Recording Requested By and
When Recorded Mail To:
Oppenheimer Wolff & Donnelly
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45 South Seventh Street
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Plaza VII, Suite 3400
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Minneapolis, Minnesota 55402
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Attn: Duane L. Paulson
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GECA Loan No. 2331
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MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT
AND FIXTURE FINANCING STATEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES, SECURITY
AGREEMENT AND FIXTURE FINANCING STATEMENT (this 'Mortgage') is
made this 20th day of November, 1995, between ANNTAYLOR
DISTRIBUTION SERVICES, INC., a Delaware corporation as Mortgagor,
whose address is 414 Chapel Street, New Haven, Connecticut 06511;
and GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY, a Delaware
corporation, as Mortgagee, whose address is P.O. Box 490,
Seattle, King County, Washington 98111-0490.
Mortgagee is making a loan (the 'Loan') in the principal
amount of Seven Million and No/100 Dollars ($7,000,000.00) to be
secured by that certain real property (the 'Realty') described in
Exhibit A attached hereto. The Loan, if not sooner paid, is due
and payable in full on November 30, 2002. The terms of the Loan
provide for: (i) monthly payments of principal and interest; and
(ii) adjustment in the amount of installment payments to a change
in the amortization period after the second loan year.
In consideration of the Loan and the sum of One and No/100
Dollars ($1.00) in hand paid by the Mortgagee, the receipt of
which is hereby acknowledged, Mortgagor does hereby MORTGAGE,
GRANT, BARGAIN, SELL, AND CONVEY, unto Mortgagee, its successors
and assigns, forever, AND GRANT TO THE MORTGAGEE A SECURITY
INTEREST IN, all of Mortgagor's estate, rights, title, claim,
interest and demand, either in law or in equity, of, in and to
the following property, whether the same be now owned or
hereafter acquired (the 'Property'):
(a) The Realty and all rights to the land lying in alleys,
streets and roads adjoining or abutting the Realty;
(b) All buildings, improvements and tenements now or
hereafter located on the Realty;
(c) All fixtures now or hereafter attached to the buildings
actually constituting a part of the buildings, improvements and
Realty which are necessary to the functional use of the building
itself, rather than the specific operation of Mortgagor's
business, which fixtures are generally limited to heating,
cooling, air-conditioning, ventilating, refrigerating, plumbing,
generating, power, lighting, fire prevention and extinguishing,
security and access control, boilers, water heaters and furnaces,
and all shrubbery and plants; all of which items shall be deemed
part of the real property and not severable wholly or in part
without material injury to the freehold;
(d) All easements, all access, air and development rights,
all minerals and oil, gas and other hydrocarbon substances, all
royalties, all water, water rights and water stock, and all other
rights, hereditaments, privileges, permits, licenses, franchises
and appurtenances now or hereafter belonging or in any way
appertaining to the Realty;
(e) All present and future contracts and policies of
insurance which insure Realty or any building, structures or
improvements thereon, or any such fixtures against casualties and
theft, and all monies and proceeds and rights thereto which may
be or become payable by virtue of any such insurance contracts or
policies;
(f) All of the rents, revenues, issues, profits and income of
the Property, and all present and future leases and other
agreements for the occupancy or use of all or any part of the
Realty, including without limitation all cash or security
deposits, advance rentals and deposits or payments of similar
nature and all guaranties of tenants' or occupants' performances
under such leases and agreements; SUBJECT, HOWEVER, to the
assignment of rents and other property to Mortgagee herein
contained;
(g) All general intangibles relating to the development or
use of the Property, including without limitation all permits,
licenses and franchises to the extent necessary to the building
itself which is a part of the Property, all names under or by
which the Property may at any time be operated or known, and all
rights to carry on business under any such names or any variant
thereof, and all trademarks, trade names, logos and good will in
any way relating to the Property, excluding, however, the name
'AnnTaylor';
(h) All awards, compensation and settlements in lieu thereof
made as a result of the taking by power of eminent domain of the
whole or any part of the Property, including any awards for
damages sustained to the Property for a temporary taking, change
in grade of streets or taking of access;
(i) All water stock relating to the Property, all shares of
stock or other evidence of ownership of any part of the Property
that is owned by Mortgagor in common with others, and all
documents of membership in any owners' or members' association or
similar group having responsibility for managing or operating any
part of the Property; and
(j) All products and proceeds of all of the foregoing.
TO HAVE AND TO HOLD all of the aforedescribed Property and
all parts, rights, members and appurtenances thereof, unto the
Mortgagee, its successors and assigns, forever.
TO SECURE THE FOLLOWING (collectively the 'Secured
Obligations'):
(1) Payment of the sum of Seven Million and No/100 Dollars
($7,000,000.00) with interest thereon, according to the terms and
provisions of a promissory note of even date herewith, payable to
Mortgagee, or order, and made by Mortgagor and AnnTaylor, Inc., a
Delaware corporation, and all modifications, extensions, renewals
and replacements thereof (collectively the 'Note');
(2) Payment of all sums advanced to protect the security of
this Mortgage, together with interest thereon as herein provided;
(3) Payment of all other sums which are or which may become
owing under the Loan Documents;
(4) Performance of all of Mortgagor's other obligations under
the Loan Documents; and
(5) Payment of the principal and interest on all other future
loans or advances made by Mortgagee to Mortgagor when the
promissory note evidencing the loan or advance specifically
states that it is secured by this Mortgage, including all
modifications, extensions, renewals, and replacements of any such
future loan or advance, but the maximum principal amount of the
indebtedness is twice the amount of initial principal amount of
the Loan.
As used herein, the term 'Loan Documents' means the Note,
this Mortgage, an Assignment of Rents and Leases (the terms of
which shall control in the event of any conflict with the terms
of Article 6 of this Mortgage), any loan agreement and Uniform
Commercial Code Financing Statements executed in connection
herewith, and any other instrument or document evidencing or
securing the Loan or otherwise executed in connection therewith,
together with all modifications, extensions, renewals and
replacements thereof.
MORTGAGOR HEREBY REPRESENTS, WARRANTS, COVENANTS AND AGREES
AS FOLLOWS:
ARTICLE 1
TITLE AND USE
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1.1 Warranty of Title. Mortgagor represents and warrants to
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Mortgagee that: (a) except as may otherwise be expressly stated
in this Mortgage, Mortgagor has good and marketable title in fee
simple to Realty and is the sole and absolute owner of all other
Property; (b) the Property is free from liens, encumbrances,
exceptions or other charges of any kind whatsoever other than
non-delinquent installments of ad valorem property taxes and
special assessments, the 'Permitted Exceptions,' if any,
permitted under the policy of mortgagee's title insurance issued
to Mortgagee in connection with this Mortgage and any other
liens, encumbrances, exceptions or charges expressly permitted by
the terms of this Mortgage, and no others, whether superior or
inferior to this Mortgage, will be created or suffered to be
created by Mortgagor during the life of this Mortgage without the
prior written consent of Mortgagee; (c) no default on the part of
Mortgagor or, to the best of Mortgagor's knowledge, any other
person exists under any of the Permitted Exceptions and as
applicable all are in full force and effect and without
modification; (d) Mortgagor will comply with the terms of the
Permitted Exceptions and will not modify the same without the
Mortgagee's written consent; and (e) Mortgagor has the right to
grant, transfer, convey and assign the Property as herein
provided and will forever warrant and defend the Property unto
Mortgagee against all claims and demands of any other person
whomsoever, subject only to said non-delinquent installments of
taxes and assessments and Permitted Exceptions.
