OPEN-END MORTGAGE AND SECURITY AGREEMENT
THIS IS AN OPEN-END MORTGAGE AND SECURITY AGREEMENT
SECURING FUTURE ADVANCES UP TO A MAXIMUM PRINCIPAL AMOUNT
OF $2,619,954.25 PLUS ACCRUED INTEREST AND OTHER
INDEBTEDNESS AS DESCRIBED IN 42 Pa. C.S.A. ss.8143
THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT made as of this 29th day of
April, 1998 (as amended, modified, extended, supplemented, restated and/or
replaced from time to time, this "Mortgage") is between PIERCING PAGODA, INC.
("Mortgagor"), a Delaware corporation having its chief executive office at 0000
Xxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxxxxxxx 00000, and CORESTATES BANK, N.A., a
national bank with offices at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, as
administrative agent for the Lenders (hereinafter defined) under that certain
Syndicated Loan Agreement dated March 27, 1997 (as amended, modified, extended,
supplemented, restated and/or replaced from time to time, the "Syndicated Loan
Agreement") by and among Mortgagor, the lending institutions from time to time
parties thereto (each a "Lender" and collectively, the "Lenders"), and
Mortgagee, as administrative agent for itself and the other Lenders and as a
Lender (in such capacity, the "Mortgagee").
W I T N E S S E T H T H A T:
Pursuant to the terms and subject to the conditions set forth in the
Syndicated Loan Agreement and that certain Reimbursement Agreement dated as of
the date hereof (as amended, modified, extended, supplemented, restated and/or
replaced from time to time, the "Reimbursement Agreement") by and among
Mortgagor, the Lenders and Mortgagee, as the administrative agent for itself and
the other Lenders, Mortgagee, on behalf of each Lender (according to such
Lender's Pro Rata Share [as defined in the Syndicated Loan Agreement]) has
issued for the account of Mortgagor its irrevocable letter of credit (as
amended, modified, extended, supplemented, restated and/or replaced from time to
time, the "Letter of Credit") in an amount equal to Two Million Six Hundred
Nineteen Thousand Nine Hundred Fifty-Four and 25/100 ($2,619,954.25) Dollars to
provide credit enhancement for Mortgagor's Taxable Variable Rate Demand/Fixed
Rate Bonds, Series of 1998, in the aggregate amount of Two Million Five Hundred
Sixty-Five Thousand ($2,565,000.00) Dollars (as amended, modified, extended,
supplemented, restated and/or replaced from time to time, collectively, the
"Bonds").
The reimbursement obligation of Mortgagor to the Lenders is evidenced by
the Reimbursement Agreement, the Letter of Credit and those certain Revolving
Loan Notes executed and delivered by Mortgagor to the Lenders pursuant to, and
as described in, the Syndicated Loan Agreement. To induce the Lenders, through
Mortgagee as administrative agent and as issuer of the Letter of Credit, to
issue the Letter of Credit, Mortgagor is executing and delivering this Mortgage
to secure the existing and future debts, liabilities and obligations of
Mortgagor to the Lenders under the Reimbursement Agreement.
NOW, THEREFORE, in consideration of the issuance of the Letter of Credit,
and as security for payment and performance to Mortgagee under the Reimbursement
Agreement and this Mortgage, according to their respective terms and conditions
(including but not limited to any restructuring, refinancing, extension or
modification thereof) and for performance of the agreements, conditions,
covenants, provisions and stipulations contained herein and therein, and in
certain other agreements and instruments made and given by Mortgagor to
Mortgagee in connection therewith, Mortgagor has granted, conveyed, bargained,
sold, aliened, enfeoffed, released, confirmed and mortgaged, and by these
presents does hereby grant, convey, bargain, sell, alien, enfeoff, release,
confirm and mortgage unto Mortgagee all that certain real estate located in
Hanover Township, Northampton County, Pennsylvania, all as more fully described
in Exhibit A, attached hereto, incorporated herein by this reference and hereby
made a part hereof (the "Land").
TOGETHER WITH all of Mortgagor's right, title and interest now owned or
hereafter acquired in:
1) all buildings and improvements erected or
hereafter erected on the Land; and
2) all fixtures, appliances, machinery, furniture, furnishings and equipment of
any nature whatsoever and other articles of personal property owned by Mortgagor
now or at any time hereafter installed in, attached to or situated in or upon
the Land or any buildings and improvements now or hereafter erected thereon, or
used or intended to be used in connection with the Land, or in the operation of
any buildings and improvements now or hereafter erected thereon, or in the
operation or maintenance of any such building or improvement, plant or business
situate thereon, whether or not the personal property is or shall be affixed
thereto (the aforesaid buildings, improvements and fixtures located on the Land
being sometimes hereinafter collectively referred to as the "Improvements" and
the Land and Improvements being sometimes hereinafter collectively referred to
as the "Real Estate"); and
3) all building materials, fixtures, building machinery and building equipment
delivered to the Land during the course of, or in connection with, the
construction of, or reconstruction of, or remodeling of, any buildings and
improvements from time to time during the term hereof; and
4) any and all tenements, hereditaments and appurtenances belonging to the Real
Estate or any part thereof hereby mortgaged or intended so to be, or in any way
appertaining thereto, and all streets, alleys, passages, ways, water courses,
and all leases, licenses, permits, approvals, agreements, easements and
covenants now existing or hereafter created for the benefit of Mortgagor or any
subsequent owner or tenant of the Real Estate over ground adjoining the Real
Estate and all rights to enforce the maintenance thereof, and all other rights,
liberties and privileges of whatsoever kind or character, and the reversions and
remainders, income, rents, issues and profits arising therefrom, and all the
estate, right, title, interest, property, possession, claim and demand
whatsoever, at law or in equity, of Mortgagor in and to the Real Estate or any
part thereof; and
5) all rents, income, issues and profits arising or issuing from all leases and
subleases now or after the date of this Mortgage entered into covering all or
any part of the Real Estate, all of which rents, income, issues and profits are
hereby assigned and, if requested by Mortgagee, shall be caused to be further
assigned by Mortgagor to Mortgagee. The foregoing assignment shall include,
without limitation, cash or securities deposited under leases to secure
performance by lessees of their obligations under such leases, whether such cash
or securities are to be held until the expiration of the terms of such leases or
applied to one or more installments of rent coming due prior to the expiration
of such terms; and
6) 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.
All of the above-mentioned real estate, buildings, improvements, fixtures,
machinery, furniture, equipment, other personal property, materials, tenements,
hereditaments and appurtenances, leases and subleases and other property
interests are sometimes collectively referred to herein as the "Mortgaged
Property".
TO HAVE AND TO HOLD the Mortgaged Property hereby conveyed or mentioned
and intended so to be, unto Mortgagee, to its own use forever.
PROVIDED ALWAYS, and this instrument is upon the express condition that,
if Mortgagor pays or causes to be paid to the Lenders all sums payable by
Mortgagor to Mortgagee as are secured hereby, with interest thereon, as
applicable, in accordance with the provisions of the Reimbursement Agreement and
this Mortgage, at the times and in the manner specified, without deduction,
fraud or delay, and Mortgagor performs and complies with all the agreements,
conditions, covenants, provisions and stipulations contained herein and in the
Reimbursement Agreement, then this Mortgage and the estate hereby granted shall
cease and become void.
