EXHIBIT 99.3
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MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING
MHC ELDORADO VILLAGE, LLC, a Delaware limited liability company
BORROWER,
TO
BANK OF AMERICA, N.A.,
a national banking association,
LENDER
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This instrument was prepared by and
after recording return to:
Alston & Bird LLP
90 Park Avenue
New York, New York 10016
Attention: Meryl P. Diamond, Esq.
TABLE OF CONTENTS
PAGE
1. PAYMENT OF INDEBTEDNESS; PERFORMANCE OF OBLIGATIONS.....................................................4
2. TAXES AND OTHER OBLIGATIONS.............................................................................4
3. RESERVES FOR TAXES/INSURANCE/REPLACEMENT RESERVE........................................................4
4. USE OF PROPERTY.........................................................................................7
5. INSURANCE AND CONDEMNATION..............................................................................7
6. PRESERVATION AND MAINTENANCE OF PROPERTY................................................................9
7. PROTECTION OF LENDER'S SECURITY; LEASES................................................................10
8. INSPECTION.............................................................................................11
9. BOOKS AND RECORDS......................................................................................11
10. FINANCIAL STATEMENTS...................................................................................11
11. HAZARDOUS SUBSTANCES...................................................................................12
12. REPRESENTATIONS AND COVENANTS..........................................................................12
13. LEASE ASSIGNMENT.......................................................................................16
14. ESTOPPEL CERTIFICATES..................................................................................16
15. TRANSFERS OF THE PROPERTY OR OWNERSHIP INTERESTS IN BORROWER; ASSUMPTION; DUE ON
SALE/ENCUMBRANCE.......................................................................................16
16. NO ADDITIONAL LIENS....................................................................................22
17. SINGLE ASSET ENTITY....................................................................................22
18. BORROWER AND LIEN NOT RELEASED.........................................................................23
19. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT AND FIXTURE FILING..........................................24
20. EVENTS OF DEFAULT; ACCELERATION OF INDEBTEDNESS; REMEDIES..............................................25
21. ENTRY; FORECLOSURE; REMEDIES...........................................................................26
22. EXPENDITURES AND EXPENSES..............................................................................29
23. APPLICATION OF PROCEEDS OF FORECLOSURE SALE............................................................30
24. APPOINTMENT OF RECEIVER OR MORTGAGEE IN POSSESSION.....................................................30
25. FORBEARANCE BY LENDER NOT A WAIVER.....................................................................30
26. WAIVER OF STATUTE OF LIMITATIONS.......................................................................31
27. WAIVER OF HOMESTEAD AND REDEMPTION.....................................................................31
28. JURY TRIAL WAIVER......................................................................................31
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TABLE OF CONTENTS
(continued)
PAGE
29. INDEMNIFICATION........................................................................................31
30. DUTY TO DEFEND.........................................................................................32
31. ERISA..................................................................................................33
32. NO ORAL CHANGE.........................................................................................33
33. NOTICE.................................................................................................33
34. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; AGENTS; CAPTIONS............................34
35. GOVERNING LAW; SEVERABILITY............................................................................34
36. RELEASE................................................................................................35
37. COVENANTS RUNNING WITH THE LAND........................................................................35
38. TERMS..................................................................................................35
39. LOSS OF NOTE...........................................................................................35
40. CHANGES IN THE LAWS REGARDING TAXATION.................................................................35
41. EXCULPATION............................................................................................35
42. DISCLOSURE OF INFORMATION..............................................................................35
43. SALE OF LOAN; SECURITIZATION...........................................................................36
44. ACTIONS AND PROCEEDINGS................................................................................36
45. NO THIRD PARTY BENEFICIARIES...........................................................................36
46. EXHIBITS AND RIDERS....................................................................................36
47. RECORDING OF SECURITY INSTRUMENT, ETC..................................................................36
48. COUNTERPARTS...........................................................................................37
49. SPECIAL FLORIDA PROVISIONS.............................................................................37
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DEFINED TERMS
As used in this Mortgage, the following terms shall have the following
meanings assigned to them:
BORROWER MHC Eldorado Village, LLC, a Delaware limited
liability company
BORROWER'S ADDRESS c/o Equity LifeStyle Properties, Inc., Two North
Riverside Plaza, Suite 800, Chicago, Illinois
60606
PROPERTY ADDRESS Eldorado Village, Largo, Florida
LENDER Bank of America, N.A., a national banking
association, and its successors and assigns as
holders of the Note
LENDER'S ADDRESS 214 North Tryon Street
Charlotte, North Carolina 28255
NOTE That Promissory Note of even date herewith made by
Borrower to the order of Lender in the Principal
Amount, together with all notes issued in
substitution or exchange therefor, as any of the
foregoing may be amended, modified or supplemented
from time to time
PRINCIPAL AMOUNT $8,190,000
MATURITY DATE December 1, 2015
LAND The property described on EXHIBIT A to this
Mortgage
PERSONAL PROPERTY The property described on EXHIBIT B to this
Mortgage
REPLACEMENT RESERVE $1,042.33
MONTHLY PAYMENT
PERMITTED USE Manufactured Home Community and Recreational
Vehicle Resort
PRINCIPAL(S) MHC Operating Limited Partnership, an Illinois
limited partnership
MHC CONTROL PERIOD Any period of time during which no Event of
Default is continuing hereunder, the sole fee
simple owner of the Property is the initial
Borrower named above and MHC Trust, a Maryland
Real Estate Investment Trust or Subsidiary (as
defined in Section 15(e)), (i) is the sole General
Partner of Principal, and (ii) directly or
indirectly controls Borrower.
MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING
THIS MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING (this "MORTGAGE"),
is made this 1st day of December, 2005, by and between MHC Eldorado Village,
LLC, a Delaware limited liability company ("BORROWER"), having its principal
place of business at c/o Equity LifeStyle Properties, Inc., Two North Riverside
Plaza, Suite 800, Chicago, Illinois 60606, and Bank of America, N.A., a national
banking association (together with its successors and/or assigns, "LENDER"),
having an address at 214 North Tryon Street, Charlotte, North Carolina 28255.
R E C I T A L S:
A. Borrower has executed and delivered to Lender the Note (which is
hereinafter referred to as the "NOTE"), providing for monthly installments of
interest only and principal and interest, as applicable, with the balance
thereof, if not sooner due or paid as set forth in the Note, due and payable on
the Maturity Date;
B. Lender wishes to secure (i) the prompt payment of the Note, together
with all interest thereon in accordance with the terms of the Note, as well as
the prompt payment of any additional indebtedness accruing to Lender on account
of any future payments, advances or expenditures made by Lender pursuant to the
Note or this Mortgage or any other agreement, document, or instrument securing
the payment of the indebtedness evidenced by the Note (the Note, this Mortgage,
and any other documents evidencing or securing the indebtedness evidenced by the
Note or executed in connection therewith, and any modification, renewal, and/or
extension thereof, are hereinafter collectively referred to as the "LOAN
DOCUMENTS"), and (ii) the prompt performance of each and every covenant,
condition, and agreement now or hereafter arising contained in the Loan
Documents of Borrower or any "PRINCIPAL" (as defined in the Note). All payment
obligations of Borrower or any Principal are hereinafter sometimes collectively
referred to as the "INDEBTEDNESS" and all other obligations of Borrower or any
Principal hereunder and under any of the Loan Documents are hereinafter
sometimes collectively referred to as the "OBLIGATIONS"; and
C. The Schedule of Defined Terms appearing immediately before this page
is incorporated into this Mortgage by reference with the same force and effect
as if contained in the body hereof.
NOW, THEREFORE, TO SECURE TO LENDER the repayment of the Indebtedness
and the performance of the Obligations, Borrower has mortgaged, given, granted,
bargained, sold, alienated, enfeoffed, conveyed, confirmed, warranted, pledged,
assigned, hypothecated and granted and by these presents does hereby irrevocably
mortgage, give, bargain, sell, alien, enfeoff, convey, confirm, warrant, pledge,
assign, hypothecate and grant a security interest in and to Lender the following
described property and all proceeds thereof (which property is hereinafter
sometimes collectively referred to as the "PROPERTY"):
A. The Land;
B. All improvements of every nature whatsoever now or hereafter
situated on the Land and owned by Borrower (the "IMPROVEMENTS"), and all
machinery, furnishings, equipment, fixtures, mechanical systems and other
personal property now or hereafter owned by Borrower and used in connection with
the operation of the Improvements;
C. All easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments and appurtenances of
any nature whatsoever, in any way belonging, relating or pertaining to the Land
and the Improvements and the reversion and reversions, remainder and remainders,
and all land lying in the bed of any street, road or avenue, opened or proposed,
in front of or adjoining the Land, to the center line thereof and all the
estates, rights, titles, interests, dower and rights of dower, curtesy and
rights of curtesy, property, possession, claim and demand whatsoever, both at
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law and in equity, of Borrower of, in and to the Land and the Improvements and
every part and parcel thereof, with the appurtenances thereto;
D. All agreements affecting the use, enjoyment or occupancy of the Land
and/or Improvements now or hereafter entered into (the "LEASES"), including any
and all guaranties of such Leases, and the immediate and continuing right to
collect all rents, income, receipts, royalties, profits, issues, service
reimbursements, fees, accounts receivables, revenues and prepayments of any of
the same from or related to the Land and/or Improvements from time to time
accruing under the Leases and/or the operation of the Land and/or Improvements
(the "RENTS"), reserving to Borrower, however, so long as no "EVENT OF DEFAULT"
(hereinafter defined) has occurred hereunder which has not been cured to the
written satisfaction of Lender, a revocable license to receive and apply the
Rents in accordance with the terms and conditions of PARAGRAPH 13 of this
Mortgage;
E. The Personal Property;
F. All awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Land and the Improvements,
whether from the exercise of the right of eminent domain or condemnation
(including but not limited to any transfer made in lieu of or in anticipation of
the exercise of said rights), or for a change of grade, or for any other injury
to or decrease in the value of the Land and Improvements;
G. All proceeds of and any unearned premiums on any insurance policies
covering the Property, including, without limitation, the right to receive and
apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Property;
H. All proceeds of the conversion, voluntary or involuntary, of any of
the foregoing including, without limitation, proceeds of insurance and
condemnation awards, into cash or liquidation claims; and
I. Any and all proceeds and products of any of the foregoing and any
and all other security and collateral of any nature whatsoever, now or hereafter
given for the repayment of the Indebtedness and the performance of Borrower's
obligations under the Loan Documents, including (without limitation) the
Replacement Reserve and all other escrows established with Lender by Borrower.
TO HAVE AND TO HOLD the Property and all parts thereof, together with
the rents, issues, profits and proceeds thereof, unto Lender to its own proper
use, benefit, and advantage forever, subject, however, to the terms, covenants,
and conditions herein.
At no time shall the principal amount of the Indebtedness, not
including sums advanced in accordance herewith to protect the security of this
Mortgage, exceed TWO HUNDRED PERCENT (200%) of the original amount of the Note.
Borrower covenants and agrees with Lender as follows:
1. PAYMENT OF INDEBTEDNESS; PERFORMANCE OF OBLIGATIONS. Borrower shall
promptly pay when due the Indebtedness and shall promptly perform all
Obligations.
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2. TAXES AND OTHER OBLIGATIONS. Borrower shall pay, when due, and
before any interest, collection fees or penalties shall accrue, all taxes,
assessments, fines, impositions and other charges and obligations, including
charges and obligations for any present or future repairs or improvements made
on the Property, or for any other goods or services or utilities furnished to
the Property, which may become a lien on or charge against the Property prior to
this Mortgage, subject, however, to Borrower's right to contest such lien or
charge upon the posting of security reasonably satisfactory to Lender so long as
such contest stays the enforcement or collection of such lien or charge.
Notwithstanding the foregoing, during an MHC Control Period and provided
Borrower continues to timely make the payments required by this Section, the
security required to be posted under the preceding sentence to contest "such
lien or charge" shall be the amount, if any, required by the applicable
governmental authority to stay the enforcement or collection of such lien or
charge. Should Borrower fail to make such payments, Lender may, at its option
and at the expense of Borrower, pay the amounts due for the account of Borrower.
Upon the request of Lender, Borrower shall immediately furnish to Lender all
notices of amounts due and receipts evidencing payment. Borrower shall promptly
notify Lender of any lien on all or any part of the Property and shall promptly
discharge any unpermitted lien or encumbrance.
3. RESERVES FOR TAXES/INSURANCE/REPLACEMENT RESERVE.
(a) Borrower shall pay to Lender, at the time of and in addition to the
monthly installments of principal and/or interest due under the Note, a sum
equal to 1/12 of the amount estimated by Lender from time to time to be
sufficient to enable Lender to pay at least 30 days before they become due and
payable, all taxes, assessments and other similar charges ("TAX ITEMS") levied
against the Property. So long as no Event of Default exists hereunder, Lender
shall apply the sums so paid by Borrower to pay such Tax Items. These sums may
be commingled with the general funds of Lender, and no interest shall be payable
thereon nor shall these sums constitute trust funds. If such amount on deposit
with Lender is insufficient to fully pay such Tax Items, Borrower shall, within
10 days following notice at any time from Lender, deposit such additional sum as
may be required for the full payment of such Tax Items. Borrower hereby grants
Lender a first priority security interest in such funds and Borrower shall
execute any other documents and take any other actions reasonably necessary to
provide Lender with such a perfected security interest. Upon the Maturity Date,
the moneys then remaining on deposit with Lender or its agent shall, at Lender's
option, be applied against the Indebtedness. The obligation of Borrower to pay
such Tax Items is not affected or modified by the provisions of this paragraph.
Notwithstanding the foregoing, Lender shall defer and suspend Borrower's
requirement to make monthly escrow deposits for the payment of Tax Items
provided all of the following conditions remain satisfied as determined by
Lender in its reasonable discretion:
(i) No Event of Default has occurred which has not been cured to
the written satisfaction of Lender;
(ii) The sole fee simple owner of the Property is the initial
Borrower named above and (A) MHC Operating Limited Partnership remains
as Principal, or (B) Principal is a successor entity as described in
Section 15(e); and
(iii) All Tax Items are paid on or before the date such Tax Items
are due and written evidence of such payment is provided to Lender no
later than thirty (30) days after the due date.
