Document:

Ex-10.2 Second Amended Mortgage Agreeement

 

EXHIBIT 10.2

Prepared by and return to:

Jeffrey C. Shannon

Fowler White Boggs Banker P.A.

501 East Kennedy Blvd., Suite 1700

Tampa, Florida 33602

SECOND AMENDED AND RESTATED

MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

Dated as of November 1, 2004

From

SADDLEBROOK RESORTS, INC.,

a Florida corporation

5700 Saddlebrook Way

Wesley Chapel, Florida 33543

to

SUNTRUST BANK,

A Georgia banking corporation

401 East Jackson Street, Commercial Banking — 20th Floor

Tampa, Florida 33602

This document amends and restates that certain Mortgage and Security Agreement
dated November 15, 1988, between Borrower, as Mortgagor, and
BarclaysAmerican/Business Credit, Inc., as Mortgagee, recorded on November 15,
1988, in Official Records Book 1758, at Page 399; as assigned to NationsBank,
N.A. by Assignment of Mortgage recorded July 19, 1993, in Official Records Book
3174, at Page 1270; as modified by (i) First Modification recorded July 31,
1989, in Official Records Book 1828, at Page 21, (ii) Second Modification
recorded July 19, 1993, in Official Records Book 3174, at Page 1296; (iii)
Notice of Future Advance and Third Modification Agreement recorded August 19,
1994, in Official Records Book 3330, at Page 1231; (iv) Notice of Future
Advance, Renewal, Consolidation and Fourth Mortgage Modification Agreement
recorded June 27, 1995, in Official Records Book 3442, at Page 1076; (v) Fifth
Mortgage Modification and Extension Agreement recorded September 14, 1995, in
Official Records book 3473, Page 1421; (vi) Notice of Future Advance,
Consolidation and Sixth Mortgage Modification Agreement recorded February 23,
1996, in Official Records Book 3536, at Page 713; and (vii) Seventh
Modification recorded December 20, 1996, in Official Records Book 3674, at Page
791; as assigned to Textron Financial Corporation by Assignment of Note.
Mortgage and Other Loan Documents recorded June 30, 1998, in Official Records
Book 3960, at Page 1422; and as amended and restated by that certain Amended
and Restated Mortgage, Security Agreement, and Fixture Filing, dated June 29,
1998, executed by Borrower in favor of Assignor, and recorded June 30, 1998,
in Official Records Book 3960, at Page 1436, as assigned to Mortgagor by that
certain Assignment of Note, Mortgage and Other Loan Documents of even date
herewith between Textron Financial Corporation and Mortgagor (all references to
the Public Records of Pasco County, Florida) (collectively, the
“Mortgage”).
All applicable documentary stamp taxes and intangible taxes have been paid on
the Mortgage. As the outstanding balance of the obligations secured by the
Mortgage has not been increased, no additional obligor has been added to the
obligations secured by the Mortgage, and the obligations secured by the
Mortgage have not been assumed by another person or entity, no additional documentary
stamp taxes or non-recurring intangibles taxes are payable in connection with
the recording of this document.

 

SECOND AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

     THIS SECOND AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT AND FIXTURE
FILING is dated as of November 1, 2004 (together with any extensions, renewals,
amendments, modifications or replacements, being referred to herein as the
“Mortgage”), by and between SADDLEBROOK RESORTS, INC., a Florida corporation,
whose address is 5700 Saddlebrook Way, Wesley Chapel, Florida 33543, as the
Mortgagor (hereinafter called the “Borrower”), and SUNTRUST BANK, a Georgia
banking corporation, having an office at 401 East Jackson Street, Commercial
Banking — 20th Floor, Tampa, Florida 33602, as the Mortgagee (hereinafter
called “Lender”).

     This Mortgage is made, executed and delivered under the following
circumstances:

     A. Borrower is indebted to Lender in the principal sum of up to Seventeen
Million and No/100ths Dollars (U.S. $17,000,000.00) (the “Loan”), together with
interest thereon, as evidenced by that certain Loan Agreement (the “Loan
Agreement”) of even date herewith, that certain Promissory Note of even date
herewith from Borrower to Lender in the amount of Twelve Million and No/100ths
Dollars (U.S. $12,000,000.00) and that certain Revolving Line of Credit
Promissory Note of even date herewith from Borrower to Lender in the amount of
Five Million and No/100ths Dollars (U.S. $5,000,000.00) (collectively, the
“Notes”).

     B. Borrower is the owner of fee simple title to certain lands located in
Pasco County, Florida, more particularly described in Exhibit “A” attached
hereto and made a part hereof (the “Land”), on which Land Borrower plans
certain improvements.

     C. To induce Lender to make the Loan, and to secure payment of the Notes
and other obligations described below, Borrower has agreed to execute and
deliver this Mortgage.

     NOW, THEREFORE, to secure to Lender (i) the repayment of all sums due
under this Mortgage, the Notes, the Loan Agreement and all other loan
documents, including any Financial Contracts, now or hereafter made in
connection with the Loan, and all extensions, renewals, replacements and
amendments thereof, the term “Financial Contract” as used herein to mean (1) an
agreement (including terms and conditions incorporated by reference therein)
which is a rate swap agreement, basis swap, forward rate agreement, commodity
swap, commodity option, equity or equity index swap, bond option, interest rate
option, foreign exchange agreement, rate cap agreement, rate floor agreement,
rate collar agreement, currency swap agreement, cross-currency rate swap
agreement, currency option, any other similar agreement (including any option
to enter into any of the foregoing); (2) any combination of the foregoing; or
(3) a master agreement for any of the foregoing together with all supplements
(all of the aforementioned documents in this subsection (i) being,
collectively, the “Loan Documents”), (ii) the performance of all terms,
conditions and covenants set forth in Loan Documents; (iii) the repayment of
all reimbursement obligations due or that may become due under or in connection
with any present or future letters of credit issued by Lender for the account
of Borrower; and (iv) all other obligations or indebtedness of Borrower to
Lender of

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whatever kind or character and whenever borrowed or incurred, including
without limitation, principal, interest, fees, late charges and expenses,
including attorneys’ fees (subsections (i), (ii), (iii) and (iv) above
collectively constituting the “Liabilities” hereunder), Borrower has mortgaged,
granted and conveyed, and by these presents does hereby mortgage, grant and
convey, to Lender and its successors and assigns all of Borrower’s right, title
and interest now owned or hereafter acquired in and to each of the following
(collectively, the “Property” or the “Mortgaged Property”):

     (A) The “Real Estate”, which term includes the Land (as defined above) as
well as the Improvements and Appurtenances (as those terms are defined in this
Mortgage, below);

     (B) Any and all buildings and improvements now or hereafter erected on the
Real Estate (the “Improvements”), which Improvements shall be deemed included
in the term “Real Estate”;

     (C) Any and all fixtures, machinery, equipment and other articles of real,
personal or mixed property, belonging to Borrower, at any time now or hereafter
installed in, attached to or situated in or upon the Real Estate, or the
buildings and improvements now or hereafter erected thereon, or used or
intended to be used in connection with the Real Estate, or in the operation of
the buildings and improvements, plant, business or dwelling situate thereon,
whether or not such real, personal or mixed property is or shall be affixed
thereto, and all replacements, substitutions and proceeds of the foregoing (all
of the foregoing herein called the “Service Equipment”), including without
limitation: (i) all appliances, furniture and furnishings; all articles of
interior decoration, floor, wall and window coverings; all office, restaurant,
bar, kitchen and laundry fixtures, utensils, appliances and equipment; all
supplies, tools and accessories; all storm and screen windows, shutters, doors,
decorations, awnings, shades, blinds, signs, trees, shrubbery and other
plantings; (ii) all building service fixtures, machinery and equipment of any
kind whatsoever; all lighting, heating, ventilating, air conditioning,
refrigerating, sprinkling, plumbing, security, irrigating, cleaning,
incinerating, waste disposal, communications, alarm, fire prevention and
extinguishing systems, fixtures, apparatus, machinery and equipment; all
elevators, escalators, lifts, cranes, hoists and platforms; all pipes,
conduits, pumps, boilers, tanks, motors, engines, furnaces and compressors; all
dynamos, transformers and generators; (iii) all building materials, building
machinery and building equipment delivered on site to the Real Estate during
the course of, or in connection with any construction or repair or renovation
of the buildings and improvements; (iv) all parts, fittings, accessories,
accessions, substitutions and replacements therefor and thereof; and (v) all
files, books, ledgers, reports and records relating to any of the foregoing;

