RECORD AND RETURN TO:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X'Xxxxx
DEED TO SECURE DEBT AND SECURITY AGREEMENT
GREENTREE LLC,
GRANTOR
TO
FIRST UNION NATIONAL BANK,
GRANTEE
DATED: AS OF JUNE 24, 1999
County: Chatham
State of Georgia
FUNB Loan No. _______
THIS DEED TO SECURE DEBT AND SECURITY AGREEMENT (this "Security
Deed") is made as of the 24th day of June, 1999, by Greentree LLC, a
Georgia limited liability company ("Grantor"), whose address is c/o Xxxxxx
X. Xxxxx, CFO, 000 Xxxxx Xxxxxx, 0{xx} Xxxxx, Xxxxxxx, Xxxxxxx 00000 in
favor of FIRST UNION NATIONAL BANK, a national banking association
("Grantee"), whose address is Xxx Xxxxx Xxxxx Xxxxxx, XX0, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000.
W I T N E S S E T H:
THAT FOR AND IN CONSIDERATION OF THE SUM OF TEN AND NO/100
DOLLARS ($10.00), AND OTHER VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, GRANTOR HEREBY IRREVOCABLY
GRANTS, BARGAINS, SELLS, CONVEYS, TRANSFERS, PLEDGES, SETS OVER AND
ASSIGNS, AND GRANTS A SECURITY INTEREST, TO Grantee, ITS SUCCESSORS AND
ASSIGNS, with power of sale, in all of Grantor's estate, right, title and
interest in, to and under any and all of the following described property,
whether now owned or hereafter acquired (collectively, the "Property"):
A. All that certain real property situated at 00000 Xxxxxxxx
Xxxxxxxxx, Xxxxxx xx Xxxxxxx, Xxxxx of Georgia, more particularly described
on EXHIBIT A attached hereto and incorporated herein by this reference (the
"Real Estate"), together with all of the easements, rights, privileges,
franchises, tenements, hereditaments and appurtenances now or hereafter
thereunto belonging or in any way appertaining and all of the estate,
right, title, interest, claim and demand whatsoever of Grantor therein or
thereto, either at law or in equity, in possession or in expectancy, now or
hereafter acquired;
B. All structures, buildings and improvements of every kind and
description now or at any time hereafter located or placed on the Real
Estate (the "Improvements");
C. All furniture, furnishings, fixtures, goods, equipment,
inventory or personal property owned by Grantor and now or hereafter
located on, attached to or used in and about the Improvements, including,
but not limited to, all machines, engines, boilers, dynamos, elevators,
stokers, tanks, cabinets, awnings, screens, shades, blinds, carpets,
draperies, lawn mowers, and all appliances, plumbing, heating, air
conditioning, lighting, ventilating, refrigerating, disposal and
incinerating equipment, and all fixtures and appurtenances thereto, and
such other goods and chattels and personal property owned by Grantor as are
now or hereafter used or furnished in operating the Improvements, or the
activities conducted therein, and all building materials and equipment
hereafter situated on or about the Real Estate or Improvements, and all
warranties and guaranties relating thereto, and all additions thereto and
substitutions and replacements therefor (exclusive of any of the foregoing
owned or leased by tenants of space in the Improvements);
D. All easements, rights-of-way, strips and gores of land,
vaults, streets, ways, alleys, passages, sewer rights, air rights and other
development rights now or hereafter located on the Real Estate or under or
above the same or any part or parcel thereof, and all estates, rights,
titles, interests, tenements, hereditaments and appurtenances, reversions
and remainders whatsoever, in any way belonging, relating or appertaining
to the Real Estate and/or Improvements or any part thereof, or which
hereafter shall in any way belong, relate or be appurtenant thereto,
whether now owned or hereafter acquired by Grantor;
E. All water, ditches, xxxxx, reservoirs and drains and all
water, ditch, well, reservoir and drainage rights which are appurtenant to,
located on, under or above or used in connection with the Real Estate or
the Improvements, or any part thereof, whether now existing or hereafter
created or acquired;
F. All minerals, crops, timber, trees, shrubs, flowers and
landscaping features now or hereafter located on, under or above the Real
Estate;
G. All cash funds, deposit accounts and other rights and
evidence of rights to cash, now or hereafter created or held by Grantee
pursuant to this Security Deed or any other of the Loan Documents (as
hereinafter defined), including, without limitation, all funds now or
hereafter on deposit in the Impound Account, the Repair and Remediation
Reserve, the Replacement Reserve and the Payment Reserve (each as hereafter
defined);
H. All leases (including, without limitation, oil, gas and
mineral leases), licenses, concessions and occupancy agreements of all or
any part the Real Estate or the Improvements (each, a "Lease" and
collectively, "Leases"), whether written or oral, now or hereafter entered
into and all rents, royalties, issues, profits, revenue, income and other
benefits (collectively, the "Rents and Profits") of the Real Estate or the
Improvements, now or hereafter arising from the use or enjoyment of all or
any portion thereof or from any present or future Lease or other agreement
pertaining thereto or arising from any of the Contracts (as hereinafter
defined) or any of the General Intangibles (as hereinafter defined) and all
cash or, to the extent permitted by law, securities deposited to secure
performance by the tenants, lessees or licensees (each, a "Tenant" and
collectively, "Tenants"), as applicable, of their obligations under any
such Leases, whether said cash or securities are to be held until the
expiration of the terms of said Leases or applied to one or more of the
installments of rent coming due prior to the expiration of said terms,
subject to, however, the provisions contained in Section 1.11 hereinbelow;
I. All contracts and agreements now or hereafter entered into
covering any part of the Real Estate or the Improvements (collectively, the
"Contracts") and all revenue, income and other benefits thereof, including,
without limitation, management agreements, service contracts, maintenance
contracts, equipment leases, personal property leases and any contracts or
documents relating to construction on any part of the Real Estate or the
Improvements (including plans, drawings, surveys, tests, reports, bonds and
governmental approvals) or to the management or operation of any part of
the Real Estate or the Improvements;
J. All present and future monetary deposits given to any public
or private utility with respect to utility services furnished to any part
of the Real Estate or the Improvements;
K. All present and future funds, accounts, instruments, accounts
receivable, documents, causes of action, claims, general intangibles
(including without limitation, trademarks, trade names, servicemarks and
symbols now or hereafter used in connection with any part of the Real
Estate or the Improvements, all names by which the Real Estate or the
Improvements may be operated or known, all rights to carry on business
under such names, and all rights, interest and privileges which Grantor has
or may have as developer or declarant under any covenants, restrictions or
declarations now or hereafter relating to the Real Estate or the
Improvements) and all notes or chattel paper now or hereafter arising from
or by virtue of any transactions related to the Real Estate or the
Improvements (collectively, the "General Intangibles");
L. All water taps, sewer taps, certificates of occupancy,
permits, licenses, franchises, certificates, consents, approvals and other
rights and privileges now or hereafter obtained in connection with the Real
Estate or the Improvements and all present and future warranties and
guaranties relating to the Improvements or to any equipment, fixtures,
furniture, furnishings, personal property or components of any of the
foregoing now or hereafter located or installed on the Real Estate or the
Improvements;
M. All building materials, supplies and equipment now or
hereafter placed on the Real Estate or in the Improvements and all
architectural renderings, models, drawings, plans, specifications, studies
and data now or hereafter relating to the Real Estate or the Improvements;
N. All right, title and interest of Grantor in any insurance
policies or binders now or hereafter relating to the Property including any
unearned premiums thereon;
O. All proceeds, products, substitutions and accessions
(including claims and demands therefor) of the conversion, voluntary or
involuntary, of any of the foregoing into cash or liquidated claims,
including, without limitation, proceeds of insurance and condemnation
awards; and
P. All other or greater rights and interests of every nature in
the Real Estate or the Improvements and in the possession or use thereof
and income therefrom, whether now owned or hereafter acquired by Grantor.
THIS CONVEYANCE IS INTENDED TO (I) OPERATE AND BE CONSTRUED AS A
DEED PASSING TITLE TO THE PROPERTY TO GRANTEE AND IS MADE UNDER THOSE
PROVISIONS OF THE EXISTING LAWS OF THE STATE OF GEORGIA RELATING TO DEEDS
TO SECURE DEBT, AND NOT AS A MORTGAGE AND (II) TO CONSTITUTE A SECURITY
AGREEMENT PURSUANT TO THE GEORGIA UNIFORM COMMERCIAL CODE, AND IS GIVEN TO
SECURE THE FOLLOWING:
(1) The debt evidenced by that certain promissory note (such
promissory note, together with any and all renewals, modifications,
consolidations and extensions thereof, is hereinafter referred to as the
"Note") of even date with this Security Deed, made by Grantor to the order
of Grantee in the original principal amount of Six Million Seven Hundred
Nineteen Thousand and 00/100 Dollars ($6,719,00.00) together with interest
as therein provided; which Note has a stated maturity date of July 1, 2009.
(2) The full and prompt payment and performance of all of the
provisions, agreements, covenants and obligations herein contained and
contained in any other agreements, documents or instruments now or
hereafter evidencing, securing, guarantying or otherwise relating to the
indebtedness evidenced by the Note, including, but not limited to, the
Hazardous Indemnity Agreement (as hereinafter defined) (the Note, this
Security Deed, and such other agreements, documents and instruments,
together with any and all renewals, amendments, extensions and
modifications thereof, are hereinafter collectively referred to as the
"Loan Documents") and the payment of all other sums therein covenanted to
be paid;
(3) Any and all additional advances made by Grantee to protect or
preserve the Property or the lien or security interest created hereby on
the Property, or for taxes, assessments or insurance premiums as
hereinafter provided or for performance of any of Grantor's obligations
hereunder or under the other Loan Documents or for any other purpose
provided herein or in the other Loan Documents (whether or not the original
Grantor remains the owner of the Property at the time of such advances);
and
(4) Any and all other indebtedness now owing or which may
hereafter be owing by Grantor to Grantee, including, without limitation,
all prepayment fees, however and whenever incurred or evidenced, whether
express or implied, direct or indirect, absolute or contingent, or due or
to become due, and all renewals, modifications, consolidations,
replacements and extensions thereof.
(All of the sums referred to in Paragraphs (1) through (4) above
are herein sometimes referred to as the "secured indebtedness" or the
"indebtedness secured hereby").
TO HAVE AND TO HOLD the Property unto Grantee, its successors and
assigns forever, for the purposes and uses herein set forth, in fee simple,
forever.
PROVIDED, HOWEVER, that if the principal and interest and all
other sums due or to become due under the Note or under the other Loan
Documents, including, without limitation, any prepayment fees required
pursuant to the terms of the Note, shall have been paid at the time and in
the manner stipulated therein and all other sums payable hereunder and all
other indebtedness secured hereby shall have been paid and all other
covenants contained in the Loan Documents shall have been performed, then,
in such case, this Security Deed shall be satisfied and the estate, right,
title and interest of Grantee in the Property shall cease, and upon payment
to Grantee of all costs and expenses incurred for the preparation of the
release hereinafter referenced and all recording costs if allowed by law,
Grantee shall release this Security Deed and the lien hereof by proper
instrument.
ARTICLE I
COVENANTS OF GRANTOR
For the purpose of further securing the indebtedness secured
hereby and for the protection of the security of this Security Deed, for so
long as the indebtedness secured hereby or any part thereof remains unpaid,
Grantor covenants and agrees as follows:
1.1 WARRANTIES OF GRANTOR. Grantor, for itself and its
successors and assigns, does hereby represent, warrant and covenant to and
with Grantee, its successors and assigns, that:
(a) Grantor has good and marketable fee simple title to the
Property, subject only to those matters expressly set forth as exceptions
to or subordinate matters in the title insurance policy insuring the lien
of this Security Deed which Grantee has agreed to accept, excepting
therefrom all preprinted and/or standard exceptions (the "Permitted
Exceptions"), and has full power and lawful authority to grant, bargain,
sell, convey, assign, transfer and mortgage its interest in the Property in
the manner and form hereby done or intended. Grantor will preserve its
interest in and title to the Property and will forever warrant and defend
the same to Grantee against any and all claims whatsoever and will forever
warrant and defend the validity and priority of the lien and security
interest created herein against the claims of all persons and parties
whomsoever, subject to the Permitted Exceptions. The foregoing warranty of
title shall survive the foreclosure of this Security Deed and shall inure
to the benefit of and be enforceable by Grantee in the event Grantee
acquires title to the Property pursuant to any foreclosure;
(b) No bankruptcy or insolvency proceedings are pending or
contemplated by Grantor or, to the best knowledge of Grantor, against
Grantor or by or against any endorser or cosigner of the Note, or any
guarantor or indemnitor under any guaranty or indemnity agreement executed
in connection with the Note of the loan evidenced thereby and secured
hereby;
(c) To the best of Grantor's knowledge, all reports,
certificates, affidavits, statements and other data furnished by or on
behalf of Grantor to Grantee in connection with the loan evidenced by the
Note are true and correct in all material respects and do not omit to state
any fact or circumstance necessary to make the statements contained therein
not misleading;
(d) The execution, delivery and performance of this Security
Deed, the Note and all of the other Loan Documents have been duly
authorized by all necessary action to be, and are, binding and enforceable
against Grantor in accordance with the respective terms thereof and do not
contravene, result in a breach of or constitute (upon the giving of notice
or the passage of time or both) a default under the partnership agreement,
articles of incorporation or other organizational documents of Grantor or
any contract or agreement of any nature to which Grantor is a party or by
which Grantor or any of its property may be bound and do not violate or
contravene any law, order, decree, rule or regulation to which Grantor is
subject;
(e) The Real Estate and the Improvements, and the intended use
thereof by Grantor comply in all material respects with all applicable
restrictive covenants, zoning ordinances, subdivision and building codes,
flood disaster laws, applicable health and environmental laws and
regulations and all other ordinances, orders or requirements issued by any
state, federal or municipal authorities having or claiming jurisdiction
over the Property. The Real Estate and Improvements constitute one or more
separate tax parcels for purposes of ad valorem taxation. The Real Estate
and Improvements do not require any rights over, or restrictions against,
other property in order to comply with any of the aforesaid governmental
ordinances, orders or requirements other than Permitted Exceptions.
(f) All utility services necessary and sufficient for the full
use, occupancy, operation and disposition of the Real Estate and the
Improvements for their intended purposes are available to the Property,
including water, storm sewer, sanitary sewer, gas, electric, cable and
telephone facilities, through public rights-of-way or perpetual private
easements;
(g) All streets, roads, highways, bridges and waterways necessary
for access to and full use, occupancy, operation and disposition of the
Real Estate and the Improvements have been completed, have been dedicated
to and accepted by the appropriate municipal authority and are open and
available to the Real Estate and the Improvements without further condition
or cost to Grantor or served by a perpetual private easement reflected in
the Permitted Exceptions;
(h) All curb cuts, driveways and traffic signals shown on the
survey delivered to Grantee prior to the execution and delivery of this
Security Deed are existing and have been fully approved by the appropriate
governmental authority;
(i) To the best of Grantor's knowledge, there are no judicial,
administrative, mediation or arbitration actions, suits or proceedings
pending or threatened against or affecting Grantor, (and, if Grantor is a
partnership, any of its general partners) or the Property which, if
adversely determined, would materially impair either the Property or
Grantor's ability to perform the covenants or obligations required to be
performed under the Loan Documents;
(j) The Property is free from delinquent water charges, sewer
rents, taxes and assessments;
(k) As of the date of this Security Deed, the Property is free
from unrepaired damage caused by fire, flood, accident or other casualty;
(l) As of the date of this Security Deed, no part of the Real
Estate or the Improvements has been taken in condemnation, eminent domain
or like proceeding nor is any such proceeding pending or to Grantor's
knowledge and belief, threatened or contemplated;
(m) Grantor possesses all franchises, patents, copyrights,
trademarks, trade names, licenses and permits adequate for the conduct of
its business substantially as now conducted;
(n) To the best of Grantor's knowledge, the Improvements are
structurally sound, in good repair and free of defects in materials and
workmanship and have been constructed and installed in substantial
compliance with the plans and specifications relating thereto, ordinary
wear and tear excepted. All major building systems located within the
Improvements, including, without limitation, the heating and air
conditioning systems and the electrical and plumbing systems, are in good
working order and condition, ordinary wear and tear excepted;
(o) Grantor has delivered to Grantee true, correct and complete
copies of all Contracts and all amendments thereto or modifications
thereof;
(p) Each Contract constitutes the legal, valid and binding
obligation of Grantor and, to the best of Grantor's knowledge and belief,
is enforceable against any other party thereto. To the best of Grantor's
knowledge, no default exists, or with the passing of time or the giving of
notice or both would exist, under any Contract which would, in the
aggregate, have a material adverse effect on Grantor or the Property;
(q) No Contract provides any party with the right to obtain a
lien or encumbrance upon the Property superior to the lien of this Security
Deed other than Permitted Exceptions;
(r) Grantor and the Property are free from any delinquent
obligations for sales and payroll taxes;
(s) There are no security agreements or financing
statements affecting any of the Property other than (i) as disclosed in
writing by Grantor to Grantee prior to the date hereof and (ii) the
security agreements and financing statements created in favor of Grantee;
and
(t) The Property forms no part of any property owned, used or
claimed by Grantor as a residence or business homestead and is not exempt
from forced sale under the laws of the State of Georgia. Grantor hereby
disclaims and renounces each and every claim to all or any portion of the
Property as a homestead.
(u) The Permitted Exceptions do not and will not materially and
adversely affect (1) the ability of Grantor to pay in full the principal
and interest on the Note in a timely manner or (2) the use of the Property
for the use currently being made thereof, the operation of the Property as
currently being operated or the value of the Property.
(v) Grantor shall take all action necessary to assure that
Grantor's computer based systems are able to operate and effectively
process data, including dates on and after January 1, 2000 and at the
request of Grantee, Grantor shall provide Grantee with assurance acceptable
to Grantee of Grantor's Year 2000 compatibility.
1.2 DEFENSE OF TITLE. If, while this Security Deed is in force,
the title to the Property or the interest of Grantee therein shall be the
subject, directly or indirectly, of any action at law or in equity, or be
attached directly or indirectly, or endangered, clouded or adversely
affected in any manner, Grantor, at Grantor's expense, shall take all
necessary and proper steps for the defense of said title or interest,
including the employment of counsel approved by Grantee, the prosecution or
defense of litigation, and the compromise or discharge of claims made
against said title or interest. Notwithstanding the foregoing, in the
event that Grantee determines that Grantor is not adequately performing its
obligations under this Section, Grantee may, without limiting or waiving
any other rights or remedies of Grantee hereunder, take such steps, with
respect thereto as Grantee shall deem necessary or proper and any and all
costs and expenses incurred by Grantee in connection therewith, together
with interest thereon at the Default Interest Rate (as defined in the Note)
from the date incurred by Grantee until actually paid by Grantor, shall be
immediately paid by Grantor on demand and shall be secured by this Security
Deed and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note.
1.3 PERFORMANCE OF OBLIGATIONS. Grantor shall pay when due the
principal of and the interest on the indebtedness evidenced by the Note.
Grantor shall also pay all charges, fees and other sums required to be paid
by Grantor as provided in the Loan Documents, and shall observe, perform
and discharge all obligations, covenants and agreements to be observed,
performed or discharged by Grantor set forth in the Loan Documents in
accordance with their terms. Further, Grantor shall promptly and strictly
perform and comply with all covenants, conditions, obligations and
prohibitions required of Grantor in connection with any other document or
instrument affecting title to the Property, or any part thereof, regardless
of whether such document or instrument is superior or subordinate to this
Security Deed.
1.4 INSURANCE. Grantor shall, at Grantor's expense, maintain in
force and effect on the Property at all times while this Security Deed
continues in effect the following insurance:
(a) Insurance against loss or damage to the Property by fire,
windstorm, tornado and hail and against loss and damage by such other,
further and additional risks as may be now or hereafter embraced by an
"all-risk" or "special form" type of insurance policy. The amount of such
insurance shall be not less than one hundred percent (100%) of the full
replacement cost (insurable value) of the Improvements (as established by
an MAI appraisal), without reduction for depreciation. The determination
of the replacement cost amount shall be adjusted annually to comply with
the requirements of the insurer issuing such coverage or, at Grantee's
election, by reference to such indices, appraisals or information as
Grantee determines in its reasonable discretion in order to reflect
increased value due to inflation. Absent such annual adjustment, each
policy shall contain inflation guard coverage insuring that the policy
limit will be increased over time to reflect the effect of inflation. Full
replacement cost, as used herein, means, with respect to the Improvements,
the cost of replacing the Improvements without regard to deduction for
depreciation, exclusive of the cost of excavations, foundations and
footings below the lowest basement floor. Grantor shall also maintain
insurance against loss or damage to furniture, furnishing, fixtures,
equipment and other items (whether personalty or fixtures) included in the
Property and owned by Grantor from time to time to the extent applicable.
Each policy shall contain a replacement cost endorsement and either an
agreed amount endorsement (to avoid the operation of any co-insurance
provisions) or a waiver of any co-insurance provisions, all subject to
Grantee's approval. The maximum deductible shall be $10,000.00.
(b) Commercial General Liability Insurance against claims for
personal injury, bodily injury, death and property damage occurring on, in
or about the Real Estate or the Improvements in amounts not less than
$1,000,000.00 per occurrence and $2,000,000.00 in the aggregate plus
umbrella coverage in an amount not less than $2,000,000. Grantee hereby
retains the right to periodically review the amount of said liability
insurance being maintained by Grantor and to require an increase in the
amount of said liability insurance should Grantee deem an increase to be
reasonably prudent under then existing circumstances.
(c) Boiler and machinery insurance is required if steam boilers
or other pressure-fired vessels are in operation at the Property. Minimum
liability coverage per accident must equal the greater of the replacement
cost (insurable value) of the Improvements housing such boiler or pressure-
fired machinery or $2,000,000.00. If one or more large HVAC units is in
operation at the Property, "Systems Breakdowns" coverage shall be required,
as determined by Grantee. Minimum liability coverage per accident must
equal the value of such unit(s).
