Exhibit 10.2
CREDIT LINE MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE is made 1st day of May, 2004 by and between, J. Adam
Holdings, Inc. ("Mortgagor"), having its chief executive office and principal
place of business at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxx Xxxx 00000
and Triple J Associates., having its principal office at 000 Xxx Xxxxxx, Xxxx
Xxxxxxxxx, Xxx Xxxx 00000 ("Mortgagee").
W I T N E S S E T H :
WHEREAS, Mortgagor is obligated pursuant to a a certain Secured
Revolving Credit Grid Promissory Note from Ferro Foods Corporation dated May 1,
2004 (the "Note"), which Note provides, inter alia, that from time to time,
advances are permitted to be made, repaid and further advances made, provided
that the maximum amount of advances that are outstanding at any time shall not
exceed One Hundred Thousand Dollars ($100,000) (the "Maximum Amount") and a copy
of which Note is annexed hereto and made a part hereof as Exhibit A.
NOW, THEREFORE, to secure the full and prompt payment and performance
of all such amounts under the Note as well as under this Mortgage (such amounts
being referred to herein as the "indebtedness") and in consideration of other
valuation consideration, receipt of which is hereby acknowledged, Mortgagor
hereby gives, grants, bargains, sells and confirms unto Mortgagee, its
successors and assigns forever, the following property, rights, privileges and
franchises (collectively, the "Mortgaged Property").
The real property described in said Exhibit B, together with the
buildings, structures and improvements thereon erected or to be erected (the
"Improvements"), with the appurtenances thereof and thereto (all, the
"Premises");
TOGETHER with all leasehold estate, right, title and interest of
Mortgagor in and to all leases or subleases covering the Premises or any portion
thereof (collectively, the "Leases") now or hereafter existing or entered into,
and all right, title and interest of Mortgagor thereunder, including, without
limitation, all cash or security deposits, advance rentals, and deposits or
payments of similar nature;
TOGETHER with all right, title and interest of Mortgagor in and to
all options to purchase or lease the Premises or any portion thereof or interest
therein, and any greater estate in the Premises owned or hereafter acquired;
TOGETHER with all interests, estates or other claims, both in law and
in equity, which Mortgagor now has or may hereafter acquire in the Premises;
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TOGETHER with all easements, rights-of-way and rights used in
connection therewith or as a means of access thereto, and all tenements,
hereditaments and appurtenances thereof and thereto, and all water rights;
TOGETHER with any and all of Mortgagor's fixtures, attachments,
equipment, machinery now or hereafter located or to be located at the Premises
and attached to, the Premises, be they deemed personal, mixed or real property
(the "Fixtures");
TOGETHER with all right, title and interest of Mortgagor in and to
any streets and roads abutting the Premises to the center lines thereof and in
and to any strips or gores of land therein or adjacent to the Premises;
TOGETHER with all awards and proceeds of condemnation or insurance
for the Mortgaged Property or any part thereof to which Mortgagor is entitled
for any taking of or casualty to all or any part of the Mortgaged Property by
condemnation or exercise of the right of eminent domain or casualty (the
"Proceeds"). All such awards and condemnation or insurance proceeds are hereby
assigned to Mortgagee and Mortgagee is hereby authorized, subject to the
provisions contained in this Mortgage, to apply such awards and condemnation or
insurance proceeds or any part thereof, after deducting therefrom any expenses
incurred by Mortgagee in the collection or handling thereof, toward the payment,
in full or in part, of any amount due under the Note secured by the Mortgage,
notwithstanding the fact that the amount owing thereon may not then be due and
payable;
TOGETHER with all rents, issues, income and profits (including,
without limitation, any payment(s) in exchange for lease termination or
cancellation) of the Premises and all the estate, right, title and interest of
every nature whatsoever of Mortgagor in and to the same and the leases,
subleases and tenancies concerning the same (the "Rents and Profits");
TOGETHER with all inventory, equipment, machinery, furniture,
accounts, chattel paper, contracts, contract rights, notes, drafts, acceptances,
general intangibles, causes of action and all other personal property, now
existing, or hereafter acquired or arising, with respect to the operation of
Premises (the "Personalty").
TO HAVE AND TO HOLD the Mortgaged Property, with the appurtenances
thereof and thereto, unto Mortgagee, its successors and assigns forever, to its
and their own proper use and behalf.
THIS MORTGAGE IS INTENDED TO BE A "CREDIT LINE MORTGAGE" AS DEFINED IN SECTION
281 OF THE NEW YORK REAL PROPERTY LAW, AS THE SAME MAY BE AMENDED OR MODIFIED
FROM TIME TO TIME.
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To protect the security of the Mortgage, Mortgagor further covenants,
warrants and agrees with Mortgagee as follows:
ARTICLE 1
WARRANTIES, COVENANTS AND AGREEMENTS OF MORTGAGOR
ARTICLE 1.1 Payment of Secured Obligations. Mortgagor shall pay when
due the principal of, and the interest on the indebtedness and all charges, fees
and other amounts due under the Note shall otherwise comply with all the terms
of this Mortgage.
ARTICLE 1.2 Warranties and Representations. Mortgagor does for
itself, its successors and assigns, covenant with Mortgagee, its successors and
assigns, that at and until the ensealing of these presents, it is well seized of
the Mortgaged Property as a good indefeasible estate in FEE SIMPLE, and has good
right to bargain and sell, convey, assign, transfer and mortgage the same in
manner and form as is above written, and that the same is free from all
encumbrances whatsoever except as specifically set forth in Exhibit C.
And furthermore, Mortgagor does by these presents bind itself and its
successors and assigns forever to preserve its interest in and title to the
Mortgaged property and to WARRANT AND DEFEND the Mortgaged Property to
Mortgagee, its successors and assigns, against all claims and demands
whatsoever, except as set forth in Exhibit C.