     (D) Any and all leases (including the Tenant Leases (as defined in the
Loan Agreement)), subleases, tenancies, licenses, occupancy agreements or
agreements to lease all or any portion of the Real Estate, Improvements,
Service Equipment or all or any other portion of the Property and all
extensions, renewals, amendments, modifications and replacements thereof, and
any options, rights of first refusal or guarantees relating thereto
(collectively, the “Leases”);

     (E) all rents, income, receipts, revenues, security deposits, escrow
accounts, reserves, issues, profits, awards and payments of any kind payable
under the Leases or otherwise arising

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from the Real Estate, Improvements, Service Equipment or all or any other
portion of the Property including, without limitation, the Tenant Income (as
defined in the Loan Agreement, and any and all minimum rents, additional rents,
percentage rents, parking, maintenance and deficiency rents (collectively, the
“Rents”);

     (F) all of the following property (collectively, the “Contracts”): all
accounts, general intangibles and contract rights (including any right to
payment thereunder, whether or not earned by performance) of any nature
relating to the Real Estate, Improvements, Service Equipment or all or any
other portion of the Property or the use, occupancy, maintenance, construction,
repair or operation thereof; all management agreements, franchise agreements,
utility agreements and deposits, building service contracts, maintenance
contracts, construction contracts and architect’s agreements; all maps, plans,
surveys and specifications; all warranties and guaranties; all permits,
licenses and approvals; and all insurance policies, books of account and other
documents, of whatever kind or character, relating to the use, construction
upon, occupancy, leasing, sale or operation of the Real Estate, Improvements,
Service Equipment or all or any other portion of the Property, including all
Property Contracts (as defined in the Loan Agreement);

     (G) Any and all estates, rights, tenements, hereditaments, privileges,
licenses, easements, reversions, accessions, remainders and appurtenances of
any kind benefiting or appurtenant to the Real Estate, Improvements or all or
any other portion of the Property; all means of access to and from the Real
Estate, Improvements or all or any other portion of the Property, whether
public or private; all streets, alleys, passages, ways, water courses, water
and mineral rights relating to the Real Estate, Improvements or all or any
other portion of the Property; all rights of Borrower as declarant or unit
owner under any declaration of condominium or association applicable to the
Real Estate, Improvements or all or any other portion of the Property
including, without limitation, all development rights and special declarant
rights; and all other claims or demands of Borrower, either at law or in
equity, in possession or expectancy of, in, or to the Real Estate, Improvements
or all or any other portion of the Property (collectively, the
“Appurtenances”); and,

     (H) Any and all proceeds of any of the above-described Real Estate,
Improvements, Service Equipment, Leases, Rents, Contracts and Appurtenances,
which term “proceeds” shall have the meaning given to it in the Florida Uniform
Commercial Code, as amended, (the “Code”) and collectively constitute the
“Proceeds” herein, and shall additionally include whatever sums of money and
other things of value received or receivable by Borrower upon the use, lease,
sale, exchange, transfer, collection or other utilization or any disposition or
conversion of any of the Real Estate, Improvements, Service Equipment, Leases,
Rents, Contracts and Appurtenances, voluntary or involuntary, whether cash or
non-cash, including proceeds of insurance and condemnation awards, rental or
lease payments, accounts, chattel paper, instruments, documents, contract
rights, general intangibles, equipment and inventory.

     TO HAVE AND TO HOLD the foregoing Property to the proper use and benefit
of Lender and its successors and assigns.

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     PROVIDED ALWAYS, that if all the Liabilities are paid in full, and each
and every representation, warranty, agreement and covenant of this Mortgage and
the other Loan Documents are complied with and abided by, then this Mortgage
and the estate hereby created shall cease and terminate, and be canceled by
Lender of record.

     In furtherance of the foregoing, Borrower covenants and agrees with, and
represents to, Lender as follows:

SECTION 1.

FUTURE ADVANCES; PROTECTION OF PROPERTY.

     1.1 This Mortgage shall secure the Liabilities (as defined above), and any
and all present or future advances and readvances on account of the Liabilities
or any of same, all as made by Lender to or for the benefit of Borrower or the
Property within twenty (20) years from the date hereof (whether such advances
are obligatory or are made at the option of Bank or otherwise), including,
without limitation: (i) principal, interest, late charges, fees and other
amounts due on account of the Liabilities or this Mortgage; (ii) all advances
by Lender to Borrower or any other person to pay costs of erection,
construction, alteration, repair, restoration, maintenance and completion of
any improvements on the Property; (iii) all advances made or costs incurred by
Lender for the payment of real estate taxes, assessments or other governmental
charges, maintenance charges, insurance premiums, environmental inspection,
audit, testing or compliance costs, and costs incurred by Lender for the
enforcement and protection of the Property or the lien of this Mortgage; and
(iv) all legal fees, costs and other expenses incurred by Lender by reason of
any default or otherwise in connection with the Liabilities. The total amount
of the Liabilities that may be so secured may decrease to a zero amount from
time to time, or may increase from time to time, but the total unpaid principal
balance secured at any one time shall not exceed U.S. $34,000,000.

     1.2 Borrower agrees that if, at any time during the term of this Mortgage
or following a foreclosure hereof (whether before or after the entry of a
judgment of foreclosure), Borrower fails to perform or observe any covenant or
obligation under this Mortgage including, without limitation, payment of any of
the foregoing, Lender may (but shall not be obligated to) take such steps as
are reasonably necessary to remedy any such nonperformance or nonobservance and
provide payment thereof. All amounts advanced by Lender shall be added to the
amount secured by this Mortgage and the other Loan Documents (and, if advanced
after the entry of a judgment of foreclosure, by such judgment of foreclosure),
and shall be due and payable on demand, together with interest at the Default
Rate set forth in the Notes, such interest to be calculated from the date of
such advance to the date of repayment thereof.

SECTION 2.

BORROWER’S REPRESENTATIONS, WARRANTIES AND COVENANTS.

     2.1. Payment and Performance. Borrower shall (a) pay to Lender all sums
required to be paid by Borrower under and in accordance with the stated terms
and conditions of the Loan Documents; (b) perform and comply with all terms,
conditions and covenants set forth in each of the Loan Documents applicable to
Borrower; (c) perform and comply with all of Borrower’s

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obligations and duties as landlord under any Leases; and, (d) take all
reasonable measures as may be required from time to time to maintain the value
of the Property as security to Lender.

     2.2. Title Warranties. Borrower hereby warrants that (a) Borrower is the
sole owner of the Property in fee simple; (b) Borrower has the right, full
power and lawful authority to mortgage, grant, convey and assign the same to
Lender in the manner and form set forth herein; and (c) this Mortgage is a
valid and enforceable first lien on Borrower’s right, title and interest in the
Property and every part thereof.

     Borrower hereby covenants that (a) Borrower shall preserve its title to or
interest in the Property, and the validity and priority of the lien of this
Mortgage, subject only to such title exceptions regarding the Real Estate as
are reflected in Lender’s title insurance policy for the Loan, contrary
provisions of the Loan Documents, if any, as to specific parts of the Property,
and as Lender may in its sole discretion otherwise approve in writing during
the term of this Mortgage, and Borrower shall forever warrant and defend the
same to Lender against all claims whatsoever; and (b) Borrower shall execute,
acknowledge and deliver all such further documents or assurances as may at any
time hereafter be required by Lender to protect the lien of this Mortgage.

     2.3. Insurance.

     Besides title insurance, Borrower shall obtain and maintain at all times
throughout the term of this Mortgage the following insurance, with changes in
the name and other particulars related to the specific Lender at any given time
as such Lender shall require by notice to Borrower upon sale, assignment or
other transfer of this Mortgage:

     a. Hazard Insurance, in an amount not less than the Loan amount, with a
“New York Standard” or “Union” mortgagee clause naming SunTrust Bank, its
successors and/or assigns as Mortgagee/additional loss payee.

     b. Flood Insurance: It must be satisfactorily shown that the property is
not in a flood zone or, if it is, a flood insurance policy, or a completed
flood insurance application with a paid receipt for one year’s premium, must be
provided to Lender prior to the Loan closing. Flood insurance coverage must be
in an amount equal to the lesser of the loan amount or the maximum limit
available from all sources, naming SunTrust Bank, its successors and/or assigns
as mortgagee/additional loss payee. Certificate of Insurance should be sent to
SunTrust Bank, P.O. Box 3303, Mail Code 4204, Tampa, Florida 33601 (attn:
Commercial Banking Division) for the benefit of SunTrust Bank, its successors
and/or assigns.

     c. Worker’s Compensation Insurance meeting applicable legal
requirements.

     d. Public Liability Insurance with minimum limits as follows:

     $5,000,000.00, Bodily injury, one occurrence.

