Exhibit 10(v)
MORTGAGE, ASSIGNMENT OF RENTS AND LEASES,
AND SECURITY AGREEMENT
This Mortgage, Assignment of Rents and Leases, and Security Agreement
(this "Mortgage") is executed as of March 2, 2001, by OTR EXPRESS, INC., a
Kansas corporation, as mortgagor ("Grantor"), whose address for notice
hereunder is 804 N. Meadowbrook Drive, Olathe, Kansas 66063, and ASSOCIATES
COMMERCIAL CORPORATION, a Delaware corporation ("Associates"), whose address
for notice is 300 E. Carpenter Freeway, 16 Plaza, Irving, Texas 75062 as
agent (Associates, in such capacity, the "Agent") for the benefit of the
lenders listed in Exhibit C attached hereto and made a part hereof as
mortgagee (individually and collectively, the "Beneficiary" or
"Beneficiaries"), whose addresses for notice are listed in Exhibit C.
Grantor is indebted to Beneficiary for the funds advanced by
Beneficiary to Grantor pursuant to the terms and conditions of the Financing
Documents (as hereinafter defined). This Mortgage will secure Grantor's
indebtedness and obligations under the Financing Documents up to the maximum
amount of $2,000,000.00.
RECITALS
WHEREAS, Beneficiary has made certain financial accommodations
(individually and collectively the "Financing") available to Grantor pursuant
to those certain Financing Agreements (as hereinafter defined) by and between
Grantor and Beneficiary as described on Exhibit B attached hereto and made a
part hereof;
WHEREAS, in connection with the Financing, Grantor has requested and
Beneficiary has agreed to restructure the indebtedness owing under the
Financing Agreements and to forbear exercising certain rights and remedies
under the Financing Agreements pursuant to that certain Workout Agreement of
even date herewith, by and among Grantor and Beneficiary (the "Forbearance
Agreement");
WHEREAS, Beneficiary was unwilling to restructure the indebtedness
owing the Financing Agreements and to forbear its rights and remedies under
the Forbearance Agreement unless Grantor executed this Mortgage encumbering
the Mortgaged Property (as hereinafter defined) in order to secure the
obligations and indebtedness of Grantor under the Financing Agreements;
WHEREAS, this Mortgage will secure Grantor's indebtedness and
obligations under the Financing Documents up to the maximum amount of
$2,000,000.00;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Grantor hereby represents, warrants, covenants and agrees for
the benefit of Beneficiary as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used herein, the following terms shall
have the following meanings:
"Event of Default": means an event of default under this Mortgage as
described in Section 5.1 herein.
"Financing Documents": The (1) indebtedness, payments and obligations
of Grantor to Beneficiary under those certain financing agreements and leases
between Grantor and Beneficiary as described in Exhibit B attached hereto and
made a part hereof (collectively, the "Financing Agreements"), evidencing,
governing and securing certain loans, indebtedness and leases made to Grantor
by Beneficiary (individually and collectively, the "Financing"); (2) this
Mortgage; (3) all other documents now or hereafter executed by Grantor, or
any other person or entity to evidence or secure the payment of the
Indebtedness or the performance of the Obligations, including without
limitation the Forbearance Agreement and all instruments required thereunder;
and (4) all modifications, restatements, extensions, renewals and
replacements of the foregoing.
"Indebtedness": Up to the maximum amount of $2,000,000.00, the sum of
all (1) principal, interest and other amounts due under or secured by the
Financing Documents, (2) principal, interest, and other amounts which may
hereafter be loaned by Beneficiary, their successors or assigns, to or for
the benefit of the Grantor and/or the owner of the Mortgaged Property, when
evidenced by a promissory note or other instrument which, by its terms, is
secured hereby, (3) any amounts representing a deficiency owed to a
Beneficiary by Grantor and (4) all other indebtedness, obligations and
liabilities now or hereafter existing of any kind of Grantor to Beneficiary.
"Intercreditor Agreement": That certain Intercreditor Agreement, dated
as of December 13, 2000, by and among, Associates, Navistar Financial
Corporation ("Navistar"), Mercedes Benz Credit Corporation ("Mercedes Benz")
and Paccar Financial Corporation ("Paccar").
"Mortgaged Property": All of the following: (1) the parcel of real
property described in Exhibit A, together with any greater estate therein as
hereafter may be acquired by Grantor (collectively, the "Land"), (2) all
buildings, structures and other improvements, now or at any time situated,
placed or constructed upon the Land (the "Improvements"), (3) all materials,
supplies, equipment, apparatus and other items of personal property now owned
or hereafter acquired by Grantor and now or hereafter attached to, installed
in or used in connection with any of the Improvements or the Land, and water,
gas, electrical, storm and sanitary sewer facilities and all other utilities
whether or not situated in easements excluding, office furniture and office
equipment (the "Fixtures"), (4) all reserves, escrows or impounds required
under the Financing Documents and all deposit accounts maintained by Grantor
with respect to the Mortgaged Property, (5) all plans, specifications, shop
drawings and other technical descriptions prepared for construction, repair
or alteration of the Improvements, and all amendments and modifications
thereof (the "Plans"), (6) all leases, subleases, licenses, concessions,
occupancy agreements or other agreements (written or oral, now or at any
time in effect) which grant a possessory interest in, or the right to use,
all or any part of the Mortgaged Property, together with all related security
and other deposits (the "Leases"), (7) all of the rents, revenues, income,
proceeds, profits, security and other types of deposits,
and other benefits paid or payable by parties to the Leases
other than Grantor for using, leasing, licensing, possessing, operating from,
residing in, selling or otherwise enjoying the Mortgaged Property (the
"Rents"), (8) all other agreements, such as construction contracts,
architects' agreements, engineers' contracts, utility contracts, maintenance
agreements, management agreements, service contracts, permits, licenses,
certificates and entitlements in any way relating to the development,
construction, use, occupancy, operation, maintenance, enjoyment, acquisition
or ownership of the Mortgaged Property (the "Property Agreements"), (9) all
rights, privileges, tenements, hereditaments, rights-of-way, easements,
appendages and appurtenances appertaining to the foregoing, and all right,
title and interest, if any, of Grantor in and to any streets, ways, alleys,
strips or gores of land adjoining the Land or any part thereof, (10) all
accessions, replacements and substitutions for any of the foregoing and all
proceeds thereof, (11) all insurance policies, unearned premiums therefor and
proceeds from such policies covering any of the above property now or
hereafter acquired by Grantor, (12) all mineral, water, oil and gas rights
now or hereafter acquired and relating to all or any part of the Mortgaged
Property, and (13) all of Grantor's right, title and interest in and to any
awards, remunerations, reimbursements, settlements or compensation heretofore
made or hereafter to be made by any governmental authority pertaining to the
Land, Improvements or Fixtures. As used in this Mortgage, the term
"Mortgaged Property" shall mean all or, where the context permits or
requires, any portion of the above or any interest therein.
"Obligations": All of the agreements, covenants, conditions,
warranties, representations and other obligations (other than to repay the
Indebtedness) made or undertaken by Grantor or any other person or entity to
Beneficiary or others as set forth in the Financing Documents.
"Permitted Encumbrances": The outstanding liens, easements,
restrictions, security interests and other exceptions to title set forth in
the policy of title insurance insuring the lien of this Mortgage, together
with the liens and security interests in favor of Beneficiary created by the
Financing Documents, none of which, individually or in the aggregate,
materially interferes with the benefits of the security intended to be
provided by this Mortgage, materially and adversely affects the value of the
Mortgaged Property, impairs the use or operations of the Mortgaged Property
or impairs Grantor's ability to pay its obligations in a timely manner.
"Person": an individual, partnership, limited partnership, corporation,
limited liability company, joint stock company, land trust, business trust,
or unincorporated organization or a government or agency or political
subdivision thereof.
"Senior Mortgage": That certain Real Estate Mortgage dated April 12,
1996, executed by Grantor for the benefit of Oak Park Bank filed April 18,
1996 as File No. 2588239 in Book 4854 at Page 129 of the Official Records of
Johnson County, Kansas.
"UCC": The Uniform Commercial Code of the state in which the Mortgaged
Property is situated or, if the creation, perfection and enforcement of any
security interest herein granted is governed by the laws of a state other
than the state in which the Mortgaged Property is situated, then, as to the
matter in question, the Uniform Commercial Code in effect in that state.
ARTICLE 2
GRANT
Section 2.1 Grant. To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Grantor
MORTGAGES, WARRANTS, GRANTS, CONVEYS and ASSIGNS, the Mortgaged Property to
Agent for the benefit of Beneficiary, subject, however, to the Permitted
Encumbrances, and Grantor does hereby bind itself, its successors and assigns
to WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto Agent
for the benefit of Beneficiary and its respective successors, substitutes
and assigns.
ARTICLE 3
WARRANTIES, REPRESENTATIONS AND COVENANTS
Grantor warrants, represents and covenants to Beneficiary as follows:
Section 3.1 Title to Mortgaged Property and Lien of this Instrument.
Grantor owns the Mortgaged Property free and clear of any liens, claims or
interests, except the Permitted Encumbrances. This Mortgage creates valid,
enforceable second priority liens and security interests against the
Mortgaged Property, subject only to the Senior Mortgage.
Section 3.2 Second Lien Status. Grantor shall preserve and protect
the lien and security interest status of this Mortgage and the other
Financing Documents. If any lien or security interest other than the
Permitted Encumbrances is asserted against the Mortgaged Property, Grantor
shall promptly, and at its sole expense, (a) give Agent a detailed written
notice of such lien or security interest (including origin, amount and other
terms), and (b) pay the underlying claim in full or take such other action so
as to cause it to be released.
Section 3.3 Payment and Performance. Grantor shall pay the
Indebtedness when obligated under the Financing Documents and shall perform
the Obligations in full when they are required to be performed by Grantor.
Section 3.4 Replacement of Fixtures. Grantor shall not, without the
prior written consent of Agent, permit any of the Fixtures to be removed at
any time from the Land or Improvements, unless the removed item is removed
temporarily for maintenance and repair or, if removed permanently, is
obsolete and is replaced by an article of equal or better suitability and
value, owned by Grantor subject to the liens and security interests of this
Mortgage and the other Financing Documents, and free and clear of any other
lien or security interest except such as may be first approved in writing by
Agent.
Section 3.5 Maintenance of Rights of Way, Easements and Licenses.
