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CONSTRUCTION LOAN MORTGAGE,
SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FINANCING STATEMENT
THIS CONSTRUCTION
LOAN MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FINANCING STATEMENT (“Mortgage”) is made as
of December 19, 2006, by CARDINAL ETHANOL, LLC, an Indiana
limited liability company (“Mortgagor”), whose address
is 2 OMCO Square, Suite 201, P.O. Box 501, Winchester, Indiana
47394 in favor of FIRST NATIONAL BANK OF OMAHA, a National Banking
Association (“Mortgagee”), whose address is 1620 Dodge
Street, Stop 1050, Omaha, Nebraska 68197-1050.
A. Mortgagor
and Mortgagee have entered into that certain Construction Loan
Agreement dated of even date herewith (as the same may be modified,
amended or restated from time to time, the “Loan
Agreement”), pursuant to which Mortgagee has extended to
Mortgagor (i) a Construction Loan in the maximum principal
amount of $83,000,000.00 evidenced by a Construction Note of even
date herewith, (ii) a revolving line of credit in the maximum
principal amount of $10,000,000.00 evidenced by a Revolving Note of
even date herewith, (iii) a promissory note of even date
herewith supporting the issuance, for the account of Mortgagor, of
letters of credit up to a maximum amount outstanding of
$3,000,000.00 and (iv) Swap Contracts with an additional
exposure to Mortgagee, with the Construction Note available to be
permanently financed by the Fixed Rate Note, Variable Rate Note and
Long Term Revolving Note (as such terms are defined in the Loan
Agreement) all as more fully described in the Loan Agreement. The
foregoing financial accommodations and credit facilities shall be
collectively referred to in this Mortgage as the
“Loans”. The total principal amount secured by this
Mortgage is $101,602,500.00, or so much thereof as may have been
advanced and/or readvanced now or in the future at variable and/or
fixed rates of interest to or for the benefit of the Mortgagee
and
remains unpaid
from time to time, plus the amount of any protective advances made
by Mortgagee as provided for in this Mortgage or any other Loan
Document.
B. The Loans
are payable and to be performed in accordance with the terms of the
notes evidencing the same and the Loan Agreement, with the entire
unpaid balance of the Loans to mature and be due and payable in
full not later than April 8, 2014 (the “Maturity
Date”), unless extended by Mortgagor and
Mortgagee.
C. Mortgagor
has agreed to mortgage the Mortgaged Property (as herein defined)
to Mortgagee to secure the Loans and the Obligations (as defined
below).
D. The
obligations secured by this Mortgage (the
“Obligations”) are as follows:
(i) the Loans,
including without limitation, future advances made by Mortgagee to
Mortgagor, Mortgagor’s obligations in respect of the due and
punctual payment of principal and interest on the Loans when and as
due, whether by acceleration or otherwise and all fees, expenses,
indemnities, reimbursements, guaranties and other obligations of
Mortgagor under the Loans, Loan Agreement and the other Loan
Documents, in all cases whether now existing or hereafter arising
or incurred;
(ii) all other
amounts payable by Mortgagor under the Loans, Loan Agreement or
other Loan Documents as the same now exist or may hereafter be
amended; and
(iii) all
obligations of Mortgagor under this Mortgage, including, but not
limited to, any protective advances advanced by Mortgagee under
this Mortgage to protect and preserve the Mortgaged Property and
the lien and security interest created by this Mortgage.
Pursuant to I.C.
32-29-1-10, the Obligations include, and this Mortgage secures,
future obligations and advances under the Loans and protective
advances made under this Mortgage or the Loan Documents and future
modifications, extensions and renewals of the Loans and Obligations
secured by this Mortgage.
