LOAN TRANCHE ____
This instrument was prepared by and, when recorded, should be returned to:
XXXXXXXX CAPITAL INCORPORATED
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
================================================================================
LEASEHOLD MORTGAGE,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
dated as of _________________, 1997
from
SYBRA, INC.
a Michigan corporation,
as Mortgagor,
to
XXXXXXXX CAPITAL INCORPORATED
a Delaware corporation
as Mortgagee
================================================================================
Property: [ ] County, __________________(Restaurant No. ____)
LOAN TRANCHE ___
LEASEHOLD MORTGAGE,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
THIS LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND FIXTURE
FILING (herein called this "Leasehold Mortgage") dated as of
___________________, 1997, is executed by SYBRA, INC., a Michigan corporation,
as the surviving entity of a merger with Newco, as the mortgagor (herein,
together with its successors and assigns, called the "Mortgagor"), with a
mailing address at [ ], Michigan _________, to XXXXXXXX CAPITAL INCORPORATED, a
Delaware corporation, as the mortgagee (herein, together with its successors and
assigns, called the "Mortgagee"), with a mailing address at 0000 Xxxxxxx Xxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000.
RECITALS:
A. Loan Agreement. Reference is hereby made to that certain Loan
Agreement (the "Loan Agreement") dated as of the date hereof by and between
Mortgagor, as borrower, and Mortgagee, as lender. Pursuant to the Loan
Agreement, Mortgagee has agreed to loan certain funds to Mortgagor (the "Loan")
and Mortgagor has executed and delivered to Mortgagee those certain promissory
notes evidencing Mortgagor's obligation to repay the Loan (individually a "Note"
and collectively as the "Note").
B. Secured Obligations. The obligations secured by this Leasehold
Mortgage (the "Obligations") are comprised at any time of the following:
(i) the full and punctual payment by Mortgagor when due of (a) all
principal of and interest on the Loan and the Note, the aggregate principal
amount as of the date hereof is [ ] Dollars and No/100 ($[ ],000.00); and (b)
all other amounts payable by Mortgagor pursuant to the Loan Agreement, the Note
or any other Loan Document;
(ii) the full and punctual payment when due of all amounts payable by
Mortgagor under this Leasehold Mortgage, including, without limitation,
indemnification obligations and advances made to protect the Subject Property;
(iii) the performance and observance by Mortgagor of each other term,
covenant, agreement, requirement, condition and other provision to be performed
or observed by Mortgagor under any Loan Document; and
(iv) the performance and observance by Mortgagor of each other term,
covenant, agreement, requirement, condition and other provision to be performed
or observed by Mortgagor under all amendments, supplements, consolidations,
replacements, renewals, extensions or other modifications of the foregoing, in
each case whether now existing or hereafter arising.
The Obligations shall include, without limitation, any interest, Yield
Maintenance Amount, costs, fees and expenses which accrue on or with respect to
any of the foregoing, whether before or after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of Mortgagor.
GRANTING CLAUSES
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, for the purpose of securing the due and punctual payment,
performance and observance of the Obligations and intending to be bound hereby,
Mortgagor hereby grants, conveys, mortgages, transfers and assigns to Mortgagee
as expressly set forth below, and for the purpose and upon the terms and
conditions hereinafter set forth, with power of sale and right of entry and
possession, subject to the provisions of Section 6.15, all of the property and
rights described in the following Granting Clauses (all of which property and
rights are herein collectively called the "Subject Property"), to wit:
GRANTING CLAUSE I.
Land. All estate, right, title and interest of Mortgagor, if any, in,
to, under or derived from those certain lots, pieces, tracts or parcels of land
located in certain cities and/or counties in the State of ____________________,
more particularly described
in Exhibit A, Part I attached hereto and incorporated herein by this reference
(the "Real Estate"; together with the Leasehold Estate, herein called the
"Land").
Leasehold Estate. All estate, right, title and interest of Mortgagor
in, to, under or derived from the lease described in Exhibit A, Part II (the
"Site Lease") affecting the Real Estate (the "Leasehold Estate"); together with
all amendments, supplements, consolidations, extensions, renewals and other
modifications of the Site Lease now or hereafter entered into in accordance with
the provisions thereof; together with all other, further, additional or greater
estate, right, title or interest of Mortgagor in, to, under or derived from the
Real Estate, the Leasehold Estate and the Improvements now or hereafter located
thereon which may at any time be acquired by Mortgagor by the terms of the Site
Lease by reason of the exercise of any option thereunder or otherwise.
GRANTING CLAUSE II.
Improvements. All right, title and interest of Mortgagor, if any, in,
to, under or derived from all buildings, structures, facilities and other
improvements of every kind and description now or hereafter located on the Land
or attached to the improvements which by the nature of their location thereon or
attachment thereto are real property under applicable law (the foregoing being
collectively the "Improvements"; and the Land with the Improvements thereon and
Equipment therein and Appurtenant Rights thereto being collectively called the
"Property").
GRANTING CLAUSE III.
Equipment. All estate, right, title and interest of Mortgagor in, to,
under or derived from all machinery, equipment, fixtures and accessions thereof
and renewals, replacements thereof and substitutions therefor, and all other
customary franchise fast food restaurant equipment and other tangible property
of every kind and nature whatsoever owned by Mortgagor, or in which Mortgagor
has or shall have an interest, now or hereafter located upon the Land, or usable
exclusively in connection with the present or future operation and occupancy of
the Land or the Improvements (hereinafter collectively called the "Equipment").
GRANTING CLAUSE IV.
Appurtenant Rights. All estate, right, title and interest of
Mortgagor, if any, in, to, under or derived from all tenements, hereditaments
and appurtenances now or hereafter relating to the Property; all development,
operating or similar rights appurtenant to the Land (including, without
limitation, all rights arising from reciprocal access agreements, use or
development agreements, and parking agreements); and all easements, licenses and
rights of way now or hereafter appertaining to the Property (hereinafter
collectively called "Appurtenant Rights").
GRANTING CLAUSE V.
General Intangibles, Payment Rights and Agreements. All estate, right,
title and interest of Mortgagor in, to, under or derived from all contract
rights, chattel paper, instruments, general intangibles, accounts, guaranties
and warranties, letters of credit, and documents, in each case relating to the
Property or to the present or future operation or occupancy of the Property, and
all plans, specifications, maps, surveys, studies, records, insurance policies,
guarantees and warranties, all relating to the Property or to the present or
future operation or occupancy of the Property, all management contracts, all
supply and service contracts for water, sanitary and storm sewer, drainage,
electricity, steam, gas, telephone and other utilities relating to the Property
(the foregoing being herein collectively called the "Agreements") and all other
agreements affecting or relating to the use, enjoyment or occupancy of the Land
or the Equipment.
GRANTING CLAUSE VI.
Leases. All estate, right, title and interest of Mortgagor in, to,
under and derived from any lease, tenancy, subtenancy, license, concession or
other occupancy agreement relating to the Property (together with all
amendments, supplements, consolidations, replacements, restatements, extensions,
renewals and other modifications of any thereof) (the "Leases"), other than the
Site Lease assigned under Granting Clause I, now or hereafter in effect, whether
or not of record; and the right to bring actions and proceedings under the Lease
or for the enforcement thereof and to do anything which Mortgagor or any lessor
is or may become entitled to do under the Lease.
GRANTING CLAUSE VII.
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Rents, Issues and Profits. All estate, right, title and interest of
Mortgagor in, to, under or derived from all rents, royalties, issues, profits,
receipts, revenue, income, earnings and other benefits now or hereafter accruing
with respect to all or any portion of the Property, including all rents and
other sums now or hereafter payable pursuant to the Leases; and all other
claims, rights and remedies now or hereafter belonging or accruing with respect
to the Property, including oil, gas and mineral royalties (herein collectively
called the "Rents"), all of which Mortgagor hereby irrevocably directs be paid
to Mortgagee, subject to the license granted to Mortgagor pursuant to Section
5.07, to be held, applied and disbursed as provided herein.
GRANTING CLAUSE VIII.
Permits. All estate, right, title and interest of Mortgagor in, to,
under or derived from all licenses, certificates, variances, consents and other
permits now or hereafter pertaining to the Property and all estate, right, title
and interest of Mortgagor in, to, under or derived from all tradenames or
business names relating to the Property or the present or future operation or
occupancy of the Property (herein collectively called the "Permits"), excluding,
however, from the grant under this Granting Clause (but not the definition of
the term "Permits" for the other purposes hereof) any Permits which cannot be
transferred or encumbered by Mortgagor without causing a default thereunder or a
termination thereof.
GRANTING CLAUSE IX.
