Exhibit 2(a)(4)
Form of Mortgage and Security Agreement
STATE OF SOUTH CAROLINA
COUNTY OF
MORTGAGE AND SECURITY AGREEMENT
Between
Texfi Industries, Inc.
and
NationsBank, N.A., as Agent
and
NationsBanc Commercial Corporation, as Disbursing Agent
Dated as of March 15, 1996
This instrument was drawn by and mail to:
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
NationsBank Corporate Center, Suite 4200
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
TABLE OF CONTENTS
ARTICLE I - REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF GRANTOR................................................................ 4
Section 1.01 Payment of Secured Obligations.................................................. 4
Section 1.02 Title of Grantor................................................................ 4
Section 1.03 Maintenance, Repair, Alterations................................................ 5
Section 1.04 Required Insurance.............................................................. 5
Section 1.05 Delivery of Insurance Policies, etc............................................. 5
Section 1.06 Insurance Proceeds.............................................................. 6
Section 1.07 Assignment of Policies Upon Foreclosure......................................... 7
Section 1.08 Indemnification; Subrogation; Waiver of Offset.................................. 7
Section 1.09 Taxes and Impositions........................................................... 8
Section 1.10 Impound for Taxes............................................................... 9
Section 1.11 Utilities....................................................................... 9
Section 1.12 Actions Affecting Mortgaged Estate.............................................. 9
Section 1.13 Actions by Beneficiary As To Mortgaged Estate................................... 10
Section 1.14 Survival of Warranties.......................................................... 10
Section 1.15 Eminent Domain.................................................................. 10
Section 1.16 Additional Encumbrances......................................................... 11
Section 1.17 Inspection, Audits and Information Regarding Collateral......................... 11
Section 1.18 Liens........................................................................... 11
Section 1.19 Beneficiary's Powers............................................................ 12
Section 1.20 Restrictions Affecting Title.................................................... 12
Section 1.21 After-Acquired Property......................................................... 12
Section 1.22 Easements and Restrictions...................................................... 12
Section 1.23 Estoppel Certificate............................................................ 13
ARTICLE II - SECURITY AGREEMENT....................................................................... 13
Section 2.01 Creation of Security Interest................................................... 13
Section 2.02 Representations, Warranties and Covenants of Grantor............................ 14
ARTICLE III - EVENTS OF DEFAULT AND REMEDIES OF BENEFICIARY............................................ 15
Section 3.01 Events of Default............................................................... 15
Section 3.02 Receiver........................................................................ 17
Section 3.03 Waiver of Rights................................................................ 17
Section 3.04 Retention of Possession......................................................... 18
Section 3.05 Remedies not Exclusive.......................................................... 18
ARTICLE IV - MISCELLANEOUS............................................................................ 18
Section 4.01 Governing Law................................................................... 18
Section 4.02 Waiver of Rights................................................................ 18
Section 4.03 Notices......................................................................... 19
Section 4.04 Captions........................................................................ 19
Section 4.05 Invalidity of Certain Provisions................................................ 19
Section 4.06 Subrogation..................................................................... 19
Exhibits
A - Description of Land
B - Permitted Exceptions
C - Excluded Equipment
COLLATERAL IS OR INCLUDES FIXTURES
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT (this "Mortgage") dated as of
March 15, 1996 by and between Texfi Industries, Inc., a Delaware corporation,
whose mailing address is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Grantor"), and NationsBank, N.A., a national banking association organized
under the laws of the United States, as Agent (the "Beneficiary") for the
benefit of itself and the financial institutions (the "Lenders") as are, or may
from time to time, become parties to the Credit Agreement (as defined below) and
NationsBanc Commercial Corporation, as Disbursing Agent (the "Disbursing
Agent").
STATEMENT OF PURPOSE
Pursuant to a Credit Agreement dated as of even date herewith (together
with all amendments and other modifications, if any, from time to time hereafter
made thereto, the "Credit Agreement") by and among the Grantor as Borrower
thereunder (the "Borrower"), the Lenders, Beneficiary as Agent thereunder and
NationsBanc Commercial Corporation as Disbursing Agent thereunder, the Lenders
will extend Loans to and cause Letters of Credit to be issued on behalf of the
Borrower, as more particularly described in the Credit Agreement. To induce the
Lenders to enter into the Credit Agreement, and as a condition to the making of
the Loans and the issuance of Letters of Credit thereunder, the Lenders require
that the Grantor execute and deliver this Mortgage.
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited, the receipt of which is hereby acknowledged, Grantor hereby irrevocably
grants, bargains, sells, transfers, conveys and assigns to Beneficiary, for
itself and as Agent for the Lenders under and subject to the terms and
conditions hereinafter set forth, all right, title, interest and estate of
Grantor in and to the real property more particularly described in Exhibit A
attached hereto and by this reference incorporated herein (the "Land");
TOGETHER WITH all of the right, title, interest and estate of Grantor,
either at law or in equity, in and to:
Any and all buildings, improvements and structures now or hereafter
erected on the Land (the "Improvements") (the Land and the Improvements are
collectively referred to as the "Property");
All rights, privileges, tenements, hereditaments, rights-of-way,
easements, appendages, streets, alleys, passages, waters, watercourses,
covenants, rights and
appurtenances of the Property belonging or in any way appertaining thereto, or
which hereafter shall in any way belong, relate or be appurtenant thereto,
whether now owned or hereafter acquired by Grantor, and all right, title, and
interest of Grantor in and to any streets, ways, watercourses, alleys,
easements, covenants and strips or gores of land now existing or hereafter
created for the benefit of Grantor, the Property or any subsequent owner or
tenant of the Property on or over land adjoining the Property or any portion
thereof and all rights to enforce the maintenance thereof;
All minerals, soil, flowers, crops, trees, timber and other emblements
now or hereafter on, under or above the Property;
All water, sanitary and storm sewer systems now or hereafter located
by, over and/or upon the Property or any part and parcel thereof, and which
water system includes all water mains, service laterals, hydrants, valves and
appurtenances, including, without limitation, all sanitary sewer lines,
including mains, laterals, manholes and appurtenances;
All paving for streets, roads, walkways or entranceways now or
hereafter located on the Property or any part or parcel thereof;
All fixtures (other than fixtures described on Exhibit C hereto)
located upon or within the Property or now or at any time hereafter attached to
or installed in, or used in connection with, any of the Property, including, but
not limited to, any and all partitions, dynamos, screens, awnings, motors,
engines, boilers, furnaces, pipes, plumbing, escalators, elevators, sprinkler