Grantor shall maintain all rights of way, easements, grants, privileges,
licenses, certificates, permits, entitlements, and franchises necessary for
the use of the Mortgaged Property and will not, without the prior consent of
Agent, consent to any public restriction (including any zoning ordinance) or
private restriction as to the use of the Mortgaged Property. Grantor shall
comply with all restrictive covenants affecting the Mortgaged Property, and
all zoning ordinances and other public or private restrictions as to the use
of the Mortgaged Property.
Section 3.6 Inspection. Grantor shall permit Agent on behalf of
Beneficiary, and its agents, representatives and employees, upon reasonable
prior notice to Grantor, to inspect the Mortgaged Property and conduct such
environmental and engineering studies as Agent may require, provided that
such inspections and studies shall not materially interfere with the use and
operation of the Mortgaged Property.
Section 3.7 Insurance. Grantor shall maintain insurance as follows:
(1) Casualty. Grantor shall keep the Mortgaged Property insured
against damage by fire and the other hazards covered by a standard extended
coverage and all-risk insurance policy for the full insurable value thereof
(without reduction for depreciation or co-insurance), and shall maintain such
other casualty insurance as reasonably required by Agent. Grantor shall keep
the Mortgaged Property insured against loss by flood if the Mortgaged
Property is located in an area identified by the Federal Emergency Management
Agency as an area having special flood hazards and in which flood insurance
has been made available under the National Flood Insurance Act of 1968 (and
any successor act thereto) in an amount at least equal to the lesser of (i)
$1,000,000.00 or (ii) the maximum limit of coverage available under said act.
Grantor shall not maintain any separate or additional insurance which is
contributing in the event of loss unless it is properly endorsed and
otherwise satisfactory to Agent in all respects. The proceeds of insurance
paid on account of any damage or destruction to the Mortgaged Property shall
be paid to Agent for the benefit of Beneficiary to be applied as provided in
Section 3.8.
(2) Liability. Grantor shall maintain Commercial General Liability
insurance against claims for bodily injury or death and property damage
occurring in or upon or resulting from the Mortgaged Property, in standard
form and with such insurance company or companies as may be acceptable to the
Agent, such insurance to afford immediate protection, to the limit of not
less than $1,000,000.00 in respect of any one accident or occurrence and
$1,000,000.00 in the aggregate, and to the limit of not less than
$1,000,000.00 for property damage, with not more than $10,000.00 deductible,
together with excess coverage in the form of an umbrella policy of not less
than $1,000,000.00. Such Commercial General Liability insurance shall
include Blanket Contractual Liability coverage which insures contractual
liability under the indemnifications of the Agent and the Beneficiary by
Grantor set forth herein (but such coverage or the amount thereof shall in no
way limit such indemnifications). Grantor shall also maintain Business Auto
Coverage with a combined single limit of not less than $1,000,000 and
worker's compensation coverage for its employees and contractors. Grantor
shall maintain with respect to each policy or agreement evidencing such
Commercial General Liability insurance such endorsements as may be required
by the Agent and shall at all times deliver and maintain with the Agent a
certificate with respect to such insurance in form satisfactory to the Agent.
Not less than thirty (30) days prior to the expiration date of each policy of
insurance required of Grantor pursuant to this subparagraph (2), Grantor
shall deliver to the Agent certificates evidencing and/or copies of a renewal
policy or policies marked Apremium paid@ or accompanied by other evidence of
payment satisfactory to the Agent. In the event of a foreclosure of this
Mortgage, the purchaser of such Mortgaged Property shall succeed to all the
rights of Grantor, including any right to unearned premiums, in and to all
policies of insurance assigned pursuant to the provisions of this
subparagraph, and Grantor hereby authorizes the Agent to notify any or all
insurance carriers of this assignment.
(3) Form and Quality. All insurance policies shall be endorsed in
form and substance acceptable to Agent to name Agent for the benefit of
Beneficiary as an additional insured, loss payee or mortgagee thereunder, as
its interest may appear, with loss payable to Agent for the benefit of
Beneficiary, without contribution, under a standard New York (or local
equivalent) mortgagee clause. All such insurance policies and endorsements
shall be fully paid for and contain such provisions and expiration dates and
be in such form and issued by such insurance companies licensed to do
business in the state in which the Mortgaged Property is situated, with a
rating of "A-IX" or better as established by Best's Rating Guide (or an
equivalent rating approved in writing by Agent). Each policy shall provide
that such policy may not be canceled or materially changed except upon thirty
(30) days' prior written notice of intention of non-renewal, cancellation or
material change to Agent and that no act or thing done by Grantor shall
invalidate any policy as against Agent or Beneficiary. If Grantor fails to
maintain insurance in compliance with this Section 3.7, Agent for the benefit
of Beneficiary may obtain such insurance and pay the premium therefor and
Grantor shall, on demand, reimburse Agent for all expenses incurred in
connection therewith. Grantor shall assign the policies or proofs of
insurance to Agent for the benefit of Beneficiary, in such manner and form
that Beneficiary and their successors and assigns shall at all times have and
hold the same as security for the payment of the Financing. Grantor shall
deliver copies of all original policies certified to Agent by the insurance
company or authorized agent as being true copies, together with the
endorsements required hereunder. The proceeds of insurance policies coming
into the possession of Agent shall not be deemed trust funds, and Agent shall
be entitled to apply such proceeds as herein provided.
(4) Adjustments. Grantor shall give immediate written notice of any
loss to the insurance carrier and to Agent. Grantor hereby irrevocably
authorizes and empowers Agent, as attorney-in-fact for Grantor coupled with
an interest, to make proof of loss, to adjust and compromise any claim under
insurance policies, to appear in and prosecute any action arising from such
insurance policies, to collect and receive insurance proceeds, and to deduct
therefrom Agent's expenses incurred in the collection of such proceeds.
Nothing contained in this Section 3.7(4), however, shall require Agent to
incur any expense or take any action hereunder.
Section 3.8 Use and Application of Insurance Proceeds. Agent for the
benefit of the Beneficiary shall apply insurance proceeds to costs of
restoring the Mortgaged Property or the Financing as follows:
(1) if the loss is less than or equal to $10,000.00, Agent shall,
subject to the rights of the holder of the Senior Mortgage, apply the
insurance proceeds to restoration of the Mortgaged Property provided (a) no
Event of Default exists, and (b) Grantor promptly commences and is diligently
pursuing restoration of the Mortgaged Property;
(2) if the loss exceeds $10,000.00 but is not more than ten percent
(10%) of the replacement value of the Improvements (for projects containing
multiple phases or stand alone structures, such calculation to be based on
the damaged phase or structure, not the Mortgaged Property as a whole), Agent
for the benefit of Beneficiary shall, subject to the rights of the holder of
the Senior Mortgage, apply the insurance proceeds to restoration provided
that at all times during such restoration (a) no Event of Default exists; (b)
Agent determines that there are sufficient funds available to restore and
repair the Mortgaged Property to a condition approved by Agent; (c) Agent
determines that restoration and repair of the Mortgaged Property to a
condition approved by Agent will be completed within six months after the
date of loss or casualty and in any event ninety (90) days prior to the
earliest maturity date of the Financing; and (d) Grantor promptly commences
and is diligently pursuing restoration of the Mortgaged Property;
(3) if the conditions set forth above are not satisfied or the loss
exceeds the maximum amount specified in Subsection 3.8(2) above, in Agent=s
sole discretion, Agent for the benefit of Beneficiary, subject to the rights
of the holder of the Senior Mortgage, may apply any insurance proceeds it may
receive to the payment of the Financing as agreed by Agent and Beneficiary or
allow all or a portion of such proceeds to be used for the restoration of the
Mortgaged Property; and
(4) insurance proceeds applied to restoration will be disbursed on
receipt of satisfactory plans and specifications, contracts and subcontracts,
schedules, budgets, lien waivers and architects' certificates, and otherwise
in accordance with prudent commercial construction lending practices for
construction loan advances.
Section 3.9 Condemnation Awards. Grantor shall immediately notify
Agent of the institution of any proceeding for the condemnation or other
taking of the Mortgaged Property or any portion thereof. Agent may
participate in any such proceeding and Grantor will deliver to Agent all
instruments necessary or required by Agent to permit such participation.
Without Agent's prior consent, Grantor (1) shall not agree to any
compensation or award, and (2) shall not take any action or fail to take any
action which would cause the compensation to be determined. All awards and
compensation for the taking or purchase in lieu of condemnation of the
Mortgaged Property or any part thereof are hereby assigned to and shall be
paid to Agent for the benefit of Beneficiary to the extent there is an
outstanding balance on the Financing; any excess shall be paid to Grantor.
Grantor authorizes Agent for the benefit of Beneficiary to collect and
receive such awards and compensation, to give proper receipts and acquittance
therefor, and in Agent's sole discretion to apply the same toward the payment
of the Financing, notwithstanding that the Financing may not then be due and
payable, or to the restoration of the Mortgaged Property; however, if the
award is less than or equal to $10,000.00 and Grantor requests that such
proceeds be used for non-structural site improvements (such as landscape,
driveway, walkway and parking area repairs) required to be made as a result
of such condemnation, Agent will apply the award to such restoration in
accordance with disbursement procedures applicable to insurance proceeds
provided there exists no Event of Default. Grantor, upon request by Agent,
shall execute all instruments requested to confirm the assignment of the
awards and compensation to Agent for the benefit of Beneficiary, free and
clear of all liens, charges or encumbrances.
Section 3.10 Impounds. Upon Agent's written request, Grantor shall
deposit with Agent, monthly, one-twelfth (1/12th) of the annual charges for
ground or other rent, if any, and real estate taxes, assessments and similar
charges relating to the Mortgaged Property. If such request is made at or
before the initial advance of the Financing, Grantor shall deposit with Agent
a sum of money which together with the monthly installments will be
sufficient to make each of such payments thirty (30) days prior to the date
any delinquency or penalty becomes due with respect to such payments.
