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HomeMy WebLinkAbout950379AMENDED AND RESTATED MORTGAGE AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS 59-S9 F Dated as of October 30, 2009 FROM SUNOPTA INGREDIENTS INC., a Delaware corporation TO RECEIVED 11/4/2009 at 4:07 PM RECEIVING 950379 BOOK: 735 PAGE: 195 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY BANK OF MONTREAL, a Canadian chartered bank, as agent for the Secured Creditors hereinafter identified and defined Daniel W. Baker, Esq. Chapman and Cutler LLP 111 West Monroe Street Chicago, Illinois 60603 Telephone: (312) 845-3000 006195 This instrument was prepared by -and- 2706971.01.02.B.doc [Afton, Wyoming] 1550193 AMENDED AND RESTATED MORTGAGE AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS 000196 This Amended and Restated Mortgage and Security Agreement with Assignment of Rents (the "Mortgage dated as of October 30, 2009 from SunOpta Ingredients Inc., a Delaware corporation with its principal place of business and mailing address at 2'838 Bovaird Drive West, Brampton, Ontario, Canada L7A OH2 (hereinafter referred to as "Mortgagor to Bank of Montreal, a Canadian chartered bank with its principal place of business at 100 King Street West, 19th Floor, Toronto, Ontario, Canada M5X 1A1 "BMO acting as agent hereunder for the Secured Creditors hereinafter identified and defined (BMO acting as such agent and any successor or successors to BMO in such capacity being hereinafter referred to as "Mortgagee"); WITNESSETH THAT: WHEREAS, SunOpta Food Group LLC, a Delaware limited liability company (the "U.S. Borrower SunOpta Inc., a corporation existing under the laws of Canada "SunOpta Canada SunOpta LP, a Delaware limited partnership "LP" and together with the U.S. Borrower and SunOpta Canada, the "Borrowers" and each individually a "Borrower and BMO, individually and as Agent for the Secured Creditors identified and defined below, have entered into a Fifth Amended and Restated Credit Agreement dated as of October 30, 2009 (such Fifth Amended and Restated Credit Agreement, as the same may be amended or modified from time to time, including amendments and restatements thereof in its entirety, being hereinafter referred to as the "Credit Agreement pursuant to which BMO and other financial institutions and entities from time to time party to the Credit Agreement (BMO, in its individual capacity, and such other financial institutions and entities, including without limitation, the Swingline Lenders, the Hedge Lender and the L/C Lender as such terms are defined in the Credit Agreement, being hereinafter referred to collectively as the "Lenders" and individually as a "Lender have agreed, subject to certain terms and conditions, to extend credit and make certain other financial accommodations available to the Borrowers (the Lenders, the L/C Lender, the Hedge Lender, each Swingline Lender, together with any affiliates of such Lenders party to the Hedge Agreements and /or Banking Product Agreements referred to below, being hereinafter referred to collectively as the "Secured Creditors" and individually as a "Secured Creditor WHEREAS, all capitalized terms used herein which are not defined shall have the same meanings herein as such terms are defined in the Credit Agreement; WHEREAS, Mortgagor did heretofore execute and deliver to Harris N.A. (the "Former U.S. Security Agent that certain Mortgage and Security Agreement with Assignment of Rents dated as of March 15, 2002 and recorded in the Recorder's Office of Lincoln County, Wyoming on April 8, 2002 as Document No. 880158, Book 486, Page 840, as supplemented by that certain First Supplement to Mortgage and Security Agreement with Assignment of Rents dated as of November 25, 2002 and recorded in the Recorder's Office of Lincoln County, Wyoming on 000197 January 8, 2003 as Document No. 886757, Book 509, Page 116, as supplemented by that certain Second Supplement to Mortgage and Security Agreement with Assignment of Rents dated as of February 21, 2003 and recorded in the Recorder's Office of Lincoln County, Wyoming, on March 10, 2003 as Document No. 888294, Book 514PR, Page '549, as supplemented by that certain Third Supplement to Mortgage and Security Agreement with Assignment of Rents dated as of May 16, 2003 and recorded in the Recorder's Office of Lincoln County, Wyoming, on June 23, 2003 as Document No. 891034, Book 524, Page 866, as supplemented by that certain Fourth Supplement to Mortgage and Security Agreement with Assignment of Rents dated as of July 7, 2004 and recorded in the Recorder's Office of Lincoln County, Wyoming, on July 19, 2004 as Document No. 901162, Book 562, Page 325, as supplemented by that certain Fifth Supplement to Mortgage and Security Agreement with Assignment of 'Rents dated as of July 20, 2005, and recorded in the Recorder's Office of Lincoln County, Wyoming, on August 15, 2005 as Document No. 910922, Book 594, Page 401, as supplemented by that certain Sixth Supplement to Mortgage and Security Agreement with Assignment of Rents dated as of December 9, 2005, and recorded in the Recorder's Office of Lincoln County, Wyoming, on December 20, 2005 as Document No. 914586, Book 607, Page 880, and as supplemented by that Seventh Supplement to Mortgage and Security Agreement with Assignment of Rents dated as of September 13, 2006, and recorded in the Recorder's Office of Lincoln County, Wyoming, on September 28, 2006 as Document No. 922872, Book 635, Page 226 (collectively, the "Existing Mortgage encumbering the property described on Schedule I attached hereto, in order to secure certain indebtedness of the Borrowers owing to BMO and certain other lenders and entities (the "Existing Lenders from time to time party to that certain Fourth Amended and Restated Credit Agreement dated as of July 4, 2007, as amended from time to time; WHEREAS, the Former U.S. Security Agent, on behalf of itself and the other Existing Lenders, has assigned and transferred to Mortgagee pursuant to that certain Assignment of Security Interests dated as of September 28, 2009 by and between the Former U.S. Security Agent and Mortgagee, all of its right, title and interest in, to and under the liens and security interests of Mortgagor granted to the Former. U.S. Security Agent pursuant to the Existing Mortgage; WHEREAS, BMO and the other Lenders have agreed, subject to certain terms and conditions, to make available to (i) SunOpta Canada, a revolving credit facility "Facility A in a maximum principal amount of $20,000,000 Canadian Dollars or the equivalent U.S. Dollar Amount in the form of Prime Loans, USBR Loans, Bankers' Acceptances, Letters of Credit, Letters of Guarantee, FEFCs or Purchase Options, with advances under Facility A as set forth in the Credit Agreement payable to the order of the respective Lender named therein (including without limitation, the Swingline Lender for Swing A Loans made under and pursuant to Facility A) and in each case maturing in no event later than October 30, 2012 (such date or such later date agreed to by the Unanimous Lenders, hereinafter referred to as the "Facility A Maturity Date and bearing interest thereon at the rates and payable at the times provided in the Credit Agreement, (ii) U.S. Borrower, a revolving credit facility "Facility B in a maximum principal amount of $80,000,000 U.S. Dollars in the form of US Prime Rate Loans, Libor Loans, Letters of Credit, Letters of Guarantee, or Hedge Contracts, including FEFCs or Purchase Options, with advances under Facility B as set forth in the Credit Agreement payable to the order of the respective Lender named therein (including without limitation, the Swingline Lender for Swing -2- Ca OO19S B Loans made under and pursuant to Facility B) and in each case maturing in no event later than October 30, 2012 (such date or such later date agreed to by the Unanimous Lenders, hereinafter referred to as the "Facility B Maturity Date and bearing interest thereon at the rates and payable at the times provided in the Credit Agreement, and (iii) LP, a term credit facility "Facility C in a maximum principal amount of $45,000,000 U.S. Dollars in the form of a Treasury Rate Loan, with the advance under Facility C as set forth in the Credit Agreement payable to the order of the respective Lender named therein and maturing in no event later than December 20, 2010 and bearing interest thereon at the rates and payable at the times provided in the Credit Agreement (the advances, loans, and other financial accommodations made under Facility A, Facility B and Facility C are hereinafter referred to collectively as the "Loans WHEREAS, the Borrowers may from time to time enter into one or more (i) agreements with a Hedge Lender in connection with the management of foreign exchange risks in all major currencies acceptable to the Hedge Lender (provided that such Person is doing business in such currency and the quantum or amount of any currency being hedged or managed is reasonable in relation to the volume of such Person's business being conducted in any such currency) and includes (a) Purchase Options, (b) FEFCs, and (c) financial products offered by the Hedge Lender to such Person in connection with management of interest rate risks including forward rate agreements and interest rate swaps (such agreements, including without limitation, any Hedge