EXHIBIT D
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FORM OF OWNED PROPERTY MORTGAGE
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MORTGAGE, SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS
BY AND BETWEEN
AFC ENTERPRISES, INC.
SIX XXXXXXXXX XXXXXXX
XXXXX 0000
XXXXXXX, XXXXXXX 00000-0000
("MORTGAGOR")
AND
BANCO POPULAR DE PUERTO RICO
0 XXXX 00/XX/ XXXXXX
XXX XXXX, XXX XXXX 00000
("MORTGAGEE")
DATED AS OF _________, 199__
LOCATION OF PREMISES:
RECORDING REQUESTED BY AND
WHEN RECORDED - RETURN TO:
Xxxxx X. Xxxxx, Esq.
XxXxxxxxx Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
THIS MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF LEASES AND RENTS (the
"Mortgage"), made as of the __ day of _____, 199_, by AFC ENTERPRISES, INC., a
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Minnesota corporation, having an xxxxxx xx Xxx Xxxxxxxxx Xxxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx 00000-0000 ("Mortgagor") and BANCO POPULAR DE PUERTO RICO,
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having offices at 0 Xxxx 00/xx/ Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Mortgagee").
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W I T N E S S E T H:
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To secure the payment of an indebtedness in the principal sum of
________________________________ DOLLARS ($___________), lawful money of the
United States of America, to be paid with interest according to a certain note
dated the date hereof made by Mortgagor to Mortgagee (the note together with all
extensions, renewals or modifications thereof being hereinafter collectively
called the "Note") (said indebtedness, interest and all other sums due hereunder
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and under the Note being collectively called the "Debt"), Mortgagor has
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mortgaged, given, granted, bargained, sold, aliened, conveyed, confirmed,
pledged, assigned, and hypothecated and by these presents does hereby mortgage,
give, grant, bargain, sell, alien, convey, confirm, pledge, assign and
hypothecate unto Mortgagee the real property described in Exhibit A attached
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hereto (the "Land") and the buildings, structures, fixtures, additions,
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enlargements, extensions, modifications, repairs, replacements and improvements,
now or hereafter located thereon (the "Improvements");
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TOGETHER WITH: all right, title, interest and estate of Mortgagor now
owned, or hereafter acquired, in and to the following property, rights,
interests and estates (the Land and the Improvements together with the following
property, rights, interests and estates being hereinafter described are
collectively referred to herein as the "Mortgaged Property"):
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(a) all easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments and appurtenances of
any nature whatsoever, in any way belonging, relating or pertaining to the Land
or the Improvements and the reversion and reversions, remainder and remainders,
and all land lying in the bed of any street, road or avenue, opened or proposed,
in front of or adjoining the Land, to the center line thereof and all the
estates, rights, titles, interests, property, possession, claim and demand
whatsoever, both at law and in equity, of Mortgagor of, in and to the Land and
the Improvements and every part and parcel thereof, with the appurtenances
thereto;
(b) all machinery, equipment, fixtures, furniture, equipment, cooking
supplies, stoves, refrigerators, dishes, glassware, utensils and inventories and
other property of every kind and nature, whether tangible or intangible,
whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an
interest, now or hereafter located upon the Land or the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Land or the Improvements and all building
equipment, materials and supplies and construction equipment, materials and
supplies of any nature whatsoever owned by Mortgagor, or in which Mortgagor has
or shall have an interest, now or hereafter located upon the Land or the
Improvements and financed or acquired with the proceeds evidenced by the Note,
or appurtenant thereto, or usable in connection with the present or future
construction, renovation, operation, enjoyment and occupancy of the Land or the
Improvement (hereinafter collectively called the "Equipment"), including the
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proceeds of any sale or transfer of the foregoing, and the right, title and
interest of Mortgagor in and to any of the Equipment which may be subject to any
security interests, as defined in the Uniform Commercial Code, as adopted and
enacted by the State of ______________ (the "Uniform Commercial Code") superior
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in lien to the lien of this Mortgage;
(c) all awards or payments, including interest thereon, which may
heretofore or hereafter be made with respect to the Mortgaged Property, whether
from the exercise of eminent domain or condemnation (including but not limited
to any transfer made in lieu of or in anticipation of the exercise of said
rights), or for a change of grade, or for any other injury to or decrease in the
value of the Mortgaged Property;
(d) all leases and other agreements affecting the use, enjoyment or
occupancy of the Land or the Improvements heretofore or hereafter entered into
by Mortgagor (collectively, the "Leases") and all income, rents, issues, profits
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and revenues from the Land or Improvements (collectively, the "Rents") and all
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proceeds from the sale, surrender, termination or other disposition of the
Leases and the right to receive and apply the Rents to the payment of the Debt;
(e) all proceeds of and any unearned premiums on any insurance
policies covering the Mortgaged Property, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Mortgaged Property; and
(f) the right, in the name and on behalf of Mortgagor, to appear in
and defend any action or proceeding brought with respect to the Mortgaged
Property and to commence any action or proceeding to protect the interest of
Mortgagee in the Mortgaged Property.
TO HAVE AND TO HOLD the above granted and described Mortgaged Property unto
and to the use and benefit of Mortgagee, and the successors and assigns of
Mortgagee, forever.
AND Mortgagor represents and warrants to and covenants and agrees with Mortgagee
as follows:
1. Payment of Debt and Incorporation of Covenants, Conditions and
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Agreements. Mortgagor will pay the Debt at the time and in the manner provided
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in the Note, the Credit
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Agreement (as hereinafter defined) and in this Mortgage. All the covenants,
conditions and agreements contained in (a) the Note, (b) the Credit Agreement,
dated as of the date hereof, between Mortgagor and Mortgagee, as the same may be
modified or supplemented from time to time (the "Credit Agreement") and (c) all
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and any of the documents other than the Note, the Credit Agreement or this
Mortgage now or hereafter executed by Mortgagor and/or others and by or in favor
of Mortgagee, which wholly or partially secure or guaranty payment of the Note
(collectively, the "Loan Documents"), are hereby made a part of this Mortgage to
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same extent and with the same force as if fully set forth herein. In the
event of any conflict between the terms of this Mortgage and the terms of the
Credit Agreement, the Credit Agreement shall govern and control to the extent of
such conflict.
2. Warranty of Title. Mortgagor warrants that it has good title to the
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Mortgaged Property and has the right to mortgage, give, grant, bargain, sell,
alien, convey, confirm, pledge, assign and hypothecate the same and that
Mortgagor possesses an unencumbered fee estate in the Land and the Improvements
and that it owns the Mortgaged Property free and clear of all liens,
encumbrances and charges whatsoever except for those exceptions shown in the
title insurance policy insuring the lien of this Mortgage and the Permitted
Encumbrances (as defined in the Credit Agreement). Mortgagor shall forever
warrant, defend and preserve such title and the validity and priority of the
lien of this Mortgage and shall forever warrant and defend the same to Mortgagee
against the claims of all persons whomsoever, subject to the Permitted
Encumbrances.
3. Insurance.
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(a) Mortgagor, at its sole cost and expense, for the mutual benefit
of Mortgagor and Mortgagee, shall obtain and maintain during the entire term of
this Mortgage the policies of insurance described in Schedule B annexed to the
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Credit Agreement.
(b) If the Mortgaged Property shall be damaged or destroyed, in whole
or in part, by fire or other casualty, Mortgagor shall give prompt written
notice thereof to Mortgagee. Sums paid to Mortgagee by an insurer, after
deduction of Mortgagee's reasonable costs and expenses of collection (after such
deduction, the "Insurance Proceeds"), shall be applied as hereinafter set forth.