Proceeds and Awards. All estate, right, title and interest of
Mortgagor in, to, under or derived from all proceeds of any sale, transfer,
taking by Condemnation (or any proceeding or purchase in lieu thereof), whether
voluntary or involuntary, of any of the Subject Property described above,
including all Insurance Proceeds and awards and title insurance proceeds, now or
hereafter relating to any of the Subject Property, all of which Mortgagor hereby
irrevocably directs be paid to Mortgagee to the extent provided hereunder, to be
held, applied and disbursed as provided in this Leasehold Mortgage.
TO HAVE AND TO HOLD the Subject Property unto Mortgagee, its
successors and assigns, under and subject to the terms and conditions of this
Leasehold Mortgage, including, but not limited to, Section 6.15, and for the
security and enforcement of the prompt and complete payment and performance when
due of all of the Obligations and the performance and observance by Mortgagor of
all covenants, obligations and conditions to be performed or observed by
Mortgagor pursuant to the Loan Agreement, the Note, and the other Loan
Documents.
PROVIDED, HOWEVER, that this Leasehold Mortgage is upon the condition
that, if Mortgagor shall pay in full all of the Obligations and perform and
observe all such covenants, obligations and conditions, this Leasehold Mortgage
shall cease, terminate pursuant to and in accordance with Section 6.02 and,
thereafter, be of no further force effect (except as provided in Sections 4.01,
4.02 and 5.06 hereof); otherwise this Leasehold Mortgage shall, subject to the
provisions of Section 6.15, remain and be in full force and effect.
FURTHER PROVIDED, that Mortgagee may from time to time release or
reconvey all or a portion of the Subject Property, in accordance with the terms
and conditions of the Loan Agreement and applicable law.
MORTGAGOR ADDITIONALLY COVENANTS AND AGREES WITH MORTGAGEE AS FOLLOWS:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Capitalized terms used, but not otherwise
defined herein, are defined in, or by reference to the Loan Agreement and have
the same meanings herein as therein.
ARTICLE II
CERTAIN WARRANTIES AND COVENANTS
OF MORTGAGOR
SECTION 2.01. Authority and Effectiveness. (a) Mortgagor represents,
warrants and covenants that (i) Mortgagor is and shall be a corporation duly
organized, validly existing and in good standing under the laws of its state of
incorporation or organization, and qualified to do business and in good standing
in the state in which the Property is located and has and will have all
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governmental licenses, authorizations, consents and other qualifications
required to carry on its business as now conducted, and, subject to the
provisions of Section 6.15, to execute, deliver and perform this Leasehold
Mortgage; (ii) the execution, delivery and performance by Mortgagor of this
Leasehold Mortgage are within Mortgagor's corporate power, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official and do not and,
subject to the provisions of Section 6.15, will not contravene, or constitute a
default under, any provision of the organizational documents of Mortgagor or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon Mortgagor or relating to the Property; and (iii) subject to the provisions
of Section 6.15, this Leasehold Mortgage constitutes a legal, valid, binding and
enforceable agreement of Mortgagor.
(b) Mortgagor shall cause the representations and warranties in
subsection (a) of this Section to continue to be true in each and every respect
at all times prior to the termination of this Leasehold Mortgage.
SECTION 2.02. Title and Further Assurances. (a) Subject to the
provisions of Section 6.15, Mortgagor hereby represents and warrants to
Mortgagee that:
(i) Mortgagor is the owner of a valid and subsisting leasehold
interest in the Land and the Improvements and holds good and
marketable title to the Improvements, the Equipment and the other
Subject Property, free from all liens, security interests, Leases,
charges or encumbrances whatsoever, except for such liens as are
permitted under the Loan Agreement. Notwithstanding anything else
herein to the contrary, Mortgagor makes no representation or warranty
with respect to any interest in the fee to the real property upon
which the Subject Property is located (the "Fee Interest") or to any
rents or income arising therefrom;
(ii) Mortgagor has good and lawful right to mortgage the Subject
Property to Mortgagee without the consent of any Person other than
those consents which have been obtained;
(iii) the lien created by this Leasehold Mortgage constitutes a
valid, binding and enforceable lien on the Subject Property; and
(iv) the Site Lease creates and constitutes in the tenant
thereunder a valid and subsisting leasehold interest in the Leasehold
Estate; the Site Lease has not been modified or amended, except as
disclosed to Mortgagee in writing; there is no default under the Site
Lease, all rents due have been paid in full; no action has commenced
and is pending to terminate the Site Lease; and Mortgagor is the owner
of the leasehold interest under the Site Lease and Mortgagor is the
owner of the Improvements, in each case subject to the provisions of
the Site Lease.
(b) Subject to the provisions of Section 6.15, Mortgagor shall (i)
cause the representations and warranties in subsection (a) of this Section to
continue to be true in each and every respect at all times prior to the
termination of this Leasehold Mortgage; and (ii) preserve, protect, warrant and
defend (A) the estate, right, title and interest of Mortgagor in and to its
Subject Property (B) the validity, enforceability and priority of the lien this
Leasehold Mortgage, and (C) the right, title and interest of Mortgagee and any
purchaser at any sale of the Subject Property hereunder or relating hereto.
(c) Upon the recording of this Leasehold Mortgage in the county
recording office of the county in which the Land is located, the lien of this
Leasehold Mortgage shall be a perfected mortgage lien and fixture filing on the
Subject Property.
(d) Subject to the provisions of Section 6.15, Mortgagor shall perform
all acts that may be necessary to continue, maintain, preserve, protect and
perfect the Subject Property, the lien granted to Mortgagee therein and the
perfected priority of such lien. Upon request by Mortgagee, Mortgagor shall at
its sole cost and expense (i) promptly correct any defect or error which may be
discovered in this Leasehold Mortgage or any financing statement or other
document relating hereto; and (ii) promptly execute, acknowledge, deliver,
record, and re-record, register and re-register, and file and re-file this
Leasehold Mortgage and any fixture filings, financing statements or other
documents which Mortgagee may reasonably require from time to time (all in form
and substance reasonably satisfactory to Mortgagee) in order (A) to effectuate,
complete, perfect, continue or preserve the lien of this Leasehold Mortgage on
the Subject Property, whether now owned or hereafter acquired, (B) to correct or
change the name of Mortgagor following any change in its identity, sale of the
Subject Property, or assumption of the Loan pursuant to Section 2.07(b), or (C)
to effectuate, complete, perfect, continue or preserve any right, power or
privilege granted or intended to be granted to Mortgagee hereunder.
SECTION 2.03. Secured Obligations. Mortgagor shall duly and punctually
pay, perform and observe the Obligations binding upon Mortgagor.
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SECTION 2.04. Impositions. Subject to Section 2.06 and Section 2.09,
Mortgagor shall (i) duly and punctually pay all Impositions before any fine,
penalty, interest or cost may be added for nonpayment; and (ii) promptly notify
Mortgagee of the receipt by Mortgagor of any notice of default in the payment of
any Imposition. The term "Impositions" means all taxes, assessments and other
governmental charges, ground rents, or other rents, charges, excises, levies,
fees and other charges (public or private) which may be assessed, levied or
imposed on, or in respect of or be a lien upon the Subject Property or any part
thereof or any interest therein.
SECTION 2.05. Compliance with Legal and Insurance Requirements. (a)
Mortgagor represents and warrants that (i) as of the date hereof, the Property
and the use and operation thereof comply with all Legal Requirements (as defined
below), Insurance Requirements (as defined below) and Contractual Obligations
except for any failure to comply therewith which could not have a Material
Adverse Effect; (ii) there is no material default under any Legal Requirement,
Insurance Requirement and Contractual Obligation; and (iii) subject to the
provisions of Section 6.15, the execution, delivery and performance of this
Leasehold Mortgage does not require any consent the failure of which to obtain
would contravene any provision of and constitute a material default under, any
Legal Requirement, Insurance Requirement or Contractual Obligation.
Notwithstanding the limitations set forth in the preceding sentence, Mortgagor
represents and warrants that as of the date hereof, the Property and the use
thereof comply with all Environmental Laws and that Mortgagor has complied and
shall comply with all Environmental Laws.
(b) Subject to Section 2.06 and Section 2.09, Mortgagor shall promptly
perform and observe, or cause to be performed and observed and cause the
Property to comply with, if the failure to so perform and observe would have a
Material Adverse Effect, (i) all laws, rules, regulations, judgments, orders,
permits, licenses, authorizations and other requirements of and agreements with
all governments, department agencies, courts and officials, which now or
hereafter shall be applicable to the Subject Property or any part thereof or any
use or condition thereof including, without limitation, all Environmental Laws
(herein collectively called the "Legal Requirements"); (ii) all terms of any
insurance policy covering or applicable to the Subject Property or any part
thereof as required by the Loan Agreement, all requirements of the issuer of any
such policy, and all orders, rules, regulations and other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) applicable to the Subject Property or any part thereof or any use or
condition thereof (herein collectively called the "Insurance Requirements"); and
(iii) all Permits required for any construction, reconstruction, repair,
alteration, addition, improvement, maintenance, use and operation of the
Property.
