COVER
UBS
EXHIBIT D-1
FORM OF SECOND MORTGAGE
State _____ Site No. _______
SECOND MORTGAGE, LEASEHOLD MORTGAGE,
SECURITY AGREEMENT, ASSIGNMENT
OF LEASES AND RENTS AND FIXTURE
FILING
Mortgagor: PAYLESS CASHWAYS, INC.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Mortgagee: CANADIAN IMPERIAL BANK OF COMMERCE,
as Coordinating and
Collateral Agent
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Mortgage
Amount: $______________
Date: December 2, 1997
Premises:
Record and SHOOK, HARDY & BACON L.L.P.
Return to: 0000 Xxxx Xx., Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxx, Esq.
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SECOND MORTGAGE, LEASEHOLD MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF
LEASES AND RENTS AND FIXTURE FILING, dated as of December 2, 1997, by and
between PAYLESS CASHWAYS, INC., a Delaware corporation, having an office at 0000
Xxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 ("Mortgagor"), and CANADIAN IMPERIAL
BANK OF COMMERCE, as Coordinating and Collateral Agent under the Agreement (as
hereinafter defined), having an office at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 ("Mortgagee").
DEFINITIONS
Mortgagor and Mortgagee agree that all capitalized terms used but not
defined herein are defined in or by reference to the Agreement and shall have
the same meanings herein as therein. Mortgagor and Mortgagee further agree that,
unless the context otherwise specifies or requires, the following terms shall
have the meanings herein specified, such definitions to be applicable equally to
the singular and the plural forms of such terms.
"Agreement" means that certain Amended and Restated Credit Agreement dated
on or about the date hereof by and among Payless Cashways, Inc., the Lenders
signatory thereto, the Underwriters, U.S. Bank National Association, as a
Fronting Bank, and Canadian Imperial Bank of Commerce, as a Fronting Bank and as
Coordinating and Collateral Agent for the Lenders, the Fronting Banks, the
Underwriters and the other Secured Parties, together with any future amendments,
amendments and restatements, extensions, modifications or supplements thereto or
thereof.
"Bankruptcy Case" means In re Payless Cashways, Inc., Case No. 97-50543 in
the Bankruptcy Court.
"Bankruptcy Code" means 11 U.S.C. ss.101 et seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the Western
District of Missouri.
"Bankruptcy Reorganization Plan" means Payless' plan of reorganization in
the Bankruptcy Case, as confirmed by the Bankruptcy Court.
"Default" means Default, as that term is defined in the Agreement.
"Default Rate" means the rate of interest specified in Section 2.8(a) of
the Agreement.
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"DIP Agent" means the DIP Agent, as that term is defined in the Agreement.
"DIP Credit Agreement" means the Revolving Credit Agreement, dated as of
July 21, 1997, among Payless, as a Debtor-in-Possession, the Lenders, the
Underwriters and the Fronting Banks party thereto and Canadian Imperial Bank of
Commerce, as Coordinating and Collateral Agent, together with any amendments,
amendments and restatements, extensions, modifications or supplements thereto or
thereof prior to the date of the Agreement.
"DIP Obligations" means the DIP Obligations, as that term is defined in the
Agreement.
"Event of Default" means the events and circumstances described as such in
Article II hereof.
"Fixtures" means all of Mortgagor's right, title and interest in all
furniture, furnishings, partitions, screens, awnings, venetian blinds, window
shades, draperies, carpeting, pipes, ducts, conduits, dynamos, motors, engines,
compressors, generators, boilers, stokers, furnaces, pumps, tanks, elevators,
escalators, vacuum cleaning systems, call systems, switchboards, sprinkler
systems, fire prevention and extinguishing apparatus, refrigerating, air
conditioning, heating, dishwashing, plumbing, ventilating, gas, steam,
electrical and lighting fittings and fixtures, licenses or permits of any kind
and all building materials, equipment and goods now or hereafter delivered to
the Premises (hereinafter defined) and intended to be installed therein, and all
other machinery, fixtures, tools, implements, apparatus, appliances, equipment,
goods, facilities and other personal property of similar character in which
Mortgagor now has, or at any time hereafter acquires, an interest and which are
now or hereafter affixed or attached to, or used in connection with the
enjoyment, occupancy and/or operation of, all or any portion of the Premises,
together with all renewals, replacements and substitutions thereof and additions
and accessions thereto and the proceeds of all of the foregoing items.
"Fronting Banks" means the Fronting Banks, as that term is defined in the
Agreement.
"Improvements" means all buildings, structures and other improvements
presently existing or hereafter constructed on the land described in Exhibit A
attached hereto.
"Lease" has the meaning ascribed to such term in Section 3.01 hereof.
"Leasehold" has the meaning ascribed to such term in paragraph "F" of the
Granting Clause, below.
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"Leasehold Interest" has the meaning ascribed to such term in paragraph "F"
of the Granting Clause, below.
"Lenders" means the Lenders, as that term is defined in the Agreement.
"Lessee" has the meaning ascribed to such term in Section 3.01 hereof.
"Loan Documents" means the Loan Documents, as that term is defined in the
Agreement.
"Loans" means the Loans, as that term is defined in the Agreement.
"Mortgage" means this Second Mortgage, Leasehold Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Filing together with any
future amendments, amendments and restatements, extensions, modifications or
supplements hereto or hereof.
"Mortgage Amount" means the principal sum of $__________________.
"Mortgaged Property" has the meaning ascribed to such term in the Granting
Clause, below.
"Notes" means the Notes, as that term is defined in the Agreement.
"Payless" means Payless Cashways, Inc., an Iowa corporation.
"Post-Petition Mortgage Liens" has the meaning ascribed to such term in the
fourth WHEREAS clause, below.
"Pre-Petition Agent" means the Pre-Petition Agent, as that term is defined
in the Agreement.
"Pre-Petition Credit Agreement" means the Amended and Restated Credit
Agreement dated as of October 3, 1996, by and among Payless, the lenders
signatory thereto, Canadian Imperial Bank of Commerce, as letter of credit bank
and as administrative and collateral agent, and The Bank of Nova Scotia,
NationsBank of Texas, N.A. and Bank of America National Trust and Savings, as
co-agents, together with any amendments, amendments and restatements,
extensions, modifications or supplements thereto or thereof prior to the date of
the Agreement.
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"Pre-Petition Obligations" means the Pre-Petition Obligations, as that term
is defined in the Agreement.
"Premises" means the land described in Exhibit A annexed hereto, together
with the Improvements thereon or to be constructed thereon or therein, and all
of the easements, rights, privileges and appurtenances thereunto belonging or in
anywise appertaining thereto including, but not limited to, all of the estate,
right, title, interest, claim or demand whatsoever of Mortgagor therein and in
and to the strips and gores, streets and ways adjacent thereto, whether in law
or in equity, in possession or expectancy, now or hereafter acquired and also
any other realty, Leaseholds (hereinafter defined) or Fixtures encompassed by
the term "Mortgaged Property", elsewhere herein defined.
"Prior Mortgage" means that Mortgage and Security Agreement executed by
Mortgagor to The Prudential Insurance Company of America, dated [June 15, 1989]
[_________, 19____] and recorded on [_________, 1989] [_________, 19____], at
Book ____, Page _____ of the real property records of ___________ County,
_____________, as assigned to Prior Mortgagee and amended by that certain
Amendment to Mortgage and Security Agreement dated December ____, 1997, as
amended, amended and restated, supplemented or otherwise modified to the extent
permitted by the Agreement.
"Prior Mortgagee" means UBS Mortgage Finance, Inc., as mortgagee under the
Prior Mortgage.
"Rents" has the meaning ascribed to such term in Section 3.01 hereof.
"Secured Obligations" has the meaning ascribed to such term in the
paragraph entitled "Secured Obligations" below.
"Secured Parties" means Secured Parties, as that term is defined in the
Agreement.
"UBS Collateral" means the real property listed on Schedule 1.1(c) to the
Agreement, together with improvements, fixtures and appurtenances relating
thereto, which is collateral pursuant to the relevant UBS Loan Documents.
"UBS Loan Agreement" means that certain Amended and Restated Loan
Agreement, dated December __, 1997, between Mortgagor and Prior Mortgagee, as
the same may be hereafter amended, amended and restated, supplemented or
otherwise modified to the extent permitted by Section 5.04 hereof.
"UBS Loan Documents" means the UBS Loan Agreement, each of the mortgages
and deeds of trust heretofore delivered by Mortgagor to Prior Mortgagee with
respect to UBS
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Collateral, as amended as of December ____, 1997 and any and all documents,
agreements and instruments related thereto, each as may be amended, amended and
restated, supplemented or otherwise modified to the extent permitted by Section
5.04 hereof.
"Underwriters" means Underwriters, as that term is defined in the
Agreement.
W I T N E S S E T H :
WHEREAS, on July 21, 1997, Payless filed a voluntary petition of bankruptcy
under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court; and
WHEREAS, prior to the commencement of the Bankruptcy Case, Payless was
obligated to the Lenders or their predecessors-in-interest pursuant to, among
other things, the Pre-Petition Credit Agreement; and
WHEREAS, during the Bankruptcy Case, Payless became obligated to certain of
the Lenders pursuant to the DIP Credit Agreement; and
WHEREAS, pursuant to the orders of the Bankruptcy Court entered on July 21,
1997 and August 20, 1997 in the Bankruptcy Case, the DIP Agent and the
Pre-Petition Agent were granted liens (the "Post-Petition Mortgage Liens") on
the Mortgaged Property to secure the Pre-Petition Obligations and the DIP
Obligations; and
WHEREAS, as contemplated by Payless' Bankruptcy Reorganization Plan,
Payless has merged with and into Mortgagor, with Mortgagor being the sole
surviving entity; and
WHEREAS, pursuant to the terms of the Bankruptcy Reorganization Plan and
the Agreement, the parties have agreed among other things, (i) to permit the
merger of Payless into Mortgagor, (ii) to secure various obligations of Payless
(as Mortgagor's predecessor) in respect of the Pre-Petition Obligations and the
DIP Obligations, and (iii) without duplication, to secure all obligations,
whether now existing or hereafter incurred or arising, of Mortgagor under the
Agreement, the Notes and/or the other Loan Documents, including, without
limitation, the Secured Obligations; in each case as more particularly set forth
in the Agreement and this Mortgage; and
WHEREAS, Mortgagor is the actual, record and beneficial owner of the
Premises or owns an actual beneficial interest therein; and
WHEREAS, Mortgagor has agreed pursuant to the terms of the Agreement, the
Notes, and/or the other Loan Documents evidencing the Secured Obligations to be
liable for the Secured Obligations; and
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WHEREAS, the parties intend that the Secured Obligations shall be secured
by this Mortgage.
