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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): SEPTEMBER 2, 1999
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KOGER EQUITY, INC.
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(Exact Name of Registrant as Specified in Its Charter)
FLORIDA
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State or Other Jurisdiction of Incorporation)
1-9997 59-2898045
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(Commission File Number) (IRS Employer Identification No.)
8880 FREEDOM CROSSING TRAIL
JACKSONVILLE, FLORIDA 32256
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(Address of Principal Executive Offices) (Zip Code)
(904) 732-1000
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(Registrant's Telephone Number, Including Area Code)
NA
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(Former Name or Former Address, if Changed Since Last Reports)
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ITEM 5. OTHER EVENTS.
Reference is made to copies of loan documents dated as of September 2,
1999 evidencing a $45 million secured loan with Northwestern Mutual Life
Insurance Company ("Northwestern"), which documents are filed as Exhibits
10(j)(6) through 10(j)(13) to this report. These exhibits are incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
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<S> <C>
10(j)(6) Koger Equity, Inc. Tranche C Promissory
Note, dated September 2, 1999, in the
principal amount of $14,700,000 payable to
Northwestern.
10(j)(7) Koger Equity, Inc. Tranche D Promissory
Note, dated September 2, 1999, in the
principal amount of $30,300,000 payable to
Northwestern.
10(j)(8) Master Lien Instrument from Koger Equity,
Inc. to Northwestern, dated September 2,
1999, for Duval, Leon, Orange and Pinellas
Counties, Florida, Greenville County, South
Carolina, Shelby County, Tennessee, and
Bexar, El Paso and Travis Counties, Texas.
10(j)(9) Leasehold Deed of Trust and Security
Agreement, dated September 2, 1999, between
Koger Equity, Inc., and John S. Shoaf, Jr.
("Trustee"), and Northwestern for Shelby
County, Tennessee.
10(j)(10) IDB Deed of Trust and Security Agreement,
dated September 2, 1999, between the
Industrial Development Board of the City of
Memphis and County of Shelby, Koger Equity,
Inc., and Trustee and Northwestern for
Shelby County, Tennessee.
10(j)(11) Absolute Assignment of Leases and Rents from
Koger Equity, Inc. to Northwestern, dated
September 2, 1999, for Duval, Leon, Orange
and Pinellas Counties, Florida, Greenville
County, South Carolina, Shelby County,
Tennessee, and Bexar, El Paso and Travis
Counties, Texas.
10(j)(12) Environmental Indemnity Agreement, dated
September 2, 1999, between Koger Equity,
Inc. and Northwestern and others.
10(j)(13) Certificate of Borrower contained in letter,
dated September 2, 1999, from Koger Equity,
Inc. to Northwestern.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
KOGER EQUITY, INC.
Dated: November 10, 1999 By: JAMES L. STEPHENS
---------------------------------
James L. Stephens
Title: Vice President and
Chief Accounting Officer
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EXHIBIT INDEX
The following designated exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
<S> <C>
10(j)(6) Koger Equity, Inc. Tranche C Promissory
Note, dated September 2, 1999, in the
principal amount of $14,700,000 payable to
Northwestern.
10(j)(7) Koger Equity, Inc. Tranche D Promissory
Note, dated September 2, 1999, in the
principal amount of $30,300,000 payable to
Northwestern.
10(j)(8) Master Lien Instrument from Koger Equity,
Inc. to Northwestern, dated September 2,
1999, for Duval, Leon, Orange and Pinellas
Counties, Florida, Greenville County, South
Carolina, Shelby County, Tennessee, and
Bexar, El Paso and Travis Counties, Texas.
10(j)(9) Leasehold Deed of Trust and Security
Agreement, dated September 2, 1999, between
Koger Equity, Inc., and John S. Shoaf, Jr.
("Trustee"), and Northwestern for Shelby
County, Tennessee.
10(j)(10) IDB Deed of Trust and Security Agreement,
dated September 2, 1999, between the
Industrial Development Board of the City of
Memphis and County of Shelby, Koger Equity,
Inc., and Trustee and Northwestern for
Shelby County, Tennessee.
10(j)(11) Absolute Assignment of Leases and Rents from
Koger Equity, Inc. to Northwestern, dated
September 2, 1999, for Duval, Leon, Orange
and Pinellas Counties, Florida, Greenville
County, South Carolina, Shelby County,
Tennessee, and Bexar, El Paso and Travis
Counties, Texas.
10(j)(12) Environmental Indemnity Agreement, dated
September 2, 1999, between Koger Equity,
Inc. and Northwestern and others.
10(j)(13) Certificate of Borrower contained in letter,
dated September 2, 1999, from Koger Equity,
Inc. to Northwestern.
</TABLE>
4
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EXHIBIT 10(J)(6)
LOAN NO. C-332344 Documentary stamp tax has been Texas,
Florida, South Carolina and Tennessee paid
and proper stamps affixed to the Master Lien
Instrument recorded in Duval County, Florida
TRANCHE C PROMISSORY NOTE
$14,700,000.00 Dated as of September 2, 1999
For value received, the undersigned, herein called "Borrower," promises
to pay to the order of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a
Wisconsin corporation, who, together with any subsequent holder of this note, is
hereinafter referred to as "Lender", at 720 E. Wisconsin Avenue, Milwaukee, WI
53202 or at such other place as Lender shall designate in writing, in coin or
currency which, at the time or times of payment, is legal tender for public and
private debts in the United States, the principal sum of FOURTEEN MILLION SEVEN
HUNDRED THOUSAND DOLLARS or so much thereof as shall have been advanced from
time to time plus interest on the outstanding principal balance at the rate and
payable as follows:
Interest shall accrue from the date of advance until maturity
at the rate of seven and ten hundredths percent (7.10%) per annum (the
"Interest Rate").
Accrued interest only on the amount advanced shall be paid on
the first day of the month following the date on which the initial
advance is made. On the first day of the following month (the "Initial
Amortization Date") and on the first day of each and every month
thereafter, installments of principal and interest shall be paid in the
amount of $104,837.00.
All installments shall be applied first in payment of
interest, calculated monthly on the unpaid principal balance, and the
remainder of each installment shall be applied in payment of principal.
The entire unpaid principal balance plus accrued interest thereon shall
be due and payable on January 1, 2007 (the "Maturity Date").
Borrower shall have the right, upon thirty (30) days advance written
notice, beginning January 1, 2000 of paying this note in full with a prepayment
fee (the "Prepayment Fee"), provided, however, such prepayment may only be made
if Borrower concurrently prepays the Tranche A Promissory Note dated December
16, 1996 (the "Note A") in full. Upon payment in full of this note, all of the
Pool C Parks (as defined in the Master Lien Instrument) shall be released from
the lien of the Master Lien Instrument (as hereinafter defined). This fee
represents consideration to Lender for loss of yield and reinvestment costs.
Except as otherwise provided herein, the Prepayment Fee shall be the greater of
Yield Maintenance (as hereinafter defined) or 1% of the outstanding principal
balance of this note.
As is used herein, "Yield Maintenance" means the amount, if any, by which
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(i) the present value of the Then Remaining Payments (as
hereinafter defined) calculated using a periodic discount rate
(corresponding to the payment frequency under this note)
which, when compounded for such number of payment periods in a
year, equals the sum of five-tenths of one percent (.5%) and
the per annum effective yield of the Most Recently Auctioned
United States Treasury Obligations (as hereinafter defined)
having a maturity date equal to the Maturity Date (or, if
there is no such equal maturity date, then the linearly
interpolated per annum effective yield of the two Most
Recently Auctioned United States Treasury Obligations having
maturity dates most nearly equivalent to the Maturity Date) as
reported by The Wall Street Journal five business days prior
to the date of prepayment; exceeds
(ii) the outstanding principal balance of this note (exclusive of
all accrued interest).
If such United States Treasury obligation yields shall not be reported as of
such time or the yields reported as of such time shall not be ascertainable,
then the periodic discount rate shall be equal to the sum of five-tenths of one
percent (.5%) and the Treasury Constant Maturity Series yields reported, for the
latest day for which such yields shall have been so reported, as of five
business days preceding the prepayment date, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for actively traded
United States Treasury obligations having a constant maturity most nearly
equivalent to the Maturity Date.
As used herein, "Then Remaining Payments" means payments in such amounts and at
such times as would have been payable subsequent to the date of such prepayment
in accordance with the terms of this note.
As used herein, "Most Recently Auctioned United States Treasury Obligations"
means the U.S. Treasury bonds, notes and bills with maturities of 30 years, 10
years, 5 years, 3 years, 2 years or 1 year which, as of the date the prepayment
fee is calculated, were most recently auctioned by the United States Treasury.
Upon the occurrence of an Event of Default (as defined in the Master Lien
Instrument defined below) followed by the acceleration of the whole indebtedness
evidenced by this note, the payment of such indebtedness will constitute an
evasion of the prepayment terms hereunder and be deemed to be a voluntary
prepayment hereof and such payment will, therefore, to the extent not prohibited
by law, include the prepayment fee required under the prepayment in full
privilege recited above or, if such prepayment occurs prior to January 1, 2000
and results from an Event of Default followed by an acceleration of the whole
indebtedness, then such payment will, to the extent not prohibited by law,
include a prepayment fee equal to the greater of (a) Yield Maintenance or (b) 6%
of the outstanding principal balance of this note.
Notwithstanding the above, in the event the outstanding principal balance is
reduced or paid in full with insurance loss proceeds as described in the
"INSURANCE" covenant of the Master Lien Instrument or condemnation award
proceeds as described in the "Condemnation" covenant of the Master Lien
Instrument, no Prepayment Fee shall be due on the amount of such proceeds
applied.
Notwithstanding the above and provided Borrower is not in default under any
provision contained in the Loan Documents (as defined in the Master Lien
Instrument), up to twenty-five
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percent (25%) of the outstanding principal balance of this note (the "First
Partial Note C Prepayment") may be prepaid beginning twenty-four (24) months,
but no later than twelve (12) months prior to the Maturity Date, with a
Prepayment Fee of Modified Yield Maintenance (as hereinafter defined), provided,
however, such prepayment may only be made if Borrower concurrently makes the
First Partial Prepayment (as defined in Note A).
As used herein, "Modified Yield Maintenance" will be computed the same as Yield
Maintenance above, except that the Maturity Date used in the calculation will be
adjusted to one year prior to the actual Maturity Date.
Notwithstanding the above and provided Borrower is not in default under any
provision contained in the Loan Documents, up to fifty percent (50%) of the
outstanding principal balance of this note (or, if a First Partial Note C
Prepayment was made on this note, the outstanding principal balance of this note
immediately preceding such First Partial Note C Prepayment less an amount equal
to the principal amortization of this note since but not including the First
Partial Note C Prepayment) less any amount prepaid in a First Partial Note C
Prepayment with respect to this note, may be repaid without a Prepayment Fee
(the "Second Partial Note C Prepayment"), during the last twelve (12) months of
the term of this note, provided, however, such prepayment may only be made if
Borrower concurrently makes the Second Partial Prepayment (as defined in Note
A).
Borrower shall be permitted one First Partial Note C Prepayment and one Second
Partial Note C Prepayment on this note. Following the Second Partial Note C
Prepayment with respect to this note, Lender will release a portion of the
security as described in the "RELEASE OF SECURITY" provision of the Master Lien
Instrument.
Borrower acknowledges and agrees that the Interest Rate hereunder shall
be modified if certain financial statements and other reports are not furnished
to Lender, all as described in more detail in the provision of the Master Lien
Instrument entitled "FINANCIAL STATEMENTS".
This note is secured (i) by a lien instrument in multiple counterparts,
each of even date herewith executed by KOGER EQUITY, INC., a Florida corporation
to THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY or to JOHN S. SHOAF, JR. or
HENRY F. LANGE, as Trustee for the benefit of THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, (ii) by a lien instrument of even date herewith executed by
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MEMPHIS AND COUNTY OF SHELBY and
KOGER EQUITY, INC. to JOHN S. SHOAF, JR. as Trustee for the benefit of THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, (iii) by a leasehold lien instrument
of even date herewith executed by KOGER EQUITY, INC., a Florida corporation to
JOHN S. SHOAF, JR. as Trustee for the benefit of THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY and (iv) by a lien instrument in multiple counterparts, dated
as of December 16, 1996 executed by KOGER EQUITY, INC., a Florida corporation to
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY or to JOHN S. SHOAF, JR. or
MICHAEL P. CUSICK, as Trustee for the benefit of THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY (collectively, the "Master Lien Instrument"), encumbering
certain properties situated in the following locations as more particularly
described in the Master Lien Instrument:
(i) Memphis, Shelby County, Tennessee;
(ii) San Antonio, Bexar County, Texas;
(iii) Austin, Travis County, Texas;
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(iv) El Paso, El Paso County, Texas;
(v) St. Petersburg, Pinellas County, Florida;
(vi) Tallahassee, Leon County, Florida;
(vii) Greenville, Greenville County, South Carolina;
(viii) Jacksonville, Duval County, Florida;
(ix) Orlando, Orange County, Florida.
The Master Lien Instrument encumbers the Properties set forth in (i) through
(iv), above as a Deed of Trust and Security Agreement; and the Properties set
forth in (v) through (ix), above as a Mortgage and Security Agreement.
"Property" and "Properties" as used herein shall have the meaning ascribed to
them in the Master Lien Instrument.
Upon the occurrence of an Event of Default (as defined in the Master
Lien Instrument), the whole unpaid principal hereof and accrued interest shall,
at the option of Lender, to be exercised at any time thereafter, become due and
payable at once without notice, notice of the exercise of, and the intent to
exercise, such option being hereby expressly waived.
All parties at any time liable, whether primarily or secondarily, for
payment of indebtedness evidenced hereby, for themselves, their heirs, legal
representatives, successors and assigns, respectively, expressly waive
presentment for payment, notice of dishonor, protest, notice of protest, and
diligence in collection; consent to the extension by Lender of the time of said
payments or any part thereof; further consent that the real or collateral
security or any part thereof may be released by Lender, without, except for such
release, in any way modifying, altering, releasing, affecting, or limiting their
respective liability, or the lien of the Master Lien Instrument; and agree to
pay reasonable attorneys' fees and expenses of collection in case this note is
placed in the hands of an attorney for collection or suit is brought hereon and
any attorneys' fees and expenses incurred by Lender to enforce or preserve its
rights under any of the Loan Documents in any bankruptcy or insolvency
proceeding.
Any principal, interest or other amounts payable under any of the Loan
Documents (as defined in the Master Lien Instrument), not paid when due (without
regard to any notice and/or cure provisions contained in any of the Loan
Documents), including principal becoming due by reason of acceleration by Lender
of the entire unpaid balance of this note, shall bear interest from the due date
thereof until paid at the Default Rate. As used herein, "Default Rate" means the
lower of a rate equal to the interest rate in effect at the time of the default
as herein provided plus 5% per annum or the maximum rate permitted by law.
No provision of this note shall require the payment or permit the
collection of interest, including any fees paid which are construed under
applicable law to be interest, in excess of the maximum permitted by law. If any
such excess interest is collected or herein provided for, or shall be
adjudicated to have been collected or be so provided for herein, the provisions
of this paragraph shall govern, and Borrower shall not be obligated to pay the
amount of such interest to the extent that it is in excess of the amount
permitted by law. Any such excess collected shall, at the option of Lender,
unless otherwise required by applicable law, be immediately refunded to Borrower
or credited on the principal of this note immediately upon Lender's awareness of
the collection of such excess.
If the maturity of this note is accelerated for any reason before the
due date stated, or in the event of voluntary or other prepayment by the
Borrower, including any prepayments of interest or fees, or in any other event,
earned interest may never include more than the maximum amount permitted by law,
computed from the date of each disbursement until payment, and any
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unearned interest otherwise payable hereunder which is in excess of the maximum
permitted by law shall be cancelled automatically as of the date of such
acceleration or prepayment or other such event and (if theretofore paid) shall
at the option of Lender, unless otherwise required by applicable law, be either
refunded to the Borrower or credited on the principal of this note provided that
for purposes of computing interest under this note, all sum or sums paid or
payable to Lender, in connection with the loan evidenced hereby, which
constitute interest shall be taken into account by amortizing, prorating,
allocating and spreading such sum or sums, in equal parts, throughout the period
of the full stated term of the loan, to the extent permitted by law. Any
interest computation under this note shall be at not more than the maximum legal
rate, it being the intention of the parties hereto to conform strictly to all
applicable laws of the State of Wisconsin and of the United States of America
now or hereafter in force, and in the event it should be held that interest
payable under this note is in excess of the maximum permitted by such laws, the
interest chargeable hereunder shall be reduced to the maximum amount permitted
by such laws.
Notwithstanding any provision contained herein or in the Master Lien
Instrument to the contrary, if Lender shall take action to enforce the
collection of the indebtedness evidenced hereby or secured by the Master Lien
Instrument or under any of the other Loan Documents (collectively, the
"Indebtedness"), its recourse shall, except as provided below, be limited to the
Properties or the proceeds from the sale of the Properties and the proceeds
realized by Lender in exercising its rights and remedies (i) under the Absolute
Assignment (as defined in the Master Lien Instrument), (ii) under separate
guarantees, if any, (iii) under any of the other Loan Documents (as defined in
the Master Lien Instrument) and (iv) in any other collateral securing the
Indebtedness. If such proceeds are insufficient to pay the Indebtedness, Lender
will never institute any action, suit, claim or demand in law or in equity
against Borrower for or on account of such deficiency; provided, however, that
the provisions contained in this paragraph
(i) shall not in any way affect or impair the validity or
enforceability of the Indebtedness or the Master Lien
Instrument to the extent provided herein; and
(ii) shall not prevent Lender from seeking and obtaining a judgment
against Borrower for personal liability for the Recourse
Obligations.
As used herein, the term "Recourse Obligations" means
(a) rents received and other income accrued from the Properties from
and after the date of any material default under the Loan Documents
remaining uncured on the date of the foreclosure sale of any Property
pursuant to the Master Lien Instrument or the conveyance of the
Properties to Lender in lieu of foreclosure, which rents and other
income have not been applied to the payment of principal and interest
on this note or the Tranche D Promissory Note of even date herewith or
to reasonable operating expenses of the Properties,
(b) amounts necessary to repair any damage to the Properties caused by
the gross negligence or willful misconduct of Borrower or its agents,
(c) insurance loss and condemnation award proceeds released to Borrower
but not applied in accordance with any agreement between Borrower and
Lender as to their application,
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(d) the amount of insurance loss proceeds which would have been
available with respect to a casualty on the Property, but were not
available due to the default by Borrower in carrying all insurance
required by Lender,
(e) damages suffered by Lender as a result of fraud or
misrepresentation in connection with the Indebtedness by Borrower or
any other person or entity acting on behalf of Borrower,
(f) amounts necessary to pay real estate taxes, special assessments and
insurance premiums with respect to the Properties either paid by Lender
and not reimbursed prior to, or remaining due or delinquent on, either
(i) the later of (A) the date on which title vests in the purchaser at
the foreclosure sale of the Property pursuant to the Master Lien
Instrument or (B) the date on which Borrower's statutory right of
redemption shall expire or be waived or (ii) the date of the conveyance
of the Properties to Lender in lieu of foreclosure, and
(g) all outstanding amounts due under the Indebtedness, including
principal, interest and other charges if: (i) there is a violation of
the provision of the Master Lien Instrument entitled "DUE ON SALE";
(ii) Borrower shall file a voluntary petition for relief under the
federal bankruptcy code; (iii) an involuntary petition in bankruptcy
filed against Borrower shall remain undismissed for a period of sixty
(60) days; or (iv) Borrower shall become the subject of any
liquidation, receivership or other similar proceedings not dismissed
within 60 days after filing.
KOGER EQUITY, INC., a Florida
corporation
By: /s/ G. DANNY EDWARDS
----------------------------------
TREASURER
(corporate seal) Attest: /s/ W. LAWRENCE JENKINS
-------------------------------
CORPORATE SECRETARY
CORPORATE SECRETARY
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EXHIBIT 10(J)(7)
LOAN NO. C-332344 Documentary stamp tax has been Texas,
Florida, South Carolina and Tennessee paid
and proper stamps affixed to the Master Lien
Instrument recorded in Duval County, Florida
TRANCHE D PROMISSORY NOTE
$30,300,000.00 Dated as of September 2, 1999
For value received, the undersigned, herein called "Borrower," promises to pay
to the order of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin
corporation, who, together with any subsequent holder of this note, is
hereinafter referred to as "Lender", at 720 E. Wisconsin Avenue, Milwaukee, WI
53202 or at such other place as Lender shall designate in writing, in coin or
currency which, at the time or times of payment, is legal tender for public and
private debts in the United States, the principal sum of THIRTY MILLION THREE
HUNDRED THOUSAND DOLLARS or so much thereof as shall have been advanced from
time to time plus interest on the outstanding principal balance at the rate and
payable as follows:
Interest shall accrue from the date of advance until maturity
at the rate of seven and ten hundredths percent (7.10%) per annum (the
"Interest Rate").
Accrued interest only on the amount advanced shall be paid on
the first day of the month following the date on which the initial
advance is made. On the first day of the following month (the "Initial
Amortization Date") and on the first day of each and every month
thereafter, installments of principal and interest shall be paid in the
amount of $216,091.00.
All installments shall be applied first in payment of
interest, calculated monthly on the unpaid principal balance, and the
remainder of each installment shall be applied in payment of principal.
The entire unpaid principal balance plus accrued interest thereon shall
be due and payable on January 1, 2009 (the "Maturity Date").
Borrower shall have the right, upon thirty (30) days advance written
notice, beginning January 1, 2000 of paying this note in full with a prepayment
fee (the "Prepayment Fee"), provided, however, such prepayment may only be made
if Borrower concurrently prepays the Tranche B Promissory Note dated December
16, 1996 (the "Note B") in full. Upon payment in full of this note, all of the
Pool D Parks (as defined in the Master Lien Instrument) shall be released from
the lien of the Master Lien Instrument (as hereinafter defined). This fee
represents consideration to Lender for loss of yield and reinvestment costs.
Except as otherwise provided herein, the Prepayment Fee shall be the greater of
Yield Maintenance (as hereinafter defined) or 1% of the outstanding principal
balance of this note.
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As used herein, "Yield Maintenance" means the amount, if any, by which
(i) the present value of the Then Remaining Payments (as
hereinafter defined) calculated using a periodic discount rate
(corresponding to the payment frequency under this note)
which, when compounded for such number of payment periods in a
year, equals the sum of five-tenths of one percent (.5%) and
the per annum effective yield of the Most Recently Auctioned
United States Treasury Obligations (as hereinafter defined)
having a maturity date equal to the Maturity Date (or, if
there is no such equal maturity date, then the linearly
interpolated per annum effective yield of the two Most
Recently Auctioned United States Treasury Obligations having
maturity dates most nearly equivalent to the Maturity Date) as
reported by The Wall Street Journal five business days prior
to the date of prepayment; exceeds
(ii) the outstanding principal balance of this note (exclusive of
all accrued interest).
If such United States Treasury obligation yields shall not be reported as of
such time or the yields reported as of such time shall not be ascertainable,
then the periodic discount rate shall be equal to the sum of five-tenths of one
percent (.5%) and the Treasury Constant Maturity Series yields reported, for the
latest day for which such yields shall have been so reported, as of five
business days preceding the prepayment date, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for actively traded
United States Treasury obligations having a constant maturity most nearly
equivalent to the Maturity Date.
As used herein, "Then Remaining Payments" means payments in such amounts and at
such times as would have been payable subsequent to the date of such prepayment
in accordance with the terms of this note.
As used herein, "Most Recently Auctioned United States Treasury Obligations"
means the U.S. Treasury bonds, notes and bills with maturities of 30 years, 10
years, 5 years, 3 years, 2 years or 1 year which, as of the date the prepayment
fee is calculated, were most recently auctioned by the United States Treasury.
Upon the occurrence of an Event of Default (as defined in the Master Lien
Instrument defined below) followed by the acceleration of the whole indebtedness
evidenced by this note, the payment of such indebtedness will constitute an
evasion of the prepayment terms hereunder and be deemed to be a voluntary
prepayment hereof and such payment will, therefore, to the extent not prohibited
by law, include the prepayment fee required under the prepayment in full
privilege recited above or, if such prepayment occurs prior to January 1, 2000
and results from an Event of Default followed by an acceleration of the whole
indebtedness, then such payment will, to the extent not prohibited by law,
include a prepayment fee equal to the greater of (a) Yield Maintenance or (b) 6%
of the outstanding principal balance of this note.
Notwithstanding the above, in the event the outstanding principal balance is
reduced or paid in full with insurance loss proceeds as described in the
"INSURANCE" covenant of the Master Lien Instrument or condemnation award
proceeds as described in the "Condemnation" covenant of the Master Lien
Instrument, no Prepayment Fee shall be due on the amount of such proceeds
applied.
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Notwithstanding the above and provided Borrower is not in default under any
provision contained in the Loan Documents (as defined in the Master Lien
Instrument), up to twenty-five percent (25%) of the outstanding principal
balance of this note (the "First Partial Note D Prepayment") may be prepaid
beginning twenty-four (24) months, but no later than twelve (12) months prior to
the Maturity Date, with a Prepayment Fee of Modified Yield Maintenance (as
hereinafter defined), provided, however, such prepayment may only be made if
Borrower concurrently makes the First Partial Prepayment (as defined in Note B).
As used herein, "Modified Yield Maintenance" will be computed the same as Yield
Maintenance above, except that the Maturity Date used in the calculation will be
adjusted to one year prior to the actual Maturity Date.
Notwithstanding the above and provided Borrower is not in default under any
provision contained in the Loan Documents, up to fifty percent (50%) of the
outstanding principal balance of this note (or, if a First Partial Note D
Prepayment was made on this note, the outstanding principal balance of this note
immediately preceding such First Partial Note D Prepayment less an amount equal
to the principal amortization of this note since but not including the First
Partial Note D Prepayment) less any amount prepaid in a First Partial Note D
Prepayment with respect to this note, may be repaid without a Prepayment Fee
(the "Second Partial Note D Prepayment"), during the last twelve (12) months of
the term of this note, provided, however, such prepayment may only be made if
Borrower concurrently makes the Second Partial Prepayment (as defined in Note
B).
Borrower shall be permitted one First Partial Note D Prepayment and one Second
Partial Note D Prepayment on this note. Following the Second Partial Note D
Prepayment with respect to this note, Lender will release a portion of the
security as described in the "RELEASE OF SECURITY" provision of the Master Lien
Instrument.
Borrower acknowledges and agrees that the Interest Rate hereunder shall
be modified if certain financial statements and other reports are not furnished
to Lender, all as described in more detail in the provision of the Master Lien
Instrument entitled "FINANCIAL STATEMENTS".
This note is secured (i) by a lien instrument in multiple counterparts,
each of even date herewith executed by KOGER EQUITY, INC., a Florida corporation
to THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY or to JOHN S. SHOAF, JR. or
HENRY F. LANGE, as Trustee for the benefit of THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY, (ii) by a lien instrument of even date herewith executed by
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MEMPHIS AND COUNTY OF SHELBY and
KOGER EQUITY, INC. to JOHN S. SHOAF, JR. as Trustee for the benefit of THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, (iii) by a leasehold lien instrument
of even date herewith executed by KOGER EQUITY, INC., a Florida corporation to
JOHN S. SHOAF, JR. as Trustee for the benefit of THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY and (iv) by a lien instrument in multiple counterparts, dated
as of December 16, 1996 executed by KOGER EQUITY, INC., a Florida corporation to
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY or to JOHN S. SHOAF, JR. or
MICHAEL P. CUSICK, as Trustee for the benefit of THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY (collectively, the "Master Lien Instrument"), encumbering
certain properties situated in the following locations as more particularly
described in the Master Lien Instrument:
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(i) Memphis, Shelby County, Tennessee;
(ii) San Antonio, Bexar County, Texas;
(iii) Austin, Travis County, Texas;
(iv) El Paso, El Paso County, Texas;
(v) St. Petersburg, Pinellas County, Florida;
(vi) Tallahassee, Leon County, Florida;
(vii) Greenville, Greenville County, South Carolina;
(viii) Jacksonville, Duval County, Florida;
(ix) Orlando, Orange County, Florida.
The Master Lien Instrument encumbers the Properties set forth in (i) through
(iv), above as a Deed of Trust and Security Agreement; and the Properties set
forth in (v) through (ix), above as a Mortgage and Security Agreement.
"Property" and "Properties" as used herein shall have the meaning ascribed to
them in the Master Lien Instrument.
Upon the occurrence of an Event of Default (as defined in the Master
Lien Instrument), the whole unpaid principal hereof and accrued interest shall,
at the option of Lender, to be exercised at any time thereafter, become due and
payable at once without notice, notice of the exercise of, and the intent to
exercise, such option being hereby expressly waived.
All parties at any time liable, whether primarily or secondarily, for
payment of indebtedness evidenced hereby, for themselves, their heirs, legal
representatives, successors and assigns, respectively, expressly waive
presentment for payment, notice of dishonor, protest, notice of protest, and
diligence in collection; consent to the extension by Lender of the time of said
payments or any part thereof; further consent that the real or collateral
security or any part thereof may be released by Lender, without, except for such
release, in any way modifying, altering, releasing, affecting, or limiting their
respective liability, or the lien of the Master Lien Instrument; and agree to
pay reasonable attorneys' fees and expenses of collection in case this note is
placed in the hands of an attorney for collection or suit is brought hereon and
any attorneys' fees and expenses incurred by Lender to enforce or preserve its
rights under any of the Loan Documents in any bankruptcy or insolvency
proceeding.
Any principal, interest or other amounts payable under any of the Loan
Documents (as defined in the Master Lien Instrument), not paid when due (without
regard to any notice and/or cure provisions contained in any of the Loan
Documents), including principal becoming due by reason of acceleration by Lender
of the entire unpaid balance of this note, shall bear interest from the due date
thereof until paid at the Default Rate. As used herein, "Default Rate" means the
lower of a rate equal to the interest rate in effect at the time of the default
as herein provided plus 5% per annum or the maximum rate permitted by law.
No provision of this note shall require the payment or permit the
collection of interest, including any fees paid which are construed under
applicable law to be interest, in excess of the maximum permitted by law. If any
such excess interest is collected or herein provided for, or shall be
adjudicated to have been collected or be so provided for herein, the provisions
of this paragraph shall govern, and Borrower shall not be obligated to pay the
amount of such interest to the extent that it is in excess of the amount
permitted by law. Any such excess collected shall, at the option of Lender,
unless otherwise required by applicable law, be immediately refunded to Borrower
or credited on the principal of this note immediately upon Lender's awareness of
the collection of such excess.
