Mortgage, Security Agreement, and Assignment of Leases and Rents by Bentley's Luggage Corp. to General Electric Capital Corporation (Miami-Dade County, Florida)

Summary

Bentley's Luggage Corp. has entered into a mortgage and security agreement with General Electric Capital Corporation, acting as agent for a group of lenders. This agreement secures Bentley's obligations under a guaranty related to a credit agreement benefiting Wilsons Leather Holdings Inc. The mortgage covers real estate and related property in Miami-Dade County, Florida, and secures up to $215 million in debt, including future advances, interest, and related costs. The agreement also assigns leases and rents from the property to the lender as additional security.

EX-10.5 6 dex105.txt MORTGAGE AND STATEMENTS BY BENTLEY'S LUGGAGE CORP. Exhibit 10.5 Miami-Dade County, Florida ================================================================================ MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, FINANCING STATEMENT AND FIXTURE FILING BY BENTLEY'S LUGGAGE CORP. Mortgagor, TO GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Mortgagee, Relating to Premises in: Miami-Dade County, Florida DATED: As of June 19, 2001 ================================================================================ This instrument was prepared by and after recording should be returned to: David G. Crumbaugh Latham & Watkins 233 S. Wacker, Ste. 5800 Chicago, Illinois 60606 THIS MORTGAGE IS GIVEN IN CONNECTION WITH A MULTISTATE TRANSACTION. THE INDEBTEDNESS SECURED HEREBY IS EVIDENCED BY PROMISSORY NOTES EXECUTED OUTSIDE THE STATE OF FLORIDA. THE INDEBTEDNESS SECURED HEREBY IS ALSO SECURED BY MORTGAGES AND/OR DEEDS OF TRUST ENCUMBERING PROPERTY IN OTHER STATES. RECOVERY UNDER THIS MORTGAGE IS LIMITED TO $7,700,000 IN PRINCIPAL PLUS INTEREST, PROTECTIVE ADVANCES AND COSTS OF COLLECTION IN CONNECTION THEREWITH. DOCUMENTARY STAMP TAX IN THE AMOUNT OF $26,950 IS BEING PAID ON THE DATE HEREOF BASED ON THE LIMITED AMOUNT. INTANGIBLES TAX IN THE AMOUNT OF $ 14,000 IS BEING PAID ON THE DATE HEREOF BASED ON THE VALUE OF THE PROPERTY ($7,000,000). MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, FINANCING STATEMENT AND FIXTURE FILING ------------------------------------------------- THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, FINANCING STATEMENT AND FIXTURE FILING ("Mortgage") is made as of June 19, 2001 by Bentley's Luggage Corp., a Florida corporation, with its principal office at 7401 Boone Avenue North, Brooklyn Park, Minnesota 55428 ("Mortgagor"), to GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation, with its principal office at 10 South LaSalle Street, Suite 2800, Chicago, Illinois 60603, as mortgagee, assignee and secured party, in its capacity as agent on behalf of itself as lender and for the Lenders as hereinafter defined (together with any successors or assigns in such capacity, the "Agent" or "Mortgagee"). I. RECITALS -------- WHEREAS, Mortgagor is the owner and holder of fee simple title in and to all of the real estate located in the County of Miami-Dade and State of Florida (the "State"), more fully described in Exhibit A attached hereto (the "Premises") and the owner of the Personal Property (as hereinafter defined), which Premises forms a portion of the Property described below; WHEREAS, on June 19, 2001 Wilsons Leather Holdings Inc., a Minnesota corporation ("Borrower") entered into that certain Third Amended and Restated Credit Agreement by and among each of the financial institutions named therein (the "Lenders"), the Agent, and certain of Borrower's corporate Affiliates (as defined in the Credit Agreement) (as the same may be amended, modified or otherwise supplemented and in effect from time to time, hereinafter the "Credit Agreement"); 1 WHEREAS, Mortgagor is party to that certain Store Guarantors' Guaranty dated as of May 25, 1996 (as amended , restated or otherwise modified from time to time and reaffirmed by Mortgagor as of the date hereof, the "Guaranty") whereby Mortgagor has guaranteed all of the Obligations (as this and other capitalized terms not otherwise defined herein are defined in the Credit Agreement) of Borrower under the Credit Agreement; WHEREAS, Mortgagor wishes to provide further assurance and security to the Agent and the Lenders and as a condition to the Agent and the Lenders continuing to make Loans and provide other financial accommodations to Borrower pursuant to the Credit Agreement, the Agent and the Lenders are requiring that Mortgagor grant to the Agent, on behalf of the Lenders, a security interest in and a first mortgage lien upon the Property (as hereinafter defined) to secure all of Mortgagor's obligations under the Guaranty; WHEREAS, Mortgagor is an Affiliate of Borrower, and as such will derive direct and indirect economic benefits from the Loans and other financial accommodations provided to Borrower by Agent and Lenders pursuant to the Credit Agreement; WHEREAS, this Mortgage is being given by Mortgagor to secure (a) the payment of all the obligations of Mortgagor under the Guaranty, this Mortgage and the other Loan Documents, (b) together with the principal amount secured hereby, interest thereon and any and all disbursements made by Mortgagee for the payment of taxes, or insurance on the Property covered by the lien of this Mortgage, and for reasonable attorneys' fees, loan commissions, service charges, liquidated damages, expenses and court costs incurred in the collection of any or all of such sums of money, and (c) the performance of all terms, covenants, conditions, provisions, agreements and liabilities contained in the Guaranty, this Mortgage and in the other Loan Documents (collectively, the "Secured Indebtedness"); WHEREAS, this Mortgage also secures Mortgagor's obligations under the Guaranty relating to the payment of and includes all amounts owing by Borrower with respect to all future or further advances of the loans made pursuant to the Credit Agreement (the "Loans") as shall be made at all times, regardless of whether proceeds of the Loans have or shall be disbursed by Mortgagee herein or its successors or assigns, to and for the benefit of Borrower, its successors or assigns, to the same extent as if such future advances were made on the date of the execution of this Mortgage. The original principal amount of Secured Indebtedness secured by this Mortgage is TWO HUNDRED FIFTEEN MILLION DOLLARS ($215,000,000) and may decrease or increase from time to time. Such further or future advances shall bear interest at the same rate as specified in the Credit Agreement unless such interest rate shall be modified by subsequent agreement. The parties hereby acknowledge and intend that all advances, including future advances whenever hereafter made, shall be a lien from the time this Mortgage is recorded. 2 II. THE GRANT --------- NOW, THEREFORE, in order to secure the payment of any and all Secured Indebtedness, and in consideration of Ten and No/100 Dollars ($10.00) in hand paid by Mortgagee to Mortgagor, the Recitals above stated, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mortgagor GRANTS, BARGAINS, SELLS, ASSIGNS, RELEASES, ALIENATES, TRANSFERS, WARRANTS, DEMISES, CONVEYS and MORTGAGES to Mortgagee and its successors and assigns forever (and grants to Mortgagee and its successors and assigns forever a continuing security interest in and to) all of Mortgagor's estate, right, claim and interest in and to the Premises described on Exhibit A, together with all Mortgagor's estate, right, claim and interest in and to the following described property, all of which other property is pledged primarily on a parity with the Premises and not secondarily (the Premises and the following described rights, interests, claims and property are collectively referred to as the "Property"): (a) all buildings, structures and other improvements of every kind and description now or hereafter erected, situated, or placed upon the Premises (the "Improvements"), together with any and all Personal Property (as defined in subsection (i) below) and all attachments now or hereafter owned by Mortgagor and located in or on, forming part of, attached to, used or intended to be used in connection with, or incorporated in any such Improvements, including all extensions of, additions to, betterments, renewals of, substitutions for and replacements for any of the foregoing; (b) all claim, demand, right, title and interest of Mortgagor, whether now owned or hereafter acquired, including without limitation, any after-acquired title, franchise, license, remainder or reversion, in and to any and all (i) land or vaults lying within the right-of-way of any