When recorded, mail to.
Xxxxxxx X. Xxxxxxx, Esq.
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
This document is intended
to be recorded in
Beaufort County, South Carolina
THIS MORTGAGE CONSTITUTES A FIXTURE FINANCING STATEMENT FILING
PURSUANT TO SECTION 36-9-402 OF THE SOUTH CAROLINA CODE OF LAWS.
MORTGAGE AND SECURITY AGREEMENT
This Mortgage and SECURITY AGREEMENT (as amended, modified or
supplemented from time to time, this "Security Instrument") is granted as of
July 8, 1998, by Epic Resorts - Hilton Head, LLC., a Delaware limited
liability company, as mortgagor (hereinafter, together with its successors
and assigns, called the "Obligor"), whose address is 0000 Xxxxx Xxxxxx, Xxxxx
000, Xxxx xx Xxxxxxx, XX 00000 to United States Trust Company of New York, a
New York banking corporation, acting as trustee (herein together with its
successors and assigns in such capacity, the "Mortgagee" for the Holders (as
defined below) pursuant to the Trust Indenture (as defined below), whose
address is 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
PRELIMINARY STATEMENTS
(1) This Security Instrument is made pursuant to the Trust Indenture,
dated as of the date hereof (herein, as amended or otherwise modified from
time to time, the "Trust Indenture"), among Epic Resorts, Inc., a Delaware
corporation (herein, together with its successors and assigns, the
"Company"), Obligor and the other Subsidiary Guarantors as identified
therein, and the Mortgagee acting as trustee for the Holders (defined below),
providing, among other things for a loan to the Company of $130,000,000, with
such loan being evidenced by the Company's 13% Senior "Secured Notes due 2005
in the aggregate principal amount of $130,000,000 (the "Notes", such term to
include all notes and other securities issued in substitution or exchange
therefor or in replacement thereof).
(2) Obligor has guaranteed to the holders of the Notes (the "Holders")
the payment when due of the Notes pursuant to a guaranty (the "Subsidiary
Guaranty").
(3) It is a condition precedent to the making of the loan to the
Company that the Obligor shall have executed and delivered to or for the
benefit of the Mortgagee this Security Instrument.
(4) The Obligor desires to execute this Security Instrument to satisfy
the conditions described in the preceding paragraph and to secure the
performance of its covenants and agreements contained in the Trust Indenture,
herein and in any agreement or instrument made by it with respect to any
indebtedness or obligations secured hereby and to secure the payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due), but not necessarily
in the order set forth, of the following indebtedness, liabilities and
obligations, now existing or hereafter arising, ratably (including any
modifications or replacements thereof):
(a) the aggregate principal amount of $130,000,000, with interest
thereon, as evidenced by the Notes, maturing on or prior to June 15, 2005;
(b) all sums advanced by or on behalf of the Mortgagee pursuant to any
term or provision of this Security Instrument or any other agreement or
instrument relating to or securing any of the foregoing;
(c) all advances or disbursements of the Mortgagee with respect to the
Property (defined below) for the payment of taxes, levies, assessments,
insurance, insurance premiums or costs incurred in the protection of taxes,
levies, assessments, insurance, insurance premiums or costs incurred in
the protection of the Property; and
(d) all other liabilities, obligations and indebtedness of the Obligor
incurred under, arising out of or in connection with the Subsidiary Guaranty,
the Trust Indenture and this Security Instrument.
(all of such indebtedness, liabilities and obligations being collectively
referred to hereinafter as the "Indebtedness").
(5) This Security Instrument creates a lien on the fee simple interest
of the Obligor in the Property and shall automatically become a lien on any
and all condominium units or time share interests in the Property, upon the
creation of such condominium units or time share interests in the Property.
(6) The creation of condominium units and/or time share interests in
the Property shall be permitted only upon satisfaction of the following
conditions:
(i) No Event of Default (as hereinafter defined) shall have occurred or
be continuing under this Security Instrument;
(ii) Obligor shall have received and approved all documents necessary
for the creation of the condominium units and/or time share interests,
including, without limitation, the master deed and/or declaration of the time
share regime;
(iii) Obligor shall have received all approvals and consents, and made
all filings, required in conjunction with the establishment of the
condominium units and/or time shares; and
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(iv) King & Xxxxxx, P.A. shall have agreed to endorse the Lender's title
insurance policy insuring this Security Instrument, to provide affirmative
insurance to the effect that the Property consists of condominiums units
and/or time share interests validly created and that the lien of this
Security Instrument shall constitute a valid first lien upon the time share
interests.
(7) Provided that no Event of Default has then occurred and is
continuing under this Security Instrument, the Mortgagee shall, at the
expenses of Obligor, promptly release the lien hereof on each condominium
unit and/or time share interest following a sale of such condominium unit
and/or time share interest to a person unaffiliated with Obligor, and the
Mortgagee shall not have a lien on the proceeds of any such sale.
GRANTING CLAUSES
NOW, THEREFORE, In consideration of the sum of $1.00, and other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Obligor's full satisfaction, and in
consideration of the loan made or to be made hereafter to or for the benefit
of the Company, the Obligor does give, grant, bargain, sell, warrant, alien,
demise, release, convey, assign, transfer, mortgage, hypothecate, deposit,
pledge, set over and grant a security interest in and confirms to Mortgagee,
its successors and assigns, the real property situated in the State of South
Carolina, described in Exhibit A attached hereto and made a part hereof by
reference;
(1) TOGETHER WITH all condominium units or apartments in any horizontal
property regime now or hereafter created and/or all time share interests
under any vacation time sharing plan now and/or hereafter created in, on, or
at the real property described in Exhibit A attached hereto; and
(2) TOGETHER WITH all rights and easements now and/or hereafter created
which are appurtenant to the real property described in Exhibit A, including
but not limited to those rights and easements more fully identified thereon,
if any; and
(3) TOGETHER WITH all and singular right, title and interest, including
any after-acquired title or reversion, in and to all other ways, easements,
streets, alleys, passages, water, water courses, riparian rights, rights,
liberties and privileges thereof, if any, and in any way appertaining to the
real property described in Exhibit A; and
(4) TOGETHER WITH all rents, royalties, revenues, incomes, issues and
profits accruing and to accrue from the real property described in Exhibit A;
and
(5) TOGETHER WITH all buildings and improvements of every kind and
description now or hereafter erected or placed thereon and all materials
intended for construction, reconstruction, alteration and repairs of such
improvements now or hereafter erected thereon, all of which materials shall
be deemed to be included within the property subject to this Security
Instrument immediately upon the delivery thereof to the property described in
Exhibit A; all fixtures and articles of personal property now or hereafter
owned by the Obligor and attached to, or located on, and used in the
operation or management of the property described in Exhibit A;
3
and all renewals or replacements thereof, proceeds therefrom, or articles in
substitution therefor, whether or not the same are or shall be attached to
such building or buildings in any manner; it being mutually agreed that all
the aforesaid property owned by the Obligor and placed by it on the property
described in Exhibit A shall, so far as permitted by law, be deemed to be
fixtures and a part of the realty and security for the Indebtedness secured
by this Security Instrument; and
(6) TOGETHER WITH all leases, written or oral, and all agreements for
use or occupancy of all or any portion of the property described in Exhibit
A, together with any and all extensions and renewals thereof and any and all
further leases, subleases, lettings or agreements (including subleases
thereof and tenancies following attornment) upon or covering use or occupancy
of all or any part of the property described in Exhibit A (all such leases,
agreements, subleases and tenancies sometimes collectively referred to herein
as the "Leases" and sometimes individually as a "Lease"); and
(7) TOGETHER WITH all of the rents, income, receipts, revenues, issues
and profits now due or which may become due or to which Obligor may now or
hereafter (including during the period of redemption, if any, following
foreclosure of this Security Instrument become entitled or may demand or
claim arising or issuing from or out of the Leases or from or out of the
property described in Exhibit A or any part thereof; and
(8) TOGETHER WITH all deposits made with or other security given to
utility companies by Obligor with respect to the property described in
Exhibit A, and all proceeds of all insurance now or hereafter carried by, or
payable to, Obligor with respect to the property described in Exhibit A, or
otherwise now or hereafter payable with respect to any loss or damage of the
property described in Exhibit A, and all claims or demands with respect
thereto; and
(9) TOGETHER WITH all right, title and interest of the Obligor in and
to any operating, use, or management agreement pertaining to the property
described in Exhibit A and all cash payments to be made to or for the account
of Obligor pursuant thereto and any other proceeds thereof; and
(10) TOGETHER WITH all right, title and interest of the Obligor in and
to any leases for equipment now or hereafter located at or used in connection
with the property described in Exhibit A, including without limitation all
leases for office equipment, maintenance and operating equipment,
recreational equipment and fixtures, telephone equipment, furniture and
furnishings; and
(11) TOGETHER, WITH all permits, licenses and franchises, and all
contract rights and other intangibles now or hereafter owned by the Obligor
and relating to the ownership, construction, use, operation, occupancy or
development of the property described in Exhibit A, including, without
limitation, any plans, specifications and drawings pertaining to the
development thereof, and contracts with architects and contractors; and
(12) TOGETHER WITH all awards and other compensation heretofore
or hereafter to be made to the present and all subsequent owners of the
property subject to this Security Instrument for any taking by eminent
domain, either permanent or temporary, of all or
4
any part of the property described in Exhibit A or any easement or
appurtenance thereof, including severance and consequential damage and change
in grade of streets, which such awards and compensation are hereby assigned
to the Mortgagee; the Obligor hereby appoints the Mortgagee its
Attorney-in-Fact, with an interest, and authorizes, directs and empowers such
Attorney, at the option of such Attorney, on behalf of the Obligor and its
successors or assigns to collect and receive the proceeds thereof, to give
proper receipts and acquittances therefor (but not to adjust or compromise
the claim) and, after deducting reasonable expenses of collection, to apply
the net proceeds without penalty or premium as a credit upon any portion, as
selected by the Mortgagee, of the Indebtedness secured hereby,
notwithstanding the fact that the amount owing hereon may not then be due
and payable or that such Indebtedness is otherwise adequately secured.