     $5,000,000.00, Property damage, one occurrence.

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     This insurance shall not be prejudiced, nor coverage to the
mortgagee invalidated:

     (i) by any act or neglect of the owner of any building if the
insured is not the owner thereof, or by any act or neglect of any
occupant (other than the insured) of any building, when such act or
neglect of the owner or occupant is not within the control of the
insured; or

     (ii) by failure of the insured to comply with any warranty or
condition contained in any endorsement attached to this policy with
regard to any portion of the premises over which the insured has no
control.

     e. Business Interruption Insurance in such amounts as may be required by
Mortgagee from time to time.

     f. Tees and Greens Insurance with minimum coverage of $20,000.00 per
golfing green located on the Real Estate.

     Each insurance policy required under this Section shall: (i) be written by
an insurance company authorized or licensed to do business in the state within
which the Property is located having an Alfred M. Best Company, Inc. rating of
“A-” or higher and a financial size category of not less than IX; (ii) be for
terms of a least one year, with premium prepaid and receipts thereof provided
to Lender upon request; (iii) be subject to the reasonable approval of Lender
as to insurance companies, amounts, content, forms of policies and expiration
dates; and (iv) name Lender, its successors and assigns: (1) as an additional
insured under all liability insurance policies, and (2) as the first Lender,
under a standard non-contributory Lender clause, on all property insurance
policies and all loss of rents or loss of business income insurance policies.

     Borrower further agrees that each insurance policy: (i) shall provide at
least thirty (30) days’ prior written notice to Lender prior to any policy
reduction or cancellation for any reason; (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; (iii) shall waive
all rights of setoff, counterclaim, deduction or subrogation against Borrower;
and (iv) shall exclude Lender from the operation of any coinsurance clause.

     At least thirty (30) days prior to the expiration of any insurance policy,
Borrower shall furnish evidence satisfactory to Lender that such policy has
been renewed or replaced or is no longer required.

     Notwithstanding the foregoing, in the event that Borrower fails to
maintain insurance in accordance with this Section 2.3., and Lender elects to
obtain insurance to protect its interests hereunder, Lender may obtain
insurance in any amount and of any type Lender deems appropriate to protect
Lender’s interest only and Lender shall have no duty or obligation to Borrower
to maintain insurance in any greater amount or of any other type for the
benefit of Borrower. All insurance premiums incurred or paid by Lender shall
be at Borrower’s sole cost and expense. Lender’s election to obtain insurance
shall not be deemed to waive any Event of Default (as hereinafter defined).

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     2.4. Taxes and Other Charges. Borrower shall promptly pay and discharge
all taxes, assessments, and other governmental charges of whatever nature
imposed upon the making of the Notes or the Mortgage, upon principal advances
against the Notes, and/or upon the Property, when the same are respectively
due, but in no event after interest or penalties commence to accrue thereon or
become a lien upon the Property.

     2.5. Escrows. If required by Lender for reasonable cause at any time
during the term of this Mortgage, Borrower shall pay to Lender at the time of
each installment due under the Notes, commencing with the first installment due
after the date that Lender so requests, sums to establish and maintain escrow
accounts with Lender or its designee to be held in escrow to pay the same when
due for (a) taxes and assessments levied or assessed against the Property,
and/or (b) premiums on the insurance policies required by this Mortgage, all in
amounts as estimated from time to time by Lender to be sufficient to pay such
taxes and assessments and/or premiums as they become due. Lender shall have the
right to require that such escrow items be paid in such a manner as will in
each instance result in Lender or its designee’s having received sufficient
sums to pay the next installment of such taxes, assessments and premiums, as
applicable, one (1) month prior to the date when the same will become due, such
sums. If such escrow funds are not sufficient to pay such taxes and
assessments and/or insurance premiums, as applicable, as the same become due,
Borrower shall pay to Lender, upon request, such additional amounts as Lender
shall estimate to be sufficient to make up any deficiency. No amount paid to
Lender hereunder shall be deemed to be trust funds but may be commingled with
general funds of Lender and no interest shall be payable thereon. Upon the
occurrence of an Event of Default, Lender shall have the right, at its sole
discretion, to apply any amounts so held against the Liabilities.

     2.6. Transfer of Title. Borrower shall not cause or permit any transfer
of the Property or any part thereof, whether voluntarily, involuntarily or by
operation of law, nor shall Borrower enter into any agreement or transaction to
transfer, or accomplish in form or substance a transfer, of the Property. A
“transfer” of the Property includes: (a) the direct or indirect sale, transfer
or conveyance of the Property or any portion thereof or interest therein; (b)
the execution of an installment sale contract or similar instrument affecting
all or any portion of the Property.

     2.7. No Encumbrances. Borrower shall not create or permit to exist any
mortgage, pledge, lien, security interest (including, without limitation, a
purchase money security interest), encumbrance, attachment, levy, or other
judicial process on or against the Property or any part thereof (including,
without limitation, fixtures and other personalty), whether superior or
inferior to the lien of this Mortgage, without the prior written consent of
Lender. If any lien or encumbrance is filed or entered without Borrower’s
consent, Borrower shall have it discharged of record within thirty (30) days
after it is filed or entered.

     2.8. Removal of Fixtures. Borrower shall not remove or permit to be
removed from the Property any fixtures presently or in the future owned by
Borrower as the term “fixtures” is defined by Florida law, unless such fixtures
have been replaced with similar fixtures of equal or greater utility and value.

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     2.9. Maintenance and Repair; Alterations.

     (a) Borrower shall (i) abstain from and not permit the commission of
waste in or about the Property; (ii) keep the Property in good and substantial
repair, working order and condition; (iii) make or cause to be made, as and
when necessary, all repairs and replacements, whether or not insurance proceeds
are available therefor; and (iv) not remove, demolish, materially alter,
discontinue the use of, permit to become vacant or deserted, or otherwise
dispose of all or any part of the Property. All alterations, replacements,
accessions and additions made to or of the Property shall automatically become
a part of the Property and be covered by the lien of this Mortgage.

     (b) Lender, and any persons authorized by Lender, shall have the right,
but not the obligation, to enter upon the Property at any reasonable time to
inspect and photograph its condition and state of repair. In the event any
such inspection reveals, in the sole discretion of Lender, the necessity for
any repair, alteration, replacement, clean-up or maintenance, Borrower shall,
at the discretion of Lender, either: (i) cause such work to be effected
immediately; or (ii) promptly establish a reserve fund with Lender in an amount
determined by Lender for the purpose of effecting such work.

     2.10. Compliance with Laws. Borrower agrees to observe, conform and
comply, and to cause its tenants to observe, conform and comply with all
applicable federal, state, county, municipal and other governmental or
quasi-governmental laws, rules, regulations, ordinances, codes, requirements,
covenants, conditions, orders, licenses, permits, approvals and restrictions,
including without limitation, Environmental Laws (as defined below) and the
Americans with Disabilities Act of 1990 (collectively, the “Legal
Requirements”), now or hereafter affecting all or any part of the Property, its
occupancy or the business or operations now or hereafter conducted thereon,
within such time as required by such Legal Requirements. Borrower represents
and warrants that, except as otherwise disclosed in reports provided by
Borrower to Lender in connection with the Loan, the Property currently is in
substantial compliance with all applicable Legal Requirements.

