Exhibit 4.18
DISCOVERY ZONE, INC.
(Mortgagor),
to
STATE STREET BANK AND TRUST COMPANY,
solely in its capacity as Trustee and Collateral Agent
(Mortgagee)
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
Dated as of July 29, 1997
AFTER RECORDING RETURN TO:
Xxxxxxxx Kill & Olick, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
This Mortgage is exempt from mortgage registration tax as
being issued under a plan of reorganization confirmed under
Section 1129 of chapter 11, title 11, of the United States
Code (the "Bankruptcy Code"), pursuant to Section 1146(c) of
the Bankruptcy Code.
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (as the same may from time to time be extended, renewed or
modified, this "MORTGAGE"), made as of the 29th day of July, 1997, by DISCOVERY
ZONE, INC., a Delaware corporation ("MORTGAGOR"), having its principal place of
business at One Corporate Center, 000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000 to STATE STREET BANK AND TRUST COMPANY, solely in its capacity as
trustee and collateral agent under and pursuant to that certain Indenture, dated
July 22, 1997, among Discovery Zone, Inc., State Street Bank and Trust Company,
as trustee, and the Subsidiary Guarantors named therein, its successors and
assigns ("MORTGAGEE"), having an address at Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000.
W I T N E S S E T H:
A. WHEREAS, Mortgagor has entered into the aforementioned Indenture,
dated as of July 22, 1997 (said Indenture, together with any supplements or
amendments thereto and any renewals, extensions, or replacements thereof, is
hereinafter referred to as the "INDENTURE") pursuant to which the Mortgagor has
issued (i) 13.50% Senior Secured Notes due August 1, 2002 ("INITIAL NOTES"), and
(ii) 13.50% Senior Secured Notes due August 1, 2002, Series B to be issued in
exchange for the Initial Notes pursuant to a Registration Rights Agreement,
dated as of July 22, 1997, between Mortgagor and Xxxxxxxx & Company, Inc. (the
"EXCHANGE NOTES") in the aggregate principal amount of Eighty-Five Million
Dollars ($85,000,000.00). The Initial Notes, the Exchange Notes, and the
Private Exchange Notes (as defined in the Indenture) are hereinafter referred to
collectively as, the "NOTES";
B. WHEREAS, pursuant to its obligations under the Indenture, and for
the purpose, among other things, of securing and providing for the repayment of
the Notes, Mortgagor and Mortgagee have entered into that certain Security
Agreement, Pledge Agreement, Escrow and Security Agreement, and Collateral
Assignment of Patents, Trademarks and Copyrights (Security Agreement), each
dated as of July 22, 1997, which aforementioned agreements and the Indenture,
together with any supplements or amendments thereto and any renewals, extensions
or replacements thereof are hereinafter collectively referred to as the
"RELEVANT DOCUMENTS";
C. WHEREAS, Mortgagor is entering into this Mortgage pursuant to its
obligations under the Indenture and for the purpose, among other things, of
further securing and providing for repayment of the Notes; and
D. WHEREAS, Mortgagor is the fee simple owner of the real estate
described in Exhibit A attached hereto (the "LAND");
NOW THEREFORE, with reference to the foregoing recitals and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Mortgagor and Mortgagee hereby agree as follows:
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For the purpose of securing the payment and performance of all of the
obligations (the "OBLIGATIONS") of Mortgagor, including without limitation, any
and all obligations of Mortgagor under this Mortgage, the Notes, the Indenture,
and all other documents evidencing or securing any such Obligations including,
without limitation, the Relevant Documents. Mortgagor by these presents does
hereby mortgage, give, grant, bargain, sell, alienate, enfeoff, convey, confirm,
warrant, pledge, assign and hypothecate unto Mortgagee, the Land and the
buildings, structures and improvements of every nature whatsoever now or
hereafter located thereon to the extent owned by Mortgagor (including, but not
limited to, all gas and electric fixtures, radiators, heaters, docks and docking
facilities, engines and machinery, boilers, elevators and motors, plumbing,
heating and air conditioning fixtures, carpeting and other floor coverings,
water heaters, awnings and storm sashes which are or shall be attached to the
Land or said buildings, structures or improvements) (the "IMPROVEMENTS");
TOGETHER WITH: all right, title, interest and estate of Mortgagor now
owned, or hereafter acquired, in and to the following property, rights, interest
and estates relating to the Land and the Improvements, together with Mortgagor's
interest in the following property, rights, interests and estates hereinafter
described (the Land, Improvements, and the following property, rights, interests
and estates being hereinafter collectively referred to as the "MORTGAGED
PROPERTY"):
(a) 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, construction and equipment
warranties, and all estates, rights, titles, interests, privileges, liberties,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating to 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 law and in equity, of Mortgagor
of, in and to the Land and the Improvements and every part and parcel thereof,
with the appurtenances thereto, and in and to any streets, ways, alleys,
passages, strips or gores of land adjoining the Land or any part thereof;
(b) all fixtures, attachments and other articles attached to the Land
or the Improvements constituting realty or real property now or hereafter owned
by Mortgagor or in which Mortgagor has or shall acquire an interest, now or
hereafter located on, attached to or contained in or used or usable in
connection with the Mortgaged Property, and including, without limitation, all
building or construction materials intended for construction, reconstruction,
alteration or repair of or installation on or in the Mortgaged Property, of
every kind and nature whatsoever now owned or hereafter acquired by Mortgagor,
and all proceeds thereof, as well as all additions to, appurtenances,
substitutions for, replacements of or accessions to any of the items recited as
aforesaid and all attachments, components, parts (including spare parts) and
accessories, whether installed thereon or affixed thereto, now or hereafter
owned by Mortgagor and used or intended to be used in connection with, or with
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the operation of, the Mortgaged Property, to the extent constituting real
property (collectively, the "FIXTURES");
(c) all awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Mortgaged Property, whether
from the exercise of the right of eminent domain (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 Mortgaged Property;
(d) to the extent assignable, leases, subleases (including
sub-subleases), lettings, licenses, concessions, occupancy agreements and other
agreements which grant a possessory interest in, or the right to use or occupy,
all or any part of the Mortgaged Property now or hereafter entered into, and all
amendments, extensions, renewals and guarantees thereof, and all security
therefor (collectively, the "LEASES") and all rents, issues, profits, revenues
(including all oil and gas or other mineral royalties and bonuses), deposits
(including, without limitation, security deposits) under the Leases (including,
without limitation, from the rental of any office space, retail space or other
space, halls, stores, and offices, and deposits securing reservations of such
space, exhibit or sales space of every kind, license, lease, sublease, fees and
rentals, letters of credit or cash instruments securing or evidencing
obligations under Leases, service charges, vending machine sales and proceeds,
if any, from business interruption or other loss of income insurance))
(collectively, the "RENTS") and all proceeds from the sale or other disposition
of the Leases and the right to receive and apply the Rents to the payment of the
Obligations;
(e) subject to the rights of Mortgagor hereunder, all proceeds of any
insurance policies covering the Mortgaged 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 Mortgaged
Property);
(f) all refundable, returnable or reimbursable fees deposits or other
funds or evidences of credit or indebtedness deposited by or on behalf of
Mortgagor with any governmental authorities, boards, corporations, providers of
utility services, public or private, including specifically, but without
limitation, all refundable, returnable or reimbursable tap fees, utility
deposits and development costs in connection with the Mortgaged Property, and
all of the records and books of account now or hereafter maintained by or on
behalf of Mortgagor in connection with the operation of the Mortgaged Property
(collectively, "SECURITY ACCOUNTS");
(g) all proceeds (as defined in the Uniform Commercial Code) of the
Mortgaged Property which, in any event, shall include, without limitation, (i)
cash, instruments and other property received, receivable or otherwise
distributed in exchange for any or all of the Mortgaged Property, (ii) the
collection or other disposition of, or realization upon, any item or portion of
the Mortgaged Property (including, without limitation, all claims of Mortgagor
against third parties for loss of, damage to, destruction of, or for
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proceeds payable under policies of insurance in respect of, the Mortgaged
Property now existing or hereafter arising), (iii) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to Mortgagor from time to
time with respect to damage or loss of or to any of the Mortgaged Property, (iv)
any and all payments (in any form whatsoever) made or due and payable to
Mortgagor from time to time in connection with the requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Mortgaged Property
by any Governmental Authority (or any person acting under color of Governmental
Authority), and (v) any and all real estate tax refunds payable to Mortgagor
with respect to the Mortgaged Property, and refunds or reimbursements payable
with respect to bonds, escrow accounts, or other sums payable in connection with
the use, development or ownership of the Mortgaged Property (collectively, the
"PROCEEDS");
(h) to the extent permitted under applicable law, all licenses,
permits, variances and certificates used in connection with the ownership,
operation, use or occupancy of the Mortgaged Property (including, without
limitation, business licenses, state health department licenses, food service
licenses, liquor licenses, licenses to conduct business and all such other
permits, licenses and rights, obtained from any Governmental Authority or
private Person concerning ownership, operation, use or occupancy of the
Mortgaged Property) (collectively, "PERMITS");
(i) all plans, specifications, shop drawings and other technical
descriptions prepared for construction, repair or alteration of the Improvements
(including diskettes containing any such data), and all amendments and
modifications thereof; and
(j) any and all replacements and renewals of or additions and
substitutions to any of the foregoing and all proceeds of any of the foregoing.
TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the use and benefit of Mortgagee, and its successor and assigns,
forever, and Mortgagor does hereby bind itself, its successors and assigns to
WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto Mortgagee
and its successors and assigns;
AND, TO PROTECT THE SECURITY OF THIS MORTGAGE, Mortgagor represents
and warrants to and covenants and agrees with Mortgagee as follows:
1. DEFINED TERMS. The following terms, when used herein, shall
have the meanings set forth below:
"ENVIRONMENTAL LAWS" means any and all present and future federal,
state or local laws, statutes, ordinances or regulations, any judicial or
administrative orders, decrees or judgments thereunder, and any permits,
approvals, licenses, registrations, filings and authorizations, in each case as
now or hereafter in effect, relating to the protection of the environment, the
impact of Hazardous Substances or the generation, disposal or remediation
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thereof on human health or safety, or the Release or threatened Release of
Hazardous Substances or otherwise relating to the Use of Hazardous Substances.
For purposes of this definition, (A) "HAZARDOUS SUBSTANCES" means collectively,
(i) any petroleum or petroleum products or waste oils, explosives, radioactive
materials, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls ("PCBS"), and lead-based paint, (ii) any chemicals or other materials
or substances which are now or hereafter become defined as or included in the
definitions of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic
substances", "toxic pollutants", "contaminants", "pollutants" or words of
similar import under any Environmental Law and (iii) any other chemical or any
other material or substance, exposure to which is now or hereafter prohibited,
limited or regulated under any Environmental Law; (B) "USE" means, with respect
to any Hazardous Substance, the generation, manufacture, processing,
distribution, handling, use, treatment, recycling or storage of such Hazardous
Substance or transportation of such Hazardous Substance; and (C) "RELEASE" means
any release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment (including, without limitation, the movement of Hazardous Substances
through ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata).
"GOVERNMENTAL AUTHORITY" means any national or federal government, any
state, regional, local or other political subdivision thereof with jurisdiction
and any Person with jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government (including
without limitation any court).
"IMPOSITIONS" means all taxes (including, without limitation, all real
estate, ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible transaction privilege,
privilege or license or similar taxes), assessments (including, without
limitation, all assessments for public improvements or benefits, whether or not
commenced or completed within the term of this Mortgage), ground rents, water,
sewer or other rents and charges, excises, levies, fees (including, without
limitation, license, permit, inspection, authorization and similar fees), and
all other governmental impositions and other charges (including, without
limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Mortgaged Property), in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, of every character
in respect of the Mortgaged Property, which at any time prior to, during or in
respect of the term hereof may be assessed or imposed on or in respect of or be
a lien upon (i) Mortgagor (including, without limitation, all income, franchise,
single business or other taxes imposed on Mortgagor for the privilege of doing
business in the jurisdiction in which the Mortgaged Property is located),
(ii) the Mortgaged Property, or any part thereof or any revenues therefrom or
any estate, right, title or interest therein, or (iii) any occupancy, operation,
use or possession of, or sales from, or activity conducted on, or in connection
with the Mortgaged Property by Mortgagor or the leasing or use of the Mortgaged
Property or any part thereof by Mortgagor.
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"LEGAL REQUIREMENTS" means (i) all governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities (including, without limitation, Environmental Laws)
affecting either the Borrower or any Property or any part thereof or the
construction, ownership, use, alteration or operation thereof, or any part
thereof (whether now or hereafter enacted and in force), (ii) all permits,
licenses and authorizations and regulations relating thereto, and (iii) all
covenants, conditions and restrictions contained in any instruments at any time
in force (whether or not involving Governmental Authorities) affecting the
Mortgaged Property or any part thereof which, in the case of this clause (iii),
require repairs, modifications or alterations in or to the Mortgaged Property or
any part thereof, or in any material way limit or restrict the existing use and
enjoyment thereof.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code, as
adopted, enacted and amended from time to time by the state or states where any
of the Mortgaged Property is located.
2. PAYMENT OF OBLIGATIONS AND INCORPORATION OF COVENANTS, CONDITIONS
AND AGREEMENTS. Mortgagor will pay the Obligations at the time and in the
manner provided in the Relevant Documents and in this Mortgage. All the
representations, warranties, covenants, conditions and agreements of Mortgagor
contained in the Relevant Documents are hereby made a part of this Mortgage to
the same extent and with the same force as if fully set forth herein. If there
shall be any inconsistencies between the terms, covenants, conditions and
provisions set forth in this Mortgage and the terms, covenants, conditions and
provisions set forth in the Relevant Documents, then the terms, covenants,
conditions and provisions of the Relevant Documents shall prevail.
3. WARRANTY OF TITLE. Mortgagor warrants that Mortgagor has good,
marketable and insurable fee simple title to Land and the Improvements and has
good title to the remainder of the Mortgaged Property and has the full power,
authority and right to execute, deliver and perform its obligations under this
Mortgage and to encumber, mortgage, give, grant, bargain, sell, alienate,
enfeoff, convey, confirm, warrant, pledge, assign and hypothecate the Mortgaged
Property and that Mortgagor possesses an unencumbered fee estate in the Land and
the Improvements and that it owns the Mortgaged Property free and clear of all
liens, encumbrances and charges whatsoever except for (x) those exceptions to
title which are existing on the date hereof and approved by Mortgagee and (y)
those exceptions of title that are permitted under the other terms and
conditions of this Mortgage (collectively, the "PERMITTED ENCUMBRANCES") and
that this Mortgage is and will remain a valid and enforceable first lien on and
security interest in the Mortgaged Property, subject
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only to the Permitted Encumbrances. Mortgagor shall forever warrant, defend and
preserve such title and the validity and priority of the lien of this Mortgage
and shall forever warrant and defend the same to Mortgagee against the claims of
all persons whomsoever.
4. TAXES. Mortgagor hereby warrants, covenants and agrees to pay
before any penalty attaches all real property taxes, general and special, and
all other taxes and assessments of any kind or nature whatsoever, against the
Mortgaged Property when due and shall, upon written request, furnish to
Mortgagee duplicate receipts therefor, Mortgagor may, in good faith and with
reasonable diligence, contest the validity or amount of any such taxes or
assessments provided that such contest shall have the effect of preventing the
collection of the tax or assessment so contested and the sale or forfeiture of
said Mortgaged Property or any part thereof, or any interest therein, to satisfy
the same.
5. INDEMNIFICATION. Mortgagor shall indemnify, defend and hold
harmless Mortgagee from and against all of the following (collectively, and
individually referred to as a "LOSS"): claims, demands, causes of action,
judgments, costs, expenses, liabilities, losses and damages (including
consequential and punitive damages), reasonable attorneys' fees and expenses and
court costs, disbursements and court costs, and all risk of damage to property
and injury to persons in or upon the Mortgaged Property, arising from: (i)
Mortgagor's use of the Property or from the conduct of its business in or about
the Mortgaged Property; (ii) Mortgagor's default or breach of any term under
this Mortgage; and (iii) Mortgagor's violation or failure to comply with any
Legal Requirements, including Environmental Laws; provided that Mortgagor shall
not be liable for Loss arising from Mortgagee's negligence or willful misconduct
or from Mortgagee's breach of any of its obligations hereunder.
6. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY. Subject to
Section 50 hereof and except as may otherwise be permitted hereunder or pursuant
to the Relevant Documents, Mortgagor shall not sell, convey, alienate, mortgage,
encumber, pledge or otherwise transfer the Mortgaged Property or any part
thereof or any of its interest therein. Mortgagee shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Obligations immediately due and
payable upon Mortgagor's conveyance, alienation, mortgage, encumbrance, pledge
or transfer of the Mortgaged Property in violation of this Mortgage or any other
Relevant Document. This provision shall apply to every sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Mortgaged Property
that is not permitted pursuant to the Relevant Documents, regardless of whether
voluntary or not, or whether or not Mortgagee has consented to any previous
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property.
7. AMENDMENT TO LEGAL DESCRIPTION. If it becomes evident that the
legal description attached to any Relevant Document is inaccurate or does not
fully describe all of the real property which is reasonably connected to the
Land, Mortgagor hereby agrees to an amendment of such legal description and the
legal description contained on the corresponding
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title policy so that such error is corrected and to execute and cause to be
recorded, if applicable, such document as may be appropriate for such purpose.
8. ASSIGNMENT OF LEASES AND RENTS. Mortgagor does hereby absolutely
and unconditionally assign to Mortgagee, Mortgagor's right, title and interest
in all current and future Leases and Rents, it being intended by Mortgagor that
this assignment constitutes a present, absolute assignment and not an assignment
for additional security only. Such assignment to Mortgagee shall not be
construed to bind Mortgagee to the performance of any of the covenants,
conditions or provisions contained in any such Lease or otherwise impose any
obligation upon Mortgagee. Mortgagee shall have no responsibility on account of
this assignment for the control, care, maintenance, management or repair of the
Mortgaged Property, for any dangerous or defective condition of the Mortgaged
Property, or for any negligence in the management, upkeep, repair or control of
the Mortgaged Property. Mortgagor agrees to execute and deliver to Mortgagee
such additional instruments, in form and substance satisfactory to Mortgagee, as
may hereafter be requested by Mortgagee to further evidence and confirm such
assignment. Nevertheless, subject to the terms of this paragraph, Mortgagee
grants to Mortgagor a revocable license to collect all of the Rents and retain,
use and enjoy the same and otherwise exercise all rights of Mortgagor under any
Lease, in each case, subject to the terms hereof and of the Relevant Documents.
Upon an Event of Default (hereinafter defined), the license granted to Mortgagor
herein shall immediately and automatically be revoked, and Mortgagee shall
immediately be entitled to possession of all Rents, whether or not Mortgagee
enters upon or takes control of the Mortgaged Property, provided that if such
Event of Default ceases to exist, the license shall automatically be reinstated.
