Exhibit 10.10
COMBINATION MORTGAGE
AND
SECURITY AGREEMENT
AND
FIXTURE FINANCING STATEMENT
THIS INDENTURE (hereinafter referred to as "Mortgage"), is made this 9th
day of June, 1995, by and between PAPER WAREHOUSE, INC., a Minnesota
corporation, whose post office address is 7634 Golden Triangle Drive, Tech 8
Center, Xxxx Xxxxxxx, Xxxxxxxxx 00000 and whose federal taxpayer identification
number is 00-0000000 ("Mortgagor"), and RICHFIELD BANK & TRUST CO., a Minnesota
banking Corporation, whose post office address is 0000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000 ("Mortgagee").
THIS MORTGAGE SECURES INDEBTEDNESS INCURRED FOR THE CONSTRUCTION OF
IMPROVEMENTS ON THE REAL PROPERTY ENCUMBERED HEREBY.
To secure the payment to the Mortgagee, its successors and assigns, of the
sum of NINE HUNDRED FORTY-FIVE THOUSAND AND NO/100 DOLLARS ($945,000.00)
according to the terms of that certain Secured Promissory Note of even date
herewith, in the original principal sum of $945,000.00, issued by Mortgagor to
the order of Mortgagee ("Note"), together with all extensions, amendments and
renewals thereof, plus interest thereon at the rate stated in the Note, the
balance of the Note being due and payable on December 1, 2015, to secure the
payment to the Mortgagee, its successors and assigns, at the times demanded and
with interest thereon at the same rates specified in the Note of all sums
advanced in protecting the lien of this Mortgage, in payment of taxes on the
Premises (as hereinafter defined), in payment of insurance premiums covering
improvements thereon, in payment of principal and interest on prior liens, in
payment of expenses and attorneys' fees herein provided for and all sums
advanced for any other purpose authorized herein (the amounts actually advanced
by Mortgagee to Mortgagor under the Note and all such sums, together with
interest thereon, being collectively referred to herein as the "Indebtedness
Secured Hereby"), and to secure the performance of all of the covenants and
agreements contained in the Note, any extensions, amendments and renewals
thereof, and this Mortgage, and in consideration of the sum of $1.00 paid by the
Mortgagee to the Mortgagor and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Mortgagor does
hereby MORTGAGE, GRANT, BARGAIN, SELL AND CONVEY unto the Mortgagee, its
successors and assigns, forever, and GRANTS A SECURITY INTEREST to the
Mortgagee,
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its successors and assigns, 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
Hennepin, 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, annexations, access rights, easements, rights of way or use,
servitudes, licenses, tenements, hereditaments, appurtenances, minerals, mineral
rights, water and water rights, now or hereafter belonging or pertaining to the
real property; and
B. PERSONAL PROPERTY
All buildings, equipment, fixtures, improvements, building supplies and
materials and personal property now or hereafter attached to or necessary to the
use 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 draperies, maintenance and repair equipment, floor coverings,
screens, storm windows, blinds, awnings, shrubbery and plants, as well as
renewals, replacements, proceeds, additions, accessories, increases, parts,
fittings and substitutes thereof, together with all interest of the Mortgagor in
any such items hereafter acquired, and all products and proceeds thereof,
including without limitation all accounts, instruments, chattel paper, other
rights to payment, money, insurance proceeds and general intangibles related to
the foregoing property, and all refunds of insurance premiums due or to become
due under all insurance policies covering the foregoing property, 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 and removable personal property of any tenant or license of the
Premises; and
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C. RENTS LEASES AND PROFITS
All rents, leases and profits now due or which may hereafter become due
under or by virtue of any lease, license, sublease, or agreement, whether
written or verbal, for the use or occupancy of the Premises or any part thereof,
whether before or after foreclosure or during any redemption period after
Sheriff's foreclosure sale (and the Mortgagee hereby shall have the power
irrevocably to manage, control and lease the Premises and collect such rents,
leases and profits); and
D. JUDGMENTS AND AWARDS
Any and all awards or compensation made by any governmental or other lawful
authorities for the 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.