ARTICLE 1.3 Rents and Profits. As additional and collateral security
for the payment of the indebtedness secured hereby and cumulative of any and all
rights and remedies herein provided for, Mortgagor hereby absolutely and
presently assigns to Mortgagee all existing and future Leases and all existing
and future Rents and Profits. Mortgagor hereby grants to Mortgagee the sole,
exclusive and immediate right, without taking possession of the Property, to
demand, collect (by suit or otherwise), receive and give valid and sufficient
receipts for any and all of said Rents and Profits, for which purpose Mortgagor
does hereby irrevocably make constitute and appoint Mortgagee its
attorney-in-fact with full power to appoint substitutes or a trustee to
accomplish such purpose (which power of attorney shall be irrevocable so long as
any indebtedness secured hereby is outstanding, shall be deemed to be coupled
with an interest, shall survive the voluntary or involuntary dissolution of
Mortgagor and shall not be affected by any disability or incapacity suffered by
Mortgagor subsequent to the date hereof). Mortgagee shall be without liability
for any loss which may arise from a failure or inability to collect Rents and
Profits, proceeds or other payments. However, until the occurrence of an Event
of Default under this Mortgage, Mortgagor shall have a license to collect and
receive the Rents and Profits when due and prepayments thereof for not more than
one month prior to due date thereof. Upon the occurrence of an Event of Default
which is continuing, Mortgagor's license shall automatically terminate on demand
and notice to Mortgagor and Mortgagee thereafter, without taking possession of
the Property, collect the Rents and Profits itself or by an agent or receiver.
From and after the termination of such license, Mortgagor shall be the agent of
Mortgagee in collection of the Rents and Profits and all of the Rents and
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Profits so collected by Mortgagor shall be held in trust by Mortgagor for the
sole and exclusive benefit of Mortgagee and Mortgagor shall, within one (1)
business day after receipt of any Rents and Profits, pay the same to Mortgagee
to be applied by Mortgagee as hereinafter set forth. Neither the demand for or
collection of Rents and Profit by Mortgagee, nor the exercise of Mortgagee's
rights as assignee of the Leases, shall constitute any assumption by Mortgagee
of any obligations under any Lease or other agreement relating thereto.
Mortgagee is obligated to account only for such Rents and Profits as are
actually collected or received by Mortgagee. Mortgagor irrevocably agrees and
consents that the respective payors of the Rents and Profits shall, upon demand
and notice from Mortgagee of an Event of Default hereunder, pay said Rents and
Profits to Mortgagee without fiabili1y to determine the actual existence of any
Event of Default claimed by Mortgagee. Mortgagor hereby waives an right, claim
or demand which Mortgagor may now or hereafter have against any such payor by
reason of such payment of Rents and Profits to Mortgagee, and any such payment
shall discharge such payor's obligation to make such payment to Mortgagor. All
Rents and Profits collected or received by Mortgagee shall be applied against
all expenses of collection, including, without limitation, attorneys' fees,
against costs of operation and management of the Mortgaged Property and against
the indebtedness secured hereby, in whatever order or priority as to any of the
items so mentioned as Mortgagee directs in its sole subjective discretion and
without regard to the adequacy of its security. Neither the exercise by
Mortgagee of any rights under this Section nor the application of any Rents and
Profits to the secured indebtedness shall cure or be deemed a waiver of any
Default or Event of Default hereunder. The assignment of Leases and of Rents and
Profits hereinabove granted shall continue in full force and effect during any
period of foreclosure or redemption with respect to the Mortgaged Property.
ARTICLE 1.4 Ground Leases, Leases or Subleases. Mortgagor shall pay
when due all rents and other payments which it may be required to pay and shall
keep, observe and perform all of the covenants, agreements, terms, conditions
and provisions on its part to be kept, observed and performed under any ground
lease, lease or sublease which may constitute a portion of or an interest in-the
Premises, shall require its tenants or subtenants to keep, observe and perform
all of the covenants, agreements, terms, conditions and provisions on their part
to be kept, observed or performed under any and all ground leases, leases or
subleases and shall not suffer or permit any breach or default to occur with
respect to the foregoing. In default thereof, Mortgagee shall have the right to
perform or to require performance of any such covenants, agreements, terms,
conditions or provisions of any such ground lease, lease or sublease and to add
any expense incurred in connection therewith to the indebtedness secured hereby,
which expense shall bear interest from the date of payment to the date of
recovery by Mortgagee at the rate of interest applicable at the relevant times
on the commercial revolving loan (the "Default Rate"). Any such expense incurred
by Mortgagee, with interest thereon, shall be immediately due and payable.
Mortgagor shall not, without the consent of Mortgagee, consent to the
modification, amendment, cancellation, termination or surrender of any such
ground lease, lease or sublease.
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No release or forbearance of any of Mortgagor's obligations under any
such ground lease, lease or sublease, pursuant to any such ground lease, lease
or sublease, or otherwise, shall release Mortgagor from any of its obligations
under the Mortgage.
ARTICLE 1.5 Required Insurance. Mortgagor shall, at Mortgagor's sole
cost and expense, maintain or cause to be maintained with respect to the
Mortgaged Property, and each part thereof, the following insurance:
(a) Insurance against loss or damage to the Improvements by
fire and any of the risks covered by insurance of the type now known
as "fire, broad form extended coverage and vandalism and malicious
mischief' perils, in an amount sufficient to prevent the application
of any co-insurance contributions in any loss and, in any event, not
less than the full replacement cost of the Improvements and
Personality and with no more than $25,000.00 deductible from the loss
payable for any casualty. The policies of insurance carried in
accordance with this subparagraph (a) shall contain the "Replacement
Cost Endorsement";
(b) Comprehensive public liability insurance (including
coverage for elevators and escalators, if any, on the Premises and,
on an "occurrence basis" against claims for 11personal injury"
including without limitation bodily injury, death or property damage
occurring on, in or about the Premises and the adjoining streets,
sidewalks and passageways, in the amount of $1,000,000 per occurrence
and $5,000,000 in the aggregate (or such larger amount as may be
required under Mortgagor's general liability umbrella policy);
(d) Boiler and machinery insurance covering pressure
vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment and escalator equipment, provided
the Improvements contain equipment of such nature, and insurance
against loss of occupancy or use arising from any such breakdown, on
a replacement cost basis;
(e) Flood insurance if any part of the Property is located
in an area identified by the Federal Emergency Management Agency as
an area having special flood hazards and in which flood insurance has
been made available under the National Flood Insurance Program in an
amount equal to the lesser of (a), the minimum amount required, under
the terms of coverage, to compensate for any damage or loss on a
replacement basis (or the unpaid balance of the indebtedness secured
hereby if replacement cost coverage is not available for the type of
building insured); or (b) the maximum insurance available under the
appropriate National Flood Insurance Program.
