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Exhibit 10.4
 
	
				
	 
	 
	 
	 

	(Space above this line for recording purposes only.)
FELCOR LODGING LIMITED PARTNERSHIP,
[_________________________] and
[_______________________________],
together, as mortgagor
to
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent, as mortgagee
 

	 
FEE AND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING

	 
	 
	 
	 

	 
	Dated:
	As of March ____, 2011
	 

	 
 
	Location:
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	County:
	 
	 

	 
	 
	 
	 

	PREPARED BY (WITH ASSISTANCE OF LOCAL COUNSEL)
AND UPON RECORDATION RETURN TO:
Bingham McCutchen LLP
One Federal Street
Boston, MA 02110-1726
Attention:  Maurice H. Sullivan, III, Esq.
 

 
FEE AND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
 
THIS FEE AND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Security Instrument”) is made as of March __, 2011 (the “Effective Date”), by FELCOR LODGING LIMITED PARTNERSHIP, a Delaware limited partnership (“Fee Owner”), [_______________], a Delaware limited liability company (“Owner”), and [_______________], a Delaware limited liability company (“Operator”) (Fee Owner, Owner, and Operator are collectively and together with their permitted successors and assigns, 

 

 

individually or collectively (as the context requires) referred to herein as “Mortgagor”), whose address is c/o FelCor Lodging Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas 75062, Attention: General Counsel, as mortgagor, for the benefit of  JPMORGAN CHASE BANK, N.A. (“Agent”), as Administrative Agent for the benefit of the Lenders (defined below) from time to time parties to the Credit Agreement (defined below) (Agent, in such capacity, together with its successors and assigns, “Mortgagee”), whose address is 270 Park Avenue, New York, New York 10017, Attention: Joseph Geoghan, as mortgagee.  All capitalized terms not defined herein shall have the respective meanings set forth in the Credit Agreement (defined below).
RECITALS:
A.    Fee Owner is the fee simple owner of the real estate described on Exhibit A attached hereto and the lessor under the Ground Lease (as defined below).
B.    Owner is the lessee under the Ground Lease and the lessor under the Operating Lease (as defined below), and Operator is the lessee under the Operating Lease.
C.    Owner, Operator, [_______________], and [_______________] (collectively, “Borrower”), as borrower, and Agent, as administrative agent for the banks and other financial institutions from time to time party thereto as lenders (Agent and/or such banks or such other financial institutions, collectively or individually together with each of their respective successors and assigns, “Lenders”) have entered into that certain Revolving Credit Agreement dated as of the date hereof (as the same may be amended, restated, replaced, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement”).
D.    Under the terms of the Credit Agreement, the Lenders have agreed to make a loan to and for the account of Borrower (whether one or more, collectively, the “Loan”), which Loan is evidenced by, among other things, certain promissory notes executed in connection with the Credit Agreement (such promissory note or promissory notes, together with all extensions, renewals, replacements, restatements or other modifications thereof, whether one or more being hereinafter collectively referred to as the “Notes”).  The Credit Agreement, the Notes and the other documents now or hereafter executed in connection with, or to guaranty, evidence or secure, in whole or in part, the indebtedness and obligations evidenced thereby, as they may from time to time be amended, restated, replaced or otherwise modified and in effect from time to time, to be referred to herein as the “Loan Documents”).
E.    Mortgagor is required by the Credit Agreement to grant to Mortgagee, as security for the payment and performance of the indebtedness and obligations evidenced by the Loan Documents (collectively, the “Obligations”) a valid, enforceable, first priority lien and security interest in the Property (as defined below).  The Obligations include, without limitation, Borrower's obligations under the Loan Documents and Fee Owner's guarantee of Borrower's obligations under the Loan Documents pursuant to that certain Limited Recourse Guaranty of even date herewith executed by Fee Owner in favor of Agent for the benefit of the Lenders.
F.    Lenders' commitments under the Credit Agreement and the Notes to make Revolving Loans shall be in the maximum aggregate amount of up to $225,000,000, and it is the intention of Mortgagor and Mortgagee that this Security Instrument secure the payment of all such amounts and that all such amounts be included in the Obligations secured hereby.
G.    This Security Instrument secures the Obligations.

 

 

H.    It is in the best interest of Mortgagor to execute this Security Instrument inasmuch as Mortgagor will derive substantial direct and indirect benefits from the Loan.
 
ARTICLE I.  GRANTS OF SECURITY
 
Section 1.1Property Mortgaged.  Pursuant to the terms of Section 1.3 and Section 1.5 below, Mortgagor does hereby irrevocably MORTGAGE, GRANT, BARGAIN, SELL, PLEDGE, ASSIGN, WARRANT, TRANSFER and CONVEY, subject to the Permitted Liens, to Mortgagee, with power of sale, and grant a security interest in and to the following property, rights, interests, and estates now owned or hereafter acquired by Mortgagor (collectively, the “Property”):
 
(a)Land.  The real property described in Exhibit A attached hereto and made a part hereof (collectively, the “Land”);
 
(b)Ground Lease.  That certain Ground Lease dated as of October 21, 2003 between Fee Owner and Owner, covering the Land, a memorandum of which is recorded in Official Records Book 16543, Page 1725 of the Public Records of [_______________], as amended by that certain First Amendment to Ground Lease dated on or about even date herewith between Fee Owner and Owner (as in effect from time to time, the “Ground Lease”), and the leasehold estate created thereby, including all assignments, modifications, extensions and renewals of the Ground Lease and all credits, deposits, options, privileges and rights of Owner as tenant under the Ground Lease, including but not limited to, rights of first refusal, if any, and the right, if any, to renew or extend the Ground Lease for a succeeding term or terms, and also including all the right title, claim or demand whatsoever of Owner either in law or in equity, in possession or expectancy, of, in and to Owner's rights, as tenant under the Ground Lease, to elect under Section 365(h)(1) of the Bankruptcy Code, Title 11 U.S.C.A. §101 et seq. (the “Bankruptcy Code”) to terminate or treat the Ground Lease as terminated in the event (i) of the bankruptcy, reorganization or insolvency of the lessor thereunder, and (ii) the rejection of the Ground Lease by the lessor thereunder, as debtor in possession, or by a trustee for the lessor thereunder, pursuant to Section 365 of the Bankruptcy Code;
 
(c)Additional Land.  All additional lands, estates and development rights hereafter acquired by Mortgagor for use in connection with the Land and the development of the Land and all additional lands and estates therein which may, from time to time, by supplemental mortgage or otherwise be expressly made subject to the Lien of this Security Instrument;
 
(d)Improvements.  The buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land (collectively, the “Improvements”);
 
(e)Easements.  All easements, rights-of-way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hereditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land and the Improvements including, but not limited to, those arising under and by virtue of the Ground Lease and the reversions and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim  and demand whatsoever, both at law and in equity, of Mortgagor of, in and to the Land and the Improvements, and every part and parcel thereof, with the appurtenances thereto;

 

 

(f)Fixtures and Personal Property.  All machinery, equipment, fixtures (including, but not limited to, all heating, air-conditioning, plumbing, lighting, communications and elevator fixtures, inventory and goods), inventory and articles of personal property and accessions thereof and renewals, replacements thereof and substitutions therefor (including, but not limited to, beds, bureaus, chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains, shades, venetian blinds, screens, paintings, hangings, pictures, divans, couches, luggage carts, luggage racks, stools, sofas, chinaware, linens, pillows, blankets, glassware, silverware, food carts, cookware, dry cleaning facilities, dining room wagons, keys or other entry systems, bars, bar fixtures, liquor and other drink dispensers, icemakers, radios, television sets, intercom and paging equipment, electric and electronic equipment, dictating equipment, private telephone systems, medical equipment, potted plants, heating, lighting and plumbing fixtures, fire prevention and extinguishing apparatus, cooling and air-conditioning systems, elevators, escalators, fittings, plants, apparatus, stoves, ranges, refrigerators, laundry machines, tools, machinery, engines, dynamos, motors, boilers, incinerators, switchboards, conduits, compressors, vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call systems, brackets, electrical signs, bulbs, bells, ash and fuel, conveyors, cabinets, lockers, shelving, spotlighting equipment, dishwashers, garbage disposals, washers and dryers), other customary hotel equipment and other tangible property of every kind and nature whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an interest, now or hereafter located upon the Land and the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements and all building equipment, materials and supplies of any nature whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an interest, now or hereafter located upon the Land or the Improvements, or appurtenant thereto, or usable in connection with the present or future operation and occupancy of the Land and the Improvements (hereinafter collectively called the “Personal Property”), and the right, title and interest of Mortgagor in and to any of the Personal Property which may be subject to any security interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state or states where any of the Property is located (the “Uniform Commercial Code”), or equipment leases superior in priority to the Lien of this Security Instrument and all proceeds and products of all of the above;
 
(g)Operating Lease.  That certain Lease Agreement dated as of February 28, 1996 between FelCor Suites Limited Partnership, as lessor, and DJONT Operations, L.L.C., as lessee, as amended by that certain Amendment to Lease Agreement dated as of September 23, 1996, effective February 28, 2006, as further amended by that certain Omnibus Lease Amendment Agreement dated as of June 30, 1998 among FelCor Lodging Trust Incorporated, Fee Owner, FelCor Suites Limited Partnership, and the other lessors and lessees signatories thereto, as assigned pursuant to that certain Assignment and Assumption of Agreements dated as of October 21, 2003 by and between DJONT Operations, L.L.C., as assignor, and DJONT/JPM Boca Raton Leasing, L.L.C., as assignee, as further assigned pursuant to that certain Assignment and Assumption of Agreements dated as of October 23, 2003 by and between Fee Owner, as assignor, and FelCor/JPM Boca Raton Hotel, L.L.C., as assignee, a memorandum of which is recorded in Official Records Book 16543, Page 1732 of the Public Records of Palm Beach County, Florida (as amended and assigned and in effect from time to time, the “Operating Lease”), and the leasehold estate created thereby, including all assignments, modifications, extensions and renewals of the Operating Lease and all credits, deposits, options, privileges and rights of Operator as tenant under the Operating Lease, including but not limited to, rights of first refusal, if any, and the right, if any, to renew or extend the Operating Lease for a succeeding term or terms, and also including all the right title, claim or demand whatsoever of Operator either in law or in equity, in possession or expectancy, of, in and to Operator's rights, as tenant under the Operating Lease, to elect under Section 365(h)(1) of the Bankruptcy Code to 

 

 

terminate or treat the Operating Lease as terminated in the event (i) of the bankruptcy, reorganization or insolvency of the lessor thereunder, and (ii) the rejection of the Operating Lease by the lessor thereunder, as debtor in possession, or by a trustee for the lessor thereunder, pursuant to Section 365 of the Bankruptcy Code;
 
(h)Leases and Rents.  All leases, subleases, rental agreements, registration cards and agreements, if any, and other agreements whether or not in writing affecting the use, enjoyment or occupancy of the Land and/or the Improvements heretofore or hereafter entered into (including, without limitation, the Operating Lease) and all extensions, amendments and modifications thereto, whether before or after the filing by or against Mortgagor of any petition for relief under Creditor's Rights Laws (defined below) (collectively, the “Leases”), and all right, title and interest of Mortgagor, its successors and assigns therein and thereunder, including, without limitation, any guaranties of the lessees' obligations thereunder, cash or securities deposited thereunder to secure the performance by the lessees of their obligations thereunder and all rents, additional rents, revenues, issues, registration fees, if any, and profits (including all oil and gas or other mineral royalties and bonuses and all rents, revenues, bonus money, royalties, rights and benefits accruing to Mortgagor under all present and future oil, gas and mineral leases on any parts of the Land and the Improvements) from the Land and the Improvements, all income, rents, room rates, issues, profits, revenues, deposits, accounts and other benefits from the operation of the hotel on the Land and/or the Improvements, including, without limitation, all revenues and credit card receipts collected from guest rooms, restaurants, bars, mini-bars, meeting rooms, banquet rooms and recreational facilities and otherwise, all receivables, customer obligations, installment payment obligations and other obligations now existing or hereafter arising or created out of sale, lease, sublease, license, concession or other grant of the right of the possession, use or occupancy of all or any portion of the Land and/or Improvements, or personalty located thereon, or rendering of services by Mortgagor or any operator or manager of the hotel or the commercial space located in the Improvements or acquired from others including, without limitation, from the rental of any office space, retail space, commercial space, guest room or other space, halls, stores or offices, including any deposits securing reservations of such space, exhibit or sales space of every kind, license, lease, sublease and concession fees and rentals, health club membership fees, food and beverage wholesale and retail sales, service charges, vending machine sales and proceeds, if any, from business interruption or other loss of income insurance relating to the use, enjoyment or occupancy of the Land and/or the Improvements whether paid or accruing before or after the filing by or against Mortgagor of any petition for relief under Creditors Rights Laws (the “Rents”), and all proceeds from the sale or other disposition of the Leases and the right to receive and apply the Rents to the payment of the Obligations.  As used herein, the term “Creditors Rights Laws” shall mean any existing or future Laws of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to its debts or debtors;
 