GRANTING CLAUSE
NOW, THEREFORE, Mortgagor, in consideration of the premises, and in order
to secure the payment in full of the Mortgage Amount, the Secured Obligations,
all interest due thereon and all other costs and expenses and other amounts due
hereunder and in respect of the Secured Obligations, and the performance and
discharge of all the provisions hereof, of the Secured Obligations and all other
Loan Documents, hereby confirms the Post Petition Mortgage Liens and gives,
grants, bargains, mortgages, pledges and grants a security interest to
Mortgagee, all of Mortgagor's estate, right, title and interest in, to and under
any and all of the following described property whether now owned or hereafter
acquired (all such properties being collectively referred to as the "Mortgaged
Property"), subject, however, to the Prior Mortgage:
A. All Mortgagor's right, title and interest in and to the Premises and all
right, title and interest of Mortgagor in and to the Improvements on the
Premises or to be constructed thereon and all Fixtures now or hereafter situated
in, on or about, or affixed or attached to the Improvements or the Premises or
any building, structure or other improvement now or hereafter standing,
constructed or placed upon or within the Premises, and all and singular the
tenements, hereditaments, easements, rights-of-way or use, rights, privileges
and appurtenances to the Premises, now or hereafter belonging or in anywise
appertaining thereto, including, without limitation, any such right, title,
interest, claim and demand in, to and under any agreement granting, conveying or
creating, for the benefit of the Premises, any easement, right or license in any
way affecting other property and in, to and under any streets, ways, alleys,
vaults, gores or strips of land adjoining the Premises, or any parcel thereof,
and all claims or demands either in law or in equity, in possession or
expectancy, of, in and to the Premises.
B. All right, title and interest of Mortgagor in and to all awards
heretofore made or hereafter to be made for the taking by eminent domain of the
whole or any part of the above described premises, or any estate or easement
therein, including any awards for change of grade of streets, all of which
awards are hereby assigned to Mortgagee, which Mortgagee is hereby authorized to
collect (unless provided otherwise in the Agreement), and receive the proceeds
of such awards and to give proper receipts and acquittances therefor and
Mortgagee shall have the right and option to apply such excess towards the
payment of any sum owing on account of this Mortgage and the Secured Obligations
secured thereby, notwithstanding the fact that such sum may not then be due and
payable.
C. The Fixtures and the products and proceeds thereof.
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D. All present and future leases, subleases and licenses and any guarantees
thereof, rents, issues and profits and additional rents now or at any time
hereafter covering or affecting all or any portion of the Mortgaged Property and
all proceeds of, and all privileges and appurtenances belonging or in any way
appertaining to, the Mortgaged Property, or any part thereof, and all other
property subjected or required to be subjected to the lien and/or security
interest of this Mortgage, including, without limitation, all of the income,
revenues, earnings, rents, maintenance payments, tolls, issues, awards
(including, without limitation, condemnation awards and insurance proceeds),
products and profits thereof, which income, revenues, earnings, rents,
maintenance payments, tolls, issues, awards, products and profits are hereby
expressly assigned with the right to take and collect the same upon the terms
hereinafter set forth; and all the estate, right, title, interest and claim
whatsoever, at law and in equity, which Mortgagor now has or may hereafter
acquire in and to the aforementioned property and every part thereof; provided,
that so long as no Event of Default (as hereinafter defined) shall have occurred
and be continuing, all such income, revenues, earnings, rents, maintenance
payments, tolls, issues, awards, products and profits shall remain with and
under the control of Mortgagor except as otherwise expressly provided herein or
in any other written agreement between Mortgagor and Mortgagee.
E. All right, title and interest of Mortgagor in and to all agreements, or
contracts, now or hereafter entered into for the sale, leasing, brokerage,
development, construction, renovation, management, maintenance and/or operation
of the Premises (or any part thereof), including all moneys due and to become
due thereunder, and all permits, licenses, bonds, insurance policies, plans and
specifications relative to the construction and/or operation of the Improvements
upon the Mortgaged Property.
F. All right, title and interest (including, without limitation, all
present and future rights to possession and use, and all present and future
options and other rights to renew and to purchase) of Mortgagor, as lessee or
sublessee, under any leases, subleases, licenses, occupancy agreements or
concessions now in effect or to be entered into hereafter (collectively, the
"Leasehold Instruments") whereby Mortgagor has any right to the use, possession
or occupancy of the Premises or any part thereof (collectively, the
"Leaseholds").
G. All of Mortgagor's claims and rights to the payment of damages arising
from any rejection of a Leasehold or a Lease under or pursuant to the Bankruptcy
Code.
H. All Mortgagor's rights and remedies at any time arising under or
pursuant to Subsection 365(h) of the Bankruptcy Code, 11 U.S.C. ss.365(h),
including, without limitation, all of Mortgagor's rights to remain in possession
of the Premises.
I. Any other property and rights which are, by the provisions of the
Agreement or any other Loan Document, required to be subject to the lien hereof,
and any additional
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property and rights that may from time to time hereafter by installation in or
on the Mortgaged Property, or by writing of any kind, or otherwise, be subjected
to the lien hereof by Mortgagor or by anyone on its behalf.
J. All proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance and condemnation awards, and all right, title and interest
of Mortgagor in and to all unearned premiums accrued, accruing and to accrue
under any or all insurance policies obtained by Mortgagor.
TO HAVE AND TO HOLD the Mortgaged Property, subject to the Prior Mortgage,
unto Mortgagee and its successors and assigns, upon the terms, provisions and
conditions herein set forth, forever, and Mortgagor does hereby bind itself and
its successors, legal representatives, and assigns to warrant and forever defend
all and singular the Mortgaged Property unto Mortgagee and its successors and
assigns, against every person whomsoever lawfully claiming or to claim the same
or any part thereof, subject to the rights of the Prior Mortgagee.
SECURED OBLIGATIONS
This Mortgage, and all rights, titles, interests, liens, security
interests, powers, privileges and remedies created hereby or arising hereunder
or by virtue hereof, are given to secure the payment and performance of all
indebtedness, obligations and liabilities arising under the Notes, the
Agreement, this Mortgage and any other Loan Document, and any renewals,
extensions, amendments, amendments and restatements, supplements or
modifications thereof or thereto, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing or
due or to become due, and any and all fees, costs or expenses incurred by
Mortgagee or the other Secured Parties, including, but not limited to, interest
accruing at the then applicable rate provided in the Agreement after the
maturity of the Loans and interest accruing at the then applicable rate provided
in the Agreement or other applicable agreement after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Mortgagor on the Loans and on all other obligations
of the Mortgagor to the Secured Parties, taxes, recording expenses and
attorneys' fees in connection with the execution and delivery of any of the
aforesaid, and the consummation of the transactions contemplated thereby, the
administration thereof, and, after default, the administration and collection
thereof, all costs incurred of whatever nature by Mortgagee in the exercise of
any rights hereunder or under any Loan Document and all other amounts payable by
Mortgagor under this Mortgage (all of the foregoing indebtedness, obligations
and liabilities being referred to herein as the "Secured Obligations").
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ARTICLE I
PARTICULAR WARRANTIES, REPRESENTATIONS
AND COVENANTS OF MORTGAGOR
Section 1.01 Warranties and Representations. Mortgagor hereby warrants and
represents as follows:
(a) Mortgagor is the actual, record and beneficial owner of the
Premises and holder of a good and marketable title to an indefeasible leasehold
estate in the Leaseholds or owns an actual beneficial interest therein and fee
estate in the rest of the Mortgaged Property, subject only to such exceptions to
title as are listed in the title policy insuring the lien of this Mortgage and
approved by Mortgagee and the Prior Mortgagee as permitted exceptions. Mortgagor
is the owner of all of the remaining Mortgaged Property; Mortgagor will own the
Fixtures free and clear of liens and claims except the Prior Mortgage and liens
and claims in favor of Mortgagee; and this Mortgage is and will remain a valid
and enforceable lien on the Mortgaged Property subject only to the permitted
exceptions referred to above.
(b) Mortgagor has full power and lawful authority, and has obtained
the written consent of the Prior Mortgagee, to mortgage the Mortgaged Property
in the manner and form herein done or intended hereafter to be done. Mortgagor
will preserve such title, and will forever warrant and defend the validity and
priority of the lien hereof, against the claims of all persons and parties
whomsoever.
(c) Except as otherwise specified in the Title Policy (as
defined in the Agreement) or in the Survey (as defined in the Agreement), the
Premises is not located in an area identified by the Secretary of Housing and
Urban Development as an area having special flood hazards or if it is so
located, flood insurance acceptable to Mortgagee has been obtained.
Section 1.02 Further Assurances. Mortgagor will, at its sole expense, do,
execute, acknowledge and deliver every further act, deed, conveyance, mortgage,
assignment, notice of assignment, transfer or assurance 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
conveyed, mortgaged or assigned or intended now or hereafter so to be, or which
Mortgagor may be or may hereafter become bound to convey, mortgage or assign to
Mortgagee or for carrying out the intention or facilitating the performance of
the terms of this Mortgage, and for filing, registering or recording this
Mortgage and, on demand, will execute and deliver, and hereby authorizes
Mortgagee to execute in the name of Mortgagor to the extent it may lawfully do
so, one or more financing statements, chattel
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mortgages or comparable security instruments, and renewals thereof, to evidence
more effectively the lien hereof upon the Fixtures.
Section 1.03 Filings, Recordings and Payments. (a) Mortgagor forthwith
upon the execution of this Mortgage, and thereafter from time to time, will, at
its expense, cause this Mortgage and any security instrument creating a lien or
evidencing the lien hereof upon the Fixtures 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 hereof upon, and the interest of Mortgagee in, the
Mortgaged Property.
(b) Mortgagor will pay all taxes, filing, registration and recording
fees, and all expenses incident to the execution and acknowledgment of this
Mortgage, any supplemental mortgage, any other Loan Document, and any security
instrument with respect to the Fixtures, and any instrument of further
assurance, and all federal, state, county and municipal stamp taxes and other
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of the Agreement, this Mortgage, any
supplemental mortgage, any other Loan Document, any security instrument with
respect to the Fixtures or any instrument or further assurance, other than
income, franchise or other similar taxes imposed on Mortgagee in respect of
income derived by Mortgagee under the Secured Obligations.
Section 1.04 Payment of Sums Due. Mortgagor will punctually pay the
principal and interest and all other sums to become due in respect of the
Agreement and any other Loan Document at the time and place and in the manner
specified in the Agreement and any other Loan Document, according to the true
intent and meaning thereof and without offset, counterclaim, defense or cause of
action of any kind whatsoever , and without deduction or credit for any amount
payable for taxes, all in immediately available funds in Dollars.
Section 1.05 After Acquired Property. All right, title and interest of
Mortgagor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Property, hereafter acquired by or released to Mortgagor or
constructed, assembled or placed by Mortgagor on the Premises, and all
conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or conversion, as the
case may be, and in each such case, without any further mortgage, conveyance,
assignment or other act by Mortgagor, shall become subject to the lien of this
Mortgage as fully and completely, and with the same effect, as though now owned
by Mortgagor and specifically described in the granting clauses hereof (subject
to the rights of the Prior Mortgagee), but at any and all times Mortgagor will
execute and deliver to Mortgagee any and all such further assurances, mortgages,
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conveyances or assignments thereof as Mortgagee may reasonably require for the
purpose of expressing and specifically subjecting the same to the lien of this
Mortgage.