Contracts, as the same may be amended or modified from time to time being hereinafter referred to as "Hedge Agreements" and the liability of the Borrowers in respect of such Hedge Agreements being hereinafter referred to as "Hedge Contract Exposure") and (ii) agreements with BMO and /or BMO Affiliates, with respect to the execution or processing of any of the following products, services or facilities extended to such Person by BMO or any BMO Affiliate: (a) Cash Management Services; (b) commercial credit card and merchant card services; and (c) other banking products or services (excluding for greater certainty any hedging products) as may be requested by such Person, other than Letters of Credit and Letters of Guarantee (such agreements as the same may be amended or modified from time to time being hereinafter referred to as "Banking Product Agreements" and the liability of the Borrowers in respect of such Banking Product Agreements being hereinafter referred to as "Banking Product Debt WHEREAS, as a condition to extending credit to the Borrowers under the Credit Agreement or entering into any Hedge Agreement or Banking Product Agreement, the Secured Creditors have required, among other things, that (i) Mortgagor guarantee all indebtedness, obligations and liabilities, whether now existing or hereafter arising, of the Borrowers under or arising out of the Credit Agreement pursuant to that certain Guaranty Agreement dated as of the date hereof from Mortgagor and certain other parties to Mortgagee, as the same may be amended, modified, supplemented and /or restated from time to time (the "Guaranty and (ii) Mortgagor grant to Mortgagee a lien on and security interest in the real and personal property of Mortgagor described herein subject to the terms and conditions hereof, and, in connection therewith and for the sake of clarity and convenience, that the Existing Mortgage be amended and restated in its entirety to read as set forth herein; WHEREAS, SunOpta Canada directly or indirectly owns substantially all of the equity interests in Mortgagor and SunOpta Canada provides Mortgagor with financial, management, administrative, and technical support which enables Mortgagor to conduct its business in an orderly and efficient manner in the ordinary course; and WHEREAS, Mortgagor will benefit, directly or indirectly, from credit and other financial accommodations extended by the Secured Creditors to the Borrowers; NOW, THEREFORE, for and in consideration of the execution and delivery by the Lenders of the Credit Agreement, and other good and valuable consideration, receipt whereof is hereby acknowledged, in order to secure (i) the payment of the principal and premium, if any, of and interest on the Loans as and when the same become due and payable (whether by lapse of time, acceleration or otherwise) and all advances now or hereafter made thereon, (ii) the payment and performance of the obligations of the Borrowers under the Credit Agreement and the Documents, (iii) the payment of all sums due or owing with respect to the Hedge Contract Exposure and the Banking Product Debt, (iv) the payment and performance of all obligations arising under any applications executed by the relevant Borrower in connection with any of the Letters of Credit and Letters of Guarantee including the obligation of such Borrower to reimburse the relevant L/C Lender for any draws under such Letters of Credit and Letters of Guarantee, (v) the payment of all other indebtedness, obligations and liabilities which this Mortgage secures pursuant to any of its terms, (vi) the payment of all indebtedness, obligations and liabilities whatsoever of Mortgagor arising under the Guaranty, and (vii) the performance and observance of the covenants and agreements contained in this Mortgage, the Credit Agreement, the Hedge Agreements, the Banking Product Agreements, the Documents and any other instrument or document at any time evidencing or securing any of the foregoing or setting forth terms and conditions applicable thereto (all of such indebtedness, obligations, agreements and liabilities described in clauses (i), (ii), (iii), (iv), (v), (vi) and (vii), above being hereinafter collectively referred to as the "indebtedness hereby secured"), Mortgagor does hereby grant, warrant, mortgage, pledge, assign, sell, demise, bargain, hypothecate, convey, grant a security interest in, transfer and set over unto Mortgagee and its successors in trust, forever, WITH POWER OF SALE (to the extent permitted by law) in and to all and singular the properties, rights, interests and privileges described in Granting Clauses I, II, III, IV, V, VI, and VII below, all of the same being collectively referred to herein as the "Mortgaged Premises GRANTING CLAUSE I That certain real estate lying and being in Afton, County of Lincoln, State of Wyoming more particularly described in Schedule I attached hereto and made a part hereof. GRANTING CLAUSE II All buildings and improvements of every kind and description heretofore or hereafter erected or placed on the property described in Granting Clause I and all materials intended for construction, reconstruction, alteration and repairs of the buildings and improvements now or hereafter erected thereon, all of which materials shall be deemed to be included within the premises immediately upon the delivery thereof to the said real estate, and all fixtures, machinery, apparatus, equipment, fittings and articles of personal property of every kind and -4- C,400199 -5- nature whatsoever now or hereafter attached to or contained in or used or useful in connection with said real estate and the buildings and improvements now or hereafter located thereon and the operation maintenance and protection thereof, including but not limited to all machinery, motors, fittings, radiators, awnings, shades, screens, all gas, coal, steam, electric, oil and other heating, cooking, power and lighting apparatus and fixtures, all fire prevention and extinguishing equipment and apparatus, all cooling and ventilating apparatus and systems, all plumbing, incinerating, and sprinkler equipment and fixtures, all elevators and escalators, all communication and electronic monitoring equipment, all window and structural cleaning rigs and all other machinery and equipment of every nature and fixtures and appurtenances thereto and all items of furniture, appliances, draperies, carpets, other furnishings, equipment and personal property used or useful in the operation, maintenance and protection of the said real estate and the buildings and improvements now or hereafter located thereon and all renewals or replacements thereof or articles in substitution therefor, whether or not the same are or shall be attached to said real estate, buildings or improvements in any manner, and all proceeds thereof; it being mutually agreed, intended and declared that all the aforesaid property shall, so far as permitted by law, be deemed to form a part and parcel of the real estate and, for the purpose of this Mortgage, to be real estate and covered by this Mortgage; and as to the balance of the property aforesaid, this Mortgage is hereby deemed to be as well a security agreement under the provisions of the Uniform Commercial Code of the State of Wyoming for the purpose of creating hereby a security interest in said property, which is hereby granted by Mortgagor as debtor to Mortgagee as secured party, securing the indebtedness hereby secured. The addresses of Mortgagor (debtor) and Mortgagee (secured party) appear at the beginning hereof. GRANTING CLAUSE III All right, title and interest of Mortgagor now owned or hereafter acquired in and to all and singular the estates, tenements, hereditaments, privileges, easements, licenses, franchises, appurtenances and royalties, mineral, oil, and water rights belonging or in any wise appertaining to the property described in the preceding Granting Clause I and the buildings and improvements now or hereafter located thereon and the reversions, rents, issues, revenues and profits thereof, including all interest of Mortgagor in all rents, issues and profits of the aforementioned property and all rents, issues, profits, revenues, royalties, bonuses, rights and benefits due, payable or accruing (including all deposits of money as advanced rent or for security) under any and all leases or subleases and renewals thereof, or under any contracts or options for the sale of all or any part of, said property (including during any period allowed by law for the redemption of said property after any foreclosure or other sale), together with the right, but not the obligation, to collect, receive and receipt for all such rents and other sums and apply them to the indebtedness hereby secured and to demand, sue for and recover the same when due or payable; provided that the assignments made hereby shall not impair or diminish the obligations of Mortgagor under the provisions of such leases or other agreements nor shall such obligations be imposed upon Mortgagee. By acceptance of this Mortgage, Mortgagee agrees, not as a limitation or condition hereof, but as a personal covenant available only to Mortgagor that until an Event of Default (as hereinafter defined) shall occur giving Mortgagee the right to foreclose this Mortgage, Mortgagor may collect, receive (but not more than 30 days in