EXHIBIT 10.19
MORTGAGE, ASSIGNMENT OF LEASES, RENTS, INCOME
AND PROFITS, SECURITY AGREEMENT AND FIXTURE FILING
A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SALE MAY
ALLOW THE LENDER (i.e., the MORTGAGEE) TO TAKE THE MORTGAGED PROPERTY AND
SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE
BORROWER (i.e., the MORTGAGOR UNDER THIS MORTGAGE).
THIS MORTGAGE, ASSIGNMENT OF LEASES, RENTS, INCOME AND PROFITS, SECURITY
AGREEMENT AND FIXTURE FILING (the "Mortgage") is executed actually and delivered
effective as of the 28th day of June, 2006, by and between AMS HEALTH
SCIENCES, INC., an Oklahoma corporation (referred to herein as the "Borrower"),
having a mailing address of 000 X.X. 00xx, Xxxxxxxx Xxxx, Xxxxxxxx 00000, and
LAURUS MASTER FUND, LTD., a Cayman Island company (referred to herein as the
"Lender"), having a mailing address in care of Laurus Capital Management, LLC,
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx Xxxxxx, XX 00000.
W I T N E S S E T H:
Borrower is justly indebted to Lender for the indebtedness and Obligations
(hereinafter defined);
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower does hereby MORTGAGE, WARRANT, GRANT,
CONVEY AND ASSIGN to Lender, with power of sale, all right, title and interest
of Borrower in and to:
A. The real estate located in Oklahoma County, Oklahoma, described in
Exhibit A attached hereto and incorporated herein by this reference (the
"Land");
B. All right, title and interest of Borrower in all buildings, foundations,
structures and improvements now or hereafter located on or in the Land, and all
materials now or hereafter intended for construction, reconstruction, alteration
or repair thereof, all of which shall be deemed a part thereof immediately upon
being delivered to the Land (collectively, the "Improvements");
C. All right, title and interest of Borrower now and hereafter in and to
the streets and roads, opened or proposed, abutting the Land, all strips and
gores within or adjoining the Land, the air space and right to use the air space
above the Land, all rights of ingress and egress to and from the Land, all
easements, rights of way, reversions, remainders, hereditaments, and
appurtenances now or hereafter affecting the Land or the Improvements, all
royalties and rights and privileges appertaining to the use and enjoyment of the
Land or the Improvements, including all air, lateral support, alley, drainage,
water, riparian, oil, gas and mineral rights, options to purchase or lease, and
all other interests, estates or claims, in law or in equity, which Borrower now
has or hereafter may acquire in or with respect to the Land or the Improvements
(collectively, the "Appurtenances"; the Land, the Improvements and the
Appurtenances are hereinafter sometimes collectively referred to as the
"Premises");
D. All right, title and interest of Borrower in all fixtures, equipment
(including but not limited to office equipment, motors, elevators, radiators,
gas and electric ranges, refrigerators, freezers, and plumbing, heating,
lighting, ventilating, refrigerating, incinerating, air conditioning, central
energy, sprinklering and fire suppression, waste disposal and theft protection
equipment), fittings, furniture, furnishings (including, but not limited to
awnings, shades, screens, blinds and carpets), appliances, apparatus, and
machinery now existing or hereafter installed in the Premises, and all building
materials, supplies and equipment now existing or hereafter delivered to the
Premises and intended to be installed therein, and all renewals or replacements
of any of the foregoing property or articles in substitution thereof
(collectively, the "Equipment");
E. All right, title and interest of Borrower whether now existing or
hereafter acquired in, to and under all accounts, documents, instruments,
chattel paper, and general intangibles, as the foregoing terms are defined in
the Uniform Commercial Code in effect in the state in which the Land is located
(the "UCC"), that are derived from the Premises or Equipment, including, to the
extent assignable, all contract rights (including, without limitation, under
contracts with all contractors, architects, engineers or subcontractors relating
to the construction or renovation of the Improvements or Equipment, including
payment, performance and materialmen's bonds), franchises, books, records,
plans, specifications, permits, licenses, approvals, actions and causes of
action, which in the case of any of the foregoing now or hereafter relate to,
are derived from or used in connection with the Premises or Equipment or the
use, operation, maintenance, occupancy or enjoyment thereof or the conduct of
any business or activities thereon (collectively, the "Intangibles");
F. All right, title and interest of Borrower, whether now existing or
hereafter acquired and wherever located, in, to and under all leases, lettings,
tenancies and licenses of the Premises or Equipment or any part thereof now or
hereafter entered into and all amendments, extensions, renewals and guaranties
thereof, all security therefor, and all moneys payable thereunder (each a
"Lease" and collectively, the "Leases");
G. All rents, income, issues and profits, security deposits and other
benefits to which Borrower may now or hereafter be entitled from the Premises,
the Equipment or the Intangibles or under or in connection with the Leases,
including, without limitation, all income received from tenants, lessees,
licensees and concessionaires and other persons occupying space at the Premises
and/or rendering services to tenants thereat (collectively, the "Property
Income"); and
H. All proceeds, judgments, claims, compensation, awards of damages and
settlements with respect to or hereafter made as a result of or in lieu of any
condemnation or taking of the Premises and/or Equipment by eminent domain
(including severance and consequential damages and change in grade of streets)
or any casualty loss of or damage to any of the Premises, the Equipment, the
Intangibles, the Leases or the Property Income, all refunds with respect to the
payment of property taxes and assessments, and all other proceeds of the
conversion, voluntary or involuntary, of the Premises, the Equipment, the
Intangibles, the Leases or the Property Income, or any part thereof, into cash
or liquidated claims (collectively, the "Proceeds"; the Equipment, the
Intangibles, the Leases, the Property Income and the Proceeds are hereinafter
collectively referred to as the "Collateral"; the Premises and the Collateral
being hereinafter sometimes collectively referred to as the "Mortgaged
Property").
TO HAVE AND TO HOLD the Mortgaged Property with all the privileges and
appurtenances to the same belonging, and with the possession and right of
possession thereof, unto Lender, its successors and assigns forever, upon the
terms and conditions set forth herein. Further, Borrower hereby grants to Lender
and confers upon Lender the power to sell the Mortgaged Property and the
interests of Borrower and all persons having any interest by, through or under
Borrower in the manner provided in the "Oklahoma Power of Sale Mortgage
Foreclosure Act" (46 O.S. xx.xx. 40-48), as the same may be amended from time to
time (the "Power of Sale Act").
The foregoing grant is expressly SUBJECT TO the lien of that certain
Mortgage dated December ___, 2005 from Borrower, as mortgagor, to Farmers State
Bank, recorded in Book 9945 at Page 1903 in the office of the County Clerk of
Oklahoma County, Oklahoma, covering the land and improvements (the "Prior
Mortgage") and securing the payment of that certain Promissory Note dated
November 11, 2003 executed by Heartland Cup, Inc. and payable to Farmers State
Bank in the original principal amount of $650,000.000, as modified by that
certain Assumption Agreement dated November 7, 2005 by, between and among
Farmers State Bank, Heartland Cup, Inc. and Borrower (collectively, the "Prior
Note").
