Exhibit 10.5
THE COLLATERAL SUBJECT TO THIS MORTGAGE, SECURITY AGREEMENT, AND FINANCING
STATEMENT INCLUDES GOODS THAT ARE OR ARE TO BECOME FIXTURES.
THIS MORTGAGE, SECURITY AGREEMENT, AND FINANCING STATEMENT IS TO BE FILED IN THE
REAL PROPERTY RECORDS FOR LEXINGTON COUNTY, SOUTH CAROLINA, AND SHALL SERVE AS A
FIXTURE FILING FINANCING STATEMENT.
STATE OF SOUTH CAROLINA ) MORTGAGE, SECURITY AGREEMENT
) AND FINANCING STATEMENT
COUNTY OF LEXINGTON )
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT (the "MORTGAGE")
is made and entered into as of December 9, 2005, by ENCLAVES OF GRAND OAKS,
LLC., a South Carolina limited liability company, its successors and assigns
(the "MORTGAGOR"), in favor of SOVEREIGN BANK, a federally chartered savings
bank, having as an address ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, its
successors and assigns (the "MORTGAGEE").
WITNESSETH:
WHEREAS, the Mortgagor is indebted to Mortgagee pursuant to a promissory
note dated of even date herewith in the face amount of Four Million Six Hundred
Fifteen Thousand and 00/100 Dollars ($4,615,000.00) (together with any and all
extensions, renewals, or modifications thereof, the "NOTE"), evidencing a loan
(the "LOAN") from Mortgagor to Mortgagee in like amount; and
WHEREAS, the Mortgagor desires to secure its obligations under the Note by
granting the Mortgagee a mortgage lien on the real property and improvements and
a security interest in the personal property described below;
NOW, THEREFORE, the Mortgagor, in consideration of the aforesaid debt, and
also in consideration of the further sum of Three and No/100 ($3.00) Dollars, to
it in hand paid by the Mortgagee, receipt whereof is hereby acknowledged, and
for the purpose of securing the Obligations (as hereinafter defined), has
granted, bargained, sold, and released, and by these presents, does grant,
bargain, sell and release unto the Mortgagee, its successors and assigns, and
Mortgagor does hereby grant a security interest in, the following property,
rights, and interests (collectively, the "PROPERTY"):
(a) LAND. The real property described in Exhibit A attached hereto and
made a part hereof (the "LAND");
(b) ADDITIONAL LAND. All ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ and development rights
hereafter acquired by Mortgagor for use in connection with the Land and the
development of the Land and all additional lands and estates therein which may,
from time to time, by supplemental mortgage or otherwise be expressly made
subject to the lien of this Security Instrument;
(c) IMPROVEMENTS. The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Land (collectively, the
"IMPROVEMENTS");
(d) EASEMENTS. All easements, rights-of-way or use, rights, strips and
gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development rights, and all
estates, rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
now or hereafter belonging, relating or pertaining to the Land and the
Improvements and the reversions and remainders, and all land lying in the bed of
any street, road or avenue, opened or proposed, in front of or adjoining the
Land, to the center line thereof and all the estates, rights, titles, interests,
rights of dower, rights of curtesy, property, possession, claim and demand
whatsoever, both at law and in equity, of Mortgagor, in and to the Land and the
Improvements and every part and parcel thereof, with the appurtenances thereto;
and
(e) OTHER INTERESTS. All rights, privileges, interests, tenements,
hereditaments and appurtenances thereto belonging, including without limitation
all right, title and interest of Mortgagor in and to water, minerals, flowers,
shrubs, crops, trees, timber and other emblements now or hereafter located
therein, and the rents, issues and profits thereof, and any and all fixtures now
or subsequently attached to or used in connection therewith;
(f) FIXTURES AND PERSONAL PROPERTY. All machinery, equipment, fixtures
(including, but not limited to, all heating, air conditioning, plumbing,
lighting, communications and elevator fixtures), furniture, software used in or
to operate any of the foregoing and other property of every kind and nature
whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an
interest, now or hereafter located upon the Land and the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Land and the Improvements and all building
equipment, materials and supplies of any nature whatsoever owned by Mortgagor,
or in which Mortgagor has or shall have an interest, now or hereafter located
upon the Land and the Improvements, or appurtenant thereto, or usable in
connection with the present or future operation and occupancy of the Land and
the Improvements, together with all building materials and equipment now or
hereafter delivered to the Land or the Improvements and intended to be installed
therein (collectively, the "PERSONAL PROPERTY"), and the right, title and
interest of Mortgagor in and to any of the Personal Property which may be
subject to any security interests, as defined in the Uniform Commercial Code, as
adopted and enacted by the state or states where any of the Property is located
(the "UNIFORM COMMERCIAL CODE"), and all proceeds and products of the above;
(g) LEASES AND RENTS. All leases, subleases, subsubleases, lettings,
licenses, concessions or other agreements (whether written or oral) pursuant to
which any person is granted a possessory interest in, or right to use or occupy
all or any portion of the Land and the Improvements, and every modification,
amendment or other agreement relating to such leases, subleases, subsubleases,
or other agreements entered into in connection with such leases, subleases,
subsubleases, or other agreements and every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto, heretofore or hereafter entered into,
whether before or after the filing by or against Mortgagor of any petition for
relief under any bankruptcy or insolvency laws (collectively, the "LEASES") and