COVENANTS AND AGREEMENTS
The Mortgagor makes and includes in this Mortgage the Statutory Covenants
and other provisions set forth in Minnesota Statutes Section 507.15 or in any
future Minnesota Statute providing for a statutory form of real estate mortgage,
and the Mortgagor makes the following additional warranties, covenants and
agreements with the Mortgagee:
1. The Mortgagor has good title to the Premises in fee simple, free and clear
of all liens and encumbrances, except as set forth in EXHIBIT B attached
hereto and made a part hereof; the Mortgagor has good right to mortgage,
sell and convey the Premises; the Mortgagor will forever warrant and defend
the Premises against the claims of all persons, and all improvements on the
Premises; and the Mortgagor's use of the Premises now complies, and will
continue to comply, with all applicable building restrictions and codes and
all zoning and other ordinances.
2. 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 in any other instrument given
as security for the payment of the Note. No payment or collection of any
of the Indebtedness Secured Hereby shall reduce the amount secured by this
Mortgage.
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3. The Mortgagor 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. The Mortgagor will
comply with the requirements of the Americans with Disabilities Act ("ADA")
and the ADA Accessibility Guidelines when making any alterations to the
Premises. The Mortgagor will not, without the prior written consent of the
Mortgagee, 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 the Mortgagor
will complete within a reasonable time any buildings now or at any time in
the process of erection on the Premises. The Mortgagor will not acquiesce
in any rezoning classification, modification or restriction affecting the
Premises. The Mortgagor will not vacate or abandon the Premises.
4. The Mortgagor will pay all operating costs and expenses of the Premises;
keep the Premises free from mechanics', materialmens' and other liens not
expressly subordinated to the lien of this Mortgage, keep the Premises free
from levy, execution or attachment, and pay when due all indebtedness which
may be secured by mortgage, lien or charge on the Premises superior to or
equal to the lien of this Mortgage, and upon request exhibit to the
Mortgagee satisfactory evidence of such payment and discharge.
5. The Mortgagor shall pay when due and before any penalty accrues, all taxes,
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 ("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
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such Impositions 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 Impositions, provided that if for any reason
payment by the Mortgagor of any such Impositions 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
Impositions 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
Impositions. The Mortgagor shall not be required to pay, discharge or
remove any 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
Impositions so contested and the sale of the Premises, or any part
thereof to satisfy the same, provided that the Mortgagor shall, prior to
the date such Impositions are due and payable, have given such
reasonable security as may be demanded by the Mortgagee to insure such
payments and prevent any sale or forfeiture or the Premises by reason of
such non-payment. Any such contest shall be prosecuted with due
diligence and the Mortgagor shall promptly after final determination
thereof pay the amount of any such 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 to do so, the Mortgagee may, but
shall not be required to) pay any such 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.
6. The Mortgagor will 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.
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7. The Mortgagor warrants that no toxic or hazardous substance, waste or
constituent, as defined in any local, state or federal law governing
liability for any such substance, waste or constituent is, or has been in
the past, located on or released from the Premises in violation of such
applicable laws. The Mortgagor shall not, nor shall the Mortgagor permit
others to, use the Premises at any time to generate, transport, store,
process, treat, or dispose of a toxic or hazardous substance, waste or
constituent in violation of any such applicable laws and regulations. The
Mortgagor shall not take, fail to take or permit any action which may
result in a release of any toxic or hazardous substance, waste or
constituent from the Premises. The Mortgagor warrants that the Mortgagor
has no actual knowledge of any existing or pending claim to which any
local, state or federal law governing liability for any such substance,
waste or constituent may apply with respect to the Premises. Within ten
(10) days after learning of the occurrence of (a) any event relating to any
toxic or hazardous substance, waste or constituent with respect to the
Premises, or (b) the commencement of any litigation, arbitration or other
Proceeding that affects the Premises, or (a) notice from any government or
governmental agency that the Premises or any operations thereon are not in
compliance with any local, state or federal law or notice that the
Mortgagor or all or part of the Premises is subject to any investigations
relating to any toxic or hazardous substance, waste or constituent, the
Mortgagor shall give the Mortgagee oral and written notice thereof,
describing the same and the steps that will be taken by the Mortgagor with
respect thereto.
8. The Mortgagor will, upon reasonable request by the Mortgagee, execute and
deliver such further instruments, financing statements under the Uniform
Commercial Code and assurances and 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 will pay any recording fees,
filing fees, stamp taxes and other charges arising out of or incident to
the filing or recording of this Mortgage, such further assurances and
instruments and the issuance and delivery of the Note.