advance) and enjoy such rents. GRANTING CLAUSE IV All judgments, awards of damages, settlements and other compensation heretofore or hereafter made resulting from condemnation proceedings or the taking of the property described in Granting Clause I or any part thereof or any building or other improvement now or at any time hereafter located thereon or any easement or other appurtenance thereto under the power of eminent domain, or any similar power or right (including any award from the United States Government at any time after the allowance of the claim therefor, the ascertainment of the amount thereof and the issuance of the warrant for the payment thereof), whether permanent or temporary, or for any damage (whether caused by such taking or otherwise) to said property or any part thereof or the improvements thereon or any part thereof, or to any rights appurtenant thereto, including severance and consequential damage, and any award for change of grade of streets (collectively, "Condemnation Awards GRANTING CLAUSE V All property and rights, if any, which are by the express provisions of this Mortgage required to be subjected to the lien hereof and any additional property and rights that may from time to time hereafter be subjected to the lien hereof by Mortgagor or by anyone on Mortgagor's behalf. GRANTING CLAUSE VI GRANTING CLAUSE VII -6- 006201 All rights in and to common areas and access roads on adjacent properties heretofore or hereafter granted to Mortgagor and any after acquired title or reversion in and to the beds of any ways, roads, streets, avenues and alleys adjoining the property described in Granting Clause I or any part thereof. All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquidated claims, including, without limitation, all proceeds of insurance. To HAVE AND To HOLD the Mortgaged Premises and the properties, rights and privileges hereby granted, bargained, sold, conveyed, mortgaged, warranted, pledged and assigned, and in which a security interest is granted, or intended so to be, unto Mortgagee, its successors and assigns, forever; provided, however, that this Mortgage is upon the express condition that if the principal of and interest on the Loans shall be paid in full and all other indebtedness hereby secured shall be fully paid and performed, all commitments contained in the Credit Agreement, the Hedge Agreements and the Bank Product Agreements to extend credit or make financial accommodations thereunder shall have terminated, and no Letter of Credit, Letter of Guarantee or Bankers' Acceptance shall remain outstanding, then this Mortgage and the estate and rights hereby granted shall cease and this Mortgage shall be released by Mortgagee upon the written request and at the expense of Mortgagor, otherwise to remain in full force and effect. -7- Mortgagor hereby covenants and agrees. With Mortgagee as .follows: CO 2,02 1. Payment of the Indebtedness. The .indebtedness hereby secured will be promptly paid as and •when;thesame becomes due. 2. Further Assurances. Mortgagor will execute and deliver such further instruments and do such -further acts as may be necessary or proper to carry out more effectively the purpose of this Mortgage and, without limiting the foregoing, to make subject to the lien hereof any property agreed to be subjected hereto or covered by the Granting' Clauses hereof or intended so to be. 3. Ownership of Mortgaged Premises. Mortgagor covenants and warrants that it is lawfully seized of and has good and marketable title to the Mortgaged Premises free and clear of all Permitted Liens (as defined in the Credit Agreement) and Mortgagor has good right, full power and authority to convey, transfer and mortgage the same to Mortgagee for the uses and purposes set forth in this Mortgage; and Mortgagor will warrant and forever defend the title to the Mortgaged Premises subject to the Permitted Liens against all claims and demands whatsoever. 4. Possession. Provided no Event of Default has occurred and is continuing hereunder, Mortgagor shall be suffered and permitted to remain in full possession, enjoyment and control of the Mortgaged Premises, subject always to the 'observance and performance of the terms of this Mortgage. 5. Payment of Taxes. Mortgagor shall pay before any penalty attaches, all general taxes and all special taxes, special assessments, water; drainage and sewer charges and all other charges of any kind whatsoever, ordinary or extraordinary, which may be levied, assessed, imposed or charged on or against the Mortgaged Premises or any part thereof and which, if unpaid, might by law become a lien or charge upon the Mortgaged Premises or any part thereof, and shall, upon written request, exhibit to Mortgagee official receipts evidencing such payments, except that, unless and until foreclosure, distraint, sale or other similar proceedings shall have been commenced, no such charge or claim need be paid if being contested (except to the extent any full or partial payment shall be required by law), after notice to Mortgagee, by appropriate proceedings which shall operate to prevent the collection thereof or the sale or forfeiture of the Mortgaged Premises or any part thereof to satisfy the same, conducted in good faith and with due diligence and if Mortgagor shall have furnished such security, if any, as may be required in the proceedings or requested by Mortgagee. 6. Payment of Taxes on Loans, Letters of Credit, Mortgage or Interest of Mortgagee. Mortgagor agrees that if any tax, assessment or imposition upon this Mortgage or the indebtedness hereby secured or the Loans or any of the Letters of Credit or Letters of Guarantee or the interest of Mortgagee in the Mortgaged Premises or upon Mortgagee by reason of or as a holder of any of the foregoing (including, without limitation, corporate privilege, franchise and excise taxes, but excepting therefrom any income tax on interest payments on the principal portion of the indebtedness hereby secured imposed by the United States or any state) is levied, assessed or charged, then, unless all such taxes are paid by Mortgagor to, for or on behalf of O O 3233 Mortgagee as they become due and payable (which Mortgagor agrees to do upon demand of Mortgagee, to the extent permitted by law), or Mortgagee is reimbursed for any such sum advanced by Mortgagee, all sums hereby secured shall become immediately due and payable, at the option of Mortgagee upon thirty (30) days' notice to Mortgagor, notwithstanding anything contained herein or in any law heretofore or hereafter enacted, including any provision thereof forbidding Mortgagor from making any such payment. Mortgagor agrees to exhibit to Mortgagee, upon request, official receipts showing payment of all taxes and charges which Mortgagor is required to pay hereunder. 7. Recordation and Payment of Taxes and Expenses Incident Thereto. Mortgagor will cause this Mortgage, all mortgages supplemental hereto and any financing statement or other notice of a security interest required by Mortgagee at all times to be kept, recorded and filed at its own expense in such manner and in such places as may be required by law for the recording and filing or for the rerecording and refiling of a mortgage, security interest, assignment or other lien or charge upon the Mortgaged Premises, or any part thereof, in order fully to preserve and protect the rights of Mortgagee hereunder and, without limiting the foregoing, Mortgagor will pay or reimburse Mortgagee for the payment of any and all taxes, fees or other charges incun in connection with any such recordation or rerecordation, including any documentary stamp tax, intangibles tax or tax imposed upon the privilege of having this instrument or any instrument issued pursuant hereto recorded. 8. Insurance. Mortgagor will, at its expense, keep all buildings, improvements, equipment and other property now or hereafter constituting part of the Mortgaged Premises insured against loss or damage by fire, lightning, windstorm, explosion and such other risks as are usually included under extended coverage policies, or which are usually insured against by owners of like property, in amount sufficient to prevent Mortgagor or Mortgagee from becoming a co- insurer of any partial loss under applicable policies and in any event not less than the then full insurable value (actual replacement value without deduction for physical depreciation) thereof, as determined at the request of Mortgagee and at Mortgagor's expense by the insurer or insurers or by an expert approved by Mortgagee in its reasonable judgment, all under insurance policies payable, in case of loss or damage, to Mortgagee, such rights to be evidenced by the usual standard non contributory form of mortgage clause to be attached to each policy. Mortgagor shall not carry separate insurance concurrent in kind or form and contributing in the event of loss, with any insurance required hereby. Mortgagor shall also obtain and maintain public liability, property damage and workmen's compensation insurance in each case in form and content reasonably satisfactory to Mortgagee and in amounts as are customarily carried by owners of like property and approved by Mortgagee in its reasonable judgment. Mortgagor shall also obtain and maintain such other insurance with respect to the Mortgaged Premises in such amounts and