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EXHIBIT 10.2
This instrument was prepared by and |
after recordation should be returned to: |
|
Thomas A. Hanson, Esquire |
Carlton Fields |
222 Lakeview Avenue |
Suite 1400 |
West Palm Beach, FL 33401 |
|
|
___________________SPACE ABOVE THIS LINE FOR RECORDER'S USE_____________________
REAL ESTATE MORTGAGE AND SECURITY AGREEMENT
This REAL ESTATE MORTGAGE AND SECURITY AGREEMENT ("Mortgage") is made and
entered into as of May 8, 2000, by LAKE SEMINOLE SQUARE MANAGEMENT COMPANY,
INC., A TENNESSEE CORPORATION and FREEDOM GROUP-LAKE SEMINOLE SQUARE, INC., A
TENNESSEE CORPORATION, (collectively "Mortgagor") to AID ASSOCIATION FOR
LUTHERANS, A WISCONSIN CORPORATION ("Mortgagee"):
A. RECITALS.
1. Mortgagor is indebted to Mortgagee, as evidenced by a Mortgage Note
("Note") of even date, in the aggregate principal sum of Twelve Million and
No/100 Dollars ($12,000,000.00), both principal and interest of the Note being
payable at the office of Mortgagee as more specifically set forth therein.
2. Mortgagor and Mortgagee desire and intend that the Note be secured by
(1) this Mortgage; (2) Assignment of Rents and Leases; (3) Financing Statements;
and (4) other and sundry documents and agreements. This Mortgage and all other
documents and agreements given as security for the Note are referred to
collectively as the "Loan Documents" and singularly as a "Loan Document."
B. GRANTING CLAUSE.
To secure the payment of the principal, interest, and premium, if any, on the
Note and to secure the performance by Mortgagor of each and every term,
covenant, agreement and condition contained in the Note and the Loan Documents,
Mortgagor does hereby mortgage, warrant, convey and grant a security interest
unto Mortgagee, its successors and assigns, forever, all and singular, in the
following described properties:
1. The real estate ("Land") described and set forth in Exhibit A which is
attached to and hereby made a part of this Mortgage and all of Mortgagor's
rights as the successor in interest to the "Developer," as defined in the
Declaration of Condominium identified on Exhibit A hereto, as amended from
time to time (the
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"Declaration") together with any greater or other estate or interest in
the Land hereafter acquired by Mortgagor due to the termination of life
estate interest therein or otherwise;
2. All right, title, and interest of Mortgagor, now or at any time hereafter
existing, in and to all highways, roads, streets, alleys and other public
and private thoroughfares, bordering on or adjacent to the Land, together
with all right, title, and interest of Mortgagor to the Land lying within
such highways, roads, streets, alleys, and other public and private
thoroughfares and all heretofore or hereafter vacated highways, roads,
streets, alleys and public and private thoroughfares and all strips and
gores adjoining or within the Land or any part thereof;
3. All of Mortgagor's right, title and interest as an owner of the
Condominium units described in Exhibit A hereto in all buildings,
structures, improvements, plants, works, and fixtures now or at any time
hereafter located on the land which is subject to the Declaration and,
without any further act, all articles of personal property now or
hereafter owned or leased by Mortgagor used in connection with the Land
and such buildings, structures, improvements, plants, works and fixtures,
all extensions, additions, renewals, betterments, substitutions, and
replacements thereof;
4. All rights, privileges, permits, licenses, easements, consents, tenements,
hereditaments, and appurtenances now or at any time hereafter belonging to
or in any wise appertaining to the Land or to any property now or at any
time hereafter comprising a part of the property subject to this Mortgage;
and all right, title and interest of Mortgagor, whether now or at any time
hereafter existing, in all reversions and remainders to the Land and such
other property, and all leases, subleases, rents, income, issues, profits,
royalties, and revenues derived from, concerning or belonging to such
Land, life estate interests in the Land and other property subject to this
Mortgage or any part thereof;
5. Any and all proceeds of the conversion, whether voluntary or involuntary,
of all or any part of the Land and other property and interests subject to
this Mortgage into cash or liquidated claims, including without limitation
by reason of specification, proceeds of insurance and condemnation awards;
6. All causes of action and recoveries for any damage, loss or diminution in
value of the Premises; and
7. All other personal property identified in Exhibit B set forth hereto.
Any reference herein to the "Premises" shall be deemed to apply to the
above-described Land and all other property, interests and items covered by this
Granting Clause, unless
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the context shall require otherwise but shall exclude all life estate interests
which are "Permitted Exceptions," as hereinafter defined, or which may hereafter
be sold by Mortgagor pursuant to the provisions of this Mortgage. Any reference
herein to the "Collateral" shall be deemed to apply to personalty located on the
Premises.
C. WARRANTIES.
Mortgagor hereby warrants to and covenants with Mortgagee, its successors and
assigns, that:
1. Mortgagor has good and indefeasible title to the Premises in fee simple,
free and clear of all liens, charges, and encumbrances whatever except
those specifically set forth in the lender's title insurance policy
delivered to Mortgagee with this Mortgage which have been approved in
writing by Mortgagee and the rights of life estate residents pursuant to
their repurchase agreements and Lake Seminole Square Club Membership
Agreements and the rights of residents in the assisted care facilities
located within what is described as condominium unit B on Exhibit A hereto
(collectively, the "Continuing Obligations") (the "Permitted
Encumbrances");
2. Mortgagor has the full right and authority to execute and deliver to
Mortgagee the Note and the Loan Documents;
3. Mortgagor has taken all action required by law or otherwise necessary to
make the Note and Loan Documents the valid, binding, and legal obligations
of Mortgagor; and
4. The lien and security interest created by this Mortgage are and will be
kept a first lien and security interest upon the Premises, except for the
Permitted Encumbrances, and Mortgagor will forever warrant and defend the
same to Mortgagee, its successors and assigns, against any and all claims
and demands whatever.
Provided always, and upon the express condition that if all of the principal,
interest and premium, if any, on the Note shall be paid and discharged in
accordance with the terms and conditions therein contained, and if all other
agreements and obligations of Mortgagor under the Note, the Loan Documents, and
all other agreements between Mortgagor and Mortgagee whether now or at any time
hereafter existing, shall be discharged in accordance with the terms and
conditions therein and herein expressed, then these presents to be void,
otherwise this Mortgage to remain in full force and effect.
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ARTICLE I
COVENANTS OF MORTGAGOR
Mortgagor does hereby covenant and agree with Mortgagee, its successors and
assigns, as follows:
1.1 PAYMENT. Mortgagor shall duly and punctually pay the principal, interest,
and premium, if any, on the Note hereby secured, when and as the same
shall become due and payable in accordance with the terms thereof, and
shall duly and punctually perform and observe all of the terms, covenants,
and conditions to be performed or observed by Mortgagor in the Note and
the Loan Documents.
1.2 SECURITY. All of the Premises shall stand as security for the Note and for
the performance or observance by Mortgagor of the terms, covenants, and
agreements to be performed or observed by Mortgagor in the Note, the Loan
Documents, and all other agreements between Mortgagor and Mortgagee
whether now or at any time hereafter existing, and the lien and security
interest hereof, subject only to the exceptions herein noted, is and shall
be a valid and continuing first lien and security interest upon all of the
Premises. From time to time upon the request by Mortgagee, Mortgagor
shall, at its expense, execute and deliver such supplemental mortgages,
security agreements, additional assignments of leases and any further
conveyances and instruments as may, in the reasonable opinion of
Mortgagee, be necessary or desirable in order to effectuate, continue and
preserve the lien and security interest created by this Mortgage and the
Loan Documents and the priority thereof upon all the Premises and to make
subject to the lien hereof any property hereafter to be subjected to the
lien of this Mortgage.
1.3 NEGATIVE COVENANTS. So long as any indebtedness secured hereby remains
unpaid, Mortgagor covenants and agrees with Mortgagee that it will not,
directly or indirectly, without the prior written consent of Mortgagee:
LIENS. Create, permit to exist, or assume any mortgage, pledge, or other
lien or encumbrance upon the Premises or any part thereof or any interest
therein other than (1) the Mortgage lien and security interest of
Mortgagee created by the Loan Documents; and (2) the Permitted
Encumbrances, or
VOTING UNDER THE DECLARATION. Vote pursuant to the rights established in
the Declaration or the related articles of incorporation or bylaws adopted
in connection therewith, to amend the Declaration or to abandon or
terminate the Condominium created by the Declaration; permit the consent
to any mortgages on life estate interests in the Land.
