EXHIBIT 10.22
OBLIGATIONS SECURED HEREBY PROVIDE FOR
A FLUCTUATING INTEREST RATE
AMENDED AND RESTATED
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (INDIANA)
BY AND FROM
THE PANTRY, INC., ``MORTGAGOR''
TO
FIRST UNION NATIONAL BANK,
IN ITS CAPACITY AS AGENT, ``MORTGAGEE''
DATED AS OF OCTOBER 23, 1997
THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING
TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE
DESCRIBED HEREIN
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
F. THOMAS MULLER, ESQ.
O'MELVENY & MYERS LLP
400 SOUTH HOPE STREET
LOS ANGELES, CALIFORNIA
FILE 154,607-004
AMENDED AND RESTATED
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (INDIANA)
THIS AMENDED AND RESTATED MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF
RENTS AND LEASES AND FIXTURE FILING (Indiana) (this "MORTGAGE") is dated as of
October 23, 1997, by and from THE PANTRY, INC., a Delaware corporation
("MORTGAGOR"), whose address is 1801 Douglas Drive, Sanford, North Carolina
27330, to FIRST UNION NATIONAL BANK, as Agent ("AGENT") for the lenders party to
the Credit Agreement (defined below) (such lenders, together with their
respective successors and assigns, collectively, the "LENDERS"), having an
address at 301 South College Street, Charlotte, North Carolina 28288 (Agent,
together with its successors and assigns, "MORTGAGEE").
R E C I T A L S
A. Mortgagee is the assignee, owner and holder of those certain mortgages
described on Exhibit B hereto (the "ORIGINAL MORTGAGES") and the obligations
secured thereby, which encumber the properties described on Exhibit A hereto.
B. Mortgagee and Mortgagor now desire to amend and restate the Original
Mortgages to contain all of the terms and conditions contained herein and in the
Credit Agreement.
NOW, THEREFORE, Mortgagee and Mortgagor hereby amend and restate the
Original Mortgages in their entirety to provide as follows:
ARTICLE 1
DEFINITIONS
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SECTION 1.1 DEFINITIONS. All capitalized terms used herein without
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definition shall have the respective meanings ascribed to them in that certain
Credit Agreement dated as of even date herewith (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT") among Mortgagor,
the Lenders, Canadian Imperial Bank of Commerce, as Syndication Agent, and
Mortgagee. As used herein, the following terms shall have the following
meanings:
1.1.1 "INDEBTEDNESS": (1) All indebtedness of Mortgagor to Mortgagee
and the Lenders, including, without limitation, the sum of all (a) principal,
interest and other amounts evidenced or secured by the Loan Documents, and (b)
principal, interest and other amounts which may hereafter be loaned by Mortgagee
or any of the Lenders under or in connection with
the Credit Agreement or any of the other Loan Documents, whether evidenced by a
promissory note or other instrument which, by its terms, is secured hereby, and
(2) all other indebtedness, obligations and liabilities now or hereafter
existing of any kind of Mortgagor to Mortgagee or any of the Lenders under
documents which recite that they are intended to be secured by this Mortgage.
1.1.2 "MORTGAGED PROPERTY": All of Mortgagor's interest in (1) the
fee interest in the real property described in Exhibit A attached hereto and
incorporated herein by this reference, together with any greater estate therein
as hereafter may be acquired by Mortgagor (the "LAND"), (2) all improvements now
owned or hereafter acquired by Mortgagor, 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 Mortgagor 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 (the "FIXTURES"), (4) all right, title and interest of
Mortgagor in and to all goods, accounts, general intangibles, instruments,
documents, chattel paper and all other personal property of any kind or
character, including such items of personal property as defined in the UCC
(defined below), now owned or hereafter acquired by Mortgagor and now or
hereafter affixed to, placed upon, used in connection with, arising from or
otherwise related to the Land and Improvements (the "PERSONALTY"), (5) all
reserves, escrows or impounds required under the Credit Agreement and all
deposit accounts maintained by Mortgagor with respect to the Mortgaged Property,
(6) all leases, licenses, concessions, occupancy agreements or other agreements
(written or oral, now or at any time in effect) which grant to any Person 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
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 construction, use, occupancy, operation, maintenance, enjoyment
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, (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 Mortgagor, and (12) all of Mortgagor'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, Fixtures or Personalty. As used
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in this Mortgage, the term "MORTGAGED PROPERTY" shall mean all or, where the
context permit or requires, any portion of the above or any interest therein.
1.1.3 "OBLIGATIONS": All of the agreements, covenants, conditions,
warranties, representations and other obligations of Mortgagor (including,
without limitation, the obligation to repay the Indebtedness) under the Credit
Agreement and the other Loan Documents.
1.1.4 "UCC": The Uniform Commercial Code of Indiana or, if the
creation, perfection and enforcement of any security interest herein granted is
governed by the laws of a state other than Indiana, then, as to the matter in
question, the Uniform Commercial Code in effect in that state.
