Document:

Exhibit 10.101

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (“Guaranty”) is made this 13th day of June,
2003, by the undersigned (hereinafter referred to as “Guarantors” whether one
or more), in favor of BEAL BANK, S.S.B., a savings bank organized under the
laws of the State of Texas (“Lender”).

 

WITNESSETH:

 

A.                                    Lender
has made a loan (the “Loan”) to HUNTLEY DEVELOPMENT LIMITED PARTNERSHIP, an
Illinois limited partnership (“Borrower”), in the maximum principal amount of
$11,712,177.00, evidenced by that certain Amended, Restated and Increased
Promissory Note ( the “Note”), dated January 30, 2002, in the stated
principal amount of $11,712,177.00, secured by, among other things, that
certain  Adjustable Rate Mortgage,
Security Agreement and Assignment of Leases and Rents (as previously modified
and amended, the “Mortgage”), dated October 27, 1999, executed by Borrower
for the benefit of Lender.  The Note,
the Mortgage and the other Loan Documents, as such term is defined in the
Mortgage, have been modified and extended most recently by that certain Fourth
Modification Agreement (the “Fourth Modification”) of even date herewith, by
and among Borrower, Lender, The Prime Group, Inc. (the “Released Guarantor”),
the Transferring Parties, as therein defined, and the Guarantors.

 

B.                                    Borrower,
Huntley Meadows Residential Venture and Lender have also entered into that
certain Amended and Restated Agreement and Assignment of Net Profits Interest,
dated October 27, 1999 (as previously modified, the “NPI Agreement”).

 

C.                                    As
more particularly described in the Fourth Modification, Borrower and the
Released Guarantor have requested that Lender (i) consent to the assignment of
certain partnership interests in Borrower to Guarantors and (ii) release the
Released Guarantors as guarantors of the Loan and in place of the Released
Guarantors accept the Guarantors as guarantors of the Loan.

 

NOW,
THEREFORE, as a material inducement to Lender to
consent to the assignment of certain partnership interests in the Borrower, and
release the Released Guarantor as a guarantor of the Loan, and for further good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, each Guarantor does hereby, unconditionally,
irrevocably and absolutely, jointly and severally, warrant and represent to and
covenant and agree with Lender as follows:

 

1.                                      Guaranty
of Obligation.

 

(a)                                  The
Guarantors unconditionally, irrevocably and absolutely, jointly and severally,
guarantee to Lender (i) that all obligations and indebtedness evidenced by
or provided in the Note, the Mortgage, the other Loan Documents and the NPI
Agreement will be promptly paid when due and in accordance with the terms and
provisions thereof (and as

 

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they may be amended, extended or renewed from
time to time), and (ii) the prompt and full payment, performance and
observance, when due, of all other indebtedness, liabilities, obligations and
duties of every kind and character of Borrower to Lender relating in any way to
the Loan and/or the NPI Agreement, whether absolute or contingent, joint or
several, secured or unsecured, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, direct or
indirect relating in any way to the Loan, and including, but not limited to,
any debt, obligation or liability of Borrower to Lender as a member of any
partnership, syndicate, association or other group, or whether incurred by
Borrower as principal, surety, endorser, accommodation party or otherwise;
including, without limitation, interest on all of the above amounts as agreed
upon between Borrower and Lender, or if there is no agreement, at the highest
lawful rate, and any and all renewals, extensions and rearrangements of all or
any part of the indebtedness, obligations and liabilities hereinabove
described.

 

(b)                                 All
indebtedness, duties, obligations and liabilities described above or otherwise
covered by this Guaranty, or intended so to be, are hereinafter sometimes collectively
referred to as the “Guaranteed Indebtedness”.

 

(c)                                  Guarantor
acknowledges and agrees that the Released Guarantor is not being released from
liability as a guarantor of the obligations and indebtedness owed to Lender
under the NPI Agreement.

 

2.                                      Continuing
Guaranty.  This is a continuing
guaranty and shall continue to apply without regard to the form or amount of
indebtedness or obligation which Borrower may create, renew, extend or alter in
whole or in part, without notice to Guarantors.  The circumstance that at any time or from time to time the
Guaranteed Indebtedness may be paid or performed in full shall not affect the
obligation of Guarantors with respect to indebtedness, obligations or
liabilities of Borrower to Lender incurred or arising thereafter.

 

3.                                      Liability
for Other Indebtedness.  If any
Guarantor is or becomes liable for any indebtedness owing by Borrower to Lender
by endorsement or otherwise than under this Guaranty, such liability shall not
be in any manner impaired or affected hereby, and the rights of Lender
hereunder shall be cumulative of any and all other rights that Lender may ever
have against Guarantors.  The exercise
by Lender of any right or remedy hereunder or under any other instrument, or at
law or in equity, shall not preclude the concurrent or subsequent exercise of
any other right or remedy.  Without in
any way diminishing the generality of the foregoing, it is specifically
understood and agreed that this Guaranty is given by Guarantors as an
additional guaranty to any and all other guaranties heretofore or hereafter
executed and delivered to Lender by any Guarantor or any other person or entity
in favor of Lender relating to indebtedness of Borrower to Lender, and nothing
herein shall ever be deemed to replace or be in lieu of any other of such
previous or subsequent guaranties.

 

4.                                      No
Release From Obligations; Guarantors’ Waivers.  The obligations, covenants, agreements and
duties of Guarantors under this Guaranty shall not be released or impaired in
any manner whatsoever, without the written consent of Lender, on account of any
or all of the following:  (a) any
assignment, endorsement or transfer, in whole or in part, of the Guaranteed
Indebtedness, although made without notice to or the consent of any Guarantor;
(b) any waiver by Lender of the 

 

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performance or observance by Borrower or any Guarantor of any of the
agreements, covenants, terms or conditions contained in any document
evidencing, governing or securing the Guaranteed Indebtedness; (c) any
extension of the time for payment or performance of all or any portion of the
Guaranteed Indebtedness; (d) the renewal, rearrangement, modification or
amendment (whether material or otherwise) of any duty, agreement or obligation
of Borrower set forth in any document evidencing, governing or securing any of
the Guaranteed Indebtedness; (e) the voluntary or involuntary liquidation, sale
or other disposition of all or substantially all of the assets of Borrower, any
Guarantor or any Other Obligor, as hereinafter defined; (f) any receivership,
insolvency, bankruptcy, reorganization or other similar proceedings or lack of
corporate power, affecting Borrower, any Guarantor, any Other Obligor or any of
the assets of Borrower, any Guarantor or any Other Obligor; (g) any release,
withdrawal, surrender, exchange, substitution, subordination or loss of any
security or other guaranty at any time existing in connection with all or any
portion of the Guaranteed Indebtedness, or the acceptance of additional or
substitute property as security therefor; (h) the release or discharge of
Borrower, any other Guarantor or any Other Obligor from the observance or
performance of any agreement, covenant, term or condition contained in any
document evidencing, governing or securing any of the Guaranteed Indebtedness;
(i) any action which Lender may take or omit to take by virtue of any document
evidencing, governing or securing any of the Guaranteed Indebtedness or through
any  course of dealing with Borrower;
(j) the addition of a new guarantor or guarantors; (k) the operation of law or
any other cause, whether similar or dissimilar to the foregoing; (l) any
adjustment, indulgence, forbearance or compromise that may be granted or given
by Lender to any party; (m) the failure by Lender to file or enforce a claim
against the estate (either in administration, bankruptcy or other proceeding)
of Borrower, any Guarantor, any Other Obligor or any other person or entity;
(n) if the recovery from Borrower, any Guarantor, any Other Obligor or any
other person or entity becomes barred by any statute of limitations or is
otherwise prevented; (o) any defenses, set-offs or counterclaims which may be
available to Borrower, any Guarantor, any Other Obligor or any other person or
entity (all of such defenses, set-offs and counterclaims, whether now or
hereafter existing, being hereby irrevocably, absolutely and unconditionally
waived by each Guarantor to the extent not prohibited by applicable law); (p)
any impairment, modification, change, release or limitation of liability of, or
stay of actions of lien enforcement proceedings against, Borrower, its
property, or its estate in bankruptcy resulting from the operation of any
present or future provision of the Bankruptcy Code or any other similar federal
or state statute, or from the decision of any court; or (q) any neglect, delay,
omission, failure or refusal of Lender to take or prosecute any action for the
collection of any of the Guaranteed Indebtedness or to foreclose or take or
prosecute any action in connection with any lien, security interest or other
right of security (including perfection thereof), existing or to exist in
connection with, or as security for, any of the Guaranteed Indebtedness, it
being the intention hereof that each Guarantor shall remain liable as principal
on the Guaranteed Indebtedness, notwithstanding any act, omission or thing
which might, but for the provisions hereof, otherwise operate as a legal or
equitable discharge of any Guarantor. 
Without limitation to the foregoing, Guarantors hereby expressly waive
all rights of Guarantors arising under § 34.02 of the Texas Business and Commerce Code, as
amended (regarding the right to require Lender to sue Borrower on
accrued right of action following written notice to Lender), § 17.001 of
the Texas
Civil Practice and Remedies Code, as amended (allowing suit against
any Guarantor without suit against Borrower, but precluding entry of judgment
against any Guarantor before entry of judgment against Borrower), Rule 31 of
the Texas
Rules of Civil Procedure,  as
amended (requiring Lender to join Borrower in any suit against any Guarantor
unless judgment has been previously entered against Borrower) and Section
51.003 of the Texas Property Code (which relates to deficiencies following real
estate foreclosures).

 

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5.                                      Payment
and Performance of Obligations. If an Event of Default, as defined in
the Mortgage, occurs, Guarantors shall, without notice or demand, and without
any notice having been given to Guarantors of the acceptance by Lender of this
Guaranty and without any notice having been given to Guarantors of the creating
or incurring of such indebtedness, pay the amount due thereon to Lender, at its
office in Dallas, Texas, or at such other place as may be designated in writing
by Lender, and it shall not be necessary for Lender, in order to enforce such
payment by any Guarantor, first, to institute suit or exhaust its remedies
against Borrower or others liable on such indebtedness, or to enforce its
rights against any security which shall ever have been given to secure such
indebtedness.

 

6.                                      Waiver
of Notice.  Notice to Guarantors
of the acceptance of this Guaranty and of the making, renewing or assignment of
the Guaranteed Indebtedness and each item thereof, are hereby expressly waived
by each Guarantor.

 

7.                                      Payments by Borrower.  Each payment on the Guaranteed Indebtedness
shall be deemed to have been made by Borrower unless express written notice is
given to Lender at the time of such payment that such payment is made by a
Guarantor(s) as specified in such notice.

 

8.                                      Releases
and Waivers.  If all or any part
of the Guaranteed Indebtedness at any time be secured, Guarantors agree that
Lender may at any time and from time to time, at its discretion and with or
without valuable consideration, allow substitution or withdrawal of collateral
or other security and release collateral or other security without impairing or
diminishing the obligations of Guarantors hereunder.  Guarantors further agree that if Borrower
executes in favor of Lender any collateral agreement, deed of trust or other
security instrument, including, without limitation, the Mortgage, the exercise
by Lender of any right or remedy thereby conferred on Lender shall be wholly
discretionary with Lender, subject, however, to all applicable notice and
opportunity to cure provisions set forth in the Loan Documents, and that the
exercise or failure to exercise any such right or remedy shall in no way impair
or diminish the obligations of Guarantors hereunder.  Guarantors further agree that Lender shall not be liable for its
failure to use diligence in the collection of any of the Guaranteed
Indebtedness or in preserving the liability of any person liable on the
Guaranteed Indebtedness, and Guarantors hereby waive presentment for payment,
notice of nonpayment, protest and notice thereof, notice of acceleration, and
diligence in bringing suits against any person liable on the Guaranteed
Indebtedness, or any part thereof.

 

9.                                      No
Release of Guarantor.  If the
Guaranteed Indebtedness at any time exceeds the amount permitted by law, or
Borrower is not liable because the act of creating the Guaranteed Indebtedness
is ultra vires, or the officers or persons creating the Guaranteed Indebtedness
acted in excess of their authority, or for any other reason, and for any of
these reasons the Guaranteed Indebtedness which Guarantors agree to pay cannot
be enforced against Borrower, such fact shall in no manner affect any Guarantor’s
liability hereunder, but each Guarantor shall be liable under this Guaranty
notwithstanding that Borrower is not liable for the Guaranteed Indebtedness, to
the same extent such Guarantor would have been liable if the Guaranteed
Indebtedness had been enforceable against Borrower.

 

10.                               Optional
Acceleration.  In the event of
the dissolution or insolvency of Borrower, or the inability of Borrower to pay
its debts as they mature, or an assignment by Borrower for the 

 

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benefit of creditors, or the institution of any proceedings by or
against Borrower under the federal bankruptcy laws alleging that Borrower is
insolvent or unable to pay its debts as they mature, or if any of the foregoing
events occur with respect to any Guarantor or Other Obligor, and if such event
shall constitute an Event of Default, as defined in the Mortgage, and shall
occur at a time when any of the Guaranteed Indebtedness may not then be due and
payable, such Guaranteed Indebtedness, at the option of Lender, shall thereupon
be deemed to be immediately due and payable in full, and Guarantors shall pay
to Lender forthwith the full amount which would be payable hereunder if all
Guaranteed Indebtedness were then due and payable.

 

11.                               Successors
and Assigns.  This Guaranty is
for the benefit of Lender, its participants in the Loan, if any, and its and
their successors and assigns, and in the event of an assignment by Lender, or
its successors or assigns, of the Guaranteed Indebtedness, or any part thereof,
the rights and benefits hereunder, to the extent applicable to the indebtedness
so assigned, may be transferred with such indebtedness.

 

12.                               Modifications
and Waivers; Cumulative Rights. 
No modification, consent, amendment or waiver of any provision of this
Guaranty, nor consent to any departure by any Guarantor therefrom, shall be
effective unless the same shall be in writing and signed by an officer of
Lender, and then shall be effective only in the specific instance and for the purpose
for which given.  No notice to or demand
on any Guarantor in any case shall, of itself, entitle such Guarantor to any
other or further notice or demand in similar or other circumstances.  No delay or omission by Lender in exercising
any power or right hereunder shall impair any such right or power or be
construed as a waiver thereof or any acquiescence therein, nor shall any single
or partial exercise of any such power preclude other or further exercise
thereof, or the exercise of any other right or power hereunder.  All rights and remedies of Lender hereunder
are cumulative of each other and of every other right or remedy which  Lender may otherwise have at law or in
equity or under any other contract or document, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies. 
In this Guaranty, whenever the context so requires, the singular number
includes the plural, and conversely.

 

13.                               Compliance
with Laws.  No provision herein
or in any promissory note, instrument or any other loan document executed by
Borrower, any Guarantor or any Other Obligor evidencing, governing or securing
the Guaranteed Indebtedness shall require the payment or permit the collection
of interest in excess of the maximum permitted by law.  If any excess interest in such respect is
provided for herein or in any such promissory note, instrument, or any other
Loan Document, the provisions of this paragraph shall govern, and neither
Borrower nor any Guarantor  nor any
Other Obligor shall be obligated to pay the amount of such interest to the
extent that it is in excess of the amount permitted by law.  The intention of the parties is to conform
strictly to the usury laws now in force, and all promissory notes, instruments
and other loan documents executed by Borrower or any Guarantor evidencing the
Guaranteed Indebtedness shall be held subject to reduction of the interest
charged to the amount allowed under said usury laws as now or hereafter construed
by the courts having jurisdiction.

 

14.                               Benefit
to Guarantors.  Guarantors
acknowledge and warrant that each Guarantor has derived or expects to derive
financial and other advantage and benefit, directly or indirectly, from the
Guaranteed Indebtedness and each and every advance thereof and from each and
every renewal,

 

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extension, release of collateral or other relinquishment of legal
rights made or granted or to be made or granted by Lender to Borrower.

 

15.                               Attorney’s
Fees and Collection Costs.  If
any Guarantor should breach or fail to perform any provision of this Guaranty,
Guarantors agree to pay to Lender all reasonable costs and expenses (including
court costs and reasonable attorneys’ fees to the extent enforceable under the
laws of the State of Texas) incurred by Lender in the enforcement hereof.

 

16.                               Guarantor’s
Warranties.  Guarantors hereby
warrant and represent unto Lender the following:

 

(a)                                  Each
Guarantor has received or will receive, direct or indirect benefit from the
making of this Guaranty;

 

(b)                                 Each
and every warranty and representation made by Borrower in the Loan Documents is
true and correct;

 

(c)                                  This
Guaranty constitutes a legal, valid and binding obligation of each Guarantor,
and is fully enforceable against each Guarantor in accordance with its terms;

 

(d)                                 Any
and all balance sheets, net worth statements and other financial data that have
heretofore been given to Lender with respect to Guarantors fairly present the
financial condition of each Guarantor as of the date thereof and, since the
date thereof, there has been no material, adverse change in the financial
condition of any Guarantor;

 

(e)                                  Except
as may be set out on Exhibit ”A” attached hereto and made a part
hereof for all purposes, (i) there are no legal proceedings, claims or
demands pending against, or to the knowledge of any Guarantor, threatened
against, any Guarantor or any Guarantor’s assets, which, if determined
adversely to such Guarantor(s), could have a material adverse effect on such
Guarantor(s) or the assets of such Guarantor(s) (ii) no Guarantor is in
breach or default of any legal requirement, contract or commitment, and
(iii) no event (including specifically Guarantors’ execution and delivery
of this Guaranty) has occurred which, with the lapse of time or action by a
third party, could result in any Guarantor’s breach or default under any legal
requirement, contract or commitment; and

 

(f)                                    Guarantors
hereby agree to furnish to Lender from time to time, promptly upon request
therefor, current financial reports and statements setting out in complete and
accurate detail each Guarantor’s financial condition at the time of such
request, containing such information as Lender may reasonably request, and
prepared in accordance with generally accepted accounting principles
consistently applied or in other form acceptable to Lender, in the exercise of
its reasonable discretion.

