THIS INSTRUMENT WAS PREPARED BY
AND SHOULD BE RETURNED TO:
Xxxxxxx X. Xxxxx, Esquire
Lowndes, Drosdick, Doster, Xxxxxx & Xxxx, P.A.
000 Xxxxx Xxxx Xxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxxx, XX 00000-0000
(000) 000-0000
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT (hereinafter referred to as the
"Mortgage") is made and executed on August 12, 2002 by DSTS, LLC, a Florida
limited liability company, whose address is 0000 Xxxxxxx X0X, Xxxxx 000, Xxxx
Xxxxx, XX 00000 (hereinafter referred to as "Borrower") to and in favor of CNL
RETIREMENT PROPERTIES, INC., a Maryland corporation, whose address is CNL Center
at City Commons, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000 (hereinafter
referred to as the "Lender");
W I T N E S S E T H:
THAT WHEREAS, the Borrower is justly indebted to Lender in the principal
sum of ONE MILLION EIGHT HUNDRED SEVENTY THOUSAND AND NO/100 DOLLARS
($1,870,000.00), which indebtedness is evidenced and represented by a certain
Balloon Promissory Note (hereinafter referred to as the "Note") in that amount
executed and delivered by Borrower of even date herewith which is payable, with
interest, not later than December 31, 2006; and
WHEREAS, the Lender, as a condition precedent to the extension of credit or
the making of the loan evidenced by the Note, has required that the Borrower
provide Lender with security for the payment or repayment of the indebtedness
represent by the Note as well as for the performance, observance and discharge
by the Borrower of the various covenants, stipulations and agreements made by
the Borrower to, with, in favor and for the benefit of Lender with respect to
said indebtedness and such security;
NOW THEREFORE, in consideration of and in order to secure the payment or
repayment of the indebtedness evidenced and represented by the Note, together
with interest on such indebtedness, as well as the payment of all other sums of
money secured hereby, as hereinafter provided, and also to secure the
observance, performance and discharge by the Borrower of all covenants,
stipulations and agreements set forth in the Note, this Mortgage and in all
other documents and instruments executed and delivered by the Borrower to and in
favor of Lender for the purpose of further securing the payment or repayment of
the indebtedness evidenced and represented by the Note, and in order to charge
the properties, interests and rights hereinafter described with such payment,
observance, performance and discharge, and for other good and valuable
considerations, the receipt and sufficiency of which are hereby acknowledged,
the Borrower does hereby grant, bargain, sell, alien, remise, release, convey,
assign, transfer, pledge, deliver, set over, hypothecate, warrant and confirm
unto Lender, its successors and assigns forever, the following described
properties, rights and interests (all of which is hereinafter referred to as the
"Mortgaged Property"), to wit:
ALL THAT certain piece, parcel or tract of land or real property
(hereinafter referred to as the "Real Property") of which the Borrower is now
seized and in actual or constructive possession, situated in Indian River
County, Florida described on Exhibit "A" attached hereto and made a part hereof
by this reference thereto;
TOGETHER WITH all buildings, structures and other improvements of any kind,
nature, or description, if any, (hereinafter sometimes together referred to as
"Improvements") now or hereafter erected, constructed, placed or located upon
said Real Property, including, without limitation, any and all additions to,
substitutions for or replacements of such Improvements;
TOGETHER WITH all and singular, the tenements, hereditaments, strips and
gores, rights-of-way, easements, privileges and other appurtenances, if any, now
or hereafter belonging or in any way appertaining to the Real Property
including, without limitation, all right, title, and interest of the Borrower in
any after acquired right, title, interest, remainder or reversion, in and to the
beds of any ways, streets, avenues, roads, alleys, passages and public places,
open or proposed, in front of, running through, adjoining or adjacent to said
Real Property (hereinafter sometimes together referred to as "Appurtenances");
TOGETHER WITH any and all room rentals, leases, rents, royalties, issues,
revenues, profits, proceeds, income and other benefits, if any, including
accounts receivable, of, accruing to or derived from said Real Property,
Improvements and Appurtenances and any business or enterprise presently situate
or hereafter operated thereon and therewith (hereinafter sometimes together
referred to as "Rents");
AS WELL AS all fixtures, goods, chattels, construction materials,
architectural and construction plans, drawings, shop drawings, furniture,
furnishings, equipment, machinery, apparatus, appliances, and other items of
personal property, whether tangible or intangible, of any kind, nature or
description, whether now owned or hereafter acquired by the Borrower, which is,
are or shall hereafter be located upon, attached, affixed to or used or useful,
either directly or indirectly, in connection with the complete and comfortable
use, occupancy and operation of said Real Property and Improvements as an adult
independent living facility together with a clubhouse and related amenities (the
"Intended Use") or any other business, enterprise or operation as may hereafter
be conducted upon or with said Real Property, Improvements and Appurtenances,
including, without limitation, any and all licenses, permits or franchises, used
or required in connection with such use, occupancy or operation, together with
any and all additions, replacements or substitutions thereto, thereof or
therefor as well as the proceeds thereof or therefrom regardless of form
(hereinafter sometimes together referred to as "Fixtures and Personal
Property"). The Borrower hereby expressly grants to Lender a present security
interest in and lien and encumbrance upon said Fixtures and Personal Property;
TO HAVE AND TO HOLD all of the same unto the Lender and its successors and
assigns in fee simple forever;
AND the Borrower covenants and warrants with and to the Lender that the
Borrower is indefeasibly seized of the Mortgaged Property and has good right,
full power, and lawful authority to convey and encumber all of the same as
aforesaid; that the Borrower hereby fully warrants the title to the Mortgaged
Property and will defend the same and the validity and priority of the lien and
encumbrance of this Mortgage against the lawful claims of all persons
whomsoever; and the Borrower further warrants that the Mortgaged Property is
free and clear of all liens and encumbrances of any kind, nature or description;
save and except only (with respect to said Real Property, Improvements and
Appurtenances) for real property taxes for years subsequent to 2001, such
easements as are necessary for the furnishing of utility services to the Real
Property and those matters and things noted as exceptions to title in the title
insurance policy insuring the lien of this Mortgage which have heretofore been
approved by the Lender;
PROVIDED ALWAYS, however, that if the Borrower shall pay unto the Lender
the indebtedness evidenced and represented by the Note, and if the Borrower
shall duly, promptly and fully perform, discharge, execute, effect, complete and
comply with and abide by each and every one of the stipulations, agreements,
conditions and covenants of the Note, this Mortgage and all other documents and
instruments executed as further evidence of or as security for indebtedness
secured hereby, then this Mortgage and the estates and interests hereby granted
and created shall cease, terminate and be null and void;
AND the Borrower, for the benefit of the Lender, and its successors and
assigns, does hereby expressly covenant and agree:
1. Payments under Note. To pay the principal of the indebtedness evidenced
and represented by the Note, together with all interest thereon, in accordance
with the terms of the Note, promptly at the times, at the place, and in the
manner that said principal and interest shall become due, and to promptly and
punctually pay all other sums required to be paid by the Borrower pursuant to
the terms of this Mortgage.