ARTICLE 2
GRANT
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SECTION 2.1 GRANT. To secure the full and timely payment of the
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Indebtedness and the full and timely performance of the Obligations, Mortgagor
MORTGAGES, GRANTS, BARGAINS, ASSIGNS, SELLS and CONVEYS, to Mortgagee the
Mortgaged Property, subject, however, to the Permitted Encumbrances, TO HAVE AND
TO HOLD the Mortgaged Property to Mortgagee, and Mortgagor does hereby bind
itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to
the Mortgaged Property unto Mortgagee.
ARTICLE 3
WARRANTIES, REPRESENTATIONS AND COVENANTS
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Mortgagor warrants, represents and covenants to Mortgagee as follows:
SECTION 3.1 TITLE TO MORTGAGED PROPERTY AND LIEN OF THIS INSTRUMENT.
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Mortgagor owns the Mortgaged Property free and clear of any liens, claims or
interests, except the Permitted Encumbrances. This Mortgage creates valid,
enforceable first priority liens and security interests against the Mortgaged
Property.
SECTION 3.2 FIRST LIEN STATUS. Mortgagor shall preserve and protect
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the first lien and security interest status of this Mortgage and the other Loan
Documents. If any lien or security interest other than the Permitted
Encumbrances is asserted against the Mortgaged Property, Mortgagor shall
promptly, and at its expense, (a) give Mortgagee 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 or contest the same in compliance with the requirements of the
Credit Agreement (including the requirement of providing a bond or other
security satisfactory to Mortgagee).
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SECTION 3.3 PAYMENT AND PERFORMANCE. Mortgagor shall pay the
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Indebtedness when due under the Loan Documents and shall perform the Obligations
in full when they are required to be performed.
SECTION 3.4 REPLACEMENT OF FIXTURES AND PERSONALTY. Mortgagor shall
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not, without the prior written consent of Mortgagee, permit any of the Fixtures
or Personalty 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 Mortgagor subject to the liens and
security interests of this Mortgage and the other Loan Documents, and free and
clear of any other lien or security interest except such as may be permitted
under the Credit Agreement or first approved in writing by Mortgagee.
SECTION 3.5 INSPECTION. Mortgagor shall permit Mortgagee and the
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Lenders, and their respective agents, representatives and employees, upon
reasonable prior notice to Mortgagor, to inspect the Mortgaged Property and all
books and records of Mortgagor located thereon, and to conduct such
environmental and engineering studies as Mortgagee or the Lenders may require,
provided that such inspections and studies shall not materially interfere with
the use and operation of the Mortgaged Property.
SECTION 3.6 OTHER COVENANTS. All of the covenants in the Credit
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Agreement are incorporated herein by reference and, together with covenants in
this Article, shall be covenants running with the land.
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SECTION 3.7 CONDEMNATION AWARDS AND INSURANCE PROCEEDS.
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3.7.1 Condemnation Awards. Mortgagor assigns all awards and
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compensation to which it is entitled for any condemnation or other taking, or
any purchase in lieu thereof, to Mortgagee and authorizes Mortgagee to collect
and receive such awards and compensation and to give proper receipts and
acquittances therefor, subject to the terms of the Credit Agreement.
3.7.2 Insurance Proceeds. Mortgagor assigns to Mortgagee all
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proceeds of any insurance policies insuring against loss or damage to the
Mortgaged Property. Mortgagor authorizes Mortgagee to collect and receive such
proceeds and authorizes and directs the issuer of each of such insurance
policies to make payment for all such losses directly to Mortgagee, instead of
to Mortgagor and Mortgagee jointly.
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ARTICLE 4
DEFAULT AND FORECLOSURE
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SECTION 4.1 REMEDIES. If an Event of Default exists, Mortgagee may,
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at Mortgagee's election, exercise any or all of the following rights, remedies
and recourses:
4.1.1 Acceleration. Declare the Indebtedness to be immediately due
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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 Mortgagor), whereupon the same
shall become immediately due and payable.
4.1.2 Entry on Mortgaged Property. Enter the Mortgaged Property and
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take exclusive possession thereof and of all books, records and accounts
relating thereto or located thereon. If Mortgagor remains in possession of the
Mortgaged Property after an Event of Default and without Mortgagee's prior
written consent, Mortgagee may invoke any legal remedies to dispossess
Mortgagor.
4.1.3 Operation of Mortgaged Property. Hold, lease, develop, manage,
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operate or otherwise use the Mortgaged Property upon such terms and conditions
as Mortgagee may deem reasonable under the circumstances (making such repairs,
alternations, additions and improvements and taking other actions, from time to
time, as Mortgagee deems necessary or desirable), and apply all Rents and other
amounts collected by Mortgagee in connection therewith in accordance with the
provisions of Section 4.7.
