1
Exhibit 10.22
LEASEHOLD MORTGAGE
------------------
Loan Number ______
________, Michigan
THIS LEASEHOLD MORTGAGE ("Mortgage") is made this _____ day of
____________, 1998, by WM LIMITED PARTNERSHIP - 1998 D/B/A WENDY'S OF MICHIGAN,
a Michigan limited partnership, whose address is 00 Xxxxx Xxxxxx XX, Xxxxx 000,
Xxxxx Xxxxxx, Xxxxxxxx 00000 ("Borrower"), in favor of CAPTEC FINANCIAL GROUP,
INC., a Michigan corporation, whose address is 24 Xxxxx Xxxxx Xxxxxx Drive,
Lobby L, 4th Floor, X.X. Xxx 000, Xxx Xxxxx, Xxxxxxxx 00000-0000 (together with
its successors, assigns and transferees, "Lender"). This instrument shall become
effective on ______________, 1998.
PRELIMINARY STATEMENT
This Mortgage is made to secure all of the following (individually and
collectively the "Indebtedness"):
1. Payment in the sum of _____________________________________________
Dollars (____________), together with interest, costs and all other sums to be
paid according to that certain Promissory Note ("Note"), by Borrower to Lender
made as of the date of this Mortgage by Borrower; together with any and all
extensions, renewals, modifications, substitutions or replacements thereof; and
the performance of the covenants and obligations of Borrower due or to become
due to Lender under this Mortgage or under any other documents securing payment
of all amounts due under the Note (collectively, the "Loan Documents"), and the
repayment of all sums expended by Lender in connection with performance of those
covenants and obligations.
2. If the Note, this Mortgage and the Loan Documents are assigned to a
trust sponsored by Lender or any of its affiliates to securitize its loan
receivables (the "Trust"), "Indebtedness" shall also include the payment of all
other sums (together with interest and costs thereon) concurrently or
subsequently loaned to Borrower by Captec Financial Group, Inc., a Michigan
corporation, Captec Financial Group Funding Corporation, a Michigan corporation,
or Captec Leasing Company, a California corporation (each an "Originator"), as
evidenced and/or secured by certain notes and other documents of Borrower with
respect to such amounts and which notes and other documents are assigned to the
Trust, together with any and all extensions, renewals, modifications,
substitutions or replacements thereof; and the performance of the covenants and
obligations of Borrower due or to become due under such notes and other
documents assigned to the Trust, and the repayment of all sums expended in
connection with performance of those covenants and obligations (collectively,
the "Trust Obligations").
3. If the Note, this Mortgage and the Loan Documents are not assigned
to the Trust, "Indebtedness" shall also include the payment of all other sums
(together with interest thereon) concurrently or subsequently loaned to Borrower
by an Originator, as evidenced and/or secured by certain notes and other
documents of Borrower which are not assigned to the Trust, together with any and
all extensions, renewals, modifications, substitutions or replacements thereof;
and the performance of the covenants and obligations of Borrower due or to
become due under
2
such notes and other documents, and the repayment of all sums expended in
connection with performance of those covenants and obligations (collectively,
the "Retained Obligations").
4. This Mortgage is given to secure an obligation incurred by Borrower
for the purpose of financing certain improvements on the Real Estate, which
obligation may include the acquisition cost of the Real Estate.
5. THIS MORTGAGE SECURES FUTURE ADVANCES AND IS A FUTURE ADVANCE
MORTGAGE UNDER ACT NO. 348 OF THE PUBLIC ACT OF 1990, AS AMENDED (MCLA 565.901
ET SEQ.).
GRANTING CLAUSE
---------------
To secure the Indebtedness and as security for the purposes stated
elsewhere in this Mortgage, Borrower hereby mortgages and warrants to the
Lender, its successors and assigns, the following described properties, rights,
interests and privileges (collectively, "Mortgaged Property"):
1. All estate, title, interest and rights of Borrower in and to the
parcel(s) of real estate commonly known as ___________________. located in the
City of _________________________, Michigan and particularly described on
Schedule A attached to this Mortgage and identified as Tax Parcel Number
________________ ("Real Estate"), pursuant to that certain Ground Lease dated
______________, between ______________________________ ("Ground Lessor") and
Borrower, a memorandum of which was recorded on _______, in Liber _________,
Page________, Kent County Records (including, but not limited to, the right, if
any, to extend or renew the Ground Lease for succeeding term or terms);
provided, however, that in the event that Borrower acquires the fee title or any
other estate, title, or interest in the Mortgaged Property covered by the Ground
Lease, then this Mortgage shall attach to and cover and be a lien upon the fee
title for such other estates so acquired, and such fee title or other estate
shall, without further assignment or conveyance, become and be subject to the
lien of and covered by this Mortgage;
2. All buildings, structures and improvements now located, or
subsequently constructed or placed upon the Real Estate, including, without
limit, all building materials and building equipment located on the Real Estate;
3. All machinery, apparatus, equipment, goods, fittings, fixtures and
articles of personal property of every kind and nature located or subsequently
located on the Real Estate (individually and collectively, "Equipment"), and all
of the right, title and interest of Borrower in and to any Equipment which may
be subjected to any title retention or security agreement superior in lien to
the lien of this Mortgage. It is agreed that all Equipment is part and parcel of
the Mortgaged Property and appropriated to the use of the Real Estate and,
whether affixed or not, unless Lender shall otherwise elect, be deemed to be
real estate and granted under this Mortgage;
4. All easements, rights-of-way, licenses, privileges and appurtenances
relating to the Real Estate;
5. All rents, issues, profits, revenues, proceeds, accounts and general
intangibles arising from the Real Estate or relating to any business conducted
by Borrower on the Real Estate, under present or future leases, reservation
and/or purchase agreements, licenses or otherwise, which are specifically
assigned and transferred to Lender, including, without limit, all rights
conferred by Act 210 of the Michigan Public Acts of 1953, as amended;
6. All right, title and interest of Borrower in and to the land lying
in the bed of any street, road, avenue, alley or walkway, opened or proposed or
vacated, adjoining the Real Estate;
7. Any and all awards or payments, including, without limit, interest
on any awards or payments, and the right to receive them, which may be made with
respect to the Mortgaged Property as a result of: (a) the exercise of the right
of eminent domain, (b) the alteration of the grade of any street, (c) any loss
of or damage to any building or other improvement on the Real Estate, (d) any
other injury to or decrease in the value of the Mortgaged Property,
-2-
3
(e) any refund due on account of the payment of real estate taxes, assessments
or other charges levied against or imposed upon the Mortgaged Property, or (f)
any refund of utility deposits or right to any tenant deposit; and
8. All substitutions, replacements, extensions, renewals, additions and
accessories for or to any of the foregoing.
1. COVENANTS AND WARRANTIES. Borrower covenants and warrants to Lender as
follows:
(a) AUTHORITY; NO CONFLICT. Borrower has the power and
authority to execute, deliver and perform its obligations under this Mortgage.
This Mortgage is executed and delivered in conformity with the Ground Lease. The
execution, delivery and performance of this Mortgage by Borrower does not, and
will not violate or conflict with any provision of its organizational or charter
documents or any agreement, court order or consent decree to which Borrower is a
party or by which Borrower may be bound.
(b) TITLE TO MORTGAGED PROPERTY. Borrower has a valid interest
as the tenant under the Ground Lease. The Ground Lease is subject to no liens or
encumbrances of any kind, and is prior to all liens and encumbrances whatsoever
other than the fee interest of the Ground Lessor and the Permitted Liens (as
hereinafter defined). This Mortgage is and will remain a valid and enforceable
first lien on the Mortgaged Property subject only to the Permitted Liens. For
purposes of this Mortgage, "Permitted Liens" shall mean those liens or
encumbrances shown on a loan policy of title insurance accepted in writing by
Lender.