2. Compliance with Covenants, Agreements and Conditions. To perform, comply
with and abide by each and every one of the covenants, stipulations, agreements
and conditions contained and set forth in the Note, this Mortgage, and any and
all other documents and instruments executed and delivered by the Borrower to
and in favor of the Lender as security for, evidence of, or otherwise connected
with or incidental to the loan transaction or extension of credit evidenced by
the Note and secured by this Mortgage.
3. Maintenance and Repair of Mortgaged Property. To keep all Improvements
now existing or hereafter erected on the Real Property in good order and repair
and not to do or permit waste thereof or thereon, nor to alter, remove or
demolish any of said Improvements or any Fixtures or Personal Property attached
or appertaining thereto without the prior written consent of the Lender, which
consent shall not be unreasonably withheld or delayed, nor to do or permit any
other act whereby the Mortgaged Property shall become less valuable, be used for
purposes contrary to applicable law, or be used in any manner which will
increase the premium for or result in a termination or cancellation of the
insurance hereinafter required to be kept and maintained on the Mortgaged
Property. In furtherance of, and not by way of limitation upon, the foregoing
covenant, Borrower shall effect such repairs as the Lender may reasonably
require, and from time to time make all needful and proper replacements so that
said Improvements, Appurtenances, Fixtures and Personal Property will, at all
times, be in good condition, fit and proper for the respective purposes for
which they were originally erected or installed. Lender, or its agents, shall
have the right and shall be permitted, but shall not be required, at all
reasonable times, to enter upon and inspect the Mortgaged Property to insure
compliance with the foregoing covenants and any and all other covenants,
stipulations, agreements and conditions set forth in this Mortgage. Further, not
more often than every other year, Lender may obtain at Borrower's expense, an
inspection and report with respect to the Mortgaged Property conducted and
prepared by an engineer selected by Lender. Borrower shall promptly make such
repairs to the Mortgaged Premises as requested by Lender following Lender's
review of said inspection report.
4. Payment of Taxes and Assessments. To pay all and singular such taxes,
assessments and public charges as are already levied or assessed or that may be
hereafter levied or assessed upon or against the Mortgaged Property, when the
same shall become due and payable according to law, before they become
delinquent, and before any penalty shall attach thereto, and to deliver official
receipts evidencing the payment of the same to the Lender not later than thirty
(30) days following the payment of the same or following Lender's demand
therefor.
5. Payments of Claims and Demands. To pay and discharge from time to time
when the same shall become due all lawful claims and demands of mechanics,
materialmen, laborers, and others which, if unpaid, might result in, or permit
the creation of, a lien, charge or encumbrance upon the Mortgaged Property or
any part thereof, or on the rents, issues, income, revenues, profits and
proceeds arising therefrom and, in general, to do or cause to be done everything
necessary so that the lien of this Mortgage shall be fully preserved at the cost
of the Borrower, without expense to the Lender.
6. Discharge of Superior Liens/Permit No Defaults. To pay and discharge or
otherwise remove of record within thirty (30) days of filing any claim, lien,
imposition or encumbrance against the Mortgaged Property other than this
Mortgage.
7. Property Insurance. Once construction of the Improvements has commenced,
thereafter to continuously keep the Improvements and the Fixtures and Personal
Property now or hereafter existing, erected, installed and located in or upon
the Real Property insured against loss or damage by or abatement of rental or
other income resulting from fire, windstorm, and flood, extended coverage and
such other hazards, casualties and contingencies and perils on such forms, in
such amounts and for such periods as may from time to time be reasonably
required by the Lender during the term hereof. All such insurance shall be
carried with such company or companies as may be reasonably acceptable to the
Lender and the original policy or policies and renewals thereof (or, at the
option of the Lender, duplicate originals or certified copies thereof) together
with receipts evidencing payment of the premium therefor shall be deposited
with, held by and are hereby assigned to Lender as additional security for the
indebtedness secured hereby. Each such policy of insurance shall contain a
non-contributing loss payable clause in favor of and in form acceptable to
Lender and shall provide for not less than thirty (30) days' prior written
notice of modification, cancellation, termination or expiration to Lender. In
the event of loss by reason of the hazards, casualties, contingencies and perils
for which insurance has been required by the Lender, the Borrower shall give
immediate notice thereof by mail to the Lender, and the Lender, at its option,
may make proof of loss if not made promptly by the Borrower, and each insurance
company concerned is hereby authorized and directed to make payment for such
loss directly to the Lender, instead of to the Borrower and Lender jointly, and
the Borrower hereby authorizes Lender to adjust and compromise any losses for
which insurance proceeds are payable under any of the aforesaid insurance
policies and, after deducting the costs of collection, to apply the proceeds of
such insurance, at its option, as follows, to wit: (a) to the restoration or
repair of the insured Improvements, Fixtures and Personal Property provided
that, in the reasonable opinion and discretion of the Lender, such restoration
or repair is reasonably practical and, provided further, that, in the reasonable
opinion and discretion of the Lender, either: (i) the insurance proceeds so
collected are sufficient to cover the cost of such restoration or repairs of the
damage or destruction with respect to which such proceeds were paid, or (ii) the
insurance proceeds so collected are not sufficient in themselves to cover the
cost of such restoration or repair, but are sufficient therefor when taken
together with funds provided and made available by the Borrower from other
sources; in which event the Lender shall make such insurance proceeds available
to the Borrower for the purpose of effecting such restoration or repairs; but
Lender shall not be obligated to see to the proper application of such insurance
proceeds nor shall the amount of funds so released or used be deemed to be
payment of or on account of the indebtedness secured hereby, or (b) to the
reduction of the indebtedness secured hereby as a credit on account thereof in
inverse order of maturity in the event that such insurance proceeds are not, in
the reasonable opinion and discretion of the Lender, sufficient to cover the
cost of such restoration or repairs, and the Borrower does not provide and make
available sufficient funds from other sources to make up the deficiency between
the amount of insurance proceeds and the estimated cost of such restoration and
repairs, or (c) to deliver such insurance proceeds to the owner of the Mortgaged
Property to be applied to the cost of such restoration or repair or for other
purposes. None of such actions taken by the Lender shall be deemed to be or
result in a waiver or impairment of any equity, lien or right of the Lender
under and by virtue of this Mortgage. In the event of foreclosure of this
Mortgage or other transfer of title to the Mortgaged Property in extinguishment
of the indebtedness secured hereby, all right, title and interest of the
Borrower in and to any insurance policies then in force and insurance proceeds
then payable shall pass to the purchaser or grantee.