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4.1.4 Foreclosure and Sale. Institute proceedings for the complete
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foreclosure of this Mortgage, either by judicial action or by power of sale, in
which case the Mortgaged Property may be sold for cash or credit in one or more
parcels. With respect to any notices required or permitted under the UCC,
Mortgagor agrees that five days' prior written notice shall be deemed
commercially reasonable. At any such sale by virtue of any judicial
proceedings, power of sale, or any other legal right, remedy or recourse, the
title to and right of possession of any such property shall pass to the
purchaser thereof, and to the fullest extent permitted by law, Mortgagor shall
be completely and irrevocably divested of all of its right, title, interest,
claim, equity, equity of redemption, and demand whatsoever, either at law or in
equity, in and to the property sold and such sale shall be a perpetual bar both
at law and in equity against Mortgagor, and against all other Persons claiming
or to claim the property sold or any part thereof, by, through or under
Mortgagor. Mortgagee or any of the Lenders may be a purchaser at such sale. If
Mortgagee is the highest bidder, Mortgagee may credit the portion of the
purchase price that would be distributed to Mortgagee against the Indebtedness
in lieu of paying cash. In the event this Mortgage is foreclosed by judicial
action, appraisement of the Mortgaged Property is waived.
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4.1.5 Receiver. Make application to a court of competent
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jurisdiction for, and obtain from such court as a matter of strict right and
without notice to Mortgagor or regard to the adequacy of the Mortgaged Property
for the repayment of the Indebtedness, the appointment of a receiver of the
Mortgaged Property, and Mortgagor irrevocably consents to such appointment. Any
such receiver shall have all the usual powers and duties of receivers in similar
cases, including the full power to rent, maintain and otherwise operate the
Mortgaged Property upon such terms as may be approved by the court, and shall
apply such Rents in accordance with the provisions of Section 4.7.
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4.1.6 Other. Exercise all other rights, remedies and recourses
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granted under the Loan Documents or otherwise available at law or in equity.
SECTION 4.2 SEPARATE SALES. The Mortgaged Property may be sold in
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one or more parcels and in such manner and order as Mortgagee 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 4.3 REMEDIES CUMULATIVE, CONCURRENT AND NONEXCLUSIVE.
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Mortgagee and the Lenders shall have all rights, remedies and recourses granted
in the Loan Documents and available at law or equity (including the UCC), which
rights (a) shall be cumulated and concurrent, (b) may be pursued separately,
successively or concurrently against Mortgagor or others obligated under the
Loan Documents, or against the Mortgaged Property, or against any one or more of
them, at the sole discretion of Mortgagee or the Lenders, (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 Mortgagee or the Lenders in the enforcement of any
rights, remedies or recourses under the Loan Documents or otherwise at law or
equity shall be deemed to cure any Event of Default.
SECTION 4.4 RELEASE OF AND RESORT TO COLLATERAL. Mortgagee may
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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 interest
created in or evidenced by the Loan Documents or their status as a first and
prior lien and security interest in and to the Mortgaged Property. For payment
of the Indebtedness, Mortgagee may resort to any other security in such order
and manner as Mortgagee may elect.
SECTION 4.5 WAIVER OF REDEMPTION, NOTICE AND MARSHALLING OF ASSETS.
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To the fullest extent permitted by law, Mortgagor hereby irrevocably and
unconditionally waives and releases (a) all benefit that might accrue to
Mortgagor by virtue of any present or future statute of limitations or law or
judicial decision exempting the Mortgaged Property from attachment,
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levy or sale on execution or providing for any stay of execution, exemption from
civil process, redemption or extension of time for payment, (b) all notices of
any Event of Default or of Mortgagee's election to exercise or the actual
exercise of any right, remedy or recourse provided for under the Loan Documents,
and (c) any right to a marshalling of assets or a sale in inverse order of
alienation.
SECTION 4.6 DISCONTINUANCE OF PROCEEDINGS. If Mortgagee or the
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Lenders shall have proceeded to invoke any right, remedy or recourse permitted
under the Loan Documents and shall thereafter elect to discontinue or abandon it
for any reason, Mortgagee or the Lenders shall have the unqualified right to do
so and, in such an event, Mortgagor, Mortgagee, and the Lenders shall be
restored to their former positions with respect to the Indebtedness, the
Obligations, the Loan Documents, the Mortgaged Property and otherwise, and the
rights, remedies, recourses and powers of Mortgagee and the Lenders shall
continue and 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 Mortgagee or the Lenders thereafter to exercise any
right, remedy or recourse under the Loan Documents for such Event of Default.
SECTION 4.7 ALLOCATION OF PROCEEDS. The proceeds of any sale of, and
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the Rents and other amounts generated by the holding, leasing, management,
operation or other use of the Mortgaged Property, shall be applied by Mortgagee
(or the receiver, if one is appointed) in the following order unless otherwise
required by applicable law:
4.7.1 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, including the repayment of the amounts evidenced by any receiver's
certificates, (2) court costs, (3) attorneys' and accountants' fees and
expenses, and (4) costs of advertisement;
4.7.2 to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Mortgagee in its sole
discretion may determine; and
4.7.3 the balance, if any, to the payment of the Persons legally
entitled thereto.
