Exhibit 10.2
INSTRUMENT PREPARED BY,
RECORD AND RETURN TO:
XXXXX X. ELK, ESQ.
ELK, XXXXXXX, XXXXXXX & XXXXX LLP
0000 X. Xxxxxxx Xxx., #000-X
Xxxx Xxxxx, Xxxxxxx 00000
MORTGAGE AND SECURITY AGREEMENT
THIS IS A BALLOON MORTGAGE SECURING A FIXED RATE OBLIGATION AND THE FINAL
PRINCIPAL PAYMENT OR THE PRINCIPAL BALANCE DUE UPON MATURITY IS $1,250,000.00
TOGETHER WITH ACCRUED INTEREST, IF ANY, AND ANY ADVANCEMENTS MADE BY THE
MORTGAGEE UNDER THE TERMS OF THE MORTGAGE.
THIS MORTGAGE AND SECURITY AGREEMENT ("Mortgage"), made this 9th day of
December, 2005 between Enclaves of Eagle Nest LLC, a Florida limited liability
company, whose address is 00 Xxxxxxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx
00000 (hereinafter called "Mortgagor") and K&B Equity Group, Inc. d/b/a
Magellan Mortgage Group, its successors and/or assigns, whose office address is
000 Xxxxxxxx Xx., Xxxxx 000, Xxxx Xxxx Xxxxx, Xxxxxxx 00000, as Mortgagee and
Secured Party (hereinafter called the "Mortgagee").
W I T N E S S E T H :
WHEREAS, Mortgagor is justly indebted to Mortgagee in the principal sum
of ONE MILLION TWO HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($1,250.000.00) as
evidenced by a certain Promissory Note of even date herewith (the "Note"),
executed by Mortgagor and delivered to Mortgagee, payable according to the terms
therein provided, and by reference being a part hereof to the same extent as
though set out in full herein;
NOW THIS INDENTURE WITNESSETH, to secure the performance and observance
by the Mortgagor of all the covenants, conditions and agreements in the Note,
this Mortgage, and any other instrument, agreement or document collateral to or
executed or delivered in connection with the loan transaction, (collectively the
"Loan Documents"), and in order to charge the properties, interest and rights
hereinafter described with such payment, performance and observance, and for and
in consideration of the sum of TEN AND NO/100 ($10.00) DOLLARS paid by the
Mortgagee to the Mortgagor, and for other valuable considerations, the receipt
and sufficiency of which is hereby acknowledged, the Mortgagor does hereby
grant, bargain, sell, alien, remise, release, convey, assign, transfer,
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mortgage, hypothecate, pledge, deliver, set over, warranty and confirm unto the
Mortgagee, its successors and assigns forever;
THE MORTGAGED PROPERTY ("Mortgaged Property"):
ALL those certain pieces, parcels or tracts of land in which the
Mortgagor has a fee simple interest situate in the County of Xxx County, State
of Florida (hereinafter called the "Land"), more particularly described in
Exhibit "A" attached hereto and made a part hereof;
TOGETHER WITH all lands, buildings, structures and improvements of
every nature whatsoever now or hereafter situated on the Land, and all fixtures,
machinery, equipment, furniture and other personal property of every nature
whatsoever now or hereafter owned by the Mortgagor and located in, on, or used
or intended to be used in connection with the operation of the Land, building,
structures or other improvements, betterments, renewals, and replacements to any
of the foregoing, including without limitation, all materials intended for
construction, reconstruction, alteration, and repairs of improvements now or
hereafter erected thereon, all of which materials shall be considered to be
included within the mortgaged premises immediately on the delivery thereof to
the mortgaged premises, it being mutually agreed that all the aforesaid property
owned by Mortgagor and placed by it on the premises shall, so far as permitted
by law, be considered to be affixed to the realty and covered by this mortgage,
and all of the right, title and interest of the Mortgagor in any such personal
property or fixtures subject to a conditional sales contract, chattel mortgage
or similar lien or claim together with the benefit of any deposits or payments
now or hereafter made by the Mortgagor or on Mortgagor's behalf;
TOGETHER WITH all easements, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, rights, title, interest,
privileges, liberties, tenements, hereditaments and appurtenances whatsoever, in
any way belonging, relating or appertaining to any of the property hereinabove
described or which hereafter shall in any way belong, relate or be appurtenant
thereto, whether now owned or hereafter acquired by Mortgagor, and the reversion
and reversions, remainder and remainders, rents, issues, profits thereof, and
all the estate, right, title, interest, property, possession, claim and demand
whatsoever, at law as well as in equity, of Mortgagor of, in and to the same,
including, but not limited to, all judgments, awards of damages, and settlements
hereafter made resulting from condemnation proceedings or the taking of the
Mortgaged Property or any part thereof under the power of eminent domain, the
alteration of the grade of any street, or for any damage (whether caused by such
taking or otherwise) to the Mortgaged Property or any part thereof, or to any
rights appurtenant thereto, and all proceeds of any sales or other dispositions
of the Mortgaged Property or any part thereof;
TOGETHER WITH all rents, royalties, issues, profits, revenue, income
and other benefits from the Mortgaged Property to be applied against the
indebtedness secured hereby, provided however, that permission is hereby given
to Mortgagor so long as no default has occurred hereunder, to collect, receive,
take, use and enjoy such rents, royalties, issues, profits, revenue, income,
licenses, foreclosures, concessions, and other benefits as they become due and
payable, but not in advance thereof. The foregoing assignment shall be fully
operative without any further action on the part of either party and
specifically Mortgagee shall be entitled, at its option upon the occurrence of a
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default hereunder, to all rents, royalties, issues, profits, revenue, income and
other benefits from the Mortgaged Property, whether or not Mortgagee takes
possession of the Mortgaged Property. Upon any such notice of default hereunder,
the permission hereby given to Mortgagor to collect such rents, royalties,
issues, profits, revenue, income and other benefits from the Mortgaged Property
shall terminate and such permission shall not be reinstated upon a cure of the
default without Mortgagee's specific written consent. Exercise of rights under
this paragraph and the application of such rents, royalties, issues, profits,
revenue, income or other benefits to such indebtedness, shall not cure or waive
any default or notice of default hereunder or invalidate any act done pursuant
hereto, but shall be cumulative and in addition to all other rights and remedies
to Mortgagee;
TOGETHER WITH all right, title and interest of Mortgagor in and to any
and all leases now or hereafter on or affecting the Mortgaged Property, together
with all security therefor and all monies payable thereunder, subject, however,
to the conditional permission hereinabove given to Mortgagor to collect the
rentals under such lease. The foregoing assignment of any lease shall not be
deemed to impose upon Mortgagee any of the obligations or duties of Mortgagor
provided in any such lease, and Mortgagor agrees to fully perform all
obligations of the lessor under all such leases. Upon Mortgagee's request,
Mortgagor agrees to send a Mortgagee a list of all leases covered by the
foregoing assignment and as any such lease shall expire or terminate or as any
new lease shall be made, Mortgagor shall so notify Mortgagee in order that at
all times Mortgagee shall have a current list of all leases affecting the
Mortgaged Property. Mortgagee shall have the right, any time and from time to
time, to notify any lessee of the rights of Mortgagee as provided by this
paragraph. From time to time, upon request of Mortgagee, Mortgagor shall
specifically assign to Mortgagee as additional security hereunder, by an
assignment in writing in form approved by Mortgagee, all right, title and
interest of Mortgagor in and to any and all leases now or hereafter on or
affecting the Mortgaged Property, together with all security therefore and all
monies payable hereunder, subject to the conditional permission hereinabove
given to Mortgagor to collect the rentals under any such lease. Mortgagor shall
also execute and deliver to Mortgagee any notification, financing statement, or
other document reasonably required by Mortgagee to perfect the foregoing
assignment as to any such lease. (This instrument constitutes an absolute and
present assignment of the terms, royalties, issues, profits, revenues, income
and other benefits from the Mortgaged Property, subject, however, to the
conditional permission given to Mortgagor to collect, receive, take, use and
enjoy the same as provided hereinabove; provided, further, that the existence or
exercise of such right of Mortgagor shall not operate to subordinate the
assignment to any subsequent assignment, in whole or in part, by Mortgagor and
any such subsequent assignment by Mortgagor shall be subject to the rights of
the Mortgagee hereunder);
TOGETHER WITH a security interest in (i) all property, equipment and
fixtures affixed to or located on the Mortgaged Property, which, to the fullest
extent permitted by law, shall be deemed fixtures and a part of the real
property, (ii) all articles of personal property and all materials delivered to
the Mortgaged Property for the use and operation of said property or for use in
any construction being conducted thereon, and owned by Mortgagor; (iii) all
contract rights, including construction contracts, service contracts,
advertising contracts, purchase orders, equipment leases, all other contract
rights associated with the Mortgaged Property, general intangibles, actions and
rights of action, all deposits prepaid expenses, permits, licenses, including
all rights to insurance proceeds, (iv) all right, title and interest of the
Mortgagor in all tradenames and trademarks hereinafter used in connection with
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the use of the Mortgaged Property, and (v) all proceeds, products, replacements,
additions, substitutions, renewals and accessions of any of the foregoing.