The foregoing grant is for the purpose of securing to Lender the following
(the "Obligations"):
A. The repayment of the indebtedness evidenced by Borrower's Secured
Convertible Term Note of even date herewith, in the original principal sum of
Two Million and No/100 Dollars ($2,000,000.00) with interest thereon at the rate
stated therein (the "Contract Rate") with the balance of the principal sum, if
not sooner paid, to be due and payable on ____________, 2009, and all
modifications, extensions, renewals, replacements and restatements therein
(collectively, the "Note"), the terms of which are incorporated herein as if set
forth in full;
B. The payment of all other sums, with interest at the Default Rate set
forth in the Note, advanced in accordance with this Mortgage to protect the
security of this Mortgage;
C. The payment of all future advances and any additional amounts, with
interest thereon, that may hereafter be loaned by Lender to Borrower, which
additional loans are evidenced by a promissory note or notes containing a
recitation that this Mortgage secures the payment of such note or notes;
D. The payment and performance of all obligations of Borrower arising from
and set forth in (i) that certain Securities Purchase Agreement between Lender
and Borrower, (ii) that certain Master Security Agreement between Lender and
Borrower, (iii) that certain Stock Pledge Agreement between Borrower, Lender and
AMS Manufacturing, Inc., an affiliate of Borrower, (iv) that certain Common
Stock Purchase Agreement between Borrower and lender, (v) that certain
Registration Rights Agreement between Borrower and Lender, (vi) that certain
Funds Escrow Agreement between Lender, Borrower and Loeb & Loeb, (vii) that
certain Grant of Security Interest in Patents and Trademarks between Lender and
Borrow; and (viii) that certain Stock Purchase Warrant between Lender and
Borrower, all dated of even date herewith (all of which, together with the Note
and this Mortgage and any other present or future agreement executed in
connection with the transactions reflected in this Mortgage, are sometimes
collectively called the "Loan Documents").
AND BORROWER COVENANTS AND WARRANTS lawful seizure of an indefeasible
estate in fee simple of the Mortgaged Property; that the same are free from all
encumbrances and liens whatsoever, except for (i) easements and restrictions of
record on the date hereof, none of which materially interfere with the use of
the Mortgaged Property for the operation thereof intended by Borrower, (ii) the
lien of ad valorem real estate taxes and any assessments for which payment is
not delinquent in either case, and (iii) any liens expressly permitted by the
express terms of the Loan Documents, and (iii) the Prior Mortgage (the
encumbrances and liens described in the foregoing subsections (i) - (iii) are
referred to collectively as the "Permitted Exceptions"); that Borrower has the
legal right, power and authority to encumber the Mortgaged Property pursuant to
this Mortgage, the execution and delivery and the performance of which will not,
either immediately or with notice and/or passage of time, violate any agreement
to which Borrower is a party or by which Borrower is bound; and that Borrower
and the successors in interest of Borrower will forever WARRANT AND DEFEND the
title to the Mortgaged Property and the lien and priority of this Mortgage
against the claims and demands of all persons whomsoever. All such covenants and
warranties shall run with the land.
Borrower additionally represents and warrants to Lender that:
A. Borrower is a validly existing corporation organized under the laws of
the State of Oklahoma and is duly qualified to do business in Oklahoma and in
all other jurisdictions in which qualification is necessary in order to conduct
the business and affairs of Borrower.
B. The Guarantor is a validly existing corporation organized under the laws
of the State of Oklahoma and is duly qualified to do business in Oklahoma and in
all other jurisdictions in which qualification is necessary in order to conduct
the business and affairs of Guarantor.
C. The execution, delivery and performance by Borrower of this Mortgage (i)
are authorized by all documents (organizational and otherwise), agreements and
stipulations limiting the activities of Borrower, (ii) do not require approval
of any governmental authority, (iii) will not violate any provision of law, any
order of any court or any governmental authority, or any indenture, agreement or
other instrument to which Borrower is a party or by which Borrower or any of the
property of Borrower is bound.
D. There is no action, suit or proceeding pending or threatened against or
affecting Borrower or Guarantor or involving the validity of enforceability of
this Mortgage, including before or by any governmental authority, and neither
Guarantor nor Borrower is in default with respect to any order, writ, judgment,
decree or demand of any court or other governmental authority except as
previously disclosed in writing by Borrower to Lender.
E. If applicable, the financial statements of each Borrower and Guarantor
most recently delivered to Lender (i) are complete and correct in all material
respects, (ii) accurately represent the financial condition of Borrower or
Guarantor, as the case may be, as of their date and (iii) disclose all of
Borrower's material liabilities, direct or contingent, as of such date. There
has been no Adverse Change in Financial Condition of Borrower or Guarantor since
the date of such financial statement. The term "Adverse Change in Financial
Condition" means a decrease of twenty percent (20%) or more in aggregate net
worth; insolvency; bankruptcy; or prospective failure to meet current
liabilities as they come due.
F. Borrower has the right to enter into this Mortgage, the execution and
performance of which will not, either immediately, or with notice and/or passage
of time, result in the creation or imposition of any encumbrance upon any of the
Mortgaged Property except as granted hereby.
G. Borrower has obtained and there remain in full force and effect all
licenses, permits, consents, approvals and authorizations necessary or
appropriate for the management and operation of the Improvements.
AND BORROWER, IN ORDER MORE FULLY TO PROTECT THE SECURITY OF THIS MORTGAGE,
COVENANTS AND AGREES AS FOLLOWS:
1. Obligations Secured. This Mortgage is granted to secure the payment and
performance of the Obligations strictly in accordance with the terms thereof in
each case.
2. Payment and Performance of Obligations. Principal of, interest on, and
all other indebtedness and sums constituted by the Obligations shall be paid at
the times and in the manner provided herein and in the other Loan Documents.
3. Payment of Taxes and other Impositions. Borrower shall keep the
Mortgaged Property free from statutory liens of every kind; shall pay, before
delinquency and before any penalty for nonpayment attaches thereto, all taxes,
assessments and governmental or municipal or public levies, fees, charges, fines
or impositions of any nature whatsoever (collectively, the "Impositions") which
are or may be levied or imposed against or in connection with the Mortgaged
Property or any part thereof, except when payment for such items has theretofore
been made under the Section of this Mortgage entitled "Monthly Installments of
Taxes and Insurance"; shall deliver to Lender, on or before ten (10) days after
request made by Lender therefor, receipted bills evidencing payment therefor.
Notwithstanding the foregoing, so long as no default, and no circumstance which,
with any required notice and/or opportunity to cure would constitute a default
under the Obligations is subsisting, Borrower shall have the right to contest
the validity of any Imposition by appropriate legal proceedings provided (i)
Borrower notifies Lender of Borrower's intention to contest the same prior to
commencing such contest, (ii) such contest shall preclude enforcement of
collection out of or pursuant to the sale of any of the Mortgaged Property in
satisfaction of any Imposition, (iii) Borrower shall furnish Lender with, at the
option of Lender, a bond or title insurance or other security for the Imposition
satisfactory to Lender in Lender's sole discretion, (iv) such contest shall not
otherwise create a failure on the part of Borrower to comply with any other
provision or condition of the Loan Documents, and (iv) upon a final and
nonappealable determination of the contest that is adverse to the Borrower,
Borrower shall pay the amount of the Imposition.
