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Exhibit
10.2
P ARCEL N
OS : 48N03E-10-1650; 48N06E-20-6300;
48N06E-30-2100;
48N06E-30-0150;
48N06E-19-9000:
48N06E-29-3200;
MC0290: MC0054; and MC0013.
After Recording Return To:
Private Capital Group, Inc.
486 West 50 North
American Fork, Utah 84003
Fax: (801) 216-8889
Space Above This Line for
Recorder’s Use Only
MORTGAGE, ASSIGNMENT OF
LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE
FILING
THIS MORTGAGE, ASSIGNMENT
OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
(this “ Mortgage ”) is made as of the 17
th
day of June, 2008, by S
TERLING M INING C
OMPANY , an Idaho corporation, having an office at
2201 Government Way, Suite E, Coeur d’Alene, Idaho 83814
(“ Mortgagor ”), in favor of those
individuals/entities listed on the attached Exhibit
“A”, or their successors and assigns, c/o Private
Capital Group Inc. a Utah corporation as their agent at 486 West 50
North, American Fork, Utah 84003 (“ Mortgagee
”).
RECITALS:
WHEREAS , concurrently
with execution of this Mortgage, Mortgagor has executed and
delivered to Mortgagee that certain Promissory Note of even date
herewith in the principal amount of T WO M
ILLION F OUR H UNDRED
T HOUSAND D OLLARS A
ND N O /100 ($2,400,000.00)
(together with any supplemental, renewal, or replacement
notes, the “ Note ”); and
WHEREAS , Mortgagee
desires to secure the prompt payment of the Note, together with
interest and any premium thereon in accordance with the terms of
the Note and related loan documents ( “ Loan Document ”)
and any additional indebtedness accruing to Mortgagee on account of
any future payments, advances or expenditures made by Mortgagee
pursuant to, or any other obligation of Mortgagor arising under any
of the Loan Documents (the “ Secured Obligation
(s) ”);
NOW, THEREFORE , to
secure the payment, performance and observance by Mortgagor of all
of the terms, covenants and conditions contained in this instrument
and in the Loan Documents, and for other good and valuable
consideration, the receipt and sufficiency of which are
acknowledged hereby, Mortgagor has executed and delivered this
Mortgage and does hereby grant a lien and/or security interest, as
applicable, in, and grant, convey, assign,
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mortgage and confirm, to Mortgagee and
Mortgagee’s successors and assigns forever, all of the
property now or hereafter owned by Mortgagor described in the
following GRANTING CLAUSES (all or any portion thereof, the “
Mortgaged Property ”):
A. All those certain tracts,
pieces or parcels of land legally described in Exhibit
“B” and all surface and subsurface soils, minerals
and water located thereon and thereunder (the “ Land
”); and
B. All buildings, structures
and improvements of every nature whatsoever now or hereafter
situated on the Land, and all furnishings, furniture, fixtures,
machinery, inventory, equipment, appliances, systems, building
materials, vehicles and personal property of every kind and nature
whatsoever including, without limitation, all gas and electric
fixtures, radiators, heaters, engines and machinery, boilers,
ranges, elevators and motors, plumbing and heating fixtures and
systems, carpeting and other floor coverings, water heaters,
mirrors, mantels, air conditioning apparatus and systems,
refrigerating plant, appliances, computers and all hardware and
software therefor, cooking apparatus and appurtenances, window
screens, awnings and storm sashes, which are or shall be attached
to said buildings, structures or improvements, or which are or
shall be located in, on or about the Land, or which, wherever
located (including, without limitation, in warehouses or other
storage facilities or in the possession of or on the premises of
vendors or manufacturers thereof), are used or intended to be used
in or in connection with the construction, fixturing, equipping,
furnishing, use, operation or enjoyment of the Land or the
improvements thereon, now or hereafter owned by Mortgagor,
including all extensions, additions, improvements, betterments,
renewals and replacements of any of the foregoing, together with
all warehouse receipts or other documents of title relating to any
of the foregoing and the benefit of any deposits or payments now or
hereafter made by Mortgagor in connection with any of the
foregoing; and
C. All easements,
rights-of-way, strips and gores of land, vaults, streets, ways,
alleys, passages, sewer rights, waters, water courses, water rights
and powers, and all estates, rights, titles, interests, licenses,
privileges, liberties, tenements, hereditaments and appurtenances
whatsoever in any way belonging, relating or appertaining to the
Mortgaged Property, or which hereafter shall in any way belong,
relate or be appurtenant thereto, whether now owned or hereafter
acquired by Mortgagor and the reversion and reversions, remainder
and remainders thereof, and all the estate, right, title, interest,
property, possession, claim and demand whatsoever at law, as well
as in equity, of Mortgagor of, in and to the same; and
D. Each and every lease,
license and other document or instrument, including without
limitation those described in Granting Clause C above, granting to
any person or entity any right to use or occupy, and any other
agreement with respect to the use or occupancy of, all or any
portion of the Land or the improvements of any type or nature
located thereon (the “ Improvements ”), whether
heretofore, now or hereafter entered into (the “
Leases ”); and
E. The rents, deposits,
issues, profits, proceeds, revenues, awards and other benefits of
the Mortgaged Property from time to time accruing (including
without limitation all payments under the Leases, licenses and
documents described in Granting Clause D above, proceeds of
