Exhibit 10.4
MORTGAGE
TO BE RECORDED IN THE
MORTGAGE RECORDS OF
SHIAWASSEE COUNTY, MICHIGAN
THIS MORTGAGE (this “Mortgage”), executed on the date indicated on the
acknowledgment attached to this Mortgage, but to be effective as of July 8,
2009, is entered into by WOODARD—CM, LLC, a Delaware limited liability company,
as mortgagor for all purposes hereunder (“Borrower”), whose address is 650 South
Royal Lane, Suite 100, Coppell, Texas 75019, Attention: Mr. Brad Heimann, for
the benefit of THE FROST NATIONAL BANK, as mortgagee for all purposes hereunder
(“Lender”), whose address is 100 W. Houston, San Antonio, Texas 78205,
Attention: Ms. Kathy Hargrave. For all state law, statutory and other purposes
hereunder, (i) the term “Borrower” as used herein shall be deemed to mean a
mortgagor of the Property as described herein the same as if the term
“mortgagor” were used in lieu of the term “Borrower” throughout this Mortgage,
and (ii) the term “Lender” as used herein shall be deemed to mean a mortgagee of
the Property with all of the rights conferred hereby the same as if the term
“mortgagee” were used in lieu of the term “Lender” throughout this Mortgage.
W I T N E S S E T H:
THAT FOR AND IN CONSIDERATION OF THE SUM OF TEN AND NO/100 DOLLARS ($10.00), AND
OTHER VALUABLE CONSIDERATION, INCLUDING THE INDEBTEDNESS HEREIN RECITED AND THE
TRUST HEREIN CREATED, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, BORROWER HEREBY IRREVOCABLY MORTGAGES, WARRANTS, GRANTS, BARGAINS,
PLEDGES, SETS OVER AND ASSIGNS, AND GRANTS A SECURITY INTEREST, TO AND IN FAVOR
OF LENDER AND ITS SUCCESSORS AND ASSIGNS, with power of sale, in all of
Borrower’s estate, right, title and interest in, to and under any and all of the
following described property, whether now owned or hereafter acquired
(collectively, the “Property”):
(A) All that certain real property situated in the County of Shiawassee, State
of Michigan, more particularly described on Exhibit A attached hereto and
incorporated herein by this reference (the “Land”), together with all of the
easements, rights, privileges, franchises, tenements, hereditaments and
appurtenances now or hereafter thereunto belonging or in any way appertaining
thereto, and all of the estate, right, title, interest, claim and demand
whatsoever of Borrower therein or thereto, either at law or in equity, in
possession or in expectancy, now owned or hereafter acquired;
(B) All structures, buildings and improvements of every kind and description now
or at any time hereafter located or placed on the Land (the “Improvements”);
(C) All easements, rights-of-way, strips and gores of land, vaults, streets,
ways, alleys, passages, sewer rights, and other entitlements now or hereafter
located on the Land or under or above the same or any part or parcel thereof,
and all estates, rights, titles, interests, tenements, hereditaments and
appurtenances, reversions and remainders whatsoever, in any way belonging,
relating or appertaining to the Property or any part thereof, or which hereafter
shall in any way belong, relate or be appurtenant thereto, whether now owned or
hereafter acquired by Borrower; and all rights to make divisions, bonus
divisions and redivisions of the Land that are exempt from the platting
requirements of the Michigan Land Division Act, Act No. 288, of the Michigan
Public Acts of 1966, as it shall be amended;

 

 

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(D) All fixtures and equipment, necessary for the operation of the building
owned by Borrower and now or hereafter located on, attached to or used in or
about the Improvements, such as machines, engines, boilers, dynamos, elevators,
stokers, tanks, cabinets, awnings, screens, shades, blinds, carpets, draperies,
lawn mowers, appliances, plumbing, heating, air conditioning, lighting,
ventilating, refrigerating, disposals and incinerating equipment, in each case
solely to the extent necessary for the operation of the building, and all
warranties and guaranties relating thereto, and all additions thereto and
substitutions and replacements therefor (exclusive of any of the foregoing owned
or leased by tenants of space in the Improvements);
(E) All water, water courses, ditches, wells, reservoirs and drains and all
water, ditch, well, reservoir and drainage rights and powers which are
appurtenant to, located on, under or above or used in connection with the Land
or the Improvements, or any part thereof, together with (i) all utilities,
utility lines, utility commitments, utility capacity, capital recovery charges,
impact fees and other fees paid in connection with same, (ii) reimbursements or
other rights pertaining to utility or utility services provided to the Land
and/or Improvements and (iii) the present or future use or availability of waste
water capacity, or other utility facilities to the extent same pertain to or
benefit the Land and/or Improvements, including, without limitation, all
reservations of or commitments or letters covering any such use in the future,
whether now existing or hereafter created or acquired;
(F) All minerals, crops, timber, trees, shrubs, flowers and landscaping features
now or hereafter located on, under or above the Land;
(G) All cash funds, deposit accounts and other rights and evidence of rights to
cash, now or hereafter created or held by Lender pursuant to this Mortgage or
any other of the Loan Documents (as hereinafter defined), including, without
limitation, all funds now or hereafter on deposit in the Reserves (as
hereinafter defined);
(H) All leases, licenses, tenancies, concessions and occupancy agreements of the
Land or the Improvements now or hereafter entered into (collectively the
“Leases”) and all rents, royalties, issues, profits, bonus money, revenue,
income, rights and other benefits (collectively, the “Rents” or “Rents and
Profits”) of the Land or the Improvements, or the fixtures or equipment, now or
hereafter arising from the use or enjoyment of all or any portion thereof or
from any present or future lease (including, without limitation, oil, gas and
mineral leases), license, tenancy, concession, occupancy agreement or other
agreement pertaining thereto or arising from any of the Contracts (as
hereinafter defined) or any of the General Intangibles (as hereinafter defined)
and all cash or securities (the “Security Deposits”) to secure performance by
the tenants, lessees or licensees, as applicable, of their obligations under any
such leases, licenses, concessions or occupancy agreements, whether said cash or
securities are to be held until the expiration of the terms of said leases,
licenses, concessions or occupancy agreements or applied to one or more of the
installments of rent coming due prior to the expiration of said terms, subject,
however, to the provisions contained in Section 1.11 hereinbelow; the foregoing
Leases and Rents are specifically assigned and transferred to Lender pursuant to
and including all rights conferred by Act No. 210 of the Michigan Public Acts of
1953, as amended by Act No. 151 of the Michigan Public Acts of 1966 (MCLA
544.231 et seq.); and to the extent applicable Act No. 228 of the Michigan
Public Acts of 1925 [MCLA 554.211 et seq.], and include all or any part of the
oil and gas located in, on or under oil and gas properties, and all or any of
the rents and profits from oil and gas properties, and the income from the sales
of oil and gas produced or to be produced from oil and gas properties (in
accordance with Act No. 66 of the Michigan Public Acts of 1956 [MCLA 565.81 et
seq.]). Leases shall include any use or occupancy arrangements created pursuant
to Section 365(h) of Title 11 of the United States Code (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 occupant of any portion of the Real Property), together with
any extension or renewal of the same, and Rents shall include all income, rents,
issues, profits, revenues and proceeds including, but not limited to, all oil
and gas or other mineral royalties and bonuses from the Property (including 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 occupant of any portion of the Property and all claims as a creditor
in connection with any of the foregoing) and all proceeds from the sale,
cancellation, surrender or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the indebtedness secured hereby;

 

 

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(I) All contracts and agreements now or hereafter entered into covering any part
of the Land or the Improvements (collectively, the “Contracts”) and all revenue,
income and other benefits thereof, including, without limitation, management
agreements, service contracts, maintenance contracts, equipment leases, personal
property leases and any contracts or documents relating to construction on any
part of the Land or the Improvements (including plans, specifications, studies,
drawings, surveys, tests, operating and other reports, bonds and governmental
approvals) or to the management or operation of any part of the Land or the
Improvements;
(J) All present and future monetary deposits given to any public or private
utility with respect to utility services furnished to any part of the Land or
the Improvements;
(K) All present and future funds, accounts, instruments (including, without
limitation, promissory notes), investment property, letter-of-credit rights,
letters of credit, money, supporting obligations, accounts receivable,
documents, causes of action, claims, general intangibles (including, without
limitation, payment intangibles and software, trademarks, trade names, service
marks and symbols now or hereafter used in connection with any part of the Land
or the Improvements, all names by which the Land or the Improvements may be
operated or known, all rights to carry on business under such names, and all
rights, interest and privileges which Borrower has or may have as developer or
declarant under any covenants, restrictions or declarations now or hereafter
relating to the Land or the Improvements) and all notes or chattel paper
(whether tangible or electronic) now or hereafter arising from or by virtue of
any transactions related to the Land or the Improvements and all rebates and
refunds of real estate taxes and assessments (and any other governmental
impositions related to the Property or the operations conducted or to be
conducted on the Property) (collectively, the “General Intangibles”);
(L) All water taps, sewer taps, certificates of occupancy, permits, special
permits, uses, licenses, franchises, certificates, consents, approvals and other
rights and privileges now or hereafter obtained in connection with the Land or
the Improvements and all present and future warranties and guaranties relating
to the Improvements or to any equipment, fixtures, furniture, furnishings,
personal property or components of any of the foregoing now or hereafter located
or installed on the Land or the Improvements;
(M) All building materials, building supplies and building equipment now or
hereafter placed on the Land or in the Improvements and all architectural
renderings, models, drawings, plans, specifications, studies and data now or
hereafter relating to the Land or the Improvements;
(N) All right, title and interest of Borrower in any insurance policies or
binders now or hereafter relating to the Property, including any unearned
premiums thereon;

 

 

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(O) All proceeds, products, substitutions and accessions (including claims and
demands therefor) of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance and condemnation awards; and
(P) All other or greater rights and interests of every nature in the Land or the
Improvements and in the possession or use thereof and income therefrom, whether
now owned or hereafter acquired by Borrower.
FOR THE PURPOSE OF SECURING:
(1) The debt evidenced by that certain Term Loan Note (together with any and all
renewals, modifications, amendments, restatements, consolidations,
substitutions, replacements and extensions thereof, is hereinafter referred to
as the “Note”) of even date with this Mortgage, made by Borrower and payable to
the order of Lender in the original principal amount of THREE MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($3,500,000.00) (the “Loan” or the “Loan
Amount”), together with interest and any fees as therein provided;
(2) The full and prompt payment and performance of all of the provisions,
agreements, covenants and obligations herein contained and contained in that
certain Term Loan Agreement (“Loan Agreement”) dated of even date herewith
executed by and between Borrower, Lender, and Craftmade International, Inc., a
Delaware corporation, and any other agreements, documents or instruments now or
hereafter evidencing, securing or otherwise relating to the indebtedness
evidenced by the Note (the Note, Loan Agreement, this Mortgage, the Assignment
(as hereinafter defined) and such other agreements, documents and instruments,
together with any and all renewals, modifications, amendments, restatements,
consolidations, substitutions, replacements, and extensions and modifications
thereof, are hereinafter collectively referred to as the “Loan Documents”) and
the payment of all other sums therein covenanted to be paid, including, without
limitation, any applicable yield maintenance premiums or prepayment fees;
(3) Any and all future or additional advances (whether or not obligatory) made
by Lender to protect or preserve the Property or the lien or security interest
created hereby on the Property, or for taxes, assessments, operating expenses or
insurance premiums as hereinafter provided or for performance of any of
Borrower’s obligations hereunder or under the other Loan Documents or for any
other purpose provided herein or in the other Loan Documents (whether or not the
original Borrower remains the owner of the Property at the time of such
advances) together with interest thereon at the default rate of interest under
the Note; and
(4) Any and all other indebtedness now owing or which may hereafter be owing by
Borrower to Lender, however and whenever incurred or evidenced, whether express
or implied, direct or indirect, absolute or contingent, or due or to become due,
and all renewals, modifications, amendments, restatements, consolidations,
substitutions, replacements and extensions thereof.
(All of the sums referred to in Subsections (1) through (4) above are herein
sometimes referred to as the “secured indebtedness” or the “indebtedness secured
hereby”).
TO HAVE AND TO HOLD the Property unto Lender, its successors and assigns
forever, and Borrower does hereby bind itself, its successors and assigns, to
WARRANT AND FOREVER DEFEND the title to the Property unto Lender against every
person whomsoever lawfully claiming or to claim the same or any part thereof for
the purposes and uses herein set forth;
PROVIDED, HOWEVER, that if the principal and interest and all other sums due or
to become due under the Note, including, without limitation, any prepayment fees
required pursuant to the terms of the Note, shall have been paid at the time and
in the manner stipulated therein and all other sums payable hereunder and all
other indebtedness secured hereby shall have been paid and all other covenants
contained in the Loan Documents shall have been performed, then, in such case,
this Mortgage shall be satisfied and the estate, right, title and interest of
Lender in the Property shall cease, and upon payment to Lender of all costs and
expenses incurred for the preparation of the release hereinafter referenced and
all recording costs if allowed by law, Lender shall release this Mortgage and
the lien hereof by proper instrument.

 

 

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ARTICLE I
COVENANTS OF BORROWER
For the purpose of further securing the indebtedness secured hereby and for the
protection of the security of this Mortgage, for so long as the indebtedness
secured hereby or any part thereof remains unpaid, Borrower represents,
covenants and agrees as follows:
1.1 Warranties of Borrower. Borrower, for itself and its successors and assigns,
does hereby represent, warrant and covenant to and with Lender, its successors
and assigns, that:
(a) Borrower has good, marketable and indefeasible fee simple title to the
Property, subject only to those matters (the “Permitted Exceptions”) expressly
listed as special exceptions (i.e., not pre-printed or standard exceptions) to
coverage in the title insurance policy insuring the lien of this Mortgage and
approved by Lender (the “Title Insurance Policy”), and has full power and lawful
authority to grant, bargain, sell, convey, assign, transfer, encumber and
mortgage its interest in the Property in the manner and form hereby done or
intended. None of the Permitted Exceptions materially interferes with the
security intended to be provided by this Mortgage, the current primary use of
the Property or the current ability of the Property to generate income
sufficient to service the Loan. Borrower will preserve its interest in and title
to the Property and will forever warrant and defend the same to Lender against
any and all claims whatsoever and will forever warrant and defend the validity
and priority of the lien and security interest created herein against the claims
of all persons and parties whomsoever, subject to the Permitted Exceptions. The
foregoing warranty of title shall survive the foreclosure, exercise of any power
of sale or other enforcement of this Mortgage, and shall inure to the benefit of
and be enforceable by Lender in the event Lender acquires title to the Property
pursuant to any foreclosure, exercise of any power of sale or otherwise;
(b) The Land and the Improvements and the intended use thereof by Borrower
comply with all applicable restrictive covenants, zoning ordinances, subdivision
and building codes, flood disaster laws, applicable health and environmental
laws and regulations and all other ordinances, orders or requirements issued by
any county, state, federal or municipal authorities having or claiming
jurisdiction over the Property. The Land and Improvements constitute a separate
tax parcel for purposes of ad valorem taxation. The Land and Improvements do not
require any rights over, or restrictions against, other property in order to
comply with any of the aforesaid governmental ordinances, orders, requirements
or laws;
(c) All utility services necessary and sufficient for the full use, occupancy,
operation and disposition of the Land and the Improvements for their intended
purposes are available to the Property, including water, storm sewer, sanitary
sewer, gas, electric, cable and telephone facilities, through public
rights-of-way or perpetual private easements reflected in the Title Insurance
Policy;
(d) All streets, roads, highways, bridges and waterways necessary for access to
and full use, occupancy, operation and disposition of the Land and the
Improvements have been completed, have been dedicated to and accepted by the
appropriate municipal authority and are open and available to the Land and the
Improvements without further condition or cost to Borrower;
(e) All curb cuts, driveways and traffic signals shown on the survey delivered
to Lender prior to the execution and delivery of this Mortgage are existing and
have been fully approved by the appropriate governmental authority;