1.2 Hazardous Substances.
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(a) Representations and Warranties. Mortgagor hereby
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represents and warrants to Mortgagee that: (i) to the best
of Mortgagor's knowledge, no asbestos has ever been used in
the construction, repair or maintenance of any building,
structure or other improvement now or heretofore located on
the Property; (ii) no Hazardous Substance (as defined below)
is currently being generated, manufactured, refined,
transported, treated, stored, handled or disposed of,
transferred, produced or processed on, under or in the
Property, except in compliance with all applicable federal,
state and local statutes, ordinances, rules, regulations and
other laws; (iii) neither Mortgagor nor, to the best of
Mortgagor's knowledge, any other person or entity has ever
caused or permitted any Hazardous Substance to be generated,
manufactured, refined, transported, treated, stored, handled
or disposed of, transferred, produced or processed on, under
or in the Property, except in compliance with all applicable
federal, state and local statutes, ordinances, rules,
regulations and other laws; (iv) Mortgagor has not received
any notice of, nor is Mortgagor aware of, any actual or
alleged violation with respect to the Property of any
federal, state or local statute, ordinance, rule, regulation
or other law pertaining to Hazardous Substances; and
(v) neither Mortgagor nor the Property is subject to any
governmental or judicial claim, order, judgment or lien with
respect to the clean-up of Hazardous Substances at or with
respect to the Property. Mortgagor further represents and
warrants to Mortgagee that the foregoing representations and
warranties contained in this paragraph 1.2(a) are made after
and are based upon inspection of the Property by Mortgagor
and a review of the Phase I Environmental Site Assessment
Report dated October 27, 1995, prepared by ATEC Associates,
Inc.
(b) Definition. As used herein, the term 'Hazardous
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Substance' means any hazardous, toxic or dangerous substance,
waste or material which is or becomes regulated under any
federal, state or local statute, ordinance, rule, regulation
or other law now or hereafter in effect pertaining to
environmental protection, contamination or clean up,
including without limitation any substance, waste or material
which now or hereafter is (i) designated as a 'hazardous
substance' under or pursuant to the Federal Water Pollution
Control Act (33 U.S.C. 1251 et seq.), (ii) defined as a
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'hazardous waste' under or pursuant to the Resource
Conservation and Recovery Act (42 U.S.C. 6901 et seq.), or
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(iii) defined as a 'hazardous substance' in the Comprehensive
Environmental Response, Compensation and Liability Act (42
U.S.C. 9601 et seq.).
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1.3 Warranty of Regarding other Debt. Mortgagor represents
---------------------------------
and warrants to Mortgagee that the entering into of the Loan and
granting this Mortgage on the Property does not violate any
covenants or restrictions in any debt instruments or agreements
with or obligations to any other lenders.
ARTICLE 2
MORTGAGOR'S COVENANTS
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2.1 Payment and Performance of Secured Obligations.
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Mortgagor will pay when due all sums which are now or which may
become owing on the Note, and will pay and perform all other
Secured Obligations, in accordance with their terms.
2.2 Payment of Taxes, Utilities, Liens and Charges.
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(a) Taxes and Assessments. Except as the same may
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otherwise be paid under Article 3 relating to reserves,
Mortgagor will pay when due directly to the payee thereof all
taxes and assessments (including without limitation
non-governmental levies or assessments such as maintenance
charges, owner association dues or charges, or fees, levies
or charges resulting from covenants, conditions or
restrictions) levied, assessed or charged against or with
respect to the Property or this Mortgage. Upon request,
Mortgagor shall promptly furnish to Mortgagee all notices of
amounts due under this subparagraph and all receipts
evidencing such payments. However, Mortgagor may contest any
such taxes or assessments by appropriate proceedings duly
instituted and diligently prosecuted at Mortgagor's expense.
Mortgagor shall not be obligated to pay such taxes or
assessments while such contest is pending if the Property is
not thereby subjected to imminent loss or forfeiture and, if
Mortgagor has not provided evidence that it has deposited the
entire amount assessed with the applicable governmental
authority, it deposits the entire amount together with
projected penalties and interest with the Mortgagee or
provides other security satisfactory to the Mortgagee in its
sole discretion.
(b) Utilities. Mortgagor will pay when due all utility
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charges and assessments for services furnished the Property.
(c) Liens and Charges. Mortgagor will pay when due the
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claims of all persons supplying labor or materials to or in
connection with the Property. Without waiving the
restrictions of paragraph 4.1, Mortgagor will promptly
discharge any lien or other charge, whether superior or
inferior to this Mortgage, which may be claimed against the
Property.
2.3 Insurance.
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(a) Coverages Required. Mortgagor will keep the
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following insurance coverages in effect with respect to the
Property:
(i) Insurance against loss by fire and the
hazards now or hereafter embraced by the standard
'extended coverage' form of insurance, in an amount equal
at all times to the full insurable value of the
improvements then located on the Property. All such
insurance coverage shall contain a 'replacement cost
endorsement' satisfactory to Mortgagee.
(ii) Flood risk insurance in the maximum
amount of insurance coverage available or the full
replacement cost of the buildings on the Realty,
whichever is less, if the Realty is now or hereafter
designated as being located within a special flood hazard
area under the Flood Disaster Protection Act of 1973 and
if flood insurance is available.
(iii) Loss of rental value insurance and/or
business interruption insurance, as follows: If all or
any portion of the Property is rented or leased, loss of
rental value insurance in an amount equal to six (6)
months' aggregate gross rents from the Property as is so
occupied. If all or any portion of the Property is
occupied by Mortgagor, business interruption insurance in
an amount equal to six (6) months' net income from such
portion of the Property as is so occupied. The amount(s)
of such coverage(s) shall be subject to adjustment, from
time to time at Mortgagee's request, to reflect changes
in the rental and/or income levels during the term of the
Loan.
(iv) Comprehensive public liability insurance
against claims for bodily injury, death or property
damage occurring on, in or about the Property (including
coverage for elevators and escalators, if any, on the
Property), with the coverage being in an amount of not
less than One Million and No/100 Dollars ($1,000,000.00)
combined single-limit liability coverage, or in such
greater amount(s) as Mortgagee may reasonably require.
(v) Boiler and machinery insurance covering
pressure vessels, air tanks, boilers, machinery, pressure
piping, heating, air conditioning and elevator and
escalator equipment, provided the improvements contain
equipment of such nature, and insurance against loss of
occupancy or use arising from breakdown of any of such
items, in such amounts as Mortgagee may reasonably
require.
(vi) Building ordinance coverage endorsement
including contingent liability from operation of building
laws, demolition cost and increased cost of construction,
if, at any time, the Property constitutes a nonconforming
but permitted use under applicable zoning or other
governmental laws.
(vii) Insurance against such similar or other
hazards, casualties, liabilities and contingencies, in
such forms and amounts, as Mortgagee may from time to
time reasonably require.
(viii) To the extent Insurance required as
referred to hereinabove covers the Mortgagor's inventory
and other property not identified as a part of the
Property in this Mortgage, then the proceeds from such
insurance or such other property shall not be payable to
Mortgagee under this Mortgage or the other documents
executed in connection with this Loan.
(b) Policies. Each insurance policy will be in form
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acceptable to Mortgagee, and will be issued by a company
acceptable to Mortgagee, which company shall, among other
things, be (i) duly authorized to provide such insurance in
the state in which the Property is located, and (ii) rated
'A' or better with a size rating of 'V' or larger by A.M.
Best Company in its most recent publication of ratings
(provided, however, that if A.M. Best Company changes its
designations, the basis for its ratings or ceases to provide
ratings, Mortgagee shall be entitled to select replacement
ratings in the exercise of its reasonable business judgment).
Each hazard insurance policy will include a Form 438BFU or
equivalent mortgagee endorsement in favor of and in form
acceptable to Mortgagee, and each liability insurance policy
will name Mortgagee as an additional insured. All required
policies will provide for at least thirty (30) days' written
notice to Mortgagee prior to the effective date of any
cancellation or material amendment, which term shall include
any reduction in the scope or limits of coverage. Mortgagor
shall furnish to Mortgagee a certificate and evidence of
insurance setting forth the coverage, the limits of
liability, the carrier, the policy number and the expiration
date, and upon the written request of Mortgagee, a copy of
the corresponding policies or sections requested by it. As
security for the Secured Obligations, Mortgagor hereby
assigns to Mortgagee its interest in the insurance policies
but only to the extent they relate to the Property, together
with all proceeds thereof, and to the extent applicable to
blanket policies, rights thereto and all unearned premiums
returnable upon cancellation.
