MORTGAGE
AND
SECURITY AGREEMENT
AND
FIXTURE FINANCING STATEMENT
THIS INDENTURE (hereinafter referred to as the "Mortgage"), made as of
September 8, 1999, between FIRST TEAM SPORTS, INC., a Minnesota corporation
(hereinafter collectively referred to as the "Mortgagor"), whose post office
address is 0000 Xxxx Xxxxxxxxx, Xxxxx, Xxxxxxxxx 00000, and Norwest Bank
Minnesota, National Association, a national banking association (hereinafter
referred to as the "Mortgagee"), whose post office address is Norwest Center,
Sixth and Marquette, Xxxxxxxxxxx, Xxxxxxxxx 00000.
THIS MORTGAGE SECURES, AMONG OTHER THINGS, A REVOLVING NOTE, PURSUANT
TO WHICH ADVANCES WILL BE MADE TO THE MORTGAGOR AND SUCH AMOUNTS MAY BE REPAID
AND REBORROWED.
WITNESSETH, that the Mortgagor in consideration of the debt hereinafter
described and the sum of One and 00/100 Dollars ($1.00) to the Mortgagor in hand
paid by the Mortgagee, the receipt whereof is hereby acknowledged, does hereby
MORTGAGE, GRANT, BARGAIN, SELL AND CONVEY unto the Mortgagee, its successors and
assigns, forever, AND GRANTS TO THE MORTGAGEE A MORTGAGE LIEN AND SECURITY
INTEREST IN the following properties (all of the following being hereafter
collectively referred to as the "Premises"):
A. REAL PROPERTY
All the tracts or parcels of real property lying and being in the
County of Anoka, State of Minnesota, all as more fully described in Exhibit "A"
attached hereto and made a part hereof, together with all the estates and rights
in and to the real property and in and to lands lying in streets, alleys and
roads adjoining the real property and all buildings, structures, improvements,
fixtures and annexations, access rights, easements, rights of way or use,
servitudes, licenses, tenements, hereditaments and appurtenances now or
hereafter belonging or pertaining to the real property and all proceeds derived
therefrom; and
B. IMPROVEMENTS, FIXTURES
All buildings, equipment, fixtures, improvements, building supplies and
materials and personal property now or hereafter attached to or necessary to the
use, operation or maintenance of the improvements on the Premises including, but
without being limited to, all machinery, fittings, fixtures, apparatus,
equipment or articles used to supply heating, gas, electricity, air
conditioning, water, light, waste disposal, power, refrigeration, ventilation,
and fire and sprinkler protection, as well as all elevators, escalators,
overhead cranes, hoists and assists, and the like, and all furnishings,
supplies, draperies, maintenance and repair equipment, floor coverings, screens,
storm windows, blinds, awnings, shrubbery and plants, stoves, ranges, ovens,
refrigerators, air conditioners, dishwashers, clothes dryers, washing machines,
disposals and compactors (it being understood that the enumeration of any
specific articles of property shall in no way be held to exclude any items of
property not specifically enumerated), as well as renewals, replacements,
proceeds, additions, accessories, increases, parts, fittings, insurance
payments, awards and substitutes thereof, together with all interest of the
Mortgagor in any such items hereafter acquired, all of which personal property
mentioned herein shall be deemed fixtures and accessory to the freehold and a
part of the realty and not severable in whole or in part without material injury
to the Premises, but excluding therefrom the trade fixtures, inventory,
equipment and removable personal property of any tenant of the Premises; and
C. RENTS, LEASES AND PROFITS
All rents, issues, income, revenue, receipts, fees, and profits now due
or which may hereafter become due under or by virtue of and together with all
right, title and interest of the Mortgagor in and to any lease, license,
sublease, contract or other kind of occupancy agreement, whether written or
verbal, for the use or occupancy of the Premises or any part thereof; and
D. JUDGMENTS, CONDEMNATION AWARDS
AND INSURANCE PROCEEDS
All awards, compensation or settlement proceeds made by any
governmental or other lawful authorities for the threatened or actual taking or
damaging by eminent domain of the whole or any part of the Premises, including
any awards for a temporary taking, change of grade of streets or taking of
access, together with all insurance proceeds resulting from a casualty to any
portion of the Premises; and
E. LICENSES, PERMITS, EQUIPMENT LEASES
AND SERVICE AGREEMENTS
All right, title and interest of the Mortgagor in and to any licenses,
permits regulatory approvals, government authorizations, franchise agreements
and equipment or chattel leases, service contracts or agreements and all
proceeds therefrom, arising from, issued in connection with or in any way
related to the use, occupancy, operation, maintenance or security of the
Premises, together with all replacements, additions, substitutions and renewals
thereof, which may be assigned pursuant to agreement or law; and
F. ACCOUNTS RECEIVABLE AND GENERAL INTANGIBLES
All accounts receivable, chattel paper, general intangibles,
instruments, and all proceeds therefrom, whether cash or noncash, derived by the
Mortgagor from the use, occupancy or operation of the Premises, including,
without limitation, all third party payments, but excepting the proceeds of any
borrowed funds, and reserving to the Mortgagor a license to collect the same
unless and until an Event of Default occurs under this Mortgage.
AND THE MORTGAGOR for the Mortgagor, the Mortgagor's heirs,
administrators, personal representatives, successors and assigns, covenant with
the Mortgagee, its successors and assigns, that the Mortgagor is lawfully seized
of the Premises and has good right to sell and convey the same; that the
Premises are free from all encumbrances except as may be set forth in Exhibit
"B" attached hereto and made a part hereof (hereinafter referred to as the
"Permitted Encumbrances"); that the Mortgagee, its successors and assigns, shall
quietly enjoy and possess the Premises; and that the Mortgagor will WARRANT AND
DEFEND the title to the same against all lawful claims not specifically excepted
in this Mortgage.
TO HAVE AND TO HOLD THE SAME, together with the possession and right of
possession of the Premises, unto the Mortgagee, its successors and assigns,
forever.
PROVIDED NEVERTHELESS, that if the Mortgagor, the Mortgagor's heirs,
administrators, personal representatives, successors or assigns, shall pay to
the Mortgagee, its successors or assigns, the sum of Six Million Dollars
($6,000,000), according to the terms of that certain Term Note dated of even
date herewith in the principal amount of Four Million Five Hundred Thousand
Dollars ($4,500,000) and that certain Revolving Note dated of even date herewith
in the principal amount of One Million Five Hundred Thousand Dollars
($1,500,000) (hereinafter collectively referred to herein as the "Note"), the
terms and conditions of which are incorporated herein by reference and made a
part hereof, together with any extensions or renewals thereof, due and payable
with interest thereon at the variable rate set forth therein, executed by the
Mortgagor and payable to the Mortgagee, the balance of said principal sum
together with interest thereon being due and payable in any event on September
30, 2002, and shall repay to the Mortgagee, its successors or assigns, at the
times demanded and with interest thereon at the same rate as specified in the
Note, all sums advanced in protecting the lien of this Mortgage, including
taxes, assessments, charges, claims, fines, impositions, insurance premiums,
amounts due upon prior or superior mortgages and other prior or superior liens,
encumbrances and interests, and legal expenses and attorney's fees and all sums
advanced for any other purpose authorized herein (the Note and all such sums,
together with interest thereon, being hereinafter collectively referred to as
the "Indebtedness Secured Hereby"), and shall keep and perform all of the
covenants and agreements herein contained, then this Mortgage shall become null
and void, and shall be released at the Mortgagor's expense.
AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS:
1.