Mortgagor hereby grants to Mortgagee, as a secured party, a security interest in
all fixtures, rights in action and personal property described herein. This
Mortgage is a self-operative security agreement with respect to such property,
but Mortgagor agrees to execute and deliver on demand such other security
agreements, financing statements and other instruments as Mortgagee may request
in order to perfect its security interest or to impose the lien hereof more
specifically upon any of such property. In addition to those specified herein
Mortgagee shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.
PROVIDED, HOWEVER, that these presents are upon the condition that, if
the Mortgagor shall pay or cause to be paid to the Mortgagee the principal and
interest payable in respect to the dates on the day or days when payment shall
become due, all without deduction or credit for taxes or other similar charges
paid by the Mortgagor, and shall keep, perform and observe all and singular the
covenants and promises in the Note, and any renewal, extension, consolidation or
modification thereof, and in this Mortgage expressed to be kept, performed and
observed by and on the part of the Mortgagor, all without fraud or delay then
this Mortgage and all the properties, interest and rights granted, bargained,
sold, liened, remised, released, conveyed, assigned, transferred, mortgaged,
hypothecated, pledged, delivered, set over, warranted and confirmed, shall
cease, terminate and be void, but shall otherwise remain in full force and
effect.
ARTICLE ONE
PARTICULAR COVENANTS OF MORTGAGE
1.01 PERFORMANCE OF NOTE AND MORTGAGE. The Mortgagor will perform,
observe and comply with all provisions hereof, of the Note secured hereby and
any of the other Loan Documents, and will promptly pay to the Mortgagee the sum
of money expressed in the Note with interest thereof and all other sums required
to be paid by the Mortgagor pursuant to the provisions of the Note and the
Mortgage on the day or days when payment shall become due, all without deduction
or credit for taxes or other similar charges paid by the Mortgagor, time being
of the essence for such payments.
1.02 WARRANTY OF TITLE. The Mortgagor covenants that it is indefeasibly
seized of the Land in fee simple, has good, marketable and absolute title to the
Mortgaged Property and has full power and lawful right to convey and mortgage
the same in the manner and form aforesaid. That the Mortgaged Property is free
from all encumbrances except taxes for the current year and any other permitted
encumbrance as shown on the Title Commitment delivered to Mortgagee
simultaneously herewith. The Mortgage hereby makes further assurance to perfect
fee simple title to the Land in the Mortgagee as may be reasonably required. The
Mortgagor does hereby fully warranty the title to the Mortgaged Property against
claims of all persons whomsoever.
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1.03 TAXES, LIENS AND UTILITY CHARGES.
(a) The Mortgagor covenants and agrees to deliver to the
Mortgagee, on or before April 1, of each year, tax receipts evidencing
the payment of all lawfully imposed taxes upon the Mortgaged Property
for the immediately preceding calendar year; to deliver to the
Mortgagee receipts evidencing the payment of all liens, levies, and
assessments for public improvements within thirty (30) days after same
shall become due and payable; and to pay or discharge within 30 days
after the due date, any and all governmental levies that may be made on
the Mortgaged Property, on this Mortgage or the Note or in any other
way resulting from the mortgage indebtedness secured by this Mortgage.
Mortgagor shall have the right to contest the payment of ad valorem
real property taxes pursuant to and in accordance with applicable state
and local law. Mortgagor agrees to supply proof of such contest to the
Mortgagee on or before November 1 of each year.
(b) The Mortgagor shall not permit any mechanic's, laborer's,
statutory or other lien to be created or to remain outstanding upon any
of the Mortgage Property and shall cause same to be released and
discharged, or transferred to Bond as permitted by law, on demand or as
provided for in any collateral loan agreement pertaining thereto.
(c) In the event of the passage of any state, federal,
municipal or other governmental law, order, rule or regulation,
subsequent to the date hereof, in any manner changing or modifying the
laws now in force governing the taxation of mortgages or debts secured
by mortgages, or the manner of collecting taxes so as to adversely
affect the Mortgage, at the option of the Mortgagee, the entire balance
of the principal sum secured by this Mortgage and all interest accrued
thereon shall without notice become immediately due and payable unless
the Mortgage shall and does in a proper and legal manner pay any and
all sums of whatever kind which may be incurred or charged under such
new or modified laws.
(d) Mortgagor shall, upon the request of Mortgagee, make
monthly deposits with Mortgagee on the date of such regular installment
of interest as required by the Note secured hereby (or on the first day
of each month if the interest payments are due other than monthly),
until the Note is fully paid, in an amount equal to one-twelfth
(1/12th) of such proportionate share of the yearly taxes and
assessments as estimated by the Mortgagee to be sufficient to enable
the Mortgagee to pay at least thirty (30) days before they become due,
all taxes, assessments and other similar charges against the Mortgaged
Property or any part thereof. Such added payment shall not be, nor be
deemed to be, trust funds, but may be commingled with the general funds
of the Mortgagee, and no interest shall be payable to Mortgagor with
respect thereof. Upon demand of the Mortgagee, the Mortgagor agrees to
deliver to the Mortgagee such additional monies as are required to
makeup any deficiencies in the amounts necessary to enable the
Mortgagee to pay such taxes, assessments or similar charges. In the
event of a default by the Mortgagor in the performance of any of the
terms, covenants and conditions of this Mortgage or the Note secured
hereby, the Mortgagee may apply to the reduction of the principal sum
or any other sum secured hereby in such manner as the Mortgagee shall
determine, any amount under this Paragraph 1.03(d) of Article One
remaining to the Mortgagor's credit.
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(e) The Mortgagor will pay when due and will not suffer to
remain outstanding, all taxes, assessments and other similar charges
and any charges for utilities, whether public or private, with respect
to the Mortgaged Property.
1.04 NO TAX CREDITS. The Mortgagor will not claim or demand or be
entitled to receive any credit or credits on the principal or interest payable
under the terms of the Note or on any other sums secured hereby, for so much of
the taxes, assessments or similar impositions assessed against the Mortgaged
Property or any part thereof, as are applicable to the indebtedness secured
hereby or to the Mortgagee's interest in the Mortgaged Property. No deduction
shall be claimed from the taxable value of the Mortgaged Property or any part
thereof by reason of the Note or Mortgage.
1.05 INSURANCE.
(a) Mortgagor shall at its sole expense obtain for delivery
to, and maintain for the benefit of, Mortgagee during the life of the
Mortgage, public liability insurance in such amounts and for such
periods as Mortgagee may require. Mortgagor shall pay promptly, when
due, all premiums on the insurance policies and renewals.
(b) Mortgagor shall carry Builder's Risk Insurance once
vertical improvements have commenced and shall keep the improvements
now existing or hereafter erected on the Mortgaged Property, insured
against loss by fire or other hazards, casualties, and contingencies,
including but not limited to flood, in such amounts and for such
periods as may be required by Mortgagee, and to pay promptly when due,
all premiums on such insurance policies or renewals.
(c) All insurance shall be carried on companies approved by
the Mortgagee as to financial standing according to such guidelines as
may be adopted from time to time by Mortgagee, and the policies and
renewals thereof shall be held by Mortgagee and shall have attached
thereto loss payable clauses in favor of and in form acceptable to the
Mortgagee. At least thirty (30) days prior to the expiration date of
all such policies, renewals thereof satisfactory to the Mortgagee shall
be delivered to the Mortgagee. The Mortgagor shall deliver to the
Mortgagee receipts evidencing the payment of all such insurance
policies and renewals. The delivery of the insurance policies shall
constitute an assignment, as further security of all unearned premiums.
In the event of loss, Mortgagor will give immediate notice by mail to
Mortgagee and Mortgagee may make proof of loss if not made promptly by
Mortgagor, and each insurance company concerned is hereby authorized
and directed to make payment for such loss directly to Mortgagee
instead of to Mortgagor and Mortgagee jointly, and so long as this
Mortgage is current and the Mortgage is not in default hereunder the
insurance proceeds or any part thereof shall be applied by Mortgagee to
the restoration or repair of the property damage provided the insurance
proceeds are sufficient to cover all costs of such restoration and
repair. In the event of foreclosure of this Mortgage or other transfer
of title to the Mortgaged Property in extinguishment of the
indebtedness secured hereby, all right, title and interest of the
Mortgagor in and to any insurance policies then in force shall pass to
the purchaser or grantee.