Deposits shall be made on the basis of Agent's estimate from time to time of
the charges for the current year (after giving effect to any reassessment or,
at Agent's election, on the basis of the charges for the prior year, with
adjustments when the charges are fixed for the then current year). All funds
so deposited shall be held by Agent, without interest, and may be commingled
with Agent's general funds. Grantor hereby grants to Agent a security
interest in all funds so deposited with Agent for the purpose of securing the
Financing. While an Event of Default exists, the funds deposited may be
applied in payment of the charges for which such funds have been deposited,
or to the payment of the Financing or any other charges affecting the
security of Agent and/or Beneficiary, as Agent may elect, but no such
application shall be deemed to have been made by operation of law or
otherwise until actually made by Agent. Grantor shall furnish Agent with
bills for the charges for which such deposits are required at least thirty
(30) days prior to the date on which the charges first become payable. If at
any time the amount on deposit with Agent, together with amounts to be
deposited by Grantor before such charges are payable, is insufficient to pay
such charges, Grantor shall deposit any deficiency with Agent immediately
upon demand. Agent shall pay such charges when the amount on deposit with
Agent is sufficient to pay such charges and Agent has received a bill for
such charges.
Section 3.11 Taxes and Assessments. The Mortgaged Property is
comprised of one or more parcels, each of which constitutes a separate tax
lot and none of which constitutes a portion of any other tax lot. There are
no pending or, to Grantor=s best knowledge, proposed, special or other
assessments for public improvements or otherwise affecting the Mortgaged
Property, nor are there any contemplated improvements to the Mortgaged
Property that may result in such special or other assessments.
Section 3.12 Compliance with Law. (1) Grantor has all requisite
licenses, permits, franchises, qualifications, certificates of occupancy or
other governmental authorizations to own, lease and operate the Mortgaged
Property and carry on its business, and the Mortgaged Property is in
compliance with all applicable legal requirements and is free of structural
defects, and all building systems contained therein are in good working
order, subject to ordinary wear and tear. The Mortgaged Property does not
constitute, in whole or in part, a legally nonconforming use under applicable
legal requirements;
(2) No condemnation has been commenced or, to Grantor's knowledge, is
contemplated with respect to all or any portion of the Mortgaged Property or
for the relocation of roadways providing access to the Mortgaged Property;
and
(3) The Mortgaged Property has adequate rights of access to public
ways and is served by adequate water, sewer, sanitary sewer and storm drain
facilities. All public utilities necessary or convenient to the full use and
enjoyment of the Mortgaged Property are located in the public right-of-way
abutting the Mortgaged Property, and all such utilities are connected so as
to serve the Mortgaged Property without passing over other property, except
to the extent such other property is subject to a perpetual easement for such
utility benefitting the Mortgaged Property. All roads necessary for the full
utilization of the Mortgaged Property for its current purpose have been
completed and dedicated to public use and accepted by all governmental
authorities.
Section 3.13 No Homestead. The Land and the Improvements do not and
will not constitute the residential or business homestead of any person.
Section 3.14 Due on Sale and Encumbrance; Transfers of Interests.
Without the prior written consent of Agent, none of the following events
shall occur:
(1) a Transfer of all or any part of the Mortgaged Property or any
interest in the Mortgaged Property;
(2) a Transfer of an interest in Grantor;
(3) a Transfer of an interest in any entity which owns, directly or
indirectly, an interest in Grantor;
(4) if any guarantor is an entity, (a) a Transfer of an interest in
any such guarantor, or (b) a Transfer of an interest in any entity which owns
directly or indirectly an interest in any such guarantor;
(5) if Grantor is a trust, the termination or revocation of such
trust; and
(6) a conversion of Grantor from one type of legal entity into
another type of legal entity, whether or not there is a Transfer.
As used in this Section 3.14, "Transfer" means (a) a sale, assignment,
lease, transfer or other disposition (whether voluntary, involuntary or by
operation of law); (b) the granting, creating or attachment of a lien,
encumbrance or security interest (whether voluntary, involuntary or by
operation of law), subject to Grantor's right to contest the validity of
claims and demands pursuant to Section 3.15; (c) the issuance or other
creation of an ownership interest in a legal entity, including a partnership
interest, interest in a limited liability company or corporate stock; (d) the
withdrawal, retirement, removal or involuntary resignation of a partner in a
partnership or a member or manager in a limited liability company; or (e) the
merger, dissolution, liquidation, or consolidation of a legal entity.
"Transfer" does not include (i) a conveyance of the Mortgaged Property at a
judicial or non-judicial foreclosure sale under this Mortgage, or (ii) a
transfer that occurs by devise, descent, or by operation of law upon the
death of a natural person. For purposes of defining the term "Transfer," the
term "partnership" shall mean a general partnership, a limited partnership, a
joint venture and a limited liability partnership, and the term "partner"
shall mean a general partner, a limited partner and a joint venturer.
Section 3.15 Taxes; Charges. Grantor shall pay before any fines,
penalty, interest or cost may be added thereto, and shall not enter into any
agreement to defer, any real estate taxes and assessments, franchise taxes
and charges, and other governmental charges that may become a Lien (as
defined in Section 3.22) upon the Mortgaged Property or become payable during
the term of the Financing, and will promptly furnish Agent with evidence of
such payment; however, Grantor's compliance with Section 3.10 of this
Agreement relating to impounds for taxes and assessments shall, with respect
to payment of such taxes and assessments, be deemed compliance with this
Section 3.15. Grantor shall not suffer or permit the joint assessment of the
Mortgaged Property with any other real property constituting a separate tax
lot or with any other real or personal property. Grantor shall pay when due
all claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in a Lien on the Mortgaged Property; however, Grantor
may contest the validity of such claims and demands so long as (1) Grantor
notifies Agent that it intends to contest such claim or demand, (2) Grantor
provides Agent with an indemnity, bond or other security satisfactory to
Agent (including an endorsement to Beneficiary's title insurance policy
insuring against such claim or demand) assuring the discharge of Grantor's
obligations for such claims and demands, including interest and penalties,
and (3) Grantor is diligently contesting the same by appropriate legal
proceedings in good faith and at its own expense and concludes such contest
prior to the tenth (10th) day preceding the earlier to occur of the earliest
maturity date of any of the Financing, or the date on which the Mortgaged
Property is scheduled to be sold for non-payment.
Section 3.16 Control; Management. There shall be no removal or
replacement of the parties that are in charge of the day-to-day control and
management of Grantor without the prior written consent of Agent.
Section 3.17 Operation; Maintenance; Inspection. Grantor shall
observe and comply with all legal requirements applicable to the ownership,
use and operation of the Mortgaged Property. Grantor shall maintain the
Mortgaged Property in good condition and promptly repair any damage or
casualty. Grantor shall permit Agent and its agents, representatives and
employees, upon reasonable prior notice to Grantor, to inspect the Mortgaged
Property and conduct such environmental and engineering studies as Agent may
require, provided such inspections and studies do not materially interfere
with the use and operation of the Mortgaged Property.
Section 3.18 Taxes on Security. Grantor shall pay all taxes,
charges, filing, registration and recording fees, excises and levies payable
with respect to the Financing or the liens created or secured by the
Financing Documents, other than income, franchise and doing business taxes
imposed on Beneficiary. If there shall be enacted any law (1) deducting the
Financing from the value of the Mortgaged Property for the purpose of
taxation, (2) affecting any lien on the Mortgaged Property, or (3) changing
existing laws of taxation of mortgages, deeds of trust, security deeds, or
debts secured by real property, or changing the manner of collecting any such
taxes, Grantor shall promptly pay to Beneficiary, on demand, all taxes, costs
and charges for which Beneficiary is or may be liable as a result thereof;
however, if such payment would be prohibited by law or would render the
Financing usurious, then instead of collecting such payment, Beneficiary may
declare all amounts owing under the Financing Documents to be immediately due
and payable.
Section 3.19 Further Assurances. Grantor shall promptly (1) cure any
defects in the execution and delivery of the Financing Documents, and (2)
execute and deliver, or cause to be executed and delivered, all such other
documents, agreements and instruments as Beneficiary may reasonably request
to further evidence and more fully describe the collateral for the Financing,
to correct any omissions in the Financing Documents, to perfect, protect or
preserve any liens created under any of the Financing Documents, or to make
any recordings, file any notices, or obtain any consents, as may be necessary
or appropriate in connection therewith.
Section 3.20 Intentionally Deleted.
Section 3.21 Notice of Certain Events. Grantor shall promptly notify
Agent of (1) any Event of Default, together with a detailed statement of the
steps being taken to cure such Event of Default; (2) any notice of default
received by Grantor under other obligations relating to the Mortgaged
Property or otherwise material to Grantor's business, including any notice of
default received by Grantor relating to the Senior Mortgage; and (3) any
threatened or pending legal, judicial or regulatory proceedings, including
any dispute between Grantor and any governmental authority, affecting Grantor
or the Mortgaged Property.
Section 3.22 Indemnification. Grantor shall indemnify, defend and
hold Agent and Beneficiary harmless from and against any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever,
including the reasonable fees and actual expenses of Agent=s and/or
Beneficiary's counsel, in connection with (1) any inspection, review or
testing of or with respect to the Mortgaged Property, (2) any investigative,
administrative, mediation, arbitration, or judicial proceeding, whether or
not Agent or Beneficiary is designated a party thereto, commenced or
threatened at any time (including after the repayment of the Financing) in
any way related to the execution, delivery or performance of any Financing
Documents or to the Mortgaged Property, (3) any proceeding instituted by any
person claiming a Lien (as hereinafter defined) except for the Senior
Mortgage, and (4) any brokerage commissions or finder's fees claimed by any
broker or other party in connection with the Financing, the Mortgaged
Property, or any of the transactions contemplated in the Financing Documents,
including those arising from the joint, concurrent, or comparative negligence
of Agent and/or Beneficiary, except to the extent any of the foregoing is
caused by Agent's or Beneficiary's gross negligence or willful misconduct.
"Lien" means any interest, or claim thereof, in the Mortgaged Property
securing an obligation owed to, or a claim by, any person other than the
owner of the Mortgaged Property, whether such interest is based on common
law, statute or contract, including the lien or security interest arising
from a deed of trust, mortgage, assignment, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term "Lien" includes reservations,
exceptions, encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting
the Mortgaged Property.
Section 3.23 Other Covenants. All of the covenants in the Financing
Documents are incorporated herein by reference and, together with covenants
in this Article 3 shall be covenants running with the land.
Section 3.24 Organization and Power. Grantor is duly organized,
validly existing and in good standing under the laws of the state of its
formation or existence, and is in compliance with legal requirements
applicable to doing business in the State of Kansas. Grantor is not a
"foreign person" within the meaning of ' 1445(f)(3) of the Internal Revenue
Code.
