PREPARED BY AND UPON RECORDING, RETURN TO:
Mark D. Cress, Esquire
Bulkley, Richardson and Gelinas, LLP
1500 Main Street, Suite 2700
Springfield, MA 01115
MORTGAGE,
ASSIGNMENT OF LEASES AND RENTS, AND
SECURITY AGREEMENT
between
ENESCO GROUP, INC., as Mortgagor
and
FLEET NATIONAL BANK, as Agent
THIS MORTGAGE SECURES FUTURE OBLIGATIONS
AND ADVANCES PURSUANT TO 205 ILCS 5/5d.
TABLE OF CONTENTS
Page
1. Definitions..................................................................... 3
2. Payment and Performance of Obligations.......................................... 4
3. Payment of Taxes, Etc. ......................................................... 4
4. Condition; Use; Repair; Inspection.............................................. 5
5. Insurance....................................................................... 5
6. Insurance Proceeds.............................................................. 7
7. Eminent Domain Proceeds......................................................... 8
8. Subordination................................................................... 9
9. Delinquency of Payments; Fees and Charges....................................... 9
10. Leases and Rents................................................................ 9
11. Additional Security............................................................. 10
12. Status Report................................................................... 10
13. Waiver; Redemption.............................................................. 10
14. Notice.......................................................................... 10
15. Priority of Lien................................................................ 11
16. Maintenance of Mortgagor; Transfers............................................. 11
17. Bankruptcy...................................................................... 11
18. Events of Default............................................................... 12
19. Remedies........................................................................ 12
20. Mortgagee's Right to Cure Default............................................... 13
21. Foreclosure Sale................................................................ 13
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22. Warranty of Title............................................................... 14
23. Indemnification/Subrogation..................................................... 14
24. Hazardous Substances............................................................ 15
25. Other Agreements................................................................ 15
26. Reserve Requirements............................................................ 15
27. Amendments...................................................................... 16
28. Miscellaneous................................................................... 16
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MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, AND SECURITY AGREEMENT
(the "MORTGAGE") is made as of the 22nd of November, 2004 between ENESCO GROUP,
INC. (the "MORTGAGOR"), an Illinois corporation, having a principal place of
business located at 225 Windsor Drive, Itasca, Illinois 60143, and FLEET
NATIONAL BANK as "Agent" (the "MORTGAGEE"), a national banking association
having a usual place of business at One Monarch Place, Springfield,
Massachusetts 01102.
Reference is made to the following facts:
WHEREAS, the Mortgagor is the Borrower under the terms of a Second Amended
and Restated Senior Revolving Credit Agreement dated as of June 16, 2003 among
the Mortgagor, the Borrowing Subsidiaries from time to time a party thereto, the
Lenders from time to time a party thereto, and the Mortgagee, as Agent, as
amended by a First Amendment to Second Amended and Restated Senior Revolving
Credit Agreement dated as of March 5, 2004, as further amended by a Second
Amendment to Second Amended and Restated Senior Revolving Credit Agreement dated
as of August 10, 2004, as further amended by a Third Amendment to Second Amended
and Restated Senior Revolving Credit Agreement dated as of November 2, 2004, and
as further amended by a Fourth Amendment to Second Amended and Restated Senior
Revolving Credit Agreement dated as of even date herewith (as the same may be
further amended or restated from time to time, the "Credit Agreement"), pursuant
to which the Mortgagee on behalf of the Lenders has, subject to the terms and
conditions set forth therein, made certain credit facilities available to the
Mortgagor including those evidenced by a Borrower Note in the face amount of
$25,000,000 payable to Fleet, a Borrower Note in the face amount of $15,000,000
payable to LaSalle, a Back-Up L/C and B/A Demand Note in the face amount of
$10,000,000 payable to Fleet and a Back-Up F/X Demand Note in the face amount of
$10,000,000 payable to Fleet, all such promissory notes dated as of June 16,
2003, a Borrowing Subsidiary Note dated as of September 10, 2003 made by Enesco
International (H.K.) Limited payable to Fleet in the face amount of $5,000,000,
a Borrowing Subsidiary Note dated March 5, 2004 made by Gregg Manufacturing,
Inc. payable to Fleet in the face amount of $2,500,000, a Borrower Term Note in
the face amount of $5,390,000 payable to Fleet and a Borrower Term Note in the
face amount of $2,310,000 payable to LaSalle, both such term notes dated as of
March 5, 2004 (all of which notes are collectively hereinafter referred to as
the "Notes"). All capitalized terms used herein and not otherwise defined herein
shall have their meanings as defined in the Credit Agreement; and
WHEREAS, as security for the payment of all liabilities and the
performance of all obligations of the Mortgagor to the Mortgagee including,
without limitation, all liabilities and obligations of the Mortgagor to the
Mortgagee pursuant to the Credit Agreement and the Notes, the Mortgagor has
agreed to execute and deliver this Mortgage and grant the assignments and
security interests to the Mortgagee hereinafter described; and
WHEREAS, the Mortgagor desires to secure the following liabilities and
obligations (collectively, the "Obligations") of the Mortgagor to the Mortgagee:
(i) the payment of all principal, interest and other payments due
under the terms of the Credit Agreement, the Notes, this Mortgage and the other
Loan Documents up to a maximum principal amount of FIFTY SEVEN MILLION SEVEN
HUNDRED THOUSAND DOLLARS ($57,700,000). It is the intention of the parties
hereto that this Mortgage shall secure not only existing indebtedness or
advances made prior to or contemporaneously with the execution hereof, but also
(x) all future Advances made by the Mortgagee under the Credit Agreement, the
Notes, this Mortgage and the other Loan Documents, whether such Advances are
obligatory or to be made at the option of the Mortgagee, or otherwise, (y) all
additional Advances made by the Mortgagee following any increase in the amount
of the lending commitments or other direct or contingent indebtedness under the
Credit Agreement, this Mortgage or the other Loan Documents as a result of an
amendment of the Credit Agreement, this Mortgage or the other Loan Documents,
and (z) any and all additional amounts and/or interest which the Mortgagor is
required to pay to the Mortgagee under the Credit Agreement, the Notes, this
Mortgage or the other Loan Documents, to the same extent as if such future or
additional advances were made and additional amounts and/or interest were
incurred on the date hereof; and
(ii) the payment, performance, discharge and satisfaction of every
covenant, agreement, warranty, representation, undertaking and condition
contained in this Mortgage, the Credit Agreement, or the other Loan Documents,
and all other documents now or hereafter executed by the Mortgagor incident to
the Credit Agreement, this Mortgage or the other Loan Documents, or any
amendment, extension, modification, replacement or re-casting of any one or more
of the same; and
(iii) all costs and expenses now or hereafter incurred by the
Mortgagee in respect of this Mortgage, the Credit Agreement, or any other Loan
Document and all other agreements (now or hereafter existing) between the
Mortgagor and, the Mortgagee including, without limitation, all attorneys' fees
and all costs and expenses incurred by the Mortgagee which costs and expenses
are directly or indirectly related to the Mortgagee's efforts to collect or
enforce any of the Obligations or to exercise or enforce any of the Mortgagee's
rights, remedies or powers under this Mortgage, the Indenture, the other Loan
Documents or any other agreement (now or hereafter existing) between the
Mortgagor and the Mortgagee including all court and litigation costs and
expenses.
