Prepared by,
recording requested by and,
after recording, return to:
Andrew P.
Romshek, Esq.
Kutak Rock LLP
The Omaha Building
1650 Farnam Street
Omaha, NE 68102
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FILING
THIS MORTGAGE,
SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE
FILING is made as of June 1, 2008 (this
“Instrument”), by the Mortgagor, LTF REAL ESTATE
VRDN I, LLC , a Delaware limited liability company, whose
mailing address is 2902 Corporate Place, Chanhassen, MN 55317
(“Mortgagor”), in favor of and for the benefit of the
Mortgagee, GENERAL ELECTRIC CAPITAL CORPORATION , a Delaware
corporation, whose mailing address is Suite 470, 8400
Normandale Lake Boulevard, Minneapolis, Minnesota 55437
(“Mortgagee”).
THAT, WHEREAS,
Mortgagor is justly indebted to Mortgagee in the principal sum of
$35,090,875 pursuant to that certain Reimbursement Agreement (as
defined below); and
THAT, WHEREAS, the
maximum principal amount secured by this Instrument is $17,896,346,
plus interest and protective advances;
NOW, THEREFORE,
Mortgagor, in consideration of the indebtedness herein recited, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, irrevocably grants,
conveys, mortgages, warrants and assigns to Mortgagee, as security
for such indebtedness, all of Mortgagor’s estate, right,
title and interest, now owned or hereafter acquired, including any
reversion or remainder interest, in the real property located
in
the City of
Overland Park, County of Johnson, State of Kansas described on
Exhibit A attached hereto and incorporated herein
including all heretofore or hereafter vacated alleys and streets
abutting the property, and all easements, rights, appurtenances,
tenements, hereditaments, rents, royalties, mineral, oil and gas
rights and profits, water, water rights and water stock appurtenant
to the property (collectively “Premises”);
TOGETHER with all
of Mortgagor’s estate, right, title and interest, now owned
or hereafter acquired, in, under and to:
(a) all
buildings, structures, improvements, parking areas, landscaping,
equipment, fixtures and articles of property now or hereafter
erected on or attached to the Premises; including, but without
being limited to, all heating, air conditioning, manufacturing and
incinerating apparatus and equipment; all boilers, engines, motors,
dynamos, generating equipment, piping and plumbing fixtures, water
heaters, walk-in refrigerators and freezers, cooling, ventilating,
sprinkling and vacuum cleaning systems, fire extinguishing
apparatus, gas and electric fixtures, carpeting, floor coverings,
underpadding, elevators, escalators, partitions, mantels, built-in
mirrors, window shades, blinds, draperies, screens, storm sash,
awnings, signs, and outdoor shrubbery and plants, and including
also all interest of any owner of the Premises in any of such items
hereafter at any time acquired under conditional sale contract,
chattel mortgage or other title retaining or security instrument,
all of which property mentioned in this clause (a) shall be
deemed part of the realty covered by this Instrument and not
severable wholly or in part without material injury to the freehold
of the Premises (all of the foregoing together with replacements
and additions thereto are referred to herein as
“Improvements”); and
(b) all
compensation, awards, damages, rights of action and proceeds,
including interest thereon and/or the proceeds of any policies of
insurance therefor, arising out of or relating to a (i) taking
or damaging of the Premises or Improvements thereon by reason of
any public or private improvement, condemnation proceeding
(including change of grade), sale or transfer in lieu of
condemnation, or fire, earthquake or other casualty, or
(ii) any injury to or decrease in the value of the Premises or
the Improvements for any reason whatsoever;
(c) proceeds
under any insurance any time provided with respect to the Premises,
Improvements and other collateral described herein for the benefit
of or naming Mortgagee and refunds or rebates of taxes or
assessments on the Premises;
(d) all
written and oral leases and rental agreements (including, without
limitation, that certain Lease Agreement dated June 13, 2008
(the “Lease Agreement”) between Mortgagor and LTF Club
Operations Company, Inc. (“Tenant”)) (including
extensions, renewals and subleases; each of the foregoing
singularly shall be referred to herein as a “Lease,”
and all of the foregoing shall be referred to collectively herein
as the “Leases”) now or hereafter affecting the
Premises including, without limitation, all rents, issues, income,
profits and other revenues and income therefrom and from the
renting, leasing or bailment of Improvements and equipment
(“Rents”), all guaranties of tenants’ performance
under the Leases (including, without limitation, all rights, title
and interest in that certain Lease Guaranty and Negative Pledge
Agreement dated as of June 1, 2008 by Life Time Fitness,
Inc.), all letter-of-credit rights and all other supporting
obligations associated with the Leases and all rights and claims of