1. GENERAL REPRESENTATIONS AND WARRANTIES
1.1 REPRESENTATIONS AND WARRANTIES. The Mortgagor represents and
warrants as follows:
The Mortgagor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota, is duly qualified to do
business in the State of Minnesota and has all requisite power and authority to
own and operate the Premises, to enter into the Note, this Mortgage, the Credit
and Security Agreement dated of even date herewith (together with all
amendments, supplements and restatements, the "Credit Agreement"), and any other
document securing the Note and to borrow the monies and otherwise assume and
perform as contemplated thereunder, and is in compliance with all laws,
regulations, ordinances and orders of public authorities applicable to it.
Neither the borrowing of the monies nor the execution, delivery of the
Note, this Mortgage, the Credit Agreement, or any other document securing the
Note nor the performance or the provisions of the agreements therein contained
on the part of the Mortgagor will contravene, violate or constitute a default
under the Articles of Incorporation or By-Laws of the Mortgagor, or any
agreement with the shareholders of the Mortgagor, or any creditors of the
Mortgagor, or any law, ordinance, governmental regulation, agreement or
indenture to which the Mortgagor is a party or by which the Mortgagor or the
Mortgagor's properties are bound.
There are no (i) bankruptcy proceedings involving the Mortgagor; (ii)
dissolution proceedings involving the Mortgagor; (iii) unsatisfied judgments of
record against the Mortgagor; or (iv) tax liens filed against the Mortgagor.
The Note, this Mortgage, the Credit Agreement and all other
documentation executed in connection with the loan evidenced by the Note have
been duly executed and delivered by the Mortgagor and constitute the legal,
valid and binding obligations of the Mortgagor, enforceable in accordance with
their terms, except as to enforcement of remedies, as may be limited by
bankruptcy, insolvency or similar laws affecting generally the enforcement of
creditor's remedies.
There are no judgments, suits, actions or proceedings at law or in
equity or by or before any governmental instrumentality or agency now pending
against or, to the best of Mortgagor's knowledge, threatened against the
Mortgagor or its properties, or both, nor has any judgment, decree or order been
issued against the Mortgagor or its properties, or both, which would have a
material adverse effect on the Premises or the financial condition of the
Mortgagor or Mortgagor's properties.
No consent or approval of any regulatory authority having jurisdiction
over Mortgagor is necessary or required by law as a prerequisite to the
execution, delivery and performance of the terms of the Note, this Mortgage, the
Credit Agreement or any other document securing the Note.
The Premises is free from any mechanics' or materialmen's liens or
claims. There has been no labor or materials furnished to the Premises that has
not been paid for in full.
The Mortgagor has no notice, information or knowledge of any change
contemplated in any applicable law, ordinance, regulation or restriction, or any
judicial, administrative, governmental or quasi-governmental action, or any
action by adjacent land owners, or natural or artificial condition existing upon
the Premises which would limit, restrict, or prevent the contemplated or
intended use and purpose of the Premises.
There is no pending condemnation or similar proceeding affecting the
Premises, or any portion thereof nor, to the best knowledge of the Mortgagor, is
any such action being presently contemplated.
No part of the Premises is being used for agricultural purposes.
The Premises is undamaged by fire, windstorm or other casualty.
The Mortgagor is not, as of the date hereof, in default in the payment
of any of the Mortgagor's obligations.
The Premises complies with all zoning ordinances, energy and
environmental codes, building and use restrictions and codes, and any
requirements with respect to licenses, permits and agreements necessary for the
lawful use and operation of the Premises.
The heating, electrical, sanitary sewer plumbing, storm sewer plumbing,
potable water plumbing and other building equipment, fixtures and fittings are
in good condition and working order, are adequate in quantity and quality for
normal and usual use, and are fit for the purposes intended and the use
contemplated.
1.2 CONTINUING OBLIGATION. All statements made hereunder are true and
correct and all information provided to Mortgagee by the Mortgagor relating to
this transaction has not and does not contain any statement which, at the time
and in the light of the circumstances under which it was made, would be false
and misleading with respect to any material fact, or would omit any material
fact necessary in order to make any such statement contained therein not false
or misleading in any material respect. Should the Mortgagor subsequently obtain
knowledge that such representation was or is untrue, the Mortgagor shall
immediately notify Mortgagee as to the untrue nature of said representation and
agree to take such action as may be necessary to cause such representation to
become true.
2. COVENANTS AND AGREEMENTS
2.1 PAYMENT OF INDEBTEDNESS: OBSERVANCE OF COVENANTS. The Mortgagor
will duly and punctually pay each and every installment of principal and
interest on the Note and all other Indebtedness Secured Hereby, as and when the
same shall become due, and shall duly and punctually perform and observe all of
the covenants, agreements and provisions contained herein, in the Note and any
other instrument given as security for the payment of the Note.
2.2 MAINTENANCE: REPAIRS. The Mortgagor agrees that it will keep and
maintain the Premises in good condition, repair and operating condition free
from any waste or misuse, and will comply with all requirements of law,
municipal ordinances and regulations, restrictions and covenants affecting the
Premises and their use, and will promptly repair or restore any buildings,
improvements or structures now or hereafter on the Premises which may become
damaged or destroyed to their condition prior to any such damage or destruction
subject to the provisions of Article 5 hereof. The Mortgagor further agrees that
without the prior written consent of the Mortgagee it will not expand any
improvements on the Premises, erect any new improvements or make any material
alterations in any improvements which will alter the basic structure, adversely
affect the market value or change the existing architectural character of the
Premises, and will complete within a reasonable time any buildings now or at any
time in the process of erection on the Premises. The Mortgagor agrees not to
acquiesce in any rezoning classification, modification or restriction affecting
the Premises without the written consent of the Mortgagee. The Mortgagor agrees
that it will not abandon or vacate the Premises. The Mortgagor agrees that it
will provide, improve, grade, surface and thereafter maintain, clean, repair and
adequately light all parking areas within the Premises, together with any
sidewalks, aisles, streets, driveways and sidewalk cuts and sufficient paved
areas for ingress and right-of-way to and from the adjacent public thoroughfare
necessary or desirable for the use thereof.
2.3 PAYMENT OF OPERATING COSTS; LIENS; AND PRIOR INDEBTEDNESS. The
Mortgagor agrees that it will pay all operating costs and expenses of the
Premises; keep the Premises free from mechanics' liens, materialmen's liens,
judgment liens and other liens, executions, attachments or levies (hereinafter
collectively referred to as "Liens"); and will pay when due all permitted
indebtedness which may be secured by mortgage, lien or charge on the Premises
and upon request will exhibit to the Mortgagee satisfactory evidence of such
payment and discharge.
2.4 PAYMENT OF IMPOSITIONS. The Mortgagor will pay when due and before
any penalty all taxes, installments of assessments, water charges, sewer charges
and other fees, taxes, charges and assessments of every kind and nature
whatsoever assessed or charged against or constituting a lien on the Premises or
any interest therein or the Indebtedness Secured Hereby (hereinafter referred to
as the "Impositions"); and will upon demand furnish to the Mortgagee proof of
the payment of any such Impositions. In the event of a court decree or an
enactment after the date hereof by any legislative authority of any law imposing
upon a mortgagee the payment of the whole or any part of the Impositions herein
required to be paid by the Mortgagor, or changing in any way the laws relating
to the taxation of mortgages or debts secured by mortgages or a mortgagee's
interest in mortgaged premises, so as to impose such Imposition on the Mortgagee
or on the interest of the Mortgagee in the Premises, then, in any such event,
the Mortgagor shall bear and pay the full amount of such Imposition, provided
that if for any reason payment by the Mortgagor of any such Imposition would be
unlawful, or if the payment thereof would constitute usury or render the
Indebtedness Secured Hereby wholly or partially usurious, the Mortgagee, at its
option, may declare the whole sum secured by this Mortgage with interest thereon
to be immediately due and payable, without prepayment premium, or the Mortgagee,
at its option, may pay that amount or portion of such Imposition as renders the
Indebtedness Secured Hereby unlawful or usurious, in which event the Mortgagor
shall concurrently therewith pay the remaining lawful and non-usurious portion
or balance of said Imposition.