(f) Such other insurance and in such amounts as may from
time to time be reasonably required by Mortgagee against the same or
other hazards.
All policies of insurance required by the terms of the
Mortgage shall contain an endorsement or agreement by the insurer that any loss
shall be payable to Mortgagee in accordance with the terms of such policy
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notwithstanding any act or negligence of Mortgagor which might otherwise result
in forfeiture of said insurance, and the further agreement of the insurer
waiving all rights of setoff, counterclaim or deductions against Mortgagor. All
policies of insurance shall have attached thereto the standard non-contributory
mortgagee endorsement or lender's loss payable endorsement, as appropriate, for
the benefit of Mortgagee satisfactory to Mortgagee in form and substance.
Mortgagor shall furnish Mortgagee with an original policy of all policies of
required insurance. At least thirty (30) days prior to the expiration of each
such policy, Mortgagor shall furnish Mortgagee with evidence satisfactory to
Mortgagee of the payment of premium and the reissuance of a policy continuing
insurance in force as required by the Mortgage.
Mortgagor may effect for its own account any insurance not
required under this Section 1.4, but any such
insurance effected by Mortgagor on the Premises, whether or not so required,
shall be for the mutual benefit of Mortgagor and Mortgagee and shall be subject
to the other provisions of the Mortgage.
ARTICLE 1.6 Delivery of Policies, Payment of Premiums. All such
policies shall contain a provision that such policies shall not be canceled or
materially amended, which term shall include any reduction in the scope or
limits of coverage, without at least thirty (30) days' prior written notice to
Mortgagee. If Mortgagor fails to provide, maintain, keep in force or deliver and
furnish to Mortgagee the policies of insurance required by this Article 1,
Mortgagee may procure such insurance or single interest insurance for such risks
covering Mortgagee's interest, and Mortgagor shall pay all premiums thereon
promptly upon demand by Mortgagee, and until such payment is made by Mortgagor,
the amount of all such premiums together with interest thereon at the Default
Rate shall be secured by the Mortgage. All policies of insurance shall be issued
by companies and in amounts in each company satisfactory to Mortgagee, and shall
contain loss payee provisions satisfactory to Mortgagee.
ARTICLE 1.7 Taxes, Utilities and Imposition. Mortgagor shall pay, or
cause to be paid and discharged, on or before the last day on which they may be
paid without penalty or interest, all such duties, taxes, sewer rents, charges
for water, and all other utilities in the Improvements or on the Premises or any
part thereof, and any assessments and payments, usual or unusual, extraordinary
or ordinary, which shall be imposed upon or become due and payable or become a
lien upon the Premises or any part thereof and the sidewalks or streets in front
thereof and any vaults therein by virtue of any present or future law of the
United States or of the State, County, City or Town wherein the Premises are
located (all of the foregoing being herein collectively called "Impositions").
In default of any such payment of any Imposition, Mortgagee may pay the same and
the amount so paid by Mortgagee shall, at Mortgagee's option, become immediately
due and payable with interest thereon at the Default Rate and shall be deemed
part of the indebtedness secured by this Mortgage.
If at any time there shall be assessed or imposed (i) a tax
or assessment on the Premises in lieu of or in addition to the Impositions
payable by Mortgagor pursuant to this Section or
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(ii) a license fee, tax or assessment imposed on Mortgagee and measured by or
based in whole or in part upon the amount of the outstanding obligations secured
hereby, then all such taxes, assessments or fees shall be deemed to be included
within the term "Impositions" as defined in this Section, and Mortgagor shall
pay and discharge the same as herein provided with respect to the payment of
Impositions unless such payment is prohibited by law, in which event the amount
of such payment shall become part of the indebtedness secured hereby.
Mortgagor shall pay all mortgage, recording taxes payable
with respect to the Mortgage or other mortgage or transfer taxes due on account
of the mortgage or the indebtedness secured by this mortgage.
Mortgagor shall exhibit to Mortgagee the original receipts
or other reasonably satisfactory proof of the payment of all Impositions which
may affect the Mortgaged Property or any part thereof or the lien of the
Mortgage, promptly following the last date on which each such Imposition is
payable hereunder without interest or penalty.
Notwithstanding the foregoing, Mortgagor shall have the
right, after prior notice to Mortgagee, to contest the amount and validity of
any Imposition affecting the Mortgaged Property by appropriate proceedings
conducted in good faith and with due diligence and to postpone or defer payment
thereof, if and so long as:
(a) Such proceedings shall operate to suspend the
collection of such Imposition from Mortgagor or the Mortgaged
Property; or
(b) Neither the Mortgaged Property nor any part thereof
would be in immediate danger of being forfeited or lost by reason of
such proceedings, postponement or deferment; and
(c) In the case of any Imposition affecting the Mortgaged
Property which might be or become a lien, encumbrance or charge upon
or result in any forfeiture or loss of the Mortgaged Property or any
part thereof, or which might result in loss or damage to Mortgagor or
Mortgagee, Mortgagor, prior to the date such Imposition would become
delinquent, shall have furnished Mortgagee with security satisfactory
to Mortgagee, and, if such security is furnished, Mortgagee shall not
have the right during the period of the contest to pay, remove or
discharge the Imposition.
