EXHIBIT 10.19
TIAA Appl. #VR-34
Mortgage #___________
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS
SECURITY AGREEMENT AND FIXTURE FILING STATEMENT
by
[BORROWER],
as Borrower
for the benefit of
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA,
as Lender
Property Known As
[PROPERTY]
This Mortgage Was Prepared by
And After Recordation This Mortgage Should Be Returned To:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esquire
c/o Mayer, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION ............................. 2
Section 1.1 Definitions ..................................... 2
Section 1.2 Rules of Construction............................ 3
ARTICLE II
GRANTING CLAUSES .................................................. 3
Section 2.1 Encumbered Property ............................. 3
Section 2.2 Habendum Clause.................................. 5
Section 2.3 Security Agreement .............................. 5
Section 2.4 Conditions to Grant ............................. 6
ARTICLE III
OBLIGATIONS SECURED ............................................... 7
Section 3.1 The Obligations ................................. 7
ARTICLE IV
TITLE AND AUTHORITY ............................................... 7
Section 4.1 Title to the Property ........................... 7
Section 4.2 Authority........................................ 8
ARTICLE V
PROPERTY STATUS, MAINTENANCE AND LEASES ........................... 8
Section 5.1 Status of the Property .......................... 8
Section 5.2 Maintenance of the Property...................... 9
Section 5.3 Change in Use.................................... 9
Section 5.4 Waste ........................................... 10
Section 5.5 Inspection of the Property....................... 10
Section 5.6 Leases and Rents ................................ 10
Section 5.7 Parking ......................................... 10
Section 5.8 Separate Tax Lot................................. 10
Section 5.9 Changes in Zoning or Restrictive Covenants ...... 11
Section 5.10 Lender's Right to Appear ........................ 11
ARTICLE VI
IMPOSITIONS AND ACCUMULATIONS...................................... 11
Section 6.1 Impositions ..................................... 11
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Section 6.2 Accumulations .............................................. 12
ARTICLE VII
INSURANCE, CASUALTY, CONDEMNATION AND RESTORATION ............................ 13
Section 7.1 Insurance Coverages......................................... 13
Section 7.2 Casualty and Condemnation................................... 15
Section 7.3 Application of Proceeds .................................... 15
Section 7.4 Conditions to Availability of Proceeds for Restoration ..... 16
Section 7.5 Restoration ............................................... 17
ARTICLE VIII
COMPLIANCE WITH LAW AND AGREEMENTS ........................................... 19
Section 8.1 Compliance with Law ........................................ 19
Section 8.2 Compliance with Agreements ................................. 19
Section 8.3 ERISA Compliance ........................................... 19
Section 8.4 Section 6045(e) Filing ..................................... 20
Section 8.5 Brokerage Fees ............................................. 20
ARTICLE IX
ENVIRONMENTAL................................................................. 20
Section 9.1 Environmental Representations and Warranties ............... 20
Section 9.2 Environmental Covenants .................................... 21
ARTICLE X
FINANCIAL REPORTING .......................................................... 22
Section 10.1 Financial Reporting ........................................ 22
Section 10.2 Annual Budget .............................................. 23
ARTICLE XI
EXPENSES AND DUTY TO DEFEND .................................................. 24
Section 11.1 Payment of Expenses ........................................ 24
Section 11.2 Duty to Defend ............................................. 24
ARTICLE XII
TRANSFERS, LIENS AND ENCUMBRANCES ............................................ 25
Section 12.1 Prohibitions on Transfers, Liens and Encumbrances .......... 25
Section 12.2 Permitted Transfers ........................................ 25
Section 12.3 Right to Contest Liens ..................................... 30
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ARTICLE XIII
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS ......................... 31
Section 13.1 Further Assurances ......................................... 1
Section 13.2 Estoppel Certificates ...................................... 31
Section 13.3 Credit Enhancements ........................................ 32
ARTICLE XIV
DEFAULTS AND REMEDIES ........................................................ 33
Section 14.1 Events of Default .......................................... 33
Section 14.2 Remedies ................................................... 4
Section 14.3 General Provisions Pertaining to Remedies .................. 36
Section 14.4 [Intentionally Omitted]..................................... 37
Section 14.5 General Provisions Pertaining to Mortgagee-in-
Possession or Receiver ..................................... 37
Section 14.6 General Provisions Pertaining to Foreclosures .............. 39
Section 14.7 Application of Proceeds .................................... 40
Section 14.8 Power of Attorney........................................... 40
Section 14.9 Tenant at Sufferance........................................ 40
Section 14.10 State Laws Pertaining to Remedies .......................... 40
ARTICLE XV
LIMITATION OF LIABILITY ...................................................... 41
Section 15.1 Limitation of Liability..................................... 41
ARTICLE XVI
WAIVERS ...................................................................... 43
Section 16.1 WAIVER OF STATUTE OF LIMITATIONS ........................... 43
Section 16.2 WAIVER OF NOTICE............................................ 43
Section 16.3 WAIVER OF MARSHALLING AND OTHER
MATTERS..................................................... 43
Section 16.4 WAIVER OF TRIAL BY JURY .................................... 44
Section 16.5 WAIVER OF COUNTERCLAIM ..................................... 44
Section 16.6 WAIVER OF JUDICIAL NOTICE AND HEARING ...................... 44
Section 16.7 WAIVER OF SUBROGATION ...................................... 44
Section 16.8 GENERAL WAIVER ............................................. 45
Section 16.9 WAIVER OF DAMAGES .......................................... 45
ARTICLE XVII
NOTICES ...................................................................... 45
Section 17.1 Notices..................................................... 45
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Section 17.2 Change in Borrower's Name or Place of Business.............. 46
ARTICLE XVIII
MISCELLANEOUS ................................................................ 47
Section 18.1 Applicable Law ............................................. 47
Section 18.2 Usury Limitations........................................... 47
Section 18.3 Lender's Discretion ........................................ 47
Section 18.4 Unenforceable Provisions.................................... 47
Section 18.5 Survival of Borrower's Obligations ......................... 47
Section 18.6 Relationship Between Borrower and Lender;
No Third Party Beneficiaries ............................... 48
Section 18.7 Partial Releases; Extensions; Waivers ...................... 48
Section 18.8 Service of Process.......................................... 48
Section 18.9 Entire Agreement ........................................... 48
Section 18.10 No Oral Amendment .......................................... 49
Section 18.11 Severability ............................................... 49
Section 18.12 Covenants Run with the Land ................................ 49
Section 18.13 Time of the Essence ........................................ 49
Section 18.14 [INTENTIONALLY OMITTED] .................................... 49
Section 18.15 Joint and Several Liability ................................ 49
Section 18.16 Successors and Assigns ..................................... 49
Section 18.17 Duplicates and Counterparts ................................ 49
ARTICLE XIX
ADDITIONAL PROVISIONS PERTAINING TO STATE LAWS ............................... 50
Section 19.1 Future Advances............................................. 50
Section 19.2 Election of Remedies ....................................... 50
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MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
(this "MORTGAGE") made this [DATE], by [BORROWER] ("BORROWER"), a Delaware
limited liability company, having its principal place of business as provided in
Article 17 of this instrument, for the benefit of TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA ("LENDER"), a New York corporation, having an address at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
RECITALS:
A. Lender agreed to make and Borrower together with
certain Affiliates of Borrower as listed on EXHIBIT A hereto (each such
Affiliate, other than Borrower, is referred to herein as a "CO-BORROWER" and
collectively, as the "CO-BORROWERS") have agreed to accept a loan (the "LOAN")
in the maximum principal amount of $[MAXIMUM PRINCIPAL AMOUNT].
B. The aggregate amount of the Loan is evidenced by
________ separate promissory notes, each executed by the Borrower or a
Co-Borrower as provided on EXHIBIT A, each dated the date of this Mortgage. The
principal amount of all such promissory notes executed by the Borrower is
[PRINCIPAL AMOUNT OF PROMISSORY NOTES] (that amount or so much as is outstanding
from time to time is referred to as the "PRINCIPAL", and all such promissory
notes executed by the Borrower are referred to herein collectively as the
"NOTE(S)"). The Note(s) evidence(s) a promise to pay the Principal with interest
thereon to the order of Lender as set forth in the Note(s) and with the balance,
if any, of the Debt being due and payable on July 1, 2011 (the "MATURITY DATE").
C. To secure the Note(s), this Mortgage encumbers, among
other things, Borrower's fee interest in the real property located in [PROPERTY]
more particularly described in EXHIBIT B (the "LAND").
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions. Capitalized terms used in this Mortgage are
defined in EXHIBIT C or in the text with a cross-reference in EXHIBIT C.
Section 1.2 Rules of Construction. This Mortgage will be interpreted
in accordance with the rules of construction set forth in EXHIBIT D.
ARTICLE II
GRANTING CLAUSES
Section 2.1 Encumbered Property. Borrower irrevocably grants,
mortgages, warrants, conveys, assigns and pledges to Lender, and grants to
Lender a security interest in, the following property, rights, interests and
estates to the extent now or in the future owned or held by Borrower (the
"PROPERTY") for the uses and purposes set forth in this Mortgage forever:
(i) the Land;
(ii) all buildings and improvements located on the Land
(the "IMPROVEMENTS");
(iii) all easements; rights of way or use, including any
rights of ingress and egress; streets, roads, ways, sidewalks,
alleys and passages; strips and gores; sewer rights; water,
water rights, water courses, riparian rights and drainage
rights; air rights and development rights; oil and mineral
rights; and tenements, hereditaments and appurtenances,
operating agreements, reciprocal easement agreements in each
instance adjoining or otherwise appurtenant to or benefitting
the Land or the Improvements;
(iv) all materials intended for construction,
re-construction, alteration or repair of the Improvements,
such materials to be deemed included in the Land and the
Improvements immediately on delivery to the Land; all fixtures
and personal property that are attached to, contained in or
used in connection with the Land or the Improvements
(excluding personal property owned or leased by tenants or
other occupants of the Land or the Improvements), including:
furniture; furnishings; machinery; motors; elevators;
fittings; microwave ovens; refrigerators; office systems and
equipment; plumbing, heating, ventilating and air conditioning
systems and equipment; maintenance and landscaping equipment;
lighting, cooking, laundry, dry cleaning, refrigerating,
incinerating and sprinkler systems and equipment;
telecommunications systems and equipment; computer or word
processing systems and equipment; and security systems and
equipment; and equipment leases for any of the property
described in this subsection (the "FIXTURES AND PERSONAL
PROPERTY");
(v) all agreements, ground leases, grants of easements or
rights-of-way, permits, declarations of covenants, conditions
and restrictions, disposition and development agreements, the
purchase and sale agreement by which Borrower acquired the
Property (specifically including any indemnity obligations in
favor of Borrower contained in any such agreement), planned
unit development agreements, cooperative, condominium or
similar ownership or conversion plans, management, leasing,
brokerage or parking agreements or
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other material documents affecting Borrower or the Land, the
Improvements or the Fixtures and Personal Property, including,
without limitation, the documents described on EXHIBIT E but
expressly excluding the Leases (the "PROPERTY DOCUMENTS");
(vi) all intangible personal property relating to the
Land, the Improvements or the Fixtures and Personal Property,
including choses in action and causes of action (except those
personal to Borrower and except those owned and or leased by
Tenant or any other occupant of the Land or Improvements),
corporate and other business records, inventions, designs,
promotional materials, blueprints, plans, specifications,
patents, patent applications, trademarks, trade names, trade
secrets, goodwill, copyrights, registrations, licenses,
franchises, claims for refunds or rebates of taxes, insurance
surpluses, refunds or rebates of taxes and any letter of
credit, guarantee, claim, security interest or other security
held by or granted to Borrower to secure payment by an account
debtor of any of the accounts of Borrower arising out of the
ownership, use or operation of the Land, the Improvements or
the Fixtures and Personal Property, and documents covering all
of the foregoing; all accounts, accounts receivable,
documents, instruments, money, deposit accounts, funds
deposited in accounts of Borrower established with a bank,
savings and loan association, trust company or other financial
institution in connection with the ownership, use or operation
of the Land, the Improvements or the Fixtures and Personal
Property, including any reserve accounts or escrow accounts,
and all investments of the funds and all other general
intangibles;
(vii) all awards and other compensation paid after the date
of this Mortgage for any Condemnation (the "CONDEMNATION
AWARDS");
(viii) all proceeds of and all unearned premiums on the
Policies (the "INSURANCE PROCEEDS");
(ix) all licenses, certificates of occupancy, contracts,
management agreements, operating agreements, operating
covenants, franchise agreements, permits and variances
relating to the Land, the Improvements or the Fixtures and
Personal Property;
(x) all books, records and other information, wherever
located, which are in Borrower's possession, custody or
control or to which Borrower is entitled at law or in equity
and which are related to Borrower's business at the Property,
including all computer or other equipment used to record,
store, manage, manipulate or access the information (the
"BOOKS AND RECORDS");
(xi) all deposits held from time to time by the
Accumulations Depositary to provide reserves for Taxes and
Assessments together with interest thereon, if any (the
"ACCUMULATIONS"); and
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(xii) all after-acquired title to or remainder or reversion
in any of the property described in this Section; all
additions, accessions and extensions to, improvements of and
substitutions or replacements for any of such property; all
products and all cash and non-cash proceeds, immediate or
remote, of any sale or other disposition of any of such
property, excluding sales or other dispositions of inventory
in the ordinary course of the business of operating the Land
and the Improvements; and all additional lands, estates,
interests, rights or other property acquired by Borrower after
the date of this Mortgage for use in connection with the Land
or the Improvement, all without the need for any additional
mortgage, assignment, pledge or conveyance to Lender but
Borrower will execute and deliver to Lender, upon Lender's
request, any documents reasonably requested by Lender to
further evidence the foregoing.
Notwithstanding the foregoing, the Lender recognizes that the personal
property necessary to operate the building as a health and fitness center,
including but not limited to all fitness equipment, computer and
telecommunications equipment and other related equipment, is not the property of
Borrower, but rather Borrower's tenant, and accordingly, Lender shall have no
security interest in such personal property.
Section 2.2 Habendum Clause. The Property is conveyed to Lender to
have and to hold forever.
Section 2.3 Security Agreement.
(a) The Property includes both real and personal property and this
Mortgage is a real property mortgage and also a "security agreement" and a
"financing statement" within the meaning of the Uniform Commercial Code. By
executing and delivering this Mortgage, Borrower grants to Lender, as security
for the Obligations, a security interest in the Property to the full extent that
any of the Property may be subject to the Uniform Commercial Code. Borrower
hereby authorizes Lender, to the extent permitted by applicable law, to execute
and file financing statements signed only by a representative of Lender covering
the security interest of Lender in the Property.
(b) This Mortgage constitutes a continuously perfected fixture
financing statement under the Laws of the state or commonwealth in which the
Property is located from the date of the filing of this Mortgage for record with
the Recorder of ▇▇▇▇▇▇ County, Indiana, pursuant to IC 26-1-9-402 and
26-1-9-403. The information provided in this section is provided in order that
this Mortgage shall comply with the requirements of the Uniform Commercial Code,
for a mortgage instrument to be filed as a financing statement and for that
purpose, the following information is set forth:
(i) the Borrower is the "Debtor";
(ii) the Lender is the "Secured Party";
(iii) Name and address of Debtor:
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as set forth in the Preamble to this document
(iv) Name and address of Secured Party:
as set forth in the Preamble to this document
(v) Description of the types (or items) of property
covered by this Financing Statement:
all of the property described in section ii-xiii of the
Section entitled "ENCUMBERED PROPERTY" described or referred
to herein and included as part of the Premises.
(vi) Description of real estate to which collateral is
attached or upon which it is located:
Described in EXHIBIT B.
(vii) The tax payer identification number of the Debtor is:
[TAXPAYER ID].
Lender may file this Mortgage, 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
Mortgage or of any other security agreement or financing statement is sufficient
as a financing statement.
Section 2.4 Conditions to Grant. This Mortgage is made on the express
condition that if Borrower and the Co-Borrowers pay and perform their respective
Obligations in full in accordance with the Loan Documents executed by each of
them then, unless expressly provided otherwise in the Loan Documents, the Lender
will properly release and ▇▇▇▇ as satisfied the Loan Documents at Borrower's and
the Co-Borrowers' expense.