street, avenue, way, passage, highway, or alley, open or proposed, vacated or otherwise, adjoining the Premises; (ii) alleys, sidewalks, streets, avenues, strips and gores of land belonging, adjacent or pertaining to the Premises or the Improvements; (iii) storm and sanitary sewer, water, gas, electric, railway and telephone services relating to the Premises and the Improvements; (iv) development rights, air rights, water, water rights, water stock, gas, oil, minerals, coal and other substances of any kind or character underlying or relating to the Premises or any part thereof; and (v) tenements, hereditaments, easements, appurtenances, other rights, liberties, reservations, allowances and privileges relating to the Premises or the Improvements or in any way now or hereafter appertaining thereto, including homestead and any other claims at law or in equity; (c) all leasehold estates and right, title and interest of Mortgagor, whether now owned or hereafter acquired, in and to any and all leases, subleases, management agreements, arrangements, concessions or agreements, written or oral, relating to the use and occupancy of the Premises or the Improvements or any portion thereof, now or hereafter existing or entered into (collectively "Leases"); 3 (d) all right, title and interest of Mortgagor, whether now owned or hereafter acquired, in and to any and all rents, issues, profits, royalties, revenue, advantages, income, avails, claims against guarantors, all cash or security deposits, advance rentals, deposits or payments given and other benefits now or hereafter derived directly or indirectly from the Premises and Improvements under the Leases or otherwise (collectively "Rents"), subject to the right, power and authority in the Assignments (as hereinafter defined) to collect and apply the Rents; (e) all right, title and interest of Mortgagor in and to all options to purchase or lease the Premises or the Improvements or any portion thereof or interest therein, or any other rights, interests or greater estates in the rights and properties comprising the Property now owned or hereafter acquired by Mortgagor; (f) any interests, estates or other claims of every name, kind or nature, both in law and in equity, which Mortgagor now has or may acquire in the Premises and Improvements or other rights, interests or properties comprising the Property now owned or hereafter acquired; (g) all rights of Mortgagor to any and all plans and specifications, designs, drawings and other matters prepared for any construction on the Premises or regarding the Improvements; (h) all rights of Mortgagor under any contracts executed by Mortgagor with any provider of goods or services for or in connection with any construction undertaken on or services performed or to be performed in connection with the Premises or the Improvements; (i) all right, title and interest of Mortgagor in and to all the following tangible personal property ("Personal Property") owned by Mortgagor and now or at any time hereafter located in, on or at the Premises or the Improvements and used or useful in connection therewith: (i) all building materials and equipment located upon the Premises and intended for construction, reconstruction, alteration, repair or incorporation in or to the Improvements now or hereafter to be constructed thereon, whether or not yet incorporated in such Improvements, (all of which shall be deemed to be included in the Property upon delivery thereto); (ii) all machines, machinery, fixtures, apparatus, equipment or articles used in supplying heating, gas, electricity, air-conditioning, water, light, power, plumbing, sprinkler, waste removal, refrigeration, ventilation, and all fire sprinklers, alarm systems, protection, electronic monitoring equipment and devices; 4 (iii) all window, structural, maintenance and cleaning equipment and rigs; and (iv) all fixtures now or hereafter owned by Mortgagor and attached to or contained in and used or useful in connection with the Premises or the Improvements. All such property owned by Mortgagor and placed by it on the Premises or used in connection with the operation or maintenance shall, so far as permitted by law, be deemed for the purposes of this Mortgage to be part of the real estate constituting and located on the Premises and covered by this Mortgage. As to any of the property that is not part of such real estate or does not constitute a "fixture," as such term is defined in the Uniform Commercial Code of the State (the "Code"), this Mortgage shall be deemed to be a security agreement under the Uniform Commercial Code for the purpose of creating hereby a security interest in property, which Mortgagor hereby grants to the Mortgagee as "secured party" as defined in the Code. The enumeration of any specific items of Personal Property set forth herein shall in no way exclude or be held to exclude any items of property not specifically enumerated; (j) all the estate, interest, right, title or other claim or demand which the Mortgagor now has or may hereafter have or acquire with respect to (i) proceeds of insurance in effect with respect to the Property and (ii) any and all awards, claims for damages, judgments, settlements and other compensation made for or consequent upon the taking by condemnation, eminent domain or any like proceeding, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property, including, without limitation, any awards and compensation resulting from a change of grade of streets and awards and compensation for severance damages (collectively "Awards"). TO HAVE AND TO HOLD the Property hereby mortgaged and conveyed or so intended, together with its rents, issues and profits, unto the Mortgagee, its successors and assigns, forever, for the uses and purposes herein set forth, subject, however, only to the Permitted Exceptions (hereinafter defined). The Mortgagor hereby covenants with the Mortgagee and with the purchaser at any foreclosure sale: that at the execution and delivery hereof, Mortgagor owns the Property and has good, indefeasible estate therein, in fee simple; that the Property is free from all encumbrances and exceptions to title (and any claim of any other person) other than those encumbrances and exceptions which are Permitted Encumbrances defined in the Credit Agreement or are listed on Exhibit B hereto, without reimposing same ("Permitted Exceptions"); that it has good and lawful right to sell, mortgage and convey the Property; and that Mortgagor and its successors and assigns shall forever warrant and defend the Property against all claims and demands whatsoever. If and when Mortgagor has paid all of the indebtedness evidenced by the Term B Note, and has strictly performed and observed all of the agreements, terms, conditions, provisions and warranties contained herein and there exist no commitments of the Lenders under the Term B 5 Note or in the Credit Agreement that specifically relate to the Term B Note and the indebtedness evidenced thereby, then this Mortgage and the estate, right and interest of the Mortgagee in and to the Property shall cease and shall be released at the cost of Mortgagor, but otherwise shall remain in full force and effect. III. GENERAL AGREEMENTS ------------------ 3.1 Payment of Indebtedness. Mortgagor shall pay promptly and when due all amounts owing by it in respect of the Guaranty and all other Secured Indebtedness at the times and in the manner provided in the Guaranty, this Mortgage, or any of the other Loan Documents. Each of the Revolving Notes, the Term B Note and the Swing Line Note (as defined in the Credit Agreement; hereinafter referred to as the "Notes") bears interest as therein provided. The Notes provide for a variable rate of interest. 3.2 Impositions. Except as otherwise permitted under the Credit Agreement, Mortgagor shall pay immediately, when first due and owing, all general taxes, special taxes, special assessments, water charges, sewer charges, and any other charges, fees, taxes, claims, levies, expenses, liens and assessments, ordinary or extraordinary, governmental or nongovernmental, statutory or otherwise (all of the foregoing being herein collectively referred to as "Impositions"), that may be asserted against the Property or any part thereof or interest therein. Mortgagor may, in good faith and with reasonable diligence, contest the validity or amount of any Impositions in accordance with Section 5.2(b) of the Credit Agreement. 