ARTICLE 1.8 Mechanics' Liens. Mortgagor shall pay when due all claims
and demands of mechanics, materialmen, laborers and other for any work performed
or materials delivered for the Premises or Improvements; provided, however,
that, Mortgagor shall have the right to contest in good faith any such claim or
demand, so long as it does so diligently, by appropriate proceedings and without
prejudice to Mortgagee, and provided that neither the Mortgaged Property nor any
interest therein would be in any danger of sale, loss or forfeiture as a result
of such proceeding or contest. In the event Mortgagor shall contest any such
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claim or demand, Mortgagor shall promptly notify Mortgagee of such contest and
thereafter shall, upon Mortgagee's request, promptly provide a bond, cash
deposit or other security satisfactory to Mortgagee to protect Mortgagee's
interest and security should the contest be unsuccessful. If Mortgagor shall
fail to immediately discharge or provide security against any such claim or
demand as aforesaid, Mortgagee may do so and any and all expenses incurred by
Mortgagee, together with interest thereon at the Default Rate from the date
incurred by Mortgagee until actually paid by Mortgagor, shall be immediately
paid by Mortgagor on demand and shall be secured by this Mortgage and by any
other documents securing all or any part of the indebtedness evidenced by the
Note.
ARTICLE 1.8 Maintenance, Repairs, Alterations. Mortgagor shall keep
the Mortgaged Property or cause the same to be kept in good condition and repair
and fully protected from the elements to the reasonable satisfaction of
Mortgagee. Mortgagor shall not commit or permit any waste thereon and shall not
do or permit any act by which the Mortgaged Property shall become less valuable.
Mortgagor shall not remove, demolish or substantially or structurally alter any
building, structure or other Improvement without the prior permission of
Mortgagee, which shall not be unreasonably withheld or delayed, except (x) such
alterations as may be required by laws, ordinances or regulations, (y)
non-structural alterations costing less than $3,500,000 per project and (z)
erection or installation of shelves, bins, machinery and equipment of all kinds,
plumbing and wiring. Any removals of shelves, bins, machinery and equipment and
other items from the Mortgaged Property shall be subject to the provisions of
the Note. Mortgagor shall promptly restore in like manner any Improvements which
may be damaged or destroyed thereon and shall pay when due all claims for labor
performed and materials furnished therefor; and Mortgagor shall use and operate,
and shall require its lessees or licensees to use or operate, the Mortgaged
Property in compliance with all applicable laws, ordinances, regulations,
covenants, conditions, and restrictions, and with all applicable requirements of
any ground lease, lease or sublease now or hereafter affecting the Premises or
any part thereof. Mortgagee and its representative shall have access to the
Premises and Mortgaged Property at all reasonable times to determine whether
Mortgagor is complying with its obligations under this Mortgage.
ARTICLE 1.8 Condemnation. Should the Mortgaged Property or any part
thereof or interest therein be taken or damaged by reason of any public use or
improvement or condemnation proceeding, or by alteration in grade of any street,
or in any other manner ("Condemnation"), or should Mortgagor receive any notice
or other information regarding a Condemnation, Mortgagor shall give prompt
notice thereof to Mortgagee.
(a) Mortgagee shall be entitled to all compensation, awards
and other payments or relief granted in connection with a
Condemnation unless the Mortgaged Property is encumbered by either or
both of the Prior Mortgages in which case Mortgagee shall be entitled
to all compensation, awards and other payments or relief granted in
connection with a Condemnation that is in excess of the amount
thereof that is applied to the debts secured by the Prior Mortgages
and/or used for restoration or repair as a result of the
Condemnation, in either case, pursuant to the Prior Mortgages.
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Mortgagor shall be entitled, at its option, to commence, appear in
and prosecute in its own name any action or proceedings relating to
the Condemnation. Mortgagor shall not be entitled to make any
compromise or settlement in connection with a Condemnation without
the prior consent of the Mortgagee, such consent not to be
unreasonably withheld or delayed. All such compensation, awards,
payments, and relief, and proceeds awarded to Mortgagor (the
"Proceeds") are hereby assigned to Mortgagee and Mortgagor agrees to
execute such further assignments of the Proceeds as Mortgagee may
require.
(b) If any portion of the Mortgaged Property is so taken or
damaged, Mortgagee shall have the option in its sole and absolute
discretion to apply all the Proceeds, after deducting therefrom all
costs and expenses including reasonable attorneys' fees, incurred by
it in connection with the Proceeds, upon any indebtedness secured
hereby, or to apply all the Proceeds, after such deductions, to the
restoration of the Mortgaged Properly upon such conditions as
Mortgagee may determine.
(c) Any amounts received by Mortgagee hereunder (after such
deductions) shall, if retained by Mortgagee, be applied in payment of
any accrued interest and then in reduction of the then outstanding
principal of the indebtedness secured hereby, notwithstanding that
the same may not then be due and payable. Any amount so applied to
principal shall be applied to the payment of installments of
principal due pursuant to the Note in the inverse order of their due
dates and then to amounts due under the commercial revolving loan and
shall not affect Mortgagor's obligations to continue to make payments
not prepaid pursuant to the foregoing.
(d) Mortgagor shall provide to Mortgagee copies of all
correspondence and other submissions to or from the holders of the
Prior Mortgages relating to a Condemnation.
ARTICLE 1.9 Actions by Mortgagee to Preserve Security, etc. If
Mortgagor fails to make any payment or to do any act as and in the manner
provided for in the Mortgage or the Note, Mortgagee, in its own discretion,
without obligation so to do and upon ten (10) days' notice to or demand upon
Mortgagor (except in an emergency, in which case, no notice or demand is
required of Mortgagee) and without releasing Mortgagor from any obligation, may
make or do the same in such manner and to such extent as Mortgagee may deem
necessary to protect the security hereof. Mortgagor shall pay upon demand all
expenses incurred or paid by Mortgagee (including reasonable attorneys' fees,
appraisers' fees and court, costs) on account of the exercise -of any of the
aforesaid rights or privileges or on account of any litigation which may arise
in connection with the Mortgage or the Note or on account of any attempt,
without litigation, to enforce the terms of the Mortgage or Note. If the
Mortgaged Property or any part thereof shall be advertised for foreclosure sale
and not sold, Mortgagor shall pay all costs in connection therewith.
