Exhibit T3C-5
AK DRAFT 1/27/04
MORTGAGE
by and from
REPTRON ELECTRONICS, INC.
to
HSBC BANK USA
as Trustee
Dated as of ____________ ___, 2004
Location: 1746 X'Xxxxxx
Municipality: Gaylord
Tax Code No. 103-150-000-012-00 & 103-150-000-019-00
County: Otsego County
State: Michigan
THIS MORTGAGE CONTAINS A POWER OF SALE
THIS MORTGAGE SECURES FUTURE ADVANCES AND IS INTENDED TO BE A FUTURE ADVANCE
MORTGAGE, AS BOTH OF THOSE PHRASES ARE DEFINED IN 1990 MICH. PUB. ACTS 348, AS
AMENDED
THE SECURED PARTY (MORTGAGEE) DESIRES THIS MORTGAGE TO ALSO SERVE AS A FIXTURE
FILING TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE DESCRIBED
HEREIN.
Mortgagor's Federal Employer Identification Number is 32-208116
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED RETURN TO:
Xxxxxxx Xxxxx LLP
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: [ ], Esq.
MORTGAGE
This MORTGAGE ("Mortgage") executed this ________ of _______________,
2004, by and between REPTRON ELECTRONICS, INC., a Florida corporation (being
hereinafter called "Mortgagor"), having its principal place of business at 00000
XxXxxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000-0000, and HSBC BANK USA, a New York
banking
corporation, as Trustee under that certain Indenture (as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated,
substituted for or replaced, the "Indenture"), dated as of [ ], 2004 (being
hereinafter called "Mortgagee"), with offices at [ ], New York, New York [ ].
W I T N E S S E T H:
WHEREAS, Mortgagor is the owner of certain fee simple interests in real
property and the buildings and improvements thereon, together with related
rights as further described herein; and
WHEREAS, Mortgagor commenced a case under Chapter 11 of the U.S.
Bankruptcy Code (the "Chapter 11 Case") in the United States Bankruptcy Court
for the Southern District of Florida, West Palm Beach Division (the "Bankruptcy
Court") and continued to operate its business and manage its properties as
debtor and debtor-in-possession pursuant to Bankruptcy Code Sections 1107(a) and
1108; and
WHEREAS, the Second Amended Plan of Reorganization filed by Mortgagor
in the Chapter 11 Case (the "Chapter 11 Plan") has been confirmed by the
Bankruptcy Court pursuant to the Confirmation Order entered by the Bankruptcy
Court and, as of the Effective Date of the Chapter 11 Plan (as such term is
defined in the Chapter 11 Plan) and pursuant to the terms thereof, all assets
and property of Mortgagor (including without limitation, the Mortgaged Property,
as such term is defined below) has become the property of and has vested in
Mortgagor, as reorganized pursuant to the Chapter 11 Plan;
WHEREAS, pursuant to the terms of the Chapter 11 Plan Mortgagor is
entering into certain financing arrangements with certain Note holders under the
Indenture pursuant to which such Note holders may make loans and advances and
provide other financial accommodations to Mortgagor as set forth in the
Indenture, by and among Mortgagor, the Note holders and Mortgagee and the other
Financing Agreements (as hereinafter defined); and
WHEREAS, Mortgagor, by this Mortgage, intends to secure and does hereby
secure all indebtedness and other obligations of Mortgagor to Note holders and
Mortgagee as hereinafter further described, including (a) all existing and
future indebtedness, liabilities and obligations of Mortgagor to Note holders,
up to
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the aggregate principal amount of THIRTY MILLION DOLLARS ($30,000,000) at
any time and from time to time outstanding, and (b) all other existing and
future indebtedness, obligations and liabilities of Mortgagor to Note holders
and Mortgagee, including, without limitation, all interest on such principal
sum, costs, expenses and attorneys' fees and legal expenses accruing or incurred
in connection therewith, as hereinafter further described.
NOW, THIS INDENTURE WITNESSETH, that the foregoing recitals being
hereinafter deemed incorporated by reference and made a part hereof as if again
set forth at length, Mortgagor, in consideration of the Financing Agreements (as
hereinafter defined) and the extension of credit pursuant thereto, and to secure
the Obligations (as hereinafter defined) and in consideration of the further sum
of One ($1.00) Dollar unto Mortgagor in hand well and truly paid by Note holders
at or before the sealing and delivery hereof, the receipt whereof is hereby
acknowledged, and intending to be legally and firmly bound hereby, has
mortgaged, warranted, granted, bargained, assigned, sold, alienated, released,
conveyed and confirmed, and by these presents does mortgage, warrant, grant,
bargain, assign, sell, alien, release, convey and confirm unto Mortgagee and its
successors and assigns, for the benefit of Note holders and their successors and
assigns, all of Mortgagor's right, title and interest in and to the following
property, rights and interests and the proceeds thereof (hereinafter
collectively referred to as the "Mortgaged Property"):
A. THE LAND. The land (the "Land") described in Exhibit A attached
hereto and incorporated herein by reference.
B. THE IMPROVEMENTS: TOGETHER WITH (i) all the buildings, structures
and improvements of every nature whatsoever now or hereafter situated on the
Land, and (ii) all fixtures, machinery, appliances, equipment, furniture and
personal property of every nature whatsoever now or hereafter owned by Mortgagor
and located in or on, or attached to, and used or intended to be used in
connection with, or with the operation of, the Land, buildings, structures or
other improvements, or in connection with any construction being conducted or
which may be conducted thereon, and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to any of the foregoing,
and all of the right, title and interest of Mortgagor in and to any such
personal property or fixtures, which, to the fullest extent permitted by law,
shall be conclusively deemed fixtures and a part of the real property encumbered
hereby (hereinafter called the "Improvements").
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C. EASEMENTS: TOGETHER WITH all easements, rights-of-way, gores of
land, streets, ways, alleys, passages, sewer rights, water courses, water rights
and powers, permits and consents, division rights (if any), and all
appurtenances whatsoever, in any way belonging, relating or appertaining to any
of the property described in Paragraphs A and B hereof, or which hereafter shall
in any way belong, relate or be appurtenant thereto, whether now owned or
hereafter acquired by Mortgagor.
D. TOGETHER WITH (1) all of the estate, right, title and interest of
Mortgagor of, in and to all judgments, insurance proceeds, awards of damages and
settlements hereafter made resulting from condemnation proceedings or the taking
of the property described in Paragraphs A, B and C hereof or any part thereof
under the power of eminent domain, or for any damage (whether caused by such
taking or otherwise) to the property described in Paragraphs A, B and C hereof
or any part thereof, or to any rights appurtenant thereto, and all proceeds of
any sale or other disposition of the property described in Paragraphs A, B and C
hereof or any part thereof; and Mortgagee is hereby authorized to collect and
receive said awards and proceeds and to give proper receipts and acquittances
therefor, and (if it so elects) to apply the same toward the payment of the
Obligations, notwithstanding the fact that the amount owing thereon may not then
be due and payable; and (2) all contract rights, general intangibles, actions
and rights in action, including without limitation all rights to insurance
proceeds and unearned premiums arising from or relating to the property
described in Paragraphs A, B and C above; and (3) all proceeds, products,
replacements, additions, substitutions, renewals and accessions of and to the
property described in Paragraphs A, B and C.
E. TOGETHER WITH all rents, income and other benefits to which
Mortgagor may now or hereafter be entitled from the property described in
Paragraphs A, B and C hereof (the "Rents") to be applied against the
Obligations; provided, however, that permission is hereby given to Mortgagor, so
long as no Event of Default (as hereinafter defined) has occurred, to collect
and use such Rents as they become due and payable, but not more than one month
in advance thereof. Upon the occurrence of any such Event of Default, the
permission hereby given to Mortgagor to collect such Rents from the property
described in Paragraphs A, B and C hereof shall terminate and such permission
shall not be reinstated upon a cure of such Event of Default without Mortgagee's
specific written consent.
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The foregoing provisions hereof shall constitute an absolute and
present assignment of the Rents from the property described in A, B and C above,
subject, however, to the conditional permission given to Mortgagor to collect
and use such Rents as hereinabove provided; and the existence or exercise of
such right of Mortgagor shall not operate to subordinate this assignment to any
subsequent assignment, in whole or in part, by Mortgagor, and any such
subsequent assignment by Mortgagor shall be subject to the rights of the
Mortgagee hereunder.
F. TOGETHER WITH all right, title and interest of Mortgagor in and to
any and all leases now or hereafter on or affecting the property described in
Paragraphs A, B and C hereof (the "Leases"), together with all security therefor
and all monies payable thereunder, and all books and records which contain
payments made under the leases and all security therefor, subject, however, to
the conditional permission hereinabove given to Mortgagor to collect the Rents
arising under any such lease. Mortgagee shall have the right, at any time and
from time to time, to notify any lessee of the rights of Mortgagee as provided
by this Paragraph.
G. TOGETHER WITH (1) Mortgagor's rights to further encumber the
property described in Paragraphs A, B and C above for debt, and (2) all of
Mortgagor's rights to enter into any lease or lease agreement.
TO HAVE AND TO HOLD the Mortgaged Property and all parts thereof unto
Mortgagee and Note holders, their successors and assigns, to and for the proper
use and benefit of Mortgagee and Note holders, their successors and assigns,
forever.