(i)Insurance Proceeds.  All insurance proceeds in respect of the Property under any insurance policies covering the Property whether required by this Security Instrument or the Credit Agreement or not, including, without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property (collectively, the “Insurance Proceeds”);
 
(j)Condemnation Awards.  All condemnation awards, including interest thereon, which may heretofore and hereafter be made with respect to the Property by reason of any taking or condemnation, whether from the exercise of the right of eminent domain (including, but not limited 

 

 

to, any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the Property (collectively, the “Awards”);
 
(k)Tax Certiorari.  All refunds, rebates or credits in connection with reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction;
 
(l)Rights.  The right, in the name and on behalf of Mortgagor, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Mortgagee or Lenders in the Property;
 
(m)Agreements.  All other agreements, management agreements, operating agreements, franchise agreements, license agreements, contracts, certificates, chattel paper (whether tangible or electronic), instruments, franchises, permits, licenses, plans, specifications and other documents (including electronic documents), now or hereafter entered into, and all rights therein and thereto, respecting or pertaining to the use, occupation, construction, management or operation of any part of the Land and Improvements or any business or activity conducted on any part of the Land and Improvements including, but not limited to, the Management Agreement and Franchise Agreement and any and all agreements executed in connection therewith, and all right, title and interest of Mortgagor therein and thereunder, including, without limitation, the right, during the occurrence of any Event of Default, to receive and collect any sums payable to Mortgagor thereunder;
 
(n)Intangibles.  All trade names, trademarks, service marks, logos, copyrights, goodwill, books and records, tenant or guest lists, advertising materials, telephone exchange numbers identified in such materials, and all other general intangibles relating to or used in connection with the operation of the Land, the Improvements and the Personal Property;
 
(o)Mortgagor Accounts.  All right, title and interest of Mortgagor, if any, arising from the operation of the Land and the Improvements in and to all payments for goods or property sold, leased or occupied or for services rendered, whether or not yet earned by performance, and not evidenced by an instrument or chattel paper (hereinafter referred to as “Accounts Receivable”) including, without limiting the generality of the foregoing, (i) all accounts, contract rights, book debts, and notes arising from the operation of a hotel on the Land and the Improvements or arising from the sale, lease or exchange of goods or other property and/or the performance of services, (ii) Mortgagor's rights to payment from any consumer credit/charge card organization or entities which sponsor and administer such cards as the American Express Card, the Visa Card and the MasterCard or other similar credit cards, (iii) Mortgagor's rights in, to and under all purchase orders for goods, services or other property, (iv) Mortgagor's rights to any goods, services or other property represented by any of the foregoing, (v) monies due to or to become due to Mortgagor under all contracts for the sale, lease or exchange of goods or other property and/or the performance of services including the right to payment of any interest or finance charges in respect thereto (whether or not yet earned by performance on the part of Mortgagor) and (vi) all collateral security and guaranties of any kind given by any Person with respect to any of the foregoing.  Accounts Receivable shall include those now existing or hereafter created, substitutions therefor, proceeds (whether cash or non--cash, movable or immovable, tangible or intangible) received upon the sale, exchange, transfer, collection or other disposition or substitution thereof and any and all of the foregoing and proceeds therefrom;

 

 

(p)Reserve Accounts.  All Accounts, Account Collateral, reserves, working capital, escrows and deposit accounts required under the Credit Agreement, the other Loan Documents, the Ground Lease, the Operating Lease, any management agreement or any other agreement assigned or collaterally assigned to Mortgagee, or otherwise maintained by Mortgagor, and all cash, checks, drafts, certificates, securities, investment property, financial assets, instruments and other property held therein from time to time and all proceeds, products, distributions or dividends or substitutions thereon and thereof;
 
(q)Causes of Action.  All causes of action and claims (including, without limitation, all causes of action or claims arising in tort, by contract, by fraud or by concealment of material fact) against any Person for damages or injury to the Property or in connection with any transactions financed in whole or in part by the proceeds of the Loan (“Cause of Action”);
 
(r)Security Interests.  All right, title and interest of the lessor or lessee under the Ground Lease and the lessor or lessee under the Operating Lease as secured party in the personal property and collateral pursuant to any security interest granted by lessees or by operation of Laws thereunder;
 
(s)Miscellaneous.  To the extent not set forth in this Section 1.1, the Collateral defined in Section 1.3 below;
 
(t)Proceeds.  All proceeds of any of the foregoing items set forth in subsections (a) through (s) above including, without limitation, Insurance Proceeds and Awards and Causes of Action which may at any time be converted into cash or liquidation claims; and
 
(u)Other Rights.  Any and all other rights of Mortgagor in and to the items set forth in subsections (a) through (t) above.
 
Section 1.2.    ASSIGNMENT OF RENTS.  Mortgagor hereby absolutely and unconditionally assigns to Mortgagee all of Mortgagor's right, title and interest in and to all current and future Leases and Rents; it being intended by Mortgagor that this assignment constitutes a present, absolute assignment and not an assignment for additional security only.  Nevertheless, subject to the terms of the Credit Agreement and Section 8.1(h) of this Security Instrument, Mortgagee grants to Mortgagor a revocable license to (i) collect, receive, use and enjoy the Rents and Mortgagor shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Obligations, for use in the payment of such sums, and (ii) enforce the terms of the Leases.
 
Section 1.3.    SECURITY AGREEMENT.  This Security Instrument is both a real property mortgage and a “security agreement” within the meaning of the Uniform Commercial Code.  The Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature, of Mortgagor in the Property.  By executing and delivering this Security Instrument, Mortgagor hereby grants to Mortgagee, as security for the Obligations, a security interest in the following properties, assets and rights of Mortgagor, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof (all of the same being hereinafter called the “Collateral”):  all personal and fixture property of every kind and nature including all goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes), documents (including, if applicable, electronic documents), accounts, chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, securities and all other investment property, supporting obligations, any other contract rights or rights to the payment of money, insurance claims and proceeds, and all general intangibles (including all payment intangibles) (as each of 

 

 

the foregoing terms is defined in the Uniform Commercial Code) to the full extent that the Collateral may be subject to the Uniform Commercial Code; provided that, with respect to Fee Owner, “Collateral” shall only include properties, assets and rights of Fee Owner located at or pertaining exclusively to 661 N.W. 53rd Street, Boca Raton, Florida  33487 and used in connection with the present or future operation, ownership, use, occupancy or management of the Property.
 
Section 1.4.    FIXTURE FILING.  Without in any manner limiting the generality of any of the other provisions of this Security Instrument: (a) some portions of the goods described or to which reference is made herein are or are to become fixtures on the Land described or to which reference is made herein or on Exhibit A attached to this Security Instrument; (b) this Security Instrument is to be filed of record in the real estate records as a financing statement and shall constitute a “fixture filing” for purposes of the Uniform Commercial Code; and (c) Fee Owner is the record fee owner of the real estate or interests in the real estate constituting the Property hereunder, subject to the Permitted Liens; and (d) Owner is the record owner of the leasehold estate in the real estate or interests in the real estate constituting the Property hereunder, subject to the Permitted Liens.  Information concerning the security interest herein granted may be obtained at the addresses set forth on the first page hereof.  This Security Instrument shall be effective as a financing statement filed as a fixture filing with respect to all fixtures included within the Property and is to be filed for record in the real property or other applicable records in the office of the Recorder where the Property (including said fixtures) is situated.  This Security Instrument shall also be effective as a financing statement covering as-extracted minerals or the like (including oil and gas) and accounts subject to the applicable provisions of the Uniform Commercial Code of the State in which the Property is located.  The address of the Debtor (Mortgagor) is set forth on the first page hereof and the address of the Secured Party (Mortgagee) is set forth below.  In that regard, the following information is provided:
	
		
	Name of First Debtor:
	FelCor Lodging Limited Partnership

	Type of Organization:
	Limited partnership

	State:
	Delaware

	Organizational ID Number:
	75-2544994

	Name of Secured Party:
	JPMorgan Chase Bank, N.A., as Administrative Agent

	Address of Secured Party:
	270 Park Avenue, New York, New York 10017, Attention: Joseph Geoghan

	Name of Second Debtor:
	FelCor/JPM Boca Raton Hotel, L.L.C.

	Type of Organization:
	Limited liability company

	State:
	Delaware

	Organizational ID Number:
	20-0067256

	Name of Secured Party:
	JPMorgan Chase Bank, N.A., as Administrative Agent

	Address of Secured Party:
	270 Park Avenue, New York, New York 10017, Attention: Joseph Geoghan

	Name of Third Debtor:
	DJONT/JPM Boca Raton Leasing, L.L.C.

	Type of Organization:
	Limited liability company

	State:
	Delaware

	Organizational ID Number:
	20-0067187

	Name of Secured Party:
	JPMorgan Chase Bank, N.A., as Administrative Agent

	 
	 

 

 

	
		
	Address of Secured Party:
	270 Park Avenue, New York, New York 10017, Attention: Joseph Geoghan

	Name of Third Debtor:
	DJONT/JPM Boca Raton Leasing, L.L.C.

	Type of Organization:
	Limited liability company

	State:
	Delaware

	Organizational ID Number:
	20-0067187

	Name of Secured Party:
	JPMorgan Chase Bank, N.A., as Administrative Agent

	Address of Secured Party:
	270 Park Avenue, New York, New York 10017, Attention: Joseph Geoghan

 
Section 1.5.    CONDITIONS TO GRANT.  TO HAVE AND TO HOLD the above granted and described Property unto Mortgagee and to the use and benefit of Mortgagee and Lenders and their successors and assigns, forever; PROVIDED, HOWEVER, these presents are upon the express condition that, upon final payment and performance of the Obligations or the full and final release of this Security Instrument, these presents and the estate hereby granted shall cease, terminate and be void.
 
Section 1.6.    GRANTS TO MORTGAGEE.  This Security Instrument and the grants, assignments and transfers made to Mortgagee in this Article 1 shall inure to Mortgagee solely in its capacity as Lenders' administrative agent under the Credit Agreement.
 
Section 1.7.    HOMESTEAD.  None of the Property forms any part of any property owned, used or claimed by Mortgagor as a residence or business homestead.  None of the Property is exempt from forced sale under the Laws of the State of New York and, to the extent applicable, the state in which Land and Improvements are located.  Mortgagor hereby disclaims and renounces each and every claim to the Property as a homestead.
 
ARTICLE 2.  OBLIGATIONS SECURED
 
Section 2.1.    OBLIGATIONS.  This Security Instrument and the grants, assignments and transfers made in Article 1 are given for the purpose of securing the Obligations, including any advances made by Mortgagee or any Lender for the construction, improvement, operation, repair, maintenance, preservation or protection of the Property and the security for payment of the Obligations, whether such future advances are obligatory or are made at Mortgagee's or such Lender's option, for any purpose, any other future advances by Mortgagee and Lenders to Mortgagor described in Section 20.2(d); and any other future advances by Mortgagee and Lenders to Mortgagor that recite that they are secured by this Security Instrument.
 
Section 2.2    PAYMENT OF OBLIGATIONS.  Mortgagor will pay and perform the Obligations at the time and in the manner provided in the Credit Agreement and the other Loan Documents, subject to and as required by the terms and provisions thereof including, without limitation, any non-recourse provisions expressly set forth therein.
 
Section 2.3    INCORPORATION BY REFERENCE.  All the covenants, conditions and agreements contained in (a) the Credit Agreement (including, without limitation, the exculpatory provisions set forth in Section 12.09 thereof), (b) the Notes and (c) all and any of the other Loan Documents, are hereby made a part of this Security Instrument to the same extent and with the same force as if fully set forth herein.

 

 

ARTICLE 3.  PROPERTY REPRESENTATIONS AND COVENANTS
 
Mortgagor represents, warrants, covenants and agrees as follows:
Section 3.1.    INSURANCE.  Mortgagor shall obtain and maintain, or cause to be obtained and maintained, in full force and effect at all times insurance with respect to Mortgagor and the Property as required pursuant to the Credit Agreement.
 
Section 3.2.    TAXES AND OTHER CHARGES.  Mortgagor shall pay all real estate and personal property taxes, assessments, water rates or sewer rents (collectively, “Taxes”), ground rents, maintenance charges, impositions (other than Taxes), and any Other Charges now or hereafter levied or assessed or imposed against the Property or any part thereof in accordance with the Credit Agreement.
 
