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ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT
RECEIVED
LINOOLN COUNTY CLERK
03 DEC -!., P 't ?: 16
JEAIINE
THIS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (this "Mortgage") is made this/~day of October, 2003, from MID PLAINS
PIZZA, INC., a Kansas corporation ("Borrower"), for the benefit of BANK OF AMERICA,
N.A., a national banking association (together with its successors and assigns, "Lender" or
"Holder").
ARTICLE 1
Definitions; Granting Clauses; Secured Indebtedness
Section 1.1. Principal Secured. This Mortgage secures the aggregate principal amount of
THREE HUNDRED TWENTY-FIVE THOUSAND AND NO/100 and 00/100 Dollars
($325,000.00), plus such additional amounts as Lender may from time to time advance pursuant
to the terms and conditions of this Mortgage and not met by Borrower, with respect to an
obligation secured by a lien or encumbrance prior to the lien of this Mortgage or for the
protection of the lien of this Mortgage, together with interest thereon.
Section 1.2. Definitions. In addition to other terms defined herein, each of the following
terms shall have the meaning assigned to it, such definitions to be applicable equally to the
singular and the plural forms of such terms and to all genders:
"Borrower": Mid Plains Pizza, Inc., a KanSas corporation, whose address is P.O. Box
2438, Seven West Parkway Blvd., Liberal, Kansas 67905 and its permitted successors and
assigns.
"Lender": Bank of America, N.A., a national banking association, its successors and
assigns, whose address is 100 North Broadway, Wichita, Kansas 67202.
"Promissory_ Note": Collectively, all notes made by Borrower and payable to the order of
Lender including, without limitation, '(i) the Promissory Note dated of even date herewith payable
by Borrower to Lender in the principal amount of $1,750,000.00 and (ii) the Amended and
Restated Promissory Note dated of even date herewith payable by Borrower to Lender in the
principal amount of $3,441,275.92.
Section 1.3. Granting Clause. In consideration of the provisions of this Mortgage and the
sum ofTEN DOLLARS ($10.00) cash in hand paid and .other good and Valuable consideration
the receipt and sufficiency of which are acknowledged by the Borrower, Borrower does hereby
GRANT, BARGAIN, SELL, ALIEN, DEMISE, RELEASE, CONVEY, WARRANT and
MORTGAGE unto Lender, its successors and assign, the following: (a) the real property
described in Exhibit A which is attached hereto and incorporated herein by reference (the
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"Land") together with: (i) any and all buildings, structures, improvements, alterations or
appurtenances now or hereafter situated or to be situated on the Land (collectively the
"Improvements"); and (ii) all right, title and interest of Borrower, now owned or hereafter
acquired, in and to (1) all streets, roads, alleys, easements, rights-of-way, licenses, rights of
ingress and egress, vehicle parking rights and public places, existing or proposed, abutting,
adjacent, used in connection with or pertaining to the Land or the Improvements; (2) any strips or
gores between the Land and abutting or adjacent properties; (3) all options to purchase the Land
or the Improvements or any portion thereof or interest therein, and any greater estate in the Land
or the Improvements; and (4) all water and water rights, timber, crops and mineral interests on or
pertaining to the Land (the Land, Improvements and other rights, titles and interests referred to in
this clause (a) being herein sometimes collectively called the "Premises"); (b) all fixtures,
equipment, systems, machinery, furniture, furnishings, appliances, inventory, goods, building and
construction materials, supplies, and articles of personal property, of every kind and character,
tangible and intangible, now owned or hereafter acquired by Borrower, which are now or
hereafter attached to or situated in, on or about the Land or the Improvements, or used in or
necessary to the complete and proper planning, development, use, occupancy or operation
thereof, or acquired (whether delivered to the Land or stored elsewhere) for use or installation in
or on the Land or the Improvements, and all renewals and replacements of, substitutions for and
additions to the foregoing (the properties referred to in this clause (b) being herein sometimes
collectively called the "Accessories," all of which are hereby declared to be permanent
accessions to the Land); (c) all (i) plans and specifications for the Improvements; (ii) Borrower's
rights, but not liability for any breach by Borrower, under all commitments (including any
commitments for financing to pay any of the Secured Indebtedness, as defined below), insurance
policies, contracts and agreements for. the design, construction, operation or inspection of the
Improvements and other contracts and general intangibles (including but not limited to
trademarks, trade names, goodwill and symbols) related to the Premises Or the Accessories or the
operation thereof; (iii) deposits (including but not limited to Borrower's rights in tenants'
security deposits, deposits with respect to utility services to the Premises, and any deposits or
reserves hereunder or under any other Loan Documents (hereinafter defined) for taxes, insurance
or otherwise), rebates or refunds of impact fees or other taxes, assessments or charges, money,
accounts, instruments, documents, notes and chattel paper arising from or by virtue of any
transactions related to the Premises' or the Accessories; (iv) permits, licenses, franchises,
certificates, development rights, commitments and rights for utilities, and other rights and
privileges obtained in connection with the Premises or the Accessories; (v) leases, rents,
royalties, bonuses, issues, profits, revenues and other benefits of the Premises and the
Accessories (without derogation of Article 3 hereof); (vi) oil, gas and other hydrocarbons and
other minerals produced from or allocated to the Land and all products processed or obtained
therefrom, and the proceeds thereof; and (vii) engineering, accounting, title, legal, and other
tectmical or business data concerning the Property which are in the possession of Borrower or in
which Borrower can otherwise grant a security interest; and (d) all (i) proceeds (cash or non-
cash) of or arising from the properties, rights, titles and interests referred to above in this Section
1.3, including but not limited to proceeds of any sale, lease or other disposition thereof, proceeds
of each policy of insurance relating thereto (including premium refundS), proceeds of the taking
thereof or of any rights appurtenant thereto, including change of grade of streets, curb cuts or
other rights of access, by condemnation, eminent domain or transfer in lieu thereof for public or
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quasi-public use under any law, and proceeds arising out of any damage thereto; and (ii) other
interests of every kind and character which Borrower now has or hereafter acquires in, to or for
the benefit of the properties, rights, titles and interests referred to above in this Section 1.3 and all
property used or useful in connection therewith, including but not limited to fights of ingress and
egress and remainders, reversions and reversionary rights or interests; and if the estate of
Borrower in any of the property referred to above in this Section 1.3 is a leasehold estate, this
conveyance shall include, and the lien and security interest created hereby shall encumber and
extend to, all other or additional title, estates, interests or rights which are now owned or may
hereafter be acquired by Borrower in or to the property demised under the lease creating the
leasehold estate;
T° HAVE AND TO HOLD the foregoing rights, interests and properties, and all rights, estates,
powers and privileges appurtenant thereto (herein collectively called the "Property"), unto
Lender, and its successors and assigns, forever, subject to the terms, provisions and conditions
herein set forth, to secure the obligations of Borrower under the Note and Loan Documents (as
hereinafter defined) and all other indebtedness and matters defined as "Secured Indebtedness" in
Section 1.5 of this Mortgage.
Section 1.4. Security Interest. Borrower hereby grants to Holder (as hereinafter defined)
a security interest in all of the Property which constitutes personal property or fixtures (herein
sometimes collectively called the "COllateral'') to secure the obligations of Borrower under the
Note and Loan Documents and all other indebtedness and matters defined as Secured
Indebtedness in Section 1.5 of this Mortgage. In addition to its rights hereunder or otherwise,
Holder shall have all of the rights of a secured party under the Wyoming Uniform Commercial
Code, or under the Uniform Commercial Code in force in any other state to the extent the same is
applicable law.
Section 1.5. Secured Indebtedness, Note, Loan Documents, Other Obligations. This
Mortgage is made to secure and enforce the payment and performance of the following
promissory notes, obligatiOns, indebtedness, duties and liabilities and all renewals, extensions,
supplements, increases, and modifications thereof in whole or in part from time to time
(collectively the "Secured Indebtedness"): (a) the Promissory Note and all other notes given in
substitution therefor or in modification, supplement, increase, renewal or extension thereof, in
:whole or in part (such note or notes, whether one or more, as from time to time renewed,
extended, supplemented, increased or modified and all other notes given in substitution therefor,
or in modification, renewal or extension thereof, in whole or in part, being hereinafter called the
"Note", and Lender, or the subsequent holder at the time in question of the Note or any of the
Secured Indebtedness, as hereinafter defined, being herein collectively called "H. oldeW); (b) all
indebtedness, liabilities, duties, covenants, promises and other obligations whether joint or
several, direct or indirect, fixed or contingent, liquidated or unliquidated, and the cost of
collection of all such amounts, owed by Borrower to Holder now or hereafter incurred or arising
pursuant to or permitted by the provisions of the Note, this Mortgage, or any other document now
or hereafter evidencing, governing, guaranteeing, securing or otherwise executed in connection
with the loan evidenced by the Note, including but not limited to any loan or credit agreement,
letter of credit or reimbursement agreement, Interest Rate Protection Agreement or other
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156
agreement between Borrower and Holder, or among Borrower, Holder and any other party or
parties, pertaining to the repayment or use of the proceeds of the loan evidenced by the Note (the
Note, this Mortgage and such other documents, as they or any of them may have been or may be
from time to time renewed, extended, supplemented, increased or modified, being herein
sometimes collectively called the "Loan Documents"); and (c) all other loans and future advances
made by Holder to Borrower and all other debts, obligations and liabilities of Borrower of every
kind and character now or hereafter existing in favor of Holder, whether direct or indirect,
primary or secondary, joint or several, fixed or contingent, secured or unsecured, and whether
originally payable to Holder or to a third party and Subsequently acquired by Holder, it being
contemplated that Borrower may hereafter become indebted to Holder for such further debts,
obligations and liabilities; provided, however, and notwithstanding the foregoing provisions of
this clause (c), this Mortgage shall not secure any such other loan, advance, debt, obligation or
liability with respect to which Holder is by applicable law prohibited from obtaining a lien on
real estate nor shall this clause (c) operate or be effective to constitute or require any assumption
or payment by any person, in any way, of any debt of any other person to the extent that the same
would violate or exceed the limit Provided in any applicable usury or other law. "Interest Rate
Protection Agreement" means any interest rate swap agreement, International Swaps and
Derivatives Association, Inc. (ISDA) Master Agreement, or any similar agreement or
arrangement now existing or hereafter entered into by Borrower and Lender in connection with
the loan evidenced by the Note to hedge the risk of variable interest rate volatility or fluctuations
of interest rates, as any such agreement or arrangement may be modified, supplemented, and in
effect from time to time.
ARTICLE 2
Representations~ Warranties and Covenants
Section 2.1. Borrower represents, warrants, and covenants as follows:
(a) Payment and Performance. Borrower will make due and punctual payment of the
Secured Indebtedness. Borrower will timely and properly perform and comply with all of the
covenants, agreements, and conditions imposed upon it by this Mortgage and the other Loan
Documents and will not permit a default to occur hereunder or thereunder. Time shall be of the
essence 'in this Mortgage.
(b) Title and Permitted Encumbrances. Borrower has, in Borrower's own right, and
Borrower covenants to maintain, lawful, good and marketable title to the Property, is lawfully
seized and possessed of the Property and every part thereof, and has the right to convey the same,
free and clear of all liens, charges, claims, security interests, and encumbrances except for (i) the
matters, if any, set forth under the heading "Permitted Encumbrances" in Exhibit B hereto, which
are Permitted Encumbrances only to the extent the same are valid and subsisting and affect the
Property, (ii) the liens and security interests evidenced by this Mortgage,. (iii) statUtory liens for
real estate taxes and assessments on the Property which are not yet delinquent, (iv) other liens
and security interests (if any) in favor of Lender, and (v) any Leases (as hereinafter defined) made
in accordance with this Mortgage and the assignment of such Leases pursuant to Section 3.1
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[ : :· : .,e,,,/,:., · "~:,- j
'57
hereof (the matters described in the foregoing clauses (i), (ii), (iii), (iv), and (V) being herein
called the "Permitted Encumbrances"). Borrower, and Borrower's successors and assigns, will
warrant generally and forever defend title to the Property, subject as aforesaid, to Lender and its
successors and assigns, against the claims and demands of all persons claiming or to claim the
same or any part thereof. Borrower will punctually paY, perform, observe and keep all covenants,
obligations and conditions in or pursuant to any Pemfitted Encumbrance and will not modify or
pemfit modification of any Permitted Encumbrance without the prior written consent of Holder.