This Mortgage is executed and delivered by Mortgagor to secure all of
the loans, advances, obligations, liabilities and indebtedness now or hereafter
owing by Mortgagor to Note holders arising under or in connection with the
Indenture or the other Financing Agreements, or by operation of law in
connection therewith, whether direct or indirect, absolute or contingent, joint
or several, secured or unsecured, due or not due, primary or secondary,
liquidated or unliquidated, whether arising before, during or after the initial
or any renewal term of the Indenture, or after the commencement of any case with
respect to the Mortgagor under the United States Bankruptcy Code or any similar
statute and whether incurred by Mortgagor as principal, surety, endorser,
guarantor or otherwise in connection with the foregoing, including, without
limitation, the following (collectively referred to herein as the
"Obligations"):
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(a) all obligations, liabilities and indebtedness of Mortgagor incurred
in connection with the Indenture under the Indenture; and
(b) all other obligations, liabilities and indebtedness of every kind
and character now or hereafter owing by Mortgagor to Mortgagee and Note holders,
however created, incurred or evidenced, direct or indirect, absolute or
contingent and whether arising under the Indenture, this Mortgage or any of the
other Financing Agreements; and
(c) all interest, costs and expenses (including reasonable attorneys'
fees and expenses), other charges and fees to be paid by Mortgagor herein and in
the other Financing Agreements, advances made by Mortgagee or Note holders to
protect or preserve the Mortgaged Property, any part thereof, or the interests
of Mortgagee and Note holders therein or for payment of taxes, assessments,
insurance premiums and other amounts as provided therein and herein;
provided, however, that the maximum principal amount of the Obligations at any
time secured hereby shall be the principal sum of THIRTY FIVE MILLION DOLLARS
($30,000,000) at any time and from time to time outstanding, plus all interest
under the Financing Agreements, costs and expenses (including reasonable
attorneys' fees and legal expenses), other charges and fees to be paid herein
and in the other Financing Agreements, advances made by Mortgagee or Note
holders to protect or preserve the Mortgaged Property, any part thereof, or the
interests of Mortgagee and Note holders therein or for payment of taxes,
assessments, insurance premiums and other amounts as provided therein and
herein. In no event shall the limitation on the principal amount of Obligations
secured hereby limit or impair the security interests and liens of Mortgagee in
property of Mortgagor as provided under the other Financing Agreements.
THIS INSTRUMENT IS INTENDED TO BE A FUTURE ADVANCE MORTGAGE, AS SUCH
TERM IS DEFINED IN ACT 348 OF THE PUBLIC ACTS OF MICHIGAN OF 1990, AS AMENDED.
The Indenture, together with all agreements, documents and instruments
referred to therein or at any time executed and/or delivered in connection
therewith, including, but not limited to, this Mortgage, as the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced, are collectively referred to herein as the "Financing Agreements".
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ARTICLE ONE
COVENANTS OF MORTGAGOR
Mortgagor covenants and agrees with Mortgagee, or any successor in
title as holder of the Obligations secured hereby, as follows:
1.1 Payment and Performance. Mortgagor shall perform and observe and
shall comply with all provisions of the Financing Agreements and shall promptly
pay to Note holders all Obligations required to be paid by Mortgagor under the
Financing Agreements when payment shall become due.
1.2 Status of Title. Mortgagor represents, warrants and covenants that
(a) Mortgagor is and at all times shall continue to be lawfully seized of an
indefeasible estate in fee simple in the Land and the buildings and improvements
thereon, and has good and absolute title to the Mortgaged Property, and has good
right, full power and lawful authority to convey, assign, mortgage or encumber
the Mortgaged Property as provided herein and Mortgagee may at all times
peaceably and quietly enter upon, hold, occupy and enjoy the Mortgaged Property
in accordance with and subject to the terms hereof; (b) the Mortgaged Property
is and at all times shall continue to be free and clear of all liens, security
interests, and encumbrances whatsoever except those liens, security interests
and encumbrances described in Exhibit B annexed hereto (the "Permitted
Encumbrances"); (c) Mortgagor will maintain and preserve the lien of this
Mortgage as a third-priority lien, subject only to the Permitted Encumbrances
and Mortgagee shall, subject to Mortgagor's right of possession prior to an
Event of Default, quietly enjoy and possess the Mortgaged Property, until the
Obligations have been indefeasibly paid in full; (d) this Mortgage is and at all
times shall continue to be a valid and binding obligation enforceable in
accordance with the terms contained herein, and the execution and delivery
hereof does not contravene any contract or agreement to which Mortgagor is a
party or by which Mortgagor or any of its properties may be bound and does not
contravene any law, order, decree, rule or regulation to which Mortgagor is
subject; and (e) the Land has not been subdivided and is a "parent parcel," but
not a "parent tract," within the meaning of MCLA Section 560.102, as amended
from time to time. Mortgagor has not conveyed any of its division rights with
respect to the Land, and the Land consists of separate parcels from all other
property for purposes of property tax assessments.
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1.3 Compliance with Laws. Mortgagor covenants and warrants that the
Mortgaged Property presently complies in all respects with and shall continue to
comply in all respects with all applicable restrictive covenants, applicable
zoning and subdivision ordinances and building codes, all applicable health and
Environmental Laws (as hereinafter defined) and regulations and other applicable
laws, rules and regulations. If Mortgagor receives notice from any federal,
state or other governmental body that it is not in compliance with any such
covenant, ordinance, code, law or regulation, Mortgagor will provide Mortgagee
with a copy of such notice promptly.
1.4 Taxes and Other Charges.
(a) Mortgagor shall pay, or cause to be paid, at least five (5)
business days prior to the time any interest or penalty may be imposed due to
late payment, all taxes, assessments, water rates, sewer rentals, dues, charges,
fees, levies, fines, impositions, liabilities, obligations and encumbrances and
other charges of every nature and to whomever assessed that may now or hereafter
be levied or assessed upon the Mortgaged Property or any part thereof, or upon
Mortgagor's interest in the Rents thereof, or upon this Mortgage or the
Obligations or upon or against the interest of Mortgagee in the Mortgaged
Property, whether any or all of such items be levied directly or indirectly, as
well as income taxes, assessments and other governmental charges levied and
imposed by the United States of America or any state, county, municipality or
other taxing authority upon or against Mortgagor or in respect of the Mortgaged
Property (all of the foregoing herein referenced to as "Taxes" or individually
as a "Tax") and Mortgagor shall deliver to Mortgagee, at least five (5) days
before such payments would become delinquent, receipted bills evidencing payment
therefor. Notwithstanding anything to the contrary contained herein, Mortgagor
shall have the right, at its own expense and after prior written notice to
Mortgagee, by appropriate proceedings duly instituted and diligently prosecuted,
to contest in good faith the validity or amount of any such Taxes in the manner
provided by law, in which event, Mortgagor shall:
(i) pay in full, under protest in the manner provided by law, any
Tax that Mortgagor may desire to contest, or
(ii) withhold the payment thereof, if contest of any Tax may be made
without the payment thereof, provided, however, that:
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(A) such contest may be pursued at all times
without Mortgagor risking the sale or
forfeiture of the Mortgaged Property or any
part thereof, or any interest therein, to
satisfy such Tax;
(B) Mortgagor has, not less than five (5) days
prior to the date the amount of such Tax
shall be increased by reason of interest,
penalties or costs, notified Mortgagee in
writing of the intention of Mortgagor to
contest the same;
(C) Mortgagor shall have furnished Mortgagee
from time to time as Mortgagee may request
such security or bond or indemnification
satisfactory to Mortgagee for the final
payment and discharge thereof and an
additional sum to cover possible interest,
costs and penalties; and
(D) in the event of a ruling or adjudication
adverse to Mortgagor, Mortgagor shall
promptly pay such Tax, plus any interest,
penalty or additional charge thereon; and
(iii) all costs and expenses incidental to any such contest shall be
paid by Mortgagor.
(b) Notwithstanding anything to the contrary, in order to more fully
protect the security afforded hereby, Mortgagor, upon request of Mortgagee,
shall, at Mortgagee's request and upon the occurrence of an Event of Default,
pay to Mortgagee on the first day of each month (or, at its option, Mortgagee
may charge on the first day of each month any account of Mortgagor maintained
with Mortgagee) together with, and in addition to all other sums from time to
time payable on the Obligations, until the Obligations at any time secured
hereby shall have been fully paid, a sum equal to one-twelfth (1/12) of the
annual taxes, municipal water rates, sewer rents and assessments, if any, levied
or to be levied against the Mortgaged Property and of the fire and other hazard
insurance premiums next becoming due (all hereinafter referred to as the
"Charges") all as estimated by Mortgagee, so that Mortgagee shall have
sufficient funds to pay the Charges on the first day of the month preceding the
month in which they become due. If, from time to time, Mortgagee shall determine
that the balance of the funds held by it or on its behalf to pay the Charges is
or will be
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insufficient to pay any of the Charges when the same shall become due, Mortgagor
shall pay to Mortgagee, on demand, any amount necessary to remedy any
deficiency. Mortgagee shall hold all amounts to pay the Charges before same
become delinquent, with the right, however, of Mortgagee to apply, after
default, any sum so received as hereinafter provided. If there is a default
under any of the provisions of this Mortgage resulting in a public sale of any
of the Land covered hereby, or if Mortgagee acquires any of the Land otherwise
after default, Mortgagee shall have the right to apply the balance then
remaining in the funds accumulated to pay the Charges, either as a credit
against the balance of the Obligations then remaining unpaid or to the payment
of any of the Charges without any obligation to account therefor to Mortgagor.
The funds held by Mortgagee under this Paragraph may be commingled with the
general funds of Mortgagee who shall not be liable for interest thereon.
Mortgagee, in its discretion, may at any time terminate, or thereafter
reinstate, any requirement for such payments. Nothing contained in this
Paragraph shall be deemed to limit Mortgagee's right under the Indenture to
establish, at any time while the Obligations remain outstanding, a reserve to
pay the Charges against loans otherwise available to Mortgagor, it being
understood and agreed by Mortgagor that the right of Mortgagee to establish an
escrow under this Paragraph shall be an alternative to and not in lieu of
Mortgagee's right to establish such a reserve.
(c) In the event of passage of any state, federal, municipal or
other governmental law, order, rule or regulation, subsequent to the date
hereof, in any manner changing or modifying the laws now in effect governing the
taxation of mortgages or debts secured by mortgages, or the manner of collecting
taxes so as to adversely affect Mortgagee, then, unless Mortgagor is able to
take such action as is necessary to insure, to Mortgagee's satisfaction, that
its security in the Mortgaged Property is not adversely affected by any such
legislative change within ten (10) days after written notice of such change by
Mortgagee, the entire balance of the Obligations including all interest accrued
thereon shall without further notice become due and payable forthwith at the
option of Mortgagee.
(d) Mortgagor shall not claim, demand or be entitled to receive any
credit, against the principal or interest payable on the Obligations for so much
of the taxes, assessments or similar impositions assessed against the Mortgaged
Property or any part thereof or that are applicable to the Obligations or to the
interest in the Mortgaged Property of Mortgagee. No deduction shall be claimed
from the taxable value of the Mortgaged Property
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or any part thereof by reason of the Obligations, this Mortgage or any other
instrument securing the Obligations.
