SECOND MORTGAGE
Dated as of March 29, 1996
ADVANCED FINANCIAL, INC.
and
AFI MORTGAGE CORP.
a
Mortgagor
TO:
FIRST MORTGAGE INVESTMENT CO.
a
Mortgagee
This instrument was prepared by and recorded
counterparts should
be returned to:
XXXXXXXX XXXXXXX & XXXXXX, P.C.
ATTENTION: XXXXXX X. XXXXXXX
Suite 1800
000 X. 00xx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
(000) 000-0000
SECOND MORTGAGE
THIS MORTGAGE, dated the 29th day of March, 1996, is granted by Advanced
Financial, Inc., a Delaware corporation, located at 0000 Xxxxxxxxxx, Xxxxxxx,
Xxxxxx 00000, and AFI Mortgage Corp., a Nebraska corporation, located at X.X.
Xxx 0000, Xxxxxxx, Xxxxxx 00000 (collectively referred to as "Mortgagor"), to
First Mortgate Investment Co., a Missouri corporation, having offices located at
5225 W. 75th Street, Suite 100, X.X. Xxx 0000, Xxxxxxx Xxxxxxx, Xxxxxx 00000
("Mortgagee").
W I T N E S S E T H:
WHEREAS, Mortgagor is the fee owner of certain real property legally
described in Exhibit A, attached hereto and made a part hereof (herein called
the "Premises"); and
WHEREAS, Mortgagor has delivered to Mortgagee its Promissory Note in the
principal amount of Three Hundred Fifty Thousand Dollars No/100 ($350,000.00)
executed on or about even date herewith payable to Mortgagee (the "Note"), a
true and accurate copy of which is attached hereto and incorporated herein by
reference as Exhibit B; and
WHEREAS, the indebtedness evidenced by the Note is secured by the property
hereinafter described and it is to be paid, together with interest, as set forth
in the Note; and
WHEREAS, the Mortgagee has required, as a condition for its acceptance of
the Note, that the Mortgagor execute and deliver this Mortgage to secure the
following:
(i) The principal amount of the Note; plus
(ii) Interest on the principal amount as provided in the Note; plus
(iii)All other amounts payable under the Note, the Term Loan and Security
Agreement (hereinafter "Loan Agreement"), this Mortgage, or any of the
Loan Documents (as hereinafter defined), including all future advances
made according to the terms of the Note or the Loan Agreement and
those advances to protect the security and costs of enforcement, as
the same may be amended, modified and supplemented and where the
maturity thereof may be extended or renewed.
All amounts described in (i)-(iii) hereof and the other monetary and
non-monetary obligations contained in the instruments evidencing or securing the
foregoing, as applicable, are herein collectively called the "Obligations."
NOW, THEREFORE, for and in consideration of One Dollar ($1.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Mortgagor, to secure the punctual payment by Mortgagor when due,
whether at stated maturity, by acceleration or otherwise, of the Obligations and
the performance and observance of all other
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covenants, obligations and liabilities of Mortgagor under this Mortgage, and all
other documents required to be delivered by the Loan Agreement (such documents
being herein collectively called the "Loan Documents"), Mortgagor does hereby
GRANT, BARGAIN, ASSIGN, TRANSFER, SELL, MORTGAGE, WARRANT and CONVEY, unto
Mortgagee, its successors and assigns, each and all of the following real
property, and further grants to Mortgagee, its successors and assigns, as
applicable, a security interest in and to all other property described in
Granting Clauses First through Third below (all such real property and other
property being herein collectively called the "Premises"):
GRANTING CLAUSES
Subject to all prior interests therein, all the estate, right, title and
interest of Mortgagor now owned or hereafter acquired, in, to and under, or
derived from:
FIRST
Real Property
That real property more particularly described in Exhibit A, attached
hereto and incorporated herein by reference, and all rights, privileges,
royalties and easements relating thereto (hereinafter the "Real Property").
SECOND
Improvements
All buildings, structures, facilities, fixtures, and other improvements
now or hereafter located on the Real Property (hereinafter the "Improvements").