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If the maturity of this note is accelerated for any reason before the
due date stated, or in the event of voluntary or other prepayment by the
Borrower, including any prepayments of interest or fees, or in any other event,
earned interest may never include more than the maximum amount permitted by law,
computed from the date of each disbursement until payment, and any unearned
interest otherwise payable hereunder which is in excess of the maximum permitted
by law shall be cancelled automatically as of the date of such acceleration or
prepayment or other such event and (if theretofore paid) shall at the option of
Lender, unless otherwise required by applicable law, be either refunded to the
Borrower or credited on the principal of this note provided that for purposes of
computing interest under this note, all sum or sums paid or payable to Lender,
in connection with the loan evidenced hereby, which constitute interest shall be
taken into account by amortizing, prorating, allocating and spreading such sum
or sums, in equal parts, throughout the period of the full stated term of the
loan, to the extent permitted by law. Any interest computation under this note
shall be at not more than the maximum legal rate, it being the intention of the
parties hereto to conform strictly to all applicable laws of the State of
Wisconsin and of the United States of America now or hereafter in force, and in
the event it should be held that interest payable under this note is in excess
of the maximum permitted by such laws, the interest chargeable hereunder shall
be reduced to the maximum amount permitted by such laws.
Notwithstanding any provision contained herein or in the Master Lien
Instrument to the contrary, if Lender shall take action to enforce the
collection of the indebtedness evidenced hereby or secured by the Master Lien
Instrument or under any of the other Loan Documents (collectively, the
"Indebtedness"), its recourse shall, except as provided below, be limited to the
Properties or the proceeds from the sale of the Properties and the proceeds
realized by Lender in exercising its rights and remedies (i) under the Absolute
Assignment (as defined in the Master Lien Instrument), (ii) under separate
guarantees, if any, (iii) under any of the other Loan Documents (as defined in
the Master Lien Instrument) and (iv) in any other collateral securing the
Indebtedness. If such proceeds are insufficient to pay the Indebtedness, Lender
will never institute any action, suit, claim or demand in law or in equity
against Borrower for or on account of such deficiency; provided, however, that
the provisions contained in this paragraph
(i) shall not in any way affect or impair the validity or
enforceability of the Indebtedness or the Master Lien
Instrument to the extent provided herein; and
(ii) shall not prevent Lender from seeking and obtaining a judgment
against Borrower for personal liability for the Recourse
Obligations.
As used herein, the term "Recourse Obligations" means
(a) rents received and other income accrued from the Properties from
and after the date of any material default under the Loan Documents
remaining uncured on the date of the foreclosure sale of any Property
pursuant to the Master Lien Instrument or the conveyance of the
Properties to Lender in lieu of foreclosure, which rents and other
income have not been applied to the payment of principal and interest
on this note or the Tranche C Promissory Note of even date herewith or
to reasonable operating expenses of the Properties,
(b) amounts necessary to repair any damage to the Properties caused by
the gross negligence or willful misconduct of Borrower or its agents,
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(c) insurance loss and condemnation award proceeds released to Borrower
but not applied in accordance with any agreement between Borrower and
Lender as to their application,
(d) the amount of insurance loss proceeds which would have been
available with respect to a casualty on the Property, but were not
available due to the default by Borrower in carrying all insurance
required by Lender,
(e) damages suffered by Lender as a result of fraud or
misrepresentation in connection with the Indebtedness by Borrower or
any other person or entity acting on behalf of Borrower,
(f) amounts necessary to pay real estate taxes, special assessments and
insurance premiums with respect to the Properties either paid by Lender
and not reimbursed prior to, or remaining due or delinquent on, either
(i) the later of (A) the date on which title vests in the purchaser at
the foreclosure sale of the Property pursuant to the Master Lien
Instrument or (B) the date on which Borrower's statutory right of
redemption shall expire or be waived or (ii) the date of the conveyance
of the Properties to Lender in lieu of foreclosure, and
(g) all outstanding amounts due under the Indebtedness, including
principal, interest and other charges if: (i) there is a violation of
the provision of the Master Lien Instrument entitled "DUE ON SALE";
(ii) Borrower shall file a voluntary petition for relief under the
federal bankruptcy code; (iii) an involuntary petition in bankruptcy
filed against Borrower shall remain undismissed for a period of sixty
(60) days; or (iv) Borrower shall become the subject of any
liquidation, receivership or other similar proceedings not dismissed
within 60 days after filing.
KOGER EQUITY, INC., a Florida
corporation
By:/s/ G. DANNY EDWARDS
-------------------------------
TREASURER
(corporate seal) Attest: /s/ W. LAWRENCE JENKINS
---------------------------
CORPORATE SECRETARY
CORPORATE SECRETARY
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<PAGE> 1
EXHIBIT 10(J)(8)
THIS MASTER LIEN INSTRUMENT, Made as of the 2nd day of September, 1999 between
KOGER EQUITY, INC., a Florida corporation, 8880 Freedom Crossing Trail,
Jacksonville, FL 32256, herein (said Grantor/Trustor, whether one or more in
number) called "Grantor", and HENRY F. LANGE, Four Forest Plaza, Suite 970,
12222 Merit Drive, Dallas, TX 75251-2234, herein called "Trustee", and THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation, 720 E.
Wisconsin Avenue, Milwaukee, WI 53202, herein called "Beneficiary":
GRANTING CLAUSE
WITNESSETH, That Grantor, in consideration of the indebtedness herein mentioned,
does hereby irrevocably bargain, sell, grant, transfer, assign and convey unto
Trustee, in trust, with power of sale and right of entry and possession, the
following properties (herein collectively referred to as the "Properties" and
individually referred to as a "Property"):
A. The land described in Exhibits "A-1" through "A-10" attached
hereto and incorporated herein (the "Land") and all
appurtenances thereto; and
B. All buildings and improvements now existing or hereafter
erected thereon, all waters and water rights, all engines,
boilers, elevators and machinery, all heating apparatus,
electrical equipment, air-conditioning equipment, water and
gas fixtures, and all other fixtures of every description
belonging to Grantor which are or may be placed or used upon
the Land or attached to the buildings or improvements, all of
which, to the extent permitted by applicable law, shall be
deemed an accession to the freehold and a part of the realty
as between the parties hereto.
Except as expressly provided in the covenant hereof entitled "DUE ON SALE",
Grantor agrees not to sell, transfer, assign or remove anything described in B
above now or hereafter located on the Land without prior written consent from
Beneficiary unless (i) such action does not constitute a sale or removal of any
buildings or building improvements (except as provided in (y) below) or the sale
or transfer of waters or water rights and (x) in the case of personal property,
(a) such personal property is removed on a temporary basis for repairs in the
ordinary course of business; (b) such personal property is not reasonably
necessary or appropriate to the efficient use or operation of the Property; (c)
such personal property is consumed or worn out or has become obsolete and is
promptly replaced by Grantor with personal property of equal or greater value
and/or utility, unless replacement is not reasonably necessary or appropriate to
the efficient use of the Property; or (d) such personal property is actually
replaced by Grantor with similar personal property of equal or greater value
and/or utility, or (y) in the case of tenant improvements, the removal thereof
is in the ordinary course of leasing office space which is a part of the
Property.
Without limiting the foregoing grants, Grantor hereby pledges to Beneficiary,
and grants to Beneficiary a security interest in, all of Grantor's present and
hereafter acquired right, title and interest in and to the Properties and any
and all
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C. cash and other funds now or at any time hereafter deposited by
or for Grantor on account of tax, special assessment,
replacement or other reserves required to be maintained
pursuant to the Loan Documents (as hereinafter defined) with
Beneficiary or a third party, or otherwise deposited with, or
in the possession of, Beneficiary pursuant to the Loan
Documents; and
D. surveys, soils reports, environmental reports, guaranties,
warranties, architect's contracts, construction contracts,
drawings and specifications, applications, permits, surety
bonds and other contracts relating to the acquisition, design,
development, construction and operation of the Property to the
extent assignable in accordance with applicable agreements and
law; and
E. present and future rights to condemnation awards, insurance
proceeds or other proceeds at any time payable to or received
by Grantor on account of the Property or any of the foregoing
personal property.
All personal property hereinabove described is hereinafter referred to as the
"Personal Property".
SECURITY AGREEMENT CLAUSE
If any of the Properties are of a nature that a security interest therein can be
perfected under the Uniform Commercial Code, this instrument shall constitute a
security agreement and financing statement if permitted by applicable law and
Grantor agrees to join with Beneficiary in the execution of any financing
statements and to execute any other instruments that may be required for the
perfection or renewal of such security interest under the Uniform Commercial
Code.
SECURING CLAUSE
TO HAVE AND TO HOLD the same unto Trustee for the purpose of securing:
(a) Payment to the order of Beneficiary of the indebtedness
evidenced by (i) the Tranche C Promissory Note of even date
herewith executed by Grantor for the principal sum of FOURTEEN
MILLION SEVEN HUNDRED THOUSAND DOLLARS, with final maturity no
later than January 1, 2007 and with interest as therein
expressed and (ii) the Tranche D Promissory Note of even date
herewith executed by Grantor for the principal sum of THIRTY
MILLION THREE HUNDRED THOUSAND DOLLARS, with final maturity no
later than January 1, 2009 and with interest as therein
expressed (the Tranche C Promissory Note and Tranche D
Promissory Note, as such instruments may be amended, restated,
renewed and extended, are hereinafter collectively referred to
as the "Note"), it being recognized that the funds may not
have been fully advanced as of the date hereof but may be
advanced in the future in accordance with the terms of the
Phase II Loan Commitment (as hereinafter defined); and
(b) Payment to the order of Beneficiary of the indebtedness
evidenced by (i) the Tranche A Promissory Note dated as of
December 16, 1996 executed by Grantor for the principal sum of
ONE HUNDRED MILLION FIVE HUNDRED THOUSAND DOLLARS, with final
maturity no later than January 1, 2007 and with interest as
therein expressed and (ii) the Tranche B Promissory Note
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(c) dated as of December 16, 1996 executed by Grantor for the
principal sum of EIGHTY-NINE MILLION FIVE HUNDRED THOUSAND
DOLLARS, with final maturity no later than January 1, 2009 and
with interest as therein expressed (the Tranche A Promissory
Note and Tranche B Promissory Note, as such instruments may be
amended, restated, renewed and extended, are hereinafter
collectively referred to as the "Phase I Note"), and secured
by a lien on certain property described in that certain Master
Lien Instrument dated as of December 16, 1996, executed by
Koger Equity, Inc., a Florida corporation to a Trustee for the
benefit of Beneficiary (the "Master Lien Instrument"); and
(d) Payment of all sums that may become due Beneficiary under the
provisions of, and the performance of each agreement of
Grantor contained in, the Phase II Loan Documents, the Phase I
Loan Documents and the IDB Loan Documents.
As used herein, "Phase II Loan Documents" means this instrument, the Note, that
certain Absolute Assignment of Leases and Rents of even date herewith between
Grantor and Beneficiary (the "Phase II Absolute Assignment"), that certain
Certification of Borrower of even date herewith, to the extent not inconsistent
with the other Phase II Loan Documents, that certain Application dated February
26, 1999 and acceptance letter dated April 5, 1999 executed by Beneficiary
(together, the "Phase II Loan Commitment"), and any other agreement entered into
by Grantor and delivered to Beneficiary in connection with the indebtedness
evidenced by the Note, except for any separate environmental indemnity
agreement, as any of the foregoing may be amended from time to time.
As used herein, "Phase I Loan Documents" means the Master Lien Instrument, the
Phase I Note, that certain Absolute Assignment of Leases and Rents dated as of
December 16, 1996 between Grantor and Beneficiary (the "Phase I Absolute
Assignment"), that certain Certification of Borrower dated as of December 16,
1996, to the extent not inconsistent with the other Phase I Loan Documents, that
certain Application dated July 29, 1996 and acceptance letter dated September
10, 1996 executed by Beneficiary (together, the "Phase I Loan Commitment"), and
any other agreement entered into by Grantor and delivered to Beneficiary in
connection with the indebtedness evidenced by the Phase I Note, except for any
separate environmental indemnity agreement, as any of the foregoing may be
amended from time to time.
As used herein, "IDB Loan Documents" means that certain IDB Deed of Trust and
Security Agreement of even date herewith between the IDB, Koger and Beneficiary
(the "IDB Lien Instrument", that certain Leasehold Deed of Trust and Security
Agreement of even date herewith between Koger and Beneficiary (the "Leasehold
Lien Instrument"), as any of the foregoing may be amended from time to time.
DEFINITIONS CLAUSE
"Park" means any one of the ten office parks described by the consolidation of
the individual legal descriptions on any one of the exhibits entitled Exhibits
"A-1" through "A-10" attached hereto.
"Building" means each of the buildings located on the Land described in Exhibits
"A-1" through "A-10" attached hereto.
"Pool" means either of the Pool A Parks, the Pool B Parks, the Pool C Parks or
the Pool D Parks.
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"Pool A Parks" mean the Parks in the City of Memphis, Shelby County, Tennessee;
in the City of San Antonio, Bexar County, Texas; in the City of St. Petersburg,
Pinellas County, Florida; and in the City of Tallahassee, Leon County, Florida.
"Pool B Parks" mean the Parks in the City of Austin, Travis County, Texas; in
the City of El Paso, El Paso County, Texas; in the City of Greenville,
Greenville County, South Carolina; in the City of Jacksonville, Duval County,
Florida; and in the City of Orlando, Orange County, Florida.
"Pool C Parks" mean the Parks in the City of Memphis, Shelby County, Tennessee;
and in the City of Tallahassee, Leon County, Florida.
"Pool D Parks" mean the Parks in the City of Greenville, Greenville County,
South Carolina; in the City of Jacksonville, Duval County, Florida; and in the
City of Orlando, Orange County, Florida.
"Valuation" means the amount mutually agreed to by Grantor and Beneficiary or,
if such parties do not so mutually agree, upon the following appraisal procedure
which shall be initiated by Grantor by giving written notice to Beneficiary
which shall include its designation of an appraiser (the "First Appraiser").
Within twenty (20) days after the service of the notice designating the First
Appraiser, Beneficiary shall give written notice to Grantor designating the
second appraiser (the "Second Appraiser"). If the Second Appraiser is not so
designated within the time above specified, the appointment of the Second
Appraiser shall be made in the same manner as is hereinafter provided for the
appointment of the third appraiser (the "Third Appraiser") in the event the
First and Second Appraisers are unable to agree upon the Third Appraiser. The
First and Second Appraisers so designated or appointed shall meet within ten
(10) days after the Second Appraiser is appointed, and if, within thirty (30)
days after the Second Appraiser is appointed, the First and Second Appraisers do
not agree upon the Valuation, they shall appoint a Third Appraiser who shall be
a competent and impartial person. In the event of their being unable to agree
upon such appointment within ten (10) days after the time aforesaid, the Third
Appraiser shall be selected by Beneficiary and Grantor if they can agree thereon
within a further period of fifteen (15) days. If the parties do not agree, or if
for any reason the three appraisers have not been chosen within fifteen (15)
days after the expiration of the fifteen (15) day period referred to in the
immediately preceding sentence, either the Beneficiary or Grantor, on behalf of
both, may request such appointment by the presiding Judge of the United States
District Court for the District in which the Property is located. In the event
of the failure, refusal or inability of any appraiser to act, a new appraiser
shall be appointed in his stead, which appointment shall be made in the same
manner as hereinbefore provided for the appointment of such appraiser so
failing, refusing or being unable to act. Grantor shall pay the fees and
expenses of all appraisers. Any appraiser designated to serve in accordance with
the provisions of this Agreement shall be qualified to appraise the type of
property being appraised in the County and State in which the Park in question
is located, shall be a member of the Appraisal Institute (or any successor
association or body of comparable standing if such Institute is not then in
existence) and shall have been actively engaged in the appraisal of real estate
in the County (set forth above) for a period of not less than ten (10) years
immediately preceding its appointment. The Appraisers shall determine the
Valuation, provided, however, no value shall be attributed to good will. The
Appraisers may employ such independent counsel and accountants, unaffiliated
with Beneficiary or Grantor as any two of the three appraisers shall determine
to be necessary or advisable to assist them in carrying out their duties
hereunder. The fees and expenses of such counsel and accountants shall be borne
by Grantor. A decision joined in by two of the three appraisers shall be the
decision of the appraisers. In the event no two appraisers can agree, the
decision of the Third Appraiser shall be conclusive. After reaching a decision,
the appraisers shall give written notice thereof to Beneficiary and Grantor.
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A violation of any of the Financial Covenants provided for in Paragraph 8 of the
Phase II Loan Commitment will cause a default under the terms and conditions of
any of the Phase II Loan Documents.
NOTHING CONTAINED HEREIN IS INTENDED TO CONSTITUTE AN ALLOCATION OF SECURITY FOR
PURPOSES OF BENEFICIARY'S REMEDIES; AND GRANTOR AGREES THAT UNTIL THE RELEASE OF
SECURITY PURSUANT TO THE TERMS HEREOF, ALL OF THE PROPERTY SECURES THE TRANCHE A
PROMISSORY NOTE, THE TRANCHE B PROMISSORY NOTE, THE TRANCHE C PROMISSORY NOTE
AND THE TRANCHE D PROMISSORY NOTE.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, GRANTOR REPRESENTS, COVENANTS AND
AGREES AS SET FORTH BELOW:
PAYMENT OF DEBT. Grantor agrees to pay the indebtedness hereby secured (the
"Indebtedness") promptly and in full compliance with the terms of the Loan
Documents.
OWNERSHIP. Grantor represents that it owns the Properties and has good and
lawful right to convey the same and that the Properties are free and clear from
any and all encumbrances whatsoever, except as appears in the title evidence
accepted by Beneficiary. Grantor does hereby forever warrant and shall forever
defend the title and possession thereof against the lawful claims of any and all
persons whomsoever.
MAINTENANCE OF PROPERTY AND COMPLIANCE WITH LAWS. Grantor agrees to keep the
buildings and other improvements now or hereafter erected on the Land in good
condition and repair; not to commit or suffer any waste; to comply with all
laws, rules and regulations affecting the Properties with which the failure to
comply would have a material adverse effect on any Building; and to permit
Beneficiary to enter at all reasonable times and upon 24 hours prior notice for
the purpose of inspection and of conducting, in a reasonable and proper manner,
such tests to be conducted at Beneficiary's expense, except as otherwise
provided for in any separate environmental indemnity agreement as Beneficiary
determines to be necessary in order to monitor Grantor's compliance with
applicable laws and regulations regarding hazardous materials affecting the
Properties.
Notwithstanding the foregoing, the Grantor is not required to restore or repair
buildings or improvements to the extent insurance proceeds or condemnation
awards are not made available by the Beneficiary to the Grantor for such purpose
but are instead used by Beneficiary to repay a portion of the balance of the
Note. If Grantor is not required to restore or repair the damaged or taken
property in accordance with the immediately preceding sentence, it shall (i) for
any partially destroyed or taken building or improvements secure and enclose the
remaining portion of the building or improvements so as to make such remaining
portions of such building or improvements reasonably usable to the extent
practical and (ii) for any building or improvements which are substantially or
totally destroyed demolish such remaining building or improvements and rough
grade and landscape the applicable portion of the Lane in accordance with the
requirements of applicable governmental authorities so that the remaining
portion of such destroyed building or improvements do not present a safety
hazard or detract from the overall scenic surroundings of the applicable Park.
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INSURANCE. Grantor agrees to keep the Properties insured for the protection of
Beneficiary and Beneficiary's wholly owned subsidiaries and agents in such
manner, in such amounts and in such companies as Beneficiary may from time to
time approve, and to keep the policies or certificates therefor, properly
endorsed, on deposit with Beneficiary, or at Beneficiary's option, to keep
certificates of insurance (Acord 27 for all property insurance and Acord 25-S
for all liability insurance) evidencing all insurance coverages required
hereunder on deposit with Beneficiary, which certificates shall provide at least
thirty (30) days notice of cancellation to Beneficiary and shall list
Beneficiary as the certificate holder; that insurance loss proceeds from all
property insurance policies placed by Grantor (less expenses of collection)
shall, at Beneficiary's option, be applied on the Indebtedness, whether due or
not, or to the restoration of the Properties, or be released to Grantor, but
such application or release shall not cure or waive any default under any of the
Loan Documents. If Beneficiary elects to apply the insurance loss proceeds on
the Indebtedness, no prepayment privilege fee shall be due on the amount of
proceeds so applied.
Notwithstanding the immediately preceding paragraph, Beneficiary agrees that if
the insurance loss proceeds are less than $500,000 (increased by 3% per year
from the date hereof) for any one casualty, such proceeds will be released to
Grantor for reasonable restoration of the Property (which, for purposes of this
covenant includes rebuilding or replacement such that the Valuation of
applicable Property is not diminished) and the other provisions of this covenant
shall not be applicable, provided, however, insurance loss proceeds under this
paragraph shall not be released to Grantor if Beneficiary has previously
released insurance loss proceeds to Grantor and the applicable Property has not
been so restored.
Notwithstanding the two immediately preceding paragraphs, Beneficiary agrees
that if there then exists no Event of Default under any Loan Document and if the
insurance loss proceeds are less than the unpaid principal balance of the Note
and if the casualty occurs prior to the last three years of the term of the
Note, then the insurance loss proceeds (less expenses of collection) shall be
applied to restoration of the Property to its condition prior to the casualty,
subject to satisfaction of the following conditions:
(a) There is no existing Event of Default at the time of casualty,
and if there shall occur any Event of Default after the date
of the casualty, Beneficiary shall have no further obligation
to release insurance loss proceeds hereunder.
(b) The casualty insurer has not denied liability for payment of
insurance loss proceeds as a result of any act, neglect, use
or occupancy of the Property by Grantor or any tenant of the
Property.
(c) Beneficiary shall be satisfied that that the amount necessary
to complete the restoration of the Property is available from
all insurance loss proceeds so held, together with
supplemental funds which Grantor commits to make available to
such restoration and agrees to fund prior to the disbursement
of any insurance proceeds. Any remaining insurance loss
proceeds may, at the option of Beneficiary, be applied on the
Indebtedness, whether or not due, or be released to Grantor.
(d) If required by Beneficiary, Beneficiary shall be furnished a
satisfactory report addressed to Beneficiary from an
environmental engineer or other qualified professional
satisfactory to Beneficiary to the effect that no adverse
environmental impact to the Property resulted from the
casualty or if any such impact has resulted, that the same has
been corrected to Beneficiary's satisfaction.
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(e) Beneficiary shall release casualty insurance proceeds as
restoration of the Property progresses provided that
Beneficiary is furnished satisfactory evidence of the costs of
restoration and if, at the time of such release, there shall
exist no Event of Default under the Loan Documents. If the
estimated cost of restoration exceeds $500,000 (increased by
3% per year from the date hereof), (i) the drawings and
specifications for the restoration shall be approved by
Beneficiary in writing prior to commencement of the
restoration, and (ii) Beneficiary shall receive an
administration fee equal to 1% of the cost of restoration.
(f) Prior to each release of funds, Grantor shall obtain for the
benefit of Beneficiary an endorsement to Beneficiary's title
insurance policy insuring against any liens arising from the
restoration.
(g) Grantor shall pay all costs and expenses incurred by
Beneficiary, including, but not limited to, outside legal
fees, title insurance costs, third-party disbursement fees,
third-party engineering reports and inspections deemed
necessary by Beneficiary.
(h) All applicable reciprocal easement and operating agreements,
if any, benefiting the Property shall remain in full force and
effect between the parties thereto on and after restoration of
the Property.
(i) Beneficiary shall be satisfied that the operating income from
the buildings not destroyed plus loss of rents insurance
proceeds will be sufficient to cover the annual debt service
under all indebtedness secured by the Property at least 1.3
times.
(j) All leases of more than 10,000 rentable square feet in effect
at the time of the casualty with tenants who have entered into
Beneficiary's form of Non-Disturbance and Attornment Agreement
or similar agreement shall remain in full force and each
tenant thereunder shall be obligated, or shall elect, to
continue the lease term at full rental (subject only to
abatement, if any, during any period in which the Property or
a portion thereof shall not be used and occupied by such
tenant as a result of the casualty).
If a casualty as described in the preceding paragraph damages more than one
Building and one or more of the damaged Buildings satisfies the conditions of
(a) through (j) above (each a "Qualifying Building") and one or more of the
damaged Buildings does not satisfy the conditions of (a) through (j) above (a
"Non - Qualifying Building"), insurance loss proceeds allocated by Beneficiary
shall be applied to restoration of each Qualifying Building, as provided in the
preceding paragraph. Such allocation of insurance proceeds by Beneficiary shall
be made in the same ratio that the aggregate net rentable square feet of each
Qualifying Building bears to the sum of the aggregate net rentable square feet
of each Qualifying Building plus the aggregate net rentable square feet of each
Non - Qualifying Building.
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<PAGE> 8
CONDEMNATION. Grantor hereby assigns to Beneficiary (i) any award and any other
proceeds resulting from damage to, or the taking of, all or any portion of any
Property in connection with condemnation proceedings or the exercise of any
power of eminent domain and (ii) the proceeds from any sale or transfer in lieu
thereof (less expenses of collection) which shall be applied to restoration of
the affected Property, subject to the provisions stated above for application of
insurance loss proceeds and subject to the further condition that restoration or
replacement of the improvements on the Land to their functional and economic
utility prior to such damage or taking be possible within the Park in which such
taking occurred. Any portion of such award and proceeds not applied to
restoration shall, at Beneficiary's option, be applied on the Indebtedness,
whether due or not, or be released to Grantor, but such application or release
shall not cure or waive any default under any of the Loan Documents.
If Beneficiary elects to apply the condemnation award and proceeds on the
Indebtedness, no Prepayment Fee shall be due on the amount of award or proceeds
so applied.
TAXES AND SPECIAL ASSESSMENTS. Grantor agrees to pay before delinquency all
taxes and special assessments of any kind that have been or may be levied or
assessed against the Properties, this instrument, the Note or the Indebtedness,
or upon the interest of Trustee or Beneficiary in the Properties, this
instrument, the Note or the Indebtedness, and to procure and deliver to
Beneficiary a copy of the official receipt of the proper officer showing timely
payment of all such taxes and assessments; provided, however, that Grantor shall
not be required to pay any such taxes or special assessments if the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate proceedings and funds sufficient to satisfy the contested amount
have been deposited in an escrow satisfactory to Beneficiary or paid to the
taxing authority.
PERSONAL PROPERTY. With respect to the Personal Property, Grantor hereby
represents, warrants and covenants as follows:
(a) Except for the security interest granted hereby, Grantor is,
and as to portions of the Personal Property to be acquired after the date hereof
will be, the sole owner of the Personal Property, free from any lien, security
interest, encumbrance or adverse claim thereon of any kind whatsoever subject,
however, to the rights of any tenants under their leases. Grantor shall notify
Beneficiary of, and shall indemnify and defend Beneficiary and the Personal
Property against, all claims and demands of all persons at any time claiming the
Personal Property or any part thereof or any interest therein.
(b) Except as otherwise provided above, Grantor shall not lease,
sell, convey or in any manner transfer the Personal Property without the prior
consent of Beneficiary.
(c) Grantor maintains a place of business at the address set forth
in the first paragraph of this instrument, and Grantor shall immediately notify
Beneficiary in writing of any change in its place of business.
(d) At the request of Beneficiary, Grantor shall join Beneficiary
in executing one or more financing statements and continuations and amendments
thereof pursuant to the Uniform Commercial Code of the jurisdiction in which the
Property is located in form satisfactory to Beneficiary, and Grantor shall pay
the cost of filing the same in all public offices wherever filing is deemed by
Beneficiary to be necessary or desirable.
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<PAGE> 9
OTHER LIENS. Grantor agrees to keep the Properties free from all other mortgage
liens and from all liens prior to the lien created hereby. The creation of any
other mortgage lien, whether or not prior to the lien created hereby, the
creation of any prior lien on or the assignment or pledge by Grantor of its
revocable license to collect, use and enjoy rents and profits from the
Properties shall constitute a default under the terms of this instrument. The
term "mortgage" includes a mortgage, deed of trust, deed to secure debt or any
other security interest in the Property.
CROSS-DEFAULT. Notwithstanding anything herein to the contrary, any Event of
Default (as defined in the Master Lien Instrument) under the Master Lien
Instrument shall constitute an Event of Default under this instrument, and
Beneficiary, at its option, may declare the Indebtedness due and payable at
once, and may exercise or cause to be exercised all its right and remedies under
this instrument and the Master Lien Instrument concurrently or separately and in
such order as Beneficiary may determine.
LEASES. Grantor represents and warrants that there is no assignment or pledge of
any leases of, or rentals or income from, the Properties now in effect; and
covenants that, until the Indebtedness is fully paid, it (i) shall not make any
such assignment or pledge to anyone other than Beneficiary and (ii) shall not,
unless expressly permitted under another provision in this instrument, make any
assignment or pledge to anyone of its hereinafter described revocable license to
collect, use and enjoy the rents and profits.
In consideration of the Indebtedness, Grantor, pursuant to the Absolute
Assignment, has assigned to Beneficiary all of Grantor's right, title and
interest in said leases, including Grantor's right to collect, use and enjoy the
rents and profits therefrom. Beneficiary has, in the Absolute Assignment,
granted to Grantor a license to collect, use and enjoy said rents and profits.
Such license is revocable by Beneficiary pursuant to the terms of the Absolute
Assignment.
COSTS, FEES AND EXPENSES. Grantor agrees to pay all costs, fees and expenses of
this trust; to appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary or Trustee
hereunder; to pay all costs and expenses, including the cost of obtaining
evidence of title and reasonable attorney's fees, incurred in connection with
any such action or proceeding; and to pay any and all attorney's fees and
expenses of collection and enforcement in the event the Note is placed in the
hands of an attorney for collection, enforcement of any of the Loan Documents is
undertaken or suit is brought thereon.
FAILURE OF GRANTOR TO ACT. If Grantor shall fail to make any payment or do any
act as herein provided, Beneficiary or Trustee may, without obligation so to do,
without notice to or demand upon Grantor and without releasing Grantor from any
obligation hereof: (i) make or do the same in such manner and to such extent as
Beneficiary may deem necessary to protect the security hereof, Beneficiary or
Trustee being authorized to enter upon the Properties for such purpose; (ii)
appear in and defend any action or proceeding purporting to affect the security
hereof, or the rights or powers of Beneficiary or Trustee; (iii) pay, purchase,
contest or compromise any encumbrance, charge or lien which in the judgment of
Beneficiary is prior or superior hereto; and (iv) in exercising any such powers,
pay necessary expenses, employ counsel and pay its reasonable fees. Sums so
expended shall be payable by Grantor immediately upon demand with interest from
date of expenditure at the Default Rate (as defined in the Note). All sums so
expended by Beneficiary and the interest thereon until paid shall be included in
the Indebtedness and secured by the lien of this instrument.
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<PAGE> 10
EVENT OF DEFAULT. Any default by Grantor in making any required payment of the
Indebtedness or any default in any provision, covenant, agreement or warranty
contained in any of the Loan Documents shall, except as provided in the two
immediately succeeding paragraphs, constitute an "Event of Default".
NOTICE OF DEFAULT. A default in any payment required in the Note or any other
Loan Document (a "Monetary Default") shall not constitute an Event of Default
unless Beneficiary shall have given a written notice of such Monetary Default to
Grantor and Grantor shall not have cured such Monetary Default by payment of all
amounts in default (including payment of interest at the Default Rate, as
defined in the Note, from the date of default to the date of cure on amounts
owed to Beneficiary) within five (5) business days after the date on which
Beneficiary shall have given such notice to Grantor.
