REAL ESTATE MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
FOR PURPOSES OF THE SECURITY AGREEMENT
CONTAINED IN THIS INSTRUMENT,
THE "SECURED PARTY" AND THE "DEBTOR" AND THEIR RESPECTIVE
ADDRESSES ARE AS FOLLOWS:
SECURED PARTY: Walsh Greenwood & Co.
One East Putnam Avenue
Greenwich, Connecticut 06830
DEBTOR: The Shirt Shed, Inc.
c/o Signal Apparel Company, Inc.
P.O. Box 4296
Manufacturer's Road
Chattanooga,TN 37405
THE ADDRESS OF THE SECURED PARTY SHOWN ABOVE IS THE ADDRESS
AT WHICH INFORMATION CONCERNING THE SECURED PARTY'S SECURITY
INTEREST MAY BE OBTAINED.
THIS INDENTURE WITNESSETH, THAT THE SHIRT SHED, INC.
("MORTGAGOR") MORTGAGES AND WARRANTS TO
WALSH GREENWOOD & CO.
a New York limited partnership ("MORTGAGEE"), the real estate
located in Wabash County, Indiana which has a common address of
570 South Miami Street, Wabash, Wabash County, Indiana 46992 and
which is more particularly described in EXHIBIT A, attached
hereto and incorporated herein ("REAL ESTATE"),
TOGETHER WITH all tenements, hereditaments, rights, privileges,
interests, easements and appurtenances belonging to or in any way
appertaining to such Real Estate, and all rents, issues, income
and profits thereof, and all buildings and improvements now or
hereafter situated on such Real Estate and all fixtures and
equipment now or hereafter attached to, situated on or used in
the operation of the Real Estate and owned by Mortgagor
including, but not in limitation of the preceding, all personal
property of every kind and nature whatsoever now or hereafter
owned by Mortgagor and located in, on or about, or used in
connection with the Real Estate, whether physically attached to
the Real Estate or not (hereinafter collectively, with the Real
Estate, referred to as the "MORTGAGED PREMISES"), and it is
agreed that all similar fixtures and equipment hereafter placed
on such Mortgaged Premises by the Mortgagor, and owned by
Mortgagor, its successors or assigns, including all replacements
or substitutions therefor, shall be considered as constituting
part of such Mortgaged Premises, all to the use and benefit of
Mortgagee, its successors and assigns, and Mortgagor transfers
and grants to Mortgagee a security interest in all such fixtures
and equipment
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now or hereafter owned by Mortgagor and located on
or at the Mortgaged Premises and all personal property of
Mortgagor which is described in Section 13 herein (hereinafter
collectively referred to as the "CHATTEL PROPERTY").
MORTGAGOR HEREBY COVENANTS AND AGREES AS FOLLOWS:
1. SECURITY. This Mortgage is given as a security for the
performance and observance of the covenants and agreements herein
contained ("OBLIGATIONS"), in connection with the indebtedness
owing from Mortgagor to Mortgagee pursuant to that certain Credit
Agreement dated as of March 31, 1995 among Signal Apparel
Company, Inc., American Marketing Works, Inc., Mortgagor and
Mortgagee (the "CREDIT AGREEMENT"), which are secured hereby,
including, without limitation, such Obligations arising under (i)
the Credit Agreement and that certain Term Promissory Note dated
March 31, 1995 (the "NOTE") in the original principal amount
of Fifteen Million and No/100 Dollars from Mortgagor to Mortgagee
and (ii) all future advances pursuant thereto up to a maximum
amount of Fifteen Million and No/100 Dollars ($15,000,000.00)
(provided that nothing herein shall obligate Mortgagee to make
any such future advances). All of the Obligations are secured as
they now exist and as they may be revised or amended by any
amendment to the Credit Agreement, the Note or any other
agreement executed in connection therewith or this Mortgage.