against such insurable hazards as Mortgagee from time to time may reasonably require, including, without limitation, boiler and machinery insurance, insurance against flood risks, host liquor liability, war risk insurance when and to the extent obtainable from the United States Government or any agency thereof, and insurance against loss of rent due to fire and risks now or hereafter embraced by so- called "extended coverage." All insurance required hereby shall be maintained with good and responsible insurance companies reasonably satisfactory to Mortgagee and shall not provide for any deductible amount in excess of $100,000 not approved in writing by Mortgagee, shall provide that any losses shall be payable notwithstanding any act -8- oco204 or negligence, of Mortgagor, shall provide that no cancellation thereof shall be effective until at least thirty. (30) days after receipt by Mortgagor. and Mortgagee of written notice thereof, and shall be satisfactory to Mortgagee in all other respects. Upon the execution of this Mortgage and thereafter not less than fifteen (15) days prior to the expiration date of any policy delivered pursuant to this Mortgage, Mortgagor will deliver to Mortgagee originals of any policy or renewal policy, as the case may be, required by this Mortgage, bearing notations evidencing the payment of all premiums. In the event of foreclosure, Mortgagor authorizes and empowers Mortgagee to effect insurance upon the Mortgaged Premises in amounts aforesaid for a period covering the time of redemption from foreclosure sale provided by law, and if necessary therefor to cancel any or all existing insurance policies. UNLESS MORTGAGOR PROVIDES MORTGAGEE WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS MORTGAGE, MORTGAGEE MAY PURCHASE INSURANCE AT MORTGAGOR'S EXPENSE TO PROTECT MORTGAGEE'S INTERESTS IN THE MORTGAGED PREMISES. THIS INSURANCE MAY, BUT NEED NOT, PROTECT MORTGAGOR'S INTERESTS IN THE MORTGAGED PREMISES. THE COVERAGE PURCHASED BY MORTGAGEE MAY NOT PAY ANY CLAIMS THAT MORTGAGOR MAKES OR ANY CLAIM THAT IS MADE AGAINST MORTGAGOR IN CONNECTION WITH THE MORTGAGED PREMISES. MORTGAGOR MAY LATER CANCEL ANY SUCH INSURANCE PURCHASED BY MORTGAGEE, BUT ONLY AFTER PROVIDING MORTGAGEE WITH EVIDENCE THAT MORTGAGOR HAS OBTAINED INSURANCE AS REQUIRED BY THIS MORTGAGE. IF MORTGAGEE PURCHASES INSURANCE FOR THE MORTGAGED PREMISES, MORTGAGOR WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MORTGAGEE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE INDEBTEDNESS HEREBY SECURED. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE MORTGAGOR MAY BE ABLE TO OBTAIN ON ITS OWN. 9. Damage to or Destruction of Mortgaged Premises. (a) Notice. In case of any material damage to or destruction of the Mortgaged Premises or any part thereof, Mortgagor shall promptly give written notice thereof to Mortgagee, generally describing the nature and extent of such damage or destruction. (b) Restoration. In case of any damage to or destruction of the Mortgaged Premises or any part thereof, Mortgagor, whether or not the insurance proceeds, if any, received on account of such damage or destruction shall be sufficient for the purpose, at Mortgagor's expense, will promptly commence and complete (subject to unavoidable delays occasioned by strikes, lockouts, acts of God, inability to obtain labor or materials, governmental restrictions and similar causes beyond the reasonable control of Mortgagor) the restoration, replacement or rebuilding of the Mortgaged Premises as nearly as possible to its value, condition and character immediately prior to such damage or destruction. (c) Adjustment of Loss. Mortgagor hereby authorizes Mortgagee, at Mortgagee's option, to adjust and compromise any losses under any insurance afforded, -9- C O);) but unless Mortgagee elects to adjust the losses as aforesaid, said adjustment and /or compromise shall be made by Mortgagor, subject to final approval of Mortgagee in the case of losses exceeding $100,000. (d) Application of Insurance Proceeds. Net insurance proceeds received by Mortgagee under the provisions of this Mortgage or any instruments supplemental hereto or thereto or under any policy or policies of insurance covering the Mortgaged Premises or any part thereof shall first be applied as a prepayment on the Loans (and Mortgagee is hereby irrevocably authorized and directed to make such an application whether or not the Loans or any other indebtedness hereby secured may then be due or otherwise adequately secured) and shall thereafter be applied to the reduction of any other indebtedness hereby secured; provided, however, that such proceeds shall be made available for the restoration of the portion of the Mortgaged Premises damaged or destroyed if written application for such use is made within thirty (30) days of receipt of such proceeds and the following conditions are satisfied to the reasonable satisfaction of the Mortgagee: (i) Mortgagor has in effect business interruption insurance covering the income to be lost during the restoration period as a result of the damage or destruction to the Mortgaged Premises or provides Mortgagee with other evidence satisfactory to it that Mortgagor has cash resources sufficient to pay its obligations during the restoration period; (ii) the effect of the damage to or destruction of the Mortgaged Premises giving rise to receipt of the insurance proceeds is not to terminate, or give a lessee the option to terminate, any lease of all or any portion of the Mortgaged Premises; (iii) no Event of Default, or event which, with the lapse of time, the giving of notice, or both, would constitute an Event of Default, shall have occurred or be continuing (and if such an event shall occur during restoration Mortgagee may, at its election, apply any insurance proceeds then remaining in its hands to the reduction of the indebtedness evidenced by the Loans and the other indebtedness hereby secured); (iv) Mortgagor shall have submitted to Mortgagee plans and specifications for the restoration which shall be reasonably satisfactory to it; and (v) Mortgagor shall submit to Mortgagee fixed price contracts with good and responsible contractors and materialmen covering all work and materials necessary to complete restoration and providing for a total completion price not in excess of the amount of insurance proceeds available for restoration, or, if a deficiency shall exist, Mortgagor shall have deposited the amount of such deficiency with Mortgagee. Any insurance proceeds to be released pursuant to the foregoing provisions may at the option of Mortgagee be disbursed from time to time as restoration progresses to pay for restoration work completed and in place and such disbursements may at Mortgagee's option be made directly to Mortgagor or to or through any contractor or materialman to whom payment is due or to or through a construction escrow to be maintained by a title insurer acceptable to Mortgagee. Mortgagee may impose such further conditions upon the release of insurance proceeds (including the receipt of title insurance) as are customarily imposed by prudent construction lenders to insure the completion of the restoration work free and clear of all liens or claims for lien. All title insurance charges and other costs and expenses paid to or for the account of Mortgagor in connection with the release of such insurance proceeds shall constitute so much additional indebtedness hereby secured to be payable upon demand with interest at the Default Rate (as hereinafter defined). Mortgagee may deduct any such costs and -10- e00206 expenses from insurance proceeds at any time in its possession. If Mortgagor fails to request that insurance proceeds be applied to the restoration of the improvements or if Mortgagor makes such a request but fails to complete restoration within a reasonable time, Mortgagee shall have the right, but no the duty, to restore or rebuild said Mortgaged Premises or any part thereof for or on behalf of Mortgagor in lieu of applying said proceeds to the indebtedness hereby secured and for such purpose may do all necessary acts, including using funds deposited by Mortgagor as aforesaid and advancing additional funds for the purpose of restoration, all such additional funds to constitute part of the indebtedness hereby secured payable upon demand with interest at the Default Rate. 10. Eminent Domain. Mortgagor acknowledges that Condemnation Awards have been assigned to Mortgagee, which awards Mortgagee is hereby irrevocably authorized to collect and receive, and to give appropriate receipts and acquittances therefor, and, at Mortgagee's option, to apply the same toward the payment of the amount owing on account of the indebtedness hereby secured in such order of application as Mortgagee may elect and whether or not the same may then be due and payable or otherwise adequately secured; provided, however, that a Condemnation Award in respect of any taking of a portion (but not all or any material portion) of the Mortgaged Premises shall be made available for the restoration of such Mortgaged Premises in the same manner and subject to the same conditions as are imposed on the release of insurance proceeds set forth in Section 9(d) hereof as if the Mortgaged Premises so taken were destroyed and the Condemnation Award for such taking was actually insurance proceeds in respect of the Mortgaged Premises so deemed as having been destroyed. In the event that any proceeds of a Condemnation Award shall be made available to Mortgagor for restoring the Mortgaged Premises so taken, Mortgagor hereby covenants to promptly commence and complete such restoration of the Mortgaged Premises as nearly as possible to its value, condition and character immediately prior to such taking. Mortgagor covenants and agrees that Mortgagor will give Mortgagee immediate notice of the actual or threatened commencement of any proceedings under condemnation or eminent domain affecting all or any part of the Mortgaged Premises including any easement therein or appurtenance thereof or severance and consequential damage and change in grade of streets, and will deliver to Mortgagee copies of any and all papers served in connection with any such proceedings. Mortgagor further covenants and agrees to make, execute and deliver to Mortgagee, at any time or times upon request, free, clear and discharged of any encumbrances of any kind whatsoever, any and all further assignments and /or instruments deemed necessary by Mortgagee for the purpose of validly and sufficiently assigning all awards and other compensation heretofore and hereafter to be made to Mortgagor for any taking, either permanent or temporary, under any such proceeding. 