NOW, THEREFORE, to secure the Obligations and for consideration paid, the
Mortgagor hereby grants, assigns, mortgages and warrants to the Mortgagee, with
MORTGAGE COVENANTS the Mortgagor's entire right, title and interest now owned or
hereafter acquired in and to the real property (the "Real Property") located
respectively at (i) 225 Windsor Drive, Itasca, Illinois, and (ii) One Enesco
Plaza, Elk Grove Village, Illinois, as more fully described on EXHIBIT A
attached hereto, together with the Mortgagor's entire right, title and interest,
now owned or hereafter acquired, in and to the following:
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(a) All Improvements (as hereinafter defined), and the rents, issues
and profits therefrom;
(b) All rights, licenses, permits, approvals, contracts, easements
now or hereafter appurtenant thereto, and all other rights of the Mortgagor of
whatever kind or nature, whether running covenants or otherwise now or hereafter
appurtenant to the Real Property;
(c) Any other estate, title or interest in the Real Property or
Improvements, and in the streets and ways adjacent thereto, to the extent now
owned or hereafter acquired by the Mortgagor;
(d) All assignments of lease or subleases (the "Leases") now
existing or hereafter entered into by the Mortgagor with respect to all or any
portion of the Real Property and Improvements, and all the rents, issues,
profits, revenues, and other income received or receivable by the Mortgagor
under and by virtue of such Leases;
(e) That certain equipment and machinery which could be construed to
be fixtures on the Real Property, whether now owned or hereafter acquired by the
Debtor including, without limitation, all heating, air conditioning, lighting
and power equipment; sprinkler systems; pipes; pumps; tanks; motors; generators;
conduits; switchboards; plumbing, lifting, cleaning, fire prevention, fire
extinguishing, and ventilating apparatus; boilers, furnaces, oil burners or
units thereof; elevators; escalators; shades; awnings; screens; storm doors and
windows; cabinets; partitions; ducts and compressors; carpeting; draperies;
plants and shrubbery; together with all attachments and additions thereto,
substitutions therefor, and replacements and component parts thereof, whether
now or hereafter attached to or used or to be used or considered fixtures on the
Real Property; and
(f) All proceeds of the conversion, voluntary or involuntary, of all
or any portion of the above-described property into cash, negotiable instruments
or other instruments for the payment of money, chattel paper, security
agreements, documents or liquidated claims, including, without limitation, all
insurance proceeds and all awards arising out of eminent domain proceedings or
other proceedings similar thereto.
The above-described Real Property and Improvements, and other rights described
in (a), (b), (c) and (d) above, together with any and all additions thereto or
replacements thereof, and together with all such property described in (e) and
(f) above, insofar as such property is, or can by agreement of the parties be
made, a part of the realty, are herein referred to as the "Real Estate." All
such property described in (e) and (f) above is hereinafter referred to as the
"Collateral". The Collateral and the Real Estate are collectively referred to as
the "Property", or such portion thereof as is appropriate to the context in
which the term "Property" is used.
It is intended that this Mortgage shall serve as a security agreement
granting Mortgagee a security interest in all of the Property not classified as
real property under applicable law, but including fixtures, in accordance with
the terms of the Uniform Commercial Code as adopted in the State of Illinois
(the "UCC"), as amended, modified or restated from time to time. As to all
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such property, Mortgagee shall have, without limitation, all of the rights and
remedies of a secured party under the UCC. The recordation of this Mortgage
shall also constitute a fixture filing in accordance with the provisions of the
UCC. Mortgagor covenants and agrees to execute promptly upon request such
financing statements as Mortgagee may require from time to time, to cause same
to be filed in the appropriate jurisdiction, and to take such other actions as
Mortgagee may require in order to perfect the security interest created by this
Mortgage.
It is further intended that this Mortgage shall serve as a present and
absolute assignment of all of the Mortgagor's right, title and interest in and
to the Real Property, provided that, so long as there shall exist no Event of
Default (as hereinafter defined) hereunder, Mortgagor shall have the right to
the use and enjoyment of the Real Property. In no event shall the foregoing
assignment operate to place any liability on Mortgagee for the maintenance,
care, operation or condition of the Real Property until such time, if any, as
Mortgagee shall take possession and control of the Real Property.
The Mortgagor covenants, warrants and agrees with the Mortgagee as
follows:
1. Definitions. As used in this Mortgage, unless the context otherwise
requires, the following terms shall have the following meanings:
"Governmental Approvals" shall mean all approvals, certifications,
consents, licenses, permits, authorizations and other official action required
to be issued or taken by any Governmental Authorities for or with respect to the
matter with respect to which such term is used, including, without limitation
all applicable environmental, hazardous substances/materials, air and water
pollution, land use, flood hazard, coastal zone, waterways, wetlands, building,
fire safety, health, planning, subdivision, and zoning by-laws, rules,
regulations, permits and approvals.
"Governmental Authorities" shall mean all federal, state, county and
municipal governments and all governmental and quasi-governmental agencies,
authorities, boards, commissions, bureaus, departments, authorities, officials
and officers thereof, now or hereafter having jurisdiction over the Mortgagor,
the Real Estate, or the matter or the party with respect to which such term is
used.
"Improvements" shall mean the existing buildings on the Real Estate and
all improvements of every kind now or hereafter made to the Real Estate.
"Laws and Other Governmental Requirements" shall mean all laws, statutes,
ordinances, orders, rules, regulations and requirements now in effect or at any
time hereafter enacted or issued by any Governmental Authorities which are
applicable to the Mortgagor, the Real Estate, or the matter or party with
respect to which such terms are used.
"Leases" shall mean any lease or leases by assignment or otherwise, or
sublease or subleases, for all or a portion of the Improvements or the Property
now or hereafter in effect
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entered into by the Mortgagor and a lessee or sublessee from time to time in
accordance with the Collateral Assignment and the other Loan Documents.
"Other Applicable Requirements" shall mean all mortgages, deeds of trust,
leases, bank loans, credit agreements, contracts, understandings, instruments,
agreements, covenants, conditions and restrictions, public or private, now in
effect or hereafter arising which are applicable to or which are binding on the
Mortgagor, the Real Estate, the business or activity conducted thereon, or the
matter or party with respect to which such terms are used, or to which the party
with respect to which such terms are used is a party or by which such party may
be bound or affected.
2. Payment and Performance of Obligations. The Mortgagor shall make all
payments and perform all obligations under the Credit Agreement, the Notes, this
Mortgage and all other Loan Documents.