all right, title and interest of Mortgagor, its successors and assigns therein
and thereunder, including, without limitation, cash or securities deposited
thereunder to secure the performance by the lessees of their obligations
2
thereunder and all rents, additional rents, rent equivalents, moneys payable as
damages or in lieu of rent or rent equivalents, royalties (including, without
limitation, all oil and gas or other mineral royalties and bonuses), income,
receivables, receipts, revenues, deposits (including, without limitation,
security, utility and other deposits), accounts, cash, issues, profits, charges
for services rendered, and other consideration of whatever form or nature
received by or paid to or for the account of or benefit of Mortgagor or its
agents or employees from any and all sources arising from or attributable to the
Property, including, all receivables, customer obligations, installment payment
obligations and other obligations now existing or hereafter arising or created
out of the sale, lease, sublease, license, concession or other grant of the
right of the use and occupancy of property or rendering of services by
Mortgagor, and proceeds, if any, from business interruption or other loss of
income insurance whether paid or accruing before or after the filing by or
against Mortgagor of any petition for relief under any bankruptcy or insolvency
laws (collectively, the "RENTS") and all proceeds from the sale or other
disposition of the Leases and the right to receive and apply the Rents to the
payment of the Debt;
(h) INSURANCE PROCEEDS. All Insurance Proceeds in respect of the Property
under any Policies covering the Property, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property;
(i) CONDEMNATION AWARDS. All Awards, including interest thereon, which may
heretofore and hereafter be made with respect to the Property by reason of
Condemnation, whether from the exercise of the right of eminent domain
(including, but not limited to, any transfer made in lieu of or in anticipation
of the exercise of the right), or for a change of grade, or for any other injury
to or decrease in the value of the Property;
(j) BONDS, DEPOSIT, AND PERMITS. All utility service bonds and/or cash
deposits, site improvement bonds and/or cash deposits, building permits, sewer
connection and/or tap-in permits, water connection and/or tap-in permits,
curb-cut permits, utility service agreements, site work agreements with any
governmental authority or public utility, and all other permits, approvals and
contracts of any kind relating to the Land or Improvements;
(k) WARRANTIES AND GUARANTIES. All warranties and guaranties covering any
appliances and fixtures now or hereafter located on or placed upon the Land or
used in connection with the Improvements including without limitation, air
conditioning, heating and other appliances and equipment;
(l) SURVEYS AND DOCUMENTS. All surveys, agreements, instruments,
contracts, documents of title, choses in action or intangible property or
contract rights of any kind now existing or hereafter arising or created or
entered in to related to the Land or the Improvements or ownership or operation
of the Land or Improvements including, but not limited to, the plans and
specifications, all construction, architectural and other contracts, purchase
orders, permits, approvals, licenses, franchises, trademarks, project logos,
building names, surveys, insurance policies, bonds, escrow funds, easement,
exclusive agency licenses or leases and proceeds of any of the foregoing;
(m) SALES AGREEMENTS. All sales agreements, deposit receipts, escrow
agreements and other ancillary documents and agreements entered into which
respect to the sale to any purchasers of any part of the Land or any buildings
or structures on the Land, together with all deposits and other proceeds of the
sale thereof;
3
(n) LICENSES. All licenses (including, but not limited to, any operating
licenses), contracts, management contracts or agreements, franchise agreements,
permits, authorities or certificates required or used in connection with the
ownership of, or the operation or maintenance of the Improvements;
(o) NAMES AND TRADEMARKS. All names under or by which the Land or the
Improvements may at any time be operated or known, and all rights to carry on
business under any such names or any variant thereof, and all trademarks, trade
names, patents pending and goodwill;
(p) TAX CERTIORARI. All refunds, rebates or credits in connection with
reduction in real estate taxes and assessments charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction;
(q) RIGHTS. The right, in the name and on behalf of Mortgagor, to appear
in and defend any action or proceeding brought with respect to the Property and
to commence any action or proceeding to protect the interest of Mortgagee in the
Property;
(r) AGREEMENTS. All agreements, contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or
hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of the
Land and any part thereof and any Improvements or any business or activity
conducted on the Land and any part thereof and all right, title and interest of
Mortgagor therein and thereunder, including, without limitation, the right, upon
the happening of any default hereunder, to receive and collect any sums payable
to Mortgagor thereunder;
(s) INTANGIBLES. All tradenames, trademarks, servicemarks, logos,
copyrights, goodwill, books and records and all other general intangibles
relating to or used in connection with the operation of the Property;
(t) ACCOUNTS. All reserves, escrows and deposit accounts maintained by
Mortgagor with respect to the Property;
(u) CONVERSION. All proceeds of the conversion, voluntary or involuntary,
of any of the foregoing items set forth in subsections (a) through (m)
including, without limitation, Insurance Proceeds and Awards, into cash or
liquidation claims; and
(v) OTHER RIGHTS. Any and all other rights of Mortgagor in and to the
items set forth above.