11. Construction, Repair, Waste, Etc. Mortgagor agrees (i) that no building or other improvement on the Mortgaged Premises and constituting a part thereof shall be altered, removed or demolished nor shall any fixtures or appliances on, in or about said buildings or improvements be severed, removed, sold or mortgaged, without the consent of Mortgagee and in the event of the demolition or destruction in whole or in part of any of the fixtures, chattels or articles of personal property covered hereby, Mortgagor covenants that the same will be replaced promptly by similar fixtures, chattels and articles of personal property at least equal in quality and condition to those replaced, free from any security interest in or encumbrance thereon or reservation of title thereto; (ii) to permit, commit or suffer no waste, impairment or deterioration C'0u207 of the Mortgaged Premises or any part thereof; (iii) to keep and maintain said Mortgaged Premises and every part thereof in good and first class repair and condition; (iv) to effect such repairs as Mortgagee may reasonably require and from time to time to make all needful and proper replacements and additions so that said buildings, fixtures, machinery and appurtenances will, at all times, be in good and first class condition, fit and proper for the respective purposes for which they were originally erected or installed; (v) to comply with all statutes, orders, requirements or decrees relating to the Mortgaged Premises by any federal, state or municipal authority; (vi) to observe and comply with all conditions and requirements necessary to preserve and extend any and all rights, licenses, permits (including, but not limited to, zoning variances, special exceptions and non conforming uses), privileges, franchises and concessions which are applicable to the Mortgaged Premises or which have been granted to or contracted for by Mortgagor in connection with any existing or presently contemplated use of the Mortgaged Premises or any part thereof and not to initiate or acquiesce in any changes to or terminations of any of the foregoing or of zoning classifications affecting the use to which the Mortgaged Premises or any part thereof may be put without the prior written consent of Mortgagee; and (vii) to make no material alterations in or improvements or additions to the Mortgaged Premises except as required by governmental authority or as permitted by Mortgagee. 12. Liens and Encumbrances. Mortgagor will not, without the prior written consent of Mortgagee, directly or indirectly, create or suffer to be created or to remain and will discharge or promptly cause to be discharged any mortgage, lien, encumbrance or charge on, pledge of, or conditional sale or other title retention agreement with respect to, the Mortgaged Premises or any part thereof, whether superior or subordinate to the lien hereof, except for this Mortgage and the Permitted Liens. 13. Right of Mortgagee to Perform Mortgagor's Covenants, Etc. If Mortgagor shall fail to make any payment or perform any act required to be made or performed hereunder, Mortgagee, without waiving or releasing any obligation or default, may (but shall be under no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of Mortgagor, and may enter upon the Mortgaged Premises or any part thereof for such purpose and take all such action thereon as, in the opinion of Mortgagee, may be reasonably necessary or appropriate therefor. All sums so paid by Mortgagee and all reasonable costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) so incurred, together with interest thereon from the date of payment or incurrence at the Default Rate, shall constitute so much additional indebtedness hereby secured and shall be paid by Mortgagor to Mortgagee on demand. Mortgagee in making any payment authorized under this Section relating to taxes or assessments may do so according to any bill, statement or estimate procured from the appropriate public office without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture, tax lien or title or claim thereof. Mortgagee, in performing any act hereunder, shall be the sole judge of whether Mortgagor is required to perform same under the terms of this Mortgage. 14. After- Acquired Property. Any and all property hereafter acquired which is of the kind or nature herein provided, or intended to be and become subject to the lien hereof, shall ipso facto, and without any further conveyance, assignment or act on the part of Mortgagor, become and be subject to the lien of this Mortgage as fully and completely as though specifically -12- described herein; but nevertheless Mortgagor shall from time to time, if requested by Mortgagee, execute and deliver any and all such further assurances, conveyances and assignments as Mortgagee may reasonably require for the purpose of expressly and specifically subjecting to the lien of this Mortgage all such property. 15. Inspection by Mortgagee. Mortgagee, any Secured Creditor, their respective representatives and any participant in the indebtedness hereby secured shall have the right to inspect the Mortgaged Premises at all reasonable times, and access thereto shall be permitted for that purpose. 16. Subrogation. Mortgagor acknowledges and agrees that Mortgagee shall be subrogated to any lien discharged out of the proceeds of any extension of credit evidenced by the Credit Agreement or out of any advance by Mortgagee hereunder, irrespective of whether or not any such lien may have been released of record. 17. Events of Default. Any one or more of the following shall constitute an "Event of Default" hereunder: (a) an "Event of Default" (as defined therein) shall occur under the Credit Agreement; or (b) the Mortgaged Premises or any part thereof shall be sold, transferred, or conveyed, whether voluntarily or involuntarily, by operation of law or otherwise, except for sales of obsolete, worn out or unusable fixtures or personal property which are concurrently replaced with similar fixtures or personal property at least equal in quality and condition to those sold and owned by Mortgagor free of any lien, charge or encumbrance other than the lien hereof; or (c) any indebtedness secured by a lien or charge on the Mortgaged Premises or any part thereof is not paid when due or proceedings are commenced to foreclose or otherwise realize upon any such lien or charge or to have a receiver appointed for the property subject thereto or to place the holder of such indebtedness or its representative in possession thereof; or (d) the Mortgaged Premises is abandoned. 18. Remedies. When any Event of Default has happened and is continuing (regardless of the pendency of any proceeding which has or might have the effect of preventing Mortgagor from complying with the terms of this instrument and of the adequacy of the security for the indebtedness hereby secured) and in addition to such other rights as may be available under applicable law, but subject at all times to any mandatory legal requirements: (a) Acceleration. Mortgagee may, by written notice to Mortgagor, declare the Loans and all unpaid indebtedness hereby secured, including the reimbursement obligations in connection with Letters of Credit, Letters of Guarantee and any interest then accrued on the indebtedness hereby secured, to be forthwith due and payable, -13- -14- C100209 whereupon the same shall become and be forthwith due and payable, without other notice or demand of any kind. (b) Uniform Commercial Code. Mortgagee shall, with respect to any part of the Mortgaged Premises constituting property of the type in respect of which realization on a lien or security interest granted therein is governed by the Uniform Commercial Code, have all the rights, options and remedies of a secured party under the Uniform Commercial Code of Wyoming, including without limitation, the right to the possession of any such property, or any part thereof, and the right to enter without legal process any premises where any such property may be