(d) If the Improvements or any part thereof is situated in an
area designated by the Federal Emergency Management Agency ("FEMA") as a
special flood hazard area (Zone A or Zone V), flood insurance in an amount
equal to the lesser of: (a) the minimum amount required, under the terms of
coverage, to compensate for any damage or loss on a replacement basis (or
the unpaid balance of the indebtedness secured hereby if replacement cost
coverage is not available for the type of building insured); or (b) the
maximum insurance available under the appropriate National Flood Insurance
Administration program. The maximum deductible shall be $3,000.00 per
building or a higher minimum amount as required by FEMA or other applicable
law.
(e) During the period of any construction, renovation or
alteration of the existing Improvements which exceeds the lesser of 10% of
the principal amount of the Note or $500,000, at Grantee's request, a
completed value, "All Risk" Builder's Risk form or "Course of Construction"
insurance policy in nonreporting form, in an amount approved by Grantee,
may be required. During the period of any construction of any addition to
the existing Improvements, a completed value, "All Risk" Builder's Risk
form or "Course of Construction" insurance policy in non-reporting form, in
an amount approved by Grantee, shall be required.
(f) When required by applicable law, ordinance or other
regulation, Worker's Compensation and Employer's Liability Insurance
covering all persons subject to the worker's compensation laws of the state
in which the Property is located.
(g) Business income (loss of rents) insurance in amounts
sufficient to compensate Grantor for all Rents and Profits or income during
a period of not less than twelve (12) months. The amount of coverage shall
be adjusted annually to reflect the Rents and Profits or income payable
during the succeeding twelve (12) month period.
(h) Such other insurance on the Property or on any replacements
or substitutions thereof or additions thereto as may from time to time be
required by Grantee against other insurable hazards or casualties which at
the time are commonly insured against in the case of property similarly
situated including, without limitation, Sinkhole, Mine Subsidence,
Earthquake and Environmental insurance, due regard being given to the
height and type of buildings, their construction, location, use and
occupancy.
All such insurance shall (i) be with insurers fully licensed and
authorized to do business in the state within which the Premises is located
and who have and maintain a rating of at least A from Standard & Poor's, or
equivalent, (ii) contain the complete address of the Premises (or a
complete legal description), (iii) be for terms of at least one year, with
premium prepaid, and (vi) be subject to the approval of Grantee as to
insurance companies, amounts, content, forms of policies, method by which
premiums are paid and expiration dates, and (v) include a standard, non-
contributory, mortgagee clause naming EXACTLY:
First Union National Bank
its Successors and Assigns ATIMA
Attn. Commercial Security Deed Servicing
X.X. Xxx 00000
Xxxxxxxxx, XX 00000
(a) as an additional insured under all liability insurance
policies, (b) as the first mortgagee on all property insurance policies and
(c) as the loss payee on all loss of rents or loss of business income
insurance policies.
Grantor shall, as of the date hereof, deliver to Grantee evidence
that said insurance policies have been prepaid as required above and
certified copies of such insurance policies and original certificates of
insurance signed by an authorized agent of the applicable insurance
companies evidencing such insurance satisfactory to Grantee. Grantor shall
renew all such insurance and deliver to Grantee certificates and policies
evidencing such renewals at least thirty (30) days before any such
insurance shall expire. Grantor further agrees that each such insurance
policy: (i) shall provide for at least thirty (30) days' prior written
notice to Grantee prior to any policy reduction or cancellation for any
reason other than non-payment of premium and at least ten (10) days' prior
written notice to Grantee prior to any cancellation due to non-payment of
premium; (ii) shall contain an endorsement or agreement by the insurer that
any loss shall be payable to Grantee in accordance with the terms of such
policy notwithstanding any act or negligence of Grantor which might
otherwise result in forfeiture of such insurance; (iii) shall waive all
rights of subrogation against Grantee; (iv) in the event that the Real
Estate or the Improvements constitutes a legal non-conforming use under
applicable building, zoning or land use laws or ordinances, shall include
an ordinance or law coverage endorsement which will contain Coverage A:
"Loss Due to Operation of Law" (with a minimum liability limit equal to
Replacement Cost With Agreed Value Endorsement), Coverage B: "Demolition
Cost" and Coverage C: "Increased Cost of Construction" coverages; and (v)
may be in the form of a blanket policy provided that, in the event that any
such coverage is provided in the form of a blanket policy, Grantor hereby
acknowledges and agrees that failure to pay any portion of the premium
therefor which is not allocable to the Property or by any other action not
relating to the Property which would otherwise permit the issuer thereof to
cancel the coverage thereof, would require the Property to be insured by a
separate, single-property policy. The blanket policy must properly
identify and fully protect the Property as if a separate policy were issued
for 100% of Replacement Cost at the time of loss and otherwise meet all of
Grantee's applicable insurance requirements set forth in this Section 1.4.
The delivery to Grantee of the insurance policies or the certificates of
insurance as provided above shall constitute an assignment of all proceeds
payable under such insurance policies relating to the Property by Grantor
to Grantee as further security for the indebtedness secured hereby. In the
event of foreclosure of this Security Deed, or other transfer of title to
the Property in extinguishment in whole or in part of the indebtedness
secured hereby, all right, title and interest of Grantor in and to all
proceeds payable under such policies then in force concerning the Property
shall thereupon vest in the purchaser at such foreclosure, or in Grantee or
other transferee in the event of such other transfer of title. Approval of
any insurance by Grantee shall not be a representation of the solvency of
any insurer or the sufficiency of any amount of insurance. In the event
Grantor fails to provide, after five (5) days notice, maintain, keep in
force or deliver and furnish to Grantee the policies of insurance required
by this Security Deed or evidence of their renewal as required herein,
Grantee may, but shall not be obligated to, procure such insurance and
Grantor shall pay all amounts advanced by Grantee therefor, together with
interest thereon at the Default Interest Rate from and after the date
advanced by Grantee until actually repaid by Grantor, promptly upon demand
by Grantee. Any amounts so advanced by Grantee, together with interest
thereon, shall be secured by this Security Deed and by all of the other
Loan Documents securing all or any part of the indebtedness secured hereby.
Grantee shall not be responsible for nor incur any liability for the
insolvency of the insurer or other failure of the insurer to perform, even
though Grntee has caused the insurance to be placed with the insurer after
failure of Grantor to furnish such insurance. Grantor shall not obtain
insurance for the Property in addition to that required by Grantee without
the prior written consent of Grantee, which consent will not be
unreasonably withheld provided that (i) Grantee is a named insured on such
insurance, (ii) Grantee receives complete copies of all policies evidencing
such insurance, and (iii) such insurance complies with all of the
applicable requirements set forth herein.
1.5 PAYMENT OF TAXES. Grantor shall pay or cause to be paid,
except to the extent provision is actually made therefor pursuant to
Section 1.6 of this Security Deed, all taxes and assessments which are or
may become a lien on the Property or which are assessed against or imposed
upon the Property. Grantor shall furnish Grantee with receipts (or if
receipts are not immediately available, with copies of canceled checks
evidencing payment with receipts to follow promptly after they become
available) showing payment of such taxes and assessments at least fifteen
(15) days prior to the applicable delinquency date therefor.
Notwithstanding the foregoing, Grantor may in good faith, by appropriate
proceedings and upon notice to Grantee, contest the validity, applicability
or amount of any asserted tax or assessment so long as (a) such contest is
diligently pursued, (b) Grantee determines, in its subjective opinion, that
such contest suspends the obligation to pay the tax and that nonpayment of
such tax or assessment will not result in the sale, loss, forfeiture or
diminution of the Property or any part thereof or any interest of Grantee
therein, and (c) prior to the earlier of the commencement of such contest
or the delinquency date of the asserted tax or assessment, Grantor deposits
in the Impound Account (as hereinafter defined) an amount determined by
Grantee to be adequate to cover the payment of such tax or assessment and a
reasonable additional sum to cover possible interest, costs and penalties;
provided, however, that Grantor shall promptly cause to be paid any amount
adjudged by a court of competent jurisdiction to be due, with all interest,
costs and penalties thereon, promptly after such judgment becomes final;
and provided, further, that in any event each such contest shall be
concluded, the taxes, assessments, interest, costs and penalties shall be
paid prior to the date any writ or order is issued under which the Property
may be sold, lost or forfeited.
1.6 TAX AND INSURANCE IMPOUND ACCOUNT. Grantor shall establish
and maintain at all times while this Security Deed continues in effect an
impound account (the "Impound Account") with Grantee for payment of real
estate taxes and assessments and insurance on the Property and as
additional security for the indebtedness secured hereby. Simultaneously
with the execution hereof, Grantor shall deposit in the Impound Account an
amount determined by Grantee to be necessary to ensure that there will be
on deposit with Grantee an amount which, when added to the monthly payments
subsequently required to be deposited with Grantee hereunder on account of
real estate taxes, assessments and insurance premiums, will result in there
being on deposit with Grantee in the Impound Account an amount sufficient
to pay the next due installment of real estate taxes and assessment on the
Property at least one (1) month prior to the due date thereof and the next
due annual insurance premiums with respect to the Property at least one (1)
month prior to the due date thereof. Commencing on the first monthly
payment date under the Note and continuing thereafter on each monthly
payment date under the Note, Grantor shall pay to Grantee, concurrently
with and in addition to the monthly payment due under the Note and until
the Note and all other indebtedness secured hereby is fully paid and
performed, deposits in an amount equal to one-twelfth (1/12) of the amount
of the annual real estate taxes and assessments that will next become due
and payable on the Property, plus one-twelfth (1/12) of the amount of the
annual premiums that will next become due and payable on insurance policies
which Grantor is required to maintain hereunder, each as estimated and
determined by Grantee. So long as no Event of Default (as hereinafter
defined), or event which with the passage of time, the giving of notice, or
both, would constitute an Event of Default (a "Default") hereunder or under
the other Loan Documents has occurred and is continuing, all sums in the
Impound Account shall be held by Grante in the Impound Account to pay said
taxes, assessments and insurance premiums before the same become
delinquent. Grantor shall be responsible for ensuring the receipt by
Grantee, at least thirty (30) days prior to the respective due date for
payment thereof, of all bills, invoices and statements for all taxes,
assessments and insurance premiums to be paid from the Impound Account, and
so long as no Default or Event of Default hereunder or under the other Loan
Documents has occurred and is continuing, Grantee shall pay the
governmental authority or other party entitled thereto directly to the
extent funds are available for such purpose in the Impound Account. In
making any payment from the Impound Account, Grantee shall be entitled to
rely on any xxxx, statement or estimate procured from the appropriate
public office or insurance company or agent without any inquiry into the
accuracy of such xxxx, statement or estimate and without any inquiry into
the accuracy, validity, enforceability or contestability of any tax,
assessment, valuation, sale, forfeiture, tax lien or title or claim
thereof. The Impound Account shall not, unless otherwise explicitly
required by applicable law, be or be deemed to be escrow or trust funds,
but, at Grantee's option and in Grantee's discretion, may either be held in
a separate account or be commingled by Grantee with the general funds of
Grantee. No interest on the funds contained in the Impound Account shall
be paid by Grantee to Grantor. The Impound Account is solely for the
protection of Grantee and entails no responsibility on Grantee's part
beyond the payment of taxes, assessments and insurance premiums following
receipt of bills, invoices or statements therefor in accordance with the
terms hereof and beyond the allowing of due credit for the sums actually
received. Upon assignment of this Security Deed by Grantee, any funds in
the Impound Account shall be turned over to the assignee and any
responsibility of Grantee, as assignor, with respect thereto shall
terminate. If th total funds in the Impound Account shall exceed the
amount of payments actually applied by Grantee for the purposes of the
Impound Account, such excess may be credited by Grantee on subsequent
payments to be made hereunder or, at the option of Grantee, refunded to
Grantor. If, however, the Impound Account shall not contain sufficient
funds to pay the sums required when the same shall become due and payable,
Grantor shall, within ten (10) days after receipt of written notice
thereof, deposit with Grantee the full amount of any such deficiency. If
the Grantor shall fail to deposit with Grantee the full amount of such
deficiency as provided above, Grantee shall have the option, but not the
obligation, to make such deposit and all amounts so deposited by Grantee,
together with interest thereon at the Default Interest Rate from the date
incurred by Grantee until actually paid by Grantor, shall be immediately
paid by Grantor on demand and shall be secured by this Security Deed and by
all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. If there is an Event of Default under
this Security Deed, Grantee may, but shall not be obligated to, apply at
any time the balance then remaining in the Impound Account against the
indebtedness secured hereby in whatever order Grantee shall subjectively
determine. No such application of the Impound Account shall be deemed to
cure any Default or Event of Default hereunder. Upon full payment of the
indebtedness secured hereby in accordance with its terms or at such
earlier time as Grantee may elect, the balance of the Impound Account then
in Grantee's possession shall be paid over to Grantor and no other party
shall have any right or claim thereto.
1.7 PAYMENT RESERVE.
(a) Contemporaneously with the execution hereof, Grantor has
established with Grantee a reserve in the amount equal to two (2) regular
monthly installments of principal, interest and all required deposits or
impounds as calculated by Grantee (the "Payment Reserve"). Grantor
understands and agrees that, notwithstanding the establishment of the
Payment Reserve as herein required, all of the proceeds of the Note have
been, and shall be considered, fully disbursed and shall bear interest and
be payable on the terms provided therein. No interest on funds contained
in the Payment Reserve shall be paid by Grantee to Grantor.
(b) For so long as no Event of Default has occurred hereunder or
under any of the other Loan Documents, Grantee shall on the first two (2)
monthly Payment Dates (as defined in the Note) under the Note, advance from
the Payment Reserve to itself the amount of the monthly installment due and
payable by Grantor under the Note on such monthly Payment Date and shall
also advance from the Payment Reserve into the Impound Account the amount
of any deposit for taxes and insurance premiums and into the Replacement
Reserve (as hereinafter defined) the amount of any deposit for Repairs (as
hereinafter defined) and into any other reserve account the amount of any
deposit in accordance with the terms of any other Loan Document required to
be paid by Grantor concurrently with each such monthly installment pursuant
to the terms hereof. Provided no Default or Event of Default has occurred
after the final disbursement from the Payment Reserve, any amounts then
remaining in the Payment Reserve shall be paid to Grantor. Nothing
contained herein, including, without limitation, the existence of the
Payment Reserve, shall release Grantor of any obligation to make payments
under the Note, this Security Deed or the other Loan Documents strictly in
accordance with the terms hereof or thereof and, in this regard, without
limiting the generality of the foregoing, should the amounts contained in
the Payment Reserve not be sufficient to pay in full the monthly
installments and the Impound Account, Replacement Reserve and any other
applicable reserve account deposits referenced above in this subparagraph,
Grantor shall be responsible for paying such deficiency on the Payment Date
of any such monthly installment.
1.8 REPLACEMENT RESERVE; SECURITY INTEREST RESERVES.
(a) As additional security for the indebtedness secured hereby,
Grantor shall establish and maintain at all times while this Security Deed
continues in effect a repair reserve (the "Replacement Reserve") with
Grantee for payment of certain non-recurring types of costs and expenses
incurred by Grantor for interior and exterior work to the Property,
including without limitation, performance of work to the roofs, chimneys,
gutters, downspouts, paving, curbs, driveways, ramps, balconies, porches,
patios, exterior walls, carpets, exterior doors and doorways, windows,
elevators and mechanical and HVAC equipment (collectively, the "Repairs")
provided such costs and expenses are incurred for repairs (i) not incurred
for ordinary wear and tear at the Property and (ii) categorized under
generally accepted accounting principles as a capital expense and not as an
operating expense. Commencing on the first Payment Date under the Note and
continuing thereafter on each monthly Payment Date under the Note, the
Grantor shall pay to Grantee, concurrently with and in addition to the
monthly payment due under the Note and until the Note and all other
indebtedness secured hereby is fully paid and performed, a deposit to the
Replacement Reserve in an amount equal to $4,041.67 per month. So long as
no Default or Event of Default hereunder or under the other Loan Documents
has occurred and is continuing, all sums in the Replacement Reserve shall
be held by Grantee in the Replacement Reserve to pay the costs and expenses
of Repairs. So long as no Default or Event of Default hereunder or under
the other Loan Documents has occurred and is continuing, Grantee shall, to
the extent funds are available for such purpose in the Replacement Reserve,
disburse to Grantor the amount incurred and paid by Grantor in performing
such Repairs within ten (10) days following: (a) the receipt by Grantee of
a written request from Grantor for disbursement from the Replacement
Reserve and a certification by Grantor in the form attached hereto as
Exhibit B that the applicable item of Repair has been completed, (b) the
delivery to Grantee of paid invoices, receipts or other evidence
satisfactory to Grantee verifying the cost and payment of performing the
Repairs; (c) for disbursement requests in excess of $10,000.00, the
delivery to Grantee of affidavits, lien waivers or other evidence
reasonably satisfactory to Grantee showing that all materialmen, laborers,
subcontractors and any other parties who might or could claim statutory or
common law liens and are furnishing or have furnished material or labor to
the Property have been paid all amounts due for labor and materials
furnished to the Property; (d) for disbursement requests in excess of
$10,000.00, delivery to Grantee of a certification from an inspecting
architect or other third party acceptable to Grantee describing the
completed Repairs and verifying the completion of the Repairs and the value
of the completion of the Repairs and the value of the completed Repairs;
(e) for disbursement requests in excess of $10,000,00, delivery to Grantee
of a new certificate of occupancy for the portion of the Improvements
covered by such Repairs, if said new certificate of occupancy is required
by law, or a certification by Grantor that no new certificate of occupancy
is required; and (f) the receipt by Grantee of an administrative fee in the
amount of $150.00. Grantee shall not be required to make advances from the
Replacement Reserve more frequently than once in any ninety (90) day
period. In making any payment from the Replacement Reserve, Grantee shall
be entitled to rely on such request from Grantor without any inquiry into
the accuracy, validity or contestability of any such amount. Grantee may,
at Grantor's expense, make or cause to be made during the term of this
Security Deed an annual inspection at the Property to determine the need,
as determined by Grantee in its reasonable judgment, for further Repairs of
the Propert in order to maintain the Property in good condition and repair
in accordance with the second sentence of Section 1.16 hereof. In the
event that such inspection reveals that further Repairs of the Property are
so required, Grantee shall provide Grantor with a written description of
the required Repairs and Grantor shall complete such Repairs to the
reasonable satisfaction of Grantee within ninety (90) days after the
receipt of such description from Grantee, or such later date as may be
approved by Grantee in its sole discretion. The Replacement Reserve shall
not, unless otherwise explicitly required by applicable law, be or be
deemed to be escrow or trust funds, but, at Grantee's option and in
Grantee's discretion, may either be held in a separate account or be
commingled by Grantee with the general funds of Grantee. Interest on the
funds contained in the Replacement Reserve shall be credited to Grantor as
provided in Section 4.31 hereof. The Replacement Reserve is solely for the
protection of Grantee and entails no responsibility on Grantee's part
beyond the payment of the costs and expenses described in this Section in
accordance with the terms hereof and beyond the allowing of due credit for
the sums actually received. In the event that the amounts on deposit or
available in the Replacement Reserve are inadequate to pay the cost of the
Repairs, Grantor shall pay the amount of such deficiency. Upon assignment
of this Security Deed by Grantee, any funds in the Replacement Reserve
shall be turned over to the assignee and any responsibility of Grantee, as
assignor, with respect thereto shall terminate. If there is an Event of
Default under this Security Deed, Grantee may, but shall not be obligated
to, apply at any time the balance then remaining in the Replacement Reserve
against the indebtedness secured hereby in whatever order Grantee shall
subjectively determine. No such application of the Replacement Reserve
shall be deemed to cure any Default or Event of Default hereunder. Upon
full payment of the indebtedness secured hereby in accordance with its
terms or at such earlier time as Grantee may elect, the balance of
the Replacement Reserve then in Grantee's possession shall be paid over to
Grantor and no other party shall have any right or claim thereto.
(b) As additional security for the payment and performance by
Grantor of all duties, responsibilities and obligations under the Note and
the other Loan Documents, Grantor hereby unconditionally and irrevocably
assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets
over and confirms unto Grantee, and hereby grants to Grantee a security
interest in, (i) the Impound Account, the Payment Reserve, the Repair and
Remediation Reserve, the Replacement Reserve and any other reserve or
escrow account established pursuant to the terms hereof or of any other
Loan Document (collectively, the "Reserves"), (ii) the accounts into which
the Reserves have been deposited, (iii) all insurance on said accounts,
(iv) all accounts, contract rights and general intangibles or other rights
and interests pertaining thereto, (v) all sums now or hereafter therein or
represented thereby, (vi) all replacements, substitutions or proceeds
thereof, (vii) all instruments and documents now or hereafter evidencing
the Reserves or such accounts, (viii) all powers, options, rights,
privileges and immunities pertaining to the Reserves (including the right
to make withdrawals therefrom), and (ix) all proceeds of the foregoing.
Grantor hereby authorizes and consents to the account into which the
Reserves have been deposited being held in Grantee's name or the name of
any entity servicing the Note for Grantee and hereby acknowledges and
agrees, that Grantee, or at Grantee's election, such servicing agent, shall
have exclusive control over said account. Notice of the assignment and
security interest granted to Grantee herein may be delivered by Grantee at
any time to the financial institution wherein the Reserves have been
established, and Grantee, or such servicing entity, shall have possession
of all passbooks or other evidences of such accounts. Grantor hereby
assumes all risk of loss with respect to amounts on deposit in the Reserves
as long as such Reserves are deposited into "Permitted Investments" as
described in Exhibit D annexed hereto. Grantor hereby knowingly,
voluntarily and intentionally stipulates, acknowledges and agrees that the
advancement of the funds from the Reserves as set forth herein is at
Grantor's direction and is not the exercise by Grantee of any right of
set-off or other remedy upon a Default or an Event of Default. Grantor
hereby waives all right to withdraw funds from the Reserves. If an Event
of Default shall occur hereunder or under any other of the Loan Documents,
then Grantee may, without notice or demand on Grantor, at its option: (A)
withdraw any or all of the funds (including, without limitation, interest)
then remaining in the Reserves and apply the same, after deducting all
costs and expenses of safekeeping, collection and delivery (including, but
not limited to, attorneys' fees, costs and expenses) to the indebtedness
evidenced by the Note or any other obligations of Grantor under the other
Loan Documents in such manner or as Grantee shall deem appropriate in its
sole discretion, and the excess, if any, shall be paid to Grantor, (B)
exercise any and all rights and remedies of a secured party under any
applicable Uniform Commercial Code, and/or (C) exercise any other remedies
available at law or in equity. No such use or application of the funds
contained in the Reserves shall be deemed to cure any Default or Event of
Default hereunder or under the other Loan Documents.