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(d) Mortgagor shall, upon the request of Mortgagee, make
monthly deposits with Mortgagee on the date of each regular installment
of interest as required by the Note secured hereby (or on the first day
of each month if the interest payments are due other than monthly),
until the Note is fully paid, in an amount equal to one-twelfth (1/12)
or such proportionate share of the yearly premium for insurance as
shall enable Mortgagee to pay for the insurance premiums due. Such
added payments shall not be, nor be deemed to be, trust funds, but may
be commingled with the general funds of the Mortgagee, and no interest
shall be payable to Mortgagor with respect thereof. Upon demand of the
Mortgagee, the Mortgagor agrees to deliver to the Mortgagee such
additional monies as are necessary to make up any deficiencies in the
amounts necessary to enable the Mortgagee to pay such insurance
premiums when due.
1.06 CONDEMNATION. If all or any part of the Mortgaged Property shall
be damaged or taken through condemnation (which term when used in this Mortgage
shall include any damage or taking by any governmental authority, and any
transfer by private sale in lieu thereof, either temporarily or permanently),
the entire indebtedness secured hereby shall at the option of the Mortgagee
become immediately due and payable if the Mortgagee in its sole discretion
determines that its security under this Mortgage is impaired. The Mortgagee
shall be entitled to all compensation, awards, and any other payments of relief
therefore and is hereby authorized, at its option to commence, appear in and
prosecute, in its own or the Mortgagor's name, any action or proceeding relating
to any condemnation, and to settle or compromise any claim in connection
therewith. All such compensation, awards, damages, claims, rights of action and
proceeds and the rights thereto are hereby assigned by the Mortgagor to the
Mortgagee, who after deducting therefrom all its expenses including attorneys'
fees, may release any monies so received by it without affecting the lien of
this Mortgage or may apply the same in such manner as the Mortgagee shall
determine, to the reduction of the sums secured hereby, and any balance of such
monies then remaining shall be paid to the Mortgagor. The Mortgagor agrees to
execute such further assignments of any compensations, awards, damages, claims,
rights of action and proceeds as the Mortgagee may require.
1.07 CARE OF PROPERTY.
(a) The Mortgagor shall preserve and maintain the Mortgaged
Property in good condition and repair. Mortgagor shall not remove or
demolish any building presently on or hereafter existing on the Land
without the written consent of the Mortgagee. Mortgagor shall not
permit, commit or suffer any waste, impairment or deterioration of the
Mortgaged Property or of any part thereof, and will not take any action
which will increase the risk of fire or other hazard to the Mortgaged
Property or to any part thereof.
(b) Except as otherwise provided herein, no buildings,
fixtures, personal property, or other part of the Mortgaged Property
shall be removed, demolished or substantially altered without the prior
written consent of the Mortgagee. The Mortgagor may sell or otherwise
dispose of, free from the lien of the Mortgage, furniture, furnishings,
equipment, tools, appliances, machinery, fixtures or appurtenances,
subject to the lien hereof, which may become worn out, undesirable,
obsolete, disused or unnecessary for use in the operation of the
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Mortgaged Property, not exceeding in value the replacement of same by,
substituting for the same, other furniture, equipment, tools,
appliances, machinery fixtures or appurtenances not necessarily of the
same character, but of at least equal value to the Mortgagor and
costing not less than the amount realized from the property sold or
otherwise disposed of, which shall forthwith become, without further
action, subject to the lien of this Mortgage.
(c) If the Mortgaged Property or any part thereof is damaged
by fire or any other cause, the Mortgagor shall give immediate written
notice of same as soon as practicable to Mortgagee.
(d) The Mortgagee is hereby authorized to enter upon and to
inspect the Mortgaged Premises at any time during normal business hours
during the life of this Mortgage.
(e) The Mortgagor will promptly comply with all present and
future laws, ordinances, rules and regulations of any governmental
authority affecting the Mortgaged Property or any part thereof.
(f) If all or any part of the Mortgaged Property shall be
damaged by fire or other casualty, the Mortgagor shall promptly restore
the Mortgaged Property to the equivalent of its original condition
regardless of whether or not there shall be any insurance proceeds
therefor. If a part of the Mortgaged Property shall be physically
damaged through condemnation, the Mortgagor shall promptly restore,
repair or alter the remaining property in a manner satisfactory to the
Mortgagee.
(g) If any work required to be performed under this Paragraph
1.07 of Article One, no such work shall be undertaken until plans and
specifications therefor, prepared by an architect and/or engineer
satisfactory to the Mortgagee, have been submitted to and approved by
the Mortgagee.
1.08 FURTHER ASSURANCES. Mortgagor will make, execute and deliver to
the Mortgagee and, where appropriate, shall cause to be recorded and/or filed
and from time to time thereafter to be re-recorded and/or refiled at such time
and in such offices and places as shall be deemed desirable by the Mortgagee,
any and all such further mortgages, instruments of further assurance,
certificates and other documents as may, in the opinion of the Mortgagee, be
necessary or desirable in order to effectuate, complete, perfect, or to continue
and preserve:
(a) The obligation of the Mortgagor under this Mortgage and
Note secured hereby, and
(b) The lien of this Mortgage as a first lien, upon all of the
Mortgaged Property, whether now owned or hereafter acquired by the
Mortgagor.
Upon any failure by the Mortgagor to do so, the Mortgagee may make,
execute, record, file, re-record and/or re-file any and all such mortgages,
instruments, certificates and documents for and in the name of the Mortgagor,
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and the Mortgagor hereby irrevocably appoints the Mortgagee the agent and the
attorney-in-fact for the Mortgagor to do so.
1.09 AFTER ACQUIRED PROPERTY. The lien of this Security Agreement will
automatically attach, without further act, to all after acquired property
attached to or used in the operation of the Mortgaged Property or any part
hereof.
1.10 LEASES AFFECTING MORTGAGED PROPERTY. The Mortgagor will comply
with and observe its obligations as landlord under any leases affecting the
Mortgaged Property or any part thereof. Mortgagor will furnish Mortgagee with
executed copies of all leases hereafter created on said premises, and all leases
hereafter entered into will be in form and substance subject to the approval of
Mortgagee. The Mortgagee specifically reserves the right to approve all proposed
lessees as to financial capabilities. Unless otherwise herein specifically
provided, all leases shall be inferior and subordinate in all respects to the
lien of this Mortgage, and the terms of each lease shall so provide. Mortgagor
will not, without the express written consent of the Mortgagee, modify,
surrender or terminate, either orally or in writing, any lease hereafter created
upon the Mortgaged Property, nor will the Mortgagor permit an assignment or
sub-lease without the express written consent of the Mortgagee. Mortgagor shall
not accept payment of rent more than two (2) months in advance without the
express written consent of the Mortgagee. If requested by the Mortgagee, the
Mortgagor will specifically assign to the Mortgagee as additional security any
and all such leases hereafter created, including, without limitation, all rents,
royalties, issues and profits of the premises from time to time accruing, the
parties hereto acknowledging that this Mortgage constitutes a general assignment
of any and all such future leases. Mortgagor hereby represents that there are no
leases or agreements to lease all or any part of the mortgaged property now in
effect, except as previously disclosed by Mortgagor to Mortgagee.
1.11 EXPENSES. Mortgagor shall pay, or reimburse Mortgagee for all
costs, charges and expenses, including reasonable attorneys' fees, including
appellate proceedings, and disbursements, and costs of abstracts of title
incurred or paid by Mortgagee in any action, proceeding or dispute in which
Mortgagee is made a part or appears as a party plaintiff or party defendant
because of the failure of the Mortgagor promptly and fully to perform and comply
with all conditions and covenants of this Mortgage and the Note secured hereby,
including but not limited to, the foreclosure of this Mortgage, condemnation of
all or part of the Mortgaged Property, or any action to protect the security
thereof. All costs, charges and expenses so incurred by Mortgagee shall become
due and payable whether or not there be notice, demand, attempt to collect or
suit pending. The amounts so paid or incurred by Mortgagee, together with
interest thereon at the default rate as hereinafter defined from the date
incurred until paid by Mortgagor, shall be secured by the lien of this Mortgage.
1.12 MORTGAGEE'S PERFORMANCE OF DEFAULTS. Except as otherwise provided
for herein, if the Mortgagor shall be in default in the payment of any tax
assessment, encumbrance or other imposition, or in its obligation to furnish
insurance hereunder or performance or observance of any other covenant,
condition or term in this Mortgage, the Mortgagee, may, at its option, without
waiving or affecting its option to foreclose or any other rights to which the
Mortgagee may be entitled hereunder, perform or observe the same, and all
payments made or costs or expenses incurred by the Mortgagee in connection
therewith, shall be secured hereby and shall be immediately repaid by the
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Mortgagor to the Mortgagee, with interest thereon at the default rate as
hereinafter defined. Nothing contained herein shall be construed as requiring
Mortgagee to advance or expend monies for any purpose mentioned in this
paragraph. The Mortgagee is hereby empowered to enter upon the Mortgaged
Property or any part thereof for the purpose of performing or observing any such
defaulted covenant, condition or terms, without thereby becoming liable to the
Mortgagor or any person in possession holding under the Mortgagor.
