing Law; Venue.  None of the terms or provisions of this
Pledge Agreement may be waived, amended, or otherwise modified except by a
written instrument executed by the party against which enforcement of such
waiver, amendment, or modification is sought. 
This Pledge Agreement shall be binding upon Borrower, Agent and the
Lenders, and the successors and assigns of each, and shall inure to the benefit
of Agent and the Lenders and their successors and assigns and to the benefit of
Borrower and Borrower’s successors and permitted assigns; provided that Borrower
shall not have any right to (i) assign this Pledge Agreement or any interest
herein, or (ii) to assign any interest in the Collateral or any part thereof,
or otherwise pledge, encumber or grant any option with respect to the
Collateral or any part thereof, or any cash or property held by Borrower as
Collateral under this Pledge Agreement if any such assignment, pledge,
encumbrance or grant would constitute a violation of the Loan Agreement.  The rights of Agent under this Pledge
Agreement shall automatically be transferred to any transferee to which Agent
transfers the Note and Loan Agreement pursuant to the terms thereof.  The construction, interpretation, validity,
enforceability and effect of all provisions of this Pledge Agreement including,
but not limited to, the payment of the Obligations and the legality of the
interest rate and other charges shall be construed and enforced in accordance
with the internal laws of The Commonwealth of Massachusetts (without regard to
conflicts of laws).  Borrower agrees to
submit to non-exclusive personal jurisdiction in Suffolk County, in The
Commonwealth of Massachusetts in any action or proceeding arising out of this
Pledge Agreement and, in furtherance of such agreement, Borrower hereby agrees
and consents that, without limiting other methods of obtaining jurisdiction,
personal jurisdiction over

 

12

 

Borrower in any such
action or proceeding may be obtained within or without the jurisdiction of any
court located in The Commonwealth of Massachusetts and that any process or
notice of motion or other application to any such court in connection with any
such action or proceeding may be served upon Borrower by registered or
certified mail to or by personal service at the last known address of Borrower,
whether such address be within or without the jurisdiction of any such court.

 

22.                                 Executive
Offices.  Borrower shall not (i) change
the location of its chief executive offices or sole place of business from the
location as of the date hereof or remove its books and records from such
location, or (ii) change its name, identity or structure if, in either case,
such change is prohibited by the Loan Agreement.

 

23.                                 Notices.  Notices by Agent to Borrower, to be
effective, shall be in writing and shall be hand-delivered or sent by Federal
Express, or other reputable national overnight courier service, or by postage
pre-paid registered or certified mail, return receipt requested, addressed to Borrower
at its address set forth below its signature hereto, with a copy in each
instance to Post Heymann & Koffler LLP at the address set forth in Section 14.1
of the Loan Agreement, and shall be deemed to have been duly given or made (a)
when delivered if hand-delivered or sent by Federal Express, or other reputable
national overnight courier service, or (b) when delivered if sent by registered
or certified mail.  Any communications by
Borrower to Agent may be given in any manner set forth in the immediately
preceding sentence, with a copy to Riemer & Braunstein LLP, Attention: Kevin
J. Lyons, Esq., to the addresses set forth in Section 14.1 of the Loan
Agreement.

 

24.                                 Entire
Understanding.  Agent acknowledges that
this Pledge Agreement, the Note and the other Loan Documents and Security
Documents set forth the entire agreement and understanding of Lender and Borrower
with respect to the Loan and that no oral or other agreements, understanding,
representation or warranties exist with respect to the Loan, other than those
set forth in this Pledge Agreement, the Note, and the other Loan Documents and
Security Documents.

 

25.                                 Counterpart
Signatures.  This Pledge Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
instrument.

 

 

[SIGNATURE
PAGE FOLLOWS]

 

13

 

IN WITNESS WHEREOF, the undersigned has
caused this Pledge Agreement to be duly executed and delivered as of the date
first above written.

 

 

	
   

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FT-FIN ACQUISITION LLC

  A Delaware limited Liability Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  PARK PLAZA MALL, LLC, a

  Delaware limited liability company, its

  Sole Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  FIRST UNION REAL ESTATE

  EQUITY AND MORTGAGE

  INVESTMENTS, its Sole Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Carolyn Tiffany

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Addresses:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.    Chief Executive
  Office:

  
	
   

  	
  c/o First Union Real Estate Equity and
  Mortgage Investments

  
	
   

  	
  7 Bulfinch Place, Suite 500

  
	
   

  	
  Boston, Massachusetts 02114

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.    Principal Place
  of Business:

  
	
   

  	
  c/o First Union Real Estate Equity and
  Mortgage Investments

  
	
   

  	
  7 Bulfinch Place, Suite 500

  
	
   

  	
  Boston, Massachusetts 02114

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL
  ASSOCIATION,

  
	
   

  	
  A national banking association

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Jeffry M. Morrison

  	
   

  
	
   

  	
   

  	
   

  	
  duly authorized

  	
   

  
										

 

S1

 

SCHEDULE 1

To Pledge

Agreement

 

DESCRIPTION OF PLEDGED INTERESTS

 

	
  Issuers of Pledged

  Interests

  	
   

  	
  Type of

  Interest

  	
   

  	
  Percentage

  of

  Issued

  Interests

  	
   

  	
  Permitted Liens

  
	
  FT-FLORIDA
  PROPERTY LLC

  	
   

  	
  Membership

  	
   

  	
  100.0%

  	
   

  	
  None

  
	
  FT-WD
  PROPERTY LLC

  	
   

  	
  Membership

  	
   

  	
  100.0%

  	
   

  	
  None

  
	
  FT-ORLANDO
  PROPERTY LLC

  	
   

  	
  Membership

  	
   

  	
  100.0%

  	
   

  	
  None

  
	
  FT-CHURCHILL
  PROPERTY L.P.

  	
   

  	
  Limited
  Partnership

  	
   

  	
  99%

  	
   

  	
  None

  
	
  FT-KRG
  PROPERTY L.P.

  	
   

  	
  Limited
  Partnership

  	
   

  	
  99%

  	
   

  	
  None

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]