Document:

LOAN AGREEMENT

 

dated as of June 20, 2008

 

by and between

 

APPLE ORCHARD, L.L.C.,

a Michigan limited liability company

 

SUN LAKEVIEW LLC,

a Michigan limited liability company

 

SUN TAMPA EAST, LLC,

a Michigan limited liability company

 

as Borrowers

 

 

and

 

LASALLE BANK MIDWEST NATIONAL ASSOCIATION,

a national banking association

 

TABLE OF CONTENTS

	
            Article
 	
            Page
 

 

	
            ARTICLE 1
 	
            INCORPORATION AND DEFINITIONS
 	
            1
 

	
             
 	
            1.1
 	
            Incorporation and Definitions
 	
            1
 

	
            ARTICLE 2
 	
            REPRESENTATIONS AND WARRANTIES
 	
            6
 

	
             
 	
            2.1
 	
            Representations and Warranties
 	
            6
 

	
             
 	
            2.2
 	
            Continuation of Representations and Warranties
 	
            9
 

	
            ARTICLE 3
 	
            AMOUNT AND TERMS OF LOAN
 	
            9
 

	
             
 	
            3.1
 	
            Agreement to Lend and to Borrow; Note
 	
            9
 

	
            ARTICLE 4
 	
            PRINCIPAL, INTEREST; SPECIAL PROVISIONS FOR LIBOR LOANS
 	
            9
 

	
             
 	
            4.1
 	
            Interest Rates
 	
            9
 

	
             
 	
            4.2
 	
            Payment of Principal and Interest
 	
            10
 

	
             
 	
            4.3
 	
            Types of Loans; Setting and Notice of LIBOR Rates
 	
            11
 

	
             
 	
            4.4
 	
            Conversion and Continuation Procedures
 	
            11
 

	
             
 	
            4.5
 	
            Computation of Interest and Fees
 	
            11
 

	
             
 	
            4.6
 	
            Inability to Determine Interest Rate
 	
            12
 

	
             
 	
            4.7
 	
            Payments
 	
            12
 

	
             
 	
            4.8
 	
            Illegality
 	
            12
 

	
             
 	
            4.9
 	
            Legal Requirements
 	
            12
 

	
             
 	
            4.10
 	
            Taxes
 	
            13
 

	
             
 	
            4.11
 	
            LIBOR Loan Indemnification
 	
            14
 

	
            ARTICLE 5
 	
            LOAN DOCUMENTS
 	
            14
 

	
             
 	
            5.1
 	
            Loan Documents
 	
            14
 

	
            ARTICLE 6
 	
            CONDITIONS TO LOAN CLOSING
 	
            15
 

	
             
 	
            6.1
 	
            Conditions to Loan Closing
 	
            15
 

	
             
 	
            6.2
 	
            Termination of Agreement
 	
            18
 

	
            ARTICLE 7
 	
            DISBURSEMENT
 	
            18
 

	
             
 	
            7.1
 	
            Conditions Precedent to Disbursement of Loan Proceeds
 	
            18
 

	
             
 	
            7.2
 	
            Expenses and Advances Secured by Mortgages
 	
            19
 

	
             
 	
            7.3
 	
            Acquiescence not a Waiver
 	
            19
 

	
             
 	
            7.4
 	
            The Bank's Action for the Bank's Own Protection Only
 	
            19
 

	
            ARTICLE 8
 	
            FURTHER AGREEMENTS OF BORROWER
 	
            19
 

	
             
 	
            8.1
 	
            Furnishing Information
 	
            19
 

	
             
 	
            8.2
 	
            Debt Service Coverage Ratio
 	
            19
 

	
             
 	
            8.3
 	
            Adjusted EBITDA to Fixed Charges Ratio
 	
            19
 

	
             
 	
            8.4
 	
            Total Leverage Ratio
 	
            19
 

	
             
 	
            8.5
 	
            Compliance with Covenants; Prohibition Against Additional Recordings
 	
            19
 

	
             
 	
            8.7
 	
            Distributions
 	
            20
 

	
             
 	
            8.8
 	
            Further Assurance
 	
            20
 

	
            ARTICLE 9
 	
            CASUALTIES AND CONDEMNATION
 	
            20
 

 

i

	
            Article
 	
            Page
 

 

 

	
             
 	
            9.1
 	
            Application of Insurance Proceeds and Condemnation Awards
 	
            20
 

	
            ARTICLE 10
 	
            PARTICIPATIONS, SALE AND ENCUMBRANCES
 	
            20
 

	
             
 	
            10.1
 	
            Bank Participations
 	
            20
 

	
             
 	
            10.2
 	
            Prohibition of Assignments and Encumbrances by Borrower
 	
            21
 

	
             
 	
            10.3
 	
            Special Provisions Regarding Expansion Property
 	
            21
 

	
            ARTICLE 11
 	
            EVENTS OF DEFAULT BY BORROWER
 	
            22
 

	
             
 	
            11.1
 	
            Event of Default Defined
 	
            22
 

	
            ARTICLE 12
 	
            BANK'S REMEDIES UPON EVENT OF DEFAULT
 	
            23
 

	
             
 	
            12.1
 	
            Remedies Conferred upon the Bank
 	
            23
 

	
             
 	
            12.2
 	
            Setoff Rights
 	
            23
 

		
12.3
	
            Right of Bank to Make Advances to Cure Event of Defaults; Obligatory
Advances  23

	
             
 	
            12.4
 	
            Attorneys Fees
 	
            23
 

	
             
 	
            12.5
 	
            No Waiver
 	
            24
 

	
             
 	
            12.6
 	
            Default Rate
 	
            24
 

	
            ARTICLE 13
 	
            MISCELLANEOUS
 	
            24
 

	
             
 	
            13.1
 	
            Time is of the Essence
 	
            24
 

	
             
 	
            13.2
 	
            The Bank's Determination of Facts
 	
            24
 

	
             
 	
            13.3
 	
            Prior Agreements
 	
            24
 

	
             
 	
            13.4
 	
            Disclaimer by Bank
 	
            24
 

	
             
 	
            13.5
 	
            Borrower Indemnification
 	
            24
 

	
             
 	
            13.6
 	
            Captions
 	
            25
 

	
             
 	
            13.7
 	
            Inconsistent Terms and Partial Invalidity
 	
            25
 

	
             
 	
            13.8
 	
            Gender and Number
 	
            25
 

	
             
 	
            13.9
 	
            Notices
 	
            25
 

	
             
 	
            13.10
 	
            Effect of Agreement
 	
            26
 

	
             
 	
            13.11
 	
            Governing Law
 	
            26
 

	
             
 	
            13.12
 	
            Waiver of Defenses
 	
            26
 

	
             
 	
            13.13
 	
            Consent to Jurisdiction
 	
            26
 

	
             
 	
            13.14
 	
            Waiver of Jury Trial
 	
            27
 

	
             
 	
            13.15
 	
            Counterparts; Facsimile Signatures
 	
            27
 

	
             
 	
            13.16
 	
            Customer Identification - USA Patriot Act Notice
 	
            27
 

 

EXHIBITS

 

EXHIBIT “A” - THE PROPERTY

EXHIBIT “B” – FORM OF PROMISSORY NOTE

 

 

ii

LOAN AGREEMENT

 

This LOAN AGREEMENT dated as of June 20, 2008 (the “Agreement”), is executed by and among APPLE ORCHARD, L.L.C., a Michigan limited liability company; SUN LAKEVIEW LLC, a Michigan limited liability company; and SUN TAMPA EAST, LLC, a Michigan limited liability company (collectively, the “Borrower”) and LASALLE BANK MIDWEST NATIONAL ASSOCIATION, a national banking association (the “Bank”).

R E C I T A L S:

A.    Each Borrower is the owner of one or more of the properties described in Exhibit_“A” attached hereto (being collectively referred to herein as the “Property”).

B.    Borrower has applied to the Bank for the Loan (as hereinafter defined) for the purpose of financing the Property, and the Bank is willing to make the Loan upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements herein contained, the sufficiency of which is hereby acknowledged, the parties hereto represent and agree as follows:

•

 

INCORPORATION AND DEFINITIONS

1.1          Incorporation and Definitions. The foregoing recitals and all exhibits hereto are hereby made a part of this Agreement.  The following terms shall have the following meanings in this Agreement:

“Adjusted EBITDA” means such term as defined in the Credit Agreement.

“Adjusted Net Operating Income” means, as of any measurement date, the gross income derived from the operation of the Property, on a combined basis, over the preceding 12-month period, less Operating Expenses attributable to the Property, on a combined basis, over the preceding 12-month period, accounted for on an accrual basis, in accordance with GAAP, including any rent loss or business interruption insurance proceeds, and water and sewer charges, which are actually received and Operating Expenses actually paid or payable on an accrual basis attributable to the Property as set forth on operating statements satisfactory to the Bank, less a capital expenditure reserve equal to $50 for each pad in the Property.  Notwithstanding the foregoing, Net Operating Income
shall not include (i) any condemnation or insurance proceeds (excluding rent or business interruption insurance proceeds), (ii) any proceeds resulting from the sale, exchange, transfer, financing or refinancing of all or any portion of the Property, (iii) amounts received from tenants as security deposits, (iv) amounts received from affiliates of the Borrower or the Guarantor, which amounts do not represent pass-through rent payments received from bona-fide third party tenants, (v) interest income, and (vi) any type of income otherwise included in Net Operating Income but paid directly by any tenant to anyone other than Borrower or the Guarantor or its agents or representatives.

 

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“Applicable Margin” means, with respect to LIBOR Loans, two and 05/100 percent (2.05%) per annum and, with respect to Base Rate Loans, one quarter of one percent (0.25%) per annum.

“Assignments of Rents” means such term as defined in Section 5 hereof

“Bank ” means such term as defined in the Preamble.

“Base Rate Loan” means any Loan which bears interest at a rate determined by reference to the Base Rate.

“Base Rate” means, at any time, the greater of the Federal Funds Rate plus one-half of one percent (0.50%) and the Prime Rate.

“Borrower” means such term as defined in the Preamble.

“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which banks are authorized or required to be closed for the conduct of commercial banking business in Troy, Michigan.

“Commitment Fee” means a commitment fee in the amount of One Hundred One Thousand Two Hundred Fifty and 00/100 Dollars ($101,250.00) payable to the Bank as provided in this Loan Agreement.

“Computation Period” means such term as defined in the Credit Agreement.

“Credit Agreement” means the CREDIT AGREEMENT, dated as of September 30, 2004, as amended, among the Guarantor, Sun Communities, Inc., the various financial institutions party thereto, as Lenders, and the Bank, as Administrative Agent.

“Debt Service” means, as of any measurement date, the sum of twelve monthly principal and interest payments each in the amount that would be necessary to amortize the principal balance outstanding of the Loan as of such date over a 30-year amortization period with interest at the greater of: (1) the Treasury Based Rate, or (2) Seven and One-Half percent (7.50%) per annum.

“Debt Service Coverage Ratio” means, as of any measurement date, the ratio of Adjusted Net Operating Income to Debt Service.

“Default Rate” means such term as defined in Section 4.1 hereof.

“Environmental Indemnity Agreement” means such term as defined in Section 5 hereof.

“Environmental Laws” means such term as defined in the Environmental Indemnity.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“Eurocurrency Reserve Percentage” means, with respect to any LIBOR Loan for any Interest Period, a percentage (expressed as a decimal) equal to the daily average during such Interest Period of the percentage in effect on each day of such Interest Period, as prescribed by the FRB, for determining the aggregate maximum reserve requirements applicable to “Eurocurrency Liabilities” pursuant to Regulation D or any other then applicable regulation of the 

 

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FRB which prescribes reserve requirements applicable to “Eurocurrency Liabilities” as presently defined in Regulation D.

“Event of Default” means one or more of the events or occurrences referred to in Article 11 of this Agreement.

“Federal Funds Rate” means, for any day, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Bank from three Federal funds brokers of recognized standing selected by the Bank.  The Bank’s determination of such rate shall be binding and conclusive absent manifest error.

“Fixed Charges” means such term as defined in the Credit Agreement.

“FRB” means the Board of Governors of the Federal Reserve System or any successor thereof.

"GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination, provided, however, that interim financial statements or reports shall be deemed in compliance with GAAP despite the absence of footnotes and fiscal year-end adjustments as required by GAAP.

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Guarantor” means Sun Communities Operating Limited Partnership, a Michigan limited partnership.

“Hazardous Materials” means such term as defined in the Environmental Indemnity.

“Interest Period” means, as to any LIBOR Loan, the period commencing on the date such Loan is borrowed or continued as a LIBOR Loan and ending on the date one, two, three, six, nine or twelve months thereafter as selected by Borrower pursuant to Section 4.3; provided that:

(i)            each Interest Period occurring after the initial Interest Period of any LIBOR Loan shall commence on the day on which the preceding Interest Period for such LIBOR Loan expires;

(ii)          if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day;

 

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(iii)         any Interest Period that begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iv)         Borrower may not select any Interest Period for a Loan which would extend beyond the scheduled Maturity Date.

“Lease(s)” means any and all leases, licenses or agreements for use of any part of the Property.

“Legal Requirements” means, as to any person or party, the Articles of Incorporation or Organization and bylaws, operating agreement, partnership agreement or other organizational or governing documents of such person or party, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other governmental authority, in each case applicable to or binding upon such person or party or any of its property or to which such person or party or any of its property is subject.

“LIBOR Loan” means any Loan which bears interest at a rate determined by reference to the LIBOR Rate (Reserve Adjusted).

“LIBOR Rate” means, with respect to any LIBOR Loan for any Interest Period, the per annum rate of interest at which United States dollar deposits in an amount comparable to the amount of such LIBOR Loan and for a period equal to the relevant Interest Period are offered in the London Interbank Eurodollar market at 11:00 a.m. (London time) two (2) Business Days prior to the commencement of such Interest Period (or three Business Days prior to the commencement of such Interest Period if banks in London, England were not open and dealing in offshore United States dollars on such second preceding Business Day), as displayed in the Bloomberg Financial Markets system, provided, however, if the Bloomberg’s Financial Markets
system is no longer available, the Bank, in its sole discretion, shall designate another daily financial or governmental news service or publication of national circulation to be used to determine the LIBOR Rate).

“LIBOR Rate (Reserve Adjusted)” means, with respect to any LIBOR Loan for any Interest Period, a rate per annum equal to (A) the LIBOR Rate, divided by (B) a number determined by subtracting from 1.00 the Eurocurrency Reserve Percentage.

“Loan Amount” means the principal amount of the Loan, which is Twenty Seven Million and 00/100 Dollars ($27,000,000.00).

“Loan Documents” means this Agreement, the documents specified in Article 5 hereof and any other instruments evidencing, securing or guarantying obligations of any party under the Loan.

“Loan Expenses” means such term as defined in Section 7.2(b) hereof.

“Loan Closing” means the first disbursement of the Loan.

“Loan Closing Date” means June 20, 2008.

“Loan Proceeds” means all amounts advanced as part of the Loan, whether advanced directly to Borrower or otherwise.

 

4

“Loan” or “Loans” means the loan to be made by the Bank pursuant to this Agreement which shall be comprised of LIBOR Loans and/or Base Rate Loans.

“Maturity Date” means June 20, 2011, unless extended as provided in Section 4.2(b).

“Mortgages” means such term as defined in Section 5 hereof.

“Non-Excluded Taxes” means such term as defined in Section 4.10 hereof.

“Note” means the promissory note made by Borrower payable to the Bank in the amount of the Loan and in the Form of Exhibit_“B” hereto.

“Operating Expenses” means, for any given period (and shall include the pro rata portion for such period of all such expenses attributable to, but not paid during, such period) all expenses to be paid or payable, as determined in accordance with GAAP, by Borrower during that period in connection with the operation of the Property, including without limitation:

(i)            expenses for cleaning, repair, mantenance, decoration and painting of the Property (including, without limitation, parking lots and roadways), net of any insurance preceeds in respect of any of the foregoing;

(ii)          wages (including overtime payments), benefits, payroll taxes and all other related expenses for Borrower’s on-site personnel, engaged in the repair, operation and maintenance of the Property and service to tenants and on-site personnel engaged in audit and accounting functions performed by Borrower;

(iii)         actual management fees, if any, together with any allocated management fees or similar fees received from tenants or other parties.  Such fees shall include all fees for management services whether such services are performed at the Proeprty or off-site;

(iv)         the cost of all electricity, oil, gas, water, steam, heat, ventilation, air conditioning and any other energy, utility or similar item and the cost of building and cleaning supplies;

	
             
 	
            (vi)
 	
            rent, liability, casualty and fidelity insurance premiums;
 

	
             
 	
            (vii)
 	
            legal, accounting and other professional fees and expenses;
 

(viii)       the cost of all equipment to be used in the ordinary course of business, which is not capitalized in accordance with GAAP;

	
             
 	
            (ix)
 	
            real estate and other taxes;
 

	
             
 	
            (x)
 	
            advertising and other marketing costs and expenses;
 

	
             
 	
            (xi)
 	
            casualty losses to the extent not reimbursed by a third party;
 

	
             
 	
            (xii)
 	
            any ground lease payments; and
 

(xiii)       all amounts that should be reserved, as reasonably determined by Borrower with approval by the Bank in its reasonable discretion, for repair or maintenance of the Property and to maintain the value of the Property.

 

5

Nothwithstanding the foregoing, Operating Expenses shall not include (i) depreciation or amortization or any other non-cash item of expense; (ii) interest, principal, fees, costs and expense reimbursements of the Bank in administering the Loan but not in exercising any of its rights under this Agreement or the Loan Documents; or (iii) any expenditure (other than leasing commissions, tenant concessions and improvements, and replacement reserves) which is properly treatable as a capital item under GAAP.

“Permitted Exceptions” means the title exceptions specified as permitted exceptions in each of the Mortgages, together with such additional exceptions as may be approved in writing by the Bank or are permitted by the terms hereof.

“Prime Rate” means  For any day, the rate of interest most recently announced by the Bank at Troy, Michigan as its prime or base rate.  A certificate made by an officer of the Bank stating the Prime Rate in effect on any given day, for the purposes hereof, shall be conclusive evidence of the Prime Rate in effect on such day.  The Prime Rate is a base reference rate of interest adopted by the Bank as a general benchmark from which the Bank determines the floating interest rates chargeable on various loans to borrowers with varying degrees of creditworthiness and Borrower acknowledges and agrees that the Bank has made no representations whatsoever that the Prime Rate is the interest rate actually offered by the Bank to borrowers of any particular creditworthiness.  The effective date of any change in the Prime Rate
shall for purposes hereof be the date the Prime Rate is changed by the Bank.  The Bank shall not be obligated to give notice of any change in the Prime Rate.

“Property” means such term as defined in the Recitals to this Agreement.

“Regulatory Change” means the introduction of, or any change in any applicable law, treaty, rule, regulation or guideline or in the interpretation or administration thereof by any governmental authority or any central bank or other fiscal, monetary or other authority having jurisdiction over the Bank or its lending offices.

“State” means the state in which the Property is located.

“Title Company” means LandAmerica LawyersTitle Insurance Company.

“Total Leverage Ratio” means such term as defined in the Credit Agreement.

“Treasury Based Rate” means a per annum rate of interest equal to (i) two and 00/100 percent (2.00%) plus (ii) the yield (converted as necessary to an annual interest rate) on 10-year United States Treasury Securities at approximately 8:00 a.m. Troy, Michigan time two (2) Business Day prior to the measurement date, as displayed in the Bloomberg’s Financial Markets system, provided, however, if the Bloomberg’s Financial Markets system is no longer available, the Bank, in its sole discretion, shall designate another daily financial or governmental news service or publication of national circulation to be used to determine such yield).