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If Lender determines that any of the foregoing conditions are not
satisfied, then Lender may in its sole and absolute discretion, in addition to
its other remedies under applicable law and the Loan Documents with respect to
an Event of Default, (i) collect from Borrower, and Borrower shall upon demand
pay to Lender, a sum sufficient to pay one full year of Tax Items, and (ii)
require that Borrower immediately make monthly deposits and pay any deficiency
to fund the reserve provided herein. Borrower's failure to take such actions
shall constitute an Event of Default hereunder. In the event that upon the
occurrence of an Event of Default Lender has elected to collect from Borrower
one full year of Tax Items as set forth in (i) above and Lender shall have
accepted in writing a cure of the Event of Default, then Lender shall disburse
to Borrower any sum it is holding under this Section 3(a) in excess of the
amount necessary to make the next due payment of Tax Items.
(b) Borrower shall pay to Lender, at the time of and in addition to the
monthly installments of principal and/or interest due under the Note, a sum
equal to 1/12 of the amount estimated by Lender from time to time to be
sufficient to enable Lender to pay at least 30 days before they become due and
payable, all insurance premiums due for the renewal of the coverage afforded by
the insurance policies required hereunder ("INSURANCE PREMIUMS") upon the
expiration thereof. So long as no Event of Default exists hereunder, Lender
shall apply the sums so paid by Borrower to pay such Insurance Premiums. These
sums may be commingled with the general funds of Lender, and no interest shall
be payable thereon nor shall these sums constitute trust funds. If such amount
on deposit with Lender is insufficient to fully pay such Insurance Premiums,
Borrower shall, within 10 days following notice at any time from Lender, deposit
such additional sum as may be required for the full payment of such Insurance
Premiums. Borrower hereby grants Lender a first priority security interest in
such funds and Borrower shall execute any other documents and take any other
actions reasonably necessary to provide Lender with such a perfected security
interest. Upon the Maturity Date, the moneys then remaining on deposit with
Lender or its agent shall, at Lender's option, be applied against the
Indebtedness. The obligation of Borrower to pay such insurance premiums is not
affected or modified by the provisions of this paragraph. Notwithstanding the
foregoing, Lender shall defer and suspend Borrower's requirement to make monthly
escrow deposits for the payment of the Insurance Premiums provided all of the
following conditions remain satisfied as determined by Lender in its sole
discretion:
(i) No Event of Default has occurred which has not been cured to
the written satisfaction of Lender;
(ii) The sole fee simple owner of the Property is the initial
Borrower named above, and either: (i) MHC Operating Limited Partnership
remains as Principal, or (ii) the Principal is a successor entity to
MHC Operating Limited Partnership as described in Section 15(e);
(iii) Borrower provides Lender with written evidence that the
Insurance Premiums have been paid no less than 30 days after any policy
renewal date and that Lender is included in all policies of insurance
as an "additional insured"; and
(iv) The Property is covered by a blanket policy of insurance
complying in all respects with the terms hereof and otherwise
acceptable to the Lender.
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In the event that any of the foregoing conditions are not satisfied,
Lender shall have the right, which may be exercised in its sole and absolute
discretion, to (i) collect from Borrower (and Borrower hereby agrees to pay) the
required annual Insurance Premiums upon demand, and (ii) require Borrower to
make monthly deposits into the insurance reserve created by this Section for the
remainder of the Loan term in accordance with Lender's standard requirements.
Borrower's failure to comply with any of the foregoing requirements shall
constitute an Event of Default hereunder. In the event that upon the occurrence
of an Event of Default Beneficiary has elected to collect from Borrower the
required annual Insurance Premiums as set forth in (i) above and Lender shall
have accepted in writing a cure of the Event of Default, then Lender shall
disburse to Borrower any sum it is holding under this Section 3(b) in excess of
the amount necessary to make the next due payment of Insurance Premiums.
(c) After the occurrence and during the continuance of an Event of
Default, at the time of and in addition to the monthly installments of principal
and/or interest due under the Note, Borrower shall pay to Lender the Replacement
Reserve Monthly Payment (such payments shall be referred to as "REPLACEMENT
RESERVE". The Replacement Reserve may be commingled with the general funds of
Lender and no interest shall be payable thereon nor shall such Replacement
Reserve constitute trust funds. The funds contained in the Replacement Reserve
shall be utilized by Borrower solely for capital improvements approved in
advance by Lender (which approval shall not be unreasonably withheld or delayed)
or may be applied to the Indebtedness as set forth herein. Capital Improvements
reimbursable hereunder shall include, without limitation the following:
improvements and/or repair of the pool, roadway paving, electrical work to pads
and hook-ups, roof, heating, ventilation and air conditioning work to clubhouse
and furnace work for pool. Provided Lender elects not to apply the Replacement
Reserve Monthly Payment to the Indebtedness because an Event of Default has
occurred, Lender shall reimburse Borrower from the Replacement Reserve for the
actual cost of such approved capital improvements upon Borrower's providing
Lender with paid receipts, lien waivers, photographs and other documentation
deemed reasonably necessary by Lender with minimum draws of $5,000.00, which
shall occur no more frequently than once per month. Upon the Maturity Date, the
moneys then remaining on deposit with Lender or its agent shall, at Lender's
option, be applied against the Indebtedness. For any individual capital
improvement item exceeding $10,000.00 and for which Borrower seeks payment from
the Replacement Reserve, Borrower may have Lender issue a joint check to
Borrower and the individual or entity being paid. In the event of such joint
disbursement, Borrower shall not be required to have paid for such work prior to
requesting reimbursement. Borrower hereby grants Lender a first priority
security interest in the Replacement Reserve and Borrower shall execute any
other documents and take any other actions necessary to provide Lender with such
a perfected security interest in the Replacement Reserve.
(d) Upon the occurrence of an Event of Default, Lender may apply any
amounts then held in any of the Reserves described above to the payment of the
Indebtedness in such order as Lender may elect in its sole and absolute
discretion.
4. USE OF PROPERTY. Unless required by applicable law, Borrower shall
not permit changes in the use of any part of the Property from the use existing
at the time this Mortgage was executed, which use Borrower represents and
warrants is limited to the Permitted Use and related uses. Borrower shall not
initiate or acquiesce in a change in the zoning classification of the Property
without Lender's prior written consent.
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5. INSURANCE AND CONDEMNATION. Borrower shall keep the Improvements
insured, and shall maintain during the entire term of this Mortgage,
comprehensive general liability coverage and such other coverages reasonably
requested by Lender, by carrier(s), in amounts and in form at all times
satisfactory to Lender, which carrier(s), amounts and form shall not be changed
without the prior written consent of Lender, which consent shall not be
unreasonably withheld or delayed. All such policies of insurance shall be issued
by insurers qualified under the laws of the state in which the Land is located,
duly authorized and licensed to transact business in such state and reflecting a
Best's Rating satisfactory to Lender. Borrower shall maintain all coverages on
the Property as are required by Lender at the closing of the Loan, and upon 45
days' written notice to Borrower, all other coverages as may be deemed
reasonably necessary by Lender from time to time during the term of the Loan.
Notwithstanding the foregoing, Borrower shall not be required to maintain
terrorism insurance upon the Property. Any failure by Lender to insist on full
compliance with all of the above insurance requirements at closing does not
constitute a waiver of Lender's right to subsequently require full compliance
with these requirements. Unless Borrower provides Lender with evidence of the
insurance coverage required by this Mortgage, Lender may upon written notice to
Borrower purchase insurance at Borrower's expense to protect Lender's interests
in the Property and to maintain the insurance required by this Mortgage. This
insurance may, but need not, protect Borrower's interests. The coverage
purchased by Lender may not pay any claim made by Borrower or any claim that is
made against Borrower in connection with the Property or any required insurance
policy. Borrower may later cancel any insurance purchased by Lender, but only
after providing Lender with evidence that Borrower has obtained insurance as
required by this Mortgage. If Lender purchases insurance for the Property or
insurance otherwise required by this Mortgage, Borrower will be responsible for
the costs of that insurance, including interest and other charges imposed by
Lender in connection with the placement of the insurance, until the effective
date of the cancellation or expiration of the insurance. The costs of the
insurance may be added to the Indebtedness. The costs of the insurance may be
more than the cost of insurance Borrower is able to obtain on its own.
Notwithstanding the foregoing, in the event that the cost to Borrower to obtain
and maintain business interruption insurance for the period requested by Lender
is excessive (as determined by Lender in its sole discretion), Lender will
accept a policy of business interruption which shall provide coverage for not
less than twelve (12) months of debt service coverage.
In case of loss or damage by fire or other casualty, Borrower shall
give prompt written notice thereof to the insurance carrier(s) and to Lender.
Borrower shall promptly notify Lender of any action or proceeding
relating to any condemnation or other taking, whether direct or indirect, of the
Property, or part thereof, and Borrower shall appear in and prosecute any such
action or proceeding unless otherwise directed by Lender in writing. The
proceeds of any award, payment or claim for damages, direct or consequential, in
connection with any condemnation or other taking, whether direct or indirect, of
the Property, or part thereof, or for conveyances in lieu of condemnation, are
hereby assigned to and shall be paid to Lender as further security for the
payment of the Indebtedness and performance of the Obligations and applied as
set forth herein.
Provided no Event of Default then exists hereunder, the net insurance
proceeds and net proceeds of any condemnation award (in each case after
deducting only Lender's reasonable costs and expenses, if any, in collecting the
same) shall be made available for the restoration or
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repair of the Property if, in Lender's reasonable judgment (a) restoration or
repair and the continued operation of the Property can be restored to
substantially the same condition as existed prior to the casualty or
condemnation, (b) the value of Lender's security is not reduced, (c) the loss or
condemnation, as applicable, does not occur in the 6-month period preceding the
stated Maturity Date and Lender's independent consultant certifies that the
restoration of the Property can be completed at least 90 days prior to the
Maturity Date, and (d) Borrower deposits with Lender an amount, in cash, which
Lender, in its reasonable discretion, determines is necessary, in addition to
the net insurance proceeds or net proceeds of any condemnation award, as
applicable, to pay in full the cost of the restoration or repair.
Notwithstanding the foregoing, it shall be a condition precedent to any
disbursement of insurance proceeds held by Lender hereunder that Lender shall
have approved (x) all plans and specifications for any proposed repair or
restoration, (y) the construction schedule and (z) the identity of the architect
and general contractor for all restoration that exceeds the greater of $250,000
or 2.0% of the Loan Amount, in the aggregate. Lender may establish other
conditions it deems reasonably necessary to assure the work is fully completed
in a good and workmanlike manner free of all liens or claims by reason thereof.
Borrower's deposits made pursuant to this paragraph shall be used before the net
insurance proceeds or net proceeds of any condemnation award, as applicable, for
such restoration or repair. If the net insurance proceeds or net proceeds of any
condemnation award, as applicable, are made available for restoration or repair,
such work shall be completed by Borrower in an expeditious and diligent fashion,
and in compliance with all applicable laws, rules and regulations. At Lender's
option, the net insurance proceeds or net proceeds of any condemnation award, as
applicable, shall be disbursed pursuant to a construction escrow acceptable to
Lender. If following the final payments for the completion of such restoration
or repair there are any net insurance proceeds or net proceeds of any
condemnation award, as applicable, remaining, such proceeds shall be paid to
Borrower if no Event of Default has occurred which has not been cured to the
written satisfaction of Lender. If an Event of Default then exists, or any of
the conditions set forth in subparagraphs (a) through (d) of this PARAGRAPH 5
have not been met or satisfied, the net insurance proceeds or net proceeds of
any condemnation award, as applicable, shall be applied to the Indebtedness,
whether or not due and payable, with any excess paid to Borrower, and, if so
applied, no Prepayment Fee attributable to such application shall be due.
6. PRESERVATION AND MAINTENANCE OF PROPERTY. Borrower (a) shall not
commit waste or permit impairment or deterioration of the Property; ordinary
wear and tear excepted; (b) shall not abandon the Property; (c) shall keep the
Property in good repair and restore or repair promptly, in a good and
workmanlike manner, all or any part of the Property to the equivalent of its
original condition, ordinary wear and tear excepted, or such other condition as
Lender may approve in writing, upon any damage or loss thereto, if net insurance
proceeds are made available to cover in whole or in part the costs of such
restoration or repair; (d) shall comply with all applicable laws, ordinances,
regulations and requirements of any governmental body, and all requirements of
any documents applicable to the Property; (e) shall provide for management of
the Property by Borrower or by a property manager reasonably satisfactory to
Lender pursuant to a contract in form and substance reasonably satisfactory to
Lender; (f) shall not take any steps whatsoever to convert the Property, or any
portion thereof, to a condominium or cooperative form of management; (g) shall
not install or permit to be installed on the Property any underground storage
tank or above-ground storage tank without the written consent of Lender which
shall not be unreasonably withheld or delayed provided Borrower provides
evidence to Lender that said tanks shall be installed, maintained and operated
in accordance with all
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applicable laws, ordinances and regulations; and (h) shall give notice in
writing to Lender of and, unless otherwise directed in writing by Lender, appear
in and defend any action or proceeding purporting to affect the Property, the
security granted by the Loan Documents or the rights or powers of Lender.
Without Lender's written consent, neither Borrower nor any tenant or other
person shall remove, demolish or alter any Improvement or any fixture,
equipment, machinery or appliance in or on the Land and owned or leased by
Borrower except when incident to the replacement of fixtures, equipment,
machinery and appliances with items of like kind.
