Document:

ex48.htm

    Exhibit
4.8

     

    THIRD
PARTY

    OPEN-END
MORTGAGE, SECURITY AGREEMENT

    AND
ASSIGNMENT OF RENTS, PROFITS, INCOME AND LEASES

    IN
THE MAXIMUM AMOUNT OF

    $3,250,000.00

     

    KNOW ALL
MEN BY THESE PRESENTS:

     

    WHEREAS,
the undersigned LEE’S FOOD
MART’S, LLC, a Tennessee limited liability company (“Mortgagor”) is the
fee owner of the real property described on Exhibit A attached
hereto and incorporated herein by reference;

     

    WHEREAS,
HEARTLAND, INC., a
Nevada corporation, whose address is 1005 North 19th Street, Middlesboro,
Kentucky 40965 (hereinafter referred to as “Borrower”) has executed and
delivered to CHOICE FINANCIAL
GROUP, a North Dakota state bank, whose address for purposes hereof is
1697 South 42nd Street,
Grand Forks, North Dakota 58201 (hereinafter referred to as “Mortgagee” or
“Lender”) that certain Promissory Note of even date herewith in the original
principal sum of Three Million Two Hundred Fifty Thousand and 00/100 Dollars
($3,250,000.00) (the “Note”), payable in accordance with the terms of said Note;
the entire unpaid balance of principal and interest being due and payable on or
before, _________________________________________________________

    ___________________________________________________________________________________________
2011, or
such earlier date as is set forth in the Note. The indebtedness evidenced by the
Note and/or secured hereby is herein called the “Loan.” The Note, this Third
Party Open-End Mortgage, Security Agreement and Assignment of Rents, Profits,
Income and Leases (this “Mortgage”), any and all guarantees executed in
connection with the Note and/or the obligations evidenced thereby, a certain
Loan Agreement bearing even date herewith executed by Mortgagor and Mortgagee
(the “Loan Agreement”) and any and all other agreements, certificates,
affidavits and documents now or hereafter executed in connection with the Note
and/or the obligations evidenced thereby are collectively hereinafter referred
to as the “Loan Documents”; and

     

    WHEREAS,
this Mortgage is given to secure to Mortgagee (a) the repayment of the
indebtedness evidenced by the Note, with interest thereon, and all renewals,
extensions and modifications thereof and any late charges imposed upon
Mortgagor; (b) the repayment of future advances disbursed by Mortgagee to
Mortgagor in excess of the principal of the indebtedness; (c) the payment of all
other sums, with interest thereon, advanced in accordance with the terms of this
Mortgage or any other Loan Document; (d) the performance of all obligations,
covenants and agreements herein contained and/or contained in the Loan
Documents, in accordance with the terms thereof; and (e) the payment and/or
performance of any and all other obligations of Mortgagor to Mortgagee whether
now existing or hereafter arising.

     

    ARTICLE
I

     

    GRANTING
CLAUSE

     

    For good
and valuable consideration to it paid by Mortgagee, the receipt and sufficiency
of which are hereby acknowledged, Mortgagor does hereby MORTGAGE, GRANT,
BARGAIN, SELL, TRANSFER, ASSIGN AND CONVEY unto Mortgagee, its successors and
assigns, that certain
real estate situated in the County
of ______________________________ and
State of Kentucky, and more

    particularly
described on Exhibit
A, attached hereto and made a part hereof.

     

     

     

    
      
        
        

      

      
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    TOGETHER
WITH all and singular the tenements, hereditaments and appurtenances thereto
belonging, all present and future buildings, structures, annexations, access
rights, rights of way or use, servitudes, licenses, and improvements thereon,
all of the rights, privileges, licenses, easements and appurtenances belonging
to such real estate, together with all of Mortgagor’s estate and right, if any,
in and to lands lying in streets, alleys and roads adjoining the said real
estate and all of Mortgagor’s right, title, interest, estate, claim and demand,
either at law or in equity, in and to all chattels, fixtures, building
materials, machinery, inventory, apparatus, equipment, articles and/or other
personal property now or hereafter located on or used or useable in connection
with said real estate or any business conducted thereon, whether or not the same
have or would have become a part of said real estate by attachment thereto,
including, without limiting the generality of the foregoing, all lighting,
heating, cooling, ventilating, air-conditioning, power, incinerating,
sprinkling, gas, plumbing, waste removal and refrigeration systems, engines,
furnaces, boilers, pumps, tanks, heaters, generators, motors, maintenance
equipment, fire prevention apparatus, dryers and laundry equipment, office
equipment; and all pipes, wires, fixtures and apparatus forming a part of or
used in connection therewith; elevators and motors; refrigeration plants or
units; kitchen equipment; cooking appliances; cabinets; partitions; doors;
windows; furniture; furnishings; living and artificial plants and planters;
televisions; beds; dressers; radios; lamps; switchboards; telephones; telephone
systems and equipment; computers; computer equipment and software; cabinets;
signage; storm windows and doors; window and door screens; awnings and window
and door shades; all drapes and curtains and related hardware and mounting
devices; wall-to-wall carpeting; tables; chairs; pots, pans, plates, dishes,
silver and flatware; linens; vending machines; all equipment, machinery,
furnishings, fixtures and inventory situated upon or in the real estate and/or
used or usable in the operation thereof as well as all additions, improvements,
substitutions and replacements thereto, and proceeds thereof; with respect to
any personal property which is subject to a conditional bill of sale, lease,
security agreement, mortgage or other lien covering such property, all the
right, title and interest of the Mortgagor in and to any and all such personal
property and any and all such conditional bills of sale and/or leases, together
with the benefits of any deposits or payments now or hereafter made by the
Mortgagor, or the predecessors or successors in title to the Mortgagor; all of
the records and books of account now or hereafter maintained by Mortgagor in
connection with the real estate and/or the construction, development, operation
and/or management thereof and/or in connection with the operation of Mortgagor’s
business; all names as may be used in connection with the real estate and
goodwill associated therewith; all rents, issues, profits and other incomes
whether now existing or hereafter acquired; all proceeds or sums payable in lieu
of or as compensation for the loss of or damage to any property covered hereby,
or to the real estate upon which the said property covered hereby is or may be
located including without limitation all buildings and improvements now or
hereafter located thereon, and all rights in and to all present and future fire,
hazard, builder’s risk, business interruption, rental interruption, flood and
other insurance policies required to be maintained by Mortgagor; all awards made
by any public body or decreed by any court of competent jurisdiction for the
taking or for degradation of value in any eminent domain proceedings, or
purchase in lieu thereof; all of Mortgagor’s interest and rights as lessor in
and to all leases now or hereafter affecting the said real estate or any part
thereof; all contract rights relating
to the purchase and maintenance of any equipment and/or construction of any
improvements (including, without limitation, any contracts with architects,
engineers and/or contractors); all accounts and general intangibles now owned or
existing or hereafter created or acquired; all plans, specifications, drawings,
studies, surveys, appraisals and other similar work product related to the real
estate; all agreements for the provision of property or services to or in
connection with, or otherwise benefiting, the real estate, including, without
limitation, all management agreements, license agreements, franchise agreements
and cable television agreements; to the extent permitted by applicable law, all
rights in and to any building, zoning, environmental and other permits,
licenses, approvals, variances and consents which have been issued or are
hereafter issued by any governmental entity and/or utility company in connection
with or related to the real estate; and all bonds securing to Mortgagor the
payment or performance of any obligation concerning the construction,
maintenance, repair and/or use of the real estate; and all proceeds, products,
offspring, rents and profits from any of the foregoing; all of which, together
with said real estate, buildings and improvements, tenements, hereditaments and
appurtenances and all proceeds, products, offspring, rents and profits from any
of the foregoing, are hereinafter referred to as the “Property” or the
“premises.”

     

    TO HAVE
AND TO HOLD the foregoing property (the “Property”) unto the Mortgagee, its
successors and assigns, forever, for the uses and purposes hereinafter set
forth.

     

     

    
      
        
        

      

      
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    ARTICLE
II

     

    ASSIGNMENT
OF RENTS, PROFITS, INCOME AND LEASES

     

    2.1 Assignment. Mortgagor
hereby absolutely and unconditionally assigns and transfers to Lender the
following and all proceeds, profits and offspring therefrom (collectively, the
“Assigned Interest”):

     

    
      	
              (i)  

            	
              All
      of the right, title and interest which the Mortgagor now has or hereafter
      may acquire in all leases and/or subleases now existing or hereafter made
      (the “Leases”) of all or any part of the Property, as such Leases are now
      or may hereafter be modified or
extended;

            

    

     

    
      	
              (ii)  

            	
              All
      rents, income, profits and deposits due or to become due under the Leases
      (including all proceeds under any options contained in the Leases) and all
      covenants contained in the Leases relating to the collection and
      enforcement of collection of such rents, income, profits and/or
      deposits;

            

    

     

    
      	
              (iii)  

            	
              All
      guarantees of the obligations of the lessees under any of the Leases (the
      “Lessees”); and

            

    

     

    
      	
              (iv)  

            	
              All
      other rents, issues and profits arising out of and/or related to the
      Property.

            

    

     

    2.2 Affirmative Covenants and
Representations. Mortgagor will (i) observe and perform all covenants and
conditions to be observed or performed by Mortgagor under the Leases; (ii) at
the sole cost and expense of Mortgagor, enforce, short of termination of any
Lease, the observance and performance of every covenant and condition of the
Leases to be observed

    and
performed by the Lessees and enforce all guarantees given in connection with any
of the Leases; and (iii) appear in, settle and defend any legal action growing
out of, or in any manner connected with, the Leases or the obligations or
liabilities of Mortgagor as lessor thereunder, or of any of the Lessees or
guarantors. MORTGAGOR WARRANTS THAT: NO LABOR OR WORK HAS BEEN PERFORMED AS TO
THE PROPERTY WHICH HAS NOT BEEN PAID IN FULL, NO MATERIALS HAVE BEEN FURNISHED
AS TO THE PROPERTY WHICH HAVE NOT BEEN PAID IN FULL, NO LABOR OR WORK WILL BE
PERFORMED AS TO THE PROPERTY PRIOR TO THE FILING OF RECORD OF THIS MORTGAGE AND
NO MATERIALS WILL BE FURNISHED AS TO THE PROPERTY PRIOR TO THE FILING FOR RECORD
OF THIS MORTGAGE. Mortgagor warrants that there are no Leases or other
agreements in existence which grant any right of occupancy with respect to any
portion of the Property. Mortgagor warrants that: its sole executive (principal)
place of business is located as follows: 1005 North 19th Street,
Middlesboro, Kentucky 40965; it shall not change (or attempt to change) its
executive (principal) office or add another place of business without
Mortgagee’s prior written approval; its legal name is a first above written; and
it shall not change (or attempt to change) said name without Mortgagee’s prior
written approval.

     

    ARTICLE
III

     

    EVENTS OF
DEFAULT

     

    As used
herein, the term “Event of Default” shall have the meaning assigned thereto in
the Loan Agreement and the Note.

     

    ARTICLE
IV

     

    SECURITY
AGREEMENT

     

    4.1 Uniform
Commercial Code. In addition to being a mortgage, this Mortgage is
intended to be a security agreement pursuant to the Uniform Commercial Code for
any of the items specified herein as part of the “Property” and for any of the
items listed on Exhibit B,
attached hereto and incorporated by reference herein, which under
applicable law may be subject to a security interest pursuant to the Uniform
Commercial Code, and Mortgagor hereby grants Mortgagee a security interest in
said items, and all substitutions, replacements, replacement parts, additions,
repairs, repair parts, accessions and accessories incorporated therein or
affixed thereto in which Mortgagor acquires an interest, and the proceeds
thereof (sometimes referred to herein collectively as the “Collateral”). The
“Collateral” shall be included in the “Property.” Mortgagor agrees that
Mortgagee may file this Mortgage, or a reproduction thereof, in the real estate
records or other appropriate index, as a financing statement for any of the
items specified above as part of the Property. Any reproduction of this Mortgage
or of any other security agreement or financing statement shall be sufficient as
a financing statement. In addition, Mortgagor hereby irrevocably authorizes
Mortgagee to file any financing statements, as well as extensions, renewals and
amendments thereof, and reproductions of this Mortgage in such form as Mortgagee
determines in its sole discretion, to perfect or protect the security interest
hereby created with respect to the Collateral, or to more fully describe the
Collateral. Mortgagor shall pay all costs of and expenses (including reasonable
expenses of counsel and filing fees) relative to the preparation and filing of
any financing statements and any extensions, renewals, amendments and releases
thereof, and shall pay all reasonable costs and expenses of any record searches
for financing statements Mortgagee may reasonably require.

     

     

    
      
        
        

      

      
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    Signed
and acknowledged

    in the
presence of: LEE’S FOOD MART’S, LLC

    
      
        	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 	 
	 	 	Its	 
	 	 	 	 
	 	 	 	 

      

    

     

    

       

      
        	STATE
    OF 	 	)	 
	 	 	) ss	 
	COUNTY OF	 	)	 

      

       

    

                                                                                                            

    BE IT
REMEMBERED, that on the ____ day of, 2008, the foregoing instrument
was acknowledged before me, a Notary Public in and for said County and State,
by  ____________________,
the

    ____________________________ 
of Lee’s Food Mart’s, LLC, a Tennessee
limited liability company, on behalf of said company.

     

    IN
TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my notarial
seal on the day and year last aforesaid.

    
    

     

    
      	 	Notary
    Public	 	 
	 	My Commission
      Expires:	 	 
	 	 	 	 

    

     

     

     

                                                                              

     

    This
instrument prepared by:

    Winthrop
& Weinstine, P.A.

    225 South
Sixth Street, Suite 3500 Minneapolis, Minnesota 55402

     

     

    
      
        
        

      

      
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    EXHIBIT
A

    LEGAL
DESCRIPTION

     

     

     

     

     

    
      
        
        

      

      
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    EXHIBIT
B

    DESCRIPTION
OF COLLATERAL

     

    ALL OF
MORTGAGOR’S RIGHT, TITLE, INTEREST, ESTATE, CLAIM AND DEMAND, EITHER AT LAW OR
IN EQUITY, NOW OR HEREAFTER, IN AND TO:

     

    (A) ALL
LEASES AND/OR SUBLEASES NOW EXISTING OR HEREAFTER MADE (THE “LEASES”) OF ALL OR
ANY PART OF THE PROPERTY DESCRIBED IN EXHIBIT A ATTACHED TO THIS MORTGAGE AND
INCORPORATED BY REFERENCE HEREIN, AND ANY BUILDINGS, STRUCTURES OR IMPROVEMENTS
NOW OR HEREAFTER LOCATED THEREON (THE “PROPERTY”), AS SUCH LEASES ARE NOW OR MAY
HEREAFTER BE MODIFIED OR EXTENDED;

     

    (B) ALL
RENTS, INCOME AND PROFITS DUE OR TO BECOME DUE UNDER THE LEASES (INCLUDING ALL
PROCEEDS UNDER ANY OPTIONS CONTAINED IN THE LEASES) AND ALL COVENANTS CONTAINED
IN THE LEASES RELATING TO THE COLLECTION AND ENFORCEMENT OF COLLECTION OF SUCH
RENTS, INCOME OR PROFITS;

     

    (C) ALL
GUARANTEES OF THE OBLIGATIONS OF THE LESSEES UNDER ANY OF THE
LEASES;

     

    (D) ANY AND
ALL SECURITY DEPOSITS OR OTHER SECURITY WITH RESPECT TO THE PROPERTY OR ANY
PORTION THEREOF;

     

    (E) ALL
CHATTELS, FIXTURES, BUILDING MATERIALS, MACHINERY, INVENTORY, APPARATUS,
EQUIPMENT, ARTICLES AND/OR OTHER PERSONAL PROPERTY NOW OR HEREAFTER LOCATED ON
OR USED OR USABLE IN CONNECTION WITH THE PROPERTY OR ANY BUSINESS CONDUCTED
THEREON, WHETHER OR NOT THE SAME HAVE OR WOULD BECOME A PART OF THE PROPERTY BY
ATTACHMENT THERETO, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
ALL LIGHTING, HEATING, COOLING, VENTILATING, AIR CONDITIONING, POWER,
INCINERATING, SPRINKLING, GAS, PLUMBING, WASTE REMOVAL AND REFRIGERATION
SYSTEMS, ENGINES, FURNACES, BOILERS, PUMPS, TANKS, HEATERS, GENERATORS, MOTORS,
MAINTENANCE EQUIPMENT, FIRE PREVENTION APPARATUS, DRYERS AND LAUNDRY EQUIPMENT,
OFFICE EQUIPMENT; AND ALL PIPES, WIRES, FIXTURES AND APPARATUS FORMING A PART OF
OR USED IN CONNECTION THEREWITH; ELEVATORS AND MOTORS; REFRIGERATION PLANTS OR
UNITS; KITCHEN EQUIPMENT; COOKING APPLIANCES; CABINETS; PARTITIONS; DOORS;
WINDOWS; FURNITURE; FURNISHINGS; LIVING AND ARTIFICIAL PLANTS AND PLANTERS;
TELEVISIONS; TELEVISION SYSTEMS; ANTENNA AND/OR SATELLITE DISH SYSTEMS; BEDS;
DRESSERS; RADIOS; LAMPS; SWITCHBOARDS; TELEPHONES; TELEPHONE SYSTEMS AND
EQUIPMENT; COMPUTERS, COMPUTER EQUIPMENT AND SOFTWARE; CABINETS; SIGNAGE; STORM
WINDOWS AND DOORS; WINDOW AND DOOR SCREENS; AWNINGS AND WINDOW AND DOOR SHADES;
ALL DRAPES