 

17.                               Subordination and No Subrogation.  If, for any reason whatsoever, Borrower now
or hereafter becomes indebted to any Guarantor, such indebtedness and all
interest thereon, shall, at all times, be subordinate in all respects to the
Loan Documents, and such Guarantor shall not be entitled to enforce or receive
payment thereof until the Guaranteed Indebtedness has been fully paid and
satisfied. Notwithstanding anything to the contrary contained in this Guaranty
or any payments 

 

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made by any Guarantor hereunder, no Guarantor shall have any right of
subrogation in or under the Loan Documents or to participate in any way
therein, or any right, title or interest in and to any mortgaged property or
any collateral for the Guaranteed Indebtedness, all such rights of subrogation
and participation being hereby expressly waived and released, until the
Guaranteed Indebtedness has been fully paid and satisfied.

 

18.                               Law
Governing and Jurisdiction. 
This Guaranty shall be governed by and construed in accordance with the
laws of the State of Texas and is performable in Collin County, Texas.

 

19.                               Severability.  If any provision of this Guaranty or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, neither the remainder of this Guaranty
nor the application of such provision to any other persons or circumstances
shall be affected thereby, but rather the same shall be enforced to the
greatest extent permitted by law.

 

20.                               Counterparts.  This Guaranty may be executed in multiple
counterparts, each of which shall be an original, but all of which shall
constitute but one instrument.

 

21.                               Paragraph
Headings.  The paragraph
headings inserted in this Guaranty have been included for convenience only and
are not intended, and shall not be construed, to limit or define in any way the
substance of any paragraph contained herein.

 

22.                               Compounding
and Settlement.  Guarantors
agree that Lender, in its discretion, may (i) bring suit against
Guarantors and any other guarantor or obligor for all or any part of the Loan (collectively
the “Other Obligors”), jointly and severally or against any one or more of
them, (ii) compound or settle with any one or more of Guarantors and/or
one or more of the Other Obligors for such consideration as the Lender may deem
proper, and (iii) release one or more of the Guarantors and/or one or more of
the Other Obligors from liability hereunder or otherwise in regard to the
Guaranteed Indebtedness, and that no such action shall impair the rights of
Lender to collect  the Guaranteed
Indebtedness (or the unpaid balance thereof) from other Guarantor(s) or Other
Obligors, or any of them, not so sued, settled with or released.  Guarantors agree among themselves, however,
that nothing contained in this paragraph, and no action by Lender permitted under
this paragraph, shall in any way affect or impair the rights or obligations of
Guarantors among themselves.

 

23.                               Consent
to Jurisdiction.  Each Guarantor
hereby irrevocably submits, for such Guarantor and in respect of such
Guarantor’s property, generally and unconditionally, at the election of Lender,
to the jurisdiction of the courts of the State of Texas or of the United States
of America for the State of Texas over any suit, action or proceeding arising
out of or relating to this Guaranty. 
Venue for any such suit shall be in Collin County, Texas.  Each Guarantor irrevocably waives, to the
fullest extent permitted by law, any objection which such Guarantor may now or
hereafter have to the laying of the venue of any such suit, action or
proceeding brought in any such court that such suit has been brought in an
inconvenient forum.  Each Guarantor
agrees that final judgement in any such suit, action or proceeding brought in
any such court shall be conclusive and binding upon such Guarantor and may be
enforced in the courts of Texas by a suit upon such judgment, a certified or
exemplified copy of which shall be conclusive evidence of the fact and of the
amount of such 

 

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Guarantor’s indebtedness, provided that service of process is effected
upon such Guarantor in one of the manners specified herein or as otherwise
permitted by law.

 

24.                               Service
of Process.  Each Guarantor
hereby irrevocably consents to process being served in any suit, action or
proceeding hereunder (a) by serving a copy thereof upon Borrower and/or the
Secretary of State of the State of Texas, as such Guarantor’s agents for
service of process (provided a copy shall be mailed by registered or certified
mail, postage prepaid, return receipt requested, to such Guarantor at its
address specified below, or to any other address which such Guarantor shall
have designated by written notice to Lender), or (b) if such service is
impossible or impracticable in the sole judgment of the party serving such
process, by the mailing of a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to such Guarantor at its address set
forth below or to any other address which such Guarantor shall have designated
by written notice to Lender.  Each
Guarantor irrevocably waives, to the fullest extent permitted by law, all
claims of error by reason of any such service and agrees that such service (i)
shall be deemed in every respect effective service of process upon such
Guarantor in any such suit, action or proceeding, and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon personal delivery to such Guarantor. 
Nothing in this section, shall affect the rights of Lender to serve
process in any manner permitted by law or limit the right of Lender to bring
proceedings against any Guarantor in the competent courts of any jurisdiction
of jurisdictions.

 

25.                               Savings
Clause.  It is the intent of
Guarantors and Lender that Guarantors’ maximum obligations hereunder shall be
equal to, but not in excess of:

 

(a)                                  in a case or
proceeding commenced by or against Guarantors under Chapter 11 of the United
States Code (the “Bankruptcy Code”), the maximum amount which would not
otherwise cause the Guaranteed Indebtedness (or any other obligations of
Guarantors to Lender) to be avoidable or unenforceable against Guarantors under
(i) Section 548 of the Bankruptcy Code or (ii) any state fraudulent transfer or
fraudulent conveyance act or statute applied in such case or proceeding by
virtue of Section 544 of the Bankruptcy Code; or

 

(b)                                 in a case or
proceeding commenced by or against Guarantors under any law, statute or
regulation other than the Bankruptcy Code (including, without limitation, any
other bankruptcy, reorganization, arrangement, moratorium, readjustment of
debt, dissolution, liquidation or similar debtor relief laws under any state
law), the maximum amount which would not otherwise cause the Guaranteed
Indebtedness (or any other obligations of such Guarantors to Lender) to be
avoidable or unenforceable against such Guarantors under such law, statute or
regulation including, without limitation, 
any state fraudulent transfer or fraudulent conveyance act or statute
applied in any such case or proceeding. 
The substantive laws under which the possible avoidance or
unenforceability of the Guaranteed Indebtedness (or any other obligations of
Guarantors to Lender) shall be determined in any such case or proceeding shall
hereinafter be referred to as the “Avoidance Provisions”.

 

To the end set forth in this Section, but only to the extent that the
Guaranteed Indebtedness would otherwise be subject to avoidance under the
Avoidance Provisions if (y) Guarantors are not deemed to have received valuable
consideration, fair value or reasonably equivalent value for the Guaranteed
Indebtedness, or (z) the Guaranteed Indebtedness would cause Guarantors to fail
to be solvent (as of the time any of the Guaranteed Indebtedness is deemed to
have been incurred under the 

 

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Avoidance Provisions), the maximum Guaranteed Indebtedness for which
Guarantors shall be liable hereunder shall be reduced to that amount which,
after giving effect thereto, would not cause the Guaranteed Indebtedness (or
any other obligations of Guarantors to Lender), as so reduced, to be subject to
avoidance under the Avoidance Provisions. 
This section is intended solely to preserve the rights of Lender
hereunder to the maximum extent that would not cause the Guaranteed
Indebtedness of Guarantors to be subject to avoidance under the Avoidance
Provisions, and neither Guarantors nor any other person or entity shall have
any right or claim under this section as against Lender that would not
otherwise be available to such person or entity under the Avoidance Provisions.

 

EXECUTED
AND DELIVERED on the date first above recited.

 

 

ADDRESS FOR NOTICE:

 

 

	
  77 West Wacker Drive

  	
  HORIZON GROUP
  PROPERTIES, INC.,

  
	
  Suite 4200

  	
  a Maryland corporation

  
	
  Chicago, Illinois 60601

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							

 

9Exhibit 10.102

 

Prepared By And

After Recording Return To:

 

Lawrence C. Adams, Esq.

Jenkens & Gilchrist, A Professional Corporation

1445 Ross Avenue, Suite 3200

Dallas, Texas 75202

 

ATTENTION:  COUNTY CLERK—THIS

INSTRUMENT COVERS GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY

DESCRIBED HEREIN AND IS TO BE FILED FOR RECORD IN THE RECORDS WHERE MORTGAGES

ON REAL ESTATE ARE RECORDED. ADDITIONALLY, THIS INSTRUMENT SHOULD BE

APPROPRIATELY INDEXED, NOT ONLY AS A MORTGAGE, BUT ALSO AS A FINANCING STATEMENT

COVERING GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY

DESCRIBED HEREIN. THE MAILING ADDRESSES OF THE MORTGAGOR (DEBTOR) AND MORTGAGEE

(SECURED PARTY) ARE SET FORTH IN THIS INSTRUMENT.

 

MORTGAGE, SECURITY AGREEMENT,

AND

ASSIGNMENT OF LEASES AND RENTS

 

This MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF

LEASES AND RENTS (hereinafter referred to as this “Mortgage”) is executed by

HUNTLEY DEVELOPMENT LIMITED PARTNERSHIP, an Illinois limited partnership

(“Mortgagor”), whose address for notice hereunder is c/o The Prime Group, Inc.,

77 West Wacker Drive, Suite 4200, Chicago, Illinois 60601, Attn:  Gary

J. Skoien, to and in favor of BEAL BANK, S.S.B., a savings bank organized under

the laws of the State of Texas (“Mortgagee”), whose address for notice

hereunder is 15770 N. Dallas Parkway, 3rd  Floor, Dallas, Texas 75248, Attn: William

T. Saurenmann:

 

W I T N E S S E T

H:

 

ARTICLE I

 

DEFINITIONS

 

1.1                                 As

used herein, the following terms shall have the following meanings:

 

1

 

(a)                                  Applicable

Environmental Laws: All Legal Requirements now or hereafter applicable to

the use, treatment, processing, disposal, transportation, storage or handling

of hazardous or toxic wastes or substances, including, without limitation, the

Resource Conservation and Recovery Act of 1987 (42 U.S.C. Section 6901 et

seq.), as amended from time to time, and regulations promulgated

thereunder or pursuant thereto, and the Comprehensive Environmental Response,

Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et  seq.),

as amended from time to time, and regulations promulgated thereunder or

pursuant thereto.

 

(b)                                 Debtor

Relief Laws: Any applicable liquidation, conservatorship, bankruptcy,

moratorium, rearrangement, insolvency, reorganization or similar laws, whether

federal or state or of a country other than the United States of America,

affecting the rights or remedies of creditors generally, as in effect from time

to time.

 

(c)                                  Escrowed

Funds: The amounts paid by Mortgagor to Mortgagee pursuant to Paragraph

12.4 hereof to be held by Mortgagee in a fund for the payment of the

Impositions, subject to the provisions of such Paragraph 12.4. 

 

(d)                                 Event

of Default: Any happening or occurrence described in Article VI herein.

 

(e)                                     Fixtures:

All right, title and interest of Mortgagor in and to all materials, supplies,

equipment, apparatus and other items now or hereafter attached to, installed on

or in the Land or the Improvements, or which in some fashion are deemed to be

fixtures to the Land or Improvements under the laws of the State of Illinois,

including the Illinois Uniform Commercial Code. The term “Fixtures”

shall include, without limitation, all items of personalty to the extent

that the same may be deemed Fixtures under applicable law.

 

(f)                                       Governmental

Authority: Any and all courts, boards, agencies, commissions, offices or

authorities of any nature whatsoever for any governmental unit (federal, state,

county, district, municipal, city or otherwise) whether now or hereafter in

existence.

 

(g)                                 Guarantors

(whether one or more):  The Prime

Group, Inc., an Illinois corporation.

 

(h)                                 Guaranty:

That certain Guaranty Agreement, of even date herewith, executed by the

Guarantors in favor of Mortgagee, by which the Guarantors jointly and severally

guaranty the payment and performance of Mortgagor’s obligations in regard to

the Loan and under the Loan Documents.

 

(i)                                     Impositions:

The Insurance Premiums, water, gas, sewer, electricity and other utility rates

and charges; all rentals charged under any ground lease covering all or any

part of the Mortgaged Property; all charges imposed pursuant to any

subdivision, planned unit development or condominium declaration or

restrictions; all charges for any easement, license or agreement maintained for

the benefit of the Mortgaged Property, and all other costs, expenses, taxes,

charges and assessments, and any interest or penalties with respect thereto, of

any kind and nature whatsoever which at any time prior to or after the

execution hereof may be assessed, levied or imposed upon the Mortgaged Property

or upon the 

 

2

 

ownership,

operation, use, occupancy or enjoyment thereof, or which are related in any way

to the transactions contemplated under the Loan Documents.

 

j)                                         Improvements:

All right, title and interest of Mortgagor in and to any and all buildings,

structures, open parking areas, roadways, utility lines and facilities, land

development activity and other improvements, and any and all accessions,

additions, replacements, substitutions or alterations thereof or appurtenances

thereto, now or at any time hereafter situated, placed or constructed upon the

Land or any part thereof.

 

(k)                                  Indebtedness:

The principal of, interest on and all other amounts and payments due under or

secured by the Note, this Mortgage or any other Loan Document, and all

renewals, extensions and modifications of any thereof, together with all funds

hereafter advanced by Mortgagee to or for the benefit of Mortgagor as

contemplated by any covenant or provision herein or therein contained or for

any other purpose, and all other currently existing indebtedness or obligation

of whatever kind or character, direct or indirect, absolute or contingent,

owing or which may hereafter become owing by Mortgagor to Mortgagee, whether

such indebtedness or obligation is evidenced by note, net profits agreement,

open account, overdraft, endorsement, surety agreement, guaranty or otherwise,

 

(1)                                  Insurance

Premiums: The premiums payable by Mortgagor under each of the policies of

insurance which Mortgagor is required to maintain pursuant to the terms of this

Mortgage.

 

(m)                               Land:

The real estate or any interest therein described in Exhibit “A”

attached hereto and made a part hereof, together with all Improvements and

Fixtures and all rights, titles and interests appurtenant thereto.

 

(n)                                 Leases:

All right, title and interest of Mortgagor in and to any and all leases,

subleases, licenses, concessions or other agreements (written or verbal, now or

hereafter in effect) which now or hereafter grant a possessory interest in and

to, or the right to extract, mine, reside in, operate in, sell or use the

Mortgaged Property.

 

(o)                                 Legal

Requirements: (i) Any and all present and future judicial decisions,

statutes, rulings, rules, regulations, permits, certificates or ordinances of

any Governmental Authority in any way applicable to Mortgagor or the Mortgaged

Property, including, but not limited to, those regarding the ownership, use,

construction, occupancy, possession, operation, maintenance, alteration, repair

or reconstruction of the Mortgaged Property, (ii) any and all Leases and other

contracts (written or oral) of any nature to which Mortgagor may be bound and

(iii) any and all restrictions, reservations, conditions, easements or other

covenants or agreements of record affecting the Mortgaged Property.

 

(p)                                 Loan:

The loan by Mortgagee to Mortgagor, in an amount not to exceed the principal

sum of the Note.

 

(q)                                Loan

Agreement: That certain letter loan agreement, dated of even date herewith,

executed by Mortgagor and Mortgagee, relating to the Loan.

 

(r)                                    Loan

Documents: The Note, this Mortgage, the Loan Agreement, the 

 

3

 

Guaranty and any and all other documents now or

hereafter executed by Mortgagor or any Guarantor to evidence or secure the

payment of the Indebtedness or the performance and discharge of the

Obligations, and any and all other documents executed by Mortgagor, any

Guarantor or any other person or entity in connection with the Loan.

 

(s)                                 Mortgaged

Property: The Land, Improvements, Fixtures, Personalty, Leases and

Rents, together with:

 

(i)                                     all

rights, privileges, tenements, hereditaments, rights-of-way, easements,

appendages and appurtenances in anywise appertaining thereto, and all right,

title and interest of Mortgagor in and to any streets, ways, alleys, strips or

gores of land adjoining the Land or any part thereof, which Mortgagor now owns

or at any time hereafter acquires;

 

(ii)                                  all

betterments, accessions, additions, appurtenances, substitutions,

 

replacements and

revisions thereof and thereto and all reversions and remainders therein;

 

(iii)                               all of Mortgagor’s

right, title and interest in and to any award, remuneration, settlement or compensation

heretofore made or hereafter to be made by any Governmental Authority to

Mortgagor, including those for any vacation of,

 

or change of grade in,

any streets affecting the Land or the Improvements;

 

(iv)                              all

right, title and interest of Mortgagor in and to the following: all plans and

specifications for the Improvements; all contracts and subcontracts relating to

the Land, Improvements, Fixtures, Personalty, Leases and Rents, all deposits

(including tenant’s security deposits), funds, accounts, contract rights

(including, without limitation, those relating to the Annexation Agreement to

which reference is made on Exhibit “B” attached hereto),

instruments, documents, general intangibles (including trademarks, service

marks, trade names and symbols used in connection therewith), and notes or

chattel paper arising from or by virtue of any transactions related to the

property described herein; all commissions and fees that may be due to

Mortgagor in regard to the sale of any portion of the Mortgaged Property; all

right, title and interest of Mortgagor in regard to any municipal utility

district, tax district, road district and/or planned improvement district

relating to all or any part of the Land, including, without limitation, all

rights to payments and/or reimbursement from any thereof, all permits,

licenses, franchises, certificates, and other rights and privileges obtained in

connection with the property described herein; all proceeds arising from or by

virtue of the sale, lease or other disposition of all or any part of the

Mortgaged Property (consent to same not granted or to be implied hereby); all

proceeds (including premium refunds) payable or to be payable under each policy

of insurance relating to the Mortgaged Property;

 

(v)                                 all

other interest of every kind and character which Mortgagor now has or at any

time hereafter acquires in and to all or any part of the above described real

and personal property and all property which is used or useful in connection

therewith, including rights of ingress and egress, easements, licenses, and all

 

4

 

reversionary

rights or interests of Mortgagor with respect to such property. To the extent

permitted by law, all of the foregoing personal property and Fixtures are to be

deemed and held to be a part of and affixed to the Land. In the event the

estate of the Mortgagor in and to any of the Land and Improvements is a

leasehold estate, this conveyance shall include, and the lien, security

interest and assignment created hereby shall encumber and extend to, all other,

further or additional titles, estates, interest or rights which may exist now

or at any time be acquired by Mortgagor in or to the property demised under the

lease creating such leasehold estate and including Mortgagor’s rights, if any,

to purchase the property demised under such lease and, if fee simple title to

any of such property shall ever become vested in Mortgagor, such fee simple

interest shall be encumbered by this Mortgage in the same manner as if

Mortgagor had fee simple title to such property as of the date of execution

hereof without the necessity of any further act by Mortgagor, Mortgagee or any

third party; and

 

(vi)                              any

and all other security and collateral of any nature whatsoever, now or

hereafter given for the repayment of the Indebtedness or the performance and

discharge of the Obligations.