(c) PAYMENT OF INDEBTEDNESS. Borrower will pay and perform the
Indebtedness when due, whether by maturity, acceleration or otherwise.
(d) MAINTENANCE OF MORTGAGED PROPERTY; WASTE. Borrower shall
preserve and maintain the Mortgaged Property in good repair, working order and
condition, excepting ordinary wear and tear, and shall not commit or permit the
commission of waste against the Mortgaged Property. Failure, refusal or neglect
of Borrower to pay any taxes or assessment or any utility rates levied, assessed
or imposed upon the Mortgaged Property, and/or nonpayment of any premiums for
insurance, shall constitute waste, and shall entitle Lender to exercise the
remedies provided in this Mortgage, as well as those afforded by law.
(e) PAYMENT OF TAXES; DISCHARGE OF LIENS.
-------------------------------------
(i) Borrower shall pay when due, and before
any interest, collection fees or penalties accrue, all taxes,
assessments, encumbrances, liens, mortgages, deeds of trust, water or
sewer charges and other charges and impositions (individually and
collectively, "Imposition(s)") levied, assessed or existing with
respect to the Mortgaged Property, or any part of it, and Borrower will
deliver to Lender receipts showing payment of the Imposition(s). If
Borrower fails to pay any of the Imposition(s), Lender, at its option,
may pay such Imposition(s) and the monies paid shall be a lien upon the
Mortgaged Property, added to the amount secured by this Mortgage, and
payable immediately by Borrower to Lender with interest at the higher
of (i) the interest rate, if any, charged by the particular entity
levying or assessing the Imposition(s), or (ii) the highest rate
charged by Lender on any of the Indebtedness (but in either case not to
exceed the maximum interest rate permitted by law).
(ii) Upon the occurrence of an Event of
Default (as hereinafter defined) hereunder, at the option of Lender,
Borrower shall pay to Lender, in advance on the first day of each
month, a pro rata portion (as determined by Lender) of all
Imposition(s) levied, assessed or existing on the Mortgaged Property.
In the event that sufficient funds have been deposited with Lender to
cover the amount of these Imposition(s) when they become due and
payable, Lender shall pay them. In the event that sufficient funds have
not been deposited to cover the amount of these Imposition(s) at least
thirty (30) days prior to the time when they become due and payable,
Borrower shall immediately pay the amount of the deficiency to
3
4
Lender. Lender shall not be required to keep a separate account or to
pay Borrower any interest on the funds held by Lender for the payment
of the Imposition(s) pursuant to this Section 1(e) or for the payment
of insurance premiums under Section 1(g) below, or on any other funds
deposited with Lender in connection with this Mortgage. The funds on
deposit with Lender are further security for the Indebtedness and if an
Event of Default occurs under this Mortgage, any funds remaining on
deposit with Lender may be applied against the Indebtedness at any time
after the Event of Default occurs, and without notice to Borrower.
(f) SALE OR TRANSFER. Borrower will not sell or transfer all or any
interest in the Mortgaged Property or in Borrower without the prior written
consent of Lender. For purposes of this Section 1(f), a "transfer" of Borrower
shall include, without limitation, any sale (involving either all or any portion
of the equity interest in Borrower or all or substantially all of Borrower's
assets), merger, consolidation, change in control or termination of existence of
Borrower. Notwithstanding the foregoing, Lender's consent shall not be required
for transfers of limited partner interests of Borrower for estate planning
purposes, provided that such transfers, in the aggregate, shall not result in a
change in control of Borrower. In the event ownership of the Mortgaged Property,
or any part, becomes vested in any person(s) other than Borrower, Lender may
deal with and may enter into any contract or agreement with the successor(s) in
interest with reference to this Mortgage in the same manner as with Borrower,
without discharging or otherwise affecting the lien of this Mortgage or
Borrower's obligations under this Mortgage.
(g) INSURANCE.
---------
(i) Borrower shall keep the buildings and all
other improvements on the Mortgaged Property insured for the benefit of
Lender against fire and other hazards and risks. Borrower covenants and
agrees that Borrower will carry and maintain, at its sole cost and
expense, the following types of insurance, in the amounts specified:
(A) comprehensive general liability insurance with initial limits of
not less than One Million Dollars ($1,000,000) for death or injuries to
one person and not less than One Million Dollars ($1,000,000) for death
or injuries to two or more persons in one occurrence, and not less than
One Million Dollars ($1,000,000) for damage to property; (B) fire and
extended coverage insurance on a replacement form with inflation-guard
vandalism and malicious mischief endorsements; (C) rent loss or
business interruption insurance covering a period of not less than
twelve (12) months; (D) flood insurance (if the Mortgaged Property is
situated in an area which is considered a flood risk area by the United
States Department of Housing and Urban Development, and for which flood
insurance is available under the National Flood Insurance Act of 1968,
as amended); (E) builder's risk insurance (if Borrower is constructing
buildings or improvements on the Mortgaged Property) in an amount not
less than 100% of their full insurable replacement cost; (F) an
umbrella policy of not less than $5,000,000; and (G) such other
insurance and in such amounts as may be reasonably required from time
to time by Lender. All insurance shall be in amounts and in forms and
with companies satisfactory to Lender. Borrower shall deliver to Lender
the policies (or, alternatively, originally executed certificates of
insurance therefor) evidencing the required insurance with premiums
fully paid, and with standard mortgagee clauses (making all losses
payable to Lender). Renewals of the required insurance (together with
evidence of premium prepayment for one (1) year in advance) shall be
delivered to Lender at least thirty (30) days before the expiration of
any existing policies. All policies and renewals shall provide that
they may not be canceled or amended without giving Lender thirty (30)
days prior written notice of cancellation or amendment.
(ii) Should Borrower fail to insure or fail to
pay the premiums on any required insurance or fail to deliver the
policies or renewals as provided above, Lender may have the insurance
issued or renewed (and pay the premiums on it for the account of
Borrower) in amounts and with companies and at premiums as Lender deems
appropriate. If Lender elects to have insurance issued or renewed to
insure Lender's interest, Lender shall have no duty or obligation of
any kind to also insure Borrower's interest or to notify Borrower of
Lender's actions. Any sums paid by Lender for insurance, as provided
above, shall be a lien upon the Mortgaged Property, added to the amount
secured by this Mortgage, and payable immediately by Borrower to
Lender, as the case may be, with interest on those sums at the
4
5
highest rate charged by Lender on any of the Indebtedness (but not to
exceed the maximum interest rate permitted by law).
(iii) In the event of loss or damage to the
Mortgaged Property, the proceeds of all required insurance shall be
paid to Lender. No loss or damage shall itself reduce the Indebtedness.
Lender or any of its employees is each irrevocably appointed
attorney-in-fact for Borrower and is authorized to adjust and
compromise each loss without the consent of Borrower, to collect,
receive and receipt for the insurance proceeds in the name of Lender
and Borrower and to endorse Borrower's name upon any check in payment
of the loss.
(iv) Lender shall apply such proceeds to the
repair and restoration of the Mortgaged Property subject to the
following conditions:
(1) there shall be no Event of Default
existing hereunder;
(2) plans for repair and restoration
shall be reviewed and approved by
Lender, which approval shall not be
unreasonably withheld or delayed;
(3) repair and restoration of the
Mortgaged Property to a viable,
economic unit (as determined by
Lender) can practicably be completed
prior to the Due Date set forth in
the Note;
(4) Borrower shall have deposited with
Lender funds equal to the positive
difference, if any, between the cost
of repair, restoration and
completion, and the amount of the
insurance proceeds; and
(5) disbursements will be made by Lender
or, at Lender's option, a title
insurance company acceptable to
Lender, pursuant to procedures
necessary or appropriate to keep the
Mortgaged Property free of
mechanics' liens and to ensure that
funds are properly applied.