TO HAVE AND TO HOLD, all and singular the Property, unto the Mortgagee, its
successors and assigns forever.
AND the Mortgagor covenants with the Mortgagee that the Mortgagor is
indefeasibly seized of a good and marketable fee simple title to said Land and
has good and lawful authority to mortgage said Land; that the Mortgagor hereby
fully warrants the title to said Land and will defend the same against the
lawful claims of all persons whomsoever; and that said Land is free and clear of
all encumbrances except taxes for the current year, a lien but not yet due and
payable, and any encumbrances described in Schedule B of the title insurance
policy accepted by Mortgagee.
4
PROVIDED, ALWAYS, that if the Mortgagor shall pay unto the Mortgagee the
said Obligations (including any future advances); AND if the Mortgagor shall
duly, promptly and fully perform, discharge, execute, effect, complete and
comply with and abide by each and every of the stipulations, agreements,
conditions and covenants therein and in this Mortgage, then this Mortgage shall
cease and be null and void; otherwise to remain in full force and effect.
THIS MORTGAGE secures the following obligations (collectively, the
"OBLIGATIONS"): (a) the obligations of Mortgagor to Mortgagee under the Note;
(b) any and all advances or expenditures made by Mortgagee pursuant to the terms
of this Mortgage; (c) attorneys' fees, court costs, and other amounts which may
be due under the Note or this Mortgage; (d) the obligations of Mortgagor to
Mortgagee under that certain hazardous substances indemnity agreement of even
date herewith executed by Mortgagor in favor of Mortgagor; (e) any and all other
indebtedness of Mortgagor to Mortgagee, now existing or hereafter arising, of
whatever class or nature, whether or not now contemplated by the parties,
including future advances pursuant to S.C. Code ▇▇▇. ss. 29-3-50 (as set forth
more fully below); and (f) any and all extensions, renewals, and modifications
of any of the foregoing. Extensions, renewals, and modifications of the debt
secured hereby, and future advances, may bear interest at a rate or rates higher
than the rate borne by the Note or the other Obligations.
THIS MORTGAGE shall secure not only existing indebtedness but all future
advances (in accordance with S.C. Code ▇▇▇. ss. 29-3-50, as amended),
readvances, and additional indebtedness hereafter arising or incurred by
Mortgagor to or in favor of Mortgagee, and any notes evidencing the same,
whether such advances or indebtedness is obligatory or to be made at the option
of the Mortgagee, or otherwise, to the same extent as if such future advance or
indebtedness was made on the date of the execution of this Mortgage, but the
indebtedness secured by this Mortgage shall not exceed at any one time the
maximum principal amount of One Million Five Hundred Thirty Thousand and 00/100
Dollars ($1,530,000.00), plus interest thereon, reasonable attorneys' fees and
court costs, and plus advancements for taxes, insurance premiums, and repairs
made by Mortgagee. All indebtedness incurred after the date hereof by Mortgagor
in favor of Mortgagee shall conclusively be deemed to be a future advance under
this Mortgage and entitled to the protection of this provision and the security
of this Mortgage. Such future indebtedness may bear interest at a rate or rates
greater than the rate set forth in the Note, or the other Obligations. Interest
on the Obligations will be deferred, accrued, or capitalized, but Mortgagee
shall not be required to defer, accrue, or capitalize any interest except as
provided in the Obligations.
AND the Mortgagor does hereby expressly covenant and agree as follows:
1. ASSIGNMENT OF RENTS AND PROFITS. As further security for the payment
of the Obligations and for the faithful performance of all the covenants,
agreements, terms and provisions of this Mortgage, Mortgagor hereby sells,
mortgages, transfers, and assigns unto Mortgagee and grants Mortgagee a security
interest in all the right, title and interest of the Mortgagor in and to all
current and future Leases and Rents; it being intended by Mortgagor that this
assignment constitutes a present, absolute assignment and not an assignment for
additional security only, and does hereby direct each and all of the tenants of
the Property to pay such rents, as they may now be due or shall hereafter become
due to the said Mortgagee, upon demand for payment thereof by said Mortgagee.
Nevertheless, Mortgagee grants to Mortgagor a revocable license to collect and
receive the Rents until demand for payment thereof by said Mortgagee; it being
understood and agreed, however, that no such demand shall be made unless and
until there has occurred an Event of Default hereunder; provided, however, that
the license to collect or continue collecting, as aforesaid, by the Mortgagor
5
shall not operate to permit the collection of any rents more than thirty (30)
days in advance of the date same are due under the terms and provisions of said
lease or leases.
2. MAINTENANCE OF PROPERTY. Mortgagor shall maintain the Property in good
condition and repair and shall neither permit nor allow waste thereof. Mortgagor
shall promptly repair or restore any portion of the Property which is damaged or
destroyed by any cause whatsoever and shall promptly pay when due all costs and
expenses of such repair or restoration. Mortgagor shall not remove, demolish, or
materially alter any improvement or fixture which is now or hereafter part of
the Property and shall cut no timber on the Property without the express written
consent of Mortgagee. Mortgagee shall be entitled to specific performance of the
provisions of this paragraph.
