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RECEIVED 6/18/2008 at 2:52 P
RECEIVING 9
BOOK: 697 PAGE: 618
EANNE WAGNER o06�.8
OLN COUNTY CLERK, KEMMERER, WY
MORTGAGE, DEED OF TRUST, SECURITY AGREE
AND ASSIGNMENT OF LEASES
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SINCE 1904
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NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION
FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY
BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL
SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
THIS MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT AND
T OF LEASES, (this "Mortgage"), is made as of
2008, by ROCKY MOUNTAIN ROGUES, INC., a
Wy j g Corporation, "Mortgagor"), having its principal place of business at P.O. Box 3477,
ne, Wyoming 83128, to A. KELLY WILLIAMS ("Trustee the trustee hereunder to the
extent that this Mortgage operates as a deed of trust, and to and for the benefit of SOUTHWEST
GUARANTY, LTD., a Texas Limited Partnership ("Mortgagee having its principal place of
business at 1313 Campbell Road, Building D, Houston, Texas 77055, the mortgagee hereunder
to the extent that this Mortgage operates as a mortgage, the grantee hereunder to the extent that
this Mortgage operates as a deed to secure debt and the beneficiary hereunder to the extent that
this Mortgage operates as a deed of trust.
To secure (i) the payment of an indebtedness in the original principal sum of TWO
MILLION ONE HUNDRED THOUSAND AND NO /100 DOLLARS ($2,100,000.00), to be
paid with interest according to a certain note "Note dated the date hereof made by Mortgagor
to Mortgagee, and all other suns, Iiabilities and obligations constituting the Debt (as defined in
the Note), and (ii) the performance of the obligations and covenants herein contained, Mortgagor
by these presents does hereby mortgage, give, grant, bargain, sell, alien, convey, confirm,
warrant, pledge, assign and hypothecate unto Mortgagee and/or Trustee the following non-
agricultural property, rights and estates "Mortgaged Property"): (a) the real property
described as folio s remises
601C
Part o''Lot t1-6C of Lakeview Estates Incorporated, Tracts A -F, LINCOLN
County, Wyoming, on January 5, 1965, as Receiving No. 386448, as Plat No.
157, more particularly described as follows:
Beginning at a point which is S29°05'W, 772.00 feet from the Northwest corner
of SEI Section 29, T37N, R118W of the 6 PM, LINCOLN County, Wyoming
and running thence S63°W, 205.00 feet; then N27°W, 211.3 feet to right of way of
U.S. Highway 89, thence Northeast along right of way U.S. Highway 89 around
curve thereof to a point which is N27°W, 231.6 feet from beginning point; thence
N27°E, 231.6 feet to the point of beginning.
and the buildings, structures, fixtures and improvements now or hereafter located thereon
"Improvements (b) all right, title, interest and estate of Mortgagor now owned, or hereafter
acquired, in and to all easements, rights -of -way, strips and gores of land, streets, ways, alleys,
passages, utility rights, air rights and development rights, and all estates, rights, titles, interests,
This Mortgage, Deed of Trust, Security Agreement and Assignment of Leases is being re- recorded
to correct the legal description in that certain document recorded 06/18/2008 in Bk 697,
Pg. 618, Receiving No. 939881 in the Office of the Lincoln County Clerk, Lincoln County, WY.
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hereditaments and appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to the Premises and the Improvements; (c) all machinery, furnishings, equipment,
fixtures (including, but not limited to, all heating, air conditioning, plumbing, lighting,
conununications and elevator fixtures) and other property of every kind and nature (hereinafter
collectively called the "Equipment") owned by Mortgagor, or in which Mortgagor has or shall
have an interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant thereto, including all building equipment, materials and supplies and the proceeds of
any sale or transfer of the foregoing; (d) all awards or payments, including interest thereon,
which may be made with respect to the Premises and the Improvements, whether from the
exercise of the right of eminent domain or condemnation (including but not limited to any
transfer made in lieu of or in anticipation of the exercise of said rights), or for a change of grade,
or for any other injury to or decrease in the value of the Premises and Improvements; (e) all
leases, subleases and other agreements affecting the use, enjoyment or occupancy of the
Premises and the Improvements heretofore or hereafter entered into "Leases and all income,
rents, issues, profits and revenues (including all oil and gas or other mineral royalties and
bonuses) from the Premises and the Improvements ("Rents and all proceeds from the sale or
other disposition of the Leases; (f) all proceeds of and any unearned premiums on any insurance
policies covering the Mortgaged Property, including, without limitation, the right to receive and
apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage
to the Mortgaged Property; (g) all accounts, escrows, documents, instruments, chattel paper,
claims, deposits and general intangibles, as the foregoing terms are defined in the Uniform
Commercial Code (as hereinafter defined, and all contract rights, franchises, books, records,
plans, specifications, permits, licenses (to the extent assignable), approvals, actions, and causes
of action which now or hereafter relate to, are derived from or are used in connection with the
Premises, or the use, operation, maintenance, occupancy or enjoyment thereof or the conduct of
any business or activities thereon (hereinafter collectively called the "Intangibles and (h) any
and all proceeds and products of any of the foregoing and any and all other security and
collateral of any nature whatsoever, now or hereafter given for the repayment of the Debt and the
performance of Mortgagor's obligations under the Loan Documents.
TO HAVE AND TO HOLD the Mortgaged Property unto and to the use and benefit of
Mortgagee and/or Trustee, and their successors and assigns, forever; PROVIDED, HOWEVER,
these presents are upon the express condition that, if Mortgagor shall pay to Mortgagee the Debt
at the time and in the manner provided in the Note and this Mortgage and shall abide by and
comply with each and every covenant and condition set forth herein, in the Note and in the other
Loan Documents in a timely manner, these presents and the estate hereby granted shall cease,
terminate and be void.
Mortgagor represents and warrants to and covenants and agrees with Mortgagee as
follows:
1. Warranty of Title. Mortgagor warrants that (i) Mortgagor is (a) the sole owner of
and has good, legal, marketable and insurable fee simple title to the Mortgaged Property,
(b) possesses an unencumbered fee estate in the Premises and the Improvements, and (c) owns
the Mortgaged Property free and clear of all liens, encumbrances and charges whatsoever except
for those exceptions shown in the title insurance policy insuring the lien of this Mortgage and
(ii) this Mortgage is and will remain a valid and enforceable first lien on and security interest in
the Mortgaged Property, subject only to said exceptions. Mortgagor shall forever warrant,
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defend and preserve such title and the validity and priority of the lien of this Mortgage and shall
forever warrant and defend the same to Mortgagee and/or Trustee against the claims of all
persons whomsoever.
2. Taxes. Mortgagor, at its sole cost and expense, will pay and discharge, or cause
to be paid and discharged, the Taxes, as hereafter defined, not later than the earlier to occur of (i)
the due date thereof, (ii) the day any fine, penalty, interest or cost may be added thereto or
imposed, or (iii) the day any lien may be filed for the nonpayment thereof (if such day is used to
determine the due date of the respective item) and Grantor shall deliver to Mortgagee a written
report evidencing the payment of the respective Tax. For purposes hereof, Taxes are all real
estate and personal property taxes, charges, assessments, standby fees, excises and levies and
any interest, costs or penalties with respect thereto, general and special, ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature whatsoever which at any time
prior to or after the execution hereof may be assessed, levied or imposed upon the Mortgaged
Property or the ownership, use, occupancy, or enjoyment thereof, or any portion thereof
3. Insurance. (a) Mortgagor, at its sole cost and exPense, will keep the Mortgaged
Property insured during the entire term of this Mortgage for the mutual benefit of Mortgagor and
Mortgagee against loss or damage by fire and against loss or damage by other risks and hazards
covered by a standard extended coverage insurance policy and included within the classification
"All Risks of Physical Loss Such insurance shall be (i) in an amount equal to the lesser of the
then full replacement cost of the Improvements and Equipment, without deduction for physical
depreciation, or the outstanding amount of the Debt, and (ii) with extended coverage in amounts
sufficient such that the insurer would not deem Mortgagor a co- insurer under said policies. The
policies of insurance carried in accordance with this paragraph shall be paid annually in advance
and shall contain the "Replacement Cost Endorsement" with a waiver of depreciation.
(b) Mortgagor, at its sole cost and expense, for the mutual benefit of Mortgagor and
Mortgagee, shall also obtain and maintain during the entire term of this Mortgage the following
policies of insurance:
(i) Flood insurance if any part of the Mortgaged Property now (or
subsequently determined to be) is located in an area identified by the Federal Emergency
Management Agency as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of 1968 (and
any amendment or successor act thereto) in an amount at least equal to the lesser of the
full replacement cost of the Improvements and the Equipment, the outstanding principal
amount of the Note or the maximum limit of coverage available with respect to the
Improvements and Equipment under said Act. Mortgagor hereby agrees to pay
Mortgagee such fees as may be permitted under applicable law for the costs incurred by
Mortgagee in determining, from time to time, whether the Mortgaged Property is then
located within such area.
(ii) Comprehensive General Liability insurance, including broad form
property damage, blanket contractual and personal injuries (including death resulting
therefrom) coverages and containing minimum limits per occurrence of $1 million for
the Improvements and the Premises with excess umbrella coverage in an amount of at
least $1 million arising out of any one occurrence.
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(iii) Rental loss insurance in an amount equal to the aggregate annual amount
of all Rents payable under the Leases, such rental loss insurance to cover rental losses for
a period of at least one year after the date of the fire or casualty in question. The amount
of such rental loss insurance shall be reviewed annually and shall be increased from time
to time during the term of this Mortgage to reflect all increased Rent payable under all
Leases.
(iv) Insurance against loss or damage from (1) leakage of sprinkler systems,
and (2) explosion of steam boilers, air conditioning equipment, high pressure piping,
machinery and equipment, pressure vessels or similar apparatus now or hereafter
installed in the Improvements and including broad form boiler and machinery insurance
(without exclusion for explosion) covering all boilers or other pressure vessels,
machinery and equipment (including all electrical equipment, sprinkler systems, heating
and air conditioning equipment, refrigeration equipment and piping) located in, on, or
about the Premises and the Improvements, in an amount at least equal to the full
replacement cost of such equipment and the building or buildings housing same.
(v) If the Mortgaged Property includes commercial property, worker's
compensation insurance with respect to any employees of Mortgagor, as required by any
governmental authority or legal requirement.
(vi) Such other insurance as may from time to time be reasonably required by
Mortgagee in order to protect its interests, including, but not limited to, environmental
insurance.
(c) All policies of insurance "Policies required pursuant to Section 3: (i) shall
contain a standard noncontributory mortgagee clause naming Mortgagee as the person to which
all payments made by such insurance company shall be paid, (ii) shall be assigned and delivered
to Mortgagee, (iii) shall contain endorsements providing that neither Mortgagor, Mortgagee nor
any other party shall be a co- insurer under said Policies and that Mortgagee shall receive at least
thirty (30) days prior written notice, of any modification, reduction or cancellation, (iv) shall be
for a term of not less than one year, (vi) shall be satisfactory in form and substance to Mortgagee
and shall be approved by Mortgagee as to amounts, form, risk coverage, deductibles, loss payees
and insureds, and (vii) shall provide that all claims shall be allowable on events as they occur.
