EXHIBIT 10.23
OBLIGATIONS SECURED HEREBY PROVIDE FOR
A FLUCTUATING INTEREST RATE
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (FLORIDA)
BY AND FROM
LIL' CHAMP FOOD STORES, 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 90071-2899
FILE 154,607-004
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING (FLORIDA)
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND LEASES AND
FIXTURE FILING (Florida) (this "MORTGAGE") is dated as of October 23, 1997, by
and from LIL' CHAMP FOOD STORES, INC., a Florida corporation ("MORTGAGOR"),
having an address at 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").
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 The Pantry,
Inc., a Delaware corporation ("PANTRY"), the Lenders, and Mortgagee. As used
herein, the following terms shall have the following meanings:
1.1.1 "INDEBTEDNESS": (1) All indebtedness of Pantry 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 Pantry or 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 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 Pantry (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 Florida or, if the
creation, perfection and enforcement of any security interest herein granted is
governed by the laws of a state other than Florida, then, as to the matter in
question, the Uniform Commercial Code in effect in that state.
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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).
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.
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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.
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.
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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
inequity, 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.
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.
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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
a 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, 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
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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 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
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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 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
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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.
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.
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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 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.
SECTION 7.7 RELEASE OR RECONVEYANCE. Upon payment in full of the
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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 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.
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
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regarding the creation, perfection and enforcement of the liens and security
interests herein granted 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.
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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.
SECTION 7.12 SURETYSHIP WAIVERS.
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7.12.1 Mortgagor agrees that its obligations hereunder are
irrevocable, absolute, independent and unconditional and shall not be affected
by any circumstance which constitutes a legal or equitable discharge of a
guarantor or surety other than payment and performance in full of the
Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Loan Party agrees as follows: (i) Lender may from time
to time, without notice or demand and without affecting the validity or
enforceability of this Agreement or giving rise to any limitation, impairment or
discharge of such Loan Party's liability hereunder, (A) renew, extend,
accelerate or otherwise change the time, place, manner or terms of payment of
the Obligations, (B) settle, compromise, release or discharge, or accept or
refuse any offer of performance with respect to, or substitutions for, the
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations, (C) request and accept
guaranties of the Obligations and take and hold other security for the payment
of the Obligations, (D) release, exchange, compromise, subordinate or modify,
with or without consideration, any other security for payment of the
Obligations, any guaranties of the Obligations, or any other obligation of any
Person with respect to the Obligations, (E) enforce and apply any other security
now or hereafter held by or for the benefit of Lender in respect of the
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that Lender may have against any such security, as Lenders
in their discretion may determine consistent with this Agreement and any other
Loan Document including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and (F) exercise any other rights available to Lender
under the Loan Documents, at law or in equity; and (ii) this Agreement and the
obligations of each Loan Party hereunder shall be valid and enforceable and
shall not be subject to any limitation, impairment or discharge for any reason
(other than payment in full of the Obligations), including without limitation
the occurrence of any of the following, whether or not any Loan Party shall have
had notice or knowledge of any of them: (A) any failure to assert or enforce or
agreement not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy with respect to the Obligations or any
agreement relating thereto, or with respect to any guaranty of or other security
for the payment of the Obligations, (B) any waiver, amendment or modification
of, or any consent to departure from, any of the terms or provisions (including
without limitation provisions relating to events
12
of default) of the Credit Agreement, any of the other Loan Documents or any
agreement or instrument executed pursuant thereto, or of any guaranty or other
security for the Obligations, (C) the Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect, (D) the application of payments received from any source to the payment
of indebtedness other than the Obligations, even though Lender might have
elected to apply such payment to any part or all of the Obligations, (E) any
failure to perfect or continue perfection of a security interest in any other
collateral which secures any of the Obligations, (F) any defenses, set-offs or
counterclaims which any other Loan Party may allege or assert against any Lender
in respect of the Obligations, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury, and (G) any other act or thing
or omission, or delay to do any other act or thing, which may or might in any
manner or to any extent vary the risk of any Loan Party as an obligor in respect
of the Obligations.
7.12.2 Each Loan Party waives, for the benefit of Lender: (i) any right
to require Lender, as a condition of payment or performance by such Loan Party,
to (A) proceed against any other Loan Party, any guarantor of the Obligations or
any other Person, (B) proceed against or exhaust any other security held from
any other Loan Party, any guarantor of the Obligations or any other Person, (C)
proceed against or have resort to any balance of any deposit account or credit
on the books of Lender in favor of any Loan Party or any other Person, or (D)
pursue any other remedy in the power of Lender whatsoever; (ii) any defense
arising by reason of the incapacity, lack of authority or any disability or
other defense of any Loan Party including, without limitation, any defense based
on or arising out of the lack of validity or the unenforceability of the
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of any Loan Party from any cause other than payment
in full of the Obligations; (iii) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; (iv)
any defense based upon Lender's errors or omissions in the administration of the
Obligations, except behavior which amounts to bad faith; (v) (A) any principles
or provisions of law, statutory or otherwise, which are or might be in conflict
with the terms of this Agreement and any legal or equitable discharge of such
Loan Party's obligations hereunder, (B) the benefit of any statute of
limitations affecting such Loan Party's liability hereunder or the enforcement
hereof, (C) any rights to set-offs, recoupments and counterclaims, and (D)
promptness, diligence and any requirement that Lender protect, secure, perfect
or insure any other security interest or lien or any property subject thereto;
(vi) notices, demands, presentments, protests, notices of protest, notices of
dishonor and notices of any action or inaction, notices of default under the
Credit Agreement or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Obligations or any agreement related
thereto, notices of any extension of credit to Loan Parties and notices of any
of the matters referred to in the preceding paragraph and any right to consent
to any thereof; and (vii) to the fullest extent permitted by law, any defenses
or benefits that may be derived from
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or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Agreement.