MORTGAGOR REPRESENTS, COVENANTS AND WARRANTS to and with Mortgagee that
until the indebtedness secured hereby is fully repaid:
1. Payment and Performance. Mortgagor shall pay to Mortgagee, in accordance with
the terms of the Reimbursement Agreement, the principal sums set forth therein
and in this Mortgage and interest thereon; shall perform and comply with all the
agreements, conditions, covenants, provisions and stipulations of the
Reimbursement Agreement and this Mortgage and all related instruments,
agreements and documents; and shall timely perform all of its obligations and
duties under any lease, easement agreement, license, permit, approval, covenant
or other agreement relating to, affecting, created for the benefit of or used in
connection with the operation of all or any portion of the Mortgaged Property
now or hereafter in effect. 2. Warranty of Title. Mortgagor warrants that (i) it
possesses a good and marketable unencumbered fee simple title to the Real
Estate, and a good and a marketable unencumbered title to the remainder of the
Mortgaged Property, except for those title exceptions listed in the mortgagee
title insurance policy approved by and issued to Mortgagee, insuring the
priority of the lien of this Mortgage, and (ii) this Mortgage is a valid and
enforceable first lien on the Mortgaged Property, subject only to the aforesaid
exceptions. Mortgagor shall preserve such title and the validity and priority of
the lien of this Mortgage and shall forever warrant and defend the same against
the claims of all persons and parties whomsoever.
3. Maintenance of Mortgaged Property. Mortgagor shall keep and maintain or cause
to be kept and maintained the Mortgaged Property and the sidewalks and curbs
abutting the Real Estate, in good order and condition and in a rentable and
tenantable state of repair, and will make or cause to be made, as and when
necessary, all repairs, renewals and replacements, structural and nonstructural,
exterior and interior, ordinary and extraordinary, foreseen and unforeseen.
Mortgagor shall abstain from and shall not permit the commission of waste in or
about the Real Estate; shall not remove or demolish any portion of the Real
Estate, or alter the structural character of any building, structure,
improvement or fixture erected at any time on the Land, without the prior
written consent of Mortgagee; and shall not permit the Real Estate to become
deserted or abandoned.
4. Insurance.
(a) Mortgagor shall keep the Improvements and all personal property located on
the Real Estate continuously insured, to the extent of their full insurable
replacement value, as such replacement value is reasonably determined by
Mortgagee from time to time, against loss or damage by fire, with extended
coverage and business interruption coverage, boiler and machinery coverage, and
coverage against loss or damage by vandalism, malicious mischief, sprinkler
leakage and, if required by federal law, against flood, and against such other
hazards as Mortgagee may reasonably require from time to time. Mortgagor shall
also maintain commercial general liability and property damage insurance with
contractual liability endorsement and employer's liability and worker's
compensation insurance, in such total amounts as Mortgagee may require from time
to time, but in no event less than $1,000,000 per occurrence, with excess
umbrella coverage of at least $2,000,000. Mortgagee shall be named as an
additional insured under such general liability policy. Such insurance shall
include protection for continuation of income for a period of twelve (12) months
in the event of any damage caused by the perils referred to above.
(b) All policies, including policies for any amounts carried in excess of the
required minimum and policies not specifically required by Mortgagee, shall be
in form satisfactory to Mortgagee, shall be issued by companies satisfactory to
Mortgagee, shall be maintained in full force and effect, shall be delivered to
Mortgagee, with premiums prepaid, and shall provide for at least thirty (30)
days' notice of cancellation to Mortgagee, and all hazard insurance policies
shall be endorsed with a standard mortgagee/loss payee clause in favor of
Mortgagee, not subject to contribution, and shall be for a term of at least one
year. Certificates of insurance, addressed to Mortgagee, evidencing such hazard
insurance, general liability, property damage and worker's compensation
insurance may be delivered to Mortgagee in lieu of the policies therefor.
(c) If the insurance, or any part thereof, shall expire, or be cancelled, or
become void or voidable by reason of breach of any condition thereof, or if
Mortgagee determines that such coverage is unsatisfactory by reason of the
failure or impairment of the capital of any company in which the insurance may
then be carried, or if for any reason whatever the insurance shall be
unsatisfactory to Mortgagee, Mortgagor shall place new insurance, satisfactory
to Mortgagee. All renewal policies, with premiums paid, shall be delivered to
Mortgagee at least thirty (30) days before expiration of the old policies.
(d) In the event of loss, Mortgagor will give immediate notice thereof to
Mortgagee, and Mortgagee may make proof of loss if not made promptly by
Mortgagor; provided, however, that any adjustment of a proof of loss shall
require the prior written consent of Mortgagee. Each insurance company issuing
hazard insurance policies in respect of the Improvements and the aforesaid
personal property is hereby authorized and directed to make payment under such
insurance, including return of unearned premiums, directly to Mortgagee instead
of to Mortgagor and Mortgagee jointly, and Mortgagor appoints Mortgagee,
irrevocably, as Mortgagor's attorney-in-fact to endorse any draft therefor.
Mortgagee shall have the right to retain and apply the proceeds of any such
insurance, at its election, to reduction of the indebtedness secured hereby or,
on such reasonable terms as Mortgagee may specify, to restoration or repair of
the property damaged. The contrary notwithstanding, however, the Mortgagee shall
permit the Mortgagor to use all or a portion of the loss proceeds for the
purpose of repairing, restoring, renovating or replacing the damaged property in
the event that the cost of the repair, restoration, renovation or replacement
(as reasonably determined by Mortgagee) is less than One Million ($1,000,000.00)
Dollars and: (a) the insurance carrier shall have waived any right of
subrogation against the Mortgagor under its policy; (b) no Event of Default or
event which, with the passage of time or the giving of notice, or both, could
constitute an Event of Default shall have occurred and be continuing at the time
of the casualty loss; (c) no Event of Default or event which, with the passage
of time or the giving of notice, or both, could constitute an Event of Default
shall occur during the course of such repair, restoration, renovation or
replacement; (d) the amount of the insurance proceeds and any separate funds to
be contributed by the Mortgagor, are sufficient, in the Mortgagee's sole
opinion, to effect such repair, restoration, renovation or replacement in a
satisfactory manner; (e) the Mortgagor submits to the Mortgagee an acceptable
construction budget and construction schedule for the repair, restoration,
renovation or replacement, as well as plans and specifications indicating that
such repair, restoration, renovation or replacement can be accomplished within
the time and cost restrictions shown on the construction budget and construction
schedule; and (f) the funds which are used to effect such repair, restoration,
renovation or replacement (whether in the form of insurance proceeds,
undisbursed loan proceeds, or an equity contribution by the Mortgagor) are held
and disbursed by the Mortgagee. Mortgagee's application of insurance proceeds to
reduction of the indebtedness secured by this Mortgage or to restoration or
repair of the property damaged shall not excuse or modify Mortgagor's obligation
to continue to pay the installments of interest and/or principal required under
the Note unless the amount of such insurance proceeds received by Mortgagee and
applied to reduction of the indebtedness secured by this Mortgage is sufficient
to repay in full all interest, principal and all other sums required to be paid
to Mortgagee under the Note and this Mortgage. Such hazard policies of insurance
and all renewals thereof are hereby assigned to Mortgagee as additional security
for payment of the indebtedness hereby secured and Mortgagor hereby agrees that
after default hereunder any values available thereunder upon cancellation or
termination of any of said policies or renewals, whether in the form of return
of premiums or otherwise, shall be payable to Mortgagee as assignee thereof. If
Mortgagee becomes the owner of the Mortgaged Property or any part thereof by
foreclosure or otherwise, such policies, including all right, title and interest
of Mortgagor thereunder, shall become the absolute property of Mortgagee.