 

 

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(f) There are no judicial, administrative, mediation or arbitration actions,
suits or proceedings pending or threatened against or affecting the Property
which, if adversely determined, would have a material adverse effect on (a) the
Property, (b) the business, prospects, profits, operations or condition
(financial or otherwise) of Borrower, (c) the enforceability, validity,
perfection or priority of the lien of any Loan Document, or (d) the ability of
Borrower to perform any obligations under any Loan Document (collectively, a
“Material Adverse Effect”);
(g) As of the date of this Mortgage (i) the Property is free from delinquent
water charges, sewer rents, taxes and assessments and from unrepaired damage
caused by fire, flood, accident or other casualty, and (ii) no part of the Land
or the Improvements has been taken in condemnation, eminent domain or like
proceeding nor is any such proceeding pending or to Borrower’s knowledge and
belief, threatened or contemplated;
(h) Except as set forth in the Title Insurance Policy insuring the lien of this
Mortgage, no improvements on adjoining properties encroach upon the Property.
The Improvements are structurally sound, in good repair and free of defects in
materials and workmanship and have been constructed and installed in substantial
compliance with the plans and specifications relating thereto. All major
building systems located within the Improvements, including, without limitation,
the heating and air conditioning systems and the electrical and plumbing
systems, are in good working order and condition;
(i) There are no security agreements or financing statements affecting any of
the Property other than the security agreements and financing statements created
in favor of Lender and security agreements and financing statements in respect
of the Parent Credit Agreement (as defined in the Loan Agreement);
(j) There are no leases covering any portion of the Property;
(k) The Property is free and clear of any mechanics’ or materialmen’s liens or
liens in the nature thereof, and no rights are outstanding that under law would
give rise to any such liens, any of which liens are or may be prior to, or equal
with, the lien of this Mortgage, except those which are insured against by the
Title Insurance Policy;
(l) No Contract or easement, right-of-way, permit or declaration (collectively,
“Property Agreements”) provides any party with the right to obtain a lien or
encumbrance upon the Property superior to the lien of this Mortgage;
(m) Borrower has delivered to Lender true, correct and complete copies of all
Property Agreements and no default exists or would exist, with the passing of
time, or the giving of notice, or both, under any Property Agreement which
would, in the aggregate, have a Material Adverse Effect;
(n) To the best knowledge of Borrower, no offset or any right of offset exists
respecting continued contributions to be made by any party to any Property
Agreement except as expressly set forth herein. Except as previously disclosed
to Lender in writing, no material exclusions or restrictions on the utilization,
leasing or improvement of the Property (including non-compete agreements) exist
in any Property Agreement;
(o) All work, if any, to be performed by Borrower under each of the Property
Agreements has been substantially performed, all contributions to be made by
Borrower to any party to such Property Agreements have been made, and all other
conditions to such party’s obligations thereunder have been satisfied;
(p) The Property is taxed separately without regard to any other real estate and
constitutes a legally subdivided lot under all applicable legal requirements
(or, if not subdivided, no subdivision or platting of the Property is required
under applicable legal requirements), and for all purposes may be mortgaged,
conveyed, pledged, hypothecated, assigned or otherwise dealt with as an
independent parcel;
(q) The Property forms no part of any property owned, used or claimed by
Borrower as a residence or business homestead and is not exempt from forced sale
under the laws of the State in which the Property is located. Borrower hereby
disclaims and renounces each and every claim to all or any portion of the
Property as a homestead. The Loan evidenced by the Loan Documents is made and
transacted solely for business, investment, commercial or other similar
purposes;

 

 

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(r) There are no outstanding options or rights of first offer or refusal to
purchase all or any portion of the Property or Borrower’s interest therein or
ownership thereof;
(s) There are no actions, suits, proceedings or orders of record or of which
Borrower has notice, and, to the best of Borrower’s knowledge, there are no
inquiries or investigations, pending or threatened, in any such case against,
involving or affecting the Property, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, alleging the violation
of any federal, state or local law, statute, ordinance, rule or regulation
relating to Environmental Laws. Furthermore, Borrower has not received any
written claim, notice or opinion that the ownership or operation of the Property
violates any federal, state or local law, statute, ordinance, rule, regulation,
decree, order, and/or permit relating to Environmental Laws, and, to the best of
Borrower’s knowledge, no valid basis for any proceeding, action or claim of such
nature exists;
(t) To the best of Borrower’s knowledge and belief, each tenant is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment
for the benefit of creditors;
(u) Except as previously disclosed in writing to Lender, there are no brokerage
fees or commissions payable by Borrower with respect to the leasing of the space
at the Property, and there are no management fees payable by Borrower with
respect to the management of the Property; and
(v) The representations and warranties contained in this Mortgage, or the review
and inquiry made on behalf of Borrower therefor, have all been made by persons
having the requisite expertise and knowledge to provide such representations and
warranties. No statement or fact made by or on behalf of Borrower in this
Mortgage or in any certificate, document or schedule furnished to Lender
pursuant hereto, contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained therein or herein
not misleading (which may be to Borrower’s best knowledge where so provided
herein). There is no fact presently known to Borrower which has not been
disclosed to Lender which would have a Material Adverse Effect.
1.2 Defense of Title. If, while this Mortgage is in force, the title to the
Property or the interest of Lender therein shall be the subject, directly or
indirectly, of any action at law or in equity, or be attached directly or
indirectly, or endangered, clouded or adversely affected in any manner,
Borrower, at Borrower’s expense, shall take all necessary and proper steps for
the defense of said title or interest, including the employment of counsel
reasonably approved by Lender, the prosecution or defense of litigation, and the
compromise or discharge of claims made against said title or interest.
1.3 Performance of Obligations. Borrower shall pay when due the principal of and
the interest on the indebtedness secured hereby including all charges, fees and
other sums required to be paid by Borrower as provided in the Loan Documents. In
the event that Lender determines that Borrower is not adequately performing any
of its obligations under this Mortgage, Lender may, without limiting or waiving
any other rights or remedies of Lender hereunder, take such steps with respect
thereto as Lender shall deem necessary or proper and any and all costs and
expenses reasonably incurred by Lender in connection therewith, together with
interest thereon at the default rate under the Note from the date incurred by
Lender until actually paid by Borrower, shall be immediately paid by Borrower on
demand and shall be secured by this Mortgage and by all of the other Loan
Documents securing all or any part of the indebtedness evidenced by the Note.

 

 

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1.4 Insurance. Borrower shall, at Borrower’s expense, maintain in force and
effect on the Property at all times while this Mortgage continues in effect the
following insurance:
(a) “All-risk” coverage insurance against loss or damage to the Property from
all-risk perils, with any and all exclusions subject to Lender approval and
otherwise satisfactory to Lender. The amount of such insurance shall be not less
than one hundred percent (100%) of the full replacement cost of the
Improvements, without reduction for depreciation. The determination of the
replacement cost amount shall be adjusted annually to comply with the
requirements of the insurer issuing such coverage or, at Lender’s election, by
reference to such indexes, appraisals or information as Lender determines in its
reasonable discretion. Full replacement cost, as used herein, means, with
respect to the Improvements, the cost of replacing the Improvements without
regard to deduction for depreciation, exclusive of the cost of excavations,
foundations and footings below the lowest basement floor. Each policy or
policies shall contain a replacement cost endorsement and either an agreed
amount endorsement (to avoid the operation of any co-insurance provisions) or a
waiver of any co-insurance provisions, all subject to Lender’s approval.
(b) Commercial general liability insurance for personal injury, bodily injury,
death and property damage liability in such amounts as shall be acceptable to
Lender (the “Insurance Criteria”) or such lesser amount as Lender in Lender’s
sole discretion may accept, for bodily injury, personal injury and property
damage. Lender hereby retains the right to periodically review the amount of
said liability insurance being maintained by Borrower and to require an increase
in the amount of said liability insurance should Lender deem an increase to be
reasonably prudent under then existing circumstances.
(c) Insurance covering the major components of the central heating, air
conditioning and ventilating systems, boilers, other pressure vessels, high
pressure piping and machinery, elevators and escalators, if any, and other
similar equipment installed in the Improvements, in amounts as shall be
reasonably required by Lender which policies shall insure against physical
damage to and loss of occupancy and use of the Improvements arising out of an
accident or breakdown covered thereunder.
(d) If the Improvements or any part thereof is identified by the Secretary of
Housing and Urban Development as being situated in an area now or subsequently
designated as having special flood hazards (including, without limitation, those
areas designated as Zone A or Zone V), flood insurance in an amount equal to one
hundred percent (100%) of the replacement cost of the Improvements or the
maximum amount of flood insurance available, whichever is the lesser.
(e) In the event the Property is located in an area with a high degree of
seismic activity, earthquake insurance in amounts and in form and substance
satisfactory to Lender.
(f) During the period of any construction on the Land or renovation or
alteration of the Improvements, a so-called “Builder’s All-Risk Completed Value”
or “Course of Construction” insurance policy in non-reporting form for any
Improvements under construction, renovation or alteration in an amount approved
by Lender and Worker’s Compensation Insurance covering all persons engaged in
such construction, renovation or alteration.
(g) [intentionally omitted].
(h) Law and ordinance coverage in an amount satisfactory to Lender if the
Property, or any part thereof, shall constitute a nonconforming use or structure
under applicable zoning ordinances, sub-division and building codes or other
laws, ordinances, orders and requirements.
(i) Such other insurance on the Property or on any replacements or substitutions
thereof or additions thereto as may from time to time be required by Lender
against other insurable hazards or casualties, including, without limitation,
excess flood coverage, which at the time are commonly insured against in the
case of property similarly situated, due regard being given to the height and
type of buildings, their construction, location, use and occupancy.

 

 

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The all-risk commercial property, general liability, and rental income insurance
policies required under Sections 1.4(a), 1.4(b), and 1.4(f) above shall cover
perils of terrorism and acts of terrorism and Borrower shall maintain such
insurance for loss resulting from perils and acts of terrorism on terms
(including amounts) consistent with those required hereunder at all times during
the term of the Loan, provided, however, Borrower’s insurance coverage may
exclude perils and acts of terrorism if Borrower also obtains, at Borrower’s
sole cost and expense, a Terrorism Policy (hereinafter defined). The term
“Terrorism Policy”, as used herein, shall mean a separate stand-alone terrorism
insurance policy obtained by Borrower which corresponds to Borrower’s primary
insurance exclusion relating to acts or perils of terrorism such that there are
no gaps in coverage and being otherwise acceptable to Lender and consistent as
to coverage amounts, ratings and conditions with the requirements of this
Section 1.4 as it relates to other sorts of insurance coverage. Borrower shall
not decline or otherwise terminate any terrorism coverage offered under
Borrower’s all-risk policy or liability policy unless a Terrorism Policy is
already in place.
All such insurance shall (i) be issued by companies approved by Lender and
authorized to do business in the state where the Property is located, with a
claims paying ability rating equal to or better than that specified on the
Insurance Criteria, (ii) contain the complete address of the Land (or a complete
legal description), (iii) be for a term of at least one (1) year, (iv) contain
deductibles no greater than that specified in the Insurance Criteria, and (v) be
subject to the approval of Lender as to insurance companies, amounts, content,
forms of policies, any exclusions, method by which premiums are paid and
expiration dates.
Borrower shall as of the date hereof deliver to Lender evidence that said
insurance policies have been paid current as of the date hereof and certified
copies of such insurance policies and original certificates of insurance in a
form acceptable to Lender and signed by an authorized agent. Borrower shall
renew all such insurance and deliver to Lender certificates evidencing such
renewals at least fifteen (15) days before any such insurance shall expire.
Without limiting the required endorsements to insurance policies, Borrower
further agrees that all such policies shall provide that proceeds thereunder
shall be payable to Lender, its successors and assigns, pursuant and subject to
a mortgagee clause (without contribution) of standard form attached to, or
otherwise made a part of, the applicable policy and that Lender, its successors
and assigns, shall be named as an additional insured under all liability
insurance policies. Borrower further agrees that all such insurance policies:
(i) shall provide for at least thirty (30) days’ prior written notice to Lender
prior to any cancellation or termination thereof and prior to any modification
thereof which affects the interest of Lender; (ii) shall contain an endorsement
or agreement by the insurer that any loss shall be payable to Lender in
accordance with the terms of such policy notwithstanding any act or negligence
of Borrower which might otherwise result in forfeiture of such insurance; and
(iii) shall name Lender as an additional insured and waive all rights of
subrogation against Lender. The delivery to Lender of the insurance policies or
the certificates of insurance as provided above shall constitute an assignment
of all proceeds payable under such insurance policies by Borrower to Lender as
further security for the indebtedness secured hereby. In the event of
foreclosure of this Mortgage, or other transfer of title to the Property in
extinguishment in whole or in part of the secured indebtedness, all right, title
and interest of Borrower in and to all proceeds payable under such policies then
in force concerning the Property shall thereupon vest in the purchaser at such
foreclosure, or in Lender or other transferee in the event of such other
transfer of title. Approval of any insurance by Lender shall not be a
representation of the solvency of any insurer or the sufficiency of any amount
of insurance. In the event Borrower fails to provide, maintain, keep in force or
deliver and furnish to Lender the policies of insurance required by this
Mortgage or evidence of their renewal as required herein, Lender may, but shall
not be obligated to, procure such insurance and Borrower shall pay all amounts
advanced by Lender, together with interest thereon at the default rate of
interest under the Note from and after the date advanced by Lender until
actually repaid by Borrower, promptly upon demand by Lender. Any amounts so
advanced by Lender, together with interest thereon, shall be secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note. Lender shall not be responsible for nor
incur any liability for the insolvency of the insurer or other failure of the
insurer to perform, even though Lender has caused the insurance to be placed
with the insurer after failure of Borrower to furnish such insurance.