8. Liability Insurance. To carry and maintain comprehensive general
liability insurance against claims for bodily injury, death, property damage,
fire, and legal liability on the Mortgaged Property, and automobile liability
insurance on owned, non-owned and hired vehicles operated in conjunction with
the Mortgaged Property, with limits of not less than One Million and No/100
Dollars ($1,000,000.00) per occurrence and Two Million and No/100 Dollars
($2,000,000.00) per location aggregate, which shall be issued by an insurance
carrier having an AM Best rating of at least A-, VII. Such policy or policies of
insurance shall name Lender as an additional insured and shall provide for not
less than thirty (30) days' prior written notice of modification, cancellation,
termination or expiration to Lender. The original policy or policies and all
renewals thereof (or, at the option of the Lender, duplicate originals or
certified copies thereof), together with receipts evidencing payment of the
premium therefor shall be deposited with, held by and are hereby assigned to
Lender as additional security for the indebtedness secured hereby.
9. Compliance with Law. To observe, abide by and comply with all statutes,
ordinances, orders, requirements or decrees relating to the Mortgaged Property
enacted, promulgated or issued by any federal, state or municipal authority or
any agency or subdivision thereof, and to observe and comply with all conditions
and requirements necessary to preserve any and all rights, licenses, permits
(including, but not limited to, zoning variances, special exceptions and
non-conforming uses), privileges, franchises and concessions which are
applicable to the Mortgaged Property or which have been granted to or contracted
for by Borrower in connection with any existing, presently contemplated or
future use of the Mortgaged Property.
10. Maintenance of Permits and Licenses. Commencing upon the issuance of a
certificate of occupancy for the Improvements to be operated for the Intended
Use and thereafter to obtain, keep and constantly maintain in full force and
effect during the entire term of this Mortgage, all certificates, licenses and
permits necessary to operate the Mortgaged Property for the Intended Use and not
to assign, transfer, or in any manner change such certificates, licenses or
permits without first receiving the written consent of the Lender to do so.
11. Perform Obligations of Lessor. To perform every obligation of the
Lessor and enforce every obligation of the Lessee in any and every lease or
other occupancy agreement that is or may be encumbered or assigned to Lender
pursuant to the terms of this Mortgage or otherwise, not to cancel any such
lease or occupancy agreement or modify any part thereof which would reduce the
term thereof or reduce the rent thereunder, nor anticipate for more than one
month any rents that may be collectible under any such lease or occupancy
agreement that may have been encumbered or assigned to Lender and not to assign
any such lease or occupancy agreement or any such rents to any party other than
Lender. In the event of default under any such lease or occupancy agreement by
reason of failure of the Borrower to keep or perform one or more of the
covenants, agreements or conditions thereof, if such failure is not cured within
the applicable grace period, if any, the Lender is hereby authorized and
empowered, and may, at its option, remedy, remove or cure any such default, and
further, Lender may, at its option and in its sole discretion, pay any sum of
money deemed necessary by it for the performance of said covenants, agreements
and conditions, or for the curing or removal of any such default, and incur all
expenses and obligations which it may consider necessary in connection
therewith, and Borrower shall repay on demand all such sums so paid or advanced
by Lender together with interest thereon until paid at the rate of 9.35% per
annum from the date of such payment until fifteen (15) days after Lender's
written demand for payment, and thereafter at the highest rate allowed by law
per annum shall be added to and become part of the indebtedness secured hereby.
12. Parking and Construction. Commencing upon the issuance of a certificate
of occupancy for the Improvements to be operated for the Intended Use and
thereafter to keep and constantly maintain all drives, parking areas and the
number of parking spaces, heretofore approved by the Lender for such
Improvements or heretofore or hereafter required for such Improvements by any
governmental body, agency or authority having jurisdiction over the Borrower or
the Mortgaged Property, and not to erect, build or construct upon any portion of
the Mortgaged Property, any building or structure of any kind whatsoever, the
erection, building or construction of which has not been previously approved by
Lender, which approval shall not be unreasonably withheld or delayed.
13.Further Assurances. To do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers, assurances, and other instruments, including security
agreements and financing statements, as the Lender shall from time to time
reasonably require, for the purpose of better assuring, conveying, assigning,
transferring and confirming unto the Lender the property and rights hereby
encumbered, created, conveyed, assigned or intended now or hereafter so to be
encumbered, created, conveyed or assigned or which the Borrower may now be or
may hereafter become bound to encumber, create, convey, or assign to the Lender,
or for the purpose of carrying out the intention or facilitating the performance
of the terms of this Mortgage, or for filing, registering or recording this
Mortgage, and to pay all filing, registration or recording fees, and all taxes,
costs and other expenses, including reasonable attorneys' fees, incident to the
preparation, execution, acknowledgment delivery and recordation of any of the
same.