1.13 BOOKS AND RECORDS. The Mortgagor shall keep and maintain, at all
times, full, true and accurate books of accounts and records, adequate to
reflect correctly the results of the operation of the Mortgaged Property. Upon
request of the Mortgagee, the Mortgagor will furnish to the Mortgagee, within 90
days after the end of each annual fiscal period of the Mortgagor, a balance
sheet and a statement of income and expenses, both in reasonable detail and
certified by Borrowers chief financial officer or if there is none then by any
authorized party to act on behalf of the Borrower, and, if applicable, a rent
schedule of the Mortgaged Property, certified by an accounting officer of the
Mortgagor, showing the name of each tenant, and for each tenant, the space
occupied, the lease expiration date and the rent paid.
1.14 ESTOPPEL AFFIDAVITS. The Mortgagor, within ten days after written
request from the Mortgagee, shall furnish a written statement, duly
acknowledged, setting forth the unpaid principal of, and interest on, the Note
and whether or not any offsets or defenses exist against such principal and
interest. Upon request setting forth the current unpaid principal balance and
interest on the Note and whether any defaults exist thereunder.
ARTICLE TWO
DEFAULTS
2.01 EVENT OF DEFAULT. The term "Event of Default" wherever used in the
Mortgage, shall mean any one or more of the following events:
(a) Failure by Mortgagor to pay, within five (5) days of its
due date any installments of principal or interest due under the Note,
or any deposits for taxes and assessments or insurance premiums due
hereunder, or any other sums to be paid by Mortgagor hereunder or under
any other instrument securing the Note.
(b) Failure by Mortgagor to duly keep, perform and observe any
other covenant, condition or agreement in the Note, this Mortgage or
any of the other Loan Documents for a period of thirty (30) days after
the Mortgagee gives written notice specifying the breach. If the
default cannot be cured within such thirty (30) days, the commencement
of such action to cure the default and the diligent and continuing
effort to cure same shall be acceptable.
(c) If Mortgagor or any endorser or guarantor of this Note
shall file a voluntary petition in bankruptcy or shall be adjudicated a
bankrupt or insolvent, or shall file any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation,
wage earner's plan, assignment for the benefit of creditors,
receivership, dissolution, or similar relief under any present or
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future Federal Bankruptcy Act or any other present or future applicable
federal, state or other statute or law, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or liquidator of
Mortgagor for all or any part of the properties of Mortgagor or of any
guarantor or endorser of the Note; or if within thirty (30) days after
commencement of any proceeding against Mortgagor or any guarantor or
endorser of the Note, seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, debtor relief or
similar relief under any present or future federal, state or other
statute or law, such proceeding shall not have been dismissed or stayed
on appeal; or if, within the thirty days after appointment without the
consent or acquiescence of Mortgagor or of any endorser or guarantor of
the Note, of any trustee, receiver, or liquidator of Mortgagor or any
endorser or guarantor of the Note, or of all or any portion of the
Mortgaged Property, such appointment shall not have been vacated or
stayed on appeal or otherwise; or if within ten (10) days after the
expiration of any such stay, such appointment shall not have been
vacated.
(d) The entry by any court of last resort of a decision that
an undertaking by the Mortgagor as herein provided to pay taxes,
assessments, levies, liabilities, obligations or encumbrances is
legally inoperative or cannot be enforced, or in the event of the
passage of any law changing in any way or respect the laws now in force
for the taxation of mortgages or debts secured thereby for any purpose
or the manner of collection of any such taxes, so as to effect
adversely this Mortgage or the debt secured hereby unless the Mortgagor
can and does in a proper and legal manner, pay any and all sums of
whatever kind which may be incurred or charged under such new or
modified law.
(e) If foreclosure proceedings should be instituted on any
mortgage inferior or superior to the Mortgage, or if any foreclosure
proceeding is instituted on any lien of any kind which is not dismissed
or transferred to bond within thirty (30) days of the service of
foreclosure proceedings on the Mortgagor.
(f) Any default under any mortgage superior or inferior to the
Mortgage.
(g) Any modification of any mortgage superior or inferior to
the Mortgage, increase in the amount outstanding under any superior or
inferior mortgage, whether pursuant to a future advance agreement or
otherwise, or waiver of any principal or interest payments on any note
or mortgage superior or inferior to this Mortgage, or release of any
guarantor or modification of any guaranty affecting any superior or
inferior mortgage.
(h) Any breach of any warranty or material untruth of any
representation of Mortgagor contained in the Note, this Mortgage or any
of the other Loan Documents.
(i) Any action prohibited by paragraph 3.01 infra.
(j) Entry into a management contract for the Mortgaged
Property or any portion thereof by the Mortgagor without the prior
written consent of the Mortgagee.
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(k) Any default in connection with any ongoing borrowing which
the Mortgagor or any guarantor hereof may have outstanding from the
Mortgagee or any of its affiliates during the pendency of this
transaction and notwithstanding anything to the contrary contained
herein, the Mortgagee shall not be obligated to release any of the
Mortgaged Property held as collateral hereby or in connection with any
other loan so long as any loan given by the Mortgagee to the Mortgagor
or any guarantor is in default. For the purpose of the operation of
this subparagraph (k), borrowing and loans between the Mortgagee and
any guarantors hereof shall be defined as, and limited to, those in
which any one or more of the Guarantors individually or collectively
own a fifty-one (51%) percent interest in the borrower.
(l) If the Mortgagor, pursuant to Florida Statutes
697.04(1)(b), as amended from time to time, shall file for record a
limitation of the maximum amount which may be secured by this Mortgage.
(m) If the Mortgagor shall terminate a Defined Benefit Plan
organized under the Employee Retirement Income Security Act of 1974
(ERISA) in force as of the date hereof or at any time during the
pendency of this transaction.
2.02 ACCELERATION OF MATURITY. If an Event of Default shall have
occurred and be continuing, the Mortgagee may, at its sole option, declare the
entire principal amount of the Note then unpaid, and the interest accrued
thereon to be due and payable immediately, and upon such declaration such
principal and interest shall forthwith become and be due and payable, as fully
and to the same effect as if the date of such declaration were the date
originally specified for the maturity of the unpaid balance of the Note.
2.03 MORTGAGEE'S RIGHT TO ENTER AND TAKE POSSESSION, OPERATE AND APPLY
INCOME.
(a) If any Event of Default shall have occurred and be
continuing, the Mortgagor, upon demand of the Mortgagee, shall
forthwith surrender to the Mortgagee the actual possession of the
Mortgaged Property, and to the extent permitted by law the Mortgage
itself, or such officers or agents as it may appoint, may enter and
take possession of all the Mortgaged Property, and may exclude the
Mortgagor and its agents and employees wholly therefrom, and may have
joint access with the Mortgagor to the books, papers and accounts of
the Mortgagor.
(b) If the Mortgagor shall, for any reason, fail to surrender
or deliver any such Mortgaged Property or any part thereof after such
demand by the Mortgagee, the Mortgagee may obtain a judgment or decree
conferring on the Mortgagee the right to immediate possession of all or
part of such Mortgaged Property to the Mortgagee, to the entry of which
such judgment or decree the Mortgagor hereby specifically consents.
(c) The Mortgagor will pay to the Mortgagee, upon demand, all
expenses of obtaining such judgment or decree and reasonable
compensation to the Mortgagee, its attorneys and agents; and all such
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expenses and compensation shall, until paid, be secured by the lien of
this Mortgage.
(d) Upon every such entering upon or taking of possession, the
Mortgagee may hold, store, use, operate, manage and control the
Mortgaged Property and conduct the business thereof, and, from time to
time:
(i) Make all reasonably necessary, as determined by
Mortgagee in its sole discretion, maintenance,
repairs, renewals, replacements, additions,
betterments and improvements thereto and thereon, and
purchase or otherwise acquire additional fixtures,
personalty and other property.
(ii) insure or keep the Mortgaged Property insured and
exercise all the rights and powers of the Mortgagor
in its name or otherwise, with respect to the same;
(iii) manage and operate the Mortgaged Property and
exercise all rights and powers of the Mortgagor and
exercise all the rights and powers of the Mortgagor
in its name or otherwise, with respect to the same;
(iv) enter into any and all agreements with respect to the
exercise by others of any of the powers herein
granted by the Mortgagee,
all as the Mortgagee from time to time may determine to be to its best
advantage; and the Mortgagee may collect and receive all the income, revenues,
maintenance assessments, special assessments, rents, issues and profits of the
same, including those past due as well as those accruing thereafter, and after
deducting:
(aa) all expenses of taking, holding, managing and
operating the Mortgaged Property (including compensation for
the services of all persons employed for such purposes);
(bb) the cost of all such maintenance, repairs,
renewals, replacements, additions, betterments, improvements
and purchases and acquisitions;
(cc) the cost of such insurance;
(dd) such taxes, assessments and other charges prior
to the lien of this Mortgage as the Mortgagee may determine to
pay;
(ee) other proper charges upon the Mortgaged Property
or any part thereof; and
(ff) the reasonable compensation expenses, and
disbursements of the attorneys and agents of the Mortgagee
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shall apply the remainder of the monies so received by the Mortgagee, first to
the payment of accrual interest; second to the payment of any required tax
deposit, insurance deposit or expenses required by Mortgagee; and third toward
the outstanding principal balance on the Note.