 

 

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Any failure by Lender to insist on full compliance with all of the above
insurance requirements at closing does not constitute a waiver of Lender’s right
to subsequently require full compliance with these requirements.
1.5 Payment of Taxes. Borrower shall pay or cause to be paid, except to the
extent provision is actually made therefor pursuant to Section 1.6 of this
Mortgage, all taxes and assessments which are or may become a lien on the
Property or which are assessed against or imposed upon the Property. Upon
request of Lender, Borrower shall furnish Lender with receipts (or if receipts
are not immediately available, with copies of canceled checks evidencing payment
with receipts to follow promptly after they become available) showing payment of
such taxes and assessments at least fifteen (15) days prior to the applicable
delinquency date therefor. Notwithstanding the foregoing, Borrower may in good
faith, by appropriate proceedings and upon notice to Lender, contest the
validity, applicability or amount of any asserted tax or assessment so long as
(a) such contest is diligently pursued, (b) Lender determines, in its subjective
opinion, that such contest suspends the obligation to pay the tax or assessment
and that nonpayment of such tax or assessment will not result in the sale, loss,
forfeiture or diminution of the Property or any part thereof or any interest of
Lender therein, and (c) prior to the earlier of the commencement of such contest
or the delinquency date of the asserted tax or assessment, Borrower deposits in
the Impound Account (as hereinafter defined) an amount determined by Lender to
be adequate to cover the payment of such tax or assessment and a reasonable
additional sum to cover possible interest, costs and penalties; provided,
however, that Borrower shall promptly cause to be paid any amount adjudged by a
court of competent jurisdiction to be due, with all interest, costs and
penalties thereon, promptly after such judgment becomes final; and provided
further that in any event each such contest shall be concluded and the taxes,
assessments, interest, costs and penalties shall be paid prior to the date any
writ or order is issued under which the Property may be sold, lost or forfeited.
1.6 Tax and Insurance Impound Account. Following a request by Lender, Borrower
shall establish and maintain at all times while this Mortgage continues in
effect an impound account (the “Impound Account”) with Lender for payment of
real estate taxes and assessments and insurance on the Property and as
additional security for the indebtedness secured hereby. Borrower shall deposit
in the Impound Account an amount determined by Lender to be sufficient (when
added to the monthly deposits described herein) to pay the next due annual
installment of real estate taxes and assessments on the Property at least one
(1) month prior to the delinquency date thereof (if paid in one installment) and
the next due annual insurance premiums with respect to the Property at least one
(1) month prior to the due date thereof (if paid in one installment). Commencing
on the first monthly Payment Date (as defined in the Note) and continuing
thereafter on each monthly Payment Date, Borrower shall pay to Lender,
concurrently with the monthly payment due under the Note, deposits in an amount
equal to one-twelfth (1/12) of the amount of the annual real estate taxes and
assessments that will next become due and payable on the Property, plus
one-twelfth (1/12) of the amount of the annual premiums that will next become
due and payable on insurance policies which Borrower is required to maintain
hereunder, each as estimated and determined by Lender. So long as no Event of
Default (hereinafter defined) has occurred and is continuing and no circumstance
exists, which with the giving of notice, or passage of time, or both, would
constitute an Event of Default, all sums in the Impound Account shall be held by
Lender in the Impound Account to pay said taxes, assessments and insurance
premiums in one installment before the same become delinquent. Borrower shall be
responsible for ensuring the receipt by Lender, at least thirty (30) days prior
to the respective due date for payment thereof, of all bills, invoices and
statements for all taxes, assessments and insurance premiums to be paid from the
Impound Account, and so long as no Event of Default has occurred and is
continuing and no circumstance exists, which with the giving of notice, or
passage of time, or both, would constitute an Event of Default, Lender shall pay
the governmental authority or other party entitled thereto directly to the
extent funds are available for such purpose in the Impound Account. In making
any payment from the Impound Account, Lender shall be entitled to rely on any
bill, statement or estimate procured from the appropriate public office or
insurance company or agent without any inquiry into the accuracy of such bill,
statement or estimate and without any inquiry into the accuracy, validity,
enforceability or contestability of any tax, assessment, valuation, sale,
forfeiture, tax lien or title or claim thereof. No interest on funds contained
in the Impound Account shall be paid by Lender to Borrower and any interest or
other earnings on funds deposited in the Impound Account shall be solely for the
account of Lender. If the total funds in the Impound Account shall exceed the
amount of payments actually applied by Lender for the purposes of the Impound
Account, such excess may be credited by Lender on subsequent payments to be made
hereunder or, at the option of Lender, refunded to Borrower. If, however, the
Impound Account shall not contain sufficient funds to pay the sums required when
the same shall become due and payable, Borrower shall, within ten (10) days
after receipt of written notice thereof, deposit with Lender the full amount of
any such deficiency.

 

 

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1.7 [intentionally omitted]
1.8 Security Interest in Reserves.
(a) As additional security for the payment and performance by Borrower of all
duties, responsibilities and obligations under the Note and the other Loan
Documents, Borrower hereby unconditionally and irrevocably assigns, conveys,
pledges, mortgages, transfers, delivers, deposits, sets over and confirms unto
Lender, and hereby grants to Lender a security interest in the Impound Account,
and any other reserve, if any, set forth on any of the other Loan Documents and
made a part hereof (collectively, the “Reserves”). Borrower hereby authorizes
and consents to the account into which the Reserves have been deposited being
held in Lender’s name or the name of any entity servicing the Note for Lender
and hereby acknowledges and agrees that Lender, or at Lender’s election, such
servicing agent, shall have exclusive control over said account. Notice of the
assignment and security interest granted to Lender herein may be delivered by
Lender at any time to the financial institution wherein the Reserves have been
established, and Lender, or such servicing entity, shall have possession of all
passbooks or other evidences of such accounts. Borrower hereby indemnifies and
holds Lender harmless with respect to all risk of loss regarding amounts on
deposit in the Reserves, except to the extent that any such loss is caused by
the gross negligence or intentional misconduct of Lender. Borrower hereby
knowingly, voluntarily and intentionally stipulates, acknowledges and agrees
that the advancement of the funds from the Reserves as set forth herein is at
Borrower’s direction and is not the exercise by Lender of any right of set-off
or other remedy upon an Event of Default. If an Event of Default shall occur,
then Lender may, without notice or demand on Borrower, at its option:
(A) withdraw any or all of the funds (including, without limitation, interest)
then remaining in the Reserves and apply the same, after deducting all costs and
expenses of safekeeping, collection and delivery (including, but not limited to,
attorneys’ fees, costs and expenses) to the indebtedness evidenced by the Note
or any other obligations of Borrower under the other Loan Documents in such
manner as Lender shall deem appropriate in its sole discretion, and the excess,
if any, shall be paid to Borrower, (B) exercise any and all rights and remedies
of a secured party under any applicable Uniform Commercial Code, or (C) exercise
any other remedies available at law or in equity. No such use or application of
the funds contained in the Reserves shall be deemed to cure any Event of
Default.
(b) The Reserves are solely for the protection of Lender and entail no
responsibility on Lender’s part beyond the payment of the respective costs and
expenses in accordance with the terms thereof and beyond the allowing of due
credit for the sums actually received. Upon assignment of this Mortgage by
Lender, any funds in the Reserves shall be turned over to the assignee and any
responsibility of Lender, as assignor, with respect thereto shall terminate.
Upon full payment of the indebtedness secured hereby in accordance with its
terms (or if earlier, the completion of the applicable conditions to release of
each Reserve to Lender’s satisfaction) or at such earlier time as Lender may
elect, the balance in the Reserves then in Lender’s possession shall be paid
over to Borrower and no other party shall have any right or claim thereto.
(c) Any amounts received by Lender from Borrower may be invested by Lender (or
its servicer) for its benefit, and Lender shall not be obligated to pay, or
credit, any interest earned thereon to Borrower except as may be otherwise
specifically provided in this Mortgage.
1.9 Casualty and Condemnation. Borrower shall give Lender prompt written notice
of the occurrence of any casualty affecting, or the institution of any
proceedings for eminent domain or for the condemnation of, the Property or any
portion thereof (collectively, an “Insured Event”). All insurance proceeds on
the Property, and all causes of action, claims, compensation, awards and
recoveries for any damage, condemnation or taking of all or any part of the
Property or for any damage or injury to it for any loss or diminution in value
of the Property, are hereby assigned to and shall be paid to Lender. Lender may
participate in any suits or proceedings relating to any such proceeds, causes of
action, claims, compensation, awards or recoveries, and Lender is hereby
authorized, in its own name or in Borrower’s name, to adjust any loss covered by
insurance or any condemnation claim or cause of action, and to settle or
compromise any claim or cause of action in connection therewith, and Borrower
shall from time to time deliver to Lender any instruments required to permit
such participation. The proceeds of any and all insurance upon the Property
shall be collected by Lender and Lender shall have the option, in Lender’s sole
discretion, to apply any proceeds so collected either to the restoration of the
Property or to the liquidation of the secured indebtedness.

 

 

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1.10 Mechanics’ Liens. Borrower shall pay when due all claims and demands of
contractors, subcontractors, mechanics, materialmen, laborers and others for any
work performed or materials delivered for the Land or the Improvements.
Notwithstanding the foregoing or Section 1.13 of this Mortgage, Borrower shall
not be in default under this Mortgage for failure to pay or discharge any
mechanic’s or materialman’s lien asserted against the Property if, and so long
as: (i) Borrower shall have notified Lender of same within five (5) days of
obtaining knowledge thereof; (ii) Borrower shall diligently and in good faith
contest the same by appropriate legal proceedings which shall operate to prevent
the enforcement or collection of the same and the sale of the Property or any
part thereof, to satisfy the same; (iii) Borrower shall have furnished to Lender
a cash deposit, or an indemnity bond satisfactory to Lender with a surety
satisfactory to Lender, in the amount of the mechanic’s or materialman’s lien
claim, plus a reasonable additional sum to pay all costs, interest and penalties
that may be imposed or incurred in connection therewith, to assure payment or
performance of the matters under contest and to prevent any sale or forfeiture
of the Property or any part thereof; (iv) Borrower shall promptly upon final
determination thereof pay the amount of any such claim so determined, together
with all costs, interest and penalties which may be payable in connection
therewith; (v) the failure to or pay the mechanic’s or materialman’s lien claim
does not constitute a default under any other deed of trust, mortgage, or
security interest covering or affecting any part of the Property; and (vi)
notwithstanding the foregoing, Borrower shall immediately upon request of Lender
pay (and if Borrower shall fail so to do, Lender may, but shall not be required
to, pay or cause to be discharged or bonded against) any such claim,
notwithstanding such contest, if in the reasonable opinion of Lender the
Property shall be in jeopardy or in danger of being forfeited or foreclosed. The
cash deposit or bond may be utilized to obtain title insurance insuring around
the claim. Lender may pay over any such cash deposit or part thereof to the
claimant entitled thereto when a final judgment is entered against the Borrower
or the Property or claimant commences foreclosure proceedings with respect to
the Property, or Lender determines, with advice of legal counsel, that the
entitlement of such claimant is established, or demand or a draw is made by the
title company or the title company otherwise requires delivery or deposit
elsewhere of all or any portion of the cash deposit if title insurance is
obtained.
1.11 Assignment of Rents. Borrower acknowledges and confirms that, as additional
collateral security for the payment of the indebtedness secured hereby, and
cumulative of any and all rights and remedies herein provided, it has executed
and delivered to Lender an Assignment of Rents of even date herewith (the
“Assignment”), intending such Assignment to create a present, absolute
assignment to Lender of all current or future leases of all or any portion of
the Property and Rents. Upon the occurrence of an Event of Default, Lender shall
be entitled to exercise any or all of the remedies provided in this Mortgage and
in the Assignment, including, without limitation, the appointment of a receiver.
The Assignment shall continue in full force and effect during any period of
foreclosure or redemption with respect to the Property.
1.12 Leases. Borrower covenants and agrees that it shall not, without prior
written consent of Lender, enter into any lease affecting any portion of the
Property.
1.13 Alienation and Further Encumbrances. Except as specifically allowed
hereinbelow in this Section and notwithstanding anything to the contrary
contained in Section 4.5 hereof, in the event that the Property or any part
thereof or interest therein shall be sold (including any installment sales
agreement), conveyed, disposed of, alienated, hypothecated, leased (except to
tenants of space in the Improvements in accordance with the provisions of
Section 1.12 hereof), assigned, pledged, mortgaged, further encumbered (subject
to Borrower’s rights set forth in Section 1.5 and Section 1.10 of this Mortgage
and except for immaterial encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of the Property, none of which, in
Lender’s reasonable discretion, impair Borrower’s use of the Property in the
operation of its business, the value of the Property, and/or Lender’s security
for the Loan) or otherwise transferred or Borrower shall be divested of its
title to the Property or any interest therein, in any manner or way, whether
voluntarily or involuntarily, without the prior written consent of Lender being
first obtained, which consent may be withheld in Lender’s sole discretion, then
the same shall constitute an Event of Default and Lender shall have the right,
at its option, to declare any or all of the indebtedness secured hereby,
irrespective of the Maturity Date, immediately due and payable and to otherwise
exercise any of its other rights and remedies contained in Article III hereof,
provided, however, that any lien (each, a “Payment Lien”) securing a payment
obligation not in excess of $50,000 shall not constitute an Event of Default if
such Payment Lien is removed, bonded around, or otherwise cured to the
reasonable satisfaction of Lender within thirty (30) days after notice thereof
from Lender, provided, further, that if at any time Lender determines, in its
reasonable discretion, that a foreclosure of such Payment Lien or other
forfeiture of the Property as a result of such Payment Lien is likely to occur
during such thirty (30) day period, then such Payment Lien shall constitute an
immediate Event of Default. If such acceleration is during any period when a
prepayment fee is payable pursuant to the provisions set forth in the Note,
then, in addition to all of the foregoing, such prepayment fee shall also then
be immediately due and payable to the same end as though Borrower were prepaying
the entire indebtedness secured hereby on the date of such acceleration.

 

 

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1.14 Payment of Utilities, Assessments, Charges, Etc. Borrower shall pay when
due all utility charges which are incurred by Borrower or which may become a
charge or lien against any portion of the Property for gas, electricity, water
and sewer services furnished to the Land and/or the Improvements and all other
assessments or charges of a similar nature, or assessments payable pursuant to
any restrictive covenants, whether public or private, affecting the Land and/or
the Improvements or any portion thereof, whether or not such assessments or
charges are or may become liens thereon.
1.15 Access Privileges and Inspections. Lender and the agents, representatives
and employees of Lender shall, subject to the rights of tenants, have full and
free access to the Land and the Improvements and any other location where books
and records concerning the Property are kept at all reasonable times for the
purposes of inspecting the Property and of examining, copying and making
extracts from the books and records of Borrower relating to the Property.
Borrower shall lend assistance to all such agents, representatives and employees
of Lender.
1.16 Waste; Alteration of the Property. Borrower shall not commit, suffer or
permit any waste on the Property (including waste in the manner described in
Section 5.2 hereof) nor take any actions that might invalidate any insurance
carried on the Property. Borrower shall maintain the Property in good condition
and repair. No part of the Improvements may be removed, demolished or materially
altered, without the prior written consent of Lender. Without the prior written
consent of Lender, Borrower shall not commence construction of any improvements
on the Land other than improvements required for the maintenance or repair of
the Property.
1.17 Zoning/Use. Without the prior written consent of Lender, Borrower shall not
seek, make, suffer, consent to or acquiesce in any change in the zoning or
conditions of use of the Land or the Improvements. Borrower shall comply with
and make all payments required under the provisions of any covenants, conditions
or restrictions affecting the Land or the Improvements. Borrower shall comply
with all existing and future requirements of all governmental authorities having
jurisdiction over the Property. Borrower shall keep all licenses, permits,
franchises, certificates of occupancy, consents, and other approvals necessary
for the operation of the Property in full force and effect. Borrower shall
operate the Property as manufacturing facility for so long as the indebtedness
secured hereby is outstanding. If, under applicable zoning provisions, the use
of all or any part of the Land or the Improvements is or becomes a nonconforming
use, Borrower shall not cause or permit such use to be discontinued or abandoned
without the prior written consent of Lender. Further, without Lender’s prior
written consent, Borrower shall not file or subject any part of the Land or the
Improvements to any declaration of condominium or cooperative or convert any
part of the Land or the Improvements to a condominium, cooperative or other form
of multiple ownership and governance.
1.18 [intentionally omitted]
1.19 Further Documentation. Borrower shall, on the request of Lender in Lender’s
reasonable discretion and at the expense of Borrower, promptly correct any
defect, error or omission which may be discovered in the contents of this
Mortgage or in any of the other Loan Documents and promptly execute,
acknowledge, deliver and record or file such further instruments and do such
further acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Mortgage and the other Loan Documents or as may
be reasonably deemed advisable by Lender to protect, continue or preserve the
liens and security interests hereunder, including, without limitation, security
instruments, financing statements and continuation statements.