All of the property conveyed or intended to be conveyed to Trustee in
the granting clauses (1) through (12) above, is described in this Security
Instrument as the "Property."
TO HAVE AND TO HOLD the Property with the appurtenances thereunto
belonging unto the Mortgagee and its successors and assigns, in fee simple,
forever, for the purposes and uses herein set forth, until such time as all
of the Indebtedness and obligations secured hereby shall have been paid in
full.
The Obligor covenants with the Mortgagee, its successors and assigns,
that at and until the ensealing of these presents: (i) the Obligor is well
seized of and has a good and indefeasible estate in fee simple in the
Property, and has good right to bargain, sell and convey, and create a
security interest in, the Property in manner and form as above written; (ii)
the Obligor will warrant and defend the Property with the appurtenances
thereunto belonging to the Mortgagee, its successors and assigns, forever
against all lawful claims, and demands whatsoever subject only to such
exceptions to title permitted by the terms of the Trust Indenture; (iii) the
Property and the intended use thereof by the Obligor comply to the best of
the Obligor's knowledge with all applicable restrictive covenants, zoning
ordinances and building codes and flood disaster laws, and, to the extent
that noncompliance therewith would materially adversely affect the value or
marketability of the Property, all applicable occupational, health and
environmental and other applicable laws, rules and regulations of any other
governmental authority whatsoever; and (iv) the Obligor will execute,
acknowledge and deliver all necessary assurances to the Mortgagee of the
title to the Property as provided above.
This Security Instrument is granted as security for the payment of the
Indebtedness. In accordance with the provisions of the Notes, the whole of
the principal sum thereof then unpaid may be declared and become due and
payable upon demand or upon the occurrence of an Event of Default hereunder
or under the Trust Indenture or the Notes. This Security Instrument is given
for the purpose of creating a lien on the Property and expressly is to secure
the Indebtedness. This Mortgage covers fixtures as collateral and the
security interest therein, designed to constitute a fixture filing, and shall
be duly filed in the real estate records.
UPON THE TERMS AND SUBJECT To THE CONDITIONS that are hereinafter
set forth; PROVIDED, HOWEVER, that if the Company pays or causes to be paid
to the Holders all sums secured hereby in the manner provided in the Notes
and the Trust Indenture,
5
and the Obligor fully pays and performs its obligations under the Subsidiary
Guaranty, the Trust Indenture, and in this Security Instrument and does keep
and perform every obligation term, covenant, condition and warranty contained
in the Subsidiary Guaranty, the Trust Indenture and in this Security
Instrument, then and in such case the estate, right, title and interest of
Mortgagee in and to the Property shall cease, and upon proof being given to
the satisfaction of the Mortgagee that the Indebtedness has been paid or
satisfied in accordance with its terms, and upon payment of all fees, costs,
charges and liabilities chargeable to or incurred by Mortgagee or otherwise
provided for in this Security Instrument, then this and the estate hereby
granted and conveyed shall be released and reasonable charges should be paid
therefore by Obligor to the extent described in Section 29-3-325 of the South
Carolina Code of Laws.
The Obligor, intending to bind its successors and assigns, hereby
covenants and agrees as follows:
1. The Obligor will duly keep and perform all covenants, agreements,
conditions and stipulations binding on the Obligor under the Subsidiary
Guaranty or the Trust Indenture. The Obligor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of
the Indebtedness and this Security Instrument and any requirement that the
Mortgagee or other holder of the Indebtedness secured hereby protect, secure,
perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against any other person, or
any collateral, or pursue any other remedy in the power of the Mortgagee or
other holder of any of the Indebtedness secured thereby.
2. To facilitate payment and performance of the Indebtedness, the
Obligor hereby absolutely transfers and assigns to Mortgagee all right, title
and interest of the Obligor in and to the Leases.
3. (a) No later than ten days prior to the date when any installment
of taxes and assessments is due, without penalty, interest or delinquency,
the Obligor shall subject to the Mortgagee evidence of the due and punctual
payment of such taxes, assessments, reassessments and other governmental
charges. The Obligor will also pay all taxes and assessments or charges which
may be levied on the Indebtedness secured hereby or the interest therein
excepting the federal income tax imposed under the laws of the United States
and excepting state franchise and state income taxes. Any assessment which is
payable in installments at the application of the Obligor shall,
nevertheless, for the purposes of this section, be deemed due and payable by
the Obligor in its entirety on the day the first installment becomes due and
payable or a lien, unless the written approval of the Mortgagee is obtained
for such installment payments of assessments.
(b) Notwithstanding the provision of Section 3 above, the Obligor shall
have the right to contest in good faith any of such taxes and assessments
upon posting with the Mortgagee sufficient security, reasonably satisfactory
to the Mortgagee, for the payment thereof, with interest, costs and
penalties, under written agreement conditioning payment of such contested
taxes and assessments upon the resolution of such contest, or prior thereto
if the continuance of such contest shall put the Property or any part thereof
in jeopardy of tax sale or forfeiture.