1.9 CASUALTY AND CONDEMNATION. Grantor shall give Grantee prompt
written notice of the occurrence of any casualty affecting, or the
institution of any proceedings for eminent domain or for the condemnation
of, the Property or any portion thereof. All insurance proceeds on the
Property, and all causes of action, claims, compensation, awards and
recoveries for any damage, condemnation or taking of all or any part of the
Property or for any damage or injury to it for any loss or diminution in
value of the Property, are hereby assigned to and shall be paid to Grantee.
Grantee may participate in any suits or proceedings relating to any such
proceeds, causes of action, claims, compensation, awards or recoveries and
Grantee is hereby authorized, in its own name or in Grantor's name, to
adjust any loss covered by insurance or any condemnation claim or cause of
action, and to settle or compromise any claim or cause of action in
connection therewith, and Grantor shall from time to time deliver to
Grantee any instruments required to permit such participation; provided,
however, that so long as no Default or Event of Default shall have occurred
and be continuing. Grantee shall not have the right to participate in the
adjustment of any loss which is not in excess of the lesser of (i) ten
percent (10%) of the then outstanding principal balance of the Note and
(ii) $500,000.00. Grantee shall apply any sums received by it under this
Section first to the payment of all of its costs and expenses (including,
but not limited to, legal fees and disbursements) incurred in obtaining
those sums, and then, as follows:
(a) In the event that less than sixty percent (60%) of the
Improvements located on the Real Estate have been taken or destroyed, then
if:
(1) no Default or Event of Default is then continuing hereunder
or under any of the other Loan Documents, and
(2) the Property can, in Grantee's reasonable judgment, with
diligent restoration or repair, be returned to a condition at least equal
to the condition thereof that existed prior to the casualty or partial
taking causing the loss or damage within the earlier to occur of (i) six
(6) months after the receipt of insurance proceeds or condemnation awards
by either Grantor of Grantee and (ii) sixty (60) days prior to the stated
maturity date of the Note, and
(3) all necessary governmental approvals can be obtained to allow
the rebuilding and reoccupancy of the Property as described in Section
1.9(a)(2) above, and
(4) there are sufficient sums available (through insurance
proceeds or condemnation awards and contributions by Grantor, the full
amount of which shall at Grantee's option have been deposited with Grantee)
for such restoration or repair (including, without limitation, for any
costs and expenses of Grantee to be incurred in administering said
restoration or repair) and for payment of principal and interest to become
due and payable under the Note during such restoration or repair, and
(5) the economic feasibility of the Improvements after such
restoration or repair will be such that income from their operation is
reasonably anticipated to be sufficient to pay operating expenses of the
Property and debt service on the indebtedness secured hereby in full with
the same coverage ratio considered by Grantee in its determination to make
the loan secured hereby including an assessment of the impact of the
termination of any Leases due to such casualty or condemnation, and
(6) in the event that the insurance proceeds or condemnation
awards received as a result of such casualty or partial taking exceed the
lesser of (i) five percent (5%) of the then outstanding principal balance
of the Note and (ii) $150,000, Grantor shall have delivered to Grantee, at
Grantor's sole cost and expense, an appraisal report in form and substance
satisfactory to Grantee appraising the value of the Property as proposed to
be restored or repaired to be not less than the appraised value of the
Property considered by Grantee in its determination to make the loan
secured hereby, and
(7) Grantor so elects by written notice delivered to Grantee
within five (5) days after settlement of the aforesaid insurance or
condemnation claim, then, Grantee shall, solely for the purposes of such
restoration or repair, advance so much of the remainder of such sums as may
be required for such restoration or repair, and any funds deposited by
Grantor therefor, to Grantor in the manner and upon such terms and
conditions as would be required by a prudent interim construction lender,
including, but not limited to, the prior approval by Grantee of plans and
specifications, contractors and form of construction contracts and the
furnishing to Grantee of permits, bonds, lien waivers, invoices, receipts
and affidavits from contractors and subcontractors in form and substance
satisfactory to Grantee in its discretion, with any remainder being applied
by Grantee for payment of the indebtedness secured hereby in whatever order
Grantee directs in its absolute discretion.
(8) In all other cases, namely, in the event that sixty percent
(60%) or more of the Improvements located on the Real Estate have been
taken or destroyed or Grantor does not elect to restore or repair the
Property pursuant to clause (a) above, or otherwise fails to meet the
requirements of clause (a) above, then in any of such events, Grantee shall
elect, in Grantee's absolute discretion and without regard to the adequacy
of Grantee's security, to do either of the following: (1) accelerate the
maturity date of the Note and declare any and all indebtedness secured
hereby to be immediately due and payable and apply the remainder of such
sums received pursuant to this Section to the payment of the indebtedness
secured hereby in whatever order Grantee directs in its absolute
discretion, with any remainder being paid to Grantor, or (2)
notwithstanding that Grantor may have elected not to restore or repair the
Property pursuant to the provisions of Section 1.9(a)(7) above, require
Grantor to restore or repair the Property, to the extent that proceeds are
received by Grantor, in the manner and upon such terms and conditions as
would be required by a prudent interim construction lender, including, but
not limited to the deposit by Grantor with Grantee, within thirty (30) days
after demand therefor, of any deficiency necessary in order to assure the
availability of sufficient funds to pay for such restoration or repair,
including Grantee's costs and expenses to be incurred in connection
therewith, the prior approval by Grantee of plans and specifications,
contractors and form of construction contracts and the furnishing to
Grantee of permits, bonds, lien waivers, invoices, receipts and affidavits
from contractors and subcontractors in form and substance satisfactory to
Grantee in its discretion, and apply the remainder of such sums toward such
restoration and repair, with any balance thereafter remaining being applied
by Grantee for payment of the indebtedness secured hereby in whatever order
Grantee directs in its absolute dscretion.
Any reduction in the indebtedness secured hereby resulting from Grantee's
application of any sums received by it hereunder shall take effect only
when Grantee actually receives such sums and elects to apply such sums to
the indebtedness secured hereby and, in any event, the unpaid portion of
the indebtedness secured hereby shall remain in full force and effect and
Grantor shall not be excused in the payment thereof. Partial payments
received by Grantee, as described in the preceding sentence, shall be
applied to the unpaid principal balance evidenced hereby and the remaining
principal balance will be recast to adjust the fixed monthly installments
required to be paid pursuant to Section 1.02 of the Note over the remaining
amortization period. If Grantor elects or Grantee directs Grantor to
restore or repair the Property after the occurrence of a casualty or
partial taking of the Property as provided above, Grantor shall promptly
and diligently, at Grantor's sole cost and expense and regardless of
whether the insurance proceeds or condemnation award, as appropriate, shall
be sufficient for the purpose, restore, repair, replace and rebuild the
Property as nearly as possible to its value, condition and character
immediately prior to such casualty or partial taking in accordance with the
foregoing provisions and Grantor shall pay to Grantee all costs and
expenses of Grantee incurred in administering said rebuilding, restoration
or repair, provided the Grantee makes such proceeds or award available for
such purpose. Grantor agrees to execute and deliver from time to time such
further instruments as may be requested by Grantee to confirm the foregoing
assignment to Grantee of any award, damage, insurance proceeds, payment or
other compensation. Grantee is hereby irrevocably constituted and
appointed the attorney-in-fact of Grantor (which power of attorney shall be
irrevocable so long as any indebtedness secured hereby is outstanding,
shall be deemed coupled with an interest, shall survive the voluntary or
involuntry dissolution of Grantor and shall not be affected by any
disability or incapacity suffered by Grantor subsequent to the date
hereof), with full power of substitution, subject to the terms of this
section, to settle for, collect and receive any such awards, damages,
insurance proceeds, payments or other compensation from the parties or
authorities making the same, to appear in and prosecute any proceedings
therefor and to give receipts and acquittances therefor.
1.10 MECHANICS' LIENS. Grantor shall pay when due all claims and
demands of mechanics, materialmen, laborers and others for any work
performed or materials delivered for the Real Estate or Improvements;
provided, however, that, Grantor shall have the right to contest in good
faith any such claim or demand, so long as it does so diligently, by
appropriate proceedings and without prejudice to Grantee and provided that
neither the Property nor any interest therein would be in any danger of
sale, loss or forfeiture as a result of such proceeding or contest. In the
event Grantor shall contest any such claim or demand, Grantor shall
promptly notify Grantee of such contest and thereafter shall, upon
Grantee's request, promptly provide a bond, cash deposit or other security
satisfactory to Grantee to protect Grantee's interest and security should
the contest be unsuccessful. If Grantor shall fail to immediately
discharge or provide security against any such claim or demand as
aforesaid, Grantee may do so and any and all expenses incurred by Grantee,
together with interest thereon at the Default Interest Rate from the date
incurred by Grantee until actually paid by Grantor, shall be immediately
paid by Grantor on demand and shall be secured by this Security Deed and by
all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note.
1.11 RENTS AND PROFITS. As additional and collateral security
for the payment of the indebtedness secured hereby and cumulative of any
and all rights and remedies herein provided for, Grantor hereby absolutely
and presently assigns to Grantee all existing and future Rents and Profits.
Grantor hereby grants to Grantee the sole, exclusive and immediate right,
without taking possession of the Property, to demand, collect (by suit or
otherwise), receive and give valid and sufficient receipts for any and all
of said Rents and Profits, for which purpose Grantor does hereby
irrevocably make, constitute and appoint Grantee its attorney-in-fact with
full power to appoint substitutes or a trustee to accomplish such purpose
(which power of attorney shall be irrevocable so long as any indebtedness
secured hereby is outstanding, shall be deemed to be coupled with an
interest, shall survive the voluntary or involuntary dissolution of Grantor
and shall not be affected by any disability or incapacity suffered by
Grantor subsequent to the date hereof). Grantee shall be without liability
for any loss which may arise from a failure or inability to collect Rents
and Profits, proceeds or other payments. However, until the occurrence of
an Event of Default under this Security Deed, Grantor shall have a license
to collect and receive the Rents and Profits when due and prepayments
thereof for not more than one month prior to due date thereof. Upon the
occurrence of an Event of Default hereunder, Grantor's license shall
automatically terminate without notice to Grantor and Grantee may
thereafter, without taking possession of the Property, collect the Rents
and Profits itself or by an agent or receiver. From and after the
termination of such license, Grantor shall be the agent of Grantee in
collection of the Rents and Profits and all of the Rents and Profits so
collected by Grantor shall be held in trust by Grantor for the sole and
exclusive benefit of Grantee and Grantor shall, within one (1) business day
after receipt of any Rents and Profits, pay the ame to Grantee to be
applied by Grantee as hereinafter set forth. Neither the demand for or
collection of Rents and Profits by Grantee shall constitute any assumption
by Grantee of any obligations under any agreement relating thereto.
Grantee is obligated to account only for such Rents and Profits as are
actually collected or received by Grantee. Grantor irrevocably agrees and
consents that the respective payors of the Rents and Profits shall, upon
demand and notice from Grantee of an Event of Default hereunder, pay said
Rents and Profits to Grantee without liability to determine the actual
existence of any Event of Default claimed by Grantee. Grantor hereby
waives any right, claim or demand which Grantor may now or hereafter have
against any such payor by reason of such payment of Rents and Profits to
Grantee, and any such payment shall discharge such payor's obligation to
make such payment to Grantor. All Rents and Profits collected or received
by Grantee shall be applied against all expenses of collection, including,
without limitation, attorneys' fees, against costs of operation and
management of the Property and against the indebtedness secured hereby, in
whatever order or priority as to any of the items so mentioned as Grantee
directs in its sole subjective discretion and without regard to the
adequacy of its security. Neither the exercise by Grantee of any rights
under this Section nor the application of any Rents and Profits to the
secured indebtedness shall cure or be deemed a waiver of any Event of
Default hereunder. The assignment of Rents and Profits hereinabove granted
shall continue in full force and effect during any period of foreclosure or
redemption with respect to the Property. Grantor has executed an
Assignment of Leases and Rents dated of even date herewith (the
"Assignment") in favor of Grantee covering all of the right, title and
interest of Grantor, as landlord, lessor or licensor, in and to any Leases.
All rights and remedies granted to Grantee under the Assignment shall be in
adition to and cumulative of all rights and remedies granted to Grantee
hereunder.
1.12 LEASES AND LICENSES.
(a) Prior to execution of any Leases of space in the Improvements
after the date hereof, Grantor shall submit to Grantee, for Grantee's prior
approval, which approval shall not be unreasonably withheld, a copy of the
form Lease Grantor plans to use in leasing space in the Improvements. All
Leases of space in the Improvements shall be on terms consistent with the
terms for similar leases in the market area of the Real Estate, shall
provide for free rent only if the same is consistent with prevailing market
conditions and shall provide for market rents then prevailing in the market
area of the Real Estate. Grantor shall also submit to Grantee for
Grantee's approval, which approval shall not be unreasonably withheld,
prior to the execution thereof, any proposed Lease of the Improvements or
any portion thereof that differs materially and adversely from the
aforementioned form Lease. Grantor shall not execute any Lease for all or
a substantial portion of the Property, except for an actual occupancy by
the Tenant thereunder, and shall at all times promptly and faithfully
perform, or cause to be performed, all of the covenants, conditions and
agreements contained in all Leases with respect to the Property, now or
hereafter existing, on the part of the landlord, lessor or licensor
thereunder to be kept and performed. Grantor shall furnish to Grantee,
within ten (10) days after a request by Grantee to do so, but in any event
by January 1 of each year, a current Rent Roll certified by Grantor as
being true and correct containing the names of all Tenants with respect to
the Property, the terms of their respective Leases, the spaces occupied and
the rentals or fees payable thereunder and the amount of each tenant's
security deposit. Upon the request of Grantee, Grantor shall deliver to
Grantee a copy of each such Lease. Grantor shall not do or suffer to be
done any act that might result in a default by the landlord, lessor or
licensor under any such Lease or allow the Tenant thereunder to withhold
payment or rent and, excet as otherwise expressly permitted by the terms of
Section 1.12 hereof, shall not further assign any such Lease or any such
rents. Grantor, at no cost or expense to Grantee, shall enforce, short of
termination, the performance and observance of each and every condition and
covenant of each of the parties under such Leases. Grantor shall not,
without the prior written consent of Grantee, modify any of the Leases,
terminate or accept the surrender of any Leases, waive or release any other
party from the performance or observance of any obligation or condition
under such Leases except in the normal course of business in a manner which
is consistent with sound and customary leasing and management practices for
similar properties in the community in which the Property is located.
Grantor shall not permit the prepayment of any rents under any of the
Leases for more than one (1) month prior to the due date thereof.
(b) Each commercial Lease executed after the date hereof
affecting any of the Real Estate or the Improvements must provide, in a
manner approved by Grantee, that the Tenant will recognize as its landlord,
lessor or licensor, as applicable, and attorn to any person succeeding to
the interest of Grantor upon any foreclosure of this Security Deed or deed
in lieu of foreclosure. Each such commercial Lease shall also provide
that, upon request of said successor-in-interest, the Tenant shall execute
and deliver an instrument or instruments confirming its attornment as
provided for in this Section; provided, however, that neither Grantee nor
any successor-in-interest shall be bound by any payment of rental for more
than one (1) month in advance, or any amendment or modification of said
commercial Lease made without the express written consent of Grantee or
said successor-in-interest.
(c) Upon the occurrence of an Event of Default under this
Security Deed, whether before or after the whole principal sum secured
hereby is declared to be immediately due or whether before or after the
institution of legal proceedings to foreclose this Security Deed,
forthwith, upon demand of Grantee, Grantor shall surrender to Grantee and
Grantee shall be entitled to take actual possession of the Property or any
part thereof personally, or by its agent or attorneys. In such event,
Grantee shall have, and Grantor hereby gives and grants to Grantee, the
right, power and authority to make and enter into Leases with respect to
the Property or portions thereof for such rents and for such periods of
occupancy and upon conditions and provisions as Grantee may deem desirable
in its sole discretion, and Grantor expressly acknowledges and agrees that
the term of any such Lease may extend beyond the date of any foreclosure
sale at the Property; it being the intention of Grantor that in such event
Grantee shall be deemed to be and shall be the attorney-in-fact of Grantor
for the purpose of making and entering into Leases of parts or portions of
the Property for the rents and upon the terms, conditions and provisions
deemed desirable to Grantee in its sole discretion and with like effect as
if such Leases had been made by Grantor as the owner in fee simple of the
Property free and clear of any conditions or limitations established by
this Security Deed. The power and authority hereby given and granted by
Grantor to Grantee shall be deemed to be coupled with an interest, shall
not be revocable by Grantor so long as any indebtedness secured hereby is
outstanding, shall survive the voluntary or involuntary dissolution of
Grantor and shall not be affected by any disability or incapacity suffered
by Grantor subsequent to the date hereof. In connection with any action
taken by Grantee pursuant to this Section, Grantee shall not be liable for
any loss sustained by Grantor resulting from any failure to let the
Property, or any part threof, or from any other act or omission of Grantee
in managing the Property, nor shall Grantee be obligated to perform or
discharge any obligation, duty or liability under any Lease covering the
Property or any part thereof or under or by reason of this instrument or
the exercise of rights or remedies hereunder. Grantor shall, and does
hereby, indemnify Grantee for, and hold Grantee harmless from, any and all
claims, actions, demands, liabilities, loss or damage which may or might be
incurred by Grantee under any such Lease or under this Security Deed or by
the exercise of rights or remedies hereunder and from any and all claims
and demands whatsoever which may be asserted against Grantee by reason of
any alleged obligations or undertakings on its part to perform or discharge
any of the terms, covenants or agreements contained in any such Lease other
than those finally determined by a court of competent jurisdiction to have
resulted solely from the gross negligence or willful misconduct of Grantee.
Should Grantee incur any such liability, the amount thereof, including,
without limitation, costs, expenses and attorneys' fees, together with
interest thereon at the Default Interest Rate from the date incurred by
Grantee until actually paid by Grantor, shall be immediately due and
payable to Grantee by Grantor on demand and shall be secured hereby and by
all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. Nothing in this Section shall impose
on Grantee any duty, obligation or responsibility for the control, care,
management or repair of the Property, or for the carrying out of any of the
terms and conditions of any such Lease nor shall it operate to make Grantee
responsible or liable for any waste committed on the Property by the
Tenants or by any other parties or for any dangerous or defective condition
of the Property, or for any negligence in the management, upkeep, repair or
control of the Property. Grantor hereby assents to, ratifies and confirms
any and all ations of Grantee with respect to the Property taken under this
Section.
1.13 Alienation and Further Encumbrances.
(a) Grantor acknowledges that Grantee has relied upon the
principals of Grantor and their experience in owning and operating the
Property through a management contract with Merry Land Property Management,
Inc. and properties similar to the Property in connection with the closing
of the loan evidenced by the Note. Accordingly, except as specifically
allowed hereinbelow in this Section and notwithstanding anything to the
contrary contained in SECTION 4.6 hereof, in the event that the Property or
any part thereof or interest therein shall be sold, conveyed, disposed of,
alienated, hypothecated, leased (except to Tenants of space in the
Improvements in accordance with the provisions of SECTION 1.12 hereof),
assigned, pledged, mortgaged, further encumbered or otherwise transferred
or Grantor shall be divested of its title to the Property or any interest
therein, in any manner or way, whether voluntarily or involuntarily,
without the prior written consent of Grantee being first obtained, which
consent may be withheld in Grantee's sole discretion, then the same shall
constitute an Event of Default hereunder and Grantee shall have the right,
at its option, to declare any or all of the indebtedness secured hereby,
irrespective of the maturity date specified in the Note, immediately due
and payable and to otherwise exercise any of its other rights and remedies
contained in ARTICLE III hereof. If such acceleration is during any period
when a prepayment fee is payable pursuant to the provisions set forth in
the Note, then, in addition to all of the foregoing, such prepayment fee
shall also then be immediately due and payable to the same end as though
Grantor were prepaying the entire indebtedness secured hereby on the date
of such acceleration. For the purposes of this Section: (i) in the event
either Grantor or any of its general partners or managing members is a
corporation or trust, the sale, conveyance, transfer or disposition of more
than 10% of the issued and outstanding capital stock of Grantor or any of
its general partners or of the beneficial interest of such trust (or the
issuance of new shares of capital stock in Grantor or any of its general
partners or managing members so that immediately after such issuance the
total capital stock then issued and outstanding is more than 110% of the
total immediately prior to such issuance) shall be deemed to be a transfer
of an interest in the Property; and (ii) in the event Grantor or any
general partner or managing member of Grantor is a limited or general
partnership, a joint venture or a limited liability company, a change in
the ownership interests in any general partner, any joint venturer or any
managing member, either voluntarily, involuntarily or otherwise, or the
sale, conveyance, transfer, disposition, alienation, hypothecation or
encumbering of all or any portion of the interest of any such general
partner, joint venturer or managing member in Grantor or such general
partner (whether in the form of a beneficial or partnership interest or in
the form of a power of direction, control or management, or otherwise),
shall be deemed to be a transfer of an interest in the Property.
Notwithstanding the foregoing, however, (i) limited partnership or non-
managing member interests in Grantor or in any general partner or managing
member of Grantor shall be freely transferable without the consent of
Grantee, (ii) any involuntary transfer caused by the death of Grantor or
any general partner, shareholder, joint venturer, or beneficial owner of a
trust shall not be an Event of Default under this Security Deed so long as
Grantor is reconstituted, if required, following such death and so long as
those persons responsible for the management of the Property remain
unchanged as a result of such death or any replacement management is
approved by Grantee and (iii) gifts for estate planning purposes of any
individual's interests in Grantor or in any of Grantor's general partners,
managing members or joint venturers to the spouse or any lineal descendant
of such individual, or to a trust for the benefit of any one or more of
such individual, spouse or lineal descendant, shall not be an Event of
Default under this Security Deed so long as Grantor is reconstituted, if
required, following such gift and so long as those persons responsible for
the management of the Property and Grantor remain unchanged following such
gift or any replacement management is approved by Grantee.