any kind that Mortgagor may
2
have against
any tenant under the Leases or in connection with the termination
or rejection of the Leases in a bankruptcy or insolvency
proceeding;
(e) to the
extent assignable without third party consents, plans,
specifications, documents, contracts and agreements relating to the
design or construction of the Improvements; Mortgagor’s
rights under any payment, performance, or other bond in connection
with the design or construction of the Improvements; all
landscaping and construction materials, supplies, and equipment
used or to be used or consumed in connection with construction of
the Improvements, whether stored on the Premises or at some other
location; and contracts, agreements, and purchase orders with
contractors, subcontractors, suppliers, and materialmen incidental
to the design or construction of the Improvements;
(f) to the
extent permitted by applicable law and to the extent assignable
without third party consents, all contracts, deposits, deposit
accounts, accounts, rights, claims or causes of action pertaining
to or affecting the Premises or the Improvements, including,
without limitation, all supporting obligations and any and all
proceeds thereof, options or contracts to acquire other property
for use in connection with operation or development of the Premises
or Improvements, management contracts, service or supply contracts,
permits, licenses, franchises and certificates with respect to the
Premises and Improvements, and all commitments or agreements, now
or hereafter in existence with respect to the Premises and
Improvements, intended by the obligor thereof to provide Mortgagor
with proceeds to satisfy the obligations evidenced hereby or
improve the Premises or Improvements, and the right to receive all
proceeds due under such commitments or agreements including
refundable deposits and fees;
(g) all
books, records, surveys, reports and other documents related to the
Premises, the Improvements, the Leases or other items of collateral
described herein; and
(h) all
additions, accessions, replacements, substitutions, proceeds and
products of the real and personal property, tangible and
intangible, described herein.
All of the
foregoing described collateral is exclusive of any goods,
equipment, inventory, furniture, furnishings or trade fixtures
owned and supplied by tenants or subtenants of the Premises. The
Premises, the Improvements, the Leases and all of the rest of the
foregoing property are herein referred to as the
“Property.”
TO HAVE AND TO
HOLD the Property and all parts, rights, members and appurtenances
thereof to the use, benefit and behoof of Mortgagee and its
successors and assigns in fee simple forever.
TO SECURE TO
Mortgagee (a) the repayment of the obligations under the
Reimbursement Agreement dated as of June 1, 2008 (as amended,
the “Reimbursement Agreement”) by and among Mortgagor,
Mortgagee and GE Government Finance, Inc., in the aggregate
principal sum of up to $35,090,875, of which $17,896,346 is secured
by this Instrument, and all renewals, extensions and modifications
thereof; (c) the repayment of any future advances, with
interest thereon, made by Mortgagee to Mortgagor pursuant to
Section 30 hereof (the “Future Advances”);
(d) the payment of all other sums, with interest thereon,
advanced in accordance herewith to protect the security of this
Instrument or to fulfill any of
3
Mortgagor’s obligations hereunder or under
the other Financing Documents (as defined below); (e) the
performance of the covenants and agreements of Mortgagor contained
herein or in the other Financing Documents; and (f) the
repayment of all sums now or hereafter owing to Mortgagee by
Mortgagor pursuant to any instrument which recites that it is
secured hereby. The indebtedness and obligations described in
clauses (a)-(f) above are collectively referred to herein as
the “Indebtedness.” The Reimbursement Agreement, this
Instrument, and all other documents evidencing, securing or
guaranteeing the Indebtedness (except the Environmental Indemnity
Agreement Regarding Hazardous Substances), as the same may be
modified or amended from time to time, are referred to herein as
the “Financing Documents.” The obtaining of any
judgment by Mortgagee (other than a judgment foreclosing this
Instrument) and any levy of any execution under any such judgment
upon the Property shall not affect in any manner or to the extent
the lien of this Instrument upon the Property or any part thereof,
or any liens, powers, rights and remedies of Mortgagee hereunder,
but such liens, powers, rights and remedies shall continue
unimpaired as before until the judgment or levy is satisfied. The
terms of the Financing Documents secured hereby may provide that
the interest rate or payment terms or balance due may be indexed,
adjusted, renewed, or renegotiated from time to time, and this
Instrument shall continue to secure the Indebtedness
notwithstanding any such indexing, adjustment, renewal or
renegotiation. If not sooner paid, the Indebtedness secured by this
Instrument is due and payable in full on June 1,
2033.