systems, fire prevention and extinguishing apparatus and equipment, water tanks,
heating, ventilating, air conditioning and air-cooling equipment, heaters,
condensers, compressors, ducts, machinery, walks, fences, shrubbery, driveways,
fittings and other fixtures of every kind and character whatsoever
(collectively, the "Fixtures");
Any award or awards heretofore made or hereafter to be made by any
municipal, state or Federal authorities to the present or any subsequent owners
of the Property or the Fixtures, including any award or awards or settlements
hereafter made resulting from condemnation proceedings or the taking of the
Property or the Fixtures, or any part thereof, under the power of eminent
domain;
All proceeds from the conversion, voluntary or involuntary, of any of
the Property or the Fixtures into cash or liquidated claims including, without
limitation, the proceeds of insurance, subject to certain restoration rights of
Grantor as provided in Section 1.06 hereof;
All existing and future leases, subleases, licenses and other
agreements for the use and occupancy of all or any portion of the Property or
the Fixtures, and any and all extensions, renewals and modifications thereof,
whether written or oral and whether for a definite term or month to month,
including without limitation (i) any and all cash or securities deposited
thereunder to secure performance by the lessees of their obligations thereunder,
(ii) the right to receive and collect all rents thereunder and (iii) any and all
guarantees of any lessee's obligations thereunder (collectively, the "Leases");
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All earnings, revenues, rents, issues, profits, avails, general
intangibles, choses in action and other income of and from the Property or the
Fixtures including, without limitation, all rents and receipts from the Leases
(collectively, the "Rents and Profits");
All architectural, engineering and similar plans, specifications,
drawings, renderings, profiles, studies, shop drawings, reports, plats, permits,
surveys and similar documents relating to the Property; all sewer taps, permits
and allocations; and all agreements for utilities, bonds, sureties and the like,
relating to the Property or appurtenant facilities erected or to be erected upon
or about the Property;
All warranties and guarantees of contractors or subcontractors or of
suppliers or manufacturers of equipment or other property incorporated into the
Improvements or used with or otherwise constituting part of the Fixtures; and
All equipment (other than the equipment described on Exhibit C hereto)
and other personal property located on, and used or useable in connection with,
the Property, including without limitation any and all air conditioners,
antennae, appliances, apparatus, awnings, basins, bathtubs, beds, bidets,
boilers, bookcases, cabinets, carpets, coolers, curtains, dehumidifiers,
disposals, doors, drapes, dryers, ducts, dynamos, elevators, engines, equipment,
escalators, fans, fittings, floor coverings, furnaces, furnishings, furniture,
hardware, heaters, humidifiers, incinerators, lighting, machinery, motors,
ovens, pictures, pipes, plants and containers, plumbing, pumps, radiators,
ranges, recreational facilities, refrigerators, screens, security systems,
shades, shelving, sinks, sprinklers, stokers, stoves, telephone systems,
toilets, ventilators, wall coverings, washers, windows, window coverings, and
wiring, as the same are now and will hereafter be constituted, whether now owned
by Grantor or hereafter acquired, together with all appliances, instruments,
improvements, accessories, equipment, parts and appurtenances appertaining or
attached thereto, or from time to time incorporated therein or installed as part
thereof, and all substitutions, renewals and replacements of and additions,
improvements, accessions and accumulations to any and all thereof which are now
owned or hereafter acquired by Grantor, together with all the rents, issues,
incomes, profits, accounts, proceeds and avails thereof.
All of the above-described right, title, interest, estate, claim and
demand of Grantor together with all cash and noncash proceeds thereof, and all
substitutions, accessions and replacements thereto and therefor, are referred to
herein as the "Mortgaged Estate".
TO HAVE AND TO HOLD the Mortgaged Estate hereby granted or mortgaged
unto Beneficiary and Beneficiary's successors and assigns, in fee simple
forever.
PROVIDED, HOWEVER, that these presents are upon the condition that, if
the Secured Obligations (as defined below) shall be paid when due, and if
Grantor shall keep, perform and observe all and singular the covenants,
agreements and provisions in this Mortgage expressed to be kept, performed and
observed by or on the part of Grantor, then this Mortgage and the estate and
rights hereby granted shall cease, determine and be void, but otherwise shall be
and remain in full force and effect.
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THIS MORTGAGE SHALL SECURE THE FOLLOWING OBLIGATIONS
(collectively, the "Secured Obligations"):
(a) Payment of the Obligations (as defined in the Credit Agreement) and
any renewals or extensions of any of the Obligations;
(b) Payment of all sums advanced by or on behalf of Beneficiary to
protect the Mortgaged Estate, with interest thereon at the rate of interest
provided in Section 4.1(d) of the Credit Agreement (the "Default Rate") from the
date of advance by Beneficiary or the Lenders to the date of payment by Grantor;
and
(c) Payment of all other sums from time to time owing to Beneficiary
under the Loan Documents (as defined in the Credit Agreement).
(d) In accordance with Section 29-3-50, S.C. Code of Laws (1976, as
amended), payment of all future advances, and readvances that may subsequently
be made to Grantor by the Lenders or NCC pursuant to the terms of the Credit
Agreement, and all renewals or extensions thereof; provided, however, that
nothing contained herein shall create an obligation on the part of the Lenders
or NCC to make future advances or readvances to Grantor, the maximum amount of
all indebtedness outstanding at any one time not to exceed $74,000,000, plus
interest thereon, all charges, and expenses of collection incurred by Grantor,
including court costs, and reasonable attorneys' fees.
Capitalized terms used herein shall have the meanings set forth in this
Mortgage or, if not defined herein, shall have the meaning ascribed to such term
in the Credit Agreement.
ARTICLE I
REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF GRANTOR
Grantor hereby represents, warrants, covenants and agrees as follows:
Section 1.01 Payment of Secured Obligations. Grantor shall pay when due
all of the Obligations, and shall pay all other sums secured hereby at the time
and place and in the manner specified in the Loan Documents.
Section 1.02 Title of Grantor. Grantor has, subject to the Permitted
Exceptions (as set forth on Exhibit B attached hereto and by this reference
incorporated herein (herein the "Permitted Exceptions")), in its own right, good
and indefeasible title in fee simple to the Mortgaged Estate which is free from
all liens and encumbrances, except the Permitted Exceptions, and has full right
to make this conveyance and that it will warrant and defend the
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title to such property, except for the Permitted Exceptions, against the lawful
claims of all Persons.
Section 1.03 Maintenance, Repair, Alterations. Grantor shall: (i) keep
the Mortgaged Estate in good condition and repair, subject to reasonable wear
and tear and damage due to casualty which is subject to repair as hereinafter
required, (ii) except as permitted by the Credit Agreement or otherwise
permitted in writing by Beneficiary, not remove, demolish or alter any of the
Mortgaged Estate or the Fixtures, other than in the ordinary course of business,
(iii) complete promptly and in good and workmanlike manner any alteration
permitted hereunder and promptly restore in like manner any Improvement which
may be damaged or destroyed thereon or therein subject to the provisions of
Section 1.06 hereof and pay when due all claims for labor performed and
materials furnished therefor, and (iv) comply, and cause the Mortgaged Estate to
comply, with all laws, ordinances, regulations, covenants, conditions and
restrictions now or hereafter affecting the Mortgaged Estate or any part
thereof.