(b) Notwithstanding the foregoing provisions of this Section,
Grantee shall consent to one or more sales, conveyances or transfers of the
Property in its entirety (hereinafter, "SALE") to any person or entity
provided that each of the following terms and conditions are satisfied for
each such Sale:
(1) No Default or Event of Default is then continuing
hereunder or under any of the other Loan Documents;
(2) Grantor gives Grantee written notice of the terms of such
prospective Sale not less than sixty (60) days before the date on which
such Sale is scheduled to close and, concurrently therewith, gives Grantee
all such information concerning the proposed transferee of the Property
(hereinafter, "BUYER") as Grantee would require in evaluating an initial
extension of credit to a borrower and pays to Grantee a non-refundable
application fee in the amount of $5,000.00. Grantee shall have the right to
approve or disapprove the proposed Buyer. In determining whether to give
or withhold its approval of the proposed Buyer, Grantee shall consider the
Buyer's experience and track record in owning and operating facilities
similar to the Property, the Buyer's financial strength, the Buyer's
general business standing and the Buyer's relationships and experience with
contractors, vendors, tenants, lenders and other business entities;
PROVIDED, HOWEVER, that, notwithstanding Grantee's agreement to consider
the foregoing factors in determining whether to give or withhold such
approval, such approval shall be given or withheld based on what Grantee
determines to be commercially reasonable in Grantee's commercially
reasonable discretion and, if given, may be given subject to such
conditions as Grantee may deem appropriate;
(3) Grantor pays Grantee, concurrently with the closing of
such Sale, a non-refundable assumption fee in an amount equal to all out-
of-pocket costs and expenses, including, without limitation, attorneys'
fees, incurred by Grantee in connection with the Sale, plus an amount equal
to one percent (1.0%) of the then outstanding principal balance of the
Note;
(4) The Buyer assumes and agrees to pay the indebtedness
secured hereby subject to the provisions of SECTION 4.27 hereof and, prior
to or concurrently with the closing of such Sale, the Buyer executes,
without any cost or expense to Grantee, such documents and agreements as
Grantee shall reasonably require to evidence and effectuate said assumption
and delivers such legal opinions as Grantee may require;
(5) A party associated with the Buyer approved by Grantee in
its sole discretion assumes the obligations of the current indemnitor under
its guaranty or indemnity agreement and such party associated with the
Buyer executes, without any cost or expense to Grantee, a new guaranty or
indemnity agreement in form and substance satisfactory to Grantee and
delivers such legal opinions as Grantee may require;
(6) Grantor and the Buyer execute, without any cost or
expense to Grantee, new financing statements or financing statement
amendments and any additional documents reasonably requested by Grantee;
(7) Grantor delivers to Grantee, without any cost or expense
to Grantee, such endorsements to Grantee's title insurance policy, hazard
insurance endorsements or certificates and other similar materials as
Grantee may deem necessary at the time of the Sale, all in form and
substance satisfactory to Grantee, including, without limitation, an
endorsement or endorsements to Grantee's title insurance policy insuring
the lien of this Security Deed, extending the effective date of such policy
to the date of execution and delivery (or, if later, of recording) of the
assumption agreement referenced above in SUBPARAGRAPH (4) of this Section,
with no additional exceptions added to such policy, and insuring that fee
simple title to the Property is vested in the Buyer;
(8) Grantor executes and delivers to Grantee, without any
cost or expense to Grantee, a release of Grantee, its officers, directors,
employees and agents, from all claims and liability relating to the
transactions evidenced by the Loan Documents, through and including the
date of the closing of the Sale, which agreement shall be in form and
substance satisfactory to Grantee and shall be binding upon the Buyer;
(9) Subject to the provisions of SECTION 4.27 hereof, such
Sale is not construed so as to relieve Grantor of any personal liability
under the Note or any of the other Loan Documents for any acts or events
occurring or obligations arising prior to or simultaneously with the
closing of such Sale, and Grantor executes, without any cost or expense to
Grantee, such documents and agreements as Grantee shall reasonably require
to evidence and effectuate the ratification of said personal liability.
Grantor shall be released from and relieved of any personal liability under
the Note or any of the other Loan Documents for any acts or events
occurring or obligations arising after the closing of such Sale which are
not caused by or arising out of any acts or events occurring or obligations
arising prior to or simultaneously with the closing of such Sale;
(10) Such Sale is not construed so as to relieve any current
indemnitor of its obligations under any guaranty or indemnity agreement for
any acts or events occurring or obligations arising prior to or
simultaneously with the closing of such Sale, and each such current
indemnitor executes, without any cost or expense to Grantee, such documents
and agreements as Grantee shall reasonably require to evidence and
effectuate the ratification of each such guaranty and indemnity agreement.
Each such current indemnitor shall be released from and relieved of any of
its obligations under any guaranty or indemnity agreement executed in
connection with the loan secured hereby for any acts or events occurring or
obligations arising after the closing of such Sale which are not caused by
or arising out of any acts or events occurring or obligations arising prior
to or simultaneously with the closing of such Sale;
(11) The Buyer shall furnish, if the Buyer is a corporation,
partnership or other entity, all appropriate papers evidencing the Buyer's
capacity and good standing, and the qualification of the signers to execute
the assumption of the indebtedness secured hereby, which papers shall
include certified copies of all documents relating to the organization and
formation of the Buyer and of the entities, if any, which are partners of
the Buyer. The Buyer and such constituent partners, members or
shareholders of Buyer (as the case may be), as Grantee shall require, shall
be single purpose, "bankruptcy remote" entities, whose formation documents
shall be approved by counsel to Grantee. The one (1) individual
recommended by the Grantor shall serve as an independent director of the
Buyer (if the Buyer is a corporation) or the Buyer's corporate general
partner or as independent member or, as manager, of Buyer if the Buyer is a
limited liability company. The consent of such independent party shall be
required for, among other things, any merger, consolidation, dissolution,
bankruptcy or insolvency of such independent party or of the Buyer; and
(12) Grantor delivers to Grantee a written statement from the
applicable rating agency to the effect that the Sale will not result in a
downgrading, withdrawal or qualification of the respective ratings in
effect immediately prior to such Sale for any securities issues in
connection with a Secondary Market Transaction (as hereinafter defined).
1.14 PAYMENT OF UTILITIES, ASSESSMENTS, CHARGES, ETC. Grantor
shall pay when due all utility charges which are incurred by Grantor or
which may become a charge or lien against any portion of the Property for
gas, electricity, water and sewer services furnished to the Real Estate
and/or the Improvements and all other assessments or charges of a similar
nature, or assessments payable pursuant to any restrictive covenants,
whether public or private, affecting the Real Estate and/or the
Improvements or any portion thereof, whether or not such assessments or
charges are or may become liens thereon.
1.15 ACCESS PRIVILEGES AND INSPECTIONS. Grantee and the agents,
representatives and employees of Grantee shall, subject to the rights of
tenants, have full and free access to the Real Estate and the Improvements
and any other location where books and records concerning the Property are
kept at all reasonable times for the purposes of inspecting the Property
and of examining, copying and making extracts from the books and records of
Grantor relating to the Property. Grantor shall lend assistance to all
such agents, representatives and employees of Grantee.
1.16 WASTE; ALTERATION OF IMPROVEMENTS. Grantor shall not
commit, suffer or permit any waste on the Property nor take any actions
that might invalidate any insurance carried on the Property. Grantor shall
maintain the Property in good condition and repair. No part of the
Improvements may be removed, demolished or materially altered, without the
prior written consent of Grantee. Without the prior written consent of
Grantee, Grantor shall not commence construction of any improvements on the
Real Estate other than improvements required for the maintenance or repair
of the Property.
1.17 ZONING. Without the prior written consent of Grantee,
Grantor shall not seek, make, suffer, consent to or acquiesce in any change
in the zoning or conditions of use of the Real Estate or the Improvements.
Grantor shall comply with and make all payments required under the
provisions of any covenants, conditions or restrictions affecting the Real
Estate or the Improvements. Grantor shall comply with all existing and
future requirements of all governmental authorities having jurisdiction
over the Property. Grantor shall keep all licenses, permits, franchises
and other approvals necessary for the operation of the Property in full
force and effect. Grantor shall operate the Property as an apartment
development for so long as the indebtedness secured hereby is outstanding.
If, under applicable zoning provisions, the use of all or any part of the
Real Estate or the Improvements is or becomes a nonconforming use, Grantor
shall not cause or permit such use to be discontinued or abandoned without
the prior written consent of Grantee. Further, without Grantee's prior
written consent, Grantor shall not file or subject any part of the Real
Estate or the Improvements to any declaration of condominium or
co-operative or convert any part of the Real Estate or the Improvements to
a condominium, co-operative or other form of multiple ownership and
governance.
1.18 FINANCIAL STATEMENTS AND BOOKS AND RECORDS. Grantor shall
keep accurate books and records of account of the Property and its own
financial affairs sufficient to permit the preparation of financial
statements therefrom in accordance with generally accepted accounting
principles. Grantee and its duly authorized representatives shall have the
right to examine, copy and audit Grantor's records and books of account at
all reasonable times. So long as this Security Deed continues in effect,
Grantor shall provide to Grantee, in addition to any other financial
statements required hereunder or under any of the other Loan Documents, the
following financial statements and information, all of which must be
certified to Grantee as being true and correct by Grantor or the person or
entity to which they pertain, as applicable, be prepared in accordance with
generally accepted accounting principles consistently applied and be in
form and substance acceptable to Grantee:
(a) copies of all tax returns filed by Grantor, within thirty
(30) days after the date of filing;
(b) monthly operating statements for the Property within ten (10)
days after the end of each month during the first twelve months of the term
of the loan secured hereby;
(c) quarterly operating statements for the Property, within
thirty (30) days after the end of each calendar quarter;
(d) annual balance sheets for the Property and annual financial
statements for Grantor, each principal or general partner in Grantor, and
each indemnitor and guarantor under any indemnity or guaranty executed in
connection with the loan secured hereby, within ninety (90) days after the
end of each calendar year; and
(e) such other information with respect to the Property, Grantor,
the principals or general partners in Grantor, and each indemnitor and
guarantor under any indemnity or guaranty executed in connection with the
loan secured hereby, which may be requested from time to time by Grantee,
within a reasonable time after the applicable request.
If any of the aforementioned materials are not furnished to Grantee within
the applicable time periods or Grantee is dissatisfied with the contents of
any of the foregoing, in addition to any other rights and remedies of
Grantee contained herein, Grantee shall have the right, but not the
obligation after notice and a 30 day right to cure, to obtain the same by
means of an audit by an independent certified public accountant selected by
Grantee, in which event Grantor agrees to pay, or to reimburse Grantee for,
any expense of such audit and further agrees to provide all necessary
information to said accountant and to otherwise cooperate in the making of
such audit.
1.19 FURTHER DOCUMENTATION.(a) Grantor shall, on the request of
Grantee and at the expense of Grantor: (a) promptly correct any defect,
error or omission which may be discovered in the contents of this Security
Deed or in the contents of any of the other Loan Documents; (b) promptly
execute, acknowledge, deliver and record or file such further instruments
(including, without limitation, further mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements
and assignments of rents or leases) and promptly do such further acts as
may be necessary, desirable or proper to carry out more effectively the
purposes of this Security Deed and the other Loan Documents and to subject
to the liens and security interests hereof and thereof any property
intended by the terms hereof and thereof to be covered hereby and thereby,
including specifically, but without limitation, any renewals, additions,
substitutions, replacements or appurtenances to the Property; (c) promptly
execute, acknowledge, deliver, procure and record or file any document or
instrument (including specifically any financing statement) deemed
advisable by Grantee to protect, continue or perfect the liens or the
security interests hereunder against the rights or interests of third
persons; and (d) promptly furnish to Grantee, upon Grantee's request, a
duly acknowledged written statement and estoppel certificate addressed to
such party or parties as directed by Grantee and in form and substance
supplied by Grantee, setting forth all amounts due under the Note, stating
whether any Default or Event of Default has occurred hereunder, stating
whether any offsets or defenses exist against the indebtedness secured
hereby and containing such other matters as Grantee may reasonably require.
(b) Grantor acknowledges that Grantee and its successors and
assigns may effectuate a Secondary Market Transaction. Grantor shall
cooperate in good faith with Grantee in effecting any such Secondary Market
Transaction and shall cooperate in good faith to implement all requirements
imposed by any rating agency involved in any Secondary Market Transaction
including, without limitation, all structural or other changes to the
indebtedness secured hereby, modifications to any documents evidencing or
securing the loan; provided, however, that the Grantor shall not be
required to modify any documents evidencing or securing the indebtedness
secured hereby which would modify (A) the interest rate payable under the
Note, (B) the stated maturity of the Note, (C) the amortization of
principal of the Note, or (D) any other material economic term of the
indebtedness secured hereby. Grantor shall provide such information, and
documents relating to Grantor, any guarantor or indemnitor, the Property
and any tenants of the Improvements as Grantee may reasonably request in
connection with such Secondary Market Transaction. Grantor shall make
available to Grantee all information concerning its business and operations
that Grantee may reasonably request. Grantee shall be permitted to share
all such information with the investment banking firms, rating agencies,
accounting firms, law firms and other third-party advisory firms involved
with the Loan Documents or the applicable Secondary Market Transaction. It
is understood that the information provided by Grantor to Grantee may
ultimately be incorporated into the offering documents for the Secondary
Market Transaction and thus various investors may also see some or all of
the information. Grantee and all of the aforesaid third-party advisors and
professional firms shall be entitled to rely on the information supplied
by, or on behalf of, Grantor and Grantor indemnifies Grantee as to any
losses, claims, damages or liabilities that arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in such information or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated in such information or necessary in order to make the statements
in such information, or in light of the circumstances under which they were
made, not misleading. Grantee may publicize the existence of the
indebtedness secured hereby in connection with its marketing for a
Secondary Market Transaction or otherwise as part of its business
development. For purposes hereof, a "Secondary Market Transaction" shall
be (a) any sale of the Security Deed, Note and other Loan Documents to one
or more investors as a whole loan; (b) a participation of the indebtedness
secured hereby to one or more investors, (c) any deposit of the Security
Deed, Note and other Loan Documents with a trust or other entity which may
sell certificates or other instruments to investors evidencing an ownership
interest in the assets of such trust or other entity, or (d) any other sale
or transfer of the indebtedness secured hereby or any interest therein to
one or more investors.
1.20 PAYMENT OF COSTS; REIMBURSEMENT TO GRANTEE. Grantor shall
pay all costs and expenses of every character incurred in connection with
the closing of the loan evidenced by the Note and secured hereby or
otherwise attributable or chargeable to Grantor as the owner of the
Property, including, without limitation, appraisal fees, recording fees,
documentary, stamp, mortgage or intangible taxes, brokerage fees and
commissions, title policy premiums and title search fees, uniform
commercial code/tax lien/litigation search fees, escrow fees and reasonable
attorneys' fees. If Grantor defaults in any such payment, which default is
not cured within any applicable grace or cure period, Grantee may pay the
same and Grantor shall reimburse Grantee on demand for all such costs and
expenses incurred or paid by Grantee, together with such interest thereon
at the Default Interest Rate from and after the date of Grantee's making
such payment until reimbursement thereof by Grantor. Any such sums
disbursed by Grantee, together with such interest thereon, shall be
additional indebtedness of Grantor secured by this Security Deed and by all
of the other Loan Documents securing all or any part of the indebtedness
evidenced by the Note. Further, Grantor shall promptly notify Grantee in
writing of any litigation or threatened litigation affecting the Property,
or any other demand or claim which, if enforced, could impair or threaten
to impair Grantee's security hereunder. Without limiting or waiving any
other rights and remedies of Grantee hereunder, if Grantor fails to perform
any of its covenants or agreements contained in this Security Deed or in
any of the other Loan Documents and such failure is not cured within any
applicable grace or cure period, or if any action or proceeding of any kind
(including, but not limited to, any bankruptcy, insolvency, arrangement,
reorganization or other debtor relief proceeding) is commenced which might
affect Grantee's interest in the Property or Grantee's right to enforce its
security, then Grantee may, at its option, with or without notie to
Grantor, make any appearances, disburse any sums and take any actions as
may be necessary or desirable to protect or enforce the security of this
Security Deed or to remedy the failure of Grantor to perform its covenants
and agreements (without, however, waiving any default of Grantor). Grantor
agrees to pay on demand all expenses of Grantee incurred with respect to
the foregoing (including, but not limited to, reasonable fees and
disbursements of counsel), together with interest thereon at the Default
Interest Rate from and after the date on which Grantee incurs such expenses
until reimbursement thereof by Grantor. Any such expenses so incurred by
Grantee, together with interest thereon as provided above, shall be
additional indebtedness of Grantor secured by this Security Deed and by all
of the other Loan Documents securing all or any part of the indebtedness
evidenced by the Note. The necessity for any such actions and of the
amounts to be paid shall be determined by Grantee in its discretion.
Grantee is hereby empowered to enter and to authorize others to enter upon
the Property or any part thereof for the purpose of performing or observing
any such defaulted term, covenant or condition without thereby becoming
liable to Grantor or any person in possession holding under Grantor.
Grantor hereby acknowledges and agrees that the remedies set forth in this
Section 1.20 shall be exercisable by Grantee, and any and all payments made
or costs or expenses incurred by Grantee in connection therewith shall be
secured hereby and shall be, without demand, immediately repaid by Grantor
with interest thereon at the Default Interest Rate, notwithstanding the
fact that such remedies were exercised and such payments made and costs
incurred by Grantee after the filing by Grantor of a voluntary case or the
filing against Grantor of an involuntary case pursuant to or within the
meaning of the Bankruptcy Reform Act of 1978, as amended, Title 11 U.S.C.,
or after any similar action pursuant to any other debtor relief law whether
statutory, common law, case law or otherwise) of any jurisdiction
whatsoever, now or hereafter, in effect, which may be or become applicable
to Grantor, Grantee, any guarantor or indemnitor, the secured indebtedness
or any of the Loan Documents. Grantor hereby indemnifies and holds Grantee
harmless from and against all loss, cost and expenses with respect to any
Event of Default hereof, any liens (i.e., judgments, mechanics' and
materialmen's liens, or otherwise), charges and encumbrances filed against
the Property, and from any claims and demands for damages or injury,
including claims for property damage, personal injury or wrongful death,
arising out of or in connection with any accident or fire or other casualty
on the Real Estate or the Improvements or any nuisance made or suffered
thereon, including, in any case, attorneys' fees, costs and expenses as
aforesaid, whether at pretrial, trial or appellate level, and such
indemnity shall survive payment in full of the indebtedness secured hereby.
This Section shall not be construed to require Grantee to incur any
expenses, make any appearances or take any actions.
1.21 SECURITY INTEREST. This Security Deed is also intended to
encumber and create a security interest in, and Grantor hereby grants to
Grantee a security interest in all sums on deposit with Grantee pursuant to
the provisions of Sections 1.6, 1.7, 1.8 and 1.35 hereof or any other
Section hereof and all fixtures, chattels, accounts, equipment, inventory,
contract rights, general intangibles and other personal property included
within the Property, all renewals, replacements of any of the
aforementioned items, or articles in substitution therefor or in addition
thereto or the proceeds thereof (said property is hereinafter referred to
collectively as the "Collateral"), whether or not the same shall be
attached to the Real Estate or the Improvements in any manner. It is
hereby agreed that to the extent permitted by law, all of the foregoing
property is to be deemed and held to be a part of and affixed to the Real
Estate and the Improvements. The foregoing security interest shall also
cover Grantor's leasehold interest in any of the foregoing property which
is leased by Grantor. Notwithstanding the foregoing, all of the foregoing
property shall be owned by Grantor and no material leasing or installment
sales or other financing or title retention agreement in connection
therewith shall be permitted without the prior written approval of Grantee.
Grantor shall, from time to time upon the request of Grantee, supply
Grantee with a current inventory of all of the property in which Grantee is
granted a security interest hereunder, in such detail as Grantee may
require. Grantor shall promptly replace all of the Collateral subject to
the lien or security interest of this Security Deed when worn or obsolete
with Collateral comparable to the worn out or obsolete Collateral when new
and will not, without the prior written consent of Grantee, remove from the
Real Estate or the Improvements any of the Collateral subject to the lien
or security interest of this Security Deed except such as is replaced by an
article of equal suitability and value a above provided, owned by Grantor
free and clear of any lien or security interest except that created by this
Security Deed and the other Loan Documents and except as otherwise
expressly permitted by the terms of Section 1.13 of this Security Deed.
All of the Collateral shall be kept at the location of the Real Estate
except as otherwise required by the terms of the Loan Documents. Grantor
shall not use any of the Collateral in violation of any applicable statute,
ordinance or insurance policy.
1.22 SECURITY AGREEMENT. This Security Deed constitutes a
security agreement between Grantor and Grantee with respect to the
Collateral in which Grantee is granted a security interest hereunder, and,
cumulative of all other rights and remedies of Grantee hereunder, Grantee
shall have all of the rights and remedies of a secured party under any
applicable Uniform Commercial Code. Grantor hereby agrees to execute and
deliver on demand and hereby irrevocably constitutes and appoints Grantee
the attorney-in-fact of Grantor to execute and deliver and, if appropriate,
to file with the appropriate filing officer or office such security
agreements, financing statements, continuation statements or other
instruments as Grantee may request or require in order to impose, perfect
or continue the perfection of the lien or security interest created hereby.
