Prepared by and upon
recording return to:
Blackwell Sanders Peper Martin LLP
4801 Main Street - Suite 1000
Kansas City, Missouri 64112
Attn: Gaylord Smith, Esq.
DEED TO SECURE DEBT AND SECURITY AGREEMENT
THIS DEED TO SECURE DEBT AND SECURITY AGREEMENT (hereinafter this “Deed”) is made this 29th day of November, 2005, by RT DEERFIELD I, LLC, a Delaware limited liability company, as mortgagor (“Borrower”), to and in favor of ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA, a Minnesota corporation, as mortgagee (“Lender”).
In consideration of the sum of Nine Million Seven Hundred Twenty-Five Thousand and 00/100 Dollars ($9,725,000.00) paid to Borrower by Lender (the “Loan”), and for the purpose of securing: (a) the repayment of the indebtedness evidenced by Borrower’s Promissory Note of even date herewith, payable to the order of Lender in the principal amount of $9,725,000.00, said principal sum, with interest thereon at the rate of 5.23% per annum, being finally due and payable on December 10, 2015, and all renewals, extensions and modifications thereof and any note issued in substitution therefor (the “Note”); (b) the payment of all other sums with interest thereon as may be advanced by Lender in accordance with this Deed, the Assignment of Rents and Leases of even date herewith from Borrower to Lender (the “Assignment”), the Environmental Indemnity of even date herewith from Borrower and other parties to Lender (the “Indemnity”), and any other instruments or documents evidencing the Loan or securing payment of the Note (the Note, Deed, Assignment, Indemnity, and any other documents or instruments evidencing the Loan or securing payment of the Note, are together referred to as the “Loan Documents”) (the indebtedness evidenced by the Note and all such other sums are hereinafter collectively referred to as the “Indebtedness”): and (c) the performance of all the covenants and agreements of Borrower contained in the Loan Documents, Borrower does hereby GRANT, BARGAIN, SELL, ASSIGN, TRANSFER, WARRANT and CONVEY unto Lender the tract or
parcel of land (hereinafter called the “Land”), located in Fulton County, Georgia, described in Exhibit A, attached hereto and incorporated herein, together with all of Borrower’s right, title and interest in: (i) all of the buildings, structures and other improvements now standing or at any time hereafter constructed or placed upon the Land; and (ii) all lighting, heating, ventilating, air conditioning, sprinkling and plumbing fixtures, water and power systems, engines and machinery, boilers, furnaces, oil burners, elevators and motors, communication systems, dynamos, transformers, electrical equipment and all other fixtures of every description located in or on, or used, or intended to be used in connection with the Land or any building now or hereafter located thereon (excluding, however, fixtures owned by tenants, licensees or other parties leasing or occupying space in any building now or hereafter located on the Land under written agreements); and (iii) all hereditaments, easements, appurtenances, riparian rights, rents, issues, profits, condemnation awards, mineral rights and water rights now or hereafter belonging or in any way pertaining to the Land or to any building now or hereafter located thereon and all the estates, rights and interests of Borrower in the Land; (iv) all building materials, furniture, furnishings, maintenance equipment and all other personal property now or hereafter located in, or on, or used, or intended to be used in connection with the Land or any building now or hereafter located thereon and all replacements and additions thereto (excluding personal property owned by tenants, licensees or other parties leasing or occupying space in any building now or hereafter located on the Land under written agreements); and (v) all additions, accessions, increases, parts, fittings, accessories, replacements, substitutions, betterments, repairs and proceeds to any and all of the foregoing (all of the foregoing, together with the Land, are hereinafter referred to as the “Secured Property”). With respect to any portion of the Secured Property which constitutes personal property, fixtures or other property governed by the Georgia Uniform Commercial Code, this Deed shall constitute a security agreement between Borrower as the debtor and Lender as the secured party, and Borrower hereby grants Lender a security interest in such portion of the Secured Property.
TO HAVE AND TO HOLD the Secured Property unto and to the use and benefit of Lender and its successors and assigns, in fee simple forever, and Borrower covenants that it is lawfully seized and possessed of the Secured Property in fee and has good title and right to convey the same. Notwithstanding the defined term used to describe this instrument, the conveyance herein is intended to and shall constitute and be construed as a deed passing title to the Secured Property to Lender, and is made under those portions of the existing laws of the State of Georgia (O.C.G.A. Section 44-14-60 et. seq.) relating to conveyances and deeds to secure debt, and not as a mortgage; provided, nevertheless, that this Deed is made upon the express condition that if Borrower shall pay to Lender as and when due and payable the principal of and interest on the Note and all other Indebtedness, and shall also keep and perform each and every covenant and agreement of Borrower herein contained, then, this Deed and the estate, right and interest of Lender created hereby, shall be released by Lender at Borrower’s expense.