2.04 MORTGAGEE'S POWER OF ENFORCEMENT. If an Event of Default shall
have occurred and be continuing the Mortgagee may, at its sole option, either
with or without entry or taking possession as hereinabove provided or otherwise
proceed by suit or suits at law or in equity or by any other appropriate
proceeding or remedy (a) to enforce payment of the Note or the performance of
any term hereof or any other right (b) to foreclose this Mortgage and to sell,
as an entirety or in separate lots or parcels, the Mortgaged Property, under the
judgment or decree of a court or courts of competent jurisdiction, and (c) to
pursue any other remedy available to it, all as the Mortgagee shall deem most
effectual for such purposes. Mortgagee may institute an action to foreclose this
mortgage against the mortgaged property or take such other action at law or in
equity for the enforcement of this mortgage and realization on the mortgage
security or any other security herein or elsewhere provided for, as the law may
allow, and may proceed therein to final judgment and execution for the entire
unpaid balance of the principal debt, with interest at the rate stipulated in
the note to the date of default, and, thereafter, at a rate that shall be 6%
higher than the rate in the note at the time of default, together with all other
sums due by Mortgagor in accordance with the provisions of the note and this
mortgage, including all sums that may have been lent by Mortgagee to Mortgagor
after the date of this mortgage, and all sums that may have been advanced by
Mortgagee for taxes, water or sewer rents, charges or claims, payments on prior
liens, or insurance or repairs to the mortgaged property, and all costs of suit,
together with interest at such rate on any judgment obtained by Mortgagee from
and after the date of any foreclosure sale until actual payment is made of the
full amount due Mortgagee and of an attorneys' fees for collection that shall be
2% of the total of the foregoing sums but not less than $5000; or Mortgagee may
foreclose only as to the sum past due with interest and costs, as above
provided, without injury to this mortgage or the displacement or impairment of
the remainder of the lien thereof, and, at such foreclosure sale, the mortgaged
property shall be sold subject to all remaining items of indebtedness; and
Mortgagee may again foreclose, in the same manner, as often as there may be any
sum past due; or Mortgagee may enter into possession of the mortgaged property
with or without legal action and by force, if necessary. Mortgagee may then
collect therefrom all rentals (which term shall also include sums payable for
use and occupation) and, after deducting all costs of collection and
administration expenses, apply the net rentals to any or all of the following in
such order and amounts as Mortgagee, in Mortgagee's sole discretion, may elect:
the payment of taxes, water and sewer rents, charges and claims, insurance
premiums, and all other carrying charges; the maintenance, repair, or
restoration of the mortgaged property; and on account and in reduction of the
principal or interest, or both, hereby secured. In and for that purpose,
Mortgagor hereby assigns to Mortgagee all rentals due and to become due under
any lease or leases or rights to use and occupation of the mortgaged property
hereafter created, as well as all rights and remedies provided in such lease or
leases or at law or in equity for the collection of the rentals. Mortgagee shall
be entitled to the appointment of a receiver of all the rents, issues, and
profits, as a matter of strict right, regardless of the value of the mortgaged
property and the solvency or insolvency of Mortgagor and other persons liable to
pay such indebtedness. Mortgagor hereby specifically waives the right to object
to the appointment of a receiver as aforesaid and hereby expressly consents that
such appointment shall be made as an admitted equity and that the same may be
done without notice to Mortgagor. The Mortgagee shall take action either by
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proceedings or by the exercise of its powers with respect to entry or taking
possession, as the Mortgagee may determine.
2.05 LEASES. The Mortgagee, at the Mortgagee's option, is authorized to
foreclose this Mortgage subject to the rights of any tenants of the Mortgaged
Property, and the failure to make any such tenants parties defendant to any such
foreclosure proceedings and to foreclose their rights will not be, nor be
asserted to by the Mortgagor, a defense to any proceedings instituted by the
Mortgagor to collect the sums secured thereby, or any deficiency remaining
unpaid after the foreclosure sale of the Mortgaged Property.
2.06 PRINCIPAL AND INTEREST BECOME DUE ON FORECLOSURE. Upon
commencement of suit or foreclosure of this Mortgage, the unpaid principal of
the Note, if not previously declared due, and the interest accrued thereon,
shall at once become and be immediately due and payable.
2.07 PURCHASE BY MORTGAGEE. Upon any such foreclosure sale, pursuant to
judicial proceedings, the Mortgagee may bid for and purchase the Mortgaged
Property and, upon compliance with the terms of sale, may hold, retain and
possess and dispose of such property in its own absolute right, without further
accountability.
2.08 APPLICATION OF INDEBTEDNESS TOWARD PURCHASE PRICE. Upon such
foreclosure sale, pursuant to judicial proceedings, the Mortgagee may, if
permitted by law, after allowing for the proportion of the total purchase price
required to be paid in cash for the costs and expenses of the sale, compensation
and other charges, in paying the purchase price, apply to the purchase price any
portion of or all sums due to the Mortgagee under the Note and this Mortgage, in
lieu of cash to the amount which shall, upon distribution of the net proceeds of
such sale, be payable thereon.
2.09 WAIVER OF APPRAISEMENT, VALUATION, STAY, EXTENSION AND REDEMPTION
LAWS. The Mortgagor agrees to the full extent permitted by law, that in case of
default on its part hereunder, neither the Mortgagor nor anyone claiming through
or under it shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension, or redemption laws now or hereafter in
force, in order to prevent or hinder the enforcement or foreclosure of this
Mortgage, or the absolute sale of the Property being conveyed, to the final and
absolute putting into possession thereof, immediately after such sale; the
purchasers thereof, and the Mortgagor, for itself and all who may at any time
claim through or under it, hereby waive to the full extent that it may lawfully
do so, the benefit of all such laws, and any and all right to have the assets
comprised in the security intended to be created hereby marshalled upon any
foreclosure of the lien hereof and agrees that the Mortgagee or any court having
jurisdiction to foreclose such lien may sell the Mortgaged Property as an
entirety.
2.10 RECEIVER. If an Event of Default shall occur and be continuing,
then upon the filing of a complaint or other commencement of judicial
proceedings to enforce the rights of the Mortgagee, the Mortgagee to the extent
permitted by law and without regard to the value or occupancy of the security
shall be entitled as a matter of right to the appointment of a receiver to enter
15
upon and take possession of the Mortgaged Property. The receiver shall collect
all rents, revenues, issues, income, products and profits thereof, pending such
proceedings and apply the same as the Court may direct. The receiver shall have
all rights and powers permitted under the laws of Florida and such other powers
as the court making such appointment shall confer. The expenses, including
receiver's fees, counsel fees, costs and agent's commission, incurred pursuant
to the powers herein contained shall be secured by this Mortgage. The right to
enter and take possession of, to manage and operate, the Mortgaged Property, to
collect the rents, issues and profits thereof, whether by a receiver or
otherwise, shall be cumulative to any other right or remedy hereunder or
afforded by law, and may be exercised concurrent therewith or independently
thereof. Mortgagee shall be liable to account only for such rents, issues and
profits actually received by Mortgagee, whether received pursuant to this
Paragraph 2.10 or Paragraph 2.03 above. Notwithstanding the appointment of a
receiver, trustee or other custodian, the Mortgagee shall be entitled as pledgee
to the possession and control of any cash, or other instruments at the time held
by, or payable or deliverable under the terms of this Mortgage to the Mortgagee.
2.11 SUITS TO PROTECT THE MORTGAGED PROPERTY. The Mortgagee shall have
power (a) to institute and maintain such suits and proceedings as it may deem
expedient to prevent any waste or impairment of the Mortgaged Property by any
acts which may be unlawful or any violation of the Mortgage, (b) to preserve or
protect its interest in the Mortgaged Property and in the income, revenues,
rents and profits arising therefrom, and (c) to restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid, if the enforcement or of
compliance with, such enactment, rule or order would impair the security
hereunder or be prejudicial to the interest of the Mortgagee.
2.12 PROOFS OF CLAIM. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting the Mortgagor, its creditors, or its property,
the Mortgagee, to the extent permitted by law, shall be entitled to file such
proofs of claim and other documents as may be necessary or advisable in order to
have the claims of the Mortgagee allowed in such proceedings for the entire
amount due and payable by the Mortgagor under this Mortgage at the date of the
institution of such proceedings and for any additional amount which may become
due and payable by the Mortgagor hereunder after such date.