This Mortgage shall also secure the prompt repayment of any and
all advances for expenses which shall be paid by Mortgagee with
respect to the Mortgaged Premises, any interest and late charges
due and payable under this Mortgage. For purposes of this
Mortgage "LOAN DOCUMENTS" mean the Credit Agreement, the Note and
any other agreement between Mortgagee and either Mortgagor or
Signal Apparel Company, Inc. relating thereto.
2. SUBORDINATION. Any provisions of this Mortgage
notwithstanding, the lien and security interest granted Mortgagee
by Mortgagor hereunder shall in all respects be subject and
subordinate to that certain Mortgage granted by Mortgagor to BNY
Financial Corporation ("BNY") dated July 29, 1994 and recorded in
Wabash County, Indiana at Book and Page (the "BNY MORTGAGE")
and to the terms of a certain Intercreditor Agreement among
Mortgagor, Mortgagee, Signal Apparel Company, Inc., American
Marketing Works, Inc., BNY and Greyrock Capital Group, Inc.
("GREYROCK"), dated March 31, 1995 (the "INTERCREDITOR
AGREEMENT").
3. PROMISE TO PAY. The Mortgagor promises to pay the
principal and all installments of the principal of and interest
on the indebtedness and the Obligations secured hereby as and
when the same respectively become due, as provided in this
Mortgage, all without relief from valuation and appraisement laws
and with reasonable attorneys' fees and other costs of
collection.
4. TITLE TO MORTGAGED PREMISES AND LIEN OF MORTGAGE.
Mortgagor is the owner in fee simple of the Mortgaged Premises
and has full power to
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mortgage the same. Mortgagor has good, marketable and valid
title to the Chattel Property free and clear
of all security interests and encumbrances, other than the BNY
Mortgage to which this Mortgage is subordinate in all respects,
and has full power to grant a security interest in the same. The
Mortgaged Premises are free and clear of any and all liens and
encumbrances, other than the BNY Mortgage, use restrictions of
record, zoning ordinances, rights-of-way and easements of record,
and the lien of current taxes and assessments not delinquent.
Mortgagor will make any further assurances of title that
Mortgagee may require and will warrant and defend the Mortgaged
Premises and the Chattel Property against all adverse claims and
demands whatsoever. This Mortgage creates a continuing lien to
secure the full and final payment of all obligations under the
Credit Agreement and the performance of other obligations of
Mortgagor under this Mortgage and the Loan Documents executed by
Mortgagor in connection with the indebtedness secured hereby.
5. INSURANCE. Mortgagor will procure and maintain in
effect at all times Fire, Extended Coverage, Vandalism, Malicious
Mischief and other hazard insurance with respect to the Mortgaged
Premises and the Chattel Property and public liability insurance
with such insurance companies and in forms and amounts as are
acceptable to and approved by Mortgagee against loss or
destruction on account of fire, windstorm or other such hazards,
casualties and contingencies customarily insured against, and
injury to the person or property, including, without limiting the
generality thereof, business interruption insurance in an amount
equal to one (1) year's overhead and net profit, and such flood
and/or earthquake insurance as may be reasonably required by
Mortgagee. All insurance policies are to be held by and, to the
extent of its interests, for the benefit of and first payable in
case of loss to Mortgagee, and Mortgagor shall deliver to
Mortgagee a new policy as replacement for any expiring policy at
least thirty (30) days before the date of such expiration.