 

 

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1.20 Payment of Costs; Advances to Protect Property.
(a) Payment of Costs. Borrower shall pay all reasonable costs and expenses of
every character incurred in connection with the closing of the Loan or otherwise
attributable or chargeable to Borrower as the owner of the Property, including,
without limitation, appraisal fees, recording fees, documentary, stamp, mortgage
or intangible taxes, brokerage fees and commissions, title policy premiums and
title search fees, uniform commercial code/tax lien/litigation search fees,
escrow fees and reasonable attorneys’ fees.
(b) Advances to Protect Property. Without limiting or waiving any other rights
and remedies of Lender hereunder, if Lender determines that Borrower is not
adequately performing or has failed to perform any of its obligations, covenants
or agreements contained in this Mortgage or in any of the other Loan Documents
and such inadequacy or failure is not cured within any applicable grace or cure
period, or if any action or proceeding of any kind (including, but not limited
to, any bankruptcy, insolvency, arrangement, reorganization or other debtor
relief proceeding) is commenced which might affect Lender’s interest in the
Property or Lender’s right to enforce its security, then Lender may, at its
option, with or without notice to Borrower, make any appearances, disburse or
advance any sums and take any actions as may be necessary or desirable to
protect or enforce the security of this Mortgage or to remedy the failure of
Borrower to perform its covenants and agreements (without, however, waiving any
Event of Default). Borrower agrees to pay on demand all expenses of Lender
reasonably incurred with respect to the foregoing (including, but not limited
to, fees and disbursements of counsel), together with interest thereon at the
default rate of interest under the Note from and after the date on which Lender
incurs such expenses until reimbursement thereof by Borrower. Any such expenses
so incurred by Lender, together with interest thereon as provided above, shall
be additional indebtedness of Borrower secured by this Mortgage and by all of
the other Loan Documents securing all or any part of the indebtedness evidenced
by the Note. The necessity for any such actions and of the amounts to be paid
shall be determined by Lender in its sole and absolute discretion. Lender is
hereby empowered to enter and to authorize others to enter upon the Property or
any part thereof for the purpose of performing or observing any such defaulted
term, covenant or condition without thereby becoming liable to Borrower or any
person in possession holding under Borrower. Borrower hereby acknowledges and
agrees that the remedies set forth in this Section 1.20(b) shall be exercisable
by Lender, and any and all payments made or costs or expenses incurred by Lender
in connection therewith shall be secured hereby and shall be, without demand,
immediately repaid by Borrower with interest thereon at the default rate under
the Note, notwithstanding the fact that such remedies were exercised and such
payments made and costs incurred by Lender after the filing by Borrower of a
voluntary case or the filing against Borrower of an involuntary case pursuant to
or within the meaning of Title 11, United States Code (the “Bankruptcy Code”),
or after any similar action pursuant to any other debtor relief law (whether
statutory, common law, case law or otherwise) of any jurisdiction whatsoever,
now or hereafter in effect, which may be or become applicable to Borrower,
Lender, any guarantor or indemnitor, the secured indebtedness or any of the Loan
Documents. This indemnity shall survive payment in full of the indebtedness
secured hereby. This Section 1.20(b) shall not be construed to require Lender to
incur any expenses, make any appearances or take any actions.

 

 

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1.21 Security Interest. This Mortgage is also intended to encumber and create a
security interest in, and Borrower hereby grants to Lender a security interest
in all Reserves (as hereinabove defined), fixtures, chattels, accounts,
equipment, inventory, contract rights, general intangibles and other personal
property, in each case, included within the Property, all renewals, replacements
of any of the aforementioned items, or articles in substitution therefor or in
addition thereto or the proceeds thereof (said property is hereinafter referred
to collectively as the “Collateral”), whether or not the same shall be attached
to the Land or the Improvements in any manner. It is hereby agreed that to the
extent permitted by law, all of the foregoing property is to be deemed and held
to be a part of and affixed to the Land and the Improvements. The foregoing
security interest shall also cover Borrower’s leasehold interest in any of the
foregoing property which is leased by Borrower. Notwithstanding the foregoing,
all of the foregoing property shall be owned by Borrower and no leasing or
installment sales or other financing or title retention agreement in connection
therewith shall be permitted without the prior written approval of Lender.
Borrower shall promptly replace all of the Collateral subject to the lien or
security interest of this Mortgage when worn out or obsolete with Collateral
comparable to the worn out or obsolete Collateral when new and will not, without
the prior written consent of Lender, remove from the Land or the Improvements
any of the Collateral subject to the lien or security interest of this Mortgage
except such as is replaced by an article of equal suitability and value as above
provided, owned by Borrower free and clear of any lien or security interest
except that created by this Mortgage and the other Loan Documents and except as
otherwise expressly permitted by the terms of Section 1.13 of this Mortgage. All
of the Collateral shall be kept at the location of the Land except as otherwise
required by the terms of the Loan Documents. Borrower shall not use any of the
Collateral in violation of any applicable statute, ordinance or insurance
policy.
1.22 Security Agreement. This Mortgage constitutes both a real property mortgage
and a “security agreement” between Borrower and Lender with respect to the
Collateral in which Lender is granted a security interest hereunder, and,
cumulative of all other rights and remedies of Lender hereunder, Lender shall
have all of the rights and remedies of a secured party under any applicable
Uniform Commercial Code. Borrower hereby irrevocably authorizes Lender at any
time and from time to time to prepare, file of record in any Uniform Commercial
Code jurisdiction or otherwise effectuate new financing statements or financing
statement amendments which provide any information required by part 5 of
Article 9 of any applicable Uniform Commercial Code, for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i)
whether Borrower is an organization, the type of organization and any
organizational identification number issued to Borrower and, (ii) in the case of
a financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Borrower agrees to furnish any such
information to Lender promptly upon the Lender’s request. Borrower specifically
agrees that Lender may cause such financing statements and financing statement
amendments to be filed without any signature of a representative of the Borrower
appearing thereon, where such filings are permitted by applicable law. Borrower
hereby further agrees to execute and deliver on demand and hereby irrevocably
constitutes and appoints Lender the attorney-in-fact of Borrower to execute and
deliver and, if appropriate, to file with the appropriate filing officer or
office such security agreements, financing statements, continuation statements
or other instruments as Lender may request or require in order to impose,
perfect or continue the perfection of the lien or security interest created
hereby. Borrower also ratifies its authorization for Lender to have filed in any
Uniform Commercial Code jurisdiction any like initial financing statements or
amendments thereto if filed prior to the date hereof. Expenses of retaking,
holding, preparing for sale, selling or the like (including, without limitation,
Lender’s reasonable attorneys’ fees and legal expenses), together with interest
thereon at the default rate of interest under the Note from the date incurred by
Lender until actually paid by Borrower, shall be paid by Borrower on demand and
shall be secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the Note. If notice is
required by law, Lender shall give Borrower at least ten (10) days’ prior
written notice of the time and place of any public sale of such property or of
the time of or after which any private sale or any other intended disposition
thereof is to be made, and if such notice is sent to Borrower, as the same is
provided for the mailing of notices herein, it is hereby deemed that such notice
shall be and is reasonable notice to Borrower. No such notice is necessary for
any such property which is perishable, threatens to decline speedily in value or
is of a type customarily sold on a recognized market. Any sale made pursuant to
the provisions of this Section 1.22 shall be deemed to have been a public sale
conducted in a commercially reasonable manner if held contemporaneously with the
foreclosure sale as provided in Section 3.1(e) hereof upon giving the same
notice with respect to the sale of the Property hereunder as is required under
said Section 3.1(e). Furthermore, to the extent permitted by law, in conjunction
with, in addition to or in substitution for the rights and remedies available to
Lender pursuant to any applicable Uniform Commercial Code:
(a) In the event of a foreclosure sale, the Property may, at the option of
Lender, be sold as a whole; and
(b) It shall not be necessary that Lender take possession of the aforementioned
Collateral, or any part thereof, prior to the time that any sale pursuant to the
provisions of this Section is conducted and it shall not be necessary that said
Collateral, or any part thereof, be present at the location of such sale; and

 

 

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(c) Lender may appoint or delegate any one or more persons as agent to perform
any act or acts necessary or incident to any sale held by Lender, including the
sending of notices and the conduct of the sale, but in the name and on behalf of
Lender.
Borrower will not change the principal place of business or chief executive
office, or change the state of its organization or registration, or change its
name, without in each instance the prior written consent of Lender, which
consent shall not be unreasonably withheld, delayed or conditioned. Lender’s
consent will, however, be conditioned upon, among other things, the execution
and delivery of additional financing statements, security agreements and other
instruments which may be necessary to effectively evidence or perfect Lender’s
security interest in the Collateral as a result of such changes.
1.23 Easements and Rights-of-Way. Borrower shall not grant any easement or
right-of-way with respect to all or any portion of the Land or the Improvements
without the prior written consent of Lender. The purchaser at any foreclosure
sale hereunder may, at its discretion, disaffirm any easement or right-of-way
granted in violation of any of the provisions of this Mortgage and may take
immediate possession of the Property free from, and despite the terms of, such
grant of easement or right-of-way. If Lender consents to the grant of an
easement or right-of-way, Lender agrees to grant such consent without charge to
Borrower other than reasonable expenses, including, without limitation,
reasonable attorneys’ fees, incurred by Lender in the review of Borrower’s
request and, if applicable, in the preparation of documents relating to the
subordination of this Mortgage to such easement or right-of-way.
1.24 Compliance with Laws.
(a) Borrower shall at all times comply with all statutes, ordinances,
regulations and other governmental or quasi-governmental requirements and
private covenants now or hereafter relating to the ownership, construction, use
or operation of the Property, including, but not limited to, those concerning
employment and compensation of persons engaged in operation and maintenance of
the Property and any environmental or ecological requirements, even if such
compliance shall require structural changes to the Property; provided, however,
that, Borrower may, upon providing Lender with security satisfactory to Lender,
proceed diligently and in good faith to contest the validity or applicability of
any such statute, ordinance, regulation or requirement so long as during such
contest the Property shall not be subject to any lien, charge, fine or other
liability and shall not be in danger of being forfeited, lost or closed.
Borrower shall not use or occupy, or allow the use or occupancy of, the Property
in any manner which violates any lease of or any other agreement applicable to
the Property or any applicable law, rule, regulation or order or which
constitutes a public or private nuisance or which makes void, voidable or
cancelable, or increases the premium of, any insurance then in force with
respect thereto.
(b) Borrower agrees that the Property shall at all times comply to the extent
applicable with the requirements of the Americans with Disabilities Act of 1990,
the Fair Housing Amendments Act of 1988 and all other state and local laws and
ordinances related to handicapped access and all rules, regulations, and any
amendments thereto, and with orders issued pursuant thereto including, without
limitation, the Americans with Disabilities Act Accessibility Guidelines for
Buildings and Facilities (“Access Laws”). Borrower agrees to give prompt notice
to Lender of the receipt by Borrower of any complaints related to violations of
any Access Laws and of the commencement of any proceedings or investigations
which relate to compliance with applicable Access Laws.

 

 

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1.25 Additional Taxes. In the event of the enactment after this date of any law
of the state where the Property is located or of any other governmental entity
deducting from the value of the Property for the purpose of taxation any lien or
security interest thereon, or imposing upon Lender the payment of the whole or
any part of the taxes or assessments or charges or liens herein required to be
paid by Borrower, or changing in any way the laws relating to the taxation of
mortgages or security agreements or debts secured by mortgages or security
agreements or the interest of the mortgagee or secured party in the property
covered thereby, or the manner of collection of such taxes, so as to adversely
affect this Mortgage or the indebtedness secured hereby or Lender, then, and in
any such event, Borrower, upon demand by Lender, shall pay such taxes,
assessments, charges or liens, or reimburse Lender therefor; provided, however,
that if in the opinion of counsel for Lender (a) it might be unlawful to require
Borrower to make such payment, or (b) the making of such payment might result in
the imposition of interest beyond the maximum amount permitted by law, then and
in either such event, Lender may elect, by notice in writing given to Borrower,
to declare all of the indebtedness secured hereby to be and become due and
payable in full, thirty (30) days from the giving of such notice.
1.26 Borrower’s Waivers. To the full extent permitted by law, Borrower agrees
that Borrower shall not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, moratorium or extension, or any law now or
hereafter in force providing for the reinstatement of the indebtedness secured
hereby prior to any sale of the Property to be made pursuant to any provisions
contained herein or prior to the entering of any decree, judgment or order of
any court of competent jurisdiction, or any right under any statute to redeem
all or any part of the Property so sold. To the full extent permitted by law,
Borrower shall not have or assert any right under any statute or rule of law
pertaining to the exemption of homestead or other exemption under any federal,
state or local law now or hereafter in effect, the administration of estates of
decedents or any other matters whatsoever to defeat, reduce or affect the right
of Lender under the terms of this Mortgage to a sale of the Property, for the
collection of the secured indebtedness without any prior or different resort for
collection, or the right of Lender under the terms of this Mortgage to the
payment of the indebtedness secured hereby out of the proceeds of sale of the
Property in preference to every other claimant whatever. Borrower, for Borrower
and Borrower’s successors and assigns, and for any and all persons ever claiming
any interest in the Property, to the full extent permitted by law, hereby
knowingly, intentionally and voluntarily with and upon the advice of competent
counsel waives, releases, relinquishes and forever forgoes: (a) all rights of
valuation, appraisement, stay of execution, reinstatement and notice of election
or intention to mature or declare due the secured indebtedness (except such
notices as are specifically provided for herein); (b) all right to a marshaling
of the assets of Borrower, including the Property, to a sale in the inverse
order of alienation, or to direct the order in which any of the Property shall
be sold in the event of foreclosure of the liens and security interests hereby
created and agrees that any court having jurisdiction to foreclose such liens
and security interests may order the Property sold as an entirety; (c) all
rights and periods of redemption provided under applicable law; and (d) all
present and future statutes of limitations as a defense to any action to enforce
the provisions of this Mortgage or to collect any of the indebtedness secured
hereby to the fullest extent permitted by law and agrees that it shall not
solicit or aid the solicitation of the filing of any Petition (as hereinafter
defined) against the Borrower, whether acting on its own behalf or on behalf of
any other party. Without limiting the generality of the foregoing, Borrower
shall not (i) provide information regarding the identity of creditors or the
nature of creditors’ claims to any third party unless compelled to do so by
order of a court of competent jurisdiction or by regulation promulgated by a
governmental agency; or (ii) pay the legal fees or expenses of any creditor of
or interest holder in Borrower with respect to any matter whatsoever. Borrower,
for Borrower and Borrower’s successors and assigns, and for any and all persons
ever claiming any interest in the Property hereby knowingly, intentionally and
voluntarily, with and upon the advice of competent counsel, waives, releases,
relinquishes and forever forgoes any and all rights to require a minimum bid or
an “upset” price in the event of the foreclosure of the liens and security
interest hereby created.
1.27 [intentionally omitted].
1.28 Contractual Statute of Limitations. Borrower hereby agrees that any claim
or cause of action by Borrower against Lender, or any of Lender’s directors,
officers, employees, agents, accountants or attorneys, based upon, arising from
or relating to the indebtedness secured hereby, or any other matter, cause or
thing whatsoever, whether or not relating thereto, occurred, done, omitted or
suffered to be done by Lender or by Lender’s directors, officers, employees,
agents, accountants or attorneys, whether sounding in contract or in tort or
otherwise, shall be barred unless asserted by Borrower by the commencement of an
action or proceeding in a court of competent jurisdiction by the filing of a
complaint within one (1) year after Borrower first acquires or reasonably should
have acquired knowledge of the first act, occurrence or omission upon which such
claim or cause of action, or any part thereof, is based and service of a summons
and complaint on an officer of Lender or any other person authorized to accept
service of process on behalf of Lender, within thirty (30) days thereafter.
Borrower agrees that such one (1) year period of time is reasonable and
sufficient time for a borrower to investigate and act upon any such claim or
cause of action. The one (1) year period provided herein shall not be waived,
tolled or extended except by the specific written agreement of Lender. This
provision shall survive any termination of this Mortgage or any of the other
Loan Documents.