     

     

     

    
      
        
        

      

      
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    AND
CURTAINS AND RELATED HARDWARE AND MOUNTING DEVICES; WALL-TO-WALL CARPETING;
TABLES; CHAIRS; POTS, PANS, PLATES, DISHES, SILVER AND FLATWARE; LINENS; VENDING
MACHINES; ALL EQUIPMENT, MACHINERY, FURNISHINGS, FIXTURES AND INVENTORY SITUATED
UPON OR IN THE PROPERTY AND USED OR USABLE IN THE OPERATION THEREOF; AS WELL AS
ALL ADDITIONS, IMPROVEMENTS, SUBSTITUTIONS AND REPLACEMENTS THERETO, AND
PROCEEDS THEREOF; WITH RESPECT TO ANY PERSONAL PROPERTY WHICH IS SUBJECT TO A
CONDITIONAL BILL OF SALE, LEASE, SECURITY AGREEMENT, MORTGAGE OR OTHER LIEN
COVERING SUCH PROPERTY, ALL THE RIGHT, TITLE AND INTERESTS OF MORTGAGOR IN AND
TO ANY AND ALL SUCH PERSONAL PROPERTY AND ANY AND ALL SUCH CONDITIONAL BILLS OF
SALE AND/OR LEASES, TOGETHER WITH THE BENEFITS OF ANY DEPOSITS OR PAYMENTS NOW
OR HEREAFTER MADE BY MORTGAGOR, OR THE PREDECESSORS OR SUCCESSORS IN TITLE TO
MORTGAGOR; ALL OF THE RECORDS AND BOOKS OF ACCOUNT NOW OR HEREAFTER MAINTAINED
BY MORTGAGOR IN CONNECTION WITH THE PROPERTY AND/OR THE CONSTRUCTION,
DEVELOPMENT, OPERATION AND/OR MANAGEMENT THEREOF AND/OR IN CONNECTION WITH THE
OPERATION OF MORTGAGOR’S BUSINESS; ALL NAMES AS MAY BE USED IN CONNECTION WITH
THE PROPERTY AND THE GOODWILL ASSOCIATED THEREWITH; ALL RENTS, ISSUES, PROFITS
AND OTHER INCOMES WHETHER NOW EXISTING OR HEREAFTER ACQUIRED; ALL PROCEEDS OR
SUMS PAYABLE IN LIEU OF OR AS COMPENSATION FOR THE LOSS OF OR DAMAGE TO ANY
PROPERTY COVERED HEREBY, OR TO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, ALL
BUILDINGS AND IMPROVEMENTS NOW OR HEREAFTER LOCATED THEREON, AND ALL RIGHTS IN
AND TO ALL PRESENT AND FUTURE FIRE, HAZARD, BUILDER’S RISK, BUSINESS
INTERRUPTION, RENTAL INTERRUPTION, FLOOD AND OTHER INSURANCE POLICIES REQUIRED
TO BE MAINTAINED BY MORTGAGOR; ALL AWARDS MADE BY ANY PUBLIC BODY OR DECREED BY
ANY COURT OF COMPETENT JURISDICTION FOR THE TAKING OR FOR DEGRADATION OF VALUE
IN ANY EMINENT DOMAIN PROCEEDINGS, OR PURCHASE IN LIEU THEREOF; ALL OF
MORTGAGOR’S INTEREST AND RIGHTS AS LESSOR IN AND TO ALL LEASES NOW OR HEREAFTER
AFFECTING THE PROPERTY OR ANY PART THEREOF; ALL CONTRACT RIGHTS RELATING TO THE
PURCHASE, INSTALLATION AND/OR MAINTENANCE OF ANY EQUIPMENT AND/OR CONSTRUCTION
OF ANY IMPROVEMENTS (INCLUDING WITHOUT LIMITATION, ANY CONTRACTS WITH
ARCHITECTS, ENGINEERS AND/OR CONTRACTORS); ALL ACCOUNTS AND GENERAL INTANGIBLES
NOW OWNED OR EXISTING OR HEREAFTER CREATED OR ACQUIRED RELATED TO THE PROPERTY
AND/OR THE OPERATION OF ANY BUSINESS WITH RESPECT THERETO; ALL PLANS,
SPECIFICATIONS, DRAWINGS, STUDIES, SURVEYS, APPRAISALS AND OTHER SIMILAR WORK
PRODUCT RELATED TO THE PROPERTY; ALL AGREEMENTS FOR THE PROVISION OF PROPERTY OR
SERVICES TO OR IN CONNECTION WITH, OR OTHERWISE BENEFITING, THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, ALL MANAGEMENT AGREEMENTS, FRANCHISE AGREEMENTS,
LICENSE AGREEMENTS AND CABLE TELEVISION AGREEMENTS; TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ALL
RIGHTS IN AND TO ANY AND ALL BUILDING, ZONING, ENVIRONMENTAL AND OTHER PERMITS,
LICENSES, APPROVALS, VARIANCES AND CONSENTS WHICH HAVE BEEN ISSUED OR ARE
HEREAFTER ISSUED BY ANY GOVERNMENTAL ENTITY AND/OR UTILITY COMPANY OR PROVIDED
IN CONNECTION WITH OR RELATED TO THE PROPERTY; AND ALL BONDS SECURING TO
MORTGAGOR THE PAYMENT OR PERFORMANCE OF ANY OBLIGATION CONCERNING THE
CONSTRUCTION, MAINTENANCE, REPAIR AND/OR USE OF THE PROPERTY;

     

     

     

    
      
        
        

      

      
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    (F) ALL
DRAWINGS, PLANS, SPECIFICATIONS, SHOP DRAWINGS, RENDERINGS, DATA, STUDIES,
REPORTS, APPRAISALS AND ANALYSIS NOW EXISTING OR HEREAFTER PREPARED BY
MORTGAGOR, ITS AGENTS, CONTRACTORS, ARCHITECTS, ENGINEERS AND/OR EMPLOYEES IN
CONNECTION WITH OR RELATED TO THE PROPERTY; AND

     

    (G) ALL
RIGHTS IN, TO AND UNDER, ALL MONIES DUE AND TO BECOME DUE PURSUANT TO AND ALL
CLAIMS, DEMANDS AND CAUSES OF ACTION THAT MORTGAGOR NOW HAS OR WHICH MAY
HEREAFTER ARISE AGAINST ALL PARTIES UNDER ALL CONTRACTS AND SUBCONTRACTS RELATED
TO OR PROVIDING FOR THE DESIGN AND CONSTRUCTION OF IMPROVEMENTS TO THE PROPERTY
OR THE PROVISION OF LABOR, SERVICES OR MATERIALS THEREFOR, WHETHER NOW EXISTING
OR HEREAFTER EXECUTED, AND ANY SUPPLEMENTS THERETO.

    2. COVENANTS. MORTGAGOR
FURTHER COVENANTS AND AGREES WITH MORTGAGEE AS FOLLOWS:

     

    2.1 PAYMENTS. IF NOT
TIMELY PAID BY BORROWER, TO PAY (WITHOUT CONDITION, RESTRICTION OR SET-OFF AND
IN IMMEDIATELY-AVAILABLE MONEY OF THE UNITED STATES OF AMERICA) THE PRINCIPAL OF
THE NOTE, INTEREST THEREON AND ANY AND ALL LATE CHARGES AND PENALTIES, AND THE
PRINCIPAL OF ALL OTHER NOTES SECURED HEREBY TOGETHER WITH INTEREST THEREON AT
THE TIMES AND IN THE MANNER HEREIN PROVIDED, AND IF NOT TIMELY PAID BY BORROWER,
TO PAY ALL OTHER INDEBTEDNESS HEREBY SECURED AT THE TIMES AND IN THE MANNER
HEREIN PROVIDED, INCLUDING ANY ADVANCES OR EXPENSES OF ANY KIND INCURRED BY
MORTGAGEE PURSUANT TO THE PROVISIONS OF THE NOTE, ANY OTHER NOTES SECURED
HEREBY, THIS MORTGAGE, OR ANY OF THE OTHER LOAN DOCUMENTS.

     

    2.2 CONDITION OF PROPERTY;
COMPLIANCE WITH LAWS; WASTE; USES. TO KEEP THE PROPERTY IN GOOD CONDITION
AND REPAIR AND TO MAKE ALL STRUCTURAL AND NONSTRUCTURAL AND ALL ORDINARY AND
EXTRAORDINARY REPAIRS AND MAINTENANCE AS AND WHEN THE SAME BECOME NECESSARY, AND
TO CAUSE ALL REPAIRS AND MAINTENANCE TO BE DONE IN A GOOD AND WORKMANLIKE
MANNER; TO REPAIR, REPLACE, REBUILD AND RECONSTRUCT ANY AND ALL PORTIONS OF THE
PROPERTY WHICH MAY BE DAMAGED OR DESTROYED BY FIRE, WINDSTORM OR ANY OTHER
CASUALTY; TO REPAIR, REPLACE, REBUILD AND RECONSTRUCT ANY PORTIONS OF THE
PROPERTY WHICH MAY BE LOST, ALTERED, DAMAGED OR DESTROYED AS THE RESULT OF A
“TAKING” (HEREIN DEFINED); TO COMPLY IN ALL RESPECTS WITH ALL PRESENT AND FUTURE
STATUTES, LAWS, ORDINANCES, AND GOVERNMENTAL RULES, REGULATIONS AND ORDERS WHICH
ARE APPLICABLE TO ALL OR ANY PORTION OF THE MORTGAGOR’S BUSINESS OR PROPERTIES;
TO PERFORM OR CAUSE TO BE PERFORMED ANY AND ALL ENVIRONMENTAL STUDIES, AUDITS,
AND TESTS AS MAY BE REQUIRED BY APPLICABLE LAW OR BY MORTGAGEE; NOT TO COMMIT OR
PERMIT WASTE OF THE PROPERTY, OR REMOVE OR PERMIT THE REMOVAL OF ANY BUILDING,
IMPROVEMENT OR FIXTURE FROM THE PROPERTY; NOT TO PERFORM OR PERMIT ANY ACT WHICH
MAY IN ANY WAY IMPAIR THE VALUE OF THE PROPERTY, OR ALLOW CHANGES IN THE USE FOR
WHICH THE PROPERTY WAS INTENDED AT THE TIME THIS MORTGAGE WAS EXECUTED; NOT TO
REMOVE OR DEMOLISH, OR PERMIT OTHERS TO REMOVE OR DEMOLISH, ANY IMPROVEMENTS OR
PORTIONS OF THE PROPERTY OR, SUBJECT TO THE PROVISIONS OF THIS SECTION 2.2,
CAUSE OR PERMIT SUCH IMPROVEMENTS TO BE MATERIALLY ALTERED OR CHANGED WITHOUT
THE PRIOR WRITTEN CONSENT OF MORTGAGEE, AS WELL AS MORTGAGEE’S PRIOR WRITTEN
CONSENT TO THE PLANS AND SPECIFICATIONS RELATING THERETO.

     

     

    
      
        
        

      

      
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    2.3 TAXES, INSURANCE AND OTHER
IMPOSITIONS. TO PAY ALL PERSONAL PROPERTY TAXES, REAL ESTATE TAXES AND
ASSESSMENTS, WATER

    AND SEWER
CHARGES, AND ALL OTHER GOVERNMENTAL CHARGES WHICH MAY ACCRUE, BE LEVIED OR
ASSESSED UPON THE PROPERTY OR ANY PART THEREOF AND WHICH MAY BE OR BECOME A LIEN
UPON THE PROPERTY OR HAVE PRIORITY IN PAYMENT TO THE INDEBTEDNESS HEREBY SECURED
WHEN AND AS THE SAME BECOME DUE, AND BEFORE ANY DELINQUENCY OCCURS OR ANY
PENALTY SO ASSESSED THEREON. UPON REQUEST BY MORTGAGEE, MORTGAGOR SHALL PAY TO
MORTGAGEE ON THE DAY MONTHLY INSTALLMENTS OF PRINCIPAL AND/OR INTEREST ARE
PAYABLE UNDER THE NOTE (OR ON ANOTHER DAY DESIGNED IN WRITING BY MORTGAGEE),
UNTIL THE NOTE IS PAID IN FULL, A SUM (HEREIN “FUNDS”) EQUAL TO ONE-TWELFTH OF
(A) THE YEARLY TAXES AND ASSESSMENTS WHICH MAY BE LEVIED ON THE PROPERTY; (B)
THE YEARLY GROUND RENTS, IF ANY; AND (C) THE YEARLY PREMIUM INSTALLMENTS FOR
FIRE AND OTHER HAZARD INSURANCE, RENT LOSS INSURANCE AND SUCH OTHER INSURANCE AS
MAY BE REQUIRED UNDER THE TERMS OF THIS MORTGAGE, ALL AS REASONABLY ESTIMATED
INITIALLY AND FROM TIME TO TIME BY MORTGAGEE, ON THE BASIS OF ASSESSMENTS AND
BILLS AND REASONABLE ESTIMATES THEREOF. UNLESS OTHERWISE AGREED IN WRITING BY
MORTGAGEE AND MORTGAGOR, MORTGAGEE MAY REQUIRE MORTGAGOR TO PAY TO MORTGAGEE, IN
ADVANCE, SUCH OTHER FUNDS FOR OTHER TAXES, CHARGES, PREMIUMS, ASSESSMENTS AND
IMPOSITIONS IN CONNECTION WITH MORTGAGOR OR THE PROPERTY WHICH MORTGAGEE SHALL
REASONABLY DEEM NECESSARY TO PROTECT MORTGAGEE’S INTERESTS (ALL OF WHICH SHALL
BE REFERRED TO HEREIN AS “OTHER IMPOSITIONS”). UNLESS OTHERWISE PROVIDED BY
APPLICABLE LAW, MORTGAGEE, AT MORTGAGEE’S OPTION, MAY REQUIRE AMOUNTS DUE UNDER
THIS SECTION 2.3 TO BE PAID BY MORTGAGOR IN A LUMP SUM NOT MORE THAN THIRTY (30)
DAYS PRIOR TO THE DATE DUE OR IN PERIODIC INSTALLMENTS.

     

    THE FUNDS
SHALL BE HELD IN AN ACCOUNT WITH MORTGAGEE. TO THE EXTENT THAT FUNDS HAVE BEEN
DEPOSITED BY MORTGAGOR WITH MORTGAGEE FOR THE EXPRESS PURPOSE OF PAYMENT OF
WATER AND SEWER RATES, TAXES, ASSESSMENTS, GROUND RENTS, INSURANCE PREMIUMS OR
OTHER IMPOSITIONS AND THE AMOUNT IN ESCROW IS SUFFICIENT TO PAY ANY BILL FOR ANY
SUCH CHARGE WHILE MAINTAINING IN ESCROW FUNDS SUFFICIENT TO MEET MORTGAGOR’S
OTHER OBLIGATIONS UNDER THIS SECTION 2.3, UPON WRITTEN REQUEST BY MORTGAGOR, OR
AT ANY TIME AS MAY BE DETERMINED BY MORTGAGEE, MORTGAGEE SHALL DISBURSE SUCH
FUNDS TO APPLY TO THE PAYMENT OF SUCH BILL. MORTGAGEE SHALL APPLY THE FUNDS TO
PAY SAID RATES, RENTS, TAXES, ASSESSMENTS, INSURANCE PREMIUMS AND OTHER
IMPOSITIONS SO LONG AS THERE IS NOT AN EVENT OF DEFAULT. MORTGAGEE SHALL MAKE NO
CHARGE FOR SO HOLDING AND APPLYING THE FUNDS, ANALYZING SAID ACCOUNT OR FOR
VERIFYING AND COMPILING SAID ASSESSMENTS AND BILLS, UNLESS MORTGAGEE PAYS
MORTGAGOR INTEREST, EARNINGS OR PROFITS ON THE FUNDS AND APPLICABLE LAW PERMITS
MORTGAGEE TO MAKE SUCH A CHARGE. UNLESS APPLICABLE LAW
REQUIRES INTEREST, EARNINGS OR PROFITS TO BE PAID, MORTGAGEE SHALL NOT BE
REQUIRED TO PAY MORTGAGOR ANY INTEREST, EARNINGS OR PROFITS ON THE FUNDS.
MORTGAGEE SHALL GIVE TO MORTGAGOR, WITHOUT CHARGE, AN ANNUAL ACCOUNTING OF THE
FUNDS IN MORTGAGEE’S NORMAL FORMAT SHOWING CREDITS AND DEBITS TO THE FUNDS AND
THE PURPOSE FOR WHICH EACH DEBIT TO THE FUNDS WAS MADE. THE FUNDS ARE PLEDGED AS
ADDITIONAL SECURITY FOR THE INDEBTEDNESS SECURED BY THIS MORTGAGE.

