MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT FINANCING STATEMENT AND FIXTURE FILING
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MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT FINANCING STATEMENT AND FIXTURE FILING
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Documentary Stamp Taxes: $
Intangible Taxes: $
This instrument was prepared by:
Darryl H. Levy, Esq.
Greer, Herz & Adams, L.L.P.
2525 South Shore Blvd., Suite 203
League City, Texas 77573
After Recording, Return to:
Lesa L. Rosinski
Greer, Herz & Adams, L.L.P.
2525 South Shore Blvd., Suite 203
League City, Texas 77573
MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
FINANCING STATEMENT AND FIXTURE FILING
This Mortgage, Assignment of Rents, Security Agreement, Financing Statement and Fixture Filing (hereinafter termed “Mortgage”) is entered into between TNP SRT OSCEOLA VILLAGE, LLC, a Delaware limited liability company (hereinafter termed “Mortgagor”) whose mailing address is 1900 Main Street, Suite 700, Irvine, California 92614, and AMERICAN NATIONAL INSURANCE COMPANY, a Texas insurance company, whose mailing address is Attn: Mortgage and Real Estate Investment Department, One Moody Plaza, Galveston, Texas 77550 (hereinafter termed “Mortgagee”).
1.1 The term “Indebtedness” shall mean and include:
(1) Any and all sums becoming due and payable pursuant to the Note, as hereinafter defined;
(2) Any and all other sums becoming due and payable by Mortgagor to Mortgagee including, but not limited to, (a) such sums as may hereafter be borrowed by Mortgagor from Mortgagee (it being contemplated that such future indebtedness may be incurred), including, but not limited to advancements or expenditures made by Mortgagee pursuant to the terms and conditions of this Mortgage or any other document evidencing, securing or otherwise relating to the Note and (b) the Twenty-Five Per Cent Profit Participation Payment, as defined below; and
(3) Any and all obligations, covenants, agreements and duties of any kind or character of Mortgagor now or hereafter existing, known or unknown, arising out of or in connection with the Note, this Mortgage, or any other document evidencing, securing or relating to the Note.
(4) All renewals, extensions, modifications, increases, consolidations and rearrangements of any or all of the obligations, covenants, agreements and duties of Mortgagor defined herein under the term Indebtedness, whether or not Mortgagor executes any renewal, extension, modification, increase, consolidation or rearrangement.
1.2 The term “Collateral” shall mean and include (a) all of the goods, articles of personal property, accounts, general intangibles, instruments, documents, furniture, furnishings, equipment and/or fixtures of every kind and nature whatever (including, without limitation, the items described in subsection (b) - (f) below) now or hereafter owned by Mortgagor, in or hereafter placed in, or used or which may become used, in connection with or in the operation of the Mortgaged Premises, together with all additions thereto, replacements thereof, substitutions therefor and all proceeds thereof; (b) all rents, rentals, payments, compensations, revenues, profits, incomes, leases, licenses, concession agreements, insurance policies, plans and specifications, contract rights, accounts, escrowed funds, and general intangibles in any way relating to the Mortgaged Property or used or useful in the use, enjoyment, ownership or operation of the Mortgaged Property; (c) all names, trade names, signs, marks, and trademarks under which the Mortgaged Property, or any part thereof, is known or operated and all of Mortgagor’s rights to carry on the business of Mortgagor under all such name or names and any variant or variance thereof; (d) all deposits, awards, damages, payments, escrowed monies, insurance proceeds, condemnation awards, impact fee credits, or other compensation, and interests, fees, charges or payments accruing on or received from or to be received on any of the foregoing in any way relating to the Mortgaged Property, or the ownership, enjoyment or operation of the Mortgaged Property (including, without limitation, the right to claim, collect, receive and receipt refunds and reimbursements from property taxing authorities, utilities and insurers) together with all proceeds of the foregoing described in this Section 1.2; (e) any and all cash, securities, un-certificated securities, investment property, securities accounts, financial assets, deposit accounts, securities entitlements and other personal property now or hereafter in or coming into or being credited to, or represented by any of the foregoing including, without limitation, any and all interest, dividends, rights, options, powers, splits and income thereon;; and (f) all products, proceeds, substitutions, and replacements of any of the above described collateral.
1.3 The term “Mortgaged Premises” shall mean and include (a) the real property situated in the County of Osceola, State of Florida, described in Exhibit “A” which is attached hereto and incorporated herein for all purposes; together with all buildings and improvements of every kind and description now or hereafter erected or placed thereon and all materials now or hereafter placed thereon intended for construction, reconstruction, alteration and repairs of such buildings and improvements, all of which materials shall be deemed to be included as a part of said real property immediately upon the delivery thereof to said real property; (b) all fixtures now or hereafter owned by Mortgagor and attached to, contained in or used in connection with said real property, and all renewals and replacements thereof, including but not limited to (i) all equipment, apparatus, machinery, motors, elevators, fittings and radiators, (ii) all plumbing, heating, lighting, ventilating, refrigerating, incinerating, air-conditioning and sprinkler equipment; (iii) all awnings, storm windows and doors, mantels, cabinets, rugs, carpeting, linoleum, stoves, shades, draperies, blinds and water heaters; (iv) such other goods and chattels
and personal property as are usually furnished by landlords in letting an unfurnished building, or which shall be attached to said buildings and improvements by nails, screws, bolts, pipe connections, masonry or in any other manner; and (v) all built-in equipment as may be shown by plans and specifications.