insurance, condemnation awards and payments in lieu thereof, tenant
security deposits, advance room deposits and escrow funds, all
receivables, customer obligations, installment payment obligations
and other obligations now existing or hereafter arising or created
out of sale, lease, sublease, license, concession or other grant of
the right of the possession, use or occupancy of all or any portion
of the Mortgaged Property, or personalty located thereon, or
rendering of services by Mortgagor or any operator or manager of
the Mortgaged Property or acquired from others, including without
limitation from the rental of any space, and all the estate, right,
title, interest, property, possession, claim and demand whatsoever,
at law as well as in equity, of Mortgagor of, in and to the same)
(collectively, the “ Rents ”); and
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F. All proceeds from rentals,
mortgages, sales, conveyances or other dispositions or realizations
of any kind or character of or from the foregoing Rents now or
hereafter existing, all of which shall constitute proceeds of
collateral pursuant to the Uniform Commercial Code (“
UCC ”) as adopted in the State of Idaho (the “
State ”); and
G. All of the aforementioned
personal property and any and all other personal property, whether
tangible or intangible, not otherwise described in this instrument
and now or at any time hereafter owned by Mortgagor and now or at
any time hereafter located in or on or otherwise utilized in any
one or more of the ownership, use, enjoyment, construction,
occupancy, management, maintenance, repair and operation of the
Land, the Improvements or the equipment located thereon, including
without limitation trade names, trademarks, service marks,
copyrights, patents and other intellectual property and any and all
funds of Mortgagor from time to time in Mortgagee’s
possession, all of which shall constitute proceeds of collateral
pursuant to Section 9-306 of the UCC (the “
Personalty ”); and
H. All of the aforementioned
contracts and agreements and any and all other contracts or
agreements, whether written or oral, to which Mortgagor is or
hereafter becomes a party, to the extent assignment is permitted
therein, including, without limitation, purchase contracts for the
sale of all or any portion of the Land, contracts pertaining to
architectural services, contracts pertaining to engineering
services, and contracts relating in any manner to the ownership,
use, enjoyment, construction, occupancy, management, maintenance,
operation or repair of all or any portion of the Land, the
Improvements, the equipment located thereon or the Personalty or
otherwise related to all or any part of the real and personal
property described elsewhere herein (the “ Contracts
”); and
I. To the extent assignment
thereof is legally permissible, all franchises, permits, licenses,
entitlements and rights therein respecting the ownership, use,
enjoyment, occupation, management, maintenance, repair and
operation of any of the foregoing, provided however, permits issued
or granted by applicable and federal and state authorities pursuant
to Environmental Laws shall not be deemed to constitute Mortgaged
Property but upon the default all applicable permits will be
assigned and/or transferred as is legally permissible to Mortgagee;
and
J. Any and all rights,
titles, interests, estates and other claims, at law or in equity,
that Mortgagor now has or may hereafter acquire in or to any
proceeds from the sale, assignment, conveyance, hypothecation,
grant, pledge or other transfer of any or all of the foregoing real
or personal property; and
K. Any and all refunds,
rebates, reimbursements, reserves, deferred payments, deposits,
cost savings, governmental subsidy payments, governmentally
registered credits (such as emissions reduction credits) and
payments of any kind due from or payable by any governmental
authority or any insurance or utility company relating to any or
all of the Mortgaged Property; and
L. All refunds, rebates,
reimbursements and payments of any kind due from or payable by any
governmental authority for any taxes, assessments or governmental
or quasi-governmental charges or levies imposed upon Mortgagor with
respect to the Mortgaged Property or upon any or all of the
Mortgaged Property; and
M. All monies relating to the
Mortgaged Property held in any cash collateral or operating account
maintained with Mortgagee or any Affiliate of Mortgagee now or at
any time hereafter, all monies held in any capital expenditure
escrows or other operational escrows or reserve funds and any other
escrows, reserves or letters of credit benefiting or relating to
the Mortgaged Property;
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N. All right, title and
interest of Mortgagor arising from the operation of the Mortgaged
Property in and to all payments for goods or property sold or
leased or for services rendered, whether or not yet earned by
performance, and not evidenced by an instrument or chattel paper
including, without limiting the generality of the foregoing, all
accounts, accounts receivable, contract rights, book debts, and
notes arising from the operation of the Mortgaged Property and
Mortgaged Property-related services on the Mortgaged Property or
arising from the sale, lease or exchange of goods or other property
and/or the performance of services; and
O. The fee title to any of
the Mortgaged Property that may be obtained by Mortgagee in the
future, to the extent any of the Mortgaged Property is currently
held by way of leasehold, easement or other form of non-fee
ownership or right of occupancy; it is the intent of the parties
that the lien of this Mortgage shall not be merged into fee title
ownership but shall rather remain as a lien on all such
property.