14. Additions to Property. That all right, title and interest of the
Borrower in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Property hereinabove described, hereafter acquired by, or released to
the Borrower, or constructed, assembled or placed by the Borrower on the Real
Property, and all conversions of the security constituted thereby, immediately
upon such acquisition, release, construction, assembling, placement or
conversion, as the case may be, and in each such case, without any further
mortgage, conveyance, assignment or other act by the Borrower, shall become
subject to the lien of this Mortgage as fully and completely and with the same
effect as though now owned by the Borrower and specifically described herein,
but at any and all times the Borrower will execute and deliver to the Lender any
and all such further assurances, mortgages, conveyances, or assignments thereof
or security interests therein as the Lender may reasonably require for the
purpose of expressly and specifically subjecting the same to the lien of this
Mortgage.
15. Payments on behalf of Borrower. That should the Borrower fail to make
payment of any taxes, assessments or public charges on or with respect to the
Mortgaged Property before the same shall become delinquent, or shall fail to
make payment of any insurance premiums or other charges, impositions or liens
herein or elsewhere required to be paid by the Borrower, then the Lender, at its
option, may make payment or payments of the same, and also may redeem the
Mortgaged Property from tax sale without any obligation to inquire into the
validity of such taxes, assessments and tax sales. In the case of any such
payment by the Lender, the Borrower agrees to reimburse the Lender, upon demand
therefor, the amount of such payment with any fees and expenses attendant in
making the same, together with interest thereon at the rate of 9.35% per annum
from the date of such payment until fifteen (15) days after Lender's written
demand for payment, and thereafter at the highest rate allowed by law per annum;
and, until paid, such amounts and interest shall be added to and become part of
the debt secured hereby to the same extent that this Mortgage secures the
repayment of the indebtedness evidenced by the Note. Neither the right nor the
exercise of the right herein granted unto the Lender to make any such payments
as aforesaid shall preclude the Lender from exercising its option to cause the
whole indebtedness secured hereby to become immediately due and payable by
reason of the Borrower's default in making such payments as hereinabove
required, if such default is not cured within the applicable grace period, if
any.
16. Reliance on Bills and Statements. That the Lender, in making any
payment herein and hereby authorized in the place and stead of Borrower,
relating to taxes, assessments and other governmental or municipal charges,
fines, impositions or liens asserted against the Mortgaged Property, may do so
according to any xxxx or statement procured from the appropriate public office
without inquiry into the accuracy of the xxxx, statement or estimate or into the
validity of any tax, assessment, sale, forfeiture, tax lien or title or claim
thereof, or relating to any apparent or threatened adverse title, lien,
statement of lien, encumbrance, claim or charge if Lender has provided Borrower
with a copy of such xxxx, statement or estimate, and advised Borrower of
Lender's intent to pay the same, and Borrower within fifteen (15) days of its
receipt thereof fails to provide Lender with evidence reasonably acceptable to
Lender of its payment by Borrower or that such payment is not due and owing. In
making payments hereby authorized by the provisions of this paragraph, Lender
may do so whenever, in its reasonable judgment and discretion, such advance or
advances are necessary or desirable to protect the full security intended to be
afforded by this instrument.
17. Escrow Accounts. That, in order to more fully protect the security of
this Mortgage, at the request of Lender, the Borrower shall deposit with the
Lender, together with and in addition to each monthly payment due on account of
the indebtedness evidenced by the Note, an amount equal to one-twelfth (1/12) of
the annual total of the estimated real and personal property taxes (and
insurance premium if required by Lender) for the Mortgaged Property (all as
estimated by the Lender in its sole discretion) so as to place sufficient funds
in the hands of Lender for the payment of such taxes, as the same shall become
due. The Lender shall hold the sums so deposited and apply the same to the
payment of said taxes, as they become due and payable. If at any time the funds
so held by Lender are insufficient to pay such taxes as they become due and
payable, the Borrower shall immediately, upon notice and demand by Lender,
deposit with Lender the amount of such deficiency, and the failure on the part
of the Borrower to do so shall entitle the Lender, at its option, to itself make
such payments in accordance with its right and pursuant to the conditions
elsewhere in this Mortgage provided. Whenever any default exists under this
Mortgage, Lender may, at its option, and without obligation so to do, apply any
funds so held by it upon such of the indebtedness secured hereby, and in such
order and manner of application as Lender may elect.
18. Condemnation. That all awards and other compensation heretofore or
hereafter to be made to Borrower and all subsequent owners of the Mortgaged
Property in any taking by eminent domain, either permanent or temporary, of all
or any part of the said property or any easement or any appurtenance thereto,
including severance and consequential damages and change in grade of any street,
are hereby assigned to Lender, and Borrower hereby appoints Lender as its
attorney-in-fact, coupled with an interest, and authorizes, directs and empowers
such attorney, at the option of said attorney, on behalf of Borrower, its
successors and assigns, to adjust or compromise the claim for any such award
(with Borrower's prior written consent, unless a default has occurred that has
not been cured by Borrower within the applicable grace period, if any, and is
continuing) and to alone collect and receive the proceeds thereof, to give
proper receipts and acquittances therefor and, after deducting any expenses of
collection, at its option, to apply the net proceeds as a credit upon any
portion, as selected by Lender, of the indebtedness secured hereby,
notwithstanding the fact that the amount owing thereon may not then be due and
payable or that the indebtedness is otherwise adequately secured. Borrower
further covenants and agrees to give Lender immediate notice of the actual or
threatened commencement of any proceedings under eminent domain and will deliver
to Lender copies of any and all papers served in connection with any
proceedings. Borrower further covenants and agrees to make, execute and deliver
to Lender, at any time or times, upon request, free, clear and discharged of any
encumbrance of any kind whatsoever, any and all further assignments and/or other
instruments deemed necessary by Lender for the purpose of validly and
sufficiently assigning all such awards and other compensation heretofore or
hereafter to be made to Lender (including the assignment of any award from the
United States Government at any time after the allowance of the claim therefor,
the ascertainment of the amount thereof and the issuance of the warrant for
payment thereof).
