Exhibit 10.01
THIS DOCUMENT HAS
BEEN PREPARED BY:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
THIS DOCUMENT IS TO
BE RETURNED TO:
LandAmerica Financial Group
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
AMENDED AND RESTATED
MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT AND FIXTURE FILING
STATE OF FLORIDA DOCUMENTARY STAMP TAX AND NONRECURRING INTANGIBLE TAX
WERE PREVIOUSLY PAID IN CONNECTION WITH THE ORIGINAL NOTE AND MORTGAGE
RECORDED AT OFFICIAL RECORDS VOLUME 864, PAGE 1288 OF THE PUBLIC RECORDS OF
COLUMBIA COUNTY, FLORIDA AND ARE NOW DUE ONLY ON THE SUMS EVIDENCED BY THE
SANDWICH NOTE (AS DEFINED BELOW)
THIS AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
SECURITY AGREEMENT AND FIXTURE FILING (this "Mortgage") is dated as of ,
2002, between FAMILY STEAK HOUSES OF FLORIDA, INC., a Florida corporation
("Borrower"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
to and for the benefit of GE CAPITAL FRANCHISE FINANCE CORPORATION, a Delaware
corporation ("Lender"), whose address is ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS:
Lender is the holder of a promissory note dated , in the original
principal amount of $ (the "Original Note") made by Borrower and payable
to the order of Lender. The Original Note is secured by a Mortgage, Assignment
of Rents and Leases, Security Agreement and Fixture Filing dated from
Borrower to FFCA Mortgage Corporation ("Original Lender") recorded among the
Public Records of Columbia County, Florida in Official Record Volume 864, Page
1288 ("Original Mortgage") on certain improved real property located in Columbia
County, Florida. The Original Mortgage was assigned by Original Lender to
LaSalle Bank National Association, f/k/a LaSalle National Bank, Trustee pursuant
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to that certain Indenture dated as of April 1, 1999 ("LaSalle") pursuant to an
Assignment of Mortgage dated and recorded among the Public Records of
Columbia County, Florida in Official Record Volume at Page and assigned by
LaSalle to Lender pursuant to an Assignment of Mortgage dated as of the date
hereof and recorded among the Public Records of Columbia County, Florida in
Official Record Volume , Page . Subsequently, Borrower requested and
Lender agreed to make and additional loan to Borrower in the original principal
amount of $458,720.94, the repayment of which is evidenced by that certain
romissory Note dated of even date herewith (the "Sandwich Note"). Borrower has
requested and Lender has agreed to make certain amendments to the Original
Note and Sandwich Note, including changing the interest rate and the terms of
ayment., and consolidating the Original Note and the Sandwich Note. The
Original Note is and the Sandwich Note are being consolidated, amended and
restated in their entirety to reflect such amendments. State of Florida
Documentary Stamp Tax and Nonrecurring Intangible Tax were paid on the Original
Note and are now due only on the amounts evidenced by the Sandwich Note. The
Original Note is being consolidated with the Sandwich Note and amended and
estated in its entirety in a Consolidated, Amended and Restated Note dated of
even date herewith (as consolidated, amended and restated, the "Note") to
reflect among other things, a change in the interest rate and terms of payment.
The Borrower and the Lender now desire to amend and modify the terms of the
Original Mortgage and have agreed, for purposes of convenience, to amend and
restate the Original Mortgage, in its entirety.
The capitalized terms used in this Mortgage, if not elsewhere defined
herein, are defined as indicated in Article I. Borrower holds the fee simple
interest in the Premises, subject to the Permitted Exceptions. Borrower is
executing this Mortgage for the purpose of granting the interest of Borrower in
and to the Mortgaged Property (as defined in the Granting Clauses below) as
security for the payment of the Obligations. The Mortgaged Property shall be
and remain subject to the lien of this Mortgage and shall constitute security
for the Obligations so long as the Obligations shall remain outstanding.
GRANTING CLAUSES:
Borrower, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, by
these presents does hereby create a security interest in, mortgage, grant,
bargain, sell, assign, pledge, give, transfer, set over and convey unto Lender
and to its successors and assigns WITH POWER OF SALE AND RIGHT OF ENTRY, for the
benefit and security of Lender and its successors and assigns, all of Borrower's
estate, right, title and interest in, to and under any and all of the following
property (the "Mortgaged Property"), whether now owned or hereafter acquired,
subject only to the Permitted Exceptions:
Premises, Rents and Derivative Interests
The Premises, all rents, issues, profits, royalties, income and other
benefits derived from the property comprising the Premises and the Personal
Property (as defined below) or any portion thereof (collectively, the "Rents");
all leases or subleases covering the Premises and the Personal Property or any
portion thereof now or hereafter existing or entered into, (collectively,
"Leases" and individually, a "Lease"), including, without limitation, all cash
or security deposits, advance rentals and deposits or payments of similar nature
and all guaranties relating to the Leases; all options to purchase or lease the
Premises and the Personal Property or any portion thereof or interest therein,
and any greater estate in the Premises; all interests, estate or other claims,
both in law and in equity, with respect to the Premises and the Personal
Property or any portion thereof; all easements, rights-of-way and rights used in
connection therewith or as a means of access thereto, and all tenements,
hereditaments and appurtenances thereof and thereto, and all water rights and
shares of stock evidencing the same; all land lying within the right-of-way of
any street, open or proposed, adjoining the Premises and any and all sidewalks,
alleys and strips and gores of land adjacent to or used in connection with the
Premises;
Personal Property
All tangible personal property now or at any time hereafter located on or
at the Premises or used in connection therewith, including, without limitation,
all machinery, appliances, furniture, equipment and inventory (the "Personal
Property");
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Intangibles
All existing and future accounts, contract rights, including, without
limitation, with respect to equipment leases, general intangibles, files, books
of account, agreements, franchise, license and/or area development agreements,
distributor agreements, Indemnity Agreements, permits, licenses and certificates
necessary or desirable in connection with the acquisition, ownership, leasing,
construction, operation, servicing or management of the property comprising the
Premises and the Personal Property or any portion thereof, whether now existing
or entered into or obtained after the date hereof, all existing and future names
under or by which the property comprising the Premises and the Personal Property
or any portion thereof may at any time be operated or known, all rights to carry
on business under any such names or any variant thereof, and all existing and
future telephone numbers and listings, advertising and marketing materials,
trademarks and good will in any way relating to the property comprising the
Premises and the Personal Property or any portion thereof; and
Claims and Awards
All the claims or demands with respect to the Premises and the Personal
Property or any portion thereof, including, without limitation, claims or
demands with respect to the proceeds of insurance in effect with respect
thereto, claims under any indemnity agreement, including, without limitation,
any indemnity agreement executed for the benefit of the Premises and the
Personal Property or any portion thereof with respect to Hazardous Materials or
USTs, and any and all awards made for the taking by eminent domain, or by any
proceeding or purchase in lieu thereof, of the whole or any part of the Premises
and the Personal Property, including, without limitation, any awards resulting
from a change of grade of streets and awards for severance damages.
The Mortgaged Property shall include all products and proceeds of the
foregoing property.
TO HAVE AND TO HOLD the Mortgaged Property hereby granted or mortgaged or
intended to be granted or mortgaged, unto Lender, and its successors and
assigns, upon the terms, provisions and conditions set forth herein.
THIS MORTGAGE SHALL SECURE THE FOLLOWING INDEBTEDNESS AND OBLIGATIONS (the
"Obligations"):
(i) Payment of indebtedness evidenced by the Note together with all
extensions, renewals, amendments and modifications thereof;
(ii) Payment of all other indebtedness and other sums, with interest
thereon, which may be owed under, and performance of all other obligations
and covenants contained in, any Loan Document (other than the Environmental
Indemnity Agreement), together with any other instrument given to evidence
or further secure the payment and performance of any obligation secured
hereby or thereby; and
(iii) Payment of all indebtedness and other sums, with interest
thereon, which may be owed under, and performance of all other obligations
and covenants contained in any Other Agreement, together with any other
instrument given to evidence or further secure the payment and performance
of any obligation secured thereby.
It is the intention of the parties hereto that the Mortgaged Property shall
secure all of the Obligations presently or hereafter owed, and that the priority
of the security interest created by this Mortgage for all such Obligations shall
be controlled by the time of proper recording of this Mortgage. In addition,
this Mortgage shall also secure unpaid balances of advances made with respect to
the Mortgaged Property for the payment of taxes, assessments, insurance
premiums, costs or any other advances incurred for the protection of the
Mortgaged Property, together with interest thereon until paid at the Default
Rate, all as contemplated in this Mortgage, all of which shall constitute a part
of the Obligations. This paragraph shall serve as notice to all persons who may
seek or obtain a lien on the Mortgaged Property subsequent to the date of
recording of this Mortgage, that until this Mortgage is released, any debt owed
Lender by Borrower, including advances made subsequent to the recording of
this Mortgage, shall be secured with the priority afforded this Mortgage as
recorded.
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Notwithstanding the foregoing or any other provisions of this Mortgage to
the contrary:
(x) in the event that the Loan becomes the subject of a Securitization,
Participation or Transfer, this Mortgage shall only secure indebtedness and
obligations relating to the Loan and any other loans between any of the Borrower
Parties on the one hand and any of the Lender Entities on the other hand which
are part of the same Loan Pool as the Loan; and
(y) in the event that any loans between any of the Borrower Parties on
the one hand and any of the Lender Entities on the other hand (other than the
Loan) become the subject of a Securitization, Participation or Transfer, this
Mortgage shall not secure any indebtedness and obligations relating to such
loans unless the Loan is part of the same Loan Pool as such loans.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the Note and the other
Loan Documents are to be executed, delivered and secured and that the Mortgaged
Property is to be held and disposed of by Lender, upon and subject to the
provisions of this Mortgage.
