Exhibit 4.03
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MORTGAGE
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THIS IS A FUTURE ADVANCE MORTGAGE
THIS MORTGAGE is made on July 31, 2003, by and between NEMATRON
CORPORATION, a Michigan corporation, whose address is 0000 Xxxxxxxxx Xxxxx, Xxx
Xxxxx, Xxxxxxxx 00000 ("Grantor"), and NORTH COAST TECHNOLOGY INVESTORS, LP, a
Michigan Limited Partnership ("Lender"), whose address is 000 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxx, Xxxxxxxx 00000.
IN CONSIDERATION of loans, advances or other financial accommodations
from Lender to Grantor, Grantor does hereby covenant, promise and agree to and
with the Lender, which covenants, promises and agreements shall, to the extent
permitted by law, be deemed to run with the land, as follows:
1. Definitions. The following terms shall have the following meanings when
used in this Mortgage:
a. "Lease(s)" means and includes all leases and rental agreements, written or
unwritten, now or hereafter demising the Property in whole or in any part,
and all amendments, modifications, extensions, renewals, substitutions and
replacements for any of the foregoing.
b. "Liabilities" means all loans, advances or other financial accommodations,
including any renewals or extensions thereof, from the Lender to Grantor
and any and all liabilities and obligations of any and every kind and
nature heretofore, now or hereafter owing from Grantor to the Lender,
however incurred or evidenced, whether primary, secondary, contingent or
otherwise, whether arising under the Note, and any and all extensions and
renewals thereof, this Mortgage, under any other security agreement,
promissory note, guaranty, mortgage, lease, instrument, document, contract,
letter of credit or similar agreement heretofore, now or hereafter executed
by Grantor and delivered to the Lender, or by oral agreement or by
operation of law plus all interest, costs, expenses and reasonable attorney
fees which may be made or incurred by the Lender in the disbursement,
administration or collection of such liabilities and obligations and in the
protection, maintenance and liquidation of the Property and the performance
of the covenants and conditions of this Mortgage, and ANY FUTURE ADVANCES,
WITH INTEREST THEREON, made to Grantor by the Lender which are secured by
this Mortgage pursuant to the provisions hereof.
c. "Note" means a promissory note from Grantor to Lender in the principal
amount of $1,700,000 dated July 16, 2003, a promissory note from Grantor to
Lender in the principal amount of $750,000 dated March 23, 2001; and a
promissory note from Grantor to Lender in the principal amount of
$3,000,000 dated April 14, 2003.
d. "Property" means the premises situated in the State of Michigan described
in Exhibit "A" attached hereto, together with (1) all the estate, title,
interest and rights of Grantor in such premises and all buildings and
improvements of every kind and description now or hereafter placed on such
premises, (2) all of the rents, profits, and leases of such premises, and
the tenements, hereditaments, easements, privileges and appurtenances with
respect to such premises, including heretofore or hereafter vacated alleys
and streets abutting the premises, and (3) all goods (including furniture,
fixtures, equipment and appliances), accounts and general intangibles now
owned or hereafter acquired by Grantor and now or at any time hereafter
related to, affixed to, attached to, placed upon or used in any way in
connection with the use, occupancy or operation of such premises,
including, but not limited to, all lighting, heating, cooling, ventilating,
air conditioning, plumbing, sprinkling, communicating and electrical
systems, and machinery, appliances, fixtures and equipment pertaining
thereto, awnings, stoves, refrigerators, dishwashers, disposals,
incinerators, carpeting and drapes, and all other furniture, fixtures,
equipment and appliances of every type, nature and description.
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2. Grant of Mortgage. Grantor does hereby MORTGAGE and WARRANT to the Lender
and its successors and assigns forever the Property and grants to the
Lender and its successors and assigns a continuing security interest in the
Property to secure the timely repayment and performance of the Liabilities,
to have and to hold the Property, with all of the tenements, hereditaments,
easements, appurtenances and other rights and privileges thereunto
belonging or in any manner now or hereafter appertaining thereto, for the
use and benefit of the Lender upon the conditions hereinafter set forth.
3. Future Advances. Upon request of Grantor, the Lender at the Lender's option
prior to release of this Mortgage, may make future advances to Grantor.
Such future advances, with interest thereon, shall be secured by this
Mortgage when evidenced by promissory notes stating that they are secured
hereby.
4. Covenant to Pay Liabilities. Grantor shall promptly pay and perform all
Liabilities for which it is liable or obligated in accordance with the
terms thereof. Grantor acknowledges and agrees that this Mortgage shall not
be extinguished and the priority of this Mortgage shall not be altered in
any way until a Mortgage discharge has been executed by the Lender and
recorded in the proper county, even if the Liabilities are reduced to a
balance of zero at any time or from time to time.
5. Covenant of Title. At the time of the execution and delivery of this
Mortgage, Grantor is the owner of the Property in fee simple, free of all
easements, liens and encumbrances whatever (other than those easements of
record as of the date hereof, the rights of the public in any part of the
Property used or taken for road purposes, a mortgage dated September 30,
2002, in favor of Chelsea State Bank (the "First Mortgage"), and any other
mortgages, liens or encumbrances to which the Lender has consented in
writing), and will forever warrant and defend the same against any and all
other claims whatever, and the lien created hereby is and will be kept as a
valid lien upon the Property and every part thereof, subject only to the
foregoing exceptions.
6. Maintenance of Property. Grantor shall at all times preserve and maintain
the Property in good repair, working order and condition and shall make all
necessary improvements and repairs so the value and efficiency of the
Property is at all times maintained and Lender's security is not impaired.
