EXHIBIT 10.5
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MORTGAGE
THIS MORTGAGE DATED MARCH 4, 2005, IS MADE AND EXECUTED BETWEEN GREYSTONE
MANUFACTURING, L.L.C., WHOSE ADDRESS IS 1613 E. 15TH STREET, TULSA, OK 74120; A
LIMITED LIABILITY COMPANY (REFERRED TO BELOW AS "GRANTOR") AND THE F&M BANK &
TRUST COMPANY, WHOSE ADDRESS IS 1330 S. HARVARD (P.O. BOX 4500-74159), TULSA, OK
74112 (REFERRED TO BELOW AS "LENDER").
GRANTOR OF MORTGAGE. For valuable consideration, Grantor mortgages and conveys
to Lender and grants to Lender a security interest in all of Grantor's right,
title, and interest in and to the following described real property, together
with all existing or subsequently erected or affixed buildings, improvements and
fixtures; rents and profits; all easements, rights of way, and appurtenances;
all water, water rights, watercourses and ditch rights (including stock in
utilities with ditch or irrigation rights); and all other rights, royalties, and
profits relating to the real property, including without limitation all
minerals, oil, gas, geothermal and similar matters (THE "REAL PROPERTY"),
LOCATED IN SCOTT COUNTY, STATE OF IOWA:
TRACT 2 - LOT 3, IN RIVERSIDE DEVELOPMENT PARK, 5TH ADDITION, TO THE
CITY OF BETTENDORF, SCOTT COUNTY, IOWA; AND
TRACT 1 - LOT 2 IN RIVERSIDE DEVELOPMENT PARK, 3RD ADDITION TO THE
CITY OF BETTENDORF, SCOTT COUNTY, IOWA
THE REAL PROPERTY OR ITS ADDRESS IS COMMONLY KNOWN AS 2600 SHORELINE DRIVE AND
2601 SHORELINE DRIVE, BETTENDORF, IA 52722.
Grantor presently assigns to lender all of Grantor's right, title, and interest
in and to all present and future leases of the Property and all Rents from the
Property. In addition, Grantor grants to Lender a Uniform Commercial Code
security interest in the Personal Property and Rents. The lien on the rents
granted in this Mortgage shall be effective from the date of the Mortgage and
not just in the event of default.
THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN
THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE
INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE
RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE
FOLLOWING TERMS:
PAYMENT AND PERFORMANCE. Except as otherwise provided in this Mortgage, Grantor
shall pay to lender all amounts secured by this Mortgage as they become due and
shall strictly perform all of Grantor's obligations under this Mortgage.
POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's
possession and use of the Property shall be governed by the following
provisions: None of the collateral for the Indebtedness constitutes, and none of
the funds represented by the Indebtedness will be used to purchase: (1)
Agricultural products or property used for an agricultural purpose as defined in
Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section
9H1(2) or 175.2(1); or (3) Property used for an agricultural purpose as defined
in Iowa Code Section 570.A.1(2). Grantor represents and warrants that: (1) There
are not now and will not be any wells situated on the Property; (2) There are
not now and will not be any solid waste disposal sites on the Property; (3)
There are not now and there will not be any hazardous wastes on the Property;
(4) There are not now and there will not be any underground storage tanks on the
Property.
POSSESSION AND USE. Until the occurrence of an Event of Default, Grantor
may (1) remain in possession and control of the Property; (2) use, operate
or manage the Property; and (3) collect the Rents from the Property.
DUTY TO MAINTAIN. Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.
COMPLIANCE WITH ENVIRONMENTAL LAWS. Grantor represents and warrants to
Lender that: (1) During the period of Grantor's ownership of the Property,
there has been no use, generation, manufacture, storage, treatment,
disposal, release or threatened release of any Hazardous Substance by any
person on, under, about or from the Property; (2) Grantor has no knowledge
of, or reason to believe that there has been, except as previously
disclosed to and acknowledged by Lender in writing, (a) any breach or
violation of any Environmental Laws, (b) any use, generation, manufacture,
storage, treatment, disposal, release or threatened release of any
Hazardous Substance on, under, about or from the Property by any prior
owners or occupants of the Property, or (c) any actual or threatened
litigation or claims of any kind by any person relating to such matters;
and (3) Except as previously disclosed to and acknowledged by Lender in
writing, (a) neither Grantor nor any tenant, contractor, agent or other
authorized user of the Property shall use, generate, manufacture, store,
treat, dispose of or release any Hazardous Substance on, under, about or
from the Property; and (b) any such activity shall be conducted in
compliance with all applicable federal, state, and local laws, regulations
and ordinances, including without limitation all Environmental Laws.