SECTION 4.8 OCCUPANCY AFTER FORECLOSURE. Any sale of the Mortgaged
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Property or any part thereof in accordance with Section 4.1.4 will divest all
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right, title and interest of Mortgagor in and to the property sold. Subject to
applicable law, any purchaser at a foreclosure sale will receive immediate
possession of the property purchased. If Mortgagor retains possession of such
property or any part thereof subsequent to such sale, Mortgagor will be
considered a tenant at sufferance of the purchaser, and will, if Mortgagor
remains in possession
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after demand to remove, be subject to eviction and removal, forcible or
otherwise, with or without process of law.
SECTION 4.9 ADDITIONAL ADVANCES AND DISBURSEMENTS; COSTS OF
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ENFORCEMENT.
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4.9.1 If any Event of Default exists, Mortgagee and each of the
Lenders shall have the right, but not the obligation, to cure such Event of
Default in the name and on behalf of Mortgagor. All sums advanced and expenses
incurred at any time by Mortgagee or any Lender under this Section, or otherwise
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under this Mortgage or any of the other Loan 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 or rates at which
interest is then computed on the Indebtedness, and all such sums, together with
interest thereon, shall be secured by this Mortgage.
4.9.2 Mortgagor shall pay all expenses (including reasonable
attorneys' fees and expenses) of or incidental to the perfection and enforcement
of this Mortgage and the other Loan Documents, or the enforcement, compromise or
settlement of the Indebtedness or any claim under this Mortgage and the other
Loan Documents, and for the curing thereof, or for defending or asserting the
rights and claims of Mortgagee in respect thereof, by litigation or otherwise.
SECTION 4.10 NO MORTGAGEE IN POSSESSION. Neither the enforcement of
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any of the remedies under this Article, the assignment of the Rents and Leases
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under Article 5, the security interests under Article 6, nor any other remedies
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afforded to Mortgagee under the Loan Documents, at law or in equity shall cause
Mortgagee or any Lender to be deemed or construed to be a mortgagee in
possession of the Mortgaged Property, to obligate Mortgagee or any Lender 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 5
ASSIGNMENT OF RENTS AND LEASES
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SECTION 5.1 ASSIGNMENT. In furtherance of and in addition to the
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assignment made by Mortgagor in Section 2.1 of this Mortgage, Mortgagor hereby
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absolutely and unconditionally assigns, sells, transfers and conveys to
Mortgagee all of its right, title and interest in and to all Leases, whether now
existing or hereafter entered into, and all of its right, title and interest in
and to all Rents. If permitted under applicable law, this assignment is an
absolute assignment and not merely an assignment for additional security. So
long as no Event of Default shall have occurred and be continuing, Mortgagor
shall have a revocable license from Mortgagee to exercise all rights extended to
the landlord under the Leases, including the right to receive and collect all
Rents and to hold the Rents in trust for use in the payment and
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performance of the Obligations and to otherwise use the same. The foregoing
license is granted subject to the conditional limitation that no Event of
Default shall have occurred and be continuing. Upon the occurrence and during
the continuance of an Event of Default, whether or not legal proceedings have
commenced, and without regard to waste, adequacy of security for the Obligations
or solvency of Mortgagor, the license herein granted shall automatically expire
and terminate, without notice by Mortgagee (any such notice being hereby
expressly waived by Mortgagor).
SECTION 5.2 PERFECTION UPON RECORDATION. Mortgagor acknowledges that
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Mortgagee has taken all actions necessary to obtain, and that upon recordation
of this Mortgage Mortgagee shall have, to the extent permitted under applicable
law, a valid and fully perfected first priority present assignment of the Rents
arising out of the Leases and all security for such Leases. Mortgagor
acknowledges and agrees that upon recordation of this Mortgage Mortgagee's
interest in the Rents shall be deemed to be fully perfected, ``choate'' and
enforced as to Mortgagor and all third parties, including, without limitation,
any subsequently appointed trustee in any case under Title 11 of the United
States Code (the "BANKRUPTCY CODE"), without the necessity of commencing a
foreclosure action with respect to this Mortgage, making formal demand for the
Rents, obtaining the appointment of a receiver or taking any other affirmative
action.
SECTION 5.3 BANKRUPTCY PROVISIONS. Without limitation of the
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absolute nature of the assignment of the Rents hereunder, Mortgagor and
Mortgagee agree that (a) this Mortgage shall constitute a ``security agreement''
for purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest
created by this Mortgage extends to property of Mortgagor acquired before the
commencement of a case in bankruptcy and to all amounts paid as Rents and (c)
such security interest shall extend to all Rents acquired by the estate after
the commencement of any case in bankruptcy.
SECTION 5.4 NO MERGER OF ESTATES. So long as part of the
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Indebtedness and the Obligations secured hereby remain unpaid and undischarged,
the fee and leasehold estates to the Mortgaged Property shall not merge, but
shall remain separate and distinct, notwithstanding the union of such estates
either in Mortgagor, Mortgagee, any tenant or any third party by purchase or
otherwise.