     Without limiting the foregoing provisions of this Section, Borrower shall
keep and maintain the Property in compliance with, and shall not cause or
permit the Property to be in violation of the Americans with Disabilities Act
of 1990 (“ADA”) and any other federal, state or local laws, regulations,
guidelines, codes or ordinances relating to the accessibility of properties to
persons with disabilities. Borrower warrants that there are no facts,
conditions or circumstances affecting the Property which could result in an
investigation or inquiry by any federal, state or local government authority or
by any person with disabilities with regard to the foregoing. Borrower further
warrants and represents (a) that it will provide Lender with prompt written
notice of: (1) any investigations or inquiry about the Property’s compliance
with the accessibility requirements of the ADA or any other federal, state or
local laws, regulations, guidelines, codes or ordinances relating to the
accessibility of properties to persons with disabilities; (2) the lodging of
any grievance or complaint with or against Borrower, or with any federal, state
or local authority charged with the responsibility of enforcing compliance with
the accessibility requirements of the ADA or any other federal, state or local
laws, regulations, guidelines, codes or ordinances relating to the
accessibility of properties to persons with disabilities; (3) the institution
of any administrative proceeding which

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seeks to enforce compliance by Borrower with the accessibility requirements of
the ADA or any other federal, state or local laws, regulations, guidelines,
codes or ordinances; and (4) the filing of a complaint or charge in a court of
competent jurisdiction regarding an alleged violation of the ADA or of any
other federal, state or local laws, regulations, guidelines, codes and
ordinances regarding accessibility of properties to persons with disabilities;
(b) that any construction, modification, renovation or remodeling of the
Property shall be undertaken and completed in such manner as to ensure that the
Property continues to meet or exceed the requirements of the ADA and any other
federal, state or local laws, regulations, guidelines, codes and ordinances
with regard to accessibility of properties to persons with disabilities; (c)
that Borrower will indemnify and hold Lender harmless from and against, and
immediately pay any and all claims, losses, damages, liabilities, fines,
penalties, charges, administrative and judicial proceedings and orders,
judgments, remedial action requirements, enforcement actions of any kind, and
all costs and expenses incurred in connection therewith (including but not
limited to expenses and attorneys’ fees and legal assistants’ fees including
such fees and expenses in any appellate or bankruptcy proceeding), arising
directly or indirectly, in whole or in part, from any past, present or future
failure of Borrower, its employees, agents, contractors, subcontractors or
other such persons, to comply with the ADA or any other federal, state, or
local laws, regulations, guidelines, codes and ordinances, and to take all
required remedial action.

     In the event Lender incurs any losses, damages, claims, costs, fees,
penalties, charges, assessments, taxes, fines or expenses, including reasonable
attorneys’ fees and legal assistants’ fees, in connection with such deemed
non-compliance, such losses, damages, claims, costs, fees, penalties, charges,
assessments, taxes, fines or expenses, including reasonable attorneys’ fees and
legal assistants’ fees, shall constitute additional Liabilities secured by
this Mortgage. The provisions of this Section will survive the foreclosure of
this Mortgage or any conveyance in lieu of such foreclosure.

     2.11. Damage, Destruction and Condemnation.

          (a) If all or any part of the Property shall be damaged or destroyed, or
if title to or the temporary use of the whole or any part of the Property shall
be taken or condemned by a competent authority for any public or quasi-public
use or purpose, there shall be no abatement or reduction in the amounts payable
by Borrower under the Loan Documents, and Borrower shall continue to be
obligated to make such payments.

          (b) If all or any part of the Property is partially or totally damaged or
destroyed, Borrower shall give prompt notice thereof to Lender, and Lender may
make proof of loss if not made promptly by Borrower. Borrower hereby
authorizes and directs any affected insurance company to make payment under
such insurance, including return of unearned premiums, to Lender instead of to
Borrower and Lender jointly, and Borrower appoints Lender as Borrower’s
attorney-in-fact to endorse any draft thereof, which appointment, being for
security, is coupled with an interest and irrevocable. Lender is hereby
authorized and empowered by Borrower to settle, adjust or compromise, in
consultation with Borrower, any claims for loss, damage or destruction to the
Property. Borrower shall pay all costs of collection of insurance proceeds
payable on account of such damage or destruction. Borrower shall have no claim
against the insurance proceeds, or be entitled to any portion thereof, and all
rights to the insurance proceeds

10

 

are hereby assigned to Lender as security for payment of the Liabilities.
Lender shall have the option, in its sole discretion, of paying or applying all
or any part of the insurance proceeds to: (i) reduction of the Liabilities;
(ii) restoration, replacement or repair of the Property in accordance with
Lender’s standard construction loan disbursement conditions and requirements;
or (iii) Borrower.

          (c) Immediately upon obtaining knowledge of the institution of any
proceeding for the condemnation of all or any part of the Property, Borrower
shall give notice to Lender. Borrower shall, at its sole cost and expense,
diligently prosecute any such proceeding and shall consult with Lender, its
attorneys and experts, and shall cooperate with it in the defense of any such
proceeding. Lender may participate in any such proceeding, and Borrower shall
from time to time deliver to Lender all instruments requested by it to permit
such participation. Borrower shall not, without Lender’s prior written
consent, enter into any agreement (i) for the taking or conveyance in lieu
thereof of all or any part of the Property, or (ii) to compromise, settle or
adjust any such proceeding. All awards and proceeds of condemnation are hereby
assigned to Lender, and Borrower, upon request by Lender, agrees to make,
execute and deliver any additional assignments or documents necessary from time
to time to enable Lender to collect the same. Such awards and proceeds shall
be paid or applied by Lender, in its sole discretion, to: (i) reduction of the
Liabilities; (ii) restoration, replacement or repair of the Property in
accordance with Lender’s standard construction loan disbursement conditions and
requirements; or (iii) Borrower.

          (d) Nothing herein shall relieve Borrower of its duty to repair, restore,
rebuild or replace the Property following damage or destruction or partial
condemnation if no or inadequate insurance proceeds or condemnation awards are
available to defray the cost of repair, restoration, rebuilding or replacement.

     2.12. Required Notices of Specific Events. Borrower shall notify Lender
within ten (10) days of: (a) receipt of any notice from any governmental or
quasi-governmental authority relating to the structure, use or occupancy of the
Property or alleging a violation of any Legal Requirement; (b) a substantial
change in the occupancy or use of all or any part of the Property; (c) receipt
of any notice from the holder of any lien or security interest in all or any
part of the Property; (d) commencement of any litigation affecting or
potentially affecting the financial ability of Borrower or the value of the
Property; (e) a pending or threatened condemnation of all or any part of the
Property; (f) a fire or other casualty causing damage to all or any part of the
Property; (g) receipt of any notice with regard to any release of Hazardous
Substances (as hereinafter defined or any other environmental matter affecting
the Property or Borrower’s interest therein; (h) receipt of any request for
information, demand letter or notification of potential liability from any
entity relating to potential responsibility for investigation or clean-up of
Hazardous Substances on the Property or at any other site owned or operated by
Borrower; (i) receipt of any notice from any tenant of all or any part of the
Property alleging a default, failure to perform or any right to terminate any
Lease or to set-off rents; or (j) receipt of any notice of the imposition of,
or of threatened or actual execution on, any lien on or security interest in
all or any part of the Property.

11

 

     2.13. Books and Records; Inspection. Borrower shall keep and maintain (a)
complete and accurate books and records, in accordance with generally accepted
accounting principles consistently applied, reflecting all items of income and
expense in connection with the operation of the Property, and (b) copies of all
written contracts, leases and other agreements affecting the Property. Lender
or its designated representatives shall, upon reasonable prior notice to
Borrower, have the right of entry and free access to the Property during
business hours (which may be without notice in any case of emergency) to
inspect the Property and to examine and audit all records of Borrower relating
to the Property, regardless of the nature thereof.

     2.14. Limited Right to Reappraise. Lender shall have the right to conduct
or have conducted by an independent appraiser acceptable to Lender appraisals
of the Property in form and substance satisfactory to Lender at Lender’s cost,
as reasonably necessary during the term of the Loan.

     2.15. Recordation. This Mortgage, and any amendments thereto, shall be
recorded and filed at Borrower’s expense, in such manner and in such places as
Lender may reasonably determine, and Borrower will promptly pay such recording
and filing fees, and all taxes (including interest and penalties) and other
charges, as are imposed by any Legal Requirements on or on account of this
Mortgage and any amendments, and will indemnify Lender as to same.

SECTION 3.

SECURITY AGREEMENT

     3.1 This Mortgage constitutes a security agreement under the Code and
shall be deemed to constitute a fixture financing statement. Borrower hereby
grants to Lender a security interest in the personal and other property (other
than real property) included in the Property, and all replacements of,
substitutions for, and additions to, such property, and the proceeds thereof.
Borrower hereby unconditionally authorizes Lender, at Borrower’s expense, to
deliver, file and refile any financing or continuation statements or other
security agreements or instruments that Lender may require from time to time to
perfect, confirm or maintain the lien of this Mortgage with respect to such
property. To the extent that the Florida Code provides that such financing or
continuation statements or other security agreements may be filed and be fully
effective without Borrower’s executing the same, then Lender is hereby
authorized to file the same, unexecuted by Borrower, and such filing will have
the same force and effect as if Borrower had executed the same. Otherwise,
Borrower shall promptly execute and deliver to Lender such financing or
continuation statements or other security agreements as Lender may request from
time to time. Without limiting the foregoing, Borrower hereby irrevocably
appoints Lender attorney-in-fact for Borrower to execute, deliver and file such
instruments for or on behalf of Borrower at Borrower’s expense, which
appointment, being for security, is coupled with an interest and shall be
irrevocable.