     

     

    
      
        
        

      

      
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    IF THE
AMOUNT OF THE FUNDS HELD BY MORTGAGEE AT THE TIME OF THE ANNUAL ACCOUNTING
THEREOF SHALL EXCEED THE AMOUNT DEEMED NECESSARY BY MORTGAGEE TO PROVIDE FOR THE
PAYMENT OF WATER AND SEWER RATES, TAXES, ASSESSMENTS, INSURANCE PREMIUMS, RENTS
AND OTHER IMPOSITIONS, AS THEY FALL DUE, SUCH EXCESS SHALL BE CREDITED TO
MORTGAGOR ON THE NEXT MONTHLY INSTALLMENT OR INSTALLMENTS OF FUNDS DUE. IF AT
ANY TIME THE AMOUNT OF THE FUNDS HELD BY MORTGAGEE SHALL BE LESS THAN THE AMOUNT
DEEMED NECESSARY BY MORTGAGEE TO PAY WATER AND SEWER RATES, TAXES, ASSESSMENTS,
INSURANCE PREMIUMS, RENT, AND OTHER IMPOSITIONS, AS THEY FALL DUE, MORTGAGOR
SHALL PAY TO MORTGAGEE ANY AMOUNT NECESSARY TO MAKE UP THE DEFICIENCY
IMMEDIATELY AFTER NOTICE FROM MORTGAGEE TO MORTGAGOR REQUESTING PAYMENT
THEREOF.

     

    UPON AN
EVENT OF DEFAULT, MORTGAGEE MAY APPLY, IN ANY AMOUNT AND IN ANY ORDER AS
MORTGAGEE SHALL DETERMINE IN MORTGAGEE’S SOLE DISCRETION, ANY FUNDS HELD BY
MORTGAGEE AT THE TIME OF APPLICATION

    (A) TO PAY
RATES, RENTS, TAXES, ASSESSMENTS, INSURANCE PREMIUMS AND OTHER IMPOSITIONS WHICH
ARE NOW OR WILL HEREAFTER BECOME DUE, OR

     

    (B) AS A
CREDIT AGAINST SUMS SECURED BY THIS MORTGAGE. UPON PAYMENT IN FULL OF ALL SUMS
SECURED BY THIS MORTGAGE, MORTGAGEE SHALL REFUND TO MORTGAGOR ANY FUNDS HELD BY
MORTGAGEE.

     

    MORTGAGOR
SHALL PAY WHEN DUE AND BEFORE ANY DELINQUENCY OCCURS OR PENALTY IS ASSESSED
THEREON ALL WATER AND SEWER RATES, RENTS, TAXES, ASSESSMENTS, INSURANCE
PREMIUMS, AND OTHER IMPOSITIONS ATTRIBUTABLE TO THE PROPERTY AT MORTGAGEE’S
OPTION IN THE MANNER PROVIDED HEREIN OR, IF NOT PAID IN SUCH MANNER, BY
MORTGAGOR MAKING PAYMENT, WHEN DUE, DIRECTLY TO THE PAYEE THEREOF, OR IN SUCH
OTHER MANNER AS MORTGAGEE MAY DESIGNATE IN WRITING. MORTGAGOR SHALL PROMPTLY
FURNISH TO MORTGAGEE ALL NOTICES OF AMOUNTS DUE UNDER THIS SECTION, AND IN THE
EVENT MORTGAGOR SHALL MAKE PAYMENT DIRECTLY, MORTGAGOR SHALL PROMPTLY FURNISH TO
MORTGAGEE RECEIPTS EVIDENCING SUCH PAYMENTS.

     

    2.4 INDEMNIFICATION OF
MORTGAGEE. TO INDEMNIFY MORTGAGEE FOR AND HOLD MORTGAGEE HARMLESS FROM
AND AGAINST ANY LOSS SUFFERED OR ANY LIABILITY, COST, OR EXPENSE INCLUDING,
WITHOUT LIMITATION,
REASONABLE ATTORNEYS’ FEES, INCURRED BY MORTGAGEE ON ACCOUNT OF ANY DAMAGE TO
THE PERSON OR PROPERTY OF MORTGAGOR, MORTGAGEE OR ANY THIRD PARTIES BY REASON OF
OR IN CONNECTION WITH THE CONSTRUCTION, USE, OPERATION, MAINTENANCE, REPAIR
AND/OR MANAGEMENT OF THE PROPERTY, WHETHER OR NOT SUCH DAMAGE IS DUE IN WHOLE OR
IN PART TO THE NEGLIGENCE OF MORTGAGEE, OR ITS EMPLOYEES OR AGENTS. MORTGAGOR
SHALL UNDERTAKE, AT ITS SOLE EXPENSE AND THROUGH COUNSEL SATISFACTORY TO
MORTGAGEE, THE DEFENSE OF MORTGAGEE IN ANY LAWSUIT COMMENCED AS THE RESULT, OR
ALLEGED TO BE THE RESULT, OF INJURY OR DAMAGE OCCURRING BY REASON OF OR IN
CONNECTION WITH THE CONSTRUCTION, USE, OPERATION, MAINTENANCE, REPAIR AND/OR
MANAGEMENT OF THE PROPERTY.

     

     

    
      
        
        

      

      
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    2.5 INSURANCE. TO OBTAIN
AND KEEP IN FULL FORCE AND EFFECT AT ALL TIMES, AT THE SOLE COST AND EXPENSE OF
MORTGAGOR, POLICIES OF INSURANCE TO:

     

    (A) KEEP THE
PROPERTY INSURED ON AN “ALL RISK” BASIS AGAINST LOSS OR DAMAGE BY FIRE AND ALL
RISKS OF DIRECT PHYSICAL LOSS AND SUCH OTHER RISKS OF DAMAGE, CASUALTIES,
CONTINGENCIES AND/OR HAZARDS AS MORTGAGEE MAY FROM TIME TO TIME REQUIRE
(INCLUDING, WITHOUT LIMITATION, COVERAGE FOR EARTHQUAKES, VANDALISM AND
MALICIOUS MISCHIEF) FOR NOT LESS THAN THE GREATER OF (i) THE ORIGINAL PRINCIPAL
AMOUNT OF THE NOTE OR (ii) ONE HUNDRED PERCENT (100%) OF THE REPLACEMENT COST
THEREOF, EVIDENCED BY “REPLACEMENT COST”, “INCREASED COST OF CONSTRUCTION” AND
“AGREED AMOUNT” ENDORSEMENTS IN THE POLICY. MORTGAGEE MAY REQUIRE PERIODIC
APPRAISALS OF THE PROPERTY (AT MORTGAGOR’S EXPENSE) BY APPRAISERS SATISFACTORY
TO MORTGAGEE AND THE INSURANCE CARRIER. THE AMOUNT OF DIRECT PHYSICAL LOSS
INSURANCE SHALL BE ADJUSTED AS REQUIRED BY THE INSURANCE CARRIER IN ORDER TO
OBTAIN COVERAGE OF 100% OF REPLACEMENT COST AND TO MAINTAIN THE APPROPRIATE
“AGREED AMOUNT” ENDORSEMENT COVERAGE;

     

    (B) KEEP THE
PROPERTY INSURED WITH BUSINESS AND RENTAL INTERRUPTION INSURANCE COVERING RISK
OF LOSS DUE TO THE OCCURRENCE OF ANY HAZARDS INSURED AGAINST UNDER THE REQUIRED
FIRE AND EXTENDED COVERAGE INSURANCE, WITH AN “AGREED AMOUNT” ENDORSEMENT
PROVISION, IN SUCH AMOUNTS AS MORTGAGEE MAY REQUIRE;

     

    (C)
MAINTAIN COMPREHENSIVE GENERAL PUBLIC LIABILITY INSURANCE COVERING THE LEGAL
LIABILITY OF MORTGAGOR AGAINST CLAIMS FOR BODILY INJURY, DEATH AND/OR PROPERTY
DAMAGE ARISING OUT OF THE CONSTRUCTION, USE, OPERATION, REPAIR, MAINTENANCE
AND/OR MANAGEMENT OF THE PROPERTY AND ALL AREAS APPURTENANT THERETO

     

    THREATENED
TAKING, MORTGAGOR SHALL IMMEDIATELY FURNISH A COPY OF SUCH NOTICE TO MORTGAGEE
IF SUCH NOTICE WAS WRITTEN, OR INFORM MORTGAGEE IN WRITING OF SUCH NOTICE IF
SUCH NOTICE WAS UNWRITTEN. MORTGAGOR HEREBY IRREVOCABLY APPOINTS MORTGAGEE AS
MORTGAGOR’S ATTORNEY-IN-FACT (WHICH APPOINTMENT IS COUPLED WITH AN INTEREST) TO,
AT MORTGAGEE’S OPTION, COMMENCE, APPEAR IN AND PROSECUTE, IN MORTGAGOR’S OR
MORTGAGEE’S NAME OR BOTH, ANY ACTION OR PROCEEDING RELATING TO ANY TAKING. ANY
AWARD OR PAYMENT RECEIVED BY MORTGAGEE IN RESPECT TO ANY TAKING SHALL BE APPLIED
BY MORTGAGEE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.6(C) HEREOF.
MORTGAGEE SHALL NOT BE DEEMED A TRUSTEE WITH RESPECT TO ANY FUNDS RECEIVED BY
MORTGAGEE PURSUANT TO THIS SECTION 2.6(B), AND MORTGAGEE MAY COMMINGLE SUCH
FUNDS WITH ITS GENERAL FUNDS AND SHALL NOT BE OBLIGATED TO PAY INTEREST THEREON.
WITHIN SEVEN (7) DAYS AFTER REQUEST BY MORTGAGEE, MORTGAGOR AGREES TO EXECUTE
AND DELIVER SUCH DOCUMENTS AS MAY BE REQUIRED BY MORTGAGEE TO ENABLE MORTGAGEE
TO REALIZE UPON THE RIGHTS GRANTED TO IT UNDER THIS SECTION 2.6(B).

     

    (C) PROCEEDS. MORTGAGEE
MAY APPLY THE PROCEEDS OF INSURANCE PAID TO MORTGAGEE PURSUANT TO SECTION 2.6(A)
HEREOF AND THE AMOUNT OF ANY AWARD OR PAYMENT RECEIVED BY MORTGAGEE PURSUANT TO
SECTION 2.6(B) HEREOF (COLLECTIVELY, THE “PROCEEDS”) FIRST, TO THE PAYMENT OF
ALL MORTGAGEE’S COSTS AND EXPENSES INCURRED IN OBTAINING SUCH PROCEEDS
(INCLUDING, WITHOUT LIMITATION, LEGAL FEES AND DISBURSEMENTS), AND MAY, IN ITS
ABSOLUTE DISCRETION AND WITHOUT REGARD TO THE ADEQUACY OF ITS SECURITY, APPLY
THE BALANCE, IN WHOLE OR IN PART, IN SUCH ORDER AND PRIORITY AS MORTGAGEE MAY
DETERMINE (I) TO THE REDUCTION OF THE INDEBTEDNESS SECURED BY THIS MORTGAGE,
WHICH APPLICATION SHALL NOT EXTEND OR POSTPONE THE DUE DATES OR AMOUNTS OF ANY
PAYMENTS OF PRINCIPAL DUE UNDER THE NOTE, OR (II) TO OR FOR THE BENEFIT OF
MORTGAGOR, SUBJECT AND PURSUANT TO DISBURSEMENT CONTROL PROCEDURES PRESCRIBED BY
MORTGAGEE, FOR THE ALTERATION, RESTORATION, REPAIR, REPLACEMENT OR REBUILDING
(THE “REBUILDING”) OF ANY PART OF THE PROPERTY WHICH MAY HAVE BEEN LOST,
ALTERED, DAMAGED OR DESTROYED AS A RESULT OF THE CASUALTY OR TAKING. IF THE
PROCEEDS ARE HELD BY MORTGAGEE TO BE APPLIED TOWARD THE COST OF REBUILDING THE
PROPERTY, THE PROPERTY SHALL BE RESTORED BY MORTGAGOR AT ITS SOLE EXPENSE TO THE
EQUIVALENT OF ITS ORIGINAL CONDITION OR SUCH OTHER CONDITION AS MORTGAGEE MAY
EXPRESSLY APPROVE IN WRITING. MORTGAGEE MAY, AT MORTGAGEE’S OPTION, CONDITION
DISBURSEMENT OF SAID PROCEEDS, FROM TIME TO TIME AS CONSTRUCTION PROGRESSES, ON
MORTGAGEE’S APPROVAL OF PLANS AND SPECIFICATIONS OF AN ARCHITECT SATISFACTORY TO
MORTGAGEE, CONTRACTOR’S COST ESTIMATES, ARCHITECT’S CERTIFICATES, WAIVERS OF
LIENS,
SWORN STATEMENTS OF MECHANICS AND MATERIALMEN, AND SUCH OTHER EVIDENCE OF COSTS,
PERCENTAGE OF COMPLETION OF CONSTRUCTION, APPLICATION OF PAYMENTS, AND
SATISFACTION OF LIENS AS MORTGAGEE MAY REQUIRE, AND THE APPLICABLE PROVISIONS OF
THE OTHER LOAN DOCUMENTS SHALL BE DEEMED TO APPLY TO SUCH
REBUILDING.

     

     

     

    
      
        
        

      

      
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    2.7 LIENS. TO PAY ANY
DEBT, CLAIM OR OTHER CHARGE FOR REPAIRS OR IMPROVEMENTS THAT MAY HAVE BEEN MADE
OR MAY HEREAFTER BE MADE ON, AND WHICH MAY BECOME A LIEN AGAINST THE PROPERTY OR
ANY PART THEREOF, AND NOT TO PERMIT OR SUFFER ANY LIEN OR ENCUMBRANCE OF ANY
KIND TO ACCRUE OR REMAIN ON THE PROPERTY OR ANY PART THEREOF. IF ANY SUCH LIEN
IS FILED AGAINST THE PROPERTY, MORTGAGOR WILL DISCHARGE OR BOND THE SAME OF
RECORD TO MORTGAGEE’S SATISFACTION WITHIN THIRTY (30) DAYS AFTER THE LIEN IS
FILED, OR IF NOT FILED, WITHIN THIRTY (30) DAYS AFTER MORTGAGOR HAS NOTICE
THEREOF.

     

    2.8 PROTECTION OF MORTGAGEE’S
INTEREST. THAT MORTGAGEE MAY, AT ITS OPTION, DO ALL THINGS PROVIDED OR
PERMITTED TO BE DONE BY A MORTGAGEE UNDER ALL APPLICABLE LAW FOR THE PROTECTION
OF MORTGAGEE’S INTEREST IN THE PROPERTY AND THAT THIS MORTGAGE SECURES, INTER
ALIA, THE UNPAID BALANCE OF ALL ADVANCES MADE WITH RESPECT TO THE PROPERTY TO
THE FULLEST EXTENT PROVIDED BY APPLICABLE LAW.

     

    2.9 ACCESS TO PROPERTY; BOOKS
AND RECORDS. MORTGAGOR COVENANTS THAT MORTGAGEE SHALL HAVE THE RIGHT TO
INSPECT THE BOOKS AND RECORDS OF THE OPERATION OF THE PROPERTY AND MAKE COPIES
THEREOF AT ALL REASONABLE TIMES AND UPON REASONABLE NOTICE TO MORTGAGOR.
MORTGAGEE SHALL ALSO HAVE THE RIGHT TO INSPECT THE PROPERTY AT ALL REASONABLE
TIMES AND UPON REASONABLE NOTICE TO MORTGAGOR.

     

    2.10
ADVANCES BY MORTGAGEE.
THAT UPON FAILURE OF MORTGAGOR TO COMPLY WITH ANY OF THE PROVISIONS OF
THIS MORTGAGE, MORTGAGEE MAY, BUT WITHOUT ANY OBLIGATION SO TO DO, ENTER UPON
THE PROPERTY AND MAKE REPAIRS, PROCURE INSURANCE, PAY TAXES AND ASSESSMENTS,
CAUSE ENVIRONMENTAL STUDIES, AUDITS, AND TESTS TO BE PERFORMED, AND PAY ANY
EXPENSE, DEBT, CLAIM OR OTHER CHARGE WHICH MORTGAGOR SHOULD HAVE MADE, PROCURED
OR PAID (THE RECEIPT OF THE CREDITOR OR PROPER TAX OFFICIAL BEING CONCLUSIVE
EVIDENCE OF THE AMOUNT, VALIDITY AND THE FACT OF PAYMENT THEREOF), AND ALL SUMS
SO PAID SHALL BE IMMEDIATELY DUE AND PAYABLE, SHALL BEAR INTEREST AT THE HIGHEST
RATE PERMITTED TO BE CHARGED ON DELINQUENT INSTALLMENTS OF PRINCIPAL AND
INTEREST UNDER THE NOTE, AND SHALL, TOGETHER WITH SUCH INTEREST, BE ADDED TO THE
INDEBTEDNESS HEREBY SECURED.