7.12.3 Until the Obligations shall have been paid in full, each Loan Party
shall withhold exercise of (i) any claim, right or remedy, direct or indirect,
that such Loan Party now has or may hereafter have against any other Loan Party
or any of its assets in connection with this Agreement or the performance by any
other Loan Party of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise and including without limitation (A) any right of subrogation,
reimbursement or indemnification that any Loan Party now has or may hereafter
have against any other Loan Party, (B) any right to enforce, or to participate
in, any claim, right or remedy that Lender now has or may hereafter have against
any Loan Party, and (C) any benefit of, and any right to participate in, any
other collateral or security now or hereafter held by Lender, and (ii) any right
of contribution any Loan Party may have against any guarantor of the
Obligations. Each Loan Party further agrees that, to the extent the waiver of
its rights of subrogation, reimbursement, indemnification and contribution as
set forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Loan Party may have against any other Loan Party or against
any other collateral or security, and any rights of contribution such Loan Party
may have against any such guarantor, shall be junior and subordinate to any
rights Lender may have against any Loan Party, to all right, title and interest
Lender may have in any such other collateral or security, and to any right
Lender may have against any such guarantor.
ARTICLE 8
LOCAL LAW PROVISIONS
--------------------
SECTION 8.1 FUTURE ADVANCES. This Mortgage also secures such future
---------------
additional advances as may be made by Mortgagee at Mortgagee's option to
Mortgagor for any purposes, provided that all such advances are to be made
within twenty (20) years from the date of this Mortgage. The total Indebtedness
secured by this Mortgage may decrease or increase from time to time, but the
total unpaid balance so secured at any one time may not exceed the maximum
principal amount of Two Hundred Million Dollars ($200,000,000) plus interest
accrued thereon, and any disbursements made for the payment of taxes, levies,
assessments or insurance on the Mortgaged Property, with interest upon such
disbursements. If, pursuant to Florida Statutes (S)697.04, Mortgagor files a
notice specifying the dollar limit beyond which future advances made pursuant to
this Mortgage will not be secured by this Mortgage, Mortgagor shall give
immediate notice to Mortgagee by certified mail. Such filing constitutes an
additional Event of Default hereunder.
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SECTION 8.2 INSURANCE AND TAXES. Mortgagor shall at all time
-------------------
provide, maintain and keep in force or cause to be provided, maintained and keep
in force, at no expense to Mortgagee, policies of insurance in form and amounts
and issued by companies, associations or organizations reasonably satisfactory
to Mortgagee covering such casualties, risks, perils, liabilities and other
hazards as set forth in the Credit Agreement or as Mortgagee reasonably
requires. Mortgagor shall pay, or cause to be paid prior to delinquency, all
real property taxes and assessments, general and special, and all other taxes
and assessments of any kind or nature whatsoever, including, without limitation,
nongovernmental levies or assessments such as maintenance charges, levies or
charges resulting from covenants, conditions and restrictions affecting the
Mortgaged Property, which are assessed or imposed upon the Mortgaged Property,
or become due and payable, and which create, may create or appear to create a
lien upon the Mortgaged Property or any part thereof, or upon any person,
property, equipment or other facility used in the operation or maintenance
thereof (all the above collectively hereinafter referred to as "IMPOSITIONS");
provided, however, if, by law any such Imposition is payable, or may at the
option of the taxpayer be paid, in installments, Mortgagor may pay the same or
cause it to be paid, together with any accrued interest on the unpaid balance of
such Imposition, in installments before any fine, penalty, interest or cost may
be added thereto for the nonpayment of any such installment and interest. If
Mortgagor does not pay such insurance premiums and Impositions in accordance
with the foregoing, Mortgagee may pay such amounts and Mortgagor shall reimburse
Mortgagee upon demand for such payments and such reimbursement obligation shall
be added to the Obligations secured hereby.
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IN WITNESS WHEREOF, Mortgagor has 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.
LIL' CHAMP FOOD STORES, INC., a Florida corporation
By: _____________________________
Name: William T. Flyg
Its: Executive Vice President and Assistant
Secretary
S-1
ACKNOWLEDGEMENT
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 23 day of October,
1997 by William T. Flyg, as the Executive Vice President and Assistant Secretary
of Lil' Champ Food Stores, Inc., a Florida corporation, on behalf of the
corporation. He is personally known to me or has produced a
_______________________ as identification.
_________________________________
Print Name:______________________
Notary Public, New York, New York
My Commission Expires:___________
Commission No.:__________________
S-2
EXHIBIT A
MORTGAGED PROPERTY
A-1