Section 1.04 Required Insurance. Grantor shall at all times keep, or
cause to be kept, the Improvements which now are or hereafter become a part of
the Mortgaged Estate insured under an "all risk" extended coverage form of
insurance policy containing both a replacement cost and an agreed amount
endorsement (and against all other hazards as reasonably may be required by
Beneficiary, which may include, without limitation, insurance against loss or
damage by flood and earthquake). All insurance shall be in form, content and
amounts approved by Beneficiary and written by an insurance company or companies
approved by Beneficiary. The policies for such insurance shall have attached
thereto standard mortgagee clauses in favor of and permitting Beneficiary to
collect any and all proceeds payable under all such insurance. All such policies
or certified copies thereof shall be delivered to and held by Beneficiary as
further security for the Secured Obligations, with evidence of renewal coverage
delivered to Beneficiary annually at least 10 days before the expiration date of
any policy. Grantor shall also carry public liability insurance protecting
Beneficiary against liability for injuries to persons and property occurring in,
on or adjacent to the Mortgaged Estate, in forms, companies and amounts
satisfactory to Beneficiary with the policy or policies evidencing such
insurance to contain a 30 day notice of cancellation or of change in coverage
clause in favor of Beneficiary. Grantor shall not carry separate insurance,
concurrent in kind or form and contributing in the event of loss, with any
insurance required herein.
Section 1.05 Delivery of Insurance Policies, etc. All policies of
insurance shall be issued by companies with a financial rating of at least A-X
as rated in the most recent edition of Best's Insurance Reports and in amounts
in each company as may be reasonably satisfactory to Beneficiary. All policies
of insurance shall have attached thereto a lender's loss payable and additional
insured endorsement for the benefit of Beneficiary in form reasonably
satisfactory to Beneficiary, shall contain a standard waiver of subrogation
clause and shall contain such other endorsements, terms and provisions as shall
be reasonably satis factory to Beneficiary. If requested, Grantor shall furnish
Beneficiary with a certified copy of all policies of required insurance. At
least ten (10) days prior to the expiration of each
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such policy, Grantor shall furnish Beneficiary with evidence satisfactory to
Beneficiary of the reissuance of a policy continuing insurance in force as
required by this Mortgage. All such policies shall contain a provision that such
policies will not be canceled, modified or amended (including any reduction in
the scope or limits of coverage), without thirty (30) days' prior written notice
to Beneficiary. Beneficiary shall not be responsible for the solvency of any
company issuing any policy of insurance pursuant hereto whether or not approved
by it, or for the collection of any amounts due under any such policy, and shall
be responsible and accountable only for such money as may be actually received
by it, and then only in accordance with the terms hereof. Nothing contained
herein shall be construed as making Beneficiary liable in any way for any loss,
damage or injury resulting from the failure to insure the Mortgaged Estate.
Section 1.06 Insurance Proceeds. After the occurrence of any casualty
to the Mortgaged Estate or any part thereof, Grantor shall give prompt written
notice thereof to Beneficiary and each insurer and submit a claim to insurer for
payment of insurance proceeds with a copy of such claim sent by Grantor to
Beneficiary. Such casualty shall not affect the lien of this Mortgage or the
obligations of Grantor hereunder, and Beneficiary is authorized at Beneficiary's
option to compromise and settle all loss claims if not adjusted promptly by
Grantor. All proceeds of insurance paid or payable under any insurance policy
(the "Insurance Proceeds") shall be paid to Beneficiary for the benefit of
Grantor and each insurer of all or any portion of the Mortgaged Estate is hereby
authorized and directed to make payment for any such loss directly to
Beneficiary for the benefit of Grantor; provided that so long as no Event of
Default shall have occurred and be continuing, Insurance Proceeds of $100,000 or
less shall be paid to Grantor. Any Insurance Proceeds shall be applied first to
the payment of all costs and expenses incurred by Beneficiary in obtaining such
proceeds. The balance of the proceeds, if any, shall be applied (a) if
Beneficiary determines in its reasonable judgment that (i) the proceeds together
with such other sums as Grantor shall deposit with Beneficiary to pay the costs
of alteration, restoration or rebuilding the Mortgaged Estate or such portion
thereof which may have been altered, damaged or destroyed, are sufficient to pay
such costs in full, (ii) no Event of Default shall have occurred and be
continuing hereunder, (iii) following completion of such alteration, restoration
or rebuilding, the Property will be equal in value and economic viability to its
status prior to such casualty, (iv) such alteration, restoration or rebuilding
can be completed on or prior to the Revolving Credit Termination Date under the
Credit Agreement and (v) Grantor will have sufficient income pending the
completion of such, alteration, restoration or rebuilding to pay all debt
service due Beneficiary with respect to the Loans, toward altering, restoring or
rebuilding the Mortgaged Estate or such portion thereof which may have been
altered, damaged or destroyed, on the same or similar conditions and
requirements as are customarily required for construction loans made by
Beneficiary, or (b) otherwise, to the pro rata payment of principal and interest
due on the Loans based on the principal balances then outstanding and to the
payment of any other obligations due under the other Loan Documents.
Notwithstanding the application of Insurance Proceeds to the payment of a
portion of the secured indebtedness, the unpaid portion of the secured
indebtedness shall remain in full force and effect, and Grantor shall not be
excused in the payment thereof. Nothing contained in this Mortgage shall be
deemed to excuse Grantor from repairing or maintaining the Mortgaged Estate as
provided
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herein and in Section 1.03 hereof. The application or release by Beneficiary of
any Insurance Proceeds shall not cure or waive any Event of Default or notice of
default under this Mortgage or invalidate any act done pursuant to such notice.
Section 1.07 Assignment of Policies Upon Foreclosure. In the event of
foreclosure of this Mortgage or other transfer of title or assignment of the
Mortgaged Estate in extinguishment, in whole or in part, of the Secured
Obligations, all right, title and interest of Grantor in and to all policies of
insurance including any refundable premiums required by this Mortgage shall
inure to the benefit of and pass to the successor in interest of Grantor or the
purchaser or grantee of the Mortgaged Estate.
Section 1.08 Indemnification; Subrogation; Waiver of Offset.
(a) Grantor shall indemnify, defend and hold Beneficiary harmless from
any and all loss, costs, damages, expenses and liability incurred by Beneficiary
in connection with this Mortgage, including all attorneys' fees and expenses
incurred by Beneficiary, except to the extent any such loss, cost, damage,
expense or liability results from the gross negligence or willful misconduct of
Beneficiary. If Beneficiary commences an action against Grantor to enforce any
of the terms hereof or for the recovery of any sum secured hereby, Grantor shall
pay all attorneys' fees and expenses incurred by Beneficiary in connection
therewith, and the right to such attorney's fees and expenses shall be deemed to
have accrued on the commence ment of such action, and shall be enforceable
whether or not such action is prosecuted to judgment. Upon an Event of Default,
Beneficiary may employ an attorney or attorneys to protect its rights hereunder,
and in the event of such employment following an Event of Default, Grantor shall
pay all attorneys' fees and expenses incurred by Beneficiary, whether or not an
action is actually commenced against Grantor by reason of an Event of Default.