Upon demand therefore, Mortgagor shall reimburse Mortgagee for all of Mortgagee's (or its
services) reasonable costs and expenses incurred in obtaining any or all of the Policies or
otherwise causing the compliance with the terms and provisions of this Section 3, including
(without limitation) obtaining updated flood hazard certificates and replacement of any so- called
"forced placed" insurance coverages. All Policies required pursuant to subsections 3(a) and 3(b)
shall be issued by an insurer and licensed in the state in which the Mortgaged Property is located
with a claims paying ability rating of "A "or better by Standard Poor's Corporation or A :VIII
or better by A.M. Best as published in Best's Key Rating Guide. Mortgagor shall pay the
premiums for such Policies "Insurance Premiums as the same become due and payable
(unless such Insurance Premiums have been paid by Mortgagee pursuant to Section 5 hereof).
Not later than fifteen (15) days prior to the expiration date of each of the Policies, Mortgagor
will deliver to Mortgagee satisfactory evidence of the renewal of each Policy.
(d) If the Mortgaged Property shall be damaged or destroyed, in whole or in part, by
fire or other casualty, Mortgagor shall give prompt notice thereof to Mortgagee and the
following shall apply:
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(i) In case of loss covered by Policies (an "Insured Casualty Mortgagee
may either (1) settle and adjust any claim without the consent of Mortgagor, or (2) allow
Mortgagor to agree with the insurance company on the amount to be paid upon the loss;
provided that in any case Mortgagee shall and is hereby authorized to collect and receipt
for any such insurance proceeds.
(ii) In the event of any Insured Casualty, the net proceeds of insurance
collected shall, at the option of Mortgagee in its sole discretion, be applied to the
payment of the Debt or applied to reimburse Mortgagor for the cost of restoring,
repairing, replacing or rebuilding the Mortgaged Property or part thereof subject to the
Insured Casualty, in the manner set forth below. Any such application to the Debt shall
not reduce or postpone any payments otherwise required pursuant to the Note, other than
the amount of the final payment on the Note.
(iii) In the event that proceeds of insurance, if any, shall be made available to
Mortgagor for the restoring, repairing, replacing or rebuilding of the Mortgaged Property,
Mortgagor hereby covenants to restore, repair, replace or rebuild the same to be of at
least equal value and of substantially the same character as prior to such damage or
destruction, all to be effected in accordance with applicable law and plans and
specifications approved in advance by Mortgagee.
(iv) In the event Mortgagor is entitled to reimbursement out of insurance
proceeds held by Mortgagee, such proceeds shall be disbursed from time to time upon
Mortgagee being furnished with (1) evidence satisfactory to it that the restoration, repair,
replacement and rebuilding covered by the disbursement has been completed in
accordance with plans and specifications approved by Mortgagee, (2) evidence
satisfactory to it of the estimated cost of completion of the restoration, repair,
replacement and rebuilding, (3) funds, or, at Mortgagee's option, assurances satisfactory
to Mortgagee that such funds are available, sufficient in addition to the net proceeds of
insurance to complete the proposed restoration, repair, replacement and rebuilding, and
(4) such architect's certificates, waivers of lien, contractor's sworn statements, title
insurance endorsements, bonds, plats of survey and such other evidences of cast,
payment and performance as Mortgagee may reasonably require and approve. With
respect to disbursements to be made by Mortgagee: (A) no payment made prior to the
final completion of the restoration, repair, replacement and rebuilding shall exceed ninety
percent (90 of the value of the work performed from time to time; (B) funds other than
proceeds of insurance shall be disbursed prior to disbursement of such proceeds; and
(C) at all times, the undisbursed balance of such proceeds remaining in the hands of
Mortgagee, together with funds deposited for that purpose or irrevocably committed to
the satisfaction of Mortgagee by or on behalf of Mortgagor for that purpose, shall be at
least sufficient in the reasonable judgment of Mortgagee to pay for the cost of completion
of the restoration, repair, replacement or rebuilding, free and clear of all liens or claims
for lien and the costs described in subsection 3(d)(v) below. Any surplus which may
remain out of insurance proceeds held by Mortgagee after payment of such costs of
restoration, repair, replacement or rebuilding shall be paid to any party entitled thereto.
(v) Notwithstanding anything to the contrary contained herein, the proceeds
of insurance reimbursed to Mortgagor in accordance with the terms and provisions of this
Mortgage shall be reduced by the reasonable costs (if any) incurred by Mortgagee in the
adjustment and collection thereof and in the reasonable costs incurred by Mortgagee of
paying out such proceeds (including, without limitation, reasonable attorneys' fees and
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costs paid to third parties for inspecting the restoration, repair, replacement and
rebuilding and reviewing the plans and specifications therefore).
4. Payment of Other Charges. Mortgagor shall pay all assessments, water rates and
sewer rents, ground rents, maintenance charges, other governmental impositions, and other
charges, now or hereafter levied or assessed or imposed against the Mortgaged Property or any
part thereof "Other Charges") as the same become due and payable. Mortgagor will deliver to
Mortgagee evidence satisfactory to Mortgagee that the Other Charges have been so paid or are
not then delinquent no later than thirty (30) days following the date on which the Other Charges
would otherwise be delinquent if not paid. Mortgagor shall not suffer and shall promptly cause
to be paid and discharged any lien or charge whatsoever which may be or become a lien or
charge against the Mortgaged Property, and shall promptly pay for all utility services provided to
the Mortgaged Property.
5. Tax and Insurance Escrow Fund. On the Closing Date, Mortgagor shall make an
initial deposit to the Tax and Insurance Escrow Fund, as hereinafter defined, of an amount
which, when added to the monthly amounts to be deposited as specified below, will be sufficient
in the estimation of Mortgagee to satisfy the next due taxes, assessments, insurance premiums
and other similar charges. Mortgagor shall pay to Mortgagee on the first day of each calendar
month (a) one twelfth of an amount which would be sufficient to pay all Taxes payable or
estimated by Mortgagee to be payable, during the next ensuing twelve (12) months, and (b)
one twelfth of an amount which would be sufficient to pay the Insurance Premiums due for the
renewal of the coverage afforded by the Policies upon the expiration thereof (said initial deposit
and the amounts in [a] and [b] above are hereinafter called the "'Fax and Insurance Escrow
Fund"). Mortgagee may, in its sole discretion, retain a third party tax consultant to obtain tax
certificates or other evidence or estimates of tax due or to become due or to verify the payment
of taxes and Mortgagor will promptly reimburse Mortgagee for the reasonable cost of retaining
any such third parties or obtaining such certificates. Mortgagor hereby pledges (and grants a lien
and security interest) to Mortgagee any and all monies now or hereafter deposited in the Tax and
Insurance Escrow Fund as additional security for the payment of the Debt. Mortgagee will apply
the Tax and Insurance Escrow Fund to payments of Taxes and Insurance Premiums required to
be made by Mortgagor pursuant to Sections 2 and 3 hereof. If the amount of the Tax and
Insurance Escrow Fund shall exceed the amounts due for Taxes and Insurance Premiums
pursuant to Sections 2 and 3 hereof, Mortgagee shall, in its discretion, return any excess to
Mortgagor or credit such excess against future payments to be made to the Tax and Insurance
Escrow Fund. If the Tax and Insurance Escrow Fund is not sufficient to pay the Taxes and
Insurance Premiums due from time to time hereunder, Mortgagor shall promptly pay to
Mortgagee, upon demand, an amount which Mortgagee shall estimate as sufficient to make up
the deficiency. Upon the occurrence of an Event of Default, Mortgagee shall be entitled to
exercise both the rights of setoff and banker's lien, if applicable, against the interest of
Mortgagor in the Tax and Insurance Escrow Fund to the full extent of the outstanding balance of
the Debt, application of any such sums to the Debt to be in any order in its sole discretion. The
Tax and Insurance Escrow Fund shall not constitute a trust fund and may be commingled with
other monies held by Mortgagee or its servicer. Unless otherwise required by applicable law, no
earnings or interest on the Tax and Insurance Escrow Fund shall be payable to Mortgagor even if
the Mortgagee or its servicer is paid a fee and/or receives interest or other income in connection
with the deposit or placement of such fund (in which event such income shall be reported under
Mortgagee's or its servicer's tax identification number, as applicable). Upon payment of the
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Debt and performance by Mortgagor of all its obligations under this Mortgage and the other
Loan Documents, any amounts remaining in the Tax and Insurance Escrow Fund shall be
refunded to Mortgagor.
6. Replacement Escrow Fund. If initially or subsequently required by Mortgagee,
Mortgagor shall pay to Mortgagee on the first day of each calendar month one twelfth of the
amount reasonably estimated by Mortgagee to be due for replacements and capital repairs
required to be made to the Mortgaged Property during each calendar year ("Replacement
Escrow Fund Mortgagor hereby pledges (and grants a lien and security interest) to
Mortgagee any and all monies now or hereafter deposited in the Replacement Escrow Fund as
additional security for the payment of the Debt. Mortgagee may, upon notice to Mortgagor,
adjust the monthly amounts required to be deposited into the Replacement Escrow Fund to a
monthly amount equal to one twelfth of the total amount estimated by Mortgagee to be required.
So long as no Event of Default exists and is continuing, Mortgagee shall make disbursements
from the Replacement Escrow Fund for items specified in each approved Budget on a quarterly
basis in increments of no less than $5,000.00 upon delivery by Mortgagor of Mortgagee's
standard form of draw request accompanied by copies of paid invoices for the amounts requested
and, if required by Mortgagee, lien waivers and releases from all parties famishing materials
and/or services in connection with the requested payment, delivery of such certificates and
certifications as Mortgagee may require, including but not limited to a new certificate of
occupancy for the portion of the Improvements covered by such repairs, if a new certificate of
occupancy is required by applicable law, or a certification by Mortgagor that no new certificate
of occupancy is required. Mortgagee may require an inspection of the Mortgaged Property in
order to establish the amount required for deposit in the Replacement Escrow Funds and/or prior
to making a quarterly disbursement in order to verify completion of replacements and repairs.