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ARTICLE 6
SECURITY AGREEMENT
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SECTION 6.1 SECURITY INTEREST. This Mortgage constitutes a "Security
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Agreement" on personal property within the meaning of the UCC and other
applicable law and with respect to the Personalty, Fixtures, Leases, Rents and
Property Agreements. To this end, Mortgagor grants to Mortgagee a first and
prior security interest in the Personalty, Fixtures, 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 Mortgagee 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 Mortgagee with respect to the Personalty, Fixtures, Leases,
Rents and Property Agreements sent to Mortgagor at least five (5) days prior to
any action under the UCC shall constitute reasonable notice to Mortgagor.
SECTION 6.2 FINANCING STATEMENTS. Mortgagor shall execute and
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deliver to Mortgagee, in form and substance satisfactory to Mortgagee, such
financing statements and such further assurances as Mortgagee may, from time to
time, reasonably consider necessary to create, perfect and preserve Mortgagee's
security interest hereunder and Mortgagee 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.
Mortgagor's chief executive office is in the State of North Carolina at the
address set forth in the first paragraph of this Mortgage.
SECTION 6.3 FIXTURE FILING. This Mortgage shall also constitute a
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"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 (Mortgagor)
and Secured Party (Mortgagee) as set forth in the first paragraph of this
Mortgage.
ARTICLE 7
MISCELLANEOUS
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SECTION 7.1 NOTICES. Any notice required or permitted to be given
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under this Mortgage shall be given in accordance with the provisions of the
Credit Agreement.
SECTION 7.2 COVENANTS RUNNING WITH THE LAND. All Obligations
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contained in this Mortgage are intended by Mortgagor and Mortgagee to be, and
shall be construed as, covenants running with the Mortgaged Property. As used
herein, "Mortgagor" 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. All Persons who may have or acquire an interest in the
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Mortgaged Property shall be deemed to have notice of, and be bound by, the terms
of the Credit Agreement and the other Loan Documents; however, no such party
shall be entitled to any rights thereunder without the prior written consent of
Mortgagee.
SECTION 7.3 ATTORNEY-IN-FACT. Mortgagor hereby irrevocably appoints
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Mortgagee 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 Mortgagee deems
appropriate to protect Mortgagee's interest, if Mortgagor shall fail to do so
within ten (10) days after written request by Mortgagee, (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, Personalty, Fixtures 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
Mortgagee's security interests and rights in or to any of the Mortgaged
Property, and (d) while any Event of Default exists, to perform any obligation
of Mortgagor hereunder, however: (1) Mortgagee shall not under any circumstances
be obligated to perform any obligation of Mortgagor; (2) any sums advanced by
Mortgagee in such performance shall be added to and included in the Indebtedness
and shall bear interest at the rate or rates at which interest is then computed
on the Indebtedness; (3) Mortgagee as such attorney-in-fact shall only be
accountable for such funds as are actually received by Mortgagee; and (4)
Mortgagee shall not be liable to Mortgagor or any other person or entity for any
failure to take any action which it is empowered to take under this Section.
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SECTION 7.4 SUCCESSORS AND ASSIGNS. This Mortgage shall be binding
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upon and inure to the benefit of Mortgagee, the Lenders, and Mortgagor and their
respective successors and assigns. Mortgagor shall not, without the prior
written consent of Mortgagee, assign any rights, duties or obligations
hereunder.
SECTION 7.5 NO WAIVER. Any failure by Mortgagee to insist upon
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strict performance of any of the terms, provisions or conditions of the Loan
Documents shall not be deemed to be a waiver of same, and Mortgagee or the
Lenders shall have the right at any time to insist upon strict performance of
all of such terms, provisions and conditions.
SECTION 7.6 CREDIT AGREEMENT. If any conflict or inconsistency
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exists between this Mortgage and the Credit Agreement, the Credit Agreement
shall govern, except for Section 7.9 which shall, in all cases, control.
SECTION 7.7 RELEASE OR RECONVEYANCE. Upon payment in full of the
-----------------------
Indebtedness and performance in full of the Obligations, Mortgagee, at
Mortgagor's expense, shall release the liens and security interests created by
this Mortgage or reconvey the Mortgaged Property to
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Mortgagor. In addition, as long as no Event of Default has occurred and is then
continuing or would be caused thereby, if Mortgagor sells or transfers for value
any portion of the Mortgaged Property as permitted under Section 7.7 of the
Credit Agreement, Mortgagee shall release the liens and security interests
created by this Mortgage on such Mortgaged Property or reconvey such Mortgaged
Property to Mortgagor, concurrently with the consummation of such sale or other
transfer. Such release or reconveyance shall be at Mortgagor's sole cost and
expense, and only upon not less than thirty days' prior written notice to
Mortgagee. Any of the terms and provisions of this Mortgage that are intended
to survive, shall nevertheless survive the release or satisfaction of this
Mortgage whether voluntarily granted by Mortgagee, as a result of a judgment
upon judicial foreclosure of this Mortgage or in the event a deed in lieu of
foreclosure is granted by Mortgagor to Mortgagee.