3. Payment of Taxes, Etc.
a. Unless the subject of a good faith dispute where adequate
reserves have been established by the Mortgagor, the Mortgagor shall pay
before the same become delinquent (and shall provide, by such time,
evidence of such payment, satisfactory to the Mortgagee) all "taxes and
other charges" payable by Mortgagor, if applicable or related to the
Property, and all other taxes, charges, sewer use fees, water rates and
assessments of every name and nature, whether or not assessed against the
Mortgagor, if applicable or related to the Property, or any interest
therein, or the debt, obligation or any agreement secured hereby, or the
disbursement or the application of the proceeds thereof.
b. Further, the Mortgagor shall pay when due all fees and charges
incurred incident to the loan transaction described in the Credit
Agreement secured by this Mortgage, the assurance of the security
represented by this Mortgage, and the enforcement of this Mortgage, the
Credit Agreement, the other Loan Documents, and any other obligation
secured by this Mortgage.
c. The undertakings of the Mortgagor contained in this Paragraph 3
with respect to items other than the payment of real estate taxes, sewer
use fees, water rates, and assessments, shall survive the payment of all
Obligations secured hereby; however, after an acknowledgment of the
satisfaction of the Obligations, or a discharge of this Mortgage, this
Mortgage shall not be security for the performance of such undertakings,
notwithstanding the survival of the same; but, thereafter, the Mortgagee
shall look solely to the Mortgagor, personally, for the performance of
such undertakings.
d. In the event of the enactment after this date of any Laws and
Other Governmental Requirements requiring the Mortgagee to pay all or any
part of the taxes, assessments, charges or liens herein required to be
paid by the Mortgagor, or changing in any way the taxation of mortgages or
debts secured by mortgages or the manner of
5
collection of taxes, so as to affect this Mortgage or the obligations
secured hereby then the Mortgagor, upon demand by Mortgagee, shall pay
such taxes or assessments, or reimburse Mortgagee therefor; provided,
however, that if in the opinion of counsel for Mortgagee (i) it might be
unlawful to require Mortgagor to make such payment or (ii) the making of
any such payment might result in the imposition of interest beyond the
maximum amount permitted by law, then the Mortgagee may elect to declare
all of the indebtedness secured hereby to be due and payable sixty (60)
days from the giving of such notice.
4. Condition; Use; Repair; Inspection.
a. The Mortgagor shall diligently and continuously from the date
hereof shall keep the Property in good order, repair and condition, damage
from casualty expressly not excepted, and shall not permit or commit waste
on the Real Estate, nor remove or alter anything which constitutes a part
of the Property without the consent of the Mortgagee, other than removals
or alterations in the ordinary course of Mortgagor's business which do not
have a material affect on the value of the Property.
b. The Property shall be maintained, operated and used in accordance
with all Governmental Approvals and Laws and other Governmental
Requirements and all Other Applicable Requirements. To the fullest extent
permissible according to law, and without limiting any other rights or
remedies of the Mortgagee, the Mortgagor unconditionally, absolutely and
irrevocably agrees to defend, hold harmless and indemnify the Mortgagee
and each of its officers, employees, agents and contractors against all
damages (including consequential damages), claims, costs, losses and
liabilities, including attorney's fees, suffered or incurred by the
Mortgagee on account of the violation of any Governmental Approvals, Laws
and Other Governmental Requirements, or any Other Applicable Requirements
or the imposition by any Governmental Authority of a lien, attachment or
other encumbrance on any part of the Property. The foregoing
indemnification shall survive satisfaction of the Obligations and the
release or assignment of this Mortgage. All construction on, improvements
to, and alterations of the Real Estate shall comply with, and each and
every part of the Property shall be maintained and used in accordance
with, all Governmental Approvals, Laws and other Governmental
Requirements, and all Other Applicable Requirements.
c. The Mortgagee shall have and is hereby granted the right to enter
and to have access at reasonable times during business hours to the Real
Estate and the Collateral (and all books and records relating to the use,
operation, construction or management thereof) without interfering unduly
with Mortgagor's business operations to determine whether the Mortgagor is
in compliance with its obligations under this Mortgage and the other Loan
Documents.
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5. Insurance.
a. Mortgagor shall obtain and maintain on the Improvements now
situated on, and the Personal Property located at, the Real Property, or
which may hereafter be erected or placed thereon, and all other real,
mixed or personal property now or hereafter encumbered by the lien of this
Mortgage physical hazard insurance on an "all risks" basis with a
Replacement Cost Endorsement, an Increased Cost of Construction
Endorsement and an Agreed Amount Endorsement, covering the perils of fire,
flood (if in a flood hazard zone), earthquakes (if in an earthquake zone),
boiler and machinery (to include major components of HVAC systems if not
already included in the above coverage) and such other equipment as
Mortgagee may require, and extended coverage in an amount at least equal
to the current fair market value of the Property and not less than the
"Full Replacement Cost" of the Improvements and Personal Property. "Full
Replacement Cost" shall mean the cost of replacing the Improvements and
Personal Property without deduction for physical depreciation.
b. Mortgagor shall obtain and maintain commercial general liability
insurance against claims for personal injury (to include, without
limitation, bodily injury and personal and advertising injury) and
property damage liability, all on an occurrence basis, if available, with
such coverages as Mortgagee may request with a general aggregate limit of
not less than $2,000,000, an aggregate limit of not less than $2,000,000,
and a combined single "per occurrence" limit of not less than $1,000,000
for bodily injury, property damage and medical payments.
c. Mortgagor shall obtain and maintain rent loss or business
interruption coverage in a minimum amount of not less than eighteen (18)
months gross rentals from the Property, including without limitation, all
payments due under any lease and the salaries and expenses of key
personnel required for the operation of the Property for a period of not
less than eighteen (18) months.
d. During the course of any construction or repair of any
Improvements on the Real Property, the insurance required by clause (a)
above shall be written on a builders risk, completed value, non-reporting
form, meeting all of the terms required by clause (a) above, covering the
total value of work performed, materials, equipment, machinery and
supplies furnished, existing structures, and temporary structures being
erected on or near the Real Property, including coverage against collapse
and damage during transit or while being stored off-site, and containing a
soft costs (including loss of rents) coverage endorsement and a permission
to occupy endorsement.
e. Mortgagor shall obtain and maintain flood insurance if at any
time the Improvements are located in any federally designated "special
hazard area" (including any area having special flood, mudslide and/or
flood-related erosion hazards, and shown on a Flood Hazard Boundary Map or
a Flood Insurance Rate Map published by the Federal Emergency Management
Agency as Zone A, AO, A1-30, AE, A99, AH, V0, V1-
7
30, VE, V, M or E) and the broad form flood coverage required by clause
(a) above is not available, in an amount equal to the full replacement
cost or the maximum amount then available under the National Flood
Insurance Program.
f. During the course of any construction or repair of any
Improvements on the Real Property, Mortgagor shall obtain and maintain
owner's contingent or protective liability insurance covering claims not
covered by or under the terms or provisions of the insurance required by
clause (d) above.
g. Mortgagor shall obtain and maintain employer's liability
insurance.
h. Mortgagor shall obtain and maintain umbrella liability insurance
with limits of not less than $5,000,000 to be in excess of the limits of
the insurance required by clauses (b), (f) and (g) above, with coverage at
least as broad as the primary coverages of the insurance required by
clauses (b), (f) and (g) above, with any excess liability insurance to be
at least as broad as the coverages of the lead umbrella policy. All such
policies shall be endorsed to provide defense coverage obligations.