Notwithstanding the foregoing and during an MHC Control Period,
Lender's prior approval with respect to alterations shall only be required in
connection with any alterations to any Improvements, exclusive of alterations to
tenant spaces required under any Lease, (a) that may have a material adverse
effect on the Property, or (b) that, together with any other alterations
undertaken at the same time (including any related alterations, improvements or
replacements), are reasonably anticipated to have a cost in excess of five
percent (5.0%) of the Loan Amount (the "ALTERATION THRESHOLD"). During an MHC
Control Period, Lender shall not unreasonably withhold its consent in connection
with any alterations in excess of the Alteration Threshold, provided that Lender
shall have received (a) a current Appraisal of the Property (or a letter update
to the Appraisal delivered in connection with the closing of the Loan), (b) a
certificate from Borrower and (c) such other evidence that would be satisfactory
to a prudent institutional mortgage loan lender each indicating that such
alterations will not impair (as security for the Loan) the fair market value of
the real estate collateral portion of the Property, as determined by a prudent
institutional secondary market lender. If the total unpaid amounts incurred and
to be incurred with respect to such alterations to the Improvements shall at any
time exceed the Alteration Threshold and Lender's consent in connection with any
such alterations is granted, Borrower shall promptly deliver to Lender as
security for the payment of such amounts and as additional security for
Borrower's obligations under the Loan Documents any of the following: (i) cash,
(ii) direct non-callable obligations of the United States of America or other
obligations which are "government securities" within the meaning of Section
2(a)(16) of the Investment Company Act of 1940, to the extent acceptable to the
applicable Rating Agencies, (iii) other securities acceptable to Lender and the
Rating Agencies, or (iv) a completion bond, provided that such completion bond
is acceptable to the Lender and the Rating Agencies. Such security shall be in
an amount equal to the excess of the total unpaid amounts incurred and to be
incurred with respect to such alterations to the Improvements over the
Alteration Threshold.
7. PROTECTION OF LENDER'S SECURITY; LEASES. If Borrower fails to pay
the Indebtedness or perform the Obligations beyond any applicable notice and
cure periods, or if any action or proceeding is commenced which affects the
Property or Lender, at Lender's option, Lender may make such appearances,
disburse such sums and take such action as Lender deems necessary, in its sole
discretion, to protect the Property or Lender's interest herein, including entry
upon the Property to make repairs and perform environmental tests and studies.
Any amounts disbursed by Lender pursuant to this PARAGRAPH 7 (including
reasonable attorneys' costs and expenses), with interest thereon at the "DEFAULT
RATE" (defined in the Note) from the date of disbursement, shall become
additional Indebtedness of Borrower secured by the Loan Documents and shall be
due and payable on demand. Nothing contained in this PARAGRAPH 7 shall require
Lender to incur any expense or take any action hereunder.
Borrower shall not be authorized to enter into any ground lease of the
Property (except the lease of individual pad sites at the Property in the
ordinary course of business), without
- 9 -
Lender's prior written approval. Borrower shall not, without Lender's prior
written consent, modify, amend, surrender or terminate any Lease, which approval
shall not be unreasonably withheld or delayed. All Leases of space in the
Property shall be on the form of lease previously approved by Lender with
tenants and for a use acceptable to Lender. All Leases of space in the Property
executed or renewed after the date hereof must be approved by Lender prior to
the execution thereof by Borrower. Provided no Event of Default has occurred
hereunder, Borrower may, in the ordinary course of business and in accordance
with all applicable laws, terminate an individual mobile home pad lease at the
Property without Lender's consent if the terms thereof have been breached by the
tenant thereunder. Additionally, during an MHC Control Period, the Borrower may
terminate leases at the Property without the requirement that the lease be
violated provided, (i) the lease termination is made in accordance with good
business judgment and in compliance with all applicable laws, ordinances and
regulations, (ii) the lease termination does not materially impair the Property,
(iii) no Event of Default has occurred and is continuing, (iv) the lease
termination does not impair the Borrower's ability to repay the Loan, (v) the
leases sought to be terminated pursuant to this sentence do not exceed 5.0% of
the number of pad site leases at the Property, and (vi) if more than five leases
are terminated within 90 days pursuant to this sentence at the Property, written
notice of such termination is provided to Lender within 15 days from the date of
such termination.
Notwithstanding anything contained herein to the contrary, Borrower may
enter into a proposed Lease (including the amendment, renewal or extension of an
existing Lease (a "RENEWAL LEASE") without the prior written consent of Lender,
provided such proposed Lease or Renewal Lease (i) provides for rental rates and
terms comparable to existing local market rates and terms as of the date such
Lease or Renewal Lease is executed by Borrower (unless, in the case of a Renewal
Lease, the rent payable during such renewal, or a formula or other method to
compute such rent, is provided for in the original Lease), (ii) is an
arms-length transaction with a bona fide, independent third party tenant (other
than any on-site property manager or other employees of the manager of the
Property), (iii) is written on the standard form of lease for the Property
previously approved by Lender (excluding any oral leases entered into in the
ordinary course of business), and (iv) is for the same use as the current use of
the Property. Borrower expressly understands that any and all new or proposed
leases or Renewal Leases are included in the definition of "LEASE" or "LEASES"
as such terms may be used throughout this Mortgage or any of the other Loan
Documents.
8. INSPECTION. Lender and its agents and designees may make or cause to
be made reasonable entries upon and inspections of the Property, including for
performing any environmental inspections and testing of the Property, and
inspections of Borrower's books, records, and contracts at all reasonable times
upon reasonable advance notice, which notice may be given in writing or orally.
Borrower shall cooperate with Lender and its agents and designees with respect
to all such inspections, including any related to the sale or potential sale of
all or any portion of the Loan by Lender and any securitization or potential
securitization involving the Loan.
9. BOOKS AND RECORDS. Borrower shall keep and maintain at all times at
Borrower's address stated above, or such other place as Lender may approve in
writing, complete and accurate books of accounts and records adequate to reflect
correctly the results of the operation of the Property and copies of all written
contracts, Leases and other instruments affecting the Property.
- 10 -
10. FINANCIAL STATEMENTS. Borrower shall furnish to Lender, within 30
days after the end of each calendar month until the earlier of (i) the first 12
calendar months following the closing of the loan (the "LOAN") evidenced by the
Note, or (ii) the Loan is securitized as described in PARAGRAPH 43 below,
monthly operating statements and a rent roll prepared by Borrower in the
ordinary course of business each in reasonable detail and dated and certified as
true and complete by Borrower or its general partner or chief financial officer.
Borrower shall furnish to Lender, within 45 days after the end of each fiscal
quarter of the operation of the business of Borrower operating statements and a
rent roll prepared by Borrower in the ordinary course of business, each in
reasonable detail, prepared in accordance with sound accounting practices
(relating to the real estate industry) prepared on a consistent basis and
certified as true and complete by Borrower or its general partner, manager,
controller or chief financial officer. Borrower shall also furnish to Lender
within 120 days after the end of each calendar year of Borrower, financial
statements, operating statements and a rent roll prepared by Borrower in the
ordinary course of business for the twelve month period ending December 31, each
in reasonable detail, prepared on a consistent basis and in accordance with
sound accounting practices (relating to the real estate industry) certified as
true and complete by Borrower or its general partner, manager/managing member,
controller or chief financial officer, as the case may be. Additionally,
Borrower shall cause Equity LifeStyle Properties, Inc and Principal to deliver
certified financial statements within 120 days after the end of each fiscal
year, unless the financial statements of Equity LifeStyle Properties, Inc., and
Principal are consolidated, in which case Borrower shall provide the
consolidated financial statements. All of the information required by Lender in
this paragraph must be in a form acceptable to Lender in its reasonable
discretion. If Borrower fails to timely furnish Lender with any of the financial
information and reports set forth in this paragraph within the required time
periods, Lender shall have the right, upon five (5) business days written notice
to Borrower, acting in its sole discretion, to hire a certified public
accounting firm acceptable to Lender, to prepare such financial information and
reports, on an audited basis. The costs and expenses of such accounting firm
shall be paid by Borrower on demand and, to the extent advanced by Lender
become, with interest thereon from the date advanced by Lender at the Default
Rate, additional Indebtedness of Borrower secured by the Loan Documents.
11. HAZARDOUS SUBSTANCES. Borrower covenants and agrees that it (a)
shall not use, generate, store, or allow to be generated, stored or used, any
"HAZARDOUS SUBSTANCES" (hereinafter defined) on the Property, except in the
ordinary course of Borrower's business and in accordance with all "ENVIRONMENTAL
LAWS" (hereinafter defined), (b) shall at all times maintain the Property in
full compliance with all applicable Environmental Laws, including timely
remediating the Property if and when required, and (c) shall use commercially
reasonable efforts to cause compliance by all tenants and sub-tenants on the
Property with Borrower's covenants and agreements contained in this PARAGRAPH
11. Borrower shall promptly notify Lender in writing of (i) any investigation,
claim or other proceeding by any party caused or threatened in connection with
any Hazardous Substances on the Property, or the failure or alleged failure of
the Property to comply with any applicable Environmental Laws, or (ii)
Borrower's discovery of any condition on or in the vicinity of the Property to
fail to comply with applicable Environmental Laws.
The term "ENVIRONMENTAL LAWS" shall include any present and future
applicable federal, state and/or local law, statute, ordinance, code, rule,
regulation, license, authorization, decision, order, injunction or decree and/or
other governmental directive or requirement, as well as
- 11 -
common law, which pertains or relates to health, safety or the environment
(including but not limited to, ground or air or water or noise pollution or
contamination, and underground or above ground tanks) and shall include, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), the Resource Conservation and Recovery Act
of 1976, as amended ("RCRA"), and any state or federal lien or superlien or
environmental clean-up statutes, and regulations, rules, guidelines, or
standards promulgated pursuant thereto all as amended from time to time. The
term "HAZARDOUS SUBSTANCES" shall include any substance, whether solid, liquid
or gaseous: (i) which is listed, defined or regulated as a "hazardous
substance," "hazardous waste" or "solid waste," or otherwise classified as
hazardous or toxic, in or pursuant to any Environmental Laws; or (ii) which is
or contains asbestos, radon, any polychlorinated biphenyl, urea formaldehyde
foam insulation, explosive or radioactive material, lead paint, or motor fuel or
other petroleum hydrocarbons; or (iii) which causes or poses a threat to cause a
contamination or nuisance on the Property or any adjacent property or a hazard
to the environment or to the health or safety of persons on or about the
Property.
12. REPRESENTATIONS AND COVENANTS.
(a) If Borrower is a corporation, it represents that it is a
corporation duly organized, existing and in good standing under the laws of its
state of incorporation, that it is duly qualified and in good standing under the
laws of the state where the Land is located, and that the execution and delivery
of the Loan Documents and the performance of the obligations thereunder are
within Borrower's corporate powers, have been duly authorized by all necessary
action of its board of directors, and do not contravene the terms of its
articles of incorporation or by-laws.
(b) If Borrower is a general or limited partnership or a limited
liability company, it represents that it is duly formed, organized and existing
in the state of its formation, that it is qualified to do business under the
laws of the state where the Land is located, and that the execution and delivery
of the Loan Documents and the performance of the obligations thereunder do not
conflict with any provision of Borrower's partnership agreement or operating
agreement, as applicable, and all other certificates and agreements governing
Borrower, and have been duly authorized by all necessary action of its partners
or members.
(c) Borrower represents that (i) the execution and delivery of the Loan
Documents, the payment of the Indebtedness, and the performance of the
Obligations do not violate any law or conflict with any agreement by which
Borrower is bound, or any court order by which Borrower is bound, (ii) no
consent or approval of any governmental authority or any third party is required
for the execution or delivery of the Loan Documents, the payment of
Indebtedness, and the performance of the Obligations, and (iii) the Loan
Documents are valid and binding agreements, enforceable in accordance with their
terms.
(d) Borrower represents that as of the date hereof (i) it is lawfully
seized with fee simple title in the estate hereby conveyed; (ii) it has the
right to mortgage, convey, assign and grant a first security interest in the
Property; (iii) the Property is unencumbered, and Borrower will warrant and
defend title to the Property against all claims and demands, subject to
easements and restrictions listed in a schedule of exceptions to coverage in the
title insurance policy accepted by Lender insuring Lender's interest in the
Property; and (iv) it has no operations, assets or activities other than the
Property.
- 12 -
(e) Borrower represents and covenants that except as expressly
disclosed in any written materials furnished by Borrower to Lender or as
disclosed in any Physical Condition Report or Environmental Report received by
Lender in connection with the closing of the Loan, to the best of Borrower's
knowledge, information and belief (i) all material permits, licenses,
authorizations, approvals, and certificates, including certificates of
completion and occupancy permits, required by law, ordinance or regulation have
been obtained and are and shall remain in full force and effect; and (ii)
Borrower and the use and occupancy of the Land and all improvements thereon are
and shall remain in compliance with all laws, regulations, and ordinances,
including without limitation, all restrictive covenants of record and zoning and
building laws.
(f) Based upon review of the survey accepted by Lender in connection
with the closing of the Loan and to the best of Borrower's knowledge,
information and belief, Borrower represents that all of the improvements on the
Land lie wholly within the boundaries of and building line restrictions relating
to the Land and no improvements located on adjoining lands encroach upon the
Land so as to adversely affect the value or marketability of the Property,
except those which are insured against by the title insurance policy accepted by
Lender insuring Lender's interest in the Property or depicted on the survey
accepted by Borrower.
(g) Borrower represents that the Property is served by public
utilities, water and sewer (or septic facilities) and services in the
surrounding community, including police and fire protection, public
transportation (if any), refuse removal, public education, and enforcement of
safety codes which are adequate in relation to the premises and location on
which the Property is located (taking into account the Permitted Use of the
Property).
(h) Except as disclosed in any Environmental Report or Property
Condition Report accepted by Lender in connection with the closing of the Loan,
all liquid and solid waste disposal, septic and sewer systems located on the
Property are in good and safe condition and repair and in compliance with all
applicable laws.
(i) To Borrower's knowledge, information and belief upon due inquiry,
Borrower represents that the Property has parking and other amenities necessary
for the operation of the business currently conducted thereon which are adequate
in relation to the premises and location on which the Property is located.