5. Taxes and Other Charges. Mortgagor shall pay when due and payable and before
interest or penalties are due thereon, without any deduction, defalcation or
abatement, all taxes, assessments, water and sewer rents and all other charges
or claims which may be assessed, levied or filed at any time against Mortgagor,
the Mortgaged Property or any part thereof or against the interest of Mortgagee
therein, or which by any present or future law may have priority over the
indebtedness secured hereby either in lien or in distribution out of the
proceeds of any judicial sale; and Mortgagor shall produce to Mortgagee not
later than such dates receipts for the payment thereof. If, however, pursuant to
this Mortgage or otherwise, Mortgagor shall have deposited with Mortgagee before
the due date thereof sums sufficient to pay any such taxes, assessments, water
and sewer rents, charges or claims, and there does not exist an Event of Default
(as such term is hereinafter defined) or any event or condition which, with the
giving of notice or passage of time, or both, could become an Event of Default,
they shall be paid by Mortgagee. If there does not exist an Event of Default or
any such event or condition, and Mortgagor in good faith and by appropriate
legal action shall contest the validity of any such item, or the amount thereof,
and shall have established on its books or by deposit of cash with Mortgagee, as
Mortgagee may elect, a reserve for the payment thereof in such amount as
Mortgagee may require (including but not limited to any interest and penalties
which may be payable in connection therewith), then Mortgagor shall not be
required to pay the item or to produce the required receipts while the reserve
is maintained and so long as the contest that operates to prevent collection is
maintained and prosecuted with diligence, and shall not have been terminated or
discontinued adversely to Mortgagor. Further, Mortgagor will not apply for or
claim any deduction, by reason of this Mortgage, from the taxable value of all
or any part of the Mortgaged Property. It is expressly agreed that no credit
shall be claimed or allowed on the interest payable on the Note because of any
taxes or other charges paid.
6. Mortgagee's Right to Require Deposit of Certain Sums. At Mortgagee's request,
after the occurrence and during the continuance of an Event of Default,
Mortgagor shall deposit with Mortgagee, monthly, an amount equal to one-twelfth
(1/12) of the annual premiums for the insurance policies referred to in
paragraph 4 hereof and the annual real estate taxes, water and sewer rents, any
special assessments, charges or claims and any other item which at any time may
be or become a lien upon the Mortgaged Property prior to the lien of this
Mortgage; and on demand from time to time Mortgagor shall pay to Mortgagee any
additional sums necessary to pay the premiums and other items, all as estimated
by Mortgagee. Mortgagor hereby pledges the funds deposited hereunder to
Mortgagee as additional security for the obligations secured hereby. Unless
there shall have occurred an Event of Default, or any event or condition which,
with the giving of notice or passage of time, or both, could become an Event of
Default, Mortgagee shall apply the funds deposited hereunder to payment of said
taxes, assessments and insurance premiums. Mortgagee shall pay no interest to
Mortgagor on any funds deposited pursuant hereto, and may retain any income
therefrom for its own benefit. Mortgagee may commingle such funds with its
general funds. Mortgagee's acceptance of and holding of such deposits is not
intended to create any fiduciary relationship between Mortgagee and Mortgagor;
nor has Mortgagee by holding such payments consented to act as Mortgagor's agent
for the payment of taxes, assessments, water and sewer charges or insurance
premiums. In the event that title to the Mortgaged Property or any part thereof
passes, subject to the lien of this Mortgage, to any party either by action of
Mortgagor or any other person or by operation of law or by order of court or
otherwise in any manner whatsoever, Mortgagor's rights in the funds held by
Mortgagee pursuant hereto (or in such pro rata part of such funds as Mortgagee
shall reasonably determine if the transfer is of less than all the Mortgaged
Property) shall pass to the transferee of the Mortgaged Property. Upon any
assignment or other transfer of this Mortgage by Mortgagee, any deposits then
held by Mortgagee shall automatically be deemed to be assigned to the transferee
thereof, and Mortgagee shall have no further liability to Mortgagor therefor.
7. Corporate Existence and Taxes. If Mortgagor or any successor or grantee of
Mortgagor is a corporation, it shall keep in effect its existence and rights as
a corporation under the laws of the state of its incorporation and its right to
own property and transact business in the state in which the Real Estate is
situated during the entire time that it has any ownership interest in the Real
Estate. For all periods during which title to the Mortgaged Property or any part
thereof shall be held by a corporation or association subject to corporate taxes
or taxes similar to corporate taxes, Mortgagor shall file returns for such taxes
with the proper authorities, bureaus or departments and it shall pay, when due
and payable and before interest or penalties are due thereon, all taxes owing by
Mortgagor to the United States, to such state of incorporation and to the state
in which the Real Estate is situated and any political subdivision thereof, and,
at Mortgagee's request, shall produce to Mortgagee receipts showing payment of
any and all such taxes, charges or assessments prior to the last dates upon
which such taxes, charges or assessments are payable without interest or penalty
charges, and within ten (10) days of receipt thereof all notices of settlements,
notices of deficiency or overassessment and any other notices pertaining to
Mortgagor's tax liability, which may be issued by the United States, such state
of incorporation, the state in which the Real Estate is situated or any
political subdivision thereof.
8. Documentary and Other Stamps. If at any time the United States, the state in
which the Real Estate is located or any political subdivision thereof, or any
department or bureau of any of the foregoing shall require documentary, revenue
or other stamps on the Note or this Mortgage, Mortgagor on demand shall pay for
them together with any interest or penalties payable thereon.
9. Other Taxes. If any law or ordinance now or hereafter imposes a tax directly
or indirectly on Mortgagee with respect to the Mortgaged Property, the value of
Mortgagor's equity therein, or the indebtedness evidenced by the Note and
secured by this Mortgage, Mortgagor shall promptly pay such tax. If Mortgagor
fails to pay such tax or if Mortgagor is not lawfully permitted to pay such tax
or to reimburse Mortgagee for amounts advanced on account of such payment,
Mortgagee, at its election, shall have the right at any time to give Mortgagor
written notice declaring that the principal debt, with interest and other
appropriate charges, shall be due on a specified date not less than sixty (60)
days thereafter; provided, however, that such election shall be ineffective if,
prior to the specified date, Mortgagor lawfully pays the tax (in addition to all
other payments required hereunder) or reimburses Mortgagee for amounts advanced
and agrees to pay the tax whenever it becomes due and payable thereafter, which
agreement shall then constitute a part of this Mortgage.
10. Security Agreement. This Mortgage constitutes a security agreement under the
Uniform Commercial Code and creates a security interest in all that property
(and the proceeds thereof) included in the Mortgaged Property which might
otherwise be deemed "personal property". Upon filing this Mortgage in the office
of the recorder of deeds in and for Northampton County, Pennsylvania, this
Mortgage shall also be effective as a financing statement filed in such office
as a fixture filing. Mortgagor shall execute, deliver, file and refile any
financing statements, continuation statements or other security agreements
Mortgagee may require from time to time to confirm the lien of this Mortgage
with respect to such property. Without limiting the foregoing, Mortgagor hereby
irrevocably appoints Mortgagee attorney-in-fact for Mortgagor to execute,
deliver and file such instruments for and on behalf of Mortgagor. All costs of
such filing and refiling shall be paid by Mortgagor. Mortgagor shall not change
its principal place of business without giving Mortgagee at least thirty (30)
days' prior written notice thereof, which notice shall be accompanied by new
financing statements executed by Mortgagor in the same form as the financing
statements delivered to Mortgagee on the date hereof except for the change of
address; provided, however, that if the standard form accepted by the
Commonwealth of Pennsylvania for such financing statements has changed, then
such new financing statements shall be in such new form. Upon any Event of
Default hereunder or under the Note, Mortgagee shall have in addition to any
other rights and remedies hereunder or under the Note, all of the rights and
remedies granted to a secured party under the Uniform Commercial Code with
respect to all personal property. To the extent permitted by law, the items set
forth on the financing statements shall be treated as part of the Real Estate
regardless of the fact that such items are set forth in the financing
statements. Such items are contained in the financing statements to create a
security interest in favor of Mortgagee in the event such items are determined
to be personal property under the law. Notwithstanding any release of any or all
of that property included in the Mortgaged Property which is deemed "real
property", any proceedings to foreclose this Mortgage or its satisfaction of
record, the terms hereof shall survive as a security agreement with respect to
the security interest created hereby and referred to above until the repayment
or satisfaction in full of the obligations of Mortgagor as are now or hereafter
evidenced by the Note.
11. Compliance with Law and Regulations. Mortgagor shall comply with all laws,
ordinances, regulations and orders of all federal, state, municipal and other
governmental authorities relating to the Mortgaged Property.
