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Exhibit 10.26
[Space Above This Line For Recording Data]
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.
RECITALS
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:
ARTICLE 1.
AGREEMENTS
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.
Section 1.8 Leases
.
(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
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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 c
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