(j) Borrower represents that the Property is a contiguous parcel and a
separate tax parcel(s), and there are no delinquent taxes or other outstanding
charges adversely affecting the Property.
(k) Borrower represents that no action, omission, misrepresentation,
negligence, fraud or similar occurrence has taken place on the part of any
person that would reasonably be expected to result in the failure or impairment
of full and timely coverage under any insurance policies providing coverage for
the Property.
(l) None of Borrower, any Principal, or any other holder of a direct or
indirect legal or beneficial interest in Borrower is or will be, held, directly
or indirectly, by a "foreign corporation," "foreign partnership," "foreign
trust," "foreign estate," "foreign person," "affiliate" of a "foreign person" or
a "United States intermediary" of a "foreign person" within the meaning
- 13 -
of IRC Sections 897 and 1445, the Foreign Investments in Real Property Tax Act
of 1980, the International Investment and Trade in Services Survey Act, the
Agricultural Foreign Investment Disclosure Act of 1978, the regulations
promulgated pursuant to such acts or any amendments to such acts.
(m) None of Borrower or any Principal is insolvent, and there has been
no (i) assignment made for the benefit of the creditors of any of them, (ii)
appointment of a receiver for any of them or for the properties of any of them,
or (iii) any bankruptcy, reorganization, or liquidation proceeding instituted by
or against any of them.
(n) All information in the application for the Loan submitted to Lender
(the "LOAN APPLICATION") and all financial statements, rent rolls, reports,
certificates and other documents submitted by Borrower or Borrower's
representatives in connection with the Loan Application or in satisfaction of
the terms thereof, are accurate, complete and correct in all material respects.
There has been no material adverse change in the representations made or
information heretofore supplied by or on behalf of Borrower or any Principal in
connection with the Loan or the Loan Application as to Borrower, any Principal,
or the Property. There has been no adverse change in any condition, fact,
circumstance or event that would make any such representations or information
inaccurate, incomplete or otherwise misleading.
(o) Except as listed on EXHIBIT C hereto, (i) there is no litigation,
arbitration, condemnation proceeding or other proceeding or governmental
investigation pending or, to Borrower's knowledge, threatened against or
relating to Borrower or the Property; and (ii) there is no litigation,
arbitration, condemnation proceeding or other proceeding or governmental
investigation pending or, to Borrower's knowledge, threatened against or
relating to Principal which could have a material adverse impact on Principal's
ability to perform its obligations under the Loan Documents.
(p) The proceeds evidenced by the Note will be used by Borrower solely
and exclusively for proper business purposes and will not be used for the
purchase or carrying of registered equity securities within the purview and
operation of any regulation issued by the Board of Governors of the Federal
Reserve System or for the purpose of releasing or retiring any indebtedness
which was originally incurred for any such purpose.
(q) Borrower covenants to obtain and maintain in full force and effect,
and abide by and satisfy the material terms and conditions of, all material
permits, licenses, registrations and other authorizations with or granted by any
governmental authorities that may be required from time to time with respect to
the performance of its obligations under this Mortgage.
(r) Borrower covenants that Lender shall be allowed to advertise in the
various news or financial media that Lender has provided the Loan to Borrower,
but Borrower shall not do so without Lender's prior written permission, unless
disclosure of such information is required by applicable law.
(s) Borrower represents and covenants that it does not have and will
not incur any other indebtedness other than (i) the Indebtedness, and (ii)
unsecured trade payables (and not evidenced by a promissory note) related to the
ownership and operation of the Property and incurred in the ordinary course of
business and which shall not exceed 120 days in duration from
- 14 -
the date such trade payables are first incurred by Borrower. Notwithstanding the
foregoing the member of the Borrower and its constituent owners (but not the
Borrower) shall have the right to enter into unsecured intercompany loans
between affiliates in connection with its tax structuring provided, (a) such
loans are made by MHC Operating Limited Partnership or a wholly owned subsidiary
of MHC Operating Limited Partnership, as lender ("MHC LENDER"), (b) the MHC
Lender is prohibited from assigning or transferring such loans and the loan
document(s) evidencing such unsecured loans expressly so provide, and (c) copies
of such loan documents are provided to Lender within ten (10) days after
execution.
(t) Borrower represents that Borrower and all Principals have filed all
federal, state, county, municipal, and city income and other tax returns
required to have been filed by them and have paid all taxes and related
liabilities which have become due pursuant to such returns or pursuant to any
assessments received by them. Neither Borrower nor any Principal knows of any
basis for any additional assessment in respect to any such taxes and related
liabilities for prior years. Borrower confirms that its federal tax
identification number is 20-3796698.
(u) Borrower covenants that if at any time the United States of
America, any State thereof or any subdivision of any such State shall require
revenue or other stamps to be affixed to the Note or this Mortgage, or impose
any other tax or charge on the same, Borrower will pay for the same, with
interest and penalties thereon, if any.
(v) As of the date hereof, Borrower represents that Borrower and
Principals have no valid offset, defense, counterclaim, abatement or right to
rescission with respect to any of the Loan Documents.
Except as otherwise provided herein, each and all of the
representations, covenants and obligations of Borrower shall survive the
execution and delivery of the Loan Documents and shall continue in full force
and effect until the Indebtedness is paid in full.
13. LEASE ASSIGNMENT. Borrower acknowledges that, concurrently herewith
Borrower is delivering to Lender, as additional security for the repayment of
the Loan, an Assignment of Leases and Rents (the "ASSIGNMENT") pursuant to which
Borrower has assigned to Lender all of Borrower's right, title and interest in
the Leases and the Rents and income from the Property. All of the provisions of
the Assignment are hereby incorporated herein as if fully set forth at length in
the text of this Mortgage. Borrower agrees to abide by all of the provisions of
the Assignment.
14. ESTOPPEL CERTIFICATES.
(a) Borrower shall, within 10 business days after Lender's request,
furnish Lender with a written statement, duly acknowledged, setting forth the
sums secured by the Loan Documents and any right of set-off, counterclaim or
other defense which exists against such sums and the Obligations.
(b) If the Property includes commercial property, Borrower shall use
reasonable efforts to deliver to Lender upon request, tenant estoppel
certificates from each material commercial tenant at the Property in form and
substance reasonably satisfactory to Lender provided that Borrower shall not be
required to deliver such certificates more frequently than two (2) times in any
calendar year.
- 15 -
15. TRANSFERS OF THE PROPERTY OR OWNERSHIP INTERESTS IN BORROWER;
ASSUMPTION; DUE ON SALE/ENCUMBRANCE.
(a) NO SALE/ENCUMBRANCE. Borrower agrees that Borrower shall not,
without the prior written consent of Lender, sell, convey, mortgage, grant,
bargain, encumber, pledge, assign, or otherwise transfer the Property or any
interest therein any part thereof or permit the Property or any part thereof to
be sold, conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned,
or otherwise transferred except: (i) pursuant to Leases of space in the Property
to tenants in accordance with the provisions of PARAGRAPH 7; (ii) in connection
with a condemnation action or other taking; or (iii) the disposal of personalty
that is obsolete or no longer used or useful, so long as such personalty is
replaced with similar items of comparable value and utility and in which Lender
has a first lien and mortgage. In addition, Borrower shall not allow, without
the prior written consent of Lender, any pledge of any ownership interests in
Borrower.
(b) SALE/ENCUMBRANCE DEFINED. A sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment, or transfer of the Property within the
meaning of this PARAGRAPH 15 shall be deemed to include, but not limited to the
following: (i) an installment sales agreement wherein Borrower agrees to sell
the Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Borrower leasing all or a substantial part of the Property for
other than actual occupancy by a space tenant thereunder or a sale, assignment
or other transfer of, or the grant of a mortgage in, Borrower's right, title and
interest in and to any Leases or any Rents; (iii) a sale or transfer of the
ownership interests (including beneficial interests) of any Principal in
Borrower that would result in the Principal, MHC Trust or Equity LifeStyle
Properties, Inc., owning directly or indirectly less than 25% of the total
ownership interests (including beneficial interests) in Borrower; or (iv) a
pledge of any of the ownership interests in Borrower.
(c) ASSUMPTION. Notwithstanding the foregoing provisions of this
PARAGRAPH 15, a sale of the Property and assumption of this Loan (hereinafter,
an "ASSUMPTION") in its entirety prohibited by the foregoing may be permitted
during the term of the Note to any entity, subject to Lender's prior written
consent, which shall not be unreasonably withheld or delayed, provided that each
of the following terms and conditions are satisfied:
(i) no Event of Default has occurred and is then continuing
hereunder or under any of the Loan Documents;
(ii) Borrower gives Lender written notice of the terms of such
prospective Assumption not less than sixty (60) days before the date on
which such Assumption is scheduled to take place and, concurrently
therewith, gives Lender all such information concerning the proposed
transferee of the Loan (hereinafter, a "TRANSFEREE") as Lender would
reasonably require in evaluating an initial extension of credit to a
borrower on a non-recourse basis. Lender shall have the right to
approve or disapprove the proposed Transferee. In determining whether
to give or withhold its approval of the proposed Transferee, Lender
shall consider the Transferee's experience in owning and operating a
facility similar to the Property, the Transferee's entity structure,
the Transferee's financial strength, the Transferee's general business
standing and the Transferee's relationships and experience with
contractors, vendors, tenants, lenders and other
- 16 -
business entities; provided, however, that notwithstanding Lender's
agreement to consider the foregoing factors in determining whether to
give or withhold such approval, such approval shall be given or
withheld based upon what Lender determines to be commercially
reasonable and, if given, may be given subject to such conditions as
Lender may deem reasonably appropriate, but no such conditions shall
result in an increase in the interest rate or monthly payment under the
Note or reduce the term thereof;
(iii) Borrower shall pay Lender (A) in connection with such proposed
Assumption, all reasonable out-of-pocket costs and expenses, including,
without limitation, reasonable attorneys' fees incurred by Lender and
any rating agency approval fees (whether such transfer is approved or
rejected), plus (B) concurrently with the closing of such Assumption, a
nonrefundable assumption fee in an amount equal to 1% of the then
outstanding principal balance of the Note at the time of such
Assumption;
(iv) the Transferee assumes and agrees to pay the Indebtedness and
perform the Obligations secured hereby subject to PARAGRAPH 11 of the
Note, and prior to or concurrently with the closing of such Assumption,
the Transferee executes, without any cost or expense to Lender, such
documents and agreements as Lender shall reasonably require to evidence
and effectuate said assumption and deliver such legal opinions as
Lender may reasonably require;
(v) Transferee executes, without any cost or expense to Lender, new
financing statements or financing statement amendments and any
additional documents reasonably requested by Lender;
(vi) Borrower delivers to Lender, without any cost or expense to
Lender, hazard insurance endorsements or certificates and other similar
materials as Lender may deem reasonably necessary at the time of the
Assumption, all in form and substance satisfactory to Lender,
including, without limitation, an endorsement or endorsements to
Lender's loan title insurance policy insuring the lien of this
Mortgage, extending the effective date of such policy to the date of
execution and delivery of the assumption agreement referenced above in
SUBPARAGRAPH 15(C)(IV), with no additional exceptions added to such
policy, except for items consented to by Lender or permitted under this
Mortgage, and insuring that fee simple title to the Property is vested
in the Transferee;
(vii) Borrower executes and delivers to Lender, without any cost or
expense to Lender, a release of Lender, its officers, directors,
employees and agents, from all claims and liability relating to the
transactions evidenced by the other security documents through and
including the date of the closing of the Assumption, which agreement
shall be in form and substance satisfactory to Lender and shall be
binding upon the Transferee;
(viii) subject to the provisions of PARAGRAPH 11 of the Note, such
Assumption is not construed so as to relieve Borrower of any personal
liability under the Note or any of the Loan Documents for any act or
events occurring or obligations arising prior to or simultaneously with
the closing of such Assumption (excluding payment of the principal
amount of the Note and interest accrued thereon) and Borrower executes,
without any cost or expense to Lender, such documents and agreements as
Lender shall reasonably require to evidence and effectuate the
ratification of such personal liability;
- 17 -
(ix) such Assumption is not construed as to relieve any current
Guarantors or Indemnitors (as defined in the Loan Documents) of their
obligations under any guarantees or indemnity agreements executed in
connection with the Note, and each such current Guarantors or
Indemnitors execute, without any cost or expense to Lender, such
documents and agreements as Lender shall reasonably require to evidence
and effectuate the ratification of each such guarantee and indemnity
agreement, provided that if the Transferee or a party associated with
the Transferee approved by Lender in its reasonable discretion assumes
the obligations of the current Guarantors or Indemnitors under their
guarantees or indemnity agreements and the Transferee or such party
associated with the Transferee if applicable, executes, without any
cost or expense to Lender, a new guarantee and/or indemnity agreement
in form and substance satisfactory to Lender, then Lender shall release
the current Guarantors or Indemnitors from all obligations first
arising under their guarantees or indemnity agreements after the
closing of such Assumption;
(x) the Transferee shall finish, if the Transferee is a corporation,
partnership or other entity, all appropriate papers evidencing the
Transferee's capacity in good standing and the qualification of the
signers to execute the assumption of the Obligations, which paper shall
include certified copies of all documents relating to the organization
and formation of the Transferee and of the entities, if any, which are
partners, members or shareholders of the Transferee. The Transferee and
such constituent partners, members or shareholders of the Transferee
(as the case may be) as Lender shall require, shall be single purpose,
bankruptcy remote entities, whose formation documents shall be approved
by counsel to Lender;
(xi) the Transferee shall assume the obligations of Borrower under
the management agreements, if any, pertaining to the Property or enter
into a new management agreement with a new property manager in form and
substance reasonably agreeable to Lender;
(xii) the Transferee shall furnish an opinion of counsel
satisfactory to Lender and its counsel stating that (A) the
Transferee's formation documents provide proof for the matters
described in SUBPARAGRAPH (X) above, (B) the assets of the Borrower
will not be consolidated with the assets of any other entity having an
interest in, or affiliation with, the Transferee, in the event of a
bankruptcy or insolvency of any such entity but only if required by any
rating agency after the securitization of the Loan, (C) the assumption
of the Obligations has been duly authorized, executed and delivered and
the Loan Documents are valid, binding and enforceable against the
Transferee in accordance with their terms, (D) the Transferee and any
entity which is a controlling stockholder, general partner or managing
member of the Transferee have been duly organized and are in good
standing and in existence, and (E) with respect to such other matters
as Lender or any applicable rating agency may reasonably request;
(xiii) if the Loan has previously been securitized pursuant to
PARAGRAPH 43 Lender shall have received evidence in writing from the
rating agencies to the effect the proposed transfer will not result in
a downgrade, qualification, reduction or withdrawal or any rating
initially assigned or to be assigned in a Secondary Market Transaction,
to the extent such letter is available from the rating agencies. For
purposes hereof, a
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"SECONDARY MARKET TRANSACTION" shall be (A) any sale of this Mortgage,
Note and Loan Documents to one or more investors as a whole loan; (B) a
participation of the Note to one or more investors; (C) any deposit of
this Mortgage, Note and Loan Documents with a trust or other entity
which may sell certificates or other instruments to investors
evidencing an ownership interest in the assets of such trust or other
entity, or (D) any other sale or transfer of the Note or any interest
therein to one or more investors; and
(xiv) Reserves required by SECTION 3 have been fully funded.