(c) Mortgagor shall promptly notify Mortgagee of the receipt by
Mortgagor of any notice of default under any Legal Requirement, Insurance
Requirement, Contractual Obligation or Permit or of the receipt by Mortgagor of
any notice of any threatened or actual termination of any Permit or Insurance
Policy, Franchise Agreement or Site Lease and furnish to Mortgagee a copy of
such notice of default or termination.
SECTION 2.06. Impound and Security Account. At Mortgagee's option and
upon its demand and except where and to the degree prohibited by law, Mortgagor
shall, until all Obligations have been paid in full, pay to Mortgagee each month
an amount estimated by Mortgagee to be equal to (i) the Impositions, (ii) all
payments and premiums with respect to the Insurance Requirements, and (iii) all
lease payments under the Site Lease next due. Estimated payments of Impositions,
Insurance Requirements and Site Lease payments shall be calculated by dividing
the amount next due by, in each instance, the number of months to lapse
preceding the month in which the same, respectively, will become due. All sums
so paid shall not bear interest, except to the extent and in the minimum amount
required by law, and Mortgagee shall, unless Mortgagor is otherwise in default
hereunder or under any obligation secured hereby, apply said funds to the
payment of, or at the sole option of Mortgagee timely release said funds to
Mortgagor for timely application to and payment of, such Impositions, Insurance
Requirements and Site Lease payments. However, upon the occurrence of an Event
of Default by Mortgagor hereunder or under any obligation secured hereby,
Mortgagee may, at its sole option, apply all or any part of said sums to any
Obligations or to advance sums to pay such Imposition, Insurance Requirement or
Site Lease payment, which advance shall not cure Mortgagor's Default hereunder.
SECTION 2.07. Sale; Liens. (a) Except as otherwise provided in the
Loan Agreement, Mortgagor shall not sell, assign, transfer, convey, lease or
permit to be sold, assigned, transferred, conveyed, leased or otherwise disposed
of, the Subject Property (other than Inventory sold in the normal course of
business) or any part thereof or interest therein (for the purposes of this
Section, a "Transfer"), and shall not create, suffer or permit to be created or
exist any lien attaching to the Subject Property or any part thereof or interest
therein, except as permitted by the Loan Agreement. In the event of any Transfer
or the creation, suffering, permitting to be created of any lien attaching to
the Subject Property or any part thereof, that is not expressly permitted
hereunder or under the terms of the Loan Agreement and is without the prior
written consent of Mortgagee, Mortgagee shall have the absolute right at its
option, without prior demand or notice, to declare all of the Obligations
immediately due and payable and pursue its rights and remedies under Article 5.
Consent to one such Transfer or lien shall not be deemed to be a waiver of the
right to require the consent to future or successive Transfers or liens.
Mortgagee shall have the right to grant or deny such consent in its absolute
discretion. If
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consent should be given to a Transfer and if this Leasehold Mortgage is not
released to the extent of the Subject Property transferred or subjected to a
lien by a writing signed by Mortgagee and recorded in the proper city, town,
county or parish records, then any such Transfer or lien shall be subject to
this Leasehold Mortgage and any such transferee shall assume all obligations
hereunder and agree to be bound by all of the provisions contained hereunder.
(b) The Loan may be assumed by a new borrower provided each of the
conditions set forth in Section 2.08 of the Loan Agreement are met.
SECTION 2.08. Status and Care of the Property.
(a) Mortgagor represents and warrants that (i) the Property is served
by all necessary water, sanitary and storm sewer, electric, gas, telephone and
other utility facilities which facilities have capacities which are sufficient
to serve the current and anticipated future use and occupancy of the Property as
presently constructed; (ii) the Property has legal access to public streets or
roads sufficient to serve the current and anticipated future use and operation
of the Property as presently constructed; (iii) to the extent that the Property
is located in an area identified by the Secretary of Housing and Urban
Development or a successor thereto as an area having special flood hazards or as
an area designated as "flood prone" or a "flood risk area" pursuant to the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, and any amendments or supplements thereto or substitutions therefor,
Mortgagor has purchased flood insurance to the extent available; and (iv) all
activities and conditions on the Property are currently in compliance with all
Legal Requirements.
(b) Subject to the terms, conditions and provisions of the Loan
Agreement, the Mortgagor (i) shall use and operate the Property, or cause the
same to be used and operated, pursuant to the terms and provisions of a
Franchise Agreement with Arby's, Inc., a true and correct copy of which has been
previously delivered to Mortgagee, and Mortgagor shall continue to operate the
Property as a Arby's restaurant and shall not permit or suffer any default to
occur under said Franchise Agreement; (ii) agrees that all activities on the
Property shall at all times comply with all Legal Requirements; (iii) shall
operate and maintain the Property, or cause the same to be operated and
maintained, in good order, repair and condition except (subject to the
provisions of this Section) for reasonable wear and tear; (iv) subject to the
provisions of Section 3.02, shall promptly make, or cause to be made, all
repairs, replacements, alterations, additions and improvements of and to the
Property necessary or appropriate to keep the Property in good order, repair and
condition; (v) shall not initiate or affirmatively support any change in the
applicable zoning adversely affecting the Property, seek any variance (or any
change in any variance), under the zoning adversely affecting the Property; and
(vi) shall, promptly after receiving notice or obtaining knowledge of any
proposed or threatened change in the zoning affecting the Property which would
result in the current use of the Property being a non-conforming use, notify
Mortgagee thereof and diligently contest the same at Mortgagor's expense by any
action or proceeding deemed appropriate by Mortgagor or requested by Mortgagee.
SECTION 2.09. Permitted Contests. After prior notice to Mortgagee,
Mortgagor may contest at Mortgagor's expense, by appropriate legal or other
proceedings conducted in good faith and with due diligence, the amount, validity
or application, in whole or in part, of any Imposition or lien therefor, any
Legal Requirement, or any lien of any laborer, mechanic, materialman, supplier
or vendor, provided that (a) the Subject Property, or any part thereof or estate
or interest therein, shall not be in any danger of being sold, forfeited or lost
by reason of such proceedings; (b) in the case of (i) liens of laborers,
mechanics, materialmen, suppliers or vendors or (ii) the Impositions, or liens
therefor, such proceedings shall suspend the foreclosure of any such lien or any
other collection thereof from the Subject Property; (c) in the case of a Legal
Requirement, Mortgagee shall not be in any danger of any criminal liability or,
unless Mortgagor shall have furnished a bond or other security therefor
reasonably satisfactory to Mortgagee, any additional civil liability for failure
to comply therewith, and the Subject Property, or any part thereof or estate or
interest therein, shall not be subject to the imposition of any lien as a result
of such failure which is not properly contested pursuant to this Section 2.09;
and (d) if reasonably required by Mortgagee, Mortgagor shall have furnished to
Mortgagee a bond or other security reasonably satisfactory to Mortgagee.
SECTION 2.10. Inspection. Mortgagee and its authorized agents and
employees and any person designated by Mortgagee shall have the right to enter
on and into the Property at all reasonable times and, except in the event of an
emergency, after reasonable notice for the purpose of inspecting the same,
provided such inspection shall not unreasonably disturb business activities at
the Property.
SECTION 2.11. Compliance with Instruments. Mortgagor shall promptly
perform and observe, or cause to be performed and observed, all of the terms,
covenants and conditions of all other instruments affecting the Property if the
failure to so perform or observe would have a Material Adverse Effect and shall
do or cause to be done all things necessary to preserve intact and unimpaired
any and all easements, appurtenances and other interests and rights in favor of
or constituting any portion of the Subject Property if the failure so to do
would have a Material Adverse Effect.
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SECTION 2.12. Improvements. All improvements on the Land lie wholly
within the boundary and building restriction lines of the Land and no
improvements on adjoining properties encroach upon the Land in any respect so as
to have a Material Adverse Effect on the use, operation or value of the
Property.
SECTION 2.13. Casualty; Condemnation. The Subject Property is free of
material damage and waste and, to Mortgagor's knowledge, there is no proceeding
pending or threatened for the total or partial Condemnation thereof.
SECTION 2.14. Zoning and Other Laws. The Property and the use thereof,
separate and apart from any other properties, constitute a legal and conforming
use in compliance with the zoning regulations for which the Property is located.
The Property complies with all applicable subdivision laws, ordinances and
regulations, such that failure to comply would not have a Material Adverse
Effect. All inspections, licenses and certificates required, whether by law,
ordinance, regulation or insurance standards, to be made or issued with respect
to the Property have been made by or issued by appropriate authorities, such
that a failure to obtain such inspections, licenses or certificates would not
have a Material Adverse Effect.