Grantor authorizes Lender and its agents to enter upon the Property to
make such inspections and tests, at Grantor's expense, as Lender may deem
appropriate to determine compliance of the Property with this section of
the Mortgage. Any inspections or tests made by Lender shall be for
Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Grantor or to any
other person. The representations and warranties contained herein are
based on Grantor's due diligence in investigating the Property for
Hazardous Substances. Grantor hereby (1) releases and waives any future
claims against Lender for indemnity or contribution in the event Grantor
becomes liable for cleanup or other costs under any such laws; and (2)
agrees to indemnify and hold harmless Lender against any and all claims,
losses, liabilities, damages, penalties, and expenses which Lender may
directly or indirectly sustain or suffer resulting from a breach of this
section of the Mortgage or as a consequence of any use, generation,
manufacture, storage, disposal, release or threatened release occurring
prior to Grantor's ownership or interest in the Property, whether or not
the same was or should have been known to Grantor. The provisions of this
section of the Mortgage, including the obligation to indemnify, shall
survive the payment of the Indebtedness and the satisfaction and
reconveyance of the lien of this Mortgage and shall not be affected by
Lender's acquisition of any interest in the Property, whether by
foreclosure or otherwise.
NUISANCE, WASTE. Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality
of the foregoing, Grantor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), coal, clay,
scoria, soil, gravel or rock products without Lender's prior written
consent.
REMOVAL OF IMPROVEMENTS. Grantor shall not demolish or remove any
Improvements from the Real Property without Lender's prior written
consent. As a condition to the removal of any Improvements, Lender may
require Grantor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.
LENDER'S RIGHT TO ENTER. Lender and Lender's agents and representatives
may enter upon the Real Property at all reasonable times to attend to
Lender's interests and to inspect the Real Property for purposes of
Grantor's compliance with the terms and conditions of this Mortgage.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in effect, of
all governmental authorities applicable to the use or occupancy of the
Property, including without limitation, the Americans With Disabilities
Act. Grantor may contest in good faith any such law, ordinance, or
regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Grantor has notified Lender in writing
prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Property are not jeopardized. Lender may require Grantor
to post adequate security or a surety bond, reasonably satisfactory to
Lender, to protect Lender's interest.
DUTY TO PROTECT. Grantor agrees neither to abandon or leave unattended the
Property. Grantor shall do all other acts, in addition to those acts set
forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.
DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare
immediately due and payable all sums secured by this Mortgage upon the sale or
transfer, without Lender's prior written consent, of all or any part of the Real
Property, or any interest in the Real Property. A "sale or transfer" means the
conveyance of Real
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Property or any right, title or interest in the Real Property; whether legal,
beneficial or equitable; whether voluntary or involuntary; whether by outright
sale, deed, installment sale contract, land contract, contract for deed,
leasehold interest with a term greater than three (3) years, lease-option
contract, or by sale, assignment, or transfer of any beneficial interest in or
to any land trust holding title to the Real Property, or by any other method of
conveyance of an interest in the Real Property. If any Grantor is a corporation,
partnership or limited liability company, transfer also includes any change in
ownership of more than twenty-five percent (25%) of the voting stock,
partnership interests or limited liability company interests, as the case may
be, of such Grantor. However, this option shall not be exercised by Lender if
such exercise is prohibited by federal law or by Iowa law.
TAXES AND LIENS. The following provisions relating to the taxes and liens on the
Property are part of this Mortgage:
PAYMENT. Grantor shall pay when due (and in all events prior to
delinquency) all taxes, payroll taxes, special taxes, assessments, water
charges and sewer service charges levied against or on account of the
Property, and shall pay when due all claims for work done on or for
services rendered or material furnished to the Property. Grantor shall
maintain the Property free of any liens having priority over or equal to
the interest of Lender under this Mortgage, except for the Existing
Indebtedness referred to in this Mortgage or those liens specifically
agreed to in writing by Lender, and except for the lien of taxes and
assessments not due as further specified in the Right to Contest
paragraph.
RIGHT TO CONTEST. Grantor may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the obligation to pay,
so long as Lender's interest in the Property is not jeopardized. If a lien
arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen
(15) days after Grantor has notice of the filing, secure the discharge of
the lien, or if requested by Lender, deposit with Lender cash or a
sufficient corporate surety bond or other security satisfactory to Lender
in an amount sufficient to discharge the lien plus any costs and
attorneys' fees, or other charges that could accrue as a result of a
foreclosure or sale under the lien. In any contest, Grantor shall defend
itself and Lender and shall satisfy any adverse judgment before
enforcement against the Property. Grantor shall name Lender as an
additional obligee under any surety bond furnished in the contest
proceedings.
EVIDENCE OF PAYMENT. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at
any time a written statement of the taxes and assessments against the
Property.
NOTICE OF CONSTRUCTION. Grantor shall notify Lender at least fifteen (15)
days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic's lien,
materialmen's lien, or other lien could be asserted on account of the
work, services, or materials. Grantor will upon request of Lender furnish
to Lender advance assurances satisfactory to Lender that Grantor can and
will pay the cost of such Improvements.
PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the
Property are a part of this Mortgage:
MAINTENANCE OF INSURANCE. Grantor shall procure and maintain policies of
fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all Improvements
on the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of
Lender. Grantor shall also procure and maintain comprehensive general
liability insurance in such coverage amounts as Lender may request with
Lender being named as additional insureds in such liability Insurance
policies. Additionally, Grantor shall maintain such other insurance,
including but not limited to hazard, business interruption and boiler
insurance as Lender may require. Policies shall be written by such
insurance companies and in such form as may be reasonably acceptable to
Lender. Grantor shall deliver to Lender certificates of coverage from each
insurer containing a stipulation that coverage will not be cancelled or
diminished without a minimum of ten (10) days' prior written notice to
Lender and not containing any disclaimer of the insurer's liability for
failure to give such notice. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of Grantor or any
other person. Should the Real Property be located in an area designated by
the Director of the Federal Emergency Management Agency as a special flood
hazard area, Grantor agrees to obtain
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and maintain Federal Flood Insurance, if available, within 45 days after
notice is given by Lender that the Property is located in a special flood
hazard area, for the full unpaid principal balance of the loan and any
prior liens on the property securing the loan, up to the maximum policy
limits set under the National Flood Insurance Program, or as otherwise
required by Lender, and to maintain such insurance for the term of the
loan.
APPLICATION OF PROCEEDS. Grantor shall promptly notify Lender of any loss
or damage to the Property. Lender may make proof of loss if Grantor fails
to do so within fifteen (15) days of the casualty. Whether or not Lender's
security is impaired, Lender may, at Lender's election, receive and retain
the proceeds of any insurance and apply the proceeds to the reduction of
the Indebtedness, payment of any lien affecting the Property, or the
restoration and repair of the Property. If Lender elects to apply the
proceeds to restoration and repair, Grantor shall repair or replace the
damaged or destroyed Improvements in a manner satisfactory to Lender.
Lender shall, upon satisfactory proof of such expenditure, pay or
reimburse Grantor from the proceeds for the reasonable cost of repair or
restoration if Grantor is not in default under this Mortgage. Any proceeds
which have not been disbursed within 180 days after their receipt and
which Lender has not committed to the repair or restoration of the
Property shall be used first to pay any amount owing to Lender under this
Mortgage, then to pay accrued interest, and the remainder, if any, shall
be applied to the principal balance of the indebtedness. If Lender holds
any proceeds after payment in full of the Indebtedness, such proceeds
shall be paid to Grantor as Grantor's interests may appear.
COMPLIANCE WITH EXISTING INDEBTEDNESS. During the period in which any
Existing Indebtedness described below is in effect, compliance with the
insurance provisions contained in the instrument evidencing such Existing
Indebtedness shall constitute compliance with the insurance provisions
under this Mortgage, to the extent compliance with the terms of this
Mortgage would constitute a duplication of insurance requirement. If any
proceeds from the insurance become payable on loss, the provisions in this
Mortgage for division of proceeds shall apply only to that portion of the
proceeds not payable to the holder of the Existing Indebtedness.
GRANTOR'S REPORT ON INSURANCE. Upon request of Lender, however not more
than once a year, Grantor shall furnish to Lender a report on each
existing policy of insurance showing: (1) the name of the insured; (2) the
risks insured; (3) the amount of the policy; (4) the property insured, the
then current replacement value of such property, and the manner of
determining that value; and (5) the expiration date of the policy. Grantor
shall, upon request of Lender, have an independent appraiser satisfactory
to Lender determine the cash value replacement cost of the Property.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Property or if Grantor fails to
comply with any provision of this Mortgage or any Related Documents, including
but not limited to Grantor's failure to comply with any obligation to maintain
Existing Indebtedness in good standing as required below, or to discharge or pay
when due any amounts Grantor is required to discharge or pay under this Mortgage
or any Related Documents, Lender on Grantor's behalf may (but shall not be
obligated to) take any action that Lender deems appropriate, including but not
limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on the Property and
paying all costs for insuring, maintaining and preserving the Property. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note or at the highest rate authorized by
law, from the date incurred or paid by Lender to the date of repayment by
Grantor. All such expenses will become a part of the Indebtedness and, at
Lender's option, will (A) be payable on demand; (B) be added to the balance of
the Note and be apportioned among and be payable with any installment payments
to become due during either (1) the term of any applicable insurance policy; or
(2) the remaining term of the Note; or (C) be treated as a balloon payment which
will be due and payable at the Note's maturity. The Mortgage also will secure
payment of these amounts. Such right shall be in addition to all other rights
and remedies to which Lender may be entitled upon Default.
WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of
the Property are a part of this Mortgage:
TITLE. Grantor warrants that: (a) Grantor holds good and marketable title
of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description
or in the Existing Indebtedness section below or in any title insurance
policy, title report, or final title opinion issued in favor of, and
accepted by, Lender in connection with this Mortgage, (b) Grantor has the
full right, power, and authority to execute and deliver this Mortgage to
Lender, and (c) the liens granted hereby are not the type of
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lien referred to in Chapter 575 of the Iowa Code Supplement, as now
enacted or hereafter modified, amended or replaced. Grantor, for itself
and all persons claiming by, through or under Grantor, agrees that it
claims no lien or right to a lien of the type contemplated by Chapter 575
or any other chapter of the Code of Iowa and further waives all notices
and rights pursuant to said law with respect to the liens hereby granted,
and represents and warrants that it is the sole party entitled to do so
and agrees to indemnify and hold harmless Lender from any loss, damage,
and costs, including reasonable attorneys' fees, threatened or suffered by
Lender arising either directly or indirectly as a result of any claim of
the applicability of said law to the liens hereby granted.
DEFENSE OF TITLE. Subject to the exception in the paragraph above, Grantor
warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is
commenced that questions Grantor's title or the interest of Lender under
this Mortgage, Grantor shall defend the action at Grantor's expense.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of Lender's own choice, and Grantor will deliver, or
cause to be delivered, to Lender such instruments as Lender may request
from time to time to permit such participation.
COMPLIANCE WITH LAWS. Grantor warrants that the Property and Grantor's use
of the Property complies with all existing applicable laws, ordinances,
and regulations of governmental authorities.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, and agreements made by Grantor in this Mortgage shall survive
the execution and delivery of this Mortgage, shall be continuing in
nature, and shall remain in full force and effect until such time as
Grantor's Indebtedness shall be paid in full.
EXISTING INDEBTEDNESS. The following provisions concerning Existing Indebtedness
are a part of this Mortgage:
EXISTING LIEN. The lien of this Mortgage securing the Indebtedness may be
secondary and inferior to the lien securing payment of an existing
obligation. The existing obligation has a current principal balance of
approximately $2,319,443.00. Grantor expressly covenants and agrees to
pay, or see to the payment of, the Existing Indebtedness and to prevent
any default on such indebtedness, any default under the instruments
evidencing such indebtedness, or any default under any security documents
for such indebtedness.
NO MODIFICATION. Grantor shall not enter into any agreement with the
holder of any mortgage, deed of trust, or other security agreement which
has priority over this Mortgage by which that agreement is modified,
amended, extended, or renewed without the prior written consent of Lender.
Grantor shall neither request nor accept any future advances under any
such security agreement without the prior written consent of Lender.
CONDEMNATION. The following provisions relating to condemnation proceedings are
a part of this Mortgage:
PROCEEDINGS. If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award.
Grantor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Grantor will deliver or cause
to be delivered to Lender such instruments and documentation as may be
requested by Lender from time to time to permit such participation.
APPLICATION OF NET PROCEEDS. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase
in lieu of condemnation, Lender may at its election require that all or
any portion of the net proceeds of the award be applied to the
Indebtedness or the repair or restoration of the Property. The net
proceeds of the award shall mean the award after payment of all reasonable
costs, expenses, and attorneys' fees incurred by Lender in connection with
the condemnation.
IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following
provisions relating to governmental taxes, fees and charges are a part of this
Mortgage:
CURRENT TAXES, FEES AND CHARGES. Upon request by Lender, Grantor shall
execute such documents in addition to this Mortgage and take whatever
other action is requested by Lender to perfect and continue Lender's lien
on
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the Real Property. Grantor shall reimburse Lender for all taxes, as
described below, together with all expenses incurred in recording,
perfecting or continuing this Mortgage, including without limitation all
taxes, fees, documentary stamps, and other charges for recording or
registering this Mortgage.
TAXES. The following shall constitute taxes to which this section applies:
(1) a specific tax upon this type of Mortgage or upon all or any part of
the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor
which Grantor is authorized or required to deduct from payments on the
Indebtedness secured by this type of Mortgage; (3) a tax on this type of
Mortgage chargeable against the Lender or the holder of the Note; and (4)
a specific tax on all or any portion of the Indebtedness or on payments of
principal and interest made by Grantor.
SUBSEQUENT TAXES. If any tax to which this section applies is enacted
subsequent to the date of this Mortgage, this event shall have the same
effect as an Event of Default, and Lender may exercise any or all of its
available remedies for an Event of Default as provided below unless
Grantor either (1) pays the tax before it becomes delinquent, or (2)
contests the tax as provided above in the Taxes and Liens section and
deposits with Lender cash or a sufficient corporate surety bond or other
security satisfactory to Lender.
SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to
this Mortgage as a security agreement are a part of this Mortgage:
SECURITY AGREEMENT. This instrument shall constitute a Security Agreement
to the extent any of the Property constitutes fixtures, and Lender shall
have all of the rights of a secured party under the Uniform Commercial
Code as amended from time to time.