Any other default under the Note or under any other Loan Document (a
"Non-Monetary Default") shall not constitute an Event of Default unless
Beneficiary shall have given a written notice of such Non-Monetary Default to
Grantor and Grantor shall not have cured such Non-Monetary Default within thirty
(30) days after the date on which Beneficiary shall have given such notice of
default to Grantor (or, if the Non-Monetary Default is not curable within such
30-day period, Grantor shall not have (i) diligently undertaken and continued to
pursue the curing of such Non-Monetary Default and (ii) deposited an amount
sufficient to cure such Non-Monetary Default in an escrow account satisfactory
to Beneficiary).
For purposes of this provision, written notice may be delivered personally or
sent by certified mail or reputable courier service with charges prepaid, by
telecopier or by such other method whereby the receipt thereof may be confirmed.
Notice shall be deemed given on the date received. Any notice which is rejected,
the acceptance of which is refused or which is incapable of being delivered for
any reason shall be deemed received as of the date of attempted delivery.
In no event shall the notice and cure period provisions recited above constitute
a grace period for the purposes of commencing interest at the Default Rate (as
defined in the Note).
SUBSTITUTION OF TRUSTEE. Beneficiary and its successors and assigns may for any
reason and at any time appoint a new or substitute Trustee by written
appointment delivered to such new or substitute Trustee without notice to
Grantor, without notice to, or the resignation or withdrawal by, the existing
Trustee and without recordation of such written appointment unless notice or
recordation is required by the laws of the jurisdiction in which the Properties
are located. Upon delivery of such appointment, the new or substitute Trustee
shall be vested with the same title and with the same powers and duties granted
to the original Trustee.
APPOINTMENT OF RECEIVER. Upon commencement of any proceeding to enforce any
right under this instrument, including foreclosure thereof, Beneficiary (without
limitation or restriction by any present or future law, without regard to the
solvency or insolvency at that time of any party liable for the payment of the
Indebtedness, without regard to the then value of any Property, whether or not
there exists a threat of imminent harm, waste or loss to any Property and
whether or not the same shall then be occupied by the owner of the equity of
redemption as a homestead) shall have the absolute right to the appointment of a
receiver of the Properties and of the revenues, rents, profits and other income
therefrom, and said receiver shall have (in addition to such other powers as the
court making such appointment may confer) full power to collect all such income
and, after paying all necessary expenses of such receivership and of operation,
maintenance and repair of said Properties, to apply the balance to the payment
of any of the Indebtedness then due.
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<PAGE> 11
FORECLOSURE. Upon the occurrence of an Event of Default, the entire unpaid
Indebtedness shall, at the option of Beneficiary, become immediately due and
payable for all purposes without any notice or demand, except as required by law
(ALL OTHER NOTICE OF THE EXERCISE OF SUCH OPTION BEING HEREBY EXPRESSLY WAIVED),
and Beneficiary may, in addition to exercising any rights it may have with
respect to the Personal Property under the Uniform Commercial Code of the
jurisdiction in which the Properties are located, institute proceedings in any
court of competent jurisdiction to foreclose this instrument as a mortgage, or
to enforce any of the covenants hereof, or Trustee or Beneficiary may, either
personally or by agent or attorney in fact, enter upon and take possession of
the Properties and may manage, rent or lease the Properties or any portion
thereof upon such terms as Beneficiary may deem expedient, and collect, receive
and receipt for all rentals and other income therefrom and apply the sums so
received as hereinafter provided in case of sale. Trustee is hereby further
authorized and empowered, either after or without such entry, to sell and
dispose of the Properties en masse or in separate parcels (as Trustee may think
best), and all the right, title and interest of Grantor, by advertisement or in
any manner provided by the laws of the jurisdiction in which the Property is
located, (GRANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A HEARING PRIOR TO SUCH
SALE), and to issue, execute and deliver a deed of conveyance, all as then may
be provided by law; and Trustee shall, out of the proceeds or avails of such
sale, after first paying and retaining all fees, charges, costs of advertising
any Property and of making said sale, and attorney's fees as herein provided,
pay to Beneficiary or the legal holder of the Indebtedness the amount thereof,
including all sums advanced or expended by Beneficiary or the legal holder of
the Indebtedness, with interest from date of advance or expenditure at the
Default Rate (as defined in the Note), rendering the excess, if any, as provided
by law; such sale or sales and said deed or deeds so made shall be a perpetual
bar, both in law and equity, against Grantor and the heirs, successors and
assigns of Grantor, and all other persons claiming the Properties aforesaid, or
any part thereof by, from, through or under Grantor. The legal holder of the
Indebtedness may purchase the Properties or any part thereof, and it shall not
be obligatory upon the purchasers at any such sale to see to the application of
the purchase money.
In addition to the above remedies, it is agreed that upon the occurrence of an
Event of Default, Beneficiary may, at its option, without demand or notice,
request the Trustee, and the Trustee shall be, and is hereby authorized and
empowered to proceed with foreclosure and sale of any Property by advertisement
or in any manner provided by the laws of the state in which the Property is
located in satisfaction of the item in default as if under a full foreclosure,
but without declaring the unmatured portion of the Indebtedness due; such sale
shall be made subject to the unmatured portion of the Indebtedness and it is
agreed that such sale shall not in any manner affect the unmatured portion of
the Indebtedness, but as to such unmatured portion, this instrument shall remain
in full force and effect just as though no sale had been made under the
provisions of this paragraph and it is further agreed that several sales may be
made without exhausting the right of sale for any unmatured portion of the
Indebtedness or for any future breach of the covenants, conditions or
stipulations set out herein.
APPRAISEMENT, STAY AND REDEMPTION LAWS. To the extent permitted by applicable
law, Grantor expressly waives and relinquishes the benefit of all laws now
existing or that may hereafter be enacted providing for any appraisement before
sale of any of the Properties, commonly known as Appraisement Laws, and also the
benefit of all laws that may hereafter be enacted in any way extending the time
for the enforcement or the collection of the Indebtedness, or creating or
extending a period for redemption from any sale made to collect the
Indebtedness, commonly known as Stay Laws and Redemption Laws.
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<PAGE> 12
DUE ON SALE. The present ownership and management of the Properties is a
material consideration to Beneficiary in making the loan secured by this
instrument, and Grantor shall not (i) convey title to all or any part of the
Property, (ii) or enter into any contract to convey (land contract/installment
sales contract/contract for deed) title to all or any part of the Properties
(other than office leases located on the Property), which gives a purchaser
possession of, or income from, the Property prior to a transfer of title to all
or any part of the Property ("Contract to Convey") except as provided in the
provisions entitled "PARTIAL RELEASES" and "PROPERTY SUBSTITUTION" set forth
herein. Any violation of this provision shall constitute a default under the
terms of this instrument.
Notwithstanding the foregoing, a default will not occur if Grantor mergers with,
or is consolidated with, another entity provided the successor to Grantor shall
have entered into and agreed to be bound by all of Grantor's obligations under
the Loan Documents and the Environmental Indemnity Agreement of even date
herewith.
FINANCIAL STATEMENTS. Grantor agrees to furnish to Beneficiary, at Grantor's
expense and within ninety (90) days after the close of each fiscal year
("Financial Statements Due Date"), annual audited financial statements on the
Grantor in form and substance currently required to be filed on Form 10-K for
annual reports pursuant to section 13 or 15(d) of the Securities Exchange Act of
1934 for which no other form is prescribed (the "Company Statements"). The
Company Statements shall be prepared in accordance with generally accepted
accounting principles and shall be audited by an independent certified public
accountant acceptable to Beneficiary (Beneficiary hereby approves the firms
commonly known as "Big Six").
In addition to the Company Statements, Grantor agrees to furnish to Beneficiary
annual financial statements on each Property in the form attached to the Phase I
Loan Commitment for each Park and all Parks in the aggregate including
(a) a statement of operations with a detailed line item breakdown
of all operating expenses, capitalized costs associated with
tenant improvements, lease commissions and capital
improvements.
Grantor agrees to furnish to Beneficiary for (i) each Building, (ii) each Park
and (iii) all Parks in the aggregate
(b) a current rent roll in the form attached to the Phase I Loan
Commitment (the "Rent Roll);
(c) if requested by Beneficiary, a report detailing cost
reimbursements to tenants, options and other major variations
from standard form leases (collectively referred to herein as
the "Property Statements").
The Property Statements shall be certified as to the accuracy and completeness
of the applicable information and be signed by either a Chief Executive Officer,
Chief Financial Officer or Chief Accounting Officer of Grantor (the
"Certification").
In addition, Grantor shall furnish to Beneficiary 10K and 10Q reports at the
time they are submitted to the Securities and Exchange Commission. At the time
the 10K and 10Q reports are submitted to Beneficiary, Grantor shall also forward
its computation of the calculations required under the "Financial Covenants"
along with a Certification verifying compliance with such covenants.
Grantor acknowledges that Beneficiary requires the Company Statements and
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<PAGE> 13
Property Statements (collectively, the "Financials"), Rent Roll and
Certification in order to record accurately the value of the Property for
financial and regulatory reporting.
If Grantor does not furnish, or cause to be furnished, the Financials, Rent Roll
and Certification to Beneficiary by the Financial Statements Due Date, within 30
days after Beneficiary shall have given written notice to Grantor that the
Financials, Rent Roll and/or Certification have not been received as required,
(x) interest on the unpaid principal balance of the Indebtedness shall
as of the Financial Statements Due Date, accrue and become payable at a
rate equal to the sum of the Interest Rate (as defined in the Note)
plus one percent (1%) per annum (the "Increased Rate"); and
(y) Beneficiary may elect to obtain an independent appraisal and audit
of the Property at Grantor's expense, and Grantor agrees that it will,
upon request, promptly make Grantor's books and records regarding the
Property available to Beneficiary and the person(s) performing the
appraisal and audit (which obligation Grantor agrees can be
specifically enforced by Beneficiary).
The amount of the payments due under the Note during the time in which the
Increased Rate shall be in effect shall be changed to an amount which is
sufficient to amortize the then unpaid principal balance at the Increased Rate
during the then remaining portion of a period of 25 years commencing with the
Amortization Period Commencement Date (as defined in the Note). Interest shall
continue to accrue and be due and payable monthly at the Increased Rate until
the Financials, Rent Roll and Certification shall be furnished to Beneficiary as
required. Commencing on the date on which the Financials, Rent Roll and
Certification are received by Beneficiary, interest on the unpaid principal
balance shall again accrue at the Interest Rate and the payments due during the
remainder of the term of the Note shall be changed to an amount which is
sufficient to amortize the then unpaid principal balance at the Interest Rate
during the then remaining portion of a period of 25 years commencing with the
Amortization Period Commencement Date. Notwithstanding the foregoing,
Beneficiary shall have the right to conduct an independent audit at its own
expense at any time.
Notwithstanding the above, the Financial Statements Due Date may be extended up
to sixty (60) days if Grantor receives an extension from the Securities and
Exchange Commission for filing of its annual report of Form 10K.
PROPERTY SUBSTITUTION. Provided there is then no default under any Loan Document
and upon prior written request from Grantor, Beneficiary shall not withhold its
consent to the addition of a property and concurrent release of a property for
which it is substituted ("Substitution") provided:
(i) the property to be released and the property to be substituted are
whole office Parks and, in the case where a portion of such Park is
also encumbered by the Phase I Loan Documents, such portion is
concurrently being released from the Phase I Loan Documents pursuant to
the terms thereof;
(ii) the substituted Park is of equal or higher Valuation than the Park
being released;
(iii) the substituted Park is at least 90% leased with net rents equal
to or greater than the net rents of the Park being withdrawn;
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<PAGE> 14
(iv) Grantor has the same ownership interest in the substituted Park as
in the Park to be released;
(v) the substituted Park satisfies all of the conditions of the Phase
II Loan Commitment which would have been satisfied if the Park was part
of the original property;
(vi) the Substitutions will be limited to not more than one Park per
calendar year, and not more than three Parks prior to the Maturity Date
of the Tranche D Promissory Note;
(vii) the request for the Substitution is made prior to the last two
(2) years of the term of (i) the Tranche C Promissory Note in the case
of a Pool C Park and (ii) the Tranche D Promissory Note in the case of
a Pool D Park.
If Grantor shall make a Substitution, Beneficiary shall be paid a fee equal to
(i) .50% of the Valuation of the Park being released if the Park being withdrawn
is located in El Paso, Texas, Orlando, Florida or San Antonio, Texas, or (ii)
.75% of the Valuation of the Park being released for any other Park being
withdrawn. At the time of the Substitution, no modification of the interest rate
or repayment terms of the Note will be required.
RIGHT OF FIRST OFFER INVOLVING OTHER PROPERTY. Beneficiary shall have the right
of first offer involving the properties described in Exhibit "C" (the "Vacant
Land") attached hereto and incorporated herein by this reference (provided,
however, this provision shall not apply to Vacant Land located in a Park that
has been substituted or released from the lien hereof) for (i) the purchase of
any Vacant Land prior to Grantor selling such Vacant Land, and (ii) for mortgage
loan financing for any future mortgage loan prior to Grantor obtaining
construction or permanent financing of improvements erected or to be erected on
any Vacant Land.
Grantor shall submit to Beneficiary written notice of its intent to seek to sell
or obtain mortgage financing together with sufficient documentation (if for sale
of vacant land: any proposed sales package, plat or survey, number of acres,
current zoning, availability of utilities and latest real estate tax notice; if
for such financing to cover development, the aforementioned items plus:
development specifications, construction budget and stabilized pro-forma) to
permit evaluation and underwriting. Beneficiary shall have thirty (30) days from
the date such notice and documentation is delivered within which to respond
thereto (the "Offer Period").
In the event that (a) Beneficiary does not respond or otherwise declines to
exercise this right of first offer within the Offer Period, or (b) Grantor
declines Beneficiary's proposal for such sale or mortgage financing, as the case
may be, Grantor shall be free for a period of twelve (12) months from the
expiration of the Offer Period to enter into any contract or contracts for the
sale or mortgage financing of such parcel of Vacant Land as it shall determine
in its sole discretion.
Beneficiary's refusal to offer to purchase or provide mortgage financing shall
not be deemed to be a waiver by Beneficiary of its right of first refusal to
purchase or provide mortgage financing for other portions of the Vacant Land or
to purchase or provide mortgage financing for the Vacant Land if Grantor is
unsuccessful in procuring from another source that sale or such financing which
was previously offered to Beneficiary in accordance with the above procedure.
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<PAGE> 15
PARTIAL RELEASES. Upon written request from Grantor, Beneficiary will release
from the lien of this instrument either the specific Parks located in Pool A and
Pool C designated by Grantor in the case of the Tranche A Promissory Note and
the Tranche C Promissory Note or the specific Parks located in Pool B and Pool D
designated by Grantor in the case of the Tranche B Promissory Note and the
Tranche D Promissory Note, provided there is then no default in any of the Loan
Documents and subject to satisfaction of the following conditions:
1) Grantor has prepaid fifty percent (50%) of the principal of
the Tranche A Promissory Note and the Tranche C Promissory
Note or the Tranche B Promissory Note and the Tranche D
Promissory Note as permitted pursuant to the First Partial
Prepayment (as defined in the Phase I Note) and/or the Second
Partial Prepayment (as defined in the Phase I Note) and/or the
First Partial Note C Prepayment or the first Partial Note D
Prepayment (as defined in the Phase II Note) and/or the Second
Partial Note C Prepayment or the Second Partial Note D
Prepayment (as defined in the Phase II Note);
2) No other Property (other than in connection with a
Substitution hereunder) in such Pool has been released;
3) Remaining portions of the Properties in both Pools have a debt
service coverage of not less than 1.4 for the Indebtedness;
and
4) The Valuation of the Parks being released does not exceed
33-1/3% of the amount of the Valuation of all Parks in the
respective Pool.
FULL RELEASE. Upon payment in full of the Tranche A Promissory Note and the
Tranche C Promissory Note (including the applicable prepayment fee described
therein), the Pool A Parks and the Pool C Parks will be released from the lien
hereof and, upon payment in full of the Tranche B Promissory Note and the
Tranche D Promissory Note (including the applicable prepayment fee described
therein), the Pool B Parks and the Pool D Parks will be released from the lien
hereof.
DEPOSITS BY GRANTOR. To assure the timely payment of real estate taxes and
special assessments, Beneficiary shall have the option upon the occurrence of an
Event of Default to require Grantor to deposit funds with Beneficiary, in
monthly or other periodic installments in amounts estimated by Beneficiary from
time to time sufficient to pay real estate taxes and special assessments as they
become due. If at any time the funds so held by Beneficiary, or in such other
account, shall be insufficient to pay any of said expenses, Grantor shall, upon
receipt of notice thereof, immediately deposit such additional funds as may be
necessary to remove the deficiency. All funds so deposited shall be irrevocably
appropriated to Beneficiary to be applied to the payment of such real estate
taxes and special assessments and, at the option of Beneficiary after an Event
of Default, the Indebtedness then due, by acceleration or otherwise.
Notwithstanding the above, upon the occurrence of an Event of Default,
Beneficiary shall, so long as no delinquency would occur, cooperate with Grantor
to attain payment discounts available to Grantor and permit Grantor to contest
the amount of such taxes.
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<PAGE> 16
MODIFICATION OF TERMS. Without affecting the liability of Grantor or any other
person (except any person expressly released in writing) for payment of the
Indebtedness or for performance of any obligation contained herein and without
affecting the rights of Beneficiary with respect to any security not expressly
released in writing, Beneficiary may, at any time and from time to time, either
before or after the maturity of the Note, without notice or consent: (i) release
any person liable for payment of all or any part of the Indebtedness or for
performance of any obligation; (ii) make any agreement extending the time or
otherwise altering the terms of payment of all or any part of the Indebtedness,
or modifying or waiving any obligation, or subordinating, modifying or otherwise
dealing with the lien or charge hereof; (iii) exercise or refrain from
exercising or waive any right Beneficiary may have; (iv) accept additional
security of any kind; (v) release or otherwise deal with any property, real or
personal, securing the Indebtedness, including all or any part of the
Properties.
EXERCISE OF OPTIONS. Whenever, by the terms of this instrument, of the Note or
any of the other Loan Documents, Beneficiary is given any option, such option
may be exercised when the right accrues, or at any time thereafter, and no
acceptance by Beneficiary of payment of Indebtedness in default shall constitute
a waiver of any default then existing and continuing or thereafter occurring.
NATURE AND SUCCESSION OF AGREEMENTS. Each of the provisions, covenants and
agreements contained herein shall inure to the benefit of, and be binding on,
the heirs, executors, administrators, successors, grantees, lessees and assigns
of the parties hereto, respectively, and the term "Beneficiary" shall include
the owner and holder of the Note.
LEGAL ENFORCEABILITY. No provision of this instrument, the Note or any other
Loan Documents shall require the payment of interest or other obligation in
excess of the maximum permitted by law. If any such excess payment is provided
for in any Loan Documents or shall be adjudicated to be so provided, the
provisions of this paragraph shall govern and Grantor shall not be obligated to
pay the amount of such interest or other obligation to the extent that it is in
excess of the amount permitted by law.
LIMITATION OF LIABILITY. Notwithstanding any provision contained herein to the
contrary, the personal liability of Grantor shall be limited as provided in the
Note.
CAPTIONS. The captions contained herein are for convenience and reference only
and in no way define, limit or describe the scope or intent of, or in any way
affect this instrument.
GOVERNING LAW. The laws of the State named in the upper left-hand corner of the
cover page of this Master Lien Instrument shall govern and control the
interpretation of this Master Lien Instrument and the rights, obligations,
duties and liabilities of the parties hereto.
INCORPORATION BY REFERENCE. The state riders to this Master Lien Instrument
attached hereto as Exhibits "B-1" through "B-3" are an integral part hereof and
are incorporated herein by this reference.
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<PAGE> 17
IN WITNESS WHEREOF, this instrument has been executed by the Grantor as of the
day and year first above written.
KOGER EQUITY, INC., a Florida
corporation
Signed in presence of: By: /s/ G. DANNY EDWARDS
---------------------------------
Name: /s/ G. DANNY EDWARDS
--------------------------------
Title: TREASURER
/s/ LYNDA R. AYCOCK ----------------------------
- --------------------------- 8880 Freedom Crossing Trail
/s/ LYNDA R. AYCOCK Jacksonville, FL 32256
- ---------------------------
Name Typed or Printed
Attest: /s/ W. LAWRENCE JENKINS
----------------------------
Name: /s/ W. LAWRENCE JENKINS
----------------------------
Title: CORPORATE SECRETARY
/s/ H. F. McCART, JR. ----------------------------
- --------------------- VICE PRESIDENT
/s/ H. F. McCART, JR. ----------------------------
- --------------------- 8880 Freedom Crossing Trail
Name Typed or Printed Jacksonville, FL 32256
(corporate seal)
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<PAGE> 18
STATE OF GEORGIA )
)ss.
COUNTY OF CAMDEN )
BEFORE ME, the undersigned authority, on this day personally appeared
W. LAWRENCE JENKINS AND G. DANNY EDWARDS, known to me to be the persons whose
names are subscribed to the foregoing instrument, and known to me to be the VICE
President and Treasurer, respectively, of KOGER EQUITY, INC., a Florida
corporation, and acknowledged to me that they executed said instrument for the
purposes and considerations therein expressed, and as the act of said
corporation.
GIVEN under my hand and official seal, this 2nd day of September 1999.
/s/ CARRIE HEMMING
-------------------
Notary Public
My commission expires:
NOTARY PUBLIC, CAMDEN COUNTY, GA
MY COMMISSION EXPIRES DEC. 28, 2002
18
<PAGE> 1
EXHIBIT 10(J)(9)
LOAN NO. C-332344 Tennessee
RECORDING REQUESTED BY
- ----------------------------
"Maximum principal indebtedness for
WHEN RECORDED MAIL TO Tennessee recording tax purposes is
$ .00."
The Northwestern Mutual Life Ins. Co. ----------------
720 East Wisconsin Ave. - Rm. N16WC
Milwaukee, WI 53202
Attn: Rosemary Poetzel
SPACE ABOVE THIS LINE FOR RECORDER'S USE
- --------------------------------------------------------------------------------
This instrument was prepared by Paul E. McElwee, Attorney, for The Northwestern
Mutual Life Insurance Company, 720 East Wisconsin Ave., Milwaukee, WI 53202.
LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT
THIS LEASEHOLD DEED OF TRUST and SECURITY AGREEMENT, Made as of the 2nd day of
September, 1999 between KOGER EQUITY, INC., a Florida corporation, 8880 Freedom
Crossing Trail, Jacksonville, FL 32256, herein (said Grantor/Trustor, whether
one or more in number) called "Grantor", and JOHN S. SHOAF, JR., 850 Ridge Lake
Boulevard, Suite 205, Memphis, TN 38120, herein called "Trustee", and THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation, 720 E.
Wisconsin Avenue, Milwaukee, WI 53202, herein called "Beneficiary":
WITNESSETH, That Grantor, in consideration of the indebtedness herein mentioned,
does hereby irrevocably bargain, sell, grant, transfer, assign and convey unto
Trustee, in trust, with power of sale and right of entry and possession, the
following property (herein referred to as the "Property"):
A. Grantor's leasehold interest in the land in the City of
Memphis, County of Shelby, State of Tennessee, described in
Exhibit "A-1" attached hereto and incorporated herein (the
"Land") and all appurtenances thereto; and
B. Grantor's leasehold interest in all buildings and improvements
now existing or hereafter erected thereon, all waters and
water rights, all engines, boilers, elevators, all heating
apparatus, electrical equipment, air-conditioning and
ventilating equipment, water and gas fixtures, and all other
fixtures of every description belonging to Grantor which are
or may be placed or used upon the Land or attached to the
buildings or improvements, all of which, to the extent
permitted by applicable law, shall be deemed an accession to
the freehold and a part of the realty as between the parties
hereto.
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<PAGE> 2
Except as expressly provided in the covenant hereof entitled "DUE ON SALE",
Grantor agrees not to sell, transfer, assign or remove anything described in B
above now or hereafter located on the Land without prior written consent from
Beneficiary unless (i) such action does not constitute a sale or removal of any
buildings or building improvements (except as provided in (y) below) or the sale
or transfer of waters or water rights and (x) in the case of personal property,
(a) such personal property is removed on a temporary basis for repairs in the
ordinary course of business; (b) such personal property is not reasonably
necessary or appropriate to the efficient use or operation of the Property; (c)
such personal property is consumed or worn out or has become obsolete and is
promptly replaced by Grantor with personal property of equal or greater value
and/or utility, unless replacement is not reasonably necessary or appropriate to
the efficient use of the Property; or (d) such personal property is actually
replaced by Grantor with similar personal property of equal or greater value
and/or utility, or (y) in the case of tenant improvements, the removal thereof
is in the ordinary course of leasing office space which is a part of the
Property.
Without limiting the foregoing grants, Grantor hereby pledges to Beneficiary,
and grants to Beneficiary a security interest in, all of Grantor's present and
hereafter acquired right, title and interest in and to the Property and any and
all
C. cash and other funds now or at any time hereafter deposited by
or for Grantor on account of tax, special assessment,
replacement or other reserves required to be maintained
pursuant to the Loan Documents (as hereinafter defined) with
Beneficiary or a third party, or otherwise deposited with, or
in the possession of, Beneficiary pursuant to the Loan
Documents; and
D. surveys, soils reports, environmental reports, guaranties,
warranties, architect's contracts, construction contracts,
drawings and specifications, applications, permits, surety
bonds and other contracts relating to the acquisition, design,
development, construction and operation of the Property; and
E. present and future rights to condemnation awards, insurance
proceeds or other proceeds at any time payable to or received
by Grantor on account of the Property or any of the foregoing
personal property.
All personal property hereinabove described is hereinafter referred to as the
"Personal Property".
SECURITY AGREEMENT CLAUSE
If any of the Property is of a nature that a security interest therein can be
perfected under the Uniform Commercial Code, this instrument shall constitute a
security agreement and financing statement if permitted by applicable law and
Grantor agrees to join with Beneficiary in the execution of any financing
statements and to execute any other instruments that may be required for the
perfection or renewal of such security interest under the Uniform Commercial
Code.
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<PAGE> 3
SECURING CLAUSE
TO HAVE AND TO HOLD the same unto Trustee for the purpose of securing:
(a) Payment to the order of Beneficiary of the indebtedness evidenced
by (i) the Tranche C Promissory Note of even date herewith executed by Grantor
for the principal sum of FOURTEEN MILLION SEVEN HUNDRED THOUSAND DOLLARS, with
final maturity no later than January 1, 2007 and with interest as therein
expressed and (ii) the Tranche D Promissory Note of even date herewith executed
by Grantor for the principal sum of THIRTY MILLION THREE HUNDRED THOUSAND
DOLLARS, with final maturity no later than January 1, 2009 and with interest as
therein expressed (the Tranche C Promissory Note and Tranche D Promissory Note,
as such instruments may be amended, restated, renewed and extended, are
hereinafter collectively referred to as the "Phase II Note"), it being
recognized that the funds may not have been fully advanced as of the date hereof
but may be advanced in the future in accordance with the terms of the Phase II
Loan Commitment (as hereinafter defined); and
(b) Payment to the order of Beneficiary of the indebtedness evidenced
by (i) the Tranche A Promissory Note dated as of December 16, 1996 executed by
Grantor for the principal sum of ONE HUNDRED MILLION FIVE HUNDRED THOUSAND
DOLLARS, with final maturity no later than January 1, 2007 and with interest as
therein expressed and (ii) the Tranche B Promissory Note dated as of December
16, 1996 executed by Grantor for the principal sum of EIGHTY-NINE MILLION FIVE
HUNDRED THOUSAND DOLLARS, with final maturity no later than January 1, 2009 and
with interest as therein expressed (the Tranche A Promissory Note and Tranche B
Promissory Note, as such instruments may be amended, restated, renewed and
extended, are hereinafter collectively referred to as the "Phase I Note"), and
secured by a lien on certain property described in that certain Master Lien
Instrument dated as of December 16, 1996, executed by Koger Equity, Inc., a
Florida corporation to a Trustee for the benefit of Beneficiary (the "Master
Lien Instrument"); and
(c) Payment of all sums that may become due Beneficiary under the
provisions of, and the performance of each agreement of Grantor contained in,
the Phase II Loan Documents, the Phase I Loan Documents and the IDB Loan
Documents.
As used herein, "Phase II Loan Documents" means this the Phase II Lien
Instrument, the Phase II Note, that certain Absolute Assignment of Leases and
Rents of even date herewith between Grantor and Beneficiary (the "Phase II
Absolute Assignment"), that certain Certification of Borrower of even date
herewith, to the extent not inconsistent with the other Phase II Loan Documents,
that certain Application dated February 26, 1999 and acceptance letter dated
April 5, 1999 executed by Beneficiary (together, the "Phase II Loan
Commitment"), and any other agreement entered into by Grantor and delivered to
Beneficiary in connection with the indebtedness evidenced by the Note, except
for any separate environmental indemnity agreement, as any of the foregoing may
be amended from time to time.
As used herein, "Phase I Loan Documents" means the Master Lien Instrument, the
Phase I Note, that certain Absolute Assignment of Leases and Rents dated as of
December 16, 1996 between Grantor and Beneficiary (the "Phase I Absolute
Assignment"), that certain Certification of Borrower dated as of December 16,
1996, to the extent not inconsistent with the other Phase I Loan Documents, that
certain Application dated July 29, 1996 and acceptance letter dated September
10, 1996 executed by Beneficiary (together, the "Phase I Loan Commitment"), and
any other agreement entered into by Grantor and delivered to Beneficiary in
connection with the indebtedness
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<PAGE> 4
evidenced by the Phase I Note, except for any separate environmental indemnity
agreement, as any of the foregoing may be amended from time to time.
As used herein, "IDB Loan Documents" means this instrument, that certain IDB
Deed of Trust and Security Agreement of even date herewith between IDB, Grantor
and Beneficiary ("the IDB Lien Instrument"), as any of the foregoing may be
amended from time to time.
DEFINITIONS CLAUSE
"Park" means any one of the ten office parks described by the consolidation of
the individual legal descriptions on any one of the exhibits entitled Exhibits
"A-1" through "A-10" attached hereto.
"Building" means each of the buildings located on the Land described in Exhibits
"A-1" through "A-10" attached hereto.
"Pool" means either of the Pool A Parks, the Pool B Parks, the Pool C Parks or
the Pool D Parks.
"Pool A Parks" mean the Parks in the City of Memphis, Shelby County, Tennessee;
in the City of San Antonio, Bexar County, Texas; in the City of St. Petersburg,
Pinellas County, Florida; and in the City of Tallahassee, Leon County, Florida.
"Pool B Parks" mean the Parks in the City of Austin, Travis County, Texas; in
the City of El Paso, El Paso County, Texas; in the City of Greenville,
Greenville County, South Carolina; in the City of Jacksonville, Duval County,
Florida; and in the City of Orlando, Orange County, Florida.
"Pool C Parks" mean the Parks in the City of Memphis, Shelby County, Tennessee;
and in the City of Tallahassee, Leon County, Florida.
"Pool D Parks" mean the Parks in the City of Greenville, Greenville County,
South Carolina; in the City of Jacksonville, Duval County, Florida; and in the
City of Orlando, Orange County, Florida.
"Valuation" means the amount mutually agreed to by Grantor and Beneficiary or,
if such parties do not so mutually agree, upon the following appraisal procedure
which shall be initiated by Grantor by giving written notice to Beneficiary
which shall include its designation of an appraiser (the "First Appraiser").