Section 1.06 Taxes, Fees and Other Charges. (a) Mortgagor, from time to
time when the same shall become due, and prior to the date of imposition of
interest or penalty (except as otherwise permitted in the Agreement), will pay
and discharge, or cause to be paid and discharged, all taxes of every kind and
nature (including real and personal property taxes and income, franchise,
withholding, transfer or recordation taxes, profits and gross receipt taxes),
all general and special assessments, levies, permits, inspection and license
fees, all water and sewer rents and charges, and all other public charges,
whether of a like or different nature, imposed upon or assessed against it or
the Mortgaged Property or any part thereof or upon the revenues, rents, issues,
income and profits of the Premises or arising in respect of the occupancy, use
or possession thereof. Mortgagor will, at any time upon request by Mortgagee,
promptly deliver to Mortgagee receipts evidencing the payment of same.
Subject to the Prior Mortgage, upon the occurrence of an Event of Default
under the Agreement, Mortgagee may, at any time and from time to time, at its
option, to be exercised by written notice to Mortgagor, require the deposit by
Mortgagor at the time of each payment of an installment of interest or principal
under the Agreement of an additional amount sufficient to discharge the
obligations under this subsection (a) when they become due. The determination of
the amount so payable and of the fractional part thereof to be deposited with
Mortgagee, so that the aggregate of such deposit shall be sufficient for this
purpose, shall be made by Mortgagee in its sole discretion. Such amounts shall
be held by Mortgagee without interest in an account acceptable to Mortgagee and
applied to the payment of the obligations in respect to which such amounts were
deposited or, at the option of Mortgagee and subject to applicable law, to the
payment of the Secured Obligations in such order or priority as Mortgagee shall
determine consistent with the Agreement, on or before the respective dates on
which the same or any of them would become delinquent. If one month prior to the
due date of any of the obligations under this subsection (a) the amounts then on
deposit therefor shall be insufficient for the payment of such obligations in
full, subject to the Prior Mortgage, Mortgagor within ten (10) days after
demand, shall deposit the amount of the deficiency with Mortgagee. Nothing
herein contained shall be deemed to affect any right or remedy of Mortgagee
under the provisions of this Mortgage or of any statute or rule of law to pay
any such amount and to add the amount so paid together with interest at the
Default Rate to the indebtedness hereby secured.
(b) Except as otherwise permitted in the Agreement, Mortgagor will
pay, from time to time when the same shall become due, all lawful claims and
demands of mechanics, materialmen, laborers, and others which, if unpaid, might
result in, or permit the creation of, a lien on the Mortgaged Property or any
part thereof, or on the revenues, rents, issues, income and profits arising
therefrom and in general will do or cause to be done
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everything necessary so that the lien hereof shall be fully preserved, at the
cost of Mortgagor, without expense to Mortgagee.
Section 1.07 Intentionally Deleted.
Section 1.08 Insurance. (a) Mortgagor agrees to at all times provide,
maintain and keep in force the policies of insurance required to the maintained
pursuant to the terms of the Agreement.
(b) In the event Mortgagor fails to provide, maintain, keep in force
or deliver and furnish to Mortgagee the policies of insurance required by the
Agreement or this Mortgage, Mortgagee may procure such insurance or
single-interest insurance for such risks covering Mortgagee's interest, and
Mortgagor will pay all premiums thereon promptly upon demand by Mortgagee, and
until such payment is made by Mortgagor the amount of all such premiums,
together with interest thereon at the Default Rate shall be secured by this
Mortgage.
(c) After the happening of any casualty to the Mortgaged Property or
any part thereof, Mortgagor shall give prompt written notice thereof to
Mortgagee, and Mortgagee may make proof of loss if not made promptly by
Mortgagor. In the event of such loss or damage, all proceeds of insurance shall
be payable in the manner provided for in the Agreement (subject to the Prior
Mortgage). Unless otherwise provided in the Agreement, nothing herein contained
shall be deemed to excuse Mortgagor from repairing or maintaining the Premises
as provided in Section 1.12 hereof or restoring all damage or destruction to the
Mortgaged Property, regardless of whether or not there are insurance proceeds
available or whether any such proceeds are sufficient in amount, and the
application or release by Mortgagee of any insurance proceeds shall not cure or
waive any Default or notice of Default under this Mortgage or invalidate any act
done pursuant to such notice. Any monies received as payment for loss under any
insurance shall be applied pursuant to the terms of the Agreement (subject to
the Prior Mortgage).
(d) In the event of foreclosure of this Mortgage or other transfer of
title or assignment of the Premises in extinguishment, in whole or in part, of
the debt secured hereby, all right, title and interest of Mortgagor in and to
all policies of insurance required by this Section 1.08 shall inure to the
benefit of and pass to the successor in interest to Mortgagor or the purchaser
or grantee of the Premises.
(e) Mortgagor shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained under
this Section 1.08, unless Mortgagee has approved the insurance company and the
form and content of the insurance policy, including, without limitation, the
naming thereon of Mortgagee as a named
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insured with loss, subject to the rights of the Prior Mortgagee, payable to
Mortgagee under a standard mortgagee endorsement of the character above
described and the inclusion of a provision therein obligating said insurance
company to provide Mortgagee with notice thirty (30) days prior to cancellation,
lapse or amendment of any policy. Mortgagor shall immediately notify Mortgagee
whenever any such separate insurance is taken out and shall promptly deliver to
Mortgagee the policy or policies of such insurance.
(f) Subject to the Prior Mortgage, Mortgagee may at any time following
the occurrence of an Event of Default under the Agreement, at its option, to be
exercised by written notice to Mortgagor, require the deposit by Mortgagor, at
the time of each payment of an installment of interest or principal under the
Agreement, of an additional amount sufficient to discharge the obligations under
this Section 1.08 when they become due. The determination of the amount so
payable and of the fractional part thereof to be deposited with Mortgagee with
each installment, so that the aggregate of such deposit shall be sufficient for
this purpose, shall be made by Mortgagee in its sole discretion. Such amounts
shall be held by Mortgagee without interest in an account acceptable to
Mortgagee and applied to the payment of the obligations in respect of which such
amounts were deposited on or before the respective dates on which the same or
any of them would become delinquent or, at the option of Mortgagee, to the
payment of the Secured Obligations in such order or priority as Mortgagee shall
determine consistent with the Agreement. If one month prior to the due date of
any of the aforementioned obligations the amounts then on deposit therefor shall
be insufficient for the payment of such obligations in full, Mortgagor within
five (5) days after demand shall deposit the amount of the deficiency with
Mortgagee. Nothing herein contained shall be deemed to affect any right or
remedy of Mortgagee under the provisions of this Mortgage or of any statute or
rule of law to pay any such amount and to add the amount so paid together with
interest at the Default Rate to the indebtedness hereby secured.
Section 1.09 Condemnation. (a) In the event the Mortgaged Property or any
part thereof or interest therein, shall be taken or damaged by eminent domain,
alteration of the grade of any street, or there shall occur any other injury to
or decrease in the value of the Mortgaged Property, by reason of any public or
quasi-public improvement or condemnation proceeding, or in any other similar
manner ("Condemnation"), or should Mortgagor receive any notice or other
information regarding such Condemnation or a proposed Condemnation, Mortgagor
shall give prompt written notice thereof to Mortgagee.
(b) Subject to the Prior Mortgage, all compensation, awards and other
payments or relief payable as a result of any such Condemnation, shall be
payable in the manner provided for in the Agreement. Subject to the Prior
Mortgage, all such compensation, awards, damages, rights of action and proceeds
awarded to Mortgagor (the "Proceeds") are hereby assigned to Mortgagee and
Mortgagor agrees to execute such further assignments of the Proceeds as
Mortgagee may require. Mortgagee shall be under no obligation to question
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the amount of any such award or compensation and may accept the same in the
amount paid. Subject to the Prior Mortgage, all Proceeds may be applied either
against the Secured Obligations (in such order and priority as Mortgagee shall
determine consistent with the Agreement) or to restore the Premises, at the
discretion of Mortgagee, except as may be otherwise provided in the Agreement.
(c) Unless otherwise provided in the Agreement, nothing herein
contained shall be deemed to excuse Mortgagor from repairing or maintaining the
Premises as provided in Section 1.12 hereof or restoring all damage or
destruction to the Mortgaged Property, regardless of whether or not there are
proceeds available or whether any such Proceeds are sufficient in amount, and
the application or release by Mortgagee of any Proceeds shall not cure or waive
any default or notice of default under this Mortgage or invalidate any act done
pursuant to such notice.
(d) Receipt by Mortgagee and application in reduction of indebtedness
of any Proceeds less than the full amount of the then outstanding Secured
Obligations shall not defer, alter or modify Mortgagor's obligation to continue
to pay the regular installments of principal, interest on the outstanding
principal balance and other charges owned in respect of the Secured Obligations
and herein.
(e) Subject to the Prior Mortgage, if prior to the receipt of the
Proceeds by Mortgagee the condemned Premises shall have been sold on foreclosure
of this Mortgage, Mortgagee shall, nevertheless, have the right to receive the
Proceeds and to retain, for its own account, (i) an amount equal to the counsel
fees, costs and disbursements incurred by Mortgagee in connection with
collection of the Proceeds and not repaid by Mortgagor and (ii) the full amount
of all such Proceeds, if Mortgagee is the successful purchaser at the
foreclosure sale, to the extent of amounts owed in respect of the Secured
Obligations.
Section 1.10 Mortgagee's Performance of Mortgagor's Obligations. If
Mortgagor shall fail to perform any of the covenants contained herein or any
covenant contained in the Agreement or any other Loan Document, Mortgagee may,
but shall not be obligated to, make advances and/or disbursements to perform the
same. Mortgagor will repay on demand all sums so advanced and/or disbursed with
interest at the Default Rate from the date of making such advance and/or
disbursement until such sums have been repaid and all sums so advanced and/or
disbursed, together with interest thereon at the Default Rate, shall be a lien
upon the Mortgaged Property and shall be secured hereby. The provisions of this
Section 1.10 shall not prevent any default in the observance of any covenant
contained herein or with respect to the Secured Obligations or in any other Loan
Document from constituting an Event of Default.
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Section 1.11 Financial Records. Mortgagor will provide the financial
statements to Mortgagee required pursuant to the terms of the Agreement.
Section 1.12 Waste and Maintenance. Mortgagor will not threaten, commit,
permit or suffer any waste to occur on or to the Mortgaged Property or any part
thereof or alter or demolish the Mortgaged Property or any part thereof in any
manner or make any change in its use (except as provided in the Agreement, or
the Prior Mortgage) or any change which will in any way increase any fire or
other hazards arising out of construction or operation of the Mortgaged
Property. Mortgagor will, at all times, maintain the Mortgaged Property as
required pursuant to the terms of the Agreement and the Prior Mortgage.