Section 3.3.    LEASES.  Mortgagor shall not (and shall not permit any other applicable Person to) enter into or modify any Leases for all or any portion of the Property except in accordance with the provisions of the Credit Agreement.
 
Section 3.4.WARRANTY OF TITLE.  Mortgagor has good and marketable title to the Property, subject only to the Permitted Liens, and has the right to mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey the same.  Fee Owner possesses an unencumbered fee simple absolute estate in the Land and the Improvements, subject only to the Permitted Liens.  Owner possesses an unencumbered leasehold estate under the Ground Lease, subject only to the Permitted Liens.  Operator possesses an unencumbered subleasehold estate under the Operating Lease, subject only to the Permitted Liens.  Subject to the Permitted Liens, Mortgagor shall forever warrant, defend and preserve the title and the validity and priority of the Lien of this Security Instrument and shall forever warrant and forever defend the same to Mortgagee and/or Lenders, as applicable, against the claims of all Persons whatsoever.  This Security Instrument, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first priority Lien on the Property, subject only to Permitted Liens and the Liens created by the Loan Documents and (b) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases), all in accordance with the terms thereof, in each case subject only to any applicable Permitted Liens.
 
Section 3.5.    PAYMENT FOR LABOR AND MATERIALS.
 
(a)    Subject to Section 3.5(b) below, Mortgagor will promptly pay (or cause to be paid) when due all bills and costs for labor, materials, and specifically fabricated materials incurred in connection with the Property (each, a “Work Charge”) and never permit to exist beyond the due date thereof in respect of the Property or any part thereof any Lien or security interest other than the Permitted Liens, even though inferior to the Liens and the security interests hereof, and in any event never permit to be created or exist in respect of the Property or any part thereof any other or additional Lien or security interest other than the Liens or security interests hereof except for the Permitted Liens.  Mortgagor represents there are no claims for payment for work, labor or materials affecting the Property which are or may become a Lien prior to, or of equal priority with, the Liens created by the Loan Documents.
 
(b)    After prior written notice to Mortgagee, Mortgagor, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the validity of any Work Charge, the applicability of any Work Charge to Mortgagor or to the Property or any alleged non-payment of any Work Charge, provided that (i) no Event of Default 

 

 

has occurred and is continuing; (ii) such proceeding shall be permitted under and be conducted in accordance with the provisions of any instrument to which Mortgagor is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable Legal Requirements; (iii) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, cancelled or lost during the duration of such legal proceeding; (iv) Mortgagor shall promptly upon final determination thereof pay (or cause to be paid) any such Work Charge determined to be valid, applicable and unpaid; (v) such proceeding shall suspend the collection of such contested Work Charge from the Property or Mortgagor shall have paid the same (or shall have caused the same to be paid) under protest; and (vi) Mortgagor shall furnish (or cause to be furnished) such security as may be required in the proceeding by applicable Laws or Legal Requirements, or as may be reasonably requested by Mortgagee, to insure payment of such Work Charge, together with all interest and penalties payable in connection therewith.  Mortgagee may apply any such security or part thereof, as necessary to pay for such Work Charge at any time when, in the sole but reasonable judgment of Mortgagee, the validity, applicability and non-payment of such Work Charge is finally established or the Property (or any part thereof or interest therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost during or as a result of such legal proceeding or Work Charge.
 
Section 3.6.    MAINTENANCE AND USE OF PROPERTY, WASTE, USE.  Mortgagor shall cause the Property to be maintained in a good and safe condition and repair in accordance with the terms of the Credit Agreement.  Subject to the terms of the Credit Agreement, the Improvements and the Personal Property shall not be removed, demolished or materially altered or expanded (except for normal replacement of the Personal Property) without the consent of Mortgagee.  Subject to the terms of the Credit Agreement, Mortgagor shall promptly repair, replace or rebuild any part of the Property which may be destroyed by any casualty, or become damaged, worn or dilapidated or which may be affected by any condemnation and shall complete and pay for any structure at any time in the process of construction or repair on the Land.  Subject to the terms of the Credit Agreement, Mortgagor shall not initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or other public or private restriction, limiting or defining the uses which may be made of the Property or any part thereof.  Subject to the provisions of the Credit Agreement with respect thereto, if under applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use, Mortgagor will not cause or permit the nonconforming use to be discontinued or the nonconforming Improvement to be abandoned without the express written consent of Mortgagee.  Mortgagor shall not commit or suffer any waste of the Property or make any change in the use of the Property which will in any way materially increase the rise of fire or other hazard arising out of the operation of the Property, or take any action that might invalidate or give cause for cancellation of any policy, or do or permit to be done thereon anything that may in any way impair the value of the Property or the security of this Security Instrument.  Mortgagor will not, without the prior written consent of Lender, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the method of mining or extraction thereof.  The Property shall be used only for a hotel and any ancillary uses relating thereto, and for no other uses without the prior written consent of Mortgagee.
 
Section 3.7    GROUND LEASE.  Mortgagor represents that the description of the Ground Lease in Section 1.1 above is a true, complete and accurate description of the Ground Lease.

 

 

ARTICLE 4.  FURTHER ASSURANCES
 
Section 4.1.    COMPLIANCE WITH CREDIT AGREEMENT.  Mortgagor shall comply with all covenants set forth in the Credit Agreement relating to acts or other further assurances to be made on the part of Mortgagor in order to protect and perfect the Lien or security interest hereof upon, and in the interest of Mortgagee and Lenders in, the Property.
 
Section 4.2.    AUTHORIZATION TO FILE FINANCING STATEMENTS; POWER OF ATTORNEY.  Mortgagor hereby irrevocably authorizes the Mortgagee at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto and continuations thereof that (a) indicate the Collateral (i) as all assets of the Mortgagor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the state of Florida or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) provide any other information required by part 5 of Article 9 of the Uniform Commercial Code of the state of Florida or such other jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether the Mortgagor is an organization, the type of organization and any organizational identification number issued to the Mortgagor and, (ii) in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Collateral relates.  The Mortgagor agrees to furnish any such information to the Mortgagee promptly upon the Mortgagee's request.  Mortgagor also ratifies its authorization for Mortgagee to have filed any like initial financing statements, amendments thereto and continuations thereof, if filed prior to the date of this Security Instrument.  Mortgagor hereby irrevocably constitutes and appoints Mortgagee and any officer or agent of Mortgagee, with full power of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of Mortgagor or in Mortgagor's own name to execute in Mortgagor's name any such documents and otherwise to carry out the purposes of this Section 4.2, to the extent that Mortgagor's authorization above is not sufficient and Mortgagor fails or refuses to promptly execute such documents.  To the extent permitted by Laws, Mortgagor hereby ratifies all  acts said attorneys-in-fact have lawfully done in the past or shall lawfully do or cause to be done in the future by virtue hereof.  This power of attorney is a power coupled with an interest and shall be irrevocable until final payment and performance of the Obligations or the full and final release of this Security Instrument.
 
Section 4.3.    RECORDING OF SECURITY INSTRUMENT ETC.  Mortgagor, upon execution and delivery of this Security Instrument and thereafter, from time to time, will cause this Security Instrument and any of the other Loan Documents creating a Lien or evidencing the Lien hereof upon the Property and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or future Laws in order to publish notice of and fully to protect and perfect the Lien hereof upon, and the interest of Mortgagee in, the Property.  Mortgagor will pay all taxes, filing, registration or recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or recording of this Security Instrument and the other Loan Documents, including any instrument of further assurance and any modification or amendment of the foregoing documents, and all federal state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of this Security Instrument and the other Loan Documents, including any instrument of further assurance and any modification or amendment of the foregoing documents, except where prohibited by Laws so to do.

 

 

  ARTICLE 5.  DUE ON SALE/ENCUMBRANCE
 
Section 5.1.    NO SALE/ENCUMBRANCE.  Except as and to the extent permitted by the Credit Agreement, Mortgagor shall not cause or permit a sale, conveyance, mortgage, deed, grant, bargain, encumbrance, pledge, assignment, or grant of any options with respect to, or any other transfer or disposition (directly or indirectly, voluntarily or involuntarily, by operation of Laws or otherwise, and whether or not for consideration or of record) of a legal or beneficial interest in the Property or any Restricted Party or any part thereof or interest therein.
 
ARTICLE 6.  PREPAYMENT; RELEASE OF PROPERTY
 
Section 6.1.    PREPAYMENT.  The Obligations may not be prepaid in whole or in part except in strict accordance with the express terms and conditions of the Notes and the Credit Agreement.
 
Section 6.2.    RELEASE OF PROPERTY.  Mortgagor shall not be entitled to a release of any portion of the Property from the Lien of this Security Instrument except in accordance with the express terms and conditions of the Credit Agreement.
 
ARTICLE 7.  DEFAULT
 
Section 7.1.    EVENT OF DEFAULT.  The term “Event of Default” as used in this Security Instrument shall have the meaning assigned to such term in the Credit Agreement.
 
ARTICLE 8.  RIGHTS AND REMEDIES UPON DEFAULT
 
Section 8.1.    REMEDIES.  Upon the occurrence and during the continuance of any Event of Default, Mortgagor agrees that Mortgagee may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Mortgagor, and in and to the Property, including, but not limited to, the following actions, each of which may be pursued alternatively, concurrently or otherwise, at such time and in such order as Mortgagee may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Mortgagee:
 
a.Mortgagee may declare the Obligations to be immediately due and payable.  Notwithstanding the foregoing, if and to the extent the Credit Agreement provides for automatic acceleration of the Loan upon the occurrence of certain Events of Default, such provisions with respect to automatic acceleration shall govern and control, without any further notice, demand or other action by Lender, Mortgagee or any other Person.
 
b.With respect to foreclosure, judicial or otherwise, with respect to any of the Property:
 
1.Mortgagee may institute proceedings, judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of Laws, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner.
 
2.Mortgagee may, with or without entry, to the extent permitted and pursuant to the procedures provided by applicable Laws, institute proceedings for the partial foreclosure of this Security Instrument, conducting the sale as herein provided, and without declaring the whole Obligations due, and provided that if sale is made because of default as hereinabove mentioned, such sale may be made subject to the unmatured part of the Notes and/or the Obligations secured hereby, and it is agreed that such sale, if so made, shall not in

 

 

 any manner affect any other Obligations secured hereby, but as to such other Obligations this Security Instrument and the Liens created hereby shall remain in full force and effect just as though no sale had been made under the provisions of this Section 8.1(b)(ii).  It is further agreed that several sales may be made hereunder without exhausting the right of sale for any remaining Obligations secured hereby, it being the purpose to provide for a foreclosure and sale of the Property for any matured portion of any of the Obligations secured hereby or other items provided for herein without exhausting the power to foreclose and to sell the Property for any remaining Obligations secured hereby, whether matured at the time or subsequently maturing.
 
3.Mortgagee may sell the Property in whole or in part and in such parcels and order as Mortgagee may determine, and the right of sale hereunder shall not be exhausted by one or more sales, but successive sales may be had until all of the Property has been legally sold.
 
4.Mortgagee and/ or one or more Lenders may become the purchaser at any such sale if it is the highest bidder, and shall have the right, after paying or accounting for all costs of said sale or sales, to credit the amount of the bid upon the amount of the Obligations owing, in lieu of cash payment.
 
5.It shall not be necessary for Mortgagee to have constructively in its possession any part of the real or personal property covered by this Security Instrument, and the title and right of possession of said property shall pass to the purchaser or purchasers at any sale hereunder as fully as if the same had been actually present and delivered.  Likewise, on foreclosure of this Security Instrument whether by power of sale herein contained or otherwise, Mortgagor or any person claiming any part of the Property by, through or under Mortgagor, shall not be entitled to a marshalling of assets or a sale in inverse order of alienation.
 
6.The recitals and statements of fact contained in any notice or in any conveyance to the purchaser or purchasers at any sale hereunder shall be prima facie evidence of the truth of such facts, and all prerequisites and requirements necessary to the validity of any such sale shall be presumed to have been performed.
 
7.To the extent permitted by applicable Laws, any sale under the powers granted by this Security Instrument shall be a perpetual bar against Mortgagor, its heirs, successors, assigns and legal representatives.
 
8.Mortgagee may sell for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Mortgagor therein and rights of redemption thereof, pursuant to power of sale or otherwise, at one or more sales, as an entirety or in parcels, at such time and place, upon such terms and after such notice thereof as may be required or permitted by applicable Laws.
 
9.In the event of a sale, by foreclosure, power of sale or otherwise, of less than all of Property, this Security Instrument shall continue as a Lien and security interest on the remaining portion of the Property unimpaired and without loss of priority.
 

 

 

(c)    In the event any sale hereunder is not completed or is defective in the opinion of Mortgagee or the holder of any part of the Obligations, to the extent permitted by applicable Laws, such sale shall not exhaust the power of sale hereunder, and Mortgagee or such holder shall have the right to cause a subsequent sale or sales to be made by Mortgagee.
 