Section 3.25 Validity of Financing Documents. The execution, delivery
and performance by Grantor of the Financing Documents: (1) are duly
authorized and do not require the consent or approval of any other party or
governmental authority which has not been obtained; and (2) will not violate
any law or result in the imposition of any lien, charge or encumbrance upon
the assets of any such party, except as contemplated by the Financing
Documents. The Financing Documents constitute the legal, valid and binding
obligations of Grantor, enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, or similar laws
generally affecting the enforcement of creditors' rights.
Section 3.26 Liabilities, Litigation. Except as disclosed in the
financial statements delivered by Grantor to Agent and/or Beneficiary, there
are no liabilities (fixed or contingent) affecting the Land, the
Improvements, or Grantor. Except as disclosed in such financial statements,
there is no litigation, administrative proceeding, investigation or other
legal action (including any proceeding under any state or federal bankruptcy
or insolvency law) pending or, to the knowledge of Grantor, threatened,
against the Land, the Improvements, or Grantor which if adversely determined
could have a material adverse effect on such party, the Land and/or
Improvements or the Financing.
Section 3.27 Payment of Debts. Grantor does not intend to, and does
not believe that it will, incur debts and liabilities (including contingent
liabilities) from and after the date of this Mortgage beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of
cash to be received by Grantor and the amounts to be payable on or in respect
of obligations of Grantor).
ARTICLE 4
ENVIRONMENTAL MATTERS
Section 4.1 Certain Definitions. As used herein, the following terms
have the meanings indicated:
(1) "Environmental Laws" means any federal, state or local law
(whether imposed by statute, or administrative or judicial order, or common
law), now or hereafter enacted, governing health, safety, industrial hygiene,
the environment or natural resources, or Hazardous Materials, including, such
laws governing or regulating the use, generation, storage, removal, recovery,
treatment, handling, transport, disposal, control, discharge of, or exposure
to, Hazardous Materials.
(2) "Hazardous Materials" means (a) petroleum or chemical products,
whether in liquid, solid, or gaseous form, or any fraction or by-product
thereof, (b) asbestos or asbestos-containing materials, (c) polychlorinated
biphenyl (PCB's), (d) radon gas, (e) underground storage tanks, (f) any
explosive or radioactive substances, (g) lead or lead-based paint, or (h) any
other substance, material, waste or mixture which is or shall be listed,
defined, or otherwise determined by any governmental authority to be
hazardous, toxic, dangerous or otherwise regulated, controlled or giving rise
to liability under any Environmental Laws, but shall expressly exclude the
two (2) underground storage tanks on the Mortgaged Property as of the date of
this Mortgage and the contents of such tanks, and any tires, motor oil,
transmission oil or other products used in the ordinary course of business in
the vehicle maintenance facility located on the Mortgaged Property.
Section 4.2 Representations and Warranties on Environmental Matters.
To Grantor's knowledge, (1) no Hazardous Material is now or was formerly
used, stored, generated, manufactured, installed, disposed of or otherwise
present at or about the Mortgaged Property or any property adjacent to the
Mortgaged Property (except for cleaning and other products currently used in
connection with the routine maintenance or repair of the Mortgaged Property
in full compliance with Environmental Laws), (2) all permits, licenses,
approvals and filings required by Environmental Laws have been obtained, and
the use, operation and condition of the Mortgaged Property does not, and did
not previously, violate any Environmental Laws, and (3) no civil, criminal or
administrative action, suit, claim, hearing, investigation or proceeding has
been brought or been threatened, nor have any settlements been reached by or
with any parties or any liens imposed in connection with the Mortgaged
Property concerning Hazardous Materials or Environmental Laws.
Section 4.3 Covenants on Environmental Matters.
(1) Grantor shall (a) comply strictly and in all respects with
applicable Environmental Laws; (b) notify Agent immediately upon Grantor's
discovery of any spill, discharge, release or presence of any Hazardous
Material at, upon, under, within, contiguous to or otherwise affecting the
Mortgaged Property; (c) promptly remove such Hazardous Materials and
remediate the Mortgaged Property in full compliance with Environmental Laws
and in accordance with the recommendations and specifications of an
independent environmental consultant approved by Agent; and (d) promptly
forward to Agent copies of all orders, notices, permits, applications or
other communications and reports in connection with any spill, discharge,
release or the presence of any Hazardous Material or any other matters
relating to the Environmental Laws or any similar laws or regulations, as
they may affect the Mortgaged Property or Grantor.
(2) Grantor shall not cause, shall prohibit any other person within
the control of Grantor from causing, and shall use prudent, commercially
reasonable efforts to prohibit other Persons (including tenants) from (a)
installing any underground storage tanks at the Mortgaged Property, or (b)
conducting any activity that requires a permit or other authorization under
Environmental Laws without such permit or other applicable authorization
being obtained.
(3) Grantor shall not permit any condition (a "Non-Complying
Condition") which results in non-compliance with any Environmental Laws, at,
upon, under or within the Mortgaged Property or on any contiguous real
estate; provided, however, if any Non-Complying Condition exists as a result
of any acts or omissions of any tenants of any of the Mortgaged Property, or
the acts or omissions of any third party which is not a tenant of any of the
Mortgaged Property, Grantor shall take such actions as may be legally
available to cause such Non-Complying Condition to be remedied immediately,
at Grantor's sole cost and expense. So long as Grantor is diligently and
continuously pursuing to remedy or causing to remedy such Non-Complying
Condition, the existence of any such Non-Complying Condition shall not
constitute an Event of Default under the Financing Documents, provided such
Non-Complying Condition is remedied within two hundred seventy (270) days
from the date of discovery thereof; provided, however, if any governmental
authorities require that such Non-Complying Condition be remedied prior to
the expiration of two hundred seventy (270) days, then such Non-Complying
Condition shall be remedied within such time as required by governmental
authorities; and provided, further, if Grantor promptly notifies Agent as
soon as it is aware that such Non-Complying Condition cannot be remedied
prior to the expiration of the two hundred seventy (270) day period, and so
long as Grantor is diligently and continuously pursuing to remedy or causing
to remedy such Non-Complying Condition, the existence of such Non-Complying
Condition shall not constitute an Event of Default under the Financing
Documents, provided such Non-Complying Condition is remedied within the next
ninety (90) days. In no event shall a Non-Complying Condition continue to
exist for more than one year from the date of discovery.
(4) Grantor shall not interfere with Agent obtaining an environmental
engineering report for the Mortgaged Property, from time to time as
Beneficiary determines appropriate, at Beneficiary's expense, and in a
manner satisfactory to Agent, based upon an investigation relating to and
making appropriate inquiries concerning the existence of Hazardous Materials
on or about the Mortgaged Property, and the past or present discharge,
disposal, release or escape of any such substances, all consistent with good
customary and commercial practice (a "Site Assessment") or, if required by
Agent, an update to any existing Site Assessment, to assess the presence or
absence of any Hazardous Materials and the potential costs in connection with
abatement, cleanup or removal of any Hazardous Materials found on, under, at
or within the Mortgaged Property.
Section 4.4 Allocation of Risks and Indemnity. As between Grantor,
Agent and Beneficiary, all risk of loss associated with non-compliance with
Environmental Laws, or with the presence of any Hazardous Material at, upon,
within, contiguous to or otherwise affecting the Mortgaged Property, shall
lie solely with Grantor. Accordingly, Grantor shall bear all risks and costs
associated with any loss (including any loss in value attributable to
Hazardous Materials), damage or liability therefrom, including all costs of
removal of Hazardous Materials or other remediation required by Agent and/or
Beneficiary or by law. GRANTOR SHALL INDEMNIFY, DEFEND AND HOLD AGENT AND
BENEFICIARY HARMLESS FROM AND AGAINST ALL LOSS, LIABILITIES, DAMAGES, CLAIMS,
COSTS AND EXPENSES (INCLUDING REASONABLE COSTS OF DEFENSE) ARISING OUT OF OR
ASSOCIATED, IN ANY WAY, WITH THE NON-COMPLIANCE WITH ENVIRONMENTAL LAWS, OR
THE EXISTENCE OF HAZARDOUS MATERIALS IN EXCESS OF LEVELS PERMITTED BY
ENVIRONMENTAL LAWS IN, ON, OR ABOUT THE MORTGAGED PROPERTY, OR A BREACH OF
ANY REPRESENTATION, WARRANTY OR COVENANT CONTAINED IN THIS ARTICLE 4, WHETHER
BASED IN CONTRACT, TORT, IMPLIED OR EXPRESS WARRANTY, STRICT LIABILITY,
CRIMINAL OR CIVIL STATUTE OR COMMON LAW, INCLUDING THOSE ARISING FROM THE
JOINT, CONCURRENT, OR COMPARATIVE NEGLIGENCE OF AGENT AND/OR BENEFICIARY;
HOWEVER, GRANTOR SHALL NOT BE LIABLE UNDER SUCH INDEMNIFICATION TO THE EXTENT
SUCH LOSS, LIABILITY, DAMAGE, CLAIM, COST OR EXPENSE RESULTS (1) SOLELY FROM
AGENT'S OR BENEFICIARY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR (2) FROM
ACTS, OMISSIONS, OR VIOLATIONS OF ENVIRONMENTAL LAWS WHICH OCCUR AFTER THE
DATE TITLE TO THE MORTGAGED PROPERTY HAS BEEN TRANSFERRED TO AGENT OR
BENEFICIARY OR ONE OF ITS AFFILIATES BY FORECLOSURE OR DEED IN LIEU OF
FORECLOSURE ONLY (AND NOT OTHERWISE). GRANTOR'S OBLIGATIONS UNDER THIS
SECTION 4.4 SHALL ARISE UPON THE DISCOVERY OF THE PRESENCE OF ANY HAZARDOUS
MATERIAL, WHETHER OR NOT ANY GOVERNMENTAL AUTHORITY HAS TAKEN OR THREATENED
ANY ACTION IN CONNECTION WITH THE PRESENCE OF ANY HAZARDOUS MATERIAL OR
POTENTIAL LIABILITY ON ACCOUNT THEREOF IS DISCLOSED IN THE SITE ASSESSMENT
AND SHALL CONTINUE NOTWITHSTANDING THE REPAYMENT OF THE FINANCING OR ANY
TRANSFER OR SALE OF ANY RIGHT, TITLE AND INTEREST IN THE MORTGAGED PROPERTY
BY FORECLOSURE, DEED IN LIEU OF FORECLOSURE OR OTHERWISE, EXCEPT AS PROVIDED
IN THE PRECEDING SENTENCE. NOTHING CONTAINED IN THIS SECTION 4.4 SHALL BE
CONSTRUED TO DEROGATE, ALTER OR LIMIT ANY SEPARATE INDEMNITY OBLIGATION OF
GRANTOR OR ANY GUARANTOR OF THE FINANCING UNDER ANY OTHER INDEMNITY AGREEMENT
WITH AGENT OR THE BENEFICIARY.