19. Attorneys' Fees. That in the event that the Note secured hereby is
placed in the hands of an attorney for collection, or in the event that the
Lender shall become a party either as plaintiff or as defendant, in any action,
suit, appeal or legal proceeding (including, without limitation, foreclosure,
condemnation, bankruptcy or administrative proceedings or any proceeding wherein
proof of claim is by law required to be filed), hearing, motion or application
before any Court or administrative body in relation to the property described or
the lien and security interest granted or created hereby or herein, or for the
recovery or protection of said indebtedness or said property, or for the
foreclosure of this Mortgage, the losing party shall save and hold the
prevailing party harmless from and against any and all costs and expenses
incurred by the prevailing party on account thereof, including, but not limited
to, reasonable attorneys' fees, title searches and abstract and survey charges.
The Borrower shall repay, on demand, all such costs and expenses, together with
all reasonable attorney's fees, costs and expenses incurred by the Lender in
connection with any bankruptcy proceeding involving any person liable hereunder
or any person who might now have or hereafter acquire a record interest or other
interest in the Mortgaged Property, whether or not there exists any default
hereunder, including by way of example, but without limitation, all reasonable
attorney's fees, costs, and expenses incurred in connection with motions for
relief from the automatic stay and adequate protection, proofs of claim and
objections thereto, motions to dismiss or convert bankruptcy cases, approval of
disclosure statements and objections thereto, confirmation of plans of
reorganization and objections thereto, litigation involving preference and other
avoidance powers, motions to value collateral, objections to the sale or use of
collateral, and any and all other matters pertaining to any bankruptcy case
affecting the Note, this Mortgage, or any other document executed in connection
with the loan contemplated thereby, or the enforcement of any of the foregoing
described instruments and together with interest thereon until paid at the
highest rate allowed by law per annum of which sums, if unpaid, shall be added
to and become a part of the indebtedness secured hereby.
20. Default Rate. That, subject to applicable cure periods, and except as
otherwise expressly provided in the Note or this Mortgage, any sums which shall
not be paid when due, whether maturing by lapse of time or by reason of
acceleration under the provisions of the Note or this Mortgage, and whether
principal, interest or money owing for advancements pursuant to the terms of
this Mortgage or any other document or instrument executed as security for the
Note shall bear interest until paid at the highest rate allowed by law per
annum.
21. No Usury/Severability. That in no event shall the amount of interest
due or payment in the nature of interest payable under the Note or this Mortgage
exceed the maximum rate of interest allowed by applicable law, as amended from
time to time, and in the event any such payment is paid by the Borrower or
received by the Lender, then such excess sum shall be credited as a payment of
principal, unless the Borrower shall notify the Lender, in writing, that the
Borrower elects to have such excess sum returned to it forthwith; and if any
clauses or provisions herein contained operate or would prospectively operate to
invalidate this Mortgage or the Note secured hereby in whole or in part, then,
such clauses and provisions only shall be held for naught, as though not herein
contained, and the remainder of this Mortgage shall remain operative and in full
force and effect.
22. Bankruptcy of Borrower. That it shall be a default hereunder if the
Borrower shall (a) consent to the appointment of a receiver, trustee or
liquidator of all or a substantial part of Borrower's assets, or (b) be
adjudicated a bankrupt or insolvent, or file a voluntary petition in bankruptcy,
or admit in writing its inability to pay its debts as they become due, or (c)
make a general assignment for the benefit of creditors, or (d) file a petition
or to take advantage of any insolvency law, or (e) file an answer admitting the
material allegations of a petition filed against the Borrower in any bankruptcy,
reorganization or insolvency proceeding, or (f) itself take action for the
purpose of effecting any of the foregoing, or (g) if any order, judgment or
decree shall be entered upon an application of a creditor or Borrower by a Court
of competent jurisdiction approving a petition seeking appointment of a receiver
or trustee of all or a substantial part of the Borrower's assets and such order,
judgment or decree shall continue unstayed and in effect for a period of sixty
(60) days.
23. Default. That if default be made in the payment of any installment of
the Note, whether of principal or interest, and such default is not cured within
ten (10) days thereof, or if default be made in the payment of any other sums
mentioned herein or in any of the Loan Documents and such default is not cured
within fifteen (15) days of notice from Lender, or in the event a breach or
default be made by the Borrower in any one of the stipulations, agreements,
conditions and covenants of said Note, this Mortgage, or any other documents or
instruments executed and delivered by the Borrower to and in favor of the Lender
as security for, evidence of or otherwise connected with or incidental to the
loan transaction or extension of credit evidenced by the Note and secured by
this Mortgage and such default is not cured within thirty (30) days after notice
from Lender (or if such default is curable but cannot be cured within such
thirty (30) day period, if Borrower does not commence the cure within such
thirty (30) day period or does not thereafter diligently pursue the curing of
such default to completion), then and upon the occurrence of any one of such
events, or upon the happening of any other event which, according to the terms
of this Mortgage or the Note shall entitle the holder to accelerate the maturity
of the indebtedness evidenced by the Note, the Lender, at its option, may
thereupon or thereafter declare the indebtedness evidenced by the Note, as well
as all other monies secured hereby, to be forthwith due and payable, whereupon
the principal of and the interest accrued on the indebtedness evidenced and
represented by the Note and all other sums secured by this Mortgage shall
immediately become and be due and payable as if all of said sums of money were
originally stipulated to be paid on such day, and thereupon, without notice or
demand, the Lender may avail itself of all rights and remedies provided by law
and may prosecute a suit at law or in equity as if all monies secured hereby had
matured prior to its institution, anything in this Mortgage or in the Note to
the contrary notwithstanding. The Lender may foreclose this Mortgage as to the
amount so declared due and payable, and the Mortgaged Property shall be sold
according to law to satisfy and pay the same together with all costs, expenses
and allowances, including, without limitation, a reasonable fee for the Lender's
attorneys. The Mortgaged Property may be sold in one parcel, several parcels or
groups of parcels, and the Lender shall be entitled to bid at the sale and, if
the highest bidder for the Mortgaged Property or any part or parts thereof,
shall be entitled to purchase the same. The failure or omission on the part of
the Lender to exercise the option for acceleration of maturity and foreclosure
of this Mortgage following any default as aforesaid or to exercise any other
option granted hereunder to Lender when entitled to do so in any one or more
instances, or the acceptance by Lender of partial payment of the indebtedness
secured hereby, whether before or subsequent to Borrower's default hereunder,
shall not constitute a waiver of any such default or the right to exercise any
such option, but such option shall remain continuously in force. Acceleration of
maturity, once claimed hereunder by Lender, at the option of Lender, may be
rescinded by written acknowledgment to that effect by Lender, but the tender and
acceptance of partial payments alone shall not in any way affect or rescind such
acceleration of maturity.