(c) Payment; Renewals. Mortgagor shall promptly furnish
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to Mortgagee all renewal notices relating to insurance
policies. Except as the same may otherwise be paid under
Article 3 relating to reserves, Mortgagor will pay all
premiums on insurance policies directly to the carrier. At
least thirty (30) days prior to the expiration date of each
such policy, Mortgagor shall furnish to Mortgagee a renewal
policy or certificate and evidence of insurance in a form
acceptable to Mortgagee, together with evidence that the
renewal premium has been paid. However, in the event
Mortgagor provides to Mortgagee an acceptable certification
that coverage will continue for a period of at least thirty
(30) days after written notice of the insurer's intent to
cancel or materially amend such insurance coverage even
though the current terms of the policy or policies may
expire, Mortgagee will accept, in lieu of the policy, or
certificate and evidence, at least fourteen (14) days prior
to the expiration date of each such policy, evidence that it
is processing the renewal of (or obtaining of new) policies
in a form acceptable to Mortgagee in accordance with
Mortgagor's customary practices and Mortgagor shall, upon
Mortgagee's request, furnish evidence that binds the coverage
notwithstanding that such renewal (or new) premium has not
then been paid. Within ninety (90) days following the
expiration date, Mortgagor shall furnish Mortgagee with
evidence that the renewal (or new) premium has been paid.
(d) Insurance Proceeds.
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(i) In the event of any loss, Mortgagor will give
prompt written notice thereof to the insurance carrier
and Mortgagee. Mortgagor hereby authorizes Mortgagee as
Mortgagor's attorney-in-fact to make proof of loss, to
adjust and compromise any claim, to commence, appear in
and prosecute, in Mortgagee's or Mortgagor's name, any
action relating to any claim, and to collect and receive
insurance proceeds; provided, however, that Mortgagee
shall have no obligation to do so. If an event of
default is not continuing, the preceding sentence shall
apply except that the Mortgagee shall not be entitled to
be the Mortgagor's attorney-in-fact and the Mortgagor
shall be entitled to jointly participate with the
Mortgagee in adjusting any loss and appearing in any
proceeding.
(ii) Except as may otherwise be required by
applicable law, Mortgagee shall apply any insurance
proceeds received hereunder first to the payment of the
costs and expenses incurred in the collection of the
proceeds and shall then apply the balance (the 'Net
Proceeds'), in its absolute discretion and without regard
to the adequacy of its security, to:
(A) The payment of indebtedness secured
hereby, whether then due and payable or not. Any
such application of proceeds to principal on the Note
shall be without the imposition of any prepayment fee
otherwise payable under the Note, but shall not
extend or postpone the due dates of the installment
payments under the Note, or change the amounts
thereof; or
(B) The reimbursement of Mortgagor, under
Mortgagee's prescribed disbursement control
procedures, for the cost of restoration or repair of
the Property. Mortgagee may, at its option,
condition the reimbursement on Mortgagee's approval
of the plans and specifications of the
reconstruction, contractor's cost estimates,
construction budget and schedule, architects'
certificates, waivers of liens, sworn statements of
mechanics and materialmen, and such other evidence of
costs, percentage completion of construction,
application of payments and satisfaction of liens as
Mortgagee may reasonably require.
(iii) Notwithstanding the provisions of
paragraph 2.3(d)(ii) above, Mortgagee agrees that the Net
Proceeds from a loss described in this paragraph 2.3(d)
will be made available under clause (ii)(B) above to
reimburse Mortgagor for the cost of restoration or repair
of the Property, provided that each of the following
conditions is satisfied:
(A) No event of default has occurred and
is continuing at the time the proceeds are received;
(B) The Net Proceeds are less than the
indebtedness then secured by this Mortgage;
(C) The proceeds are received more than
one (1) year prior to the maturity date of the Note;
(D) Mortgagor gives Mortgagee written
notice within thirty (30) days after the proceeds are
received that it intends to restore or repair the
Property and requests that the Net Proceeds be made
available therefor, and Mortgagor thereafter promptly
commences the restoration or repair and completes the
same with reasonable diligence in accordance with
plans and specifications approved by Mortgagee, which
approval shall not be unreasonably withheld;
(E) The Net Proceeds are sufficient, in
Mortgagee's reasonable business judgment, to restore
or repair the Property substantially to its condition
prior to the damage or destruction or, if in
Mortgagee's reasonable business judgment they are
not, Mortgagor deposits with Mortgagee funds in an
amount equal to the deficiency, which funds Mortgagee
may, at its option, require be expended prior to use
of the Net Proceeds; and
(F) Mortgagee receives evidence
reasonably satisfactory to Mortgagee that, upon
completion of the restoration or repair, the Property
can be operated substantially as it was before and
will produce substantially as much income from tenant
leases as it did before the damage or destruction.
(iv) Except to the extent, if any, that
insurance proceeds are applied to payment of the Secured
Obligations, Mortgagor's obligation to restore, repair
and maintain the Property as provided in paragraph 2.4
shall not be excused, regardless of whether insurance
proceeds are available or insufficient.
(e) Transfer of Title. If the Property is sold pursuant
-----------------
to Article 8 or if Mortgagee otherwise acquires title to the
Property, Mortgagee shall have all of the right, title and
interest of Mortgagor in and to any insurance policies and
unearned premiums thereon and in and to the proceeds
resulting from any damage to the Property prior to such sale
or acquisition.
2.4 Preservation and Maintenance of Property; Right of Entry.
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(a) Preservation and Maintenance. Mortgagor (i) will not
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commit or suffer any waste or permit any impairment or
deterioration of the Property, (ii) will not abandon the
Property, (iii) will restore or repair promptly and in a good
and workmanlike manner all or any part of the Property to the
equivalent of its original condition, or such other condition
as Mortgagee may approve in writing, in the event of any
damage, injury or loss thereto, whether or not insurance
proceeds are available to cover in whole or in part the costs
of such restoration or repair, (iv) will keep the Property,
including improvements, fixtures, equipment, machinery and
appliances thereon, in good condition and repair and shall
replace fixtures, equipment, machinery and appliances of the
Property when necessary to keep such items in good condition
and repair, and (v) will generally operate and maintain the
Property in a commercially reasonable manner.
(b) Alterations. No building or other improvement on the
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Realty will be structurally altered, removed or demolished,
in whole or in part, without Mortgagee's prior written
consent, nor will any fixture or chattel covered by this
Mortgage and adapted to the use and enjoyment of the Property
be removed at any time without like consent unless actually
replaced by an article of equal suitability, owned by
Mortgagor, free and clear of any lien or security interest
except such as may be approved in writing by Mortgagee.
(c) Right of Entry. Mortgagee is hereby authorized to
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enter the Property, including the interior of any structures,
at reasonable times and after reasonable notice, for the
purpose of inspecting the Property and for the purpose of
performing any of the acts it is authorized to perform
hereunder.
2.5 Hazardous Substances.
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(a) No Future Hazardous Substances. Mortgagor will not
------------------------------
cause or permit the Property to be used to generate,
manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process any Hazardous
Substance, except in compliance with all applicable federal,
state and local statutes, ordinances, rules, regulations and
other laws, nor shall Mortgagor cause or permit, as a result
of any intentional or unintentional act or omission on the
part of Mortgagor or any tenant, subtenant or other user or
occupier of the Property, a releasing, spilling, leaking,
pumping, pouring, emitting, emptying or dumping of any
Hazardous Substance onto the Property or any other property
or into any waters, except in compliance with all such laws.
(b) Notification; Clean Up. Mortgagor will immediately
----------------------
notify Mortgagee should Mortgagor (i) become aware of any
Hazardous Substance or other environmental problem or
liability with respect to the Property, (ii) receive any
notice of, or become aware of, any actual or alleged
violation with respect to the Property of any federal, state
or local statute, ordinance, rule, regulation or other law
pertaining to Hazardous Substances, or (iii) become aware of
any lien or action with respect to any of the foregoing.