 

As used in this Mortgage, the term “Mortgaged

Property” is expressly defined as meaning all or, where the context permits or

requires, any portion of the above and all or, where the context permits or

requires, any interest therein.

 

(t)                                   Mortgagee:

Beal Bank, S.S.B., and the subsequent holder or holders, from time to time, of

the Note.

 

(u)                                Mortgagor:

Huntley Development Limited Partnership, and any and all subsequent owners of

all or any portion of the Mortgaged Property (consent to any transfer of any

such title by Huntley Development Limited Partnership not hereby given or

implied).

 

(v)                                 Note:

That certain Promissory Note, dated of even date herewith, executed by

Mortgagor, payable to the order of Mortgagee, in the principal sum of

$10,000,000.00 bearing interest and being payable as provided therein, becoming

finally due and payable on October 31, 2000, subject to extension of such

maturity date as provided in the Loan Agreement, and any and all renewals

and/or modifications and/or extensions thereof.

 

(w)                              Obligations:

Any and all of the covenants, warranties, representations and other obligations

(other than to repay the Indebtedness) relating to the Loan made or undertaken

by Mortgagor to Mortgagee or others as set forth in the Loan Documents.

 

(x)                                  Permitted

Encumbrances:  The outstanding

easements, building lines, restrictions and other matters (if any) as set forth

on Exhibit “B” attached hereto and made a part hereof, together with any

other encumbrances on the title to any of the Land hereafter expressly approved

or consented to by Mortgagee in writing, which approval or consent may be

granted or withheld at the sole discretion of Mortgagee.

 

(y)                                 Personalty:

All of the right, title and interest of Mortgagor in and to all tangible and

intangible personal property, including all accounts, equipment, consumer 

 

5

 

goods, chattel paper, goods, inventory, instruments,

money, general intangibles, documents, minerals, crops and timber (as those

terms are defined in the Illinois Uniform Commercial Code) which are attached

to, installed on or placed or used on, in connection with or which are acquired

for such attachment, installation, placement or use, or which arise out of the

development, improvement, financing, leasing, operation, use or maintenance of,

the Land, the Improvements, the Fixtures or other goods located on the Land or

Improvements, or from or out of any business operated in or from the Land or

the Improvements, together with all additions, accessions, accessories,

amendments and modifications thereto, extensions, renewals, enlargements and

proceeds thereof, substitutions therefor, and income and profits therefrom. All

right, title and interest of Mortgagor in and to the following are included,

without limitation, in the definition of Personalty: furnishings, building

materials, supplies, machines, engines, boilers, stokers, pumps, fans, vents, blowers,

dynamos, furnaces, elevators, ducts, shafts, pipes, furniture, cabinets,

shades, blinds, screens; plumbing, heating, air conditioning, lighting,

lifting, ventilating, refrigerating, cooking, medical, laundry and incinerating

equipment, partitions, drapes, carpets, rugs and other floor coverings,

awnings, call and sprinkler systems, fire prevention and extinguishing

apparatus and equipment, water tanks, swimming pools, compressors, vacuum

cleaning systems, disposals, dishwashers, ranges, ovens, kitchen equipment,

cafeteria equipment, recreational equipment, lawn and landscaping equipment and

supplies, loan commitments, management agreements, maintenance and service

agreements, utility contracts, financing arrangements, bonds, construction

contracts, leases, licenses, permits, sales contracts, insurance policies and

the proceeds therefrom, plans and specifications, surveys, rent rolls, books

and records, funds, bank deposits and all other intangible personal property.

 

(z)                                   Prior

Indebtedness: The indebtedness and obligations evidenced and/or secured by

the Prior Indebtedness Documents.

 

(aa)                            Prior

Indebtedness Documents: The documents listed on Exhibit “C” attached

hereto which evidence, secure and/or otherwise relate to the Prior Indebtedness

therein described, which encumber some or all of the Mortgaged Property as more

particularly described on Exhibit “C” hereto.

 

(bb)                          Rents:

All right, title and interest of Mortgagor in and to all the rents, revenues,

income, proceeds, royalties, profits and other benefits now or hereafter paid

or payable for using, leasing, licensing, possessing, operating from or in,

residing in, selling, mining, extracting or otherwise enjoying or using all or

any part of the Mortgaged Property, if any, including, without limitation, all

damages received following any default under any of the Leases and all proceeds

payable under any policy of insurance covering loss of rents.

 

(cc)                            Taxes:

All real estate and personal property taxes and assessments payable with

respect to the ownership, use or operation of the Mortgaged Property including,

without limitation, all ad valorem taxes levied or assessed against the

Mortgaged Property.

 

6

 

ARTICLE II

 

GRANT

 

To secure the full and

timely payment of the Indebtedness and the full and timely performance and

discharge of the Obligations, Mortgagor has GRANTED, SOLD, ASSIGNED, RELEASED,

ALIENED, TRANSFERRED, REMISED, CONVEYED and MORTGAGED, and by these presents

does GRANT, SELL, ASSIGN, RELEASE, ALIEN, TRANSFER, REMISE, CONVEY and MORTGAGE

unto Mortgagee, and grant to Mortgagee a security interest in, the Mortgaged

Property, subject, however, to the Permitted Encumbrances, TO HAVE AND TO HOLD

the Mortgaged Property unto Mortgagee, its successors and assigns forever, and

Mortgagor does hereby bind itself, its successors and assigns to warrant and

forever defend the title to the Mortgaged Property unto Mortgagee against every

person whomsoever lawfully claiming or to claim the same or any part thereof,

subject only to the Permitted Encumbrances; provided, however, that if

Mortgagor shall pay in full the Indebtedness and shall fully perform and

discharge the Obligations, then the titles, liens, security interests, estates

and rights granted by the Loan Documents shall terminate; otherwise, the same

shall remain in full force and effect.

 

ARTICLE III

 

WARRANTIES AND

REPRESENTATIONS

 

Mortgagor hereby unconditionally warrants and

represents to Mortgagee as follows:

 

3.1.                              Organization.

Mortgagor is a limited partnership duly organized, validly existing and in good

standing under the laws of the State of Illinois. Mortgagor is duly qualified

to transact business and is in good standing in the State of Illinois. The

execution and delivery of the Loan Documents have been duly authorized under

the terms of Mortgagor’s Agreement of Limited Partnership and authorized by

Mortgagor’s partners. Mortgagor has all requisite authority, licenses and

permits to own, operate and encumber the Mortgaged Property. No proceeding or

action is pending, planned or threatened for the dissolution, termination or

annulment of Mortgagor.

 

3.2.                              Validity

of Documents. The execution, delivery and performance by Mortgagor of the

Loan Documents and the borrowing evidenced by the Note, (i) have received all

(if any) requisite prior governmental approval in order to be legally binding

and enforceable in accordance with the terms thereof, and (ii) will not

violate, be in conflict with, result in a breach of or constitute (with due

notice or lapse of time, or both) a default under any mortgage, indenture,

agreement, commitment or instrument to which Mortgagor is a party or by which

any of its assets are bound, or any Legal Requirement or result in the creation

or imposition of any lien, charge or encumbrance of any nature whatsoever upon

any of Mortgagor’s property or assets, except as contemplated by the provisions

of the Loan Documents. To the best of Mortgagor’s knowledge, after reasonable

investigation and inquiry, the Loan Documents constitute the legal, valid and

binding obligations of Mortgagor and are enforceable against Mortgagor in

accordance with their respective terms, except as such enforceability may be

limited by applicable Debtor Relief Laws. Mortgagor has full and lawful authority

to bargain, grant, sell, mortgage, assign, transfer and convey to Mortgagee all

of the Mortgaged Property as set forth herein.

 

3.3.                              Information.

To the best of Mortgagor’s knowledge, after reasonable investigation and

inquiry, all information, reports, papers and data given by or on behalf of

Mortgagor or the Guarantor to Mortgagee with respect to Mortgagor, the

Guarantor and/or the Mortgaged Property and/or 

 

7

 

otherwise in regard to the Loan are accurate, complete

and correct in all material respects and do not omit any fact necessary to

prevent the facts contained therein from being materially misleading. All

information material to the transactions contemplated herein and known to

Mortgagor has been expressly disclosed in writing by Mortgagor to Mortgagee.

 

3.4                                 Title

to Mortgaged Property and Lien of this Instrument. Mortgagor has good and

indefeasible title to the Land and the Improvements in fee simple, and good and

indefeasible title to the Fixtures, the Personalty, the Leases and the Rents,

free and clear of any liens, charges, encumbrances, security interests and

adverse claims whatsoever except the Permitted Encumbrances. This Mortgage

constitutes a valid, subsisting Mortgage of and on the Land, the Improvements,

and the Fixtures and a valid, subsisting security interest in and to the

Personalty, Leases and Rents, all in accordance with the terms hereof, subject

to only the Permitted Encumbrances. To Mortgagor’s knowledge, none of the

Personalty has been acquired by Mortgagor in violation of any applicable bulk

sale law. No tenant or other party has any rights or interests of any kind with

respect to the Mortgaged Property. The only other liens and security interests

encumbering any of the Mortgaged Property are those liens and security

interests described on Exhibit “B” attached hereto.

 

3.5.                              Taxes

and Other Payments. Mortgagor has filed all federal, state, county,

municipal and city income, franchise and other tax returns which are required

to have been filed by Mortgagor, and Mortgagor has paid all taxes which have

become due pursuant to such returns or pursuant to any assessments received by

Mortgagor, and Mortgagor knows of no basis for any additional assessment in

respect of any such taxes. Mortgagor has paid or will pay in full (except for

such retainages as may be permitted or required by any Legal Requirements to be

withheld by Mortgagor pending completion of the Improvements) all sums owing or

claimed for labor, material, supplies, personal property (whether or not

constituting a Fixture hereunder) and services of every kind and character

used, furnished or installed in the Mortgaged Property, and no claim for any of

the same currently exists and no valid claim will be permitted to become past due.

 

3.6.                              Litigation.

There are no actions, suits or proceedings pending or, to the knowledge of

Mortgagor, threatened against or affecting Mortgagor, the Guarantor or any of

the Mortgaged Property with respect to which an adverse decision is reasonably

likely which would materially adversely affect the ability of Mortgagor to

perform its obligations under the Loan Documents or which involve the validity

or enforceability of this Mortgage or any other Loan Document or the priority

of the lien and security interest hereof, and no event has occurred (including

specifically Mortgagor’s execution of the Loan Documents and the consummation

of the Loan) which will violate, be in conflict with, result in the breach of

or constitute (with due notice or lapse of time, or both) a default under, any

Legal Requirement which would materially and adversely affect the ability of

Mortgagor to perform its obligations under the Loan Documents, or result in the

creation or imposition of any lien, charge or encumbrance of any nature

whatsoever upon any of Mortgagor 5 property other than the liens and security

interests created by or permitted under the Loan Documents.

 

3.7.                              The

Financial Statements. The financial statements of Mortgagor and the

Guarantor heretofore delivered to Mortgagee are true, complete and correct in

all material respects, have been prepared in accordance with generally accepted

accounting principles consistently applied, and fairly present the financial

condition of the Mortgagor and the Guarantor as of the dates thereof. No

materially adverse change in Mortgagor’s or the Guarantor’s financial condition

has occurred since the dates thereof, and no borrowings have been made by

Mortgagor or the Guarantor since the dates 

 

8

 

thereof other than the borrowings contemplated hereby

or other borrowings approved in writing by Mortgagee. Neither Mortgagor nor the

Guarantor has any liabilities, direct or contingent (including, without

limitation, any liability for taxes or any forward or long-term commitments),

which are not disclosed or shown to be reserved against in its current

financial statement delivered to Mortgagee.

 

3.8.                              No

Defaults. Mortgagor is not in default under any of the Loan Documents or

any of the Prior Indebtedness Documents, and no event has occurred which by

notice, the passage of time or otherwise would constitute an event of default

under any of the Loan Documents or any of the Prior Indebtedness Documents.

Mortgagor is not in default in the payment of any indebtedness for borrowed

money or under the terms and provisions of any agreement or instrument

evidencing any such indebtedness. To Mortgagor’s knowledge, it is not in

default with respect to any order, writ, injunction, decree or demand of any court

or of any other requirement of any Governmental Authority.

 

3.9.                              Access

and Utilities. The Mortgaged Property has adequate rights of access to

public ways and has access to all water, sanitary sewer and storm drain

facilities and other utility services which are necessary for the use of the

Mortgaged Property and Improvements for their intended purposes. All public

utilities necessary to the full use and enjoyment of the Mortgaged Property as

permitted by applicable zoning are now available (or will be made available

when necessary) at the boundaries of the Mortgaged Property to serve the

Mortgaged Property and Improvements. All roads necessary for the utilization of

the Mortgaged Property and Improvements for their intended purposes as

permitted by applicable zoning have been completed and provide uninterrupted,

continuous and adequate paved access to the Mortgaged Property and the

Improvements in accordance with all Legal Requirements.

 

3.10.                        Licenses Permits.

Mortgagor has obtained from each Governmental Authority and from each

beneficiary of each restrictive covenant encumbering the Mortgaged Property (if

any) all licenses, permits, authorizations, consents and approvals necessary

for the operation, use and occupancy of the Improvements.

 

3.11.                        Lien

Potential. Mortgagor has not taken, suffered or permitted any action, the

effect of which would be to establish or cause the inception or priority of any

mechanics’ or materialman’s lien, statutory or otherwise, or any other lien,

charge, or encumbrance upon the Mortgaged Property (or any part thereof) to be

prior or superior to the lien and security interest of this Mortgage. Each

contractor, subcontractor, mechanic and materialman which has at any time

supplied labor or materials to the Mortgaged Property for or on behalf of

Mortgagor has been or will timely be paid in full, and Mortgagor has not

received any lien affidavit with respect to the Mortgaged Property.

 

3.12.                        Dangerous

Conditions. Mortgagor has no actual knowledge of any dangerous condition

affecting any portion of the Mortgaged Property.

 

3.13.                        Environmental

Matters. To the best of Mortgagor’s knowledge, after reasonable

investigation and inquiry, the Mortgaged Property is not in violation of any

Applicable Environmental Laws and is not subject to any existing, pending or

threatened investigation or inquiry by any Governmental Authority or to any

remedial obligations under any Applicable Environmental Laws. Mortgagor has no

knowledge that any flammable explosives, radioactive materials, hazardous or toxic

wastes, hazardous or toxic substances or related materials have been used,

generated, manufactured, stored, spilled, released, or disposed of on, under,

from, about or onto the Mortgaged

 

9

 

Property in violation of Applicable Environmental Laws. In addition,

Mortgagor has no knowledge of any presence, disposal, spill, use or release of

any hazardous or toxic wastes, hazardous or toxic substances or related

materials on, under, from, about or onto the Mortgaged Property prior to

Mortgagorts acquisition of title to the Mortgaged Property in

violation of Applicable Environmental Laws. 

To the best of Mortgagor’s knowledge, after reasonable investigation and

inquiry, no asbestos or asbestos-containing materials have been installed,

used, incorporated into or disposed of in the Improvements or on the Land at

any time in violation of Applicable Environmental Laws. To the best of

Mortgagor’ 5 knowledge, after reasonable investigation and inquiry, no

underground tanks or containers of any nature are located on the Mortgaged

Property, or were located on the Mortgaged Property and subsequently moved or

filled in violation of Applicable Environmental Laws. To the best of

Mortgagor’s knowledge, after reasonable investigation and inquiry, there are no

polychlorinated byphenyls (PCBs) located upon or in the Mortgaged Property,

including but not limited to any electrical transformers, flares and light

fixtures, or any other similar equipment or device of any nature in violation

of Applicable Environmental Laws. To the best of Mortgagor’ 5 knowledge, after

reasonable investigation and inquiry, there are no conditions likely to exist

during the term of this Mortgage, or in the foreseeable future, which would

require or are likely to require clean up, removal, remedial action, or other

responsive action pursuant to any Applicable Environmental Laws by Mortgagor,

or which would subject Mortgagor to damages, penalties, injunctive relief or

clean up costs under any Applicable Environmental Laws. To the best of

Mortgagor’s knowledge, after reasonable investigation and inquiry, no permits,

licenses or approvals are required under any Applicable Environmental Laws

relative to the Mortgaged Property. To the best of Mortgagor’s knowledge, after

reasonable investigation and inquiry, neither the Mortgaged Property nor

Mortgagor are subject to any judgment, decree, order or citation which relates

to or arises out of a violation of any Applicable Environmental Law, or that

requires Mortgagor to clean up, remove or take remedial action or other

responsive action pursuant to any Applicable Environmental Law. To the best of

Mortgagor’ 5 knowledge, after reasonable investigation and inquiry, there are

not now, nor to Mortgagor’s knowledge after reasonable investigation, have

there ever been any substances classified as hazardous or toxic under any

Applicable Environmental Law, stored, deposited, treated, recycled or disposed

of on, under, or at the Mortgaged Property in violation of Applicable Environmental

Laws. Mortgagor will fully comply with all Applicable Environmental Laws

relative to the Mortgaged Property at all times in the future.

 

Mortgagor has disclosed to all applicable Governmental Authorities all

facts, conditions and circumstances, if any, pertaining to the Mortgaged

Property which are required to be disclosed under Applicable Environmental

Laws.

 

ARTICLE IV

 

AFFIRMATIVE

COVENANTS

 

Mortgagor hereby unconditionally covenants and agrees with Mortgagee as

follows:

 

4.1.                              Payment

and Performance. Mortgagor will pay the Indebtedness in accordance with its

terms and will fully perform all of the Obligations on or before the dates they

are to be performed.