ARTICLE I
DEFINED TERMS
Section 1.01. Incorporation of Definitions. Initially capitalized terms
not otherwise defined in this Mortgage shall have the meanings set forth in that
certain Loan Agreement dated as of the date of this Mortgage between Borrower
and Lender, as the same may be amended from time to time (the "Loan Agreement")
Section 1.02. Additional Definitions. Unless the context otherwise
specifies or requires, the following terms shall have the meanings specified
(such definitions to be applicable equally to singular and plural nouns and
verbs of any tense):
"Environmental Indemnity Agreement" means that certain Environmental
Indemnity Agreement dated as of the date of this Mortgage executed by Borrower
for the benefit of Lender and such other parties as are identified in
such agreement with respect to the Premises, as the same may be amended from
time to time.
"Event of Default" has the meaning set forth in Section 6.01.
"Improvements" means all buildings, fixtures and other improvements now or
hereafter located on the Land (whether or not affixed to the Land).
"Indemnified Parties" means Lender and Environmental Insurer and any person
or entity who is or will have been involved in the origination of the Loan, any
person or entity who is or will have been involved in the servicing of the Loan,
any person or entity in whose name the encumbrance created by this Mortgage is
or will have been recorded, persons and entities who may hold or acquire or will
have held a full or partial interest in the Loan (including, but not limited to,
investors or prospective investors in any Securitization, Participation or
Transfer, as well as custodians, trustees and other fiduciaries who hold or have
held a full or partial interest in the Loan for the benefit of third parties),
as well as the respective directors, officers, shareholders, partners, members,
employees, lenders, agents, servants, representatives, contractors,
subcontractors, affiliates, subsidiaries, participants, successors and assigns
of any and all of the foregoing (including but not limited to any other person
or entity who holds or acquires or will have held a participation or other full
or partial interest in the Loan or the Mortgaged Property, whether during the
term of the Loan or as a part of or following a foreclosure of the Loan and
including, but not limited to, any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender's assets and business).
"Land" means the parcel or parcels of real estate legally described in
Exhibit A attached hereto, and all rights, privileges and appurtenances
therewith.
"Lease" and "Leases" has the meaning set forth in the Granting Clause.
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"Loan" means the loan made by Lender to Borrower which is evidenced by the
Note and secured by this Mortgage.
"Loan Agreement" has the meaning set forth in Section 1.01.
"Mortgaged Property" has the meaning set forth in the Granting Clause.
"Net Award" has the meaning set forth in Section 4.01(b)(v).
"Net Insurance Proceeds" has the meaning set forth in Section 4.01(a)(iii)
"Note" means the promissory note dated as of even date herewith in the
amount of $889,000 executed by Borrower and payable to Lender which is secured
by this Mortgage and any amendments, extensions or modifications thereof,
including, without limitation, any amendment and restatement of the Note as a
result of a prepayment contemplated by Section 9 of the Loan Agreement.
"Obligations" has the meaning set forth in the Granting Clause.
"Other Agreements" means, collectively, all agreements and instruments
between, among or by (1) any of the Borrower Parties, and, or for the benefit
of, (2) any of the Lender Entities, including, without limitation, promissory
notes and guaranties; provided, however, the term "Other Agreements" shall not
include the agreements and instruments defined in the Loan Agreement as the Loan
Documents.
"Outstanding Obligations" has the meaning set forth in Section
4.01(b)(iv)(x)(aa).
"Partial Taking" has the meaning set forth in Section 4.01(b)(ii).
"Personal Property" has the meaning set forth in the Granting Clause.
"Premises" means the Land and the Improvements.
"Rents" has the meaning set forth in the Granting Clause.
"Restoration" means the restoration, replacement or rebuilding of the
Premises, or any part thereof, as nearly as possible to its value, condition and
character immediately prior to any damage, destruction or Taking.
"State" means the State in which the Premises is located.
"Taking" has the meaning set forth in Section 4.01(b)(i).
"Total Taking" has the meaning set forth in Section 4.01(b)(ii).
"UCC" has the meaning set forth in Section 6.02(iii).
ARTICLE II
INCORPORATION OF REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER
The representations, warranties and covenants of Borrower set forth in the
Loan Agreement are incorporated by reference into this Mortgage as if stated in
full in this Mortgage. All representations and warranties as incorporated herein
shall be deemed to have been made as of the date of this Mortgage and all
representations, warranties and covenants incorporated herein shall survive the
execution and delivery of this Mortgage.
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ARTICLE III
COVENANTS OF BORROWER
In addition to any covenants of Borrower set forth in the Loan Agreement or
any other Loan Document, Borrower hereby covenants to Lender and agrees as
follows until the Obligations are satisfied in full:
Section 3.01. Recording. Borrower shall, upon the execution and delivery
hereof and thereafter from time to time, take such actions as Lender may request
to cause this Mortgage, each supplement and amendment to such instrument and
financing statements with respect thereto and each instrument of further
assurance (collectively, the "Recordable Documents") to be filed, registered and
recorded as may be required by law to publish notice and maintain the first lien
or security interest, as applicable, hereof upon the Mortgaged Property and to
publish notice of and protect the validity of the Recordable Documents.
Borrower shall, from time to time, perform or cause to be performed any other
act and shall execute or cause to be executed any and all further instruments
(including financing statements, continuation statements and similar statements
with respect to any of said documents) requested by Lender for carrying out the
intention of, or facilitating the performance of, this Mortgage. Lender shall
be and is hereby irrevocably appointed the agent and attorney-in-fact of
Borrower to comply therewith (including the execution, delivery and filing of
such financing statements and other instruments), which appointment is coupled
with an interest; provided, however, Lender shall not exercise such power of
attorney unless Borrower has first failed to comply with this Section, and
provided, further, that this sentence shall not prevent any default in the
observance of this Section from constituting an Event of Default. To the extent
permitted by law, Borrower shall pay or cause to be paid recording taxes and
fees incident thereto and all expenses, taxes and other governmental charges
incident to or in connection with the preparation, execution, delivery or
acknowledgment of the Recordable Documents, any instruments of further assurance
and the Note.
Section 3.02. Use; Maintenance and Repair; Leases. (a) The Mortgaged
Property shall be used solely for the operation of a Permitted Concept and for
no other purpose. Except as set forth below, and except during periods when the
Premises is untenantable by reason of fire or other casualty or condemnation
provided, however, during all such periods while the Premises is untenantable,
Borrower shall strictly comply with the terms and conditions of Section 4.01 of
this Mortgage), Borrower shall at all times while this Mortgage is in effect
occupy the Mortgaged Property and diligently operate its business on the
Mortgaged Property. Borrower may cease diligent operation of business at the
Mortgaged Property for a period not to exceed 90 days and may do so only once
within any five-year period while this Mortgage is in effect. If Borrower does
discontinue operation as permitted by this Section, Borrower shall (i) give
written notice to Lender within 10 days after Borrower elects to cease
operation, (ii) provide adequate protection and maintenance of the Mortgaged
Property during any period of vacancy and (iii) pay all costs necessary to
restore the Mortgaged Property to its condition on the day operation of the
business ceased at such time as the Mortgaged Property is reopened for
Borrower's business operations or other substituted use. Notwithstanding
anything herein to the contrary, Borrower shall pay monthly the principal and
interest due under the Note during any period in which Borrower discontinues
operation.
Borrower shall not, and shall not permit any lessee to, by itself or
through any lease or other type of transfer, convert the Premises to an
alternative use while this Mortgage is in effect without Lender's consent, which
consent shall not be unreasonably withheld. Lender may consider any or all of
the following in determining whether to grant its consent, without being deemed
to be unreasonable: (i) whether the converted use will be consistent with
the highest and best use of the Mortgaged Property, and (ii) whether the
converted use will increase Lender's risks or decrease the value of the
Mortgaged Property.
(b) Borrower shall (i) maintain the Mortgaged Property in good
condition and repair, subject to reasonable and ordinary wear and tear, free
from actual or constructive waste, (ii) operate, remodel, update and modernize
the Mortgaged Property in accordance with those standards adopted from time to
time by Franchisor on a system-wide basis for the Permitted Concept, with such
remodeling and modernizing being undertaken in accordance with Franchisor's
system-wide timing schedules for such activities, and (iii) pay all operating
costs of the Premises in the ordinary course of business.
(c) Borrower shall not (i) enter into any Leases without Lender's prior
written consent; (ii) modify or amend the terms of any Lease without Lender's
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prior written consent; (iii) grant any consents under any Lease, including,
without limitation, any consent to an assignment of any Lease, a mortgaging of
the leasehold estate created by any Lease or a subletting by the lessee under
any Lease, without Lender's prior written consent; (iv) terminate, cancel,
surrender, or accept the surrender of, any Lease, or waive or release any person
from the observance or performance of any obligation to be performed under the
terms of any Lease or liability on account of any warranty given thereunder,
without Lender's prior written consent; or (v) assign, transfer, mortgage,
pledge or hypothecate any Lease or any interest therein to any party other than
Lender, without Lender's prior written consent. Any lease, modification,
amendment, grant, termination, cancellation, surrender, waiver or release in
violation of the foregoing provision shall be null and void and of no force and
effect. Unless Lender otherwise consents or elects, Borrower's title to the
Mortgaged Property and the leasehold interest in the Mortgaged Property created
by any Lease shall not merge, but shall always be kept separate and distinct,
notwithstanding the union of such estates in Borrower, Lender or any other
person by purchase, operation of law, foreclosure of this Mortgage, sale of the
Mortgaged Property pursuant to this Mortgage or otherwise.