Lender shall have the right to enter upon and inspect the Property at all
reasonable times and if, upon inspection of the Property, Lender determines
the Property or any part thereof requires repair, maintenance, or care of
any kind which the Grantor, after notice from Lender, fails to perform,
Lender may declare Grantor to be in default under this Mortgage and may, at
Lender's option, by its agent, enter, repair and care for the Property,
paying such amount therefor as the Lender deems appropriate, and all costs
incurred by Lender shall be added to the Liabilities secured by this
Mortgage.
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7. Payment of Taxes, Liens and Insurance. Grantor shall pay when due all
taxes, assessments, and governmental charges levied upon the Property and
all claims, liens, encumbrances, levies, judgments and charges which are at
any time levied, recorded, placed upon, or assessed against the Property,
and shall promptly deliver to Lender receipts evidencing such payment;
provided, however, that Grantor will not be required to pay any tax,
assessment, governmental charge, claim, lien, encumbrance, levy, judgment
or charge if Grantor is in good faith contesting the validity thereof and
has provided for payment of the entire amount of any such contested tax,
assessment, governmental charge, claim, lien, encumbrance, levy, judgment
or charge in a cash reserve deposited with Lender or in such other manner
as is satisfactory to Lender.
8. Insurance. Until the Liabilities are fully satisfied, Grantor will keep the
Property continuously insured against loss by fire, windstorm and other
hazards, casualties and contingencies, including vandalism and malicious
mischief, in such amounts and for such periods as may be required by the
Lender. Grantor shall pay promptly when due all premiums for such insurance
and deliver to the Lender, upon request, receipts showing such payment. All
insurance shall be carried in companies approved by the Lender and the
policies and renewals thereof shall be held by, and pledged to, the Lender
(unless the Lender shall direct or permit otherwise) as additional security
hereunder, and shall have attached thereto a mortgagee clause acceptable to
the Lender, making all loss or losses under such policies payable to the
Lender, its successors and assigns, as its or their interest may appear. In
the event of loss or damage to the Property, Grantor shall give immediate
notice in writing by mail to the Lender, who may make proof of loss if not
made promptly by Grantor.
In the event the amount of the loss is an amount equal to $100,000 or less,
the insurance proceeds shall be released to the Grantor, upon request by
the Grantor. Grantor shall be obligated to use such proceeds to restore or
repair the Property unless the Lender otherwise specifies in writing.
In the event the amount of the loss is greater than $100,000, each
insurance company concerned is hereby authorized and directed upon request
by the Lender, to make payment for such loss, to the extent of the
Liabilities, directly to the Lender instead of to Grantor and the Lender
jointly. Provided there has occurred no Event of Default hereunder nor any
event which with notice or the passage of time or both would become an
Event of Default hereunder and further provided that the Lender shall
reasonably determine that sufficient funds are available from insurance
proceeds and any funds to be provided by Grantor to repair or restore the
Property within a reasonable time and that such repair or restoration is
economically feasible, the Lender agrees, upon request by the Grantor, to
apply the insurance proceeds to repair or restore the Property, after
reimbursement of all costs and expenses of the Lender in collecting such
proceeds, subject to the following terms and conditions:
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a. The Lender shall retain all insurance proceeds in a non-interest bearing
escrow account to be disbursed to pay the costs of repair or restoration in
accordance with procedures reasonably established by the Lender.
b. All plans and specifications for repair or restoration shall be approved by
the Lender prior to the commencement of any repair or restoration.
c. All repair or restoration shall be done by or under the direction of
Grantor, shall be in accordance with the approved plans and specifications,
shall be in a workmanlike manner free from all defects, shall be in
compliance with all statutes, ordinances, rules and regulations applicable
thereto and shall be completed free of all construction liens except those
being contested in good faith by appropriate proceedings and with respect
to which Grantor shall have provided the Lender satisfactory security.
d. The Lender shall have the right, at Grantor's expense, to inspect all
repairs and restoration and, if the Lender reasonably determines that any
work or materials are not in conformity with the approved plans and
specifications or other requirements of sub-paragraph (c) above, to stop
the work and order replacement or correction thereof by Grantor.
e. The Lender shall not be obligated to make disbursements more frequently
than monthly and the remaining undisbursed proceeds shall always be
sufficient to meet the total estimated remaining costs to complete the
repair or restoration.
f. All insurance proceeds in excess of the amounts necessary to repair or
restore the Property may be applied, at the Lender's option, to the
Liabilities (without penalty for prepayment), to fulfill any other covenant
herein or any other obligation of Grantor to the Lender, or released to
Grantor. In the event all of the conditions to the use of the insurance
proceeds to repair or restore the Property which are outlined above are not
satisfied, the Lender, at its option, may apply the insurance proceeds or
any part thereof, first, toward reimbursement of all costs and expenses of
the Lender in collecting such proceeds, and then, to the Liabilities
(without any penalty for prepayment), to fulfill any other covenant herein
or any other obligation of Grantor to the Lender, or to the restoration or
repair of the Property. Application by the Lender of any insurance proceeds
to the Liabilities shall not excuse, extend or reduce the regularly
scheduled payments due thereunder. In the event of foreclosure of this
Mortgage or other transfer of title to the Property in extinguishment of
the Liabilities, all right, title and interest of Grantor in and to any
insurance policies then in force shall pass to the purchaser or grantee and
Grantor hereby appoints the Lender its attorney-in-fact, in Grantor's name,
to assign and transfer all such policies and proceeds to such purchaser or
grantee.