Mortgagor
represents and warrants that Mortgagor has good, marketable and
insurable title to, and has the right to grant, convey and assign
an indefeasible fee simple estate in, the Premises, Improvements,
Rents and Leases, and the right to convey the other Property, that
the Property is unencumbered and that Mortgagor will warrant and
forever defend unto Mortgagee the title to the Property against all
claims and demands, subject only to the permitted exceptions set
forth in Exhibit B attached hereto (herein
“Permitted Exceptions”).
Mortgagor
represents, warrants, covenants and agrees for the benefit of
Mortgagee as follows:
Section 1.
Payment of Principal and Interest . Mortgagor shall
promptly pay or cause to be paid when due the principal of and
interest on the Indebtedness, any prepayment and other charges
provided in the Financing Documents and all other sums secured by
this Instrument.
Section 2.
Funds for Taxes, Insurance and Other Charges . Except
as is hereinafter provided with respect to the impounding of such
payments by Mortgagee following the occurrence of an Event of
Default (hereinafter defined), Mortgagor shall pay or cause to be
paid when due, prior to delinquency, all annual real estate taxes,
insurance premiums, assessments, water and sewer rates, ground
rents and other charges (the “Impositions”) payable
with respect to the Property. Upon the occurrence of an Event of
Default, and at Mortgagee’s sole option at any time
thereafter, Mortgagor shall pay in addition to each monthly payment
due under the Reimbursement Agreement, one-twelfth of the annual
Impositions (as estimated by Mortgagee in its sole discretion), to
be held by Mortgagee in escrow without interest to Mortgagor, for
the payment of such Impositions (such payments being referred to
herein as “Impounds”).
Annually during
the term of this Instrument, Mortgagee shall compare the Impounds
collected to the Impositions paid or to be paid. If the amount of
such Impounds held by
4
Mortgagee at
such time shall exceed the amount deemed necessary by Mortgagee to
provide for the payment of Impositions as they fall due, if no
Event of Default shall have occurred and be continuing, such excess
shall be at Mortgagor’s option, either repaid to Mortgagor or
credited to Mortgagor on the next monthly installment or
installments of Impounds due. If at any time the amount of the
Impounds held by Mortgagee shall be less than the amount deemed
necessary by Mortgagee to pay Impositions as they fall due,
Mortgagor shall pay to Mortgagee any amount necessary to make up
the deficiency within 30 days after notice from Mortgagee to
Mortgagor requesting payment thereof. Upon the occurrence of an
Event of Default hereunder, Mortgagee may apply, in any amount and
in any order as Mortgagee shall determine in Mortgagee’s sole
discretion, any Impounds held by Mortgagee at the time of
application (i) to pay Impositions which are now or will
hereafter become due, or (ii) as a credit against sums secured
by this Instrument. Upon payment in full of all sums secured by
this Instrument, Mortgagee shall refund to Mortgagor any Impounds
then held by Mortgagee.
Section 3.
Application of Payments . (a) Each installment
payment received by Mortgagee from Mortgagor under or with respect
to the Reimbursement Agreement or this Instrument or the other
Financing Documents shall be applied by Mortgagee to the
Indebtedness in such order as provided in the Financing
Documents.