Inclusion of any matter as a Permitted Encumbrance does not constitute approval or waiver by
Holder of any existing or future violation or other breach thereof by Borrower, by the Property or
Otherwise. If any right or interest of Holder in the Property or any part thereof shall be
endangered or questioned or shall be attacked directly or indirectly, and Holder, (whether or not
named as a party to legal proceedings with respect thereto), is hereby authorized and empowered
to take such steps as in its discretion may be proper for the defense of any such legal proceedings
or the protection of such right or interest of Holder, including but not limited to the employment
of independent counsel, the prosecution or defense of litigation, and the compromise or discharge
of adverse claims. All expenditures so made of every kind and character shall be a demand
obligation (which obligation Borrower hereby promises to pay) owing by Borrower to Holder,
and the Holder shall be subrogated to all rights of the person receiving such payment.
(C) Taxes and Other Impositions. Borrower will pay, or cause to be paid, all taxes,
assessments and other charges or levies imposed upon or against or with respect to the Property
or the ownership, use, occupancy or enjoyment of any portion thereof, or any utility service
thereto, as the same become due and payable, including but not limited to all real estate taxes
assessed against the Property or any part thereof, and shall deliver promptly to Holder such
evidence of the paYment thereof as Holder may require.
(d) Insurance. Borrower shall obtain and maintain at Borrower's sole expense: (1)
mortgagee title insurance iSsued to Holder covering the Premises as required by Holder without
exception for mechanics' liens; (2) all-risk insurance with respect to all insurable Property,
against loss or damage by fire, lightning, windstorm, explosion, hail, tornado and such hazards as
are presently included in so-called "all-risk" coverage and against such other insurable hazards as
Holder may require, in an amount not less than 100% of the full replacement cost, including the
cost of debris removal, without deduction for depreciation and sufficient to prevent Borrower and
Holder from becoming a coinsurer, such insurance to be in builder's risk (non-reporting) form
during and with respect to any construction on the Premises; (3) if and to the extent any portion
of the Premises is in a special flood hazard area, a flood insurance policy in an amount equal to
the lesser of the principal face amount of the Note or the maximum amount available; (4)
comprehensive general public liability insurance, on an "occurrence" basis, for the benefit of
Borrower and Holder as named insureds; (5) statutory workers' compensation insurance with
respect to any work on or about the Premises; and (6) such other insurance on the Property as
may from time to time be required by Holder (including but not limited to business interruption
insurance, boiler and machinery insurance, earthquake insurance, terrorism and war risk
insurance) and against other insurable hazards or casualties which at' the time are' cOmmonly
insured against in the case of premises similarly situated, due regard being given to the height,
tYPe, construction, location, use and occupancy of buildings and improvements. All insurance
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policies shall be issued and maintained by insurers, in amounts, with deductibles, and in form
satisfactory to Holder, and shall require not less than thirty (]0) days' prior written notice to
Holder of any cancellation or change of coverage. All insurance policies maintained, or caused
to be ma]ntained, by Borrower with respect to the Property, except for public liability insurance,
shall provide that each such policy shall be primary without right of contribution from any other
insurance that may be carried by Borrower or Holder and that all of the provisions thereof, except
the limits of liability, shall operate in the same manner as if there were a separate policy covering
each insured. If any insurer which has issued a policy of title, hazard, liability or other insurance
required pursuant to this Mortgage or any other Loan Document becomes insolvent or the subject
of any bankruptcy, receivership or similar proceeding or if in Holder's reasonable opinion the
financial responsibility of such insurer is'or becomes inadequate, Borrower shall, in each instance
promptly upon the request of Holder and at Borrower's expense, obtain and deliver to Holder a
like policy (or, if and to the extent permitted by Holder, a certificate of insurance) issued by
another insurer, which insurer and policy meet the requirements of this Mortgage or such other
Loan Document, as the case may be. Without limiting the discretion of Holder with respect to.
required endorsements to insurance policies, all such policies for loss of or damage to the
?roperty shall contain a standard mortgagee clause (without contribution) naming Holder as
mortgagee with loss proceeds payable to Holder notwithstanding (i) any act, failure to act or
negligence of or Violation of any warranty, declaration or condition contained in any such policy
by any named insured; (ii) the occupation or use of the ?roperty for purposes more hazardous
than permitted by the terms of any such policy[ (iii) any foreclosure or other action by Holder
under the Loan Documents~ or (iv) any change in title to or ownership of the Property or any'
portion thereof, such proceeds to be held for application as provided in the Loan Documents.
The originals of each initial insurance policy (or to the extent permitted by Holder, a copy of the
original policy and a satisfactory certificate of insurance) shall be delivered to Holder at the time
of execution of this Mortsage, with premiums fully paid, and each renewal or substitute policy
(or certificate) shall be delivered to Holder, with premiums fully paid, at least ten (10) days
before the termination of the policy it renews or replaces. Borrower shall pay all premiums on
policies required hereunder as they become due and payable and promptly deliver to Holder
evidence satisfactory to Holder of the timely payment thereof. If any loss occurs at any time
when Borrower has failed to perform Borrower's covenants and agreements in this paragraph,
'Ho]der shall nevertheless be entitled to the benefit of all insurance covering the loss and held by
or for Borrower, to the same extent as if it had been made payable to Holder. Upon any.
foreclosure hereof or transfer of title to the ?roperty in extinguishment of the who]e or any part of
the Secured Indebtedness, all of Borrower's right, title and interest in and to the insurance
policies referred to in this Section (including unearned premiums) and all proceeds payable
thereunder shall thereupon vest in the purchaser at foreclosure or other such transferee, to the
extent permissible under such policies. Holder shall have the right (but not the obligation) to
make proof of loss for, settle and adjust any claim under, and receive the proceeds of, all
insurance for loss of or damage to the Property, and the expenses incurred by Holder in the
adjustment and collection of insurance proceeds shall be a part of the Secured Indebtedness and
shall be due and payable to Holder on demand. Holder shall not be, under any circumstances,
liable or responsible for failure to collect or exercise diligence in the collection of any of such
proceeds or for the obtaining, maintaining or adequacy of any insurance or for failure to see to
the proper application of any amount paid over to Borrower. Any such proceeds received by
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, 59
Holder shall, after deduction therefrom of all reasonable expenses actually incurred by Holder,
including attorneys' fees, at Holder's option be (1)released to Borrower, or (2) applied (upon
compliance with such terms and conditions as may be required by Holder) to repair or
restoration, either partly or entirely, of the Property so damaged, or (3) applied to the payment of
the Secured Indebtedness in such order and manner as Holder, in its sole discretion, may elect,
whether or not due. In any event, the unpaid portion of the Secured Indebtedness shall remain in
full force and effect and the payment thereof shall not be excused. Borrower shall at all times
comply with the requirements of the insurance policies required hereunder and of the issuers of
such policies and of any board of fire underwriters or similar body as applicable to or affecting
the Property.
(e) Reserve for Insurance, Taxes and Assessments. Upon request of Holder, to secure
certain of Borrower's obligations in paragraphs (c) and (d) above, but not in lieu of. such
obligations, Borrower will deposit with Holder a sum equal to real estate taxes, assessments and
charges (which charges for the purpose of this paragraph shall include without limitation any
recurring charge which could result in a lien against the Property) against the Property for the
current year and the premiums for such policies of insurance for the current year, all as estimated
by Holder and prorated to the end of the calendar month following the month during which
Holder's request is made, and thereafter will deposit with Holder, on each date when an
installment of principal and/or interest is due on the Note, sufficient funds (as estimated from
time to time by Holder) to permit Holder to pay at least fifteen (15) days prior to the due date
thereof, the next maturing real estate taxes, assessments and charges and premiums for such
policies of insurance. Holder shall have the right to rely upon tax information furnished by
applicable taxing authorities in the payment of such taxes or assessments and shall have no
obligation to make any protest of any such taxes or assessments. Any excess over the amounts
required for such purposes shall be held by Holder for future use, applied to any Secured
Indebtedness or refunded to Borrower, at Holder's option, and any deficiency in such funds so
deposited shall be made up by Borrower upon demand of Holder. All such funds so deposited
shall bear no interest, may be mingled with the general funds of Holder and shall be applied by
Holder toward the payment of such taxes, assessments, charges and premiums when statements
therefor are presented to Holder by Borrower (which statements shall be presented by Borrower
to Holder a reasonable time before the applicable amount is due); provided, however, that, if a
default shall have occurred hereunder, such funds may at Holder's option be applied to the
payment of the Secured Indebtedness in the order determined by Holder in its sole discretion, and
that Holder may (but shall have no obligation) at any time, in its discretion, apply all or any part
of such funds toward the payment of any such taxes, assessments, charges or premiums which are
past due, together with any penalties or late charges with respect thereto. The conveyance or
transfer of Borrower's interest in the Property for any reason (including without limitation the
foreclosure of a subordinate lien or security interest or a transfer by operation of law) shall
constitute an assignment or transfer of Borrower's interest in and rights to such funds held by
:Holder under this paragraph but subject to the rights of Holder hereunder.
(f) Condemnation. Borrower shall notify Holder immediately of any tlu:eatened or
pending proceeding for condemnation affecting the Property or arising out of damage to the
Property, and Borrower shall, at Borrower's expense, diligently prosecute any such proceedings.
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Holder shall hav~ the right (but not the obligation) to participate in any such proceeding and to be
represented by counsel of its own choice. Holder shall be entitled to receive all sums which may
be awarded or become payable to Borrower for the condemnation of the Property, or any part
thereof, for public or quasi-public use, or by virtue of private sale in lieu thereof, and any sums
which may be awarded or become payable to Borrower for injury or damage to the Property.
Borrower shall, promptly upon request' of Holder, execute such additional assignments and other
documents as may be necessary from time to time to permit such participation and to enable'
Holder to collect and receipt for any such sums. All such sums are hereby assigned to Holder,
and shall, after deduction therefrom of all reasonable expenses actually incurred by Holder,
including attorneys' fees, at Holder's option be (1) released to Borrower, or (2) applied (upon
compliance with such terms and conditions as may be required by Holder) to repair or restoration
of the Property so affected, or (3) applied to the payment of the Secured Indebtedness in such
order and manner as Holder, in its sole discretion, may elect, whether or not due. In any event
the unpaid portion of the Secured Indebtedness shall remain in full force and effect and the
payment thereof shall not be excused. Holder shall not be, under any circumstances, liable or
responsible for failure to collect or to exercise diligence in the collection of any such sum or for
failure to see to the proper application of any amount paid over to Borrower. Holder is hereby
authorized, in the name of Borrower, to execute and deliver valid acquittances for, and to appeal.
from,, any such award, ~judgrnent or decree, All costs and expenses (including but not limited to
attorneys' fees) incurred by Holder in connection with any condemnation shall be a demand
obligation owing by Borrower (which Borrower hereby promises to pay) to Holder pursuant to
this Mortgage.
(g) Compliance with Legal Requirements. The Property and the use, operation and
maintenance thereof and all activities thereon do and shall at all times comply with all applicable
Legal Requirements (hereinafter defined). Borrower shall not, by act or omission, permit any
building or other' improvement not subject to the lien of this Mortgage to rely on the Property or
any interest therein to fulfill any requirement of any Legal Requirement. No improvement upon
or use of any part of the Property constitutes a nonconforming use under any zoning law or
sinfilar law or ordinance. Borrower has obtained and shall 'preserve in force all reqUisite zoning,
utility, building, health, enviromnental and operating permits from the governmental authorities
having jurisdiction over the Property.