 

 

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1.29 [intentionally omitted].
1.30 Hazardous Materials and Environmental Concerns.
(a) Borrower hereby represents and warrants to Lender, after due inquiry and
investigation, that, as of the date hereof: (i) the Property is in full
compliance with, and to the best of Borrower’s knowledge, information and
belief, the Property has been in full compliance with, all local, state or
federal laws, rules and regulations pertaining to environmental regulation,
contamination, remediation or human health or safety (including the regulation
or remediation of Hazardous Substances as defined below) (collectively,
“Environmental Laws”), all as amended; (ii) no hazardous, toxic or harmful
substances, wastes, materials, pollutants or contaminants (including, without
limitation, asbestos, polychlorinated biphenyls, petroleum products, radon,
lead-based paint, flammable explosives, radioactive materials, infectious
substances or raw materials which may include hazardous constituents) or any
other substances or materials which are included under or regulated by
Environmental Laws (collectively, “Hazardous Substances”) are located on or have
been handled, manufactured, generated, stored, processed, transported to or
from, or disposed of on or Released or discharged from the Property (including
soil and groundwater beneath the Property) except for those substances used by
Borrower in the ordinary course of its business and in compliance with all
Environmental Laws; (iii) the Property is not subject to any private or
governmental lien or judicial, administrative or other notice or action relating
to Hazardous Substances or noncompliance with Environmental Laws, nor is
Borrower aware of any basis for such lien, notice or action; (iv) there are no
underground storage tanks or other underground storage receptacles (whether
active or abandoned) used to store Hazardous Substances on the Property;
(v) Borrower has received no notice of, and to the best of Borrower’s knowledge
and belief, there does not exist any investigation, action, proceeding or claim
by any agency, authority or unit of government or by any third party which could
result in any liability, penalty, sanction or judgment under any Environmental
Laws with respect to any condition, use or operation of the Property, nor does
Borrower know of any basis for such investigation, action, proceeding or claim;
(vi) Borrower has received no notice that, and, to the best of Borrower’s
knowledge and belief there has been no claim by any party that, any use,
operation or condition of the Property has caused any nuisance, trespass or any
other liability or adverse condition on any other property, nor does Borrower
know of any basis for such notice or claim; and (vii) there are no present
environmental conditions or events or, to the best of Borrower’s knowledge, past
environmental conditions or events on or near the Property that could be
reasonably anticipated to materially adversely affect the value of the Property.
(b) Borrower shall keep or cause the Property to be kept free from Hazardous
Substances (except those substances used by Borrower in the ordinary course of
its business and in compliance with all Environmental Laws) and in full
compliance with all Environmental Laws, shall not install or use any underground
storage tanks, shall expressly prohibit the use, generation, handling, storage,
production, processing and disposal of Hazardous Substances by all tenants
(except those substances used by tenants in the ordinary course of their
activities and in compliance with all Environmental Laws), invitees and
trespassers, and, without limiting the generality of the foregoing, during the
term of this Mortgage, shall not install in the Improvements or permit to be
installed in the Improvements asbestos or any substance containing asbestos.
Prior to any construction, renovation or any other activities at the Property
which might, in Lender’s determination, disturb any suspect asbestos or
lead-based paint containing material, Borrower shall conduct an asbestos or
lead-based paint survey, as applicable, in form and substance satisfactory to
Lender or, if applicable, as specified in any Environmental Laws. If asbestos or
lead-based paint containing material is discovered as a result of such survey,
Borrower shall comply with all federal, state laws, local ordinances and all
regulations concerning the removal and disposal of such materials, including all
worker protection practices and standards. If required by Lender or under any
Environmental Law, Borrower shall further maintain an Operations and Maintenance
Program (“O&M Program”) for the management of asbestos, lead-based paint, radon
or any other Hazardous Substances at the Property.

 

 

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(c) Borrower shall promptly notify Lender if Borrower shall become aware of
(i) any Release or threatened Release of Hazardous Substances at, on, under,
from or affecting or threatening to affect the Property (except those substances
used by Borrower or tenants in the ordinary course of their business or
activities, respectively, and in compliance with all Environmental Laws), (ii)
any lien or filing of lien, action or notice affecting or threatening to affect
the Property or Borrower resulting from any violation or alleged violation of
Environmental Law, (iii) any investigation, inquiry or proceeding concerning
Borrower or the Property pursuant to any Environmental Law or otherwise relating
to Hazardous Substances, or (iv) any occurrence, condition or state of facts
which would render any representation or warranty in this Section incorrect in
any respect if made at the time of such discovery. Further, immediately upon
receipt of the same, Borrower shall deliver to Lender copies of any and all
orders, notices, permits, applications, reports, and other communications,
documents and instruments pertaining to the actual, alleged or potential
non-compliance with any Environmental Laws in connection with the Property or
presence or existence of any Hazardous Substances at, on, about, under, within,
near or in connection with the Property (except those substances used in the
ordinary course of its business and in compliance with all Environmental Laws).
Borrower shall, promptly, at Borrower’s sole cost and expense, take all actions
as shall be necessary or advisable for compliance with the terms of this Section
1.30 or for the remediation of any and all portions of the Property or other
affected property, including, without limitation, all investigative, monitoring,
removal, containment, remedial and response actions in accordance with all
applicable Environmental Laws (and in all events in a manner satisfactory to
Lender) and shall further pay or cause to be paid, at no expense to Lender, all
remediation, response, administrative and enforcement costs of applicable
governmental agencies which may be asserted against the Property. In the event
Borrower fails to do so (1) Lender may, but shall not be obligated to, undertake
remediation at the Property or other affected property necessary to bring the
Property into conformance with the terms of Environmental Laws, and (2) Borrower
hereby grants to Lender and its agents and employees access to the Property and
a license to do all things Lender shall deem necessary to bring the Property
into conformance with Environmental Laws. Any and all costs and expenses
reasonably incurred by Lender in connection therewith, together with interest
thereon at the default rate of interest under the Note from the date incurred by
Lender until actually paid by Borrower, shall be immediately paid by Borrower on
demand and shall be secured by this Mortgage and by all of the other Loan
Documents securing all or any part of the indebtedness evidenced by the Note.
BORROWER COVENANTS AND AGREES, AT BORROWER’S SOLE COST AND EXPENSE, TO
INDEMNIFY, DEFEND (AT TRIAL AND APPELLATE LEVELS, AND WITH ATTORNEYS,
CONSULTANTS AND EXPERTS ACCEPTABLE TO LENDER), AND HOLD LENDER HARMLESS FROM AND
AGAINST ANY AND ALL LIENS, DAMAGES, LOSSES, LIABILITIES, OBLIGATIONS, SETTLEMENT
PAYMENTS, PENALTIES, ASSESSMENTS, CITATIONS, DIRECTIVES, CLAIMS, LITIGATION,
DEMANDS, DEFENSES, JUDGMENTS, SUITS, PROCEEDINGS, COSTS, DISBURSEMENTS AND
EXPENSES OF ANY KIND OR OF ANY NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’, CONSULTANTS’ AND EXPERTS’ FEES AND DISBURSEMENTS ACTUALLY
INCURRED IN INVESTIGATING, DEFENDING, SETTLING OR PROSECUTING ANY CLAIM,
LITIGATION OR PROCEEDING) WHICH MAY AT ANY TIME BE IMPOSED UPON, INCURRED BY OR
ASSERTED OR AWARDED AGAINST LENDER OR THE PROPERTY, AND ARISING DIRECTLY OR
INDIRECTLY FROM OR OUT OF: (A) THE PRESENCE, RELEASE OR THREAT OF RELEASE OF ANY
HAZARDOUS SUBSTANCES ON, IN, UNDER, AFFECTING OR THREATENING TO AFFECT ALL OR
ANY PORTION OF THE PROPERTY OR ANY SURROUNDING AREAS, REGARDLESS OF WHETHER OR
NOT CAUSED BY OR WITHIN THE CONTROL OF BORROWER; (B) THE VIOLATION OF ANY
ENVIRONMENTAL LAWS RELATING TO OR AFFECTING OR THREATENING TO AFFECT THE
PROPERTY, WHETHER OR NOT CAUSED BY OR WITHIN THE CONTROL OF BORROWER; (C) THE
FAILURE BY BORROWER TO COMPLY FULLY WITH THE TERMS AND CONDITIONS OF THIS
SECTION 1.30; (D) THE BREACH OF ANY REPRESENTATION OR WARRANTY CONTAINED IN THIS
SECTION 1.30; OR (E) THE ENFORCEMENT OF THIS SECTION 1.30, INCLUDING, WITHOUT
LIMITATION, THE COST OF ASSESSMENT,

 

 

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CONTAINMENT AND/OR REMOVAL OF ANY AND ALL HAZARDOUS SUBSTANCES ON AND/OR FROM
ALL OR ANY PORTION OF THE PROPERTY OR ANY SURROUNDING AREAS, THE COST OF ANY
ACTIONS TAKEN IN RESPONSE TO THE PRESENCE, RELEASE OR THREAT OF RELEASE OF ANY
HAZARDOUS SUBSTANCES ON, IN, UNDER OR AFFECTING ANY PORTION OF THE PROPERTY OR
ANY SURROUNDING AREAS TO PREVENT OR MINIMIZE SUCH RELEASE OR THREAT OF RELEASE
SO THAT IT DOES NOT MIGRATE OR OTHERWISE CAUSE OR THREATEN DANGER TO PRESENT OR
FUTURE PUBLIC HEALTH, SAFETY, WELFARE OR THE ENVIRONMENT, AND COSTS INCURRED TO
COMPLY WITH THE ENVIRONMENTAL LAWS IN CONNECTION WITH ALL OR ANY PORTION OF THE
PROPERTY OR ANY SURROUNDING AREAS. THE INDEMNITY SET FORTH IN THIS SECTION
1.30(c) SHALL ALSO INCLUDE ANY DIMINUTION IN THE VALUE OF THE SECURITY AFFORDED
BY THE PROPERTY OR ANY FUTURE REDUCTION IN THE SALES PRICE OF THE PROPERTY BY
REASON OF ANY MATTER SET FORTH IN THIS SECTION 1.30(c), AND ANY AND ALL LIENS,
DAMAGES, LOSSES, LIABILITIES, OBLIGATIONS, SETTLEMENT PAYMENTS, PENALTIES,
ASSESSMENTS, CITATIONS, DIRECTIVES, CLAIMS, LITIGATION, DEMANDS, DEFENSES,
JUDGMENTS, SUITS, PROCEEDINGS, COSTS, DISBURSEMENTS OR EXPENSES OF ANY KIND OR
OF ANY NATURE WHATSOEVER ARISING OUT OF OR RELATING TO INJURY OR DEATH DUE TO
EXPOSURE FROM HAZARDOUS SUBSTANCES THAT MAY BE PRESENT OR RELEASED AT, ON, UNDER
OR FROM THE PROPERTY. LENDER’S RIGHTS UNDER THIS SECTION SHALL SURVIVE PAYMENT
IN FULL OF THE INDEBTEDNESS SECURED HEREBY AND SHALL BE IN ADDITION TO ALL OTHER
RIGHTS OF LENDER UNDER THIS MORTGAGE, THE NOTE AND THE OTHER LOAN DOCUMENTS.
(d) Upon Lender’s request, at any time after the occurrence of an Event of
Default or at such other time as Lender has reasonable grounds to believe that
Hazardous Substances are or have been handled, generated, stored, processed,
transported to or from, or Released or discharged from or disposed of on or
around the Property (other than in the normal course of Borrower’s or the
tenants’ business or activities, respectively, and in compliance with all
Environmental Laws) or that Borrower, any tenant or the Property may be in
violation of Environmental Laws, Borrower shall provide, at Borrower’s sole cost
and expense, an environmental site assessment or environmental compliance audit
of the Property prepared by a hydrogeologist or environmental engineer or other
appropriate consultant approved by Lender to determine (i) whether there has
been a Release or threatened Release of Hazardous Substances at, on, under, or
from the Property onto adjoining properties, and (ii) if the Property is in full
compliance with Environmental Laws (including as to asbestos containing material
and lead-based paint). If Borrower fails to provide such assessment or audit
within thirty (30) days after such request, Lender may order the same, and
Borrower hereby grants to Lender and its employees and agents access to the
Property and a license to undertake such assessment or audit. The cost of such
assessment or audit, together with interest thereon at the default rate of
interest under the Note from the date incurred by Lender until actually paid by
Borrower, shall be immediately paid by Borrower on demand and shall be secured
by this Mortgage and by all of the other Loan Documents securing all or any part
of the indebtedness evidenced by the Note.
(e) Without limiting the foregoing, Lender and its authorized representatives
may, during normal business hours and at its own expense, inspect the Property
and Borrower’s records related thereto for the purpose of determining compliance
with Environmental Laws and the terms and conditions of this Section 1.30.
(f) As used herein, the term “Release” or “Released” shall include, without
limitation, any intentional or unintentional placing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, disposing, discarding or abandoning of any Hazardous
Substance.

 

 