Section 4.5 No Waiver. Notwithstanding any provision in this Article
4 or elsewhere in the Financing Documents, or any rights or remedies granted
by the Financing Documents, Agent and Beneficiary do not waive and expressly
reserve all rights and benefits now or hereafter accruing to Agent and/or
Beneficiary under the "security interest" or "secured creditor" exception
under applicable Environmental Laws, as the same may be amended. No action
taken by Beneficiary pursuant to the Financing Documents shall be deemed or
construed to be a waiver or relinquishment of any such rights or benefits
under the "security interest exception."
ARTICLE 5
DEFAULT AND FORECLOSURE
Section 5.1 Events of Default. Each of the following constitutes an
Event of Default under the Financing Agreements and this Mortgage:
(1) Payments. Grantor=s failure to pay any regularly scheduled
installment of principal, interest or other amount due under any of the
Financing Documents within ten (10) days after the date when due, or
Grantor's failure to pay the Financing at the maturity date of each
individual Financing Agreement, whether by acceleration or otherwise.
(2) Insurance. Grantor's failure to maintain insurance as
required under Section 3.7 of this Mortgage, or Grantor's failure to remedy
any deficiencies in the insurance coverages maintained on the Land and the
Improvements within ten (10) days after notice by Beneficiary to Grantor of
such deficiencies.
(3) Sale, Encumbrance, Etc. The sale, transfer, conveyance,
pledge, mortgage or assignment of any part or all of the Land and/or the
Improvements, or any interest therein, or of any interest in Grantor, any
entity that owns, directly or indirectly, any interest in Grantor, or any
other Transfer or other occurrence in violation of Section 3.14 of this
Mortgage.
(4) Covenants. Grantor's failure to perform or observe any of
the agreements and covenants contained in this Mortgage or in any of the
other Financing Documents (other than payments under Section 5.1(1),
insurance requirements under Section 5.1(2) and transfers and encumbrances
under Section 5.1(3)), and the continuance of such failure for ten (10) days
after notice by Beneficiary to Grantor; however, subject to any shorter
period for curing any failure by Grantor as specified in any of the other
Financing Documents, Grantor shall have an additional thirty (30) days to
cure such failure if (1) such failure does not involve the failure to make
payments on a monetary obligation; (2) such failure cannot reasonably be
cured within ten (10) days; (3) Grantor is diligently undertaking to cure
such default, and (4) Grantor has provided Beneficiary with security
reasonably satisfactory to Beneficiary against any interruption of payment or
impairment of collateral as a result of such continuing failure. The notice
and cure provisions of this Section 5.1(4) do not apply to the Events of
Default described in Section 5.1(5), Section 5.1(6), Section 5.1(7) and
Section 5.1(8).
(5) Representations and Warranties. Any representation or
warranty made in any of the Financing Documents proves to be untrue in any
material respect when made or deemed made.
(6) Other Encumbrances. Any default under any document or
instrument, other than the Financing Documents, evidencing or creating a Lien
on the Land and/or the Improvements or any part thereof, including but not
limited to any default under the Senior Mortgage.
(7) Involuntary Bankruptcy or Other Proceeding. Commencement
of an involuntary case or other proceeding against Grantor or any other
person having an ownership or security interest in the Land and/or the
Improvements (each, a "Bankruptcy Party") which seeks liquidation,
reorganization or other relief with respect to it or its debts or other
liabilities under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeks the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any of its property,
and such involuntary case or other proceeding is not dismissed or permanently
stayed within sixty (60) days after commencement; or an order for relief
against a Bankruptcy Party is entered in any such case under the Federal
Bankruptcy Code.
(8) Voluntary Petitions, etc. Commencement by a Bankruptcy
Party of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its Debts or other
liabilities under any bankruptcy, insolvency or other similar law or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official for it or any of its property, or consent by a Bankruptcy
Party to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against
it, or the making by a Bankruptcy Party of a general assignment for the
benefit of creditors, or the failure by a Bankruptcy Party, or the admission
by a Bankruptcy Party in writing of its inability, to pay its debts generally
as they become due, or any action by a Bankruptcy Party to authorize or
effect any of the foregoing.
(9) Other Defaults on Indebtedness owed to Beneficiary.
Grantor's default of, or failure to perform or observe any of the agreements
and covenants contained in, any other loan or security agreement or lease
between Grantor and Beneficiary, whether now existing or hereafter created.
(10) Other Defaults. Any default in the payment or
performance of any obligation, or any defined default or event of default,
under the terms of any contract, agreement or instrument (other than any of
the Financing Documents) pursuant to which Grantor has incurred any debt or
other liability to any person or entity, including Beneficiary.
(11) Default under Senior Mortgage. The occurrence of any
default or event of default under the Senior Mortgage or the initiation of
foreclosure proceedings on the Mortgaged Property by Oak Park Bank or its
successors or assigns pursuant to the Senior Mortgage.
Section 5.2 Remedies. If an Event of Default occurs, Agent may, only
upon Agent's receipt of a written instrument executed by each of the
Beneficiaries requesting Agent so to do, exercise any or all of the following
rights, remedies and recourses:
(a) Acceleration. Give any notice to Grantor required by
applicable law. If no notice is required by such applicable law, or if
the Event of Default is not cured as prescribed by applicable law and
this Mortgage, declare the Indebtedness (including any prepayment
premium or similar charge required by the Financing Documents) to be
immediately due and payable, without further notice, presentment,
protest, notice of intent to accelerate, notice of acceleration, demand
or action of any nature whatsoever (each of which hereby is expressly
waived by Grantor), whereupon the same shall become immediately due and
payable.
(b) Entry on Mortgaged Property. Enter the Mortgaged Property
and take exclusive possession thereof and of all books, records and
accounts relating thereto. If Grantor remains in possession of the
Mortgaged Property after an Event of Default and without Agent's prior
written consent, Agent may invoke any legal remedies to dispossess
Grantor.
(c) Operation of Mortgaged Property. Hold, lease, develop,
manage, operate or otherwise use the Mortgaged Property upon such terms
and conditions as Agent may deem reasonable under the circumstances
(making such repairs, alterations, additions and improvements and
taking other actions, from time to time, as Agent deems necessary or
desirable), and apply all Rents and other amounts collected by Agent in
connection therewith in accordance with the provisions of Section 5.8.
(d) Foreclosure and Sale. Foreclose this Mortgage by judicial
proceeding and exercise any other remedies permitted by applicable law
or provided in this Mortgage or in any other Financing Document. Agent
shall be entitled to collect all costs and expenses incurred in
connection with any Event of Default, including attorneys' fees, costs
of documentary evidence, abstracts and title reports.
(e) Receiver. Agent for the benefit of Beneficiary shall be
entitled, as a matter of absolute right and without regard to the value
of any security for the Indebtedness or the solvency of any person
liable therefor, to the appointment of a receiver for the Mortgaged
Property upon the application to any court of competent jurisdiction.
Grantor waives any right to any hearing or notice of hearing prior to
the appointment of a receiver. Such receiver and his agents shall be
empowered (i) to take possession of the Mortgaged Property and any
businesses conducted by Grantor or any other person thereon and any
business assets used in connection therewith and, if the receiver deems
it appropriate, to operate the same, (ii) to exclude Grantor and
Grantor's agents, servants, and employees from the Mortgaged Property,
(iii) to collect the rents, issues, profits, and income therefrom, (iv)
to complete any construction which may be in progress, (v) to do such
maintenance and make such repairs and alterations as the receiver deems
necessary, (vi) to use all stores of materials, supplies, and
maintenance equipment on the Mortgaged Property and replace such items
at the expense of the receivership estate, (vii) to pay all taxes and
assessments against the Mortgaged Property, all premiums for insurance
thereon, all utility and other operating expenses, and all sums due
under any prior or subsequent encumbrance, and (viii) generally to do
anything which Grantor could legally do if Grantor were in possession
of the Mortgaged Property. All expenses incurred by the receiver or
his agents shall constitute a part of the Indebtedness. Any revenues
collected by the receiver shall be applied first to the expenses of the
receivership, including attorneys' fees incurred by the receiver and by
Agent or Beneficiary, together with interest thereon at the rate of 1
1/2% per month, if not prohibited by law, otherwise at the highest rate
that the Grantor can legally obligate itself to pay and/or Agent or
Beneficiary can legally collect from the date incurred until repaid,
and the balance shall be applied toward the Indebtedness or in such
other manner as the court may direct. Unless sooner terminated with
the express consent of Agent, any such receivership will continue until
the Indebtedness has been discharged in full, or until title to the
Mortgaged Property has passed after foreclosure sale and all applicable
periods of redemption have expired.
(f) Other. Exercise on behalf of Beneficiary all other rights,
remedies and recourses granted under the Financing Documents or
otherwise available at law or in equity (including an action for
specific performance of any covenant contained in the Financing
Documents, or a judgment on the indebtedness under the Financing
Agreements either before, during or after any proceeding to enforce
this Mortgage).
Section 5.3 Separate Sales. The Mortgaged Property may be sold in
one or more parcels and in such manner and order as Agent, in its sole
discretion, may elect; the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.
Section 5.4 Remedies Cumulative, Concurrent and Nonexclusive. Agent
and Beneficiary shall have all rights, remedies and recourses granted in the
Financing Documents and available at law or equity (including the UCC), which
rights (a) shall be cumulative and concurrent, (b) may be pursued separately,
successively or concurrently against Grantor obligated under the Financing
Documents, or against the Mortgaged Property, or against any one or more of
them, at the sole discretion of Agent and Beneficiary, (c) may be exercised
as often as occasion therefor shall arise, and the exercise or failure to
exercise any of them shall not be construed as a waiver or release thereof or
of any other right, remedy or recourse, and (d) are intended to be, and shall
be, nonexclusive. No action by Agent or Beneficiary in the enforcement of
any rights, remedies or recourses under the Financing Documents or otherwise
at law or equity shall be deemed to cure any Event of Default.