12. Inspection. Mortgagee and any persons authorized by Mortgagee shall have the
right at any time, upon reasonable notice to Mortgagor, to enter the Real Estate
at a reasonable hour and to inspect and photograph its condition and state of
repair.
13. Declaration of No Set-Off. Within one (1) week after requested to do so by
Mortgagee, Mortgagor shall certify to Mortgagee or to any proposed assignee of
this Mortgage, in a writing duly acknowledged, the amount of principal, interest
and other charges then owing on the obligation secured by this Mortgage and by
prior liens, if any, and whether there are any set-offs or defenses against
them.
14. Required Notices. Mortgagor shall notify Mortgagee promptly of the
occurrence of any of the following:
(a) a fire or other casualty causing damage to any of
the Mortgaged Property;
(b) receipt of notice of eminent domain proceedings or
condemnation of all or any part of the Mortgaged Property;
(c) receipt of notice from any governmental authority relating to the structure,
use or occupancy of the Mortgaged Property or any real property adjacent to the
Real Estate;
(d) receipt of any default or termination notice from
any tenant of all or any portion of the Mortgaged Property;
(e) substantial change in the occupancy of the
Mortgaged Property;
(f) receipt of any default or acceleration notice from
the holder of any lien or security interest in the Mortgaged
Property; or
(g) commencement of any material litigation affecting
the Mortgaged Property.
15. Condemnation.
(a) In the event of any condemnation or taking of any part of the Mortgaged
Property by eminent domain, alteration of the grade of any street, or other
injury to or decrease in the value of the Mortgaged Property by any public or
quasi-public authority or corporation, all proceeds (that is, the award or
agreed compensation for the damages sustained) allocable to Mortgagor, after
deducting therefrom all costs and expenses (regardless of the particular nature
thereof and whether incurred with or without suit) including but not limited to
attorney's fees incurred by Mortgagee in connection with the collection of such
proceeds, shall be applied as set forth in this paragraph 15, subject only to
any prior claim of the holder of a prior lien approved by Mortgagee. No
settlement for the damages sustained shall be made by Mortgagor without
Mortgagee's prior written approval, which shall not be unreasonably withheld.
Receipt by Mortgagee of any proceeds less than the full amount of the then
outstanding debt shall not alter or modify Mortgagor's obligation to continue to
pay the installments of principal, interest and other charges specified in the
Note and herein. All proceeds, after the aforesaid deductions, shall be applied
in the order and in the amounts that Mortgagee, in Mortgagee's sole discretion,
may elect, to payment of the principal (whether or not then due and payable),
interest or any sums secured by this Mortgage, or, on such reasonable terms as
Mortgagee may specify, to payment of the costs of altering, restoring or
rebuilding any part of the Mortgaged Property which may have been altered,
damaged or destroyed as a result of the taking, alteration of grade or other
injury to the Mortgaged Property.
(b) If following such condemnation or taking, but prior to the receipt of such
proceeds by Mortgagee, the Mortgaged Property shall have been sold on
foreclosure of this Mortgage, Mortgagee shall have the right to receive the
proceeds to the extent of:
(i) the full amount of all such proceeds if
Mortgagee is the successful purchaser at the foreclosure sale, or
(ii) if any one other than Mortgagee is the successful purchaser at the
foreclosure sale, any deficiency (as hereinafter defined) due to Mortgagee in
connection with the foreclosure sale, with legal interest thereon, and
reasonable counsel fees, costs and disbursements incurred by Mortgagee in
connection with collection of such proceeds and the establishment of such
deficiency. For purposes of this subparagraph 15(b)(ii), the word "deficiency"
shall be deemed to mean the difference between (A) the net sale proceeds
actually received by Mortgagee as a result of such foreclosure sale less any
costs and expenses incurred by Mortgagee in connection with enforcement of its
rights under the Note, this Mortgage and the other security instruments and (B)
the aggregate amount of all sums which Mortgagee is entitled to collect under
the Note, this Mortgage and the other security instruments.
(c) If the proceeds of the initial award of damages for the condemnation or
taking are insufficient to pay in full the indebtedness and all other amounts
secured hereby, Mortgagee shall have the right to prosecute to final
determination or settlement an appeal or other appropriate proceedings in the
name of Mortgagee or Mortgagor, for which Mortgagee is hereby appointed
irrevocably as attorney-in-fact for Mortgagor, which appointment, being for
security, is irrevocable. In that event, the expenses of the proceedings,
including reasonable counsel fees, shall be paid first out of the proceeds, and
only the excess, if any, paid to Mortgagee shall be credited against the amounts
due under this Mortgage.
(d) Nothing herein shall limit the rights otherwise available to Mortgagee, at
law or in equity, including but not limited to the right to intervene as a party
to any condemnation proceeding.
16. Completion of Construction. Mortgagor shall complete and, within a
reasonable time, shall pay for any construction which is commenced at any time
on the Land, free of any mechanics' liens or other liens.
17. Leases. Mortgagor hereby represents that there are no leases or agreements
to lease all or any part of the Mortgaged Property now in effect. Mortgagor
agrees not to enter into any leases or agreements to lease all or any part of
the Mortgaged Property without the prior written approval thereof by Mortgagee.
18. Environmental Representations, Warranties and Covenants.
(a) Compliance with Law.
(i) Mortgagor represents, to the best of its knowledge and reasonable belief,
that no activity at the Mortgaged Property has been conducted, and represents
and warrants that no activity is being conducted, except in compliance with all
statutes, ordinances, regulations, orders and requirements of common law
concerning (A) those activities, (B) repairs or construction of any
improvements, (C) handling of any materials, (D) discharges to the air, soil,
surface water or ground water and (E) storage, treatment or disposal of any
waste at or connected with any activity at the Mortgaged Property (collectively,
"Environmental Statutes").
(ii) Mortgagor shall cause all activities at the Mortgaged Property to be
conducted in compliance with all Environmental Statutes. Mortgagor shall cause
all permits, licenses or approvals to be obtained, and shall cause all
notifications to be made, as required by Environmental Statutes. Mortgagor
shall, at all times, cause compliance with the terms and conditions of any such
approvals or notifications.
(iii) Mortgagor shall, upon receipt thereof, provide to Mortgagee copies of:
(A) applications or other materials submitted to any governmental agency in
compliance with Environmental Statutes;
(B) any notifications submitted to any person pursuant to
Environmental Statutes;
(C) any permit, license, approval, amendment or modification thereto granted
pursuant to Environmental Statutes;
(D) any record or manifest required to be maintained pursuant to Environmental
Statutes; and
(E) any correspondence, notice of violation, summons, order, complaint or other
document received by Mortgagor, its lessees, sublessees or assigns, pertaining
to compliance with any Environmental Statutes.
(b) Site Contamination.
(i) Mortgagor represents, to the best of its knowledge and reasonable belief,
that there is no contamination on or in the Mortgaged Property. Mortgagor shall
not permit contamination of Mortgaged Property by hazardous substances.
Mortgagor shall, at all times cause hazardous substances to be handled on the
Mortgaged Property in a manner which will not cause an undue risk of
contamination of the Mortgaged Property.
(ii) For purposes of this section, the term "contamination" shall mean the
uncontained presence of hazardous substances at the Mortgaged Property, or
arising from the Mortgaged Property, which may require remediation under any
applicable law.
(iii) For purposes of this section, "hazardous
substances" shall mean "hazardous substances" or "contaminants"
as defined pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. xx.xx. 9601-9675, as
amended by the Superfund Amendments and Reauthorization Act of
1986, Pub. L. Xx. 00-000, 000 Xxxx. 0000 (Xxx. 17, 1986),
"regulated substances" within the meaning of subtitle I of the
Resource Conservation and Recovery Act, 42 U.S.C. xx.xx. 6991-6991i,
as amended by the Superfund Amendments and Reauthorization Act of
1986, Pub. L. Xx. 00-000, 000 Xxxx. 0000 (Xxx. 17, 1986), and
"hazardous wastes" or "hazardous substances" as defined pursuant
to the Pennsylvania Solid Waste Management Act, Pa. Stat. Xxx.
tit. 35, xx.xx. 6018.101 to .1003 (Xxxxxx Supp. 1987), or any other
substances which may be the subject of liability pursuant to
Sections 316 or 401 of the Pennsylvania Clean Streams Law, Pa.