ARTICLE 2

 

REPRESENTATIONS AND WARRANTIES

2.1          Representations and Warranties.  To induce the Bank to execute and perform this Agreement, Borrower hereby represents, covenants and warrants to the Bank as follows:

 

6

(a)           At the Loan Closing and at all times thereafter until the Loan is paid in full, each Borrower will have good and merchantable fee simple title to the Property that it owns, subject only to the Permitted Exceptions;

(b)           Each Borrower is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Michigan and is qualified to conduct business in the State of Michigan.  Borrower has full power and authority to conduct its business as presently conducted, to own and operate the Property, to enter into this Agreement and to perform all of its duties and obligations under this Agreement and under the Loan Documents; such execution and performance have been duly authorized by all necessary Legal Requirements; neither Borrower nor Guarantor has been convicted of a felony and there are no proceedings or investigations being conducted involving criminal activities of either Borrower or Guarantor;

(c)           This Agreement, the Note, the Mortgages, the other Loan Documents and any other documents and instruments required to be executed and delivered by Borrower and/or Guarantor in connection with the Loan, when executed and delivered, will constitute the duly authorized, valid and legally binding obligations of the party required to execute the same and will be enforceable strictly in accordance with their respective terms (except to the extent that enforceability may be affected or limited by applicable bankruptcy, insolvency and other similar debtor relief laws affecting the enforcement of creditors’ rights generally); no basis presently exists for any claim against the Bank under this Agreement, under the Loan Documents or with respect to the Loan;
enforcement of this Agreement and the Loan Documents are subject to no defenses of any kind;

(d)           The execution, delivery and performance of this Agreement, the Note, the Mortgages, the other Loan Documents and any other documents or instruments to be executed and delivered by Borrower or Guarantor pursuant to this Agreement or in connection with the Loan and occupancy and use of the Property will not:  (i) violate any Legal Requirements, or (ii) conflict with, be inconsistent with, or result in any breach or default of any of the terms, covenants, conditions or provisions of any indenture, mortgage, deed of trust, instrument, document, agreement or contract of any kind to which Borrower or Guarantor is a party or by which any of them may be bound.  Neither Borrower nor Guarantor is in default (without regard to grace or cure periods) under any
contract or agreement to which it is a party, the effect of which default will adversely affect the performance by Borrower or Guarantor of its obligations pursuant to and as contemplated by the terms and provisions of this Agreement and/or the other Loan Documents;

(e)           No condition, circumstance, event, agreement, document, instrument, restriction, litigation or proceeding (or threatened litigation or proceeding or basis therefor) exists which could (i) adversely affect the validity or priority of the liens and security interests granted the Bank under the Loan Documents; (ii)  materially adversely affect the ability of Borrower or Guarantor to perform their obligations under the Loan Documents; or (iii) constitute an Event of Default under any of the Loan Documents or an event which, with the giving of notice, the passage of time or both, would constitute such an Event of Default;

(f)           The Property, and the present use and occupancy of the Property, will not violate or conflict with any applicable law, statute, ordinance, rule, regulation or order of any kind in any material respect, including, without limitation, Environmental Laws, zoning, building, land use, noise abatement, occupational health and safety or other laws, any building permit or any condition, grant, easement, covenant, condition or restriction, whether recorded or not, and if a third-party is required under any covenants, conditions and restrictions of record or any other 

 

7

agreement to consent to the use and/or operation of the Property, Borrower has obtained such approval from such party.  In addition, and without limiting the foregoing, Borrower shall (a) ensure that no person or entity which owns a controlling interest in or otherwise controls Borrower is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or included in any Executive Orders, (b) not use or permit the use of any Loan Proceeds to violate any of the foreign asset control regulations of OFAC or any enabling statute or Executive Order relating thereto, and (c) comply with all applicable Bank Secrecy Act laws and regulations, as amended;

(g)           The Property has never been used, and the Property will not be used, for any activities which, directly or indirectly, involve the use, generation, treatment, storage, transportation or disposal of any Hazardous Materials in material violation of any Environmental Laws.  No Hazardous Materials exist now, and no Hazardous Materials will hereafter exist, on or under the Property in material violation of any Environmental Laws or in any surface waters or groundwaters on or under the Property having a material adverse impact on the Property.  The Property and its existing and prior uses have at all times materially complied with and will comply with all Environmental Laws, and Borrower has not violated, and will not violate, any Environmental Laws;

(h)           There are no facilities on the Property which are subject to reporting under any State laws or Section 312 of the Federal Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. Section 11022), and federal regulations promulgated thereunder.  The Property does not contain any underground storage tanks;

(i)            All financial statements submitted by Borrower or Guarantor to the Bank in connection with the Loan are true and correct in all material respects, have been prepared in accordance with generally accepted accounting principles consistently applied, and fairly present the respective financial conditions and results of operations of the entities which are their subjects;

(j)            This Agreement and all financial statements, budgets, schedules, opinions, certificates, confirmations, applications, rent rolls, affidavits, agreements, and other materials submitted to the Bank in connection with or in furtherance of this Agreement by or on behalf of Borrower or Guarantor fully and fairly state the matters with which they purport to deal, and neither misstate any material fact nor, separately or in the aggregate, fail to state any material fact necessary to make the statements made not misleading;

(k)           All governmental permits and licenses required by applicable law to occupy and operate the Property have been validly issued and are in full force;

(l)            Improvements on the Property do not encroach upon any building line, set back line, sideyard line, or any recorded or visible easement (or other easement of which Borrower is aware or has reason to believe may exist) which exists with respect to the Property;

(m)         The Loan, including interest rate, fees and charges as contemplated hereby, is a business loan; the Loan is an exempted transaction under the Truth In Lending Act, 12 U.S.C. § 1601 et seq.; and the Loan does not, and when disbursed will not, violate the provisions of the usury laws of the State, any consumer credit laws or the usury laws of any state which may have jurisdiction over this transaction, Borrower or any property securing the Loan; and

 

8

(n)           The Leases are in full force and effect; no material defaults have occurred thereunder, except those defaults with respect to which the Borrower is taking appropriate collection or enforcement proceedings in the ordinary course of business; no tenant under any Lease has a right of set-off against payment of rent due thereunder; and enforcement of the Leases by Borrower or by the Bank pursuant to an exercise of the Bank’s rights under the Assignment of Leases and Rents would be subject to no defenses of any kind.

2.2          Continuation of Representations and Warranties.  The Borrower hereby covenants, warrants and agrees that the representations and warranties made in Section 2.1 hereof shall be and shall remain true and correct at the time of the Loan Closing and at all times thereafter so long as any part of the Loan shall remain outstanding.

ARTICLE 3

 

AMOUNT AND TERMS OF LOAN

 

	
             
  	
            3.1
 	
            Agreement to Lend and to Borrow; Note.
 

(a)           Subject to the conditions and upon the terms provided for in this Agreement, the Bank agrees to make the Loan to Borrower in the principal amount of the Loan Amount.

(b)           The Loan shall be evidenced by a Note of Borrower, substantially in the form of Exhibit_“B” hereto, payable to the order of the Bank.  The date, amount and type of each Loan and payment or prepayment of principal with respect thereto, each continuation thereof, and the length of each Interest Period with respect to each LIBOR Loan shall be recorded by the Bank on its books and, at the discretion of the Bank, endorsed by the Bank, on schedules annexed to and constituting a part of the Note.  Each such recordation shall constitute prima facie evidence of the accuracy of the information so recorded in the absence of manifest error.  The Note shall (i) be dated the date hereof, (ii) be stated to
mature on the Maturity Date, and (iii) provide for the payment of princial and interest in accordance with Article 4 hereof.

(c)           No portion of any Loan shall be funded with plan assets of (i) any employee benefit plan subject to Title I of ERISA, (ii) any plan covered by Section 4975 of the Code, or (iii) any government plan subject to state laws that are comparable to Title I of ERISA or Section 4975 of the Code.

ARTICLE 4

 

PRINCIPAL, INTEREST; SPECIAL PROVISIONS FOR LIBOR LOANS

4.1          Interest Rates.  Borrower promises to pay interest on the unpaid principal amount of the Loan for the period commencing on the date of such Loan until such Loan is paid in full as follows:

(a)           at all times while such Loan is a LIBOR Loan, at a rate per annum equal to the sum of the LIBOR Rate (Reserve Adjusted) applicable to each Interest Period for such Loan plus the Applicable Margin from time to time in effect; and

(b)           at all times while such Loan is a Base Rate Loan, at a rate per annum equal to the sum of the Base Rate from time to time in effect plus the Applicable Margin from time to time in effect;

 

9

provided that at any time an Event of Default exists, the interest rate applicable to each Loan shall be increased by two percent (2.00%) (the “Default Rate”).

 

	
             
  	
            4.2
 	
            Payment of Principal and Interest.
 

(a)           Principal and interest on the Loan shall be payable as provided in the Note.  The outstanding principal balance of the Loan shall be due and payable in full on the Maturity Date, unless the Loan is otherwise accelerated, terminated or extended as provided in this Agreement.

(b)           The Borrower shall be entitled to extend the Maturity Date for an additional period of two (2) years from the initial Maturity Date upon notice given by the Borrower to the Bank at least thirty (30) days prior to the initial Maturity Date, provided that, as of the initial Maturity Date: (i) no Event of Default, after the expiration of any applicable notice and cure periods, shall have occurred and be continuing; and (ii) the Borrower shall pay to the Bank, on or before the initial Maturity Date, an extension fee in an amount equal to twelve and one-half basis points (0.125%) of the outstanding principal balance of the Loan as of the initial Maturity Date.

(c)           Prior to the occurrence of an Event of Default, all payments and prepayments on account of the indebtedness evidenced by the Note shall be applied as follows: (i) first, to fees, expenses, costs and other similar amounts then due and payable to the Bank, (ii) second, to accrued and unpaid interest on the principal balance of the Note, (iii) third, to the payment of principal due in the month in which the payment or prepayment is made, if any, (iv) fourth, to any escrows, impounds or other amounts which may then be due and payable under the Loan Documents, (v) fifth, to any other amounts then due the Bank hereunder or under any of the Loan Documents, and (vi) last, to the unpaid principal balance of the Note.  After an Event of
Default has occurred and is continuing, payments shall be applied as required under applicable law and in the absence of any such requirements, payments may be applied to amounts owed hereunder and under the Loan Documents in such order as the Bank shall determine, in its sole discretion.

(d)           All payments of principal (including prepayments) and accrued interest shall be paid by wire transfer or check in United States Dollars, to the Bank at such place as the Bank may from time to time direct, and in the absence of such direction, then at the offices of the Bank at 2600 West Big Beaver Road, Troy, Michigan 48084.  Payment made by check shall be deemed paid on the date the Bank receives such check; provided, however, that if such check is subsequently returned to the Bank unpaid due to insufficient funds or otherwise, the payment shall not be deemed to have been made and shall continue to bear interest until collected.  Notwithstanding the foregoing, the final payment due under the Note must be made by wire transfer or other immediately available funds.

(e)           If any payment of interest or principal due hereunder is not made within five days after such payment is due in accordance with the terms hereof, then, in addition to the payment of the amount so due, Borrower shall pay to the Bank a “late charge” of five cents for each whole dollar so overdue to defray part of the cost of collection and handling such late payment.  Borrower agrees that the damages to be sustained by the holder hereof for the detriment caused by any late payment are extremely difficult and impractical to ascertain, and that the amount of five cents for each one dollar due is a reasonable estimate of such damages, does not constitute interest, and is not a penalty.

(f)           LIBOR Loans and Base Rate Loans may be prepaid either in whole or in part at any time and from time to time without penalty or premium upon three (3) days prior notice to the 

 

10

Bank; provided, however, that if a LIBOR Loan is prepaid on a date other than the last day of the applicable Interest Period, it shall be accompanied by any amounts due under Section 4.11 hereof.

 

	
             
  	
            4.3
 	
            Types of Loans; Setting and Notice of LIBOR Rates.
 

(a)           The Loan shall be divided into tranches which are either a Base Rate Loan or a LIBOR Loan (each a “type” of Loan), as Borrower shall specify in such manner as designated by the Bank.  Base Rate Loans and LIBOR Loans may be outstanding at the same time, provided that not more than five (5) different tranches of LIBOR Loans shall be outstanding at any one time.  Each LIBOR Loan shall be designated by the Borrower by any written, verbal, electronic, telephonic or telecopy request, in form acceptable to the Bank, which the Bank in good faith believes to emanate from a properly authorized representative of the Borrower, whether or not that is in fact the case.  Each such request shall be effective upon receipt by the Bank, shall be irrevocable, and shall
specify the date, amount and the initial Interest Period therefor.  The final Interest Period for any LIBOR Loan must be such that its expiration occurs on or before the Maturity Date.  A request to designate a LIBOR Loan must be (i) received by the Bank no later than 11:00 a.m. Troy, Michigan time, three days before the day it is to be designated a LIBOR Loan, and (ii) in an amount equal to Five Hundred Thousand and 00/100 Dollars ($500,000.00) or a higher integral multiple of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00).  The Borrower does hereby irrevocably confirm, ratify and approve all such designations and does hereby indemnify the Bank against losses and expenses (including court costs, attorneys’ and paralegals’ fees) and shall hold the Bank harmless with respect thereto.

(b)           The applicable LIBOR Rate for each Interest Period shall be determined by the Bank, and notice thereof shall be given by the Bank promptly to Borrower.  The Bank shall, upon written request of Borrower, deliver to Borrower a statement showing the computations used by the Bank in determining any applicable LIBOR Rate hereunder.

 

	
             
  	
            4.4
 	
            Conversion and Continuation Procedures.
 

(a)           Each LIBOR Loan shall automatically renew for the Interest Period specified in the initial request received by the Bank for the LIBOR Loan, at the then current LIBOR Rate unless the Borrower, pursuant to a subsequent written notice received by the Bank, shall elect a different Interest Period.  Upon receipt by the Bank of such subsequent notice, the Borrower may, subject to the terms and conditions of this Agreement, elect, as of the last day of the applicable Interest Period, to continue any LIBOR Loan having an Interest Period expiring on such day for a different Interest Period.  Such notice shall be given before 11:00 a.m., Troy, Michigan time, at least three Business Days prior to the last day of the applicable Interest Period, specifying: (i) the aggregate
amount of LIBOR Loans to be converted to a different Interest Period; and (ii) the duration of the requested Interest Period.

(b)           The Borrower may not elect an Interest Period, and an Interest Period for a LIBOR Loan shall not automatically renew, with respect to any principal amount which is scheduled to be repaid before the last day of the applicable Interest Period, and any such amounts shall be converted to Base Rate Loans until repaid.

 

	
             
  	
            4.5
 	
            Computation of Interest and Fees.
 

(a)           Fees and interest shall be calculated on the basis of a 360 day year for the actual days elapsed in any portion of a month in which interest is due.  Interest on Base Rate Loans and LIBOR Loans shall not exceed the maximum amount permitted under applicable law.  Any 

 

11

change in the interest rate on a Loan resulting from a change in the Base Rate, or the Eurocurrency Reserve Percentage, shall become effective as of the opening of business on the day on which such change becomes effective.  The Bank shall as soon as practicable notify Borrower of each determination of a LIBOR Rate.

(b)           Each determination of an interest rate by the Bank pursuant to any provision of this Agreement shall be conclusive and binding upon the parties hereto in the absence of manifest error.

4.6          Inability to Determine Interest Rate.  If prior to the first day of any Interest Period, (a) the Bank shall have determined (which determination shall be conclusive, absent manifest error) that (i) the making or maintenance of any LIBOR Loan would violate any applicable law, rule, regulation or directive, whether or not having the force of law, (ii) United States dollar deposits in the principal amount, and for periods equal to the Interest Period for funding any LIBOR Loan are not available in the London Interbank Eurodollar market in the ordinary course of business, or (iii) by reason of circumstances affecting the London Interbank Eurodollar market, adequate and fair means do not exist for ascertaining the
LIBOR Rate to be applicable to the relevant LIBOR Loan, or (b) the Bank shall have determined that the LIBOR Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to the Bank (as conclusively certified by the Bank) of making or maintaining the affected Loans during such Interest Period, the Bank shall give telecopy or telephonic notice thereof to Borrower as soon as practicable thereafter and, so long as such circumstances shall continue, (A) the Bank shall not be under any obligation to make any LIBOR Loans or convert any Base Rate Loans into LIBOR Loans, and (B) on the last day of the current Interest Period for each LIBOR Loan, such Loan, unless then repaid in full, shall automatically convert to a Base Rate Loan, without further demand, presentment, protest or notice of any kind, all of which are hereby waived by the Borrower.

4.7          Payments.  All payments (including prepayments) to be made by Borrower hereunder and under the Note, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 1:00 P.M., Troy, Michigan time, on the due date thereof.  If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension.

4.8          Illegality.  Notwithstanding any other provision herein, if the Bank shall have reasonably determined that any Regulatory Change shall make it unlawful for the Bank to make or maintain LIBOR Loans as contemplated by this Agreement, the Bank shall give notice of such determination to Borrower and (A) the commitment of the Bank hereunder to make LIBOR Loans, continue LIBOR Loans as such and convert Base Rate Loans to LIBOR Loans shall forthwith be canceled and (B) the LIBOR Loans then outstanding, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such LIBOR Loans or within such earlier period as required by law.  If any such conversion
of a LIBOR Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, Borrower shall pay to the Bank such amounts, if any, as may be required pursuant to subsection 4.11.

 

	
             
  	
            4.9
 	
            Legal Requirements.
 

	
             
  	
            (a)
 	
            If any Regulatory Change made subsequent to the date hereof shall:
 

(i)          subject the Bank to any tax of any kind whatsoever with respect to this Agreement, the Note or any LIBOR Loan made by it, or change the basis of taxation of 

 

12

payments to the Bank in respect thereof (except for Non-Excluded Taxes covered by subsection 4.10 and changes in the rate of tax on the overall net income of the Bank);

(ii)        impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of the Bank which is not otherwise included in the determination of the LIBOR Rate; or

(iii)       impose on the Bank any other condition regarding the LIBOR Loans or the Bank’s funding thereof; 

and the result of any of the foregoing is to increase the cost to the Bank, by an amount which the Bank in good faith deems to be material, of making, converting into, continuing or maintaining LIBOR Loans or to reduce any amount receivable hereunder in respect thereof, then, in any such case, Borrower shall promptly pay the Bank, upon its demand, any additional amounts necessary to compensate the Bank for such increased cost or reduced amount receivable.

(b)           If the Bank shall have determined that any Regulatory Change regarding capital adequacy or in the interpretation or application thereof or compliance by the Bank or any corporation controlling the Bank with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority, in any such case made subsequent to the date hereof, does or shall have the effect of reducing the rate of return on the Bank’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which the Bank or such corporation could have achieved but for such change or compliance (taking into consideration the Bank’s or such corporation’s policies with respect to capital adequacy)
by an amount deemed by the Bank to be material, then from time to time, after submission by the Bank to Borrower (with a copy to the Bank) of a written request therefor, Borrower shall pay to the Bank such additional amount or amounts as will compensate the Bank for such reduction.

(c)           If the Bank becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify Borrower of the event by reason of which it has become so entitled.  A certificate as to any additional amounts payable pursuant to this subsection submitted by the Bank to Borrower shall be conclusive in the absence of manifest error.  This covenant shall survive the termination of this Agreement and the payment of the Note and all other amounts payable hereunder.

(d)           Notwithstanding anything to the contrary contained in this subsection, Borrower shall not be required to pay any additional amounts to the Bank pursuant to this subsection to the extent such additional amounts result from the Bank’s negligence.

4.10        Taxes.  All payments made by Borrower under this Agreement and the Note shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Bank as a result of a present or former connection between the Bank and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Bank having
executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or the Note).  If any such non-excluded taxes, 

 

13

levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) are required to be withheld from any amounts payable to the Bank hereunder or under the Note, the amounts so payable to the Bank shall be increased to the extent necessary to yield to the Bank (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that Borrower shall not be required to increase any such amounts payable to the Bank that is not organized under the laws of the United States of America or a state thereof if the Bank fails to comply with the requirements of paragraph (b) of this subsection.  Whenever any Non-Excluded Taxes are payable by Borrower, as promptly as possible thereafter Borrower shall send to the Bank a certified
copy of an original official receipt received by Borrower showing payment thereof.  If Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Bank the required receipts or other required documentary evidence, Borrower shall indemnify the Bank for any incremental taxes, interest or penalties that may become payable by the Bank as a result of any such failures.  The agreements in this subsection shall survive the termination of this Agreement and the payment of the Note and all other amounts payable hereunder.  Notwithstanding anything to the contrary contained in this subsection, Borrower shall not be required to pay any additional amounts to the Bank pursuant to this subsection to the extent such additional amounts result from the Bank’s negligence.

4.11        LIBOR Loan Indemnification.  Borrower agrees to indemnify the Bank and to hold the Bank harmless from any loss or expense which the Bank may sustain or incur as a consequence of (a) default by Borrower in making a borrowing of, conversion into or continuation of LIBOR Loans after Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by Borrower in making any prepayment after Borrower has given a notice thereof in accordance with the provisions of this Agreement, or (c) the making of a prepayment of LIBOR Loans on a day which is not the last day of an Interest Period with respect thereto.  Such indemnified amount shall include any and all costs, expenses, penalties and
charges incurred by the Bank as a result thereof, plus an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or borrowed, converted or continued, for the period from the time of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of the failure to borrow, convert or continue, the Interest Period which would have commenced on the date of such failure) in each case the applicable rate of interest for such Loans provided herein (excluding, however, the Applicable Margin included thereon, if any) over (ii) the amount of interest (as reasonably defined by the Bank) which would have accrued to the Bank on such amount by placing such amount on deposit for a comparable period with leading banks in the certificate of deposit market, the eurodollar deposit market, or other appropriate money market selected by the Bank.  This covenant shall survive
the termination of this Agreement and the payment of the Note and all other amounts due hereunder.  Amounts payable pursuant to this subsection shall be paid to the Bank, upon the request of the Bank and a determination of the Bank as to the amounts payable pursuant to this subsection shall be conclusive absent manifest error, based upon the assumption that the Bank funded its loan commitment for LIBOR Loans in the London Interbank Eurodollar market and using any reasonable attribution or averaging methods which the Bank deems appropriate and practical, provided, however, that the Bank is not obligated to accept a deposit in the London Interbank Eurodollar market in order to charge interest on a LIBOR Loan at the LIBOR Rate.

ARTICLE 5

 

LOAN DOCUMENTS

5.1          Loan Documents.  As a condition precedent to the Loan Closing, Borrower agrees that it will deliver the following Loan Documents to the Bank at the Loan Closing, all of which must be satisfactory to the Bank and the Bank’s counsel in form, substance and execution:

 

14

(a)           Promissory Note.  A promissory note dated the date hereof executed by Borrower and made payable to the order of the Bank in the amount of the Loan Amount in the form of Exhibit_“B” attached hereto.

(b)           Mortgages.  Mortgages dated as of even date herewith (the “Mortgages”), duly executed by Borrower to and for the benefit of the Bank, granting a first lien on the Property to the Bank to secure the Note, the Loan and all obligations of Borrower in connection therewith.

(c)           Assignment of Rents and Leases.  Assignments of Rents and Leases dated as of even date herewith (the “Assignments of Rents”), duly executed by Borrower to and for the benefit of the Bank, collaterally assigning to the Bank all of Borrower’s rents, leases and profits of the Property as security for the Note.

(d)           Financing Statements.  Uniform Commercial Code Financing Statements as required by the Bank to perfect all security interests granted by the Mortgages.

(e)           Environmental Indemnity.  Environmental Indemnity Agreements dated as of even date herewith (the “Environmental Indemnity”), jointly and severally executed by Borrower and Guarantor to and for the benefit of the Bank whereby Borrower and Guarantor jointly and severally indemnify the Bank for any loss, cost, damage or expense incurred as a result of environmental matters at the Property.

(i)           Guaranty.  A Continuing Guaranty (the “Guaranty”) executed by Guarantor to and for the benefit of the Bank, guaranteeing to the Bank payment of the principal balance outstanding under the Loan at maturity (whether upon demand, at stated maturity or at maturity accelerated by reason of the Borrower's default under the terms of any of the Loan Documents), plus interest accrued and unpaid with respect to the Loan and all other amounts payable in connection therewith, plus all indebtedness and liability of the Borrower to the Bank under any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to
protect against fluctuations in interest rates, currency exchange rates or commodity prices in connection with the Loan.

(f)           Other Loan Documents.  Such other documents and instruments as further security for the Loan as the Bank may reasonably require.

ARTICLE 6

 

CONDITIONS TO LOAN CLOSING

6.1          Conditions to Loan Closing.  As a condition precedent to the Loan Closing, Borrower shall furnish the following to the Bank at least five (5) days prior to the Loan Closing or at such time as is set forth below, all of which must be strictly satisfactory to the Bank and the Bank’s counsel in form, content and execution:

(a)           Title Insurance Policy.  At the Loan Closing, an ALTA Loan Policy-1997 issued on the date of the Loan Closing by the Title Company to the Bank in the full amount of the Loan, insuring the Mortgages to be valid first, prior and paramount liens upon the fee title to the Property subject only to the Permitted Exceptions (the “Title Insurance Policy”).  The Title Insurance Policy must contain the following endorsements:  (i) ALTA Zoning Endorsement Form 3.1; (ii) Comprehensive Endorsement; (iii) location endorsement; (iv) access endorsement; (v) if a Property consists of more than one subparcel, contiguity endorsement; (vi) environmental lien 

 

15

endorsement; (vii) creditor’s rights endorsement; (viii) variable rate endorsements, if applicable; and (ix) such other endorsements as the Bank may require.  If required by the Bank, Borrower shall procure reinsurance with companies and in amounts satisfactory to the Bank.