Section 5.5 Release of and Resort to Collateral. Agent may release,
regardless of consideration and without the necessity for any notice to or
consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating or releasing the lien or security
interests created in or evidenced by the Financing Documents or their stature
as a second lien and security interest in and to the Mortgaged Property. For
payment of the Indebtedness, Agent may resort to any other security in such
order and manner as Agent may elect.
Section 5.6 Waiver of Redemption, Notice and Marshalling of Assets.
To the fullest extent permitted by law, Grantor hereby irrevocably and
unconditionally waives and releases (a) all benefit that might accrue to
Grantor by virtue of any present or future statute of limitations or law or
judicial decision exempting the Mortgaged Property from attachment, levy or
sale on execution or providing for any appraisement, valuation, stay of
execution, exemption from civil process, redemption or extension of time for
payment, (b) all notices of any Event of Default or of Agent's or
Beneficiary=s election to exercise or its actual exercise of any right,
remedy or recourse provided for under the Financing Documents, and (c) any
right to a marshalling of assets or a sale in inverse order of alienation.
Section 5.7 Discontinuance of Proceedings. If Agent and/or
Beneficiary shall have proceeded to invoke any right, remedy or recourse
permitted under the Financing Documents and shall thereafter elect to
discontinue or abandon it for any reason, Agent and/or Beneficiary shall have
the unqualified right to do so and, in such an event, Grantor, Agent and
Beneficiary shall be restored to their former positions with respect to the
Indebtedness, the Obligations, the Financing Documents, the Mortgaged
Property and otherwise, and the rights, remedies, recourses and powers of
Agent and Beneficiary shall continue as if the right, remedy or recourse had
never been invoked, but no such discontinuance or abandonment shall waive any
Event of Default which may then exist or the right of Agent and Beneficiary
thereafter to exercise any right, remedy or recourse under the Financing
Documents for such Event of Default.
Section 5.8 Application of Proceeds. The proceeds of any sale of,
and the Rents and other amounts generated by the holding, leasing,
management, operation or other use of the Mortgaged Property, shall be
applied by Agent for the benefit of Beneficiary (or the receiver, if one is
appointed) in the following order unless otherwise required by applicable
law:
(a) to the payment of the costs and expenses of taking
possession of the Mortgaged Property and of holding, using, leasing,
repairing, improving and selling the same, including, without
limitation (1) receiver's fees and expenses, (2) court costs, (3)
attorneys' and accountants' fees and expenses, (4) costs of
advertisement, and (5) the payment of all ground rent, real estate
taxes and assessments, except any taxes, assessments, or other charges
subject to which the Mortgaged Property shall have been sold;
(b) to the payment of all amounts (including interest), other
than the unpaid principal balance of the Financing and accrued but
unpaid interest, which may be due to Beneficiary under the Financing
Documents in a manner agreed to by Agent and Beneficiary in their sole
discretion;
(c) to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Agent and
Beneficiary in their sole discretion may determine; and
(d) the balance, if any, to the payment of the persons legally
entitled thereto.
Section 5.9 Occupancy After Foreclosure. Upon the expiration of the
applicable periods for redemption and the delivery of a deed to the purchaser
at any foreclosure sale pursuant to Section 5.2(d), such purchaser shall
become the legal owner of the Mortgaged Property. All occupants of the
Mortgaged Property shall, at the option of such purchaser, become tenants of
the purchaser at such time and shall deliver possession thereof immediately
to the purchaser upon demand. It shall not be necessary for the purchaser at
said sale to bring any action for possession of the Mortgaged Property other
than the statutory action of forcible detainer in any justice court having
jurisdiction over the Mortgaged Property.
Section 5.10 Additional Advances and Disbursements; Costs of
Enforcement.
(a) If any Event of Default exists, Agent for the benefit of
Beneficiary shall have the right, but not the obligation, to cure such
Event of Default in the name and on behalf of Grantor. All sums
advanced and expenses incurred at any time by Agent under this Section
5.10, or otherwise under this Mortgage or any of the other Financing
Documents or applicable law, shall bear interest from the date that
such sum is advanced or expense incurred, to and including the date of
reimbursement, computed at the rate of 1 1/2% per month, if not
prohibited by law, otherwise at the highest rate that Grantor can
legally obligate itself to pay and/or Agent can legally collect, and
all such sums, together with interest thereon, shall be secured by this
Mortgage.
(b) Grantor shall pay all expenses (including reasonable
attorneys' fees and expenses) of or incidental to the perfection and
enforcement of this Mortgage and the other Financing Documents, or the
enforcement, compromise or settlement of the Indebtedness or any claim
under this Mortgage and the other Financing Documents, and for the
curing thereof, or for defending or asserting the rights and claims of
Agent or Beneficiary in respect thereof, by litigation or otherwise.
Section 5.11 No Mortgagee in Possession. Neither the enforcement of
any of the remedies under this Article 5, the assignment of the Rents and
Leases under Article 6, the security interests under Article 7, nor any other
remedies afforded to Agent or Beneficiary under the Financing Documents, at
law or in equity shall cause Agent or Beneficiary to be deemed or construed
to be a mortgagee in possession of the Mortgaged Property, to obligate Agent
or Beneficiary to lease the Mortgaged Property or attempt to do so, or to
take any action, incur any expense, or perform or discharge any obligation,
duty or liability whatsoever under any of the Leases or otherwise.
ARTICLE 6
ASSIGNMENT OF RENTS AND LEASES
AND LEASING MATTERS
Section 6.1 Assignment. Grantor acknowledges and confirms that, if
requested by Agent, it will execute and deliver to Agent an Assignment of
Rents and Leases (the "Assignment of Rents and Leases"), intending that such
instrument create a present, absolute assignment to Agent for the benefit of
Beneficiary of the Leases and Rents. Without limiting the intended benefits
or the remedies provided under the Assignment of Rents and Leases, Grantor
hereby will assign to Agent for the benefit of Beneficiary, if requested, as
further security for the Indebtedness and the Obligations, the Leases and
Rents. While any Event of Default exists, Agent shall be entitled to
exercise any or all of the remedies provided in the Assignment of Rents and
Leases and in Article 5 hereof, including the right to have a receiver
appointed. If any conflict or inconsistency exists between the assignment of
the Rents and the Leases in this Mortgage and the absolute assignment of the
rents and the leases in the Assignment of Rents and Leases, the terms of the
Assignment of Rents and Leases shall control.
Section 6.2 Representations and Warranties on Leases. Grantor
represents and warrants to Agent with respect to leases on the Land that: (1)
any and all leases (including amendments) are in writing, and there are no
oral agreements with respect thereto; (2) the copies of the leases, if any,
delivered to Agent are true and complete; (3) to Grantor's knowledge, neither
the landlord nor any tenant is in material default under any of the leases;
(4) Grantor has no knowledge of any notice of termination or default with
respect to any lease on the Land; (5) Grantor has not assigned or pledged any
of the leases, the rents or any interests therein except to Agent; (6) no
tenant or other party has an option to purchase all or any portion of the
Land and/or Improvements; (7) no tenant has the right to terminate its lease
prior to expiration of the stated term of such lease; and (8) no tenant has
prepaid more than one month's rent in advance (except for bona fide security
deposits not in excess of an amount not to exceed two months' rent).
Section 6.3 Standard Lease Form; Approval Rights. All leases and
other rental arrangements shall in all respects be approved by Agent and
shall be on a standard lease form approved by Agent with no modifications
(except as approved by Agent). Such lease form shall provide that the tenant
shall attorn to Agent, and that any cancellation, surrender, or amendment of
such lease without the prior written consent of Agent shall be voidable by
Agent. Grantor shall separately account for the security deposits.
ARTICLE 7
SECURITY AGREEMENT
Section 7.1 Security Interest. This Mortgage constitutes a "Security
Agreement" on personal property within the meaning of the UCC and other
applicable law with respect to the Fixtures, Plans, Leases, Rents and
Property Agreements. To this end, Grantor grants to Agent for the benefit of
Beneficiary, a second priority security interest, subject only to the Senior
Mortgage, in the Fixtures, Plans, Leases, Rents and Property Agreements and
all other Mortgaged Property which is personal property to secure the payment
of the Indebtedness and performance of the Obligations, and agrees that Agent
shall have all the rights and remedies of a secured party under the UCC with
respect to such property. Any notice of sale, disposition or other intended
action by Agent with respect to the Fixtures, Plans, Leases, Rents and
Property Agreements sent to Grantor at least five (5) days prior to any
action under the UCC shall constitute reasonable notice to Grantor.
Section 7.2 Financing Statements. Grantor shall execute and deliver
to Agent, in form and substance satisfactory to Agent, such financing
statements and such further assurances as Agent may, from time to time,
reasonably consider necessary to create, perfect and preserve Agent's
security interest hereunder and Agent may cause such statements and
assurances to be recorded and filed, at such times and places as may be
required or permitted by law to so create, perfect and preserve such security
interest. Grantor's chief executive office is at the address set forth in
the first paragraph of this Mortgage.
Section 7.3 Fixture Filing. This Mortgage shall also constitute a
"fixture filing" for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures. Information concerning the
security interest herein granted may be obtained at the addresses of Debtor
(Grantor) and Secured Party (Agent) as set forth in the first paragraph of
this Mortgage.
Section 7.4 Continuing Effect Notwithstanding Termination of Mortgage
It is expressly agreed that until such time as the Indebtedness has been paid
in full, or until the security interest granted hereby has been released in
writing by Agent, this Mortgage shall remain fully effective as a security
agreement, notwithstanding that the lien on real property that is created by
this Mortgage may be extinguished or released, by foreclosure of this
Mortgage or otherwise.
ARTICLE 8
AGENT
8.1 Agent.
(A) Appointment. Each Beneficiary hereby designates and
appoints Associates as its agent under this Mortgage and each Beneficiary
hereby irrevocably authorizes Agent to take such action or to refrain from
taking such action on its behalf under the provisions of this Mortgage and to
exercise such powers as are set forth herein, together with such other powers
as are reasonably incidental thereto. Agent is authorized and empowered to
amend, modify, or waive any provisions of this Mortgage on behalf of
Beneficiary. Agent agrees to act as such on the express conditions contained
in this Section 8.1. The provisions of this Section 8.1 are solely for the
benefit of Agent and Beneficiary and neither Grantor nor any other person or
entity shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this
Mortgage, Agent shall act solely as an administrative representative of
Beneficiary and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Beneficiary,
Grantor or any other person or entity. Agent may perform any of its duties
hereunder by or through its agents, attorneys or employees.