3.3 Payment of Impositions by Mortgagee. Upon the occurrence and during the continuance of an Event of Default (as hereinafter defined), Mortgagee is hereby authorized to make or advance, in the place and stead of Mortgagor, any payment relating to Impositions, unless such Imposition is then being contested by Mortgagor pursuant to Section 5.2(b) of the Credit Agreement. Mortgagee may do so according to any bill, statement, or estimate procured from the appropriate public office without inquiry into the accuracy or the validity of any Impositions, lien, sale, forfeiture, or related title or claim. Mortgagee is further authorized to make or advance, in place of Mortgagor, unless such matter is being contested by Mortgagor in accordance with Section 5.2(b) of the Credit Agreement, any payment relating to any apparent or threatened adverse title, lien, statement of lien, encumbrance, claim, charge, or payment otherwise relating to any other purpose herein and hereby authorized, but not enumerated in this Section, whenever, in Mortgagee's judgment and discretion, such advance seems necessary or desirable to protect the full security intended to be created by this Mortgage, but only if nonpayment by Mortgagor constitutes an Event of Default under the Credit Agreement. All such advances and indebtedness authorized by this Section shall constitute Secured Indebtedness and shall be repayable by Mortgagor upon demand with interest at the highest rate of interest which may be due and owing from time to time on any loan and payable under the Credit Agreement (the "Default Rate"). 6 3.4 Insurance, Damage to or Destruction of Collateral (a) Mortgagor shall, at its sole cost and expense, maintain the policies of insurance described on Disclosure Schedule 3.18 of the Credit Agreement relating to the Property or substantially equivalent coverage with reputable insurers. If Mortgagor at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above or to pay all premiums relating thereto, Mortgagee may at any time or times thereafter obtain and maintain such policies of insurance and pay such premium and take any other action with respect thereto which Mortgagee deems reasonably advisable. Mortgagee shall have no obligation to obtain insurance for Mortgagor or pay any premiums therefor. By doing so, Mortgagee shall not be deemed to have waived any Event of Default arising from Mortgagor's failure to maintain such insurance or pay any premiums therefor. All sums so disbursed, including reasonable attorneys' fees, court costs and other charges related thereto, shall be payable on demand by Mortgagor to Mortgagee and shall be additional Secured Indebtedness. Mortgagor must provide Mortgagee fifteen (15) days prior written notice of any non-renewal, cancellation or amendment of the insurance policies required above. (b) Mortgagor irrevocably makes, constitutes and appoints Mortgagee (and all officers, employees or agents designated by Mortgagee) as its true and lawful agent and attorney-in-fact for the purpose of making, settling and adjusting claims under such policies of insurance requested above, endorsing the name of Mortgagor on any check or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect to such policies of insurance; provided that so long as no Event of Default shall have occurred and be continuing, Mortgagor shall have the right to direct any such settlements and adjustments in its sole discretion. Mortgagor shall promptly notify Mortgagee of any loss, damage, or destruction to the Property in the amount of $1,000,000 or more, whether or not covered by insurance. If an Event of Default shall have occurred and be continuing, Mortgagee is hereby authorized to collect all insurance proceeds relating to the Property . After deducting from such proceeds the expenses, if any, incurred by Mortgagee or Mortgagor in the collection or handling thereof, Mortgagee may, at its option, apply all net proceeds to the Secured Indebtedness in accordance with the Credit Agreement or permit or require Mortgagor to use such money, or any part thereof, to replace the Property in a diligent and expeditious manner. Notwithstanding the foregoing, if the casualty giving rise to such insurance proceeds would not reasonably be expected to have a Material Adverse Effect (as defined in the Credit Agreement) and such insurance proceeds do not exceed $5,000,000 in the aggregate, Mortgagee shall permit Mortgagor to replace the Property, and shall release such insurance proceeds therefor, so long as no Event of Default shall have occurred and be continuing at the time of any requested release of funds; provided that, if Mortgagor shall not have completed the replacement of the Property within 270 days of such casualty (excluding delays due to force majeure), Mortgagee may apply such insurance proceeds to the Secured Indebtedness in accordance with the Credit Agreement. Except as otherwise provided in this Section and in the Credit Agreement, all insurance proceeds which are to be made available to Mortgagor to replace the Property shall first be applied by 7 Mortgagee in accordance with the Credit Agreement, and any excess shall be released to Mortgagor. 3.5 Condemnation and Eminent Domain. Mortgagor shall give Mortgagee prompt notice of all proceedings, instituted or threatened, seeking condemnation or a taking by eminent domain or like process (herein collectively called "Taking"), of all or any part of the Property or affecting any related easement or appurtenance (including severance of, consequential damage to, or change in grade of streets), and shall deliver to Mortgagee copies of any and all papers served in connection with any such proceeding. Mortgagor hereby assigns, transfers and sets over unto Mortgagee the entire proceeds of any and all Awards resulting from any Taking. Mortgagee is hereby authorized to collect and receive from the condemnation authorities all Awards and is further authorized to give appropriate receipts and acquittances. The proceeds of any and all Awards resulting from any Taking shall be applied as provided under Section 1.3(d) of the Credit Agreement. 3.6 Maintenance of Property. Mortgagor shall: (a) promptly repair, restore, replace or rebuild any material portion of the Property which may become damaged, destroyed, altered, removed, severed, or demolished, whether or not proceeds of insurance are available or sufficient for the purpose, with replacements at least equal in quality and condition as previously existed, free from any security interest in, encumbrances on or reservation of title thereto except the lien of this Mortgage and the Permitted Exceptions; (b) keep the Property in good condition and repair, normal wear and tear excepted, without waste, and free from mechanics', materialmen's or like liens or claims except for Permitted Exceptions; and (c) not make any material alterations in the Property, except as required by law or municipal ordinance or in the ordinary course of business, without consent of Mortgagee, which consent shall not be unreasonably withheld. 3.7 Prohibited Liens and Transfers. (a) Except as otherwise provided in Section 6.7 of the Credit Agreement and except for the Permitted Exceptions, Mortgagor shall not create, suffer, or permit to be created or filed against the Property any mortgage lien or other lien superior or inferior to the lien created by this Mortgage. Mortgagor may contest any lien claim arising from any work performed, material furnished, or obligation incurred by Mortgagor as provided in Section 5.2(b) of the Credit Agreement. (b) Except as otherwise provided in Section 6.8 of the Credit Agreement, Mortgagor may not sell, lease or convey all or any part of the Property or any interest therein. 8 3.8 Stamp Taxes. If at any time the United States government, or any federal, state, or municipal governmental subdivision, requires Internal Revenue or other documentary stamps or levies any tax on this Mortgage or any of the Loan Documents, or requires payment of any tax in the nature of or comparable to the United States Interest Equalization Tax on the Secured Indebtedness, then Mortgagor shall pay such tax, including interest and penalties, in the required manner. 