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DISPOSITIONS. Sell, transfer, assign, convey, or otherwise dispose of in
any manner, whether voluntarily or involuntarily, by operation of law or
otherwise, the Premises or any part thereof or any interest therein. For
purposes of this subparagraph, a sale of the Premises shall mean (1) any
transfer or other alteration in any interest which any member, general
partner or shareholder holds (directly or indirectly) in Mortgagor or in
any entity which holds an interest in Mortgagor (excluding transfers of
shares of American Retirement Corporation, a Tennessee corporation ("ARC")
which is the ultimate parent company of Mortgagor), including any transfer
of any membership interests, general partnership interests or controlling
shares of any limited liability company, partnership or corporate
Mortgagor (except a corporate trustee) to any person or persons other than
those holding such interests or shares (i) on the date this Mortgage is
executed, with regard to any limited liability company, partnership or
corporate Mortgagor, or (ii) on the date of a permitted assignment of the
beneficial interest in Mortgagor, with regard to a successor limited
liability company, partnership or corporate Mortgagor in the event of such
a permitted assignment; (2) any termination of partnership or corporate
existence by any limited liability company, partnership or corporate
Mortgagor; and (3) any grant of an option to purchase, an installment
sales contract or land contract.
Notwithstanding any provisions in this Mortgage to the contrary, Mortgagee
will permit Mortgagor to sell and/or re-sell life estates in the
residential portion of the Premises in the ordinary course of its business
during the term hereof, if Mortgagee is satisfied, in its sole discretion
exercised in good faith, that: (1) the use of the Premises will not change
and (2) the loan secured hereby is not in default and no event has
occurred which if left uncured would result in an Event of Default (as
defined in the Note). Mortgagor shall provide prompt notice to Mortgagee
of all such sales and, provided such sales are permitted pursuant to the
foregoing provisions, Mortgagee shall promptly execute partial releases of
this Mortgage with respect to such life estate interests upon receipt from
Mortgagor of a written request therefor accompanied by information
satisfactory to the Mortgagee concerning the material terms of such sale
and a review fee of $100.00 for each sale.
1.4 AFFIRMATIVE COVENANTS. So long as all or any part of the principal,
interest, premium, or any other amount due Mortgagee under the Note, any
of the Loan Documents or any other agreement between Mortgagor and
Mortgagee whether now or at any time hereafter existing, remains
outstanding and unpaid, Mortgagor hereby further covenants and agrees that
it shall:
PROPERTY TAXES. Pay and discharge all taxes, assessments and governmental
charges of every character lawfully imposed upon the Premises, and
Mortgagor shall not suffer any of the Premises to be sold or forfeited for
any tax, special assessment, governmental charge or claim whatsoever.
Promptly following payment of taxes, assessments and governmental
impositions upon the Premises,
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Mortgagor shall deliver to Mortgagee a copy of the bill therefor showing
payment thereof.
LIENS. Pay and discharge all claims for labor, materials, or supplies,
which if unpaid, might by law become a lien or charge against the
Premises.
MORTGAGE TAXES. Pay and discharge all taxes, assessments, and governmental
charges of every character whatever that may be levied upon or on account
of this Mortgage or the indebtedness secured hereby whether levied against
Mortgagor or otherwise. In the event payment by Mortgagor of any tax,
assessment or charge referred to in the foregoing sentence would result in
the payment of interest in excess of the rate permitted by law then
Mortgagee may, at its option, (i) declare the entire principal balance of
the indebtedness secured hereby, together with interest thereon, to be due
and payable immediately, without notice, or (ii) pay that amount or
portion of such tax, assessment or governmental charge as renders payment
of the balance thereof by Mortgagor not in excess of the interest rate
permitted by law, in which event Mortgagor shall pay the balance of such
tax, assessment or governmental charge.
DEPOSITS. Pay to Mortgagee monthly, in addition to each payment required
under the Note, a sum equivalent to one-twelfth (1/12) of the amount
estimated by Mortgagee to be sufficient to enable Mortgagee to pay, at
least thirty (30) days before they become due, all taxes, assessments and
other similar charges levied against the Premises. Mortgagee shall not be
required to hold such sums in segregated accounts, and no interest shall
be payable by Mortgagee to Mortgagor with respect to any amounts paid by
Mortgagor pursuant to this subparagraph. Upon demand by Mortgagee,
Mortgagor shall deliver and pay over to Mortgagee such additional sums as
are necessary to satisfy any deficiency in the amount necessary to enable
Mortgagee to fully pay any of the items hereinabove mentioned before the
same become due. In the event of an Event of Default, or any default by
Mortgagor in the performance of any terms, covenants, or conditions
contained herein, in the Note, or in any of the Loan Documents, Mortgagee
may apply against the indebtedness secured hereby, in such manner as
Mortgagee may determine, any funds of Mortgagor then held by Mortgagee
under this subparagraph. In the event of a sale of the Premises (excluding
sales of life estate interests permitted hereby), any funds on deposit
with Mortgagee automatically, and without the necessity of further notice
or written assignment, shall be transferred and held thereafter for the
account of the new owner to be applied in accordance with this paragraph;
provided, however, no sale of the Premises shall be made subject to this
Mortgage without Mortgagor first obtaining the prior written consent of
Mortgagee as herein required.
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MAINTENANCE, WASTE, USE. Maintain, preserve, and keep the Premises and all
parts thereof, in good repair, working order and condition, and from time
to time make all needful and proper repairs, renewals and replacements
thereto so as at all times to maintain the efficiency thereof. Mortgagor
shall abstain from and will not suffer the commission of waste on the
Premises and will promptly notify Mortgagee in writing of the occurrence
of any loss or damage to the Premises. Mortgagor shall not materially
alter the buildings, improvements, fixtures, equipment, machinery or other
property now or hereafter upon the Land comprising the Premises, or remove
the same therefrom, or permit any tenant or other person to do so, without
the written consent of Mortgagee. Mortgagor will, at its sole cost and
expense, promptly remove, or cause the removal of, any and all hazardous
or toxic substances or wastes or solid wastes or the effects thereof at
any time identified as being on, in, under, or affecting the Premises
which in the sole and good faith judgment of Mortgagee lessen the value of
the Premises. Mortgagor will not permit any portion of the Premises to be
used for any unlawful purpose or for any purpose other than that for which
the same is now being used or intended to be used, as represented in
writing by Mortgagor to Mortgagee. Mortgagor will comply promptly with all
laws, statutes, ordinances, regulations, rules and orders of all public
authorities having jurisdiction thereof and with all covenants, agreements
and restrictions relating to the Premises or the use, occupancy and
maintenance thereof. Mortgagee shall have the right at any time, and from
time to time, to enter the Premises for the purpose of inspecting the
same. Nonpayment of any taxes, assessments or other governmental charges
levied or assessed upon the Premises, or any part thereof, shall
constitute waste.
SURVEY OF INDEPENDENT INSPECTOR. Allow Mortgagee, at any time and from
time to time, based upon a good faith reason or purpose, to engage an
independent inspector to survey the adequacy of the maintenance of the
Premises. If such maintenance is found to be inadequate, such inspector
shall determine the estimated cost of such repairs and replacements
necessary to protect and preserve the rentability and useability of the
said Premises. In such event, at the option of Mortgagee and within
fifteen (15) days after written demand therefor, a sum equal to the amount
of such estimated cost shall thereupon become due and payable by Mortgagor
to be applied upon the indebtedness unless within such period Mortgagor,
at its own cost and expense, shall have completed or shall have commenced
and thereafter with diligence, completes such repairs and replacements. In
such event, Mortgagor shall also reimburse Mortgagee the cost of such
survey, the same being secured hereby. If the survey determines such
maintenance to be adequate, then the cost therefor shall be at the expense
of Mortgagee.