In addition, during the continuation of an Event of Default, Mortgagee may,
either in person or by agent, without bringing any action or proceeding, or by a
receiver appointed by a court, without the necessity of taking possession of the
Mortgaged Property in its own name, and in addition to and without limiting any
of Mortgagee's rights and remedies hereunder, under the Notes and any other
Relevant Documents and as otherwise available at law or in equity, (a) notify
any lessee or other person that the Leases have been assigned to Mortgagee and
that all Rents are to be paid directly to Mortgagee, whether or not Mortgagee
has commenced or completed foreclosure or taken possession of the Mortgaged
Property; (b) settle, compromise, release, extend the time of payment of, and
make allowances, adjustments and discounts of any Rents or other obligations in,
to and under the Leases; (c) demand, xxx for or otherwise collect, receive, and
enforce payment of Rents, including those past-due and unpaid and other rights
under the Leases, prosecute any action or proceeding, and defend against any
claim with respect to the Rents and Leases; (d) enter upon, take possession of
and operate the Mortgaged Property; (e) lease all or any part of the Mortgaged
Property; and/or (f) perform any and all obligations of Mortgagor under the
Leases and exercise any and all rights of Mortgagor therein contained to the
full extent of Mortgagor's rights and obligations thereunder, with or without
the bringing of any action or the appointment of a receiver and without need for
any other authorization or other action by Mortgagee or Mortgagor. At
Mortgagee's request, Mortgagor shall deliver a copy of this assignment to each
tenant under a Lease and to each manager and managing agent or operator of the
Mortgaged Property. Mortgagor irrevocably
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directs any tenant, manager, managing agent, or operator of the Property,
without any requirement for notice to or consent by Mortgagor, to comply with
all demands of Mortgagee under this Section 8 and to turn over to Mortgagee on
demand all Rents which it receives. Mortgagor hereby acknowledges and agrees
that payment of any Rents by a person to Mortgagee as hereinabove provided shall
constitute payment by such person, as fully and with the same effect as if such
Rents had been paid to Mortgagor. Mortgagee is hereby granted and assigned by
Mortgagor the right, at its option, upon revocation of the license granted
herein, to enter upon the Mortgaged Property in person or by agent, without
bringing any action or proceeding, or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license shall be applied
towards the payment of the Obligations. Neither the enforcement of any of the
remedies under this Section 8 nor any other remedies or security interests
afforded to Mortgagee under the Relevant Documents, at law or in equity shall
cause Mortgagee to be deemed or construed to be a Mortgagee in possession of the
Mortgaged Property, to obligate Mortgagee to lease the Mortgaged Property or
attempt to do so, or to take any action, incur any expense, or perform or
discharge any obligation, duty or liability whatsoever under any of the Leases
or otherwise. Mortgagor shall, and hereby agrees to indemnify Mortgagee for, and
to hold Mortgagee harmless from and against, any and all claims, liability,
expenses, losses or damages which may or might be asserted against or incurred
by Mortgagee solely by reason of Mortgagee's status as an assignee pursuant to
the assignment of Rents and Leases contained herein, but excluding any claim (a)
to the extent caused by Mortgagee's gross negligence or willful misconduct, or
(b) to the extent arising solely from Mortgagee's actions after Mortgagee has
taken possession of the Mortgaged Property. Should Mortgagee incur any such
claim, liability, expense, loss or damage, the amount thereof, including all
actual expenses and reasonable fees of attorneys, shall constitute Obligations
secured hereby, and Mortgagor shall reimburse Mortgagee therefor immediately
upon demand. Mortgagor agrees that all Leases shall be subject to the prior
written approval of Mortgagee, such approval not to be unreasonably withheld.
9. MAINTENANCE OF MORTGAGED PROPERTY. Mortgagor shall cause the
Mortgaged Property to be maintained in a good and safe condition and repair
(subject to ordinary wear and tear), and shall otherwise operate and maintain
the Mortgaged Property in a manner consistent with the manner in which it
operates and maintains the other properties on which it operates similar
businesses ("SIMILAR PROPERTIES"). Except as otherwise permitted by the
Relevant Documents, the Improvements, the Fixtures and the equipment located on
the Land or the Improvements shall not be removed, demolished or materially
altered (except for normal replacement of equipment) without the consent of
Mortgagee which shall not unreasonably be withheld or delayed. Mortgagor shall
comply with all laws, orders and ordinances affecting the Mortgaged Property, or
the use thereof. Except to the extent that Mortgagee fails to turn over
insurance proceeds, if any, received by Mortgagee pursuant to Sections 10 and 11
with respect to such Mortgaged Property to Mortgagor, Mortgagor shall promptly
repair, replace or rebuild any part of the Mortgaged Property that, following
the date hereof, becomes damaged, worn or dilapidated and Mortgagor shall
complete and pay for any structure at any time in the process of construction or
repair on the
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Land. Notwithstanding anything to the contrary contained herein, Mortgagor
hereby confirms its obligation to comply with all relevant Legal Requirements,
including Environmental Laws, with respect to the Mortgaged Property. Mortgagor
shall not initiate, join in, acquiesce in, or consent to any change in any
private restrictive covenant, zoning law or other public or private restriction,
limiting or defining the uses which may be made of the Mortgaged Property or any
part thereof, unless Mortgagor shall have received Mortgagee's prior written
consent, such consent not to be unreasonably withheld or delayed. If under
applicable zoning provisions the use of all or any portion of the Mortgaged
Property is or shall become a nonconforming use, Mortgagor will not cause such
nonconforming use to be discontinued or abandoned without the express written
consent of Mortgagee, such consent not to be unreasonably withheld or delayed.
Mortgagor shall not (i) change the use of the Land in any material respect or
(ii) permit or suffer to occur any waste on or to the Mortgaged Property or to
any portion thereof.
10. INSURANCE. (a) Mortgagor shall maintain casualty, liability
and other policies of insurance relating to the Mortgaged Property in form and
substance, and with insurers and coverages, reasonably satisfactory to Mortgagee
and consistent with insurance that it maintains on Similar Properties.
Mortgagor shall keep the Mortgaged Property insured against loss by flood if the
Mortgaged Property is located in an area identified by the Secretary of Housing
and Urban Development as an area having a special flood hazards and in which
flood insurance has been made available under the National Flood Insurance Act
of 1968 (or any successor act thereto). All policies of insurance to be
furnished hereunder (i) shall have standard non-contributory Mortgagee clauses
attached to all policies in favor of Mortgagee, without contribution, under a
standard New York (or local equivalent) Mortgagee clause naming Mortgagee as the
party to which all payments made under such insurance policies in excess of
$150,000 should be paid, (ii) shall contain an endorsement providing that
neither Mortgagor nor Mortgagee nor any other party shall be a co-insurer under
said policies and shall contain a provision requiring that the coverage
evidenced thereby shall not be terminated or materially modified without ten
(10) days prior written notice to Mortgagee, (iii) shall provide that no act or
thing done by Mortgagor shall invalidate the policy as against Mortgagee, and
(iv) with respect to property insurance policies, shall contain a waiver of
subrogation against Mortgagee. Mortgagor shall deliver certificates evidencing
additional and renewal policies, together with evidence of payment of premiums
thereon, to Mortgagee, and in the case of all insurance about to expire, shall
deliver renewal policies or certificates evidencing such policies not less than
ten (10) days prior to their respective dates of expiration.
(b) Mortgagor shall not take out separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
hereunder unless Mortgagee is included thereon under a standard,
non-contributory Mortgagee clause acceptable to Mortgagee. Mortgagor shall
promptly notify Mortgagee whenever any such separate insurance is taken out and
shall promptly deliver to Mortgagee the certificates evidencing the policy or
policies of such insurance.
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(c) The insurance required by this Mortgage, at the option of
Mortgagor, may be effected by blanket and/or umbrella policies covering the
Mortgaged Property and other properties, provided, however, that in each case,
such insurance policies otherwise comply with the provisions of this Mortgage
and allocate to the Mortgaged Property, from time to time, the coverage
specified in this Mortgage without possibility of reduction or co-insurance by
reason of, or damage to, any other property named therein. If the insurance
required by this Mortgage shall be effected by any such blanket or umbrella
policies, Mortgagor shall furnish to Mortgagee certificates with respect to,
with schedules attached thereto showing the amount of the insurance provided
under such policies which is applicable to the Mortgaged Property.
(d) If Mortgagor fails to maintain insurance in compliance with this
Section, Mortgagee may obtain such insurance and pay the premium therefor and
Mortgagor shall, on demand, reimburse Mortgagee for all expenses incurred in
connection therewith. Mortgagor shall deliver original certificates to Mortgagee
of all insurance policies maintained pursuant to this Section 10. Each property
insurance policy shall name Mortgagee as Mortgagee, and loss payee with respect
to all casualty coverage and each liability policy shall name Mortgagee as an
additional insured thereunder.
11. CASUALTY. (a) Mortgagor shall give Mortgagee prompt notice of
any loss or damage to the Mortgaged Property.
(b) In case of loss or damage to the Mortgaged Property covered by
any of the insurance policies described in Section 10 above, Mortgagee (or,
after entry of decree of foreclosure, the purchaser at the foreclosure sale or
decree creditor, as the case may be) is hereby authorized at its option either
(i) to settle and adjust any claim under such insurance policies without the
consent of Mortgagor or (ii) to allow Mortgagor to settle and adjust such claim
(either jointly with Mortgagee or by Mortgagor alone, at Mortgagee's
discretion); provided that in either case Mortgagee shall, and is hereby
authorized to, collect and receipt for any such insurance proceeds.