(d)    In the event of a foreclosure under the powers granted by this Security Instrument, Mortgagor and all other Persons in possession of any part of the Property shall be deemed tenants at will of the purchaser at such foreclosure sale and shall be liable for a reasonable rental for the use of the Property; and if any such tenants refuse to surrender possession of the Property upon demand, the purchaser shall be entitled to institute and maintain the statutory action of forcible entry and detainer and procure a writ of possession thereunder, and Mortgagor expressly waives all damages sustained by reason thereof.
 
(e)    Mortgagee may institute an action, suit or proceeding in equity for the specific performance of any covenant, condition or agreement contained herein or in the Notes, the Credit Agreement or in the other Loan Documents.
 
(f)    Mortgagee may recover judgment on the Notes either before, during or after any proceedings for the enforcement of this Security Instrument or the other Loan Documents.
 
(g)    Mortgagee may apply for and shall be entitled to the appointment of a receiver, trustee, liquidator or conservator of the Property, without notice and without regard for the adequacy of the security for the Obligations and without regard for the solvency of Mortgagor, any Borrower or Guarantor or any other guarantor or indemnitor under the Loan or any other Person liable for the payment of the Obligations.
 
(h)    The license granted to Mortgagor under Section 1.2 hereof shall automatically be revoked and, to the extent permitted by applicable Laws, Mortgagee may enter into or upon the Property, either personally or by its agents, nominees or attorneys and dispossess Mortgagor and its agents and servants therefrom, without liability for trespass, damages or otherwise and exclude Mortgagor and its agents or servants wholly therefrom, and take possession of all books, records and accounts relating thereto and Mortgagor agrees to surrender possession of the Property and of such books, records and accounts to Mortgagee upon demand, and thereupon Mortgagee may (i) use, operate, manage, control, insure, maintain, repair, restore and otherwise deal with all and every part of the Property and conduct the business thereat; (ii) complete any construction on the Property in such manner and form as Mortgagee deems advisable; (iii) make alterations, additions, renewals, replacements and improvements to or on the Property; (iv) exercise all rights and powers of Mortgagor with respect to the Property, whether in the name of Mortgagor or otherwise, including, without limitation, the right to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents of the Property and every part thereof; (v) require Mortgagor to pay monthly in advance to Mortgagee, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of such part of the Property as may be occupied by Mortgagor; (vi) require Mortgagor to vacate and surrender possession of the Property to Mortgagee or to such receiver and, in default thereof, Mortgagor may be evicted by summary proceedings or otherwise; and (vii) apply the receipts from the Property to the payment of the Obligations, in such order, priority and proportions as Mortgagee shall deem appropriate in its sole discretion after deducting therefrom all expenses (including reasonable attorneys' fees) incurred in connection with the aforesaid operations and all amounts necessary to pay the Taxes, Other Charges, insurance and other expenses in connection with the Property, as well as just and reasonable 

 

 

compensation for the services of Mortgagee and Lenders, and their respective counsel, agents and employees.  Notwithstanding the provisions of this Section 8.1(h) hereof, no credit shall be given by Mortgagee for any sum or sums received from the rents, issues and profits of the Property until the money collected is actually received by Mortgagee at its principal office, or at such other place as Mortgagee shall designate in writing, and no such credit shall be given for any uncollected rents or other uncollected amounts or bills, nor shall such credit be given for any rents, issues and profits derived from the Property after foreclosure or other transfer of the Property (or part thereof from which rents, issues and/or profits are derived pursuant to the Security Instrument or by agreement) to Mortgagee or any other third party.  Receipt of rents, issues and/or profits by Mortgagee shall not be deemed to constitute a pro-tanto payment of the indebtedness evidenced by, or arising under, this Security Instrument, the Notes, the Credit Agreement or any of the other Loan Documents, but shall be applied as provided in Section 8.2.
 
(i)    To the extent permitted by applicable Laws, Mortgagee may exercise any and all rights and remedies granted to a secured party upon default under the Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the right to take possession of the Collateral (including, without limitation, the Personal Property) or any part thereof, and to take such other measures as Mortgagee may deem necessary for the care, protection and preservation of the Collateral (including, without limitation, the Personal Property); and (ii) request Mortgagor at its expense to assemble the Collateral (including, without limitation, the Personal Property) and make it available to Mortgagee at a convenient place acceptable to Mortgagee.  Any notice of sale, disposition or other intended action by Mortgagee with respect to the Collateral (including, without limitation, the Personal Property) sent to Mortgagor in accordance with the provisions hereof at least five (5) days prior to such action shall constitute commercially reasonable notice to Mortgagor.
 
(j)    Mortgagee may apply any sums then deposited or held in escrow or otherwise by or on behalf of Mortgagee in accordance with the terms of the Credit Agreement, this Security Instrument or any other Loan Document to the payment of the following items in any order in its sole discretion: (i) Taxes and Other Charges; (ii) insurance premiums; (iii) interest on the unpaid principal balance of the Notes; (iv) amortization of the unpaid principal balance of the Notes; (v) all other sums payable pursuant to the Notes, the Credit Agreement, this Security Instrument and the other Loan Documents, including without limitation advances made by Mortgagee or any Lender pursuant to the terms of this Security Instrument.
 
(k)    Mortgagee may surrender the insurance policies maintained pursuant to the Credit Agreement, collect the unearned insurance premiums for such insurance policies and apply such sums as a credit on the Obligations in such priority and proportion as Mortgagee in its discretion shall deem proper, and in connection therewith, Mortgagor hereby appoints Mortgagee as agent and attorney-in-fact (which is coupled with an interest and is therefore irrevocable) for Mortgagor to collect such insurance premiums.
 
(l)    Mortgagee may apply the undisbursed balance of any deposit made by Mortgagor with Mortgagee in connection with the restoration of the Property after a casualty thereto or condemnation thereof, together with interest thereon, to the payment of the Obligations in such order, priority and proportions as Mortgagee shall deem to be appropriate in its discretion.
 
(m)    Mortgagee may pursue such other remedies as Mortgagee may have under applicable Laws.

 

 

Section 8.2.    APPLICATION OF PROCEEDS.  The purchase money, proceeds and avails of any disposition of the Property, and or any part thereof, or any other sums collected by Mortgagee on behalf of Lenders pursuant to the Notes, this Security Instrument or the other Loan Documents shall, subject to the terms and conditions of the Credit Agreement, be applied by Mortgagee to the payment of the Obligations in such priority and proportions as Mortgagee in its discretion shall deem proper.
 
Section 8.3.    RIGHT TO CURE DEFAULTS.  Upon the occurrence and during the continuance of any Event of Default, Mortgagee may, but without any obligation to do so and without notice to or demand on Mortgagor and without releasing Mortgagor from any obligation hereunder, make any payment or do any act required of Mortgagor hereunder in such manner and to such extent as Lenders may deem necessary to protect the security hereof.  Mortgagee is authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to protect its interest in the Property or to foreclose this Security Instrument or collect the Obligations, and the cost and expense thereof (including reasonable attorneys' fees to the extent permitted by Laws), with interest as provided in this Section 8.3, shall constitute a portion of the Obligations and shall be due and payable to Mortgagee on behalf of Lenders upon demand.  All such costs and expenses incurred by Mortgagee or any Lender in remedying such Event of Default or such failed payment or act or in appearing in, defending, or bringing any such action or proceeding shall bear interest at any default rate specified in the Credit Agreement, if any (the “Default Rate”), for the period after notice from Mortgagee or any Lender that such cost or expense was incurred to the date of payment to Mortgagee or such Lender.  All such costs and expenses incurred by Mortgagee or any Lender together with interest thereon calculated at the Default Rate shall be deemed to constitute a portion of the Obligations and be secured by this Security Instrument and the other Loan Documents and shall be immediately due and payable upon demand by Mortgagee or such Lender therefor.
 
Section 8.4.    ACTIONS AND PROCEEDINGS.  Mortgagee has the right to appear in and defend any action or proceeding brought with respect to the Property and to bring any action or proceeding, in the name and on behalf of Mortgagor, which Mortgagee, in its discretion, decides should be brought to protect its interest in the Property.
 
Section 8.5.    RECOVERY OF SUMS REQUIRED TO BE PAID.  Mortgagee and Lenders shall have the right from time to time to take action to recover any sum or sums which constitute a part of the Obligations as the same become due, without regard to whether or not the balance of the Obligations shall be due, and without prejudice to the right of Mortgagee and Lenders thereafter to bring an action of foreclosure, or any other action, for a default or defaults by Mortgagor existing at the time such earlier action was commenced.
 
Section 8.6.    ADDITIONAL PROVISIONS.  With respect to the Collateral, from the Effective Date until the Obligations are paid and performed in full or this Security Instrument is otherwise released by written instrument executed by Mortgagee and authorized to be recorded in the applicable public records of the jurisdiction in which the Property is located, Mortgagee is hereby irrevocably appointed the true and lawful attorney of the Mortgagor (coupled with an interest), in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the Collateral, and for that purpose Mortgagee may execute all necessary instruments of conveyance, assignment, transfer and delivery, and may substitute one or more Persons with such power, Mortgagor hereby ratifying and confirming all that its said attorney or such substitute or substitutes shall lawfully do by virtue hereof.  Notwithstanding the foregoing, Mortgagor, if so requested by Mortgagee, shall ratify and confirm any such sale or sales by executing and delivering to Mortgagee or to such purchaser or purchasers all such instruments as may be advisable, in the judgment of Mortgagee, for such purpose, and as may be designated in such request.  To the extent permitted by Laws, any such sale or sales made under or by virtue of this Section 8.6 shall operate to divest all the estate, right, 

 

 

title, interest, claim and demand whatsoever, whether at law, or in equity, of Mortgagor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Mortgagor and against any and all Persons claiming or who may claim the same, or any part thereof, from, through or under Mortgagor.  Upon any sale made under or by virtue of this Section 8.6, Mortgagee may, to the extent permitted by Laws, bid for and acquire the Property or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the Obligations secured hereby the net sales price after deducting therefrom the expenses of the sale and the cost of the auction and any other sums which Mortgagee is authorized to deduct by Laws or under this Security Instrument.  At any sale pursuant to this Section 8.6, whether made under power herein granted, under or as otherwise authorized by applicable Laws or pursuant to Legal Requirements, or by virtue of any judicial proceeding or any other legal right, remedy or recourse, it shall not be necessary for Mortgagee to be physically present, or to have constructive possession of, the Property, and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually presented and delivered to the purchaser at such sale.
 
Section 8.7.    OTHER RIGHTS, ETC.
 
i.The failure of Lenders or Mortgagee to insist upon strict performance of any term hereof shall not be deemed to be a waiver of any term of this Security Instrument or any other Loan Document.  Mortgagor shall not be relieved of Mortgagor's obligations hereunder by reason of (i) the failure of Lenders or Mortgagee to comply with any request of Mortgagor or any guarantor or indemnitor with respect to the Loan to take any action to foreclose this Security Instrument or otherwise enforce any of the provisions hereof or of the Notes or the other Loan Documents, (ii) the release, regardless of consideration, of less than the whole of the Property, or of any Person liable for the Obligations or any portion thereof unless, in connection with such release, Mortgagee releases of record this Security Instrument in its entirety, or (iii) any agreement or stipulation by Mortgagee or Lenders extending the time of payment or otherwise modifying or supplementing the terms of the Notes, this Security Instrument or the other Loan Documents.
 
ii.It is agreed that the risk of loss or damage to the Property is on Mortgagor, and neither Mortgagee nor Lenders shall have any liability whatsoever for decline in the value of the Property, for failure to maintain the insurance policies required to be maintained pursuant to the Credit Agreement, or for failure to determine whether insurance in force is adequate as to the amount of risks insured.  Possession by Mortgagee shall not be deemed an election of judicial relief if any such possession is requested or obtained with respect to any Property or collateral not in Mortgagee's possession.
 
iii.Mortgagee or Lenders may resort for the payment of the Obligations to any other security held by Mortgagee or Lenders in such order and manner as Mortgagee or Lenders, in their discretion, may elect.  Mortgagee or Lenders may take action to recover the Obligations, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of Mortgagee or Lenders thereafter to foreclose this Security Instrument.  The rights of Mortgagee and Lenders under this Security Instrument shall be separate, distinct and cumulative and none shall be given effect to the exclusion of the others.  No act of Lenders or Mortgagee shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision.  None of Lenders or Mortgagee shall be limited exclusively to the rights and remedies herein stated but shall be entitled to every right and remedy now or hereafter afforded at law or in equity.
 
iv.In the event of a foreclosure sale, whether made under the terms hereof, or under judgment of a court, the Collateral may, at the option of Mortgagee, be sold as a whole with the Land and Improvements.