Borrower represents, warrants and covenants to and with Lender that it is lawfully seized of the Land in fee simple and has good right and full power and authority under all applicable provisions of law and under its organizational documents to execute this Deed and the Loan Documents and to grant a deed to secure debt for the Secured Property; that the Secured Property is free from all liens, security interests and encumbrances except those listed as exceptions to title in the policy of loan title insurance issued to Lender and insuring the lien of this Deed (the “Permitted Encumbrances”); that Borrower will warrant and defend the title to the Secured
Property and the lien and priority of this Deed against all claims and demands of all persons whomsoever, whether now existing or hereafter arising, except the Permitted Encumbrances; and that all buildings and improvements now or hereafter located on the Land are, or will be located entirely within the boundaries of the Land.
Borrower further covenants and agrees as follows:
1. Payment of the Note. Borrower will duly and punctually pay the principal of and interest on the Note in accordance with the terms of the Note, and all other Indebtedness, when and as due and payable. The provisions of the Note are hereby incorporated by reference into this Deed as fully as if set forth at length herein. Time is of the essence hereof.
2. Fund for Taxes, Assessments and Insurance Premiums. (a) Borrower shall pay to Lender on the day monthly installments of interest or principal and interest are payable under the Note, until the Note is paid in full, a sum equal to one-twelfth (or such greater fraction as may be necessary to accumulate sufficient funds to make any payment due less than thirteen (13) months after the date thereof) of the yearly taxes and assessments levied against the Secured Property and the premiums on all insurance required to be maintained by Borrower hereunder as estimated initially and from time to time by Lender, to be applied by Lender to pay said taxes, assessments and insurance premiums (such amounts being hereafter referred to as the “Funds”). Lender shall apply the Funds to pay said taxes, assessments and insurance premiums prior to the date that penalty attaches for nonpayment so long as the amount of Funds held by Lender is sufficient at that time to make such payments. Such Funds shall be held without allowance of interest or dividends to Borrower, and shall not be, nor be deemed to be, trust funds, and Lender may commingle the Funds with other moneys held by Lender.
(b) If the amount of the Funds held by Lender shall exceed at any time the amount deemed necessary by Lender to provide for the payment of taxes, assessments and insurance premiums, such excess shall, at the option of Lender, either be promptly repaid to Borrower or be credited to Borrower on the next monthly installment of Funds due. If at any time the amount of the Funds held by Lender shall be less than the amount deemed necessary by Lender to pay taxes, assessments and insurance premiums as they fall due, Borrower shall, within fifteen (15) days after notice of demand therefor, pay to Lender any amount necessary to make up the deficiency upon notice from Lender to Borrower requesting payment thereof. The Funds are hereby pledged as additional security for the Indebtedness.
(c) Upon the occurrence of any Event of Default (as defined in Paragraph 19) Lender may apply in any order as Lender shall determine in its sole and absolute discretion, any Funds held by Lender at the time of application to pay taxes, assessments and insurance premiums which are then or will thereafter become due or as a credit against the Indebtedness. Promptly upon payment in full of all Indebtedness, Lender shall refund to Borrower any Funds held by Lender.
3. Application of Payments. All payments received by Lender from Borrower under the Note or the Loan Documents shall be applied by Lender in the following order of priority: (i) amounts payable to Lender by Borrower under Paragraph 2; (ii) interest payable on advances made pursuant to Paragraph 13; (iii) principal of advances made pursuant to Paragraph 13;
(iv) interest payable on the Note; (v) principal of the Note; (vi) any other sums secured by this Deed, in such order of application as Lender may determine.