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If the Mortgaged Property shall be damaged or destroyed, in whole or in part, by
fire or other casualty, Mortgagor may elect (which election must be exercised
not later than fifteen (15) days after the date the Mortgaged Property shall be
so damaged or destroyed) to repay the principal amount of the Note, together
with all accrued interest under the Note and all fees and expenses required to
be paid by Mortgagor under the Note, the Credit Agreement, this Mortgage and the
other Loan Documents with respect to the Loan (as defined in the Credit
Agreement) evidenced by the Note and secured by this Mortgage, in lieu of any
requirement on the part of Mortgagor to restore the Mortgaged Property. Such
sums must be paid by Mortgagor to Mortgagee within thirty (30) days after the
making of Mortgagor's election as provided above. Upon the payment of such sums
to Mortgagee, the Mortgagor shall have no further obligation to restore the
Mortgaged Property and Mortgagee shall assign to Mortgagor all of Mortgagee's
right, title and interest in and to the Insurance Proceeds. In the event
Mortgagor shall fail to make the election described in
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this paragraph 3(b) within fifteen (15) days after the date the Mortgaged
Property shall be damaged or destroyed, then, the Insurance Proceeds may be
retained and (i) applied by Mortgagee toward payment of the Debt in such
priority and proportions as Mortgagee in its discretion shall deem proper or,
(ii) if the conditions set forth in paragraph 3(d) of this Mortgage are
satisfied, as determined by Mortgagee in its sole discretion, paid to Mortgagor
for the restoration and repair of the Mortgaged Property in accordance with
paragraph 3(c) of this Mortgage in whole or in such lesser amount as is
necessary to pay for the costs of such restoration and repair.
(c) If the Insurance Proceeds are made available to Mortgagor for the
cost of restoration and repair of the Mortgaged Property, (i) the Mortgaged
Property shall be substantially restored to the equivalent of its condition
prior to such casualty or to such other condition as Mortgagee may approve in
writing, (ii) such restoration and repair shall be done in compliance with all
applicable laws, rules and regulations, and (iii) all reasonable costs and
expenses incurred by Mortgagee in connection with making the Insurance Proceeds
available for such restoration and repair including, without limitation, counsel
fees and inspecting engineers' fees incurred by Mortgagee, shall be paid by
Mortgagor. If the cost to repair or restore the Mortgaged Property will exceed
$100,000, Mortgagee may, at Mortgagee's option, condition disbursement of said
proceeds on Mortgagee's approval of such plans and specifications of an
architect reasonably satisfactory to Mortgagee, contractor's cost estimates,
architect's certificates, waivers of liens, sworn statements of mechanics and
material men and such other evidence of costs, percentage completion of
construction, application of payments, and satisfaction of liens as Mortgagee
may reasonably require. If the Insurance Proceeds are applied to the payment of
the Debt, any such application of proceeds to principal shall not extend or
postpone the maturity date of the Note or change the amount or the due date of
any installment payment under the Note. Any surplus Insurance Proceeds, after
payment of the Debt, shall be paid to Mortgagor. If the Mortgaged Property is
sold pursuant to paragraph 25 of this Mortgage or if Mortgagee acquires title to
the Mortgaged Property, Mortgagee shall have all of the right, title and
interest of Mortgagor in and to any insurance policies and unearned premiums
thereon and in and to the Insurance Proceeds resulting from any damage to the
Mortgaged Property prior to such sale or acquisition.
(d) Mortgagee shall not exercise its option to apply Insurance
Proceeds to the payment of the sums secured by this Mortgage if all the
following conditions are met, as determined by Mortgagee in its sole discretion:
(i) no Event of Default is then continuing under this Mortgage, the Note, the
Credit Agreement or any other Loan Document; (ii) Mortgagee determines that
there will be sufficient funds (whether consisting of Insurance Proceeds and/or
other sums made available by Mortgagor for restoration) to restore and repair
the Mortgaged Property to the condition required under paragraph 3(c) above;
(iii) Mortgagee determines that restoration and repair of the Mortgaged Property
to the condition required under paragraph 3(c) above will be completed within
the greater of (A) three (3) months after Mortgagor=s receipt of Insurance
Proceeds or (B) the period of time covered by the business interruption
insurance, if any, then in effect from the date of the loss or casualty to the
Mortgaged Property; and (iv) Mortgagee shall have received evidence reasonably
satisfactory to it that during the period of restoration and repair of the
Mortgaged Property to the condition
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required under subparagraph 3(c) above, the sum of (A) income derived from the
Mortgaged Property, as reasonably determined by Mortgagee, plus (B) proceeds of
business interruption insurance, if any, to be paid, plus (C) amounts that
Mortgagor demonstrates to Mortgagee's reasonable satisfaction will be made
available by Mortgagor from other sources during such period will equal or
exceed the sum of (D) expenses in connection with the operation of the Mortgaged
Property and (E) the debt service under the Note.
4. Payment of Taxes, etc.
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(a) All taxes, assessments and water and sewer rents, now or
hereafter levied or assessed or imposed against the Mortgaged Property or any
part thereof (the "Taxes") shall be paid by Mortgagor when due. Mortgagor shall
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pay all ground rents, maintenance charges, other governmental impositions, and
other charges, including without limitation vault charges and license fees for
the use of vaults, chutes and similar areas adjoining the Mortgaged Property,
now or hereafter levied or assessed or imposed against the Mortgaged Property or
any part thereof (the "Other Charges") as the same become due and payable.
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Mortgagor will deliver to Mortgagee, promptly after same are made available to
Mortgagor, tax certificates or receipted tax bills or other evidence of payment
issued by the relevant taxing authority evidencing that the Taxes and Other
Charges have been so paid or are not then delinquent. Mortgagor shall not suffer
and shall promptly cause to be paid or discharged any lien or charge whatsoever
which may be or become a lien or charge against the Mortgaged Property (other
than a Permitted Encumbrance), and shall promptly pay for all utility services
provided to the Mortgaged Property.
(b) Mortgagor, at its own expense, may contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in part of any of
the Taxes or Other Charges, provided that (i) Mortgagor is not in default under
the Note, the Credit Agreement, this Mortgage or any other Loan Document, (ii)
such proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which Mortgagor is subject and shall not
constitute a default thereunder, (iii) neither the Mortgaged Property nor any
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost, (iv) Mortgagor shall have paid the Taxes under
protest or set aside adequate reserves for the payment of the Taxes or Other
Charges, together with all interest and penalties thereon and (v) Mortgagor
shall have furnished such security as may be required in the proceeding to
insure the payment of any such Taxes or Other Charges, together with all
interest and penalties thereon.
5. Escrow Fund. (a) In the event Mortgagor shall at any time fail to pay
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any Taxes when due, and such failure shall continue for a period of fifteen (15)
days after the date such Taxes were due, Mortgagee may, at its election, require
Mortgagor to pay to Mortgagee, on the first day of each calendar month occurring
thereafter, one-twelfth (1/12th) of an amount which would be sufficient to pay
the Taxes payable, or estimated by Mortgagee to be payable, during the next
twelve (12) months and also provide for an additional reserve equal to one-
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sixth (1/6th) of the Taxes payable (said amounts being hereinafter called the
"Tax Escrow Fund.")