found. Any requirement of said Uniform Commercial Code for reasonable notification shall be met by mailing written notice to Mortgagor at its address above set forth at least 10 days prior to the sale or other event for which such notice is required. The costs and expenses of retaking, selling, and otherwise disposing of said property, including attorneys' fees and legal expenses incurred in connection therewith, shall constitute so much additional indebtedness hereby secured and shall be payable upon demand with interest at the Default Rate. (c) Foreclosure. Mortgagee may proceed to protect and enforce the rights of Mortgagee hereunder (i) by any action at law, suit in equity or other appropriate proceedings, whether for the specific performance of any agreement contained herein, or for an injunction against the violation of any of the terms hereof, or in aid of the exercise of any power granted hereby or by law, or (ii) by the foreclosure of this Mortgage by judicial action or by advertisement and sale. (d) Appointment of Receiver. Mortgagee shall, as a matter of right, without notice and without giving bond to Mortgagor or anyone claiming by, under or through it, and without regard to the solvency or insolvency of Mortgagor or the then value of the Mortgaged Premises, be entitled to have a receiver appointed of all or any part of the Mortgaged Premises and the rents, issues and profits thereof, with such power as the court making such appointment shall confer, and Mortgagor hereby consents to the appointment of such receiver and shall not oppose any such appointment. Any such receiver may, to the extent permitted under applicable law, without notice, enter upon and take possession of the Mortgaged Premises or any part thereof by force, summary proceedings, ejectment or otherwise, and may remove Mortgagor or other persons and any and all property therefrom, and may hold, operate and manage the same and receive all earnings, income, rents, issues and proceeds accruing with respect thereto or any part thereof, whether during the pendency of any foreclosure or until any right of redemption shall expire or otherwise. (e) Taking Possession, Collecting Rents, Etc. Mortgagee may enter and take possession of the Mortgaged Premises or any part thereof and manage, operate, insure, repair and improve the same and take any action which, in Mortgagee's judgment, is necessary or proper to conserve the value of the Mortgaged Premises. Mortgagee may also take possession of, and for these purposes use, any and all personal property contained in the Mortgaged Premises and used in the operation, rental or leasing thereof or any part thereof. Mortgagee shall be entitled to collect and receive all earnings, r X210 revenues, rents, issues and profits of the Mortgaged Premises or any part thereof (and for such purpose Mortgagor does hereby irrevocably constitute and appoint Mortgagee its true and lawful attorney -in -fact for it and in its name, place and stead to receive, collect and receipt for all of the foregoing, Mortgagor irrevocably acknowledging that any payment made to Mortgagee hereunder shall be a good receipt and acquittance against Mortgagor to the extent so made) and to apply same to the reduction of the indebtedness hereby secured. The right to enter and take possession of the Mortgaged Premises and use any personal property therein, to manage, operate and conserve the same, and to collect the rents, issues and profits thereof, shall be in addition to all other rights or remedies of Mortgagee hereunder or afforded by law, and may be exercised concurrently therewith or independently thereof. The reasonable costs and expenses (including any reasonable receiver's fees, counsels' fees, costs and agent's compensation) incurred pursuant to the powers herein contained shall be so much additional indebtedness hereby secured which Mortgagor promises to pay upon demand together with interest at the Default Rate. Mortgagee shall not be liable to account to Mortgagor for any action taken pursuant hereto other than to account for any rents actually received by Mortgagee. Without taking possession of the Mortgaged Premises, Mortgagee may, in the event the Mortgaged Premises becomes vacant or is abandoned, take such steps as it deems reasonably appropriate to protect and secure the Mortgaged Premises (including hiring watchmen therefor) and all costs incurred in so doing shall constitute so much additional indebtedness hereby secured payable upon demand with interest thereon at the Default Rate. 19. Waiver of Right to Redeem From Sale Waiver of Appraisement, Valuation, Etc. Mortgagor shall not and will not apply for or avail itself of any appraisement, valuation, stay, extension or exemption laws, or any so- called "Moratorium Laws," now existing or hereafter enacted in order to prevent or hinder the enforcement or foreclosure of this Mortgage, but hereby waives the benefit of such laws. Mortgagor for itself and all who may claim through or under it waives any and all right to have the property and estates comprising the Mortgaged Premises marshalled upon any foreclosure of the lien hereof and agrees that any court having jurisdiction to foreclose such lien may order the Mortgaged Premises sold as an entirety. In the event of any sale made under or by virtue of this Mortgage, the whole of the Mortgaged Premises may be sold in one parcel as an entirety or in separate lots or parcels at the same or different times, all as the Mortgagee may determine. Mortgagee or any Secured Creditor shall have the right to become the purchaser at any sale made under or by virtue of this Mortgage and Mortgagee or any Secured Creditor so purchasing at any such sale shall have the right to be credited upon the amount of the bid made therefor by Mortgagee or such Secured Creditor with the amount payable to Mortgagee or such Secured Creditor out of the net proceeds of such sale. In the event of any such sale, the Loans and the other indebtedness hereby secured, if not previously due, shall be and become immediately due and payable without demand or notice of any kind. Mortgagor hereby waives any and all rights of redemption prior to or from sale under any order or decree of foreclosure pursuant to rights herein granted, on behalf of Mortgagor, and each and every person acquiring any interest in, or title to the Mortgaged Premises described herein subsequent to the date of this Mortgage, and on behalf of all other persons to the extent permitted by applicable law. -15- 20. Costs and Expenses of Foreclosure. In any suit to foreclose the lien hereof there shall be allowed and included as additional indebtedness in the decree for sale all reasonable expenditures and expenses which may be paid or incurred by or on behalf of Mortgagee for attorneys' fees, appraisers' fees, environmental auditors' fees, outlays for documentary and expert evidence, stenographic charges, publication costs and costs (which may be estimated as the items to be expended after the entry of the decree) of procuring all such abstracts of title, title searches and examination, guarantee policies, Torrens certificates and similar data and assurances with respect to title as Mortgagee may deem to be reasonably necessary either to prosecute any foreclosure action or to evidence to the bidder at any sale pursuant thereto the true condition of the title to or the value of the Mortgaged Premises, all of which expenditures shall become so much additional indebtedness hereby secured which Mortgagor agrees to pay and all of such shall be immediately due and payable with interest thereon from the date of expenditure until paid at the Default Rate. 21. Application of Proceeds. The proceeds of any foreclosure sale of the Mortgaged Premises or of any sale of property pursuant to Section 18(b) hereof shall be distributed in the following order of priority: First, on account of all costs and expenses incident to the foreclosure or other proceedings including all such items as are mentioned in Sections 18(b) and 20 hereof; Second, to all other items which under the terms hereof constitute indebtedness hereby secured to be applied in such order and manner as Mortgagee shall determine pursuant to the Credit Agreement, with any overplus to whomsoever Mortgagee shall reasonably determine to be lawfully entitled to the same. 22. Deficiency Decree. If at any foreclosure proceeding the Mortgaged Premises shall be sold for a sum less than the total amount of indebtedness for which judgment is therein given, the judgment creditor shall be entitled to the entry of a deficiency decree against Mortgagor and against the property of Mortgagor for the amount of such deficiency; and Mortgagor does hereby irrevocably consent to the appointment of a receiver for the property of Mortgagor until such deficiency decree is satisfied in full. 23. Mortgagee's Remedies Cumulative No Waiver. No remedy or right of Mortgagee shall be exclusive of any other right or remedy but shall be cumulative and in addition to every other remedy or right now or hereafter existing at law or in equity or by statute or otherwise. No delay in the exercise or omission to exercise any remedy or right accruing on any default shall impair any such remedy or right or be construed to be a waiver of any such default or acquiescence therein, nor shall it affect any subsequent default of the same or a different nature. Every such remedy or right may be exercised concurrently or independently, and when and as often as may be deemed expedient by Mortgagee. 