9. Eminent Domain. In the event the entire Property is taken under the power
of eminent domain, the entire award or payment in lieu of condemnation, to
the full extent of the Liabilities, shall be paid to the Lender. The Lender
shall apply such award or payment, first, toward reimbursement of all of
the Lender's costs and expenses incurred in connection with collecting such
award or payment, and then, at the Lender's option, to the Liabilities
(without any penalty for prepayment), to fulfill any other covenant herein
or to any other obligation of Grantor to the Lender. In the event of a
partial taking of the Property under the power of eminent domain, the
entire award or payment in lieu of condemnation, to the full extent of the
Liabilities, shall be paid over to the Lender. Provided there has occurred
no Event of Default hereunder, nor any event which with notice or the
passage of time or both would become an Event of Default hereunder, and the
Lender shall reasonably determine that sufficient funds are available from
the award or payment and any funds to be provided by Grantor to repair or
restore the remaining portion of the Property within a reasonable time and
that such repair or restoration is economically feasible, the Lender
agrees, upon request by the Grantor, to apply the award or payment to
repair or restore the remaining portion of the Property, after
reimbursement of all costs and expenses of the Lender in collecting the
award or payment, subject to the following terms and conditions:
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a. The Lender shall retain the award or payment in a non-interest bearing
escrow account to be disbursed to pay the costs of repair or restoration in
accordance with procedures reasonably established by the Lender.
b. All plans and specifications for repair or restoration shall be approved by
the Lender prior to the commencement of any repair or restoration.
c. All repair or restoration shall be done by or under the direction of
Grantor, shall be in accordance with the approved plans and specifications,
shall be in a workmanlike manner free from all defects, shall be in
compliance with all statutes, ordinances, rules and regulations applicable
thereto and shall be completed free of all construction liens except those
being contested in good faith by appropriate proceedings and with respect
to which Grantor shall have provided the Lender satisfactory security.
d. The Lender shall have the right, at Grantor's expense, to inspect all
repairs and restoration and, if the Lender reasonably determines that any
work or materials are not in conformity with the approved plans and
specifications or other requirements of sub-paragraph (c) above, to stop
the work and order replacement or correction thereof by Grantor.
e. The Lender shall not be obligated to make disbursements more frequently
than monthly and the remaining undisbursed proceeds shall always be
sufficient to meet the total estimated remaining costs to complete the
repair or restoration.
f. All proceeds of the award or payment in excess of the amounts necessary to
repair or restore the Property may be applied, at the Lender's option, to
the Liabilities (without penalty for prepayment), to fulfill any other
covenant herein or any other obligation of Grantor to the Lender, or
released to Grantor.
In the event all of the conditions to the use of the award or payment to
repair or restore the Property which are outlined above are not satisfied,
the Lender, at its option, may apply the award or payment or any part
thereof, first, toward reimbursement of all costs and expenses of the
Lender in collecting such award or payment, and then, to the Liabilities
(without any penalty for prepayment), to fulfill any other covenant herein
or any other obligation of Grantor to the Lender, or to the restoration or
repair of the Property. Application by the Lender of any condemnation award
or payment or portion thereof to the Liabilities shall not excuse, extend
or reduce the regularly scheduled payments due thereunder. The Lender is
hereby empowered in the name of Grantor to receive, and give acquittance
for, any such award or payment, whether it is joint or several; provided,
however, that the Lender shall not be held responsible for failure to
collect any such award or payment, regardless of the cause of such failure.
10. Removal of Improvements. Except for replacement, maintenance, and
relocation in the ordinary course of business, Grantor shall not remove
from the Property any improvement, accessions, fixtures, machinery, or
equipment pertaining to or forming a part of the Property without Lender's
prior written consent. All replacements shall be with improvements,
fixtures, machinery and equipment of the same or better quality than those
replaced.
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11. Lender's Right to Make Expenditures. Should an Event of Default occur
hereunder as a result of Grantor's failure to pay any taxes or assessments
or procure and maintain insurance or make necessary repairs to the
Property, the Lender may pay such taxes and assessments, effect such
insurance and make such repairs, and the monies so paid by it shall be a
further lien on the Property, payable forthwith, with interest at the
highest rate applicable to the Liabilities. The Lender may make advances
without curing the Event of Default and without waiving the Lender's right
of foreclosure or any other right or remedy of the Lender under this
Mortgage. The exercise of the right to make advances pursuant to this
paragraph shall be optional with the Lender and not obligatory and the
Lender shall not be liable in any case for failure to exercise such right
or for failure to continue exercising such right once having exercised it.
12. Compliance with Law. Grantor will comply promptly with all laws,
ordinances, regulations and orders of all public authorities having
jurisdiction over the Property relating to the use, occupancy and
maintenance thereof, and shall upon request promptly submit to the Lender
evidence of such compliance. Nothing herein shall be deemed to prohibit
Grantor from contesting the enforceability or applicability of any law,
ordinance, regulation or order; provided, however, that the Lender, in its
sole discretion, may require that Grantor comply with any such law,
ordinance, regulation or order during the pendency of any such contest and
all appeals therefrom. Grantor will not permit the Property or any portion
thereof to be used for any unlawful purpose.