1.4 The term “Mortgaged Property” shall mean the Mortgaged Premises and Collateral.
1.5 The term “Note” shall mean, individually and collectively, the following promissory notes that are of even date herewith, made by Mortgagor and payable to the order of Mortgagee,: (i) that certain Promissory Note in the original principal amount of $15,583,00.00 and all notes given in renewal, extension, modification, increase, consolidation or rearrangement of said promissory notes or any portion thereof (“Note 1”); and (ii) that certain Promissory Note in the original principal amount of $3,417,000 and all notes given in renewal, extension, modification, increase, consolidation or rearrangement of said promissory notes or any portion thereof (“Note 2”).
1.6 The term “Key Tenant Lease” means, individually and collectively, the Publix Lease, defined below, and the HH Gregg Lease, defined below.
1.7 The term “Master Lease” refers to that certain Master Lease dated on or about the date hereof concerning by and between Mortgagor as landlord and TNP SRT Osceola Village Master Lessee, LLC, a Delaware limited liability company, as tenant, concerning a portion of the Mortgaged Property as more particularly described therein, and all renewals, extensions and modifications of said Master Lease or any portion thereof.
1.8 The term “Master Lease Guaranty” shall mean, individually and collectively, refers to (i) that certain Guaranty executed by TNP Strategic Retail Trust, Inc., a Maryland corporation, on or about the date hereof in favor of Mortgagor concerning the Master Lease and all renewals, extensions and modifications of all or any portion thereof; and (ii) that certain Guaranty executed by Thompson National Properties, LLC, a Delaware limited liability company, on or about the date hereof in favor of Mortgagor concerning the Master Lease and all renewals, extensions and modifications of all or any portion thereof.
II. GRANT OF MORTGAGE
In consideration of Ten Dollars ($10.00) cash in hand paid, of Mortgagee’s advancing or extending to Mortgagor the funds or credit constituting a part of the Indebtedness, and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Mortgagor hereby grants and delivers unto Mortgagee a good first mortgage lien upon the above-described Mortgaged Property, for the purpose of securing the Indebtedness, and the full and complete performance of each and every obligation, covenant, duty and agreement of Mortgagor contained herein or in the Note or any other document executed by Mortgagor pertaining to the Note or as security therefor; TO HAVE AND TO HOLD such mortgage lien, together with the rights, privileges and appurtenances thereto belonging unto the Mortgagee and its substitutes, successors and assigns forever, and Mortgagor is hereby bound to warrant and forever defend the Mortgaged Property unto the Mortgagee, his substitutes or successors and their assigns, against the claims of all persons claiming any interest in the Mortgaged Property or any part thereof save and except only these items identified on Exhibit “B” attached hereto and incorporated herein for all purposes (the “Permitted Exceptions”).
III. ADDITIONAL SECURITY
As further security for the Indebtedness and the full and complete performance of each and every obligation, covenant, agreement and duty of Mortgagor contained herein or contained in any other document executed by Mortgagor pertaining to the Note or the security therefor:
A. Security Interest . Mortgagor hereby grants and conveys to Mortgagee a security interest in and lien on all of the Collateral. This Mortgage shall serve as a Security Agreement created pursuant to the Florida Uniform Commercial Code, and Mortgagee shall have and may exercise all rights, remedies and powers of a secured party under the Florida Uniform Commercial Code. Mortgagor hereby represents, warrants and covenants that (1) Mortgagor is the owner and holder of the Collateral free and clear of any adverse claim, security interest or encumbrance, except those created herein; (2) it will defend the Collateral, and the priority of the security interest created herein as a valid first security interest against all claims and demands of any person at any time claiming the same or any interest therein; (3) there are no financing statements executed by the Mortgagor, as Debtor, now on file in any public office except those financing statements which are being released contemporaneously with the delivery of this transaction or which have been authorized by Mortgagee; (4) Mortgagor authorizes Mortgagee to file or record such other and further agreements, financing statements and assignments in such offices and at such times as it is deemed by Mortgagee to be necessary or desirable; and (5) it will execute and deliver to Mortgagee such other and further agreements, financing statements and assignments as Mortgagee may request.
This Mortgage is intended to constitute a fixture filing in accordance with the applicable provisions of the Florida Uniform Commercial Code. The debtor is the Mortgagor and the secured party is the Mortgagee and their addresses are those set forth at the beginning of this Mortgage. Certain of the Mortgaged Property is or will become “fixtures” (as that term is defined in the Florida Uniform Commercial Code), and this Mortgage, upon being filed for record in the real estate records of the county wherein the Mortgaged Premises are situated, shall operate also as a financing statement filed as a fixture filing in accordance with the applicable provisions of the Florida Uniform Commercial Code upon such Mortgaged Property that is or may become fixtures.
Mortgagor covenants and agrees that Mortgagor will furnish Mortgagee with notice of any change in name, identity, organizational structure, mailing address, residence, state of formation or organization, principal place of business or location (as that term is defined in the Code) 30 days prior to the effective date of any such change. Mortgagor hereby authorizes the filing of any financing statements or other instruments deemed necessary by Mortgagee to prevent any filed financing statement from becoming misleading or losing its perfected status or to reinstate any lapsed financing statement.