ARTICLE III
OBLIGATIONS SECURED
Section 3.1 The Obligations. This Mortgage secures the Principal, the
Interest, the Late Charges, the Prepayment Premiums, the Expenses, any
additional advances made by Lender in connection with the Property and all other
amounts payable under the Loan Documents executed by the Borrower (the "DEBT")
and also secures both the timely payment of the Debt as and when required and
the timely performance of all other obligations and covenants to be performed
under the Loan Documents executed by the Borrower and securing the Note(s) (the
"OBLIGATIONS"), and also secures any judgment(s) or final decree(s) rendered to
collect any Debt of Borrower to Lender and/or enforce the performance or
collection of all Obligations of the Borrower under the Mortgage or any or all
of the other Loan Documents, provided that the foregoing does not limit, qualify
or affect in any way the
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present, absolute nature of the Assignment. Notwithstanding the foregoing, the
Obligations shall exclude any obligations or covenants of the Borrower that
arise pursuant to any Indemnity, to the extent that such obligations or
covenants relate to the Property.
ARTICLE IV
TITLE AND AUTHORITY
Section 4.1 Title to the Property.
(a) Borrower represents and warrants that it has, and covenants
that at all times prior to the release of this Mortgage will continue to have,
good and marketable title in fee simple absolute to the Land and the
Improvements and good and marketable title to the Fixtures and Personal
Property, all free and clear of liens, encumbrances and charges except the
Permitted Exceptions. To Borrower's knowledge, there are no facts or
circumstances that might give rise to a lien, encumbrance or charge on the
Property.
(b) Borrower represents and warrants that it owns, and covenants
that subject to the right of the Borrower to effect Permitted Transfers as set
forth in Article XII at all times prior to the release of this Mortgage will
continue to own, all of the other Property free and clear of all liens,
encumbrances and charges except the Permitted Exceptions.
(c) Borrower represents and warrants that this Mortgage is, and
covenants that at all times prior to the release of this Mortgage this Mortgage
will remain, a valid and enforceable first lien on and security interest in the
Property, subject only to the Permitted Exceptions.
Section 4.2 Authority.
Borrower represents and warrants as of the date hereof and covenants
that at all times prior to the satisfaction or release of this Mortgage:
(a) Borrower is and will continue to be (i) duly organized,
validly existing and in good standing under the Laws of the state or
commonwealth in which it was organized and (ii) duly qualified to conduct
business, in good standing, in the state or commonwealth where the Property is
located;
(b) Borrower has and will continue to have all approvals required
by Law or otherwise and full right, power and authority to (i) own and operate
the Property and carry on Borrower's business as now conducted or as proposed to
be conducted; (ii) execute and deliver the Loan Documents to which it is a
party; (iii) grant, mortgage, warrant the title to, convey, assign and pledge
the Property to Lender pursuant to the provisions of this Mortgage; and (iv)
perform the Obligations;
(c) The execution and delivery of the Loan Documents to which
Borrower is a party and the performance of the Obligations do not and will not
conflict with or result in a
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default under any Laws or any Leases or Property Documents and do not and will
not conflict with or result in a default under any agreement binding upon
Borrower or any Affiliate of Borrower; and
(d) The Loan Documents to which Borrower or any Affiliate of
Borrower is a party constitute and will continue to constitute legal, valid and
binding obligations of such Borrower or Affiliate of Borrower, enforceable in
accordance with their respective terms.
(e) No Foreign Person. Borrower is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
(f) Litigation. There are no Proceedings or, to Borrower's
knowledge, investigations against or affecting Borrower or the Property and, to
Borrower's knowledge, there are no facts or circumstances that might give rise
to a Proceeding or an investigation against or affecting Borrower or the
Property.
ARTICLE V
PROPERTY STATUS, MAINTENANCE AND LEASES
Section 5.1 Status of the Property.
Borrower represents and warrants as of the date hereof and covenants
that at all times prior to the satisfaction or release of this Mortgage:
(a) Borrower has obtained and will maintain or cause to be
maintained in full force and effect all certificates, licenses, permits and
approvals that are issued or required by Law or by any other entity having
jurisdiction over the Property or over Borrower or that are necessary for the
Permitted Use, for occupancy and operation of the Property, for the granting of
this Mortgage or for the conduct of the Permitted Use on the Property. Without
limiting the foregoing, Borrower will cause all employees of Borrower or
Sponsor, or third party service providers who use the Property as a means of
delivering the services (by way of example but not of limitation, such providers
include personal trainers and massage therapists) (i) to be appropriately
licensed or certified as required by Law and (ii) to carry or be covered by
customary and reasonable amounts of insurance.
(b) The Property is and will continue to be serviced by all
utilities required for the Permitted Use of the Property;
(c) All roads and streets necessary for service of and access to
the Property for the current or contemplated use of the Property have been
completed and are and will continue to be serviceable, physically open and
available for use by the public to access the Property;
(d) The Property is free from damage caused by a Casualty; and
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(e) All costs and expenses of labor, materials, supplies and
equipment used in the construction of the Improvements have been paid in full or
that provision for payment of such items will be made in the normal course of
Borrower's business.
Section 5.2 Maintenance of the Property. Subject to Article VII,
Borrower will maintain or cause to be maintained, the Property in thorough
repair and good and safe condition, suitable for the Permitted Use, including,
to the extent necessary, replacing the Fixtures and Personal Property with
property at least equal in quality and condition to that being replaced.
Borrower will not erect any new buildings, building additions or other
structures on the Land or otherwise materially alter the Improvements without
Lender's prior consent which may be withheld in Lender's sole discretion.
Section 5.3 Change in Use. Borrower will use and permit the use of the
Property for the Permitted Use and for no other purpose. Without limiting the
foregoing, Borrower may, in connection with the Permitted Use, permit the
sublease of not more than 10,000 square feet of the Improvements for cafes,
salons, local hospitals providing rehabilitative physical therapy, or other uses
compatible with the Permitted Use as reasonably approved by Lender. Borrower
will provide Lender with prior written notice of any reduction of monthly
membership dues at rates lower than those in effect on the date hereof.
Section 5.4 Waste. Borrower will not commit or permit any waste,
impairment or deterioration of the Property or any material alteration,
demolition or removal of any of the Property without Lender's prior consent
which may be withheld in Lender's sole discretion.
Section 5.5 Inspection of the Property. Lender has the right to enter
and inspect the Property on reasonable prior notice, except in the case of an
emergency, when no prior notice is necessary. Lender has the right to engage an
independent expert to review and report on Borrower's compliance with Borrower's
obligations under this Mortgage to maintain the Property, comply with Law and
refrain from waste, impairment or deterioration of the Property and the
alteration, demolition or removal of any of the Property except as may be
permitted by the provisions of this Mortgage. If the independent expert's report
discloses material failure to comply with such obligations or if Lender engages
the independent expert after the occurrence of an Event of Default, then the
independent expert's review and report will be at Borrower's expense, payable on
demand.
Section 5.6 Leases and Rents.
(a) Borrower assigns the Leases and the Rents to Lender absolutely
and not merely as additional collateral or security for the payment and
performance of the Obligations, but subject to a license back to Borrower of the
right to collect the Rents unless and until an Event of Default occurs at which
time the license will terminate automatically, all as more particularly set
forth in the Assignment, the provisions of which are incorporated in this
Mortgage by reference.
(b) Borrower appoints Lender as Borrower's attorney-in-fact to
execute unilaterally and to record, at Lender's election, a document
subordinating this Mortgage to
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the Leases, provided that the subordination will not affect (i) the priority of
Lender's entitlement to Insurance Proceeds or Condemnation Awards or (ii) the
priority of this Mortgage over intervening liens or liens arising under or with
respect to the Leases.
Section 5.7 Parking. Borrower will provide, maintain, police and light
(or cause to be provided, maintained, policed or lit) parking areas within the
Property, including any sidewalks, aisles, streets, driveways, sidewalk cuts and
rights-of-way to and from the adjacent public streets, in a manner consistent
with the Permitted Use and sufficient to accommodate the greatest of: (i) the
number of parking spaces required by Law; (ii) the number of parking spaces
required by the Leases and the Property Documents; or (iii) the number of
parking spaces set forth on Schedule 5.7. The parking areas will be reserved and
used exclusively for ingress, egress and parking for Borrower and the tenants
under the Leases and their respective employees, customers and invitees and in
accordance with the Leases and the Property Documents.
Section 5.8 Separate Tax Lot. The Property is and will remain assessed
for real estate tax purposes as one or more wholly independent tax lots,
separate from any property that is not part of the Property.
Section 5.9 Changes in Zoning or Restrictive Covenants. Borrower will
not (i) initiate, join in or consent to any change in any Laws pertaining to
zoning, any restrictive covenant or other restriction which would modify the
permitted uses for the Property; (ii) permit the Property to be used to fulfil
any requirements of Law for the construction or maintenance of improvements on
property that is not part of the Property; (iii) permit the Property to be used
for any purpose not included in the Permitted Use; or (iv) impair the integrity
of the Property as a single, legally subdivided zoning lot separate from all
other property.
Section 5.10 Lender's Right to Appear. Lender has the right to appear
in and defend any Proceeding brought regarding the Property and to bring any
Proceeding, in the name and on behalf of Borrower or in Lender's name, which
Lender, in its reasonable discretion, determines should be brought to protect
Lender's interest in the Property.
ARTICLE VI
IMPOSITIONS AND ACCUMULATIONS
Section 6.1 Impositions. Subject to Section 6.2:
(a) Borrower will pay each Imposition at least 15 days before the
date (the "IMPOSITION PENALTY DATE") that is the earlier of (i) the date on
which the Imposition becomes delinquent and (ii) the date on which any penalty,
interest or charge for non-payment of the Imposition accrues.
(b) At least 10 days before each Imposition Penalty Date, Borrower
will deliver to Lender a receipted ▇▇▇▇ or other evidence of payment.
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(c) Borrower, at its own expense, may contest any Taxes or
Assessments, provided that the following conditions are met:
(i) not less than 30 days prior to the Imposition Penalty
Date, Borrower delivers to Lender notice of the proposed
contest;
(ii) the contest is by a Proceeding promptly initiated and
conducted diligently and in good faith;
(iii) there is no Event of Default;
(iv) the Proceeding suspends the collection of the
contested Taxes or Assessments;
(v) the Proceeding is permitted under and is conducted in
accordance with the Leases and the Property Documents;
(vi) the Proceeding precludes imposition of criminal or
civil penalties and sale or forfeiture of the Property and
Lender will not be subject to any civil suit;
(vii) Borrower deposits with the Accumulations Depositary
reserves or furnishes a bond or other security satisfactory to
Lender, in either case in an amount sufficient to pay the
contested Taxes or Assessments, together with all interest and
penalties or Borrower pays all of the contested Taxes or
Assessments under protest.
(d) Installment Payments. If any Assessment is payable in
installments, Borrower may pay the Assessment in installments over the longest
period over which such payments may be made without accrual of penalty or risk
of forfeiture.
Section 6.2 Accumulations.
(a) Borrower made an initial deposit with either Lender or a
mortgage servicer or financial institution designated or approved by Lender from
time to time to receive, hold and disburse the Accumulations in accordance with
this Section (the "ACCUMULATIONS DEPOSITARY"). On the first day of each calendar
month during the Term Borrower will deposit with the Accumulations Depositary an
amount equal to one-twelfth (1/12) of the annual Taxes and Assessments as
determined pursuant to Section 3 of the Real Estate Tax Escrow and Security
Agreement executed by Borrower, Lender and ▇▇▇▇▇▇▇ Financial Services, Ltd. (the
"TAX AGREEMENT") relating to the Property. At least 45 days before each
Imposition Penalty Date, Borrower will deliver to the Accumulations Depositary
any bills and other documents that are necessary to pay the Taxes and
Assessments.
(b) Subject to the provisions contained below in this Section
6.2(b), Lender will direct the Accumulations Depository to apply the
Accumulations to the payment of Taxes
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and Assessments. Lender will cause any excess Accumulations after payment of
Taxes and Assessments to be returned to Borrower or credited against future
payments of the Accumulations, at Lender's election or as required by Law. If
the Accumulations are not sufficient to pay Taxes and Assessments, Borrower will
pay the deficiency to the Accumulations Depositary within 5 days of demand. At
any time after an Event of Default occurs, Lender may apply the Accumulations as
a credit against any portion of the Debt selected by Lender in its sole
discretion, and such application shall not relieve Borrower to pay Impositions
in a timely manner.
(c) The Accumulations Depositary will hold the Accumulations as
additional security for the Obligations until applied in accordance with the
provisions of this Mortgage. If Lender is not the Accumulations Depositary, the
Accumulations Depositary will deliver the Accumulations to Lender upon Lender's
demand at any time after an Event of Default.
(d) If the Property is sold or conveyed other than by foreclosure
or transfer in lieu of foreclosure, all right, title and interest of Borrower to
the Accumulations will automatically, and without necessity of further
assignment, be held for the account of the new owner, subject to the provisions
of this Section and Borrower will have no further interest in the Accumulations.
(e) The Accumulations Depositary has deposited the initial deposit
and will deposit the monthly deposits into a separate interest bearing account
in the name of Lender as secured party, all in accordance with the Tax
Agreement. Interest shall accrue and be credited upon such deposits in
accordance with the provisions of the Tax Agreement.
(f) Lender shall direct the Accumulations Depositary to pay, any
Taxes or Assessments unless Borrower is contesting the Taxes or Assessments in
accordance with the provisions of this Mortgage, in which event any payment of
the contested Taxes or Assessments will be made under protest in the manner
prescribed by Law or, at Lender's election, will be withheld.
(g) If Lender assigns this Mortgage, Lender will pay, or cause the
Accumulations Depositary to pay, the unapplied balance of the Accumulations to
or at the direction of the assignee. Simultaneously with the payment, Lender and
the Accumulations Depositary will be released from all future liability with
respect to Accumulations and Borrower will look solely to the assignee with
respect to future Accumulations, provided that Lender and Accumulations
Depositary shall also be released from liability with respect to all
Accumulations to the extent that Lender's assignee assumes in writing the
obligations of Lender and the Accumulations Depositary with respect thereto.
When the Obligations have been fully satisfied, any unapplied balance of the
Accumulations will be returned to Borrower.
(h) Changes in Tax Laws. If a Law requires the deduction of the
Debt from the value of the Property for the purpose of taxation or imposes a
tax, either directly or indirectly, on the Debt, any Loan Document executed by
the Borrower or Lender's interest in the Property, except a tax on Lender's
income generally, Borrower will pay the tax with
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interest and penalties, if any. If Lender determines that Borrower's payment of
the tax may be unlawful, unenforceable, usurious or taxable to Lender, the Debt
will become immediately due and payable at par and without penalty or premium on
60 days' prior notice unless the tax must be paid within the 60-day period, in
which case, the Debt will be due and payable within the lesser period.
ARTICLE VII
INSURANCE, CASUALTY, CONDEMNATION AND RESTORATION
Section 7.1 Insurance Coverages.
(a) Borrower will maintain, or cause the tenants of the Property
to maintain, such insurance coverages and endorsements in form and substance and
in amounts as Lender may require in its reasonable discretion, from time to
time. Borrower acknowledges the reasonability of the coverages and endorsements
that Lender has required as a condition of making the Loan. Until Lender
notifies Borrower of changes in Lender's requirements, Borrower will maintain
not less than the insurance coverages and endorsements Lender required for
closing of the Loan.
(b) The insurance, including renewals, required under this Section
will be issued on valid and enforceable policies and endorsements satisfactory
to Lender (the "POLICIES"). Each Policy will contain a standard waiver of
subrogation and a replacement cost endorsement and will provide for Lender to
receive not less than 30 days' prior written notice of any cancellation,
termination or non-renewal of a Policy or any material change other than an
increase in coverage and that Lender will be named under a standard mortgage
endorsement as loss payee.
(c) The insurance companies issuing the Policies (the "INSURERS")
must be authorized to do business in the State or Commonwealth where the
Property is located, must have been in business for at least 5 years, must carry
an A.M. Best Company, Inc. policy holder rating of A or better and an A.M. Best
Company, Inc. financial category rating of Class X or better and must be
otherwise satisfactory to Lender. Lender may select an alternative credit rating
agency and may impose different credit rating standards for the Insurers.
Notwithstanding Lender's right to approve the Insurers and to establish credit
rating standards for the Insurers, Lender will not be responsible for the
solvency of any Insurer.