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(b) The Tax Escrow Fund and the payments of interest or principal or
both, payable pursuant to the Note, shall be added together and shall be paid as
an aggregate sum by Mortgagor to Mortgagee. Mortgagor hereby pledges to
Mortgagee any and all monies now or hereafter deposited in the Tax Escrow Fund
as additional security for the payment of the Debt. Mortgagee will apply the
Tax Escrow Fund to payments of Taxes to be made by Mortgagor pursuant to
paragraph 4 hereof. If the amount of the Tax Escrow Fund shall exceed the
amounts due for Taxes pursuant to paragraph 4 hereof, Mortgagee shall, in its
discretion, return any excess to Mortgagor or credit such excess against future
payments to be made to the Tax Escrow Fund. In allocating such excess,
Mortgagee may deal with the person shown on the records of Mortgagee to be the
owner of the Mortgaged Property. If the balance in the Tax Escrow Fund on the
first day of the month which is one full month prior to the due date of any
Taxes is not sufficient to pay the Taxes, Mortgagor shall pay to Mortgagee, upon
demand, an amount which Mortgagee shall estimate as sufficient to make up the
deficiency. Upon the acceleration of the Debt as described in paragraph 25
hereof, Mortgagee may apply any sums then present in the Tax Escrow Fund to the
payment of the following items in any order in its sole discretion:
(i) Taxes and Other Charges;
(ii) Interest on the unpaid principal balance of the Note;
(iii) Amortization of the unpaid principal balance of the Note; or
(iv) All other sums payable pursuant to the Note, the Credit
Agreement, this Mortgage and the other Loan Documents, including without
limitation, advances made by Mortgagee pursuant to the terms of this
Mortgage.
(c) Until expended or applied as above provided, any amounts in the
Tax Escrow Fund shall constitute additional security for the Debt. The Tax
Escrow Fund shall not constitute a trust fund and may be commingled with other
monies held by Mortgagee. No earnings or interest on the Tax Escrow Fund shall
be paid to Mortgagor, unless applicable law requires interest on the Tax Escrow
Fund to be paid to Mortgagor. Any such required interest shall be deposited in
the Tax Escrow Fund as additional security for the payment of the Debt.
6. Condemnation.
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(a) Mortgagor shall promptly give Mortgagee written notice of the
actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Mortgagee copies of any and all papers served in
connection with such proceedings. Notwithstanding any taking by any public or
quasi-public authority through eminent domain or otherwise (including but not
limited to any transfer made in lieu of or in anticipation of the exercise of
such taking), Mortgagor shall continue to pay the Debt at the time and in the
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manner provided for its payment in the Note, the Credit Agreement, this Mortgage
and the other Loan Documents and the Debt shall not be reduced until any award
or payment therefor shall have been actually received after expenses of
collection and applied by Mortgagee to the discharge of the Debt. Mortgagee
shall not be limited to the interest paid on the award by the condemning
authority but shall be entitled to receive out of the award interest at the rate
or rates provided herein and in the Note. Mortgagor shall cause the award or
payment made in any condemnation or eminent domain proceeding, which is payable
to Mortgagor, to be paid directly to Mortgagee. Sums paid to Mortgagee for such
condemnation or action of eminent domain, after deduction of Mortgagee's
reasonable costs and expenses of collection (after such deduction, the
"Condemnation Proceeds"), shall be applied as hereinafter set forth. In the
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event of the actual commencement of condemnation or eminent domain proceedings
affecting the Mortgaged Property, Mortgagor may elect (which election must be
exercised not later than fifteen (15) days prior to the effective date of the
taking of the Mortgaged Property to repay the principal amount of the Note,
together with all accrued interest under the Note and all fees and expenses
required to be paid by Mortgagor under the Note, the Credit Agreement, this
Mortgage and the other Loan Documents with respect to the Loan evidenced by the
Note and secured by this Mortgage, in lieu of any requirement on the part of
Mortgagor to restore the Mortgaged Property. Such sums must be paid by Mortgagor
to Mortgagee within thirty (30) days after the making of Mortgagor=s election as
provided above. Upon the payment of such sums to Mortgagee, the Mortgagor shall
have no further obligation to restore the Mortgaged Property and Mortgagee shall
assign to Mortgagor all of Mortgagee's right, title and interest in and to the
Condemnation Proceeds. In the event Mortgagor shall fail to make the election
described above in this paragraph 6(a) within fifteen (15) days prior to the
effective date of the taking of the Mortgaged Property, then, at Mortgagee's
election, the Condemnation Proceeds may be retained and (i) applied by Mortgagee
toward payment of the Debt in such priority and proportions as Mortgagee in its
discretion shall deem proper, or (ii) if the conditions set forth in paragraph
6(c) of this Mortgage are satisfied, as determined by Mortgagee in its sole
discretion, paid to Mortgagor for the restoration and repair of the Mortgaged
Property in accordance with paragraph 6(b) of this Mortgage in whole or in such
lesser amount as is necessary to pay for the costs of such restoration and
repair. If the Mortgaged Property is sold pursuant to paragraph 25 of this
Mortgage or if Mortgagee acquires title to the Mortgaged Property, Mortgagee
shall have all of the right, title and interest of Mortgagor in and to any
Condemnation Proceeds resulting from any condemnation or eminent domain
proceeding of the Mortgaged Property prior to such sale or acquisition.
(b) If the Condemnation Proceeds are made available to Mortgagor for
the cost of restoration and repair of the Mortgaged Property, (i) the Mortgaged
Property shall be substantially restored to the equivalent of its condition
prior to such condemnation or to such other condition as Mortgagee may approve
in writing, (ii) such restoration and repair shall be done in compliance with
all applicable laws, rules and regulations, and (iii) all reasonable costs and
expenses incurred by Mortgagee in connection with making the Condemnation
Proceeds available for such restoration and repair including, without
limitation, counsel fees and inspecting engineers' fees incurred by Mortgagee,
shall be paid by Mortgagor. If the cost to repair or restore the Mortgaged
Property will exceed $100,000, Mortgagee may, at Mortgagee's option, condition
disbursement of said proceeds on Mortgagee's approval of such
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plans and specifications of an architect reasonably satisfactory to Mortgagee,
contractor's cost estimates, architect's certificates, waivers of liens, sworn
statements of mechanics and material men and such other evidence of costs,
percentage completion of construction, application of payments, and satisfaction
of liens as Mortgagee may reasonably require. If the Condemnation Proceeds are
applied to the payment of the Debt, any such application of proceeds to
principal shall not extend or postpone the maturity date of the Note or change
the amount or the due date of any installment payment under the Note. Any
surplus Condemnation Proceeds, after payment of the Debt, shall be paid to
Mortgagor. If the Mortgaged Property is sold pursuant to paragraph 25 of this
Mortgage or if Mortgagee acquires title to the Mortgaged Property, Mortgagee
shall have all of the right, title and interest of Mortgagor in and to any
Condemnation Proceeds resulting from any condemnation or eminent domain
proceeding of the Mortgaged Property prior to such sale or acquisition.