(b)           Survey.  Copies of Borrower’s existing surveys of each Property together with affidavits of the Borrowers satisfactory to the Title Company and the Bank to the effect that there have been no material changes to the Property since the date of each survey, except as disclosed in such affidavits.

(c)           Insurance Policies.  Borrower shall, during the term of this Agreement, procure at its expense and keep in force the insurance coverages required by the Mortgages.  In addition, all insurance shall be in form, content and amounts approved by the Bank and written by an insurance company or companies licensed to do business in the state in which the Property is located and domiciled in the United States or a governmental agency or instrumentality approved by the Bank.  The policies for such insurance shall have attached thereto standard mortgagee clauses in favor of and permitting the Bank to collect any and all proceeds payable thereunder and shall include a thirty (30) day (except for nonpayment of premium, in which case, a ten
(10) day) notice of cancellation clause in favor of the Bank.  Duplicate policies or certificates of insurance shall be delivered to and held by the Bank as further security for the payment of the Note and any other obligations arising under the Loan Documents, with evidence of renewal coverage delivered to the Bank at least thirty (30) days before the expiration date of any policy.

(d)           Environmental Report.  A written report (the “Environmental Report”) prepared at Borrower’s sole cost and expense by an independent professional environmental consultant approved by the Bank in its sole and absolute discretion.  The Environmental Report shall be subject to the Bank’s approval in its sole and absolute discretion.  If the Environmental Report reveals contamination or conditions warranting further investigation in order to establish baseline data, the Bank may require, in its sole and absolute discretion, a written report (also referred to herein as the “Environmental Report”) based on
additional testing and investigation in order to define the source and extent of the contamination or to establish baseline data, as well as to provide relevant detailed information on the area’s geological and hydrogeological conditions.  Any additional Environmental Report prepared pursuant to this requirement shall be subject to the Bank’ approval, in its sole and absolute discretion.

(e)           Appraisals.  Appraisals addressed and satisfactory to the Bank, prepared by a certified or licensed appraiser who is approved by the Bank.  The appraisals must show appraised values of the Property such that the ratio of the Loan Amount to the total of the appraised values of the Property shall be no more than seventy five percent (75.00%).

(f)           Documents of Record.  Copies of all covenants, conditions, restrictions, easements and matters of record which affect the Property.

(g)           Searches.  A report from the appropriate filing officers of the state and county in which the Property is located, indicating that no judgments, tax or other liens, security interests, leases of personalty, financing statements or other encumbrances (other than Permitted Exceptions and liens and security interests in favor of the Bank) are of record or on file encumbering any portion of the Property, and that there are no judgments, tax liens, pending litigation or bankruptcy actions outstanding with respect to Borrower and the Guarantor.

 

16

(h)           Borrower’s Attorney’s Opinion.  An opinion of Borrower’s counsel addressing such issues as the Bank may request, including the following propositions and questions of law that:

(i)          Borrower, its manager or general partner, as applicable, and, if Guarantor is not an individual, Guarantor, are duly organized, validly existing and in good standing to do business in the state of their respective organization and in the State;

(ii)         Borrower has all necessary legal right, power and authority to conduct its business, to operate and use the Property and to enter into and perform its obligations under this Agreement and the Loan Documents;

(iii)       all necessary corporate, shareholder, membership, partnership approvals, resolutions and directions have been obtained for the operation and use of the Property and the execution of this Agreement and the Loan Documents;

(iv)        the execution and delivery of this Agreement and the Loan Documents, the performance thereunder by Borrower will comply with all applicable law in all material respects and will not violate with the instruments under which Borrower is organized or any applicable contracts or agreements; and

(v)         the Loan Documents and this Agreement have been duly and validly executed and delivered, are enforceable in accordance with their respective terms (subject to bankruptcy laws and laws pertaining to the exercise of creditors’ rights generally) and are subject to no defenses of any kind.

(i)            Organizational Documents.  If Borrower is a partnership (and if any general partner of Borrower is a partnership), a copy of the partnership agreement creating Borrower (and such general partner) certified by a general partner of such partnership as being a true and correct copy and as otherwise unmodified and in full force and effect, together with a notarized incumbency certificate showing specimen signatures for all partners of Borrower executing any Loan Documents.  In addition, if Borrower is a limited partnership (or if any general partner of Borrower is a limited partnership), a certified copy of the certificate of limited partnership (and amendments thereto) of such partnership.  If Borrower is a corporation (or if
any general partner of Borrower is a corporation), a current Certificate of Good Standing for Borrower (or that partner) from the state of incorporation and from the State, a certified copy of the Articles of Incorporation and Bylaws, including all amendments thereto, for Borrower (or that partner) and a notarized incumbency certificate showing specimen signatures for all officers of Borrower (or that partner) executing any Loan Documents, and certified copies of director and shareholder resolutions authorizing execution and delivery of the Loan Documents.  If Borrower is a limited liability company (or if any manager or general partner of Borrower is a limited liability company), a copy of the operating agreement creating Borrower (or such manager or partner), certified by the manager or the controlling member of such entity as being a true and correct copy and as otherwise unmodified and in full force and effect, together with a current Certificate of Good Standing for Borrower (and
its manager or general partner) from the state of incorporation and the State, a certified copy of the Articles of Organization, including all amendments thereto, for Borrower (and its manager or general partner), a certificate from the manager or controlling member providing that no certificate of dissolution has been filed, a notarized incumbency certificate showing specimen signatures for all of the members of Borrower (and its manager or general partner) executing any Loan Documents and, if necessary, certified copies of resolutions from the members authorizing execution and delivery of the Loan Documents.  Borrower shall 

 

17

also provide the appropriate organizational documents for Guarantor that is not an individual, together with proper authorizing resolutions, if applicable.

(j)            Rent Rolls.  Certified copies of the rent rolls for the Property listing the tenants in each Property, the rent payable by each tenant, the date of commencement and expiration of each lease in the Property, and such other information as the Bank may require.

(k)           Real Estate Taxes.  Copies of the most recent real estate tax bills for the Property and evidence satisfactory to the Bank that the Property is separately assessed for real estate taxing purposes.

(l)            Broker.  Evidence satisfactory to the Bank that all brokers’ commissions or fees due with respect to the Loan or the Property have been paid in full in cash.

(m)         Additional Documents.  Such other papers and documents regarding Borrower or the Property as the Bank may require.

6.2          Termination of Agreement.  Borrower agrees that all conditions precedent to the Loan Closing will be complied with on or prior to the Loan Closing Date.  If all of the conditions precedent to the Loan Closing hereunder shall not have been performed on or before the Loan Closing Date, the Bank may, at its option at any time thereafter and prior to the Loan Closing, terminate this Agreement and all of its obligations hereunder by giving a written notice of termination from the Bank to Borrower.  In the event of such termination, Borrower shall pay all Loan Expenses which have accrued or been charged as of the Loan Closing Date.

ARTICLE 7

 

DISBURSEMENT

7.1          Conditions Precedent to Disbursement of Loan Proceeds.  The Loan Closing shall be made at such time as all of the conditions and requirements of this Agreement required to be performed by Borrower or other parties prior to the Loan Closing have been satisfied or performed, unless the same shall have been waived in writing by the Bank; but in no event shall the Loan Closing occur later than the Loan Closing Date.  At the Loan Closing, the Bank shall disburse funds necessary to pay any Loan Expenses then due, unless paid by Borrower.  The Loan Proceeds shall not be disbursed by the Bank to Borrower unless:

	
             
  	
            (a)
 	
            the Borrower shall have paid the Commitment Fee to the Bank;
 

(b)           all conditions precedent to that disbursement under the Loan Documents have been satisfied;

(c)           no Event of Default has occurred under this Agreement or under any Loan Document, and no event, circumstance or condition has occurred or exists which, with the passage of time or the giving of notice, would constitute a Event of Default under this Agreement or under the Loan Documents;

(d)           no litigation or proceedings are pending or threatened (including proceedings under Title 11 of the United States Code) against Borrower, Guarantor or the Property, which litigation or proceedings, in the sole and exclusive judgment of the Bank, is material; and

 

18

(e)           all representations and warranties made by Borrower to the Bank herein and otherwise in connection with the Loan are accurate in all material respects.

7.2          Expenses and Advances Secured by Mortgages.  Any and all advances or payments made by the Bank hereunder, from time to time, and any amounts expended by the Bank pursuant to this Agreement and all other Loan Expenses, as and when advanced or incurred, shall be deemed to have been disbursed as part of the Loan and be and become secured and guaranteed by the Loan Documents to the same extent and effect as if the terms and provisions of this Agreement were set forth therein, whether or not the aggregate of such indebtedness shall exceed the face amount of the Note.

7.3          Acquiescence not a Waiver.  To the extent that the Bank may have acquiesced (whether intentionally or unintentionally) in the Borrower’s failure to comply with and satisfy any condition precedent to the Loan Closing or to the disbursement of the Loan Proceeds, such acquiescence shall not constitute a waiver by the Bank of any condition precedent set forth in this Agreement, and the Bank at any time thereafter may require the Borrower to comply with and satisfy all conditions and requirements of this Agreement.

7.4          The Bank’s Action for the Bank’s Own Protection Only.  The authority herein conferred upon the Bank and any action taken by the Bank or its agents or employees will be taken by the Bank and by its agents or employees for their own protection only, and neither the Bank nor its agents or employees shall be deemed to have assumed any responsibility to Borrower or Guarantor or any other person or entity with respect to any such action herein authorized or taken by them.

ARTICLE 8

 

FURTHER AGREEMENTS OF BORROWER

 

	
             
  	
            8.1
 	
            Furnishing Information.  Borrower will:
 

(a)           Furnish to the Bank quarterly management prepared operating statements for each Property, including consolidated balance sheets and income statements, prepared in accordance with GAAP, for the most recently completed quarter of each fiscal year and fiscal year to date, within 45 days after the end of each quarter of each fiscal year, beginning with the period ending September, 2008;

(b)           Promptly notify the Bank of any condition or event which constitutes (or which, with the giving of notice or lapse of time, or both, would constitute) an Event of Default, and of any material adverse change in the financial condition of Borrower or Guarantor;

(c)           Maintain a standard and modern system of accounting in accordance with generally accepted accounting principles, consistently applied;

(d)           Permit the Bank or any of its agents or representatives to have access to and to examine and copy and make abstracts from all books and records regarding the Property at any time or times hereafter during business hours.

8.2          Debt Service Coverage Ratio.  Borrower will maintain a Debt Service Coverage Ratio, as of the end of each fiscal year ending on or after December 31, 2008, of not less than 1.25 to 1.00.

8.3          Adjusted EBITDA to Fixed Charges Ratio.  The Guarantor shall not permit the ratio of Adjusted EBITDA to Fixed Charges for any Computation Period to be less than 1.45 to 1.00.

 

19

8.4          Total Leverage Ratio.  The Guarantor shall not permit the Total Leverage Ratio as of the last day of any Computation Period to be greater than 0.70 to 1.00.

8.5          Compliance with Covenants; Prohibition Against Additional Recordings.  Borrower will comply in all material respects with all legally enforceable recorded covenants affecting the Property.  Borrower will not record or permit to be recorded any document, instrument, agreement or other writing against the Property without the prior written consent of the Bank.

8.6          Distributions.  Borrower shall not make any distributions to its members, partners or shareholders, as the case may be, of any revenue received by or on behalf of Borrower from the ownership and operation of the Property unless or until the Loan and all interest accrued thereon, the Loan Expenses and other amounts due the Bank hereunder have been paid in full.

8.7          Further Assurance.  Borrower, on request of the Bank, from time to time, will execute and deliver such documents as may be necessary to perfect and maintain perfected as valid liens upon the Property and the personal property located thereon, the liens granted to the Bank pursuant to this Agreement or any of the other loan Documents, and to fully consummate the transactions contemplated by this Agreement.

ARTICLE 9

 

CASUALTIES AND CONDEMNATION

9.1          Application of Insurance Proceeds and Condemnation Awards.  The proceeds of any insurance policies collected or claims as a result of any loss or damage to any portion of the Property resulting from fire, vandalism, malicious mischief or any other casualty or physical harm and any awards, judgments or claims resulting from the exercise of the power of condemnation or eminent domain shall be applied to reduce the outstanding balance of the Loan or to rebuild and restore the Property, as provided in the Mortgages.  Borrower shall not settle and adjust any claims under policies of insurance without the Bank’s prior written consent, except as provided in the Mortgages.

ARTICLE 10

 

PARTICIPATIONS, SALE AND ENCUMBRANCES

10.1        Bank Participations.  The Bank may at any time sell to one or more commercial banks or other financial institutions participating interests in the Loan, the Note, or any other interest of the Bank hereunder (any Person purchasing any such participating interest being herein called a “Participant”).  In the event of a sale by the Bank of a participating interest to a Participant, (i) the Bank shall remain the holder of the Note for all purposes of this Agreement, (ii) Borrower shall continue to deal solely and directly with the Bank in connection with the Bank’s rights and obligations hereunder, and (iii) all amounts payable by Borrower shall be determined as if the
Bank had not sold such participation and shall be paid directly to the Bank.  Borrower agrees that if amounts outstanding under this Agreement and the Note are due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement or the Note; provided that such right of setoff shall be subject to the obligation of each Participant to share with the Bank, and the Bank agrees to share with each Participant, as provided herein.  Borrower also agrees that each Participant shall be entitled to the benefits of Article 4 hereof as if it were the Bank (provided that no Participant shall receive any greater compensation pursuant to such Article 4 than would have been paid to the participating Bank if no participation had been sold).

 

20

10.2        Prohibition of Assignments and Encumbrances by Borrower.  Except as expressly provided in the Mortgages, Borrower, without the prior written consent of the Bank, shall not create, effect, consent to, attempt, contract for, agree to make, suffer or permit any Prohibited Transfer (as defined in the Mortgages).

10.3        Special Provision Regarding Expansion Property.  The Bank acknowledges that certain portions of the Property, commonly known as Apple Creek Manufactured Housing Community, are currently undeveloped and vacant (such undeveloped and vacant portions, individually and collectively, the “Expansion Property”).  Notwithstanding any provisions of this Agreement to the contrary, Borrower shall be permitted to release an Expansion Property from the lien of the applicable Mortgage without the payment of a release price upon satisfaction of each of the following conditions:

(a)           The Bank shall have approved the legal description of the relevant Property remaining subject to the lien of the Mortgage after the release of the Expansion Property;

(b)           Borrower shall have transferred the Expansion Property into a separate tax parcel (in connection with which the Bank shall cooperate and reasonably approve such transfer) and the Property remaining subject to the lien of the Mortgage shall have a separate tax identification number;

(c)           If necessary, Borrower shall have subdivided or replatted the Property, as required by the jurisdiction in which the Property is located, such that the Property remaining subject to the lien of the Mortgage after the release of the Expansion Property shall be a separate parcel, on which the Bank can exercise all rights and remedies afforded in this Agreement and the Mortgage, including conveying the Property upon foreclosure;

(d)           Borrower shall have recorded any easements, in form and substance required by the Bank, benefitting the Property after the release of the Expansion Property, including, but not limited to, easements granting use and/or access to amenities on the Expansion Property, utility easements for utilities located or to be located on the Expansion Property benefitting the remaining Property, and parking or access easements;

(e)           The Expansion Property shall be deeded to an entity that is not a Borrower under this Agreement at the time of such release;

(f)           Borrower shall amend the existing Mortgage for such Property to reflect the new legal description of the Property, which legal description shall include any beneficial easements;

(g)           Borrower shall cause the existing title policy for such Property to be amended to reflect the new legal description of the Property, which legal description shall include any beneficial easements as insured parcels;

(h)           Borrower covenants that the Expansion Property shall be developed and operated in a manner compatible with the use of the remaining Property as a manufactured housing community; and

(i)            Borrower shall pay all of the Bank’s reasonable costs and expenses, including legal fees and expenses, in connection with the release of any Expansion Property.

 

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ARTICLE 11

 

EVENTS OF DEFAULT BY BORROWER

11.1        Event of Default Defined.  The occurrence of any one or more of the following shall constitute an Event of Default, and any Event of Default which may occur hereunder shall constitute an Event of Default under each of the other Loan Documents:

(a)           Borrower fails to pay (i) any installment of principal or interest payable pursuant to the Note on the date when due, or (ii) any other amount payable to the Bank under the Note, this Agreement or any of the other Loan Documents within five (5) days after the date when any such payment is due in accordance with the terms hereof or thereof;

(b)           Borrower fails to perform or cause to be performed any other obligation or observe any other condition, covenant, term, agreement or provision required to be performed or observed by Borrower under the Note, this Agreement or any of the other Loan Documents not otherwise described in Sections 11.1(a), or (c) through (p); provided, however, that if the Note, this Agreement or other applicable Loan Document does not provide for a specific grace, notice or cure period, and further provided that if such failure by its nature can be cured, then so long as the continued operation and safety of the Property, and the priority, validity and enforceability of the liens created by the Mortgages or any of the other Loan Documents and the value of the Property are not
impaired, threatened or jeopardized, Borrower shall have a period (the “Cure Period”) of thirty (30) days after Borrower obtains actual knowledge of such failure or receives written notice of such failure to cure the same and an Event of Default shall not be deemed to exist during the Cure Period;

(c)           The existence of any inaccuracy or untruth in any material respect in any representation or warranty contained in this Agreement or any of the other Loan Documents or of any statement or certification as to facts delivered to the Bank by Borrower or Guarantor; 

	
             
  	
            (d)
 	
            The occurrence of a Prohibited Transfer;
 

(e)           The existence of any collusion, fraud, dishonesty or bad faith by or with the acquiescence of Borrower or Guarantor which in any way relates to or affects the Loan or the Property;

(f)           The occurrence of a material adverse change in the financial condition of Borrower or Guarantor;

(g)           Borrower or Guarantor (i) files a voluntary petition in bankruptcy or is adjudicated a bankrupt or insolvent or files any petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future federal, state, or other statute or law, or (ii) seeks or consents to or acquiesces in the appointment of any trustee, receiver or similar officer of Borrower or of all or any substantial part of the property of Borrower or Guarantor or any of the Property; or all or a substantial part of the assets of Borrower or Guarantor are attached, seized, subjected to a writ or distress warrant or are levied upon unless the same is released or located within thirty (30) days;

(h)           The commencement of any involuntary petition in bankruptcy against Borrower or Guarantor or the institution against Borrower or Guarantor of any reorganization, arrangement, composition, readjustment, dissolution, liquidation or similar proceedings under any present or 

 

22

future federal, state or other statute or law, or the appointment of a receiver, trustee or similar officer for all or any substantial part of the property of Borrower or Guarantor, which shall remain undismissed or undischarged for a period of sixty (60) days;

	
             
  	
            (i)
 	
            The dissolution, termination or merger of Borrower or Guarantor; or
 

(j)            The occurrence of an “Event of Default” under the Note, the Mortgages or any of the other Loan Documents.

ARTICLE 12

 

BANK’S REMEDIES UPON EVENT OF DEFAULT

12.1        Remedies Conferred upon the Bank.  Upon the occurrence of any Event of Default, the Bank, in addition to all remedies conferred upon the Bank by law and by the terms of the Note, the Mortgages and the other Loan Documents, may pursue any one or more of the following remedies concurrently or successively, it being the intent hereof that none of such remedies shall be to the exclusion of any others:

(a)           Declare the Note to be due and payable forthwith, without presentment, demand, protest or other notice of any kind, all of which Borrower hereby expressly waives, and

(b)           Exercise or pursue any other remedy or cause of action permitted at law or in equity or under this Agreement or any other Loan Document, including, but not limited to, foreclosure of the Mortgages and enforcement of all Loan Documents.

12.2        Setoff Rights.  In addition to any rights of setoff that the Bank may have under applicable law, the Bank, without notice of any kind to Borrower, may appropriate and apply to the payment of the Note or of any sums due under this Agreement any and all balances, deposits, credits, accounts, certificates of deposit, instruments or money of Borrower then or thereafter in the possession of the Bank or any Participant of the Bank.

12.3        Right of Bank to Make Advances to Cure Event of Defaults; Obligatory Advances.  If Borrower shall fail to perform any of its covenants or agreements herein or in any of the other Loan Documents contained, the Bank may (but shall not be required to) perform any of such covenants and agreements, and any amounts expended by the Bank in so doing, and any amounts expended by the Bank pursuant to Section 12.1 hereof and any amounts advanced by the Bank pursuant to this Agreement shall be deemed advanced by the Bank under an obligation to do so regardless of the identity of the person or persons to whom said funds are disbursed.  Amounts advanced by the Bank to protect its security for the Loan are obligatory advances hereunder and shall constitute
additional indebtedness payable on demand and evidenced and secured by the Loan Documents.

12.4        Attorneys’ Fees.  Borrower will pay the Bank’s reasonable attorneys’ fees and costs in connection with the negotiation, preparation, administration and enforcment of this Agreement and the other Loan Documents, which shall also include reasonable attorneys’ fees and time charges of attorneys who may be employees of the Bank or any affiliate of the Bank; without limiting the generality of the foregoing, if at any time or times hereafter the Bank employs counsel for advice or other representation with respect to any matter concerning Borrower, this Agreement, the Property or the Loan Documents or if the Bank employ one or more counsel to protect, collect, lease, sell, take possession of, or liquidate any of the Property, or to
attempt to enforce or protect any security interest or lien or other right in any of the Property or under any of the Loan Documents, or to enforce any rights of the Bank or obligations of 

 

23

Borrower or any other person, firm or corporation which may be obligated to the Bank by virtue of this Agreement or under any of the Loan Documents or any other agreement, instrument or document, heretofore or hereafter delivered to the Bank in furtherance hereof, then in any such event, all of the attorneys’ fees arising from such services, and any expenses, costs and charges relating thereto, shall constitute an additional indebtedness owing by Borrower to the Bank payable on demand and evidenced and secured by the Loan Documents.

12.5        No Waiver.  No failure by the Bank to exercise, or delay by the Bank in exercising, any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof, or the exercise of any other right, power or privilege.  The rights and remedies provided in this Agreement and in the Loan Documents are cumulative and not exclusive of each other or of any right or remedy provided at law or in equity.  No notice to or demand on Borrower in any case, in itself, shall entitle Borrower  to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Bank to any other or
further action in any circumstances without notice or demand.