Mortgagee reserves the right to make any disbursement from the Replacement Escrow Fund
directly to the party furnishing materials and/or services. In the event that the amounts on
deposit or available in the Replacement Escrow Fund are inadequate to pay the costs of such
repairs or capital expenditure, Mortgagor shall pay the amount of such deficiency. Upon the
occurrence of an Event of Default, Mortgagee may apply any sums then present in the
Replacement Escrow Fund to the payment of the Debt in any order in its sole discretion. Upon
payment of the Debt and performance by Mortgagor of all its obligations under this Mortgage
and the other Loan Documents, any amounts remaining in the Replacement Escrow Fund shall
be refunded to Mortgagor. The Replacement Escrow Fund shall not constitute a trust fund and
may be commingled with other monies held by Mortgagee or its servicer. Unless otherwise
required by applicable law, no earnings or interest on the Replacement Escrow Fund shall be
payable to Mortgagor even if the Mortgagee or its servicer is paid a fee and/or receives interest
or other income in connection with the deposit or placement of such fund (in which event such
income shall be reported under Mortgagee's or its servicer's tax identification number, as
applicable).
7. Condemnation. Mortgagor shall promptly give Mortgagee written notice of the
actual or threatened commencement of any condemnation or eminent domain proceeding and
shall deliver to Mortgagee copies of any and all papers served in connection with such
proceedings. Mortgagee is hereby irrevocably appointed as Mortgagor's attomey -in -fact,
coupled with an interest, with exclusive power to collect, receive and retain any award or
payment for said condemnation or eminent domain and to make any compromise or settlement in
connection with such proceeding, subject to the provisions of this Mortgage. Notwithstanding
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any taking by any public or quasi public authority through eminent domain or otherwise
(including but not limited to any transfer made in lieu of or in anticipation of the exercise of such
taking), Mortgagor shall continue to pay the Debt at the time and in the manner provided for its
payment in the Note, in this Mortgage and the other Loan Documents and the Debt shall not be
reduced until any award or payment therefore shall have been actually received after expenses of
collection and applied by Mortgagee to the discharge of the Debt. Mortgagor shall cause the
award or payment made in any condemnation or eminent domain proceeding, which is payable
to Mortgagor, to be paid directly to Mortgagee. Mortgagee may apply any such award or
payment to the reduction or discharge of the Debt whether or not then due and payable.
8. Representations Concerning Loan. Mortgagor represents, warrants and covenants
as follows:
(a) Neither Mortgagor nor any guarantor of the Debt or any part thereof (a
"Guarantor") has any defense to the payment in full of the Debt that arises from applicable
local, state or federal laws, regulations or other requirements. None of the Loan Documents are
subject to any right of rescission, set -of, abatement, diminution, counterclaim or defense,
including the defense of usury, nor will the operation of any of the terms of any such Loan
Documents, or the exercise of any right thereunder, render any Loan Documents unenforceable,
in whole or in part, or subject to any right of rescission, set -off, abatement, diminution,
counterclaim or defense, including the defense of usury, and no such right of rescission, set -off,
abatement, diminution, counterclaim or defense has been, or will be, asserted with respect
thereto.
(b) All certifications, permits and approvals, including, without limitation, certificates
of completion and occupancy permits required for the legal use and occupancy of the Mortgaged
Property, have been obtained and are in full force and effect. The Mortgaged Property is in good
repair, good order and good condition and free and clear of any damage that would affect
materially and adversely the value of the Mortgaged Property as security for the Debt and the
Mortgaged Property has not been materially damaged by fire, wind or other casualty or physical
condition, which damage has not been fully repaired. There are no proceedings pending or
threatened for the partial or total condemnation of the Mortgaged Property.
(c) All of the Improvements which were included in determining the appraised value
of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property, and no easements or other encumbrances upon the Premises encroach upon
any of the Improvements, so as to affect the value or marketability of the Mortgaged Property
except for immaterial encroachments which do not adversely affect the security intended to be
provided by this Mortgage or the use, enjoyment, value or marketability of the Mortgaged
Property. All of the Improvements comply with all material requirements of any applicable
zoning and subdivision laws and ordinances.
(d) The Mortgaged Property is not subject to any leases or operating agreements
other than the Leases and the operating agreements, if any, described in the rent roll delivered to
Mortgagee in connection with this Mortgage, and all such Leases and agreements are in full
force and effect. No person has any possessory interest in the Mortgaged Property or right to
occupy the same except under and pursuant to the provisions of the Leases and any such
operating agreements.
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(e) All financial data, including, without limitation, statements of cash flow and
income and operating expenses, delivered to Mortgagee by, or on behalf of Mortgagor are
(i) true and correct in all material respects; (ii) accurately represent the financial condition of
Mortgagor or the Mortgaged Property as of the date thereof in all material respects; and
(iii) have been prepared in accordance with generally accepted accounting principles consistently
applied throughout the periods covered.
(f) To the best of Mortgagor's knowledge, the survey of the Mortgaged Property
delivered to Mortgagee in connection with this Mortgage does not fail to reflect any material
matter affecting the Mortgaged Property or the title thereto.
(g) The Mortgaged Property (A) is served by public utilities and services in the
surrounding community (including public water and sewer systems, police and fire protection,
public transportation, refuse removal, public education, and enforcement of safety codes),
(B) abuts upon a dedicated, all- weather road, or is served and benefitted by an irrevocable
easement permitting ingress and egress and (C) has parking and other amenities necessary for the
operation of the business currently conducted thereon, which public utilities and services, ingress
and egress and parking and other amenities are adequate in relation to the premises and location
on which the Mortgaged Property is located
(h) The Mortgaged Property is a contiguous parcel and a separate tax parcel, and
there are no delinquent Taxes or other outstanding charges adversely affecting the Mortgaged
Property.
(i) The Mortgaged Property is not relied upon by, and does not rely upon, any
building or improvement not part of the Mortgaged Property to fulfill any zoning, building code
or other governmental or municipal requirement for structural support or the furnishing of any
essential building systems or utilities, except to the extent of any valid and existing reciprocal
easement agreements shown in the title insurance policy insuring the lien of this Mortgage.
(j) No action, omission, misrepresentation, negligence, fraud or similar occurrence
has taken place on the part of any person that would reasonably be expected to result in the
failure or impairment of full and timely coverage under any insurance policies providing
coverage for the Mortgaged Property.
(k) There are no defaults by Mortgagor beyond any applicable grace period under any
contract or agreement that binds Mortgagor and/or the Mortgaged Property, including any
management, service, supply, security, maintenance or similar contracts; and Mortgagor has no
knowledge of any such default for which notice has not yet been given; and no such agreement is
in effect with respect to the Mortgaged Property that is not capable of being terminated by
Mortgagor on less than thirty (30) days notice except as previously disclosed to Mortgagee by a
delivery of a copy of all such agreements.
9. Representations Concerning Mortgagor. Mortgagor represents, warrants and
covenants that Mortgagor (i) will not enter into any contract or agreement with any Guarantor or
any party which is directly or indirectly controlling, controlled by or under common control with
Mortgagor or Guarantor (an "Affiliate except upon terms and conditions that are intrinsically
fair and substantially similar to those that would be available on an arms- length basis with third
parties other than any Guarantor or Affiliate; (ii) has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (a) the Debt, and (b) trade and operational debt incurred
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in the ordinary course of business with trade creditors and in amounts as are normal and
reasonable under the circumstances and no indebtedness other than the Debt may be secured
(subordinate or passu) by the Mortgaged Property; (iii) has not made and will not make any
loans or advances to any third party, nor to Guarantor, any Affiliate or any constituent party of
Mortgagor; (iv) is and will remain solvent and will pay its debts from its assets as the same shall
become due; (v) has done or caused to be done and will do all things necessary, to preserve its
existence; (vi) will maintain books and records and bank accounts for the Mortgaged Property
separate from those of its Affiliates and any constituent party of Mortgagor, and will file its own
tax returns; (vii) will preserve and keep in full. force and effect its existence, good standing and
qualification to do business in the state in which the Mortgaged Property is located; (viii) will
maintain adequate capital for the normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business operations; (ix) will not commingle
the funds and other assets of the Mortgaged Property with other funds or assets of Mortgagor or
those of any Affiliate, any Guarantor, any constituent party of Mortgagor or any other person;
(x) has and will maintain its assets in such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from those of any constituent party of
Mortgagor, Affiliate, Guarantor or any other person; and (xi) shall obtain and maintain in full
force and effect, and abide by and satisfy the material terms and conditions of, all material
permits, licenses, registrations and other authorizations with or granted by any governmental
authorities that may be required from time to time with respect to the performance of its
obligations under this Mortgage.
10. Maintenance of Mortgaged Property. Mortgagor shall cause the Mortgaged
Property to be operated and maintained in a good and safe condition and repair and in keeping
with the condition and repair of properties of a similar use, value, age, nature and construction.
Mortgagor shall not use, maintain or operate the Mortgaged Property in any manner which
constitutes a public or private nuisance or which makes void, voidable, or cancelable, or
increases the premium of, any insurance then in force with respect thereto. The Improvements
and the Equipment shall not be removed, demolished or materially altered (except for normal
replacement of the Equipment) without the consent of Mortgagee. Mortgagor shall promptly
comply with all laws, orders and ordinances affecting the Mortgaged Property, or the use
thereof. Mortgagor shall promptly repair, replace or rebuild any part of the Mortgaged Property
which may be destroyed by any casualty, or become damaged, worn or dilapidated or which may
be affected by any proceeding of the character referred to in Section 7 hereof and shall complete
and pay for any structure at any time in the process of construction or repair on the Premises.
11. Use of Mortgaged Property. Mortgagor shall not initiate, join in, acquiesce in, or
consent to any change in any private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the Mortgaged Property or any
part thereof, nor shall Mortgagor initiate, join in, acquiesce in, or consent to any zoning change
or zoning matter affecting the Mortgaged Property. If under applicable zoning provisions the
use of all or any portion of the Mortgaged Property is or shall become a nonconforming use,
Mortgagor will not cause or permit such nonconforming use to be discontinued or abandoned
without the express written consent of Mortgagee. Mortgagor shall not permit or suffer to occur
any waste on or to the Mortgaged Property or to any portion thereof and shall not take any steps
whatsoever to convert the Mortgaged Property, or any portion thereof, to a condominium or
cooperative form of management. Mortgagor will not install or permit to be installed on the
Premises any underground storage tank or above ground storage tank without the written consent
10
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12. Transfer or Encumbrance of the Mortgaged Property. (a) Mortgagor
acknowledges that Mortgagee has examined and relied on the creditworthiness and experience of
Mortgagor in owning and operating properties such as the Mortgaged Property in agreeing to
make the loan secured hereby, and that Mortgagee will continue to rely on Mortgagor's
ownership of the Mortgaged Property as a means of maintaining the value of the Mortgaged
Property as security for repayment of the Debt. Mortgagor acknowledges that Mortgagee has a
valid interest in maintaining the value of the Mortgaged Property so as to ensure that, should
Mortgagor default in the repayment of the Debt, Mortgagee can recover the Debt by a sale of the
Mortgaged Property. Mortgagor shall not, without the prior written consent of Mortgagee, sell,
convey, alienate, mortgage, encumber, pledge or otherwise transfer the Mortgaged Property or
any part thereof, or permit the Mortgaged Property or any part thereof to be sold, conveyed,
alienated, mortgaged, encumbered, pledged or otherwise transferred; provided, however,
Mortgagee may, in its sole discretion, give such written consent (but shall have no obligation to
do so) to any such sale, conveyance, alienation, mortgage, encumbrance, pledge or other
transfer, and any such consent may be conditioned upon the satisfaction of such conditions
precedent as Mortgagee, in its sole discretion, may require.