(d) Borrower shall (i) fulfill, perform and observe in all respects
each and every condition and covenant of Borrower contained in any Lease; (ii)
give prompt notice to Lender of any claim or event of default under any Lease
given to or by Borrower, together with a complete copy or statement of any
information submitted or referenced in support of such claim or event of
default; (iii) at the sole cost and expense of Borrower, enforce the performance
and observance of each and every covenant and condition of any Lease to be
performed or observed by any other party thereto, unless such enforcement is
waived in writing by Lender; (iv) appear in and defend any action challenging
the validity, enforceability or priority of the lien created hereby or the
validity or enforceability of any Lease; and (v) hold that portion of the Rents
which is sufficient to discharge all current sums due under the Note for use in
the payment of such sums.
Section 3.03. Alterations and Improvements. Borrower shall not alter the
exterior, structural, plumbing or electrical elements of the Mortgaged Property
in any manner without the consent of Lender, which consent shall not be
unreasonably withheld or conditioned; provided, however, Borrower may undertake
nonstructural alterations to the Mortgaged Property costing less than $100,000
without Lender's consent. For purposes of this Mortgage, alterations to the
exterior, structural, plumbing or electrical elements of the Mortgaged Property
shall mean:
(i) alterations which affect the foundation or "footprint" of the
Improvements;
(ii) alterations which involve the structural elements of the
Improvements, such as a load-bearing wall, structural beams, columns,
supports or roof; or
(iii) alterations which materially affect any of the building
systems, including, without limitation, the electrical systems, plumbing,
HVAC and fire and safety systems.
If Lender's consent is required hereunder and Lender consents to the making of
any such alterations, the same shall be made by Borrower at Borrower's sole
expense by a licensed contractor and according to plans and specifications
approved by Lender and subject to such other conditions as Lender shall require.
Any work at any time commenced on the Mortgaged Property shall be prosecuted
diligently to completion, shall be of good workmanship and materials and shall
comply fully with all the terms of this Mortgage. Upon completion of any
alterations or any Restoration, Borrower shall promptly provide Lender with (i)
evidence of full payment to all laborers and materialmen contributing to the
alterations, (ii) an architect's certificate certifying the alterations to have
been completed in conformity with the plans and specifications, (iii) a
certificate of occupancy (if the alterations are of such a nature as would
require the issuance of a certificate of occupancy), and (iv) any other
documents or information reasonably requested by Lender.
Section 3.04. After-Acquired Property. All right, title and interest of
Borrower in and to all improvements, alterations, substitutions, restorations
and replacements of, and all additions and appurtenances to, the Mortgaged
Property, hereafter acquired by or released to Borrower, immediately upon such
acquisition or release and without any further granting by Borrower, shall
become part of the Mortgaged Property and shall be subject to the lien hereof
fully, completely and with the same effect as though now owned by Borrower and
specifically described in the Granting Clauses hereof. Borrower shall execute
and deliver to Lender any further assurances, mortgages, grants, conveyances or
assignments thereof as the Lender may reasonably require to subject the same to
the lien hereof.
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Section 3.05. Taxes, Assessments, Charges and Other Impositions. (a)
Borrower shall do or cause to be done everything necessary to preserve the lien
hereof without expense to Lender, including, without limitation, paying and
discharging or causing to be paid and discharged, whether or not payable
directly by Borrower or subject to withholding at the source, (i) all taxes,
assessments, levies, fees, water and sewer rents and charges and all other
governmental charges, general, special, ordinary or extraordinary, and all
charges for utility or communications services, which may at any time be
assessed, levied or imposed upon Borrower, the Mortgaged Property, this
Mortgage, the Obligations or the Rents or which may arise in respect of the
occupancy, use, possession or operation thereof, (ii) all income, excess
profits, sales, gross receipts and other taxes, duties or imposts, whether
similar or not in nature, assessed, levied or imposed by any Governmental
Authority on Borrower, the Mortgaged Property or the Rents, and (iii) all lawful
claims and demands of mechanics, laborers, materialmen and others which, if
unpaid, might create a lien on the Mortgaged Property, or on the Rents, unless
Borrower shall contest the amount or validity thereof in accordance with
subsection (b).
(b) Borrower may, at its own expense, contest or cause to be contested,
by appropriate legal proceedings conducted in good faith and with due diligence,
the amount or validity or application, in whole or in part, of any item
specified in subsection (a) or lien therefor, provided that (i) Borrower shall
provide written notice to Lender of any contest involving more than $10,000.00,
(ii) such proceeding shall suspend the collection thereof from the Mortgaged
Property or any interest therein, (iii) neither the Mortgaged Property nor any
interest therein would be in any danger of being sold, forfeited or lost by
reason of such proceedings, (iv) no Event of Default has occurred and is
continuing, and (v) Borrower shall have deposited with Lender adequate reserves
for the payment of the taxes, together with all interest and penalties thereon,
unless paid in full under protest, or Borrower shall have furnished the security
as may be required in the proceeding or as may be required by Lender to insure
payment of any contested taxes.
Section 3.06. Insurance. (a) Borrower shall maintain, with respect to the
Mortgaged Property, at its sole expense, the following types and amounts of
insurance (which may be included under a blanket insurance policy if all the
other terms hereof are satisfied), in addition to such other insurance as Lender
may reasonably require from time to time:
(i) Insurance against loss, damage or destruction by fire and
other casualty, including theft, vandalism and malicious mischief, flood
(if the Premises is in a location designated by the Federal Emergency
Management Administration as a Special Flood Hazard Area), earthquake (if
the Premises is in an area subject to destructive earthquakes within
recorded history), boiler explosion (if there is any boiler upon the
Premises), plate glass breakage, sprinkler damage (if the Premises have a
sprinkler system), all matters covered by a standard extended coverage
endorsement, special coverage endorsement commonly known as an "all risk"
endorsement and such other risks as Lender may reasonably require, insuring
the Mortgaged Property for not less than 100% of their full insurable
replacement cost.
(ii) Commercial general liability and property damage insurance,
including a products liability clause, covering Lender and Borrower against
bodily injury liability, property damage liability and automobile bodily
injury and property damage liability, including without limitation any
liability arising out of the ownership, maintenance, repair, condition or
operation of the Mortgaged Property or adjoining ways, streets or sidewalks
and, if applicable, insurance covering Lender, against liability arising
from the sale of liquor, beer or wine on the Premises. Such insurance
policy or policies shall contain a broad form contractual liability
endorsement under which the insurer agrees to insure Borrower's obligations
under Section 7.09 hereof to the extent insurable, and a "severability of
interest" clause or endorsement which precludes the insurer from denying
the claim of either Borrower or Lender because of the negligence or other
acts of the other, shall be in amounts of not less than $1,000,000.00 per
injury and occurrence with respect to any insured liability, whether for
personal injury or property damage, or such higher limits as Lender may
reasonably require from time to time, and shall be of form and substance
reasonably satisfactory to Lender.
(iii) Business income insurance equal to 100% of the principal and
interest payable under the Note for a period of not less than six months.
8
(iv) State Worker's compensation insurance in the statutorily
mandated limits, employer's liability insurance with limits not less than
$500,000 or such greater amount as Lender may from time to time require and
such other insurance as may be necessary to comply with applicable laws.
(b) All insurance policies shall:
(i) Provide for a waiver of subrogation by the insurer as to
claims against Lender, its employees and agents and provide that such
insurance cannot be unreasonably cancelled, invalidated or suspended on
account of the conduct of Borrower, its officers, directors, employees or
agents;
(ii) Provide that any "no other insurance" clause in the insurance
policy shall exclude any policies of insurance maintained by Lender and
that the insurance policy shall not be brought into contribution with
insurance maintained by Lender;
(iii) Contain a standard without contribution mortgage clause
endorsement in favor of Lender and its successors and assigns as their
interests may appear and any other lender designated by Lender;
(iv) Provide that the policy of insurance shall not be terminated,
cancelled or substantially modified without at least thirty (30) days'
prior written notice to Lender and to any lender covered by any standard
mortgage clause endorsement;
(v) Provide that the insurer shall not have the option to restore
the Premises if Lender elects to terminate this Mortgage in accordance with
the terms hereof;
(vi) Be issued by insurance companies licensed to do business in the
state in which the Premises is located and which are rated A:VI or better
by Best's Insurance Guide or otherwise approved by Lender; and
(vii) Provide that the insurer shall not deny a claim because of the
negligence of Borrower, anyone acting for Borrower or any tenant or other
occupant of the Mortgaged Property.
It is expressly understood and agreed that the foregoing minimum limits of
insurance coverage shall not limit the liability of Borrower for its acts or
missions as provided in this Mortgage. All liability insurance policies (with
the exception of worker's compensation insurance to the extent not available
under statutory law) shall designate Lender and its successors and assigns as
additional insureds as their interests may appear and shall be payable as set
forth in Article IV hereof. All such policies shall be written as primary
policies, with deductibles not to exceed 10% of the amount of coverage. Any
other policies, including any policy now or hereafter carried by Lender, shall
serve as excess coverage. Borrower shall procure policies for all insurance for
periods of not less than one year and shall provide to Lender certificates of
insurance or, upon Lender's request, duplicate originals of insurance policies
evidencing that insurance satisfying the requirements of this Mortgage is in
effect at all times.