(b) All sums payable by Grantor hereunder, under the Credit Agreement
and under the other Loan Documents shall be paid without notice, demand,
counterclaim, set-off, deduction or defense and without abatement, suspension,
deferment, diminution or reduction, and the obligations and liabilities of
Grantor hereunder shall in no way be released, discharged or otherwise affected
by reason of: (i) any damage to or destruction of or any condemnation or similar
taking of the Mortgaged Estate or any part thereof, (ii) any restriction or
prevention of or interference with any use of the Mortgaged Estate or any part
thereof unless caused unlawfully by Beneficiary, (iii) any title defect or
encumbrance or any eviction from the Mortgaged Estate or any part thereof by
title paramount or otherwise, (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Grantor, or any action taken with respect to this Mortgage by any
trustee or receiver of Grantor, or by any court, in any such proceeding, or (v)
any other occurrence whatsoever, whether similar or dissimilar to the foregoing
whether or not Grantor shall have notice or knowledge of any of the foregoing.
To the extent permitted by law, Grantor waives all rights now or hereafter
conferred by statute or otherwise to any abatement, suspension, deferment,
diminution or reduction of any sum secured hereby.
Section 1.09 Taxes and Impositions.
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(a) Subject to the provisions of subsection (c) of this Section 1.09
and to the provisions of Section 1.10 hereof, Grantor shall pay or cause to be
paid and shall furnish evidence of payment thereof to Beneficiary, at least ten
(10) days prior to delinquency, all real property taxes and assessments, general
and special, and all other taxes and assessments of any kind or nature
whatsoever, including without limitation nongovernmental levies or assessments
such as maintenance charges, levies or charges resulting from covenants,
conditions and restrictions affecting the Mortgaged Estate, which are assessed
or imposed upon the Mortgaged Estate, or become due and payable, and which
create, may create or appear to create a lien upon the Mortgaged Estate, or any
part thereof (all of which taxes, assessments and other governmental and
nongovernmental charges of like nature are hereinafter referred to as
"Impositions"); provided that if, by law, any such Imposition is payable, or may
at the option of the taxpayer be paid, in installments, Grantor may pay the same
together with any accrued interest on the unpaid balance of such Imposition in
installments as the same become due and before any fine, penalty, interest or
cost may be added thereto for the nonpayment of any such installment and
interest.
(b) If at any time after the date hereof there shall be assessed or
imposed (i) a tax or assessment on the Mortgaged Estate in lieu of or in
addition to the Impositions payable by Grantor pursuant to subsection (a) above,
or (ii) a license fee, tax or assessment imposed on Beneficiary and measured by
or based in whole or in part upon the amount of the outstanding obligations
secured hereby, then all such taxes, assessments or fees shall be deemed to be
included within the term Impositions, and Grantor shall pay and discharge the
same as herein provided with respect to the payment of Impositions. At the
option of Beneficiary, all obligations secured hereby together with all accrued
interest thereon, shall become due and payable in the event that Grantor shall
not be permitted to pay such fees, taxes or assessments on behalf of
Beneficiary.
(c) Grantor shall have the right before any delinquency occurs to
contest or object to the amount or validity of any Imposition by appropriate
legal proceedings, but such right shall not be deemed or construed in any way as
relieving, modifying, or extending Grantor's covenant to pay any such Imposition
at the time and in the manner provided in this Section 1.09, unless Grantor has
given prior written notice to Beneficiary of Grantor's intent to so contest or
object to an Imposition, and unless, at Beneficiary's sole option, (i) Grantor
shall demonstrate to Beneficiary's reasonable satisfaction that the legal
proceedings shall conclu sively operate to prevent the sale of the Mortgaged
Estate, or any part thereof, to satisfy such Imposition prior to final
determination of such proceedings, (ii) Grantor shall furnish a good and
sufficient bond or surety as requested by and reasonably satisfactory to
Beneficiary or (iii) Grantor shall have provided a good and sufficient
undertaking as may be required or permitted by law to accomplish a stay of such
proceedings.
Section 1.10 Impound for Taxes. Upon demand by Beneficiary after an
Event of Default (as defined in Section 3.01 hereof) has occurred and during the
continuance thereof, Grantor shall pay to Beneficiary, on the first day of each
and every calendar month, until the Secured Obligations are paid in full, an
amount equal to one-twelfth of the annual Impositions reasonably estimated by
Beneficiary necessary to pay the installments of Impositions next due
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on the Mortgaged Estate. All such amounts paid under the terms of this Section
1.10 shall be held by Beneficiary in a non-interest bearing account. Grantor
shall cause all bills, statements or other documents relating to Impositions to
be sent or mailed directly to Beneficiary. Upon receipt of such bills,
statements or other documents, and provided Grantor has deposited sufficient
funds pursuant to this Section 1.10, Beneficiary shall pay such amounts as may
be due thereunder out of the funds so deposited. If at any time and for any
reason the funds so deposited are or will be insufficient to pay such amounts as
may then or subsequently be due, Beneficiary shall notify Grantor, and Grantor
shall promptly deposit an amount equal to such deficiency with Beneficiary.
Notwithstanding the foregoing, nothing contained herein shall cause Beneficiary
to be deemed a trustee of such funds or to be obligated to pay any amounts in
excess of the amount of funds so deposited pursuant to this Section 1.10.
Beneficiary may impound or reserve for future payment of Impositions such
portion of such payments as Beneficiary may in its reasonable discretion deem
proper, applying the balance to the principal of or interest on the indebtedness
secured hereby which may then be due and payable. If Grantor fails to deposit
sums sufficient to fully pay such Impositions at least thirty (30) days before
delinquency thereof, Beneficiary may, at Beneficiary's election and with prior
notice to Grantor, but without any obligation so to do, advance any amounts
required to make up the deficiency. All amounts so advanced, if any, shall bear
interest at the Default Rate from the date of such payment to the date of
repayment thereof in full to Beneficiary, shall be secured hereby and shall be
part of the Secured Obligations and shall be repayable to Beneficiary upon
demand.
Section 1.11 Utilities. Grantor shall pay or cause to be paid when due
all utility charges which are incurred by or on behalf of Grantor for the
benefit of the Mortgaged Estate or which may become a charge or lien against the
Mortgaged Estate for gas, electricity, water or sewer services or solid waste
removal services furnished to the Mortgaged Estate and all other assessments or
charges of a similar nature, whether public or private, affecting the Mortgaged
Estate or any portion thereof, whether or not such taxes, assessments or charges
are liens thereon and shall, upon request of Beneficiary, provide evidence of
the payment thereof in accordance with this Section 1.11.