If Borrower 'receives a notice or claim from any person that the Property, or any use, activity,
operation or maintenance thereof or thereon, is not in compliance with any Legal Requirement,
Borrower will promptly furnish a copy of such notice or claim to Holder. Borrower has received
no notice and has no knowledge of any such noncompliance. As used in this Mortgage: (i) the
term "Legal Requirement" means any Law (hereinafter defined), agreement, covenant,
restriction, easement or condition (including, without limitation of the foregoing, any condition
or requirement imposed by any insurance or surety company), as any of the same now exists or
may be changed or amended or come into effect in the future; and (ii) the term "Law" means any
federal, state or local law, statute, ordinance, code, rule, regulation, license, permit, authorization,
decision, order, injunction or decree, domestic or foreign.
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(h) Maintenance, Repair and Restoration. Borrower Will keep the Property in first
class order, repair, operating condition and appearance, causing all necessary repairs, renewals,
replacements, additions and improvements to be promptly made, and will not allow any of the
Property to be misused, abused or wasted or to deteriorate.
(i) No Other Liens. Borrower will not, without the prior written consent of Holder,
create, place or permit to be created or placed, or through any act or failure to act, acquiesce in
the placing of, or allow to remain, any deed of trust, mortgage, voluntary or involuntary lien,
whether statutory, constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the Property, or any part
thereof, other than the Permitted Encumbrances, regardless of whether the same are expressly or
otherwise subordinate to the lien or security interest created in this Mortgage, and should any of
the foregoing become attached hereafter in any manner to any part of the Property without the
prior written consent of Holder, Borrower will cause the same to be promptly discharged and
released.
(j) Operation of Property. Borrower will operate the Property in a good and
workmanlike manner and in accordance with all Legal Requirements and will pay all fees or
charges of any kind in connection therewith. Borrower will keep the Property occupied so as not
to impair the insurance carded thereon.
(k) [Intentionally Omitted]
(1) Status of Borrower; Suits and Claims; Loan Documents. If Borrower is a
corporation, partnership, limited liability company, or other legal entity, Borrower is and will
continue to be (i) duly organized, validly existing and in good standing under the laws of its state
of organization, (ii) authorized to do business in, and in good standing in, each state in which the
Property is located, and (iii) possessed of all requisite power and authority to carry on its business
and to own and operate the Property. Each Loan Document executed by Borrower has been duly
authorized, executed and delivered by Borrower, and the obligations thereunder and the
performance thereof by Borrower in accordance with their terms are and will continue to be
within Borrower's power and authority (without the necessity ofjoinder or consent of any other
person), are not and will not be in contravention of any Legal Requirement or any other
document or agreement to which Borrower or the Property is subject, and do not and will not
result in the creation of any encumbrance against any assets or properties of Borrower, or any
other person liable, directly or indirectly, for any of the Secured Indebtedness, except as
expressly contemplated by the Loan Documents. There is no suit, action, claim, investigation,
inquiry, proceeding or demand pending (or, to Borrower's knowledge, threatened) against
Borrower or against any other person liable directly or indirectly for the Secured Indebtedness or
which affects the Property (including, without limitation, any which challenges or otherwise
pertains to Borrower's title to the Property) or the validity, enforceability or priority of any of the
Loan Documents. There is no judicial or administrative action, suit or proceeding pending (or, to
Borrower's knowledge, threatened) against Borrower, or against any other person liable directly
or indirectly for the Secured Indebtedness, except as has been disclosed in writing to Holder in
connection with the loan evidenced by the Note. The Loan Documents constitute legal, valid and
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PAGE 9
binding obligations of Bo~ower enforceable in accordance with their te~s, eXcept as the
enforceability thereof may be limited by Debtor Relief Laws (hereinafter defined) and except as
the availability of certain remedies may be limited by general principles of equity. Borrower is
not a "foreign person" within the meaning of the Internal Revenue COde of 1986, as amended,
Sections 1445 and 7701 (i.e. Borrower is not a non-resident alien, foreign corporation, foreign
partnerShip, foreign trust or foreign estate as those terms are defined therein and in any
regulations promulgated thereunder). The loan evidenced by the Note is solely for business
and/or investment purposes, and is not intended for personal, family, household or agricultural
purposes. Borrower further warrants that the proceeds of the Note shall be used for commercial
purposes and stipulates that the loan evidenced by the Note shall be construed for all purposes as
a commercial loan. Borrower will not cause or permit any change to be made in its name,
identity, or corporate or partnership structure, unless Borrower shall have notified Holder of such
change prior to the effective date of such change, and shall have first taken all action required by
Holder for the purpose of further perfecting or protecting the lien and security interest of Holder
in the Property. Borrower's principal place of business and chief executive office, and the place
where Borrower keeps its books and records concerning the Property, has for the preceding four
months been and will continue to be (unless Borrower notifi~es Holder of any change in writing
prior to the date of such change) the address of Borrower set forth at'the end of this Mortgage.
(m) Hazardous Waste. Borrower hereby represents and warrants to Lender that, to the
best of Borrower's knowledge, after due inquiry and investigation: (a) except as disclosed to Lender
in the environmental report provided to Lender, the Mortgaged Property is not in violation of any
local, state, federal or other governmental authority, statute, ordinance, code, order, decree, law,
rule or regulation pertaining to or imposing liability or standards of conduct concerning
environmental regulation, contamination or cleanup including, the Wyoming Environmental
Quality Act, W.S.. 35-11-101 et. seq., the Comprehensive Environmental Response, Compensation
and Liability Act, as amended ("CERCLA"), the Resource Conservation and Recovery Act, as
amended ("RCRA"), and any state superlien and environmental cleanup statutes (collectiVely,
"Environmental Laws"); (b) the Mortgaged Property is not subject to any private or governmental
lien or judicial or administrative notice or action relating to hazardous and/or toxic, dangerous
and/or regulated, substances, wastes, materials, pollutants or contaminants, petroleum, petroleum
by-products, friable asbestos, tremolite, anthlophylie or actinolite or polychlorinated biphenyls
(including, without limitation, any raw materials which include hazardous constituents) and any
other substances or materials which are included under or regulated by Environmental Laws
(Collectively, "Hazardous Substances"); (c) except as disclosed to Lender in the environmental
report specifically referred to in an addendum (if any) attached hereto, no Hazardous Substances are
or have been discharged, generated, treated, disposed of or stored on, incorporated in, or removed
or transported from the Mortgaged Property otherwise than in compliance with all Environmental
Laws; and (d) except as disclosed to Lender in the environmental report specifically referred to in
an addendum (if any) attached hereto, no underground storage tanks exist on any of the Mortgaged
Property.
Notwithstanding anything previouSly diSClosed to Lender, so long as Borrower owns or is in
possession of the Mortgaged Property, Borrower shall keep or cause the Mortgaged Property to be
kept fi'ee from Hazardous Substances and in compliance with all Environmental Laws and shall
WYOMING MORTGAGE
PAGE 10
notify Lender Within five (5) business days after Borrower becomes aware of the existence of any
Hazardous Substances on, or any alleged or actual violation of any Environmental Laws with
respect to, the Mortgaged Property. Borrower shall remove any such Hazardous Substances and/or
cure any such violations, as applicable, as required by law, promptly after Borrower beComes aware
of same, at Borrower's sole expense. Additionally, Borrower shall obtain, and implement an
asbestos-containing material operations and maintenance program for all identified and presumed
asbestos'containing materials on or in the Mortgaged Property. NOthing herein shall prevent
Borrower fi.om recovering such expenses from any other party (excluding Lender) that may be
liable for Such removal or cure. If, at any time and from time to time while this Mortgage is in
effect, Lender has reasonable cause to believe that Borrower has violated, or pemfitted any
violations, under this subparagraph (m), then Borrower shall provide, at Borrower's sole expense,
an inspection or audit of the Mortgaged ProPerty prepared by a licensed hydrogeologist or licensed
environmental engineer approved by Lender indicating the presence or absence of Hazardous
Substances on, or violation of Environmental Laws at the Mortgaged Property. If Borrower fails to
provide such inspection or audit within thirty (30) days after such request, Lender may order same,
and Borrower hereby grants to Lender and its employees and agents access to the Mortgaged
Property to undertake such inspection or audit. The cost of such inspection or audit shall be
immediately due and payable, shall be added to the Debt and shall bear interest at the Default Rate
fi.om the date expended by Lender until paid by Borrower. The ObligationS and liabilities of
Borrower under this subparagraph (m) shall survive any termination, satisfaction, or assignment of
this Mortgage and the exercise by Lender of any of its rights or remedies hereunder, including but
not limited to, the acquisition of the Mortgaged Property by foreclosure or a conveyance in lieu of
foreclosure.
(n) Further AssUrances. Borrower will, promptly on request of Holder, (i) correct any
defeCt, error or omission which may be discovered in the contents, execution or acknowledgment
of this Mortgage or any other Loan Document; (ii)'execute, acknowledge, deliver~ procure and
record and/or file such further documents (including, without limitation, further deeds of trust,
security agreements, financing statements, continuation statements, and assignments of rents or
leases) and do such further acts as may be necessary, desirable or proper to carry out more
effectively the purposes of this Mortgage and the other Loan Documents, to more fully identify
and subject to the liens and security interests hereof any Property intended to be covered hereby
(including specifically, but without limitation, any renewals, additions, substitutions,
replacements, or appurtenances to the Property) or as deemed advisable by Holder to protect the
lien or the security interest hereunder against the rights or interests of third persons; and (iii)
provide such certificates, documents, reports, information, affidavits and other instruments and
do such further acts as may be necessary, desirable or proper in the reasonable determination of
Holder to enable Holder to comply with the requirements or requests of any agency having
jurisdiction over Holder or any examiners of such agencies with respect to the indebtedness
secured hereby, BorroWer or the Property. Borrower shall pay all costs connected with any of the
foregoing,, which shall be a demand obligation owing by Borrower (which Borrower hereby
promises to pay) to Holder pursuant to this Mortgage.
(o) Fees and Expenses. Without limitation of. any other provision of this Mortgage or
of any other Loan Document and to the extent not prohibited by applicable law, Borrower will
WYOMING MORTGAGE
PAGE 11
:: :~:'. 'i ?'
pay, and will reimburse to Holder on demand to the extent paid by Holder: (i) all appraisal fees,
filing, registration and recording fees, recordation, transfer and other taxes, brokerage fees and
commissions, abstract fees,, title search or examination fees, title policy and endorsement
premiums and fees, uniform commercial code search fees, judgment and tax lien search fees,
escrow fees, attorneys' fees, architect fees, engineer fees, construction consultant fees,
environmental inspection fees, survey fees, and all other costs and expenses of every character
incurred by Borrower or Holder in connection with the preparation of the Loan Documents, the
evaluation, closing and funding of the loan evidenced by the Loan Documents, and any and all
amendments m~d supplements to this Mortgage, the Note or any other Loan Documents or any
approval, consent, waiver, release or other matter requested or required hereunder or thereunder,
or otherWise .attributable or chargeable to Borrower as owner of the Property; and (ii) all costs
and expenses, including attorneys' fees and expenses, incurred or expended in connection with
the exercise of any right or remedy, or the defense of any right or remedy or the enforcement of
any obligation of Borrower, hereunder or under any Other Loan Document.
(p) Indemnification.
(i) Borrower will indemnify and hold harmless Holder frOm and against, and
reimburse Holder on demand for, any and all Indemnified Matters (hereinafter defined). For
purposes of this paragraph (p), the terms "Holder" shall include Holder and any persons owned
or controlled by, owning or controlling, or under common control or affiliated with Holder and
the directors, offiCers, 'Partners, employees, attorneys, agents and representatives of Holder.
Without limitation, the foregoing indemnities shall apply to each indemnified person with respect
to matters which in whole or in part are caused by or arise out of the negligence of such (and/or
any other) indemnified person. However, such indemnities shall not apply to a particular
indenmified person to the extent that the subject of the indenmification is caused by Or arises out
of the gross negligence or willful misconduct of that indemnified person. Any amount to be paid
under this paragraph (p) by Borrower to Holder shall be a demand obligation owing by Borrower
(which Borrower hereby promises to pay) to Holder pursuant to this Mortgage. Nothing in this
paragraph, elsewhere in this MOrtgage or in any other Loan Document shall limit or impair any
rights or remedies of Holder (including without limitation any rights of contribution or
indemnification) against Borrower or any other person under any other provision of this
Mortgage, any other Loan Document, any other agreement or any applicable Legal Requirement.