THIRD
Equipment
All chattels and articles of personal property and all appurtenances and
additions thereto and betterments, renewals, substitutions and replacements
thereof, of every character and wherever situated, now or hereafter owned by
Mortgagor which is either, in any way belonging, relating or appertaining to, or
located on, the properties referred to in GRANTING CLAUSES FIRST AND SECOND
(hereinafter the "Equipment"). Without limitation, Mortgagor hereby grants to
Mortgagee, as applicable, a security interest in and to all of Mortgagor's
present and future Equipment and Improvements, and Mortgagee shall have, in
addition to all rights and remedies provided in the Loan Documents, all of the
rights and remedies of a "secured party" under the Uniform Commercial Code of
the state in which the Premises are located. This Mortgage constitutes and shall
be deemed to be a "security agreement" for all purposes of said Uniform
Commercial Code. To the extent permitted by law, this Mortgage, once properly
filed with the
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recorder's office of the county in which the Real Property is located, shall
also be deemed a financing statement which perfects Mortgagee's security
interest in fixtures and personal property under the Uniform Commercial Code.
TO HAVE AND TO HOLD subject to the prior mortgage of Citizens Bank of
Shawnee, the holder of a perfected first security interest in the Real Property
recorded January 12, 1993 in Book 3823, Page 752 as Document No. 2207255, and
the interests of prior lienholders (hereinafter the "Permitted Encumbrances"),
together with all the rights, privileges and appurtenances thereunto belonging,
unto Mortgagee, its substitutes, successors and assigns forever, for the uses
and purposes herein set forth.
Mortgagor, represents, warrants, covenants and agrees with Mortgagee as
follows:
ARTICLE I
Representations and Warranties of Mortgagor
SECTION 1.01. Title. Subject to the Permitted Encumbrances, Mortgagor is
the lawful owner of the Premises and that it has good right and lawful authority
to mortgage same; that it has not made, done, executed or suffered, and will not
make, do, execute or suffer, any act or thing whereby its estate or interest in
and title to the Premises or any part thereof shall or may be further impaired,
changed or encumbered in any manner whatsoever; that it does warrant and will
defend the title to the Premises against all claims and demands whatsoever not
specifically excepted herein.
SECTION 1.02. Lien. The lien created by this Mortgage is a valid second
lien on the Premises and Mortgagor will keep the Premises free from superior or
equal liens and claims of every kind to the lien of this Mortgage (subject only
to the Permitted Encumbrances). Mortgagor shall not do or cause to be done, any
act or omission which would increase the principal balance or amount owed on any
Permitted Encumbrances.
SECTION 1.03. Authority. Mortgagor hereby represents and
warrants to Mortgagee that:
(A) The execution, delivery and performance by Mortgagor of this Mortgage,
the Note, the Loan Agreement, the Loan Documents and the borrowing evidenced by
the Note: (i) are within the powers of Mortgagor; (ii) have been duly authorized
by all requisite action; (iii) have received all necessary governmental
approvals; and (iv) will not violate any provision of law, any order of any
court or other agency of government.
SECTION 1.04. Certificates and Permits. (i) Mortgagor has and will
maintain in effect all necessary certificates, licenses, authorizations,
registrations, permits and/or approvals necessary for the operation of all or
any part of the Premises, (ii) the present and contemplated use and/or occupancy
of the Premises does not conflict with or violate any of the same, and (iii)
Mortgagor, promptly upon request by the Mortgagee, shall deliver to the
Mortgagee copies of all of the same.
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ARTICLE II
Covenants of Mortgagor
SECTION 2.01. General Covenants.
(a) Payment of Obligations. Mortgagor will punctually pay when due the
Obligations and will perform and observe all of its obligations under this
Mortgage.
(b) Filing and Recording. Mortgagor will, at the request of Mortgagee,
promptly record and rerecord, file and refile, register and reregister this
Mortgage, and any financing or continuation statements.
(c) Maintenance. Mortgagor will cause the Premises and every part thereof
to be maintained, preserved and kept in safe and good repair and condition, in
accordance with its present condition, and will abstain from and not permit the
commission of waste in or about the Premises. Mortgagor will also make all
necessary and proper repairs, renewals, replacements, additions and betterments
thereto, so that the value and efficient use thereof shall be preserved and
maintained and so that all laws and regulations as aforesaid shall be complied
with.
(d) Real Estate Taxes, Other Governmental Charges- Liens, and Utility
Charges. Mortgagor shall, before any penalty attaches thereto, pay and discharge
or cause to be paid and discharged all taxes, assessments, utility charges and
other governmental charges imposed upon or against the Premises or upon or
against the Note and the indebtedness secured hereby, and will not suffer to
exist any mechanics, statutory or other lien on the Premises or any part thereof
unless such lien is inferior to this Mortgage, consented to by Mortgagee in
writing, or is a Permitted Encumbrance. Copies of paid real estate tax and
assessment receipts shall be furnished to Mortgagee upon request not less than
ten (10) days prior to the delinquent dates.