24. Possession after Default. That at any time after default hereunder that
is not cured within the applicable grace period, if any, is continuing, the
Lender is authorized, without notice, in its sole discretion to enter upon and
take possession of the Mortgaged Property or any part thereof and to perform any
acts which the Lender deems necessary or proper to conserve the security herein
intended to be provided by said property, to operate any business or businesses
conducted thereon and to collect and receive all rents, issues and profits
thereof and therefrom, including those past due as well as those accruing
thereafter.
25. Appointment of Receiver. That if, at any time after a default hereunder
that is not cured within the applicable grace period, if any, is continuing, in
the opinion of the Lender, a receivership may be necessary to protect the
Mortgaged Property, or its rents, issues, revenue, profits or proceeds, whether
before or after maturity of the indebtedness secured hereby and whether before
or at the time of or after the institution of suit to collect such indebtedness,
or to enforce this Mortgage, the Lender, as a matter of strict right and
regardless of the value of the Mortgaged Property or the amounts due hereunder
or secured hereby, or of the solvency of any party bound for the payment of such
indebtedness, shall have the right, upon ex parte application, without notice to
anyone, and by any Court having jurisdiction, to the appointment of a receiver
to take charge of, manage, preserve, protect and operate the Mortgaged Property,
to collect the rents, issues, revenues, profits, proceeds and income thereof, to
make all necessary and needful repairs, and to pay all taxes, assessments and
charges against said property and all premiums for insurance thereon, and to do
such other acts as may by such court be authorized and directed, and after
payment of the expenses of the receivership and the management of the Mortgaged
Property to apply the net proceeds of such receivership in reduction of the
indebtedness secured hereby or in such other manner as the Court shall direct.
Such receivership shall, at the option of Lender, continue until full payment of
all sums hereby secured, or until title to the Mortgaged Property shall have
passed by sale under this Mortgage. Borrower hereby specifically waives its
right to object to the appointment of a receiver as aforesaid and hereby
expressly agrees that such appointment shall be made as an admitted equity and
as a matter of absolute right to the Lender.
26. Rights and Remedies. That the rights and remedies herein provided are
cumulative and Lender, as the holder of the Note and of every other obligation
secured hereby, may recover judgment thereon, issue execution therefor and
resort to every other right or remedy available at law or in equity, without
first exhausting and without affecting or impairing the security of any right or
remedy afforded hereby and no enumeration of special rights or powers by any
provisions hereof shall be construed to limit any grant of general rights or
powers, or to take away or limit any and all rights granted to or vested in
Lender by law, and Borrower further agrees that no delay or omission of the
Lender to exercise any rights or power accruing to it hereunder shall impair any
such right or power or shall be construed to be a waiver of any such event of
default hereunder or an acquiescence therein; and every right, power and remedy
granted herein to the Lender may be exercised from time to time as often as may
be deemed expedient by the Lender.
27. Lender's Right to Release. That Lender, without notice and without
regard to the consideration, if any, paid therefor, and notwithstanding the
existence at that time of any inferior mortgages or other liens thereon, may
release any part of the security described herein or may release any person
liable for any indebtedness secured hereby without in any way affecting the
priority of this Mortgage, to the full extent of the indebtedness remaining
unpaid hereunder, upon any part of the security not expressly released. Lender
may, at its option and within its sole discretion, also agree with any party
obligated on said indebtedness, or having any interest in the security described
herein, to extend the time for payment of any part or all of the indebtedness
secured hereby, and such agreement shall not, in any way, release or impair this
Mortgage, but shall extend the same as against the title of all parties having
any interest in said security, which interest is subject to this Mortgage.
28. No Waiver of Rights. That in the event Lender: (a) releases, as
aforesaid, any part of the security described herein or any person liable for
any indebtedness secured hereby, or (b) grants an extension of time on any
payments of the indebtedness secured hereby, or (c) takes other or additional
security for the payment thereof, or (d) waives or fails to exercise any rights
granted herein or in said Note, any said act or omission shall not release
Borrower, subsequent purchasers of the Mortgaged Property or any part thereof,
or makers, sureties, endorsers or guarantors, if any, of the Note, from any
obligation or any covenant of its Mortgage or of the said Note, nor preclude
Lender from exercising any right, power or privilege herein granted or intended
to be granted in the event of any other default then made, or any subsequent
default.
29. Transfer of Mortgage Property or Ownership of Borrower/Additional
Borrower Debt. That, without the prior written consent of the Lender, which
consent shall not be unreasonably withheld or delayed, transfer or conveyance of
all or any portion of the legal or beneficial ownership of the Mortgaged
Property, whether voluntarily or by operation of law, shall constitute a default
under the terms of this Mortgage and entitle the Lender, at its option, to
accelerate all sums due on account of the Note secured hereby. Lender, however,
may elect to waive its option to accelerate if, prior to any such sale or
transfer of the Mortgaged Property the following conditions shall be fully
satisfied: (a) the Lender acknowledges in writing that, in its sole discretion,
the credit worthiness of the proposed transferee and the ability and experience
of the proposed transferee to continue to operate the Mortgaged Property are
satisfactory to Lender, and (b) Lender and the proposed transferee shall enter
into an agreement in writing that the interest payable on the sum secured hereby
shall be at such rate as Lender shall request. That in the event the ownership
of the Mortgaged Property, or any part thereof, shall become vested in a person
other than the Borrower, whether with or without the prior written consent of
the Lender, the Lender may, without notice to the Borrower, deal with such
successor or successors in interest with reference to the Mortgaged Property,
this Mortgage and the Note secured hereby in the same manner and to the same
extent as with the Borrower without in any way vitiating or discharging the
Borrower's liability hereunder or upon the debt hereby secured. No sale,
transfer or conveyance of the Mortgaged Property, no forbearance on the part of
the Lender and no extension of the time for the payment of the debt hereby
secured given by the Lender shall operate to release, discharge, modify, change
or affect the original liability of the Borrower, either in whole or in part,
unless expressly set forth in writing executed by the Lender. Until the Note
shall be paid in full, Borrower shall not, without the express written consent
of Lender, which consent shall not be unreasonably withheld or delayed, incur
any additional debt, except in the ordinary course of business.