Provided that no Event of Default exists, if there are insurance
proceeds in the amount of Twenty-Five Thousand Dollars ($25,000) or
less remaining after the repair and restoration of the Mortgaged
Property as required hereunder, such proceeds shall be paid to
Borrower. Provided that no Event of Default exists, if there are
insurance proceeds in excess of Twenty-Five Thousand Dollars ($25,000)
remaining after the repair and restoration of the Mortgaged Property as
required hereunder, such proceeds shall be applied toward payment of
the Indebtedness (or any portion thereof) without premium, whether or
not then due or payable, in whatever order of maturity as Lender may
elect. Application of proceeds by Lender toward later maturing
installments of the Indebtedness shall not excuse Borrower from making
the regularly scheduled installment payments nor shall such application
extend or reduce the amount of any of these payments.
(v) Notwithstanding Section 1(g)(iv) above, if
a substantial portion (fifty percent [50%] or more) of the Mortgaged
Property is damaged or destroyed during the last twenty-four (24)
months of the term of the Note, and provided that no Event of Default
then exists hereunder, either Borrower or Lender may elect not to
rebuild and to apply the insurance proceeds toward payment of the
Indebtedness (or any portion thereof) without premium, whether or not
then due and payable, in whatever order of maturity as Lender may
elect. Application of proceeds by Lender toward later maturing
installments of the Indebtedness shall not excuse Borrower from making
the regularly scheduled installment payments nor shall such application
extend or reduce the amount of any of these payments.
(vi) In the event of a foreclosure of this
Mortgage, or the giving of a deed in lieu of foreclosure, the purchaser
or grantee of the Mortgaged Property shall succeed to all of the rights
of
5
6
Borrower under the insurance policies including, without limit, any
right to unearned premiums and to receive the proceeds.
(vii) Upon the occurrence of an Event of
Default hereunder, at the option of Lender, Borrower shall pay to
Lender, in advance on the first day of each month, a pro rata portion
of the annual premiums due (as estimated by Lender) on the required
insurance. In the event that sufficient funds have been deposited with
Lender to cover the amount of the insurance premiums when the premiums
become due and payable, Lender shall pay the premiums. In the event
that sufficient funds have not been deposited with Lender to pay the
insurance premiums at least thirty (30) days prior to the time when
they become due and payable, Borrower shall immediately pay the amount
of the deficiency to Lender.
(h) COMPLIANCE WITH LAW AND OTHER MATTERS. Borrower will
comply with all federal, state and local laws, ordinances, rules, regulations
and restrictions relating to the ownership, use, occupancy and operation of the
Mortgaged Property. Borrower shall be solely responsible to apply for and secure
any building permit or permission of any duly constituted authority for the
purpose of doing any of the things which Borrower is required or permitted to do
under the provisions of this Mortgage. Further, Borrower will comply with,
perform Borrower's obligations under, and enforce the obligations of all other
parties to all building and use restrictions, ground leases, leases, reservation
and/or purchase agreements, condominium documents and/or other instruments
affecting or relating to the use and/or occupancy of the Mortgaged Property.
(i) ALTERATION OF IMPROVEMENTS.
---------------------------
(i) Without the prior written consent of
Lender, Borrower will not remove any building, structure or other
improvement forming part of the Mortgaged Property.
(ii) Borrower may from time to time make
alterations, replacements, additions, changes, and improvements
(collectively, "Alterations") in and to the Mortgaged Property as
Borrower may find necessary or convenient for its purposes; provided,
however, that no such Alterations shall decrease the value of the
Mortgaged Property. All work with respect to any Alteration shall be
done in a good and workmanlike manner by properly qualified and
licensed personnel, and such work shall be diligently prosecuted to
completion.
(iii) Borrower shall pay the costs of any
Alterations done on the Mortgaged Property, and shall keep the
Mortgaged Property free and clear of liens of any kind. Borrower shall
indemnify and defend Lender from and against any liability, loss,
damage, costs, attorneys' fees, and any other expense incurred as a
result of claims of lien by any person performing work or furnishing
materials or supplies for Borrower or any person claiming under
Borrower.
(iv) No Alteration shall be undertaken until
Borrower shall have procured and paid for all required permits and
authorizations of all municipal departments and governmental
subdivisions having jurisdiction. Any Alteration involving an estimated
cost of more than Twenty-Five Thousand and 00/100 Dollars ($25,000.00)
shall be conducted under the supervision of a licensed architect or
engineer selected by Borrower and satisfactory to Lender and shall be
made in accordance with detailed plans and specifications ("Plans and
Specifications") and cost estimates prepared by such architect or
engineer and approved in writing in advance by Lender. Any Alteration
shall be made promptly and in a good workmanlike manner and in
compliance with all applicable permits and authorizations and building
and zoning laws and all laws and in accordance with the orders, rules
and regulations of the Board of Fire Insurance Underwriters and any
other body hereafter exercising similar functions having or asserting
jurisdiction over the Mortgaged Property.
6
7
(v) In connection with any Alteration
involving an estimated cost in excess of Twenty-Five Thousand and
00/100 Dollars ($25,000.00), Lender shall have the right to require
Borrower to post a bond or other security reasonably satisfactory to
Lender to insure the completion of such Alteration.
(j) OBLIGATION TO REBUILD.
----------------------
(i) If any portion of the Mortgaged Property
is damaged or destroyed by fire or other casualty, subject to Section
1(g)(iv) above, Borrower shall, at its sole cost and expense, forthwith
repair, restore, rebuild or replace the damaged or destroyed
improvements, fixtures or equipment, and complete the same as soon as
reasonably possible, to the condition they were in prior to such damage
or destruction, except for such changes in design or materials as may
then be required by law or are approved by Lender in Lender's
reasonable discretion. Lender, in such event, shall, to the extent the
proceeds of the insurance are made available to Lender, reimburse
Borrower for the costs of making such repairs, restoration, rebuilding
and replacements on such terms as Lender may reasonably require. To the
extent, if any, that the proceeds of insurance made available as
aforesaid are insufficient to pay the entire cost of making such
repairs, restoration, rebuilding and replacements, Borrower shall pay
the amount by which such costs exceed the insurance proceeds made
available as aforesaid.
(ii) Notwithstanding the foregoing, in the
event that Borrower fails to commence the repair or restoration of the
Mortgaged Property pursuant to this Section 1(j) within sixty (60) days
after the casualty, or if Borrower abandons or fails to diligently
pursue completion of such repair or restoration (as determined in
Lender's reasonable judgment), then Lender shall be entitled to apply
the insurance proceeds first towards reimbursement of all costs and
expenses of Lender in collecting the proceeds (including, without
limit, court costs and reasonable attorneys' fees), and then toward any
payment of the Indebtedness or any portion of it, whether or not then
due or payable and in whatever order of maturity as Lender may elect.
Application of proceeds by Lender toward later maturing installments of
the Indebtedness shall not excuse Borrower from making the regularly
scheduled installment payments nor shall such application extend or
reduce the amount of any of these payments.
(k) RECORDING. Borrower will cause this Mortgage, any
supplemental or restated mortgage and any financing and continuation statements
required by the applicable Uniform Commercial Code to be recorded and filed at
Borrower's expense in such manner and in such place as may, in Lender's opinion,
be necessary or proper.
(l) ADDITIONAL ASSURANCES. Borrower will execute and deliver
additional instruments and take additional actions as Lender may reasonably
request to carry out the terms and conditions of this Mortgage.
(m) BOOKS AND RECORDS; INSPECTION RIGHTS. Borrower will at all
times maintain accurate and complete books and records and copies of all
building and use restrictions, ground leases, leases, reservation and/or
purchase agreements, condominium documents, contracts and/or other instruments
with respect to the Mortgaged Property. Lender may inspect and make copies of
those books and records and any other data relating to the Mortgaged Property.