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CONDUCT OF BUSINESS. Do or cause to be done all things necessary to
preserve and keep in full force and effect its legal existence and all
licenses, rights, and privileges necessary for the conduct of its business
and comply with all valid and applicable statutes, laws, rules, and
regulations.
INSURANCE. Mortgagor shall keep the Premises (which for the purpose of
this subsection Insurance and the subsection Restoration shall include all
of the common and limited common elements of the buildings which are part
of the condominium created by the Declaration) insured against loss or
damage by fire, tornado, windstorm and extended coverage perils and such
other hazards as may reasonably be required by Mortgagee, for the full
replacement value, including without limitation on the generality of the
foregoing, war damage insurance whenever in the opinion of Mortgagee such
protection is necessary and is available from an agency of the United
States of America. Mortgagor shall also provide liability insurance with
such limits for personal injury and death and property damage as Mortgagee
may require in the minimum amount of Two Million and No/100 Dollars
($2,000,000.00) per occurrence. Mortgagor shall also procure and keep in
force with responsible insurers, insurance in such amounts as may be
determined by Mortgagee to cover loss, total or partial, of rentals and
other revenues derived from the Premises for a period of at least twelve
(12) months as required by Mortgagee in the minimum amount of Six Million
and No/100 Dollars ($6,000,000.00). All policies of insurance to be
furnished hereunder shall be in forms, amounts, and with insurance
companies satisfactory to Mortgagee, with the New York standard mortgagee
clause endorsement attached to all policies in favor of and in form
satisfactory to Mortgagee, including a provision requiring that the
coverage evidenced thereby shall not be terminated or materially modified
without thirty (30) days' prior written notice to Mortgagee. Mortgagor
shall deliver all policies, including additional and renewal policies,
together with evidence of payment of premiums thereon, to Mortgagee, and
in the case of insurance about to expire, shall deliver renewal policies
not less than thirty (30) days prior to their respective dates of
expiration. The provisions in this subsection, Insurance, in the next
subsection, Adjustment of Losses with Insurer and Application of Proceeds
of Insurance and in Section 3.2 hereof shall be controlling between
Mortgagor and Mortgagee and Mortgagor shall comply with such provisions of
this Mortgage, notwithstanding any provisions to the contrary in the
Declaration.
ADJUSTMENT OF LOSSES WITH INSURER AND APPLICATION OF PROCEEDS OF
INSURANCE. Give immediate notice to Mortgagee in the event of any loss or
damage covered by insurance required to be carried hereunder. Mortgagee
may thereupon make proof of such loss or damage, if the same is not
promptly made by Mortgagor. All proceeds of insurance, in the event of
such loss or damage, shall be payable to Mortgagee and any affected
insurance company is authorized and directed to make
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payment thereof directly to Mortgagee. Mortgagee is authorized and
empowered to settle, adjust, or compromise any claims for loss, damage, or
destruction, under any such policy or policies of insurance. Mortgagee
shall give written notice within a reasonable time to Mortgagor of any
such adjustment or compromise. The power granted hereby shall be deemed to
be coupled with an interest and to be irrevocable.
In the event of damage or destruction if (a) there is projected annual net
operating income from the leases remaining in full force and effect after
such damage or destruction to equal one hundred twenty percent (120%) of
the sum of the annual principal and interest payments of the Note, the
annual taxes and assessments and the insurance premiums, (b) during the
period of repair, there is sufficient rental income including rental
abatement insurance which is sufficient to pay scheduled principal and
interest payments on the Note and sufficient to comply with the other
provisions of this section, (c) the insurance proceeds are insufficient to
pay off the outstanding balance of the Note, (d) restoration and repair is
reasonably estimated to be concluded at least three (3) months prior to
the maturity of the Note or at least three (3) months prior to any date
the Note may be called due and payable, (e) the insurers do not deny
liability as to the insureds, and (f) there is no breach or default under
the terms of the Note or the Loan Documents, such proceeds, after
deducting therefrom any expenses incurred in the collection thereof, shall
be used to reimburse Mortgagor for the cost of the rebuilding or
restoration of buildings or improvements on said Premises. The buildings
and improvements shall be so restored or rebuilt as to be of at least
equal value and substantially the same character as prior to such damage
or destruction. In the event Mortgagor is entitled to reimbursement out of
insurance proceeds, such proceeds shall be made available, from time to
time, upon Mortgagee being furnished with satisfactory evidence of the
estimated cost of completion thereof and with such architect's
certificates, waivers of lien, contractors' sworn statements and other
evidence of cost and of payments as Mortgagee may reasonably require and
approve. If the estimated cost of the work exceeds One Hundred Thousand
and No/100 Dollars ($100,000.00) Mortgagee shall also be furnished with
all plans and specifications for such rebuilding or restoration as
Mortgagee may reasonably require and approve. No payment made prior to the
final completion of the work shall exceed ninety percent (90%) of the
value of the work performed from time to time, and at all times the
undisbursed balance of said proceeds remaining in the hands of Mortgagee
shall be at least sufficient to pay for the cost of completion of the work
free and clear of liens. If the amount of such insurance proceeds is
insufficient to cover the cost of building or restoration, Mortgagor shall
pay such cost in excess of the insurance proceeds before being entitled to
any reimbursement out of the insurance proceeds. Any surplus which may
remain out of the insurance proceeds after payment of such cost of repair
or rebuilding shall, at the option of Mortgagee,
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be applied on account of the indebtedness (whether then due or not)
secured hereby. In the event Mortgagor is not entitled to reimbursement
out of such proceeds, then, at the option of Mortgagee, such proceeds
shall be applied without prepayment premium in payment or reduction of the
indebtedness secured hereby, whether due or not.
FINANCIAL STATEMENTS. Deliver without expense to Mortgagee, within ninety
(90) days after the end of Mortgagor's fiscal year, copies of a detailed
statement of income and expenses of Mortgagor, ARC (within one hundred
twenty (120) days after the end of its fiscal year), the Premises and the
Lake Seminole Square Condominium Association, Inc., a Florida corporation
(the "Association"), containing a balance sheet as at the close of such
fiscal year and an income statement for such fiscal year, which shall be
in the form and contain information of the type customary in businesses of
the kind conducted by Mortgagor and shall be prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved, and shall be in reasonable detail and be certified
by Mortgagor (and by an independent certified public accountant of
recognized standing as to ARC) and which must show a solvent condition for
all entities involved. Such financial statements shall include a current
rent roll of the Premises and a current schedule of all residential life
estate owners showing by unit number the then current amount of refundable
deposit, certified by Mortgagor, showing, with respect to each tenant, the
name of the tenant, the space occupied, the date and term of such lease,
the amount of annual rental, percentage rental (if any) and additional
rental, and all renewal, purchase and termination options. Where the
leases require tenant to furnish financial statements, Mortgagor shall
cause similar financial statements to be furnished to Mortgagee for all
such tenants of the Premises, or any portion thereof, and all guarantors
of any lease(s) of the Premises, or any portion thereof. Mortgagor shall
deliver to Mortgagee, on an annual basis copies of all federal and state
examination reports with respect to the Premises promptly after receipt
thereof and, with reasonable promptness, such other data and information
as Mortgagee may reasonably request.
PAYMENT OF OBLIGATIONS. Pay all sums, the failure to pay which may result
in the imposition of a lien, charge or encumbrance on all or any portion
of the Premises or which may result in conferring upon a tenant of any
part of the Premises a right to recover such sums as prepaid rent or to
deduct such sums from future rental payments.
OPERATION OF PREMISES. At all times operate the Premises in a sound and
efficient manner and not acquire any fixtures, equipment, furnishings or
other property covered, or intended to be covered, by the Loan Documents
subject to any lien, charge or encumbrance taking precedence over the lien
of this Mortgage.
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FURTHER INSTRUMENTS. Execute, acknowledge, deliver, and cause to be
recorded or filed in the manner and place required by any present or
future law any instrument that may be requested by Mortgagee, to publish
notice, protect or continue the lien of the Loan Documents or the interest
of Mortgagee in the Premises, and Mortgagor will pay or cause to be paid
(i) all filing and recording taxes and fees incident to each filing and
recording, (ii) all expenses incurred by Mortgagee in connection with the
preparation, execution, and acknowledgment of all such instruments, other
taxes, duties, imposts, assessments, and charges arising out of or in
connection with the execution and delivery of such instruments.