Within twenty (20) days after the service of the notice designating the First
Appraiser, Beneficiary shall give written notice to Grantor designating the
second appraiser (the "Second Appraiser"). If the Second Appraiser is not so
designated within the time above specified, the appointment of the Second
Appraiser shall be made in the same manner as is hereinafter provided for the
appointment of the third appraiser (the "Third Appraiser") in the event the
First and Second Appraisers are unable to agree upon the Third Appraiser. The
First and Second Appraisers so designated or appointed shall meet within ten
(10) days after the Second Appraiser is appointed, and if, within thirty (30)
days after the Second Appraiser is appointed, the First and Second Appraisers do
not agree upon the Valuation, they shall appoint a Third Appraiser who shall be
a competent and impartial person. In the event of their being unable to agree
upon such appointment within ten (10) days after the time aforesaid, the Third
Appraiser shall be selected by Beneficiary and Grantor if they can agree thereon
within a further period of fifteen (15) days. If the parties do not agree, or if
for any reason the three appraisers have not been chosen within fifteen (15)
days after the expiration of the fifteen (15) day period referred to in the
immediately preceding sentence, either the Beneficiary or Grantor, on behalf of
both, may request such appointment by the presiding Judge of the United States
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<PAGE> 5
District Court for the District in which the Property is located. In the event
of the failure, refusal or inability of any appraiser to act, a new appraiser
shall be appointed in his stead, which appointment shall be made in the same
manner as hereinbefore provided for the appointment of such appraiser so
failing, refusing or being unable to act. Grantor shall pay the fees and
expenses of all appraisers. Any appraiser designated to serve in accordance with
the provisions of this Agreement shall be qualified to appraise the type of
property being appraised in the County and State in which the Park in question
is located, shall be a member of the Appraisal Institute (or any successor
association or body of comparable standing if such Institute is not then in
existence) and shall have been actively engaged in the appraisal of real estate
in the County (set forth above) for a period of not less than ten (10) years
immediately preceding its appointment. The Appraisers shall determine the
Valuation, provided, however, no value shall be attributed to good will. The
Appraisers may employ such independent counsel and accountants, unaffiliated
with Beneficiary or Grantor as any two of the three appraisers shall determine
to be necessary or advisable to assist them in carrying out their duties
hereunder. The fees and expenses of such counsel and accountants shall be borne
by Grantor. A decision joined in by two of the three appraisers shall be the
decision of the appraisers. In the event no two appraisers can agree, the
decision of the Third Appraiser shall be conclusive. After reaching a decision,
the appraisers shall give written notice thereof to Beneficiary and Grantor.
A violation of any of the Financial Covenants provided for in Paragraph 8 of the
Phase II Loan Commitment will cause a default under the terms and conditions of
any of the Phase II Loan Documents.
NOTHING CONTAINED HEREIN IS INTENDED TO CONSTITUTE AN ALLOCATION OF SECURITY FOR
PURPOSES OF BENEFICIARY'S REMEDIES; AND GRANTOR AGREES THAT UNTIL THE RELEASE OF
SECURITY PURSUANT TO THE TERMS HEREOF, ALL OF THE PROPERTY SECURES THE TRANCHE A
PROMISSORY NOTE, THE TRANCHE B PROMISSORY NOTE, THE TRANCHE C PROMISSORY NOTE
AND THE TRANCHE D PROMISSORY NOTE.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, GRANTOR REPRESENTS, COVENANTS AND
AGREES AS SET FORTH BELOW:
PAYMENT OF DEBT. Grantor agrees to pay the indebtedness hereby secured (the
"Indebtedness") promptly and in full compliance with the terms of the Loan
Documents.
OWNERSHIP. Grantor represents that it owns the Properties and has good and
lawful right to convey the same and that the Properties are free and clear from
any and all encumbrances whatsoever, except as appears in the title evidence
accepted by Beneficiary. Grantor does hereby forever warrant and shall forever
defend the title and possession thereof against the lawful claims of any and all
persons whomsoever.
MAINTENANCE OF PROPERTY AND COMPLIANCE WITH LAWS. Grantor agrees to keep the
buildings and other improvements now or hereafter erected on the Land in good
condition and repair; not to commit or suffer any waste; to comply with all
laws, rules and regulations affecting the Properties with which the failure to
comply would have a material adverse effect on any Building; and to permit
Beneficiary to enter at all reasonable times and upon 24 hours prior notice for
the purpose of inspection and of conducting, in a reasonable and proper manner,
such tests to be conducted at
5
<PAGE> 6
Beneficiary's expense, except as otherwise provided for in any separate
environmental indemnity agreement as Beneficiary determines to be necessary in
order to monitor Grantor's compliance with applicable laws and regulations
regarding hazardous materials affecting the Properties.
Notwithstanding the foregoing, the Grantor is not required to restore or repair
buildings or improvements to the extent insurance proceeds or condemnation
awards are not made available by the Beneficiary to the Grantor for such purpose
but are instead used by Beneficiary to repay a portion of the balance of the
Note. If Grantor is not required to restore or repair the damaged or taken
property in accordance with the immediately preceding sentence, it shall (i) for
any partially destroyed or taken building or improvements secure and enclose the
remaining portion of the building or improvements so as to make such remaining
portions of such building or improvements reasonably usable to the extent
practical and (ii) for any building or improvements which are substantially or
totally destroyed demolish such remaining building or improvements and rough
grade and landscape the applicable portion of the Lane in accordance with the
requirements of applicable governmental authorities so that the remaining
portion of such destroyed building or improvements do not present a safety
hazard or detract from the overall scenic surroundings of the applicable Park.
INSURANCE. Grantor agrees to keep the Properties insured for the protection of
Beneficiary and Beneficiary's wholly owned subsidiaries and agents in such
manner, in such amounts and in such companies as Beneficiary may from time to
time approve, and to keep the policies or certificates therefor, properly
endorsed, on deposit with Beneficiary, or at Beneficiary's option, to keep
certificates of insurance (Acord 27 for all property insurance and Acord 25-S
for all liability insurance) evidencing all insurance coverages required
hereunder on deposit with Beneficiary, which certificates shall provide at least
thirty (30) days notice of cancellation to Beneficiary and shall list
Beneficiary as the certificate holder; that insurance loss proceeds from all
property insurance policies placed by Grantor (less expenses of collection)
shall, at Beneficiary's option, be applied on the Indebtedness, whether due or
not, or to the restoration of the Properties, or be released to Grantor, but
such application or release shall not cure or waive any default under any of the
Loan Documents. If Beneficiary elects to apply the insurance loss proceeds on
the Indebtedness, no prepayment privilege fee shall be due on the amount of
proceeds so applied.
Notwithstanding the immediately preceding paragraph, Beneficiary agrees that if
the insurance loss proceeds are less than $500,000 (increased by 3% per year
from the date hereof) for any one casualty, such proceeds will be released to
Grantor for reasonable restoration of the Property (which, for purposes of this
covenant includes rebuilding or replacement such that the Valuation of
applicable Property is not diminished) and the other provisions of this covenant
shall not be applicable, provided, however, insurance loss proceeds under this
paragraph shall not be released to Grantor if Beneficiary has previously
released insurance loss proceeds to Grantor and the applicable Property has not
been so restored.
Notwithstanding the two immediately preceding paragraphs, Beneficiary agrees
that if there then exists no Event of Default under any Loan Document and if the
insurance loss proceeds are less than the unpaid principal balance of the Note
and if the casualty occurs prior to the last three years of the term of the
Note, then the insurance loss proceeds (less expenses of collection) shall be
applied to restoration of the Property to its condition prior to the casualty,
subject to satisfaction of the following conditions:
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<PAGE> 7
(a) There is no existing Event of Default at the time of casualty,
and if there shall occur any Event of Default after the date
of the casualty, Beneficiary shall have no further obligation
to release insurance loss proceeds hereunder.
(b) The casualty insurer has not denied liability for payment of
insurance loss proceeds as a result of any act, neglect, use
or occupancy of the Property by Grantor or any tenant of the
Property.
(c) Beneficiary shall be satisfied that that the amount necessary
to complete the restoration of the Property is available from
all insurance loss proceeds so held, together with
supplemental funds which Grantor commits to make available to
such restoration and agrees to fund prior to the disbursement
of any insurance proceeds. Any remaining insurance loss
proceeds may, at the option of Beneficiary, be applied on the
Indebtedness, whether or not due, or be released to Grantor.
(d) If required by Beneficiary, Beneficiary shall be furnished a
satisfactory report addressed to Beneficiary from an
environmental engineer or other qualified professional
satisfactory to Beneficiary to the effect that no adverse
environmental impact to the Property resulted from the
casualty or if any such impact has resulted, that the same has
been corrected to Beneficiary's satisfaction.
(e) Beneficiary shall release casualty insurance proceeds as
restoration of the Property progresses provided that
Beneficiary is furnished satisfactory evidence of the costs of
restoration and if, at the time of such release, there shall
exist no Event of Default under the Loan Documents. If the
estimated cost of restoration exceeds $500,000 (increased by
3% per year from the date hereof), (i) the drawings and
specifications for the restoration shall be approved by
Beneficiary in writing prior to commencement of the
restoration, and (ii) Beneficiary shall receive an
administration fee equal to 1% of the cost of restoration.
(f) Prior to each release of funds, Grantor shall obtain for the
benefit of Beneficiary an endorsement to Beneficiary's title
insurance policy insuring against any liens arising from the
restoration.
(g) Grantor shall pay all costs and expenses incurred by
Beneficiary, including, but not limited to, outside legal
fees, title insurance costs, third-party disbursement fees,
third-party engineering reports and inspections deemed
necessary by Beneficiary.
(h) All applicable reciprocal easement and operating agreements,
if any, benefiting the Property shall remain in full force and
effect between the parties thereto on and after restoration of
the Property.
(i) Beneficiary shall be satisfied that the operating income from
the buildings not destroyed plus loss of rents insurance
proceeds will be sufficient to cover the annual debt service
under all indebtedness secured by the Property at least 1.3
times.
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<PAGE> 8
(j) All leases of more than 10,000 rentable square feet in effect
at the time of the casualty with tenants who have entered into
Beneficiary's form of Non-Disturbance and Attornment Agreement
or similar agreement shall remain in full force and each
tenant thereunder shall be obligated, or shall elect, to
continue the lease term at full rental (subject only to
abatement, if any, during any period in which the Property or
a portion thereof shall not be used and occupied by such
tenant as a result of the casualty).
If a casualty as described in the preceding paragraph damages more than one
Building and one or more of the damaged Buildings satisfies the conditions of
(a) through (j) above (each a "Qualifying Building") and one or more of the
damaged Buildings does not satisfy the conditions of (a) through (j) above (a
"Non - Qualifying Building"), insurance loss proceeds allocated by Beneficiary
shall be applied to restoration of each Qualifying Building, as provided in the
preceding paragraph. Such allocation of insurance proceeds by Beneficiary shall
be made in the same ratio that the aggregate net rentable square feet of each
Qualifying Building bears to the sum of the aggregate net rentable square feet
of each Qualifying Building plus the aggregate net rentable square feet of each
Non - Qualifying Building.
EARTHQUAKE. If the Property is damaged by an earthquake during the term of the
Indebtedness:
(A) Beneficiary may require a new "Seismic Risk Estimate" (as
defined below) to be performed at Grantor's expense, and
(B) Grantor shall perform repair and retrofit work,
satisfactory to Beneficiary, which results in (i) the complete
repair of the Property and (ii) the performance of a
subsequent Seismic Risk Estimate verifying that the Property
meets "Minimum Seismic Criteria" (as defined below). Such work
shall be commenced and completed as soon as possible and in
any event within one year of the earthquake.
Without limiting the Grantor's obligation to cause the Property to satisfy
Minimum Seismic Criteria, during any period of time in which the Property does
not satisfy Minimum Seismic Criteria, Grantor shall provide Beneficiary with
evidence of, and maintain, "Earthquake Insurance" (as defined below). In the
event Earthquake Insurance is not attainable, Grantor shall furnish Beneficiary
a clean letter of credit in an amount and form satisfactory to Beneficiary in
lieu of such Earthquake Insurance.
As used herein, "Earthquake Insurance" means a policy satisfactory to
Beneficiary with a deductible of no greater than 5% of the "Replacement Cost"
(as defined below) and in an amount calculated as follows: (i) the "Loan Amount"
(as defined below) plus (ii) the "Specified Loss Dollar Amount" (as defined
below) plus (iii) 5% of the Replacement Cost minus (iv) 90% of the "Market
Value" (as defined below).
As used herein, "Loan Amount" shall mean the total principal amount advanced
under the Note.
As used herein, "Loan Plus Specified Loss" means the sum of the Loan Amount and
the Specified Loss Dollar Amount.
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<PAGE> 9
As used herein, "Market Value" means the estimated fair market value of the
Property, determined by Beneficiary in its sole discretion, at the time a
Seismic Risk Estimate is performed.
As used herein, "Minimum Seismic Criteria" means that both the Specified Loss
Percentage for the Property is less than or equal to 30% and the Loan Plus
Specified Loss is less than or equal to 90% of the Market Value.
As used herein, "Model" means a computer based seismic model selected by
Beneficiary, currently the Insurance and Investment Risk Assessment System
("IRAS") program by Risk Management Solutions ("RMS").
As used herein, "Replacement Cost" means the estimated total cost, determined by
Beneficiary in its sole discretion, to construct all of the Improvements as if
the Property were completely unimproved (not including the cost of site work,
utilities and foundation).
As used herein, "Seismic Risk Estimate" refers to the results of a seismic risk
estimate for the Property produced by the Model. Grantor agrees that it will not
rely for its own evaluation purposes on the Seismic Risk Estimate produced by or
for Beneficiary.
As used herein, "Specified Loss Dollar Amount" means the "Specified Loss
Percentage" (as defined below) multiplied by the Replacement Cost.
As used herein, "Specified Loss Percentage" means an estimate produced by the
Model of the earthquake damage to the Property, expressed as a percentage of
Replacement Cost. Beneficiary's parameters for the Model are based on a 90%
probability that the level of damage predicted will not be exceeded in an
earthquake with an expected 475 year return period.
CONDEMNATION. Grantor hereby assigns to Beneficiary (i) any award and any other
proceeds resulting from damage to, or the taking of, all or any portion of any
Property in connection with condemnation proceedings or the exercise of any
power of eminent domain and (ii) the proceeds from any sale or transfer in lieu
thereof (less expenses of collection) which shall be applied to restoration of
the affected Property, subject to the provisions stated above for application of
insurance loss proceeds and subject to the further condition that restoration or
replacement of the improvements on the Land to their functional and economic
utility prior to such damage or taking be possible within the Park in which such
taking occurred. Any portion of such award and proceeds not applied to
restoration shall, at Beneficiary's option, be applied on the Indebtedness,
whether due or not, or be released to Grantor, but such application or release
shall not cure or waive any default under any of the Loan Documents.
If Beneficiary elects to apply the condemnation award and proceeds on the
Indebtedness, no Prepayment Fee shall be due on the amount of award or proceeds
so applied.
TAXES AND SPECIAL ASSESSMENTS. Grantor agrees to pay before delinquency all
taxes and special assessments of any kind that have been or may be levied or
assessed against the Properties, this instrument, the Note or the Indebtedness,
or upon the interest of Trustee or Beneficiary in the Properties, this
instrument, the Note or the Indebtedness, and to procure and deliver to
Beneficiary a copy of the official receipt of the proper officer showing timely
payment of all such taxes and assessments; provided, however, that Grantor shall
not be required to pay any such taxes or special assessments if the amount,
applicability or validity thereof shall currently be contested in good faith
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<PAGE> 10
by appropriate proceedings and funds sufficient to satisfy the contested amount
have been deposited in an escrow satisfactory to Beneficiary or paid to the
taxing authority.
PERSONAL PROPERTY. With respect to the Personal Property, Grantor hereby
represents, warrants and covenants as follows:
(a) Except for the security interest granted hereby, Grantor is,
and as to portions of the Personal Property to be acquired after the date hereof
will be, the sole owner of the Personal Property, free from any lien, security
interest, encumbrance or adverse claim thereon of any kind whatsoever subject,
however, to the rights of any tenants under their leases. Grantor shall notify
Beneficiary of, and shall indemnify and defend Beneficiary and the Personal
Property against, all claims and demands of all persons at any time claiming the
Personal Property or any part thereof or any interest therein.
(b) Except as otherwise provided above, Grantor shall not lease,
sell, convey or in any manner transfer the Personal Property without the prior
consent of Beneficiary.
(c) Grantor maintains a place of business at the address set forth
in the first paragraph of this instrument, and Grantor shall immediately notify
Beneficiary in writing of any change in its place of business.
(d) At the request of Beneficiary, Grantor shall join Beneficiary
in executing one or more financing statements and continuations and amendments
thereof pursuant to the Uniform Commercial Code of the jurisdiction in which the
Property is located in form satisfactory to Beneficiary, and Grantor shall pay
the cost of filing the same in all public offices wherever filing is deemed by
Beneficiary to be necessary or desirable.
OTHER LIENS. Grantor agrees to keep the Properties free from all other mortgage
liens and from all liens prior to the lien created hereby. The creation of any
other mortgage lien, whether or not prior to the lien created hereby, the
creation of any prior lien on or the assignment or pledge by Grantor of its
revocable license to collect, use and enjoy rents and profits from the
Properties shall constitute a default under the terms of this instrument. The
term "mortgage" includes a mortgage, deed of trust, deed to secure debt or any
other security interest in the Property.
EARTHQUAKE. If the Property is damaged by an earthquake during the term of the
Indebtedness:
(A) Beneficiary may require a new "Seismic Risk Estimate"
(as defined below) to be performed at Grantor's expense, and
(B) Grantor shall perform repair and retrofit work,
satisfactory to Beneficiary, which results in (i) the complete
repair of the Property and (ii) the performance of a
subsequent Seismic Risk Estimate verifying that the Property
meets "Minimum Seismic Criteria" (as defined below). Such work
shall be commenced and completed as soon as possible and in
any event within one year of the earthquake.
Without limiting the Grantor's obligation to cause the Property to satisfy
Minimum Seismic Criteria, during any period of time in which the Property does
not satisfy Minimum Seismic Criteria, Grantor shall provide Beneficiary with
evidence of, and maintain, "Earthquake Insurance" (as defined below). In the
event Earthquake Insurance is not attainable, Grantor shall
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<PAGE> 11
furnish Beneficiary a clean letter of credit in an amount and form satisfactory
to Beneficiary in lieu of such Earthquake Insurance.
As used herein, "Earthquake Insurance" means a policy satisfactory to
Beneficiary with a deductible of no greater than 5% of the "Replacement Cost"
(as defined below) and in an amount calculated as follows: (i) the "Loan Amount"
(as defined below) plus (ii) the "Specified Loss Dollar Amount" (as defined
below) plus (iii) 5% of the Replacement Cost minus (iv) 90% of the "Market
Value" (as defined below).
As used herein, "Loan Amount" shall mean the total principal amount advanced
under the Note.
As used herein, "Loan Plus Specified Loss" means the sum of the Loan Amount and
the Specified Loss Dollar Amount.
As used herein, "Market Value" means the estimated fair market value of the
Property, determined by Beneficiary in its sole discretion, at the time a
Seismic Risk Estimate is performed.
As used herein, "Minimum Seismic Criteria" means that both the Specified Loss
Percentage for the Property is less than or equal to 30% and the Loan Plus
Specified Loss is less than or equal to 90% of the Market Value.
As used herein, "Model" means a computer based seismic model selected by
Beneficiary, currently the Insurance and Investment Risk Assessment System
("IRAS") program by Risk Management Solutions ("RMS").
As used herein, "Replacement Cost" means the estimated total cost, determined by
Beneficiary in its sole discretion, to construct all of the Improvements as if
the Property were completely unimproved (not including the cost of site work,
utilities and foundation).
As used herein, "Seismic Risk Estimate" refers to the results of a seismic risk
estimate for the Property produced by the Model. Grantor agrees that it will not
rely for its own evaluation purposes on the Seismic Risk Estimate produced by or
for Beneficiary.
As used herein, "Specified Loss Dollar Amount" means the "Specified Loss
Percentage" (as defined below) multiplied by the Replacement Cost.
As used herein, "Specified Loss Percentage" means an estimate produced by the
Model of the earthquake damage to the Property, expressed as a percentage of
Replacement Cost. Beneficiary's parameters for the Model are based on a 90%
probability that the level of damage predicted will not be exceeded in an
earthquake with an expected 475 year return period.
CROSS-DEFAULT CLAUSE. In the event there shall be a default under the Master
Lien Instrument, the Phase II Lien Instrument and/or the IDB Deed of Trust, such
default shall constitute a default under this instrument and Beneficiary, at its
option after such default becomes an Event of Default, may declare the
Indebtedness due and collectible at once, and may exercise or cause to be
exercised, all of its rights and remedies under this instrument, the Master Lien
Instrument, the Phase II Lien Instrument and/or the IDB Deed of Trust,
concurrently or separately and in such order as Beneficiary may determine.
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<PAGE> 12
In the event there shall be any Event of Default, Beneficiary may institute (i)
a joint proceeding with respect to this instrument, the Master Lien Instrument,
the Phase II Lien Instrument and the IDB Deed of Trust or (ii) separate
proceedings with respect to each lien instrument. Said separate proceedings may
be instituted simultaneously or in such order and at such times as Beneficiary
may elect and no such election shall waive any right of Beneficiary to
subsequently enforce any such lien instrument in the same or any other
proceedings. The pendency of any proceedings with respect to any lien instrument
shall not be grounds for the abatement or for hindering, delaying or preventing
any proceedings with respect to any other lien instrument. An Event of Default
under each lien instrument shall constitute a separate cause of action, and the
institution of proceedings upon one or two, but not all, shall not be construed
as a splitting or waiver of a cause by Beneficiary. Grantor, on behalf of itself
and any transferee of the Property, hereby waives any right which it may have to
require Beneficiary, and Beneficiary shall not be required, to marshall assets
or to proceed against security other than the Property prior to or
contemporaneously with proceeding against the Property.
LEASES. Grantor represents and warrants that there is no assignment or pledge of
any leases of, or rentals or income from, the Properties now in effect; and
covenants that, until the Indebtedness is fully paid, it (i) shall not make any
such assignment or pledge to anyone other than Beneficiary and (ii) shall not,
unless expressly permitted under another provision in this instrument, make any
assignment or pledge to anyone of its hereinafter described revocable license to
collect, use and enjoy the rents and profits.
In consideration of the Indebtedness, Grantor, pursuant to the Absolute
Assignment, has assigned to Beneficiary all of Grantor's right, title and
interest in said leases, including Grantor's right to collect, use and enjoy the
rents and profits therefrom. Beneficiary has, in the Absolute Assignment,
granted to Grantor a license to collect, use and enjoy said rents and profits.
Such license is revocable by Beneficiary pursuant to the terms of the Absolute
Assignment.
LEASEHOLD PROPERTY. With respect to the portion of the Property which is a
leasehold estate:
(a) The term "Security Lease" is defined as the lease under which
the leasehold portion of the Property described in Exhibit "A-
" exists, and "Demised Premises" is defined as the real estate
that is subject to said Security Lease.
(b) This instrument expressly includes the grant, bargain, sale,
and conveyance of the Grantor's leasehold interest in all
improvements on the Demised Premises and all additional title,
estate, interest or right which may at any time be acquired by
Grantor. It is expressly agreed that this instrument shall
constitute a lien upon the fee simple title or any other
interest acquired by Grantor in any of the Demised Premises.
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<PAGE> 13
(c) Grantor agrees to fully perform and comply with all
agreements, covenants and conditions imposed upon or assumed
by the lessee under the Security Lease, and upon failure to do
so, Beneficiary may (but shall not be obligated to) take any
action deemed necessary or desirable to prevent or to cure any
default. Upon receipt of any written notice of default under
the Security Lease from any person or corporation authorized
to enforce performance thereof, Beneficiary may rely thereon
and take any action deemed necessary to cure such default,
even though the existence of the default or the notice thereof
be questioned or denied by Grantor or any party on behalf of
Grantor. Beneficiary, in its sole discretion, may expend such
sums of money as it deems necessary for such purpose, and
Grantor hereby agrees to pay Beneficiary, immediately and
without demand, all such sums so expended with interest
thereon from the date of each such expenditure at the Default
Rate (as defined in the Note). All sums so expended by
Beneficiary and the interest thereon shall be added to the
Indebtedness and be secured by the lien of this instrument.
(d) Grantor hereby constitutes Beneficiary, or an agent or
employee designated by Beneficiary, as Grantor's Attorney in
Fact to take possession of the Demised Premises at any time to
collect the rents, issues and profits therefrom and to
sublease the same in the name of Grantor and to make
application of the net proceeds after payment of the
reasonable expenses of subleasing and collection, to payments
required by the Security Lease, repairs and replacements to
the Demised Premises and repayment of the Indebtedness, as
Beneficiary may see fit. This power of attorney shall be
irrevocable by Grantor until the Indebtedness is paid in full,
and the powers herein granted may be exercised at any time
that an Event of Default shall have occurred and is
continuing.
(e) Until the Indebtedness has been paid in full, Grantor will not
surrender any leasehold estate or other interest herein
encumbered, nor terminate the Security Lease. Grantor further
covenants and agrees that it will not, without the written
consent of Beneficiary, amend or alter the Security Lease. Any
termination, amendment or alteration of the Security Lease
without the prior written consent of Beneficiary shall be a
default under this instrument.
(f) No release or forbearance of any of the Grantor's obligations
under the Security Lease shall release Grantor from any of its
obligations under the Note or this instrument.
(g) Unless Beneficiary shall otherwise consent in writing, the fee
title to the Demised Premises and the leasehold estate in the
Demised Premises shall not merge but shall remain separate and
distinct, notwithstanding the union of said estates in the
lessor or the lessee or a third party, by purchase or
otherwise.
(h) Grantor warrants that there is no present default under the
terms and conditions of the Security Lease and there are no
claims or offsets, counterclaims or other matters that may
ripen into a default. If a default shall occur in the future,
Grantor covenants that written notice thereof shall be
promptly served on Beneficiary. A default by lessee under the
Security Lease shall constitute a default under this
instrument.
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<PAGE> 14
COSTS, FEES AND EXPENSES. Grantor agrees to pay all costs, fees and expenses of
this trust; to appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary or Trustee
hereunder; to pay all costs and expenses, including the cost of obtaining
evidence of title and reasonable attorney's fees, incurred in connection with
any such action or proceeding; and to pay any and all attorney's fees and
expenses of collection and enforcement in the event the Note is placed in the
hands of an attorney for collection, enforcement of any of the Loan Documents is
undertaken or suit is brought thereon.
FAILURE OF GRANTOR TO ACT. If Grantor shall fail to make any payment or do any
act as herein provided, Beneficiary or Trustee may, without obligation so to do,
without notice to or demand upon Grantor and without releasing Grantor from any
obligation hereof: (i) make or do the same in such manner and to such extent as
Beneficiary may deem necessary to protect the security hereof, Beneficiary or
Trustee being authorized to enter upon the Properties for such purpose; (ii)
appear in and defend any action or proceeding purporting to affect the security
hereof, or the rights or powers of Beneficiary or Trustee; (iii) pay, purchase,
contest or compromise any encumbrance, charge or lien which in the judgment of
Beneficiary is prior or superior hereto; and (iv) in exercising any such powers,
pay necessary expenses, employ counsel and pay its reasonable fees. Sums so
expended shall be payable by Grantor immediately upon demand with interest from
date of expenditure at the Default Rate (as defined in the Note). All sums so
expended by Beneficiary and the interest thereon until paid shall be included in
the Indebtedness and secured by the lien of this instrument.
EVENT OF DEFAULT. Any default by Grantor in making any required payment of the
Indebtedness or any default in any provision, covenant, agreement or warranty
contained in any of the Loan Documents shall, except as provided in the two
immediately succeeding paragraphs, constitute an "Event of Default".
NOTICE OF DEFAULT. A default in any payment required in the Note or any other
Loan Document (a "Monetary Default") shall not constitute an Event of Default
unless Beneficiary shall have given a written notice of such Monetary Default to
Grantor and Grantor shall not have cured such Monetary Default by payment of all
amounts in default (including payment of interest at the Default Rate, as
defined in the Note, from the date of default to the date of cure on amounts
owed to Beneficiary) within five (5) business days after the date on which
Beneficiary shall have given such notice to Grantor.
Any other default under the Note or under any other Loan Document (a
"Non-Monetary Default") shall not constitute an Event of Default unless
Beneficiary shall have given a written notice of such Non-Monetary Default to
Grantor and Grantor shall not have cured such Non-Monetary Default within thirty
(30) days after the date on which Beneficiary shall have given such notice of
default to Grantor (or, if the Non-Monetary Default is not curable within such
30-day period, Grantor shall not have (i) diligently undertaken and continued to
pursue the curing of such Non-Monetary Default and (ii) deposited an amount
sufficient to cure such Non-Monetary Default in an escrow account satisfactory
to Beneficiary).
For purposes of this provision, written notice may be delivered personally or
sent by certified mail or reputable courier service with charges prepaid, by
telecopier or by such other method whereby the receipt thereof may be confirmed.
Notice shall be deemed given on the date received. Any notice which is rejected,
the acceptance of which is refused or which is incapable of being delivered for
any reason shall be deemed received as of the date of attempted delivery.
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<PAGE> 15
In no event shall the notice and cure period provisions recited above constitute
a grace period for the purposes of commencing interest at the Default Rate (as
defined in the Note).
SUBSTITUTION OF TRUSTEE. Beneficiary and its successors and assigns may for any
reason and at any time appoint a new or substitute Trustee by written
appointment delivered to such new or substitute Trustee without notice to
Grantor, without notice to, or the resignation or withdrawal by, the existing
Trustee and without recordation of such written appointment unless notice or
recordation is required by the laws of the jurisdiction in which the Properties
are located. Upon delivery of such appointment, the new or substitute Trustee
shall be vested with the same title and with the same powers and duties granted
to the original Trustee.
APPOINTMENT OF RECEIVER. Upon commencement of any proceeding to enforce any
right under this instrument, including foreclosure thereof, Beneficiary (without
limitation or restriction by any present or future law, without regard to the
solvency or insolvency at that time of any party liable for the payment of the
Indebtedness, without regard to the then value of any Property, whether or not
there exists a threat of imminent harm, waste or loss to any Property and
whether or not the same shall then be occupied by the owner of the equity of
redemption as a homestead) shall have the absolute right to the appointment of a
receiver of the Properties and of the revenues, rents, profits and other income
therefrom, and said receiver shall have (in addition to such other powers as the
court making such appointment may confer) full power to collect all such income
and, after paying all necessary expenses of such receivership and of operation,
maintenance and repair of said Properties, to apply the balance to the payment
of any of the Indebtedness then due.