TO HAVE AND TO HOLD
the Mortgaged Property and all parts thereof unto Mortgagee, its
successors and assigns, to their own proper use, benefit and
advantage forever, subject, however, to the terms, covenants and
conditions herein contained.
WITHOUT LIMITATION OF THE
FOREGOING , Mortgagor hereby further grants unto Mortgagee,
pursuant to the provisions of the UCC, a security interest in all
of the Mortgaged Property, which property includes, without
limitation, goods which are or are to become fixtures, the Leases
and the Rents.
THIS MORTGAGE IS GIVEN TO
SECURE payment of the principal and interest evidenced by the
Loan Documents, each of which shall be equally secured by this
Mortgage without priority or preference to one over another, and
performance of each and every of the covenants, conditions and
agreements of Mortgagor contained in this Mortgage or in any of the
other Loan Documents (all of which obligations are included in the
“Secured Obligations”).
PROVIDED, HOWEVER, THE
FOREGOING PRESENTS are made upon the condition that if Mortgagor
(i) shall pay or cause to be paid to Mortgagee all of the
Secured Obligations, (ii) shall pay or cause to be paid all
amounts to be paid by Mortgagor under this Mortgage, and
(iii) shall keep, perform and observe (or cause to be kept,
performed and observed) each and every one of the covenants and
promises in this Mortgage or in any of the other Loan Documents
expressed to be kept, performed and observed by and on the part of
Mortgagor, then this Mortgage shall cease, terminate and be void;
however, if such conditions are not all satisfied, this Mortgage
shall otherwise remain in full force and effect.
MORTGAGOR FURTHER COVENANTS
AND AGREES WITH MORTGAGEE AS FOLLOWS:
1. MORTGAGOR’S
COVENANTS, REPRESENTATIONS AND WARRANTIES.
1.1 Warranty of
Title. At the time of the recordation of this Mortgage,
Mortgagor is well seized of an indefeasible estate in fee simple in
the portion of the Mortgaged Property which constitutes real
property and owns good title to the portion of the Mortgaged
Property which constitutes personal property, and Mortgagor has
good right, full power and lawful authority to convey, mortgage and
grant a security interest therein and to assign the Rents. Said
title of Mortgagor in the Mortgaged Property is free and
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clear of all liens, charges,
easements, covenants, conditions, restrictions and encumbrances
whatsoever, other than liens evidenced by the mortgagee title
insurance policy being issued in connection with this instrument,
including as to the personal property and fixtures, security
agreements, conditional sales contracts and anything of a similar
nature. Mortgagor shall and will forever defend the title to the
Mortgaged Property against the claims of all persons
whomsoever.