30. Junior and Secondary Liens. That so long as the Note secured hereby
remains unpaid, the Borrower shall neither voluntarily nor involuntarily permit
the Mortgaged Property or any part thereof to become subject to any secondary or
other junior lien, mortgage, security interest or encumbrance of any kind
whatsoever without the prior written consent of the Lender, which consent shall
not be unreasonably withheld or delayed, and the imposition of any such
secondary or junior lien, mortgage, security interest or encumbrance shall,
subject to the cure period set forth in Paragraph 6 above, constitute an event
of default hereunder and entitle the Lender, at its option, to declare all sums
due on account of the Note to be and become immediately due and payable. In the
event that Lender shall hereafter give its written consent to the imposition of
any such secondary or junior lien, mortgage, security interest or other
encumbrance upon the Mortgaged Property, the Lender, at its option, shall be
entitled to accelerate the maturity of the indebtedness secured hereby and
exercise any and all remedies provided and available to Lender hereunder, in the
event that the holder of any such secondary or junior lien or encumbrance shall
institute foreclosure or other proceedings to enforce the same; it being
understood and agreed that a default under any instrument or document
evidencing, securing or secured by any such secondary or junior lien or
encumbrance shall be and constitute an event of default hereunder.
31. Loan Documents/Cross Default. That the Note secured hereby is also
secured by the terms and provisions of an Assignment of Leases, Rents and
Profits recorded among the Public Records of Indian River County, Florida and,
additionally, may be secured by contracts or agreements of guaranty, or other
security documents. The terms and provisions of each of such documents shall be
considered a part hereof as fully as if set forth herein verbatim. Any default
under this Mortgage or the Note secured hereby that is not cured within the
applicable grace period (if any) shall constitute an event of default under the
aforesaid Assignment of Leases, Rents and Profits and any other security
documents, and any default under said Assignment of Leases, Rents and Profits or
other security documents that is not cured within the applicable grace period
(if any) shall likewise constitute a default hereunder and under the Note
secured hereby. Notwithstanding the foregoing, the enforcement or attempted
enforcement of this Mortgage or any other such security document now or
hereafter held by Lender shall not prejudice or in any manner affect the right
of Lender to realize or enforce any other security document; it being understood
and agreed that the Lender shall be entitled to enforce this Mortgage and any
other security document now or hereafter held by it in such order and manner as
Lender, in its sole discretion, shall determine.
32. Reporting. The Borrower shall provide annually within ninety (90) days
of each calendar year end financial statements on Borrower, which statements
shall include at a minimum, a balance sheet, income statement, and a cash flow
analysis, and such other information as Lender may reasonably require with
respect to the statements (but Lender shall have no right to require such
statements to be audited or renewed by a certified public accountant). Borrower
shall also provide to the Lender on an annual basis (i) a cash flow analysis of
Borrower and (ii) within thirty (30) days of filing, a copy of all federal
income tax returns of Borrower. Further, at the request of Lender, Borrower
shall also provide to Lender a quarterly operating statement within thirty (30)
days following the end of any such quarter.
33. Depository Account. For so long as the Note and the obligations of
Borrower under the Loan Documents remain outstanding the Borrower shall maintain
its depository accounts held in connection with the Mortgaged Property at CNL
Bank.
34. Future Advances. That this Mortgage shall secure not only existing
indebtedness, but also such future advances, whether such advances are
obligatory or to be made at the option of the Lender, or otherwise, as are made
within twenty (20) years from the date hereof, to the same extent as if such
future advances were made on the date of the execution of this Mortgage, but the
total of such secured indebtedness shall not exceed at any one time a maximum
principal amount equal to FIFTY-FIVE MILLION AND NO/100 DOLLARS ($55,000,000.00)
plus interest, and any advances or disbursements made for the benefit or
protection of or the payment of taxes, assessments, levies or insurance upon the
Mortgaged Property with interest on such disbursements as provided herein. To
the extent that this Mortgage may secure more than one note, a default in the
payment of any such note secured hereby that is not cured within the applicable
grace period, if any, shall constitute a default in the payment of all such
notes.
35. Security Agreement. That this Mortgage is and shall be deemed to
create, grant, give and convey a mortgage of, a lien and encumbrance upon, and a
present security interest in both real and personal property, including all
fixtures, goods, chattels, construction materials, architectural and
construction plans, drawings, shop drawings, furniture, furnishings, equipment,
machinery, apparatus, appliances, and other items of personal property, whether
tangible or intangible, of any kind, nature or description, whether now owned or
hereafter acquired by the Borrower, hereinabove particularly or generally
described and conveyed, whether now or hereafter affixed to, located upon,
necessary for or used or useful, either directly or indirectly, in connection
with the operation of the Mortgaged Property for its Intended Use and this
Mortgage shall also serve as a "Security Agreement" within the meaning of that
term as used in the Uniform Commercial Code as adopted and in force from time to
time in the State of Florida, and shall be operative and effective as a Security
Agreement in addition to, and not in substitution for, any other Security
Agreement executed by the Borrower in connection with the extension of credit or
loan transaction secured hereby. The Borrower agrees to and shall, upon the
request of Lender, execute and deliver to Lender, in form satisfactory to
Lender, such "Financing Statements," descriptions of property and such further
assurances as Lender, in its sole discretion, may from time to time consider
necessary to create, perfect, continue and preserve the lien and encumbrances
hereof and the security interest granted herein upon and in such the real and
personal property described herein including all fixtures, goods, chattels,
construction materials, architectural and construction plans, drawings, shop
drawings, furniture, furnishings, equipment, machinery, apparatus, appliances,
and other items of personal property, whether tangible or intangible, of any
kind, nature or description, whether now owned or hereafter acquired by the
Borrower, herein specifically or generally described and intended to be the
subject of the security interest, lien and encumbrance hereby created, granted
and conveyed. The Lender, at the expense of the Borrower, may or shall cause
such statements, descriptions and assurances and this Mortgage to be recorded
and re-recorded, filed and refiled, at such times and in such places as may be
required or permitted by law to so create, perfect and preserve the lien and
encumbrance hereof upon all of said property.