NOW, THEREFORE,
Mortgagor, in consideration of the Mortgagee advancing the Loans
and making such funds available to Mortgagor, and to secure the
payment and performance of the Obligations, hereby irrevocably and
unconditionally MORTGAGES AND WARRANTS to Mortgagee, its successors
and assigns, forever, with right of entry and possession, and
grants to Mortgagee, its successors and assigns, a mortgage and
security interest in the land and any buildings, plants, facilities
or improvements of any kind (collectively,
“Improvements”), now existing or hereafter constructed
or placed thereon, described in Exhibit A attached
hereto and all mineral rights, hereditaments, easements and
appurtenances thereto (collectively the “Land”), along
with all the following, all of which together with the Land is
called the “Mortgaged Property” in this
Mortgage:
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(a) All and
singular the tenements, hereditaments, servitudes, easements,
appurtenances, passages, rights of ingress and egress, licenses,
permits, development rights, rights of use or occupancy, waters,
water courses, all of Mortgagor’s rights and interests under
federal, state and local laws to all water and rights, permits or
licenses to use or discharge water, riparian rights, mineral
rights, sewer rights, rights in trade names, licenses, permits and
contracts, and all other rights, liberties and privileges of any
kind or character in any way now or hereafter appertaining,
relating or applicable to the Land or any Improvements thereon,
including but not limited to, homestead and any other claim at law
or in equity as well as any after-acquired title, franchise or
license and the reversion and reversions and remainder and
remainders thereof;
(b) The land lying
within any street, alley, avenue, roadway or right-of-way open or
proposed or hereafter vacated in front of or adjoining the Land;
and all right, title and interest, if any, of Mortgagor in and to
any strips and gores adjoining or used in connection with the
Land;
(c) All
agreements, ground leases, grants of easements or rights-of-way,
permits, declarations of easements, conditions or restrictions,
disposition and development agreements, planned unit development
agreements, plats, subdivision plans, permits and approvals, and
all other documents affecting the Land and/or
Improvements;
(d) All right,
title and interest of Mortgagor in any and all buildings and
improvements of every kind and description now or hereafter erected
or placed on the said Land and all materials intended for
construction, reconstruction, alteration and repairs of such
buildings and improvements now or hereafter erected thereon, all of
which materials shall be deemed to be included within the Mortgaged
Property immediately upon the delivery thereof to the Mortgaged
Property or upon any earlier acquisition thereof by Mortgagor, and
all fixtures now or hereafter owned by Mortgagor and attached to or
contained in and used or acquired for use in connection with the
Mortgaged Property including, but not limited to, all heating,
lighting, refrigerating, ventilating, air-conditioning,
air-cooling, fire extinguishing, plumbing, cleaning, telephone,
communications and power equipment, systems and apparatus; and all
elevators, switchboards, motors, pumps, screens, awnings, floor
coverings , cabinets, partitions, conduits, ducts and
compressors; and all cranes and craneways, oil storage,
sprinkler/fire protection and water service equipment; and also
including any of such property stored on the Land or Improvements
or in warehouses and intended to be used in connection with or
incorporated into the Land or Improvements or for the pursuit of
any other activity in which Mortgagor may be engaged on the Land or
Improvements, and including without limitation all tools, cabinets,
awnings, window shades, venetian blinds, drapes and drapery rods
and brackets, screens, carpeting and other window and floor
coverings, decorative fixtures, plants, cleaning apparatus, and
cleaning equipment, refrigeration equipment, generators, cables,
telecommunication cables, antennas and systems, computers,
software, books, supplies, kitchen equipment, appliances, tractors,
lawn mowers, ground sweepers and tools, together with all
substitutions, accessions, repairs, additions and replacements to
any of the foregoing and all other items of furniture, furnishings,
equipment and personal property owned by Mortgagor used
or
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useful in the
operation of the Mortgaged Property, including, but not limited to,
such equipment and personal property used in the production of
ethanol and the treatment and storage thereof and in any
byproducts; and all renewals or replacements of all of the
aforesaid property owned by Mortgagor or articles in substitution
therefor, whether or not the same are or shall be attached to said
buildings or improvements in any manner; it being mutually agreed,
intended and declared that all the aforesaid property owned by
Mortgagor and placed by it on the Land or Improvements or used or
acquired for use in connection with the operation or maintenance of
the Mortgaged Property shall, so far as permitted by law, be deemed
to form a part and parcel of the Land and for the purpose of this
Mortgage to be Land and covered by this Mortgage, and as to any of
the property aforesaid which does not form a part and parcel of the
Land or does not constitute a “fixture” (as such term
is defined in the UCC, defined below) this Mortgage is hereby