Section 1.13 Enforcement Expenses. Except where inconsistent with the laws
of the state in which the Mortgaged Property is located, Mortgagor agrees that
if any action or proceeding be commenced, including an action to foreclose this
Mortgage or to collect the indebtedness hereby secured, to which action or
proceeding Mortgagee is made a party by reason of the execution of this Mortgage
or the other Loan Documents which it secures, or in which it becomes necessary
to defend or uphold the lien of this Mortgage, all sums paid by Mortgagee for
the expense of any litigation to prosecute or defend or participate in the
transaction and the rights and liens created hereby (including reasonable
attorneys' fees) shall be paid by Mortgagor together with interest thereon from
date of payment by Mortgagee at the Default Rate. All such sums paid and the
interest thereon shall be immediately due and payable, shall be a lien upon the
Mortgaged Property, and shall be secured hereby as shall be all such sums
incurred in connection with enforcement by Mortgagee of its rights hereunder or
under any other Loan Document.
Section 1.14 Defense of Mortgagee's Interests. If the interest of Mortgagee
in the Mortgaged Property or any part thereof or the lien or security interest
of this Mortgage thereon shall be attacked, directly or indirectly, or if legal
proceedings shall be instituted against Mortgagor or Mortgagee with respect
thereto or against Mortgagor, Mortgagor, upon its learning thereof, will
promptly give written notice thereof to Mortgagee and Mortgagor will, at
Mortgagor's cost and expense, exert itself diligently to cure, or will cause to
be cured, any defect that may have developed or be claimed to exist, and will
take all necessary and proper steps for the protection and defense thereof and
will take, or will cause to be taken, such action as is appropriate to the
defense of any such legal proceedings, including, but not limited to, the
employment of counsel and the prosecution and defense of litigation.
Section 1.15 No Impairment of Security. In no event shall Mortgagor do or
permit to be done, or omit to do or permit the omission of, any act or thing,
the doing, or omission, of which would materially impair the security of this
Mortgage or materially impair the value of the Mortgaged Property or any part
thereof.
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Section 1.16 Restrictions on Transfers and Mortgages. Unless otherwise
permitted pursuant to the terms of the Agreement, Mortgagor will not directly or
indirectly, by transfer, mortgage, conveyance, or sale of an interest in
Mortgagor permit, do or suffer the assignment, lease, transfer, sale, conveyance
or encumbrance of the Mortgaged Property, or any part thereof or any interest
therein, without the express prior written consent of Mortgagee unless otherwise
permitted pursuant to the terms of the Agreement and the Prior Mortgage. While
the Secured Obligations are outstanding, neither the structure nor the ownership
of Mortgagor may be changed without the express prior written consent of
Mortgagee unless otherwise permitted pursuant to the terms of the Agreement and,
while the Prior Mortgage is in effect, the Prior Mortgage.
Section 1.17 Mortgagee's Defense. Mortgagee may appear in and defend any
action or proceeding at law or in equity or in bankruptcy purporting to affect
the Premises or the security hereof or the rights and powers of Mortgagee, and
any appellate proceedings, and in such event Mortgagor shall pay all of
Mortgagee's costs, charges and expenses, including cost of evidence of title and
attorneys' fees incurred in such action or proceeding. All costs, charges and
expenses so incurred, together with interest thereon at the Default Rate from
the date of payment of same by Mortgagee as aforesaid, shall be secured by the
lien of this Mortgage and shall be due and payable upon demand.
Section 1.18 Environmental Compliance. Mortgagor will perform and comply
promptly with, and cause the Premises to be maintained, used and operated in
accordance with, all applicable federal, state and local laws pertaining to air
and water quality, hazardous waste, waste disposal, air emissions and other
environmental matters as set forth in the Agreement.
Section 1.19 Zoning Changes. Mortgagor will not consent to, join in, permit
or allow any change in the zoning laws or ordinances relating to or affecting
the Premises which could reasonably be expected to materially adversely affect
the Premises and will promptly notify Mortgagee of any changes to the zoning
laws.
Section 1.20 Grant of Security Interest. Mortgagor, as further security for
the payment of said indebtedness and in addition to all the rights and remedies
otherwise available to Mortgagee under this Mortgage and the other Loan
Documents, grants to Mortgagee a security interest, under the Uniform Commercial
Code as now in effect in the state where all or any of the Fixtures are located,
in and to the Fixtures, and all proceeds thereof. Upon an Event of Default,
Mortgagee shall have, in addition to all the other rights and remedies allowed
by law, the rights and remedies of a secured party under the Uniform Commercial
Code as in effect at that time. Mortgagor further agrees that the security
interest created hereby also secures all expenses of Mortgagee (including
reasonable expenses for legal services of every kind, and cost of any insurance,
and payment of taxes or other
17
charges) incurred in or incidental to, the custody, care, sale or collection of,
or realization upon, any of the property secured hereby or in any way relating
to the enforcement or protection of the rights of Mortgagee hereunder, together
with interest thereon at the Default Rate until paid.
Section 1.21 Compliance with Laws and ADA Compliance.
(a) Mortgagor warrants and covenants that the Premises are and will
continue to be substantially in compliance with all applicable local, county,
state and federal laws and regulations and all building, housing and fire codes,
rules and regulations.
(b) Without limiting the provisions of subsection (a) of this Section
1.21: (i) Mortgagor represents and warrants to Mortgagee that Mortgagor is
substantially in compliance with the Americans with Disabilities Act of 1990 (42
U.S.C.A. sec. 12101 et. seq.), as the same may be amended from time to time (the
"ADA") and all other federal, state and local laws pertaining to the
accessibility of the Premises by persons with disabilities (the ADA and such
other laws are, collectively, the "Accessibility Laws"); (ii) Mortgagor
covenants to ensure that the Premises will at all times substantially comply
with all applicable Accessibility Laws and, upon the request of Mortgagee,
Mortgagor will conduct such surveys of the Premises as Mortgagee shall require
to ascertain such compliance; (iii) Mortgagor will maintain accurate records of
all expenditures made in connection with any alterations to the Premises and
will deliver copies thereof to Mortgagee upon Mortgagee's request; and (iv)
Mortgagor shall defend, indemnify and hold harmless Mortgagee, its employees,
agents, officers and directors, attorneys and any parent or affiliate of
Mortgagee, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, cost or expenses of whatever kind or nature, known or
unknown, contingent or otherwise, arising out or in any way related to any
violations of the Accessibility Laws (including, without limitation, any costs
incurred by Mortgagee in complying with any Accessibility Laws). Neither payment
of the indebtedness secured hereby nor foreclosure shall operate as a discharge
of Mortgagor's obligations under this subsection (b). In the event Mortgagor
tenders a deed in lieu of foreclosure, Mortgagor shall deliver the Premises to
Mortgagee (or its designee) substantially free of any violations of the
Accessibility Laws. In the event Mortgagor does not timely perform any of the
above obligations, Mortgagee after 30 days notice to Mortgagor may perform said
obligations at the expense of Mortgagor and Mortgagor shall, upon written demand
from Mortgagee, reimburse Mortgagee for all costs, including attorney's fees and
out-of-pocket expenses, and all liabilities incurred by Mortgagee by reason of
the foregoing, with interest thereon at the Default Rate from the date of such
payment by Mortgagee to the date of repayment. Until paid, said costs and
expenses shall be secured by this Mortgage.
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Section 1.22 Other Multistate Mortgages. The indebtedness secured in part
by this Mortgage is secured by mortgages and/or deeds of trust encumbering and
conveying lands and other property and/or leasehold interests therein in other
states as more particularly described in the Agreement, all of which mortgages
and/or deeds of trust, including this instrument, being hereafter referred to as
"the mortgage instruments."
It is understood and agreed that all of the properties of all kinds
conveyed or encumbered by the mortgage instruments are security for the Secured
Obligations without allocation of any one or more of the parcels or portions
thereof to any portion of the Secured Obligations less than the whole amount
thereof unless so stated in said mortgage instruments.
Subject to the Prior Mortgage, it is specifically covenanted and agreed
that Mortgagee may proceed, at the same or at different times, to foreclose said
mortgage instruments, or any of them, by any proceedings appropriate in the
state where any of the land lies, and that no event of enforcement taking place
in any state including, without limiting the generality of the foregoing, any
pending foreclosure, judgment or decree of the foreclosure, foreclosure sale,
rents received, possession taken, deficiency judgment or decree, or judgment
taken on the Secured Obligations, shall in any way stay, preclude or bar
enforcement of the mortgage instruments or any of them in any other state, and
that, Mortgagee may pursue any or all its remedies to the maximum extent
permitted by state law until all of the Secured Obligations now or hereafter
secured by any or all of the mortgage instruments has been paid and discharged
in full.
Neither Mortgagor, nor any person claiming under Mortgagor, shall have or
enjoy any right to marshaling of assets, all such right being hereby expressly
waived as to Mortgagor and all persons claiming under it, including junior
lienors. No release of personal liability of any person whatever and no release
of any portion of the property now or hereafter subject to the lien of any of
the mortgage instruments shall have any effect whatever by way of impairment or
disturbance of the lien or priority of any of said mortgage instruments. Any
foreclosure or other appropriate remedy brought in any of the states aforesaid
may be brought and prosecuted as to any part of the mortgaged security, wherever
located, without regard to the fact that foreclosure proceedings or other
appropriate remedies have or have not been instituted elsewhere on any other
land subject to the lien of said mortgage instruments or any of them.
Section 1.23 Leasehold and Leasehold Instruments.
(a) Mortgagor covenants and agrees to faithfully comply with and
perform all of its obligations under the Leasehold Instruments, and to promptly
cure any default by it under the Leasehold Instruments.
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(b) Mortgagor may modify, amend or terminate any Leasehold Instrument
without the prior written consent provided such action is consistent with the
terms of the Agreement and the Prior Mortgage.
(c) Mortgagor will promptly give Mortgagee a copy of any default
notice given to Mortgagor with respect to any Leasehold Instrument.
ARTICLE II
EVENTS OF DEFAULT AND REMEDIES
Section 2.01 Events of Default. The following shall constitute defaults
hereunder and, after the giving of notice and the passage of time, if any, as
provided herein, shall constitute "Events of Default" hereunder:
(a) If Mortgagor shall fail to pay when due any Secured Obligation
after the passage of any applicable notice or grace period, if any; or
(b) If an Event of Default, as defined in the Agreement, shall occur
under the Agreement.