Notwithstanding anything in the preceding sentence to the contrary, Mortgagee
agrees that it will allow Mortgagor to settle and adjust any claims under the
insurance policies which are in an amount less than $150,000, per incident of
loss, up to an aggregate amount of no greater than $300,000. The expenses
incurred by Mortgagee in the adjustment and collection of insurance proceeds
shall be included in the Obligations, and shall be reimbursed to Mortgagee upon
demand or may be deducted by Mortgagee from said insurance proceeds prior to
another application thereof. Interest on such amount shall accrue at the rate
of thirteen and one-half percent (13.5%) per annum, beginning ten (10) days
after Mortgagor receives notice of a request for payment of such amount from
Mortgagee, until such amount, plus interest, is paid in full.
(c) Mortgagee shall permit Mortgagor to apply the proceeds of
insurance policies received in connection with any casualty to pay for the cost
of restoring, repairing, replacing or rebuilding the loss or damage to the
Mortgaged Property resulting from the casualty ("RESTORATION") if: (i) there is
no Event of Default hereunder at the time of such
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application; (ii) restoration can, in the reasonable judgment of Mortgagee, be
completed prior to the maturity of the Obligations; and (iii) restoration can,
in the reasonable judgment of Mortgagee, be effected within two (2) years after
the date of such casualty and in such a manner so that the Mortgaged Property
will be of at least equal or greater value to the value than the Mortgaged
Property prior to such casualty. Otherwise, Mortgagee may elect in its sole
discretion to apply such proceeds either (x) towards payment of the Obligations,
notwithstanding the fact that the Obligations, or a portion thereof, may not
then be due and payable, or (y) to pay for the cost of Restoration. In all
events, disbursement of insurance proceeds by Mortgagee (or at Mortgagee's
election by a disbursing or escrow agent who shall be selected by Mortgagee and
whose fees shall be paid by Mortgagor), to pay the cost of restoration shall
require (i) evidence reasonably satisfactory to Mortgagee of the estimated costs
of Restoration, (ii) funds (or assurances reasonably satisfactory to Mortgagee
that such funds are available) sufficient in addition to the proceeds of
insurance to complete and fully pay for Restoration; and (iii) such architect's
certificates, waivers of lien, contractor's sworn statements, title insurance
endorsements, plats of surveys and such other evidences of cost, payment and
performance as Mortgagee may reasonably require and approve. Except to the
extent Mortgagee fails to turn over insurance proceeds, if any, received by
Mortgagee hereunder with respect to such casualty to Mortgagor, Mortgagor hereby
covenants to restore, repair, replace or rebuild the Improvements, to be of at
least equal value, and of substantially the same character as prior to such loss
or damage, all to be effected in accordance with plans, specifications and
procedures to be first submitted to and reasonably approved by Mortgagee, and
Mortgagor shall pay all costs of such restoring, repairing, replacing or
rebuilding.
12. EMINENT DOMAIN. Mortgagor warrants, covenants and agrees that
should the Mortgaged Property, or any part thereof or interest therein, be taken
or damaged by reason of any public improvement or condemnation proceeding, or in
any other manner, or should Mortgagor receive any notice of other information
regarding such proceeding, Mortgagor shall give written notice thereof within
five (5) business days to Mortgagee. Without Mortgagee's prior consent,
Mortgagor (1) shall not agree to any compensation or award, and (2) shall not
take any action or fail to take any action which would cause the compensation to
be determined. Mortgagee shall be entitled to: (1) all compensation, awards and
other payments or relief therefor, (2) to commence, appear in and prosecute in
its own name any action or proceedings, and (3) to make any compromise or
settlement in connection with such taking or damage. Mortgagor authorizes
Mortgagee to collect and receive such awards and compensation, to give proper
receipts and acquittances therefor and in Mortgagee's discretion to apply the
same toward the payment of the Obligations, notwithstanding the fact that the
Obligations, or a portion thereof, may not then be due and payable, or to the
restoration of the Mortgaged Property in accordance with the provisions set
forth in the penultimate sentence of Section 11(c) above. Mortgagor further
agrees to make, execute, and deliver to Mortgagee, at any time upon request,
free and clear of any encumbrance of any kind whatsoever, any and all further
assignments and other instruments deemed necessary by Mortgagee for the purpose
of validly and sufficiently assigning all
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compensations and awards made to Mortgagor for any taking, either permanent or
temporary, under any such proceeding.
13. RELEASE OF MORTGAGE. Mortgagee agrees to promptly and
unconditionally release this Mortgage as follows:
(a) in the event of a bona fide sale (other than a "SALE LEASEBACK"
or other similar financing transaction) of the Mortgaged Property to a third
party that is not affiliated with Mortgagor, provided that both of the following
conditions are satisfied: (i) neither Mortgagor nor any of its respective
affiliates continue to use or occupy the Mortgaged Property or any part thereof;
(ii) Mortgagor shall consult with Mortgagee prior to such sale and shall obtain
Mortgagee's prior written consent with respect to such sale and the sales price
(such consent not to be unreasonably withheld); and (iii) all of the proceeds of
such sale are applied towards repayment of the Obligations, notwithstanding the
fact that the Obligations, or a portion thereof, may not then be due and
payable.
(b) in the event that Mortgagee is paid in full for all amounts owing
to Mortgagee by Mortgagor and any of its former affiliated debtors, including
the indefeasible payment in full of the Obligations, and no amount is then owing
by one or more of the foregoing to Mortgagee pursuant to the Indenture, the
Notes or any other Relevant Documents.
14. CHANGES IN THE LAWS REGARDING TAXATION. If any law is enacted or
adopted or amended after the date of this Mortgage which imposes a tax, either
directly or indirectly, on the Obligations or Mortgagee's interest in the
Mortgaged Property, Mortgagor will pay such tax, with interest and penalties
thereon, if any, provided, however, that Mortgagor shall not be obligated to pay
any tax which is imposed on the net income of Mortgagee or franchise taxes or
doing business taxes imposed on Mortgagee. In the event that the payment of
such tax or interest and penalties by Mortgagor would be unlawful or taxable to
Mortgagee or unenforceable or provide the basis for a defense of usury, then in
any such event, Mortgagee shall have the option, by written notice of not less
than ninety (90) days, to declare the Obligations immediately due and payable.
15. NO CREDITS ON ACCOUNT OF THE OBLIGATIONS. (i) Mortgagor will not
claim or demand or be entitled to any credit or credits on account of the
Obligations for any part of the Impositions assessed against the Mortgaged
Property, or any part thereof, and (ii) no deduction shall otherwise be made or
claimed from the assessed value of the Mortgaged Property, or any part hereof,
for real estate tax purposes by reason of this Mortgage or the Obligations if
the effect of such deduction would impose on Mortgagee a tax, either directly or
indirectly, for which it otherwise would not have been liable.
16. DOCUMENTARY STAMPS. 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
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affixed to the Notes or this Mortgage, or impose any other tax or charge on the
same, Mortgagor will pay for the same, with interest and penalties thereon, if
any.
17. CONTROLLING AGREEMENT. It is expressly stipulated and agreed to
be the intent of Mortgagor and Mortgagee at all times to comply with applicable
state law or applicable United States federal law (to the extent that it permits
Mortgagee to contract for, charge, take, reserve, or receive a greater amount of
interest than under state law) and that this Section shall control every other
covenant and agreement in this Mortgage and the other Relevant Documents. If
the applicable law (state or federal) is ever judicially interpreted so as to
render usurious any amount called for under the Notes or under any of the other
Relevant Documents, or contracted for, charged, taken, reserved, or received
with respect to the Obligations, or if Mortgagee's exercise of the option to
accelerate the maturity of the Notes, or if any prepayment by Mortgagor results
in Mortgagor having paid any interest in excess of that permitted by applicable
law, then it is Mortgagor's and Mortgagee's express intent that all excess
amounts theretofore collected by Mortgagee shall be credited on the principal
balance of the Notes and all other Obligations (or, if the Notes and all other
Obligations have been or would thereby be paid in full, refunded to Mortgagor),
and the provisions of the Notes and the other Relevant Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new documents, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid or agreed to
be paid to Mortgagee for the use, forbearance, or detention of the Obligations
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Obligations until
payment in full so that the rate or amount of interest on account of the
Obligations does not exceed the maximum rate of interest permitted by law from
time to time in effect and applicable to the Obligations for so long as the
Obligations are outstanding.
18. PERFORMANCE OF OTHER AGREEMENTS. Mortgagor shall observe and
perform in all respects the terms to be observed or performed by Mortgagor under
any agreement or recorded instrument affecting or pertaining to the Mortgaged
Property.
19. RIGHT TO PERFORM THE OBLIGATIONS. Subject to the terms of the
Relevant Documents, if any default exists, Mortgagee shall have the right, but
not the obligation, to cure such default in the name and on behalf of Mortgagor.
All sums advanced and expenses incurred at any time by Mortgagee under this
Section 19, or otherwise under this Mortgage or any of the other Relevant
Documents or applicable law (including, without limitation, the costs and
expenses of Mortgagee and its agents incurred in connection with the
preservation, collection and enforcement of this Mortgage or of the liens
created hereby), shall bear interest from the date that such sum is advanced or
expense incurred, to and including the date of reimbursement, computed at the
rate of thirteen and one-half percent (13.5%) per annum, and all such sums,
together with interest thereon, shall constitute additions to the Obligations
and shall be secured by this Mortgage and Mortgagor covenants and agrees to pay
them to the order of the Mortgagee promptly upon demand.