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1.31 Indemnification; Subrogation.
(a) BORROWER SHALL INDEMNIFY, DEFEND AND HOLD LENDER HARMLESS AGAINST: (i) ANY
AND ALL CLAIMS FOR BROKERAGE, LEASING, FINDER’S OR SIMILAR FEES WHICH MAY BE
MADE RELATING TO THE PROPERTY OR THE SECURED INDEBTEDNESS, (ii) ANY AND ALL
LIABILITY, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, CLAIMS, ACTIONS, SUITS,
LIENS, CHARGES, ENCUMBRANCES, COSTS AND EXPENSES (INCLUDING LENDER’S ATTORNEYS’
FEES, TOGETHER WITH REASONABLE APPELLATE COUNSEL FEES, IF ANY) OF WHATEVER KIND
OR NATURE WHICH MAY BE ASSERTED AGAINST, IMPOSED ON OR INCURRED BY LENDER UNDER
ANY LEASE OR OCCUPANCY AGREEMENT, FOR ANY LOSS ARISING IN CONNECTION WITH THE
SECURED INDEBTEDNESS, THIS MORTGAGE, THE PROPERTY, OR ANY PART THEREOF, OR THE
EXERCISE BY LENDER OF ANY RIGHTS OR REMEDIES GRANTED TO IT UNDER THIS MORTGAGE,
(iii) ANY LIENS (WHETHER JUDGMENTS, MECHANICS’, MATERIALMEN’S OR OTHERWISE),
CHARGES AND ENCUMBRANCES FILED AGAINST THE PROPERTY, AND (iv) ANY CLAIMS AND
DEMANDS FOR DAMAGES OR INJURY, INCLUDING CLAIMS FOR PROPERTY DAMAGE, PERSONAL
INJURY OR WRONGFUL DEATH, ARISING OUT OF OR IN CONNECTION WITH ANY ACCIDENT OR
FIRE OR OTHER CASUALTY ON THE LAND OR THE IMPROVEMENTS OR ANY NUISANCE OR
TRESPASS MADE OR SUFFERED THEREON, INCLUDING, IN ANY CASE, ATTORNEYS’ FEES,
COSTS AND EXPENSES AS AFORESAID, WHETHER AT PRETRIAL, TRIAL OR APPELLATE LEVEL
FOR ANY CIVIL, CRIMINAL OR ADMINISTRATIVE PROCEEDINGS. SHOULD LENDER INCUR ANY
LIABILITY UNDER THIS MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS, THE AMOUNT
THEREOF, INCLUDING, WITHOUT LIMITATION, COSTS, EXPENSES AND REASONABLE
ATTORNEYS’ FEES, TOGETHER WITH INTEREST THEREON AT THE DEFAULT INTEREST RATE (AS
DEFINED IN THE NOTE) FROM THE DATE INCURRED BY LENDER UNTIL ACTUALLY PAID BY
BORROWER, SHALL BE IMMEDIATELY DUE AND PAYABLE TO LENDER BY BORROWER ON DEMAND
AND SHALL BE SECURED HEREBY AND BY ALL OF THE OTHER LOAN DOCUMENTS SECURING ALL
OR ANY PART OF THE INDEBTEDNESS EVIDENCED BY THE NOTE. HOWEVER, NOTHING HEREIN
SHALL BE CONSTRUED TO OBLIGATE BORROWER TO INDEMNIFY, DEFEND AND HOLD HARMLESS
LENDER FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, CLAIMS, ACTIONS, SUITS, COSTS OR EXPENSES ASSERTED AGAINST, IMPOSED
ON OR INCURRED BY LENDER BY REASON OF LENDER’S WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE. THIS INDEMNITY SHALL SURVIVE PAYMENT IN FULL OF THE INDEBTEDNESS
SECURED HEREBY.
(b) Lender may engage the services of attorneys if it is made a party defendant
to any litigation (or threatened action or claim) or to enforce the terms of
this Mortgage or to protect its rights hereunder, and in the event of any such
engagement, Borrower shall pay Lender’s attorneys’ fees (together with
reasonable appellate counsel fees, if any), consultants’ fees, experts’ fees and
expenses reasonably incurred by Lender, whether or not an action is actually
commenced against Borrower. All references to “attorneys” in this Subsection and
elsewhere in this Mortgage shall include without limitation any attorney or law
firm engaged by Lender and Lender’s in-house counsel, and all references to
“fees and expenses” in this Subsection and elsewhere in this Mortgage shall
include without limitation any fees of such attorney or law firm and any
allocation charges and allocation costs of Lender’s in-house counsel.
(c) A waiver of subrogation shall be obtained by Borrower from its insurance
carrier and, consequently, Borrower waives any and all right to claim or recover
against Lender, its officers, employees, agents and representatives, for loss of
or damage to Borrower, the Property, Borrower’s property or the property of
others under Borrower’s control from any cause insured against or required to be
insured against by the provisions of this Mortgage.
1.32 No Broker. Borrower hereby represents that it has dealt with no financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Agreement. BORROWER HEREBY
AGREES TO INDEMNIFY, DEFEND AND HOLD LENDER HARMLESS FROM AND AGAINST ANY AND
ALL CLAIMS, LIABILITIES, COSTS AND EXPENSES OF ANY KIND (INCLUDING LENDER’S
ATTORNEYS’ FEES AND EXPENSES) IN ANY WAY RELATING TO OR ARISING FROM A CLAIM
THAT ANY PERSON OR ENTITY ACTED ON BEHALF OF BORROWER OR LENDER IN CONNECTION
WITH THE TRANSACTIONS CONTEMPLATED HEREIN. The provisions of this Section 1.32
shall survive any release or termination of this Mortgage whether occasioned by
a repayment of the indebtedness secured hereby or otherwise.

 

 

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ARTICLE II
EVENTS OF DEFAULT
2.1 Events of Default. The occurrence of one or more of the following events
shall be an “Event of Default” hereunder:
(a) Borrower fails to pay any sum of money, as it becomes due and payable,
whether at the scheduled due date thereof or when accelerated pursuant to any
power to accelerate, or otherwise; or
(b) [intentionally omitted]; or
(c) Borrower fails to provide insurance as required by Section 1.4 hereof or
fails to perform any covenant, agreement, obligation, term or condition set
forth in Section 1.16 or Section 1.30 hereof; or
(d) Borrower fails to punctually and properly perform, observe or comply with
any covenant, agreement, undertaking or condition contained herein, and such
failure shall continue for thirty days after the earlier of the actual knowledge
thereof by Senior Management (as defined in the Loan Agreement) or notice
thereof from Lender, provided, however, that if such failure is susceptible of
cure, but cannot be curred within such 30 day period, and if Borrower has
commenced to such such failure within such 30-day period, such period shall be
extended for an additional period of time as is reasonably necessary for
Borrower to cure such failure, not to exceed sixty (60) days; or
(e) Any representation or warranty made herein to Lender by Borrower is
determined by Lender to have been false or misleading in any material respect as
of the date of the Mortgage; or
(f) There shall be a sale, conveyance, disposition, alienation, hypothecation,
leasing, assignment, pledge, mortgage, granting of a security interest in or
other transfer or further encumbrancing of the Property, or any portion thereof
or any interest therein, in violation of Section 1.13 hereof; or
(g) A default occurs under any of the other Loan Documents which has not been
cured within any applicable grace or cure period therein provided which has not
been waived; or
(h) [intentionally omitted]; or
(i) [intentionally omitted]; or
(j) the levy against the Property or any part thereof, of any execution,
attachment, sequestration or other writ which is not vacated within sixty
(60) days after the levy; or
(k) the appointment of a receiver, trustee or custodian of Borrower, or of the
Property or any part thereof, which receiver, trustee or custodian is not
discharged within sixty (60) days after the appointment; or
(l) [intentionally omitted]; or
(m) the filing by Borrower of either a petition, complaint, answer or other
instrument which seeks to effect a suspension of, or which has the effect of
suspending any of the rights or powers of Lender or Trustee granted in the Note,
herein or in any Loan Document; or
(n) [intentionally omitted]; or

 

 

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(o) [intentionally omitted]; or
(p) abandonment by Borrower of all or any portion of the Property; or
(q) dissolution or liquidation of the Borrower or termination or forfeiture of
Borrower’s right to do business; or
(r) [intentionally omitted]; or
(s) [intentionally omitted].
ARTICLE III
REMEDIES
3.1 Remedies Available. If there shall occur an Event of Default, then this
Mortgage is subject to foreclosure as provided by law and Lender may, at its
option and by or through a trustee, nominee, assignee or otherwise, to the
fullest extent permitted by law, exercise any or all of the following rights,
remedies and recourses, either successively or concurrently:
(a) Acceleration. Accelerate the Maturity Date and declare any or all of the
indebtedness secured hereby to be immediately due and payable without any
presentment, demand, protest, notice or action of any kind whatever (each of
which is hereby expressly waived by Borrower), whereupon the same shall become
immediately due and payable. Upon any such acceleration, payment of such
accelerated amount shall constitute a prepayment of the principal balance of the
Note and any applicable prepayment fee provided for in the Note shall then be
immediately due and payable.
(b) Entry on the Property. Without in any way curing or waiving any Event of
Default of Borrower, either in person or by agent or by court-appointed
receiver, with or without bringing any action or proceeding, or by a receiver
appointed by a court and without regard to the adequacy of its security, enter
upon and take possession of the Property, or any part thereof, in its own name,
without force or with such force as is permitted by law and without notice or
process or with such notice or process as is required by law, unless such notice
and process are waivable, in which case Borrower hereby waives such notice and
process, and do any and all acts and perform any and all work which may be
desirable or necessary in Lender’s judgment to complete any unfinished
construction on the Land, to preserve and/or enhance the value, marketability or
rentability of the Property, to increase the income therefrom, to manage and
operate the Property or to protect the security hereof, and all sums expended by
Lender therefor, together with interest thereon at the default rate of interest
under the Note, shall be immediately due and payable to Lender by Borrower on
demand and shall be secured hereby and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the Note.
(c) Collect Rents and Profits. With or without taking possession of the
Property, sue for or otherwise collect the Rents and Profits, including those
past due and unpaid, and apply the same, less costs and expenses of operation
and collection, including reasonable attorneys’ fees, upon any indebtedness
secured hereby, all in such order as Lender in its discretion may determine.
(d) Appointment of Receiver. Upon, or at any time prior or after, initiating the
exercise of any power of sale, instituting any judicial foreclosure or
instituting any other foreclosure of the liens and security interests provided
for herein or any other legal proceedings hereunder, make application, ex parte,
to a court of competent jurisdiction for appointment of a receiver for all or
any part of the Property, as a matter of strict right and without notice to
Borrower and without regard to the adequacy of the Property for the repayment of
the indebtedness secured hereby or the solvency of Borrower or any person or
persons liable for the payment of the indebtedness secured hereby, and Borrower
does hereby irrevocably consent to such appointment, waives any and all notices
of and defenses to such appointment and agrees not to oppose any application
therefor by Lender, but nothing herein is to be construed to deprive Lender of
any other right, remedy or privilege Lender may now have under the law to have a
receiver appointed, provided, however, that the appointment of such receiver,
trustee or other appointee by virtue of any court order, statute or regulation
shall not impair or in any manner prejudice the rights of Lender to receive
payment of the Rents and Profits pursuant to other terms and provisions of this
Mortgage or the Assignment. Any such receiver shall have all of the usual powers
and duties of receivers in similar cases, including, without limitation, the
full power to hold, develop, rent, lease, manage, maintain, operate and
otherwise use or permit the use of the Property upon such terms and conditions
as said receiver may deem to be prudent and reasonable under the circumstances
as more fully set forth in Section 3.3 below. Such receivership shall, at the
option of Lender, continue until full payment of all of the indebtedness secured
hereby or until title to the Property shall have passed by foreclosure sale
under this Mortgage or deed in lieu of foreclosure. Lender shall also be
entitled to the appointment of a receiver in the circumstances described in
Section 5.2 hereof.

 

 

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(e) Foreclosure. Immediately commence an action to foreclose this Mortgage by
advertisement or judicial proceedings pursuant to applicable law or to
specifically enforce its provisions or any of the indebtedness secured hereby,
pursuant to the statutes in such case made and provided, and sell the Property
or cause the Property to be sold in accordance with the requirements and
procedures provided by said statutes in a single parcel or in several parcels at
the option of Lender. Without limitation of the foregoing, Lender shall be
entitled to sell, release, and convey the Property at public sale and to execute
and deliver to the purchasers at such sale good and sufficient deeds of
conveyance, rendering any surplus funds, after payment of the indebtedness
secured hereby in full and the expense of such sale, including attorneys’ fees
as provided by law, to Borrower all in accordance with Chapter 32 of the
Michigan Revised Judicature Act, as the same may be amended from time to time,
and any similar statutory provisions which may hereafter be enacted in addition
thereto or in substitution therefor.
(1) In the event foreclosure by advertisement or judicial proceedings are
initiated or filed by Lender, all expenses incident to such proceedings,
including, but not limited to, attorneys’ fees and costs, shall be paid by
Borrower and secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the Note. The secured
indebtedness and all other obligations secured by this Mortgage, including,
without limitation, interest at the default rate of interest under the Note, any
prepayment charge, fee or premium required to be paid under the Note in order to
prepay principal (to the extent permitted by applicable law), attorneys’ fees
and any other amounts due and unpaid to Lender under the Loan Documents, may be
bid by Lender in the event of a foreclosure sale hereunder. In the event of a
foreclosure by advertisement or a judicial sale pursuant to a foreclosure
decree, it is understood and agreed that Lender or its assigns may become the
purchaser of the Property or any part thereof.
(2) Lender may, by following the procedures and satisfying the requirements
prescribed by applicable law, foreclose on only a portion of the Property and,
in such event, said foreclosure shall not affect the lien of this Mortgage on
the remaining portion of the Property.
(f) Judicial Remedies. Proceed by suit or suits, at law or in equity, instituted
by Lender, to enforce the payment of the indebtedness secured hereby or the
other obligations of Borrower hereunder or pursuant to the Loan Documents, to
foreclose the liens and security interests of this Mortgage as against all or
any part of the Property, and to have all or any part of the Property sold under
the judgment or decree of a court of competent jurisdiction. In the event of a
judicial sale pursuant to a foreclosure decree, it is understood and agreed that
Lender or its assigns may become the purchaser of the Property. This remedy
shall be cumulative of any other non-judicial remedies available to the Lender
with respect to the Loan Documents. Proceeding with the request or receiving a
judgment for legal relief shall not be or be deemed to be an election of
remedies or bar any available non-judicial remedy of the Lender.
(g) Other. Exercise any other right or remedy available hereunder, under any of
the other Loan Documents or at law or in equity.

 

 

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3.2 Application of Proceeds. To the fullest extent permitted by law, the
proceeds of any sale under this Mortgage shall be applied, to the extent funds
are so available, to the following items in such order as Lender in its
discretion may determine:
(a) To payment of the costs, expenses and fees of taking possession of the
Property, and of holding, operating, maintaining, using, leasing, repairing,
improving, marketing and selling the same and of otherwise enforcing Lender’s
right and remedies hereunder and under the other Loan Documents, including, but
not limited to, receivers’ fees, court costs, attorneys’, accountants’,
appraisers’, auctioneers’, managers’ and other professionals’ fees, title
charges and transfer taxes.
(b) To payment of all sums expended by Lender under the terms of any of the Loan
Documents and not yet repaid, together with interest on such sums at the default
rate of interest under the Note.
(c) To payment of the secured indebtedness and all other obligations secured by
this Mortgage, including, without limitation, interest at the default rate of
interest under the Note and, to the extent permitted by applicable law, any
prepayment fee, charge or premium required to be paid under the Note in order to
prepay principal, in any order that Lender chooses in its sole discretion.
(d) The remainder, if any, of such funds shall be disbursed to Borrower or to
the person or persons legally entitled thereto.
3.3 Right and Authority of Receiver or Lender in the Event of Default; Power of
Attorney. Upon the occurrence of an Event of Default, and entry upon the
Property pursuant to Section 3.1(b) hereof or appointment of a receiver pursuant
to Section 3.1(d) hereof, and under such terms and conditions as may be prudent
and reasonable under the circumstances in Lender’s or the receiver’s sole
discretion, all at Borrower’s expense, Lender or said receiver, or such other
persons or entities as they shall hire, direct or engage, as the case may be,
may do or permit one or more of the following, successively or concurrently:
(a) enter upon and take possession and control of any and all of the Property;
(b) take and maintain possession of all documents, books, records, papers and
accounts relating to the Property; (c) exclude Borrower and its agents, servants
and employees wholly from the Property; (d) manage and operate the Property;
(e) preserve and maintain the Property; (f) make repairs and alterations to the
Property; (g) complete any construction or repair of the Improvements, with such
changes, additions or modifications of the plans and specifications or intended
disposition and use of the Improvements as Lender may in its sole discretion
deem appropriate or desirable to place the Property in such condition as will,
in Lender’s sole discretion, make it or any part thereof readily marketable or
rentable; (h) conduct a marketing or leasing program with respect to the
Property, or employ a marketing or leasing agent or agents to do so, directed to
the leasing or sale of the Property under such terms and conditions as Lender
may in its sole discretion deem appropriate or desirable; (i) employ such
contractors, subcontractors, materialmen, architects, engineers, consultants,
managers, brokers, marketing agents, or other employees, agents, independent
contractors or professionals, as Lender may in its sole discretion deem
appropriate or desirable to implement and effectuate the rights and powers
herein granted; (j) execute and deliver, in the name of Lender as
attorney-in-fact and agent of Borrower or in its own name as Lender, such
documents and instruments as are necessary or appropriate to consummate
authorized transactions; (k) enter into such leases, whether of real or personal
property, or tenancy agreements, under such terms and conditions as Lender may
in its sole discretion deem appropriate or desirable; (l) collect and receive
the Rents and Profits from the Property; (m) eject tenants or repossess personal
property, as provided by law, for breaches of the conditions of their leases or
other agreements; (n) sue for unpaid Rents and Profits, payments, income or
proceeds in the name of Borrower or Lender; (o) maintain actions in forcible
entry and detainer, ejectment for possession and actions in distress for rent;
(p) compromise or give acquittance for Rents and Profits, payments, income or
proceeds that may become due; (q) delegate or assign any and all rights and
powers given to Lender by this Mortgage; and (r) do any acts which Lender in its
sole discretion deems appropriate or desirable to protect the security hereof
and use such measures, legal or equitable, as Lender may in its sole discretion
deem appropriate or desirable to implement and effectuate the provisions of this
Mortgage. This Mortgage shall constitute a direction to and full authority to
any lessee, or other third party who has heretofore dealt or contracted or may
hereafter deal or contract with Borrower or Lender, at the request of Lender, to
pay all amounts owing under any lease, contract, concession, license or other
agreement to Lender without proof of the Event of Default relied upon. Any such
lessee or third party is hereby irrevocably authorized to rely upon and comply
with (and shall be fully protected by Borrower in so doing) any request, notice
or demand by Lender for the payment to Lender of any Rents and Profits or other
sums which may be or thereafter become due under its lease, contract,
concession, license or other agreement, or for the performance of any
undertakings under any such lease, contract, concession, license or other
agreement, and shall have no right or duty to inquire whether any Event of
Default has actually occurred or is then existing. Borrower hereby constitutes
and appoints Lender, its assignees, successors, transferees and nominees, as
Borrower’s true and lawful attorney-in-fact and agent, with full power of
substitution in the Property, in Borrower’s name, place and stead, to do or
permit any one or more of the foregoing described rights, remedies, powers and
authorities, successively or concurrently, and said power of attorney shall be
deemed a power coupled with an interest and irrevocable so long as any
indebtedness secured hereby is outstanding. Any money advanced by Lender in
connection with any action taken under this Section 3.3, together with interest
thereon at the default rate of interest under the Note from the date of making
such advancement by Lender until actually paid by Borrower, shall be a demand
obligation owing by Borrower to Lender and shall be secured by this Mortgage and
by every other instrument securing the secured indebtedness.