3. HAZARD AND FLOOD INSURANCE. Mortgagor shall maintain with respect to
all completed buildings, improvements, fixtures, and tangible personal property
which are now or hereafter part of the Property, fire and extended coverage
insurance, including windstorm and hail, and earthquake insurance, and such
other hazard insurance as Mortgagor may require. If any portion of the Property
is located in a federally designated special flood hazard area, Mortgagor shall
also obtain a flood insurance policy in the maximum amount available under the
National Flood Insurance Act of 1968, but not to exceed the replacement value of
all buildings and improvements located on the Property that are located in a
federally designated special flood hazard area. All such insurance shall be
payable to Mortgagee as the interest of Mortgagee may appear pursuant to the New
York standard form of mortgagee clause or such other form of mortgagee clause as
may be required by the Mortgagee and shall not be cancelable by either the
insurer or the insured without at least thirty (30) days prior written notice to
the Mortgagee. Mortgagor shall keep the Property continuously insured as herein
required and shall deliver to Mortgagee a copy of each policy of insurance
required hereby together with a current certificate of insurance. Mortgagor
shall pay each premium coming due on any such policy of insurance and will
deliver to Mortgagee proof of such payment at least ten (10) days prior to the
date such premium would become overdue or delinquent. Upon the expiration or
termination of any such policy of insurance, Mortgagor shall furnish to
Mortgagee at least ten (10) days prior to such expiration or termination a copy
of a renewal or replacement policy of insurance meeting the requirements hereof
together with a current certificate of insurance. If Mortgagor fails to insure
the Property as herein required, Mortgagee may so insure the Property in the
name of Mortgagor or in the name of Mortgagee or both, and the premiums for any
such insurance obtained by Mortgagee shall be the obligation of Mortgagor and
shall be secured by this Mortgage. Upon foreclosure of this Mortgage, all right,
title and interest of Mortgagor in and to any policy of insurance upon the
Property which is in the custody of Mortgagee, including the right to unearned
premiums, shall vest in the purchaser of the Property at foreclosure, and
Mortgagor hereby appoints Mortgagee as the attorney in fact of Mortgagor to
assign all right, title and interest of Mortgagor in and to any such policy of
insurance to such purchaser. This appointment is coupled with an interest and
shall be irrevocable.
4. PROCEEDS OF INSURANCE. Mortgagor hereby assigns to Mortgagee the right
to collect and receive any indemnity payment otherwise owed Mortgagor upon any
policy of insurance insuring any portion of the Property, regardless of whether
Mortgagee is named in such policy as a person entitled to collect upon the same.
So long as there has occurred no Event of Default hereunder, or any event which
but for the lapse of time or the giving of notice would constitute an Event of
Default, any indemnity payment received by Mortgagee from any such policy of
insurance shall be applied in a manner reasonably determined by Mortgagee to the
replacement, repair or restoration of the portion of the Property damaged or
destroyed. Notwithstanding the foregoing, if at the time of payment of the
insurance proceeds there has occurred an Event of Default which has not been
6
cured or remedied as permitted hereunder, or if in the reasonable determination
of Mortgagee the insurance proceeds, together with funds made available by
Mortgagor for such purpose, are insufficient to replace, repair, or restore the
Property, then Mortgagee may apply such proceeds to payment of any sum secured
by this Mortgage in such order as Mortgagee may determine. No portion of any
indemnity payment which is applied to replacement, repair or restoration of any
portion of the Property or which may be released to Mortgagor shall be deemed a
payment against any sums secured by this Mortgage.
5. TAXES. Mortgagor shall pay all taxes, assessments and other charges
which constitute or are secured by a lien upon the Property and shall deliver to
Mortgagee proof of payment of the same not less than ten (10) days prior to the
date the same becomes delinquent; provided, however, that Mortgagor shall be
entitled by appropriate proceedings to contest the amount of validity of such
tax, assessment or charge so long as the collection of the same by foreclosure
of the lien upon the Property is stayed during the pendency of such proceedings
and Mortgagor deposits with the authority to which such tax, assessment or
charge is payable or with the Mortgagee appropriate security for payment of the
same, together with any applicable interest and penalties, should the same be
determined due and owing. Mortgagor shall not claim, demand or be entitled to
receive any credit or credits on the principal or interest payable under the
Obligations secured hereby, for so much of the taxes, assessments or similar
impositions assessed against the Property or any part thereof as are applicable
to the indebtedness secured hereby or to Mortgagee's interest in the Property.
No deduction shall be claimed from the taxable value of the Property or any part
thereof by reason of the Note, this Mortgage or any other instrument securing
the Note.
6. ADVANCES BY MORTGAGEE; REIMBURSEMENT. If Mortgagor fails to make
payment for restoration or repair of the Property, for insurance premiums or for
taxes, assessments or other charges as required in this Mortgage, Mortgagee may,
but shall not be obligated to, pay for the same, and any such payment by
Mortgagee will be secured by this Mortgage and have the same rank and priority
as the principal debt secured hereby and bear interest from the date of payment
at the highest rate set forth in any promissory note secured by this Mortgage.