12.6        Default Rate.  From and after the date of any Event of Default until the date on which such Event of Default is cured or waived, interest on funds outstanding hereunder shall accrue at the Default Rate and be payable on demand.  The failure of the Bank to charge interest at the Default Rate shall not be evidence of the absence of an Event of Default or waiver of an Event of Default by the Bank.

ARTICLE 13

 

MISCELLANEOUS

13.1        Time is of the Essence.  Borrower agrees that time is of the essence in all of its covenants under this Agreement.

13.2        The Bank’s Determination of Facts.  The Bank at all times shall be free to establish independently to its satisfaction and in its sole and absolute discretion the existence or nonexistence of any fact or facts, the existence or nonexistence of which is a condition of this Agreement.

13.3        Prior Agreements.  This Agreement and the other Loan Documents, and any other documents or instruments executed pursuant thereto or contemplated thereby, shall represent the entire, integrated agreement between the parties hereto with respect to the Loan, and shall supersede all prior negotiations, representations or agreements pertaining thereto, either oral or written.  This Agreement and any provision hereof shall not be modified, amended, waived or discharged in any manner other than by a written amendment executed by all parties to this Agreement.

13.4        Disclaimer by Bank.  Borrower is not and shall not be an agent of the Bank for any purposes, and the Bank is not a venture partner with Borrower in any manner whatsoever.  Approvals granted by the Bank for any matters covered under this Agreement shall be narrowly construed to cover only the parties and facts identified in any written approval or, if not in writing, such approvals shall be solely for the benefit of Borrower.

13.5        Borrower Indemnification.  Borrower agrees to defend (with counsel satisfactory to the Bank), protect, indemnify and hold harmless the Bank, any parent corporation, affiliated corporation or subsidiary of the Bank, and each of its officers, directors, employees, attorneys and agents (each, an “Indemnified Party”) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and distributions of any kind or nature (including, without limitation, the disbursements and the reasonable fees of counsel for each Indemnified Party 

 

24

thereto, which shall also include, without limitation, reasonable attorneys’ fees and time charges of attorneys who may be employees of the Bank, or any parent or affiliated corporation of the Bank), which may be imposed on, incurred by, or asserted against, any Indemnified Party (whether direct, indirect or consequential and whether based on any federal, state or local laws or regulations, including, without limitation, securities, environmental laws and commercial laws and regulations, under common law or in equity, or based on contract or otherwise) in any manner relating to or arising out of this Agreement or any of the Loan Documents, or any act, event or transaction related or attendant thereto, the preparation, execution and delivery of this Agreement, the Note and the Loan Documents, the making or issuance and management of the Loan, the use or intended use of the proceeds of the Loan and the
enforcement of the Bank’s rights and remedies under this Agreement, the Note, the Loan Documents, any other instruments and documents delivered hereunder or thereunder; provided, however, that Borrower shall not have any obligation hereunder to any Indemnified Party with respect to matters (a) caused by or resulting from the willful misconduct or gross negligence of such Indemnified Party, (b) related to the sale of participating interests in the Loan pursuant to Section 10.1 hereof.  To the extent that the undertaking to indemnify set forth in the preceding sentence may be unenforceable because it violates any law or public policy, Borrower shall satisfy such undertaking to the maximum extent permitted by applicable law.  Any liability, obligation, loss, damage, penalty, cost or expense covered by this indemnity shall be paid to such Indemnified Party on demand, and failing prompt payment, together with interest thereon at the Default Rate from the date incurred by such
Indemnified Party until paid by Borrower, shall be added to the obligations of Borrower evidenced by the Note and secured by the collateral securing the Loan. This indemnity is not intended to excuse the Bank from performing hereunder.  The provisions of this section shall survive the closing of the Loan, the satisfaction and payment of the Note and any cancellation of this Agreement.  Borrower shall also pay, and hold the Bank harmless from, any and all claims of any brokers, finders or agents claiming a right to any fees in connection with arranging the Loan.  The Bank hereby represents that it has not employed a broker or other finder in connection with the Loan.  Borrower represents and warrants that no brokerage commissions or finder’s fees are to be paid in connection with the Loan.

13.6        Captions.  The captions and headings of various Articles and Sections of this Agreement and exhibits pertaining hereto are for convenience only and are not to be considered as defining or limiting in any way the scope or intent of the provisions hereof.

13.7        Inconsistent Terms and Partial Invalidity.  In the event of any inconsistency among the terms hereof (including incorporated terms), or between such terms and the terms of any other Loan Document, the Bank may elect which terms shall govern and prevail.  If any provision of this Agreement, or any paragraph, sentence, clause, phrase or word, or the application thereof, in any circumstances, is adjudicated by a court of competent jurisdiction to be invalid, the validity of the remainder of this Agreement shall be construed as if such invalid part were never included herein.

13.8        Gender and Number.  Any word herein which is expressed in the masculine or neuter gender shall be deemed to include the masculine, feminine and neuter genders.  Any word herein which is expressed in the singular or plural number shall be deemed, whenever appropriate in the context, to include the singular and the plural.

13.9        Notices.  Any notices, communications and waivers under this Agreement shall be in writing and shall be (i) delivered in person, (ii) mailed, postage prepaid, either by registered or certified mail, return receipt requested, or (iii) sent by overnight express carrier, addressed in each case as follows:

 

 

25

 

	
            To the Bank:
 	
            LaSalle Bank Midwest National Association

2600 West Big Beaver Road

Troy, Michigan 48084

Attention:  Commercial Real Estate
 
	
             
 	
             
 
	
            With copies to:
 	
            Daniel C. Watson, Esq.

Dykema Gossett PLLC

400 Renaissance Center

Detroit, Michigan 48243
 
	
             
 	
             
 
	
            To Borrower:
 	
            Apple Orchard, L.L.C.

Sun Lakeview LLC

Sun Tampa East, LLC

27777 Franklin Road, Suite 200

Southfield, Michigan 48034

Attention:  Corporate Controller
 
	
             
 	
             
 
	
            With a copy to:
 	
            Arthur A. Weiss, Esq.

Jaffe, Raitt, Heuer & Weiss, P.C.

The American Center

27777 Franklin Road, Suite 2500

Southfield, Michigan 48034

 
 

 

or to any other address as to any of the parties hereto, as such party shall designate in a written notice to the other party hereto.  All notices sent pursuant to the terms of this Section shall be deemed received (i) if personally delivered, then on the date of delivery, (ii) if sent by overnight, express carrier, then on the next Business Day immediately following the day sent, or (iii) if sent by registered or certified mail, then on the earlier of the third Business Day following the day sent or when actually received.

13.10      Effect of Agreement.  The submission of this Agreement and the Loan Documents to Borrower for examination does not constitute a commitment or an offer by the Bank to make a commitment to lend money to Borrower; this Agreement shall become effective only upon execution by Bank and delivery hereof by the Bank to Borrower.

13.11      Governing Law.  This Agreement has been negotiated, executed and delivered at Troy, Michigan, and shall be construed and enforced in accordance with the laws of the State of Michigan, without reference to the choice of law or conflicts of law principles of the State.

13.12      Waiver of Defenses.  OTHER THAN CLAIMS BASED UPON THE FAILURE OF THE BANK TO ACT IN A COMMERCIALLY REASONABLE MANNER, THE BORROWER, ON BEHALF OF ITSELF AND GUARANTOR, WAIVES EVERY PRESENT AND FUTURE DEFENSE (OTHER THAN THE DEFENSE OF PAYMENT IN FULL), CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH THE BORROWER MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY THE BANK IN ENFORCING THIS AGREEMENT.  PROVIDED THAT THE BANK ACTS IN GOOD FAITH, THE BORROWER RATIFIES AND CONFIRMS WHATEVER THE BANK MAY DO PURSUANT TO THE TERMS OF THIS AGREEMENT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO THE BORROWER.

 

26

13.13      Consent to Jurisdiction. TO INDUCE BANK TO ACCEPT THE NOTE, BORROWER IRREVOCABLY AGREES THAT, SUBJECT TO BANK’S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THE LOAN DOCUMENTS WILL BE LITIGATED IN COURTS HAVING SITUS IN OAKLAND COUNTY, MICHIGAN.  BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY COURT LOCATED WITHIN OAKLAND COUNTY, MICHIGAN, WAIVES PERSONAL SERVICE OF PROCESS UPON BORROWER, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS STATED HEREIN AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.

13.14      Waiver of Jury Trial.  BORROWER AND THE BANK (BY ACCEPTANCE HEREOF), HAVING BEEN REPRESENTED BY COUNSEL EACH KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (A) UNDER THIS AGREEMENT OR ANY RELATED AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS AGREEMENT OR (B) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  BORROWER AGREES THAT IT WILL NOT ASSERT ANY
CLAIM AGAINST THE BANK OR ANY OTHER PERSON INDEMNIFIED UNDER THIS AGREEMENT ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.

13.15      Counterparts; Facsimile Signatures.  This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement.  Receipt of an executed signature page to this Agreement by facsimile or other electronic transmission shall constitute effective delivery thereof.  Electronic records of executed Loan Documents maintained by the Bank shall be deemed to be originals thereof.

13.16      Customer Identification - USA Patriot Act Notice.  The Bank hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001) (the “Act”), and the Bank’s policies and practices, it is required to obtain, verify and record certain information and documentation that identifies Borrower, which information includes the name and address of Borrower and such other information that will allow the Bank to identify Borrower in accordance with the Act.

 

[SIGNATURE PAGE FOLLOWS]

 

27

IN WITNESS WHEREOF, Borrower and the Bank have caused this Loan Agreement to be executed as of the day and year first above written.

 

	
             
 	
             
 	
            BORROWER:

 

APPLE ORCHARD, L.L.C., a Michigan limited liability company

 

By:         Sun Communities Operating Limited Partnership, a Michigan limited partnership

Its:          Sole Member

 

By:         Sun Communities, Inc., a Maryland corporation

Its:          General Partner

 

By:
______________________________

Name: ______________________________

Title: _______________________________

 
 
	
             
 	
             
 	
            SUN LAKEVIEW LLC, a Michigan limited liability company

 

By:         Sun Communities Operating Limited Partnership, a Michigan limited partnership

Its:          Sole Member

 

By:         Sun Communities, Inc., a Maryland corporation

Its:          General Partner

 

By:      ______________________________

Name: ______________________________

Title: _______________________________

 
 
	
             
 	
             
 	
            SUN TAMPA EAST, LLC, a Michigan limited liability company

 

By:         Sun Communities Operating Limited Partnership, a Michigan limited partnership

Its:          Sole Member

 

By:         Sun Communities, Inc., a Maryland corporation

Its:          General Partner

 

By:      ______________________________

Name: ______________________________

Title: _______________________________

 
 

 

 

28

 

	
             
 	
             
 	
             

BANK:

 

LASALLE BANK MIDWEST NATIONAL ASSOCIATION,a national banking association

 

 

By:     ________________________________

Name:   Scott McLean___________________

Title:     Vice President___________________

 
 

 

 

29

EXHIBIT A

 

THE PROPERTY

 

Property known as 2191 East Ohio Pike #57, Amelia, Ohio and 969 State Rte 28, Milford, Ohio described as:

 

Land situated in the County of Clermont, Township of Miami, State of Ohio, is described as follows:

Parcel 1

Situated in the State of Ohio, Clermont County, Miami Township and in Dix’s Military Survey No. 992 of the Virginia Military District and being more particularly described as follows: Beginning at a point in State Route No. 28, said point is North 13 degrees 20 minutes 32 seconds West 29.71 feet from a 1 inch iron pipe at the Northwest corner of lot No. 42 of the Village of Mulberry as platted and recorded in Plat Cabinet 5, page 148 of the Clermont County, Ohio Deed Records; thence with the line of said lot No. 42 and Tailwind Properties, Inc., South 13 degrees 20 minutes 32 second East 265.47 feet to a 1/2 inch iron pin; thence, with the line of H. Wayne Klekamp, Inc. and fenced line of Bertie Trester, South 06 degrees 36 minutes 08 seconds West 888.99 feet to a 5/8 inch iron pin; thence, with the North line of By-Pass StateRoute 28, South 71 degrees 27 minutes 11 seconds West 452.65 feet to a 5/8
inch iron pin; thence, continuing with said North line of said By-Pass State Route No. 28, South 67 degrees 31 minutes 49 seconds West, 434.44 feet to a 5/8 inch iron pin; thence with the fenced line of B & R Partnership, North 13 degrees 49 minutes 16 seconds East 609.49 feet to a 3/4 inch iron pin; thence, with the fenced line of Paul and Janet Bilton, North 81 degrees 00 minutes 48 seconds East 180.74 feet to a 3/4 inch iron pin; thence, with the fenced line of Mulberry Wesleyan Church, Inc., North 54 degrees 54 minutes 10 seconds East 359.78 feet to a 1 inch pipe; thence continuing with said fenced line of Mulberry Wesleyan Church, Inc. North 66 degrees 31 minutes 42 seconds East 151.50 feet to a 3/8 inch iron pin, thence, continuing with said fenced line of Mulberry Wesleyan Church, Inc., North 18 degrees 31 minutes 24 seconds West 58.02 feet to a 1 inch pipe, thence, with said line of Mulberry Wesleyan Church, Inc., and Harry Kapourales, North 75 degrees 09 minutes 36
seconds East, 170.08 feet to a 1/2 inch iron pin; thence, continuing with said line of said Harry Kapourales and passing a 5/8 inch iron pin at 232.09 feet, North 13 degrees 17 minutes 13 seconds West 262.09 feet to State Route No. 28; thence with said State Route No. 28, North 77 degrees 12 minutes 47 seconds East 94.23 feet to the beginning, The bearings in the above description are based on the East line of B & R Partnership’s property as recorded in Official Record Book 561, page 668 in the recorders office of said county.

The above description is taken from and in accordance with a survey and plat dated August 10, 1998 by Robert Joseph Shannon, Ohio Reg. No. 7835

Parcel 2

Situated in the State of Ohio, Clermont County, Miami Township and in Dix’s Military Survey No. 992 of the Virginia Military District and being more particularly described as follows: Commencing at a point in State Route No. 28, said point is North 13 degrees 20 minutes 32 seconds West, 29.71 feet from a 1 inch iron pipe at the Northwest corner of Lot No. 42 of the Village of Mulberry as platted and recorded in Plat Cabinet 5, page 148 of the Clermont County, Ohio Deed Records; thence with the line of said Lot No. 42 and Tailwind Properties, Inc., South 13 degrees 20 minutes 32 seconds East 265.47 feet to a 1/2 iron pin; thence, with the line of H. Wayne Klekamp, Inc., fenced line of Bertie Trester and crossing the State Route No. 28 by-pass, South 06 degrees 36 minutes 08 seconds West 1120.97 feet to a 5/8 inch iron pin and the beginning; thence, with the fenced line of Rosa Trester and West line of
Lakeside Park Subdivision, South 06 degrees 36 minutes 08 seconds West 656.69 feet to a 1/2 inch iron pin; thence with the line of Jerome L. Decker North 72 degrees 10 minutes 36 seconds West, 196.61 feet to a 5/8 inch iron 

 

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pin; thence continuing with said line of Jerome L. Decker, South 37 degrees 05 minutes 47 seconds West 349.43 feet to a 1/2 inch iron pin; thence with the line of Betty Swafford and fenced line of Donald Gordon, North 73 degrees 48 minutes 40 seconds West 591.53 feet to a 1/2 inch iron pin; thence, continuing with said fenced line of Donald Gordon and fenced line of Elsie Walker, North 35 degrees 18 minutes 04 seconds East 357.85 feet to a 5/8 inch iron pin; thence, continuing with said fenced line of Elsie Walker, North 72 degrees 19 minutes 17 seconds West, 50.08 feet to a 1/2 inch iron pin; thence with the fenced line of the Board of County Commissioners, North 13 degrees 49 minutes 16 seconds East 163.75 feet to a 5/8 inch iron pin; thence with the South line of By-Pass State Route No. 28, North 71 degrees 27 minutes 11 seconds East 583.81 feet to a 5/8 inch iron pin; thence, continuing with said South
line of By-Pass State Route No. 28, South 13 degrees 21 minutes 01 seconds East 41.17 feet to a 5/8 inch iron pin; thence, still continuing with the south line of By-Pass State Route No. 28, North 71 degrees 27 minutes 11 seconds East 295.68 feet to the beginning. 

The bearings in the above description are based on the East line of B & R Partnership’s property as recorded in Official Record Book 561, page 668 in the recorders office of said county 

The above description is taken from and in accordance with a survey and plat dated August 10, 1998 by Robert Joseph Shannon, Ohio Reg. No. 7835.

Parcel 3

Situated in Pierson’s Military Survey No. 928 and Jones’ Military Survey No. 934, Monroe Township, Clermont County, Ohio and being more particularly described as follows: Beginning at an iron pin set at the southwest corner of Lot No. 7 of East Fork Commercial Park as recorded in Plat Cabinet 4, page 222 of the Clermont County, Ohio Subdivision Plat Records; thence with the South line of said Lot No. 7 and partially with the South line of Lot No. 8, as generally marked by a fence, South 85 degrees 34 minutes 15 seconds East for a distance of 449.88 feet to an iron pin set corner to lands of Edgar Lawson; thence with the lines of said Lawson the following three courses and distances, (1) South 12 degrees 58 minutes 13 seconds West for a distance of 579.29 feet to an ion pin set; (2) North 86 degrees 11 minutes 40 seconds West for a distance of 462.91 feet to an iron pin set; (3) South 06 degrees 51
minutes 00 seconds West for a distance of 507.16 feet to an existing iron pin corner of lands of the Clermont Christian Assembly, Inc., thence with the north line of The Clermont Christian Assembly, Inc. North 84 degrees 13 minutes 43 seconds West for a distance of 1597.30 feet to an existing iron pin corner to lands of Martha and Karen Simpson; thence with the East line of said Simpson and the East line of Elmer and Marjorie Parker North 15 degrees 29 minutes 12 seconds East for a distance of 449.46 feet to an existing spike in the centerline of Back Run Road; thence leaving said road with the South line of lands of Steven and Karen Seipelt South 84 degrees 44 minutes 18 seconds East (passing an iron pin set at 25.00 feet) for a total distance of 637.57 feet to an existing iron pipe corner to said Seipelt; thence with the Easterly lines of said Seipelt and the Easterly line of Jessie and Judith Cowans the following two courses and distances (1) North 06 degrees 42 minutes 55 seconds
West for a distance of 26.05 feet to an existing iron pipe at an angle point in Seipelt’s Easterly line (2) North 30 degrees 41 minutes 42 seconds East for a distance of 661.30 feet to an existing iron pipe corner to said Cowans; thence with the North line of Cowans North 84 degrees 35 minutes 35 seconds West for a distance of 594.03 feet to an existing iron pipe corner to lands of Mamie Kemper; thence with the East line of said Kemper and partially with the East line of Lands of Terry and Beverly Hoskins North 12 degrees 11 minutes 18 seconds East for a distance of 891.21 feet to an iron pin set corner to lands of the Bethel Jehovah’s Witnesses; thence with the lines of the Bethel Jehovah’s Witnesses the following three (3) courses and distances, (1) South 86 degrees 24 minutes 00 seconds East for a distance of 236.94 feet to an iron pin set; (2) North 03 degrees 36 minutes 00 seconds East for a distance of 66.00 feet to an iron pin set; (3) South 86 degrees 24 minutes
00 seconds East for a distance of 33.00 feet to an iron pin set corner to lands of Dale and Irene DeWeese; thence with the Southerly line of said DeWeese South 61 degrees 24 minutes 00 seconds East for a distance of 161.15 feet to an existing iron pin corner of lands of Clermont Metropolitan Housing Authority; thence with the lines of said Clermont Metropolitan Housing Authority the following six (6) courses and distances, (1) 

 

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South 35 degrees 56 minutes 13 seconds East for a distance of 183.96 feet to an iron pin set; (2) South 61 degrees 48 minutes 54 seconds East for a distance of 157.41 feet to a wood post; (3) North 77 degrees 59 minutes 07 seconds East for a distance of 131.22 feet to an iron pin set; (4) North 08 degrees 28 minutes 57 seconds East for a distance of 82.52 feet to an iron pin set; (5) South 83 degrees 59 minutes 06 seconds East for a distance of 91.94 feet to an iron pin set; (6) North 08 degrees 40 minutes 57 seconds East (passing an iron pin set 530.64 feet) for a total distance of 593.32 feet to a point in the centerline of State Route No. 125; thence with said centerline South 78 degrees 37 minutes 16 seconds East for a distance of 292.37 feet to a point; thence leaving said road with the West line of Lot No. 7 of East Fork Commercial Park the following two (2) courses and distances, (1) South 07 degrees
42 minutes 03 seconds West for a distance of 693.99 feet to a 36’ ash tree; South 05 degrees 56 minutes 01 seconds West for a distance of 677.35 feet to the place of beginning.

EXCEPTING Therefrom the following described parcels:

Situated in Jones’ Military Survey No. 934, Monroe Township, Clermont County, Ohio and being more particularly described as follows:

Commencing at an iron pin located at the Southwest corner of Lot No. 7 of East Fork Commercial Park as recorded in Plat Cabinet 4, page 222 of the Clermont County, Ohio Subdivision Plat Records; thence with the South line of said Lot No. 7 and partially with South line of Lot No. 8 as generally marked by a fence, South 85 degrees 34 minutes 15 seconds East 449.88 feet to the corner of lands of Edgar Lawson; thence with the lines of said Lawson the following three (3) courses: South 12 degrees 58 minutes 13 seconds West 579.29 feet, North 86 degrees 11 minutes 40 seconds West 462.91 feet to an iron pin found, South 06 degrees 51 minutes 00 seconds West for a distance of 507.16 feet to an existing iron pin corner to lands of The Clermont Christian Assembly, Inc., as recorded in Deed Book 532, page 374, Clermont County Recorder’s Office; thence with the North line of said Clermont Christian Assembly,
Inc., North 84 degrees 13 minutes 43 seconds West 1330.81 feet to a 5/8" diameter iron pin set at the Point of Beginning of this described real estate; thence from said point of beginning continuing North 84 degrees 13 minutes 43 seconds West 266.49 feet to an existing iron pin corner to lands of Karen L. Simpson, as recorded in Official Record 794, page 877, Clermont County Recorder’s Office; thence with the East line of said Simpson and the East line of Elmer Parker, Jr., as recorded in Official Record 1084, page 248 of the Clermont County Recorder’s Office, North 15 degrees 29 minutes 12 seconds East for a distance of 449.46 feet to an existing spike located in the centerline of Back Run Road; thence leaving said road with the South line of lands of Roy L. and Brenda D. Lindsey as recorded in Official Record 1342, page 800, Clermont County Recorder’s Office, South 84 degrees 44 minutes 18 seconds East, passing an existing iron pin at 25.00 feet for a total distance
of 177.74 feet to a set 5/8" diameter iron pin; thence leaving said line of Lindsey, through grantor’s property along a new severance line the following four (4) courses: South 03 degrees 29 minutes 54 seconds West 39.63 feet to a set 5/8" diameter iron pin, North 86 degrees 30 minutes 06 seconds West 12.74 feet to a set 5/8" diameter iron pin, South 64 degrees 19 minutes 28 seconds West 50.00 feet to a set 5/8" diameter iron pin, and South 04 degrees 13 minutes 43 seconds East 384.25 feet to the point of beginning.