2.13 ACCELERATION; APPLICATION OF MONIES BY MORTGAGEE.
(a) If default shall be made in the payment of any amount due
under the Mortgage or the Note secured hereby, then, upon demand of the
Mortgagee, the Mortgagor will pay to the Mortgagee the entire amount
due and payable under the Note. If Mortgagor shall fail to pay the same
forthwith upon such demand, the Mortgagee shall be entitled to xxx for
and to recover a judgment for the whole amount so due and unpaid
together with costs, which shall include the reasonable compensation,
expenses and disbursements of the Mortgagee's agents and attorneys
either before, after or during the pendency of any proceedings for the
enforcement of the Mortgage including appellate proceedings. The right
of the Mortgagee to recover such judgment shall not be affected by any
taking, possession, or foreclosure sale hereunder, or by the exercise
of any other right, power or remedy for the enforcement of the terms of
this Mortgage, or the foreclosure of the lien hereof. In case of a
foreclosure sale of any of the Mortgaged Property and of the
16
application of the proceeds of sale to the payment of the debt hereby
secured, the Mortgagee shall be entitled to enforce payment of and to
receive all amounts then remaining due and unpaid upon the Note, and
the Mortgagee shall be entitled to recover a judgment for any portion
of the debt remaining unpaid, with interest.
(c) The Mortgagor agrees to the full extent that it may
lawfully so agree, that no recovery of any such judgment by the
Mortgagee and no attachment or levy of any execution upon any such
judgment upon any of the Mortgaged Property or upon any other property
shall in any manner or to any extent release the lien of the mortgage
upon the Mortgaged Property or any part thereto for any liens, rights,
powers or remedies of the Mortgagee hereunder, but such lien, rights,
powers and remedies shall continue unimpaired as before.
(d) Any monies thus collected by the Mortgagee or received by
the Mortgagee under this Paragraph 2.13 shall be applied as follows:
First, to the payment of the reasonable attorneys' fees, costs
and expenses incurred by Mortgagee, its agents and attorneys, including
but not limited to taxes paid, insurance premiums paid, receivers fees,
etc.
Second, toward payment of accrued interest on the Note,
including the prepayment premium, if applicable.
Third, toward payment of the unpaid balance on the Note.
2.14 DELAY OR OMISSION NO WAIVER. No delay or omission of the Mortgage
or of any holder of the Note to exercise any right, power, or remedy accruing
upon any default shall exhaust or impair any such right, power or remedy nor
shall same be construed to be a waiver of any such default, or acquiescence,
herein; and every right, power and remedy given by this Mortgage to the
Mortgagee may be exercised by Mortgagee from time to time and as often as may be
deemed expedient by the Mortgagee.
2.15 NO WAIVER OF ONE DEFAULT TO AFFECT ANOTHER. No waiver of any
default hereunder shall extend to or shall affect any subsequent or any other
existing default or shall impair any rights, powers or remedies consequent
thereon. If the Mortgagee (a) grants forbearance or an extension of time for the
payment of any sums secured hereby, (b) takes other or additional security for
the payment thereof; (c) waives or does not exercise any right granted herein or
in the Note, (d) releases any part of the Mortgaged Property from the Note or
Mortgage; (e) consents to the filing of any map, plat or replat thereof, (f)
consents to the granting of any easement thereon, or (g) makes or consents to
any agreement subordinating the lien hereof, any such act or omission shall not
release, discharge, modify, change or affect the original liability under the
Note or otherwise of the Mortgagor or any subsequent purchaser of the Mortgaged
Property or any part thereof, or any maker, co-signer, endorser, surety or
guarantor; nor shall any such act or omission preclude the Mortgagee from
exercising any right, power or privilege herein granted or intended to be
granted in the event of any other default then made or of any subsequent default
nor, except as otherwise expressly provided in an instrument or instruments
executed by the Mortgagee, shall the lien of this Mortgage be altered thereby.
17
In the event of the sale or transfer by operation of law or otherwise of all or
any part of the Mortgaged Property, the Mortgagee, without notice to any person
or corporation, is hereby authorized and empowered to deal with any such vendee
or transferee with reference to the Mortgaged Property or the indebtedness
secured hereby, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any of
the liabilities or undertakings hereunder.
2.16 DISCONTINUANCE OF PROCEEDINGS - DISPOSITION OF PARTIES RESTORED.
In case the Mortgagee shall have proceeded to enforce any right or remedy under
this Mortgage by foreclosure, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Mortgagee, then in every such case, the Mortgagor
and the Mortgagee shall be restored to their former positions and rights
hereunder, and all rights, powers and remedies of the Mortgagee shall continue
as if no such proceeding has been taken.
2.17 REMEDIES CUMULATIVE. No right, power or remedy conferred upon or
reserved by the Mortgagee by this Mortgage, is intended to be exclusive of any
other right, power or remedy, but each and every such right, power and remedy
shall be cumulative and current and shall be in addition to any other right,
power and remedy given hereunder or nor or hereafter existing at law or in
equity or by statute.
2.18 SUBROGATION. The Mortgagee hereby is subrogated to the claims and
liens of all parties whose claim or liens are discharged or paid with the
proceeds of the indebtedness secured by this Mortgage.
2.19 ABSTRACT. The Mortgagee reserves the right to require an abstract
of title prepared by a reputable abstracting company acceptable from the
earliest public records through a current date, of all instruments affecting the
title to the land recorded in the Public Records of the County in which the land
is located, evidencing good and marketable title to the land, subject only to
such liens or encumbrances and such other matters as shall be acceptable to
Mortgagee, and once received, the abstract shall belong to and remain in the
possession of the Mortgagee during the lien of this Mortgage.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
3.01 NO TRANSFER. It is understood and agreed by Mortgagor that as part
of the inducement to Mortgagee to make the loan evidenced by the Note, Mortgagee
has considered and relied upon the credit worthiness and reliability of
Mortgagor. Mortgagor covenants and agrees not to assign, sell, convey, transfer,
lease, enter into any management agreement, or further encumber any interest in
or any part of the Mortgaged Property without the prior written consent of the
Mortgagee, and any such sale, conveyance, transfer, lease, or encumbrance made
without Mortgagee's prior written consent shall constitute an event of default
hereunder. If the Mortgagor is not an individual, it is further understood and
agreed that any assignment, sale, conveyance, transfer, encumbrance or pledge of
18
any ownership interest of the Mortgagor, including without limitation, any
transfer of limited liability company membership interests, shares of stock or
control in Mortgagor, whether by sale, exchange, conveyance, merger,
consolidation, or otherwise without the Mortgagee's prior written consent shall
be deemed a transfer of the Mortgaged Property and prohibited herein. Consent by
the Mortgagee shall be at the sole and absolute discretion of the Mortgagee. A
contract to deed or agreement for deed or assignment of beneficial interest in
any trust shall constitute a transfer pursuant to the provisions of this
paragraph. If any person or entity , should obtain any interest in all or any
part of the Mortgaged Property, pursuant to the execution and enforcement of any
lien, security interest, or other right, whether superior, equal or subordinate
to this Mortgage or the lien hereof, such event shall be deemed to be a transfer
by Mortgagor and an Event of Default hereunder.
3.02 UNIFORM COMMERCIAL CODE. The parties agree that this Mortgage is a
security agreement under the Uniform Commercial Code for the purpose of creating
a lien on the Mortgaged Property.
3.03 MODIFICATION. It is understood and agreed that the Mortgagee may
at any time, without notice to any person, grant to the Mortgagor any
modification of any kind or nature whatsoever, or allow any change or changes,
substitution or substitutions of any of the property described in this Mortgage
or any other collateral which may be held by the Mortgagee without in any manner
affecting the liability of the Mortgagor, any endorsers or guarantors of the
indebtedness hereby secured or any other person for the payment of said
indebtedness, together with interest and any other sums which may be due and
payable to the Mortgagee, and also without in any manner affecting or impairing
the lien of this Mortgage upon the remainder of the Mortgaged Property and other
collateral which is not changed or substituted; and it is also understood and
agreed that the Mortgagee may at any time, without notice to any person, release
any portion of the property described in this Mortgage or any other collateral,
or any portion of any other collateral which may be held as security for the
payment of the indebtedness hereby secured, either with or without any
consideration of such release or releases, without in any manner effecting the
liability of the Mortgagor, all endorsers or guarantors, if any, and all other
persons who are or shall be liable for the payment of said indebtedness, and
without affecting, disturbing or impairing in any manner whatsoever, the
validity and priority of the lien of this Mortgage for the full amount of the
indebtedness remaining unpaid, together with all interest and advances which
shall become payable, upon the entire remainder of the Mortgaged Property which
is unreleased, and without in any manner effecting or impairing to any extent
whatsoever any and all other collateral security which may be held by the
Mortgagee. It is distinctly understood and agreed by the Mortgagor and the
Mortgagee that any release or releases may be made by the Mortgagee without the
consent or approval of any other person or persons whomsoever.