6
4. If at any time the United States or the State or Commonwealth in
which the Real Property is located or any of their subdivisions having
jurisdiction shall levy, assess or charge any tax (including, without
limitation, documentary stamp or intangible tax), assessment or imposition
upon this Security Instrument, the Notes, or the Indebtedness secured hereby
or the interest of the Mortgagee in the Property or upon the Mortgagee by
reason of or as holder of any of the foregoing, then the Indebtedness and
accrued interest thereon shall be and become due and payable at the election
of the Mortgagee; provided, however, that such election and the right to
elect shall be unavailing if the Obligor lawfully may pay for such stamps or
such tax, including interest and penalties thereon, to or for the benefit of
the Mortgagee and the other holders of the Indebtedness, and the Obligor
elects to pay and does, in fact, pay when payable, for all such stamps or
such tax, as the case may be, including interest and penalties thereon, prior
to any such election by the Mortgagee. The Obligor further agrees to deliver
to the Mortgagee, at any time, upon demand, evidence of citizenship and such
other evidence as may be required by any government agency having
jurisdiction in order to determine whether the obligation secured hereby is
subject to or exempt from any such tax or any other governmental filing or
reporting requirement.
5. The Obligor shall keep the Property free and clear from all
mechanics liens and statutory liens of every kind other than taxes and
permitted assessments which may be a lien but not yet due and payable and the
Obligor will not voluntarily create or permit to be created or filed against
their respective interests in the Property, or suffer to exist, any mortgage
lien or other lien or liens inferior or superior to the lien of this Security
Instrument (other than the lien or liens for real estate taxes and
assessments not yet due and payable) or if filed, the Obligor will have the
same discharged of record either by payment, the bonding thereof or other
lawful means within 30 days after notice of filing and further that the
Obligor will keep and maintain the same free from all claims of all persons
supplying labor, materials or services which will enter into or otherwise
contribute to the construction of any and all improvements to the Property,
notwithstanding by whom such labor or materials may have been contracted;
provided, however, that the Obligor shall have the right to contest in good
faith any such mechanics' lien or statutory lien upon posting with the
Mortgagee sufficient security, satisfactory to the Mortgagee, for the payment
thereof, with interest, costs and penalties, under written agreement
conditioning payment of such contested mechanics' lien or statutory lien upon
the resolution of such contest, or prior thereto if the continuance of such
contest or litigation shall put the Property or any part thereof in jeopardy
of foreclosure sale or forfeiture for such lien.
6. The Obligor agrees that the Obligor shall not (i) sell, encumber
(including, without limitation, by means of subordinate mortgage or lien upon
the Property or any part thereof or interest therein), assign, lease or
dispose of the Property or any part thereof or interest therein, except in
accordance with, and to the extent permitted by, the terms and provisions of
the Trust Indenture, or (ii) enter into any contract or agreement to do
anything prohibited by clause (i) of this Section 6 expressly including,
without limitation, any land contract, lease/purchase, lease/option or option
agreement without, in each such case, first obtaining the written consent of
the Mortgagee; except, however, that the Obligor shall have the right,
without such consent, to sell individual lots included in the Property on and
subject to the terms and conditions of the Trust Indenture.
7
7. The Obliger hereby acknowledges that the Indebtedness was incurred
in good faith for full value received.
8. The Obligor warrants and represents that:
(a) The Obligor is not now in default under any instruments or
obligations relating to the Property and no party has asserted any claim of
default against the Obligor relating to the Property.
(b) The execution and performance of this Security Instrument and the
consummation of the transactions hereby contemplated will not result in any
breach of, or constitute a default under, any mortgage, lease, bank loan,
credit agreement, trust indenture or other instrument to which the Obligor is
a party or by which it or any of its property (including, without limitation,
the Property) may be bound or affected, nor do any such instruments impose or
contemplate any obligations which are or may be inconsistent with any other
obligations imposed on the Obligor under any other instrument heretofore or
hereafter delivered by the Obligor.
(c) As of the date hereof, there are no actions, suits or proceedings
(including, without limitation, any condemnation or bankruptcy proceedings)
pending or threatened against or affecting the Obligor or the Property, or
which may adversely affect the validity or enforceability of this Security
Instrument, at law or in equity, or before or by any governmental authority,
except as disclosed in writing to the Lenders prior to the date of execution
and delivery hereof as contemplated by the terms and provisions of the Trust
Indenture, and the Obligor is not in default with respect to any writ,
injunction, decree or demand of any court or any governmental authority
affecting the Property.
(d) The Property is not used principally or primarily for farming or
agricultural purposes.
9. (a) The Obligor will maintain flood insurance, if required,
pursuant to a designation of the area in which the Property is located as
flood prone or a flood risk area, as defined by the Flood Disaster Protection
Act of 1973, as amended, as well as comply with any additional requirements
of the National Flood Insurance Program as set forth in such Act.
(b) The Obligor shall maintain for the mutual benefit of the Mortgagee
and the Obligor general public liability insurance against claims for
personal injury, death or property damage occurring upon, in or about the
Property and on, in or about the adjoining streets and passageways, such
insurance to afford protection to the limits of not less than those then
customarily carried with respect to real property similar in general
location, use and occupancy to the Property, but in no event less than a
single limit amount of $5,000,000. All of such insurance shall be primary and
non-contributing with any insurance which may be carried by the Mortgagee.
(c) In the event such coverage is provided as part of a blanket policy,
then in such event the amount of the coverage specifically applicable to the
Property shall be stated on the face of the policy. All insurance policies,
to the extent of its interest, are to be for the benefit
8
of and first payable in case of loss to the Mortgagee as first mortgagee
without contribution and the Obligor shall deliver to the Mortgagee a copy of
any renewal or replacement policies and original certificates thereof to the
Mortgagee at such place or to such other party as the Mortgagee may, from
time to time, designate in writing, before the date of such expiration or
termination of any existing policy.
(d) All insurance policies required by this Section 9 shall contain an
express provision or endorsement which states the substance of the following
in a manner acceptable to the Mortgagee: "The policy of insurance shall not
be canceled, permitted to lapse by reason of non-renewal, altered, changed,
amended or modified, nor shall any coverage therein be reduced, deleted,
amended, modified, changed or canceled by either the party named as the
insured, or the Obligor issuing this policy, without at least 30 days' prior
written notice having been given to Mortgagee."
10. (a) The term "Hazardous Materials," as used in this Security
Instrument, shall mean any (i) hazardous wastes and/or toxic chemicals,
materials, substances or wastes as defined by the Environmental Laws set
forth in Subsection 10(b); (ii) any "oil", as defined by the Clean Water
Act (as defined in Subsection 10(b) below), as amended from time to time,
and regulations promulgated thereunder (including crude oil or any fraction
thereof), (iii) any substance, the presence of which is prohibited,
regulated or controlled by any other applicable federal or state or local
laws, regulations, statutes or ordinances now in force or hereafter enacted
relating to waste disposal or environmental protection with respect to the
exposure to, or manufacture, possession, presence, use, generation,
storage, transportation, treatment, release, emission, discharge, disposal,
abatement, cleanup, removal, remediation or handling; (iv) any asbestos or
asbestos containing materials, polychlorinated biphenyls ("PCBs") in the
form of electrical equipment, fluorescent light fixtures with ballasts,
cooling oils or any other form, urea formaldehyde, atmospheric radon at
levels over four picocuries per cubic liter; (v) any solid, liquid,
gaseous or thermal irritant or contaminant, such as smoke, vapor, soot,
fumes, alkalis, acids, chemicals, pesticides, herbicides, sewage,
industrial sludge or other similar wastes; (vi) industrial, nuclear or
medical by-products; and (vii) underground storage tanks (whether filled or
unfilled).
(b) The term "Environmental Laws," as used in this Section 10, shall
mean all present and future laws, statutes, ordinances, rules, regulations,
orders and determinations of any governmental authority, pertaining to
health, protection of the environment, natural resources, conservation,
wildlife, waste management, regulation of activities involving Hazardous
Materials, and pollution, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act ("Superfund" or
"CERCLA"), 42 U.S.C. Section 9601, ET SEQ., the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), 42 U.S.C. Section 9601(20)(D), the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901, ET
SEQ., the Federal Water Pollution Control Act, as amended by the Clean Water
Act (the "Clean Water Act"), 33 U.S.C. Section 1251, ET SEQ., the Clean Air
Act ("CAA"), 42 U.S.C. Section 7401, ET SEQ., and the Toxic Substances
Control Act, 15 U.S.C. Section 2601, ET SEQ., as amended from time to time.