Section 2.02 Mortgagee's Remedies. (a) During the continuance of any Event
of Default, Mortgagee, without notice or presentment, each of which are hereby
waived by Mortgagor, may, subject to the provisions of the Agreement, declare
the entire principal of the Secured Obligations then outstanding and all accrued
and unpaid interest thereon and all other amounts owing in respect thereof (if
not then due and payable, whether by acceleration or otherwise), to be due and
payable immediately, and upon any such declaration the principal of the Secured
Obligations and said accrued and unpaid interest shall become and be immediately
due and payable, anything in the instruments evidencing the Secured Obligations
or in this Mortgage to the contrary notwithstanding;
(b) During the continuance of any Event of Default, Mortgagee may,
subject to the Prior Mortgage, enter into and upon all or any part of the
Premises, and, having and holding the same, may use, operate, manage and control
the Mortgaged Property or any part thereof and conduct the business thereof,
either personally or by its superintendents, managers, agents, servants,
attorneys or receivers; and likewise, from time to time, at the expense of
Mortgagor, Mortgagee may make all necessary or proper repairs, renewals and
replacements and such useful alterations, additions, betterments and
improvements thereto and thereon as to it may deem advisable in its sole
judgment; and in every such case Mortgagee shall have the right to manage and
operate the Mortgaged Property and to carry on the business thereof and exercise
all rights and powers of Mortgagor with respect thereto
20
either in the name of Mortgagor or otherwise as Mortgagee shall deem best; and
Mortgagee shall be entitled, subject to the Prior Mortgage, with or without
entering into or upon the Premises, to collect and receive all gross receipts,
earnings, revenues, rents, maintenance payments, issues, profits and income of
the Mortgaged Property and every part thereof, all of which shall for all
purposes constitute property of Mortgagee; and, after deducting the expenses of
conducting the business thereof and of all maintenance, repairs, renewals,
replacement, alterations, additions, betterments and improvements and amounts
necessary to pay taxes, assessments, insurance and prior or other proper charges
upon the Mortgaged Property or any part thereof, as well as just and reasonable
compensation for the services of Mortgagee and for all attorneys, counsel,
agents, clerks, servants and other employees by it properly engaged and
employed, Mortgagee may apply the moneys arising as aforesaid in such manner and
at such times as Mortgagee shall determine in its discretion consistent with the
Agreement to the payment of the Secured Obligations and the interest thereon,
when and as the same shall become payable and/or to the payment of any other
sums required to be paid by Mortgagor under this Mortgage;
(c) During the continuance of any such Event of Default, Mortgagor
covenants and agrees as follows (subject, in each case, to the Prior Mortgage
and Sections 5.05 and 5.06 of this Mortgage):
(1) Mortgagee may, with or without entry, personally or by its agents
or attorneys, insofar as applicable, sell the Mortgaged Property or any
part thereof and pursuant to the procedures provided by law, and all
estate, right, title, interest, claim and demand therein, and right of
redemption thereof, at one or more sales as an entity or in parcels, and at
such time and place upon such terms and after such notice thereof as may be
required or permitted by law; or
(2) Mortgagee may institute an action of mortgage foreclosure or
institute other proceedings according to law for the foreclosure hereof,
and may prosecute the same to judgment, execution and sale for the
collection of the Secured Obligations secured hereby, and all interest with
respect thereto, together with all taxes and insurance premiums advanced by
Mortgagee and other sums payable by Mortgagor hereunder, and all fees,
costs and expenses of such proceedings, including attorneys' fees and
expenses; or
(3) Mortgagee may, if default be made in the payment of any part of
the Secured Obligations, proceed with foreclosure of the liens evidenced
hereby in satisfaction of such item either through the courts or by
conducting the sale as herein provided, and proceed with foreclosure of the
security interest created hereby, all without declaring the whole of the
Secured
21
Obligations due, and provided that if sale of the Mortgaged Property, or
any portion thereof, is made because of default in payment of a part of the
Secured Obligations, such sale may be made subject to the unmatured part of
the Secured Obligations, but as to such unmatured part of the Secured
Obligations (and it is agreed that such sale, if so made, shall not in any
manner affect the unmatured part of the Secured Obligations) this Mortgage
shall remain in full force and effect just as though no sale had been made
under the provisions of this paragraph. And it is further agreed that
several sales may be made hereunder without exhausting the right of sale
for any unmatured part of the Secured Obligations, it being the purpose to
provide for a foreclosure and sale of the Mortgaged Property, or any part
thereof, for any matured portion of the Secured Obligations without
exhausting the power to foreclose and to sell the Mortgaged Property, or
any part thereof, for any other part of the Secured Obligations whether
matured at the time or subsequently maturing; or
(4) Mortgagee may take such steps to protect and enforce its rights
whether by action, suit or proceeding in equity or at law for the specific
performance of any covenant, condition or agreement in the Loan Documents
or in aid of the execution of any power herein granted, or for any
foreclosure hereunder, or for the enforcement of any other appropriate
legal or equitable remedy or otherwise as Mortgagee shall elect; or
(5) Mortgagee may exercise in respect of the Mortgaged Property
consisting of Fixtures, all of the rights and remedies available to a
secured party upon default under the applicable provisions of the Uniform
Commercial Code as then in effect in the state where the Mortgaged Property
is located; or
(6) Mortgagee may apply any proceeds or amounts held in escrow
pursuant to the terms of this Mortgage to payment of any part of the
Secured Obligations in such order of priority as Mortgagee may determine
consistent with the Agreement; or
(7) Any sale as aforesaid may be subject to such existing tenancies as
Mortgagee, in its sole discretion, may elect.
Section 2.03 Sale, Foreclosure, etc. (a) Mortgagee may adjourn from time to
time any sale by it to be made under or by virtue of this Mortgage by
announcement at 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.
22
(b) Upon the completion of any sale or sales made by Mortgagee under
or by virtue of this Article II, Mortgagee, or any 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 properties, interests and rights sold. Subject to the Prior Mortgage,
Mortgagee is hereby irrevocably appointed the true and lawful attorney of
Mortgagor, in its name and stead, to make all the necessary conveyances,
assignments, transfers and deliveries of any part 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. Nevertheless, Mortgagor, if so requested by Mortgagee, shall ratify and
confirm any such sale or sales by executing and delivering to Mortgagee or to
such purchaser or purchasers all such instruments as may be advisable, in the
reasonable judgment of Mortgagee, for the purpose and as may be designated in
such request.
(c) Upon any sale, whether under the power of sale hereby given or by
virtue of judicial proceedings, it shall not be necessary for Mortgagee, or any
public officer acting under execution or order of court, to have present or
constructive possession of any of the Mortgaged Property.
(d) The recitals contained in any conveyance made by Mortgagee to any
purchaser at any sale made pursuant hereto or under applicable law shall be full
evidence of the matters therein stated, and all prerequisites to such sale shall
be presumed to have been satisfied and performed.
(e) Any such sale or sales made under or by virtue of this Mortgage,
whether under the power of sale hereby granted and conferred, or under or by
virtue of any judicial proceedings, shall operate to divest all right, title,
interest, claim and demand whatsoever, either by law or in equity, of Mortgagor
in and to the premises and property sold, and shall be a perpetual bar, both at
law and in equity, against Mortgagor, its successors and assigns, and (subject
to the Prior Mortgage) against any and all persons or entities claiming the
premises and property sold, or any part thereof, from through or under Mortgagor
and its successors or assigns.
(f) The receipt given by Mortgagee for the purchase money paid at any
such sale, or the receipt given by any other person authorized to receive the
same, shall be sufficient discharge therefor to any purchaser of the property,
or any part thereof, sold as aforesaid, and no such purchaser, or his
representatives, grantees or assigns, after paying such purchase money and
receiving such receipt, shall be bound (i) to see to the application of such
purchase money or any part thereof upon or for any trust or purpose of this
Mortgage, (ii) by the misapplication
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or nonapplication of any such purchase money, or any part thereof, or (iii) to
inquire as to the authorization, necessity, expediency or regularity of any such
sale.
(g) In case the liens or security interests hereunder, or by the
exercise of any other right or power, shall be foreclosed by Mortgagee's sale or
by other judicial or non-judicial action, the purchaser at any such sale shall
receive, as an incident to its ownership, immediate possession of the property
purchased, and if Mortgagor or Mortgagor's successors shall hold possession of
said property, or any part thereof, subsequent to foreclosure, Mortgagor or
Mortgagor's successors shall be considered as tenants at sufferance of the
purchaser at foreclosure sale, and anyone occupying the property after demand
made for possession thereof shall be guilty of forcible detainer and shall be
subject to eviction and removal, forcible or otherwise, with or without process
of law, and all damages by reason thereof are hereby expressly waived.
(h) In the event a foreclosure hereunder shall be commenced by
Mortgagee, Mortgagee may at any time before the sale abandon the suit, and may
then institute suit for the collection of the Secured Obligations and for the
foreclosure of the liens and security interest hereof. If Mortgagee should
institute a suit for the collection of the Secured Obligations and for a
foreclosure of the liens and security interest hereof, it may at any time before
the entry of a final judgment in said suit dismiss the same and proceed to sell
the Mortgaged Property, or any part thereof, in accordance with provisions of
this Mortgage.
(i) Any reasonable expenses incurred by Mortgagee in prosecuting,
resetting or settling the claim of Mortgagee shall become an additional Secured
Obligation of Mortgagor hereunder.
(j) In the event of any sale made under or by virtue of this Article
II (whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale), the
entire principal of, and interest on, the Secured Obligations, if not previously
due and payable, and all other sums required to be paid by Mortgagor pursuant to
this Mortgage, immediately thereupon shall, anything in the Secured Obligations
or in this Mortgage to the contrary notwithstanding, become due and payable.
(k) The purchase money proceeds or avails of any sale made under or by
virtue of this Article II, together with any other sums which then may be held
by Mortgagee under this Mortgage, whether under the provisions of this Article
II or otherwise, shall be applied in accordance with the laws of the state where
the Mortgaged Property is located, and to the extent not inconsistent, first to
the payment of the costs and expenses of such sale, including reasonable
compensation to Mortgagee and its agents and counsel, second to the payment of
the amounts due and owing under or in respect of the Secured Obligations for
principal and interest and any other amounts including (without limitation) any
other sums required to be paid
24
by Mortgagor pursuant to any provision of this Mortgage or any other Loan
Document, with interest at the Default Rate from and after the happening of any
Event of Default in the order set forth in Section 7.2 of the Agreement, all
with interest at the Default Rate from the date such sums were or are required
to be paid under this Mortgage, and third to the payment of the surplus, if any,
to whomsoever may be lawfully entitled to receive the same.
(l) Upon any sale made under or by virtue of this Article II, whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Mortgagee and
any other Secured Party may bid for and acquire the Mortgaged Property or any
part thereof and Mortgagee and any other Secured Party in lieu of paying cash
therefor may make settlement for the purchase price by crediting some or all of
the indebtedness of Mortgagor secured by this Mortgage owing to such Secured
Party (or, in the case of Mortgagee, owing to all Secured Parties) the net sales
price after deducting therefrom the expenses of the sale and the costs of the
action and any other sums which Mortgagee is authorized to deduct under this
Mortgage.
Section 2.04 Payments, Judgment, etc. (a) In case an Event of Default under
the Agreement and the acceleration of the obligations thereunder shall have
occurred, then, Mortgagor will in accordance with the Agreement pay to Mortgagee
the whole amount which then shall have become due and payable on the Secured
Obligations, whether for principal and interest or both or otherwise, as the
case may be, which interest shall then accrue at the Default Rate on the then
unpaid principal of or other amounts constituting the Secured Obligations, and
the sums required to be paid by Mortgagor pursuant to any provision of this
Mortgage, and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including compensation to Mortgagee
its agents and counsel and any expenses incurred by Mortgagee hereunder. In the
event Mortgagor shall fail forthwith to pay such amounts upon demand, Mortgagee
shall be entitled and empowered to institute such action or proceedings at law
or in equity as may be advised by its counsel for the collection of the sums so
due and unpaid, and may prosecute any such action or proceedings to judgment or
final decree.