(c) Mortgagee shall not exercise its option to apply Condemnation
Proceeds to the payment of the sums secured by this Mortgage if all the
following conditions are met, as determined by Mortgagee in its sole discretion:
(i) no Event of Default is then continuing under this Mortgage, the Note, the
Credit Agreement or any other Loan Document; (ii) Mortgagee determines that
there will be sufficient funds (whether consisting of Condemnation Proceeds
and/or other sums made available by Mortgagor for restoration) to restore and
repair the Mortgaged Property to the condition required under paragraph 6(b)
above; (iii) Mortgagee determines that restoration and repair of the Mortgaged
Property to the condition required under paragraph 6(b) above will be completed
within the greater of (A) three (3) months after Mortgagor=s receipt of
Condemnation Proceeds or (B) the period of time covered by the business
interruption insurance, if any, then in effect from the date of the loss or
casualty to the Mortgaged Property; and (iv) Mortgagee shall have received
evidence reasonably satisfactory to it that during the period of restoration and
repair of the Mortgaged Property to the condition required under subparagraph
6(b) above, the sum of (A) income derived from the Mortgaged Property, as
reasonably determined by Mortgagee, plus (B) proceeds of business interruption
insurance, if any, to be paid, plus (C) amounts that Mortgagor demonstrates to
Mortgagee's reasonable satisfaction will be made available by Mortgagor from
other sources during such period will equal or exceed the sum of (D) expenses in
connection with the operation of the Mortgaged Property and (E) the debt service
under the Note.
7. Leases and Rents.
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(a) Mortgagor does hereby absolutely and unconditionally assign to
Mortgagee its right, title and interest in all current and future Leases and
Rents, it being intended by Mortgagor that this assignment constitutes a
present, absolute assignment and not an assignment for additional security only.
Such assignment to Mortgagee shall not be construed to bind Mortgagee to the
performance of any of the covenants, conditions or provisions contained in any
such Lease or otherwise to impose any obligation upon Mortgagee. Mortgagor
agrees to execute and deliver to Mortgagee such additional instruments, in form
and substance reasonably satisfactory to Mortgagee, as may hereafter be
requested by Mortgagee to further evidence and confirm such assignment.
Nevertheless, subject to the
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terms of this paragraph 7, Mortgagee grants to Mortgagor a revocable license to
operate and manage the Mortgaged Property and to collect the Rents. Mortgagor
shall hold the Rents, or a portion thereof sufficient to discharge all current
sums due on the Debt, in trust for the benefit of Mortgagee for use in the
payment of such sums. Upon an Event of Default, the license granted to Mortgagor
herein shall be automatically revoked and Mortgagee shall immediately be
entitled to possession of all Rents, whether or not Mortgagee enters upon or
takes control of the Mortgaged Property. Mortgagee is hereby granted and
assigned by Mortgagor the right, at its option, upon the revocation of the
license granted herein to enter upon the Mortgaged Property in person, by agent
or by court-appointed receiver to collect the Rents. Any Rents collected after
the revocation of the license herein granted may be applied toward payment of
the Debt in such priority and proportion as Mortgagee in its discretion shall
deem proper.
(b) Upon request, Mortgagor shall furnish Mortgagee with copies of
all Leases and all amendments or modifications of any Lease. All Leases shall
provide that each such Lease is subordinate to this Mortgage and that the lessee
agrees to attorn to Mortgagee. Mortgagee shall execute and deliver to any lessee
which is a Qualified AFC Franchisee (as defined in the Credit Agreement) a non-
disturbance agreement, which agreement shall be in the Mortgagee's standard form
and prepared by Mortgagee=s counsel at Mortgagor's expense. Mortgagor (i) shall
observe and perform all the obligations imposed upon the lessor under the Leases
and shall not do or permit to be done anything to impair the value of the Leases
as security for the Debt; (ii) shall upon request by Mortgagee, send Mortgagee
copies of all notices of default sent or received by Mortgagee under the Leases;
(iii) shall enforce all of the material terms, covenants and conditions
contained in the Leases on the part of the lessee thereunder to be observed or
performed to the extent commercially reasonable; (iv) shall not collect any of
the Rents (excluding common area charges, taxes and insurance deposits and
security deposits) more than one (1) month in advance (except with respect to
collection of the final month's rent as security); (v) shall not execute any
other assignment of lessor's interest in the Leases or the Rents; and (vi) shall
execute and deliver at the request of Mortgagee all such further assurances,
confirmations and assignments in connection with the Mortgaged Property as
Mortgagee shall from time to time require.
(c) Mortgagor shall not, without the prior written consent of
Mortgagee (i) amend or modify any Lease with respect to the term thereof or the
Rent payable thereunder, (ii) execute a new Lease, (iii) permit use of the
demised premises under any Lease for use or uses other than quick service
restaurant use; or (iv) terminate, cancel or accept a surrender of any Lease
other than as a result of the lessee=s non-payment of Rent or uncured breach of
any material term of its Lease.
8. Maintenance of Mortgaged Property. Mortgagor shall cause the Mortgaged
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Property to be maintained in a good and safe condition and repair. The
Improvements and the Equipment shall not be removed, demolished or materially
altered (except for normal replacement of the Equipment) without the written
consent of Mortgagee. Mortgagor shall promptly comply with all laws, orders and
ordinances affecting the Mortgaged Property and the use thereof. Mortgagor
shall promptly repair, replace or rebuild any part of the
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Mortgaged Property that (i) is damaged or destroyed by any casualty (subject to
the provisions of paragraph 3 hereof), (ii) becomes damaged, worn or
dilapidated, or (iii) is affected by any proceeding of the character referred to
in paragraph 6 hereof (subject to the provision of such paragraph 6) and
Mortgagor shall complete and pay for any structure at any time in the process of
construction, renovation or repair on the Land. Mortgagor shall not initiate,
join in, acquiesce in, or consent to any change in any private restrictive
covenant, zoning law or other public or private restriction, limiting or
defining the uses which may be made of the Mortgaged Property or any part
thereof. If under applicable zoning provisions the use of all or any portion of
the Mortgaged Property is or shall become a nonconforming use, Mortgagor will
not cause or permit such nonconforming use to be discontinued or abandoned
without the express written consent of Mortgagee.
9. Transfer or Encumbrance of the Mortgaged Property.
-------------------------------------------------
(a) Mortgagor acknowledges that Mortgagee has examined and relied on
the creditworthiness of Mortgagor and experience of Mortgagor in developing,
constructing, renovating, owning and operating properties such as the Mortgaged
Property in agreeing to make the Loan secured hereby, and that Mortgagee will
continue to rely on Mortgagor's ownership of the Mortgaged Property as a means
of maintaining the value of the Mortgaged Property as security for repayment of
the Debt. Mortgagor acknowledges that Mortgagee has a valid interest in
maintaining the value of the Mortgaged Property so as to ensure that, should
Mortgagor default in the repayment of the Debt, Mortgagee can recover the Debt
by a sale of the Mortgaged Property. Except as otherwise expressly provided in
the Credit Agreement, Mortgagor shall not, without the prior written consent of
Mortgagee, sell, convey, alien, mortgage, encumber, pledge or otherwise transfer
the Mortgaged Property or any part thereof, or permit the Mortgaged Property or
any part thereof to be sold, conveyed, aliened, mortgaged, encumbered, pledged
or otherwise transferred (any of the foregoing, a "Transfer"). A Transfer shall
--------
not be deemed to include any utility easements or reciprocal operating
agreements with adjoining property owners for the benefit of the Mortgaged
Property.
(b) Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Mortgagor's Transfer of the
Mortgaged Property without Mortgagee's consent or in contravention of the
provisions of the Credit Agreement.