3.9 Change in Tax Laws. In the event of the enactment, after the date of this Mortgage, of any law of the United States of America, or any state or political subdivision thereof, (i) deducting from the value of the Premises, for the purpose of taxation, the amount of any lien thereon; (ii) imposing upon Mortgagee the payment of all or any part of the taxes, assessments, charges or liens hereby required to be paid by Mortgagor, or (iii) changing in any way the laws relating to the taxation of mortgages or debts secured by mortgages or Mortgagor's interest in the Property, or the manner of collection of taxes, so as to adversely affect this Mortgage or the Secured Indebtedness; then Mortgagor, upon demand by Mortgagee, shall pay such taxes, assessments, charges, or liens or reimburse Mortgagee therefor. If, in the reasonable opinion of counsel for Mortgagee, it would be unlawful to require Mortgagor to make such payment or the making of such payment might result in the imposition of interest beyond the maximum amount permitted by law, then Mortgagee may elect, by notice in writing given to Mortgagor, to declare all of the Secured Indebtedness to become due and payable within one hundred eighty (180) days after the giving of such notice. Nothing contained in this Section 3.9 shall be construed as obligating Mortgagor to pay any portion of Mortgagee's federal or state income or corporate franchise tax. 3.10 Assignment of Leases and Rents. All right, title, and interest of Mortgagor in and to all present Leases affecting the Property and including and together with any and all future Leases, written or oral, upon all or any part of the Property and together with all of the rents, income, receipts, revenues, issues, avails and profits from or due or arising out of the Property are hereby transferred and assigned simultaneously herewith to Mortgagee as further security for the payment of the Secured Indebtedness. Each Lease shall be subordinate to this Mortgage. Although it is the intention of the parties that the assignment contained in this Section shall be a present assignment, it is expressly understood and agreed, anything to the contrary notwithstanding, that Mortgagee shall not exercise any of the rights or powers conferred upon it by this Section until an Event of Default shall exist under this Mortgage. Following the occurrence and during the continuance of an Event of Default, (a) Mortgagee shall have the rights and powers as are provided herein, (b) this Mortgage shall constitute a direction to each lessee under the Leases and each guarantor thereof to pay all Rents directly to Mortgagee without proof of the Event of Default, and (c) Mortgagee shall have the authority, as Mortgagor's attorney-in-fact (such authority being coupled with an interest and irrevocable), to sign the name of Mortgagor and to bind Mortgagor on all papers and documents relating to the operation, leasing and maintenance of the Property. 9 Mortgagee shall not be obligated to perform or discharge any obligation, duty or liability under any Lease, and Mortgagor shall and does hereby agree, except to the extent of Mortgagee's gross negligence or willful misconduct, to indemnify and hold the Mortgagee harmless of and from any and all liability, loss or damage which it may or might incur under any Lease or under or by reason of their assignments and of and from any and all claims and demands whatsoever which may be asserted against it by reason of all alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants or agreements contained in such Lease. Should Mortgagee incur any such liability, loss or damage under any Lease or under or by reason of its assignment, or in the defense of any claims or demands, the amount thereof, including costs, expenses and reasonable attorneys' fees, shall be secured hereby, and Mortgagor shall reimburse Mortgagee therefor immediately upon demand with interest payable at the Default Rate. 3.11 Uniform Commercial Code. This Mortgage constitutes a Security Agreement as that term is used in the Code with respect to: (i) all sums at any time on deposit for the benefit of Mortgagee pursuant to any of the provisions of this Mortgage or any of the Loan Documents; and (ii) any part of the Property which may or might now or hereafter be or be deemed to be personal property, fixtures or property (including all replacements, additions and substitutions) other than real estate (collectively "Collateral"). All of Mortgagor's right, title and interest in the Collateral is hereby assigned to Mortgagee to secure the payment of the Secured Indebtedness and the performance of all of Mortgagor's obligations. All of the terms, provisions, conditions and agreements contained in this Mortgage apply to the Collateral as fully and to the same extent as to any other property comprising the Property. At any time after an Event of Default has occurred and is continuing, Mortgagee shall have the remedies of a Secured Party under the Code, including without limitation the right to take immediate and exclusive possession of the Collateral or any part thereof. The remedies of Mortgagee hereunder are cumulative and the exercise of any one or more of the remedies provided for herein or under the Code shall not be construed as a waiver of any of the other remedies of the Mortgagee, including having the Collateral deemed part of the realty upon any foreclosure so long as any part of the Secured Indebtedness remains unsatisfied. To the extent permitted by applicable law, the security interest created hereby is specifically intended to cover and include all Leases between the Mortgagor, as lessor, and various tenants, as lessee, including all extensions and renewals of the Lease terms, as well as any amendments to or replacements of the Leases, together with all of the right, title and interest of the Mortgagor as lessor, including, without limiting the generality of the foregoing, the present and continuing right to: (i) make claim for, collect, receive and receipt for any and all of the Rents, and moneys payable as damages or in lieu of the Rents and moneys payable as the purchase price of the Property or any part thereof or claims for money and other sums of money payable or receivable thereunder howsoever payable; and (ii) bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which Mortgagor or any lessor is or may become entitled to do under the Leases. 10 This Mortgage is intended to be a "fixture filing" within the purview of Sections 9-313 and 9-402 of the Code with respect to the items of Personal Property which are or may become fixtures relating to the Premises upon recording of this Mortgage in the real estate records of the proper office. The addresses of Mortgagor (Debtor) and Mortgagee (Secured Party) are hereinbelow set forth in Section 5.1 hereof. 3.12 Releases. Without notice and without regard to the consideration therefor, and to the existence at that time of any inferior liens, Mortgagee may release from the lien created hereby all or any part of the Property, or release from liability any person obligated to repay any of the Secured Indebtedness, without affecting the liability of any party to any of the Guaranty, the Notes, this Mortgage, or any of the other Loan Documents (including without limitation any guaranty given as additional security) and without in any way affecting the priority of the lien created hereby. Mortgagee may agree with any liable party to extend the time for payment of any part or all of the Secured Indebtedness. Such agreement shall not in any way release or impair the lien created by this Mortgage or reduce or modify the liability of any person or entity obligated personally to repay the Secured Indebtedness, but shall extend the lien created by this Mortgage as against the title of all parties having any interest in the Property. 3.13 Ownership of Property. Mortgagor represents and warrants to Mortgagee that Mortgagor has good and marketable title to, or valid leasehold interests in, all of the Property. Mortgagor has received all deeds, assignments, waivers, consents, nondisturbance and attornment or similar agreements, bills of sale and other documents, and has duly effected all recordings, filings and other actions necessary to establish, protect and perfect Mortgagor's right, title and interest in and to the Property. As of the date hereof, no portion of the Premises has suffered any material damage by fire or other casualty loss that has not heretofore been repaired and restored in all material respects to its original condition or otherwise remedied. As of the date hereof, all material permits required to have been issued or appropriate to enable the Premises to be lawfully occupied and used for all of the purposes for which it is currently occupied and used have been lawfully issued and are in full force and effect. 