1.5 Mechanics' and Other Liens. Mortgagor shall not permit any
mechanics' or other liens to be filed or to exist against the Mortgaged Property
by reason of work, labor, services or materials supplied or claimed to have been
supplied to, for or in connection with the Mortgaged Property or to Mortgagor or
anyone holding the Mortgaged Property or any part thereof through or under
Mortgagor; provided, however, that if any such lien shall at any time be filed,
Mortgagor shall, within ten (10) days after notice of the filing thereof but
subject to the right of contest as set forth herein, cause the same to be
discharged of record by payment, deposit, bond, order of a court of competent
jurisdiction or otherwise. Notwithstanding anything to the contrary contained
herein, Mortgagor shall have the right, at its own expense and after prior
written notice to Mortgagee, by appropriate proceedings duly instituted and
diligently prosecuted, to contest in good faith the validity, applicability or
amount of any such lien if Mortgagor establishes an escrow or other security
acceptable to Mortgagee (or, at its option, Mortgagee may establish a reserve
against loans otherwise available to Mortgagor or its affiliates) in an amount
estimated by Mortgagee to be adequate to cover the payment of the amount being
contested with interest, costs and penalties and an additional sum to cover
possible interest, costs and penalties; and, if the amount of such escrow or
other security (or reserve) is insufficient to pay any amount adjudged by a
court of competent jurisdiction to be due, with all interest, costs and
penalties thereon, Mortgagor shall pay such deficiency no later than the date
such judgment becomes final.
1.6 Insurance.
(a) Mortgagor shall, at its expense, obtain for, deliver to, assign
and maintain for the benefit of Mortgagee as an additional insured, during the
life of this Mortgage, insurance policies in such amounts as Mortgagee may
reasonably require, upon and relating to the Mortgaged Property against personal
injury and death, loss or damage by fire, vandalism and theft and such other
insurable hazards, casualties and contingencies (including, without limitation,
loss of rentals and business interruption), as are normally and usually covered
by extended coverage, all risk policies in effect where the Mortgaged Property
is located and such other risks as Mortgagee may specify from time to time and
including flood insurance in the amount of the maximum available coverage, if
the Mortgaged Property or any part thereof is in an area designated by the
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Department of Housing and Urban Development, the Federal Insurance
Administration or other governmental agency, as subject to special flood risks,
whether pursuant to the Flood Disaster Protection Act of 1973, any successor
statute or otherwise. Mortgagor shall pay promptly when due any premiums on such
insurance policies and on any renewals thereof. The form of such policies and
the companies issuing them shall be reasonably acceptable to Mortgagee. The
insurance required herein may be included in blanket policies maintained by
Mortgagor. All such policies and renewals thereof shall be held by Mortgagee and
shall contain a non-contributory standard mortgagee's endorsement making losses
payable to Mortgagee as its interests may appear. Not less than thirty (30) days
prior to the expiration date of the insurance policies required to be maintained
by Mortgagor, Mortgagor shall deliver to Mortgagee one or more certificates of
insurance evidencing renewal of the insurance coverage required hereunder plus
such other evidence of payment of premiums therefor as Mortgagee may request. In
the event of loss, Mortgagor will give immediate written notice to Mortgagee and
Mortgagee may make proof of loss if not made promptly by Mortgagor. In the event
of the foreclosure of this Mortgage or any other transfer of title to the
Mortgaged Property in extinguishment of the Secured Obligations, all right,
title and interest of Mortgagor in and to all insurance policies and renewals
thereof then in force shall pass to the purchaser or grantee. All such policies
shall provide that (i) they shall not be subject to cancellation or modification
without at least thirty (30) days prior written notice to Mortgagee, (ii) they
shall not be invalidated as to Mortgagee by any act or neglect of the Mortgagor
or other insured and (iii) the insurance carrier waives subrogation, if such
waiver of subrogation can be obtained at rates which are determined by Mortgagee
to be commercially reasonable.
(b) Pursuant to its rights granted hereunder in all proceeds from
any insurance policies, Mortgagee is hereby authorized and empowered (but not
obligated) at its option to act as attorney-in-fact for Mortgagor in adjusting,
settling or compromising any loss under any insurance policies on the Mortgaged
Property and to collect and receive the proceeds from any such policies. Each
insurance company is hereby authorized and directed to make payment for all such
losses directly to Mortgagee alone and not to Mortgagor and Mortgagee jointly.
After deducting from such insurance proceeds any expenses incurred by Mortgagee
in the collection or handling of such funds, Mortgagee may apply the net
proceeds, at its option, either as a credit on any portion of the Obligations
whether then matured or to mature in the future, or at the sole option of
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Mortgagee such sums either wholly or in part may be paid over to Mortgagor to be
used to repair such improvements or to build new improvements in their place or
for any other purpose or object satisfactory to Mortgagee, without affecting the
lien of this Mortgage for the full amount secured hereby before such payment
took place except that notwithstanding anything to the contrary contained
herein, if any portion of the Mortgaged Property is lost, physically damaged or
destroyed, upon the written request of Mortgagor, Mortgagee shall hold the net
cash proceeds from insurance received by Mortgagee pursuant to this Section 6(b)
as a result of such loss, damage or destruction as cash collateral and release
such cash collateral to Mortgagor to the extent necessary for the repair,
refurbishing or replacement of such Mortgaged Property, provided, that, all of
the following conditions are satisfied: (i) no Event of Default shall exist or
have occurred and be continuing,(ii) the amount of the insurance proceeds
(together with any cash or Cash Equivalents of Mortgagor then available to it
for such purpose and any Loans, as such term is defined in the Indenture
available to Mortgagor, after taking into consideration the other obligations,
liabilities and indebtedness of Mortgagor are sufficient, in Mortgagee's
reasonable determination, to effect such repair, refurbishing or replacement in
a satisfactory manner and as required hereunder, (iii) such proceeds shall be
used first to repair, refurbish or replace the Mortgaged Property (free and
clear of any security interests, liens, claims or encumbrances, except as
permitted hereunder), (iv) the insurance carrier shall have waived any right of
subrogation against Mortgagor under its policy, (v) the casualty resulted in a
payment of $750,000 in insurance proceeds or less, (vi) such repair,
refurbishing or replacement shall be commenced as soon as reasonably practicable
and shall be diligently pursued to satisfactory completion, (vii) the proceeds
shall be disbursed from such cash collateral, from time to time as needed
and/or, at Mortgagee's option, released by Mortgagee directly to the contractor,
subcontractor, materialmen, laborers, engineers, architects and other persons
rendering services or materials to repair, refurbish or replace the Mortgaged
Property so lost, damaged or destroyed, (viii) such repair, refurbishing or
replacement can, in the good faith estimate of Mortgagee (based on such
estimates of the contractor or others with appropriate expertise in the
determination of Mortgagee), be completed prior to the end of the then current
term of the Indenture, and (ix) the repair, refurbishing or replacement to which
the proceeds are applied shall cause the Mortgaged Property to be of at least
equal value and substantially the same character as prior to such loss, damage
or destruction. Upon completion of the work and payment in full therefor as
provided above, or upon the failure to commence within a reasonable time,
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or diligently to continue the work, Mortgagee may, either apply the amount of
any such proceeds then or thereafter in the possession of Mortgagee to the
payment of the Obligations or hold such proceeds as cash collateral for the
Obligations on terms and conditions reasonably acceptable to Mortgagee and not
release such funds to Mortgagor, provided, that, nothing contained herein shall
limit the right of Mortgagee to apply any or all of such proceeds to the
Obligations at any time an Event of Default shall exist or have occurred and be
continuing or at any time with respect to the establishment of any Availability
Reserves. Mortgagee shall not be responsible for any failure to collect any
insurance proceeds due under the terms of any policy regardless of the cause of
such failure.
(c) If Mortgagor does not provide Mortgagee with evidence of the
insurance coverage required by this Mortgage or fails to make the payments that
may be requested pursuant to Paragraph 1.6(c) hereof, or if Mortgagor fails,
after request by Mortgagee, to make the payments described in Paragraph 1.6(c)
hereof, Mortgagee may purchase insurance at Mortgagor's expense to protect
Mortgagee's interest in the Mortgaged Property. This insurance may, but need
not, protect Mortgagor's interest. The coverage that Mortgagee purchases may not
pay any claim that Mortgagor may make or any claim that is made against
Mortgagee in connection with the Mortgaged Property. Mortgagor may later cancel
any insurance purchased by Mortgagee, but only after providing Mortgagee with
evidence that Mortgagor has obtained insurance as required by this Mortgage. If
Mortgagee purchases insurance for the Mortgaged Property, Mortgagor will be
responsible for the costs of such insurance, including interest and any other
charges that may be imposed in connection with the placement of such insurance,
until the effective date of the cancellation or expiration of such insurance.
Without limitation of any other provision of this Mortgage, the cost of such
insurance shall be added to the Obligations. The cost of such insurance may be
more than the cost of insurance Mortgagor may be able to obtain on its own.
1.7 Eminent Domain. Mortgagor, immediately upon obtaining knowledge of
the institution of any eminent domain or other proceedings for the condemnation
of the Mortgaged Property, or any portion thereof, shall notify Mortgagee of the
pendency of such proceedings. Mortgagee shall be entitled to all compensation
awards, damages, claims, rights of action and proceeds of, or on account of, any
damage or taking through eminent domain or other condemnation proceedings and is
hereby authorized, at its option, to commence, appear in and prosecute in its
own or Mortgagor's name any action or proceeding relating
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to eminent domain or condemnation and to settle or compromise any claim in
connection therewith. All such compensation awards, damages, claims, rights of
action and proceeds, and any other payments or relief, and the right thereto,
are included in the Mortgaged Property and Mortgagee, after deducting therefrom
all its expenses including attorneys' fees and expenses, may release any monies
received by it to Mortgagor without affecting the lien of this Mortgage or may
apply the same, in such manner as Mortgagee shall determine, to the reduction of
the Obligations. Subject to applicable law, any balance of such monies then
remaining shall be paid to Mortgagor. Mortgagor agrees to execute such further
assignments of any compensation awards, damages, claims, rights of action and
proceeds as Mortgagee may require. Notwithstanding any such condemnation,
Mortgagor shall continue to pay interest on the entire unpaid principal amount
of the Obligations. If prior to the receipt by Mortgagee of such award or
payment the Mortgaged Property shall have been sold on foreclosure of this
Mortgage, Mortgagee shall have the right to receive said award or payment to the
extent of any deficiency found to be due upon such sale, with legal interest
thereon, whether or not a deficiency judgment on this Mortgage shall have been
sought or recovered or denied, and reasonable attorneys' fees, costs and
disbursements incurred by Mortgagee in connection with the collection of such
award or payment.