10. Estoppel Certificates and No Default Affidavits.
-----------------------------------------------
(a) After request by either Mortgagor or Mortgagee, Mortgagor or
Mortgagee, as the case may be, shall within ten (10) days furnish the requesting
party with a statement, duly acknowledged and certified, setting forth (i) the
amount of the original principal amount of the Note, (ii) the unpaid principal
amount of the Note, (iii) the rate of interest of the Note, (iv) the date
installments of interest and/or principal were last paid, (v) any offsets or
defenses to the payment of the Debt, if any and (vi) that the Note and this
Mortgage are valid, legal and binding obligations and have not been modified or
if modified, giving the particulars of such modification.
-10-
(b) Within tem (10) days after request by Mortgagee, Mortgagor will
request lessees under the Leases to furnish Mortgagee with estoppel certificates
as required by such lessees' respective Lease and Mortgagor will use diligent
efforts to obtain such estoppel certificates.
11. Changes in the Laws Regarding Taxation. If any law is enacted or
--------------------------------------
adopted or amended after the date of this Mortgage which deducts the Debt from
the value of the Mortgaged Property for the purpose of taxation or which imposes
a tax, either directly or indirectly, on the Debt or Mortgagee's interest in the
Mortgaged Property, Mortgagor will pay such tax, with interest and penalties
thereon, if any. In the event Mortgagee is advised by counsel chosen by it that
the payment of such tax or interest and penalties by Mortgagor would be unlawful
or taxable to Mortgagee or unenforceable or provide the basis for a defense of
usury, then in any such event, Mortgagee shall have the option, by written
notice of not less than ninety (90) days, to declare the Debt immediately due
and payable.
12. No Credits on Account of the Debt. Mortgagor will not claim or demand
---------------------------------
or be entitled to any credit or credits on account of the Debt for any part of
the Taxes or Other Charges assessed against the Mortgaged Property, or any part
thereof, and no deduction shall otherwise be made or claimed from the assessed
value of the Mortgaged Property, or any part thereof, for real estate tax
purposes by reason of this Mortgage or the Debt. In the event such claim,
credit or deduction shall be required by law, Mortgagee shall have the option,
by written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable.
13. Documentary Stamps. If at any time the United States of America, the
------------------
State of ______________ or any subdivision thereof shall require revenue or
other stamps to be affixed to the Note or this Mortgage, or impose any other tax
or charge on the same, Mortgagor will pay for the same, with interest and
penalties thereon, if any.
14. Usury Laws. This Mortgage and the Note are subject to the express
----------
condition that at no time shall Mortgagor be obligated or required to pay
interest on the Debt at a rate which could subject Mortgagee to either civil or
criminal liability as a result of being in excess of the maximum interest rate
which Mortgagor is permitted by law to contract or agree to pay. If by the
terms of this Mortgage or the Note, Mortgagor is at any time required or
obligated to pay interest on the Debt at a rate in excess of such maximum rate,
the rate of interest under the same shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all previous payments in excess of such maximum rate shall be deemed to
have been payments in reduction of the principal and not on account of the
interest due hereunder.
15. Security Agreement. Mortgagor hereby assigns and transfers to
------------------
Mortgagee and creates a security interest in all of Mortgagor's right, title and
interest in and to the consideration, in whatever form delivered, for the sale,
transfer or conveyance of Mortgagor's
-11-
interest in the Leases, which security interest shall automatically terminate
upon satisfaction of the Debt.
16. Performance of Other Agreements. Mortgagor shall observe and perform
-------------------------------
each and every term to be observed or performed by Mortgagor pursuant to the
terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property if the effect of the failure to observe or perform the same
would cause a Material Adverse Effect (as defined in the Credit Agreement).
17. Further Acts, etc. Mortgagor will, at the cost of Mortgagor, and
-----------------
without expense to Mortgagee, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers and assurances as Mortgagee shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Mortgagee the property and rights hereby mortgaged, given,
granted, bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged,
assigned and hypothecated or intended now or hereafter so to be, or which
Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee,
or for carrying out the intention or facilitating the performance of the terms
of this Mortgage or for filing, registering or recording this Mortgage.
Mortgagor, on demand, will execute and deliver and hereby authorizes Mortgagee
to execute in the name of Mortgagor or without the signature of Mortgagor to the
extent Mortgagee may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Mortgagee in the Mortgaged Property. Mortgagor grants to Mortgagee
an irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Mortgagee
at law and in equity, including without limitation such rights and remedies
available to Mortgagee pursuant to this paragraph 17.
18. Trust Fund. Mortgagor shall receive the advances secured hereby and
----------
shall hold the right to receive the advances as a trust fund to be applied first
as required by the Credit Agreement before using any part of the total of the
same for any other purpose.
19. Recording of Mortgage, etc. Mortgagor forthwith upon the execution
--------------------------
and delivery of this Mortgage and thereafter, from time to time, will cause this
Mortgage, and any security instrument creating a lien or security interest or
evidencing the lien hereof upon the Mortgaged Property and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and fully to protect the lien or security interest hereof upon, and
the interest of Mortgagee in, the Mortgaged Property. Mortgagor will pay all
filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property and any instrument of further assurance, and all federal, state, county
and municipal, taxes, duties, imposts, assessments and charges arising out of or
in connection with the execution and delivery of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance, except where prohibited by law
so to do. Mortgagor shall hold harmless and indemnify
-12-
Mortgagee, its successors and assigns, against any liability incurred by reason
of the imposition of any tax on the making and recording of this Mortgage.
20. Events of Default. The Debt shall become immediately due and payable
-----------------
at the option of Mortgagee, without notice or demand, upon any one or more of
the following events ("Events of Default"):
-----------------
(a) if any of the Taxes or Other Charges is not paid when the same is
due and payable, subject to the provisions of paragraphs 4 and 5;
(b) if Mortgagor violates or does not comply with any of the
provisions of paragraphs 7, 9 or 15;
(c) if the Mortgaged Property becomes subject to any mechanic's,
materialman's or other lien other than a lien for local real estate taxes and
assessments not then due and payable or Permitted Encumbrances and such lien
shall remain undischarged of record (by payment, bonding or otherwise) for a
period of sixty (60) calendar days after the filing of such lien;
(d) if Mortgagor fails to cure promptly any violations of laws or
ordinances affecting the Mortgaged Property and such failure continues for a
period of thirty (30) calendar days after Mortgagor's receipt of notice thereof;
or
(e) the occurrence of an Event of Default under the Credit Agreement.
21. Default Interest. Upon the occurrence of any Event of Default,
----------------
Mortgagor shall pay interest on the unpaid principal balance of the Note at the
Default Rate (as defined in the Note). The Default Rate shall be computed from
the occurrence of the Event of Default until the actual receipt and collection
of the Debt. This charge shall be added to the Debt, and shall be deemed
secured by this Mortgage. This clause, however, shall not be construed as an
agreement or privilege to extend the date of the payment of the Debt, nor as a
waiver of any other right or remedy accruing to Mortgagee by reason of the
occurrence of any Event of Default. If the Default Rate is above the maximum
rate permitted by applicable law, the Default Rate shall be the maximum rate
permitted by applicable law.