4. Monthly Installments of Taxes and Insurance. If requested by Lender at
any time (i) after the occurrence of an Event of Default as defined in the
Security and Purchase Agreement of even date herewith between Borrower and
certain co-borrowers and Lender (including after any applicable requirement for
notice and an opportunity to cure) in any of the Obligations or (ii) after
payment of taxes or insurance in respect of the Mortgaged Property have become
delinquent (whether or not thereafter cured), Borrower shall pay to Lender, in
addition to the amounts of principal and interest and any other sums due under
the terms of the applicable instruments evidencing the Obligations, monthly on
or before the first day of each calendar month, until the Obligations are paid
in full, the following:
A sum equal to all taxes, assessments and all other impositions next due on
the Mortgaged Property, all as estimated in good faith by Lender, plus the
premiums that will next become due and payable on policies of fire and
other insurance covering the Mortgaged Property and required under the
terms of this Mortgage, less all sums already paid therefor in each case,
divided by the number of complete calendar months to elapse prior to the
date when such taxes, assessments, impositions and premiums shall be due
and payable.
All such payments described in this Section shall be held by Lender without
accruing and without any obligation arising for the payment of interest thereon
and Borrower waives any right, to the extent permitted by law, to demand or
receive any interest, income or profits on any of the payments so deposited with
Lender. Lender is hereby granted a security interest in all such amounts as
collateral for the Obligations and such sums shall be subject to setoff by
Lender following any default by Borrower (including after any applicable
requirement for notice and/or opportunity to cure) under this Mortgage or the
other Obligations.
5. Utilities. Borrower shall pay or cause to be paid all charges in respect
of all water, sewer, electricity, natural gas, telecommunications and all other
utilities consumed on the Mortgaged Property prior to the date when the same
would become delinquent, and shall provide Lender promptly after request is made
by Lender therefor with copies of paid receipts in respect of all utility
charges assessed against the Mortgaged Property.
6. Liability Insurance. Borrower shall carry and maintain such liability
and indemnity insurance as in good faith may be required from time to time by
Lender in forms, amounts and with companies reasonably satisfactory to Lender.
Certificates of such insurance, premiums prepaid, naming Lender as an additional
insured, and copies of such policies, shall be deposited, if requested by
Lender, by Borrower with Lender and shall contain provision for not less than
ten (10) days' notice to Lender prior to any cancellation or modification
thereof.
7. Hazard Insurance. Borrower shall keep or cause to be kept all
Improvements and Equipment, whether now existing or hereafter erected on the
Mortgaged Property, insured as may be required from time to time by Lender
against loss or damage by fire, hazards included within the term "broad form
coverage", rent loss, flood (if required by law), and such other hazards,
casualties, liabilities and contingencies in such amounts (not exceeding the
replacement value thereof except in all events sufficient to keep Borrower from
becoming a co-insurer) and for such periods as may be required by Lender
consistent with reasonable and customary commercial practice with regard to
similar properties or as otherwise required in good faith by Lender, and shall
pay promptly, when due, any premiums on such insurance policies. Lender shall
not unreasonably withhold approval of a policy form acceptable to the holder of
the Prior Note and Prior Mortgage.
All insurance policies shall be carried with companies having a Best rating
of A- or better and approved by Lender and such policies shall name Lender as a
lender loss payee pursuant to a "standard Oklahoma mortgage" or "New York
mortgagee" clause. Evidence that such policies are in force shall be delivered
to Lender on or before ten (10) days after request by Lender therefor. All such
policies shall contain provision for at least ten (10) days notice to Lender
prior to any cancellation or modification thereof.
Borrower shall not carry separate insurance, concurrent in kind or form and
contributing, in the event of loss, with any insurance required hereunder. In
the event of a change in the use and nature of occupancy of the Mortgaged
Property, immediate notice thereof by mail shall be delivered to all insurers
and Lender.
In the event of loss, Borrower will give immediate notice by mail to
Lender. Borrower hereby authorizes Lender, at its option, to collect, adjust and
compromise any losses under any of the insurance policies aforesaid if such
actions are not taken by the holder of the Prior Note and Prior Mortgage
(provided Lender in so adjusting and compromising any such losses acts in good
faith and not in a manner which, under the circumstances, diminishes the
recovery thereunder by an unreasonable amount), and after deducting all costs of
collection to apply the proceeds of such insurance.
Provided that no Event of Default then exists and provided the proceeds of
such insurance are not applied by the holder of the Prior Mortgage to the
indebtedness secured by the Prior Note and are not made available for repair and
restoration pursuant to applicable provisions and procedures set forth in the
Prior Mortgage (together with any moneys which may be deposited by Borrower with
Lender for the purpose of repair or restoration of the Mortgaged Property
promptly upon Borrower's becoming aware of any deficiency between the amount of
such insurance proceeds and the amount necessary to restore the Mortgaged
Property as hereinafter provided in this sentence) are sufficient to restore the
Mortgaged Property to the same or better condition as existed immediately prior
to the loss, then the following procedure shall apply for restoration and repair
of the Mortgaged Property: Lender shall disburse the proceeds of the insurance
for the sole purpose of repairing and restoring the Mortgage Property. If the
cost of such repair and restoration is reasonably estimated by Lender to exceed
$150,000.00, such repair and restoration shall, at the option of Lender, be
under the supervision of an architect or engineer reasonably acceptable to
Lender, shall be made pursuant to plans and specifications submitted to Lender
prior to the commencement thereof, and which shall be subject to Lender's
approval and which proceeds shall be disbursed by Lender from time to time only
upon certification by the architect or engineer that all of the work theretofore
completed was done in compliance with the plans and specifications approved by
Lender, that the sum requested is justly required to reimburse Borrower for
payments by Borrower to persons performing such work, that the amount of the
remaining proceeds shall be sufficient to pay for the repairs and restoration
remaining to be completed pursuant to the approved plans and specifications, and
containing such other certifications as Lender reasonably may request.
Disbursements by Lender shall also be subject to such other conditions,
including but not limited to waivers of lien and title insurance coverage, as
Lender in good xxxxx xxxxx necessary or appropriate.
Any excess proceeds remaining after completion of restoration or repair
shall be the property of and released to Borrower. Any proceeds retained by
Lender pending completion of restoration or repair shall be deposited by Lender
into an interest bearing account or invested in short term governmental
obligations and all interest earned on such account or obligations shall be the
property of and released to Borrower upon completion of such restoration or
repair.
After the occurrence of and during the continuance of an Event of Default,
or if any of the other conditions described above to the proceeds being made
available for restoration or repair are not met, the proceeds shall be applied
as a reduction upon all of the Obligations secured hereby, in such order as
Lender may elect; with the balance of any proceeds remaining after the
disposition of the proceeds as aforesaid to be paid to Borrower.
Upon acquisition of the Mortgaged Property by Lender in the event of
foreclosure of this Mortgage, or other transfer of title to the Mortgaged
Property in extinguishment of all or part of the Obligations secured hereby, all
right, title and interest of Borrower in and to any insurance policies then in
force shall pass to the purchaser or grantee of said property.
8. Condemnation. Borrower shall give Lender immediate notice of the actual
or threatened commencement of any proceedings under eminent domain affecting all
or any part of the Mortgaged Property, including severance and consequential
damage and change in grade of streets, and will deliver to Lender copies of any
and all papers served in connection with any such proceedings. Subject to the
provisions of the Prior Mortgage relating to the application of awards or
payments arising from a condemnation, Borrower further covenants and agrees to
make, execute and deliver to Lender, at any time or times upon request of
Lender, free, clear and discharged of any encumbrances of any kind whatsoever
(except for the rights of the holder of the Prior Mortgage), any and all further
assignments and/or other instruments deemed necessary or appropriate by Lender
for the purpose of validly and sufficiently assigning all awards and other
compensation, heretofore and hereafter to be made to Borrower (including the
assignment of any award from the United States Government at any time after the
allowance of the claim therefor, the ascertainment of the amount thereof and the
issuance of the warranty for payment thereof) for any taking, either permanent
or temporary, under any such proceedings. In the event of a total or partial
taking of the Mortgaged Property, the proceeds shall be applied first to the
sums secured by the Prior Mortgage, secondly to the sums secured by this
Mortgage, with the excess, if any, paid to Borrower, except that if the taking
is a partial taking, then subject to the provisions of the Prior Mortgage
relating to the application of such proceeds, Lender may apply the proceeds, or
any part thereof, at Lender's option, to the restoration or repair of the
Mortgaged Property.