COMPLIANCE WITH AGREEMENTS. Perform and comply with all of the terms,
covenants, and conditions to be performed and complied with by Mortgagor
under the Note, the Loan Documents and all other agreements now or at any
time hereafter existing between Mortgagor and Mortgagee.
TENANT DEPOSITS. Hold in trust, in a manner approved by Mortgagee, all
sums received by Mortgagor from any firm, corporation, person, or persons
as security for the performance of the terms, covenants, or conditions
contained in any lease or agreement for the use or occupancy of the
Premises or any part thereof.
COMPLIANCE WITH LEASES. Promptly observe and perform all covenants,
conditions, and agreements contained in any lease or leases or other
agreements now or hereafter affecting or relating to the Premises, or any
portion thereof, on the part of Mortgagor to be observed and performed
including the Continuing Obligations; enforce the observance and
performance of all covenants, conditions, and agreements by other parties
to such leases and agreements; not accept any prepayment of rent or any
installments of rent under such leases for more than one (1) month in
advance; furnish to Mortgagee a copy of such lease or agreement, forthwith
upon its execution; and do or cause to be done all things necessary to
preserve, intact and unencumbered, any and all easements, appurtenances,
and other interests and rights in favor of or constituting any portion of
the Premises. It is understood and agreed that all rents and revenues
deriving from or arising from the Premises received by Mortgagor are to be
held by Mortgagor as a trust fund to be used first for payments required
and due under the Note and legitimate operating expenses of the Premises
and any excess may be retained by Mortgagor.
RESTORATION. If any of the Premises shall be damaged or destroyed, in
whole or in part, by fire or other casualty or by taking in condemnation
proceedings or the exercise of any right of eminent domain, then promptly
restore, replace, or rebuild the same to as nearly as possible the value,
quality, and condition, they were in immediately prior to such fire or
other casualty or taking, with such alterations or changes as may be
approved in writing by Mortgagee; provided, however, if Mortgagee has no
obligation under the Adjustment of Losses with Insurers and
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Application of Proceeds of Insurance portion of this Section 1.4 to make
insurance or condemnation proceeds available for such purpose, and
Mortgagee does not otherwise elect to make any such proceeds so available,
Mortgagor's obligations under this Restoration provision shall not include
the obligation referred to above but only an obligation to make such
repairs as are necessary to make the remaining undamaged portion of such
improvements (if any) useable for their intended purpose.
PROPERTY MANAGEMENT. Any management company involved with the management
of the Premises and any management contracts relating to the Premises
including, without limitation, agreements with the Association concerning
maintenance and repair of the Premises and property of life estate
interest owners (and any amendments thereto) must be acceptable to
Mortgagee in its sole discretion. Any management agreement shall provide
that it shall be terminable upon not more than thirty (30) days' notice at
Mortgagee's option in the event of an occurrence of an Event of Default
and be subordinate to Mortgagee's rights under the Note and Loan
Documents.
1.5 ANTI-FORFEITURE. Mortgagor hereby represents and warrants to Mortgagee
that there has not been committed by Mortgagor or any other person
involved with the Premises any act or omission affording the federal
government or any state or local government the right of forfeiture as
against the Premises or any part thereof or any monies paid in performance
of Mortgagor's obligations under the Note or under any of the other Loan
Documents. Mortgagor hereby covenants and agrees not to commit, permit or
suffer to exist any act or omission affording such right of forfeiture. In
furtherance thereof, Mortgagor hereby indemnifies Mortgagee and agrees to
defend and hold Mortgagee harmless from and against any loss, damage or
injury by reason of the breach of the covenants and agreements or the
warranties and representations set forth in this Section 1.5. Without
limiting the generality of the foregoing, the filing of formal charges or
the commencement of proceedings against Mortgagor, Mortgagee or all or any
part of the Premises under any federal or state law for which forfeiture
of the Premises or any part thereof or of any monies paid in performance
of Mortgagor's obligations under the Loan Documents is a potential result,
shall, at the election of Mortgagee, constitute an Event of Default
hereunder without notice or opportunity to cure.
1.6 AMERICANS WITH DISABILITIES ACT. Mortgagor hereby represents to Mortgagee
that the Premises are in full compliance with the Americans with
Disabilities Act (the "ADA Act") and all regulations promulgated
thereunder. Mortgagor hereby covenants and agrees not to permit, commit or
suffer to exist any condition which might result in a violation to the ADA
Act, and if any such condition should occur to immediately remedy any such
condition. Mortgagor hereby indemnifies and
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agrees to defend and hold Mortgagee harmless from and against any loss,
cost or damage by reason of the breach of the covenants, agreements and
indemnities set forth in this Section 1.6.
1.7 CURE OF MORTGAGOR'S DEFAULT. If Mortgagor shall fail to comply with any of
the terms, covenants, and agreements contained herein or in the Note or
any of the Loan Documents, then Mortgagee may (but shall not be obligated
to do so) without further demand upon Mortgagor and without waiving or
releasing Mortgagor from any such obligation, remedy such default for the
account of Mortgagor. Mortgagor agrees to repay, upon demand by Mortgagee,
all sums advanced by Mortgagee to remedy such default, together with
interest at the rate at which interest accrues on amounts due under the
Note after the same become due. All such sums, together with interest as
aforesaid, shall become additional indebtedness secured by the Mortgage.
No such payment by Mortgagee shall be deemed to relieve Mortgagor from any
default hereunder.
Mortgagee is hereby authorized, in the place and stead of Mortgagor,
relating to taxes, assessments, water rents and charges, sewer rents and
charges and other governmental or municipal charges, fines, impositions or
liens asserted against the Premises to make such payments according to any
bill, statement or estimate procured from the appropriate public office
without inquiry into the accuracy of the bill, statement or estimate or
into the validity of any tax, assessment, sale, forfeiture, tax lien or
title or claim thereof. Relating to any apparent or threatened adverse
title, lien, statement of lien, encumbrance, claim or charge, Mortgagee,
acting reasonably, shall be the sole judge of the legality or validity of
same. Mortgagee may do so whenever, in its judgment and discretion, such
advance or advances shall seem necessary or desirable to protect the full
security intended to be created by this instrument.
ARTICLE II
EVENTS OF DEFAULT: REMEDIES
2.1 EVENTS OF DEFAULT; ACCELERATION. If any Event of Default as defined in the
Note shall occur, then Mortgagee may, by written notice to Mortgagor,
declare the then outstanding principal of the Note to be forthwith due and
payable, and upon such declaration, the principal, together with interest
accrued thereon and to the extent permitted by law, any premium which is
then payable on the Note upon a prepayment of principal, shall become due
and payable forthwith at the place of payment specified in the Note,
anything in this Mortgage or in the Note to the contrary notwithstanding.
In addition, Mortgagee may proceed to protect and enforce its rights under
the Note, and/or any of the Loan Documents, by foreclosure proceedings as
against all or any part of the Premises, without regard to the situs of
such property, by either suit in equity, action at law, or other
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appropriate proceedings, including actions for the specific performance of
any covenant or agreement contained in this Mortgage or in the Note or in
aid of the exercise of any power granted in this Mortgage or in the Note,
or in any of the Loan Documents, or may proceed in any other manner to
enforce the payment of the Note and any other legal or equitable right of
Mortgagee and of the legal holder of the Note.
2.2 RECEIVER. It is expressly understood and agreed by Mortgagor that, at any
time after an Event of Default, Mortgagee shall be entitled to as a matter
of right, without notice and without giving bond to Mortgagor, or anyone
claiming under it, without regard to the solvency or insolvency of
Mortgagor or any person liable for any indebtedness hereby secured or to
the value of the Premises or occupancy hereof as a homestead, to have
itself appointed as a "Mortgagee in Possession" or have a receiver
appointed of all or any part of the Premises and of the earnings, income,
rents, issues, and profits thereof, pending such proceedings, with such
powers as the court making such appointment shall confer, and Mortgagor
does hereby irrevocably consent to such appointment.