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If Mortgagee is called upon to pay any sums of money to
protect or sustain the Lien of this Mortgage after ten (10) days' notice to and
failure of the Mortgagor to do so, all such monies advanced or due hereunder
shall become immediately due and payable, together with interest thereon at the
Default Rate from the date of such advance to the date of the actual receipt of
payment thereof by Mortgagee.
Mortgagor agrees that if Mortgagee shall obtain a money
judgment, in accordance with the terms and conditions of the indebtedness
secured hereby and/or the Mortgage, then interest thereon at the Default Rate
shall accrue and be due and payable on said money judgment from the date of
entry thereof, until the said judgment is paid in full.
If the Mortgage is placed in the hands of an attorney for
the collection of any sum payable hereunder, Mortgagor agrees to Pay all costs
of collection, including, without limitation, reasonable attorneys' fees,
appraisers' fees, costs and expenses, incurred by Mortgagee, either with or
without the institution of any action or proceeding, and in addition all costs,
disbursements and allowances provided by law. All such costs of collection
incurred pursuant to this Section shall be deemed to be part of the indebtedness
secured by the Mortgage.
ARTICLE 1.10 Survival of Warranties. Mortgagor shall satisfy and
perform fully and faithfully the obligations of Mortgagor contained in the Note
and each agreement of Mortgagor incorporated by reference therein or herein or
issued by Mortgagor pursuant to the Note, and any modification or amendment of
any of the foregoing. Copies of the same are on file in the office of the
Mortgagor. All representations, warranties and covenants of Mortgagor contained
therein or incorporated by reference shall survive the closing and funding of
the loan evidenced by the Note and shall remain continuing obligations,
warranties and representations of Mortgagor during any time when any portion of
the obligations secured by the Mortgage remains outstanding.
ARTICLE 1.11 Additional Security. If Mortgagee at any time holds
additional security for any of the obligations secured hereby, it may enforce
the sale thereof or otherwise realize upon the same, at its option, either
before or concurrently with or after a foreclosure or sale hereunder without
being deemed to have made an election thereby or of having accepted the security
provided hereby or the proceeds hereof or such additional security or the
proceeds thereof in full settlement of the Note.
ARTICLE 1.12 Inspections, etc. Mortgagee, or its agents,
representatives or workers, are authorized to enter at any reasonable time upon
or in any part of the Premises for the purpose of inspecting the same or the
Mortgaged Property and for the purpose of performing any of the acts it is
authorized to perform under the terms of the Mortgage. Mortgagor agrees to
permit the maintenance in a prominent place on the Premises during the period of
any construction of any Improvements of a financing sign by Mortgagee.
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ARTICLE 1.13 Liens. Mortgagor shall pay and promptly discharge, at
Mortgagor's cost and expense, all liens, encumbrances and charges (other than
this Mortgage or any prior mortgage referred to in Exhibit B upon the Mortgaged
Property or any part thereof or interest therein, except as hereinafter
otherwise provided. Mortgagor shall have the right to contest in good faith the
validity of any such lien, encumbrance or charge, provided Mortgagor shall first
deposit with Mortgagee a bond or other security satisfactory to Mortgagee in
such amounts as Mortgagee shall reasonably require, but not more than one
hundred twenty-five percent (125%) of the amount of the claim, and provided
further that Mortgagor shall thereafter diligently proceed to cause such lien,
encumbrance or charge to be removed and discharged. If Mortgagor shall fail to
discharge any such lien, encumbrance or charge, then, in addition to any other
right or remedy of Mortgagee, Mortgagee may, but shall not be obligated to,
discharge the same, either by paying the amount claimed to be due, or by
procuring the discharge of such lien, encumbrance, or charge by depositing in
court a bond for the amount claimed or otherwise giving security for such claim,
or in such manner as is or may be prescribed by law. Any amount so paid by
Mortgagee shall, at Mortgagee's option, become immediately due and payable with
interest thereon at the Default Rate and shall be deemed part of the
indebtedness secured by the Mortgage. Impositions that are liens are governed by
the provisions of Section 1.9 and not by this Section.
ARTICLE 1.14 Subordinate Mortgages. Mortgagor shall not create,
assume or suffer to exist in respect of the Mortgaged Property, or any part
thereof, any mortgage or lien (other than the Mortgage), without Mortgagee's
prior written consent, which consent shall not be unreasonably withheld.
ARTICLE 1.15 Continued Occupancy. If at any time the then existing
use or occupancy of any part of the Mortgaged Property shall, pursuant to any
zoning or other law, ordinance or regulation, be permitted only so long as such
use or occupancy shall continue, Mortgagor shall promptly advise Mortgagee
thereof and shall not cause or permit such use or occupancy to be discontinued
without the prior consent of Mortgagee.
ARTICLE 1.16 Transfer. Except to the extent provided in Section 4.13,
Mortgagor shall not sell, lease, encumber or otherwise transfer any of its
interest or ownership in the Mortgaged property without the written consent of
Mortgagee, which consent may be withheld in Mortgagee's sole and absolute
discretion.
ARTICLE 2
SECURITY AGREEMENT
ARTICLE 2.1 Creation of Security Interest. Mortgagor hereby grants to
Mortgagee a security interest as contemplated by the Uniform Commercial Code as
in effect in New York, in the Fixtures, Proceeds, Rents, Profits, and Personalty
(collectively, the "Collateral") located on or at the Mortgaged Property, now or
hereafter used in the operation of the Mortgaged Property, whether or not
located on or at the Mortgaged Property, and all accessions and accessories
thereto, substitutes and replacements therefor and any interest now existing or
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hereafter arising with respect thereto for the purpose of securing all
obligations of Mortgagor set forth in the Mortgage.
ARTICLE 3
DEFAULTS AND REMEDIES
ARTICLE 3.1 Events of Default. Any one or more of the following shall
constitute an Event of Default under the Mortgage, and the Note.
(a) The occurrence of any Event of Default under the Note
or any other instrument given by or agreement made by Mortgagor
pursuant to or in connection with the Note.