deemed to be, as well, a security agreement under the UCC for the
purpose of creating hereby a security interest in such property
which Mortgagor hereby grants to Mortgagee as secured party, and
all inventory, office supplies, machinery, apparatus, systems and
equipment used or useful in the production of ethanol at the
Mortgaged Property, all as now owned or hereafter acquired by
Mortgagor;
(e) All leases of
the Land or Improvements or any part thereof, whether now existing
or hereafter entered into (the “Leases”), and all
right, title and interest of Mortgagor thereunder, including rents,
cash and security deposits under any such Leases and all guaranties
of any Tenant’s obligations under any such Leases or other
similar supports of a Tenant’s obligations under a
Lease;
(f) Any and all
awards, payments or insurance proceeds, including interest and
unearned premiums thereon, and the right to receive the same, which
may be paid or payable with respect to the Land or Improvements or
other properties described above as a result of: (1) the exercise
of the right of eminent domain or action in lieu thereof; or
(2) the alteration of the grade of any street; or (3) any
fire, casualty, accident, damage or other injury to or decrease in
the value of the Land or Improvements or other properties described
above, to the extent of all amounts which may be secured by this
Mortgage at the date of receipt of any such award or payment by
Mortgagor or Mortgagee, and of the reasonable counsel fees, costs
and disbursements incurred by Mortgagor or Mortgagee in connection
with the collection of such award, payment or proceeds. Mortgagor
agrees to execute and deliver, from time to time, such further
instruments as may be requested by Mortgagee to confirm such
assignment to Mortgagee of any such award, payment or
proceeds;
(g) All licenses,
permits (including, but not limited to, building permits),
authorizations, certificates, variances, consents, approvals and
other permits or licenses now or hereafter acquired pertaining to
the Land or any Improvements thereon or which relate to the
construction of the Improvements and/or the use, occupancy,
development, leasing, operation or servicing of the Land,
including, but not limited to air and water discharge permits,
environmental permits and licenses required for the production,
storage and/or transport of ethanol and its byproducts, above
ground storage tank licenses and permits, and all estate, right,
title and interest of Mortgagor in, to, under or derived
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from all
present or future development, construction, operation or use of
the Land or any improvements thereon;
(h) All intangible
personal property relating to the Land and/or Improvements,
business records, trade names, trademarks, service marks, logos,
claims for refunds or rebates of taxes, tax abatements, tax
credits, money, deposit accounts, accounts and general and payment
intangibles;
(i) Any and all
water and water rights, minerals, oil, gas, or any rights
thereto;
(j) Together with
all plans, drawings and specifications relating to the Mortgaged
Property and the construction of the Improvements, all permits,
consents, approvals, licenses, authorizations and other rights
granted by, given by or obtained from any governmental entity with
respect to the Mortgaged Property; and all other interests of every
kind and character that Mortgagor now has or at any time hereafter
acquires in and to the Mortgaged Property;
(k) All studies,
tests, investigations, and reports of any kind relating to the
soils or conditions of the soils of the Land and the suitability of
the soils for the construction of the Improvements, all mechanical
or structural studies, grading plans, drainage studies, and plans
and other similar studies, plans, drawings, or reports of any
nature relating to the construction of the Improvements;
(l) All management
contracts, service contracts, operating agreements, variances and
permits relating to the Land and/or Improvements;
(m) All
after-acquired title to or remainder or reversion of any of the
foregoing, all and any proceeds of any of the foregoing, all and
any additions, accessions and extensions to, improvements of and
substitutions and replacements of any of the foregoing and all
additional lands, estates, interests, rights, or other property
acquired by Mortgagor after the date of this Mortgage, all without
need for any additional mortgage, assignment, pledge, or conveyance
to Mortgagee but Mortgagor will execute and deliver to Mortgagee
upon Mortgagee’s request any documents or instruments to
further effect or evidence the foregoing; and
(n) Together with
the right in the case of foreclosure hereunder of the encumbered
property for Mortgagee to take and use the name by which the
buildings and all other improvements situated on the Land are
commonly known and the right to manage and operate the said
buildings under any such name and variants thereof;
Subject only to
the Permitted Encumbrances (as herein defined) and to secure
payment of the Obligations.
The parties intend
the definition of Mortgaged Property to be broadly construed and in
the case of doubt as to whether a particular item is to be included
in the definition of Mortgaged Property, the doubt shall be
resolved in favor of inclusion.
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TO HAVE AND TO
HOLD the same, and all estate therein, together with all the
rights, privileges and appurtenances thereunto belonging, to the
use and benefit of Mortgagee, its successors and assigns,
forever.