Section 1.12 Actions Affecting Mortgaged Estate. Grantor shall appear
in and contest any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary and shall pay all costs and expenses,
including cost of evidence of title and reasonable attorneys' fees, in any such
action or proceeding in which Beneficiary may appear. Grantor shall give written
notice of any claim asserted or legal action filed against Grantor or the
Mortgaged Estate within five (5) Business Days after Grantor's first knowledge
thereof. Nothing in this Section 1.12 shall be deemed to prevent Beneficiary
from appearing in and contesting such actions and Grantor shall reimburse
Beneficiary for any costs and expenses in accordance with Section 1.08 above.
Section 1.13 Actions by Beneficiary As To Mortgaged Estate. Upon the
occurrence and during the continuance of an Event of Default, Beneficiary, in
its sole discretion, without obligation so to do and without notice to or demand
upon Grantor and without releasing Grantor from any obligation, may take any
action in respect of the
9
Mortgaged Estate in such manner and to such extent as Beneficiary may deem
necessary to protect the security hereof. In connection therewith (without
limiting its general powers), Beneficiary shall have and is hereby given the
right, but not the obligation to: (a) enter upon and take possession of the
Mortgaged Estate, (b) direct Grantor to terminate any management agent employed
by Grantor with the prior written consent of Beneficiary and to employ such
management agent as Beneficiary may determine in its sole and absolute
discretion, (c) make additions, alterations, repairs and improvements to the
Mortgaged Estate which it may consider to be necessary or proper to keep the
Mortgaged Estate in good condition and repair, subject to normal wear and tear,
(d) appear and participate in any action or proceeding affecting or which may
affect the security hereof or the rights or powers of Beneficiary, (e) pay,
purchase, contest or compromise any encumbrance, claim, charge, lien or debt
which in the reasonable judgment of Beneficiary may affect or appears to affect
the security of this Mortgage or be prior or superior hereto, (f) take or
perform all actions or pay all amounts from time to time, which this Mortgage
permits or requires Grantor to take or perform, and (g) in exercising such
powers, pay necessary expenses, including employment of counsel or other
necessary or desirable consultants. Grantor shall immediately upon demand
therefor by Beneficiary pay all costs and expenses incurred by Beneficiary in
connection with the exercise by Beneficiary of the foregoing rights, including
without limitation costs of evidence of title, court costs, appraisals, surveys
and reasonable attorneys' fees, and any such costs and expenses from the date so
paid until the date repaid in full, shall bear interest at the Default Rate, and
shall be secured hereby as part of the Secured Obligations.
Section 1.14 Survival of Warranties. Grantor shall fully and faithfully
satisfy and perform the obligations of Grantor contained in the Credit
Agreement. All representations, warranties and covenants of Grantor contained
therein shall remain continuing representations, warranties and covenants of
Grantor during any time when any portion of the Secured Obligations remains
outstanding.
Section 1.15 Eminent Domain. Should the Mortgaged Estate, or any part
thereof or interest therein, be taken or damaged by reason of any public
improvement, condemnation or eminent domain proceeding or in any other manner
(collectively, "Condemnation"), or should Grantor receive any notice or other
information regarding such proceeding, Grantor shall give prompt written notice
thereof to Beneficiary. Beneficiary may participate in any such Condemnation
proceedings, and Grantor shall from time to time deliver to Beneficiary all
instruments requested by Beneficiary to permit such participation. Grantor
shall, at its expense, diligently prosecute in a reasonable manner any such
proceedings and shall consult with Beneficiary and its attorneys and experts,
and cooperate in a reasonable manner with them in the carrying on or defense of
any such proceedings. All proceeds of Condemnation awards or proceeds of sale in
lieu of Condemnation with respect to the Mortgaged Estate and all judgments,
decrees and awards for injury or damage to the Mortgaged Estate shall be paid to
Beneficiary for the benefit of Grantor and shall be applied in the manner in
which Insurance Proceeds are to be applied pursuant to Section 1.06 hereof.
Grantor hereby assigns and transfers all such proceeds, judgments, decrees and
awards to Beneficiary and agrees to execute such further assignments of all such
proceeds, judgments, decrees and awards, as Beneficiary may request. Beneficiary
is hereby authorized, in the name of Grantor, to execute
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and deliver valid acquittances for, and to appeal from, any such judgment,
decree or award. Beneficiary shall not be, in any event or circumstance, liable
or responsible for failure to collect or exercise diligence in the collection of
any proceeds, judgments, decrees or awards.
Section 1.16 Additional Encumbrances. Grantor shall not further
encumber the Mortgaged Estate or any portion thereof.
Section 1.17 Inspection, Audits and Information Regarding
Collateral.
(a) Grantor shall permit Beneficiary, its representatives and agents,
to enter upon the Mortgaged Estate at all reasonable times and during normal
business hours and to inspect the Mortgaged Estate, and shall cooperate with
Beneficiary, its representatives and agents, during such inspections, including
making available to Beneficiary working copies of all plans and specifications
together with all related supplementary materials.
(b) Grantor shall also permit Beneficiary, its representatives and
agents, to examine, copy and make extracts of the books, records, accounting
data and other documents of Grantor that relate in any way to the Mortgaged
Estate, including, without limitation, all permits, licenses, consents and
approvals of all governmental authorities having jurisdiction over Grantor and
the Mortgaged Estate. All such books, records and documents shall be made
available to Beneficiary promptly upon written demand therefor and, at the
request of Beneficiary, Grantor shall furnish Beneficiary with convenient
facilities for the foregoing purposes.
Section 1.18 Liens. Grantor shall, within thirty (30) days after
Grantor receives notice thereof, pay and discharge, at Grantor's cost and
expense, all liens, encumbrances and charges upon the Mortgaged Estate, or any
part thereof or interest therein, except for Permitted Exceptions. Grantor shall
have the right to contest in good faith the validity of any such lien,
encumbrance or charge; provided that (a) Grantor shall first deposit with
Beneficiary or Beneficiary's title company a bond or other security satisfactory
to Beneficiary in such amounts as Beneficiary and the title company shall
require, and (b) Grantor shall thereafter diligently proceed to cause such lien,
encumbrance or charge to be removed and discharged. If Grantor shall fail to
discharge any such lien, encumbrance or charge, then, in addition to any other
right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to,
discharge the same, either by paying the amount claimed to be due, or by
procuring the discharge of such lien by depositing in court a bond or the amount
claimed or otherwise giving security for such claim, or in such manner as is or
may be prescribed by law and such amount paid or expended by Beneficiary shall
bear interest at the Default Rate, shall be part of the Secured Obligations and
secured hereby and shall be repaid to Beneficiary on demand.