(e) Advances. If Mortgagor shall fail to comply with any of the terms,
covenants, conditions herein with respect to procuring of insurance, the payment
of taxes, assessments and other charges, the keeping of the Premises in repair,
or any other term, covenant or condition herein contained, Mortgagee may make
advances to perform the same. Mortgagor agrees to repay all sums so advanced
upon demand, with interest at the default rate as set forth in the Note. All
sums so advanced, with interest at the default rate provided in the Note, shall
be secured hereby in equal priority to the indebtedness evidenced by the Note,
but no such advance shall be deemed to relieve Mortgagor from any default
hereunder. Nothing in this Mortgage shall be construed to obligate Mortgagee to
make any renewals or additional loans or advances.
(f) WAIVER OF JURY TRIAL. THE MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE RIGHT BE MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM, COUNTERCLAIM OR LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS MORTGAGE, THE LOAN SECURED
HEREBY OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR
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ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
MORTGAGEE ACCEPTING THIS MORTGAGE AND MAKING THE LOAN SECURED HEREBY.
(g) Use of Premises. Mortgagor shall furnish and keep, if appropriate, in
force a Certificate of Occupancy or its equivalent (with respect to any
structures located on the Premises), and comply with all restrictions laws,
ordinances, acts, rules, regulations affecting the Premises.
SECTION 2.02. Insurance.
(a) Insurance In General. Mortgagor shall procure and maintain
continuously in effect with respect to the Premises:
(i) Direct damage insurance covering at least the risk of loss from
Fire, Extended Coverage Perils, and Vandalism and Malicious Mischief,
on a replacement cost basis in an amount sufficient to pay off the
Note. The policies required by this paragraph shall be subject to no
co-insurance clause and may include a deductibility provision not
exceeding $10,000.00.
(ii) Minimum Insurance Amount of One Million Dollars and No/100
($1,000,000.00) on the Premises.
All insurance provided for herein shall be effective under a valid and
enforceable policy or policies issued by an insurer of recognized
responsibility. Each policy of insurance herein required shall contain a
provision that the insurer shall not cancel, refuse to renew or materially
modify it without giving written notice to Mortgagee at least thirty (30) days
before such cancellation, nonrenewal or modification becomes effective.
SECTION 2.03. Damage and Destruction.
(a) Mortgagee's Rights. In case of loss or damage to the Premises by
fire, vandalism or any other casualty, Mortgagee is authorized (but not
required) (a) to settle and adjust any claim under insurance policies which
insure against such risks, or (b) to allow Mortgagor to agree with the insurance
company or companies on the amount to be paid in regard to such loss. In either
case, the Mortgagee is authorized to collect and issue a receipt for any such
insurance money. In the event of loss or damage to a portion or all of the
Premises, the insurance proceeds may, at the sole option of the Mortgagee,
either be applied in reduction of the Obligations secured hereby, whether due or
not, without prepayment charge, or be held by the Mortgagee and used to
reimburse Mortgagor for the cost of the rebuilding or restoration of the
Premises, or any combination thereof, subject to the prior lien of Citizens tank
of Shawnee.
(b) Mortgagor's Obligations; Risk of Loss. In the event of any damage to
or loss or destruction of the Premises, Mortgagor shall promptly notify
Mortgagee of such event and take such steps as shall be reasonably necessary to
preserve any undamaged portion of the Premises.
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Mortgagor expressly assumes all risk of loss, including a decrease in the use,
enjoyment or value of the Premises from any casualty whatsoever, whether or not
insurable or insured against.
SECTION 2.04. Condemnation.
(a) Mortgagor's Obligations; Proceedings. Mortgagor, immediately upon
obtaining knowledge of any pending or threatened institution of any proceedings
for the condemnation of all or any portion of the Premises or the exercise of
any right of eminent domain over all or any portion of the Premises, shall
immediately notify Mortgagee of the threat or pendency thereof. If the Premises,
or any part thereof, is taken or damaged by reason of any public improvement or
condemnation proceedings, or in any other manner, subject to the rights of
existing lien holders and mortgagees, Mortgagee shall be entitled to all
compensation, awards and other payments or relief therefor to which Mortgagor
shall be entitled. Subject to the rights of existing lien holders and
mortgagees, Mortgagee may, through Mortgagee's or Mortgagor's attorney,
participate in any such proceedings, and Mortgagor from time to time will
execute and deliver to Mortgagee all instruments reasonably required by
Mortgagee to permit such participation.