13. Environmental Warranties, Compliance, and Indemnification. Grantor
represents and warrants to Lender that neither Grantor nor any prior
lessee, owner or operator of the Property has violated any Environmental
Laws (as subsequently defined) which concern or affect the Property or any
part thereof. Grantor agrees to at all times strictly observe and promptly
comply with all Environmental Laws. Grantor agrees to notify the Lender,
not later than ten (10) after Grantor's receipt, of any letter, notice,
summons, complaint, citation, investigation, or other communication issued
by or on behalf of any governmental agency or department, or private
person, regarding any complaint or alleged violation of any Environmental
Law concerning the Property. Grantor agrees to indemnify and hold the
Lender harmless from any and all losses, costs, suits, harm, liability, and
damages of any and every kind, including reasonable attorney fees, which
result from or are related to any violation(s) by Grantor or Grantor's
predecessors in title to the Property of any Environmental Laws, and agrees
that such indemnity shall survive the foreclosure or discharge of this
Mortgage and shall continue so long as Lender has any interest in or
liability for the Property. Grantor agrees to allow the Lender or its agent
access to the Property to confirm Grantor's compliance with all
Environmental Laws and Lender may at any time, at Grantor's sole cost and
expense, hire, or require Grantor to hire, an environmental consultant to
inspect, test and audit the Property and advise the Lender concerning
Grantor's compliance with Environmental Laws. Any costs paid by Lender for
violations of Environmental Laws or to hire an environmental consultant
shall be added to the Liabilities secured by this Mortgage. If Grantor
shall lease the Property or any part thereof, Grantor agrees to
specifically provide in any such lease(s) that Lender or its agent shall
have access to the leased premises to insure the lessee's full compliance
with all Environmental Laws and any lessee violation of any Environmental
Law shall constitute a violation of Grantor's environmental warranties and
agreements under this Mortgage. The term "Environmental Laws" shall mean
all laws, regulations and rules of the United States of America, State of
Michigan, local authorities and their respective agencies and departments
which pertain to the environment including, but without limitation, the
Clean Air Act (42 USC 7401 et seq.), Clean Water Act (33 USC 1251 et seq.),
Resource Conservation and Recovery Act of 1976 (42 USC 6901 et seq.),
Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 USC 9601 et seq.), Hazardous Materials Transportation Act (49 USC
1801 et seq.), Solid Waste Disposal Act (42 USC 6901 et seq.), Toxic
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Substances Control Act (15 USC 2601 et seq.), and the Michigan Natural
Resources and Environmental Protection Act (MCL 324.101 et seq.), as each
of such laws have been or are hereafter amended, together with all rules
and regulations promulgated by the U.S. Environmental Protection Agency or
the Michigan Departments of Natural Resources or of Environmental Quality,
and all additional environmental laws, rules and regulations in effect on
the date of this Mortgage and as are hereafter enacted.
14. Assignment of Rents and Leases. As additional security for the Liabilities
and performance of the covenants and agreements set forth herein, pursuant
to Michigan Compiled Laws 565.81 et seq. and Michigan Compiled Laws 554.231
et seq., each as amended, Grantor hereby assigns to the Lender, and grants
Lender a security interest in, any oil and gas located in, on or under the
Property, any and all Leases of the Property, and all rents, issues, income
and profits derived from the use of the Property or any portion thereof,
whether due or to become due. These assignments shall run with the land and
shall be good and valid against Grantor and all persons claiming by, under,
or through Grantor from the date of recording of this Mortgage and shall
continue to be operative during foreclosure or any other proceedings taken
to enforce this Mortgage. If any foreclosure sale results in a deficiency,
the assignments shall continue as security during the foreclosure
redemption period. Grantor covenants with and warrants to Lender that as of
the date of this Mortgage:
a. Each Lease is in full force and effect and there are no defaults existing
thereunder; and
b. Grantor has not, except as provided in the First Mortgage: (1) executed or
granted any prior assignment, encumbrance, or security interest in any
Lease or the rentals thereunder; (2) performed any acts or executed any
other instruments or agreements which would limit or prevent Lender from
obtaining the benefit of and exercising its rights conferred by this
Mortgage; or (3) executed or granted any modification of any Lease, either
orally or in writing;
and, as of the date of this Mortgage and for so long as any of the
Liabilities remains unpaid or unperformed:
c. Grantor shall promptly inform Lender of, assign, and deliver, any
subsequent Lease of the Property or any part thereof, and make, execute and
deliver to the Lender, upon demand, any and all documents, agreements and
instruments as may, in Lender's opinion, be necessary to protect the
Lender's rights under this Mortgage; provided, that Grantor's failure to do
so will not impair Lender's interest in or rights with respect to any
subsequent Lease, nor in any way affect the applicability of this Mortgage
to such Lease and the unpaid rents due or to become due thereunder; and
d. Grantor shall not, without the prior written consent of Lender: (1) Cancel
or accept surrender of a Lease; (2) modify or alter a Lease in any way,
either orally or in writing; (3) reduce the amount of or postpone payment
of any Lease rents; (4) consent to any assignment of the lessee's interest
in a Lease, or any subletting thereunder; (5) collect or accept payment of
rents under a Lease for more than one (1) month in advance; (6) make any
other assignment, pledge, encumbrance, or other disposition of a Lease or
any Lease rents, issues, income or profits. Any of the above acts, if done
without the Lender's prior written consent, shall be null and void; and
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e. Grantor shall perform and discharge each and every obligation, covenant,
and agreement required to be performed by the landlord under any Lease and
should Grantor fail to do so the Lender, at Lender's sole option and
without releasing Grantor from any such obligation, may make or do the same
in such manner and to such extent as the Lender deems necessary to protect
its rights and interests under this Mortgage. Any and all costs, expenses
and sums paid by the Lender in performing under any Lease, including
reasonable attorney fees, shall be added to the Liabilities secured by this
Mortgage. This assignment of rents is given as collateral security only and
will not be construed as obligating Lender to perform any of the covenants
or undertakings required to be performed by Grantor under any Lease.