(B) Nature of Duties. Agent shall have no duties, obligations
or responsibilities except those expressly set forth in this Mortgage and the
Forbearance Agreement. The duties of Agent shall be mechanical and
administrative in nature. Agent shall not have by reason of this Mortgage a
fiduciary relationship in respect of any Beneficiary. Each Beneficiary shall
make its own independent investigation of the financial condition and affairs
of Grantor in connection with the extension of credits under the Financing
Agreements and shall make its own appraisal of the credit worthiness of
Grantor, and Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Beneficiary with any credit or other
information with respect thereto, whether coming into its possession before
the date of this Mortgage or at any time or times thereafter. If Agent seeks
the consent or approval of any Beneficiary to the taking or refraining from
taking any action hereunder, then Agent shall send notice thereof to each
Beneficiary.
(C) Rights, Exculpation, Etc. Neither Agent nor any of its
officers, directors, employees or agents shall be liable to any Beneficiary
for any action taken or omitted by them hereunder or in connection herewith,
except that Agent shall be obligated on the terms set forth herein for
performance of its express obligations hereunder, and except that Agent shall
be liable with respect to its own gross negligence or willful misconduct.
Agent shall not be liable for any apportionment or distribution of payments
made by it in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Beneficiary to whom payment was due but not made, shall be to recover from
other Beneficiaries any payment in excess of the amount to which they are
determined to be entitled (and such other Beneficiaries hereby agree to
return to such Beneficiary any such erroneous payments received by them). In
performing its functions and duties hereunder, Agent shall exercise the same
care which it would in dealing with loans for its own account, but Agent
shall not be responsible to any Beneficiary for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectability, or sufficiency of this
Mortgage or the transactions contemplated hereby, or for the financial
condition of any Grantor. Agent shall not be responsible for the execution,
acknowledgment, or validity of this Mortgage, or for the proper authorization
thereof, or for the sufficiency of the lien and security interests purported
to be created hereby, and Agent makes no representation in respect thereof or
in respect of the rights, remedies and recourses of Beneficiary. Agent shall
not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Mortgage or
any of the Financing Documents or the financial condition of the Grantor, or
the existence or possible existence of any Event of Default hereunder or any
default under any of the Financing Documents. Agent shall have no obligation
to take any action under this Mortgage if it, in good faith believes that
such action exposes Agent to any liability. Agent shall not be required to
take any action toward the execution and enforcement of the rights granted to
Agent hereunder or to institute, appear in, or defend any action, suit or
other proceeding in connection therewith where, in Agent=s sole discretion,
such action would be likely to involve Agent in expense or liability, unless
requested so to do by a written instrument signed by each of the
Beneficiaries and, if Agent so requests, unless Agent is tendered security
and indemnity satisfactory to Agent in its sole discretion against any and
all cost, expense and liability arising therefrom.
(D) Reliance. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telex, telecopy or
telegram) believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Mortgage and its duties hereunder, upon advice of
counsel selected by it. Agent shall be entitled to rely upon the advice of
legal counsel, independent accountants, and other experts selected by Agent
in its sole discretion.
(E) Indemnification. Each Beneficiary, jointly, agrees to
reimburse and indemnify Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against Agent in any way relating
to or arising out of this Mortgage or any action taken or omitted by Agent
under this Mortgage; provided, however, that no Beneficiary shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, advances or disbursements
resulting from Agent's gross negligence or willful misconduct. The
obligations of Beneficiary under this Section 8.1(E) shall survive the
payment in full of the Obligations and the termination of this Mortgage.
Agent shall be entitled to reimbursement from the Beneficiary for expenses
incurred by Agent in the performance of Agent's duties hereunder. The
individual obligations and liabilities for each of Associates, Navistar,
Mercedes Benz and Paccar pursuant to the indemnification and reimbursement
obligations set out in this Section 8.1(E) shall not exceed each individual
party's Pro Rata (as defined in the Intercreditor Agreement) percentage of
the total amount of expenses, costs, liabilities and obligations incurred by
Agent for which Agent is entitled to indemnification and/or reimbursement
under this Section 8.1(E).
(F) Associates Individually/Beneficiaries Individually. With
respect to its Financing made by it pursuant to the Financing Agreements
between Associates and Grantor, Associates shall have and may exercise the
same rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Beneficiary.
The term "Beneficiary" or any similar term shall, unless the context clearly
otherwise indicates, include Associates in its individual capacity as a
Beneficiary. Except as to any limitations or restrictions set forth in any
agreement among the Beneficiaries; including but not limited to, the
Intercreditor Agreement and the Forbearance Agreement, (i) each Beneficiary
may lend money to, and generally engage in any kind of banking, trust or
other business with Grantor and (ii) Associates may engage in any such
activity with Grantor as if it were not acting as Agent pursuant hereto.
(G) Successor Agent.
(1) Resignation. Agent may resign from the performance
of all its functions and duties hereunder at any time by giving at least
thirty (30) business days' prior written notice to Grantor and the
Beneficiary. Such resignation shall take effect upon the acceptance by a
successor Agent of appointment pursuant to clause (2) below or as otherwise
provided below.
(2) Appointment of Successor. Upon any such notice of
resignation pursuant to clause (G)(1) above, Beneficiary shall appoint a
successor Agent. If a successor Agent shall not have been so appointed
within said thirty (30) business day period, the retiring Agent, upon notice
to Grantor, shall then appoint a successor Agent who shall serve as Agent
until such time as Beneficiary shall appoint a successor Agent as provided
above.
(3) Successor Agent. Upon the acceptance of any
appointment as Agent under this Mortgage by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Mortgage.
After any retiring Agent's resignation as Agent under this Mortgage, the
provisions of this Section 8.1 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Mortgage.
(H) Collateral Matters.
(1) Release of Collateral. Beneficiary hereby
irrevocably authorizes Agent, at its option and in its discretion, to release
any Lien granted to or held by Agent upon any property covered by this
Mortgage upon payment and satisfaction of all Obligations and Indebtedness.
(2) Absence of Duty. Agent shall have no obligation
whatsoever to any Beneficiary or any other Person to assure that the property
covered by this Mortgage exists or is owned by Grantor or is cared for,
protected or insured or has been encumbered or that the security interests
and liens granted to Agent on behalf of Beneficiary herein or pursuant hereto
have been property or sufficiently or lawfully created, perfected, protected
or enforced or are entitled to any particular priority, or to exercise at all
or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and
powers granted or available to Agent in this Section 8.1(H), it being
understood and agreed that in respect of the property covered by this
Mortgage or any act, omission or event related thereto, Agent may act in any
manner it may deem appropriate, in its sole discretion, given Agent=s own
interest in property covered by this Mortgage as one of the Beneficiaries
and that Agent shall have no duty or liability whatsoever to any of the
other Beneficiaries.
(3) Agent shall not be personally liable in case of
entry by Agent, or anyone entering by virtue of the powers herein granted to
Agent, upon the Mortgaged Property for any liability or damages incurred by
any Person upon the entry by Agent or its agents or employees on the
Mortgaged Property pursuant to the rights and remedies granted Agent
hereunder or for debts contracted for or liability or damages incurred in the
management or operation of the Mortgaged Property, except for those damages,
costs or liabilities caused by Agent=s gross negligence or willful
misconduct.
(I) Exercise of Remedies. Beneficiary agrees that it will not
have any right individually to enforce or seek to enforce this Mortgage or to
realize upon any of the Mortgaged Property, it being understood and agreed
that such rights and remedies may be exercised only by Agent pursuant to the
terms of this Mortgage and the Forbearance Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Notices. Any notice required or permitted to be given
under this Mortgage shall be in writing and either shall be mailed by
certified mail, postage prepaid, return receipt requested, or sent by
overnight air courier service, or personally delivered to a representative of
the receiving party, or sent by telecopy (provided an identical notice is
also sent simultaneously by mail, overnight courier, personal delivery or
otherwise as provided in this Section 9.1). All such communications shall be
mailed, sent or delivered, addressed to the party for whom it is intended at
its address set forth on the first page of this Mortgage or on Exhibit C
attached hereto. Any communication so addressed and mailed shall be deemed
to be given on the earliest of (a) when actually delivered, (b) on the first
business day after deposit with an overnight air courier service, or (c) on
the third business day after deposit in the United States mail, postage
prepaid, in each case to the address of the intended addressee, and any
communication so delivered in person shall be deemed to be given when
receipted for by, or actually received by, Agent or Grantor, as the case may
be. If given by telecopy, a notice shall be deemed given and received when
the telecopy is transmitted to the party's telecopy number and confirmation
of complete receipt is received by the transmitting party during normal
business hours and identical notice is also sent simultaneously by mail,
overnight courier, or personal delivery as otherwise provided in this Section
9. 1. Any party may designate a change of address by written notice to the
other by giving at least ten (10) days prior written notice of such change of
address.
Section 9.2 Covenants Running with the Land. All Obligations
contained in this Mortgage are intended by Grantor and Agent to be, and shall
be construed as, covenants running with the Mortgaged Property. As used
herein, AGrantor@ shall refer to the party named in the first paragraph of
this Mortgage and to any subsequent owner of all or any portion of the
Mortgaged Property (without in any way implying that Agent has or will
consent to any such conveyance or transfer of the Mortgaged Property). All
persons or entities who may have or acquire an interest in the Mortgaged
Property shall be deemed to have notice of, and be bound by, the terms of the
Financing Agreements and the other Financing Documents; however, no such
party shall be entitled to any rights thereunder without the prior written
consent of Agent.
Section 9.3 Attorney-in-Fact. Grantor hereby irrevocably appoints
Agent and its successors and assigns, as its attorney-in-fact, which agency
is coupled with an interest, (a) to execute and/or record any notices of
completion, cessation of labor, or any other notices that Agent deems
appropriate to protect Agent's interest, if Grantor shall fail to do so
within ten (10) days after written request by Agent, (b) upon the issuance of
a deed pursuant to the foreclosure of this Mortgage or the delivery of a deed
in lieu of foreclosure, to execute all instruments of assignment, conveyance
or further assurance with respect to the Leases, Rents, Fixtures, Plans and
Property Agreements in favor of the grantee of any such deed and as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve Agent's
security interests and rights in or to any of the collateral, and (d) while
any Event of Default exists, to perform any obligation of Grantor hereunder;
however: (1) Agent shall not under any circumstances be obligated to perform
any obligation of Grantor; (2) any sums advanced by Agent in such performance
shall be added to and included in the Indebtedness and shall bear interest at
the rate of 1 1/2% per month, if not prohibited by law, otherwise at the
highest rate that Grantor can legally obligate itself to pay and/or Agent can
legally collect; (3) Agent as such attorney-in-fact shall only be accountable
for such funds as are actually received by Agent; and (4) Agent shall not be
liable to Grantor or any other person or entity for any failure to take any
action which it is empowered to take under this Section.