9. Alterations; Repairs; Waste, Compliance with Laws; Inspection. No
additional Improvements shall be constructed on the Land, and no existing
Improvements shall be materially altered, or removed or demolished without the
prior written consent of Lender in each case. No Equipment shall be severed or
removed without the prior written consent of Lender except that Borrower may
replace in the ordinary course of business any Equipment with other Equipment at
least equal in quality and condition to that replaced, provided such
replacements are free from any security interest in or encumbrance thereon or
reservation of title thereto except for the lien of this Mortgage and any other
encumbrance which may be permitted by the express terms of the Loan Documents.
Borrower shall permit, commit, or suffer no waste, impairment or deterioration
of the Mortgaged Property or any part thereof; shall keep and maintain the same
in good repair and condition, reasonable wear and tear excepted; shall effect
such repairs as Lender may reasonably require, and from time to time to make all
needful and proper replacements so that said Mortgaged Property will, at all
times, be in fit and proper condition for the respective purposes for which they
were erected or installed. Borrower shall comply with or require compliance with
all statutes, regulations, codes, orders, requirements or decrees relating to
the Mortgaged Property (including but not limited to the Americans with
Disabilities Act) by any federal, state or municipal authority and, without
limitation of the foregoing, shall observe and comply with all conditions and
requirements necessary to preserve and extend any and all rights, licenses,
permits (including but not limited to zoning variances, conditional uses and
non-conforming uses), privileges, franchises and concessions which are
applicable to the Mortgaged Property or which have been granted to or contracted
for by Borrower in connection with any existing or presently contemplated use of
the Mortgaged Property. Borrower shall permit Lender, during business hours of
Borrower and at all other reasonable times, to enter upon and inspect the
Mortgaged Property.
10. Prohibition of Other Liens. Borrower shall not voluntarily create or
otherwise permit to be created or filed against the Mortgaged Property any
mortgage lien (except for the Prior Mortgage and any securing indebtedness to
Lender), or any statutory or other lien or liens, charge or encumbrance of any
nature, whether inferior or superior to the lien of this Mortgage, without the
prior written consent of Lender, except any which is one of the Permitted
Exceptions. Borrower will not permit any default (whether or not waived by the
applicable mortgagee) to occur under the Prior Mortgage or any other mortgage
(or under the indebtedness secured thereby, in each case) on all or any part of
the Mortgaged Property. Without limitation of the foregoing, Borrower shall keep
and maintain the Mortgaged Property free from the claims of all persons now or
hereafter supplying labor or materials thereto notwithstanding by whom such
labor or materials may have been contracted.
11. Indemnification of Lender. Borrower shall, to the fullest extent
permitted by applicable law, save Lender harmless from all losses, costs and
expenses, including reasonable attorneys' fees, and the cost of a title search,
continuation of abstract and preparation of survey, incurred by reason of any
action, suit, proceeding, hearing, motion or application before any court or
administrative body in and to which Lender may be or become a party by reason of
this Mortgage, including but not limited to condemnation, bankruptcy, probate
and administration proceedings, as well as any other of the foregoing wherein
proof of claim is by law required to be filed or in which it becomes necessary
to defend or uphold the terms of, or the lien created by, this Mortgage, and all
money paid or expended by Lender in that regard, together with interest thereon
from the date of such payment at the Contract Rate per annum from time to time
applicable under the Notes shall be part of the Obligations secured hereby and
shall be due and payable by Borrower immediately upon request made by Lender.
Borrower additionally hereby indemnifies and saves Lender harmless under this
Mortgage from and against all liabilities, obligations, claims, damages.
penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) imposed upon, incurred by, or asserted
against Lender on account of (i) any failure of the Borrower to comply with any
of the covenants and conditions on the part of Borrower to be performed or
representations of Borrower contained in this Mortgage, or (ii) any loss or
damage to the Mortgaged Property or any injury to, or death of, any person that
may be occasioned by any cause whatsoever pertaining to the Mortgaged Property
or the use thereof, provided that such indemnity shall be effective only to the
extent of any loss that may be sustained by Lender in excess of any net proceeds
of the insurance received by Lender from any insurance carried with respect to
such loss and provided further that the benefits of this Section shall not inure
to any person other than Lender and its successors and assigns. Nothing
contained in this Section shall require the Borrower to indemnify Lender against
the gross negligence or wantonly malicious acts of Lender. The indemnities
contained in this Section shall survive payment of the Obligations and the
release of this Mortgage, and shall extend to the officers, directors, employees
and duly authorized agents of Lender.
12. Books and Records. Borrower at all times shall keep and maintain
complete and accurate books of accounts and records adequate to reflect
correctly the results of the operation of the Mortgaged Property and copies of
all written contracts, leases, rental agreements, license agreements and other
instruments and agreements that affect the Mortgaged Property. Such books,
records, contracts, leases and other instruments and agreements shall be subject
to examination and inspection at any reasonable time by Lender, and Borrower
shall furnish Lender, at the cost of Borrower, with a copy of all or any of the
same promptly following any request therefor by Lender. Borrower shall furnish
to Lender, promptly upon request of Lender, a balance sheet and a statement of
income and expenses relating to the Mortgaged Property, in reasonable detail and
certified by Borrower as complete and accurate and, if Lender requires, at the
option of Lender, certified, reviewed or compiled by an independent certified
public accountant acceptable to Lender.
13. Right of Lender to Cure Defaults. Upon default in the performance of
any of the terms, covenants or conditions of this Mortgage or any of the other
Loan Documents, Lender may, at its option and whether or not electing to declare
the whole of the Obligations secured hereby due and payable, perform the same
without waiver of any other remedy, and any amount paid or advanced by Lender in
connection therewith, or any other costs, charges or expenses, including
reasonable attorney's fees, incurred in the protection of the Mortgaged Property
and the maintenance of the lien of this Mortgage, with interest thereon at the
Default Rate, shall be repayable by Borrower, immediately upon demand made by
Lender, shall be a lien upon the Mortgaged Property prior to any right, title
to, interest in, or claim thereon attaching or accruing subsequent to the
attachment of lien of this Mortgage and shall be secured by this Mortgage.
14. Authorized Determinations by Lender. Lender in making any payment
herein and hereby authorized, in the place and stead of Borrower (i) relating to
any Impositions, utility charges or liens or other claims asserted against or in
connection with the Mortgaged Property, may do so according to any xxxx,
statement or estimate procured from the appropriate public office or other
person or entity without inquiry into the accuracy thereof or the validity of
the Imposition, charge, lien or claim; or (ii) relating to any apparent or
threatened adverse title, lien, statement of lien, encumbrance, claim or charge,
shall be the sole judge of the legality or validity of same; or (iii) relating
to the expense of repairs or replacement of any Improvements or Equipment shall
be the sole judge of the state of repairs and the necessity for incurring the
expense of any such repairs or replacement; or (iv) otherwise relating to any
other purpose in and authorized by this Mortgage, but not enumerated in this
Section, may do so whenever, in the judgment and discretion of Lender, such
advance or advances shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage, and provided further that in
connection with any such advance, Lender, at the option of Lender, may and is
hereby authorized to obtain a continuation report of title prepared by a title
insurance company, the cost and expense of which shall be repayable by Borrower
immediately upon demand and shall be secured by this Mortgage.