SECTION 4.

ASSIGNMENT OF LEASES.

     4.1. Borrower’s Assignment of Rents, Leases and Contract Rights, made in
favor of Lender to further secure the Loan, is dated on or about the same date
as this Mortgage and

12

 

intended for recordation in the same public records. That Assignment is hereby
incorporated by reference as a part hereof, to the same force and effect as if
fully set forth herein.

SECTION 5.

DECLARATIONS OF NO OFFSET

     5.1 Borrower represents to Lender that Borrower has no knowledge of any
offsets, counterclaims or defenses to the Liabilities either at law or in
equity. Borrower shall, within twenty (20) days upon request by mail,
facsimile or electronic mail, furnish to Lender or Lender’s designee in each
instance a written statement in form satisfactory to Lender stating the amount
due under the Liabilities, whether there are offsets or defenses against the
same and, if so, the nature and extent thereof.

SECTION 6.

ENVIRONMENTAL MATTERS.

     6.1. Definitions. As used herein, “Environmental Laws” shall mean all
existing or future federal, state and local statutes, ordinances, regulations,
rules, executive orders, standards and requirements, including the requirements
imposed by common law, concerning or relating to industrial hygiene and the
protection of health and the environment including but not limited to: (a)
those relating to the generation, manufacture, storage, transportation,
disposal, release, emission or discharge of Hazardous Substances (as
hereinafter defined); (b) those in connection with the construction, fuel
supply, power generation and transmission, waste disposal or any other
operations or processes relating to the Property; and (c) those relating to the
atmosphere, soil, surface and ground water, wetlands, stream sediments and
vegetation on, under, in or about the Property. Any terms mentioned herein
which are defined in any Environmental Law shall have the meanings ascribed to
such terms in said laws; provided, however, that if any of such laws are
amended so as to broaden any term defined therein, such broader meaning shall
apply subsequent to the effective date of such amendment.

     6.2. Environmental Representations, Warranties and Covenants. Borrower
represents, warrants, covenants and agrees that, except as otherwise set forth
in any environmental report provided to Lender by Borrower or obtained by
Borrower:

          (a) To the best of Borrower’s knowledge, without inquiry, and except as
set forth in that certain Environmental Assessment Checklist dated October 29,
2004, and any other document delivered to Lender prior to the date hereof,
neither Borrower nor the Property or any occupant thereof is in violation of or
subject to any existing, pending or threatened investigation or inquiry by any
governmental authority pertaining to any Environmental Law. Borrower shall not
cause or permit the Property to be in violation of, or do anything which would
subject the Property to any remedial obligations under, any Environmental Law,
and shall promptly notify Lender in writing of any existing, pending or
threatened investigation or inquiry by any governmental authority in connection
with any Environmental Law. In addition, Borrower shall provide Lender with
copies of any and all material written communications with any governmental
authority in connection with any Environmental Law, concurrently with
Borrower’s giving or receiving of same.

13

 

          (b) Borrower has taken all steps necessary to determine and has
determined that there has been no release, spill, discharge, leak, disposal or
emission (individually a “Release” and collectively, “Releases”) of any
Hazardous Material, Hazardous Substance or Hazardous Waste, including gasoline,
petroleum products, explosives, toxic substances, solid wastes and radioactive
materials (collectively, “Hazardous Substances”) at, upon, under or within the
Property. The use which Borrower or any other occupant of the Property makes
or intends to make of the Property will not result in Release of any Hazardous
Substances on or to the Property. During the term of this Mortgage, Borrower
shall take all steps necessary to determine whether there has been a Release of
any Hazardous Substances on or to the Property and, if Borrower finds a Release
has occurred, Borrower shall remove or remediate the same promptly upon
discovery at its sole cost and expense.

          (c) The Property has never been used by the present or previous owners
and/or operators nor will be used in the future to refine, produce, store,
handle, transfer, process, transport, generate, manufacture, heat, treat,
recycle or dispose of Hazardous Substances.

          (d) The Property: (i) is being and has been operated in compliance with
all Environmental Laws, and all permits required thereunder have been obtained
and complied with in all respects; and (ii) does not have any Hazardous
Substances present excepting small quantities necessary for the operation of
the medical service activities of Borrower and its tenants, and the same are
and will be handled in accordance with applicable Environmental Laws
(“Permitted Substances”).

          (e) Borrower will and will cause its tenants to operate the Property in
compliance with all Environmental Laws and, other than Permitted Substances,
will not place or permit to be placed any Hazardous Substances on the Property.

          (f) No lien has been attached to or threatened to be imposed upon the
Property, and there is no basis for the imposition of any such lien based on
any governmental action under Environmental Laws. Neither Borrower nor any
other person has been, is or will be involved in operations at the Property
which could lead to the imposition of environmental liability on Borrower, or
on any subsequent or former owner of the Property, or the creation of an
environmental lien on the Property. In the event that any such lien is filed,
Borrower shall, within (30) days from the date that the Borrower is given
notice of such lien (or within such shorter period of time as is appropriate in
the event that steps have commenced to have the Property sold), either: (i) pay
the claim and remove the lien from the Property; or (ii) furnish a cash
deposit, bond or other security satisfactory in form and substance to Lender in
an amount sufficient to discharge the claim out of which the lien arises.

     6.3. Right to Inspect and Cure. Lender shall have the right to conduct or
have conducted by its agents or contractors such environmental inspections,
audits and tests as Lender shall deem necessary or advisable from time to time
at the sole cost and expense of Borrower; provided, however, that Borrower
shall not be obligated to bear the expense of such environmental inspections,
audits and tests so long as (a) no Event of Default exists, and (b) Lender has
no reasonable cause to seek a determination whether there has been a Release or

14

 

threatened Release of Hazardous Substances at the Property or that Borrower or
the Property is in violation of any Environmental Law, and the results of the
inspections, audits and tests commissioned by Lender establish that there has
been no Release or threatened Release of Hazardous Substances at the Property
and that Borrower and the Property are not in violation of any Environmental
Law.

     The cost of such inspections, audits and tests, if chargeable to Borrower
as aforesaid, shall be added to the Liabilities and secured by this Mortgage.

     Borrower shall, and shall use its best efforts to cause each of its
tenants at the Property to, cooperate with such inspection efforts; such
cooperation shall include, without limitation, supplying all information
requested concerning the operations conducted and Hazardous Substances located
at the Property.

     In the event that Borrower fails to comply with any Environmental Law,
Lender may, in addition to any of its other remedies under this Mortgage, cause
the Property to be in compliance with such laws and the cost of such compliance
shall be added to the Liabilities secured by this Mortgage.

SECTION 7.

EVENTS OF DEFAULT.

     The occurrence of any of the following shall, in each instance, constitute
a default (each, an “Event of Default”) under this Mortgage:

     7.1 Non-payment when due of any sum required to be paid to Lender under
any of the Loan Documents, including without limitation, the Notes.

     7.2 A breach by Borrower of any other term, covenant, condition,
obligation or agreement under this Mortgage, and the continuance of such breach
for a period of thirty (30) days after written notice thereof shall have been
given to Borrower. However, if the nature of the breach is such that, despite
Borrower’s duly diligent efforts to cure the breach, the same is essentially
impervious to cure within the aforesaid period, then Borrower shall have a
reasonable time (not to exceed 60 days after Lender’s notice mentioned above)
to cure the breach, provided that, and only if, Borrower commences cure within
the aforesaid period, and continuously and diligently seeks to complete such
cure to completion.

     7.3 An Event of Default under any of the other Loan Documents;

     7.4 Any representation or warranty made by Borrower or by any other
“Obligor” (as such term is defined in the Notes) in any Loan Document or to
induce Lender to enter into the transactions evidenced hereby or contemplated
hereunder shall prove to have been false, incorrect or misleading in any
material respect as of the date when made.

     7.5 The filing by or against Borrower or any other Obligor of a petition
seeking relief, or the granting of relief, under the Federal Bankruptcy Code or
any similar federal or state

15

 

statute; any assignment for the benefit of creditors made by Borrower; the
appointment of a custodian, receiver, liquidator or trustee for Borrower or for
any of the property of Borrower, or any action by Borrower to effect any of the
foregoing; or if Borrower becomes insolvent or is not paying its debts
generally as they become due.

     7.6 The death of any individual Obligor; or the dissolution, liquidation,
merger, consolidation or reorganization of Borrower or any other Obligor that
is an entity or partnership, or the institution of any proceeding to effect any
of same.