(b) Failure of Mortgagor to pay, when due or, if no time
for payment is specified, within thirty (30) days after rendition of
an xxxx or statement therefor, the amount of any costs, expenses or
fees (including attorneys' fees) of Mortgagee, as required by any
provision of the Mortgage with any interest thereon as provided in
the Mortgage.
(c) Failure to pay any Imposition or insurance premium
required hereunder when the same shall be due or to exhibit to
Mortgagee, within ten (10) days after written demand therefor, proof
of payment of any Imposition or insurance premium required hereunder.
(d) The actual or threatened alteration, demolition or
removal of any of the Improvements in contravention of the provisions
of this Mortgage without the prior consent of Mortgagee.
(e) Damage to any of the Improvements or Collateral in any
manner, to the extent of more than $50,000 which is not replaced by
Mortgagor within a reasonable period of time after such damage
(including a reasonable period of time for Mortgagor to obtain any
insurance proceeds on account of such damage).
(f) Failure to maintain the Improvements and Collateral in
good repair in accordance with Section 1.12 hereof.
(g) Failure to comply with any requirements or order or
notice of violation or ordinance issued by any governmental authority
claiming jurisdiction over the Mortgaged Property within the time
specified in such order, notice, law, ordinance, or regulation as the
same may be extended or stayed, or, if not so specified, within three
(3) months from the issuance thereof.
(h) The passage of any law deducting from the value of land
for the purposes of taxation any lien thereon, or changing in any way
the taxation of mortgages or debts -secured thereby, if Mortgagor
cannot or does not pay the same.
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(i) Failure of Mortgagor for thirty (30) days after notice
to substantially comply with or perform, or any material breach or
violation by Mortgagor of, any warranty, representation, covenant,
agreement, prohibition, restriction or condition contained herein, in
the Note, or in any other instrument given by or agreement made by
Mortgagor pursuant to or in connection with the Note.
(j) The institution of any bankruptcy, reorganization or
insolvency proceedings against Mortgagor or other owner of the
Mortgaged Property or the appointment of a receiver or a similar
official with respect to any part of the Mortgaged Property or all or
a substantial part of the properties of Mortgagor or other owner of
the Mortgaged Property and a failure to have such proceedings
dismissed or such appointment vacated within a period of ninety (90)
days.
(k) The institution of any voluntary bankruptcy,
reorganization or insolvency proceedings by Mortgagor or other owner
of the Mortgaged Property, or the appointment of a receiver or a
similar official with respect to any part of the Mortgaged Property
or all or a substantial part of the properties of Mortgagor or other
owner of the Mortgaged Property.
(l) Any sale, assignment, transfer, conveyance or other
change in the legal or equitable title to the Mortgaged Property, or
any portion thereof (including the execution of any contract of sale
relating thereto but excluding leases which are governed by Section
4.13), whether voluntarily or involuntarily by operation of law and
whether or not of record or for consideration without Mortgagee's
written consent, which consent may be given or withheld by Mortgagee
in its sole and absolute discretion.
(m) The creation of any lien or encumbrance on the
Mortgaged Property, including, without limitation, any junior
financing on the Mortgaged Property but not including easements for
utilities or rights of way that do not materially and adversely
impact on the value of the Mortgaged Property.
(n) The occurrence of any default or Event of Default under
any other encumbrance affecting the Mortgaged Property, including,
specifically, but not limited to, any prior mortgage on the Mortgaged
Property, or any part thereof.
(o) The dissolution or liquidation of Mortgagor.
ARTICLE 3.2 Acceleration Upon Default, Additional Remedies. In the
event that one or more of the Events of Default as above provided shall occur
and be continuing, the remedies available to Mortgagee shall include, but not
necessarily be limited to, any one or more of the following:
(a) Mortgagee may declare the entire unpaid balance of the
indebtedness secured hereby due and payable in full in accordance
with the Note.
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(b) Mortgagee may take immediate possession of the
Mortgaged Property or any part thereof (which Mortgagor agrees to
surrender to Mortgagee) and manage, control or lease the same to such
person or persons and at such rental as it may deem proper; and
collect, with or without taking possession of the Mortgaged Property,
all the Rents and Profits therefrom, including those past due as well
as those thereafter accruing, with the right in Mortgagee to cancel
any lease, sublease or tenancy for any cause which would entitle
Mortgagor to cancel the same; to make such expenditures for
maintenance, repairs and costs of operation as it may deem advisable;
and after deducting the cost thereof including the fee of a
third-party property manager if one is engaged by Mortgagee, to apply
the residue to the payment of any sums which are unpaid on the
indebtedness secured hereby. The taking of possession and/or the
collection of rents under this paragraph shall not prevent concurrent
or later proceedings for the foreclosure of the Mortgaged Property as
provided elsewhere herein.
(c) Mortgagee may apply to any court of competent
jurisdiction for the appointment of a receiver or similar official to
manage and operate the Mortgaged Property, or any part thereof, and
to apply the not Rents and Profits therefrom to the payment of the
interest and principal of the Indebtedness due under the Note and any
other obligations of Mortgagor to Mortgagee hereunder. In the event
of such application, Mortgagor consents to the appointment of such
receiver or similar official and agrees that such receiver or similar
official may be appointed without notice to Mortgagor, without regard
to the adequacy of any security for the debt and without regard to
the solvency of Mortgagor or any other person, firm or corporation
who or which may be liable for the payment of the indebtedness
secured hereby.