Stat. Xxx. tit. 35, xx.xx. 691.1 to .1001 (Xxxxxx 1977 and Supp.
1987).
(c) Other Hazardous or Toxic Materials.
Mortgagor represents and warrants that, to the best of its knowledge and
reasonable belief, there are no:
(i) polychlorinated biphenyls or substances
containing polychlorinated biphenyls present on or in the
Mortgaged Property;
(ii) asbestos or materials containing asbestos
present on or in the Mortgaged Property, or
(iii) urea formaldehyde foam insulation on or
in the Mortgaged Property.
(d) Environmentally Sensitive Areas.
Mortgagor represents and warrants that no portion of the Mortgaged Property
constitutes any of the following "Environmentally Sensitive Areas":
(i) a wetland or other "water of the United States" for purposes of Section 404
of the federal Clean Water Act, 33 U.S.C. ss. 1344, or any similar area
regulated under any state law;
(ii) a floodplain or other flood hazard area as
defined pursuant to the Pennsylvania Flood Plain Management Act,
Pa. Stat. Xxx. tit. 32, xx.xx. 679.101 to .601 (Xxxxxx Supp. 1987);
(iii) a portion of the coastal zone for
purposes of the federal Coastal Zone Management Act, 16 U.S.C.
xx.xx. 1451-1464; or
(iv) any other area development of which is specifically restricted under
applicable law by reason of its physical characteristics or prior use.
(e) Radon.
(i) Mortgagor represents that, to the best of its knowledge and reasonable
belief, there is no investigation of the Mortgaged Property for the presence of
radon gas or the presence of the radioactive decay products of radon.
(ii) Mortgagor shall cause all construction of new structures on the Mortgaged
Property to use design features which safeguard against or mitigate the
accumulation of radon on radon-products in concentrations exceeding an
acceptable level in any such new structure. At the earliest feasible time during
or after construction of any new structure on the Mortgaged Property, Mortgagor
shall commission an investigation of such new structure for the presence of
radon or radon-products and shall provide a report of such investigation to
Mortgagee.
(iii) For purposes of this paragraph, "acceptable level" shall mean the lowest
applicable maximum concentration established by any governmental agency with
jurisdiction over the Mortgaged Property. In the absence of a legally binding
maximum concentration, the "acceptable level" shall be an air concentration of 4
picocuries/liter. (f) Tanks.
(i) Mortgagor represents and warrants there are no tanks presently or formerly
used for the storage of any liquid or gas above or below ground are present on
the Mortgaged Property.
(ii) Mortgagor shall neither install nor permit to be installed any temporary or
permanent tanks for the storage of any liquid or gas above or below ground
except as in compliance with the other provisions of this section and after
obtaining written permission to do so from Mortgagee.
19. Environmental Investigations.
(a) Mortgagee may, at its discretion, at any time or from time to time,
commission an investigation at Mortgagor's expense (after the occurrence of an
Event of Default, if Mortgagee reasonably believes the existence of a violation
of Environmental Statutes, or receipt by Mortgagor of any notice described at
Subparagraph 18(a)(iii) of this Mortgage) of (i) compliance at the Mortgaged
Property with Environmental Statutes, (ii) the presence of hazardous substances
or contamination in the Mortgaged Property, (iii) the presence in the Mortgaged
Property of materials which are the subject of Paragraph 18(c), (iv) the
presence at the Mortgaged Property of Environmentally Sensitive Areas which are
the subject of Paragraph 18(d), (v) the presence at the Mortgaged Property of
radon-products, or (vi) the presence on the Mortgaged Property of tanks which
are the subject of Paragraph 18(f).
(b) In connection with any investigation pursuant to Subparagraph (a) of this
Paragraph 19, Mortgagor, its lessees, sublessees and assigns, shall comply with
any reasonable request for information made by Mortgagee or its agents in
connection with any such investigation. Mortgagor represents and warrants that
any response to any such request for information will be full and complete.
(c) Mortgagor will assist Mortgagee and its agents in obtaining any records
pertaining to the Mortgaged Property or to Mortgagor and the lessees, sublessees
or assigns of Mortgagor in connection with an investigation pursuant to
Subparagraph (a) of this Paragraph 19.
(d) Mortgagor will accord Mortgagee and its agents access to all areas of the
Mortgaged Property at reasonable times and in reasonable manners in connection
with any investigation pursuant to Subparagraph (a) of this Paragraph 19.
(e) No investigation commissioned pursuant to this paragraph shall have any
effect upon the representations or warranties made by Mortgagor to Mortgagee in
this Mortgage.
20. Indemnification. Mortgagor hereby agrees to indemnify Mortgagee and to hold
Mortgagee harmless of, from and against any and all expenses, loss or liability
suffered by Mortgagee by reason of Mortgagor's breach of any of the provisions
of this Section, including, but not limited to, (i) any and all expenses that
Mortgagee may incur in complying with any Environmental Statutes; (ii) any and
all costs that Mortgagee may incur in studying or remedying any contamination of
the Mortgaged Property; (iii) any and all fines, penalties or other sanctions
(including a voiding of any transfer of the Mortgaged Property) assessed upon
Mortgagee by reason of a failure of Mortgagee to have complied with
Environmental Statutes; (iv) any and all loss of value of the Mortgaged Property
by reason of (A) failure to comply with Environmental Statutes; (B) the presence
on the Mortgaged Property of any Hazardous Substances; (C) the presence on the
Mortgaged Property of any materials which are the subject of paragraph (c) of
Section 18; (D) the presence on the Mortgaged Property of any Environmentally
Sensitive Areas which are the subject of paragraph (d) of Section 18; (E) the
presence on the Mortgaged Property of radon or radon decay products in
concentrations not disclosed pursuant to paragraph (e) of Section 18; or (F) the
presence on the Mortgaged Property of any tank undisclosed pursuant to Paragraph
(f)(i) and not installed in compliance with Paragraph (f)(ii) of Section 18; and
(v) any and all legal and professional fees and costs incurred by Mortgagee in
connection with the foregoing. This indemnification shall survive payment of the
Note.
21. Other Financing or Liens.
(a) Mortgagee may, at its sole option, declare the entire unpaid balance of the
principal of and the accrued interest on the Note and all other sums secured by
this Mortgage immediately due and payable if Mortgagor, without the prior
written consent of Mortgagee, shall (i) lease any personal property, as lessee,
which is now or hereafter intended to be a part of the Mortgaged Property or is
necessary for the operation of Mortgagor's business at the Land, or (ii) create
or cause or permit to exist any lien on, or security interest in the Mortgaged
Property, including any furniture, fixtures, appliances, equipment or other
items of personal property which are intended to be or become part of the
Mortgaged Property, except the lien created hereby and any other liens granted
to or heretofore approved by Mortgagee including, without limitation, a lien in
favor of the Pennsylvania Industrial Development Authority to secure a loan
(through the auspices of the Northampton County New Jobs Corp.) to Mortgagor in
the amount of One Million ($1,000,000.00) Dollars, or (iii) incur any
indebtedness for money borrowed to purchase the Mortgaged Property or any part
thereof or any personal property or fixtures in substitution, renewal or
replacement of any portion of the Mortgaged Property, except the indebtedness
secured hereby and indebtedness heretofore approved by Mortgagee.
(b) Mortgagee may, at its sole option, declare the entire unpaid balance of the
principal of and the accrued interest on the Note and all other sums secured by
this Mortgage immediately due and payable if any lien or encumbrance of any
type, whether voluntary or involuntary, shall be permitted to be filed or
entered against all or any part of the Mortgaged Property without the prior
written consent of Mortgagee.