3.14 Hazardous Materials. Mortgagor represents and warrants to Mortgagee (i) that the Premises is free of contamination from any Hazardous Material (as defined below) in such form and quantity so as to create any material unpaid liability for Mortgagor; (ii) Mortgagor has not caused or suffered to occur any Release (as defined below) with respect to any Hazardous Material at, under, above or upon the Premises where such Release would violate in any material respect, or form the basis for any material Environmental Liabilities (as defined in the Credit Agreement) under any Environmental Laws (as defined in the Credit Agreement) or Environmental Permits (as defined in the Credit Agreement) or would otherwise materially and adversely impact the value or marketability of the Premises; and (iii) Mortgagor is not involved in operations that are likely to result in the imposition of any lien on its assets or any material liability under any Environmental Law, and Mortgagor has not permitted any tenant or occupant of the Premises to engage in any such operations. As used herein, "Hazardous Material" shall mean any substance, material or waste, the generation, handling, storage, treatment or disposal of 11 which is regulated by or forms the basis of liability now or hereafter under, any governmental authority in any jurisdiction in which the Premises is located or Mortgagor has owned, leased, or operated real property or disposed of hazardous materials, or by any Federal government authority, including, without limitation, any material or substance which is (a) defined as a "solid waste," "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste" or "restricted hazardous waste" or other similar term or phrase under any Environmental Laws, (b) petroleum, or any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's), any radioactive substance, methane, volatile hydrocarbons or any industrial solvent, (c) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. ss.ss. 1251 et seq. (33 U.S.C. ss. 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. ss.1317), (d) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901, et seq. (42 U.S.C. ss. 6903), or (e) defined as a "hazardous substance" pursuant to Section 1012 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss.ss. 9601 et seq. (42 U.S.C. ss.ss. 9601). As used herein, "Release" shall mean, as to Mortgagor, any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, dumping of, leaching or migration of Hazardous Materials in the indoor or outdoor environment by Mortgagor, including the movement of Hazardous Material through or in the air, soil, surface water, ground water or property, which, in any event, has resulted in the creation of any material unpaid liability for Mortgagor. 3.15 Environmental Matters. Mortgagor agrees to (i) notify Mortgagee promptly after Mortgagor becomes aware of any Release upon the Premises which is reasonably likely to result in Environmental Liabilities and costs in excess of $200,000, and (ii) promptly forward to Mortgagee a copy of any order, notice, permit, application or any communication or report received by Mortgagor in connection with any such Release, its compliance with Environmental Laws and Environmental Permits or any other matter relating to the Environmental Laws that may affect the Premises or Mortgagor , in each case whether or not the Environmental Protection Agency, any other federal agency or any state, local or foreign environmental agency has taken or threatened any action in connection with any such Release or other matter. If, following the occurrence and during the continuance of any Event of Default, Mortgagor shall permit Mortgagee or its representatives to have access to the Premises for the purpose of conducting such environmental audits and testing as Mortgagee reasonably deems appropriate, including Phase II environmental testing. Mortgagor shall reimburse Mortgagee for the reasonable costs of such audits and tests and the same will constitute a part of the Secured Indebtedness. 3.16 Further Assurances. Mortgagor agrees that, upon request of Mortgagee from time to time, it will, at Mortgagor's sole cost and expense, execute, acknowledge and deliver all such additional instruments and further assurances of title and will do or cause to be done all such further acts and things as may reasonably be necessary to fully effectuate the intent of this Mortgage, including without limitation, reimbursing Mortgagee for the costs of appraisals of the Property, to the extent that Mortgagee reasonably determines that such appraisals are required by any law or any governmental rule, regulation, policy, guideline or directive (whether or not 12 having the force of law), or any interpretation thereof, including, without limitation, the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, and any rules promulgated to implement such provisions. In the event that Mortgagor shall fail to do any of the foregoing, Mortgagee may, in its sole discretion, do so in the name of Mortgagor, and Mortgagor hereby appoints Mortgagee as its attorney-in-fact to do any of the foregoing. IV. EVENT OF DEFAULT AND REMEDIES ----------------------------- 4.1 Event of Default. The following shall constitute an "Event of Default" under this Mortgage: (i) the occurrence of an "Event of Default," as such term is defined in the Credit Agreement, and (ii) the filing by Mortgagor a notice pursuant to Florida Statutes Section 697.04 limiting the amount which may be secured by this Mortgage. 4.2 Acceleration of Maturity. Following the occurrence of an Event of Default, the Secured Indebtedness shall become due and payable in accordance with the terms of the Guaranty and the Credit Agreement. Upon acceleration, Mortgagee may immediately proceed to foreclose this Mortgage and/or exercise any right, power or remedy provided by this Mortgage, the Guaranty or any of the other Loan Documents or by law or in equity conferred and pursue all remedies afforded to a mortgagee under and pursuant to applicable law. 4.3 Remedies Cumulative and Non-Waiver. No remedy or right of Mortgagee hereunder or under the Guaranty, or any of the Loan Documents or otherwise, or available under applicable law, shall be exclusive of any other right or remedy. Each such remedy or right shall be in addition to every other remedy or right now or hereafter existing under any such document or under applicable law. No delay in the exercise of, or omission to exercise, any remedy or right accruing on the occurrence of any Event of Default shall impair any such remedy or right or be construed to be a waiver of any such Event of Default or an acquiescence therein, nor shall it affect any subsequent Event of Default of the same or a different nature, nor shall it extend or affect any grace period. Every remedy or right may be exercised concurrently or independently, when and as often as may be deemed expedient by the Mortgagee. All obligations of the Mortgagor, and all rights, powers and remedies of the Mortgagee shall be in addition to, and not in limitation of, those provided by law or in the Guaranty or contained in any of the Loan Documents or any other written agreement or instrument relating to any of the Secured Indebtedness or any security therefor. 4.4 Expenses. In any proceeding to foreclose the lien of this Mortgage or enforce any other remedy of Mortgagee under the Credit Agreement, the Guaranty, this Mortgage, or the other Loan Documents, or in any other proceeding in connection with any of the Loan Documents or any of the Property in which Mortgagee is named as a party, there shall be allowed and included, as additional indebtedness in the judgment or decree resulting all related expenses paid or incurred by or on behalf of Mortgagee. Such expenses shall include: reasonable attorney's fees, appraiser's fees, outlays for documentary and expert evidence, stenographer's 13 charges, publication costs, survey costs, and costs of procuring all abstracts of title, title searches and examinations, title insurance policies, Torrens certificates, and any similar data and assurances with respect to title to the Property as Mortgagee may deem reasonably necessary either to prosecute or defend any such proceeding or to evidence to bidders at any sale pursuant to such decree the true condition of the title to or value of the Premises or the Property. All foregoing expenses, and such expenses as may be incurred in the protection of any of the Property and the maintenance of the lien of this Mortgage, including the reasonable fees of any attorney employed by Mortgagee in any litigation affecting the Credit Agreement, the Guaranty, this Mortgage, or the Property, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding (which may be estimated as to items to be expended after entry of such judgment or decree), shall be due and payable by Mortgagor upon demand with interest thereon at the Default Rate. 4.5 Mortgagee's Performance of Mortgagor's Obligations. Following the occurrence and during the continuance of an Event of Default, Mortgagee, either before or after acceleration of the Secured Indebtedness or the foreclosure of the lien hereof and during the period of redemption, if any, may, but