(b) A sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer within
the meaning of this Section 12 shall not include (x) transfers made by devise or descent or by
operation of law upon the death of a joint tenant, partner or shareholder, subject, however, to all
the following requirements: (1) written notice of any transfer under this subsection 12(b)(x),
whether by will, trust or other written instrument, operation of law or otherwise, is provided to
Mortgagee or its servicer, together with copies of such documents relating to the transfer as
Mortgagee or its servicer may reasonably request, (2) control over the management and
operation of the Mortgaged Property is retained by persons who are acceptable in all respects to
Mortgagee in its sole and absolute discretion, and (3) no such transfer, death or other event has
any adverse effect on the status of Mortgagor as a continuing legal entity liable for the payment
of the Debt and the performance of all other obligations secured hereby, or (y) transfers
otherwise by operation of law in the event of a bankruptcy, nor shall the meaning include a
Lease, but shall be deemed to include (i) an installment sales agreement wherein Mortgagor
agrees to sell the Mortgaged Property or any part thereof for a price to be paid in installments;
(ii) an agreement by Mortgagor leasing all or a substantial part of the Mortgaged Property for
other than actual occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Mortgagor's right, title and interest in and to any Leases
or any Rents; (iii) if Mortgagor, Guarantor, or any general partner of Mortgagor or Guarantor is a
corporation, any merger, consolidation or the voluntary or involuntary sale, conveyance or
transfer of such corporation's stock (or the stock of any corporation directly or indirectly
controlling such corporation by operation of law or otherwise) or the creation or issuance of new
stock in one or a series of transactions by which an aggregate of more than 10% of such
corporation's stock shall be vested in a party or parties who are not now stockholders (provided,
however, in no event shall this subpart jiii] apply to any Guarantor whose stock, shares or
partnership interests are traded on a nationally recognized stock exchange); (iv) if Mortgagor,
Guarantor, or any general partner of Mortgagor or Guarantor is a limited liability company or
limited partnership, the voluntary or involuntary sale, conveyance or transfer by which an
aggregate of more than fifty percent (50 of the ownership interest in such limited liability
company or more than fifty percent (50 of the limited partnership interests in such limited
partnership shall be vested in parties not having an ownership interest as of the date of this
Mortgage; and (v) if Mortgagor, any Guarantor or any general partner of Mortgagor or any
Guarantor is a limited or general partnership or joint venture, the change, removal or resignation
JOCP012
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of a general partner, managing partner or joint venturer or the transfer of all or any portion of the
partnership interest of any general partner, managing partner or joint venturer.
(c) Mortgagee's consent to one sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Mortgaged Property shall not be deemed to be a waiver of Mortgagee's
right to require such consent to any future occurrence of same. Any sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Mortgaged Property made in
contravention of this Section 12 shall be null and void and of no force and effect. Mortgagor
agrees to bear and shall pay or reimburse Mortgagee on demand for all reasonable expenses
(including, without limitation, all recording costs, reasonable attorney's fees and disbursements
and title search costs) incurred by Mortgagee in connection with the review, approval and
documentation of any such sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer. In no event shall any of the terms and provisions of this Section 12 amend or modify
the terms and provisions contained in Section 9 herein.
13. Estoppel Certificates and No Default Affidavits. (a) After request by Mortgagee,
Mortgagor shall within ten (10) days furnish Mortgagee with a statement, duly acknowledged
and certified, setting forth (i) the amount of the original principal amount of the Note, (ii) the
unpaid principal amount of the Note, (iii) the rate of interest of the Note, (iv) the date
installments of interest and/or principal were last paid, (v) any offsets or defenses to the payment
of the Debt, if any, and (vi) that the Note, this Mortgage and the other Loan Documents are
valid, legal and binding obligations and have not been modified or if modified, giving particulars
of such modification.
(b) After request by Mortgagee, Mortgagor shall within ten (10) days furnish
Mortgagee with a certificate reaffirming all representations and warranties of Mortgagor set forth
herein and in the other Loan Documents as of the date requested by Mortgagee or, to the extent
of any changes to any such representations and warranties, so stating such changes.
(c) If the Mortgaged Property includes commercial property, Mortgagor shall deliver
to Mortgagee upon request, tenant estoppel certificates from each commercial tenant at the
Mortgaged Property in form and substance reasonably satisfactory to Mortgagee provided that
Mortgagor shall not be required to deliver such certificates more frequently than two (2) times in
any calendar year.
14. Changes in the Laws Regarding Taxation. If any law is amended, enacted or
adopted after the date of this Mortgage which deducts the Debt from the value of the Mortgaged
Property for the purpose of taxation or which imposes a tax, either directly or indirectly, on the
Debt or Mortgagee's interest in the Mortgaged Property, Mortgagor will pay such tax, with
interest and penalties thereon, if any. In the event Mortgagee is advised by counsel chosen by it
that the payment of such tax or interest and penalties by Mortgagor would be unlawful or taxable
to Mortgagee or unenforceable or provide the basis for a defense of usury, then in any such
event, Mortgagee shall have the option, by written notice of not less than forty -five (45) days, to
declare the Debt immediately due and payable.
15. No Credits on Account of the Debt. Mortgagor will not claim or demand or be
entitled to any credit or credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Mortgaged Property, or any part thereof, and no deduction shall otherwise
be made or claimed from the assessed value of the Mortgaged Property, or any part thereof, for
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real estate tax purposes by reason of this Mortgage or the Debt. In the event such claim, credit
or deduction shall be required by law, Mortgagee shall have the option, by written notice of not
less than ninety (90) days, to declare the Debt immediately due and payable.
16. Documentary Stamps. If at any time the United States of America, any State
thereof or any subdivision of any such State shall require revenue or other stamps to be affixed
to the Note or this Mortgage, or impose any other tax or charge on the same, Mortgagor will pay
for the same, with interest and penalties thereon, if any.
17. Books and Records. Mortgagor will keep accurate books and records in
accordance with sound accounting principles in which full, true and correct entries shall be
promptly made with respect to the Mortgaged Property and the operation thereof, and will permit
all such books and records (including without limitation all contracts, statements, invoices, bills
and claims for labor, materials and services supplied for the construction, repair or operation of
the Improvements) to be inspected or audited and copies made by Mortgagee and its
representatives during normal business hours and at any other reasonable times. Mortgagor
represents that its chief executive office is as set forth in the introductory paragraph of this
Mortgage and that all books and records pertaining to the Mortgaged Property are maintained at
such location. Within ninety (90) days following the end of each calendar year, Mortgagor shall
furnish a statement of the financial affairs and condition of the Mortgagor and the Mortgaged
Property including a statement of profit and loss for the Mortgagor and the Mortgaged Property
in such format and in such detail as Mortgagee or its servicer may request, and setting forth the
financial condition and the income and expenses for the Mortgagor and the Mortgaged Property
for the immediately preceding calendar year certified to by Mortgagor as being complete and
accurate to the best of Mortgagor's knowledge and belief. Mortgagor shall deliver to Mortgagee
copies of all income tax returns, requests for extension and other similar items
contemporaneously with its delivery of same to the Internal Revenue Service. Failure to provide
annual reports shall constitute an Event of Default under Section 22 and entitle Mortgagee to
audit or cause to be audited Mortgagor's books and records. The late charge and the cost of such
audit shall be immediately payable from Mortgagor upon demand by Mortgagee and, until paid,
shall be added to and constitute a part of the Debt. At any time and from time to time Mortgagor
shall deliver to Mortgagee or its agents such other financial data as Mortgagee or its agents shall
request with respect to the ownership, maintenance, use and operation of the Mortgaged
Property, including, but not limited to, schedules of gross sales for percentage rents under
Leases. Mortgagor will permit representatives appointed by Mortgagee, including independent
accountants, agents, attorneys, appraisers and any other persons, to visit and inspect during its
normal business hours and at any other reasonable times any of the Mortgaged Property and to
make photographs thereof, and to write down and record any information such representatives
obtain, and shall permit Mortgagee or its representatives to investigate and verify the accuracy of
the information furnished to Mortgagee under or in connection with this Mortgage or any of the
other Loan Documents and to discuss all such matters with its officers, employees and
representatives. Mortgagor will famish to Mortgagee at Mortgagor's expense all evidence
which Mortgagee may from time to time reasonably request as to the accuracy and validity of or
compliance with all representations and warranties made by Mortgagor in the Loan Documents
and satisfaction of all conditions contained therein.
18. Performance of Other Agreements. Mortgagor shall observe and perform each
and every term to be observed or performed by Mortgagor pursuant to the terms of any
agreement or recorded instrument affecting or pertaining to the Mortgaged Property. 63
19. Further Acts: Sale of Loan and Advertising. (a) Mortgagor will, at the cost of
Mortgagor, and without expense to Mortgagee, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of assignment,
Uniform Commercial Code financing statements or continuation statements, transfers and
assurances as Mortgagee shall, from time to time, require, for better assuring and confirming
unto Mortgagee the property and rights hereby mortgaged, conveyed, pledged, assigned and
hypothecated or intended now or hereafter so to be, or which Mortgagor may be or may hereafter
become bound to convey or assign to Mortgagee, or for carrying out the intention or facilitating
the performance of the terms of this Mortgage or for filing, registering or recording this
Mortgage. Mortgagor, on demand, will execute and deliver and hereby authorizes Mortgagee to
execute in the name of Mortgagor or without the signature of Mortgagor to the extent Mortgagee
may lawfully do so, one or more financing statements, chattel mortgages or other instruments, to
evidence more effectively the security interest of Mortgagee in the Mortgaged Property.
Mortgagor grants to Mortgagee an irrevocable power Of attorney coupled with an interest for the
purpose of exercising and perfecting any and all rights and remedies available to Mortgagee at
law and in equity, including without limitation such rights and remedies available to Mortgagee
pursuant to this paragraph.
(b) Mortgagee (and its mortgage servicer and their respective assigns) shall have the
right to disclose in confidence such financial information regarding Mortgagor, Guarantor or the
Mortgaged Property as may be necessary (i) to complete any sale or attempted sale of the Note
or participations in the Loan (or any transfer of the mortgage servicing thereof) evidenced by the
Note and the Loan Documents, (ii) to service the Note or (iii) to furnish information concerning
the payment status of the Note to the holder or beneficial owner thereof, including, without
limitation, all Loan Documents, financial statements, projections, internal memoranda, audits,
reports, payment history, appraisals and any and all other information and documentation in the
Mortgagee's files (and such servicer's files) relating to the Mortgagor, any Guarantor and the
Mortgaged Property. This authorization shall be irrevocable in favor of the Mortgagee (and its
mortgage servicer and their respective assigns), and Mortgagor and Guarantor waive any claims
that they may have against the Mortgagee, its mortgage servicer and their respective assigns or
the party receiving information from the Mortgagee pursuant hereto regarding disclosure of
information in such files and further waive any alleged damages which they may suffer as a
result of such disclosure.
