Exhibit 10.14
Massachusetts
Loan No. C-337160
RECORDING REQUESTED BY
Kirkpatrick & Lockhart Nicholson Graham LLP
599 Lexington Avenue New York, New York 10022-6030
Attn: Jeffrey H. Weitzman, Esquire
WHEN RECORDED MAIL TO The Northwestern Mutual Life Ins. Co.
720 East Wisconsin Avenue - Rm N16WC
Milwaukee, WI 53202 Attn: Sandra T. Goddard
SPACE ABOVE THIS LINE FOR RECORDER' S USE
MORTGAGE and SECURITY AGREEMENT THIS MORTGAGE and SECURITY AGREEMENT is made as of the 28 th day of February, 2005 between RT TAUNTON, LLC, a Delaware limited liability company, whose mailing address is c/o CBRE Operating Partnership, L.P., 865 South Figueroa Street, Suite 3500, Los Angeles, California 90017, herein called " Mortgagor" , and THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation, whose mailing address is 720 E. Wisconsin Avenue, Milwaukee, WI 53202, herein called " Mortgagee" :
WITNESSETH, That Mortgagor, in consideration of the indebtedness herein mentioned, does hereby grant with mortgage covenants, convey, mortgage and warrant unto Mortgagee forever, with mortgage covenants, upon the statutory condition and with statutory power of sale and right of entry and possession, the following property (herein referred to as the " Property" ):
A. The land in Taunton, County of Bristol, Commonwealth of Massachusetts, described in Exhibit " A" attached hereto and incorporated herein (the " Land" );
B.
All easements, appurtenances, tenements and hereditaments belonging to or benefiting the Land, including, but not limited
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to, all waters, water rights, water courses, all ways, trees, rights, liberties and privileges; C. All improvements to the Land, including, but not limited to, all buildings, structures and improvements now existing or hereafter erected on the Land; all fixtures and equipment of every description belonging to Mortgagor which are or may be placed or used upon the Land or attached to the buildings, structures or improvements, including, but not limited to, all engines, boilers, elevators and machinery, all heating apparatus, electrical equipment, air-conditioning and ventilating equipment, water and gas fixtures, and all furniture and easily removable equipment; all of which, to the extent permitted by applicable law, shall be deemed an accession to the freehold and a part of the realty as between the parties hereto; and
D. Mortgagor' s interest in all articles of personal property of every kind and nature whatsoever, including, but not limited to, all carpeting, dehumidification equipment, cranes, truck scales, rails scales, now or hereafter located upon the Land or in or on the buildings and improvements and now owned or leased or hereafter acquired or leased by Mortgagor. Mortgagor agrees not to sell, transfer, assign or remove anything described in B, C and D above now or hereafter located on the Land without prior written consent from Mortgagee unless (i) such action does not constitute a sale or removal of any buildings or structures or the sale or transfer of waters or water rights and (ii) such action results in the substitution or replacement with similar items of equal value.
Without limiting the foregoing grants, Mortgagor hereby pledges to Mortgagee, and grants to Mortgagee a security interest in, all of Mortgagor' s present and hereafter acquired right, title and interest in and to the Property and any and all
E. cash and other funds now or at any time hereafter deposited by or for Mortgagor on account of tax, special assessment, replacement or other reserves required to be maintained pursuant to the Loan Documents (as hereinafter defined) with Mortgagee or a third party, or otherwise deposited with, or in the possession of, Mortgagee pursuant to the Loan Documents; and 2 F. surveys, soils reports, environmental reports, guaranties, warranties, architect' s contracts, construction contracts, drawings and specifications, applications, permits, surety bonds and other contracts relating to the acquisition, design, development, construction and operation of the Property; and
G. accounts, chattel paper, deposit accounts, instruments, equipment, inventory, documents, general intangibles, letter- of-credit rights, investment property and all other personal property of Mortgagor, in each case, to the extent associated with or arising from the ownership, development, operation, use or disposition of any portion of the Property; and H. present and future rights to condemnation awards, insurance proceeds or other proceeds at any time payable to or received by Mortgagor on account of the Property or any of the foregoing personal property.
All personal property hereinabove described is hereinafter referred to as the " Personal Property" .
If any of the Property is of a nature that a security interest therein can be perfected under the Uniform Commercial Code, this instrument shall constitute a security agreement and financing statement if permitted by applicable law and Mortgagor authorizes Mortgagee to file a financing statement describing such Property and, at Mortgagee' s request, agrees to join with Mortgagee in the execution of any financing statements and to execute any other instruments that may be necessary or desirable, in Mortgagee' s determination, for the perfection or renewal of such security interest under the Uniform Commercial Code.