Mortgagor agrees that the filing of a financing statement in the records normally having to do with personal property shall never be construed as in any way derogating from or impairing
the express declaration and intention of the parties hereto, hereinabove stated, that everything used in connection with the production of income from the Mortgaged Property and/or adapted for use therein and/or which is described or reflected in this Mortgage is, and at all times and for all purposes and in all proceedings, legal or equitable, shall be regarded as real property irrespective of whether (i) any such item is physically attached to the real property or improvements thereon; (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Mortgagee; or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (x) rights in or to the proceeds of any fire and/or hazard insurance policy; (y) any award in eminent domain proceedings for a taking or for loss of value; or (z) Mortgagor’s interest as lessor in any present or future leases or subleases or rights to rents growing out of the use and/or occupancy of the Mortgaged Property, whether pursuant to lease or otherwise, shall never be construed as in any way altering any of the rights of Mortgagee as determined by this instrument or impugning the priority of this Mortgage or any of the other documents entered into in connection with the loan evidenced by the Note, but such mention in the financing statement is declared to be for the protection of Mortgagee in the event any court or judge shall at any time hold with respect to (x), (y), or (z) that notice of Mortgagee’s priority of interest to be effective against a particular class of persons, including, but not limited to, the federal government and any subdivision or entity of the federal government, must be filed in the Code records or otherwise perfected in the manner required by the Code.
B. Assignment of Condemnation Awards . To the extent of the full amount of the Indebtedness secured hereby and of the cost and expenses (including reasonable attorneys’ fees) incurred by Mortgagee in the collection of any award or payment, Mortgagor hereby assigns to Mortgagee any and all awards or payments, including all interest thereon, together with the right to receive the same, which may be made with respect to the Mortgaged Property as a result of (a) the exercise of the right of eminent domain, (b) the alteration of the grade or of any street, or (c) any other injury to or decreased value in the Mortgaged Property, as well as the right, but not the obligation, to, at Mortgagor’s expense, participate in and make decisions concerning the progress of any proceeding involving any such award or payment. Mortgagor shall give Mortgagee written notice of any such action or proceeding immediately upon Mortgagor’s becoming aware of same. All such damages, condemnation proceeds and consideration shall be paid directly and solely to Mortgagee whether or not an Event of Default has at such time occurred, and after first applying said sums to the payment of all costs and expenses (including reasonable attorneys’ fees) incurred by Mortgagee in obtaining such sums, Mortgagee may, at its option, apply the balance on the Indebtedness, in any order and whether or not then due, without prepayment or penalty, or to the restoration of the Mortgaged Property, or release the balance to Mortgagor. Said application or release shall not cure or waive any default. Notwithstanding the foregoing, if the Publix Lease and/or the HH Gregg Lease remain in full force and effect and such applicable lease is not terminated due to any such condemnation or taking then Mortgagee shall permit the condemnation proceeds to be made available for the repair and replacement of the Mortgaged Property if and to the extent that by any such non- terminated lease requires that such proceeds be made available for said purpose.
IV. ABSOLUTE ASSIGNMENT OF RENTS
In further consideration for the indebtedness evidenced by the Note, Mortgagor hereby absolutely and unconditionally assigns to Mortgagee all rents, revenues, profits and incomes from the Mortgaged Property or any portion thereof. Provided, however, so long as no Event of Default has occurred, Mortgagor is hereby granted a license to collect and retain the currently accruing rents, income and profits from the Mortgaged Property, but in no event may Mortgagor collect same for more than one (1) month in advance of the date upon such rents become due. If an Event of Default shall occur, however, thereupon, and at any time thereafter such default is continuing, Mortgagee may terminate such license and may, without any liability to Mortgagor, take possession and control of the Mortgaged Property and/or receive and collect all rents, revenues, profits and income, accrued or accruing thereafter so long as any of the Indebtedness remains unpaid, applying so much thereof as may be collected first to the expenses incident to taking possession and/or the collection thereof, and second to the payment of the Indebtedness other than the Note and then to the amount of the Note then remaining unpaid, at Mortgagee’s discretion, either principal or interest, in any order, and whether then matured or not, paying the balance, if any, to the Mortgagor. It is intended by Mortgagor and Mortgagee that this assignment of rents constitutes an absolute assignment and not an assignment for additional security only and that Mortgagee shall be entitled to exercise its rights hereunder whether or not Mortgagee is in possession of the Mortgaged Premises at such time. Mortgagor agrees to fulfill or perform each and every covenant of any and all leases and guaranties of leases of the Mortgaged Property so as to keep them at all times in full force and effect. Mortgagor agrees not to enter into any new lease, and not to make any modification, consent to any modification of, or cancel, terminate or consent to the surrender of any lease or any guaranty of such lease after such lease or guaranty has been executed by Mortgagor and the lessee or guarantor, as applicable, without the prior written consent of Mortgagee, not to be unreasonably withheld, conditioned or delayed for any leases or guaranties other than with respect to a Key Tenant Lease or any guaranty thereof for which any consent shall be in Mortgagee’s sole and absolute discretion); the failure to fulfill or perform any such covenant or the making of or consent to any such modification or cancellation, termination or surrender shall be an Event of Default; provided, however, that:
(A) until such time as there exists an uncured Event of Default, Mortgagor may in good faith in the ordinary course of business with tenants unaffiliated with the Mortgagor (i) enter into new leases for premises of 2,000 square feet or less for a term, including any extension options, of not more than five (5) years at prevailing market rates and (ii) exercise the landlord’s remedies for default in good faith in the ordinary course of business for any lease of 2.000 square feet or less including the exercise of any termination of such a lease for a tenant’s default. For purposes of calculating such square footage as provided in this Article IV, all leases with the same tenant or with affiliates of such tenant shall be aggregated; and
(B) enter into a lease modification for leases with premises of 2,000 square feet or less (aggregated as provided in subsection (B) above) may in good faith in the ordinary course of business with tenants unaffiliated with the Mortgagor if such modification (i) does not reduce any rent below prevailing market rates provided that with respect to any lease that is in existence on the date hereof, the Mortgagor may not reduce the rent during the term of such leases without
Mortgagee’s written consent, (ii) does not involve any reduction in term, (iii) does not extend the term including any extension options, for more than five (5) years beyond the existing term, and (c) does not otherwise materially modify the lease.