Lender may inspect the Mortgaged Property at such reasonable times as Lender
shall determine. Borrower will promptly provide to Lender reports concerning the
income, expenses and financial and other conditions of the Mortgaged Property as
may be required from time to time by Lender.
(n) ENVIRONMENTAL REPRESENTATION, WARRANTY AND
INDEMNIFICATION. Notwithstanding anything in this Mortgage to the contrary,
Borrower represents, covenants and warrants to Lender as follows:
(i) At all times since Borrower has acquired
any interest or rights in the Mortgaged Property, whether through
lease, land contract, deed or otherwise and, to Borrower's knowledge,
after due inquiry (including, without limitation, the Phase I
Environmental Assessment dated _______________, 199__, prepared by
Innovative Environmental Solutions, Inc., and identified as Job No.
7
8
__________ ["Assessment"]), at all times prior to Borrower's
acquisition of such interest or rights in the Mortgaged Property: there
are no and have been no violations of the Relevant Environmental Laws
(as hereinafter defined) at the Mortgaged Property and no consent
orders have been entered with respect to the Mortgaged Property; there
are no and have been no Hazardous Materials (as hereinafter defined) or
Asbestos (as hereinafter defined) either at, upon, under or within, or
discharged or emitted at or from, the Mortgaged Property; no Hazardous
Materials or Asbestos have flown, blown or otherwise become present at
the Mortgaged Property from neighboring land; and no Hazardous
Materials or Asbestos have been removed from the Mortgaged Property.
(ii) Borrower, after due inquiry (including,
without limitation, the Assessment), is not aware of any claims of
litigation, and has not received any communication, concerning the
presence or possible presence of Hazardous Materials or Asbestos at the
Mortgaged Property or concerning any violation or alleged violation of
the Relevant Environmental Laws respecting the Mortgaged Property.
Borrower shall promptly notify Lender of any such claims and shall
furnish Lender with a copy of any such communications received after
the date of this Mortgage.
(iii) Borrower shall ensure that the Mortgaged
Property complies in all respects with the Relevant Environmental Laws
and shall notify Lender promptly and in reasonable detail in the event
that Borrower becomes aware of the presence of Hazardous Materials or
Asbestos or a violation of the Relevant Environmental Laws at the
Mortgaged Property.
(iv) Should Borrower use or permit the
Mortgaged Property to be used or maintained so as to subject Borrower,
Lender or the use of the Mortgaged Property to a claim of violation of
the Relevant Environmental Laws (unless contested in good faith by
appropriate proceedings satisfactory to Lender), Borrower shall
immediately remedy and fully cure, at its own cost and expense, any
conditions arising therefrom.
(v) Borrower shall pay immediately when due
the cost of compliance with the Relevant Environmental Laws. Further,
Borrower shall keep the Mortgaged Property free of any lien imposed
pursuant to the Relevant Environmental Laws.
(vi) In the event that Borrower fails to
comply with the requirements of clauses (i) through (v) in this Section
1(n), after notice to Borrower and the earlier of the expiration of any
applicable cure period under this Mortgage or the expiration of the
cure period permitted under the Relevant Environmental Laws, if any,
Lender may, but in no event shall be obligated to, exercise its right
to do one or more of the following: (A) elect that such failure
constitutes an Event of Default under this Mortgage; and/or (B) take
any and all actions, at Borrower's expense, that Lender deems necessary
or desirable to cure such failure of compliance. Any costs incurred
pursuant to this clause (vi) or clause (vii) in this Section 1(n),
shall become immediately due and payable without notice and with
interest thereon at a rate equal to the highest interest rate charged
on the Indebtedness (but not to exceed the maximum interest rate
permitted by law), and such amount, including interest, shall, if
incurred prior to the foreclosure of this Mortgage or the delivery of a
deed in lieu of foreclosure, be added to the Indebtedness and shall be
secured by this Mortgage.
(vii) Lender shall not be liable for and
Borrower shall immediately pay to and indemnify, defend and hold Lender
harmless from and against, all loss, cost, liability, damage and
expense (including, without limit, attorneys' fees and costs incurred
in the investigation, defense and settlement of claims) that Lender may
suffer or incur (as holder of this Mortgage, as mortgagee in possession
or as successor in interest to Borrower as owner of the Mortgaged
Property by virtue of foreclosure or acceptance of a deed in lieu of
foreclosure) as a result of or in connection in any way with Borrower's
failure to comply with the terms and provisions of this Section 1(n).
8
9
(viii) The provisions of clauses (i) through
(vii) of this Section 1(n) shall survive the repayment of the
Indebtedness and the performance of all duties and obligations related
thereto, the foreclosure of this Mortgage, the delivery of a deed in
lieu of foreclosure and/or the discharge of this Mortgage.
"Relevant Environmental Laws" shall mean all applicable
federal, state and local laws, rules, regulations, orders, judicial
determinations and decisions or determinations by any judicial,
legislative or executive body of any governmental or quasi-governmental
entity, whether in the past, the present or the future, with respect
to: (i) the installation, existence or removal of, or exposure to,
Asbestos on the Mortgaged Property; (ii) the existence on, discharge
from, or removal from the Mortgaged Property of Hazardous Materials;
and/or (iii) the effects on the environment of the Mortgaged Property
or of any activity now, previously, or hereafter conducted on the
Mortgaged Property.
"Asbestos" shall have the meanings provided under the Relevant
Environmental Laws, and shall include, without limitation, asbestos
fibers and friable asbestos, as such terms are defined under the
Relevant Environmental Laws.
"Hazardous Materials" shall mean any of the following (as
defined by the Relevant Environmental Laws): solid wastes; toxic or
hazardous substances, wastes, or contaminants (including, without
limit, polychlorinated biphenyls, paint containing lead, and/or urea
formaldehyde foam insulation; and discharges of sewage or effluent.
(o) REPORTING REQUIREMENTS. Borrower hereby covenants and
agrees to deliver to Lender or cause Meritage Hospitality Group Inc., a Michigan
corporation ("MHG"), to deliver the following:
(i) Management prepared and certified
quarterly financial statements for Borrower within forty-five (45) days
after the end of the first three (3) quarters of each fiscal year of
Borrower.
(ii) Annual financial statements for MHG
audited by an independent certified public accountant, which annual
financial statements will include a consolidating statement on
Borrower, within one hundred twenty (120) days after the end of each
fiscal year of Borrower.
(iii) Management prepared and certified unit
level profit and loss statements relating to the operation of the
Wendy's franchised restaurant operation located on the Mortgaged
Property ("Franchised Operation") within forty-five (45) days after the
end of each fiscal year of Borrower.
Such financial statements shall be true and correct in all respects,
shall be prepared in accordance with generally accepted accounting principles,
and shall fairly represent the respective financial conditions of the subjects
thereof as of the respective dates thereof. If Borrower's financial statements
are prepared on a consolidated basis, Borrower hereby covenants and agrees to
prepare financial statements specifically relating to the operation of the
Franchised Operation. At the request of Lender, Borrower shall obtain the
consent of Borrower's accountant(s) to the inclusion of Borrower's most recent
financial statement in any regulatory filing or report to be filed by Lender.