Section 3.07. Impound Account. Upon the occurrence of an Event of Default
under this Mortgage or any other Loan Document, Lender may require Borrower to
pay to Lender sums which will provide an impound account (which shall not be
deemed a trust fund) for paying up to the next one year of taxes, assessments
and/or insurance premiums. Upon such requirement, Lender will estimate the
amounts needed for such purposes and will notify Borrower to pay the same to
Lender in equal monthly installments, as nearly as practicable, in addition to
all other sums due under this Mortgage. Should additional funds be required at
any time, Borrower shall pay the same to Lender on demand. Borrower shall
advise Lender of all taxes and insurance bills which are due and shall cooperate
fully with Lender in assuring that the same are paid. Lender may deposit all
impounded funds in accounts insured by any federal or state agency and may
commingle such funds with other funds and accounts of Lender. Interest or other
gains from such funds, if any, shall be the sole property of Lender. If an
Event of Default shall occur subsequent to Lender requiring the establishment of
an impound account pursuant to this Section, Lender may apply all impounded
funds against any sums due from Borrower to Lender. Lender shall give to
Borrower an annual accounting showing all credits and debits to and from such
impounded funds received from Borrower.
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Section 3.08. Advances by Lender. Lender may make advances to perform any
of the covenants contained in this Mortgage on Borrower's behalf and all sums so
advanced (and all sums advanced pursuant to any other provision hereof) by
Lender shall be secured hereby. Borrower shall repay on demand all sums so
advanced with interest thereon at the Default Rate, such interest to be computed
from and including the date of the making of such advance to and including the
date of such repayment, and at Lender's election, Lender may add the amount of
such advance to the principal balance of the Loan.
Section 3.09. Negative Covenants. Without limiting the terms and conditions of
Section 8 of the Loan Agreement, Borrower agrees that Borrower shall not,
without the prior written consent of Lender, sell, convey, mortgage, grant,
bargain, encumber, pledge, assign, or otherwise transfer the Mortgaged Property
or any part thereof or permit the Mortgaged Property or any part thereof to be
sold, conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred (each, a "Prohibited Transaction"), other than sales from
inventory in the ordinary course of business and the replacement of obsolete
Personal Property. A sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer within the meaning of this Section shall be
deemed to include, but not limited to, (a) an installment sales agreement
wherein Borrower agrees to sell the Mortgaged Property or any part thereof for a
price to be paid in installments; and (b) an agreement by Borrower leasing all
or any part of the Mortgaged Property or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Lease or any Rents.
Lender's consent to a Prohibited Transaction shall be subject to the
satisfaction of such conditions as Lender shall determine in its sole
discretion, including, without limitation, (i) Borrower having executed and
delivered such modifications to the terms of this Mortgage and the other Loan
Documents as Lender shall request, (ii) the Prohibited Transaction having been
approved by each of the rating agencies which have issued ratings in connection
with any Securitization of the Loan as well as any other rating agency selected
by Lender, and (iii) the proposed transferee having assumed the Note, this
Mortgage and the other Loan Documents (as modified pursuant to clause (i)
above). In addition, any such consent shall be conditioned upon the payment by
Borrower to Lender of (x) a fee equal to one percent (1%) of the then
outstanding principal balance of the Note and (y) all out-of-pocket costs and
expenses incurred by Lender in connection with such consent, including, without
limitation, reasonable attorneys' fees. Lender shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Obligations immediately due and
payable upon Borrower's sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Mortgaged Property without Lender's
consent, as required hereunder. The provisions of this Section shall apply to
every sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Mortgaged Property regardless of whether
voluntary or not, or whether or not Lender has consented to any previous sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of the Mortgaged Property.
ARTICLE IV
POSSESSION, USE AND RELEASE OF THE MORTGAGED PROPERTY
Section 4.01. Casualty or Condemnation. Borrower, immediately upon
obtaining knowledge of any casualty to any portion of the Mortgaged Property or
of any proceeding or negotiation for the taking of all or any portion of the
Mortgaged Property in condemnation or other eminent domain proceedings, shall
notify Lender of such casualty, proceeding or negotiation. Any award,
compensation or other payment resulting from such casualty or condemnation or
eminent domain proceeding, as applicable, shall be applied as set forth below
(the "Proceeds"). Lender may participate in any condemnation or eminent domain
proceeding, and Borrower will deliver or cause to be delivered to Lender all
instruments reasonably requested by Lender to permit such participation.
(a) Casualty. (i) In the event of any material damage to or
destruction of the Mortgaged Property or any part thereof, Borrower will
promptly give written notice to Lender, generally describing the nature and
extent of such damage or destruction. No damage to or destruction of the
Mortgaged Property shall relieve Borrower of its obligation to pay any monetary
sum due under the Loan Documents at the time and in the manner provided in the
Loan Documents.
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(ii) In the event of any damage to or destruction of the Mortgaged
Property or any part thereof, Borrower, whether or not the Proceeds, if any, on
account of such damage or destruction shall be sufficient for the purpose, at
its expense, shall promptly cause the Restoration to be commenced and completed.
(iii) Proceeds received by Lender and Borrower on account of any
occurrence of damage to or destruction of the Mortgaged Property or any part
thereof, less the costs, fees and expenses incurred by Lender and Borrower in
the collection thereof, including, without limitation, adjuster's fees and
expenses and attorneys' fees and expenses (the "Net Insurance Proceeds"), shall
be paid to (1) Borrower, if the amount of such Net Insurance Proceeds is less
than $100,000 and applied by Borrower toward the cost of the Restoration, and
(2) Lender, if the amount of such Net Insurance Proceeds is $100,000 or greater.
Net Insurance Proceeds paid to Lender shall be held and disbursed by Lender, or
as Lender may from time to time direct, as the Restoration progresses, to pay or
reimburse Borrower for the cost of the Restoration, upon written request of
Borrower accompanied by evidence, reasonably satisfactory to Lender, that (aa)
the Restoration is in full compliance with all Applicable Regulations and all
private restrictions and requirements, (bb) the amount requested has been paid
or is then due and payable and is properly a part of such cost, (cc) there are
no mechanics' or similar liens for labor or materials theretofore supplied in
connection with the Restoration, (dd) if the estimated cost of the Restoration
exceeds the Net Insurance Proceeds (exclusive of Proceeds received from
Borrower's business income insurance), Borrower has deposited into an escrow
satisfactory to Lender such excess amount, which sum will be disbursed pursuant
to escrow instructions satisfactory to Lender, and (ee) the balance of such Net
Insurance Proceeds, together with the funds deposited into escrow, if any,
pursuant to the preceding subsection (dd), after making the payment requested
will be sufficient to pay the balance of the cost of the Restoration. Upon
receipt by Lender of evidence reasonably satisfactory to it that the Restoration
has been completed and the cost thereof paid in full, and that there are no
mechanics' or similar liens for labor or materials supplied in connection
therewith, the balance, if any, of such Net Insurance Proceeds shall be paid to
Borrower. If at the time of the damage or destruction to the Mortgaged Property
or at any time thereafter an Event of Default shall have occurred and be
continuing under the Loan Documents, all Net Insurance Proceeds shall be paid to
Lender, and Lender may retain and apply the Net Insurance Proceeds toward the
Obligations whether or not then due and payable, in such order, priority and
proportions as Lender in its discretion shall deem proper, or to cure such Event
of Default, or, in Lender's discretion, Lender may pay such Net Insurance
Proceeds in whole or in part to Borrower to be applied toward the cost of the
Restoration. If Lender shall receive and retain Net Insurance Proceeds, the
lien of this Mortgage shall be reduced only by the amount received and retained
by Lender and actually applied by Lender in reduction of the Obligations.
(b) Condemnation. (i) In case of a taking of all or any part of the
Mortgaged Property or the commencement of any proceedings or negotiations which
might result in a taking, for any public or quasi-public purpose by any lawful
power or authority by exercise of the right of condemnation or eminent domain or
by agreement between Lender, Borrower and those authorized to exercise such
right ("Taking"), Borrower will promptly give written notice thereof to Lender,
generally describing the nature and extent of such Taking. Lender shall file
and prosecute on behalf of Lender and Borrower any and all claims for Proceeds,
and all Proceeds on account of a Taking shall be paid to Lender.
(ii) In case of a Taking of the whole of the Mortgaged Property, other
than for temporary use ("Total Taking"), or in case of a Taking of less than all
of the Mortgaged Property ("Partial Taking"), the Loan Documents shall remain in
full force and effect. In the case of a Partial Taking, Borrower, whether or
not the Proceeds, if any, on account of such Partial Taking shall be sufficient
for the purpose (but provided they are made available by Lender for such
purpose), at its own cost and expense, will promptly commence and complete the
Restoration. In case of a Partial Taking, other than a temporary use, of such a
substantial part of the Mortgaged Property as shall result in the Mortgaged
Property remaining after such Partial Taking being unsuitable for use, such
Taking shall be deemed a Total Taking.
(iii) In case of a temporary use of the whole or any part of the
Mortgaged Property by a Taking, the Loan Documents shall remain in full force
and effect without any reduction of any monetary sum payable under the Loan
Documents. In any proceeding for such Taking, Lender shall have the right to
intervene and participate; provided that, if such intervention shall not be
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permitted, Borrower shall consult with Lender, its attorneys and experts, and
make all reasonable efforts to cooperate with Lender in the prosecution or
defense of such proceeding. At the termination of any such use or occupation of
the Mortgaged Property, Borrower will, at its own cost and expense, promptly
commence and complete the Restoration.