2.3 POSSESSION BY MORTGAGEE. Upon the happening of an Event of Default, then
and in every such case Mortgagee, either itself or by its agents or
attorneys, may, in its discretion, enter upon and take possession of the
Premises, or any part or parts thereof, and may exclude Mortgagor and its
agents and employees wholly therefrom, and having and holding the same,
Mortgagee may use, operate, manage, and control the Premises or any part
thereof, and conduct the business thereof, either personally or by
superintendents, managers, agents, employees and attorneys, and from time
to time, by purchase, repair or construction, may maintain and restore and
may insure and keep insured, the buildings, structures, improvements,
fixtures, and other property, real and personal, comprising the Premises.
After paying the expense of operating the Premises, including a reasonable
commission, Mortgagee shall apply the moneys arising therefrom to the
amount then due on the Note.
2.4 SALE BY MORTGAGEE. Any real estate or any interest or estate therein sold
pursuant to any court order or decree obtained pursuant to the Mortgage
shall be sold in one parcel, as an entirety, or in such parcels and in
such manner or order as Mortgagee, in its sole discretion, may elect, to
the maximum extent permitted by the laws of the state in which the
Premises are situated and Mortgagee recognizes and agrees that the
purchaser at any such sale shall be required to observe the Continuing
Obligations, as defined in Section C (1) Warranties hereof, provided those
Continuing Obligations do not differ in any material respect (without
Mortgagee's written consent) from those which exist on the date hereof.
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2.5 PURCHASE BY MORTGAGEE. In the case of any sale of the Premises pursuant to
any judgment or decree of any court or at public auction or otherwise in
connection with the enforcement of any of the terms of this Mortgage,
Mortgagee, its successors or assigns, may become the purchaser, and for
the purpose of making settlement for or payment of the purchase price,
shall be entitled to deliver over and use the Note and any claims for
interest accrued and unpaid thereon, together with all other sums, with
interest, advanced and unpaid hereunder, in order that there may be
credited as paid on the purchase price the sum then due under the Note
including principal and interest thereon and all other sums with interest,
advanced and unpaid hereunder. Specifically, but not as a limitation, on
foreclosure of this Mortgage there shall be included in the computation of
the amount due the amount of a reasonable fee for legal services
(including, without limitation, the allocated costs for services of
Mortgagee's in-house counsel) rendered to Mortgagee in connection with the
foreclosure proceedings and other collection efforts, including the
reasonable costs of an environmental audit of the Premises, an engineering
report, as well as costs of title evidence, appraisals and all
disbursements, allowances, and costs provided by law.
Mortgagor agrees that to the extent Mortgagor is entitled to present
competent evidence of the fair market value of the Premises as of the date
of foreclosure or in connection with a bankruptcy proceeding affecting
Mortgagor and/or the Premises, the following shall be considered competent
evidence for the fact finder's determination of the fair market value of
the Premises as of the date of the foreclosure sale:
(i) the Premises shall be valued in an "as is" condition as of the
date of the foreclosure sale, without any assumption or expectation
that the Premises will be repaired or improved in any manner before
a resale of the Premises after foreclosure;
(ii) the valuation shall be based upon an assumption that the
foreclosure purchaser desires a prompt resale of the Premises for
cash promptly (but no later than twelve (12) months) following the
foreclosure sale;
(iii) all expenses to be incurred when the purchaser at the
foreclosure sale resells the Premises, including reasonable closing
costs customarily borne by the seller in a commercial real estate
transaction, should be taken into account in such valuation,
including, without limitation, brokerage commissions, title
insurance, a survey of the Premises, tax prorations, attorneys'
fees, and marketing costs;
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(iv) the gross fair market value of the Premises shall be further
discounted to account for any estimated holding costs associated
with maintaining the Premises pending sale, including, without
limitation, utilities expenses, property management fees, taxes and
assessments (to the extent not accounted for in (iii) above), and
other maintenance expenses; and
(v) any expert opinion testimony given or considered in connection
with a determination of the fair market value of the Premises must
be given by persons having at least five (5) years experience in
appraising similarly improved property in the vicinity where the
Premises is located and being actively engaged therein at the time
of such testimony.
2.6 PAYMENT OF INDEBTEDNESS AND OTHER EXPENSES. In any case in which Mortgagee
has the right to sell the Premises or to institute foreclosure
proceedings, Mortgagor agrees to pay to Mortgagee the whole amount of
principal and interest then due and payable and, to the extent permitted
by law, prepayment premium, if any, with interest on overdue principal and
interest at the rate specified in the Note from the date the same become
payable whether by lapse of time, acceleration or otherwise. In the event
Mortgagee commences any proceeding to foreclose this Mortgage or any other
suit in equity, action at law or other appropriate proceeding to enforce
its rights under the Note or any of the Loan Documents, Mortgagor
covenants and agrees to pay to Mortgagee all costs and expenses (including
actual attorneys' fees) paid or incurred by Mortgagee in connection
therewith, which costs and expenses may be included in any judgment in
Mortgagee's favor in any such suit, action or proceeding.
2.7 REMEDIES CUMULATIVE. No remedy herein conferred upon or otherwise
available to Mortgagee is intended to be or shall be construed to be
exclusive of any other remedy or remedies; but each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder and under any of the Loan Documents and now or hereafter
existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any
such right or power, or shall be construed to be a waiver of any such
default, or an acquiescence therein; nor shall the giving, taking or
enforcement of any other or additional security, collateral or guaranty
for the payment of the indebtedness secured under this Mortgage operate to
prejudice, waive or affect the security of this Mortgage or any rights,
powers or remedies hereunder; nor shall Mortgagee be required to first
look to, enforce, or exhaust any such other or additional security,
collateral, or guaranty.
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2.8 WAIVER OF RIGHTS. To the extent that such rights may then be lawfully
waived, Mortgagor hereby covenants that it will not at any time insist
upon or plead, or in any manner whatever claim or take any benefit or
advantage of, (i) any exemptions, stay or extension or moratorium law now
or at any time hereafter in force; (ii) any law now or hereafter in force
providing for the valuation or appraisement of the Premises or any part
thereof prior to any sale or sales thereof to be made pursuant to any
provisions herein contained, or pursuant to the decree, judgment or order
of any court of competent jurisdiction; (iii) any law now or at any time
hereafter made or enacted granting a right to redeem the property so sold
or any part thereof; (iv) all rights of marshaling; and (v) any right to
trial by jury of any claim or issue arising hereunder or in connection
herewith. To the extent permitted by law, Mortgagor expressly waives for
itself and on behalf of each and every person acquiring any interest in or
title to the Premises or any part thereof, subsequent to the date of this
Mortgage, all benefit and advantage of any such law or laws; and covenants
that it will not invoke or utilize any such law or laws or otherwise
hinder, delay or impede the execution of any power herein granted and
delegated to Mortgagee, but will suffer and permit the execution of every
such power as though no such law or laws had been made or enacted.
2.9 INDULGENCES BY MORTGAGEE. In the event that Mortgagee (a) grants any
extension of time or forbearance with respect to the payment of any
indebtedness secured by this Mortgage; (b) takes other or additional
security for the payment thereof; (c) waives or fails to exercise any
right granted herein or under the Note or any of the Loan Documents; (d)
grants any release, with or without consideration, of the whole or any
part of the security held for the payment of the debt secured hereby or
the release of any person liable for payment of such debt; (e) amends or
modifies in any respect any of the terms and provisions hereof or of the
Note (including substitution of another note(s)) or any of the Loan
Documents; then and in any such event, such act or omission to act shall
not, unless otherwise agreed in writing by Mortgagee, release Mortgagor,
or any co-makers, sureties, guarantors, shareholders, under any covenant
of the Note or any Loan Document, nor preclude Mortgagee from exercising
any right, power, or privilege herein granted or intended to be granted in
the event of any other default then made or any subsequent default or
Event of Default, and without in any way impairing or affecting the lien
or priority of this Mortgage or of any Loan Document.