36. Successors and Assigns. The provisions hereof shall be binding upon the
Borrower and the heirs, devisees, personal representatives, successors and
assigns of the Borrower, and inure to the benefit of Lender and its successors
and assigns. The words "Borrower" and "Lender" shall be interpreted to mean
singular, plural, feminine, masculine or neuter as the context shall require.
37. Environmental Representations and Warranties. Borrower warrants and
represents to Lender that to the best of Borrower's knowledge after due and
diligent inquiry: (a) the Mortgaged Property described herein is now and at all
times hereafter will continue to be in full compliance with all federal, state
and local environmental laws and regulations, including but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), Public Law Xx. 00-000, 00 Xxxx. 0000, 00 X.X.X. 0000 et seq, and the
Super fund Amendments and Reauthorization Act of 1986 ("XXXX"), Public Law Xx.
00-000, 000 Xxxx. 0000, and (b)(i) as of the date hereof there are no hazardous
materials, substances, wastes or other environmentally regulated substances
(including without limitation, any materials containing asbestos, other than
asbestos in the floor tiles in the stairwells) located on, in or under the
Mortgaged Property or used in connection therewith, or (ii) Borrower has fully
disclosed to Lender in writing the existence, extent and nature of any such
hazardous materials, substances, wastes or other environmentally regulated
substances, which Borrower is legally authorized and empowered to maintain on,
in or under the Mortgaged Property or use in connection therewith, and Borrower
has obtained and will maintain all licenses, permits and approvals required with
respect thereto, and is in full compliance with all of the terms, conditions and
requirements of such licenses, permits and approvals. Borrower further warrants
and represents that it will promptly notify Lender of any change in the nature
or extent of any hazardous materials, substances or wastes maintained on, in or
under the Mortgaged Property or used in connection therewith, and will transmit
to Lender copies of any citations, orders, notices or other material
governmental or other communication received with respect to any other hazardous
materials, substances, wastes or other environmentally regulated substances
affecting the Mortgaged Property. Borrower shall indemnify and hold Lender
harmless from and against any and all damages, penalties, fines, claims, liens,
suits, liabilities, costs (including clean-up costs), judgments and expenses
(including reasonable attorneys', consultants' or experts' fees and expenses) of
every kind and nature suffered by or asserted against Lender as a direct or
indirect result of any warranty or representation made by Borrower in this
paragraph being false or untrue in any respect or any requirement under any law,
regulation or ordinance, whether local, state or federal, which requires the
elimination or removal of any hazardous materials, substances, wastes or other
environmentally regulated substances. Borrower's obligations hereunder shall not
be limited to any extent by the term of the Note secured hereby, and, as to any
act or occurrence prior to payment in full and satisfaction of said Note which
gives rise to liability hereunder, shall continue, survive and remain in full
force and effect notwithstanding payment in full and satisfaction of said Note
and this Mortgage or foreclosure under this Mortgage, or delivery of a deed in
lieu of foreclosure, if Lender has acquired title to the Mortgaged Property by
foreclosure or acceptance of a deed in lieu thereof.
38. Governing Law. This instrument is to be governed by and construed in
accordance with the laws of the State of Florida.
39. Partial Release of Mortgage. Lender acknowledges that Borrower intends
to construct single-family duplexes or "villas" on a portion of the Property
(the "Single Family Parcel") and that Borrower intends to transfer fee simple
title to the Single Family Parcel to an entity owned by or affiliated with the
Borrower prior to commencing any construction activity thereon. Provided
Borrower is not in default under this Mortgage, the Note or any of the other
Loan Documents, Lender will release the Single Family Parcel from the lien and
encumbrance of this Mortgage, provided that (i) Borrower shall make request for
such partial release to the Lender in writing, together with a proposed legal
description of the Single Family Parcel, and (ii) Lender shall approve the
proposed legal description of the Single Family Parcel, which approval shall not
be unreasonably withheld or delayed.
IN WITNESS WHEREOF, the said Borrower has caused these presents to be
executed as of the date and year first above written.
Signed, sealed and delivered DSTS, LLC, a Florida limited liability company
in the presence of:
/s/ J. Xxxxxx Xxxxx By: /s/ Xxx Xxxxxxx
--------------------------------- --------------------------------
Signature of Witness Printed Name: Xxx Xxxxxxx
Title: Member/Manager
J. Xxxxxx Xxxxx
---------------------------------
Printed Name of Witness
/s/ Xxxxxxx X. Xxxxx
---------------------------------
Signature of Witness
Xxxxxxx X. Xxxxx
---------------------------------
Printed Name of Witness
STATE OF FLORIDA ss.
COUNTY OF ORANGE ss.
The foregoing instrument was sworn to and subscribed before me on August 6,
2002 by Xxx Xxxxxxx, as Member/Manager, of DSTS, LLC, a Florida limited
liability company, on behalf of the limited liability company. He/She [x] is
personally known to me or [ ] produced a driver's license as identification and
did take an oath.
(NOTARY SEAL) /s/ Xxxxxxx X. Xxxxx
------------------------------------
Notary Public Signature
Xxxxxxx X. Xxxxx
------------------------------------
(Name typed, printed or stamped)
Notary Public, State of
Commission No.:
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My Commission Expires:
EXHIBIT "A"
LEGAL DESCRIPTION OF THE REAL PROPERTY