Except with respect to Rents and Profits to the extent specifically
provided herein to the contrary, Grantee shall have the right of possession
of all cash, securities, instruments, negotiable instruments, documents,
certificates and any other evidences of cash or other property or evidences
of rights to cash rather than property, which are now or hereafter a part
of the Property and Grantor shall promptly deliver the same to Grantee,
endorsed to Grantee, without further notice from Grantee. Grantor agrees
to furnish Grantee with notice of any change in the name, identity,
organizational structure, residence, or principal place of business or
mailing address of Grantor within ten (10) days of the effective date of
any such change. Upon the occurrence of any Event of Default, Grantee
shall have the rights and remedies as prescribed in this Security Deed, or
as prescribed by general law, or as prescribed by any applicable Uniform
Commercial Code, all at Grantee's election. Any disposition of the
Collateral may be conducted by an employee or agent of Grantee. Any
person, including both Grantor and Grantee, shall be eligible to purchase
any part or all of the Collateral at any such disposition. xpenses of
retaking, holding, preparing for sale, selling or the like (including,
without limitation, Grantee's attorneys' fees and legal expenses), together
with interest thereon at the Default Interest Rate from the date incurred
by Grantee until actually paid by Grantor, shall be paid by Grantor on
demand and shall be secured by this Security Deed and by all of the other
Loan Documents securing all or any part of the indebtedness evidenced by
the Note. Grantee shall have the right to enter upon the Real Estate and
the Improvements or any real property where any of the property which is
the subject of the security interest granted herein is located to take
possession of, assemble and collect the same or to render it unusable, or
Grantor, upon demand of Grantee, shall assemble such property and make it
available to Grantee at the Real Estate, a place which is hereby deemed to
be reasonably convenient to Grantee and Grantor. Grantee shall give
Grantor at least ten (10) days' prior written notice of the time and place
of any public sale of such property or of the time of or after which any
private sale or any other intended disposition thereof is to be made, and
if such notice is sent to Grantor, as the same is provided for the mailing
of notices herein, it is hereby deemed that such notice shall be and is
reasonable notice to Grantor. No such notice is necessary for any such
property which is perishable, threatens to decline speedily in value or is
of a type customarily sold on a recognized market. Any sale made pursuant
to the provisions of this Section shall be deemed to have been a public
sale conducted in a commercially reasonable manner if held
contemporaneously with the foreclosure sale as provided in Section 3.1(e)
hereof upon giving the same notice with respect to the sale of the Property
hereunder as is required under said Section 3.1(e). Furthermore, to the
extent permitted by law, in conjunction with, in addition to or in
substitution for the rights and remedies available to Grantee pursuant to
an applicable Uniform Commercial Code:
(a) In the event of a foreclosure sale, the Property may, at the
option of Grantee, be sold as a whole; and
(b) It shall not be necessary that Grantee take possession of the
aforementioned Collateral, or any part thereof, prior to the time that any
sale pursuant to the provisions of this Section is conducted and it shall
not be necessary that said Collateral, or any part thereof, be present at
the location of such sale; and
(c) Grantee may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale held by
Grantee, including the sending of notices and the conduct of the sale, but
in the name and on behalf of Grantee.
The name and address of Grantor (as Debtor under any applicable
Uniform Commercial Code) are:
Greentree LLC
c/o Xxxxxx X. Xxxxx, CFO
000 Xxxxx Xxxxxx, 0{xx} Xxxxx
Xxxxxxx, Xxxxxxx 00000
The name and address of Grantee (as Secured Party under any
applicable Uniform Commercial Code) are:
First Union National Bank
One First Union Center, DC6
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
1.23 EASEMENTS AND RIGHTS OF WAY. Grantor shall not grant any
easement or right-of-way with respect to all or any portion of the Real
Estate or the Improvements without the prior written consent of Grantee.
The purchaser at any foreclosure sale hereunder may, at its discretion,
disaffirm any easement or right-of-way granted in violation of any of the
provisions of this Security Deed and may take immediate possession of the
Property free from, and despite the terms of, such grant of easement or
right-of-way. If Grantee consents to the grant of an easement or
right-of-way, Grantee agrees to grant such consent provided that Grantee is
paid a standard review fee together with all other expenses, including,
without limitation, attorneys' fees, incurred by Grantee in the review of
Grantor's request and in the preparation of documents effecting the
subordination.
1.24 COMPLIANCE WITH LAWS. Grantor shall at all times comply
with all statutes, ordinances, orders, regulations and other governmental
or quasi-governmental requirements and private covenants now or hereafter
relating to the ownership, construction, use or operation of the Property,
including, but not limited to, those concerning employment and compensation
of persons engaged in operation and maintenance of the Property and any
environmental or ecological requirements, even if such compliance shall
require structural changes to the Property; provided, however, that,
Grantor may, upon providing Grantee with security satisfactory to Grantee,
proceed diligently and in good faith to contest the validity or
applicability of any such statute, ordinance, regulation or requirement so
long as during such contest the Property shall not be subject to any lien,
charge, fine or other liability and shall not be in danger of being
forfeited, lost or closed. Grantor shall not use or occupy, or allow the
use or occupancy of, the Property in any manner which violates any Lease of
or any other agreement applicable to the Property or any applicable law,
rule, regulation or order or which constitutes a public or private nuisance
or which makes void, voidable or cancelable, or increases the premium of,
any insurance then in force with respect thereto.
1.25 ADDITIONAL TAXES. In the event of the enactment after this
date of any law of the state where the Property is located or of any other
governmental entity deducting from the value of the Property for the
purpose of taxing any lien, conveyance or security interest thereon or
thereof, or imposing upon Grantee the payment of the whole or any part of
the taxes or assessments or charges of liens herein required to be paid by
Grantor, or changing in any way the laws relating to the taxation of deeds
of trust, security deeds, mortgages or security agreements or debts secured
by mortgages, security deeds, or security agreements or the interest of the
Grantee or secured party in the property covered thereby, or the manner of
collection of such taxes, so as to adversely affect this Security Deed or
the indebtedness secured hereby or Grantee, then, and in any such event,
Grantor, upon demand by Grantee, shall pay such taxes, assessments, charges
or liens, or reimburse Grantee therefor; provided, however, that if in the
opinion of counsel for Grantee (a) it might be unlawful to require Grantor
to make such payment, or (b) the making of such payment might result in the
imposition of interest beyond the maximum amount permitted by law, then and
in either such event, Grantee may elect, by notice in writing given to
Grantor, to declare all of the indebtedness secured hereby to be and become
due and payable in full thirty (30) days from the giving of such notice.
1.26 SECURED INDEBTEDNESS. It is understood and agreed that this
Security Deed shall secure payment of not only the indebtedness evidenced
by the Note but also any and all substitutions, replacements, renewals and
extensions of the Note, any and all indebtedness and obligations arising
pursuant to the terms hereof and any and all indebtedness and obligations
arising pursuant to the terms of any of the other Loan Documents, all of
which indebtedness is equally secured with and has the same priority as any
amounts advanced as of the date hereof. It is agreed that any future
advances made by Grantee to or for the benefit of Grantor from time to time
under this Security Deed or the other Loan Documents and whether or not
such advances are obligatory or are made at the option of Grantee, or
otherwise, made for any purpose, within twenty (20) years from the date
hereof, and all interest accruing thereon, shall be equally secured by this
Security Deed and shall have the same priority as all amounts, if any,
advanced as of the date hereof and shall be subject to all of the terms and
provisions of this Security Deed.
1.27 GRANTOR'S WAIVERS. To the full extent permitted by law,
Grantor agrees that Grantor shall not at any time insist upon, plead, claim
or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, moratorium or extension,
or any law now or hereafter in force providing for the reinstatement of the
indebtedness secured hereby prior to any sale of the Property to be made
pursuant to any provisions contained herein or prior to the entering of any
decree, judgment or order of any court of competent jurisdiction, or any
right under any statute to redeem all or any part of the Property so sold.
Grantor, for Grantor and Grantor's successors and assigns, and for any and
all persons ever claiming any interest in the Property, to the full extent
permitted by law, hereby knowingly, intentionally and voluntarily with and
upon the advice of competent counsel: (a) waives, releases, relinquishes
and forever forgoes all rights of valuation, appraisement, stay of
execution, reinstatement and notice of election or intention to mature or
declare due the secured indebtedness (except such notices as are
specifically provided for herein); (b) waives, releases, relinquishes and
forever forgoes all right to a marshalling of the assets of Grantor,
including the Property, to a sale in the inverse order of alienation, or to
direct the order in which any of the Property shall be sold in the event of
foreclosure of the liens and security interests hereby created and agrees
that any court having jurisdiction to foreclose such liens and security
interests may order the Property sold as an entirety; and (c) waives,
releases, relinquishes and forever forgoes all rights and periods of
redemption provided under applicable law. To the full extent permitted by
law, Grantor shall not have or assert any right under any statute or rule
of law pertaining to the exemption of homestead or other exemption under
any federal, state or local law now or hereafter in effect, the
administration of estates of decedents or oher matters whatever to defeat,
reduce or affect the right of Grantee under the terms of this Security Deed
to a sale of the Property, for the collection of the secured indebtedness
without any prior or different resort for collection, or the right of
Grantee under the terms of this Security Deed to the payment of the
indebtedness secured hereby out of the proceeds of sale of the Property in
preference to every other claimant whatever. Further, Grantor hereby
knowingly, intentionally and voluntarily, with and upon the advice of
competent counsel, waives, releases, relinquishes and forever forgoes all
present and future statutes of limitations as a defense to any action to
enforce the provisions of this Security Deed or to collect any of the
indebtedness secured hereby the fullest extent permitted by law. Grantor
covenants and agrees that upon the commencement of a voluntary or
involuntary bankruptcy proceeding by or against Grantor, Grantor shall not
seek a supplemental stay or otherwise shall not seek pursuant to 11 U.S.C.
section 105 or any other provision of the Bankruptcy Reform Act of 1978,
as amended, or any other debtor relief law (whether statutory, common law,
case law, or otherwise) of any jurisdiction whatsoever, now or hereafter in
effect, which may be or become applicable, to stay, interdict, condition,
reduce or inhibit the ability of Grantee to enforce any rights of Grantee
against any guarantor or indemnitor of the secured obligations or any other
party liable with respect thereto by virtue of any indemnity, guaranty or
otherwise.
1.28 SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) GRANTOR, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, (i) SUBMITS TO PERSONAL JURISDICTION IN THE STATE IN
WHICH THE PROPERTY IS LOCATED OVER ANY SUIT, ACTION OR PROCEEDING BY ANY
PERSON ARISING FROM OR RELATING TO THE NOTE, THIS SECURITY DEED OR ANY
OTHER OF THE LOAN DOCUMENTS, (ii) AGREES THAT ANY SUCH ACTION, SUIT OR
PROCEEDING MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION OVER THE COUNTY IN WHICH THE PROPERTY IS LOCATED, (iii)
SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND, (iv) TO THE FULLEST EXTENT
PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING ANY ACTION, SUIT OR
PROCEEDING IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF
GRANTEE TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM).
GRANTOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO GRANTOR AT THE ADDRESS FOR NOTICES
DESCRIBED IN SECTION 4.5 HEREOF, AND CONSENTS AND AGREES THAT SUCH SERVICE
SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING
HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY
OTHER MANNER PERMITTED BY LAW).
(b) GRANTEE AND GRANTOR, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE
OF COMPETENT COUNSEL, WAIVE, RELINQUISH AND FOREVER FORGO THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN
ANY WAY RELATING TO THE INDEBTEDNESS SECURED HEREBY OR ANY CONDUCT, ACT OR
OMISSION OF GRANTEE OR GRANTOR, OR ANY OF THEIR DIRECTORS, OFFICERS,
PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS
AFFILIATED WITH GRANTEE OR GRANTOR, IN EACH OF THE FOREGOING CASES, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE.
1.29 CONTRACTUAL STATUTE OF LIMITATIONS. Grantor hereby agrees
that any claim or cause of action by Grantor against Grantee, or any of
Grantee's directors, officers, employees, agents, accountants or attorneys,
based upon, arising from or relating to the indebtedness secured hereby, or
any other matter, cause or thing whatsoever, whether or not relating
thereto, occurred, done, omitted or suffered to be done by Grantee or by
Grantee's directors, officers, employees, agents, accountants or attorneys,
whether sounding in contract or in tort or otherwise, shall be barred
unless asserted by Grantor by the commencement of an action or proceeding
in a court of competent jurisdiction by the filing of a complaint within
one (1) year after Grantor first acquires or reasonably should have
acquired knowledge of the first act, occurrence or omission upon which such
claim or cause of action, or any part thereof, is based and service of a
summons and complaint on an officer of Grantee or any other person
authorized to accept service of process on behalf of Grantee, within thirty
(30) days thereafter. Grantor agrees that such one (1) year period of time
is reasonable and sufficient time for a borrower to investigate and act
upon any such claim or cause of action. The one (1) year period provided
herein shall not be waived, tolled or extended except by the specific
written agreement of Grantee. This provision shall survive any termination
of this Security Deed or any of the other Loan Documents.
1.30 MANAGEMENT. The management of the Property shall be by
either: (a) Grantor or an entity affiliated with Grantor approved by
Grantee for so long as Grantor or said affiliated entity is managing the
Property in a first class manner; or (b) a professional property management
company approved by Grantee. Such management by an affiliated entity or a
professional property management company shall be pursuant to a written
agreement approved by Grantee. In no event shall any manager be removed or
replaced or the terms of any management agreement modified or amended
without the prior written consent of Grantee. After an Event of Default or
a default under any management contract then in effect, which default is
not cured within any applicable grace or cure period, Grantee shall have
the right to terminate, or to direct Grantor to terminate, such management
contract upon thirty (30) days' notice and to retain, or to direct Grantor
to retain, a new management agent approved by Grantee. All Rents and
Profits generated by or derived from the Property shall first be utilized
solely for current expenses directly attributable to the ownership and
operation of the Property, including, without limitation, current expenses
relating to Grantor's liabilities and obligations with respect to this
Security Deed and the other Loan Documents, and none of the Rents and
Profits generated by or derived from the Property shall be diverted by
Grantor and utilized for any other purposes unless all such current
expenses attributable to the ownership and operation of the Property have
been fully paid and satisfied.
1.31 HAZARDOUS WASTE AND OTHER SUBSTANCES.
(a) Except for those matters disclosed in the environmental
reports furnished by Grantor to Grantee, Grantor hereby represents and
warrants to Grantee that, as of the date hereof: (i) to the best of
Grantor's knowledge, information and belief, the Property is not in direct
or indirect violation of any local, state or federal law, rule or
regulation pertaining to environmental regulation, contamination or
clean-up (collectively, "Environmental Laws"), including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. section 9601 ET SEQ. and 40 CFR
section 302.1 ET SEQ.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. section 6901 ET SEQ.), the Federal Water Pollution Control Act
(33 U.S.C. section 1251 ET SEQ. and 40 CFR section 116.1 ET SEQ.), those
relating to lead based paint, and the Hazardous Materials Transportation
Act (49 U.S.C. section 5101 ET SEQ.), the Georgia Hazardous Waste
Management Act, as amended, O.C.G.A. section 12-8-60 ET SEQ., the Georgia
Oil or Hazardous Materials Spills or Releases Act, as amended, O.C.G.A.
section 12-14-1 ET SEQ., the Georgia Comprehensive Solid Waste Management
Act, as amended, O.C.G.A. section 12-8-20 ET SEQ., the Georgia Asbestos
Safety Act, as amended, O.C.G.A. section 12-12-1 ET SEQ., the Georgia
Underground Storage Tank Act, as amended, O.C.G.A. section 12-13-1 ET
SEQ., and the regulations promulgated pursuant to said laws, all as
amended; (ii) no hazardous, toxic or harmful substances, wastes, materials,
pollutants or contaminants (including, without limitation, asbestos, lead
based paint, polychlorinated biphenyls, petroleum products, flammable
explosives, radioactive materials, infectious substances or raw materials
which include hazardous constituents) or any other substances or materials
which are included under or regulated by Environmental Laws (collectively,
"Hazardous Substances") are located on or have been handled, generated,
stored, processed or disposed of on or released or discharged from the
Property (including underground contamination) except for those substances
used by Grantor in the ordinary course of its business and in compliance
with all Environmental Laws; (iii) the Property is not subject to any
private or governmental lien or judicial or administrative notice or action
relating to Hazardous Substances; (iv) there are no existing or closed
underground storage tanks or other underground storage receptacles for
Hazardous Substances on the Property; (v) Grantor has received no notice
of, and to the best of Grantor's knowledge and belief, there exists no
investigation, action, proceeding or claim by any agency, authority or unit
of government or by any third party which could result in any liability,
penalty, sanction or judgment under any Environmental Laws with respect to
any condition, use or operation of the Property nor does Grantor know of
any basis for such a claim; and (vi) Grantor has received no notice of and,
to the best of Grantor's knowledge and belief, there has been no claim by
any party that any use, operation or condition of the Property has caused
any nuisance or any other liability or adverse condition on any other
property nor does Grantor know of any basis for such a claim.
(b) Grantor shall keep or cause the Property to be kept free from
Hazardous Substances (except those substances used by Grantor in the
ordinary course of its business and in compliance with all Environmental
Laws) and in compliance with all Environmental Laws, shall not install or
use any underground storage tanks, shall expressly prohibit the use,
generation, handling, storage, production, processing and disposal of
Hazardous Substances by all tenants of space in the Improvements, and,
without limiting the generality of the foregoing, during the term of this
Security Deed, shall not install in the Improvements or permit to be
installed in the Improvements asbestos or any substance containing
asbestos.
(c) Grantor shall promptly notify Grantee if Grantor shall become
aware of the possible existence of any Hazardous Substances on the Property
or if Grantor shall become aware that the Property is or may be in direct
or indirect violation of any Environmental Laws. Further, immediately upon
receipt of the same, Grantor shall deliver to Grantee copies of any and all
orders, notices, permits, applications, reports, and other communications,
documents and instruments pertaining to the actual, alleged or potential
presence or existence of any Hazardous Substances at, on, about, under,
within, near or in connection with the Property. Grantor shall, promptly
and when and as required by applicable Environmental Laws, at Grantor's
sole cost and expense, take all actions as shall be necessary or advisable
for the clean-up of any and all portions of the Property or other affected
property, including, without limitation, all investigative, monitoring,
removal, containment and remedial actions in accordance with all applicable
Environmental Laws (and in all events in a manner satisfactory to Grantee),
and shall further pay or cause to be paid, at no expense to Grantee, all
clean-up, administrative and enforcement costs of applicable governmental
agencies which may be asserted against the Property. In the event Grantor
fails to do so, Grantee may, but shall not be obligated to, cause the
Property or other affected property to be freed from any Hazardous
Substances or otherwise brought into conformance with Environmental Laws
and any and all costs and expenses incurred by Grantee in connection
therewith, together with interest thereon at the Default Interest Rate from
the date incurred by Grantee until actually paid by Grantor, shall be
immediately paid by Grantor on demand and shall be secured by this Security
Deed and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. Grantor hereby grants to Grantee and
its agents and employees access to the Property and a license to removeany
items deemed by Grantee to be Hazardous Substances and to do all things
Grantee shall deem necessary to bring the Property in conformance with
Environmental Laws. Grantor covenants and agrees, at Grantor's sole cost
and expense, to indemnify, defend (at trial and appellate levels, and with
attorneys, consultants and experts acceptable to Grantee), and hold Grantee
harmless from and against any and all liens, damages, losses, liabilities,
obligations, settlement payments, penalties, assessments, citations,
directives, claims, litigation, demands, defenses, judgments, suits,
proceedings, costs, disbursements or expenses of any kind or of any nature
whatsoever (including, without limitation, reasonable attorneys',
consultants' and experts' fees and disbursements actually incurred in
investigating, defending, settling or prosecuting any claim, litigation or
proceeding) which may at any time be imposed upon, incurred by or asserted
or awarded against Grantee or the Property, and arising directly or
indirectly from or out of: (i) the presence, release or threat of release
of any Hazardous Substances on, in, under or affecting all or any portion
of the Property or any surrounding areas, regardless of whether or not
caused by or within the control of Grantor; (ii) the violation of any
Environmental Laws relating to or affecting the Property, whether or not
caused by or within the control of Grantor; (iii) the failure by Grantor to
comply fully with the terms and conditions of this Section 1.31; (iv) the
breach of any representation or warranty contained in this Section 1.31; or
(v) the enforcement of this Section 1.31, including, without limitation,
the cost of assessment, containment and/or removal of any and all Hazardous
Substances from all or any portion of the Property or any surrounding
areas, the cost of any actions taken in response to the presence, release
or threat of release of any Hazardous Substances on, in, under or affecting
any portion of the Property or any surrounding areas to prevent or minimize
uch release or threat of release so that it does not migrate or otherwise
cause or threaten danger to present or future public health, safety,
welfare or the environment, and costs incurred to comply with the
Environmental Laws in connection with all or any portion of the Property or
any surrounding areas. The indemnity set forth in this Section 1.31(c)
shall also include any diminution in the value of the security afforded by
the Property or any future reduction in the sales price of the Property by
reason of any matter set forth in this Section 1.31(c). Grantee's rights
under this Section shall survive payment in full of the indebtedness
secured hereby and shall be in addition to all other rights of Grantee
under this Security Deed, the Note and the other Loan Documents.
(d) Upon Grantee's request, at any time after the occurrence of
an Event of Default hereunder or at such other time as Grantee has
reasonable grounds to believe that Hazardous Substances are or have been
released, stored or disposed of on or around the Property or that the
Property may be in violation of the Environmental Laws, Grantor shall
provide, at Grantor's sole cost and expense, an inspection or audit of the
Property prepared by a hydrogeologist or environmental engineer or other
appropriate consultant approved by Grantee indicating the presence or
absence of Hazardous Substances on the Property or an inspection or audit
of the Improvements prepared by an engineering or consulting firm approved
by Grantee indicating the presence or absence of friable asbestos or
substances containing asbestos on the Property. If Grantor fails to
provide such inspection or audit within thirty (30) days after such
request, Grantee may order the same, and Grantor hereby grants to Grantee
and its employees and agents access to the Property and a license to
undertake such inspection or audit. The cost of such inspection or audit,
together with interest thereon at the Default Interest Rate from the date
incurred by Grantee until actually paid by Grantor, shall be immediately
due and payable to Grantee by Grantor on demand and shall be secured hereby
and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note.
(e) Reference is made to that certain Hazardous Substances
Indemnity Agreement of even date herewith by and among Grantor, Merry Land
Properties, Inc. and Grantee (the "Hazardous Indemnity Agreement"). The
provisions of this Security Deed and the Hazardous Indemnity Agreement
shall be read together to maximize the coverage with respect to the subject
matter thereof, as determined by Grantee.