(b) Mortgagee shall be entitled to recover judgment as aforesaid
either before or after or during the pendency of any proceedings for the
enforcement of the provisions of this Mortgage and the right of Mortgagee to
recover such judgment shall not be affected by any entry or sale hereunder, or
by the exercise of any other right, power or remedy for the enforcement of the
provisions of this Mortgage or the foreclosure of the lien hereof; and in the
event of a sale of the Mortgaged Property or any part thereof and of the
application of the proceeds of sale, as provided in this Mortgage, to the
payment of the indebtedness hereby secured, Mortgagee shall be entitled to
enforce payment of, and to receive all amounts then remaining due and unpaid
upon, the Secured Obligations, and to enforce payment of all other charges,
payments and costs due under this Mortgage and shall be entitled to recover
judgment
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for any portion of the debt remaining unpaid, with interest thereon at the
Default Rate. In case of proceedings against Mortgagor in insolvency or
bankruptcy or any proceedings for its reorganization or involving the
liquidation of its assets, then Mortgagee shall be entitled to prove the whole
amount of principal and interest due upon the Secured Obligations to the full
amount thereof, and all other payments, charges and costs due under this
Mortgage without deducting therefrom any proceeds obtained from the sale of the
whole or any part of the Mortgaged Property.
(c) 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.
(d) Any moneys thus collected by Mortgagee under this Section 2.04
shall be applied by Mortgagee in accordance with the provisions of paragraph (k)
of Section 2.03.
Section 2.05 Receiver, Waiver. After the happening of any Event of Default
and immediately upon the commencement of any action, suit or other legal
proceedings by Mortgagee to obtain judgment for the principal of, or interest
on, and any other amounts constituting the Secured Obligations, including
(without limitation) all sums required to be paid by Mortgagor pursuant to any
provision of this Mortgage or of any nature in aid of the enforcement of the
Secured Obligations or of this Mortgage, Mortgagor will (a) waive the issuance
and service of process and submit to a voluntary appearance in such action, suit
or proceeding and (b) subject to the Prior Mortgage, if required by Mortgagee,
consent to the appointment of a receiver or receivers of the Mortgaged Property
or any part thereof and of all the earnings, revenues, rents, maintenance
payments, issues, profits and income thereof in accordance with Section 2.11
hereof. After the happening of any Event of Default and during its continuance,
or upon the commencement of any proceedings to foreclose this Mortgage or to
enforce the specific performance hereof or in aid thereof or upon the
commencement of any other judicial proceeding to enforce any right of Mortgagee,
subject to the Prior Mortgage, Mortgagee shall be entitled, as a matter of
right, if it shall so elect, without the giving of notice to any other party and
without regard to the adequacy or inadequacy of any security for the Mortgage
indebtedness, forthwith either before or after declaring the unpaid principal of
the Secured Obligations to be due and payable, to the appointment of such a
receiver or receivers.
Section 2.06 Mortgagee's Possession. Notwithstanding the appointment of any
receiver, liquidator or trustee of Mortgagor or of any of its property, or of
the Mortgaged Property or any part thereof, Mortgagee shall, subject to the
Prior Mortgage, be entitled to retain possession and control of the Mortgaged
Property.
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Section 2.07 Remedies Cumulative. No remedy herein conferred upon or
reserved to Mortgagee is intended to be exclusive of any other remedy or
remedies which Mortgagee may be entitled to exercise against Mortgagor and each
and every such remedy shall be cumulative, and shall be in addition to every
other remedy given hereunder or in the Agreement or in any other Loan Document
now or hereafter existing at law or in equity or by statute. No delay by or
omission of Mortgagee to exercise any right or power shall be construed to be a
waiver of any Event of Default or any acquiescence therein; and every power and
remedy given in this Mortgage or in the Agreement or in any other Loan Document
to Mortgagee may be exercised from time to time as often as may be deemed
expedient by Mortgagee. The resort to any remedy provided hereunder or in the
Agreement or in any other Loan Document or provided by law or at equity shall
not prevent the concurrent or subsequent employment of any other appropriate
remedy or remedies against Mortgagor. By the acceptance of payment of principal
of or interest on or any other amount due in respect of any of the Secured
Obligations after its due date, Mortgagee does not waive the right either to
require prompt payment when due of all other amounts secured hereby or to regard
as an Event of Default the failure to pay any other such amounts. Nothing in
this Mortgage or in the Agreement or in any instrument evidencing the Secured
Obligations shall affect the obligation of Mortgagor to pay (i) the principal
of, and interest on, the Secured Obligations in the manner and at the time and
place therein or in the Agreement expressed or (ii) the other Secured
Obligations in the manner and at the time herein expressed.
Section 2.08 Agreement by Mortgagor. Mortgagor will not at any time insist
upon, or plead, or in any manner whatever claim or take any benefit or advantage
of any stay or extension or moratorium law, any exemption from execution or sale
of the Mortgaged Property or any part thereof, wherever enacted, now or at any
time hereafter in force, which may affect the covenants and terms of performance
of this Mortgage or any other Loan Document, or claim, take or insist upon any
benefit or advantage of any law now or hereafter in force providing for the
valuation or appraisal of the Mortgaged Property, or any part thereof, prior to
any sale or sales thereof which may be made pursuant to any provision herein, or
pursuant to the decree, judgment or order of any court of competent
jurisdiction, or, after any such sale or sales, claim or exercise any right
under any statute heretofore or hereafter enacted to redeem the property so sold
or any part thereof; and Mortgagor hereby expressly waives all benefit or
advantage of any such law or laws and covenants not to hinder, delay or impede
the execution of any power herein granted or delegated to Mortgagee, but to
suffer and permit the execution of every power as though no such law or laws had
been made or enacted. Mortgagor, waives, to the extent that it lawfully may, all
right to have the Mortgaged Property or any part thereof marshaled upon any
foreclosure hereof.
Section 2.09 Use and Occupancy Payments. During the continuance of any
Event of Default and pending the exercise by Mortgagee of its right to exclude
Mortgagor from all or any part of the Premises, unless Mortgagor is legally
entitled to continue possession of the
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Premises, Mortgagor agrees to pay to Mortgagee the fair and reasonable rental
value, which amount shall be determined by the Mortgagee in its reasonable
judgment, for the use and occupancy of the Premises or any portion thereof which
are in its possession for such period and, upon default of any such payment,
will, subject to the Prior Mortgage, vacate and surrender possession of the
Premises to Mortgagee or to a receiver, if any, and in default thereof may be
evicted by any summary action or proceeding for the recovery of possession of
the Premises for non-payment of rent, however designated. Any payments received
under this Section 2.09 by Mortgagee shall be applied in accordance with Section
2.03(k) of this Mortgage.
Section 2.10 Mortgagee's Right to Purchase. In case of any sale under
the foregoing provisions of this Article II, whether made under the power of
sale hereby given or pursuant to judicial proceedings, Mortgagee may bid for and
purchase any property, and may make payment therefor as hereinafter set forth or
as set forth in Section 2.03 (l) above, and, upon compliance with the terms of
said sale, may hold, retain and dispose of such property without further
accountability therefor. For the purpose of making settlement or payment for the
property or properties purchased, Mortgagee shall be entitled to use and apply
such of the Secured Obligations held by it or the other Secured Parties,
including (without limitation) any accrued and unpaid interest thereon, as it
may elect, or as may be otherwise provided for in Section 2.03(l) above.
Section 2.11 Appointment of Receiver. Upon application of Mortgagee to any
court of competent jurisdiction, if any Event of Default shall have occurred and
so long as it shall be continuing, to the extent permitted by law, and subject
to the Prior Mortgage, a receiver may be appointed to take possession of and to
operate, maintain, develop and manage the Mortgaged Property or any part
thereof. In every case when a receiver of the whole or any part of the Mortgaged
Property shall be appointed under this Section 2.11 or otherwise, the net income
and profits of the Mortgaged Property shall, subject to the order of any court
of competent jurisdiction, and subject to the Prior Mortgage, be paid over to,
and shall be received by, Mortgagee to be applied as provided in Section 2.03(k)
hereof.
Section 2.12 No Waiver. Mortgagee may resort to any security given by this
Mortgage or to any other security now existing or hereafter given to secure the
payment of any of the Secured Obligations secured hereby, in whole or in part,
and in such portions and in such order as may seem best to Mortgagee in its
reasonable discretion, and any such action shall not in any way be considered as
a waiver of any of the rights, benefits, liens or security interest created by
this Mortgage.
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ARTICLE III
ASSIGNMENT OF LEASES AND RENTS
Section 3.01 Lease Related Definitions. As used in this Mortgage: (a)
"Lease" means any lease, sublease, or other similar agreement, now or hereafter
existing, under the terms of which any person other than Mortgagor has or
acquires any right to occupancy or use of the Mortgaged Property, or any part
thereof, or interest therein; (b) "Lessee" means the lessee, sublessee,
licensee, tenant or other person having the right to occupy or use all or any
part of the Mortgaged Property under a Lease; and (c) "Rent" means the rents,
additional rents and other consideration payable to Mortgagor by the Lessee
under the terms of a Lease. Whenever reference is made in this Mortgage to a
lease, license, lessee, licensee, tenancy or tenant, such reference shall be
deemed to include a sublease, sublessee, license, licensee, subtenancy or
subtenant, as the case may be.
Section 3.02 Assignment of Leases and Rents. Mortgagor hereby assigns to
Mortgagee all Leases, together with all Rents payable under the Leases, now or
at any time hereafter existing, such assignment being subject to the Prior
Mortgage and upon the following terms: (a) until receipt from Mortgagee of
notice of the occurrence of an Event of Default, each Lessee may pay rent
directly to Mortgagor, (b) upon receipt from Mortgagee of notice that an Event
of Default exists, each Lessee shall, and is hereby authorized and directed to,
pay directly to Mortgagee all Rent thereafter accruing, and the receipt of such
Rent by Mortgagee shall be a release of such Lessee to the extent of all amounts
so paid, (c) Rent so received by Mortgagee shall be applied by Mortgagee first
to the expenses, if any, of collection and then in accordance with Article II
hereof, (d) without impairing its rights hereunder, Mortgagee may, at its
option, at any time and from time to time, release to Mortgagor Rent so received
by Mortgagee, or any part thereof, (e) Mortgagee shall not be liable for its
failure to collect, or its failure to exercise diligence in the collection of,
Rent, but shall be accountable only for Rent that it shall actually receive. As
among Mortgagee, Mortgagor and any person claiming through or under Mortgagor,
the assignment contained in this Section 3.02 is intended to be absolute,
unconditional and presently effective, and the provisions of subsection 3.02(a)
are intended for the benefit of each Lessee and shall never inure to the benefit
of Mortgagor or any person claiming through or under Mortgagor. It shall never
be necessary for Mortgagee to institute legal proceedings of any kind whatsoever
to enforce the provisions of this Section 3.02. Notwithstanding anything herein
to the contrary, Mortgagor may collect such Rent until such time as an Event of
Default shall occur hereunder.