2.10 APPLICATION OF PROCEEDS. The proceeds of any sale or sales of the Premises
or any part thereof pursuant to this Article II shall be applied in the
following order:
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(a) To the payment of all costs of the sale and the foreclosure
proceedings, including actual attorneys' fees and the cost of title
searches, abstracts, surveys, engineering reports, appraisals and
environmental investigations;
(b) To the payment of all other expenses of Mortgagee, including all
moneys expended by Mortgagee and all other amounts payable by
Mortgagor to Mortgagee hereunder or under the Loan Documents, with
interest thereon; and all taxes, assessments or liens superior to
the lien thereof;
(c) To the payment of the principal, interest and premium, if any,
on the Note;
(d) To the payment of any other sums owed by Mortgagor to Mortgagee;
and
(e) To the payment of the surplus, if any, to Mortgagor or to
whomsoever shall be entitled thereto.
2.11 ABANDONMENT OF PROCEEDINGS. In case Mortgagee shall have proceeded to
enforce any right under this Mortgage by foreclosure, sale, entry or
otherwise, and such proceedings shall have been discontinued or abandoned
for any reason or shall have been determined adversely, then, and in every
such case, Mortgagor and Mortgagee shall be restored to their former
positions and rights hereunder with respect to the Premises subject to the
lien hereof.
2.12 PARTIAL PAYMENTS. Acceptance by Mortgagee of any payment which is less
than payment in full of all amounts due and payable at the time of such
payment shall not constitute a waiver of Mortgagee's right to demand
payment of the balance due, or any other rights of Mortgagee at that time
or any subsequent time.
2.13 TENDER OF PAYMENT AFTER ACCELERATION. In case, after legal proceedings are
instituted to foreclose the lien of this Mortgage, tender is made of the
entire indebtedness due hereunder, Mortgagee shall be entitled to
reimbursement for expenses incurred in connection with legal proceedings,
including such expenditures as are enumerated above, and if the Note
provides for a "prepayment privilege fee" at the time tender of payment is
made, then the amount necessary to pay the loan in full shall include the
prepayment privilege fee in addition to all expenses, and such expenses
and prepayment privilege fee shall be so much additional indebtedness
secured by this Mortgage, and no such suit or proceedings shall be
dismissed or otherwise disposed of until such fees, expenses, and charges
shall have been paid in full.
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ARTICLE III
POSSESSION AND RELEASE OF THE PREMISES
3.1 RELEASE AND REPLACEMENT OF EQUIPMENT. Mortgagor may, without obtaining any
release from Mortgagee, sell or otherwise dispose of, free from the lien
of this Mortgage, any of the Premises described in Paragraph (3) of the
Granting Clause hereof which may have become obsolete, inadequate, worn
out, or otherwise unsuitable or unnecessary for use in connection with the
Premises, provided, however, that Mortgagor shall have theretofore and
since the date hereof acquired replacements therefor (in such manner as
shall extend to Mortgagee a first lien or security interest therein)
which, while not being necessarily of the same character, will be of
comparable value and efficiency.
3.2 CONDEMNATION. If all or any part of the Premises is damaged, taken, or
acquired, either temporarily or permanently, in any condemnation
proceeding, by exercise of the right of eminent domain, by sale in lieu of
condemnation or eminent domain, or by the alteration of the grade of any
street affecting the said Premises, the amount of any award or other
payment for such taking or damages made in consideration thereof, to the
extent of the full amount of the then remaining unpaid indebtedness
secured hereby, is hereby assigned to Mortgagee, who is empowered to
collect and receive the same and to give proper receipts therefor in the
name of Mortgagor, and the same shall be paid forthwith to Mortgagee. Any
award or payment so received by Mortgagee may, at the option of Mortgagee,
be retained and applied, in whole or in part, to the indebtedness secured
hereby (whether or not then due and payable), in such manner as Mortgagee
may determine except as specifically limited hereinafter, or released, in
whole or in part, to Mortgagor for the purpose of altering, restoring, or
rebuilding any remaining part of the Premises which may have been altered,
damaged, or destroyed as the result of such taking, alteration, or
proceeding, but Mortgagee shall not be obligated to see to the application
of any amounts so released. Any applicable prepayment fee provided for by
law which results from the application of the award to the prepayment of
the indebtedness shall be paid as part of the award and not in addition
thereto. Until such time as such award or other payment is actually
received by Mortgagee and applied to the indebtedness secured hereby and
Mortgagee has agreed in writing to a reduction of the monthly payments,
Mortgagor shall continue paying the constant monthly payment for principal
and interest on the unpaid principal balance of the Note at the rate of
interest therein specified.
3.3 SATISFACTION OF MORTGAGE. Whenever Mortgagor shall pay or cause to be paid
the entire principal, interest and premium, if any, due and to become due
upon the Note, and shall have performed and observed all of the terms,
covenants, and conditions by it to be performed or observed under the
Note, this Mortgage,
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and all other agreements now or at any time hereafter existing between
Mortgagor and Mortgagee, then and in such event the Premises shall revert
to Mortgagor; and Mortgagee shall forthwith execute and deliver to
Mortgagor an appropriate instrument of release, satisfaction and
discharge.
ARTICLE IV
SECURITY AGREEMENT
This Mortgage is hereby deemed to be as well a Security Agreement for the
purpose of creating hereby a security interest securing the indebtedness.
Without derogating any of the provisions of this Mortgage, Mortgagor by this
Mortgage:
(a) grants to Mortgagee a security interest in all of Mortgagor's right, title
and interest in and to all Collateral and fixtures, together with all
additions, accessions and substitutions and all similar property hereafter
acquired and used or obtained for use on, or in connection with the
Premises. The proceeds of said Collateral and fixtures are intended to be
secured hereby; however, such intent shall never constitute an express or
implied consent on the part of Mortgagee to the sale of any or all
Collateral or fixtures;
(b) agrees that the security interest hereby granted by this Mortgage shall
secure the payment of the indebtedness specifically described and shall
also secure payment of any future debt or advancement owing by Mortgagor
to Mortgagee with respect to the Premises;
(c) agrees not to sell, convey, mortgage or grant a security interest in, or
otherwise dispose of or encumber, any of the Collateral or fixtures or any
of Mortgagor's right, title or interest therein without first securing
Mortgagee's written consent unless such Collateral or fixture is replaced
with Collateral or fixtures of comparable value and efficiency (in such
manner as shall extend to Mortgagee a first lien or security interest
therein); and Mortgagee may, at its sole option, require Mortgagor to
apply the proceeds from the disposition of Collateral or fixtures in
reduction of the indebtedness secured hereby;
(d) agrees that if Mortgagor's rights in the Collateral are voluntarily or
involuntarily transferred, whether by sale, creation of a security
interest, attachment, levy, garnishment or other judicial process, without
the written consent of Mortgagee, such transfer constitutes an Event of
Default by Mortgagor under the terms of this Mortgage provided, that
notwithstanding any provision of this Mortgage to the contrary, Mortgagor
may create security interests in vehicles and office equipment including
computer equipment purchased after the date hereof in an amount not to
exceed $150,000.00.;
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(e) agrees that upon or after the occurrence of any Event of Default
hereunder, Mortgagee may, with or without notice to Mortgagor, exercise
its rights to declare all indebtedness secured by the security interest
created hereby immediately due and payable, in which case Mortgagee shall
have all rights and remedies granted by law and more particularly the
Uniform Commercial Code as enacted in Florida;
(f) agrees, to the extent permitted by law and without limiting any rights and
privileges herein granted to Mortgagee, that Mortgagee may dispose of any
or all of the Collateral at the same time and place upon giving the same
notice provided for in this Mortgage, and in the same manner as provided
under the terms and conditions of this Mortgage; and
(g) authorizes Mortgagee to file, in the jurisdiction where this Mortgage will
be given effect, or in such other jurisdiction as filing may be required
to perfect the security interest granted hereunder, financing statements
including renewal or confirmation thereof, covering the Collateral; and at
the request of Mortgagee, Mortgagor will join Mortgagee in executing one
or more such financing statements including amendment, renewal or
confirmation thereof, pursuant to the Uniform Commercial Code as enacted
in Florida in a form satisfactory to Mortgagee, and will pay the cost of
filing the same in all public offices at any time and from time to time
wherever Mortgagee deems filing or recording of any financing statements
including renewal or confirmation thereof or of this instrument to be
desirable or necessary.