     7.7 A default under any other obligation by Borrower in favor of Lender,
or under any document securing or evidencing such obligation, whether or not
such obligation is secured by the Property or any part thereof.

     7.8 The filing, entry or issuance of any judgment, execution, garnishment,
attachment, distraint or lien against Borrower or any other Obligor, or any of
their property, subject to the provisions of Section 2.7 hereof regarding such
matters arising without consent if applicable.

     7.9 A default under any other obligation to a third party secured by the
Property or any part thereof.

SECTION 8.

LENDER’S REMEDIES.

     If an Event of Default occurs at any time, Lender may take any of the
following actions in each instance:

     8.1. Acceleration. Lender may declare the entire amount of the
Liabilities immediately due and payable, without presentment, demand, notice of
any kind, protest or notice of protest, all of which are expressly waived,
notwithstanding anything to the contrary contained in any of the Loan
Documents. Lender may charge and collect interest from the date of default on
the unpaid balance of the Liabilities, at the Default Rate set forth in the
Notes (provided that, if no Default Rate is specifically provided in the Notes,
the Default Rate shall be the maximum rate of interest allowed, from time to
time, by applicable law). In addition, any and all accelerations of any
portion of the remaining principal balance of the Liabilities (including,
without limitation, foreclosure by Lender under this Mortgage) shall (unless
inconsistent with the provisions of the Notes respecting the same) include and
be subject to the prepayment provisions of the Notes, if any.

     8.2. Possession. Lender may enter upon and take possession of the
Property, with or without legal action, lease all or any parts of the Property,
collect therefrom all rentals and, after deducting all reasonable costs of
collection and administration expense, apply the net rentals to any one or more
of the following items in such manner and in such order of priority as Lender,
in Lender’s sole discretion, may elect: the payment of any sums due for any
prior lien, taxes, water and sewer rents, charges and claims, insurance
premiums and all other carrying charges, to the maintenance, repair or
restoration of the Property, or to reduce the Liabilities (whether the

16

 

principal sums thereof, or interest or other charges thereon). Lender is
hereby given full authority to do any act that Borrower could lawfully do in
connection with the management and operation of the Property. This covenant is
effective either with or without any action brought to foreclose this Mortgage,
and without applying for a receiver of rents.

     8.3. Foreclosure. Lender may institute any one or more actions of
mortgage foreclosure against all or any part of the Property, or take such
other action at law, equity or by contract for the enforcement of this Mortgage
and realization on the Property security herein or elsewhere provided for the
Liabilities, or any part thereof, to the fullest extents that applicable law
may allow, and may proceed therein to final judgment and execution for the
entire unpaid balance of the Liabilities. The unpaid balance of any judgment
shall bear interest at the greater of (a) the statutory rate provided for
judgments, or (b) the highest rate permitted under Florida law. Without
limiting the foregoing, Lender may foreclose this Mortgage and exercise its
rights as a secured party for all or any portion of the Liabilities which are
then due and payable, subject to the continuing lien of this Mortgage for the
balance not then due and payable. In case of any sale(s) of any of the
Property by judicial proceedings, the Property may be sold in one lot parcel,
or in as many lots, parcels, manner or order, as Lender in its sole discretion
may elect. Borrower, for itself and anyone claiming by, through or under it,
hereby agrees, to the fullest extent not expressly precluded by applicable law.
that Lender shall in no manner, whether in law or in equity, be limited except
as herein provided in the exercise of its rights as a secured party in the
Property, or in any other security hereunder or otherwise pertaining to the
Liabilities or any other obligation secured by this Mortgage, whether by any
statute, rule or precedent which may otherwise require said security to be
marshalled in any manner and Borrower, for itself and others as aforesaid,
hereby expressly waives and releases any right to or benefit thereof. The
failure to make any tenant or any other third party a defendant to a
foreclosure proceeding shall not be asserted by Borrower as a defense in any
proceeding instituted by Lender to collect the Liabilities or any deficiency
remaining unpaid thereafter.

     8.4. Appointment of Receiver. Lender may petition a court of competent
jurisdiction to appoint one or more receivers of the Property or parts thereof.
Such appointment may be made either before or after sale, without notice,
without regard to the solvency or insolvency of Borrower at the time of
application for such receiver, without regard to the then-value of the
Property, or whether Borrower has committed waste or allowed deterioration of
the Property, and Lender or any agent of Lender may be appointed as such
receiver. Borrower hereby agrees that Lender shall, unless patently
unreasonable, be presumed to have such a special interest in the Property that
Lender’s rights and security interests genuinely require the appointment of
such receiver(s) to protect that special interest and prevent the Property from
waste, deterioration and diminution of the Property’s value as security
hereunder; accordingly, Borrower further agrees that it shall not contest the
appointment of a receiver(s) and hereby so stipulates to such appointment
pursuant to this Section. Such receiver(s) shall have the power to perform all
of the acts permitted Lender pursuant to Section 8.2 above and such other
powers which may be necessary or customary in such cases for the protection,
possession, control, management and operation of the Property during such
period, in furtherance of Lender’s rights to collect all of the Liabilities
and, pending such collection, to have all lawful recourse to the Property and
the due and proper preservation and function thereof as security for the
Liabilities.

17

 

     8.5. Rights as a Secured Party. Lender shall have, in addition to other
rights and remedies available at law or in equity, the rights and remedies of a
secured party under the Code. Lender may elect to foreclose such of the
Property as then comprise fixtures pursuant either to the law applicable to
foreclosure of an interest in real estate or to that applicable to personal
property under the Code. To the extent permitted by law, Borrower waives the
right to any stay of execution and the benefit of all exemption laws now or
hereafter in effect.

     8.6. Excess Monies. Lender may apply on account of the Liabilities any
unexpended monies still retained by Lender that were paid by Borrower to Lender
for the payment of, or as security for the payment of, taxes, assessments or
other governmental charges, insurance premiums, or any other legitimate charges
pertaining to the Property or the performance of the obligations of Borrower
under the Loan Documents.

     8.7. Other Remedies. Lender shall have the full right and option,
exercisable from time to time, to bring one or more appropriate actions to
recover any sums required to be paid by Borrower under the terms of this
Mortgage as they become due, without regard to whether or not any other
Liabilities shall be due, and without prejudice to the right of Lender
thereupon or thereafter to seek mortgage foreclosure(s), or any other
action(s), for any default by Borrower existing at the time the earlier action
was commenced. In addition, Lender shall have the right to set-off all or any
part of any amount due by Borrower to Lender under any of the Liabilities
against any indebtedness, liabilities or obligations owing by Lender in any
capacity to Borrower, including without limitation any obligation to disburse
to Borrower any funds or other property on deposit with or otherwise in the
possession, control or custody of Lender.

SECTION 9.

MISCELLANEOUS.

     9.1. Notices. All notices and communications under this Mortgage shall be
in writing and shall be given by either (a) hand-delivery, (b) first class mail
(postage prepaid), or (c) reliable overnight commercial courier (charges
prepaid), to the addresses listed in this Mortgage. Notice shall be deemed to
have been given and received: (a) if by hand delivery, upon delivery; (b) if by
mail, three (3) calendar days after the date first deposited in the United
States mail; and (c) if by overnight courier, on the date scheduled for
delivery. A party may change its address by giving written notice to the other
party as specified herein.

     9.2. Remedies Cumulative. The rights and remedies of Lender as provided
in this Mortgage or in any other Loan Document shall be cumulative and
concurrent, may be pursued separately, successively or together, may be
exercised as often as occasion therefor shall arise, and shall be in addition
to any other rights or remedies conferred upon Lender at law or in equity. The
failure, at any one or more times, of Lender to assert the right to accelerate
the maturity of the Liabilities or any thereof, grant any extension of time for
payment of the Liabilities or any thereof, take other or additional security
for the payment thereof or any thereof, release any security, change any of the
terms of the Loan Documents, or waive or fail to exercise any right or remedy
under any Loan Document, whether in whole or in part, shall not in any way

18

 

affect this Mortgage or the rights of Lender hereunder or under any of the
other Loan Documents.

     9.3. No Implied Waiver. Lender shall not be deemed to have modified or
waived any of its rights or remedies hereunder unless such modification or
waiver is in writing and signed by Lender, and then only to the extent
specifically set forth therein. A waiver in one event shall not be construed
as continuing or as a waiver of or bar to such right or remedy on a subsequent
event.

     9.4. Partial Invalidity. The invalidity or unenforceability of any one or
more provisions of this Mortgage shall not render any other provision invalid
or unenforceable. In lieu of any invalid or unenforceable provision, there
shall be added automatically a valid and enforceable provision as similar in
terms to such invalid or unenforceable provision as may be legally possible.