3.04 LEASING COMMISSION. Mortgagor covenants that every agreement to
pay leasing commissions with respect to the leasing of space in the Mortgaged
Property, or any part thereof, if any, are and shall be subject, subordinate and
inferior to the right of the Mortgagee, so that in the event Mortgagee acquires
title to the Mortgaged Property either at a foreclosure sale or by other means,
19
Mortgagee will be exonerated and discharged from all liabilities for the payment
of any such commissions or compensations.
3.05 FINANCIAL STATEMENTS. Mortgagor agrees to deliver quarterly to the
Mortgagee financial statements (balance sheet and profit and loss statements)
prepared by a certified public accountant approved by Mortgagee in form and
content satisfactory to Mortgagee ("Financial Statements") of the Mortgagor and
Mortgagor further agrees on behalf of itself, and all guarantors, co-makers and
endorsers of the Note, to deliver quarterly to the Mortgagee, financial
statements of the Mortgagor and all guarantors, co-makers and endorsers within
30 days of the close of each calendar-year quarter along with a sworn itemized
statement of all earnings and expenses of the Mortgaged Property. Mortgagor
agrees to make the books and accounts relating to the mortgaged property
available for inspection by Mortgagee, or its representatives, upon request at
any reasonable time. Mortgagor acknowledges and agrees that this provision is a
material consideration of the granting of this Mortgage, and that if the
Mortgagor, and all guarantors, co-makers and endorsers fail or refuse to deliver
such financial statements, that such failure to delivery such statements shall
be considered an Event of Default, and the Mortgagee may, at its option, elect
to accelerate the remaining unpaid principal balance due and payable on the
Note, together with all accrued interest, as if the Mortgagor had defaulted in a
payment due and payable under the terms of the Note. The form of the Financial
Statements shall be subject to approval by Mortgagee and shall include such
supplemental schedules as Mortgagee may reasonably require. The foregoing
notwithstanding, so long as Mortgagee is a subsidiary consolidated with a public
corporation required to file statements with the Securities and Exchange
Corporation, delivery of the requisite 10-QSB and 10-KSB Statements shall
satisfy the requirements of this section 3.05.
3.06 MAXIMUM RATE OF INTEREST. Nothing herein contained nor in the Note
secured hereby or any instrument or transaction related thereto, shall be
construed or so operate as the require the Mortgagor, Maker, or any person
liable for the payment of the loan made pursuant to said Note, to pay interest
in an amount or at a rate greater than the maximum allowed by law. Should any
interest or other charges in the nature of interest paid by the Mortgagor, Maker
or any parties liable for the payment of the loan of interest in excess of the
maximum rate of interest allowed by applicable law, then any and all such excess
shall be and the same is hereby waived by the holder hereof, and all such excess
shall be automatically credited against and in reduction of the principal
balance, and any portion of said excess which exceeds the principal, balance
shall be paid by the holder hereof to the Mortgagor, Maker or any parties liable
for the payment of the loan made pursuant to said Note, it being the intent of
the parties hereto that under no circumstances shall the Mortgagor, Maker or any
parties liable for the payment of the loan hereunder, be required to pay
interest in excess of the maximum rate allowed by law.
3.07 DEFAULT RATE. The Default Rate of interest shall be applicable
subsequent to an Event of Default as defined in Paragraph 2.01 and where
elsewhere provided for in this Mortgage. The Default Rate shall be the maximum
interest rate per annum permissible under Florida Law, or Federal Law in the
event Federal Law pre-empts Florida law or is otherwise applicable.
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3.08 TIME IS OF THE ESSENCE. It is specifically agreed that time is of
the essence in this Mortgage and that no waiver of any obligation hereunder or
of the obligation secured hereby shall at any time thereafter be held to be a
waiver of the terms hereof or of the instrument secured hereby.
3.09 ATTORNEYS' FEES AND EXPENSES. Wherever provision is made herein
for payment of reasonable attorneys' fees or counsel fees or expenses incurred
by the Mortgagee, said provision shall include, but not limited to, reasonable
attorneys' or counsels fees or expenses incurred in any and all judicial,
bankruptcy, reorganization, administrative, or other proceedings, including
appellate proceedings, whether such proceedings arise before or after entry of a
final judgment.
3.10 FLORIDA CONTRACT. This mortgage is made by Mortgagor and accepted
by Mortgagee in the State of Florida, with reference to the laws of such State,
and shall be construed, interpreted, enforced and governed by and in accordance
with such laws (excluding the principles thereof governing conflicts of law),
and Federal law in the event and only in the event Federal law pre-empts State
law.
3.11 SUCCESSORS, ASSIGNS INCLUDED IN PARTIES. Whenever in this mortgage
one of the parties hereto is named or referred to, the successors and assigns of
such party shall be included and all covenants and agreements contained in this
Mortgage by or on behalf of the Mortgagor or by or on behalf of Mortgagee, shall
bind and inure to the benefit of their respective successors and assigns whether
so expressed or not. Whenever the singular or plural number, masculine or
feminine or neuter gender is used herein, it shall equally include the other.
3.12 NOTICE.
(a) Mortgagor. Any notice, demand or instrument authorized by
this Mortgage to be served on or give to the Mortgagor may be served on
or given to the Mortgagor at:
Enclaves of Eagle Nest LLC
c/o Enclaves Group, Inc.
00 Xxxxxxxxx Xxxx, Xxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
or at such other address as may have been furnished in writing to the
Mortgagee by the Mortgagor.
(b) Mortgagee. Any notice, demand or instrument authorized by
this Mortgage to be served on or give to the Mortgagor may be served on
or given to the Mortgagor at:
Magellan Mortgage Group
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
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with a copy to:
XXXXX X. ELK, ESQ.
ELK, XXXXXXX, XXXXXXX & XXXXX, LLP 0000
Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000-X Xxxx
Xxxxx, Xxxxxxx 00000
or at such other address as may have been furnished in writing to the
Mortgagor by the Mortgagee.
3.13 HEADINGS. The headings of the articles, sections, paragraphs and
subdivisions of this Mortgage are for convenience of reference only, and are not
to be considered a part hereof, and shall not limit or otherwise affect any of
the terms hereof.
3.14 INVALID PROVISIONS TO AFFECT NO OTHERS. In case any one or more of
the covenants, agreements, terms or provisions contained in this Mortgage, the
Note or any of the other Loan Documents, shall be invalid, illegal or
unenforceable in any respect, the validity of the remaining covenants,
agreements, terms or provisions contained herein and in the Note shall be in no
way affected, prejudiced or disturbed thereby.
3.15 BANKRUPTCY. Mortgagor hereby agrees that, in consideration of the
recitals and mutual covenants contained herein, and for other good and valuable
consideration, including the loan proceeds of the Note, the receipt and
sufficiency of which is hereby agreed to, Mortgagor represents that it has not
(i) entered into any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any present or future federal
or state act or law relating to bankruptcy, insolvency, or other relief for
debtors, (ii) sought or consented to or acquiesced in the appointment of any
trustee, receiver, conservator, or liquidator, (iii) is the subject of any
order, judgment, or decree entered by any court of competent jurisdiction
approving a petition filed against such party for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency, or other relief for debtors. Mortgagor hereby agrees
that, in consideration of the recitals and mutual covenants contained herein,
and for other good and valuable consideration, Mortgagor hereby acknowledges
that in the event that it shall (i) file in any bankruptcy court of competent
jurisdiction a petition in bankruptcy or be the subject of any voluntary or
involuntary petition under Title 11 of the U.S. Code as amended ("Bankruptcy
Code"); (ii) be the subject of any order of relief issued under the Bankruptcy
Code; (iii) file or be the subject of any petition seeking any reorganization,
or arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency, or other relief for debtors; (iv) have sought or
consented to or acquiesced in the appointment of any trustee or receiver,
conservator, or liquidator; or (v) be the subject or any order, judgment, or
decree entered by any court of competent jurisdiction approving a petition filed
against Mortgagor, for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency, or other
relief for debtors under any present or future federal or state law relating to
bankruptcy, insolvency or relief for debtors, then, subject only to obtaining
prior court approval, and without the need for any further showing of cause,
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Mortgagee shall thereupon be entitled to, and Mortgagor hereby irrevocably
consents to the granting of relief from any automatic stay imposed by Section
362 of the Bankruptcy Code, or otherwise, and waives any rights under Section 11
U.S.C. Section 365, on or against the exercise of the rights and remedies
otherwise available to Mortgagor as provided by law, any legal action under the
Note, Mortgage, and other Loan Documents (including, without limitation, the
right of Mortgagee to begin or complete the foreclosure suit and sale of the
collateral) and otherwise provided by law, and Mortgagor irrevocably waives its
respective right to object to such relief. Mortgagor specifically agrees not to
directly or indirectly oppose, interfere with, impede or otherwise defend
against Mortgagee's efforts to gain relief from the automatic stay or to
otherwise enforce its rights hereunder. The remedies described in this paragraph
are not exclusive and shall not limit Mortgagee's rights. To the extent the
terms and conditions of this Article 3.15 are unenforceable, illegal or
unconscionable, the same shall be deemed severed and deleted from this Mortgage,
and all other terms and conditions shall remain in full force and effect.