FORECLOSURE. Upon the occurrence of an Event of Default, the entire unpaid
Indebtedness shall, at the option of Beneficiary, become immediately due and
payable for all purposes without any notice or demand, except as required by law
(ALL OTHER NOTICE OF THE EXERCISE OF SUCH OPTION BEING HEREBY EXPRESSLY WAIVED),
and Beneficiary may, in addition to exercising any rights it may have with
respect to the Personal Property under the Uniform Commercial Code of the
jurisdiction in which the Properties are located, institute proceedings in any
court of competent jurisdiction to foreclose this instrument as a mortgage, or
to enforce any of the covenants hereof, or Trustee or Beneficiary may, either
personally or by agent or attorney in fact, enter upon and take possession of
the Properties and may manage, rent or lease the Properties or any portion
thereof upon such terms as Beneficiary may deem expedient, and collect, receive
and receipt for all rentals and other income therefrom and apply the sums so
received as hereinafter provided in case of sale. Trustee is hereby further
authorized and empowered, either after or without such entry, to sell and
dispose of the Properties en masse or in separate parcels (as Trustee may think
best), and all the right, title and interest of Grantor, by advertisement or in
any manner provided by the laws of the jurisdiction in which the Property is
located, (GRANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A HEARING PRIOR TO SUCH
SALE), and to issue, execute and deliver a deed of conveyance, all as then may
be provided by law; and Trustee shall, out of the proceeds or avails of such
sale, after first paying and retaining all fees, charges, costs of advertising
any Property and of making said sale, and attorney's fees as herein provided,
pay to Beneficiary or the legal holder of the Indebtedness the amount thereof,
including all sums advanced or expended by Beneficiary or the legal holder of
the Indebtedness, with interest from date of advance or expenditure at the
Default Rate (as defined in the Note), rendering the excess, if any, as provided
by law; such sale or sales and said deed or deeds so made shall be a perpetual
bar, both in law and equity, against Grantor and the heirs, successors and
assigns of Grantor, and all other persons claiming the Properties aforesaid, or
any part thereof by, from, through or under Grantor.
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<PAGE> 16
The legal holder of the Indebtedness may purchase the Properties or any part
thereof, and it shall not be obligatory upon the purchasers at any such sale to
see to the application of the purchase money.
In addition to the above remedies, it is agreed that upon the occurrence of an
Event of Default, Beneficiary may, at its option, without demand or notice,
request the Trustee, and the Trustee shall be, and is hereby authorized and
empowered to proceed with foreclosure and sale of any Property by advertisement
or in any manner provided by the laws of the state in which the Property is
located in satisfaction of the item in default as if under a full foreclosure,
but without declaring the unmatured portion of the Indebtedness due; such sale
shall be made subject to the unmatured portion of the Indebtedness and it is
agreed that such sale shall not in any manner affect the unmatured portion of
the Indebtedness, but as to such unmatured portion, this instrument shall remain
in full force and effect just as though no sale had been made under the
provisions of this paragraph and it is further agreed that several sales may be
made without exhausting the right of sale for any unmatured portion of the
Indebtedness or for any future breach of the covenants, conditions or
stipulations set out herein.
APPRAISEMENT, STAY AND REDEMPTION LAWS. To the extent permitted by applicable
law, Grantor expressly waives and relinquishes the benefit of all laws now
existing or that may hereafter be enacted providing for any appraisement before
sale of any of the Properties, commonly known as Appraisement Laws, and also the
benefit of all laws that may hereafter be enacted in any way extending the time
for the enforcement or the collection of the Indebtedness, or creating or
extending a period for redemption from any sale made to collect the
Indebtedness, commonly known as Stay Laws and Redemption Laws.
DUE ON SALE. The present ownership and management of the Properties is a
material consideration to Beneficiary in making the loan secured by this
instrument, and Grantor shall not (i) convey title to all or any part of the
Property, (ii) or enter into any contract to convey (land contract/installment
sales contract/contract for deed) title to all or any part of the Properties
(other than office leases located on the Property), which gives a purchaser
possession of, or income from, the Property prior to a transfer of title to all
or any part of the Property ("Contract to Convey") except as provided in the
provisions entitled "PARTIAL RELEASES" and "PROPERTY SUBSTITUTION" set forth
herein. Any violation of this provision shall constitute a default under the
terms of this instrument.
Notwithstanding the foregoing, a default will not occur if Grantor mergers with,
or is consolidated with, another entity provided the successor to Grantor shall
have entered into and agreed to be bound by all of Grantor's obligations under
the Loan Documents and the Environmental Indemnity Agreement of even date
herewith.
FINANCIAL STATEMENTS. Grantor agrees to furnish to Beneficiary, at Grantor's
expense and within ninety (90) days after the close of each fiscal year
("Financial Statements Due Date"), annual audited financial statements on the
Grantor in form and substance currently required to be filed on Form 10-K for
annual reports pursuant to section 13 or 15(d) of the Securities Exchange Act of
1934 for which no other form is prescribed (the "Company Statements"). The
Company Statements shall be prepared in accordance with generally accepted
accounting principles and shall be audited by an independent certified public
accountant acceptable to Beneficiary (Beneficiary hereby approves the firms
commonly known as "Big Six").
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<PAGE> 17
In addition to the Company Statements, Grantor agrees to furnish to Beneficiary
annual financial statements on each Property in the form attached to the Phase I
Loan Commitment for each Park and all Parks in the aggregate including
(a) a statement of operations with a detailed line item breakdown
of all operating expenses, capitalized costs associated with
tenant improvements, lease commissions and capital
improvements.
Grantor agrees to furnish to Beneficiary for (i) each Building, (ii) each Park
and (iii) all Parks in the aggregate
(b) a current rent roll in the form attached to the Phase I Loan
Commitment (the "Rent Roll);
(c) if requested by Beneficiary, a report detailing cost
reimbursements to tenants, options and other major variations
from standard form leases (collectively referred to herein as
the "Property Statements").
The Property Statements shall be certified as to the accuracy and completeness
of the applicable information and be signed by either a Chief Executive Officer,
Chief Financial Officer or Chief Accounting Officer of Grantor (the
"Certification").
In addition, Grantor shall furnish to Beneficiary 10K and 10Q reports at the
time they are submitted to the Securities and Exchange Commission. At the time
the 10K and 10Q reports are submitted to Beneficiary, Grantor shall also forward
its computation of the calculations required under the "Financial Covenants"
along with a Certification verifying compliance with such covenants. Grantor
acknowledges that Beneficiary requires the Company Statements and Property
Statements (collectively, the "Financials"), Rent Roll and Certification in
order to record accurately the value of the Property for financial and
regulatory reporting.
If Grantor does not furnish, or cause to be furnished, the Financials, Rent Roll
and Certification to Beneficiary by the Financial Statements Due Date, within 30
days after Beneficiary shall have given written notice to Grantor that the
Financials, Rent Roll and/or Certification have not been received as required,
(x) interest on the unpaid principal balance of the Indebtedness shall
as of the Financial Statements Due Date, accrue and become payable at a
rate equal to the sum of the Interest Rate (as defined in the Note)
plus one percent (1%) per annum (the "Increased Rate"); and
(y) Beneficiary may elect to obtain an independent appraisal and audit
of the Property at Grantor's expense, and Grantor agrees that it will,
upon request, promptly make Grantor's books and records regarding the
Property available to Beneficiary and the person(s) performing the
appraisal and audit (which obligation Grantor agrees can be
specifically enforced by Beneficiary).
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<PAGE> 18
The amount of the payments due under the Note during the time in which the
Increased Rate shall be in effect shall be changed to an amount which is
sufficient to amortize the then unpaid principal balance at the Increased Rate
during the then remaining portion of a period of 25 years commencing with the
Amortization Period Commencement Date (as defined in the Note). Interest shall
continue to accrue and be due and payable monthly at the Increased Rate until
the Financials, Rent Roll and Certification shall be furnished to Beneficiary as
required. Commencing on the date on which the Financials, Rent Roll and
Certification are received by Beneficiary, interest on the unpaid principal
balance shall again accrue at the Interest Rate and the payments due during the
remainder of the term of the Note shall be changed to an amount which is
sufficient to amortize the then unpaid principal balance at the Interest Rate
during the then remaining portion of a period of 25 years commencing with the
Amortization Period Commencement Date. Notwithstanding the foregoing,
Beneficiary shall have the right to conduct an independent audit at its own
expense at any time.
Notwithstanding the above, the Financial Statements Due Date may be extended up
to sixty (60) days if Grantor receives an extension from the Securities and
Exchange Commission for filing of its annual report of Form 10K.
PROPERTY SUBSTITUTION. Provided there is then no default under any Loan Document
and upon prior written request from Grantor, Beneficiary shall not withhold its
consent to the addition of a property and concurrent release of a property for
which it is substituted ("Substitution") provided:
(i) the property to be released and the property to be substituted are
whole office Parks and, in the case where a portion of such Park is
also encumbered by the Phase I Loan Documents, such portion is
concurrently being released from the Phase I Loan Documents pursuant to
the terms thereof;
(ii) the substituted Park is of equal or higher Valuation than the Park
being released;
(iii) the substituted Park is at least 90% leased with net rents equal
to or greater than the net rents of the Park being withdrawn;
(iv) Grantor has the same ownership interest in the substituted Park as
in the Park to be released;
(v) the substituted Park satisfies all of the conditions of the Phase
II Loan Commitment which would have been satisfied if the Park was part
of the original property;
(vi) the Substitutions will be limited to not more than one Park per
calendar year, and not more than three Parks prior to the Maturity Date
of the Tranche D Promissory Note;
(vii) the request for the Substitution is made prior to the last two
(2) years of the term of (i) the Tranche C Promissory Note in the case
of a Pool C Park and (ii) the Tranche D Promissory Note in the case of
a Pool D Park.
If Grantor shall make a Substitution, Beneficiary shall be paid a fee equal to
(i) .50% of the Valuation of the Park being released if the Park being withdrawn
is located in El Paso, Texas, Orlando, Florida or San Antonio, Texas, or (ii)
.75% of the Valuation of the Park being released for any other Park being
withdrawn. At the time of the Substitution, no modification of the interest rate
or repayment terms of the Note will be required.
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<PAGE> 19
RIGHT OF FIRST OFFER INVOLVING OTHER PROPERTY. Beneficiary shall have the right
of first offer involving the properties described in Exhibit "C" (the "Vacant
Land") attached hereto and incorporated herein by this reference (provided,
however, this provision shall not apply to Vacant Land located in a Park that
has been substituted or released from the lien hereof) for (i) the purchase of
any Vacant Land prior to Grantor selling such Vacant Land, and (ii) for mortgage
loan financing for any future mortgage loan prior to Grantor obtaining
construction or permanent financing of improvements erected or to be erected on
any Vacant Land.
Grantor shall submit to Beneficiary written notice of its intent to seek to sell
or obtain mortgage financing together with sufficient documentation (if for sale
of vacant land: any proposed sales package, plat or survey, number of acres,
current zoning, availability of utilities and latest real estate tax notice; if
for such financing to cover development, the aforementioned items plus:
development specifications, construction budget and stabilized pro-forma) to
permit evaluation and underwriting. Beneficiary shall have thirty (30) days from
the date such notice and documentation is delivered within which to respond
thereto (the "Offer Period").
In the event that (a) Beneficiary does not respond or otherwise declines to
exercise this right of first offer within the Offer Period, or (b) Grantor
declines Beneficiary's proposal for such sale or mortgage financing, as the case
may be, Grantor shall be free for a period of twelve (12) months from the
expiration of the Offer Period to enter into any contract or contracts for the
sale or mortgage financing of such parcel of Vacant Land as it shall determine
in its sole discretion.
Beneficiary's refusal to offer to purchase or provide mortgage financing shall
not be deemed to be a waiver by Beneficiary of its right of first refusal to
purchase or provide mortgage financing for other portions of the Vacant Land or
to purchase or provide mortgage financing for the Vacant Land if Grantor is
unsuccessful in procuring from another source that sale or such financing which
was previously offered to Beneficiary in accordance with the above procedure.
PARTIAL RELEASES. Upon written request from Grantor, Beneficiary will release
from the lien of this instrument either the specific Parks located in Pool A and
Pool C designated by Grantor in the case of the Tranche A Promissory Note and
the Tranche C Promissory Note or the specific Parks located in Pool B and Pool D
designated by Grantor in the case of the Tranche B Promissory Note and the
Tranche D Promissory Note, provided there is then no default in any of the Loan
Documents and subject to satisfaction of the following conditions:
1) Grantor has prepaid fifty percent (50%) of the principal of
the Tranche A Promissory Note and the Tranche C Promissory
Note or the Tranche B Promissory Note and the Tranche D
Promissory Note as permitted pursuant to the First Partial
Prepayment (as defined in the Phase I Note) and/or the Second
Partial Prepayment (as defined in the Phase I Note) and/or the
First Partial Note C Prepayment or the first Partial Note D
Prepayment (as defined in the Phase II Note) and/or the Second
Partial Note C Prepayment or the Second Partial Note D
Prepayment (as defined in the Phase II Note);
2) No other Property (other than in connection with a
Substitution hereunder) in such Pool has been released;
3) Remaining portions of the Properties in both Pools have a debt
service coverage of not less than 1.4 for the Indebtedness;
and
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<PAGE> 20
4) The Valuation of the Parks being released does not exceed
33-1/3% of the amount of the Valuation of all Parks in the
respective Pool.
FULL RELEASE. Upon payment in full of the Tranche A Promissory Note and the
Tranche C Promissory Note (including the applicable prepayment fee described
therein), the Pool A Parks and the Pool C Parks will be released from the lien
hereof and, upon payment in full of the Tranche B Promissory Note and the
Tranche D Promissory Note (including the applicable prepayment fee described
therein), the Pool B Parks and the Pool D Parks will be released from the lien
hereof.
DEPOSITS BY GRANTOR. To assure the timely payment of real estate taxes and
special assessments, Beneficiary shall have the option upon the occurrence of an
Event of Default to require Grantor to deposit funds with Beneficiary, in
monthly or other periodic installments in amounts estimated by Beneficiary from
time to time sufficient to pay real estate taxes and special assessments as they
become due. If at any time the funds so held by Beneficiary, or in such other
account, shall be insufficient to pay any of said expenses, Grantor shall, upon
receipt of notice thereof, immediately deposit such additional funds as may be
necessary to remove the deficiency. All funds so deposited shall be irrevocably
appropriated to Beneficiary to be applied to the payment of such real estate
taxes and special assessments and, at the option of Beneficiary after an Event
of Default, the Indebtedness then due, by acceleration or otherwise.
Notwithstanding the above, upon the occurrence of an Event of Default,
Beneficiary shall, so long as no delinquency would occur, cooperate with Grantor
to attain payment discounts available to Grantor and permit Grantor to contest
the amount of such taxes.
MODIFICATION OF TERMS. Without affecting the liability of Grantor or any other
person (except any person expressly released in writing) for payment of the
Indebtedness or for performance of any obligation contained herein and without
affecting the rights of Beneficiary with respect to any security not expressly
released in writing, Beneficiary may, at any time and from time to time, either
before or after the maturity of the Note, without notice or consent: (i) release
any person liable for payment of all or any part of the Indebtedness or for
performance of any obligation; (ii) make any agreement extending the time or
otherwise altering the terms of payment of all or any part of the Indebtedness,
or modifying or waiving any obligation, or subordinating, modifying or otherwise
dealing with the lien or charge hereof; (iii) exercise or refrain from
exercising or waive any right Beneficiary may have; (iv) accept additional
security of any kind; (v) release or otherwise deal with any property, real or
personal, securing the Indebtedness, including all or any part of the
Properties.
EXERCISE OF OPTIONS. Whenever, by the terms of this instrument, of the Note or
any of the other Loan Documents, Beneficiary is given any option, such option
may be exercised when the right accrues, or at any time thereafter, and no
acceptance by Beneficiary of payment of Indebtedness in default shall constitute
a waiver of any default then existing and continuing or thereafter occurring.
NATURE AND SUCCESSION OF AGREEMENTS. Each of the provisions, covenants and
agreements contained herein shall inure to the benefit of, and be binding on,
the heirs, executors, administrators, successors, grantees, lessees and assigns
of the parties hereto, respectively, and the term "Beneficiary" shall include
the owner and holder of the Note.
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<PAGE> 21
LEGAL ENFORCEABILITY. No provision of this instrument, the Note or any other
Loan Documents shall require the payment of interest or other obligation in
excess of the maximum permitted by law. If any such excess payment is provided
for in any Loan Documents or shall be adjudicated to be so provided, the
provisions of this paragraph shall govern and Grantor shall not be obligated to
pay the amount of such interest or other obligation to the extent that it is in
excess of the amount permitted by law.
LIMITATION OF LIABILITY. Notwithstanding any provision contained herein to
the contrary, the personal liability of Grantor shall be limited as provided in
the Note.
CAPTIONS. The captions contained herein are for convenience and reference
only and in no way define, limit or describe the scope or intent of, or in any
way affect this instrument.
MISCELLANEOUS. Time is of the essence in each of the Loan Documents. The
remedies of Beneficiary as provided herein or in any other Loan Document or at
law or in equity shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of Beneficiary, and may be
exercised as often as occasion therefor shall occur; and neither the failure to
exercise any such right or remedy nor any acceptance by Beneficiary of payment
of Indebtedness in default shall in any event be construed as a waiver or
release of any right or remedy. Neither this instrument nor any other Loan
Document may be modified or terminated orally but only by agreement or discharge
in writing and signed by Grantor and Beneficiary. If any of the provisions of
any Loan Document or the application thereof to any persons or circumstances
shall to any extent be invalid or unenforceable, the remainder of such Loan
Document and each of the other Loan Documents, and the application of such
provision or provisions to persons or circumstances other than those as to whom
or which it is held invalid or unenforceable, shall not be affected thereby, and
every provision of each of the Loan Documents shall be valid and enforceable to
the fullest extent permitted by law.
WAIVER OF JURY TRIAL. Grantor hereby waives any right to trial by jury with
respect to any action or proceeding (a) brought by Grantor, Beneficiary or any
other person relating to (i) the obligations secured hereby and/or any
understandings or prior dealings between the parties hereto or (ii) the Loan
Documents or the Environmental Indemnity Agreement, or (b) to which Beneficiary
is a party.
GOVERNING LAW. The accrual of interest on the indebtedness evidenced by the Note
and on all other amounts due under any of the Loan Documents, including without
limitation interest at the Interest Rate (as defined in the Note) and interest
at the Default Rate (as defined in the Note) payable hereunder, shall be
governed and construed, for purposes of determining compliance with any law
governing the maximum rate of interest that can be charged on the indebtedness
evidenced by the Note and on all other amounts due under any of the Loan
Documents, by the laws of the State of Wisconsin. For all other purposes, this
instrument, the interpretation hereof and the rights, obligations, duties and
liabilities hereunder shall be governed and controlled by the laws of the State
of Tennessee.
INCORPORATION BY REFERENCE. The state riders to this Master Lien Instrument
attached hereto as Exhibits "B-1" through "B-3" are an integral part hereof and
are incorporated herein by this reference.
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<PAGE> 22
IN WITNESS WHEREOF, this instrument has been executed by the Grantor as of the
day and year first above written.
KOGER EQUITY, INC., a Florida
corporation
Signed in presence of: By: /s/ G. DANNY EDWARDS
------------------------------
Name: /s/ G.DANNY EDWARDS
----------------------------
Title: TREASURER
----------------------------
/s/ LYNDA R. AYCOCK 8880 Freedom Crossing Trail
- ----------------------- Jacksonville, FL 32256
/s/ LYNDA R. AYCOCK
- -----------------------
Name Typed or Printed
Attest: /s/ W. LAWRENCE JENKINS
--------------------------
Name: /s/ W. LAWRENCE JENKINS
--------------------------
/s/ H. F. McCART, JR. Title: CORPORATE SECRETARY
- ----------------------- --------------------------
/s/ H. F. McCART, JR. 8880 Freedom Crossing Trail
- ----------------------- Jacksonville, FL 32256
Name Typed or Printed
(corporate seal)
22
<PAGE> 23
STATE OF )
) ss.
COUNTY OF )
BEFORE ME, the undersigned authority, on this day personally appeared
W. LAWRENCE JENKINS AND G. DANNY EDWARDS, known to me to be the persons whose
names are subscribed to the foregoing instrument, and known to me to be the VICE
President and TREASURER, respectively, of KOGER EQUITY, INC., a Florida
corporation, and acknowledged to me that they executed said instrument for the
purposes and considerations therein expressed, and as the act of said
corporation.
GIVEN under my hand and official seal, this 2nd day of September 1999 .
/s/ CARRIE HEMMING
----------------------------
Notary Public
My commission expires:
NOTARY PUBLIC, CAMDEN COUNTY, GA
MY COMMISSION EXPIRES DEC. 28, 2002
23
<PAGE> 1
EXHIBIT 10(J)(10)
LOAN NO. C-332344 Tennessee
RECORDING REQUESTED BY
- ------------------------------
"Maximum principal indebtedness for
WHEN RECORDED MAIL TO Tennessee recording tax purposes is
$ .00."
----------------
The Northwestern Mutual Life Ins. Co.
720 East Wisconsin Ave. - Rm. N16WC
Milwaukee, WI 53202
Attn: Rosemary Poetzel
SPACE ABOVE THIS LINE FOR RECORDER'S USE
This instrument was prepared by Paul E. McElwee, Attorney, for The Northwestern
Mutual Life Insurance Company, 720 East Wisconsin Ave., Milwaukee, WI 53202.
IDB DEED OF TRUST AND SECURITY AGREEMENT
THIS FEE DEED OF TRUST and SECURITY AGREEMENT, Made as of the 2nd day of
September, 1999 between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MEMPHIS
AND COUNTY OF SHELBY, _________, herein (said Grantor/Trustor, whether one or
more in number) called "Grantor", KOGER EQUITY, INC., a Florida corporation ,
8880 Freedom Crossing Trail, Jacksonville, FL 32256, herein called "Koger", and
JOHN S. SHOAF, JR., 850 Ridge Lake Boulevard, Suite 205, Memphis, TN 38120,
herein called "Trustee", and THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a
Wisconsin corporation, 720 E. Wisconsin Avenue, Milwaukee, WI 53202, herein
called "Beneficiary":
WITNESSETH, That Grantor, in consideration of the indebtedness herein mentioned,
does hereby irrevocably bargain, sell, grant, transfer, assign and convey unto
Trustee, in trust, with power of sale and right of entry and possession, the
following property (herein referred to as the "Property"):
A. The land in the City of Memphis, County of Shelby, State of
Tennessee, described in Exhibit "A" attached hereto and
incorporated herein (the "Land") and all appurtenances
thereto; and
B. All buildings and improvements now existing or hereafter
erected thereon, all waters and water rights, all engines,
boilers, elevators, all heating apparatus, air-conditioning
and ventilating equipment, water and gas fixtures, and all
other fixtures of every description belonging to Grantor which
are or may be placed or used upon the Land or attached to the
buildings or improvements, all of which, to the extent
permitted by applicable law, shall be deemed an accession to
the freehold and a part of the realty as between the parties
hereto.
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<PAGE> 2
Except as expressly provided in the covenant hereof entitled "DUE ON SALE",
Grantor agrees not to sell, transfer, assign or remove anything described in B
above now or hereafter located on the Land without prior written consent from
Beneficiary unless (i) such action does not constitute a sale or removal of any
buildings or building improvements (except as provided in (y) below) or the sale
or transfer of waters or water rights and (x) in the case of personal property,
(a) such personal property is removed on a temporary basis for repairs in the
ordinary course of business; (b) such personal property is not reasonably
necessary or appropriate to the efficient use or operation of the Property; (c)
such personal property is consumed or worn out or has become obsolete and is
promptly replaced by Grantor with personal property of equal or greater value
and/or utility, unless replacement is not reasonably necessary or appropriate to
the efficient use of the Property; or (d) such personal property is actually
replaced by Grantor with similar personal property of equal or greater value
and/or utility, or (y) in the case of tenant improvements, the removal thereof
is in the ordinary course of leasing office space which is a part of the
Property.
Without limiting the foregoing grants, Grantor hereby pledges to Beneficiary,
and grants to Beneficiary a security interest in, all of Grantor's present and
hereafter acquired right, title and interest in and to the Property and any and
all
C. cash and other funds now or at any time hereafter deposited by
or for Grantor on account of tax, special assessment,
replacement or other reserves required to be maintained
pursuant to the Loan Documents (as hereinafter defined) with
Beneficiary or a third party, or otherwise deposited with, or
in the possession of, Beneficiary pursuant to the Loan
Documents; and
D. surveys, soils reports, environmental reports, guaranties,
warranties, architect's contracts, construction contracts,
drawings and specifications, applications, permits, surety
bonds and other contracts relating to the acquisition, design,
development, construction and operation of the Property; and
E. present and future rights to condemnation awards, insurance
proceeds or other proceeds at any time payable to or received
by Grantor on account of the Property or any of the foregoing
personal property.
All personal property hereinabove described is hereinafter referred to as the
"Personal Property".
SECURITY AGREEMENT CLAUSE
If any of the Property is of a nature that a security interest therein can be
perfected under the Uniform Commercial Code, this instrument shall constitute a
security agreement and financing statement if permitted by applicable law and
Grantor agrees to join with Beneficiary in the execution of any financing
statements and to execute any other instruments that may be required for the
perfection or renewal of such security interest under the Uniform Commercial
Code.
SECURING CLAUSE
TO HAVE AND TO HOLD the same unto Trustee for the purpose of securing:
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<PAGE> 3
(a) Payment to the order of Beneficiary of the indebtedness evidenced
by (i) the Tranche C Promissory Note of even date herewith executed by Grantor
for the principal sum of FOURTEEN MILLION SEVEN HUNDRED THOUSAND DOLLARS, with
final maturity no later than January 1, 2007 and with interest as therein
expressed and (ii) the Tranche D Promissory Note of even date herewith executed
by Grantor for the principal sum of THIRTY MILLION THREE HUNDRED THOUSAND
DOLLARS, with final maturity no later than January 1, 2009 and with interest as
therein expressed (the Tranche C Promissory Note and Tranche D Promissory Note,
as such instruments may be amended, restated, renewed and extended, are
hereinafter collectively referred to as the "Phase II Note"), it being
recognized that the funds may not have been fully advanced as of the date hereof
but may be advanced in the future in accordance with the terms of the Phase II
Loan Commitment (as hereinafter defined); and
(b) Payment to the order of Beneficiary of the indebtedness evidenced
by (i) the Tranche A Promissory Note dated as of December 16, 1996 executed by
Grantor for the principal sum of ONE HUNDRED MILLION FIVE HUNDRED THOUSAND
DOLLARS, with final maturity no later than January 1, 2007 and with interest as
therein expressed and (ii) the Tranche B Promissory Note dated as of December
16, 1996 executed by Grantor for the principal sum of EIGHTY-NINE MILLION FIVE
HUNDRED THOUSAND DOLLARS, with final maturity no later than January 1, 2009 and
with interest as therein expressed (the Tranche A Promissory Note and Tranche B
Promissory Note, as such instruments may be amended, restated, renewed and
extended, are hereinafter collectively referred to as the "Phase I Note"), and
secured by a lien on certain property described in that certain Master Lien
Instrument dated as of December 16, 1996, executed by Koger Equity, Inc., a
Florida corporation to a Trustee for the benefit of Beneficiary (the "Master
Lien Instrument"); and
(d) Payment of all sums that may become due Beneficiary under the
provisions of, and the performance of each agreement of Grantor contained in,
the Phase II Loan Documents, the Phase I Loan Documents and the IDB Loan
Documents.
As used herein, "Phase II Loan Documents" means this the Phase II Lien
Instrument, the Phase II Note, that certain Absolute Assignment of Leases and
Rents of even date herewith between Grantor and Beneficiary (the "Phase II
Absolute Assignment"), that certain Certification of Borrower of even date
herewith, to the extent not inconsistent with the other Phase II Loan Documents,
that certain Application dated February 26, 1999 and acceptance letter dated
April 5, 1999 executed by Beneficiary (together, the "Phase II Loan
Commitment"), and any other agreement entered into by Grantor and delivered to
Beneficiary in connection with the indebtedness evidenced by the Note, except
for any separate environmental indemnity agreement, as any of the foregoing may
be amended from time to time.
As used herein, "Phase I Loan Documents" means the Master Lien Instrument, the
Phase I Note, that certain Absolute Assignment of Leases and Rents dated as of
December 16, 1996 between Grantor and Beneficiary (the "Phase I Absolute
Assignment"), that certain Certification of Borrower dated as of December 16,
1996, to the extent not inconsistent with the other Phase I Loan Documents, that
certain Application dated July 29, 1996 and acceptance letter dated September
10, 1996 executed by Beneficiary (together, the "Phase I Loan Commitment"), and
any other agreement entered into by Grantor and delivered to Beneficiary in
connection with the indebtedness evidenced by the Phase I Note, except for any
separate environmental indemnity agreement, as any of the foregoing may be
amended from time to time.
3
<PAGE> 4
As used herein, "IDB Loan Documents" means this instrument, that certain
Leasehold Deed of Trust and Security Agreement of even date herewith between
Koger and Beneficiary (the "Leasehold Lien Instrument"), as any of the foregoing
may be amended from time to time.
No recourse of any kind or nature under or upon any obligation,
warranty, representation, covenant, or agreement contained in this instrument,
the Phase I Note and the Phase II Note secured hereby, or any other instrument
evidencing or securing the indebtedness secured by this instrument (the "Loan
Documents") or by the enforcement of any assessment or by any legal or equitable
proceeding by virtue of any constitution or statute or otherwise, or under any
circumstances, under or independent of the Loan Documents, shall be had against
the IDB or any incorporation, member, director, officer or counsel, as such,
past, present, or future, of the IDB, either directly or through the IDB, or
otherwise for the payment of any sum that may be due and unpaid to Beneficiary
under any Loan Document. Any and all personal liability of every nature, whether
at common law or in equity, or by statute, constitution, or otherwise, or the
IDB or any such incorporator, member, director, officer or counsel of the IDB,
as such, to respond by reason of any act or mission on his or her part, or
otherwise, for, directly or indirectly, the payment or performance under any
Loan Document, is hereby expressly waived and released as a condition of and in
consideration for the execution of the Loan Document by the IDB. Nothing
contained herein shall in any way diminish the remedies available to Grantee
with respect to the Property, including without limitation, foreclosure or power
of sale, receivership and obtaining the rents and other income from the Property
and Trustor shall be named in any such action only to the extent necessary for
Grantee to exercise such remedy.
The Borrower does hereby indemnify the IDB and each incorporator,
member, director, officer or counsel of the IDB, as such, past, present, or
future (the "Indemnified Parties") against and save all Indemnified Parties
harmless from any and all liabilities, penalties, fines, forfeitures, demands,
claims, causes of actions, suits, costs and expenses incidental thereto
(including costs of defense and settlement and reasonable attorneys' fees) which
the Indemnified Parties may suffer, incur or be responsible for or pay out as
the result of the IDB's execution of this document or any other loan document.
This indemnification shall be in addition to any not in derogation of any other
indemnifications contained in this Deed of Trust or any other agreement between
the IDB and the Borrower or any other party.
Notwithstanding and provision of this Deed of Trust to the contrary, it
is understood and agreed by all parties that this Deed of Trust shall be
subordinate to the right of the Trustor to receive payments in lieu of taxes to
and including the date of termination of the Real Property Lease Agreement dated
September 28, 1998 as a result of a sale of the Property pursuant to the
exercise of remedies by Grantee hereunder, or any other termination of the lease
which results in the Property being owned by an entity subject to taxation.