Payments made for taxes by Mortgagee shall be a first lien on the Property to
the extent of the taxes so paid with interest from the date of payment,
regardless of rank or priority of this Mortgage. Mortgagor shall pay to
Mortgagee in cash on demand an amount equal to any payment made by Mortgagee
pursuant to this paragraph plus interest thereon as herein provided.
7. EXTENDING TIME FOR PAYMENT; MODIFICATION OF INDEBTEDNESS. Mortgagee,
without notice, and as often as it wishes to, may agree with any party obligated
on the Obligations (or any of them), or having an interest in the Property, to
renew or extend the time for payment of any part or all of the indebtedness
secured hereby, or otherwise modify the payment terms (including without
limitation the interest rate) of any indebtedness secured hereby, all without in
any way affecting either the lien hereof or the liability of any other party.
8. EVENTS OF DEFAULT. The term "EVENT OF DEFAULT," wherever used in this
Mortgage, shall mean any one or more of the following events:
(a) The occurrence of an Event of Default under and as defined in the
Note, and the continuation of such default unremedied beyond any applicable
grace period set forth in the Note;
7
(b) Failure by the Mortgagor to duly observe any covenant, condition
or agreement of this Mortgage other than the payment of principal or
interest on the Obligations, and the continuation of such failure
unremedied for a period of thirty (30) days after written notice thereof is
provided by Mortgagee to Mortgagor; provided, however, that if such
obligation, covenant or agreement is not an obligation, covenant or
agreement for the payment of money and is susceptible of being cured by the
Mortgagor, but not reasonably within thirty (30) days, no default shall be
deemed to have occurred so long as the Mortgagor commences cure within such
thirty (30) days and diligently pursues such cure to completion and such
cure is completed within ninety (90) days;
(c) The discovery of any "HAZARDOUS SUBSTANCE" (as defined in the
hazardous substances indemnity agreement of even date herewith executed by
the Mortgagor in favor of the Mortgagee ) on the Property, which Mortgagee
reasonably determines has a material, adverse effect on the value of such
property; provided, however, that such discovery of any hazardous substance
on such property shall not constitute an Event of Default provided that the
Mortgagor within thirty (30) days after written demand for performance
thereof by Mortgagee (or such shorter period of time as may be required
under any applicable law, regulation, order, or agreement), commences to
perform, or causes to be commenced, and thereafter diligently prosecutes to
completion, all site monitoring, containment, cleanup, removal,
restoration, or other remedial work of any kind or nature reasonably
necessary or desirable under any applicable local, state, or federal law or
regulation, or required under any judicial order, or by any governmental
entity, to remedy the effect of the presence of such hazardous substances;
(d) The occurrence of an "Event of Default" under and as defined in
that certain loan agreement dated of even date herewith between Mortgagor
and Mortgagee, and the continuation of such default unremedied beyond any
applicable grace period set forth in such loan agreement;
(e) The sale, conveyance, transfer, mortgage, lease or encumbrance of
all or any portion of the Property, other than the sale of parcels from the
Property in accordance with the terms and conditions of the Loan Agreement,
and other than leases entered into in the ordinary course of business at
market rates;
(f) The damage or destruction of a material portion of the
Improvements, which damage or destruction is not promptly repaired or is
not fully covered by insurance;
(g) Mortgagor suffers or permits any lien, encumbrance, or security
interest, to arise or attach to the Property that is not promptly removed
or satisfied, or any judgment is entered against Mortgagor that is not
satisfied or appealed and stayed within thirty days; and
(h) Default in the terms or conditions of any other mortgage which is
a lien upon the Property (irrespective of whether such mortgage is
permitted by the terms of this Mortgage) and the continuation of such
default beyond any applicable grace period.
9. CONSEQUENCES OF DEFAULT. If an Event of Default shall occur:
(a) All of the indebtedness secured hereby shall become and be
immediately due and payable at the option of the Mortgagee, without notice
8
or demand, which are hereby expressly waived, and the Mortgagee may proceed
to foreclose this Mortgage and sell the Property or otherwise pursue any
right or remedy herein or by law provided. At the foreclosure, Mortgagee
shall be entitled to bid and purchase the Property and shall be entitled to
apply the debt secured hereby, or any portion thereof, in payment for the
Property.