i. All liability coverages shall insure Mortgagee as an additional
insured, and all other forms of insurance shall insure Mortgagee as first
mortgagee. All insurance policies shall be written by a company qualified
to do business in the State of Illinois which has an A.M. Best Company's
Key Rating Guide Class A VII category designation or higher and shall
provide for not less than thirty (30) days' written notice to Mortgagee
prior to modification or cancellation. The policy shall not contain a
co-insurance clause or other clause limiting the amount of coverage under
any conditions except for standard deductibles. Mortgagor shall notify,
instruct and authorize the companies issuing all policies to make any and
all loss drafts thereunder payable to Mortgagee. Mortgagee may on behalf
of Mortgagor adjust and compromise any claims under such insurance and
collect and receive proceeds thereof and is hereby irrevocably appointed
attorney in fact for Mortgagor coupled with an interest, for such
purposes, and may deduct from such proceeds any expense reasonably
incurred by it. If any sum of money shall become payable under such policy
or policies of insurance and is used for the purpose of rebuilding or
repairing the damaged Property, or for any other purposes, Mortgagee shall
not be deemed to have thereby waived or impaired any equity or statutory
lien or right under or by virtue of this Mortgage.
j. Mortgagor shall deliver to Mortgagee the originals, or if the
originals are not available, certified copies, of all insurance policies
required hereunder.
k. In the event of loss or physical damage to the Property,
Mortgagor shall give immediate written notice thereof to Mortgagee and
Mortgagee may make proof of loss if the same is not made promptly by
Mortgagor. All right, title, and interest of Mortgagor in and to any
insurance policies and the proceeds therefrom are assigned to
8
Mortgagee including unearned premiums. All proceeds deposited with
Mortgagee, may, at the option of Mortgagee, be applied in the payment of
the amount secured hereby in such order as Mortgagee may determine without
prepayment penalty or premium or be released to Mortgagor, in whole or in
part, upon conditions satisfactory to Mortgagee.
l. Mortgagor shall deliver to Mortgagee notices of payment dates and
proof of payment of premiums on all insurance policies as well as such
certificates and proof of insurance as Mortgagee shall reasonably request.
m. Any such insurance coverage may be maintained under blanket
insurance policies meeting all of the criteria set forth herein.
n. Unless Mortgagor provides Mortgagee with evidence of the
insurance coverage required by this Mortgage, Mortgagee may purchase
insurance at Mortgagor's expense to protect Mortgagee's interests in the
Property. This insurance may, but need not, protect Mortgagor's interests.
The coverage that Mortgagee purchases may not pay any claim that Mortgagor
may make or any claim that is made against Mortgagor in connection with
the Property. Mortgagor may later cancel any insurance purchased by
Mortgagee, but only after providing Mortgagee with evidence that Mortgagor
has obtained insurance as required by this Mortgage. If Mortgagee
purchases insurance for the Property, Mortgagor will be responsible for
the costs of that insurance, including interest and any other charges
Mortgagee may impose in connection with the placement of the insurance,
until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to Mortgagor's total
outstanding balance or obligation. The costs of the insurance may be more
than the cost of insurance Mortgagor may be able to obtain on its own.
6. Insurance Proceeds.
a. The Mortgagor agrees to give immediate notice to the Mortgagee of
any material fire, damage or other casualty to all or any part of the
Property.
b. In case of any material damage or destruction to the Property, or
any other casualty, all proceeds of any hazard insurance shall be made
payable to Mortgagee and may be applied towards any outstanding
Obligations of Mortgagor hereunder, provided however, so long as there has
been no Event of Default hereunder, Mortgagee shall release such proceeds
to Mortgagor to be applied by Mortgagor to the restoration or replacement
of the property which was the subject of such loss provided that:
i. Mortgagor shall have demonstrated to the reasonable
satisfaction of Mortgagee that the Property will be restored to
substantially its previous condition or will be replaced by a
substantially identical property;
9
ii. the Mortgagee shall have received, if so requested, a
favorable opinion from Mortgagor's counsel satisfactory in scope and
form to the Mortgagee, as to the Mortgagee's having a prior security
interest in and valid first lien on such restored and replaced
property; and
iii. such proceeds shall be distributed by Mortgagee in the
manner in which Mortgagee customarily distributes construction loan
proceeds.
c. Notwithstanding anything in this Paragraph 6 to the contrary, if
the insurer denies liability to the Mortgagor or if the insurance proceeds
are insufficient to complete the required repairs and restoration, the
Mortgagor shall not be relieved of any obligation under Paragraph 4 of
this Mortgage, whether or not the proceeds of insurance are applied to or
toward the indebtedness secured hereby.
7. Eminent Domain Proceeds.
a. Immediately upon obtaining knowledge of the institution of any
proceedings for the condemnation of all of any part of the Property or the
whole or any part of the buildings, structures and improvements located on
the Real Estate, Mortgagor will notify Mortgagee of the pendency of such
proceedings. Mortgagee may participate in any such proceedings, and
Mortgagor shall from time to time deliver to Mortgagee all instruments
requested by it to permit such participation. Mortgagor shall, at its
expense, diligently prosecute any such proceeding and shall consult with
the Mortgagee, its attorneys and experts and cooperate with them in any
defense of any such proceedings.
b. In case of any condemnation for public use or public injury to
the Property, all awards of damages on account of such condemnation shall
be applied, at Mortgagee's discretion, towards any outstanding Obligations
of Mortgagor hereunder, provided however, so long as there has been no
Event of Default hereunder, Mortgagee shall release such proceeds to
Mortgagor to be applied by Mortgagor to the restoration or replacement of
the property which was the subject of such condemnation provided that:
i. Mortgagor shall have demonstrated to the reasonable
satisfaction of Mortgagee that the Property will be restored to
substantially its previous condition or will be replaced by a
substantially identical property;
ii. the Mortgagee shall have received, if so requested, a
favorable opinion from Mortgagor's counsel satisfactory in scope and
form to the Mortgagee, as to the Mortgagee's having a prior security
interest in and valid first lien on such restored and replaced
Property; and
iii. such proceeds shall be distributed by Mortgagee in the
manner in which Mortgagee customarily distributes construction loan
proceeds.
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c. In the event eminent domain proceeds are released to the
Mortgagor for the restoration of the Property as provided above and such
proceeds are not sufficient to permit the complete restoration of the
Property, the Mortgagor shall nevertheless fully restore the Property and
shall supply any deficiency in the eminent domain proceeds with its own
funds.
8. Subordination. If this Mortgage, by its terms, is now, or at any time,
subject or subordinate to a prior mortgage, the Mortgagor shall not, without the
consent of the Mortgagee, agree to the modification, amendment or extension of
the terms or conditions of such prior mortgage. Notwithstanding the foregoing,
nothing in this paragraph 8 shall be deemed a waiver of Mortgagee's rights to
prohibit the existence of any prior mortgages on the Premises.
9. Delinquency of Payments; Fees and Charges. If the payment of any
installment on account of principal or interest due under Credit Agreement is
delinquent for five (5) business days or more, the Mortgagor shall pay, in
addition to any other sums due under this Mortgage (and without the Mortgagee's
other remedies on account of such delinquency) additional interest as provided
in the Credit Agreement.
Further, the Mortgagor shall pay when due all fees and charges incurred
incident to the Loans and secured by this Mortgage, the assurance of the
security represented by this Mortgage, and the enforcement of this Mortgage and
any other Obligation secured by this Mortgage.