PROVIDED
NEVERTHELESS, should the Obligations be paid and performed, then
these presents will be of no further force and effect, and this
Mortgage shall be satisfied by Mortgagee, at the expense of
Mortgagor.
This Mortgage also
constitutes a security agreement within the meaning of the Uniform
Commercial Code as in effect in the State of Indiana (the
“UCC”), with respect to all property described herein
as to which a security interest may be granted and/or perfected
pursuant to the UCC, and is intended to afford Mortgagee, to the
fullest extent allowed by law, the rights and remedies of a secured
party under the UCC.
MORTGAGOR FURTHER
agree as follows:
Section 1.1
Performance of Obligations; Incorporation by Reference .
Mortgagor shall pay and perform the Obligations when due. Time is
of the essence hereof. All of the covenants, obligations,
agreements, warranties and representations of Mortgagor contained
in this Agreement, the Loan Agreement and the other Loan Documents
and all of the terms and provisions thereof, are hereby
incorporated herein and made a part hereof by reference as if fully
set forth herein.
Section 1.2
Further Assurances . If Mortgagee requests, Mortgagor shall
sign and deliver and cause to be recorded as Mortgagee shall direct
any further mortgages, amendments of or supplements to this
Mortgage, instruments of further assurance, certificates and other
documents as Mortgagee reasonably may consider necessary or
desirable, and shall do such acts reasonably required by Mortgagee,
in order to attach, perfect, continue and preserve the Obligations
and Mortgagee’s rights, title, estate, liens and interests
under the Loan Documents. Mortgagor further agrees to pay to
Mortgagee, upon demand, all costs and expenses incurred by
Mortgagee in connection with the preparation, execution, recording,
filing and refiling of any such documents, including reasonable
attorneys’ fees.
Section 1.3
Sale, Transfer, Encumbrance . If Mortgagor sells, conveys,
transfers or otherwise disposes of, or encumbers, any part of its
interest (legal or beneficial) in the Mortgaged Property, whether
directly or indirectly, voluntarily, involuntarily or by operation
of law (except for Permitted Encumbrances) except as permitted by
the Loan Agreement, without the prior written consent of Mortgagee,
Mortgagee shall have the option to declare the Obligations
immediately due and payable immediately upon notice. Included
within the foregoing actions requiring prior written consent of
Mortgagee are: (a) sale by deed or contract for deed; (b)
mortgaging or granting a lien on the Mortgaged Property; and
(c) a change of control in 50% or more of the equity interest
or voting power or control of Mortgagor.
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Mortgagor shall
give notice of any proposed action effecting any of the foregoing
to Mortgagee for Mortgagee’s consent at least thirty
(30) days prior to taking such action. Mortgagor shall pay all
reasonable costs and expenses incurred by Mortgagee in evaluating
any such action. Mortgagee may condition its consent upon
reasonable modification of the Loan Documents or payment of
reasonable fees. No such action shall relieve Mortgagor from
liability for the Obligations as set forth herein. The consent by
Mortgagee to any action shall not constitute a waiver of the
necessity of such consent to any subsequent action.
Section 1.4
Insurance . Mortgagor shall obtain, maintain and keep in
full force and effect and shall furnish to Mortgagee copies of
policies of insurance as described in, and meeting the requirements
set forth in, the Loan Agreement. At least ten (10) days prior
to the termination of any such coverage, Mortgagor shall provide
Mortgagee with evidence satisfactory to Mortgagee that such
coverage will be renewed or replaced upon termination with
insurance that complies with the provisions of this Section and the
Loan Agreement. Mortgagor, at its sole cost and expense, from time
to time when Mortgagee shall so request, will provide Mortgagee
with evidence, in a form acceptable to Mortgagee, of the full
insurable replacement cost of the Mortgaged Property. All property
and liability insurance policies maintained by Mortgagor pursuant
to this Section and the Loan Agreement shall (i) include
effective waivers by the insurer of all claims for insurance
premiums against Mortgagee, and (ii) provide that any losses
shall be payable notwithstanding (a) any act of negligence by
Mortgagor or Mortgagee, (b) any foreclosure or other
proceedings or notice of foreclosure sale relating to the Mortgaged
Property, or (c) any release from liability or waiver of
subrogation rights granted by the insured. In addition, all
policies of casualty insurance shall contain standard
noncontributory mortgagee loss payable clauses to Mortgagee, and
the comprehensive general liability and other liability policies
required in the Loan Agreement, including environmental or
pollution policies, shall name Mortgagee as an additional
insured.