Right to access and construct utilities including sanitary sewer, public water, electric, gas cable and telephone located or to be located along Back Run Road through and above described tract, and to retain rights for drainage easements and storm piping through the above tract.

ALSO EXCEPTING

Situated in the State of Ohio, County of Clermont, Township of Monroe, Virginia Military District, situated in Jones M.S. No. 934 and being more particularly described as follows:

Beginning for reference at the intersection of the existing centerline of S.R. 125 with the Easterly line of Jones M.S. No. 934, said point being centerline of survey Station 491+57.52; thence North 75 degrees 49 minutes 28 seconds East 21.76 feet to a point at 9.72 feet left of centerline Station 491+76.98 and being 

 

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the True Point of Beginning; thence South 09 degrees 04 minutes 08 seconds West 91.68 feet along the Grantor’s Easterly line to an iron pin set at 81.75 feet right of centerline Station 491+82.25 (passing an iron pin found at 90.79 feet); thence North 88 degrees 17 minutes 47 seconds West 17.54 feet along the existing Southerly Right-of Way line to an iron pin set 85.00 feet right of centerline Station 491+65.00; thence North 68 degrees 29 minutes 02 seconds West, 157. 14 feet along the existing Southerly Right-of-Way line to an iron pin set 60.00 feet right of centerline Station 490+09.88; thence North 72 degrees 43 minutes 43 seconds West 123.24 feet along the existing Southerly Right of Way line to an iron pin found 54.22 feet right of centerline Station 488+91.18; thence North 10 degrees 03 minutes 08 seconds East 59.98 feet along the Grantor’s Westerly line to a point 5.32 feet left of
centerline Station 488+84.09; thence South 77 degrees 29 minutes 25 seconds East 292.34 feet along the Grantor’s Northerly line to the True Point of Beginning.

This description is based on a survey made under the direction and supervision of Steven W. Newell, Professional Surveyor Number 7212 in May, 2001

Property known as 4630 McIntosh, Dover, Florida described as:

 

Parcel I:

 

Commence at the Northeast corner of the Southeast 1/4 of the Northwest 1/4 of Section 30, Township 28 South, Range 21 East, Hillsborough County, Florida; thence South 00°13'17" East along the East boundary thereof, 286.50 feet; thence South 89°50'28" West, 47.00 feet to a point on the West right-of-way line of McIntosh Road (said public right-of-way being 87 feet in width, as shown on F.D.O.T. right-of-way Map Section 10030-2529 (formerly 10030-2521) and O.R. Book 5099, Page 1004), said point being the Point of Beginning; thence along said Westerly right-of-way line South 00°13'17" East, 373.17 feet to a point on the North boundary of the South 1/2 of the Southeast 1/4 of Northwest 1/4 of said Section 30; thence continue along said West right-of-way line of McIntosh Road South 00°08'53" East, 332.72 feet to a point on the South boundary of the North 1/2 of the South 1/2 of the Southeast 1/4
of the Northwest 1/4 of said Section 30; thence along said South boundary North 89°31'31" West, 1,348.58 feet to the Southwest corner of the North 1/2 of the South 1/2 of the Southeast 1/4 of the Northwest 1/4 of said Section 30; thence South 00°08'30" East, 330.76 feet to the Southwest corner of the Southeast 1/4 of the Northwest 1/4 of said Section 30; thence South 00°16'56" East along the East boundary of the Northwest 1/4 of the Southwest 1/4 of said Section 30, 1,025.21 feet to a point on the Northerly right-of-way line of U.S. Highway No. 92 (State Road No. 600, said public right-of-way being 80 feet in width as shown on F.D.O.T. right-of-way Map Section 10030-2529 (formerly 10030-2521); thence South 75°27'17" West along said right-of-way line, 978.28 feet to a point on the East boundary of the West 447.50 feet of the Northwest 1/4 of the Southwest 1/4 of said Section 30; thence North 00°15'43" West, along a line 447.50 feet East of and parallel to the West
boundary of the Northwest 1/4 of the Southwest 1/4 of said Section 30, a distance of 347.00 feet MORE OR LESS to the South bank of an existing canal; thence North 88°11'42" East along said canal bank 250.10 feet to a point on the West boundary of the East 1/2 of the Northwest 1/4 of the Southwest 1/4 of said Section 30; thence North 00°19'40" West along said West boundary, 920.12 feet to the Northwest corner of the East 1/2 of the Northwest 1/4 of the Southwest 1/4 of said Section 30; thence North 89°27'27" West, along the South boundary of the Southwest 1/4 of the Northwest 1/4 of said Section 30, a distance of 150.36 feet to the Southwest corner of the East 849.16 feet of the Southwest 1/4 of the Northwest 1/4 of said Section 30; thence North 00°0728" West, 700.00 feet to the Northwest corner of the East 849.16 feet of the South 700.00 feet of the Southwest 1/4 of the Northwest 1/4 of said Section 30; thence South 89°35'43" East, along the North boundary thereof,
a distance of 493.06 feet; thence South 41°49'16" East, 266.07 feet; thence North 42°13'00" East (North 42°06'10" East per description), 243.73 feet; thence North 00°02'51" East, 15.13 feet; thence South 89°42'21" East, 15.00 feet to the Northeast corner of the South 700.00 feet of the East 849.16 feet of the Southwest 1/4 of the Northwest 1/4 of said Section 30; thence North 00°08'30" West, along the West 

 

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boundary of the Southeast 1/4 of the Northwest 1/4 of said Section 30, 322.13 feet; thence North 89°50'28" East, 1,347.94 feet to the Point of Beginning.

Parcel II:

 

A parcel of land being a portion of the Northwest 1/4 of the Northwest 1/4 of Section 30, Township 28 South, Range 21 East, Hillsborough County, Florida, being more particularly described as follows:

Commence at a found railroad spike marking the Southeast corner of the Northwest 1/4 of Section 30; thence North 00°06'40" West along the East line of said Northwest 1/4, for 1,324.46 feet to the Southeast corner of the Northeast 1/4 of said Northwest 1/4; thence North 89°26'20" West along the South line of the Northeast 1/4 of said Northwest 1/4, for 55.38 feet to a point on the Westerly right-of-way line of McIntosh Road; thence North 07°42'21" West along said Westerly right-of-way line, for 105.02 feet to a point on the previously existing Southerly limited access right-of-way line of State Road 400 (Interstate 4); thence along said limited access right-of-way line, the following two (2) courses:

1) North 65°18'32" West for 140.75 feet; 2) thence South 88°12'17" West for 226.40 feet to a point on the new Southerly limited access right-of-way line; thence along said new limited access right-of-way line, the following three (3) courses:

1) South 83°01'18" West for 395.54 feet to a point on the arc of a non-tangent curve (a radial line bears South 6°04'26" East to the center of said curve); 2) thence Westerly along the arc of said curve concave Southerly, having for its elements a radius of 5,649.58 feet, a central angle of 02°23'16", an arc length of 235.46 feet, and a chord bearing and distance of South 82°43'56" West for 235.44 feet to a point of tangency; 3) thence South 81°32'17" West for 349.38 feet to a point on the East line of the Northwest 1/4 of said Northwest 1/4 and the Point of Beginning; thence North 00°05'10" West, along said East line for 11.60 feet; thence North 89°26'13" West for 59.72 feet; thence South 82°05'10" West for 13.94 feet; thence South 12°27'43" East for 23.55 feet to the South line of said Northwest 1/4 of the Northwest 1/4; thence South 89°26'20" East along said South
line 68.49 feet to the Southeast corner of said Northwest 1/4 of the Northwest 1/4; thence North 00°05'10" West along said East line of the Northwest 1/4 of the Northwest 1/4 for 13.39 feet to the said Point of Beginning.

Parcel III (Easement Parcel):

 

Easements for access, ingress and egress from Parcel I hereof to Parcel II hereof, and easement for water utilities for the benefit of Parcels I and II, made by Green Acres Campground, Inc., to NHC-FL14 LP., dated June 24, 1998, recorded July 1, 1998 in O.R. Book 9115, Page 787, Hillsborough County Records, which easements burden the following parcel of land.

Begin at the Northeast corner of the Southwest 1/4 of the Northwest 1/4 of Section 30, Township 28 South, Range 21 East, Hillsborough county, Florida; thence North 00°05'10" West to a point on the South right-of-way line of Interstate 4 (State Road No. 400), a public right-of-way, 13.39 feet; thence North 81°32'17" East along said right-of-way 30.32 feet; thence South 00°05'10" East, 18.15 feet; thence South 00°08'30" East 270.93 feet; thence North 89°50'28" East 129.99 feet; thence South 00°09'32" East, 30.00 feet; thence South 89°50'28" West, to a point on the West line of the Southeast 1/4 of the Northwest 1/4 of Section 30, Township 28 South, Range 21 East 160.00 feet; thence North 00°08'30" West along said line 301.31 feet to the Point of Beginning.

Parcel IV:

 

From the Northeast corner of the Northeast 1/4 of the Southwest 1/4 of Section 30, Township 28 South, Range 21 East, run West 345 Feet to a Point of Beginning; run thence South 00°41'00" East, 743.09 feet to the North Right-of-Way Line of U.S. 92 (a public road having an 80 foot right of way); thence South 

 

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75°00'30" West along said right-of-way line 200 feet thence North 00°41'00" West, 200 feet; thence South 75°00130" West, 884.81 feet to the West boundary of said Northeast 1/4 of the Southwest 1/4; thence North 00°39'00" West, 823.73 feet to the Northwest corner of said Northeast 1/4 of the Southwest 1/4; thence East 1050.75 feet to the Point of Beginning. Said lands lying In Hillsborough County, Florida.

 

Property known as 9910 Geraldine St., Ypsilanti, Michigan described as:

 

Land situated in the County of Washtenaw, Township of Ypsilanti, State of Michigan, is described as follows:

Part of Section 26, Town 3 South, Range 7 East, Ypsilanti Township, Washtenaw County, Michigan, described as: Beginning at the Northeast corner of Section 26; thence South along the East line of said Section, 1309.73 feet; thence North 89 degrees 42 minutes 34 seconds West 662.67 feet; thence South 00 degrees 00 minutes 53 seconds East 728.14 feet; thence South 89 degrees 42 minutes 34 seconds East 662.49 feet to the East line of said Section; thence South along said line 197.26 feet; thence North 89 degrees 42 minutes 34 seconds West 662.44 feet; thence South 00 degrees 00 minutes 53 seconds East 197.28 feet; thence South 89 degrees 42 minutes 34 seconds East 662.39 feet to the East line of said Section; thence South along said line 197.29 feet to the East 1/4 corner of said Section; thence North 89 degrees 29 minutes 20 seconds West along the East and West 1/4 line 1318.78 feet to the Southwest 1/4 of the
East 1/2 of the Northeast 1/4 of said Section; thence North 00 degrees 06 minutes 32 seconds East along the West line of the East 1/2 of the Northeast 1/4 of said Section 1810.49 feet; thence South 89 degrees 23 minutes 40 seconds East 291.22 feet; thence North 00 degrees 09 minutes 54 seconds West 826.86 feet to the North line of said Section; thence South 89 degrees 05 minutes East along said North line 119.10 feet; thence South 15 degrees 17 minutes 20 seconds West 69.23 feet; thence North 56 degrees 57 minutes 07 seconds East 94.96 feet; thence North 19 degrees 25 minutes 50 seconds East 15.13 feet to the North line of said Section; thence South 89 degrees 05 minutes 00 seconds East along said North line 841.02 feet to the point of beginning.

Tax Item No. K-11-26-100-014

 

 

A-6

EXHIBIT B

 

FORM OF PROMISSORY NOTE

 

PROMISSORY NOTE

 

	
            $27,000,000.00
 	
            Date:  July 1, 2008
 

	
            Troy, Michigan
 	
            Maturity Date:  July 1, 2011
 

 

 

FOR VALUE RECEIVED, APPLE ORCHARD, L.L.C., a Michigan limited liability company; SUN LAKEVIEW LLC, a Michigan limited liability company; and SUN TAMPA EAST, LLC, a Michigan limited liability company (collectively, the “Borrower”), hereby promises to pay to the order of LASALLE BANK MIDWEST NATIONAL ASSOCIATION, a national banking association (the “Bank”), at its principal office in Troy, Michigan, on or before the Maturity Date (as defined in the hereinafter referred to Loan Agreement), the principal amount of TWENTY SEVEN MILLION and 00/100 DOLLARS ($27,000,000.00), in accordance with the
terms and provisions of that certain Loan Agreement dated as of July 1, 2008, executed by and among the Borrower and the Bank (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  Capitalized words and phrases not otherwise defined herein shall have the meanings assigned thereto in the Loan Agreement.

 

The Borrower further promises to pay accrued interest hereunder monthly, beginning on August 1, 2008 and continuing on the same day of each consecutive month thereafter through and including July 1, 2009.  Beginning on August 1, 2009, and continuing on the same day of each consecutive month thereafter, the Borrower shall repay the outstanding principal balance of this Note in monthly installments of principal and interest, each in an amount determined on the basis of a 360-month amortization period (the "Amortization Period").  The amount of each monthly payment shall be the amount computed by the Bank which would amortize the outstanding principal balance of this Note, as of the date of the payment calculation, with interest at the rate in effect on such date as set forth in the Loan Agreement, over the remainder of the Amortization Period.  The outstanding principal balance hereof
shall be repaid by the Borrower on the Maturity Date, unless payable sooner pursuant to the provisions of the Loan Agreement.  The Maturity Date may be extended at the Borrower’s option, subject to the terms and conditions contained in the Loan Agreement, to the date two (2) years after the initial Maturity Date.  Payments of both principal and interest are to be made in lawful money of the United States of America.  The Loan made by the Bank and all payments on account of the principal and interest thereof, shall be recorded on the books and records of the Bank and the principal balance as shown on such books and records shall be rebuttably presumptive evidence of the principal amount owing hereunder.

 

This Note evidences indebtedness incurred under, and is subject to the terms and provisions of, the Loan Agreement, to which Loan Agreement reference is hereby made for a statement of the terms and provisions under which this Note may or must be paid prior to the Maturity Date, or pursuant to which the Maturity Date may be accelerated.  The holder of this Note is entitled to all of the benefits and security provided for in the Loan Agreement.

 

Except for such notices as may be expressly required under the Loan Documents, the Borrower waives presentment, demand, notice, protest, and all other demands, or notices, in connection with the delivery, acceptance, performance, default, or enforcement of this Note, and assents to any extension or postponement of the time of payment or any other indulgence.  No failure to exercise, and no delay in 

 

B-1

exercising, any rights under any of the Loan Documents by the Bank of any holder of this Note shall operate as a waiver of such rights.

 

This Note shall be governed and construed in accordance with the laws of the State of Michigan applicable to contracts made and to be performed entirely within such State.

 

[SIGNATURE PAGE FOLLOWS]

 

B-2

	
             
 	
             
 	
            BORROWER:

 

APPLE ORCHARD, L.L.C., a Michigan limited liability company

 

By:         Sun Communities Operating Limited Partnership, a Michigan limited partnership

Its:          Sole Member

 

By:         Sun Communities, Inc., a Maryland corporation

Its:          General Partner

 

By:
EXHIBIT – DO NOT SIGN_______

Name: ______________________________

Title:   ______________________________

 
 
	
             
 	
             
 	
            SUN LAKEVIEW LLC, a Michigan limited liability company

 

By:         Sun Communities Operating Limited Partnership, a Michigan limited partnership

Its:          Sole Member

 

By:         Sun Communities, Inc., a Maryland corporation

Its:          General Partner

 

By:      EXHIBIT – DO NOT SIGN_______

Name: ______________________________

Title:   ______________________________

 
 
	
             
 	
             
 	
            SUN TAMPA EAST, LLC, a Michigan limited liability company

 

By:         Sun Communities Operating Limited Partnership, a Michigan limited partnership

Its:          Sole Member

 

By:         Sun Communities, Inc., a Maryland corporation

Its:          General Partner

 

By:      EXHIBIT – DO NOT SIGN_______

Name: ______________________________

Title:   ______________________________

 
 

 

 

B-3OPEN-END MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT

 

(Maximum unpaid indebtedness, exclusive of interest

and protective advances, not to exceed $27,000,000.00)

 

made by

 

APPLE ORCHARD, L.L.C., a Michigan limited liability company

("Mortgagor")

 

in favor of

 

LASALLE BANK MIDWEST NATIONAL ASSOCIATION,

a national banking association

("Bank")

 

 

Dated: Jun 20, 2008

 

Relating to Property located in Clermont County, Ohio

 

_____________________________________________________________________________________

THIS MORTGAGE IS ALSO A FINANCING STATEMENT COVERING FIXTURES, AND IS TO BE INDEXED IN THE REAL ESTATE RECORDS.

 

THE NAMES OF THE DEBTOR AND THE SECURED PARTY, THE MAILING ADDRESS OF THE SECURED PARTY FROM WHICH INFORMATION CONCERNING THE SECURITY INTEREST MAY BE OBTAINED, THE MAILING ADDRESS OF THE DEBTOR AND A STATEMENT INDICATING THE TYPES, OR DESCRIBING THE ITEMS OF COLLATERAL, ARE AS DESCRIBED IN THIS MORTGAGE.

       
       

       

OPEN-END MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING

(Secures Future Advances)

Maximum Indebtedness not to Exceed $27,000,000

 

This OPEN-END MORTGAGE dated as of June 20, 2008 (the "Mortgage"), is executed by APPLE ORCHARD, L.L.C., a Michigan limited liability company, whose address is 27777 Franklin Road, Suite 200, Southfield, Michigan 48034 (the “Mortgagor”), to and for the benefit of LASALLE BANK MIDWEST NATIONAL ASSOCIATION, a national banking association, whose address is 2600 West Big Beaver Road, Troy, Michigan 48084, its successors and assigns (the “Bank”).

R E C I T A L S:

A.    APPLE ORCHARD, L.L.C., a Michigan limited liability company; SUN LAKEVIEW LLC, a Michigan limited liability company; and SUN TAMPA EAST, LLC, a Michigan limited liability company (collectively, the "Borrower"), desires to borrow funds and obtain other financial accommodations from the Bank, including, without limitation, a loan evidenced by a promissory note from the Borrower to the Bank, dated June 20, 2008, in the principal amount of TWENTY SEVEN MILLION and 00/100 Dollars ($27,000,000.00) (as amended, restated or replaced from time to time, the "Note").

B.            As a condition to the Bank's loaning funds or providing other financial accommodations to the Borrower, the Bank requires that the Mortgagor grant this Mortgage in order to secure the obligations and performance of the Borrower under such loans or financial accommodations.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Mortgagor agrees as follows:

A G R E E M E N T S:

The Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER, MORTGAGE and WARRANT and GRANT A SECURITY INTEREST to the Bank and its successors and assigns forever in and to the following described property, rights and interests (referred to collectively herein as the “Property”):

(a)           The real estate located in the State of Ohio and legally described on Exhibit_A attached hereto and made a part hereof (the “Real Estate”);

(b)           All improvements of every nature whatsoever now or hereafter situated on the Real Estate, including all extensions, additions, improvements, betterments, renewals, substitutions and replacements to any of the foregoing (the “Improvements”);

(c)           All easements, rights of way, gores of real estate, streets, ways, alleys, passages, sewer rights, waters, water courses, water rights and powers, and all estates, rights, titles, interests, privileges, liberties, tenements, hereditaments and appurtenances whatsoever, in any way now or hereafter belonging, relating or appertaining to the Real Estate, and the reversions, remainders, rents, issues and profits thereof, and all the estate, right, title, interest, property, possession, claim and demand whatsoever, at law as well as in equity, of the Mortgagor of, in and to the same;

 

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(d)           All rents, revenues, issues, profits, proceeds, income, royalties, Letter of Credit Rights (as defined in the Uniform Commercial Code of the State of Ohio (the “Code”) in effect from time to time), escrows, security deposits, impounds, reserves, tax refunds and other rights to monies from the Property and/or the businesses and operations conducted by the Mortgagor thereon;

(e)           All interest of the Mortgagor in all leases and rental agreements (including, without limitation, oil and gas leases and any specific lease(s) described in an attachment to this Mortgage), written or unwritten, now or hereafter demising the Property in whole or in any part, and all amendments, modifications, extensions, renewals, substitutions and replacements for any of the foregoing (each, a “Lease”, and collectively, the “Leases”), together with all security therefor and all monies payable thereunder;

(f)           All fixtures and articles of personal property now or hereafter owned by the Mortgagor and located on or forming a part of or used in connection with the Real Estate or the Improvements, including, but without limitation, any and all air conditioners, antennae, appliances, apparatus, awnings, basins, bathtubs, bidets, boilers, bookcases, cabinets, carpets, computer hardware and software used in the operation of the Property, coolers, curtains, dehumidifiers, disposals, doors, drapes, dryers, ducts, dynamos, elevators, engines, equipment, escalators, exercise equipment, fans, fittings, floor coverings, furnaces, furnishings, furniture, hardware, heaters, humidifiers, incinerators, lighting, machinery, motors, ovens, pipes, plumbing, pumps, radiators, ranges,
recreational facilities, refrigerators, screens, security systems, shades, shelving, sinks, sprinklers, stokers, stoves, toilets, ventilators, wall coverings, washers, windows, window coverings, wiring, and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are or shall be attached to the Real Estate or the Improvements in any manner, together with the benefit of any deposits or payments now or hereafter made on such personal property or fixtures by the Mortgagor or on its behalf; it being mutually agreed that all of the aforesaid property owned by the Mortgagor and placed on the Real Estate or the Improvements, so far as permitted by law, shall be deemed to be fixtures, a part of the realty, and security for the Obligations; notwithstanding the agreement hereinabove expressed that certain articles of property form a part of the realty covered by this Mortgage and be appropriated to its use and deemed to be realty, to the extent that
such agreement and declaration may not be effective and that any of said articles may constitute Goods (as defined in the Code), this instrument shall constitute a security agreement, creating a security interest in such goods, as collateral, in the Bank, as a Secured Party, and the Mortgagor, as Debtor, all in accordance with the Code;