(d) Mortgagee may exercise any or all of the remedies
available to a secured party under the Connecticut Uniform Commercial
Code, including, but not limited to:
(1) Either personally or by means of a court
appointed receiver, to take possession of all or any of the
Collateral and exclude therefrom Mortgagor and all others
claiming under Mortgagor, and thereafter to hold, store,
use, operate, manage, maintain and control, make repairs,
replacements, alterations, additions and improvements to
and exercise all rights and powers of Mortgagor in respect
to the Collateral or any part thereof In the event
Mortgagee demands or attempts to take possession of the
Collateral in the exercise of any rights under any of the
instruments which secure the Note, Mortgagor promises and
agrees to promptly turn over and deliver complete
possession thereof to Mortgagee;
(2) Without notice to or demand upon Mortgagor,
to make such payments and do such acts as Mortgagee may
deem necessary to protect its security interest in the
Collateral, including without limitation, paying,
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purchasing, contesting or compromising any encumbrance,
charge or lien which is prior to or superior to the
security interest granted hereunder, and in exercising any
such powers or authority to pay all expenses incurred in
connection therewith;
(3) To require Mortgagor to assemble the
Collateral or any portion thereof at a place designated by
Mortgagee and reasonably convenient to both parties, and
promptly to deliver such Collateral to Mortgagee, or an
agent or representative designated by it. Mortgagee, and
its agents and representatives, shall have the right to
enter upon any or all of Mortgagor's premises and property
to exercise Mortgagee's rights hereunder;
(4) To sell, lease or otherwise dispose of the
Collateral at public sale, with or without having the
Collateral at the place of sale, and upon such terms and in
such manner as Mortgagee may determine. Mortgagee may be a
Purchaser at any such sale, and unless the Collateral are
perishable or threaten to decline speedily in value or are
of a type customarily sold on a recognized market,
Mortgagee shall give Mortgagor at least ten (10) days'
prior written notice of the time and place of any public
sale of the Collateral or other intended disposition
thereof. Such notice may be mailed to Mortgagor at the
address hereinafter set forth for notices.
(5) Mortgagee shall have the right to foreclose
the Mortgage and in an action or proceeding to foreclosure
the Mortgage, the Mortgaged Property may be foreclosed in
parts or as an entirety.
ARTICLE 3.3 Additional Provisions. Mortgagor expressly agrees as
follows:
(a) All remedies available to Mortgagee with respect to the
Mortgage shall be cumulative and may be pursued concurrently or
successively. No delay by Mortgagee in exercising any such remedy
shall operate as a waiver thereof or preclude the exercise thereof
during the continuance of that or any subsequent default.
(b) The obtaining of a judgment or decree on the Note,
shall not in any manner affect the lien of the Mortgage upon the
Mortgaged Property, and the debt represented by said judgment or
decree shall be secured hereby to the same extent as the Note is now
secured.
(c) The only limitation upon the foregoing agreements as to
the exercise of Mortgagee's remedies is that there shall be but one
full and complete satisfaction of the indebtedness secured hereby.
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ARTICLE 3.4 Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of any indebtedness secured hereby and performance of all
obligations contained herein and to exercise all rights and powers under the
Mortgage or under any other agreement of Mortgagor or any laws now or hereafter
in force, notwithstanding that some or all of the said indebtedness and
obligations secured hereby may now or hereafter be otherwise secured, whether by
mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the
acceptance of the Mortgage nor its enforcement shall prejudice or in any manner
affect Mortgagee's right to realize upon or enforce any other security now or
hereafter held by Mortgagee, it being agreed that Mortgagee shall be entitled to
enforce the Mortgage and any other security now or hereafter held by Mortgagee
in such order and manner as Mortgagee may in its absolute discretion determine.
No remedy herein conferred upon or reserved to Mortgagee is intended to be
exclusive of any other remedy herein or by law provided or permitted, but each
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given to Mortgagee or to which it otherwise may be entitled may
be exercised, concurrently or independently, from time to time and as often as
may be deemed expedient by Mortgagee and it may pursue inconsistent remedies.
ARTICLE 4
MISCELLANEOUS
ARTICLE 4.1 Successors and Assigns. In the event title to the
Mortgaged Property or any portion thereof becomes vested in other than
Mortgagor, Mortgagee may, without notice to Mortgagor, deal with such successor
or successors in interest with reference to the Mortgage and the debt hereby
secured in the same manner as with Mortgagor, and such action shall in no way
affect the liability of Mortgagor hereunder or under the indebtedness secured
hereby or the lien or priority of the Mortgage with respect to any part of the
Mortgaged Property. All provisions of the Mortgage shall be binding upon and
inure to the benefit of the parties thereto and their respective heirs,
executors, administrators, successors and assigns, except as otherwise herein
expressly provided.
ARTICLE 4.2 Notices. All notices, demands, requests, permissions,
consents or approvals ("Notices") given by either party hereto to the other
party shall be in writing and, if sent by telecopier or facsimile transmission
followed by a hard copy sent by regular mail. All notices, demands and requests
by Mortgagee to Mortgagor shall be deemed given (a) if sent by United States
registered or certified mail, postage prepaid, return receipt requested, three
business days after being postmarked, (b) if sent by overnight delivery service,
when received at the applicable address or when delivery is refused or (c) if
sent by telecopier or facsimile transmission, when receipt of such transmission
is acknowledged, addressed as follows:
If to Mortgagee:
Triple J Associates
000 Xxx Xxxxxx
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West Hempstead, New York 1152
If to Mortgagor:
J. Adam Holdings, Inc. 000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Copy to:
Cyruli, Xxxxxx and Zizmor, LLP
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention:Xxxx Xxxxxxx, Esq.
Mortgagor or Mortgagee may change the address to which notices are to be given
by notice to the other as provided herein.
Mortgagor shall deliver to Mortgagee, promptly upon
receipt of same, copies of all notices, certificates, documents and instruments
received by it which materially affect any part of the Mortgaged Property
covered hereby, including, notices from any lessor, lessee, sublessee or
mortgagee claiming that Mortgagor is in default under any terms of any lease,
sublease or mortgage.
ARTICLE 4.3 Modifications in Writing. This Mortgage may not be
changed, terminated or modified orally or in any other manner than by an
instrument in writing signed by the party against whom enforcement is sought.
ARTICLE 4.4 Captions. The captions or headings at the beginning of
each Section hereof are for the convenience of the parties and are not a part of
the Mortgage.