(d) Notwithstanding Lender's rights under this Article, Lender
will not be liable for any loss, damage or injury resulting from the inadequacy
or lack of any insurance coverage.
(e) Borrower will comply with the provisions of the Policies and
with the requirements, notices and demands imposed by the Insurers and
applicable to Borrower or the Property.
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(f) Borrower will pay the Insurance Premiums for each Policy not
less than 30 days before the expiration date of the Policy being replaced or
renewed and will deliver to Lender an original or, if a blanket policy, a
certified copy of each Policy marked "Paid" not less than 15 days prior to the
expiration date of the Policy being replaced or renewed.
(g) Borrower will not carry separate insurance concurrent in kind
or form or contributing in the event of loss with any other insurance carried by
Borrower.
(h) Borrower will not carry any of the insurance required under
this Section on a blanket or umbrella policy without in each instance Lender's
prior approval which may be withheld in Lender's sole discretion. If Lender
approves, Borrower will deliver to Lender a certified copy of the blanket policy
which shall allocate to the Property the amount of coverage required under this
Section and otherwise shall provide the same coverage and protection as would a
separate policy insuring only the Property without the possibility of any
reduction of insurance benefits by reason of any claim made against such policy
related to another property insured thereunder.
(1) Borrower will give the Insurers prompt notice of any change in
ownership or occupancy of the Property. This subsection does not abrogate the
prohibitions on transfers set forth in this Mortgage.
(j) If the Property is sold at a foreclosure sale or otherwise is
transferred so as to extinguish the Obligations, all of Borrower's right, title
and interest in and to the Policies then in force will be transferred
automatically to the purchaser or transferee.
Section 7.2 Casualty and Condemnation.
(a) Borrower will give Lender notice of any Casualty immediately
after it occurs and will give Lender notice of any Proceeding in Condemnation
immediately after Borrower receives notice of commencement or notice that such a
Proceeding will be commencing. Borrower immediately will deliver to Lender
copies of all documents Borrower delivers or receives relating to the Casualty
or the Proceeding, as the case may be.
(b) Borrower authorizes Lender, at Lender's option, to act on
Borrower's behalf to collect, adjust and compromise any claims for loss, damage
or destruction under the Policies on such terms as Lender determines in Lender's
reasonable discretion. Borrower authorizes Lender to act, at Lender's option, on
Borrower's behalf in connection with any Condemnation Proceeding. Borrower will
execute and deliver to Lender all documents requested by Lender and all
documents as may be required by Law to confirm such authorizations. Nothing in
this Section will be construed to limit or prevent Lender from joining with
Borrower either as a co-defendant or as a co-plaintiff in any Condemnation
Proceeding.
(c) If Lender elects not to act on Borrower's behalf as provided
in this Section, then Borrower promptly will file and prosecute all claims
(including Lender's claims) relating to the Casualty and will prosecute or
defend (including defense of Lender's interest)
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any Condemnation Proceeding. Borrower will have the authority to settle or
compromise the claims or Proceeding, as the case may be, provided that Lender
has approved, in Lender's sole discretion, any compromise or settlement that
exceeds $250,000.00. Any check for Insurance Proceeds or Condemnation Awards, as
the case may be (the "PROCEEDS") will be made payable to Lender and Borrower.
Borrower will endorse the check to Lender immediately upon Lender presenting the
check to Borrower for endorsement or if Borrower receives the check first, will
endorse the check immediately upon receipt and forward it to Lender. If any
Proceeds are paid to Borrower, Borrower immediately will deposit the Proceeds
with Lender, to be applied or disbursed in accordance with the provisions of
this Mortgage. Lender will be responsible for only the Proceeds actually
received by Lender.
Section 7.3 Application of Proceeds. After deducting the cots incurred
by Lender in collecting the Proceeds. Lender may, in its sole discretion, (i)
apply the Proceeds as a credit against any portion of the Debt selected by
Lender in its sole discretion at par, without any prepayment premium; (ii) apply
the Proceeds to restore the Improvements, provided that Lender will not be
obligated to see to the proper application of the Proceeds and provided further
that any amounts released for Restoration will not be deemed a payment on the
Debt; or (iii) deliver the Proceeds to Borrower.
Section 7.4 Conditions to Availability of Proceeds for Restoration.
Notwithstanding the preceding Section, after a Casualty or a Condemnation (a
"DESTRUCTION EVENT") Lender will make the Proceeds (less any costs incurred by
Lender in collecting the Proceeds) available for Restoration in accordance with
the conditions for disbursements set forth in the Section entitled
"RESTORATION", provided that the following conditions are met:
(i) The entity specified in the Preamble paragraph of
this document as the "Borrower" or the transferee under a
Permitted Transfer, if any, continues to be Borrower at the
time of the Destruction Event and at all times thereafter
until the Proceeds have been fully disbursed;
(ii) no Event of Default under the Loan Documents to which
Borrower or an Affiliate of Borrower is a party exists at the
time of the Destruction Event;
(iii) all Leases (but not subleases) in effect immediately
prior to the Destruction Event and all Property Documents in
effect immediately prior to the Destruction Event that are
essential to the use and operation of the Property continue in
full force and effect without abatement of Rent, in the case
of Leases, notwithstanding the Destruction Event;
(iv) if the Destruction Event is a Condemnation, Borrower
delivers to Lender evidence satisfactory to Lender that the
Improvements can be restored to an economically and
architecturally viable unit;
(v) Borrower delivers to Lender evidence satisfactory to
Lender that the Proceeds are sufficient to complete
Restoration or if the Proceeds are insufficient to complete
Restoration, Borrower first deposits with Lender funds
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("ADDITIONAL FUNDS") that when added to the Proceeds will be
sufficient to complete Restoration;
(vi) if the Destruction Event is a Casualty, Borrower
delivers to Lender evidence satisfactory to Lender that the
Insurer under the affected Policy has not denied liability
under the Policy as to Borrower or the insured under the
Policy;
(vii) Lender is satisfied that the proceeds of any business
interruption insurance in effect together with other available
gross revenues from the Property or from other sources
satisfactorily demonstrated to Lender are sufficient to pay
Debt Service Payments after paying the Impositions, Insurance
Premiums, reasonable and customary operating expenses and
capital expenditures until Restoration is complete; and
(viii) Lender is satisfied that Restoration will be
completed on or before the date (the "RESTORATION COMPLETION
DATE") that is the earliest of: (A) 12 months prior to the
Maturity Date; (B) 12 months after the Destruction Event; (c)
the earliest date required for completion of Restoration under
any Lease or any Property Document; or (D) any date required
by Law.
Section 7.5 Restoration.
(a) If the total Proceeds for any Destruction Event are
$250,000.00 or less, no Event of Default is continuing, Lender will disburse to
Borrower the entire amount received by Lender and Borrower will commence
Restoration promptly after the Destruction Event and complete Restoration not
later than the Restoration Completion Date.
(b) If the Proceeds for any Destruction Event exceed $250,000.00
and Lender elects or is obligated by Law or under this Article to make the
Proceeds available for Restoration, Lender will disburse the Proceeds and any
Additional Funds (the "RESTORATION FUNDS") upon Borrower's request as
Restoration progresses, generally in accordance with normal construction lending
practices for disbursing funds for construction costs and provided that the
following conditions are met:
(i) Borrower commences Restoration promptly after the
Destruction Event and completes Restoration on or before the
Restoration Completion Date;
(ii) if Lender requests, Borrower delivers to Lender prior
to commencing Restoration, for Lender's approval, plans and
specifications and detailed budget for the Restoration;
(iii) Borrower delivers to Lender satisfactory evidence of
the costs of Restoration incurred prior to the date of the
request, and such other documents as Lender may request
including mechanic's liens, waivers and title insurance
endorsements;
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(iv) Borrower pays all costs of Restoration whether or not
the Restoration Funds are sufficient and, if at any time
during Restoration, Lender determines that the undisbursed
balance of the Restoration Funds is insufficient to complete
Restoration, Borrower deposits with Lender, as part of the
Restoration Funds, an amount equal to the deficiency within 30
days of receiving notice of the deficiency from Lender: and
(v) there is no Event of Default continuing under the
Loan Documents to which Borrower or an Affiliate of Borrower
is a party at the time Borrower requests funds or at the time
Lender disburses funds.
(c) If an Event of Default occurs at any time after the
Destruction Event, then Lender will have no further obligation to make any
remaining Proceeds available for Restoration and may apply any remaining
Proceeds as a credit against any portion of the Debt selected by Lender in its
sole discretion.
(d) Lender may elect at any time prior to commencement of
Restoration or while work is in progress, to retain, at Borrower's expense, an
independent engineer or other consultant to review any plans and specifications
required by Lender, to inspect the work as it progresses and to provide reports.
If any matter included in a report by the engineer or consultant is
unsatisfactory to Lender, Lender may suspend disbursement of the Restoration
Funds until the unsatisfactory matters contained in the report are resolved to
Lender's satisfaction.
(e) If Borrower fails to commence and complete Restoration in
accordance with the terms of this Article, then in addition to the Remedies,
Lender may elect by notice to Borrower to restore the Improvements on Borrower's
behalf and reimburse itself out of the Restoration Funds for costs and expenses
incurred by Lender in restoring the Improvements, or Lender may apply the
Restoration Funds as a credit against any portion of the Debt selected by Lender
in its sole discretion.
(f) Lender may commingle the Restoration Funds with its general
assets and will not be liable to pay any interest or other return on the
Restoration Funds unless otherwise required by Law. Lender will not hold any
Restoration Funds in trust. Lender may elect to deposit the Restoration Funds
with a depositary satisfactory to Lender under a disbursement and security
agreement satisfactory to Lender.
(g) Borrower will pay all of Lender's expenses incurred in
connection with a Destruction Event or Restoration. If Borrower fails to do so,
then in addition to the Remedies, Lender may from time to time reimburse itself
out of the Restoration Funds.
(h) If any excess Proceeds remain after Restoration, Lender may
elect, in its sole discretion either to apply the excess as a credit against any
portion of the Debt, at par without penalty or premium, as selected by Lender in
its sole discretion or to deliver the excess to Borrower.
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(i) Notwithstanding anything to the contrary in this Mortgage,
Borrower shall be released from its Restoration obligations to the extent that
Lender causes the Proceeds to be applied to reduction of the Debt.
ARTICLE VIII
COMPLIANCE WITH LAW AND AGREEMENTS
Section 8.1 Compliance with Law. Borrower, the Property and the use of
the Property comply and will continue to comply with Law and with all agreements
and conditions necessary to preserve and extend all rights, licenses, permits,
privileges, franchises and concessions (including zoning variances, special
exceptions and non-conforming uses) relating to the Property or Borrower.
Borrower will notify Lender of the commencement of any investigation or
Proceeding relating to a possible violation of Law immediately after Borrower
receives notice thereof and will deliver promptly to Lender copies of all
documents Borrower receives or delivers in connection with the investigation or
Proceeding. Without Lender's prior consent, Borrower will not alter the Property
in any manner that would materially increase Borrower's responsibilities for
compliance with Law.
Section 8.2 Compliance with Agreements. Borrower is not in default and
to Borrower's knowledge, there are no defaults, events of defaults or events
which, with the passage of time or the giving of notice, would constitute an
event of default under the Property Documents. Borrower will pay and perform all
of its obligations under the Property Documents as and when required by the
Property Documents. Without limiting the provisions and requirements of the
Assignment, Borrower will cause all other parties to the Property Documents to
pay and perform their obligations under the Property Documents as and when
required by the Property Documents to the extent commercially reasonable to do
so. Borrower will not do any of the following to the extent doing so would
materially or adversely affect the Property or Lender's rights and interests
under the Loan Documents: amend or waive any provisions of the Property
Documents; exercise any options under the Property Documents; give any approval
required or permitted under the Property Documents; cancel or surrender any of
the Property Documents; or release or discharge or permit the release or
discharge of any party to or entity bound by any of the Property Documents;
without, in each instance, Lender's prior approval (excepting therefrom all
service contracts or other agreements entered into in the normal course of
business that are cancelable upon not more than 30 days' notice). Borrower
promptly will deliver to Lender copies of any notices of default or of
termination that Borrower receives or delivers relating to any Property
Document.
Section 8.3 ERISA Compliance.
(a) Borrower is not and will continue not to be an "employee
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA") that is subject to Title I of ERISA or a "plan"
as defined in Section 4975(e)(1) of the Code that is subject to Section 4975 of
the Code, and Borrower's assets do not and will
17
not constitute "plan assets" of one or more such plans for purposes of Title I
of ERISA or Section 4975 of the Code.
(b) Borrower will not engage in any transaction which would cause
any obligation or any action under the Loan Documents to which Borrower or an
Affiliate of Borrower, is a party including Lender's exercise of the Remedies,
to be a non-exempt prohibited transaction under ERISA.
Section 8.4 Section 6045(e) Filing. Borrower will supply or cause to
be supplied to Lender either (i) a copy of a completed Form ▇▇▇▇-▇, ▇▇▇▇▇▇▇▇▇
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Proceeds
prepared in connection with Borrower's acquisition of the Property by Borrower's
attorney or other person responsible for the preparation of the form, together
with a certificate from the person who prepared the form to the effect that the
form has, to the best of the preparer's knowledge, been accurately prepared and
that the preparer will timely file the form; or (ii) a certification from
Borrower that the Loan is a refinancing of the Property or is otherwise not
required to be reported to the Internal Revenue Service pursuant to Section
6045(e) of the Code. Under no circumstances will Lender or Lender's counsel be
obligated to file the reports or returns.
Section 8.5 Brokerage Fees. Borrower represents and warrants to Lender
that except as set forth on Schedule 8.5 hereto no person or entity has any
claim for a brokerage fee, finder's fee, commission, premium or other such
charge against Borrower or the Property, with respect to Borrower's acquisition
of the Property, to Borrower's knowledge with respect to the making of the Loan,
or with respect to any leasing of the Property. Borrower shall indemnify and
hold Lender harmless from the claim of any person or entity who asserts any such
claim.
ARTICLE IX
ENVIRONMENTAL
Section 9.1 Environmental Representations and Warranties.
(a) Except as disclosed in the Environmental Report during the
period Borrower or any affiliate of Borrower has owned the Property and as of
the date of this Mortgage:
(i) to Borrower's knowledge, no Environmental Activity
has occurred or is occurring on the Property other than the
use, storage, and disposal of de minimis quantities of
Hazardous Materials in the ordinary course of business
consistent with the Permitted Use and in compliance with all
Environmental Laws without release of Hazardous Materials; and
(ii) to Borrower's knowledge (but without duty of
inquiry), no Environmental Activity has occurred or is
occurring on any property in the vicinity of the Property from
which there is a material risk that Hazardous Materials will
migrate, ▇▇▇▇▇, flow, drain, seep, blow or drift onto the
Property.
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(b) Except as disclosed in the Environmental Report, at all times
prior to acquisition of the Property by Borrower or any affiliate of Borrower:
(i) to Borrower's knowledge, no Environmental Activity
occurred on the Property other than the use, storage and
disposal of de minimis quantities of Hazardous Materials in
the ordinary course of business consistent with the Permitted
Use and in compliance with all Environmental Laws without
release of Hazardous Materials; and
(ii) to Borrower's knowledge (but without duty of
inquiry), no Environmental Activity occurred on any property
in the vicinity of the Property from which there is a material
risk that Hazardous Materials will migrate, ▇▇▇▇▇, flow,
drain, seep, blow or drift onto the Property.
(c) To Borrower's knowledge, after diligent inquiry and
investigation, none of the Property is within the definition of the term
"Property" as used in the Indiana Responsible Property Transfer Law ("IRPTL")
(IC 13-25-3-1 et seq.) and the transaction evidenced by this Mortgage is not
subject to the provisions of said act.
(d) For the purposes of this Section, the phrase "use of the
Property" includes use by tenants and the phrase "on the Property" means on, in,
above and below the Property.
Section 9.2 Environmental Covenants.
(a) Borrower represents and warrants that the Leases prohibit
Environmental Activity on the Property other than the use, storage and disposal
of de minimis quantities of Hazardous Materials in the ordinary course of
business consistent with the Permitted Use and in compliance with all
Environmental Laws. Without limiting the obligation of Borrower to enforce any
other provisions of the Leases, Borrower will enforce all provisions of the
Leases with respect to Environmental Activity. Without limiting the foregoing,
Borrower shall promptly inspect any portion of the Property as to which Borrower
has information or suspicion that Environmental Activity in violation of a Lease
has occurred or is threatened, and Borrower will promptly require the tenant
under any such Lease to completely remediate the effect of any such
Environmental Activity. Borrower covenants to promptly undertake such
remediation if the tenant under such Lease fails to do so.