(b) Irrespective of whether Mortgagee accelerates the maturity of all
indebtedness secured hereby, or institutes foreclosure proceedings,
Mortgagee shall be entitled to the appointment of a receiver to enter upon
and take and maintain full control of the Property in order to perform all
acts necessary and appropriate for the operation and maintenance thereof
including, but not limited to, the execution, cancellation or modification
of leases, the making of repairs to the Property and the execution or
termination of contracts providing for the management or maintenance of the
Property, all on such terms as are deemed appropriate to protect the
security of this Mortgage. The receiver shall be entitled to a reasonable
fee for so managing the Property. All rents collected pursuant to this
paragraph shall be applied first to the costs of taking control and
managing the Property and collecting the rents, including but not limited
to reasonable attorneys' fees, receiver's fees, premiums on receiver's
bonds, costs of repair to the Property, premiums on insurance policies,
taxes, assessments and other charges on the Property, and the costs of
discharging any liability or obligation of Mortgagor as lessor or landlord
of the Property and then to the sums secured by this Mortgage. Mortgagee
and the receiver shall have access to the books and records used in the
operation and maintenance of the Property and shall be liable to account
only for those rents actually received. Mortgagee shall not be liable to
Mortgagor, anyone claiming under or through Mortgagor, or anyone having an
interest in the Property by reason of anything done or left undone by
Mortgagee under this paragraph. If the rents of the Property are not
sufficient to meet the costs of taking control of and managing the Property
and collecting the rents, Mortgagee may at its sole option advance funds to
meet the costs. Any funds expended by Mortgagee for such purposes shall
become indebtedness of Mortgagor to Mortgagee secured by this Mortgage.
Such funds shall be payable on demand by Mortgagee and shall bear interest
at the highest rate set forth in any promissory note secured by this
Mortgage. The entering upon and taking and maintaining of control of the
Property by the Mortgagee or the receiver and the application of the rents
as provided herein shall not cure or waive any default hereunder or
invalidate any other right or remedy of Mortgagee hereunder.
(c) The Mortgagee shall, in addition to all other rights and remedies,
have the rights and remedies of a secured party under the Uniform
Commercial Code, including without limitation, the right to take possession
of the Personal Property, and for that purpose the Mortgagee may: (i) so
far as the Mortgagor can give authority therefor, enter upon any premises
on which the Personal Property may be situated and remove the same
therefrom; (ii) take possession or control of the Personal Property and the
premises on which it is located; (iii) require the Mortgagor to assemble
all or any part of the Personal Property or records concerning the Personal
Property and make such available to the Mortgagee at a place to be
designated by the Mortgagee which is reasonably convenient to both parties;
(iv) sell or otherwise dispose of all or any part of the inventory on any
premises where then located without being liable to the Mortgagor on
account of any loss, damage or depreciation that may occur as a result
thereof so long as the Mortgagee shall act in a commercially reasonable
manner; (v) use all trademarks, service marks, trade names, trade styles,
logos, goodwill, trade secrets, franchises, licenses and patents which the
Mortgagor now has or may hereafter acquire, including the right to use or
license the use of said marks, names, styles, logos and goodwill in
connection with the sale of goods or the rendering of services, in the
9
conduct of service, advertising, promotion and the like; and (vi) lease or
license third persons or entities for such purpose. Unless the Personal
Property is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Mortgagee shall give to
the Mortgagor at least thirty (30) days' prior written notice (which
Mortgagor agrees is "reasonable notification" within the meaning of Section
9-504 of the Uniform Commercial Code of the State of South Carolina) of the
time and place of any public sale or any other intended disposition of the
Personal Property is to be made.
10. MARSHALLING OF ASSETS. The Mortgagee shall not be required to marshal
any present or future security for (including but not limited to this Mortgage
and the Property), or guaranties of, the Obligations or any of them, or to
resort to such security or guaranties in any particular order; and all of the
rights hereunder and in respect of such security and guaranties shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that it lawfully may, the Mortgagor hereby agrees that it will not
invoke any law relating to the marshalling of collateral which might cause delay
in or impede the enforcement of the Mortgagee's rights under this Mortgage or
under any other instrument evidencing any of the Obligations or under which any
of the Obligations is secured or guaranteed, and to the extent that it lawfully
may, the Mortgagor hereby irrevocably waives the benefits of all such laws.
11. COSTS AND EXPENSES. All reasonable costs and expenses (including
reasonable attorneys' fees) incurred or paid by the Mortgagee in connection with
enforcement of the Obligations or the exercise by the Mortgagee of any of its
rights or remedies hereunder, or in retaking, holding, preparing for sale and
selling or otherwise realizing upon any of the Property, including, without
limitation, the reasonable attorneys' fees and expenses of any attorney to whom
this matter is referred (whether or not litigation is commenced), or for
representation in proceedings under any bankruptcy or insolvency law, or in case
the Mortgagee has become a party either as plaintiff or as defendant in any suit
or legal proceeding in relation to the Property or the lien created herein,
shall be repaid by the Mortgagor to the Mortgagee upon demand, with interest at
the highest rate set forth in any promissory note secured by this Mortgage. In
the event said expenses are not paid by the Mortgagor to the Mortgagee, they
shall become part of the Obligations and shall be secured hereby.
12. INTEREST. It is agreed that nothing herein contained nor any
transaction related thereto shall be construed or so operate as to require the
Mortgagor to pay interest at a rate greater than is now lawful in such case to
contract for, or to make any payment or to do any act contrary to laws, that if
any clauses or provisions herein contained operate or would prospectively
operate to invalidate this Mortgage or any promissory note or other indebtedness
secured hereby, in whole or in part, then such clauses and provisions only shall
be held for naught, as though not herein contained, and the remainder of this
Mortgage shall remain operative and in full force and effect.