(p) INDEMNIFICATION. Borrower shall appear in and defend any
suit, action or proceeding that might in any way and in the sole judgment of
Lender affect the value of the Mortgaged Property, the validity, enforceability
and priority of this Mortgage or the rights and powers of Lender. Borrower
shall, at all times, indemnify, defend, hold harmless and on demand, reimburse
Lender for any and all loss, damage, expense or cost, including cost of evidence
of title and attorneys' fees, arising out of or incurred in connection with any
such suit, action or proceeding, and the sum of such expenditures shall be
secured by this Mortgage and shall bear interest at the highest rate accruing on
the Indebtedness, not to exceed the maximum rate permitted by law, and shall be
due and
9
10
payable on demand. Borrower shall pay cost of suit, cost of evidence of title
and reasonable attorneys' fees in any proceeding or suit, including appellate
proceedings, brought by Lender to foreclose or otherwise enforce this Mortgage.
Notwithstanding the foregoing, Borrower shall not be required to indemnify
Lender against actions or inactions caused by Lender's negligence or misconduct.
(q) ESTOPPEL CERTIFICATES. Borrower shall, within ten (10)
days after written request therefor from Lender, furnish to Lender, or such
other persons or entities as Lender shall designate, a duly acknowledged written
statement setting forth the amount of the debt secured by this Mortgage, and
stating either that no setoffs or defenses exist against such debt, or, if such
setoffs or defenses are alleged to exist, the nature thereof, that no Event of
Default then exists, and no event has occurred, which with notice or the passage
of time, or both would constitute an Event of Default.
(r) FRANCHISE AGREEMENT. Borrower is a franchisee in good
standing with Wendy's International, Inc., an Ohio corporation ("Franchisor"),
and is not in default under its franchise agreement with Franchisor relating to
the Franchised Operation ("Franchise Agreement"). Borrower agrees to comply with
the terms of the Franchise Agreement and to take all actions necessary or
required to keep the Franchise Agreement in full force and effect. Borrower will
not encumber its rights under the Franchise Agreement except to Lender. Borrower
agrees to promptly provide Lender with a copy of any notice to Borrower of a
default under the Franchise Agreement. Further, Borrower agrees to promptly
provide Lender with a copy of any notice to Borrower of the existence of any
breach which, with notice or passage of time, or both, would entitle Franchisor
to terminate the Franchise Agreement.
(s) FIXED CHARGE COVERAGE RATIO. Borrower shall maintain a
Fixed Charge Coverage Ratio (as hereinafter defined) of not less than 1.2 to 1.0
for Borrower's business operations generally and not less than 1.2 to 1.0 for
the Franchised Operation. "Fixed Charge Coverage Ratio" shall mean Borrower's
Operating Cash Flow divided by its Fixed Charges (each as defined below). The
Fixed Charge Coverage Ratios shall be calculated by Borrower from time to time
and dates as determined by Lender, and Borrower shall submit such information as
Lender may require to confirm and approve Borrower's calculation of the Fixed
Charge Coverage Ratios.
(i) "Fixed Charges" shall mean the sum of the following items
set forth on a pro forma basis separately stated for both Borrower's
business operations generally and for the Franchised Operation, in each
case, for the applicable twelve (12) month operating period:
(A) current portion of long-term debt (defined as the
current portion of long-term debt due to mature during the next twelve
(12) month operating period, as stated in Borrower's applicable
financial statement, plus, if not already included therein, the current
portion of principal payments imputed on all capital leases), plus
(B) interest expense (defined as the interest expense
as stated on Borrower's applicable financial statement, plus, if not
already included therein, the interest expense imputed on all capital
leases), plus
(C) the current portion of operating leases (defined
as the amount of rent due under operating leases for the next twelve
(12) month operating period).
(ii) "Operating Cash Flow" shall mean the sum or subtraction
of the following items separately stated for both Borrower's business
operations generally and for the Franchised Operation, in each case,
for the applicable prior twelve (12) month operating period:
(A) net income (defined as the net income stated on
Borrower's applicable financial statement), plus
10
11
(B) depreciation and amortization (defined as the
depreciation and amortization expense as stated on Borrower's
applicable financial statement), plus
(C) interest expense (as defined above), plus
(D) operating lease expense (defined as the amount of
rental expense paid under operating leases, as stated on Borrower's
applicable financial statements), plus or minus
(E) non-recurring items (defined as items which, when
computing cash flow, should in Lender's reasonable business judgment,
be added back to or subtracted from net income to normalize results).
(t) PARTNERSHIP DISTRIBUTIONS. Borrower covenants and agrees
that Borrower shall not make any distribution(s) as defined under Section 8 of
that certain Agreement of Limited Partnership of WM Limited Partnership - 1998,
dated as of January 30, 1998, between MCC Food Service, Inc., a Michigan
corporation and MHG, if such distribution(s) at the time of the distribution
would cause the Fixed Charge Coverage Ratio for Borrower's business operations
generally to be less than 1.2 to 1.0.
(u) GROUND LEASE. Notwithstanding anything in this Mortgage to
the contrary, Borrower represents, covenants and warrants to Lender as follows:
(i) Borrower has delivered to Lender a true,
accurate and complete copy of the Ground Lease. The Ground Lease is in
full force and effect, unmodified by any writing or otherwise. Borrower
is in possession of the leasehold estate, and Borrower's right to
possession is not being disputed. All rent, additional rent and other
charges reserved under the Ground Lease have been paid to the extent
payable to the date hereof. Borrower has not delivered or received any
notices of default and is not in default under the terms of the Ground
Lease, and there are no circumstances which, with the passage of time
or the giving of notice or both, would constitute an event of default
thereunder. To the best of Borrower's knowledge, the Ground Lessor is
not in default under any of the terms or provisions of the Ground Lease
on the part of the Ground Lessor to be observed or performed.
(ii) Borrower shall promptly pay, when due and
payable, the rent, additional rent and other charges payable under the
Ground Lease. Borrower shall promptly and faithfully observe, perform
and comply with all the terms, covenants and provisions of the Ground
Lease on its part to be observed, performed and complied with at the
time set forth therein (including applicable cure periods). Borrower
shall not permit, suffer or refrain from doing anything the result of
which could be a default or breach of any of the terms of the Ground
Lease. Borrower shall not terminate, surrender, modify, amend or in any
way alter or permit the alteration of the terms of the Ground Lease or
waive, excuse or discharge any of the obligations of the Ground Lessor
without the prior written consent of Lender, which consent shall not be
unreasonably withheld; and shall enforce the obligations of the Ground
Lessor under the Ground Lease to the end that Borrower may enjoy all of
the rights granted to it under the Ground Lease.
(iii) Borrower shall promptly notify Lender in
writing of any default by Borrower under the Ground Lease and shall
promptly deliver to Lender copies of each notice of default and all
other notices and communications received by Borrower in connection
therewith. Borrower shall furnish to Lender copies of such information
and evidence as Lender may reasonably require concerning Borrower's due
observance, performance and compliance with the terms, covenants and
provisions of the Ground Lease.
(iv) In the event of any default by Borrower
in the performance of any of its obligations under the Ground Lease,
including, but not limited to, any default in the payment of rent and
other charges payable by Borrower under the Ground Lease, then, in each
and every case, Lender, at its option and without notice, and without
curing the resulting default between Borrower and Lender and without
11
12
waiving Lender's right of foreclosure or any other right or remedy of
Lender hereunder or otherwise, cure or cause to be cured the default
and otherwise exercise any and all rights of Borrower thereunder in the
name and on behalf of Borrower within thirty (30) days after receipt of
notice of written notice of such default from Ground Lessor. Borrower
shall after written demand reimburse Lender for all advances made and
expenses incurred by Lender in curing any such default (including
reasonable attorney's fees and costs), together with interest thereon
at the applicable default rate.
(v) If the Ground Lease is canceled or
terminated, and if Lender or its nominees shall acquire an interest in
any new lease of the Mortgaged Property, Borrower shall have no right,
title or interest in and to the new lease or the leasehold estate
created by such new lease.