 

 

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3.4 Occupancy After Foreclosure. In the event there is a foreclosure or
comparable sale or sales hereunder and at the time of such sale or sales,
Borrower or Borrower’s representatives, successors or assigns, or any other
persons claiming any interest in the Property by, through or under Borrower
(except tenants of space in the Improvements subject to leases entered into
prior to the date hereof), are occupying or using the Property, or any part
thereof, then, to the extent not prohibited by applicable law, each and all
shall, at the option of Lender or the purchaser at such sale, as the case may
be, immediately become the tenant of the purchaser at such sale, which tenancy
shall be a tenancy from day-to-day, terminable at the will of either landlord or
tenant, at a reasonable rental per day based upon the value of the Property
occupied or used, such rental to be due daily to the purchaser. Further, to the
extent permitted by applicable law, in the event the tenant fails to surrender
possession of the Property upon the termination of such tenancy, the purchaser
shall be entitled to institute and maintain an action for unlawful detainer of
the Property in the appropriate court of the county in which the Land is
located. In addition, in the event the tenant fails to surrender possession of
the Property upon the termination of such tenancy, the purchaser shall be
entitled to institute and maintain an action for summary proceedings to obtain
possession of the Property in the appropriate court of the county in which the
Land is located in accordance with Michigan law.
3.5 Notice to Account Debtors. Lender may, at any time after an Event of
Default, notify the account debtors and obligors of any accounts, chattel paper,
negotiable instruments or other evidences of indebtedness to Borrower included
in the Property to pay Lender or its agent directly. Borrower shall at any time
or from time to time upon the request of Lender provide to Lender a current list
of all such account debtors and obligors and their addresses.
3.6 Cumulative Remedies. All remedies contained in this Mortgage are cumulative
and Lender shall also have all other remedies provided at law and in equity or
in any other Loan Documents. Such remedies may be pursued separately,
successively or concurrently at the sole subjective direction of Lender and may
be exercised in any order and as often as occasion therefor shall arise. No act
of Lender shall be construed as an election to proceed under any particular
provisions of this Mortgage to the exclusion of any other provision of this
Mortgage or as an election of remedies to the exclusion of any other remedy
which may then or thereafter be available to Lender. No delay or failure by
Lender to exercise any right or remedy under this Mortgage shall be construed to
be a waiver of that right or remedy or of any Event of Default. Lender may
exercise any one or more of its rights and remedies at its option without regard
to the adequacy of its security.
3.7 Payment of Expenses. Borrower shall pay on demand all of Lender’s expenses
reasonably incurred in any efforts to enforce any terms of this Mortgage,
whether or not any lawsuit is filed and whether or not foreclosure is commenced
but not completed, including, but not limited to, reasonable legal fees and
disbursements, foreclosure costs and title charges, together with interest
thereon from and after the date incurred by Lender until actually paid by
Borrower at the default rate of interest under the Note, and the same shall be
secured by this Mortgage and by all of the other Loan Documents securing all or
any part of the indebtedness evidenced by the Note.
3.8 No Obligation. Nothing contained herein shall obligate Lender to enforce any
of its rights or remedies hereunder or to remedy any circumstances leading to
the occurrence of any default hereunder.

 

 

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ARTICLE IV
MISCELLANEOUS TERMS AND CONDITIONS
4.1 Time of Essence. Time is of the essence with respect to all provisions of
this Mortgage.
4.2 Release of Mortgage. If and when Borrower has paid all of the secured
indebtedness as the same becomes due and payable, then, and in such event only,
all rights under this Mortgage shall terminate, except for those provisions
hereof which by their terms survive, and the Property shall become wholly clear
of the liens, security interests, conveyances and assignments evidenced hereby,
which shall be released by Lender in due form at Borrower’s cost. Borrower shall
be responsible for the recordation of such release and payment of any
recordation costs associated therewith.
4.3 Certain Rights of Lender. Without affecting Borrower’s liability for the
payment of any of the indebtedness secured hereby, Lender may from time to time
and without notice to Borrower: (a) release any person liable for the payment of
the indebtedness secured hereby; (b) extend or modify the terms of payment of
the indebtedness secured hereby; (c) accept additional real or personal property
of any kind as security or alter, substitute or release any property securing
the indebtedness secured hereby; (d) recover any part of the Property;
(e) consent in writing to the making of any subdivision map or plat thereof;
(f) join in granting any easement therein; or (g) join in any extension
agreement of this Mortgage or any agreement subordinating the lien hereof.
4.4 Notices. Any notice, report, demand, request or other instrument authorized
or required to be given or furnished under this Mortgage (collectively, the
“Notices”) shall be given and deemed effective as provided in the Loan
Agreement.
4.5 Successors and Assigns. The terms, provisions, indemnities, covenants and
conditions hereof shall be binding upon Borrower and the successors and assigns
of Borrower, including all successors in interest in and to all or any part of
the Property, and shall inure to the benefit of Lender and its successors and
assigns and shall constitute covenants running with the land. If Borrower
consists of more than one person or entity, each will be jointly and severally
liable to perform the obligations of Borrower.
4.6 Severability. A determination that any provision of this Mortgage is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision.
4.7 Gender. Within this Mortgage, words of any gender shall be held and
construed to include any other gender, and words in the singular shall be held
and construed to include the plural, and vice versa, unless the context
otherwise requires.
4.8 Waiver; Discontinuance of Proceedings. Lender may waive any single Event of
Default or any circumstance, which with the giving of notice, or passage of
time, or both, would constitute an Event of Default, without waiving any other
prior or subsequent Event of Default or circumstance. Lender may further remedy
any Event of Default or such circumstance without waiving the Event of Default
or circumstance so remedied. Neither the failure or delay by Lender in
exercising any right, power or remedy with respect to an Event of Default or
with respect to any circumstance, which with the giving of notice, or passage of
time, or both, would constitute an Event of Default, shall be construed as a
waiver of such Event of Default or circumstance or as a waiver of the right to
exercise any such right, power or remedy at a later date. No single or partial
exercise by Lender of any right, power or remedy hereunder shall exhaust the
same or shall preclude any other or further exercise thereof, and every such
right, power or remedy hereunder may be exercised at any time and from time to
time. No modification or waiver of any provision hereof nor consent to any
departure by Borrower therefrom shall in any event be effective unless the same
shall be in writing and signed by Lender, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose given.
No notice to nor demand on Borrower in any case shall of itself entitle Borrower
to any other or further notice or demand in similar or other circumstances.
Acceptance by Lender of any payment in an amount less than the amount then due
on any of the secured indebtedness shall be deemed an acceptance on account only
and shall not in any way affect the existence of an Event of Default hereunder.

 

 

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4.9 Section Headings. The headings of the sections and paragraphs of this
Mortgage are for convenience of reference only, are not to be considered a part
hereof and shall not limit or otherwise affect any of the terms hereof.
4.10 GOVERNING LAW. THIS MORTGAGE WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, PROVIDED THAT TO THE EXTENT
THAT ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE PREEMPTED BY FEDERAL LAW, SUCH
FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING.
4.11 Counting of Days. The term “days” when used herein shall mean calendar
days. If any time period ends on a Saturday, Sunday or holiday officially
recognized by the state within which the Land is located, the period shall be
deemed to end on the next succeeding business day; provided, however, that in
the case of payments due by Borrower to Lender on a Saturday, Sunday or holiday
(e.g., monthly deposits into Reserves, payments on the Note, etc.) such payments
shall be deemed due on the immediately preceding business day. The term
“business day” or “Business Day” when used herein shall mean a weekday, Monday
through Friday, except a legal holiday or a day on which banking institutions in
Dallas, Texas are authorized by law to be closed.
4.12 Application of the Proceeds of the Note. To the extent that proceeds of the
Note are used to pay indebtedness secured by any outstanding lien, security
interest, charge or prior encumbrance against the Property, such proceeds have
been advanced by Lender at Borrower’s request and Lender shall be subrogated to
any and all rights, security interests and liens owned by any owner or holder of
such outstanding liens, security interests, charges or encumbrances,
irrespective of whether said liens, security interests, charges or encumbrances
are released.
4.13 Unsecured Portion of Indebtedness. If any part of the secured indebtedness
cannot be lawfully secured by this Mortgage or if any part of the Property
cannot be lawfully subject to the lien and security interest hereof to the full
extent of such indebtedness, then all payments made shall be applied on said
indebtedness first in discharge of that portion thereof which is unsecured by
this Mortgage.
4.14 Cross Default. An Event of Default under this Mortgage shall also
constitute an Event of Default under each of the other Loan Documents.
4.15 Interest After Sale. In the event the Property or any part thereof shall be
sold upon foreclosure as provided hereunder, to the extent permitted by law, the
sum for which the same shall have been sold shall, for purposes of redemption
(if applicable pursuant to the laws of the state in which the Property is
located), bear interest at the default rate of interest under the Note.
4.16 Construction of this Document. This document may be construed as a
mortgage, security deed, deed of trust, chattel mortgage, conveyance,
assignment, security agreement, pledge, financing statement, hypothecation or
contract, or any one or more of the foregoing, in order to fully effectuate the
liens and security interests created hereby and the purposes and agreements
herein set forth.
4.17 No Merger. It is the desire and intention of the parties hereto that this
Mortgage and the lien hereof shall not merge in fee simple title to the
Property.

 

 

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4.18 Rights With Respect to Junior Encumbrances. Any person or entity purporting
to have or to take a junior mortgage or other lien upon the Property or any
interest therein shall be subject to the rights of Lender to amend, modify,
increase, vary, alter or supplement this Mortgage, the Note or any of the other
Loan Documents, to extend the Maturity Date, to increase the amount of the
indebtedness secured hereby, to waive or forebear the exercise of any of its
rights and remedies hereunder or under any of the other Loan Documents and to
release any collateral or security for the indebtedness secured hereby, in each
and every case without obtaining the consent of the holder of such junior lien
and without the lien or security interest of this Mortgage losing its priority
over the rights of any such junior lien.
4.19 Lender May File Proofs of Claim. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting Borrower or the principals, members or general
partners in Borrower, or their respective creditors or property, Lender, to the
extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of
Lender allowed in such proceedings for the entire secured indebtedness at the
date of the institution of such proceedings and for any additional amount which
may become due and payable by Borrower hereunder after such date.
4.20 After-Acquired Property. All property acquired by Borrower after the date
of this Mortgage which by the terms of this Mortgage shall be subject to the
lien and the security interest created hereby, shall immediately upon the
acquisition thereof by Borrower and without further mortgage, deed, conveyance
or assignment become subject to the lien and security interest created by this
Mortgage.
4.21 No Representation. By accepting delivery of any item required to be
observed, performed or fulfilled or to be given to Lender pursuant to the Loan
Documents, including, but not limited to, any officer’s certificate, balance
sheet, statement of profit and loss or other financial statement, survey,
appraisal or insurance policy, Lender shall not be deemed to have warranted,
consented to, or affirmed the sufficiency, legality, effectiveness or legal
effect of the same, or of any term, provision or condition thereof, and such
acceptance of delivery thereof shall not be or constitute any warranty, consent
or affirmation with respect thereto by Lender.
4.22 Duplicate Originals; Counterparts. This Mortgage may be executed in any
number of duplicate originals and each duplicate original shall be deemed to be
an original. This Mortgage may be executed in any number of counterparts, each
of which shall be effective only upon delivery and thereafter shall be deemed an
original, and all of which shall constitute a single instrument, for the same
effect as if all parties hereto had signed the same signature page. Any
signature page of this Mortgage may be detached from any counterpart of this
Mortgage without impairing the legal effect of any signatures thereon and may be
attached to another counterpart of this Mortgage identical in form hereto but
having attached to it one or more additional signature pages. The failure of any
party hereto to execute this Mortgage, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder.
4.23 [Intentionally omitted].
4.24 Recording and Filing. Borrower will cause the Loan Documents and all
amendments and supplements thereto and substitutions therefor to be recorded,
filed, re-recorded and re-filed in such manner and in such places as Lender
shall reasonably request, and will pay on demand all such recording, filing,
re-recording and re-filing taxes, fees and other charges. Borrower shall
reimburse Lender, or its servicing agent, for the costs incurred in obtaining a
tax service company to verify the status of payment of taxes and assessments on
the Property.
4.25 Entire Agreement and Modifications. This Mortgage and the other Loan
Documents contain the entire agreements between the parties and supersede any
prior agreements (oral or written), and may not be amended, revised, waived,
discharged, released or terminated orally but only by a written instrument or
instruments executed by the party against which enforcement of the amendment,
revision, waiver, discharge, release or termination is asserted.

 

 

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4.26 Maximum Interest. The provisions of this Mortgage and of all agreements
between Borrower and Lender, whether now existing or hereafter arising and
whether written or oral, are hereby expressly limited so that in no contingency
or event whatsoever, whether by reason of demand or acceleration of the maturity
of the Note or otherwise, shall the amount paid, or agreed to be paid
(“Interest”) to Lender for the use, forbearance, retention or detention of the
money loaned under the Note exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, performance or fulfillment
of any provision hereof or of any agreement between Borrower and Lender shall,
at the time performance or fulfillment of such provision shall be due, exceed
the limit for Interest prescribed by law or otherwise transcend the limit of
validity prescribed by applicable law, then ipso facto the obligation to be
performed or fulfilled shall be reduced to such limit, and if, from any
circumstance whatsoever, Lender shall ever receive anything of value deemed
Interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive Interest shall be applied to the reduction of the
principal balance owing under the Note in the inverse order of its maturity
(whether or not then due) or at the option of Lender be paid over to Borrower,
and not to the payment of Interest. All Interest (including any amounts or
payments judicially or otherwise under law deemed to be Interest) contracted
for, charged, taken, reserved, paid or agreed to be paid to Lender shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of the Note, including any extensions and renewals
thereof until payment in full of the principal balance of the Note so that the
Interest thereon for such full term will not at any time exceed the maximum
amount permitted by applicable law. This Section will control all agreements
between Borrower and Lender.
4.27 Application of Default Interest Rate Not a Waiver. Application of the
default rate of interest under the Note shall not be deemed to constitute a
waiver of any Event of Default or any rights or remedies of Lender under this
Mortgage, any other Loan Document or applicable legal requirements, or a consent
to any extension of time for the payment or performance of any obligation with
respect to which the default rate of interest under the Note may be invoked.
4.28 [intentionally omitted].
4.29 [intentionally omitted].
4.30 [intentionally omitted].
4.31 Fixture Filing. This Mortgage shall be effective from the date of its
recording as a financing statement filed as a fixture filing with respect to all
goods constituting part of the Property which are or are to become fixtures. The
mailing address of Borrower and the address of Lender from which information
concerning the security interests may be obtained are set forth in Section 1.22
above.