SECTION 2.15. Site Lease. (a) Mortgagor represents and warrants that
(i) Exhibit A contains a description of the Site Lease; (ii) Mortgagor has
furnished to Mortgagee a copy of the Site Lease certified as true and correct by
Mortgagor; (iii) except as described in Exhibit A, the Site Lease has not been
modified, assigned by Mortgagor or, to the knowledge of Mortgagor, assigned by
the landlord thereunder; (iv) the Site Lease is in full force and effect and, to
the knowledge of Mortgagor, there is no default, or existing condition which
with the giving of notice or passage of time or both would cause a default under
the Site Lease; and (v) subject to the provisions of Section 6.15, the
execution, delivery and performance of this Leasehold Mortgage do not require
any consent under, and will not contravene any provision of or cause a default
under, the Site Lease.
(b) Mortgagor (i) shall duly and punctually pay, perform and observe
(unless being paid pursuant to Section 2.06 or being contested pursuant to
Section 2.09) all of its obligations under the Site Lease; (ii) shall do all
things reasonably necessary or appropriate to enforce, preserve and keep
unimpaired the rights of Mortgagor; (iii) shall not enter into any amendment or
other agreement or take any other action or fail to take any action that would
modify or terminate any rights or obligations of Mortgagor or of the landlord
under the Site Lease or subordinate any right of Mortgagor under the Site Lease
to any lien; (iv) shall notify Mortgagee in writing not later than ninety (90)
days prior to the last date on which Mortgagor can exercise (A) any right to
extend the term of the Site Lease or (B) any option to purchase or otherwise
acquire the interest of the landlord under the Site Lease, of the existence of
such right or option; (v) to the extent the current term of the Site Lease does
not extend beyond the maturity date of the Loan, shall exercise (not later than
thirty (30) days prior to the last date on which Mortgagor may timely do so)
each right or option of Mortgagor under the Site Lease to extend the term
thereof; (vi) shall notify Mortgagee (promptly after receipt or
contemporaneously when given, as the case may be) of the receipt or giving by
Mortgagor of any notice of default under, or any notice of the possible or
actual termination of, the Site Lease, accompanied by a copy of such notice (the
failure of Mortgagor to comply with this subclause (vi) shall constitute an
Event of Default hereunder); and (vii) shall promptly notify Mortgagee, upon
Mortgagor's acquisition of knowledge thereof, of the occurrence of any event or
condition which with the passage of time or giving of notice would constitute a
default under the Site Lease. Mortgagee is hereby irrevocably appointed the true
and lawful attorney of Mortgagor and any subsequent owner of the Property to
exercise, in its own name and stead or in the name of Mortgagor, each right or
option of Mortgagor under the Site Lease to extend the term thereof or to
purchase or otherwise acquire the interest of the landlord under the Site Lease,
and for that purpose Mortgagee may execute all necessary documents and
instruments to exercise each option and may substitute Persons with like power,
Mortgagor or any subsequent owner of the Property hereby ratifying and
confirming all that their said attorney or such substitutes shall lawfully do by
virtue hereof. Nevertheless, Mortgagor or any subsequent owner of the Property,
if so requested in writing by Mortgagee shall ratify and confirm the exercise of
any such option by executing and delivering to Mortgagee or to such purchasers
any instrument which, in the judgment of Mortgagee, is suitable or appropriate
therefor. Mortgagor acknowledges (i) that this power of attorney is given to
Mortgagee in consideration for Mortgagee's (A) making of the Loan and (B) not
requiring Mortgagor to exercise the option to extend the term of the Site Lease
or exercise any purchase option before the Closing Date, (ii) that it is
reasonable for Mortgagee to require the leasehold term to extend beyond the
maturity of the Note; (iii) that if any option is exercised by Mortgagee,
Mortgagor agrees it is and shall remain solely liable with respect thereto as
tenant under the Site Lease and releases Mortgagee from any and all liability
with respect thereto or claims relating thereto.
(c) So long as any portion of the Obligations shall remain unpaid,
unless Mortgagee shall otherwise consent, the fee title to the Land and the
leasehold estate therein created pursuant to the provisions of the Site Lease
shall not merge but shall always be kept separate and distinct, notwithstanding
the union of such estates in Mortgagor, the owner, or in any other person by
purchase, operation of law or otherwise. Mortgagee reserves the right, at any
time, to release portions of the Subject Property, including, but not limited
to, the leasehold estate created by the Site Lease, with or without
consideration, at Mortgagee's election, without waiving or
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affecting any of its rights hereunder or under the Loan Documents and any such
release shall not affect Mortgagee's rights in connection with the portion of
the Subject Property not so released.
(d) So long as any portion of the Obligations remains unpaid, if
Mortgagor shall become the owner and holder of the fee title to the Land, the
lien of this Leasehold Mortgage shall be spread to cover Mortgagor's fee title
to the Land and said fee title shall be deemed to be included in the Subject
Property. Mortgagor agrees to execute any and all documents or instruments
necessary to subject its fee title to the Land to the lien of this Leasehold
Mortgage, in form and substance satisfactory to Mortgagee.
(e) Mortgagor hereby unconditionally assigns, transfers and sets over
to Mortgagee all of Mortgagor's claims and rights to the payment of damages
arising from any rejection by the owner of the Site Lease under the Bankruptcy
Code. Mortgagee shall have the right to proceed in its own name or in the name
of Mortgagor in respect of any claim, suit, action or proceeding relating to the
rejection of the Site Lease, including, without limitation, the right to file
and prosecute, to the exclusion of Mortgagor, any proofs of claim, complaints,
motions, applications, notices and other documents, in any case in respect of
the owner under the Bankruptcy Code. Subject to the provisions of Section 6.15,
this assignment constitutes a present, irrevocable and unconditional assignment
of the foregoing claims, rights and remedies, and shall continue in effect until
all of the Obligations shall have been satisfied and discharged in full. Any
amounts received by Mortgagee as damages arising out of the rejection of the
Site Lease as aforesaid shall be applied first to all reasonable costs and
expenses of Mortgagee (including, without limitation, reasonable attorneys' fees
and disbursements) incurred in connection with the exercise of any of its rights
or remedies under this Section 2.15(e).
(f) Mortgagor shall not, without Mortgagee's prior written consent,
elect to treat the Site Lease as terminated under Section 365(h)(1) of the
Bankruptcy Code. Any such election made without Mortgagee's prior written
consent shall be void.
(g) If pursuant to Section 365(h)(1) of the Bankruptcy Code, Mortgagor
seeks to offset against the Rent reserved in the Site Lease the amount of any
damages caused by the non-performance by the owner of any of the owner's
obligations under the Site Lease after the rejection by the owner of the Site
Lease under the Bankruptcy Code, Mortgagor shall, prior to effecting such
offset, notify Mortgagee of its intention to do so, setting forth the amounts
proposed to be so offset and the basis therefor. Mortgagee shall have the right,
within (10) days after receipt of such notice from Mortgagor, to reasonably
object to all or any part of such offset, and, in the event of such reasonable
objection, Mortgagor shall not effect any offset of the amounts so objected to
by Mortgagee for a period of thirty (30) days after Mortgagee has delivered its
objection notice to Mortgagor during which time Mortgagee shall have the right
to bring its objections to the attention of any court supervising the bankruptcy
of the owner of the Site Lease and both Mortgagee and Mortgagor agree to abide
by the decision of any such court. If (A) Mortgagee has failed to object as
aforesaid within ten (10) days after notice from Mortgagor or (B) the court
fails to render its decision within the above-mentioned thirty (30) day period,
Mortgagor may proceed to effect such offset in the amounts set forth in
Mortgagor's notice. Neither Mortgagee's failure to object as aforesaid nor any
objection or other communication between Mortgagee and Mortgagor relating to
such offset shall constitute an approval of any such offset by Mortgagee.
(h) If any action, proceeding, motion or notice shall be commenced or
filed in respect of Mortgagor or the Subject Property in connection with any
case under the Bankruptcy Code (other than a case under the Bankruptcy Code
commenced with respect to Mortgagor), Mortgagee shall have the option, to the
exclusion of Mortgagor, exercisable upon notice from Mortgagee to Mortgagor, to
conduct and control any such litigation with counsel of Mortgagee's choice.
Mortgagee may proceed in its own name or in the name of Mortgagor in connection
with any such litigation, and Mortgagor agrees to execute any and all powers,
authorizations, consents and other documents required by Mortgagee in connection
therewith. Mortgagor shall pay to Mortgagee all reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
paid or incurred by Mortgagee in connection with the prosecution or conduct of
any such proceedings within five (5) days after notice from Mortgagee setting
forth such costs and expenses in reasonable detail. Any such costs or expenses
not paid by Mortgagor as aforesaid shall be secured by the lien of this
Leasehold Mortgage and shall be added to the principal amount of the
indebtedness secured hereby. Mortgagor shall not commence any action, suit,
proceeding or case, or file any application or make any motion, in respect of
the Site Lease in any such case under the Bankruptcy Code (other than a case
under the Bankruptcy Code commenced with respect to Mortgagor) without the prior
written consent of Mortgagee, which consent shall not be unreasonably withheld.