(vi) So long as the Indebtedness secured by
this Mortgage remains unpaid and unless Lender otherwise consents in
writing, there shall be no merger of the Ground Lease or the leasehold
estate created thereby with the fee estate in the Mortgaged Property by
virtue of any of those interests coming into common ownership.
(vii) Borrower will not sell, transfer or
assign the Ground Lease or enter into any sublease of the Mortgaged
Property, or any rents, issues or profits issuing from the Mortgaged
Property without the prior written consent of Lender.
(viii) Borrower shall not consent to the
subordination of the Ground Lease other than pursuant to the
circumstances set forth under Section 12 of the Ground Lease.
(ix) Borrower will, within ten (10) days after
written demand from Lender, use its best efforts to obtain from the
Ground Lessor and deliver to Lender a certificate stating that the
Ground Lease is in full force and effect, is unmodified, that no notice
of termination thereon has been served on Borrower as tenant thereof,
stating the date to which the net rent has been paid and stating
whether or not there are any defaults thereunder and specifying the
nature of such defaults, if any.
(x) Borrower will furnish to Lender, upon
Lender's reasonable demand, proof of payment of all items which are
required to be paid by Borrower pursuant to the Ground Lease and proof
of payment of which is required to be given to the Ground Lessor under
the Ground Lease.
(xi) The generality of the provisions of this
Section shall not be limited by other provisions of this Mortgage
setting forth particular obligations of Borrower which are also
required of Borrower as tenant under the Ground Lease.
(xii) Throughout the term of the Ground Lease,
Borrower shall exercise all options to extend or renew the term of the
Ground Lease not less than thirty (30) days prior to the last day upon
which any such option may be exercised, unless Lender otherwise agrees
in writing. Borrower shall send Lender a copy of the notice of exercise
concurrently with Borrower's exercise of the option. Upon the failure
of Borrower to so elect or renew the Ground Lease as aforesaid (and the
failure of Lender to otherwise agree in writing), Lender shall have the
right, but not the obligation, to exercise such extension or renewal
options on behalf of Borrower, and Borrower hereby appoints Lender (or
any of its employees) as its attorney-in-fact for the purpose of
exercising such extension or renewal option.
2. APPLICATION OF CONDEMNATION AWARDS.
-----------------------------------
(a) CONDEMNATION AWARD. Any eminent domain or condemnation
proceeds shall be paid directly to Lender and applied toward reimbursement of
all Lender's costs and expenses incurred in connection with
12
13
collecting the award (including, without limit, court costs and reasonable
attorneys' fees), and the balance applied upon the Indebtedness whether or not
then due or payable in whatever manner Lender deems advisable. Application by
Lender of any condemnation award or portion of it toward the last maturing
installments of the Indebtedness shall not excuse Borrower from making the
regularly scheduled payments nor extend or reduce the amount of these payments.
(b) APPOINTMENT OF LENDER. Lender and each of its officers is
irrevocably appointed (which appointment is coupled with an interest)
attorney-in-fact for Borrower (with power of substitution) and is authorized to
receive, receipt for, discharge and satisfy any condemnation award or judgment,
whether joint or several, on behalf of Borrower, Borrower's legal
representatives, successors and assigns; provided, however, that Lender shall
not be liable for failure to collect any condemnation award.
3. ADDITIONAL SECURITY.
--------------------
(a) SECURITY INTEREST.
------------------
(i) This Mortgage, as to any Equipment,
fixtures, accounts, general intangibles and other personal property
included within the definition of Mortgaged Property (collectively,
"Personal Property"), shall constitute a security agreement within the
meaning of the Uniform Commercial Code and Borrower grants to Lender a
security interest in the Personal Property of Borrower. Borrower
agrees, upon request of Lender, to promptly furnish a list of Personal
Property owned by Borrower and subject to this Mortgage and, upon
request by Lender, to immediately execute, deliver and/or file any
amendments to this Mortgage, any separate security agreement and any
financing statements to evidence and perfect the security interest in
such Personal Property contemplated by this Section. Lender and each of
its officers is irrevocably appointed (which appointment is coupled
with an interest) attorney-in-fact for Borrower (with power of
substitution) and each is authorized to execute, deliver and/or file
any of such amendments to this Mortgage, any separate security
agreement and any financing statements.
(ii) Upon the occurrence of any Event of
Default under this Mortgage, Lender shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code or
otherwise provided by law or by this Mortgage including, without limit,
the right to require Borrower to assemble the Personal Property and
make it available to Lender at a place to be designated by Lender which
is reasonably convenient to such parties, the right to collect all
accounts receivable, the right to take possession of the Personal
Property with or without demand and with or without process of law and
the right to sell and dispose of it and distribute the proceeds
according to law. Borrower agrees that any requirement of reasonable
notice, if any, shall be met if Lender sends notice to Borrower at
least five (5) days prior to the date of sale, disposition or other
event giving rise to the required notice. Borrower agrees that the
proceeds of any disposition of the Personal Property may be applied by
Lender first to Lender's reasonable expenses in connection with the
disposition including, without limit, reasonable attorneys' fees and
legal expenses, and then to payment of the Indebtedness.
(b) LICENSES AND PERMITS. As additional security for the
Indebtedness and to the extent permitted by their terms, Borrower assigns to
Lender all of Borrower's rights and interest in all licenses or permits
affecting the Mortgaged Property. This assignment shall not impose upon Lender
any obligations with respect to any license or permit. Borrower shall not cancel
or amend any of the licenses or permits assigned (nor permit any of them to
terminate if they are necessary or desirable for the operation of the Mortgaged
Property) without first obtaining the written approval of Lender.
4. EVENTS OF DEFAULT AND REMEDIES.
-------------------------------
(a) EVENTS OF DEFAULT. Any of the following events shall, for
purposes of this Mortgage, constitute an "Event of Default":
13
14
(i) Failure by Borrower to pay any amount
owing on or with respect to the Indebtedness when due, whether by
maturity, acceleration or otherwise, which failure continues for three
(3) days after the date of written notice to Borrower from Lender of
such default.
(ii) Any failure by Borrower to comply with
any of the non-monetary terms, provisions, warranties or covenants of
the Note, this Mortgage or the other Loan Documents, which failure
continues for fifteen (15) days after the date of written notice to
Borrower from Lender of such default.
(iii) Institution of foreclosure proceedings
or other exercise of rights and remedies under any mortgage, deed of
trust or other lien against the Mortgaged Property (or any portion
thereof).
(iv) Insolvency of Borrower or the admission
in writing of Borrower's inability to pay debts as they mature.
(v) Any statement, representation or
information made or furnished by or on behalf of Borrower to Lender in
connection with or to induce Lender to provide or advance any of the
Indebtedness shall prove to be false or materially misleading when made
or furnished.
(vi) Institution of bankruptcy,
reorganization, insolvency or other similar proceedings by or against
Borrower, unless, in the case of a petition filed against Borrower the
same is dismissed within sixty (60) days) of the date of filing.
(vii) The issuance or filing of any
attachment, levy, garnishment or the commencement of any related
proceeding or the commencement of any other judicial process upon or in
respect to Borrower or the Mortgaged Property.
(viii) Sale or other disposition by Borrower
of any substantial portion of its assets or property.
(ix) Death, dissolution, merger,
consolidation, termination of existence, insolvency, business failure
or assignment for the benefit of creditors of or by Borrower.
(x) Any failure by Borrower to pay when due
any indebtedness (other than to Lender) or any failure in the
observance or performance of any term, covenant or condition contained
in any document evidencing, securing or relating to such indebtedness,
which failure continues beyond any applicable cure period.
(xi) Receipt by Borrower of a notice of
termination of the Franchise Agreement.
(xii) If the Note, this Mortgage and the other
Loan Documents have not been assigned to the Trust, the default by
Borrower which continues beyond any applicable grace or cure period
under the Retained Obligations; provided, however, if the Note, this
Mortgage and the other Loan Documents are assigned to the Trust, this
clause (xii) shall be of no force or effect during the term of such
assignment.