 

 

Section 8.8.    RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.  Mortgagee may release any portion of the Property for such consideration as Mortgagee may require without, as to the remainder of the Property, in any way impairing or affecting the Lien or priority of this Security Instrument, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the obligations hereunder shall have been reduced by the actual monetary consideration, if any, received by Mortgagee or any Lender for such release, and may accept by assignment, pledge or otherwise any other property in place thereof as Mortgagee may require without being accountable for so doing to any other lienholder.  This Security Instrument shall continue as a Lien and security interest in the remaining portion of the Property.
 
Section 8.9.    RIGHT OF ENTRY.  Upon reasonable notice to Mortgagor, Mortgagee and its agents shall have the right to enter and inspect the Property at all reasonable times.
 
Section 8.10    BANKRUPTCY.
 
(a)    Upon the occurrence and during the continuance of an Event of Default, Mortgagee shall have the right to proceed in its own name or in the name of Lenders or in the name of Mortgagor in respect of any claim, suit, action or proceeding relating to the rejection of any Lease, including, without limitation, the right to file and prosecute, to the exclusion of Mortgagor, any proofs of claim, complaints, motions, applications, notices and other documents, in any case in respect of the lessee under such Lease under the Bankruptcy Code.
 
(b)    If there shall be filed by or against Mortgagor a petition under Bankruptcy Code, as the same may be amended from time to time, and Mortgagor, as lessor under any Lease, shall determine to reject such Lease pursuant to Section 365(a) of the Bankruptcy Code, then Mortgagor shall give Mortgagee not less than ten (10) days' prior notice of the date on which Mortgagor shall apply to the bankruptcy court for authority to reject the Lease.  Mortgagee shall have the right, but not the obligation, to serve upon Mortgagor within such ten-day period a notice stating that (i) Mortgagee demands that Mortgagor assume and assign the Lease to Mortgagee pursuant to Section 365 of the Bankruptcy Code and (ii) Mortgagee covenants to cure or provide adequate assurance of future performance under the Lease.  If Mortgagee serves upon Mortgagor the notice described in the preceding sentence, Mortgagor shall not seek to reject the Lease and shall comply with the demand provided for in clause (i) of the preceding sentence within thirty (30) days after the notice shall have been given, subject to the performance by Mortgagee of the covenant provided for in clause (ii) of the preceding sentence.
 
Section 8.11.    SUBROGATION.  If any or all of the proceeds of the Notes have been used to extinguish, extend or renew any indebtedness heretofore existing against all or any portion of the Property, then, to the extent of the funds so used, Mortgagee and Lenders shall be subrogated to all of the rights, claims, Liens, titles, and interests existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such former rights, claims, Liens, titles, and interests, if any, are not waived but rather are continued in full force and effect in favor of Mortgagee and Lenders and are merged with the Lien and security interest created herein as cumulative security for the payment and performance of the Obligations.
 
 ARTICLE 9.  INDEMNIFICATIONS
 
Section 9.1    GENERAL INDEMNIFICATION.  Mortgagor shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnitees from and against any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements 

 

 

of any counsel for an Indemnitee) (collectively, “Losses”) imposed upon or incurred by or asserted against any Indemnitee and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks , curbs, adjacent property or adjacent parking areas, streets or ways; (b) any use, nonuse or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (c) performance of any labor services or the furnishing of any materials or other property in respect of the Property or any part thereof; (d) any failure of the Property to be in compliance with any Legal Requirements; (e) any and all claims and demands whatsoever which may be asserted against Mortgagee or any Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in the Ground Lease, the Operating Lease or any Lease; or (f) the payment of any commission charge or brokerage fee to anyone which may be payable in connection with the Loan; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by Mortgagor, any Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee's obligations hereunder or under any other Loan Document, if Mortgagor, any Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.  Any amounts payable to an Indemnitee by reason of the application of this Section 9.1 shall be immediately due and payable, shall constitute a portion of the Obligations and shall bear interest at the Default Rate from the date the Loss is sustained by an Indemnitee until paid.
 
Section 9.2.    MORTGAGE AND/OR INTANGIBLE TAX.  Mortgagor shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnitees from and against any and all Losses imposed upon or incurred by or asserted against any Indemnitee and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Security Instrument or any other Loan Document.
 
Section 9.3.    ENVIRONMENTAL COVENANTS.  Certain Loan Parties have provided representations, warranties and covenants regarding environmental matters set forth either in the Credit Agreement or in the Environmental Indemnity defined therein, and Mortgagor shall comply with the aforesaid covenants regarding environmental matters.
 
Section 9.4.    MORTGAGEE'S RIGHTS.  Mortgagee and any other Person designated by Mortgagee, including but not limited to any representative of a governmental authority, and any environmental consultant, and any receiver appointed by any court of competent jurisdiction, shall have the right, but not the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition of the Property and its use, including but not limited to conducting any environmental assessment or audit (the scope of which shall be determined in Mortgagee's sole (but reasonable) discretion) and taking samples of soil, groundwater or other water, air, or building materials, and conducting other invasive testing.  Mortgagor shall cooperate with and provide access to Mortgagee and any such Person designated by Mortgagee.  Mortgagee agrees that it shall not exercise its rights under this Section 9.4 more frequently than once per calendar year unless Mortgagee reasonably believes that the Property is not in full compliance with all Environmental Laws or if an Event of Default has occurred and is continuing.

 

 

ARTICLE 10.   WAIVERS AND OTHER MATTERS
 
Section 10.1.    WAIVER OF COUNTERCLAIM.  Mortgagor hereby waives the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against it by Mortgagee or any Lender arising out of or in any way connected with this Security Instrument, the Property, the Notes, the Credit Agreement, any of the other Loan Documents or the Obligations.
 
Section 10.2.    MARSHALLING AND OTHER MATTERS.  Mortgagor hereby waives, to the extent permitted by Laws, the benefit of all Legal Requirements now or hereafter in force regarding appraisement, valuation, stay, extension, reinstatement and redemption and all rights of marshalling in the event of any sale hereunder of the Property or any part thereof or any interest therein.  Further, Mortgagor hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on behalf of Mortgagor, and on behalf of each and every Person acquiring any interest in or title to the Property subsequent to the date of this Security Instrument and on behalf of all Persons to the extent permitted by Legal Requirements.
 
Section 10.3.    WAIVER OF NOTICE.  Mortgagor shall not be entitled to any notices of any nature whatsoever from Lenders, Mortgagee except with respect to matters for which this Security Instrument or the Credit Agreement specifically and expressly provides for the giving of notice by Lenders or Mortgagee to Mortgagor and except with respect to matters for which Mortgagor is not permitted by Legal Requirements to waive its right to receive notice, and Mortgagor hereby expressly waives presentment, demand, protest, notice of protest and non-payment, or other notice of default, notice of acceleration and intention to accelerate or other notice of any kind from Lenders, Mortgagee with respect to any matter for which this Security Instrument or Legal Requirements do not specifically and expressly provide for the giving of notice by Lenders, Mortgagee to Mortgagor.
 
Section 10.4.    WAIVER OF STATUTE OF LIMITATIONS.  Mortgagor hereby expressly waives and releases to the fullest extent permitted by applicable Laws, the pleading of any statute of limitations as a defense to payment or performance of the Obligations.
 
Section 10.5.    SOLE DISCRETION OF MORTGAGEE.  Whenever pursuant to this Security Instrument, Mortgagee exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Mortgagee,-the decision of Mortgagee to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically provided herein or in the Credit Agreement) be in the sole discretion of Mortgagee and shall be final and conclusive.
 
Section 10.6.    WAIVER OF TRIAL BY JURY.  MORTGAGOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  MORTGAGOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.
 
Section 10.7.    WAIVER OF FORECLOSURE DEFENSE.  Mortgagor hereby waives any defense Mortgagor might assert or have by reason of Mortgagee's failure to make any tenant or lessee of the Property a party defendant in any foreclosure proceeding or action instituted by Mortgagee.

 

 

Section 10.8.    MORTGAGOR'S KNOWLEDGE.         MORTGAGOR   SPECIFICALLY ACKNOWLEDGES AND AGREES (a) THAT IT HAS A DUTY TO READ THIS SECURITY INSTRUMENT AND THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS HEREOF, (b) THAT IT HAS IN FACT READ THIS SECURITY INSTRUMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS SECURITY INSTRUMENT, (c) THAT IT HAS BEEN REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS SECURITY INSTRUMENT AND HAS RECEIVED THE ADVICE OF SUCH COUNSEL IN CONNECTION WITH ENTERING INTO THIS SECURITY INSTRUMENT, AND (d) THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS SECURITY INSTRUMENT PROVIDE FOR (i) CERTAIN WAIVERS AND FOR (ii) THE ASSUMPTION BY ONE PARTY OF, AND/OR RELEASE OF THE OTHER PARTY FROM, CERTAIN LIABILITIES THAT SUCH PARTY MIGHT OTHERWISE BE RESPONSIBLE FOR UNDER APPLICABLE LAWS.  MORTGAGEE FURTHER AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY SUCH PROVISIONS OF THIS SECURITY INSTRUMENT ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT SUCH PROVISIONS ARE NOT “CONSPICUOUS.”
 
Section 10.9.    USURY SAVINGS PROVISIONS.  It is the intent of Mortgagee, Lenders and Mortgagor in the execution of the Credit Agreement and the other Loan Documents and any other written or oral agreement by Mortgagor in favor of Mortgagee and Lenders to contract in strict compliance with applicable usury Laws.  In furtherance thereof, Mortgagee, Lenders and Mortgagor stipulate and agree that none of the terms and provisions contained in the Credit Agreement and the other Loan Documents, or in any other written or oral agreement by Mortgagor or any Loan Party in favor of Mortgagee and Lenders, shall ever be construed to create a contract to pay for the use, forbearance or detention of money, or interest at a rate in excess of the maximum interest rate permitted to be charged by applicable Laws; that neither Mortgagor nor any guarantors, endorsers or other Persons now or hereafter becoming liable for payment of the Obligations are agreeing to pay at a rate in excess of the maximum interest that may be lawfully charged under applicable Laws; and that the provisions of this subsection shall control over all other provisions of the Credit Agreement and the other Loan Documents or any other oral or written agreements which may be in apparent conflict herewith.  Mortgagee and Lenders expressly disavow any intention to charge or collect excessive unearned interest or finance charges in the event the maturity of the Loan or the remaining Obligations are accelerated.  If the maturity of the Loan or the remaining Obligations shall be accelerated for any reason or if the principal of the Loan or the remaining Obligations are paid prior to the end of the term of the Loan or the Obligations, as applicable, and as a result thereof the interest received for the actual period of existence of the Loan or the Obligations, as applicable, exceeds the applicable maximum lawful rate, Mortgagee and Lenders shall, at Mortgagee's option, either refund to Mortgagor the amount of such excess or credit the amount of such excess against the principal balance of the Obligations then outstanding and thereby shall render inapplicable any and all penalties of any kind provided by applicable Laws as a result of such excess interest.  In the event that Mortgagee and Lenders shall contract for, charge or receive any amount or amounts and/or any other thing of value which are determined to constitute interest which would increase the effective interest rate on the Loan or the Obligations to a rate in excess of that permitted to be charged by applicable Laws, an amount equal to interest in excess of the lawful rate shall, upon such determination, at the option of Mortgagee, be either immediately returned to Mortgagor or credited against the Obligations then outstanding, in which event any and all penalties of any kind under applicable Laws as a result of such excess interest shall be inapplicable.