(b) Borrower will notify Lender immediately upon Borrower becoming
aware of (i) any actual, suspected or threatened violation of Environmental Laws
with respect to the Property or with respect to any property in the vicinity of
the Property, and (ii) any Environmental Activity with respect to the Property
or with respect to any property in the vicinity of the Property. Borrower
promptly will deliver to Lender copies of all documents delivered to or received
by Borrower regarding the matters set forth in this subsection, including
notices of Proceedings or investigations concerning any Environmental Activity
or concerning Borrower's status as a potentially responsible party (as defined
in the Environmental Laws). Borrower's notification to Lender in accordance with
the provisions of this subsection will not be deemed to excuse any default under
the Loan Documents
19
resulting from the Environmental Activity or the violation of Environmental Laws
that is the subject of the notice.
(c) From time to time at Lender's request, Borrower will deliver
to Lender any information known and documents available to Borrower relating to
the environmental condition of the Property.
(d) Lender may perform or engage an independent consultant to
perform an assessment of the environmental condition of the Property and of
Borrower's compliance with this Section on an annual basis or at any time for
reasonable cause or after an Event of Default. In connection with the
assessment: (i) Lender or consultant may enter and inspect the Property and
perform tests of the air, soil, ground water and building materials; (ii)
Borrower will cooperate and use best efforts to cause tenants and other
occupants of the Property to cooperate with Lender or consultant; (iii) Borrower
will accept custody of and arrange for lawful disposal of any Hazardous
Materials required to be disposed of as a result of the tests; (iv) neither
Lender nor consultant will have liability to Borrower with respect to the
results of the assessment; and (v) Lender will not be responsible for any damage
to the Property resulting from the negligence or other misconduct of Lender's
consultants in performing the tests described in this subsection. The
consultant's assessment and reports will be at Borrower's expense if the reports
disclose any material adverse change in the environmental condition of the
Property from that disclosed in the Environmental Report or if Lender engaged
the consultant when Lender had reasonable cause to believe Borrower was not in
compliance with the terms of this Article or after the occurrence of an Event of
Default.
(e) If Lender has reasonable cause to believe that there is
Environmental Activity at the Property, Lender may elect in its sole discretion
to release from the lien of this Mortgage any portion of the Property affected
by the Environmental Activity and Borrower will accept the release.
(f) Borrower shall not allow any of the Property to become subject
to or constitute "Property" subject to IRPTL.
ARTICLE X
FINANCIAL REPORTING
Section 10.1 Financial Reporting.
(a) Within 120 days after the close of each Fiscal Year Borrower
will deliver to Lender annual financial statements for the fiscal Year,
including partial Fiscal Years (the "ANNUAL FINANCIAL STATEMENTS") for the
Borrower and the Sponsor (defined below). The Annual Financial Statements will
conform, in form and level of detail to those forms of statements previously
delivered by FCA Real Estate Holdings, LLC to Lender and accepted by Lender in
writing. The Annual Financial Statements:
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(i) shall be audited by a CPA;
(ii) shall be accompanied by an opinion of the CPA that in
all material respects, such Annual Financial Statement fairly
presents the respective financial positions of entities to
which such statements relate;
(iii) shall be separate and distinct from any consolidated
statement or report for the entity to which they relate; and
(iv) include an annual certification of rent roll, in the
form attached hereto as EXHIBIT F.
(b) Borrower will keep full and accurate Financial Books and
Records for each Fiscal Year. Borrower will permit Lender or Lender's
accountants or auditors to inspect or audit the Financial Books and Records from
time to time without notice. Borrower will maintain the Financial Books and
Records for each Fiscal Year for not less than 3 years after the date Borrower
delivers to Lender the Annual Financial Statement and the other financial
certificates, statements and information to be delivered to Lender for the
Fiscal Year. Financial Books and Records will be maintained at Borrower's
address set forth in the section entitled "NOTICES" or at any other location as
may be approved by Lender.
(c) Borrower shall also deliver, from time to time, such other
financial reports and information regarding Borrower, Sponsor and the Property,
including capital and operating budgets for the then current Fiscal Year, as
Lender shall reasonably require.
Section 10.2 Annual Budget. Not less than 45 days prior to the end of
each Fiscal Year, Borrower will deliver to Lender a detailed comparative budget
(the "BUDGET") for the Property for the next succeeding Fiscal Year showing
anticipated operating expenses, Insurance Premiums, Impositions, leasing
commissions, capital improvement costs, tenant improvement costs, operating and
capital projections for the succeeding five years and any other information
Lender requests. Unless Lender notifies Borrower within 60 days after Lender
receives the Budget that Lender disputes information in the Budget, the Budget
as submitted will constitute the Budget for the next succeeding Fiscal Year. If
Borrower concludes in good faith that a Budget needs material revision, Borrower
will submit a revised Budget to Lender, together with a detailed explanation of
the revisions. Unless Lender notifies Borrower within 60 days after Lender
receives the revised Budget that Lender disputes information in the revised
Budget, the revised Budget as submitted will constitute the Budget for the
remainder of the then Current Fiscal Year. Borrower and Lender will use
reasonable efforts to resolve promptly any differences over a Budget or revised
Budget. If Borrower and Lender fail to agree on a Budget or revised Budget,
Borrower will continue to manage and operate the Property under the last
undisputed Budget.
Borrower waives any defense or right of offset to the Obligations, and
any claim or counterclaim against Lender, arising out of any discussions between
Borrower and Lender regarding any Budget or revised Budget delivered to Lender
or the resolution of any disagreements relating to a Budget or revised Budget,
including any defense, right of offset,
21
claim or counterclaim alleging in substance, that by virtue of such delivery,
discussions or resolution, Lender has interfered with, influenced or controlled
Borrower or the operations at the Property.
ARTICLE XI
EXPENSES AND DUTY TO DEFEND
Section 11.1 Payment of Expenses.
(a) Borrower is obligated to pay all fees and expenses (the
"EXPENSES") incurred by Lender or that are otherwise payable in connection with
the Loan, the Property or Borrower, including attorneys' fees and expenses and
any fees and expenses relating to (i) the preparation, execution,
acknowledgment, delivery and recording or filing of the Loan Documents executed
by Borrower; (ii) any Proceeding or other claim asserted against Lender; (iii)
except as otherwise provided in the Loan Documents, any inspection, assessment,
survey and test permitted under the Loan Documents executed by Borrower; (iv)
any Destruction Event; (v) the preservation of Lender's security and the
exercise of any rights or remedies available at Law, in equity or otherwise; and
(vi) the Leases and the Property Documents.
(b) Borrower will pay the Expenses immediately on demand. If
Lender pays any of the Expenses, Borrower will reimburse Lender the amount paid
by Lender immediately upon demand. The Expenses constitute a portion of the Debt
secured by this Mortgage, and the failure by Borrower to pay Expense shall be
subject to the provisions of the Loan Documents relating to monetary defaults.
Section 11.2 Duty to Defend. If Lender or any of its trustees,
officers, participants, employees or affiliates is a party in any Proceeding
relating to the Property, Borrower or the Loan, Borrower will indemnify and hold
harmless the party and will defend the party with attorneys and other
professionals retained by Borrower and approved by Lender. Lender may elect to
engage its own attorneys and other professionals, at Borrower's expense, to
defend or to assist in the defense of the party. In all events, case strategy
will be determined by Lender (or by Lender and Borrower together if both are
defendants in the Proceeding) if Lender so elects and no Proceeding will be
settled without Lender's prior approval which may be withheld in its sole
discretion.
ARTICLE XII
TRANSFERS, LIENS AND ENCUMBRANCES
Section 12.1 Prohibitions on Transfers, Liens and Encumbrances.
(a) Borrower acknowledges that in making the Loan, Lender is
relying to a material extent on the business expertise and net worth of Borrower
and Borrower's members or principals and on the continuing interest that each of
them has, directly or
22
indirectly, in the Property. Accordingly, except as specifically set forth in
this Mortgage, Borrower (i) will not, and will not permit its partners, members
or principals to, effect a Transfer without Lender's prior approval, which may
be withheld in Lender's sole discretion and (ii) will keep the Property free
from all liens and encumbrances other than the lien of this Mortgage and the
Permitted Exceptions. A "Transfer" is defined as any sale, grant, lease (other
than Leases in effect on the date of this Mortgage and bona fide third-party
subleases with tenants), conveyance, assignment or other transfer of, or any
encumbrance or pledge against, the Property, any interest in the Property, any
interest of Borrower's members or principals in the Property, or any change in
Borrower's composition, or the composition of Borrower's members or principals
or the composition of Sponsor, in each instance whether voluntary or
involuntary, direct or indirect, by operation of law or otherwise and including
the grant of an option or the execution of an agreement relating to any of the
foregoing matters.
(b) Borrower represents, warrants and covenants that LIFE TIME
FITNESS, Inc. ("Sponsor") is a Minnesota corporation, the shareholders of which
as of the date hereof are as set forth in Schedule H of the Commitment
(collectively, the "INVESTORS"). LTF USA Real Estate, LLC ("LTF USA") is a
Delaware limited liability company, the sole member of which is LTF Real Estate
Holdings, LLC, a Delaware limited liability company ("LTF HOLDINGS"). LTF
Minnesota Real Estate, LLC ("LTF MINNESOTA") is a Delaware limited liability
company, the sole member of which is LTF Holdings. LTF Michigan Real Estate, LLC
("LTF MICHIGAN") is a Delaware limited liability company, the sole member of
which is LTF Holdings. LTF Holdings is a Delaware limited liability company, the
sole member of which is Sponsor.
Section 12.2 Permitted Transfers.
(a) Notwithstanding the prohibitions regarding Transfers,
Permitted Transfers (defined below) will be permitted without Lender's prior
consent, provided that the following conditions regarding Permitted Transfers
and proposed transferees are met:
(i) at least 60 days prior to the proposed Permitted
Transfer (except for any Permitted Transfer arising from the
death of a natural person, in which case, not more than 30
days after the death) Borrower delivers to Lender a notice
that sufficiently detailed to enable Lender to determine that
the proposed Permitted Transfer complies with the terms of
this Section.
(ii) there is no Event of Default under the Loan Documents
executed by Borrower or any Affiliate of Borrower either when
Lender receives the notice or when the proposed Permitted
Transfer occurs, and there has never been a monetary default
under the Loan Documents beyond the applicable grace period
(if any);
(iii) the proposed Permitted Transfer will not result in a
violation of any of the covenants contained in the Section
entitled, "ERISA COMPLIANCE"
23
and Borrower will deliver to Lender such documentation of
compliance as Lender requests in its sole discretion;
(iv) Borrower pays all of Lender's expenses relating to
the Transfer, including Lender's attorneys' fees; and
(v) the transferee is not a person or entity with whom
Lender has had adversarial dealings and is free from
bankruptcy.
(b) Upon compliance with the conditions described in the preceding
subsection, the following Transfers ("PERMITTED TRANSFERS") may occur without
Lender's prior consent except as provided below and, without payment of any
transfer fee except as specifically provided below:
(i) Transfers of membership interests in Borrower,
provided that, subsequent to the Transfer, LTF Holdings
remains as managing member and retains not less than 51% of
the equity and management control interests in Borrower.
(ii) Transfers of membership interests in LTF Holdings,
provided that subsequent to the Transfer, Sponsor remains as
managing member and retains not less than 51% of the equity
and management control interest in LTF Holdings.
(iii) Transfers of ownership interests in Sponsor provided
that:
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇ (subject to the provisions contained
below in this subsection) individually retains not less than
his percentage interest as shareholder set forth in Schedule H
to the Commitment, and the other Investors who are also
employees of the Sponsor as of the date hereof as shown on
such Schedule H (the "EMPLOYEE SHAREHOLDERS") in the aggregate
retain not less than a four percent (4.0%) interest as
shareholders, except to the extent that ▇▇▇▇▇▇ ▇▇▇▇▇▇ and the
Employee Shareholders are diluted (but not more than
proportionately) as the result of a purchase of new shares in
Sponsor by contributors of capital raised in either the public
or private markets: provided, however, that ▇▇▇▇▇▇ ▇▇▇▇▇▇ may
transfer up to five percent (5%) of his holdings in Sponsor in
any calendar year (i.e., five percent of his approximately 15%
aggregate ownership interest, or 0.75% of the total interests
in Sponsor in any calendar year, and such transfer right shall
not be cumulative across calendar years) without the consent
of Lender;
(b) in the case of a proposed Transfer by any Investor
owning an interest of more than 10% in Sponsor, such Transfer
shall be subject to the consent of Lender, which shall be
reasonably exercised; provided that such an Investor may
transfer its interest without the consent of Lender to any of
its affiliates or partners, or to the public in connection
with a 1933 Act registration; and
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(c) in the case of a proposed Transfer of 100% of the
interests in Sponsor to one third party, or a "Qualifying
Merger" with a third party, such transfer or "Qualifying
Merger" shall be subject to the following additional
conditions:
(1) the transferee or the parent of the
transferee or the surviving entity in a
merger has a net worth of at least
$250,000,000;
(2) the transferee or the surviving entity in a
merger is an institutional entity having a
first-class business reputation and shall
otherwise be satisfactory to Lender, and
Lender agrees that Lender shall apply
commercially reasonable standards in
evaluating the transferee;
(3) in the case of a merger, the surviving
entity has expressly assumed Sponsor's
obligations under the Loan Documents to
which it is a party and under any other
documents encumbering the entire portfolio
of properties securing the Loan (the
"Portfolio") that are essential to the
on-going use, operation and management of
the Portfolio;
(4) Borrower pays to Lender a transfer fee of
75/100 percent (.75%) of the outstanding
principal balance of the Loan;
(5) in the case of a merger, Borrower delivers
to Lender from the surviving entity a
substitute environmental indemnity and, if
applicable, a substitute guaranty or surety
instrument satisfactory to Lender, executed
by a substitute indemnitor, guarantor or
surety, as the case may be, satisfactory to
Lender in its sole discretion, in which
event, Lender will release Borrower and
indemnitor from any liability incurred in
connection with events occurring solely
after the Permitted Transfer;
(6) Sponsor enters into an agreement with a term
of at least ten years to manage the
operation of the Portfolio; and
(7) The exercise of this right shall terminate
the right to execute the transfer privilege
provided in Section 12.2(b)(vii).
For purposes hereof, "QUALIFYING MERGER" shall mean a merger where a change of
control results at the Sponsor level (that is, the entity with which the Sponsor
is merged obtains at least a fifty-one percent (51%) interest in the resultant
entity after the merger).
(iv) Transfers of an Investor's interest in Sponsor to any
adult "member of the immediate family" of the Investor or to a
trust for the benefit of such Investor or any "member of the
immediate family" of the Investor, provided that subsequent to
the Transfer, ▇▇▇▇▇▇ ▇▇▇▇▇▇ (or a trust or trusts for the
25
benefit of ▇▇▇▇▇▇ ▇▇▇▇▇▇ or any "member of the immediate
family" of ▇▇▇▇▇▇ ▇▇▇▇▇▇ as to which ▇▇▇▇▇▇ ▇▇▇▇▇▇ retains the
sole power to direct such trusts) remains as a shareholder and
retains not less than 15.1% ownership in Sponsor, subject to
reduction as permitted in Section 12.2(b)(iii)(a) above. The
phrase "member of the immediate family" means a spouse, a
sibling, a lineal ancestor or descendant (including a legally
adopted child) and a spouse of any lineal ancestor or
descendant.
(v) Transfers of an Investor's interests in Sponsor if
the Transfer occurs by reason of the death of the Investor.
