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MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING FOR COMMERCIAL PURPOSES
by
CLARKE AMERICAN CHECKS, INC.
as Mortgagor
to
BEAR STEARNS CORPORATE LENDING INC.
as Mortgagee
Dated as of: December 15, 2005
Property Address:
124 Metropolitan Drive
Salina, New York
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THIS INSTRUMENT WAS PREPARED BY AND
RECORD AND RETURN TO:
JONATHAN BAUMSTARK, ESQ.
LATHAM & WATKINS LLP
885 THIRD AVENUE, SUITE 1000
NEW YORK, NY 10022
TABLE OF CONTENTS
1.
DEFINITIONS...........................................................
1
GRANT.................................................................
3
2.
WARRANTIES, REPRESENTATIONS AND
COVENANTS.............................
3
2.1
Title to Mortgaged Property and Lien of this Instrument.....
3
2.2
First Lien Status...........................................
3
2.3
Payment and Performance.....................................
3
2.4
Replacement of Fixtures and Personalty......................
3
2.5
Maintenance of Rights of Way, Easements and Licenses........
3
2.6
Inspection..................................................
4
2.7
Other Covenants.............................................
4
2.8
Condemnation Awards and Insurance Proceeds..................
4
2.9
Transfer or Encumbrance of the Mortgaged Property...........
4
3.
DEFAULT AND
FORECLOSURE...............................................
4
3.1
Remedies....................................................
4
3.2
Separate Sales..............................................
6
3.3
Remedies Cumulative, Concurrent and Nonexclusive............
6
3.4
Release of and Resort to Collateral.........................
6
3.5
Waiver of Redemption, Notice and Marshalling of Assets......
6
3.6
Discontinuance of Proceedings...............................
6
3.7
Application of Proceeds.....................................
6
3.8
Occupancy After Foreclosure.................................
7
3.9
Protective Advances and Disbursements; Costs of
Enforcement.................................................
7
3.10
No Mortgagee in Possession..................................
7
4.
ASSIGNMENT OF RENTS AND
LEASES........................................
8
4.1
Assignment..................................................
8
4.2
No Obligation...............................................
8
4.3
Right to Apply Rents........................................
8
4.4
No Merger of Estates........................................
8
5.
SECURITY
AGREEMENT....................................................
9
5.1
Security Interest...........................................
9
5.2
Financing Statements........................................
9
5.3
Fixture Filing..............................................
9
6.
MISCELLANEOUS.........................................................
9
6.1
Notices.....................................................
9
6.2
Covenants Running with the Land.............................
10
6.3
Attorney-in-Fact............................................
10
6.4
Successors and Assigns......................................
11
6.5
No Waiver...................................................
11
6.6
Subrogation.................................................
11
6.7
Credit Agreement............................................
11
6.8
Release.....................................................
11
6.9
Waiver of Stay, Moratorium and Similar Rights...............
11
6.10
Obligations of Mortgagor, Joint and Several.................
11
i
6.11
Governing Law...............................................
12
6.12
Headings....................................................
12
6.13
Entire Agreement............................................
12
6.14
Future Advances.............................................
12
7.
Local Law
Provisions..................................................
12
7.1
Principles of Construction..................................
12
7.2
Commercial Property.........................................
12
7.3
Maximum Debt Secured........................................
12
7.4
Application Of Payments And Repayments......................
12
7.5
Insurance Proceeds..........................................
13
7.6
Trust Fund..................................................
13
7.7
Section 291-f Agreement.....................................
13
7.8
Power of Sale...............................................
13
Exhibit A: legal description
INDEX OF DEFINED TERMS
Covenants..................................................................
1
Credit
Agreement...........................................................
1
Fixtures...................................................................
1
Improvements...............................................................
1
Land.......................................................................
1
Leases.....................................................................
2
Loan
Documents.............................................................
1
Mortgage...................................................................
1
Mortgaged
Property.........................................................
1
Mortgagor..................................................................
1
Obligations................................................................
2
Permitted
Encumbrances.....................................................
2
Personalty.................................................................
2
Plans......................................................................
2
Property
Agreements........................................................
2
Rents......................................................................
2
UCC........................................................................