10. Leases and Rents.
a. As part of the consideration for making the Loan, Mortgagor has
absolutely and unconditionally assigned and transferred to Mortgagee all
of Mortgagor's right, title and interest in and to the Leases and the
Revenues, including those now due, past due or to become due by virtue of
any Lease for the occupancy or use of all or any part of the Property.
b. Mortgagor agrees that neither the foregoing assignment of Leases
and Revenues, nor the exercise of any of Mortgagee's rights and remedies
under Paragraph 19 hereof shall be deemed to make Mortgagee a
Mortgagee-in-possession or otherwise responsible or liable in any manner
with respect to the Leases, the Property or the use, occupancy, enjoyment
or operation of all or any portion thereof, unless and until Mortgagee, in
person or by agent, assumes actual possession thereof. Nor shall the
appointment of any receiver for the Property by any court at the request
of Mortgagee or by agreement with Mortgagor, or the entering into
possession of any part of the Property by such receiver, be deemed to make
Mortgagee a Mortgagee-in-possession or otherwise responsible or liable in
any manner with respect to the Leases, the Property or the use, occupancy,
enjoyment or operation of all or any portion thereof.
c. If Mortgagee or a court-appointed receiver enters upon, takes
possession of and maintains control of the Property pursuant to Paragraph
19 hereof, all Revenues
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thereafter collected shall be applied first to the costs of taking control
of and managing the Property and collecting the Revenues, including, but
not limited to, reasonable attorneys' fees actually incurred, receiver's
fees, premiums on receiver's bonds, costs of repairs to the Property,
premiums on insurance policies, Impositions and other charges on the
Property, and the costs of discharging any obligation or liability of
Mortgagor as landlord, lessor or licensor of the Property and then to the
Obligations. Mortgagee or the receiver shall have access to the books and
records used in the operation and maintenance of the Property and shall be
liable to account only for those Revenues actually received. Mortgagee
shall not be liable to Mortgagor, anyone claiming under or through
Mortgagor or anyone having an interest in the Property by reason of
anything done or left undone by Mortgagee pursuant to Paragraph 19 hereof.
If the Revenues are not sufficient to meet the costs of taking control of
and managing the Property and collecting the Revenues, any monies expended
by Mortgagee for such purposes shall become a portion of the Obligations.
Unless Mortgagee and Mortgagor agree in writing to other terms of payment,
such amounts shall be payable upon notice from Mortgagee to Mortgagor
requesting payment thereof and shall bear interest from the date of
disbursement at the Default Rate (as defined in the Credit Agreement),
unless payment of interest at such rate would be contrary to applicable
law, in which event such amounts shall bear interest at the highest rate
which may be collected from Mortgagor under applicable law. The entering
upon and taking possession of and maintaining of control of the Property
by Mortgagee or the receiver pursuant to the terms of this Mortgage and
the application of Revenues as provided herein shall not cure or waive any
Event of Default or invalidate any other right or remedy of Mortgagee
hereunder.
11. Additional Security. Upon Mortgagee's request, the Mortgagor will
assign to the Mortgagee to the extent assignable, as additional security for the
Obligations, the Mortgagor's interests in all agreements, contracts, licenses
and permits, now or hereafter outstanding, affecting the Property, such
assignments to be made by instruments in form satisfactory to the Mortgagee and,
without limitation, authorizing the Mortgagee in the event of foreclosure, to
sell and assign such interest to the purchaser at foreclosure, but no such
assignment shall be construed as a consent by the Mortgagee to any lease,
agreement, contract, license or permit so assigned, or to impose upon the
Mortgagee any obligations with respect thereto. The Mortgagor hereby irrevocably
appoints the Mortgagee its true and lawful attorney-in-fact, coupled with an
interest, with full power of substitution, to execute, acknowledge and deliver
any such assignment on behalf of the Mortgagor which the Mortgagor fails or
refuses to do.
12. Status Report. From time to time, on the request of the Mortgagee, the
Mortgagor shall furnish a written statement, signed and, if requested,
acknowledged, setting forth the amount of the indebtedness which the Mortgagor
acknowledges to be due under the Loan and under this Mortgage, specifying any
claims of offset or defense which the Mortgagor asserts against the Obligations
and the then state of facts relative to the condition of the Property.
13. Waiver; Redemption. Whether or not for additional interest or other
consideration paid or payable to the Mortgagee, no forbearance on the part of
the Mortgagee or extension of the time for the payment or performance of the
whole or any part of the Obligations, whether oral or in writing, or any other
indulgence given by the Mortgagee to the Mortgagor or
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to any other party claiming any interest in or to the Property, shall operate to
release or in any manner affect the original liability of the Mortgagor, or the
priority of this Mortgage or to limit, prejudice or impair any right of the
Mortgagee, including, without limitation, the right to realize upon the
security, or any part thereof, for the Obligations, notice of any such
extension, forbearance or indulgence being hereby waived by the Mortgagor, and
all those claiming by, through or under the Mortgagor; and no consent or waiver,
express or implied, by the Mortgagee to or of any default by the Mortgagor shall
be construed as a consent or waiver to or of any further default in the same or
any other term, condition, covenant or provision of this Mortgage or of the
Obligations. In case redemption is had by the Mortgagor after foreclosure
proceedings have begun, the Mortgagee shall be entitled to collect all costs,
charges and expenses incurred up to the time of redemption.
14. Notice. Wherever notice, demand or a request may properly be given to
the Mortgagor under this Mortgage, the same shall always be sufficient to serve
as a notice, demand or request hereunder if in writing and (i) hand delivered,
(ii) delivered to a recognized private express delivery service for overnight
delivery or (iii) posted in the United States mail by registered or certified
mail, return receipt requested, addressed in any such case to the Mortgagor at
the address given in this Mortgage as the Mortgagor's address or to the business
address of the Mortgagor last known to the Mortgagee hereof. Any such notice,
demand or request shall be treated as having been given upon hand delivery to
such address or one (1) day after deposit with such delivery service or the
United States mails. A notice so addressed shall always be a sufficient notice,
notwithstanding a change in the ownership of the equity of redemption of the
Real Estate, whether or not consented to by the Mortgagee. Where more than one
person constitutes the Mortgagor, one notice sent to the address given in this
Mortgage as the Mortgagor's address or the last known business address of any
one of them shall constitute sufficient notice to all.
15. Priority of Lien.
a. Except for real estate taxes and assessments until any
delinquency therein (delinquency, with reference to such taxes and
assessments being hereby defined, for the purposes of this Mortgage, as
meaning the time when, on the non-payment thereof, interest or penalties
commence to accrue), the Mortgagor shall not create or to permit any
encumbrance on the Property even if such encumbrance is inferior to this
Mortgage. The foregoing prohibition shall include Leases.
b. Without limiting the generality of the provisions of Subparagraph
above, the Mortgagor shall keep the Property free from any attachments,
lis pendens or mechanics', materialmen's or other liens or encumbrances of
any kind other than those approved by the Mortgagee, whether such liens or
encumbrances be prior or subordinate to this Mortgage.
Without limitation, the filing of a notice of federal or state tax lien
with the Mortgagee or at the office at which, by law, such notice is to be filed
to be effective against the Real Estate, whether or not such lien applies, in
terms, to the Real Estate shall be a breach of this Paragraph.