(vi) Lender will consider the one-time sale (subject to
the Loan) of Borrower's and each Co-Borrower's interests in
the Portfolio (subject to the leases to Sponsor, which would
remain in effect) to an unaffiliated bona fide purchaser (the
"PORTFOLIO TRANSFEREE"), and in so considering the
acceptability of such transfer will include the following
additional criteria:
(a) prior to the Transfer, the Portfolio Transferee or
the parent of the Portfolio Transferee has a net worth of at
least $125,000,000;
(b) Borrower has delivered to Lender evidence
satisfactory to Lender that the Portfolio Transferee, or the
parent of the Portfolio Transferee, is a professional owner of
first-class commercial real estate owning or managing at least
2,000,000 square feet of property prior to the Transfer
contemplated and having a first-class reputation in the
industry, and Lender agrees that Lender shall apply
commercially reasonable standards in evaluating the Portfolio
Transferee;
(c) the Portfolio Transferee has expressly assumed
Borrower's obligations under the Loan Documents to which
Borrower is a party, and under any other documents encumbering
the Portfolio that are essential to the on-going use,
operation and management of the Portfolio;
(d) Borrower pays to Lender a transfer fee of one percent
(1%) of the outstanding principal balance of the Loan;
(e) Borrower delivers to Lender a substitute
environmental indemnity and, if applicable, a substitute
guaranty or surety instrument satisfactory to Lender, executed
by a substitute indemnitor, guarantor or surety, as the case
may be, satisfactory to Lender in its sole discretion, in
which event, Lender will release Borrower and Indemnitor from
any liability incurred in connection with events occurring
solely after the Permitted Transfer;
(f) The exercise of this right shall terminate the right
to execute the transfer privilege provided in Section
12.2(b)(vii).
26
(g) Borrower pays all of Lender's expenses relating to
the Transfer;
(h) Borrower delivers to Lender in connection with such
Transfer, such opinions of counsel and title insurance
policies as requested by Lender's counsel in its reasonable
discretion;
(i) Borrower delivers to Lender in connection with such
Transfer, such additional documentation as Lender may
determine in its reasonable discretion; and
Provided that each of the foregoing requirements is met, Borrower shall be
released from its obligation under this Mortgage and the other Loan Documents,
effective as of the date of transfer of the entire Portfolio, provided, however,
that Borrower's and Borrower's Affiliates' obligations under their respective
Indemnities shall not be released unless the Portfolio Transferee shall
expressly assume all of the obligations of Borrower and Borrower's Affiliates
under such Indemnities, including obligations that relate to the time before the
Portfolio Transferee acquires the Property. Unless the Portfolio Transferee
shall expressly assume such obligations, the obligations of the Borrower and of
the Borrower's Affiliates under their respective Indemnities shall survive as
provided in such documents.
Provided that the Borrower and Sponsor shall have become non-Affiliates as a
result of a Permitted Transfer under this Section 12.2(b)(vi) or any other
Permitted Transfer or any other Transfer approved by Lender in writing; then a
further Transfer (subject to the Loan) of the resulting borrower's and each
resulting co-borrower's interests in the Portfolio (subject to the leases to
Sponsor which would be required to remain in effect) back to an Affiliate of
Sponsor (a "Back Transfer") in connection with the Sponsor's exercise of the
rights of first offer contained in the leases to Sponsor shall be permitted.
Such Transfer shall be to a newly formed single purpose entity that is an
Affiliate of Sponsor and to whom Sponsor has assigned its rights pursuant to
such right of first offer (but not such leases as a whole), subject to the
conditions contained in clauses (c), (d), (e), (g), (h) and (i) of this Section
12.2(b)(vi), and further subject to the condition that, on the date of such
Transfer, the Sponsor and its Affiliates (including the proposed
Sponsor-Affiliated transferee) will have a combined net worth after giving
effect to the Back Transfer that, in the reasonable estimation of Lender, is at
least as great as that which the Sponsor and its Affiliates had on the date of
the Commitment.
(vii) A one-time, one-property right to sell a single
property of the Portfolio to a bona fide third party
transferee in an arm's length transaction. In connection with
such a sale, Borrower may prepay the portion of the Loan
allocated to the subject property and such prepayment shall be
subject to the Prepayment Premium set forth in the applicable
Note, but no lock-out period shall apply.
(viii) If Lender declines to permit the Borrower to exercise
the transfer privilege expressed in subsections 12.2(b)(iii)
or (vi), then Borrower may pre-
27
pay the Loan (without regard to lock-out period) but subject
to payment of the Prepayment Premium set forth in the
applicable Note.
(ix) Lender agrees to consider a request by Borrower to
obtain the release of a property in the Portfolio by providing
substitute collateral therefor, but Lender may withhold its
consent to such a substitution in Lender's sole and absolute
discretion.
Section 12.3 Right to Contest Liens. Borrower, at its own expense, may
contest the amount, validity or application, in whole or in part, of any
mechanic's, materialmen's or environmental liens in which event Lender will
refrain from exercising any of the Remedies, provided that the following
conditions are met:
(i) Borrower delivers to Lender notice of the proposed
contest not more than 30 days after the lien is filed;
(ii) the contest is by a Proceeding promptly initiated and
conducted in good faith and with due diligence;
(iii) there is no Event of Default other than the Event of
Default arising from the filing of the lien;
(iv) the Proceeding suspends enforcement of collection of
the lien, imposition of criminal or civil penalties and sale
or forfeiture of the Property and Lender will not be subject
to any civil suit;
(v) the Proceeding is permitted under and is conducted in
accordance with the Leases and the Property Documents;
(vi) Borrower sets aside reserves or furnishes a bond or
other security satisfactory to Lender, in either case in an
amount sufficient to pay the claim giving rise to the lien,
together with all interest and penalties, or Borrower pays the
contested lien under protest; and
(vii) With respect to an environmental lien, Borrower is
using best efforts to mitigate or prevent any deterioration of
the Property resulting from the alleged violation of any
Environmental Laws or the alleged Environmental Activity.
ARTICLE XIII
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 13.1 Further Assurances.
(a) Borrower will execute, acknowledge and deliver to Lender, or
to any other entity Lender designates, any additional or replacement documents
and perform any additional actions that Lender determines are reasonably
necessary to evidence, perfect or
28
protect Lender's first lien on and prior security interest in the Property or to
carry out the intent or facilitate the performance of the provisions of the Loan
Documents executed by Borrower or any Affiliate of Borrower.
(b) Borrower appoints Lender as Borrower's attorney-in-fact to
perform, at Lender's election, any actions and to execute and record any of the
additional or replacement documents referred to in this Section, in each
instance only at Lender's election and only to the extent Borrower has failed to
comply with the terms of this Section.
Section 13.2 Estoppel Certificates.
(a) Within 10 days of Lender's request, Borrower will deliver to
Lender, or to any entity Lender designates, a certificate certifying (i) the
original principal amounts of the Note(s); (ii) the unpaid principal amount(s)
of the Note(s); (iii) the Fixed Interest Rate; (iv) the amount of the then
current Debt Service Payments; (v) the Maturity Date; (vi) the date a Debt
Service Payment was last made; (vii) that, except as may be disclosed in the
statement, there are no defaults or events which, with the passage of time or
the giving of notice, would constitute an Event of Default; and (viii) there are
no offsets or defenses against any portion of the Obligations except as may be
disclosed in the statement.
(b) If Lender requests, Borrower promptly will deliver to Lender
or to any entity Lender designates a certificate from each party to any Property
Document, certifying that the Property Document is in full force and effect with
no defaults or events which, with the passage of time or the giving of notice,
would constitute an event of default under the Property Document and that there
are no defenses or offsets against the performance of its obligations under the
Property Document. Borrower shall be required to provide such certificate only
to the extent such certificate is required under the applicable Property
Document, but if such certificate is not required under the Property Document,
Borrower shall nevertheless use reasonable effort to obtain the Certificate.
(c) If Lender requests, Borrower promptly will deliver to Lender,
or to any entity Lender designates, a certificate from each tenant under a Lease
then affecting the Property, certifying to any facts regarding the Lease as
Lender may require, including that the Lease is in full force and effect with no
defaults or events which, with the passage of time or the giving of notice,
would constitute an event of default under the Lease by any party, that the rent
has not been paid more than one month in advance and that the tenant claims no
defense or offset against the performance of its obligations under the Lease.
Section 13.3 Credit Enhancements.
(a) Borrower and the Co-Borrowers have delivered to Lender a
letter of credit (the "L/C") in the amount of $5,000,000 as additional security
for the Loan. The L/C shall be maintained in form, substance and with an
institution acceptable to Lender and shall be renewed automatically each year
for an additional year during the term of the Loan (and notice of such renewal
shall be delivered to Lender not later than thirty days prior to the expiration
of the L/C being renewed). The issuing institution shall notify Lender at least
29
thirty days prior to the end of any year that the L/C has not been renewed, and
such notice of non-renewal (or the failure of Lender to receive timely notice of
renewal) shall entitle Lender to draw upon the L/C and apply the proceeds to the
repayment of the Loan.
(b) Borrower will maintain, and will cause Sponsor to maintain, in
good standing all credit enhancement documents delivered to Lender in connection
with the Loan, including, without limitation the L/C, throughout the Term or
such shorter period as Borrower and Lender may have agreed to in writing. Credit
enhancement documents include any letters of credit, cash deposits, pledges,
guarantees or indemnities delivered to Lender in connection with the Loan but
excluding any letters of credit, promissory notes or cash deposits delivered to
Lender as good faith or standby fees in connection with Lender's agreement to
make the Loan. If the provider of any credit enhancement document becomes
insolvent, commences or is the target of a Proceeding in bankruptcy or ceases to
exist or if Lender determines that the provider's insolvency is imminent,
Borrower will deliver or cause Sponsor to deliver, to Lender a replacement
credit enhancement document within 5 Business Days of the date insolvency is
known, the Proceeding in bankruptcy is filed, the cessation occurs or Lender
gives Borrower notice that Lender has determined the provider's insolvency is
imminent. The replacement credit enhancement document will be satisfactory to
Lender from an alternate provider satisfactory to Lender. Upon receipt of the
replacement, Lender will deliver promptly to Borrower the credit enhancement
document being replaced.
ARTICLE XIV
DEFAULTS AND REMEDIES
Section 14.1 Events of Default. The term "Event of Default" means the
occurrence of any of the following events:
(i) if Borrower fails to pay any amount due, as and when
required, under any Loan Document to which Borrower is a party
and the failure continues for a period of 5 Business Days;
(ii) if Borrower makes a general assignment for the
benefit of creditors or generally is not paying, or is unable
to pay, or admits in writing its inability to pay, its debts
as they become due; or if Borrower or any other party
commences any Proceeding (A) relating to bankruptcy,
insolvency, reorganization, conservatorship or relief of
debtors, in each instance with respect to Borrower; (B)
seeking to have an order for relief entered with respect to
Borrower; (C) seeking attachment, distraint or execution of a
judgment with respect to Borrower; (D) seeking to adjudicate
Borrower as bankrupt or insolvent; (E) seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to Borrower or
Borrower's debts; or (F) seeking appointment of a Receiver,
trustee, custodian, conservator or other similar official for
Borrower or for all or any substantial part of Borrower's
assets, provided that if the Proceeding is
30
commenced by a party other than Borrower or any of Borrower's
general partners or members, Borrower will have 120 days to
have the Proceeding dismissed or discharged before an Event of
Default occurs;
(iii) if Borrower is in default beyond any applicable grace
and cure period under any other mortgage, deed of trust, deed
to secure debt or other security agreement encumbering the
Property whether junior or senior to the lien of this
mortgage, including, without limitation, the subordinate
instrument securing the Guaranty made by Borrower;
(iv) if Borrower, any Co-Borrower, LTF Holdings or Sponsor
is in default beyond any applicable grace and cure period
under any Loan Documents;
(v) if a Transfer occurs except in accordance with the
provisions of this Mortgage;
(vi) if Borrower abandons the Property or ceases to
conduct its business at the Property; or
(vii) if there is a default in the performance of any other
provision of any Loan Document or if there is any inaccuracy
or falsehood in any representation or warranty contained in
any Loan Document and such default, inaccuracy or falsehood is
not remedied within 30 days after Borrower receives notice
thereof, provided that if the default, inaccuracy or falsehood
is of a nature that it cannot be cured within the 30-day
period and during that period Borrower commences to cure, and
thereafter diligently continues to cure, the default,
inaccuracy or falsehood, then the 30-day period will be
extended for a reasonable period not to exceed 120 days after
the notice to Borrower.
(viii) if Borrower shall fail to deliver(or cause to be
delivered) to Lender the financial statements required to be
delivered pursuant to Article X hereof, within the time
periods set forth in Article X, and such failure is not
remedied within thirty (30) days after Borrower receives
notice thereof.
(ix) if ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall fail to be the Chairman of the
Board and Chief Executive Officer of the Sponsor, provided
that it shall not be an Event of Default if (1) ▇▇▇▇▇▇ ▇▇▇▇▇▇
is removed from such position pursuant to action taken in
accordance with the corporate governance documents of the
Sponsor, provided that Lender is given notice and explanation
of such removal immediately upon such action being taken or
(2) if ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall die or become legally
incapacitated, provided that the restrictions on transfer of
▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ ownership contained in Section 12.2(b)(iv)
hereof shall continue to apply to ▇▇▇▇▇▇ ▇▇▇▇▇▇'▇ estate or
other successor in interest with respect to such ownership.
31
Section 14.2 Remedies.
(a) If an Event of Default occurs, Lender may take any of the
following actions (the "REMEDIES") without notice to Borrower:
(i) declare all or any portion of the Debt immediately
due and payable ("ACCELERATION");
(ii) pay or perform any Obligation;
(iii) institute a Proceeding for the specific performance
of any Obligation;
(iv) apply for the appointment of a Receiver to be vested
with the fullest powers permitted by Law, without bond being
required, which appointment may be made ex parte, as a matter
of right and without regard to the value of the Property, the
amount of the Debt or the solvency of Borrower or any other
person liable for the payment or performance of any portion of
the Obligations;
(v) directly, by its agents or representatives or through
a Receiver appointed by a court of competent jurisdiction,
enter on the Land and Improvements, take possession of the
Property, dispossess Borrower and exercise Borrower's rights
with respect to the Property, either in Borrower's name or
otherwise and do any acts which it deems necessary or
desirable to preserve the value, marketability or rentability
of the Property or part thereof or interest therein including,
without limitation, enforce the Leases, increase the income
therefrom or protect the security hereof and, with or without
taking possession of the Property, ▇▇▇ for or otherwise
collect the Rents, including those past due and unpaid, and
apply the same in accordance with the provisions of this
Mortgage. The entering upon and taking possession of the
Property, the collection of such Rents, and the application
thereof as aforesaid, shall not cure or waive any default or
notice of default hereunder or invalidate any act done in
response to such default or pursuant to such notice of default
and notwithstanding the continuance in possession of the
Property or the collection, receipt and application of Rents,
Lender shall be entitled to exercise every right provided for
in any of the Loan Documents or by law upon occurrence of any
Event of Default;
(vi) institute a Proceeding for the foreclosure of this
Mortgage or, if applicable, sell by power of sale, all or any
portion of the Property;
(vii) institute proceedings for the partial foreclosure of
this Mortgage for the portion of the Debt then due and
payable, subject to the continuing lien of this Mortgage for
the balance of the Debt not then due;
32
(viii) exercise any and all rights and remedies granted to a
secured party under the Uniform Commercial Code including, but
not limited to:
(1) Either personally or by means of a court
appointed receiver, take possession of all
or any of the Fixtures and Personal Property
and exclude therefrom Borrower and all
others claiming under Borrower, and
thereafter hold, store, use, operate,
manage, maintain and control, make repairs,
replacements, alterations, additions and
improvements to and exercise all rights and
powers of Borrower in respect to the
Fixtures and Personal Property or any party
thereof. In the event Lender demands or
attempts to take possession of the Fixtures
and Personal Property in the exercise of any
rights under any of the Loan Documents,
Borrower promises and agrees to promptly
turn over and deliver complete possession
thereof to Lender;
(2) Without notice to or demand upon Borrower,
make such payments and of such acts as
Lender may deem necessary to protect its
security interest in the Fixtures and
Personal Property, including without
limitation, paying, purchasing, contesting,
or compromising any encumbrance, charge or
lien which is prior to or superior to the
security interest granted hereunder, and in
exercising any such powers or authority to
pay all expenses incurred in connection
therewith;
(3) Require Borrower to assemble the Fixtures
and Personal Property or any portion
thereof, at a place designated by Lender and
reasonably convenient to both parties, and
promptly to deliver such personal property
to Lender, or an agent or representative
designated by it. Lender, and its agents and
representatives shall have the right to
enter upon any or all of the Property and/or
Borrower's other premises and property to
exercise Lender's rights hereunder;
(4) Sell, lease or otherwise dispose of the
Fixtures and Personal Property at public
sale, with or without having the personal
property at the place of sale, and upon such
terms and in such manner as Lender may
determine. Lender may be a purchaser at any
such sale; and/or
(5) Unless the Fixtures and Personal Property is
perishable or threatens to decline, speedily
in value or is of a type customarily sold on
a recognized market, Lender shall give
Borrower at least ten (10) days prior
written notice of the time and place of any
public sale of the Fixtures and Personal
Property or other
33
intended disposition thereof. Such notice
may be mailed to Borrower at the address set
forth at the beginning of this Mortgage; and
(ix) pursue any other right or remedy available to Lender
at Law, in equity or otherwise.