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20. FURTHER ACTS, ETC. Mortgagor will, at the cost of Mortgagor, and
without expense to Mortgagee, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, Uniform Commercial Code financing statements or continuation
statements, transfers and assurances as Mortgagee shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Mortgagee the property and rights hereby mortgaged, given,
granted, bargained, sold, alienated, enfeoffed, conveyed, confirmed, warranted,
pledged, assigned and hypothecated (including, without limitation, the
assignment of leases and rents contained in Section 8 hereof) or intended now or
hereafter so to be, or which Mortgagor may be or may hereafter become bound to
convey or assign to Mortgagee, or for carrying out the intention or facilitating
the performance of the terms of this Mortgage or for filing, registering or
recording this Mortgage. Mortgagor, on demand, will execute and deliver and,
Mortgagor hereby authorizes Mortgagee to execute in the name of Mortgagor or
without the signature of Mortgagor to the extent Mortgagee may lawfully do so,
one or more financing statements, chattel mortgages or other instruments, to
evidence more effectively the security interest of Mortgagee in the Mortgaged
Property. Notwithstanding anything to the contrary contained herein, Mortgagor
shall not be obligated to execute, deliver, file or record any additional
documents which increase Mortgagor's obligations under this Mortgage or the
Relevant Documents. Mortgagor grants to Mortgagee an irrevocable power of
attorney coupled with an interest for the purpose of exercising the rights
provided for in Section 19 and this Section 20.
21. RECORDING OF MORTGAGE, ETC. Mortgagor forthwith upon the
execution and delivery of this Mortgage and thereafter, from time to time, will
cause this Mortgage, and any security instrument creating a lien or security
interest or evidencing the lien hereof upon the Mortgaged Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Mortgagee in, the Mortgaged Property.
Mortgagor will pay all filing, registration or recording fees, the costs and
fees of local counsel for Mortgagee including, without limitation, costs and
fees for local counsel review of this Mortgage and the Subordination Agreement
(hereinafter defined) and the preparation of opinion letters in connection
therewith, and all expenses incident to the preparation, execution and
acknowledgment of this Mortgage, any deed of trust or mortgage supplemental
hereto, any security instrument with respect to the Mortgaged Property and 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 execution and delivery of this Mortgage, any deed of trust or mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance (other than income or franchise
taxes imposed on Mortgagee), except where prohibited by law so to do. Mortgagor
shall hold harmless and indemnify Mortgagee, its successors and assigns, against
any liability incurred by reason of the imposition of any tax on the making and
recording of this Mortgage. Mortgagor shall pay all title costs and premiums in
connection with the ALTA lender's title insurance policy issued by Chicago Title
Insurance Company for the benefit of
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Mortgagee in connection with this Mortgage (including payment for the cost of
any property surveys ("SURVEYS") prepared in connection therewith), which title
insurance policy shall be in form and substance satisfactory to Mortgagee
containing such endorsements as Mortgagee may reasonably request, including,
without limitation, the deletion of any creditor's rights exception and (to the
extent available) a variable rate endorsement; survey endorsement; comprehensive
endorsement; first loss endorsement; last dollar endorsement; tie-in
endorsement; future advances endorsement; access coverage; tax parcel coverage;
contiguity (if applicable) coverage; and such other endorsements as Mortgagee
shall reasonably require. In the event that any Survey with respect to the
Mortgaged Property reveals any encumbrances, restrictions, building code or
zoning violations or other matters which in Mortgagee's reasonable judgment
materially impair Mortgagee's security interest in the Mortgaged Property,
Mortgagor agrees to cooperate with Mortgagee in performing any acts reasonably
requested by Mortgagee to cause such encumbrances, restrictions, violations or
other matters to be removed or remedied as appropriate.
22. REPORTING REQUIREMENTS. Mortgagor agrees to give prompt notice
to Mortgagee of the insolvency or bankruptcy filing of Mortgagor. In addition,
Mortgagor will give notice to Mortgagee in writing not later than ten (10) days
after: (i) the occurrence of any Event of Default with respect to Mortgagor
hereunder, or (ii) notice to Mortgagor of any action, litigation or proceeding
instituted to recover possession of the Mortgaged Property from Mortgagor or for
any other purpose affecting this Mortgage or of any other action, litigation or
proceeding instituted against Mortgagor or judgment rendered against Mortgagor;
and such notice to Mortgagee shall include a true copy of any notice of default,
or if any action is then proceeding, copies of any pleadings and papers received
by Mortgagor.
23. EVENTS OF DEFAULT. The term "EVENT OF DEFAULT" as used herein
shall mean the occurrence or happening, at any time and from time to time, of
one or more of the following events:
(a) a default or event of default under any of the Notes, which
remains uncured following the expiration of any applicable cure periods;
(b) Mortgagor (i) shall fail to perform when due any payment
obligation under the terms of this Mortgage or the other Relevant Documents
within ten days after such amount becomes due, or (ii) shall be in violation of
any of the obligations or covenants contained herein or therein and such default
shall continued unremedied for a period of thirty (30) days, provided that if
such default is not readily susceptible of cure in such thirty (30) day period,
and provided that Mortgagor proceeds in a diligent manner to cure such default,
Mortgagor shall have such additional time to effect such cure as shall be
reasonably necessary to effect such cure; or
(c) Failure by Mortgagor to maintain insurance and deliver evidence
thereof pursuant to Section 10;
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(d) a default under any other mortgage, deed of trust or other
security instrument covering the Mortgaged Property or a portion thereof which
remains uncured following the expiration of any applicable cure periods; or
(e) the occurrence of an Event of Default under the Indenture.
24. REMEDIES. (a) Upon the occurrence of any Event of Default,
Mortgagee may take such action permitted in law or at equity, without notice or
demand, as it deems advisable to protect and enforce its rights against
Mortgagor and in and to the Mortgaged Property, by Mortgagee itself or
otherwise, including, but not limited to, the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such order as
Mortgagee may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:
(i) declare the entire principal amount of the indebtedness and
Obligations secured hereby with interest accrued thereon to be immediately
due and payable;
(ii) institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the complete foreclosure of
this Mortgage in which case the Mortgaged Property or any interest therein
may be sold for cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner in accordance with the
laws of the jurisdiction in which such Mortgaged Property is located;
(iii) with or without entry, to the extent permitted, and
pursuant to the procedures provided by, applicable law, institute
proceedings for the foreclosure of this Mortgage for the Obligations then
due and payable subject to the continuing lien of this Mortgage, in
accordance with the laws of the jurisdiction in which such Mortgaged
Property is located, for the balance of the Obligations not then due;
(iv) sell for cash or upon credit the Mortgaged Property or any
part thereof and all estate, claim, demand, right, title and interest of
Mortgagor therein and rights of redemption thereof, pursuant to power of
sale or otherwise, at one or more sales, as an entirety or in parcels, at
such time and place, upon such terms and after such notice thereof as may
be required or permitted by the laws of the jurisdiction in which such
Mortgaged Property is located;
(v) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein or in the other Relevant Documents;
(vi) recover judgment on the Notes either before, during or after
any proceedings for the enforcement of this Mortgage;
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(vii) prior to, concurrently with, or subsequent to the
institution of foreclosure proceedings, apply for the appointment of a
trustee, receiver, liquidator or conservator of the Mortgaged Property, as
a matter of strict right, without notice and without regard for the
adequacy of the security for the Obligations or the interest of the
Mortgagor therein and without regard for the solvency of the Mortgagor or
of any person, firm or other entity liable for the payment of the
Obligations, and Mortgagor hereby consents to such appointment;
(viii) prior to, concurrently with or subsequent to the
institution of foreclosure proceedings, enforce Mortgagee's interest in the
Leases and Rents and enter into or upon the Mortgaged Property and take
exclusive possession thereof, either personally or by its agents, nominees
or attorneys and dispossess Mortgagor and its agents and servants
therefrom, and thereupon Mortgagee may (whether or not a receiver has been
appointed) as attorney-in-fact or agent of Mortgagor, or in its own name
and under the powers herein granted,(A) use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and every
part of the Mortgaged Property and conduct the business thereat; (B)
complete any construction on the Mortgaged Property in such manner and form
as Mortgagee deems advisable; (C) make alterations, additions, renewals,
replacements and improvements to or on the Mortgaged Property; (D) exercise
all rights and powers of Mortgagor with respect to the Mortgaged Property,
whether in the name of Mortgagor or otherwise (including, without
limitation, the right to make, cancel, enforce or modify Leases, obtain and
evict tenants, and demand, xxx for, collect and receive all earnings,
revenues, rents, issues, profits and other income of the Mortgaged Property
and every part thereof); and (E) apply the receipts from the Mortgaged
Property to the payment of the Obligations, after deducting therefrom all
reasonable expenses (including, without limitation, reasonable attorneys'
fees) incurred in connection with the aforesaid operations and all amounts
necessary to pay the taxes, assessments, insurance and other charges in
connection with the Mortgaged Property, it being agreed that should
Mortgagee incur any liability, loss or damage in the defense of any claims
or demands, the amount thereof, including costs, expenses and reasonable
attorneys' fees shall be secured hereby, and Mortgagor shall reimburse
Mortgagee therefor immediately upon demand;
(ix) require Mortgagor to pay monthly in advance to Mortgagee, or
any receiver appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of any portion of the Mortgaged Property
occupied by Mortgagor and require Mortgagor to vacate and surrender
possession to Mortgagee of the Mortgaged Property or to such receiver and,
in default thereof, evict Mortgagor by summary proceedings or otherwise;
and
(x) pursue such other rights and remedies as may be available
under the Relevant Documents or otherwise at law or in equity or under the
Uniform
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Commercial Code including the right to establish a lock box for all Rents
and other receivables of Mortgagor relating to the Mortgaged Property.
In the event of a sale, by foreclosure or otherwise, of less than all
of the Mortgaged Property, this Mortgage shall continue as a lien on the
remaining portions of the Mortgaged Property.
The proceeds of any sale made under or by virtue of this Section 24,
together with any other sums which then may be held by Mortgagee under this
Mortgage, whether under the provisions of this Section or otherwise, shall be
applied by Mortgagee in the following order of priority: first, on account of
all reasonable costs and expenses incident to the foreclosure proceedings,
including all such items as are mentioned in this Section 24; second, all other
items which under the terms hereof constitute secured indebtedness, which are
any amounts due under this Mortgage, or under the other Relevant Documents;
third, any surplus to Mortgagor, its successors or assigns, as their rights may
appear.