Section 3.03 Mortgagee's Consent. Nothing in this Article III shall ever be
construed as (a) allowing any Lease without Mortgagee's prior written consent
unless otherwise permitted under the Agreement, or (b) subordinating this
Mortgage to any Lease.
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Section 3.04 Lease Related Covenants. Mortgagor covenants to: (a) upon
demand by Mortgagee, and subject to the Prior Mortgage, assign to Mortgagee, by
separate instrument in form and substance satisfactory to Mortgagee, any and all
Leases, and/or all Rents payable thereunder, including, but not limited to, any
Lease which is now in existence or which may be executed after the date hereof;
(b) not accept from any Lessee, nor permit any Lessee to pay, Rent for more than
one month in advance except for payment in the nature of security for
performance of Lessee's obligations unless otherwise provided for in the Lease;
(c) comply with the terms and provisions of each Lease including, without
limitation, the payment of all sums required to be paid by Mortgagor or which
any Lessor has an option to pay under any Lease in order to prevent any
reduction in or offset against any Rent payable under any Lease or any default
thereunder; (d) not amend, extend, cancel, abridge, or otherwise modify, or
accept surrender of, or renew, any Lease without the written consent of
Mortgagee other than in the ordinary course of business, (e) not assign,
transfer or mortgage any Lease without the written consent of Mortgagee; (f) not
assign, transfer, pledge or mortgage any Rent; (g) not waive, excuse, release or
condone any nonperformance of any covenant of any Lease by any Lessee other than
in the ordinary course of business; (h) give to Mortgagee duplicate notice of
each material default by each Lessee; (i) on all Leases executed after the date
hereof, cause each Lessee to agree (and each Lessee under each Lease executed
after the date hereof does so agree) to give to Mortgagee written notice of each
and every material default by Mortgagor under its Lease and not exercise any
remedies under such Lease unless Mortgagee fails to cure such material default
within a reasonable period after Mortgagee has received such notice; provided,
that Mortgagee shall never have any obligation or duty to cure any such material
default; (j) enforce its rights with regard to all Leases in the ordinary course
of business; and (k) not enter into any Lease, affecting the Mortgaged Property
or any part thereof unless otherwise permitted under the Agreement and the Prior
Mortgage, without the prior approval of Mortgagee.
Section 3.05 Mortgagee Not Liable. Mortgagee shall not be obligated to
perform or discharge, nor does it hereby undertake to perform or discharge, any
obligation, duty or liability under any Lease, or under or by reason of this
assignment, and Mortgagor shall and does hereby agree to indemnify and to hold
Mortgagee harmless from and against any and all liability, loss or damage which
Mortgagee may or might incur under any Lease or under or by reason of this
assignment and from and against any and all claims and demands whatsoever which
may be asserted against Mortgagee by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements contained in any Lease. Should Mortgagee incur any such liability,
loss or damage under any Lease or under or by reason of this assignment, or in
the defense of any such claims or demands, the amount thereof, including all
costs, expenses and attorneys' fees, shall be secured hereby and constitute part
of the Secured Obligations, and Mortgagor shall reimburse Mortgagee therefore
immediately upon demand, and upon the failure of Mortgagor to do so, Mortgagee
may declare all sums secured by this Mortgage immediately due and payable.
30
Section 3.06 Estoppel Certificates. On all Leases executed after the
date hereof, all Leases shall provide for the giving by the Lessee of
certificates with respect to the status of such Leases, and Mortgagor shall
exercise its right to request such certificates within ten (10) days of any
demand therefor by Mortgagee. Mortgagor shall furnish to Mortgagee, within ten
(10) days after a request by Mortgagee to do so, an executed counterpart of all
Leases.
Section 3.07 Lease Approval Requirements. On all Leases executed after the
date hereof, all Leases and Lessees of the Premises, or any part thereof, must
be acceptable to and approved by Mortgagee unless otherwise provided under the
Agreement; and all Lessees shall execute such estoppel certificates,
subordinations, attornments and other agreements as Mortgagee may require. Under
no circumstances shall Mortgagee be liable for any obligation to pay any leasing
commission, brokerage fee or similar fee or charge in connection with any Lease
nor shall Mortgagee be obligated to complete any Improvements for the benefit of
any Lessee.
ARTICLE IV
MISCELLANEOUS
Section 4.01 Benefit of Mortgagee. All of the grants, covenants, terms,
provisions and conditions of this Mortgage shall run with the land and shall
apply to, bind and inure to the benefit of the successors and assigns of the
respective parties hereto; provided, that Mortgagor may not assign its
obligations hereunder without the prior written consent of Mortgagee.
Section 4.02 Savings Clause. In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall, at the option of Mortgagee, not affect any other provision of this
Mortgage but this Mortgage shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein.
Section 4.03 Notices. All notices hereunder shall be given pursuant to the
terms of Section 9.1 of the Agreement.
Section 4.04 Governing Law. This Mortgage shall, without regard to place of
contract or payment, be construed and enforced according to the laws of the
state where the Mortgaged Property is located, all without regard to principles
of conflict of laws.
Section 4.05 No Change. Neither this Mortgage nor any provision hereof may
be changed, waived, discharged or terminated, except by an instrument in
writing, signed by Mortgagee and Mortgagor.
31
Section 4.06 Security Agreement and Fixture Filing. This Mortgage shall be
deemed to be a security agreement and fixture filing pursuant to the Uniform
Commercial Code of the state where the Mortgaged Property is located.
Section 4.07 No Usury. In the event that Mortgagee, in enforcing its rights
hereunder, determines that charges and fees incurred in connection with the
Secured Obligations may, under the applicable usury laws, cause the interest
rate herein to exceed the maximum allowed by law, then such interest shall be
recalculated and any excess over the maximum interest permitted by said laws
shall be credited to the then principal outstanding balance to reduce said
balance by that amount. It is the intent of the parties hereto that Mortgagor
under no circumstances shall be required to pay, nor shall Mortgagee be entitled
to collect, any interest which is in excess of the maximum legal rate permitted
under the applicable usury laws.
Section 4.08 Effect of Partial Release. No release of any part of the
Mortgaged Property or of any other property conveyed to secure the Secured
Obligations shall in any way alter, vary or diminish the force, effect or lien
or security interest of this Mortgage on the Mortgaged Property or portion
thereof remaining subject to the lien and security interest created hereby.
Section 4.09 Mortgagee's Dealing with Successors and Lessees. Subject to
the Prior Mortgage, in the event Mortgagor or any of Mortgagor's successors
conveys or leases without the prior approval of Mortgagee (except as otherwise
permitted herein or in the Agreement or the Prior Mortgage) any interest in the
Mortgaged Property, or any part thereof, to any other party, Mortgagee may deal
with any owner or lessee of any part of the Mortgaged Property with reference to
this Mortgage and to the Secured Obligations, either by forbearance on the part
of Mortgagee or release of all or any part of the Mortgaged Property or of any
other property securing payment of any Secured Obligations, without in any way
modifying or affecting Mortgagee's rights, remedies, liens or security interests
hereunder (including the right to exercise any one or more of the remedies
described or referred to in Article I, Article II, Article III or Article IV
hereof in the event such conveyance is made in contravention of the provisions
of this Mortgage) or the liability of Mortgagor or any other party liable for
the payment of the Secured Obligations, in whole or in part. This shall not be
construed to allow any such conveyance or leasing by Mortgagor, except as
permitted herein or in the Agreement.
Section 4.10 No Waiver by Mortgagee. All options and rights of election
herein provided for the benefit of Mortgagee are continuing, and the failure to
exercise any such option or right or election upon a particular default or
breach or upon any subsequent default or breach shall not be construed as
waiving the right to exercise such option or election at any later date. By the
acceptance of payment of principal or interest after its due date, Mortgagee
does not waive the right either to require prompt payment when due of all other
amounts secured hereby or to regard as an Event of Default the failure to pay
any other such amounts. No exercise of
32
the rights and powers herein granted and no delay or omission in the exercise of
such rights and powers shall be held to exhaust the same or be construed as a
waiver thereof, and every such right and power may be exercised at any time and
from time to time. All grants, covenants, terms and conditions hereof shall bind
Mortgagor and all successive owners of the Premises.
Section 4.11 Headings Descriptive. The headings of the several sections and
subsections of this Mortgage are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Mortgage.
SECTION 4.12 WAIVER OF TRIAL BY JURY. THE MORTGAGOR AND THE MORTGAGEE WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF OR IN ANY WAY CONNECTED TO THIS MORTGAGE.
Section 4.13 Indemnification. The Mortgagor agrees to pay, and to save,
indemnify and keep the Mortgagee and its respective directors, officers,
employees, attorneys, experts, and agents harmless from, any and all
liabilities, costs and expenses (including, without limitation, legal fees and
expenses), losses or damages (i) with respect to, or resulting from, any delay
in paying, any and all excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Mortgaged Property, (ii)
with respect to, or resulting from, any delay in complying with any requirement
of law applicable to any of the Mortgaged Property or (iii) in connection with
any of the transactions contemplated by this Mortgage, including the fees and
disbursements of counsel and of any other experts, which Mortgagee or its
respective directors, officers, employees, attorneys, experts or agents may
incur in connection with (w) the administration or enforcement of this Mortgage,
including such expenses as are incurred to preserve the value of the Mortgaged
Property and the validity, perfection, rank and value of any liens granted
hereunder, (x) the collection, sale or other disposition of any of the Mortgaged
Property, (y) the exercise by the Mortgagee of any of the rights conferred upon
it hereunder or (z) any Default or Event of Default, but excluding any such
liabilities, costs and expenses, losses or damages incurred solely by reason of
the gross negligence or willful misconduct of the party seeking to be
indemnified as determined by a final order or judgment of a court of competent
jurisdiction.
Any amount due hereunder which is not paid on demand shall bear interest at
a rate equal to the Default Rate and shall be a lien upon the Mortgaged Property
and shall be secured hereby.
The agreements of the Mortgagor contained in this Section 4.13 shall
survive the payment and performance of the Secured Obligations and the
termination of the liens and security interests granted hereby. All of the
Mortgagor's obligations to indemnify Mortgagee and its directors, officers,
employees, attorneys, experts and agents hereunder shall (without
33
duplication) be in addition to, and shall not limit in any way, the Mortgagor's
indemnification obligations contained in the Agreement or in any other Loan
Document.
Section 4.14 Advances under the Agreement. It is understood and agreed that
the funds to be advanced under this Mortgage are to be advanced subject to and
in accordance with the provisions of the Agreement and the other Loan Documents,
and that all sums advanced thereunder or hereunder are included within the
Secured Obligations secured hereby.
Section 4.15 Particular State Provisions. There is attached hereto and made
a part hereof Exhibit B containing additional provisions that are necessary or
appropriate under the laws of the state in which the Mortgaged Property is
located or pursuant to the provisions of any permitted property liens.