(d) LENDER'S RIGHTS. Except as provided in SUBPARAGRAPH 15(C) above,
Lender reserves the right to condition the consent required hereunder upon a
modification of the terms hereof and on assumption of the Note, this Mortgage
and the Loan Documents as so modified by the proposed Transferee, payment of an
assumption fee, and all of Lender's expenses incurred in connection with such
transfer, the approval by a rating agency of the proposed transferee, the
proposed transferee's continued compliance with the covenants set forth in this
Mortgage, including, without limitation, the covenants contained in PARAGRAPH
17, or such other conditions as Lender shall determine in its sole discretion to
be in the interest of Lender. All of Lender's reasonable out-of-pocket expenses
incurred shall be payable by Borrower whether or not Lender consents to the
Assumption. Lender shall not be required to demonstrate any actual impairment of
its security or any increased risk of default hereunder in order to declare the
Note immediately due and payable upon Borrower's prohibited sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property without Lender's consent. This provision shall apply to every sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of the Property regardless of whether voluntary or not, or whether or
not Lender has consented to any previous sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment, or transfer of the Property.
(e) PERMITTED TRANSFERS OF BENEFICIAL INTERESTS IN BORROWER.
Notwithstanding the foregoing, the following transfers will be permitted without
Lender's consent, rating agency confirmation or payment of assumption fees: (1)
sales, transfers or issuance of interests in MHC Trust or Equity LifeStyle
Properties, Inc. (with its successors, "ELS"), provided that ELS is publicly
traded on any national stock exchange, (2) direct or indirect transfers of
interests in the Borrower among ELS, MHC Trust, Principal and their affiliates,
(3) sales, transfers or issuance of limited partnership interests in Principal,
provided that ELS, MHC Trust or Subsidiary (defined below) remains the
controlling general partner of Principal, and (4) the merger or consolidation of
ELS, MHC Trust or Principal without regard to whether ELS, MHC Trust or
Principal is the surviving entity. For purposes hereof, the term Subsidiary
shall mean an entity: (i) which is controlled by ELS, (iii) the ownership
interests of which are owned 95% by ELS, and (iii) which is the controlling
general partner of Principal.
(f) AFFILIATE TRANSFERS OF UTILITY FACILITIES SERVING PROPERTY.
Notwithstanding the foregoing provisions of PARAGRAPH 15, Lender shall not
unreasonably withhold consent to a transfer (by deed or ground lease for nominal
consideration, but at all times subject to the terms and conditions of this
Mortgage and any UCC-1 Financing Statement filed by Lender concerning the
Property) of the utility facilities servicing the Property to an Affiliate (as
defined in Section 17 below) of Borrower (i) in which ELS owns, directly or
indirectly, at least a 70% ownership interest or (ii) in which Principal owns,
directly or indirectly, at least a 99% ownership interest (an "AFFILIATE UTILITY
TRANSFER" with the transferee being an "AFFILIATE UTILITY TRANSFEREE")
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provided that, among other things, each of the following conditions are
satisfied with respect to each Affiliate Utility Transfer:
(i) no Event of Default has occurred;
(ii) the Affiliate Utility Transferee assumes the Indebtedness and
all Obligations by Assumption; thereby becoming, on a joint and several
basis with Borrower, a co-obligor and co-mortgagee under the Loan,
(iii) Borrower shall have (a) delivered written notice to Lender of
the terms of such Affiliate Utility Transfer not less than sixty (60)
days before the date on which such transfer and assumption is scheduled
to close and, concurrently therewith, all such information concerning
the proposed Affiliate Utility Transferee as Lender shall reasonably
require, (b) delivered an ALTA/ASCM Survey to Lender depicting the
property sought to be conveyed, leased or transferred concerning the
Affiliate Utility Transfer;
(iv) Borrower shall have paid to Lender all reasonable out-of-pocket
costs and expenses, including reasonable attorneys' fees, incurred by
Lender in connection with the Affiliate Utility Transfer;
(v) Borrower and the Affiliate Utility Transferee shall have
executed an agreement in form and substance reasonably acceptable to
Lender providing for the use by Borrower of all of the utility
facilities conveyed to Affiliate Utility Transferee;
(vi) Borrower shall deliver an attorney opinion letter to Lender in
form and substance and issued by counsel reasonably acceptable to
Lender providing, among other things, that (a) the Affiliate Utility
Transfer complies with all applicable laws, ordinances and regulations
including but not limited to any applicable subdivision, zoning,
building and utility regulatory laws applicable to the Property, and
(b) such other matters that Lender shall reasonably require;
(vii) All remaining terms and conditions of Section 15(c) have been
satisfied, except the provisions of 15(c)(iii)(B); and
(viii) MHC Operating Limited Partnership shall remain as the
Principal and shall execute such documents and instruments as requested
by Lender to reaffirm its obligations under the Guaranty and Hazardous
Substance Indemnification Agreement executed simultaneously herewith;
and
(ix) During all times that any portion of the Indebtedness remains
outstanding, the utility facilities permitted to be transferred
hereunder shall be owned by the title owner of the Property or an
Affiliate Utility Transferee.
Nothing herein shall be construed to release the Borrower from any
term, condition or provision of the Loan Documents upon an Affiliate Utility
Transfer.
(g) RECIPROCAL EASEMENT AGREEMENTS. Lender shall not unreasonably
withhold its consent to Borrower entering into a Reciprocal Easement Agreement
("REA") with an Affiliate
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(defined in Section 17 below) owning property adjacent to the Property with
respect to the use of certain common amenities and facilities at the Property,
provided that (A) any such REA would not (i) have a material adverse affect on
the Property or the Borrower, (ii) impose any material obligations on the
Borrower, (B) the terms of any such REA provide that Borrower shall be paid fair
market value for the use of such amenities and/or facilities under such REA, (C)
sufficient utilities, facilities and other amenities shall continue to be
available to and serve the Property, and (D) Borrower pays all reasonable costs
and expenses incurred by Lender in reviewing such REA including but not limited
to reasonable attorneys fees.
(h) MINOR EASEMENTS. Notwithstanding the foregoing provisions of this
SECTION 15, Lender shall not unreasonably withhold its consent to, (a) the grant
of a utility easement serving the Property to a publicly operated utility or
cable television company, or (b) the grant of an easement related to expansion
or widening of roadways, provided that such easement is in form and substance
reasonably acceptable to Lender and doesn't materially and adversely affect the
access, use, value or marketability of the Property or adversely affect
Borrower's ability to pay the Indebtedness as it comes due, (collectively,
"MINOR EASEMENTS") provided all of the following conditions are satisfied: (i)
at least thirty (30) days prior to the grant of a Minor Easement, Borrower
causes to be submitted to Lender all information required by Lender to evaluate
the Minor Easement including a copy thereof and a survey of the Minor Easement,
(ii) no Event of Default has occurred hereunder, (iii) Borrower pays to Lender,
on demand, all reasonable out-of-pocket costs and expenses (including reasonable
attorney's fees) incurred by Lender in connection with reviewing Borrower's
request, (iv) the granting of the Minor Easement does not materially adversely
affect Borrower's access to the Property or the use of any easements or
amenities which benefit the Property; (v) the granting of such easement or sale
does not result in the loss of the use of any units, parking or amenities at the
Property; and (vi) no consideration is paid to Borrower or any Affiliate
concerning the granting of the Minor Easement. Borrower shall be responsible for
preparing all such documents and shall pay within ten (10) days from demand any
reasonable, out-of-pocket costs incurred by Lender in its review, such expenses
not to exceed $2,500.
16. NO ADDITIONAL LIENS. Borrower covenants not to execute any
mortgage, security agreement, assignment of leases and rents or other agreement
granting a lien (except the liens granted to Lender by the Loan Documents) or,
except as set forth in PARAGRAPH 2 above, take or fail to take any other action
which would result in a lien against the interest of Borrower in the Property
without the prior written consent of Lender.
17. SINGLE ASSET ENTITY. Borrower shall not hold or acquire, directly
or indirectly, any ownership interest (legal or equitable) in any real or
personal property other than the Property, or become a shareholder of or a
member or partner in any entity which acquires any property other than the
Property, until such time as the Indebtedness has been fully repaid and all
Obligations are satisfied. Borrower's articles of incorporation, partnership
agreement or operating agreement, as applicable, limit its purpose to the
acquisition, operation, financing and disposition of the Property, and such
purposes shall not be amended without the prior written consent of Lender.
Borrower covenants:
(a) To maintain its assets, accounts, books, records, financial
statements, stationery, invoices, and checks separate from and not commingled
with any of those of any other person or entity except that Borrower's financial
position and operating results may be included in the
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consolidated financial statements of an Affiliate (defined below), provided that
such consolidated financial statements indicate that Borrower is a separate
legal entity and that it maintains separate books and records;
(b) To conduct its own business in its own name, pay its own
liabilities out of its own funds (including paying salaries of its own
employees), allocate fairly and reasonably any overhead for shared employees and
office space, and to maintain an arm's length relationship with its affiliates;
(c) Not incur any indebtedness, secured or unsecured, direct or
indirect, absolute or contingent (including guaranteeing any obligation), other
than (i) the Loan, and (ii) unsecured trade payables (and not evidenced by a
promissory note) related to the ownership and operation of the Property and
incurred in the ordinary course of business and which shall not exceed at any
time three percent (3%) of the outstanding principal amount of the Indebtedness
and which shall not exceed 120 days in duration from the date such trade
payables are first incurred by the Company. Notwithstanding the foregoing the
Principal and its constituent owners (but not the Borrower) shall have the right
to enter into unsecured intercompany loans between Affiliates in connection with
its tax structuring provided, (a) such loans are made by the MHC Lender, (b) the
MHC Lender is prohibited from assigning or transferring such loans and the loan
document(s) evidencing such unsecured loans expressly so provide, and (c) copies
of such loan documents are provided to Lender within ten (10) days after
execution.
(d) To hold itself out as a separate entity, correct any known
misunderstanding regarding its separate identity, and observe all organizational
formalities;
(e) Not to guarantee or become obligated for the debts of any other
entity or person or hold out its credits as being available to satisfy the
obligations of others, including not acquiring obligations or securities of its
partners, members or shareholders;
(f) Not to pledge its assets for the benefit of any other entity or
person or make any loans or advances to any person or entity;
(g) Not to enter into any contract or agreement with any Principal or
any party which is directly or indirectly controlling, controlled by or under
common control with Borrower or Principal (an "AFFILIATE"), except upon terms
and conditions that are intrinsically fair and substantially similar to those
that would be available on an arms-length basis with third parties other than
any Principal or Affiliate;
(h) Borrower will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and maintain a
sufficient number of employees in light of its contemplated business operations;
(i) Neither Borrower nor any constituent party of Borrower will seek
the dissolution or winding up, in whole or in part, of Borrower, nor will
Borrower merge with or be consolidated into any other entity;
(j) Borrower has and will maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any constituent party of Borrower, Affiliate,
Guarantor or any other person; and
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(k) Borrower does not own any asset, conduct any business or operate or
engage in any business or activity other than ownership and operation of the
Property. Borrower has no debts or existing obligations other than normal
accounts payable in the ordinary course of business, this Mortgage, and the Loan
it secures. Any other indebtedness or other obligation of Borrower has been paid
in full prior to or through application of proceeds from the funding of the
Loan.
Borrower agrees that its Controlling Entity (defined below) shall also
be subject to all of the requirements contained in this Section, except that its
organizational documents shall prohibit it from engaging in any business or
activity other than the operation and maintenance of the Property, and
activities incidental thereto, or acquiring or owning any material assets other
than its interest in Borrower. The term "CONTROLLING ENTITY" shall mean any
managing member, general partner or similar controlling entity in Borrower, but
shall not mean the sole member of a Delaware single member limited liability
company.
18. BORROWER AND LIEN NOT RELEASED. Without affecting the liability of
Borrower or any other person liable for the payment of the Indebtedness, and
without affecting the lien or charge of this Mortgage as security for the
payment of the Indebtedness, Lender may, from time to time and without notice to
any junior lien holder or holder of any right or other interest in and to the
Property: (a) release any person so liable, (b) waive or modify any provision of
this Mortgage or the other Loan Documents or grant other indulgences, (c)
release all or any part of the Property, (d) take additional security for any
obligation herein mentioned, (e) subordinate the lien or charge of this
Mortgage, (f) consent to the granting of any easement, or (g) consent to any map
or plan of the Property.
19. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT AND FIXTURE FILING. This
Mortgage shall constitute a security agreement and fixture filing pursuant to
the Uniform Commercial Code in effect from time to time for any of the items
specified herein as part of the Property which, under applicable law, may be
subject to a security interest pursuant to the Uniform Commercial Code
(collectively, the "COLLATERAL"), and Borrower hereby grants Lender a security
interest in the Collateral. Any reproduction of this Mortgage or of any other
security agreement or financing statement shall be sufficient as a financing
statement. In addition, Borrower agrees to execute and deliver to Lender any
financing statements, as well as extensions, renewals and amendments thereof,
and reproductions of this Mortgage in such form as Lender may require to perfect
a security interest with respect to said items. Borrower shall pay all costs of
filing such financing statements and any extensions, renewals, amendments and
releases thereof, and shall pay all reasonable costs and expenses of any record
searches for financing statements Lender may reasonably require. Borrower shall,
at Lender's request, at any time and from time to time, execute and deliver to
Lender such financing statements, amendments and other documents and do such
acts as Lender deems necessary in order to establish and maintain valid,
attached and perfected first security interests in the Collateral in favor of
Lender, free and clear of all liens, claims and rights of third parties
whatsoever. Borrower hereby irrevocably authorizes Lender at any time, and from
time to time, to execute and file in any jurisdiction any initial financing
statements and amendments thereto that (a) indicate the Collateral (i) as all
assets of the Borrower or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of Article 9
of the Uniform Commercial Code of the jurisdiction wherein such financing
statement or amendment is filed, or (ii) as being of an equal or lesser scope or
within greater detail, and (b) contain any other
- 23 -
information required by Section 5 of Article 9 of the Uniform Commercial Code of
the jurisdiction wherein such financing statement or amendment is filed
regarding the sufficiency or filing office acceptance of any financing statement
or amendment, including (i) whether the Borrower is an organization, the type of
organization and any organization identification number issued to the Borrower,
and (ii) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of real property to which the Collateral relates.
Borrower agrees to furnish any such information to Lender promptly upon request.
Borrower further ratifies and affirms its authorization for any financing
statements and/or amendments thereto, executed and filed by Lender in any
jurisdiction prior to the date of this Mortgage. If an Event of Default shall
occur which has been cured to the written satisfaction of Lender, Lender, in
addition to any other rights and remedies which it may have, shall have and may
exercise immediately and without demand, any and all rights and remedies granted
to a secured party upon default under the Uniform Commercial Code, including
without limitation, the right to take possession of the Collateral or any part
thereof, and to take such other measures as Lender may deem necessary for the
care, protection and preservation of the Collateral. Upon request or demand of
Lender, Borrower shall, at its expense, assemble the Collateral and make it
available to Lender at a convenient place acceptable to Lender. Borrower shall
pay to Lender on demand any and all expenses, including legal expenses and
attorneys' fees, incurred or paid by Lender in protecting the interest in the
Collateral and in enforcing the rights hereunder with respect to the Collateral.
Any notice of sale, disposition or other intended action by Lender, with respect
to the Collateral, sent to Borrower in accordance with the provisions hereof at
least ten (10) days prior to such action, shall constitute commercially
reasonable notice to Borrower. Capitalized words and phrases used herein in this
PARAGRAPH 19 and not otherwise defined herein shall have the respective meanings
assigned to such terms in either: (i) Article 9 of the Uniform Commercial Code
as in force in the State of Florida at the time the financing statement was
filed by Lender, or (ii) Article 9 as in force at any relevant time in the State
of Florida, the meaning to be ascribed thereto with respect to any particular
item of property shall be that under the more encompassing of the two
definitions.
FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE THE FOLLOWING INFORMATION
IS FURNISHED:
a. The name and address of the record owner of the real estate
described in this instrument is:
MHC Eldorado Village, LLC, a Delaware limited liability company
c/o Equity LifeStyle Properties, Inc.
Two North Riverside Plaza, Suite 800
Chicago, Illinois 60606
b. The name and address of the debtor (Mortgagor) is:
MHC Eldorado Village, LLC, a Delaware limited liability company
c/o Equity LifeStyle Properties, Inc.
Two North Riverside Plaza, Suite 800
Chicago, Illinois 60606
- 24 -
c. The name and address of the secured party (Mortgagee) is:
Bank of America, N.A.
214 North Tryon Street
Charlotte, North Carolina 28255
d. Information concerning the security interest evidenced by this
instrument maybe obtained from the secured party at its address above.
e. This document covers assets and personal property which are or are
to become fixtures.
20. EVENTS OF DEFAULT; ACCELERATION OF INDEBTEDNESS; REMEDIES. The
occurrence of any one or more of the following events shall constitute an "EVENT
OF DEFAULT" under this Mortgage:
(a) failure of Borrower to pay, within 5 days of the due date, any of
the Indebtedness, including any payment due under the Note; or
(b) failure of Borrower to strictly comply with PARAGRAPHS 15, 16 and
17 of this Mortgage and such breach is not cured within ten (10) days of the
occurrence thereof; or
(c) failure of Borrower, within 10 days after notice and demand to
satisfy each and every obligation contained in SECTIONS 10 and 11 of this
Mortgage; or
(d) a petition under any Chapter of Title 11 of the United States Code
or any similar law or regulation is filed by or against Borrower or any
Principal (and in the case of an involuntary petition in bankruptcy, such
petition is not discharged within 60 days of its filing), or a custodian,
receiver or trustee for any of the Property is appointed, or Borrower or any
Principal makes an assignment for the benefit of creditors, or any of them are
adjudged insolvent by any state or federal court of competent jurisdiction, or
an attachment or execution is levied against any of the Property; or
(e) the occurrence of an "EVENT OF DEFAULT" under and as defined in any
other Loan Document; or
(f) Borrower is in default in the payment of any indebtedness (other
than the Indebtedness) and such default is declared and is not cured within the
time, if any, specified therefor in any agreement governing the same; or
(g) any statement, report or certificate made or delivered to Lender by
Borrower or any Principal is not materially true and complete, or any
representation or warranty made or delivered to Lender by Borrower or any
Principal is not materially true and correct; or
(h) seizure or forfeiture of the Property, or any portion thereof, or
Borrower's interest therein, resulting from criminal wrongdoing or other
unlawful action of Borrower, its affiliates, or any tenant in the Property under
any federal, state or local law; or
(i) failure of Borrower, within 30 days after notice and demand, to
satisfy each and every Obligation, other than those set forth in the
subparagraphs above; provided, however, if such failure to satisfy such
Obligation cannot by its nature be cured within 30 days, and if
- 25 -
Borrower commences to cure such failure promptly after written notice thereof
and thereafter diligently pursues the curing thereof (and then in all events
cures such failure within 90 days after the original notice thereof), Borrower
shall not be in default hereunder during such period of diligent curing.
Upon the occurrence of an Event of Default, the Indebtedness, at the
option of the Lender, shall become immediately due and payable without notice to
Borrower; and Lender shall be entitled to immediately exercise and pursue any or
all of the rights and remedies contained in this Mortgage and any other Loan
Document or otherwise available at law or in equity. Each remedy provided in the
Loan Documents is distinct and cumulative to all other rights or remedies under
the Loan Documents or afforded by law or equity, and may be exercised
concurrently, independently, or successively, in any order whatsoever.
21. ENTRY; FORECLOSURE; REMEDIES.
(a) Upon the occurrence of any Event of Default, Lender may take such
action, without notice or demand, as it deems advisable to protect and enforce
its rights against Borrower and in and to the Property, including, without
limitation, the following actions:
(i) declare the entire Indebtedness to be immediately due and
payable;
(ii) institute an action to foreclose this Mortgage as to the total
amount declared due and payable by Lender, together with all of the
costs, expenses and disbursements of Lender, including, without
limitation, a reasonable fee for Lender's attorneys at all trial and
appellate levels, as hereinafter set forth. The Property may be sold in
one parcel, several parcels or groups of parcels, and Lender shall be
entitled to bid at the sale and, if Lender is the highest bidder for
the Property or any part or parts thereof, Lender shall be entitled to
purchase the same. Lender shall have the right, after paying or
accounting for all costs of said sale or sales, to credit the amount of
the bid at the foreclosure sale upon the amount of the Indebtedness (in
the order of priority set forth below) in lieu of cash payment. In case
of a foreclosure and sale of the Property and of the application of the
proceeds of said sale to the Indebtedness hereby secured, the Lender
shall be entitled to enforce payment of and to receive all amounts then
remaining due and unpaid upon the Indebtedness from any and all
security for said amounts and from any and all persons or entities
(including the Borrower) under any agreement, guaranty or collateral
undertaking to pay any portion of said amount. The proceeds of any
foreclosure sale of the Property, as well as any and all Leases and
Rents realized therefrom, shall be distributed and applied in the
following order of priority to the extent of the funds available
therefrom:
1. First, to the payment of all costs and expenses of taking
possession of the Property and of holding, using, leasing, repairing,
improving and selling the same, including, without limitation,
reasonable attorneys', accountants' receivers' and brokers' fees, all
taxes, insurance premiums and other charges and all liens, security
interests and other rights and interests equal or superior to the lien
and security interest of this Mortgage;
- 26 -
2. Second, to the payment of all Late Charges (as defined in
the Note) and accrued but unpaid interest on the Note;
3. Third, to the payment of the outstanding principal balance
of the Note; and
4. Fourth, to the Borrower.
Upon any such foreclosure sale pursuant to judicial proceedings, the
Lender may bid for and purchase the Property and, upon compliance with the terms
of said sale, may hold, retain and possess and dispose of the Property in its
own absolute right without further accountability to the Borrower.
In any civil action to foreclose the lien hereof, there shall be
allowed and included as part of the Indebtedness in the order of judgment for
foreclosure and sale all expenditures and expenses which may be paid or incurred
by or on behalf of the Lender for (without limitation) reasonable attorneys'
fees, appraisers' fees, outlays for documentary and expert evidence,
stenographers' charges, publication costs, and costs (which may be estimated as
to items to be expended after entry of said order or judgment) of procuring all
such abstracts of title, title searches and examinations, title insurance
policies and similar data and insurance with respect to the title as the Lender
may deem reasonably necessary either to prosecute such civil action or to
evidence to bidders at any sale which may be had pursuant to such order or
judgment the true condition of the title to, or the value of, the Property.
(iii) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for
the partial foreclosure of this Mortgage for the portion of the
Indebtedness then due and payable, subject to the continuing lien of
this Mortgage for the balance of the Indebtedness not then due;
(iv) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein, in the Note or the Loan Documents;
(v) recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Mortgage;
(vi) apply for the appointment of a trustee, receiver, liquidator or
conservator of the Property, without notice and without regard for the
adequacy of the security for the Indebtedness or the solvency of
Borrower, any Guarantor or of any person, firm or other entity liable
for the payment of the Indebtedness;
(vii) enforce Lender's interest in the Leases and Rents and enter
into or upon the Property, either personally or by its agents, nominees
or attorneys and dispossess Borrower and its agents and servants
therefrom, and thereupon Lender may: (A) use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and every
part of the Property and conduct the business thereat; (B) complete any
construction on the Property in such manner and form as Lender deems
advisable; (C) make alterations, additions, renewals, replacements and
improvements to or on the Property; (D) exercise all rights and powers
of Borrower with respect to the Property,
- 27 -
whether in the name of Borrower or otherwise, including, without
limitation, the right to make, cancel, enforce or modify Leases, obtain
and evict tenants, and demand, sue for, collect and receive all
earnings, revenues, rents, issues, profits and other income of the
Property and every part thereof; and (B) apply the receipts from the
Property to the payment of the Indebtedness, after deducting therefrom
all expenses (including reasonable attorney fees) incurred in
connection with the aforesaid operations and all amounts necessary to
pay the taxes, assessments, insurance premiums and other charges in
connection with the Property, as well as just and reasonable
compensation for the services of Lender, its counsel, agents and
employees; or
(viii) pursue such other rights and remedies as may then be
available at law and in equity. To the extent permitted presently or in
the future by laws of the State in which the Land and Improvements are
located, Lender may institute a proceeding or proceedings, judicial, or
nonjudicial, by advertisement or otherwise, for the complete or partial
foreclosure of this Mortgage or the complete or partial sale of the
Property under a power of sale which power is hereby granted to Lender.
In the event of a sale, by foreclosure or otherwise, of less than all
of the Property, this Mortgage shall continue as a lien on the remaining portion
of the Property.
(b) No recovery of any judgment by Lender and no levy of an execution
under any judgment upon the Property or upon any other property of Borrower
shall affect in any manner or to any extent the lien of this Mortgage upon the
Property or any part thereof, or any liens, rights, powers or remedies of Lender
hereunder, but such liens, rights, powers and remedies of Lender shall continue
unimpaired as before.
(c) In the event the Note is placed in the hands of an attorney for
collection (whether suit be brought or not), or in case Lender shall become a
party, either as plaintiff or as defendant, in any suit or legal proceeding in
relation to the Property or the liens created in this Mortgage or the other Loan
Documents, or for the recovery or protection of the Indebtedness, Borrower and
any successor in title to the Property shall repay on demand all costs and
expenses incurred by Lender arising therefrom, including reasonable attorneys'
and paralegals' fees (whether incurred on the trial or at any appellate level),
with interest on such costs and expenses at the Default Rate until paid,
together with all costs and expenses, including attorneys' and paralegals' fees,
incurred by Lender in connection with any bankruptcy proceeding involving any
person liable under or on account of the Note, or any person who might now have
or hereafter acquire a record interest or other interest in the Property,
whether or not there exists any default hereunder, including, by way of example
but not by way of limitation, all costs and expenses, including reasonable
attorneys' and paralegals' fees, 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 any objections thereto, confirmation of plans of reorganization
and any 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 cases
affecting the Property, this Note, this Mortgage or any other Loan Documents, or
the enforcement of any of the same, together with interest on such costs and
expenses at the Default Rate until paid.
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(d) Lender may release, regardless of consideration and without the
necessity for any notice to or a consent by any person or entity, any part of
the Property without, as to the remainder, in any way impairing, affecting,
subordinating or releasing the lien or security interests created in or
evidenced by this Mortgage or the other Loan Documents or their stature as a
first and prior liens and security interests in and to the Property. For payment
of the Indebtedness, Lender may resort to any security in such order and manner
as Lender may elect.