3
ii
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING FOR COMMERCIAL PURPOSES
This Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture
Filing for Commercial Purposes (this "Mortgage") is executed as of
December 15,
2005, by and from CLARKE AMERICAN CHECKS, INC., a Delaware
corporation
("Mortgagor"), whose address is 10931 Laureate Drive, San Antonio,
Texas 78249,
to BEAR STEARNS CORPORATE LENDING, INC., (together with its
successors and
assigns, collectively, "Mortgagee"), a Delaware corporation, as
Administrative
Agent for the Lenders under the Credit Agreement more fully
described below,
whose address is 383 Madison Avenue, New York, New York 10179.
1.
DEFINITIONS
As used herein, the following terms shall have the following
meanings:
"Covenants": All of the agreements, covenants, conditions,
warranties,
representations and other obligations made or undertaken by
Mortgagor or any
other person or entity to Mortgagee or others as set forth in the
Loan
Documents.
"Loan Documents": The (1) Credit Agreement dated as of December 15,
2005 among
Clarke American Corp., as borrower; CA Acquisition Holdings, Inc.,
a Delaware
corporation, the Lenders from time to time party thereto; Bear,
Stearns & Co.
Inc. and J.P. Morgan Securities, Inc., as joint lead arrangers and
joint book
running managers; JPMorgan Chase Bank, N.A., as syndication agent;
and Bear
Stearns Corporate Lending Inc., as administrative agent (the
"Credit
Agreement"), (2) the Security Documents, and the Notes, each as
defined in the
Credit Agreement, (3) this Mortgage, (4) the Intercompany Note, as
defined in
the Credit Agreement, (5) all other documents now or hereafter
executed by
Mortgagor or any other person or entity to evidence or secure the
payment and
performance of the Obligations and (6) all modifications,
restatements,
consolidations, extensions, renewals and replacements of any of the
foregoing.
"Mortgaged Property": All of Mortgagor's right title and interest
in or to (1)
the real property described in Exhibit A, together with any greater
estate
therein as hereafter may be acquired by Mortgagor (the "Land"), (2)
buildings,
structures and other improvements, now or at any time situated,
placed or
constructed upon the Land (the "Improvements"), (3) fixtures,
materials,
supplies, equipment, apparatus and other items of personal property
now owned or
hereafter acquired by Mortgagor and now or hereafter attached to,
installed in
or used in connection with any of the Improvements or the Land, and
all water,
gas, electrical, storm and sanitary sewer facilities and all other
utilities
whether or not situated in easements (the "Fixtures"), (4) all
goods,
instruments, documents, chattel paper and all other personal
property of any
kind or character, including such items of personal property as
defined in the
UCC, now owned or hereafter acquired by Mortgagor and now or
hereafter affixed
to, placed upon, used in connection with, arising from or otherwise
related to
the Land and Improvements or that may be used in or relating to the
planning,
development, financing or operation of the Mortgaged
Property, including, without limitation, furniture, furnishings,
equipment,
machinery, money, insurance proceeds, accounts, contract rights,
goodwill,
chattel paper, documents, property licenses and/or franchise
agreements, rights
of Mortgagor under leases of Fixtures or other personal property or
equipment,
inventory, all refundable, returnable or reimbursable fees,
deposits or other
funds or evidences of credit or indebtedness deposited by or on
behalf of
Mortgagor with any governmental authorities, boards, corporations,
providers of
utility services, public or private, including specifically, but
without
limitation, all refundable, returnable or reimbursable tap fees,
utility
deposits, commitment fees and development costs but only to the
extent
assignable (the "Personalty"), (5) reserves, escrows or impounds
required under
the Credit Agreement and all deposit accounts maintained by
Mortgagor with
respect to the Mortgaged Property, (6) plans, specifications, shop
drawings and
other technical descriptions prepared for construction, repair or
alteration of
the Improvements, and all amendments and modifications thereof (the
"Plans"),
(7) all leases, subleases, licenses, concessions, occupancy
agreements or other
agreements (written or oral, now or at any time in effect) which
grant a
possessory interest in, or the right to use, all or any part of the
Mortgaged
Property (the "Leases"), together with all related security and
other deposits,
(8) all of the rents, revenues, income, proceeds, profits, security
and other
types of deposits, and other benefits paid or payable by parties to
the Leases
other than Mortgagor for using, leasing, licensing, possessing,
operating from,
residing in, selling or otherwise enjoying the Mortgaged Property
(the "Rents"),
(9) to the extent assignable, all other agreements, such as
construction
contracts, architects' agreements, engineers' contracts, utility
contracts,
maintenance agreements, management agreements, service contracts,
permits,
licenses, certificates and entitlements in any way relating to the
development,
construction, use, occupancy, operation, maintenance, enjoyment,
acquisition or
ownership of the Mortgaged Property (the "Property Agreements"),
(10) all
rights, privileges, tenements, hereditaments, rights-of-way,
easements,
appendages and appurtenances appertaining to the foregoing, and all
right, title
and interest, if any, of Mortgagor in and to any streets, ways,
alleys, strips
or gores of land adjoining the Land or any part thereof, (11)
accessions,
replacements and substitutions for any of the foregoing and all
proceeds
thereof, (12) insurance policies, unearned premiums therefor and
proceeds from
such policies covering any of the above property now or hereafter
acquired by
Mortgagor, (13) all mineral, water, oil and gas rights now or
hereafter acquired
and relating to all or any part of the Mortgaged Property and (14)
any awards,
remunerations, reimbursements, settlements or compensation
heretofore made or
hereafter to be made by any governmental authority pertaining to
the Land,
Improvements, Fixtures or Personalty. As used in this Mortgage, the
term
"Mortgaged Property" shall mean all or, where the context permits
or requires,
any portion of the above or any interest therein.