(iv) Proceeds on account of a Taking, less the costs, fees and expenses
incurred by Lender and Borrower in connection with the collection thereof,
including, without limitation, attorneys' fees and expenses, shall be applied in
the following order:
(x) Proceeds received on account of a Total Taking shall be
allocated as follows:
(aa) There shall be paid to the Lender an amount up to the sum
of the outstanding principal, including all sums advanced by Lender
hereunder, and interest under the Note, all as of the date on which
such payment is made, such amount shall be applied first against
all sums advanced by Lender under this Mortgage, second against the
accrued but unpaid interest on the Note, and third to the remaining
unpaid principal amount of the Note. If the Proceeds received on
account of a Total Taking are not sufficient to satisfy the
outstanding principal balance of the Note, all accrued but unpaid
interest on the Note, all other sums due under the Note, all sums
advanced by Lender under this Mortgage and all other sums due and
payable under this Mortgage and the other Loan Documents
corresponding to the Premises (collectively, the "Outstanding
Obligations"), Borrower shall pay to Lender simultaneously with the
payment of such Proceeds to Lender the difference between the
amount of such Proceeds and the amount of the Outstanding
Obligations.
(bb) Any remaining balance shall be paid to Borrower.
(y) Proceeds received on account of a Partial Taking shall be held
and allocated as follows:
(i) first, toward the cost of the Restoration, such application
of net awards and other payments to be made substantially in the
manner provided in Section 4.01(a)(iii) of this Mortgage; and
(ii) then, all or any portion of the balance of such proceeds
shall, in Lender's sole discretion, either be paid to:
(1) Lender, as the holder of this Mortgage, and applied
toward the Outstanding Obligations in such order, priority and
proportion, and at such time on or prior to the Maturity Date
(as defined in the Note), as Lender shall determine; or
(2) Borrower; provided, however, in Lender's sole
discretion, such proceeds shall be pledged to Lender to secure
the Outstanding Obligations pursuant to a security agreement
reasonably satisfactory to Lender, or, with Lender's consent,
Borrower shall provide Lender with alternative security
satisfactory to Lender in its sole discretion.
Lender may deposit any funds held by it in accounts insured by
any federal or state agency and may commingle such funds with other
funds and accounts of Lender. Interest or gains from such funds, if
any, shall be the sole property of Lender.
(z) Proceeds received on account of a Taking for temporary use
shall be held by Lender and applied to the payment of the monthly
installments of combined interest and principal becoming due under the
Note, until such Taking for temporary use is terminated and the
Restoration, if any, has been completed; provided, however, that, if any
portion of any such award or payment is made by reason of any damage to or
destruction of the Mortgaged Property, such portion shall be held and
applied as provided in Section 4.01(a)(iii) hereof. The balance, if any,
of such awards and payments shall be paid to Borrower.
(v) Notwithstanding the foregoing, if at the time of any Taking or at
any time thereafter an Event of Default shall have occurred and be continuing
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under the Loan Documents, Lender is hereby authorized and empowered, in the name
and on behalf of Borrower and otherwise, to file and prosecute Borrower's claim,
if any, for an award on account of any Taking and to collect such award and
apply the same, after deducting all costs, fees and expenses incident to the
collection thereof (the "Net Award"), toward the Obligations whether or not then
due and payable, in such order, priority and proportions as Lender in its
discretion shall deem proper, or to cure such Event of Default, or, in Lender's
discretion, Lender may pay the Net Award in whole or in part to Borrower to be
applied toward the cost of the Restoration. If Lender shall receive and retain
the Net Award, the lien of this Mortgage shall be reduced only by the amount
received and retained by Lender and actually applied by Lender in reduction of
the Obligations.
Section 4.02. Conveyance in Anticipation of Condemnation, Granting of
Easements, Etc. If no Event of Default shall have occurred and be continuing,
Borrower may, from time to time with respect to its interest in the Mortgaged
Property, and with Lender's prior written consent, (i) sell, assign, convey or
otherwise transfer any interest therein to any person legally empowered to take
such interest under the power of eminent domain, (ii) grant easements and other
rights in the nature of easements, (iii) release existing easements or other
rights in the nature of easements which are for the benefit of the Mortgaged
Property, (iv) dedicate or transfer unimproved portions of the Mortgaged
Property for road, highway or other public purposes, (v) execute petitions to
have the Mortgaged Property annexed to any municipal corporation or utility
district, and (vi) execute and deliver to any person any instrument appropriate
to confirm or effect such grants, releases, dedications and transfers.
Section 4.03. Lender's Power. At any time, or from time to time, without
liability therefor, Lender, without affecting the personal liability of any
person for payment of the Obligations or the effect of this Mortgage upon the
remainder of said Mortgaged Property, may from time to time without notice (i)
release any part of said Mortgaged Property, (ii) consent in writing to the
making of any map or plat thereof, (iii) join in granting any easement thereon,
(iv) join in any extension agreement or any agreement subordinating the lien or
charge hereof, (v) release any person so liable, (vi) extend the maturity or
alter any of the terms of any Obligations, (vii) grant other indulgences, (viii)
take or release any other or additional security for any Obligations, (ix) make
compositions or other arrangements with debtors in relation thereto, or (x)
advance additional funds to protect the security hereof or to pay or discharge
the Obligations in the event Borrower fails to do so, and all amounts so
advanced shall be secured hereby and shall be due and payable upon demand by
Lender.
ARTICLE V
SECURITY INTEREST
Section 5.01. Security Agreement. With respect to the Personal Property
or any portion of the Mortgaged Property which constitutes fixtures or other
property governed by the UCC, this Mortgage shall constitute a security
agreement between Borrower, as the debtor, and Lender, as the secured party, and
Borrower hereby grants to Lender a security interest in such portion of the
Mortgaged Property. Cumulative of all other rights of Lender hereunder, Lender
shall have all of the rights conferred upon secured parties by the UCC.
Borrower authorizes Lender to file financing statements with respect to the
security interest of Lender, continuation statements with respect thereto, and
any amendments to such financing statements which may be necessitated by reason
of any of the changes described in Section 6.C of the Loan Agreement.
Furthermore, at any time, and from time to time, Borrower will execute and
deliver to Lender all financing statements that may from time to time be
required by Lender to establish and maintain the validity and priority of the
security interest of Lender, or any modification thereof. Lender may exercise
any or all of the remedies of a secured party available to it under the UCC with
respect to such property. If, upon the occurrence and during the continuance of
an Event of Default, Lender proceeds to dispose of such property in accordance
with the provisions of the UCC, 10 days' notice by Lender to Borrower shall be
deemed to be reasonable notice under any provision of the UCC requiring such
notice; provided, however, that Lender may at its option dispose of such
property in accordance with Lender's rights and remedies with respect to the
real property pursuant to the provisions of this Mortgage, in lieu of proceeding
under the UCC. Borrower represents that its exact legal name and state of
formation or organization are as set forth in the first paragraph of this
Mortgage. Borrower agrees that, notwithstanding any provision in the UCC to the
contrary, Borrower shall not file a termination statement of any financing
statement filed by Lender in connection with any security interest granted under
this Mortgage if Lender reasonably objects to the filing of such termination
statement.
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Section 5.02. Effective as a Financing Statement and Fixture Filing. This
Mortgage shall be effective as a financing statement filed as a fixture filing
with respect to all fixtures included within the Mortgaged Property and is to be
filed for record in the real estate records of each county where any part of the
Mortgaged Property (including said fixtures) is situated. This Mortgage shall
also be effective as a financing statement covering any other portion of the
Mortgaged Property and may be filed in any other appropriate filing or recording
office. The mailing address of Borrower is the address of Borrower set forth in
the introductory paragraph of this Mortgage, and the address of the Lender from
which information concerning the security interests hereunder may be obtained is
the address of Lender as set forth in the introductory paragraph of this
Mortgage. A carbon, photographic or other reproduction of this Mortgage or of
any financing statement relating to this Mortgage shall be sufficient as a
financing statement for any of the purposes referred to in this Section.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.01. Events of Default. Each of the following shall be an event
of default under this Mortgage (each an "Event of Default"):
(i) Subject to the provisions of Section 3.05(b) of this Mortgage, if
Borrower fails to pay, prior to delinquency, any taxes, assessments or
other charges the failure of which to pay will result in the imposition of
a lien against the Mortgaged Property pursuant to Applicable Regulations.
(ii) If Borrower shall fail to maintain insurance in accordance with
the requirements of Section 3.06 of this Mortgage.
(iii) If Borrower fails to observe or perform any of the covenants,
conditions, or obligations of this Mortgage, provided, however, if any such
failure does not involve the payment of any principal, interest or other
monetary sum due under the Note, is not willful or intentional, does not
place any rights or interest in collateral of Lender in immediate jeopardy,
and is within the reasonable power of Borrower to promptly cure after
receipt of notice thereof, all as determined by Lender in its reasonable
discretion, then such failure shall not constitute an Event of Default
hereunder, unless otherwise expressly provided herein, unless and until
Lender shall have given Borrower notice thereof and a period of 30 days
shall have elapsed, during which period Borrower may correct or cure such
failure, upon failure of which an Event of Default shall be deemed to have
occurred hereunder without further notice or demand of any kind being
required. If such failure cannot reasonably be cured within such 30-day
period, as determined by Lender in its reasonable discretion, and Borrower
is diligently pursuing a cure of such failure, then Borrower shall have a
reasonable period to cure such failure beyond such 30-day period, which
shall in no event exceed 90 days after receiving notice of the failure from
Lender. If Borrower shall fail to correct or cure such failure within such
90-day period, an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being required.