(c) The Obligor shall, and the Obligor shall cause all employees,
agents, contractors and tenants of the Obligor and any other persons present
on or occupying the Real
9
Property to, keep and maintain the Property, including the soil and ground
water thereof, in compliance with, and not cause or permit the Property,
including the soil and ground water thereof, to be in violation of any
Environmental Laws. Neither the Obligor nor any employees, agents,
contractors or tenants of the Obligor or any other persons occupying or
present on the Property shall use, generate, manufacture, store or dispose
on, under or about the Property or transport to or from the Property any
Hazardous Materials.
(d) The Obligor immediately shall advise Mortgagee in writing of: (i)
any notices from any governmental or quasi-governmental agency or authority
of violation or potential violation of any Environmental Law received by the
Obligor; (ii) any and all enforcement, cleanup, removal or other governmental
or regulatory actions instituted, completed or threatened pursuant to any
Environmental Law; (iii) all claims made or threatened by any third party
against the Obligor or the Property relating to damage, contribution, cost
recovery compensation, loss or injury resulting from any Hazardous Materials
(the matters set forth in clauses (i) (ii) and (iii) above are hereinafter
referred to as "Hazardous Materials Claims"); and (iv) discovery by the
Obligor of any occurrence or condition on any real property adjoining or in
the vicinity of the Property that could cause the Property to become
contaminated by or with Hazardous Materials. Mortgagee shall have the right
but not the obligation to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated in connection with any
Hazardous Materials Claims and to have its reasonable attorneys' and
consultants' fees in connection therewith paid by the Obligor upon demand.
(e) The Obligor shall be solely responsible for, and shall indemnify,
defend, and hold harmless Mortgagee, its directors, officers, employees,
agents, successors and assigns from and against, any loss, damage, cost,
expense or liability or whatever kind or nature, known or unknown, contingent
or otherwise, directly or indirectly arising out of or attributable to the
use, generation, storage, release, threatened release, discharge, disposal or
presence (whether prior to or after the date of this Security Instrument) of
Hazardous Materials on, in, under or about the Property (whether by the
Obligor, a predecessor in title, any tenant, or any employees, agents,
contractor or subcontractors of any of the foregoing or any third persons at
any time occupying or present on the Property), including, without
limitation: (i) personal injury; (ii) death; (iii) damage to property; (iv)
all consequential damages; (v) the cost of any required or necessary repair,
cleanup or detoxification of the Property, including the soil and ground
water thereof, and the preparation and implementation of any closure,
remedial or other required plans; (vi) damage to any natural resources; and
(vii) all reasonable costs and expenses incurred by Mortgagee in connection
with the foregoing clauses (i) through (vi), including but not limited to
reasonable attorneys' and consultants' fees provided, however, that nothing
contained in this Section shall be deemed to preclude the Obligor from
seeking indemnification from or otherwise proceeding against, any third party
including, without limitation any tenant or predecessor in title to the
Property. The covenants, agreements and indemnities set forth in this Section
shall be binding upon the Obligor and its successors and assigns, and shall
survive each of repayment of the Indebtedness, foreclosure of the Property,
and the Obligor granting a deed in lieu of foreclosure of the Property. Any
costs or expenses incurred by Mortgagee for which the Obligor is responsible
or for which the Obligor has indemnified Mortgagee shall be paid to Mortgagee
on demand, With interest at the default rate specified in the Notes from the
date incurred by Mortgagee until paid in full, and shall be secured hereby.
Without Mortgagee's prior written
10
consent, the Obligor shall not enter into any settlement, consent decree or
other compromise in respect of any Hazardous Materials Claims.
(f) In the event Mortgagee reasonably determines that an investigation
of the Property for the presence of Hazardous Materials (an "Environmental
Audit") is necessary in order to maintain the value of the Mortgagee's
security in the Property, the Obligor shall retain, upon Mortgagee's request,
or Mortgagee may retain directly, at the sole cost and expense of the
Obligor, a licensed geologist, industrial hygienist or an environmental
consultant (referred to hereinafter as the "Consultant") acceptable to
Mortgagee to conduct the Environmental Audit. Mortgagee's determination to
require an Environmental Audit shall be deemed reasonable at any time there
is Default under the Trust Indenture or hereunder or in the event that
Mortgagee has received notice of the likely existence of Hazardous Materials
upon or in the Property. The Environmental Audit shall be performed in a
manner reasonably calculated to discover the presence of Hazardous Materials
contamination taking into consideration the known uses of the Property and
property in the vicinity of the Property and any factors unique to the
Property. If the Obligor shall fall to pay for or obtain an Environmental
Audit as provided for herein, Mortgagee may, but shall not be obligated to,
obtain the Environmental Audit, and the Obligor immediately and without
demand shall repay all costs and expenses incurred by Mortgagee in connection
therewith, with interest at the default rate specified in the Notes from the
date of such payments or advances until paid in full, and such sums so
advanced or expended, with interest as aforesaid, shall be secured hereby.
(g) The Obligor shall cooperate with the Consultant and allow entry and
access to all portions of the Property for the purpose of Consultant's
investigation. The Obligor shall comply, at its sole cost and expense, with
all recommendations contained in the Environmental Audit reasonably required
to bring the Property into compliance with all Environmental Laws and any
recommendation for additional testing and studies to detect the quantity and
types of Hazardous Materials present, if Mortgagee requires the
implementation of the same.
11. In the event the Obligor shall fail to comply with any or all of
its covenants, agreements, conditions and stipulations herein set forth, then
the Mortgagee shall after notice to the Obligor be and hereby is authorized
and empowered at its option, but without legal obligation to do so, to pay or
perform the same without waiver of any other remedy. In addition, the
Mortgagee is authorized and empowered at its option, but without legal
obligation to do so, to enter, or have its agents enter, the Property
whenever necessary for the purpose of inspecting the Property and curing any
default hereunder. The Obligor agrees that the Mortgagee shall thereupon have
a claim against the Obligor for all sums paid by the Mortgagee for such
defaults so cured, together with a lien upon the Property for the sum so paid
plus interest at the default rate specified in the Notes.
12. The Obligor shall not commit waste upon the Property or suffer
waste to be committed thereon. The Obligor will keep the Property in good
order and repair and in compliance in all material respects with any law,
regulation, ordinance or contract affecting the Property. The Obligor shall
observe and comply with all conditions and requirements necessary to preserve
and extend any and all material rights, licenses, permits (including but not
limited to zoning variances, special exceptions and non-conforming uses),
privileges, franchises and
11
concessions which are applicable to the Property or which have been granted
to or contracted for by the Obligor in connection with any existing or
presently contemplated use of the Property and shall obtain and keep in full
force and effect all necessary governmental and municipal approvals as may be
necessary from time to time to comply in all material respects with all
mining, environmental and other requirements and with any and all conditions
attached to the insurance relating to the Property and the condition thereof.
13. To the extent permitted by applicable law, the Obligor will give
the Mortgagee immediate notice of the actual or threatened commencement of
any proceedings under eminent domain affecting all or any part of the
Property or any easement therein or appurtenances thereof, including
severance and consequential damage and change in grade of streets, and will
deliver to the Mortgagee copies of any and all papers served in connection
with any such proceedings. Except as provided in subsection (a) below, the
Obligor agrees that all awards heretofore or hereafter made by any public or
quasi-public authority to the present and all subsequent owners of the
Property by virtue of an exercise of the right of eminent domain by such
authority, including any award for taking of title, possession or right of
access of a public way, or for any change of grade or streets affecting the
Property, are hereby assigned to the Mortgagee and the Mortgagee at its
option is hereby authorized, directed and empowered to collect and receive
the proceeds of any such awards from the authorities making the same and to
give proper receipts therefor. After deducting from such proceeds any
expenses incurred by the Mortgagee in the collection or handling thereof, the
Mortgagee shall apply the net proceeds as to the Indebtedness in such order
as determined by the Mortgagee.