(c) The Mortgagor acknowledges that the Mortgagee intends to sell the loan
evidenced by the Note and the Loan Documents or a participation interest therein to a party who
may pool the Loan with a number of other loans and to have the holder of such loans (most
likely a special purpose REMIC) issue one or more classes of Mortgage Backed Pass Through
Certificates ("Certificates"), which may be rated by one or more national rating agencies.
Mortgagee (and its mortgage servicer and their respective assigns) shall be permitted to share
any of the information referred to in subsection (b) above, whether obtained before or after the
date of the Note, with the holders or potential holders of the Certificates, investment banking
firms, rating agencies, accounting firms, custodians, successor mortgage servicers, law firms and
other third -party advisory firms involved with the Loan and the Loan Documents or the
Certificates. It is understood that the information provided by the Mortgagor to the Mortgagee
(or its mortgage servicer and their respective assigns) or otherwise received by Mortgagee (or its
mortgage servicer and their respective assigns) in connection with the loan evidenced by the
Loan Documents may ultimately be incorporated into the offering documents for the Certificates
and thus various prospective investors may also see some or all of the information. The
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Mortgagee (and its mortgage servicer and their respective assigns) and all of the aforesaid
third -party advisors and professional firms shall be entitled to rely on the information supplied
by, or on behalf of, the Mortgagor.
(d) Mortgagee shall have the unrestricted right (but not the obligation) to disclose in
any advertising of the Mortgagee at anytime or from time to time the name of the Mortgagor
(and/or the Maker of the Note, if not the same), Guarantor and, the Mortgaged Property and the
nature of the Loan. This authorization shall be irrevocable in favor of the Mortgagee and
Mortgagor and Guarantor waive any claims that they may have against the Mortgagee pursuant
hereto regarding disclosure of such information in such advertising and further waive any
alleged damages which they may suffer as a result of such disclosure.
20. Recording of Mortgage, etc. Mortgagor will pay all filing, registration or
recording fees, and all expenses incident to the preparation, execution and acknowledgment of
this Mortgage, any mortgage supplemental hereto, any security instrument with respect to the
Mortgaged Property and any instrument of further assurance, and all federal, state, county and
municipal, taxes, duties, imposts, assessments and charges arising out of or in connection with
the execution and delivery of this Mortgage, any mortgage supplemental hereto, any security
instrument with respect to the Mortgaged Property or any instrument of further assurance, except
where prohibited by law so to do. Mortgagor shall hold harmless and indemnify Mortgagee, its
successors and assigns, against any liability incurred by reason of the imposition of any tax on
the malting and recording of this Mortgage.
21, Reporting Requirements. Mortgagor agrees to give prompt notice to Mortgagee
of the insolvency or bankruptcy filing of Mortgagor or the death, insolvency or bankruptcy filing
of any Guarantor.
22. Events of Default. The term "Event of Default" as used herein shall mean the
occurrence or happening, at any time and from time to time, of any one or more of the following:
(a) if any portion of the Debt is not paid within ten (10) days from the date when the
same is due;
(b) if Mortgagor sells, conveys, alienates, mortgages, encumbers, pledges or
otherwise transfers any portion of the Mortgaged Property or permits the Mortgaged Property or
any part thereof to be sold, conveyed, alienated, mortgaged, encumbered, levied, pledged or
otherwise transferred without Mortgagee's prior written consent;
(c) if any representation or warranty of Mortgagor, or of any Guarantor, made herein,
in any Loan Document, any guaranty, or in any certificate, report, financial statement or other
instrument or document furnished to Mortgagee shall have been false or misleading in any
material respect when made;
(d) if Mortgagor or any Guarantor shall make an assignment for the benefit of
creditors or if Mortgagor or any Guarantor shall admit in writing its inability to pay, or
Mortgagor's or any Guarantor's failure to pay, debts generally as the debts become due;
(e) if a receiver, liquidator or trustee of Mortgagor or of any Guarantor shall be
appointed or if Mortgagor or any Guarantor shall be adjudicated a bankrupt or insolvent, or if
any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law,
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or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by,
Mortgagor or any Guarantor or if Mortgagor or any Guarantor shall admit in writing its
insolvency or bankruptcy or if any proceeding for the dissolution or liquidation of Mortgagor or
of any Guarantor shall be instituted; however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Mortgagor or such Guarantor, upon the
same not being discharged, stayed or dismissed within sixty (60) days;
(f) if Mortgagor shall default under any term, covenant, or condition of this
Mortgage or any of the other Loan Documents other than as specified in any of the above
subparagraphs;
(g) if all or a substantial part of Mortgagor's assets (other than the Mortgaged
Property) are attached, seized, subjected to a writ or distress warrant or are levied upon (unless
such attachment, seizure, writ, distress warrant or levy is vacated within sixty [60] days
following the date of the same);
(h) entry of a judgment in excess of $50,000.00 and the expiration of any appeal
rights or the dismissal or fmal adjudication of appeals against Mortgagor (unless such judgment
is vacated within sixty [60] days following the date of the same);
(i) the Mortgage shall cease to constitute a first- priority lien on the Mortgaged
Property (other than in accordance with its terms); and
(j) seizure or forfeiture of the Mortgaged Property, or any portion thereof, or
Mortgagor's interest therein, resulting from criminal wrongdoing or other unlawful action of
Mortgagor, its affiliates, or any tenant in the Mortgaged Property under any federal, state or local
law.
23. Remedies. Upon the occurrence of an Event of Default and subject to any
applicable cure period, Mortgagee may, at Mortgagee's option, and by or through Trustee, by
Mortgagee itself or otherwise, do any one or more of the following:
(a) Right to Perform Mortgagor's Covenants. If Mortgagor has failed to keep or
perform any covenant whatsoever contained in this Mortgage or the other Loan Documents,
Mortgagee may, but shall not be obligated to any person to do so, perform or attempt to perform
said covenant; and any payment made or expense incurred in the performance or attempted
performance of any such covenant, together with any sum expended by Mortgagee that is
chargeable to Mortgagor or subject to reimbursement by Mortgagor under the Loan Documents,
shall be and become a part of the "Debt," and Mortgagor promises, upon demand, to pay to
Mortgagee, at the place where the Note is payable, all sums so incurred, paid or expended by
Mortgagee, with interest from the date when paid, incurred or expended by Mortgagee at the
Default Rate as specified in the Note.
(b) Right of Entry. Mortgagee may, prior or subsequent to the institution of any
foreclosure proceedings, enter upon the Mortgaged Property, or any part thereof, and take
exclusive possession of the Mortgaged Property and of all books, records, and accounts relating
thereto and to exercise without interference from Mortgagor any and all rights which Mortgagor
has with respect to the management, possession, operation, protection, or preservation of the
Mortgaged Property.
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(c) Right to Accelerate. Mortgagee may, without notice, demand, presentment,
notice of nonpayment or nonperformance, protest, notice of protest, notice of intent to accelerate,
notice of acceleration, or any other notice or any other action, all of which are hereby waived by
Mortgagor and all other parties obligated in any manner whatsoever on the Debt, declare the
entire unpaid balance of the Debt immediately due and payable, and upon such declaration, the
entire unpaid balance of the Debt shall be immediately due and payable.
(d) Foreclosure -Power of Sale. Mortgagee may institute a proceeding or
proceedings, judicial, or nonjudicial, by advertisement and sale as provided by Wyoming
statute or otherwise, for the complete or partial foreclosure of this Mortgage or the complete or
partial sale of the Mortgaged Property under the power of sale contained herein or under any
applicable provision of law. Mortgagee may sell the Mortgaged Property, and all estate, right,
title, interest, claim and demand of Mortgagor therein, and all rights of redemption thereof, at
one or more sales, as an entirety or in parcels, with such elements of real and/or personal
property, and at such time and place and upon such terms as it may deem expedient, or as may be
required by applicable law, and in the event of a sale, by foreclosure or otherwise, of less than all
of the Mortgaged Property, this Mortgage shall continue as a lien and security interest on the
remaining portion of the Mortgaged Property.
(e) Rights Pertaining to Sales. Subject to the requirements of applicable law and
except as otherwise provided herein, the following provisions shall apply to any sale or sales of
all or any portion of the Mortgaged Property under or by virtue of subsection (d) above, whether
made under the power of sale herein granted or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale:
(i) Trustee or Mortgagee may conduct any number of sales from time to time.
The power of sale set forth above shall not be exhausted by any one or more such sales
as to any part of the Mortgaged Property which shall not have been sold, nor by any sale
which is not completed or is defective in Mortgagee's opinion, until the Debt shall have
been paid in full. Any sale may be postponed or adjourned by public announcement at
the time and place appointed for such sale or for such postponed or adjourned sale
without further notice. It shall not be necessary for Trustee, Mortgagee or any public
officer acting under execution or order of court to have present or constructively in its
possession any of the Mortgaged Property. Any such sale or sales shall operate to divest
all of the estate, right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Mortgagor in and to the properties and rights so sold, and shall be a perpetual
bar both at law and in equity against Mortgagor and any and all persons claiming or who
may claim the same, or any part thereof or any interest therein, by, through or under
Mortgagor to the fullest extent permitted by applicable law. Upon any such sale or sales,
Mortgagee may bid for and acquire the Mortgaged Property and, in lieu of paying cash
therefore, may make settlement for the purchase price by crediting against the Debt the
amount of the bid made therefore, after deducting therefrom the expenses of the sale, the
cost of any enforcement proceeding hereunder, and any other sums which Trustee or
Mortgagee is authorized to deduct under the terms hereof, to the extent necessary to
satisfy such bid.
(ii) After each sale, Mortgagee, Trustee or an officer of any court empowered
to do so shall execute and deliver to the purchaser or purchasers at such sale a good and
sufficient instrument or instruments granting, conveying, assigning and transferring all
right, title and interest of Mortgagor in and to the property and rights sold and shall
receive the proceeds of said sale or sales and apply the same as specified in the Note.
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Any and all statements of fact or other recitals made in any of such instruments given by
Trustee or Mortgagee shall be taken as conclusive and binding against all persons as to
evidence of the truth of the facts so stated and recited. Each of Trustee and Mortgagee is
hereby appointed the true and lawful attorney -in -fact of Mortgagor, which appointment is
irrevocable and shall be deemed to be coupled with an interest, in Mortgagor's name and
stead, to make all necessary conveyances, assignments, transfers and deliveries of the
property and rights so sold, Mortgagor hereby ratifying and confirming all that said
attorney or such substitute or substitutes shall lawfully do by virtue thereof.