9. Mortgagor shall deliver to Mortgagee as soon as available, and in any event
within 90 days after the end of each fiscal year of the Mortgagor, a copy
of the annual audit report of the Mortgagor together with the unqualified
opinion of the
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independent certified public accountants selected by the
Mortgagor and reasonably acceptable to Mortgagee, which report shall
include the balance sheet of the Mortgagor as of the end of such fiscal
year, and the related statements of income, retained earnings and cash
flows of the Mortgagor for such fiscal year, including all supporting
schedules and notes, all in reasonable detail, prepared in accordance with
generally accepted accounting principles applied on a basis consistent with
the accounting practices applied in the annual financial statements
Previously furnished by Mortgagor to Mortgagee. In the event that the
Mortgagor fails to furnish any such statements, the Mortgagee may cause an
audit to be made of the respective books and records at the sole cost and
expense of the Mortgagor. The Mortgagee also shall have the right to
examine at their place of safe keeping, at reasonable times, all books,
accounts and records relating to the operation of the Premises.
10. In the event the Mortgagor sells, leases, conveys, transfers, further
mortgages or encumbers or disposes of the Premises, or any part thereof, or
any interest therein, or agrees so to do, without the written consent of
the Mortgagee being first obtained, then at the sole option of the
Mortgagee, the Mortgagee may declare the entire Indebtedness Secured Hereby
due and payable in full and call for payment of the same in full at once,
without notice to the Mortgagor Consent as to any one transaction shall not
be deemed to be a waiver of the right to require consent to future or
successive transactions.
11. 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
coverages:
a. "all risk" 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, all in the amounts of not less than
the full replacement cost of the improvements on the Premises, without
deduction for depreciation; and
b. if steam boilers or similar equipment for the generation of steam are
located in, or about the Premises, insurance against loss or damage by
explosion, rupture or bursting of such equipment and appurtenances
thereto, without a co- insurance clause, in an amount satisfactory to
Mortgagee; and
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x. xxxxx insurance in the maximum obtainable amount unless evidence is
provided that the Premises are not located within a flood plain as
defined by the Federal Insurance Administration; and
d. business interruption insurance covering risk of loss due to the
occurrence of any hazards insured against under the required "all
risk" insurance in such amount as is acceptable to Mortgagee.
All insurance policies shall be written on forms and with insurance
companies satisfactory to the Mortgagee, shall name the Mortgagee as a loss
payee and an additional insured as its interest may appear, shall provide
for at least thirty (30) business days' prior written notice to the
Mortgagee of any cancellation or material modification of such policies,
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.
The Mortgagor shall also obtain and keep in full force and effect during
the term of this Mortgage commercial general 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
amounts and with such limits as the Mortgagee may reasonably require.
The Mortgagor shall, within thirty (30) 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. 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 from foreclosure sale, and if necessary
therefore, to cancel any or all existing insurance policies. The Mortgagor
agrees to furnish the Mortgagee with copies of all
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inspection reports and insurance recommendations received by the
Mortgagor from any insurer.
12. This Mortgage shall constitute a security agreement as defined in the
uniform Commercial Code ("Code"), and SHALL BE EFFECTIVE AS A FINANCING
STATEMENT FILED AS A FIXTURE FILING which is to be filed 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 name and
address of the Mortgagor, as debtor, and the name and address of the
Mortgagee, as Secured party, are as set forth in page one to this Mortgage.
This document covers goods which are, or are to become, fixtures.
13. 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 and without the consent of the Mortgagor 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 $75,000.00. 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. 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. Notwithstanding the
foregoing, the Mortgagor shall have the right to use the insurance proceeds
for the restoration or repair of the Premises, provided that all of the
following conditions precedent are, in the sole opinion of Mortgagee, then
satisfied: (i) the insurance proceeds from such loss do not exceed
$250,000.00; (ii) no Event of Default exists hereunder at the time the
insurance proceeds are received; (iii) the value of the Premises shall be
preserved after Mortgagor's restoration; (iv) the amount of the insurance
proceeds are adequate to complete the repair and restoration of the
Premises, or Mortgagor shall contribute such additional funds as are
necessary to fully restore and repair the
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Premises; (v) the insurance proceeds shall be distributed to the title
insurance company insuring this Mortgage, to ensure Mortgagee's
continuing lien priority; (vi) Mortgagee shall approve all plans and
specifications for the restoration of the Premises; and (vii) Mortgagor
shall pay all of Mortgagee's costs and expenses incurred in connection
with the restoration of the Premises.