Section 1.19 Beneficiary's Powers. At any time, or from time to time,
without notice and without liability therefor, and without affecting the
personal liability, if any, of any Person for payment of the Secured Obligations
or the effect of this Mortgage upon the remainder of the Mortgaged Estate,
Beneficiary with the consent of the Required Lenders (as
11
defined in the Credit Agreement) may, without notice, (a) release any part of
the Mortgaged Estate, (b) consent in writing to the making of any map or plat
thereof, (c) join in granting any easement thereon, (d) join in any extension
agreement or any agreement subordinating the lien or charge hereof, (e) release
any person liable for payment of the indebtedness secured hereby, (f) extend the
maturity or alter any of the terms of any such obligations, (g) grant other
indulgences, (h) take or release any other or additional security for any
obligation herein mentioned, (i) make compositions or other arrangements with
debtors in relation thereto, or (j) advance additional funds to protect the
security hereof and pay or discharge the obligations of Grantor hereunder or
under the Loan Documents, and all amounts so advanced, with interest thereon at
the Default Rate, shall be part of the Secured Obligations and secured hereby
and such amount paid or expended by Beneficiary shall bear interest at the
Default Rate, and shall be repaid to Beneficiary on demand.
Section 1.20 Restrictions Affecting Title. Grantor shall perform when
due all obligations required to be performed by Grantor by the provisions of any
agreement affecting title to the Mortgaged Estate.
Section 1.21 After-Acquired Property. All right, title and interest of
Grantor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Estate, hereafter acquired by, or released to, Grantor or constructed,
assembled or placed by Grantor on the Land, and all conversions of the security
constituted thereby, immediately upon such acquisition, release, construction,
assembling, placement or conversion, as the case may be, and in each such case,
without any further mortgage, conveyance, assignment, or other act by Grantor,
shall become subject to the lien of this Mortgage as fully and completely, and
with the same effect, as though now owned by Grantor and specifically described
in the granting clauses hereof, but at any and all times Grantor will execute
and deliver to Beneficiary any and all such further assurances, mortgages,
conveyances, or assignments thereof as Beneficiary may reasonably require for
the purpose of expressly and specifically subjecting the same to the lien of
this Mortgage.
Section 1.22 Easements and Restrictions. All proposed easements,
permits, licenses, plans, tract maps and other instruments which would or might
affect the title to the Mortgaged Estate shall be submitted to Beneficiary for
Beneficiary's approval (and execution solely as lienholder if Beneficiary so
desires) prior to the execution thereof by Grantor, accompanied by a survey
showing the exact proposed location thereof and such other information as
Beneficiary shall reasonably require. Grantor shall not subject the Mortgaged
Estate or any part thereof to any easements, permits, licenses, plans, tract
maps or other instruments which would or might affect the title to the Mortgaged
Estate (other than a Permitted Exception) without the prior written consent of
Beneficiary.
Section 1.23 Estoppel Certificate. Grantor shall, at any time and from
time to time upon not less than ten (10) days' prior written notice from
Beneficiary execute, acknowledge and deliver to Beneficiary a statement (i)
certifying that this Mortgage and the Secured Obligations are unmodified and in
full force and effect or, if modified, stating the nature
12
thereof and certifying that this Mortgage and the Secured Obligations, as so
modified, are in full force and effect and the date to which principal, interest
and other sums secured hereby have been paid and (ii) acknowledging that there
are no uncured defaults or circumstances which, with the passage of time, or the
giving of notice, or both, would constitute an Event of Default under this
Mortgage or under the Secured Obligations or specifying such defaults if any are
claimed. Any such certificate may be conclusively relied upon by Beneficiary and
any prospective purchaser or assignee of the Secured Obligations. Grantor's
failure to deliver such certificate within such time shall be conclusive upon
Grantor that (A) the Secured Obligations are in full force and effect, without
modification, except as may be represented by Beneficiary, and (B) there are no
uncured defaults hereunder or circumstances which, with the passage of time, or
the giving of notice, or both, would constitute an Event of Default.
ARTICLE II
SECURITY AGREEMENT
Section 2.01 Creation of Security Interest. This Mortgage shall
constitute a security agreement between Grantor as the Debtor and Beneficiary as
the Secured Party, and Grantor hereby grants to Beneficiary a security interest
in such of the Mortgaged Estate as may, in accordance with the Uniform
Commercial Code of the State of North Carolina (the "UCC"), be subject to a
security interest thereunder (herein, the "UCC Property"). Cumulative of all
other rights of Beneficiary hereunder, Beneficiary shall have all of the rights
conferred upon secured parties by the UCC. Grantor will execute and deliver to
Beneficiary all financing statements that may from time to time be reasonably
required by Beneficiary to establish and maintain the validity and priority of
the security interest of Beneficiary and pay all costs and expenses of any
searches reasonably required by Beneficiary. Beneficiary may exercise any or all
of the remedies of a secured party available to it under the UCC with respect to
the UCC Property, and it is expressly agreed that if upon an Event of Default
Beneficiary should proceed to dispose of the UCC Property in accordance with the
provisions of the UCC, five (5) days' notice by Beneficiary to Grantor shall be
deemed to be reasonable notice under any provision of the UCC requiring such
notice; provided, that, to the extent permitted by applicable law, Beneficiary
may at its option dispose of the UCC Property in accordance with Beneficiary's
rights and remedies with respect to the Mortgaged Estate pursuant to the
provisions of this Mortgage in lieu of proceeding under the UCC.
Grantor shall give advance notice in writing to Beneficiary of any
proposed change in Grantor's name, identity, or business form or structure and
will execute and deliver to Beneficiary, prior to or concurrently with the
occurrence of any such change, all additional financing statements that
Beneficiary may require to establish and maintain the validity and priority of
Beneficiary's security interest with respect to any of the UCC Property. Grantor
hereby appoints Beneficiary as its attorney-in-fact to execute and file on its
behalf any financing statements, continuation statements or other statements in
connection therewith which Beneficiary deems necessary or reasonably advised, to
preserve and maintain the
13
priority of the lien hereof, or to extend the effectiveness hereof, under the
UCC or any other laws that may hereafter become applicable. This power, being
coupled with an interest, shall be irrevocable so long as any of the Secured
Obligations remains unpaid.
This Mortgage shall be effective as a financing statement filed as a
fixture filing from the date of its filing for record in the real estate records
of the county in which the UCC Property is situated. Information concerning the
security interest created by this Mortgage may be obtained from Beneficiary, as
secured party, at the address of Beneficiary stated above. The mailing address
of Grantor, as debtor, is as stated in the introductory paragraph of this
Mortgage.
Section 2.02 Representations, Warranties and Covenants of Grantor.