(i) Mortgagor shall promptly, after obtaining knowledge thereof,
notify Mortgagee of any filing by or against the owner of the Land of a petition
under the Bankruptcy Code, setting forth any information available to Mortgagor
as to the date of such filing, the court in which such petition was filed, and
the relief sought therein. Mortgagor shall promptly deliver to Mortgagee
following receipt any and all notices, summonses, pleadings, applications and
other documents received by Mortgagor in connection with any such petition and
any proceedings relating thereto.
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(j) If there shall be filed by or against Mortgagor a petition under
the Bankruptcy Code, and Mortgagor, as the tenant under the Site Lease, shall
determine to reject the Site Lease pursuant to Section 365(a) of the Bankruptcy
Code, then Mortgagor shall give Mortgagee not less than ten (10) days' prior
notice of the date on which Mortgagor shall apply to the bankruptcy court for
authority to reject the Site Lease. Mortgagee shall have the right, but not the
obligation, to serve upon Mortgagor within such 10-day period a notice stating
that (i) Mortgagee demands that Mortgagor assume and assign the Site Lease to
Mortgagee pursuant to Section 365 of the Bankruptcy Code and (ii) Mortgagee
covenants to cure or provide adequate assurance of prompt cure of all defaults
and provide adequate assurance of future performance of Mortgagor's obligations
under the Site Lease. If Mortgagee serves upon Mortgagor the notice described in
the preceding sentence, Mortgagor shall not seek to reject the Site Lease and
shall seek court approval to comply with the demand provided for in clause (i)
of the preceding sentence within thirty (30) days after the notice shall have
been given, subject to the performance by Mortgagee of the covenant provided for
in clause (ii) of the preceding sentence.
(k) Effective upon the entry of an order for relief in respect of
Mortgagor under the Bankruptcy Code, Mortgagor hereby assigns and transfers to
Mortgagee a non-exclusive right to apply to the bankruptcy court under Section
365(d)(4) of the Bankruptcy Code for an order extending the period during which
the Site Lease may be rejected or assumed.
ARTICLE III
INSURANCE, CASUALTY AND CONDEMNATION
SECTION 3.01. Insurance. Mortgagor shall comply with all of the terms
and provisions and shall maintain, or cause to be maintained, with respect to
the Property the insurance required by the Loan Agreement. If Mortgagor fails to
maintain the insurance policies required to be maintained under this Section,
Mortgagee shall have the right (but not the obligation) to obtain such insurance
policies and pay the premiums therefor. If Mortgagee obtains such insurance
policies or pays the premiums therefor, upon demand, Mortgagor shall reimburse
Mortgagee for its expenses in connection therewith, together with interest
thereon, pursuant to Section 4.03.
SECTION 3.02. Casualty and Condemnation. Mortgagor's right to collect
or use any Insurance Proceeds or awards resulting from any casualty loss or
Condemnation shall be subject to, and applied in accordance with, the terms and
provisions of the Loan Agreement. Mortgagor hereby authorizes and directs any
affected insurance company and any affected governmental body responsible for
such Condemnation to make payment of the Insurance Proceeds or awards directly
to Mortgagee. Mortgagor hereby irrevocably assigns to Mortgagee all Insurance
Proceeds and awards to which Mortgagor may become entitled by reason of its
interests in the Property if a loss occurs.
ARTICLE IV
EXPENSES AND INDEMNIFICATION
SECTION 4.01. Expenses. Upon written demand, Mortgagor (a) shall
reimburse Mortgagee for all reasonable out-of-pocket expenses, including
reasonable attorneys' fees and expenses, paid or incurred by Mortgagee in
connection with (i) any Default or alleged Default, (ii) the perfection,
protection, exercise or enforcement of any right or remedy under or with respect
to this Leasehold Mortgage or any other Loan Document, and (iii) the execution,
delivery, administration or performance of this Leasehold Mortgage or any other
Loan Document and any consent or waiver thereunder and any amendment thereof, or
(b) if an Event of Default occurs, shall reimburse Mortgagee for all reasonable
out-of-pocket expenses, including reasonable attorneys' fees and expenses, (i)
paid or incurred by Mortgagee in connection with (A) such Event of Default and
collection, bankruptcy, insolvency and enforcement proceedings resulting
therefrom or (B) the exercise or enforcement of any right or remedy under or
with respect to this Leasehold Mortgage or any other Loan Document or (ii)
otherwise paid or incurred with respect to this Leasehold Mortgage or any other
Loan Document, together, in each case, with interest thereon at the Default Rate
from the date paid by Mortgagee through the date repaid to Mortgagee, as the
case may be. All such funds advanced in the reasonable exercise of Mortgagee's
judgment that the same are needed to protect the Subject Property, the lien of
this Leasehold Mortgage, or the Obligations are to be deemed obligatory advances
hereunder and shall constitute additional indebtedness secured by this Leasehold
Mortgage. The obligations of Mortgagor under this Section shall be part of the
Obligations and shall survive any foreclosure or transfer in lieu of foreclosure
of this Leasehold Mortgage and the release of this Leasehold Mortgage.
SECTION 4.02. Indemnification. To the fullest extent permitted by law,
Mortgagor shall protect, defend, indemnify and save harmless Mortgagee, and its
stockholders, directors, officers, employees, beneficial owners, attorneys,
agents and other representatives or affiliates of, and partners in, Mortgagee
(each an "Indemnified Person") from and against any and all liabilities, losses,
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actions, fines, injunctions, obligations, claims, damages (whether direct or
consequential), penalties, causes of action, costs and expenses of any kind or
nature (including, without limitation, in respect of or for reasonable
attorneys' fees and expenses whether incurred within or outside the judicial
process), imposed upon or incurred by or asserted against any such Indemnified
Person including, without limitation, by reason of (i) this Leasehold Mortgage
or the Subject Property or any interest therein or receipt of any Rents; (ii)
any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Subject Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (iii) any failure on the part of Mortgagor to perform or comply with
any of the terms of this Leasehold Mortgage; (iv) any violation or failure to
comply with any Legal Requirement by Mortgagor or the Property in any way; and
(v) performance of any labor or services or the furnishing of any materials or
other property in respect of the Subject Property or any part thereof, provided
that any claims arising out of the willful misconduct or gross negligence of any
Indemnified Person or act of any Indemnified Person after taking title to the
Property shall be excluded from the foregoing indemnification of such
Indemnified Person. Any amounts payable to Mortgagee by reason of the
application of this Section 4.02 shall be secured by this Leasehold Mortgage as
an Obligation and shall become immediately due and payable and shall bear
interest at the Default Rate from the date loss or damage is sustained by
Mortgagee until paid. The obligations and liabilities of Mortgagor under this
Section 4.02 shall survive any termination, satisfaction, assignment, entry of a
judgment of foreclosure or delivery of a deed in lieu of foreclosure of this
Leasehold Mortgage and the exercise of any rights or remedies by Mortgagee.
SECTION 4.03. Interest. If any Obligation arising hereunder
(including, to the extent permitted under applicable law, any interest
obligation) shall not be paid when due, such Obligation shall bear interest at
the Default Rate commencing from the due date through the date paid. Such
interest shall be part of the Obligations and shall be secured by this Leasehold
Mortgage.
SECTION 4.04. Increased Costs. In the event of the enactment after the
date hereof of any applicable law deducting from the value of the Property for
the purpose of taxation of any lien thereon or changing in any way the
applicable taxation of mortgages, deeds of trust or other liens or obligations
secured thereby, or the manner of collection of such taxes, so as to affect this
Leasehold Mortgage, the Obligations or Mortgagee, upon demand by Mortgagee, to
the extent permitted under applicable law, Mortgagor shall pay or reimburse
Mortgagee for all taxes, assessments or other charges which Mortgagee is
obligated to pay as a result thereof. Such taxes, assessments or other charges
shall be part of the Obligations and shall be secured by this Leasehold
Mortgage.