    NOTHING
CONTAINED IN THIS SECTION SHALL REQUIRE MORTGAGEE TO INCUR ANY EXPENSE OR TAKE
ANY ACTION HEREUNDER.

     

    2.11
REIMBURSEMENTS TO
MORTGAGEE. IF NOT TIMELY PAID BY BORROWER, THAT MORTGAGOR SHALL PAY ALL
SUMS, INCLUDING COSTS AND REASONABLE ATTORNEYS’ FEES, WHICH MORTGAGEE MAY INCUR
PRIOR TO OR AS A RESULT OF ANY PROCEEDINGS TO PREVENT THE COMMISSION OF WASTE,
OR TO ESTABLISH OR PRESERVE THE LIEN OF THIS MORTGAGE OR ITS PRIORITY, OR IN
CONNECTION WITH ANY SUIT OR POTENTIAL SUIT IN ANY COURT, INCLUDING WITHOUT
LIMITATION BANKRUPTCY PROCEEDINGS, PROBATE PROCEEDINGS, CONDEMNATION PROCEEDINGS
OR FORECLOSURE PROCEEDINGS, TO ENFORCE THIS MORTGAGE OR RECOVER THE INDEBTEDNESS
HEREBY SECURED, OR TO PROTECT THE SECURITY OF THIS MORTGAGE, OR OTHERWISE IN
PROTECTING OR ENFORCING ITS RIGHTS UNDER THE LOAN DOCUMENTS. ALL SUCH SUMS SHALL
BE IMMEDIATELY DUE AND PAYABLE, SHALL BEAR INTEREST AT THE HIGHEST RATE
PERMITTED TO BE CHARGED ON DELINQUENT INSTALLMENTS OF PRINCIPAL AND INTEREST
UNDER THE NOTE AND SHALL, TOGETHER WITH SUCH INTEREST, BE ADDED TO THE
INDEBTEDNESS HEREBY SECURED.

     

    2.12
APPLICATION OF FUNDS.
THAT UNLESS APPLICABLE LAW PROVIDES OTHERWISE, ALL PAYMENTS RECEIVED BY
MORTGAGEE FROM MORTGAGOR UNDER THIS MORTGAGE SHALL BE APPLIED BY MORTGAGEE TO:
(A) THE PAYMENT OF ADVANCES AND EXPENDITURES MADE BY MORTGAGEE IN ACCORDANCE
WITH THE TERMS OF THE LOAN DOCUMENTS INCLUDING, WITHOUT LIMITATION, ADVANCEMENTS
FOR TAXES, INSURANCE, ASSESSMENTS, AND THE LIKE; (B) THE PAYMENT OF INTEREST AND
LATE CHARGES PAYABLE ON THE NOTE; (C) THE PAYMENT OF PRINCIPAL OF THE NOTE AND
ANY PREPAYMENT PREMIUM OR PENALTY; AND (D) THE PAYMENT OF ANY OTHER AMOUNTS
WHICH MAY BECOME DUE TO MORTGAGEE PURSUANT TO THE NOTE, THIS MORTGAGE OR ANY
OTHER LOAN DOCUMENTS, AND/OR OTHER AMOUNTS SECURED HEREBY, ALL IN SUCH ORDER AND
SUCH MANNER AS MORTGAGEE MAY DETERMINE, IN ITS DISCRETION, FROM TIME TO
TIME.

     

    2.13
RESTRICTIONS ON SALE,
TRANSFER, CONVEYANCE, LEASE,  EASEMENTS, RESTRICTIONS,
COVENANTS, SECURITY INTERESTS, MORTGAGES,  ENCUMBRANCE AND ASSIGNMENT.
NOT TO DIRECTLY OR INDIRECTLY GRANT, MAKE, CREATE OR PERMIT, ALLOW OR
SUFFER TO BE MADE OR CREATED ANY SALE, TRANSFER, CONVEYANCE, LEASE, EASEMENT,
RESTRICTION, COVENANT, SECURITY INTEREST, MORTGAGE, PLEDGE, ENCUMBRANCE OR
ASSIGNMENT OF THE PROPERTY, OR ANY PART THEREOF OR INTEREST THEREIN, INCLUDING
AN ASSIGNMENT OF THE RENTS AND LEASES THEREOF, OR ANY TRANSFER OR ASSIGNMENT OF
LEGAL OR BENEFICIAL INTERESTS IN MORTGAGOR, IN ANY GUARANTOR (OTHER THAN AN
INDIVIDUAL) OR IN THE PROPERTY, OR ANY CONTRACT OR AGREEMENT TO DO ANY OF THE
SAME, WITHOUT MORTGAGEE’S PRIOR WRITTEN CONSENT, WHICH MAY BE WITHHELD IN
MORTGAGEE’S SOLE,

    ABSOLUTE
AND CONTINUING DISCRETION; OTHERWISE MORTGAGEE MAY, AT ITS OPTION, DECLARE ALL
OF THE SUMS SECURED HEREBY TO BE IMMEDIATELY DUE AND PAYABLE.

     

     

    
      
        
        

      

      
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    2.14
ZONING CHANGES,
SUBDIVISION, ETC. NOT TO PARTICIPATE IN ANY PROCEEDINGS FOR, OR ACQUIESCE
IN ANY CHANGE OR PROPOSED CHANGE OF, ZONING LAWS OR REGULATIONS GOVERNING THE
PROPERTY, THE CREATION OF A SUBDIVISION OF OR CUT-UP INVOLVING THE PROPERTY,
CONSOLIDATION OF THE PROPERTY WITH ANY OTHER PROPERTY, AND NOT TO SUBJECT THE
PROPERTY TO ANY DECLARATION OF CONDOMINIUM OR OTHER PROVISIONS FOR SUBDIVIDED OR
COMMON OWNERSHIP, WITHOUT THE PRIOR WRITTEN CONSENT AND PARTICIPATION OF
MORTGAGEE. MORTGAGOR AGREES TO PROMPTLY NOTIFY MORTGAGEE OF ANY PROPOSED CHANGE
IN THE ZONING OF THE PROPERTY OR ANY PORTION THEREOF.

     

    2.15
CHANGES IN LAWS.
IN THE EVENT OF A COURT DECREE OR AN ENACTMENT AFTER THE DATE HEREOF BY
ANY LEGISLATIVE AUTHORITY OF ANY LAW IMPOSING UPON A MORTGAGEE THE PAYMENT OF
THE WHOLE OR ANY PART OF THE OBLIGATIONS HEREIN REQUIRED TO BE PAID BY THE
MORTGAGOR, OR CHANGING IN ANY WAY THE LAWS RELATING TO THE TAXATION OF MORTGAGES
OR DEBTS SECURED BY MORTGAGES OR A MORTGAGEE’S INTEREST IN MORTGAGED PREMISES,
SO AS TO IMPOSE SUCH OBLIGATION ON THE MORTGAGEE OR ON THE INTEREST OF THE
MORTGAGEE IN THE PROPERTY, THEN, IN ANY SUCH EVENT, MORTGAGOR SHALL BEAR AND PAY
THE FULL AMOUNT OF SUCH OBLIGATION, PROVIDED THAT IF FOR ANY REASON PAYMENT BY
MORTGAGOR OF ANY SUCH OBLIGATION WOULD BE UNLAWFUL, OR IF THE PAYMENT THEREOF
WOULD CONSTITUTE USURY OR RENDER THE INDEBTEDNESS SECURED HEREBY WHOLLY OR
PARTIALLY USURIOUS, MORTGAGEE, AT ITS OPTION, MAY DECLARE THE WHOLE SUM SECURED
BY THIS MORTGAGE WITH INTEREST THEREON TO BE IMMEDIATELY DUE AND PAYABLE, OR
MORTGAGEE, AT ITS OPTION, MAY PAY THAT AMOUNT OR PORTION OF SUCH OBLIGATION AS
RENDERS THE INDEBTEDNESS SECURED HEREBY UNLAWFUL OR USURIOUS, IN WHICH EVENT
MORTGAGOR SHALL CONCURRENTLY THEREWITH PAY THE REMAINING LAWFUL AND NON-USURIOUS
PORTION OR BALANCE OF SAID OBLIGATION.

     

    2.16
DELETED.

     

    2.17
RIGHTS ASSIGNED.
THE RIGHTS ASSIGNED HEREUNDER INCLUDE BUT ARE NOT LIMITED TO ALL OF
MORTGAGOR’S RIGHTS: (I) TO MODIFY THE LEASES AND/OR ANY RELATED GUARANTEES; (II)
TO TERMINATE OR TO ACCEPT THE SURRENDER OF ANY LEASE OR ANY RELATED GUARANTEES;
(III) TO WAIVE OR RELEASE THE LESSEES OR ANY GUARANTOR FROM THE OBSERVANCE OR
PERFORMANCE OF ANY COVENANT OR CONDITION OF THE LEASES AND/OR ANY RELATED
GUARANTEES; (IV) TO PERMIT THE PREPAYMENT OF ANY RENTS UNDER THE LEASES FOR MORE
THAN THIRTY (30) DAYS IN ADVANCE OF THEIR OF THE
OPERATION OF THE PROPERTY, OF THE PERFORMANCE OF MORTGAGOR’S OBLIGATIONS UNDER
THE LEASES AND OF SUCH COLLECTION, INCLUDING REASONABLE ATTORNEYS’ FEES, AND ANY
AMOUNTS REMAINING AFTER SUCH APPLICATION WILL BE APPLIED NEXT TO ACCRUED AND
UNPAID INTEREST AND OTHER AMOUNTS SECURED BY THIS MORTGAGE AND THE REMAINDER
THEREOF, IF ANY, TO THE PAYMENT OF PRINCIPAL OF THE INDEBTEDNESS SECURED HEREBY;
(IX) WITHOUT REGARD TO THE ADEQUACY OF SECURITY FOR THE INDEBTEDNESS HEREBY
SECURED, HAVE A RECEIVER APPOINTED TO MANAGE AND COLLECT INCOME AND RENTS FROM
THE PROPERTY; (X) CANCEL OR TERMINATE ANY OR ALL OF THE LEASES; AND (XI) DO ALL
OTHER THINGS THE LENDER MAY DEEM NECESSARY OR PROPER TO PROTECT ITS SECURITY.
ENTRY UPON AND TAKING POSSESSION OF THE PROPERTY AND THE COLLECTION OF THE RENTS
AND THE APPLICATION THEREOF WILL NOT OPERATE TO CURE OR WAIVE ANY DEFAULT UNDER
ANY INSTRUMENT GIVEN BY MORTGAGOR TO THE LENDER OR PROHIBIT THE TAKING OF ANY
OTHER ACTION BY THE LENDER UNDER ANY SUCH OTHER INSTRUMENT, OR AT LAW OR IN
EQUITY TO ENFORCE THE PAYMENT OF THE INDEBTEDNESS SECURED HEREBY OR TO REALIZE
ON ANY OTHER SECURITY OR GUARANTEE. THE EXISTENCE AND/OR EXERCISE OF THE RIGHTS
OF THE LENDER SET FORTH IN THIS SECTION SHALL NOT CREATE ANY OBLIGATIONS ON THE
PART OF THE LENDER.

     

    3.3 RIGHT OF PERFORMANCE BY
LENDER. IF MORTGAGOR FAILS TO OBSERVE OR PERFORM ANY COVENANT OR
CONDITION TO BE OBSERVED OR PERFORMED BY MORTGAGOR UNDER ANY OF THE LEASES, THE
LENDER, WITHOUT OBLIGATION TO DO SO AND WITHOUT NOTICE TO OR DEMAND ON MORTGAGOR
OR RELEASING MORTGAGOR FROM ITS OBLIGATION TO DO SO, MAY PERFORM SUCH COVENANT
OR CONDITION AND, TO THE EXTENT THAT THE LENDER INCURES ANY COSTS OR PAYS ANY
MONIES IN CONNECTION THEREWITH, INCLUDING ANY COSTS OR EXPENSES OF LITIGATION,
THE COSTS AND EXPENSES WILL BE DUE ON DEMAND AND WILL BE INCLUDED IN THE
INDEBTEDNESS SECURED HEREBY AND WILL BEAR INTEREST FROM THE INCURRING OR PAYMENT
THEREOF AT THE HIGHEST RATE PERMITTED TO BE CHARGED ON DELINQUENT INSTALLMENTS
OF PRINCIPAL AND INTEREST UNDER THE NOTE.

     

    3.4 NOTIFICATION TO LESSEES.
MORTGAGEE MAY GIVE NOTICE OF THE PROVISIONS OF THIS MORTGAGE AT ANY TIME
TO ANY LESSEE, AND/OR ANY OTHER PERSON RESPONSIBLE FOR PAYMENT OR PERFORMANCE
UNDER ANY OF THE ASSIGNED INTERESTS, AND ANY LESSEE, OR OTHER RESPONSIBLE PARTY
MAY RELY ON ANY NOTICE GIVEN IT BY THE LENDER PURSUANT TO THIS MORTGAGE, AND
RECOGNIZE AND COMPLY WITH ALL CLAIMS AND DEMANDS OF MORTGAGEE (INCLUDING, BUT
NOT LIMITED TO, DIRECTIONS TO SUCH LESSEES OR OTHER RESPONSIBLE PARTY TO MAKE
PAYMENTS DUE UNDER ITS LEASE DIRECTLY TO MORTGAGEE) WITHOUT ANY INVESTIGATION AS
TO THE CAUSE FOR SUCH ACTION, THE EXISTENCE OF ANY DEFAULT, THE VALIDITY OF
ANY DEBT,
OR THE APPLICATION OF ANY ACCOUNTS SO PAID, AND MORTGAGOR AGREES TO HOLD
HARMLESS EACH LESSEE, GUARANTOR AND OTHER RESPONSIBLE PARTY WITH RESPECT TO ANY
PAYMENT MADE OR ACTION TAKEN IN RELIANCE ON ANY SUCH NOTICE. MORTGAGOR HEREBY
IRREVOCABLY DIRECTS EACH LESSEE, GUARANTOR AND OTHER RESPONSIBLE PARTY TO MAKE
ALL PAYMENTS DUE UNDER ITS LEASE PAYABLE AND DELIVERABLE AS DIRECTED BY
MORTGAGEE IN ANY NOTICE GIVEN BY MORTGAGEE TO SUCH LESSEE.

     

     

    
      
        
        

      

      
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    3.5 OBLIGATIONS OF MORTGAGEE;
INDEMNIFICATION. MORTGAGEE WILL NOT BE OBLIGATED TO PERFORM OR DISCHARGE
ANY OBLIGATION OR DUTY OF MORTGAGOR UNDER ANY OF THE LEASES, AND THE PROVISIONS
OF THIS MORTGAGE DO NOT CONSTITUTE AN ASSUMPTION OF ANY SUCH OBLIGATION OR DUTY.
BY VIRTUE OF THIS MORTAGE: MORTGAGEE WILL NOT BE DEEMED TO HAVE ANY
RESPONSIBILITY FOR THE CONTROL, CARE, MANAGEMENT OR REPAIR OF THE PROPERTY; OR
ANY RESPONSIBILITY OR LIABILITY FOR ANY NEGLIGENCE IN THE MANAGEMENT, OPERATION,
UPKEEP, REPAIR OR CONTROL OF THE PROPERTY RESULTING IN LOSS, INJURY OR DEATH TO
ANY LESSEE, LICENSEE, EMPLOYEE, STRANGER OR OTHER PERSON. MORTGAGOR WILL
INDEMNIFY AND HOLD MORTGAGEE HARMLESS AGAINST (A) ALL LIABILITIES, LOSSES AND
DAMAGES THAT MORTGAGEE MAY INCUR UNDER THE LEASES OR UNDER OR BY REASON OF THIS
MORTGAGE AND (B) ALL CLAIMS AND DEMANDS WHATSOEVER THAT MAY BE ASSERTED AGAINST
MORTGAGEE BY REASON OF AN ACT OF MORTGAGEE UNDER THIS MORTGAGE OR UNDER ANY OF
THE LEASES. SHOULD MORTGAGEE INCUR ANY SUCH LIABILITY, LOSS, DAMAGE OR DEMAND,
THE AMOUNT THEREOF, INCLUDING COSTS, EXPENSES AND REASONABLE ATTORNEYS’ FEES
INCURRED IN THE DEFENSE THEREOF, SHALL BE SECURED HEREBY, AND MORTGAGOR SHALL
REIMBURSE LENDER THEREFOR IMMEDIATELY UPON DEMAND.