(c) Mortgagor shall have no right to permit the holder of any subordinate
mortgage or other subordinate lien, whether or not consented to by Mortgagee, to
terminate any lease of all or a portion of the Mortgaged Property whether or not
such lease is subordinate (whether by law or the terms of such lease or a
separate agreement) to the lien of this Mortgage without first obtaining the
prior written consent of Mortgagee. The holder of any subordinate mortgage or
other subordinate lien shall have no such right, whether by foreclosure of its
mortgage or lien or otherwise, to terminate any such lease, whether or not
permitted to do so by Mortgagor or as a matter of law, and any such attempt to
terminate any such lease shall be ineffective and void without first obtaining
the prior written consent of Mortgagee.
(d) In the event that the Mortgaged Property or any part thereof is now or
hereafter subject to a prior mortgage, lien or encumbrance, which has been
approved by Mortgagee ("Approved Prior Lien"):
(i) Mortgagor will pay the principal, interest and all other sums when due and
payable thereunder no later than five (5) days prior to their due date, and will
comply with all of the other terms, covenants and conditions thereof; and
(ii) if requested hereafter by Mortgagee, Mortgagor will produce to Mortgagee
from time to time no less than three (3) days prior to the due date of the
installments of principal, interest and other sums payable on the Approved Prior
Lien, receipts or other evidence of payment thereof satisfactory to Mortgagee;
and
(iii) Mortgagor will not enter into any modification, amendment, agreement or
arrangement, without the prior written consent of Mortgagee, pursuant to which
Mortgagor is granted any forbearance or indulgence (as to time or amount) in the
payment of any principal, interest or other sums due in accordance with the
terms and provisions of the Approved Prior Lien; and
(iv) Mortgagor will obtain, whenever possible, the agreement of the holder of
any such Approved Prior Lien to send Mortgagee copies of all notices; and
(v) Mortgagor shall notify Mortgagee promptly of the receipt of any notice given
by the holder of any Approved Prior Lien.
(e) Any default by Mortgagor under any Approved Prior Lien, by failure to make
payment or otherwise to comply with the terms thereof, or any failure by
Mortgagor to produce receipts, at the option of Mortgagee, shall constitute an
Event of Default under this Mortgage, and Mortgagee shall have the right, at its
election, to declare immediately due and payable the entire indebtedness secured
hereby with interest and other appropriate charges. Mortgagee, at its election,
and without notice to Mortgagor, may make, but shall not be obligated to make,
any payments which Mortgagor has failed to make under the Approved Prior Lien,
but such payments by Mortgagee shall not release Mortgagor from Mortgagor's
obligations or constitute a waiver of Mortgagor's default hereunder.
22. Management. Mortgagor shall not enter into any agreement for the management
or operation of all or part of the Mortgaged Property without (i) furnishing to
Mortgagee a copy thereof together with such financial and other information in
respect of the managing party as Mortgagee may reasonably request and (ii)
receiving Mortgagee's prior written consent thereto, such consent not to be
unreasonably withheld. As security for the indebtedness and other obligations
secured by this Mortgage, Mortgagor hereby grants to Mortgagee a security
interest in all of its rights under any agreement for the management or
operation of all or part of the Mortgaged Property, now existing or hereafter
created. All such agreements shall recite that Mortgagor's rights (but not
Mortgagor's obligations) thereunder have been assigned to Mortgagee as security
for Mortgagor's obligations hereunder and under the Note.
23. Acceleration upon Transfer. Mortgagee may, at its sole option, declare the
entire unpaid balance of the principal of and the accrued interest on the Note
and all other sums secured by this Mortgage immediately due and payable if
Mortgagor, without the prior written consent of Mortgagee, shall cause or
permit, to the extent it may do so, any transfer of title to or beneficial
interest in the Mortgaged Property or any part thereof, voluntarily or by
operation of law (other by execution on the Note or foreclosure under this
Mortgage).
24. Right to Remedy Defaults. If Mortgagor should fail to pay corporate taxes,
real estate taxes or other taxes, assessments, water and sewer rents, charges
and claims, sums due under any prior lien or Approved Prior Lien or insurance
premiums, or fail to complete construction of any improvements or make necessary
repairs, or permit waste, or fail to cure any default under any prior lien or
Approved Prior Lien, Mortgagee, at its election and without notice to Mortgagor,
shall have the right to make any payment or expenditure and to take any action
which Mortgagor should have made or taken, or which Mortgagee deems advisable to
protect the security of this Mortgage or the Mortgaged Property, without
prejudice to any of Mortgagee's rights or remedies available hereunder or
otherwise, at law or in equity. All such sums, as well as costs, advanced by
Mortgagee pursuant to this Mortgage shall be due immediately from Mortgagor to
Mortgagee, shall be secured hereby and the lien thereof shall relate back to the
date of this Mortgage, and shall bear interest from the date of payment by
Mortgagee until the date of repayment at a rate equal to the lesser of (i) a
rate five percent (5%) above the rate specified in the Note or (ii) the highest
rate permitted by applicable law.
25. Events of Default. The occurrence of an Event of Default as defined in the
Reimbursement Agreement or the Syndicated Loan Agreement shall constitute an
event of default ("Event of Default") hereunder.
26. Remedies.
(a) Upon the occurrence of any Event of Default, the entire unpaid balance of
the principal of and the accrued interest on the Note and all other sums secured
by this Mortgage shall become immediately due and payable, at the option of
Mortgagee, without notice or demand, and Mortgagee may do one or more of the
following: (i) Foreclosure. Mortgagee may institute an action of mortgage
foreclosure against the Mortgaged Property, or take such other action at law or
in equity for the enforcement of this Mortgage and realization on the mortgage
security or any other security herein or elsewhere provided for, as the law may
allow, and may proceed therein to final judgment and execution for the entire
unpaid balance of the principal debt, with interest at the rate stipulated in
the Note to the date of default, and thereafter at a rate equal to the lesser of
a rate five percent (5%) above the rate specified in the Note or the highest
rate permitted by applicable law, together with all other sums due by Mortgagor
in accordance with the provisions of the Note and this Mortgage, including all
sums which may have been loaned by Mortgagee to Mortgagor after the date of this
Mortgage, and all sums which may have been advanced by Mortgagee for taxes,
water or sewer rents, charges or claims, payments on prior liens, insurance or
construction of improvements or repairs to the Mortgaged Property (whether
incurred before or after the entry of judgment in favor of Mortgagee for the
unpaid balance of the amounts due under the Note or this Mortgage), all costs of
suit, together with interest at said rate on any judgment obtained by Mortgagee
from and after the date of any Sheriff's sale until actual payment is made by
the Sheriff of the full amount due Mortgagee, and an attorney's commission for
collection.