SECURITY INTEREST. Upon request by Lender, Grantor shall take whatever
action is requested by Lender to perfect and continue Lender's security
interest in the Rents and Personal Property. In addition to recording this
Mortgage in the real property records, Lender may, at any time and without
further authorization from Grantor, file executed counterparts, copies or
reproductions of this Mortgage as a financing statement. Grantor shall
reimburse Lender for all expenses incurred in perfecting or continuing
this security interest. Upon default, Grantor shall not remove, sever or
detach the Personal Property from the Property. Upon default, Grantor
shall assemble any Personal Property not affixed to the Property in a
manner and at a place reasonably convenient to Grantor and Lender and make
it available to Lender within three (3) days after receipt of written
demand from Lender to the extent permitted by applicable law.
FIXTURE FILING. From the date of its recording, this Mortgage shall be
effective as a financing statement filed as a fixture filing with respect
to the Personal Property and for this purpose, the name and address of the
debtor is the name and address of Grantor as set forth on the first page
of this Mortgage and the name and address of the secured party is the name
and address of Lender as set forth on the first page of this Mortgage.
ADDRESSES. The mailing addresses of Grantor (debtor) and Lender (secured
party) from which information concerning the security interest granted by
this Mortgage may be obtained (each as required by the Uniform Commercial
Code) are as stated on the first page of this Mortgage.
FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to
further assurances and attorney-in-fact are a part of this Mortgage:
FURTHER ASSURANCES. At any time, and from time to time, upon request of
Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender's designee, and when
requested by Lender, cause to be filed, recorded, refiled, or rerecorded,
as the case may be, at such times and in such offices and places as Lender
may deem appropriate, any and all such mortgages, deeds of trust, security
deeds, security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as
may, in the sole opinion of Lender, be necessary or desirable in order to
effectuate, complete, perfect, continue, or preserve (1) Grantor's
obligations under the Note, this Mortgage, and the Related Documents, and
(2) the liens and security interests created by this Mortgage on the
Property, whether now owned or hereafter acquired by Grantor. Unless
prohibited by law or Lender agrees to the contrary in writing, Grantor
shall reimburse Lender for all costs and expenses incurred in connection
with the matters referred to in this paragraph.
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ATTORNEY-IN-FACT. If Grantor fails to do any of the things referred to in
the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes, Grantor hereby irrevocably
appoints Lender as Grantor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other things as
may be necessary or desirable, in Lender's sole opinion, to accomplish the
matters referred to in the preceding paragraph.
FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise
performs all the obligations imposed upon Grantor under this Mortgage, Lender
shall execute and deliver to Grantor a suitable satisfaction of this Mortgage
and suitable statements of termination of any financing statement on file
evidencing Lender's security interest in the Rents and the Personal Property.
Grantor will pay, if permitted by applicable law, any reasonable termination fee
as determined by Lender from time to time.
EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute
an Event of Default under this Mortgage:
PAYMENT DEFAULT. Grantor fails to make any payment when due under the
Indebtedness.
DEFAULT ON OTHER PAYMENTS. Failure of Grantor within the time required by
this Mortgage to make any payment for taxes or insurance, or any other
payment necessary to prevent filing of or to effect discharge of any lien.
OTHER DEFAULTS. Grantor fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Mortgage or in any of
the Related Documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Grantor.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor's behalf under this Mortgage
or the Related Documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Mortgage or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
document to create a valid and perfected security interest or lien) at any
time and for any reason.
DEATH OR INSOLVENCY. The dissolution of Grantor's (regardless of whether
election to continue is made), any member withdraws from the limited
liability company, or any other termination of Grantor's existence as a
going business or the death of any member, the insolvency of Grantor, the
appointment of a receiver for any part of Grantor's property, any
assignment for the benefit of creditors, any type of creditor workout, or
the commencement of any proceeding under any bankruptcy or insolvency laws
by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against any property securing the Indebtedness. This
includes a garnishment of any of Grantor's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Grantor as to the validity or
reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Grantor gives Lender written notice of the
creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an adequate reserve
or bond for the dispute.
EXISTING INDEBTEDNESS. The payment of any installment of principal or any
interest on the Existing Indebtedness is not made within the time required
by the promissory note evidencing such Indebtedness, or a default occurs
under the instrument securing such Indebtedness and is not cured during
any applicable grace period in such instrument, or any suit or other
action is commenced to foreclose any existing lien on the Property.
BREACH OF OTHER AGREEMENT. Any breach by Grantor under the terms of any
other agreement between Grantor and Lender that is not remedied within any
grace period provided therein, including without limitation any agreement
concerning any indebtedness or other obligation of Grantor to Lender,
whether existing now or later.
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EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any guarantor, endorser, surety, or accommodation party of any
of the indebtedness or any guarantor, endorser, surety, or accommodation
party dies or becomes incompetent, or revokes or disputes the validity of,
or liability under, any Guaranty of the Indebtedness.
ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of
the Indebtedness is impaired.