2.5 CONTEST OF LIENS AND IMPOSITIONS. The Mortgagor shall not be
required to pay, discharge or remove any Liens or Impositions so long as the
Mortgagor shall in good faith contest the same or the validity thereof by
appropriate legal proceedings which shall operate to prevent the collection of
the Liens or Impositions so contested and the sale of the Premises, or any part
thereof to satisfy the same, provided that the Mortgagor shall, prior to any
such contest, have given such security as may be demanded by the Mortgagee to
insure such payments and prevent any sale or forfeiture of the Premises by
reason of such nonpayment. Any such contest shall be prosecuted with due
diligence and the Mortgagor shall promptly after final determination thereof pay
the amount of any such Liens or Impositions so determined, together with all
interest and penalties, which may be payable in connection therewith.
Notwithstanding the provisions of this Section, the Mortgagor shall (and if the
Mortgagor shall fail so to do, the Mortgagee, may but shall not be required to)
pay any such Liens or Impositions notwithstanding such contest if in the
reasonable opinion of the Mortgagee, the Premises shall be in jeopardy or in
danger of being forfeited or foreclosed.
2.6 PROTECTION OF SECURITY. The Mortgagor agrees to promptly notify the
Mortgagee of and appear in and defend any suit, action or proceeding that
affects the value of the Premises, the Indebtedness Secured Hereby or the rights
or interest of the Mortgagee hereunder. The Mortgagee may elect to appear in or
defend any such action or proceeding and the Mortgagor agrees to indemnify and
reimburse the Mortgagee from any and all loss, damage, expense or cost arising
out of or incurred in connection with any such suit, action or proceeding,
including costs of evidence of title and reasonable attorney's fees.
2.7 REPORTING REQUIREMENTS. During the term of this Mortgage, the
Mortgagor will deliver, or cause to be delivered, to the Mortgagee all
information and reports required pursuant to section 6.1 of the Credit
Agreement.
2.8 ADDITIONAL ASSURANCES. The Mortgagor agrees upon reasonable request
by the Mortgagee to execute and deliver such further instruments, financing
statements under the Uniform Commercial Code and assurances and will do such
further acts as may be necessary or proper to carry out more effectively the
purposes of this Mortgage and, without limiting the foregoing, to make subject
to the lien hereof any property agreed to be subjected hereto or covered by the
granting clause hereof, or intended so to be. The Mortgagor agrees to pay any
recording fees, filing fees, stamp taxes or other charges arising out of or
incident to the filing, the issuance and delivery of the Note, the filing or
recording of the Mortgage or the delivery of such further assurances and
instruments as may be required pursuant to the terms of this Section.
2.9 DUE ON SALE OR MORTGAGING, ETC. In the event:
(a) the Mortgagor sells, conveys, transfers, further mortgages,
changes the form of ownership or encumbers or disposes of the
Premises, or any part thereof, or any interest therein; or
(b) any corporate ownership interest in the Mortgagor is sold,
conveyed, transferred, pledged or encumbered, whether
voluntarily or involuntarily, or there is an agreement so to do
(except as disclosed in the Credit Agreement);
without the written consent of the Mortgagee being first obtained, then
at the sole option of the Mortgagee, the Mortgagee may declare the entire
principal and interest evidenced by the Note due and payable in full and call
for payment of the same at once, together with the prepayment premium then in
effect under the terms of the Note.
2.10 UPDATED APPRAISALS. Mortgagor agrees that upon request of
Mortgagee, it shall pay the costs of any updated appraisal of the Premises in
form and content acceptable to Mortgagee at any time that either (a) an Event of
Default shall have occurred hereunder, or (b) Mortgagee determines in its
commercially reasonable judgment that the security for the loan evidenced by the
Note has been physically or financially impaired in any material manner.
3. INSURANCE
3.1 INSURANCE. The Mortgagor shall obtain and keep in full force and
effect during the term of this Mortgage at its sole cost and expense the
following insurance:
(a) insurance against loss by fire, lightning and risk customarily
covered by standard extended coverage endorsement, including the
cost of debris removal, together with a vandalism and malicious
mischief endorsement, or all perils endorsements, all in the
amount of not less than the full replacement cost of the
improvements on the Premises, and together with an
inflation-guard endorsement, an agreed-amount endorsement, a
replacement cost endorsement and a waiver of subrogation
endorsement;
(b) Broad Form Boiler and Machinery Insurance on all equipment and
pressure-fired vehicles or apparatus situate on the Premises,
and providing for full repair and replacement cost coverage;
(c) Flood Insurance in such minimal amounts and with such minimal
limits as the Mortgagee may require unless evidence is provided
that the Premises are not within a flood plain as defined by the
Federal Insurance Administration and the Premises is not
designated as being within a flood plain during the term of this
Mortgage;
(d) Comprehensive General Public Liability Insurance covering the
legal liability of the Mortgagor against claims for bodily
injury, death or property damage occurring on, in or about the
Premises in such minimal amounts and with such minimal limits as
the Mortgagee may require;
(e) Sprinkler Insurance, if applicable;
(f) Contingent Liability Insurance and Worker's Compensation
Insurance during the making of any alterations or improvements
to the Premises; and
(g) Such other forms of insurance as the Mortgagee may require or
as may be required by law.
Such insurance policies shall be written on forms and with insurance
companies having a minimum noncontingent rating in Best's Casualty Reports of A,
shall be satisfactory to the Mortgagee, shall name as the insured parties the
Mortgagor and the Mortgagee, as their interests may appear, shall be in amounts
sufficient to prevent the Mortgagor from becoming a co-insurer of any loss
thereunder, and shall bear a satisfactory mortgagee clause in favor of the
Mortgagee with loss proceeds under any such policies to be made payable to the
Mortgagee. All required policies of insurance or acceptable certificates
thereof, together with evidence of the payment of current premiums therefor,
shall be delivered to the Mortgagee and shall provide that the Mortgagee shall
receive at least sixty (60) days' advance written notice prior to cancellation,
amendment or termination of any such policy of insurance. The Mortgagor shall,
within sixty (60) days prior to the expiration of any such policy, deliver other
original policies or certificates of the insurer evidencing the renewal of such
insurance together with evidence of the payment of current premiums therefor.
The Mortgagor shall at its expense furnish evidence of the replacement value of
the improvements on the Premises in form satisfactory to the Mortgagee on
renewal of insurance policies or upon request of the Mortgagee. Insurance
coverage must at all times be maintained in proper relationship to such
replacement value and must always provide for agreed amount coverage. In the
event of a foreclosure of this Mortgage or any acquisition of the Premises by
the Mortgagee, all such policies and any proceeds payable therefrom, whether
payable before or after a foreclosure sale, or during the period of redemption,
if any, shall become the absolute property of the Mortgagee to be utilized at
its discretion. In the event of foreclosure or the failure to obtain and keep
any required insurance, the Mortgagor empowers the Mortgagee to effect insurance
upon the Premises at the Mortgagor's expense and for the benefit of the
Mortgagee in the amounts and types aforesaid for a period of time covering the
time of redemption prior to foreclosure sale, and if necessary therefor, to
cancel any or all existing insurance policies. The Mortgagor agrees to furnish
the Mortgagee copies of all inspection reports and insurance recommendations
received by the Mortgagor from any insurer. The Mortgagee makes no
representations that the above insurance requirements are adequate protection
for a prudent mortgagor.
4. UNIFORM COMMERCIAL CODE
4.1 SECURITY AGREEMENT. This Mortgage shall constitute a security
agreement as defined in the Uniform Commercial Code (hereinafter referred to as
the "Code"), and the Mortgagor hereby grants to the Mortgagee a security
interest within the meaning of the Code in favor of the Mortgagee on the
Improvements, Fixtures, Equipment and Personal Property, the Rents, Leases and
Profits, the Judgments, Condemnation Awards and Insurance Proceeds, the
Licenses, Permits, Equipment Leases and Service Agreements, and the Accounts
Receivable and General Intangibles described in Granting Clauses B, C, D, E and
F of this Mortgage (hereinafter referred to as the "Collateral").