Grantor hereby represents, warrants and covenants, with respect to the UCC
Property as follows:
(a) except for the security interest granted hereby, Grantor
is, and as to portions of the UCC Property to be acquired by Grantor
after the date hereof will be, the sole owner of the UCC Property, free
from any adverse lien, security interest, encumbrance or adverse claims
thereon of any kind whatsoever except for Permitted Exceptions. Grantor
will notify Beneficiary of, and will defend such property against, all
claims and demands of all persons at any time claiming the same or any
interest therein;
(b) except as otherwise provided herein or in the other Loan
Documents, Grantor will not lease, sell, convey, remove, alter or in
any manner transfer the UCC Property without the prior written consent
of Beneficiary, other than in the ordinary course of business and
except as permitted by the Credit Agreement; and
(c) the UCC Property will be kept on or at the Property and
Grantor will not remove the UCC Property from the Property unless it is
replaced with replacement property satisfactory to Beneficiary, without
the prior written consent of Beneficiary, except as otherwise provided
herein or in the Credit Agreement.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES OF BENEFICIARY
Section 3.01 Events of Default. If
(a) An Event of Default shall occur and be continuing under the Credit
Agreement; or
(b) Grantor shall fail to perform or observe any of its covenants or
agreements set forth herein and such failure shall continue for more than three
(3) Business Days from the
14
date due if the event or condition is a failure to pay money to or on behalf of
Beneficiary as and when due or for more than thirty (30) days after written
notice from Beneficiary to Grantor of such failure if the event or condition is
other than a failure to pay money; or
(c) Grantor shall, without the prior written consent of Beneficiary,
sell, transfer, assign or further encumber the Mortgaged Estate or any part
thereof or any interest therein, or shall be divested of its title or any
interest therein, in any manner, whether voluntarily or involuntarily;
then and in each and every such case ("Event of Default" or "Default"), and at
any time thereafter while such Event of Default is continuing, Beneficiary shall
have, in addition to any rights at law or in equity, each and all of the
following rights and remedies, which may be exercised individually, collectively
or cumulatively:
(i) Beneficiary may, at its option, by written notice to
Grantor, declare immediately due and payable the Secured Obligations
(any notice of intent to accelerate such Secured Obligations prior to
the notice of acceleration being expressly waived by Grantor), and upon
any such declaration, the principal of accrued and unpaid interest and
all other Secured Obligations shall become and be immediately due and
payable. Anything to the contrary contained in this Mortgage
notwithstanding, the principal debt and, to the extent permitted by
applicable law, accrued and unpaid interest to that date shall
thereafter bear interest at the Default Rate until paid.
(ii) To the extent permitted by applicable law, Beneficiary
personally, or by the agents or attorneys of Beneficiary, may take
immediate possession of the Mortgaged Estate hereby conveyed and
operate or lease the same and collect all income and rents arising
therefrom then due or that may thereafter become due, and pay the
proceeds so collected therefrom to Beneficiary for application in
accordance with the Credit Agreement.
(iii) In the event of the noncompliance with any duty or
duties required of Grantor under the terms of this Mortgage,
Beneficiary reserves the right, at its own election, to advance
sufficient funds to perform or maintain such duty or duties. Such
funds, on notice from Beneficiary, shall be immediately paid by Grantor
to Beneficiary, and if not so paid shall bear interest at the Default
Rate from the date of demand for payment to the date of their payment
in full to Beneficiary and shall be secured by this Mortgage.
(iv) Beneficiary may and is hereby authorized and empowered to
foreclose this Mortgage and sell and dispose of the Mortgaged Estate in
accor dance with applicable law, at the place that Beneficiary so
designates; and Beneficiary may thereupon execute and deliver to the
purchaser at said sale a sufficient conveyance of the Mortgaged Estate
in fee simple, which conveyance may contain recitals as to the
happening of the Default upon which the right
15
of foreclosure depends, and said recitals shall be presumptive evidence
that all preliminary acts prerequisite to said sale and deed were in
all things duly complied with; and Beneficiary, its agents,
representatives, successors or assigns, may bid and purchase at such
sale. Grantor hereby constitutes and appoints Beneficiary agent and
attorney-in-fact to make such sale, recitals, and conveyance, and all
of the acts of such attorney-in-fact are hereby ratified. Such recitals
shall be binding and conclusive (except as to existence of an Event of
Default on Grantor's part) upon Grantor, and the conveyance to be made
by Beneficiary (and in the event of a deed in lieu of foreclosure, then
as to such conveyance) shall be effectual to bar all right, title and
interest, equity of redemption (including all statutory redemption),
homestead, dower, curtesy and all other exemptions that Grantor
possesses, in and to the Mortgaged Estate. Grantor does hereby
authorize and empower Beneficiary and each and all of Beneficiary's
successors in this Mortgage, to sell said Mortgaged Estate together or
in lots or parcels, as such Beneficiary shall deem expedient, and to
execute and deliver to the purchaser or purchasers of such Mortgaged
Estate good and sufficient deeds of conveyance thereof by fee simple
title and to re ceive and pay over the proceeds of such sale or sales
to the following payments and in the following order: (A) all expenses
incurred in making such sale or sales; (B) all sums due Beneficiary
hereunder; and (C) to Beneficiary for application in accordance with
the Credit Agreement.
(v) The purchaser under any foreclosure sale hereunder may
disaffirm any easement granted or lease contract made without the
approval of Beneficiary subsequent to the execution of this Mortgage,
and may take immediate possession of the Mortgaged Estate free from,
and despite the terms of, such grant of easement or lease contract. In
the event of a foreclosure of the lien of this Mortgage, any owner in
possession of the Mortgaged Estate shall thereupon become the tenant at
will of the purchaser at such foreclosure sale and should such tenant
or any person claiming possession under or through him refuse to
surrender possession of the Mortgaged Estate upon demand, the purchaser
shall thereupon be entitled to institute and maintain the statutory
action for forcible detainer and procure a writ of possession thereun
der. Beneficiary, or any other holder of the Secured Obligations being
the highest bidder for cash, may purchase at any foreclosure sale or
sales made hereunder.
(vi) Beneficiary may exercise any or all of the remedies of a
secured party available to it under the UCC with respect to the
Mortgaged Estate as set forth in Article II hereof; provided, however,
that Beneficiary may, at its option, dispose of the collateral in
accordance with Beneficiary's rights and remedies in respect of the
Mortgaged Estate pursuant to the provisions of this Mortgage, in lieu
of proceeding under the UCC.
16
(vii) To the extent permitted in the Credit Agreement,
Beneficiary may offset and apply, to any or all of the Secured
Obligations, all monies, credits and other property of any nature
whatsoever, and the proceeds thereof, of Grantor now or at any time
hereafter in the possession of, in transit to or from, under the
custody or control of, or on deposit with, Beneficiary.
Section 3.02 Receiver. In addition to any other rights and powers
conferred herein, Beneficiary shall have the right after the happening of any
Event of Default as hereinabove defined to apply for the appointment of a
receiver of rents and profits of any part or the whole of the Mortgaged Estate
without notice, and Beneficiary shall be entitled, as a matter of right, without
regard to the value of the Mortgaged Estate as security for the amount due or to
the solvency of Grantor or any other party or parties liable for the payment of
such amount, to the appointment of such a receiver of rents and profits with
power to lease the Mortgaged Estate, or such part thereof as may not then be
under lease, and with such other powers as may be deemed necessary, who, after
deducting all proper charges and expenses attending the execution of his trust
as receiver shall apply the residue of the Rents and Profits to the payment and
satisfaction of the Secured Obligations, or to any deficiency which may exist
after applying the proceeds of the sale of the Mortgaged Estate to the payment
of the Secured Obligations, including interest and the costs of any reasonable
attorneys' fees for the foreclosure and sale in such order of priority as
Beneficiary shall elect.