(b) If an Event of Default occurs, the license granted to Borrower
in the Assignment to collect Rents will terminate automatically without any
action required of Lender.
Section 14.3 General Provisions Pertaining to Remedies.
(a) The Remedies are cumulative and may be pursued concurrently or
otherwise, at such time and in such order as Lender may determine in its sole
discretion and without presentment, demand, protest or further notice of any
kind, all of which are expressly waived by Borrower.
(b) The enumeration in the Loan Documents of specific rights or
powers will not be construed to limit any general rights or powers or impair
Lender's rights with respect to the Remedies.
(c) If Lender exercises any of the Remedies, Lender will not be
deemed a mortgagee-in-possession unless Lender has elected affirmatively to be a
mortgagee-in-possession.
(d) Lender will not be liable for any act or omission of Lender in
connection with the exercise of the Remedies.
(e) Lender's right to exercise any Remedy will not be impaired by
any delay in exercising or failure to exercise the Remedy and the delay or
failure will not be construed as extending any cure period or constitute a
waiver of the default or Event of Default.
(f) If an Event of Default occurs, Lender's payment or performance
or acceptance of payment or performance will not be deemed a waiver or cure of
the Event of Default.
(g) Lender's acceptance of partial payment or receipt of Rents
will not extend or affect any grace period, constitute a waiver of a default or
Event of Default or constitute a recision of Acceleration.
(h) Any provision in this Mortgage to the contrary
notwithstanding, to the extent applicable laws may limit (i) availability of the
exercise of any remedies set forth in this Mortgage or (ii) the enforcement of
waivers and indemnities made by Borrower, such remedies, waivers, or indemnities
shall be exercisable or enforceable if, and to the extent, permitted by the laws
in force at the time of exercise of such remedies or the enforcement of
34
such waivers or indemnities without regard to the enforceability of such
remedies, waivers or indemnities at the time of the execution and delivery of
this Mortgage.
Section 14.4 [Intentionally Omitted].
Section 14.5 General Provisions Pertaining to Mortgagee-in-Possession
or Receiver.
(a) If an Event of Default occurs, any court of competent
jurisdiction will, upon application by Lender, appoint a Receiver as designated
in the application and issue an injunction prohibiting Borrower from interfering
with the Receiver, collecting Rents, disposing of any Rents or any part of the
Property, committing waste or doing any other act that will tend to affect the
preservation of the Leases, the Rents and the Property and Borrower approves the
appointment of the designated Receiver or any other Receiver appointed by the
court. Borrower agrees that the appointment may be made ex parte and as a matter
of right to Lender, either before or after sale of the Property, without further
notice, and without regard to the solvency or insolvency, at the time of
application for the Receiver, of the person or persons, if any, liable for the
payment of any portion of the Debt and the performance of any portion of the
Obligations and without regard to the value of the Property or whether the
Property is occupied as a homestead and without bond being required of the
applicant.
(b) The Receiver will be vested with the fullest powers permitted
by Law including all powers necessary or usual in similar cases for the
protection, possession and operation of the Property and all the powers and
duties of Lender as a mortgagee-in-possession as provided in this Mortgage and
may continue to exercise all the usual powers and duties until the Receiver is
discharged by the court.
(c) In addition to the Remedies and all other available rights,
Lender or the Receiver may take any of the following actions:
(i) take exclusive possession, custody and control of the
Property and manage the Property so as to prevent waste;
(ii) require Borrower to deliver to Lender or the Receiver
all keys, security deposits, operating accounts, prepaid
Rents, past due Rents, the Books and Records and all original
counterparts of the Leases and the Property Documents;
(iii) collect, ▇▇▇ for and give receipts for the Rents and,
after paying all expenses of collection, including reasonable
receiver's, broker's and attorney's fees, apply the net
collections to the Debt;
(iv) make, modify, enforce, terminate or accept surrender
of Leases and evict tenants except that in the case of a
Receiver, such actions may be taken only with the written
consent of Lender as provided in this Mortgage and in the
Assignment;
35
(v) enter into, modify, extend, enforce, terminate or
renew Property Documents except that in the case of a
Receiver, such actions may be taken only with the written
consent of Lender as provided in this Mortgage and in the
Assignment;
(vi) appear in and defend any Proceeding brought in
connection with the Property and bring any Proceeding to
protect the Property as well as Borrower's and Lender's
respective interests in the Property (unless any such
Proceeding has been assigned previously to Lender in the
Assignment, or if so assigned, Lender has not expressly
assigned such Proceeding to the Receiver and consented to such
appearance or defense by the Receiver); and
(vii) perform any act in the place of Borrower that Lender
or the Receiver deems necessary (A) to preserve the value,
marketability or rentability of the Property; (B) upon consent
by Lender, to increase the gross receipts from the Property;
or (C) otherwise to protect Borrower's and Lender's respective
interests in the Property.
(d) Borrower appoints Lender as Borrower's attorney-in-fact, at
Lender's election to perform any actions and to execute and record any
instruments necessary to effectuate the actions described in this Section, in
each instance only at Lender's election and only to the extent Borrower has
failed to comply with the provisions of this Section.
Section 14.6 General Provisions Pertaining to Foreclosures. The
following provisions will apply to any Proceeding to foreclose and to any sale
of the Property pursuant to a judgment of foreclosure and sale:
(i) Lender's right to institute a Proceeding to foreclose
will not be exhausted by a Proceeding or a sale that is
defective or not completed;
(ii) a sale pursuant to a judgment of foreclosure and sale
may be postponed or adjourned by public announcement at the
time and place appointed for the sale without further notice;
(iii) with respect to sale pursuant to a judgment of
foreclosure and sale, the Property may be sold as an entirety
or in parcels, at one or more sales, at the time and place, on
terms and in the order that Lender deems expedient in its sole
discretion;
(iv) if a portion of the Property is sold pursuant to this
Article, the Loan Documents will remain in full force and
effect with respect to any unmatured portion of the Debt and
this Mortgage will continue as a valid and enforceable first
lien on and security interest in the remaining portion of the
Property, subject only to the Permitted Exceptions, without
loss of priority and without impairment of any of Lender's
rights and remedies with respect to the unmatured portion of
the Debt;
36
(v) Lender may bid for and acquire the Property at a sale
and, in lieu of paying cash, may credit the amount of Lender's
bid against any portion of the Debt selected by Lender in its
sole discretion after deducting from the amount of Lender's
bid the expenses of the sale, costs of enforcement and other
amounts that Lender is authorized to deduct at Law, in equity
or otherwise; and
(vi) Lender's receipt of the proceeds of a sale will be
sufficient consideration for the portion of the Property sold
and Lender will apply the proceeds as set forth in this
Mortgage.
Section 14.7 Application of Proceeds. Lender may apply the proceeds of
any sale of the Property pursuant to a judgment of foreclosure and sale and any
other amounts collected by Lender in connection with the exercise of the
Remedies to payment of the Debt in such priority and proportions as Lender may
determine in its sole discretion or in such priority and proportions as required
by Law. Any proceeds remaining after payment of the Debt shall be paid to
Borrower.
Section 14.8 Power of Attorney. Borrower appoints Lender as Borrower's
attorney-in-fact to perform all actions necessary and incidental to exercising
the Remedies.
Section 14.9 Tenant at Sufferance. If Lender or a Receiver enters the
Property in the exercise of the Remedies and Borrower is allowed to remain in
occupancy of the Property, Borrower will pay to Lender or the Receiver, as the
case may be, in advance, a reasonable rent for the Property occupied by
Borrower. If Borrower fails to pay the rent, Borrower may be dispossessed by the
usual Proceedings available against defaulting tenants.
Section 14.10 State Laws Pertaining to Remedies. If (a) the Property
shall consist of one or more parcels, whether or not contiguous and whether or
not located in the same county, or (b) in addition to this Mortgage, Lender
shall now or hereafter hold one or more additional mortgages, liens, deeds of
trust or other security (directly or indirectly) for the Loan upon other
property (whether or not such property is owned by Borrower or by others) or (c)
both the circumstances described in clauses (a) and (b) shall be true, then to
the fullest extent permitted by law, Lender may, at its election, commence or
consolidate in a single foreclosure action all foreclosure proceedings against
all such collateral securing the Loan (including the Property), which action may
be brought or consolidated in the courts of any county in which any of such
collateral is located. Borrower acknowledges that the right to maintain a
consolidated foreclosure action is a specific inducement to Lender to extend the
Loan secured by this Mortgage, and Borrower expressly and irrevocably waives any
objections to the commencement or consolidation of the foreclosure proceedings
in a single action and any objections to the laying of venue or based on the
grounds of forum non conveniens that it may now or hereafter have. Borrower
further agrees that if Lender shall be prosecuting one or more foreclosure or
other proceedings against a portion of the Property or against any collateral
other than the Property, which collateral directly or indirectly secures the
Loan, or if Lender shall have obtained a judgment of foreclosure and sale or
similar
37
judgment against such collateral, then, whether or not such proceedings are
being maintained or judgments were obtained inside or outside the State of
Indiana, Lender may commence or continue foreclosure proceedings and exercise
its other remedies granted in this Mortgage against all or any part of the
Property, and Borrower waives any objection to the commencement or continuation
of a foreclosure of-this Mortgage or exercise of any other remedies hereunder
based on such other proceedings or judgments, and waives any right to seek to
dismiss, stay, remove, transfer or consolidate either any action under this
Mortgage or such other proceedings on such basis. Neither the commencement nor
continuation of proceedings to foreclose this Mortgage nor the exercise of any
other rights hereunder nor the recovery of any judgment by Lender in any such
proceedings shall prejudice, limit or preclude Lender's right to commence or
continue one or more foreclosure or other proceedings or obtain a judgment
against any other collateral (either inside or outside the State of Indiana)
that directly or indirectly secures the obligations, and Borrower expressly
waives any objections to the commencement of, continuation of, or entry of a
judgment in such other proceedings or exercise of any remedies in such
proceedings based upon any action judgment connected to the Mortgage, and
Borrower also waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other proceedings or any action under this Mortgage on
such basis. It is expressly understood and agreed that, to the fullest extent
permitted by law, Lender may, at its election, cause the sale of all collateral
that is the subject of a single foreclosure action at either a single sale or at
multiple sales conducted simultaneously and take such other measures as are
appropriate in order to effect the agreement of the parties to dispose of and
administer all collateral securing the Loan (directly or indirectly) in the most
economical and least time-consuming manner.
ARTICLE XV
LIMITATION OF LIABILITY
Section 15.1 Limitation of Liability.
(a) Notwithstanding any provision in the Loan Documents to the
contrary, except as set forth in subsections (b) and (c), Borrower shall have no
personal liability with respect to the Loan, the Loan shall be non-recourse to
Borrower, and if Lender seeks to enforce the collection of the Debt, Lender will
foreclose this Mortgage instead of instituting suit on the Note(s). If a lesser
sum is realized from a foreclosure of this Mortgage and sale of the Property
than the then outstanding Debt, Lender will not institute any Proceeding against
Borrower or Borrower's members, for or on account of the deficiency, except as
set forth in subsections (b) and (c).
(b) The limitation of liability in subsection (a) will not affect
or impair (i) the lien of this Mortgage or, subject to the provisions of Section
15.1(a), Lender's other rights and Remedies under the Loan Documents, including
Lender's right as mortgagee or secured party to commence an action to foreclose
any lien or security interest Lender has under the Loan Documents; (ii) the
validity of the Loan Documents or the Obligations; (iii) subject to the
provisions of Section 15.1(a), Lender's rights under any Loan Documents executed
by
38
Borrower or any Affiliate of Borrower that are not expressly non-recourse, or
(iv) Lender's right to present and collect on any letter of credit or other
credit enhancement document held by Lender in connection with the Obligations.
(c) The following are excluded and excepted from the limitation of
liability in subsection (a) and Lender may recover personally against Borrower,
for the following:
(i) all losses suffered and liabilities and expenses
incurred by Lender relating to any fraud or intentional
misrepresentation or intentional omission by Borrower or any
of Borrower's partners, members, officers, directors,
shareholder or principals in connection with (A) the
performance of any of the conditions to Lender making the
Loan; (B) any inducements to Lender to make the Loan; (C) the
execution and delivery of the Loan Documents; (D) any
certificates, representations or warranties given in
connection with the making of the Loan; or (E) Borrower's
performance of the Obligations to the extent that such
performance affirmatively requires Borrower to make
statements, deliver certificates or provide notices to Lender;
(ii) all Rents derived from the Property after an Event of
Default under the Loan Documents executed by Borrower or any
Affiliate of Borrower and all moneys that, on the date an
Event of Default occurs, are on deposit in one or more
accounts used by or on behalf of Borrower relating to the
operation of the Property, except to the extent properly
applied to payment of Debt Service Payments, Impositions,
Insurance Premiums, and any reasonable and customary expenses
incurred by Borrower in the operation, maintenance and leasing
of the Property or delivered to Lender;
(iii) the cost of remediation of any Environment Activity
affecting the Property and any other losses suffered and
liabilities and expenses incurred by Lender relating to an
Event of Default under the Article entitled "Environmental";
(iv) the replacement cost of any Fixtures or Personal
Property owned by Borrower removed from the Property after a
default occurs;
(v) all losses suffered and liabilities and expenses
incurred by Lender relating to any acts or omissions by
Borrower that result in waste on the Property;
(vi) all protective advances and other payments made by
Lender pursuant to express provisions of the Loan Documents to
protect Lender's security interest in the Property or to
protect the assignment of the property described in and
effected by the Assignment, but only to the extent that the
Rents would have been sufficient to permit Borrower to make
the payment and Borrower failed to do so;
39
(vii) all mechanic's or similar liens relating to work
performed on or materials delivered to the Property prior to a
foreclosure sale of the Property, but only to the extent
Lender had advanced funds to pay for the work or materials;
(viii) all Proceeds that are not applied in accordance with
this Mortgage or not paid to Lender as required under this
Mortgage;
(ix) all losses suffered and liabilities and expenses
incurred by Lender relating to a Transfer that is not
permitted under the Section entitled "Permitted Transfers" and
is not otherwise approved by Lender;
(x) all losses suffered and liabilities and expenses
incurred by Lender relating to forfeiture or threatened
forfeiture of the Property to the Government (other than any
Condemnation);
(xi) all losses suffered and liabilities and expenses
incurred by Lender relating to any Event of Default by
Borrower under any of the provisions of this Mortgage relating
to ERISA, including the prohibition on any Transfer that
results in a violation of ERISA; and
(xii) all payments that Borrower expressly is obligated to
make after payment of the Note(s) and satisfaction of the Loan
Documents to which it is a party, provided, however, that the
foregoing shall not act to extend the duration of any
Obligation beyond the limits expressly established with
respect thereto.
(d) Nothing under subparagraph (a) above will be deemed to be a
waiver of any right which Lender may have under Section 506(a), 506(b), 1111 (b)
or any other provision of the Bankruptcy Code or under any other Law relating to
bankruptcy or insolvency to file a claim for the full amount of the Debt or to
require that all collateral will continue to secure all of the Obligations in
accordance with the Loan Documents.
ARTICLE XVI
WAIVERS
SECTION 16.1 WAIVER OF STATUTE OF LIMITATIONS. BORROWER WAIVES THE
RIGHT TO CLAIM ANY STATUTE OF LIMITATIONS AS A DEFENSE TO BORROWER'S PAYMENT AND
PERFORMANCE OF THE OBLIGATIONS.
SECTION 16.2 WAIVER OF NOTICE. BORROWER WAIVES THE RIGHT TO RECEIVE
ANY NOTICE FROM LENDER WITH RESPECT TO THE LOAN DOCUMENTS EXCEPT FOR THOSE
NOTICES THAT LENDER IS EXPRESSLY REQUIRED TO DELIVER PURSUANT TO THE LOAN
DOCUMENTS.