(b) If
requested by Mortgagee, Mortgagor shall promptly furnish to
Mortgagee all notices of Impositions which become due, and in the
event Mortgagor shall make payment directly, Mortgagor shall
promptly furnish to Mortgagee receipts evidencing such
payments.
Section 4.
Charges, Liens . Mortgagor shall promptly discharge
any lien which has, or may have, priority over or equality with,
the lien of this Instrument, and Mortgagor shall pay, when due, the
claims of all persons supplying labor or materials to or in
connection with the Property. Mortgagor shall not allow any lien to
be perfected against the Property other than the Permitted
Exceptions set forth in Exhibit B attached hereto. If
any such lien is filed against the Property, Mortgagor shall
promptly, at its own expense, cause such lien to be released of
record or bonded off and to deliver evidence of such release or
bonding to Mortgagee. Mortgagor may contest any such lien by
appropriate proceedings in good faith, timely filed, provided that
enforcement of the lien is stayed pending such contest or Mortgagor
pays to Mortgagee 125% of the amount of the lien to be held by
Mortgagee in escrow without interest to Mortgagor. Mortgagee may
require that Mortgagor post security for payment of such
lien.
Section 5.
Insurance and Damage or Destruction of Property .
Mortgagor shall obtain and maintain the types of insurance upon and
relating to the Property as required by the Reimbursement
Agreement, and, upon the damage or destruction of the Property,
insurance proceeds shall be disbursed as provided in the
Reimbursement Agreement.
Section 8.
Protection of Mortgagee’s Security . If an
Event of Default shall have occurred and be continuing, or if any
action or proceeding is commenced which affects the Property or
title thereto or the interest of Mortgagee therein, including, but
not limited to,
5
eminent domain,
insolvency, code enforcement, or arrangements or proceedings
involving a bankrupt or decedent, then Mortgagee at
Mortgagee’s option may make such appearances, disburse such
sums and take such action as Mortgagee deems necessary, in its sole
discretion, to protect Mortgagee’s interest, including, but
not limited to (a) disbursement of reasonable attorneys’
fees, (b) entry upon the Property to make repairs and
(c) procurement of satisfactory insurance as provided in
Section 5 hereof.
Any amounts
disbursed by Mortgagee pursuant to this Section, with interest
thereon, shall become additional Indebtedness of Mortgagor secured
by this Instrument. Unless Mortgagor and Mortgagee agree to other
terms of payment, such amounts shall be immediately due and payable
and shall bear interest from the date of disbursement at the
Post-Default Rate (as defined in the Reimbursement Agreement).
Mortgagor hereby covenants and agrees that Mortgagee shall be
subrogated to the lien of any mortgage or other lien discharged, in
whole or in part, by the Indebtedness. Nothing contained in this
Section shall require Mortgagee to incur any expense or take any
action hereunder.
Section 9.
Inspection . Mortgagee may make or cause to be made
entries upon the Property to inspect the interior and exterior
thereof. Except in the case of emergency, such inspection shall be
with reasonable prior notice and shall in any case be with due
regard to rights of tenants.
Section 10.
Condemnation . If the Property, or any part thereof,
shall be condemned for any reason, including without limitation
fire or earthquake damage, or otherwise taken for public or
quasi-public use under the power of eminent domain, or be
transferred in lieu thereof, all damages or other amounts awarded
for the taking of, or injury to, the Property shall be paid and
applied as provided in the Reimbursement Agreement.
Section 11.