4.2 FIXTURE FILING. As to those items of Collateral described in this
Mortgage that are, or are to become fixtures related to the real estate
mortgaged herein, it is intended as to those items that THIS MORTGAGE SHALL BE
EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING from the date of
its filing in the real estate records of the County where the Premises are
situate. The name of the record owner of said real estate is the Mortgagor set
forth in page one to this Mortgage. Information concerning the security interest
created by this instrument may be obtained from the Mortgagee, as secured party,
at its address as set forth in page one of this Mortgage. The address of the
Mortgagor, as debtor, is as set forth in page one to this Mortgage. This
document covers goods which are or are to become fixtures. The Federal tax
identification number of the Mortgagor is 00-0000000.
4.3 REPRESENTATIONS AND AGREEMENTS. (a) The Mortgagor is and will be
the true and lawful owner of the Collateral, subject to no liens, charges,
security interest and encumbrances other than the lien hereof and the Permitted
Encumbrances; (b) the Collateral is to be used by the Mortgagor solely for
business purposes being installed upon the Premises for the Mortgagor's own use
or as the equipment and furnishings leased or furnished by the Mortgagor, as
landlord, to tenants of the Premises; (c) the Collateral will not be removed
from the Premises without the consent of the Mortgagee except in accordance with
Section 4.4 hereof; (d) unless stated otherwise in this Mortgage the only
persons having any interest in the Collateral are the Mortgagor and the
Mortgagee and no financing statement covering any such property and any proceeds
thereof is on file in any public office except pursuant hereto; (e) the remedies
of the Mortgagee hereunder are cumulative and separate, and the exercise of any
one or more of the remedies provided for herein or under the Uniform Commercial
Code shall not be construed as a waiver of any of the other rights of the
Mortgagee including having such Collateral deemed part of the realty upon any
foreclosure thereof; (f) if notice to any party of the intended disposition of
the Collateral is required by law in a particular instance, such notice shall be
deemed commercially reasonable if given at least ten (10) days prior to such
intended disposition and may be given by advertisement in a newspaper accepted
for legal publications either separately or as part of a notice given to
foreclose the real property or may be given by private notice if such parties
are known to the Mortgagee; (g) the Mortgagor will from time to time provide the
Mortgagee on request with itemizations of all such Collateral on the Premises;
(h) the filing of a financing statement pursuant to the Code shall never impair
the stated intention of this Mortgage that all Improvements, Fixtures, Equipment
and Personal Property described in Granting Clause B hereof are, and at all
times and for all purposes and in all proceedings both legal or equitable shall
be regarded as part of the real property mortgaged hereunder irrespective of
whether such item is physically attached to the real property or any such item
is referred to or reflected in a financing statement; (i) the Mortgagor will on
demand deliver all financing statements that may from time to time be required
by the Mortgagee to establish and perfect the priority of the Mortgagee's
security interest in such Collateral; (j) the Mortgagor shall give advance
written notice of any proposed change in the Mortgagor's name, identity, address
or structure and will execute and deliver to the Mortgagee prior to or
concurrently with such change all additional financing statements that the
Mortgagee may require to establish and perfect the priority of the Mortgagee's
security interest; and (k) the Mortgagor shall renew and pay all expenses of
renewing the financing statement covering the Collateral in the event the
security interest in such Collateral will expire by reason of statutory law
prior to the end of the term of this Mortgage.
4.4 MAINTENANCE OF PROPERTY. Subject to the provisions of this Section,
in any instance where the Mortgagor in its discretion determines that any item
subject to a security interest under this Mortgage has become inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary for the operation of
the Premises, the Mortgagor may, at its expense, remove and dispose of it and
substitute and install other items not necessarily having the same function,
provided, that such removal and substitution shall not impair the operating
utility and unity of the Premises. All substituted items shall become a part of
the Premises and subject to the lien of the Mortgage. Any amounts received or
allowed the Mortgagor upon the sale or other disposition of the removed items of
property shall be applied only against the cost of acquisition and installation
of the substituted items. Nothing herein contained shall be construed to prevent
any tenant or subtenant from removing from the Premises trade fixtures,
furniture and equipment installed by it and removable by tenant under its terms
of the lease, on the condition, however, that the tenant or subtenant shall at
its own cost and expense, repair any and all damages to the Premises resulting
from or caused by the removal thereof.
5. APPLICATION OF INSURANCE AND AWARDS
5.1 DAMAGE OR DESTRUCTION OF THE PREMISES. The Mortgagor will give the
Mortgagee prompt notice of any damage to or destruction of the Premises, and in
case of loss covered by policies of insurance, the Mortgagee (whether before or
after foreclosure sale) is hereby authorized at its option to settle and adjust
any claim arising out of such policies and collect and receipt for the proceeds
payable therefrom, provided, that the Mortgagor may itself adjust and collect
for any losses arising out of a single occurrence aggregating not in excess of
Twenty-Five Thousand Dollars ($25,000). Any expense incurred by the Mortgagee in
the adjustment and collection of insurance proceeds (including the cost of any
independent appraisal of the loss or damage on behalf of the Mortgagee) shall be
reimbursed to the Mortgagee first out of any proceeds. Except as provided in
Section 5.3 hereof, the proceeds or any part thereof shall be applied to
reduction of the Indebtedness Secured Hereby then most remotely to be paid,
whether due or not, without the application of any prepayment premium, or to the
restoration or repair of the Premises, the choice of application to be solely at
the discretion of the Mortgagee.
5.2 CONDEMNATION. The Mortgagor will give the Mortgagee prompt notice
of any action, actual or threatened, in condemnation or eminent domain and
hereby assigns, transfers and sets over to the Mortgagee the entire proceeds of
any award or claim for damages for all or any part of the Premises taken or
damaged under the power of eminent domain or condemnation, the Mortgagee being
hereby authorized to intervene in any such action and to collect and receive
from the condemning authorities and give proper receipts and acquittances for
such proceeds. The Mortgagor will not enter into any agreements with the
condemning authority permitting or consenting to the taking of the Premises
unless prior written consent of the Mortgagee is obtained. Any expenses incurred
by the Mortgagee in intervening in such action or collecting such proceeds
(including the cost of any independent appraisal) shall be reimbursed to the
Mortgagee first out of the proceeds. Except as provided in Section 5.3 hereof,
the proceeds or any part thereof shall be applied upon or in reduction of the
Indebtedness Secured Hereby then most remotely to be paid, whether due or not,
together with any applicable prepayment premium, or to the restoration or repair
of the Premises, the choice of application to be solely at the discretion of the
Mortgagee.
5.3 THE MORTGAGEE TO MAKE PROCEEDS AVAILABLE UNDER CERTAIN CONDITIONS.
Notwithstanding the provisions of Section 5.1 and 5.2 above, in the event of any
damage to the improvements on the Premises as a result of an insured casualty or
taking, the Mortgagee agrees to make the proceeds of any insurance or
condemnation award available to the restoration or repair of the improvements on
the Premises in accordance with the provisions of Section 5.4 hereof provided:
(a) the improvements can be rebuilt substantially to the same as those
originally financed and can with restoration and repair continue to be operated
for the purposes utilized prior to such damage or taking; (b) no Event of
Default shall exist under this Mortgage, the Note, or other documents securing
the Note; (c) the appraised value of the Premises after such restoration or
repair shall not have been reduced from its appraised value as of the date
hereof and (d) such restoration or repair shall be completed prior to the
maturity of the Notes and this Mortgage.