The Obligor hereby covenants and agrees to and with the Mortgagee, upon
the request of the Mortgagee to make, execute and deliver any and all
assignments and other instruments sufficient for the purpose of assigning all
such awards to the Mortgagee, free and clear and discharged of any and all
encumbrances of any kind or nature whatsoever except as above stated.
14. In the event an action shall be instituted to foreclose this
Security Instrument, or prior to foreclosure but after default, to the extent
permitted by applicable law, the Mortgagee shall be entitled to the
appointment of a receiver of the rents, issues and profits of the Property as
a matter of right, with power to collect the rents, issues and profits of the
Property due and becoming due during the period of default and/or the
pendency of such foreclosure suit to and including the date of confirmation
of the sale under such foreclosure and during the redemption period, if any,
after such confirmation, such rents, issues and profits being hereby
expressly assigned and pledged as security for the payment of the
Indebtedness secured by this Security Instrument without regard to the value
of the Property or the solvency of any person or persons liable for the
payment of the Indebtedness and regardless of whether the Mortgagee has an
adequate remedy at law. The Obligor for itself and for any subsequent owner
hereby waives any and all defenses to the application for a receiver as above
provided and hereby specifically consents to such appointment, but nothing
herein contained is to be construed to deprive the holder of this Security
Instrument of any right or remedy or privilege it may now have under the law
to have a receiver appointed. The provision for the appointment of a receiver
and the assignment of such rents, issues and profits is made an express
condition upon which the Loans hereby secured are made. In such event, the
court shall at once on application of the Mortgagee
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or its attorney in such action, appoint a receiver to take immediate
possession of, manage and control the Property, for the benefit of the holder
or holders of the Indebtedness and of any other parties in interest, with
power to collect the rents, issues and profits of the Property during the
pendency of such action, and to apply the same toward the payment of the
several obligations herein mentioned and described, notwithstanding that the
same or any part thereof is occupied by the Obligor or any other person. The
rights and remedies herein provided for shall be deemed to be cumulative and
in addition to and not in limitation of those provided by law and if there be
no receiver so appointed, the Mortgagee itself may proceed to collect the
rents, issues and profits from the Property. From any such rents, issues, and
profits collected by the receiver or by the Mortgagee prior to a foreclosure
sale, there shall be deducted the cost of collection thereof and the expenses
of operation of the Property, including but not limited to real estate
commissions, receiver's fee and the reasonable fees of its attorney, if any,
and the Mortgagee's attorney's fees, if permitted by law, and court costs,
the remainder to be applied against the Indebtedness. In the event the rents,
issues and profits are not adequate to pay all tax and other expenses of
operation, the Mortgagee may, but is not obligated to, advance to any
receiver the amounts necessary to operate, maintain and repair, if necessary,
the Property and any such amounts so advanced, together with interest thereon
at the default rate specified in the Notes from and after the date of
advancement, shall be secured by this Security Instrument and have the same
priority of collection as the principal of the Indebtedness secured hereby.
15. No sale of the Property, no forbearance on the part of the
Mortgagee, no extension of the time for the payment of the Indebtedness and
no change in the terms of the payment thereof consented to by the Mortgagee
shall in any way whatsoever operate to release, discharge, modify, change or
affect the original liability of the Obligor hereunder or the original
liability of the Borrower or any other obligor under any of the Indebtedness,
either in whole or in part. No waiver by the Mortgagee of any breach of any
covenant of the Obligor herein contained shall be construed as a waiver of
any subsequent breach of the same or any other covenant herein contained. The
failure of the Mortgagee to exercise the option for acceleration of maturity
and/or foreclosure (including sale under power of sale hereunder) following
any default as aforesaid or to exercise any other option granted to the
Mortgagee hereunder in any one or more instances, or the acceptance by the
Mortgagee of partial payments hereunder shall not constitute a waiver of any
such default, nor extend or affect the grace period, if any, but such option
shall remain continuously in force with respect to any unremedied or uncured
default. Acceleration of maturity once claimed hereunder by the Mortgagee
may, at the option of the Mortgagee, be rescinded by written acknowledgment
to that effect by the Mortgagee, but the tender and acceptance of partial
payments alone shall not in any way affect or rescind such acceleration of
maturity, or extend or affect the grace period, if any. The Mortgagee may
pursue any of its rights without first exhausting its rights hereunder and
all rights, powers and remedies conferred upon the Mortgagee herein are in
addition to each and every right which the Mortgagee may have hereunder at
law or equity and may be enforced concurrently therewith.
16. If any action or proceeding be commenced, to which action or
proceeding the Mortgagee is made a party by reason of the execution of this
Security Instrument or the Indebtedness, or in which it becomes necessary to
defend or uphold the lien of this Security Instrument, or the priority
thereof or possession of the Property, or otherwise to perfect the security
hereunder, or in any suit, action, legal proceeding or dispute of any kind in
which the Mortgagee is made a party or appears as party plaintiff or
defendant, affecting the interest created
13
herein, or the Property, including, but not limited to, bankruptcy, probate
and administration proceedings, foreclosure of this Security Instrument or
any condemnation action involving the Property, all sums paid by the
Mortgagee for the expense of any litigation to prosecute and defend the
rights and liens created hereby shall be paid by the Obligor, to the extent
permitted by applicable law, together with interest from the date of payment
at the Default Rate. Any such sum and the interest thereon shall be
immediately due and payable upon demand and be secured hereby, having the
benefit of the lien hereby created, as a part hereof and its priority.
17. Each remedy or right of the Mortgagee shall not be exclusive of but
shall be in addition to every other remedy or right now or hereafter existing
at law or in equity. No delay in the exercise or omission to exercise any
remedy or right accruing on any default shall impair any such remedy or right
or be construed to be a waiver of any such default or acquiescence therein,
nor shall it affect any subsequent default of the same or a different nature.
Every such remedy or right may be exercised concurrently or independently and
when and as often as may be deemed expedient by the Mortgagee.
18. Upon an Event of Default, to the extent permitted by any applicable
law of South Carolina Mortgagee may personally, or by its agents or
attorneys, and without becoming a mortgagee-in-possession, may enter into and
upon all or any part of the Real Property, and each and every part hereof,
and may exclude the Obligor, its agents, and servants wholly therefrom, and
having and holding the same, may use, operate, manage and control the
Security or any part thereof and conduct the business thereof, either
personally or by its superintendents, managers, agents, servants, attorneys
or receivers; and upon such entry, Mortgagee, at the expense of the Obligor,
may, at Mortgagee's sole option, insure the same; and likewise, from time to
time, at the expense of the Obligor, Mortgagee may make all necessary or
proper repairs, renewals and replacements and such useful alterations,
additions, betterments and improvements thereto and thereon as to Mortgagee
may seem advisable; and in every such case Mortgagee shall have the right to
manage and operate the Security and to carry on the business thereof and
exercise all rights and powers of the Obligor with respect thereto either in
the name of the Obligor or otherwise as it shall deem best; and after
deducting the expenses of conducting the business thereof and of all
maintenance, repairs, renewals, replacements, alterations, additions,
betterments and improvements necessary to operate the Improvements or their
intended purposes and amounts necessary to pay for taxes, assessments,
insurance and prior or other proper charges upon the Security or any part
hereof, as well as reasonable compensation for the services of Mortgagee and
Trustee, and for all attorneys, consultants, agents, clerks, servants and
other parties employed by Mortgagee or Trustee, Mortgagee shall apply the
moneys arising as aforesaid to the Liabilities in such manner and at such
times as Mortgagee shall determine in its sole discretion, when and as the
same shall become payable and/or to the payment of any other sums required to
be paid by the Obligor under this Security Instrument.