(e) Lender shall have all rights, remedies and recourses granted in
this Mortgage and the other Loan Documents or available at law or equity
(including the Uniform Commercial Code), which rights: (i) shall be cumulative
and concurrent; (ii) may be pursued separately, successively or concurrently
against Borrower or others obligated under the Note, this Mortgage and the other
Loan Documents, or against the Property, or against any one or more of them, at
the sole discretion of Lender; (iii) may be exercised as often as occasion
therefore shall arise and exercise or failure to exercise any of them shall not
be construed as a waiver or release thereof or of any other right, remedy or
recourse; and (iv) are intended to be, and shall be, nonexclusive. No
enforcement of any rights, remedies or recourse under the Note, this Mortgage
and the other Loan Documents or otherwise at law or equity shall be deemed to
cure any Event of Default. The remedies provided for in this Mortgage may be
exercised in any order.
22. EXPENDITURES AND EXPENSES. Borrower acknowledges and confirms that
Lender may impose certain reasonable administrative processing and/or commitment
fees in connection with (a) the extension, renewal, modification, amendment and
termination of its loans, (b) the release or substitution of collateral
therefor, (c) obtaining certain consents, waivers and approvals with respect to
the Property, or (d) the review of any Lease or proposed Lease or the
preparation or review of any subordination, non-disturbance and attornment
agreement. In addition, in any civil action to foreclose the lien hereof or
otherwise enforce Lender's rights, there shall be allowed and included as
additional Indebtedness in the order or judgment for foreclosure and sale or
other order all expenditures and expenses which may be paid or incurred by or on
behalf of Lender including reasonable attorneys' fees, costs and expenses,
receiver's fees, costs and expenses, appraiser's fees, engineers' fees, outlays
for documentary and expert evidence, stenographers' charges, publication costs,
and costs (which may be estimates as to items to be expended after entry of said
order or judgment) of procuring all such abstracts of title, title searches and
examination, title insurance policies, torrens' certificates and similar data
and assurances with respect to the title as Lender may deem reasonably necessary
either to prosecute such civil action or to evidence to bidders at any sale
which may be had pursuant to such order or judgment the true condition of the
title to, or the value of, the Property (all said expenditures and expenses are
hereinafter collectively referred to as the "REIMBURSABLE EXPENSES"). All
Reimbursable Expenses, and such reasonable costs, expenses and fees as may be
incurred by Lender at any time or times hereafter in the protection of the
Property, in enforcing the Obligations, and/or the maintenance of the lien
established by any of the Loan Documents, including accountants' and reasonable
attorneys' fees, costs and expenses in any advice, litigation, or proceeding
affecting the Loan Documents or the Property, whether instituted by Lender,
Borrower or any other party, or in preparation for the commencement or defense
of any (action or proceeding or threatened action or proceeding, shall be
immediately due and payable to Lender by Borrower, with interest thereon at the
Default Rate set forth in the Note, and shall be secured by the Loan Documents.
In addition, Borrower shall be liable for the payment of all commissions and
brokerage fees relating to the Loan.
- 29 -
23. APPLICATION OF PROCEEDS OF FORECLOSURE SALE. The proceeds of any
foreclosure sale of the Property shall be distributed and applied in the order
of priority set forth in the Note with the excess, if any, being applied to any
parties entitled thereto as their rights may appear.
24. APPOINTMENT OF RECEIVER OR MORTGAGEE IN POSSESSION. If an Event of
Default is continuing or if Lender shall have accelerated the Indebtedness,
Lender, upon application to a court of competent jurisdiction, shall be entitled
as a matter of strict right (but only as permitted by applicable law), without
notice, and without regard to the occupancy or value of any security for the
Indebtedness, without any showing of fraud or mismanagement on the part of
Borrower or the insolvency of any party bound for its payment, to the
appointment of a receiver or the immediate appointment of Lender to take
possession of and to operate the Property, and to collect and apply the rents,
issues, profits and revenues thereof.
25. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by Lender in
exercising any right or remedy under any of the Loan Documents, or otherwise
afforded by applicable law, shall not be a waiver of or preclude the exercise of
any right or remedy. Lender's acceptance of payment of any sum secured by any of
the Loan Documents after the due date of such payment shall not be a waiver of
Lender's right to either require prompt payment when due of all other sums so
secured or to declare a default for failure to make prompt payment. The
procurement of insurance or the payment of taxes or other liens or charges by
Lender shall not be a waiver of Lender's right to accelerate the maturity of the
Indebtedness, nor shall Lender's receipt of any awards, proceeds or damages
under PARAGRAPH 5 hereof operate to cure or waive Borrower's default in payment
or sums secured by any of the Loan Documents. With respect to all Loan
Documents, only waivers made in writing by Lender shall be effective against
Lender.
26. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the right
to assert any statute of limitations as a bar to the enforcement of the lien
created by any of the Loan Documents or to any action brought to enforce the
Note or any other obligation secured by any of the Loan Documents.
27. WAIVER OF HOMESTEAD AND REDEMPTION. Borrower hereby waives all
rights of homestead exemption in the Property. Borrower hereby waives all right
of redemption on behalf of Borrower and on behalf of all other persons acquiring
any interest or title in the Property subsequent to the date of this Mortgage,
except decree or judgment creditors of Borrower.
28. JURY TRIAL WAIVER. BORROWER AND LENDER BY THEIR ACCEPTANCE OF THIS
MORTGAGE, EACH HEREBY WAIVES, TO THE FULLEST EXTENT PROVIDED BY APPLICABLE LAW,
ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
OR RELATED TO, THE SUBJECT MATTER OF THE LOAN DOCUMENTS AND THE BUSINESS
RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY MADE BY BORROWER AND BY LENDER, AND BORROWER ACKNOWLEDGES THAT
NEITHER LENDER NOR ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY
ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER AND LENDER
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT BORROWER
- 30 -
AND LENDER HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THE LOAN
DOCUMENTS AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR
RELATED FUTURE DEALINGS. BORROWER AND LENDER FURTHER ACKNOWLEDGE THAT THEY HAVE
BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING
OF THE LOAN DOCUMENTS AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL.
29. INDEMNIFICATION. IN ADDITION TO ANY OTHER INDEMNIFICATIONS PROVIDED
IN ANY OF THE OTHER LOAN DOCUMENTS, BORROWER SHALL, AT ITS SOLE COST AND
EXPENSE, PROTECT, DEFEND, INDEMNIFY, RELEASE AND SAVE HARMLESS LENDER OR ANY
PERSON OR ENTITY WHO IS OR WILL HAVE BEEN INVOLVED IN THE SERVICING OF THIS
LOAN, AS WELL AS THE RESPECTIVE AFFILIATES, SUBSIDIARIES, PERSONS CONTROLLING OR
UNDER COMMON CONTROL, DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, PARTNERS,
EMPLOYEES, AGENTS, SERVANTS, REPRESENTATIVES, CONTRACTORS, SUBCONTRACTORS,
PARTICIPANTS, SUCCESSORS AND ASSIGNS OF ANY AND ALL OF THE FOREGOING
(COLLECTIVELY, THE "INDEMNIFIED PARTIES") FROM AND AGAINST ALL LIABILITIES,
OBLIGATIONS, CLAIMS, DEMANDS, DAMAGES, PENALTIES, CAUSES OF ACTION, LOSSES,
FINES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS'
FEES AND EXPENSES), IMPOSED UPON OR INCURRED BY OR ASSERTED AGAINST ANY OF THE
INDEMNIFIED PARTIES AND DIRECTLY OR INDIRECTLY ARISING OUT OF OR IN ANY WAY
RELATING TO ANY ONE OR MORE OF THE FOLLOWING: (A) OWNERSHIP OF THIS MORTGAGE,
THE PROPERTY OR ANY INTEREST THEREIN OR RECEIPT OF ANY RENTS; (B) ANY AMENDMENT
TO, OR RESTRUCTURING OF, THE INDEBTEDNESS, THE NOTE, THIS MORTGAGE OR ANY OTHER
LOAN DOCUMENTS; (C) ANY AND ALL LAWFUL ACTION THAT MAY BE TAKEN BY LENDER IN
CONNECTION WITH THE ENFORCEMENT OF THE PROVISIONS OF THIS MORTGAGE OR THE NOTE
OR ANY OTHER LOAN DOCUMENTS, WHETHER OR NOT SUIT IS FILED IN CONNECTION WITH
SAME, OR IN CONNECTION WITH BORROWER OR ANY PRINCIPAL BECOMING A PARTY TO A
VOLUNTARY OR INVOLUNTARY FEDERAL OR STATE BANKRUPTCY, INSOLVENCY OR SIMILAR
PROCEEDING; (D) ANY ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OF OR DAMAGE
TO PROPERTY OCCURRING IN, ON OR ABOUT THE PROPERTY OR ANY PART THEREOF OR ON THE
ADJOINING SIDEWALKS, CURBS, ADJACENT PROPERTY OR ADJACENT PARKING AREAS, STREETS
OR WAYS; (E) ANY FAILURE ON THE PART OF BORROWER TO PERFORM OR COMPLY WITH ANY
OF THE TERMS OF THIS MORTGAGE; (F) PERFORMANCE OF ANY LABOR OR SERVICES OR THE
FURNISHING OF ANY MATERIALS OR OTHER PROPERTY IN RESPECT OF THE PROPERTY OR ANY
PART THEREOF; (G) ANY FAILURE OF THE PROPERTY TO COMPLY WITH ANY LAWS OR
ORDINANCES AFFECTING OR WHICH MAY BE INTERPRETED TO AFFECT THE PROPERTY; OR (H)
ANY REPRESENTATION OR WARRANTY MADE IN THE NOTE, THIS MORTGAGE OR THE OTHER LOAN
DOCUMENTS BEING FALSE OR MISLEADING IN ANY MATERIAL RESPECT AS OF THE DATE SUCH
REPRESENTATION OR WARRANTY WAS MADE. THE
- 31 -
OBLIGATIONS AND LIABILITIES OF BORROWER UNDER THIS PARAGRAPH 29 (A) SHALL
SURVIVE FOR A PERIOD OF ONE (1) YEAR FOLLOWING ANY RELEASE OF THIS MORTGAGE
EXECUTED BY LENDER AND SATISFACTION OF THE LOAN EVIDENCED BY THE LOAN DOCUMENTS,
AND (B) SHALL SURVIVE THE TRANSFER OR ASSIGNMENT OF THIS MORTGAGE, THE ENTRY OF
A JUDGMENT OF FORECLOSURE, SALE OF THE PROPERTY BY NONJUDICIAL FORECLOSURE SALE,
OR DELIVERY OF A DEED IN LIEU OF FORECLOSURE (INCLUDING, WITHOUT LIMITATION, ANY
TRANSFER BY BORROWER OF ANY OF ITS RIGHTS, TITLE AND INTEREST IN AND TO THE
PROPERTY TO ANY PARTY, WHETHER OR NOT AFFILIATED WITH BORROWER); PROVIDED,
HOWEVER, THAT ANY ACT OR OMISSION PURSUANT TO SUBSECTIONS (A) THROUGH (H) ABOVE
WAS TAKEN OR OCCURRED PRIOR TO THE PAYMENT IN FULL OF THE INDEBTEDNESS. THE
FOREGOING INDEMNIFICATION SHALL NOT APPLY TO CLAIMS ARISING SOLELY AND DIRECTLY
FROM THE GROSS NEGLIGENCE AND INTENTIONAL MISCONDUCT OF LENDER.
30. DUTY TO DEFEND. UPON WRITTEN REQUEST BY AN INDEMNIFIED PARTY,
BORROWER SHALL DEFEND SUCH INDEMNIFIED PARTY (IF REQUESTED BY AN INDEMNIFIED
PARTY, IN THE NAME OF THE INDEMNIFIED PARTY) BY ATTORNEYS AND OTHER
PROFESSIONALS REASONABLY APPROVED BY THE INDEMNIFIED PARTIES. NOTWITHSTANDING
THE FOREGOING, ANY INDEMNIFIED PARTIES MAY, IN THEIR SOLE AND ABSOLUTE
DISCRETION, ENGAGE THEIR OWN ATTORNEYS AND OTHER PROFESSIONALS TO DEFEND OR
ASSIST THEM, AND, AT THE OPTION OF THE INDEMNIFIED PARTIES, THEIR ATTORNEYS
SHALL CONTROL THE RESOLUTION OF THE CLAIM OR PROCEEDING TO THE EXTENT IT MAY
IMPACT LENDER. UPON DEMAND, BORROWER SHALL PAY OR, IN THE SOLE AND ABSOLUTE
DISCRETION OF THE INDEMNIFIED PARTIES AS IT MAY IMPACT LENDER, REIMBURSE, THE
INDEMNIFIED PARTIES FOR THE PAYMENT OF REASONABLE FEES AND DISBURSEMENTS OF
ATTORNEYS, ENGINEERS, AND OTHER PROFESSIONALS IN CONNECTION THEREWITH. ANY
AMOUNTS PAYABLE TO ANY OF THE INDEMNIFIED PARTIES BY REASON OF THE APPLICATION
OF PARAGRAPH 29 OR THIS PARAGRAPH SHALL BE SECURED BY THIS MORTGAGE AND SHALL
BECOME IMMEDIATELY DUE AND PAYABLE AND SHALL BEAR INTEREST AT THE DEFAULT RATE
SPECIFIED IN THE NOTE FROM THE DATE LOSS OR DAMAGE IS SUSTAINED BY ANY OF THE
INDEMNIFIED PARTIES UNTIL PAID.