(b) Application of Proceeds. Subject to the rights of existing lien
holders and mortgagees, Mortgagor hereby absolutely and unconditionally assigns,
transfers and sets over to the Mortgagee the entire proceeds of any award or any
claim for damages remaining after the Obligations of the First Mortgage are
satisfied for any of the Premises taken or damages under the power of eminent
domain or by condemnation and all compensation, award, damages, rights of action
and proceeds to which Mortgagor shall be entitled. The Mortgagee may elect to
apply the proceeds of the award upon or in reduction of the Obligations secured
hereby, whether due or not, without prepayment charge, or make said proceeds
available for restoration or rebuilding of the Premises in accordance with the
terms and conditions governing insurance proceeds under Section 2.03 herein.
SECTION 2.05. Compliance with Legal Requirements; Environmental Laws.
Mortgagor will use its best efforts to promptly and faithfully comply with all
present and future judicial decisions, statutes, rulings, orders, decrees,
rules, regulations, permits, certificates or ordinances of any governmental
authority in any way applicable to Mortgagor's ability to perform under this
Mortgage (the "Legal Requirements").
Mortgagor shall not cause asbestos-containing materials to be present in
any of the Improvements or other structures located on or which are a part of
the Premises; Mortgagor shall use his best efforts not to violate any
environmental laws or other regulation or ordinance of any governmental
authority relating to health or the environment (collectively the "Applicable
Environmental Laws"), including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Section 9601 et seq.) ("CERCLA"), Superfund Amendments and Reauthorizations Act
of 1986, the Resource Conversion and Recovery Act of 1976 (42 U.S.C. Section
6901 et seq.) ("RCRA"), or any applicable state laws. Mortgagor covenants (i)
that it will not cause any Hazardous Materials (as defined in CERCLA) to be
located on the Premises, (ii) that Mortgagor's operations will not involve the
generation, transportation, treatment or disposal of Hazardous Materials, (iii)
that to the best of Mortgagor's knowledge, during the time period prior to
Mortgagor's ownership of the Premises, there has been no disposal
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or release of any Hazardous Materials on the Premises or that affects the
Premises, (iv) that Mortgagor will not install any underground storage tank or
similar facility on the Premises without (1) first notifying Mortgagee of its
intent to install such a facility and the proposed location of that facility,
(2) certifying to Mortgagee that the facility and the installation of the
facility will be in compliance with all Legal Requirements, and (3) providing
evidence and certifying to Mortgagee that the facility, after its installation,
has in fact been installed in compliance with all Legal Requirements, and (v)
that Mortgagor will not handle process or allow to be brought upon the Premises
any substance or material that might result in a violation of any Applicable
Environmental Laws. Mortgagor will not do, and will prevent others from doing
anything on the Premises that could subject Mortgagor, Mortgagee or the Premises
to penalty or liability for violations of any Applicable Environmental Laws.
ARTICLE III
Assignment of Rents and Other Sums
SECTION 3.01. Assignment.
(a) In the event of an Event of Default, Mortgagor hereby absolutely,
presently and unconditionally grants, bargains, sells, transfers, assigns and
sets over to Mortgagee all rents, income, profits, proceeds and any and all
cash collateral to be derived from the leases and the use, possession or
occupation of all or part of the Premises remaining after the obligations to
existing lienholders or mortgagees are satisfied. Mortgagee shall be entitled
to receive all of the benefits and exercise all of the rights related to or
arising therefrom in the same manner and to the same extent as Mortgagor.
Nothing contained in the preceding sentence shall be construed to bind
Mortgagee to the performance of any of the provisions of any such contract,
bond, lease, rental agreement or other document or otherwise impose any
obligation upon Mortgagee. In addition, Mortgagee shall not be responsible for
the control, care, management or repair of the Premises; nor shall it operate
to make the Mortgagee responsible or liable for any waste committed on the
Premises or for any dangerous or defective condition on the Premises or for any
negligence in connection with the Premises. This assignment of leases, rents
and income is a perfected, absolute and present assignment.
(b) Notwithstanding any law to the contrary, if there is an Event of
Default as defined in Section 6.01, and if there is any law requiring Mortgagee
to take actual possession of the Premises (or some action equivalent thereto,
such as securing the appointment of a receiver) in order for Mortgagee to
"perfect" or "activate" its fights and remedies as set forth herein, then
Mortgagor waives the benefits of the law and agrees that the law shall be
satisfied solely by: (1) Mortgagee sending Mortgagor written notice that
Mortgagee intends to enforce and is enforcing its rights in and to the Premises
and the rents, revenues, profits and other items assigned herein; and (2)
Mortgagee sending written notice to any or all tenants on the Premises that said
tenants should commence making payments under the Leases directly to Mortgagee
or its designee.