TO HAVE AND TO HOLD the same unto Mortgagee for the purpose of securing: (a) Payment to the order of Mortgagee of the indebtedness evidenced by a promissory note of even date herewith (and any restatement, extension or renewal thereof and any amendment thereto) executed by Mortgagor for the principal sum of TWELVE MILLION DOLLARS, with a stated maturity date of April 1, 2012 (the " Maturity Date" ) and with interest as therein expressed (which promissory note, as such instrument may be amended, restated, renewed and extended, is hereinafter referred to as the " Note" ); and
(b) Payment of all sums that may become due Mortgagee under the provisions of, and the performance of each agreement of Mortgagor contained in, the Loan Documents.
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" Loan Documents" means this instrument, the Note, that certain Loan Application dated December 16, 2004 from Mortgagor to Mortgagee and that certain acceptance letter issued by Mortgagee dated February 4, 2005 (together, the " Commitment" ), that certain Absolute
Assignment of Leases and Rentsof even date herewith between Mortgagor and Mortgagee (the " Absolute Assignment" ), that certain Subordination, Non-Disturbance and Attornment Agreement of even date herewith between Chadwick' s (as hereinafter defined), Mortgagor and Mortgagee, that certain Certification of Borrower of even date herewith, that certain Limited Liability Company Supplement dated contemporaneously herewith, any other supplements and authorizations required by Mortgagee and any other agreement entered into or document executed by Mortgagor and delivered to Mortgagee in connection with the indebtedness evidenced by the Note, except for that certain Environmental Indemnity Agreement of even date herewith given by CBRE Operating Partnership, L.P., a Delaware limited partnership (the " Principal" ), and Mortgagor to Mortgagee (the " Environmental Indemnity Agreement" ), as any of the foregoing may be amended from time to time. TO PROTECT THE SECURITY OF THIS MORTGAGE, MORTGAGOR COVENANTS AND AGREES:
Payment of Debt . Mortgagor agrees to pay the indebtedness hereby secured (the " Indebtedness" ) promptly and in full compliance with the terms of the Loan Documents. Ownership . Mortgagor represents that it owns the Property and has good and lawful right to convey the same and that the Property is free and clear from any and all encumbrances whatsoever, except as appears in the title evidence accepted by Mortgagee. Mortgagor does hereby forever warrant and shall forever defend the title and possession thereof against the lawful claims of any and all persons whomsoever.
Maintenance of Property and Compliance with Laws . Mortgagor agrees to keep the buildings and other improvements now or hereafter erected on the Land in good condition and repair, subject to reasonable wear and tear, casualty excepted; not to commit or suffer any waste; to comply with all laws, rules and regulations affecting the Property; and to permit Mortgagee to enter at all reasonable times for the purpose of inspection and of conducting, in a reasonable and proper manner in compliance with all laws and regulations and subject to any limitation under the Chadwick' s Lease or any successive lease of the Property or any portion thereof, such tests as Mortgagee determines to be necessary in order to monitor Mortgagor' s compliance with applicable laws and regulations regarding hazardous materials affecting the Property. Tenants Using Chlorinated Solvents . Mortgagor agrees not to lease any of the Property, without the prior written consent of Mortgagee, to (i) dry cleaning operations that perform dry cleaning on site with chlorinated solvents or (ii) any other tenants that use chlorinated solvents in the operation of their businesses.
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Business Restriction Representation and Warranty . Mortgagor represents and warrants that Mortgagor, all persons and entities owning (directly or indirectly) an ownership interest in Mortgagor, all guarantors of all or any portion of the Indebtedness, and all persons and entities executing any separate indemnity agreement in favor of Mortgagee in connection with the Indebtedness: (i) are not, and shall not become, a person or entity with whom Mortgagee is restricted from doing business with under regulations of the Office of Foreign Asset Control (" OFAC" ) of the Department of the Treasury (including, but not limited to, those named on OFAC' s Specially Designated and Blocked Persons list) or under any statute, executive order (including, but not limited to, the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action; (ii) are not knowingly engaged in, and shall not knowingly engage in, any dealings or transaction or be otherwise associated with such persons or entities described in (i) above; and (iii) are not, and shall not become, a person or entity whose activities are regulated by the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 or the regulations or orders thereunder.