Nothing contained in this Mortgage or in any other document securing, evidencing or relating to the Indebtedness shall preclude Mortgagee from taking any action to cure or remedy any default of the Landlord under any lease of all or any portion of the Mortgaged Property or any guaranty of lease, or any act, omission or occurrence which but for the passage of time, the giving of notice, or both, would be a default under any such lease or guaranty of lease or take any other action in connection therewith and any amounts expended by Mortgagee in connection with such cure or remediation including, without limitation, reasonable attorneys fees and expenses, shall be an advance under and secured by this Mortgage and shall be included in the Indebtedness and shall be paid by Mortgagor to Mortgagee on demand. The preceding sentence shall not be construed to obligate Mortgagee to cure any such actual or potential lease defaults or any guaranty of lease defaults.
V. MORTGAGOR’S REPRESENTATIONS AND WARRANTIES
In order to induce Mortgagee to lend the funds evidenced by the Note, Mortgagor represents and warrants that:
A. Accurate Loan Information . All information and financial statements furnished or to be furnished to Mortgagee by or on behalf of Mortgagor in connection with the Indebtedness secured by this Mortgage is or at the time of delivery will be complete and accurate in all material respects.
B. Valid Title . Mortgagor is the lawful owner of the Mortgaged Property and has good right and lawful authority to mortgage and pledge the same.
C. Freedom from Encumbrances . The Mortgaged Property is free from any and all liens and encumbrances save and except only the Permitted Exceptions, and Mortgagor does warrant and will defend title to the Mortgaged Property against all claims or demand by third parties whatsoever save and except only the Permitted Exceptions.
D. Maintenance of Lien Priority. Mortgagor shall take all steps necessary to preserve and protect the validity and priority of the first mortgage lien on the Mortgaged Property created hereby. Mortgagor shall execute, acknowledge and deliver such additional documents as Mortgagee may deem necessary in order to preserve, protect, continue, extend or maintain the liens and security interests created hereby as first liens on the Mortgaged Property. All costs and expenses incurred in connection with the protection, preservation, continuation, extension or maintaining of the security interest and the liens herein created as valid first and subsisting liens shall be paid by Mortgagor.
E. Value of the Mortgaged Property . Mortgagor acknowledges that the value of the Mortgaged Property, as established by an appraisal submitted to Mortgagor, is substantially in excess of the Indebtedness secured hereby. Mortgagor acknowledges but for the Mortgaged
Property having a value in excess of the amount of the Indebtedness, Mortgagee would not make the loan evidenced by the Note and advance the funds hereunder. Mortgagor agrees that Mortgagee shall at all times have the benefit of the Mortgaged Property as the security for the Indebtedness even though the value thereof may now or in the future exceed the amount of the Indebtedness secured hereby.
F. Representations, Warranties and Covenants of a Limited Liability Company . Mortgagor hereby represents, warrants and covenants that:
(1) Mortgagor is a Delaware limited liability company created under that certain Certificate of Formation filed effective as of September 26, 2011 ( “Certificate of Formation”) and there are no amendments thereto and that certain Operating Agreement dated effective as of September 1, 2011 (“LLC Agreement”) and there are no amendments thereto.
(2) The only member of Mortgagor is TNP Strategic Retail Operating Partnership, L.P., a Delaware limited partnership (the “Sole Member”).
(3) Any one of Anthony W. Thompson, Chief Executive Officer, Jack Maurer, President, or James Wolford, Chief Finance Officer, of TNP Strategic Retail Trust, Inc., a Maryland corporation, the sole general partner of the Sole Member, is authorized to execute and deliver the Note, this Mortgage, and all other documents which, pursuant to the terms of the Loan Documents, Mortgagee may now or from time to time hereafter require to be executed on behalf of Mortgagor, in connection with the Note, this Mortgage and the other Loan Documents, including but not limited to renewals, extensions, modifications, increases, consolidations and rearrangements of the Note and Mortgage, and no signature or any other action of any person or entity other than anyone of Anthony W. Thompson, Chief Executive Officer, Jack Maurer, President, or James Wolfhound, Chief Finance Officer, of TNP Strategic Retail Trust, Inc., a Maryland corporation, the sole general partner of the Sole Member shall be required to bind Mortgagor.
(4) Except for Permitted Transfers (hereinafter defined), Mortgagor will not permit any membership interest in Mortgagor to be sold, transferred, conveyed, encumbered or diluted or make any modification of the Certificate of Formation or LLC Agreement which shall have a material adverse effect on the rights of Mortgagee.
