Common use of Collateral Terms Clause in Contracts

Collateral Terms. ○ The obligations of the Issuer under this Note, including repayment of principal and interest, shall be secured by a second-priority security interest (lien) in and to the Issuer’s interest in any real property acquired by the Issuer, directly or indirectly, with the proceeds from this Note (the “Collateral Property”). The security interest shall be established pursuant to, and limited to the terms of, a separate security agreement and any necessary public recordings or filings required under applicable law. ○ The Issuer shall be permitted, at its discretion, to obtain financing from one or more third-party lenders for the acquisition, development, or renovation of the Collateral Property, and to grant such lender(s) a first-priority security interest (first lien) on the Collateral Property. The Investor acknowledges and agrees that its security interest under this Note shall be subordinate in all respects—including right of payment, priority, and remedies—to the rights of such first-priority lender(s), and shall enter into any intercreditor or subordination agreement reasonably required by such lender(s) and by applicable law. ○ Notwithstanding the foregoing, at no time shall the total principal amount of indebtedness secured by the Collateral Property exceed sixty percent (60%) of the acquisition price of such property. ○ The Issuer shall have no obligation to grant a security interest or lien in any other assets of the Issuer or its affiliates, and the Investor acknowledges that its recourse is limited to the Collateral Property to the extent of its security interest, subject to any superior interests of first-lien lenders.