(iv) If there is an "Event of Default" under the Loan Agreement.
Section 6.02. Remedies. Upon the occurrence and during the continuance of
an Event of Default subject to the limitations set forth in Section 6.01, Lender
may declare all or any part of the Obligations to be due and payable, and the
same shall thereupon become due and payable without any presentment, demand,
protest or notice (including notice of intent to accelerate and notice of
acceleration) of any kind except as otherwise expressly provided herein.
Furthermore, upon the occurrence and during the continuance of an Event of
Default, Lender may:
(i) Either in person or by agent, with or without bringing any action
or proceeding, or by a receiver appointed by a court, and without regard to
the adequacy of its security, enter upon and take possession of the
Mortgaged Property or any part thereof and do any acts which it deems
necessary or desirable to preserve the value, marketability or rentability
of the Mortgaged Property, or part thereof or interest therein, increase
14
the income therefrom or protect the security hereof and, with or without
taking possession of the Mortgaged Property, take any action described
herein, ▇▇▇ for or otherwise collect the Rents, including those past due
and unpaid, and apply the same, less costs and expenses of operation and
collection including reasonable attorneys' fees, upon any Obligations, all
in such order as Lender may determine and pursue any remedy available under
Chapter 697.07, Florida Statutes as amended, supplemented or superceded
from time to time. The entering upon and taking possession of the
Mortgaged Property, the taking of any action described herein, the
collection of such Rents, and the application thereof as aforesaid, shall
not cure or waive any Event of Default or notice of default or invalidate
any act done in response to such Event of Default or pursuant to such
notice of default and, notwithstanding the continuance in possession of the
Mortgaged Property or the collection, receipt and application of Rents,
Lender shall be entitled to exercise every right provided for in any of the
Loan Documents or by law upon any Event of Default, including the right to
exercise the power of sale herein conferred;
(ii) Commence an action to foreclose this Mortgage in a single parcel
or in several parcels, appoint a receiver or specifically enforce any of
the covenants hereof;
(iii) Exercise any or all of the remedies available to a secured
party under the Uniform Commercial Code as adopted in the State ("UCC"),
including, without limitation:
(1) Either personally or by means of a court appointed
receiver, commissioner or other officer, take possession of all or any
of the Personal Property and exclude therefrom Borrower and all others
claiming under Borrower, and thereafter hold, store, use, operate,
manage, maintain and control, make repairs, replacements, alterations,
additions and improvements to and exercise all rights and powers of
Borrower in respect of the Personal Property or any part thereof.
In the event Lender demands or attempts to take possession of the
Personal Property in the exercise of any rights under any of the Loan
Documents, Borrower promises and agrees to promptly turn over and
deliver complete possession thereof to Lender;
(2) Without notice to or demand upon Borrower, make such
payments and do such acts as Lender may deem necessary to protect its
security interest in the Personal Property, including, without
limitation, paying, purchasing, contesting or compromising any
encumbrance, charge or lien which is prior to or superior to the
security interest granted hereunder and, in exercising any such powers
or authority, to pay all expenses incurred in connection therewith;
(3) Require Borrower to assemble the Personal Property or any
portion thereof, at the Premises, and promptly to deliver such
Personal Property to Lender, or an agent or representative designated
by it. Lender, and its agents and representatives, shall have the
right to enter upon any or all of Borrower's premises and property to
exercise Lender's rights hereunder;
(4) Sell, lease or otherwise dispose of the Personal Property
at public sale, with or without having the Personal Property at the
place of sale, and upon such terms and in such manner as Lender may
determine. Lender may be a purchaser at any such sale;
(5) Unless the Personal Property is perishable or threatens to
decline speedily in value or is of a type customarily sold on a
recognized market, Lender shall give Borrower at least 10 days' prior
written notice of the time and place of any public sale of the
Personal Property or other intended disposition thereof. Such notice
may be delivered to Borrower at the address set forth at the beginning
of this Mortgage and shall be deemed to be given as provided herein;
and
(6) Any sale made pursuant to the provisions of this
subsection shall be deemed to have been a public sale conducted in a
commercially reasonable manner if held contemporaneously with the sale
of all or a portion of the other Mortgaged Property under power of
sale as provided herein upon giving the same notice with respect to
the sale of the Personal Property hereunder as is required for such
sale of the other Mortgaged Property under power of sale, and such
sale shall be deemed to be pursuant to a security agreement covering
both real and personal property under the UCC.
(iv) Exercise all of Borrower's rights and remedies under the
Indemnity Agreements, including, without limitation, making demands and
15
claims and receiving payments under the Indemnity Agreements. Borrower
hereby grants Lender a power of attorney (which grant shall be deemed
irrevocable and coupled with an interest) to exercise such rights and
remedies;
(v) Apply any sums then deposited in the impound account described
in Section 3.07 toward payment of the taxes, assessment and insurance
premiums for the Mortgaged Property and/or as a credit on the Obligations
in such priority and proportion as Lender may determine in its sole
discretion;
(vi) If held by Lender, surrender the insurance policies
maintained pursuant to Section 3.06, collect the unearned insurance
premiums and apply such sums as a credit on the Obligations in such
priority and proportion as Lender in its sole discretion shall deem proper,
and in connection therewith, Borrower hereby appoints Lender as agent and
attorney-in-fact (which is coupled with an interest and is therefore
irrevocable) for Lender to collect such insurance premiums; and
(vii) Sell Borrower's interest in the Mortgaged Property pursuant
to the power of sale herein conferred. If Lender elects to sell Borrower's
interest in the Mortgaged Property by exercise of such power of sale,
Lender shall cause such sale to be performed in the manner then required by
law.
(aa) Lender shall cause to be recorded, published and delivered
such notices of default and notices of sale as may then be required by law
and by this Mortgage. Thereafter, Lender shall sell Borrower's interest in
the Mortgaged Property at the time and place of sale fixed by it, either as
a whole, or in separate lots or parcels or items as Lender shall deem
expedient, and in such order as it may determine, at public auction to the
highest bidder for cash in lawful money of the United States payable at the
time of sale, or as otherwise may then be required by law. Lender shall
deliver to such purchaser or purchasers thereof its good and sufficient
deed or deeds conveying the property so sold, without any covenant or
warranty, express or implied. The recitals in such deed of any matters or
facts shall be conclusive proof of the truthfulness thereof. Any person,
including, without limitation, Borrower or Lender, may purchase at such
sale. Lender may sell not only the real property but also the Personal
Property and other interests which are a part of the Mortgaged Property, or
any part thereof, as a unit and as a part of a single sale, or may sell any
part of the Mortgaged Property separately from the remainder of the
Mortgaged Property. Lender shall not be required to take possession of any
part of the Mortgaged Property or to have any of the Personal Property
present at any sale of the Mortgaged Property. Lender may appoint or
delegate any one or more persons as agent to perform any act or acts
necessary or incident to any sale held by Lender, including the posting of
notices and the conduct of sale, but in the name and on behalf of Lender.
In the event any sale hereunder is not completed or is defective in the
opinion of Lender, such sale shall not exhaust the power of sale hereunder,
and Lender shall have the right to cause a subsequent sale or sales to be
made hereunder.
(bb) As may be permitted by law, Lender shall apply the proceeds
of sale (i) first, to payment of all costs, fees and expenses, including
attorneys' fees and expenses incurred by the Lender in exercising the power
of sale or foreclosing this Mortgage, (ii) second, to the payment of the
Obligations (including, without limitation, the principal, accrued interest
and other sums due and owing under the Note and the amounts due and owing
to Lender under this Mortgage) in such manner and order as Lender may
elect, and (iii) third, the remainder, if any, shall be paid to Borrower,
or to Borrower's heirs, devisees, representatives, successors or assigns,
or such other persons as may be entitled thereto.
(cc) Lender may in the manner provided by law postpone sale of all
or any portion of the Mortgaged Property.
Section 6.03. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Lender, as a matter of right and without notice to
Borrower or anyone claiming under Borrower, and without regard to the then value
of the Mortgaged Property or the interest of Borrower therein, or the insolvency
of Borrower or the then-owner of the Mortgaged Property, may seek the
appointment of a receiver for the Mortgaged Property upon ex parte application
to any court of the competent jurisdiction. Borrower waives any right to any
16
hearing or notice of hearing prior to the appointment of a receiver. Such
receiver shall be empowered (a) to take possession of the Mortgaged Property and
any businesses conducted by Borrower thereon and any business assets used in
connection therewith, (b) to exclude Borrower and Borrower's agents, servants
and employees from the Mortgaged Property, or, at the option of the receiver, in
lieu of such exclusion, to collect a fair market rental from any such persons
occupying any part of the Mortgaged Property, (c) to collect the Rents, (d) to
complete any construction that may be in progress, (e) to continue the
development, marketing and sale of the Mortgaged Property, (f) to do such
maintenance and make such repairs and alterations as the receiver deems
necessary, (g) to use all stores of materials, supplies and maintenance
equipment on the Mortgaged Property and replace such items at the expense of the
receivership estate, (h) to pay all taxes and assessments against the Mortgaged
Property, all premiums for insurance thereon, all utility and other operating
expenses, and all sums due under any prior or subsequent encumbrance, (i) to
request that Lender advance such funds as may reasonably be necessary to the
effective exercise of the receiver's powers, on such terms as may be agreed upon
by the receiver and Lender, but not in excess of the Default Rate, and (j)
generally to do anything that Borrower could legally do if Borrower were in
possession of the Mortgaged Property. All expenses incurred by the receiver or
his agents, including obligations to repay funds borrowed by the receiver, shall
constitute a part of the Obligations. Any revenues collected by the receiver
shall be applied first to the expenses of the receivership, including reasonable
attorneys' fees incurred by the receiver and by Lender, together with interest
thereon at the highest rate of interest applicable in the Note from the date
incurred until repaid, and the balance shall be applied toward the Obligations
or in such other manner as the court may direct.