1.2 Taxes.
Mortgagor shall pay, or cause to be paid, all installments of
taxes, assessments and other similar charges which are assessed,
levied, confirmed, imposed, or which become a lien upon or against
the Mortgaged Property or which become payable with respect thereto
or with respect to the occupancy, use or possession of the
Mortgaged Property, within thirty (30) days after the same
become due, and shall promptly deliver to Mortgagee receipt
therefor. In the event Mortgagor desires to contest the validity of
any such taxes or assessments. Mortgagor shall (i) prior to
the due date thereof, notify Mortgagee in writing that Mortgagor
intends to so contest the same, (ii) if requested by
Mortgagee, pay the entire amounts of such taxes or assessments when
due or, if a contest is permitted by law without such payment on or
before the due date thereof, deposit with Mortgagee security in
form and content and amounts satisfactory to Mortgagee for the
payment of 125% of such tax or assessment, or provide to Mortgagee
such other indemnity or assurance of timely payment as may be
acceptable to Mortgagee, and (iii) if requested by Mortgagee,
deposit additional security or indemnity, from time to time, so
that, at all times, adequate security or indemnity will be
available for the payment of the full amount of the taxes or
assessments together with all interest, penalties, costs and
charges accrued or accumulated thereon. If the foregoing deposits
are made and Mortgagor continues, in good faith, to contest the
validity of such taxes or assessments by appropriate legal
proceedings which shall operate to prevent the collection thereof
and the sale of the Mortgaged Property to satisfy the same,
Mortgagor shall be under no obligation to pay such tax or
assessment until such time as the same has been decreed, by court
order, to be a valid lien on the Mortgaged Property. Mortgagee
shall have full power and authority to reduce any such security or
indemnity to cash and apply the amount so received to the payment
of any unpaid tax or assessment to prevent the sale or forfeiture
of the Mortgaged Property, without any liability on
Mortgagee’s part for any failure to apply the security or
indemnity so deposited, unless Mortgagor requests, in writing, the
application thereof to the payment of the particular tax or
assessment for which such deposit was made. Any surplus deposit
retained by Mortgagee, after the payment of the tax or assessment
for which the same was made, shall be repaid to Mortgagor, unless
an Event of Default (as hereinafter defined) exists, or an event
has occurred or condition exists which, with the giving of notice
or the passage of time, or both, could give rise to an Event of
Default, in which event such surplus shall be applied by Mortgagee
to the Secured Obligations in such order and manner as Mortgagee
may determine.
1.3 Mortgage
Taxes. In the event of the passage of any federal, state or
local governmental law, order, rule or regulation subsequent to the
date hereof which changes or modifies in any manner the laws now in
force governing the taxation of mortgages or debts secured by
mortgages or the manner of collecting taxes so as to materially and
adversely affect Mortgagee, all sums secured by this Mortgage and
all interest accrued thereon shall become due forthwith at the
option of Mortgagee and be payable 60 days after notice to
Mortgagor. Notwithstanding the foregoing, instead of paying all the
sums secured by this Mortgage and all interest accrued thereon as
provided above, Mortgagor shall have the right to pay to Mortgagee
an amount which will place Mortgagee in exactly the same position
Mortgagee would have been in had the events outlined above not
occurred, provided, however, if such payment may, in
Mortgagee’s judgment, be considered unlawful by a court of
competent jurisdiction, then such payment may not be made and all
sums secured by this Mortgage and all interest accrued thereon
shall become due forthwith at the option of Mortgagee and payable
60 days after notice to Mortgagor as aforesaid.
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1.4 Utilities.
Mortgagor shall pay or cause to be paid when due any and all
charges for utilities, whether public or private, with respect to
the Mortgaged Property and all license fees, rents or other charges
for the use of any appurtenance to the Mortgaged
Property.
1.5 Liens. The
Mortgaged Property shall be kept free and clear of all liens and
encumbrances (unless the same are bonded or insured over in a
manner satisfactory to Mortgagee) of every nature or description,
including, without limitation, liens and encumbrances arising from
past due taxes or assessments and from charges for labor,
materials, supplies or services, other than liens expressly
permitted by Mortgagee from time to time.
1.6
Subrogation. Mortgagee shall be subrogated to the claims
and liens of all parties whose claims or liens are discharged or
paid with the proceeds of any indebtedness secured
hereby.
1.7 Insurance.
Mortgagor shall, at its expense, maintain insurance policies in
accordance with the terms and conditions of the Loan
Documents.