Mortgagor will, at its sole expense, take all actions as may
be necessary or advisable for the clean-up of Hazardous
Substances on or with respect to the Property, including
without limitation all removal, containment and remedial
actions in accordance with all applicable laws and in all
events in a manner satisfactory to Mortgagee, and shall
further pay or cause to be paid all clean-up, administrative
and enforcement costs of governmental agencies with respect
to Hazardous Substances on or with respect to the Property if
obligated to do so by contract or by law.
(c) Verification. For the purposes of inspecting the
------------
Property to ascertain the accuracy of all representations and
warranties in this Mortgage relating to Hazardous Substances,
and the observance of all covenants contained in this
paragraph 2.5 (i) Mortgagee is hereby authorized to enter and
inspect the Property, including the interior of any
structures, at reasonable times and after reasonable notice,
and (ii) if and at any time Hazardous Substances are being
handled on the Property, Mortgagor shall furnish Mortgagee
with such information and documents as may be reasonably
requested by Mortgagee to confirm that such Hazardous
Substances, are being handled in compliance with all
applicable federal, state and local statutes, ordinances,
rules, regulations and other laws. Mortgagor shall reimburse
Mortgagee upon demand for all costs and expenses, including
without limitation attorneys' fees, incurred by Mortgagee in
connection with any such entry and inspection and the
obtaining of such information and documents.
2.6 Parking. If any part of the automobile parking areas
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included within the Property is taken by condemnation, or before
said areas are otherwise reduced, Mortgagor will take all actions
as are necessary to provide parking facilities in kind, size and
location to comply with all governmental zoning and other
regulations and all leases. Before making any contract for
substitute parking facilities, Mortgagor will furnish to
Mortgagee satisfactory assurance of completion thereof free of
liens and in conformity with all government zoning and other
regulations.
2.7 Use of Property. Mortgagor will comply with all laws,
---------------
ordinances, regulations and requirements of any governmental
body, and all other covenants, conditions and restrictions,
applicable to the Property, and pay all fees and charges in
connection therewith. Unless required by applicable law or
unless Mortgagee has otherwise agreed in writing, Mortgagor will
not allow changes in the use for which all or any part of the
Property was intended at the time this Mortgage was executed.
Mortgagor will not initiate or acquiesce in a change in the
zoning classification of the Property without Mortgagee's prior
written consent.
2.8 Condemnation.
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(a) Proceedings. Mortgagor will promptly notify
-----------
Mortgagee of any action or proceeding relating to any
condemnation or other taking (including without limitation
change of grade), whether direct or indirect, of the Property
or part thereof or interest therein, and Mortgagor will
appear in and prosecute any such action or proceeding unless
otherwise directed by Mortgagee in writing. Mortgagor
authorizes Mortgagee, at Mortgagee's option, as
attorney-in-fact for Mortgagor, to commence, appear in and
prosecute, in Mortgagee's or Mortgagor's name, any action or
proceeding relating to any such condemnation or other taking,
and to settle or compromise any claim in connection with such
condemnation or other taking; provided, however, that
Mortgagee shall have no obligation to do so. All awards,
payments, damages, direct, consequential and otherwise,
claims, and proceeds thereof, in connection with any such
condemnation or other taking, or for conveyances in lieu of
condemnation, are hereby assigned to Mortgagee, and all
proceeds of any such awards, payments, damages or claims
shall be paid to Mortgagee.
(b) Application of Proceeds. Mortgagee shall apply any
-----------------------
such proceeds in the manner and upon the terms and conditions
set forth in paragraph 2.3(d)(ii) relating to the application
of insurance proceeds, without regard to the provisions of
paragraph 2.3(d)(iii).
2.9 Protection of Mortgagee's Security. Mortgagor will give
----------------------------------
notice to Mortgagee of and will, at its expense, appear in and
defend any action or proceeding that might affect the Property or
title thereto or the interests of Mortgagee therein or the rights
or remedies of Mortgagee. If any such action or proceeding is
commenced or if Mortgagee is made a party to any such action or
proceeding by reason of this Mortgage, or if Mortgagor fails to
perform any obligation on its part to be performed hereunder,
then Mortgagee, in its own discretion, may make any appearances,
disburse any sums, make any entries upon the Property and take
any actions as may be necessary or desirable to protect or
enforce the security of this Mortgage, to remedy Mortgagor's
failure to perform its obligations (without, however, waiving any
default by Mortgagor) or otherwise to protect Mortgagee's
interests. Mortgagor agrees to pay all loss, damage, costs and
expenses, including reasonable attorneys' fees, of Mortgagee thus
incurred. This paragraph shall not be construed to require
Mortgagee to incur any expenses, make any appearances or take any
actions.
2.10 Reimbursement of Mortgagee's Expenses. All amounts
-------------------------------------
disbursed by Mortgagee pursuant to paragraph 2.9 or any other
provision of this Mortgage, with interest thereon, shall be
additional indebtedness of Mortgagor secured by this Mortgage.
All such amounts shall be immediately due and payable and shall
bear interest from the date of disbursement at the interest rate
in effect on the Note from time to time, or at the maximum rate
which may be collected from Mortgagor on such amounts by the
payee thereof under applicable law if that is less.
2.11 Books and Records; Financial Statements. Mortgagor
---------------------------------------
will keep and maintain at Mortgagor's address stated above, or
such other place as Mortgagee may approve in writing, books of
accounts and records adequate to reflect correctly the results of
the operation of the Property and copies of all written
contracts, leases and other instruments which affect the
Property. Such books, records, contracts, leases and other
instruments shall be subject to examination, inspection and
copying at any reasonable time by Mortgagee. Mortgagor will
furnish to Mortgagee, within twenty (20) days after Mortgagee's
request therefor, the following documents, each certified to
Mortgagee by Mortgagor as being true, correct and complete:
(a) a copy of all leases and other agreements for the occupancy
or use of all or any part of the Property, (b) a rent roll for
the Property, showing the name of each tenant, and for each
tenant, the suite occupied, the number of square feet rented, the
lease expiration date, the rent payable, the date through which
rent has been paid, the amount of any security deposit and the
number and term of any renewal options, (c) a copy of the most
recent real and personal property tax statements for the
Property, (d) a copy of the most recent statements for the
insurance coverages maintained under paragraph 2.3(a) of this
Mortgage, and (e) a statement of income and expenses of the
Property for the most recently ended fiscal year of Mortgagor.
In addition, Mortgagor and any general partner therein and any
guarantor of the Loan will furnish to Mortgagee, within
twenty (20) days after Mortgagee's request therefor, a complete
and current financial statement, in reasonable detail and
certified as correct by Mortgagor or such partner or guarantor.
ARTICLE 3
RESERVES
--------
3.1 Deposits. Mortgagor will, at the time of making each
---------
installment payment under the Note, deposit with Mortgagee a sum,
as estimated by Mortgagee, equal to (a) the rents under any
ground lease, (b) the taxes and special assessments next due on
the Property, and (c) the premiums that will next become due on
insurance policies as may be required under this Mortgage, less
all sums already deposited therefor, divided by the number of
months to elapse before two (2) months prior to the date when
such rents, taxes, special assessments and premiums will become
delinquent. Mortgagee may require Mortgagor to deposit with
Mortgagee, in advance, such other sums for other taxes,
assessments, premiums, charges and impositions in connection with
Mortgagor or the Property as Mortgagee reasonably deems necessary
to protect Mortgagee's interests (herein 'Other Impositions').
Such sums for Other Impositions shall be deposited in a lump sum
or in periodic installments, at Mortgagee's option. If requested
by Mortgagee, Mortgagor will promptly deliver to Mortgagee all
bills and notices with respect to any rents, taxes, assessments,
premiums and Other Impositions. All sums deposited with
Mortgagee under this paragraph 3.1 are hereby pledged as
additional security for the Secured Obligations. The
requirements of this paragraph are subject to any conditional
waiver executed by Mortgagee, limited to the time when ownership
of the Property is as stated in such waiver.