SECTION 7.8 WAIVER OF STAY, MORATORIUM AND SIMILAR RIGHTS. Mortgagor
---------------------------------------------
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 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 Mortgagor
and Mortgagee or any rights or remedies of Mortgagee or the Lenders.
SECTION 7.9 APPLICABLE LAW. The provisions of this Mortgage
--------------
regarding the creation, perfection and enforcement of the liens and security
interests herein granted and warranties (statutory or otherwise) of title shall
be governed by and construed under the laws of the state in which the Mortgaged
Property is located. All other provisions of this Mortgage and the Obligations
shall be governed by the laws of the State of New York (including, without
limitation, Section 5-1401 of the General Obligations Law of the State of New
York), without regard to conflicts of laws principles.
SECTION 7.10 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 7.11 ENTIRE AGREEMENT. This Mortgage and the other Loan
----------------
Documents embody the entire agreement and understanding between Mortgagee and
Mortgagor and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. Accordingly, the
Loan 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.
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ARTICLE 8
LOCAL LAW PROVISIONS
--------------------
SECTION 8.1 This Mortgage shall be deemed to constitute a
continuously perfected fixture filing to be filed of record in the office of the
Recorder of the County in Indiana referred to in Exhibit A hereto, pursuant to
IC 26-1-9-402 and 26-1-9-403. Part of the Mortgaged Property is or may become
fixtures. It is intended that, as to such fixtures, this Mortgage shall be
effective as a financing statement filed as a fixture filing from the date of
the filing of the Mortgage for record with the Recorder of such County in
Indiana. The information provided in this paragraph is provided in order that
this Mortgage shall comply with the requirements of the Uniform Commercial Code
as enacted in the State of Indiana ("State"), for a mortgage instrument to be
filed as a financing statement. Mortgagor is the "debtor" and its name and
mailing address are set forth in the preamble of this Mortgage. The "secured
party" is Mortgagee and its name and mailing address from which information
concerning the security interest granted herein may be obtained are as set forth
in the preamble of this Mortgage. A statement describing the portion of the
Mortgaged Property comprising the goods or other Personal Property that may now
be or hereafter become fixtures hereby secured is set forth in the Granting
Clauses hereof. The record owner of the Mortgaged Property is The Pantry, Inc.
SECTION 8.2 The Notes/1/, by their terms, shall mature on October 31,
2002.
SECTION 8.3 The Obligations secured by this Mortgage include, without
limitation, judgment(s) or final decree(s) rendered to collect any money
obligations of Mortgagor to Mortgagee and/or to enforce the performance or
collection of all covenants, agreements and liabilities of Mortgagor under this
Mortgage, the Credit Agreement and the other Loan Documents.
SECTION 8.4 In the event a court of competent jurisdiction construes
the assignment of the Rents set forth in Article 5 of this Mortgage to be
collateral that secures the Obligations rather than an absolute assignment, the
assignment shall constitute an assignment of rents as set forth in IC 32-1-2-
16.3 and thereby creates a security interest in the Rents that will be perfected
upon the recording of this Mortgage.
SECTION 8.5 Anything contained herein or in IC 32-8-16-1.5 to the
contrary notwithstanding, no waiver made by Mortgagor in this Mortgage, the
Credit Agreement or any of the other Loan Documents shall constitute the
consideration for or be deemed to be a waiver or release by Mortgagee or any
judgment holder of the Obligations of the right to seek a deficiency judgment
against the Mortgagor or any other person or entity who may be personally
- ---------------------------
/1/ Define "Notes".
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liable for the Obligations, which right to seek a deficiency judgment is hereby
reserved, preserved and retained by Mortgagee for its own behalf and its
successors and assigns.
SECTION 8.6 Mortgagee shall be entitled to all rights and remedies
that a mortgagee would have under Indiana law or in equity in addition to all
rights and remedies it may have hereunder. Where any provision of this Mortgage
is inconsistent with any provision of the laws of Indiana regulating the
creation or enforcement of a lien or security interest in real or personal
property including, but not by way of limitation, IC 34-1-53-1 Foreclosure of
--------------
Mortgages, the provisions of Indiana law shall take precedence over the
- ---------
provisions of this Mortgage, but shall not invalidate or render unenforceable
any other provisions of this Mortgage that can be construed in a manner
consistent with Indiana law. Should applicable Indiana law confer any rights or
impose any duties inconsistent with or in addition to any of the provisions of
this Mortgage, the affected provisions of this Mortgage shall be considered
amended to conform to such applicable law, but all other provisions hereof shall
remain in full force and effect without modification. To the extent the laws of
Indiana limit (i) the availability of the exercise of any of the remedies set
forth herein, including without limitation the remedies involving a power of
sale on the part of Mortgagee and the right of Mortgagee to exercise self-help
in connection with the enforcement of the terms of this Mortgage, or (ii) the
enforcement of waivers and indemnities made by Mortgagor, such remedies,
waivers, or indemnities shall be exercisable or enforceable, any provisions in
this Mortgage to the contrary notwithstanding, if, and to the extent, permitted
by the laws in force at the time of the exercise of such remedies or the
enforcement of such waivers or indemnities without regard to the enforceability
of such remedies, waivers or indemnities at the time of the execution and
delivery of this Mortgage.