15. Assignment of Contracts and Agreements. Grantor hereby assigns to the
Lender, as further security for the Liabilities, Grantor's interest in all
agreements, contracts (including contracts for the lease or sale of the
Property or any portion thereof), licenses and permits affecting the
Property. Such assignment shall not be construed as a consent by the Lender
to any agreement, contract, license, or permit so assigned, or to impose
upon the Lender any obligations with respect thereto. Grantor shall not
cancel or amend any of the agreements, contracts, licenses and permits
hereby assigned (nor permit any of the same to terminate if they are
necessary or desirable for the operation of the Property), except in the
ordinary course of business, without first obtaining, on each occasion, the
written approval of the Lender. This paragraph shall not be applicable to
any agreement, contract, license or permit that terminates if it is
assigned without the consent of any party thereto (other than Grantor) or
issuer thereof, unless such consent has been obtained or this assignment is
ratified by such party or issuer; nor shall this paragraph be construed as
a present assignment of any agreement, contract, license or permit that
Grantor is required by law to hold in order to operate the Property for the
purposes intended.
16. Due on Sale. The Lender in making the loan secured by this Mortgage is
relying upon the integrity of Grantor and its undertaking to maintain the
Property. If Grantor should (a) sell, transfer, convey or assign the
Property, or any right, title or interest therein, whether legal or
equitable, whether voluntarily or involuntarily, by outright sale, deed,
installment sale contract, land contract, contract for deed, leasehold
interest (other than leases to tenants) with a term greater than three
years, lease option contract or any other method of conveyance of real
property interests; or (b) cause, permit or suffer any change in control or
management of the Grantor; or (c) cause, permit or suffer any change in the
current management and control of the Property or in the degree of control
Grantor exercises or is empowered to exercise over the decisions affecting
the ownership and operation of the Property as of the date hereof, then,
and in any such event, the Lender shall have the right at its sole option
thereafter to declare all sums secured hereby and then unpaid to be due and
payable forthwith although the period limited for the payment thereof shall
not then have expired, anything contained to the contrary hereinbefore
notwithstanding, and thereupon to exercise all of its rights and remedies
under this Mortgage. If the ownership of the Property, or any part thereof,
becomes vested in a person other than the Grantor (with or without the
Lender's consent), the Lender may deal with such successor or successors in
interest with reference to this Mortgage, and the Liabilities, in the same
manner as with the Grantor, without in any manner vitiating, releasing or
discharging the Grantor's liability hereunder or upon the Liabilities. No
sale of the Property and no forbearance or extensions by the Lender of the
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time for payment of the Liabilities or the performance of the covenants and
agreements herein provided shall in any way operate to release, discharge,
modify, change or affect the lien of this Mortgage or the liability of
Grantor, if any, on the Liabilities or for the performance hereof, either
in whole or in part.
17. Secondary Financing. Grantor will not, without the prior written consent of
the Lender, mortgage or pledge the Property or any part thereof as security
for any other loan or obligation of Grantor. If any such mortgage or pledge
is entered into without the prior written consent of the Lender, the entire
Liabilities, may, at the option of the Lender, be declared immediately due
and payable without notice. Further, Grantor also shall pay any and all
other obligations, liabilities or debts which may become liens, security
interests, or encumbrances upon or charges against the Property for any
repairs or improvements that are now or may hereafter be made thereon, and
shall not, without the Lender's prior written consent, permit any lien,
security interest, encumbrance or charge of any kind to accrue and remain
outstanding against the Property or any part thereof, or any improvements
thereon, irrespective of whether such lien, security interest, encumbrance
or charge is junior to the lien of this Mortgage. Notwithstanding the
foregoing, if any personal property by way of additions, replacements or
substitutions is hereafter purchased and installed, affixed or placed by
Grantor on the Property under a security agreement, the lien or title of
which is superior to the lien created by this Mortgage, all the right,
title and interest of Grantor in and to any and all such personal property,
together with the benefit of any deposits or payments made thereon by
Grantor, shall nevertheless be and are hereby assigned to the Lender and
are covered by the lien of this Mortgage.
18. Waste. Grantor's failure, refusal or neglect to pay any taxes or
assessments levied against the Property or any insurance premiums due upon
policies of insurance covering the Property will constitute waste under
Michigan Compiled Laws 600.2927, and the Lender shall have a right to
appointment of a receiver of the Property and of the rents and income from
the Property, with such powers as the Court making such appointment
confers. Grantor hereby irrevocably consents to such appointment in such
event, and agrees that Lender's costs and expenses, including reasonable
attorney fees, incurred in such proceeding shall be added to the
Liabilities secured by this Mortgage. Payment by the Lender for and on
behalf of Grantor of any delinquent taxes, assessments, or insurance
premiums payable by Grantor under the terms of this Mortgage will not cure
the default herein described nor in any manner impair the Lender's right to
appointment of a receiver as set forth herein.