(c) Notwithstanding the provisions set forth in subsection 3.0 1 (a)
above, so long as no Event of Default hereunder shall exist, and except as
otherwise expressly provided herein,
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Mortgagor shall have a revocable license to collect, as the same shall accrue,
said rents, income, profits, proceeds and cash collateral. Subject to the rights
of existing lienholders and mortgagees, Mortgagor agrees to hold the same in
trust and to use the same in payment of the Obligations.
(d) Upon the occurrence and during the continuance of any such Event of
Default, the license set forth in subsection (c) of this Section may be revoked
in whole or in part by Mortgagee by written notice to Mortgagor and the tenants,
and thereafter Mortgagee shall have the right and authority to exercise any of
the rights or remedies referred to or set forth in Article VI hereof.
ARTICLE IV
Indemnity
SECTION 4.01. Indemnity. Mortgagor agrees to indemnify and hold harmless
Mortgagee from and against any, and all losses, liabilities, suits, obligations,
fines, damages, judgments, penalties, claims, charges, costs and expenses
(including reasonable attorneys' fees and disbursements) which may be imposed
on, incurred or paid by or asserted against Mortgagee by reason or on account
of, or in connection with (i) any default or Event of Default by Mortgagor
hereunder, and (ii) Mortgagee's exercise of any of its rights and remedies, or
the performance of any of its duties hereunder, except that no such indemnity
shall apply if there is any fraud, willful misconduct or gross negligence on the
part of Mortgagee in its exercise of such rights and remedies or the performance
of any of its duties hereunder.
ARTICLE V
Transfer of the Premises and Release of Mortgage
SECTION 5.01. Continuous Ownership of Premises. Mortgagor acknowledges
that the continuous ownership by Mortgagor of the Premises is a material
covenant of the Mortgagor in this Mortgage and the Note which it secures.
Mortgagor agrees that Mortgagor will not, directly or indirectly, voluntarily or
involuntarily, sell, grant, convey, encumber, assign, divest or otherwise
transfer or permit to be subject of a transfer, any part or all of the Premises
or any legal or beneficial interest therein superior to the Mortgage, except the
Permitted Encumbrances, without Mortgagee's prior written consent.
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Event of Default. In addition to and not in limitation of
any events of Default contained in the Loan Agreement or in the Note, the term
"Event of Default", as used in this Mortgage, shall mean the occurrence of any
of the following events:
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(a) Default shall be made and shall continue unremedied beyond the
applicable cure period in the Loan Agreement or the Note, if any, or in any
note secured by a Permitted Encumbrance; or
(b) Any representation, warranty or statement made by Mortgagor in this
Mortgage, the Note, the Loan Agreement, or any other documents executed
contemporaneously herewith, shall prove to have been materially false; or
(c) Failure to perform or observe any material obligations, conditions,
agreements or covenants under this Mortgage, which is not cured within ten (10)
days of any such failure, or under any other Loan Documents, which is not cured
within the applicable cure period set forth in such document; or
(d) Any assignment, sale, conveyance or divestment by Mortgagor of its
interest or title in any manner whatsoever, in any portion of the Premises
serving as security for the Note without the prior written consent of Mortgagee;
or
(e) If Mortgagor is named as "debtor" in any petition filed under the
United States Bankruptcy Code, or under any similar or successor federal
statute relating to bankruptcy, insolvency, arrangements, or reorganizations,
or under any similar state bankruptcy or insolvency act, or files an answer in
an involuntary proceeding admitting insolvency or inability to pay debts, or if
Mortgagor fails to obtain a vacation or stay of involuntary proceedings brought
for the reorganization, dissolution, or liquidation of Mortgagor within thirty
(30) days of the date of filing such proceeding, or if Mortgagor is adjudged a
bankrupt, or if a trustee or receiver is appointed for Mortgagor or for any of
Mortgagor's property, or if Mortgagor makes an assignment for the benefit of
creditors, or if there is any attachment, execution, or other judicial seizure
of all or any portion of the Premises.