Section 1.5
Taxes, Liens and Claims, Utilities . Mortgagor shall pay and
discharge when due, or cause to be paid and discharged when due,
all taxes, assessments and governmental charges and levies
(collectively “Impositions”) imposed upon or against
the Mortgaged Property or the Rents, or upon or against the
Obligations, or upon or against the interest of Mortgagee in the
Mortgaged Property or the Obligations, except Impositions measured
by the income of Mortgagee. Mortgagor shall provide evidence of
such payment at Mortgagee’s request. Mortgagor shall keep the
Mortgaged Property free and clear of all liens (including, but not
limited to, mechanics’ liens), encumbrances, easements,
covenants, conditions, restrictions and reservations (collectively
“Liens”) except those set forth in
Exhibit B attached hereto and made a part hereof (the
“Permitted Encumbrances”). Mortgagor shall pay or cause
to be paid when due all charges or fees for utilities and services
supplied to the Mortgaged Property. Notwithstanding anything to the
contrary contained in this Section, Mortgagor shall not be required
to pay or discharge any Imposition or Lien other than a
mechanics’ lien so long as Mortgagor shall in good faith, and
after giving notice to Mortgagee, contest the same by appropriate
legal proceedings. If Mortgagor contests any Imposition or Lien
against the Mortgaged Property, Mortgagor shall provide such
security to Mortgagee as Mortgagee shall reasonably require against
loss or impairment of Mortgagor’s ownership of or
Mortgagee’s lien on the Mortgaged Property and shall in any
event pay such Imposition or Lien before loss or impairment
occurs.
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Section 1.6
Escrow Payments . If requested by Mortgagee after the
occurrence of an Event of Default, Mortgagor shall deposit with
Mortgagee monthly on the first day of each month the amount
reasonably estimated by Mortgagee to be necessary to enable
Mortgagee to pay, at least five (5) days before they become
due, all Impositions against the Mortgaged Property and the
premiums upon all insurance required hereby to be maintained with
respect to the Mortgaged Property. All funds so deposited shall
secure the Obligations. Any such deposits shall be held by
Mortgagee, or its nominee, in a non-interest bearing account and
may be commingled with other funds. Such deposits shall be used to
pay such Impositions and insurance premiums when due. Any excess
sums so deposited shall be retained by Mortgagee and shall be
applied to pay said items in the future, unless the Obligations
have been paid and performed in full, in which case all excess sums
so paid shall be refunded to Mortgagor. Upon the occurrence of an
Event of Default, Mortgagee may apply any funds in said account
against the Obligations in such order as Mortgagee may determine in
Mortgagee’s sole discretion.
Section 1.7
Maintenance and Repair; Compliance with Laws . Mortgagor
shall cause the Mortgaged Property to be operated, maintained and
repaired in safe and good repair, working order and condition,
reasonable wear and tear excepted; shall not commit or permit waste
thereof; except as provided in any Loan Document, shall not remove,
demolish or substantially alter the design or structural character
of any Improvements without the prior written consent of Mortgagee;
shall complete or cause to be completed forthwith any Improvements
which are now or may hereafter be under construction upon the Land;
shall materially comply or cause material compliance with all laws,
statutes, ordinances and codes, and governmental rules,
regulations, requirements and permits and licenses, applicable to
the Mortgaged Property or the manner of using or operating the
same, and with any covenants, conditions, restrictions and
reservations affecting the title to the Mortgaged Property, and
with the terms of all insurance policies relating to the Mortgaged
Property; and shall obtain and maintain in full force and effect
all consents, permits and licenses necessary for the use and
operation of the Mortgaged Property in Mortgagor’s business.
Mortgagor shall obtain and maintain in full force and effect all
certificates, licenses, permits and approvals that are required by
law or necessary for the construction of the Improvements or the
use, occupancy or operation of the Project. Mortgagor shall
promptly notify Mortgagee in writing of the receipt by Mortgagor of
any notice relating to the violation or allegation or claim of
violation of any applicable laws, licenses or permits and of the
commencement or threatened commencement of any proceedings or
investigations which relate to compliance with applicable laws,
permits or licenses. Subject to the provisions of this Mortgage
with respect to insurance proceeds and condemnation awards,
Mortgagor shall promptly repair, restore and rebuild any
Improvements now or hereafter on the Mortgaged Property which may
become damaged or destroyed, such Improvements to be of at least
equal value and quality and of substantially the same character as
prior to such damage or destruction.