(f) If, prior to the date hereof, it was determined that the
Property contains Lead Based Paint, Grantor had prepared an assessment
report describing the location and condition of the Lead Based Paint (a
"Lead Based Paint Report"). If, at any time hereafter, Lead Based Paint is
suspected of being present on the Property, Grantor agrees, at its sole
cost and expense and within twenty (20) days thereafter, to cause to be
prepared a Lead Based Paint Report prepared by an expert, and in form,
scope and substance, acceptable to Grantee.
(g) Grantor agrees that if it has been, or if at any time
hereafter it is, determined that the Property contains Lead Based Paint, on
or before thirty (30) days following (i) the date hereof, if such
determination was made prior to the date hereof or (ii) such determination,
if such determination is hereafter made, as applicable, Grantor shall, at
its sole cost and expenses, develop and implement, and thereafter
diligently and continuously carry out (or cause to be developed and
implemented and thereafter diligently and continually to be carried out),
an operations, abatement and maintenance plan for the Lead Based Paint on
the Property, which plan shall be prepared by an expert, and be in form,
scope and substance, acceptable to Grantee (together with any Lead Based
Paint Report, the "O&M Plan"). (If an O&M Plan has been prepared prior to
the date hereof, Grantor agrees to diligently and continually carry out (or
cause to be carried out) the provisions thereof). Compliance with the O&M
Plan shall require or be deemed to require, without limitation, the proper
preparation and maintenance of all records, papers and forms required under
the Environmental Laws.
1.32 INDEMNIFICATION; SUBROGATION.
(a) Grantor shall indemnify, defend and hold Grantee harmless
against: (i) any and all claims for brokerage, leasing, finders or similar
fees which may be made relating to the Property or the secured
indebtedness, and (ii) any and all liability, obligations, losses, damages,
penalties, claims, actions, suits, costs and expenses (including Grantee's
reasonable attorneys' fees, together with reasonable appellate counsel
fees, if any) of whatever kind or nature which may be asserted against,
imposed on or incurred by Grantee in connection with the secured
indebtedness, this Security Deed, the Property, or any part thereof, or the
exercise by Grantee of any rights or remedies granted to it under this
Security Deed; provided, however, that nothing herein shall be construed to
obligate Grantor to indemnify, defend and hold harmless Grantee from and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs and expenses enacted against, imposed on or
incurred by Grantee by reason of Grantee's willful misconduct or gross
negligence.
(b) If Grantee is made a party defendant to any litigation or any
claim is threatened or brought against Grantee concerning the secured
indebtedness, this Security Deed, the Property, or any part thereof, or any
interest therein, or the construction, maintenance, operation or occupancy
or use thereof, then Grantor shall indemnify, defend and hold Grantee
harmless from and against all liability by reason of said litigation or
claims, including reasonable attorneys' fees (together with reasonable
appellate counsel fees, if any) and expenses incurred by Grantee in any
such litigation or claim, whether or not any such litigation or claim is
prosecuted to judgment. If Grantee commences an action against Grantor to
enforce any of the terms hereof or to prosecute any breach by Grantor of
any of the terms hereof or to recover any sum secured hereby, Grantor shall
pay to Grantee its reasonable attorneys' fees (together with reasonable
appellate counsel fees, if any) and expenses. The right to such attorneys'
fees (together with reasonable appellate counsel fees, if any) and expenses
shall be deemed to have accrued on the commencement of such action, and
shall be enforceable whether or not such action is prosecuted to judgment.
If Grantor breaches any term of this Security Deed, Grantee may engage the
services of an attorney or attorneys to protect its rights hereunder, and
in the event of such engagement following any breach by Grantor, Grantor
shall pay Grantee reasonable attorneys' fees (together with reasonable
appellate counsel fees, if any) and expenses incurred by Grantee, whether
or not an action is actually commenced against Grantor by reason of such
breach. All references to "attorneys" in this Subsection and elsewhere in
this Security Deed shall include without limitation any attorney or law
firm engaged by Grantee and Grantee's in-house counsel, and all references
to "fees and expenses" in this Subsection and elsewhere in this Security
Deed shall include without limitation any reasonable fees of such attorney
o law firm and any allocation charges and allocation costs of Grantee's
in-house counsel.
(c) A waiver of subrogation shall be obtained by Grantor from its
insurance carrier and, consequently, Grantor waives any and all right to
claim or recover against Grantee, its officers, employees, agents and
representatives, for loss of or damage to Grantor, the Property, Grantor's
property or the property of others under Grantor's control from any cause
insured against or required to be insured against by the provisions of this
Security Deed.
1.33 NEGATIVE COVENANTS WITH RESPECT TO INDEBTEDNESS, OPERATIONS
AND FUNDAMENTAL CHANGES OF GRANTOR. Grantor hereby represents, warrants
and covenants, as of the date hereof and until such time as the
indebtedness secured hereby is paid in full, that Grantor:
(a) will not, nor will any partner, limited or general, member or
shareholder thereof, as applicable, amend, modify or otherwise change its
partnership certificate, partnership agreement, articles of incorporation,
by-laws, operating agreement, articles of organization, or other formation
agreement or document, as applicable, in any manner which adversely affects
Grantor's existence as a single purpose entity;
(b) will not enter into any transaction of merger or
consolidation, or liquidate or dissolve itself (or suffer any liquidation
or dissolution), or acquire by purchase or otherwise all or substantially
all the business or assets of, or any stock or other evidence of beneficial
ownership of, any entity;
(c) has not and will not guarantee, pledge its assets for the benefit
of, or otherwise become liable on or in connection with any obligation of any
other person or entity;
(d) does not own and will not own any asset other than (i) the
Property, and (ii) incidental personal property necessary for the operation of
the Property;
(e) is not engaged and will not engage, directly or indirectly, in
any business other than the ownership, management and operation of the
Property;
(f) will not enter into any contract or agreement with any general
partner, member, principal or Affiliate (as hereinafter defined) of the Grantor
or any Affiliate of the general partner, principal or member of the Grantor
except upon terms and conditions that are intrinsically fair and substantially
similar to those that would be available on an arms-length basis with third
parties other than an Affiliate;
(g) has not incurred and will not incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation), other
than (i) the indebtedness secured hereby, and (ii) Affiliate advances or trade
payables or accrued expenses incurred in the ordinary course of business of
operating the Property not outstanding for more than sixty (60) days with trade
creditors and in amounts as are normal and reasonable under the circumstances,
but in no event to exceed five percent of the original principal balance of the
Note in the aggregate; no other debt may be secured (senior, subordinate or
pari passu) by the Property;
(h) has not made and will not make any loans or advances to any
third party (including any Affiliate);
(i) is and will be solvent and pay its debt from its assets as
the same shall become due;
(j) has done or caused to be done and will do all things
necessary to preserve its existence, and will not, nor will any member,
partner, limited or general, or shareholder thereof, amend, modify or
otherwise change its operating agreement, articles of incorporation,
partnership certificate, partnership agreement, articles of incorporation
or bylaws in a manner which adversely affects the Grantor's existence as a
single purpose entity;
(k) will conduct and operate its business as presently conducted
and operated;
(l) will maintain financial statements, books and records and
bank accounts separate from those of its Affiliates, including its general
partners and members, (except that Grantor may be included in consolidated
financial statements of another person where required by generally accepted
accounting principals (GAAP)), provided that such consolidated financial
statements contain a note indicating that the Grantor is a separate legal
entity and the Grantor's assets and liabilities are neither available to
pay the debts of the consolidates entity nor constitute obligations of the
consolidated entity and that the consolidated entity is not liable for any
of the liabilities of the Grantor except as otherwise provided in the Loan
Documents;
(m) will be, and at all times will hold itself out to the public
as, a legal entity separate and distinct from any other entity (including
any Affiliate thereof, including any general partner or member, Affiliate
of the general partner or member of the Grantor);
(n) will file its own tax returns;
(o) will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light
of its contemplated business operations;
(p) will not seek the dissolution or winding up, in whole or in
part, of the Grantor;
(q) will not commingle the funds and other assets of Grantor with
those of any general partner, member, any Affiliate or any other person;
(r) has and will maintain its assets in such a manner that it is
not costly or difficult to segregate, ascertain or identify its individual
assets from those of any Affiliate or any other person;
(s) does not and will not hold itself out to be responsible for
the debts or obligations of any other person;
(t) will not do any act which would make it impossible to carry
on the ordinary business of Grantor;
(u) will not possess or assign the Property or incidental
personal property necessary for the operation of the Property for other
than a business or company purpose;
(v) will not sell, encumber or otherwise dispose of all or
substantially all of the Property or incidental personal property necessary
for the operation of the Property;
(w) will not hold title to Grantor's assets other than in
Grantor's name; and
(x) will not institute proceedings to be adjudicated bankrupt or
insolvent; or consent to the institution of bankruptcy or insolvency
proceedings against it; or file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating
to bankruptcy; or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Grantor
or a substantial part of Grantor's property; or make any assignment for the
benefit of creditors; or admit in writing its inability to pay its debts
generally as they become due; or take any action in furtherance of any such
action.
1.34 COVENANTS REGARDING INDEPENDENT MANAGER. By execution
hereof, ML Apartments I, Inc., a Georgia corporation agrees that it:
(a) shall at all times act as the managing member (such entity
together with its successor or assignee are hereinafter the "Manager") of
Grantor with all of the rights, powers, obligations and liabilities of the
managing member under the operating agreement of Grantor and shall take any
and all actions and do any and all things necessary or appropriate to the
accomplishment of same and will engage in no other business.
(b) shall not institute proceedings to be adjudicated bankrupt or
insolvent; or consent to the institution of bankruptcy or insolvency
proceedings against it; or file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating
to bankruptcy; or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Manager
or a substantial part of its property; or make any assignment for the
benefit of creditors; or admit in writing its inability to pay its debts
generally as they become due; or take any corporate action in furtherance
of any such action.
(c) shall not (a) liquidate or dissolve the Manager in whole or
in part and (b) consolidate, merge or enter into any form of consolidation
with or into any other entity, nor convey, transfer or lease its assets
substantially as an entirety to any person or entity nor permit any entity
to consolidate, merge or enter into any form of consolidation with or into
the Manager, nor convey, transfer or lease its assets substantially as an
entirety to any person or entity.
(d) shall either (i) maintain its principal executive office
separate from that of any Affiliate, or (ii) if sharing office space,
allocate fairly and reasonably any rent, overhead and other lease charges
for shared office space and shall use telephone and facsimile numbers
separate from that of any Affiliate and shall conspicuously identify such
numbers as its own and shall use its own stationary, invoices and checks
which reflect its address, telephone number and facsimile number, as
appropriate;
(e) shall maintain its corporate records and books and accounts
separate from those of any Affiliate or any other entity and shall prepare
unaudited quarterly and annual financial statements, and said financial
statements shall be in compliance with generally accepted accounting
principles and shall be in form reasonably acceptable to Grantee and its
successors and/or assigns;
(f) shall maintain its own separate bank accounts and correct,
complete and separate books of account;
(g) shall hold itself out to the public (including any
Affiliate's creditors) under the Manager's own name and as a separate and
distinct corporate entity and not as a department, division or otherwise of
any Affiliate;
(h) shall observe all customary formalities regarding the
corporate existence of the Manager, including holding meetings of or
obtaining the consent of its board of directors, as appropriate, and its
stockholders and maintaining current accurate minute books separate from
those of any Affiliate;
(i) shall act solely in its own corporate name and through its
own duly authorized officers and agents and no Affiliate shall be appointed
or act as agent of the Manager in its capacity as Manager of Grantor;
(j) shall make investments in the name of the Manager directly by
the Manager or on its behalf by brokers engaged and paid by the Manager or
its agents;
(k) except as required by Grantee or any successor to Grantee in
connection with any extension of credit by Grantee or any successor to
Grantee to Grantor (or any refinancing, increase, modification,
consolidation or extension of any such extension of credit), shall not
guaranty or assume or hold itself out or permit itself to be held out as
having guaranteed or assumed any liabilities of any partner of Grantor or
any Affiliate other than Grantor, nor shall the Manager make any loan,
except as permitted in the applicable Operating Agreement of Grantor;
(l) represents and warrants that the Manager is and expects to
remain solvent and shall pay its own liabilities, indebtedness and
obligations of any kind, including all administrative expenses, from its
own separate assets;
(m) represents and warrants that assets of the Manager shall be
separately identified, maintained and segregated and the Manager's assets
shall at all times be held by or on behalf of the Manager and if held on
behalf of the Manager by another entity, shall at all times be kept
identifiable (in accordance with customary usages) as assets owned by the
Manager (this restriction requires, among other things, that corporate
funds shall not be commingled with those of any Affiliate and it shall
maintain all accounts in its own name and with its own tax identification
number, separate from those of any Affiliates);
(n) shall not intentionally take any action if, as a result of
such action, the Manager would be required to register as an investment
company under the Investment Company Act of 1940, as amended;
(o) shall at all times be adequately capitalized to engage in the
transactions contemplated at its formation;
(p) represents and warrants that all data and records (including
computer records) used by the Manager or any Affiliate in the collection
and administration of any loan shall reflect the Manager's ownership
interest therein; and
(q) represents and warrants that none of the Manager's funds
shall be invested in securities issued by any Affiliate.
(r) shall maintain at all times one (1) Independent Director.
"Independent Manager" shall mean a person who is not, and has not
at any time during the preceding five years been (i) a member, shareholder
of, or an officer, director, attorney, counsel, partner or employee of,
Grantor or any of its shareholders, subsidiaries or affiliates, (ii) a
customer of, or supplier to, Grantor or any of its shareholders,
subsidiaries or affiliates, (iii) a person or other entity controlling or
under common control with any such shareholder, partner, supplier or
customer, or (iv) a member of the immediate family of any such shareholder,
officer, director, partner, employee, supplier or customer of any other
director of Grantor. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether
through ownership of voting securities, by contract or otherwise.
"Affiliate" means any person or entity other than the Manager (i)
which owns beneficially, directly or indirectly, more than 50 percent of
the outstanding shares of Common Stock or which is otherwise in control of
the Manager, (ii) of which more than 50 percent of the outstanding voting
securities are owned beneficially, directly or indirectly, by any entity
described in clause (i) above, or (iii) which is controlled by an entity
described in clause (i) above; provided that for the purposes of this
definition the term "control" and "controlled by" shall have the meanings
assigned to them in Rule 405 under the Securities Act of 1933, as amended.
1.35 REPAIR AND REMEDIATION RESERVE. Prior to the execution
of this Security Deed, Grantee has caused the Property to be inspected
and such inspection has revealed that the Property is in need of
certain maintenance, repairs and/or remedial or corrective work.
Contemporaneously with the execution hereof, Grantor has established
with the Grantee a reserve in the amount of $18,750.00 (the "Repair and
Remediation Reserve") by depositing such amount with Grantee. Grantor
shall cause each of the items described in Exhibit C attached hereto
and made a part hereof and as more particularly described in that
certain Engineering Report entitled Physical Facility Inspection
Report, dated April, 1999 and prepared by Comprehensive Building
Analysis, Inc. (the "Deferred Maintenance") to be completed, performed,
remediated and corrected to the satisfaction of Grantee and as
necessary to bring the Property into compliance with all applicable
laws, ordinances, rules and regulations on or before the expiration of
90 days after the effective
date hereof, as such time period may be extended by Grantee in its sole
discretion. So long as no Default or Event of Default hereunder or under the
other Loan Documents has occurred and is continuing, all sums in the Repair and
Remediation Reserve shall be held by Grantee in the Repair and Remediation
Reserve to pay the costs and expenses of completing the Deferred Maintenance.
So long as no Default or Event of Default hereunder or under the other Loan
Documents has occurred and is continuing, Grantee shall, to the extent funds
are available for such purpose in the Repair and Remediation Reserve, disburse
to Grantor the amount paid or incurred by Grantor in completing, performing,
remediating or correcting the Deferred Maintenance upon (a) the receipt by
Grantee of a written request from Grantor for disbursement from the Repair and
Remediation Reserve and a certification by Grantor in the form annexed hereto
as Exhibit B that the applicable item of Deferred Maintenance has been paid for
and completed in accordance with the terms of this Security Deed, (b) delivery
to Grantee of paid invoices, receipts or other evidence satisfactory to Grantee
verifying the costs of the Deferred Maintenance to be reimbursed, (c) delivery
to Grantee of a certification from an inspecting architect, engineer or other
consultant reasonably acceptable to Grantee describing the completed work,
verifying the completion of the work and the value of the completed work and,
if applicable, certifying that the Property is, as a result of such work, in
compliance with all applicable laws, ordinances rules and regulations relating
to the Deferred Maintenance so performed, (d) delivery to Grantee of
affidavits, lien waivers or other evidence reasonably satisfactory to Grantee
showing that all materialmen, laborers, subcontractors and any other parties
who might or could claim statutory or common law liens and are furnishing or
have furnished materials or labor to the Property have been paid all amounts
due for such labor and materials furnishd to the Property, and (e) the receipt
by Grantee of an administrative fee in the amount of $150.00. Grantee shall
not be required to make advances from the Repair and Remediation Reserve more
frequently than once in any ninety (90) day period. In making any payment from
the Repair and Remediation Reserve, Grantee shall be entitled to rely on such
request from Grantor without any inquiry into the accuracy, validity or
contestability of any such amount. Grantor hereby grants to Grantee, as
additional security for payment of the indebtedness secured hereby, a security
interest in the Repair and Remediation Reserve. In no event may Grantor be
entitled to reimbursement of any costs with respect to each item of Deferred
Maintenance in excess of the applicable amount set forth in Exhibit C attached
hereto and made part hereof. The Repair and Remediation Reserve shall not,
unless otherwise explicitly required by applicable law, be or be deemed to be
escrow or trust funds, but at Grantee's option and in Grantee's discretion, may
either be held in a separate account or be commingled by Grantee with the
general funds of Grantee. No interest on the funds contained in the Repair and
Remediation Reserve shall be paid by Grantee to Grantor. The Repair and
Remediation Reserve is solely for the protection of Grantee and entails no
responsibility on Grantee's part beyond the payment of the costs and expenses
described in this paragraph in accordance with the terms hereof and beyond the
allowing of due credit for the sums actually received. In the event that the
amounts on deposit or available in the Repair and Remediation Reserve are
inadequate to pay the costs of the Deferred Maintenance, Grantor shall pay the
amount of such deficiency. Upon assignment of this Security Deed by Grantee,
any funds in the Repair and Remediation Reserve shall be turned over to the
assignee and any responsibility of Grantee, as assignor, with respect thereto
shall terminate. If there is a default under this Security Deed which is not
cured ithin any applicable grace or cure period, Grantee may, but shall not be
obligated to, apply at any time the balance then remaining in the Repair and
Remediation Reserve against the indebtedness secured hereby in whatever order
Grantee shall subjectively determine. No such application of the Repair and
Remediation Reserve shall be deemed to cure any default hereunder. Grantor
hereby grants to Grantee a power-of-attorney, coupled with an interest, to
cause the Deferred Maintenance to be completed, performed, remediated and
corrected to the satisfaction of Grantee upon Grantor's failure to do so in
accordance with the terms and conditions of this Security Deed, and to apply
the amounts on deposit in the Repair and Remediation Reserve to the costs
associated therewith, all as Grantee may determine in its sole and absolute
discretion but without obligation to do so. Upon the earlier to occur of full
payment of the indebtedness secured hereby in accordance with its terms, the
completion of the Deferred Maintenance to the satisfaction of the Grantee or at
such earlier time as Grantee may elect, the balance of the Repair and
Remediation Reserve then in Grantee's possession shall be paid over to Grantor
and no other party shall have any right or claim thereto.
ARTICLE II
EVENTS OF DEFAULT
2.1 EVENTS OF DEFAULT. The occurrence of any of the following
events (each, an "Event of Default") shall be an Event of Default
hereunder:
(a) Grantor fails to punctually perform any covenant, agreement,
obligation, term or condition under the Note, this Security Deed or any
other Loan Document which requires payment of any money to Grantee at the
time or within any applicable grace period set forth therein or herein, or
if no time or grace period is set forth, then within seven (7) days of the
date such payment is due or following demand if there is no due date.
(b) Grantor fails to provide insurance as required by SECTION 1.4
hereof or fails to perform any covenant, agreement, obligation, term or
condition set forth in SECTIONS 1.5, 1.15, 1.31, 1.33 OR 1.35 hereof.
(c) Grantor fails to perform any other covenant, agreement,
obligation, term or condition set forth herein other than those otherwise
described in this Section 2.1 and, to the extent such failure or default is
susceptible of being cured, the continuance of such failure or default for
thirty (30) days after written notice thereof from Grantee to Grantor;
provided, however, that if such default is susceptible of cure but such
cure cannot be accomplished with reasonable diligence within said period of
time, and if Grantor commences to cure such default promptly after receipt
of notice thereof from Grantee, and thereafter prosecutes the curing of
such default with reasonable diligence, such period of time shall be
extended for such period of time as may be necessary to cure such default
with reasonable diligence, but not to exceed an additional sixty (60) days.
(d) Any representation or warranty made herein, in or in
connection with any application or commitment relating to the loan
evidenced by the Note, or in any of the other Loan Documents to Grantee by
Grantor, by any principal or general partner, manager or member in Grantor
or by any indemnitor or guarantor under any indemnity or guaranty executed
in connection with the loan secured hereby shall in its reasonable
discretion have been materially false or misleading in any material respect
at the time made.
(e) There shall be a sale, conveyance, disposition, alienation,
hypothecation, leasing, assignment, pledge, mortgage, granting of a
security interest in or other transfer or further encumbrancing of the
Property, Grantor or its general partners or members, or any portion
thereof or any interest therein, in violation of Section 1.13 hereof.
(f) An Event of Default or default occurs under any of the other
Loan Documents which has not been cured within any applicable grace or cure
period therein provided.
(g) Grantor, any managing member or general partner in Grantor or
any indemnitor or guarantor under any indemnity or guaranty executed in
connection with the loan secured hereby becomes insolvent, or shall make a
transfer in fraud of creditors, or shall make an assignment for the benefit
of creditors, shall file a petition in bankruptcy, shall voluntarily be
adjudicated insolvent or bankrupt or shall admit in writing the inability
to pay debts as they mature, shall petition or apply to any tribunal for or
shall consent to or shall not contest the appointment of a receiver,
trustee, custodian or similar officer for Grantor, for any such managing
member or general partner of Grantor or for any such indemnitor or
guarantor or for a substantial part of the assets of Grantor, of any such
managing member or general partner of Grantor or of any such indemnitor or
guarantor, or shall commence any case, proceeding or other action under any
bankruptcy, reorganization, arrangement, readjustment or debt, dissolution
or liquidation law or statute of any jurisdiction, whether now or hereafter
in effect.