 

 

ARTICLE 11.  CROSS-COLLATERALIZATION
 
Section 11.1.    CROSS-COLLATERALIZATION.  Mortgagor acknowledges that the Obligations are secured by this Security Instrument together with those certain other Mortgages (as defined in the Credit Agreement) now or hereafter given by Borrower (or any one or more of them) to Mortgagee (whether one or more, collectively, the “Other Mortgages”) encumbering the real and personal property more particularly described in the Other Mortgages (such real and personal property, collectively, the “Other Properties”), all as set forth in the Credit Agreement.  Upon the occurrence of an Event of Default, Mortgagee shall have the right to institute a proceeding or proceedings for the total or partial foreclosure of this Security Instrument and any or all of the Other Mortgages whether by court action, power of sale or otherwise, under any applicable provision of Laws, for all of the Obligations and the Lien and the security interest created by the Other Mortgages shall continue in full force and effect without loss of priority as a Lien and security interest securing the payment of that portion of the Obligations then due and payable but still outstanding.  Mortgagor acknowledges and agrees that the Property and the Other Properties are located in one or more states and/or counties, and therefore Mortgagee shall be permitted to, or as the case may be, to direct certain named trustees to, enforce payment and performance of the Obligations and the performance of any term, covenant or condition of the Notes, this Security Instrument, the Other Mortgages or the other Loan Documents and exercise any and all rights and remedies under the Notes, this Security Instrument, the other Loan Documents or the Other Mortgages or, as provided by law or at equity, by one or more proceedings, whether contemporaneous, consecutive or both, to be determined by Mortgagee, in its sole discretion, in any one or more of the states or counties in which the Property or any of the Other Properties are located.  Neither the acceptance of this Security Instrument, the Other Mortgages or the other Loan Documents nor the enforcement thereof in any one state or county, whether by court action, foreclosure, power of sale or otherwise, shall prejudice or in any way limit or preclude enforcement by court action, foreclosure, power of sale or otherwise, of the Notes, this Security Instrument, the Other Mortgages or the other Loan Documents through one or more additional proceedings in that state or county or in any other state or county.  Any and all sums received by Mortgagee or any Lender under the Notes, this Security Instrument, and the other Loan Documents shall be applied to the Obligations in such order and priority as Mortgagee shall determine, in its sole discretion, without regard to any portion of the Loan allocated to any Property or any of the Other Properties or the appraised value of the Property or any of the Other Properties.
 
ARTICLE 12.  MORTGAGEE AND NOTICES
 
Section 12.1.    FAILURE TO ACT.  Notwithstanding anything to the contrary contained herein or in any other Loan Document, the failure of Mortgagee to take any action hereunder or under any other Loan Document shall not (a) be deemed to be a waiver of any term or condition of this Security Instrument or any of the other Loan Documents, (b) adversely affect any rights of Mortgagee or any Lender hereunder or under any other Loan Document, or (c) relieve Mortgagor of any of Mortgagor's obligations hereunder or under any other Loan Document.
 
Section 12.2    NOTICES.  All notices or other written communications hereunder shall be delivered in accordance with the applicable terms and conditions of the Credit Agreement (including that notices to Mortgagor shall be sent to each of Mortgagor's addresses set forth in the Credit Agreement and this Security Instrument); provided, however, that any notice given in accordance with the requirements of any applicable statute (including, without limitation, statutes governing foreclosure or notices of foreclosure) shall be effective when given in accordance with statutory requirements, notwithstanding anything to the contrary contained herein or in any other Loan Document.

 

 

ARTICLE 13.   APPLICABLE LAWS
 
Section 13.1.    GOVERNING LAWS; JURISDICTION; ETC.
 
(a)    GOVERNING LAW.  THIS SECURITY INSTRUMENT SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (OTHER THAN THOSE CONFLICT OF LAW PROVISIONS THAT WOULD DEFER TO THE SUBSTANTIVE LAWS OF ANOTHER JURISDICTION). WITHOUT IN ANY WAY LIMITING THE PRECEDING CHOICE OF LAW, THE PARTIES ELECT TO BE GOVERNED BY NEW YORK LAW IN ACCORDANCE WITH, AND ARE RELYING (AT LEAST IN PART) ON, SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK; PROVIDED HOWEVER, THAT WITH RESPECT TO THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED BY THIS SECURITY INSTRUMENT AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, THE LAWS OF THE STATE WHERE THE LAND IS LOCATED SHALL APPLY.
 
(b)    SUBMISSION TO JURISDICTION.  WITH RESPECT TO ANY CLAIM OR ACTION ARISING UNDER THIS SECURITY INSTRUMENT, MORTGAGOR (A) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK, NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF, AND (B) IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING ON VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT BROUGHT IN ANY SUCH COURT, IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN THIS SECURITY INSTRUMENT WILL BE DEEMED TO PRECLUDE AGENT FROM BRINGING AN ACTION OR PROCEEDING WITH RESPECT HERETO IN ANY OTHER JURISDICTION. 
 
(c)    SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.2.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
 
Section 13.2.    PROVISIONS SUBJECT TO APPLICABLE LAWS.  All rights, powers and remedies provided in this Security Instrument may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of Laws and are intended to be limited to the extent necessary so that they will not render this Security Instrument invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any applicable Laws.  If any term of this Security Instrument or any application thereof shall be invalid or unenforceable, the remainder of this Security Instrument and any other application of the term shall not be affected thereby.

 

 

ARTICLE 14.  DEFINITIONS
 
Section 14.1    GENERAL DEFINITIONS.  Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Security Instrument may be used interchangeably in singular or plural form and:
 
(a)    the word “Mortgagor” shall mean “each Mortgagor and any subsequent owner or owners of the Property or any part thereof or any interest therein”;
 
(b)    the word “Mortgagee” shall mean “Mortgagee and any of Mortgagee's successors and assigns”;
 
(c)    the word “Lenders” shall mean “all or each of the Lenders and any of their or its respective successors and assigns”;
 
(d)    the word “Notes” shall mean “the Notes and any other evidence of indebtedness secured by this Security Instrument”;
 
(e)    the word “Property” shall include any portion of the Property and any interest therein;
 
(f)    the word “Other Properties” shall include any portion of the Other Properties and any interest therein; and
 
(g)    the phrases “attorneys' fees”, “legal fees” and “counsel fees” shall include any and all attorneys', paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels incurred or paid by Lender in protecting its interest in the Property, the Leases and the Rents and enforcing its rights hereunder.
 
ARTICLE 15.  MISCELLANEOUS PROVISIONS
 
Section 15.1.    NO ORAL CHANGE.  This Security Instrument, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Mortgagor, Lenders or Mortgagee, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.
 
Section 15.2.    SUCCESSORS AND ASSIGNS.  This Security Instrument shall be binding upon and inure to the benefit of Mortgagor, Mortgagee and Lenders and their respective successors and assigns forever.
 
Section 15.3.    INAPPLICABLE PROVISIONS.  If any term, covenant or condition of the Credit Agreement, the Notes or this Security Instrument is held to be invalid, illegal or unenforceable in any respect, the Credit Agreement, the Notes and this Security Instrument shall be construed without such provision.
 
Section 15.4.    HEADINGS, ETC.  The headings and captions of various Sections of this Security Instrument are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof.
 

 

 

Section 15.5.    NUMBER AND GENDER.  Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa.
 
Section 15.6.    ENTIRE AGREEMENT.  This Security Instrument and the other Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties, whether oral or written, are superseded by the terms of this Security Instrument and the other Loan Documents.
 
Section 15.7.    LIMITATION ON MORTGAGEE'S OR LENDERS' RESPONSIBILITY.  No provision of this Security Instrument shall operate to place any obligation or liability for the control, care, management or repair of the Property upon Lenders or Mortgagee, nor shall it operate to make Lenders or Mortgagee responsible or liable for any waste committed on the Property by the tenants or any other Person, or for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any tenant, licensee, employee or stranger.  Nothing herein contained shall be construed as constituting Lenders or Mortgagee a “mortgagee in possession.”
 
ARTICLE 16.   STATUS OF MORTGAGOR
 
Section 16.1    STATUS OF MORTGAGOR.  Mortgagor's exact legal name is correctly set forth in the first paragraph of this Security Instrument and the signature block at the end of this Security Instrument.  Mortgagor is an organization of the type specified in the first paragraph of this Security Instrument.  Mortgagor is incorporated in or organized under the Laws of the state specified in Section 1.4 of this Security Instrument.  Mortgagor's principal place of business and chief executive office, and the place where Mortgagor kept its books and records, including recorded data of any kind or nature, regardless of the medium or recording, including software, writings, plans, specifications and schematics, has been for the preceding four months (or, if less, the entire period of the existence of Mortgagor) c/o FelCor Lodging Trust Incorporated, 545 E. John Carpenter Freeway, Suite 1300, Irving, Texas 75062, Attention: General Counsel.  Mortgagor's organizational identification number, if any, assigned by the state of incorporation or organization is correctly set forth in Section 1.4 of this Security Instrument.  Mortgagor will not change or permit to be changed (a) Mortgagor's name, (b) Mortgagor's identity (including its trade name or names), (c) Mortgagor's principal place of business set forth on the first page of this Security Instrument, (d) the corporate, partnership or other organizational structure of Mortgagor, (e) Mortgagor's state of organization, or (f) Mortgagor's organizational number, without notifying Lender of such change in writing at least thirty (30) days prior to the effective date of such change and, in the case of a change in Mortgagor's structure not permitted by the Credit Agreement, without first obtaining the prior written consent of Lender.  If Mortgagor does not now have an organizational identification number and later obtains one, Mortgagor promptly shall notify the Lender of such organizational identification number.
 
ARTICLE 17.   INTENTIONALLY OMITTED
 
ARTICLE 18.  GROUND LEASE AND OPERATING LEASE PROVISIONS.
 
Section 18.1.    NO MERGER OF FEE AND LEASEHOLD ESTATES, RELEASES.  So long as any portion of the Obligations remains unpaid or unsatisfied or until this Security Instrument is reconveyed pursuant to the terms hereof or the Credit Agreement, unless Mortgagee shall otherwise consent, the fee title to the Land and the leasehold estates created under the Ground Lease and the Operating Lease shall not merge but shall always be kept separate and distinct, notwithstanding the union of such estates by purchase, 

 

 

operation of Laws or otherwise.  Mortgagee reserves the right, at any time, to release portions of the Property, including, but not limited to, the leasehold estates created by the Ground Lease and the Operating Lease, with or without consideration, at Mortgagee's election, without waiving or affecting any of its rights hereunder or under the Notes or the other Loan Documents and any such release shall not affect Mortgagee's rights in connection with the portion of the Property not so released.
37.MORTGAGOR'S ACQUISITION OF FEE ESTATE.  So long as any portion of the Obligations remains unpaid or unsatisfied or until this Security Instrument is reconveyed pursuant to the terms hereof or the Credit Agreement, if any Mortgagor shall be the owner of fee title to and/or a leasehold estate in all or any portion of the Property, the Lien of this Security Instrument shall be spread to cover such additional title and rights and said title and rights shall be deemed to be included in the Property.  Mortgagor agrees, at its sole cost and expense, including without limitation, reasonable attorney's fees to (i) execute any and all documents or instruments necessary to confirm that its title and rights to the Property are subject to the Lien of this Security Instrument; and (ii) provide a title insurance policy which shall insure that the Lien of this Security Instrument is a first lien on its title and rights to the Property.
38.Ground Lease Representations.  Each Mortgagor represents and warrants to Agent that: (i) the Ground Lease is in full force and effect and has not been modified or amended in any manner whatsoever, except as described above; (ii) the tenant under the Ground Lease enjoys the quiet and peaceful possession of the property demised thereby; (iii) there are no defaults under the Ground Lease by any party thereunder, and no event has occurred which but for the passage of time, or notice, or both would constitute a default under the Ground Lease; (iv) all rents, additional rents and other sums due and payable under the Ground Lease have been paid in full; (v) no party under the Ground Lease has commenced any action or given or received any notice for the purpose of terminating the Ground Lease; (vi) the consummation of the transactions contemplated hereby will not result in any breach of, or constitute a default under, the Ground Lease; (vii) all actions which must be taken for Agent to have the rights of a leasehold mortgagee or mortgagee pursuant to the Ground Lease have been taken and completed; and (viii) no Mortgagor has granted any other leasehold mortgage or made any other assignment, pledge or hypothecation of its interest under the Ground Lease.
 