 

 

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ARTICLE V
STATE SPECIFIC PROVISIONS
5.1 Inconsistencies. In the event of any inconsistencies between the terms and
conditions of this Article V and the other provisions of this Mortgage, the
terms and conditions of this Article V shall control.
5.2 Certain Matters Relating to the Property. With respect to the Property,
notwithstanding anything contained herein to the contrary:
(a) Lender shall have all the rights, benefits and privileges set forth in this
Mortgage subject to the provisions of MCL 554.231, MCL 554.211 et seq. and MCL
565.81 et seq. It is the intention of the parties that the provisions of this
Mortgage, and all of the rights and powers granted or reserved to Lender
hereunder, shall be construed and enforced to the broadest extent permissible
under applicable Michigan law governing assignments of leases and rents
including, without limitation, MCL 554.231 et seq. Any provision contained
herein which would, as drafted, violate any provision of, or be in any respect
unenforceable under, Michigan law shall be automatically deemed to be modified
to the extent necessary, consistent with its purpose, to render such provision
enforceable under Michigan law. Borrower hereby absolutely and unconditionally
assigns and transfers to Lender all of the Leases and Rents. Lender shall be
entitled to all of the rights and benefits conferred by Act No. 210 of the
Michigan Public Acts of 1953, as amended by Act No. 151 of the Michigan Public
Acts of 1966 (MCLA 554.231, et seq.) and Act No. 228 of the Michigan Public Acts
of 1925, as amended by Act. No. 55 of the Michigan Public Acts of 1933 (MCLA
554.211, et seq.). The collection of Rents by Lender shall in no way waive the
right of Lender to foreclosure this Mortgage upon the occurrence of an Event of
Default. The assignment of Leases and Rents herein shall run with the land and
be good and valid against Borrower or those claiming by, under or through
Borrower, from the date of recording of this Mortgage. This assignment shall
continue to be operative during foreclosure or any other proceedings taken to
enforce this Mortgage. In the event of a sale or foreclosure which shall result
in a deficiency, the assignment of Leases and Rents shall stand as security
during the redemption period for the payment of such deficiency. This assignment
shall not be construed as obligating Lender to perform any of the covenants or
undertakings required to be performed by Borrower under any such assigned Lease.
It is further the intent of Borrower and Lender that the Rents hereby absolutely
assigned are no longer, during the term of this Mortgage, property of Borrower
or property of any estate of Borrower as defined in Section 541 of the
Bankruptcy Code and shall not constitute collateral, cash or otherwise, of
Borrower. The term “Rents” as used herein shall mean the gross rents without
deduction or offsets of any kind.
(i) Notice of Absolute Assignment. BORROWER ACKNOWLEDGES AND AGREES THAT THE
ASSIGNMENT OF RENTS TO LENDER UNDER THIS MORTGAGE IS AND IS INTENDED TO BE AN
ABSOLUTE PRESENT ASSIGNMENT OF RENTS PURSUANT TO MCLA 554.231 ET SEQ., MCLA
565.81 ET SEQ., AND TO THE EXTENT APPLICABLE MCLA 554.211 ET SEQ. As such, upon
the occurrence of an Event of Default and after any applicable cure periods, if
any, and without any action by Lender, Borrower shall have no further right to
collect or otherwise receive such Rents, which will be the absolute and sole
property of Lender pursuant to those statutes.
(ii) Waiver of Notice of Exercise. BORROWER HEREBY WAIVES ANY RIGHT TO NOTICE,
OTHER THAN SUCH NOTICE AS MAY BE PROVIDED IN ACT 210 OF THE PUBLIC ACTS OF
MICHIGAN OF 1953 AND ACT 66 OF THE PUBLIC ACTS OF MICHIGAN OF 1956, EACH AS
AMENDED OR SUPERSEDED, AND WAIVES ANY RIGHT TO ANY HEARING, JUDICIAL OR
OTHERWISE, PRIOR TO LENDER’S EXERCISE OF ITS RIGHTS UNDER THIS MORTGAGE AND/OR
THE ASSIGNMENT WITH RESPECT TO THE ASSIGNMENT OF RENTS GRANTED TO LENDER
HEREUNDER OR UNDER THE SEPARATE ASSIGNMENT OF LEASES AND RENTS GRANTED TO LENDER
IN CONNECTION WITH THIS MORTGAGE EXCEPT AS PROVIDED HEREIN.

 

 

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(b) THIS MORTGAGE IS A “FUTURE ADVANCE MORTGAGE” PURSUANT TO MCL 565.901. ALL
FUTURE ADVANCES UNDER THIS MORTGAGE OR UNDER ANY OF THE LOAN DOCUMENTS SHALL
HAVE THE SAME PRIORITY AS IF THE FUTURE ADVANCE WAS MADE ON THE DATE THAT THIS
MORTGAGE WAS RECORDED. THIS MORTGAGE SHALL SECURE ALL INDEBTEDNESS OF BORROWER,
ITS SUCCESSORS AND ASSIGNS, UNDER THIS MORTGAGE, WHENEVER AND HOWEVER INCURRED.
NOTICE IS HEREBY GIVEN THAT THE INDEBTEDNESS SECURED HEREBY MAY INCREASE AS A
RESULT OF ANY EVENT OF DEFAULT BY BORROWER DUE TO, FOR EXAMPLE AND WITHOUT
LIMITATION, UNPAID INTEREST OR LATE CHARGES, UNPAID TAXES OR UNPAID INSURANCE
PREMIUMS WHICH LENDER ELECTS TO ADVANCE PURSUANT TO THE TERMS OF THIS MORTGAGE,
DEFAULTS UNDER LEASES THAT LENDER ELECTS TO CURE, ATTORNEYS’ FEES OR COSTS
INCURRED IN ENFORCING THE LOAN DOCUMENTS OR OTHER EXPENSES INCURRED BY LENDER IN
PROTECTING THE PREMISES, THE SECURITY OF THIS MORTGAGE OR LENDER’S RIGHTS AND
INTERESTS.
(c) In the Event of Default, power is granted to Lender to sell the Property or
any part thereof at public auction and to convey same to the purchaser after
notice as required by the statutes of the State of Michigan for foreclosure of
mortgages by advertisement being Sections 600.3201, et seq., Michigan Compiled
Laws, as amended.
(d) This Mortgage contains a power of sale which permits Lender to cause the
Property to be sold by advertisement rather than pursuant to court action; and
Borrower hereby voluntarily and knowingly waives any right Borrower may have by
virtue of any applicable constitutional provision or statute to any notice or
court hearing prior to the exercise of the power of sale, except as may be
expressly required by the Michigan statute governing foreclosures by
advertisement. By execution of the Mortgage, Borrower represents and
acknowledges that the meaning and the consequences of the foregoing have been
discussed as fully as desired by Borrower with Borrower’s legal counsel.
(e) As additional security for the secured indebtedness and performance of the
covenants and agreements herein and in any other agreement contained, pursuant
to Michigan Compiled Laws 554.231 et seq., as amended, Borrower hereby assigns
and conveys to Lender and grants Lender security interests in any and all
leases, written or unwritten, of the Property or any part thereof, heretofore,
now or hereafter entered into and demising any part of the Property, and all
rents, issues, income and profits derived from the use of the Property or any
portion thereof, whether due or to become due.
(f) Borrower’s failure, refusal or neglect to pay any taxes levied against the
Property or any insurance premiums due upon policies of insurance covering the
Property, shall constitute waste under Michigan Compiled Laws 600.2927, and
Lender shall have a right to appointment of a receiver of the Property and of
the earnings, income and profits thereof, with such powers as the court making
such appointment confers, and Borrower hereby irrevocably consents to such
appointment in such event, and agrees to pay Lender’s costs and expenses
incurred in such proceeding, including reasonable attorneys’ fees. Payment by
Lender for and on behalf of Borrower of any delinquent taxes, assessments, or
insurance premiums payable by Borrower under the terms of this Mortgage shall
not cure the Event of Default herein described, nor shall it in any manner
impair Lender’s right to the appointment of a receiver as set forth herein.

 

 

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(g) Waste: Failure of the Borrower to pay any taxes, assessments or governmental
charges levied or assessed against the Property, or any part thereof, or any
installment of any such tax, assessment or charge, or any premium upon any such
tax, assessment or charge, or any premium upon any policy of insurance covering
any part of the Property, at the time or times such taxes, assessments, charges,
installments thereof or insurance premiums are due and payable, shall constitute
waste, and in accordance with the provisions of Act No. 236 of the Public Acts
of Michigan for 1961, as amended, shall entitle Lender to exercise the remedies
afforded by applicable law. Payment by the Lender for and on behalf of the
Borrower of any such delinquent tax or insurance premium properly payable by
Borrower under the terms of this Mortgage, shall not cure the default herein
described nor shall it in any manner impair the Lender’s right to the
appointment of a receiver on account thereof. Upon the happening of any such
acts of waste and on proper application made therefore by Lender to a court of
competent jurisdiction, the Lender shall forthwith be entitled to the
appointment of a receiver of the Property hereby mortgaged and of the earnings,
income, issues and profits thereof, with such powers as the court making such
appointment shall confer; the Borrower hereby irrevocably consents to such
appointment and waives notice of any application therefore.
(h) Power of Sale; Waiver. WARNING: THIS MORTGAGE CONTAINS A POWER OF SALE AND,
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, MAY BE FORECLOSED BY ADVERTISEMENT
UNDER THE PROVISIONS OF MCLA 600.3201 (OR ANY SUCCESSOR PROVISION). IN
FORECLOSURE BY ADVERTISEMENT, NO HEARING IS INVOLVED AND THE ONLY NOTICE
REQUIRED IS PUBLICATION OF NOTICE IN A LOCAL NEWSPAPER AND POSTING OF A COPY OF
THE NOTICE ON THE MORTGAGED ESTATE. IF THIS MORTGAGE IS FORECLOSED BY
ADVERTISEMENT, BORROWER HEREBY VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY WAIVES
ALL RIGHTS UNDER THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA AND
THE STATE OF MICHIGAN IN CONNECTION WITH SAID FORECLOSURE BY ADVERTISEMENT TO:
(A) ALL NOTICES OF SALE OR ANY NOTICES OF A HEARING IN CONNECTION WITH THE ABOVE
MENTIONED FORECLOSURE BY ADVERTISEMENT, EXCEPT AS SET FORTH IN THE MICHIGAN
STATUTE PROVIDING FOR FORECLOSURE BY ADVERTISEMENT; (B) A HEARING PRIOR TO SALE;
OR (C) ANY OTHER RIGHT BORROWER MAY HAVE TO REQUIRE A JUDICIAL FORECLOSURE. If
Lender shall elect to foreclose this Mortgage by advertisement, Lender may
institute a proceeding to sell the Property pursuant to the power of sale
granted hereunder at such time, place and in such manner as may be prescribed by
applicable law, the proceeds of such sale shall be applied first, to the costs
and expenses incurred by Lender in conducting such sale; second, to the costs
and expenses of Lender in enforcing its rights and remedies under the Loan
Documents; third to payment of all indebtedness secured hereby and all interest
accrued thereon; and fourth, the remainder, if any, shall be paid to Borrower or
to whomever shall be entitled thereto.
(i) Rents/Profits.
(i) As additional security for the payment of the indebtedness secured hereby,
insurance premiums, taxes and assessments, at the time and in the manner herein
agreed, and for the performance of the covenants and agreements herein
contained, pursuant to Act 210 of the Public Acts of Michigan of 1953, as
amended, the Borrower does hereby sell, assign, transfer and set over unto the
Lender herein, its successors and assigns, all the rents, profits and income
under any lease or leases of the Property (including any extensions, amendments
or renewals thereof), whether due or to become due, including all such leases in
existence or coming into existence during the period this Mortgage is in effect.
This assignment of rents shall run with the land and be good and valid as
against the Borrower herein or those claiming by, under or through the Borrower,
from the date of the recording of this instrument. This assignment shall
continue to be operative during the foreclosure or any other proceedings taken
to enforce this Mortgage. In the event of a sale or foreclosure which shall
result in a deficiency, this assignment shall stand as security during the
redemption period for the payment of such deficiency. This assignment is given
as collateral security only and shall not be construed as obligating Lender to
perform any of the covenants or undertakings required to be performed by
Borrower contained in any such assigned leases.
(ii) In the event that the Borrower fails, refuses or neglects to deliver or
surrender such possession, the Lender shall be entitled to the appointment of a
receiver of the Property hereby mortgaged and of the earnings, income, issue and
profits thereof, with such powers as the court making such appointment may
confer.

 

 

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(iii) Borrower agrees to execute and deliver to Lender assignments of rents on
all future leases on the mortgaged Property during the term of this Mortgage,
such assignments to be in the form and manner satisfactory to Lender. Any
default by the Borrower under the terms and/or conditions of any such assignment
shall constitute an Event of Default under the terms and conditions of this
Mortgage, entitling the Lender to exercise any and all of the rights and
remedies provided by this Mortgage. If the Borrower shall fail to perform and
discharge any of the obligations, covenants and agreements required to be
performed by it under any such assignment of lease, the Lender may elect to
perform the same; any sums which may be so paid out by the Lender, including the
cost, expenses and attorneys’ fees paid out in any suit affecting the same,
shall bear interest at the default rate provided in the Notes, from the dates of
such payments, shall be paid by Borrower to Lender upon demand and shall be
deemed a part of the indebtedness secured hereby and recoverable as such in all
respects. Borrower shall assign to the Lender, upon request, as further security
for the Indebtedness secured hereby, the Borrower’s interest in all agreements,
contracts, licenses and permits affecting the Property, such assignments to be
made by instruments in form satisfactory to the Lender; but no such assignment
shall be construed as a consent by the Lender to any agreement, contract,
license or permit so assigned, or to impose upon the Lender any obligations with
respect thereto.
(iv) The provisions of this Section 5.2(i) are not intended to evidence an
additional recordable event, as may be prohibited by Act 459 of the Public Acts
of Michigan of 1996, but rather are included in this Mortgage for purposes of
complying with applicable requirements of Act 210 of the Public Acts of Michigan
of 1953, as amended.
(j) IN ANY SALE OF THE PROPRTY MADE PURSUANT TO THIS MORTGAGE, LENDER, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, MAY ELECT TO DEEM ALL OF THE PROPERTY
COVERED BY THIS MORTGAGED TO BE REAL PROPERTY FOR PURPOSES THEREOF.
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IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has duly
executed this Mortgage to be effective as of the date set forth in the first
paragraph hereof.

                                  BORROWER:    
 
                                WOODARD-CM, LLC,             a Delaware limited
liability company    
 
                                By:   Craftmade International, Inc.,            
    a Delaware corporation,                 its sole member    
 
                                    By:   /s/ C. Brett Burford                  
       
 
              Name:   C. Brett Burford    
 
              Title:   Secretary and Chief Financial Officer