(ii) As used herein, the term "indemnified Matters" means any and all claims,
demands, liabilities (including strict liability), losses, damages (including consequential
damages), causes of action, judgments, penalties, fines, costs and expenses (including without
limitation, reasonable fees and expenses of attorneys and other professional consultants and
experts, and of' the investigation and defense of any claim, whether or not such claim is
ultimately defeated, and the settlement of any claim or judgment including all value paid or given
in settlement) of every kind, known or unknown, foreseeable or unforeseeable, which may be
imposed upon, asserted against or incurred or paid by Holder at any time and from time to time,
Whenever imposed, asserted or incurred, because of, resulting from, in connection with, or
arising out of any transaction, act, omission, event or circumstance in any way connected with the
Property or with this Mortgage or any other Loan Document, including but not limited to any
WYOMING MORTGAGE
bodily injury or death or property damage occurring in or upon or in the vicinity of the Property,
through any cause whatsoever at any time on or before the Release Date (hereinafter defined) any
act performed or omitted to be performed hereunder or under any other Loan Document, any
breach by Borrower of any repreSentation, warranty, covenant, agreement or condition contained
in this Mortgage or in any other Loan Document, any default as defined herein, any claim under
or with respect to any Lease (hereinafter defined) or arising under the Environmental Agreement.
The term "Release Date" as used herein means the earlier of the following two dates: (i) the date
on which the indebtedness and obligations secured hereby have been paid and performed in full
and this Mortgage has been released, or (ii) the date on which the lien of this Mortgage is fully
and finally foreclosed or a conveyance by deed in lieu of such foreclosure is fully and finally
effective, and possession of the Property has been given' to the purchaser or grantee free of
occupancy and claims to Occupancy by Borrower and Borrower's heirs, devisees, representatives,
successors and assigns; provided, that if such payment, performance, release, foreclosure or
conveyance is challenged, in bankruptcy proceedings or otherwise, the Release Date shall be
deemed not to have occurred until such challenge is rejected, dismissed or withdrawn with
prejudice. The indemnities in this paragraph (p) shall not terminate upon the Release Date or
upon the release, foreclosure or other termination of this Mortgage but will survive the Release
Date, foreclosure of this Mortgage or conveyance in lieu of foreclosure, the repayment of the
Secured Indebtedness, the discharge and release of this Mortgage and the other Loan Documents,
any bankruptcy or other debtor relief proceeding, and any other event whatsoever.
(q) Records and Financial Reports. Borrower will provide to Lender all records and
financial reports as required by the Loan Documents.
(r) Taxes on Note or Mortgage. Borrower will promptly pay all income, franchise
and other taxes owing by BorroWer and any stamp, documentary, recordation and transfer taxes
or other taxes (unless such payment by Borrower is prohibited by law) which may be required to
be paid with respect to the Note, this Mortgage or any other instrument evidencing or securing
any of the Secured Indebtedness. ~
(s) Statement Concerning Note or Mortgage. BorroWer shall at any time and from
time to time furnish within seven (7) days of request by Holder a written statement in such form
as may be required bY Holder stating that (i) the Note, this Mortgage and the other Loan
Documents are valid and binding obligations of Borrower, enforceable against Borrower in
accordance'with their terms; (ii) the unpaid principal balance of the Note; (iii) the date to which
interest on the Note is paid; (iv) the Note, this Mortgage and the other Loan Documents have not
been released, subordinated or modified; and (v) there are no offsets or defenses against the
enforcement of the Note, this Mortgage or any other Loan Document. If any of the foregoing
statements in clauses (i), (iv) and (v) are untrue, Borrower shall, alternatively, specify the reasons
therefor.
Section 2.2. Performance by Holder on Borrower's Behalf. Borrower agrees that, if
Borrower fails to perform any act or to take any action which under any Loan Document
Borrower is required to perform or take, or to pay any money which under any Loan DocUment
Borrower is required to pay, and whether or not the failure then constitutes a default hereunder or
'WYOMING MORTGAGE PAGE 13
thereunder, and whether or not there has occurred any default or defaults hereunder or the
Secured Indebtedness has been accelerated, Holder, in Borrower's name or its own name, may,
but shall not be obligated to, perform or cause to be performed such act or take such action or pay
such money, and any expenses so incurred by Holder and any money so paid by Holder shall be a
demand obligation owing by Borrower to Holder (which obligation Borrower hereby promises to
pay), shall be a part of the indebtedness secured hereby, and Holder, upon making such payment,
shall be subrogated to all of the rights of the person, entity or body politic receiving such
payment. Holder and its designees shall have the right to enter upon the Property at any time and
from time to time for any such purposes. No such payment or performance by Holder shall
waive or cure any default-or waive any right, remedy or recourse of Holder. Any such payment
may be made by Holder in reliance on any statement, invoice or claim without inquiry into the
validity or accuracy thereof. Each amoUnt due and owing by Borrower to Holder pursuant to this
Mortgage shall bear interest, from the date such amount becomes due until paid, at the rate per
annum provided in the Note for interest on past due principal owed on the Note but never in
excess of the maximum nonusurious amount permitted by applicable law, which interest shall be
payable to Holder on demand; and all such amounts, together with such interest thereon, shall
automatically and without notice be a part of the indebtedness secured hereby. The amount and
nature of any expense by Holder hereunder and the time when paid shall be fully established by
the certificate of Holder or any of Holder's officers or agents.
Section 2.3. Absence of Obligations of Holder with Respect to Property.
Notwithstanding anything in this Mortgage to the contrary, including, without limitation, the
definition of "Property" and/or the provisions of Article 3 hereof, (i) to the extent permitted by
applicable law, the Property is composed of Borrower's rights, title and interests therein but not
Borrower's obligations, duties or liabilities pertaining thereto, (ii) Holder neither assumes nor
shall have any obligations, duties or liabilities in connection with any portion of the items
described in the definition of "Property" herein, either prior to or after obtaining title to such
Property, whether by foreclosure sale, the granting of a deed in lieu of foreclosure or Otherwise,
and (iii) Holder may, at any time prior to or after the acquisition of title to any portion of the
Property as above described, advise 'any party in writing as to the extent of Holder's interest
therein and/or expressly disaffirm in writing any rights, interests, obligations, duties and/or
liabilities with respect to such Property or matters related thereto. Without limiting the generality
of the foregoing, it is understood and agreed that Holder shall have no obligations, duties or
liabilities prior to or after acquisition of title to any portion of the Property, as lessee under any
lease or purchaser or seller under any contract or option unless Holder elects otherwise by written
notification.
ARTICLE 3
Assignment of Rents and Leases
Section 3.1. Assignment. Borrower hereby assigns to Holder all Rents (hereinafter
defined) and all of Borrower's rights in and under all Leases (hereinaft'er defined). So long as no
Default (hereinafter defined) has occurred, Borrower shall have a license (which license shall
terminate automatically and without further notice upon the occurrence of a Default) to collect,
WYOMING MORTGAGE
PAGE 14
but not prior to accrual, the Rents under the Leases and, where applicable, subleases, such Rents
to be held in trust for Holder and to otherwise deal with all Leases as permitted by this Mortgage.
Each month, provided no Default has occurred, Borrower may retain such Rents as were
collected that month and held in trust for Holder; provided, however, that all Rents collected by
Borrower shall be applied solely to the ordinary and necessary expenses of owning and operating
the Property or paid to Holder. ~Upon the revocation of such license, all Rents shall be paid
directly to Holder and not through Borrower, all without the necessity of any further action by
Holder, including, without limitation, any action to obtain possession of the Land, Improvements
or any other portion of the Property or any action for the appointment of a receiver. Borrower
hereby authorizes and directs the tenants under the Leases to pay Rents to Holder upon written
demand by Holder, without further consent of Borrower, without any obligation of such tenants
to determine whether a Default has in fact occurred and regardless of whether Holder has taken
possession of any portion of the Property, and the tenants may rely upon any written statement
delivered by Holder to the tenants. Any such payments to Holder shall constitute payments to
Borrower under the Leases, and Borrower hereby irrevocably appoints Holder as its attorney-in-
fact to do all things, after a Default, which Borrower might Otherwise do with respect to the
Property and the Leases thereon, including, without limitation, (i) collecting Rents with or
without suit and applying the same, less expenses of collection, to any of the obligations secured
hereunder or to expenses of operating and maintaining the Property (including reasonable
reserves for anticipated expenses), at the option of the Holder, all in such manner as' may be
determined by Holder, Or at the option of Holder, holding the same as security for the payment of
the Secured Obligations, (ii) leasing, in the name of Borrower, the whole or any part of the
Property which may become vacant, and (iii) employing agents therefor and paying such agents
reasonable cOmpensation for their services. The curing of such Default, unless other Defaults
also then exist, shall entitle Borrower to recover its aforesaid license to do any such things which
Borrower might otherwise do with respect to the Property and the Leases thereon and to again
collect such Rents. The powers and rights granted in this paragraph shall be in addition to the
other remedies herein provided for upon the occurrence of a Default and may be exercised
independently of or concurrently with any of said remedies. Nothing in the foregoing shall be
construed to impose any obligation upon Holder to exercise any power or right granted in this
paragraph or to assume any liability under any Lease of any part of the Property and no liability
shall attach to Holder for failure or inability to collect any Rents under any such Lease. The
assignment contained in this Section shall become null and void upon the release of this
Mortgage. As used herein: (i) "Lease" means each existing or future lease, sublease (to the
extent of Borrower's rights thereunder) or other agreement under the terms of which any person
has or acquires any right to occupy or use the Property, or any part thereof, or interest therein;
and each existing or future guaranty of payment or performance thereunder, and all extensions,
renewals, modifications and replacements of each such lease, sublease, agreement or guaranty;
and (ii) "Rents" means all of the rents, revenue, income, profits and proceeds derived and to be
derived from the Property or arising from the use or enjoyment of any portion thereof or from any
Lease, including but not limited to the proceeds from any negotiated lease termination or buyout
of such Lease, liquidated damages following default under any such Lease, all proceeds payable
under any policy of insurance covering loss of rents.reSulting from untenantability caused by
damage to any part of the Property, all of Borrower's rights to recover monetary amounts from
any tenant in bankruptcy including, without limitation, rights of recovery for use and occupancy
WYOMING MORTGAGE
PAGE lS
::: .;,:.:~;.;.:~:: - ::.
and damage claims arising out of Lease defaults, including rejections, under any applicable
Debtor Relief Law (hereinafter defined), together with any sums of money that may now or at
any time hereafter be or become due and payable to Borrower by virtue of any and all royalties,
overriding royalties, bonuses, delay rentals and any other amount of any kind or character arising
under any and all present and all future oil, gas, mineral and mining leases covering the Property
or any part thereof, and all proceeds and other amounts paid or owing to Borrower under or
pursuant to any and all contracts and bonds relating to the construction or renovation of the
Property.
Section 3.2. Covenants, Representations and Warranties Concerning Leases and Rents.