(ii) Possession. Mortgagee may enter into possession of the Mortgaged Property,
with or without legal action, and by force if necessary; collect therefrom all
rentals (which term shall also include sums payable for use and occupation) and,
after deducting all costs of collection and administration expense, apply the
net rentals to any or all of the following in such order and amounts as
Mortgagee, in Mortgagee's sole discretion, may elect: to the payment of any sums
due under any prior lien, and to the payment of taxes, water and sewer rents,
charges and claims, insurance premiums, and all other carrying charges, and to
the completion of construction of any improvements on the Land, and to the
maintenance, repair or restoration of the Mortgaged Property, and on account and
in reduction of the principal or interest, or both, hereby secured; in and for
that purpose Mortgagor hereby confirms the assignment to Mortgagee of all
rentals due and to become due under any lease or leases or rights to use and
occupation of the Mortgaged Property hereafter created, as well as all rights
and remedies provided in such lease or leases or at law or in equity for the
collection of the rentals. The taking of possession and collection of rents by
Mortgagee shall not be construed to be an affirmation of any lease of all or any
portion of the Mortgaged Property. FOR THE PURPOSE OF OBTAINING POSSESSION OF
THE MORTGAGED PROPERTY IN THE EVENT OF ANY EVENT OF ANY DEFAULT HEREUNDER OR
UNDER THE NOTE, MORTGAGOR HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY
COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY
FOR MORTGAGOR AND ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGOR, TO APPEAR FOR
AND CONFESS JUDGMENT AGAINST MORTGAGOR, AND AGAINST ALL PERSONS CLAIMING UNDER
OR THROUGH MORTGAGOR, IN AN ACTION IN EJECTMENT FOR POSSESSION OF THE MORTGAGED
PROPERTY, IN FAVOR OF MORTGAGEE, FOR WHICH THIS MORTGAGE, OR A COPY THEREOF
VERIFIED BY AFFIDAVIT, SHALL BE A SUFFICIENT WARRANT; AND THEREUPON A WRIT OF
POSSESSION MAY IMMEDIATELY ISSUE FOR POSSESSION OF THE MORTGAGED PROPERTY,
WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND WITHOUT ANY STAY OF
EXECUTION. IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN COMMENCED IT SHALL BE
DISCONTINUED, OR POSSESSION OF THE MORTGAGED PROPERTY SHALL REMAIN IN OR BE
RESTORED TO MORTGAGOR, MORTGAGEE SHALL HAVE THE RIGHT FOR THE SAME DEFAULT OR
ANY SUBSEQUENT DEFAULT TO BRING ONE OR MORE FURTHER ACTIONS AS ABOVE PROVIDED TO
RECOVER POSSESSION OF THE MORTGAGED PROPERTY. MORTGAGEE MAY CONFESS JUDGMENT IN
AN ACTION IN EJECTMENT BEFORE OR AFTER THE INSTITUTION OF PROCEEDINGS TO
FORECLOSE THIS MORTGAGE OR TO ENFORCE THE NOTE, OR AFTER ENTRY OF JUDGMENT
THEREIN OR ON THE NOTE, OR AFTER A SHERIFF'S SALE OR JUDICIAL SALE OR OTHER
FORECLOSURE SALE OF THE MORTGAGED PROPERTY IN WHICH MORTGAGEE IS THE SUCCESSFUL
BIDDER, IT BEING THE UNDERSTANDING OF THE PARTIES THAT THE AUTHORIZATION TO
PURSUE SUCH PROCEEDINGS FOR CONFESSION OF JUDGMENT THEREIN IS AN ESSENTIAL PART
OF THE REMEDIES FOR ENFORCEMENT OF THE MORTGAGE AND THE NOTE, AND SHALL SURVIVE
ANY EXECUTION SALE TO MORTGAGEE.
(iii) Receiver. Mortgagee may apply for the appointment of a receiver of the
Mortgaged Property and/or the rents from the Mortgaged Property, without notice
except as required by law, and shall be entitled to the appointment of a
receiver as a matter of right, without consideration of value of the Mortgaged
Property, the solvency of the person liable for the payment of the Note or the
effect of the receivership on the operation of the Mortgaged Property or the
Mortgagor's business thereon. Mortgagor acknowledges that this paragraph was
specifically included in this Mortgage to induce the Mortgagee to issue the
Letter of Credit.
(b) Mortgagee shall have the right, from time to time, to bring an appropriate
action to recover any sums required to be paid by Mortgagor under the terms of
this Mortgage, as they become due, without regard to whether or not the
principal indebtedness or any other sums secured by the Note or this Mortgage
shall be due, and without prejudice to the right of Mortgagee thereafter to
bring an action of mortgage foreclosure, or any other action, for any default by
Mortgagor existing at the time the earlier action was commenced.
(c) Any real estate sold pursuant to any writ of execution issued on a judgment
obtained by virtue of the Note or this Mortgage, or pursuant to any other
judicial proceedings under this Mortgage, may be sold in one parcel, as an
entirety, or in such parcels, and in such manner or order as Mortgagee, in its
sole discretion, may elect.
(d) Mortgagee shall have the right to set off all or any part of any amount due
by Mortgagor to Mortgagee under the Note, this Mortgage or otherwise, against
any indebtedness, liabilities or obligations owing by Mortgagee for any reason
and in any capacity to Mortgagor, including any obligation to disburse to
Mortgagor or its designee any funds or other property on deposit with or
otherwise in the possession, control or custody of Mortgagee.
27. Rights and Remedies Cumulative.
(a) The rights and remedies of Mortgagee as provided in this Mortgage, in the
Note and the Reimbursement Agreement and in the warrants attached thereto or
contained therein shall be cumulative and concurrent; may be pursued separately,
successively or together against Mortgagor or against the Mortgaged Property, or
both, at the sole discretion of Mortgagee, and may be exercised as often as
occasion therefor shall arise. The failure to exercise any such right or remedy
shall in no event be construed as a waiver or release thereof.
(b) Any failure by Mortgagee to insist upon strict performance by Mortgagor of
any of the terms and provisions of this Mortgage or of the Note or the
Reimbursement Agreement shall not be deemed to be a waiver of any of the terms
or provisions of this Mortgage or the Note or the Reimbursement Agreement, and
Mortgagee shall have the right thereafter to insist upon strict performance by
Mortgagor of any and all of them.
(c) Neither Mortgagor nor any other person now or hereafter obligated for
payment of all or any part of the sums now or hereafter secured by this Mortgage
shall be relieved of such obligation by reason of the failure of Mortgagee to
comply with any request of Mortgagor or of any other person so obligated to take
action to foreclose on this Mortgage or otherwise enforce any provisions of this
Mortgage or the Note, or by reason of the release, regardless of consideration,
of all or any part of the security held for the indebtedness secured by this
Mortgage, or by reason of any agreement or stipulation between any subsequent
owner of the Mortgaged Property and Mortgagee extending the time of payment or
modifying the terms of this Mortgage or the Note without first having obtained
the consent of Mortgagor or such other person; and in the latter event Mortgagor
and all such other persons shall continue to be liable to make payments
according to the terms of any such extension or modification agreement, unless
expressly released and discharged in writing by Mortgagee.
(d) Mortgagee may release, regardless of consideration, any part of the security
held for the indebtedness secured by this Mortgage without, as to the remainder
of the security, in any way impairing or affecting the lien of this Mortgage or
its priority over any subordinate lien.
(e) For payment of the indebtedness secured hereby, Mortgagee may resort to any
other security therefor held by Mortgagee in such order and manner as Mortgagee
may elect.
(f) The receipt by Mortgagee of any sums from Mortgagor after the date on which
Mortgagee elects to accelerate the indebtedness secured hereby by reason of a
default hereunder or under the Note shall not constitute a cure or waiver of
such default or a reinstatement of the Note or this Mortgage unless Mortgagee
expressly agrees, by written notice to Mortgagor, that such payment shall be
accepted as a cure or waiver of the default.
28. Mortgagor's Waivers. Mortgagor hereby waives and releases:
(a) all procedural errors, defects and imperfections
in any proceeding instituted by Mortgagee under the Note or this
Mortgage or both;
(b) all benefit that might accrue to Mortgagor by virtue of any present or
future law exempting the Mortgaged Property, or any part of the proceeds arising
from any sale thereof, from attachment, levy or sale or execution, or providing
for any stay of execution, exemption from civil process or extension of time for
payment; and
(c) unless specifically required herein or in any other agreement of Mortgagee
delivered in connection herewith, all notices of Mortgagor's default or of
Mortgagee's election to exercise, or Mortgagee's actual exercise of, any option
under the Note or this Mortgage.
Mortgagor irrevocably as an independent covenant waives a jury trial and the
right thereto in any action or proceeding between Mortgagor and Mortgagee
whether hereunder or otherwise.