"Obligations": As defined in the Credit Agreement, as well as all
obligations
arising under the Guarantee and Collateral Agreement (as defined in
the Credit
Agreement) and including, without limitation, all other
indebtedness,
obligations and liabilities now or hereafter existing of any kind
of Mortgagor
to Mortgagee under documents that recite that they are intended to
be secured by
this Mortgage.
"Permitted Encumbrances": The outstanding liens, easements,
restrictions,
security interests and other exceptions to title set forth in the
policy of
title insurance insuring the lien of this Mortgage issued on the
date hereof,
together with the liens and security interests in favor of
Mortgagee created or
permitted by the Loan Documents.
2
"UCC": The Uniform Commercial Code of the State of New York or, if
the creation,
perfection and enforcement of any security interest herein granted
is governed
by the laws of a state other than New York, then, as to the matter
in question,
the Uniform Commercial Code in effect in that state.
Capital terms used herein but not otherwise defined shall have the
meanings set
forth for such terms in the Credit Agreement.
GRANT.
To secure the full and timely payment and performance of the
Obligations,
Mortgagor MORTGAGES, GRANTS, BARGAINS, SELLS, TRANSFERS, ASSIGNS
and
HYPOTHECATES and CONVEYS the Mortgaged Property to Mortgagee,
subject, however,
to the Permitted Encumbrances and the Permitted Liens. The maturity
date of the
secured debt is December 15, 2011.
2. WARRANTIES, REPRESENTATIONS AND COVENANTS. Mortgagor warrants,
represents and
covenants to Mortgagee as follows:
2.1 Title to Mortgaged Property and Lien of this Instrument.
Mortgagor owns the
Mortgaged Property free and clear of any liens, claims or
interests, except the
Permitted Encumbrances and the Permitted Liens. This Mortgage
creates a valid,
enforceable first priority lien and security interest against the
Mortgaged
Property, subject only to the Permitted Encumbrances.
2.2 First Lien Status. Mortgagor shall preserve and protect the
first lien and
security interest status of this Mortgage and the other Loan
Documents. If any
lien or security interest other than a Permitted Encumbrance or a
Permitted Lien
is asserted against the Mortgaged Property, Mortgagor shall
promptly, and at its
expense, (a) give Mortgagee a detailed written notice of such lien
or security
interest (including origin, amount and other terms), and (b) pay
the underlying
claim in full or take such other action so as to cause it to be
released or
contest the same in compliance with the requirements of the Credit
Agreement
(including the requirement of providing a bond or other security
satisfactory to
Mortgagee to the extent required by the Credit Agreement).
2.3 Payment and Performance. Mortgagor shall pay and perform the
Obligations
when due under the Loan Documents to which it is a party and shall
perform the
Covenants under the Loan Documents to which it is a party in full
when they are
required to be performed.
2.4 Replacement of Fixtures and Personalty. Except as permitted by
the Credit
Agreement, Mortgagor shall not, without the prior written consent
of Mortgagee,
not to be unreasonably withheld, permit any of the Fixtures or
Personalty to be
removed at any time from the Land or Improvements, unless the
removed item is
removed temporarily for maintenance and repair or, if removed
permanently, is
immaterial or is obsolete and in either case, is replaced by an
article of equal
or better suitability and value, owned by Mortgagor subject to the
liens and
security interests of this Mortgage and the other Loan Documents,
and free and
clear of any other lien or security interest except such as may be
first
approved in writing by Mortgagee.