Borrower covenants, represents and warrants that: (a) Borrower has good title to, and is the
owner of the entire landlord's interest in, the Leases and Rents hereby assigned and authority to
assign them; (b) all Leases are valid and enforceable, and in full force and effect, and are
umnodified except as stated therein; (c) neither Borrower nor any tenant in the Property is in
default under its Lease (and no event has occurred which with the passage of time or notice or
both would result in a default under its Lease) or is the subject of any bankruptcy, insolvency or
similar proceeding; (d) unless otherwise stated in a Permitted Encumbrance, no Rents or Leases
have been or will be assigned, mortgaged, pledged or otherwise encumbered and no other person
has or will acquire any right, title or interest in such Rents or Leases; (e) no Rents have been
waived, released, discoUnted, set off or compromised; (O except as stated in the Leases,
Borrower has not received any funds or deposits from any tenant for which credit has not already
been made on account of accrued Rents; (g) Borrower shall perform all of its obligations under
the Leases and enforce the tenants' obligations under the Leases to the extent enforcement is
prudent under the circumstances; (h) Borrower will not without the prior written consent of
Holder, enter into any Lease after the date hereof, or waive, release, discount, set off,
compromise, reduce or defer any Rent, receive or collect Rents more than one (1) month in
advance, grant any rent-free period to any tenant, reduce any Lease term or waive, release or
otherwise modify any other material obligation under any Lease, renew or extend any Lease
except in accordance with a right of the tenant thereto in such Lease, approve or consent to an
assignment of a Lease or a subletting of any part of the premises covered by a Lease, or settle or
compromise any claim against a tenant under a Lease in.bankruptcy or otherwise; (i) Borrower
will not, without the prior written consent of Holder, terminate or consent to the cancellation or
surrender of any Lease having an unexpired term of one (1) year or more; (j) Borrower will not
execute any Lease except in accordance with the Loan Documents and for actual occupancy by
the tenant thereunder; (k) Borrower shall give prompt notice to Holder, as soon as Borrower first
obtains notice, of any claim, or the commencement of any action, by any tenant or subtenant
under or with respect to a Lease regarding any claimed damage, default, diminution of or offset
against Rent, cancellation of the Lease, or constructive eviction, excluding, however, notices of
default under residential Leases, and Borrower shall defend, at Borrower's expense, any
proceeding pertaining to any Lease, including, if Holder so requests, any such proceeding to
which Holder is a party; (1) Borrower shall as often as requested by Holder, within ten (10) days
of each request, deliver to Holder a complete rent roll of the Property in such detail as Holder
may require and financial statements of the tenants, subtenants and guarantors under the Leases
to the extent available to Borrower, and deliver to such of the tenants and others obligated under
the Leases specified by Holder written notice of the assignment in Section 3.1 hereof in fonn and
wYOMING MORTGAGE
PAGE 16
content satisfactory to Holder; (m) promptly upon request by Holder, BorrOwer shall deliver to
Holder executed originals of all Leases and copies of all records relating thereto; (n) there shall
be no merger of the leasehold estates created by the Leases, with the fee estate of the Land
without the prior written consent of Holder; and (o) Holder may at any time and from time to
time by specific written instrument intended for the purpose, unilaterally subordinate the lien of
this Mortgage to any Lease, without joinder or consent of, or notice to, Borrower, any tenant or
any other person, and notice is hereby given to each tenant under a Lease of such right to
subordinate. No such subordination shall constitute a subordination to any lien or other
encumbrance, whenever arising, or improve the right of any junior lienholder; and nothing herein
shall be construed as subordinating this Mortgage to any Lease.
Section 3.3. Estoppel Certificates. All Leases shall require the tenant to execute and
deliver to Holder an estoppel certificate in form and substance acceptable to Holder within ten
(10) days after notice from the Holder.
Section 3.4. No Liability of Holder. Holder's acceptance of this assignment shall not be
deemed to constitute Holder a "mortgagee in possession," nor obligate Holder to appear in or
defend any proceeding relating to any Lease or to the Property, or to take any action hereunder,
expend any money, incur any expenses, or perform any obligation or liability under any Lease, or
assume any obligation for any deposit delivered to Borrower by any tenant and not as such
delivered to and accepted by Holder. Holder shall not be liable for any injury or damage to
person or property in or about the Property, or for Holder's failure to collect or to exercise
diligence in collecting Rents, but shall be accountable only for Rents that it shall actually receive.
Neither the assignment of Leases and Rents nor enforcement of Holder's rights regarding Leases
and Rents (including collection of Rents) nor possession of the Property by Holder nor Holder's
consent to or approval of any Lease (nor all of the same), shall render Holder liable on any
obligation under or with respect to any Lease or constitute affirmation of, or any subordination
to, any Lease, occupancy, use or option.
If Holder seeks or obtains any judicial relief regarding Rents or Leases, the same shall in no way
prevent the concurrent or subsequent employment of any other appropriate rights or remedies nor
shall same constitute an election of judicial relief for any foreclosure or any other purpose.
Holder neither has nor assumes any obligations as lessor or landlord with respect to any Lease.
The rights of Holder under this Article 3 shall be cumulative of all other rights of Holder under
the Loan Documents or otherwise.
ARTICLE 4
Default
Section 4.1. Events of Default. The occurrence of any one of the following shall be a
default under this Mortgage ("default" or "Default"):
WYOMING MQRTGAGE
PAGE 17
(a) Failure to Pay Indebtedness. Any of the Secured Indebtedness is not paid when
due, regardless of how such amount may have become due, within such cure periods (if any)
provided for in any of the other Loan Documents.
(b) Nonperformance of Covenants. Any covenant, agreement or condition herein or
in any other Loan Document (other than covenants otherwise addressed in another paragraph of
this Section, such as covenants to pay the Secured Indebtedness) is not fully and timely
performed, observed or kept.
(c) Default under other Loan Documents. The occurrence of a Default under any
other Loan Document.
(d) Representations. Any statement, representation or warranty in any of the Loan
Documents, or in any financial statement or any other writing heretofore or hereafter delivered to
Holder in connection with the Secured Indebtedness is false, misleading or erroneous in any
material respect on the date hereof or on the date as of which such statement, representation or
warranty is made.
(e) Bankruptcy Or Insolvency. The owner of the Property or any person liable,
directly or indirectlY, for any of the SeCured Indebtedness (or any general partner or joint venturer
of such owner or other person):
(i) (A) Executes an assignment for the benefit of creditors, or takes any action
in furtherance thereof; or (B) admits in writing its inability to pay, or fails to pay, its debts
generally as they become due; or. (C) as a debtor, files a petition, case, proceeding or other action
pursuant to, or voluntarily seeks the benefit or benefits of, Title 11 of the United States Code as
now or hereafter in effect or any other federal, state or local law, domestic or foreign, as now or
hereafter in effect relating to bankruptcy, insolvency, liquidation, receivership, reorganization,
arrangement, composition, extension or adjustment of debts, or similar laws affecting the rights
of creditors (Title 11 of the United States Code and such other laws being herein called "Debtor
Relief Laws"), or takes any action in furtherance thereof; or (D) seeks the appointment of a
receiver, trustee, custodian or liquidator of the Property or any part thereof or of any significant
portion of its other property; or
(ii) Suffers the filing of a petition, case, proceeding or other action against it as
a debtor under any Debtor Relief Law or seeking appointment of a receiver, trustee, custodian or
liquidator of the property or any part thereof or' of any significant portion of its other property,
and (A)admits, acquiesces in or fails to contest diligently the material allegations thereof, or (B)
the petition, case, proceeding or other action results in entry of any order for relief or order
granting relief sought against it, or (C) in a proceeding under Debtor Relief Laws, the case is
converted from one chapter to another, or (D) fails to have the petition, case, proceeding or other
action permanently dismissed or discharged on or before the earlier of trial thereon or sixty (60)
days next following the date of its filing; or
WYOhlING MORTGAGE
PAGE 18
0 o 17 1
(iii) ConCeals, removes, or permits to be concealed or removed, any part of its
property, with intent to hinder, delay or defraud its creditors or any of them, or makes or suffers a
transfer of any of its proPerty which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or makes any transfer of its property to or for the benefit of a creditor
at a time when other creditors similarly situated have not been paid; or suffers or permits, while
insolvent, any creditor to 'obtain a lien (other than as described in subparagraph (iv) below) upon
any of its property through legal proceedings which are not vacated and such lien discharged
prior to enforcement thereof and in any event within sixty (60) days from the date thereof; or
(iv) Fails to have discharged within a period of ten (10) days any attachment,
sequestration, or similar writ levied upon any of its property; or
(v) Fails to pay immediately any final money judgment against it.
(f) Transfer of the Property. Any sale, lease, conveyance, assignment, pledge,
encumbrance, or transfer of all or any part of the property or any interest therein, voluntarily or
invOluntarily, whether by operation of law or otherwise, except: (i) sales or transfers of items of
the Accessories which have become obsolete or worn beyond practical use and which have been
replaced by adequate substitutes, owned by Borrower, having a value equal to or greater than the
replaced items when neW; and (ii) the grant, in the ordinary course of business, of a leasehold
interest in a part of the ImProvements to a tenant for occupancy, not containing a right or optiOn
to purchase and not in contravention of any provision of this Mortgage or of any other Loan
Document. Holder may, in its sole discretion, waive a default under this paragraph, but it shall
have no obligation to do so, and any waiver may be conditioned upon such one or more of the
following (if any) which Holder may require: the grantee's integrity, reputation, character,
creditworthiness and management ability being satisfactory to Holder in its sole judgment and
grantee executing, prior to such sale or transfer, a written assumption agreement containing such
terms as Holder may require, a principal paydown on the Note, an increase in the rate of interest
payable under the Note; a transfer fee, a modification of the term of the Note, and any other
modification of the Loan Documents which Holder may require. NOTICE - THE DEBT
SECURED HEREBY IS SUBJECT' TO CALL IN FULL OR THE TERMS THEREOF BEING
MODIFIED IN THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY
CONVEYED.
(g) [Intentionally Omitted]
(h) [Intentionally Omitted]
(i) Grant of Easement, Etc. Without the prior written consent of Holder, Borrower
grants any easement or dedication, files any plat, condominium declaration, or restriction, or
otherwise encumbers the Property, or seeks or permits any zoning reclassification or variance,
unless such action is expressly permitted by the Loan Documents or does not affect the Property.
(j) Abandonment. The owner of the Property abandons any of the Property.
WYOMING MORTGAGE
PAGE 19
3.
(k) Default Under Other Lien. A default or event of default occurs under any lien,
security interest or assignment covering the Property or any part thereof (whether or not Holder
has consented, and without hereby implying Holder's consent, to any such lien, security interest
or assignment not created hereunder), or the holder of any such lien, security interest or
assignm~ent declares a default or institutes foreclosure or other proceedings for the enforcement
of its remedies thereunder.
(I) Destruction. The Property is so demolished, destroyed or damaged that, in the
reasonable opinion of Holder, it cannot be restored or rebuilt with available funds to a profitable
condition within a reasonable period of time and in any event, prior to the final maturity date of
the Note.
(m) Condemnation. (i) Any governmental authority shall require, or commence any
proceeding for, the demolition of any building or structure comprising a part of the Premises, or
(ii) there is commenced any proceeding to condemn or otherwise take pursuant to the power of
eminent domain, or a contract for sale or a conveyance in lieu of such a taking is executed which
provides for the transfer of, a material portion of the Premises, including but not limited to the
taking (or transfer in lieu thereof) of any portion which would result in the blockage or
substantial impairment of access or utility service to the Improvements or which would cause the
Premises to fail to comply with any Legal Requirement.
(n) Liquidation, Etc. The liquidation, termination, dissolution, merger, consolidation
or failure to maintain good standing in the State 'of Kansas of the Borrower, any owner of the
Property or any person obligated, to pay any part of the Secured Indebtedness.
(o) Material, Adverse Change. In Holder's reasonable opinion, the prospect of
payment of all or any part of the Secured Indebtedness has been impaired because of a material,
adverse change in the financial condition, results of operations, business or properties of the
Borrower, any owner of the Property or any person liable, directly or indirectly, for any of the
Secured Indebtedness, or of any general partner or joint venturer thereof (if such owner or other
person is a partnership or joint venture).
(p) Enforceability; Priority. Any Loan Document shall for any reason without
Holder's specific written consent cease to be in full force and effect, or shall be declared null and
vOid or unenforceable in whole or in part, or the validity or enforceability thereof, in whole or in
part, shall be challenged or denied by any party thereto other than Holder; or the liens, mortgages.
or security interests of Holder in any of the Property become unenforceable in whole or in part, or
cease to be of the priority herein required, or the validity or enforceability thereof, in whole or in
part, shall be challenged or denied by Borrower or any person obligated to pay any part of the
Secured Indebtedness.
(q) Other Indebtedness. A default or event of default occurs under any document
executed and delivered in connection with any other indebtedness (to Lender or any other person
or entity) of Borrower, the owner of the Property, any person obligated to pay any part of the
Secured Indebtedness, or any person or entity which guaranteeS such other indebtedness.