29. Counsel Fees. If Mortgagee becomes a party to any suit or proceeding
affecting the Mortgaged Property or title thereto, the lien created by this
Mortgage or Mortgagee's interest therein, or if Mortgagee has engaged counsel to
prepare or review the Note, this Mortgage or any other documents securing the
Note as a condition precedent to the granting of the loan evidenced by the Note
and whose fees and costs Mortgagor has agreed to pay as a condition of
Mortgagee's commitment to make this loan, or if Mortgagee engages counsel to
collect any of the indebtedness or to enforce performance of the agreements,
conditions, covenants, provisions or stipulations of this Mortgage or the Note,
Mortgagee's costs, expenses and reasonable counsel fees, whether or not suit is
instituted, shall be paid to Mortgagee by Mortgagor, on demand, with interest at
the then effective rate set forth in the Note, and until paid they shall be
deemed to be part of the indebtedness evidenced by the Note and secured by this
Mortgage.
30. Further Assurances. Mortgagor will execute and deliver such further
instruments and perform such further acts as may be reasonably requested by
Mortgagee from time to time to confirm the provisions of this Mortgage or the
Note, to carry out more effectively the purposes of this Mortgage or the other
documents securing the Note, or to confirm the priority of the lien created by
this Mortgage on any property, rights or interest encumbered or intended to be
encumbered by the lien of this Mortgage or the other documents securing the
Note. Mortgagor agrees to pay all costs of recording, filing, and acknowledging
such documents in such public offices as Mortgagee may require. 31. Advance
Money Mortgage.
(a) This Mortgage secures future advances made pursuant to this Mortgage or
pursuant to the Reimbursement Agreement. Without limiting the foregoing, this
Mortgage secures all advances made by Mortgagee of any kind or nature described
in 42 Pa. C.S.A. ss. 8144.
(b) If Mortgagor sends a written notice to Mortgagee which purports to limit the
indebtedness secured by this Mortgage and to release the obligation of Mortgagee
to make any additional advances to or for the benefit of Mortgagor, such a
notice shall be ineffective as to any future advances made: (i) to enable
completion of the improvements on the Land for which the loan secured hereby was
originally made; (ii) to pay taxes, assessments, maintenance charges and
insurance premiums; (iii) for costs incurred for the protection of the Mortgaged
Property or the lien of this Mortgage; (iv) on account of expenses incurred by
Mortgagee by reason of a default of Mortgagor hereunder or under the
Reimbursement Agreement or under the Note; and (v) on account of any other costs
incurred by Mortgagee to protect and preserve the Mortgaged Property or the lien
of this Mortgage. It is the intention of the parties hereto that any such
advance made by Mortgagee after any such notice by Mortgagor shall be secured by
the lien of this Mortgage on the Mortgaged Property.
32. Severability and Savings Clauses. If any provision of this Mortgage is held
to be invalid or unenforceable by a court of competent jurisdiction, the other
provisions of this Mortgage shall remain in full force and effect and shall be
liberally construed in favor of Mortgagee in order to effect the provisions of
this Mortgage. In addition, in no event shall the rate of interest under the
Note exceed the maximum rate of interest permitted to be charged by the
applicable law (including the choice of law rules) and any interest paid in
excess of the permitted rate shall be refunded to Mortgagor. Such refund shall
be made by application of the excessive amount of interest paid to any sums
outstanding under the Note and shall be applied in such order as Mortgagee may
determine. If the excessive amount of interest paid exceeds the sums outstanding
under the Note the portion exceeding the said sums outstanding under the Note
shall be refunded in cash by Mortgagee. Any such crediting or refund shall not
cure or waive any default by Mortgagor hereunder or under the Note. Mortgagor
agrees, however, that in determining whether or not any interest payable under
the Note or this Mortgage exceeds the highest rate permitted by law, any
non-principal payment (except payments specifically stated in the Note to be
"interest"), including without limitation, prepayment premiums and late charges,
shall be deemed to the extent permitted by law, to be an expense, fee, premium
or penalty rather than interest.
33. Communications. Any notice, demand or request under this Mortgage or the
Note shall be in writing, and shall be delivered by personal service or shall be
sent by postage prepaid, certified or registered mail, return receipt requested,
or by reputable national overnight delivery service addressed, if to Mortgagor
or Mortgagee, at the respective address set forth in the heading of this
Mortgage, or at such other address as the addressee may designate in writing.
Each notice, demand or request hereunder shall be deemed given on the date it is
delivered, in the case of personal service, or the date it is deposited with
sufficient postage with the Postal Service, in the case of certified or
registered mail, or the date it is delivered to the overnight delivery service
in the case of overnight delivery.
34. Covenant Running with the Land. Any act or agreement to be done or performed
by Mortgagor shall be construed as a covenant running with the land and shall be
binding upon Mortgagor and its successors and assigns as if they had personally
made such agreement.
35. Amendment. This Mortgage cannot be changed or amended
except by agreement in writing signed by the party against whom
enforcement of the change is sought.
36. Applicable Law. This Mortgage shall be governed by and
construed according to the laws of the Commonwealth of
Pennsylvania, without regard to the choice of law principles
thereof.
37. Definitions. Whenever used in this Mortgage, unless the context clearly
indicates a contrary intent:
(a) The word "Mortgagor" shall mean the person who executes this Mortgage, any
subsequent owner (beneficially or of record) of the Mortgaged Property and their
respective heirs, executors, administrators, successors and assigns;
(b) The word "Mortgagee" shall mean the person specifically named herein as
"Mortgagee" or any subsequent holder of this Mortgage;
(c) The word "person" shall mean individual,
corporation, partnership, joint venture or unincorporated
association;
(d) The use of any gender shall include all genders;
(e) The singular number shall include the plural and the plural the singular as
the context may require.
(f) If Mortgagor is more than one person, all agreements, conditions, covenants,
provisions, stipulations, warrants of attorney, authorizations, waivers,
releases, options, undertakings, rights and benefits made or given by Mortgagor
shall be joint and several, and shall bind and affect all persons who are
defined as "Mortgagor" as fully as though all of them were specifically named
herein wherever the word "Mortgagor" is used.
38. Captions. The captions preceding the text of the paragraphs or subparagraphs
of this Mortgage are inserted only for convenience of reference and shall not
constitute a part of this Mortgage, nor shall they in any way affect its
meaning, construction or effect.
PARAGRAPH 26 OF THIS MORTGAGE PROVIDES FOR THE REMEDY OF CONFESSION OF
JUDGMENT IN EJECTMENT. IN CONNECTION THEREWITH, MORTGAGOR VOLUNTARILY AND
KNOWINGLY WAIVES ITS RIGHTS, IF ANY, TO NOTICE AND TO BE HEARD BEFORE THE ENTRY
OF SUCH JUDGMENT. MORTGAGOR ACKNOWLEDGES THAT IT IS REPRESENTED BY COUNSEL AND
THAT COUNSEL HAS REVIEWED WITH AND EXPLAINED TO MORTGAGOR THE MEANING OF THIS
REMEDY.
IN WITNESS WHEREOF, Mortgagor has duly executed this Mortgage under seal
the day and year first above written.
(CORPORATE SEAL) PIERCING PAGODA, INC.
ATTEST:_______________________
By:_______________________________________
Name: Name:
Title: Title:
The Address of Mortgagee is: 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
------------------------------
On Behalf of Mortgagee
COMMONWEALTH OF PENNSYLVANIA :
: ss.
COUNTY OF __________________ :
On the _____ day of April, 1998, before me, the subscriber, a Notary
Public in and for the Commonwealth and County aforesaid, personally appeared
_________________________, who acknowledged himself/herself to be the
_____________ of Piercing Pagoda, Inc., a Delaware corporation, and that he/she,
being authorized to do so, executed the foregoing Mortgage for the purposes
therein contained by signing the name of the corporation by himself/herself as
such officer.
WITNESS my hand and seal the day and year aforesaid.
-----------------------------------
Notary Public
My Commission Expires:
PHIL1\106224-3