4. Payment of Taxes, Assessments and Other Charges. Subject to payments in the manner provided under Paragraph 2 and to Paragraph 9 relating to contests, Borrower shall pay before a penalty might attach for nonpayment thereof, all taxes and assessments and all other charges whatsoever levied upon or assessed or placed against the Secured Property, except that assessments may be paid in installments so long as no fine or penalty is added to any installment for the nonpayment thereof. Borrower shall likewise pay any and all governmental levies or assessments such as maintenance charges, owner association dues or charges or fees, levies or charges resulting from covenants, conditions and restrictions affecting the Secured Property, which are assessed or imposed upon the Secured Property or any part thereof or become due and payable, and which create, may create or appear to create a lien upon the Secured Property, or any part thereof. Borrower shall likewise pay all taxes, assessments and other charges, levied upon or assessed, placed or made against, or measured by, this Deed, or the recordation hereof, or the Indebtedness secured hereby. In the event of any legislative action or judicial decision after the date of this Deed, imposing upon Lender the obligation to pay any such taxes, assessments or other charges, or deducting the amount secured by this Deed from the value of the Secured Property for the purpose of taxation, or changing in any way the laws now in force for the taxation of mortgages, deeds of trust or debts secured thereby, or the manner of the operation of any such taxes so as to affect the interests of Lender, then, and in such event, Borrower shall bear and pay the full amount of such taxes, assessments or other charges. Notwithstanding the foregoing provisions of this Paragraph 4, if for any reason payment by Borrower of any such taxes, assessments or other charges would be unlawful, or if the payment thereof would render the indebtedness evidenced by the Note usurious, Lender may declare the whole sum secured by this Deed, with interest thereon, to be due and payable sixty (60) days from the date such declaration is given to Borrower, without a prepayment premium. Borrower shall promptly furnish to Lender all notices received by Borrower of amounts due under this paragraph and in the event Borrower shall make payment directly, Borrower shall promptly furnish to Lender receipts evidencing such payments.
5. Payment of Utility Charges. Borrower shall pay or cause to be paid all charges made by utility companies, whether public or private, for electricity, gas, heat, water, or sewer, furnished or used in connection with the Secured Property or any part thereof, and will, upon written request of Lender, furnish proper receipts evidencing such payment if made by Borrower.
6. Liens. Borrower shall not create, incur or suffer to exist any lien, encumbrance or charge on the Secured Property or any part thereof which might or could be held to be equal or prior to the lien of this Deed, other than the Permitted Encumbrances. Borrower shall pay or cause to be paid, when due, the claims of all persons supplying labor or materials to or in connection with the Secured Property.
7. Compliance with Laws. Borrower shall comply with all present and future statutes, laws, rules, orders, regulations and ordinances affecting the Secured Property, any part thereof or the use thereof. Borrower shall not initiate or consent to any zoning reclassification or material change in the zoning of the Secured Property, or initiate or consent to any variation of zoning standards affecting the Secured Property, without the prior written consent of Lender, in its sole discretion.
8. Hazardous Substances, (a) Definitions. As used in this Deed, the following terms shall have the following meanings:
(1) “Environmental Law” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Hazardous Materials Transportation Act. 49 U.S.C. § 1802 et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.,. the Clean Water Act, 33 U.S.C. § 1321 et seq., the Clean Air Act 42 U.S.C. § 7401 et seq., and any other applicable federal, state, county, municipal, local or other statute, law, ordinance or regulation which regulate the environment, all as may be from time to time amended.
(2) “Hazardous Substances” means asbestos ureaformaldehyde, polychlorinated biphenyls (“PCBs”), nuclear fuel or material, chemical waste, radioactive material, explosives, known carcinogens, petroleum products and by-products and other dangerous, toxic or hazardous pollutants, contaminants, chemicals, materials or substances listed or identified in, or regulated by, any Environmental Law.
(3) “Governmental Agency” means any local, state or federal government, or any local, state or federal agency or quasi-governmental agency, authority, board, bureau, commission or administrative tribunal having jurisdiction over the Secured Property.
(b) Representations and Warranties. Borrower represents and warrants to Lender that:
(1) To the actual knowledge of Borrower, except as disclosed by the “Initial Environmental Report” described in Paragraph 8(d), there are not present in, on or under the Secured Property any Hazardous Substances in violation of any Environmental Laws, other than products used in the ordinary course of business by tenants of the Secured Property and products used in the ordinary course of the operation of the Secured Property for landscape maintenance, janitorial services and pest control.
(2) To the actual knowledge of Borrower, except as disclosed by the Initial Environmental Report, the Secured Property is not presently being used and has not in the past been used, for the handling, storage, transportation, manufacture, release or disposal of any Hazardous Substances in violation of any Environmental Laws, other than products used in the ordinary course of business by tenants of the Secured Property and products used in the ordinary course of the operation of the Secured Property for landscape maintenance, janitorial services and pest control.
(3) To the actual knowledge of Borrower, except as disclosed by the Initial Environmental Report, there are no present and there have not been any past claims, investigations, administrative proceedings, litigation, regulatory hearings or requests or demands for remedial or response actions or for compensation, which may be proposed, threatened or pending with respect to the Secured Property, alleging noncompliance with or violation of any Environmental Law, seeking relief under any Environmental Law or relating to any required environmental permits, licenses or authorizations.
(4) To the actual knowledge of Borrower, all reports and notices required by any Environmental Law have been duly made with respect to the Secured Property, and all permits, licenses and authorizations required by any Environmental Law have been obtained and are in full force and effect with respect to the Secured Property.