SECTION 6.02. Remedies. In addition to all other remedies available to
Mortgagee, Mortgagee may take the following actions, each of which may be
pursued concurrently or otherwise, to the extent permitted by law, at such time
and in such order as Mortgagee may determine:
(a) subject to any right of reinstatement pursuant to applicable law,
declare by written notice to the Mortgagor the entire balance of the Obligations
to be immediately due and payable; or
(b) to the extent permitted by law, institute a proceeding or proceedings,
judicial or otherwise, for the complete or partial foreclosure of this Mortgage
under any applicable provision of law and, to the extent the Premises are
located in a state where permitted, Mortgagee shall have the statutory power of
sale in addition to all other rights and remedies hereunder; or
(c) to the extent permitted by applicable law, sell the Premises, and all
estate, right, title, interest, claim and demand of Mortgagor therein, and a
rights of redemption thereof, at one or more sales, as an entirety or in
parcels, with such elements of real and/or personal property (and, to the extent
permitted by applicable law, may elect to deem all of the Premises to be real
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property for purposes thereof, and at such time and place and upon such
terms as it may deem expedient; or
(d) xxx and recover a judgment on the Obligations as the same become due
and payable, or on account of any default or defaults by Mortgagor, or either of
them, hereunder; or
(e) apply for the appointment of a receiver, custodian, trustee,
liquidator or conservator of the Premises, to be vested with the fullest powers
permitted under applicable law, as a matter of right and without regard to or
the necessity to disprove the adequacy of the security for the Obligations or
the solvency of Mortgagor, or either of them or any other person liable for the
payment of the Obligations, and Mortgagor and each other person so liable waives
or shall be deemed to have waived such necessity and consents or shall be deemed
to have consented to such appointment, and Mortgagor and each other person so
liable waives any notice or bond which may be required to be given or posted and
agrees to deliver immediate possession of the Premises to the parties so
appointed; or
(f) with or without the entrance upon or taking possession of the
Premises, collect and receive all earnings, revenues, rents, issues, profits,
income and cash collateral derived from the Premises, and to make demand
directly to any or all tenants under the leases for payment of such items
directly to Mortgagee; or
(g) release any portion of the Premises for such consideration as
Mortgagee may reasonably require without, as to the remainder of the Premises,
in any way impairing or affecting the lien or priority of this Mortgage.
SECTION 6.03. Expenses. In any proceeding, judicial or otherwise, to
foreclose this Mortgage or enforce any other remedy of Mortgagee under any Loan
Documents or hereunder, there shall be allowed and included as an addition to
and a part of the Obligations in the decree for sale or other judgment or decree
all reasonable expenditures and expenses which may be paid or incurred in
connection with the exercise by Mortgagee of any of its rights and remedies
provided or referred to herein, and the same shall be secured by this Mortgage.
SECTION 6.04. Application of Proceeds. Subject to the fights of existing
lienholders and mortgagees, the purchase money, proceeds or avails of any sale
referred to herein shall, except as herein expressly provided to the contrary,
be applied as follows:
FIRST: To the payment of all costs and expenses of any such sale,
including reasonable compensation to Mortgagee, its agents and counsel,
and all other costs incurred by the Mortgagee as authorized under the Loan
Documents.
SECOND: Ratably, to the payment in full of the Obligations (including
principal, interest, and all other sums owed) in such order as Mortgagee
may elect.
THIRD: To the extent permitted by applicable law, to be set aside by
Mortgagee as adequate security in its judgment for the payment of sums
which would have been paid by application under clauses First and Second
above to Mortgagee, which proceeds will, upon
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the request of Mortgagor, be place in an independent escrow account
pending resolution of any matters arising out of an obligation or
liability with respect to which Mortgagor has agreed to indemnify it, but
which sums are not yet due and payable or liquidated.
FOURTH: To the payment of the surplus, if any, to whomsoever may be
lawfully entitled to receive the same.
SECTION 6.05. Waiver of Rights and Defenses. To the full extent Mortgagor
may do so under applicable law, Mortgagor, for it and its heirs, devisees,
representatives, successors and assigns, and for any and all persons ever
claiming an interest in the Premises, hereby waives and releases all fights of
redemption, appraisement, valuation, and notice of intention to mature or
declare due the whole of the Obligations.
ARTICLE VII
SECTION 7.01. Defeasance. If all the Obligations shall have been paid in
full, then and in that event only, all rights hereunder shall terminate and the
Premises shall become wholly released and cleared of the liens, security
interests, conveyances and assignments evidenced hereby.
SECTION 7.02. Control of Documents. In the event that this Mortgage
conflicts with any of the terms, covenants and conditions of the Note of even
date herewith, the Note shall control. In the event this Mortgage conflicts with
any off the terms, covenants and conditions of the Term Loan and Security
Agreement of even date herewith, the Loan Agreement shall control. In all other
events this Mortgage shall be read in conjunction with the Note and the Loan
Agreement of even date herewith and be construed in accordance with the terms
thereof.
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage on the date first
above written.
MORTGAGOR:
ADVANCED FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
_____________________________________
Title: Secretary
AFI MORTGAGE CORP.