     

    3.6 REMEDIES. UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT, MORTGAGEE SHALL HAVE THE RIGHT TO EXERCISE
ALL RIGHTS AND REMEDIES PROVIDED BY LAW OR IN EQUITY TO WHICH MORTGAGEE IS
ENTITLED. UPON AN EVENT OF DEFAULT, IN ADDITION TO ANY RIGHTS AND REMEDIES
GRANTED TO MORTGAGEE PURSUANT TO THE LOAN DOCUMENTS, AND WITHOUT IN ANY WAY
LIMITING THE RIGHTS AND REMEDIES OF MORTGAGEE UNDER ANY OTHER PROVISION OF THIS
MORTGAGE, THE WHOLE OF THE INDEBTEDNESS HEREBY SECURED SHALL, AT MORTGAGEE’S
OPTION, BECOME IMMEDIATELY DUE AND PAYABLE WITHOUT DEMAND OR NOTICE, SHALL BEAR
INTEREST AT THE HIGHEST RATE PERMITTED TO BE CHARGED ON DELINQUENT INSTALLMENTS
OF PRINCIPAL AND INTEREST UNDER THE NOTE, AND THIS MORTGAGE SHALL BECOME
ABSOLUTE AND SUBJECT TO FORECLOSURE. AT ANY TIME AFTER THE INDEBTEDNESS HEREBY
SECURED SHALL BECOME DUE, WHETHER BY ACCELERATION OR OTHERWISE, MORTGAGEE OR THE
HOLDER OF THE NOTE SHALL HAVE THE RIGHT TO FORECLOSE THE LIEN
HEREOF.

     

    3.7 COSTS AND EXPENSES.
AT ANY TIME AFTER THE INDEBTEDNESS HEREBY SECURED SHALL BECOME DUE,
WHETHER BY ACCELERATION OR OTHERWISE, MORTGAGEE OR THE HOLDER OF THE NOTE SHALL
HAVE THE RIGHT TO FORECLOSE THE LIEN HEREOF. IF ALL OR ANY PART OF THE PROPERTY
IS TRANSFERRED TO MORTGAGEE (OR ITS ASSIGNEE OR NOMINEE) BY VIRTUE OF A
FORECLOSURE ACTION OR A TRANSFER “IN LIEU OF FORECLOSURE,” MORTGAGOR SHALL BE
RESPONSIBLE FOR ALL TRANSFER FEES, DOCUMENTARY STAMPS, DOCUMENTARY TAXES,
RECORDATION FEES AND SIMILAR TAXES, FEES AND/OR EXPENSES RELATED THERETO OR IN
CONNECTION THEREWITH. IN ANY SUIT TO FORECLOSE SUCH LIEN, THERE SHALL BE ALLOWED
AND INCLUDED AS ADDITIONAL INDEBTEDNESS IN THE DECREE OF SALE, TO THE EXTENT
PERMITTED BY LAW, ALL EXPENDITURES AND EXPENSES THAT MAY BE PAID OR INCURRED BY
OR ON BEHALF OF MORTGAGEE, OR THE HOLDER OF THE NOTE, FOR REASONABLE ATTORNEYS’
FEES, COLLECTION COSTS, COURT COSTS, APPRAISERS’ FEES, SHERIFF’S FEES,
DOCUMENTARY AND EXPERT EVIDENCE, STENOGRAPHERS’ CHARGES, PUBLICATION COSTS AND
SUCH OTHER COSTS AND EXPENSES AS MORTGAGEE OR THE HOLDER OF THE NOTE MAY DEEM
REASONABLY NECESSARY TO PROSECUTE SUCH SUIT OR TO EVIDENCE TO BIDDERS AT ANY
SALE THAT MAY BE HAD PURSUANT TO SUCH DECREE THE TRUE CONDITION OF THE TITLE TO
OR THE VALUE OF THE PROPERTY. TO THE EXTENT PERMITTED BY LAW, ALL OF THE
FOREGOING EXPENDITURES AND EXPENSES SHALL BECOME PAYABLE ON DEMAND WITH INTEREST
THEREON FROM THE DATE OF EXPENDITURE AT THE HIGHEST RATE PERMITTED TO BE CHARGED
ON DELINQUENT INSTALLMENTS OF PRINCIPAL AND INTEREST UNDER THE NOTE AND IN
ADDITION SHALL INCLUDE EXPENDITURES AND EXPENSES INCURRED BY MORTGAGEE IN
CONNECTION WITH (A) A FORECLOSURE PROCEEDING; (B) ANY PROCEEDING TO WHICH
MORTGAGEE SHALL BE A PARTY, EITHER AS PLAINTIFF, CLAIMANT OR DEFENDANT, BY
REASON OF THIS MORTGAGE OR ANY OF THE INDEBTEDNESS; (C) PREPARATIONS FOR THE
COMMENCEMENT OF ANY SUIT FOR FORECLOSURE HEREBY AFTER ACCRUAL OF SUCH RIGHT TO
FORECLOSURE, WHETHER OR NOT ACTUALLY COMMENCED; OR (D) PREPARATION FOR THE
DEFENSE OF OR INVESTIGATION OF ANY THREATENED SUIT, CLAIM OR PROCEEDING THAT
MIGHT AFFECT THE PROPERTY, WHETHER OR NOT ACTUALLY COMMENCED. UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT, MORTGAGEE MAY CAUSE TO BE PERFORMED AT
MORTGAGOR’S EXPENSE SUCH ENVIRONMENTAL ASSESSMENTS AND SUCH OTHER STUDIES AND
INVESTIGATIONS OF THE PROPERTY AS MORTGAGEE MAY DETERMINE, IN ITS SOLE
DISCRETION, TO BE NECESSARY OR APPROPRIATE.

     

    3.8 PROCEEDS. THE
PROCEEDS RECEIVED BY MORTGAGEE IN ANY FORECLOSURE SALE OF THE PROPERTY SHALL BE
DISTRIBUTED AND APPLIED IN THE FOLLOWING ORDER OF PRIORITY: FIRST, ON ACCOUNT OF
ALL COSTS AND EXPENSES INCIDENT TO THE FORECLOSURE PROCEEDINGS, INCLUDING ALL
SUCH ITEMS AS ARE MENTIONED IN SECTION 3.7; SECOND, TO ALL OTHER
ITEMS

     

     

     

    
      
        
        

      

      
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    TO THE
EXCLUSION OF ANY OTHER PROVISION, ANYTHING HEREIN OR OTHERWISE TO THE CONTRARY
NOTWITHSTANDING.

     

     4.
MORTGAGOR’S COVENANTS,
REPRESENTATIONS AND WARRANTIES  WITH RESPECT TO THE COLLATERAL.
MORTGAGOR COVENANTS, REPRESENTS AND WARRANTS THAT:

     

     4.1
MORTGAGOR IS THE SOLE FEE SIMPLE OWNER OF THE COLLATERAL AND THE COLLATERAL IS
FREE OF ANY LIEN, SECURITY INTEREST, ENCUMBRANCE, OR OTHER RIGHT OF ANY THIRD
PARTY EXCEPT AS SET FORTH IN SECTION 1 OF THIS EXHIBIT C. NONE OF MORTGAGOR’S
TANGIBLE PERSONAL PROPERTY IS LEASED OR IS SUBJECT TO ANY LIEN OR SECURITY
INTEREST (WHETHER A PURCHASE MONEY SECURITY INTEREST OR OTHERWISE). EXCEPT AS
OTHERWISE PROVIDED HEREIN, MORTGAGOR SHALL NOT SELL, ASSIGN, PLEDGE, EXCHANGE,
LEASE, HIRE OUT OR OTHERWISE DISPOSE OF THE COLLATERAL OR ANY INTEREST THEREIN.
MORTGAGOR WILL DEFEND THE COLLATERAL AGAINST ALL CLAIMS AND DEMANDS, WHICH
MORTGAGEE DEEMS TO BE ADVERSE TO ITS INTERESTS, OF ANY PERSON AT ANY TIME
CLAIMING THE SAME OR ANY INTEREST THEREIN. NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN, THE SECURITY INTEREST HEREBY GRANTED IN ANY PARTICULAR ITEM OF
COLLATERAL, AND THIS MORTGAGE TO THE EXTENT IT PERTAINS THERETO, SHALL BE, AT
MORTGAGEE’S WRITTEN OPTION, PRIOR TO OR, TO THE EXTENT SUCH SECURITY INTEREST IS
VALID AND PERFECTED, SUBJECT AND SUBORDINATE TO THE SECURITY INTEREST IN SUCH
ITEM OF COLLATERAL GRANTED PURSUANT TO ANY OTHER LOAN DOCUMENT. NOTWITHSTANDING
THE FOREGOING, THE RIGHTS AND REMEDIES OF MORTGAGEE HEREUNDER, AND/OR ANY SUCH
OTHER LOAN DOCUMENT AND UNDER APPLICABLE LAW SHALL IN ALL EVENTS BE
CUMULATIVE.

     

     4.2
MORTGAGOR SHALL HAVE THE RIGHT TO DISPOSE OF ITEMS OF PERSONAL PROPERTY INCLUDED
WITHIN THE COLLATERAL IN THE ORDINARY COURSE OF BUSINESS PROVIDED THAT (I) SUCH
ITEMS OF PERSONAL PROPERTY ARE REPLACED (BY PURCHASE SUBJECT ONLY TO MORTGAGOR’S
LIEN AND NOT LEASED) WITH SIMILAR ITEMS OF PERSONAL PROPERTY OF EQUAL OR GREATER
VALUE WHICH ARE FREE AND CLEAR OF ANY AND ALL SECURITY INTERESTS OR CLAIMS IN
FAVOR OF THIRD PARTIES, BUT WHICH ARE SUBJECT TO THE LIEN OF MORTGAGEE GRANTED
UNDER THIS MORTGAGE, AND (II) IF THE VALUE OF THE PROPERTY TO BE DISPOSED OF,
TOGETHER WITH THE VALUE OF ALL OTHER PROPERTY PREVIOUSLY DISPOSED OF DURING ANY
CALENDAR YEAR, WILL EXCEED FIVE THOUSAND DOLLARS ($5,000.00), SUCH DISPOSAL HAS
BEEN APPROVED IN WRITING BY MORTGAGEE.

     

     4.3
MORTGAGOR SHALL FURNISH TO MORTGAGEE FROM TIME TO TIME, IF AND AS REQUESTED,
CURRENT LISTS OF THE COLLATERAL AND SHALL ALLOW MORTGAGEE AND/OR ITS AGENTS,
DURING REGULAR BUSINESS HOURS, AS FREQUENTLY AS MORTGAGEE MAY REQUEST, TO
EXAMINE AND MAKE

     

    EXTRACTS
FROM ALL OF THE BOOKS AND RECORDS OF MORTGAGOR, TO EXAMINE AND VERIFY THE
COLLATERAL AND, WHEN REQUESTED BY MORTGAGEE FROM TIME TO TIME, TO FURNISH TO IT
COPIES OF ALL PURCHASE ORDERS, EQUIPMENT LISTS, INVENTORY LISTS, BILLINGS,
SHIPPING ORDERS, INVOICES, CORRESPONDENCE AND OTHER INSTRUMENTS OR WRITINGS IN
ANY WAY EVIDENCING OR RELATING TO THE COLLATERAL OR THE PROCEEDS
THEREOF.

     

    4.4 THE
COLLATERAL (AND/OR ALL BOOKS, RECORDS AND PAPERS RELATING TO AND/OR EVIDENCING
THE COLLATERAL) IS AND SHALL BE KEPT AT SUCH PLACE(S) AT THE PROPERTY WHERE
MORTGAGEE MAY INSPECT IT FROM TIME TO TIME. EXCEPT AS OTHERWISE PERMITTED
HEREIN, MORTGAGOR WILL NOT REMOVE (OR PERMIT THE REMOVAL OF) THE COLLATERAL (OR
SUCH BOOKS, RECORDS AND PAPERS) FROM SAID LOCATION WITHOUT THE PRIOR WRITTEN
CONSENT OF MORTGAGEE. AS TO ANY VEHICLES, SUCH MAY BE REMOVED IN THE ORDINARY
COURSE OF THE BUSINESS OF MORTGAGOR, PROVIDED THAT THE LOCATION OF THE PROPERTY
SHALL REMAIN THE “SITUS” OF THE VEHICLES, UNLESS OTHERWISE AGREED BY MORTGAGEE
IN WRITING. MORTGAGOR COVENANTS THAT THE COLLATERAL WILL NOT BE OR SUFFERED TO
BE WASTED, MISUSED, ABSUED, USED WITHOUT REASONABLE CARE AND CAUTION, USED OR
OPERATED BY PERSONS NOT PROPERLY LICENSED AND TRAINED, OR PERMITTED TO
DETERIORATE, AND WILL NOT BE USED IN VIOLATION OF ANY REQUIREMENT OF ANY
INSURANCE UNDERWRITER OR ANY LAW, ORDINANCE OR REGULATION OF ANY GOVERNMENTAL
AUTHORITY, PROVIDED, HOWEVER, THAT NEITHER THIS MORTGAGE, NOR ANY OTHER
AGREEMENT, SHALL BE DEEMED TO CREATE ANY OBLIGATION OR DUTY ON THE PART OF
MORTGAGEE, ENFORCEABLE BY MORTGAGOR OR ANY THIRD PARTY, TO SEE TO THE PROPER USE
OF THE COLLATERAL. MORTGAGOR SHALL MAINTAIN THE COLLATERAL IN FIRST CLASS
CONDITION AND REPAIR. MORTGAGOR SHALL PAY OR CAUSE TO BE PAID WHEN DUE ALL TAXES
AND ASSESSMENTS UPON OR WITH RESPECT TO THE COLLATERAL OR ITS OPERATION OR
USE.

     

    4.5
MORTGAGOR SHALL OBTAIN AND KEEP IN FULL FORCE, AT THE SOLE COST AND EXPENSE OF
MORTGAGOR, POLICIES OF INSURANCE COVERING THE RISKS AND PERILS AND IN THE FORM
AND AMOUNT SET FORTH ELSEWHERE IN THIS MORTGAGE.

     

    4.6
MORTGAGOR SHALL GIVE PROMPT WRITTEN NOTICE TO MORTGAGEE OF ANY CASUALTY TO OR
CLAIM ASSERTED IN CONNECTION WITH THE USE OF ALL OR ANY PART OF THE COLLATERAL.
WITH RESPECT TO ANY CASUALTY, MORTGAGOR HEREBY IRREVOCABLY APPOINTS MORTGAGEE
AND ANY OFFICER THEREOF AS ITS ATTORNEY-IN-FACT, WITH FULL POWER OF
SUBSTITUTION, TO SETTLE AND COMPROMISE CLAIMS OR BRING SUIT TO RECOVER UNDER
EACH SUCH INSURANCE POLICY, TO APPLY THE NET PROCEEDS THEREFROM, AFTER DEDUCTING
ALL COSTS OF COLLECTION, ALL
REASONABLE EXPENSES, INCLUDING REASONABLE ATTORNEYS’ FEES, WITH INTEREST THEREON
AT THE HIGHEST DEFAULT RATE SET FORTH IN THE NOTE FROM THE DATE OF DEMAND TO THE
DATE OF PAYMENT WHICH MORTGAGEE MAY INCUR IN CONNECTION WITH (I) THE PERFECTION
OF MORTGAGEE’S SECURITY INTEREST IN, THE CUSTODY AND PRESERVATION OF, OR THE
SALE OF, COLLECTION FROM, OR OTHER REALIZATION UPON, ANY OF THE COLLATERAL, (II)
THE EXERCISE OR ENFORCEMENT OF ANY OF THE RIGHTS OF SUCH MORTGAGEE HEREUNDER OR
(III) THE FAILURE BY MORTGAGOR TO PERFORM OR OBSERVE ANY OF THE PROVISIONS
HEREOF.

     

     

    
      
        
        

      

      
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     4.11
MORTGAGOR HEREBY AGREES AND SHALL INDEMNIFY MORTGAGEE, ITS OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS FOR AND HOLD MORTGAGEE, ITS OFFICERS, DIRECTORS, EMPLOYEES,
AND AGENTS HARMLESS FROM AND AGAINST ANY LOSS SUFFERED OR ANY LIABILITY, COST,
OR EXPENSE, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES, INCURRED
BY MORTGAGEE, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS ON ACCOUNT OF ANY
DAMAGE TO THE PERSON OR PROPERTY OF THE PARTIES HERETO OR OF ANY THIRD PARTIES
BY REASON OF OR IN CONNECTION WITH THE CONSTRUCTION, REHABILITATION, USE,
OPERATION, MAINTENANCE, REPAIR, OR MANAGEMENT OF THE COLLATERAL. MORTGAGOR SHALL
UNDERTAKE, AT ITS SOLE EXPENSE AND THROUGH COUNSEL SATISFACTORY TO MORTGAGEE,
THE DEFENSE OF MORTGAGEE, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS, IN ANY
LAWSUIT COMMENCED AS THE RESULT, OR ALLEGED TO BE THE RESULT, OF INQUIRY OR
DAMAGE OCCURRING BY REASON OF OR IN CONNECTION WITH THE USE, OPERATION,
MAINTENANCE, REPAIR OR MANAGEMENT OF THE COLLATERAL.