19. Remedies Upon Default. Immediately upon the occurrence of an event of
default under any of the Liabilities or any default in the performance of
any of the covenants, conditions and agreements contained in this Mortgage
(an "Event of Default"), the Lender may, in addition to and not in lieu of
or substitution for, all other rights and remedies provided by law:
a. Accelerate Liabilities. Without notice, except as expressly required by
law, declare the entire unpaid and outstanding principal balance of the
Liabilities, and all accrued interest, to be due and payable in full
forthwith, and at the Lender's option, to bring suit therefor and to take
any and all steps and institute any and all other proceedings that the
Lender deems necessary to enforce the Liabilities and to protect the lien
of this Mortgage.
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b. Advance Sums for Other Liens. Upon the occurrence of any Event of Default
arising out of the existence of any lien upon the Property, the Lender
shall have the right (without being obligated to do so or to continue to do
so), without notice to Grantor, to advance on and for the account of
Grantor such sums as the Lender in its sole discretion deems necessary to
cure such Event of Default or to induce the holder of any such lien to
forbear from exercising its rights thereunder. The repayment of all such
advances, with interest thereon at the highest rate applicable to the
Liabilities from the date of each such advance, shall be secured hereby and
shall be immediately due and payable without demand.
c. Mortgage Foreclosure. To foreclose this Mortgage and sell the Property at
public auction or venue pursuant to Michigan Compiled Laws 600.3201 et seq.
or judicially foreclose this Mortgage under the provisions of Michigan
Compiled Laws 600.3101 et seq., and Grantor agrees to pay all of Lender's
costs and expenses, including reasonable attorney fees, which shall be
added to the Liabilities secured by this Mortgage. At any foreclosure sale
held under the foregoing Michigan statutes, Grantor agrees that in its
foreclosure sale bid price the Lender shall be allowed to deduct from the
appraised value of the Property: (i) the unpaid balance of any mortgage or
other liens which have priority over the lien of this Mortgage; and (ii)
the sum of all unpaid property taxes and assessments and insurance premiums
due and to become due on the Property through the date upon which the
foreclosure redemption period shall expire. Any foreclosure sale may, at
the sole option of the Lender, be made en masse or in parcels, any law to
the contrary notwithstanding, and Grantor hereby knowingly, voluntarily and
intelligently waives any right to require any such foreclosure sale to be
made in parcels or any right to select which parcels shall be sold. The
proceeds of any foreclosure sale shall be applied, as the Lender elects, to
the payment of Lender's collection and other expenses, including reasonable
attorney fees, and/or payment of the Liabilities, with the surplus, if any,
to Grantor or Grantor's successor in interest. Commencement of proceedings
to foreclose this Mortgage in any manner authorized by law shall be deemed
an exercise of the Lender's option to accelerate the Liabilities. After the
date upon which the maturity of the Liabilities secured by this Mortgage
has been accelerated, Lender's acceptance of any amount(s) paid by Grantor
less than the full unpaid principal balance of the Liabilities plus accrued
interest, late charges and Lender's costs and expenses in this Mortgage
described, shall not waive the default or acceleration, but shall only be
credited upon the unpaid balance of the Liabilities unless the Lender
specifically agrees in writing to waive any such default and/or
acceleration.
d. This Mortgage contains a power of sale and upon default may be foreclosed
by advertisement. In a foreclosure by advertisement, no hearing is involved
and the only notice required is publication of a foreclosure notice in a
local newspaper and posting a copy of the notice upon the Property. If this
Mortgage is foreclosed by advertisement under the provisions of Michigan
Compiled Laws 600.3201 et seq., Grantor hereby knowingly, voluntarily, and
intelligently waives all rights under the Constitution and laws of the
State of Michigan and the Constitution and laws of the United States of
America to any notice or hearing in connection with a foreclosure by
advertisement except as set forth in the Michigan statute.
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e. Collection of Rents. Enter into peaceful possession of the Property and/or
to collect and receive all rents, issues, income and profits from the
Property, terminate any tenancy, maintain proceedings to recover rents or
possession of any of the Property from any tenant or trespasser, rent or
lease the Property or any portion thereof upon such terms as the Lender
deems best, and have the right to all oil and gas royalties and any other
income from the Property. Lender, in such order as Lender in its sole
discretion elects, may apply the proceeds of any rents, issues, profits and
income to: (i) preservation, maintenance or operation of the Property, (ii)
payment of taxes due on the Property; and (iii) payment of the Liabilities.
Grantor irrevocably consents and agrees that the lessee(s) under any Lease,
upon demand and notice from Lender of Grantor's default, shall be required
to pay all rents, issues, profits and income to Lender, without any
obligation upon such lessee(s) to determine the actual existence of any
default by Grantor. Lender may enter upon the Property or any part thereof,
by its officers, agents, or employees, for the collection of the rents,
issues and profits and for the operation and maintenance of the Property,
and Grantor hereby authorizes Lender in general to perform all acts
necessary for the operation and maintenance of the Property in the same
manner and to the same extent that the Grantor might so act. Such entry and
taking possession of the Property or any part thereof by Lender, may be
made by actual entry and possession or by written notice served personally
upon or sent by certified mail to the last owner of the Property appearing
on the records of the Lender, as the Lender elects, without further
authorization or notice.
In connection with the Lender's right to possession of the Property upon
the occurrence of an Event of Default, as specified in the foregoing
paragraph, Grantor acknowledges that it has been advised that there is a
significant body of case law in Michigan which purportedly provides that in
the absence of a showing of waste of a character sufficient to endanger the
value of the Property, or other special factors, a mortgagor is entitled to
remain in possession of the Property, and to enjoy the income, rents and
profits therefrom, during the pendency of foreclosure proceedings and until
the expiration of the redemption period, even if the mortgage documents
expressly provide to the contrary. Grantor further acknowledges that it has
been advised that the Lender recognizes the value of the security covered
hereby is inextricably intertwined with the effectiveness of the
management, maintenance and general operation of the Property, and that the
Lender would not make the loan secured hereby unless it could be assured
that it would have the right to take possession of the Property in order to
manage or to control management thereof, and to enjoy the income, rents and
profits therefrom, immediately upon the occurrence of an Event of Default
hereunder, notwithstanding that foreclosure proceedings may not have been
instituted, or are pending, or the redemption period may not have expired.