5.4 DISBURSEMENT OF INSURANCE AND CONDEMNATION PROCEEDS. Should any
insurance or condemnation proceeds be applied to the restoration or repair of
the Premises in accordance with this Article 5, the restoration or repair shall
be done under the supervision of an architect acceptable to the Mortgagee and
pursuant to site and building plans and specifications approved by the
Mortgagee. The proceeds shall be held by the Mortgagee for such purposes and
will from time to time be disbursed by the Mortgagee to defray the costs of such
restoration or repair under such safeguards and controls as the Mortgagee may
require and in accordance with standard construction loan procedures. Prior to
the payment or application of insurance proceeds or a condemnation or eminent
domain award to the repair or restoration of the improvements upon the Premises,
the Mortgagee shall be entitled to receive the following:
Evidence that no Event of Default exists under any of the terms,
covenants and conditions of this Mortgage, the Note, or other collateral
security documents.
Evidence that all leasing requirements for the Premises as established
by the Mortgagee have been met.
Reasonably satisfactory proof that such improvements have been fully
restored, or that the expenditure of money as may be received from such
insurance proceeds or eminent domain award will be sufficient to repair, restore
or rebuild the Premises, free and clear of all liens, except the lien of this
Mortgage. In the event such insurance proceeds or eminent domain award shall be
insufficient to repair, restore or rebuild the said improvements, the Mortgagor
or its lessee shall deposit with the Mortgagee funds equaling such deficiency,
which, together with the insurance proceeds or eminent domain award, shall be
sufficient to restore, repair and rebuild the Premises.
A statement of the Mortgagor's architect, certifying the extent of the
repair and restoration completed to the date thereof, and that such repairs,
restoration and rebuilding have been performed to date in conformity with the
plans and specifications approved by the Mortgagee, together with appropriate
evidence of payment for labor or materials furnished to the Premises, and total
or partial lien waivers substantiating such payments.
A waiver of subrogation from any insurer who claims that it has no
liability as to the Mortgagor or the then owner or other insured under the
policy of insurance in question.
Such performance and payment bonds, and such insurance, in such
amounts, issued by such company or companies and in such forms and substance, as
are required by the Mortgagee.
In the event the Mortgagor shall fail to restore, repair or rebuild the
improvements upon the Premises within a reasonable time, then the Mortgagee, at
its option, and upon not less than thirty (30) days written notice to the
Mortgagor, may commence to restore, repair or rebuild the said improvements for
or on behalf of said Mortgagor, and its tenants, and for such purpose, may
perform all necessary acts to accomplish such restoration, repair or rebuilding.
In the event insurance proceeds or an eminent domain award shall exceed the
amount necessary to complete the repair, restoration or the rebuilding of the
improvements upon the Premises, such excess may, at the Mortgagee's option, be
applied on account of the last maturing installments of the Indebtedness Secured
Hereby, irrespective of whether such installments are then due and payable
without application of a prepayment premium, or be returned to the Mortgagor. In
the event the Mortgagor shall fail to restore, repair or rebuild the
improvements upon the Premises within the reasonable time, and if the Mortgagee
does not restore, repair or rebuild the said improvements as herein provided,
then the Mortgagee may, at its option, apply all or any part of the insurance
proceeds or condemnation or eminent domain award on account of the last maturing
installments of the Indebtedness Secured Hereby whether then due or not, without
application of a prepayment premium, or return the same to the Mortgagor.
6. LEASES AND RENTS
6.1 MORTGAGOR TO COMPLY WITH LEASES. The Mortgagor represents and
warrants that there are currently no leases in existence in connection with any
portion of the Premises. The Mortgagor further covenants and warrants that it
shall not enter into leases for any portion of the Premises without obtaining
the prior written consent of the Mortgagee. With reference to any leases
executed in accordance with this Section 6.1, the Mortgagor will, at its own
cost and expense, perform, comply with and discharge all of the obligations of
the Mortgagor under any leases and use its best efforts to enforce or secure the
performance of each obligation and undertaking of the respective tenants under
any such leases and will appear in and defend, at its own cost and expense, any
action or proceeding arising out of or in any manner connected with the
Mortgagor's interest in any leases of the Premises. The Mortgagor will not
modify, extend, renew, terminate, accept a surrender of, or in any way alter the
terms of the leases, nor borrow against, pledge or assign any rentals due under
the leases nor consent to a subordination or assignment of the interest of the
tenants thereunder to any party other than the Mortgagee, nor anticipate the
rents thereunder for more than one (1) month in advance or reduce the amount of
rents and other payments thereunder, nor waive, excuse, condone or in any manner
release or discharge the tenants of or from their obligations, covenants,
conditions and agreements to be performed. Notwithstanding anything to the
contrary herein contained, the Mortgagor may amend or modify any existing leases
without the prior written consent of the Mortgagee provided that such amendments
or modifications are made in the ordinary course of business and do not diminish
any material benefit accruing to the landlord under such lease or reduce either
the length of the term, the rental or the size of the demised premises.
6.2 THE MORTGAGEE'S RIGHT TO PERFORM UNDER LEASES. Should the Mortgagor
fail to perform, comply with or discharge any obligations of the Mortgagor under
any lease or should the Mortgagee become aware of or be notified by any tenant
under any lease of a failure on the part of the Mortgagor to so perform, comply
with or discharge its obligations under said lease, the Mortgagee may, but shall
not be obligated to, and without further demand upon the Mortgagor, and without
waiving or releasing the Mortgagor from any obligation in this Mortgage
contained, remedy such failure, and the Mortgagor agrees to repay upon demand
all sums incurred by the Mortgagee in remedying any such failure together with
interest at the rate then in effect under the terms of the Note. All such sums,
together with interest as aforesaid shall become so much additional Indebtedness
Secured Hereby, but no such advance shall be deemed to relieve the Mortgagor
from any default hereunder.
6.3 ASSIGNMENT OF LEASES AND RENTS. The Mortgagor does hereby sell,
assign and transfer unto the Mortgagee all of the leases, rents and profits now
due and which may hereafter become due under or by virtue of any lease, whether
written or verbal, or any agreement for the use or occupancy of the Premises,
whether presently in existence or entered into at any time during the term of
this Mortgage, it being the intention of this Mortgage to establish an absolute
transfer and assignment of all such leases and agreements and all of the rents
and profits from the Premises unto the Mortgagee and the Mortgagor does hereby
appoint irrevocably the Mortgagee its true and lawful attorney in its name and
stead, which appointment is coupled with an interest, to collect all of said
rents and profits; provided, the Mortgagor shall have the right to collect and
retain such rents and profits unless and until an Event of Default exists under
this Mortgage.
6.4 REMEDIES. Upon an Event of Default and whether before or after the
institution of legal proceedings to foreclose the lien hereof or before or after
sale thereunder or during any period of redemption, the Mortgagee, without
regard to waste, adequacy of the security or solvency of the Mortgagor, may
revoke the privilege granted the Mortgagor hereunder to collect the rents and
profits, and may, at its option, without notice, either: (a) in person or by
agent, with or without taking possession of or entering the Premises, with or
without bringing any action or proceeding, give, or require the Mortgagor to
give, notice to any or all tenants under any lease authorizing and directing the
tenant to pay such rents and profits to the Mortgagee; collect all of the rents
and profits; enforce the payment thereof and exercise all of the rights of the
landlord under the leases and all of the rights of the Mortgagee hereunder; may
enter upon, take possession of, manage and operate said Premises, or any part
thereof; may cancel, enforce or modify the leases, and fix or modify rents, and
do any acts which the Mortgagee deems proper to protect the security hereof with
or without taking possession of the Premises; or (b) apply for the appointment
of a receiver in accordance with the statutes and law made and provided for,
which receivership the Mortgagor hereby consents to, who shall collect the rents
and profits, and all other income of any kind; manage the Premises so to prevent
waste; execute leases within or beyond the period of receivership, and perform
the terms of this Mortgage and apply the rents and profits as hereinafter
provided.