19. (a) Upon an Event of Default, to the extent permitted by any
applicable law of South Carolina, Mortgagee may, with or without entry,
personally or by its agents or attorneys, insofar as applicable:
(i) Request the Mortgagee to sell the Property or any part thereof
pursuant to the procedures provided by law at one or more sales as an entity
or in parcels, and at such
14
time and place upon such terms and after such notice thereof as may be
required or permitted by law; and/or
(ii) Institute an action of judicial foreclosure on this Security
Instrument or institute other proceedings according to law for the
foreclosure hereof, and may prosecute the same to judgment, execution and
sale for the collection of the Entire Indebtedness, and all interest with
respect thereto, together with all taxes and insurance premiums advanced by
Mortgagee and other sums payable by the Obligor hereunder, and all fees,
costs and expenses of such proceedings, including reasonable attorneys' fees
and expenses; and/or
(iii) Take such steps to protect and enforce its rights whether by
action, suit or proceeding in equity or at law for the specific
performance of any covenant, condition or agreement in the Loan Documents
or in and of the execution of any power herein granted, or for any
foreclosure hereunder, or for the enforcement of any other appropriate
legal or equitable remedy or otherwise as Mortgagee shall elect.
(b) To the extent permitted by law of South Carolina, the Mortgagee may
postpone from time to time any sale by them to be made under or by virtue of
this Security Instrument by postponement at the time and place appointed for
such sale or for such postponed sale or sales; and, except as otherwise
provided by any applicable provision of law, the Mortgagee, without further
notice or publication, may make such sale at the time and place to which the
same shall be so postponed.
(c) Upon the completion of any sale or sales made by the Mortgagee
under or by virtue of this Security Instrument, Mortgagee shall execute and
deliver to the accepted purchaser or purchasers a good and sufficient
instrument, or good and sufficient instruments, conveying, assigning and
transferring all estate, right, title and interest in and to the property and
rights sold. The Mortgagee shall make all the necessary conveyances,
assignments, transfers and deliveries of any part of the Property and rights
so sold and for that purpose the Mortgagee may execute all necessary
instruments of conveyance, assignment and transfer. Any such sale or sales
made under or by virtue of this Section 19, whether made under the power of
sale herein granted or under or by virtue of judicial proceeding or of a
judgment or decree of foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law
or in equity, of the Obligor in and to the properties, interests and rights
so sold, and shall be a perpetual bar both at law and in equity against the
Obligor and against any and all persons claiming or who may claim the same,
or any part thereof from, through or under the Obligor.
(d) Upon any sale, whether under the power of sale hereby given or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, except as required by law, it shall not be necessary for the Mortgagee
or any public officer acting under execution or order of court to have
present or constructive possession of any of the Property.
(e) The recitals contained in any conveyance made by the Mortgagee to
any purchaser at any sale made pursuant hereto or under applicable law shall
be conclusive evidence of the matters therein stated, and all prerequisites
to such sale shall be presumed to have been satisfied and performed.
15
(f) The receipt by Mortgagee of the purchase money paid at any such
sale, or the receipt by any other person authorized to receive the same,
shall be sufficient discharge therefor to any purchaser of the property or
any part thereof, sold as aforesaid, and no such purchaser, or his
representatives, grantees or assigns, after paying such purchase money and
receiving such receipt, shall be bound to see to the application of such
purchase money, or any part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
(g) In case the liens or the Property interests hereunder shall be
foreclosed by Mortgagee's sale or by other judicial or non-judicial action,
the purchaser at any such sale shall receive, as an incident to his
ownership, the right to immediate possession of the property or any part
thereof, subsequent to foreclosure, the Obligor or the Obligor's successors
(except tenants who have entered into subordination, non-disturbance and
attornment agreements with Mortgagee) shall be considered as tenants at
sufferance of the purchaser at foreclosure sale, and anyone occupying the
property after demand made for possession thereof shall be guilty of forcible
detainer and shall be subject to eviction and removal, forcible or otherwise,
with or without process of law, and all damages by reason thereof are hereby
expressly waived to the extent permitted by law.
(h) Should any Event of Default occur hereunder, any expenses incurred
by Mortgagee in prosecuting, resolving, or settling the claim of Mortgagee
shall become an additional "liability" of the Obliger and part of the
Indebtedness secured hereby.
(i) In the event a foreclosure hereunder shall be commenced by
Mortgagee, to the extent permitted by any applicable law of South Carolina,
Mortgagee may at any time before the sale abandon the suit, and may then
institute suit for the acceleration of the Note and for the foreclosure of
the liens and the Property interest hereof. If Mortgagee should institute a
suit for the acceleration of the Note and for a foreclosure of the liens and
the Property interest hereof, it may at any time before the entry of a final
judgment in said suit dismiss the same and proceed to sell the Property, or
any part thereof, in accordance with the provisions of this Security
Instrument.
(j) The purchase money proceeds or avails of any sale made under or by
virtue of this Security Instrument, together with any other sums which then
may be held by Mortgagee under this Security Instrument, whether under the
provisions of this Section 19 or otherwise, shall be applied in accordance
with the laws of South Carolina, and to the extent not inconsistent, as
follows.
(A) first, to the payment or reimbursement of the Mortgagee for all
costs and expenses of such suit or suits or other enforcement activities
of the Mortgagee, including, but not limited to, the costs of advertising,
sale and conveyance, including attorneys', solicitors' and stenographers'
fees, if permitted by law, outlays for documentary evidence and the cost
of such abstract, examination of title and title report;
(B) second, to the extent proceeds remain after the application
pursuant to preceding clause (A), to reimburse the Mortgagee for all moneys
advanced by the
16
Mortgagee, if any, for any purpose authorized in this Security Instrument
with interest at the default rate specified in the Notes;
(C) third, to the extent proceeds remain after the application
pursuant to preceding clause (B), an amount equal to the outstanding
Indebtedness owed to the Holders shall be paid to the Mortgagee for the
benefit of the Holders; and
(D) fourth, to the extent remaining after the application pursuant to
the proceeding clauses (A), (B) and (C), to the Obligor or to whomever may
be lawfully entitled to receive such payment.
(k) The Obligor shall pay all costs and expenses, including without
limitation costs of title searches and title policy commitments, court costs
and reasonable attorneys' fees, incurred by Mortgagee in enforcing payment
and performance of the Indebtedness or in exercising the rights and remedies
of Mortgagee hereunder. All such costs and expenses shall be secured by this
Security Instrument and by all other lien and security documents securing the
Indebtedness. In the event of any court proceedings, court costs and
attorneys' fees shall be set by the court and not by jury and shall be
included in any judgment obtained by Mortgagee.
(l) In any action by Mortgagee to recover a deficiency judgment for any
balance due under the Note upon the foreclosure of this Security Instrument
or in any action to recover the Indebtedness or Indebtedness secured hereby,
and as a material inducement to making the loan evidenced by the Note, the
Obligor acknowledges and agrees that the successful bid amount made at any
judicial or non-judicial foreclosure sale, if any, shall be conclusively
deemed to constitute the fair market value of the Property, that such bid
amount shall be binding against the Obligor in any proceeding seeking to
determine or contest the fair market value of the Property. The Obligor
hereby waives and relinquishes any right to have the fair market value of the
Property determined by a judge or jury in any action seeking a deficiency
judgment or any action on the Indebtedness secured hereby, including, without
limitation a hearing to determine fair market value.
(m) Upon any sale made under or by virtue of this Section 19, whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may
bid for and acquire the Property or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon
the indebtedness of Obligor secured by this Security Instrument the gross
sales price.