     

     5.
REMEDIES WITH RESPECT
TO THE COLLATERAL. UPON THE HAPPENING OF ANY EVENT OF DEFAULT UNDER THIS
MORTGAGE, MORTGAGEE SHALL HAVE THE RIGHTS AND REMEDIES OF A SECURED PARTY UNDER
THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE STATE OF KENTUCKY AND ANY AND
ALL OTHER RIGHTS AVAILABLE TO MORTGAGEE AT LAW OR IN EQUITY OR PURSUANT TO THE
TERMS OF THIS MORTGAGE OR ANY OF THE LOAN DOCUMENTS. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, MORTGAGEE MAY UPON THE HAPPENING OF ANY EVENT OF
DEFAULT, EXERCISE THE FOLLOWING RIGHTS AND REMEDIES:

     

     5.1
MORTGAGEE MAY RECEIVE PAYMENT OF, ENDORSE, AND DEPOSIT ANY AND ALL MONIES,
CHECKS, DRAFTS, PROMISSORY NOTES, CLAIMS AND OTHER AMOUNTS DUE AND TO BECOME DUE
AT ANY TIME IN RESPECT OF OR ARISING OUT OF THE COLLATERAL. MORTGAGEE AT ANY
TIME WITHOUT NOTICE TO MORTGAGOR MAY NOTIFY ANY PERSONS WHO ARE INDEBTED TO
MORTGAGOR WITH RESPECT TO THE COLLATERAL, AND MAY DIRECT SUCH PERSONS TO MAKE
PAYMENT DIRECTLY TO MORTGAGEE OF THE AMOUNTS DUE. MORTGAGOR AGREES ANY PERSON
RECEIVING ANY SUCH NOTICE MAY RELY
FULLY ON THE SAME AND TO RELEASE, HOLD HARMLESS AND PROTECT SUCH PERSONS IN
MAKING SUCH PAYMENTS ON RELIANCE THEREON.

     

    5.2
MORTGAGEE MAY COMMENCE AND PROSECUTE ANY SUITS, ACTIONS OR PROCEEDING AT LAW OR
IN EQUITY IN ANY COURT OF COMPETENT JURISDICTION TO COLLECT ANY OF THE
COLLATERAL AND TO ENFORCE ANY OTHER RIGHT IN RESPECT OF THE
COLLATERAL.

     

    5.3
MORTGAGEE MAY SETTLE, COMPROMISE OR ADJUST ANY SUIT, ACTION OR PROCEEDING
DESCRIBED ABOVE, AND, IN CONNECTION THEREWITH, GIVE SUCH DISCHARGES OR RELEASES
AS MORTGAGEE MAY DEEM APPROPRIATE.

     

    5.4
MORTGAGEE MAY, GENERALLY, UPON SUCH TERMS AND CONDITIONS AS IT MAY DEEM
NECESSARY OR APPROPRIATE, SELL, TRANSFER, PLEDGE, LEASE, EXCHANGE, ASSIGN,
COLLECT, SETTLE, ADJUST, COMPROMISE, MAKE ANY AGREEMENT WITH RESPECT TO OR
OTHERWISE DEAL WITH ANY OF THE COLLATERAL AS FULLY AND COMPLETELY AS THOUGH
MORTGAGEE WERE THE ABSOLUTE OWNER THEREOF FOR ALL PURPOSES, AND TO DO, AT
MORTGAGEE’S OPTION, AT ANY TIME, OR FROM TIME TO TIME, ALL ACTS AND THINGS WHICH
MORTGAGEE DEEMS NECESSARY OR APPROPRIATE TO PROTECT OR PRESERVE THE COLLATERAL
AND TO CREATE, PERFECT, PROTECT AND PRESERVE MORTGAGEE’S SECURITY INTEREST AND
RIGHTS THEREIN, AND TO COLLECT AND REALIZE THEREUPON, IN ORDER TO EFFECT THE
INTENT OF THIS MORTGAGE, ALL AS FULLY AND EFFECTIVELY AS MORTGAGOR MIGHT
DO.

     

    5.5
DELETED.

     

    5.6 FOR
PURPOSES OF FACILITATING ENFORCEMENT OF THE REMEDIES PROVIDED IN THIS MORTGAGE,
MORTGAGOR HEREBY CONSTITUTES AND APPOINTS MORTGAGEE AND ANY OFFICER THEREOF,
WITH FULL POWER OF SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH
FULL POWER AND AUTHORITY IN THE PLACE AND STEAD OF MORTGAGOR OR IN ITS NAME, TO
TAKE ANY AND ALL ACTION AND TO EXECUTE ANY AND ALL DOCUMENTS AND INSTRUMENTS
WHICH IT MAY DEEM NECESSARY OR APPROPRIATE TO ACCOMPLISH THE PURPOSES OF THIS
MORTGAGE WITH RESPECT TO THE COLLATERAL AND, WITHOUT LIMITING THE GENERALITY OF
THE FOREGOING, MORTGAGOR HEREBY GIVES MORTGAGEE THE POWER AND RIGHT, ON BEHALF
OF MORTGAGOR AND WITHOUT NOTICE TO OR ASSENT BY MORTGAGOR, TO DO THE THINGS
PROVIDED IN THIS MORTGAGE, INCLUDING WITHOUT LIMITATION, THIS SECTION 5.
MORTGAGOR HEREBY RATIFIES ALL THAT SAID ATTORNEYS SHALL LAWFULLY DO OR CAUSE TO
BE DONE BY VIRTUE HEREOF. THE POWERS CONFERRED UPON MORTGAGEE UNDER THIS
MORTGAGE ARE INTENDED TO PERMIT MORTGAGEE TO PROTECT AND REALIZE UPON ITS
INTERESTS IN THE COLLATERAL AND WILL NOT IMPOSE ANY DUTY UPON IT TO EXERCISE ANY
SUCH POWERS. MORTGAGEE WILL BE ANY
AFFILIATE OF MORTGAGEE TO THE PAYMENT OF THE OBLIGATIONS SECURED
HEREBY.

     

     5.12
UPON THE FILING OF A SUIT OR OTHER COMMENCEMENT OF JUDICIAL PROCEEDINGS TO
ENFORCE THE RIGHTS OF MORTGAGEE UNDER THIS MORTGAGE, MORTGAGEE SHALL BE
ENTITLED, AS A MATTER OF RIGHT AND WITHOUT NOTICE TO MORTGAGOR, TO THE
APPOINTMENT OF A RECEIVER OR RECEIVERS OF THE COLLATERAL AND ALL RECEIPTS
THEREFROM, PENDING SUCH PROCEEDINGS, WITH SUCH POWER AS THE COURT MAKING SUCH
APPOINTMENT SHALL CONFER; PROVIDED, HOWEVER, THAT MORTGAGEE MAY, WITH OR WITHOUT
ACTION UNDER THIS SECTION, PURSUE ANY AVAILABLE REMEDY TO ENFORCE THE PAYMENT OF
PRINCIPAL AND INTEREST ON THE NOTE OR TO REMEDY ANY EVENT OF DEFAULT. MORTGAGOR
SHALL PAY MORTGAGEE A REASONABLE SERVICE CHARGE, TOGETHER WITH SUCH TITLE
INSURANCE PREMIUMS AND ATTORNEY’S FEES AS MAY BE INCURRED AT MORTGAGEE’S OPTION
FOR ANY SUCH ACTION.

     

    6.MISCELLANEOUS.

     

     6.1
NO WAIVERS.
NEITHER THE EXERCISE BY MORTGAGEE OF ANY RIGHT OR REMEDY HEREIN GIVEN OR
RESERVED, NOR DELAY OR FAILURE BY MORTGAGEE TO EXERCISE ANY SUCH RIGHT OR
REMEDY, IN CASE OF ONE OR MORE DEFAULTS, SHALL CONSTITUTE A WAIVER THEREOF, OR
ESTOP MORTGAGEE THEREAFTER FROM EXERCISING THE SAME OR ANY OTHER RIGHT OR REMEDY
AT ANY TIME IN RESPECT TO THE SAME OR ANY SUBSEQUENT DEFAULT OR DEFAULTS. ALL
SUCH RIGHTS AND REMEDIES SHALL BE CUMULATIVE AND NONE SHALL BE EXCLUSIVE OF THE
OTHER OR OTHERS OR OF ANY RIGHT OR REMEDY NOW OR HEREAFTER GIVEN OR ALLOWED BY
LAW.

     

     

    
      
        
        

      

      
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     6.2
BINDING EFFECT.
ALL THE TERMS, COVENANTS AND CONDITIONS OF THIS MORTGAGE SHALL BIND
MORTGAGOR, ITS HEIRS, SUCCESSORS AND ASSIGNS AND SHALL INURE TO THE BENEFIT OF
AND BE AVAILABLE TO MORTGAGEE, ITS SUCCESSORS AND ASSIGNS.

     

     6.3
INTERPRETATION; TIME
OF THE ESSENCE. ALL REFERENCES TO MORTGAGOR AND MORTGAGEE SHALL BE READ
IN THE SINGULAR OR PLURAL, AND IN THE MASCULINE, FEMININE OR NEUTER GENDER, AS
THE SENSE MAY REQUIRE.
TIME IS OF THE ESSENCE WITH RESPECT TO EACH AND EVERY OBLIGATION OF MORTGAGOR
UNDER THE NOTE, THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS. NO PRESUMPTION SHALL
BE DEEMED TO EXIST IN FAVOR OF OR AGAINST ANY PARTY AS A RESULT OF THE
NEGOTIATION AND/OR PREPARATION OF THIS DOCUMENT AND NO INFERENCE OR COVENANT
SHALL BE IMPLIED AS AGAINST ANY PARTY, THE FULL CONTRACTUAL OBLIGATIONS AND
COVENANTS OF EACH PARTY BEING HEREIN FULLY SET FORTH AND EXPRESSED.

     

    6.4 GOVERNING LAW; SEVERABILITY.
THIS MORTGAGE SHALL BE GOVERNED BY THE LAWS OF THE STATE IN WHICH THE
PROPERTY IS LOCATED. IN THE EVENT THAT ANY PROVISION OF THIS MORTGAGE CONFLICTS
WITH APPLICABLE LAW, SUCH CONFLICT SHALL NOT AFFECT OTHER PROVISIONS OF THIS
MORTGAGE WHICH CAN BE GIVEN EFFECT WITHOUT THE CONFLICTING PROVISIONS, AND TO
THIS END THE PROVISIONS OF THIS MORTGAGE ARE DECLARED TO BE SEVERABLE. THE
PARTIES INTEND THAT THIS MORTGAGE SHALL BE IN HARMONY WITH ALL OTHER LOAN
DOCUMENTS.

     

    6.5 ESTOPPEL CERTIFICATE.
MORTGAGOR SHALL, WITHIN TEN DAYS OF A WRITTEN REQUEST FROM MORTGAGEE,
FURNISH MORTGAGEE WITH A WRITTEN STATEMENT, DULY ACKNOWLEDGED, SETTING FORTH THE
SUMS SECURED BY THIS MORTGAGE AND SUCH OTHER INFORMATION AS MORTGAGEE MAY
REASONABLY REQUEST.

     

    6.6 MORTGAGEE’S RIGHTS.
FROM TIME TO TIME, MORTGAGEE MAY, AT MORTGAGEE’S OPTION IN ITS SOLE
DISCRETION, WITHOUT GIVING NOTICE TO OR OBTAINING THE CONSENT OF MORTGAGOR, OF
MORTGAGOR’S SUCCESSORS OR ASSIGNS OR OF ANY JUNIOR LIENHOLDER OR GUARANTOR,
WITHOUT LIABILITY ON MORTGAGEE’S PART AND NOTWITHSTANDING MORTGAGOR’S BREACH OF
ANY COVENANT OR AGREEMENT OF MORTGAGOR IN THIS MORTGAGE, EXTEND THE TIME FOR
PAYMENT OF THE INDEBTEDNESS SECURED HEREBY OR ANY PART THEREOF, REDUCE THE
PAYMENTS THEREON, RELEASE ANYONE LIABLE ON ANY OF SAID INDEBTEDNESS, ACCEPT A
RENEWAL NOTE OR NOTES THEREFORE, MODIFY THE TERMS AND TIME OF PAYMENT OF SAID
INDEBTEDNESS, RELEASE FROM THE LIEN OF THIS MORTGAGE ANY PART OF THE PROPERTY,
TAKE OR RELEASE OTHER OR ADDITIONAL SECURITY, RECONVEY ANY PART OF THE PROPERTY,
CONSENT TO ANY MAP OR PLAN OF THE PROPERTY, CONSENT TO THE GRANTING OF ANY
EASEMENT, JOIN IN ANY EXTENSION OR SUBORDINATION AGREEMENT, AGREE IN WRITING
WITH MORTGAGOR TO MODIFY THE RATE OF INTEREST, MATURITY, AMORTIZATION, OR OTHER
TERMS OF THE NTOE, OR CHANGE THE AMOUNT OF THE MONTHLY INSTALLMENTS PAYABLE
THEREUNDER. ANY ACTIONS TAKEN BY MORTGAGEE PURSUANT TO THE TERMS OF THIS SECTION
SHALL NOT AFFECT THE OBLIGATION OF MORTGAGOR OR MORTGAGOR’S SUCCESSORS OR
ASSIGNS TO PAY THE SUMS SECURED BY THIS MORTGAGE AND TO OBSERVE THE COVENANTS OF
MORTGAGOR CONTAINED HEREIN, SHALL NOT AFFECT THE GUARANTEE OF ANY PERSON,
CORPORATION, PARTNERSHIP OR OTHER ENTITY FOR PAYMENT OF THE INDEBTEDNESS SECURED
HEREBY, AND SHALL NOT AFFECT THE LIEN OR PRIORITY OF THE LIEN HEREOF ON THE
PROPERTY. MORTGAGOR SHALL PAY MORTGAGEE A REASONABLE SERVICE CHARGE, TOGETHER
WITH SUCH TITLE INSURANCE PREMIUMS AND ATTORNEY’S FEES AS MAY BE INCURRED AT
MORTGAGEE’S OPTION FOR ANY SUCH ACTION.

     

    6.7 AMENDMENTS IN WRITING.
NO CHANGE, AMENDMENT, OR MODIFICATION HEREOF, OR ANY PART HEREOF, SHALL
BE VALID UNLESS IN

    WRITING
AND SIGNED BY THE PARTIES HERETO OR THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS.

     

    6.8 HEADINGS. THE
HEADINGS TO THE ARTICLES AND SECTIONS OF THIS MORTGAGE ARE FOR REFERENCE ONLY
AND DO NOT LIMIT IN ANY WAY THE CONTENT THEREOF.

     

     

    
      
        
        

      

      
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    6.9 NOTICES. MORTGAGOR
SHALL NOTIFY MORTGAGEE PROMPTLY IN WRITING OF THE OCCURRENCE OF ANY OF THE
FOLLOWING:

     

    (A) A FIRE OR
OTHER CASUALTY CAUSING DAMAGE TO THE PROPERTY;

     

    (B) RECEIPT
OF NOTICE OF CONDEMNATION OF THE PROPERTY OR ANY PART THEREOF;

     

    (C) RECEIPT
OF NOTICE FROM ANY GOVERNMENTAL AUTHORITY RELATING TO THE STRUCTURE, USE OR
OCCUPANCY OF THE PROPERTY;

     

    (D) RECEIPT
OF ANY NOTICE OF ALLEGED DEFAULT FROM ANY LESSEE OR FROM THE HOLDER OF ANY OTHER
LIEN OR SECUIRTY INTEREST IN THE PROPERTY;

     

    (E) THE
COMMENCEMENT OF ANY LITIGATION AFFECTING THE PROPERTY;

     

    (F) RECEIPT
OF ANY NOTICE OF THE FILING OF ANY LIEN AFFECTING THE PROPERTY;

     

    (G) RECEIPT
OF ANY NOTICE OF ANY CHANGE OR PROPOSED CHANGE IN THE ZONING AFFECTING THE
PROPERTY; AND

     

    (H) ANY
DEFAULT BY MORTGAGOR OR ANY GUARANTOR UNDER THE TERMS OF THE NOTE, THIS
MORTGAGE, OR ANY OF THE OTHER LOAN DOCUMENTS.

     

    6.10
ADDITIONAL ASSURANCES.
MORTGAGOR AGREES TO PROMPTLY EXECUTE AND DELIVER SUCH FURTHER INSTRUMENTS
AND ASSURANCES, AND WILL DO SUCH FURTHER ACTS, AS MORTGAGEE MAY REASONABLY
REQUEST TO PERFECT THE LIEN AND SECURITY INTEREST OF MORTGAGEE IN ALL OR ANY
PORTION OF THE PROPERTY AND/OR TO MORE EFFECTIVELY CARRY OUT THE PURPOSES OF THE
NOTE, THIS MORTGAGE AND/OR OTHER LOAN DOCUMENTS.