ARTICLE V
DEFAULTS, REMEDIES AND RIGHTS
SECTION 5.01. Events of Default. The occurrence of any of the
following events shall be deemed an event of default ("Event of Default")
hereunder and shall, at the option of Mortgagee make all amounts then remaining
unpaid on the Obligations immediately due and payable, all without further
demand, presentment, notice or other requirements of any kind, all of which are
expressly waived by Mortgagor, and the lien, encumbrance and security
interest evidenced or created hereby shall be subject to foreclosure in any
manner provided for herein or provided for by law and all other remedies
available at law or in equity:
(a) The occurrence of any Event of Default (as defined in the Loan
Agreement) under the Loan Agreement; or
(b) Mortgagor shall default in the performance or observance of any
term, covenant or condition required to be observed by Mortgagor under this
Leasehold Mortgage which remains uncured for a period of ten (10) business days
after receipt of written notice from Mortgagee; provided, however, if such
default cannot be cured with such period, Mortgagor shall have such longer
period of time to cure such default provided, in Mortgagee's sole discretion,
Mortgagor is proceeding with due diligence, but in no event shall such period of
time exceed thirty (30) Business Days; provided, further, that the cure periods
set forth in this Section 5.01(b) are subject in all cases to the terms,
conditions and provisions of the Loan Agreement;
SECTION 5.02. Fixtures. Upon the occurrence of any Event of Default,
or at any time thereafter, Mortgagee may, to the extent permitted under
applicable law, elect to treat the fixtures included in the Subject Property
either as real property or personal property, or both, and proceed to exercise
such rights as apply thereto. With respect to any sale of real property included
in the Subject Property made under the power of sale herein granted and
conferred, Mortgagee may, to the extent permitted by applicable law, include in
such sale any personal property and fixtures included in the Subject Property
relating to such real property.
SECTION 5.03. Remedies Cumulative. All notice and cure periods
provided in this Leasehold Mortgage, the Loan Agreement or any other Loan
Document shall run concurrently with any notice or cure periods provided under
applicable law. No remedy or right of Mortgagee hereunder, under the Loan
Agreement and any other Loan Document or otherwise, or available under
applicable law, shall be exclusive of any other right or remedy, but each such
remedy or right shall be in addition to every other remedy
10
or right now or hereafter existing at law or in equity under any such document
or under applicable law. No failure or delay by Mortgagee in exercising any
right hereunder shall operate as a waiver thereof or of any other right nor
shall any single or partial exercise of any such right preclude any other
further exercise thereof or of any other right. Unless otherwise specified in
such waiver or consent, a waiver or consent given hereunder shall be effective
only in the specific instance and for the specific purpose for which given.
Every such remedy or right may be exercised concurrently or independently, and
when and as often as may be deemed expedient by Mortgagee. All obligations of
Mortgagor, and all rights, powers and remedies of Mortgagee expressed herein
shall be in addition to, and not in limitation of, those provided by law, equity
or in the Loan Agreement and any other Loan Document.
SECTION 5.04. Possession of Property. Mortgagor hereby waives, while
any Event of Default exists, all right to the possession, income, earnings,
revenues, issues, profits and Rents of the Property. Mortgagee or a Receiver (as
the case may be as the Person exercising the rights under this Section) is
hereby expressly authorized and empowered to the extent permitted by applicable
law, but not obligated, while any Event of Default exists, (i) to enter into and
upon and take possession of, and operate all facilities on, the Property or any
part thereof, personally, or by its agents or attorneys, and exclude Mortgagor
therefrom without liability for trespass, damages or otherwise; (ii) to enter
upon and take and maintain possession of all of the documents, books, records,
papers and accounts of Mortgagor relating to the possession and operation of the
Subject Property; (iii) to conduct, either personally or by its agents, the
business of the Property; (iv) to exercise all rights of Mortgagor with respect
to the Subject Property, including, without limitation, the right to xxx for or
otherwise collect the Rents, including those that are unpaid; (v) to complete
any Alteration or Restoration in progress on the Property at the expense of
Mortgagor at reasonable and customary cost or at such cost previously agreed to
by Mortgagor, and (vi) to apply all income of the Property, to the extent
Mortgagor has any right to such income, less the necessary or appropriate
expenses of collection thereof, either for the operation, care and preservation
of the Property, or, at the election of the Person exercising the rights under
this Section in its sole discretion, as provided in Section 5.09 hereof. The
Person exercising the rights under this Section is also hereby granted full and
complete authority while any Default exists (vii) to employ watchmen to protect
the Subject Property; (viii) to continue any and all outstanding contracts for
the erection and completion of Improvements to the Property; (ix) to make all
necessary and proper repairs, renewals, replacements, alterations, additions,
betterments and improvements to the Property that, in its sole discretion, it
may deem appropriate; (x) to insure and reinsure the Property for all risks
incidental to Mortgagee's possession, operation and management thereof; (xi) to
make and enter into any contracts obligations wherever necessary in its own name
for the operation, care and preservation of the Subject Property, and (xii) to
pay and discharge all debts, obligations and liabilities incurred thereby, all
at the expense of Mortgagor. The Person exercising the rights under this Section
shall not be liable to account for any action taken hereunder, and shall not be
liable for any loss sustained by Mortgagor resulting from any act or omission of
such Person, except to the extent such loss is caused by such Person's willful
misconduct or gross negligence. All such expenditures by the Person exercising
the rights under this Section shall be Obligations hereunder.
SECTION 5.05. Foreclosure; Receiver. While any Event of Default
exists, Mortgagee with or without entry, shall also have the following rights:
(a) to institute a proceeding or proceedings, by advertisement,
judicial process or otherwise, as provided under applicable law, for the
complete or partial foreclosure of this Leasehold Mortgage or the complete or
partial sale of the Subject Property under the power of sale hereunder or under
any applicable provision of law;
(b) to sell the Subject Property and all estate, right, title and
interest of Mortgagor therein as a whole or in separate parcels, at one or more
sales, at such time and place and upon such terms and conditions as may be
required by applicable law;
(c) to take such steps to protect and enforce rights, whether by
action, suit or proceeding in equity or at law, for the specific performance of
any provision in the Loan Documents, or in aid of the execution of any power
herein granted, or for any foreclosure hereunder, or for the enforcement of any
other appropriate legal or equitable remedy Mortgagee shall elect;
(d) to apply for the appointment of a receiver, supervisor, trustee,
liquidator, conservator or other custodian (a "Receiver") of the Subject
Property or any part thereof and all earnings, revenues, Rents, issues, profits
and income thereof, to the extent permitted by law without giving notice to any
other party and without regard to the adequacy or inadequacy of the security of
the Subject Property or the solvency of either Mortgagor or any other Person and
Mortgagor agrees that it shall not oppose the appointment of a Receiver; and
(e) to take all such other steps and to assert all such other rights
and remedies as shall be permitted by applicable law.
11
(f) Mortgagee understands and acknowledges that, on the date hereof,
Mortgagor has no present right, title or interest whatsoever in the Fee Interest
or to any rents or income arising therefrom, and therefore, until such time as
Mortgagor does own the Fee Interest, Mortgagee has no rights or power to sell or
offer for sale, or to force the sale of the Fee Interest.
The purchase money, proceeds or avails of any foreclosure or sale after default
and any other sums which then may be held by Mortgagee under this Leasehold
Mortgage shall be applied as provided in Section 5.09 hereof.
SECTION 5.06. No Liability on Mortgagee. Notwithstanding anything
contained herein, this Leasehold Mortgage is only intended as security for the
Obligations and Mortgagee shall not be obligated to perform or discharge, and
Mortgagee need not perform or discharge, any obligation, duty or liability of
Mortgagor with respect to any of the Subject Property. Mortgagee shall not have
responsibility for the control, care, management or repair of the Property nor
shall Mortgagee be responsible or liable for any negligence in the management,
operation, upkeep, repair or control of the Subject Property resulting in loss
or injury or death to any licensee, employee, tenant or stranger, unless
Mortgagee takes physical possession and occupancy of the Subject Property and
such loss, injury or death is not a result of the direct action by Mortgagee. No
liability shall be enforced or asserted against Mortgagee in its exercise of the
powers herein granted to it, and Mortgagor expressly waives and releases any
such liability. Should Mortgagee or any Person exercising rights on its behalf
incur any such liability, loss or damage, under or by reason hereof, or in the
defense of any claims or demands, Mortgagor agrees to reimburse Mortgagee and
such Person, immediately upon demand (provided such demand is accompanied by an
itemized statement) for the amount thereof, including costs, expenses and
reasonable attorneys' fees, and any such obligations of Mortgagor shall be
Obligations hereunder and shall survive any foreclosure or transfer in lieu of
foreclosure of this Leasehold Mortgage and the release of this Leasehold
Mortgage.
SECTION 5.07. Assignment of Leases. (a) Subject to paragraph (d) below
and the provisions of Section 6.15, the assignments of the Leases and the Rent
under Granting Clauses VI and VII are and shall be present, absolute and
irrevocable assignments by Mortgagor to Mortgagee and, subject to the license to
Mortgagor under Section 5.07(b), Mortgagee or a Receiver appointed pursuant to
Section 5.05(d) (as the case may be as the Person exercising the rights under
this Section) shall have the absolute, immediate and continuing right to collect
and receive all Rents now or hereafter, including during any period of
redemption, accruing with respect to the Property. At the request of Mortgagee
or such Receiver, Mortgagor shall promptly execute, acknowledge, deliver,
record, register and file any additional general assignment of the Leases or
specific assignment of any Lease which Mortgagee or such Receiver may require
from time to time (all in form and substance reasonably satisfactory to
Mortgagee of such Receiver) to effectuate, complete, perfect, continue or
preserve the assignments of the Leases and the Rents under Granting Clauses VI
and VII.