Section 3.03 Waiver of Rights. Neither Grantor nor its successors or
assigns, ever shall have or assert any right, under any statute or rule of law
pertaining to the marshaling of assets, the exemption of homestead, the
administration of estates of decedents, or in any manner whatever, to defeat,
reduce or affect the right of the holder of the Secured Obligations, under the
terms of this Mortgage, to a sale of the Mortgaged Estate for the collection of
the Secured Obligations (without any prior or different resort for collection),
or the right of the holder, under the terms of this Mortgage, to the payment of
the Secured Obligations out of the proceeds of sale of the conveyed Mortgaged
Estate in preference to every other person and claimant whatever (only
reasonable expenses as aforesaid being first deducted); and Grantor, to the
extent that it lawfully may, expressly waives any right now or hereafter
existing to redeem the Mortgaged Estate or any portion thereof so sold.
Section 3.04 Retention of Possession. Notwithstanding the appointment
of any receiver, liquidator or trustee of Grantor, or the then owner of the
Mortgaged Estate, or of any of Grantor's or then owners' other property,
Beneficiary shall be entitled to retain possession and control of the Mortgaged
Estate now or hereafter granted to or held by Beneficiary hereunder.
Section 3.05 Remedies not Exclusive. The cumulative rights of
Beneficiary arising under the clauses and covenants contained in this Mortgage
shall be separate, distinct and cumulative and none of them shall be construed
to be exclusive or an election to proceed under any one provision herein to the
exclusion of any other provision, anything herein or otherwise to the contrary
notwithstanding. In addition to any remedies provided herein for an Event of
Default hereunder, Beneficiary shall have all other remedies allowed under the
17
laws of the State of South Carolina, and the laws of the United States. No
failure on the part of Beneficiary to exercise any of its rights hereunder
arising upon any Default shall be construed to prejudice its rights in the event
of any other or subsequent Default. No delay on the part of Beneficiary in
exercising any of such rights shall be construed to preclude it from the
exercise thereof at any time during the continuance of such Default. Beneficiary
may enforce any one or more remedies or rights hereunder in such order and
manner as it may determine, successively or concurrently at its option. By
accepting payment or partial payment of any sums secured hereby after its due
date, Beneficiary shall not make an accommodation or thereby waive the agreement
herein contained that time is of the essence, nor shall Beneficiary waive either
any of its remedies or options or its right to require prompt payment when due
of all Secured Obligations or to consider failure so to pay a Default hereunder.
Neither the acceptance of this Mortgage nor its enforcement, whether by court
action or pursuant to other powers herein contained, shall prejudice or in any
manner affect Beneficiary's right to realize upon or enforce any other security
now or hereafter held by Beneficiary.
ARTICLE IV
MISCELLANEOUS
Section 4.01 Governing Law. This Mortgage shall be governed by and
construed and enforced in accordance with the law of the State of South Carolina
applicable to contracts made and to be performed in the State of South Carolina
without reference to conflicts of laws principles.
Section 4.02 Waiver of Rights. To the extent permitted by law, Grantor
waives the benefit of all laws now existing or that hereafter may be enacted (a)
providing for any appraisement before sale of any portion of the Mortgaged
Estate, and (b) in any way extending the time for the enforcement of the
collection of the Secured Obligations or creating or extending a period of
redemption from any sale made in collecting the Secured Obligations. To the full
extent Grantor may do so, Grantor agrees that Grantor will not at any time
insist upon, plea, claim or take the benefit or advantage of any law now or
hereafter in force providing for any appraisement, valuation, stay, extension or
redemption, and Grantor, for itself and its successors and assigns, and for any
and all persons ever claiming any interest in the Mortgaged Estate by, through
or under Grantor, to the extent permitted by law, hereby waives and releases all
rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the Secured Obligations and
marshal ling in the event of foreclosure of the liens hereby created. If any law
referred to in this Section and now in force, of which Grantor, Grantor's
successors and assigns or other person might take advantage despite this
Section, shall hereafter be repealed or cease to be in force, such law shall not
thereafter be deemed to preclude the application of this Section. To the extent
permitted by law, Grantor expressly waives and relinquishes any and all rights
and
18
remedies which Grantor may have or be able to assert by reason of the laws of
the State of North Carolina pertaining to the rights and remedies of sureties.
Section 4.03 Notices. Whenever Beneficiary or Grantor shall desire to
give or serve any notice, demand, request or other communication with respect to
this Mortgage, each such notice, demand, request or other communication shall be
in writing and shall be effective only if the same is delivered in the manner
set forth in the Credit Agreement, addressed to the addresses therein set forth.
Any party may at any time change its address for such notices by delivering or
mailing to the other parties hereto, as aforesaid, a notice of such change.
Section 4.04 Captions. The captions or headings at the beginning of
each Section hereof are for the convenience of the parties and are not a part of
this Mortgage.
Section 4.05 Invalidity of Certain Provisions. If the lien of this
Mortgage is invalid or unenforceable as to any part of the Secured Obligations,
or if the lien is invalid or unenforceable as to any part of the Mortgaged
Estate, the unsecured or partially secured portion of the debt shall be
completely paid prior to the payment of the remaining and secured portion of the
Secured Obligations, and all payments made on the debt, whether voluntary or
under foreclosure or other enforcement action or procedure, shall be considered
to have been first paid on and applied to the full payment of that portion of
the Secured Obligations which is not secured or fully secured by the lien of
this Mortgage.
Section 4.06 Subrogation. To the extent that proceeds of the Secured
Obligations are used to pay any outstanding lien, charge or prior encumbrance
against the Mortgaged Estate and such proceeds or advances have been or will be
advanced by Beneficiary, Beneficiary shall be subrogated to any and all rights
and liens held by any owner or holder of such outstanding liens, charges and
prior encumbrances, irrespective of whether said liens, charges or encumbrances
are released of record.
IN WITNESS WHEREOF, Grantor has caused this Mortgage to be executed
under seal on its behalf by its duly authorized officers as of the day and year
first above written.
Texfi Industries, Inc.
By:
Witness Name:
Title:
Witness
[CORPORATE SEAL]
ATTEST:
Secretary
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
PERSONALLY appeared before me the undersigned witness, who upon oath
states that (s)he saw the within named Texfi Industries, Inc., by and through
its above signed officer, sign, seal and as its act and deed deliver the within
written Mortgage and Security Agreement, for the uses and purposes therein
mentioned, and that (s)he with the other witness whose signature appears above
witnessed the due execution thereof.
SWORN TO before me this 14th )
day of March, 1996. )
)
)
) Witness
Notary Public )
My Commission Expires:
October 4, 2000