14. The Mortgagor will give the Mortgagee prompt notice of any action, actual
or threatened, in condemnation of 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 in the name of the
Mortgagor and to collect and receive from the condemning authorities and
give proper receipts and acquittances for such proceeds. Any expenses
incurred by the Mortgagee in intervening in such action or collecting such
proceeds shall be reimbursed to the Mortgagee first out of the proceeds.
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, 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. Notwithstanding the foregoing,
Mortgagor shall have the right to receive that portion of such proceeds
that are specifically allocated by the condemning authority for restoration
of the remaining portion of the Premises and for specifically allocated
relocation expenses.
15. Should any insurance or condemnation proceeds be applied to the restoration
or repair of the Premises the restoration or repair shall be done under the
supervision of an architect acceptable to the Mortgagee and pursuant to
plans and specifications approved by the Mortgagee. In such case 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 reasonably require to assure completion in accordance with the approved
plans and specifications and free of liens or claims. Any surplus which
may remain after payment of all costs of restoration or repair may at the
option of the Mortgagee be applied on account of the Indebtedness Secured
Hereby then most remotely to be paid, whether due or not, without
application of any prepayment premium, or shall be returned to the
Mortgagor as its interest
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may appear, the choice of application to be solely at the discretion of
the Mortgagee.
16. The Mortgagor will, at its own cost and expense, perform, comply with and
discharge all of the obligations of the Mortgagor under all leases and
agreements for the use of the Premises and use its best efforts to enforce
or secure the performance of each obligation and undertaking of the
respective tenants under 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 shall permit no surrender nor assignment of any
tenant's interest under said leases unless the right to assign or surrender
is expressly reserved under the lease nor anticipate any installment of
rent for more than one month in advance of its due date nor execute any
mortgage or create or permit a lien which may be or become superior to any
such leases, nor permit a subordination of any lease to such mortgage or
lien. The Mortgagor will not modify or amend the terms of any such leases,
nor borrow against or pledge the rentals from such leases nor exercise or
waive any default of the tenant thereunder without the prior consent of the
Mortgagee. The Mortgagor agrees to obtain the Mortgagee's prior written
approval before entering into any lease with a term of five (5) years or
more. 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 as specified in 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.
17. 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 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
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sums incurred by the Mortgagee in remedying any such failure together with
interest at the rate as specified in 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 failure hereunder.
18. 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.
19. The Mortgagor will permit the Mortgagee's authorized representatives to
enter the Premises at all times 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.
20. 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 guaranty, assignments of rents
and leases or other securities, and exhaust any one or more of said
securities and the
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security hereunder, either concurrently or independently and in such order
as it my determine. No act or thing, except full payment of the
Indebtedness Secured Hereby, which but for this provision could act as a
release, termination, satisfaction or impairment of this Mortgage
shall in any way release, terminate, satisfy or impair this Mortgage.
21. 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 other law, 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 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 default or event of default under this Mortgage or the Note.
22. 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.
23. The Mortgagor hereby waives to the full extent lawfully allowed the benefit
of any homestead, appraisement, evaluation, stay and extension laws now or
hereafter 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 or any other person
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.
24. The occurrence of any of the following events shall be an event of default
under this Mortgage: (a) failure to pay any amount on the Note when due;
or (b) failure to pay any other Indebtedness Secured Hereby when due; or
(c) default or breach of any covenant or agreement of the Mortgagor or any
co-maker, endorser, guarantor or surety contained in the Note, this
Mortgage, or any other agreement, instrument or writing contemplated by or
made or delivered pursuant to or in connection with the Note or this
Mortgage; or (d) any
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statement made by the Mortgagor or any such co-maker, endorser,
guarantor or surety to the Mortgagee at any time shall prove to have
been incorrect or misleading in any material respect when made; (e) the
Mortgagor or any such comaker, endorser, guarantor or surety shall be or
become insolvent, or initiate or have initiated against it any act,
process or proceeding under any insolvency, bankruptcy or similar law;
or (f) the Mortgagor or any such co-maker, endorser, guarantor or surety
shall die, be dissolved or liquidated, merge, consolidate, transfer a
substantial part of its property, or, if a partnership, suffer the
death, dissolution or liquidation of any partner.
25. 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, 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 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 lawful attorney's
fees, with the balance, if any, to be paid to the persons entitled thereto
by law.