3.2 Application of Deposits. All such deposited sums shall
-----------------------
be held by Mortgagee and applied in such order as Mortgagee
elects to pay such rents, taxes, assessments, premiums and Other
Impositions or, in the event of default hereunder, may be applied
in whole or in part, to indebtedness secured hereby. The
arrangement provided for in this Article 3 is solely for the
added protection of Mortgagee and entails no responsibility on
Mortgagee's part beyond the allowing of due credit, without
interest, for the sums actually received by it. Upon any
assignment of this Mortgage by Mortgagee, any funds on hand shall
be turned over to the assignee and any responsibility of
Mortgagee with respect thereto shall terminate. Each transfer of
the Property shall automatically transfer to the grantee all
rights of Mortgagor with respect to any funds accumulated
hereunder. Upon payment in full of the Secured Obligations,
Mortgagee shall promptly refund to Mortgagor the remaining
balance of any deposits then held by Mortgagee.
3.3 Adjustments to Deposits. If the total deposits held by
-----------------------
Mortgagee exceed the amount deemed necessary by Mortgagee to
provide for the payment of such rents, taxes, assessments,
premiums and Other Impositions as the same fall due, then such
excess shall, provided no event of default then exists hereunder,
be credited by Mortgagee on the next due installment or
installments of such deposits. If at any time the total deposits
held by Mortgagee is less than the amount deemed necessary by
Mortgagee to provide for the payment thereof as the same fall
due, then Mortgagor will deposit the deficiency with Mortgagee
within thirty (30) days after written notice to Mortgagor stating
the amount of the deficiency.
ARTICLE 4
RESTRICTIONS ON TRANSFER OR ENCUMBRANCE
---------------------------------------
4.1 Restrictions on Transfer or Encumbrance of the Property.
-------------------------------------------------------
If the Property or any part thereof or interest therein shall be
encumbered, sold (by contract or otherwise), conveyed, or
otherwise transferred by Mortgagor, or if without Mortgagee's
prior written consent there shall be any change in the ownership
of any stock interest in a corporate Mortgagor, in the ownership
of any general partnership interest in any general or limited
partnership Mortgagor or in the ownership of any beneficial
interest in any other Mortgagor which is not a natural person or
persons, or if without Mortgagee's prior written consent there
shall be any change in the ownership of any such stock, general
partnership or other beneficial interest in any corporation,
partnership or other entity, organization or association directly
or indirectly owning an interest in Mortgagor, then the same
shall be deemed to be a 'Transfer' for purposes of this
paragraph. In the event of such a Transfer, Mortgagee may, at
its sole option, declare such Transfer to constitute an event of
default under this Mortgage and invoke any remedy or remedies
provided for in paragraph 8.1 hereof or may, at its sole option,
consent to such Transfer and increase the interest rate on the
indebtedness secured hereby. Neither of the foregoing options
shall apply, however, in the case of a Transfer (a) by devise or
descent or operation of law upon the death of an individual
Mortgagor, a partner of a partnership Mortgagor, a shareholder of
a corporate Mortgagor, the owner of a beneficial interest of any
other Mortgagor which is not a natural person, or the owner of
any stock, partnership or other beneficial interest in any
corporation, partnership or other entity, organization or
association directly or indirectly owning an interest in
Mortgagor, provided that following the Transfer the person(s)
and/or firm(s) having effective managerial control of the
Property are reasonably satisfactory to Mortgagee, (b) a Transfer
of the Property or any portion thereof to AnnTaylor, Inc. or any
of its subsidiaries, (the 'Permitted Transferees'), so long as
the transfer is subject to this Mortgage in all respects and the
Permitted Transferee has executed and delivered to the Mortgagee
such documents as are reasonably requested to give effect
thereto, or (c) transfers of shares of stock in AnnTaylor Stores
Corporation so long as its stock is publicly traded on a
recognized stock exchange.
ARTICLE 5
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
------------------------------------------
5.1 Grant to Mortgagee. This Mortgage constitutes a security
-------------------
agreement pursuant to the Uniform Commercial Code with respect to
all Property constituting 'Property' as described herein and
Mortgagor hereby grants Mortgagee a security interest in all such
property as additional security for the Secured Obligations.
Notwithstanding the foregoing, the Mortgagee agrees that it has
no security interest, lien or claim in, on or to the inventory,
personal property, computer equipment, materials-handling
equipment, or similar personal property or fixtures which may now
or in the future be located on the Realty. If requested by
Mortgagor, Mortgagee agrees to execute an instrument in form and
substance reasonably satisfactory to Mortgagee stating that such
items are free from any lien, claim or security interest of
Mortgagee, certifying that Mortgagor is not in default, (if it is
not) and consenting to such transaction conditioned upon
Mortgagee having no responsibility for such property and the
agreement of the secured party that, in the event Mortgagee takes
possession of the Property through exercise of its remedies as a
result of a deed in lieu of foreclosure, it will remove such
property upon Mortgagee's request without damaging the Property,
within a reasonable time after Mortgagee's request or such
property shall be deemed abandoned by the secured party;
provided, however, nothing herein shall be construed to require
any consent from Mortgagee for such transaction or for the
alteration or replacement of any such items.
5.2 Mortgagee's Rights and Remedies. With respect to
----------------------------------
Property subject to the foregoing security interest, Mortgagee
has all of the rights and remedies (i) of a secured party under
the Uniform Commercial Code, (ii) provided herein, including
without limitation the right to cause such Property to be sold
under the power of sale granted by this Mortgage, and
(iii) provided by law. In exercising its remedies, Mortgagee may
proceed against the items of real property and any items of
personal property separately or together and in any order
whatsoever, without in any way affecting the availability of
Mortgagee's remedies. Upon demand by Mortgagee following an
event of default hereunder, Mortgagor will assemble any items of
personal property and make them available to Mortgagee at the
Property, a place which is hereby deemed to be reasonably
convenient to both parties. Mortgagee shall give Mortgagor at
least ten (10) days' prior written notice of the time and place
of any public sale or other disposition of such Property or of
the time of or after which any private sale or any other intended
disposition is to be made. Any person permitted by law to
purchase at any such sale may do so. Such Property may be sold
at any one or more public or private sales as permitted by
applicable law. All expenses incurred in realizing on such
Property shall be borne by Mortgagor.
5.3 Fixture Filing. THIS MORTGAGE SHALL BE EFFECTIVE AS A
---------------
FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL
GOODS WHICH ARE OR ARE TO BECOME FIXTURES RELATED TO THE
PROPERTY. FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE THE
FOLLOWING INFORMATION IS FURNISHED:
(a) The name and address of the record owner of the real
estate described in this instrument is:
AnnTaylor Distribution Services, Inc.
414 Chapel Street
New Haven, Connecticut 06511
(b) the name and address of the Debtor is:
AnnTaylor Distribution Services, Inc.
414 Chapel Street
New Haven, Connecticut 06511
(c) the name and address of the Secured Party is:
General Electric Capital Assurance Company
P. O. Box 490
Seattle, Washington 98111-0490
(d) Information concerning the security interest
evidenced by this instrument may be obtained from the Secured
Party at its address above.
(e) This document covers goods which are or are to become
fixtures.
(f) Proceeds and products of collateral are also covered.