 

4.2.                              Existence.

Mortgagor will preserve and keep in full force and effect its existence,

 

10

 

rights, franchises and trade names, and all licenses and permits

necessary for the development and operation of the Mortgaged Property for its

intended use as permitted by applicable zoning ordinances.

 

4.3.                              Compliance

with Legal Requirements. Mortgagor will promptly and faithfully comply

with, conform to and obey all present and future Legal Requirements, whether or

not the same shall necessitate structural changes in, improvements to, or

interfere with the use or enjoyment of; the Mortgaged Property.

 

4.4.                              Payment

of lmpositions. Subject to the provisions of paragraph 12.4 herein,

Mortgagor will duly pay and discharge, or cause to be paid and discharged, the

Impositions not later than the date upon which the Impositions become due;

provided, however, that Mortgagor may, if permitted by law and if installment

payments would not create or permit the filing of a lien against the Mortgaged

Property, pay the Impositions in installments, whether or not interest shall

accrue on the unpaid balance of such Impositions. Within fifteen (15) days

following the due date of any of the Insurance Premiums (or any installment

thereof), Mortgagor, if paying such Impositions directly pursuant to the terms

of this Mortgage, shall furnish Mortgagee with evidence satisfactory to

Mortgagee of the payment thereof.

 

4.5.                              Condition

of Property. Mortgagor will keep the Mortgaged Property in the good order,

condition and appearance, and will make all repairs, replacements, renewals,

additions, betterments, improvements and alterations thereof and thereto,

interior and exterior, structural and nonstructural, ordinary and

extraordinary, foreseen and unforeseen, which are necessary or reasonably

appropriate to keep same in such order, condition and appearance. Mortgagor

will also use its best efforts to prevent any act or occurrence which might

materially impair the value or usefulness of the Mortgaged Property for its

intended usage as set forth in any plans and specifications for the

Improvements submitted to Mortgagee or in the Loan Documents. In instances

where repairs, replacements, renewals, additions, betterments, improvements or

alterations are required in and to the Mortgaged Property on an emergency basis

to prevent loss, damage, waste or destruction thereof, Mortgagor shall proceed

to construct same, or cause same to be constructed, notwithstanding anything to

the contrary contained in Paragraph 5.2 hereinbelow; provided, however, that

in instances where such emergency measures are to be taken, Mortgagor will

promptly notify Mortgagee in writing of the commencement of same and the

measures to be taken, and when same are completed, the completion date and the

measures actually taken.

 

4.6                                 Repairs.

Mortgagor shall not make any material improvements to the Mortgaged Property

unless consented to in writing by Mortgagee, which consent will not be

unreasonably withheld. Upon receipt of Mortgagee’s consent to the plans for the

Improvements in question (the “Plans”), Mortgagor shall construct its proposed

Improvements strictly in accordance with such Plans diligently, without delay

and to final completion in a good and workmanlike manner, free from

construction defects and in accordance with the Loan Documents. In no event

shall Mortgagee have any liability or responsibility whatsoever with respect to

any improvements made to the Mortgaged Property by Mortgagor, and as a

condition to the commencement of construction, Mortgagor shall cause all

contractors, subcontractors and other persons engaged by or on behalf of

Mortgagor with respect to the work to procure and maintain insurance coverage

against such risks, in such amounts and with such companies as Mortgagee may

reasonably require fully insuring and protecting Mortgagee in connection with

the completion of Mortgagor’s improvements. Mortgagee, by approving the Plans

for the construction of Improvements to the Mortgaged Property, is not thereby 

 

11

 

consenting to the imposition of any mechanic’s or materialmen’s or

other lien upon any of the Mortgaged Property as a result of the furnishing of

any materials, furnishings or equipment or the performance of any labor or

services, and in no event shall this Mortgage be deemed to have been subordinated

to any such lien or claim.

 

4.7.                              Insurance.

Mortgagor shall obtain and maintain the following types of insurance upon and

relating to the Mortgaged Property:

 

(a)                                  When and if required

by the Mortgagee, and to the extent available, “All Risk” property and fire

insurance (with extended coverage endorsement) in an amount not less than the

full replacement value of the Improvements (with a deductible not to exceed

$25,000.00 and with co-insurance limited to a maximum of 10% of the amount of

the policy), naming Mortgagee under a standard mortgagee clause (438 BFU) and

including agreed amount, inflation guard, replacement cost and waiver of

subrogation endorsements;

 

(b)                                 Comprehensive general

liability insurance in an amount not less than $2,000,000 insuring against

personal injury, death and property damage and naming Mortgagee as additional

insured; and

 

(c)                                  Such other types of

insurance as may be reasonably required from time to time by Mortgagee.

 

Upon the request of Mortgagee, Mortgagor

shall increase the coverages under any of the insurance policies required to be

maintained hereunder or otherwise modify such policies in accordance with

Mortgagee’s request. All of the insurance policies required hereunder shall be

issued by corporate insurers licensed to do business in the State of Illinois

rated A or better by A.M. Best Company and shall be in form acceptable to

Mortgagee. If and to the extent that any Improvements on the Mortgaged Property

is located within an area that has been or is hereafter designated or

identified as an area having special flood hazards by the Department of Housing

and Urban Development or by such other official as shall from time to time be

authorized by federal or state law to make such designation pursuant to any

national or state program of flood insurance, Mortgagor shall carry flood

insurance with respect to the Mortgaged Property in amounts not less than the

maximum limit of coverage then available with respect to the Mortgaged Property

or the amount of the Indebtedness, whichever is less. Certificates of all

insurance required to be maintained hereunder shall be delivered to Mortgagee,

along with evidence of the payment in full of all premiums required thereunder,

concurrently with Mortgagor’s execution of this Mortgage. All such certificates

shall be in form acceptable to Mortgagee. Certificates evidencing all renewal

and substitute policies of insurance shall be delivered to Mortgagee, along

with evidence of the payment in full of all premiums required thereunder, at

least 15 days before termination of the policies being renewed or substituted.

If any loss shall occur at any time when Mortgagor shall be in default

hereunder, Mortgagee shall be entitled to the benefit of all insurance policies

held or maintained by Mortgagor, to the same extent as if same had been made

payable to Mortgagee, and upon foreclosure hereunder, Mortgagee shall become

the owner thereof to the extent such properties relate to the Mortgaged

Property. Mortgagee shall have the right, but not the obligation, to make

premium payments, at Mortgagor’s expense, to prevent any cancellation,

endorsement, alteration or reissuance of any policy of insurance maintained by

Mortgagor, and such payments shall be accepted by the insurer to prevent same.

 

12

 

4.8.                              Restoration

Following Casualty. If any act or occurrence of any kind or nature

(including any casualty for which insurance was not obtained or obtainable)

shall result in damage to or destruction of the Mortgaged Property (such event

being called a “Loss”), Mortgagor will give prompt written notice thereof to

Mortgagee. All insurance proceeds paid or payable in connection with such Loss

shall be paid to Mortgagee. Mortgagee shall have the right either (a) to place

all insurance proceeds received in connection with such Loss in a separate

account for the benefit of Mortgagee and Mortgagor to be used to restore,

repair or replace and rebuild the Mortgaged Property as nearly as possible to

its value, condition and character immediately prior to such Loss or (b) to

apply all insurance proceeds in connection with such Loss to the payment of the

Indebtedness in such order as Mortgagee may elect; provided, however, that if

no Event of Default has occurred and is continuing hereunder at the time of

such Loss, if Mortgagee determines that Mortgagor will be able to pay all

amounts becoming due under the Note during the pendency of any restoration or

repairs to or replacement of the Mortgaged Property and if the available insurance

proceeds are sufficient, in Mortgagee’ s reasonable judgment, to fully and

completely restore, repair or replace the Mortgaged Property, or if such

proceeds are insufficient for such purposes, if Mortgagor provides additional

sums (the “Additional Sums”) to Mortgagee’ s reasonable satisfaction so that

the aggregate of such proceeds and such Additional Sums will be sufficient for

such purpose, then all of the insurance proceeds payable with respect thereto,

together with any Additional Sums provided by Mortgagor, shall be placed in a

separate account for the benefit of Mortgagee and Mortgagor to be used to fully

and completely restore, repair or replace the Mortgaged Property as nearly as

possible to its value, condition and character immediately prior to such loss.

Mortgagor hereby covenants to diligently prosecute any restoration, repairs or

replacement of the Mortgaged Property undertaken by or on behalf of Mortgagor

pursuant to this Paragraph 4.8, and agrees that all such work shall be

conducted pursuant to written contracts approved by Mortgagee in writing. In

the event any insurance proceeds and/or Additional Sums remain following the

restoration, repair or replacement of the Mortgaged Property, so long as no

Event of Default or event or condition which, with the giving of notice, the

passage of time or both, could mature into an Event of Default, then exists,

such amounts may be retained by Mortgagor.

 

4.9                                 Inspection.

Mortgagor will permit Mortgagee, and its agents, representatives and employees,

to inspect the Mortgaged Property at all reasonable times upon reasonable

advance notice.

 

4.10.                        Defense

of Actions. If the interest of Mortgagee in the Mortgaged Property, or any

part thereof; or the Loan, or the respective rights and obligations of Mortgagor

and Mortgagee pursuant to this Mortgage, shall be endangered or shall be

attacked, directly or indirectly, Mortgagor hereby authorizes Mortgagee, at

Mortgagor’s expense, to take all necessary and proper steps for the defense of

such title or interest, including the employment of counsel, the prosecution or

defense of litigation and the compromise or discharge of claims made against

such title or interest in the Mortgaged Property. Mortgagor will indemnify and

hold Mortgagee harmless from and against any and all loss, cost, damage,

liability or expense incurred by Mortgagee in protecting its interests

hereunder in such an event (including all court costs and reasonable attorneys’

fees) unless the litigation is between Mortgagor and Mortgagee and Mortgagor finally

prevails in such litigation.

 

4.11.                        Future

Impositions. If at any time any law shall be enacted imposing or

authorizing the imposition of any tax upon this Mortgage or upon any rights,

titles, liens or security interests created hereby or upon the Note, or any

part thereof; Mortgagor shall immediately pay all such taxes; provided,

however, that in the alternative, Mortgagor may, in the event of the enactment

of such a

 

13

 

law, and must, if it is unlawful for Mortgagor to pay such taxes,

prepay the Note in full within one hundred twenty (120) days after demand

therefor by Mortgagee. Mortgagor shall, upon request, promptly furnish at any

time and from time to time, a written statement or affidavit, in such form as

may be required by Mortgagee, stating the amount of the unpaid balance of the

Note and that there are no offsets or defenses against full payment of the Note

and performance of the terms hereof or, if there are any such offsets and defenses,

specifying them in reasonable detail.

 

4.12.                        Books

and Records. Mortgagor will maintain full and accurate books of account and

other records reflecting the results of its operations and will furnish or

cause to be furnished to Mortgagee, on or before ninety (90) days following the

end of each calendar year: (i) annual balance sheet and profit and loss

statements with respect to Mortgagor, the Guarantor and the Mortgaged Property

prepared in accordance with generally accepted accounting principles consistently

applied and certified by Mortgagor’s and the Guarantor’s chief financial

officer, (ii) an annual operating statement, together with a complete sales

report and other supporting data reflecting all material information with

respect to the operation of the Mortgaged Property, and (iii) all other

financial information and reports with respect to Mortgagor, the Guarantors and

the Mortgaged Property which Mortgagee may reasonably request, including,

without limitation, copies of the most recent federal income tax returns of

Mortgagor and the Guarantor. Mortgagor shall also deliver to Mortgagee all

other financial statements required to be delivered pursuant to the Prior

Indebtedness Documents. All of the above-referenced financial statements shall

be in such detail as Mortgagee may reasonably require and shall be certified by

the subjects thereof as being true, correct and complete for the period covered

thereby. At any time, and from time to time, Mortgagor shall deliver to

Mortgagee such other financial statements and data as Mortgagee shall

reasonably request with respect to Mortgagor, the Guarantors and/or the

ownership, maintenance, use and Operation of the Mortgaged Property, and

Mortgagee shall have the right, at reasonable times and upon reasonable notice,

to audit Mortgagor’s books of account and records and the books of account and

records relating to the Mortgaged Property, all of which shall be maintained

and made available to Mortgagee and Mortgagee’s representatives for such

purposes on the Mortgaged Property or at such other location as Mortgagee may

approve.

 

4.13.                        Late

Charge. At the option of the Mortgagee, as provided in the Note, Mortgagor

will pay a “late charge” not exceeding five percent (5%) of any installment on

the Note when paid more than ten (10) days after the due date thereof; to cover

the extra expenses involved in handling delinquent payments, subject to the

limitations of Paragraph 12.10 hereof.

 

4.14.                        Expenses. Mortgagor

shall pay all reasonable costs and expenses incurred by Mortgagee from time to

time in connection with the Mortgaged Property, the Loan, the Loan Documents,

any amendments or modifications to any of the Loan Documents, any waiver of any

provisions of the Loan Documents and any other matter related to the Loan

including, without limitation, the reasonable costs and expenses of the

preparation of this Mortgage and of any other documents or instruments

Mortgagee considers necessary or appropriate with respect to the Loan, the

reasonable costs and expenses of or incident to the enforcement or performance

of and compliance with any of the provisions of this Mortgage or any of the

other Loan Documents and any other reasonable costs and expenses of any kind or

nature whatsoever which at any time prior to or after the execution hereof are

payable with respect to the Mortgaged Property, or the ownership, operation,

use, occupancy or enjoyment thereof; or which are related in any way to the

transactions contemplated under this Mortgage.

 

14

 

4.15.                        Additional Acts. In

addition to the acts recited herein and contemplated to be performed, executed

and/or delivered by Mortgagor, Mortgagor hereby agrees, at any time, and from

time to time upon the request of Mortgagee, to perform, execute, acknowledge,

deliver, record and/or file such further instruments, do such further acts and

give such further assurances as Mortgagee may reasonably determine to be

necessary or proper to (a) promptly implement the intent of Mortgagor and

Mortgagee under this Mortgage; (b) promptly correct any defect, error or

omission which may be discovered in this Mortgage or any other Loan Document,

and execute any and all additional documents, as may be requested by Mortgagee

to correct such defect, error or omission or to identify any additional

properties which are or become subject to this Mortgage; (c) assure Mortgagee a

valid and direct lien and perfected security interest, subject only to the

applicable Permitted Encumbrances, under the Loan Documents or any of them on

the Mortgaged Property; (d) create, perfect, preserve, maintain and protect the

liens and security interests created or intended to be created by the Loan

Documents; and (e) provide the rights and remedies to Mortgagee granted or

provided for by the Loan Documents. Mortgagor, upon request of Mortgagee, will

execute, acknowledge, deliver and record and/or file such further instruments

and do such further acts as Mortgagee may reasonably determine to be necessary,

desirable or proper to carry out more effectively the purposes of the Loan

Documents, to subject to the liens and security interests thereof any property

intended by the terms thereof to be covered thereby, including specifically,

without limitation, any renewals, additions, substitutions, replacements or

appurtenances to the Mortgaged Property, and to complete, execute, record and

file any document or instrument necessary to place third parties on notice of

the liens and security interests granted under the Loan Documents. Mortgagor

hereby irrevocably appoints Mortgagee as its agent and attorney-in-fact, at the

Option of Mortgagee, to execute, acknowledge and deliver all such instruments

and additionally to record and file any of the same as may be necessary, if

Mortgagor fails to do so within ten (10) business days after Mortgagee’s

written request therefor.

 

4.16.                        Notices by Governmental  Authority.

Fire and Casualty Losses. Etc. Mortgagor shall timely comply with and

promptly furnish to Mortgagee true and complete copies of any official notice

or claim by any Governmental Authority pertaining to any of the Mortgaged

Property. Mortgagor shall promptly notify Mortgagee of any fire or other

casualty or any notice of taking or eminent domain action or proceeding

affecting any of the Mortgaged Property.

 

4.17.                        Notice of Certain Events.

Mortgagor shall promptly notify Mortgagee if Mortgagor learns of the occurrence

of (a) any event which constitutes an Event of Default, together with a

detailed statement by Mortgagor of the steps being taken to cure such Event of

Default (however, this shall not affect any of the obligations or liabilities

of Mortgagor or any of the rights or remedies of Mortgagee), (b) the receipt of

any notice from, or the taking of any other action by, the holder of any

promissory note, debenture or other evidence of indebtedness of Mortgagor

(specifically including, without limitation, those secured by the Prior

Indebtedness Documents) with respect to a claimed default, together with a

detailed statement by Mortgagor specifying the notice given or other action

taken by such holder and the nature of the claimed default and what action

Mortgagor is taking or proposes to take with respect thereto, (c) any legal,

judicial or regulatory proceedings affecting Mortgagor or any of its properties

in which the amount involved is material and is not covered by insurance, or

with respect to which an adverse decision is reasonably likely which would have

a material adverse effect upon Mortgagor or any of the Mortgaged Property, or

(d) any other event or condition having a material adverse effect on Mortgagor

or the Mortgaged Property.

 

4.18.                        Certificates of Compliance.

Within ten (10) business days following Mortgagor’s 

 

15

 

receipt of a request from Mortgagee, Mortgagor will furnish or cause to

be furnished to Mortgagee certificates of compliance signed by Mortgagor, (i)

stating that a review of the activities of Mortgagor has been made to determine

whether Mortgagor has fulfilled all of its obligations under the Loan

Documents; (ii) stating that to the best of Mortgagor’ S knowledge, after

reasonable investigation and inquiry, Mortgagor has fulfilled all of its

obligations under the Loan Documents and that all representations made herein

continue to be true and correct (or specifying the nature of any change), or if

an Event of Default shall have occurred, specifying the Event of Default and

the nature and status thereof; (iii) to the extent requested from time to time

by Mortgagee, specifically affirming compliance of Mortgagor with any of its

representations or obligations under the Loan Documents; and (iv) containing or

accompanied by such financial or other details, information and material as

Mortgagee may reasonably request to evidence such compliance.