Accordingly, Grantor hereby knowingly, intelligently and voluntarily waives
all right to possession of the Property from and after the occurrence of an
Event of Default hereunder, upon demand for possession by the Lender, and
Grantor agrees not to assert any objection or defense to the Lender's
request or petition to a court for possession. The rights hereby conferred
upon the Lender have been agreed upon prior to the occurrence of an Event
of Default hereunder and the exercise by the Lender of any such rights
shall not be deemed to put the Lender in the status of a "mortgagee in
possession". Grantor acknowledges that this provision is material to this
transaction and that the Lender would not make the loan secured hereby but
for this paragraph.
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f. Title Reports. Procure mortgage foreclosure or title reports. Grantor
covenants to pay forthwith to the Lender all sums paid for such purposes
with interest at the highest rate applicable to the Liabilities, and such
sums and the interest thereon shall constitute a further lien upon the
Property.
g. Appraisals and Audits. Procure appraisals, environmental audits and such
other investigations or analyses of the Property as the Lender may
determine to be required by regulatory or accounting rules, procedures or
practices or to otherwise be prudent or necessary. Grantor shall grant the
Lender free and unrestricted access to the Property for such purposes.
Grantor covenants to pay forthwith to the Lender all sums paid for such
purposes with interest at the highest rate applicable to the Liabilities,
and such sums and the interest thereon shall constitute a further lien upon
the Property.
20. Costs of Legal Proceedings. The Grantor shall pay the Lender a reasonable
attorney's fee in addition to all other legal costs in case the Lender
shall become a party, either as plaintiff or defendant, to any legal
proceedings in relation to the Property or the lien created hereby, which
sums shall be secured hereby and shall be payable forthwith at the highest
rate applicable to the Liabilities.
21. Books and Records. The Grantor covenants and agrees to furnish to the
Lender promptly certificates of occupancy and such other books, records,
documents, information and statements pertaining to the Grantor, the
Property and its operations and any guarantor(s) as the Lender may request.
All books, records and other information provided by Grantor hereunder
shall be in a form that is acceptable to the Lender and all costs of
providing the same shall be borne entirely by Grantor.
22. Security Agreement and Financing Statements. Grantor shall execute,
acknowledge and deliver any and all such further conveyances, documents,
mortgages and assurances as the Lender may reasonably require for
accomplishing the purposes hereof, including financing statements required
by the Lender to protect its interest under the provisions of the Michigan
Uniform Commercial Code, as amended, forthwith upon the written request of
the Lender. Upon any failure of Grantor to do so, the Lender may execute,
record, file, re-record and refile any and all such documents for and in
the name of Grantor, and Grantor hereby irrevocably appoints the Lender as
agent and attorney-in-fact of Grantor for the foregoing purposes. This
instrument is intended by the parties to be, and shall be construed as, a
security agreement, as that term is defined and used in Article Nine of the
Michigan Uniform Commercial Code, as amended, and shall grant to the Lender
a security interest in that portion of the Property with respect to which a
security interest can be granted under Article Nine of the Michigan Uniform
Commercial Code, as amended, which security interest shall include a
security interest in all personalty owned by Grantor, whether now owned or
subsequently acquired, which is or in the future may be physically located
on or affixed to the Property described in Exhibit "A" hereto, regardless
of whether such personalty consists of fixtures under Michigan law, a
security interest in the proceeds and products of the proceeds of all
insurance policies now or hereafter covering all or any part of such
collateral. For purposes of Article Nine of the Michigan Uniform Commercial
Code, (a) Grantor herein is the "debtor", (b) the Lender herein is the
"secured party", (c) information concerning the security interest created
hereby may be obtained from the Lender at its address set forth on page 1
hereof, and (d) Grantor's mailing address is that set forth on page 1
hereof.
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23. Non-Lender Liens, Insolvency Proceedings. If any non-Lender mortgage
foreclosure proceeding or any Federal, State or local tax lien, seizure,
levy, forfeiture, or any other lien or proceeding shall be instituted,
recorded, or filed against the Property which is not discontinued, reserved
for in cash in an amount and manner satisfactory to Lender, or bonded by a
company satisfactory to Lender within thirty (30) days after initiation,
recording or filing, or if any insolvency or receivership proceedings,
either voluntary or involuntary, are instituted by or against Grantor for
the liquidation or rehabilitation of Grantor's assets and affairs, or if
any criminal proceedings are initiated wherein forfeiture of the Property
is a potential penalty, the Lender may, at its option and without notice,
declare the entire Liabilities to be immediately due and payable and may
institute all such proceedings, including foreclosure of this Mortgage, as
the Lender deems necessary to protect its interest in the Property.