(g)           All of the Mortgagor’s interests in General Intangibles, including Payment Intangibles and Software (each as defined in the Code) now owned or hereafter acquired and related to the Property, including, without limitation, all of the Mortgagor’s right, title and interest in and to: (i) all agreements, licenses, permits and contracts to which the Mortgagor is or may become a party and which relate to the Property; (ii) all obligations and indebtedness owed to the Mortgagor thereunder; (iii) all intellectual property related to the Property; and (iv) all choses in action and causes of action relating to the Property;

(h)           All of the Mortgagor’s accounts now owned or hereafter created or acquired as relate to the Property and/or the businesses and operations conducted thereon, including, without limitation, all of the following now owned or hereafter created or acquired by the Mortgagor:  (i) Accounts (as defined in the Code), contract rights, book debts, notes, drafts, and other obligations or indebtedness owing to the Mortgagor arising from the sale, lease or exchange of goods or other property and/or the performance of services; (ii) the Mortgagor’s rights in, to and 

 

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under all purchase orders for goods, services or other property; (iii) the Mortgagor’s rights to any goods, services or other property represented by any of the foregoing; (iv) monies due or to become due to the Mortgagor under all contracts for the sale, lease or exchange of goods or other property and/or the performance of services including the right to payment of any interest or finance charges in respect thereto (whether or not yet earned by performance on the part of the Mortgagor); (v) Securities, Investment Property, Financial Assets and Securities Entitlements (each as defined in the Code); (vi) proceeds of any of the foregoing and all collateral security and guaranties of any kind given by any person or entity with respect to any of the foregoing; and (vii) all warranties, guarantees, permits and licenses in favor of the Mortgagor with respect to
the Property; and

(i)            All proceeds of the foregoing, including, without limitation, all judgments, awards of damages and settlements hereafter made resulting from condemnation proceeds or the taking of the Property or any portion thereof under the power of eminent domain, any proceeds of any policies of insurance, maintained with respect to the Property or proceeds of any sale, option or contract to sell the Property or any portion thereof;

FOR THE PURPOSE OF SECURING all loans, advances and other financial accommodations, including any renewals or extensions thereof, from the Bank to the Borrower and/or the Mortgagor and any and all indebtedness, liabilities and obligations of any and every kind and nature heretofore, now or hereafter owing from the Borrower and/or the Mortgagor to the Bank, however incurred or evidenced, whether primary, secondary, contingent or otherwise, whether arising under the Note, and any and all extensions and renewals thereof, this Mortgage, under any other security agreement(s), promissory note(s), guaranty(s), mortgage(s), lease(s), letter(s) of credit, interest rate, currency or commodity swap agreement(s), cap agreement(s) or collar agreement(s), and any other agreement(s) or arrangement(s) designed to protect the Borrower against fluctuations in interest rates, currency exchange rates or commodity prices, or
any other instrument(s), document(s), contract(s) or agreement(s) heretofore, now or hereafter executed by Borrower and/or the Mortgagor and delivered to the Bank or to or under which Borrower and/or the Mortgagor or any subsidiary or affiliate of Borrower and/or the Mortgagor is a party or beneficiary (collectively, the "Loan Documents"), or by oral agreement or by operation of law, plus all interest, costs, expenses and reasonable attorney fees which may be made or incurred by the Bank in the disbursement, administration or collection of such indebtedness, liabilities and obligations and in the protection, maintenance and liquidation of any collateral for such indebtedness, liabilities and obligations, and ANY FUTURE ADVANCES, WITH INTEREST THEREON, made to the Borrower and/or the Mortgagor by the Bank which are secured by this Mortgage pursuant to the provisions hereof (collectively, the "Obligations").  The Mortgagor covenants to pay when due any Obligations for which it is liable in accordance with the terms of the Loan Documents and duly perform and observe all of the terms, covenants and conditions to be observed and performed by the Mortgagor under the Note, this Mortgage and the other Loan Documents.

This Mortgage is intended to secure the unpaid balance of loan advances to be made to the Borrower by the Bank under the Note after this Mortgage has been delivered to the Clermont County, Ohio, Recorder's Office for recordation, in accordance with Sections 5301.232 and 5301.233 of the Ohio Revised Code. The maximum amount of loan advances under the Note, exclusive of interest thereon and amounts made for the payment of taxes, assessment, insurance premiums and costs incurred for the protection of the Project, which may be outstanding at any time, is Twenty Seven Million and 00/100 Dollars ($27,000,000.00).

 

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IT IS FURTHER UNDERSTOOD AND AGREED THAT:

1.            Title.  The Mortgagor represents, warrants and covenants that (a) the Mortgagor is the holder of the fee simple title to the Property, free and clear of all liens and encumbrances, except those liens and encumbrances in favor of the Bank and as otherwise described on Exhibit_B attached hereto and made a part hereof (the “Permitted Exceptions”); and (b) the Mortgagor has legal power and authority to mortgage and convey the Property.

2.            Assignment of Rents and Leases. As additional security for the Obligations and performance of the covenants and agreements set forth herein, Mortgagor hereby assigns to the Bank, and grants Bank a security interest in, any and all Leases, and all rents, issues, income and profits derived from the use of the Property or any portion thereof, whether due or to become due. These assignments shall run with the land and shall be good and valid against Mortgagor and all persons claiming by, under, or through Mortgagor from the date of recording of this Mortgage and shall continue to be operative during foreclosure or any other proceedings taken to enforce this Mortgage. If any foreclosure sale results in a deficiency, the assignments shall continue
as security during the foreclosure redemption period.  Mortgagor covenants with and warrants to Bank that as of the date of this Mortgage:

(a)           Each Lease is in full force and effect and there are no defaults existing thereunder; and

(b)           Mortgagor has not, except as may be described in an attachment, if any, to this Mortgage: (1) executed or granted any prior assignment, encumbrance, or security interest in any Lease or the rentals thereunder; (2) performed any acts or executed any other instruments or agreements which would limit or prevent Bank from obtaining the benefit of and exercising its rights conferred by this Mortgage; or (3) executed or granted any modification of any Lease, either orally or in writing.

(c)           As of the date of this Mortgage and for so long as any of the Obligations remains unpaid or unperformed:

(i)           Mortgagor shall promptly inform Bank of, assign, and deliver, any subsequent Lease of the Property or any part thereof, and make, execute and deliver to the Bank, upon demand, any and all documents, agreements and instruments as may, in Bank's opinion, be necessary to protect the Bank's rights under this Mortgage; provided, that Mortgagor's failure to do so will not impair Bank's interest in or rights with respect to any subsequent Lease, nor in any way affect the applicability of this Mortgage to such Lease and the unpaid rents due or to become due thereunder. 

(ii)          Mortgagor shall not, without the prior written consent of Bank: (1) cancel or accept surrender of a Lease; (2) modify or alter a Lease in any way, either orally or in writing; (3) reduce the amount of or postpone payment of any Lease rents; (4) consent to any assignment of the lessee's interest in a Lease, or any subletting thereunder; (5) collect or accept payment of rents under a Lease for more than one (1) month in advance; (6) make any other assignment, pledge, encumbrance, or other disposition of a Lease or any Lease rents, issues, income or profits.

(d)           Mortgagor shall perform and discharge each and every obligation, covenant, and agreement required to be performed by the landlord under any Lease and should Mortgagor fail to do so the Bank, at Bank's sole option and without releasing Mortgagor from any such obligation, may make or do the same in such manner and to such extent as the Bank deems necessary to 

 

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protect its rights and interests under this Mortgage. Any and all costs, expenses and sums paid by the Bank in performing under any Lease, including reasonable attorney fees, shall be added to the Obligations secured by this Mortgage. This assignment of rents is given as collateral security only and will not be construed as obligating Bank to perform any of the covenants or undertakings required to be performed by Mortgagor under any Lease.

3.            Maintenance, Repair, Restoration, Prior Liens, Parking.  The Mortgagor covenants that, so long as any portion of the Obligations remains unpaid, the Mortgagor will: (a) promptly repair, restore or rebuild any Improvements now or hereafter on the Property which may become damaged or be destroyed to a condition substantially similar to the condition immediately prior to such damage or destruction, whether or not proceeds of insurance are available or sufficient for the purpose; (b) keep the Property in good condition and repair, without waste, and free from construction or like liens or claims or other liens or claims for lien (subject to the Mortgagor’s right to contest liens as permitted by the terms hereof; (c) pay when due any
indebtedness which may be secured by a permitted lien or charge on the Property, and upon request furnish satisfactory evidence of the discharge of such lien to the Bank (subject to the Mortgagor’s right to contest liens as permitted by the terms of hereof); (d) comply with all requirements of law, municipal ordinances or restrictions and covenants of record with respect to the Property and the use thereof; (e) obtain and maintain in full force and effect, and abide by and satisfy the material terms and conditions of, all material permits, licenses, registrations and other authorizations with or granted by any governmental authorities that may be required from time to time with respect to the performance of its obligations under this Mortgage; (f) make no material alterations in the Property or demolish any portion of the Property without the Bank’s prior written consent, except as required by law or municipal ordinance; (g) suffer or permit no change in the use or general
nature of the occupancy of the Property, without the Bank’s prior written consent; (h) not initiate or acquiesce in any zoning reclassification with respect to the Property, without the Bank’s prior written consent; (i) provide and thereafter maintain adequate parking areas within the Property as may be required by law, ordinance or regulation (whichever may be greater), together with any sidewalks, aisles, streets, driveways and sidewalk cuts and sufficient paved areas for ingress, egress and right-of-way to and from the adjacent public thoroughfares necessary or desirable for the use thereof; and (j) comply, and cause the Property at all times to be operated in compliance, with all applicable federal, state, local and municipal environmental, health and safety laws, statutes, ordinances, rules and regulations.

4.            Payment of Taxes and Assessments.  The Mortgagor will pay before delinquent or the date on which any penalty attaches, all general and special taxes, assessments, water charges, sewer charges, and other fees, taxes, charges and assessments of every kind and nature whatsoever (all herein generally called “Taxes”), whether or not assessed against the Mortgagor, if applicable to the Property or any interest therein, or the Obligations, or any obligation or agreement secured hereby, subject to the Mortgagor’s right to contest the same, as provided by the terms hereof; and the Mortgagor will, upon written request, furnish to the Bank duplicate receipts therefor within ten (10) days
after the Bank’s request.  After the occurrence of an Event of Default and the expiration of any applicable cure period, the Bank shall have the right to request that the Mortgagor deposit with the Bank monthly such amounts as estimated by the Bank will be sufficient to establish a fund from which to pay in full each installment of annual Taxes for the current calendar year as it becomes due.  Such deposits will be held without any allowance of interest and are to be used for the payment of Taxes next due and payable when they become due.  So long as no Event of Default shall exist, the Bank shall, at its option, pay such Taxes when the same become due and payable (upon submission of appropriate bills therefor from the Mortgagor) or shall release sufficient funds to the Mortgagor for the payment thereof.  If the funds so deposited are insufficient to pay any such Taxes for any year (or installments thereof, as applicable) when the same shall become due and payable, the Mortgagor
shall, within ten (10) days after receipt of written demand therefor, deposit additional funds as may be necessary to pay such Taxes in full.  If the funds so deposited exceed the amount required to pay such Taxes for any year, the excess shall be applied toward 

 

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subsequent deposits.  Said deposits need not be kept separate and apart from any other funds of the Bank.  The Bank, in making any payment hereby authorized relating to Taxes, may do so according to any bill, statement or estimate procured from the appropriate public office without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. Upon an Event of Default, the Bank may, at its option, apply any monies at the time on deposit to cure an Event of Default or to pay any of the Obligations in such order and manner as the Bank may elect.  If such deposits are used to cure an Event of Default or pay any of the Obligations, the Mortgagor shall immediately, upon demand by the Bank, deposit with the Bank an amount equal to the amount expended by the Mortgagor from the deposits.  When the Obligations has been
fully paid, any remaining deposits shall be returned to the Mortgagor.  Such deposits are hereby pledged as additional security for the Obligations and shall not be subject to the direction or control of the Mortgagor.  The Bank shall not be liable for any failure to apply to the payment of Taxes any amount so deposited unless the Mortgagor, prior to an Event of Default, shall have requested the Bank in writing to make application of such funds to the payment of such amounts, accompanied by the bills for such Taxes.  The Bank shall not be liable for any act or omission taken in good faith or pursuant to the instruction of any party.

5.            Insurance.  The Mortgagor shall at all times keep all buildings, improvements, fixtures and articles of personal property now or hereafter situated on the Property insured against loss or damage by fire and such other hazards as may reasonably be required by the Bank, in accordance with the Bank's current insurance requirements, and such other insurance as the Bank may from time to time reasonably require.

(a)           Unless the Mortgagor provides the Bank evidence of the insurance coverages required hereunder, the Bank may purchase insurance at the Mortgagor’s expense to cover the Bank’s interest in the Property.  The insurance may, but need not, protect the Mortgagor’s interest.  The coverages that the Bank purchases may not pay any claim that the Mortgagor makes or any claim that is made against the Mortgagor in connection with the Property.  The Mortgagor may later cancel any insurance purchased by the Bank, but only after providing the Bank with evidence that the Mortgagor has obtained insurance as required by this Mortgage.  If the Bank purchases insurance for the Property, the Mortgagor will be responsible for the costs of such insurance, including,
without limitation, interest and any other charges which the Bank may impose in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance.  The costs of the insurance may be added to the Obligations.  The cost of the insurance may be more than the cost of insurance the Mortgagor may be able to obtain on its own.

(b)           The Mortgagor shall not take out separate insurance concurrent in form or contributing in the event of loss with that required to be maintained hereunder unless the Bank is included thereon as the loss payee or an additional insured as applicable, under a standard mortgage clause acceptable to the Bank and such separate insurance is otherwise acceptable to the Bank.

(c)           In the event of loss, the Mortgagor shall give prompt notice thereof to the Bank, who, if such loss exceeds an amount equal to ten percent (10.00%) of the Obligations (the “Threshold”), shall have the sole and absolute right to make proof of loss.  If such loss exceeds the Threshold or if such loss is equal to or less than the Threshold and the conditions set forth in clauses (i), (ii) and (iii) of the immediately succeeding subsection are not satisfied, then the Bank, solely and directly, shall receive such payment for loss from each insurance company concerned.  If and only if (i) such loss is equal to or less than the Threshold, (ii) no Event of Default or event that with the passage
of time, the giving of notice or both would constitute an Event of Default then exists, (iii) the Bank determines that the work required to complete the repair or restoration 

 

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of the Property necessitated by such loss can be completed no later than the maturity date of the earliest maturing Obligation, and (iv) the total of the insurance proceeds and such additional amounts placed on deposit with the Bank by the Mortgagor for the specific purpose of rebuilding or restoring the Improvements equals or exceeds, in the sole and absolute discretion of the Bank, the reasonable costs of such rebuilding or restoration, then the Bank shall endorse to the Mortgagor any such payment and the Mortgagor may collect such payment directly.  The Bank shall have the right, at its option and in its sole discretion, to apply any insurance proceeds received by the Bank pursuant to the terms of this section, after the payment of all of the Bank’s expenses, either (i) on account of the Obligations, irrespective of whether such principal balance is then due and
payable, whereupon the Bank may declare the whole of the balance of Obligations to be due and payable, or (ii) to the restoration or repair of the property damaged as provided in subsection (d) below; provided, however, that the Bank hereby agrees to permit the application of such proceeds to the restoration or repair of the damaged property, subject to the provisions of subsection (d) below, if (i) the Bank has received satisfactory evidence that such restoration or repair shall be completed no later than the maturity date of the earliest maturing Obligation, and (ii) no Event of Default, or event that with the passage of time, the giving of notice or both would constitute an Event of Default, then exists.  If insurance proceeds are made available to the Mortgagor by the Bank as hereinafter provided, the Mortgagor shall repair, restore or rebuild the damaged or destroyed portion of the Property so that the condition and value of the Property are substantially
the same as the condition and value of the Property prior to being damaged or destroyed.  Any insurance proceeds applied on account of the unpaid principal balance of the Obligations shall be subject to any prepayment premium provided for in the Loan Documents.  In the event of foreclosure of this Mortgage, all right, title and interest of the Mortgagor in and to any insurance policies then in force shall pass to the purchaser at the foreclosure sale.

(d)           If insurance proceeds are made available by the Bank to the Mortgagor, the Mortgagor shall comply with the following conditions:

(iii)         Before commencing to repair, restore or rebuild following damage to, or destruction of, all or a portion of the Property, whether by fire or other casualty, the Mortgagor shall obtain from the Bank its approval of all site and building plans and specifications pertaining to such repair, restoration or rebuilding.

(iv)         Prior to each payment or application of any insurance proceeds to the repair or restoration of the improvements upon the Property, the Bank shall be satisfied as to the following:

(A)          either such Improvements have been fully restored, or the expenditure of money as may be received from such insurance proceeds will be sufficient to repair, restore or rebuild the Property, free and clear of all liens, claims and encumbrances, except the lien of this Mortgage and the Permitted Exceptions, or, if such insurance proceeds shall be insufficient to repair, restore and rebuild the Property, the Mortgagor has deposited with the Bank such amount of money which, together with the insurance proceeds shall be sufficient to restore, repair and rebuild the Property; and

(B)          prior to each disbursement of any such proceeds, the Bank shall be furnished with a statement of the Bank’s architect (the cost of which shall be borne by the Mortgagor), certifying the extent of the repair and restoration completed to the date thereof, and that such repairs, restoration, and rebuilding 

 

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have been performed to date in conformity with the plans and specifications approved by the Bank and with all statutes, regulations or ordinances (including building and zoning ordinances) affecting the Property; and the Bank shall be furnished with appropriate evidence of payment for labor or materials furnished to the Property, and total or partial lien waivers substantiating such payments.

(v)          If the Mortgagor shall fail to restore, repair or rebuild the Improvements within a time deemed satisfactory by the Bank, then the Bank, at its option, may (A) commence and perform all necessary acts to restore, repair or rebuild the said Improvements for or on behalf of the Mortgagor, or (B) declare an Event of Default.  If insurance proceeds shall exceed the amount necessary to complete the repair, restoration or rebuilding of the Improvements, such excess shall be applied on account of the Obligations irrespective of whether such Obligations is then due and payable without payment of any premium or penalty.

6.            Condemnation.  If all or any part of the Property are damaged, taken or acquired, either temporarily or permanently, in any condemnation proceeding, or by exercise of the right of eminent domain, the amount of any award or other payment for such taking or damages made in consideration thereof, to the extent of the full amount of the remaining unpaid Obligations, is hereby assigned to the Bank, who is empowered to collect and receive the same and to give proper receipts therefor in the name of the Mortgagor and the same shall be paid forthwith to the Bank.  Such award or monies shall be applied on account of the Obligations, irrespective of whether such Obligations is then due and payable and, at any time from and after the taking the Bank may
declare the whole of the balance of the Obligations to be due and payable.  Notwithstanding the provisions of this section to the contrary, if any condemnation or taking of less than the entire Property occurs and provided that no Event of Default and no event or circumstance which with the passage of time, the giving of notice or both would constitute an Event of Default then exists, and if such partial condemnation, in the reasonable discretion of the Bank, has no material adverse effect on the operation or value of the Property, then the award or payment for such taking or consideration for damages resulting therefrom may be collected and received by the Mortgagor, and the Bank hereby agrees that in such event it shall not declare the Obligations to be due and payable, if it is not otherwise then due and payable.

7.            Taxation.  If, by the laws of the United States of America, or of any state or political subdivision having jurisdiction over the Mortgagor, any tax is due or becomes due in respect of the execution and delivery of this Mortgage or any of the other Loan Documents, the Mortgagor shall pay such tax in the manner required by any such law.  The Mortgagor further agrees to reimburse the Bank for any sums which the Bank may expend by reason of the imposition of any such tax.  Notwithstanding the foregoing, the Mortgagor shall not be required to pay any income or franchise taxes of the Bank.  If any law is enacted after the date hereof requiring (a) the deduction of any lien on the Property from the value thereof for the purpose of taxation or
(b) the imposition upon the Bank of the payment of the whole or any part of the Taxes, charges or liens herein required to be paid by the Mortgagor, or (c) a change in the method of taxation of mortgages or debts secured by mortgages or the Bank’s interest in the Property, or the manner of collection of taxes, so as to affect this Mortgage or the Obligations or the holders thereof, then the Mortgagor, upon demand by the Bank, shall pay such Taxes or charges, or reimburse the Bank therefor; provided, however, that the Mortgagor shall not be deemed to be required to pay any income or franchise taxes of the Bank.  Notwithstanding the foregoing, if in the opinion of counsel for the Bank, it is or may be unlawful to require the Mortgagor to make such payment or the making of such payment might result in the imposition of interest beyond the maximum amount permitted by law, then the Bank may declare all of the Obligations to be immediately due and payable.

 

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8.            Bank’s Performance of Defaulted Acts and Expenses Incurred by Bank.  If an Event of Default has occurred, the Bank may, but need not, make any payment or perform any act herein required of the Mortgagor in any form and manner deemed expedient by the Bank, and may, but need not, make full or partial payments of principal or interest on prior encumbrances, if any, and purchase, discharge, compromise or settle any tax lien or other prior lien or title or claim thereof, or redeem from any tax sale or forfeiture affecting the Property or consent to any tax or assessment or cure any default of the Mortgagor in any lease of the Property.  All monies paid for any of the purposes herein authorized and all expenses paid or incurred in connection
therewith, including reasonable attorneys’ fees, and any other monies advanced by the Bank in regard to any tax provided for herein or to protect the Property or the lien hereof, shall be so much additional Obligations, and shall become immediately due and payable by the Mortgagor to the Bank, upon demand, and with interest thereon accruing from the date of such demand until paid at the highest rate provided in the Loan Documents.  In addition to the foregoing, any costs, expenses and fees, including reasonable attorneys’ fees, incurred by the Bank in connection with (a) sustaining the lien of this Mortgage or its priority, (b) protecting or enforcing any of the Bank’s rights hereunder, (c) recovering any Obligations, (d) any litigation or proceedings affecting the Note, this Mortgage, any of the other Loan Documents or the Property, including without limitation, bankruptcy and probate proceedings, or (e)  preparing for the commencement, defense
or participation in any threatened litigation or proceedings affecting the Note, this Mortgage, any of the other Loan Documents or the Property, with interest thereon accruing from the date of such demand until paid at the highest rate provided in the Loan Documents, shall be so much additional Obligations, and shall become immediately due and payable by the Mortgagor to the Bank, upon demand.  Should any amount paid out or advanced by the Bank hereunder, or pursuant to any agreement executed by the Mortgagor in connection with the Loan, be used directly or indirectly to pay off, discharge or satisfy, in whole or in part, any lien or encumbrance upon the Property or any part thereof, then the Bank shall be subrogated to any and all rights, equal or superior titles, liens and equities, owned or claimed by any owner or holder of said outstanding liens, charges and indebtedness, regardless of whether said liens, charges and indebtedness are acquired by assignment or have been released of
record by the holder thereof upon payment.