shall not be required to, make any payment or perform any act herein, in the Guaranty, any of the Loan Documents or any document or instrument related thereto which is required of Mortgagor (whether or not Mortgagor is personally liable therefor) in any form and manner deemed expedient to Mortgagee; and Mortgagee may, but shall not be required to, make full or partial payments of principal or interest on any permitted prior mortgage or encumbrances and purchase, discharge, compromise or settle any tax lien or other prior lien on title or claim thereof, or redeem from any tax sale or forfeiture affecting the Premises, or contest any Impositions and may, but shall not be required to, complete construction, furnishing and equipping of the Improvements upon the Premises and rent, operate and manage the Premises and such Improvements and pay operating costs and expenses, including management fees, of every kind and nature in connection therewith, so that the Premises and Improvements shall be operational and usable for their intended purposes. All monies paid for any of the purposes herein authorized, and all expenses paid or incurred in connection therewith, including reasonable attorneys' fees and any other monies advanced by Mortgagee to protect the Premises and the lien hereof, or to complete construction, furnishing and equipping or to rent, operate and manage the Premises and such Improvements or to pay any such operating costs and expenses thereof or to keep the Premises and Improvements operational and usable for their intended purposes, shall constitute Secured Indebtedness, whether or not they exceed the amount of the Mortgagor's obligations under the Guaranty, and shall become due and payable upon demand and with interest thereon at the Default Rate. Mortgagee, in making any payment hereby authorized: (a) for the payment of Impositions, may do so according to any bill or statement, without inquiry into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof; (b) for the purchase, discharge, compromise or settlement of any other prior lien, may do so without inquiry as to the validity or amount of any claim or lien which may be asserted; or (c) for the completion of construction, furnishing or equipping of the Improvements or the Premises or the rental, operation or management of the Premises or the payment of operating cost and expenses thereof, may do so in such amounts and to such persons as Mortgagee may deem 14 appropriate and may enter into such contracts therefor as Mortgagee may deem appropriate or may perform the same itself. 4.6 Right of Possession. In any case in which Mortgagee has a right to institute foreclosure proceedings (whether or not the entire principal sum secured hereby becomes immediately due and payable or whether before or after the institution of foreclosure proceedings or whether before or after judgment thereunder and at all times until the confirmation of sale) and upon Mortgagee's request to the court, Mortgagor shall, immediately upon Mortgagee's demand, surrender to Mortgagee, and Mortgagee shall be entitled to take actual possession of the Property or any part thereof, personally or by its agent or attorneys. Mortgagee may enter upon and take and maintain possession or may apply to the court in which a foreclosure is pending to be placed in possession of all or any part of the Property, together with all documents, books, records, papers, and accounts of Mortgagor or the then owner of the Property relating thereto. Mortgagee may exclude Mortgagor, such owner, and any agents and servants from the Property. As attorney-in-fact or agent of Mortgagor or such owner, or in its own name, Mortgagee may hold, operate, manage, and control all or any part of the Property and conduct the business thereof, either personally or by its agents. Mortgagee shall have full power to use such measures, legal or equitable, as it may deem proper or necessary to enforce the payment or security of the rents, issues, deposits, profits, and avails of the Property, including actions for recovery of rent, actions in forcible detainer, and actions in distress for rent, all without notice to Mortgagor. 4.7 Priority of Rent Payments. Any rents, issues, deposits, profits, and avails of the Property received by Mortgagee after taking possession of the Property, or pursuant to any assignment to Mortgagee under the provisions of this Mortgage or any of the other Loan Documents, shall be applied in the manner set forth in Section 4.10 hereof. 4.8 Appointment of Receiver. Upon, or at any time after, the filing of a complaint to foreclose this Mortgage, the court in which such complaint is filed shall appoint a receiver of the Property whenever Mortgagee when entitled to possession so requests. Such appointment may be made either before or after foreclosure sale pursuant to applicable law; without regard to the solvency or insolvency, at the time of application for such receiver, of the person or persons, if any, liable for the payment of the Secured Indebtedness; without regard to the value of the Property at such time and whether or not the same is occupied as a homestead; and without bond being required of the applicant. Mortgagee or any employee of Mortgagee thereof may be appointed as such receiver. Such receiver shall have all powers and duties prescribed by applicable law, including the power to take possession, control, and care of the Property and to collect all rents thereof during the pendency of such foreclosure suit and, in the event of a sale and deficiency, where Mortgagor has not waived its statutory rights of redemption, during the full statutory period of redemption, as well as during any further times when Mortgagor or its devisees, legatees, heirs, executors, administrators, legal representatives, successors, or assigns, except for the intervention of such receiver, would be entitled to collect such rents, and the power to make leases to be binding upon all parties, including the Mortgagor after redemption, the purchaser at a sale pursuant to a judgment of foreclosure and any person acquiring an interest in 15 the mortgaged real estate after entry of a judgment of foreclosure. In addition, such receiver shall also have the following powers: (a) to extend or modify any then existing leases, which extensions and modifications may provide for terms to expire, or for options to lessees to extend or renew terms to expire, beyond the maturity date of the Secured Indebtedness and beyond the date of the issuance of a deed or deeds to a purchaser or purchasers at a foreclosure sale, it being understood and agreed that any such leases, and the options or other such provisions to be contained therein, shall be binding upon Mortgagor and all persons whose interests in the Property are subject to the lien hereof and upon the purchaser or purchasers at any foreclosure sale, notwithstanding any redemption, discharge of the mortgage indebtedness, satisfaction of any foreclosure judgment, or issuance of any certificate of sale or deed to any purchaser; and (b) all other powers which may be necessary or are usual in such cases for the protection, possession, control, management and operation of the Property during the whole of the period of receivership. The court from time to time, either before or after entry of judgment of foreclosure, may authorize the receiver to apply the net income in his hands in payment in whole or in part of: (a) the Secured Indebtedness, or any amounts included in any judgment of foreclosure or supplemental judgment or other item for which Mortgagee is authorized to make a protective advance, and (b) the deficiency in case of a sale and deficiency. 4.9 Foreclosure Sale. In the event of any foreclosure sale, the Property may be sold in one or more parcels. Mortgagee may bid for and acquire the Property or any part thereof at any sale made under or by virtue of this Mortgage and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting against the purchase price the unpaid amounts due and owing in respect of any Secured Indebtedness after deducting from the sales price the expenses of the sale and the costs of the action or proceedings and any other sums that Mortgagee is authorized to deduct under this Mortgage or applicable law. 4.10 Application of Proceeds. The proceeds of any foreclosure or other sale of the Property shall be distributed and applied in accordance with Section 8.2(c) of the Credit Agreement, subject to applicable law. Mortgagee may adjourn from time to time any sale by it to be made under or by virtue of this Mortgage by announcement at the time and place appointed for such sale or for such adjourned sale or sales, and, except as otherwise provided by any applicable provisions of law, Mortgagee, without further notice or publication, may make such sale at the time and place to which the same shall be so adjourned. 