22. Right to Cure Defaults. Upon the occurrence of any Event of Default
----------------------
or if Mortgagor fails to make any payment or to do any act as herein provided
within any applicable notice or grace period, Mortgagee may, but without any
obligation to do so and without further notice to or demand on Mortgagor and
without releasing Mortgagor from any obligation hereunder, make or do the same
in such manner and to such extent as Mortgagee may deem necessary to protect the
security hereof. Mortgagee is authorized to enter upon the Mortgaged Property
for such purposes or appear in, defend, or bring any action or proceeding to
protect its interest in the Mortgaged Property or to foreclose this Mortgage or
collect the Debt, and the reasonable cost and expense thereof (including
reasonable attorneys' fees to the extent permitted by law and any appraisal
fees), with interest calculated at the Default Rate,
-13-
shall constitute a portion of the Debt and shall be secured by this Mortgage and
the other Loan Documents and shall be due and payable to Mortgagee upon demand.
All such costs and expenses incurred by Mortgagee in remedying such Event of
Default or in appearing in, defending, or bringing any such action or proceeding
shall bear interest at the Default Rate, for the period after notice from
Mortgagee that such cost or expense was incurred to the date of payment of
Mortgagee.
23. Late Payment Charge. If any portion of the Debt is not paid within
-------------------
fifteen (15) calendar days after the date on which it is due, Mortgagor shall
pay to Mortgagee upon demand a late charge equal to the lesser of two percent
(2%) of such unpaid portion of the Debt or the maximum amount permitted by
applicable law, to defray the expense incurred by Mortgagee in handling and
processing such delinquent payment and to compensate Mortgagee for the loss of
the use of such delinquent payment, and such amount shall be secured by this
Mortgage.
24. Right of Entry. Mortgagee and its agents shall have the right to
--------------
enter and inspect the Mortgaged Property at all reasonable times.
25. Remedies.
--------
(a) Upon the occurrence of any Event of Default, Mortgagee may take
such action, without notice or demand, as it deems advisable to protect and
enforce its rights against Mortgagor and in and to the Mortgaged Property,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such order as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee:
(i) declare the entire Debt to be immediately due and payable;
(ii) institute proceedings for the complete foreclosure of this
Mortgage, in which case the Mortgaged Property or any interest therein may
be sold for cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner;
(iii) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for the
partial foreclosure of this Mortgage for the portion of the Debt then due
and payable, subject to the continuing lien of this Mortgage for the
balance of the Debt not then due;
(iv) sell for cash or upon credit the Mortgaged Property or any part
thereof and all estate, claim, demand, right, title and interest of
Mortgagor therein and rights of redemption thereof, pursuant to power of
sale or otherwise, at one or more sales, as an entity or in parcels, at
such time and place, upon such terms and after such notice thereof as may
be required or permitted by law;
-14-
(v) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein or in the Note or in the Credit Agreement;
(vi) recover judgment on the Note either before, during or after
any proceedings for the enforcement of this Mortgage;
(vii) apply for the appointment of a receiver of the Mortgaged
Property, without notice and without regard for the adequacy of the
security for the Debt and without regard for the solvency of the Mortgagor
or of any person, firm or other entity liable for the payment of the Debt;
(viii) enforce Mortgagee's interest in the Leases and Rents and enter
into or upon the Mortgaged Property, either personally or by its agents,
nominees or attorneys and dispossess Mortgagor and its agents and servants
therefrom, and thereupon Mortgagee may (A) use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and every
part of the Mortgaged Property; (B) make reasonable and necessary
alterations, additions, renewals, replacements and improvements to or on
the Mortgaged Property to restore same to good condition and working order;
(C) exercise all rights and powers of Mortgagor with respect to the
Mortgaged Property, whether in the name of Mortgagor or otherwise,
including, without limitation, the right to make, cancel, enforce or modify
Leases, obtain and evict tenants, and demand, xxx for, collect and receive
all earnings, revenues, rents, issues, profits and other income of the
Mortgaged Property and every part thereof; and (D) apply the receipts from
the Mortgaged Property to the payment of the Debt, after deducting
therefrom all reasonable expenses (including reasonable attorneys' fees)
incurred in connection with the aforesaid operations and all amounts
necessary to pay the Taxes, assessments, insurance and Other Charges in
connection with the Mortgaged Property, as well as just and reasonable
compensation for the services of Mortgagee, its counsel, agents and
employees; or
(ix) pursue such other rights and remedies as may be available at
law and in equity.
In the event of a sale, by foreclosure or otherwise, of less than all of
the Mortgaged Property, this Mortgage shall continue as a lien on the remaining
portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this paragraph or
otherwise, shall be applied by Mortgagee to the payment of the Debt in such
priority and proportion as Mortgagee in its discretion shall deem proper.
(c) To the extent permitted by applicable law, Mortgagee may
adjourn from time to time any sale by it to be made under or by virtue of this
Mortgage by announcement at
-15-
the time and place appointed for such sale or for such adjourned sale or sales;
and, except as otherwise provided by any applicable provision of law, Mortgagee,
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
(d) Upon the completion of any sale or sales made by Mortgagee under
or by virtue of this paragraph, Mortgagee, or an officer of any court empowered
to do so, shall execute and deliver to the accepted purchaser or purchasers a
good and sufficient instrument, or good and sufficient instruments, conveying,
assigning and transferring all estate, right, title and interest in and to the
property and rights sold. Mortgagee is hereby irrevocably appointed the true and
lawful attorney of Mortgagor, in its name and stead, to make all necessary
conveyances, assignments, transfers and deliveries of the Mortgaged Property and
rights so sold and for that purpose Mortgagee may execute all necessary
instruments of conveyance, assignment and transfer, and may substitute one or
more persons with like power, Mortgagor hereby ratifying and confirming all that
its said attorney or such substitute or substitutes shall lawfully do by virtue
hereof. Any such sale or sales made under or by virtue of this paragraph shall
operate to divest all the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of Mortgagor in and to the properties
and rights so sold, and shall be a perpetual bar both at law and in equity
against Mortgagor and against any and all persons claiming or who may claim the
same, or any part thereof from, through or under Mortgagor.
(e) Upon any sale made under or by virtue of this paragraph,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the Debt the net sales price after deducting therefrom the
expenses of the sale and costs of the action and any other sums which Mortgagee
is authorized to deduct under this Mortgage.
(f) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect in any manner or to any extent the lien of
this Mortgage upon the Mortgaged Property or any part thereof, or any liens,
rights, powers or remedies of Mortgagee hereunder, but such liens, rights,
powers and remedies of Mortgagee shall continue unimpaired as before.
26. Reasonable Use and Occupancy. In addition to the rights which
----------------------------
Mortgagee may have herein, upon the occurrence of any Event of Default,
Mortgagee, at its option, may require Mortgagor to pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property as may be occupied by Mortgagor or may require Mortgagor to vacate and
surrender possession of the Mortgaged Property to Mortgagee or to such receiver
and, in default thereof, Mortgagor may be evicted by summary proceedings or
otherwise.
27. Security Agreement. This Mortgage is both a real property mortgage
------------------
and a "security agreement" within the meaning of the Uniform Commercial Code.
The Mortgaged Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature, of Mortgagor in
the Mortgaged Property. Mortgagor by
-16-
executing and delivering this Mortgage has granted and hereby grants to
Mortgagee, as security for the Debt, a security interest in the Mortgaged
Property to the full extent that the Mortgaged Property may be subject to the
Uniform Commercial Code (said portion of the Mortgaged Property so subject to
the Uniform Commercial Code being called in this paragraph 27 the "Collateral").