40
SECTION 16.3 WAIVER OF MARSHALLING AND OTHER MATTERS. BORROWER WAIVES
THE BENEFIT OF ANY RIGHTS OF MARSHALLING OR ANY OTHER RIGHT TO DIRECT THE ORDER
IN WHICH ANY OF THE PROPERTY WILL BE (I) SOLD; OR (II) MADE AVAILABLE TO ANY
ENTITY IF THE PROPERTY IS SOLD BY POWER OF SALE OR PURSUANT TO A JUDGMENT OF
FORECLOSURE AND SALE. BORROWER ALSO WAIVES THE BENEFIT OF ANY LAWS RELATING TO
APPRAISEMENT, VALUATION, STAY, EXTENSION, REINSTATEMENT, MORATORIUM, HOMESTEAD
AND EXEMPTION RIGHTS OR A SALE IN INVERSE ORDER OF ALIENATION. ANYTHING
CONTAINED HEREIN OR IN I.C. 32-8-16-1.5 TO THE CONTRARY NOTWITHSTANDING, NO
WAIVER MADE BY BORROWER IN THIS SECTION 16.3 OR ANYWHERE ELSE IN THIS MORTGAGE
OR IN THE LOAN DOCUMENTS SHALL CONSTITUTE THE CONSIDERATION FOR OR BE DEEMED TO
BE A WAIVER OR RELEASE BY LENDER OR ANY JUDGMENT HOLDER OF THE DEBT AND
OBLIGATIONS HEREBY SECURED OF THE RIGHT TO SEEK A DEFICIENCY JUDGMENT AGAINST
THE BORROWER OR ANY OTHER PERSON OR ENTITY WHO MAY BE PERSONALLY LIABLE FOR THE
DEBT AND OBLIGATIONS HEREBY SECURED, WHICH RIGHT TO SEEK A DEFICIENCY JUDGMENT
IS HEREBY RESERVED, PRESERVED AND RETAINED BY LENDER FOR ITS OWN BEHALF AND ITS
SUCCESSORS AND ASSIGNS.
SECTION 16.4 WAIVER OF TRIAL BY JURY. BORROWER WAIVES TRIAL BY JURY IN
ANY PROCEEDING BROUGHT BY OR AGAINST, OR COUNTERCLAIM OR CROSS-COMPLAINT
ASSERTED BY OR AGAINST LENDERS RELATING TO THE LOAN, THE PROPERTY DOCUMENTS OR
THE LEASES.
SECTION 16.5 WAIVER OF COUNTERCLAIM. BORROWER WAIVES THE RIGHT TO
ASSERT A COUNTERCLAIM OR CROSS-COMPLAINT, OTHER THAN COMPULSORY OR MANDATORY
COUNTERCLAIMS OR CROSS-COMPLAINTS, IN ANY PROCEEDING LENDER BRINGS AGAINST
BORROWER RELATING TO THE LOAN, INCLUDING ANY PROCEEDING TO ENFORCE REMEDIES.
SECTION 16.6 WAIVER OF JUDICIAL NOTICE AND HEARING. BORROWER WAIVES
ANY RIGHT BORROWER MAY HAVE UNDER LAW TO NOTICE OR TO A JUDICIAL HEARING PRIOR
TO THE EXERCISE OF ANY RIGHT OR REMEDY PROVIDED BY THE LOAN DOCUMENTS TO LENDER
AND BORROWER WAIVES THE RIGHTS, IF ANY, TO SET ASIDE OR INVALIDATE ANY SALE DULY
CONSUMMATED IN ACCORDANCE WITH THE PROVISIONS OF THE LOAN DOCUMENTS ON THE
GROUND (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT A PRIOR
JUDICIAL HEARING.
41
SECTION 16.7 WAIVER OF SUBROGATION. ALL RIGHTS OF SUBROGATION TO
LENDER'S RIGHTS OR CLAIMS RELATED TO OR AFFECTING THE PROPERTY OR ANY OTHER
SECURITY FOR THE LOAN UNTIL THE LOAN IS PAID IN FULL AND ALL FUNDING OBLIGATIONS
UNDER THE LOAN DOCUMENTS HAVE BEEN TERMINATED ARE WAIVED FOR THE DURATION OF ANY
APPLICABLE BANKRUPTCY PREFERENCE PERIOD.
SECTION 16.8 GENERAL WAIVER. BORROWER ACKNOWLEDGES THAT (A) BORROWER
AND BORROWER'S PARTNERS, MEMBERS OR PRINCIPALS, AS THE CASE MAY BE, ARE
KNOWLEDGEABLE BORROWERS OF COMMERCIAL FUNDS AND EXPERIENCED REAL ESTATE
DEVELOPERS OR INVESTORS WHO UNDERSTAND FULLY THE EFFECT OF THE ABOVE PROVISIONS;
(B) LENDER WOULD NOT MAKE THE LOAN WITHOUT THE PROVISIONS OF THIS ARTICLE; (C)
THE LOAN IS A COMMERCIAL OR BUSINESS LOAN UNDER THE LAWS OF THE STATE OR
COMMONWEALTH WHERE THE PROPERTY IS LOCATED, NEGOTIATED BY LENDER AND BORROWER
AND THEIR RESPECTIVE ATTORNEYS AT ARMS LENGTH; AND (D) ALL WAIVERS BY BORROWER
IN THIS ARTICLE HAVE BEEN MADE VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY, AFTER
BORROWER FIRST HAS BEEN INFORMED BY COUNSEL OF BORROWER'S OWN CHOOSING AS TO
POSSIBLE ALTERNATIVE RIGHTS, AND HAVE BEEN MADE AS AN INTENTIONAL RELINQUISHMENT
AND ABANDONMENT OF A KNOWN RIGHT AND PRIVILEGE. THE FOREGOING ACKNOWLEDGMENT IS
MADE WITH THE INTENT THAT LENDER AND ANY SUBSEQUENT HOLDER OF THE NOTE WILL RELY
ON THE ACKNOWLEDGMENT.
SECTION 16.9 WAIVER OF DAMAGES. IN ANY CASE WHERE LENDER IS GIVEN
DISCRETION WITH RESPECT TO ANY MATTER, AND BORROWER CHALLENGES LENDER'S EXERCISE
OF ITS DISCRETION, THEN BORROWER'S SOLE REMEDY SHALL BE TO OBTAIN A COURT ORDER
DIRECTING OR DEEMING LENDER TO CONSENT, AND BORROWER SHALL NOT BE ENTITLED TO
MONETARY DAMAGES ON ACCOUNT OF LENDER'S EXERCISE OF DISCRETION.
ARTICLE XVII
NOTICES
Section 17.1 Notices. All acceptances, approvals, consents, demands,
notices, requests, waivers and other communications (the "Notices") required or
permitted to be given under the Loan Documents must he in writing and (a)
delivered personally, (b) sent by certified mail, return receipt requested, or
(c) delivered by nationally recognized overnight delivery service providing
evidence of the date of delivery, with all charges prepaid, addressed to the
appropriate party at its address listed below:
42
If to Borrower: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
LIFE TIME FITNESS, Inc. Portfolio
TIAA Appl.#VR-34 Mortgage #0005004-5008
with a copy to: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Vice President of Finance and General Counsel
LIFE TIME FITNESS, Inc. Portfolio
TIAA Appl. #VR-34 Mortgage #0005004-5008
If to Lender: Teachers Insurance and Annuity Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Managing Director
Mortgage and Real Estate Division
Region: West/Midwest
LIFE TIME FITNESS, Inc. Portfolio
TIAA Appl.#VR-34 Mortgage #0005004-5008
with a copy to: Teachers Insurance and Annuity Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Vice President and Chief Counsel
In charge of Mortgage and Real Estate Law
LIFE TIME FITNESS, Inc. Portfolio
TIAA Appl.#VR-34 Mortgage #0005004-5008
Lender and Borrower each may change from time to time the address to
which Notices must be sent by notice given in accordance with the provisions of
this Section. All Notices given in accordance with the provisions of this
Section will be deemed to have been given on the earliest of (i) actual receipt;
(ii) Borrower's rejection of delivery; or (iii) 3 Business Days after having
been deposited in any mail depository regularly maintained by the United States
postal service, if sent by certified mail, or 1 Business Day after having been
deposited with a nationally recognized overnight delivery service, if sent by
overnight delivery, or on the date of personal service, if served by a process
server.
43
Section 17.2 Change in Borrower's Name or Place of Business. Borrower
will immediately notify Lender in writing of any change in Borrower's name or
the place of business set forth in the beginning of this Mortgage.
ARTICLE XVIII
MISCELLANEOUS
Section 18.1 Applicable Law. This instrument is to be governed by and
will be construed in accordance with the Laws of the State or commonwealth where
the Property is located.
Section 18.2 Usury Limitations. Borrower and Lender intend to comply
with all Laws with respect to the charging and receiving of interest. Any
amounts charged or received by Lender for the use or forbearance of the
Principal to the extent permitted by Law, will be amortized and spread
throughout the Term until payment in full so that the rate or amount of interest
charged or received by Lender on account of the Principal does not exceed the
Maximum Interest Rate. If any amount charged or received under the Loan
Documents executed by Borrower securing the Note(s) that is deemed to be
interest is determined to be in excess of the amount permitted to be charged or
received at the Maximum Interest Rate, the excess will be deemed to be a
prepayment of Principal when paid, without premium, and any portion of the
excess not capable of being so applied will be refunded to Borrower. If during
the Term the Maximum Interest Rate, if any, is eliminated, then for the purposes
of the Loan, there will be no Maximum Interest Rate.
Section 18.3 Lender's Discretion. Wherever under the Loan Documents
any matter is required to be satisfactory to Lender, Lender has the right to
approve or determine any matter or Lender has an election, Lender's approval,
determination or election will be made in Lender's reasonable discretion unless
expressly provided to the contrary.
Section 18.4 Unenforceable Provisions. If any provision in the Loan
Documents is found to be illegal or unenforceable or would operate to invalidate
any of the Loan Documents, then the provision will be deemed expunged and the
Loan Documents will be construed as though the provision was not contained in
the Loan Documents and the remainder of the Loan Documents will remain in full
force and effect.
Section 18.5 Survival of Borrower's Obligations. Borrower's
representations, warranties and covenants contained in the Loan Documents will
continue in full force and effect and survive (i) assignment or other transfer
of all or any portion of Lender's interest in the Loan Documents or the
Property; (ii) Lender's exercise of any of the Remedies or any of Lender's other
rights under the Loan Documents; (iii) except as provided in Section
12.2(b)(vi), a Transfer; (iv) amendments to the Loan Documents; and (v) any
other act or omission that might otherwise be construed as a release or
discharge of Borrower other than satisfaction with Obligation and release of
this Mortgage. The provisions of this Section 18.5 shall not limit the survival
of Borrower's obligation under the Indemnity executed by Borrower as to which
the limitations set forth therein shall apply.
44
Section 18.6 Relationship Between Borrower and Lender; No Third Party
Beneficiaries.
(a) Lender is not a partner of or joint venturer with Borrower or
any other entity as a result of the Loan or Lender's rights under the Loan
Documents; the relationship between Lender and Borrower is strictly that of
creditor and debtor. Each Loan Document is an agreement between the parties to
that Loan Document for the mutual benefit of the parties and no entities other
than the parties to that Loan Document will be a third party beneficiary or will
have any claim against Lender or Borrower by virtue of the Loan Document. As
between Lender and Borrower, any actions taken by Lender under the Loan
Documents will be taken for Lender's protection only, and Lender has not and
will not be deemed to have assumed any responsibility to Borrower or to any
other entity by virtue of Lender's actions.
(b) All conditions to Lender's performance of its obligations
under the Loan Documents are imposed solely for the benefit of Lender. No entity
other than Lender will have standing to require satisfaction of the conditions
in accordance with their provisions or will be entitled to assume that Lender
will refuse to perform its obligations in the absence of strict compliance with
any of the conditions.
Section 18.7 Partial Releases; Extensions; Waivers. Lender may: (i)
release any part of the Property or any entity obligated for any of the
Obligations; (ii) extend the time for payment or performance of any of the
Obligations or otherwise amend the provisions for payment or performance by
agreement with any entity that is obligated for the Obligations or that has an
interest in the Property; (iii) accept additional security for the payment and
performance of the Obligations; and (iv) waive any entity's performance of an
Obligation, release any entity or individual now or in the future liable for the
performance of the Obligation or waive the exercise of any Remedy or option.
Lender may exercise any of the foregoing rights without notice, without regard
to the amount of any consideration given, without effecting the priority of the
Loan Documents, without releasing any entity not specifically released from its
obligations under the Loan Documents, without releasing any guarantor(s) or
surety(ies) of any of the Obligations, without effecting a novation of the Loan
Documents and, with respect to a waiver, without waiving future performance of
the obligation or exercise of the Remedy waived.
Section 18.8 Service of Process. Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, return
receipt requested, to Borrower at its address set forth in the Article entitled
"NOTICES".
Section 18.9 Entire Agreement. Oral agreements or commitments between
Borrower and Lender to lend money, to extend credit or to forbear from enforcing
repayment of a debt, including promises to extend or renew the debt, are not
enforceable. Any agreements between Borrower and Lender relating to the Loan are
contained in the Loan Documents to which Borrower is a party, which contain the
complete and exclusive statement of the agreements between Borrower and Lender,
except as Borrower and Lender may later agree in writing to amend such Loan
Documents. The language of each Loan
45
Document will be construed as a whole according to its fair meaning and will not
be construed against the draftsman.
Section 18.10 No Oral Amendment. The Loan Documents may not be
amended, waived or terminated orally or by any act or omission made individually
by Borrower or Lender but may be amended, waived or terminated only by a written
document signed by the party against which enforcement of the amendment, waiver
or termination is sought.
Section 18.11 Severability. The invalidity, illegality or
unenforceability of any provision of any of the Loan Documents will not affect
any other provisions of the Loan Documents, which will be construed as if the
invalid, illegal or unenforceable provision never had been included.
Section 18.12 Covenants Run with the Land. Subject to the restrictions
on transfer contained in the Article entitled "TRANSFERS, LIENS AND
ENCUMBRANCES", all of the covenants of this Mortgage and the Assignment run with
the Land, will bind all parties hereto and all tenants and subtenants of the
Land or the Improvements and their respective heirs, executors, administrators,
successors and assigns, and all occupants and subsequent owners of the Property,
and will inure to the benefit of Lender and all subsequent holders of the
Note(s) and this Mortgage.
Section 18.13 Time of the Essence. Time is of the essence with respect
to Borrower's payment and performance of the Obligations.
Section 18.14 [INTENTIONALLY OMITTED].
Section 18.15 Joint and Several Liability. If Borrower consists of
more than one person or entity, the obligations and liabilities of each such
person or entity under this Mortgage are joint and several.
Section 18.16 Successors and Assigns. The Loan Documents bind the
parties to the Loan Documents and their respective successors, assigns, heirs,
administrators, executors, agents and representatives and inure to the benefit
of Lender and its successors, assigns, heirs, administrators, executors, agents
and representatives.
Section 18.17 Duplicates and Counterparts. Duplicate counterparts of
any Loan Documents, other than the Note(s), may be executed and together will
constitute a single original document.
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ARTICLE XIX
ADDITIONAL PROVISIONS PERTAINING TO STATE LAWS
Section 19.1 Future Advances. In addition to any Debt or Obligations
secured by this Mortgage, this Mortgage shall also secure (i) future obligations
and advances up to _________________________________________ (whether made as an
obligation, made at the option of the Lender, made after a reduction to a zero
(0) or other balance, or made otherwise) to the same extent as if the future
obligations and advances were made on the date of execution of this Mortgage and
(ii) future modifications, extensions and renewals of any indebtedness or
obligations secured by this Mortgage. The lien of this Mortgage with respect to
such future obligations, advances, modifications, extensions and renewals shall
have the same priority to which this Mortgage otherwise would be entitled under
IC 32-1-2-16 without regard to the fact that such future obligations, advances,
modifications, extensions, or renewals may occur after this Mortgage is
executed.
Section 19.2 Election of Remedies. Notwithstanding the provisions of
the Note and this Mortgage restricting (i) prepayment of the indebtedness
evidenced by the Note, and (ii) any transfer under Article XII of this Mortgage,
in the event that individually or jointly such restrictions shall be deemed by a
court of competent jurisdiction to result in an unreasonable restraint on
alienation of property, and therefore are unenforceable, Mortgagee shall have
the right to elect which of such provisions it desires to waive and the other
shall remain in full force and effect. Mortgagee shall make such election within
fifteen (15) business days following any such decision by a court of competent
jurisdiction, after the expiration of all appeal periods.