1.8 Casualty.
Mortgagor shall give immediate notice to Mortgagee of any damage to
or loss of the Mortgaged Property or any portion thereof in excess
of $100,000. In case of such damage or loss which is covered by any
of the insurance policies maintained by Mortgagor, Mortgagee is
hereby authorized, after giving three Business Days’ written
notice to Mortgagor, to adjust, collect and compromise all claims
thereunder during the continuance of an Event of Default hereunder;
and in such case, Mortgagor shall sign immediately upon demand by
Mortgagee, or, in the event Mortgagor fails to do so, Mortgagee may
sign or endorse on Mortgagor’s behalf, all necessary proofs
of loss, receipts, releases and other papers required by the
insurance companies to be signed by Mortgagor. Mortgagor hereby
irrevocably appoints Mortgagee as its attorney-in-fact for the
purposes set forth in the preceding sentence. In all other cases,
Mortgagor shall have the right to adjust and compromise such
insurance claims and any proceeds shall be payable to Mortgagee and
Mortgagor jointly. Mortgagee may deduct from such insurance
proceeds any reasonable expenses incurred by Mortgagee in the
settlement and collection thereof, including, without limitation,
attorneys’ fees and expenses. The remaining proceeds are
referred to in this instrument as the “ Net Insurance
Proceeds. ”
1.9
Condemnation. If the Mortgaged Property, other than a
part the loss of which, in Mortgagee’s sole discretion, would
not adversely affect the operation of the Mortgaged Property, shall
be damaged or taken through condemnation (which term, when used
herein, shall include any damage or taking by any governmental
authority and any transfer by private sale in lieu thereof), either
temporarily, if in Mortgagee’s judgment such taking causes a
material, adverse impact on (i) the Mortgaged Property and
(ii) Mortgagor’s ability to pay or perform the Secured
Obligations in accordance with the Loan Documents, or permanently,
all of the Secured Obligations and obligations under the Loan
Documents shall, at the option of Mortgagee, become immediately due
and payable. Mortgagee shall be entitled to all compensation,
awards and other payments or relief therefor and all such
compensation, awards, damages, claims, rights, actions and
proceedings, and the right thereto, are hereby assigned by
Mortgagor to Mortgagee and shall be paid to Mortgagee. Mortgagor
agrees to execute such further assignments of, or payment
directions relating to, any compensations, awards, damages, claims,
rights, actions and proceedings as Mortgagee may require. Mortgagee
may deduct from such compensation, awards and other payments any
reasonable expenses incurred by Mortgagee in the collection and
settlement thereof, including, without limitation,
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attorneys’ fees and
expenses. The remaining amount is referred to in this instrument as
the “ Net Award Proceeds ”. Mortgagee is hereby
authorized, at its option and after three Business Days’
written notice to Mortgagor, to commence, appear in and prosecute,
in its own name or in the name of Mortgagor, any action or
proceeding relating to any condemnation, and to settle or
compromise any claim in connection therewith during the continuance
of an Event of Default hereunder; in all other cases, Mortgagor
shall have the right to prosecute, settle or compromise any such
claim and any proceeds therefrom shall be payable to Mortgagor and
Mortgagee jointly. Mortgagee shall not be liable to Mortgagor for
any failure to collect any amount in connection with any such
proceeding regardless of the cause of such failure.
1.10
Restoration. If the Mortgaged Property shall be damaged
or destroyed by fire or other casualty or shall be damaged or taken
through the exercise of the power of eminent domain or other cause,
Mortgagor shall promptly and with all due diligence restore and
repair the Mortgaged Property whether or not the Net Insurance
Proceeds or the Net Award Proceeds (in either event, the “
Proceeds ”) are available or sufficient to pay the
cost of such restoration or repair, which restoration and repair
shall be commenced within 45 days of the damage or destruction and
completed within 180-days thereof. Mortgagee may require that all
plans and specifications for such restoration or repair be
submitted to and approved by Mortgagee in writing prior to
commencement of the work. Mortgagee may require evidence of the
estimated cost of completion of such restoration or repair
satisfactory to Mortgagee and, thereafter, such architect’s
certificates, waivers of lien, contractors’ sworn statements,
title insurance endorsements, plats of survey and other evidence of
cost, payment and performance relating to such restoration or
repair work which is satisfactory to Mortgagee.
1.11 Application of
Insurance Proceeds. At Mortgagee’s election, to be
exercised by written notice to Mortgagor within thirty
(30) days following Mortgagee’s unrestricted receipt in
cash or the equivalent thereof of the Proceeds, the entire amount
of the Proceeds shall be either (i) applied to the amounts
outstanding with respect to the Loan Documents and in such order
and manner as Mortgagee may elect, or (ii) made available to
Mortgagor on the terms and conditions set forth in this Section to
finance the cost of restoration or repair, with any excess to be
applied to the Secured Obligations and amounts outstanding under
the Loan Documents in an order determined by Mortgagee in its sole
and absolute discretion. Mortgagee may commingle any such funds
held by it with its other general funds. Mortgagee shall not be
obligated to pay interest in respect of any such funds held by it.
Without limitation of any of the foregoing, Mortgagee shall have
the right at all times to apply such funds to the cure of any Event
of Default or the performance of any obligations of Mortgagor
hereunder or under any of the other Loan Documents. The provisions
of this Section 1.12 shall govern any conflicting
provision in Section 1.9 .