Section 18.4.    GROUND LEASE COVENANTS.
 
i.Mortgagor shall (i) pay all rents, additional rents and other sums required to be paid by it, as tenant under and pursuant to the provisions of the Ground Lease, (ii) diligently perform and observe all of the terms, covenants and conditions of the Ground Lease on its part to be performed thereunder, (iii) promptly notify Agent of the giving of any notice under the Ground Lease of any default by any party thereunder, and deliver to Agent a true copy of each such notice within five (5) days of receipt and (iv) promptly notify Agent of any bankruptcy, reorganization or insolvency of any party to the Ground Lease or of any notice thereof, and deliver to Agent a true copy of such notice within five (5) days of receipt.  No Mortgagor shall, without the prior consent of Agent, surrender the leasehold estate created by the Ground Lease or terminate or cancel the Ground Lease or modify, change, supplement, alter, amend or waive any term of the Ground Lease, either orally or in writing, except as expressly set forth in Section 7.23(a) of the Credit Agreement, and if any Mortgagor shall default in the performance or observance of any term, covenant or condition of the Ground Lease, Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Ground Lease to be performed or observed, to the end that the rights of such Mortgagor in, to and under the Ground Lease shall be kept unimpaired and free from default.  If the landlord under the Ground Lease shall deliver to Agent a copy of any notice of default under the Ground Lease, such notice shall constitute full protection to Agent for any action taken or omitted to be taken by Agent, in good faith, in reliance thereon.  Each Mortgagor shall exercise its option, i

 

 

f any, to extend or renew the term of the Ground Lease upon demand by Agent made at any time within one (1) year prior to the last day upon which any such option may be exercised, and each Mortgagor hereby expressly authorizes and appoints Agent its attorney-in-fact to exercise any such option in the name of and upon behalf of such Mortgagor, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest.
 
ii.Notwithstanding anything contained in the Ground Lease to the contrary and except for the Operating Lease, no Mortgagor shall further sublet any portion of the Property without prior written consent of Agent, except as expressly permitted by Section 7.16 of the Credit Agreement.  
 
iii.In the event of any default by any Mortgagor in the performance of any of its obligations under the Ground Lease, including, without limitation, any default in the payment of rent and other charges and impositions made payable by the lessee thereunder, then, in the case of a default in the payment of any monetary obligation, Agent may, at its option and without notice, make payment to cure such default, or, in the case of a default in the performance of any non-monetary obligation, Agent may, at its option, cause the default or defaults to be remedied and otherwise exercise any and all of the rights of Mortgagor thereunder in the name of and on behalf of Mortgagor.  
 
iv.If pursuant to subsection 365(h) of the Bankruptcy Code, any Mortgagor seeks to offset, against the rent reserved in the Ground Lease, the amount of any damages caused by the nonperformance by the ground lessor of any of its obligations thereunder after the rejection by such ground lessor under the Bankruptcy Code, then such Mortgagor shall not effect any offset of the amounts so objected to by Agent.  If Agent has failed to object as aforesaid within ten (10) days after notice from such Mortgagor in accordance with the first sentence of this subsection, such Mortgagor may proceed to offset the amounts set forth in such Mortgagor's notice to Agent.
 
v.In any action, proceeding, motion or notice shall be commenced or filed in respect of the ground lessor of all or any part of the Property in connection with any case under the Bankruptcy Code, Agent and Mortgagor shall cooperatively conduct and control any such litigation with counsel agreed upon between Mortgagor and Agent in connection with such litigation.  Borrower shall, upon demand, pay to Agent all costs and expenses (including reasonable attorneys' fees and costs) actually paid or actually incurred by Agent or any Lender in connection with the cooperative prosecution or conduct of any such proceedings.  All such costs and expenses shall be secured by the Lien of this Security Instrument.
 
Section 18.5.    NO ASSIGNMENT OF GROUND LEASE.  Notwithstanding anything to the contrary contained in this Security Instrument, this Security Instrument shall not constitute an assignment of the Ground Lease within the meaning of any provision thereof prohibiting its assignment and Mortgagee shall have no liability or obligation thereunder by reason of its acceptance of this Security Instrument.  Mortgagee shall be liable for the obligations of the lessee arising under the Ground Lease for only that period of time which Mortgagee is in possession of the Property or has acquired, by foreclosure or otherwise, and is holding all of Mortgagor's right, title and interest therein.
 
Section 18.6.    GROUND LEASE COVENANTS, REPRESENTATIONS AND WARRANTIES.  Supplementing Sections 18.3 and 18.4 above, the provisions of the Credit Agreement respecting Mortgagor's covenants, representations and warranties with respect to the Ground Lease, including without limitation, Section 6.38 and Section 7.23 thereof, are hereby incorporated herein by reference as if fully set forth herein.
 

 

 

Section 18.7.     OPERATING LEASE COVENANTS, REPRESENTATIONS AND WARRANTIES.  The provisions of the Credit Agreement respecting Mortgagor's covenants, representations and warranties with respect to the Operating Lease, including without limitation, Section 6.39 thereof, are hereby incorporated herein by reference as if fully set forth herein.  Without limiting the foregoing, Owner hereby confirms its consent to Operator's grant of the mortgage lien and security interests encumbering the Operating Lease contained herein.
 
ARTICLE 19.  THIRD PARTY MORTGAGOR PROVISIONS
 
Section 19.1    THIRD PARTY MORTGAGOR.  Each Mortgagor agrees to the provisions of this Article of the Security Instrument with respect to its interest in the property encumbered by this Security Instrument and the obligations secured hereby to the extent the proceeds of the secured obligations have been paid to or for the benefit of a person (the “Third Party Borrower”) other than such Mortgagor.
 
Section 19.2    AUTHORIZATIONS TO MORTGAGEE.  Mortgagor authorizes Mortgagee, without notice or demand and without affecting their liability hereunder, from time to time to (i) renew, extend, accelerate or otherwise change the time for payment of, or otherwise change the terms of the secured indebtedness or any part thereof, including increase or decrease of the rate of interest thereon; (ii) take and hold other security for the payment of the indebtedness, and exchange, enforce, waive and release any such security; (iii) apply such security and direct the order or manner of sale thereof, including without limitation, a non-judicial sale permitted by the terms of the controlling security agreement or pledge agreement, as Mortgagee in its discretion may determine; and (iv) release or substitute any one or more of the endorsers or guarantors of any indebtedness.
 
Section 19.3.    MORTGAGOR'S WARRANTIES.  Mortgagor warrants that:  (i) this Security Instrument is executed at the request of Third Party Borrower; and (ii) Mortgagor has adequate means of obtaining from Third Party Borrower on a continuing basis financial and other information pertaining to Third Party Borrower's financial condition without relying on Mortgagee therefor.  Mortgagor agrees to keep adequately informed from such means of any facts, events or circumstances which Mortgagor considers material or which might in any way affect Mortgagor's risks hereunder.  With respect to information or material acquired in the normal course of Mortgagee's relationship with Third Party Borrower, Mortgagor agrees that Mortgagee shall have no obligation to disclose such information or material to Mortgagor.
 
Section 19.4    MORTGAGOR'S WAIVERS.
 
(a)    Mortgagor waives any right to require Mortgagee to (A) proceed against any person, including Third Party Borrower; (B) proceed against or exhaust any collateral held from Third Party Borrower, any endorser or guarantor or any other person; (C) give notice of terms, time and place of any public or private sale of personal property or real property security held from Mortgagors; (D) pursue any other remedy in Mortgagee's power; or (E) make any presentments, demands for performance, or give any notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any obligations or evidences of indebtedness held by Mortgagee as security, in connection with any obligations or evidences of indebtedness which constitute in whole or in part the indebtedness secured hereunder, or in connection with the creation of new or additional indebtedness.  Mortgagor agrees that, in case of default and foreclosure, Mortgagee may enforce this Security Instrument against any or all interests encumbered by this Security Instrument in a single proceeding.
 

 

 

(b)    Mortgagor waives any defense arising by reason of (A) any disability or other defense of Third Party Borrower, any endorser or guarantor or any other person; (B) the cessation from any cause whatsoever, other than payment in full of the indebtedness of Third Party Borrower, of the liability of any endorser or guarantor or any other person; (C) the application by Third Party Borrower of the proceeds of any indebtedness for purposes other than the purpose represented by Third Party Borrower to Mortgagee or intended or understood by Mortgagee or Mortgagor; (D) any act or omission by Mortgagee which directly or indirectly results in or aids the discharge of Third Party Borrower or of any indebtedness by operation of law or otherwise; (E) any modification to any secured indebtedness, and including without limitation the renewal, extension, acceleration or other change in time for payment of the indebtedness, or other change in the terms of the indebtedness or any part thereof, including an increase or decrease of the rate of interest thereon; and (F) all suretyship and guarantor's defenses generally.
 
(c)    Mortgagor shall have no right of subrogation, and Mortgagor further waives any right to enforce any remedy which Mortgagee now has or may hereafter have against Third Party Borrower, any endorser or guarantor or any other person, and waives any benefit of, or any right to participate in any security whatsoever now or hereafter held by Mortgagee from Third Party Borrower or any other person.
 
Section 19.5.    FURTHER EXPLANATION OF WAIVERS.  Mortgagor waives all rights and defenses that the Mortgagor may have because the Third Party Borrower's debt is secured by real property.  This means, among other things:
 
(a)    The Mortgagee may foreclose against the Mortgagor's interests without first foreclosing on any real or personal property collateral pledged by the Third Party Borrower;
 
(b)    If the Mortgagee forecloses on any real property collateral pledged by the Third Party Borrower: (A) the amount of the debt may reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and (B) the Mortgagee may foreclose against the Mortgagor's interests even if the Mortgagee, by foreclosing on the Third Party Borrower's interests, has destroyed any right the Mortgagor may have to collect from the Third Party Borrower.
 
This is an unconditional and irrevocable waiver of any rights and defenses the Mortgagor may have because the Third Party Borrower's debt is secured by the Third Party Borrower's interest in real property.
Section 19.6.    MORTGAGOR'S UNDERSTANDINGS WITH RESPECT TO WAIVERS.
 
(a)    Mortgagor warrants and agrees that Mortgagor has had all necessary opportunity to secure any advice which Mortgagor desires with respect to each of the waivers set forth above, that such waivers are made with Mortgagor's full knowledge of their significance and consequences, and that under the circumstances, the waivers are reasonable and not contrary to public policy or law.
 
(b)    Notwithstanding the foregoing, all waivers in this paragraph shall be effective only to the extent permitted by law.
 

 

 

ARTICLE 20.   STATE SPECIFIC PROVISIONS
 
(a)    Intentionally omitted.
 
 
 [Remainder of page intentionally blank.
Signature page(s) follow.]
 
 

 

 

 
IN WITNESS WHEREOF, Mortgagor has executed this Security Instrument as of the day and year set forth above. 
 
 
	
					
	 
	 
	FELCOR LODGING LIMITED PARTNERSHIP,

	 
	 
	a Delaware limited partnership

	 
	 
	 
	 
	 

	 
	 
	By:
	FelCor Lodging Trust Incorporated, a Maryland corporation, its General Partner

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Allison S. Navitskas

	 
	 
	 
	Name:
	Allison S. Navitskas

	 
	 
	 
	Title:
	Vice President

 
 
	
				
	STATE OF
	)
	 
	 

	 
	)
	ss:
	 

	COUNTY OF
	)
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

 
 
 
            The foregoing instrument was acknowledged before me this _____ day of March, 2011, by ___________________, as ___________________ of FelCor Lodging Trust Incorporated, a Maryland corporation, as General Partner of FELCOR LODGING LIMITED PARTNERSHIP, a Delaware limited partnership, who is [ ] personally known to me or [ ] has produced ____________________________ as identification.
 
 
                                                                  NOTARY PUBLIC:
 
                                                                                                                                    
                                                                  Notary Signature
(NOTARY SEAL)
                                                                                                                              
                                                                  Notary Printed Name
                                                                  My Commission Expires:                    
 
 
 
 
 
 
 
 

 

 

 
	
					
	 
	 
	FELCOR/JPM BOCA RATON HOTEL, L.L.C.

	 
	 
	a Delaware limited liability company

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Allison S. Navitskas

	 
	 
	 
	Name:
	Allison S. Navitskas

	 
	 
	 
	Title:
	Vice President

 
 
	
				
	STATE OF
	)
	 
	 

	 
	)
	ss:
	 

	COUNTY OF
	)
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

 
 
 
            The foregoing instrument was acknowledged before me this _____ day of March, 2011, by Allison Navitskas, as Vice President of  FELCOR/JPM BOCA RATON HOTEL, L.L.C., a Delaware limited liability company, who is [ ] personally known to me or [ ] has produced ____________________________ as identification.
 
 
                                                                  NOTARY PUBLIC:
 
                                                                                                                                    
                                                                  Notary Signature
(NOTARY SEAL)
                                                                                                                              
                                                                  Notary Printed Name
                                                                  My Commission Expires:                    

 

 

 
	
					
	 
	 
	DJONT/JPM BOCA RATON LEASING, L.L.C.

	 
	 
	a Delaware limited liability company

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Allison S. Navitskas

	 
	 
	 
	Name:
	Allison S. Navitskas

	 
	 
	 
	Title:
	Vice President

 
 
	
				
	STATE OF
	)
	 
	 

	 
	)
	ss:
	 

	COUNTY OF
	)
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

 
 
 
            The foregoing instrument was acknowledged before me this _____ day of March, 2011, by Allison Navitskas, as Vice President of  DJONT/JPM BOCA RATON LEASING, L.L.C., a Delaware limited liability company, who is [ ] personally known to me or [ ] has produced ____________________________ as identification.
 
 
                                                                  NOTARY PUBLIC:
 
                                                                                                                                    
                                                                  Notary Signature
(NOTARY SEAL)
                                                                                                                              
                                                                  Notary Printed Name
                                                                  My Commission Expires:ex-4_1.htm

AFH Acquisition IV, Inc. 8-K

 

 

Exhibit 4.1

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

 

	Date of Issuance:	 	 	  Void after:
	 	 	 	 
	[_____] 	 	 	 [_______]

 

EMMAUS MEDICAL, INC.