DEFINITIONS CLAUSE
"Park" means any one of the ten office parks described by the consolidation of
the individual legal descriptions on any one of the exhibits entitled Exhibits
"A-1" through "A-10" attached hereto.
"Building" means each of the buildings located on the Land described in Exhibits
"A-1" through "A-10" attached hereto.
"Pool" means either of the Pool A Parks, the Pool B Parks, the Pool C Parks or
the Pool D Parks.
4
<PAGE> 5
"Pool A Parks" mean the Parks in the City of Memphis, Shelby County, Tennessee;
in the City of San Antonio, Bexar County, Texas; in the City of St. Petersburg,
Pinellas County, Florida; and in the City of Tallahassee, Leon County, Florida.
"Pool B Parks" mean the Parks in the City of Austin, Travis County, Texas; in
the City of El Paso, El Paso County, Texas; in the City of Greenville,
Greenville County, South Carolina; in the City of Jacksonville, Duval County,
Florida; and in the City of Orlando, Orange County, Florida.
"Pool C Parks" mean the Parks in the City of Memphis, Shelby County, Tennessee;
and in the City of Tallahassee, Leon County, Florida.
"Pool D Parks" mean the Parks in the City of Greenville, Greenville County,
South Carolina; in the City of Jacksonville, Duval County, Florida; and in the
City of Orlando, Orange County, Florida.
"Valuation" means the amount mutually agreed to by Grantor and Beneficiary or,
if such parties do not so mutually agree, upon the following appraisal procedure
which shall be initiated by Grantor by giving written notice to Beneficiary
which shall include its designation of an appraiser (the "First Appraiser").
Within twenty (20) days after the service of the notice designating the First
Appraiser, Beneficiary shall give written notice to Grantor designating the
second appraiser (the "Second Appraiser"). If the Second Appraiser is not so
designated within the time above specified, the appointment of the Second
Appraiser shall be made in the same manner as is hereinafter provided for the
appointment of the third appraiser (the "Third Appraiser") in the event the
First and Second Appraisers are unable to agree upon the Third Appraiser. The
First and Second Appraisers so designated or appointed shall meet within ten
(10) days after the Second Appraiser is appointed, and if, within thirty (30)
days after the Second Appraiser is appointed, the First and Second Appraisers do
not agree upon the Valuation, they shall appoint a Third Appraiser who shall be
a competent and impartial person. In the event of their being unable to agree
upon such appointment within ten (10) days after the time aforesaid, the Third
Appraiser shall be selected by Beneficiary and Grantor if they can agree thereon
within a further period of fifteen (15) days. If the parties do not agree, or if
for any reason the three appraisers have not been chosen within fifteen (15)
days after the expiration of the fifteen (15) day period referred to in the
immediately preceding sentence, either the Beneficiary or Grantor, on behalf of
both, may request such appointment by the presiding Judge of the United States
District Court for the District in which the Property is located. In the event
of the failure, refusal or inability of any appraiser to act, a new appraiser
shall be appointed in his stead, which appointment shall be made in the same
manner as hereinbefore provided for the appointment of such appraiser so
failing, refusing or being unable to act. Grantor shall pay the fees and
expenses of all appraisers. Any appraiser designated to serve in accordance with
the provisions of this Agreement shall be qualified to appraise the type of
property being appraised in the County and State in which the Park in question
is located, shall be a member of the Appraisal Institute (or any successor
association or body of comparable standing if such Institute is not then in
existence) and shall have been actively engaged in the appraisal of real estate
in the County (set forth above) for a period of not less than ten (10) years
immediately preceding its appointment. The Appraisers shall determine the
Valuation, provided, however, no value shall be attributed to good will. The
Appraisers may employ such independent counsel and accountants, unaffiliated
with Beneficiary or Grantor as any two of the three appraisers shall determine
to be necessary or advisable to assist them in carrying out their duties
hereunder. The fees and expenses of such counsel and accountants shall be borne
by Grantor. A decision joined in by two of the three appraisers shall be the
decision of the appraisers. In the event no two appraisers can agree, the
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<PAGE> 6
decision of the Third Appraiser shall be conclusive. After reaching a decision,
the appraisers shall give written notice thereof to Beneficiary and Grantor.
A violation of any of the Financial Covenants provided for in Paragraph 8 of the
Phase II Loan Commitment will cause a default under the terms and conditions of
any of the Phase II Loan Documents.
NOTHING CONTAINED HEREIN IS INTENDED TO CONSTITUTE AN ALLOCATION OF SECURITY FOR
PURPOSES OF BENEFICIARY'S REMEDIES; AND GRANTOR AGREES THAT UNTIL THE RELEASE OF
SECURITY PURSUANT TO THE TERMS HEREOF, ALL OF THE PROPERTY SECURES THE TRANCHE A
PROMISSORY NOTE, THE TRANCHE B PROMISSORY NOTE, THE TRANCHE C PROMISSORY NOTE
AND THE TRANCHE D PROMISSORY NOTE.
TO PROTECT THE SECURITY OF THIS DEED OF TRUST, GRANTOR REPRESENTS, COVENANTS AND
AGREES AS SET FORTH BELOW:
PAYMENT OF DEBT. Grantor agrees to pay the indebtedness hereby secured (the
"Indebtedness") promptly and in full compliance with the terms of the Loan
Documents.
OWNERSHIP. Grantor represents that it owns the Properties and has good and
lawful right to convey the same and that the Properties are free and clear from
any and all encumbrances whatsoever, except as appears in the title evidence
accepted by Beneficiary. Grantor does hereby forever warrant and shall forever
defend the title and possession thereof against the lawful claims of any and all
persons whomsoever.
MAINTENANCE OF PROPERTY AND COMPLIANCE WITH LAWS. Grantor agrees to keep the
buildings and other improvements now or hereafter erected on the Land in good
condition and repair; not to commit or suffer any waste; to comply with all
laws, rules and regulations affecting the Properties with which the failure to
comply would have a material adverse effect on any Building; and to permit
Beneficiary to enter at all reasonable times and upon 24 hours prior notice for
the purpose of inspection and of conducting, in a reasonable and proper manner,
such tests to be conducted at Beneficiary's expense, except as otherwise
provided for in any separate environmental indemnity agreement as Beneficiary
determines to be necessary in order to monitor Grantor's compliance with
applicable laws and regulations regarding hazardous materials affecting the
Properties.
Notwithstanding the foregoing, the Grantor is not required to restore or repair
buildings or improvements to the extent insurance proceeds or condemnation
awards are not made available by the Beneficiary to the Grantor for such purpose
but are instead used by Beneficiary to repay a portion of the balance of the
Note. If Grantor is not required to restore or repair the damaged or taken
property in accordance with the immediately preceding sentence, it shall (i) for
any partially destroyed or taken building or improvements secure and enclose the
remaining portion of the building or improvements so as to make such remaining
portions of such building or improvements reasonably usable to the extent
practical and (ii) for any building or improvements which are substantially or
totally destroyed demolish such remaining building or improvements and rough
grade and landscape the applicable portion of the Lane in accordance with the
requirements of applicable governmental authorities so that the remaining
portion of such destroyed building or improvements do not present a safety
hazard or detract from the overall scenic surroundings of the applicable Park.
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<PAGE> 7
INSURANCE. Koger agrees to keep the Properties insured for the protection of
Beneficiary and Beneficiary's wholly owned subsidiaries and agents in such
manner, in such amounts and in such companies as Beneficiary may from time to
time approve, and to keep the policies or certificates therefor, properly
endorsed, on deposit with Beneficiary, or at Beneficiary's option, to keep
certificates of insurance (Acord 27 for all property insurance and Acord 25-S
for all liability insurance) evidencing all insurance coverages required
hereunder on deposit with Beneficiary, which certificates shall provide at least
thirty (30) days notice of cancellation to Beneficiary and shall list
Beneficiary as the certificate holder; that insurance loss proceeds from all
property insurance policies placed by Koger (less expenses of collection) shall,
at Beneficiary's option, be applied on the Indebtedness, whether due or not, or
to the restoration of the Properties, or be released to Grantor, but such
application or release shall not cure or waive any default under any of the Loan
Documents. If Beneficiary elects to apply the insurance loss proceeds on the
Indebtedness, no prepayment privilege fee shall be due on the amount of proceeds
so applied.
Notwithstanding the immediately preceding paragraph, Beneficiary agrees that if
the insurance loss proceeds are less than $500,000 (increased by 3% per year
from the date hereof) for any one casualty, such proceeds will be released to
Koger for reasonable restoration of the Property (which, for purposes of this
covenant includes rebuilding or replacement such that the Valuation of
applicable Property is not diminished) and the other provisions of this covenant
shall not be applicable, provided, however, insurance loss proceeds under this
paragraph shall not be released to Koger if Beneficiary has previously released
insurance loss proceeds to Koger and the applicable Property has not been so
restored.
Notwithstanding the two immediately preceding paragraphs, Beneficiary agrees
that if there then exists no Event of Default under any Loan Document and if the
insurance loss proceeds are less than the unpaid principal balance of the Note
and if the casualty occurs prior to the last three years of the term of the
Note, then the insurance loss proceeds (less expenses of collection) shall be
applied to restoration of the Property to its condition prior to the casualty,
subject to satisfaction of the following conditions:
(a) There is no existing Event of Default at the time of casualty,
and if there shall occur any Event of Default after the date
of the casualty, Beneficiary shall have no further obligation
to release insurance loss proceeds hereunder.
(b) The casualty insurer has not denied liability for payment of
insurance loss proceeds as a result of any act, neglect, use
or occupancy of the Property by Grantor or any tenant of the
Property.
(c) Beneficiary shall be satisfied that that the amount necessary
to complete the restoration of the Property is available from
all insurance loss proceeds so held, together with
supplemental funds which Koger commits to make available to
such restoration and agrees to fund prior to the disbursement
of any insurance proceeds. Any remaining insurance loss
proceeds may, at the option of Beneficiary, be applied on the
Indebtedness, whether or not due, or be released to Koger.
(d) If required by Beneficiary, Beneficiary shall be furnished a
satisfactory report addressed to Beneficiary from an
environmental engineer or other qualified professional
satisfactory to Beneficiary to the effect that no adverse
environmental impact to the Property resulted from the
casualty.
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<PAGE> 8
(e) Beneficiary shall release casualty insurance proceeds as
restoration of the Property progresses provided that
Beneficiary is furnished satisfactory evidence of the costs of
restoration and if, at the time of such release, there shall
exist no Event of Default under the Loan Documents. If the
estimated cost of restoration exceeds $500,000 (increased by
3% per year from the date hereof), (i) the drawings and
specifications for the restoration shall be approved by
Beneficiary in writing prior to commencement of the
restoration, and (ii) Beneficiary shall receive an
administration fee equal to 1% of the cost of restoration.
(f) Prior to each release of funds, Koger shall obtain for the
benefit of Beneficiary an endorsement to Beneficiary's title
insurance policy insuring against any liens arising from the
restoration.
(g) Koger shall pay all costs and expenses incurred by
Beneficiary, including, but not limited to, outside legal
fees, title insurance costs, third-party disbursement fees,
third-party engineering reports and inspections deemed
necessary by Beneficiary.
(h) All applicable reciprocal easement and operating agreements,
if any, benefiting the Property shall remain in full force and
effect between the parties thereto on and after restoration of
the Property.
(i) Beneficiary shall be satisfied that the operating income from
the buildings not destroyed plus loss of rents insurance
proceeds will be sufficient to cover the annual debt service
under all indebtedness secured by the Property at least 1.3
times.
(j) All leases of more than 10,000 rentable square feet in effect
at the time of the casualty with tenants who have entered into
Beneficiary's form of Non-Disturbance and Attornment Agreement
or similar agreement shall remain in full force and each
tenant thereunder shall be obligated, or shall elect, to
continue the lease term at full rental (subject only to
abatement, if any, during any period in which the Property or
a portion thereof shall not be used and occupied by such
tenant as a result of the casualty).
If a casualty as described in the preceding paragraph damages more than one
Building and one or more of the damaged Buildings satisfies the conditions of
(a) through (j) above (each a "Qualifying Building") and one or more of the
damaged Buildings does not satisfy the conditions of (a) through (j) above (a
"Non-Qualifying Building"), insurance loss proceeds allocated by Beneficiary
shall be applied to restoration of each Qualifying Building, as provided in the
preceding paragraph. Such allocation of insurance proceeds by Beneficiary shall
be made in the same ratio that the aggregate net rentable square feet of each
Qualifying Building bears to the sum of the aggregate net rentable square feet
of each Qualifying Building plus the aggregate net rentable square feet of each
Non-Qualifying Building.
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<PAGE> 9
EARTHQUAKE. If the Property is damaged by an earthquake during the term of the
Indebtedness:
(A) Beneficiary may require a new "Seismic Risk Estimate"
(as defined below) to be performed at Grantor's expense, and
(B) Grantor shall perform repair and retrofit work,
satisfactory to Beneficiary, which results in (i) the complete
repair of the Property and (ii) the performance of a
subsequent Seismic Risk Estimate verifying that the Property
meets "Minimum Seismic Criteria" (as defined below). Such work
shall be commenced and completed as soon as possible and in
any event within one year of the earthquake.
Without limiting the Grantor's obligation to cause the Property to satisfy
Minimum Seismic Criteria, during any period of time in which the Property does
not satisfy Minimum Seismic Criteria, Grantor shall provide Beneficiary with
evidence of, and maintain, "Earthquake Insurance" (as defined below). In the
event Earthquake Insurance is not attainable, Grantor shall furnish Beneficiary
a clean letter of credit in an amount and form satisfactory to Beneficiary in
lieu of such Earthquake Insurance.
As used herein, "Earthquake Insurance" means a policy satisfactory to
Beneficiary with a deductible of no greater than 5% of the "Replacement Cost"
(as defined below) and in an amount calculated as follows: (i) the "Loan Amount"
(as defined below) plus (ii) the "Specified Loss Dollar Amount" (as defined
below) plus (iii) 5% of the Replacement Cost minus (iv) 90% of the "Market
Value" (as defined below).
As used herein, "Loan Amount" shall mean the total principal amount advanced
under the Note.
As used herein, "Loan Plus Specified Loss" means the sum of the Loan Amount and
the Specified Loss Dollar Amount.
As used herein, "Market Value" means the estimated fair market value of the
Property, determined by Beneficiary in its sole discretion, at the time a
Seismic Risk Estimate is performed.
As used herein, "Minimum Seismic Criteria" means that both the Specified Loss
Percentage for the Property is less than or equal to 30% and the Loan Plus
Specified Loss is less than or equal to 90% of the Market Value.
As used herein, "Model" means a computer based seismic model selected by
Beneficiary, currently the Insurance and Investment Risk Assessment System
("IRAS") program by Risk Management Solutions ("RMS").
As used herein, "Replacement Cost" means the estimated total cost, determined by
Beneficiary in its sole discretion, to construct all of the Improvements as if
the Property were completely unimproved (not including the cost of site work,
utilities and foundation).
As used herein, "Seismic Risk Estimate" refers to the results of a seismic risk
estimate for the Property produced by the Model. Grantor agrees that it will not
rely for its own evaluation purposes on the Seismic Risk Estimate produced by or
for Beneficiary.
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<PAGE> 10
As used herein, "Specified Loss Dollar Amount" means the "Specified Loss
Percentage" (as defined below) multiplied by the Replacement Cost.
As used herein, "Specified Loss Percentage" means an estimate produced by the
Model of the earthquake damage to the Property, expressed as a percentage of
Replacement Cost. Beneficiary's parameters for the Model are based on a 90%
probability that the level of damage predicted will not be exceeded in an
earthquake with an expected 475 year return period.
CONDEMNATION. Grantor hereby assigns to Beneficiary (i) any award and any other
proceeds resulting from damage to, or the taking of, all or any portion of any
Property in connection with condemnation proceedings or the exercise of any
power of eminent domain and (ii) the proceeds from any sale or transfer in lieu
thereof (less expenses of collection) which shall be applied to restoration of
the affected Property, subject to the provisions stated above for application of
insurance loss proceeds and subject to the further condition that restoration or
replacement of the improvements on the Land to their functional and economic
utility prior to such damage or taking be possible within the Park in which such
taking occurred. Any portion of such award and proceeds not applied to
restoration shall, at Beneficiary's option, be applied on the Indebtedness,
whether due or not, or be released to Grantor, but such application or release
shall not cure or waive any default under any of the Loan Documents.
If Beneficiary elects to apply the condemnation award and proceeds on the
Indebtedness, no Prepayment Fee shall be due on the amount of award or proceeds
so applied.
TAXES AND SPECIAL ASSESSMENTS. Grantor agrees to pay before delinquency all
taxes and special assessments of any kind that have been or may be levied or
assessed against the Properties, this instrument, the Note or the Indebtedness,
or upon the interest of Trustee or Beneficiary in the Properties, this
instrument, the Note or the Indebtedness, and to procure and deliver to
Beneficiary a copy of the official receipt of the proper officer showing timely
payment of all such taxes and assessments; provided, however, that Grantor shall
not be required to pay any such taxes or special assessments if the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate proceedings and funds sufficient to satisfy the contested amount
have been deposited in an escrow satisfactory to Beneficiary or paid to the
taxing authority.
PERSONAL PROPERTY. With respect to the Personal Property, Grantor hereby
represents, warrants and covenants as follows:
(a) Except for the security interest granted hereby, Grantor is,
and as to portions of the Personal Property to be acquired
after the date hereof will be, the sole owner of the Personal
Property, free from any lien, security interest, encumbrance
or adverse claim thereon of any kind whatsoever subject,
however, to the rights of any tenants under their leases.
Grantor shall notify Beneficiary of, and shall indemnify and
defend Beneficiary and the Personal Property against, all
claims and demands of all persons at any time claiming the
Personal Property or any part thereof or any interest therein.
(b) Except as otherwise provided above, Grantor shall not lease,
sell, convey or in any manner transfer the Personal Property
without the prior consent of Beneficiary.
(c) Grantor maintains a place of business at the address set forth
in the first paragraph of this instrument, and Grantor shall
immediately notify Beneficiary in writing of any change in its
place of business.
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<PAGE> 11
(d) At the request of Beneficiary, Grantor shall join Beneficiary
in executing one or more financing statements and
continuations and amendments thereof pursuant to the Uniform
Commercial Code of the jurisdiction in which the Property is
located in form satisfactory to Beneficiary, and Grantor shall
pay the cost of filing the same in all public offices wherever
filing is deemed by Beneficiary to be necessary or desirable.
OTHER LIENS. Grantor agrees to keep the Properties free from all other mortgage
liens and from all liens prior to the lien created hereby. The creation of any
other mortgage lien, whether or not prior to the lien created hereby, the
creation of any prior lien on or the assignment or pledge by Grantor of its
revocable license to collect, use and enjoy rents and profits from the
Properties shall constitute a default under the terms of this instrument. The
term "mortgage" includes a mortgage, deed of trust, deed to secure debt or any
other security interest in the Property.
EARTHQUAKE. If the Property is damaged by an earthquake during the term of the
Indebtedness:
(A) Beneficiary may require a new "Seismic Risk Estimate"
(as defined below) to be performed at Grantor's expense, and
(B) Grantor shall perform repair and retrofit work,
satisfactory to Beneficiary, which results in (i) the complete
repair of the Property and (ii) the performance of a
subsequent Seismic Risk Estimate verifying that the Property
meets "Minimum Seismic Criteria" (as defined below). Such work
shall be commenced and completed as soon as possible and in
any event within one year of the earthquake.
Without limiting the Grantor's obligation to cause the Property to satisfy
Minimum Seismic Criteria, during any period of time in which the Property does
not satisfy Minimum Seismic Criteria, Grantor shall provide Beneficiary with
evidence of, and maintain, "Earthquake Insurance" (as defined below). In the
event Earthquake Insurance is not attainable, Grantor shall furnish Beneficiary
a clean letter of credit in an amount and form satisfactory to Beneficiary in
lieu of such Earthquake Insurance.
As used herein, "Earthquake Insurance" means a policy satisfactory to
Beneficiary with a deductible of no greater than 5% of the "Replacement Cost"
(as defined below) and in an amount calculated as follows: (i) the "Loan Amount"
(as defined below) plus (ii) the "Specified Loss Dollar Amount" (as defined
below) plus (iii) 5% of the Replacement Cost minus (iv) 90% of the "Market
Value" (as defined below).
As used herein, "Loan Amount" shall mean the total principal amount advanced
under the Note.
As used herein, "Loan Plus Specified Loss" means the sum of the Loan Amount and
the Specified Loss Dollar Amount.
As used herein, "Market Value" means the estimated fair market value of the
Property, determined by Beneficiary in its sole discretion, at the time a
Seismic Risk Estimate is performed.
As used herein, "Minimum Seismic Criteria" means that both the Specified Loss
Percentage for the Property is less than or equal to 30% and the Loan Plus
Specified Loss is less than or equal to 90% of the Market Value.
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<PAGE> 12
As used herein, "Model" means a computer based seismic model selected by
Beneficiary, currently the Insurance and Investment Risk Assessment System
("IRAS") program by Risk Management Solutions ("RMS").
As used herein, "Replacement Cost" means the estimated total cost, determined by
Beneficiary in its sole discretion, to construct all of the Improvements as if
the Property were completely unimproved (not including the cost of site work,
utilities and foundation).
As used herein, "Seismic Risk Estimate" refers to the results of a seismic risk
estimate for the Property produced by the Model. Grantor agrees that it will not
rely for its own evaluation purposes on the Seismic Risk Estimate produced by or
for Beneficiary.
As used herein, "Specified Loss Dollar Amount" means the "Specified Loss
Percentage" (as defined below) multiplied by the Replacement Cost.
As used herein, "Specified Loss Percentage" means an estimate produced by the
Model of the earthquake damage to the Property, expressed as a percentage of
Replacement Cost. Beneficiary's parameters for the Model are based on a 90%
probability that the level of damage predicted will not be exceeded in an
earthquake with an expected 475 year return period.
GRANTOR COVENANTS. Grantor acknowledges that it has entered into that certain
Real Property Lease Agreement dated as of September 28, 1999 by and between
Grantor and Koger (the "Security Lease") whereby the Property has been leased to
Koger. Grantor agrees as follows:
(a) Grantor hereby consents to the loan evidenced by the Note.
(b) Grantor covenants that it shall fully perform its obligations
under the Security Lease.
(c) Grantor represents and warrants that the Security Lease is in
full force and effect and has not been amended, and there are
no defaults, claims or offsets thereunder nor any matters that
may ripen into a default, claim or offset.
(d) Grantor confirms that the Beneficiary shall be afforded all of
the benefits afforded to leasehold mortgagees as set forth in
the Security Lease, including but not limited to notices to
Beneficiary at the following address:
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Real Estate Investment Dept.
NML Loan No. C-332344
with a copy to:
Northwestern Investment Management Company
One Tampa City Center, Suite 2865
Tampa, FL 33602
Attention: Regional Director
NML Loan No. C-332344
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<PAGE> 13
(e) Grantor agrees to consent, in writing, to all future renewals,
modifications, and extensions of this instrument, if any,
agreed to between Koger and Beneficiary. If, for any reason,
Grantor fails to give its consent as required in the preceding
sentence, Grantor hereby absolutely and irrevocably waives any
consent or approval rights.
(f) Where applicable, approvals or consents under the Security
Lease shall not be unreasonably withheld, delayed or
conditioned by the Grantor.
(g) Grantor hereby agrees that Beneficiary shall have the right to
cure any default by the lessee thereunder within the
applicable time for cure by the lessee thereunder plus a
reasonable time thereafter.
(h) Grantor shall take no action to terminate the Security Lease
without first giving Beneficiary notice and a reasonable time
within which to complete foreclosure proceedings or otherwise
acquire the interest of the lessee thereunder.
(i) In the event of termination of the Security Lease prior to the
expiration of its term, Grantor shall, at Beneficiary's
request, enter into a new lease with Beneficiary for the
remainder of the term of the Security Lease at the rent and
with all the agreements, terms, covenants and conditions
thereof, including any applicable rights of renewal.
(j) No agreement modifying, canceling or surrendering the Security
Lease shall be effective without the prior written consent of
Beneficiary and any purported termination, amendment,
cancellation, surrender or merger without the prior written
consent of Beneficiary shall constitute a default hereunder.
(K) GRANTOR ACKNOWLEDGES THAT THE SECURITY LEASE CONTAINS A
PROVISION GIVING THE LESSEE THEREUNDER THE OPTION TO PURCHASE
THE FEE INTEREST IN THE PROPERTY FOR $1000.00. GRANTOR HEREBY
AGREES THAT SUCH OPTION SHALL BE EXERCISABLE BY BENEFICIARY IF
IT FORECLOSES ON KOGER'S LEASEHOLD INTEREST IN THE SECURITY
LEASE.
SUBJECTING THE FEE. Grantor is subjecting its fee simple estate in the Property,
and subordinating the Security Lease, to the lien of this instrument. Grantor
understands and agrees, after consultation with legal counsel, that this
structure results in the following:
(a) An Event of Default by Grantor hereunder or under the other
Loan Documents will entitle Beneficiary to exercise its foreclosure and other
rights and remedies against its lien on the fee interest in the Property held by
Grantor as well as against its lien on Koger's leasehold interest under the
Security Lease; and
(b) Even absent an Event of Default or the exercise of
Beneficiary's remedies, each and every term and provision of the Security Lease
is now, and shall continue to be, fully subordinate and subject to every term
and provision of this instrument, and in the case of conflict or inconsistent
terms in the Security Lease (including, without limitation, the terms relating
to condemnation, casualty, release of insurance loss proceeds, and limitations
on rights granted to leasehold mortgagees), the terms of this instrument shall
govern and prevail.
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<PAGE> 14
SURETYSHIP WAIVERS. This instrument is intended to constitute the primary
obligation of Grantor and Koger (each, an "Obligor"), with respect to the
obligations of each such Obligor hereunder, and neither Obligor is intended to
be a guarantor or surety or otherwise only secondarily liable with respect to
matters covered hereby. Without limiting or lessening the primary liability of
Obligors hereunder, Beneficiary may, without notice to Obligors,
(a) grant extensions of time or any other indulgences on the Note
and related obligations;
(b) take, give up, modify, vary, exchange, renew or abstain from
perfecting or taking advantage of any security for the Note
and related obligations; and
(c) accept or make compositions or other arrangements with Koger
or Grantor under the Loan Documents, realize on any security,
and otherwise deal with Obligors and other parties and
security as Beneficiary may deem expedient; and
each Obligor hereby waives any right to require Beneficiary:
(d) to proceed against the other Obligor or any other party or to
proceed against or apply any security it may hold for the Note
or otherwise, before proceeding against one or more of the
Obligors;
(e) to require Beneficiary to pursue any other remedy for the
benefit of either Obligor.
Beneficiary may, at its election, foreclose upon any security held by it in one
or more judicial or non-judicial sales without affecting or impairing the
liability of Obligors. Obligors waive any defense arising out of such an
election, notwithstanding that such election may operate to impair or extinguish
any right or remedy of such Obligor against the other Obligor or any other
security.
CROSS-DEFAULT CLAUSE. In the event there shall be a default under the Master
Lien Instrument, the Phase II Lien Instrument and/or the Leasehold Lien
Instrument, such default shall constitute a default under this instrument and
Beneficiary, at its option after such default becomes an Event of Default, may
declare the Indebtedness due and collectible at once, and may exercise or cause
to be exercised, all of its rights and remedies under this instrument, the
Master Lien Instrument, the Phase II Lien Instrument and/or the Leasehold Lien
Instrument, concurrently or separately and in such order as Beneficiary may
determine.
In the event there shall be any Event of Default, Beneficiary may institute (i)
a joint proceeding with respect to this instrument, the Master Lien Instrument,
the Phase II Lien Instrument and the Leasehold Lien Instrument or (ii) separate
proceedings with respect to each lien instrument. Said separate proceedings may
be instituted simultaneously or in such order and at such times as Beneficiary
may elect and no such election shall waive any right of Beneficiary to
subsequently enforce any such lien instrument in the same or any other
proceedings. The pendency of any proceedings with respect to any lien instrument
shall not be grounds for the abatement or for hindering, delaying or preventing
any proceedings with respect to any other lien instrument. An
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<PAGE> 15
Event of Default under each lien instrument shall constitute a separate cause of
action, and the institution of proceedings upon one or two, but not all, shall
not be construed as a splitting or waiver of a cause by Beneficiary. Grantor, on
behalf of itself and any transferee of the Property, hereby waives any right
which it may have to require Beneficiary, and Beneficiary shall not be required,
to marshall assets or to proceed against security other than the Property prior
to or contemporaneously with proceeding against the Property.
LEASES. Grantor represents and warrants that there is no assignment or pledge of
any leases of, or rentals or income from, the Properties now in effect; and
covenants that, until the Indebtedness is fully paid, it (i) shall not make any
such assignment or pledge to anyone other than Beneficiary and (ii) shall not,
unless expressly permitted under another provision in this instrument, make any
assignment or pledge to anyone of its hereinafter described revocable license to
collect, use and enjoy the rents and profits.
In consideration of the Indebtedness, Grantor, pursuant to the Absolute
Assignment, has assigned to Beneficiary all of Grantor's right, title and
interest in said leases, including Grantor's right to collect, use and enjoy the
rents and profits therefrom. Beneficiary has, in the Absolute Assignment,
granted to Grantor a license to collect, use and enjoy said rents and profits.
Such license is revocable by Beneficiary pursuant to the terms of the Absolute
Assignment.
COSTS, FEES AND EXPENSES. Grantor agrees to pay all costs, fees and expenses of
this trust; to appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary or Trustee
hereunder; to pay all costs and expenses, including the cost of obtaining
evidence of title and reasonable attorney's fees, incurred in connection with
any such action or proceeding; and to pay any and all attorney's fees and
expenses of collection and enforcement in the event the Note is placed in the
hands of an attorney for collection, enforcement of any of the Loan Documents is
undertaken or suit is brought thereon.
FAILURE OF GRANTOR TO ACT. If Grantor shall fail to make any payment or do any
act as herein provided, Beneficiary or Trustee may, without obligation so to do,
without notice to or demand upon Grantor and without releasing Grantor from any
obligation hereof: (i) make or do the same in such manner and to such extent as
Beneficiary may deem necessary to protect the security hereof, Beneficiary or
Trustee being authorized to enter upon the Properties for such purpose; (ii)
appear in and defend any action or proceeding purporting to affect the security
hereof, or the rights or powers of Beneficiary or Trustee; (iii) pay, purchase,
contest or compromise any encumbrance, charge or lien which in the judgment of
Beneficiary is prior or superior hereto; and (iv) in exercising any such powers,
pay necessary expenses, employ counsel and pay its reasonable fees. Sums so
expended shall be payable by Grantor immediately upon demand with interest from
date of expenditure at the Default Rate (as defined in the Note). All sums so
expended by Beneficiary and the interest thereon until paid shall be included in
the Indebtedness and secured by the lien of this instrument.
EVENT OF DEFAULT. Any default by Grantor in making any required payment of the
Indebtedness or any default in any provision, covenant, agreement or warranty
contained in any of the Loan Documents shall, except as provided in the two
immediately succeeding paragraphs, constitute an "Event of Default".