The entering upon and taking possession of the Premises, the
appointment of a receiver, the collection of such rents and profits and the
application thereof as aforesaid shall not cure or waive any Event of Default
under this Mortgage nor in any way operate to prevent the Mortgagee from
pursuing any other remedy which it may now or hereafter have under the terms of
this Mortgage nor shall it in any way be deemed to constitute the Mortgagee a
mortgagee-in-possession. The rights and powers of the Mortgagee hereunder shall
remain in full force and effect both prior to and after any foreclosure of the
Mortgage and any sale pursuant thereto and until expiration of the period of
redemption from said sale, regardless of whether a deficiency remains from said
sale. The purchaser at any foreclosure sale, including the Mortgagee, shall have
the right, at any time and without limitation as provided in Minnesota Statutes
section 582.03, to advance money to any receiver appointed hereunder to pay any
part or all of the items which the receiver would otherwise be authorized to pay
if cash were available from the Premises and the sum so advanced, with interest
at the rate then in effect under the terms of the Note, shall be a part of the
sum required to be paid to redeem from any foreclosure sale. The rights
hereunder shall in no way be dependent upon and shall apply without regard to
whether the Premises are in danger of being lost, materially injured or damaged
or whether the Premises are adequate to discharge the Indebtedness Secured
Hereby.
6.5 APPLICATION OF RENTS. Any rents collected pursuant to the terms of
Section 6.4 hereof shall be applied in the following order: (a) to payment of
all reasonable fees of any receiver appointed hereunder; (b) to application of
tenant's security deposits as required by Minnesota Statutes section 504.20; (c)
to payment when due of prior or current real estate taxes or special assessments
with respect to the Premises or, if this Mortgage so requires, to the periodic
escrow for payment of the taxes or special assessments then due; (d) to payment
when due of premiums for insurance of the type required by this Mortgage or, if
this Mortgage so requires, to the periodic escrow for the payment of premiums
then due; and (e) to payment of all expenses for normal maintenance of the
Premises. Any rents remaining after application of the above items shall be
applied to the Indebtedness Secured Hereby on a monthly basis. If the Premises
shall be foreclosed and sold pursuant to a foreclosure sale, then:
(a) if the Mortgagee is the purchaser at the foreclosure sale, the
rents shall be paid to the Mortgagee to be applied to the
extent of any deficiency remaining after the sale, the balance
to be retained by the Mortgagee, and if the Premises be
redeemed by the Mortgagor or any other party entitled to
redeem, to be applied as a credit against the redemption price
with any remaining excess rents to be paid to the Mortgagor,
provided, if the Premises not be redeemed, any remaining
excess rents to belong to the Mortgagee, whether or not a
deficiency exists.
(b) if the Mortgagee is not the purchaser at the foreclosure sale,
the rents shall be paid to the Mortgagee to be applied first,
to the extent of any deficiency remaining after the sale, the
balance to be retained by the purchaser, and if the Premises
be redeemed by the Mortgagor or any other party entitled to
redeem, to be applied as a credit against the redemption price
with any remaining excess rents to be paid to the Mortgagor,
provided, if the Premises not be redeemed any remaining excess
rents shall be paid first, to the purchaser at the foreclosure
sale in an amount equal to the interest accrued upon the sale
price pursuant to Minnesota Statutes section 580.23 or section
581.10, then to the Mortgagee to the extent of any deficiency
remaining unpaid and the remainder to the purchaser.
7. RIGHTS OF THE MORTGAGEE
7.1 RIGHT TO CURE EVENT OF DEFAULT. If the Mortgagor shall fail to
comply with any of the covenants or obligations of this Mortgage, the Mortgagee
may, but shall not be obligated to, without demand upon the Mortgagor, and
without waiving or releasing the Mortgagor from any obligation in this Mortgage
contained, remedy such failure, and the Mortgagor agrees to repay upon demand
all sums incurred by the Mortgagee in remedying any such failure together with
interest at the Default Rate, as defined under the terms of the Credit
Agreement. All such sums, together with interest as aforesaid shall become so
much additional Indebtedness Secured Hereby, but no such advance shall be deemed
to relieve the Mortgagor from any failure hereunder.
7.2 NO CLAIM AGAINST THE MORTGAGEE. Nothing contained in this Mortgage
shall constitute any consent or request by the Mortgagee, express or implied,
for the performance of any labor or services or for the furnishing of any
materials or other property in respect of the Premises or any part thereof, nor
as giving the Mortgagor or any party in interest with the Mortgagor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would create any personal liability against the Mortgagee in respect thereof or
would permit the making of any claim that any lien based on the performance of
such labor or services or the furnishing of any such materials or other property
is prior to the lien of this Mortgage.
7.3 INSPECTION. The Mortgagor will permit the Mortgagee's authorized
representatives to enter the Premises at all times during normal business hours
for the purpose of inspecting the same; provided the Mortgagee shall have no
duty to make such inspections and shall not incur any liability or obligation
for making or not making any such inspections.
7.4 WAIVERS; RELEASES; RESORT TO OTHER SECURITY, ETC. Without affecting
the liability of any party liable for payment of any Indebtedness Secured Hereby
or performance of any obligation contained herein, and without affecting the
rights of the Mortgagee with respect to any security not expressly released in
writing, the Mortgagee may, at any time, and without notice to or the consent of
the Mortgagor or any party in interest with the Premises or the Note: (a)
release any person liable for payment of all or any part of the Indebtedness
Secured Hereby or for performance of any obligation herein; (b) make any
agreement extending the time or otherwise altering the terms of payment of all
or any part of the Indebtedness Secured Hereby or modifying or waiving any
obligation, or subordinating, modifying or otherwise dealing with the lien or
charge hereof; (c) accept any additional security; (d) release or otherwise deal
with any property, real or personal, including any or all of the Premises,
including making partial releases of the Premises; or (e) resort to any security
agreements, pledges, contracts of guarantee, assignments of rents and leases or
other securities, and exhaust any one or more of said securities and the
security hereunder, either concurrently or independently and in such order as it
may determine.
7.5 RIGHTS CUMULATIVE. Each right, power or remedy herein conferred
upon the Mortgagee is cumulative and in addition to every other right, power or
remedy, express or implied, now or hereafter arising, available to the
Mortgagee, at law or in equity, or under the Uniform Commercial Code, or under
any other agreement, and each and every right, power and remedy herein set forth
or otherwise so existing may be exercised from time to time as often and in such
order as may be deemed expedient by the Mortgagee and any such exercise shall
not be a waiver of the right to exercise at any time thereafter any other right,
power or remedy. No delay or omission by the Mortgagee in the exercise of any
right, power or remedy arising hereunder or arising otherwise shall impair any
such right, power or remedy or the right of the Mortgagee to resort thereto at a
later date or be construed to be a waiver of any Event of Default under this
Mortgage or the Note.
7.6 SUBSEQUENT AGREEMENTS. Any agreement hereafter made by the
Mortgagor and the Mortgagee pursuant to this Mortgage shall be superior to the
rights of the holder of any intervening lien or encumbrance.
7.7 WAIVER OF APPRAISEMENT, HOMESTEAD, MARSHALING. The Mortgagor hereby
waives to the full extent lawfully allowed the benefit of any homestead,
appraisement, evaluation, stay and extension laws now or hereinafter in force.
The Mortgagor hereby waives any rights available with respect to marshaling of
assets so as to require the separate sales of any portion of the Premises, or as
to require the Mortgagee to exhaust its remedies against a specific portion of
the Premises before proceeding against the other and does hereby expressly
consent to and authorize the sale of the Premises or any part thereof as a
single unit or parcel.
7.8 BUSINESS LOAN REPRESENTATION. The Mortgagor represents and warrants
to the Mortgagee that the loan evidenced by the Note is a business loan
transacted solely for the purpose of carrying on the business of the Mortgagor
and the Premises does not constitute the homestead of the Mortgagor.