4.11 Insurance Upon Foreclosure. In case of an insured loss after foreclosure proceedings have been instituted, the proceeds of any insurance policy or policies, if not applied in repairing, restoring, replacing or rebuilding any portion of the Property, shall be used to pay the amount due in accordance with any decree of foreclosure that may be entered in any such proceedings, and the balance, if any, shall be paid as the court may direct. In case of the foreclosure of this Mortgage, the court in its judgment may provide that the judgment creditor may cause a new or additional loss clause to be attached to each of said policies making the loss thereunder payable to said judgment creditor; and any such foreclosure judgment may further 16 provide, unless the right of redemption has been waived, that in case of redemption under said judgment, then, and in every such case, the redemptory may cause the preceding loss clause attached to each insurance policy to be canceled and a new loss clause to be attached thereto, making the loss thereunder payable to such redemptory. In the event of foreclosure sale, Mortgagee is hereby authorized, but not required, without the consent of Mortgagor, to assign or cause a receiver to assign any and all insurance policies to the purchaser at the sale, or to take such other action as Mortgagee may deem advisable, to cause the interest of such purchaser to be protected by any of the said insurance policies. 4.12 Waiver of Statutory Rights. Mortgagor shall not apply for or avail itself of any appraisement, valuation, redemption, stay, extension, or exemption laws, or any so-called "moratorium laws," now existing or hereafter enacted, in order to prevent or hinder the enforcement or foreclosure of this Mortgage, and Mortgagor hereby waives the benefit of such laws. Mortgagor, for itself and all who may claim through or under it, waives any and all rights to have the Property and estates comprising the Property marshaled upon any foreclosure of the lien of this Mortgage, and agrees that any court having jurisdiction to foreclose such lien may order the Property sold in its entirety. Mortgagor further waives any and all rights of redemption from foreclosure and from sale under any order or decree of foreclosure of the lien created by this Mortgage, for itself and on behalf of: (i) any trust estate of which the Premises are a part; (ii) all beneficially interested persons; (iii) each and every person acquiring any interest in the Property or title to the Premises subsequent to the date of this Mortgage; and (iv) all other persons to the extent permitted by the provisions of laws of the State in which the Premises are located. 4.13 Effect of Judgment. The obtaining of any judgment by Mortgagee and any levy of any execution under any judgment upon the Property shall not affect in any manner or to any extent the Lien of this Mortgage upon the Property or any part thereof, or any Liens, powers, rights and remedies of Mortgagee hereunder, but such Liens, powers, rights and remedies shall continue unimpaired as before until the judgment or levy is satisfied. V. MISCELLANEOUS ------------- 5.1 Notices. Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other parties, or whenever any of the parties desires to give or serve upon any other parties any communication with respect to this Mortgage, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon transmission, when sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed by delivery of a copy by personal delivery or United States Mail as otherwise provided in this Section 5.1), (c) one (1) Business Day after deposit with a reputable 17 overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or facsimile number indicated hereinbelow or to such other address (or facsimile number) as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to any Person (other than Mortgagee or Mortgagor) designated below to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration or other communication: (i) If to Mortgagor: Bentley's Luggage Corp. 7401 Boone Avenue North Brooklyn Park, Minnesota 55428 Attention: Chief Financial Officer Telecopier No.: (612) 391-4906 Telephone No.: (612) 391-4000 with copies to: Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402 Attention: Susan Jacobson Telecopier No.: (612) 766-1600 Telephone No.: (612) 766-6808 (ii) If to Mortgagee: General Electric Capital Corporation 10 South LaSalle Street Suite 2800 Chicago, Illinois 60603 Attention: Wilsons Leather Account Manager Telecopier No.: (312) 419-5992 Telephone No.: (312) 419-5900 with copies to: Latham & Watkins 233 South Wacker Drive Suite 5800 18 Chicago, Illinois 60606 Attention: David G. Crumbaugh Telecopier No.: (312) 993-9767 Telephone No.: (312) 876-7660 and General Electric Capital Corporation 201 High Ridge Road Stamford, Connecticut ###-###-#### Attention: Corporate Counsel Telecopier No.: (203) 316-7889 Telephone No.: (203) 316-7552 5.2 Time of Essence. Time is of the essence of this Mortgage. 5.3 Covenants Run with Land. All of the covenants of this Mortgage shall run with the land constituting the Premises. 5.4 GOVERNING LAW. THIS MORTGAGE SHALL BE CONSTRUED AND ENFORCED ACCORDING TO THE LAWS OF THE STATE OF FLORIDA (WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS THEREOF). TO THE EXTENT THAT THIS MORTGAGE MAY OPERATE AS A SECURITY AGREEMENT UNDER THE CODE, MORTGAGEE SHALL HAVE ALL RIGHTS AND REMEDIES CONFERRED THEREIN FOR THE BENEFIT OF A SECURED PARTY AS SUCH TERM IS DEFINED IN THE CODE. 5.5 Rights and Remedies Cumulative. All rights and remedies in this Mortgage are cumulative. The holder of every obligation secured hereby may recover judgment, issue execution therefor, and resort to every other right or remedy available at law or in equity, without first exhausting and without affecting or impairing the security of any right or remedy. 5.6 Severability. If any provision of this Mortgage, or any section, sentence, clause, phrase, or word, or their application, in any circumstance, is held invalid, the validity of the remainder of this Mortgage shall be construed as if such invalid part were never included. 5.7 Non-Waiver. Unless expressly provided in this Mortgage to the contrary, no consent or waiver, express or implied, by any party, to or of any breach or default by any other party shall be deemed a consent to or waiver of the performance by such defaulting party of any other obligations or the performance by any other party of the same, or of any other, obligations. 5.8 Headings. The headings of sections and paragraphs in this Mortgage are for convenience or reference only and shall not be construed in any way to limit or define the content, scope, or intent of the provisions. 19 5.9 Grammar. As used in this Mortgage, the singular shall include the plural, and masculine, feminine, and neuter pronouns shall be fully interchangeable, where the context so requires. 5.10 Deed in Trust. If title to the Property or any part thereof is now or hereafter becomes vested in a trustee, any prohibition or restriction against the creation of any lien on the Property shall be construed as a similar prohibition or restriction against the creation of any lien on or security interest in the beneficial interest of such trust. 5.11 Successors and Assigns. This Mortgage shall be binding upon Mortgagor, its successors, assigns, legal representatives, and all other persons or entities claiming under or through Mortgagor. "Mortgagor," when used herein, shall include all such persons and entities and any others liable for the payment of the Secured Indebtedness, or any part thereof, whether or not they have executed the Guaranty or this Mortgage. The word "Mortgagee," when used herein, shall include each of: (i) the Agent in its capacity as a Lender and as Agent for the Lenders; and (ii) the Lenders, together with each of their successors, assigns and legal representatives. 5.12 Mortgagee in Possession. Nothing contained in this Mortgage shall be construed as constituting Mortgagee a mortgagee in possession in the absence of the actual taking of possession of the Property. 