13. EMINENT DOMAIN. The Mortgagee shall be entitled to receive and recover
the entire award made in any eminent domain proceedings to the extent that the
same does not exceed the amount necessary to pay in full all sums secured by the
lien of this Mortgage.
14. TRANSFER OF PROPERTY. Mortgagor shall not sell, convey, transfer,
mortgage, lease or further encumber, nor suffer or permit the sale, conveyance,
transfer, mortgage, lease or encumbrance, whether voluntarily or by operation of
law, of any interest in or any part of the Property, the rents and profits
therefrom, or the Personal Property, without the prior written consent of
Mortgagee; provided, however, that the Mortgagor may sell parcels from the
Property in accordance with the terms and conditions of the Loan Agreement. If
any person or entity should obtain any interest in all or any part of the
10
Property pursuant to the execution or enforcement of any lien, security interest
or other right, whether superior, equal or subordinate to this Mortgage or the
lien hereof, such event shall unless otherwise provided herein be deemed to be a
transfer by Mortgagor. Mortgagor shall not, without the prior written consent of
the Mortgagee, further assign the rents from the Property nor enter into any
agreement or do any act to amend, modify, extend, terminate or cancel, accept
the surrender, subordinate, accelerate the payment of rent, or change the terms
of any renewal option of any lease now or hereafter covering such property or
any part thereof which would in each instance or in the aggregate materially
affect the collateral or the operation of the Mortgagor or the Property or the
ability of the Mortgagor to perform its obligations hereunder.
15. FURTHER ASSURANCES. The Mortgagor shall, at its sole expense, do,
make, execute and deliver all such additional and further acts, things, deeds,
assurances and instruments, in each case in form and substance, satisfactory to
the Mortgagee, relating to the creation, validity, or perfection of the mortgage
lien and security interests provided for in this Agreement under the Uniform
Commercial Code or other laws of the State of South Carolina or of any other
state or states in which Mortgagor is doing business or in which any of the
Property is located as the Mortgagee may from time to time reasonably request,
and shall take all such other action as the Mortgagee may reasonably require
more completely to vest in any and assure to the Mortgagee its rights hereunder
or in any of the Property, including without limitation execution and delivery
of financing statements which the Mortgagee deems appropriate to perfect and
continue the security interest hereby granted; and the Mortgagor hereby
irrevocably authorizes the Mortgagee, or its designee, at the Mortgagor's sole
expense, to execute and file such financing statements, with or without the
Mortgagor's signature, as the Mortgagee may deem appropriate. In the event that
any recording or refiling (or the filing of any statement of continuation of any
mortgage lien or financing statement) or any repledge, or any other action, is
required at any time to protect and preserve such security interests, the
Mortgagor shall, at its sole expense, cause the same to be done or taken at such
time and in such manner as may be necessary and as may be reasonably requested
by the Mortgagee.
16. INSPECTIONS; EASEMENT. Mortgagor agrees that Mortgagee shall have the
right, at any time during the term of this Mortgage, to conduct an environmental
investigation of the Property, either itself or by or through designated agents
and may exercise such rights from time to time, and in furtherance of such
rights, Mortgagor hereby grants to Mortgagee, its successors and assigns, a
non-exclusive limited easement over and across the Property, and its subsurface,
for access to the Property and for the purpose of conducting an environmental
investigation of such Property (including the taking of physical samples),
provided that any such investigation shall be conducted in such a manner as to
not disrupt the Mortgagor's operations on the Property. Mortgagor acknowledges
that no adequate remedy at law exists for a violation of the easement granted
herein and agrees that Mortgagee is entitled to specific performance of its
rights under this easement. The satisfaction of, or the release of a portion of
the Property, shall evidence a termination of the easement granted herein in
full, or as to the Property released, as the case may be.
17. GOVERNING LAW. This instrument is to be governed by and construed in
accordance with the laws of the State of South Carolina and each of the remedies
provided for herein shall be cumulative so that the right of the Mortgagee to
exercise one or more of such remedies shall not be construed to limit or
preclude the right of the Mortgagee to exercise any other remedy or remedies set
forth herein.
11
18. NO WAIVER. No delay by Mortgagee in exercising any right or remedy
hereunder, or otherwise afforded by law, shall operate as a waiver thereof or
preclude the exercise thereof during the continuance of any default hereunder.
19. MISCELLANEOUS. The covenants herein contained shall bind, and the
benefits and advantages shall inure to the respective heirs, executors,
administrators, successors and assigns of the parties hereto. Wherever used, the
singular number shall include the plural, the plural the singular, and the use
of any gender shall include all genders.
20. BENEFITS TO MORTGAGOR. The undersigned Mortgagor represents to
Mortgagee that the Mortgagor is benefited by the loans evidenced by the Note,
whether or not the Mortgagor is the obligor thereon, and that adequate and
sufficient consideration has been given to Mortgagor for its execution and
delivery of this Mortgage.
21. SECURITY AGREEMENT. This Mortgage creates a lien on the Property, and
to the extent the Property is not real property under applicable law this
Mortgage constitutes a security agreement under the South Carolina Uniform
Commercial Code and any other applicable law.