     9.5. Binding Effect. The covenants, conditions, waivers, releases and
agreements contained in this Mortgage shall bind, and the benefits thereof
shall inure to, the parties hereto and their respective heirs, executors,
administrators, successors and assigns and are intended and shall be held to be
real covenants running with the Property, including the Real Estate; provided,
however, that this Mortgage cannot be assigned by Borrower without the prior
written consent of Lender, and any such assignment or attempted assignment by
Borrower in the absence of such prior written consent shall be void and of no
effect with respect to Lender.

     9.6. Modifications. This Mortgage may not be supplemented, extended,
modified or terminated except by an agreement in writing signed by Borrower and
Lender.

     9.7. Commercial Loan. Borrower represents and warrants that the loans or
other financial accommodations included as Liabilities secured by this Mortgage
were not obtained for residential, personal, consumer or household purposes.

     9.8. Governing Law. Except as expressly provided in the Loan Documents,
and to the extent that the validity, construction or enforcement of Lender’s
security instruments for the Loan may be controlled by the laws of another
State notwithstanding an express agreement to the contrary, the Loan Documents
(including this instrument) shall be governed by and construed in accordance
with the substantive laws of the State of Florida without reference to choice
or conflict of laws principles.

     9.9. Joint and Several Liability. If Borrower consists of more than one
person or entity, the word “Borrower” shall mean each of them, and their
liability shall be joint and several in all respects.

     9.10. Disclosure of Financial Information. Lender is hereby authorized to
disclose any financial or other information about the undersigned party(ies) to
any regulatory body or agency having jurisdiction over Lender; to any present,
future or prospective participant or successor in interest in any loan or other
financial accommodation made by Lender to the undersigned party(ies); and, as
required by legal process. The information provided may include,

19

 

without limitation, amounts, terms, balances, payment history, return item
history, and any financial or other information about the undersigned
party(ies) that Lender may have or lawfully obtain. The provisions of this
Section shall survive termination of this document, and repayment or other
disposition of the Loan.

     9.11 Non-Merger. In the event Lender shall acquire title to the Property
or any part thereof by conveyance from Borrower or as a result of foreclosure
or similar remedies, this Mortgage shall not merge in the fee estate to such
Property, but shall remain and continue as an existing and enforceable lien for
the Liabilities secured hereby, unless and until the same shall be paid to
Lender in full and released of record by Lender in writing.

     9.12 “Including” Not Limiting. Unless otherwise specifically provided,
the word “including” as used in this Mortgage shall mean “including but not
limited to.”

     9.13 “Hereof” Etc. Unless otherwise specifically provided, the terms
“hereof”, “hereunder” and like terms as used in this Mortgage shall apply to
the entirety of this Mortgage rather than to a particular Section or
subsection.

     IN WITNESS WHEREOF, Borrower, intending to be legally bound, has duly
executed and delivered this Second Amended and Restated Mortgage, Security
Agreement and Fixture Filing as of the day and year first above written.

	 	 	 	 	 
	 	SADDLEBROOK RESORTS, INC.,

a Florida corporation

 	 
	 	By:  	/s/ Thomas L. Dempsey
 	 
	 	 	Thomas L. Dempsey 	 
	 	 	Its Chief Executive Officer 	 
	 

STATE OF FLORIDA

COUNTY OF

     The foregoing instrument was acknowledged before me this    day of
November, 2004, by Thomas L. Dempsey, as Chief Executive Officer of SADDLEBROOK
RESORTS, INC., a Florida corporation, on behalf of the corporation, who did not
take an oath and, as checked, (   ) is/are personally known
by me or (   )
has/have produced the following
identification:            
                .

	 	 	 
	 
	 	

	 
	 	Notary Public
	(AFFIX NOTARY SEAL)
	 	My Commission Expires:

20

 

EXHIBIT “A”

Legal Description

21Ex-10.3 SunTrust Promissory Note

 

EXHIBIT 10.3

PROMISSORY NOTE

	 	 	 	 	 
	 
	 	Tampa, Florida
	U.S. $12,000,000.00
	 	November 1, 2004

     The undersigned Borrower promises to pay to the order of SUNTRUST BANK, a
Georgia banking corporation (hereinafter called “Bank”, which term shall
include all subsequent holders of this Note by assignment or otherwise), at its
offices located in Tampa, Florida, or order, the sum of TWELVE MILLION AND
00/100 DOLLARS ($12,000,000.00), together with interest from the date hereof at
the respective rates of interest hereinafter provided, all in the manner
further provided for herein.

     The principal outstanding under this Note shall bear interest at the
Interest Rate (as hereinafter defined), which Interest Rate shall be adjusted
on each Interest Rate Determination Date (as hereinafter defined). The term
“Interest Rate” means two percent (2.00%) per annum above One Month
LIBOR-Indexed Rate (as hereinafter defined). The term “One Month LIBOR-Indexed
Rate” means that rate per annum which is the quotient of:

(i) the rate per annum equal to the offered rate for deposits in U.S.
dollars of amounts comparable to the principal amount of the Note
offered for a term comparable to the Interest Period, which rate appears
on that page of Bloomberg reporting service, or such similar service as
determined by the Bank, that displays British Bankers’ Association
interest settlement rates for deposits in U.S. Dollars, as of 11:00 A.M.
(London, England time) two (2) Business Days prior to the first day of
such Interest Period; provided, that if no such offered rate appears on
such page, the rate used for such Interest Period will be the per annum
rate of interest determined by the Bank to be the rate at which U.S.
dollar deposits for the relevant Interest Period in an amount comparable
to the principal amount of the Note, are offered to the Bank in the
London Inter-Bank Market as of 11:00 A.M. (London, England time), on the
day which is two (2) Business Days prior to the first day of such
Interest Period, divided by

(ii) a percentage equal to 1.00 minus the maximum reserve percentages
(including any emergency, supplemental, special or other marginal
reserves) expressed as a decimal (rounded upward to the next 1/100th of
1%) in effect on any day to which Bank is subject with respect to any
One Month LIBOR loan pursuant to regulations issued by the Board of
Governors of the Federal Reserve System with respect to eurocurrency
funding (currently referred to as “eurocurrency liabilities” under
Regulation D). This percentage will be adjusted automatically on and as
of the effective date of any change in any reserve percentage.

     Anything to the contrary provided herein notwithstanding, upon any
increase in the reserve percentage by the Board of Governors of the Federal
Reserve System, Borrower shall have the right to request (which request shall
not be unreasonably denied by Bank) the use of the thirty (30) day Secondary
Certificate of Deposit Rate or some other mutually agreed upon index instead of
the One Month LIBOR-Indexed Rate. The term “Secondary Certificate of Deposit
Rate: shall mean:

 

(i) the Secondary Certificate of Deposit Rate per annum for 30-day
period, each as in effect on the date two (2) Business Days prior to the
beginning of each Interest Period, as published from time to time in the
Wall Street Journal or such substitute publication or interest rate
reporting service as may be designated in writing from time to time by
Bank to Borrower, in any such case rounded, if necessary to the higher
1/16 of 1.0% if the rate is not such a multiple.

     If the Bank determines in its sole discretion at any time (the
“Determination Date”) that it can no longer make, fund or maintain One Month
LIBOR-Indexed Rate and/or Secondary Certificate of Deposit Rate loans for any
reason, including without limitation illegality, or the One Month LIBOR Indexed
Rate and/or Secondary Certificate of Deposit Rate cannot be ascertained or do
not accurately reflect the Bank’s cost of funds, or the Bank would be subject
to Additional Costs that cannot be recovered from Borrower, then the Bank will
notify Borrower and thereafter will have no obligation to make, fund or
maintain One Month LIBOR-Indexed Rate and/or Secondary Certificate of Deposit
Rate loans. Upon such Determination Date, this Note shall be converted to a
variable rate loan based upon the Prime Rate (as hereinafter defined), with the
interest rate adjusting simultaneously with any fluctuation in said Prime Rate.
“Prime Rate” shall mean the publicly announced prime lending rate of the Bank
from time to time in effect, which rate may not be the lowest or best lending
rate made available by the Bank.

     The term “Business Day” as hereinabove used shall mean a day on which the
foreign exchange markets in London, England are open for business. The term
“Interest Rate Determination Date” as hereinabove used means November 1, 2004,
and the first (1st) Business Day of each calendar month thereafter. The term
“Interest Period” as hereinabove used means the period commencing on each
Interest Rate Determination Date and ending the day before the next Interest
Rate Determination Date.