(f) Mortgagee's Judicial Remedies. Mortgagee, or Trustee upon written request of
Mortgagee, may proceed by suit or suits, at law or in equity, to enforce the payment of the Debt
to foreclose the liens and security interests of this Mortgage as against all or any part of the
Mortgaged Property, and to have all or any part of the Mortgaged Property sold under the
judgment or decree of a court of competent jurisdiction.
(g) Mortgagee's Right to Appointment of Receiver Mortgagee, as a matter of right
and (i) without regard to the sufficiency of the security for repayment of the Debt and without
notice to Mortgagor, (ii) without any showing of insolvency, fraud, or mismanagement on the
part of Mortgagor, (iii) without the necessity of filing any judicial or other proceeding other than
the proceeding for appointment of a receiver, and (iv) without regard to the then value of the
Mortgaged Property, shall be entitled to the appointment of a receiver or receivers for the
protection, possession, control, management and operation of the Mortgaged Property, including
(without limitation), the power to collect the Rents, enforce this Mortgage and, in case of a sale
and deficiency, during the full statutory period of redemption (if any), whether there be a
redemption or not, as well as during any further times when Mortgagor, except for the
intervention of such receiver, would be entitled to collection of such Rents. Mortgagor hereby
irrevocably consents to the appointment of a receiver or receivers. Any receiver appointed
pursuant to the provisions of this subsection shall have the usual powers and duties of receivers
in such matters.
(h) Other Rights. Mortgagee shall have and may exercise any and all other rights and
remedies which Mortgagee may have at law or in equity, or by virtue of any of the Loan
Documents, or otherwise. For payment of the Debt, Mortgagee may resort to any collateral
securing the payment of the Debt in such order and manner as Mortgagee may elect.
(1) Discontinuance of Remedies. In case Mortgagee shall have proceeded to invoke
any right, remedy, or recourse permitted under the Loan Documents and shall thereafter elect to
discontinue or abandon same for any reason, Mortgagee shall have the unqualified right so to do
and, in such event, Mortgagor and Mortgagee shall be restored to their former positions with
respect to the Debt, the Loan Documents, the Mortgaged Property or otherwise, and the rights,
remedies, recourses and powers of Mortgagee shall continue as if same had never been invoked.
(j) Remedies Cumulative. All rights, remedies, and recourses of Mortgagee granted
in the Note, this Mortgage and the other Loan Documents, any other pledge of collateral, or
otherwise available at law or equity: (i) shall be cumulative and concurrent; (ii) may be pursued
separately, successively, or concurrently against Mortgagor, the Mortgaged Property, or any one
or more of them, at the sole discretion of Mortgagee; (iii) may be exercised as often as occasion
therefore shall arise, it being agreed by Mortgagor that the exercise or failure to exercise any of
same shall in no event be construed as a waiver or release thereof or of any other right, remedy,
or recourse; (iv) shall be nonexclusive; (v) shall not be conditioned upon Mortgagee exercising
or pursuing any remedy in relation to the Mortgaged Property prior to Mortgagee bringing suit to
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recover the Debt; and (vi) in the event Mortgagee elects to bring suit on the Debt and obtains a
judgment against Mortgagor prior to exercising any remedies in relation to the Mortgaged
Property, all liens and security interests, including the lien of this Mortgage, shall remain in full
force and effect and may be exercised thereafter at Mortgagee's option.
(k) Waivers. Mortgagor hereby irrevocably and unconditionally waives and releases:
(i) all benefits that rnight accrue to Mortgagor by virtue of any present or future law exempting
the Mortgaged Property from attachment, levy or sale on execution or providing for any
appraisement, valuation, stay of execution, exemption from civil process, redemption, or
extension of time for payment; (ii) all notices of any Event of Default except as expressly
provided herein or of Trustee's exercise of any right, remedy, or recourse provided for under the
Loan Documents; and (iii) any right to a marshalling of assets, a sale in inverse order of
alienation or any other right to direct in any manner, the order of sale of any of the Mortgaged
Property.
(1) Application of Proceeds. The proceeds from any sale, lease, or other disposition
made pursuant to this Mortgage, or the proceeds from the surrender of any insurance policies
pursuant hereto, or any Rents collected by Mortgagee from the Mortgaged Property, or the Tax
and Insurance Escrow Fund or the Replacement Escrow Fund or sums received pursuant to
Section 7 hereof, or proceeds from insurance which Mortgagee elects to apply to the Debt
pursuant to Section 3 hereof, shall be applied by Trustee, or by Mortgagee, as the case may be, to
the Debt in the following order and priority: (1) to the payment of all expenses of advertising,
selling, and conveying the Mortgaged Property or part thereof, and/or prosecuting or otherwise
collecting Rents, proceeds, premiums or other sums including reasonable attorneys' fees and a
reasonable fee or commission to Trustee, not to exceed five percent of the proceeds thereof or
sums so received; (2) to the remainder of the Debt as follows: first, to the remaining accrued but
unpaid interest, second, to the matured portion of principal of the Debt, and third, to prepayment
of the unmatured portion, if any, of principal of the Debt applied to installments of principal in
inverse order of maturity; (3) the balance, if any or to the extent applicable, remaining after the
full and final payment of the Debt to the holder or beneficiary of any inferior liens covering the
Mortgaged Property, if any, in order of the priority of such inferior liens (Trustee and Mortgagee
shall hereby be entitled to rely exclusively on a commitment for title insurance issued to
determine such priority); and (4) the cash balance, if any, to the Mortgagor. The application of
proceeds of sale or other proceeds as otherwise provided herein shall be deemed to be a payment
of the Debt like any other payment. The balance of the Debt remaining unpaid, if any, shall
remain fully due and owing in accordance with the terms of the Note and the other Loan
Documents.
24. Right of Inspection. Mortgagee and its agents shall have the right to enter and
inspect the Mortgaged Property during normal business hours upon reasonable notice.
25. Securitv Agreement. This Mortgage is both a real property mortgage or deed of
trust and a "security agreement" within the meaning of the Uniform Commercial Code as
adopted and enacted by the State or States where any of the Mortgaged Property is located
("Uniform Commercial Code"). The Mortgaged Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in nature, of Mortgagor
in the Mortgaged Property. Mortgagor by executing and delivering this Mortgage has granted
and hereby grants to Mortgagee, as security for the Debt, a security interest in the Mortgaged
Property to the full extent that the Mortgaged Property may be subject to the Uniform
Commercial Code (said portion of the Mortgaged Property so subject to the Uniform
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Commercial Code being called in this paragraph the "Collateral Mortgagor hereby agrees
with Mortgagee to execute and deliver to Mortgagee, in form and substance satisfactory to
Mortgagee, such financing statements and such further assurances as Mortgagee may from time
to time, reasonably consider necessary to create, perfect, and preserve Mortgagee's security
interest herein granted. Notwithstanding the foregoing or anything else herein to the contrary,
Mortgagor hereby authorizes Mortgagee to file all UCC Financing Statement forms, including
but not limited to, form UCC -1 and form UCC -3 covering the Collateral, along with all
attachments thereto with any and all filing entities that Mortgagee deemed necessary, at
Mortgagor's expense; moreover, Mortgagor authorizes the Mortgagee to file one or more
financing or continuation statement, and amendments thereto relating to all or any part of the
Collateral without the signature of Mortgagor, where permitted by law. Mortgagor shall
immediately give written notice to Mortgagee of any and all changes to Mortgagor's name,
organizational status, state of organization, organization's chief operating office, and any other
change that would affect the validity of any financing statement filing or perfection of lien or
security interest. This Mortgage shall also constitute a "fixture filing" for the purposes of the
Uniform Commercial Code. All or part of the Mortgaged Property are or are to become fixtures.
Information concerning the security interest herein granted may be obtained from the parties at
the addresses of the parties set forth in the first paragraph of this Mortgage. If an Event of
Default shall occur, Mortgagee, in addition to any other rights and remedies which they may
have, shall have and may exercise immediately and without demand, any and all rights and
remedies granted to a secured party upon default under the Uniform Commercial Code,
including, without limiting the generality of the foregoing, the right to take possession of the
Collateral or any part thereof', and to take such other measures as Mortgagee may deem
necessary for the care, protection and preservation of the Collateral. Upon request or demand of
Mortgagee, Mortgagor shall at its expense assemble the Collateral and make it available to
Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on
demand any and all expenses, including legal expenses and attorneys' fees, incurred or paid by
Mortgagee in protecting the interest in the Collateral and in enforcing the rights hereunder with
respect to the Collateral. Any notice of sale, disposition or other intended action by Mortgagee
with respect to the Collateral sent to Mortgagor in accordance with the provisions hereof at least
five (5) days prior to such action, shall constitute commercially reasonable notice to Mortgagor.
The proceeds of any disposition of the Collateral, or any part thereof, may be applied by
Mortgagee to the payment of the Debt in such priority and proportions as Mortgagee in its
discretion shall deem proper. If Mortgagee shall require the filing or recording of additional
Uniform Commercial Code forms or continuation statements, Mortgagor shall, promptly after
request, execute, where applicable, file and record such Uniform Commercial Code forms or
continuation statements as Mortgagee shall deem necessary, and shall pay all expenses and fees
in connection with the filing and recording thereof, it being understood and agreed, however,
that no such additional documents shall increase Mortgagor's obligations under the Note, this
Mortgage and the other Loan Documents. Mortgagor hereby irrevocably appoints Mortgagee as
its attorney -in -fact, coupled with an interest, to file with the appropriate public office on its
behalf any financing or other statements signed only by Mortgagee, as Mortgagor's attorney -in-
fact, in connection with the Collateral covered by this Mortgage. Notwithstanding the foregoing,
Mortgagor shall appear and defend in any action or proceeding which affects or purports to
affect the Mortgaged Property and any interest or right therein, whether such proceeding effects
title or any other rights in the Mortgaged Property (and in conjunction therewith, Mortgagor
shall fully cooperate with Mortgagee in the event Mortgagee is a party to such action or
proceeding).
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26. Assignment of Leases and Rents. The Leases and Rents are assigned to
Mortgagee on the following terms, covenants and conditions:
(a) Warranties Regarding Leases and Rents. Mortgagor warrants to Mortgagee that
(a) Mortgagor is the sole owner of the entire lessor's interest in the Leases; (b) the Leases are
valid, enforceable and in full force and effect and have not been altered, modified or amended in
any manner whatsoever except as disclosed to Mortgagee; (c) neither the Leases nor the Rents
reserved in the Leases have been assigned or otherwise pledged or hypothecated; (d) none of the
Rents have been collected for more than one (1) month in advance; (e) the premises demised
under the Leases have been completed and Lessees under the Leases have accepted the same and
have taken possession of the same on a rent paying basis except as explicitly identified on the
certified rent roll delivered by Mortgagor to Mortgagee; and (f) there exist no offsets or defenses
to the payment of any portion of the Rents.