Insurance . Mortgagor agrees to keep, or cause to be kept, in accordance with the Commitment, the Property insured for the protection of Mortgagee and Mortgagee' s wholly owned subsidiaries and agents in such manner, in such amounts and in such companies as Mortgagee may from time to time approve in accordance with the Commitment, and to keep the policies therefor, properly endorsed, on deposit with Mortgagee, or at Mortgagee' s option, to keep certificates of insurance (Acord 28 or 27 for all property insurance and Acord 25 for all liability insurance) evidencing all insurance coverages required hereunder on deposit with Mortgagee, which certificates shall provide at least thirty (30) days notice of cancellation to Mortgagee and shall list Mortgagee as the certificate holder; that insurance loss proceeds from all property insurance policies, whether or not required by Mortgagee (less expenses of collection) shall be applied to the restoration of the Property in accordance with that certain lease dated as of October 15, 1997, between Chadwick' s of Boston, Inc. (" Chadwick' s" ), as successor-in-interest to Brylane, L.P. as tenant, and Mortgagor, as successor-in-interest to Condyne LLC as landlord (the " Chadwick' s Lease" ), so long as the Chadwick' s Lease is in effect and shall, at Mortgagee' s option, be applied on the Indebtedness, whether or not due, or to the restoration of the Property if the Chadwick' s Lease is not in effect. If the Chadwick' s Lease is no longer in effect, or if Mortgagee shall have the option to apply the insurance loss proceeds from all property insurance policies to the prepayment of the Indebtedness for any reason whatsoever, no prepayment privilege fee shall be due thereon.
Notwithstanding the foregoing provision, Mortgagee agrees that if the insurance loss proceeds are less than the unpaid principal balance of the Note, the insurance loss proceeds from all property insurance policies (less expenses of collection) shall be applied to restoration of the Property to its condition prior to the casualty in accordance
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with the Chadwick' s Lease, so long as the Chadwick' s Lease is in effect. If the Chadwick' s Lease is no longer in effect, Mortgagee agrees that, if the insurance loss proceeds are less that the unpaid principal balance due under the Note, and if the casualty occurs prior to the last year of the term of the Note, then the insurance loss proceeds shall be applied to restoration of the Property to its condition prior to the casualty, subject to satisfaction of the following conditions:
(a) There is no existing Event of Default at the time of casualty.
(b) The casualty insurer has not denied liability for payment of insurance loss proceeds as a result of any act, neglect, use or occupancy of the Property by Mortgagor or any tenant of the Property.
(c) Mortgagee shall be satisfied that all insurance loss proceeds so held, together with supplemental funds to be made available by Mortgagor, shall be sufficient to complete the restoration of the Property. Any remaining insurance loss proceeds may, at the option of Mortgagee, be applied on the Indebtedness, whether or not due, or be released to Mortgagor. (d) If required by Mortgagee, Mortgagee shall be furnished a satisfactory report addressed to Mortgagee from an environmental engineer or other qualified professional satisfactory to Mortgagee to the effect that no adverse environmental impact to the Property resulted from the casualty.
(e) Mortgagee shall release casualty insurance proceeds as restoration of the Property progresses provided that Mortgagee is furnished satisfactory evidence of the costs of restoration and if, at the time of such release, there shall exist no Monetary Default (as hereinafter defined) under the Loan Documents and no Non-Monetary Default with respect to which Mortgagee shall have given Mortgagor notice pursuant to the Notice of Default provision herein. If a Monetary Default shall occur or Mortgagee shall give Mortgagor notice of a Non-Monetary Default, Mortgagee shall have no further obligation to release insurance loss proceeds hereunder unless such default is cured within the cure period set forth in the Notice of Default provision contained herein. If the estimated cost of restoration exceeds $500,000.00, (i) the drawings and specifications for the restoration shall be approved by Mortgagee in writing prior to commencement of the restoration, and (ii) if the estimated cost of restoration is at least $500,000 but less than $1,000,000.00, Mortgagee shall receive an administration fee of $5,000.00, and if the estimated cost of restoration exceeds $1,000,000.00, Mortgagee shall receive an administration fee equal to 1% of the cost of restoration.
6 (f) Prior to each release of funds, Mortgagor shall obtain for the benefit of Mortgagee an endorsement to Mortgagee' s title insurance policy insuring Mortgagee' s lien as a first and valid lien on the Property subject only to liens and encumbrances theretofore approved by Mortgagee.