1.8 Care of Mortgaged Property.
(a) Mortgagor shall preserve and maintain, or cause to be preserved
and maintained, the Mortgaged Property including all appurtenances thereto in
good and substantial repair and condition and in compliance with the
requirements, if any, of the Permitted Encumbrances, at its own cost, and will
from time to time make, or cause to be made, all repairs, replacements, renewals
and payments necessary to continue to maintain the Mortgaged Property in such
state of repair, condition and compliance. Mortgagor shall not permit, commit or
suffer any waste, impairment or deterioration of the Mortgaged Property or of
any part thereof, and will not take any action which will increase the risk of
fire or other hazard to the Mortgaged Property or to any part thereof.
(b) Except as otherwise provided in this Mortgage or as contemplated
by the other Financing Agreements, no part of the Mortgaged Property shall be
removed, demolished or altered, without the prior written consent of Mortgagee.
Mortgagor shall have the right, without such consent, but only to the extent
permitted under, and in compliance with, the Indenture, to remove and dispose of
free from the lien of this Mortgage any part of
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the Mortgaged Property consisting of equipment and fixtures as from time to time
may become worn out or obsolete; provided that, either simultaneously with or
prior to such removal, any such property shall be replaced with other property
of equal utility (prior to such Mortgaged Property becoming worn out or
obsolete) and free from any security interest of any other person. Any
substituted property shall be deemed to be part of the Mortgaged Property and
shall be subject to the lien of this Mortgage.
(c) Mortgagee may enter upon and inspect the Mortgaged Property,
prior to an Event of Default during reasonable times upon prior notice, and
after the occurrence of an Event of Default or in the case of emergency, at any
time during the life of this Mortgage.
(d) If any material part of the Mortgaged Property shall be lost,
damaged or destroyed by fire or any other cause, Mortgagor shall give immediate
written notice thereof to Mortgagee and, if Mortgagee has, pursuant to Section
1.6(b), exercised its option to pay over to Mortgagor the proceeds of any
insurance to be used to restore the damaged Mortgaged Property, Mortgagor shall
promptly restore the Mortgaged Property to the equivalent of its original
condition. If a part of the Mortgaged Property shall be lost, physically
damaged, or destroyed through condemnation and provided Mortgagee has exercised
its option set forth in Section 1.7 hereof to pay over to Mortgagor the proceeds
of any condemnation awards to be used to restore, repair or alter the remaining
property, Mortgagor shall promptly restore, repair or alter the remaining
property in a manner satisfactory to Mortgagee.
1.9 Rents and Leases. (a) Subject to the terms of this Article,
Mortgagee waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents thereon, and grants Mortgagor the right to collect the
Rents. Mortgagor shall hold the Rents, or an amount sufficient to discharge all
current sums due on the Obligations, in trust for use in the payment of the
Obligations. The right of Mortgagor to collect the Rents may be revoked by
Mortgagee upon the occurrence of any Event of Default by Mortgagor under the
terms of this Mortgage by giving notice of such revocation to Mortgagor.
Following such notice, Mortgagee may retain and apply the Rents toward payment
of the Obligations in such priority and proportions as Mortgagee, in its
discretion, shall deem proper.
(b) Mortgagor shall not, without the prior written consent of
Mortgagee, make or suffer to be made, any Leases or amend, cancel, modify,
accept the surrender of, subordinate,
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accelerate the payment of rents to, or change the terms of any renewal option of
any Leases or accept prepayments of installments of Rent for a period of more
than one (1) month in advance (except that Mortgagor may accept security
deposits in respect of the Leases in excess of such amount) or further assign
the whole or any part of the Rents or permit or suffer an assignment or sublease
without the consent of Mortgagee. In respect of any Lease relating to the
Mortgaged Property, Mortgagor will (i) fulfill or perform each and every
provision thereof on its part to be fulfilled or performed; (ii) promptly send
copies of all notices of default which it shall send or receive thereunder to
Mortgagee, and (iii) enforce, short of termination thereof, the performance or
observance of the provisions thereof.
(c) In addition to the rights which Mortgagee may have herein, in
the event of the occurrence of any Event of Default under this Mortgage,
Mortgagee, at its option, may require Mortgagor to pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property occupied by Mortgagor. Upon default in any such payment, Mortgagor will
vacate and surrender possession of the Mortgaged Property to Mortgagee or to
such receiver and, in default thereof, Mortgagor may be evicted by summary
proceedings or otherwise.
(d) Mortgagee, or a receiver, while in possession of the Mortgaged
Property shall have the right to manage same, to pay commissions for the
collection of rents, to retain five (5%) percent of the Rents in payment for the
services of Mortgagee in relation to the Mortgaged Property, to make, cancel,
enforce or modify Leases, to obtain and evict tenants, to fix or modify rents,
to demolish any part or all of the Mortgaged Property which in the judgment of
Mortgagee may be in an unsafe condition and dangerous to life and property, and
to make repairs and improvements to the Mortgaged Property all as shall be, in
Mortgagee's or receiver's discretion, necessary or convenient to protect
Mortgagee's interests hereunder. Mortgagee may advance monies to the receiver
for such purposes and any monies so expended or advanced shall be added to the
Obligations and secured by this Mortgage. Mortgagee, at its option, may repay
such monies out of the rents actually collected. Mortgagee or receiver shall
have the right to collect both the Rents which may have accrued before the
occurrence of an Event of Default hereunder or from the time Mortgagee or
receiver takes possession, but are unpaid at the time of such default or taking
of possession, and the Rents which may accrue after such default or taking of
possession. Mortgagee, or receiver, while in
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possession of the Mortgaged Property, shall only be liable to account for Rents
actually received.
(e) The taking of possession and collection of Rents by Mortgagee as
aforesaid shall not be construed to be an affirmation of any Lease of the
Mortgaged Property or any part thereof, and Mortgagee or any other purchaser at
any foreclosure sale may (if otherwise entitled to do so) exercise the right to
terminate any Lease as though such taking of possession and collection of Rents
had not occurred.
(f) To the extent granted herein, Mortgagor shall, from time to time
upon the request of Mortgagee, specifically assign to Mortgagee, as additional
security hereunder, by an instrument in writing in such form as may be approved
by Mortgagee, all right, title and interest of Mortgagor in and to any and all
Leases now or hereafter on or affecting the Mortgaged Property, together with
all security therefor and all monies payable thereunder, subject to the
conditional permission hereinabove given to Mortgagor to collect the rentals
under any such Lease. Mortgagor shall also execute and deliver to Mortgagee any
notification, financing statement or other document required by Mortgagee to
perfect the foregoing assignment as to any such lease.
(g) Mortgagor represents that all Leases, if any, are presently in
full force and effect and that no default exists thereunder. As any such Lease
shall expire, Mortgagor shall so notify Mortgagee in order that at all times,
Mortgagee shall have a current list of all Leases.
(h) The assignment contained in the granting clauses hereof shall
not be deemed to impose upon Mortgagee any of the obligations or duties of
Mortgagor provided in any such Lease (including, without limitation, any
liability under the covenant of quiet enjoyment contained in any Lease in the
event that any tenant shall have been joined as a party defendant in any action
to foreclose under this Mortgage and shall have been barred and foreclosed
thereby of all right, title and interest and equity of redemption in the
Mortgaged Property or any part thereof), and Mortgagor shall comply with and
observe its obligations as landlord under all Leases.
1.10 Environmental Matters.
(a) For purposes of this Paragraph 1.10, "Environmental Laws" shall
mean all foreign, Federal, State and local laws (including common law),
legislation, rules, codes,
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licenses, permits (including any conditions imposed therein), authorizations,
judicial or administrative decisions, injunctions or agreements between
Mortgagor and any governmental authority, (A) relating to pollution and the
protection, preservation or restoration of the environment (including air, water
vapor, surface water, ground water, drinking water, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety; (B) relating to the exposure to, or the
use, storage, recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release or
disposal, or threatened release, of Hazardous Materials; or (C) relating to all
laws with regard to record keeping, notification, disclosure and reporting
requirements respecting Hazardous Materials, and including, without limitation,
(1) the Federal Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Federal Superfund Amendments and Reauthorization Act, the
Federal Water Pollution Control Act of 1972, the Federal Clean Water Act, the
Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal
Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, (2) applicable state counterparts to such laws including, but not
limited to the Natural Resources and Environmental Protection Act, MCLA 324.101
et. seq., and (3) any common law or equitable doctrine that may impose liability
or obligations for injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Hazardous Materials, and (i) "Hazardous
Materials" shall mean any hazardous, toxic or dangerous substances, materials
and wastes, including, without limitation, hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of material defined as a pollutant or contaminant under any
applicable Environmental Law (including, without limitation, materials which
include hazardous constituents), sewage, sludge, industrial slag, solvents
and/or any other similar substances, materials, or wastes and including any
other substances, materials or wastes that are or become regulated under any
Environmental Law (including, without limitation, any that are or become
classified as hazardous or toxic under any Environmental Law).
(b) Except as set forth in the Indenture, Mortgagor has not
generated, used, stored, treated, transported, manufactured, handled, produced
or disposed of any Hazardous
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Materials, on or off the Mortgaged Property in any manner which at any time
violates any applicable Environmental Law or any license, permit, certificate,
approval or similar authorization issued to Mortgagor thereunder and the
operations of Mortgagor comply in all material respects with all applicable
Environmental Laws and all licenses, permits, certificates, approvals and
similar authorizations thereunder.
(c) Except as set forth in the Indenture, there is no investigation,
proceeding, complaint, order, directive, claim, citation or notice by any
governmental authority or any other person pending or, to the best of
Mortgagor's knowledge, threatened, with respect to any non-compliance with or
violation of the requirements of any applicable Environmental Law by Mortgagor,
nor has there been any release, spill or discharge, overtly threatened or
actual, of any Hazardous Material on the Mortgaged Property or the generation,
use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or any other environmental matter which
affects Mortgagor or its business, operations or assets.