24. First Mortgage. Grantor expressly covenants and agrees that Grantor shall
not borrow any additional sum nor incur any additional indebtedness or
other obligation secured by the First Mortgage, shall promptly pay the
First Mortgage indebtedness in accordance with the terms of the note or
obligation secured by the First Mortgage, shall fully and promptly keep and
perform all of the terms, conditions, and covenants of the First Mortgage,
and other agreements pertaining thereto, and any default by Grantor
thereunder shall constitute a default by Grantor under this Mortgage. The
Lender may, at Lender's sole option but without obligation to do so, cure
any default by Grantor in any indebtedness or other agreement secured by
the First Mortgage, as the Lender deems necessary to protect Lender's
mortgage lien, assignments and security interests under this Mortgage, and
all moneys advanced by Lender and all costs incurred in effecting any such
cure, including reasonable attorney fees, shall be added to the Liabilities
secured by this Mortgage. Grantor hereby consents and agrees that Lender
may contact the holder of the First Mortgage and any or other lienor at any
time to obtain the payment status, unpaid balance, copies of any documents
and agreements pertaining to Grantor or the Property, and such other
information as Lender deems advisable.
25. Binding Effect. Until this Mortgage is discharged in full, all of the
covenants and conditions hereof shall run with the land and shall be
binding upon the successors and assigns of Grantor, and shall inure to the
benefit of the successors and assigns of the Lender. Any reference herein
to "Grantor" or the "Lender" shall include their respective successors and
assigns.
26. Notices. All notices, demands and requests required or permitted to be
given to Grantor hereunder or by law shall be deemed delivered when
deposited in the United States mail, with full postage prepaid thereon,
addressed to Grantor at the last address of Grantor on the records of the
Lender.
27. No Waiver. No waiver by the Lender of any right or remedy granted hereunder
shall affect or extend to any other right or remedy of the Lender
hereunder, nor affect the subsequent exercise of the same right or remedy
by the Lender for any further or subsequent Event of Default by Grantor
hereunder, and all such rights and remedies of the Lender hereunder are
cumulative. Time is of the essence.
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28. Severability. If any provision(s) hereof are in conflict with any statute
or rule of law of the State of Michigan or are otherwise unenforceable for
any reason whatever, then such provision(s) shall be deemed null and void
to the extent of such conflict or unenforceability, but shall be deemed
separable from and shall not invalidate any other provisions of this
Mortgage.
29. Pronouns. If more than one person joins in the execution hereof, or is of
the feminine sex, or a corporation, the pronoun and relative words herein
used shall be read as if in plural, feminine or neuter, respectively.
IN WITNESS WHEREOF, this Mortgage was executed and delivered by the undersigned
on the date stated in the first paragraph above.
Grantor:
NEMATRON CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Its:
President
STATE OF MICHIGAN
COUNTY OF WASHTENAW
The foregoing instrument was acknowledged before me on October 15, 2003 by
Xxxxxxx X. Xxxxxx, who is the President of NEMATRON CORPORATION, a Michigan
corporation, on behalf of the corporation.
/s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------
Notary Public, Washtenaw County, MI
My commission expires: October 15, 2005
----------------
DRAFTED BY: WHEN RECORDED RETURN TO:
Xxxxxxx X. Xxxxx, Esq. Xxxxxxx X. Xxxxx, Esq.
Xxxxx Xxxxxxxx Xxxxxxxxxx P.L.C. Xxxxx Xxxxxxxx Xxxxxxxxxx P.L.C.
0000 Xxxxxxx Xxxxxx Xxxxxxxxx 0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
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EXHIBIT A
Land in Scio Township, County of Washtenaw, of Michigan, described as:
COMMENCING AT THE SOUTH 1/4 CORNER OF SECTION 21, TOWN 2 SOUTH, RANGE 5 EAST,
SCIO TOWNSHIP, WASHTENAW COUNTY, MICHIGAN, THENCE NORTH 00 DEGREES 14 MINUTES 00
SECONDS WEST 1322.45 FEET ALONG THE NORTH AND SOUTH 1/4 LINE OF SAID SECTION;
THENCE NORTH 56 DEGREES 08 MINUTES 00 SECONDS EAST 219.04 FEET TO THE POINT OF
BEGINNING; THENCE CONTINUING NORTH 56 DEGREES 08 MINUTES 00 SECONDS EAST 103.69
FEET, THENCE NORTH 39 DEGREES 59 MINUTES 50 SECONDS EAST 31.08 FEET ALONG THE
CENTER LINE OF HONEY CREEK; THENCE SOUTH 78 DEGREES 54 MINUTES 40 SECONDS EAST
661.22 FEET; THENCE SOUTH 13 DEGREES 42 MINUTES 20 SECONDS WEST 218.54 FEET
ALONG THE WESTERLY RIGHT-OF-WAY LINE OF XXXXXXX INDUSTRIAL DRIVE; THENCE ALONG
THE NORTHERLY RIGHT-OF-WAY LINE OF XXXXXXX INDUSTRIAL COURT WESTERLY 461.67 FEET
ALONG THE ARC OF A 495.28 FOOT RADIUS CIRCULAR CURVE TO THE LEFT THROUGH A
CENTRAL ANGLE OF 53 DEGREES 24 MINUTES 25 SECONDS HAVING A CHORD WHICH BEARS
SOUTH 73 DEGREES 10 MINUTES 55 SECONDS WEST 445.13 FEET; THENCE NORTH 35 DEGREES
37 MINUTES 15 SECONDS WEST 475.71 FEET TO THE POINT OF BEGINNING, BEING PART OF
THE WEST HALF OF THE SOUTHEAST QUARTER, SECTION 21, TOWN 2 SOUTH, RANGE 0 XXXX,
XXXX XXXXXXXX, XXXXXXXXX XXXXXX, XXXXXXXX.
15