1.12 Governmental
Authority Payments. Mortgagor agrees with respect to the
collateral described in Granting Clauses K and L of this instrument
(the “ Governmental Authority Payments ”) as
follows: (i) that Mortgagor shall, at Mortgagor’s sole
expense, promptly take all actions necessary to obtain all proceeds
to which Mortgagor is entitled in connection with the Governmental
Authority Payments, including, without limitation, the filing of
applications or claims and the prosecution of appeals or
litigation, if reasonably necessary and cost effective,
(ii) that, in the event of an Event of Default by Mortgagor
under this Mortgage, Mortgagor shall direct the payor with regard
to any of the Governmental Authority Payments to remit same
directly to Mortgagee when due, (iii) that Mortgagor shall
forward promptly to Mortgagee all notices and correspondence
relating in any manner to any of the Governmental Authority
Payments and any proceeds received by Mortgagor in connection with
any of the Governmental Authority Payments, (iv) that, during
the continuance of an Event of Default under this instrument, the
proceeds of any of the Governmental Authority
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Payments received by
Mortgagee shall, after three (3) Business Days’ written
notice to Mortgagor, be applied toward the repayment of the Secured
Obligations in a manner determined by Mortgagee in its sole
discretion or, at the request of Mortgagor and with the consent of
Mortgagee, said proceeds shall be deposited in a secured deposit
account maintained with Mortgagee or an Affiliate of Mortgagee, as
designated by Mortgagee and, after 3 Business Days’ written
notice to Mortgagor, applied from time to time toward the payment
of any expenses relating to the Mortgaged Property, in a manner
determined by Mortgagee in its sole discretion, and (v) that,
in the event of an Event of Default by Mortgagor under this
Mortgage, Mortgagee shall be and hereby is appointed as
Mortgagor’s agent with respect to any of the Governmental
Authority Payments and in that capacity Mortgagee shall have the
right, after three (3) Business Days’ written notice to
Mortgagor, to take all such actions that Mortgagee deems necessary
and expedient in order to obtain all proceeds to which Mortgagor is
entitled with respect to any of the Governmental Authority
Payments.
1.13 General Care of
the Property. Mortgagor shall preserve and maintain or
cause to be preserved and maintained the Mortgaged Property in good
condition and repair, shall not commit or suffer any waste thereof,
and shall keep the same in a clean, orderly and attractive
condition. Mortgagor shall not do or suffer to be done anything
which will increase the risk of fire or of any other hazard to the
Mortgaged Property or any part thereof. Except as contemplated by
the Loan Documents, no buildings, structures, improvements,
fixtures, personal property or other part of the Mortgaged Property
shall be removed, added to, demolished or altered structurally to
any extent or altered non- structurally in any material respect
without the prior written consent of Mortgagee. Mortgagor shall
promptly comply, and cause the Mortgaged Property and the occupants
or users thereof to comply, with all present and future laws,
ordinances, orders, rules and regulations and other requirements of
any governmental authority affecting the Mortgaged Property or the
use or occupancy thereof. Mortgagee and its representatives are
hereby authorized to enter upon and inspect the Mortgaged Property
at any time during normal business hours during the term of this
Mortgage.
1.14 Leases and Other
Agreements Affecting the Mortgaged Property. Mortgagor
shall duly and punctually perform all terms, covenants, conditions
and agreements binding upon Mortgagor or the Mortgaged Property
under any lease or any other agreement or instrument of any nature
whatsoever which involves or affects the Mortgaged Property or any
part thereof and which is binding on Mortgagor. Mortgagor
represents and warrants that Mortgagor has heretofore furnished
Mortgagee with true and complete copies of all such leases,
agreements and instruments existing on the date of this Mortgage.
Mortgagor agrees to furnish Mortgagee with executed copies of all
leases hereafter entered into with respect to all or any part of
the Mortgaged Property. Mortgagor shall not without the express
written consent of Mortgagee, enter into any new lease or modify,
surrender, terminate, extend or renew, either orally or in writing,
any lease now existing or hereafter created upon the Mortgaged
Property nor shall Mortgagor permit an assignment or sublease
thereof without the express written consent of Mortgagee. If
Mortgagee so requests. Mortgagor shall cause the tenant under each
or any of such leases to enter into subordination and attornment
agreements with Mortgagee which are satisfactory to Mortgagee.