24. Mortgagee or any Secured Creditor Party to Suits. If Mortgagee or any Secured Creditor shall be made a party to or shall intervene in any action or proceeding affecting the Mortgaged Premises or the title thereto or the interest of Mortgagee or any Secured Creditor under this Mortgage (including probate and bankruptcy proceedings), or if Mortgagee or any Secured Creditor employs an attorney to collect any or all of the indebtedness hereby secured or to enforce any of the terms hereof or realize hereupon or to protect the lien hereof, or if Mortgagee or any Secured Creditor shall incur any costs or expenses in preparation for the -16- commencement of any foreclosure proceedings or for the defense of any threatened suit or proceeding which reasonably would be expected to affect the Mortgaged Premises or the security hereof, whether or not any such foreclosure or other suit or proceeding shall be actually commenced, then in any such case, Mortgagor agrees to pay to Mortgagee or such Secured Creditor, promptly upon demand, all reasonable costs, charges, expenses and attorney's fees incurred by Mortgagee or such Secured Creditor in any such case, and the same shall constitute so much additional indebtedness hereby secured payable upon demand with interest at the Default Rate. 25. Modifications Not to Affect Lien. Mortgagee, without notice to anyone (except the Lenders), and without regard to the consideration, if any, paid therefor, or the presence of other liens on the Mortgaged Premises, may, at the direction of the Lenders, release any part of the Mortgaged Premises or any person liable for any of the indebtedness hereby secured, may extend the time of payment of any of the indebtedness hereby secured and may grant waivers or other indulgences with respect hereto and thereto, and may agree with Mortgagor to modifications to the terms and conditions contained herein or otherwise applicable to any of the indebtedness hereby secured (including modifications in the rates of interest applicable thereto), without in any way affecting or impairing the liability of any party liable upon any of the indebtedness hereby secured or the priority of the lien of this Mortgage upon all of the Mortgaged Premises not expressly released, and any party acquiring any direct or indirect interest in the Mortgaged Premises shall take same subject to all of the provisions hereof. 26. Notices. All communications provided for herein shall be in writing and shall be deemed to have been given when delivered personally or mailed by first class mail, postage prepaid, addressed, if to Mortgagor or Mortgagee at their addresses as shown at the beginning of this Mortgage or at such other address as shall be designated by any such party in a written notice given to such other such party pursuant to this Section. 27. Revolving Credit Loans. This Mortgage is given to secure, among other things, revolving credit loans and shall secure not only presently existing indebtedness under the Credit Agreement but also future advances, whether such advances are obligatory or to be made at the option of Mortgagee, or otherwise, as are made within twenty (20) years from the date hereof, to the same extent as if such future advances were made on the date of the execution of this Mortgage, although there may be no advance made at the time of execution of this Mortgage and although there may be no indebtedness hereby secured outstanding at the time any advance is made. The lien of this Mortgage shall be valid as to all indebtedness hereby secured, including future advances, from the time of its filing for record in the recorder's or registrar's office in the county in which the Mortgaged Premises are located. The total amount of indebtedness hereby secured may increase or decrease from time to time, but the total unpaid balance of indebtedness hereby secured (including disbursements which Mortgagee may make under this Mortgage, the Credit Agreement or any other documents related thereto) at any one time outstanding shall not exceed a maximum principal amount of Two Hundred Ninety Million Dollars ($290,000,000) plus interest thereon and any disbursements made for payment of taxes, special assessments or insurance on the Mortgaged Premises and interest on such disbursements (all such indebtedness being hereinafter referred to as the "maximum amount secured hereby This Mortgage shall be valid and have priority over all subsequent liens and encumbrances, including statutory liens, -17- 00C,21.2 006213 excepting solely taxes and assessments levied on the Mortgaged Premises, to the extent of the maximum amount secured hereby. 28. Direct and Primary Security; Liens Absolute, Etc. The lien and security interest herein created and provided for stand as direct and primary security for the Loans as well as for any of the other indebtedness hereby secured. No application of any sums received by Mortgagee in respect of the Mortgaged Premises or any disposition thereof to the reduction of the indebtedness hereby secured or any part thereof shall in any manner entitle Mortgagor to any right, title or interest in or to the indebtedness hereby secured or any collateral or security therefor, whether by subrogation or otherwise, unless and until all indebtedness hereby secured has been fully paid and satisfied and any commitment of the Lenders to extend credit to Mortgagor or to the Borrowers or any one of them shall have expired. Mortgagor acknowledges and agrees that the lien and security interest hereby created and provided for are absolute and unconditional and shall not in any manner be affected or impaired by any acts or omissions whatsoever of Mortgagee or any other holder of any of the indebtedness hereby secured, and without limiting the generality of the foregoing, the lien and security hereof shall not be impaired by any acceptance by Mortgagee or any other holder of any of the indebtedness hereby secured of any other security for or guarantors upon any of the indebtedness hereby secured or by any failure, neglect or omission on the part of Mortgagee or any other holder of any of the indebtedness hereby secured to realize upon or protect any of the indebtedness hereby secured or any collateral or security therefor. The lien and security interest hereof shall not in any manner be impaired or affected by (and Mortgagee, without notice to anyone, is hereby authorized to make from time to time) any sale, pledge, surrender, compromise, settlement, release, renewal, extension, indulgence, alteration, substitution, exchange, change in, modification or disposition of any of the indebtedness hereby secured, or of any collateral or security therefor, or of any guaranty thereof, or of any instrument or agreement setting forth the terms and conditions pertaining to any of the foregoing. Mortgagee may at its discretion at any time grant credit to any Borrower without notice to Mortgagor in such amounts and on such terms as Mortgagee may elect (all of such to constitute additional indebtedness hereby secured) without in any manner impairing the lien and security interest created and provided for herein. In order to realize hereon and to exercise the rights granted Mortgagee hereby and under applicable law, there shall be no obligation on the part of Mortgagee or any other holder of any of the indebtedness hereby secured at any time to first resort for payment to the Borrowers or any of them or to any guaranty of any of the indebtedness hereby secured or any portion thereof or to resort to any other collateral, security, property, liens or any other rights or remedies whatsoever, and Mortgagee shall have the right to enforce this Mortgage irrespective of whether or not other proceedings or steps seeking resort to or realization upon or from any of the foregoing are pending. 