 

Warrant to Purchase Shares of

Common Stock

This Warrant is issued to [_____] (the “Holder”) by EMMAUS MEDICAL, INC., a Delaware corporation (the “Company”) in consideration for entering into those certain Purchaser Questionnaire and Subscription Agreements, dated as accepted on [_____] and [_____] (the “Purchase Agreements”) providing for the purchase of shares of Common Stock of the Company by Holder.

 

1.           Purchase of Shares.

 

(a)           Number of Shares.  Subject to the terms and conditions set forth herein, the Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the Holder in writing), to purchase from the Company up to 210 fully paid and nonassessable shares of the Company’s Common Stock (the “Common Stock”).

 

(b)           Exercise Price.  The exercise price for the shares of Common Stock issuable pursuant to this Section I (the “Shares”) shall be $90.00 per share (the “Exercise Price”).  The Shares and the Exercise Price shall be subject to adjustment pursuant to Section 7 hereof.

 

2.           Exercise Period.  This Warrant shall be exercisable, in whole or in part, during the term commencing on the date hereof and ending at 5:00 p.m., Pacific Standard Time on [_____] (the “Exercise Period”); provided, however, that this Warrant shall no longer be exercisable and become null and void upon the consummation of any “Termination Event”, defined as the consummation of the Company’s sale of Common Stock or other securities pursuant to a registration statement under the Securities Act of 1933, as amended (other than a registration statement relating either to sale of securities to employees of the Company pursuant to its stock option, stock purchase or similar plan or a SEC Rule 145 transaction).  In the event of a Termination Event, the Company shall notify the Holder at least ten (10) days prior to the consummation of such Termination Event.

 

  

  

  

3.           Method of Exercise.

 

(a)           While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the Holder may exercise, in whole or in part, the purchase rights evidenced hereby.  Such exercise shall be effected by:

 

(i)           the surrender of the Warrant, together with a duly executed copy of the Notice of Exercise attached hereto, to the Secretary of the Company at its principal office (or at such other place as the Company shall notify the Holder in writing); and

 

(ii)           the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased.

 

(b)           Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant is surrendered to the Company as provided in Section 3(a) above.  At such time, the person or persons in whose name or names any certificate for the Shares shall be issuable upon such exercise as provided in Section 3(c) below shall be deemed to have become the holder or holders of record of the Shares represented by such certificate.

 

(c)           As soon as practicable after the exercise of this Warrant in whole or in part, the Company at its expense will cause to be issued in the name of, and delivered to, the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct:

 

(i)           a certificate or certificates for the number of Shares to which such Holder shall be entitled, and

 

(ii)           in case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of Shares equal to the number of such Shares described in this Warrant minus the number of such Shares purchased by the Holder upon all exercises made in accordance with Section 3(a) above or Section 4 below.

 

4.           Net Exercise.  In lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with notice of such election (a “Net Exercise”).  A Holder who Net Exercises shall have the rights described in Sections 3(b) and 3(c) hereof, and the Company shall issue to such Holder a number of Shares computed using the following formula:

 

	  	
X =  

	
Y(A – B)

	  
	  	
A

	  

 

Where

 

	
X =

	
The number of Shares to be issued to the Holder.

 

	
Y =

	
The number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being cancelled (at the date of such calculation).

 

	
A =

	
The fair market value of one (I) Share (at the date of such calculation).

 

  

- 2 -

  

	
B =

	
The Exercise Price (as adjusted to the date of such calculation).

 

For purposes of this Section 4, the fair market value of a Share shall mean the average of the closing prices of the Shares (or equivalent shares of Common Stock into which the Common Stock underlying this Warrant is convertible) quoted in the over-the-counter market in which the Shares (or equivalent shares of Common Stock into which the Common Stock underlying the Warrant is convertible) are traded or the closing price quoted on any exchange or electronic securities market on which the Shares (or equivalent shares of Common Stock into which the Common Stock underlying the Warrant is convertible) are listed, whichever is applicable, as published in The Wall Street Journal for the thirty (30) trading days prior to the date of determination of fair market value (or such shorter period of time during which such Shares (or equivalent shares of Common Stock into which the Common Stock underlying the Warrant is convertible) were traded over-the-counter or on such exchange).  In the event that this Warrant is exercised pursuant to this Section 4 in connection with the Initial Public Offering, the fair market value per Share shall be the per share offering price to the public of the Initial Public Offering of the shares of Common Stock into which the Common Stock underlying this Warrant is convertible.  If the Shares or shares of Common Stock are not traded on the over-the-counter market, an exchange or an electronic securities market, the fair market value shall be the price per Share that the Company could obtain from a willing buyer for Shares sold by the Company from authorized but unissued Shares, as such prices shall be determined in good faith by the Company’s Board of Directors.

 

5.           Representations and Warranties of the Company.  In connection with the transactions provided for herein, the Company hereby represents and warrants to the Holder that:

 

(a)           Organization, Good Standing, and Qualification.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of California and has all requisite corporate power and authority to carry on its business as now conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.

 

(b)           Authorization.  Except as may be limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights, all corporate action has been taken on the part of the Company, its officers and directors necessary for the authorization, execution and delivery of this Warrant.  The Company has taken all corporate action required to make all the obligations of the Company reflected in the provisions of this Warrant the valid and enforceable obligations they purport to be.  The issuance of this Warrant will not be subject to preemptive rights of any shareholders of the Company.  The Company has authorized sufficient shares of Common Stock and Common Stock to allow for the exercise of this Warrant.

 

6.           Representations and Warranties of the Holder.  In connection with the transactions provided for herein, the Holder hereby represents and warrants to the Company that:

 

(a)           Authorization.  Holder represents that it has full power and authority to enter into this Warrant.  This Warrant constitutes the Holder’s valid and legally binding obligation, enforceable in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement

 

  

- 3 -

  

 

of creditors’ rights and (ii) laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(b)           Purchase Entirely for Own Account.  The Holder acknowledges that this Warrant is entered into by the Holder in reliance upon such Holder’s representation to the Company that the Warrant and the Shares (collectively, the “Securities”) will be acquired for investment for the Holder’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Holder has no present intention of selling, granting any participation in or otherwise distributing the same.  By acknowledging this Warrant, the Holder further represents that the Holder does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Securities.

 

(c)           Disclosure of Information.  The Holder acknowledges that it has received all the information it considers necessary or appropriate for deciding whether to acquire the Securities.  The Holder further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities.

 

(d)           Investment Experience.  The Holder is an investor in securities of companies in the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Securities.  If other than an individual, the Holder also represents it has not been organized solely for the purpose of acquiring the Securities.

 

(e)           Accredited Investor.  The Holder is an “accredited investor” within the meaning of Rule 501 of Regulation D, as presently in effect, as promulgated by the Securities and Exchange Commission (the “SEC”) under the Act.

 

(f)           Restricted Securities.  The Holder understands that the Securities are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Act, only in certain limited circumstances.  In this connection, Holder represents that it is familiar with Rule 144, as presently in effect, as promulgated by the SEC under the Act (“Rule 144”), and understands the resale limitations imposed thereby and by the Act.

 

(g)           Further Limitations on Disposition.  Without in any way limiting the representations set forth above, the Holder further agrees not to make any disposition of all or any portion of the Shares unless and until the transferee has agreed in writing for the benefit of the Company to be bound by the terms of this Warrant, including, without limitation, this Section 6, Section 10, and:

 

(i)           there is then in effect a registration statement under the Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(ii)           the Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, the Holder

 

  

- 4 -

  

shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such shares under the Act.  It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in extraordinary circumstances.

 

(h)           Legends.  It is understood that the Securities may bear the following or a similar legend:

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.”

 

7.           Adjustment of Exercise Price and Number of Shares.  The number and kind of Shares purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

 

(a)           Subdivisions, Combinations and Other Issuances.  If the Company shall at any time after the issuance but prior to the expiration of this Warrant subdivide its Common Stock, by split-up or otherwise, or combine its Common Stock, or issue additional shares of its Common Stock as a dividend with respect to any shares of its Common Stock, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination.  Appropriate adjustments shall also be made to the Exercise Price payable per share, but the aggregate Exercise Price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same.  Any adjustment under this Section 7(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.

 

(b)           Reclassification, Reorganization and Consolidation.  In case of any reclassification, capital reorganization or change in the capital stock of the Company (other than as a result of a subdivision, combination or stock dividend provided for in Section 7(a) above), then, as a condition of such reclassification, reorganization or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon the exercise of this Warrant, the kind and amount of shares of stock and other securities or property receivable in connection with such reclassification, reorganization or change by a holder of the same number and type of securities as were purchasable as Shares by the Holder immediately prior to such reclassification, reorganization or change.  In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall

 

  

- 5 -

  

thereafter be applicable with respect to any shares of stock or other securities or property deliverable upon exercise hereof, and appropriate adjustments shall be made to the Exercise Price per Share payable hereunder, provided the aggregate Exercise Price shall remain the same.

 

(c)           Notice of Adjustment.  When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company shall promptly notify the Holder of such event and of the number of Shares or other securities or property thereafter purchasable upon exercise of this Warrant.

 

8.           No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

 

9.           No Shareholder Rights.  Prior to exercise of this Warrant, the Holder shall not be entitled to any rights of a shareholder with respect to the Shares, including (without limitation) the right to vote such Shares, receive dividends or other distributions thereon, exercise preemptive rights or be notified of shareholder meetings, and, except as otherwise provided in this Warrant, such Holder shall not be entitled to any shareholder notice or other communication concerning the business or affairs of the Company.

 

10.         Restrictions on Transfer.  This Warrant shall not be transferable by the Holder in whole or in part.  Any Shares issued upon exercised of all or part of this Warrant shall be subject to the rights of first refusal, co-sale rights, drag along rights, market stand-off restrictions, and any other agreements to which Holder becomes a party pursuant to the terms of the Purchase Agreements and the Related Agreements (as defined in the Purchase Agreements).

 

11.         Governing Law.  This Warrant shall be governed by and construed under the laws of the State of California as applied to agreements among California residents, made and to be performed entirely within the State of California.

 

12.         Successors and Assigns.  The terms and provisions of this Warrant shall inure to the benefit of, and be binding upon, the Company and the holders hereof and their respective successors and assigns.

 

13.         Titles and Subtitles.  The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.

 

14.         Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given:  (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (l) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent to the respective parties at the following addresses (or at such other addresses as shall be specified by notice given in accordance with this Section 14):

 

  

- 6 -

  

If to the Company:

Emmaus Medical, Inc.

20725 S. Western Avenue, Ste. 136

Torrance, CA  90501-1884

Attention:  Daniel R. Kimbell, Esq.                                                                

If to Holder:

At the address shown on the signature page hereto.

15.         Finder’s Fee.  Each party represents that it neither is or will be obligated for any finder’s fee or commission in connection with this transaction.  The Holder agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Holder or any of its officers, partners, employees or representatives is responsible.  The Company agrees to indemnify and hold harmless the Holder from any liability for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

 

16.         Expenses.  If any action at law or in equity is necessary to enforce or interpret the terms of this Warrant, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

17.         Entire Agreement; Amendments and Waivers.  This Warrant and any other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof.  Nonetheless, any term of this Warrant may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder; or if this Warrant has been assigned in part, by the holders or rights to purchase a majority of the shares originally issuable pursuant to this Warrant.

 

18.         Severability.  If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

  

- 7 -

  

IN WITNESS WHEREOF, the parties have executed this Warrant as of the date above written.

 

	 	EMMAUS MEDICAL, INC.	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Yutaka Niihara	 
	 	Name:   	Yutaka Niihara	 
	 	Title: 	President, CEO & Chairman	 
	 	 	 	 

 

ACKNOWLEDGED AND AGREED:

HOLDER:

 

	 	 	 	 
	By:    	 	 	 
	 	Name:	 	 

 

Address:

  

- 8 -

  

Notice of Exercise

 

EMMAUS MEDICAL, INC.

 

Attention:  Corporate Secretary

The undersigned hereby elects to purchase, pursuant to the provisions of the Warrant, as follows:

 

____________ shares of Common Stock pursuant to the terms of the attached Warrant, and tenders herewith payment in cash of the Exercise Price of such Shares in full, together with all applicable transfer taxes, if any.

 

Net Exercise the attached Warrant with respect to ________________ Shares.

 

The undersigned hereby represents and warrants that Representations and Warranties in Section 6 of the Warrant are true and correct as of the date hereof.

 

HOLDER:

 

	 	 	 	 	 	 
	Date:  	 	 	By: 	
 

	 
	 	 	 	Name:	
 

	 
	 	
 

	 	Address:  	
 

	 
	 	 	 	 	 	 
	 	 	 	 	 	 

Name in which shares should be registered:

 

- 9 -

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