(b) As long as no Event of Default exists, Mortgagor shall have the
right under a license granted hereby, subject to Section 5.07(c), to collect all
Rents upon, but not prior to fifteen (15) days before, the due date thereof.
(c) If any Event of Default exists, Mortgagee or Receiver appointed
pursuant to Section 5.05(d) (as the case may be as the Person exercising the
rights under this Section) shall have the right to do any of the following: (i)
terminate the license granted under Section 5.07(b) by notice to Mortgagor (ii)
exercise the rights and remedies provided to Mortgagor under the Site Lease;
(iii) exercise the rights and remedies provided under Section 5.04, Section 5.05
or under applicable law; (iv) as attorney in-fact or agent of Mortgagor, or in
its own name as the Person exercising the rights under this Section and under
the powers herein granted, hold, operate, manage and control the Property and
all other Subject Property, either personally or by its agents, contractors or
nominees, with full power to use such measures, legal or equitable, as in its
discretion may be deemed proper and necessary to enforce the payment of any
Rents, the Leases and other Subject Property relating thereto (including actions
for the recovery of Rent, actions in forcible detainer and actions in distress
of Rent); (v) cancel or terminate any Lease or sublease for any cause or on any
ground which would entitle Mortgagor to cancel the same; (vi) elect to disaffirm
any Lease or sublease made subsequent hereto or subordinated to the lien hereof;
and (vii) perform such other acts in connection with the management and
operation of the Subject Property as the Person exercising the rights under this
Section in its discretion may deem proper, Mortgagor hereby granting full power
and authority to exercise each and every one of the rights, privileges and
powers contained herein at any and all times while an Event of Default exists
without notice to Mortgagor.
(d) Nothing in this Section 5.07 shall be construed to be an
assumption by the Person exercising the rights under this Section, or to
otherwise make such Person liable for the performance, of any of the obligations
of Mortgagor under the Leases.
SECTION 5.08. Sales. Except as otherwise provided herein, to the
extent permitted under applicable law, at the election of Mortgagee, the
following provisions shall apply to any sale of the Subject Property hereunder,
whether made pursuant to the power of sale hereunder, any judicial proceeding,
or any judgment or decree of foreclosure or sale or otherwise;
12
(a) Mortgagee or the court officer (as the case may be as the Person
conducting any sale) may conduct any number of sales as Mortgagee may direct
from time to time. The power of sale hereunder or with respect hereto shall not
be exhausted by any sale as to any part or parcel of the Subject Property which
is not sold, unless and until the Obligations shall have been paid in full, and
shall not be exhausted or impaired by any sale which is not completed or is
defective. A sale may be as a whole or in part or parcels and Mortgagor hereby
waives its right to direct the order in which the Subject Property or any part
or parcel thereof is sold.
(b) Any sale may be postponed or adjourned by public announcement at
the time and place appointed for such sale or such postponed or adjourned sale
without further notice.
(c) Any statement of fact or other recital made in any instrument
given by the Person conducting any sale as to the nonpayment of any Obligation,
the existence of an Event of Default, the amount of the Obligations due and
payable, the request to Mortgagee to sell, the notice of the time, place and
terms of sale and of the Subject Property to be sold having been duly given, or
any other act or thing having been duly done or not done by Mortgagor,
Mortgagee, or any other Person, shall be taken as conclusive and binding against
all other Persons as evidence of the truth of the facts so stated or recited.
(d) Any sale shall operate to divest all of the estate, right, title,
interest, claim and demand whatsoever, whether at law or in equity, of Mortgagor
in and to the Subject Property sold, and (to the extent permitted under
applicable law) shall be a perpetual bar both at law and in equity against
Mortgagor and any and all Persons claiming such Subject Property or any interest
therein by, through or under Mortgagor. Mortgagee understands and acknowledges
that on the date hereof, Mortgagor has no present estate, right, title or
interest whatsoever in the Fee Interest or to any rents or income arising
therefrom.
(e) At any sale, Mortgagee may bid for and acquire the Subject
Property sold and, in lieu of paying cash therefor may make settlement for the
purchase price by causing the Secured Parties to credit against the Obligations,
including the expenses of the sale and the cost of any enforcement proceeding
hereunder, the amount of the bid made therefor to the extent necessary to
satisfy such bid.
(f) In the event that Mortgagor or any Person claiming by, through or
under Mortgagor shall transfer or fail to surrender possession of the Subject
Property after any sale thereof, then Mortgagor or such Person shall be deemed
tenant at sufferance of the purchaser at such sale, subject to eviction by means
of forcible entry and unlawful detainer proceedings, or subject to any other
right or remedy available, hereunder or under applicable law.
(g) Upon any sale, it shall not be necessary for the Person conducting
such sale to have any Subject Property being sold present or constructively in
its possession.
(h) To the extent permitted under applicable law, in the event that a
foreclosure hereunder shall be commenced by Mortgagee, Mortgagee may at any time
before the sale abandon the sale, and may institute suit for the collection of
the Obligations or for the foreclosure of this Leasehold Mortgage; or in the
event that Mortgagee should institute a suit for collection of the Obligations
or the foreclosure of this Leasehold Mortgage, Mortgagee may at any time before
the entry of final judgment in said suit dismiss the same and sell the Subject
Property in accordance with the provisions of this Leasehold Mortgage.
SECTION 5.09. Application of Proceeds. The proceeds of any sale of any
of the Subject Property made pursuant to this Article V shall be applied as
follows:
(a) First, to the payment of all reasonable costs and expenses
incident to the enforcement of this Leasehold Mortgage paid or incurred by
Mortgagee or the agent for enforcement, protection or collection, including,
without limitation, reasonable costs, attorneys' fees, stenographers' fees,
costs of advertising, costs of documentary evidence of title (including title
search and insurance), all other related charges and costs, and a reasonable
compensation to the agents and attorneys of Mortgagee and of agent;
(b) Second, to the payment or prepayment of the Obligations, in such
order as Mortgagee shall elect; and
(c) Third, the remainder, if any, shall be paid to Mortgagor or such
other person or persons as may be entitled thereto by law;
provided, however, if applicable law requires such proceeds to be paid or
applied in a manner other than as set forth above in this Section 5.09, then
such proceeds shall be paid or applied in accordance with such applicable law.
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ARTICLE VI
GENERAL
SECTION 6.01. Fixture Filing. To the extent that the Subject Property
includes items of personal property which are or are to become fixtures under
applicable law, and to the extent permitted under applicable law, the filing of
this Leasehold Mortgage in the real estate records of the county in which such
Subject Property is located shall also operate from the time of filing as a
fixture filing with respect to such Subject Property, and the following
information is applicable for the purpose of such fixture filing, to wit:
(a) Name and Address of the Debtor:
Attention:
(b) Name and Address of the Secured Party:
Xxxxxxxx Capital Incorporated
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
(c) This financing statement covers goods or items of
personal property which are or are to become
fixtures upon the Property.
(d) Name and address of record owners:
Attention:
SECTION 6.02. Defeasance. If all of the Obligations shall have been
paid in full, and if Mortgagor shall have performed and observed all the
covenants, obligations and conditions to be performed by Mortgagor pursuant to
the Loan Documents, and each of the Loan Documents shall have been terminated,
then this Leasehold Mortgage shall cease, terminate and, thereafter, be of no
further force or effect (except as provided in Sections 4.01, 4.02 and 5.06).
Upon such termination and Mortgagor's request, appropriate release shall
promptly be made by Mortgagee to the Person or Persons legally entitled thereto
at Mortgagor's reasonable expense.
SECTION 6.03. Notices. Each notice, demand or other communication
given to Mortgagor or Mortgagee in connection with this Leasehold Mortgage shall
be given in the manner set forth in the Loan Agreement and shall be sent to the
addresses shown below or such other addresses which the parties may provide to
one another in accordance with the Loan Agreement.
To Mortgagee: Xxxxxxxx Capital Incorporated
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to Bankers Trust Company
14
Loan Servicer: Corporate Trust and Agency Group
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
To Mortgagor:
Attention:
Telephone:
Telecopier:
SECTION 6.04. Amendments in Writing. No amendment, consent, waiver or
supplement in any way affecting Mortgagor's obligations or Mortgagee's rights
under this Leasehold Mortgage shall in any event be effective unless contained
in a writing signed by Mortgagee.