     

    6.11
OBLIGATIONS
UNCONDITIONAL. THE OBLIGATIONS OF MORTGAGOR TO MAKE PAYMENTS OF ANY AND
ALL AMOUNTS DUE HEREUNDER SHALL BE ABSOLUTE AND UNCONDITIONAL WITHOUT DEFENSE OR
SET-OFF BY REASON OF ANY DEFAULT WHATSOEVER, INCLUDING, WITHOUT LIMITATION
A DEFAULT BY ANY TENANT OF THE PROPERTY UNDER ANY LEASE WITH MORTGAGOR OR UNDER
ANY OTHER AGREEMENT OR INSTRUMENT BETWEEN MORTGAGEE AND MORTGAGOR, AND SUCH
PAYMENTS TO MORTGAGEE SHALL NOT BE DECREASED, ABATED, POSTPONED OR DELAYED FOR
ANY REASON WHATSOEVER, INCLUDING WITHOUT LIMITATION, ANY ACTS OR CIRCUMSTANCES
THAT MAY CONSTITUTE FAILURE OF CONSIDERATION, DESTRUCTION OF OR DAMAGE TO THE
PROPERTY, THE TAKING OF ANY PART OF THE PROPERTY, COMMERCIAL FRUSTRATION OF
PURPOSE, FAILURE OF ANY PERSON TO PERFORM OR OBSERVE ANY AGREEMENT, WHETHER
EXPRESSED OR IMPLIED, OR ANY DUTY, LIABILITY OR OBLIGATION ARISING OUT OF OR
CONNECTED WITH THIS MORTGAGE, THE NOTE, OR ANY OF THE OTHER LOAN DOCUMENTS, OR
FAILURE OF ANY TENANT OF THE PROPERTY TO PAY THE FEES, RENTALS OR OTHER CHARGES
OWED TO MORTGAGOR, AND IRRESPECTIVE OF WHETHER OR NOT ANY SUCH TENANT OF THE
PROPERTY RECEIVES EITHER PARTIAL OR TOTAL REIMBURSEMENT AS A CREDIT AGAINST SUCH
PAYMENT, IT BEING THE INTENTION OF THE PARTIES THAT THE PAYMENTS REQUIRED OF
MORTGAGOR HEREUNDER WILL BE PAID IN FULL WHEN DUE WITHOUT ANY DELAY OR
DIMINUTION WHATSOEVER. THE OBLIGATIONS OF MORTGAGOR UNDER THIS MORTGAGE SHALL BE
THE JOINT AND SEVERAL OBLIGATIONS OF ALL PARTIES IDENTIFIED AS MORTGAGOR, EACH
AS A PRIMARY OBLIGOR.

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

     

    6.12
GENERAL WAIVERS BY
MORTGAGOR.  MORTGAGOR HEREBY

     

    WAIVES
AND RELEASES, TO THE EXTENT PERMITTED BY LAW:

     

    (A) ALL
ERRORS, DEFECTS AND IMPERFECTIONS IN ANY PROCEEDING INSTITUTED BY MORTGAGEE
UNDER THE NOTE, THIS MORTGAGE, AND/OR ANY OF THE LOAN DOCUMENTS;

     

    (B) ALL
BENEFIT THAT MIGHT ACCRUE TO MORTGAGOR BY VIRTUE OF ANY PRESENT OR FUTURE LAW
EXEMPTING THE PROPERTY, OR ANY PART OF THE PROCEEDS ARISING FROM ANY SALE
THEREOF, FROM ATTACHMENT, LEVY OR SALE ON EXECUTION, OR PROVIDING FOR ANY STAY
OF EXECUTION, EXEMPTION FROM CIVIL PROCESS OR EXTENSION OF TIME FOR
PAYMENT;

     

    (C) ANY
APPRAISEMENT, VALUATION, STAY, EXTENSION OR REDEMPTION OR USURY LAW NOW OR
HEREAFTER IN FORCE; AND

     

    (D) UNLESS
SPECIFICALLY REQUIRED HEREIN, ALL NOTICES OF MORTGAGOR’S DEFAULT OR OF
MORTGAGEE’S ELECTION TO EXERCISE, OR MORTGAGEE’S EXERCISE, OF ANY OPTION OR
RIGHT UNDER THE NOTE, THIS MORTGAGE AND/OR ANY OF THE LOAN
DOCUMENTS.

     

    6.13
MORTGAGEE’S
NON-RESPONSIBILITY. MORTGAGOR HEREBY ACKNOWLEDGES AND AGREES THAT THE
UNDERTAKING OF MORTGAGEE UNDER THIS MORTGAGE IS LIMITED AS FOLLOWS:

     

     

     

     

     

     

     

     

     

     

     

     

    19ex49.htm

    Exhibit
4.9

     

     

    THIRD
PARTY

    DEED
OF TRUST, ASSIGNMENT AND SECURITY AGREEMENT

     

    THIS
THIRD PARTY DEED OF TRUST, ASSIGNMENT AND SECURITY AGREEMENT
(“Deed of Trust”), dated as of                      
, 2008, among LEE OIL
COMPANY, INC., a Virginia
corporation (“Grantor”),                                                                 
(“Trustee”),
and CHOICE FINANCIAL GROUP,
a North Dakota state bank (“Beneficiary”), recites and
provides:

     

    WHEREAS,
Grantor is the owner of fee simple title to certain real estate (including all
improvements thereon and all easements and other real property rights belonging
thereto) located in the Commonwealth of Virginia (the “Premises”), and more
particularly described on Exhibit A attached hereto.

     

    WHEREAS,
Heartland, Inc., a Maryland corporation (“Borrower”) is the maker of a certain
Promissory Note of even date herewith (the “Note”), payable to the order of
Beneficiary, evidencing a loan (the “Loan”) in the principal amount of
$3,250,000.00, with interest and payable as stated therein. The Note is made
pursuant to a Loan Agreement of even date herewith (the “Loan Agreement”),
between Borrower and Beneficiary and is secured by, among other things, this
Deed of Trust and a security agreement of even date herewith (the “Security
Agreement”), between Grantor and Beneficiary, and financing statements naming
Grantor, as debtor and Beneficiary, as secured party (the “Financing
Statements”). The Note is also secured by a Guaranty of even date herewith (the
“Guaranty”). The Loan Agreement, the Note, this Deed of Trust, the Guaranty, the
Security Agreement, the Financing Statements and all other documents and
instruments evidencing and securing the indebtedness evidenced by the Note are
sometimes hereinafter referred to collectively as the “Loan
Documents.”

     

    WHEREAS,
the Loan is also secured by a lien on certain real property owned by Grantor and
located in the Commonwealth of Virginia.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    THIRD
PARTY

    DEED OF TRUST, ASSIGNMENT
AND SECURITY AGREEMENT:

     

    For and
in consideration of Beneficiary making the Loan to Borrower, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, this Deed of Trust provides as follows:

     

    1.             GRANTING OF LIEN.
Grantor hereby grants and conveys the Premises to the Trustee, with
general warranty of title but subject to all easements, conditions and
restrictions of record insofar as they may lawfully affect the Premises as
listed in Exhibit B attached hereto (the “Permitted Encumbrances”).

     

    TOGETHER
WITH (i) all improvements now or hereafter erected on the Premises (the
“Improvements”); (ii) all carpeting, drapes, curtains, furnishings, appliances,
furniture, floor covering, maintenance equipment, cleaning equipment,
construction materials, fences, dynamos, partitions, lighting, heating,
ventilating, air-conditioning, air and water cooling equipment, sprinkling and
plumbing fixtures, water and power systems, engines and machinery, boilers,
water heaters, stoves, ranges, ovens, dishwashers, all kitchen equipment,
utensils, dishes, mirrors and mantels, furnaces, oil burners, elevators and
motors, refrigerators, refrigeration plants or units, communications systems,
transformers, electrical equipment, doors, storm and screen doors and windows,
awnings and shades, parking lot lighting, trees, bushes and shrubs, and other
equipment or fixtures owned by Grantor for location upon and use in the
operation of the Improvements on the Premises of every description now owned or
hereafter acquired; (iii) all additions, accessions, increases, parts, fittings,
accessories, replacements, substitutions, betterments, repairs and proceeds of
or to any or all of the foregoing; (iv) all rights, privileges, hereditaments,
easements, appurtenances, rents, insurance and condemnation proceeds, issues,
profits, royalties and mineral, oil and gas rights now and hereafter in any way
belonging or pertaining to the Premises or any Improvement thereon; (v) all of
Grantor’s right, title and interest in and to any lease contract covering
equipment or furnishings, or both, found in or about or appurtenant to, or used
in connection with the use, operation or maintenance of, the Land or any
building, structure or Improvement located thereon; and (vi) specifically
excluding any trade fixtures owned by tenants, if any, of Grantor.

     

    IN TRUST
to secure the payment of the Note, together with any and all renewals,
replacements, extensions, substitutions, modifications and consolidations
thereof, and the payment of all sums under and, the performance of the covenants
contained in, the Loan Documents and any modifications of the Loan
Documents.

     

    2.             ASSIGNMENT.

     

    (a) Leases. To further
secure payment of the Note and the performance by Borrower and Grantor of its
other obligations under the Loan Documents and hereunder, Grantor hereby
assigns, transfers and sets over to Beneficiary all leases and other contracts
(the “Leases”) of or relating to the Premises, whether now existing or hereafter
entered into and all rents, income, revenue, issues and profits (the “Rents and
Profits”) now or
hereafter arising from the Premises; provided however, that until the occurrence
of an “Event of Default” (as hereinafter defined) and the election of
Beneficiary to collect the Rents and Profits after such Event of Default,
Grantor shall have a license (revocable by Beneficiary upon the occurrence of an
Event of Default) to collect and dispose of the Rents and Profits without
restriction, and provided further that this assignment shall not impose on
Trustee or Beneficiary any of Grantor’s obligations under such Leases and
contracts.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (b) Contracts. To further
secure payment of the Note and the performance by Borrower and Grantor of its
other obligations under the Loan Documents and hereunder, Grantor further
assigns all insurance policies, contracts, permits, licenses or plans now or
hereafter pertaining to, affecting or concerning the Premises including, without
limitation, all rights accruing to Grantor from any and all contracts with all
contractors, architects, engineers, managers, subcontractors or others relating
to the design, development, construction, use, enjoyment, occupancy or operation
of the improvements on or upon the Premises, including performance and
materialmen’s bonds and any other related items.

     

    Notwithstanding
the provisions of Paragraph 2(b), Grantor assigns no policies, contracts,
permits, licenses or plans that, as a matter of law, are not transferable or
assignable.

     

    3.             SECURITY AGREEMENT.
This Deed of Trust shall serve as a security agreement in accordance with
the applicable provisions of the Uniform Commercial Code as adopted by the
Commonwealth of Virginia (the “UCC”). As to all personalty granted under this
Deed of Trust, Beneficiary shall have all of the rights and remedies of a
secured party under the UCC. The recordation of this Deed of Trust shall also
constitute a fixture filing in accordance with the applicable provisions of the
UCC.

     

    4.             REPRESENTATIONS, WARRANTIES
AND COVENANTS. Grantor makes the following representations, warranties
and covenants (and acknowledges that Beneficiary has relied upon those
representations, warranties and covenants in making the Loan):

     

    (a)           Deleted.

     

    (b)           Deleted.

     

    (c)           Deleted.

     

    (d)          
Secondary Financing
Prohibited. Grantor shall not pledge, mortgage or encumber the Premises,
or any part thereof or any interest therein, without the prior written consent
of the Beneficiary.

     

    (e)           Transfer of Premises or
Interest in Grantor Prohibited. Grantor shall not sell, convey, transfer,
assign or permit any sale, conveyance, transfer or assignment of the Premises or
any part thereof or interest therein, by operation of law or otherwise, without
the prior written consent of Beneficiary.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (f)            Leases. Grantor
represents and warrants that Grantor shall duly and punctually perform all of
the terms, conditions and covenants contained in the Leases to be kept, observed
and performed by Grantor; that Grantor shall not sell, assign, transfer,
mortgage or pledge any of the Rents and Profits, except as set forth in this
Deed of Trust; and that no Rents or Profits becoming due subsequent to the date
hereof have been collected, nor has payment of any of the same been anticipated,
waived, released, discounted or otherwise discharged or compromised. Grantor
agrees to act in good faith to enforce or secure the performance of each and
every obligation, covenant, condition and agreement to be performed by the
tenants under the Leases. Grantor shall not, except with the prior written
consent of Beneficiary, cancel, terminate or accept any surrender of the Leases;
accept any prepayments for more than 30 days of installments of rent under any
of the Leases; modify any of the terms, covenants and conditions of any of the
Leases so as to reduce the terms thereof or the rental payments thereunder;
enter into any new Leases of the Premises or any part thereof or change any
renewal privileges contained in any of the Leases; agree in writing or otherwise
to extinguish or limit any rights which it has under applicable law as a
landlord against any tenant under any of the Leases. Notwithstanding the
provisions of this paragraph 4(f), Grantor may enter into new Leases in the
ordinary course of business for such portions of the Premises which are leased
as of the date hereof provided such Leases are on terms and conditions that are
customary and usual in leases of similar premises in the general vicinity of the
affected portion of the Premises, and may, in accordance with sound business
practices and for the purpose of increasing Grantor’s revenues, terminate
(provided such termination is permitted under the terms of the applicable lease)
or modify any of the Leases.

     

    (g)           Good Condition.
Grantor shall maintain the Premises and all other property (real or
personal) subject to this Deed of Trust in good condition and repair and shall
keep the appearance of the Premises attractive. Grantor shall not materially
alter or demolish any building or other improvements on the Premises or any part
thereof without the prior written consent of Beneficiary, in its sole
discretion, and shall not commit or suffer any waste to the Premises or any part
thereof and shall comply with all statutes, ordinances and requirements of any
governmental authority relating to the Premises or any part thereof, or the
Grantor’s operations thereon. Beneficiary may, at any time, cause an inspection
to be made of the Premises or any part thereof by its representatives, and such
representatives shall be permitted reasonable access to the Premises and every
part thereof. If any such inspection shows the reasonable need of restoration,
repairs or maintenance and the Beneficiary makes demand therefor, the Grantor
shall proceed within 10 days after such demand has been made to effect such
restoration, repairs and maintenance and shall expeditiously complete the same
in a good and workmanlike manner to the satisfaction of the Beneficiary, free
and clear of all mechanics’ and materialmen’ s liens.

     

    (h)           Insurance. Grantor
shall maintain all risk insurance, public liability and indemnity insurance,
hazard insurance, business interruption insurance and insurance against such
other hazards as Beneficiary may require, in its sole discretion, naming
Beneficiary as an additional insured, in amounts, with insurers and under forms
of policies
(including standard noncontributing mortgagee clause unless otherwise required)
satisfactory to the Beneficiary, in its sole discretion; shall deliver all such
policies and, at least 30 days prior to their expiration dates, all renewals
thereof to Beneficiary; and shall pay all premiums thereon. All such policies
shall provide for 30 days’ written notice to Beneficiary prior to cancellation.
Upon request by Beneficiary, if not paid by Borrower, Grantor shall pay to
Beneficiary, in addition to all other amounts payable hereunder and under the
Note, on the first day of each month, an amount equal to one-twelfth of the
annual premiums for such insurance to be held by Beneficiary in a non-interest
bearing account for the payment of such premiums. Grantor shall not permit any
condition to exist on the Premises which would wholly or partially invalidate
the insurance thereon. Beneficiary may on behalf of Grantor adjust and
compromise any claims under such insurance and collect and receive proceeds
thereof and is hereby irrevocably appointed attorney-in-fact for Grantor for
such purposes. All Grantor’s rights, title and interest in and to all such
policies are hereby assigned to Beneficiary, including unearned premiums on such
policies. All proceeds from all insurance policies are absolutely assigned to
Beneficiary and shall be made payable and delivered to Beneficiary for payment
of any amounts owed by Borrower or Grantor to Beneficiary under any of the Loan
Documents. Beneficiary shall not be obligated to see to the proper application
of any amount paid over to Grantor and shall not be held responsible for any
failure to collect any insurance proceeds due under the terms of any policy,
regardless of the cause of such failure.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (i)             Liens. Grantor shall
keep the Premises free from liens which may have priority over the lien of this
Deed of Trust, except liens for taxes not yet due and payable. Grantor shall pay
all taxes and assessments levied against or which constitute liens on the
Premises when they are due, but Grantor may appropriately and in good faith
contest the levy of any such tax or assessment provided that it makes whatever
provision for the protection of the Premises, including the payment of such tax
or assessment, that Beneficiary may require. Receipts evidencing payment of any
real estate tax or assessment that, if unpaid, would be past due that would
constitute a lien or an inchoate lien on the Premises shall be delivered to the
Beneficiary within 10 days of the Beneficiary’s request therefor. Upon request
by Beneficiary, if not paid by Borrower, Grantor shall pay to Beneficiary, in
addition to all other amounts payable hereunder and under the Note, on the first
day of each month, an amount equal to one-twelfth of the annual real estate
taxes on the Premises to be held by Beneficiary in a non-interest bearing
account for the payment of such taxes.