----------
If an Event of Default shall occur, Mortgagee, in addition to any other rights
and remedies which it may have, shall have and may exercise immediately and
without demand, any and all rights and remedies granted to a secured party upon
default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the Collateral or
any part thereof, and to take such other measures as Mortgagee may deem
necessary for the care, protection and preservation of the Collateral. Upon the
request or demand of Mortgagee, Mortgagor shall at its expense assemble the
Collateral and make it available to Mortgagee at a convenient place acceptable
to Mortgagee. Mortgagor shall pay to Mortgagee on demand any and all expenses,
including legal expenses and reasonable attorneys' fees, incurred or paid by
Mortgagee in protecting the interest in the Collateral and in enforcing the
rights hereunder with respect to the Collateral. Any notice of sale, disposition
or other intended action by Mortgagee with respect to the Collateral sent to
Mortgagor in accordance with the provisions hereof at least ten (10) days prior
to such action, shall constitute commercially reasonable notice to Mortgagor.
The proceeds of any disposition of the Collateral, or any part thereof, may be
applied by Mortgagee to the payment of the Debt in such priority and proportions
as Mortgagee in its discretion shall deem proper.
28. Actions and Proceedings. Mortgagee has the right to appear in and
-----------------------
defend any action or proceeding brought with respect to the Mortgaged Property
and to bring any action or proceeding, in the name and on behalf of Mortgagor,
which Mortgagee, in its discretion, decides should be brought to protect their
interest in the Mortgaged Property. Mortgagee shall, at its option, be
subrogated to the lien of any mortgage or other security instrument discharged
in whole or in part by the Debt, and any such subrogation rights shall
constitute additional security for the payment of the Debt.
29. Waiver of Counterclaim. Mortgagor hereby waives the right to assert a
----------------------
counterclaim, other than a mandatory or compulsory counterclaim, in any action
or proceeding brought against it by Mortgagee.
30. Recovery of Sums Required to Be Paid. Mortgagee shall have the right
------------------------------------
from time to time to take action to recover any sum or sums which constitute a
part of the Debt as the same become due, without regard to whether or not the
balance of the Debt shall be due, and without prejudice to the right of
Mortgagee thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Mortgagor existing at the time such earlier action was
commenced.
31. Marshalling and Other Matters. Mortgagor hereby waives, to the extent
-----------------------------
permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Mortgaged Property or any
part thereof or any interest therein. Further, Mortgagor, to the extent
permitted by law, hereby expressly waives any and all rights of
-17-
redemption from sale under any order or decree of foreclosure of this Mortgage
on behalf of Mortgagor, and on behalf of each and every person acquiring any
interest in or title to the Mortgaged Property subsequent to the date of this
Mortgage and on behalf of all persons to the extent permitted by applicable law.
32. Hazardous Waste and Asbestos. Mortgagor hereby represents and
----------------------------
warrants to Mortgagee that, to the best of Mortgagor's knowledge, (a) the
Mortgaged Property is not in direct or indirect violation of any local, state,
federal or other governmental authority, statute, ordinance, code, order,
decree, law, rule or regulation pertaining to or imposing liability or standards
of conduct concerning environmental regulation, contamination or clean-up
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended ("CERCLA"), the Resource Conservation
------
and Recovery Act, as amended ("RCRA"), and any state super-lien and
----
environmental clean-up statutes (collectively, "Environmental Laws"); (b) the
------------------
Mortgaged Property is not subject to any private or governmental lien or
judicial or administrative notice or action relating to hazardous and/or toxic,
dangerous and/or regulated, substances, wastes, materials, pollutants or
contaminants, petroleum, tremolite, anthlophylie or actinolite or
polychlorinated biphenyls (including, without limitation, any raw materials
which include hazardous constituents) and any other substances or materials
which are included under or regulated by Environmental Laws (collectively,
"Hazardous Materials"); (c) no Hazardous Materials are or have been, prior to
-------------------
Mortgagor's acquisition of the Mortgaged Property, discharged, generated,
treated, disposed of or stored on, incorporated in, or removed or transported
from the Mortgaged Property otherwise than in compliance with all Environmental
Laws and (d) there is no asbestos present in, and no underground storage tanks
exist on, any of the Mortgaged Property. So long as Mortgagor owns or is in
possession of the Mortgaged Property, Mortgagor shall keep or cause the
Mortgaged Property to be kept free from Hazardous Materials and in compliance
with all Environmental Laws, shall promptly notify Mortgagee if Mortgagor shall
become aware of any Hazardous Materials on the Mortgaged Property and/or if
Mortgagor shall become aware that the Mortgaged Property is in direct or
indirect violation of any Environmental Laws and Mortgagor shall remove such
Hazardous Materials and/or cure such violations, as applicable, as required by
law, promptly after Mortgagor becomes aware of same, at Mortgagor's sole
expense. Nothing herein shall prevent Mortgagor from recovering such expenses
from any other party that may be liable for such removal or cure. The term
"Hazardous Materials" shall specifically not include the emission, discharge,
generation, processing, storage or transportation of any hazardous substances or
hazardous materials (including, without limitation, cleaning materials and
solvents) pursuant to, and in accordance with, a valid federal or state permit,
license or order or otherwise in accordance with applicable Environmental Laws.
The obligations and liabilities of Mortgagor under this paragraph 32 shall
survive any termination, satisfaction, or assignment of this Mortgage, any
Transfer and/or any exercise by Mortgagee of any of its rights or remedies
hereunder, including but not limited to, the acquisition of the Mortgaged
Property by foreclosure or a conveyance in lieu of foreclosure.
-18-
33. Handicapped Access.
------------------
(a) Mortgagor agrees that the Mortgaged Property shall at all times
comply to the extent applicable with the requirements of the Americans with
Disabilities Act of 1990, all state and local laws and ordinances related to
handicapped access and all rules, regulations, and orders issued pursuant
thereto including, without limitation, the Americans with Disabilities Act
Accessibility Guidelines for Buildings and Facilities (collectively, "Access
------
Laws").
----
(b) Mortgagor agrees to give prompt notice to Mortgagee of the
receipt by Mortgagor of any complaints related to violations of any Access Laws
and of the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws to the extent necessary to avoid the
imposition of any penalty or the interruption of the conduct of business at the
Mortgaged Property.
34. Indemnification. In addition to any other indemnifications provided
---------------
herein or in the Note, the Credit Agreement or the other Loan Documents,
Mortgagor shall protect, defend, indemnify and save harmless Mortgagee from and
against all liabilities, obligations, claims, demands, damages, penalties,
causes of action, losses, fines, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) imposed upon or incurred by
or asserted against Mortgagee, except to the extent resulting from Mortgagee's
gross negligence or wilful misconduct, by reason of (a) ownership of this
Mortgage or the Mortgaged Property or any interest therein; (b) the construction
or renovation of any Improvements; (c) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Mortgaged
Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (d) any use, nonuse or
condition in, on or about the Mortgaged Property or any part thereof or on
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (e) any failure on the part of Mortgagor to perform or comply with any
of the terms of this Mortgage; (f) performance of any labor or services or the
furnishing of any materials or other property in respect of the Mortgaged
Property or any part thereof; and (g) any failure of the Mortgaged Property to
comply with any Access Laws. Any amounts payable to Mortgagee by reason of the
application of this paragraph 34 shall be secured by this Mortgage and shall
become immediately due and payable and shall bear interest at the Default Rate
from the date any payment is made by Mortgagee hereunder until such payment is
reimbursed by Mortgagor. The obligations and liabilities of Mortgagor under
this paragraph 34 shall survive any termination, satisfaction or assignment of
this Mortgage, any Transfer and/or any exercise by Mortgagee of any of its
rights and remedies hereunder, including but not limited to, the acquisition of
the Mortgaged Property by foreclosure or a conveyance in lieu of foreclosure.