31. ERISA. Borrower covenants and agrees that during the term of the
Loan, (a) Borrower will take no action that would cause it to (i) become an
"employee benefit plan" or (ii) otherwise be considered "plan assets" as defined
in 29 C.F.R. Section 2510.3-101, or "assets of a governmental plan" subject to
regulation under the state statutes, and (b) Borrower will not sell, assign or
transfer the Property, or any portion thereof or interest therein, to any
transferee that does not execute and deliver to Lender its written assumption of
the obligations of this covenant. Borrower further covenants and agrees to
protect, defend, indemnify and hold Lender harmless from and against all loss,
cost, damage and expense (including without limitation, all attorneys' fees and
excise taxes, costs of correcting any prohibited transaction or obtaining an
appropriate exemption) that Lender may incur as a result of Borrower's breach of
this covenant. This
- 32 -
covenant and indemnity shall survive the extinguishment of the lien of this
Mortgage by foreclosure or action in lieu thereof; furthermore, the foregoing
indemnity shall supersede any limitations on Borrower's liability under any of
the Loan Documents.
32. NO ORAL CHANGE. This Mortgage may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure to
act on the part of Borrower or Lender, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought.
33. NOTICE. Except for any notice required under applicable law to be
given in another manner, (a) any notice to Borrower provided for in the Loan
Documents shall be given by personal delivery or by mailing such notice by
Federal Express or any other nationally recognized overnight carrier addressed
to Borrower at Borrower's address stated above or at such other address as
Borrower may designate by notice to Lender as provided herein, and (b) any
notice to Lender shall be given personally or by Federal Express or any other
nationally recognized overnight carrier to Lender's address stated below or to
such other address as Lender may designate by notice to Borrower as provided
herein. Any notice provided for in the Loan Documents shall be deemed to have
been given to Borrower or Lender on the first business day following such
mailing in the manner designated herein.
Notices to Lender shall be sent to:
Bank of America, N.A.
Capital Markets Servicing Group
900 West Trade Street, Suite 650
NC1-026-06-01
Charlotte, North Carolina 28255
Attention: Servicing Manager
Telephone No: (866) 531-0957
With a copy to:
Alston & Bird LLP
90 Park Avenue
New York, New York 10016
Attention: Meryl P. Diamond, Esq.
Telephone No: (212) 210-9579
34. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY; AGENTS;
CAPTIONS. The covenants and agreements contained in the Loan Documents shall
bind, and the rights thereunder shall inure to, the respective successors and
assigns of Lender, and Borrower, subject to the provisions of PARAGRAPH 15
hereof. All covenants and agreements of Borrower shall be joint and several. In
exercising any rights under the Loan Documents or taking any actions provided
for therein, Lender may act through its employees, agents, or independent
contractors as authorized by Lender. The captions and headings of the paragraphs
of this Mortgage are for convenience only and are not to be used to interpret or
define the provisions hereof.
- 33 -
35. GOVERNING LAW; SEVERABILITY.
THIS MORTGAGE SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES, PROVIDED, HOWEVER, THAT TO THE EXTENT THE MANDATORY
PROVISIONS OF THE LAWS OF ANOTHER JURISDICTION RELATING TO (I) THE PERFECTION OR
THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTERESTS IN ANY OF
THE PROPERTY, (II) THE LIEN, ENCUMBRANCE OR OTHER INTEREST IN THE PROPERTY
GRANTED OR CONVEYED BY THIS MORTGAGE, OR (III) THE AVAILABILITY OF AND
PROCEDURES RELATING TO ANY REMEDY HEREUNDER OR RELATED TO THIS MORTGAGE ARE
REQUIRED TO BE GOVERNED BY SUCH OTHER JURISDICTION'S LAWS, SUCH OTHER LAWS SHALL
BE DEEMED TO GOVERN AND CONTROL. THE INVALIDITY, ILLEGALITY OR UNENFORCEABILITY
OF ANY PROVISION OF THIS MORTGAGE OR THE LOAN DOCUMENTS SHALL NOT AFFECT OR
IMPAIR THE VALIDITY, LEGALITY OR ENFORCEABILITY OF THE REMAINDER OF THIS
MORTGAGE AND THE OTHER LOAN DOCUMENTS, AND TO THIS END, THE PROVISIONS OF THIS
MORTGAGE AND THE OTHER LOAN DOCUMENTS ARE DECLARED TO BE SEVERABLE.
36. RELEASE. Upon payment of all sums secured by this Mortgage, Lender
shall release this Mortgage. Borrower shall pay Lender's reasonable costs
incurred in releasing this Mortgage and any financing statements related hereto.
37. COVENANTS RUNNING WITH THE LAND. All covenants, conditions,
warranties, representations and other obligations contained in this Mortgage and
the other Loan Documents are intended by Borrower and Lender to be, and shall be
construed as, covenants running with the Property until the lien of this
Mortgage has been fully released by Lender.
38. TERMS. As used in the Loan Documents, (i) "business day" means a
day when banks are not required or authorized to be closed in Charlotte, North
Carolina; and (ii) the words "include" and "including" shall mean "including but
not limited to" unless specifically set forth to the contrary.
39. LOSS OF NOTE. Upon notice from Lender of the loss, theft, or
destruction of the Note and upon receipt of indemnity reasonably satisfactory to
Borrower from Lender, or in the case of mutilation of the Note, upon surrender
of the mutilated Note, Borrower shall make and deliver a new note of like tenor
in lieu of the then to be superseded Note.
40. CHANGES IN THE LAWS REGARDING TAXATION. If any law is amended,
enacted or adopted after the date of this Mortgage which deducts the
Indebtedness from the value of the Property for the purpose of taxation or which
imposes a tax, either directly or indirectly, on the Indebtedness of Lender's
interest in the Property, Borrower will pay such tax, with interest and
penalties thereon, if any. In the event Lender is advised by counsel chosen by
it that the payment of such tax or interest and penalties by Borrower would be
unlawful or taxable to Lender or unenforceable or provide the basis for a
defense of usury, then in any such event, Lender shall have the option, by
written notice of not less than ninety (90) days, to declare the Indebtedness
- 34 -
immediately due and payable, but without the imposition of a Prepayment Fee, as
such term is defined in the Note.
41. EXCULPATION. This Mortgage and other Loan Documents and all of
Borrower's obligations hereunder and thereunder are subject to the provisions of
PARAGRAPH 11 of the Note entitled Exculpation. All of the provisions of the
Note, including PARAGRAPH 11, are incorporated herein by this reference.
42. DISCLOSURE OF INFORMATION. Lender shall have the right (but shall
be under no obligation) to make available to any party for the purpose of
granting participation in or selling, transferring, assigning or conveying all
or any part of the Loan (including any governmental agency or authority and any
prospective bidder at any foreclosure sale of the Property) any and all
information which Lender may have with respect to the Property and Borrower,
whether provided by Borrower, any Principal or any third party or obtained as a
result of any environmental assessments. Borrower and each Principal agree that
Lender shall have no liability whatsoever as a result of delivering any such
information to any third party, and Borrower and each Principal, on behalf of
themselves and their successors and assigns, hereby release and discharge Lender
from any and all liability, claims, damages, or causes of action, arising out
of, connected with or incidental to the delivery of any such information to any
third party.
43. SALE OF LOAN; SECURITIZATION. Lender, at any time and without the
consent of Borrower or any Principal, may grant participation in or sell,
transfer, assign and convey all or any portion of its right, title and interest
in and to the Loan, the servicing of the Loan, this Mortgage and the other Loan
Documents, any guaranties given in connection with the Loan and any collateral
given to secure the Loan. Borrower covenants to cooperate, at no substantial
out- of-pocket expense to Borrower, with Lender's efforts in the securitization
of the Loan; such cooperation includes Borrower's obligation to (a) make
non-material modifications of the Loan Documents (such modifications shall not
(i) increase the amount of the Indebtedness, (ii) change the Amortization
Schedule, or (iii) change the Contract Rate), (b) provide more current operating
statements and rent rolls for the Property prepared in Borrower's ordinary
course of business (but not more frequently than monthly upon five (5) days
advance written notice from Lender), (c) deliver updated information regarding
Borrower and the Property, (d) review Lender's securitization offering materials
to the extent such materials relate to Borrower or the Property, (e) respond to
any inquiries of Lender or other party relating thereto, and (f) if required by
any rating agency after the securitization of the Loan, provide an opinion with
respect to matters of Delaware law and federal bankruptcy law relating to single
member limited liability companies. Borrower shall not be liable for Lender's
post-closing costs incurred pursuant to any securitization of the Loan by
Lender.
44. ACTIONS AND PROCEEDINGS. Lender has the right to appear in and
defend any action or proceeding brought with respect to the Property and to
bring any action or proceeding, in the name and on behalf of Borrower, which
Lender, in its discretion, decides should be brought to protect their respective
interests in the Property. Lender shall, at its option, be subrogated to the
lien of any mortgage or other security instrument discharged in whole or in part
by the Indebtedness, and any such subrogation rights shall constitute additional
security for the payment of the Indebtedness.
- 35 -
45. NO THIRD PARTY BENEFICIARIES. The provisions of this Mortgage and
the other Loan Documents are for the benefit of Borrower and Lender and shall
not inure to the benefit of any third party (other than any successor or
assignee of Lender). This Mortgage and the other Loan Documents shall not be
construed as creating any rights, claims or causes of action against Lender or
any of its officers, directors, agents or employees in favor of any party other
than Borrower including but not limited to any claims to any sums held in the
Replacement Reserve.
46. EXHIBITS AND RIDERS. The following Exhibits and Riders (which may
contain additional representations, warranties, and covenants) are attached to
this Mortgage and hereby made a part of this Mortgage: Exhibit A (legal
description for Land), Exhibit B (definition of Personal Property), and Exhibit
C (pending and threatened litigation).
47. RECORDING OF SECURITY INSTRUMENT, ETC. Except where otherwise
prohibited by law, Borrower will pay all filing, registration or recording fees,
and all expenses incident to the preparation, execution, acknowledgment, and
subsequent release or reconveyance of this Mortgage and the Note, any deed of
trust or mortgage supplemental hereto, any security instrument with respect to
the Property, any instrument of further assurance and all federal, state, county
and municipal, taxes, duties, imposts, assessments and charges arising out of or
in connection with the same. BORROWER SHALL HOLD HARMLESS AND INDEMNIFY LENDER,
ITS SUCCESSORS AND ASSIGNS, AGAINST ANY LIABILITY INCURRED BY REASON OF THE
IMPOSITION OF ANY TAX ON THE MAKING AND RECORDING OF THIS MORTGAGE.
48. COUNTERPARTS. This Mortgage may be executed in any number of
counterparts each of which shall be deemed to be an original but all of which
when taken together shall constitute one agreement.
49. SPECIAL FLORIDA PROVISIONS.
(a) In the event of any inconsistency between the terms and conditions
of Article 49 of this Mortgage and the terms and conditions of any other
provisions of this Mortgage, the terms and conditions of Article 49 shall
control and be binding.
(b) The text of Section 2 of this Mortgage entitled "Taxes and Other
Obligations" is hereby amended by inserting after the words "all taxes,
assessments, fines, impositions and other charges and obligations, including"
and before the words "charges and obligations for any present or future repairs
or improvements made on the Property" the words ", but not limited to, the
Florida Intangibles Tax and the Florida Documentary Stamps Tax and".
(c) Whenever attorneys' fees are provided to be paid, the term shall
include any and all reasonable attorneys' fees, attorney's accountant fees,
paralegal and law clerk (and similar person's) fees, including but not limited
to, fees at the pretrial, trial and appellate levels, and in collection
proceedings, incurred or paid by Lender in protecting its interest in the
collateral and enforcing its rights hereunder.
(d) This Mortgage secures such future or additional advances as may be
made by Lender or the holder hereof, at its exclusive option, to Borrower or its
successors or assigns in title, for any purpose, provided that all such advances
are made within twenty (20) years from the date of this Mortgage or within such
lesser period of time as may be provided by law as a
- 36 -
prerequisite for the sufficiency of actual notice or record notice of such
optional future or additional advances as against the rights of creditors or
subsequent purchasers for valuable consideration to the same extent as if such
future or additional advances were made on the date of the execution of this
Mortgage. The total amount of indebtedness secured by this Mortgage may be
increased or decreased from time to time, but the total unpaid balance so
secured at any one time shall not exceed twice the face amount of the Note, plus
interest thereon and any disbursements made under this Mortgage for the payment
of impositions, taxes, assessments, levies, insurance, or otherwise with
interest on such disbursements, plus any increase in the principal balance as
the result of negative amortization or deferred interest, if any. All such
future advances shall be secured to the same extent as if made on the date of
the execution of this Mortgage and this Mortgage shall secure the payment of the
Note and any additional advances made from time to time pursuant thereto, all of
said indebtedness being equally secured hereby and having the same priority as
any amounts advanced as of the date of this Mortgage. It is agreed that any
additional sum or sums advanced by Lender shall be equally secured with and have
the same priority as the original indebtedness and shall be subject to all of
the terms, provisions and conditions of this Mortgage, whether or not such
additional loans or advances are evidenced by other notes or other guaranties of
Borrower and whether or not identified by a recital that it or they are secured
by this Mortgage. It is further agreed that any additional note or guaranty or
notes or guaranties executed and delivered pursuant to this paragraph shall
automatically be deemed to be included in the term "Note" wherever it appears in
the context of this Mortgage. Without the prior written consent of Lender, which
Lender may grant or withhold in its sole discretion, Borrower shall not file for
record any notice limiting the maximum principal amount that may be secured by
this Mortgage to a sum less than the maximum principal amount set forth in this
paragraph.
50. The assignment of rents contained in this Mortgage is intended to
and does constitute an assignment of rents as contemplated in Florida Statutes
Section 697.07. Upon the occurrence of an Event of Default, Lender shall be
entitled to the remedies provided in said Section 697.07, in addition to all
rights and remedies, whether procedural or substantive, in effect at the time of
execution or enforcement of this Mortgage.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, Borrower has executed this Mortgage or has caused
the same to be executed by its representatives thereunto duly authorized.
BORROWER
MHC ELDORADO VILLAGE, LLC,
a Delaware limited liability company
By: /s/ David Fell
--------------------------------
David Fell
Vice President
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