Mortgagor shall not accept payment of advance rents or security
deposits equal, in the aggregate, to more than one month’s
rent without the express written consent of Mortgagee. Mortgagor
shall keep any security deposits made by any tenant in an account
with Mortgagee. Mortgagor may not withdraw any such security
deposit from such account without providing Mortgagee with
reasonable assurance that such withdrawal is being paid directly to
the applicable tenant. In order to further secure payment of the
Secured Obligations, Mortgagor hereby assigns, transfers and sets
over to Mortgagee all of Mortgagor’s right, title and
interest in. to and under all of the leases now or hereafter
affecting the Mortgaged Property and in and to all of the rents,
issues, profits, revenues, awards and other benefits now
or
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hereafter arising from the
Mortgaged Property. Unless and until an Event of Default occurs,
Mortgagor shall be entitled to collect the rents, issues, profits,
revenues, awards and other benefits of the Mortgaged Property
(except as otherwise provided in this Mortgage) as and when they
become due and payable. Mortgagee shall be liable to account only
for rents, issues, profits, revenues, awards and other benefits of
the Mortgaged Property actually received by Mortgagee pursuant to
any provision of this Mortgage.
1.15 Impairment of
Security. Without limitation of any other provision hereof,
Mortgagor shall not assign, in whole or in part, the rents, issues,
profits, revenues, awards and other benefits from the Mortgaged
Property without the prior written consent of Mortgagee; any such
assignment made without Mortgagee’s prior written consent
shall be null and void and of no force and effect and the making
thereof shall constitute an Event of Default under this Mortgage.
Without limitation of the foregoing, Mortgagor shall not in any
other manner impair the security of this Mortgage for the payment
of any Secured Obligations.
1.16 Prohibition of
Further Encumbrance. Mortgagor shall not, without the prior
written consent of Mortgagee, further mortgage, hypothecate, pledge
or otherwise encumber, whether by operation of law or otherwise,
any interest in the Mortgaged Property. Any such encumbrance made
without Mortgagee’s prior written consent shall be null and
void and of no force or effect and any mere attempt to create or
cause an encumbrance in default of the terms hereof shall
constitute an Event of Default under this Mortgage.
1.17 Prohibition of
Transfer. Mortgagor shall not, without the prior written
consent of Mortgagee, sell, assign or otherwise transfer, whether
directly or indirectly, by operation of law or otherwise, all or
any portion of any interest in the Mortgaged Property, except
replacements of personal property in the ordinary course of
business.
1.18 Further
Assurances; After Acquired Property. At any time and from
time to time, upon request from Mortgagee, Mortgagor shall make,
execute and deliver, or cause to be made, executed and delivered,
to Mortgagee and, where appropriate, to cause to be recorded or
filed, or both, and from time to time thereafter to be re-recorded
or refiled, or both, at such time and in such offices and places as
shall be deemed desirable by Mortgagee, any and all such other and
further mortgages, security agreements, financing statements,
continuation statements, instruments of further assurances,
certificates and other documents as may, in the opinion of
Mortgagee, be necessary or desirable in order to effectuate,
complete or perfect, or to continue and preserve (i) the
obligations of Mortgagor under this Mortgage and the other Loan
Documents, and (ii) the lien and security interest of this
Mortgage as a first and prior lien and security interest upon all
of the Mortgaged Property, whether now or hereafter acquired by
Mortgagor. Upon any failure by Mortgagor to so make, execute and
deliver each of such documents after written demand, Mortgagee may
make, execute, record, file, re-record and refile, as appropriate,
any and all such mortgages, security agreements, financing
statements, continuation statements, instruments, certificates and
documents for and in the name of Mortgagor, and Mortgagor hereby
irrevocably appoints Mortgagee as its agent and attorney-in-fact in
connection therewith. The lien and security interest hereof will
automatically attach, without further act, to all after-acquired
property owned by Mortgagor attached to or used in connection with
the operation of the Mortgaged Property.