(b) Covenants Regarding Leases and Rents. Mortgagor covenants with Mortgagee
that Mortgagor (i) shall observe and perform all the obligations imposed upon the lessor under
the Leases and shall not do or permit to be done anything to impair the value of the Leases as
security for the Debt; (ii) shall promptly send to Mortgagee copies of all notices of default which
Mortgagor shall receive under the Leases; (iii) shall not collect any Rents more than one (1)
month in advance; (iv) shall not execute any other assignment of lessor's interest in the Leases or
the Rents; (v) shall execute and deliver at the request of Mortgagee all such further assurances,
confirmations and assignments in connection with the Mortgaged Property as Mortgagee shall
from time to time require; (vi) shall not enter into any new lease of the Mortgaged Property
without the prior written consent of Mortgagee, and in any event, any new Lease shall be on a
form of lease approved by Mortgagee; (vii) shall deliver to Mortgagee, upon request, tenant
estoppel certificates from each commercial Lessee at the Mortgaged Property in form and
substance reasonably satisfactory to Mortgagee (provided, however, that Mortgagor shall not be
required to deliver such certificates more frequently than two [2] tines in any calendar year);
and (viii) shall deliver to Mortgagee, at Mortgagee's request, executed copies of all Leases now
existing or hereafter arising.
(c) Enforcement of Existing Leases. Except to the extent that Mortgagor is acting in
the ordinary course of business as a prudent operator of property similar to the Mortgaged
Property, Mortgagor (i) shall promptly send to Mortgagee copies of all notices of default which
Mortgagor shall send to Lessees under the Leases; (ii) shall enforce all of the terms, covenants
and conditions contained in the Leases upon the part of the Lessees thereunder to be observed or
performed, short of termination thereof; (iii) shall not alter, modify or change the terms of the
Leases without the prior written consent of Mortgagee, or cancel or terminate the Leases or
accept a surrender thereof or take any other action which would effect a merger of the estates
and rights of, or a termination or diminution of the obligations of, Lessees thereunder; provided
however, that any Lease may be canceled if at the time of cancellation thereof a new Lease is
entered into on substantially the same terms or more favorable terms as the canceled Lease;
(iv) shall not alter, modify or change the terms of any guaranty of any of the Leases or cancel or
terminate any such guaranty without the prior written consent of Mortgagee; (v) shall not
consent to any assignment of or subletting under the Leases not in accordance with their terms,
without the prior written consent of Mortgagee; and (vi) shall not waive, release, reduce,
discount or otherwise discharge or compromise the payment of any of the Rents to accrue under
the Leases.
(d) New Leases. Mortgagor further covenants with Mortgagee that (i) all Leases
shall be written on the standard form of lease which has been approved by Mortgagee; (ii) no
21
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material changes may be made to the Mortgagee- approved standard lease without the prior
written consent of Mortgagee; (iii) all renewals of Leases and all proposed Leases shall provide
for rental rates comparable to existing local market rates and shall be arm's length transactions;
(iv) all Leases shall provide that (A) they are subordinate to the Mortgage and any other
indebtedness now or hereafter secured by the Mortgaged Property, (B) Lessees agree to attorn to
Mortgagee (such attomment to be effective upon Mortgagee's acquisition of title to the
Mortgaged Property), (C) Lessees agree to execute such further evidences of attornment as
Mortgagee may from time to time request, (D) the attonnnent of Lessees shall not be terminated
by foreclosure, (E) Mortgagee may, at Mortgagee's option, accept or reject such attornment, and
(F) Lessees agree to furnish, two times in any calendar year, as Mortgagee may request, a
certificate signed by Lessee confirming and containing such factual certifications and
representations deemed reasonably appropriate by Mortgagee; and (v) all new Leases shall be
subject to the prior approval of Mortgagee.
(e) Present Assignment. This assignment constitutes a present, absolute assignment
and not an assignment for additional security only. Mortgagor agrees to execute and deliver to
Mortgagee such additional instruments, in form and substance satisfactory to Mortgagee, as may
hereinafter be requested by Mortgagee to further evidence and confirm said assignment.
Mortgagee is hereby granted and assigned by Mortgagor the right to enter the Mortgaged
Property for the purpose of enforcing its interest in the Leases and the Rents, this assignment
constituting a present, absolute and unconditional assignment of the Leases and Rents.
Nevertheless, subject to the terms of this paragraph, Mortgagee grants to Mortgagor a revocable
license to operate and manage the Mortgaged Property and to collect the Rents. Mortgagor shall
hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Debt for
use in the payment of such sums. Upon an Event of Default, the license granted to Mortgagor
herein shall automatically be revoked and Mortgagee shall immediately be entitled to receive
and apply all Rents, whether or not Mortgagee enters upon and takes control of the Mortgaged
Property.
(t) Rights of Mortuagee. Upon or at any time after an Event of Default, Mortgagee
may, at its option, without waiving such Event of Default, without notice and without regard to
the adequacy of the security for the Debt, either in person or by agent, with or without bringing
any action or proceeding, or by a receiver appointed by a court, take possession of the
Mortgaged Property and have, hold, manage, lease and operate the Mortgaged Property on such
terms and for such period of time as Mortgagee may deem proper and either with or without
taking possession of the Mortgaged Property in its own name, demand, sue for or otherwise
collect and receive all Rents, including those past due and unpaid with full power to make from
time to time all alterations, renovations, repairs or replacements thereto or thereof as may seem
proper to Mortgagee and may apply the Rents to the payment of the following in such order and
proportion as Mortgagee in its sole discretion may determine, any law, custom or use to the
contrary notwithstanding: (i) all expenses of managing, operating, maintaining and securing the
Mortgaged Property as Mortgagee may deem necessary or desirable and all expenses of the
Mortgaged Property; and (ii) the Debt. For purposes of this and the preceding paragraph,
Mortgagor grants to Mortgagee its irrevocable power of attorney, coupled with an interest, to
take any and all of the aforementioned actions and any or all other actions designated by
Mortgagee for the proper management and preservation of the Mortgaged Property.
(g) No Liability of Mortgagee. Mortgagee shall not be liable for any loss sustained
by Mortgagor resulting from Mortgagee's failure to let the Mortgaged Property after an Event of
Default or from any other act or omission of Mortgagee in managing the Mortgaged Property
after an Event of Default unless such loss is caused by the willful misconduct and bad faith of
22
Mortgagee. Mortgagee shall not be obligated to perform or discharge any obligation, duty or
liability under the Leases or under or by reason of this assignment and Mortgagor shall, and
hereby agrees, to indemnify Mortgagee for, and to hold Mortgagee harness from, any and all
liability, loss or damage which may or might be incurred under the Leases or under or by reason
of this assignment and from any and all claims and demands whatsoever, including the defense
of any such claims or demands which may be asserted against Mortgagee. This assignment shall
not operate to place any obligation or liability for the control, care, management or repair of the
Mortgaged Property upon Mortgagee; nor shall it operate to make Mortgagee responsible or
liable for any waste committed on the Mortgaged Property, including without limitation the
presence of any Hazardous Substances, (as defined in the Environmental Liabilities Agreement
executed by Mortgagor to Mortgagee of even date herewith), or for any negligence in the
management, upkeep, repair or control of the Mortgaged Property resulting in loss or injury or
death to any Lessee, licensee, employee or stranger. Nothing herein contained shall be construed
as constituting Mortgagee a "mortgagee in possession" in the absence of the taking of actual
possession of the Mortgaged Property by Mortgagee.
(h) Notice to Lessees. Mortgagor hereby authorizes and directs Lessees named in the
Leases or any other or future Lessees or occupants of the Mortgaged Property "Lessee[s]
upon receipt from Mortgagee of written notice to the effect that Mortgagee is then the holder of
the Note and that an Event of Default exists thereunder or under the other Loan Documents to
pay over to Mortgagee all Rents and to continue so to do until otherwise notified by Mortgagee,
without further notice or consent of Mortgagor and regardless of whether Mortgagee has taken
possession of the Mortgaged Property, and Lessees may rely upon any written statement
delivered by Mortgagee to Lessees without any obligation or right to inquire as to whether such
default actually exists and notwithstanding any notice from or claim of Mortgagor to the
contrary.
(i) Security Deposits. All security deposits of Lessees, whether held in cash or any
other form, shall be treated by Mortgagor as trust funds, shall not be commingled with any other
funds of Mortgagor and, if cash, shall be deposited by Mortgagor in one or more segregated
accounts at such commercial or savings bank or banks as is reasonably satisfactory to
Mortgagee. Following the occurrence and during the continuance of any Event of Default,
Mortgagor shall, upon Mortgagee's request, if permitted by applicable legal requirements, turn
over to Mortgagee the security deposits (and any interest theretofore earned thereon) with
respect to all or any portion of the Mortgaged Property, to be held by Mortgagee subject to the
terms of the Leases.
27. Indemnification. In addition to any other indemnifications provided in any of the
Loan Documents, Mortgagor shall protect, defend, indemnify and save harmless Mortgagee, its
subsidiaries, affiliates, persons controlling or under common control with Mortgagee, their
agents, officers, directors, shareholders, employees, servants, consultants, representatives and
their respective successors and assigns and Trustee (collectively, the "Indemnified Parties
from and against all liabilities, obligations, claims, demands, damages, penalties, causes of
action, losses, fines, costs and expenses (including without limitation reasonable attorneys' fees
and expenses), imposed upon or incurred by or asserted against any of the Indemnified Parties by
reason of (a) ownership of this Mortgage, the Mortgaged Property or any interest therein or
receipt of any Rents; (b) any accident, injury to or death of persons or loss of or damage to
property occurring in, on or about the Mortgaged Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (c) any failure on
the part of Mortgagor to perform or comply with any of the terms of this Mortgage; (d) any
23
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"00024
000641
representation or warranty made in the Note, this Mortgage or the other Loan Documents being
false or misleading in any respect as of the date such representation or warranty was made;
(e) any claim by brokers, finders or similar persons claiming to be entitled to a commission in
connection with any Lease or other transaction involving the Mortgaged Property or any part
thereof under any legal requirement or any liability asserted against Mortgagee with respect
thereto; and (1) the claims of any lessee to any portion of the Mortgaged Property or any person
acting through or under any lessee or otherwise arising under or as a consequence of any Lease.
Any amounts payable to any of the Indemnified Parties by reason of the application of this
paragraph shall be secured by this Mortgage and shall become immediately due and payable and
shall bear interest at the Default Rate specified in the Note from the date loss or damage is
sustained by any of the Indemnified Parties until paid. The obligations and liabilities of
Mortgagor under this Section 27 (A) shall survive for a period of one (1) year following any
release of this Mortgage executed by Mortgagee and satisfaction of the loan evidenced by the
Loan Documents, and (B) shall survive the transfer or assignment of this Mortgage, the entry of
a judgment of foreclosure, sale of the Mortgaged Property by nonjudicial foreclosure sale, or
delivery of a deed in lieu of foreclosure (including, without limitation, any transfer by Mortgagor
of any of its rights, title and interest in and to the Mortgaged Property to any party, whether or
not affiliated with Mortgagor).