(d) Except as set forth in the Indenture, Mortgagor has no material
liability (contingent or otherwise) in connection with a release, spill or
discharge, threatened or actual, of any Hazardous Materials or the generation,
use, storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials.
(e) Except as set forth in the Indenture, Mortgagor has all
licenses, permits, certificates, approvals or similar authorizations required to
be obtained or filed in connection with the operations of Mortgagor under any
Environmental Law and all of such licenses, permits, certificates, approvals or
similar authorizations are valid and in full force and effect.
(f) Except as set forth in the Indenture, the Mortgaged Property has
never been used by Mortgagor or, to the best knowledge of Mortgagor, by any
prior owner of the Mortgaged Property as (A) a dump site for Hazardous Materials
or (B) a storage (whether temporary or permanent) site for Hazardous Materials.
(g) Mortgagor shall, at all times, comply in all material respects
with all Environmental Laws.
(h) Mortgagor shall establish and maintain, at its expense, a system
to effectuate and monitor its continued compliance with all applicable
Environmental Laws in all of its
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operations, which system shall include annual reviews of such compliance by
employees or agents of the Mortgagor who are familiar with the requirements of
Environmental Laws. Copies of all environmental surveys, audits, assessments,
feasibility studies and results of remedial investigations and remediation
programs shall be promptly furnished, or caused to be furnished, by Mortgagor to
Mortgagee. Mortgagor shall take prompt and appropriate action to respond to any
non-compliance with any of the Environmental Laws and shall regularly report to
Mortgagee on each such response.
(i) Mortgagor shall give both oral and written notice to Mortgagee
promptly upon Mortgagor's receipt of any notice of, or Mortgagor's otherwise
obtaining actual knowledge of, (i) the occurrence of any event involving the
release, spill or discharge, threatened or actual, of any Hazardous Material in
violation of any Environmental Law or (ii) any investigation, proceeding,
complaint, order, directive, claims, citation or notice with respect to: (A) any
non-compliance with or violation of any Environmental Law by Mortgagor or (B)
the release, spill or discharge, threatened or actual, of any Hazardous Material
or (C) the generation, use, storage, treatment, transportation, manufacture,
handling, production or disposal of any Hazardous Materials not in compliance
with all Environmental Laws or (D) any other environmental, health or safety
matter, which affects Mortgagor or its business, operations or assets or the
Mortgaged Property in any way that has or would have a Material Adverse Effect.
(j) Without limiting the generality of the foregoing, whenever
Mortgagee reasonably determines that there is non-compliance, or any condition
which requires any action by or on behalf of Mortgagor in order to avoid any
non-compliance, with any Environmental Law, Mortgagor shall, at Mortgagee's
request and Mortgagor's expense: (i) cause an independent environmental engineer
acceptable to Mortgagee to conduct such tests of the site where Mortgagor's
non-compliance or alleged non-compliance with such Environmental Laws has
occurred as to such non-compliance and prepare and deliver to Mortgagee a report
as to such non-compliance setting forth the results of such tests, a proposed
plan for responding to any environmental problems described therein, and an
estimate of the costs thereof and (ii) provide to Mortgagee a supplemental
report of such engineer whenever the scope of such non-compliance, or
Mortgagor's response thereto or the estimated costs thereof, shall change in any
material respect.
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(k) Upon Mortgagee's receipt of any notice from any person or
entity, including, but not limited to, the Environmental Protection Agency,
asserting the existence of any Hazardous Materials on, or any violation of any
Environmental Laws pertaining to the Mortgaged Property that, if true, could
result in an order, suit or other action against Mortgagor and/or any part of
the Mortgaged Property by any governmental agency or otherwise that, in the
opinion of Mortgagee, could jeopardize its security under this Mortgage,
Mortgagee shall have the right, but not the obligation, to enter onto the
Mortgaged Property or to take such other actions as it deems necessary or
advisable to clean up, remove, resolve or minimize the impact of, or otherwise
deal with, any such Hazardous Materials or violation of any Environmental Laws.
Any and all sums expended by Mortgagee for such purposes, together with interest
thereon at the post-default rate of interest set forth in the Indenture shall be
immediately due and payable by Mortgagor and shall be indebtedness secured by
this Mortgage.
(l) Mortgagor shall indemnify and hold harmless Mortgagee, its
directors, officers, employees, agents, invitees, representatives, successors
and assigns, from and against any and all losses, claims, damages, liabilities,
costs, and expenses (including reasonable attorneys' fees and legal expenses)
directly or indirectly arising out of or attributable to the use, generation,
manufacture, reproduction, storage, release, threatened release, spill,
discharge, disposal or presence of a Hazardous Material on the Mortgaged
Property, including, without limitation, the costs of any repair, cleanup or
other remedial work required under any Environmental Law or by any governmental
authority with respect to the Mortgaged Property and the preparation and
implementation of any closure, remedial or other required plans.
(m) Notwithstanding anything to the contrary herein or in any other
document evidencing, securing or setting forth the terms of the Obligations,
nothing shall give Mortgagee the right to influence or direct hazardous waste
disposal decisions or treatments, such being the sole responsibility of
Mortgagor.
(n) The terms and provisions of this Paragraph 1.10 shall survive
indefinitely, notwithstanding any payment of the indebtedness secured hereby or
any satisfaction, cancellation or release of this Mortgage.
1.11 Further Assurances. At any time and from time to time, upon
Mortgagee's request, Mortgagor shall make, execute and deliver, or cause to be
made, executed and delivered, to
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Mortgagee and where appropriate shall cause to be recorded or filed, and from
time to time thereafter to be re-recorded and refiled at such time and in such
offices and places as shall be deemed desirable by Mortgagee, any and all such
further mortgages, instruments or further assurances, certificates and other
documents as Mortgagee may consider necessary or desirable in order to
effectuate, complete, or perfect, or to continue and preserve the Obligations of
Mortgagor under this Mortgage and the other Financing Documents, and the lien of
this Mortgage as a lien upon all of the Mortgaged Property, whether now owned or
hereafter acquired by Mortgagor. Upon any failure by Mortgagor to do so,
Mortgagee may make, execute, record, file, re-record or refile any and all such
mortgages, instruments, certificates and documents for and in the name of
Mortgagor, and Mortgagor hereby irrevocably appoints Mortgagee as agent and
attorney-in-fact of Mortgagor to do so.
1.12 Security Agreements and Financing Statements.
(a) Mortgagor (as Debtor) hereby grants to Mortgagee (as Creditor
and Secured Party) a security interest in and continuing lien upon all fixtures,
machinery, appliances, equipment, furniture and personal property of every
nature whatsoever constituting part of the Mortgaged Property.
(b) Mortgagor hereby authorizes and empowers Mortgagee to file of
any and all such documents, including without limitation, financing statements,
refilings and continuations thereof, pursuant to the Uniform Commercial Code of
the State of Michigan (the "Uniform Commercial Code"), as Mortgagee may request,
to preserve and maintain the priority of the lien created hereby on the portion
of Mortgaged Property which may be deemed personal property or fixtures and
shall pay to Mortgagee on demand any expenses incurred by Mortgagee in
connection with the preparation, execution and filing of any such documents.
When and if Mortgagor and Mortgagee shall respectively become the Debtor and
Secured Party in any Uniform Commercial Code financing statement affecting the
Mortgaged Property, this Mortgage shall be deemed a security agreement as
defined in said Uniform Commercial Code and the remedies for any violation of
the covenants, terms and conditions of the agreements herein contained shall be
(i) as prescribed herein and in the other Financing Agreements, (ii) governed by
general law, or (iii) as to such part of the security which is also reflected in
said financing statement, governed by the specific statutory provisions now or
hereafter enacted and specified in the Uniform Commercial Code, all at
Mortgagee's election.
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(c) Mortgagor and Mortgagee agree that the filing of a financing
statement in the records normally having to do with personal property shall
never be construed as in any way derogating from or impairing the express
declaration and intention of the parties hereto, hereinabove stated, that
everything used in connection with the production of income from the Mortgaged
Property and/or adapted for use therein and/or which is described or reflected
in this Mortgage is, and at all times and for all purposes and in all
proceedings both legal or equitable, shall be regarded as part of the real
estate encumbered by this Mortgage irrespective of whether (i) any such item is
physically attached to the Improvements, (ii) serial numbers are used for the
better identification of certain equipment items capable of being thus
identified in a recital contained herein or in any list filed with Mortgagee, or
(iii) any such item is referred to or reflected in any such financing statement
so filed at any time. Similarly, the mention in any such financing statement of
(A) rights in or to the proceeds of any fire and/or hazard insurance policy, or
(B) any award in eminent domain or condemnation proceedings for a taking or for
loss of value, or (C) Mortgagor's interest as lessor in any present or future
lease or rights to income growing out of the use and/or occupancy of the
Mortgaged Property, whether pursuant to lease or otherwise, shall never be
construed as in any way altering any of the rights of Mortgagee as determined by
this instrument or impugning the priority of the lien granted hereby or by any
other recorded document, but such mention in the financing statement is declared
to be for the protection of Mortgagee in the event any court or judge shall at
any time hold with respect to (A), (B) and (C) that notice of Mortgagee's
priority of interest to be effective against a particular class of persons,
including but not limited to the federal government and any subdivisions or
entity of the federal government, must be filed in the Uniform Commercial Code
records.