ARTICLE 6
ASSIGNMENT OF RENTS AND LEASES; LEASES OF PROPERTY;
---------------------------------------------------
APPOINTMENT OF RECEIVER; MORTGAGEE IN POSSESSION
------------------------------------------------
6.1 Mortgagor to Comply with Leases. Mortgagor will, at its
-------------------------------
own cost and expense:
(a) Faithfully abide by, perform and discharge each and
every obligation, covenant and agreement under any leases or
other agreements for the occupancy or use of the Property
(collectively 'Leases') to be performed by the landlord
thereunder;
(b) Enforce or secure the performance of each and every
material obligation, covenant, condition and agreement of
said Leases by the tenants thereunder to be performed;
(c) Not borrow against, pledge or further assign any
rentals due under said Leases (which shall not prohibit the
transfers referred to in subparagraph (b) of paragraph 4.1
above);
(d) Not permit the prepayment of any rents due under any
of the Leases for more than one month in advance nor for more
than the next accruing installment of rents, nor anticipate,
discount, compromise, forgive or waive any such rents;
(e) Not waive, excuse, condone or in any manner release
or discharge any tenants of or from the obligations,
covenants, conditions and agreements by said tenants to be
performed under the Leases;
(f) Not permit any tenant to assign or sublet its
interest in any of the Leases unless required to do so by the
terms of the Lease and then only if such assignment does not
work to relieve the tenant of any liability for payment of
and performance of its obligations under such Lease;
(g) Not terminate any Lease or accept a surrender thereof
or a discharge of the tenant providing for a term (assuming
that all renewal options, if any, are exercised) of more than
five (5) years nor shall Mortgagor terminate or accept a
surrender in any single twelve (12) month period more than
twenty-five percent (25%) of the aggregate total net rentable
area without the written consent of the Mortgagee;
(h) Not consent to a subordination of the interest of any
tenant to any party other than Mortgagee and then only if
specifically consented to by the Mortgagee; and
(i) Not amend or modify any Lease or alter the
obligations of the parties thereunder, excepting in the
ordinary and prudent course of business with due regard for
the security afforded the Mortgagee by the Lease, and will
not, without the Mortgagee's written consent, enter into,
execute, modify, or extend any Lease now existing or
hereafter made providing for a term (assuming that all
renewal options, if any, are exercised) of more than five (5)
years unless the leased premises is less than twenty-five
percent (25%) of the net rentable area of the building
improvements at the Property.
6.2 Mortgagee's Right to Perform under Leases. Should the
-----------------------------------------
Mortgagor fail to perform, comply with or discharge any
obligations of Mortgagor under any lease or should the Mortgagee
become aware of or be notified by any tenant under any lease of a
failure on the part of Mortgagor to so perform, comply with or
discharge its obligations under said lease, Mortgagee may, but
shall not be obligated to, and without further demand upon the
Mortgagor, and without waiving or releasing Mortgagor from any
obligation in this Mortgage contained, remedy such failure, and
the Mortgagor agrees to repay upon demand all sums incurred by
the Mortgagee in remedying any such failure together with
interest at the then rate in effect on the Note. All such sums,
together with interest as aforesaid shall become so much
additional indebtedness secured by this Mortgage, but no such
advance shall be deemed to relieve the Mortgagor from any default
hereunder.
6.3 Assignment of Leases and Rents. The Mortgagor does
--------------------------------
hereby sell, assign and transfer unto Mortgagee all of the
leases, rents, issues, income and profits now due and which may
hereafter become due under or by virtue of the Leases including
those, if any, described on Exhibit B attached hereto, whether
written or verbal, or any agreement for the use or occupancy of
the Property, it being the intention of this Mortgage to
establish an absolute present transfer and assignment of the
Leases and all of the rents, issues, income and profits from the
Property unto the Mortgagee, and not merely the granting of a
security interest, and the Mortgagor does hereby appoint
irrevocably the Mortgagee its true and lawful attorney in its
name and stead, which appointment is coupled with an interest, to
collect all of said rents and profits; provided, Mortgagee grants
the Mortgagor the privilege, revocable, to collect and retain
such rents, income, and profits unless and until an event of
default exists under this Mortgage. Upon an event of default and
whether before or after the institution of proceedings to sell
the Property or foreclose this Mortgage or during any period of
redemption the Mortgagee, and without regard to waste, adequacy
of the security or solvency of the Mortgagor, may revoke the
privilege granted Mortgagor hereunder to collect the rents,
issues, income and profits of the Property, and may, at its
option, without notice:
(a) in person or by agent, with or without taking
possession of or entering the Property, with or without
bringing any action or proceeding, give, or require Mortgagor
to give, notice to any or all tenants under any lease
authorizing and directing the tenant to pay such rents,
issues, income and profits to Mortgagee; collect all of the
rents, issues and profits; enforce the payment thereof and
exercise all of the rights of the landlord under any lease
and all of the rights of Mortgagee hereunder; enter upon,
take possession of, manage and operate said Property, or any
part thereof; cancel, enforce or modify any leases, and fix
or modify rents, and do any acts which the Mortgagee deems
proper to protect the security hereof with or without taking
possession of said Property; or
(b) apply for the appointment of a receiver in accordance
with the statutes and law made and provided for, which
receivership Mortgagor hereby consents to, who shall collect
the rents, profits and all other income of any kind; manage
the Property so as to prevent waste; and execute leases
within or beyond the period of receivership.
The rents, issues, income and profits may be applied, less
costs and expenses of operation, management and collection,
including attorneys fees and the payment of the fees and expenses
of any agent or receiver, to the payment of taxes, assessments,
insurance premiums and expenditures for the management, repair
and upkeep of the Property, to the performance of landlord's
obligations under any Leases and to the Secured Obligations, all
in such order as the Mortgagee may determine. The entering upon
and taking possession of the Property, the collection of such
rents and profits and the application thereof as aforesaid shall
not cure or waive any defaults under this Mortgage nor in any way
operate to prevent the Mortgagee from pursuing any other remedy
which it may now or hereafter have under the terms of this
Mortgage nor shall it in any way be deemed to constitute the
Mortgagee a mortgagee-in-possession. The rights and powers of
the Mortgagee hereunder shall remain in full force and effect
both prior to and after any foreclosure of the Mortgage and any
sale pursuant thereto.
6.4 Leases of the Property. Without the Mortgagee's written
-----------------------
consent, the Mortgagor will not enter into, execute, modify, or
extend any Lease now existing or hereafter made providing a term
(assuming that all renewal options, if any, are exercised) of
more than five (5) years unless the leased premises is less than
twenty-five percent (25%) of the net rentable area of the
building improvements at the Property. Mortgagor shall not
surrender or terminate any Lease now existing or hereafter made
providing a term (assuming that all renewal options, if any, are
exercised) of more than five (5) years nor shall Mortgagor
surrender or terminate in any single twelve-month period more
than twenty-five percent (25%) of the aggregate total net
rentable area without the written consent of the Mortgagee. Each
lease of the Property, at the election of the Mortgagee, will be
either superior or subordinate to the lien of the Mortgage, and
each tenant shall execute an appropriate subordination or
attornment agreement as required by the Mortgagee. Also, to the
extent required by the Mortgagee, each tenant shall execute an
estoppel certificate and acknowledge receipt of a notice of the
assignment of its lease, all satisfactory in form and content to
the Mortgagee.
ARTICLE 7
EVENTS OF DEFAULT
-----------------
7.1 Events of Default. Any one or more of the following is
-------------------
an event of default hereunder:
(a) Failure to make any payment when due under the Note,
this Mortgage or any of the other Loan Documents, followed by
the failure to make such payment within ten (10) days after
written notice thereof given to Mortgagor by Mortgagee;
provided, however, that Mortgagee shall not be obligated to
give Mortgagor written notice prior to exercising its
remedies with respect to such default if Mortgagee had twice
previously given Mortgagor during that calendar year a notice
of default for failure to make a payment of similar type.
(b) Failure to perform any other covenant, agreement or
obligation under the Note, this Mortgage or any of the other
Loan Documents, followed by the failure to cure such default
within thirty (30) days after written notice thereof given to
Mortgagor by Mortgagee (or if such cure cannot be completed
within such thirty (30) day period through the exercise of
diligence, the failure by Mortgagor to commence the required
cure within such thirty (30) day period and thereafter to
continue the cure with diligence and to complete the cure
within ninety (90) days following Mortgagee's notice of
default).