INSECURITY. Lender in good faith believes itself insecure.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and
at any time thereafter, Lender, at Lender's option, may exercise any one or more
of the following rights and remedies, in addition to any other rights or
remedies provided by law:
ACCELERATE INDEBTEDNESS. Lender shall have the right at its option to
declare the entire Indebtedness immediately due and payable, including any
prepayment penalty which Grantor would be required to pay without notice,
except as may be expressly required by applicable law.
UCC REMEDIES. With respect to all or any part of the Personal Property,
Lender shall have all the rights and remedies of a secured party under the
Uniform Commercial Code.
COLLECT RENTS. Lender shall have the right, without notice to Grantor, to
take possession of the Property and collect the Rents, including amounts
past due and unpaid, and apply the net proceeds, over and above Lender's
costs, against the Indebtedness. In furtherance of this right, Lender may
require any tenant or other user of the Property to make payments of rent
or use fees directly to Lender. If the Rents are collected by Lender, then
Grantor irrevocably designates Lender as Grantor's attorney-in-fact to
endorse instruments received in payment thereof in the name of Grantor and
to negotiate the same and collect the proceeds. Payments by tenants or
other users to Lender in response to Lender's demand shall satisfy the
obligations for which the payments are made, whether or not any proper
grounds for the demand existed. Lender may exercise its rights under this
subparagraph either in person, by agent, or through a receiver.
APPOINT RECEIVER. Lender shall have the right to have a receiver appointed
to take possession of all or any part of the Property, with the power to
protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply
the proceeds, over and above the cost of the receivership, against the
Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the Indebtedness by a
substantial amount. Employment by Lender shall not disqualify a person
from serving as a receiver.
JUDICIAL FORECLOSURE. Lender may obtain a judicial decree foreclosing
Grantor's interest in all or any part of the Property.
NONJUDICIAL FORECLOSURE. Lender may exercise the right to non-judicial
foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now
enacted or hereafter modified, amended or replaced.
DEFICIENCY JUDGMENT. If permitted by applicable law, Lender may obtain a
judgment for any deficiency remaining in the Indebtedness due to Lender
after application of all amounts received from the exercise of the rights
provided in this section.
TENANCY AT SUFFERANCE. If Grantor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor
shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lender's option, either (1) pay a reasonable rental
for the use of the Property, or (2) vacate the Property immediately upon
the demand of Lender. This paragraph is subject to any rights of Grantor,
under Iowa law, to remain in possession of the Property during a
redemption period.
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OTHER REMEDIES. Lender shall have all other rights and remedies provided
in this Mortgage or the Note or available at law or in equity.
SALE OF THE PROPERTY. To the extent permitted by applicable law, Grantor
hereby waives any and all right to have the Property marshalled. In
exercising its rights and remedies, Lender shall be free to sell all or
any part of the Property together or separately, in one sale or by
separate sales. Lender shall be entitled to bid at any public sale on all
or any portion of the Property.
NOTICE OF SALE. Lender shall give Grantor reasonable notice of the time
and place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal
Property is to be made. Reasonable notice shall mean notice given at least
ten (10) days before the time of the sale or disposition. Any sale of the
Personal Property may be made in conjunction with any sale of the Real
Property.
SHORTENED REDEMPTION. Grantor hereby agrees that, in the event of
foreclosure of this Mortgage, Lender may, at Lender's sole option, elect
to reduce the period of redemption pursuant to Iowa Code Sections 628.26,
628.27, or 628.28, or any other Iowa Code Section, to such time as may be
then applicable and provided by law.
ELECTION OF REMEDIES. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures
or to take action to perform an obligation of Grantor under this Mortgage,
after Grantor's failure to perform, shall not affect Lender's right to
declare a default and exercise its remedies. Nothing under this Mortgage
or otherwise shall be construed so as to limit or restrict the rights and
remedies available to Lender following an Event of Default, or in any way
to limit or restrict the rights and ability of Lender to proceed directly
against Grantor and/or against any other co-maker, guarantor, surety or
endorser and/or to proceed against any other collateral directly or
indirectly securing the Indebtedness.
ATTORNEYS' FEES; EXPENSES. If Lender institutes any suit or action to
enforce any of the terms of this Mortgage, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at
trial and upon any appeal. Whether or not any court action is involved,
and to the extent not prohibited by law, all reasonable expenses Lender
incurs that in Lender's opinion are necessary at any time for the
protection of its interest or the enforcement of its rights shall become a
part of the Indebtedness payable on demand and shall bear interest at the
Note rate from the date of the expenditure until repaid. Expenses covered
by this paragraph include, without limitation, however subject to any
limits under applicable law, Lender's attorneys' fees and Lender's legal
expenses, whether or not there is a lawsuit, including attorneys' fees and
expenses for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated post
judgment collection services, the cost of searching records, obtaining
title reports (including foreclosure reports), surveyors' reports, and
appraisal fees and title insurance, to the extent permitted by applicable
law. Grantor also will pay any court costs, in addition to all other sums
provided by law.