5.13 Compliance with Applicable Law. Anything elsewhere herein contained to the contrary notwithstanding, (a) In the event that any provision in this Mortgage shall be inconsistent with any provision of applicable law, the provisions of applicable law 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 applicable law; and (b) If any provision of this Mortgage shall grant to Mortgagee any rights or remedies upon default of the Mortgagor which are more limited than the rights that would otherwise be vested in Mortgagee under applicable law in the absence of said provision, Mortgagee shall be vested with the rights granted under applicable law to the full extent permitted by law. (c) The obligation of Borrower, Mortgagor and the other Credit Parties with respect to the payment of interest under the Notes is governed by the law of the State of Illinois applicable to contracts made and performed in that State. Without limitation of such express choice of law, it is the intention of the parties to conform strictly to the usury laws, whether state or federal, that are applicable to the respective Loan Documents. All agreements between Mortgagor and Mortgagee, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no contingency or event whatsoever shall the amount paid or agreed to be paid by Mortgagor for the use, forbearance or detention of the money to be loaned under any of the Loan Documents, or for the payment or performance of any covenant or 20 obligation contained herein or in the Loan Documents, exceed the maximum amount permissible under applicable federal or state usury laws. If under any circumstances whatsoever fulfillment of any provision hereof or of any Loan Document, at the time performance of such provision shall be due, shall involve exceeding the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity. If under any circumstances Mortgagor shall have paid an amount deemed interest by applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the principal amount owing in respect of the Loans and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and any other amounts due hereunder, the excess shall be refunded to Mortgagor. All sums paid or agreed to be paid for the use, forbearance or detention of the principal under the Loans shall, to the extent permitted by applicable law, and to the extent necessary to preclude exceeding the limit of validity prescribed by law, be amortized, prorated, allocated and spread from the date of this Mortgage until payment in full of the Secured Indebtedness so that the actual rate of interest on account of such principal amounts is uniform throughout the term hereof. The terms and provisions of this subparagraph shall control and supersede every other provision of any Loan Document. 5.14 Incorporation of Credit Agreement. The terms of the Credit Agreement are incorporated by reference herein as though set forth in full detail. In the event of any conflict between the terms and provisions of this Mortgage and the Credit Agreement, the terms and provisions of the Credit Agreement shall control. 5.15 Revolving Credit. This Mortgage secures such future or additional advances (in addition to the principal amount of the Secured Indebtedness) as may be made by Lenders, at their exclusive option, to Borrower or its successors or assigns in title, for any purpose, provided that all such advances are made within twenty (20) years from the date of this Mortgage or within such lesser period of time as may be provided by law as a prerequisite for the sufficiency of actual notice or record notice of such optional future or additional advances as against the rights of creditors or subsequent purchasers for valuable consideration to the same extent as if such future or additional advances were made on the date of the execution of this Mortgage. The total amount of Indebtedness secured by this Mortgage may be increased or decreased from time to time, but the total unpaid balance so secured at any one time shall not exceed the maximum principal amount of THREE HUNDRED MILLION DOLLARS ($300,000,000) plus interest thereon and any disbursements made under the Mortgage for the payment of impositions, taxes, assessments, levies, insurance, or otherwise, with interest on such disbursements. It is the intent of the parties that this Mortgage shall secure the payment of the Secured Indebtedness and any additional advances made from time to time pursuant to any additional notes or otherwise, all of said indebtedness being equally secured hereby and having the same priority as any amounts advanced as of the date of this Mortgage. It is agreed that any additional sum or sums advanced by Mortgagee shall be equally secured with, and have the same priority as, the original Indebtedness and shall be subject to all of the terms, provisions and conditions of this Mortgage, 21 whether or not such additional loans or advances are evidenced by other promissory notes of Mortgagor and whether or not identified by a recital that it or they are secured by this Mortgage. 5.16 WAIVER OF JURY TRIAL. MORTGAGOR, MORTGAGEE AND LENDERS HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS MORTGAGE OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN ANY WAY RELATING TO THE LOAN OR THE MORTGAGED PROPERTY (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS MORTGAGE, AND ANY CLAIMS OR DEFENSES ASSERTING THAT THIS MORTGAGE WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR MORTGAGEE AND LENDERS TO ACCEPT THIS MORTGAGE. 5.17 Copy Provided. The Mortgagor acknowledges that it has received a true copy of this Mortgage, provided without charge. (SIGNATURE PAGE FOLLOWS) 22 IN WITNESS WHEREOF, Mortgagor has duly signed and delivered this Mortgage as of the date first above written. BENTLEY'S LUGGAGE CORP., a Florida corporation By: /s/ Peter G. Michielutti ------------------------------------- Name: Peter G. Michielutti ----------------------------------- Title: Senior Vice President and Chief ---------------------------------- Financial Officer ---------------------------------- Witnesses: /s/ Corrine G. Lapinsky - ----------------------------- Corrine G. Lapinsky [SEAL] /s/ Joseph M. Mallack - ----------------------------- Joseph M. Mallack 23 STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this 15th day of June, 2001, by Peter G. Michielutti as Senior Vice President and CFO of BENTLEY'S LUGGAGE CORP., a Florida corporation, on behalf of said corporation. He/She is personally known to me or has produced known as identification. WITNESS my hand and official seal. /s/ Joanne S. Swandby ----------------------------------------- Notary Public in and for said County and State [SEAL] 24 EXHIBIT A --------- LEGAL DESCRIPTION Lot 12, Block 1 of JETSTREAM SUBDIVISION, according to the Plat thereof as recorded in Plat Book 129, Page 96 of the Public Records of MIAMI-DADE County, Florida. AND The South 80 feet of Lot 4 and Lot 5 LESS the South 210 feet thereof, Block 1 of the MIAMI INTERNATIONAL PARK, according to the Plat thereof as recorded in Plat Book 116, Page 98 of the Public Records of MIAMI-DADE County, Florida A-1 EXHIBIT B --------- PERMITTED EXCEPTIONS 1. The lien of the taxes for the year 2001 and all subsequent years, which are not yet due and payable. 2. Subject to any and all matters as recited on the Plat of MIAMI INTERNATIONAL PARK recorded in Plat Book 116, Page(s) 98, DADE County Records. 3. Subject to any and all matters as recited on the Plat of JETSTREAM SUBDIVISION recorded in Plat Book 129, Page(s) 96, DADE County Records. 4. Reservations of mineral rights in favor of the Trustees of the Internal Improvement Fund of Florida as disclosed in INDENTURE dated January 12, 1917, recorded March 6, 1918 in Deed Book 176, Page 339, as affected by; The right of entry and exploration has been released as disclosed in QUITCLAIM DEED dated March 17, 1981, recorded March 19, 1981 in O.R. Book 11046, Page 892, DADE County Records. 5. Terms and Conditions including provisions for private charges, assessments and lien rights, shown in the DECLARATION OF RESTRICTIONS AND COVENANTS FOR JETSTREAM SUBDIVISION by M.A. Grondin, Trustee, and Individually, dated July 3, 1986, recorded October 1, 1986 in O.R. Book 13036, Page 3704, as affected by; FIRST AMENDMENT TO DECLARATION OF RESTRICTIONS AND COVENANTS FOR JETSTREAM SUBDIVISION dated October 23, 1986, recorded October 29, 1986 in O.R. Book 13066, Page 3024, DADE County Records . ...but deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status, or national origin to the extent such covenants, conditions or restrictions violate 42 USC 3604(c). 6. Survey by MANUCY, INC., as Order Number 47289, dated November 24, 1986, revised June 3, 1998, last revised ____________, discloses the following: (a) Proposed F.P.L. Easement located on the Easterly portion of Lot 12, Block 1, Jet Stream Subdivision (Plat Book 129, Page 96); (b) Fence encroaches North of the South line of the subject property; (c) C.B.S, walls cross the Northeast and Southeast corners of the subject property. B-1