(xiii) In the event that the Note, this
Mortgage and the other Loan Documents are assigned to the Trust, the
default by Borrower which continues beyond any applicable grace or cure
period under the Trust Obligations.
14
15
(xiv) Any default by Borrower under the Ground
Lease which is not cured within any applicable cure period set forth in
such Ground Lease.
(b) REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of any
Event of Default, Lender shall have the following rights and remedies:
(i) Declare all or part of the Indebtedness
immediately due and payable.
(ii) Demand that Borrower immediately
surrender the possession of the Mortgaged Property to Lender, and
Borrower consents to Lender taking possession of the Mortgaged Property
and the books and records relating to the Mortgaged Property.
(iii) Lease the Mortgaged Property and collect
rents for the account of Borrower.
(iv) Foreclose the interest of Borrower in the
Mortgaged Property by action pursuant to applicable law. Commencement
of such an action shall be deemed a declaration of acceleration
pursuant to clause (i) above.
(v) Sell or cause to be sold the Mortgaged
Property and convey the same to the purchaser thereof pursuant to the
authority and power hereby granted and the provisions of M.C.L.A.
Section 600.3201 ET SEQ., as amended, pertaining to foreclosure by
advertisement, which statute does not require that Borrower be
personally notified of such sale or that a judicial hearing be held
before the sale can be conducted. Lender may direct the sale of the
Mortgaged Property to be in one or several parcels and in any order as
Lender may elect in its sole discretion, at such time and place, upon
such terms and after such notice as may be required or permitted by
applicable law.
(vi) Collect and receive all rents, profits
and other amounts that are due or shall subsequently become due under
the terms of any leases, land contract, or other agreements by which
Borrower is leasing or selling the Mortgaged Property or any interest
in the Mortgaged Property. Lender may also exercise any other rights or
remedy of Borrower under any such lease, land contract or other
agreement. However, Lender shall have no obligation to make any demand
or inquiry as to the nature or sufficiency of any payment received or
to present or file any claim or take any other action to collect or
enforce the payment of any amounts to which Lender may become entitled
under this Mortgage. Similarly, Lender shall not be liable for any of
Borrower's obligations under any such lease, land contract or other
agreement.
(vii) Exercise all rights, remedies and
privileges afforded a "secured party" under Article 9 of the Michigan
Uniform Commercial Code with respect to any of the Mortgaged Property
which is personal property.
(viii) Enter upon the Mortgaged Property and
take other actions as Lender deems appropriate to perform Borrower's
obligations under this Mortgage to inspect, repair, protect or preserve
the Mortgaged Property, to investigate or test for the presence of any
Hazardous Materials and/or to appraise the Mortgaged Property.
(ix) Pursue any other available remedy at law
or equity to enforce the payment of the Indebtedness.
15
16
(c) REMEDIES GENERALLY.
-------------------
(i) WARNING: THIS MORTGAGE CONTAINS A POWER OF
SALE AND UPON DEFAULT MAY BE FORECLOSED BY ADVERTISEMENT. IN
FORECLOSURE BY ADVERTISEMENT AND THE SALE OF THE MORTGAGED PROPERTY IN
CONNECTION THEREWITH, NO HEARING IS REQUIRED AND THE ONLY NOTICE
REQUIRED IS TO PUBLISH NOTICE IN A LOCAL NEWSPAPER AND TO POST A COPY
OF THE NOTICE ON THE MORTGAGED PROPERTY.
(ii) WAIVER: THE BORROWER WAIVES ALL RIGHTS
UNDER THE CONSTITUTION AND LAWS OF THE UNITED STATES AND UNDER THE
CONSTITUTION AND LAWS OF THE STATE OF MICHIGAN TO A HEARING PRIOR TO
SALE IN CONNECTION WITH ANY FORECLOSURE BY ADVERTISEMENT AND ALL NOTICE
REQUIREMENTS EXCEPT AS SET FORTH IN THE STATUTE PROVIDING FOR
FORECLOSURE BY ADVERTISEMENT.
(iii) All remedies provided for in Section
4(b) shall be available to the extent not prohibited by law, and Lender
shall have the unrestricted right to exercise any summary proceeding
available at law or in equity in connection therewith. Each remedy
shall be cumulative and additional to any other remedy of Lender at
law, in equity or by statute. No delay or omission to exercise any
right or power accruing upon any default or Event of Default shall
impair any such right or power or shall be construed to be a waiver of,
or acquiescence in, any such default or Event of Default.
(iv) Lender may waive any Event of Default and
may rescind any declaration of maturity of payments on the
Indebtedness. In case of such waiver or recision, Borrower and Lender
shall be restored to their respective former positions and rights under
this Mortgage. Any waiver by Lender of any default or Event of Default
shall be in writing and shall be limited to the particular default
waived and shall not be deemed to waive any other default.
(d) RECEIVERS. Upon an Event of Default and commencement of
foreclosure proceedings to enforce the rights of Lender under this Mortgage, or
upon the commission of waste against the Mortgaged Property, Lender shall be
entitled to the appointment of a receiver or receivers of the Mortgaged Property
and of the rents, issues and profits of the Mortgaged Property, pending such
proceedings and without notice to Borrower.
(e) APPLICATION OF PROCEEDS. Any proceeds received by Lender
from the exercise of remedies pursuant to Section 4(b) of this Mortgage
shall be applied as follows:
(i) First, to pay all costs and expenses
incidental to the leasing, foreclosure, sale or other disposition of
the Mortgaged Property. These costs and expenses shall include, without
limit, any costs and expenses incurred by Lender (including, without
limit, attorneys' fees and disbursements), and any taxes and
assessments or other liens and encumbrances prior to the lien of this
Mortgage.
(ii) Second, to all sums expended or incurred
by Lender directly or indirectly in carrying out any term, covenant or
agreement under this Mortgage or any related document, together with
interest as provided in this Mortgage.
(iii) Third, to the payment of the
Indebtedness. If the proceeds are insufficient to fully pay the
Indebtedness, then application shall be made first to late charges and
interest accrued and unpaid, then to any applicable prepayment
premiums, then to unpaid fees and other charges and then to the
outstanding principal balance.
16
17
(iv) Fourth, any surplus remaining shall be
paid to Borrower or to whomsoever may be lawfully entitled.
(f) MARSHALLING. In the event of foreclosure of this Mortgage
or the enforcement by Lender of any other rights and remedies under this
Mortgage, Borrower waives any right in respect to marshalling of assets which
secure the Indebtedness or to require Lender to pursue its remedies against any
other assets or any other party which may be liable for any of the Indebtedness.
(g) FURTHER ACTIONS. Promptly upon the request of Lender,
Borrower shall execute, acknowledge and deliver any and all further conveyances,
documents, mortgages, deeds of trust, security agreements, financing statements
and assurances, and do or cause to be done all further acts as Lender may
require to confirm and protect the lien of this Mortgage or otherwise to
accomplish the purposes of this Mortgage.
(h) ATTORNEYS FEES. Any reference in this Mortgage to
attorneys' fees shall refer to fees, charges, costs and expenses of in-house and
outside attorneys and paralegals, whether or not a suit or proceeding is
instituted, and whether incurred at the trial court level, on appeal, in a
bankruptcy, administrative or probate proceeding, in consultation with counsel,
or otherwise. All costs, expenses and fees of any nature for which Borrower is
obligated to reimburse or indemnify Lender are part of the Indebtedness secured
by this Mortgage and are payable upon demand, unless expressly provided
otherwise, with interest until repaid at the highest rate charged on any of the
Indebtedness (but not to exceed the maximum rate permitted by law).