20. The Mortgagee, in making any payment herein and hereby authorized
in the place and stead of the Obligor (a) relating to taxes, assessments,
water rates, sewer rentals and other governmental or municipal charges,
fines, impositions or liens asserted against the Property, may do so
according to any xxxx, statement or estimate procured from the appropriate
public authority without inquiry into the validity thereof; or (b) relating
to any adverse title, lien, statement of lien, encumbrance, claim or charge,
shall be the sole judge of the validity of same; or (c) otherwise relating to
any purpose herein and hereby authorized, but not enumerated in this section,
may do so whenever, in its good faith judgment and discretion, such payment
shall seem
17
necessary or desirable to protect the full security intended to be created by
this Security Instrument. In connection with any such payment, the Mortgagee,
at its option, may and is hereby authorized to obtain a continuation report
of title prepared by a title insurance Obligor, the cost and expenses of
which shall be repayable by the Obligor upon demand and shall be secured
hereby.
21. The Obligor agrees, without affecting the liability of any person
for payment of the Indebtedness or affecting the lien of this Security
Instrument upon the Property or any part thereof (other than persons or
property explicitly released as a result of the exercise by the Mortgagee of
its rights and privileges hereunder), that the Mortgagee, without notice, and
without regard to the consideration, if any, paid therefor, and
notwithstanding the existence at that time of any inferior liens thereon, may
release as to itself and this Security Instrument any part of the security
described herein or any person liable for any indebtedness secured hereby,
without in any way affecting the priority of the lien of this Security
Instrument to the full extent of the Indebtedness remaining unpaid hereunder
upon any part of the security not expressly released and may agree with any
party obligated on the Indebtedness or having any interest in the security
described herein to extend the time for payment of any part or all of the
Indebtedness secured hereby. Such agreement shall not, in any way, release or
impair the lien hereof, but shall extend the lien hereof as against the title
of all parties having any interest in such security which interest is subject
to such lien. In the event the Mortgagee: (a) releases, as aforesaid, any
part of the security described herein or any person liable for any
indebtedness secured hereby, (g) grants an extension of time for any payments
of the debt secured hereby, (c) takes other or additional security for the
payment thereof, or (d) waives or fails to exercise any right granted herein,
in the Notes or in any related agreement, no such act or omission shall
release the Obligor, subsequent purchasers of all or any part of the
Property, any maker or surety of the Notes or any party to this Security
Instrument or any related agreement under any covenant therein, or 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 any
subsequent default.
22. If at any time the United States of America shall require internal
revenue stamps to be affixed to any of the Notes or any other Indebtedness,
the Obligor will pay (or cause the Borrower, if the Obligor is not the
Borrower) for the same with any interest or penalties imposed in connection
herewith.
23. To the extent services are required of the Mortgagee's counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Security Instrument, and all provisions
herein contained, the Obligor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a xxxx and
delivery thereof to the Obligor.
24. The Obligor agrees at all times to cause this Security Instrument,
and each amendment or modification hereof or supplement hereto, and all
assignments of leases, to be recorded, registered and filed, and kept
recorded, registered and filed, in such manner and in such places as
appropriate, and shall comply with all applicable statutes and regulations in
order to establish, preserve and protect the security and priority of this
Security Instrument, and such assignments and the rights of the Mortgagee
thereunder. The Obligor shall pay, or cause to be
18
paid, all taxes, fees and other charges incurred in connection with such
recording, registration, filing and compliance.
25. The Obligor acknowledges that it has received from the Mortgagee
without charge a true and correct copy of this Security Instrument.
26. The Mortgagee and its successors and assigns shall be entitled to
all of the benefits of the indemnification provisions of the Trust Indenture.
27. To the extent permitted by law with respect to the Indebtedness
secured hereby or any renewals or extensions thereof, the Obligor waives and
renounces any and all homestead and exemption rights, as well as the benefit
of all valuation and appraisement privileges, and also moratoriums under or by
virtue of the constitution and laws of the jurisdiction in which the Property
is located or any other state or of the United States, now existing or
hereafter enacted.
28. All the covenants hereof shall run with the land. Nothing herein
contained nor any transaction related hereto shall be construed or shall so
operate, either presently or prospectively, to require the Obligor to pay
interest at a rate greater than is now lawful in such case to contract for,
but shall require payment of interest only to the extent of such lawful rate.
29. The Obligor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the
Mortgagee may reasonably require for accomplishing the purpose hereof
forthwith upon the request of the Mortgagee, whether in writing or otherwise.
The Obligor, within ten days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Security Instrument
and the Indebtedness (both unpaid principal and accrued interest) and whether
any offset or defenses exist against the Indebtedness, and any other
information which might reasonably be requested in connection with the sale
of the Indebtedness, or any portion thereof or interest therein, to any third
party, or an audit of the Mortgagee, and which may be relied on for such
purposes.
30. Wherever notices may appropriately be given under this Security
Instrument, such notices shall be in writing and shall always be treated as
having adequately been given if:
(n) when intended for the Obligor, five days after dispatch by
Certified Mail return receipt requested, addressed to the mailing address,
as set out herein or to such other address or to such other person, as the
Obligor may from time to time, designate in writing; or
(o) when intended for the Mortgagee, five days after dispatch by
Certified Mail return receipt requested, addressed to the mailing address
of the Mortgagee as set out herein or to such other address or to such
other person as the Mortgagee may from time to time designate in writing.
19
31. Any of the following occurrences or acts shall constitute an
event of default under this Security Instrument ("Event of Default"): (a)
the Company fails to pay any of the Notes or any installment thereof or
interest thereon when due or when declared due, subject to any applicable
grace period provided therein; (b) an Event of Default under and as
defined in the Trust Indenture shall have occurred; (c) the Obligor
(regardless of the pendency of any bankruptcy, reorganization,
receivership, insolvency or other proceedings, at law, in equity or before
any administrative tribunal, which have or might have the effect of
preventing the Obligor from complying with the terms of this Security
Instrument), shall fail to observe or perform any of the Obligor's
covenants, agreements or obligations under this Security Instrument and,
other than defaults in the observance or performance of its obligations
under Section __ hereof, such failure shall continue for 30 days after
notice; (d) a default shall occur and continue to exist after the
expiration of any applicable grace period under any other document,
agreement or instrument between the Company or any Subsidiary Guarantor
and the Mortgagee or any Holders, with respect to any of the Indebtedness;
(e) any representation contained herein or in the Trust Indenture or the
Notes or made (or deemed made) by the Company or any Subsidiary Guarantor
to the Mortgagee or any of the Holders in connection with any of the
Indebtedness shall prove to be untrue in any material respect on the date
as of which made or deemed made; (f) the Company or any Subsidiary
Guaranty shall file a voluntary petition in bankruptcy or be adjudicated a
bankrupt or insolvent, or the Company or any Subsidiary Guarantor shall
file any petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief for itself under any present or future federal, state or
other statute, law or regulation relating to bankruptcy, insolvency or
other relief for debtors or protection for creditors, or the seeking, or
the consenting by the Company or any Subsidiary Guarantor to or
acquiescing in the appointment of any trustee, receiver, conservator or
liquidator of the Company or any Subsidiary Guarantor, as the case may be,
or of all or any substantial part of the Property or any or all of the
rents, issues or profits thereof, or the making of any general assignment
for the benefit of creditors, or the admission in writing of its inability
to pay its debts generally as they become due, or the entry by a court of
competent jurisdiction of any order, judgment or decree, which is not
dismissed within 60 days thereafter, approving a petition filed against
the Company or any Subsidiary Guarantor seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any present or future Federal, state or other
statute, law or regulation relating to bankruptcy, insolvency or other
relief for debtors or protection for creditors, or the appointment, which
appointment is not dismissed within 60 days thereafter, of any trustee,
receiver, conservator or liquidator of the Company or any such Subsidiary,
as the case may be, or of all or any substantial part of the Property or
of all of the rents, issues and profits thereof without the consent or
acquiescence of the Mortgagee.