 

4.19.                        Restriction on Distribution.

Except as permitted by the Loan Agreement, Mortgagor shall not use any proceeds

of the Loan to pay fees, commissions, salaries, or other compensation, or

otherwise receive or accept or agree to receive or accept any compensation,

“kickbacks”, rebates or other payments from any parties with respect to the

Property, of any kind, whether directly or indirectly, to Mortgagor or any

agent or employee or affiliate of Mortgagor without the prior written consent

of Mortgagee, which consent may be given or withheld in Mortgagee’s sole and

absolute discretion.

 

4.20.                        No Conditional Sale

Contracts Etc. Without the prior written consent of Mortgagee, which

consent may be granted or withheld at the sole discretion of Mortgagee, no

material materials, equipment, or fixtures shall be supplied, purchased, or

installed for the operation of the Improvements pursuant to security

agreements, conditional sale contracts, lease agreements, or other arrangements

or understandings whereby a security interest or title is retained by any party

or the right is reserved or accrues to any party to remove or repossess any

such materials, equipment, or fixtures intended to be utilized in the operation

of the Improvements.

 

4.21.                        Indemnification. Mortgagor

agrees to indemnify Mortgagee and to hold Mortgagee harmless from and against

any and all claims, demands, causes of action, losses, damages, liabilities,

costs and expenses (including, without limitation, reasonable attorneys’ fees

and court costs) at any time asserted against or incurred by Mortgagee by

reason of; arising out of or in connection with any violation or breach by

Mortgagor of any of the terms and provisions of the Loan Documents including,

without limitation, any breach or violation of any Applicable Environmental

Laws, except to the extent caused solely by the gross negligence or willful

misconduct of Mortgagee. In addition, Mortgagor agrees to indemnify Mortgagee

and to hold Mortgagee harmless from and against any and all costs, expenses,

damages, losses or liabilities incurred or suffered by Mortgagee as a result of

any removal or remedial obligations imposed with respect to the Mortgaged

Property under any Applicable Environmental Laws, except to the extent caused

solely by the gross negligence or willful misconduct of Mortgagee.

 

4.22.                        Compliance with Applicable

Environmental Laws. Mortgagor will not cause or knowingly permit the

Mortgaged Property to be in violation of any Applicable Environmental Law, or

do or knowingly permit anything to be done which will subject the Mortgaged

Property to any remedial obligations under any Applicable Environmental Law.

Mortgagor will promptly notify Mortgagee in writing of any existing, pending or

threatened investigation by any Governmental Authority under or in connection

with any Applicable Environmental Law. Mortgagor will not use the Mortgaged

Property in a manner which will result in the disposal or release of any

hazardous 

 

16

 

substances or solid waste on, from or to the Mortgaged Property in

violation of any Applicable Environmental Laws, and shall at all times keep the

Mortgaged Property free of all hazardous substances and wastes, the presence of

which would be a violation of any Applicable Environmental Law. If at any time

during the existence of this Mortgage, Mortgagee receives information leading

Mortgagee to believe that the Mortgaged Property is not free of hazardous

substances or wastes, the presence of which would be a violation of any

Applicable Environmental Law, then Mortgagor shall provide to Mortgagee, at

Mortgagor’s sole cost and expense and within a reasonable period of time as

designated by Mortgagee following Mortgagee’s request therefor, a current

report by an environmental engineer acceptable to Mortgagee and covering such

matters with respect to the Mortgaged Property as may be required by Mortgagee.

If Mortgagor fails to provide Mortgagee with such report within such reasonable

period of time designated by Mortgagee following Mortgagee’s request therefor,

Mortgagee shall have the right to obtain such report at Mortgagor’s cost, and

the same shall be a demand obligation owing by Mortgagor to Mortgagee and shall

be a part of the Indebtedness. Mortgagor covenants to operate the Mortgaged

Property (whether or not such property constitutes a “Facility” as

defined by the Comprehensive Environmental Response, Compensation and Liability

Act of 1980, as amended (“CERCLA”)), so that no cleanup or other obligation

arises in respect of CERCLA or other applicable Environmental Law which would

constitute a lien or charge on the Mortgaged Property prior to that of this

Mortgage. If any such claim be made or any obligation should nevertheless arise

hereafter, Mortgagor agrees that it will, at its own expense, (a) promptly cure

same and (b) indemnify Mortgagee from any liability, responsibility or

obligation in respect thereof or in respect of any cleanup or other liability

as successor, secured party or otherwise (regardless of whether or not

Mortgagee may be deemed to be an “owner or operator” under CERCLA) for any

reason including, but not limited to, the enforcement of Mortgagee’s rights as

a secured party under this Mortgage or any obligation of law, except to the

extent caused solely by the gross negligence or willful misconduct of

Mortgagee.

 

4.23.                        Maintenance of  Rights

of  Way. Easements and Licenses. Mortgagor will maintain, preserve

and renew all contract rights, rights of way, easements, grants, privileges,

licenses and franchises reasonably necessary for the use of the Mortgaged

Property from time to time and will not, without the prior written consent of

Mortgagee (which consent may be granted or withheld at the sole discretion of

Mortgagee), initiate, join in or consent to any private restrictive covenant or

other public or private restriction as to the use of the Mortgaged Property.

Mortgagor shall, however, comply with all restrictive covenants which may at

any time affect the Mortgaged Property, zoning ordinances and other public or

private restrictions as to the use of the Mortgaged Property.

 

4.24.                        Performance  of

Obligations  in  Regard  to  the  Prior  Indebtedness.

Mortgagor will fully and timely perform all of its obligations under the Prior

Indebtedness Documents and in regard to the indebtedness and obligations

evidenced and/or secured thereby and will not commit or allow a default to

occur under any thereof or in regard to any of the Prior Indebtedness. Promptly

upon Mortgagor’s receipt thereof; Mortgagor will provide to Mortgagee copies of

all notices Mortgagor receives or gives in regard to any of the Prior

Indebtedness.

 

17

 

ARTICLE V

 

NEGATIVE

COVENANTS

 

Mortgagor hereby covenants and agrees with

Mortgagee that until the entire Indebtedness shall have been paid in full and

all of the Obligations shall have been fully performed and discharged:

 

5.1.                              Use

Violations. Mortgagor will not use, maintain, operate or occupy, or allow

the use, maintenance, operation or occupancy of the Mortgaged Property in a

manner which (a) violates any Legal Requirement, (b) may be dangerous unless

safeguarded as required by law, (c) constitutes a public or private nuisance or

(d) makes void, voidable or cancelable, or materially increases the premium of;

any insurance then in force with respect thereto.

 

5.2.                              Alterations.

Mortgagor will not commit or knowingly permit any waste of the Mortgaged

Property and will not (subject to the provisions of Paragraphs 4, 5 and 4.7

herein), without the prior written consent of Mortgagee, which may be granted

or withheld at the sole discretion of Mortgagee, make or permit to be made any

alterations or additions to the Mortgaged Property of a material nature.

 

5.3.                              Replacement of

Fixtures and Personalty. Mortgagor will not, without the prior written

consent of Mortgagee, which may be granted or withheld at the sole discretion

of Mortgagee, permit any of the Fixtures or Personalty to be removed at any

time from the Land or Improvements unless the removed item is removed temporarily

for maintenance or repair or, if removed permanently, is replaced by an item of

equal suitability and value, owned by Mortgagor free and clear of any lien or

security interest except such as may be first approved in writing by Mortgagee.

 

5.4.                               No

Further Encumbrances. Mortgagor will not, without the prior written consent

of Mortgagee, which may be granted or withheld at the sole discretion of

Mortgagee, create, place, suffer or permit to be created or placed or, through

any act or failure to act, acquiesce in the placing of or allow to remain, any

mortgage, pledge, lien (statutory, constitutional or contractual), security

interest, encumbrance or charge on any of the Mortgaged Property, or enter into

any conditional sale or other title retention agreement with respect to any of

the Mortgaged Property, regardless of whether same are expressly subordinate to

the liens of the Loan Documents. Notwithstanding the foregoing, Mortgagor shall

have the right to contest in good faith by appropriate proceedings any of the

foregoing encumbrances which are inferior and subordinate to the lien of this

Mortgage; provided, that as a condition thereto Mortgagor shall furnish to

Mortgagee a surety bond or other security satisfactory to Mortgagee in its

reasonable discretion fully protecting Mortgagee from the adverse consequences

of any such contest.

 

5.5.                               Prohibition

on Transfer. Mortgagor shall not sell, transfer, convey, pledge, assign,

hypothecate or encumber any of its rights or interests in the Mortgaged Property,

or any part thereof or interest therein, or agree to do any of the foregoing

either directly, by operation of law or otherwise without the prior written

consent of Mortgagee, which may be granted or withheld at the sole discretion

of Mortgagee. Upon any pledge, assignment, hypothecation or encumbrance, or

sale, transfer or conveyance in violation of this Paragraph, and without

impairing any remedies or rights of Mortgagee on account of such pledge,

assignment, hypothecation or encumbrance, or sale, transfer or conveyance,

Mortgagee shall have the right at its election to declare the entire

Indebtedness secured hereby to be immediately due and payable and to pursue all

of its rights and remedies as a result of an Event of Default under Article VI

hereof. A transfer or transfers of a partnership interest or interests in

Mortgagor or any capital stock or other ownership interest in any partner in

Mortgagor (other than a non-material interest in the limited partners) without

Mortgagee’s prior written consent,

 

18

 

which may be granted or withheld at the sole discretion of Mortgagee,

shall constitute a violation of this Paragraph 5.5. 

 

Mortgagee shall

have the right to condition its consent to any of the transactions described in

this Paragraph 5.5 upon, among other things, the payment by Mortgagor of a

transfer fee or an increase in the rate of interest applicable to the Loan.

 

5.6.                               Restrictions.

Zoning and Annexation. Mortgagor shall not without the prior written

consent of Mortgagee, which may be granted or withheld at the sole discretion

of Mortgagee, (i) impose any restrictive covenants or encumbrances upon the any

of Mortgaged Property, (ii) execute or file any subdivision plat affecting any

of the Mortgaged Property, (iii) subject any portion of the Mortgaged Property

to any zoning restrictions or classifications, (iv) consent to the annexation

of any of the Mortgaged Property to any city or (v) amend, modify, terminate or

allow to be terminated any contract right (specifically including, without

limitation, the Annexation Agreement referenced above) or easement.

 

5.7                                 No

Amendments to Prior Indebtedness. 

Without the prior written consent of Mortgagee, which may be granted or

withheld at the sole discretion of Mortgagee, Mortgagor will not amend or

modify any of the Prior Indebtedness Documents or any of the terms of the Prior

Indebtedness.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

The

term “Event of Default,” as used herein and in the Loan Documents, shall mean

the occurrence or happening, at any time and from time to time, of any one or

more of the following:

 

6.1.                              Payment

of Indebtedness. If Mortgagor shall fail, refuse or neglect to pay, in

full, all of the Indebtedness on the maturity date thereof or any installment

or portion of the Indebtedness as and when the same shall become due and

payable, whether at the due date thereof stipulated in the Loan Documents or at

a date fixed for prepayment or by acceleration or otherwise and such failure,

refusal or neglect continues upon the expiration of any cure period, if any,

applicable thereto as set forth in the Note.

 

6.2.                              Performance

of Obligations. If Mortgagor shall fail, refuse or neglect to perform and

discharge fully and timely any of the Obligations as and when required under

the Loan Documents and such failure continues for thirty (30) days following

the receipt by Mortgagor of written notice thereof from Mortgagee.

 

6.3.                              False

Representation. If any representation or warranty made by Mortgagor or the

Guarantor in, under or pursuant to any of the Loan Documents or any other

documents executed in connection therewith shall be false, erroneous or

misleading in any material respect.

 

6.4.                              Judgment.

If any final money judgment in an amount in excess of $250,000.00 shall be

rendered against Mortgagor or the Guarantor and the same shall not be paid or

execution on the same shall not be stayed by perfection of an appeal or other

appropriate action.

 

19

 

6.5.                              Voluntary

Bankruptcy. If Mortgagor or the Guarantor shall (a) seek entry of an order

for relief as a debtor in a proceeding under the Federal Bankruptcy Code, (b)

seek, consent to or not contest the appointment of a receiver, trustee,

conservator or liquidator for itself or himself or for all or any part of the

Mortgaged Property, any of Mortgagor’ 5 other property or any property of the

Guarantor, (c) file a petition seeking relief under the bankruptcy,

arrangement, reorganization or other debtor relief laws of the United States or

of any state or other jurisdiction or answer admitting the material allegations

of a petition against it, (d) make a general assignment for the benefit of its

creditors or (e) admit in writing its inability to pay its debts as they

mature.

 

6.6.                               Involuntary

Bankruptcy. If (a) a petition is filed against Mortgagor or the Guarantor

seeking relief under the bankruptcy, arrangement, reorganization or other

debtor relief laws of the United States or any state or other jurisdiction, or

approving a petition seeking reorganization or an arrangement of its or his

debts, or (b) a court enters an order, judgment or decree appointing, without

the consent of Mortgagor or the Guarantor, as the case may be, a receiver,

trustee, conservator or liquidator for it, or for all or any part of the

Mortgaged Property or any of Mortgagor’ 5 other property or any property of the

Guarantor, and such petition or order shall not be and remain discharged or

stayed within a period of sixty (60) days after its entry.

 

6.7.                               Foreclosure

of Other Liens. If the holder of any lien or security interest on any of

the Mortgaged Property (without implying Mortgagee’s consent to the existence,

placing, creating or permitting of any such lien or security interest),

specifically including, without limitation, any of the Prior Indebtedness

Documents, institutes foreclosure or other proceedings for the enforcement of

its remedies thereunder.

 

6.8.                               Sale,

Lease or Other Transfer. Any sale, lease, exchange, assignment, conveyance,

transfer of possession or other disposition of the Mortgaged Property (or any

part thereof or interest therein) by Mortgagor whether directly, by operation

of law or otherwise, or any sale, transfer, conveyance or assignment of any

interest in Mortgagor (or in any partner in Mortgagor, except as provided in

Paragraph 5.5 above) without in each case the prior written consent of

Mortgagee, which consent may be granted or withheld in Mortgagee’s sole

discretion.

 

6.9.                               Title

and Lien Priority. If the title of Mortgagor to any or all of the Mortgaged

Property or the status of this Mortgage as a lien and security interest on the

Mortgaged Property subject only to the applicable Permitted Encumbrances shall

be challenged or endangered by any person or entity whatsoever, and Mortgagor

shall fail to (a) immediately commence and thereafter continue diligent efforts

to cure the same or (b) provide Mortgagee with a bond or other security which

is satisfactory to Mortgagee in its sole discretion.

 

6.10.                         Termination.

The dissolution or termination of Mortgagor or the Guarantor.

 

6.11.                         Levy

on Assets. A levy on the assets of Mortgagor or the Guarantor which is not

stayed, vacated or set aside within forty-five (45) days.

 

6.12.                         Enforceability

of Loan Documents. If the validity or enforceability of this Mortgage or

the Note, the Loan Agreement or any other Loan Document shall be contested by

or on behalf of Mortgagor or the Guarantor or if Mortgagor or the Guarantor

shall wrongfully deny that it has any or further liability or obligation hereunder

or thereunder.

 

20

 

6.13.                        Default

under Prior Indebtedness Documents. If any default or Event of Default

shall occur under any of the Prior Indebtedness Documents.

 

ARTICLE VII

 

DEFAULT AND

FORECLOSURE

 

If

an Event of Default shall exist, Mortgagee may, at Mortgagee’s election,

exercise any or all of the following rights, remedies and recourses, in

addition to any other remedy at law or in equity which Mortgagee may have:

 

7.1.                              Acceleration

and Future Advances. Mortgagee may declare the entire Indebtedness,

including the then unpaid principal balance on the Note, the accrued but unpaid

interest thereon, court costs and reasonable attorney’s fees incurred in regard

to the Loan immediately due and payable, without notice, presentment, protest,

demand or action of any nature whatsoever (each of which hereby is expressly

waived by Mortgagor), whereupon the same shall become immediately due and

payable. Additionally, Mortgagee shall not be required to make any further

advances on the Note or other Loan Documents upon the occurrence of an Event of

Default or an event or condition which, with the giving of notice, passage of

time, or both, would constitute an Event of Default.

 

7.2.                              Entry

on Mortgaged Property. Mortgagee may enter upon the Mortgaged Property and

take exclusive possession thereof and of all books, records and accounts

relating thereto without notice and without being guilty of trespass. If

Mortgagor remains in possession of all or any part of the Mortgaged Property

after an Event of Default and without Mortgagee’s prior written consent

thereto, Mortgagee may, without notice to Mortgagor, invoke any and all legal

remedies to dispossess Mortgagor, including specifically one or more actions

for forcible entry and detainer, trespass to try title and writ of restitution.

Nothing contained in the foregoing sentence shall, however, be construed to

impose any greater obligation or any prerequisites to acquiring possession of

the Mortgaged Property after an Event of Default than would have existed in the

absence of such sentence.

 

7.3.                              Operation

of Mortgaged Property. Mortgagee may hold, lease, manage, operate or

otherwise use or permit the use of the Mortgaged Property, either itself or by

other persons, firms or entities, in such manner, for such time and upon such

other terms as Mortgagee may deem to be prudent and reasonable under the

circumstances (making such repairs, alterations, additions and improvements

thereto and taking any and all other action with reference thereto, from time

to time, as Mortgagee shall deem necessary or desirable), and apply all Rents

and other amounts collected by or on behalf of Mortgagee in connection

therewith in accordance with the provisions of Paragraph 7.16 herein. Mortgagor

hereby irrevocably appoints Mortgagee as the agent and attorney-in-fact of

Mortgagor, with full power of substitution, and in the name of Mortgagor, if

Mortgagee elects to do so, following the occurrence and during the continuance

of an Event of Default, to (a) endorse the name of Mortgagor on any checks or

drafts representing proceeds of the insurance policies, or other checks or

instruments payable to Mortgagor with respect to the Mortgaged Property, (b)

prosecute or defend any action or proceeding incident to the Mortgaged

Property, and (c) take any action with respect to the Mortgaged Property that

Mortgagee may at any time and from time to time deem necessary or appropriate.