(5) Mortgagor and Sole Member are each, and shall each continue to be, (a) duly organized and existing under the laws of the State of Delaware and Maryland, respectively, or such other states under the laws of which Mortgagor or Sole Member may hereafter be organized, provided that neither Mortgagor nor Sole Member shall be permitted to change its structure to the extent any such change shall have a material adverse effect on the rights of Mortgagee and (b) duly qualified to transact business in each State where the conduct of the respective business of each requires it to be qualified.
G. Construction and Materials . Mortgagor hereby warrants, represents and covenants that all persons and entities who have provided labor or materials to or for the benefit of the Mortgaged Property by, through or under Mortgagor or otherwise at Mortgagor’s direction or request at any time prior to the date of this Mortgage have been paid in full.
H. Hazardous Waste . Mortgagor hereby represents and warrants that to its actual knowledge Mortgagor is not aware of any facts or circumstances which may give rise to any litigation, proceedings, investigations, citations or notices of violations resulting from the use, presence, generation, manufacture, storage, discovery or disposition of, on, under or about the Mortgaged Property or the transport to or from the Mortgaged Property of any Hazardous Materials, defined below. Mortgagor hereby represents and warrants that the Mortgaged Property is not in violation of and Mortgagor covenants and agrees not to use or knowingly permit the use of the Mortgaged Property for any purpose which would be in violation of, any federal, state or local health or environmental statute, regulation, ordinance or publication which is presently in effect or that may be promulgated in the future, as such statutes, regulations, ordinances and publications may be amended from time to time relating to Hazardous Materials, including, without limitation, with respect to industrial hygiene or to health or environmental conditions on, under, or about the Mortgaged Property (including, but not limited to, soil and ground water conditions) or with respect to the owner’s or occupant’s thereof. The foregoing representations and warranties shall survive foreclosure under this Mortgage and shall constitute continuing representations and warranties to Mortgagee, its successors and assigns, as to conditions existing prior to foreclosure or in deed in lieu of foreclosure only. The term “Hazardous Materials”, as used in this Mortgage, shall include but not be limited to:
as such statutes, regulations, ordinances and publications may be amended from time to time;
NOTWITHSTANDING ANY NON-RECOURSE LANGUAGE OF THE NOTE OR THIS MORTGAGE, Mortgagor hereby agrees to INDEMNIFY AND HOLD HARMLESS Mortgagee, its directors, officers, employees, attorneys, contractors and agents, and any successors and assigns, their directors, officers, employees, and agents (individually and collectively the “Indemnitees”), from and against any and all loss, damage, expense or liability (including reasonable attorneys fees and investigatory expenses) incurred arising out of the use, occurrence, generation, storage, transportation or disposal of Hazardous Materials on or about the Mortgaged Property by Mortgagor, its present tenants or any future tenants, any prior owner, operator or tenant of the Mortgaged Property, or any third party, including, without limitation, (i) all foreseeable and all unforeseeable consequential damages, directly or indirectly arising out of the use, occurrence, generation, storage, transportation or disposal of Hazardous Materials by Mortgagor, past, present or future tenants, owners or operators of the Mortgaged Property, or any third party, and (ii) the cost of any required or necessary repair, cleanup or detoxification, claimed, threatened or asserted against any such Indemnitee; SUCH INDEMNITY AND HOLD HARMLESS SPECIFICALLY INCLUDES ANY LOSS, DAMAGE, EXPENSE OR LIABILITY CAUSED BY OR ATTRIBUTABLE TO THE ORDINARY OR SIMPLE NEGLIGENCE, AS OPPOSED TO THE GROSS NEGLIGENCE, OF AN INDEMNITEE AND FOR ANY ACTION OR OCCURRENCE FOR WHICH THE INDEMNITEE MAY INCUR
STRICT LIABILITY, but such indemnity and hold harmless shall not apply with respect to any Hazardous Substances which first occurred on the Mortgaged Property after any foreclosure of this Mortgage or conveyance in lieu thereof, after the sale of the Mortgaged Property pursuant to a transaction undertaken with Noteholder’s consent as provided in this Mortgage, or to the extent that such loss, damage, expense or liability is caused by or attributable to such Indemnitee’s gross negligence or willful misconduct. Mortgagor’s obligations pursuant to the foregoing indemnity and hold harmless shall survive any termination of the estate created by this Mortgage whether as a result of the exercise by Mortgagee of any default remedies available to it at law or in equity or otherwise. Mortgagor acknowledges and agrees that as a condition precedent to making the loan to Mortgagor evidenced by the Note secured by this Mortgage, Mortgagee has required that Mortgagor provide to the Indemnitees the indemnity set forth herein and that Mortgagee would not consummate the loan without this indemnity and hold harmless and that the indemnity and harmless contained herein is a material inducement for Mortgagee’s agreement to make the loan. Further, Mortgagor agrees that the foregoing indemnification is separate, independent of and in addition to its undertakings as Mortgagor under the Note, as Mortgagor under this Mortgage, as Assignor under the Absolute Assignment of Leases and Rents and any and all other documents, agreements and undertakings executed by Mortgagor in favor of Mortgagee pursuant to the Note. Mortgagor agrees that a separate action may be brought to enforce the provisions of this indemnification and hold harmless, which shall in no way be deemed to be an action on the Note or under this Mortgage, whether or not Mortgagee would be entitled to a deficiency judgment following a foreclosure sale of the Mortgaged Property.