32. Upon any Event of Default or any default by the Obligor as
provided herein or in any other instrument evidencing or securing any of
the Indebtedness then, in any of said events, at the option of the
Mortgagee (or, as may be provided in any instrument pursuant to which any
such Indebtedness is created, at the option of any holder of any such
Indebtedness), the whole or any applicable portion of the Indebtedness
secured hereby shall become immediately due and payable, although the
period specified for the payment thereof may not have expired, anything
hereinbefore or in the Notes contained to the contrary notwithstanding.
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33. The obligations of the Obligor under this Security Instrument
shall be absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation:
(A) any renewal, extension, amendment or modification of, or addition
or supplement to or deletion from any document pertaining to the
Indebtedness, or any other instrument or agreement referred to therein, or
any assignment or transfer of any thereof;
(B) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Security Instrument except as expressly provided in such renewal,
extension, amendment, modification, addition, supplement, assignment or
transfer;
(C) any furnishing of any additional security to the Mortgagee or its
assignee or any acceptance thereof or any release of any security by the
Mortgagee or its assignee;
(D) any limitation on any party's liability or obligations under any such
instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or
(E) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Company
or any Subsidiary Guarantor, or any action taken with respect to this
Security Instrument by any trustee or receiver, or by any court, whether
or not the Obligor shall have notice or knowledge of any of the foregoing.
34. Any provision of this Security Instrument which is prohibited or
unenforceable in any Jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
35. THIS SECURITY INSTRUMENT AND THE RIGHTS AND OBLIGATIONS OF THE
OBLIGOR AND THE MORTGAGEE HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF SOUTH CAROLINA.
36. When the Indebtedness has been paid in full, this Security
Instrument shall terminate, and the Mortgagee, at the request and expense of
the Obligor, will execute and deliver to the Obligor a proper instrument or
instruments acknowledging the satisfaction and termination of this Security
Instrument.
37. None of the terms and conditions of this Security Instrument may be
changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Obligor and the Mortgagee.
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38. The Obligor and the Mortgagee each hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Security Instrument or the transactions
contemplated hereby.
39. IT IS SPECIFICALLY AGREED that time is of the essence with respect
to this Security Instrument and that the waiver of the rights or options, or
obligations secured hereby, shall not at any time thereafter be held to be
abandonment of such rights. Notice of the exercise of any right or option
granted to the Mortgagee herein, or in the Indebtedness secured hereby, is
not required to be given.
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EXHIBIT "A"
I. UNSOLD FLOATING TIMESHARE INTERESTS AND COMMITTED FLOATING TENTH SHARES
All those certain unit weeks constituting floating Timesharing Interests
and those certain unit weeks contained within Committed Floating Tenth
Shares (as said terms are defined in the Ninth Amendment to Master Deed
for Planters Quarters Horizontal Property Regime recorded in the
below-referenced public records in Book 794 at Page 2388) listed on the
attached Schedule 1, each consisting of a floating vacation timesharing
interest in an apartment unit on said premises as shown on plans and
specifications listed in the Master Deed for the Planters Quarters
Horizontal Property Regime recorded in the RMC Office for Beaufort
County, South Carolina in Deed Book 534 at Page 1446 as amended by ten
amendments thereto, the most recent of which is the Tenth Amendment
thereto dated May 9, 1997 and recorded in the aforesaid public records
in Book 943 at Page 346 (as amended, the "Master Deed").
TOGETHER WITH ALL those portions of the following described premises (if
any) that have not been converted to floating Timeshare Interests and/or
Multiple Ownership Interests pursuant to the above-referenced Master
Deed:
Those certain parcels of land located within the Port Royal Plantation
and Surrounds Planned Unit Development, Town of Hilton Head Island,
Beaufort County, South Carolina, together with all improvements thereon,
which are shown and depicted as "Xxxxx 0X, Xxxxx 0, 1.963 Acres", "Xxxxx
0X, Xxxxx 0, 0.73 Acre", "Phase 1B, 0.857 Acre", "Phase 1B, 0.578 Acre",
"Phase 1C, 0.258 Acre", "Phase 1C, 0.481 Acre", and "Recreation Area,
0.91 Acre" on that certain plat entitled "AN AS-BUILT SURVEY OF PLANTERS
QUARTERS ALL PHASES, A SECTION OF PORT ROYAL PLANTATION, HILTON HEAD
ISLAND, BEAUFORT COUNTY, SOUTH CAROLINA, PREPARED FOR: EPIC
RESORTS-HILTON HEAD, LLC, EPIC RESORTS, INC., NATWEST MARKETS LTD. &
UNITED STATES TRUST COMPANY OF NEW YORK" dated March 18, 1996 and last
revised June 12, 1998, and prepared by Xxxxxx X. Xxxxxxx, SC RLS No.
2077, which plat has been duly recorded in the RMC Office for Beaufort
County, South Carolina in Plat Book _____ at Page _____.
II. Undeveloped portions of Planters Quarters
ALSO, all those certain parcels of land located within the Port Royal
Plantation and Surrounds Planned Unit Development, Town of Hilton Head
Island, Beaufort County, South Carolina,
together containing 10.368 acres, more or less, which are shown and
depicted as "Future Phases, 9.959 Acres" and "Future Phase, 0.409 Acre"
on that certain plat entitled "AN AS-BUILT SURVEY OF PLANTERS QUARTERS
ALL PHASES, A SECTION OF PORT ROYAL PLANTATION, HILTON HEAD ISLAND,
BEAUFORT COUNTY, SOUTH CAROLINA, PREPARED FOR: EPIC RESORTS-HILTON HEAD,
LLC, EPIC RESORTS, INC., NATWEST MARKETS LTD. & UNITED STATES TRUST
COMPANY OF NEW YORK" dated March 18, 1996 and last revised June 12,
1998, and prepared by Xxxxxx X. Xxxxxxx, SC RLS No. 2077, which plat has
been duly recorded in the RMC Office for Beaufort County, South Carolina
in Plat Book _____ at Page _____.
This being the same property conveyed to Epic Resorts-Hilton Head, LLC, by
Planters Preserve, LLC by deed dated __________________ and recorded in Deed
Book __________, Page _________, Records of Beaufort County, and by
__________, by deed recorded ____________, in Deed Book _________, Page
_____, Records of ____________ County, TMS No. _____________.
The laws of South Carolina provide that in any real estate foreclosure
proceeding a defendant against whom a personal judgment may be taken or asked
may within thirty days after the sale of the mortgaged property apply to the
court for an order of appraisal. The statutory appraisal value as approved by
the court would be substituted for the high bid and may decrease the amount
of any deficiency owing in connection with the transaction. THE UNDERSIGNED
HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH MEANS THE
HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT
REGARDLESS OF ANY APPRAISED VALUE OF THE PROPERTY.
IN WITNESS WHEREOF, the Obligor has caused this Security Instrument to
be executed and delivered as of the date first set forth above.
EPIC REPORTS-HILTON HEAD, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxxx
WITNESSES: ------------------------------------
Name: Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxx Title: President
------------------------------
Name: Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
STATE OF PENNSYLVANIA )
) PROBATE
COUNTY OF XXXXXXXXXX )
PERSONALLY appeared before me the undersigned witness who made oath that
he/she saw the within named Mortgagor, Xxxxxx X. Xxxxxxx, by its proper
office, sign, seal and as its corporate act and deed deliver the within
written instrument and that he/she with the other witness subscribed above
witnessed the execution thereof.
SWORN to and subscribed before me
this 6 day of July __, 1998.
/s/ Xxxxxxx X. Xxxxx (L.S.)
----------------------
Notary Public
My Commission Expires: Notarial Seal
Xxxxxxx X. Xxxxx, Notary Public
Xxxxxxxxxx County
My Commission Expires April 16, 2001
Member, Pennsylvania Association of Notaries