(b) Upon any sale made under or by virtue of this Section 24, whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may
bid for and acquire the Mortgaged Property or any part thereof and in lieu of
paying cash therefor may make settlement for the purchase price by crediting
upon the Obligations the net sales price after deducting therefrom the expenses
of the sale and costs of the action and any other sums which Mortgagee is
authorized to deduct under this Mortgage.
(c) recovery of any judgment by Mortgagee and no levy of an execution
under any judgment upon the Mortgaged Property or upon any other property of
Mortgagor shall affect in any manner or to any extent the lien of this Mortgage
upon the Mortgaged Property or any part thereof, or any liens, rights, powers or
remedies of Mortgagee hereunder, but such liens, rights, powers and remedies of
Mortgagee shall continue unimpaired as before.
(d) Mortgagee may adjourn, terminate or rescind any proceeding or
other action brought in connection with its exercise of the remedies provided in
this Section 24 at any time before the conclusion thereof, as determined in
Mortgagee's sole discretion and without prejudice to Mortgagee.
(e) Mortgagee may resort to any remedies and the security given by
this Mortgage or the other Relevant Documents in whole or in part, and in such
portions and in such order as determined by Mortgagee's sole discretion. No
such action shall in any way be considered a waiver of any rights, benefits or
remedies evidenced or provided by this Mortgage or the other Relevant Documents.
The failure of Mortgagee to exercise any right, remedy or option provided in
this Mortgage or the other Relevant Documents shall not be deemed a waiver of
such right, remedy or option or of any covenant or obligation secured by this
Mortgage or the other Relevant Documents. Subject to the provisions of the
Relevant
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Documents, no acceptance by Mortgagee of any payment after the occurrence of any
Event of Default and no payment by Mortgagee of any obligation for which
Mortgagor is liable hereunder shall be deemed to waive or cure any Event of
Default with respect to Mortgagor, or Mortgagor's liability to pay such
obligation. No sale of all or any portion of the Mortgaged Property, no
forbearance on the part of Mortgagee and no extension of time for the payment of
the whole or any portion of the Obligations or any other indulgence given by
Mortgagee to Mortgagor, shall operate to release or in any manner affect the
interest of Mortgagee in the remaining Mortgaged Property or the liability of
Mortgagor to pay the Obligations. No waiver by Mortgagee shall be effective,
unless it is in writing and then only to the extent specifically stated.
(f) The interests and rights of Mortgagee under this Mortgage and the
other Relevant Documents, and the liens and security interests created and
evidenced by this Mortgage and the other Relevant Documents, shall not be
impaired by any indulgence, including (i) any renewal, extension or modification
which Mortgagee may grant with respect to any of the Obligations, (ii) any
surrender, compromise, release, renewal, extension, exchange or substitution
which Mortgagee may grant with respect to the Mortgaged Property or any portion
thereof; or (iii) any release or indulgence granted to any maker, endorser,
guarantor or surety of any of the Obligations.
(g) Upon the occurrence of any Event of Default under Section 23, in
any suit to foreclose the lien hereof or enforce any other remedy of Mortgagee
under this Mortgage, there shall be allowed and included as additional
indebtedness in the decree for sale or other judgment or decree all reasonable
expenditures and expenses which may be paid or incurred by or on behalf of
Mortgagee for attorneys' fees, appraiser's 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 the decree) of procuring
all such abstracts of title, title searches and examinations, title insurance
policies, Torrens certificates, and similar data and assurances with respect to
title as Mortgagee may deem reasonably necessary either to prosecute such suit
or to evidence to bidders at any sale which may be had pursuant to such decree
the true condition of the title to or the value of the Mortgaged Property. All
such reasonable expenditures and expenses which Mortgagee may incur as permitted
by this Section for the protection of the Mortgaged Property and the maintenance
of the lien of this Mortgage, including, but not limited to, the fees and
out-of-pocket disbursements of any attorney employed by Mortgagee in any
litigation or proceeding affecting this Mortgage, including, but not limited to,
bankruptcy proceedings or preparations for the commencement or defense of any
proceeding or threatened suit or proceeding, shall be immediately due and
payable by Mortgagor and shall be secured by this Mortgage.
25. RIGHT OF ACCESS. Mortgagor shall permit agents, representatives
and employees of Mortgagee to (i) inspect the Mortgaged Property or any part
thereof, provided that such inspection does not materially interfere with the
tenants of the Mortgaged Property or violate the terms of any Lease, (ii) to
examine and make abstracts from any of Mortgagor's books and records and (iii)
to discuss the business, operations, properties and
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financial and other condition of Mortgagor with officers of Mortgagor and with
its independent certified public accountants, at such reasonable times as may be
requested by Mortgagee upon reasonable advance notice.
26. SECURITY AGREEMENT. This Mortgage is both a real property
mortgage/deed of trust and a "SECURITY AGREEMENT" within the meaning of the
Uniform Commercial Code. The Mortgaged Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Mortgagor in the Mortgaged Property. Mortgagor by executing and
delivering this Mortgage has granted and hereby grants to Mortgagee, as security
for the Obligations, a security interest in the Mortgaged Property to the full
extent that the Mortgaged Property may be subject to the Uniform Commercial Code
(said portion of the Mortgaged Property so subject to the Uniform Commercial
Code being called in this paragraph the "COLLATERAL"). Mortgagor hereby agrees
with Mortgagee to execute and deliver to Mortgagee, in form and substance
satisfactory to Mortgagee, such financing statements and such further assurances
as Mortgagee may from time to time, reasonably consider necessary to create,
perfect, and preserve Mortgagee's security interest herein granted. All or part
of the Mortgaged Property is or is to become "FIXTURES" as defined in the
Uniform Commercial Code, and this Mortgage, upon being filed for record in the
real estate records of the city or county wherein such fixtures are situated,
shall also constitute a "FIXTURE FILING" for the purposes of the Uniform
Commercial Code upon such of the Mortgaged Property that is or may become
fixtures. Information concerning the security interest herein granted may be
obtained from the parties at the addresses of the parties set forth in the first
paragraph of this Mortgage. Mortgagor's chief executive office and principal
place of business is the Mortgagor's address set forth in the first paragraph of
this Mortgage, and the place where Mortgagor's books and records in respect of
where the Mortgaged Property is located are kept is the address of Mortgagor set
forth in the first paragraph of this Mortgage. If an Event of Default shall
occur which shall remain uncured, Mortgagee, 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, to the extent
permitted by law, the right to take possession of the Collateral or any part
thereof, and to take such other measures as Mortgagee may deem necessary for the
care, protection and preservation of the Collateral). Upon request or demand of
Mortgagee, Mortgagor shall at its expense assemble the Collateral and make it
available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor
shall pay to Mortgagee on demand therefor any and all reasonable expenses
(including, without limitation, reasonable legal expenses and attorneys' fees)
incurred or paid by Mortgagee 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 Mortgagee with respect to the
Collateral sent to Mortgagor at least ten (10) business days prior to such
action or such notice as is otherwise required by law or the Relevant Documents,
shall constitute commercially reasonable notice to Mortgagor. The proceeds of
any disposition of the Collateral, or any part thereof, may be applied by
Mortgagee to the payment of the Obligations in such priority and proportions as
Mortgagee shall determine in
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its sole discretion. In the event of any change in name, identity or structure
of Mortgagor, Mortgagor shall notify Mortgagee thereof and, promptly after
request, shall execute, file and record such Uniform Commercial Code forms as
are necessary to maintain the priority of Mortgagee's lien upon and security
interest in the Collateral, and shall pay all expenses and fees in connection
with the filing and recording thereof. If Mortgagee shall require the filing or
recording of additional Uniform Commercial Code forms or continuation
statements, Mortgagor shall, promptly after request, execute, file and record
such Uniform Commercial Code forms or continuation statements as Mortgagee shall
deem necessary, and shall pay all expenses and fees in connection with the
filing and recording thereof, it being understood and agreed, however, that no
such additional documents shall materially increase Mortgagor's obligations
under this Mortgage or the other Relevant Documents. Mortgagor hereby
irrevocably appoints Mortgagee as its attorney-in-fact, coupled with an
interest, to file with the appropriate public office on its behalf any UCC
financing statements (or related documents) signed only by Mortgagee, as secured
party, in connection with the Collateral covered by this Mortgage, such
appointment to terminate upon the release of this Mortgage.
27. ACTIONS AND PROCEEDINGS. Mortgagee has the right to appear in
and defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its reasonable discretion, decides should be
brought to protect its interest under this Mortgage or in the Mortgaged
Property. Subject to the foregoing, Mortgagor shall appear in and contest any
action or proceeding purporting to affect the security hereof and shall pay all
reasonable costs and expenses including cost of evidence of title and attorney's
fees, in any such action or proceeding in which Mortgagee may appear. Mortgagee
shall, at its option, be subrogated to the lien of any mortgage or other
security instrument discharged in whole or in part by the Obligations, and any
such subrogation rights shall constitute additional security for the payment of
the Obligations.
28. WAIVER OF SETOFF AND COUNTERCLAIM. Except as may be permitted
under the Relevant Documents, all amounts due under this Mortgage, the Notes and
the other Relevant Documents shall be payable without setoff or counterclaim
whatsoever.