9.            Security Agreement.  The Mortgagor and the Bank agree that this Mortgage shall constitute a Security Agreement within the meaning of the Code with respect to all property described herein in which a security interest can be granted under Article 9 of the Code (the “Personal Property”; all of the Personal Property and the replacements, substitutions and additions thereto and the proceeds thereof being sometimes hereinafter collectively referred to as “Collateral”), and that a security interest in and to the Collateral is hereby granted to the Bank to secure payment of the Obligations.

(a)           The only persons having any interest in the Collateral are the Mortgagor, the Bank and holders of interests, if any, expressly permitted hereby.

(b)           No Financing Statement (other than Financing Statements showing the Bank as the sole secured party, or with respect to liens or encumbrances, if any, expressly permitted hereby) covering any of the Collateral or any proceeds thereof is on file in any public office except pursuant hereto; the Mortgagor, at its own cost and expense, upon demand, will furnish to the Bank such further information and will execute and deliver to the Bank such financing statements and other documents in form satisfactory to the Bank and will do all such acts as the Bank may request at any time or from time to time or as may be necessary or appropriate to establish and maintain a perfected security interest in the Collateral as security for the Obligations, subject to no other liens or
encumbrances, other than liens or encumbrances benefiting the Bank and liens and encumbrances (if any) expressly permitted hereby. The Mortgagor will pay the cost of filing or recording such financing statements or other documents, and this instrument, in all public offices wherever filing or recording is deemed by the Bank to be desirable.  The Mortgagor hereby irrevocably authorizes the Bank at any time, and from time to 

 

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time, to file in any jurisdiction any initial financing statements and amendments thereto, without the signature of the Mortgagor covering the Collateral and containing such information as is required by Section 5 of Article 9 of the Uniform Commercial Code of the jurisdiction wherein such financing statement or amendment is filed

(c)           Upon an Event of Default hereunder, the Bank shall have the remedies of a secured party under the Code, including, without limitation, the right to take immediate and exclusive possession of the Collateral.  The Bank will give the Mortgagor at least ten (10) days notice of the time and place of any public sale of the Collateral or of the time after which any private sale or any other intended disposition thereof is made. The requirements of reasonable notice shall be met if such notice is mailed, by certified United States mail or equivalent, postage prepaid, to the address of the Mortgagor hereinafter set forth at least ten (10) days before the time of the sale or disposition.  Any such sale may be held in conjunction with any foreclosure sale of the Property.
If the Bank so elects, the Property and the Collateral may be sold as one lot.  The net proceeds realized upon any such disposition, after deduction for the expenses of retaking, holding, preparing for sale, selling and the reasonable attorneys’ fees and legal expenses incurred by the Bank, shall be applied against the Obligations in such order or manner as the Bank shall select.  The Bank will account to the Mortgagor for any surplus realized on such disposition.

(d)           The terms and provisions contained in this section, unless the context otherwise requires, shall have the meanings and be construed as provided in the Code.

(e)           This Mortgage is intended to be a financing statement within the purview of Section 9-502(3) of the Code with respect to the Collateral and the goods described herein, which goods are or may become fixtures relating to the Property.

10.          Restrictions on Transfer.  The Mortgagor, without the prior written consent of the Bank, shall not effect, suffer or permit any Prohibited Transfer (as defined herein).

(a)           Any conveyance, sale, assignment, transfer, lien, pledge, mortgage, security interest or other encumbrance or alienation (or any agreement to do any of the foregoing) of any of the following properties or interests shall constitute a “Prohibited Transfer”:

(i)           The Property or any part thereof or interest therein, excepting only sales or other dispositions of Collateral no longer useful in connection with the operation of the Property (“Obsolete Collateral”), provided that prior to the sale or other disposition thereof, such Obsolete Collateral has been replaced by Collateral of at least equal value and utility which is subject to the lien hereof with the same priority as with respect to the Obsolete Collateral;

(ii)          Ownership or control of the Mortgagor, unless permitted under the Loan Documents;

in each case whether any such conveyance, sale, assignment, transfer, lien, pledge, mortgage, security interest, encumbrance or alienation is effected directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise; provided, however, that the foregoing provisions of this section shall not apply (i) to the lien of current taxes and assessments not in default, or (ii) to leases permitted by the terms of the Loan Documents, if any.

(b)           In determining whether or not to make the loan secured by this Mortgage, the Bank evaluated the background and experience of the Mortgagor in owning and operating 

 

11

property such as the Property, found it acceptable and relied and continues to rely upon same as the means of maintaining the value of the Property which is the Bank’s security for the Obligations.  The Mortgagor further recognizes that any secondary junior financing placed upon the Property (i) may divert funds which would otherwise be used to pay the Obligations; (ii) could result in acceleration and foreclosure by any such junior encumbrancer which would force the Bank to take measures and incur expenses to protect its security; (iii) would detract from the value of the Property should the Bank come into possession thereof with the intention of selling same; and (iv) would impair the Bank’s right to accept a deed in lieu of foreclosure, as a foreclosure by the Bank would be necessary to clear the title to the Property.  In accordance with the foregoing
and for the purposes of (a) protecting the Bank’s security, both of repayment and of value of the Property; (b) giving the Bank the full benefit of its bargain and contract with the Mortgagor; (c) keeping the Property free of subordinate financing liens, the Mortgagor agrees that if this section is deemed a restraint on alienation, that it is a reasonable one.

11.          Single Asset Entity.  The Mortgagor shall not hold or acquire, directly or indirectly, any ownership interest (legal or equitable) in any real or personal property other than the Property, or become a shareholder of or a member or partner in any entity which acquires any property other than the Property, until such time as the Obligations have been fully repaid.  The operating agreement of the Mortgagor shall limit its purpose to the acquisition, operation, management and disposition of the Property, and such purposes shall not be amended without the prior written consent of the Bank.  The Mortgagor covenants:

(c)           To maintain its assets, accounts, books, records, financial statements, stationery, invoices, and checks separate from and not commingled with any of those of any other person or entity, except that Mortgagor’s financial position, assets, results of operations and cash flows may be included in the consolidated financial statements of an affiliate; provided, however, that any such consolidated financial statement shall contain a note indicating that its separate assets and liabilities are neither available to pay the debts of the consolidated entity nor constitute obligations of the consolidated entity;

(d)           To conduct its own business in its own name, allocate fairly and reasonably any overhead for shared employees and office space, to maintain an arm’s length relationship with its affiliates, and to pay its own liabilities out of its own funds, to the extent of revenue generated from the operation of the Property; provided, however, the foregoing covenant shall not require the members or managers of the Mortgagor to make any additional capital contributions to the Mortgagor or cause personal liability;

(e)           To hold itself out as a separate entity, correct any known misunderstanding regarding its separate identity, maintain adequate capital in light of its contemplated business operations to the extent available only from the cash flow generated from the operation of the Property, and observe all organizational formalities;

(f)           Not to guarantee or become obligated for the debts of any other entity or person or hold out its credits as being available to satisfy the obligations of others, including not acquiring obligations or securities of its partners, members or shareholders;

(g)           Not to pledge its assets for the benefit of any other entity or person or make any loans or advances to any person or entity;

(h)           Not to enter into any contract or agreement with any party which is directly or indirectly controlling, controlled by or under common control with the Mortgagor (an “Affiliate”), except upon terms and conditions that are intrinsically fair and substantially similar 

 

12

to those that would be available on an arms-length basis with third parties other than any Affiliate;

(i)            Neither the Mortgagor nor any constituent party of the Mortgagor will seek the dissolution or winding up, in whole or in part, of the Mortgagor, nor will the Mortgagor merge with or be consolidated into any other entity;

(j)            The Mortgagor has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any constituent party of the Mortgagor, any Affiliate or any other person;

(k)           The Mortgagor now has and will hereafter have no debts or obligations other than normal accounts payable in the ordinary course of business, this Mortgage, and the Loan; and any other indebtedness or other obligation of the Mortgagor has been paid in full prior to or through application of proceeds from the funding of the Loan.

Notwithstanding any contrary provision in this Mortgage or in any of the Loan Documents, the following operations and activities of Borrower and its Affiliates shall not be considered a violation of the covenants contained in this Section 11: (1) offering services to residents of the Property through Affiliates of Mortgagor or other third parties for which fees and charges may be collected by Mortgagor or the Affiliate and paid to such Affiliate or third party, which may include, without limitation, cable and internet services, landscaping, snow removal, lease or sale of manufactured homes, and child care; provided that such Affiliates do not conduct their business in the name of Mortgagor and that any agreements between Mortgagor and its Affiliates relating to such services are on commercially reasonable terms similar to those of an arm’s length transaction; (2)  depositing all
gross revenue, whether cash, cash equivalents or similar assets, in an operating account maintained specifically for the Property (a “Property Operating Account”), after paying expenses of Mortgagor or causing Sun Communities Operating Limited Partnership, a Michigan limited partnership (“SCOLP”), and/or Sun Communities, Inc., a Michigan corporation (“Sun”), to pay such expenses, and distributing such remaining cash to Sun, SCOLP, or at the direction of Sun or SCOLP, as applicable, to any other Affiliate of Mortgagor, and in any case, distributing such remaining cash that does not belong to the Mortgagor promptly to such entities; (3) paying all payables, debts and other liabilities arising from or in connection with the operation of the Property from the Property Operating Account, or causing SCOLP and/or Sun to pay such liabilities; (4) using ancillary assets in connection with the operation of the Property held in the name of Sun, SCOLP, or any of
their Affiliates, such as vehicles and office and maintenance equipment; (5) treating the Property for all purposes as part of and within the portfolio of manufactured housing communities owned by SCOLP or its Affiliates, for marketing, promotion and providing information and reports to the public or as required by any applicable law; provided, however, that Mortgagor shall conduct business in its own name or its assumed or trade name; and/or (6) allocating general overhead and administrative costs incurred by Sun and SCOLP and/or other Affiliates of Mortgagor in a fair and equitable manner.

12.          Events of Default, Foreclosure; Expense of Litigation.  If an event of default, as defined in the Loan Documents, shall occur under the Obligations (an "Event of Default"), the Bank may, at its option, declare the whole of the Obligations to be immediately due and payable without further notice to the Mortgagor.  When all or any part of the Obligations shall become due, whether by acceleration or otherwise, the Bank shall have the right to foreclose this Mortgage and sell the Property at public auction or venue pursuant to applicable law.  In the event of a foreclosure sale, the Bank is hereby authorized, without the consent of the Mortgagor, to assign any and all insurance policies to the purchaser at such
sale or to take such other steps as the Bank may deem advisable to cause the interest of such purchaser to be protected by any of such insurance policies.

 

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(a)           Mortgagor agrees to pay all of Bank's costs and expenses, including reasonable attorney fees, which shall be added to the Obligations secured by this Mortgage. At any foreclosure sale, Mortgagor agrees that in its foreclosure sale bid price the Bank shall be allowed to deduct from the appraised value of the Property: (i) a brokerage commission of not more than ten percent (10%) of the Property value; (ii) the unpaid balance of any mortgage or other liens which have priority over the lien of this Mortgage; and (iii) the sum of all unpaid property taxes and assessments and insurance premiums due and to become due on the Property through the date upon which the foreclosure redemption period shall expire. Any foreclosure sale may, at the sole option of the Bank, be
made en masse or in parcels, any law to the contrary notwithstanding, and Mortgagor hereby knowingly, voluntarily and intelligently waives any right to require any such foreclosure sale to be made in parcels or any right to select which parcels shall be sold. The proceeds of any foreclosure sale shall be applied, as the Bank elects, to the payment of Bank's collection and other expenses, including reasonable attorney fees, and/or payment of the Obligations, with the surplus, if any, to Mortgagor or Mortgagor's successor in interest. Commencement of proceedings to foreclose this Mortgage in any manner authorized by law shall be deemed an exercise of the Bank's option to accelerate the Obligations. After the date upon which the maturity of the Obligations secured by this Mortgage has been accelerated, Bank acceptance of any amount(s) paid by Mortgagor less than the full unpaid principal balance of the Obligations plus accrued interest, late charges and Bank's costs and expenses in this
Mortgage described, shall not waive the default or acceleration, but shall only be credited upon the unpaid balance of the Obligations unless the Bank specifically agrees in writing to waive any such default and/or acceleration.

(b)           The Bank may procure mortgage foreclosure or title reports. Mortgagor covenants to pay forthwith to the Bank all sums paid for such purposes with interest at the highest rate applicable to the Obligations, and such sums and the interest thereon shall constitute a further lien upon the Property. The Bank may also procure appraisals, environmental audits and such other investigations or analyses of the Property as the Bank may determine to be required by regulatory or accounting rules, procedures or practices or to otherwise be prudent or necessary. Mortgagor shall grant the Bank free and unrestricted access to the Property for such purposes. Mortgagor covenants to pay forthwith to the Bank all sums paid for such purposes with interest at the highest rate
applicable to the Obligations, and such sums and the interest thereon shall constitute a further lien upon the Property.

13.          Appointment of Receiver.  In conjunction with any foreclosure of this Mortgage, Bank shall be entitled to seek the appointment of a receiver for the Property in accordance with applicable law.  Such appointment may be made either before or after sale, without notice, without regard to the solvency or insolvency of the Mortgagor at the time of application for such receiver and without regard to the value of the Property or whether the same shall be then occupied as a homestead or not and the Bank hereunder or any other holder of the Note may be appointed as such receiver.  Such receiver shall have power to collect the rents, issues and profits of the Property (i) during the pendency of such foreclosure, (ii) in case of a sale and a deficiency,
during the full statutory period of redemption, whether there be redemption or not, and (iii) during any further times when the Mortgagor, but for the intervention of such receiver, would be entitled to collect such rents, issues and profits.  Such receiver also shall have all other powers and rights that may be necessary or are usual in such cases for the protection, possession, control, management and operation of the Property during said period, including, to the extent permitted by law, the right to lease all or any portion of the Property for a term that extends beyond the time of such receiver's possession without obtaining prior court approval of such lease.  The court from time to time may authorize the application of the net income received by the receiver in payment of (a) the Obligations, or any tax, special assessment or other lien which may be or become superior to the lien 

 

14

hereof or of such decree, provided such application is made prior to foreclosure sale, and (b) any deficiency upon a sale and deficiency.

14.          Bank’s Right of Possession in Case of Default.  At any time after an Event of Default has occurred, the Mortgagor shall, upon demand of the Bank, surrender to the Bank possession of the Property.  The Bank, in its discretion, may, with process of law, enter upon and take and maintain possession of all or any part of the Property, together with all documents, books, records, papers and accounts relating thereto, and may exclude the Mortgagor and its employees, agents or servants therefrom, and the Bank may then hold, operate, manage and control the Property, either personally or by its agents.  The Bank shall have full power to use such measures, legal or equitable, as in its discretion may be deemed proper or necessary to enforce the payment or
security of the avails, rents, issues, and profits of the Property, including actions for the recovery of rent, actions in forcible detainer and actions in distress for rent.  Without limiting the generality of the foregoing, the Bank shall have full power to: (a) cancel or terminate any lease or sublease for any cause or on any ground which would entitle the Mortgagor to cancel the same; (b) elect to disaffirm any lease or sublease which is then subordinate to the lien hereof; (c) extend or modify any then existing leases and to enter into new leases, which extensions, modifications and leases may provide for terms to expire, or for options to lessees to extend or renew terms to expire, beyond the Maturity Date and beyond the date of the issuance of a deed or deeds to a purchaser or purchasers at a foreclosure sale, it being understood and agreed that any such leases, and the options or other such provisions to be contained therein, shall be binding upon the Mortgagor and all persons
whose interests in the Property are subject to the lien hereof and upon the purchaser or purchasers at any foreclosure sale, notwithstanding any redemption from sale, discharge of the Obligations, satisfaction of any foreclosure judgment, or issuance of any certificate of sale or deed to any purchaser; (d) make any repairs, renewals, replacements, alterations, additions, betterments and improvements to the Property as the Bank deems are necessary; (e) insure and reinsure the Property and all risks incidental to the Bank’s possession, operation and management thereof.

15.          Rights Cumulative.  Each right, power and remedy herein conferred upon the Bank is cumulative and in addition to every other right, power or remedy, express or implied, given now or hereafter existing under any of the Loan Documents or at law or in equity, and each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient by the Bank, and the exercise or the beginning of the exercise of one right, power or remedy shall not be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy, and no delay or omission of the Bank in the exercise of any right, power or remedy accruing hereunder or arising otherwise
shall impair any such right, power or remedy, or be construed to be a waiver of any Event of Default or acquiescence therein.

16.          Bank’s Right of Inspection.  The Bank and its representatives shall have the right to inspect the Property and the books and records with respect thereto at all reasonable times upon not less than twenty four (24) hours prior notice to the Mortgagor, and access thereto, subject to the rights of tenants in possession, shall be permitted for that purpose.

17.          Notices.  Any notices, communications and waivers under this Mortgage shall be in writing and shall be (i) delivered in person, (ii) mailed, postage prepaid, either by registered or certified mail, return receipt requested, or (iii) by overnight express carrier, addressed to the Mortgagor or the Bank at the address shown for each party, respectively, in the first paragraph of this Mortgage or to any other address as to any of the parties hereto, as such party shall designate in a written notice to the other party hereto.  All notices sent pursuant to the terms of this section shall be deemed received (i) if personally delivered, then on the date of delivery, (ii) if sent by overnight, express carrier, then on the next federal
banking day immediately following the day sent, or (iii) if sent by registered or certified mail, then on the earlier of the third federal banking day following the day sent or when actually received.

 

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18.          Contests.  Notwithstanding anything to the contrary herein contained, the Mortgagor shall have the right to contest by appropriate legal proceedings diligently prosecuted any Taxes imposed or assessed upon the Property or which may be or become a lien thereon and any construction or other liens or claims for lien upon the Property (each, a “Contested Liens”), and no Contested Lien shall constitute an Event of Default hereunder, if, but only if:

(a)           The Mortgagor shall forthwith give notice of any Contested Lien to the Bank at the time the same shall be asserted;

(b)           The Mortgagor shall either pay under protest or deposit with the Bank the full amount (the “Lien Amount”) of such Contested Lien, together with such amount as the Bank may reasonably estimate as interest or penalties which might arise during the period of contest; provided that in lieu of such payment the Mortgagor may furnish to the Bank a bond or title indemnity in such amount and form, and issued by a bond or title insuring company, as may be satisfactory to the Bank.

19.          Further Instruments.  Upon request of the Bank, the Mortgagor shall execute, acknowledge and deliver all such additional instruments and further assurances of title and shall do or cause to be done all such further acts and things as may reasonably be necessary fully to effectuate the intent of this Mortgage and of the other Loan Documents.

20.          Indemnity.  The Mortgagor hereby covenants and agrees that no liability shall be asserted or enforced against the Bank in the exercise of the rights and powers granted to the Bank in this Mortgage, and the Mortgagor hereby expressly waives and releases any such liability, except to the extent resulting from the gross negligence or willful misconduct of the Bank.  The Mortgagor shall indemnify and save the Bank harmless from and against any and all liabilities, obligations, losses, damages, claims, costs and expenses, including reasonable attorneys’ fees and court costs (collectively, “Claims”), of whatever kind or nature which may be imposed on,
incurred  by or asserted against the Bank at any time by any third party which relate to or arise from:  (a) any suit or proceeding (including probate and bankruptcy proceedings), or the threat thereof, in or to which the Bank may or does become a party, either as plaintiff or as a defendant, by reason of this Mortgage or for the purpose of protecting the lien of this Mortgage; (b) the offer for sale or sale of all or any portion of the Property; and (c) the ownership, leasing, use, operation or maintenance of the Property, if such Claims relate to or arise from actions taken prior to the surrender of possession of the Property to the Bank in accordance with the terms of this Mortgage; provided, however, that the Mortgagor shall not be obligated to indemnify or hold the Bank harmless from and against any Claims directly arising from the gross negligence or willful misconduct of the Bank.  All costs provided for herein and paid for by the Bank shall be so much additional
Obligations and shall become immediately due and payable upon demand by the Bank and with interest thereon from the date incurred by the Bank until paid at the highest rate provided in the Loan Documents.

21.          Environmental Representations, Warranties, Covenants and Indemnification.  The Mortgagor represents and warrants to the Bank that neither the Property nor the operations of the Mortgagor are in violation of any Environmental Law or any permit or authorization issued pursuant thereto. No Hazardous Substances have been released on or from the Property in violation of any Environmental Laws. The Mortgagor covenants and agrees to at all times strictly observe and promptly comply with all Environmental Laws and shall keep the Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Laws ("Environmental Liens").  The Mortgagor shall promptly notify the Bank in writing if
the Mortgagor knows, suspects or believes there is or are (a) any Hazardous Substances, other than those used by the Mortgagor or tenants under leases at the Property in the ordinary course of their occupancy and/or businesses and in compliance with all Environmental Laws, present on the Property; (b) any release of Hazardous Substances in, on, under, from or migrating 

 

16

towards the Property; (c) any non-compliance with Environmental Laws related in any way to the Property; (d) any actual or potential Environmental Liens; (e) any investigation or action or claim, whether threatened or pending, by any governmental agency or third party pertaining to the Release of Hazardous Substances in, on, under, from, or migrating towards the Property.  Mortgagor agrees to allow the Bank or its agent access to the Property to confirm Mortgagor's compliance with all Environmental Laws and Bank may once each calendar year without cause and, at any time upon reasonable information to believe that there is a potential violation of, or liability under, the Environmental Laws, at Mortgagor's sole cost and expense, hire, or require Mortgagor to hire, an environmental consultant (subject to Bank’s approval which is not to be unreasonably withheld) to inspect, test and audit the Property
and advise the Bank concerning Mortgagor's compliance with Environmental Laws.  Any costs paid by Bank for violations of Environmental Laws or to hire an environmental consultant shall be added to the Obligations secured by this Mortgage.  Mortgagor agrees to indemnify and hold the Bank harmless from any and all losses, costs, suits, harm, liability, and damages of any and every kind, including reasonable attorney fees, which result from or are related to any violation(s) by Mortgagor or Mortgagor's predecessors in title to the Property of any Environmental Laws, and agrees that such indemnity shall survive the foreclosure or discharge of this Mortgage and shall continue so long as Bank has any interest in or liability for the Property.  "Environmental Laws" shall mean any and all federal, state and local laws (whether under common law, statute, rule, regulation or otherwise), requirements under permits or other authorizations issued with respect thereto, and other orders, decrees,
judgments, directives or other requirements of any governmental authority with jurisdiction over the Property and/or the Mortgagor relating to or imposing liability or standards of conduct (including disclosure or notification) concerning protection of human health or the environment or Hazardous Substances or any activity involving Hazardous Substances, all as previously and in the future to be amended.  "Hazardous Substance" shall mean, but is not limited to, any substance, chemical, material or waste (a) the presence of which causes a nuisance or trespass of any kind; (b) which is regulated by any federal, state or local governmental authority because of its toxic, flammable, corrosive, reactive, carcinogenic, mutagenic, infectious, radioactive, or other hazardous property or because of its effect on the environment, natural resources or human health and safety, including, but not limited to, petroleum and petroleum products,
asbestos-containing materials, polychlorinated biphenyls, lead and lead-based paint, radon, radioactive materials, flammables and explosives; or (c) which is designated, classified, or regulated as being a hazardous or toxic substance, material, pollutant, waste (or a similar such designation) under any federal, state or local law, regulation or ordinance, including under any Environmental Law such as the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §9601 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. §11001 et seq.), the Hazardous Substances Transportation Act (49 U.S.C. §1801 et seq.), or the Clean Air Act (42 U.S.C. §7401
et seq.).