15. Environmental Compliance. Borrower represents and warrants that: (i) no
hazardous or toxic substance or material or other waste ("Hazardous Substance")
as defined in or regulated under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss.9601, et.
seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss.6901, et. seq.),
The Oil Pollution Act of 1990 (33 U.S.C. ss.2701 et. seq.) or any other federal,
state or local law, order or regulation pertaining to health, safety, or the
environment (the "Environmental Laws") has ever been disposed, released,
discharged or spilled on or under any part of the Mortgaged Property, (ii) the
Mortgaged Property has never been used as a dump or landfill, (iii) no
litigation or administrative action or proceeding has been commenced or
threatened against Borrower or any subsidiary or affiliate of Borrower alleging
a violation of any Environmental Laws, and (iv) no underground storage tank,
polychlorinated biphenyls, asbestos, lead-based paint or urea formaldehyde is
located on or under or has been applied to any part of the Mortgaged Property or
contained in any Improvement or Equipment located on the Mortgaged Property.
Borrower will not permit any Hazardous Substance to be placed or stored in or
upon the Mortgaged Property except de minimis quantities if and, in such event,
as incident to the customary operations of Borrower on the Mortgaged Property,
and then only in compliance with all Environmental Laws. Without limitation of
the preceding sentence, Borrower covenants that the Mortgaged Property at all
times hereafter shall remain free from any contamination by any Hazardous
Substance and that Borrower at all times will comply with all Environmental Laws
affecting Borrower or the Mortgaged Property. Borrower shall notify Lender
promptly upon becoming aware of any contamination of the Mortgaged Property by
any Hazardous Substance, or upon being threatened with receipt of or receiving
any notice, citation, summons, complaint or other communication alleging
violation by Borrower of any Environmental Law or potential liability of
Borrower in connection with any Hazardous Substance. Lender and its agents,
including but not limited to environmental consultants and remediation
contractors engaged by Lender, shall have the right, but not the obligation, to
enter upon the Mortgaged Property at any time to inspect the same and take such
other action as Lender deems necessary or appropriate with respect to any actual
or threatened contamination of the Mortgaged Property by a Hazardous Substance
or any other circumstance relating to a Hazardous Substance or any Environmental
Law which in Lender's sole opinion could impair the security intended to be
afforded by this Mortgage or result in a claim against or liability of Lender,
and all costs and expenses, including reasonable attorneys' fees and the fees of
such consultants and contractors, incurred by Lender, in so doing shall be paid
by Borrower to Lender upon demand and be secured by the lien of this Mortgage
and bear interest at the Applicable Rate. Borrower hereby indemnifies Lender and
holds Lender wholly harmless from and against any and all losses, costs,
expenses (including but not limited to reasonable attorneys' fees), injuries,
damages, liabilities and claims of any kind whatsoever paid, incurred or
suffered by or asserted against Lender by any person or entity, including but
not limited to any governmental entity, whatsoever with respect to or as a
direct or indirect result of the presence heretofore, now or hereafter of any
Hazardous Substance on or under the Mortgaged Property, or the violation or
alleged violation heretofore, now or hereafter by Borrower or any subsidiary or
affiliate of Borrower of any Environmental Laws and, without limitation of the
foregoing, any inaccuracy of any representation or warranty by Borrower
contained in this Section or any breach by Borrower of or other default in the
covenants contained in this Section. The indemnification established under the
preceding sentence shall survive the maturity as well as the repayment or other
discharge of the Obligations secured by this Mortgage and any termination of
this Mortgage whether pursuant to repayment of the Obligations secured by it,
foreclosure, deed in lieu of foreclosure or otherwise, to the maximum extent
permitted by law. Borrower expressly acknowledges that any misrepresentation by
Borrower under this Section, or any failure of condition or breach of covenant
by Borrower or other default in any of the obligations of Borrower under this
Section shall be and constitute an immediate default under this Mortgage and
each of the other Loan Documents.
16. Default. The occurrence of any of the following events shall be an
event of default hereunder (an "Event of Default"):
A. The occurrence of an Event of Default as defined in the Security
and Purchase Agreement; or
B. An event of default occurs under the Prior Note or Prior Mortgage
which is not cured within applicable notice and cure periods.
All notice and cure periods provided herein or in any other Loan Document
shall run concurrently with any notice and cure periods provided by applicable
laws.
17. Rights and Remedies. At any time after an Event of Default, Lender
shall have all the following rights and remedies:
A. With or without notice, to declare all Obligations immediately due
and payable, without presentment or demand;
B. With or without notice, and without releasing Borrower or Guarantor
from any Obligation, and without becoming a mortgagee in possession, to
cure any breach or Event of Default of Borrower and, in connection
therewith, to enter upon the Mortgaged Property and do such acts and things
as Lender deems necessary or desirable to protect the security hereof,
including, without limitation: (i) to appear in and defend any action or
proceeding purporting to affect the security of this Mortgage or the rights
or powers of Lender under this Mortgage; (ii) to pay, purchase, contest or
compromise any encumbrance, charge, lien or claim of lien which, in the
sole judgment of Lender, is or may be senior in priority to this Mortgage,
the judgment of Lender being conclusive as between the parties hereto;
(iii) to obtain insurance and to pay any premiums or charges with respect
to insurance required to be carried under this Mortgage; or (iv) to employ
counsel, accountants, contractors and other appropriate persons;
C. To enforce the assignment of leases as herein granted and, in
connection therewith, to collect and/or xxx for the payments in Lender's
own name and give receipts and releases therefor, with Lender being liable
to account only for those payments actually received by Lender;
D. To commence and maintain an action or actions in any court of
competent jurisdiction to foreclose this instrument as a mortgage or to
obtain specific enforcement of the covenants of Borrower hereunder, and
Borrower agrees that such covenants shall be specifically enforceable by
injunction or any other appropriate equitable remedy and that for the
purposes of any suit brought under this subparagraph, Borrower waives the
defense of laches and any applicable statute of limitations;
E. As an alternative to judicial foreclosure, to foreclose the liens
and security interests granted in this instrument through the power of sale
conferred herein and pursuant to the Power of Sale Act (the "Power of
Sale");
F. To apply to a court of competent jurisdiction for and to obtain
appointment of a receiver of the Property as a matter of strict right and
without regard to the adequacy of the security for the repayment of the
Obligations, the existence of a declaration that the Obligations are
immediately due and payable, or the filing of a notice of default, and
Borrower hereby consents to such appointment and waives any and all
defenses to such appointment, agrees (i) not to oppose any application
therefor by Lender, (ii) that such appointment shall in no manner impair,
prejudice or otherwise affect the rights of Lender to application of
payments as provided in this Mortgage, and (iii) that any money advanced by
Lender in connection with any such receivership shall be a demand
obligation (which Borrower hereby agrees to pay) owing by Borrower to
Lender pursuant to this Mortgage;
G. To enter upon, possess, manage and operate the Mortgaged Property
or any part thereof; and
H. To resort to and realize upon the security hereunder and any other
security now or later held by Lender under the other Loan Documents
concurrently or successively and in one or several consolidated or
independent judicial actions or lawfully taken non-judicial proceedings, or
both.