SECTION 6.05. Governing Law; Construction. This Leasehold Mortgage
shall be governed by the law of the state in which the Land is situated.
SECTION 6.06. Successors and Assigns. Subject to the provisions of
Section 6.15, the covenants and agreements of Mortgagor hereunder, and the
provisions hereof affecting Mortgagor, shall bind Mortgagor hereunder, its
successors and assigns and all Persons claiming by, through or under Mortgagor
and shall inure to the benefit of Mortgagor and its successors and permitted
assigns. The rights and privileges of Mortgagee hereunder, and the provisions
hereof affecting Mortgagee, shall inure to the benefit of Mortgagee hereunder
and its successors and assigns.
SECTION 6.07. Waiver. Mortgagor waives, on behalf of itself and all
Persons now or hereafter interested in the Property or the other Subject
Property, to the fullest extent permitted by applicable law, (i) all rights
under all appraisement, homestead, moratorium, valuation, exemption, stay,
extension, redemption, single action, election of remedies and marshalling
statutes, laws or equities now or hereafter existing, (ii) any benefit of any
law providing for the valuation or appraisal of the Property or the other
Subject Property or any part thereof prior to any sale thereof; (iii) after any
such sale, claim or exercise any right to redeem the property so sold or any
part thereof; (iv) all benefit or advantage of any such law and covenants not to
hinder, delay or impede the execution by Mortgagee of any power or remedy herein
granted or available at law or in equity, but to suffer and permit the execution
of every power and remedy as though no such law existed and (v) any and all
requirements that at any time any action may be taken against any other Person.
Mortgagor hereby acknowledges and agrees that no defense based on any of the
foregoing will be asserted in any action enforcing this Leasehold Mortgage.
SECTION 6.08. WAIVER OF JURY TRIAL. MORTGAGOR AND MORTGAGEE HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS LEASEHOLD MORTGAGE, THE NOTE OR ANY OTHER LOAN
DOCUMENT OR FOR ANY COUNTERCLAIM THEREIN.
SECTION 6.09. No Redemption. Mortgagor hereby waives, to the fullest
extent permitted by applicable law, any and all rights of redemption from sale
under any order or decree of foreclosure of this Leasehold Mortgage or under any
power contained herein on its own behalf and on behalf of each and every Person
acquiring any interest in or title to the Property subsequent to the date of
this Leasehold Mortgage.
SECTION 6.10. Limitation by Law. All rights, remedies and powers
provided in this Leasehold Mortgage may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law, and all the
provisions of this Leasehold Mortgage are intended to be subject to all
applicable mandatory provisions of law which may be controlling and to be
limited to the extent necessary so that they will not render this Leasehold
Mortgage illegal, invalid, unenforceable, in whole or in part, or not entitled
to be recorded, registered, or filed under the provisions of any applicable law.
15
SECTION 6.11. Mortgagee's Performance. If Mortgagor shall fail to pay
or perform any of its obligations herein contained (including, without
limitation, payment of expenses of foreclosure and court costs) or under the
Loan Documents each with respect to the Subject Property, Mortgagee upon ten
(10) business days prior written notice to Mortgagor (except as otherwise
expressly permitted by any Loan Document in the event of an emergency when no
notice need be given) may, but need not, make (or cause to be made) any such
payment or perform (or cause to be performed) any such obligation of Mortgagor
hereunder or thereunder (provided Mortgagor is not contesting such payment or
performance in accordance with Section 2.09 and the failure to so perform such
obligation would have a Material Adverse Effect), in any form and manner deemed
reasonably expedient by Mortgagee as agent or attorney-in-fact of Mortgagor, and
any amount so paid or expended (plus reasonable compensation to Mortgagee for
its out-of-pocket and other expenses (including legal expenses) for each matter
for which it acts under this Leasehold Mortgage), with interest thereon at
the Default Rate, shall be added to the Obligations and shall be repaid to
Mortgagee upon demand. No such action of Mortgagee shall be considered as a
waiver of any right accruing to it on account of the occurrence of any default
on the part of Mortgagor under this Leasehold Mortgage, any Default, any Event
of Default, or any default or event of default under any other Loan Document.
SECTION 6.12. Subrogation. To the extent that Mortgagee, after the
date hereof, pays pursuant to the terms of this Leasehold Mortgage any sum due
under any provision of law or any instrument or documents creating any lien
prior or superior to the lien of this Leasehold Mortgage, Mortgagee shall have
and be entitled to a lien on the Subject Property equal in priority to that
discharged, and Mortgagee shall be subrogated to, and receive and enjoy all
rights and liens possessed, held or enjoyed by, the holder of such lien, which
shall remain in existence for the benefit of Mortgagee to secure the amount
expended by Mortgagee on account of or in connection with such lien.
SECTION 6.13. Conflicting Provisions. To the extent there exists any
conflict or inconsistency between the terms of this Leasehold Mortgage and the
terms of the Loan Agreement, the terms of the Loan Agreement shall govern.
SECTION 6.14. Counterparts. This Leasehold Mortgage may be executed in
any number of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for all
purposes.
SECTION 6.15. Effectiveness of Document. Notwithstanding any other
provision of this Leasehold Mortgage to the contrary, in the event that this
Leasehold Mortgage or the execution and delivery hereof would cause Mortgagor to
be in default under any Site Lease by reason of the failure of Mortgagor to
obtain the prior consent of the landlord under the Site Lease to this Leasehold
Mortgage or the execution and delivery hereof, Mortgagee hereby agrees, solely
for the purpose of avoiding any such default by Mortgagor, that this Leasehold
Mortgage shall not be effective, and that Mortgagee will not record this
Leasehold Mortgage or otherwise exercise any of its remedies hereunder, unless
and until such required consent (if any) of the landlord under the Site Lease
shall have been obtained. Mortgagor hereby agrees that if an Event of Default
shall have occurred and be continuing, then, upon the request of Mortgagee,
Mortgagor shall obtain the consent of the landlord under the Site Lease to this
Leasehold Mortgage and the exercise of remedies hereunder and take whatever
action shall be necessary to record the Site Lease or a memorandum thereof and
this Leasehold Mortgage as a mortgage lien on the leasehold estate created by
the Site Lease. Mortgagor irrevocably constitutes and appoints Mortgagee the
true and lawful attorney-in-fact of Mortgagor, so long as any such Event of
Default has occurred and is continuing, to execute, acknowledge, swear to and
file any documents in the name of Mortgagor necessary to record the Site Lease
or a memorandum thereof and this Leasehold Mortgage as a mortgage lien on the
leasehold estate created by the Site Lease; it being expressly acknowledged that
the foregoing power of attorney is coupled with an interest and shall survive
the dissolution of Mortgagor or assignment by Mortgagor of its rights hereunder.
SECTION 6.16. Recourse. Except as otherwise expressly set forth in
this Section 6.16, Mortgagee shall have no recourse against any shareholder,
owner, partner, officer, director, agent or employee of or in Mortgagor or of or
in any partner in or shareholder of Mortgagor (all such Persons, except to the
extent any such Person is obligated under a Guaranty, referred to collectively
as "Exculpated Persons") for the repayment of the Loan. Notwithstanding the
provisions of this Section 6.16, nothing herein or in any other Loan Document
shall: (i) prevent Mortgagee's recourse to Mortgagor, the Restaurant, the
Collateral or the Property or against any Guarantor under a Guaranty; (ii)
constitute a waiver, release or discharge of any Indebtedness or Obligation
evidenced by the Loan or arising under or secured by this Mortgage or any of the
other Loan Documents, but the same shall continue until fully paid or
discharged; (iii) affect or in any way limit the rights and remedies of
Mortgagee under this Mortgage or under any other Loan Document; or (iv) limit
the personal liability of any Exculpated Person for misappropriation or
misallocation of any funds, fraud, misrepresentation or willful damage to the
Restaurant, the Property or any portion thereof or for any environmental
indemnity under the Loan Documents.
[Signature Page Next]
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IN WITNESS WHEREOF, Mortgagor has duly executed and delivered this
Leasehold Mortgage as of the date first written above.
SYBRA, INC.,
a Michigan corporation
By: _______________________
Name:
Title:
[Corporate Seal]
Attest:
By: __________________________
Name:
By: __________________________
Name:
This instrument was prepared
by and when recorded should
be returned to:
XXXXXXXX CAPITAL INCORPORATED
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
17
ACKNOWLEDGEMENT FOR MORTGAGOR
STATE OF ________________________
COUNTY OF ________________________
The foregoing instrument was acknowledged before me this ____ day of
___________, 19__, by _______________________, the _______________________ of
Sybra, Inc., a Michigan corporation.
NOTARY PUBLIC:
Name:
Notary Public
My commission expires on ___________ ___, 19__.
[Notary Seal]