SECTION 8.7 In the event Mortgagor fails to sign Uniform Commercial
Code financing Statements upon Mortgagee's request, Mortgagee is hereby
authorized by Mortgagor to execute and file financing statements signed only by
a representative of Mortgagee covering the security interest of Mortgagee in any
of the Personal Property and/or fixtures constituting part of the Mortgaged
Property.
SECTION 8.8 Mortgagor certifies and warrants to Mortgagee, to the
best of Mortgagor's knowledge, after diligent inquiry and investigation, none of
the Mortgaged Property is within the definition of the term "property" contained
in Section 6 (IC 13-11-2-174) of the Indiana Responsible Property Transfer Law
("IRPTL") (IC13-25-3). Mortgagor shall observe, perform and comply with the
requirements of IRPTL in connection with the Mortgage and the transaction
evidenced by the Mortgage.
SECTION 8.9 Notwithstanding anything contained in this Mortgage to
the contrary, this Mortgage shall secure (i) a maximum amount not exceeding One
Hundred Fifty Million Dollars ($150,000,000.00), exclusive of any items
described in (ii) below, including any additional advances made from time to
time after the date hereof pursuant to this Mortgage or
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the other Loan Documents whether made as a part of the Obligations secured
hereby, made at the option of Mortgagee, made after a reduction to a zero (0) or
other balance, or made otherwise, (ii) all other amounts payable by Mortgagor or
advance by Mortgagee for the account, or on behalf, of Mortgagor, pursuant to
this Mortgage or other Loan Documents, including amounts advanced with respect
to the Mortgaged Property for the payment of taxes, assessments, insurance
premiums and other costs and impositions incurred for the protection of the
Mortgaged Property to the same extent as if the future obligations and advances
were made ont he date of execution of the Mortgage; and (iii) future
modifications, extensions, and renewals of the Obligations secured by this
Mortgage and/or the other Loan Documents. Pursuant to IC 32-8-11-9, the lien of
this Mortgage with respect to any future advances, modifications, extensions and
renewals referred to herein and made from time to time shall have the same
priority to which this Mortgage otherwise would be entitled as of the date the
Mortgage is executed and recorded without regard to the fact that any such
future advance, modification, extension or renewal may occur after the Mortgage
is executed.
SECTION 8.10 If, after the date of this Mortgage, Mortgagor acquires
any property located on and used in connection with the Mortgaged Property and
that by the terms of this Mortgage is required or intended to be encumbered by
this Mortgage, the property shall become subject to the lien and security
interest of this Mortgage immediately upon its acquisition by Mortgagor and
without any further mortgage, conveyance, assignment or transfer. Nevertheless,
upon Mortgagee's request at any time, Mortgagor will execute, acknowledge and
deliver any additional instruments and assurances of title and will do or cause
to be done anything further that is reasonably necessary for carrying out the
intent of this Mortgage.
SECTION 8.11 Notwithstanding anything in this Mortgage to the
contrary, in the event of a conflict between any of the terms and provisions of
this Article and those contained in the other Articles of this Mortgage, the
terms and provisions of this Article shall control.
SECTION 8.12 In addition to having any other right or remedy
available at law or in equity, Mortgagee shall have the option pursuant to IC
26-1-9-501 of either (i) proceeding under the UCC and exercising such rights and
remedies as may be provided to a secured party by the UCC with respect to all or
any portion of the Mortgaged Property which is Fixtures and Personalty
(including, without limitation, taking possession of and selling such Fixtures
and Personalty) or (ii) treating such Fixtures and Personalty as real property
and proceeding with respect to both the real and personal property constituting
the Mortgaged Property in accordance with Mortgagee's rights, powers and
remedies with respect to the real property (in which event the default
provisions of the UCC shall not apply).
SECTION 8.13 When the Indebtedness hereby secured, or any part
thereof, shall become due, whether by acceleration or otherwise, Mortgagee shall
have the right to foreclose the lien hereof for such Indebtedness or part
thereof. In any suit to foreclose the lien hereof or
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enforce any other remedy of Mortgagee under this Mortgage or the Note, there
shall be allowed and included as additional indebtedness in the decree for sale
or other judgment or decree all expenditures and expenses which may be paid or
incurred by or on behalf of Mortgagee for attorneys' fees, appraiser's fees,
outlays for documentary and expert evidence, stenographers' charges, publication
costs, and costs (which may be estimated as to items to be expended after entry
of the decree) of procuring all such abstracts of title, title searches and
examinations, title insurance policies, and similar data and assurances with
respect to title as Mortgagee may deem reasonably necessary either to prosecute
such suit or to evidence to bidders at any sale which may be had pursuant to
such decree the true condition of the title to or the value of the Mortgaged
Property. All expenditures and expenses of the nature in this paragraph
mentioned, and such expenses and fees as may be incurred in the protection of
the Mortgaged Property and the maintenance of the lien of this Mortgage,
including the fees of any attorney employed by Mortgagee in any litigation or
proceeding affecting this Mortgage, the Note or the Mortgaged Property,
including probate and bankruptcy proceedings, or in preparations for the
commencement or defense of any proceeding or threatened suite or proceeding,
shall be immediately due and payable by Mortgagor, with interest thereon at the
Default Rate set forth in the Credit Agreement and shall be secured by this
Mortgage.