     

    (j)             Books and Records.
Grantor shall maintain full and correct books and records in accordance
with generally accepted accounting principles showing in detail the earnings and
expenses relating to the Premises and each part thereof and shall permit
representatives of Beneficiary to examine such books and records and all
supporting vouchers and data at any time and from time to time as Beneficiary
may reasonably request at the affected portion of the Premises or at such other
place in the vicinity of the affected portion of the Premises as such books and
records are customarily kept.

     

    (k)            Condemnation. In the
event that any proceedings to take the Premises or any part
thereof by exercise of the power of eminent domain are undertaken or threatened,
Grantor shall give Beneficiary prompt notice thereof. Any award made to Grantor
shall be paid to Beneficiary, and Grantor hereby appoints Beneficiary its
attorney-in-fact to receive and give all appropriate discharges for any such
award. Any such award may, at the option of Beneficiary, be (i) applied to (A)
the prepayment of the principal of the Note in inverse order of maturity of any
installments thereof or (B) the payment of accrued interest, if any, and other
costs under the Loan Documents, or (ii) released to Grantor in whole or in part
upon conditions satisfactory to Beneficiary, in its sole discretion. Grantor
hereby assigns all of Grantor’s rights, title and interest in and to all such
awards to Beneficiary.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (l) Indemnity. Grantor
shall protect, defend, indemnify and save harmless Trustee and Beneficiary from
and against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including, without limitation, attorneys’ fees and
expenses) imposed upon or incurred by or asserted against Trustee or Beneficiary
by reason of (i) any failure on the part of Grantor to perform or comply with
any of the covenants or conditions of this Deed of Trust; or (ii) the
performance of any labor or services and furnishing of any materials or other
property with respect to the Premises or any part thereof; or (ii) any alleged
obligation or undertaking on Grantor’s part to perform or discharge any of the
terms, covenants and conditions contained in any of the Leases; or (iii) any
accident, injury to or death of persons or loss of or damage to property
occurring on or about the Premises or any part thereof. Any amounts payable to
Beneficiary under this paragraph which are not paid within 10 days after written
demand therefor by Beneficiary shall bear interest at the interest rate provided
in the Note. In the event any action, suit or proceeding is brought against
Trustee or at the request of Beneficiary by reason of any such occurrence,
Grantor, upon the request of Beneficiary, will at Grantor’s expense resist and
defend such action, suit or proceeding or will cause the same to be resisted and
defended by counsel designated by Grantor and approved by Beneficiary.
Grantor’s obligations to defend, indemnify and hold Beneficiary harmless
hereunder shall survive payment of the Loan, and all other amounts owed under
the Loan Documents and satisfaction or foreclosure of this Deed of
Trust.

     

    5.             
EVENT OF DEFAULT.
Each of the following shall be an event of default (an “Event of
Default”) hereunder:

     

    (a) If any
payment under the Note is not made on the due date and in the manner
specified therein.

     

    (b) If any
representation made by Grantor in this Deed of Trust is untrue in any material
respect, or if Grantor fails to comply with any warranty or covenant set forth
in this Deed of Trust, and such default continues for fifteen (15) days after
Beneficiary has given Grantor written notice thereof (or, if such default cannot
reasonably be cured within such 15-day period, then such longer period as is
required to cure the default, but in no event more than forty-five (45)
days).

     

    (c) If a
default occurs under any of the Loan Documents, after expiration of the
applicable cure period, if any.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
 

    6.            
REMEDIES.

     

    (a)             Acceleration; Possession;
Sale by Trustee. Upon the occurrence of an Event of Default, Beneficiary
may, at its option and without further notice (unless specifically required by
applicable law), declare the Note immediately due and payable and have Trustee
(or another person or entity designated by the Beneficiary) take possession of
the Premises or any part thereof and proceed to sell the Premises or any part
thereof, as a whole or in parcels, at public auction, for cash or credit and
upon such other terms Trustee shall deem appropriate. Before such sale at public
auction is made, there shall first be advertisement of the time, place and terms
of sale at least four times in some newspaper published or having a general
circulation in the County or City in which the Premises or any part thereof is
located, and there shall be given, at least fourteen (14) days prior to such
sale, written notice of the time, place and terms of sale by certified or
registered mail to the then owner of the Premises or any portion thereof at its
last known address, as such owner and address appear on the records of
Beneficiary. Beneficiary may become the purchaser of the property so sold and no
purchaser shall be required to see to the proper application of the purchase
money, except as otherwise provided in section 58.1-3340 of the Code of Virginia
(1950), as amended. The proceeds of any such sale shall be applied in accordance
with the provisions of Section 55-59.4 of the Code of Virginia (1950), as
amended.

     

    (b)             Surrender of the Premises;
Right to Operate. Upon any Event of Default, Trustee (or other person or
entity designated by the Beneficiary), at the request of Beneficiary, shall have
the absolute right to enter the Premises or any part thereof and take possession
thereof, and Grantor agrees to surrender the Premises or any part thereof
promptly upon demand. Trustee (or such other designee) shall have all rights
necessary to operate the Premises or any part thereof (either by themselves or
through agents appointed by them), including but not limited to the
following:

     

    (i) manage
and operate the Premises, or any part thereof;

     

    (ii) lease any
part or parts of the Premises for such periods of time, and upon such terms and
conditions as Trustee may, in their discretion, deem proper;

     

    (iii) enforce
any of the Leases;

     

    (iv) demand,
collect, sue for, attach, levy, recover, receive, compromise and adjust, and
make, execute and deliver receipts and releases for all Rents and Profits that
may then or may thereafter become due, owing or payable with respect to the
Premises, or any part thereof, from any present or future lessees, tenants,
subtenants or occupants thereof;

     

    (v)
institute, prosecute to completion or compromise and settle, all summary
proceedings and actions for rent or for removing any and all lessees, tenants,
subtenants or occupants of the Premises or any part or parts
thereof;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
 

    (vi) enforce
or enjoin or restrain the violation of any of the terms, provisions
and conditions of any of the Leases;

     

    (vii) make such
repairs and alterations to the Premises or any part thereof as Trustee (or such
other designee of the Beneficiary) may in their discretion, deem
proper;

     

    (viii) pay from
and out of the Rents and Profits collected or from or out of any other funds
except tenant’s security deposits under the Leases, insurance premiums and any
taxes, assessments, water rates, sewer rates, or other governmental charges
levied, assessed or imposed against the Premises, or any portion thereof, and
also any and all other charges, costs and expenses which it may deem necessary
or advisable for Trustee to pay in the management or operation of the Premises
or any part thereof including (without limiting the generality of any rights,
powers, privileges and authority hereinbefore or hereinafter conferred) the
costs of such repairs and alterations, commissions for renting the Premises, or
any portions thereof, and legal expenses in enforcing claims, preparing papers
or for any other services that may be required; and

     

    (ix) generally,
do, execute and perform any other act, deed, matter or thing whatsoever that
ought to be done, executed and performed in and about or with respect to the
Premises, or any part thereof, as fully as Grantor might do.

     

    (c)             Personal Property.
Upon any Event of Default in the performance of the covenants contained
herein, Beneficiary, pursuant to the UCC, shall have the option of proceeding as
to both real and personal property in accordance with its rights and remedies in
respect of the real estate. The parties agree that, in the event Beneficiary
elects to proceed with respect to personal property separately from the real
property, the requirement of the UCC as to reasonable notice of any proposed
sale or disposition of the personal property shall be met if such notice is
mailed to Grantor at least ten (10) days prior to the time of such sale or
disposition.

     

    (d)             Right to Cure. Upon
any Event of Default in the performance of the covenants contained herein,
Beneficiary shall have the right, but shall not be obligated, to enter the
Premises, or any part thereof, if necessary, and cure any default in regard to
the Premises, or any part thereof, and all costs thereof shall be secured by
this Deed of Trust and shall be paid, together with interest thereon at the
interest rate specified in the Note, by Grantor to the Beneficiary upon demand
therefor. The performance of any such covenant by Beneficiary, however, shall
not be deemed a waiver of default.

     

    (e)             Remedies Cumulative.
No right, power or remedy conferred upon or reserved to Beneficiary or
the Trustee by this Deed of Trust is intended to be exclusive of any other
right, power or remedy, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power and
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
 

    7.             TRUSTEE. All
reasonable expenses, charges, counsel fees and other disbursements incurred by
Trustee in and about the administration and execution of the trust hereby
created, and the performance of their duties and powers hereunder, shall be
secured by this Deed of Trust, and shall bear interest at the same interest rate
set forth in the Note. Trustee may exercise all the rights and powers of the
Trustee hereunder. Pursuant to the provisions of Section 26-49 of the Code of
Virginia (1950), as amended, or any successor provision, Beneficiary, with or
without cause, is hereby authorized and empowered to substitute and appoint, by
an instrument recorded wherever this Deed of Trust is recorded, a trustee in the
place of any of the trustees hereunder.

     

    8.             RELEASE. Grantor
shall have no right to demand and obtain from Trustee a release of any portion
of the Premises from the lien of this Deed of Trust except by the payment in
full of the Note and all other amounts owed to Beneficiary under this Deed of
Trust and/or any of the Loan Documents.

     

    9.            
HAZARDOUS
SUBSTANCES.

     

    (a)             Condition of Premises.
To the best of Grantor’s knowledge, there does not exist in or under the
Premises any pollutant, toxic or hazardous waste or substance, or any other
material the release or disposal of which is regulated by any law, regulation,
ordinance or code related to pollution or environmental contamination. Grantor
represents that it has received no summons, citations, directives, letters or
other communications, written or oral, from any federal, state or local agency
or department concerning the storing, releasing, pumping, pouring, emitting,
emptying or dumping of any pollutant, toxic or hazardous waste or substance on
the Premises.

     

    (b)            No Hazards. Grantor
covenants and agrees that it shall not, nor shall it permit others to, use the
Premises for the business of generating, transporting, storing, treating or
disposing of any pollutant, toxic or hazardous waste or substance, nor shall it
either take or fail to take any action which may result in a release of any
hazardous substance from or onto the Premises. Notwithstanding the foregoing,
tenants shall be entitled to store, use and dispose of hazardous materials at
the Premises in the ordinary course of their business provided such storage, use
and disposal is in accordance with all applicable local, state and federal laws,
rules and regulations. In addition to all rights of access granted Beneficiary
herein, so long as amounts are owed to Beneficiary under the Note, this Deed of
Trust or any Loan Documents, Beneficiary, or any authorized agent, contractor or
representative of Beneficiary, is hereby irrevocably authorized to enter upon
the Premises at any time and from time to time for the purpose of performing
inspections, taking soil borings or other borings, or conducting any other tests
or procedures on, in or about the Premises as Beneficiary deems necessary or
appropriate to determine whether any hazardous or toxic substances, including
without limitation asbestos or PCBs, are present on, under or about the
Premises.

     

    (c)            Indemnity. Grantor
agrees to defend, indemnify and to hold Beneficiary harmless
from any and all claims, causes of action, damages, penalties, and costs (including,
but not limited to, attorneys’ fees, consultants’ fees and related expenses)
which may be asserted against, or incurred by, Beneficiary resulting from or due
to release of any hazardous substance or waste on the Premises or arising out of
any injury to human health or the environment by reason of the condition of or
past activity upon the Premises. Grantor’s duty to indemnify and hold harmless
includes, but is not limited to, proceedings or actions commenced by any person
(including, but not limited to, any federal, state, or local governmental agency
or entity) before any court or administrative agency. Grantor further agrees
that pursuant to its duty to indemnify under this section, Grantor shall
indemnify Beneficiary against all expenses incurred by Beneficiary as they
become due and not waiting for the ultimate outcome of the litigation or
administrative proceeding. Grantor’s obligations to defend, indemnify and hold
Beneficiary harmless hereunder shall survive payment of the Loan, and all other
amounts owed under the Loan Documents and satisfaction or foreclosure of this
Deed of Trust.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    10.          
MISCELLANEOUS.

     

    (a)             Successors and Assigns.
All of the grants, covenants, terms, provisions and conditions herein
shall bind Grantor and its successors and assigns and inure to the benefit of
the successors and assigns of Trustee and the endorsees, transferees, successors
and assigns of Beneficiary.

     

    (b)             Extension; Forbearance;
Other Indulgences. Beneficiary and Trustee (with the written permission
of Beneficiary) may grant any extension, forbearance or other indulgence, may
release any part of the Premises from the lien hereof and may release any person
from liability without affecting the personal liability of any other person for
payment of indebtedness secured hereby or the lien hereof.

     

    (c)             Governing Law. This
Deed of Trust shall be construed according to the laws of the Commonwealth of
Virginia.

     

    (d)             Notices. All written
notices hereunder shall be by certified or registered mail, postage prepaid, or
delivered in person addressed to the party for whom intended, any party shall
have the right to change its address for notice by giving notice hereunder,
including the right to specify a person to whose attention notices shall be
directed and shall also have the right by giving notice hereunder to require
that copies of any notice be given to not more than two additional persons or
addresses. Any notice sent by registered or certified mail shall be deemed given
on the date of receipt as shown on the return receipt and any notice given by
personal delivery to an officer of a party shall be deemed given on the date of
receipt as evidenced by such officer’s signed receipt; provided, however, that
if any party shall refuse to accept delivery of any notice so sent by registered
or certified mail or personally tendered to an officer, such notice shall be
deemed given when tendered for delivery.

     

    If to the
Beneficiary
at:                                       
Choice Financial Group

    1697
42nd
Street

    Grand
Forks, North Dakota 58201

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
 

    If to the
Grantor,
at:                                             
Lee Oil Company, Inc.

     

      
        

      

    

    
      

    

     

    If to the
Trustee at:

    
      

      

    

    
      
 

    (e)             Further Assurances.
Grantor covenants and agrees to sign, execute and deliver, or cause to be
signed, executed and delivered, and to do or make, or cause to be done or made,
upon the request of Beneficiary, any and all agreements, instruments, papers,
deeds, acts or things, supplemental, confirmatory or otherwise, as may be
reasonably required by Beneficiary for the purpose of facilitating the
performance of the terms of this Deed of Trust or any of the other Loan
Documents.

     

    (f)             Severability. If any
term, covenant or condition of this Deed of Trust, or the application thereof to
any person or circumstance, shall to any extent be held to be invalid or
unenforceable by a court of competent jurisdiction, the remainder of this Deed
of Trust, or the application of such term, covenant or condition to other
persons or circumstances, shall not be affected thereby, and each term, covenant
or condition of this Deed of Trust shall be valid and enforceable to the fullest
extent permitted by law.

     

    (g)             Captions; Gender; Number.
The captions hereof are for convenience of reference only and shall
neither limit nor enlarge the provisions hereof. All personal pronouns used
herein, whether used in the masculine, feminine or neuter gender, shall include
all other genders. The singular shall include the plural and vice versa unless
the context specifically requires otherwise.

     

    (h)             Indemnification.
Grantor shall protect, defend, indemnify and save harmless Trustee and
Beneficiary from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) imposed upon or incurred by or asserted
against Trustee or Beneficiary in connection with the Premises, or any part
thereof, the Loan, the Loan Documents or any related matter. Grantor’s
obligations to defend, indemnify and hold Beneficiary harmless hereunder shall
survive payment of the Loan, and all other amounts owed under the Loan Documents
and satisfaction or foreclosure of this Deed of Trust.

     

    (i) Counterparts. This
Deed of Trust may be executed in any number of counterparts, each of which shall
be an original but all of which together shall constitute one
instrument.

     

    [signature
page to follow]

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
 

    IN
WITNESS WHEREOF, Grantor has caused this Third Party Deed of Trust, Assignment
and Security Agreement to be executed in its name by its duly authorized
representatives.

     

    
      
        	 	LEE OIL COMPANY,
      INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	Its	 	 
	 	 	 	 
	 	 	 	 

      

    

                                                  

    STATE
OF                                            )

    )
ss

    COUNTY
OF                                         )

     

    The
foregoing instrument was acknowledged before me this ___ day of                                  
, 2008, by                                           
,
the                                                
of Lee Oil Company, Inc., a Virginia corporation,
on behalf of the corporation.

     

     

      
        

      

    

    Notary
Public

     

    THIS
DOCUMENT PREPARED BY:

     

    Winthrop
& Weinstine, P.A.

    225 South
Sixth Street, Suite 3500 

    Minneapolis,
Minnesota 55402

    
      
        
          -  -

        

         

      

      
        12

        
          

        

      

      
         

      

    

    EXHIBIT
A

    LEGAL
DESCRIPTION

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          -
-

        

         

      

      
        13

        
          

        

      

      
         

      

    

    EXHIBIT
B

    PERMITTED
ENCUMBRANCES

     

     

     

     

     

     

    
 

     

     

     

     

     

     

     

     

     

     

     

    14

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