ARTICLE V
CERTAIN PROVISIONS CONCERNING THE PRIOR MORTGAGE
Section 5.01 Payment on Prior Mortgage. Mortgagor will promptly pay, when
due and payable, the interest, principal, and all other sums and charges secured
by and described in the Prior Mortgage and the other UBS Loan Documents.
Section 5.02 Performance of UBS Loan Documents. Mortgagor will promptly
perform and observe all of the terms, covenants, and conditions required to be
performed and observed by Mortgagor under the UBS Loan Documents, within the
periods (inclusive of grace periods) provided in the UBS Loan Documents, and
will do all things necessary to avoid the occurrence of any default with respect
to the UBS Loan Documents.
Section 5.03 Default on UBS Loan Documents. Any Event of Default under the
UBS Loan Documents shall be an Event of Default under Article II of this
Mortgage.
Section 5.04 No Modifications. Mortgagor will not directly or indirectly,
amend, modify, supplement, waive compliance with, or assent to noncompliance
with, any term, provision or condition of the UBS Loan Agreement or any of the
other UBS Loan Documents as in effect on the Effective Date hereof (A) which the
Mortgagee or the Majority Revolving Lenders deem material (including, without
limitation, terms, provisions or conditions relating to events of default,
acceleration rights or other remedies, tenor, interest rates, substitution of
collateral, the non-recourse nature of such financing, covenants and
prohibitions against amending any of the Loan Documents) or (B) which the
Mortgagee reasonably determines would place any further material restrictions on
the Mortgagor or its Subsidiaries or materially increase the obligations of the
Mortgagor or any of its Subsidiaries thereunder or confer on the holders thereof
any material additional rights.
34
Section 5.05 Consent of Prior Mortgagee. Notwithstanding anything to the
contrary contained in this Mortgage, the rights of Mortgagee hereunder will be
limited in that, unless and until all of the obligations secured by the Prior
Mortgage have been indefeasibly paid in full, Mortgagee shall not, without
obtaining the prior written consent of the Prior Mortgagee, which consent may be
withheld in Prior Mortgagee's sole and absolute discretion (a) modify, amend,
supplement or extend the terms and provisions of Article V of this Mortgage, or
(b) commence an enforcement action or other remedial proceeding, or (c) exercise
any remedies provided for under this Mortgage at law or in equity with respect
to the Mortgaged Property (including, without limitation, the commencement of
foreclosure proceedings or the appointment of a receiver), or (d) seek to
enforce any judgment against the Mortgaged Property in a manner which is
prohibited under this Article V, or (e) otherwise use its position as a junior
lienor to take any actions with respect to the Mortgaged Property or to
interfere with or otherwise impede any actions that Prior Mortgagee may wish to
take with respect to the Mortgaged Property; provided, that notwithstanding the
provisions set forth in (a) through (e) above, Mortgagee may make protective
advances contemplated by this Mortgage, including without limitation, for past
due real estate taxes, insurance premiums, repair costs and other amounts which
could result in a lien or encumbrance upon the Mortgaged property and may join
in any enforcement action or other remedial proceeding that has been commenced
by or on behalf of the Prior Mortgagee to assure that Mortgagee's junior lien is
not extinguished, diminished or otherwise adversely affected; provided further
that the Prior Mortgagee consents to Mortgagee acting in Mortgagor's stead under
this Mortgage, subject to all the conditions and requirements hereunder and
under the UBS Loan Documents, if Mortgagor is in default with respect to its
obligations to Mortgagee (it being understood that Mortgagee shall not, by the
making of any protective advance, acquire by subrogation or otherwise any lien,
estate or interest in the Mortgaged Property which may be prior to the lien,
estate or interest of the Prior Mortgagee, but the amount of any such advances
shall be secured by the lien of this Mortgage).
Section 5.06 Subject to the UBS Loan Documents. Mortgagee acknowledges that
the terms, conditions, provisions and lien of this Mortgage, any Assignment of
Leases and Rents hereafter delivered to Mortgagee with respect to the Mortgaged
Property and any documents hereafter delivered pursuant to Sections 1.02 and
1.03 of this Mortgage and all of Mortgagee's rights under this Mortgage are
junior and subject to the terms, conditions, provisions and lien of the Prior
Mortgage and the other UBS Loan Documents and all of Prior Mortgagee's rights
thereunder. Mortgagee further acknowledges that if Mortgagor's compliance with
any of the terms, covenants, conditions or other provisions of this Mortgage
would be inconsistent with or cause a default under the UBS Loan Documents,
Mortgagor shall not be obligated to comply with such term, covenant or condition
or other provision contained in this Mortgage. Notwithstanding the foregoing,
nothing herein shall preclude the operation of any term, covenant, provision, or
condition of, or right of Mortgagee under, this Mortgage which is not
inconsistent with the terms, covenants, provisions and conditions of,
35
and rights of Prior Mortgagee under the Prior Mortgage and the other UBS Loan
Documents, and which would not cause a default under the UBS Loan Documents.
Section 5.07 Third Party Beneficiary. It is expressly intended and agreed
by the parties to this Mortgage that (a) the Prior Mortgagee is a third party
beneficiary of this Mortgage and is relying upon the terms and provisions of
this Article V, (b) the Prior Mortgage shall be recorded first, (c) the Prior
Mortgagee shall have the right, in addition to all other remedies, to
specifically enforce the provisions of this Article V and shall be entitled to
injunctive and other equitable relief in connection therewith and (d) Mortgagor
and Mortgagee expressly agree that the rights of the parties hereunder are the
same as they would be if the Mortgagee and the Prior Mortgagee had executed a
separate intercreditor agreement.
Section 5.08 Consent to Non-Disturbance Agreement. Mortgagee hereby agrees
to give a non-disturbance agreement to any lessee or tenant with respect to
which the Prior Mortgagee shall have executed a similar non-disturbance
agreement and, if the Mortgagee fails to give any such non-disturbance
agreement, the Mortgagee nevertheless agrees not to disturb the possession or
occupancy of any lessee or tenant of all or any portion of the Mortgaged
Property without the prior written consent of the Prior Mortgagee in each
instance.
Section 5.09 Release of Mortgaged Property. Subject to the terms and
provisions of Section 6.3(h) of the Agreement, in the event the Prior Mortgagee
releases all or any portion of the Mortgaged Property from the lien of the Prior
Mortgage, then Mortgagee hereby irrevocably appoints the Prior Mortgagee as its
attorney-in-fact (coupled with an interest) to execute and deliver, in the name,
and on behalf of Mortgagee, any and all documents necessary to release the
Mortgaged property ( or such portion thereof being released from the lien of the
Mortgage) from the lien of this Mortgage. Mortgagee hereby acknowledges that it
shall not be entitled to receive any payment in connection with the release of
the Mortgaged Property (or any portion thereof) from the lien of this Mortgage,
including, without limitation, the proceeds of any sale thereof, unless and
until the Prior Mortgagee is fully paid all sums due under the UBS Loan
Documents. The Mortgagor hereby agrees that it will provide the Mortgagee with
written notice as to the release of all or any portion of the Mortgaged Property
from the lien of the Prior Mortgage.
Section 5.10 Bankruptcy, Insolvency, etc. In the event of (a) any
insolvency, dissolution, winding up, liquidation, readjustment, composition,
reorganization or other similar proceedings relating to Mortgagor (whether
voluntary or involuntary, partial or complete, and whether in bankruptcy,
insolvency or receivership, or upon an assignment for the benefit of creditors,
or any other marshaling of the assets and liabilities of Mortgagor, or any sale
of all or substantially all of the Mortgaged Property, or otherwise ) or (b) any
receivership or other equivalent proceeding with respect to the Mortgaged
Property, the UBS
36
Loan shall first be indefeasibly paid in full before Mortgagee shall be entitled
to retain any payment or distribution received as proceeds of the Mortgaged
Property of any kind of character, whether in cash, property or securities.
Mortgagee hereby irrevocably authorizes and agrees that the Prior Mortgagee may,
at its sole discretion, in the name of Mortgagee, or otherwise, demand, xxx for,
collect, receive and give receipt for any and all payments or distributions of
any kind or character, whether in cash, property or securities, which are
proceeds of the Mortgaged Property to which Mortgagee would be entitled if the
Mortgage were not subject to the Prior Mortgage pursuant to the terms hereof.
Upon request, Mortgagee shall furnish to the Prior Mortgagee, as promptly as
practicable, all information in its possession relating to the Mortgaged
Property which the Prior Mortgagee considers reasonably necessary in connection
with any action by the Prior Mortgagee permitted under the foregoing provisions
of Section 5.10. Mortgagee will not initiate any proceedings to modify or lift
the stay provided for in SECTION 362(a) of Title 11 of the United States Code in
respect of the Mortgage or the Mortgaged Property. Notwithstanding anything to
the contrary contained herein, nothing contained in this Section 5.10 shall
preclude Mortgagee from asserting any claim in any such proceeding with respect
to all Secured Obligations secured hereby as it pertains to any property, cash
or securities of Borrower other than the Mortgaged Property.
Section 5.11 Other Payments. In the event that the Mortgagee receives any
payment or other distribution of any kind or character from the Mortgagor or
from any other source whatsoever as proceeds of the Mortgaged Property, which it
is not entitled to retain pursuant to this Article V, Mortgagee shall
immediately deliver the same to the Prior Mortgagee, in the form received,
together with any necessary endorsements, in each case for application pursuant
to the UBS Loan Documents, but until so received by the Prior Mortgagee, the
same shall be held in trust by Mortgagee as the property of the Prior Mortgagee.
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ARTICLE VI
RESTATEMENT OF POST-PETITION MORTGAGE LIENS
Section 6.01 Post-Petition Mortgage Liens. This Mortgage amends and
restates in their entirety the Post-Petition Mortgage Liens; provided that, to
the fullest extent permitted by law, (a) the priority of all liens, security
interests and other encumbrances evidenced hereby or arising hereunder shall
relate back to the date and time the Post-Petition Mortgage Liens were granted;
(b) nothing herein shall impair the creation, attachment, perfection or priority
of the Post-Petition Mortgage Liens; and (c) nothing herein shall constitute a
novation or discharge of the obligations secured by the Post-Petition Mortgage
Liens.
IN WITNESS WHEREOF, this Mortgage has been duly executed by Mortgagor and
Mortgagee as of the day and year first above written.
MORTGAGOR:
PAYLESS CASHWAYS, INC.
By:
--------------------------------
Name:
Title:
MORTGAGEE:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Coordinating and Collateral Agent
By:
--------------------------------
Name:
Title:
CONSENTED AND AGREED TO:
[UBS MORTGAGE FINANCE, INC.]
00
[XX LEASING & CAPITAL CORPORATION]
By:
----------------------------------
Name:
Title:
[NOTARY BLOCK -- PAYLESS]
[NOTARY BLOCK -- CIBC]
[NOTARY BLOCK - PRIOR MORTGAGEE]
39
EXHIBIT A
(DESCRIPTION OF LAND)
40
EXHIBIT B
(LOCAL LAW PROVISIONS)