173
Section 4.2 Notice and Cure. If any provision of this Mortgage or any other Loan
Document provides for Holder to give to Borrower any notice regarding a default or incipient
default, then if Holder shall fail to give such notice to Borrower as provided, the sole and
exclusive remedy of Borrower for such failure shall be to seek appropriate equitable relief to
enforce the agreement to give such notice and to have any acceleration of the maturity of the
Note and the Secured Indebtedness postponed or revoked and foreclosure proceedings in
Connection therewith delayed or terminated pending or upon the curing of such default in the
manner and during the period of time permitted by such agreement, if any, and Borrower shall
have no right to damages or any other type of relief not herein specifically set out against Holder,
all of which damages or other relief are hereby waived by Borrower. Nothing herein or in any
other Loan Document shall operate or be construed to add on or make cumulative any cure or
grace periods specified in any of the Loan Documents.
ARTICLE 5
Remedies
Section 5.1. Certain Remedies. If a Default shall occur, Holder may (but shall have no
obligation to) exercise any one or more of the following remedies, without notice (unless notice
is required by applicable statute):
(a) Acceleration. Holder may at any time and from time to time declare any or all of
the Secured Indebtedness immediately due and payable and such Secured Indebtedness shall
thereupon be immediately due and payable, without presentment, demand, protest, notice of
protest, notice of acceleration or of intention to accelerate or any other notice or declaration of
any kind, all of which are hereby expressly waived by Borrower. Without limitation of the
foregoing, upon the occurrence of a default described in clauses (A), (C) or (D) of subparagraph
(i) of paragraph (d) of Section 4.1, hereof, all of the Secured Indebtedness shall thereupon be
immediately due and payable, without presentment, demand, protest, notice of protest,
declaration or notice of acceleration or intention to accelerate, or any other notice, declaration or
act of any kind, all of which are hereby expressly waived by Borrower.
(b) Enforcement of Assignment of Rents. In addition to the rights of Holder under
Article 3 hereof, prior or subsequent to taking possession of any portion of the Property or taking
any action with respect to such possession, Holder may: (1) collect and/or sue for the Rents in
Holder's own name, give receipts and releases therefor, and after deducting all expenses of
collection, including attorneys' fees and expenses, apply the net proceeds thereof to the Secured
Indebtedness in such manner and order as Holder may elect and/or to the operation and
management of the Property, including the payment of management, brokerage and attorney's
fees and expenses; and (2) require Borrower to transfer all security deposits and record: thereof
to Holder together with original counterparts of the Leases.
WYOMING MORTGAGE
PAGE 21
(c) Foreclosure. In case an event of default shall occur as described in this Mortgage
or in the Promissory Note, the Borrower hereby authorizes and empowers the Holder, and
Holder's successors and assigns to foreclose this Mortgage by advertisement and sale as provided
by the statutes of the State of Wyoming or to foreclose this Mortgage by judicial proceedings and
convey the same to the purchaser in accordance with the statutes of the State of Wyoming, and
out of the moneys arising from such sale to retain all sums secured hereby with interest and all
legal costs and Charges of such foreclosure and actual reasonable attorneys' fees incurred by
Holder (or such other amount as shall be fixed by the Court in the event of judicial foreclosure or
receivership), which costs, charges and fees the Mortgagor agree to pay, which shall include the
entire unpaid balance of the Secured Indebtedness, including interest at the rates and pursuant to
the methods of calculation specified in the Promissory Note, together with all costs of
enforcement and interest at the Past Due Rate (as defined in the Promissory Note) for interest on
past due principal owed on the Promissory Note on any judgment obtained by Holder from and
after the date of any judicial sale of the Property until actual payment is made to Holder of the
full amount due Holder, and an attorneys' reasonable fee for collection, any usage or custom to
the contrary notwithstanding. In the event of a foreclosure, Holder hereby authorizes and
empowers Holder, Holder's successors and assigns, to bring an action against any person who
claims an adverse estate or interest therein for the purpose of determining such adverse estate or
interest, and to pay costs and expenses thereof together with actual attorneys' fees which amOunt
shall be impressed as an additional lien upon the.Property and shall be secured by and collectible
as a part of this Mortgage. In case the proceeds from the foreclosure sale are insufficient to pay
the total indebtedness secured hereby, the Borrower agrees to be bound to pay the unpaid
balance, and the Holder will be entitled to a deficiency judgment. Except to the extent prohibited
by applicable law: (i) the purchaser at any foreclosure sale hereunder may disaffirm any
easement granted or Lease made in violation of any provision of this Mortgage, and may take
immediate possession of the Property free from, and despite 'the terms of, such grant of easement
Or Lease, (ii) Borrower hereby expressly waives any right which Borrower may have to direct the
order in which any of the Property shall be sold in the event of any sale or sales pursuant hereto,
(iii) in the event of a sale or other disposition of any of the Mortgaged Property, and the
execution of a deed or other conveyance pursuant thereto, the recitals in such deed or conveyance
of facts, such as default, the giving of notice of default and notice of sale, terms of sale,
purchaser, payment of purchase money, and any other fact affecting the regularity or validity of
sueh sale or disposition shall be conclusive proof of the truth Of such facts; and any such deed or
conveyance shall be conclusive against all persons as to such facts recited therein, (iv) in case of
any sale in foreclosure of this Mortgage, the Property may be sold in one Parcel and as an entirety
or in such parcels, manner or order as Holder in its sole discretion may elect, and (v) Holder, at
its option, may set aside any declared acceleration of maturity of the Promissory Note,
whereupon the terms and provisions therein stated and the covenants, terms and conditions in
this Mortgage shall revive and continue with the same force and effect as if such acceleration had
not occurred.
(d) Uniform Commercial Code. Without limitation of Holder's rights of enforcement
with respect to the Collateral or any part thereof in accordance with the procedures for
foreclosure of real estate, Holder may exercise its rights of enforcement with respect to the
Collateral or any part thereof under the Wyoming Uniform Commercial Code as amended (or
under the Uniform Commercial Code iu force in any other state to the extent the same is
applicable law) and in conjunction with, in addition to or in substitution for those rights and
remedies: (1) Holder may enter upon Borrower's premises to take possession of, assemble and
collect the Collateral or, to the extent and for those items of the Collateral permitted under
applicable law, to render it unusable; (2) Holder may require Borrower to assemble the Collateral
and make it available at a place Holder designates which is mutually convenient to allow Holder
to take possession or dispose of the Collateral; (3) written notice mailed to Borrower as provided
herein at least ten (10) days prior to the date of public sale of the Collateral or prior to the date
after which private sale of the Collateral will be made shall constitute reasonable notice; (4) in
the event of a foreclosure sale, the Collateral and the other Property may, at the option of Holder,
be sold as a whole; (5) it shall not be necessary that Holder take possession of the Collateral or
any part thereof prior to the time that any sale pursuant to the provisions of this Section is
conducted and it shall not be necessary that the Collateral or any part thereof be present at the
location of such sale; (6) with respect to application of proceeds from disposition of the
Collateral under Section 5.2 hereof, the costs and expenses incident to disposition shall include
the reasonable expenses of retaking, holding, preparing for sale or lease, selling, leasing and the
like and the reasonable attorneys' fees and legal expenses incurred by Holder; (7) any and all
statements of fact or other recitals made in any bill of sale or assignment or other instrument
evidencing any foreclosure sale hereunder as to nonpayment of the Secured Indebtedness or as to
the occurrence of any default, or as to Holder having declared all of such indebtedness to be due
and payable, or as to notice of time, place and terms of sale and of the properties to be sold
having been duly given, or as to any other act or thing having been duly done by Holder, shall be
taken as prima facie evidence of the truth of the facts so stated and recited; and (8) Holder may
appoint or delegate anY one or more persons as agent to perform any act or acts necessary or
incident to any sale held by Holder, including the sending of notices and the conduct of the sale,
but in the name and on behalf0fHolder.
(e) LaWsuits. Holder may proceed by a suit or suits in equity or at law, whether fOr
collection of the indebtedness secured hereby, the specific performance of any covenaut or
agreement herein contained or in aid of the execution of any power herein granted, or for any
foreclosure hereunder or for the sale of the Property under the judgment or decree of any court or
courts of competent jurisdiction.
(f) Entry_ on Property. Holder is authorized, prior or subsequent to the institution of any
foreclosure proceedings, to the fullest extent permitted by applicable law, to enter upon the
Property, or any part thereof, and to take possession of the Property and all books and records
relating thereto, and to exercise without interference from Borrower any and all rights which
Borrower has with respect to the management, possession, operation, protection or preservation
of the Property. Holder shall not be deemed to have taken possession of the Property or any part
thereof except upon the exercise of its right to do so, and then only to the extent evidenced by its
demand and overt act sPecifically for such purpose. All costs, expenses and liabilities of every
character incurred by Holder in managing, operating, maintaining, protecting Or preserving the
Pt'operty shall constitute a demand obligation of Borrower (which obligation Borrower hereby
Promises to pay) to Holder pursuant to this Mortgage. If necessary to obtain the possession
provided for above, Holder may invoke any and all legal remedies to diSpossess Borrower. In
connection with any action taken by Holder pursuant to this Section, Holder shall not be liable
for any loss sustained by Borrower resulting from any failure to let the Property or any part
thereof, or from any act or omission of Holder in managing the Property unless such loss is
caused by the willful, misconduct and bad faith of Holder, nor shall Holder be obligated to
perform or discharge any obligation, duty Or liability of Borrower arising under any lease or other
agreement relating to the Property or arising under any Permitted Encumbrance or otherwise'
arising. Borrower hereby assents to, ratifies and confirms any and all actions of Holder with
respect to the Property taken under this Section.
(g) 'Receiver. Holder shall as a matter of right be entitled to the appointment of a
receiver or receivers for all Or any part of the Property, whether such receivership be incident to a
proposed sale (or sales) of such property or otherwise, and without regard to the value of the
Property or the solvency of any person or persons liable for the payment of the indebtedness
secured hereby, and Borrower does hereby irrevocably consent to the appointment of such
receiver or receivers, waives notice of such appointment, of any request therefor or hearing in
connection therewith,' and any and all defenses to such appointment, agrees not to oppose any
application therefor by Holder, and agrees that such appointment shall in no manner impair,
prejudice or otherwise affect the rights of Holder to application of Rents as provided in this
Mortgage. Nothing herein is to be construed to deprive Holder of any other right, remedy or
privilege it may have under the law to have a receiver appointed. Any money advanced by'
Holder in connection with any such receivership shall be a demand obligation (which obligation
Borrower hereby promises to pay) owing by Borrower to Holder pursuant to this Mortgage.
(h) Termination of Commitment to Lend. Holder may terminate any commitment or
obligation to lend or disburse funds under any Loan Document or enter into any other credit
arrangement to or for the'benefit of Borrower.
(i) Other Rights and Remedies. Holder may exercise any and all other rights and
remedies which Holder may have Under the Loan Documents, or at law or in equity or otherwise.
Section 5.2. Proceeds of Foreclosure. The proceeds of any Sale held by Holder or any
receiver or public officer in foreclosure of the liens and security interests evidenced hereby shall
be applied in accordance with the requirements of applicable laws and to the extent consistent
therewith, FIRST, to the payment of all necessary costs and expenses incident to such foreClosure
sale, including but not limited to all attorneys' fees and legal expenses, advertising costs,
aUctioneer's fees,' costs of title rundowns and lien searches, inspection fees, appraisal costs, fees
for profesSional services, environmental assessment and remediation fees, all court costs and
charges of every Character, and to the payment of the other Secured Indebtedness, including~:
specifically without limitation the principal, accrued interest and attorneys' fees due and unpaid
on the Note and the amounts due and unpaid and owed to Holder under this Mortgage, the order
and manner of application to the items in this clause FIRST to be in Holder's sole discretion; and
SECOND, the remainder, if any 'there shall be, shall be paid to Borrower, or to Borrower's heirs,
devisees, representatives; successors or assigns, or such other persons {including the holder or
beneficiary of any inferior lien) as may be entitled thereto by law; provided, however, that if
Holder is uncertain which person or persons are so entitled, Holder may interplead such
WYOMING MORTGAGE
PAGE 24
· -' 177
remainder in any court of competent jurisdiction, and the amount of any attorneys' fees, court
costs and expenses incurred in such action shall be a part of the Secured Indebtedness and shall
be reimbursable (without limitation) from such remainder.