Except as otherwise disclosed to Mortgagee in writing, to Mortgagor’s actual knowledge, the present uses and occupancies of the Mortgaged Property do not violate or conflict with any applicable law, statute, ordinance, rule, regulation or order of any kind, including, without limitation, Environmental Laws, zoning, building, land use, noise abatement, occupational health and safety or other laws, any building permit or any condition, grant, easement, covenant, condition or restriction, whether recorded or not and if a third-party is required under any covenants, conditions and restrictions of record or any other agreement to consent to the use and/or operation of the Mortgaged Property, Mortgagor has obtained such approval from such party;
To Mortgagor’s actual knowledge, the Mortgaged Property has never been used, nor has Mortgagor used the Mortgaged Property, for any activities which, directly or indirectly, involve the use, generation, treatment, storage, transportation or disposal of any Hazardous Materials. Except as disclosed in any environmental reports for the Mortgaged Premises (collectively, the “ Environmental Reports ”) provided to Mortgagee prior to the date hereof, no Hazardous Materials, to Mortgagor’s actual knowledge, exist on or under the Mortgaged Property or in any surface water(s) or groundwater(s) on or under the Mortgaged Property. Except as may be disclosed in the Environmental Reports, to Mortgagor’s actual knowledge, the Mortgaged Property and its prior uses have at all times complied with all Environmental Laws, and Mortgagor has not violated, and will not violate, any Environmental Laws;
There are no facilities on the Mortgaged Property which are subject to reporting under any State laws or Section 312 of the Federal Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. sec. 11022), and federal regulations promulgated thereunder. The Mortgaged Property does not contain any underground storage tanks.
VI. ADDITIONAL COVENANTS OF MORTGAGOR
As long as any of the Indebtedness remains unpaid, Mortgagor covenants and agrees that:
A. Payment of Indebtedness. Mortgagor will pay the Indebtedness promptly when due and payable.
B. Payment of Taxes and Other Assessments. Mortgagor will pay all taxes, assessments and other governmental, municipal or other public dues, charges, fines, or impositions imposed or levied upon the Mortgaged Property or on the interest created by this Mortgage, or any tax or excise on rents or other tax, however described, assessed or levied by any state, federal or local taxing authority as a substitute, in whole or in part, for taxes assessed or imposed on the Mortgaged Property or on the interest created by this Mortgage, and at least ten (10) days before said taxes, assessments and other governmental charges are due will exhibit receipts therefor to Mortgagee. If any tax or assessment is levied, assessed or imposed on Mortgagee as a legal holder of the Note or any interest in the documents securing, evidencing or relating to the Note by any governmental authority, then unless all such taxes are paid by Mortgagor as they become due and payable and in the opinion of Mortgagee based on consultation with its counsel, such payment by Mortgagor is lawful and does not place Mortgagee in violation of any law, Mortgagee may, at its option, declare the Indebtedness immediately due and payable, but in this event no prepayment premium shall be due or payable. Notwithstanding the foregoing, Mortgagor shall have the right to challenge any such levy, assessment or imposition; provided, however, that (1) such a challenge shall be lawful; (2) such a challenge shall not place Mortgagee in violation of any law; (3) Mortgagor shall indemnify and hold Mortgagee harmless from any and all loss, liability, cost or expense that may arise due to Mortgagor’s challenge; and (iv) such contested item and all costs and penalties, if any, shall have been paid at least thirty (30) days before the date on which the Mortgaged Property, or any portion thereof, may be sold in order to satisfy any such contested items. Upon a final determination as to Mortgagor’s challenge, Mortgagor shall immediately pay any and all such taxes, assessments or other governmental charges deemed to be due and payable. If Mortgagor fails to timely pay or cause such amounts to be paid prior to delinquency, Mortgagee may, at its option declare the Indebtedness immediately due and payable.
C. Insurance . Mortgagor shall keep the Mortgaged Property insured against loss or damage by fire, windstorm, extended coverage perils, flood (in the event any of the Mortgaged Premises is within a 100-year flood plain and flood insurance is available pursuant to the United States Flood Disaster Protection Act of 1973 or any similar or successor statute or successor governmental authority), vandalism, malicious mischief and such other hazards, casualties or other contingencies and in such amounts (but in no event less than the greater of the amount of the Indebtedness from time to time secured hereby or the full replacement value thereof) as from time to time may be required by Mortgagee, and maintain rents or rental value insurance coverage, in an amount at least adequate to cover twelve (12) months’ principal and interest
installments on the Note and together with twelve (12) months’ property taxes and insurance premiums, with respect to the Mortgaged Property covering the risk of loss due to the occurrence of any of the foregoing hazards, in each case and in such amounts, in such manner and in such companies as the Mortgagee may approve, and all such policies shall contain a waiver of subrogation and provide that any losses payable thereunder shall (pursuant to standard mortgagee clauses without contribution, including one providing that such insurance as to the interest of Mortgagee shall not be invalidated by any act or omission or neglect of Mortgagor, to be attached to each policy) be payable to Mortgagee. Mortgagor shall cause duplicate originals of any and all such insurance policies to be deposited with Mortgagee. Mortgagor will also carry public liability insurance, in such form, amounts and with such companies as Mortgagee may from time to time reasonably require, with Mortgagee included thereon as a named insured. Any or all of such policies may be provided under a blanket policy or policies provided such blanket policies allocate the amount of insurance required hereunder to the Mortgaged Property. Mortgagor shall cause duplicate originals of any and all such insurance policies to be deposited with Mortgagee, or certificates of the insurers under such policies evidencing same. At least ten (10) days prior to the date the premiums on each such policy or policies shall become due and payable, Mortgagor shall furnish to Mortgagee evidence of the payment of such premiums. Each of such policies shall contain an agreement by the insurer that the same shall not be canceled or modified without at least ten (10) days’ prior written notice to Mortgagee. In the event of loss under any such policy, Mortgagor shall give immediate written notice to the insurance carrier and to Mortgagee. With respect to all insurance policies except public liability insurance, Mortgagee is hereby authorized, but not required, on behalf of and at the expense of Mortgagor, whether or not an Event of Default has then occurred, to make proof of loss, to collect for, adjust or compromise any losses under any insurance policy on the Mortgaged Property, to appear in and prosecute any action arising from any of such insurance policies, and to apply, at Mortgagee’s option, the loss proceeds (less expenses of collection) on the Indebtedness, in any order and whether due or not, or to the restoration of the Mortgaged Property, or to be released to Mortgagor, but any such application or release shall not cure or waive any default. In case of a sale pursuant to the foreclosure provision hereunder, or any conveyance of all or any part of the Mortgaged Property in extinguishment of the Indebtedness, complete title to all insurance policies on or related to the Mortgaged Property, and the unearned premiums of same shall pass to and vest in the purchaser or grantee of the Mortgaged Property.