Section 9.4 Successors and Assigns. This Mortgage shall be binding
upon and inure to the benefit of Agent, Beneficiary and Grantor and their
respective heirs, successors and assigns. Grantor shall not, without the
prior written consent of Agent, assign any rights, duties or obligations
hereunder.
Section 9.5 No Waiver. Any failure by Agent and/or Beneficiary to
insist upon strict performance of any of the terms, provisions or conditions
of the Financing Documents shall not be deemed to be a waiver of same, and
Agent and/or Beneficiary shall have the right at any time to insist upon
strict performance of all of such terms, provisions and conditions.
Section 9.6 Subrogation. To the extent proceeds of the Financing
Agreements have been used to extinguish, extend or renew any indebtedness
against the Mortgaged Property, then Beneficiary shall be subrogated to all
of the rights, liens and interests existing against the Mortgaged Property
and held by the holder of such indebtedness and such former rights, liens and
interests, if any, are not waived, but are continued in full force and effect
in favor of Beneficiary.
Section 9.7 Financing Documents. If any conflict or inconsistency
exists between this Mortgage and the Financing Documents, the Financing
Documents shall govern.
Section 9.8 Release or Reconveyance. Upon payment in full of the
Indebtedness and performance in full of the Obligations, Agent, at Grantor's
expense, shall release the liens and security interests created by this
Mortgage or reconvey the Mortgaged Property to Grantor.
Section 9.9 Waiver of Stay, Moratorium and Similar Rights. Grantor
agrees, to the full extent that it may lawfully do so, that it will not at
any time insist upon or plead or in any way take advantage of any
appraisement, valuation, stay, marshalling of assets, extension, redemption
or moratorium law now or hereafter in force and effect so as to prevent or
hinder the enforcement of the provisions of this Mortgage or the indebtedness
secured hereby, or any agreement between Grantor, Agent and/or Beneficiary or
any rights or remedies of Agent and/or Beneficiary.
Section 9.10 Obligations of Grantor, Joint and Several. If more than
one person or entity has executed this Mortgage as AGrantor,@ the obligations
of all such persons or entities hereunder shall be joint and several.
Section 9.11 Governing Law. THIS MORTGAGE AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, (A) THE LAWS OF
THE STATE IN WHICH THE MORTGAGED PROPERTY IS SITUATED, AND (B) THE LAWS OF
THE UNITED STATES OF AMERICA AND ANY RULES, REGULATIONS, OR ORDERS ISSUED OR
PROMULGATED THEREUNDER, APPLICABLE TO THE AFFAIRS AND TRANSACTIONS ENTERED
INTO BY AGENT AND/OR BENEFICIARY, TO THE EXTENT SUCH LAWS, RULES, REGULATIONS
OR ORDERS OTHERWISE PREEMPT THE LAW OF THE STATE IN WHICH THE MORTGAGED
PROPERTY IS SITUATED, IN WHICH EVENT SUCH FEDERAL LAW SHALL CONTROL.
Section 9.12 Headings. The Article, Section and Subsection titles
hereof are inserted for convenience of reference only and shall in no way
alter, modify or define, or be used in construing, the text of such Articles,
Sections or Subsections.
Section 9.13 Entire Agreement. THIS MORTGAGE AND THE OTHER FINANCING
DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN AGENT,
BENEFICIARY AND GRANTOR AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS
BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF.
ACCORDINGLY, THE FINANCING DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 9.15 Jury Trial Waiver. AS A MATERIAL INDUCEMENT FOR AGENT
AND BENEFICIARY TO RESTRUCTURE THE INDEBTEDNESS OWING BY GRANTOR UNDER THE
FINANCING AGREEMENTS AND TO ENTER INTO THE FORBEARANCE AGREEMENT CONTEMPLATED
HEREBY, GRANTOR, AGENT AND BENEFICIARY HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY OF ANY OR ALL ISSUES ARISING IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BETWEEN GRANTOR, AGENT AND/OR BENEFICIARY OR THEIR RESPECTIVE HEIRS,
SUCCESSORS OR ASSIGNS IN RESPECT OF ANY MATTER ARISING OUT OF, UNDER OR
CONNECTED IN ANY MANNER WHATSOEVER HEREWITH (INCLUDING ANY ACTION TO RESCIND
OR CANCEL THIS MORTGAGE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PERSON OR ANY EXERCISE
BY ANY PARTY OF ITS RIGHTS HEREUNDER. THIS WAIVER IS KNOWINGLY,
INTENTIONALLY, VOLUNTARILY, UNCONDITIONALLY AND IRREVOCABLY MADE BY GRANTOR,
AGENT AND BENEFICIARY AND EACH OF GRANTOR, AGENT AND BENEFICIARY ACKNOWLEDGES
THAT NEITHER BENEFICIARY, AGENT, GRANTOR NOR ANY PERSON ACTING ON BEHALF OF
BENEFICIARY, AGENT OR GRANTOR HAS MADE ANY REPRESENTATION OF FACT TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.
EACH OF GRANTOR, AGENT AND BENEFICIARY ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED IN THE SIGNING OF THIS MORTGAGE AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS
HAD THE OPPORTUNITY TO FULLY DISCUSS THIS WAIVER WITH SUCH COUNSEL. EACH OF
GRANTOR, AGENT AND BENEFICIARY ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS
THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION.
9.16 Waiver of Redemption. Grantor waives all right of redemption of
the Mortgaged Property.
9.17 Severability; Amendments; Counterparts. The invalidity or
unenforceability of any provision of this Mortgage shall not affect the
validity or enforceability of any other provision, and all other provisions
shall remain in full force and effect. This Mortgage contains the entire
agreement among the parties as to the rights granted and the obligations
assumed in this Mortgage. This Mortgage may not be amended or modified
except by a writing signed by the party against whom enforcement is sought.
This Mortgage may be executed in any number of counterparts, and all such
counterparts taken together shall be deemed an original instrument.
EXECUTED as of the date first above written.
OTR EXPRESS, INC.,
a Kansas corporation
By : /s/ William P. Ward
Name: William P. Ward
Title: President
AGREED AND ACCEPTED as of the date first above written:
AGENT:
ASSOCIATES COMMERCIAL CORPORATION, as Agent
By: /s/ J. R. Conkin Jr.
Name: J. R. Conkin Jr.
Title: Senior Vice President
BENEFICIARIES:
ASSOCIATES COMMERCIAL CORPORATION
By: /s/ J. R. Conkin Jr.
Name: J. R. Conkin Jr.
Title: Senior Vice President
ASSOCIATES LEASING, INC.
By: /s/ J. R. Conkin Jr.
Name: J. R. Conkin Jr.
Title: Senior Vice President
NAVISTAR FINANCIAL CORPORATION
By: /s/ Rudd Hefner
Name: Rudd Hefner
Title: Credit Manager
MERCEDES BENZ CREDIT CORPORATION
By: /s/ David R. Disanto
Name: David R. Disanto
Title: Managing Director
PACCAR FINANCIAL CORPORATION
By: /s/ Dallas J. Becker
Name: Dallas J. Becker
Title: Corporate Portfolio Manager
STATE OF KANSAS
COUNTY OF
On this February , 2001, before me, the undersigned, a Notary Public
in and for the county and state aforesaid, personally appeared
, the of OTR EXPRESS,
INC., a Kansas corporation, to me personally known to be the same person who
executed the within and foregoing instrument of writing and acknowledged to
me that the same was executed as a free and voluntary act and deed for the
uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and Notary Seal the day
and year last above written.
Notary Public, State of Kansas
My commission expires:
STATE OF TEXAS
COUNTY OF
On this February , 2001, before me, the undersigned, a Notary Public
in and for the county and state aforesaid, personally appeared
, the of ASSOCIATES
COMMERCIAL CORPORATION., a Delaware corporation, to me personally known to be
the same person who executed the within and foregoing instrument of writing
and acknowledged to me that the same was executed as a free and voluntary act
and deed for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and Notary Seal the
day and year last above written.
Notary Public, State of Texas
My commission expires:
STATE OF TEXAS
COUNTY OF
On this February , 2001, before me, the undersigned, a Notary Public
in and for the county and state aforesaid, personally appeared
, the of ASSOCIATES
LEASING, INC.., a Indiana corporation, to me personally known to be the same
person who executed the within and foregoing instrument of writing and
acknowledged to me that the same was executed as a free and voluntary act and
deed for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and Notary Seal the
day and year last above written.
Notary Public, State of Texas
My commission expires:
STATE OF
COUNTY OF
On this February , 2001, before me, the undersigned, a Notary Public
in and for the county and state aforesaid, personally appeared
, the of NAVISTAR FINANCIAL
CORPORATION, a corporation, to me personally known to be
the same person who executed the within and foregoing instrument of writing
and acknowledged to me that the same was executed as a free and voluntary act
and deed for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and Notary Seal the day
and year last above written.
Notary Public, State of
My commission expires:
STATE OF
COUNTY OF
On this February , 2001, before me, the undersigned, a Notary Public
in and for the county and state aforesaid, personally appeared
, the of MERCEDES BENZ
CREDIT CORPORATION, a corporation, to me personally known
to be the same person who executed the within and foregoing instrument of
writing and acknowledged to me that the same was executed as a free and
voluntary act and deed for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and Notary Seal the
day and year last above written.
Notary Public, State of
My commission expires:
STATE OF
COUNTY OF
On this February , 2001, before me, the undersigned, a Notary Public
in and for the county and state aforesaid, personally appeared
, the of PACCAR FINANCIAL
CORPORATION, a corporation, to me personally known to be
the same person who executed the within and foregoing instrument of writing
and acknowledged to me that the same was executed as a free and voluntary act
and deed for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and Notary Seal the
day and year last above written.
Notary Public, State of
My commission expires:
EXHIBIT AA"
LEGAL DESCRIPTION
EXHIBIT AB"
FINANCING AGREEMENTS
EXHIBIT AC"
LIST OF LENDERS