No action of Lender in pursuing the power of sale based upon the provisions
herein or contained in the Power of Sale Act, including without limitation, the
giving of the Notice of Intent to Foreclose By Power of Sale or the Notice of
Sale, shall constitute an election of remedies which would preclude Lender from
pursuing judicial foreclosure before or at any time after commencement of the
power of sale foreclosure procedure.
In the event of a judicial foreclosure, the court shall direct a sale of
the Property to be either with or without appraisement as Lender may elect, said
election to be exercised at, or any time prior to, the time judgment is
rendered.
Upon sale of the Property at any judicial or non-judicial foreclosure,
Lender may credit bid (as determined by Lender in its sole and absolute
discretion) all or any portion of the Obligations. In determining such credit
bid, Lender may, but is not obligated to, take into account all or any of the
following: (i) appraisals of the Mortgaged Property as such appraisals may be
discounted or adjusted by Lender in its sole and absolute underwriting
discretion; (ii) expenses and costs incurred by Lender with respect to the
Mortgaged Property prior to foreclosure; (iii) expenses and costs which Lender
anticipates will be incurred with respect to the Mortgaged Property after
foreclosure, but prior to resale, including, without limitation, the costs of
any structural reports, hazardous waste reports or any remediation costs related
thereto; (iv) anticipated discounts upon resale of the Mortgaged Property as a
distressed or foreclosed property; and (v) such other factors or matters that
Lender deems appropriate. In regard to the above, Borrower acknowledges and
agrees that: (a) Lender is not required to use any or all of the foregoing
factors to determine the amount of its credit bid; (b) this Section does not
impose upon Lender any additional obligations that are not imposed by law at the
time the credit bid is made; (c) the amount of Lender's credit bid need not have
any relation to any loan-to-value ratios specified in the Loan Documents or
previously discussed between Borrower and Lender; and (d) Lender's credit bid
may be higher or lower than any appraised value of the Property.
18. No Cure or Waiver. Neither Lender's nor any receiver's entry upon and
taking possession of all or any part of the Property and Collateral, nor any
collection of rents, issues, profits, insurance proceeds, condemnation proceeds
or damages, other security or proceeds of other security, or other sums, nor the
application of any collected sum to any Secured Obligation, nor the exercise or
failure to exercise of any other right or remedy by Lender or any receiver shall
cure or waive any breach, Default or notice of default under this Mortgage, or
nullify the effect of any notice of default or sale (unless all Secured
Obligations then due have been paid and performed and Borrower has cured all
other defaults), or impair the status of the security, or prejudice Lender in
the exercise of any right or remedy, or be construed as an affirmation by Lender
of any tenancy, lease or option or a subordination of the lien of or security
interests created by this Mortgage.
19. Payment of Costs, Expenses and Attorney's Fees. Borrower agrees to pay
to Lender immediately and without demand all costs and expenses incurred by
Lender pursuant to this Paragraph 19 (including, without limitation, court costs
and attorneys' fees, whether incurred in litigation, including, without
limitation, at trial, on appeal, in post-judgment collection activities, or in
any bankruptcy or other proceeding, or not and the costs of any appraisals
obtained in connection with a determination of the fair value of the Property).
20. Fees and Expenses in Foreclosure. In case of foreclosure of this
Mortgage in any court of law or equity whether or not any order or decree shall
have been entered therein, and to the extent permitted by law, a reasonable sum
shall be allowed for stenographers' fees and for all moneys expended for
documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
of this Mortgage, and, to the extent permitted by law, there shall be included
in any judgment or decree foreclosing this Mortgage and paid out of said rents,
issues and profits from the Mortgaged Property and the proceeds of any sale made
in pursuance of any such judgment or decree: (1) all costs and expenses of such
suit or suits, appraisals, advertising, sale and conveyance, including
stenographers' fees, outlays for documentary evidence and the cost of said
abstract, examination of title and title report; (2) reasonable fees of legal
counsel to Lender, to the fullest extent permitted by law; (3) all moneys
advanced by Lender, if any, for any purposes authorized in this Mortgage, with
interest as herein provided; (4) all the accrued interest remaining unpaid on
the Obligations hereby secured; and (5) all the principal of the Obligations
remaining unpaid. The surplus of the proceeds, if any, shall be paid to Borrower
promptly after request by Borrower, or as the court may direct.
21. Sale in One or More Parcels. In case of any foreclosure sale of the
Mortgaged Property, the same may be sold in one or more parcels.
22. No Waiver by Lender. The failure of Lender to exercise the option for
acceleration of maturity and/or foreclosure following any default by Borrower in
any of the Obligations or to exercise any other option granted to Lender
hereunder or under the other Loan Documents in any one or more instances, or the
acceptance by Lender of partial payments of any of the Obligations, shall not
constitute a waiver of any such default, or extend or affect any applicable
grace period, but such option shall remain continuously in force. Acceleration
of maturity of any of the Obligations, once claimed by Lender, may, at the
option of Lender, be rescinded by Lender by a written acknowledgement to that
effect, but the tender and acceptance of partial payments alone shall not in any
way affect or rescind such acceleration of maturity, or extend or affect any
grace period.
23. Lender to Succeed to Priority of Prior Liens. Should the proceeds of
any loan made by Lender to Borrower as part of any of the Obligations, or any
amount paid out or advanced by Lender, be used directly or indirectly to pay
off, discharge, or satisfy, in whole or in part, any prior lien or encumbrance
upon the Mortgaged Property or any part thereof, then Lender shall be subrogated
to such other lien or encumbrance with respect to the Mortgaged Property, and
shall have the benefit of the priority of all of same.
24. Rights and Remedies Cumulative. The rights and remedies provided under
this Mortgage and the other Loan Documents, at law, or in equity are cumulative
and Lender as holder of every Obligation secured hereby may recover judgment
thereon, issue execution therefor, and resort to every other right or remedy
available at law or in equity without first exhausting and without affecting or
impairing the security or any right or remedy afforded by this Mortgage and no
enumeration of special rights or powers by any provision of this Mortgage shall
be construed to limit any grant of general rights or powers, or to take away or
limit any rights granted to or vested in Lender by virtue of the laws of the
state in which the Land is located, or any other jurisdiction, the laws of which
are applicable to this Mortgage. Lender may exercise any right, power or remedy
to which Lender is entitled under this Mortgage or the other Loan Documents at
Lender's option and in Lender's sole and absolute discretion without any
obligation to do so, and if, under this Mortgage or the other Loan Documents,
two or more alternative courses of action and/or remedies are available to
Lender, Lender may elect any such action and/or remedy or combination of actions
and/or remedies as Lender shall determine in the sole and absolute discretion of
Lender.