8. EVENTS OF DEFAULT AND REMEDIES
8.1 EVENTS OF DEFAULT. The violation of any provision of this Mortgage
or the occurrence of any Event of Default as defined in the Credit Agreement
shall constitute an Event of Default hereunder ("Event of Default").
8.2 THE MORTGAGEE'S RIGHT TO ACCELERATE. If an Event of Default shall
occur the Mortgagee may immediately and without notice to the Mortgagor declare
the entire unpaid principal balance of the Note together with all other
Indebtedness Secured Hereby to be immediately due and payable and thereupon all
such unpaid principal balance of the Note together with all accrued interest
thereon and all other Indebtedness Secured Hereby shall be and become
immediately due and payable.
8.3 REMEDIES OF THE MORTGAGEE AND RIGHT TO FORECLOSE. If an Event of
Default shall occur the Mortgagee shall have the right to enforce the provisions
of this Mortgage and may, either with or without entry or taking possession,
proceed by suit or suits at law or in equity or by any other appropriate
proceedings or remedy to enforce payment of the Indebtedness Secured Hereby or
the performance of any other term hereof or any other right and the Mortgagor
hereby authorizes and fully empowers the Mortgagee to foreclose this Mortgage by
judicial proceedings or by advertisement with full authority to sell the
Premises at public auction and convey the same to the purchaser in fee simple,
either in one parcel or separate lots and parcels, all in accordance with and in
the manner prescribed by law, and out of the proceeds arising from sale and
foreclosure to retain the principal and interest due on the Note and the
Indebtedness Secured Hereby together with all such sums of money as the
Mortgagee shall have expended or advanced pursuant to this Mortgage or pursuant
to statute together with interest thereon as herein provided and all costs and
expenses of such foreclosure, including, but not limited to, maximum lawful
attorney's fees, costs of environmental inspections and appraisal costs and
expenses, with the balance, if any, to be paid to the persons entitled thereto
by law.
8.4 RECEIVER. Upon the occurrence of an Event of Default, the Mortgagee
shall be entitled as a matter of right without notice and without giving bond
and without regard to the solvency or insolvency of the Mortgagor, or waste of
the premises or adequacy of the security of the Premises, to apply for the
appointment of a receiver under any statute or law who shall have all the
rights, powers and remedies as provided by such statute or law, including
without limitation the rights of receiver pursuant to Minnesota Statutes section
576.01, as amended, and who shall from the date of his appointment through any
period of redemption existing at law collect the rents, and all other income of
any kind; manage the Premises so as to prevent waste; execute leases within or
beyond the use of receivership; and perform the terms of this Mortgage and apply
the rents, issues and profits to the payment of the expenses enumerated in
Minnesota Statutes section 576.01, subdivision 2 in the priority mentioned
therein and to all expenses for maintenance of the Premises and to the costs and
expenses of the receivership, including reasonable attorneys fees, to the
repayment of the Indebtedness Secured Hereby. The Mortgagor does hereby
irrevocably consent to such appointment.
8.5 RIGHTS UNDER UNIFORM COMMERCIAL CODE. In addition to the rights
available to a mortgagee of real property, the Mortgagee shall also have all the
rights, remedies and recourse available to a secured party under the Uniform
Commercial Code including the right to proceed under the provisions of the
Uniform Commercial Code governing default as to any Collateral as defined in
Section 4.1 of this Mortgage which may be included in the Premises or which may
be deemed nonrealty in a foreclosure of this Mortgage or to proceed as to such
Collateral in accordance with the procedures and remedies available pursuant to
a foreclosure of real estate.
8.6 RIGHT TO DISCONTINUE PROCEEDINGS. In the event the Mortgagee shall
have proceeded to invoke any right, remedy or recourse permitted under this
Mortgage and shall thereafter elect to discontinue or abandon the same for any
reason, the Mortgagee shall have the unqualified right to do so and in such
event the Mortgagor and the Mortgagee shall be restored to their former
positions with respect to the Indebtedness Secured Hereby. This Mortgage, the
Premises and all rights, remedies and recourse of the Mortgagee shall continue
as if the same had not been invoked.
8.7 ACKNOWLEDGMENT OF WAIVER OF HEARING BEFORE SALE. The Mortgagor
understands and agrees that if an Event of Default shall occur, the Mortgagee
has the right, inter alia, to foreclose this Mortgage by advertisement pursuant
to Minnesota Statutes chapter 580, as hereafter amended, or pursuant to any
similar or replacement statute hereafter enacted; that if the Mortgagee elects
to foreclose by advertisement, it may cause the Premises, or any part thereof,
to be sold at public auction; that notice of such sale must be published for six
(6) successive weeks at least once a week in a newspaper of general circulation
and that no personal notice is required to be served upon the Mortgagor. The
Mortgagor further understands that upon the occurrence of an Event of Default,
the Mortgagee may also elect its rights under the Uniform Commercial Code and
take possession of the Collateral and dispose of the same by sale or otherwise
in one or more parcels provided that at least ten (10) days' prior notice of
such disposition must be given, all as provided for by the Uniform Commercial
Code, as hereafter amended or by any similar or replacement statute hereafter
enacted. The Mortgagor further understands that under the Constitution of the
United States and the Constitution of the State of Minnesota it may have the
right to notice and hearing before the Premises may be sold and that the
procedure for foreclosure by advertisement described above does not insure that
notice will be given to the Mortgagor and neither said procedure for foreclosure
by advertisement nor the Uniform Commercial Code requires any hearing or other
judicial proceeding. THE MORTGAGOR HEREBY EXPRESSLY CONSENTS AND AGREES THAT THE
PREMISES MAY BE FORECLOSED BY ADVERTISEMENT AND THAT THE PERSONAL PROPERTY MAY
BE DISPOSED OF PURSUANT TO THE UNIFORM COMMERCIAL CODE, ALL AS DESCRIBED ABOVE.
THE MORTGAGOR ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL; THAT BEFORE
SIGNING THIS DOCUMENT THIS SECTION AND THE MORTGAGOR'S CONSTITUTIONAL RIGHTS
WERE FULLY EXPLAINED BY SUCH COUNSEL AND THAT THE MORTGAGOR UNDERSTANDS THE
NATURE AND EXTENT OF THE RIGHTS WAIVED HEREBY AND THE EFFECT OF SUCH WAIVER.
9. HAZARDOUS MATERIALS
9.1 DEFINITIONS. Any terms used in this Article which are defined in
state or federal statutes and/or regulations promulgated in relation thereto
shall have the meaning subscribed to such terms in said statutes and
regulations.
9.2 REPRESENTATIONS BY THE MORTGAGOR. The Mortgagor hereby represents
to the Mortgagee that: (a) to the best of the Mortgagor's knowledge after due
inquiry, the Premises has never been used either by previous owners or occupants
or by the Mortgagor or current occupants to generate, manufacture, refine,
transport, treat, store, handle or dispose of any toxic material, hazardous
substance or hazardous waste and no such material, substance or waste currently
exists on the Premises or in its soil or groundwater; (b) to the best of the
Mortgagor's knowledge after due inquiry, no portion of the improvements on the
Premises has been constructed with asbestos, asbestos-containing materials, urea
formaldehyde insulation or any other chemical or substance which has been
determined to be a hazard to health and environment; (c) to the best of the
Mortgagor's knowledge after due inquiry, there are no electrical transformers or
other equipment which have dielectric fluid-containing polychlorinated biphenyls
(PCBs) located in, on or under the Premises (the materials, substances and
wastes described in subparagraphs 9.2(a), (b) and (c) above are hereinafter
sometimes collectively referred to as "Hazardous Wastes and Substances"); (d) to
the best of the Mortgagor's knowledge after due inquiry, the Premises has never
contained any underground storage tanks; and (e) the Mortgagor has not received
nor does it have any knowledge of any summons, citation, directive, letter or
other communication, written or oral, from any local, state or federal
governmental agency concerning (i) the existence of Hazardous Wastes and
Substances on the Premises or in the immediate vicinity or (ii) any intentional
or unintentional action or omission on the part of the Mortgagor or any occupant
of the Premises resulting in the releasing, spilling, leaking, pumping, pouring,
emitting, emptying, or dumping of Hazardous Wastes or Substances onto the
Premises or into waters or other lands.