By: /s/ Xxxxxxx X. Xxxxxx
_____________________________________
Title: Xxxxxxxxx
00
XXXXXXXXXXXXXX
XXXXX OF __________________ )
) ss.
COUNTY OF _________________ )
I, __________________________________, Notary Public, do hereby certify
that on the ___ day of ___________, 1999, ______________________________
personally appeared before me and being first duly sworn by me severally
acknowledged that he/she signed as his/her free act and deed the foregoing
document as _______________ of Advanced Financial, Inc., and declared that the
statements therein contained are true, to his/her best knowledge and belief.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
above written.
___________________________________
Notary Public
My Commission Expires:
______________________
13
ACKNOWLEDGMENT
STATE OF ___________________ )
) ss.
COUNTY OF __________________ )
I, __________________________________, Notary Public, do hereby certify
that on the ___ day of ___________, 1999, ______________________________
personally appeared before me and being first duly sworn by me severally
acknowledged that he/she signed as his/her free act and deed the foregoing
document as _______________ of AFI Mortgage Corp., and declared that the
statements therein contained are true, to his/her best knowledge and belief.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
above written.
__________________________________
Notary Public
My Commission Expires:
_______________________
14
EXHIBIT A
REAL PROPERTY
Property Description:
"Lot 0, Xxxxx 0, XXXXXXXX XXXXXXXX XXXX FIRST PLAT, a subdivision in the
City of Shawnee, Xxxxxxx County, Kansas."
EXHIBIT B
PROMISSORY NOTE
Date: March 29, 1996 Principal: $350,000
Due Date: March 29, 1998
FOR VALUE RECEIVED, the undersigned, Advanced Financial, Inc., 0000
Xxxxxxxxxx, Xxxxxxx, Xxxxxx 00000, a Delaware corporation, and AFI Mortgage
Corp., a Nebraska corporation, X.X. Xxx 0000, Xxxxxxx, Xxxxxx 00000 (hereinafter
collectively referred to as "Maker"), do hereby promise to pay to the order of
First Mortgage Investment Co., 0000 X. 00xx Xxxxxx, Xxxxx 000, X.X. Xxx 0000,
Xxxxxxx Xxxxxxx, Xxxxxx 00000, a Missouri corporation, (hereinafter referred to
as "Holder"), the sum of Three Hundred Fifty Thousand ($350,000) Dollars and
No/100, plus interest thereon. The principal amount is to be paid as set forth
below. Interest shall be calculated at a variable rate equal to the Base Rate
(as defined below) plus four (4%) percentage points, which rate shall be
adjusted quarterly in accordance with the announced Base Rate of Citizens
National Bank of Fort Xxxxx, Kansas. The interest rate shall increase to a
variable rate equal to the Base Rate plus six (6%) percentage points, upon the
sale by Borrower of all of Borrower's servicing rights (as defined in Section
6.19 of that certain Term Loan and Security Agreement of even date herewith
between Maker and Holder (the "Agreement")).
The accrued interest shall be paid in eight (8) quarterly installments due
on June 30, September 30, December 31 and March 31 beginning on the 30th day of
June, 1996 and continuing until March 29, 1998. Upon the sooner of the sale of
all of the Borrower's servicing rights (as defined in Section 6.19 of the
Agreement) or the repayment of the Servicing Portfolio Note of even date
herewith, -a principal payment of One Hundred Fifty Thousand Dollars and No/100
($150,000.00) shall be due and payable, together with any accrued and unpaid
interest through such date. The entire unpaid principal balance and all then
accrued interest thereon shall be due and payable in full on the 29th day of
March, 1998. Unless prohibited by applicable law, this Note shall bear interest
(computed as aforesaid) on any principal or interest which is more than ten (10)
days overdue, or upon the occurrence of any Event of Default (as defined in the
Agreement), at the rate equal to the Base Rate plus seven (7%) percentage points
(or, in each case at the highest rate permitted by applicable law, whichever is
less). The principal and accrued interest shall be paid by the undersigned in
lawful money of the United States of America, at 0000 X. 00xx Xxxxxx, Xxxxx 000,
X.X. Xxx 0000, Xxxxxxx Xxxxxxx, Xxxxxx 00000, or such other place as may be
designated by Holder from time to time.
For purposes of this Note, "Base Rate" means the interest rate which from
time to time is announced, published and used by the Citizens National Bank of
Fort Xxxxx, Kansas as its "prime rate." The interest rate which is designated as
the "Base Rate" is not necessarily the lowest interest rate charged by the
Citizens National Bank or the Holder on other credit; and the term "Base Rate"
does not imply or-indicate that the interest rate which is designated as the
"Base Rate" is lower than other credit extended by the Citizens National Bank or
the Holder.