ARTICLE 4.5 Invalidity of Certain Provisions. If any term, clause or
provision of the Mortgage shall be adjudged to be invalid, the validity of the
remainder shall not be affected thereby, and each such term, clause, and
provision shall be valid and enforceable to the fullest extent permitted by law.
If the lien of the Mortgage is adjudged to be invalid or unenforceable as to any
part of the debt, or if the lien is invalid or unenforceable as to any part of
the Mortgaged Property, the unsecured portion of the debt as determined by
Mortgagee may at Mortgagee's option be declared due and payable and shall be
completely paid prior to the payment of the secured portion of the debt, and all
payments made on the debt, whether voluntary or otherwise, shall be considered
to have been first paid on and applied to the full payment of that portion of
-the debt which is not secured or fully secured by the lien of the Mortgage.
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ARTICLE 4.6 Governing Law and Construction of Clauses. This Mortgage
shall be governed and construed by the laws of the State of New York.
ARTICLE 4.7 Terms. The words "Mortgagor" and "Mortgagee," together
with any pronoun or pronouns in connection therewith (and the possessive form of
any such pronoun or pronouns), shall include the singular, plural, masculine,
feminine and neuter, as the context may require. Whenever used, the singular
number shall include the plural, the plural the singular, and the use of any
gender shall include all genders, as the context may require. Any list of one or
more items preceded by the word "including" shall not be deemed limited to the
stated items but shall be without limitation.
ARTICLE 4.8 Counting of Days. The term "days"when used herein shall
mean calendar days. If any time period ends on a Saturday, Sunday or holiday
officially recognized by the state within which the Real Estate is located, the
period shall be deemed to end on the next succeeding business day. The term
"business day" when used herein shall mean a weekday, Monday through Friday,
except a legal holiday or a day on which banking institutions in the State in
which the Real Estate is located are authorized by law to be closed.
ARTICLE 4.9 No Merger. It is the desire and intention of the parties
hereto that this Mortgage and the lien hereof do not merge in fee simple title
to the Premises. It is hereby understood and agreed that should Mortgagee
acquire any additional or other interests in or to the Premises or the ownership
thereof, then, unless a contrary intent is manifested by Mortgagee as evidenced
by an appropriate document duly recorded, this Mortgage and the lien hereof
shall not merge in such other or additional interests in or to the Premises
toward the end that this Mortgage may be foreclosed as if owned by a stranger to
said other or additional interests.
ARTICLE 4.10 Counterparts. This Mortgage may be executed in any
number of counterparts, each of which shall be effective only upon delivery and
thereafter shall be deemed an original, and all of which shall be taken to be
one and the same instrument, for the same effect as if all parties hereto had
signed the same signature page. Any signature page of this Mortgage may be
detached from any counterpart of this Mortgage without impairing the legal
effect of any signatures thereon and may be attached to another counterpart of
this Mortgage identical in form hereto but having attached to it one or more
additional signature pages.
ARTICLE 4.11 Prejudgment Remedies. MORTGAGOR ACKNOWLEDGES THAT (A)
THE TRANSACTION OF WHICH THIS MORTGAGE IS A PART IS A COMMERCIAL TRANSACTION,
AND NOT A CONSUMER TRANSACTION AND TO THE EXTENT PERMITTED BY LAW WAIVES ANY
RIGHT TO A NOTICE AND HEARING OR TO SEEK MORTGAGEE TO POST A BOND UNDER CHAPTER
903a OF THE CONNECTICUT GENERAL STATUTES OR OTHER STATUTE OR STATUTES -AFFECTING
PREJUDGMENT REMEDIES AND AUTHORIZES HOLDER'S ATTORNEY TO ISSUE A WRIT FOR A
PREJUDGMENT REMEDY WITHOUT COURT ORDER, PROVIDED THE COMPLAINT SHALL SET FORTH A
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COPY OF THIS WAIVER, AND FURTHER WAIVES ANY RIGHT TO A TRIAL BY JURY OF ANY OR
ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN MORTGAGEE AND MORTGAGOR
OR THEIR SUCCESSORS, UNDER OR CONNECTED WITH THIS MORTGAGE OR ANY OF ITS
PROVISIONS, AND (B) THE OBLIGATION EVIDENCED BY THIS MORTGAGE IS AN EXEMPTED
TRANSACTION UNDER THE TRUTH-IN-LENDING ACT, 15 U.S.C. ss.1601 ET SEQ.
ARTICLE 4.12 Credit Line Mortgage. This Mortgage is intended to be a
"credit line mortgage" as defined in Section 281 of the New York Real Property
Law (as the same may be amended or modified from time to time "Section 281").
Accordingly, this Mortgage shall secure not only the original indebtedness under
the Note but also the indebtedness created by future advances made under the
Note within twenty (20) years from the date of the recording of the Mortgage to
the same extent and with the same priority of lien as if such future advances
had been made at the time the Mortgage was recorded, regardless of whether any
advance shall be made under the Note on the date hereof and/or any indebtedness
shall be outstanding at any time that any advance shall be made under the Note.
Further, the total amount of indebtedness that may be secured by this Mortgage
may increase or decrease at any time and from time to time, but the amount so
secured at any one time shall not exceed the Mortgage Amount plus (a) interest
and any other charges or fees which may accrue thereon pursuant to the Note,
this Mortgage or any of the other Documents and/or (b) any disbursements made by
Mortgagee to protect the security of this Mortgage with interest thereon at the
Default Rate. The foregoing is intended to be an express provision under Section
281.
NOW, THEREFORE, if the indebtedness secured hereby shall be
well and truly paid according to its tenor, and if
all agreements and provisions contained in the Note, or any other instrument
given by or agreement made by Mortgagor pursuant to or in connection with the
Note are fully kept and performed, then this Mortgage shall become null and
void; otherwise to remain in full force and effect.
IN WITNESS WHEREOF, Mortgagor has hereunto set or caused to
be set its hand as of the day and year first
hereinbefore written.
Signed and Delivered
in the presence of.
J. Adam Holdings, Inc
By: /s/ Xxxxxxx Xxxxxx
----------------------
Name: Xxxxxxx Xxxxxx
Title: President
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