(h) A petition is filed or any case, proceeding or other action
is commenced against Grantor, against any managing member or general
partner of Grantor or against any indemnitor or guarantor under any
indemnity or guaranty executed in connection with the loan secured hereby
seeking to have an order for relief entered against it as debtor or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts or other relief under any law relating to
bankruptcy, insolvency, arrangement, reorganization, receivership or other
debtor relief under any law or statute of any jurisdiction whether now or
hereafter in effect or a court of competent jurisdiction enters an order
for relief against Grantor, against any managing member or general partner
of Grantor or against any indemnitor or guarantor under any indemnity or
guaranty executed in connection with the loan secured hereby, as debtor, or
an order, judgment or decree is entered appointing, with or without the
consent of Grantor, of any such managing member or general partner of
Grantor or of any such indemnitor or guarantor, a receiver, trustee,
custodian or similar officer for Grantor, for any such managing member or
general partner of Grantor or for any such indemnitor or guarantor, or for
any substantial part of any of the properties of Grantor, of any such
principal, managing member or general partner of Grantor or of any such
indemnitor or guarantor, and if any such event shall occur, such petition,
case, proceeding, action, order, judgment or decree shall not be dismissed
within sixty (60) days after being commenced.
(i) The Property or any part thereof shall be taken on execution
or other process of law in any action against Grantor.
(j) Grantor abandons all or a portion of the Property.
(k) The holder of any lien or security interest on the Property
(without implying the consent of Grantee to the existence or creation of
any such lien or security interest), whether superior or subordinate to
this Security Deed or any of the other Loan Documents, declares a default
and such default is not cured within any applicable grace or cure period
set forth in the applicable document or such holder institutes foreclosure
or other proceedings for the enforcement of its remedies thereunder.
(l) The Property, or any part thereof, is subjected to actual or
threatened waste or to removal, demolition or material alteration so that
the value of the Property is materially diminished thereby and Grantee
determines (in its subjective determination) that it is not adequately
protected from any loss, damage or risk associated therewith.
(m) Any dissolution, termination, partial or complete
liquidation, merger or consolidation of Grantor, any of its principals or
any general partner or any managing member.
(n) Managing Member fails to perform any covenant, agreement,
obligation, terms or condition of Section 1.34 hereof.
ARTICLE III
REMEDIES
3.1 REMEDIES AVAILABLE. If there shall occur an Event of Default
under this Security Deed, then this Security Deed is subject to foreclosure
as provided by law and Grantee may, at its option and by or through a
trustee, nominee, assignee or otherwise, to the fullest extent permitted by
law, exercise any or all of the following rights, remedies and recourses,
either successively or concurrently:
(a) ACCELERATION. Accelerate the maturity date of the Note and
declare any or all of the indebtedness secured hereby to be immediately due
and payable without any presentment, demand, protest, notice, or action of
any kind whatever (each of which is hereby expressly waived by Grantor),
whereupon the same shall become immediately due and payable. Upon any such
acceleration, payment of such accelerated amount shall constitute a
prepayment of the principal balance of the Note and any applicable
prepayment fee provided for in the Note shall then be immediately due and
payable.
(b) ENTRY ON THE PROPERTY. Either in person or by agent, with or
without bringing any action or proceeding, or by a receiver appointed by a
court and without regard to the adequacy of its security, enter upon and
take possession of the Property, or any part thereof, without force or with
such force as is permitted by law and without notice or process or with
such notice or process as is required by law unless such notice and process
is waivable, in which case Grantor hereby waives such notice and process,
and do any and all acts and perform any and all work which may be desirable
or necessary in Grantee's judgment to complete any unfinished construction
on the Real Estate, to preserve the value, marketability or rentability of
the Property, to increase the income therefrom, to manage and operate the
Property or to protect the security hereof and all sums expended by Grantee
therefor, together with interest thereon at the Default Interest Rate,
shall be immediately due and payable to Grantee by Grantor on demand and
shall be secured hereby and by all of the other Loan Documents securing all
or any part of the indebtedness evidenced by the Note.
(c) COLLECT RENTS AND PROFITS. With or without taking possession
of the Property, xxx or otherwise collect the Rents and Profits, including
those past due and unpaid.
(d) APPOINTMENT OF RECEIVER. Upon, or at any time prior or
after, initiating the exercise of any power of sale, instituting any
judicial foreclosure or instituting any other foreclosure of the liens and
security interests provided for herein or any other legal proceedings
hereunder, make application to a court of competent jurisdiction for
appointment of a receiver for all or any part of the Property, as a matter
of strict right and without notice to Grantor and without regard to the
adequacy of the Property for the repayment of the indebtedness secured
hereby or the solvency of Grantor or any person or persons liable for the
payment of the indebtedness secured hereby, and Grantor does hereby
irrevocably consent to such appointment, waives any and all notices of and
defenses to such appointment and agrees not to oppose any application
therefor by Grantee, but nothing herein is to be construed to deprive
Grantee of any other right, remedy or privilege Grantee may now have under
the law to have a receiver appointed, provided, however, that, the
appointment of such receiver, trustee or other appointee by virtue of any
court order, statute or regulation shall not impair or in any manner
prejudice the rights of Grantee to receive payment of the Rents and Profits
pursuant to other terms and provisions hereof. Any such receiver shall
have all of the usual powers and duties of receivers in similar cases,
including, without limitation, the full power to hold, develop, rent,
lease, manage, maintain, operate and otherwise use or permit the use of the
Property upon such terms and conditions as said receiver may deem to be
prudent and reasonable under the circumstances as more fully set forth in
Section 3.3 below. Such receivership shall, at the option of Grantee,
continue until full payment of all of the indebtedness secured hereby or
until title to the Property shall have passed by foreclosure sale under
this Security Deed or deed in lieu of foreclosure.
(e) FORECLOSURE. Immediately commence an action to foreclose
this Security Deed or to specifically enforce its provisions or any of the
indebtedness secured hereby pursuant to the statutes in such case made and
provided and sell the Property or cause the Property to be sold in
accordance with the requirements and procedures provided by said statutes
in a single parcel or in several parcels at the option of Grantee.
(1) Should Grantee have elected to accelerate the
indebtedness secured hereby, Grantee may initiate
foreclosure of the Property by effectuating a non-judicial
foreclosure sale. Grantee shall then sell, or offer for
sale, the Property at public sale in accordance with the
laws of the State of Georgia then in force and governing
said sales of real property and improvements under powers
conferred by security deeds. Each such sale shall be at the
time, place and in the manner prescribed for holding
sheriff's sales of property of like kind, in the County
where the Property, or a part thereof, is located, after
advertising said sale once in each of the four consecutive
weeks (without regard to the number of days) immediately
preceding the sale in the newspaper in which are advertised
sales by the sheriff of said County, all other notice being
hereby waived by Grantor. Grantor hereby constitutes and
appoints Grantee the agent and attorney-in-fact of Grantor
to conduct such sale and to execute in the name of Grantor a
deed or deeds of conveyance to the purchaser or purchasers,
which deed or deeds shall contain full warranties of title
in the name of Grantor and shall recite default in payment,
advertisement and sale, which shall be conclusive evidence
thereof, and shall convey to the purchaser or purchasers
good and sufficient titles to the Property sold; and Grantee
is authorized to be a bidder and purchaser at all such
sales. Any Grantee purchasing at any such sale shall have
the right to credit the secured indebtedness owing to such
Grantee upon the amount of its bid entered at such sale to
the extent necessary to satisfy such bid. Grantor binds
himself to warrant and forever defend the title of such
purchaser or purchasers when so made by the Grantee, and
agrees to accept proceeds of said sale, if any, which are
payable to Grantor as provided herein. All acts of said
Grantee as attorney-in-fact are hereby ratified and
confirmed. The power of sale referred to above and agency
hereby granted are coupled with an interest and are
irrevocable by death or otherwise, are granted as cumulative
of the remedies provided hereby, and shall not be exhausted
by the exercise thereof, but may be exercised until full
payment of the indebtedness secured hereby.
(2) Should Grantee have not elected to accelerate the
indebtedness secured hereby, Grantee may nonetheless proceed
with foreclosure in satisfaction of such default, either
through the courts or by conducting a sale as hereinbefore
provided, but without declaring the entire indebtedness
secured by this Security Deed due, and provided that if said
sale is made because of such default, such sale may be made
subject to the unmatured part of the secured indebtedness.
Such sale, if so made, shall not in any manner affect the
unmatured part of the debt secured by this Security Deed,
but as to such unmatured part, this Security Deed shall
remain in full force as though no sale had been made.
Several sales may be made without exhausting the right of
sale with respect to any unmatured part of the secured
indebtedness, it being the purpose and intent hereof to
provide for a foreclosure and the sale of the Property for
any matured portion of said secured indebtedness without
exhausting the power of foreclosure.
(3) In the event foreclosure proceedings are instituted
by Grantee, all expenses incident to such proceedings,
including, but not limited to, attorneys' and trustee's fees
and costs, shall be paid by Grantor and secured by this
Security Deed and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by
the Note. The secured indebtedness and all other
obligations secured by this Security Deed, including,
without limitation, interest at the Default Interest Rate
(as defined in the Note), any prepayment charge, fee or
premium required to be paid under the Note in order to
prepay principal (to the extent permitted by applicable
law), attorneys' and trustee's fees and any other amounts
due and unpaid to Grantee under the Loan Documents, may be
bid by Grantee in the event of a foreclosure sale hereunder.
(f) OTHER. Exercise any other right or remedy available
hereunder, under any of the other Loan Documents or at law or in equity.
3.2 APPLICATION OF PROCEEDS. To the fullest extent permitted by
law, the proceeds of any sale under this Security Deed shall be applied to
the extent funds are so available to the following items in such order as
Grantee in its discretion may determine:
(a) To payment of the costs, expenses and fees of taking
possession of the Property, and of holding, operating, maintaining, using,
leasing, repairing, improving, marketing and selling the same and of
otherwise enforcing Grantee's right and remedies hereunder and under the
other Loan Documents, including, but not limited to, receivers' fees, court
costs, attorneys', accountants', appraisers', managers' and other
professional fees, title charges and transfer taxes.
(b) To payment of all sums expended by Grantee under the terms of
any of the Loan Documents and not yet repaid, together with interest on
such sums at the Default Interest Rate.
(c) To payment of the secured indebtedness and all other
obligations secured by this Security Deed, including, without limitation,
interest at the Default Interest Rate and, to the extent permitted by
applicable law, any prepayment fee, charge or premium required to be paid
under the Note in order to prepay principal, in any order that Grantee
chooses in its sole discretion.
The remainder, if any, of such funds shall be disbursed to
Grantor or to the person or persons legally entitled thereto.
3.3 RIGHT AND AUTHORITY OF RECEIVER OR GRANTEE IN THE EVENT OF
DEFAULT; POWER OF ATTORNEY. Upon the occurrence of an Event of Default
hereunder, which default is not cured within any applicable grace or cure
period, and entry upon the Property pursuant to Section 3.1(b) hereof or
appointment of a receiver pursuant to Section 3.1(d) hereof, and under such
terms and conditions as may be prudent and reasonable under the
circumstances in Grantee's or the receiver's sole discretion, all at
Grantor's expense, Grantee or said receiver, or such other persons or
entities as they shall hire, direct or engage, as the case may be, may do
or permit one or more of the following, successively or concurrently: (a)
enter upon and take possession and control of any and all of the Property;
(b) take and maintain possession of all documents, books, records, papers
and accounts relating to the Property; (c) exclude Grantor and its agents,
servants and employees wholly from the Property; (d) manage and operate the
Property; (e) preserve and maintain the Property; (f) make repairs and
alterations to the Property; (g) complete any construction or repair of the
Improvements, with such changes, additions or modifications of the plans
and specifications or intended disposition and use of the Improvements as
Grantee may in its sole discretion deem appropriate or desirable to place
the Property in such condition as will, in Grantee's sole discretion, make
it or any part thereof readily marketable or rentable; (h) conduct a
marketing or leasing program with respect to the Property, or employ a
marketing or leasing agent or agents to do so, directed to the leasing or
sale of the Property under such terms and conditions as Grantee may in its
sole discretion deem appropriate or desirable; (i) employ such contractors,
subcontractors, materialmen, architects, engineers, consultants, managers,
brokers, marketing agents, or other employees, agents, independent
contractors or professionals, as Grantee may in its sole discretion deem
appropriate or desirable to implement and effectuate the rights and powers
herein granted; (j) execute an deliver, in the name of Grantee as attorney-
in-fact and agent of Grantor or in its own name as Grantee, such documents
and instruments as are necessary or appropriate to consummate authorized
transactions; (k) enter into such leases, whether of real or personal
property, or tenancy agreements, under such terms and conditions as Grantee
may in its sole discretion deem appropriate or desirable; (l) collect and
receive the Rents and Profits from the Property; (m) eject Tenants or
repossess personal property, as provided by law, for breaches of the
conditions of their Leases; (n) xxx for unpaid Rents and Profits, payments,
income or proceeds in the name of Grantor or Grantee; (o) maintain actions
in forcible entry and detainer, ejectment for possession and actions in
distress for rent; (p) compromise or give acquittance for Rents and
Profits, payments, income or proceeds that may become due; (q) delegate or
assign any and all rights and powers given to Grantee by this Security
Deed; and (r) do any acts which Grantee in its sole discretion deems
appropriate or desirable to protect the security hereof and use such
measures, legal or equitable, as Grantee may in its sole discretion deem
appropriate or desirable to implement and effectuate the provisions of this
Security Deed. This Security Deed shall constitute a direction to and full
authority to any lessee, or other third party who has heretofore dealt or
contracted or may hereafter deal or contract with Grantor or Grantee, at
the request of Grantee, to pay all amounts owing under any Lease, contract,
concession, license or other agreement to Grantee without proof of the
Event of Default relied upon. Any such lessee or third party is hereby
irrevocably authorized to rely upon and comply with (and shall be fully
protected by Grantor in so doing) any request, notice or demand by Grantee
for the payment to Grantee of any Rents and Profits or other sums which may
be or thereafter become due under its Lease, contract, concession, license
or other agreement, or for the performance of any undertakings under any
such Lese, contract, concession, license or other agreement, and shall have
no right or duty to inquire whether any Event of Default under this
Security Deed or under any of the other Loan Documents has actually
occurred or is then existing. Grantor hereby constitutes and appoints
Grantee, its assignees, successors, transferees and nominees, as Grantor's
true and lawful attorney-in-fact and agent, with full power of substitution
in the Property, in Grantor's name, place and stead, to do or permit any
one or more of the foregoing described rights, remedies, powers and
authorities, successively or concurrently, and said power of attorney shall
be deemed a power coupled with an interest and irrevocable so long as any
indebtedness secured hereby is outstanding. Any money advanced by Grantee
in connection with any action taken under this Section 3.3, together with
interest thereon at the Default Interest Rate from the date of making such
advancement by Grantee until actually paid by Grantor, shall be a demand
obligation owing by Grantor to Grantee and shall be secured by this
Security Deed and by every other instrument securing the secured
indebtedness.
3.4 OCCUPANCY AFTER FORECLOSURE. In the event there is a
foreclosure sale hereunder and at the time of such sale, Grantor or
Grantor's representatives, successors or assigns, or any other persons
claiming any interest in the Property by, through or under Grantor (except
tenants of space in the Improvements subject to Leases entered into prior
to the date hereof), are occupying or using the Property, or any part
thereof, then, to the extent not prohibited by applicable law, each and all
shall, at the option of Grantee or the purchaser at such sale, as the case
may be, immediately become the tenant of the purchaser at such sale, which
tenancy shall be a tenancy from day-to-day, terminable at the will of
either landlord or tenant, at a reasonable rental per day based upon the
value of the Property occupied or used, such rental to be due daily to the
purchaser. Further, to the extent permitted by applicable law, in the
event the tenant fails to surrender possession of the Property upon the
termination of such tenancy, the purchaser shall be entitled to institute
and maintain an action for unlawful detainer of the Property in the
appropriate court of the county in which the Real Estate is located.
3.5 NOTICE TO ACCOUNT DEBTORS. Grantee may, at any time after an
Event of Default notify the account debtors and obligors of any accounts,
chattel paper, negotiable instruments or other evidences of indebtedness,
to Grantor included in the Property to pay Grantee directly. Grantor shall
at any time or from time to time upon the request of Grantee provide to
Grantee a current list of all such account debtors and obligors and their
addresses.
3.6 CUMULATIVE REMEDIES. All remedies contained in this Security
Deed are cumulative and Grantee shall also have all other remedies provided
at law and in equity or in any other Loan Documents. Such remedies may be
pursued separately, successively or concurrently at the sole subjective
direction of Grantee and may be exercised in any order and as often as
occasion therefor shall arise. No act of Grantee shall be construed as an
election to proceed under any particular provisions of this Security Deed
to the exclusion of any other provision of this Security Deed or as an
election of remedies to the exclusion of any other remedy which may then or
thereafter be available to Grantee. No delay or failure by Grantee to
exercise any right or remedy under this Security Deed shall be construed to
be a waiver of that right or remedy or of any Event of Default hereunder.
Grantee may exercise any one or more of its rights and remedies at its
option without regard to the adequacy of its security.
3.7 PAYMENT OF EXPENSES. Grantor shall pay on demand all of
Grantee's expenses incurred in any efforts to enforce any terms of this
Security Deed, whether or not any lawsuit is filed and whether or not
foreclosure is commenced but not completed, including, but not limited to,
legal fees and disbursements, foreclosure costs and title charges, together
with interest thereon from and after the date incurred by Grantee until
actually paid by Grantor at the Default Interest Rate, and the same shall
be secured by this Security Deed and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the Note.
ARTICLE IV
MISCELLANEOUS TERMS AND CONDITIONS
4.1 TIME OF ESSENCE. Time is of the essence with respect to all
provisions of this Security Deed.
4.2 RELEASE OF SECURITY DEED. If all of the secured indebtedness
be paid, then and in that event only, all rights under this Security Deed
shall terminate except for those provisions hereof which by their terms
survive, and the Property shall become wholly clear of the liens, security
interests, conveyances and assignments evidenced hereby, which shall be
released by Grantee in due form at Grantor's cost. No release of this
Security Deed or the lien hereof shall be valid unless executed by Grantee.
4.3 CERTAIN RIGHTS OF GRANTEE. Without affecting Grantor's
liability for the payment of any of the indebtedness secured hereby,
Grantee may from time to time and without notice to Grantor: (a) release
any person liable for the payment of the indebtedness secured hereby; (b)
extend or modify the terms of payment of the indebtedness secured hereby;
(c) accept additional real or personal property of any kind as security or
alter, substitute or release any property securing the indebtedness secured
hereby; (d) recover any part of the Property; (e) consent in writing to the
making of any subdivision map or plat thereof; (f) join in granting any
easement therein; or (g) join in any extension agreement of the Security
Deed or any agreement subordinating the lien hereof.
4.4 WAIVER OF GRANTOR'S RIGHTS. BY EXECUTION OF THIS SECURITY
DEED AND BY INITIALING THIS PARAGRAPH 4.4, GRANTOR EXPRESSLY: (A)
ACKNOWLEDGES THE RIGHT OF GRANTEE TO ACCELERATE THE INDEBTEDNESS EVIDENCED
BY THE NOTE AND ANY OTHER INDEBTEDNESS SECURED BY THIS SECURITY DEED AND
THE POWER OF ATTORNEY GIVEN HEREIN TO GRANTEE TO SELL THE PROPERTY BY
NONJUDICIAL FORECLOSURE UPON AN EVENT OF DEFAULT BY GRANTOR WITHOUT ANY
JUDICIAL HEARING AND WITHOUT ANY NOTICE OTHER THAN SUCH NOTICE (IF ANY) AS
IS SPECIFICALLY REQUIRED TO BE GIVEN UNDER THE PROVISIONS OF THIS SECURITY
DEED; (B) WAIVES ANY AND ALL RIGHTS WHICH GRANTOR MAY HAVE UNDER THE
CONSTITUTION OF THE UNITED STATES OF AMERICA (INCLUDING, WITHOUT
LIMITATION, THE FIFTH AND FOURTEENTH AMENDMENTS THEREOF), THE VARIOUS
PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF ANY
OTHER APPLICABLE LAW, (1) TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE
EXERCISE BY GRANTEE OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO GRANTEE,
EXCEPT SUCH NOTICE (IF ANY) AS IS SPECIFICALLY REQUIRED TO BE GIVEN UNDER
THE PROVISIONS OF THIS SECURITY DEED AND (2) CONCERNING THE APPLICATION,
RIGHTS OR BENEFITS OF ANY STATUTE OF LIMITATION OR ANY MORATORIUM,
REINSTATEMENT, MARSHALLING, FORBEARANCE, APPRAISEMENT, VALUATION, STAY,
EXTENSION, HOMESTEAD, EXEMPTION OR REDEMPTION LAWS; (C) ACKNOWLEDGES THAT
GRANTOR HAS READ THIS SECURITY DEED AND ANY AND ALL QUESTIONS OF GRANTOR
REGARDING THE LEGAL EFFECT OF THIS SECURITY DEED AND ITS PROVISIONS HAVE
BEEN EXPLAINED FULLY TO GRANTOR, AND GRANTOR HAS CONSULTED WITH COUNSEL OF
GRANTOR'S CHOICE PRIOR TO EXECUTING THIS SECURITY DEED AND INITIALING THIS
PARAGRAPH 4.4; AND (D) ACKNOWLEDGES THAT ALL WAIVERS OF THE AFORESAID
RIGHTS OF GRANTOR HAVE BEEN MADE KNOWINGLY, INTENTIONALLY AND WILLINGLY BY
GRANTOR AS PART OF A BARGAINED FOR LOAN TRANSACTION AND THAT THIS SECURITY
DEED IS VALID AND ENFORCEABLE BY GRANTEE AGAINST GRANTOR IN ACCORDANCE WITH
ALL THE TERMS AND CONDITIONS HEREOF.