26. 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 in accordance with the
statutes and law made and provided for who shall collect the rents, and all
other income of any kind; manage the Premises so to prevent waste; execute
leases within or beyond the period of receivership, pay all expenses for
normal maintenance of the premises and perform the terms of this Mortgage
and apply the rents, issues and profits in the following order to (i)
payment of the reasonable fees of said receiver, (ii) application of tenant
security deposits as
14
required by Minnesota Statutes Section 504.20, (iii) payment when due of
prior or current real estate taxes or special assessments with respect
to the Premises or if required by this Mortgage, payment of the periodic
escrow for payment of the taxes or special assessments, (iv) the payment
when due of premiums for insurance of the type required by this Mortgage
or if required by this Mortgage, payment of the Periodic escrow for the
payment of the premiums, (v) keeping of the covenants required of a
lessor or licensor pursuant to Minnesota Statutes Section 504.18, and
(vi) as further provided in any Assignment of Rents executed by the
Mortgagor as further security for the Indebtedness Secured Hereby
(whether included in this Mortgage or separate instrument), including
but not limited to applying the same to the costs and expenses of the
receivership, including reasonable attorney's fees, to the repayment of
the Indebtedness Secured Hereby and to the operation, maintenance,
upkeep and repair of the Premises, including payment of taxes on the
Premises and payments of premiums of insurance on the Premises. The
Mortgagor does hereby irrevocably consent to such appointment. Nothing
contained in this Mortgage and no actions taken pursuant to this
Mortgage shall be construed as constituting the Mortgagee a mortgagee in
possession.
27. 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 without
limitation the right to proceed under the provisions of the Uniform
Commercial Code governing default as to any Personal Property which may be
included in the Premises or which may be deemed non-realty in a foreclosure
of this Mortgage or to proceed as to such personal property in accordance
with the procedures and remedies available pursuant to a foreclosure of
real estate.
28. THE MORTGAGOR HEREBY CONSENTS AND AGREES TO THE FORECLOSURE AND SALE OF THE
PREMISES BY ACTION PURSUANT TO MINNESOTA STATUTES CHAPTER 581 OR, AT THE
OPTION OF THE MORTGAGEE, BY ADVERTISEMENT PURSUANT TO MINNESOTA STATUTES
CHAPTER 580 (OR PURSUANT TO ANY SIMILAR OR REPLACEMENT STATUTES HEREAFTER
ENACTED), WHICH PROVIDES FOR SALE AFTER SERVICE OF NOTICE THEREOF UPON THE
OCCUPANT OF THE PREMISES AND PUBLICATION OF SAID NOTICE FOR SIX WEEKS IN
THE COUNTY IN MINNESOTA WHERE THE PREMISES ARE SITUATED; ACKNOWLEDGES THAT
SERVICE NEED NOT BE MADE UPON THE MORTGAGOR PERSONALLY (UNLESS THE
MORTGAGOR IS AN OCCUPANT) AND THAT NO HEARING OF ANY TYPE IS REQUIRED IN
CONNECTION WITH THE SALE; AND EXCEPT AS MAY BE PROVIDED IN
15
SAID STATUTES EXPRESSLY WAIVES ANY AND ALL RIGHT TO PRIOR NOTICE OF SALE
OF THE PREMISES AND ANY AND ALL RIGHTS TO A PRIOR HEARING OF ANY TYPE IN
CONNECTION WITH THE SALE OF THE PREMISES. The Mortgagor further
understands that in the event of such default the Mortgagee may also
elect its rights under the Uniform Commercial Code and take possession
of the Personal Property (as defined in this Mortgage) 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
ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL; THAT BEFORE
SIGNING THIS DOCUMENT, THIS PARAGRAPH AND THE MORTGAGOR'S 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.
29. 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 cost and expense of the Mortgagor,
otherwise to remain in full force and effect.
30. 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.
31. This Mortgage and each and every covenant, agreement 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 and 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.
32. The unenforceability or invalidity of any provisions hereof shall not
render any other provision or provisions herein contained unenforceable or
invalid.
33. 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
16
include the singular and the masculine, feminine and neuter shall be freely
interchangeable.
34. 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.