9.3 COVENANTS OF THE MORTGAGOR. The Mortgagor hereby covenants to the
Mortgagee that
(a) the Mortgagor shall (i) comply and shall cause all occupants of
the Premises to comply with all federal, state and local laws,
rules, regulations and orders with respect to the discharge,
generation, removal, transportation, storage and handling of
Hazardous Wastes and Substances, (ii) remove any Hazardous
Wastes and Substances immediately upon discovery of same, and
(iii) pay or cause to be paid all costs associated with such
removal;
(b) the Mortgagor shall keep the Premises free of any lien imposed
pursuant to any state or federal law, rule, regulation or order
in connection with the existence of Hazardous Wastes and
Substances on the Premises;
(c) the Mortgagor shall not install or permit to be installed or to
exist in or on the Premises any asbestos, asbestos-containing
materials, urea formaldehyde insulation or any other chemical or
substance which has been determined to be a hazard to health and
environment; and
(d) the Mortgagor shall not cause or permit to exist, as a result of
an intentional or unintentional act or omission on the part of
the Mortgagor or any occupant of the Premises, a releasing,
spilling, leaking, pumping, emitting, pouring, emptying or
dumping of any Hazardous Wastes or Substances onto the Premises
or into waters or other lands.
9.4 EVENTS OF DEFAULT AND REMEDIES. It shall constitute an Event of
Default hereunder and the Mortgagee shall be entitled to exercise all remedies
available to it hereunder if: (a) any of the Mortgagor's representations
contained in Section 9.2 hereof prove to be false, inaccurate or misleading; (b)
the Mortgagor shall fail to comply with the covenants contained in Section 9.3
hereof; (c) any Hazardous Wastes or Substances are hereafter found to exist on
the Premises or in its soil or groundwater; or (d) any summons, citation,
directive, letter or other communication, written or oral, shall be issued by
any local, state or federal governmental agency concerning the matters described
in Section 9.2(e)(i) and (ii) above. The Mortgagor hereby grants the Mortgagee
and its employees and agents an irrevocable and non-exclusive license to enter
the Premises, subject to rights of tenants, in order to inspect, conduct testing
and remove Hazardous Wastes and Substances. All costs of such inspection,
testing and removal shall immediately become due and payable to the Mortgagee,
shall be secured by this Mortgage and shall constitute additional Indebtedness
Secured Hereby.
9.5 INDEMNIFICATION. The Mortgagor hereby agrees to defend, indemnify
and hold harmless the Mortgagee, its directors, officers, employees, agents,
contractors, subcontractors, licensees, invitees, successors and assigns
("Indemnified Parties") from and against any and all claims, losses, damages,
liabilities, judgments, costs and expenses (including, without limitation,
reasonable attorneys' fees and costs incurred in the investigation, defense and
settlement of claims) incurred by the Indemnified Parties as a result of or in
connection with the presence or removal of any Hazardous Wastes or Substances or
as a result of or in connection with activities prohibited under this Article.
The Mortgagor shall bear, pay and discharge, as and when the same become due and
payable, any and all such judgments or claims for damages, penalties or
otherwise, against the Indemnified Parties, shall hold the Indemnified Parties
harmless against all claims, losses, damages, liabilities, costs and expenses,
and shall assume the burden and expense of defending all suits, administrative
proceedings, and negotiations of any description with any and all persons,
political subdivisions or government agencies arising out of any of the
occurrences set forth in this Article. This indemnification shall remain in full
force and effect and shall survive the repayment of the Indebtedness Secured
Hereby and the satisfaction of the documents securing the same, as well as the
exercise of any remedy by the Mortgagee hereunder or under the other documents
securing this Mortgage, including a foreclosure of the Mortgage or the
acceptance of a deed in lieu of foreclosure.
10. MISCELLANEOUS
10.1 RELEASE OF MORTGAGE. When all Indebtedness Secured Hereby has been
paid, this Mortgage and all assignments herein contained shall be void and this
Mortgage shall be released by the Mortgagee at the Mortgagor's expense.
10.2 CHOICE OF LAW. This Mortgage is made and executed under the laws
of the State of Minnesota and is intended to be governed by the laws of said
State.
10.3 SUCCESSORS AND ASSIGNS. This Mortgage and each and every covenant,
agreement, indemnity and other provision hereof shall be binding upon the
Mortgagor and its successors and assigns including without limitation each and
every from time to time record owner of the Premises or any other person having
an interest therein, shall run with the land and shall inure to the benefit of
the Mortgagee and its successors and assigns. As used herein the words
"successors and assigns" shall also be deemed to include the heirs,
representatives, administrators and executors of any natural person who is a
party to this Mortgage.
10.4 UNENFORCEABILITY OF CERTAIN CLAUSES. The unenforceability or
invalidity of any provisions hereof shall not render any other provision or
provisions herein contained unenforceable or invalid.
10.5 CAPTIONS AND HEADINGS. The captions and headings of the various
sections of this Mortgage are for convenience only and are not to be construed
as confining or limiting in any way the scope or intent of the provisions
hereof. Whenever the context requires or permits the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.
10.6 NOTICES. Any notice which any party hereto may desire or may be
required to give to any other party shall be in writing and the mailing thereof
by certified mail to their respective addresses as set forth herein, or to such
other places any party hereto may hereafter by notice in writing designate shall
constitute service of notice hereunder.
10.7 INTEREST LIMITATION. All agreements between the Mortgagor and the
Mortgagee are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the Indebtedness
Secured Hereby or otherwise, shall the amount paid or agreed to be paid to the
Mortgagee for the use, forbearance, loaning or detention of the Indebtedness
Secured Hereby exceed the maximum permissible under applicable law. If from any
circumstances whatsoever, fulfillment of any provisions hereof or of the Note,
the Credit Agreement or any other document securing this Mortgage at any time
given shall involve transcending the limit of validity prescribed by law, then,
the obligation to be fulfilled shall automatically be reduced to the limit of
such validity, and if from any circumstances the Mortgagee should ever receive
as interest an amount which would exceed the highest lawful rate of interest,
such amount which would be in excess of interest shall be applied to the
reduction of the principal balance secured by the Note and not to the payment of
interest thereunder. This provision shall control every other provision of all
agreements between the Mortgagor and Mortgagee and shall also be binding upon
and available to any subsequent holder of the Note.
Nothing herein contained shall affect or impair the liability or
obligation of any guarantor or other person who by separate instrument shall be
or become liable upon the Indebtedness Secured Hereby.
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be
executed as of the date first above written.
FIRST TEAM SPORTS, INC.
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: CFO
ACKNOWLEDGMENT
STATE OF MINNESOTA )
)
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this ____ day of
September, 1999, by _________________________, the __________________________ of
First Team Sports, Inc., a Minnesota corporation on behalf of said corporation.
_________________________
Notary Public
THIS DOCUMENT WAS DRAFTED BY:
XXXXXXXXXXX XXXXX & XXXXXXXX LLP
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000
EXHIBIT "A"
LEGAL DESCRIPTION
Xxxx 0 xxx 0X, Xxxxx 0, Xxxxx Xxxxxxxxxx Xxxx Third Addition, according
to the recorded plat thereof, Anoka County, Minnesota.
EXHIBIT "B"
PERMITTED ENCUMBRANCES