2.5 Maintenance of Rights of Way, Easements and Licenses. Mortgagor
shall
maintain all rights of way, easements, grants, privileges,
licenses,
certificates, permits, entitlements and
3
franchises necessary for the use of the Mortgaged Property and will
not, without
the prior consent of Mortgagee, not to be unreasonably withheld or
delayed,
consent to any public restriction (including any zoning ordinance)
or private
restriction as to the use of the Mortgaged Property which
restriction is
reasonably likely to materially and adversely effect the current
use of the
Mortgaged Property. Mortgagor shall comply in all material respects
with all
restrictive covenants affecting the Mortgaged Property, and all
zoning
ordinances and other public or private restrictions as to the use
of the
Mortgaged Property.
2.6 Inspection. Mortgagor shall permit Mortgagee, and Mortgagee's
respective
agents, representatives and employees, to inspect the Mortgaged
Property to the
extent permitted in Section 6.6 of the Credit Agreement.
2.7 Other Covenants. All of the covenants in the Credit Agreement
are
incorporated herein by reference. All property-related covenants in
the Credit
Agreement are incorporated as though Mortgagor were the "Borrower"
thereunder.
2.8 Condemnation Awards and Insurance Proceeds.
2.8.1 Condemnation Awards. Mortgagor assigns all awards and
compensation
for any condemnation or other taking, or any purchase in lieu
thereof, to
Mortgagee and authorizes Mortgagee to collect and receive such
awards and
compensation and to give proper receipts and acquaintances
therefor, subject to
the terms of the Credit Agreement.
2.8.2 Insurance Proceeds. Mortgagor assigns to Mortgagee all
proceeds of
any insurance policies insuring against loss or damage to the
Mortgaged
Property. Mortgagor authorizes and directs the issuer of each of
such insurance
policies to make payment for all such losses to Mortgagee, to be
released by
Mortgagee or applied in accordance with the terms of the Credit
Agreement.
Notwithstanding the foregoing, Mortgagee shall make available to
Mortgagor the
foregoing awards, compensation and proceeds of condemnation and
insurance, for
the purpose of restoration and rebuilding the Mortgaged Property,
to the same
extent that Mortgagor or the borrowers would be entitled to retain
Net Cash
Proceeds in connection with a Recovery Event (as both of those
terms are defined
in the Credit Agreement), under the terms of the Credit Agreement.
2.9 Transfer or Encumbrance of the Mortgaged Property. Mortgagor
shall not,
except as and to the extent permitted in the Credit Agreement,
sell, convey,
alienate, mortgage, encumber, pledge or otherwise transfer the
Mortgaged
Property or any part thereof, or permit the Mortgaged Property or
any part
thereof to be sold, conveyed, alienated, mortgaged, encumbered,
pledged or
otherwise transferred.
3.
DEFAULT AND FORECLOSURE
3.1 Remedies. During the occurrence and continuance of an Event of
Default (as
defined in the Credit Agreement), Mortgagee may, at Mortgagee's
election and by
or through Mortgagee or otherwise, exercise any or all of the
following rights,
remedies and recourses:
4
3.1.1 Acceleration. To the extent permitted by the Credit
Agreement,
declare the Obligations to be immediately due and payable, without
further
notice, presentment, protest, notice of intent to accelerate,
notice of
acceleration, demand or action of any nature whatsoever (each of
which hereby is
expressly waived by Mortgagor), whereupon the same shall become
immediately due
and payable.
3.1.2 Entry on Mortgaged Property. Enter the Mortgaged Property and
take
exclusive possession thereof and obtain possession of all books,
records and
accounts relating thereto. If Mortgagor remains in possession of
the Mortgaged
Property after an Event of Default and without Mortgagee's prior
written
consent, Mortgagee may invoke any legal remedies to dispossess
Mortgagor.
3.1.3 Operation of Mortgaged Property. Hold, lease, develop,
manage,
operate or otherwise use the Mortgaged Property upon such terms and
conditions
as Mortgagee may deem reasonable under the circumstances (making
such repairs,
alterations, additions and improvements and taking other actions,
from t