All such policies of insurance shall contain waiver of
subrogation clauses and shall have attached thereto the non-
contributory New York Standard Mortgagee clause or its equivalent
in favor of Mortgagee with cancellation only upon at least thirty
(30) days' prior written notice to Mortgagee. All amounts
recoverable under any policy are hereby assigned to Mortgagee
and, in the event of a loss, Mortgagor will give immediate notice
to Mortgagee, and Mortgagee may make proof of loss if not made
promptly by the Mortgagor. If an Event of Default exists at the
time of any loss, each insurance company concerned is hereby
authorized and directed to make payment for such loss directly to
Mortgagee rather than to Mortgagee and Mortgagor jointly, and the
amount collected may, at the option of Mortgagee, be used in any
one or more of the following ways in a manner consistent with the
requirements of the Credit Agreement: (a) applied upon the
indebtedness secured hereby, whether or not such indebtedness is
then due and payable, (b) used to fulfill any of the covenants
contained herein as Mortgagee may determine, (c) used to replace
or restore the Mortgaged Premises or Chattel Property to the
condition satisfactory to Mortgagee, or (d) released to
Mortgagor. So long as no Event of Default exists at the
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time of any loss, any payments made by any insurance company for such
loss in an amount less than Seventy-Five Thousand and No/100
Dollars ($75,000.00) shall be paid to Mortgagee and Mortgagor
jointly to be used to replace or restore the Mortgaged Premises
or Chattel Property, and shall be released upon the joint
signature of Mortgagor and Mortgagee, and for any such loss which
equals or exceeds Seventy-Five Thousand and No/100 Dollars
($75,000.00), shall be paid to Mortgagee to be applied upon the
indebtedness secured hereby, whether or not such indebtedness is
then due and payable or, at Mortgagee's sole discretion, in such
other manner as Mortgagor may request in writing and is
acceptable to Mortgagee.
The Mortgagor will not do or suffer to be done or allow or permit
any tenant or other user of the Mortgaged Premises to do anything
which will increase the risk of fire or other hazard to the
Mortgaged Premises or any part thereof without first causing such
increased risk to be fully and adequately covered by insurance.
Insurance as above-described shall also be obtained on all
fixtures and personal property used by Mortgagor in connection
with the Real Estate to the extent that the value thereof is not
otherwise included in the insurance on the Real Estate. In the
event of foreclosure of this Mortgage, or other transfer of title
of the Mortgaged Premises in extinguishment of the Obligations
secured hereby, all right, title and interest of the Mortgagor in
and to any insurance policies then in force shall pass to the
purchaser or grantee of the Mortgaged Premises.
In the event that, prior to the extinguishment of the
Obligations, there exists any claim under any hazard insurance
policies which shall not have been paid and distributed in
accordance with the terms of this Mortgage, and any such claims
shall be paid after the extinguishment of the Obligations secured
hereby, and the foreclosure of this Mortgage, transfer of title
to the Mortgaged Premises, or extinguishment of the Obligations
secured hereby for an amount less than the total of the unpaid
principal balance together with accrued interest plus costs of
litigation, reasonable attorneys' fees, title insurance and all
other costs and expenses incurred by Mortgagee in any action
involving such extinguishment then, without limitation, that
portion of the payment in satisfaction of the claim which is
equal to the difference between the total amount of the
aforementioned amounts due Mortgagee and the amount in
extinguishment of the Obligations secured hereby received by
Mortgagee shall belong to and be the property of the Mortgagee
and shall be paid to the Mortgagee, and the Mortgagor hereby
assigns, transfers and sets over to the Mortgagee all of the
Mortgagor's right, title and interest in and to such sum. The
balance, if any, shall belong to Mortgagor. Notwithstanding the
above, Mortgagor shall retain an interest in the insurance
policies described above during any redemption period.
The provisions of this paragraph shall be subject in all
respects to BNY's rights and to Mortgagor's obligations under the
BNY Mortgage.
6. TAXES. Mortgagor will pay, before the same become
delinquent or any penalty for non-payment attaches thereto, all
taxes, assessments and
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charges of every nature now or hereafter
levied or assessed against or upon the Mortgaged Premises or the
Chattel Property, or any part thereof or upon the rents, issues,
income or profits therefrom, which by reason of non-payment could
become a lien prior or junior to this Mortgage, whether any or
all of the taxes, assessments or charges be levied directly or
indirectly or as excise taxes or as income taxes, and will submit
to Mortgagee such evidence of the timely payment of such taxes,
assessments and charges as Mortgagee may require, and Mortgagor
will also pay all taxes, assessments or charges which may be
levied on this Mortgage or the Obligations secured hereby,
excepting any state or federal income taxes or state intangibles
taxes assessed against Mortgagee: provided, however, that
Mortgagor shall be entitled to contest such taxes, assessments or
charges in good faith by appropriate proceedings and shall
diligently pursue the resolution thereof. In default thereof,
Mortgagee may pay such taxes, assessments and other similar
charges, of which payment, amount and validity thereof the
receipt of the proper officer shall be conclusive evidence, and
all sums so paid shall bear interest at the highest rate set
forth in the Loan Documents, shall be payable on demand and shall
be fully secured by this Mortgage.