Section 5.3. Holder as Purchaser. Holder shall have the right to become the purchaser at
any public sale or otherwise, and Holder shall have the right to credit upon the amount of
Holder's successful bid, to the extent necessary to satisfy such bid, all or any part of the Secured
Indebtedness in such manner and order as Holder may elect.
Section 5.4. [Intentionally Omitted]
Section 5.5. Remedies Cumulative. All rights and remedies provided for herein and in
any other Loan Document are cumulative of each other and of any and all other rights and
remedies existing at law or in equity, and Holder shall, in addition to the rights and remedies
provided herein or in any other Loan Document, be entitled to avail itself of all such other rights
and remedies as may now or hereafter exist at law or in equity for the collection of the Secured
Indebtedness and the enforcement of the covenants herein and the foreclosure of the liens and
~security interests evidenced hereby, and the resort to any right or remedy provided for hereunder
or under any such other Loan Document or provided for by law or in equity shall not prevent the
concurrent or subsequent employment of any other appropriate right or rights or remedy or
:remedies.
Section 5.6. Discretion as to Security. Holder may resort to any security given by this
Mortgage or to any other security now existing or hereafter given to secure the payment of the
Secured Indebtedness, in whole or in part, and in such portions and in such order as may seem
best to HOlder in its sole and uncontrolled discretion, arid .any such action shall not in anywise be
considered as a waiver of any of the rights, benefits, liens or security interests evidenced by this
Mortgage.
Section 5.7. Borrower's Waiver of Certain Rights. To the full extent BOrrower may do
so, Borrower agrees that Borrower will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force Providing for any appraisement,
valuation, stay, extension or redemption, homestead, moratorium, reinstatement, marshaling or
forbearance, and Borrower, for Borrower; Borrower's heirs, devisees, representatives, successors
and assigns, and for any and all persons ever claiming any interest in the Property, to the extent
permitted by applicable law, hereby waives and releases all rights of redemption, valuation,
appraisement, stay of execution, notice of intention to mature or declare due the whole of the
Secured Indebtedness, notice of election to mature or declare due the whole of the Secured
Indebtedness and all rights to a marshaling of assets of Borrower, including the Property, or to a
sale in inverse order of alienation in the event of foreclosure of the liens and/or security interests
hereby created. Borrower shall not have or assert any right under any statute or rule of law
pertaining to the marshaling of assets, sale in inverse order of alienation, the exemption of
homestead, the administration of estates of decedents, or other matters whatsoever to defeat,.
reduce or affect the right of Holder under the terms of this Mortgage to a sale of the Property for
the collection of the Secured Indebtedness without any prior or different resort for collection, or
WYOMING MORTGAGE
PAGE 25
'- 178
the right of Holder under the terms of this Mortgage to -the payment of the Secured Indebtedness
out of the proceeds of sale of the Property in preference to every other claimant whatsoever.
Borrower waives any right or remedy which Borrower may have or be able to assert pursuant to
any provision of law pertaining to the rights and remedies of sureties. If any law referred to in
this Section and now in. force, of which Borrower or Borrower's heirs, devisees, representatives,
successors or assigns or any other persons claiming any interest in the Property might take
advantage despite this Section, shall hereafter be repealed or cease to be in force, such law shall
not thereafter be deemed to preclude the application of this Section.
Section 5.8. Delivery_ of Possession After Foreclosure. In the event there is a foreclosure
sale hereunder and at the time of such sale, Borrower or BOrrower's heirs, devisees,
representatives, or successors as owners of the Property are occupying or using the Property, or
any part thereof, each and all shall immediately become the tenant of'the purchaser at such sale,
which tenancy shall be a tenancy from day to day, terminable at the will of purchaser, at a
reasonable rental per day based Upon the value of the property occupied, such rental to be due
.daily to the purchaser; and to the extent permitted by applicable law, the purchaser at such sale
shall, notwithstanding any language herein apparently to the contrary, have the sole option to
demand immediate possession following the sale or to permit the occupants to remain as tenants
at will. After such foreclosure, any Leases to tenants or subtenants that are subject to this
Mortgage (either by their date, their express terms, or by agreement of the tenant or subtenant)
shall, at the sole option of Holder or any purchaser at such sale, either (i) continue in full force
and effect, and the tenant(s) or subtenant(s) thereunder will, upon request, attom to and
acknowledge in writing to the purchaser or purchasers at such sale or sales as landlord
thereunder,, or (ii) upon notice to such effect from Holder, or any purchaser or purchasers,
terminate within thirty (30) days from the date of sale. In the event the tenant fails to surrender
possession of the Property upon demand, the purchaser shall be entitled to institute and maintain
a summary action for possession of the Property (such as an action for forcible detainer) in any
court having jurisdiction.
ARTICLE 6
Miscellaneous
Section 6.1. Scope of Mortgage. This Mortgage is a mortgage of both real and personal
property, a security agreement, an assignment of rents and leases, a financing statement and a
collateral assignment, and also covers proceeds and fixtures.
Section 6.2. Effective as a Financing Statement. This Mortgage shall be effective as a
financing statement filed as a fixture filing with respect to all fixtures included within the
Property and is to be filed for record in the real estate records of each county where any part of
the Property (including said fixtures) is situated. This Mortgage shall also be effective as a
financing statement covering minerals or the like (including oil and gas) and accounts subject to
the relevant provisions of the Wyoming Uniform Commercial Code, as amended, and similar
provisions (if any) of the Uniform Cormnercial Code as enacted in any other state where the
Property is situated which will be financed at the wellhead or minehead of the wells or mines
WYOMING MORTGAGE
PAGE 26
located on the Property and is to be filed for record in the real estate records of each county
where any part of the Property is situated. This Mortgage shall also be effective as a financing
statement covering any other Property and may be filed in any other appropriate filing or
recording office. The mailing address of Borrower and the Holder are set forth at the end of this
Mortgage. A carbon, photographic or other reproduction of this Mortgage or of any financing
statement relating to this Mortgage shall be sufficient as a financing statement for any of the
purposes referred to in this Section.
Section 6.3. Notice to Account Debtors. In addition to the rights granted elsewhere in
this Mortgage, Holder may at any time notify the account debtors or obligors of any accounts,
chattel paper, negotiable instruments or other evidences of indebtedness included in the
Collateral to pay Holder directly.
Section 6.4. Waiver by Holder. Holder may at any time and from time to time By a
specific writing intended for the purpose: (a) waive compliance by Borrower with any covenant
herein made by Borrower to the extent and in the manner specified in such writing; (b) consent to
Borrower's doing any act which hereunder Borrower is prohibited from doing, or to Borrower's
failing to do any act which hereUnder Borrower is required to do, to the extent and in the manner
specified in such writing; (c) release any part of the Property or any interest therein from the lien
and security interest of this Mortgage; or (d) release any party liable, either directly or indirectlY,
for the Secured Indebtedness or for any covenant herein or in any other Loan Document, without
impairing or releasing the liability of any other party. No such act shall in any way affect the
rights or powers of Holder hereunder except to the extent specifically agreed to by Holder in such
writing.
Section 6.5. No Impairment of Security. The lien, security interest and other security
rights of Holder hereunder or under any other Loan Document shall not be impaired by any
indulgence, moratorium or release granted by Holder including, but nOt limited to, any renewal,
extension or modification which Holder may grant with respect to any Secured Indebtedness, or
anY surrender, compromise, release, renewal, extension, exchange or substitution which Holder
may grant in respect of the Property, or any part thereof or any interest therein, or any release or
indulgence granted to any. endorser, guarantor or surety of any Secured Indebtedness. The taking
of additional security by Holder shall not release or impair the lien, security interest or other
security rights of Holder hereunder or affect the liability of Borrower or of any endorser,
guarantor or surety, or improve the right of any junior lienholder in the Property (without
implying hereby Holder's consent to any junior lien).
Section 6.6. Acts Not Constituting Waiver by Holder. Holder may waive any default
without waiving any other prior or subsequent default. Holder may remedy any default without
waiving the default remedied. Neither failure by Holder to exercise, nor delay by Holder in
exercising, nor discontinuance of the exercise of any right, power or remedy (including but not
limited to the right to accelerate the maturity of the Secured Indebtedness or any part thereof)
upon or after any default shall be construed as a waiver of such default or as a waiver of the right
to exercise any. such right, power or remedy at a later date. No single or partial exercise by
Holder of any right, power or remedy hereunder shall exhauSt the same or shall preclude any
WYOMING MORTGAGE
PAG~ 27
other or further exercise thereof, and every such right, power or remedy hereunder may be
exercised at any time and from time to time. No modification or waiver of any provision hereof
nor consent to any departure by Borrower therefrom shall in any event be effective unless the
same shall be in writing and signed by Holder and then such waiver or consent shall be effective
only in the specific instance, for the purpose for which given and to the extent therein specified.
No notice to nor demand on Borrower in any case shall of itself entitle Borrower to any other or
further notice or demand in similar or other circumstances. Remittances in payment of any part
of the Secured Indebtedness other than in the required amount in immediately available U.S.
funds shall not, regardless of any receipt or credit issued therefor, constitute payment until the
required amount is actually received by Holder in immediately available U.S. funds and shall be
made and accepted subject to the condition that any check or draft may be handled for collection
in accordance with the practice of the collecting bank-or banks. Acceptance by Holder of any
payment in an amount less than the amount then due on any Secured Indebtedness shall be
deemed an acceptance on account only and shall not in any way excuse the existence of a default
hereunder notwithstanding any notation on or accompanying such partial payment to the
contrary.
Section 6.7. Borrower's Successors. If the ownership of the Property or any part thereof
becomes vested in a person other than Borrower, Holder may, without notice to Borrower, deal
with such successor or successors in interest with reference to this Mortgage and to the Secured
Indebtedness in the same manner as with Borrower, without in any way vitiating or discharging
Borrower's liability hereunder or for the payment of the indebtedness or performance of the
:obligations secured hereby. No transfer of the Property, no forbearance on the part of Holder,
and no extension of the time for the payment of the Secured Indebtedness given by Holder shall
operate to release, discharge, modify, change or affect, in whole or in part, the liability of
Borrower hereunder for the payment of the indebtedness or performance of the obligations
secured hereby or the liability of any other person hereunder for the payment of the indebtedness
secured hereby.' Each Borrower agrees that it shall be bound by any modification of this
· Mortgage or any of the other Loan Documents made by Holder and any subsequent owner of the
Property, with or without notice to such Borrower, and no such modifications shall impair the
obligations of such Borrower under this Mortgage or any other Loan Document. Nothing in tlfis
Section or elsewhere in this Mortgage shall be construed to imply Holder's consent to any
transfer of the Property.
Section 6.8. Place of Paymenti Forum; Waiver of J.ury Trial. All Secured Indebtedness
which may be owing, hereunder at any time by Borrower shall be payable at the place designated
in the Note (or if no such designation is made, at the address of Holder indicated at the end of
this Mortgage). Borrower hereby irrevocably submits generally and unconditionally for itself and
in respect of its property to the non-exclusive jurisdiction of any Kansas state court, or any
United States federal court, sitting in the cOunty in which the Secured Indebtedness is payable,
and to the non-exclusive jurisdiction of any state or United States federal court sitting in the state
in which any of the Property is located, over any suit, action or proceeding arising out of or
relating to this Mortgage or the Secured Indebtednessl Borrower hereby irrevocably waives, to
the fullest extent permitted by law, any objection that Borrower may now or hereafter have to the
laying of venue in any such court and any claim that any such court is an inconvenient forUm.
WYOMING MORTGAGE
PAGE 28
Borrower hereby agrees and consents that, in addition to any methods of service of process
provided for under applicable law, all service of process in any such suit, action or proceeding in
any Kansas state court, or any United States federal court, sitting in the state in which the
Secured Indebtedness is payable may be made by certified or registered mail, return receipt
requested, directed to Borrower at its address stated at the end of this Mortgage, or at a
subsequent address of Borrower of which Holder received actual notice from Borrower in
accordance with this Mortgage, and service so made shall be complete five (5) days after the
same shall have been so mailed. Nothing herein shall affect the right of Lender to serve process
in any manner permitted by law or limit the right of Lender to bring proceedings against
Borrower in any other court or jurisdiction. TO THE FULLEST EXTENT PERMITTED BY
LAW, BORROWER WAIVES THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH
ANY ACTION, SUIT OR OTHER PROCEEDING ARISING OUT OF OR RELATING TO
THIS MORTGAGE OR ANY OTHER LOAN DOCUMENT.