1.13 Assignment of Rents. (a) The assignment of Leases and Rents
contained in the Granting Clauses of this Mortgage shall be (i) fully operative
without any further action on the part of either party and specifically
Mortgagee shall be entitled, at its option, upon the occurrence of an Event of
Default, to all Rents from the property described in the Granting Clauses hereof
whether or not Mortgagee takes possession of such property and (ii) upon the
occurrence of an Event of Default, an irrevocable direction to and full
authority to each lessee and sublessee under any Leases to pay all Rents to
Mortgagee, without proof of the default relied upon and an automatic revocation
of the permission hereby granted to Mortgagor to collect and use the Rents and
any Rents collected by Mortgagor shall be held in trust
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for Mortgagee, and Mortgagor shall be a trustee with respect to all Rents
received and shall hold these Rents for the account of Mortgagee, to be applied
toward the Obligations. Mortgagor hereby irrevocably authorizes each lessee,
sublessee, guarantor, person and entity to rely upon and comply with any notice
or demand by Mortgagee for the payment to Mortgagee, of any Rents due or to
become due. Mortgagor hereby further grants to Mortgagee the right (A) to enter
upon and take possession of the Mortgaged Property for the purpose of collecting
the said Rents, (B) to dispossess by the usual summary proceedings any tenant
defaulting in the payment thereof to Mortgagee, (C) to let the Mortgaged
Property or any part thereof, and (D) to apply said Rents, after payment of all
necessary charges and expenses, on account of the Obligations. Such assignment
and grant shall continue in effect until the Obligations secured hereby are
indefeasibly paid in full, the execution of this Mortgage constituting and
evidencing the irrevocable consent of Mortgagor to the entry upon and taking
possession of the Mortgaged Property by Mortgagee pursuant to such grant,
whether or not foreclosure has been instituted. Neither the exercise of any
rights under this Paragraph by Mortgagee nor the application of any such Rents,
income or other benefits to the Obligations secured hereby, shall cure or waive
any default or notice of Event of Default hereunder or invalidate any act done
pursuant hereto or to any such notice, but shall be cumulative of all other
rights and remedies.
(b) Without limiting the effectiveness of the assignment set forth
above, Mortgagee shall be entitled to all of the rights and benefits of MCLA
Section 554.231 et seq., as amended, and any successor provisions. Thus, as
additional security, Mortgagor hereby assigns to Mortgagee: (i) the rents and
profits of the Mortgaged Property; and upon the occurrence of any Event of
Default, Mortgagee may receive and collect such rents and profits so long as
such Event of Default shall exist, including during the pendency of any
foreclosure proceedings and during any redemption period; and (ii) any lease,
whether now in existence or which may hereafter come into existence during the
term of this Mortgage (including any extensions hereof), covering all or any
part of the Mortgaged Property. The collection of rents and profits of the
Mortgaged Property by Mortgagee, pursuant to this Paragraph or otherwise, shall
in no way waive the right of Mortgagee to foreclose this Mortgage in the event
of any Event of Default.
1.14 After-Acquired Mortgaged Property. To the extent permitted by and
subject to applicable law, the lien of this Mortgage will automatically attach,
without further act, to all
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after-acquired property located in or on, or attached to, or used or intended to
be used in connection with, or with the operation of, the Mortgaged Property or
any part thereof.
1.15 Intentionally Omitted.
1.16 Expenses. Mortgagor will pay to Mortgagee on demand all appraisal
fees, recording fees, taxes, brokerage fees and commissions, abstract fees,
title policy fees, escrow fees, reasonable attorneys' fees and expenses, court
costs, and all other costs and expenses of every character which have been
incurred or which may hereafter be incurred by Mortgagee in connection with: (a)
the preparation and execution of the Financing Agreements; (b) the funding of
loans and providing Letter of Credit Accommodations; (c) preparation for
enforcement of the Financing Agreements, whether or not suit or other action is
actually commenced or undertaken; (d) enforcement of the Financing Agreements;
(e) court or administrative proceedings of any kind to which Mortgagee may be a
party, either as plaintiff or defendant, by reason of the Financing Agreements;
(f) preparation for and actions taken in connection with Mortgagee's taking
possession of the Mortgaged Property; (g) negotiations with Mortgagor or any of
its affiliates, or any of its agents in connection with the existence or cure of
any Event of Default; (h) any proposed refinancing of the Obligations secured
hereby; (i) the transfer of the Mortgaged Property in lieu of foreclosure; and
(j) the approval by Mortgagee of actions taken or proposed to be taken by
Mortgagor or other person or entity which approval is required by the terms of
this Mortgage or the other Financing Agreements. Mortgagor will, upon demand by
Mortgagee, reimburse Mortgagee for all such expenses which have been incurred or
which shall be incurred by it; and will indemnify and hold harmless Mortgagee
from and against, and reimburse it for, all claims, demands, liabilities,
losses, damages, judgments, penalties, costs and expenses (including, without
limitation, attorneys' fees and expenses) which may be imposed upon, asserted
against or incurred or paid by it by reason of, on account of or in connection
with any bodily injury or death or property damage occurring in or upon or in
the vicinity of the Mortgaged Property through any cause whatsoever or asserted
against it on account of any act performed or omitted to be performed thereunder
or on account of any transaction arising out of or in any way connected with the
Mortgaged Property, or with this Mortgage, the other Financing Agreements or any
of the Obligations; provided that such obligation to indemnify shall not apply
to any losses, claims, liabilities, costs or expenses caused by Mortgagee's own
gross negligence or wilful misconduct (as determined by a final non-appealable
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judgment of a court of competent jurisdiction). It is the intention of the
parties hereto that the costs and expenses set forth in this Paragraph shall
survive maturity, acceleration and entry of judgment and continue to accrue
until such costs and expenses are paid in full by Mortgagor.
1.17 Mortgagee's Cure of Defaults. If Mortgagor defaults in the payment
of any tax, assessment, encumbrance or other imposition, in its obligation to
furnish insurance hereunder, or in the performance or observance of any other
covenant, condition or term in this Mortgage or the other Financing Agreements,
without limiting Mortgagee's rights to establish availability reserves for any
of such matters at any time, Mortgagee may (but shall not be obligated to)
advance funds for the account of Mortgagor to pay any such charges or items or
perform or observe the same. In addition, Mortgagee may at any time and from
time to time advance such additional sums as Mortgagee in its discretion may
deem necessary to preserve and protect the Mortgaged Property or any portion
thereof and to protect the security of this Mortgage. All such advanced costs
and expenses incurred or paid by Mortgagee in connection therewith shall be due
and payable on demand, shall bear interest at the post-default rate of interest
payable under the Indenture, shall be added to the Obligations and secured by
the lien of this Mortgage. Mortgagee is hereby empowered to enter and authorize
others to enter upon the Mortgaged Property or any part thereof for the purpose
of performing or observing any such defaulted covenant, condition or term,
without thereby becoming liable to Mortgagor or any person in possession holding
under Mortgagor. Payment by Mortgagee as authorized herein to the holder of any
prior lien shall entitle Mortgagee to become subrogated to the claims of such
party to the extent of all such payments. The production of a receipt by
Mortgagee shall be prima facie proof of a payment or advance authorized hereby,
and the amount and validity thereof.
1.18 Future Indebtedness of Mortgagor. Mortgagor covenants not to issue
a notice to Mortgagee limiting the lien of this Mortgage until all Obligations
have been satisfied in full.
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ARTICLE TWO
DEFAULTS
2.1 At the option of Mortgagee, Mortgagor shall be deemed in default
hereof, and all existing and future liabilities of every kind secured hereby and
all other Obligations shall become due and payable immediately, without further
notice to or demand upon Mortgagor, and shall be recoverable forthwith or at any
time or times thereafter without stay of execution or other process, upon the
occurrence of any one or more of the Events of Default as such term is defined
in the Indenture(herein "Event of Default").
ARTICLE THREE
REMEDIES
3.1 Acceleration of Maturity. If an Event of Default shall have
occurred, then all of the Obligations shall, at Mortgagee's option, immediately
become due and payable without notice or demand, time being of the essence
hereof; and no omission on the part of Mortgagee to exercise such option when
entitled to do so shall be construed as a waiver of such right.
3.2 Mortgagee's Power of Enforcement. If an Event of Default shall have
occurred, Mortgagee may, either with or without entry or taking possession as
hereinabove provided or otherwise, and without regard to whether or not the
Obligations shall be due and without prejudice to the right of Mortgagee
thereafter to bring an action of foreclosure or any other action for any default
existing at the time such earlier action was commenced, proceed by any
appropriate action or proceeding: (a) to enforce payment of the Obligations or
the performance of any term hereof or any other right; (b) to foreclose this
Mortgage, in accordance with applicable law, and to sell, as an entirety or in
separate lots or parcels, the Mortgaged Property by advertisement or by judicial
proceeding and by public or private sale; and (c) to pursue any other remedy
available to it. Mortgagee shall take action either by such proceedings or by
the exercise of its powers with respect to entry or taking possession, or both,
as Mortgagee may determine.
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3.3 Mortgagee's Right to Enter and Take
Possession, Operate and Apply Income.
(a) If an Event of Default shall have occurred, (i) Mortgagor upon
demand of Mortgagee shall forthwith surrender to Mortgagee possession of the
Mortgaged Property and if and to the extent permitted by law, Mortgagee itself,
or by such officers or agents as it may appoint, may enter upon and take
possession of the Mortgaged Property and may exclude Mortgagor and its agents
and employees wholly therefrom and may have joint access with Mortgagor to the
books, papers and accounts of Mortgagor; and (ii) Mortgagor will pay monthly in
advance to Mortgagee, on Mortgagee's entry into possession, or to any receiver
appointed to collect the Rents of the Mortgaged Property, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property as may be in possession of Mortgagor, and upon default in any such
payment will vacate and surrender possession of such part of the Mortgaged
Property to Mortgagee or to such receiver and, in default thereof, Mortgagor may
be evicted by summary proceedings or otherwise.
(b) If Mortgagor shall for any reason fail to surrender or deliver
the Mortgaged Property or any part thereof after Mortgagee's demand, Mortgagee
may obtain a judgment or decree conferring on Mortgagee the right to immediate
possession or requiring Mortgagor to deliver immediate possession of all or part
of the Mortgaged Property to Mortgagee, to the entry of which judgment or decree
Mortgagor hereby specifically consents. Mortgagor shall pay to Mortgagee, upon
demand, all costs and expenses of obtaining such judgment or decree and
compensation to Mortgagee, its attorneys and agents, and all such costs,
expenses and compensation shall, until paid, be secured by the lien of this
Mortgage.