(a) Notwithstanding
anything to the contrary herein, Mortgagor shall not enter into any
Lease without Mortgagee’s prior written consent, and shall
furnish to Mortgagee, upon execution, a complete and fully executed
copy of each Lease. Mortgagor shall provide Mortgagee with a copy
of each proposed Lease requiring the consent of Mortgagee and with
any
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information
requested by Mortgagee regarding the proposed Tenant thereunder.
Mortgagee may declare each Lease to be prior or subordinate to this
Mortgage, at Mortgagee’s option.
(b) Mortgagor
shall, at its cost and expense, perform each obligation to be
performed by the landlord under each Lease; not borrow against,
pledge or further assign any rents or other payments due
thereunder; not permit the prepayment of any rents or other
payments due for more than one (1) month in advance; and not permit
any Tenant to assign its Lease or sublet the premises covered by
its Lease, unless required to do so by the terms thereof and then
only if such assignment does not work to relieve the Tenant of any
liability for performance of its obligations thereunder.
(c) If
any Tenant shall default under its Lease, Mortgagor shall, in the
ordinary course of business, exercise sound business judgment with
respect to such default, but may not discount, compromise, forgive
or waive claims or discharge the Tenant from its obligations under
the Lease or terminate or accept a surrender of the Lease without
the prior written consent of Mortgagee.
(d) If
Mortgagor fails to perform any obligations of Mortgagor under any
Lease or if Mortgagee becomes aware of or is notified by any Tenant
of a failure on the part of Mortgagor to so perform, Mortgagee may,
but shall not be obligated to, without waiving or releasing
Mortgagor from any Obligation, remedy such failure, and Mortgagor
agrees to repay upon demand all sums incurred by Mortgagee in
remedying any such failure, together with interest thereon from the
date incurred at an annual rate equal to nine percent (9%) in
excess of the one month LIBOR Rate (as set forth and defined in the
Loan Agreement).
(e) For
purposes of this Mortgage, the following terms shall have the
following meanings:
(i) “
Lease ”: Any lease, occupancy agreement or other
document or agreement, written or oral, permitting any Person to
use or occupy any part of the Mortgaged Property.
(ii) “
Person ”: Any natural person, corporation,
partnership, limited partnership, limited liability company, joint
venture, firm, association, trust, unincorporated organization,
government or governmental agency or political subdivision or any
other entity, whether acting in an individual, fiduciary or other
capacity.
(iii) “
Tenant ”: Any person or party using or occupying any
part of the Mortgaged Property pursuant to a Lease.
Section 1.9
Indemnity . Mortgagor shall reimburse, indemnify and defend
Mortgagee and its participants and their respective directors,
officers, attorneys, agents and employees (collectively the
“Indemnified Parties”) against, and hold the
Indemnified Parties harmless from, all losses, damages, suits,
claims, judgments, penalties, fines, liabilities, costs and
expenses by reason of, or on account of, or in connection with the
construction, reconstruction or alteration of the Mortgaged
Property during Mortgagor’s ownership thereof, the use and
operation of
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Mortgagor’s business on the Land,
Mortgagor’s failure to operate Mortgagor’s business on
the Mortgaged Property in compliance with all applicable laws and
permits and licenses, Mortgagor’s breach of Mortgagor’s
obligations under this Mortgage, the Loan Agreement or any other
Loan Document, or any accident, injury, death or damage to any
person or property occurring in, on or about the Mortgaged Property
during Mortgagor’s ownership thereof, or any street, drive,
sidewalk, curb or passageway adjacent thereto, except to the extent
that the same results from the willful misconduct or gross
negligence of the person or party seeking indemnification. The
indemnity contained in this Section shall include costs of defense
of any such claim asserted against an Indemnified Party, including
reasonable attorneys’ fees. The indemnity contained in this
Section shall survive payment and performance of the Obligations
and satisfaction and release of this Mortgage and any foreclosure
thereof or acquisition of title by deed in lieu of foreclosure.