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Without limitation, the Mortgagor shall pay and discharge all claims for
labor done and material and services furnished to or performed upon the
Property, and shall take all other steps necessary to prevent the assertion of
claims of liens against the Property or any part thereof or any right or
interest therein. Nothing herein contained shall require the Mortgagor to pay
any claims for labor, materials, or services that the Mortgagor in good faith
disputes and that the Mortgagor, at its own expense, is currently and diligently
contesting; provided, however, that the Mortgagor shall, not later than fifteen
(15) days after Mortgagor's receipt of notice, or Mortgagor's acquiring actual
knowledge, whichever occurs earlier, of the filing of any claim of lien that is
disputed or contested by Mortgagor with respect to the Property, post a bond
sufficient to dissolve or release such claim of lien, or take such other action
as may be requested or approved by the Mortgagee to dissolve or release such
claim of lien.
16. Maintenance of Mortgagor; Transfers. The Mortgagor shall not convey,
transfer, assign, encumber, pledge or otherwise dispose of any legal, equitable
or beneficial interest in the Mortgagor or the Property or any part thereof, or
otherwise voluntarily or by operation of law transfer any legal or equitable
interest in the Real Estate or in the equity of redemption in the Real Estate,
or any part thereof. In the event any of such interests are transferred or
conveyed as aforesaid, then, at the option of the Mortgagee, the Obligations
shall become due and payable without demand or notice.
17. Bankruptcy.
a. The Mortgagor shall not file a petition or any application for
relief, extension, moratorium or reorganization under any bankruptcy,
insolvency or debtor's relief law, or make an assignment for the benefit
of creditors or enter into any trust mortgage arrangement, so-called, or
consent to the appointment of a receiver of any of the property of the
Mortgagor.
b. The Mortgagor shall not permit any petition under any bankruptcy,
insolvency or debtor's relief law filed against it to remain undischarged
for a period of more than forty-five (45) days after the filing thereof,
nor shall the Mortgagor (and any general partner of such partnership)
permit the continuation of any receivership proceedings instituted against
it for more than a period of sixty (60) days after the commencement
thereof.
18. Events of Default. The occurrence of any of the following events shall
be deemed an "Event of Default" or "Default" hereunder:
a. Default shall be made in the due and punctual payment of any
principal of or premium, if any, or interest on any of the Obligations as
and when the same shall become due and payable (whether at maturity or at
a date fixed for any prepayment or installment or by declaration or
acceleration or otherwise) and such default shall continue beyond the
expiration of the applicable period of grace, if any; or
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b. Any other default shall be made in the due performance or
observance of any provision of this Mortgage, any other Loan Document or
of any other Obligation, or any Event of Default (as defined or provided
in the Credit Agreement) shall occur.
19. Remedies.
a. Upon the occurrence of an Event of Default or a Default, the
Mortgagee may (but shall not be required), at its option and without
notice, exercise any or all of the following remedies:
i. declare the entire indebtedness of the Mortgagor
immediately due and payable without notice;
ii. either in person or by agent, with or without bringing any
action or proceeding, enter upon and take possession of the
Property, or any part thereof, in its own name, to operate, manage
and control the Property and conduct the business thereof and do any
acts which it deems necessary or desirable to preserve the value,
marketability or rentability of the Property, or part thereof or
interest therein, increase the income therefrom or protect the
security hereof. The entering upon and taking possession of the
Property shall not cure or waive any default or notice of default
hereunder;
iii. take such steps to protect and enforce its rights whether
by action, suit or proceeding in equity or at law for the specific
performance of any covenant, condition or agreement in this
Mortgage, or the other Loan Documents, or in aid of the execution of
any power herein granted, or for any foreclosure pursuant to the
Illinois Mortgage Foreclosure Act 735 ILCS 5/15 (et. seq.) (the
"Act") or otherwise, or for the enforcement of any other appropriate
legal or equitable remedy or otherwise as the Mortgagee shall elect;
iv. exercise any and all of the rights and remedies of a
secured party under the Uniform Commercial Code in force in the
state in which the Property is located;
v. cure the Default as provided in Paragraph 20 below; and
vi. take such other actions or proceedings as the Mortgagee
deems necessary or advisable to protect its interest in the
Property.
b. In addition to the foregoing remedies, after the happening of any
Event of Default and during its continuance, or upon the commencement of
any proceedings to foreclose this Mortgage or to enforce the specific
performance hereof or in aid thereof or upon the commencement of any other
judicial proceeding to enforce any right of the Mortgagee, the Mortgagee
shall be entitled, as a matter of right, if it shall so elect,
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without the giving of notice to any other party and without regard to the
adequacy or inadequacy of any security for the Obligations, forthwith
either before or after declaring the unpaid principal of the Loans to be
due and payable, to the appointment of a receiver or receivers of the
Property or any part thereof and of all the earnings, revenues, rents,
issues, profits and income thereof. Notwithstanding the appointment of any
receiver, liquidator or trustee of the Mortgagor, or of any of its
property, or of the Property or any part thereof, the Mortgagee shall be
entitled to retain possession and control of all property now or hereafter
held under this Mortgage.
c. The Mortgagee may, at the Mortgagee's option, foreclose this
Mortgage for any portion of the debt or any other sums secured hereby
which are then due and payable, subject to the continuing lien of this
Mortgage for the balance of the secured debt not then due.
d. Such remedies shall continue until all such Events of Default
have been cured by Mortgagor and all foreclosure or other proceedings
which shall have been commenced are completed, and such remedies may be
exercised individually, sequentially or in concert. All of the rights and
remedies of the Mortgagee set forth in this Mortgage and the other Loan
Documents are cumulative and not exclusive of one another and may be
exercised in any order, and the exercise of one shall not be construed to
be a waiver of any of the others. Such remedies are also cumulative and
not exclusive of any and all other remedies now or hereafter available to
the Mortgagee under any law or in equity or otherwise. The resort to any
remedy provided for hereunder or under any other instrument given in
connection with the financing arrangement secured hereby or provided for
by law shall not prevent the concurrent or subsequent employment of any
other appropriate remedy or remedies. No delay or omission to exercise any
right or power shall impair such right or power or constitute a waiver of
any Default or Event of Default or acquiescence therein; and each such
right and power may be exercised as often as deemed expedient.
20. Mortgagee's Right to Cure Default. If there shall be any breach in any
condition or covenant of this Mortgage, the Mortgagee shall have the right, but
without any obligation so to do, to cure such default for the account of the
Mortgagor and, to the fullest extent permissible according to law, apply any
funds credited by or due from the Mortgagee to the Mortgagor against the same
(without any obligation first to enforce any other rights of the Mortgagee,
including, without limitation, any rights under the Credit Agreement or this
Mortgage, or any guaranty thereof, and without prejudice to any such rights).
Without limiting the generality of the foregoing, the Mortgagor hereby
authorizes the Mortgagee to pay all taxes, sewer use fees, water rates and
assessments, with interest, costs and charges accrued thereon, which may at any
time be a lien upon the Property, or any part thereof; to pay the premiums for
any insurance required hereunder; or to incur and pay reasonable expenses in
protecting its rights hereunder and the security hereby granted; to pay any
balance due under any security agreement on any articles, fixtures and equipment
included as a part of the Property; and the payment of all amounts so expended
or incurred shall be considered advances under the Credit Agreement and
16
shall be secured hereby as fully and effectively as any other obligation of the
Mortgagor secured hereby; and, to the fullest extent permissible according to
law, to apply to any of these purposes or to the repayment of any amounts so
paid by the Mortgagee any sums paid on the Loan by the Mortgagor as interest or
otherwise.