25. Lender's Right to Deal with Borrower and Other Parties. Lender, without
notice, and without regard to the consideration, if any, paid therefor, and
notwithstanding the existence at that time of any inferior liens thereon, may
release any part of the Mortgaged Property, or any other security for all or
part of the Obligations, and may release or grant indulgences, settlements or
compromises to any person liable or pledging security for all or part of the
Obligations, without in any way affecting the priority of the lien of this
Mortgage to the full extent of the Obligations remaining unpaid with regard to
any part of the security not expressly released. Lender may agree from time to
time with Borrower or any other party obligated on or pledging security for any
part of the Obligations or having any interest in the Mortgaged Property to
extend the time for payment of any part of the Obligations or grant any other
indulgences, releases, settlements or compromises and such agreements shall not
in any way release or impair the lien of this Mortgage. In the event Lender (a)
releases any part of the Mortgaged Property, or any person liable for or having
pledged security for any of the Obligations, (b) grants an extension of time for
any payments of the Obligations or grants any other indulgences, releases,
settlements or compromises; (c) takes other or additional security for the
payment of any of the Obligations; (d) waives or fails to exercise any right
granted in this Mortgage or any of the other Loan Documents, said acts or
omissions by Lender shall not release Borrower, subsequent owners of the
Mortgaged Property or any part thereof, or makers or sureties or pledgors of
collateral for or any of the Obligations, under any covenant of this Mortgage or
of the other Loan Documents, nor preclude Lender from exercising any right,
power or privilege herein or in the other Loan Documents granted or intended to
be granted in the event of any other default then existing or any subsequent
default.
26. Usury; Illegality; Severability. Nothing contained in this Mortgage or
any of the other Loan Documents or pursuant to any transaction related thereto
shall be construed or shall operate either presently or prospectively, (a) to
require Borrower to pay interest at a rate greater than is lawful, but shall
require payment of interest and other sums only to the extent of such lawful
rate, or (b) to require Borrower to make any payment or do any act contrary to
law, but if any clause or provision contained in this Mortgage or in any other
Loan Document shall otherwise so operate to invalidate this Mortgage or any
other Loan Document, in whole or in part, then such clause or provision, as the
case may be, only shall be held for naught as though not contained in this
Mortgage or in the applicable Loan Document and the remainder of this Mortgage
and other Loan Documents, as applicable, shall remain operative and in full
force and effect.
27. Warranty against Violations of Covenants. Borrower represents and
warrants that on the date hereof neither this Mortgage, nor the Mortgaged
Property, nor the contemplated use of the Improvements and Equipment, constitute
a breach, or a violation of, any covenants, conditions, easements or
restrictions, whether of record or not, or any zoning laws or land use
regulations or other laws or regulations affecting the Mortgaged Property or
binding upon Borrower, and Borrower covenants and agrees that Borrower will take
all actions necessary to prevent any such breach or violation from hereafter
occurring.
28. Voluntary Zoning Changes. Borrower covenants not to change the use that
Borrower intended for the Mortgaged Property at the time Borrower executed this
Mortgage, or initiate, join in, consent to, or permit any change in any zoning
ordinance, private restrictive covenant or other public or private restriction
changing, limiting or restricting the uses which may be made of the Mortgaged
Property, without the prior written consent of Lender obtained in each instance,
provided any withholding of such consent by Lender is not unreasonable.
29. Restrictions on Transfer. Except as expressly permitted by, and subject
to the provisions of the Loan Documents, Borrower shall not enter into any lease
of all or any part of the Mortgaged Property, or otherwise sell, transfer or
convey, or enter into any agreement to sell, transfer or convey, all or any part
of the Mortgaged Property, or any legal or beneficial interest therein, by
operation of law (including but not limited to, as applicable, a merger,
consolidation or transfer of capital stock, partnership or other ownership
interest in Borrower) or otherwise, without Lender's prior written consent, and
upon any breach of this Section Lender may immediately, at Lender's option, and
without notice, declare all of the Obligations to be immediately due and payable
and exercise all rights and remedies available to Lender upon a default under
this Mortgage.
30. Notices. Except for any notice required under applicable law to be
given in another manner, any notice given under this Mortgage shall be given in
the manner stipulated by the Security and Purchase Agreement dated the date
hereof to which Borrower and Lender are parties and which is one of the Loan
Documents referred to in Schedule 1 to this Mortgage. All notices, requests and
demands made by the parties to this Agreement shall be in writing (at the
addresses set forth below):
If to Borrower: AMS Health Sciences, Inc.
000 X.X. 00xx
Xxxxxxxx Xxxx, XX 00000
________________ - Phone
________________ - Fax
If to Lender: Laurus Master Fund, Ltd.
c/o Laurus Capital Management, LLC
000 Xxxxx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
(212) 541-4434- Phone
(212) 541-5800- Fax
31. Security Agreement; Financing Statements. Borrower hereby irrevocably
authorizes the Lender at any time and from time to time to file in any Uniform
Commercial Code jurisdiction any initial financing statements and amendments
thereto that (i) describe the Collateral and (ii) contain any other information
required by part 5 of Article 9 of the UCC or the Uniform Commercial Code of any
other applicable jurisdiction for the sufficiency or filing office acceptance of
any financing statement or amendment, including (x) whether Borrower is an
organization, the type of organization, and any organizational identification
number issued to Borrower and, (y) in the case of a financing statement filed as
a fixture filing, a sufficient description of real property to which the
Collateral relates. Borrower agrees to furnish any such information to Lender
promptly upon request. Borrower also ratifies, if applicable, its authorization
for the Lender to have filed in any initial financing statements or amendments
thereto if filed before the date of this Mortgage. Promptly upon request by
Lender, Borrower shall execute, acknowledge and deliver to Lender or authorize
Lender to file any other affidavit or certificate or other document that Lender
reasonably may request in order to perfect, preserve, maintain or continue the
security interest in the Mortgaged Property under this Mortgage and the priority
of such security interest, and upon any failure by Borrower to do so Lender
automatically shall be vested with power of attorney for Borrower, coupled with
an interest, for such purposes. Borrower further agrees to pay to Lender on
demand all costs and expenses incurred by Lender in connection with the
preparation, execution, recording, filing and refiling of any such documents. In
addition to being a mortgage this Mortgage is intended to be a security
agreement and a fixture filing pursuant to the UCC for the items specified above
as part of the Mortgaged Property (including goods constituting part of the
Collateral that are or are to become fixtures) which, under applicable law, may
be subject to a security interest pursuant to the UCC, and Borrower hereby
grants to Lender a security interest in said items as security for the
Obligations. Without limitation of the foregoing, Borrower agrees that Lender
may file this Mortgage in any personal property or real estate records or other
appropriate index as a financing statement for all or any of the items specified
above as part of the Mortgaged Property. A carbon, photographic or other
reproduction of this Mortgage or of a financing statement shall be sufficient as
a financing statement.
32. Successors and Assigns; Modifications in Writing. Subject to the
Section of this Mortgage entitled "Restrictions on Transfer," this Mortgage
shall be binding upon Borrower and its permitted successors and assigns, and all
persons claiming under or through Borrower or any such successor or assign, and
shall inure to the benefit of and be enforceable by Lender and its successors
and assigns. This Mortgage may be changed, waived, discharged or terminated only
by an instrument in writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought.
33. After Acquired Property. All property of every kind and description
acquired by Borrower after the date hereof which by the terms hereof is required
or intended to be subjected to the lien of this Mortgage shall, immediately upon
the acquisition thereof by Borrower, and without any further mortgage,
conveyance, assignment or transfer, become subject to the lien and security
interest of this Mortgage. Nevertheless, Borrower, at any time, upon the request
of Lender, will execute, acknowledge and deliver all such additional papers and
instruments and all such further assurances of title and will do or cause to be
done all further acts and things as may, subject to the conditions contained in
this Mortgage, be proper or reasonably necessary for carrying out the intent of
this Mortgage.