Mortgagee shall have no obligation to undertake any of the foregoing 

 

21

 

actions, and if Mortgagee should do so, it shall have no liability to

Mortgagor for the sufficiency or adequacy of any such actions taken by

Mortgagee.

 

7.4.                              Foreclosure

and Sale.

 

(a)                                  Mortgagee

may sell or offer for sale the Mortgaged Property in such portions, order and

parcels as Mortgagee may determine, with or without having first taken

possession of same, all in accordance with applicable Legal Requirements,

including, without limitation, the Illinois Mortgage Foreclosure Law (the

“Foreclosure Law”).

 

(b)                                 Mortgagee

may, at its option, accomplish all or any of the aforesaid in such manner as

permitted or required by applicable Legal Requirements therefor, including, to

the extent there relevant, the Uniform Commercial Code there in effect. Nothing

contained in this Paragraph shall be construed to limit in any way Mortgagee’s

right to sell the Mortgaged Property by private sale if; and to the extent

that, such private sale is permitted under the laws of the state where the

Mortgaged Property (or that portion thereof to be sold) is located or by public

or private sale after entry of a judgment by any court of competent

jurisdiction ordering same. At any such sale:

 

(i)                                     whether

made under the power herein contained any other Legal Requirement or by virtue

of any judicial proceedings or any other legal right, remedy or recourse, it

shall not be necessary for Mortgagee to have physically present, or to have

constructive possession of; the Mortgaged Property (Mortgagor shall deliver to

Mortgagee any portion of the Mortgaged Property not actually or constructively

possessed by Mortgagee immediately upon demand by Mortgagee), 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 present and delivered to

purchaser at such sale;

 

(ii)                                  each

instrument of conveyance executed on behalf of Mortgagee shall be the standard

sheriffs deed used in the State of Illinois, subject only to the Permitted

Encumbrances, binding upon Mortgagor;

 

 (iii)  each and every recital contained in any

instrument of conveyance made by or on behalf of Mortgagee shall presumptively

establish the truth and accuracy of the matters recited therein, including,

without limitation, nonpayment of the Indebtedness, advertisement and conduct

of such sale in the manner provided herein and otherwise by law;

 

(iv)  any and

all prerequisites to the validity thereof shall be presumed to have been

performed;

 

(v)  the

receipt by Mortgagee or of such other party or officer making the sale of the

full amount of the purchase money shall be sufficient to discharge the

purchaser or purchasers from any further obligation for the payment thereof;

and no such purchaser or purchasers, or his or their assigns or personal

representatives, shall thereafter be obligated to see to the application of

such purchase money or be in any way answerable for any loss, misapplication or

nonapplication thereof;

 

22

 

(vi)  to the

fullest extent permitted by law, Mortgagor shall be completely and irrevocably

divested of all of its right, title, interest, claim and demand whatsoever,

either at law or in equity, in and to the property sold, and such sale shall be

a perpetual bar, both at law and in equity, against Mortgagor and against all

other persons claiming or to claim the property sold or to any part thereof by,

through or under Mortgagor; and

 

(vii)  to the

extent and under such circumstances as are permitted by law, Mortgagee may be a

purchaser at any such sale.

 

7.5.                              Divestment

of Rights: Tenant at Sufferance. After sale of the Mortgaged Property, or

any portion thereof; Mortgagor will be divested of any and all interest and

claim thereto, including any interest or claim to all insurance policies,

bonds, loan commitments and other intangible property covered hereby.

Additionally, with respect to the Land, Improvements, Fixtures and Personalty,

after a sale of all or any portion thereof; Mortgagor will be considered a

tenant at sufferance of the purchaser of the same, and said purchaser shall be

entitled to immediate possession thereof; and if Mortgagor shall fail to vacate

the Mortgaged Property immediately, the purchaser may and shall have the right,

without further notice to Mortgagor, to go into any justice court in any

precinct or county in which the Mortgaged Property is located and file an

action in forcible entry and detainer, which action shall lie against Mortgagor

or its assigns or legal representatives, as a tenant at sufferance. This remedy

is cumulative of any and all remedies the purchaser may have hereunder or

otherwise.

 

7.6.                              Mortgagee

or Receiver. Upon, or at any time after, commencement of foreclosure of the

lien and security interest provided for herein or any legal proceedings

hereunder, and as permitted by the Foreclosure Law, Mortgagee may make

application to a court of competent jurisdiction, as a matter of strict right

and without notice to Mortgagor or regard to the adequacy of the Mortgaged

Property for the repayment of the Indebtedness and/or for appointment of a

receiver of the Mortgaged Property, and Mortgagor does hereby irrevocably

consent to such appointment. Any such receiver shall have all the usual powers

and duties of receivers in similar cases, including the ~l power to rent,

maintain and otherwise operate the Mortgaged Property upon such terms as may be

approved by the court, and shall apply such Rents in accordance with the

provisions of Paragraph 7.16 herein. The right to the appointment of a receiver

shall apply regardless of whether Mortgagee has commenced procedures for the

foreclosure of the liens and security interests created herein, or has

commenced any other legal proceedings to enforce payment of the Indebtedness or

performance or discharge of the Obligations, and shall also apply upon the

actual or threatened waste to any part of the Mortgaged Property.

 

7.7.                              Separate

Sales. Mortgagee may sell all or any portion of the Mortgaged Property

together or in lots or parcels and in such manner and order as Mortgagee, in

its sole discretion, may elect. The sale or sales by Mortgagee of less than the

whole of the Mortgaged Property shall not exhaust the power of sale herein

granted, and Mortgagee is specifically empowered to make successive sale or

sales under such power until the whole of the Mortgaged Property shall be sold;

and if the proceeds of such sale or sales of less than the whole of such

Mortgaged Property shall be less than the aggregate of the Indebtedness and the

expense of enforcing Mortgagee’s rights under the Loan Documents, this Mortgage

and the lien, security interest and assignment hereof shall remain in full

force and effect as to the unsold portion of the Mortgaged Property just as

though no sale or sales had been made; provided, however, that Mortgagor shall

never have any right to require the sale or 

 

23

 

sales of less than the whole of the Mortgaged Property, but Mortgagee

shall have the right, at its sole election, to sell less than the whole of the

Mortgaged Property. As among the various counties in which items of the

Mortgaged Property may be situated, sales in such counties may be conducted in

any order that Mortgagee may deem expedient; and any one or more of such sales

may be conducted in the same month, or in successive or different months, as

the Mortgagee may deem expedient. If an Event of Default exists hereunder, the

holder of the Indebtedness or any part thereof on which the payment is delinquent

shall have the option to proceed as if under a full foreclosure, conducting the

sale as herein provided without declaring the entire Indebtedness due, and if

sale is made because of default of an installment, or a part of an installment,

such sale may be made subject to the unmatured part of the Note and the

Indebtedness; and such sale, if so made, shall not in any manner affect the

unmatured part of the Indebtedness but as to such unmatured part, this Mortgage

shall remain in full force and effect as though no sale had been made under the

provisions of this paragraph. Any number of sales may be made hereunder without

exhausting the right of sale for any unmatured part of the Indebtedness secured

hereby.

 

7.8                                 Foreclosure

for Installments. Mortgagee shall have the option to proceed with

foreclosure and satisfaction of any installments of the Indebtedness which have

not been paid when due, either through the courts or by proceeding with

foreclosure and satisfaction of the matured but unpaid portion of the Indebtedness

as if under a full foreclosure, conducting the sale as herein provided without

declaring the entire Indebtedness due; such sale may be made subject to the

unmatured portion of the Indebtedness, and any such sale shall not in any

manner affect the unmatured portion of the Indebtedness, but as to such

unmatured portion of the Indebtedness this Mortgage shall remain in full force

and effect just as though no sale had been made hereunder. It is further agreed

that several sales may be made hereunder without exhausting the right of sale

for any unmatured portion of the Indebtedness, it being the purpose hereof to

provide for foreclosure and sale of the security for any matured portion of the

Indebtedness without exhausting the power to foreclose and sell the Mortgaged

Property for any subsequently maturing portion of the Indebtedness.

 

7.9.                              Other.

Mortgagee may exercise any and all other rights, remedies and recourses granted

under the Loan Documents or now or hereafter existing in equity, at law, by virtue

of statute or otherwise.

 

7.10.                        Remedies

Cumulative, Concurrent and Nonexclusive. Mortgagee and Mortgagee shall have

all rights, remedies and recourses granted in the Loan Documents and available

at law or equity (including specifically those granted by the Uniform

Commercial Code in effect and applicable to the Mortgaged Property or any

portion thereof) and same (a) shall be cumulative and concurrent; (b) may be

pursued separately, successively or concurrently against Mortgagor and/or

others obligated under the Note, or against the Mortgaged Property, or against

any one or more of them at the sole discretion of Mortgagee; (c) may be

exercised as often as occasion therefor shall arise, it being agreed by

Mortgagor that the exercise or failure to exercise any of the same shall in no

event be construed as a waiver or release thereof or of any other right, remedy

or recourse; and (d) are intended to be, and shall be, nonexclusive.

 

7.11.                        No

Conditions Precedent to Exercise of Remedies. Neither Mortgagor nor any

other person now or hereafter obligated for payment of all or any part of the

Indebtedness or fulfillment of all or any of the Obligations shall be relieved

of such obligation by reason of(a) the failure of the Mortgagee or any other

person or entity to comply with any request of Mortgagor or any other person so

obligated to foreclosure the lien of this Mortgage or to enforce any provisions

of the other Loan 

 

24

 

Documents; (b) the release, regardless of consideration, of the

Mortgaged Property or any portion thereof or the addition of any other property

to the Mortgaged Property; (c) any agreement or stipulation between any

subsequent owner of the Mortgaged Property and Mortgagee extending, renewing, rearranging,

or in any other way modifying the terms of the Loan Documents without first

having obtained the consent of; given notice to or paid any consideration to

Mortgagor or such other person, and in such event, Mortgagor and all such other

persons shall continue to be liable to make payment according to the terms of

any such extension or modification agreement unless expressly released and

discharged in writing by Mortgagee (notwithstanding anything contained herein

to the contrary, Mortgagee is under no obligation to give notice to or pay any

consideration to Mortgagor or any other such person for any modifications,

extensions, renewals or rearrangements of the Loan Documents); or (d) by any

other act save and except the complete payment of the Indebtedness and the

complete fulfillment of all of the Obligations.

 

7.12.                        Release

of and Resort to Collateral. Any part of the Mortgaged Property may be

released by Mortgagee without affecting, subordinating or releasing the lien,

security interest and assignment hereof against the remainder. The lien,

security interest and other rights granted hereby shall not affect or be

affected by any other security taken for the same indebtedness or any part

thereof. The taking of additional security, or the rearrangement, extension or

renewal of the Indebtedness, or any part thereof, shall not release or impair

the lien, security interest and other rights granted hereby or affect the

liability of Mortgagor or of any endorser, guarantor or surety, or improve the

right of any permitted junior lienholder; and this Mortgage, as well as any

instrument given to secure any rearrangement, renewal or extension of the

Indebtedness secured hereby, or any part thereof; shall be and remain a first

and prior lien on all of the Mortgaged Property not expressly released until

the Indebtedness is completely paid. For payment of the Indebtedness, Mortgagee

may resort to any other security therefor held by Mortgagee, in such order and

manner as Mortgagee may elect.

 

7.13.                        Waiver

of Redemption. Notice and Marshalling of Assets. To the fullest extent

permitted by law, Mortgagor hereby irrevocably and unconditionally waives and

releases (a) all benefits that might accrue to Mortgagor by any present or

future laws exempting the Mortgaged Property from attachment, levy or sale on

execution or providing for any appraisement, valuation, stay of execution,

exemption from civil process, redemption or extension of time for payment; (b)

all notices of any Event of Default (except as may be specifically provided for

under the terms of the Loan Documents), presentment, demand, notice of intent

to accelerate, notice of acceleration and any other notice of Mortgagee’s or

Mortgagee’s election to exercise or the actual exercise of any right, remedy or

recourse provided for under the Loan Documents; (c) any right to appraisal or

marshalling of assets or a sale in inverse order of alienation; (d) the

exemption of homestead; and (e) the administration of estates of decedents, or

other matter to defeat, reduce or affect the right of Mortgagee under the terms

of this Mortgage to sell the Mortgaged Property for the collection of the

Indebtedness secured hereby (without any prior or different resort for

collection) or the right of Mortgagee, under the terms of this Mortgage, to the

payment of the Indebtedness out of the proceeds of sale of the Mortgaged

Property in preference to every other person and claimant whatever (only

reasonable expenses of such sale being first deducted). The Mortgagor hereby

covenants and agrees that it will not at any time insist upon or plead, or in

any manner whatever claim or take any advantage of; any stay, exemption or

extension law or any so-called “Moratorium Law” now or at any time hereafter in

force, nor claim, take or insist upon any benefit or advantage of or from any

law now or hereafter in force providing for the valuation or appraisement of

the Mortgaged Property, or any part thereof; prior to any sale or sales thereof

to be made pursuant to any provisions herein 

 

25

 

contained, or to decree, judgment or order of any court of competent

jurisdiction; or after such sale or sales claim or exercise any rights under

any statute now or hereafter in force to redeems the property so sold, or any

part thereof; or relating to the marshaling thereof, upon foreclosure sale or

other enforcement hereof. THE MORTGAGOR HEREBY EXPRESSLY WAIVES ANY AND ALL

RIGHTS OF REDEMPTION FROM SALE UNDER ANY ORDER OR DECREE OF FORECLOSURE OF THIS

MORTGAGE, ON ITS OWN BEHALF AND ON BEHALF OF ALL OTHER PERSONS CLAIMING OR

HAVING AN INTEREST (DIRECT OR INDIRECT) BY, THROUGH OR UNDER MORTGAGOR, AND ON

BEHALF OF EACH AND EVERY PERSON ACQUIRING ANY INTEREST IN OR TITLE TO THE

PREMISES SUBSEQUENT TO THE DATE HEREOF, IT BEING THE INTENT HEREOF THAT ANY AND

ALL SUCH RIGHTS OF REDEMPTION OF THE MORTGAGOR AND OF ALL OTHER PERSONS ARE AND

SHALL BE DEEMED TO BE HEREBY WAIVED TO THE FULL EXTENT PERMITTED BY THE

PROVISIONS OF CHAPTER 735, SECTION 5/15-1601 OF THE ILLINOIS COMPILED STATUTES

OR OTHER APPLICABLE LAW OR REPLACEMENT STATUTES. The Mortgagor will not invoke

or utilize any such law or laws or otherwise hinder, delay or impede the

execution of any right, power or remedy herein or otherwise granted or

delegated to the Mortgagee, but will suffer and permit the execution of every

such right, power and remedy as though no such law or laws had been made or

enacted.

 

7.14.                        Discontinuance

of Proceedings. In case Mortgagee shall have proceeded to invoke any right,

remedy or recourse permitted under the Loan Documents and shall thereafter

elect to discontinue or abandon the same for any reason, Mortgagee shall have

the unqualified right so to do and, in such event, Mortgagor and Mortgagee

shall be restored to their former positions with respect to the Indebtedness,

the Obligations, the Loan Documents, the Mortgaged Property and otherwise, and

the rights, remedies, recourses and power of Mortgagee shall continue as if the

same had never been invoked.

 

7.15.                        Form

and Substance. All documents, certificates, insurance policies, and other

items required under this Mortgage to be executed and/or delivered to Mortgagee

shall be in form and substance satisfactory to Mortgagee.

 

7.16.                        Application

of Proceeds: Deficiency Obligation. The proceeds of any sale of; and the

Rents and other income generated by the holding, leasing, operating or other

use of the Mortgaged Property shall be applied by Mortgagee (or the receiver,

if one is appointed) to the extent that funds are so available therefrom in the

following orders of priority: (a) first, to the payment of the costs and

expenses of taking possession of the Mortgaged Property and of holding, using,

leasing, maintaining, repairing, improving and selling the same, including,

without limitation, (i) costs of advertisement; (ii) reasonable attorneys’ and

accountants’ fees; and (iii) court costs, if any; (b) second, to the payment of

all amounts, other than the principal amount and accrued but unpaid interest on

the Note which may be due to Mortgagee under the Loan Documents, including all

Indebtedness and Obligations, together with interest thereon as provided

therein, in such order and manner as Mortgagee may determine; (c) third, to the

payment of all accrued but unpaid interest due on the Note in such order and

manner as Mortgagee may determine; (d) fourth, to the payment of the principal

amount outstanding on the Note in such order and manner as Mortgagee may

determine and all other Indebtedness and Obligations; and (e) fifth, to

Mortgagor or as otherwise required by law or agreement. Subject to the

foregoing, the proceeds of any sale of; and the Rents and other income

generated by the holding, leasing, operating or other use of the Mortgaged

Property, shall be applied by Mortgagee (or the receiver, if one is appointed)

to the extent that funds are so available therefrom: 

 

26

 

(1) first, to reduce that

portion of the Indebtedness then remaining unpaid for which Mortgagor is not

personally liable and (2) second, to reduce that portion of the Indebtedness

then remaining unpaid for which Mortgagor is personally liable. Mortgagor and

any other party liable on the Indebtedness and the Obligations shall be liable

for any deficiency remaining in the Indebtedness and Obligations subsequent to

the sale referenced in this Paragraph 7.16.

 

7.17.                        Purchase

by Mortgagee. To the extent not expressly prohibited by applicable law,

Mortgagee shall have the right to become the purchaser at any sale of the

Mortgaged Property hereunder and shall have the right to be credited on the

amount of its bid therefor all (or such portion as is necessary to satisfy such

bid) of the Indebtedness and Obligations due and owing as of the date of such

sale.

 

7.18.                        Prepayment.

The principal balance of the Note may not be prepaid.