ARTICLE V
MISCELLANEOUS
5.1 SEVERABILITY. If any term, covenant, or condition of the Note or any Loan
Document, or the application thereof to any person or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of the Note, and
the Loan Documents, and the application of such term, covenant, or
condition to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby and each
term, covenant, or condition of the Note and the Loan Documents shall be
valid and be enforced to the fullest extent permitted by law.
5.2 COUNTERPARTS. This Mortgage may be simultaneously executed in any number
of counterparts, and all said counterparts executed and delivered, each as
an original, shall constitute but one and the same instrument.
5.3 SUBROGATION. Mortgagee shall be subrogated to all liens, although released
of record, which are paid out of the proceeds of the Note or other
indebtedness secured by this Mortgage.
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5.4 NOTICES. Whenever in this Mortgage it shall be required or permitted that
notice be given by any party to the other, such notice shall be in
writing, and any notice so sent shall be deemed to have been given on the
date that the same is deposited in the United States mail, postage
prepaid. Notices shall be addressed to Mortgagee at 4321 North Ballard
Road, Appleton, Wisconsin 54919, Attention Investment Department, and to
Mortgagor at the address set forth below its signature or at such other
address as either party may from time to time designate in writing in lieu
thereof.
5.5 CHANGE IN TAXATION OF MORTGAGES. In the event of the passage, after the
date of this Mortgage, of any law deducting from the value of the real
property comprising the Premises, for the purpose of taxation, any lien
thereon, or changing in any way the laws now in force for the taxation of
mortgages, deeds of trust, or debts secured thereby, for state or local
purposes, or the manner of the operation of any such taxes so as to affect
the interest of Mortgagee, then in such event, Mortgagor shall bear and
pay the full amount of such taxes, provided, however, that if for any
reason payment by Mortgagor of any such taxes would be unlawful, or if the
payment thereof would constitute usury or render the loan or indebtedness
secured hereby wholly or partially usurious under any of the terms or
provisions of the Note, the Mortgage or otherwise, Mortgagee may, at its
option, declare the whole sum secured by this Mortgage with interest
thereon to be immediately due and payable, without a prepayment fee, or
Mortgagee may, at its option, pay that amount or portion of such taxes as
renders the loan or indebtedness secured hereby unlawful or usurious, in
which event Mortgagor shall concurrently therewith pay the remaining
lawful and non-usurious portion or balance of said taxes.
5.6 NO EXCESS INTEREST. If any charge in the nature of interest provided for
herein, in the Note, or in any instrument evidencing indebtedness secured
hereby shall result, because of the monthly reduction of principal or for
any reason at any time during the life of the Note, in an effective rate
of interest which, for any month, transcends the limit of the usury or any
other law(s) applicable to the loan evidenced by the Note, then all sums
in excess of those lawfully collectible as interest for the period in
question shall, without further agreement of notice between or by any
party hereto, be applied upon principal immediately upon receipt of such
moneys by the holder of the Note, with the same force and effect as if
Mortgagor had specifically designated such extra sums to be so applied to
principal and the holder of the Note had agreed to accept such extra
payment(s) as a premium-free prepayment. In no event shall any agreed to
or actual exaction as consideration for the loan evidenced by the Note
transcend the limits imposed or provided by the law applicable to this
transaction for the use or detention of money or for the forbearance in
seeking its collection.
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5.7 WAIVERS BY MORTGAGOR. To the fullest extent permitted by applicable law,
Mortgagor, for itself, its successors and assigns, and each and every
person with any interest in the Premises, or any part thereof, whether now
owned or hereafter acquired, hereby waives notice of maturity, demand,
presentment for payment, diligence in collection, and notice of
non-payment and protest; hereby consents and agrees to any extension of
time, whether one or more, for the payment thereof and/or to any and all
renewals thereof; and hereby consents and agrees that Mortgagee may amend
the terms thereof, may release all or any part of the security for the
payment thereof, and may release any party liable for the payment thereof,
without, in any event, affecting the terms or effect of this Mortgage or
the obligations or liabilities hereunder of Mortgagor, its successors or
assigns, or any person with any interest in the Premises, or any part
thereof, whether now owned or hereafter acquired.
5.8 ADDITIONAL INSTRUMENTS. Mortgagor, from time to time, within fifteen (15)
days after request by Mortgagee, shall execute, acknowledge, and deliver
to Mortgagee such mortgages, chattel mortgages, security agreements, or
other similar security instruments, in form and substance satisfactory to
Mortgagee, covering all property of any kind, whatsoever, owned by
Mortgagor or in which Mortgagor may have any interest which, in the sole
opinion of Mortgagee, is essential to the operation of the property
covered by this Mortgage. Neither a request so made by Mortgagee, nor the
failure of Mortgagee to make such a request, shall be construed as a
release of such property, or any part thereof, from the lien of this
Mortgage, it being understood and agreed that this covenant and any such
chattel mortgage, security agreement, or other similar security
instrument, delivered to Mortgagee, are cumulative and given as additional
security.
5.9 APPLICABLE LAW. This Mortgage shall be interpreted in accordance with and,
in all respects, governed by the internal laws of the State of Florida.
5.10 EXPENSES OF MORTGAGEE.
(a) If Mortgagee is made a party to any suit or proceeding by reason of
the interest of Mortgagee in the Premises, or if the Note or any
Loan Document is placed in the hands of an attorney or attorneys to
defend or enforce any rights of Mortgagee, then Mortgagor shall
reimburse Mortgagee for all costs and expenses, including by way of
representation only, actual attorneys' fees, travel and lodging
expenses, recording fees, incurred by Mortgagee in connection
therewith. All amounts incurred by Mortgagee hereunder shall be
secured hereby and shall be due and payable by Mortgagor to
Mortgagee forthwith on demand, with interest
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thereon at the rate at which interest accrues on amounts due under
the Note after the same became due.
(b) In the event Mortgagor initiates any request to Mortgagee for (a)
changes to this Mortgage or any collateral documents thereto, (b)
releases of any part of the Premises or other property upon which a
security interest has been given to secure the indebtedness, or (c)
any other waivers, opinions or other documentary changes (other than
a satisfaction or assignment of the Mortgage at maturity or in
connection with a permitted prepayment), then Mortgagor shall
reimburse Mortgagee for any actual legal fees and expenses incurred
by Mortgagee in connection with the preparation and review of such
documentation. The need for legal review and preparation of
documentation shall be in the unrestricted discretion of Mortgagee.
5.11 SUCCESSORS OF MORTGAGOR. In the event of the sale or transfer of all or
any part of the Premises (excluding the sale of life estate interests
permitted herein), by operation of law or otherwise and regardless of
whether or not such sale or transfer constitutes an Event of Default,
Mortgagee is authorized and empowered to deal with the transferee with
reference to this Mortgage, the Premises, or the debt secured hereby, or
with reference to any of the terms or conditions contained herein, as
fully and to the same extent as it might deal with Mortgagor and without
in any way releasing or discharging any liabilities of Mortgagor hereunder
or under the Note or the Loan Documents.
5.12 ESTOPPEL CERTIFICATES. Mortgagor, upon request of Mortgagee, shall, from
time to time, certify to Mortgagee or to any proposed assignee of this
Mortgage, by an instrument in form satisfactory to Mortgagee, duly
acknowledged, the amount then owing on the sums secured hereby and the
date on which interest hereon has been paid and whether any offsets or
defenses exist against payment thereof or performance of any obligation of
Mortgagor under the Note, this Mortgage, or any of the Loan Documents,
within five (5) days if such request is made personally, or within ten
(10) days if such request is made by mail. Mortgagee and any proposed
assignee of this Mortgage shall have the right to rely on any such
certification.
5.13 AMENDMENT. Neither this Mortgage nor any term, covenant, or condition
contained herein may be amended, modified, or terminated, except by an
agreement in writing, signed by the party against whom enforcement of the
amendment, modification, or termination is sought.