47
IN WITNESS WHEREOF, Borrower has executed and delivered this instrument
as of the date first set forth above.
[BORROWER],
a Delaware limited liability company
By:LTF REAL ESTATE HOLDINGS, LLC,
its sole member
By: LIFETIME FITNESS, Inc.
By:
_______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer
STATE OF
COUNTY OF
The foregoing instrument was acknowledged before me this ____ day of
June, 2001 by ▇▇▇▇▇ ▇▇▇▇▇▇, as Chief Financial Officer of LIFE TIME FITNESS,
Inc., a Minnesota corporation, on behalf of the corporation, in such
corporation's capacity as sole member of LTF Real Estate Holdings, LLC, in such
limited liability company's capacity as sole member of [BORROWER].
___________________________
Notary Public
48
EXHIBIT C
DEFINITIONS
"ACCELERATION" is defined in Section 14.2(a)(i).
"ACCUMULATIONS" is defined in Section 2.1(xii).
"ACCUMULATIONS DEPOSITARY" is defined in Section 6.2(a).
"ADDITIONAL FUNDS" is defined in Section 7.4(v).
"AFFILIATE" means a person or entity that, directly or indirectly, is (i) under
common ownership or control with the Borrower, (ii) owned or controlled by
Borrower or (iii) controls or owns Borrower.
"ANNUAL FINANCIAL STATEMENT" is defined in Section 10.1(a).
"ASSESSMENTS" is defined as all assessments now or hereafter levied, assessed or
imposed against the Property.
"ASSIGNMENT" is defined as the Assignment of Leases and Rents dated of even date
with this Mortgage made by Borrower for the benefit of Lender.
"BANKRUPTCY CODE" means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. Section 101, et seq.), as amended from time to time.
"BOOKS AND RECORDS" is defined in Section 2.1(xi).
"BORROWER" is defined in the introductory paragraph.
"BUDGET" is defined in Section 10.2.
"BUSINESS DAYS" is defined as any day on which commercial banks are not
authorized or required by Law to close in New York, New York.
"CASUAL" is defined as damage to or destruction of the Property by fire or other
casualty.
"CLOSING DATE" is defined in the Note(s). "Co-Borrower" is defined in Recital A.
"CODE" is defined as the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.
"COMMITMENT" means that certain Loan Application and Commitment dated March 30,
2001 between FCA Real Estate Holdings, LLC and Lender.
"CONDEMNATION" is defined as the permanent or temporary taking of all or any
portion of the Property, or any interest therein or right accruing thereto, by
the exercise of the right of
eminent domain (including any transfer in lieu of or in anticipation of the
exercise of the right), inverse condemnation or any similar injury or damage to
or decrease in the value of the Property, including severance and change in the
grade of any streets.
"CONDEMNATION AWARDS" is defined in Section 2.1 (viii).
"CONDEMNATION PROCEEDING" is defined as a Proceeding that could result in a
Condemnation.
"DEBT" is defined in Section 3.1.
"DEBT SERVICE PAYMENTS" is defined as the monthly installments of principal and
interest payable by Borrower to Lender as set forth in the Note(s).
"DEFAULT INTEREST RATE" is defined as the lower of 5% per annum plus the Fixed
Interest Rate or the Maximum Interest Rate, if any.
"DESTRUCTION EVENT" is defined in Section 7.4.
"ENVIRONMENTAL ACTIVITY" is defined as any actual, suspected or threatened
abatement, cleanup, disposal, generation, handling, manufacture, possession,
release, remediation, removal, storage, transportation, treatment or use of any
Hazardous Material. The actual, suspected or threatened presence of any
Hazardous Material or the actual, suspected- or threatened noncompliance with
any Environmental Laws, will be deemed Environmental Activity.
"ENVIRONMENTAL LAWS" is defined as all Laws pertaining to health, safety,
protection of the environment, natural resources, conservation, wildlife, waste
management, Environmental Activities and pollution.
"ENVIRONMENTAL REPORT" is defined as the report or reports relating to the
Property set forth on Exhibit G hereto.
"ERISA" is defined in Section 83(a).
"EVENT OF DEFAULT" is defined in Section 14.1.
"EXPENSES" is defined in Section 11.1(a).
"FINANCIAL BOOKS AND RECORDS" is defined as detailed accounts of the income and
expenses of the Property and of Borrower and all other data, records and
information that either are specifically referred to in the Article entitled
"FINANCIAL REPORTING" or are necessary to the preparation of any of the
statements, reports or certificates required under such Article and includes all
supporting schedules prepared or used by the CPA in auditing the Annual
Financial Statement or in issuing its opinion.
"FISCAL YEAR" is defined as any calendar year or partial calendar year during
the Term.
2
"FIXED INTEREST RATE" is defined as in the Note(s).
"FIXTURES AND PERSONAL PROPERTY" is defined in Section 2.1(iv).
"GOVERNMENT" is defined as any federal, state or municipal governmental or
quasi-governmental authority including any executive, legislative or judicial
branch division, subdivision or agency of any of them and any entity to which
any of them has delegated authority.
"GUARANTIES" means, collectively, those certain Guaranties, each of even date
herewith from Borrower, each Co-Borrower and Sponsor (each a "GUARANTOR") as the
same may have been and may hereafter from time to time be amended, modified or
restated.
"HAZARDOUS MATERIALS" is defined as any by-product, chemical, compound,
contaminant, pollutant, product, substance, waste or other material (i) that is
hazardous or toxic or (ii) the abatement, cleanup, discharge, disposal,
emission, exposure to, generation, handling, manufacture, possession, presence,
release, removal, remediation, storage, transportation, treatment or use of
which is controlled, prohibited or regulated by any Environmental Laws,
including asbestos, petroleum and petroleum products and polychlorinated
biphenyls.
"IMPOSITION PENALTY DATE" is defined in Section 6.1(a).
"IMPOSITIONS" is defined as all Taxes, Assessments, ground rent, if any, water
and sewer rents, fees and charges, levies, permit, inspection and license fees
and other dues, charges or impositions, including all charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land, maintenance
and similar charges and charges for utility services, in each instance whether
now or in the future, directly or indirectly, levied, assessed or imposed on the
Property and whether levied, assessed or imposed as excise, privilege or
property taxes.
"IMPROVEMENTS" is defined in Section 2.1 (ii).
"INDEMNITIES" means, collectively those certain Environmental Indemnities, each
of even date herewith from Borrower, each Co-Borrower and Sponsor (each an
"Indemnitor") together with that certain Child Care Indemnity of even date
herewith from Sponsor as the same may have been and may hereafter be amended,
modified or restated from time to time.
"INSURANCE PREMIUMS" is defined as all present and future premiums and other
charges due and payable on policies of fire, rental value and other insurance
covering the Property and required pursuant to the provisions of this Mortgage.
"INSURANCE PROCEEDS" is defined in Section 2.1(ix).
"INSURERS" is defined in Section 7.1(c).
"INSTITUTIONAL INVESTOR" is defined as any bank, savings institution, charitable
foundation, insurance company, real estate investment trust, pension fund or
investment advisor
3
registered under the Investment Advisors Act of 1940, as amended, and acting as
trustee or agent.
"INTEREST" is defined as the interest payable under the Note(s) and any other
sums which are deemed to be interest under Law.
"INVESTORS" is defined in Section 12.1(b).
"LAND" is defined in Recital C.
"LATE CHARGES" is defined in the Note(s).
"LAW" is defined as all present and future codes, constitutions, cases,
opinions, rules, manuals, regulations, determinations, laws, orders, ordinances,
requirements and statutes, as amended, of any Government that affect or that may
be interpreted to affect the Property, Borrower or the Loan, including
amendments and all guidance documents and publications promulgated thereunder.
"L/C" is defined in Section 13.1(a).
"LEASES" is defined as all present and future leases, subleases, licenses, and
other agreements for the use and occupancy of the Land and Improvement, any
related guarantees and any use and occupancy arrangements created pursuant to
Section 365(h) of the Bankruptcy Code or otherwise in connection with the
commencement or continuation of any bankruptcy, reorganization, arrangement,
insolvency, dissolution, receivership or similar Proceedings, or any assignment
for the benefit of creditors, in respect of any tenant or other occupant of the
Land and Improvements.
"LENDER" is defined in the introductory paragraph.
"LOAN" is defined in Recital A.
"LOAN DOCUMENTS" is defined as the Note(s), this Mortgage, the Assignment, any
other mortgages or deeds of trust given by Borrower to secure the Note(s)
including, without limitation, that certain Second Mortgage, Assignment of
Leases and Rents, Security Agreement and Fixture Filing Statement of even date
herewith from Borrower to Lender and that certain Second Assignment of Leases
and Rents of even date herewith from Borrower to Lender, any promissory notes
made by any Co-Borrower to evidence any portion of the Loan, any mortgage or
deed of trust given to secure any such promissory notes, the Indemnities, the
Guaranties and all documents now or hereafter executed by Borrower, any
Co-Borrower or Sponsor or any guaranty of payment given by Borrower or any
Co-Borrower in respect of the Loan together with any document given as security
for any such guaranty, any indemnity of Lender with respect to environmental
matters, including all amendments, modifications or consolidations of any of the
foregoing.
"MATURITY DATE" is defined in Recital B.
4
"MAXIMUM INTEREST RATE" is defined as the maximum rate of interest, if any,
permitted by Law to be charged with respect to the Loan as the maximum rate may
be increased or decreased from time to time.
"MORTGAGE" is defined as this Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing Statement.
"NOTE(S)" is defined in Recital B.
"NOTE PAYMENTS" is defined in the Note(s)
"NOTICES" is defined in Section 17.1.
"OBLIGATIONS" is defined in Section 3.1.
"PERMITTED EXCEPTIONS" is defined as the matters shown in Schedule B, Part 1 and
2 of the title insurance policy insuring the lien of this Mortgage and any other
matters approved in a writing signed by Lender.
"PERMITTED TRANSFERS" is defined in Section 12.2(b).
"PERMITTED USE" means a health club with substantially the same finish and
amenities as is in operation upon the Property as of the date hereof with
associated ancillary uses, including those permitted under Section 5.3.
"POLICIES" is defined in Section 7.1(b).
"PORTFOLIO" and "PORTFOLIO TRANSFEREE" are defined in Section 12.2(b)(iv).
"PRINCIPAL" is defined in Recital B.
"PROCEEDING" is defined as a pending or to Borrower's knowledge, threatened
action, claim or litigation before a legal, equitable or administrative tribunal
having proper jurisdiction.
"PROCEEDS" is defined in Section 7.2(c).
"PROPERTY" is defined in Section 2.1.
"PROPERTY DOCUMENTS" is defined in Section 2.1(v).
"RECEIVER" is defined as a receiver, custodian, trustee, liquidator or
conservator of the Property.
"REMEDIES" is defined in Section 14.2(a).
"RENTS" is defined as all rents, prepaid rents, percentage, participation or
contingent rents, issues, profits, proceeds, revenues and other consideration
accruing to Borrower under the Leases or otherwise to the benefit of the
Borrower derived from the use and occupancy of the
5
Land or the Improvements, including tenant contributions to expenses, security
deposits, royalties and contingent rent, if any, all other fees or payments paid
to or for the benefit of Borrower and any payments received pursuant to Section
502(b) of the Bankruptcy Code or otherwise in connection with the commencement
or continuance of any bankruptcy, reorganization, arrangement, insolvency,
dissolution, receivership or similar proceedings, or any assignment for the
benefit of creditors, in respect of any tenant or other occupant of the Land or
the Improvement and all claims as a creditor in connection with any of the
foregoing.
"RESTORATION" is defined as the restoration of the Property after a Destruction
Event as nearly as possible to its condition immediately prior to the
Destruction Event, in accordance with the plans and specifications, in a
first-class workmanlike manner using materials substantially equivalent in
quality and character to those used for the original improvements, in accordance
with Law and free and clear of all liens, encumbrances or other charges other
than this Mortgage and the Permitted Exceptions.
"RESTORATION COMPLETION DATE" is defined in Section 7.4(viii).
"RESTORATION FUNDS" is defined in Section 7.5(b).
"SPONSOR" is defined in Section 12.1(b).
"TAXES" is defined as all present and future real estate taxes levied, assessed
or imposed against the Proper,.
"TERM" is defined as the scheduled term of this Mortgage commencing on the date
Lender makes the first disbursement of the Loan and terminating on the Maturity
Date.
"TRANSFER" is defined in Section 12.1(a).
"UNIFORM COMMERCIAL CODE" is defined as the Uniform Commercial Code in effect in
the jurisdiction where the Land is located.
6
EXHIBIT D
RULES OF CONSTRUCTION
(a) References in any Loan Document to numbered Articles or
Sections are references to the Articles and Sections of that Loan Document.
References in any Loan Document to lettered Exhibits are references to the
Exhibits attached to that Loan Document, all of which are incorporated in and
constitute a part of that Loan Document. Article, Section and Exhibit captions
used in any Loan Document are for reference only and do not describe or limit
the substance, scope or intent of that Loan Document or the individual Articles,
Sections or Exhibits of that Loan Document.
(b) The terms "include", "including" and similar terms are
construed as if followed by the phrase "without limitation".
(c) The terms "Land", "Improvements", "Fixtures and Personal
Property", "Condemnation Awards", "Insurance Proceeds" and "Property" are
construed as if followed by the phrase "or any part thereof'.
(d) Any agreement by or duty imposed on Borrower in any Loan
Document to perform any obligation or to refrain from any act or omission
constitutes a covenant running with the ownership or occupancy of the Land and
the Improvements, which will bind all parties hereto and their respective
successors and assigns, and all lessees, subtenants and assigns of same, and all
occupants and subsequent owners of the Property, and will inure to the benefit
of Lender and all subsequent holders of the Note(s) and this Mortgage and
includes a covenant by Borrower to cause its partners, members, principals,
agents, representatives and employees to perform the obligation or to refrain
from the act or omission in accordance with the Loan Documents. Any statement or
disclosure contained in any Loan Document about facts or circumstances relating
to the Property, Borrower or the Loan constitutes a representation and warranty
by Borrower made as of the date of the Loan Document in which the statement or
disclosure is contained.
(e) The term "to Borrower's knowledge" is construed as meaning to
the best of Borrower's knowledge after diligent inquiry.
(f) The singular of any word includes the plural and the plural
includes the singular. The use of any gender includes all genders.
(g) The terms "person", "party" and "entity" include natural
persons, firms, partnerships, limited liability companies and partnerships,
corporations and any other public or private legal entity.
(h) The term "provisions" includes terms, covenants, conditions,
agreements and requirements.
(i) The term "amend" includes modify, supplement, renew, extend,
replace or substitute and the term "amendment" includes modification,
supplement, renewal, extension, replacement and substitution.
(j) Reference to any specific Law or to any document or agreement,
including the Note(s), this Mortgage, any of the other Loan Documents, the
Leases and the Property Documents includes any future amendments to the Law,
document or agreement, as the case may be.
(k) No inference in favor of or against a party with respect to
any provision in any Loan Document may be drawn from the fact that the party
drafted the Loan Document.
(1) The term "certificate" means the sworn, notarized statement of
the entity giving the certificate, made by a duly authorized person satisfactory
to Lender affirming the truth and accuracy of every statement in the
certificate. Any document that is "certified" means the document has been
appended to a certificate of the entity certifying the document that affirms the
truth and accuracy of everything in the document being certified. In all
instances the entity issuing a certificate must be satisfactory to Lender.
(m) Any appointment of Lender as Borrower's attorney-in-fact is
irrevocable and coupled with an interest. Lender may appoint a substitute
attorney-in-fact. Borrower ratifies all actions taken by the attorney-in-fact
but, nevertheless, if Lender requests, Borrower will specifically ratify any
action taken by the attorney-in-fact by executing and delivering to the
attorney-in-fact or to any entity designated by the attorney-in-fact all
documents necessary to effect the ratification.
(n) Any document, instrument or agreement to be delivered by
Borrower will be in form and content satisfactory to Lender.
(o) All obligations, rights, remedies and waivers contained in the
Loan Documents will be construed as being limited only to the extent required to
be enforceable under the Law.
(p) The unmodified word "days" means calendar days.
2