35. Notices. Any notice, demand, statement, request or consent made
-------
hereunder shall be in writing to the other party hereto at its address set forth
below or at such other address as such party may designate by notice to the
other party hereto and shall be deemed given (i) on receipt, if mailed, by
certified or registered U.S. mail, return receipt requested, postage prepaid;
(ii) on receipt, if delivered, fee prepaid, to a national overnight delivery
service (such
-19-
as Federal Express, Purolater Courier, U.P.S. Next Day Air); or (iii) when
delivered, if delivered by hand, as evidenced by a signed receipt:
To Mortgagor:
AFC Enterprises, Inc.
Six Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Mr. Xxxxxx Xxxxxxx
Chief Financial Officer
Telephone: (000) 000-0000
with a courtesy copy to:
AFC Enterprises, Inc.
Six Xxxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Asset Management and Legal Department
Telephone: (000) 000-0000
To Mortgagee:
Banco Popular de Puerto Rico
0 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Ms. Xxxxx Xxxxxxxx
Vice President
Telephone: (000) 000-0000
with a courtesy copy to:
XxXxxxxxx Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
A "Business Day" is any day other than a Saturday or Sunday, or a day on which
banking and savings and loan institutions in the State of New York are
authorized or obligated by law or executive order to remain closed. Refusal to
accept delivery of any notice shall be deemed to be receipt of such notice.
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36. Authority. (a) Mortgagor (and the undersigned representative of
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Mortgagor, if any) has full power, authority and right to execute, deliver and
perform its obligations pursuant to this Mortgage, and to mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm, pledge, hypothecate and assign
the Mortgaged Property pursuant to the terms hereof and to keep and observe all
of the terms of this Mortgage on Mortgagor's part to be performed and (b)
Mortgagor represents and warrants that Mortgagor is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.
37. Waiver of Notice. Mortgagor shall not be entitled to any notices of
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any nature whatsoever from Mortgagee except with respect to matters for which
this Mortgage or the Credit Agreement specifically and expressly provides for
the giving of notice by Mortgagee to Mortgagor and except with respect to
matters for which Mortgagee is required by applicable law to give notice, and
Mortgagor hereby expressly waives the right to receive any notice from Mortgagee
with respect to any matter for which this Mortgage does not specifically and
expressly provide for the giving of notice by Mortgagee to Mortgagor.
38. Sole Discretion of Mortgagee. Wherever pursuant to this Mortgage,
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Mortgagee exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Mortgagee, the decision of
Mortgagee to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Mortgagee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
39. Non-Waiver. The failure of Mortgagee to insist upon strict
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performance of any term hereof shall not be deemed to be a waiver of any term of
this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) the failure of Mortgagee to comply with any request
of Mortgagor to take any action to foreclose this Mortgage or otherwise enforce
any of the provisions hereof or of the Note or the Credit Agreement or the other
Loan Documents, (b) the release, regardless of consideration, of the whole or
any part of the Mortgaged Property, or of any person liable for the Debt or any
portion thereof or (c) any agreement or stipulation by Mortgagee extending the
time of payment or otherwise modifying or supplementing the terms of the Note,
the Credit Agreement, this Mortgage or the other Loan Documents. Mortgagee may
resort for the payment of the Debt to any other security held by Mortgagee in
such order and manner as Mortgagee, in its discretion, may elect. Mortgagee may
take action to recover the Debt, or any portion thereof, or to enforce any
covenant hereof without prejudice to the right of Mortgagee thereafter to
foreclose this Mortgage. The rights and remedies of Mortgagee under this
Mortgage shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Mortgagee shall be construed
as an election to proceed under any one provision herein to the exclusion of any
other provision. Mortgagee shall not be limited exclusively to the rights and
remedies herein stated but shall be entitled to every right and remedy now or
hereafter afforded at law or in equity.
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40. No Oral Change. This Mortgage, and any provisions hereof, may not be
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modified, amended, waived, extended, changed, discharged or terminated orally or
by any act or failure to act on the part of Mortgagor or Mortgagee, but only by
an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
41. Successors and Assigns. This Mortgage shall be binding upon and inure
----------------------
to the benefit of Mortgagor and Mortgagee and their respective heirs, personal
representatives, successors and assigns forever. Any assignment by Mortgagee of
its interest hereunder shall be subject to the provisions of Section 9.8 of the
Credit Agreement.
42. Inapplicable Provisions. If any term, covenant or condition of the
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Note, the Credit Agreement or this Mortgage is held to be invalid, illegal or
unenforceable in any respect, the Note, the Credit Agreement and this Mortgage
shall be construed without such provision.
43. Headings, etc. The headings and captions of various paragraphs of
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this Mortgage are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.
44. Governing Law. This Mortgage shall be governed by and construed in
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accordance with the laws of the State of ___________ without regard to
principles of conflict of laws.
45. Definitions. Unless the context clearly indicates a contrary intent
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or unless otherwise specifically provided herein, words used in this Mortgage
may be used interchangeably in singular or plural form and the word "Mortgagor"
shall mean "each Mortgagor and any subsequent owner or owners of the Mortgaged
Property or any part thereof or any interest therein," the word "Mortgagee"
shall mean "Mortgagee and any subsequent holder of the Note," the word "Note"
shall mean "the Note and any other evidence of indebtedness secured by this
Mortgage," the word "person" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, and any other entity, and the words "Mortgaged Property" shall
include any portion of the Mortgaged Property and any interest therein.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms and the singular form of nouns
and pronouns shall include the plural and vice versa.
46. Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
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MORTGAGOR AND MORTGAGEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON
THE LOAN EVIDENCED BY THE NOTE OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THE NOTE, THE CREDIT AGREEMENT, THIS MORTGAGE OR ANY OF THE OTHER LOAN
DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
VERBAL OR WRITTEN) OR ACTION OF MORTGAGOR OR MORTGAGEE. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR
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MORTGAGEE'S MAKING OF THE LOAN SECURED BY THIS MORTGAGE AND THE OTHER LOAN
DOCUMENTS.
47. Assignment. Subject to Section 9.8 of the Credit Agreement, Mortgagee
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shall have the right, exercisable at any time and from time to time, to sell,
transfer or assign the Mortgage and the other Loan Documents, or grant
participations therein, or issue certificates or securities evidencing a
beneficial interest therein in a rated or unrated public offering or private
placement, and Mortgagee may forward to any purchaser, transferee, assignee,
servicer, participant, investor or credit rating agency rating such securities
(collectively, an "Investor") or prospective Investor all documents and
information in Mortgagee's possession with respect to Mortgagor, the Mortgaged
Property and the Loan Documents as such Investor or prospective Investor may
request.
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage, intending to be
legally bound, the day and year first above written.
AFC ENTERPRISES, INC.,
a Minnesota corporation
By: _______________________________
Name:______________________________
Title:_____________________________
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STATE OF ________________ )
) ss.:
COUNTY OF ______________ )
On the ___ day of _________, 199__, before me personally came ______________, to
me known, who, being by me duly sworn, did depose and say that he has an address
at ________________________,that he is the _______________ of AFC Enterprises,
Inc., a Minnesota corporation, the corporation described in and which executed
the foregoing instrument; and that he signed his name thereto by consent of the
shareholders of said corporation.
_______________________________________
Notary Public
My commission expires:
EXHIBIT A
LEGAL DESCRIPTION