(c) Upon every such entering upon or taking of possession, Mortgagee
may hold, store, use, operate, manage and control the Mortgaged Property and
conduct the business thereof, and, from time to time:
(i) make all necessary and proper
maintenance, repairs, renewals,
replacements, additions,
betterments and improvements
thereto and thereon and purchase
or otherwise acquire additional
fixtures, personalty and other
property;
(ii) insure or keep the Mortgaged
Property insured;
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(iii) manage and operate the Mortgaged
Property and exercise all the
rights and powers of Mortgagor
in its name or otherwise with
respect to the same;
(iv) enter into agreements with
others to exercise the powers
herein granted Mortgagee, all as
Mortgagee from time to time may
determine; and Mortgagee may
collect and receive all the
Rents thereof, including those
past due as well as those
accruing thereafter; and shall
apply the monies so received by
Mortgagee in such priority as
Mortgagee may determine to (A)
the payment of the Obligations;
(B) the deposits for taxes and
assessments and insurance
premiums due; (C) the cost of
insurance, taxes, assessments
and proper charges upon the
Mortgaged Property or any part
thereof; (D) the expenses of
operating, maintaining,
repairing and improving the
Mortgaged Property, including
without limitation renting
commissions and rental
collection commissions paid to
an agent of Mortgagee or of the
receiver; and (E) the
compensation, expenses and
disbursements of the agents,
attorneys and other
representatives of Mortgagee.
(d) Mortgagee shall surrender possession of the Mortgaged Property
to Mortgagor only when all Obligations secured hereby and all amounts under any
of the terms of this Mortgage shall have been indefeasibly paid in full and all
defaults made good. The same right of taking possession, however, shall exist if
any subsequent Event of Default shall occur.
3.4 Leases. Mortgagee, at its option, is authorized to foreclose this
Mortgage subject to the rights of any tenants of the Mortgaged Property, and the
failure to make any such tenants parties defendant to any such foreclosure
proceedings and to foreclose their rights will not be, nor be asserted by
Mortgagor to be, a defense to any proceedings instituted by Mortgagee to collect
the sums secured hereby or to collect any deficiency remaining unpaid after the
foreclosure sale of the Mortgaged Property.
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3.5 Purchase by Mortgagee. Upon any such foreclosure sale, Mortgagee
may bid for and purchase the Mortgaged Property and, upon compliance with the
terms of sale, may hold, retain and possess and dispose of the Mortgaged
Property in its own absolute right without further accountability.
3.6 Application of Obligations Toward Purchase Price. Upon any such
foreclosure sale, Mortgagee may, if permitted by law, and after allowing for
costs and expenses of the sale, compensation and other charges, in paying the
purchase price, apply any portion or all of the Obligations due under the
Financing Agreements, in lieu of cash, to the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon, to the extent
of the purchase price.
3.7 Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws. Mortgagor agrees to the full extent permitted by law that in case of a
default in its part hereunder, neither Mortgagor nor anyone claiming through or
under it shall or will set up, claim or seek to take advantage of any
appraisement, valuation, extension or redemption laws now or hereafter in force,
in order to prevent or hinder the enforcement or foreclosure of this Mortgage or
the absolute sale of the Mortgaged Property or the final and absolute putting
into possession thereof, immediately after such sale, of the purchasers thereat,
and Mortgagor, for itself and all who may at any time claim through or under it,
hereby waives, to the full extent that it may lawfully so do, the benefit of all
such laws, and any and all right to have the assets comprising the Mortgaged
Property marshalled upon any foreclosure of the lien hereof and agrees that the
Mortgagee or any court having jurisdiction to foreclose such lien may sell the
Mortgaged Property in part or as an entirety.
3.8 Receiver. If an Event of Default shall have occurred, Mortgagee to
the extent permitted by law and without regard to the value or adequacy of the
security for the Obligations secured hereby, shall be entitled as a matter of
right if it so elects and without notice to Mortgagor to the appointment of a
receiver to enter upon and take possession of the Mortgaged Property and to
collect all Rents thereof and apply the same as the court may direct (for
purposes of this Paragraph, a breach of either Paragraph 1.4 or 1.6 by Mortgagor
shall constitute waste (although the meaning of the term "waste" shall not be
limited to such breach) as provided by Act 236 of the Public Acts of Michigan of
1961, as amended, and shall entitle Mortgagee to all remedies provided for
therein). The expenses, including
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receiver's fees, reasonable attorneys' fees, costs and agent's compensation,
incurred pursuant to the powers herein contained shall be secured by this
Mortgage. The right to enter and take possession of and to manage and operate
the Mortgaged Property and to collect all Rents thereof, whether by a receiver
or otherwise, shall be cumulative to any other right or remedy hereunder or
afforded by law and may be exercised concurrently therewith or independently
thereof. Mortgagee shall be liable to account only for the Rents actually
received by Mortgagee, whether received pursuant to this Paragraph or Paragraph
3.3. Notwithstanding the appointment of any receiver or other custodian,
Mortgagee, shall be entitled as pledgee to the possession and control of any
cash, deposits, or instruments at the time held by, or payable to deliverable
under the terms of this Mortgage to, Mortgagee.
3.9 Suits to Protect the Mortgaged Property. Mortgagee shall have the
power and authority to institute and maintain any suits and proceedings as
Mortgagee may deem advisable (a) to prevent any impairment of the Mortgaged
Property by any acts which may be unlawful or in violation of the Mortgage, (b)
to preserve or protect its interest in the Mortgaged Property, and (c) to
restrain the enforcement of or compliance with any legislation or other
government enactment, rule or order that may be unconstitutional or otherwise
invalid, if the enforcement or compliance with such enactment, rule or order
might impair the security hereunder or be prejudicial to the interest of
Mortgagee.
3.10 Application of Monies by Mortgagee.
(a) Upon the occurrence of an Event of Default, Mortgagee shall be
entitled to xxx for and to recover judgment against Mortgagor for the whole
amount of the Obligations due and unpaid together with costs and expenses,
including without limitation, the compensation, expenses and disbursements of
Mortgagee's agents, attorneys and other representatives, either before, after or
during the pendency of any proceedings for the enforcement of this Mortgage, and
the right of Mortgagee to recover such judgment shall not be affected by any
taking possession or foreclosure sale hereunder, or by the exercise of any other
right, power or remedy for the enforcement of the terms of this Mortgage, or the
foreclosure of the lien hereof.
(b) In case of a foreclosure sale of all or any part of the
Mortgaged Property and the application for the proceeds of sale to the payment
of the Obligations secured hereby, Mortgagee shall be entitled to enforce
payment from Mortgagor of all
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Obligations then remaining due and unpaid and to recover judgment against
Mortgagor for any portion thereof remaining unpaid, with interest.
(c) Mortgagor hereby agrees, to the extent permitted by law, that no
recovery of any such judgment by Mortgagee and no attachment or levy of any
execution upon any of the Mortgaged Property or any other property shall in any
way affect the lien of this Mortgage upon the Mortgaged Property or any part
thereof or any lien, rights, powers or remedies or Mortgagee hereunder, but such
lien, rights, powers or remedies shall continue unimpaired as before.
(d) Any monies collected or received by Mortgagee under this
Paragraph 3.10 shall be applied to the payment of compensation, expenses and
disbursements of the agents, attorneys and other representatives of Mortgagee,
and the balance remaining shall be applied to the payment of the Obligations
secured hereby in such order and priority as Mortgagee elects.
3.12 Delay or Omission; No Waiver. No delay or omission of Mortgagee to
exercise any right, power or remedy accruing upon any Event of Default shall
exhaust or impair any such right, power or remedy or shall be construed to waive
any such Event of Default or to constitute acquiescence therein. Every right,
power and remedy given to Mortgagee may be exercised from time to time and as
often as may be deemed expedient by Mortgagee.
3.13 No Waiver of One Default to Affect Another. No waiver of any Event
of Default hereunder shall extend to or affect any subsequent or any other Event
of Default then existing, or impair any rights, powers or remedies consequent
thereon. If Mortgagee (a) grants forbearance or an extension of time for the
payment of any Obligations secured hereby; (b) takes other or additional
security for the payment thereof; (c) waives or does not exercise any right
granted in the Financing Agreements; (d) releases any part of the Mortgaged
Property from the lien of this Mortgage; (e) consents to the filing of any map,
plat or replat of the Land; (f) consents to the granting of any easement on the
Land; or (g) makes or consents to any agreement changing the terms of this
Mortgage or subordinating the lien or any charge hereof, no such act or omission
shall release, discharge, modify, change or affect the Obligations of Mortgagor
or any other party liable for payment or performance of the Obligations. No such
act or omission shall preclude Mortgagee from exercising any right, power or
privilege herein granted or intended to be granted in case of any Event of
Default then existing or of any subsequent Event of Default nor shall the lien
of this Mortgage be altered
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hereby, except to the extent of releases as described in Subparagraph (d) above
of this Paragraph 3.12.
3.14 Discontinuance of Proceedings; Position of Parties Restored. If
the Mortgagee shall have proceeded to enforce any right or remedy under this
Mortgage by foreclosure, entry or otherwise and such proceedings shall have been
discontinued or abandoned for any reason, or such proceedings shall have
resulted in a final determination adverse to Mortgagee, then and in every such
case Mortgagor and Mortgagee shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of Mortgagee shall
continue as if no such proceedings had occurred or had been taken.
3.15 Remedies Cumulative. No right, power or remedy conferred upon or
reserved to Mortgagee by the Financing Agreements is exclusive of any other
right, power or remedy, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other right, power and
remedy given under the Financing Agreements, or now or hereafter existing at
law, in equity or by statute.
3.16 Defeasance. If Mortgagor shall pay or cause to be paid the
Obligations secured hereby in accordance with the terms thereof, and shall
comply with all the terms, conditions and requirements of the Financing
Agreements and of this Mortgage, then upon complete and indefeasible payment and
satisfaction thereof, this Mortgage shall be released by Mortgagee upon the
written request and at the expense of Mortgagor.
ARTICLE FOUR
TRANSFER OR FURTHER ENCUMBRANCE OF THE MORTGAGED PROPERTY
4.1 Transfer or Further Encumbrance of the Mortgaged Property. In the
event of any direct or indirect sale, conveyance, transfer, lease, pledge or
further encumbrance of the Mortgaged Property or any interest in or any part of
the Mortgaged Property or any further assignment of Rents from the Mortgaged
Property without the prior written consent of Mortgagee then, at Mortgagee's
option, Mortgagee may declare all Obligations of Mortgagor to be due and payable
immediately without demand or notice. Mortgagor agrees that in the event the
ownership of the Mortgaged Property or any part thereof becomes vested in a
person other than Mortgagor, Mortgagee may, without notice to Mortgagor, deal in
any way with such successor or successors in interest with reference to this
Mortgage and the Obligations hereby secured without in any way vitiating or
-34-
discharging Mortgagor's liability hereunder or under the Financing Agreements.