28. Trustee. Trustee may resign by the giving of notice of such resignation in writing
to Mortgagee. If Trustee shall die, resign, or become disqualified from acting in the execution of
this trust, or if, for any reason, Mortgagee shall prefer to appoint a substitute trustee or multiple
substitute trustees, or successive substitute trustees or successive multiple substitute trustees, to
act instead of the aforenamed Trustee, Mortgagee shall have full power to appoint a substitute
trustee (or, if preferred, multiple substitute trustees) in succession who shall succeed (and if
multiple substitute trustees are appointed, each of such multiple substitute trustees shall succeed)
to all the estates, rights, powers, and duties of the aforenamed Trustee. Such appointment may be
executed by any authorized agent of Mortgagee, and if such Mortgagee be a corporation and
such appointment be executed in its behalf by any officer of such corporation, such appointment
shall be conclusively presumed to be executed with authority and shall be valid and sufficient
without proof of any action by the board of directors or any superior officer of the corporation.
Mortgagor hereby ratifies and confirms any and all acts which the aforenamed Trustee, or his
successor or successors in this trust, shall do lawfully by virtue hereof. If multiple substitute
Trustees are appointed, each of such multiple substitute Trustees shall be empowered and
authorized to act alone without the necessity of the joinder of the other multiple substitute
trustees, whenever any action or undertaking of such substitute trustees is requested or required
under or pursuant to this Mortgage or applicable law. Any substitute Trustee appointed pursuant
to any of the provisions hereof shall, without any further act, deed, or conveyance, become
vested with all the estates, properties, rights, powers, and trusts of its or his predecessor in the
rights hereunder with like effect as if originally named as Trustee herein; but nevertheless, upon
the written request of Mortgagee or of the substitute Trustee, the Trustee ceasing to act shall
execute and deliver any instrument transferring to such substitute Trustee, upon the trusts herein
expressed, all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to act,
and shall duly assign, transfer and deliver any of the property and moneys held by such Trustee
to the substitute Trustee so appointed in the Trustee's place. No fees or expenses shall be
payable to Trustee, except in connection with a foreclosure of the Mortgaged Property or any
part thereof or in connection with the release of the Mortgaged Property following payment in
full of the Debt.
24
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000642
29. Notices. Unless oral notice is expressly permitted hereunder any notice, demand,
statement, request or consent made hereunder shall be in writing and shall be deemed to be
received by the addressee on the first (1st) business day after such notice is tendered to a
nationally- recognized overnight delivery service or on the day such notice is deposited with the
United States postal service first class certified mail, return receipt requested, in either instance,
addressed to the address, as set forth above, of the party to whom such notice is to be given, or to
such other address as Mortgagor or Mortgagee, as the case may be, shall in like manner
designate in writing.
30. Authority. (a) Mortgagor (and the undersigned representative of Mortgagor, if
any) has full power, authority and right to execute, deliver and perform its obligations pursuant
to this Mortgage, and to encumber the Mortgaged Property pursuant to the terms hereof; and (b)
Mortgagor represents and warrants that Mortgagor is not a "foreign person" within the meaning
of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended and the related
Treasury Department regulations.
31. Sole Discretion of Mortgagee. Wherever pursuant to this Mortgage, Mortgagee
exercises any right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Mortgagee, the decision of Mortgagee to approve or disapprove or to decide that
arrangements or terms are satisfactory or not satisfactory shall be in the sole discretion of
Mortgagee and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
32. Ton- Waiver; No Oral Change. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of this Mortgage.
This Mortgage may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Mortgagor or Mortgagee, but only
by an agreement in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.
33. Liability; Successors and Assigns. If Mortgagor consists of more than one
person, the obligations and liabilities of each such person hereunder shall be joint and several.
Subject to the provisions hereof requiring Mortgagee's consent to any transfer of the Mortgaged
Property, this Mortgage shall be binding upon and inure to the benefit of Mortgagor and
Mortgagee and their respective successors and assigns forever.
34. Inapplicable Provisions: Headings. etc.; Counterparts. (a) If any term, covenant
or condition of this Mortgage is held to be invalid, illegal or unenforceable in any respect, this
Mortgage shall be construed without such provision, (b) the headings and captions of various
paragraphs of this Mortgage are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof and (c) this
Mortgage may be executed in any number of counterparts each of which shall be deemed to be
an original but all of which when taken together shall constitute one agreement.
35. Definitions. Unless the context clearly indicates a contrary intent or unless
otherwise specifically provided herein, words used in this Mortgage may be used
interchangeably in singular or plural form and the word "Mortgagor" shall mean "each
Mortgagor and any subsequent owner or owners of the Mortgaged Property or any part thereof
25
,A)026
000643
or any interest therein," the word "Mortgagee" shall mean "Mortgagee and any subsequent
holder of the Note," the word "Debt" shall mean "indebtedness under the Note and other Loan
Documents and any other evidence of indebtedness secured by this Mortgage the word
"person" shall include an individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, and any other entity, and the words "Mortgaged
Property" shall include any portion of the Mortgaged Property and any interest therein and the
words "attorneys' fees" shall include any and all attorneys' fees, paralegal and law clerk fees,
including, but not limited to, fees at the pre -trial, trial and appellate levels incurred or paid by
Mortgagee in protecting its interest in the Mortgaged Property and Collateral and enforcing its
rights hereunder. If the Mortgagor and the Maker of the Note are not the same, the word
Mortgagor" shall include such Maker. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.
26
36. Homestead. Mortgagor hereby waives and renounces all homestead and
exemption rights provided by the constitution and the laws of the United States and of any state,
in and to the Premises as against the collection of the Debt, or any part hereof.
37. Assignments. Mortgagee shall have the right to assign or transfer its rights under
this Mortgage and the other Loan Documents, including, without limitation, the right to assign or
transfer its rights to a servicing agent. Any assignee or transferee shall be entitled to all the
benefits afforded Mortgagee under this Mortgage and the other Loan Documents.
38. Survival of Obligations; Survival of Warranties and Representations. Each and
all of the covenants and obligations of Mortgagor (other than warranties and representations
contained herein) shall survive the execution and delivery of the Loan Documents and shall
continue in full force and effect until the Debt shall have been paid in full; provided, however,
that nothing contained in this paragraph shall limit the obligations of Mortgagor except as
otherwise set forth herein. In addition, any and all warranties and representations of Mortgagor
contained herein shall survive the execution and delivery of the Loan Documents and (i) shall
continue for a period of one (1) year following any release of this Mortgage executed by
Mortgagee and satisfaction of the loan evidenced by the Loan Documents, and (ii) shall survive
the transfer or assignment of this Mortgage, the entry of a judgment of foreclosure, sale of the
Mortgaged Property by non judicial foreclosure or deed in lieu of foreclosure (including, without
limitation, any transfer of the Mortgage by Mortgagee of any of its rights, title and interest in and
to the Mortgaged Property to any party, whether or not affiliated with Mortgagee). Any and all
representations, warranties, covenants and agreements made in this Mortgage (and/or in other
Loan Documents) shall survive any investigation or inspection made by or on behalf of
Mortgagee.
39. Covenants Running with the Land. All covenants, conditions, warranties,
representations and other obligations contained in this Mortgage and the other Loan Documents
are intended by Mortgagor, Mortgagee and Trustee to be, and shall be construed as, covenants
running with the Mortgaged Property until the lien of this Mortgage has been fully released by
Mortgagee.
40. Governing Law: Jurisdiction. THIS MORTGAGE AND THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
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000644
THE LAWS OF THE STATE IN WHICH THE MORTGAGED PROPERTY IS LOCATED
(WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. MORTGAGOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY COURT OF COMPETENT
JURISDICTION LOCATED IN THE STATE IN WHICH THE MORTGAGED PROPERTY IS
LOCATED IN CONNECTION WITH ANY PROCEEDING OUT OF OR RELATING TO
THIS MORTGAGE.
41. Time. Time is of the essence in this Mortgage and the other Loan Documents.
42. No Third Party Beneficiaries: Relationship of Parties. The provisions of this
Mortgage and the other Loan Documents are for the benefit of Mortgagor, Mortgagee and
Trustee and shall not inure to the benefit of any third party (other than any successor or assignee
of either Trustee or Mortgagee). The relationship of Mortgagee and Mortgagor is solely that of
debtor and creditor, and Mortgagee has no fiduciary or other special relationship with the
Mortgagor, and no term or condition of any of the Loan Documents shall be construed to be
other than that of debtor and creditor. Mortgagor represents and acknowledges that the Loan
Documents do not provide for any shared appreciation rights or other equity participation
interest.
43. Trustee Provisions., In the event that this Mortgage operates as a mortgage, the
provisions of this Mortgage which pertain to the Trustee shall be of no force or effect.
44. Subrogation. If any or all of the proceeds of the Note have been used to
extinguish, extend or renew any indebtedness heretofore existing against the Mortgaged
Property, then, to the extent of such funds so used, Mortgagee shall be subrogated to all of the
rights, claims, liens, titles, and interests existing against the Mortgaged Property heretofore held
by, or in favor of, the holder of such indebtedness and such former rights, claims, liens, titles,
and interests, if any, are not waived but rather are continued in full force and effect in favor of
Mortgagee and are merged with the liens and security interests created herein as cumulative
security for the repayment of the Debt and the performance and discharge of any and all
obligations arising hereunder or otherwise. In the event a portion of the Debt cannot be lawfully
secured against the Mortgaged Property by this Mortgage under applicable laws, it is agreed that
the payments first made on the Debt shall be applied to the discharge of that portion of the Debt
which cannot be so lawfully secured.
Mortgagor has executed this instrument the day and year first above written.
MORTGAGOR:
ROCKY MOUNTAIN ROGUES, INC.,
a Wyo g Corporation
BY:
N
27
By:
Name
Titl
Re -a
V r�
now dgement Date: I I
THE STATE OF WYOMING
COUNTY OF TETON
061108.011
STATE OF
COUNTY OF \a ��v
This instrument was acknowledged
as Q .(;Q
a Wyoming Corporation, on behalf
MEUSSA CAPENER NOTARY PUBUC
County of
Teton
State of
Wyoming
My Commission Expires May 19, 2012
28
V'
/"N• Y.o
H. UTTER FAFiY PUisLIL
'his instrument was acknowledged before me on the O day of
__This E. 2008, by JAMES H. BLITTERSDORF, as PRESIDENT of ROCKY
MOUNTAIN ROGUES, INC., a Wyoming Corporation, on behalf of said corporation.
Notary Public, State of Wyoming
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000645
before me on the \L day of
by V\ S t
of ROCKY MOUNTAIN ROGUES, INC.,
of said corporation.
A
1, 4L.,3 3
Notary Public, St to of
My commission expires: Vtk 1Z.