21. Foreclosure Sale.
a. At any foreclosure sale, any combination, or all, of the Property
or other security given to secure the Obligations, may be offered for sale
for one total price, and the proceeds of such sale accounted for in one
account without distinction between the items of security or without
assigning to them any proportion of such proceeds, the Mortgagor hereby
waiving the application of any doctrine of marshalling and inverse order
of alienation; and, in case the Mortgagee, in the exercise of the remedies
of foreclosure herein given, elects to sell in parts or parcels, said
sales may be held from time to time, and the power shall not be fully
executed until all of the Property or other security not previously sold
shall have been sold. Without limiting the foregoing, at any one or more
sales the Mortgagee may in its sole discretion elect which portion or all,
and in which order, the Property or other security given to secure the
Obligations shall be offered for sale.
b. If the provisions of the Uniform Commercial Code as in force in
the state in which the Property is located (the "Uniform Commercial Code")
are applicable to any part of the Property which is sold in combination
with or as a part of the Real Estate, or any part thereof, at one or more
foreclosure sales, any notice required under such provisions shall be
fully satisfied by the notice given in execution of the remedies set forth
herein with respect to the Real Estate or any part thereof.
c. Mortgagor acknowledges that the transaction of which this
Mortgage is a part is a transaction which does not include either
agricultural real estate (as defined in Section 15.1201 of the Act) or
residential real estate (as defined in Section 15-1219 of the Act) and, to
the fullest extent permitted by law, hereby voluntarily and knowingly
waives its rights to reinstatement and redemption as allowed under Section
15-1601 (b) of the Act and, to the fullest extent permitted by law, the
benefits of all present and future valuation, appraisement, homestead,
exemption, stay, redemption and moratorium laws under any state or federal
law.
d. In the event that any provision in this Mortgage shall be
inconsistent with any provision of the Act, the provisions of the Act
shall take precedence over the provisions of this Mortgage, but shall not
invalidate or render unenforceable any other provision of this Mortgage
that can be construed in a manner consistent with the Act. Furthermore, if
any provision of this Mortgage shall grant to Mortgagee any rights or
remedies upon an Event of Default by default of Land Trust, Beneficiary,
or any Guarantor which are more limited than the rights that would
otherwise be vested in
17
Mortgagee under the Act in the absence of said provision, Mortgagee shall
be vested with the rights granted in the Act to the full extent permitted
by law.
22. Warranty of Title. The Mortgagor warrants that it is the sole owner
and holder of the Property and has good right, full power and lawful authority
to mortgage, assign and transfer the Property in the manner contemplated hereby.
23. Indemnification/Subrogation.
a. The Mortgagor will indemnify and hold harmless the Mortgagee from
and against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatever kind or nature, and will
reimburse the Mortgagee for all costs and expenses, including attorneys'
fees, growing out of or resulting from the exercise by the Mortgagee of
any right or remedy granted to it under this Mortgage. In no event shall
the Mortgagee be liable for any manner or thing in connection with this
Mortgage other than to account for monies actually received by and in
accordance with the terms hereof.
b. Should the proceeds of the Loan or any amount paid or advanced
hereunder by Mortgagee, be used directly or indirectly to pay off,
discharge or satisfy, in whole or in part, any lien or encumbrance upon
the Property on a parity with or superior to the lien hereof, then as
additional security hereunder, the Mortgagee shall be subrogated to any
and all rights, equal or superior titles, liens and equities owned or
claimed by any owner or holder of said outstanding liens, charges and
indebtedness, regardless of whether said liens, charges and indebtedness
are acquired by assignment or have been released of record by the holder
thereof upon payment.
24. Hazardous Substances.
a. Warranties and Indemnification. Mortgagor shall comply with all
the terms and provisions of that certain Environmental Indemnity
Agreement, by Mortgagor in favor of Mortgagee dated on or about the date
hereof (the "ENVIRONMENTAL INDEMNITY").
b. Survival, Assignability, and Transferability.
i. The warranties and representations set forth in this
Paragraph 24 and the Environmental Indemnity shall survive the
payment and performance of the Obligations and any exercise by
Mortgagee of any remedies under this Mortgage, including without
limitation, the power of sale, or any other remedy in the nature of
foreclosure, and shall not merge with any deed given by Mortgagor to
Mortgagee in lieu of foreclosure or any deed under a power of sale.
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ii. It is agreed and intended by Mortgagor and Mortgagee that
the warranties and representations set forth above in this Paragraph
24 and the Environmental Indemnity may be assigned or otherwise
transferred by Mortgagee to its successors and assigns and to any
subsequent purchasers of all or any portion of the Property by,
through or under Mortgagee, without notice to Mortgagor and without
any further consent of Mortgagor. To the extent consent to any such
assignment or transfer is required by law, advance consent to any
such assignment or transfer is hereby given by Mortgagor in order to
maximize the extent and effect of such warranties, representations
and indemnification.
25. Other Agreements. As set out above, this Mortgage is also given as
security for the performance of all covenants and agreements contained in the
Loan Documents, including without limitation the Credit Agreement. The Mortgagor
agrees that the Credit Agreement (and all other Loan Documents) are incorporated
herein by reference and made a part hereof. The Mortgagor agrees faithfully to
perform and observe all of its obligations under the terms of the Credit
Agreement and the Loan Documents. It is agreed that the agreements contained in
this Mortgage and the agreements contained in the other Loan Documents are
intended to be supplemental obligations; however, where irreconcilable conflict
exists, the provisions of the Credit Agreement shall govern.
26. Reserve Requirements. If any law or regulation (including without
limitation Regulations D or K of the Board of Governors of the Federal Reserve
System), whether presently in force or hereafter enacted or promulgated, or any
interpretation thereof by any Governmental Authority shall:
a. modify or deem applicable any reserve, special deposit or similar
requirement against any asset held by, or deposits with or for the account
of, or loans by, or any other commitment or acquisition of funds, for
advances by, the Mortgagee; or
b. impose on the Mortgagee any other condition regarding this
Mortgage or any of the other Loan Documents;
and if the result of any of the foregoing is to increase the cost to the
Mortgagee of making or maintaining the Loan secured hereby over the cost that
would have been applicable had there been no such law, regulation or
interpretation in effect, then, upon demand, the Mortgagor shall pay to the
Mortgagee such additional amount (as shall be determined in the sole discretion
of the Mortgagee) as shall compensate for such increased cost.