 

7.19.                        Disaffirmation

of Contracts. The purchaser at any foreclosure sale hereunder may disaffirm

any easement granted, or rental, lease or other contract made in violation of

any provisions of this Mortgage and may take immediate possession of the

Mortgaged Property free from, and despite the terms of, any such grant of

easement, rental, lease or other contract.

 

7.20.                        Acceleration

Following Certain Events. Notwithstanding anything to the contrary

contained herein or inferable from any provision hereof, upon the occurrence of

an Event of Default as described in Paragraph 6.5 or Paragraph 6.6 herein

above, the Indebtedness, including without limitation the unpaid accrued

interest under the Note and any other accrued but unpaid portion of the

Indebtedness, shall be automatically and immediately due and payable in full

without the necessity of any action on the part of Mortgagee or Mortgagee.

 

7.21                           Jury

Waiver. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF MORTGAGOR AND MORTGAGEE

HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE OF

ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS

MORTGAGE, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE

DEALINGS OF MORTGAGOR AND MORTGAGEE WITH RESPECT TO THIS MORTGAGE, OR THE

TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER

ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH

OF MORTGAGOR AND MORTGAGEE HEREBY AGREES THAT ANY SUCH ACTION, CAUSE OF ACTION,

CLAIM, DEMAND OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY

AND THAT MORTGAGOR OR MORTGAGEE MAY FILE A COPY OF THIS MORTGAGE WITH ANY

COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF EACH OF MORTGAGOR

AND MORTGAGEE TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

 

ARTICLE VIII

 

CONDEMNATION

 

8.1.                              Application

of Proceeds. If the Mortgaged Property, or any part thereof, shall be 

 

27

 

condemned or otherwise taken for public or

quasi-public use under the power of eminent domain, or be transferred in lieu

thereof, all damages or other amounts awarded for the taking of, or injury to,

the Mortgaged Property shall be paid to Mortgagee who shall have the right, in

its sole and absolute discretion, to apply the amounts so received against (a)

the reasonable costs and expenses of Mortgagee, including reasonable attorneys’

fees incurred in connection with collection of such amounts and (b) the balance

against the Indebtedness and Obligations; provided, however, that if (i) no

Event of Default shall have occurred and be continuing hereunder, (ii)

Mortgagor provides evidence satisfactory to Mortgagee of its ability to pay all

amounts becoming due under the Note during the pendency of any restoration or

repairs to or replacement of the Mortgaged Property and (iii) Mortgagee

determines, in its sole discretion, that the proceeds of such award are

sufficient to restore, repair, replace and rebuild the Mortgaged Property as

nearly as possible to its value, condition and character immediately prior to

such taking, or, if the proceeds of such award are insufficient for such

purpose, if Mortgagor provides additional sums to Mortgagee’s satisfaction so that

the aggregate of such sums and the proceeds of such award will be sufficient

for such purpose, the proceeds of such award, together with additional sums

provided by Mortgagor, shall be placed in a separate account for the benefit of

Mortgagee and Mortgagor to be used to restore, repair, replace and rebuild the

Mortgaged Property as nearly as possible to its value, condition and character

immediately prior to such taking. All work to be performed in connection

therewith shall be pursuant to a written contract therefor, which contract

shall be subject to the prior written consent of Mortgagee. To the extent that

any funds remain after the Mortgaged Property has been so restored and

repaired, the same shall be applied against the Indebtedness in such order as

Mortgagee may elect. To enforce its rights hereunder, Mortgagee shall be

entitled to participate in and control any condemnation proceedings and to be

represented therein by counsel of its own choice, and Mortgagor will deliver,

or cause to be delivered, to Mortgagee such instruments as may be requested by

it from time to time to permit such participation. The foregoing is subject to

the provisions of the Prior Indebtedness Documents, to the extent they are

applicable.

 

28

 

ARTICLE IX

 

SECURITY

AGREEMENT

 

9.1.                              Security

Interest. This Mortgage shall be construed as a Mortgage on real property,

and it shall also constitute and serve as a security agreement on personal

property within the meaning of, and shall constitute until the grant of this

Mortgage shall terminate as provided in Article II hereof a pledge, assignment

and a security interest, subject only to the applicable Permitted Encumbrances,

including the applicable security interests created by the Prior Indebtedness

Documents, under the Illinois Uniform Commercial Code with respect to the

Personalty, Fixtures, Leases and Rents. Mortgagor has granted, bargained,

conveyed, assigned, transferred and set over, and by these presents does grant,

bargain, convey, assign, transfer and set over unto Mortgagee a security

interest in and to all of Mortgagor’s right, title and interest in,

to and under the Personalty, Fixtures, Leases and Rents, subject only to the

applicable Permitted Encumbrance, including the applicable security interests

created by the Prior Indebtedness Documents, to secure the full and timely

payment of the Indebtedness and the full and timely performance and discharge

of the Obligations. Upon the occurrence of and during the existence of an Event

of Default, Mortgagor shall gather all of the Mortgaged Property which is

Personalty at a location designated by Mortgagee for sale pursuant to the terms

hereof. Within ten (10) days following Mortgagor’s receipt of a written request

from Mortgagee, Mortgagor shall prepare and deliver to Mortgagee a written

inventory specifically listing all of the Personalty and Fixtures, which

inventory shall be certified by an authorized partner of Mortgagor as being

true, correct and complete.

 

9.2.                              Financing

Statements. Mortgagor shall execute and deliver to Mortgagee, in form and

substance satisfactory to Mortgagee, such financing statements and such further

assurances as Mortgagee may, from time to time, consider reasonably necessary

to create, perfect and preserve Mortgagee’s security interest herein granted,

and Mortgagee may cause such statements and assurances to be recorded and filed

at such times and places as may be required or permitted by law to so create,

perfect and preserve such security interest. Pursuant to the Illinois Uniform

Commercial Code, this Mortgage shall be effective as a Financing Statement

filed as a fixture filing from the date of its filing for record covering the

Fixtures and Personalty. The address of Mortgagor, as Debtor, and Mortgagee, as

Secured Party, are as set forth herein. The above described goods are or are to

become fixtures related to the Land and Improvements of which Mortgagor is the

record title owner.

 

9.3.                              Uniform

Commercial Code Remedies. Mortgagee shall have all the rights, remedies and

recourses with respect to the Personalty, Fixtures, Leases and Rents afforded a

secured party by the aforesaid Illinois Uniform Commercial Code in addition to,

and not in limitation of the other rights, remedies and recourses afforded by

the Loan Documents and at law.

 

9.4.                              No

Obligation of Mortgagee. The assignment and security interest herein

granted shall not be deemed to cause Mortgagee to be a Mortgagee in possession

of the Mortgaged Property, to obligate Mortgagee to operate the Mortgaged

Property or attempt to do the same, or take any action, incur expenses or

perform or discharge any obligation, duty or liability whatsoever under any of

the Leases or otherwise.

 

9.5.                               Remedies.

If an Event of Default shall exist, Mortgagee may elect, in addition to

exercising any and all other rights, remedies and recourses set forth in

Article 7 or referred to in 

 

29

 

Paragraph 9.3 herein above, to collect and receive all

of the Rents and to proceed in the manner set forth in Section 9.501(d)  of

Chapter 9 of the Illinois Uniform Commercial Code relating to the procedure to

be followed when a security agreement covers both real and personal property.

Except as otherwise set forth in this Paragraph 9.5, at any foreclosure sale as

described in Paragraph 7.4 herein above, it shall be deemed that the Mortgagee

proceeded under such Section 9.501(d)  and that such sale passed title to all of

the Mortgaged Property and other property described herein to the purchaser

thereat, including without limitation, the Personalty, Leases and Rents.

Mortgagee, acting itself or by and through any representative, may elect either

prior to or at such sale not to proceed under such Section 9.501(d) by

notifying Mortgagor of the manner in which Mortgagee intends to proceed with

regard to the Personalty, Leases and Rents.

 

ARTICLE X

 

ASSIGNMENT OF RENTS AND

LEASES

 

10.1.                        Assignment

of Rents Profits. etc. All of the Rents are hereby absolutely and

unconditionally assigned to Mortgagee, to be applied by Mortgagee in payment of

the Indebtedness. Notwithstanding any provision of this Mortgage or any other

Loan Document which might be construed to the contrary, the assignment in this

Paragraph 10.1 is an absolute assignment and not merely a security interest.

However, Mortgagee’s rights as to the assignment shall be exercised only upon

the occurrence and during the continuance of an Event of Default. Prior to the

occurrence of an Event of Default, Mortgagor shall have a license to collect

and receive all Rents as Mortgagee for the benefit of Mortgagee and Mortgagor,

and Mortgagor shall apply the funds so collected first to the payment of the

Indebtedness then due and thereafter to the account of Mortgagor.

Notwithstanding anything contained herein to the contrary, no part of the

Property will be leased without the prior written consent of the Mortgagee,

which consent may be granted or withheld in the sole discretion of the

Mortgagee. This assignment is subject to the rights created by the Prior

Indebtedness Documents in regard to the Rents and Leases.

 

10.2                           Assignment

of Leases. Mortgagor hereby assigns the Leases to Mortgagee. Mortgagor

hereby further assigns to Mortgagee all guaranties of tenants’ performance

under the Leases.

 

10.3.                        Warranties

Concerning Leases and Rents. Mortgagor represents and warrants to Mortgagee

that:

 

(a)                                  no

Leases currently exist, except any listed in Exhibit “D” attached

hereto;

 

(b)                                 no

Rents have been previously assigned, mortgaged or pledged except pursuant to

the Prior Indebtedness Documents;

 

(c)                                  no

Rents have been or will be anticipated, waived, released, discounted, set off

or compromised; and

 

(d)                                 Mortgagor

has not received any funds or deposits from any tenant for advance rentals

(other than the rentals payable for the month in which this Mortgage is

executed and the next following month).

 

30

 

10.4.                        Mortgagor’s Covenants of

Performance. Mortgagor covenants to:

 

(a)                                  duly

and punctually perform all of its material obligations under the Leases and

give prompt notice to Mortgagee of any failure to do so;

 

(b)                                 give

immediate notice to Mortgagee of any notice Mortgagor receives from any tenant

or subtenant under any Lease, specifying any claimed default by any party under

such Lease;

 

(c)                                  not

enter into any Lease and not voluntarily terminate or cancel any Lease or

waive, modify or amend any material provision of any Lease without the prior

written consent of Mortgagee;

 

(d)                                 enforce

the tenants’ obligations under the Leases except in the exercise of reasonable

management discretion in the ordinary course of business;

 

(e)                                  defend,

at Mortgagor’s expense, any proceeding pertaining to the Leases, including, if

Mortgagee so requests, any such proceeding to which Mortgagee is a party; and

 

(f)                                    except

as currently effected pursuant to the Prior Indebtedness Documents, neither

create nor permit any encumbrance upon its interest as lessor under the Leases

nor further assign, pledge or encumber the Rents.

 

10.5.                        Prior Approval for Actions

Affecting Leases. Mortgagor shall not, without the prior written consent of

Mortgagee:

 

(a)                                  enter

into any new lease agreement covering all or any portion of the Mortgaged

Property without Mortgagee’s prior written consent, which may be granted or

 

withheld at the

sole discretion of Mortgagee;

 

(b)                                 receive

or collect Rents more than one month in advance;

 

(c)                                  waive

or release any obligation of any tenant under the Leases except in the exercise

of reasonable management discretion in the ordinary course of business;

 

(d)                                 cancel,

terminate or modify any of the Leases, cause or permit any cancellation,

termination or surrender of any of the Leases, or commence any proceedings for

dispossession of any tenant under any of the Leases, except upon default by the

tenant thereunder or in the exercise of reasonable management discretion in the

ordinary course of business;

 

(e)                                  renew

or extend any of the Leases, except pursuant to terms set forth in existing

Leases; or

 

(f)                                    permit

any assignment of the Leases by tenants.

 

10.6.                         Mortgagee

in Possession. Mortgagee’s acceptance of this assignment shall not, prior

to entry upon and taking possession of the Mortgaged Property by Mortgagee, be

deemed to 

 

31

 

constitute

Mortgagee a “mortgagee in possession”, nor obligate Mortgagee to appear in or

defend any proceeding relating to any of the Leases or to the Mortgaged

Property, to take any action hereunder, expend any money, incur any expenses,

or perform any obligation or liability under the Leases, or assume any

obligation for any deposits delivered to Mortgagor by any lessee and not

delivered to Mortgagee. Mortgagee shall not be liable for any injury or damage

to person or property in or about the Mortgaged Property, except such damage or

injury caused solely by Mortgagee’s gross negligence or willful misconduct.

 

10.7.                         Appointment

of Attorney. Mortgagor hereby appoints Mortgagee its attorney-in-fact,

coupled with an interest, empowering Mortgagee to subordinate any Leases to

this Mortgage to the extent permissible under the Leases.

 

10.8.                         Indemnification.

Mortgagor hereby indemnifies and holds Mortgagee harmless from all costs,

damages, expenses, liabilities and losses incurred by Mortgagee arising from or

in connection with any claims under the Leases, including, without limitation,

claims by tenants for security deposits or for rental payments more than one

(~) month in advance and not delivered to Mortgagee, except to the extent

caused solely by the gross negligence or willful misconduct of Mortgagee. All

amounts indemnified against hereunder, including reasonable attorneys’ fees, if

paid by Mortgagee shall bear interest at the Default Rate, as defined in the

Note, and shall be payable by Mortgagor immediately upon demand and shall be

secured hereby.

 

10.9.                         Records.

Upon request by Mortgagee, Mortgagor shall deliver to Mortgagee executed

originals of all Leases and copies of all records relating thereto.

 

10.10.                  Merger.

There shall be no merger of the leasehold estates, created by the Leases, with

the fee estate of the Land without the prior written consent of Mortgagee.

 

10.11.                  Right to Rely.

Mortgagor hereby authorizes and directs the tenants under the Leases to pay

Rents to Mortgagee upon written demand by Mortgagee to Mortgagor, without

further consent of Mortgagor, and the tenants may rely upon any written

statement delivered by Mortgagee to the tenants. Any such payment to Mortgagee

shall constitute payment to Mortgagor under the Leases.

 

ARTICLE XI

 

INTENTIONALLY

DELETED

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1.                         Survival

of Obligations. Each and all of the Obligations shall survive the execution

and delivery of the Loan Documents and the consummation of the loan called for

therein and shall continue in full force and effect until the Indebtedness

shall have been paid in full.

 

12.2.                         Recording

and Filing. Mortgagor will cause the Loan Documents and all amendments and

supplements thereto and substitutions therefor to be recorded, filed,

re-recorded and refiled in 

 

32

 

such

manner and in such places as Mortgagee shall reasonably request and will pay

all such recording, filing, re-recording and refiling taxes, fees and other

charges.

 

12.3.                        Notices.

All notices or other communications required or permitted to be given pursuant

to this Mortgage shall be in writing and shall be given and considered as

properly given and received if given as provided below; provided, however, that

notice regarding any proposed foreclosure sale shall be given pursuant to

applicable Legal Requirements, if different from the provisions below. Notice

given pursuant to the Loan Documents shall be effective on the earlier to occur

of (a) receipt by the addressee or (b) (i) two (2) business days following the

deposit thereof in a post office or other official depository under the regular

care and custody of the United States Postal Service, with postage prep aid and

properly addressed, if sent by registered or certified United States mail, or

(ii) the business day following the day such notice, properly addressed and

with delivery charges prep aid, is deposited with a nationally recognized

overnight delivery service with delivery instructions for next day delivery.

For purposes of notice, the addresses of the parties shall be as set forth in

the opening recital herein; provided, however, that Mortgagor and Mortgagee

shall have the right to change their address for notice hereunder to any other

location within the continental United States by the giving of 30 days’ notice

to the other party in the manner set forth hereinabove. A copy of any notice to

Mortgagor of an Event of Default or event or condition which may mature into an

Event of Default, shall be sent to Robert J. Rudnik, Esq., The Prime Group,

Inc., 77 West Wacker Drive, Suite 4200, Chicago, Illinois 60601 and to David

Grossberg, Esq., Schiff, Hardin & Waite, 6600 Sears Tower, Chicago,

Illinois 60606-6473.

 

12.4.                         Real

Estate Taxes: Impositions. If required by Mortgagee, by giving Mortgagor at

least thirty (30) days prior written notice, or if an Event of Default shall be

in existence, Mortgagor shall pay to Mortgagee, in advance, on the first day of

each calendar month during the term of the Note, an amount equal to one-twelfth

of the annual real estate taxes relating to the Mortgaged Property estimated by

Mortgagee to be due for each calendar year during the term of the Note.

Thereafter, Mortgagor, at Mortgagee’s request, shall also pay to Mortgagee, in

advance, on the first day of each calendar month commencing with the calendar

month immediately following the month in which Mortgagee’s request is made the

Escrowed Funds in an amount equal to the sum of one-twelfth of the annual

Impositions (estimated wherever necessary) to become due with respect to the

Mortgaged Property for the year during which such payment is so requested;

provided, however, that Mortgagee shall have the right to increase the amount

of monthly payments of the Impositions if such increase is necessary to provide

for the full payment of the Impositions when due and payable. In addition, if

Mortgagee determines that any amounts theretofore paid by Mortgagor are

insufficient for the payment in full of the Impositions when due and payable,

Mortgagee shall notify Mortgagor of the increased amounts required to provide a

sufficient fund for the payment thereof when due and payable, whereupon

Mortgagor shall pay to Mortgagee within 10 business days thereafter the

additional amount so stated in Mortgagee’s notice. Upon any assignment of this

Mortgage, Mortgagee shall have the right to pay over the balance of the

Escrowed Funds then in its possession to its assignee, whereupon the Mortgagee

shall then become completely released from all liability with respect thereto.