Mortgagor and Lien not Released . From time to time,
and subject to the requirements of the Reimbursement Agreement,
Mortgagee may, at Mortgagee’s option, without giving notice
to or obtaining the consent of Mortgagor, Mortgagor’s
successors or assigns or of any junior lienholder or guarantors,
without liability on Mortgagee’s part and notwithstanding
Mortgagor’s breach of any covenant or agreement of Mortgagor
in this Instrument, extend the time for payment of the Indebtedness
or any part thereof, reduce the payments thereon, release anyone
liable on any of the Indebtedness, accept an extension or
modification or renewal note or notes therefor, modify the terms
and time of payment of the Indebtedness, release from the lien of
this Instrument any part of the Property, take or release other or
additional security, reconvey any part of the Property, consent to
any map or plan of the Property, consent to the granting of any
easement, join in any extension or subordination agreement, and
agree in writing with Mortgagor to modify the rate of interest or
period of amortization of the obligations under the Reimbursement
Agreement or decrease the amount of the monthly installments
payable thereunder. Any actions taken by Mortgagee pursuant to the
terms of this Section shall not affect the obligation of Mortgagor
or Mortgagor’s successors or assigns to pay the sums secured
by this Instrument and to observe the covenants of Mortgagor
contained herein, shall not affect the guaranty of any person,
corporation, partnership or other entity for payment of the
Indebtedness, and shall not affect the lien or priority of the lien
hereof on the Property. Mortgagor shall pay
6
Mortgagee a
service charge, together with such title insurance premiums and
attorneys’ fees as may be incurred at Mortgagee’s
option, for any such action if taken at Mortgagor’s
request.
Section 12.
Forbearance by Mortgagee not a Waiver . Any
forbearance by Mortgagee in exercising any right or remedy
hereunder, or otherwise afforded by applicable law, shall not be a
waiver of or preclude the exercise of any other right or remedy.
The acceptance by Mortgagee of payment of any sum secured by this
Instrument after the due date of such payment shall not be a waiver
of Mortgagee’s right to either require prompt payment when
due of all other sums so secured or to declare a default for
failure to make prompt payment. The procurement of insurance or the
payment of taxes or other liens or charges by Mortgagee shall not
be a waiver of Mortgagee’s right to accelerate the maturity
of the Indebtedness secured by this Instrument, nor shall
Mortgagee’s receipt of any awards, proceeds or damages under
Sections 5 and 10 hereof operate to cure or waive
Mortgagor’s default in payment of sums secured by this
Instrument.
Section 13.
Uniform Commercial Code Security Agreement . This
Instrument is intended to be a security agreement pursuant to the
Uniform Commercial Code, as enacted in the State of Minnesota (the
“Uniform Commercial Code”) for any of the items
specified above as part of the Property which, under applicable
law, may be subject to a security interest pursuant to the Uniform
Commercial Code, and Mortgagor hereby grants and conveys to
Mortgagee a first and prior security interest in all of the
Property that constitutes personalty, whether now owned or
hereafter acquired. Mortgagor agrees that Mortgagee may file this
Instrument, or a reproduction thereof, in the real estate records
or other appropriate index, as a financing statement for any of the
items specified above as part of the Property. Any reproduction of
this Instrument or of any other security agreement or financing
statement shall be sufficient as a financing statement. In
addition, Mortgagor agrees to execute and deliver to Mortgagee,
upon Mortgagee’s request, any financing statements,
extensions, renewals, amendments and other records, and
reproductions of this Instrument in such form as Mortgagee may
require to perfect a security interest with respect to the
foregoing items. Mortgagor shall pay all costs of filing such
financing statements and any extensions, renewals, amendments and
releases thereof, and shall pay all costs and expenses of any
record searches for financing statements Mortgagee may require.
Mortgagor hereby waives any and all rights Mortgagor may have to
file in the real estate records or any other index or record any
financing statement, amendment, termination statement or other
record pertaining to the Collateral and/or Mortgagee’s
interest therein. Without the prior written consent of Mortgagee,
Mortgagor shall not create or suffer to be created pursuant to the
Uniform Commercial Code any other security interest in said items,
including replacements and additions thereto. Upon an Event of
Default, Mortgagee shall have the remedies of a secured party under
the Uniform Commercial Code, and Mortgagee may also invoke the
remedies provided in Sections 24, 25, 26 and 27 hereof as to
such items. In exercising any of said remedies Mortgagee may
proceed against the items of real property and any items of
personal property specified above separately or together and in any
order whatsoever, without in any way affecting the availability of
Mortgagee’s remedies under the Uniform Commercial Code or of
the remedies provided in Sections 24, 25, 26 and 27
hereof.
Section 14.
Leases of the Property . Mortgagor shall comply with
and observe Mortgagor’s obligations as landlord under all
Leases of the Property or any part thereof. All
7
|