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1.19 Environmental
Matters. Mortgagor represents, warrants and covenants that
Mortgagor has not used Hazardous Materials (defined below), on,
from, or affecting the Mortgaged Property in any manner which
violates federal, state, or local laws, ordinances, rules,
regulations or policies governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials, and no prior owner of the
Mortgaged Property or any tenant, subtenant, prior tenant or prior
subtenant has used Hazardous Materials, on, from, or affecting the
Mortgaged Property, in any manner which violates federal, state or
local laws, ordinances, rules, regulations, or policies governing
the use, storage, treatment, transportation, manufacture,
refinement, handling, production or disposal of Hazardous
Materials. Mortgagor shall keep or cause the Mortgaged Property to
be kept free of Hazardous Materials. Without limiting the
foregoing, Mortgagor shall not cause or permit the Mortgaged
Property to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process
Hazardous Materials, except in compliance with all applicable
federal, state and local laws and regulations, nor shall Mortgagor
cause or permit, as a result of any intentional or unintentional
act or omission on the part of Mortgagor or any tenant or
subtenant, a release of Hazardous Materials onto the Mortgaged
Property or onto any other property. Mortgagor shall comply with
and ensure compliance by all tenants and subtenants with all
applicable federal, state and local laws, ordinances, rules and
regulations, whenever and by whomever triggered, and shall obtain
and comply with any and all approvals, registrations or permits
required thereunder. Mortgagor shall (i) conduct and complete
all investigations, studies, sampling, and testing and all
remedial, removal, and other actions necessary to clean up and
remove all Hazardous Materials, on, from, or affecting the
Mortgaged Property (a) in accordance with all applicable
federal state, and local laws, ordinances, rules, regulations, and
policies, (b) to the satisfaction of the Mortgagee, and
(c) in accordance with the orders and directions of all
federal, state and local governmental authorities, and
(ii) defend, indemnify, and hold harmless the Mortgagee and
its employees, agents, officers, and directors, from and against
any claims, demands, penalties, fines, liabilities, settlements,
damages, costs, or expenses of whatever kind or nature, known or
unknown, contingent or otherwise, arising out of, or in any way
related to (a) the presence, disposal, release, or threatened
release of any Hazardous Materials which are on, from, or affecting
the soil, water, vegetation, building, personal property, persons,
animals, or otherwise; (b) any personal injury (including
wrongful death) or property damage (real or personal) arising out
of or related to such Hazardous Materials; (c) any lawsuit
brought or threatened, settlement reached, or government order
relating to such Hazardous Materials; and/or (d) any violation
of laws, orders, regulations, requirements, or demand of
governmental authorities, or any policies or requirements of the
Mortgagee, which are based upon or in any way related to such
Hazardous Materials, including, without limitation, attorneys and
consultant fees, investigation and laboratory fees, court costs,
and litigation expenses. In the event this Mortgage is foreclosed,
or Mortgagor tenders a deed in lieu of foreclosure, Mortgagor shall
deliver the Mortgaged Property to the Mortgagee free of any and all
Hazardous Materials so that the condition of the Mortgaged Property
shall conform with all applicable federal, state and local laws,
ordinances, rules or regulations affecting the Mortgaged Property.
For purposes of this Paragraph, “Hazardous Materials”
includes, without limitation, any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or
toxic substances, or related materials defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials
Transportation Act, as amended (42 U.S.C. Sections 1801, et seq.),
the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. Sections 2901, et seq.), and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal,
state or local environmental laws, ordinances, rules, or
regulations. The provisions of this Section shall be in addition to
any and all obligations and liabilities Mortgagor may have to
Mortgagee at common law, and shall survive the transactions
contemplated herein. Mortgagee in its sole discretion, in the event
of any Event of Default under this Mortgage, may inspect the
Mortgaged Property or retain others to inspect the Mortgaged
Property and conduct whatever tests Mortgagee deems necessary to
insure Mortgagor is in compliance with
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the warranties, covenants and
representations contained in this Section. In the event Mortgagee
ascertains, with or without an inspection of the Mortgaged
Property, that there are any violations of any warranties or
covenants contained in this Section or that any of
Mortgagor’s representations contained herein are inaccurate,
then Mortgagee may foreclose this Mortgage, although Mortgagee
shall be under no obligation to do so, or Mortgagee may pursue any
other remedies provided under the Loan Documents which Mortgagee is
entitled to pursue as a result of a violation of the warranties and
covenants of this Section or as a result of any inaccurate or false
representations contained in this Section.
2. MORTGAGOR’S
DEFAULT.
2.1 Mortgagor’s
Defaults and Mortgagee’s Remedies.
2.1.1 Events of
Default Each of the following shall constitute an “
Event of Default. ” under this Mortgage:
2.1.1.1 Mortgagor
fails to pay, when due, any interest or installment of principal on
the Note; or
2.1.1.2 Mortgagor
fails to pay, when due, any amount payable under this Mortgage
other than principal or interest and such failure continues for a
period of five Business Days after notice thereof from Mortgagee to
Mortgagor; or
2.1.1.3 Mortgagor
fails to keep or perform any of the agreements, undertakings,
obligations, covenants or conditions under this Mortgage not
expressly referred to in anot
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