THE MORTGAGOR REPRESENTS, CERTIFIES, WARRANTS AND AGREES THAT THE MORTGAGOR
HAS READ ALL OF THIS MORTGAGE AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS
MORTGAGE. THE MORTGAGOR ALSO AGREES THAT THE MORTGAGEE'S COMPLIANCE WITH THE
EXPRESS PROVISIONS OF THIS MORTGAGE SHALL CONSTITUTE GOOD FAITH AND SHALL BE
CONSIDERED REASONABLE FOR ALL PURPOSES.
IN WITNESS WHEREOF, the undersigned have executed this Mortgage as of the
day and year first above written.
PAPER WAREHOUSE, INC.
By /s/ Yale X. Xxxxxxxx
---------------------------------------------
Yale X. Xxxxxxxx
Its President
STATE OF MINNESOTA )
)ss.
COUNTY OF HENNEPIN )
This instrument was acknowledged before me this 9th day of June, 1995, by
Yale X. Xxxxxxxx, the president of Paper Warehouse, Inc., a Minnesota
corporation, on behalf of the corporation.
/s/ Xxxxx Xxxxxxx
------------------------------------------------
Notary Public
This instrument was drafted by:
XXXXXXX, RUMBLE & XXXXXX (DXB)
Professional Association
2800 Minnesota World Trade Center
00 Xxxx Xxxxxxx Xxxxxx (Notary Seal)
Xx. Xxxx, Xxxxxxxxx 00000-0000
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EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
The land referred to is situated in the State of MINNESOTA, County of HENNEPIN,
and is described as follows:
PAR 1:
That part at the Northwest Quarter of the Southwest Quarter, Section 20,
Township 117, Range 21 described as beginning at a point on the North line
at said Northwest Quarter of the Southwest Quarter distant 700 feet West
from the Northeast corner of said Northwest Quarter of the Southwest
Quarter; thence West along said North line 185.3 feet; thence South
deflecting to the left 90 degrees 00 minutes 29 seconds to the center line
of Excelsior Boulevard; thence Easterly along said center line to its
intersection with a line drawn South, parallel with the West line of said
Northwest Quarter of the Southwest Quarter from the point of beginning;
thence North along said parallel line to the point of beginning; except
that part thereof lying Northerly of a line drawn Westerly, parallel with
the center line of Excelsior Boulevard from a point on the East line of
said above described tract distant 461 feet North along said East line from
the center line of Excelsior Boulevard, according to the Government Survey
thereof.
PAR 2:
The West 49 feet of the Southerly 461 feet of the premises described as
follows:
That part of the Northwest Quarter of the Southwest Quarter of Section 20,
Township 117, Range 21 described as follows: Commencing at the Northeast
corner of said Quarter-Quarter, thence Westerly along the North line
thereof 700 feet; thence Southerly along a line parallel with the West line
of said Quarter-Quarter 642.5 feet to the center line of Excelsior Avenue;
thence Easterly along the center line of Excelsior Avenue to the East line
of said Quarter-Quarter; thence Northerly along said East line to point of
beginning.
TOGETHER WITH an easement for water main purposes as contained in Deed
dated July 11, 1968, recorded November 1, 1968, as Doc. No. 925612.
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EXHIBIT B
[Permitted Encumbrances]
1. All assessments and taxes due and payable in 1995, and thereafter.
2. The following Recital appears in the Certificate of Title, and will be
carried forward to any new Certificate of Title:
The North line of said tract is marked by Judicial Landmarks set pursuant
to Torrens Case No. 12986. (as to Parcel 1)
3. The following recital appears in the Certificate of Title, and will be
carried forward to any new Certificate of Title:
Subject to an easement to the City of Xxxxxxx over the West 34 feet of the
above described land for sewer, water mains and other utilities and for
public street. (as to Parcel 1)
4. Easement for sewer and water main purposes in favor of the Village of St.
Louis Park as contained in Deed dated July 29, 1950, recorded August 7,
1950 as Doc. No. 318097.
5. Easement for water main purposes as contained in Quit Claim Deed dated July
11, 1968, recorded November 1, 1968, as Doc. No. 925612.
6. Easement for highway purposes in favor of the County of Hennepin as
contained in Deed dated December 9, 1982, recorded March 14, 1983 as Doc.
No. 1504645.
7. Right of way for Excelsior Boulevard as shown on Hennepin County State Aid
Highway Number 3, Plat 59, dated November 23, 1987, recorded November 24,
1987 as Doc. No. 1890398, and as presently laid out and travelled.
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