34. Governing Law. This Mortgage was negotiated in the State of New York,
the promissory note or notes secured by this Mortgage were delivered by Borrower
and accepted by Lender in the State of New York, and the proceeds of the
promissory note or notes secured hereby were disbursed from the State of New
York, which state Borrower and Lender agree has a substantial relationship to
Borrower and Lender and to the underlying transaction in connection with which
this Mortgage was granted. This Mortgage, including matters of construction,
validity and performance, and the obligations arising hereunder, shall be
construed in accordance with and otherwise governed in all respects by the laws
of the State of New York applicable to contracts made and performed in such
state and any applicable law of the United States of America except to the
extent that the real and personal property laws of the State of Oklahoma,
including laws relating to the perfection, priority and enforcement of liens on
real and personal property located in Oklahoma necessarily shall apply to
enforcement of the security covered by this Mortgage. Borrower hereby
irrevocably agrees that any legal action, suit, or proceeding against it with
respect to its obligations, liabilities or any other matter under or arising out
of or in connection with this Mortgage or the other Loan Documents or for
recognition or enforcement of any judgment rendered in any such action, suit or
proceeding may be brought in the United States District Court or the state
courts of New York or Oklahoma, as Lender may elect, and by execution and
delivery of this Mortgage, Borrower hereby irrevocably accepts and submits to
the non-exclusive jurisdiction of each of the aforesaid courts in persona,
generally and unconditionally with respect to any such action, suit, or
proceeding for Borrower and in respect of Borrower's property. Borrower further
agrees that final judgment against Borrower in any action, suit or proceeding
referred to herein shall be conclusive and may be enforced in any other
jurisdiction, by suit on the judgment, a certified or exemplified copy of which
shall be conclusive evidence of the fact and of the amount of the indebtedness
of Borrower.
35. Waiver of Exemption. To the extent permitted by law with respect to the
Obligations secured hereby including any renewals or extensions thereof,
Borrower waives and renounces any and all exemption rights, as well as the
benefit of all valuation and appraisement privileges, and stay, redemption and
moratoriums under and by virtue of the constitution and laws of the state in
which the Land is located, and of any other state or the United States, now
existing or hereafter enacted.
36. Joint and Several Liability; Covenants Run with Land. All of the
obligations of Borrower hereunder shall be joint and several. All of the
covenants of this Mortgage shall run with the land.
37. Provisions Severable. In the event that any provision of this Mortgage
or any of the other Loan Documents conflicts with applicable law, such conflict
shall not affect other provisions of this Mortgage or the other Loan Documents
that can be given effect without the conflicting provisions, and to this end the
provisions of this Mortgage and the other Loan Documents are declared to be
severable.
38. Interpretation. Whenever used, the singular number shall include the
plural, the plural the singular and the use of any gender shall include all
genders. The captions to the various sections of this Mortgage are inserted for
convenience only and shall be ignored in interpreting its provisions.
39. Waiver of Marshalling. Notwithstanding the existence of any other
security interests in the Mortgaged Property held by Lender or by any other
person or entity, Lender shall have the right to determine the order in which
any or all of the Mortgaged Property shall be subjected to the remedies provided
herein, and the order in which any or all portions of the Obligations secured
hereby are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Borrower, any guarantor of or pledgor of collateral
for any of the Obligations, and any other person or entity now or hereafter
acquiring a security interest in the Mortgaged Property and having actual or
constructive notice of this Mortgage, each waives any and all right to require
the marshalling of assets in connection with the exercise of any of the remedies
permitted by applicable law or in equity or provided in this Mortgage. Without
limitation of the foregoing, if all or any part of the Obligations are secured
not only by this Mortgage but also by one or more other mortgages, deeds of
trust, deeds to secure debt or other encumbrances of property located in this or
other jurisdictions or states (collectively, the "Additional Security
Instruments"), Lender, following any default (including after any required
notice and applicable period of cure) under this Mortgage or any of the
Additional Security Instruments, may proceed, concurrently or at any time
thereafter and from time to time, to exercise the rights and remedies of Lender
under this Mortgage and/or one or more of the Additional Security Instruments or
other Loan Documents by proceedings that are appropriate in the jurisdiction or
state wherein the property encumbered thereby is located, and no such action (or
failure to act) by Lender shall impair any rights or remedies of Lender under
this Mortgage, any of the Additional Security Instruments, at law or in equity.
40. Future Advances; Revolving Credit. It is acknowledged and agreed that
this Mortgage secures not only the initial advances under the Note evidencing
the Obligations but also all future advances and all other additional
indebtedness, whether direct, indirect, future, contingent or otherwise,
connected with or arising out of the Loan Documents.
41. Defeasance. PROVIDED ALWAYS, that if Borrower shall pay, or cause to be
paid, all the Obligations secured by this Mortgage at the times and in the
manner provided herein and in the Loan Documents, and shall keep, observe,
perform and comply with, or cause to be kept, observed, performed and complied
with, all of the provision of this Mortgage and the Loan Documents, to be kept,
observed, performed or complied with by Borrower, then this Mortgage and the
estate and interest hereby granted shall cease and have no further effect; and
in such case, Lender, on demand of and at the sole cost and expense of Borrower,
shall execute proper instruments in recordable form acknowledging satisfaction
and discharge of this Mortgage.
42. WAIVER OF TRIAL BY JURY. THE LENDER AND BORROWER ACKNOWLEDGE THAT THE
TIME AND EXPENSE REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND EXPENSE REQUIRED
FOR A BENCH TRIAL AND HEREBY KNOWINGLY AND VOLUNTARILY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, AND AFTER HAVING CONSULTED OR HAVING HAD AMPLE
OPPORTUNITY TO CONSULT THEIR RESPECTIVE LEGAL COUNSEL CONCERNING THE
CONSEQUENCES OF SUCH WAIVER, TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING
BROUGHT TO ENFORCE OR DEFEND AGAINST COLLECTION OF OR OTHERWISE IN CONNECTION
WITH THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.
43. Mortgage Tax. All Oklahoma mortgage tax required for recordation of
this Mortgage and any amendment thereto from time to time shall be paid by
Borrower.
[the balance of this page intentionally has been left blank]
IN TESTIMONY WHEREOF, witness the signature of Borrower to this Mortgage as
of the date set forth above.
"BORROWER"
AMS HEALTH SCIENCES, INC.,
an Oklahoma corporation
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Vice President and Chief Financial
Officer
STATE OF ____________ )
) SS
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ____ day of
__________, 2006, by _________________________, as _________________________ of
AMS HEALTH SCIENCES, INC., an Oklahoma corporation, on behalf of the company.
------------------------------------
Notary Public
My Commission Expires: _______________
My Commission Number: _______________
(SEAL)
EXHIBIT A
to Mortgage, Assignment of Leases, Rents, Income
and Profits, Security Agreement and Fixture Filing
(Description of Land)
TRACT 1
The East 50 feet of the South 140 feet of the West Half (W/2) of Block 8, and
the West Half (W/2) of Block 8, and the North 170 feet of the East Half (E/2) of
the West Half (W/2) of Block 8, all in NORTHVIEW ADDITION to Oklahoma City,
Oklahoma County, Oklahoma, according to the recorded plat thereof;
and
TRACT 2
The East Half (E/2) of the West Half (W/2) of Block 8, LESS AND EXCEPT the East
50 feet of the South 140 feet thereof, and LESS AND EXCEPT the North 170 feet
thereof, all in NORTHVIEW ADDITION to Oklahoma City, Oklahoma County, Oklahoma,
according to the recorded plat thereof.