29. LIENS. Mortgagor warrants, covenants and agrees to pay and
promptly discharge, at Mortgagor's cost and expense, all taxes, assessments and
governmental charges levied upon it, its income and assets as and when such
taxes, assessments and charges are due and payable (including, without
limitation, all Impositions), as well as all lawful claims for labor materials
and supplies or otherwise which could become a lien, and all liens, encumbrances
and charges upon the Mortgaged Property, or any part thereof or interest
therein; provided that the existence of any mechanic's, laborer's,
materialman's, supplier's or vendor's lien or right thereto shall not constitute
a violation of this Section if payment is not yet due under the contract which
is the foundation thereof. Notwithstanding the foregoing, Mortgagor shall not
be in default for failure to pay or discharge Impositions or mechanic's or
materialman's or similar lien asserted against the Mortgaged Property if, and so
long as, (a) Mortgagor shall have notified Mortgagee of same within seven (7)
days of
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obtaining knowledge thereof; (b) Mortgagor shall diligently and in good faith
contest the same by appropriate legal proceedings which shall operate to prevent
the enforcement or collection of the same and the sale of the Mortgaged Property
or any part thereof, to satisfy the same; (c) unless funds are otherwise
reserved, Mortgagor shall furnish to Mortgagee such security as Mortgagee may
reasonably request to insure payment of such Impositions and to secure and
indemnify Mortgagee against any cost, expense, loss or damage in connection with
such contest or postponement of payment,; (d) Mortgagor shall timely upon final
determination thereof pay the amount of any such Impositions, claim, fine or
penalty so determined, together with all costs, interest and penalties which may
be payable in connection therewith; (e) the failure to pay the Impositions, or
mechanic's or materialman's or similar lien claim does not constitute a default
under any other deed of trust, mortgage or security interest covering or
affecting any part of the Mortgaged Property; and (f) notwithstanding the
foregoing, Mortgagor shall immediately upon request of Mortgagee pay (and if
Mortgagor shall fail so to do, Mortgagee may, but shall not be required to, pay
or cause to be discharged or bonded against) any such Impositions, or claim
notwithstanding such contest, if in the reasonable opinion of Mortgagee, the
Mortgaged Property or any part thereof or interest therein may be in imminent
danger of being sold, forfeited, foreclosed, terminated, canceled or lost.
30. RECOVERY OF SUMS REQUIRED TO BE PAID. Mortgagee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Obligations as the same become due and owing, without
regard to whether or not the balance of the Obligations shall be due, and
without prejudice to the right of Mortgagee thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Mortgagor
existing at the time such earlier action was commenced.
31. MARSHALING, WAIVER OF REDEMPTION AND OTHER MATTERS. Mortgagor
hereby waives, to the extent permitted by law, the benefit of all appraisement,
valuation, stay, extension, reinstatement, moratorium and redemption laws now or
hereafter in force and all rights of marshaling in the event of any sale
hereunder of the Mortgaged Property or any part thereof or any interest therein.
Further, Mortgagor hereby expressly waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Mortgage on behalf of
Mortgagor, and on behalf of each and every person acquiring any interest in or
title to the Mortgaged Property subsequent to the date of this Mortgage and on
behalf of all persons to the extent permitted by applicable law.
32. NOTICE. Any notice which either party hereto may desire or be
required to give to the other party shall be in writing and delivered by: (x) a
commercial courier or messenger service or (y) by U.S. registered or certified
mail with return receipt requested. Notice by commercial messenger or courier
service will be deemed to have been given on the day when delivered before 4:00
p.m. on a business day in the city in which notice is delivered, provided that
payment for the cost of delivery is not requested of the recipient. Notice by
mail shall be given by registered or certified U.S. Mail, return receipt
requested. Delivery of notice by commercial messenger or courier service or
mail shall be assumed if
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acceptance of delivery is refused. Notice may be given by fax but will only be
treated as delivered hereunder if: (x) sent between the hours of 9:00 a.m. and
5:00 p.m. (based on local time at the destination); and (y) receipt is
acknowledged by fax and delivery will be deemed to have been given on the date
the fax acknowledgment is sent. Notices shall be delivered as follows or at
such other place as either party hereto may by notice in writing (given in
accordance with this Section 32) designate:
To Mortgagor: Discovery Zone, Inc.
One Corporate Center
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: President
Telecopy Number: (000) 000-0000
To Mortgagee: State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Telecopy Number: (000) 000-0000
33. SOLE DISCRETION OF MORTGAGEE. Wherever pursuant to this
Mortgage, Mortgagee exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Mortgagee, the decision of
Mortgagee to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Mortgagee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
34. NON-WAIVER. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Mortgage. Mortgagor shall not be relieved of Mortgagor's Obligations
hereunder by reason of (a) the failure of Mortgagee to comply with any request
of Mortgagor to take any action to foreclose this Mortgage or otherwise enforce
any of the provisions hereof or of the other Relevant Documents, (b) the
release, regardless of consideration, of the whole or any part of the Mortgaged
Property, or of any person liable for the Obligations or any portion thereof, or
(c) any agreement or stipulation by Mortgagee extending the time of payment or
otherwise modifying or supplementing the terms of this Mortgage or the other
Relevant Documents. Mortgagee may resort for the payment of the Obligations to
any other security held by Mortgagee in such order and manner as Mortgagee, in
its discretion, may elect. Mortgagee may take action to recover the
Obligations, or any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Mortgagee thereafter to foreclosure this Mortgage.
The rights and remedies of Mortgagee under this Mortgage shall be separate,
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of Mortgagee shall be construed as an election to proceed under
any one provision herein to the exclusion of any other provision. Mortgagee
shall not be limited exclusively to the rights
-24-
and remedies herein stated but shall be entitled to every right and remedy now
or hereafter afforded at law or in equity.
35. NO ORAL CHANGE. This Mortgage and the other Relevant Documents
constitute the entire agreement among the parties pertaining to the subject
matter hereof and thereof and supersede all prior and contemporaneous
agreements, understanding, representations or other arrangements, whether
express or implied, written or oral, of the parties in connection herewith or
therewith except to the extent expressly incorporated or specifically referred
to herein or therein. This Mortgage, and any provisions hereof, may not be
modified, amended, waived, extended, changed, discharged or terminated orally or
by any act or failure to act on the part of Mortgagor or Mortgagee, 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.
36. SUCCESSORS AND ASSIGNS. Subject to the provisions hereof
requiring Mortgagee's consent to any transfer of the Mortgaged Property, this
Mortgage shall be binding upon and inure to the benefit of Mortgagor and
Mortgagee and their respective permitted successors and assigns forever.
37. SEVERABILITY. If any term, covenant or condition of this
Mortgage or the Relevant Documents is held to be invalid, illegal or
unenforceable in any respect, this Mortgage and any such other Relevant Document
shall be construed without such provision.
38. HEADINGS, ETC. The headings and captions of various paragraphs
of this Mortgage are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
39. DUPLICATE ORIGINALS. This Mortgage may be executed in any number
of duplicate originals and each such duplicate original shall be deemed to be an
original.
40. DEFINITIONS. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage may be used interchangeably in singular or plural form and the word
"MORTGAGOR" shall mean "each Mortgagor and any subsequent owner or owners of the
Mortgaged Property or any part thereof or any interest therein," the word
"MORTGAGEE" shall mean "Mortgagee and any subsequent holder(s) of the Notes,"
the word "PERSON" shall include an individual, corporation, partnership, trust,
unincorporated association, government, governmental authority, and any other
entity, and the words "MORTGAGED PROPERTY" shall include any portion of the
Mortgaged Property and any interest therein and the words "ATTORNEYS' FEES"
shall include any and all attorneys' fees, paralegal and law clerk fees
(including, without limitation, fees at the pre-trial, trial and appellate
levels incurred or paid by Mortgagee in protecting its interest in the Mortgaged
Property and Collateral and enforcing its rights hereunder including, but not
limited to, all such fees incurred in connection with any bankruptcy or other
insolvency proceedings). Whenever the context may require, any
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pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
41. HOMESTEAD. Mortgagor hereby waives and renounces all homestead
and exemption rights provided by the constitution and the laws of the United
States and of any state, in and to the Land as against the collection of the
Obligations, or any part hereof.
42. ASSIGNMENTS. Mortgagee shall have the right to assign or
transfer its rights under this Mortgage without limitation. Any Mortgagee or
transferee shall be entitled to all the benefits afforded Mortgagee under this
Mortgage.
43. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW EACH PARTY HERETO HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF
ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY
TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO
THE NOTES, THIS MORTGAGE, OR THE OTHER RELEVANT DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY SUCH PARTY, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. MORTGAGEE IS HEREBY AUTHORIZED
TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF
THIS WAIVER BY MORTGAGOR.
44. CONSENT TO JURISDICTION. MORTGAGOR AND MORTGAGEE HERETO CONSENT
FOR THEMSELVES AND IN RESPECT OF THEIR PROPERTIES, GENERALLY, UNCONDITIONALLY
AND IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE
COURTS IN THE STATE OF NEW YORK WITH RESPECT TO ANY PROCEEDING RELATING TO ANY
MATTER, CLAIM OR DISPUTE ARISING UNDER THE RELEVANT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY. MORTGAGOR FURTHER CONSENTS, GENERALLY,
UNCONDITIONALLY AND IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS OF THE STATE IN WHICH ANY OF THE COLLATERAL IS LOCATED IN
RESPECT OF ANY PROCEEDING RELATING TO ANY MATTER, CLAIM OR DISPUTE ARISING WITH
RESPECT TO SUCH COLLATERAL. MORTGAGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS, GENERALLY, UNCONDITIONALLY AND IRREVOCABLY, AT THE ADDRESSES
SET FORTH IN THE FIRST PARAGRAPH HEREOF IN CONNECTION WITH ANY OF THE AFORESAID
PROCEEDINGS IN ACCORDANCE WITH THE RULES APPLICABLE TO SUCH PROCEEDINGS. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, MORTGAGOR HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW HAVE OR HAVE IN THE FUTURE TO THE LAYING OF VENUE IN
RESPECT
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OF ANY OF THE AFORESAID PROCEEDINGS BROUGHT IN THE COURTS REFERRED TO ABOVE AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF MORTGAGEE TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW OR TO COMMENCE PROCEEDINGS OR OTHERWISE PROCEED AGAINST
MORTGAGOR IN ANY JURISDICTION.