5.14 CONSTRUCTION. By execution of this Mortgage, Mortgagor acknowledges that
both parties participated in the drafting of the documents, and agrees
that the Note, this Mortgage, and the Loan Documents shall be construed
without regard
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to any presumption or rule requiring construction against the party
causing such instruments to be drafted. The headings and captions
contained in this Mortgage are solely for convenience of reference and
shall not affect its interpretation. All terms and words used in this
Mortgage, whether singular or plural and regardless of the gender thereof,
shall be deemed to include any other number and any other gender as the
context may require.
5.15 RECEIPT BY MORTGAGOR. Mortgagor hereby acknowledges that a full, true, and
complete copy of this Mortgage (including Exhibits A and B hereto) was
delivered to and received by it on the date of actual execution hereof by
Mortgagor, as set forth below.
5.16 NO PARTNERSHIP - THIRD PARTIES. Nothing contained in the Note or Mortgage
shall be construed in a manner to create any relationship between
Mortgagor and Mortgagee other than the relationship of borrower and lender
and Mortgagor and Mortgagee shall not be considered partners or
co-venturers for any purpose. The terms and provisions of the Note and
this Mortgage are for the benefit of Mortgagor, Mortgagee and their
respective successors, assigns, endorsees and transferees and all persons
claiming under or through them, and no other person shall have any right
or cause of action on account thereof.
5.17 RIGHT TO CONTEST. Mortgagor shall have the right to contest in good faith
the validity or amount of any tax assessment or lien arising from any work
performed at or materials furnished to the premises which right, however,
is conditional upon (i) such contest having the effect of preventing the
collection of the tax, assessment or lien so contested and the sale or
forfeiture of the premises or any part thereof or interest therein to
satisfy the same, (ii) Mortgagor giving Mortgagee written notice of its
intention to contest the same in a timely manner, which, with respect to
any contested tax or assessment, shall mean before any such tax,
assessment or lien has been increased by any penalties or costs, and with
respect to any contested mechanic's lien claim, shall mean within thirty
(30) days after Mortgagor receives actual notice of the filing thereof,
(iii) Mortgagor making and thereafter maintaining with Mortgagee or such
other depository as Mortgagee may designate, a deposit of cash (or United
States government securities, in discount form, or other security as may,
in Mortgagee's sole discretion, be acceptable to Mortgagee, and in either
case having a present value equal to the amount herein specified) in an
amount no less than One Hundred Fifty Percent (150%) of the amount which,
in Mortgagee's reasonable opinion, determined from time to time, shall be
sufficient to pay in full such contested tax, assessment or lien and
penalties, costs and interest that may become due thereon in the event of
a final determination thereof adverse to Mortgagor or in the event
Mortgagor fails to prosecute such contest as herein required, or in lieu
thereof, Mortgagor providing to Mortgagee title insurance over
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<PAGE> 26
such matters in form and substance reasonably acceptable to Mortgagee, and
(iv) Mortgagor diligently prosecuting such contest by appropriate legal
proceedings. In the event Mortgagor shall fail to prosecute such contest
with reasonable diligence or shall fail to maintain sufficient funds, or
other security as aforesaid, on deposit as hereinabove provided, Mortgagee
may, at its option, liquidate the securities deposited with Mortgagee, and
apply the proceeds thereof and other monies deposited with Mortgagee in
payment of, or on account of, such taxes, assessments, or liens or any
portion thereof then unpaid, including the payment of all penalties and
interest thereon.
5.18 FUTURE ADVANCES. It is agreed that this Mortgage shall also secure such
future or additional advances for construction, improvements,
preservation, maintenance and operation of the Premises and the security
for the loan as may be made by Mortgagee, whether such future advances are
obligatory or are to be made at Mortgagee's option to Mortgagor, or its
successor in title, for any purpose, provided that all those advances are
to be made within twenty (20) years from the date of this Mortgage, or
within such lesser period of time as may be provided hereafter by law as a
prerequisite for the sufficiency of actual notice or record notice of the
optional future or additional advances as against the rights of creditors
or subsequent purchasers for valuable consideration, to the same extent as
if such future advances were made on the date hereof. The total amount of
indebtedness secured by this Mortgage may decrease or increase from time
to time, but the total unpaid balance so secured at any one time shall not
exceed twice the face amount of the Note, and any disbursements made for
the payment of taxes, levies or insurance on the Premises.
IN WITNESS WHEREOF, Mortgagor has caused these presents, to be duly executed,
sealed, and delivered in ____________, Florida, as of the day and year first
above written.
WITNESSES:
LAKE SEMINOLE SQUARE MANAGEMENT
COMPANY, INC., A TENNESSEE CORPORATION
----------------------------------
Signature By:
------------------------------------
----------------------------------
Printed Name Its:
-----------------------------------
----------------------------------
Signature
FREEDOM GROUP-LAKE SEMINOLE SQUARE,
INC., A TENNESSEE CORPORATION
----------------------------------
Printed Name
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----------------------------------
Signature By:
------------------------------------
----------------------------------
Printed Name Its:
-----------------------------------
----------------------------------
Signature
Address for both:
---------------------------------- c/o American Retirement
Printed Name Corporation
111 Westwood Drive
Suite 402
Brentwood, Tennessee 37027
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<PAGE> 28
STATE OF TENNESSEE
COUNTY OF
-----------------
The foregoing instrument was acknowledged before me this _____ day of
May, 2000, by _______________________(name), as _________________(title) of Lake
Seminole Square Management Company, Inc., a Tennessee corporation, on behalf of
the corporation. He/She [please check as applicable] /______/ is personally
known to me, or has produced /______/ his/her (state) driver's license, or
/______/ his/her _____________________________(type of identification) as
identification.
----------------------------------------
(Signature)
----------------------------------------
(Printed Name)
(AFFIX NOTARIAL SEAL) NOTARY PUBLIC, STATE OF TENNESSEE
----------------------------------------
(Commission Expiration Date)
----------------------------------------
(Serial Number, If Any)
28
<PAGE> 29
STATE OF TENNESSEE
COUNTY OF
------------------
The foregoing instrument was acknowledged before me this _____ day of
May, 2000, by _______________________ (name), as _______________(title) of
Freedom Group - Lake Seminole Square, Inc., a Tennessee corporation, on behalf
of the corporation. He/She [please check as applicable] /______/ is personally
known to me, or has produced /______/ his/her (state) driver's license, or
/______/ his/her ___________________ (type of identification) as identification.
-----------------------------------------
(Signature)
-----------------------------------------
(Printed Name)
(AFFIX NOTARIAL SEAL) NOTARY PUBLIC, STATE OF TENNESSEE
-----------------------------------------
(Commission Expiration Date)
-----------------------------------------
(Serial Number, If Any)
29
<PAGE> 30
EXHIBIT A
[LEGAL DESCRIPTION]
<PAGE> 31
EXHIBIT B
All of Mortgagor's right, title and interest as an owner of the condominium
units described in Exhibit A hereto, in and to all building materials, fixtures,
equipment and other personal property to be incorporated into any improvements
constructed on the Premises and all goods, materials, supplies, fixtures,
equipment, machinery, furniture and furnishings and other personal property that
are now or may hereafter be appropriated for use on (whether such items are
stored on the Premises or elsewhere), located on, or used in connection with,
the Premises; together with all Mortgagor's right, title and interest in and to
all rents, issues and profits, and all inventory, accounts, accounts receivable,
contract rights, all accounts arising from the operation of the Premises,
franchise agreements, Lake Seminole Square Club Membership Agreements, assisted
living residency and care agreements, all other contracts and agreements
concerning the provision of services to owners of life estates in any portion of
the Premises or residing in assisted care facilities thereon, licenses and
rights, including rights in any condominium association existing with respect to
any and all portions of the Premises, general intangibles, chattel paper,
instruments, documents, notes, drafts, letters of credit, insurance policies,
premium refunds and deposits, insurance and condemnation awards and proceeds,
refunds and deposits returned by utility, cleaning, maintenance and repair and
equipment rental companies and other companies providing services to the
Premises and government agencies, tradenames, trademarks and service marks
(subject, however, to any franchise or license agreements relating thereto),
arising from or related to the Premises and any business conducted on the
Premises; and all replacements and substitutions for, or additions to, all
products and proceeds of, and all books, records, files and electronic data
relating to, any of the foregoing.