Section 6.04. Remedies Not Exclusive. Lender shall be entitled to enforce
payment and performance of any Obligations and to exercise all rights and powers
under this Mortgage or under any Loan Documents or other agreement or any laws
now or hereafter in force, notwithstanding some or all of the Obligations may
now or hereafter be otherwise secured, whether by mortgage, deed of trust,
pledge, lien, assignment or otherwise. Neither the acceptance of this Mortgage
nor its enforcement, whether by court action or pursuant to the power of sale or
other powers herein contained, shall prejudice or in any manner affect Lender's
right to realize upon or enforce any other security now or hereafter held by
Lender, it being agreed that Lender shall be entitled to enforce this Mortgage
and any other security now or hereafter held by Lender in such order and manner
as it may in its absolute discretion determine. No remedy herein conferred upon
or reserved to Lender is intended to be exclusive of any other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Lender, or to which Lender
may be otherwise entitled, may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by Lender. Lender may
pursue inconsistent remedies.
The acceptance by Lender of any sum after the same is due shall not
constitute a waiver of the right either to require prompt payment, when due, of
all other sums hereby secured or to declare a subsequent Event of Default as
herein provided. The acceptance by Lender of any sum in an amount less than the
sum then due shall be deemed an acceptance on account only and upon condition
that it shall not constitute a waiver of the obligation of Borrower to pay the
entire sum then due, and failure of Borrower to pay such entire sum then due
shall be an Event of Default, notwithstanding such acceptance of such amount on
account, as aforesaid. Lender shall be, at all times thereafter and until the
entire sum then due as contemplated by the Loan Documents shall have been paid,
and notwithstanding the acceptance by Lender thereafter of further sums on
account, or otherwise, entitled to exercise all rights in this instrument
conferred upon them or either of them, and the right to proceed with a sale
under any notice of default, or an election to sell, or the right to exercise
any other rights or remedies hereunder, shall in no way be impaired, whether any
of such amounts are received prior or subsequent to such proceeding, election or
exercise. Consent by Lender to any action or inaction of Borrower which is
subject to consent or approval of Lender hereunder shall not be deemed a waiver
of the right to require such consent or approval to future or successive actions
or inactions.
Section 6.05. Possession of Mortgaged Property. In the event of a
trustee's sale or foreclosure sale hereunder and after the time of such sale,
Borrower occupies the portion of the Mortgaged Property so sold, or any part
thereof, Borrower shall immediately become the tenant of the purchaser at such
sale, which tenancy shall be a tenancy from day to day, terminable at the will
of either tenant or landlord, at a reasonable rental per day based upon the
value of the portion of the Mortgaged Property so occupied, such rental to be
due and payable daily to the purchaser. An action of unlawful detainer shall
lie if the tenant holds over after a demand in writing for possession of such
Mortgaged Property; and this Mortgage and a trustee's or sheriff's deed shall
constitute a lease and agreement under which the tenant's possession arose and
continued. Nothing contained in this Mortgage shall be construed to constitute
Lender as a "mortgagee in possession" in the absence of its taking actual
possession of the Mortgaged Property pursuant to the powers granted herein.
17
Section 6.06. Waiver of Rights. Borrower waives the benefit of all laws
now existing or that hereafter may be enacted (i) providing for any appraisement
before sale of any portion of the Mortgaged Property, or (ii) in any way
extending the time for the enforcement of the collection of the Obligations or
creating or extending a period of redemption from any sale made in collecting
the Obligations. Borrower agrees that Borrower will not at any time insist
upon, plea, claim or take the benefit or advantage of any law now or hereafter
in force providing for any appraisement, valuation, stay, extension, redemption
or homestead exemption, and Borrower, for Borrower, Borrower's representatives,
successors and assigns, and for any and all persons ever claiming any interest
in the Mortgaged Property, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, homestead exemption, notice of
election to mature or declare due the whole of the Obligations and marshaling in
the event of foreclosure of the liens hereby created. If any law referred to in
this Section and now in force, of which Borrower, Borrower's heirs, devisees,
representatives, successors and assigns or other person might take advantage
despite this Section, shall hereafter be repealed or cease to be in force, such
law shall not thereafter be deemed to preclude the application of this Section.
Borrower expressly waives and relinquishes any and all rights, remedies and
defenses that Borrower may have or be able to assert by reason of the laws of
the State pertaining to the rights, remedies and defenses of sureties.
Section 6.07. Relief From Stay. In the event that Borrower commences a
case under the Code or is the subject of an involuntary case that results in an
order for relief under the Code, subject to court approval, Lender shall
thereupon be entitled and Borrower irrevocably consents to relief from any stay
imposed by Section 362 of the Code on or against the exercise of the rights and
remedies otherwise available to Lender as provided in the Loan Documents and
Borrower hereby irrevocably waives its rights to object to such relief. In the
event Borrower shall commence a case under the Code or is the subject of an
involuntary case that results in an order for relief under the Code, Borrower
hereby agrees that no injunctive relief against Lender shall be sought under
Section 105 or other provisions of the Code by Borrower or other person or
entity claiming through Borrower, nor shall any extension be sought of the stay
provided by Section 362 of the Code.
Section 6.08. Cash Collateral. Borrower hereby acknowledges and agrees
that in the event that Borrower commences a case under the Code or is the
subject of an involuntary case that results in an order for relief under the
Code: (i) that all of the Rents are, and shall for purposes be deemed to be,
"proceeds, product, offspring, rents, or profits" of the Premises covered by the
lien of this Mortgage, as such quoted terms are used in Section 552(b) of the
Code; (ii) that in no event shall Borrower assert, claim or contend that any
portion of the Rents are, or should be deemed to be, "accounts" or "accounts
receivable" within the meaning of the Code and/or applicable state law; (iii)
that the Rents are and shall be deemed to be in any such bankruptcy proceeding
"cash collateral" of Lender as that term is defined in Section 363 of the Code;
and (iv) that Lender has valid, effective, perfected, enforceable and "▇▇▇▇▇▇"
rights in and to the Rents without any further action required on the part of
Lender to enforce or perfect its rights in and to such cash collateral,
including, without limitation, providing notice to Borrower under Section 546(b)
of the Code.
Section 6.09. Assignment of Rents and Leases. (a) Borrower hereby
assigns, transfers, conveys and sets over to Lender all of Borrower's estate,
right, title and interest in, to and under the Leases, whether existing on the
date hereof or hereafter entered into, together with any changes, extensions,
revisions or modifications thereof and all rights, powers, privileges, options
and other benefits of Borrower as the lessor under the Leases regarding the
current tenants and any future tenants, and all the Rents from the Leases,
including those now due, past due or to become due. Borrower irrevocably
appoints Lender its true and lawful attorney-in-fact, at the option of Lender,
at any time and from time to time upon the occurrence and during the continuance
of an Event of Default, to take possession and control of the Premises, pursuant
to Borrower's rights under the Leases, to exercise any of Borrower's rights
under the Leases, and to demand, receive and enforce payment, to give receipts,
releases and satisfaction and to ▇▇▇, in the name of Borrower or Lender, for all
of the Rents. The power of attorney granted hereby shall be irrevocable and
coupled with an interest and shall terminate only upon the payment of all sums
due Lender for all losses, costs, damages, fees and expenses whatsoever
associated with the exercise of this power of attorney, and Borrower hereby
releases Lender from all liability (other than as a result of the gross
negligence or willful misconduct of Lender) whatsoever for the exercise of the
foregoing power of attorney and all actions taken pursuant thereto. The
consideration received by Borrower to execute and deliver this assignment and
the liens and security interests created herein is legally sufficient and will
provide a direct economic benefit to Borrower. It is intended by Borrower and
Lender that the assignment set forth herein constitutes an absolute assignment
18
and not merely an assignment for additional security. Notwithstanding the
foregoing, this assignment shall not be construed to bind Lender to the
performance of any of the covenants, conditions or provisions of Borrower
contained in the Leases or otherwise to impose any obligation upon Lender, and,
so long as no Event of Default shall have occurred and be continuing, Borrower
shall have a license, revocable upon an Event of Default, to possess and control
the Premises and collect and receive all Rents. Upon an Event of Default, such
license shall be automatically revoked. The assignment of Rents and Leases
contained in this Mortgage are intended to provide Lender with all rights and
remedies of mortgagees pursuant to Section 697.07, Florida Statutes, as may be
amended, supplemented or superceded from time to time. However, in no event
shall this reference diminish, alter, impair or affect any other rights or
remedies of Lender
(b) Upon the occurrence and during the continuance of an Event of
Default, Lender may, at any time without notice (except if required by
applicable law), either in person, by agent or by a court-appointed receiver,
regardless of the adequacy of Lender's security, and at its sole election
(without any obligation to do so), enter upon and take possession and control of
the Premises, or any part thereof, to perform all acts necessary and appropriate
to operate and maintain the Premises, including, but not limited to, execute,
cancel or modify the Leases, make repairs to the Premises, execute or terminate
contracts providing for the management or maintenance of the Premises, all on
such terms as are deemed best to protect the security of this assignment, and in
Lender's or Borrower's name, ▇▇▇ for or otherwise collect such Rents as
specified in this Mortgage as the same become due and payable, including, but
not limited to, Rents then due and unpaid. Lender may so ▇▇▇ for or otherwise
collect such Rents with or without taking possession of the Premises. Borrower
agrees that upon the occurrence and during the continuance of an Event of
Default, each tenant of the Premises shall make its rent payable to and pay such
rent to Lender (or Lender's agents) on Lender's written demand therefor,
delivered to such tenant personally, by mail, or by delivering such demand to
each rental unit, without any liability on the part of said tenant to inquire
further as to the existence of an Event of Default by Borrower.