SECTION 8.14 Upon, or at any time after the filing of a complaint to
foreclose this Mortgage, the court in which such complaint is filed may appoint
a receiver of the Mortgaged Property by the court in which such complaint is
filed, and Mortgagor consents to the appointment of such receiver for the
purpose of preserving and maximizing the value of the Mortgaged Property. Such
appointment may be made either before or after sale, without notice, without
regard to the solvency or insolvency of Mortgagor at the time of application for
such receiver and without regard to the then value of the Mortgaged Property or
whether the same shall be then occupied as a homestead or not. Such receiver
shall have all of the usual powers and duties of receivers pursuant to IC 34-12,
as amended from time to time including, without limitation, the power: (a) to
collect the rents, issues and profits of the Mortgaged Property during the
pendency of such foreclosure suit and, in case of a sale and a deficiency,
during the full statutory period of redemption, whether there be redemption or
not, as well as during any further times when Mortgagor, except for the
intervention of such receiver, would be entitled to collect such rents, issues
and profits; (b) to extend or modify any then existing leases and to make new
leases, which extensions, modifications and new leases may provide for terms to
expire, or for options to lessees to extend or renew terms to expire, beyond the
maturity date of the Indebtedness hereunder and beyond the date of the issuance
of a deed or deeds to a purchaser or purchasers at a foreclosure sale, it being
understood and agreed that any such leases, and the options or other such
provisions to be contained therein, shall be binding upon Mortgagor and all
persons whose interests in the premises are subject to the lien hereof and upon
the purchaser or purchasers at any foreclosure sale, notwithstanding any
redemption from sale, discharge of the Mortgage indebtedness, satisfaction of
any foreclosure decree, or issuance of any certificate of sale or deed to any
purchaser; and (c) all other powers which may be necessary
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or are usual in such cases for the protection, possession, control, management,
and operation of the premises during the whole of said period. The court from
time to time may authorize the receiver to apply the net income in his hands in
payment in whole or in part of: (a) the Indebtedness secured hereby, or by any
decree foreclosing this mortgage, or any tax, special assessment or other lien
which may be or become superior to the lien hereof or of such decree, provided
such application is made prior to foreclosure sale; (b) the deficiency in case
of a sale and deficiency.
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IN WITNESS WHEREOF, Mortgagor and Mortgagee have on the date set forth in
the acknowledgement hereto, effective as of the date first above written, caused
this instrument to be duly EXECUTED AND DELIVERED by authority duly given.
THE PANTRY, INC., a Delaware corporation
By: _____________________________
Name: William T. Flyg
Title: Senior Vice President, Finance, Chief
Financial Officer & Secretary
FIRST UNION NATIONAL BANK
By: _____________________________
Name: Mark Felker
Title: Senior Vice President
This instrument was prepared by F. Thomas Muller of O'Melveny & Myers LLP, 400
South Hope Street, Los Angeles, California 90071-2899.
S-1
ACKNOWLEDGEMENT
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
Before me, a Notary Public in and for said County and State, personally
appeared William T. Flyg, the Senior Vice President, Finance, Chief Financial
Officer and Secretary of THE PANTRY, INC., a Delaware corporation, and
acknowledged the execution of the foregoing instrument as such officer acting
for and on behalf of said corporation, and who, having been duly sworn, stated
that any representations therein contained are true and correct.
Witness my hand and Notarial Seal this ____ day of October, 1997.
_________________________________________
(signature)
_________________________________________
(printed name) Notary Public
My Commission Expires:
______________________ Resident of ________________ County
[SEAL]
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
Before me, a Notary Public in and for said County and State, personally
appeared Mark Felker, the Senior Vice President of FIRST UNION NATIONAL BANK, a
North Carolina corporation, and acknowledged the execution of the foregoing
instrument as such officer acting for and on behalf of said corporation, and
who, having been duly sworn, stated that any representations therein contained
are true and correct.
Witness my hand and Notarial Seal this ____ day of October, 1997.
_________________________________________
(signature)
_________________________________________
(printed name) Notary Public
My Commission Expires:
______________________ Resident of ________________ County
[SEAL]
S-2
EXHIBIT A
MORTGAGED PROPERTY
A-1
EXHIBIT B
ORIGINAL MORTGAGES
B-1