NOTICES. Any notice required to be given under this Mortgage, including without
limitation any notice of default and any notice of sale shall be given in
writing, and shall be effective when actually delivered, when actually received
by telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Mortgage.
All copies of notices of foreclosure from the holder of any lien which has
priority over this Mortgage shall be sent to Lender's address, as shown near the
beginning of this Mortgage. Any party may change its address for notices under
this Mortgage by giving formal written notice to the other parties, specifying
that the purpose of the notice is to change the party's address. For notice
purposes, Grantor agrees to keep Lender informed at all times of Grantor's
current address. Unless otherwise provided or required by law, if there is more
than one Grantor, any notice given by Lender to any Grantor is deemed to be
notice given to all Grantors.
MORTGAGE AMOUNT CLARIFICATION. This mortgage covers two (2) notes totaling
$7,000,000.00.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Mortgage:
AMENDMENTS. This Mortgage, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Mortgage. No alteration of or amendment to
this
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Mortgage shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
ANNUAL REPORTS. If the Property is used for purposes other than Grantor's
residence, Grantor shall furnish to Lender, upon request, a certified
statement of net operating income received from the Property during
Grantor's previous fiscal year in such form and detail as Lender shall
require. "Net operating income" shall mean all cash receipts from the
Property less all cash expenditures made in connection with the operation
of the Property.
CAPTION HEADINGS. Caption headings in this Mortgage are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Mortgage.
GOVERNING LAW. WITH RESPECT TO PROCEDURAL MATTERS RELATED TO THE
PERFECTION AND ENFORCEMENT OF LENDER'S RIGHTS AGAINST THE PROPERTY, THIS
MORTGAGE WILL BE GOVERNED BY FEDERAL LAW APPLICABLE TO LENDER AND TO THE
EXTENT NOT PREEMPTED BY FEDERAL LAW, THE LAWS OF THE STATE OF IOWA. IN ALL
OTHER RESPECTS, THIS MORTGAGE WILL BE GOVERNED BY FEDERAL LAW APPLICABLE
TO LENDER AND, TO THE EXTENT NOT PREEMPTED BY FEDERAL LAW, THE LAWS OF THE
STATE OF OKLAHOMA WITHOUT REGARD TO ITS CONFLICTS OF LAW PROVISIONS.
HOWEVER, IF THERE EVER IS A QUESTION ABOUT WHETHER ANY PROVISION OF THIS
MORTGAGE IS VALID OR ENFORCEABLE, THE PROVISION THAT IS QUESTIONED WILL BE
GOVERNED BY WHICHEVER STATE OR FEDERAL LAW WOULD FIND THE PROVISION TO BE
VALID AND ENFORCEABLE. THE LOAN TRANSACTION THAT IS EVIDENCED BY THE NOTE
AND THIS MORTGAGE HAS BEEN APPLIED FOR, CONSIDERED, APPROVED AND MADE, AND
ALL NECESSARY LOAN DOCUMENTS HAVE BEEN ACCEPTED BY LENDER IN THE STATE OF
OKLAHOMA.
NO WAIVER BY LENDER. Lender shall not be deemed to have waived any rights
under this Mortgage unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Mortgage shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Mortgage. No prior waiver by
Lender, nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender's rights or of any of Grantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Mortgage, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in at cases such consent may
be granted or withheld in the sole discretion of Lender.
SEVERABILITY. If a court of competent jurisdiction finds any provision of
this Mortgage to be illegal, invalid, or unenforceable as to any
circumstance, that finding shall not make the offending provision illegal,
invalid, or unenforceable as to any other circumstance. If feasible, the
offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified,
it shall be considered deleted from this Mortgage. Unless otherwise
required by law, the illegality, invalidity, or unenforceability of any
provision of this Mortgage shall not affect the legality, validity or
enforceability of any other provision of this Mortgage.
MERGER. There shall be no merger of the interest or estate created by this
Mortgage with any other interest or estate in the Property at any time
held by or for the benefit of Lender in any capacity, without the written
consent of Lender.
SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Mortgage
on transfer of Grantor's interest, this Mortgage shall be binding upon and
inure to the benefit of the parties, their successors and assigns. If
ownership of the Property becomes vested in a person other than Grantor,
Lender, without notice to Grantor, may deal with Grantor's successors with
reference to this Mortgage and the Indebtedness by way of forbearance or
extension without releasing Grantor from the obligations of this Mortgage
or liability under the Indebtedness.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
Mortgage.
WAIVE JURY. ALL PARTIES TO THIS MORTGAGE HEREBY WAIVE THE RIGHT TO ANY
JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY PARTY
AGAINST ANY OTHER PARTY.