3.16 ENVIRONMENTAL INDEMNITY.
(a) COVENANTS, REPRESENTATIONS AND WARRANTIES OF MORTGAGOR.
Mortgagor covenants, represents and warrants that: (a) no substances,
including without limitation, asbestos or any substance containing more
than 0.1 percent asbestos, the group of compounds known as
polychlorinated biphenyls, flammable explosives, radioactive materials,
chemicals known to cause cancer or reproductive toxicity, pollutants,
effluents, contaminants, emissions or related materials or substances
(collectively "Hazardous Materials") (any mixture of a Hazardous
Material, regardless of concentration, with other materials shall be
considered a Hazardous Material) under any law relating to
environmental conditions and industrial hygiene, including without
limitation, the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 .S.C. Section 6901 et seq., the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.,
the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Toxic Substances
Control Act, 15 U.S.C. Sections 2601-2629, the Safe Drinking Water Act,
42 U.S. Section 300f et seq., and all similar federal, state and local
environmental statutes, ordinances and the regulations, orders, decrees
now or hereafter promulgated thereunder (collectively, the "Hazardous
Material Laws"), have been or shall be installed, used, generated,
manufactured, treated, handled, refined, produced, processed, stored or
disposed of, or otherwise present in, on or under the Property except
that this provision does not prohibit: (1) the use of unrecycled fuel
oil as a boiler fuel; (2) the normal use of consumer products; or (3)
the normal use of materials such as cleaning products, copies toner,
and similar materials routinely used in office; (b) no activity has
been or shall be undertaken on the Property would case (1) the Property
to become a hazardous waste treatment, storage or disposal facility
within the meaning of, or otherwise bring the Property within the ambit
of RCRA or any Hazardous Material Law; (2) a release or threatened
release of Hazardous Material from the Property within the meaning of,
or otherwise bring the Property within the ambit of CERCLA or XXXX or
any Hazardous Material Law; or (3) the discharge of Hazardous Material
into any watercourse, body of surface or subsurface water or wetland,
23
or the discharge into the atmosphere of any Hazardous Material which
would require a permit under any Hazardous Material Law; (c) no
activity has been or shall be undertaken with respect to the Property
which would cause a violation or support a claim under RCRA, CERCLA,
XXXX or any Hazardous Material Law; (d) no underground storage tanks or
underground Hazardous Material deposits are or were located on the
Property and subsequently removed or filled; (e) no investigation,
administrative order, litigation or settlement with respect to any
Hazardous Materials is threatened or in existence with respect to the
Property; and (f) no notice has been served on Mortgagor from any
entity, governmental body, or individual claiming any violation of any
Hazardous Material Law, or requiring compliance with any Hazardous
Material Law, or demanding payment or contribution for environmental
damage or injury to natural resources
(b) INDEMNITIES. Mortgagor hereby agrees to unconditionally
indemnify, defend, and hold Mortgagee harmless against any (i) loss,
liability, damage, expense or claim arising from the imposition or
recording of a lien, the incurring of costs of required repairs, clean
up or detoxification and removal under any Hazardous Material Law with
respect to the Property or liability to any third party in connection
with any violation of a Hazardous Material Law and (ii) other loss,
liability, damage, expense or claim which may be incurred by or
asserted against Mortgagee directly or indirectly resulting from the
presence on or under, or the discharge, emission or release from the
Property into or upon the land, atmosphere, or any watercourse, body of
surface or subsurface water or wetland, arising from the installation,
use, generation, manufacture, treatment, handling, refining,
production, processing, storage, removal, clean up or disposal of any
Hazardous Material (as defined above) whether or not caused by
Mortgagor.
Mortgagor shall pay when due any judgments or claims for damages,
penalties or otherwise against Mortgagee, and shall assume the burden
and expense of defending all suits, administrative proceedings and
resolutions of any description with all persons, political subdivisions
or government agencies arising out of the occurrences set forth in this
Agreement. In the event that such payment is not made to Mortgagee,
Mortgagee at its sole discretion, may proceed to file suit against
Mortgagor to compel such payments.
3.17 WAIVER OF JURY TRIAL. MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY
LITIGATION BASED HEREON OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE
MORTGAGE, LOAN DOCUMENTS, AND ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR MORTGAGEE ENTERING INTO THIS MORTGAGE.
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ARTICLE FOUR
ADDITIONAL PROVISIONS
4.01 LIMITATION ON ADDITIONAL FINANCING: Mortgagor shall not undertake
additional financing secured by any lien or security interest on property
encumbered in favor of Mortgagee to secure the loan without first obtaining
Mortgagee's written consent. Any violation of the foregoing limitation shall, at
the option of Mortgagee, be deemed an event of default hereunder.
4.02 COMPLIANCE WITH LAW AND REGULATIONS: Mortgagor shall comply with
all laws, ordinances, regulations, and orders of all federal, state, municipal,
and other governmental authorities relating to the mortgaged property.
4.03 INSPECTION: Mortgagee and any persons authorized by Mortgagee
shall have the right at any time, upon reasonable notice to Mortgagor, to enter
the mortgaged property at a reasonable hour to inspect and photograph its
condition and state of repair.
4.04 MORTGAGOR'S WAIVERS: Mortgagor hereby waives and releases:
(a) all errors, defects, and imperfections in any proceeding
instituted by Mortgagee under the note, this mortgage, or both of them;
(b) all benefit that might accrue to Mortgagor by virtue of
any present or future law exempting the mortgaged property, or any part
of the proceeds arising from any sale thereof from attachment, levy,
sale on execution, or providing for any stay of execution, exemption
from civil process, or extension of time for payment; and
(c) unless specifically required herein, all notices of
Mortgagor's default or of Mortgagee's election to exercise or
Mortgagee's actual exercise of any option under the note or this
mortgage.
4.05 AMENDMENT: This mortgage cannot be changed or amended except by
agreement in writing signed by the party against whom enforcement of the change
is sought.
4.06 CONSTRUCTION: Whenever used in this mortgage, unless the context
clearly indicates a contrary intent:
(a) The word "Mortgagor" shall mean the person who executes
this mortgage and any subsequent owner of the mortgaged property and
his or her respective heirs, executors, administrators, successors, and
assigns;
(b) The word "Mortgagee" shall mean the person specifically
named herein as "Mortgagee", or any subsequent holder of this mortgage;
(c) The word "person" shall mean individual, corporation,
partnership, or unincorporated association;
(d) The use of any gender shall include all genders;
25
(e) The singular number shall include the plural and the
plural the singular, as the context may require;
(f) If Mortgagor is more than one person, all agreements,
conditions, covenants, provisions, stipulations, warrants of attorney,
authorizations, waivers, releases, options, undertakings, rights, and
benefits made or given by Mortgagor shall be joint and several and
shall bind and affect all persons who are defined as "Mortgagor" as
fully as though all of them were specifically named herein wherever the
word "Mortgagor" is used.
THIS IS A BALLOON MORTGAGE AND THE FINAL PRINCIPAL PAYMENT OR THE PRINCIPAL
BALANCE DUE UPON MATURITY IS $1,250,000.00, TOGETHER WITH ACCRUED INTEREST, IF
ANY, AND ALL ADVANCEMENTS MADE BY THE MORTGAGEE UNDER THE TERMS OF THIS
MORTGAGE.
IN WITNESS WHEREOF the parties hereto have set their hands and seals on
the date first written above.
WITNESSES: MORTGAGOR:
ENCLAVES OF EAGLE NEST LLC
By: Enclaves Group, Inc., its
/s/ Xxxxx Xxxx Managing Member
-------------------------------
Printed Name: Xxxxx Xxxx
/s/ Xxxxxxx Xxxxxxx
-------------------------------
Printed Name: Xxxxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxx (L.S.)
------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and CEO
(Acknowledgment on following page)
00
XXXXX XX XXX XXXX )
) ss:
COUNTY OF WESTCHESTER )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State aforesaid and in the County aforesaid, to take
acknowledgements, personally appeared Xxxxxx X. Xxxxx, President and CEO of
Enclaves Group, Inc., a Delaware corporation, the Managing Member of ENCLAVES OF
EAGLE NEST LLC, a Florida limited liability company, who
[X] is personally known to me, or
[_] has produced ______________________ as identification
and who, being duly sworn, executed the foregoing instrument and acknowledged
before me that he executed the same.
WITNESS my hand and official seal in the County and State last
aforesaid this 8 day of December, 2005.
/s/ Xxxxx Xxx Xxxxxx
------------------------------
(Signature)
______________________________
(Printed Name)
My Commission Expires:
My Commission No. is:
Xxxxx Xxx Xxxxxx
Notray Public, State of New York
No. 02PA6105869
Qualified in Westchester County
Commission Expires Feb. 23, 2008
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EXHIBIT A
LEGAL DESCRIPTION