45. GOVERNING LAW. This Mortgage shall be governed by and construed
in accordance with the laws of the State of New York including, without
limitation, Section 5-1401 of the General Obligations Law, but otherwise without
regard to conflict of law principles; provided, however, that with respect to
the creation, attachment, perfection, priority and procedures relating to the
enforcement of the liens and security interests created by or pursuant to this
Mortgage and relating to real property, this Mortgage shall be governed by and
construed in accordance with the laws of the state in which the Land is located.
46. LIEN ABSOLUTE, MULTI-SITE REAL ESTATE AND MULTIPLE COLLATERAL
TRANSACTION. Mortgagor acknowledges that this Mortgage and a number of other
Relevant Documents and those documents required by the Relevant Documents
together secure the Obligations. Mortgagor agrees that the lien of this
Mortgage and all obligations of the Mortgagor hereunder shall be absolute and
unconditional and shall not in any manner be affected or impaired by:
(a) any lack of validity or enforceability of the Notes or any other
Relevant Document, any agreement with respect to any of the Obligations or any
other agreement or instrument relating to any of the foregoing;
(b) any acceptance by Mortgagee of any security for or guarantees of
any of the indebtedness hereby secured;
(c) any failure, neglect or omission on the part of Mortgagee to
realize upon or protect any of the indebtedness hereby secured or any of the
collateral security therefor, including the Relevant Documents;
(d) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations;
(e) any release (except as to the property or obligation released),
sale, pledge, surrender, compromise, settlement, non-perfection, renewal
extension, indulgence, alteration, exchange, modification or disposition of any
of the Obligations hereby secured or of any of the collateral security therefor;
-27-
(f) any amendment or waiver of or any consent to any departure from
the Notes or any other Relevant Documents or of any guaranty thereof (except to
the extent of such amendment, waiver or consent in writing by Mortgagee), if
any, and Mortgagee may in its discretion foreclose, exercise any power of sale,
or exercise any other remedy available to it under any or all of the Relevant
Documents without first exercising or enforcing any of its rights and remedies
hereunder; and
(g) any exercise of the rights or remedies of Mortgagee hereunder or
under any or all of the Relevant Documents.
Mortgagor specifically consents and agrees that Mortgagee may exercise
its rights and remedies hereunder and under the other Relevant Documents
separately or concurrently and in any order that Mortgagee may deem appropriate.
47. FUTURE ADVANCES. This Mortgage shall secure not only existing
indebtedness, but also such future advances, whether such advances are
obligatory or are to be made at the option of Mortgagee, or otherwise, as are
made by Mortgagee to Mortgagor after the date hereof, to the same extent as if
such future advances were made on the date of the execution of this Mortgage.
Nothing in this Mortgage shall be deemed an obligation on the part of the
Mortgagee to make any future advances.
48. STATE SPECIFIC PROVISIONS. The provisions of Exhibit B are
hereby incorporated by reference as though set forth in full herein.
49. NO MERGER OF ESTATES. It is the intention and agreement of
Mortgagor and Mortgagee that there shall be no merger of any leasehold estate in
the Mortgaged Property with the fee interest in the Mortgaged Property or any
other estate or interest in the Mortgaged Property, and there shall be no merger
of this Mortgage and any estate in the Mortgaged Property, by reason of the fact
that the same person may own or hold (a) any leasehold interest in the Mortgaged
Property, and/or (b) this Mortgage, and/or (c) the fee interest in the Mortgaged
Property or any other estate or interest in the Mortgaged Property.
50. SUBORDINATION. Notwithstanding anything to the contrary
contained herein, this Mortgage shall be subject and subordinate to that certain
amended and restated mortgage, assignment of leases and rents, security
agreement and fixture filing, dated as of the date hereof, made by Mortgagor in
favor of XxXxxxxx'x Corporation, including any extension, modification,
replacement or renewal thereof, in accordance with the provisions of that
certain Subordination Agreement, dated as of the date hereof, by and among
Mortgagor, Mortgagee, and XxXxxxxx'x Corporation (the "SUBORDINATION
AGREEMENT'), including any extension, modification, replacement or renewal
thereof.
51. GOOD STANDING. Mortgagor is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization.
Mortgagor is qualified to do business and in good standing in the State in which
the Mortgaged Property is located, and to
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the extent that Mortgagor is not so qualified or in good standing in such State,
Mortgagor shall promptly qualify to do business and become in good standing in
such State and shall promptly present evidence of such qualification to do
business and good standing to Mortgagee, and shall in any event take such steps
as are necessary to insure the enforceability of the Notes and this Mortgage.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE AND NOTARY PAGES FOLLOW.]
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IN WITNESS WHEREOF, this Mortgage has been duly executed under seal by
the Mortgagor as of the day and year first written above.
MORTGAGOR:
DISCOVERY ZONE, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
STATE OF NEW YORK )
COUNTY OF WESTCHESTER )
The foregoing was acknowledged before me this 28th day of July, 1997,
by Xxxxxx X. Xxxxxx, Senior Vice President of DISCOVERY ZONE, INC., a
corporation under the laws of Delaware on behalf of the corporation.
NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RANK)
[Notary Seal] /s/ Xxxx X. Xxxxxxxx
-----------------------------
Signature of Person Taking
Acknowledgment
THIS INSTRUMENT WAS DRAFTED BY (NAME AND ADDRESS)
Xxxxxx X. Xxxxx, Esq.
Xxxxxxxx Kill & Olick, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
EXHIBIT A
---------
LEGAL DESCRIPTION
Xxx 0, Xxxxx 0, Xxxxxxxxxxx Xxxx Second Addition, according to the plat thereof
file or record in the office of the County Recorder, Anoka County, Minnesota,
together with the appurtenant easement(s) contained in Document No. 952364.
EXHIBIT B
STATE SPECIFIC PROVISIONS
The following provisions are incorporated by reference into Section 48 of
the attached Mortgage. If any conflict or inconsistency exists between this
Exhibit B and the remainder of the attached Mortgage, this Exhibit B shall
govern. Notwithstanding anything in this Mortgage to the contrary, the
following provisions shall apply:
A. all Rents and revenues collected by Mortgagee or any receiver
following an Event of Default shall be applied as follows:
1. to the payment of all reasonable fees of any receiver approved by
court;
2. to the payment of all tenant security deposits then owing to any
lessee under any Lease pursuant to the provisions of Minn. Stat. Section 504.20;
3. to the payment of all prior real estate taxes and special
assessments with respect to the Mortgaged Property, or if this Mortgage requires
periodic escrow payments for such taxes and assessments, to the escrow payments
then due;
4. to the payment of all premiums then due for the insurance
required by the provisions of this Mortgage, or if this Mortgage requires
periodic escrow payments for such premiums, to the escrow payments then due;
5. to the payment of costs incurred in normal maintenance and
operation of the Mortgaged Property;
6. if received prior to any foreclosure sale of the Mortgaged
Property, to the Mortgagee for the payment of indebtedness secured by this
Mortgage, but no such payment made after the acceleration of the indebtedness
shall affect such acceleration;
7. if received during or with respect to the period of redemption
after a foreclosure sale of the Mortgaged Property:
(a) if the purchaser at the foreclosure sale is not the
Mortgagee, first to the Mortgagee to the extent of any deficiency of the
sale proceeds to repay the indebtedness secured by this Mortgage, second to
the purchaser as a credit to the redemption price, but if the Mortgaged
Property is not redeemed, then to the purchaser of the Mortgaged Property;
and
(b) if the purchaser at the foreclosure sale is the
Mortgagee, to the Mortgagee to the extent of any deficiency of the sale
proceeds to repay the
B-1
indebtedness secured by this Mortgage and the balance to be retained by the
Mortgagee as a credit to the redemption price, but if the Mortgaged
Property is not redeemed, then to the Mortgagee, whether or not such
deficiency exists.
The rights and power of the Mortgagee under this Mortgage and the application of
Rents and revenue under this Subsection (A) shall continue until the expiration
of the redemption period from any foreclosure sale, whether or not any
deficiency remains after a foreclosure.
B. The Mortgagor represents and warrants that as of the date of this
Mortgage the Mortgaged Property is not in agricultural use as defined in Minn.
Stat. Section 40A.02, Subd. 3 and is not used for agricultural purposes.
C. From the date of its recording in the State of Minnesota, this
Mortgage shall be effective as a financing statement filed as a financing
statement with respect to all goods constituting part of the Mortgaged Property
which are or are to become fixtures related to the real estate covered by this
Section. For this purpose the following information is included: (i) The
Mortgagor shall be deemed the "Debtor" with the address set forth in Section 32;
(ii) the Mortgagee shall be deemed the "Secured Party" with the address set
forth in Section 32; (iii) this document covers goods which are or are to become
fixtures; (iv) the name of the record owner of the real estate included in the
Mortgaged Property is the Mortgagor; and (v) the Mortgagor's Internal Revenue
Service Taxpayer I.D. number is 00-0000000.
D. This Mortgage is exempt from mortgage registration tax as being
issued under a plan of reorganization confirmed under Section 1129 of chapter
11, title 11, of the United States Code (the "BANKRUPTCY CODE"), pursuant to
Section 1146(c) of the Bankruptcy Code.
E. The Mortgagor hereby grants to Mortgagee the power of sale.
B-2