No transfer or encumbrance of the Mortgaged Property or any interest therein and
no forbearance or assumption by any person with respect to this Mortgage and no
extension to any person of the time for payment of the Obligations hereby
secured given by Mortgagee shall operate to release, discharge, modify, change
or affect the liability of Mortgagor either in whole or in part, unless
Mortgagee specifically agrees in writing to the contrary.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
5.1 Successors and Assigns Included in Parties. Whenever one of the
parties hereto is named or referred to herein, the successors and assigns of
such party shall be included and all covenants and agreements contained in this
Mortgage, by or on behalf of Mortgagor or Mortgagee shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed or not.
5.2 Addresses for Notices, Etc.
(a) All notices, requests and demands hereunder shall be in writing
and deemed to have been given or made: if delivered in person immediately upon
delivery; if by telex, telegram or facsimile transmission, immediately upon
sending and upon confirmation of receipt; if by nationally recognized overnight
courier service with instructions to delivery the next business day, one (1)
business day after sending; and if by certified mail, return receipt requested,
five (5) days after mailing. All notices, requests and demands are to be made to
Mortgagee at its address set forth below and to Mortgagor at its chief executive
office set forth below (or to such other address as either party may designate
by written notice to the other in accordance with this provision):
If to Mortgagee:
HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Issuer Services
If to Mortgagor:
Reptron Electronics, Inc.
00000 Xxxxxxx Xxxxxxxxx
-00-
Xxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx
(b) Either party may change the address to which any such notice,
report, demand or other instrument is to be delivered or mailed, by furnishing
written notice of such change to the other party, but no such notice of change
shall be effective unless and until received by such other party.
5.3 Headings. The headings of the articles, sections, paragraphs and
subdivisions of this Mortgage are for convenience of reference only, are not to
be considered a part hereof, and shall not limit or expand or otherwise affect
any of the terms hereof.
5.4 Invalid Provisions to Affect No Others. In the event that any of
the covenants, agreements, terms or provisions contained in this Mortgage or in
the Financing Agreements shall be deemed invalid, illegal or unenforceable in
any respect, the validity of the remaining covenants, agreements, terms or
provisions contained therein shall be in no way affected, prejudiced or
disturbed thereby; and if any application of any term, restriction or covenant
to any person or circumstances is deemed illegal or unenforceable, the
application of such term, restriction or covenant to other persons and
circumstances shall remain unaffected to the extent permitted by law.
5.5 Changes, Etc. Neither this Mortgage nor any term hereof may be
changed, waived, discharged or terminated orally, or by any action or inaction,
but only by an instrument in writing signed by Mortgagor and Mortgagee. The
modification hereof or of any of the Financing Agreements or the release of any
part of the Mortgaged Property from the lien hereof shall not impair the
priority of the lien of this Mortgage.
5.6 Governing Law. This Mortgage shall be construed, interpreted,
enforced and governed by and in accordance with the laws of the State of
Michigan without regard to the choice of law provisions of such State.
5.7 Construction. The words "Mortgagor" and "Mortgagee" include
singular or plural, individual or corporation, and the respective heirs,
executors, administrators, successors and assigns of Mortgagor and Mortgagee, as
the case may be. The use of any gender applies to all genders.
-36-
5.8 Conflicts. In case of any conflict between the provisions of this
Mortgage relating to equipment and other personal property and the Indenture
with respect to the same matter, the provisions of the Indenture shall control.
In all other cases of conflicts between the provisions of this Mortgage and the
provisions of the Loan Agreement, the provisions of this Mortgage shall control.
Consistent additional provisions shall not be considered conflicting provisions
for purposes of this Paragraph.
5.9 WAIVER OF JURY TRIAL. MORTGAGOR HEREBY WAIVES TRIAL BY JURY IN ANY
LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF
THIS MORTGAGE OR THE OTHER FINANCING AGREEMENTS.
5.10 WAIVER OF COUNTERCLAIMS. MORTGAGOR WAIVES ALL RIGHTS TO INTERPOSE
ANY CLAIMS, DEDUCTIONS, SETOFFS OR COUNTERCLAIMS OF ANY NATURE (OTHER THAN
COMPULSORY COUNTERCLAIMS) IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS
MORTGAGE, THE OBLIGATIONS, THE MORTGAGED PROPERTY OR ANY MATTER ARISING
THEREFROM OR RELATING HERETO OR THERETO.
5.11 Statement of Obligations. After request by Mortgagee, Mortgagor,
within ten (10) days and at its expense, will furnish Mortgagee with a
statement, duly acknowledged and certified, setting forth the amount of the
Obligations and the offsets or defenses thereto, if any.
5.12 Post-Judgment Interest, Rights and Remedies; Non-Merger. It is the
intention of the parties hereto that (a) the interest rates set forth in the
Indenture and any evidence of indebtedness issued pursuant thereto shall survive
maturity, acceleration and entry of judgment, and continue to accrue on the
outstanding principal balance of the Obligations until such Obligations are paid
in full, and (b) the covenants and obligations of the Mortgagor and the rights
and remedies of the Mortgagee hereunder and under the Indenture and any other
instrument or obligation executed pursuant thereto shall not merge with or be
extinguished by the entry of judgment hereunder or thereunder and such
covenants, obligations, rights and remedies shall survive any entry of judgment
and continue until payment in full of the indebtedness secured hereby.
5.13 Multisite Real Estate Transaction. Mortgagor acknowledges that
this Mortgage is one of a number of other mortgages and security documents that
secure the Obligations. Mortgagor agrees that the lien of this Mortgage shall be
absolute and unconditional and shall not in any manner be
-37-
affected or impaired by any acts or omissions whatsoever of Mortgagee and
without limiting the generality of the foregoing, the lien hereof shall not be
impaired by any acceptance by Mortgagee of any security for or guarantees of any
of the Obligations hereby secured, or by any failure, neglect or omission on the
part of the Mortgagee to realize upon or protect any Obligation or indebtedness
hereby secured or any collateral security therefor including the other mortgages
and security documents. The lien hereof shall not in any manner be impaired or
affected by any release (except as to the property released), sale, pledge,
surrender, compromise, settlement, renewal, extension, indulgence, alteration,
changing, modification or disposition of any of the Obligations secured or any
of the collateral security therefor, including the other mortgages and security
documents or of any guarantee thereof, and Mortgagee may at its discretion
foreclose, exercise any power of sale, or exercise any other remedy available to
it under any or all of the other mortgages and other security documents without
first exercising or enforcing any of its rights and remedies hereunder. Such
exercise of Mortgagee's rights and remedies under any or all of the other
mortgages and other security documents shall not in any manner impair the
indebtedness hereby secured or the lien of this Mortgage and any exercise of the
rights or remedies of Mortgagee shall not impair the lien of any other mortgages
and other security documents or any of Mortgagee's rights and remedies
thereunder. Mortgagor specifically consents and agrees that Mortgagee may
exercise its rights and remedies hereunder and under the other mortgages and
other security documents separately or concurrently and in any order that it may
deem appropriate and Mortgagor waives any rights of subrogation.
5.14 Option or Discretion of Mortgagee. Notwithstanding anything to the
contrary expressed or implied herein, wherever it is herein stated that the
Mortgagee is to take action or not to take action at the option or the
discretion of the Mortgagee, the Mortgagee shall not be required to taken any
such action or not take any such action unless it has been notified in writing
to do so by the holders of Notes under the Indenture holding at least 25% in
principal amount of the Notes then outstanding under the Indenture.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly
executed, under seal, by its duly authorized corporate officers on the date
first above written.
IN THE PRESENCE OF: REPTRON ELECTRONICS, INC.
By:
------------------------ ----------------------
Name: Xxxxxxx Xxxxx Name: Xxxx X. Xxxxxx
Witness Title: PresidenT
[CORPORATE SEAL]
------------------------
Name:
-------------------
Witness
-00-
XXXXXXXXXXXXXX
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK)
The foregoing instrument was executed and acknowledged before me
this __________ day of ______________, 2004 by Xxxx X. Xxxxxx, the President of
REPTRON ELECTRONICS, INC., a Florida corporation, on behalf of the corporation.
----------------------------------
Notary Public
County, N.Y.,
----------
My Commission Expires
-------------
-40-
EXHIBIT A
DESCRIPTION OF LAND
For identification purposes only, the foregoing parcels are known as
Parcel Nos. 103-150-000-012-00 and 103-150-000-019-00 in the Office of Tax
Assessor of Otsego County, Michigan.
Land in the City of Xxxxxxx, County of Otsego, Michigan described as follows:
Xxxx 00-00, Xxxx xx Xxxxxxx Xxx Xxxxxxxxxx Xxxx No. 1 according to the plat
thereof as recorded in Liber 4 of Plats, Pages 34-39, Otsego County Records.
-41-
EXHIBIT B
PERMITTED ENCUMBRANCES
1. Taxes for the year 2003 and subsequent years not due and payable.
2. Mortgage to Northeast Michigan Development Company, dated July 5,
1988, and recorded July 14, 1988, in Liber 411, page 453, Otsego County Records
assigned to Small Business Administration, as set forth in that certain
Assignment of Mortgage, dated July 15, 1988, and recorded July 15, 1988, in
Liber 411, page 474, Otsego County Records.
3. Building and Use Restrictions as set forth in instrument dated
October 18, 1974 and recorded October 21, 1974 in Liber 189 page 74, Otsego
County records and Amendment to Restrictions recorded December 21, 1999 in Liber
743 page 798, Otsego County Records.
4. Easement plated in subdivision in Liber 189, Page 74, Otsego County
Records.
5. Reservation by the State of Michigan contained in that certain deed
recorded March 15, 1943, in Liber 41, page 80, Otsego County Records and that
certain deed recorded July 5, 1947, in Liber 41, page 338, Otsego County
Records.
6. Mortgage by and from Reptron Electronics, Inc. to Congress Financial
Corporation, (Florida), as Agent, dated as of ____, 2004.
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