(5) To the actual knowledge of Borrower, except as disclosed by the Initial Environmental Report, there is not now present nor has there ever been present, in, on or under the Secured Property any above-ground or underground storage tanks used for the storage of petroleum, petroleum by-products or any other Hazardous Substances.
(6) To the actual knowledge of Borrower, except as disclosed by the Initial Environmental Report, the Secured Property is not and never has been listed on the United States Environmental Protection Agency’s National Priorities List of Hazardous Waste Sites or on any other list, schedule, log, inventory or record of hazardous waste sites maintained by any federal, state, or local agency.
(7) Borrower has disclosed and delivered to Lender all environmental reports and investigations which Borrower has obtained or ordered with respect to the Secured Property.
(c) Prohibited Uses. Borrower shall not use, or permit the use of, the Secured Property for the handling, storage, transportation, manufacture, release or disposal of any Hazardous Substances in violation of Environmental Laws. In addition, except for existing facilities disclosed by the Initial Environmental Report, Borrower shall not install or maintain, or permit the installation or maintenance of, any above-ground or underground storage tanks for the storage of petroleum, petroleum by-products or other Hazardous Substances in, about or under the Secured Property unless (i) Borrower has obtained the prior written consent of Lender for such installation and maintenance and (ii) Borrower installs and maintains such aboveground or underground storage tanks in compliance with all applicable Environmental Laws. Notwithstanding the foregoing, Borrower or any tenant of Borrower may use or store immaterial amounts of commonly known and used materials which may be deemed Hazardous Substances hereunder, provided that any such use or storage (x) does not constitute a remunerative activity of Borrower or any tenant, (y) is incidental to Borrower’s operation of the Secured Property or such tenant’s primary use of the Secured Property and does not constitute a primary use thereof, and (z) complies at all times with all applicable Environmental Laws.
(d) Environmental Reports. Lender acknowledges receipt from Borrower of the Phase I Environmental Site Assessment of the Secured Property dated May 24, 2005, prepared by ATC Associates, Inc. (the “Initial Environmental Report”). Upon the occurrence of an Event of Default hereunder or if Lender receives information which leads Lender, in its reasonable discretion, to believe that, except as permitted in Paragraph 8(c), any Hazardous Substance is present on or is being handled, stored, transported, manufactured, released or disposed of in, on or under the Secured Property in violation of Environmental Laws, Lender may obtain, upon notice to Borrower and at Borrower’s expense, further environmental reports from a reputable environmental consultant of Lender’s choice. If any such environmental report indicates any presence, handling, storage, transportation, manufacture, release or disposal of Hazardous Substances in, on or under the Secured Property in violation of Environmental Laws, Lender
may require Borrower, at Borrower’s expense, to remedy any such presence, handling, storage, transportation, manufacture, release, or disposal to the satisfaction of Lender.
(e) Legal Proceedings and Remedial Actions. Borrower shall immediately notify Lender in writing of any claim, investigation, administrative proceeding, litigation, regulatory hearing or request or demand of which Borrower receives written notice for remedial or response action or for compensation which may be proposed, threatened or pending, alleging the presence, handling, storage, transportation, manufacture, release or disposal of Hazardous Substances in, on or under the Secured Property in violation of Environmental Laws. Lender shall have the right, but not the obligation, to join and participate in any such investigation, administrative proceeding, litigation, regulatory hearing or other action and to have its attorneys’ fees and expenses in connection therewith paid by Borrower. Without Lender’s prior written consent, Borrower shall not take any remedial or response action or enter into any settlement or other compromise with respect to any claim, investigation, administrative proceeding, litigation, regulatory hearing or request or demand for remedial or response action or for compensation which, in Lender’s reasonable judgment, may impair the value of Lender’s security under this Deed; provided that Lender’s consent shall not be required for any such remedial or response action which is required by Environmental Laws or by any Governmental Agency.
9. Permitted Contests. Borrower shall not be required to (i) pay any tax, assessment or other charge referred to in Paragraph 4, (ii) pay any charge referred to in Paragraph 5, or (iii) discharge or remove any lien, encumbrance or charge referred to in Paragraph 6, or (iv) comply with any laws, rules, orders, regulations and ordinances, so long as Borrower shall:
(a) Contest, in good faith, the existence, amount or the validity thereof, the amount of damages caused thereby or the extent of its liability therefor, by appropriate proceedings which shall operate during the pendency thereof to prevent (i) the collection of, or other realization upon the tax, assessment, charge or lien, encumbrance or charge so contested, (ii) the sale, forfeiture or loss of the Secured Property or any part thereof, and (iii) any material interference with the use or occupancy of the Secured Property or any part thereof;