7. CARE OF MORTGAGED PREMISES. Mortgagor will keep the
Mortgaged Premises and the Chattel Property in good order, repair
and condition at all times and will not commit waste or allow
waste to be committed against or on the Mortgaged Premises or the
Chattel Property. Mortgagor will not commit or allow the
commission of any violation of any law, regulation. ordinance or
contract affecting the Mortgaged Premises and will not commit or
allow any demolition, removal or material alteration of any of
the buildings or site improvements (including fixtures thereon)
constituting a part of the Mortgaged Premises and the Chattel
Property without the prior written consent of Mortgagee, which
Mortgagee may give or withhold at its discretion. Mortgagee
convenants in giving or withholding such consent with respect to
material alterations, Mortgagee will act in good faith in
accordance with its commercial lending practices then in effect.
Mortgagee shall at all times have free access to the Mortgaged
Premises for the purposes of inspection and the exercise of its
rights hereunder.
8. ADVANCEMENTS TO PROTECT SECURITY. If Mortgagor shall
neglect or refuse to keep the Mortgaged Premises and the Chattel
Property in good repair, to maintain and to pay the premiums for
insurance which may be required, or to pay and discharge all
taxes, assessments and charges of every nature assessed against
Mortgagor, the Mortgaged Premises or the Chattel Property, so as
to protect and preserve the security intended by this Mortgage,
all as provided for under the terms of this Mortgage, or to pay
all liens and encumbrances when due, whether such liens or
encumbrances are permitted by Mortgagee or not, or if Mortgagor
shall permit any lien or encumbrance on the Mortgaged Premises or
Chattel Property to be in default, Mortgagee may, at its option,
cause such repairs or replacements to be made, obtain such
insurance or pay such taxes, assessments and charges and pay such
liens and encumbrances and cure such defaults thereunder. Any
amounts paid as a result thereof, together with interest at the
per annum
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rate equal to the highest default rate of interest
under the Loan Documents from the date of payment, shall be
immediately due and payable by Mortgagor to Mortgagee, and until
paid shall be added to and become a part of the Obligations
evidenced by the Guaranty and secured hereby. Further, the same
may be collected by Mortgagee in any suit hereon or upon the
Obligations, or Mortgagee, by payment of any tax, assessment or
charge may, in its discretion, be subrogated to the rights of the
governmental subdivision levying such tax, assessment or charge.
No such advances shall be deemed to relieve Mortgagor from any
default hereunder or impair any rights or remedy of Mortgagee,
and the exercise by Mortgagee of the right to make advances shall
be optional with Mortgagee and not be obligatory and Mortgagee
shall not, in any case, be liable to Mortgagor for a failure to
exercise any such right. Any and all such advances shall,
without exception, be superior and prior to any other claims
against the Mortgaged Premises unless such claimant shall have
provided to Mortgagee written notice at least ten (10) business
days prior to such advancement by Mortgagee of such claimant's
intent that its claim or claims shall be superior to the claims
of Mortgagee with respect to Mortgagee's future advances.