Notwithstanding the foregoing, Mortgagor’s liability
hereunder shall terminate at such time as a private or governmental
plaintiff is barred by the applicable statute of limitations from
bringing a claim for the actions giving rise to Mortgagee’s
claim for indemnification hereunder.
Section 1.10
Assignment of Leases and Rents .
(a) As
additional security for the indebtedness secured by this Mortgage,
Mortgagor does hereby bargain, sell, assign, transfer and set over
unto Mortgagee all Leases and all the rents, fees, issues, profits,
revenues, royalties and other income of any kind
(“Rents”) which, whether before or after foreclosure,
or during the full statutory period of redemption, if any, shall
accrue and be owing for the use or occupation of the Mortgaged
Property or any part thereof. So long as no Event of Default exists
under this Mortgage, Mortgagor shall have a revocable license to
collect, but not more than one (1) month in advance under any
Lease, all Rents earned prior to default. This Mortgage constitutes
an absolute, irrevocable, currently effective assignment of Rents
and profits. Mortgagor hereby appoints Mortgagee Mortgagor’s
true and lawful attorney-in-fact with full power of substitution to
demand, collect and receive any and all Rents which may be or
become due and payable by Tenants after the occurrence of any Event
of Default, which appointment is coupled with an interest and is
irrevocable. Mortgagee may, at its discretion, file any claim or
take any action to collect and enforce the payment of Rents, either
in Mortgagee’s name or Mortgagor’s name or otherwise.
Tenants are hereby expressly authorized and directed by Mortgagor
to pay to Mortgagee all Rents upon Mortgagee’s demand, and
such Tenants are hereby expressly relieved of any and all duty,
obligation or liability to Mortgagor in respect of any Rents so
paid to Mortgagee.
(b) If,
at any time after an Event of Default hereunder, in the sole
discretion of Mortgagee, a receivership may be necessary to protect
the Mortgaged Property or its Rents, whether before or after
maturity of any Loan and whether before or at the time of or after
the institution of suit to collect such indebtedness, or to enforce
this Mortgage, Mortgagee, as a matter of strict right and
regardless of the value of the Mortgaged Property or the amounts
due hereunder or secured hereby, or of the solvency of any party
bound for the payment of such indebtedness, shall have the right to
the appointment of a receiver to take charge of, manage, preserve,
protect, rent and operate the Mortgaged Property, to collect the
Rents thereof, to make all necessary and needful repairs, and to
pay all Impositions against the Mortgaged Property and all premiums
for insurance thereon, and to do such other acts as may by such
court be
10
authorized and
directed, and after payment of the expenses of the receivership and
the management of the Mortgaged Property, to apply the net proceeds
of such receivership in reduction of the Obligations and
indebtedness secured hereby or in such other manner as the said
court shall direct notwithstanding the fact that the amount owing
thereon may not then be due and payable or the said Obligations and
indebtedness is otherwise adequately secured. Such receivership
shall, at the option of Mortgagee, continue until full payment of
all sums hereby secured or until title to the Mortgaged Property
shall have passed by sale under this Mortgage.
(c) The
reasonable costs and expenses (including any receiver’s fees
and reasonable attorneys’ fees) incurred by Mortgagee
pursuant to the powers herein contained shall be reimbursed by
Mortgagor to Mortgagee on demand as promptly as practicable, shall
be secured hereby and shall bear interest from the date incurred at
an annual rate equal to nine percent (9%) in excess of the one
month LIBOR Rate (as set forth in the Loan Agreement). Mortgagee
shall not be liable to account to Mortgagor for any action taken
pursuant hereto, other than to account for any Rents, fees, issues,
revenues, profits or proceeds actually received by
Mortgagee.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
Mortgagor
represents and warrants to Mortgagor and covenants with Mortgagor
as follows:
Section 2.1
Ownership, Liens, Compliance with Laws . Mortgagor owns the
Mortgaged Property free from all Liens, except the Permitted
Encumbrances and has good and marketable fee simple title to the
Mortgaged Property. To the best of Mortgagor’s knowledge, all
applicable zoning, environmental, land use, subdivision, building,
fire, safety and health laws, statutes, ordinances, codes, rules,
regulations and requirements affecting the Mortgaged Property
permit the current use and occupancy thereof and Mortgagor’s
intended use and occupancy of the Mortgaged Property upon
substantial completion of the Project, and Mortgagor has
obtain
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