Section 6.9. [Intentionally omitted]
Section 6.10. APplication of Payments to Certain Indebtedness. If any part of the
Secured Indebtedness cannot be lawfully secured by this Mortgage or if any part of the Property
cannot be lawfully subject to the lien and security interest hereof to the full extent of such
indebtedness, then all payments made shall be applied on said indebtedness first in discharge of
that portion thereof which is not secured by this Mortgage.
Section 6.11. Nature of Loan; Compliance with Usury Laws. The loan evidenced by the
Note is being made solely for the purpose of carrying on or acquiring a business or commercial
enterprise. It is the intent of Borrower and Holder and all other parties to the Loan Documents to
conform to and contract in strict compliance with applicable usury law from time to time in
effect. All agreements between Holder and Borrower (or any other party liable with respect to
any indebtedness under the Loan Documents) are hereby limited by the provisions of this Section
which shall override and control all such agreements, whether now existing or hereafter arising.
In no way, i nor in any event or contingency (including but not limited to prepayment, default,
demand for payment, or acceleration of the maturity of any obligation), shall the interest taken,
reserved, contracted for, charged, chargeable, or received under this Mortgage, the Note or any
other Loan DOcument or otherwise, exceed the maximum nonusurious amount permitted by
applicable law (the "Maximum Amount"). If, from any possible construction of any document,
interest would otherwise be payable in excess of the Maximum Amount, any Such construction
shall be subject to the provisions of this Section and such document shall ipso facto be
automatically reformed and the interest payable shall be automatically reduced to the Maximum
Amount, without the necessity of execution of any amendment or new document. If Holder shall
ever receive anything of value which is characterized as interest under applicable law and which
would apart from this provision be in excess of the Maximum Amount, an amount equal to the
amount which would have been excessive interest shall, without penalty, be applied to the
reduction of the principal amount owing on the Secured Indebtedness in the inverse order of its
maturity and not to the payment of interest, or refunded to Borrower or the other payor thereof if
and to the extent such amount which would have been excessive exceeds such unpaid principal.
The right to accelerate maturity of the Note or any other Secured Indebtedness does not include
WYOMING MORTGAGE
PAGE 19
the right to accelerate any. interest which has not otherwise accrued on the date of such
acceleration, and Holder does not intend to charge or receive any unearned interest in the event of
acceleration. All interest Paid or agreed to be paid to Holder shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full stated term
(including. any renewal or extension) of such indebtedness so that the amount of interest on
account of such indebtedness does not exceed the Maximum Amount. As used in this Section,
the term "applicable law" shall mean the laws of the State of Wyoming or the federal laws of the
United States applicable to this transaction, whichever laws allow the greater interest, as such
laws now exist or may be changed or amended or come into effect in the future.
Section 6.12. Intentionally Omitted.
Section 6.13. Intentionally Omitted.
Section 6.14. Releases.
(a) Release of Mortgage. If all of the Secured Indebtedness be paid as the same
becomes due and payable and all of the covenants, warranties, undertakings and agreements
made in this Mortgage are kept and performed, and all obligations, if any, of Holder for further
advanceS have been terminated, then, and in that event only, all rights under this Mortgage shall
terminate (except to the extent expressly provided herein with respect to indemnifications,
representations and warranties and other rights which are to continue following .the release
hereof) and the Property shall become wholly clear of the liens; security interests, conveyances
and assignments evidenced hereby, and such liens and security interests shall be released by
Holder in due form at Borrower's cost. Without limitation, all provisions herein for indemnity of
Holder shall survive disCharge of the Secured Indebtedness and any foreclosure, release or
termination of this Mortgage.
(b) Partial Release. Holder may, regardless of consideration, cause the release of any
part of the Property from the lien of this Mortgage without in any manner affecting, or impairing
the lien or priority of this Mortgage as to the remainder of the Property.
(c) Release Fee. If permitted by applicable law, Borrower shall pay to Holder, at the
time of each partial or complete release of the lien of this Mortgage, a release fee in the amount
of Twenty-Five and No/100 Dollars ($25.00)if the release instrument is delivered to Holder for
execution or Fifty and No/100 Dollars ($50.00), if Holder is required to prepare the release
instrument~
Section 6.15. Notices. All notices, requests, consents, demands and other
communications required or which any party desires to give hereunder shall be given as provided
on pages 5 and 6 of the Loan Agreement.
Section 6.16. Invalidity of Certain Provisions. A determination that any provision of this
Mortgage is unenforceable or invalid shall not affect the enforceability or validity of any other
provision and the determination that the application of any provision of this Mortgage to any
WYOMING MORTGAGE
PAGE 30
~.' ::.:~: ~!: :i ?
;.
person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of
such provision as it may apply to other persons or circumstances.
Section 6.17. Gender; Titles; Construction. Within this.Mortgage, words of any gender
shall be held and construed to include any other gender, and words in the singular number shall
be held and construed to include the plural, unless the context otherwise requires. Titles
appearing at the beginning of any subdivisions hereof are for convenience only, do not constitute
any part of such subdivisions, and shall be disregarded in construing the language Contained in
such subdivisions. The use of the words "herein," "hereof, .... hereunder" and other similar
compounds of the word "here" shall refer to this entire Mortgage and not to any particular
Article, Section, paragraph or provision. The term "person" and words importing persons as
used in this Mortgage shall include firms, associations, partnerships (including limited
partnerships), joint ventures, trusts, corporations, limited liability companies and other legal
entities, including public or governmental bodies, agencies or instrumentalities, as well as natural
persons.
Section 6.18. Reporting Compliance. Borrower agrees to comply with any and all
reporting requirements applicable to the transaction evidenced by the Note and secured by this
Mortgage Which are set forth in any law, statute, ordinance, rule, regulation, order or
determination of any governmental authority.
Section 6.19. Holder's Consent. Except where otherwise expressly provided herein, in
any instance hereunder where the approval, consent or the exercise of judgment of Holder is
required or requested, (a) the granting or denial of such approval or consent and the exercise of
such judgment shall be within the sole discretion of Holder, and Holder shall not, for any reason
or to any extent, be required to grant such approval or consent or exercise such judgment in any
particular manner, regardless of the reasonableness of either the request or Holder's judgment,
and (b) no approval or consent of Holder shall be deemed to have been given except by a specific
writing intended for the purpose and executed by an authorized representative of Holder.
Section 6.20. [Intentionally Omitted].
Section 6.21. [Intentionally Omitted].
Section 6.22. Successors and Assigns. The terms, provisions, covenants and conditions
hereof shall be binding upon Borrower, and the heirs, devisees, representatives, successors and
assigns of Borrower, and shall inure to the benefit of Holder and shall constitute covenants
running with the Land. All references in this Mortgage to Borrower shall be deemed to include
all such heirs, devisees, representatives, successors and assigns of Borrower.
Section 6.23. Modification or Termination. The Loan Documents may only be modified
or terminated by a written instrument or instruments intended for that purpose and executed by
the party against which enforcement of the modification or termination is asserted. Any alleged
modification or termination which is not so documented shall not be effective as to any party.
WYOMING I~{ORTGAGE
PAGE 31
Section 6.24. [Intentionally Omitted].
Section 6.25. Applicable, Law. THIS MORTGAGE, AND ITS VALIDITY,
ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY AND
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH .AND
PURSUANT TO THE LAWS OF THE STATE OF KANSAS (WITHOUT REGARD TO ANY
CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL
LAW; PROVIDED, HOWEVER, THAT TO THE EXTENT THE LAW OF THE
JURISDICTION WHERE THE PROPERTY IS LOCATED REQUIRES THE APPLICATION
OF ITS OWN STATE LAW OR PROCEDURE TO THE FORECLOSURE OF THIS
MORTGAGE, OR TO ANY OTHER ASPECT OF THIS MORTGAGE OR ANY ASPECT OF
THIS AGREEMENT, THEN THE PARTIES AGREE THAT STATE'S LAW AND
PROCEDURE LAW SHALL APPLY TO ALL SUCH MATTERS.
Section 6.26. Entire Agreement. The Loan Documents constitute the entire
understanding and agreement between Borrower and Holder with respect to the transactions
arising in connection with the Secured Indebtedness and supersede all prior written or oral
understandings and agreements between Borrower and Holder with respect to the matters
addressed in the Loan Documents. Borrower hereby acknowledges that, except as incorporated
in writing in the Loan Documents, there are not, and were not, and no persons are or were
authorized by Holder to make, any representations, understandings, stipulations, agreements or
pron-fises, oral or written, with respect to the matters addressed in the Loan Documents.
IN WITNESS WHEREOF, Borrower has executed this instrument under seal as of the
date first written on page 1 hereof.
The address and federal tax
identification number of
Borrower are:
BORROWER:
Mid Plains Pizza, Inc., a Kansas
c°rp°rati°n ~,,x
W. Kent Colvin
Vice President of Operations
By:
AmfHi~kle /
Vice President of Finance
W¥OM1NG MORTGAGE
PAGE 3!
STATE OF KANSAS )
) SS.
COUNTY OF ,~/X)~d~/~ )
This instrument was acknowledged before me on October __~__, 2003 by W. Kent Colvin,
the Vice President of Operation of Mid Pla~?~Pizza, Inc., a Kansas corporation.
//
Pnnt Name: ,~,r'~r'~- /Z_/ &/z~/-d. [
Notary Public
My Commissi on Expires:
NOTARY PUBLIC - State of Kansas
BARBARA A. LI'I-rELL
My Appt. Expires ~
STATE OF KANSAS )
COUNTY OF ',..~/.,C/,~/D )
This instrument was acknOwledged before me on October's__, 2003 by Amy Hinkle, the
Vice President of Finance of Mid Plains Piz~, Inc., a Kansas corpor~ition.
e~fint~/"'") ~K~__.~~_/,/'~t:~
Notary Public
My Commission Expires:
NOTARY PUBLIC- State of Kansas
BARBARA A. LITTELI._.
uy ^,.t. Ex,ires
WYOMING MORTGAGE
PAGE 33
186
EXHIBIT A
LAND
All that parcel or parcels of real property located in Lincoln County, Wyoming, and more
particularly described as follows:
That part of Lot 1 of Block 18 of the Original Townsite of Afion, within the NE1/4SE1/4 of
Section 25, T32N, R119W, being part of that tract of record in the Office of the Clerk of Lincoln
County in Book 188 of Photostatic Records on Page 249, described as follows:
Beginning at a point on the East line of Lot 1 of said Block 18, S14°47.1'W, 222.45 feet from an
I.L.C. RLS274 mueller water cap with brass hexagon bolt at the approximate intersection of the
center-lines of Third Avenue and Washington Street; thence S01°07.0'W, 165.00 feet along the
East line of said Lot 1 to the Southeast point of said Lot 1; thence N 88°08. I'W, 80.00 feet along
the South line of said Lot 1 identical with the North line of that tract of record in said Office in
Book 67 of Photostatic Records on Page 485 to a point; thence N01°07.0'E, 165.00 feet parallel
to said East line to a point on the North line of said tract of record in Book 188 identical with the
South line of said tract of record in Book 213 of Photostatic Records on Page 352; thence
S88°08. I'E, 80.00 feet along said identical line to the point of beginning.
WYOMING MORTGAGE
PAGE 34
EXHIBIT B
PERMITTED ENCUMBRANCES
NONE, OTHER THAN THOSE ITEMS IDENTIFIED IN SCHEDULE B OF THAT CERTAIN
COMMITMENT FOR TITLE INSURANCE POLICY NO. SV 3799585, FILE NO. A5294,
ISSUED BY OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY.
WYOMING MORTGAGE
PAGE 35
CCMI .... 6238vl