	
             
  	
            22.
 	
            Miscellaneous.
 

(a)           Successors and Assigns.  This Mortgage and all provisions hereof shall be binding upon and enforceable against the Mortgagor and its assigns and other successors.  This Mortgage and all provisions hereof shall inure to the benefit of the Bank, its successors and assigns and any holder or holders, from time to time, of the Note.

(b)           Invalidity of Provisions; Governing Law.  In the event that any provision of this Mortgage is deemed to be invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any administrative agency or any court, the Mortgagor and the Bank shall negotiate an equitable adjustment in the provisions of the same in order to effect, to the maximum extent permitted by law, the purpose of this Mortgage and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby and shall remain in full force and effect.  This Mortgage is to be construed in accordance with and governed by the laws of the State of Ohio.

 

17

       
       

       

(c)           Municipal Requirements.  The Mortgagor shall not by act or omission permit any building or other improvement on premises not subject to the lien of this Mortgage to rely on the Property or any part thereof or any interest therein to fulfill any municipal or governmental requirement, and the Mortgagor hereby assigns to the Bank any and all rights to give consent for all or any portion of the Property or any interest therein to be so used.  Similarly, no building or other improvement on the Property shall rely on any premises not subject to the lien of this Mortgage or any interest therein to fulfill any governmental or municipal requirement.  Any act or omission by the Mortgagor which would result in a violation of any of the
provisions of this subsection shall be void.

(d)           Option of Bank to Subordinate.  At the option of the Bank, this Mortgage shall become subject and subordinate, in whole or in part (but not with respect to priority of entitlement to insurance proceeds or any condemnation or eminent domain award) to any and all leases of all or any part of the Property upon the execution by the Bank of a unilateral declaration to that effect and the recording thereof in the Office of the Register of Deeds in and for the county wherein the Property are situated.

(e)           Mortgagee-in-Possession.  Nothing herein contained shall be construed as constituting the Bank a mortgagee-in-possession in the absence of the actual taking of possession of the Property by the Bank pursuant to this Mortgage.

(f)           Relationship of Bank and Mortgagor.  The Bank shall in no event be construed for any purpose to be a partner, joint venturer, agent or associate of the Mortgagor or of any lessee, operator, concessionaire or licensee of the Mortgagor in the conduct of their respective businesses, and, without limiting the foregoing, the Bank shall not be deemed to be such partner, joint venturer, agent or associate on account of the Bank becoming a mortgagee-in-possession or exercising any rights pursuant to this Mortgage, any of the other Loan Documents, or otherwise.  The relationship of the Mortgagor and the Bank hereunder is solely that of debtor/creditor.

(g)           Time of the Essence.  Time is of the essence of the payment by the Mortgagor of all amounts due and owing to the Bank under the Loan Documents and the performance and observance by the Mortgagor of all terms, conditions, obligations and agreements contained in this Mortgage and the other Loan Documents.

(h)           No Merger.  The parties hereto intend that the Mortgage and the lien hereof shall not merge in fee simple title to the Property, and if the Bank acquires any additional or other interest in or to the Property or the ownership thereof, then, unless a contrary intent is manifested by the Bank as evidenced by an express statement to that effect in an appropriate document duly recorded, this Mortgage and the lien hereof shall not merge in the fee simple title and this Mortgage may be foreclosed as if owned by a stranger to the fee simple title.

(i)            CONSENT TO JURISDICTION.  TO INDUCE THE BANK TO EXTEND THE OBLIGATIONS, THE MORTGAGOR IRREVOCABLY AGREES THAT, SUBJECT TO THE BANK’S SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF OR RELATED TO THE OBLIGATIONS AND THIS MORTGAGE, OTHER THAN FORECLOSURE, WILL BE LITIGATED IN COURTS HAVING SITUS IN OAKLAND COUNTY, MICHIGAN.  THE MORTGAGOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY COURT LOCATED WITHIN OAKLAND COUNTY, MICHIGAN, WAIVES PERSONAL SERVICE OF PROCESS UPON THE MORTGAGOR, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL 

 

18

DIRECTED TO THE MORTGAGOR AT THE ADDRESS STATED HEREIN AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.

(j)           WAIVER OF JURY TRIAL.  THE MORTGAGOR AND THE BANK (BY ACCEPTANCE HEREOF), HAVING BEEN REPRESENTED BY COUNSEL EACH KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (A) UNDER THIS MORTGAGE OR ANY RELATED AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS MORTGAGE OR (B) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS MORTGAGE, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THE MORTGAGOR
AGREES THAT IT WILL NOT ASSERT ANY CLAIM AGAINST THE BANK OR ANY OTHER PERSON INDEMNIFIED UNDER THIS MORTGAGE ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.

(k)           Complete Agreement.  This Mortgage and the other Loan Documents constitute the complete agreement between the parties with respect to the subject matter hereof and the Loan Documents may not be modified, altered or amended except by an agreement in writing signed by both the Mortgagor and the Bank.

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Mortgagor has executed and delivered this Mortgage as of the day and year first above written. 

 

	
             
 	
             
 	
            MORTGAGOR:

 

APPLE ORCHARD, L.L.C., a Michigan limited liability company

 

By:          Sun Communities Operating Limited Partnership, a Michigan limited partnership

Its:          Sole Member

 

By:          Sun Communities, Inc., a Maryland corporation

Its:          General Partner

 

By:      ______________________________

Name: ______________________________

Title:   ______________________________

 
 

 

Notary Acknowledgement

 

The foregoing instrument was acknowledged before me in ___________________ County, Michigan, on _______________________, by __________________, ____________________of Sun Communities, Inc., a Maryland corporation, which is the general partner of Sun Communities Operating Limited Partnership, a Michigan limited partnership, which is the sole member of APPLE ORCHARD, L.L.C., a Michigan limited liability company, on behalf of the company.

 

Notary's Signature:______________________________

	
             
 	
            Notary's Name:
 

Notary Public, State of Michigan, County of _________

My commission expires:__________________________

Acting in the County of:__________________________

 

	
            DRAFTED BY:
 	
            WHEN RECORDED RETURN TO:
 

 

	
            Daniel C. Watson, Esq.
 	
            LaSalle Bank Midwest N.A.
 

	
            Dykema Gossett PLLC
 	
            c/o LaSalle Bank N.A.
 

	
            400 Renaissance Center
 	
            Attn:  Rita Gomez  MC74-00
 

	
            Detroit, Michigan 48243
 	
            4747 W. Irving Road
 

	
             
 	
            Chicago, Illinois 60641
 

 

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EXHIBIT A

LEGAL DESCRIPTION OF REAL ESTATE

 

Land situated in the County of Clermont, Township of Miami, State of Ohio, is described as follows:

Parcel 1

Situated in the State of Ohio, Clermont County, Miami Township and in Dix’s Military Survey No. 992 of the Virginia Military District and being more particularly described as follows: Beginning at a point in State Route No. 28, said point is North 13 degrees 20 minutes 32 seconds West 29.71 feet from a 1 inch iron pipe at the Northwest corner of lot No. 42 of the Village of Mulberry as platted and recorded in Plat Cabinet 5, page 148 of the Clermont County, Ohio Deed Records; thence with the line of said lot No. 42 and Tailwind Properties, Inc., South 13 degrees 20 minutes 32 second East 265.47 feet to a 1/2 inch iron pin; thence, with the line of H. Wayne Klekamp, Inc. and fenced line of Bertie Trester, South 06 degrees 36 minutes 08 seconds West 888.99 feet to a 5/8 inch iron pin; thence, with the North line of By-Pass StateRoute 28, South 71 degrees 27 minutes 11 seconds West 452.65 feet to a 5/8
inch iron pin; thence, continuing with said North line of said By-Pass State Route No. 28, South 67 degrees 31 minutes 49 seconds West, 434.44 feet to a 5/8 inch iron pin; thence with the fenced line of B & R Partnership, North 13 degrees 49 minutes 16 seconds East 609.49 feet to a 3/4 inch iron pin; thence, with the fenced line of Paul and Janet Bilton, North 81 degrees 00 minutes 48 seconds East 180.74 feet to a 3/4 inch iron pin; thence, with the fenced line of Mulberry Wesleyan Church, Inc., North 54 degrees 54 minutes 10 seconds East 359.78 feet to a 1 inch pipe; thence continuing with said fenced line of Mulberry Wesleyan Church, Inc. North 66 degrees 31 minutes 42 seconds East 151.50 feet to a 3/8 inch iron pin, thence, continuing with said fenced line of Mulberry Wesleyan Church, Inc., North 18 degrees 31 minutes 24 seconds West 58.02 feet to a 1 inch pipe, thence, with said line of Mulberry Wesleyan Church, Inc., and Harry Kapourales, North 75 degrees 09 minutes 36
seconds East, 170.08 feet to a 1/2 inch iron pin; thence, continuing with said line of said Harry Kapourales and passing a 5/8 inch iron pin at 232.09 feet, North 13 degrees 17 minutes 13 seconds West 262.09 feet to State Route No. 28; thence with said State Route No. 28, North 77 degrees 12 minutes 47 seconds East 94.23 feet to the beginning, The bearings in the above description are based on the East line of B & R Partnership’s property as recorded in Official Record Book 561, page 668 in the recorders office of said county.

The above description is taken from and in accordance with a survey and plat dated August 10, 1998 by Robert Joseph Shannon, Ohio Reg. No. 7835

Parcel 2

Situated in the State of Ohio, Clermont County, Miami Township and in Dix’s Military Survey No. 992 of the Virginia Military District and being more particularly described as follows: Commencing at a point in State Route No. 28, said point is North 13 degrees 20 minutes 32 seconds West, 29.71 feet from a 1 inch iron pipe at the Northwest corner of Lot No. 42 of the Village of Mulberry as platted and recorded in Plat Cabinet 5, page 148 of the Clermont County, Ohio Deed Records; thence with the line of said Lot No. 42 and Tailwind Properties, Inc., South 13 degrees 20 minutes 32 seconds East 265.47 feet to a 1/2 iron pin; thence, with the line of H. Wayne Klekamp, Inc., fenced line of Bertie Trester and crossing the State Route No. 28 by-pass, South 06 degrees 36 minutes 08 seconds West 1120.97 feet to a 5/8 inch iron pin and the beginning; thence, with the fenced line of Rosa Trester and West line of
Lakeside Park Subdivision, South 06 degrees 36 minutes 08 seconds West 656.69 feet to a 1/2 inch iron pin; thence with the line of Jerome L. Decker North 72 degrees 10 minutes 36 seconds West, 196.61 feet to a 5/8 inch iron pin; thence continuing with said line of Jerome L. Decker, South 37 degrees 05 minutes 47 seconds West 349.43 feet to a 1/2 inch iron pin; thence with the line of Betty Swafford and fenced line of Donald Gordon, North 73 degrees 48 minutes 40 seconds West 591.53 feet to a 1/2 inch iron pin; thence, 

 

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continuing with said fenced line of Donald Gordon and fenced line of Elsie Walker, North 35 degrees 18 minutes 04 seconds East 357.85 feet to a 5/8 inch iron pin; thence, continuing with said fenced line of Elsie Walker, North 72 degrees 19 minutes 17 seconds West, 50.08 feet to a 1/2 inch iron pin; thence with the fenced line of the Board of County Commissioners, North 13 degrees 49 minutes 16 seconds East 163.75 feet to a 5/8 inch iron pin; thence with the South line of By-Pass State Route No. 28, North 71 degrees 27 minutes 11 seconds East 583.81 feet to a 5/8 inch iron pin; thence, continuing with said South line of By-Pass State Route No. 28, South 13 degrees 21 minutes 01 seconds East 41.17 feet to a 5/8 inch iron pin; thence, still continuing with the south line of By-Pass State Route No. 28, North 71 degrees 27 minutes 11 seconds East 295.68 feet to the beginning. 

The bearings in the above description are based on the East line of B & R Partnership’s property as recorded in Official Record Book 561, page 668 in the recorders office of said county 

The above description is taken from and in accordance with a survey and plat dated August 10, 1998 by Robert Joseph Shannon, Ohio Reg. No. 7835.

Parcel 3

Situated in Pierson’s Military Survey No. 928 and Jones’ Military Survey No. 934, Monroe Township, Clermont County, Ohio and being more particularly described as follows: Beginning at an iron pin set at the southwest corner of Lot No. 7 of East Fork Commercial Park as recorded in Plat Cabinet 4, page 222 of the Clermont County, Ohio Subdivision Plat Records; thence with the South line of said Lot No. 7 and partially with the South line of Lot No. 8, as generally marked by a fence, South 85 degrees 34 minutes 15 seconds East for a distance of 449.88 feet to an iron pin set corner to lands of Edgar Lawson; thence with the lines of said Lawson the following three courses and distances, (1) South 12 degrees 58 minutes 13 seconds West for a distance of 579.29 feet to an ion pin set; (2) North 86 degrees 11 minutes 40 seconds West for a distance of 462.91 feet to an iron pin set; (3) South 06 degrees 51
minutes 00 seconds West for a distance of 507.16 feet to an existing iron pin corner of lands of the Clermont Christian Assembly, Inc., thence with the north line of The Clermont Christian Assembly, Inc. North 84 degrees 13 minutes 43 seconds West for a distance of 1597.30 feet to an existing iron pin corner to lands of Martha and Karen Simpson; thence with the East line of said Simpson and the East line of Elmer and Marjorie Parker North 15 degrees 29 minutes 12 seconds East for a distance of 449.46 feet to an existing spike in the centerline of Back Run Road; thence leaving said road with the South line of lands of Steven and Karen Seipelt South 84 degrees 44 minutes 18 seconds East (passing an iron pin set at 25.00 feet) for a total distance of 637.57 feet to an existing iron pipe corner to said Seipelt; thence with the Easterly lines of said Seipelt and the Easterly line of Jessie and Judith Cowans the following two courses and distances (1) North 06 degrees 42 minutes 55 seconds
West for a distance of 26.05 feet to an existing iron pipe at an angle point in Seipelt’s Easterly line (2) North 30 degrees 41 minutes 42 seconds East for a distance of 661.30 feet to an existing iron pipe corner to said Cowans; thence with the North line of Cowans North 84 degrees 35 minutes 35 seconds West for a distance of 594.03 feet to an existing iron pipe corner to lands of Mamie Kemper; thence with the East line of said Kemper and partially with the East line of Lands of Terry and Beverly Hoskins North 12 degrees 11 minutes 18 seconds East for a distance of 891.21 feet to an iron pin set corner to lands of the Bethel Jehovah’s Witnesses; thence with the lines of the Bethel Jehovah’s Witnesses the following three (3) courses and distances, (1) South 86 degrees 24 minutes 00 seconds East for a distance of 236.94 feet to an iron pin set; (2) North 03 degrees 36 minutes 00 seconds East for a distance of 66.00 feet to an iron pin set; (3) South 86 degrees 24 minutes
00 seconds East for a distance of 33.00 feet to an iron pin set corner to lands of Dale and Irene DeWeese; thence with the Southerly line of said DeWeese South 61 degrees 24 minutes 00 seconds East for a distance of 161.15 feet to an existing iron pin corner of lands of Clermont Metropolitan Housing Authority; thence with the lines of said Clermont Metropolitan Housing Authority the following six (6) courses and distances, (1) South 35 degrees 56 minutes 13 seconds East for a distance of 183.96 feet to an iron pin set; (2) South 61 degrees 48 minutes 54 seconds East for a distance of 157.41 feet to a wood post; (3) North 77 degrees 59 minutes 07 seconds East for a distance of 131.22 feet to an iron pin set; (4) North 08 degrees 28 minutes 

 

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57 seconds East for a distance of 82.52 feet to an iron pin set; (5) South 83 degrees 59 minutes 06 seconds East for a distance of 91.94 feet to an iron pin set; (6) North 08 degrees 40 minutes 57 seconds East (passing an iron pin set 530.64 feet) for a total distance of 593.32 feet to a point in the centerline of State Route No. 125; thence with said centerline South 78 degrees 37 minutes 16 seconds East for a distance of 292.37 feet to a point; thence leaving said road with the West line of Lot No. 7 of East Fork Commercial Park the following two (2) courses and distances, (1) South 07 degrees 42 minutes 03 seconds West for a distance of 693.99 feet to a 36’ ash tree; South 05 degrees 56 minutes 01 seconds West for a distance of 677.35 feet to the place of beginning.

EXCEPTING Therefrom the following described parcels:

Situated in Jones’ Military Survey No. 934, Monroe Township, Clermont County, Ohio and being more particularly described as follows:

Commencing at an iron pin located at the Southwest corner of Lot No. 7 of East Fork Commercial Park as recorded in Plat Cabinet 4, page 222 of the Clermont County, Ohio Subdivision Plat Records; thence with the South line of said Lot No. 7 and partially with South line of Lot No. 8 as generally marked by a fence, South 85 degrees 34 minutes 15 seconds East 449.88 feet to the corner of lands of Edgar Lawson; thence with the lines of said Lawson the following three (3) courses: South 12 degrees 58 minutes 13 seconds West 579.29 feet, North 86 degrees 11 minutes 40 seconds West 462.91 feet to an iron pin found, South 06 degrees 51 minutes 00 seconds West for a distance of 507.16 feet to an existing iron pin corner to lands of The Clermont Christian Assembly, Inc., as recorded in Deed Book 532, page 374, Clermont County Recorder’s Office; thence with the North line of said Clermont Christian Assembly,
Inc., North 84 degrees 13 minutes 43 seconds West 1330.81 feet to a 5/8" diameter iron pin set at the Point of Beginning of this described real estate; thence from said point of beginning continuing North 84 degrees 13 minutes 43 seconds West 266.49 feet to an existing iron pin corner to lands of Karen L. Simpson, as recorded in Official Record 794, page 877, Clermont County Recorder’s Office; thence with the East line of said Simpson and the East line of Elmer Parker, Jr., as recorded in Official Record 1084, page 248 of the Clermont County Recorder’s Office, North 15 degrees 29 minutes 12 seconds East for a distance of 449.46 feet to an existing spike located in the centerline of Back Run Road; thence leaving said road with the South line of lands of Roy L. and Brenda D. Lindsey as recorded in Official Record 1342, page 800, Clermont County Recorder’s Office, South 84 degrees 44 minutes 18 seconds East, passing an existing iron pin at 25.00 feet for a total distance
of 177.74 feet to a set 5/8" diameter iron pin; thence leaving said line of Lindsey, through grantor’s property along a new severance line the following four (4) courses: South 03 degrees 29 minutes 54 seconds West 39.63 feet to a set 5/8" diameter iron pin, North 86 degrees 30 minutes 06 seconds West 12.74 feet to a set 5/8" diameter iron pin, South 64 degrees 19 minutes 28 seconds West 50.00 feet to a set 5/8" diameter iron pin, and South 04 degrees 13 minutes 43 seconds East 384.25 feet to the point of beginning.

Right to access and construct utilities including sanitary sewer, public water, electric, gas cable and telephone located or to be located along Back Run Road through and above described tract, and to retain rights for drainage easements and storm piping through the above tract.

ALSO EXCEPTING

Situated in the State of Ohio, County of Clermont, Township of Monroe, Virginia Military District, situated in Jones M.S. No. 934 and being more particularly described as follows:

Beginning for reference at the intersection of the existing centerline of S.R. 125 with the Easterly line of Jones M.S. No. 934, said point being centerline of survey Station 491+57.52; thence North 75 degrees 49 minutes 28 seconds East 21.76 feet to a point at 9.72 feet left of centerline Station 491+76.98 and being the True Point of Beginning; thence South 09 degrees 04 minutes 08 seconds West 91.68 feet along the Grantor’s Easterly line to an iron pin set at 81.75 feet right of centerline Station 491+82.25 (passing an iron pin found at 90.79 feet); thence North 88 degrees 17 minutes 47 seconds West 17.54 feet along the 

 

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existing Southerly Right-of Way line to an iron pin set 85.00 feet right of centerline Station 491+65.00; thence North 68 degrees 29 minutes 02 seconds West, 157. 14 feet along the existing Southerly Right-of-Way line to an iron pin set 60.00 feet right of centerline Station 490+09.88; thence North 72 degrees 43 minutes 43 seconds West 123.24 feet along the existing Southerly Right of Way line to an iron pin found 54.22 feet right of centerline Station 488+91.18; thence North 10 degrees 03 minutes 08 seconds East 59.98 feet along the Grantor’s Westerly line to a point 5.32 feet left of centerline Station 488+84.09; thence South 77 degrees 29 minutes 25 seconds East 292.34 feet along the Grantor’s Northerly line to the True Point of Beginning.

This description is based on a survey made under the direction and supervision of Steven W. Newell, Professional Surveyor Number 7212 in May, 2001

 

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EXHIBIT B

PERMITTED EXCEPTIONS

 

1.            General real estate taxes for the year 2008 and each year thereafter not yet due and payable.

2.            Exception Nos. 8 through 21, inclusive, contained on Orchard Lake Schedule B, Section 2 and exception Nos. 8 through 20, inclusive, contained on Apple Creek Schedule B, Section 2 of LandAmerica Lawyers Title Insurance Corporation Commitment No. 11307377/08001394, dated May 20, 2008.

 

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