D. Escrow for Taxes and Insurance . Mortgagor shall pay, in addition to the installments payable under the Note, on the same day as such installments are due and payable, a sum equal to 1/12th of the estimated annual taxes, hazard and rental insurance premiums, and special assessments, if any, next due on the Mortgaged Property. If the amount so paid is not sufficient to pay such taxes, insurance premiums and assessments when due, then Mortgagor will immediately deposit with Mortgagee amounts sufficient to pay the same. Funds deposited by Mortgagor pursuant to this provision shall be used to pay such taxes, insurance premiums and assessments when due, provided that Mortgagor has furnished Mortgagee with all tax statements, premium notices and other such notices at least thirty (30) days prior to the date that any such taxes, premiums and assessments may be due. If there is a default under the provisions of the Note or of this Mortgage, Mortgagee may elect, at any time after default, to apply the funds accumulated under this provision against the Indebtedness in any manner or order. No interest shall accrue or be allowed on any payments under the provisions of this paragraph. Mortgagee
shall not be required to deposit or hold monies in an account special or separate from its general funds. Mortgagor expressly releases Mortgagee from any liability to Mortgagor arising out of the maintenance by Mortgagee of an escrow as provided herein or for payment of any sums out of such escrow. Mortgagor further indemnifies Mortgagee against claims arising out of payment of taxes or insurance premiums where Mortgagor has failed to provide Mortgagee with tax statements and premium notices as required hereby. The maintenance by Mortgagee of an escrow for taxes and insurance shall not relieve Mortgagor of its obligations under this Mortgage respecting taxes and insurance on the Mortgaged Property.
E. Patriot Act .
(1) As of the date of this Mortgage, Mortgagor is and, during the term of this Mortgage shall remain, in full compliance with all the applicable laws and regulations of the United States of America that prohibit, regulate or restrict financial transactions, including but not limited to, conducting any activity or failing to conduct any activity, if such action or inaction constitutes a money laundering crime, including any money laundering crime prohibited under the Money Laundering Control Act, 18 U.S.C. 1956, 1957, or the Bank Secrecy Act, 31 U.S.C. 5311 et seq. and any amendments or successors thereto and any applicable regulations promulgated thereunder.
(2) Mortgagor represents and warrants that: (i) neither it, nor to its actual knowledge, any of its Tier Two Owners (as defined below), or any officer, director or employee, is named as a “Specially Designated National and Blocked Person” as designated by the United States Department of the Treasury’s Office of Foreign Assets Control or as a person, group, entity or nation designated in Presidential Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism; (ii) it is not owned or controlled, directly or indirectly, by the government of any country that is subject to a United States Embargo; (iii) it is not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by the United States Treasury Department as a “Specially Designated National and Blocked Person,” or for or on behalf of any person, group, entity or nation designated in Presidential Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism; and that it is not engaged in this transaction directly or indirectly on behalf of, or facilitating this transaction directly or indirectly on behalf of, any such person, group, entity or nation; iv) no funds will be used to make any payments due hereunder or pursuant to the Note which were obtained directly or indirectly from a Specially Designated National and Blocked Person or otherwise derived from a country that is subject to a United States Embargo; and (v) no current or future tenant of any portion of the Mortgaged Property, nor any officer, director, member, manager, partner or Constituent Owner of such tenant, is or will become named a Specially Designated National and Blocked Person; provided that, in the event that a tenant of any portion of the Mortgaged Property is a publicly-traded company whose shares are listed on a national stock exchange, such representation and warranty shall not apply to shareholders of such tenant.
(3) Mortgagor acknowledges that it understands and has been advised by legal counsel on the requirements of the applicable laws referred to above, including the Money Laundering Control Act, 18 U.S.C. 1956, 1957, the Bank Secrecy Act, 31 U.S.C. 5311 et seq., the applicable regulations promulgated thereunder, and the Foreign Assets Control Regulations, 31 C.F.R. Section 500 et seq .