(c) Rents collected subsequent to any Event of Default shall be applied
at the direction of, and in such order as determined by, Lender to the costs, if
any, of taking possession and control of and managing the Premises and
collecting such amounts, including, but not limited to, reasonable attorney's
fees, receiver's fees, premiums on receiver's bonds, costs of repairs to the
Premises, premiums on insurance policies, taxes, assessments and other charges
on the Premises, and the costs of discharging any obligation or liability of
Borrower with respect to the Leases and to the sums secured by this Mortgage.
Lender or the receiver shall have access to the books and records used in the
operation and maintenance of the Premises and shall be liable to account only
for those Rents actually received.
(d) Lender shall not be liable to Borrower, anyone claiming under or
through Borrower or anyone having an interest in the Premises by reason of
anything done or left undone by Lender hereunder, except to the extent of
Lender's gross negligence or willful misconduct.
(e) Any entering upon and taking possession and control of the Premises
by Lender or the receiver and any application of Rents as provided herein shall
not cure or waive any Event of Default hereunder or invalidate any other right
or remedy of Lender under applicable law or provided therein.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Satisfaction. If and when the Obligations shall have become
due and payable (whether by lapse of time or by acceleration or by the exercise
of the privilege of prepayment), and Borrower shall pay or cause to be paid
(provided such payment is permitted or required by the Note) the full amount
thereof and shall also pay or cause to be paid all other sums payable by the
Borrower Parties to the Lender Entities with respect to the Obligations, then
this Mortgage shall be void (otherwise it shall remain in full force and effect
in law and equity forever) and Lender agrees to execute an instrument evidencing
the satisfaction of all obligations under this Mortgage and releasing this
Mortgage which shall be prepared and recorded at Borrower's sole expense.
19
Section 7.02. Limitation of Rights of Others. Nothing in this Mortgage is
intended or shall be construed to give to any person, other than Borrower,
Environmental Insurer and the holder of the Note, any legal or equitable right,
remedy or claim under or in respect of this Mortgage or any covenant, condition
or provision herein contained.
Section 7.03. Severability. In case any one or more of the provisions
contained herein or in the Note shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Mortgage shall be
construed as if such provision had never been contained herein or therein.
Section 7.04. Notices; Amendments; Waiver. All notices, demands,
designations, certificates, requests, offers, consents, approvals, appointments
and other instruments given pursuant to this Mortgage (collectively called
"Notices") shall be in writing and given by (i) hand delivery, (ii) facsimile,
(iii) express overnight delivery service or (iv) certified or registered mail,
return receipt requested and shall be deemed to have been delivered upon (a)
receipt, if hand delivered, (b) transmission, if delivered by facsimile, (c) the
next Business Day, if delivered by express overnight delivery service, or (d)
the third Business Day following the day of deposit of such notice with the
United States Postal Service, if sent by certified or registered mail, return
receipt requested. Notices shall be provided to the parties and addresses (or
facsimile numbers, as applicable) specified below:
If to Borrower: Family Steak Houses of Florida, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: GE Capital Franchise Finance Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above. Whenever in this Mortgage the giving of Notice is required, the
giving thereof may be waived in writing at any time by the person or persons
entitled to receive such Notice. Except as in this Mortgage otherwise expressly
provided, (i) this Mortgage may not be modified except by an instrument in
writing executed by Borrower and Lender and (ii) no requirement hereof may be
waived at any time except by a writing signed by the party against whom such
waiver is sought to be enforced, nor shall any waiver be deemed a waiver of any
subsequent breach or default.
Section 7.05. Successors and Assigns. All of the provisions herein
contained shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto, to the same extent as if each such
successor and assign were in each case named as a party to this Mortgage.
Wherever used, the singular shall include the plural, the plural shall include
the singular and the use of any gender shall include all genders.
Section 7.06. Headings. The headings appearing in this Mortgage have been
inserted for convenient reference only and shall not modify, define, limit or
expand the express provisions of this Mortgage.
Section 7.07. Time of the Essence. Time is of the essence in the
performance of each and every obligation
under this Mortgage.
Section 7.08. Forum Selection; Jurisdiction; Venue; Choice of Law.
Borrower acknowledges that this Mortgage was substantially negotiated in the
State of Arizona, this Mortgage was delivered in the State of Arizona, all
payments under the Loan Documents will be delivered in the State of Arizona and
there are substantial contacts between the parties and the transactions
20
contemplated herein and the State of Arizona. For purposes of any action or
proceeding arising out of this Mortgage, the parties hereto expressly submit to
the jurisdiction of all federal and state courts located in the State of
Arizona. Borrower consents that it may be served with any process or paper by
registered mail or by personal service within or without the State of Arizona in
accordance with applicable law. Furthermore, Borrower waives and agrees not to
assert in any such action, suit or proceeding that it is not personally subject
to the jurisdiction of such courts, that the action, suit or proceeding is
brought in an inconvenient forum or that venue of the action, suit or proceeding
is improper. The creation of this Mortgage and the rights and remedies of
Lender with respect to the Mortgaged Property, as provided herein and by the
laws of the State, shall be governed by and construed in accordance with the
internal laws of the State without regard to its principles of conflicts of law.
With respect to other provisions of this Mortgage, this Mortgage shall be
governed by the internal laws of the State of Arizona, without regard to its
principles of conflicts of law. Nothing in this Section shall limit or restrict
the right of Lender to commence any proceeding in the federal or state courts
located in the State to the extent Lender deems such proceeding necessary or
advisable to exercise remedies available under the Mortgage or the other Loan
Documents.
Section 7.09. Indemnification. Borrower shall indemnify and hold harmless
each of the Indemnified Parties for, from and against any and all claims, suits,
liabilities (including, without limitation, strict liabilities), actions,
proceedings, obligations, debts, damages, losses, costs, expenses, diminutions
in value, fines, penalties, charges, fees, expenses, judgments, awards, amounts
paid in settlement and damages of whatever kind or nature (including, without
limitation, attorneys' fees, court costs and other costs of defense)
(collectively, "Losses") (excluding Losses suffered by an Indemnified Party
arising out of such Indemnified Party's gross negligence or willful misconduct;
provided, however, that the term "gross negligence" shall not include gross
negligence imputed as a matter of law to any of the Indemnified Parties solely
by reason of Borrower's interest in the Mortgaged Property or Borrower's failure
to act in respect of matters which are or were the obligation of Borrower under
the Loan Documents) caused by, incurred or resulting from Borrower's operations
of, or relating in any manner to, the Mortgaged Property, whether relating to
its original design or construction, latent defects, alteration, maintenance,
use by Borrower or any person thereon, supervision or otherwise, or from any
breach of, default under or failure to perform any term or provision of this
Mortgage by Borrower, its officers, employees, agents or other persons. It is
expressly understood and agreed that Borrower's obligations under this Section
shall survive the expiration or earlier termination of this Mortgage for any
reason.
Section 7.10. Waiver of Jury Trial and Punitive, Consequential, Special
and Indirect Damages. LENDER, BY ACCEPTING THIS MORTGAGE, AND BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO
AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR
IN CONNECTION WITH THIS MORTGAGE, THE RELATIONSHIP OF LENDER AND BORROWER,
BORROWER'S USE OR OCCUPANCY OF THE MORTGAGED PROPERTY, AND/OR ANY CLAIM FOR
INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. THIS WAIVER BY THE
PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN
NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, BORROWER
AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
EITHER MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES
FROM THE OTHER AND ANY OF THE OTHER'S AFFILIATES, OFFICERS, DIRECTORS OR
EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES
PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER
PARTY AGAINST THE OTHER OR ANY OF THE OTHER'S AFFILIATES, OFFICERS, DIRECTORS OR
EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF
OR IN CONNECTION WITH THIS MORTGAGE OR ANY DOCUMENT CONTEMPLATED HEREIN OR
RELATED HERETO. THE WAIVER BY BORROWER AND LENDER OF ANY RIGHT THEY MAY HAVE TO
SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED
BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
21
IN WITNESS WHEREOF, Borrower has executed and delivered this Mortgage as of
the day and year first above written.
BORROWER:
FAMILY STEAK HOUSES OF FLORIDA, INC., a
Florida corporation
By ________________________________
Printed Name ______________________
Title _____________________________
U.S. Federal Tax Identification Number:
_______________________________________
Organization Identification Number:
_______________________________________
__________________________
Witness
__________________________
Printed Name
__________________________
Witness
__________________________
Printed Name
STATE OF )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me on ,
2002 by , of Family Steak Houses of Florida, Inc.,
a Florida corporation, on behalf of the corporation. He/She is personally known
to me or has produced a driver's license as identification and did not take an
oath.
______________________________
Notary Public
My Commission Expires:
________________________________
22
EXHIBIT A
LEGAL DESCRIPTION OF PREMISES
23