5. MISCELLANEOUS.
--------------
(a) GOVERNING LAW. This Mortgage shall be construed in
accordance with the laws of the State of Michigan.
(b) SUCCESSORS AND ASSIGNS. This Mortgage shall be binding
upon the successors and assigns of Borrower including, without limit, any debtor
in possession or trustee in bankruptcy for Borrower, and the rights and
privileges of Lender under this Mortgage shall inure to the benefit of its
successors and assigns. This shall not be deemed a consent by Lender to a
conveyance by Borrower of all or any part of the Mortgaged Property or of any
ownership interest in Borrower.
(c) NOTICES. Notice from one party to another relating to this
Mortgage shall be deemed effective if made in writing (including
telecommunications) and delivered to the recipient's address, telex number or
telecopier number set forth in this Mortgage by any of the following means: (i)
hand delivery, (ii) registered or certified mail, postage prepaid, (iii) express
mail or other overnight courier service, or (iv) telecopy, telex or other wire
transmission with request for assurance of receipt in a manner typical with
respect to communications of that type. Notice made in accordance with these
provisions shall be deemed delivered on receipt if delivered by hand or wire
transmission, on the third business day after mailing if mailed by registered or
certified mail, or on the next business day after mailing or deposit with the
postal service or an overnight courier service if delivered by express mail or
overnight courier. Borrower's telecopier number is (000) 000-0000, and Lender's
telecopier number is (000) 000-0000.
(d) ENTIRE AGREEMENT; AMENDMENTS. This Mortgage and any
agreement to which it refers state all rights and obligations of the parties and
supersede all other agreements (oral or written) with respect to the lien
granted by this Mortgage. Any amendment of this Mortgage shall be in writing and
shall require the signature of Borrower and Lender.
(e) PARTIAL INVALIDITY. The invalidity or unenforceability of
any provision of this Mortgage shall not affect the validity or enforceability
of the remaining provisions of this Mortgage.
17
18
(f) INSPECTIONS. Any inspection, audit, appraisal or
examination by Lender or Lender's agents of the Mortgaged Property or of
information or documents pertaining to the Mortgaged Property is for the sole
purpose of protecting Lender's interests under this Mortgage and is not for the
benefit or protection of Borrower or any third party.
(g) JOINT AND SEVERAL LIABILITY. In the event that more than
one person or entity executes this Mortgage, the obligations of each person or
entity shall be joint and several.
(h) AUTOMATIC REINSTATEMENT. Notwithstanding any prior
revocation, termination, surrender or discharge of this Mortgage, the
effectiveness of this Mortgage shall automatically continue or be reinstated, as
the case may be, in the event that:
(i) Any payment received or credit given by
Lender in respect of the Indebtedness is determined to be a preference,
impermissible setoff, fraudulent conveyance, diversion of trust funds,
or otherwise required to be returned to Borrower for the benefit of
Borrower or any third party under any applicable state or federal law,
including, without limit, laws pertaining to bankruptcy or insolvency,
in which case this Mortgage shall be enforceable as if any such payment
or credit had not been received or given, whether or not Lender relied
upon this payment or credit or changed its position as a consequence of
it.
(ii) Any liability is imposed, or sought to be
imposed, against Lender relating to the environmental condition of, or
the presence of Hazardous Materials on, in or about the Real Estate,
whether this condition is known or unknown, now exists or subsequently
arises (excluding only conditions which arise after any acquisition by
Lender of any such property, by foreclosure, in lieu of foreclosure or
otherwise, to the extent due to the wrongful acts or omissions of
Lender), in which case this Mortgage shall be enforceable to the extent
of all liability, costs and expenses (including without limit
reasonable attorneys fees) incurred by Lender as the direct or indirect
result of any environmental condition or Hazardous Materials.
(iii) In the event of continuation or
reinstatement of this Mortgage, Borrower agrees upon demand by Lender
to execute and deliver to Lender those documents which Lender
determines are appropriate to further evidence (in the public records
or otherwise) this continuation or reinstatement, although the failure
of Borrower to do so shall not affect in any way the reinstatement or
continuation. If Borrower does not execute and deliver to Lender upon
demand such documents, Lender and each officer of Lender is irrevocably
appointed (which appointment is coupled with an interest) the true and
lawful attorney of Borrower (with full power of substitution) to
execute and deliver such documents in the name and on behalf of
Borrower.
(i) WAIVER OF JURY TRIAL. BORROWER AND LENDER ACKNOWLEDGE THAT
THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED.
EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS MORTGAGE OR
THE INDEBTEDNESS.
(j) CONSUMER CREDIT. Notwithstanding anything in this Mortgage
to the contrary, this Mortgage shall not secure any portion of the Indebtedness
which is deemed to be consumer credit under the Truth in Lending Act.
(k) ASSIGNMENT. This Mortgage is freely assignable, in whole
or in part, by Lender without consent of Borrower. Except as set forth below,
Lender shall provide Borrower with written notice of such
18
19
assignment. Lender shall be fully discharged from all responsibility accruing
hereunder from and after the effective date of any such assignment. Lender's
assignee shall, to the extent of the assignment, be vested with all the powers
and rights of Lender hereunder (including those granted under Section 4 hereof
or otherwise with respect to the Mortgaged Property), and to the extent of such
assignment the assignee may fully enforce such rights and powers, and all
references to Lender shall mean and refer to such assignee. Lender shall retain
all rights and powers hereby given not so assigned, transferred and/or
delivered. Borrower hereby waives all defenses which Borrower may be entitled to
assert against Lender's assignee with respect to liability accruing hereunder
prior to the effective date of any assignment of Lender's interest herein.
Borrower may not, in whole or in part, directly or indirectly, assign this
Mortgage or its rights hereunder or delegate its duties hereunder without, in
each instance, the specific prior written consent of Lender, which consent shall
not be unreasonably withheld.
(l) SECURITIZATION. Borrower understands and agrees that
Lender may, from time to time, assign its rights and powers under the Note, this
Mortgage and any other Loan Documents, in whole or in part, in connection with a
securitization program. Borrower agrees to enter into an amendment to the Note,
this Mortgage and any other Loan Documents if such amendments are required by a
nationally recognized rating agency in connection with a securitization program
sponsored by Lender and in which the Note, this Mortgage and any other Loan
Documents are to be included; provided that Borrower shall not be obligated to
enter into any amendment which adversely affects Borrower or adversely alters
any of the financial terms of the Loan Documents. Lender shall pay Borrower's
reasonable costs associated with such assignment.
19
20
IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the day
and year noted above.
WITNESSES: BORROWER:
WM LIMITED PARTNERSHIP - 1998 D/B/A
WENDY'S OF MICHIGAN
By
-------------------------- ---------------------------------
Print Name:
Its
-------------------------- ------------------------
Print Name:
By
-------------------------- ---------------------------------
Print Name:
Its
-------------------------- ------------------------
Print Name:
STATE OF MICHIGAN )
) ss.
COUNTY OF _____ )
The foregoing Mortgage was acknowledged before me the ____ day of
_______, 1998, by ______________________________, on behalf of MCC Food Service,
Inc., a Michigan corporation and the general partner of WM Limited Partnership -
1998, a Michigan limited partnership, on behalf of the limited partnership.
-----------------------------------
Notary Public
_______________ County, Michigan
My Commission Expires:________________
[Notary Public's Seal]
Prepared By:
Xxxxxx X. Xxxxx, Esq.
Miller, Canfield, Paddock & Stone, P.L.C.
000 Xxxxx Xxxx Xxxxxx, Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000-0000
When Recorded Return To:
Captec Financial Group, Inc.
24 Xxxxx Xxxxx Xxxxxx Drive
Lobby L, Xxxxxx Xxxxx
X.X. Xxx 000
Xxx Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
20