(4) Mortgagor shall notify Mortgagee immediately upon receipt of any information indicating a breach of this Section VI.E. or if Mortgagor or any officer, director, member, manager, member, employee or Constituent Owner of Mortgagor is custodially detained on charges relating to money laundering, whereupon Mortgagee shall be entitled to take all actions necessary so that Mortgagee is in compliance with all Anti-Money Laundering Regulations. Any and all loss, damage, liability, penalty, fine or expense (including reasonable attorney’s fees and investigatory expenses) incurred by Mortgagee in connection therewith, including but not limited to attorney’s fees, shall be included in the Indebtedness secured hereunder and shall immediately be due and payable by Mortgagor to Mortgagee.
F. Waste, Demolition, Alteration or Replacement . Mortgagor will cause the Mortgaged Property and every part thereof to be maintained, preserved and kept in safe and good repair, working order and condition, will not commit or permit waste thereon, will not remove, demolish or alter the design or structural character of any building now or hereafter erected on the Mortgaged Premises, without the prior written consent of Mortgagee, and will comply with all laws and regulations of any governmental authority with reference to the Mortgaged Property and the manner and use of the same, and will from time to time make all necessary and proper repairs, renewals, additions and restorations thereto so that the value and efficient use thereof shall be fully preserved and maintained. Mortgagor agrees not to remove any of the fixtures or personal property included in the Mortgaged Property without the prior written consent of Mortgagee and unless immediately replaced with like property of at least equal value. Mortgagor shall act as necessary to continue or cause the continuance of such income producing activity as is presently conducted upon or contemplated for the Mortgaged Property.
G. Inventory of Personal Property . Upon request of Mortgagee, Mortgagor shall deliver to Mortgagee an inventory describing and showing the make, model, serial number and location of all fixtures and personal property owned by Mortgagor and from time to time used in the management, maintenance and operation of the Mortgaged Property (other than inventory or property, if any, expressly excluded from the operation of this Mortgage by separate written agreement) with a certification by Mortgagor that said inventory is a true and complete schedule of such fixtures and personal property owned by Mortgagor and used in the management, maintenance and operation of the Mortgaged Property and that such items specified in the inventory constitute all of the fixtures and personal property required in the management, maintenance and operation of the Mortgaged Property and that such items are owned by Mortgagor free and clear of security interests, liens, conditional sales contracts or title retention arrangements except for those for the benefit of the Mortgagee. Mortgagor hereby grants to Mortgagee a security interest in all such items of fixtures and personal property owned by Mortgagor under the terms and conditions of this Mortgage.
H. Financial Statement . Mortgagor will furnish to Mortgagee within one hundred twenty (120) days after the first day of each and every January (the “Financial Statement Due Date”) until the Indebtedness secured hereby has been fully paid, the annual audited financial statements of Mortgagor covering the operation of the Mortgaged Property, each such statement prepared in accordance with generally accepted accounting principles and each such statement prepared and signed by an independent certified public accountant approved by and acceptable to Mortgagee.
The financial statements shall contain the Mortgagor’s certification that, during the period of time covered by the particular statement, to Mortgagor’s knowledge,(i) no activity has been conducted upon the Mortgaged Property in violation of any state, federal or local law, ordinance or regulation pertaining to Hazardous Materials, industrial hygiene or environmental conditions, and (ii) the Mortgaged Property complies with all legal requirements regarding access and facilities for handicapped or disabled persons, including, without limitation, and to the extent applicable, Part V of the Florida Building Construction Standards Act entitled “Accessibility by Handicapped Persons,” Chapter 553, Fla. Stat.; the Federal Architectural Barriers Act of 1988 (42 U.S.C. § 4151, et seq. ), The Fair Housing Amendment Act of 1988 (42 U.S.C. § 3601, et seq. ), The Americans With Disabilities Act of 1990 (42 U.S.C. § 12101 et seq. ), and The Rehabilitation Act of 1973 (29 U.S.C. § 794).
If Mortgagor does not deliver the financial statements as and when required by this paragraph, there shall be added to the Indebtedness and Mortgagor agrees to pay upon demand Two Hundred Dollars ($200.00) for each calendar month or part thereof following the Financial Statement Due Date until the required financial statements are delivered to Mortgagee.
I. Restrictions upon Sale, Transfer or Mortgaging the Mortgaged Property or the Interest in Mortgagor . Mortgagor acknowledges that Mortgagee is relying on the credit worthiness and skill of Mortgagor in advancing sums secured hereby. Except for a natural person’s transfer by will or applicable state intestacy laws (collectively, together with any other matters specifically defined below, “Permitted Transfers”):(i) if the Mortgagor should sell, trade, convey, transfer, mortgage, assign, exchange, pledge or encumber (including, without limiting these provisions or any similar references in this Mortgage, the granting of a security interest in) all or any part of the Mortgaged Property, or any interest of Mortgagor therein, absolutely or as security for a debt or other obligation, whether done in a direct or indirect method or enter into any contractual arrangements to do so, or (ii) if a shareholder, partner, member, trustee or beneficiary of Mortgagor (sometimes, a “Tier Two Owner”) or if any shareholder, partner, member, trustee or beneficiary of any Tier Two Owner (sometimes, a “Tier Three Owner”) (all and any “Tier Two Owners” and “Tier Three Owners” are individually and collectively a “Constituent Owner”) should sell, trade, convey, transfer, mortgage, assign, exchange, pledge or encumber (including, without limiting these provisions or any similar references in this Mortgage, the granti