29. Recovery Limitation. Notwithstanding anything in this Mortgage to the contrary, the right of recovery against Mortgagor under this Mortgage shall not exceed $1.00 less than the lowest amount which would render Mortgagor's obligations under this Mortgage void or voidable under applicable law, including fraudulent conveyance law. 30. Multisite Real Estate Transaction. Mortgagor acknowledges that this Mortgage is one of several mortgages and other security documents (the aforesaid being together called the "Other Security Documents which secure the indebtedness evidenced by the Credit Agreement -18- -19- F00214 and certain of the other indebtedness hereby secured. Mortgagor agrees that the lien of this Mortgage shall be absolute and unconditional and shall not in any manner be affected or impaired by any acts or omissions whatsoever of Mortgagee or any other holder of any of the indebtedness hereby secured, and without limiting the generality of the foregoing, the lien and security hereof shall not be impaired by any acceptance by Mortgagee or any other holder of any of the indebtedness hereby secured of any security for or guarantors upon any of the indebtedness hereby secured or by any failure, neglect or omission on the part of Mortgagee or any other holder of any of the indebtedness hereby secured to realize upon or protect any of the indebtedness hereby secured or any collateral or security therefor including the Other Security Documents. The lien and security interest hereof shall not in any manner be impaired or affected by any release (except as to the property released), sale, pledge, surrender, compromise, settlement, renewal, extension, indulgence, alteration, substitution, exchange, change in, modification or disposition of any of the indebtedness hereby secured, or of any of the collateral or security therefor, including, without limitation, the Other Security Documents or of any guaranty thereof, or of any instrument or agreement setting forth the terms and conditions pertaining to any of the foregoing. Mortgagee may at its discretion foreclose, exercise any power of sale, or exercise any other remedy available to it under any or all of the Other Security Documents without first exercising or enforcing any of its rights and remedies hereunder. Such exercise of Mortgagee's rights and remedies under any or all of the Other Security Documents shall not in any manner impair the indebtedness hereby secured, except to the extent of payment, or the lien of this Mortgage and any exercise of the rights or remedies of the Mortgagee hereunder shall not impair the lien of any of the Other Security Documents or any of Mortgagee's rights and remedies thereunder. Mortgagor specifically consents and agrees that Mortgagee may exercise its rights and remedies hereunder and under the Other Security Documents separately or concurrently and in any order that it may deem appropriate. 31. Default Rate. For purposes of this Mortgage, the term "Default Rate" means, for any day, the rate per annum determined by adding 2% to the sum of the applicable margin set forth in the Pricing Grid plus the US Prime Rate (as such terms are defined in the Credit Agreement) with any change in such rate per annum as so determined by reason of a change in such US Prime Rate to become effective on the date of such change in such US Prime Rate. 32. Governing Law. The creation of this Mortgage, the perfection of the lien and security interest in the Mortgaged Premises, and the rights and remedies of Mortgagee with respect to the Mortgaged Premises, as provided herein and by the laws of the state in which the Mortgaged Premises is located, shall be governed by and construed in accordance with the internal laws of the state in which the Mortgaged Premises are located without regard to principles of conflicts of law. Otherwise, all other obligations of Mortgagor (including, but not limited to, the liability of Mortgagor for any deficiency following a foreclosure of all or any part of the Mortgaged Premises) shall be governed by and construed in accordance with the internal laws of the State of Illinois without regard to principles of conflicts of laws, such state being the state where such documents were executed and delivered. 33. Partial Invalidity. All rights, powers and remedies provided herein are intended to be limited to the extent necessary so that they will not render this Mortgage invalid, unenforceable or not entitled to be recorded, registered or filed under any applicable law. If any -20- C:00215 term of this Mortgage shall be held to be invalid, illegal or unenforceable, the validity and enforceability of the other terms of this Mortgage shall in no way be affected thereby. 34. Agent. Mortgagee has been appointed as agent pursuant to the Credit Agreement. In acting under or by virtue of this Mortgage, Mortgagee shall be entitled to all the rights, authority, privileges and immunities provided in the Credit Agreement (including, without limitation, Section 12 of the Credit Agreement), all of which provisions are incorporated by reference herein with the same force and effect as if set forth herein. Mortgagee hereby disclaims any representation or warranty to Secured Creditors concerning the perfection of the mortgage lien and security interest granted hereunder or the value of the Mortgaged Premises. 35. Restrictions on Secured Creditors' Right to Enforce. No Secured Creditor shall have the right to institute any suit, action or proceeding in equity or at law for the foreclosure of this Mortgage or for the execution of any trust or power hereof or for the appointment of a receiver, or for the enforcement of any other remedy under or upon this Mortgage; it being understood and intended that no one or more of the Secured Creditors shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Mortgage by its or their action or to enforce any right hereunder, and that all proceedings at law or in equity shall be instituted, had and maintained by Mortgagee in the manner herein provided and for the ratable benefit of the Secured Creditors. 36. Existing Mortgage. Upon the execution and delivery of this Mortgage by Mortgagor and Mortgagee, this Mortgage shall amend and restate all provisions of the Existing Mortgage as of such date. Mortgagor hereby agrees that, notwithstanding the execution and delivery of this Mortgage, the liens and security interests created and provided for under the Existing Mortgage continue in effect under and pursuant to the terms of this Mortgage for the benefit of all of the indebtedness hereby secured. 37. Assignment of Leases and Rents. As of the date of this Mortgage, as security in addition to the property described in this Mortgage, Mortgagor hereby collaterally assigns to Mortgagee all its right, title and interest in and to all written and oral leases, whether now in existence or which may hereafter come into existence during the term of this Mortgage, or any extension hereof, covering the Mortgaged Premises, or any part thereof (but without an assumption by Mortgagee of liabilities of Mortgagor under any such leases by virtue of this assignment), and Mortgagor hereby assigns to Mortgagee the rents, issues and profits of the Mortgaged Premises. During the continuance of an Event of Default, Mortgagee may receive and collect such rents, issues and profits personally or through a receiver so long as any such Event of Default shall exist and during pendency of any foreclosure proceedings and during any redemption period, and Mortgagor agrees to consent to a receiver if this is believed necessary or desirable by Mortgagee to enforce its rights under this Section; provided that at all other times Mortgagor shall have the right to receive and collect such rents, issues and profits. The collection of rent by Mortgagee shall in no way waive the right of Mortgagee to foreclose this Mortgage upon the occurrence of an Event of Default 38. Successors and Assigns. Whenever any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all the 006216 covenants, promises and agreements in this Mortgage contained by or on behalf of Mortgagor, or by or on behalf of Mortgagee, shall bind and inure to the benefit of the respective successors and assigns of such parties, whether so expressed or not. 39. Headings. The headings in this instrument are for convenience of reference only and shall not limit or otherwise affect the meaning of any provision hereof. 40. Changes, Etc. This instrument and the provisions hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. [SIGNATURE PAGE TO FOLLOW] 000217 IN WITNESS WHEREOF, Mortgagor has caused these presents to be signed the day and year first above written. SUNOPTA INGREDIENTS INC. Accepted and agreed to as of the date first above written. By Name Eric Davis Title Vice President BANK OF MONTREAL, as Agent By Name Larry Allan Swiniarski Title Vice President IN WITNESS WHEREOF, Mortgagor has caused these presents to be signed the day and year first above written. St1NOPTA INGREDIENTS Accepted and agreed to as of the date first above written. By Name Eric Davis Title Vice President BANK OF MONTREAL, as Agent Name Larry Allan Swiniarski Title Vice President CANADA PROVINCE OF ONTARIO (SEAL) This Instrument Was Drafted By: Daniel W. Baker Chapman and Cutler 111 West Monroe Street Chicago, Illinois 60603 SS COQ X219 The foregoing instrument was acknowledged before me this29t!day of October, 2009 by Eric Davis, Vice President of SunOpta Ingredients Inc., a Delaware corporation, on behalf of said corporation. Notary Public IncWj KA 13e.j Wg (Type or Print Name) Tax Statements for the Real Property Described in this Instrument Should Be Sent to: 199 West 2nd Avenue Afton, Wyoming 83110 STATE OF ILLINOIS COUNTY OF COOK The foregoing instrument was acknowledged before me this 28th day of October, 2009 by Larry Allan Swiniarski, Vice President of Bank of Montreal, a C adian char re. bang on behalf of said bank. L.... OFFICIAL SEAL AVID B. ROBERTS Public State of Illinois ssion Expires Aug 31, 2011 (SEAL) SS. 0 220 Notary Public David B. Roberts (TYPE OR PRINT NAME) i1 221. SCHEDULE I LEGAL DESCRIPTION Part of Section 25, T32N R119W of the 6th P.M., Lincoln County, Wyoming being more particularly described as follows: COMMENCING at a point which is 1475 feet West and 200 feet North of the E 1/4 corner of said Section 25, and running thence North 90 degrees West, 483.35 feet; thence North 0 degrees West, 250 feet; thence North 90 degrees East, 483.35 feet; thence South 0 degrees East, 250 feet to the POINT OF BEGINNING. 199 West 2nd Avenue, Afton, Wyoming Record Owner: SunOpta Ingredients Inc. (formerly known as Northern Food and Dairy, Inc.)