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<PAGE> 16
NOTICE OF DEFAULT. A default in any payment required in the Note or any other
Loan Document (a "Monetary Default") shall not constitute an Event of Default
unless Beneficiary shall have given a written notice of such Monetary Default to
Grantor and Grantor shall not have cured such Monetary Default by payment of all
amounts in default (including payment of interest at the Default Rate, as
defined in the Note, from the date of default to the date of cure on amounts
owed to Beneficiary) within five (5) business days after the date on which
Beneficiary shall have given such notice to Grantor.
Any other default under the Note or under any other Loan Document (a
"Non-Monetary Default") shall not constitute an Event of Default unless
Beneficiary shall have given a written notice of such Non-Monetary Default to
Grantor and Grantor shall not have cured such Non-Monetary Default within thirty
(30) days after the date on which Beneficiary shall have given such notice of
default to Grantor (or, if the Non-Monetary Default is not curable within such
30-day period, Grantor shall not have (i) diligently undertaken and continued to
pursue the curing of such Non-Monetary Default and (ii) deposited an amount
sufficient to cure such Non-Monetary Default in an escrow account satisfactory
to Beneficiary).
For purposes of this provision, written notice may be delivered personally or
sent by certified mail or reputable courier service with charges prepaid, by
telecopier or by such other method whereby the receipt thereof may be confirmed.
Notice shall be deemed given on the date received. Any notice which is rejected,
the acceptance of which is refused or which is incapable of being delivered for
any reason shall be deemed received as of the date of attempted delivery.
In no event shall the notice and cure period provisions recited above constitute
a grace period for the purposes of commencing interest at the Default Rate (as
defined in the Note).
SUBSTITUTION OF TRUSTEE. Beneficiary and its successors and assigns may for any
reason and at any time appoint a new or substitute Trustee by written
appointment delivered to such new or substitute Trustee without notice to
Grantor, without notice to, or the resignation or withdrawal by, the existing
Trustee and without recordation of such written appointment unless notice or
recordation is required by the laws of the jurisdiction in which the Properties
are located. Upon delivery of such appointment, the new or substitute Trustee
shall be vested with the same title and with the same powers and duties granted
to the original Trustee.
APPOINTMENT OF RECEIVER. Upon commencement of any proceeding to enforce any
right under this instrument, including foreclosure thereof, Beneficiary (without
limitation or restriction by any present or future law, without regard to the
solvency or insolvency at that time of any party liable for the payment of the
Indebtedness, without regard to the then value of any Property, whether or not
there exists a threat of imminent harm, waste or loss to any Property and
whether or not the same shall then be occupied by the owner of the equity of
redemption as a homestead) shall have the absolute right to the appointment of a
receiver of the Properties and of the revenues, rents, profits and other income
therefrom, and said receiver shall have (in addition to such other powers as the
court making such appointment may confer) full power to collect all such income
and, after paying all necessary expenses of such receivership and of operation,
maintenance and repair of said Properties, to apply the balance to the payment
of any of the Indebtedness then due.
FORECLOSURE. Upon the occurrence of an Event of Default, the entire unpaid
Indebtedness shall, at the option of Beneficiary, become immediately due and
payable for all purposes without any notice or demand, except as required by law
(ALL OTHER NOTICE OF THE EXERCISE OF SUCH
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<PAGE> 17
OPTION BEING HEREBY EXPRESSLY WAIVED), and Beneficiary may, in addition to
exercising any rights it may have with respect to the Personal Property under
the Uniform Commercial Code of the jurisdiction in which the Properties are
located, institute proceedings in any court of competent jurisdiction to
foreclose this instrument as a mortgage, or to enforce any of the covenants
hereof, or Trustee or Beneficiary may, either personally or by agent or attorney
in fact, enter upon and take possession of the Properties and may manage, rent
or lease the Properties or any portion thereof upon such terms as Beneficiary
may deem expedient, and collect, receive and receipt for all rentals and other
income therefrom and apply the sums so received as hereinafter provided in case
of sale. Trustee is hereby further authorized and empowered, either after or
without such entry, to sell and dispose of the Properties en masse or in
separate parcels (as Trustee may think best), and all the right, title and
interest of Grantor, by advertisement or in any manner provided by the laws of
the jurisdiction in which the Property is located, (GRANTOR HEREBY EXPRESSLY
WAIVES ANY RIGHT TO A HEARING PRIOR TO SUCH SALE), and to issue, execute and
deliver a deed of conveyance, all as then may be provided by law; and Trustee
shall, out of the proceeds or avails of such sale, after first paying and
retaining all fees, charges, costs of advertising any Property and of making
said sale, and attorney's fees as herein provided, pay to Beneficiary or the
legal holder of the Indebtedness the amount thereof, including all sums advanced
or expended by Beneficiary or the legal holder of the Indebtedness, with
interest from date of advance or expenditure at the Default Rate (as defined in
the Note), rendering the excess, if any, as provided by law; such sale or sales
and said deed or deeds so made shall be a perpetual bar, both in law and equity,
against Grantor and the heirs, successors and assigns of Grantor, and all other
persons claiming the Properties aforesaid, or any part thereof by, from, through
or under Grantor. The legal holder of the Indebtedness may purchase the
Properties or any part thereof, and it shall not be obligatory upon the
purchasers at any such sale to see to the application of the purchase money.
In addition to the above remedies, it is agreed that upon the occurrence of an
Event of Default, Beneficiary may, at its option, without demand or notice,
request the Trustee, and the Trustee shall be, and is hereby authorized and
empowered to proceed with foreclosure and sale of any Property by advertisement
or in any manner provided by the laws of the state in which the Property is
located in satisfaction of the item in default as if under a full foreclosure,
but without declaring the unmatured portion of the Indebtedness due; such sale
shall be made subject to the unmatured portion of the Indebtedness and it is
agreed that such sale shall not in any manner affect the unmatured portion of
the Indebtedness, but as to such unmatured portion, this instrument shall remain
in full force and effect just as though no sale had been made under the
provisions of this paragraph and it is further agreed that several sales may be
made without exhausting the right of sale for any unmatured portion of the
Indebtedness or for any future breach of the covenants, conditions or
stipulations set out herein.
APPRAISEMENT, STAY AND REDEMPTION LAWS. To the extent permitted by applicable
law, Grantor expressly waives and relinquishes the benefit of all laws now
existing or that may hereafter be enacted providing for any appraisement before
sale of any of the Properties, commonly known as Appraisement Laws, and also the
benefit of all laws that may hereafter be enacted in any way extending the time
for the enforcement or the collection of the Indebtedness, or creating or
extending a period for redemption from any sale made to collect the
Indebtedness, commonly known as Stay Laws and Redemption Laws.
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<PAGE> 18
DUE ON SALE. The present ownership and management of the Properties is a
material consideration to Beneficiary in making the loan secured by this
instrument, and Grantor shall not (i) convey title to all or any part of the
Property, (ii) or enter into any contract to convey (land contract/installment
sales contract/contract for deed) title to all or any part of the Properties
(other than office leases located on the Property), which gives a purchaser
possession of, or income from, the Property prior to a transfer of title to all
or any part of the Property ("Contract to Convey") except as provided in the
provisions entitled "PARTIAL RELEASES" and "PROPERTY SUBSTITUTION" set forth
herein. Any violation of this provision shall constitute a default under the
terms of this instrument.
Notwithstanding the foregoing, a default will not occur if Grantor mergers with,
or is consolidated with, another entity provided the successor to Grantor shall
have entered into and agreed to be bound by all of Grantor's obligations under
the Loan Documents and the Environmental Indemnity Agreement of even date
herewith.
FINANCIAL STATEMENTS. Grantor agrees to furnish to Beneficiary, at Grantor's
expense and within ninety (90) days after the close of each fiscal year
("Financial Statements Due Date"), annual audited financial statements on the
Grantor in form and substance currently required to be filed on Form 10-K for
annual reports pursuant to section 13 or 15(d) of the Securities Exchange Act of
1934 for which no other form is prescribed (the "Company Statements"). The
Company Statements shall be prepared in accordance with generally accepted
accounting principles and shall be audited by an independent certified public
accountant acceptable to Beneficiary (Beneficiary hereby approves the firms
commonly known as "Big Six").
In addition to the Company Statements, Grantor agrees to furnish to Beneficiary
annual financial statements on each Property in the form attached to the Phase I
Loan Commitment for each Park and all Parks in the aggregate including
(a) a statement of operations with a detailed line item breakdown
of all operating expenses, capitalized costs associated with
tenant improvements, lease commissions and capital
improvements.
Grantor agrees to furnish to Beneficiary for (i) each Building, (ii) each Park
and (iii) all Parks in the aggregate
(b) a current rent roll in the form attached to the Phase I Loan
Commitment (the "Rent Roll");
(c) if requested by Beneficiary, a report detailing cost
reimbursements to tenants, options and other major variations
from standard form leases (collectively referred to herein as
the "Property Statements").
The Property Statements shall be certified as to the accuracy and completeness
of the applicable information and be signed by either a Chief Executive Officer,
Chief Financial Officer or Chief Accounting Officer of Grantor (the
"Certification").
In addition, Grantor shall furnish to Beneficiary 10K and 10Q reports at the
time they are submitted to the Securities and Exchange Commission. At the time
the 10K and 10Q reports are submitted to Beneficiary, Grantor shall also forward
its computation of the calculations required under the "Financial Covenants"
along with a Certification verifying compliance with such
18
<PAGE> 19
covenants. Grantor acknowledges that Beneficiary requires the Company Statements
and Property Statements (collectively, the "Financials"), Rent Roll and
Certification in order to record accurately the value of the Property for
financial and regulatory reporting.
If Grantor does not furnish, or cause to be furnished, the Financials, Rent Roll
and Certification to Beneficiary by the Financial Statements Due Date, within 30
days after Beneficiary shall have given written notice to Grantor that the
Financials, Rent Roll and/or Certification have not been received as required,
(x) interest on the unpaid principal balance of the Indebtedness shall
as of the Financial Statements Due Date, accrue and become payable at a
rate equal to the sum of the Interest Rate (as defined in the Note)
plus one percent (1%) per annum (the "Increased Rate"); and
(y) Beneficiary may elect to obtain an independent appraisal and audit
of the Property at Grantor's expense, and Grantor agrees that it will,
upon request, promptly make Grantor's books and records regarding the
Property available to Beneficiary and the person(s) performing the
appraisal and audit (which obligation Grantor agrees can be
specifically enforced by Beneficiary).
The amount of the payments due under the Note during the time in which the
Increased Rate shall be in effect shall be changed to an amount which is
sufficient to amortize the then unpaid principal balance at the Increased Rate
during the then remaining portion of a period of 25 years commencing with the
Amortization Period Commencement Date (as defined in the Note). Interest shall
continue to accrue and be due and payable monthly at the Increased Rate until
the Financials, Rent Roll and Certification shall be furnished to Beneficiary as
required. Commencing on the date on which the Financials, Rent Roll and
Certification are received by Beneficiary, interest on the unpaid principal
balance shall again accrue at the Interest Rate and the payments due during the
remainder of the term of the Note shall be changed to an amount which is
sufficient to amortize the then unpaid principal balance at the Interest Rate
during the then remaining portion of a period of 25 years commencing with the
Amortization Period Commencement Date. Notwithstanding the foregoing,
Beneficiary shall have the right to conduct an independent audit at its own
expense at any time.
Notwithstanding the above, the Financial Statements Due Date may be extended up
to sixty (60) days if Grantor receives an extension from the Securities and
Exchange Commission for filing of its annual report of Form 10K.
PROPERTY SUBSTITUTION. Provided there is then no default under any Loan Document
and upon prior written request from Grantor, Beneficiary shall not withhold its
consent to the addition of a property and concurrent release of a property for
which it is substituted ("Substitution") provided:
(i) the property to be released and the property to be substituted are
whole office Parks and, in the case where a portion of such Park is
also encumbered by the Phase I Loan Documents, such portion is
concurrently being released from the Phase I Loan Documents pursuant to
the terms thereof;
(ii) the substituted Park is of equal or higher Valuation than the Park
being released;
19
<PAGE> 20
(iii) the substituted Park is at least 90% leased with net rents equal
to or greater than the net rents of the Park being withdrawn;
(iv) Grantor has the same ownership interest in the substituted Park as
in the Park to be released;
(v) the substituted Park satisfies all of the conditions of the Phase
II Loan Commitment which would have been satisfied if the Park was part
of the original property;
(vi) the Substitutions will be limited to not more than one Park per
calendar year, and not more than three Parks prior to the Maturity Date
of the Tranche D Promissory Note;
(vii) the request for the Substitution is made prior to the last two
(2) years of the term of (i) the Tranche C Promissory Note in the case
of a Pool C Park and (ii) the Tranche D Promissory Note in the case of
a Pool D Park.
If Grantor shall make a Substitution, Beneficiary shall be paid a fee equal to
(i) .50% of the Valuation of the Park being released if the Park being withdrawn
is located in El Paso, Texas, Orlando, Florida or San Antonio, Texas, or (ii)
.75% of the Valuation of the Park being released for any other Park being
withdrawn. At the time of the Substitution, no modification of the interest rate
or repayment terms of the Note will be required.
RIGHT OF FIRST OFFER INVOLVING OTHER PROPERTY. Beneficiary shall have the right
of first offer involving the properties described in Exhibit "C" (the "Vacant
Land") attached hereto and incorporated herein by this reference (provided,
however, this provision shall not apply to Vacant Land located in a Park that
has been substituted or released from the lien hereof) for (i) the purchase of
any Vacant Land prior to Grantor selling such Vacant Land, and (ii) for mortgage
loan financing for any future mortgage loan prior to Grantor obtaining
construction or permanent financing of improvements erected or to be erected on
any Vacant Land.
Grantor shall submit to Beneficiary written notice of its intent to seek to sell
or obtain mortgage financing together with sufficient documentation (if for sale
of vacant land: any proposed sales package, plat or survey, number of acres,
current zoning, availability of utilities and latest real estate tax notice; if
for such financing to cover development, the aforementioned items plus:
development specifications, construction budget and stabilized pro-forma) to
permit evaluation and underwriting. Beneficiary shall have thirty (30) days from
the date such notice and documentation is delivered within which to respond
thereto (the "Offer Period").
In the event that (a) Beneficiary does not respond or otherwise declines to
exercise this right of first offer within the Offer Period, or (b) Grantor
declines Beneficiary's proposal for such sale or mortgage financing, as the case
may be, Grantor shall be free for a period of twelve (12) months from the
expiration of the Offer Period to enter into any contract or contracts for the
sale or mortgage financing of such parcel of Vacant Land as it shall determine
in its sole discretion.
Beneficiary's refusal to offer to purchase or provide mortgage financing shall
not be deemed to be a waiver by Beneficiary of its right of first refusal to
purchase or provide mortgage financing for other portions of the Vacant Land or
to purchase or provide mortgage financing for the Vacant Land if Grantor is
unsuccessful in procuring from another source that sale or such financing which
was previously offered to Beneficiary in accordance with the above procedure.
20
<PAGE> 21
PARTIAL RELEASES. Upon written request from Grantor, Beneficiary will release
from the lien of this instrument either the specific Parks located in Pool A and
Pool C designated by Grantor in the case of the Tranche A Promissory Note and
the Tranche C Promissory Note or the specific Parks located in Pool B and Pool D
designated by Grantor in the case of the Tranche B Promissory Note and the
Tranche D Promissory Note, provided there is then no default in any of the Loan
Documents and subject to satisfaction of the following conditions:
1) Grantor has prepaid fifty percent (50%) of the principal of
the Tranche A Promissory Note and the Tranche C Promissory
Note or the Tranche B Promissory Note and the Tranche D
Promissory Note as permitted pursuant to the First Partial
Prepayment (as defined in the Phase I Note) and/or the Second
Partial Prepayment (as defined in the Phase I Note) and/or the
First Partial Note C Prepayment or the first Partial Note D
Prepayment (as defined in the Phase II Note) and/or the Second
Partial Note C Prepayment or the Second Partial Note D
Prepayment (as defined in the Phase II Note);
2) No other Property (other than in connection with a
Substitution hereunder) in such Pool has been released;
3) Remaining portions of the Properties in both Pools have a debt
service coverage of not less than 1.4 for the Indebtedness;
and
4) The Valuation of the Parks being released does not exceed
33-1/3% of the amount of the Valuation of all Parks in the
respective Pool.
FULL RELEASE. Upon payment in full of the Tranche A Promissory Note and the
Tranche C Promissory Note (including the applicable prepayment fee described
therein), the Pool A Parks and the Pool C Parks will be released from the lien
hereof and, upon payment in full of the Tranche B Promissory Note and the
Tranche D Promissory Note (including the applicable prepayment fee described
therein), the Pool B Parks and the Pool D Parks will be released from the lien
hereof.
DEPOSITS BY GRANTOR. To assure the timely payment of real estate taxes and
special assessments, Beneficiary shall have the option upon the occurrence of an
Event of Default to require Grantor to deposit funds with Beneficiary, in
monthly or other periodic installments in amounts estimated by Beneficiary from
time to time sufficient to pay real estate taxes and special assessments as they
become due. If at any time the funds so held by Beneficiary, or in such other
account, shall be insufficient to pay any of said expenses, Grantor shall, upon
receipt of notice thereof, immediately deposit such additional funds as may be
necessary to remove the deficiency. All funds so deposited shall be irrevocably
appropriated to Beneficiary to be applied to the payment of such real estate
taxes and special assessments and, at the option of Beneficiary after an Event
of Default, the Indebtedness then due, by acceleration or otherwise.
Notwithstanding the above, upon the occurrence of an Event of Default,
Beneficiary shall, so long as no delinquency would occur, cooperate with Grantor
to attain payment discounts available to Grantor and permit Grantor to contest
the amount of such taxes.
21
<PAGE> 22
MODIFICATION OF TERMS. Without affecting the liability of Grantor or any other
person (except any person expressly released in writing) for payment of the
Indebtedness or for performance of any obligation contained herein and without
affecting the rights of Beneficiary with respect to any security not expressly
released in writing, Beneficiary may, at any time and from time to time, either
before or after the maturity of the Note, without notice or consent: (i) release
any person liable for payment of all or any part of the Indebtedness or for
performance of any obligation; (ii) make any agreement extending the time or
otherwise altering the terms of payment of all or any part of the Indebtedness,
or modifying or waiving any obligation, or subordinating, modifying or otherwise
dealing with the lien or charge hereof; (iii) exercise or refrain from
exercising or waive any right Beneficiary may have; (iv) accept additional
security of any kind; (v) release or otherwise deal with any property, real or
personal, securing the Indebtedness, including all or any part of the
Properties.
EXERCISE OF OPTIONS. Whenever, by the terms of this instrument, of the Note or
any of the other Loan Documents, Beneficiary is given any option, such option
may be exercised when the right accrues, or at any time thereafter, and no
acceptance by Beneficiary of payment of Indebtedness in default shall constitute
a waiver of any default then existing and continuing or thereafter occurring.
NATURE AND SUCCESSION OF AGREEMENTS. Each of the provisions, covenants and
agreements contained herein shall inure to the benefit of, and be binding on,
the heirs, executors, administrators, successors, grantees, lessees and assigns
of the parties hereto, respectively, and the term "Beneficiary" shall include
the owner and holder of the Note.
LEGAL ENFORCEABILITY. No provision of this instrument, the Note or any other
Loan Documents shall require the payment of interest or other obligation in
excess of the maximum permitted by law. If any such excess payment is provided
for in any Loan Documents or shall be adjudicated to be so provided, the
provisions of this paragraph shall govern and Grantor shall not be obligated to
pay the amount of such interest or other obligation to the extent that it is in
excess of the amount permitted by law.
LIMITATION OF LIABILITY. Notwithstanding any provision contained herein to the
contrary, the personal liability of Grantor shall be limited as provided in the
Note.
CAPTIONS. The captions contained herein are for convenience and reference only
and in no way define, limit or describe the scope or intent of, or in any way
affect this instrument.
MISCELLANEOUS. Time is of the essence in each of the Loan Documents. The
remedies of Beneficiary as provided herein or in any other Loan Document or at
law or in equity shall be cumulative and concurrent, and may be pursued singly,
successively, or together at the sole discretion of Beneficiary, and may be
exercised as often as occasion therefor shall occur; and neither the failure to
exercise any such right or remedy nor any acceptance by Beneficiary of payment
of Indebtedness in default shall in any event be construed as a waiver or
release of any right or remedy. Neither this instrument nor any other Loan
Document may be modified or terminated orally but only by agreement or discharge
in writing and signed by Grantor and Beneficiary. If any of the provisions of
any Loan Document or the application thereof to any persons or circumstances
shall to any extent be invalid or unenforceable, the remainder of such Loan
Document and each of the other Loan Documents, and the application of such
provision or provisions to persons or circumstances other than those as to whom
or which it is held invalid or unenforceable, shall not be affected thereby, and
every provision of each of the Loan Documents shall be valid and enforceable to
the fullest extent permitted by law.
22
<PAGE> 23
WAIVER OF JURY TRIAL. Grantor hereby waives any right to trial by jury with
respect to any action or proceeding (a) brought by Grantor, Beneficiary or any
other person relating to (i) the obligations secured hereby and/or any
understandings or prior dealings between the parties hereto or (ii) the Loan
Documents or the Environmental Indemnity Agreement, or (b) to which Beneficiary
is a party.
GOVERNING LAW. The accrual of interest on the indebtedness evidenced by the Note
and on all other amounts due under any of the Loan Documents, including without
limitation interest at the Interest Rate (as defined in the Note) and interest
at the Default Rate (as defined in the Note) payable hereunder, shall be
governed and construed, for purposes of determining compliance with any law
governing the maximum rate of interest that can be charged on the indebtedness
evidenced by the Note and on all other amounts due under any of the Loan
Documents, by the laws of the State of Wisconsin. For all other purposes, this
instrument, the interpretation hereof and the rights, obligations, duties and
liabilities hereunder shall be governed and controlled by the laws of the State
of Tennessee.
INCORPORATION BY REFERENCE. The state riders to this Master Lien Instrument
attached hereto as Exhibits "B-1" through "B-3" are an integral part hereof and
are incorporated herein by this reference.
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<PAGE> 24
IN WITNESS WHEREOF, this instrument has been executed by the Grantor as of the
day and year first above written.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF MEMPHIS AND COUNTY OF
SHELBY
By:
----------------------------------
Name:
--------------------------------
Attest:
------------------------------
Name:
--------------------------------
KOGER EQUITY, INC., a Florida
corporation
Signed in presence of: By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
- -------------------------- 8880 Freedom Crossing Trail
Jacksonville, FL 32256
- --------------------------
Name Typed or Printed
Attest:
------------------------------
Name:
--------------------------------
Title:
-------------------------------
- -------------------------- 8880 Freedom Crossing Trail
Jacksonville, FL 32256
- --------------------------
Name Typed or Printed
(corporate seal)
24
<PAGE> 25
STATE OF )
) ss.
COUNTY OF )
BEFORE ME, the undersigned authority, on this day personally appeared
_____________________________________ and ___________________________, known to
me to be the persons whose names are subscribed to the foregoing instrument, and
known to me to be the ________ and ________, respectively, of THE INDUSTRIAL
DEVELOPMENT BOARD OF THE CITY OF MEMPHIS AND COUNTY OF SHELBY, and acknowledged
to me that they executed said instrument for the purposes and considerations
therein expressed, and as the act of said corporation.
GIVEN under my hand and official seal, this ____ day of ________, 1999.
--------------------------------
Notary Public
My commission expires:
25
<PAGE> 26
STATE OF )
) ss.
COUNTY OF )
BEFORE ME, the undersigned authority, on this day personally appeared
G. DANNY EDWARDS AND W. LAWRENCE JENKINS, known to me to be the persons whose
names are subscribed to the foregoing instrument, and known to me to be the VICE
President and TREASURER, respectively, of KOGER EQUITY, INC., a Florida
corporation, and acknowledged to me that they executed said instrument for the
purposes and considerations therein expressed, and as the act of said
corporation.
GIVEN under my hand and official seal, this 2nd day of September 1999.
/s/ CARRIE HEMMING
-------------------------------
Notary Public
My commission expires:
NOTARY PUBLIC, CAMDEN COUNTY, GA
MY COMMISSION EXPIRES DEC. 28, 2002
26
<PAGE> 1
EXHIBIT 10(J)(11)
Texas, Florida, South Carolina and Tennessee
Counterpart 1 of 9 for recording in Bexar County, Texas
RECORDING REQUESTED BY
AUSTIN TITLE COMPANY
- ----------------------
WHEN RECORDED MAIL TO
The Northwestern Mutual Life Ins. Co.
720 East Wisconsin Avenue - Rm N16WC
Milwaukee, WI 53202
Attn: Rosemary Poetzel
LOAN NO. C-332344 SPACE ABOVE THIS LINE FOR RECORDER'S USE
ABSOLUTE ASSIGNMENT OF LEASES AND RENTS
(With License Back)
THIS Absolute Assignment of Leases and Rents (this "Assignment") is
made as of the 2nd day of September, 1999, by and between KOGER EQUITY, INC., a
Florida corporation, whose mailing address is 8880 Freedom Crossing Trail,
Jacksonville, Florida 32256, (herein called "Borrower") and THE NORTHWESTERN
MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation, whose mailing address is
c/o Real Estate Department, 720 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, (herein called "Lender").
W I T N E S S E T H
FOR AND IN CONSIDERATION of the indebtedness hereinafter described,
Borrower has granted, bargained, sold and conveyed, and by these presents does
grant, bargain, sell and convey, unto Lender, its successors and assigns
forever, all and singular the property hereinafter described (collectively, the
"Security"), to wit:
(a) All rents, issues and profits arising from or related to
the land, identified and described in Exhibits "A-1" through
"A-10" attached hereto and fully incorporated herein by
reference for all purposes and all improvements and any other
property, whether real, personal or mixed, located thereon
(which land, improvements and other property are hereinafter
referred to individually, for each parcel identified on the
Exhibits, as a "Property" and collectively as the
"Properties");
(b) All of Borrower's rights, titles, interests and
privileges, as lessor, in the leases now existing or hereafter
made affecting the Property, whether or not made by Borrower
and as the same may have been, or may from time to time
hereafter be, modified, extended and renewed (hereinafter
collectively called the "Leases");
(c) Unless prohibited by applicable law, all tenant security
deposits and other amounts due and becoming due under the
Leases;
(d) All guarantees of the Leases, including guarantees of
tenant performance;
1
<PAGE> 2
(e) All insurance proceeds, including rental loss coverage and
business interruption coverage with respect to the Leases; and
(f) All judgments and settlements of claims in favor of
Borrower (including condemnation proceeds, if any) and all
rights, claims and causes of action under any court
proceeding, including without limitation any bankruptcy,
reorganization or insolvency proceeding, or otherwise arising
from the Leases.
TO HAVE AND TO HOLD the Security unto Lender, its successors and
assigns forever, and Borrower does hereby bind itself, its heirs, legal
representatives, successors and assigns, to warrant and forever defend the
Security unto Lender, its successors and assigns forever against the claim or
claims of all persons whomsoever claiming the same or any part thereof.
ARTICLE I
DEFINITIONS
1.01 TERMS DEFINED ABOVE. As used in this Assignment, the terms
"Borrower", "Leases", "Lender", "Property", "Properties", and "Security" shall
have the respective meanings indicated above.
1.02 CERTAIN DEFINITIONS. The following terms shall have the
meanings assigned to them below whenever they are used in this Assignment,
unless the context clearly otherwise requires. Except where the context
otherwise requires, words in the singular form shall include the plural and vice
versa.
"Event of Default" shall mean any Event of Default as defined
in the Master Lien Instrument.
"Master Lien Instrument" shall mean that certain (i) Master
Lien Instrument of even date herewith, executed in nine (9)
counterparts by Borrower and granting a lien on the Properties to
Trustee and/or Lender, as the case may be, depending on the
jurisdiction in which the Master Lien Instrument is recorded, as such
instrument may be amended and restated from time to time, and (ii)
Master Lien Instrument dated December 16, 1996, executed in nine (9)
counterparts by Borrower and granting a lien on the Properties to
Trustee and/or Lender, as the case may be, depending on the
jurisdiction in which the Master Lien Instrument is recorded, as such
instrument may be amended and restated from time to time.
"Phase 2 Loan Documents" shall mean the Tranche C Promissory
Note, the Tranche D Promissory Note, the Master Lien Instrument and all
other instruments and documents (as the same may be amended from time
to time) entered into by or for the benefit of Borrower and delivered
to Lender in connection with, or as security for, the indebtedness
evidenced by the Tranche C Promissory Note and the Tranche D Promissory
Note, except any separate environmental indemnity agreement.
"Phase 1 Loan Documents" shall mean the Tranche A Promissory
Note, the Tranche B Promissory Note, the Master Lien Instrument and all
other instruments and documents (as the same may be amended from time
to time) entered into by or for the benefit of Borrower and delivered
to Lender in connection with, or as security for, the indebtedness
evidenced by the Tranche A Promissory Note and the Tranche B Promissory
Note, except any separate environmental indemnity agreement.
2
<PAGE> 3
"Loan Documents" shall mean collectively, the Phase 1 Loan
Documents and the Phase 2 Loan Documents.
"Note" shall mean, collectively, that certain (i) Tranche C
Promissory Note of even date herewith, in the original principal amount
of $14,700,000.00, (ii) Tranche D Promissory Note of even date
herewith, in the original principal amount of $30,300,000.00, (iii)
Tranche A Promissory Note dated December 16, 1996, in the original
principal amount of $100,500,000.00, and (iv) Tranche B Promissory Note
dated December 16, 1996, in the original principal amount of
$89,500,000.00, executed by Borrower and payable to the order of
Lender, as such instruments may be amended, renewed and restated from
time to time.
"Obligations" shall mean the following:
(a) The indebtedness evidenced by the Note and all
interest thereon;
(b) The performance of all covenants and agreements
of Borrower contained in the Loan Documents;
(c) All funds hereafter advanced by Lender to or for
the benefit of Borrower as contemplated by any covenant or
provision contained in any Loan Document and all interest
thereon;
(d) All renewals, extensions, rearrangements and
modifications of any of the Obligations described hereinabove;
and
(e) Any and all attorneys' fees and expenses of
collection payable under the terms of any Loan Document.
ARTICLE II
ASSIGNMENT
2.01 ABSOLUTE ASSIGNMENT. This Assignment is, and is intended to be, an
absolute and present assignment of the Security from Borrower to Lender with a
concurrent license back to the Borrower (which license is subject to revocation
upon the occurrence of an Event of Default as herein provided) and is not
intended as merely the granting of a security interest relating to the
Obligations.
2.02 LICENSE. Borrower is hereby granted the license to manage and
control the Security and to collect at the time of, but not prior to, the date
provided for the payment thereof, all rents, issues and profits from the
Properties, all security deposits and all judgments and settlements of claims
(excluding insurance loss and condemnation proceeds) in favor of Borrower and to
retain, use and enjoy the same. The license created and granted hereby shall be
revocable upon the terms and conditions contained herein.