22. NO DEROGATION. The grant of a security interest to Mortgagee in the
granting clauses of this Mortgage shall not be construed to derogate from or
impair the lien or provisions of or the rights of Mortgagee under this Mortgage
with respect to any property described therein which is real property or which
the parties have agreed to treat as real property. The hereby stated intention
of the Mortgagor and Mortgagee is that everything used in connection with the
production of income from such real property or adapted for use thereon is, and
at all times and for all purposes and in all proceedings, both legal and
equitable, shall be regarded as real property, irrespective of whether or not
the same is physically attached to the land or the improvements thereon. If
required by Mortgagee, at any time during the term of this Mortgage, Mortgagor
will execute and deliver to Mortgagee, in form satisfactory to Mortgagee,
additional security agreements, financing statements and/or other instruments
covering all personal property or fixtures of Mortgagor which may at any time be
furnished, placed on, or annexed or made appurtenant to the real property or
used, useful or held for use, in the operation of the Improvements.
23. PERSONAL PROPERTY. As to any part of the Property constituting
personal property, Mortgagee may proceed as to such personal property in
accordance with Mortgagee's rights and remedies in respect to such property or
sell the personal property separately and without regard to the remainder of the
Property in accordance with Mortgagee's rights and remedies provided by the
South Carolina Uniform Commercial Code as well as other rights and remedies
available at law or in equity.
24. FINANCING STATEMENTS. With respect to those items of the Property
which are or are to become fixtures related to the herein described real estate,
this Mortgage shall constitute a financing statement filed as a fixture filing.
The lien upon fixtures granted herein and perfected hereby shall be in addition
to and not in lieu of any lien upon fixtures acquired under real property law.
25. NOTICES. Whenever this Mortgage requires or permits any notice,
request or demand by one party to the other, the notice, request or demand must
be in writing and shall be deemed to have been given if it is enclosed in an
envelope addressed to the party to be notified at the address stated below (or
such other address as may have been designated by written notice) properly
stamped, sealed, and deposited in the United States mail as certified or
12
registered mail, return receipt requested. The address of each party for the
purposes of this Section are as follows:
If to the Mortgagor Enclaves of Grand Oaks, LLC
c/o Enclave Group, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Mortgagee Sovereign Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
26. SEVERABILITY. If any provision hereof should be held unenforceable or
void, then such provision shall be deemed separable from the remaining
provisions and shall in no way affect the validity of this Mortgage except that
if such provision relates to the payment of any monetary sum, then, Mortgagee
may, at its option, declare the indebtedness and all other sums secured hereby
immediately due and payable.
27. INSTRUMENT UNDER SEAL. This Mortgage is intended to be and shall be
construed as an instrument under seal.
28. WAIVER OF JURY TRIAL. THE MORTGAGOR WAIVES ITS RIGHT TO A JURY TRIAL
WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS MORTGAGE, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OR
ENFORCEMENT OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the
Mortgagor waives any right which it may have to claim or recover in any
litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Mortgagor (i) certifies that neither the Mortgagee nor any
representative, agent or attorney of the Mortgagee has represented, expressly or
otherwise, that the Mortgagee would not, in the event of litigation, seek to
enforce the foregoing waivers or other waivers contained in this Mortgage and
(ii) acknowledges that, in making the Loan evidenced by the Note, the Mortgagee
is relying upon, among other things, the waivers and certifications contained in
this Section.
{Signatures on following pages}
13
29. WAIVER OF APPRAISAL RIGHTS. The laws of South Carolina provide that in
any real estate foreclosure proceeding a defendant against whom a personal
judgment is taken or asked may within thirty days after the sale of the Property
apply to the court for an order of appraisal. The statutory appraisal value as
approved by the court would be substituted for the high bid and may decrease the
amount of any deficiency owing in connection with the transaction. THE
UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH
MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT
REGARDLESS OF ANY APPRAISED VALUE OF THE PROPERTY.
IN WITNESS WHEREOF, Mortgagor has hereunto caused this Mortgage to be
executed in its name and its seal affixed hereto as of the date first written
above.
MORTGAGOR:
WITNESSES: ENCLAVES OF GRAND OAKS, LLC
a South Carolina, limited liability company
/s/ ▇▇▇▇▇ ▇▇▇▇ By: Enclaves Group, Inc.
▇▇▇▇▇ ▇▇▇▇ Its: Manager
---------------------------
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ----------------------------------
--------------------------- By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President and CEO
STATE OF NEW YORK )
)
COUNTY OF WESTCHESTER )
I, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, do hereby certify that Enclaves of Grand Oaks, LLC, a
South Carolina limited liability company Corporation, by Enclaves Group, Inc.,
its duly authorized Manager, by , its , personally appeared before me this day
and acknowledged the due execution of the foregoing instrument.
Witness my hand and official seal this the 8 day of December, 2005.
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
---------------------------
Notary Public for
--------------------
My Commission Expires:
---------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Notray Public, State of New York
No. 02PA6105869
Qualified in Westchester County
Commission Expires Feb. 23, 2008
14
EXHIBIT A
PROPERTY DESCRIPTION