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RELEASE OF RIGHTS OF DOWER, HOMESTEAD AND DISTRIBUTIVE SHARE. Each of the
undersigned hereby relinquishes all rights of dower, homestead and
distributive share in and to the Property and waives all rights of
exemption as to any of the Property. If a Grantor is not an owner of the
Property, that Grantor executes this Mortgage for the sole purpose of
relinquishing and waiving such rights.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Mortgage. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Mortgage shall have the meanings
attributed to such terms in the Uniform Commercial Code:
BORROWER. The word "Borrower" means GREYSTONE MANUFACTURING, L.L.C. and
includes all co-signers and co-makers signing the Note.
DEFAULT. The word "Default" means the Default set forth in this Mortgage
in the section titled "Default".
ENVIRONMENTAL LAWS. The words "Environmental Laws" mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without
limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, et seq., or other applicable state or federal
laws, rules, or regulations adopted pursuant thereto.
EVENT OF DEFAULT. The words "Event of Default" mean any of the events of
default set forth in this Mortgage in the events of default section of
this Mortgage.
EXISTING INDEBTEDNESS. The words "Existing Indebtedness" mean the
indebtedness described in the Existing Liens provision of this Mortgage.
GRANTOR. The word "Grantor" means GREYSTONE MANUFACTURING, L.L.C.
GUARANTY. The word "Guaranty" means the guaranty from guarantor, endorser,
surety, or accommodation party to Lender, including without limitation a
guaranty of all or part of the Note.
HAZARDOUS SUBSTANCES. The words "Hazardous Substances" mean materials
that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential
hazard to human health or the environment when improperly used, treated,
stored, disposed of, generated, manufactured, transported or otherwise
handled. The words "Hazardous Substances" are used in their very broadest
sense and include without limitation any and all hazardous or toxic
substances, materials or waste as defined by or listed under the
Environmental Laws. The term "Hazardous Substances" also includes, without
limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos.
IMPROVEMENTS. The word "Improvements" means all existing and future
improvements, buildings, structures, mobile homes affixed on the Real
Property, facilities, additions, replacements and other construction on
the Real Property.
INDEBTEDNESS. The word "Indebtedness" means all principal, interest and
late fees, and other amounts, costs and expenses payable under the Note or
Related Documents, together with all renewals of, extensions of,
modifications of, consolidations of and substitutions for the Note or
Related Documents and any amounts expended or advanced by Lender to
discharge Grantor's obligations or expenses incurred by Lender to enforce
Grantor's obligations under this Mortgage, together with interest on such
amounts as provided in this Mortgage.
LENDER. The word "Lender" means THE F&M BANK & TRUST COMPANY, its
successors and assigns.
MORTGAGE. The word "Mortgage" means this Mortgage between Grantor and
Lender.
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NOTE. The word "Note" means the promissory note dated March 4, 2005, IN
THE ORIGINAL PRINCIPAL AMOUNT OF $7,000,000.00 from Grantor to Lender,
together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of, and substitutions for the promissory
note or agreement. The maturity date of this Mortgage is March 15, 2008.
NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE INTEREST RATE.
PERSONAL PROPERTY. The words "Personal Property" mean all equipment,
fixtures, and other articles of personal property now or hereafter owned
by Grantor, and now or hereafter attached or affixed to the Real Property;
together with all accessions, parts, and additions to, all replacements
of, and all substitutions for, any of such property; and together with all
proceeds (including without limitation all insurance proceeds and refunds
of premiums) from any sale or other disposition of the Property.
PROPERTY. The word "Property" means collectively the Real Property and the
Personal Property.
REAL PROPERTY. The words "Real Property" mean the real property, interests
and rights, as further described in this Mortgage.
RELATED DOCUMENTS. The words "Related Documents" mean all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security
deeds, collateral mortgages, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with
the Indebtedness.
RENTS. The word "Rents" means all present and future rents, revenues,
income, issues, royalties, profits, and other benefits derived from the
Property.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND
GRANTOR AGREES TO ITS TERMS.
GRANTOR:
GREYSTONE MANUFACTURING, L.L.C.
BY: /S/ WARREN F. KRUGER
---------------------------------------
WARREN F. KRUGER, MANAGER, PRESIDENT & CEO OF GREYSTONE
MANUFACTURING, L.LC.
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LIMITED LIABILITY COMPANY ACKNOWLEDGEMENT
STATE OF OKLAHOMA )
) SS.
COUNTY OF TULSA )
On this 4th day of March, A.D., 2005, before me, the undersigned Notary Public
in said County and State, personally appeared WARREN F. KRUGER, MANAGER,
PRESIDENT & CEO OF GREYSTONE MANUFACTURING, L.L.C., to me personally known, who
being by me duly sworn, did say that he or she is member or designated agent of
said limited liability company, and that the instrument was signed and sealed on
behalf of the limited liability company by authority of the limited liability
company and the member or designated agent acknowledged the execution of the
instrument to be the voluntary act and deed of the limited liability company by
it and by the member or designated agent voluntarily executed.
/s/ Kay Maness
-----------------------------------------
Notary Public in the State of Oklahoma
My Commission Expires:
June 2, 2006
Commission No. 02007996