     Interest hereunder shall be computed on the basis of a three hundred sixty
(360) day year, calculated for the actual number of days elapsed, provided,
however, that the Interest Rate charged hereunder shall never exceed the
maximum rate allowed, from time to time, by applicable law.

     Monthly payments of principal in the amount of $66,667.00 be due and
payable on December 1, 2004, and on the first (1st) day of each month
thereafter until the Maturity Date (as defined below), together with accrued
interest at the applicable Interest Rate.

     The “Maturity Date” of this Note shall be November 1, 2009.
Notwithstanding any contrary provision of this Note, all amounts then
outstanding under this Note, if not sooner paid, shall be due and payable in
full on the Maturity Date as defined above.

     In the event that any applicable law or regulation or the interpretation
or administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) (i) shall change the basis of taxation of payments to the Bank or any
amounts payable by Borrower hereunder (other than taxes imposed on the overall
net income of the Bank) or (ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by the Bank, or (iii) shall
impose any other condition with respect to this Note, and the result of the

2

 

foregoing is to increase the cost to the Bank of making or maintaining this
Note or to reduce any amount receivable by Bank hereunder, and the Bank
determines that such increased costs or reduction in amount receivable was
attributable to the One Month LIBOR-Indexed Rate used to establish the One
Month LIBOR-Indexed Rate hereunder, then Borrower shall from time to time, upon
demand by the Bank, pay to the Bank additional amounts sufficient to compensate
the Bank for such increased costs (the “Additional Costs”). A detailed
statement as to the amount of the Additional Costs, prepared in good faith and
submitted to Borrower by the Bank, shall be conclusive and binding in the
absence of manifest error.

     A payment due hereunder shall be deemed late if it is not received by the
Bank on or before ten (10) days after the due date of such payment, and each
late payment shall automatically incur a late charge, payable immediately,
equal to five percent (5%) of such payment. This late charge provision shall
not limit the operation of any other provision of this Note regarding payments
that are not made when due hereunder. Further, notwithstanding any other rate
of interest provided for herein, the Interest Rate applicable to any payment or
payments of principal or interest, or any part thereof, not received by the
Bank within ten (10) days after the due date thereof shall thereafter be the
maximum rate allowed, from time to time, by applicable law (the “Default
Rate”).

     Further still, Borrower shall be in default of this Note in the event that
any payment of principal or interest, or any part thereof, is not received by
the Bank within ten (10) days after the due date of such payment, or upon the
occurrence of any other default hereunder or under the terms of any mortgage or
other loan document securing or made at any time in connection with this Note
or with any loan cross-defaulted with this Note. In the event of any such
default that remains uncured upon the expiration of any applicable grace or
cure period, the principal sum remaining unpaid hereunder, together with all
accrued and unpaid interest thereon, and all other liabilities of the Borrower
under this Note, shall become due and payable at any time thereafter at the
option of the Bank, immediately upon the Bank’s written notice or demand. Also
in that event, the Bank shall have the remedies of a secured party under the
Uniform Commercial Code and, without limiting the generality of the foregoing,
the immediate and unconditional right to set off against this Note all money
owed by Bank in any capacity to each “Obligor” (which term includes Borrower
and any guarantor or other person or entity now or hereafter obligated for all
or part of the indebtedness of Borrower under this Note, or under any mortgage
or other loan document securing or made at any time in connection with this
Note, whether or not then otherwise due, and also to set off against all other
liabilities of each Obligor to Bank all money owed by Bank in any capacity to
each Obligor; and, Bank shall be deemed to have exercised such right of set-off
and to have made a charge against any such money immediately upon the
occurrence of such default that remains uncured upon the expiration of any
applicable grace or cure period, even though such a charge is made or entered
on the books of Bank at a later time.

     In enforcing its remedies for default, unless any collateral security for
this Note (“Collateral”) is perishable or threatens to decline speedily in
value, or is of a type customarily sold on a recognized market, the Bank will
give Borrower reasonable notice of the time and place of any public sale
thereof or of the time after which any private sale or any other intended
disposition thereof is to be made. The requirement of reasonable notice shall
be met if such notice is mailed,

3

 

postage prepaid, to Borrower at the address given below or at any other address
shown on the records of the Bank, at least five (5) days before the time of the
sale or disposition. In connection with the disposition of any Collateral at
the instance of the Bank, Borrower shall be and remain liable for any
deficiency, and Bank shall account to Borrower for any surplus, provided,
however, that the Bank shall have the right to apply all or any part of such
surplus (or to hold the same as a reserve against) any and all other
liabilities of Borrower to Bank, and further provided that no provision of this
Note or of any mortgage or other loan document securing or made at any time in
connection with this Note shall be construed to require that the Bank seek
recourse against any Collateral before or to the exclusion of any other default
rights and remedies that the Bank may have under applicable law. Borrower
promises and agrees to pay all costs and expenses of collection and reasonable
attorneys’ fee, including costs, expenses and reasonable attorneys’ fees on
appeal, if sought or collected by the Bank through legal proceedings or through
an attorney at law.

     Bank shall have the right, which may be exercised at any time whether or
not this Note is then due, to notify any one or more of the Obligors to make
payment to Bank on any amounts due or to become due on any Collateral. In the
event of any default hereunder (subject to any applicable cure period), Bank
shall thereafter have, but shall not be limited to, the following rights; (i)
to transfer this Note and the Collateral, whereupon Bank shall be relieved from
all further liabilities, duties and responsibilities hereunder and with respect
to any Collateral so pledged or transferred, and any transferee shall for all
purposes stand in the place of Bank hereunder and have all the rights of Bank
hereunder; (ii) to transfer the whole or any part of the Collateral into the
name of itself or its nominee; (iii) to vote the Collateral; (iv) to demand,
sue for, collect, or make any compromise or settlement it deems desirable with
reference to the Collateral; and, (v) to take control of any proceeds of
Collateral.

     No delay or omission on the part of Bank in exercising any right hereunder
shall operate as a waiver of such right or of any other right under this Note.
Presentment, demand, protest, notice of dishonor, and extension of time without
notice are hereby waived by Borrower and each and every other Obligor. Except
as otherwise expressly provided in this Note or by applicable law, any notice
to Borrower regarding this Note shall be sufficiently served for all purposes
if placed in the mail, postage prepaid, addressed to or left upon the premises
at the address shown below or any other address shown on the Bank’s records.
Time is of the essence in all matters relating to this Note.

     JURY TRIAL WAIVER. BORROWER AND BANK HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY WAIVE THE RIGHT EITHER OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW
OR IN EQUITY, BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS
A MATERIAL INDUCEMENT FOR BANK ENTERING INTO THIS AGREEMENT. FURTHER, BORROWER
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL
HAS THE AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.

4

 

     IN WITNESS WHEREOF, Borrower has executed and delivered this Note on the
date first above written.

	 	 	 	 	 
	 	Borrower:

SADDLEBROOK RESORTS, INC.,

a Florida corporation

 	 
	 	By:  	/s/ Thomas L. Dempsey
 	 
	 	 	Thomas L. Dempsey 	 
	 	 	Its Chief Executive Officer 	 
	 

Borrower’s Address:

5700 Saddlebrook Way

Wesley Chapel, Florida 33543

THIS NOTE, TOGETHER WITH THAT CERTAIN REVOLVING LINE OF CREDIT PROMISSORY NOTE
OF EVEN DATE HEREWITH BY BORROWER IN FAVOR OF BANK IN THE AMOUNT OF
$5,000,000.00 (COLLECTIVELY, THE “RENEWAL NOTES”), HAVE BEEN GIVEN IN RENEWAL
OF THAT CERTAIN CONSOLIDATED PROMISSORY NOTE (THE “CONSOLIDATED NOTE”) DATED
JUNE 29, 1998, IN THE ORIGINAL PRINCIPAL AMOUNT OF $26,000,000.00, GIVEN BY
BORROWER IN FAVOR OF TEXTRON FINANCIAL CORPORATION, AS ASSIGNED TO BANK. THE
RENEWAL NOTES EVIDENCE ONLY THE PRINCIPAL BALANCE OF THE CONSOLIDATED NOTE, NOT
INCLUDING ANY INTEREST. THUS, NO ADDITIONAL DOCUMENTARY STAMP TAXES OR
NON-RECURRING INTANGIBLES TAXES ARE DUE IN CONNECTION WITH THE EXECUTION OF THE
RENEWAL NOTES OR THE EXECUTION AND FILING OF THE SECOND AMENDED AND RESTATED
MORTGAGE SECURING THE RENEWAL NOTES.

5

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