27. Amendments. If the payment of the indebtedness secured by this
Mortgage or any part thereof is extended or varied or if any part of the
security therefore is released, all persons now or at any time hereafter liable
therefor, or interested in the Real Estate, shall be held to assent to such
extension, variation or release, and their liability and the lien and all
provisions hereof shall continue in full force, the right of recourse, if any,
against all such persons being expressly reserved by the Mortgagee,
notwithstanding such extension, variation or release. Any person or entity
taking a junior mortgage or other lien upon the Property or any interest
therein,
19
shall take said lien subject to the rights of Mortgagee herein to amend, modify,
and supplement this Mortgage and the other Loan Documents and to vary the rate
of interest and the method of computing the same, and to impose additional fees
and other charges, and to extend the maturity of said indebtedness, and to grant
partial releases of the lien of this Mortgage, in each and every case without
obtaining the consent of the holder of such junior lien and without the lien of
this Mortgage losing its priority over the rights of any such junior lien.
Nothing contained in this section, however, shall be construed as waiving any
provision contained herein which provides, among other things, that it shall
constitute an Event of Default if the Property is sold, conveyed, or encumbered.
28. Miscellaneous.
a. If at any time any law or court decree prohibits the performance
of any obligation undertaken herein by the Mortgagor, or provides that any
amount to be paid hereunder by the Mortgagor must be credited against the
Mortgagor's obligations under the Credit Agreement, the Mortgagee shall
have the right, on thirty (30) days' prior notice to the Mortgagor, to
require payment in full of the entire indebtedness secured hereby.
b. Any provision contained in this Mortgage, the Credit Agreement or
elsewhere notwithstanding, the Mortgagee shall not be entitled to receive
or collect, nor shall the Mortgagor be obligated to pay, interest on any
of the monies secured hereby in excess of the maximum rate of interest
permitted by the laws of the state applicable thereto, and if any such
provision shall ever be construed or held to permit the collection or to
require the payment of any amount of interest in excess of that permitted
by the laws of the state applicable thereto, the provisions of this
paragraph shall control and shall override any contrary or inconsistent
provision in this Mortgage, the Credit Agreement or elsewhere. The
intention of the parties is to conform strictly to the usury laws now in
force and every instrument relating to payment of any of the monies
secured hereby shall be held subject to reduction to the amount allowed
under said usury laws as now or hereafter construed by the courts having
jurisdiction.
c. Mortgagor acknowledges and agrees that (a) the proceeds of the
Loan will be used in conformance with subparagraph (1)(1) of Section 4 of
the Interest Act (815 ILCS 205/0.01 et seq.), (b) the obligations secured
hereby constitute a business loan which comes within the purview of said
Section 4, and (c) the loan evidenced by the Note is an exempted
transaction under the Truth-in-Lending Act, 15 U.S.C. Sec. 1601 et seq.
d. All of the Mortgagee's rights and remedies set forth in this
Mortgage and the Loan Documents are cumulative and not exclusive of one
another and may be exercised in any order, and the exercise of one shall
not be construed to be a waiver of any of the others. Such remedies are
also cumulative and not exclusive of any and all other remedies available
to the Mortgagee. The resort to any remedy provided for hereunder or under
any other instrument given in connection with the construction loan
20
financing secured hereby or provided for by law shall not prevent the
concurrent or subsequent employment of any other appropriate remedy or
remedies.
e. If the Mortgagee shall have proceeded to invoke any right, remedy
or recourse permitted under this Mortgage or any other obligation of the
Mortgagor, and shall thereafter elect to discontinue or abandon the same
for any reason, the Mortgagee shall have the unqualified right to do so
and in such event the Mortgagor and the Mortgagee shall be restored to
their former positions with respect to the Obligations. In such case this
Mortgage, all other obligations, and all rights, remedies and recourse of
the Mortgagee shall continue as if the same had not been invoked.
f. No waiver at any time of any of the provisions or conditions of
this Mortgage or of any other obligation of the Mortgagor shall be
construed as a waiver of any other of the conditions or provisions of this
Mortgage or of any of such obligations, nor shall such waiver in any
instance be construed as a waiver of the same provision or condition in
other or subsequent instances. A consent or approval given by the
Mortgagee in one instance shall not render such consent or approval
unnecessary in future instances.
g. This Mortgage may not be waived, changed or discharged orally,
but only by an agreement in writing and signed by the party against whom
enforcement of any waiver, change or discharge is sought and any oral
waiver, change or discharge of any provision of this Mortgage by a
representative of any party shall be without authority and of no force and
effect.
h. If any term or provision of this Mortgage or the application
thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Mortgage or the application of such
term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Mortgage shall be valid and shall be
enforced to the fullest extent permitted by law.
i. Paragraph headings in this Mortgage are for convenience and
reference only and the words and phrases contained therein shall in no way
be held to explain, modify, amplify or aid in the interpretation,
construction or meaning of any of the provisions herein.
j. The Loans secured by this Mortgage were negotiated in the
Commonwealth of Massachusetts and the laws of the Commonwealth of
Massachusetts shall govern the construction, interpretation, validity and
legal effect of this Mortgage and the rights and duties of the parties
hereunder, except the laws of the state in which the Property is located
shall govern the procedures for enforcing the rights and remedies of the
Mortgagee hereunder.
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k. The word "Mortgagor", as used herein, shall mean the person or
persons named at the beginning of this instrument as the Mortgagor, any
subsequent owner or owners of the equity of redemption of the Real Estate,
and any guarantor, jointly and/or severally, of the obligations of the
Mortgagor hereunder or under the Credit Agreement or other Loan Documents.
Where more than one person constitutes the entities constituting the
Mortgagor, provisions in this Mortgage with reference to bankruptcy or
insolvency or the like shall refer to each of the persons who is at that
time one of the Mortgagor, so that if, for example, but without
limitation, any person who is one of the Mortgagor (or is a partner,
trustee or joint venturer in an entity which is one of the entities
constituting the Mortgagor) shall file a petition in bankruptcy, such
filing shall be treated as a breach of condition of this Mortgage.
l. The word "Mortgagee", as used herein, shall mean the Mortgagee
named at the beginning of this instrument, its successors and assigns, and
any subsequent holder or holders of this Mortgage. Notwithstanding any
other provisions of this Agreement, the rights of the parties hereunder
are subject to the provisions of the Credit Agreement including the
provisions thereof pertaining to the rights and responsibilities of the
Mortgagee as trustee thereunder.
m. All of the rights of the Mortgagee hereunder shall inure to the
benefit of its successors and assigns, and all the covenants and
agreements of the Mortgagor herein contained shall be binding upon the
Mortgagor and its permitted successors and assigns; and, where more than
one person or entity constitutes the Mortgagor the liability of such
persons or entities under this Mortgage for the obligations set forth
herein shall be joint and several.
[SIGNATURES ON FOLLOWING PAGE]
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Executed as a sealed instrument as of the date first above written.
MORTGAGOR:
ENESCO GROUP, INC.
By: /s/ Charles E. Sanders
--------------------------------
Name: Charles E. Sanders
Title: Treasurer
STATE OF ILLINOIS
County of DuPage, ss: November 22, 2004
I, the undersigned, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that Charles E. Sanders, Treasurer of Enesco Group,
Inc. an Illinois corporation, who is personally known to me to be the same
person whose name is subscribed to the foregoing instrument as such Treasurer,
appeared before me this day in person and acknowledge that he signed and
delivered said instrument as his own free and voluntary act and as the free and
voluntary act of said Treasurer, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this 22nd day of November, 2004.
/s/ Linda DeLazzer
----------------------------------
Notary Public
My Commission Expires: 10-4-2006
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