(c) Mortgagor or any trustee of Mortgagor files a
petition in bankruptcy or for an arrangement, reorganization
or any other form of debtor relief; or such a petition is
filed against Mortgagor or any trustee of Mortgagor and the
petition is not dismissed within forty-five (45) days after
filing.
(d) A decree or order is entered for the appointment of a
trustee, receiver or liquidator for Mortgagor or Mortgagor's
property, and such decree or order is not vacated within
forty-five (45) days after the date of entry.
(e) Mortgagor commences any proceeding for dissolution or
liquidation; or any such proceeding is commenced against
Mortgagor and the proceeding is not dismissed within
forty-five (45) days after the date of commencement.
(f) Mortgagor makes an assignment for the benefit of its
creditors, or admits in writing its inability to pay its
debts generally as they become due.
(g) There is an attachment, execution or other judicial
seizure of any portion of Mortgagor's assets and such seizure
is not discharged within ten (10) days.
(h) Any representation or disclosure made to Mortgagee by
Mortgagor or any guarantor of the Loan proves to be
materially false or misleading when made, whether or not that
representation or disclosure is contained herein.
ARTICLE 8
REMEDIES
--------
8.1 Acceleration Upon Default; Additional Remedies. Upon the
-------------------------
occurrence and continuance of an event of default hereunder,
Mortgagee may, at its option and without notice to or demand upon
Mortgagor, take any one or more of the following actions:
(a) Declare any or all indebtedness secured by this
Mortgage to be due and payable immediately.
(b) Bring a court action to enforce the provisions of
this Mortgage or any of the indebtedness or obligations
secured by this Mortgage.
(c) Bring a court action to foreclose this Mortgage.
(d) Foreclose this Mortgage under the power of sale
granted by this Mortgage in any manner permitted by
applicable law.
(e) Exercise any or all of the rights and remedies
provided for herein in the event of default hereunder.
(f) Exercise any other right or remedy available under
law or in equity.
8.2 Right to Foreclose. If an event of default shall occur,
-------------------
the Mortgagee may, either with or without entry or taking
possession, proceed by suit or suits at law or in equity or by
any other appropriate proceedings or remedy to enforce payment of
the Secured Obligations or the performance of any other term
hereof or any other right and the Mortgagor hereby authorizes and
fully empowers the Mortgagee to foreclose this Mortgage and
grants to the Mortgagee full authority to sell the Property at
public auction and convey title to the Property to the purchaser,
either in one parcel or separate lots and parcels, all in
accordance with and in the manner prescribed by law, and out of
the proceeds arising from sale and foreclosure to retain the
principal and interest due on the Note and the Secured
Obligations together with all such sums of money as Mortgagee
shall have expended or advanced pursuant to this Mortgage or
pursuant to statute together with interest thereon at the rate of
interest provided for in the Note and all costs and expenses of
such foreclosure, including lawful attorney's fees, with the
balance, if any, to be paid to the persons entitled thereto by
law. In any such proceeding the Mortgagee may apply all or any
portion of the Secured Obligations to the amount of the purchase
price.
8.3 Application of Proceeds of Foreclosure Sale. The
------------------------------------------------
proceeds of any foreclosure sale of the Property shall be
distributed and applied in the following order of priority unless
otherwise provided by law: (a) to all costs and expenses incident
to the foreclosure proceedings and in all prior efforts to effect
collection of the Secured Obligations, including all such
allowable items as are mentioned in the preceding paragraph
hereof; (b) all other items which under the terms hereof
constitute Secured Obligations additional to that evidenced by
the Note, with interest thereon as provided herein or in the
Note; (c) all interest remaining unpaid on the Note; (d) all
principal remaining unpaid on the Note, to be applied first to
principal which is not the subject of any guaranty by any third
party and thereafter, after all such non-guaranteed principal has
been repaid, to principal that is the subject of any such
guaranty; and (e) the balance, if any, shall be paid over to the
Mortgagor or its successors and assigns. In any event, the
purchaser under any foreclosure sale shall be under no obligation
to see to the proper application of the purchase money.
8.4 Waiver of Order of Sale and Marshaling. Mortgagor waives
--------------------------------------
all rights to direct the order in which any of the Property will
be sold in the event of any sale under this Mortgage, and also
any right to have any of the Property marshaled upon any sale.
8.5 Non-Waiver of Defaults. The entering upon and taking
----------------------
possession of the Property, the collection of Rents or the
proceeds of fire and other insurance policies or compensation or
awards for any taking or damage of the Property, and the
application or release thereof as herein provided, shall not cure
or waive any default or notice of default hereunder or invalidate
any act done pursuant to such notice.
8.6 Foreclosure Subject to Tenancies. Mortgagee shall have
--------------------------------
the right at its option to foreclose this Mortgage subject to the
rights of any tenant or tenants of the Property.
8.7 Evasion of Prepayment Terms. If an event of default
----------------------------
hereunder has occurred and is continuing, a tender of payment of
the amount necessary to satisfy the entire indebtedness secured
hereby made at any time prior to foreclosure sale (including sale
under power of sale) by Mortgagor, its successors or assigns or
by anyone in behalf of Mortgagor, its successors or assigns,
shall constitute an evasion of the prepayment terms of the Note
and be deemed to be a voluntary prepayment thereunder and any
such payment to the extent permitted by law, will, therefore,
include the additional payment required under the prepayment
privilege, if any, contained in the Note.
8.8 Remedies Cumulative. To the extent permitted by law,
--------------------
every right and remedy provided in this Mortgage is distinct and
cumulative to all other rights or remedies under this Mortgage or
afforded by law or equity or any other agreement between
Mortgagee and Mortgagor, and may be exercised concurrently,
independently or successively, in any order whatsoever.
Mortgagee may exercise any of its rights and remedies at its
option without regard to the adequacy of its security.
8.9 Mortgagee's Expenses. Mortgagor will pay all of
---------------------
Mortgagee's expenses incurred in any efforts to enforce any terms
of this Mortgage, whether or not any suit is filed, including
without limitation legal fees and disbursements, foreclosure
costs and title charges. All such sums, with interest thereon,
shall be additional indebtedness of Mortgagor secured by this
Mortgage. Such sums shall be immediately due and payable and
shall bear interest from the date of disbursement at the default
rate of interest stated in the Note, or the maximum rate which
may be collected from Mortgagor under applicable law if that is
less.
8.10 Right to Discontinue Proceedings. In the event
---------------------------------
Mortgagee shall have proceeded to invoke any right, remedy or
recourse permitted under this Mortgage and shall thereafter elect
to discontinue or abandon the same for any reason, Mortgagee
shall have the unqualified right to do so and in such event
Mortgagor and Mortgagee shall be restored to their former
positions with respect to the indebtedness secured by this
Mortgage. This Mortgage, the Property and all rights, remedies
and recourse of the Mortgagee shall continue as if the same had
not been invoked.
ARTICLE 9
GENERAL
-------
9.1 Application of Payments. Except as applicable law or
------------------------
this Mortgage may otherwise provide, all payments received by
Mortgagee under the Note or this Mortgage shall be applied by
Mortgagee in the following order of priority: (a) Mortgagee's
expenses incurred in any efforts to enforce any terms of this
Mortgage; (b) amounts payable to Mortgagee by Mortgagor under
Article 3 for reserves; (c) interest and late charges payable on
the Note; (d) principal of the Note; (e) interest payable on
advances made to protect the security of this Mortgage;
(f) principal of such advances; and (g) any other sums secured by
this Mortgage in such order as Mortgagee, at its option, may
determine; provided, however, that Mortgagee may, at its option,
apply any such payments received to interest on and principal of
advances made to protect the security of this Mortgage prior to
applying such payments to interest on or principal of the Note.
9.2 Release of Mortgage. Upon payment of all sums secured by
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this Mortgage, this Mortgage and all assignments contained herein
shall be void, and this Mortgage shall be released by the
Mortgagee at the cost and expense of the Mortgagor, otherwise to
remain in full force and effect.