INITIALED BY GRANTOR:
______________
4.5 NOTICES. All notices, demands, requests or other
communications to be sent by one party to the other hereunder or required
by law shall be in writing and shall be deemed to have been validly given
or served by delivery of the same in person to the intended addressee, or
by depositing the same with Federal Express or another reputable private
courier service for next business day delivery, or by depositing the same
in the United States mail, postage prepaid, registered or certified mail,
return receipt requested, in any event addressed to the intended addressee
at its address set forth on the first page of this Security Deed or at such
other address as may be designated by such party as herein provided. All
notices, demands and requests to be sent to Grantee shall be addressed to
the attention of the Capital Markets Group. All notices, demands and
requests shall be effective upon such personal delivery, or one (1)
business day after being deposited with the private courier service, or
three (3) business days after being deposited in the United States mail as
required above. Rejection or other refusal to accept or the inability to
deliver because of changed address of which no notice was given as herein
required shall be deemed to be receipt of the notice, demand or request
sent. By giving to the other party hereto at least fifteen (15) days'
prior written notice thereof in accordance with the provisions hereof, the
parties hereto shall have the right from time to time to change their
respective addresses and each shall have the right to specify as its
address any other address within the United States of America.
4.6 SUCCESSORS AND ASSIGNS. The terms, provisions, indemnities,
covenants and conditions hereof shall be binding upon Grantor and the
successors and assigns of Grantor, including all successors in interest of
Grantor in and to all or any part of the Property, and shall inure to the
benefit of Grantee, its directors, officers, shareholders, employees and
agents and their respective successors and assigns and shall constitute
covenants running with the land. All references in this Security Deed to
Grantor or Grantee shall be deemed to include all such parties' successors
and assigns, and the term "Grantee" as used herein shall also mean and
refer to any lawful holder or owner, including pledgees and participants,
of any of the indebtedness secured hereby. If Grantor consists of more
than one person or entity, each will be jointly and severally liable to
perform the obligations of Grantor.
4.7 SEVERABILITY. A determination that any provision of this
Security Deed is unenforceable or invalid shall not affect the
enforceability or validity of any other provision, and any determination
that the application of any provision of this Security Deed to any person
or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to any other
persons or circumstances.
4.8 GENDER. Within this Security Deed, words of any gender shall
be held and construed to include any other gender, and words in the
singular shall be held and construed to include the plural, and vice versa,
unless the context otherwise requires.
4.9 WAIVER: DISCONTINUANCE OF PROCEEDINGS. Grantee may waive any
single Event of Default by Grantor hereunder without waiving any other
prior or subsequent Event of Default. Grantee may remedy any Event of
Default by Grantor hereunder without waiving the Event of Default remedied.
Neither the failure by Grantee to exercise, nor the delay by Grantee in
exercising, any right, power or remedy upon any Event of Default by Grantor
hereunder shall be construed as a waiver of such Event of Default or as a
waiver of the right to exercise any such right, power or remedy at a later
date. No single or partial exercise by Grantee of any right, power or
remedy hereunder shall exhaust the same or shall preclude any other or
further exercise thereof, and every such right, power or remedy hereunder
may be exercised at any time and from time to time. No modification or
waiver of any provision hereof nor consent to any departure by Grantor
therefrom shall in any event be effective unless the same shall be in
writing and signed by Grantee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose given.
No notice to nor demand on Grantor in any case shall of itself entitle
Grantor to any other or further notice or demand in similar or other
circumstances. Acceptance by Grantee of any payment in an amount less than
the amount then due on any of the secured indebtedness shall be deemed an
acceptance on account only and shall not in any way affect the existence of
an Event of Default hereunder. In case Grantee shall have proceeded to
invoke any right, remedy or recourse permitted hereunder or under the other
Loan Documents and shall thereafter elect to discontinue or abandon the
same for any reason, Grantee shall have the unqualified right to do so and,
in such an event, Grantor and Grantee shall be restored to their former
positions with respect to the indebtedness secured hereby, the Loan
Documents, the Property and otherwise, and the rights, remedies, recourses
and powers of Grantee shall continue as if the same ad never been invoked.
4.10 SECTION HEADINGS. The headings of the sections and
paragraphs of this Security Deed are for convenience of reference only, are
not to be considered a part hereof and shall not limit or otherwise affect
any of the terms hereof.
4.11 GOVERNING LAW. This Security Deed will be governed by and
construed in accordance with the laws of the State in which the Real Estate
is located provided that to the extent any of such laws may now or
hereafter be preempted by Federal law, in which case such Federal law shall
so govern and be controlling; and provided further that the laws of the
state in which the Real Estate is located shall govern as to the creation,
priority and enforcement of liens and security interests in property
located in such state.
4.12 COUNTING OF DAYS. The term "days" when used herein shall
mean calendar days. If any time period ends on a Saturday, Sunday or
holiday officially recognized by the state within which the Real Estate is
located, the period shall be deemed to end on the next succeeding business
day. The term "business day" when used herein shall mean a weekday, Monday
through Friday, except a legal holiday or a day on which banking
institutions in Georgia are authorized by law to be closed.
4.13 RELATIONSHIP OF THE PARTIES. The relationship between
Grantor and Grantee is that of a borrower and a lender only and neither of
those parties is, nor shall it hold itself out to be, the agent, employee,
joint venturer or partner of the other party.
4.14 APPLICATION OF THE PROCEEDS OF THE NOTE. To the extent that
proceeds of the Note are used to pay indebtedness secured by any
outstanding lien, security interest, charge or prior encumbrance against
the Property, such proceeds have been advanced by Grantee at Grantor's
request and Grantee shall be subrogated to any and all rights, security
interests and liens owned by any owner or holder of such outstanding liens,
security interests, charges or encumbrances, irrespective of whether said
liens, security interests, charges or encumbrances are released.
4.15 UNSECURED PORTION OF INDEBTEDNESS. If any part of the
secured indebtedness cannot be lawfully secured by this Security Deed or if
any part of the Property cannot be lawfully subject to the lien and
security interest hereof to the full extent of such indebtedness, then all
payments made shall be applied on said indebtedness first in discharge of
that portion thereof which is unsecured by this Security Deed.
4.16 CROSS DEFAULT. An Event of Default hereunder shall be a
default under each of the other Loan Documents.
4.17 INTEREST AFTER SALE. In the event the Property or any part
thereof shall be sold upon foreclosure as provided hereunder, to the extent
permitted by law, the sum for which the same shall have been sold shall,
for purposes of redemption (pursuant to the laws of the state in which the
Property is located), bear interest at the Default Interest Rate.
4.18 INCONSISTENCY WITH OTHER LOAN DOCUMENTS. In the event of
any inconsistency between the provisions hereof and the provisions in any
of the other Loan Documents, it is intended that the provisions selected by
Grantee in its sole subjective discretion shall be controlling.
4.19 CONSTRUCTION OF THIS DOCUMENT. This document may be
construed as a mortgage, security deed, deed of trust, chattel mortgage,
conveyance, assignment, security agreement, pledge, financing statement,
hypothecation or contract, or any one or more of the foregoing, in order to
fully effectuate the liens and security interests created hereby and the
purposes and agreements herein set forth.
4.20 NO MERGER. It is the desire and intention of the parties
hereto that this Security Deed and the lien hereof do not merge in fee
simple title to the Property. It is hereby understood and agreed that
should Grantee acquire any additional or other interests in or to the
Property or the ownership thereof, then, unless a contrary intent is
manifested by Grantee as evidenced by an appropriate document duly
recorded, this Security Deed and the lien hereof shall not merge in such
other or additional interests in or to the Property, toward the end that
this Security Deed may be foreclosed as if owned by a stranger to said
other or additional interests.
4.21 RIGHTS WITH RESPECT TO JUNIOR ENCUMBRANCES. Any person or
entity purporting to have or to take a junior mortgage or other lien upon
the Property or any interest therein shall be subject to the rights of
Grantee to amend, modify, increase, vary, alter or supplement this Security
Deed, the Note or any of the other Loan Documents and to extend the
maturity date of the indebtedness secured hereby and to increase the amount
of the indebtedness secured hereby and to waive or forebear the exercise of
any of its rights and remedies hereunder or under any of the other Loan
Documents and to release any collateral or security for the indebtedness
secured hereby, in each and every case without obtaining the consent of the
holder of such junior lien and without the lien or security interest of
this Security Deed losing its priority over the rights of any such junior
lien.
4.22 GRANTEE MAY FILE PROOFS OF CLAIM. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition or other proceedings affecting Grantor or the
principals or general partners in Grantor, or their respective creditors or
property, Grantee, 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 Grantee allowed in such
proceedings for the entire secured indebtedness at the date of the
institution of such proceedings and for any additional amount which may
become due and payable by Grantor hereunder after such date.
4.23 FIXTURE FILING. This Security Deed shall be effective from
the date of its recording as a financing statement filed as a fixture
filing with respect to all goods constituting part of the Property which
are or are to become fixtures.
4.24 AFTER-ACQUIRED PROPERTY. All property acquired by Grantor
after the date of this Security Deed which by the terms of this Security
Deed shall be subject to the lien and the security interest created hereby,
shall immediately upon the acquisition thereof by Grantor and without
further mortgage, conveyance or assignment become subject to the lien and
security interest created by this Security Deed. Nevertheless, Grantor
shall execute, acknowledge, deliver and record or file, as appropriate, all
and every such further mortgages, security agreements, financing
statements, assignments and assurances, as Grantee shall require for
accomplishing the purposes of this Security Deed.
4.25 NO REPRESENTATION. By accepting delivery of any item
required to be observed, performed or fulfilled or to be given to Grantee
pursuant to the Loan Documents, including, but not limited to, any
officer's certificates balance sheet, statement of profit and loss or other
financial statement, survey, appraisal or insurance policy, Grantee shall
not be deemed to have warranted, consented to, or affirmed the sufficiency,
legality, effectiveness or legal effect of the same, or of any term,
provision or condition thereof, and such acceptance of delivery thereof
shall not be or constitute any warranty, consent or affirmation with
respect thereto by Grantee.
4.26 COUNTERPARTS. This Security Deed may be executed in any
number of counterparts, each of which shall be effective only upon delivery
and thereafter shall be deemed an original, and all of which shall be taken
to be one and the same instrument, for the same effect as if all parties
hereto had signed the same signature page. Any signature page of this
Security Deed may be detached from any counterpart of this Security Deed
without impairing the legal effect of any signatures thereon and may be
attached to another counterpart of this Security Deed identical in form
hereto but having attached to it one or more additional signature pages.
4.27 PERSONAL LIABILITY. Notwithstanding anything to the
contrary contained in this Security Deed, the liability of Grantor and its
officer, directors, general partners, managers, members and principals for
the indebtedness secured hereby and for the performance of the other
agreements, covenants and obligations contained herein and in the other
Loan Documents shall be limited as set forth in Section 2.04 of the Note.
4.28 RECORDING AND FILING. Grantor will cause the Loan Documents
and all amendments and supplements thereto and substitutions therefor to be
recorded, filed, re-recorded and re-filed in such manner and in such places
as Grantee shall reasonably request, and will pay on demand all such
recording, filing, re-recording and re-filing taxes, fees and other
charges. Grantor shall reimburse Grantee, or its servicing agent, for the
costs incurred in obtaining a tax service company to verify the status of
payment of taxes and assessments on the Property.
4.29 ENTIRE AGREEMENT AND MODIFICATION. This Security Deed and
the other Loan Documents contain the entire agreements between the parties
relating to the subject matter hereof and thereof and all prior agreements
relative hereto and thereto which are not contained herein or therein are
terminated. This Security Deed and the other Loan Documents may not be
amended, revised, waived, discharged, released or terminated orally but
only by a written instrument or instruments executed by the party against
which enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. Any alleged amendment, revision, waiver,
discharge, release or termination which is not so documented shall not be
effective as to any party.
4.30 MAXIMUM INTEREST. The provisions of this Security Deed and
of all agreements between Grantor and Grantee, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited
so that in no contingency or event whatsoever, whether by reason of demand
or acceleration of the maturity of the Note or otherwise, shall the amount
paid, or agreed to be paid ("Interest"), to Grantee for the use,
forbearance or retention of the money loaned under the Note exceed the
maximum amount permissible under applicable law. If, from any circumstance
whatsoever, performance or fulfillment of any provision hereof or of any
agreement between Grantor and Grantee shall, at the time performance or
fulfillment of such provision shall be due, exceed the limit for Interest
prescribed by law or otherwise transcend the limit of validity prescribed
by applicable law, then ipso facto the obligation to be performed or
fulfilled shall be reduced to such limit and if, from any circumstance
whatsoever, Grantee shall ever receive anything of value deemed Interest by
applicable law in excess of the maximum lawful amount, an amount equal to
any excessive Interest shall be applied to the reduction of the
principal balance owing under the Note in the inverse order of
its maturity (whether or not then due) or at the option of Grantee be paid
over to Grantor, and not to the payment of Interest. All Interest
(including any amounts or payments deemed to be Interest) paid or agreed to
be paid to Grantee shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until
payment in full of the principal balance of the Note so that the Interest
thereon for such full period will not exceed the maximum amount permitted
by applicable law. This paragraph will control all agreements between
Grantor and Grantee.
4.31 INTEREST PAYABLE BY GRANTEE. Grantee shall cause funds in
the Replacement Reserve to be deposited into an interest bearing account of
the type customarily maintained by Grantee or its servicing agent for the
investment of similar reserves, which account may not yield the highest
interest rate then available. Interest payable on such amounts shall be
computed based on the daily outstanding balance in the Replacement Reserve.
Such interest shall be calculated on a simple, non-compounded interest
basis based solely on contributions made to the Replacement Reserve by
Grantor. All interest earned on amounts contributed to the Replacement
Reserve shall be retained by Grantee and added to the balance in the
Replacement Reserve and shall be disbursed for payment of the items for
which other funds in the Replacement Reserve are to be disbursed.
4.32 SECONDARY MARKET. Grantee may sell, transfer and deliver
the Loan Documents to one or more investors in the secondary mortgage
market. In connection with such sale, may retain or assign responsibility
for servicing the loan or may delegate some or all of such responsibility
and/or obligations to a servicer, including, but not limited to, any
subservicer or master servicer, on behalf of the investors. All references
to Grantee herein shall refer to and include, without limitation, any such
servicer, to the extent applicable.
4.33 ATTORNEYS' FEES. Notwithstanding anything to the contrary
contained in this Security Deed, in the event Grantor has an obligation to
pay attorneys' fees or legal fees under this Security Deed or any of the
other Loan Documents, such obligation shall be in an amount equal to
reasonable attorneys' fees actually incurred.
4.34 FURTHER STIPULATIONS. The additional covenants, agreements
and provisions set forth in EXHIBITS B, C AND D attached hereto and made a
part hereof, if any, shall be a part of this Security Deed and shall, in
the event of any conflict between such further stipulations and any of the
other provisions of this Security Deed, be deemed to control.
IN WITNESS WHEREOF, Grantor has executed this Security Deed as of
the day and year first above written.
Signed, sealed and delivered
in the presence of
GREENTREE LLC
_______________________________ By: ML Apartments I, Inc.,
UNOFFICIAL WITNESS its managing member
/s/
_______________________________ By: ___________________
NOTARY PUBLIC Name:
Title:
My Commission Expires:
_______________________________
[SEAL]
Consented and Agreed to Signed, sealed and delivered
as to the provisions of in the presence of
Section 1.34
ML Apartments I, Inc.,
a Georgia corporation ________________________________
UNOFFICIAL WITNESS
By: ________________________
Name: ________________________________
Title: NOTARY PUBLIC
My Commission Expires:
________________________________
[SEAL]
EXHIBIT A
PROPERTY DESCRIPTION
EXHIBIT B
GRANTOR'S CERTIFICATE
The undersigned is the _____________ of ________, the general
partner of _________________ (the "Grantor") and has made due investigation
as to the matters hereinafter set forth and does hereby certify the
following to induce FIRST UNION NATIONAL BANK, (the "Grantee") to advance
the aggregate sum of $__________________ (the "Disbursement") [from the
Replacement Reserve or Repair and Remediation Reserve or Environmental
Reserve] to the Grantor pursuant to the terms of that certain Deed to
Secure Debt and Security Agreement, dated as of _____ __, 199_, between the
Grantee and the Grantor (together with any amendments, modifications,
supplements and replacements thereof or therefor, the "Security Deed"),
dated ____________, pursuant to that certain Disbursement request which is
being submitted to the Grantee. (Capitalized terms used and not otherwise
define shall have the respective meanings given to them in the Security
Deed.)
1. No default beyond any applicable notice and/or grace period
exists under the Security Deed or under any of the other Loan Documents.
2. The [Repairs, Deferred Maintenance or Environmental Work]
relative to the Disbursement have been delivered or provided to Grantor and
are properly, completely and permanently installed on or about the Property
or otherwise properly completed, as applicable.
3. All of the statements, invoices, receipts and information
delivered in connection with the Disbursement request being submitted to
the Grantee in connection herewith are true and correct as of the date
hereof, and the amount requested in said Disbursement request accurately
reflects the precise amounts due and payable during the period covered by
such Disbursement request. All of the funds to be received pursuant to
such Disbursement request shall be used solely for the purpose of
reimbursing the Grantor for items previously paid.
4. Nothing has occurred subsequent to the date of the Security
Deed which has or may result in the creation of any lien, charge or
encumbrance upon the Real Estate or the Improvements or any part thereof,
or anything affixed thereto or used in connection therewith, or which has
or may substantially and adversely impair the ability of the Grantor to
make any payments of principal and interest on the Note or the ability of
the Grantor to meet its obligations under the Security Deed.
5. None of the labor, materials, overhead or other items of
expense specified in the Disbursement request submitted herewith has
previously been the basis of any Disbursement request by the Grantor or any
payment by the Grantee and, when added to all sums previously disbursed by
Grantee on account of the [Deferred Maintenance, Repairs or Environmental
Work], do not exceed the costs of all [Deferred Maintenance, Repairs or
Environmental Work] services completed, installed and/or delivered, as
applicable, to the date of that certificate.
6. The amount remaining in the [Account] allocated to the payment
of items on the [Deferred Maintenance, Repairs or Environmental Work] will
be sufficient to pay in full the entire remaining cost of [Deferred
Maintenance, Repairs or Environmental Work] required to be completed in
accordance with the Security Deed.
7. All work required permits and approvals required to complete
the work which work is now in process or was previously completed have been
obtained.
8. All conditions to the Disbursement to be made in accordance
with the Disbursement request submitted herewith have been met in
accordance with the terms of the Security Deed.
By:__________________________
EXHIBIT C
DESCRIPTION OF WORK Total
1. Refinish pool $ 7,000.00
2. Replace sidewalks where displaced by tree $ 8,000.00
roots, settled or cracked
TOTAL (@ 125%) $18,750.00
EXHIBIT D
"PERMITTED INVESTMENTS" shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than
par, including those issued by Beneficiary, Servicer, REMIC Trustee or any
of their respective affiliates:
(i) direct obligations of, or obligations fully guaranteed
as to payment of principal and interest by, (a) the United States or
any agency or instrumentality thereof provided such obligations are
backed by the full faith and credit of the United States of America,
or (b) FHLMC, FNMA, the Federal Farm Credit System or the Federal Home
Loan Banks provided such obligations at the time of purchase or
contractual commitment for purchase are qualified by the Rating
Agencies as a Permitted Investment hereunder as evidenced in writing;
(ii) fully FDIC-insured demand and time deposits in or
certificates of deposit of, or bankers' acceptances issued by, any
bank or trust company, savings and loan association or savings bank,
provided that the commercial paper and long-term unsecured debt
obligations of such depository institution or trust company have the
highest rating available for such securities by the Rating Agencies,
or such lower rating as will not result in the downgrading or
withdrawal of the rating then assigned to the Certificates by any
Rating Agency as evidenced in writing;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a depository
institution or trust company (acting as principal) described in clause
(ii) above;
(iv) general obligations of or obligations guaranteed by any
State of the United States or the District of Columbia receiving the
highest long-term unsecured debt rating available for such securities
by the Rating Agencies, or such lower rating as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency as evidenced in writing;
(v) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the
United States of America or any State thereof or the District of
Columbia and is rated by the Rating Agencies in their highest long-
term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; PROVIDED,
HOWEVER, that securities issued by any such corporation will not be
Permitted Investments to the extent that investment therein will cause
the then outstanding principal amount of securities issued by such
corporation and held as part of the Central Account to exceed 20% of
the aggregate principal amount of all Permitted Investments held in
the Central Account;
(vi) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations payable on demand or on a specified date not more than one
year after the date of issuance thereof) that is rated by the Rating
Agencies in their highest short-term unsecured debt rating available
at the time of such investment or contractual commitment providing for
such investment, and is issued by a corporation the outstanding senior
long-term debt obligations of which are then rated by the Rating
Agencies in their highest rating available in their short-term and
long-term unsecured debt ratings, or such lower rating as will not
result in the downgrading or withdrawal of the rating then assigned to
the Certificates by any Rating Agency as evidenced in writing;
(vii) guaranteed reinvestment agreements acceptable to the
Rating Agencies issued by any bank, insurance company or other
corporation rated in the highest long-term unsecured rating levels
available to such issuers by the Rating Agencies throughout the
duration of such agreements, or such lower rating as will not result
in the downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency as evidenced in writing;
(viii) units of taxable money market funds, which funds are
regulated investment companies, seek to maintain a constant net asset
value per share and invest solely in obligations backed by the full
faith and credit of the United States, which funds have been
designated in writing by the Rating Agencies as Permitted Investments
with respect to this definition; and
(ix) if previously confirmed in writing to the REMIC
Trustee, any other demand, money market or time deposit, or any other
obligation, security or investment, that may be acceptable to the
Rating Agencies as a permitted investment of funds backing securities
having ratings equivalent to their initial rating of the Certificates;
PROVIDED, HOWEVER, that no instrument or security shall be a Permitted
Investment if (y) such instrument or security evidences a right to receive
only interest payments or (z) the right to receive principal and interest
payments derived from the underlying investment provide a yield to maturity
in excess of 120% of the yield to maturity at par of such underlying
investment.