3
<PAGE> 4
2.03 REVOCATION OF LICENSE. Immediately upon the occurrence of an Event
of Default and at any time thereafter, Lender, without in any way waiving such
default, may, at its option and without regard to the adequacy of the security
for the Obligations, either by an authorized representative or agent, with or
without bringing or instituting any judicial or other action or proceeding, or
by a receiver appointed by a court, immediately revoke the license granted in
Section 2.02, as evidenced by a written notice to said effect given to Borrower,
and further, at Lender's option (without any obligation to do so), take
possession of any Property or all Properties and the Security and have, hold,
manage, lease and operate the Property or Properties and the Security on such
terms and for such period of time as Lender may deem proper, and, in addition,
either with or without taking possession of the Properties, demand, sue for or
otherwise collect and receive all rents, issues and profits from the Properties,
including those past due and unpaid, with full power to make, from time to time,
all alterations, renovations, repairs or replacements thereto or thereof as may
seem proper to the Lender in its sole discretion, and to apply (in such order
and priority as Lender shall determine in its sole discretion, any statute, law,
custom or use to the contrary notwithstanding) such rents, issues and profits to
the payment of:
(a) all expenses of (i) managing the Properties, including
without implied limitation, the salaries, fees and wages of a managing
agent and such other employees as Lender may in its sole discretion
deem necessary or desirable, (ii) operating and maintaining the
Properties, including without implied limitation, all taxes, charges,
claims, assessments, water rents, sewer rents and any other liens, and
premiums for all insurance which Lender may in its sole discretion deem
necessary or desirable, (iii) the cost of any and all alterations,
renovations, repairs or replacements of or to the Properties, and (iv)
any and all expenses incident to taking and retaining possession of the
Property or Properties and the Security; and
(b) the Obligations.
The exercise by Lender of the rights granted it in this Section 2.03, and the
collection and receipt of rents, issues and profits and the application thereof
as herein provided, shall not be considered a waiver of any Event of Default.
2.04 TRUST FUNDS. All monies or funds covered by this Assignment paid
to, or for the benefit of, Borrower after an Event of Default are hereby
declared, and shall be deemed to be, trust funds in the hands of Borrower for
the sole benefit of Lender, until all Events of Default have been cured or
waived or the Obligations have been paid and performed in full. Borrower, or any
officer, director, representative or agent thereof receiving such trust funds or
having control or direction of same, is hereby made and shall be construed to be
a trustee of such trust funds so received or under its control and direction,
and such person shall be under a strict obligation and duty should such persons
receive or constructively receive trust funds to (1) remit any and all such
trust funds to Lender within twenty-four (24) hours of receipt, upon demand
therefor by Lender or (2) to apply such trust funds only to Obligations then due
or the operating expenses of the Properties.
ARTICLE III
COVENANTS, REPRESENTATIONS AND WARRANTIES
4
<PAGE> 5
3.01 LIABILITY. Lender shall not be liable for any loss sustained by
Borrower resulting from Lender's failure to let the Properties after an Event of
Default or from any other act or omission of Lender in managing the Properties
or the Security after an Event of Default, except for acts constituting gross
negligence or willful misconduct. Lender shall not be obligated to perform or
discharge, nor does Lender hereby undertake to perform or discharge, any
obligation, duty or liability under any Lease or under or by reason of this
Assignment, and Borrower shall and does hereby indemnify Lender for, and save
and hold Lender harmless from, any and all liability, loss or damages, except so
much thereof as shall result from the gross negligence or willful misconduct of
Lender, which may or might be incurred under any Lease or under or by reason of
this Assignment and from any and all claims and demands whatsoever which may be
asserted against Lender by reason of any alleged obligation or undertaking on
its part to perform or discharge any of the terms, covenants or agreements
contained in any Lease, including without implied limitation, any claims by any
tenants of credit for rents for any period paid to and received by Borrower but
not delivered to Lender. Should Lender incur any such liability under any Lease,
under or by reason of this Assignment or in defense of any such claim or demand,
the amount thereof, including without implied limitation all costs, expenses and
attorneys' fees, shall be added to the principal of the Note and Borrower shall
reimburse Lender therefor immediately upon demand. This Assignment shall not
operate to place responsibility upon Lender for the control, care, upkeep,
management, operation or repair of the Properties and the Security or for the
carrying out of any of the terms and conditions of any Lease; nor shall this
Assignment operate to make Lender responsible or liable for any waste committed
on the Properties by the tenants or any other party, for any dangerous or
defective condition of the Properties or for any negligence in the control,
care, upkeep, operation, management or repair of the Properties resulting in
loss or injury or death to any tenant, licensee, employee, stranger or other
person whatsoever.
3.02 TERMINATION. Upon payment and performance of the Obligations in
full, this Assignment shall become null and void and of no further legal force
or effect, but the affidavit, certificate, letter or statement of any officer,
agent, authorized representative or attorney of Lender showing any part of the
Obligations remaining unpaid or unperformed shall be and constitute conclusive
evidence of the validity, effectiveness and continuing force of this Assignment
upon which any person may, and is hereby authorized to, rely. Borrower hereby
authorizes and directs all tenants under the Leases, all guarantors of Leases,
all insurers providing rental loss or business interruption insurance with
respect to the Properties, all governmental authorities and all other occupants
of the Properties, upon receipt from Lender of written notice to the effect that
Lender is then the holder of the Note and that an Event of Default exists, to
pay over to Lender all rents and other amounts due and to become due under the
Leases and under guaranties of the Leases and all other issues and profits from
the Properties and to continue so to do until otherwise notified in writing by
Lender. This right may be exercised without Lender taking actual or constructive
possession of the Properties or any part thereof.
3.03 SECURITY. Lender may take or release any security for the payment
or performance of the Obligations, may release any party primarily or
secondarily liable therefor and may apply any security held by it to the
satisfaction of all or any portion of the Obligations, without prejudice to any
of its rights under this Assignment, the other Loan Documents or otherwise
available at law or in equity.
5
<PAGE> 6
3.04 COVENANTS. Borrower covenants with Lender (a) to observe and
perform all material obligations imposed upon the lessor under all Leases and
not to do or permit to be done anything to impair the same without Lender's
prior written consent, provided, however, this subsection (a) shall only apply
to leases of 10,000 or more square feet unless Borrower has acted or failed to
act in such a way as to cause a breach of the lessor's obligations in 25% or
more of the Leases (by number of leases then in effect and not by square
footage) then in effect at any Park (as such term is defined in the Master Lien
Instrument) in which case, Borrower shall be in default under this subsection
(a); (b) not to collect any of the rent or other amounts due under any Lease or
other issues or profits from the Properties in any manner in advance of the time
when the same shall become due (save and except only for collecting two months'
rent in advance plus the security deposit, if any, at the time of execution of a
Lease); (c) not to execute any other assignment of rents, issues or profits
arising or accruing from the Leases or from the Properties; (d) with respect to
leases of 10,000 or more square feet, not to enter into any lease agreement
affecting the Properties, except those leases entered into in the ordinary
course of business and utilizing Borrower's standard form lease previously
approved by Lender, with no substantial modifications thereto, without the prior
written consent of Lender, which consent or denial will be given by Lender
within five (5) business days of receipt of said Lease for consideration by
Lender; (e) to execute and deliver, at the request of Lender, all such further
assurances and acknowledgments of the assignment contained herein and the other
provisions hereof, with respect to specific Leases or otherwise, as Lender shall
from time to time require; (f) to use reasonable efforts to obtain from any
tenant at the Properties, from time to time as requested by Lender, estoppel
certificates, in form and substance satisfactory to Lender, confirming the terms
of such tenant's Lease and the absence of default thereunder; and (g) with
respect to leases of 10,000 or more square feet, not to cancel, surrender or
terminate any Lease, exercise any option which might lead to such termination or
consent to any change, modification, or alteration thereof, to the release of
any party liable thereunder or to the assignment of the lessee's interest
therein, except as is consistent with the usual and customary operation of the
Properties, without the prior written consent of Lender, which consent or denial
will be given by Lender within five (5) business days of receipt of said Lease
for consideration by Lender, and any of said acts, if done without the prior
written consent of Lender, shall be null and void.
3.05 AUTHORITY TO ASSIGN. Borrower represents and warrants that (a)
Borrower has full right and authority to execute this Assignment and has no
knowledge of any existing defaults under any of the existing Leases, (b) all
conditions precedent to the effectiveness of said existing Leases have been
satisfied, (c) Borrower has not executed or granted any modification of the
existing Leases, either orally or in writing, (d) the existing Leases are in
full force and effect according to the terms set forth in the lease instruments
heretofore submitted to Lender and (e) Borrower has not executed any other
instrument which might prevent Lender from operating under any of the terms and
conditions of this Assignment, including any other assignment of the Leases or
the rents, issues and profits from the Properties.
6
<PAGE> 7
3.06 CROSS-DEFAULT. Violation or default under any of the covenants,
representations, warranties and provisions contained in this Assignment by the
Borrower shall be deemed a default hereunder as well as under the terms of the
other Loan Documents, and any default thereunder shall likewise be a default
under this Assignment. Any default by Borrower under any of the terms of any
Lease shall be deemed a default hereunder and under the terms of the other Loan
Documents, and any expenditures made by Lender in curing such default on
Borrower's behalf, with interest thereon at the Default Rate (as defined in the
Note), shall become part of the Obligations.
3.07 NO MORTGAGEE IN POSSESSION. The acceptance by Lender of this
Assignment, with all of the rights, powers, privileges and authority created
hereby, shall not, prior to entry upon and taking possession of the Properties
by Lender, be deemed or construed to constitute Lender a "mortgagee in
possession", or hereafter or at any time or in any event obligate Lender to
appear in or defend any action or proceeding relating to any Lease, the
Properties or the Security, to take any action hereunder, to expend any money,
incur any expense, perform or discharge any obligation, duty or liability under
any Lease, or to assume any obligation or responsibility for any security
deposits or other deposits delivered to Borrower by any tenant and not actually
delivered to Lender. Lender shall not be liable in any way for any injury or
damage to any person or property sustained in or about the Properties.
3.08 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender that, except for that certain lease dated March 14, 1989 by
and between Carolina Casualty Insurance Company as Lessee and Borrower as
successor Lessor (as amended from time to time), none of the Leases contain any
option or agreement for the tenant thereunder or any other party to acquire the
Property or any interest therein, except for the leasehold use of space.
ARTICLE IV
GENERAL
4.01 REMEDIES. The rights and remedies provided Lender in this
Assignment and the other Loan Documents are cumulative. Nothing contained in
this Assignment, and no act done or omitted by Lender pursuant hereto, including
without implied limitation the collection of any rents, shall be deemed to be a
waiver by Lender of any of its rights and remedies under the other Loan
Documents or applicable law or a waiver of any default under the other Loan
Documents, and this Assignment is made and accepted without prejudice to any of
the rights and remedies provided Lender by the other Loan Documents. The right
of Lender to collect the principal sum and interest due on the Note and to
enforce the other Loan Documents may be exercised by Lender either prior to,
simultaneously with, or subsequent to any action taken by it hereunder.
7
<PAGE> 8
4.02 NOTICES. Any notice or demand hereunder shall be in writing, may
be delivered personally or sent by certified mail with postage prepaid, by
reputable courier service with charges prepaid, by telecopier or by such other
method whereby the receipt thereof may be confirmed. Any notice or demand sent
to Borrower by certified mail or reputable courier service shall be addressed to
Borrower at the address set forth above or such other address in the United
States of America as Borrower shall designate in a notice to Lender given in the
manner described herein. Any notice sent to Borrower by telecopier shall be
telecopied to 904/346-1435 or to such other telecopier number in the United
States of America as shall be designated in a notice given to Lender in the
manner described herein. Any notice sent to Lender shall be addressed to the
attention of the Real Estate Investment Department at 720 East Wisconsin Avenue,
Milwaukee, WI 53202 and shall refer to the Loan No. set forth above and, if
telecopied, shall be telecopied to 414/299-1557 or at such other address or
telecopier number as Lender shall designate in a notice given in the manner
described herein. Any notice or demand sent hereunder by telecopier shall also
be sent by certified mail or reputable courier service. Any notice or demand
hereunder shall be deemed given when received. Any notice or demand which is
rejected, the acceptance of delivery of which is refused or which is incapable
of being delivered for any reason whatsoever at the address or telecopier number
specified herein or such other address or telecopier number designated pursuant
hereto shall be deemed received as of the date of attempted delivery.
4.03 CAPTIONS. The titles and headings of the various Articles and
Sections hereof are intended solely for reference and are not intended to
modify, explain or affect the meaning of the provisions of this Assignment.
4.04 SEVERABILITY. If any of the provisions of this Assignment or the
application thereof to any persons or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Assignment, and the application
of such provision or provisions to persons or circumstances other than those as
to whom or which it is held invalid or unenforceable, shall not be affected
thereby, and every provision of this Assignment shall be valid and enforceable
to the fullest extent permitted by law.
4.05 ATTORNEYS' FEES. In the event of any controversy, claim, dispute,
or litigation between the parties hereto to enforce any provision of this
Assignment or any right of Lender hereunder, Borrower agrees to pay to Lender
all costs and expenses, including reasonable attorneys' fees incurred therein by
Lender, whether in preparation for or during any trial, as a result of an appeal
from a judgment entered in such litigation or otherwise.
4.06 AMENDMENTS. This Assignment may not be modified, amended or
otherwise changed in any manner unless done so by a writing executed by the
parties hereto.
4.07 BENEFITS. This Assignment and all the covenants, terms and
provisions contained herein shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
4.08 ASSIGNMENT. Borrower shall have no right to assign or transfer the
revocable license granted herein. Any such assignment or transfer shall
constitute a default.
4.09 TIME OF ESSENCE. Time is of the essence of this Assignment.
8
<PAGE> 9
4.10 GOVERNING LAW. The laws of the State named in the upper left-hand
corner of this Assignment shall govern and control the interpretation of this
Assignment and the rights, obligations, duties and liabilities of the parties
hereto.
4.11 LIMITATION OF LIABILITY. Notwithstanding any provision contained
in this Assignment, the personal liability of Borrower shall be limited as
provided in the Note.
9
<PAGE> 10
IN WITNESS WHEREOF this Assignment has been entered into as of the day
and year first-above written.
BORROWER:
KOGER EQUITY, INC., a Florida
corporation
Signed in presence of: By: /s/ G. DANNY EDWARDS
-----------------------------------
Name: /s/ G. DANNY EDWARDS
----------------------------
Title: TREASURER
----------------------------
/s/ LYNDA R. AYCOCK 8880 Freedom Crossing Trail
- --------------------- Jacksonville, FL 32256
/s/ LYNDA R. AYCOCK
- ---------------------
Name Typed or Printed
Attest: /s/ W. LAWRENCE JENKINS
----------------------------
Name: /s/ W. LAWRENCE JENKINS
----------------------------
/s/ H. F. McCART, JR Title: CORPORATE SEC. & VP
- --------------------- ----------------------------
/s/ H.F. McCART, JR 8880 Freedom Crossing Trail
- --------------------- Jacksonville, FL 32256
Name Typed or Printed
(corporate seal)
LENDER:
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY,
a Wisconsin corporation
Signed in presence of: By: Northwestern Investment Management
Company, a Wisconsin corporation, its
/s/ JANET SZUKALSKI wholly owned subsidiary and authorized
Janet Szukalski representative
- ---------------------
Name Typed or Printed
By: /s/ MICHAEL P. CUSICK
---------------------------------------
/s/ ROSEMARY POETZEL Michael P. Cusick, Managing Director
- --------------------- 720 E. Wisconsin Avenue
Rosemary Poetzel Milwaukee, WI 53202
- ---------------------
Name Typed or Printed
Attest: /s/ DANIEL C. KNUTH
------------------------------------
(corporate seal) Daniel C. Knuth, Assistant Secretary
720 E. Wisconsin Avenue
Milwaukee, WI 53202
10
<PAGE> 11
STATE OF GEORGIA )
) ss.
COUNTY OF CAMDEN )
BEFORE ME, the undersigned authority, on this day personally appeared
W. Lawrence Jenkins and G. Danny Edwards, known to me to be the persons whose
names are subscribed to the foregoing instrument, and known to me to be the Vice
President and Treasurer, respectively, of KOGER EQUITY, INC., a Florida
corporation, and acknowledged to me that they executed said instrument for the
purposes and considerations therein expressed, and as the act of said
corporation.
GIVEN under my hand and official seal, this 2nd day of September 1999.
/s/ CARRIE HEMMING
---------------------------------
Notary Public
My commission expires:
NOTARY PUBLIC, CAMDEN COUNTY, GA
MY COMMISSION EXPIRES DEC. 28, 2002
11
<PAGE> 12
STATE OF WISCONSIN )
)ss.
COUNTY OF MILWAUKEE )
BEFORE ME, the undersigned authority, on this day personally appeared
Michael P. Cusik and Daniel C. Knuth, known to me to be the persons whose names
are subscribed to the foregoing instrument, and known to me to be the Managing
Director and Assistant Secretary for Northwestern Investment Management Company
on behalf of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin
corporation, and acknowledged to me that they executed said instrument for the
purposes and considerations therein expressed, and as the act of said
corporation.
GIVEN under my hand and official seal, this 30th day of August 1999.
/s/ JANET SZUKALSKI
-------------------
Janet Szukalski, Notary Public
My commission expires: May 14, 2000
This instrument was prepared by Paul E. McElwee, Attorney, for The Northwestern
Mutual Life Insurance Company, 720 East Wisconsin Avenue, Milwaukee, WI 53202.
12
<PAGE> 1
EXHIBIT 10(J)(12)
LOAN NO. C-332344
ENVIRONMENTAL INDEMNITY AGREEMENT
THIS ENVIRONMENTAL INDEMNITY AGREEMENT is entered into as of September
2, 1999 by the undersigned ("Indemnitors") in favor of The Northwestern Mutual
Life Insurance Company ("Northwestern") and the other Indemnified Parties
referred to herein.
RECITALS
A. Northwestern is contemporaneously herewith making a loan (the
"Loan") to Koger Equity, Inc., a Florida corporation, (the "Borrower") secured
or to be secured by a Mortgage or Deed of Trust and Security Agreement from
Borrower to Northwestern (the "Lien Instrument") on the fee title and/or
leasehold interest in the property described in Exhibits "A-1" through "A-10"
attached hereto.
B. In order to induce Northwestern to make the Loan, Indemnitors have
agreed to execute and deliver this Environmental Indemnity Agreement.
C. Each of the Indemnitors has a substantial direct or indirect
interest in the Property, financial or otherwise.
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Indemnitors hereby agree and covenant for the benefit of
Northwestern and the other Indemnified Parties as follows:
1. The following definitions shall apply to this Environmental
Indemnity Agreement:
(a) "Environmental Activity or Condition" means the presence, use,
generation, manufacture, production, storage, release, threatened release,
discharge, disposal or transportation of any Hazardous Substance on, onto, in,
under, over or from the Property or the violation of any Environmental Law
because of the condition of, or activity on, the Property.
(b) "Environmental Law" means all law relating to hazardous waste,
chemical substances or mixtures or hazardous, toxic, dangerous or unhealthy
substances or conditions or relating to the interaction of the use or ownership
of property and the environment, whether such law is: (i) criminal or civil,
(ii) federal, state or local, (iii) statutory, common law or administrative
regulation, (iv) currently in effect or enacted in the future.
(c) "Hazardous Substance" means any substance which (i) is designated
as hazardous, toxic or dangerous or similarly designated under any Environmental
Law, (ii) is regulated under any Environmental Law or by any governmental or
quasi-governmental agency, or (iii) could be a hazard to health, safety or
property values. Without limiting the foregoing, Hazardous Substances shall
include underground storage tanks, asbestos, urea formaldehyde insulation,
polychlorinated biphenyls, dioxins and petroleum products.
1
<PAGE> 2
(d) "Property" means the property described in Exhibits "A-1" through
"A-10" attached hereto, including the soil, surface water, ground water, air and
improvements on, beneath or above such property.
2. Indemnitors hereby agree to indemnify, defend and hold Northwestern
and its trustees, officers, policyholders, employees and agents (collectively,
the "Indemnified Parties") harmless from and against any and all damages,
liabilities, losses, costs and expenses, including reasonable attorneys' fees,
(collectively, "Damages") suffered or incurred by any of the Indemnified Parties
as a result of any Environmental Activity or Condition which would not have been
suffered or incurred if Northwestern had not made the Loan; provided, however,
the Indemnitors shall not be liable to the Indemnified Parties for any Damages
to the extent such Damage arise as a result of any gross negligence or willful
misconduct of the Indemnified Parties. The liability of Indemnitors as set forth
in the preceding sentence includes, without limitation, the following:
(a) Any costs of, or liability for, investigation, cleanup or
remediation of environmental damage;
(b) Any damages resulting from the diminution in value or
unmarketability of the Property or any other property;
(c) Any consequential or punitive damages suffered or incurred by any
of the Indemnified Parties;
(d) Any fines, penalties, assessments, judgments or other liabilities
resulting from any claim, judgment or finding concerning the violation
of any Environmental Law;
(e) Any amounts expended by any of the Indemnified Parties in good
faith to settle or compromise any claim or allegation of liability
covered by this Agreement.
The liability of Indemnitors hereunder shall continue, without reduction or
change, for a period of two years subsequent to either (i) the Loan being repaid
in full (other than by foreclosure or deed-in-lieu of foreclosure) or (ii)
Northwestern becoming owner of the Property through foreclosure, deed-in-lieu of
foreclosure or otherwise, excepting only Damages resulting from actions taken
either by Northwestern, by successive owners of the Property or by those
contracting with Northwestern or any successive owner subsequent to Northwestern
becoming owner of the Property; provided, however, that Indemnitors shall
nonetheless be responsible for the actions of any party investigating or
cleaning up Hazardous Substances, whether or not contracted for by Northwestern,
if Indemnitors are otherwise liable hereunder or otherwise for such
investigation or clean up. The liability of Indemnitors hereunder shall not be
reduced or otherwise affected by any Environmental Activity or Condition
occurring or existing prior to Northwestern becoming owner of the Property even
if caused in whole or part by a predecessor in title, tenant, trespasser or
other third person, whether on or off of the Property. As between Indemnitors
and the Indemnified Parties, the agreements by Indemnitors hereunder shall
override and be in lieu of any statutory, regulatory or common law prescriptions
for liability, contribution or cost sharing.
3. The liability of Indemnitors under this Environmental Indemnity
Agreement (i) shall not be subject to any limitations on liability set forth in
any of the documents evidencing the Loan and (ii) shall be an unsecured
obligation of Indemnitors to each of the Indemnified Parties, notwithstanding
the terms of the Lien Instrument or any other agreement.
4. Without limitation except as provided below following clause (e) of
this section 4, the obligations and liability of any Indemnitor under this
Environmental Indemnity Agreement shall in no way be waived, released,
discharged, reduced, mitigated or otherwise affected by:
2
<PAGE> 3
(a) The repayment of the Loan and/or the satisfaction or
release of the Lien Instrument; or
(b) Any neglect, delay or forbearance of Northwestern in
demanding, requiring or enforcing payment of the indemnity due hereunder; or
(c) The receivership, bankruptcy, insolvency or
dissolution of any Indemnitor or any affiliate thereof; or
(d) Any sale or refinancing of, or other transactions
related to, the Property by Borrower or Northwestern; or
(e) Any of the Indemnitors transferring or divesting any
or all of his, her or its estate, right, title or interest in or to the Property
or any interest in any entity.
Notwithstanding anything in this Indemnity Agreement to the contrary,
this Indemnity Agreement shall terminate and be of no force and effect (except
as to claims for Damages asserted prior to such date) on the earlier of (i) the
date two years after the earlier of (1) Northwestern having received repayment
in full of the Loan other than through acquisition of the Property by
Northwestern, and (2) a person or entity other than Northwestern or one of its
affiliates having become owner of the Property, and (ii) the date when any right
to bring a claim for Damages expires under applicable law.
5. Without limiting the other provisions hereof, in the event any claim
(whether or not a judicial or administrative action is involved) is asserted
against any of the Indemnified Parties with respect to any Environmental
Activity or Condition, Northwestern shall have the right to select the
engineers, other consultants and attorneys for the defense of the Indemnified
Parties but not for the Indemnitors, to determine the appropriate legal strategy
for such defense and to compromise or settle such claim solely as to the
Indemnified Parties and not with respect to any claim as it relates to the
Indemnitors, all in Northwestern's discretion, and Indemnitors shall be liable
to Northwestern in accordance with the terms hereof for all Damages suffered or
incurred by Northwestern in this regard.
6. Without limiting the other provisions hereof, if Northwestern
acquires legal possession and/or title to the Property and Northwestern becomes
aware of any Environmental Activity or Condition for which Indemnitors may have
liability in accordance with the other provisions of this Environmental
Indemnity Agreement, whether or not a claim is asserted against Northwestern or
any of the other Indemnified Parties, Northwestern shall have the right to take
such action as Northwestern shall deem reasonably necessary, in Northwestern's
discretion, to protect health, safety and property values and to minimize the
probability or extent of liability to Northwestern and the other Indemnified
Parties, including, without limitation, investigation and/or cleanup, and
Indemnitors shall be liable to Northwestern in accordance with the terms hereof
for all Damages suffered or incurred by Northwestern in this regard.
7. The liability of Indemnitors shall be joint and several.
8. No action or proceeding brought or instituted under this
Environmental Indemnity Agreement and no recovery made as a result thereon shall
be a bar or defense to any further action or proceeding under this Environmental
Indemnity Agreement.
3
<PAGE> 4
9. Subject to the termination of this Indemnity Agreement in accordance
with section 4 hereof, the covenants, agreements, indemnities, terms and
conditions contained in this Environmental Indemnity Agreement shall, extend to,
and be binding upon, Indemnitors and its successors and assigns, and shall inure
to the benefit of, and may be enforced by, Northwestern or any of the other
Indemnified Parties and its and their successors and assigns.
10. Each provision of this Environmental Indemnity Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Environmental Indemnity Agreement shall be
prohibited, invalid or ineffective under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Environmental Indemnity Agreement.
11. Indemnitors shall reimburse Northwestern and the other Indemnified
Parties for all reasonable attorneys' fees and expenses incurred in connection
with the enforcement of the Indemnified Parties' rights under this Environmental
Indemnity Agreement, including those incurred in any case, action, proceeding,
claim under the Federal Bankruptcy Code or any successor statute.
12. As additional assurance for the timely performance of the
obligations of Indemnitors hereunder, each Indemnitor hereby assigns to
Northwestern any rights such Indemnitor may have against any other person or
entity (including, without limitation, any present, future or former owners,
tenants or other occupants or users of the Property or any portion thereof)
relating to the matters covered by this Environmental Indemnity Agreement.
13. Each Indemnitor agrees that it shall have no right of contribution
or subrogation against any other Indemnitor hereunder unless and until all
obligations of Indemnitors hereunder have been satisfied. Each Indemnitor
further agrees that, to the extent that the waiver of its rights of subrogation
and contribution as set forth herein is found by a court of competent
jurisdiction to be void or voidable for any reason, any rights of subrogation or
contribution such Indemnitor may have shall be junior and subordinate to the
rights of Northwestern against any Indemnitor hereunder.
14. No consent by any Indemnitor shall be required for any assignment
or reassignment of the rights of Northwestern hereunder to one or more
purchasers of the Loan or the Property or any portion of either.
4
<PAGE> 5
IN WITNESS WHEREOF, the undersigned Indemnitors have executed this
Environmental Indemnity Agreement as of the day and year first above written.
Indemnitors
KOGER EQUITY, INC., a Florida
Corporation
By: /s/ G. DANNY EDWARDS
---------------------
TREASURER
(corporate seal) Attest: /s/ W. LAWRENCE JENKINS
-----------------------
CORPORATE SECRETARY
AND VICE PRESIDENT
5
<PAGE> 1
EXHIBIT 10(J)(13)
CERTIFICATION OF BORROWER
The Northwestern Mutual Life
Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
Re: $45,000,000.00 Loan to Koger Equity, Inc., a Florida corporation
("Borrower") Northwestern Loan No. C-332344
Gentlemen:
Pursuant to paragraph 40 of the Koger Equity, Inc. Application for Loan
dated February 26, 1999 and accepted by The Northwestern Mutual Life Insurance
Company ("Northwestern") on April 5, 1999 (the "Commitment"), Borrower certifies
to you that (i) all leases have been made available for review by Northwestern;
(ii) all information submitted to Northwestern in connection with the Loan is
true and complete to the best of Borrower's knowledge and belief; (iii) except
as disclosed in the Environmental Reports prepared by Law Engineering and
Environmental Services, Inc. and by ATC Associates, Inc. in connection with the
Loan, the surveys certified to Northwestern in connection with the Loan, or
other written report delivered by Borrower to Northwestern and to the best of
Borrower's knowledge:
(a) no underground storage tanks, asbestos, urea formaldehyde
insulation, PCB's, petroleum products, drums, materials spills,
stressed vegetation, present or past dumping or fill, discolored or
disturbed soil, unusual or noxious odors, monitoring wells, roads or
trails with no apparent outlet or purpose, hazardous substances, toxic
substances, radon or other material that is a hazard to health, safety
or property values, or could be a violation of any law or regulation
are located on the Property;
(b) no part of the Property contains a cemetery or burial ground;
(c) that (i) all improvements located on the Property were in
compliance with applicable wetlands regulations in effect at the time
such improvements were constructed, (ii) Borrower has not received any
notice that new wetlands areas have been designated on the Property
since the time the improvements were constructed, and (iii) no portion
of the Property necessary for the use and enjoyment of the improvements
contains any area designated as wetlands by any governmental authority
having jurisdiction;
(d) the Property is not located in a flood plain;
(e) the Property and improvements described in the Commitment are
legally occupied and do not violate any existing environmental,
building, zoning, use, Development of Regional Impact and concurrency
laws or other applicable laws, affecting Borrower or the Property with
which the failure to comply would have a material adverse effect on any
Building;
(f) Borrower has not received any notice that the Property is not in
compliance with the Americans with Disabilities Act;
(g) the Property is adequately served for the current use and operation
of the Property by public water and sewage systems and electricity,
with the exception of the Jacksonville/Bay Meadow property, which is
served by United Waterworks (a private utility regulated by the State
of Florida);
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<PAGE> 2
(h) all equipment and systems incorporated or to be incorporated into
the Improvements (including, but not limited to, all elevators,
security systems, energy management systems, heating, ventilating and
air conditioning systems, and escalators) shall be Year 2000 compliant.
As used herein, a piece of equipment or a system will be considered
Year 2000 compliant if such piece of equipment or system (1) is
designed to function normally prior to, during and after calendar year
2000 A.D., and (2) operates during each such time period without
failure or interruption caused by date data processing by any software,
embedded microprocessor or other component contained in or necessary to
the function thereof.
Koger Equity, Inc. acknowledges that The Northwestern Mutual Life
Insurance Company is relying upon the certifications contained herein in making
the Loan described in the Commitment.
All capitalized terms used herein shall have the meaning ascribed to
them in the Commitment.
Dated as of September 2, 1999 KOGER EQUITY, INC., a Florida
Corporation
By: /s/ G. DANNY EDWARDS
--------------------------------
Title: /s/ TREASURER
Attest: /s/ W. LAWRENCE JENKINS
-----------------------------
Title: /s/ CORPORATE SECRETARY
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AND VICE PRESIDENT
(Corporate seal)
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