The Maker reserves the right to prepay all or any part of the principal
balance owing on this Note at any time or times prior to maturity without
payment of any premium or penalty, subject to the conversion rights set forth in
the Agreement.
This Note is convertible, if an Event of Default occurs at any time until
the Note has been paid in full, into Common Stock of the Maker in the manner,
and upon the terms and conditions, provided in the Agreement.
From time to time, this Note may be extended or renewed in whole or in
part upon mutual written agreement of Maker and Holder. As to any extension or
renewal, the rate of interest thereon may be changed or fees in consideration of
loan extensions may be imposed and any related right or security therefor may be
waived, exchanged, surrendered, or otherwise dealt with and any of the acts
mentioned in this Note may be done, all without affecting the liability of the
Maker or endorsers, each of whom agrees to remain liable under said Note until
the debt represented thereby is actually paid in full to Holder. The release of
any party liable upon or in respect to said Note shall not release any other
such party. The Maker hereby waives presentment, demand of payment, protest, and
notice of non-payment, and of protest and any and all other notices and demands
whatsoever. The acceptance by Holder of additional security for the performance
of the terms and provisions herein contained shall not in any way affect the
liability of the Maker.
Maker agrees to pay on demand any expenditures made by Holder in
accordance with the Agreement. At the option of Maker, all such expenditures may
be added to the unpaid principal balance on this Promissory Note and become a
part of and on a parity with the principal indebtedness secured by the
Agreements and other instruments executed herewith, and shall accrue interest at
the rate as may be payable from time to time on the original principal
indebtedness or may be declared immediately due and payable.
Maker expressly agrees that upon failure to pay any sums herein specified
when due, or the occurrence of an Event of Default under the Agreement, the
entire principal debt, or so much thereof as may remain unpaid at the time,
together with all accrued interest, shall, at the continuing option of Holder,
become immediately due and payable, and any sum not so paid when due shall bear
interest at the default rate specified above, and in addition thereto, there
shall be due and payable all costs incurred and, to the extent permitted by law,
reasonable attorney's fees in the event collection efforts are commenced by the
placement of this Promissory Note into the possession of an attorney, such
reasonable attorney's fees to be paid irrespective of whether or not actions or
foreclosure proceedings are commenced or continued into judgment.
In no event shall interest (including any charge or fee held to be
interest by a court of competent jurisdiction) accrue to be payable hereon in
excess of the highest contract rate allowable by law at the time such
indebtedness shall be outstanding and unpaid, and if, by reason of the
acceleration of maturity of such indebtedness or for any other reason, interest
in excess of the highest legal rate shall be due or paid, any such excess shall
constitute and be treated as a payment on the principal hereof and shall operate
to reduce such principal by the amount of such excess, or if in excess of the
principal indebtedness, such excess shall be waived or refunded to the Maker.
This Promissory Note is to be construed in accordance with the laws of the
State of Kansas. if any charges made in connection with this loan at any time
whatsoever or provisions hereof are judicially determined to be invalid, then
the interest rate shall be reduced to an amount which is legally permissible,
and that portion thereof which is declared invalid shall not affect the
remaining provisions hereof
This Promissory Note is subject to the prior security interests of those
persons set forth on Exhibit 4.0 to the Agreement, including without limitation,
Bank One, Texas. The Agreement shall constitute security for the payment and
full performance of this obligation as well as all expenditures made and sums
advanced on principal hereunder. Incorporated herein by reference are the terms,
conditions, covenants, representations, and warranties of the Agreement and any
other instrument securing this Promissory Note.
In this Promissory Note and any instrument securing the payment of the
same, the singular shall include the plural; the masculine shall include the
feminine and the neuter genders; "maker" or "undersigned" shall include the
Maker, endorser, guarantor, and assumer. In the event this Note is executed,
endorsed, guaranteed, or assumed by more than one person and/or firm, and/or
corporations, all of the obligations herein contained shall be joint and several
as among all of said parties. All persons liable, either now or hereafter, for
the payment of this Note shall be jointly and severally liable, and waive
presentment, demand, protest, and notice of non-payment and of protest, and
agree that any modifications of the terms of payment or extension of time or
payment shall in no way impair its/ their joint and several liability.
IN WITNESS WHEREOF, the undersigned hereby executes this Agreement on the
date first above written.
MAKER:
ADVANCED FINANCIAL, INC.
By: ________________________________
Title: _____________________________
AFI MORTGAGE CORP.
By: ________________________________
Title: _____________________________