(g) Mortgagor shall pay all costs and expenses incurred by Mortgagee, including, but not limited to, outside legal fees, title insurance costs, third-party disbursement fees, third-party engineering reports and inspections reasonably deemed necessary by Mortgagee.
(h) All reciprocal easement and operating agreements benefiting the Property, if any, shall remain in full force and effect between the parties thereto on and after restoration of the Property.
(i) Mortgagee shall be satisfied that Projected Debt Service Coverage of at least 1.60 will be produced from the leasing of not more than 297,000 square feet of space to former tenants or approved new tenants with leases satisfactory to Mortgagee for terms of at least seven (7) years to commence not later than (30) days following completion of such restoration (" Approved Leases" ). (j) All leases in effect at the time of the casualty with tenants who have entered into a non-disturbance and attornment agreement or similar agreement with Mortgagee shall remain in full force and Mortgagee shall be satisfied that restoration can be completed within a timeframe such that each tenant thereunder shall be obligated, or each such tenant shall have elected, to continue the lease term at full rental (subject only to abatement, if any, during any period in which the Property or a portion thereof shall not be used and occupied by such tenant as a result of the casualty).
" Projected Debt Service Coverage" means a number calculated by dividing Projected Operating Income Available for Debt Service for the first fiscal year following restoration of the Property by the debt service during the same fiscal year under all indebtedness secured by any portion of the Property. For purposes of the preceding sentence, " debt service" means the greater of (x) debt service due under all such indebtedness during the first fiscal year following completion of the restoration of the Property or (y) debt service that would be due and payable during such fiscal year if all such indebtedness were amortized over 25 years (whether or not amortization is actually required) and if interest on such indebtedness were due as it accrues at the face rate shown on the notes therefor (whether or not interest payments based on such face rates are required). 7
" Projected Operating Income Available for Debt Service" means projected gross annual rent from the Approved Leases for the first full fiscal year following completion of the restoration of the Property less:
(A) The operating expenses of the Property for the last fiscal year preceding the casualty and (B) the following:
(i) a replacement reserve for future tenant improvements, leasing commissions and structural items based on not less than $0.50 per square foot of gross rentable area in the Property (it being acknowledged by Mortgagee that " gross rentable area" in the Property shall mean the 330,000 rentable square feet in the building on the Property, which specifically excludes all mezzanine floor area in the building) per annum;
(ii) the amount, if any, by which actual gross income during such fiscal period exceeds that which would be earned from the rental of 90% of the gross rentable area in the Property;
(iii) the amount, if any, by which the actual management fee is less than 1.0% of gross revenue during such fiscal period; (iv) if the Property is not leased in its entirety to a single tenant under a triple net lease, the amount, if any, by which the actual real estate taxes are less than $1.00 per square foot of gross rentable area in the Property per annum; and
(v) if the Property is not leased in its entirety to a single tenant under a triple net lease, the amount, if any, by which total actual operating expenses, excluding management fees, real estate taxes and replacement reserves, are less than $0.66 per square foot of gross rentable area in the Property per annum.
All projections referenced above shall be calculated in a manner satisfactory to Mortgagee.
Condemnation . Mortgagor hereby assigns to Mortgagee (i) any award and any other proceeds resulting from damage to, or the taking of, all or any portion of the Property, and (ii) the proceeds from any sale or transfer in lieu thereof (collectively, " Condemnation Proceeds" ) in connection with condemnation proceedings or the exercise of any power of eminent domain or the threat thereof (hereinafter, a " Taking" ), which awards and proceeds shall be applied in accordance with the Chadwick' s Lease, so long as the Chadwick' s Lease
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is in effect. If the Chadwick' s Lease is still in effect and if the Condemnation Proceeds are less than the unpaid principal balance of the Note and such damage or Taking occurs prior to the last year of the term of the Note, such Condemnation Proceeds (less expenses of collection) shall be applied to restoration of the Property to its condition, or the functional equivalent of its condition, prior to the Taking, subject to the conditions set forth above in the section entitled " Insurance" and subject to the further condition that restoration or replacement of the improvements on the Land to their functional and economic utility prior to the Taking be possible. If the Chadwick' s Lease is not in effect, any portion of such award and proceeds not applied to restoration shall, at Mortgagee' s option, be applied on the Indebtedness, whether due or not, or be released to Mortgagor, but such application or release shall not cure or waive any default under any of the Loan Documents.
Taxes and Special Assessments . Mortgagor agrees to pay or cause Chadwick' s or any other tenant of the Property to pay before delinquency all ta ...