9.3 Mortgagee's Powers. Without affecting the liability of
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any person for payment or performance of the Secured Obligations,
Mortgagee, at its option, may extend the time for payment of the
indebtedness secured hereby or any part thereof, reduce payment
thereon, release anyone liable on any of said indebtedness,
accept a renewal note or notes therefor, modify the terms and
time of payment of the indebtedness, release the lien of this
Mortgage on any part of the Property, take or release other or
additional security, release or cause to be released all or any
part of the Property, or consent to the making of any map or plat
of the Property, or consent to the granting of any easement or
creating of any restriction on the Property, or join in any
subordination or other agreement affecting this Mortgage or the
lien or charge hereof. Mortgagor shall pay Mortgagee a
reasonable service charge, together with such title insurance
premiums and attorneys' fees as may be incurred at Mortgagee's
option, for any such action if taken at Mortgagor's request.
9.4 Subrogation. Mortgagee shall be subrogated for further
------------
security to the lien, although released of record, of any and all
encumbrances discharged, in whole or in part, by the proceeds of
the Loan or any other indebtedness secured hereby.
9.5 No Violation of Usury Laws. Interest, fees and charges
--------------------------
collected or to be collected in connection with the indebtedness
secured hereby shall not exceed the maximum, if any, permitted by
any applicable law. If any such law is interpreted so that said
interest, fees and/or charges would exceed any such maximum and
Mortgagor is entitled to the benefit of such law, then: (a) such
interest, fees and/or charges shall be reduced by the amount
necessary to reduce the same to the permitted maximum; and
(b) any sums already paid to Mortgagee which exceeded the
permitted maximum will be refunded. Mortgagee may choose to make
the refund either by treating the payments, to the extent of the
excess, as prepayments of principal or by making a direct payment
to the person(s) entitled thereto. No prepayment premium shall
be assessed on prepayments under this paragraph. The provisions
of this paragraph shall control over any inconsistent provision
of this Mortgage or the Note or any other Loan Documents.
9.6 Additional Documents; Power of Attorney. Mortgagor, from
---------------------------------------
time to time, will execute, acknowledge and deliver to Mortgagee
upon request, and hereby irrevocably appoints Mortgagee its
attorney-in-fact to execute, acknowledge, deliver and if
appropriate file and record, such security agreements,
assignments for security purposes, assignments absolute,
financing statements, affidavits, certificates and other
documents, in form and substance satisfactory to Mortgagee, as
Mortgagee may request in order to perfect, preserve, continue,
extend or maintain the assignments herein contained, the lien and
security interest under this Mortgage, and the priority thereof,
but for no other purposes. Mortgagor will pay to Mortgagee upon
request therefor all costs and expenses incurred in connection
with the preparation, execution, recording and filing of any such
document.
9.7 Waiver of Statute of Limitations. To the full extent
----------------------------------
Mortgagor may do so, Mortgagor hereby waives the right to assert
any statute of limitations as a defense to the enforcement of the
lien of this Mortgage or to any action brought to enforce the
Note or any other obligation secured by this Mortgage.
9.8 Forbearance by Mortgagee Not a Waiver. Any forbearance
-------------------------------------
by Mortgagee in exercising any right or remedy hereunder, or
otherwise afforded by applicable law, shall not be a waiver of or
preclude the exercise of any right or remedy, and no waiver by
Mortgagee of any particular default by Mortgagor shall constitute
a waiver of any other default or of any similar default in the
future. Without limiting the generality of the foregoing, the
acceptance by Mortgagee of payment of any sum secured by this
Mortgage after the due date thereof shall not be a waiver of
Mortgagee's right to either require prompt payment when due of
all other sums so secured or to declare a default for failure to
make prompt payment. The procurement of insurance or the payment
of taxes or other liens or charges by Mortgagee shall not be a
waiver of Mortgagee's right to accelerate the maturity of the
indebtedness secured by this Mortgage, nor shall Mortgagee's
receipt of any awards, proceeds or damages under paragraphs 2.3
and 2.8 hereof operate to cure or waive Mortgagor's default in
payment of sums secured by this Mortgage.
9.9 Modifications and Waivers. This Mortgage cannot be
--------------------------
waived, changed, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom
enforcement of any waiver, change, discharge or termination is
sought.
9.10 Notice. Except as applicable law may otherwise
------
require, all notices and other communications shall be in writing
and shall be deemed given when delivered by personal service or
when mailed, by certified or registered mail, postage prepaid,
addressed to the address set forth at the beginning of this
Mortgage. Any party may at any time change its address for such
purposes by delivering or mailing to the other parties hereto as
aforesaid a notice of such change.
9.11 Governing Law; Severability; Captions. This Mortgage
-------------------------------------
shall be governed by the laws of the State of Kentucky. If any
provision or clause of this Mortgage conflicts with applicable
law, such conflicts shall not affect other provisions or clauses
hereof which can be given effect without the conflicting
provision, and to this end the provisions hereof are declared to
be severable. The captions and headings of the paragraphs and
articles of this Mortgage are for convenience only and are not to
be used to interpret or define the provisions hereof.
9.12 Definitions. As used herein: the term 'Mortgagor'
-----------
means the Mortgagor herein named, together with any subsequent
owner of the Property or any part thereof or interest therein,
and the term 'Mortgagee' means the Mortgagee herein named,
together with any subsequent owner or holder of the Note or any
interest therein, including pledgees, assignees and participants.
9.13 Successors and Assigns Bound; Joint and Several
-----------------------------
Liability; Agents. This Mortgage shall bind and inure to the
- - -------- -----
benefit of the parties hereto and their respective heirs,
devisees, legatees, administrators, executors, successors and
assigns, subject to the provisions of Article 4 hereof. All
obligations of Mortgagor hereunder are joint and several. In
exercising any rights hereunder or taking actions provided for
herein, Mortgagee may act through its employees, agents or
independent contractors as authorized by Mortgagee.
9.14 Number; Gender. This Mortgage shall be construed so
--------------
that wherever applicable the use of the singular number shall
include the plural number, and vice versa, and the use of any
gender shall be applicable to all genders.
9.15 Time. Time is of the essence in connection with all
----
obligations of Mortgagor herein.
IN WITNESS WHEREOF, Mortgagor and Mortgagee have executed
this Mortgage as of the day and year first above written.
ANNTAYLOR DISTRIBUTION SERVICES, INC.,
a Delaware corporation
By: /s/ Walter J. Parks
--------------------
Its: Vice President
STATE OF New York )
)SS
COUNTY OF New York )
The foregoing instrument was acknowledged before me this 20th
day of November, 1995, by Walter J. Parks, the Vice President
of ANNTAYLOR DISTRIBUTION SERVICES, INC., a Delaware
corporation, on behalf of the corporation.
Notary Public /s/ Jocelyn F.L. Barandiaran
My Commission Expires Nov. 30, 1996
THIS DOCUMENT WAS DRAFTED BY:
Duane L. Paulson
Oppenheimer Wolff & Donnelly
Plaza VII, Suite 3400
45 South Seventh Street
Minneapolis, Minnesota 55402
=======================================================================
EXHIBIT A
TO
MORTGAGE
--------
PROPERTY SCHEDULE
-----------------
LEGAL DESCRIPTION
- - ------------------
Being LOT 49, as shown on the plat of RIVERPORT, SECTION 2, plat
of which is of record in Plat and Subdivision Book 34, Page 50,
in the Office of the Clerk of Jefferson County, Kentucky.
Being the same property acquired by ANNTAYLOR DISTRIBUTION
SERVICES, INC., a Delaware corporation, by Deed dated June 1,
1994, of record in Deed Book 6460, Page 547, in the Office of the
Clerk of Jefferson County, Kentucky.
Being the same property acquired by _________________________ by Deed
dated _______________ of record in Deed Book _______, Page______ in
the Office of the Clerk of Jefferson, County, Kentucky.
Z3484\11269\498\MORTGAGE\11-21-95\DLP
Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Financing Statement - AnnTaylor Distribution Services Inc. and General Electric Capital Assurance Co.
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