Upon payment of the Indebtedness and performance of the Obligations, or at such

earlier time as Mortgagee may elect, the balance of the Escrowed Funds in its

possession may be paid over to Mortgagor, and no other party shall have any

right or claim thereto. Upon the occurrence and during the continuance of an

Event of Default, Mortgagee shall have the right to apply the Escrowed Funds to

the payment of the Indebtedness without notice to Mortgagor, and Mortgagee

shall thereafter have the right to require Mortgagor, within 10 business days

after Mortgagor’s receipt of demand therefor from Mortgagee, to deposit with

Mortgagee the amount of 

 

33

 

the

Escrowed Funds so applied. The Escrowed Funds may, at the option of Mortgagee,

be repaid to Mortgagor in sufficient time to allow Mortgagor to satisfy

Mortgagor’s obligations under the Loan Documents to pay the Impositions or may

be paid by Mortgagee directly to the person or entities entitled thereto.

Notwithstanding anything to the contrary contained in this Paragraph 12.4 or

elsewhere in this Mortgage, Mortgagee hereby reserves the right to waive the

payment by Mortgagor to Mortgagee of the Escrowed Funds and, in the event

Mortgagee does so waive such payment, it shall be without prejudice to Mortgagee’s

right to insist, at any subsequent time or times, that such payments be made in

accordance herewith provided an Event of Default has occurred and is

continuing.

 

12.5.                         No

Waiver. Any failure by Mortgagee to insist, or any election by Mortgagee not

to insist, upon strict performance by Mortgagor of any of the terms, provisions

or conditions of the Loan Documents shall not be deemed to be a waiver of the

same or of any other term, provision or condition thereof, and Mortgagee shall

have the right at any time, from time to time thereafter, to insist upon strict

performance by Mortgagor of any and all of such terms, provisions and

conditions.

 

12.6.                         Mortgagee’s

Right to Pay Indebtedness and Perform Obligations. If Mortgagor or any

other party shall fail, refuse or neglect to make any required payment of the

Indebtedness or perform any of the Obligations required by the Loan Documents,

then at any time thereafter and without notice or demand upon Mortgagor or any

other party, and without waiving or releasing any other right, remedy or

recourse Mortgagee may have because of the same, Mortgagee may (but shall not

be obligated to) make such payment or perform such act for the account of and

at the expense of Mortgagor and shall have the right to enter upon the

Mortgaged Property for such purpose and to take all such action thereon with

respect to the Mortgaged Property as it may deem necessary or appropriate.

Mortgagor shall be obligated to repay Mortgagee for all sums advanced by it

pursuant to this Paragraph 12.6 and shall indemnify and hold Mortgagee harmless

from and against any and all loss, cost, expense, liability, damage, claim and

cause of action, including reasonable attorneys fees, incurred or accruing by

any acts performed by Mortgagee pursuant to the provisions of this Paragraph

12.6 or by reason of any other provision of the Loan Documents, except to the

extent caused solely by the gross negligence or willful misconduct of

Mortgagee. All sums paid by Mortgagee pursuant to this Paragraph 12.6 and all

other sums extended by Mortgagee to which it shall be entitled to be

indemnified, together with interest thereon at the Default Rate of interest set

forth in the Note from the date of such payment or expenditure shall constitute

additions to the Indebtedness and Obligations, shall be secured by the Loan

Documents and shall be paid by Mortgagor to Mortgagee upon demand.

 

12.7.                         Covenants

Running with the Land. All obligations contained in the Loan Documents are

intended by the parties to be and shall be construed as covenants running with

the Mortgaged Property. All of the representations, warranties, covenants and

agreements of Mortgagor set forth herein (including, without limitation, all of

the agreements by Mortgagor to indemnify Mortgagee) shall survive the execution

and delivery of this Mortgage, any foreclosure of the lien of this Mortgage and

any other acquisition of title to the Mortgaged Property by Mortgagee.

 

12.8                           Successors

and Assigns. This Mortgage is for the sole benefit of Mortgagee, its successors

and assigns, and Mortgagor, its permitted successors and assigns, and is not

for the benefit of any third party. All of the terms of the Loan Documents

shall apply to, be binding upon and inure to the benefit of the parties

thereto, their respective successors, assigns, heirs and legal representatives

and all other persons claiming by, through or under them.

 

34

 

12.9.                        Severability.

The Loan Documents are intended to be performed in accordance with, and only to

the extent permitted by, all applicable Legal Requirements. If any provision of

any of the Loan Documents or the application thereof to any person or

circumstance shall, for any reason and to any extent, be invalid or

unenforceable, neither the remainder of the instrument in which such provision

is contained nor the application of such provision to other persons or

circumstances or other instruments referred to hereinabove shall be affected

thereby, but rather, the same shall be enforced to the greatest extent

permitted by law.

 

12.10.                  Controlling

Agreement. All agreements between Mortgagor and Mortgagee, whether now

existing or hereafter arising and whether written or oral, are hereby limited

so that in no contingency, whether by reason of demand or acceleration of the

maturity of the Note or otherwise, shall the interest contracted for, charged,

received, paid or agreed to be paid to Mortgagee exceed the maximum amount

permissible under applicable law. If, from any circumstance whatsoever, interest

would otherwise be payable to Mortgagee in excess of the maximum lawful amount,

the interest payable to Mortgagee shall be reduced to the maximum amount

permitted under applicable law; and if from any circumstance Mortgagee shall

ever receive anything of value deemed interest by applicable law in excess of

the maximum lawful amount, an amount equal to any excessive interest shall be

applied to the reduction of the principal of the Indebtedness and not to the

payment of interest, or if such excessive interest exceeds the unpaid balance

of principal of the Indebtedness, such excess shall be refunded to Mortgagor.

All interest paid or agreed to be paid to Mortgagee shall, to the extent

permitted by applicable law, be amortized, prorated, allocated and spread

throughout the full period until payment in full of the principal so that the

interest on the Indebtedness for such full period shall not exceed the maximum

amount permitted by applicable law. Mortgagee hereby expressly disclaims any

intent to contract for, charge or receive interest in an amount which exceeds

the maximum amount of interest permitted by applicable law. This Paragraph

shall control all agreements between Mortgagor and Mortgagee.

 

12.11.                   Entire

Agreement and Modification. The Loan Documents contain the entire

agreements between the parties relating to the subject matter hereof and

thereof, and all prior agreements relative thereto which are not contained

herein or therein are terminated. The Loan Documents may be amended, revised,

waived, discharged, released or terminated only by a written instrument or

instruments executed by the party against which enforcement of the amendment,

revision, waiver, discharge, release or termination is asserted. Any alleged

amendment, revision, waiver, discharge, release or termination which is not so

documented shall not be effective as to any party.

 

12.12.                   Counterparts.

This Mortgage may be executed in any number of counterparts, each of which

shall be an original, but all of which together shall constitute but one

instrument.

 

12.13.                   Applicable

Law and Uniform Commercial Code. The Loan Documents shall be governed by

and construed according to the laws of the State of Texas and the laws of the

United States applicable to transactions in the State of Texas, provided,

however, that this Mortgage, to the extent it applies to property located in

the State of lllinois, shall be governed by the laws of the State of Illinois

and the laws of the United States applicable to transactions in the State of

Illinois.

 

12.14.                  Headings and

General Application. The article, paragraph and subparagraph entitlements

hereof are inserted for convenience of reference only and shall in no way

affect, modify 

 

35

 

or define, or be used in construing, the text of such article,

paragraph or subparagraph. If the text requires, words used in the singular

shall be read as including the plural, and pronouns of any gender shall include

all genders.

 

12.15.                  Sole Benefit.

This instrument and the other Loan Documents have been executed for the sole

benefit of Mortgagor and Mortgagee and the heirs, successors, assigns and legal

representatives of Mortgagee. No other party shall have rights thereunder nor

be entitled to assume that the parties thereto will insist upon strict

performance of their mutual obligations hereunder, any of which may be waived

from time to time. Mortgagor shall have no right to assign to any person or

entity whatsoever, any of its rights under the Loan Documents, including, without

limitation, the right to receive advances under the Note or otherwise.

 

12.16.                  Subrogation.

If any or all of the proceeds of the Indebtedness or the Obligations have been

used to extinguish, extend or renew any indebtedness heretofore existing against

the Mortgaged Property or to satisfy any indebtedness or obligation secured by

a lien or encumbrance of any kind (including liens securing the payment of any

Impositions), such proceeds have been advanced by Mortgagee at Mortgagor’s

request, and, to the extent of such funds so used, the Indebtedness and

Obligations in this Mortgage shall be subrogated to and extend to all of the

rights, claims, liens, titles and interests heretofore existing against the

Mortgaged Property to secure the indebtedness or obligation so extinguished,

paid, extended or renewed, and the former rights, claims, liens, titles and

interests, if any, shall not be waived but rather shall be continued in full

force and effect and in favor of Mortgagee and shall be merged with the lien and

security interest created herein as cumulative security for the repayment of

the Indebtedness and satisfaction of the Obligations.

 

12.17.                  Business or

Commercial Purpose. Mortgagor warrants that the extension of credit

evidenced by the Note secured hereby is solely for business or commercial

purposes, other than agricultural purposes.

 

12.18.                  Jurisdiction

and Venue. Courts within the State of Texas shall have jurisdiction over

any and all disputes between Mortgagor and Mortgagee, whether at law or in equity,

and the proper venue for any such dispute shall be either the state or federal

courts located in Dallas County, Texas.; provided, however, as to matters

relating to portions of the Mortgaged Property located in the State of

Illinois, courts within the State of Illinois shall have jurisdiction and the

proper venue there for shall be the state or federal courts located in Kane

County, Illinois.

 

12.19.                  Performance

at Mortgagor’s Expense. The cost and expense of performing or complying

with any and all of the Obligations shall be borne solely by Mortgagor, and no

portion of such cost and expense shall be in any way or to any extent credited

against any installment on or portion of the Indebtedness.

 

12.20.                  No

Partnership. Nothing contained in the Loan Documents is intended to, or

shall be construed as, creating to any extent or in any manner whatsoever, any

partnership, joint venture or association between Mortgagor and Mortgagee, or

in any way make Mortgagee a co-principal with Mortgagor with reference to the

Mortgaged Property, and any inferences to the contrary are hereby expressly

negated.

 

12.21.                  Agents.

Any right, remedy, privilege, duty or action available to or to be performed by

Mortgagee under the Loan Documents, if and to the extent determined by Mortgagee,

may be 

 

36

 

exercised or performed by any agent, attorney, correspondent or other

representative of Mortgagee.

 

12.22.                  Credit

Reports. Mortgagor hereby authorizes Mortgagee to obtain from time to time

credit reports through reputable credit reporting agencies relating to

Mortgagor and any of the partners in Mortgagor.

 

12.23.                  Disposition

of Mortgaged Property. Leases. or Beneficial Interest in Mortgagor. Except

as otherwise expressly provided herein, upon the sale, exchange, assignment,

conveyance or other disposition (herein collectively called “Disposition”) of

all or any portion of the Mortgaged Property (or any interest therein), or of

all or any part of the beneficial ownership interest in Mortgagor, an Event of

Default shall be deemed to have occurred and Mortgagee may, at Mortgagee’s

option, enforce any and all of Mortgagee’s rights, remedies and recourses

available upon the occurrence of an Event of Default; provided, however,

Mortgagee shall not enforce such rights, remedies and recourses if Mortgagee

consents in writing to the Disposition in question. It is expressly agreed that

in connection with determining whether to grant or withhold such consent to

each such Disposition, Mortgagee may, inter  alia, (a) consider

(based upon Mortgagee’s then current criteria for approving borrowers for

mortgage loans similar to the Loan) the financial strength and experience of

the party to whom such Disposition will be made and its management ability with

respect to the Mortgaged Property, (b) consider whether or not the security for

payment of the Indebtedness and the performance of the Obligations, or

Mortgagee’s ability to enforce its rights, remedies and recourses with respect

to such security, will be impaired in any way by the proposed Disposition, (c)

require as a condition to granting such consent, an increase in the rate of

interest payable under the Note (subject to the provisions of Paragraph 12.10

hereof), (d) require that Mortgagee be reimbursed for all reasonable costs and

expenses incurred by Mortgagee in investigating the financial strength,

experience and management ability of the party to whom such Disposition will be

made and in determining whether Mortgagee’s security will be impaired by the

proposed Disposition, (e) require the payment to Mortgagee of a transfer fee to

cover the reasonable cost of documenting the Disposition in its records on the

date of closing of such Disposition (subject to the provisions of Paragraph

12.10 hereof), (f) require the payment of its reasonable attorney’s fees in

connection with such Disposition, (g) require the express assumption of payment

of the Indebtedness and performance of the Obligations by the party to whom

such Disposition will be made (with or without the release  of Mortgagor from liability for such

Indebtedness and Obligations), (h) require the execution of assumption

agreements, modification agreements, supplemental security documents and

financing statements satisfactory in form and substance to Mortgagee, (i)

require endorsements (to the extent available under applicable law) to any

existing mortgage title insurance policies insuring Mortgagee’s

liens and security interests covering the Mortgaged Property or new mortgage

title policies, (3) require additional security for the payment of the

Indebtedness and performance of the Obligations, and (k) shorten the stated

term of the Note or otherwise rearrange the payment terms of the Note.

 

12.24.                  Environmental

Matters.

 

(a)                                  Mortgagee

shall have the right, at any time so long as any part of the Note shall remain

unpaid, to inspect the Mortgaged Property or any part thereof during reasonable

hours and upon reasonable notice to Mortgagor to determine if any environmental

hazard is present or is threatening to be created which will impair the value

of the Mortgaged Property. Mortgagee may conduct any test or investigation, or

collect any samples of materials from on, about, or under the Mortgaged

Property reasonably necessary to determine whether such 

 

37

 

hazards might exist so

long as it uses reasonable efforts not to interfere with Mortgagor’s use of

Mortgaged Property.

 

(b)                                 So

long as any part of the Note remains unpaid, Mortgagor shall not knowingly allow

any activity to be conducted on the Mortgaged Property or any use to be made of

the Mortgaged Property which presents a high risk of environmental

contamination in violation of any Applicable Environmental Law, including but

not limited to:

 

(1)

Chemical manufacturing or storage;

 

(2) Operation of any hazardous waste handling or

recycling facility; and

 

(3) Underground storage of petroleum products.

 

12.25.                  Joint and

Several Liability. If Mortgagor consists of more than one party, the

Obligations and the obligation to repay the Indebtedness as contained herein

shall be the joint and several obligations of each of such parties.

 

12.26.                  Sole Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT

BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT

BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL

AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE

PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF.

 

12.27.                  Partial

Releases. If Mortgagee consents to the sale of any portion of the Mortgaged

Property, which consent may be granted or withheld at the sole discretion of

Mortgagee, the portion of the Mortgaged Property so sold will be released from

the lien of this Mortgage, at the expense of Mortgagor, upon a sale thereof

upon the following terms and conditions:

 

(a)                                     Mortgagor

shall be obligated to provide to Mortgagee substitute collateral acceptable to

Mortgagee in its sole discretion (such as, without limitation, a certificate(s)

of deposit issued by a bank or banks and on terms acceptable to Mortgagee which

would be pledged to Mortgagee (and as to which Mortgagee will be granted a

first priority and the only security interest) by documents as required by

Mortgagee) as security for the Indebtedness and Obligations, which substitute

collateral must have a value, as determined by Mortgagee in its sole

discretion, equal to one hundred percent (100%) of the net sales proceeds for

the portion of the Mortgaged Property being so sold, with such net sales

proceeds being equal to the gross sales price (as such gross sales price is

consented to by Mortgagee in its sole discretion) for such portion of the

Mortgaged Property so sold less only (i) reasonable and normal closing costs

paid to unrelated third parties, as reasonably consented to by Mortgagee, (ii)

bona fide real estate commissions paid to persons or entity not affiliated with

Mortgagor or any direct or indirect owner of an interest in Mortgagor, as

provided in the Amended and Restated Agreement and Assignment of Net Profits

Interest, of even date herewith, by and among Mortgagor, Mortgagee and certain

other parties, and (iii) the amount of the Prior Indebtedness secured by the

portion of the Mortgaged Property so sold which is required by the holder of

such Prior Indebtedness to be paid to such holder as a result of such sale; 

 

38

 

provided,

however, that Mortgagee will not require Mortgagor to so provide substitute

collateral to the extent all such substitute collateral then held by Mortgagee

has a value, as determined by Mortgagee, in excess of the then unpaid principal

balance of the Loan, all then accrued and unpaid interest thereon, all interest

thereafter to accrue thereon up to the maturity date of the Loan, as such

maturity date may be extended as provided in the Loan Agreement, plus an

additional amount as reasonably determined by Mortgagee to cover other costs

that may be or become due in regard to the Loan and interest that will accrue

subsequent to such maturity date, as it may be so extended, if the Loan is not

paid as it comes due.

 

12.28                     Business

Loan. It is understood and agreed that the Loan evidenced by the Note and

secured hereby is a business loan within the purview of Section 205/4 of

Chapter 815 of Illinois Complied Statutes (or any substitute, amended, or

replacement statutes) transacted solely for the purpose of carrying on or

acquiring the business of the Mortgagor or, if the Mortgagor is a trustee, for

the purpose of carrying on or acquiring the business of the beneficiaries of

the Mortgagor as contemplated by said Section.

 

12.29                     Maximum

Indebtedness Hereby Secured and Future Advances. In no event shall the

Indebtedness hereby secured exceed two times the stated principal amount of the

Note. This Mortgage secures the repayment of all advances that Mortgagee may

extend to Mortgagor under the Note, and secures not only existing indebtedness,

but also secures future advances, with interest thereon, whether such advances are

obligatory or to be made at the option of Mortgagee, to the same extent as if

such future advances were made on the date of the execution of this Mortgage,

and although there may be no indebtedness outstanding at the time any advance

is made.

 

EXECUTED by the undersigned on the date

acknowledged, to be effective as of the 27th day of October, 1999.

 

 

	

   

  	

  MORTGAGOR:

  
	

   

  	

   

  
	

   

  	

  HUNTLEY DEVELOPMENT LIMITED

  PARTNERSHIP, an Illinois limited partnership

  
	

   

  	

  By:

  	

  Huntley

  Development Company, its Managing General

  Partner

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  	

   

  
	

   

  	

  Name:

  	

  Robert J. Rudnik

  
	

   

  	

  Title:

  	

  Vice President

  
							

 

39

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