9. CONDEMNATION. Subject to the terms of the BNY
Mortgage, all awards made by any public or quasi-public authority
for damages to the Mortgaged Premises by virtue of an exercise of
the right or threat of eminent domain by such authority,
including any award for a taking of title, possession or right of
access to a public way, or for any change of grade of streets
affecting the Mortgaged Premises, are hereby assigned to
Mortgagee and Mortgagee, at its option, is hereby authorized,
directed and empowered to collect and receive the proceeds of any
such award to the extent of the Obligations secured by or payable
under this Mortgage from the authorities making the same and to
give proper receipts and acquittances therefor. Mortgagee may
use such proceeds in any one or more of the following ways: (i)
it may apply the same or any part thereof to the last maturing
installments of the Obligations secured hereby or payable
hereunder, whether or not such Obligations are then due and
payable, (ii) use the same or any part thereof to replace or
restore the Mortgaged Premises to a condition satisfactory to
Mortgagee, or (iii) release the same to Mortgagor. Mortgagee is
authorized, at its option, to appear in and prosecute in its own
name any action or proceeding or to make any compromise or
settlement in connection with such taking or damage to the extent
of to the Mortgagee's interest and, with consent and joinder of
Mortgagor, to make any compromise or settlement in connection
with such taking or damage. Mortgagor will, upon request by
Mortgagee, execute and deliver any and all assignments and other
instruments sufficient for the purpose of assigning all proceeds
from such awards to Mortgagee free and clear and discharged of
any and all encumbrances or claims of any kind or nature
whatsoever.
10. COVENANT AGAINST SALE, LIENS AND OTHER SECURITY
INTERESTS, VIOLATION OF LAWS AND ENVIRONMENTAL MATTERS AND
INDEMNIFICATION.
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A. Mortgagor covenants and agrees not to sell or
transfer all or any part of the legal or equitable title or
ownership of the Mortgaged Premises in any manner, or to
lease or otherwise grant or permit the use of the
Mortgagee's Premises by any other persons (other than
employees, agents and licensees), without the prior written
consent of Mortgagee, which Mortgagee may give or withhold
at its discretion, unless in connection with such sale or
transfer the Mortgagee is repaid in full for all Obligations
under the Loan Documents. Mortgagee covenants such
discretion will be exercised in good faith in accordance
with its commercial lending practices then in effect.
Mortgagor agrees that Mortgagee shall have no liability for
withholding of such consent other than for bad faith or
willful disparate treatment of Mortgagor. In the event
Mortgagee elects to consent to such sale, Mortgagee may
require payment of a transfer fee equal to one percent
(1.0%) of the then outstanding principal balance of the
Obligations, and may, at its option, increase the highest
interest rate set forth in the Loan Documents to the then
prevailing interest rate charged by Mortgagee for mortgage
loans secured by property which are both similar to this
mortgage loan and these Mortgaged Premises and the credit
and other risks associated therewith and with such purchaser
or transferee. In the event of any such sale or transfer of
all or any part of the Mortgaged Premises, the purchaser or
transferee shall be deemed to have assumed and agreed to pay
the indebtedness and Obligations owing to Mortgagee
hereunder, whether or not an instrument evidencing such sale
or transfer expressly so provides, and the Mortgagee may
deal with such new owner or owners with reference to the
obligations secured hereby in the same manner as if the new
purchaser or transferee were the Mortgagor; provided,
however, that no such dealings shall in any way discharge
the Mortgagor's liability hereunder or upon the Obligations
secured hereby. In the event Mortgagee elects to consent to
any lease or use right, Mortgagor covenants to provide such
assignment of leases and rents and other documents as
Mortgagee may require, and to pay any applicable fees
imposed by Mortgagee in connection therewith.
B. Mortgagor hereby covenants that no lien of any
mechanic or materialman is attached, or at the time of
execution hereof may validly attach, to the Mortgaged
Premises or any part thereof; that Mortgagor will pay all
sums which if not paid may result in the acquisition or
creation of a lien prior to or of equal priority with or
junior to the lien of this Mortgage, or which may result in
conferring upon a tenant of any part of the Mortgaged
Premises a right to recover such sums as prepaid rent or as
a credit or offset against any future rental obligation;
that Mortgagor will not use the Mortgaged Premises for any
purpose which violates any federal or state law,
governmental regulation or local ordinance; and, that
Mortgagor will not grant any other lien or security interest
on any part of the Mortgaged Premises or Chattel Property
without full disclosure to and the prior written consent by
Mortgagee, which consent the Mortgagee may give or withhold
in its discretion, and Mortgagee covenants such
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discretion
will be exercised in good faith in accordance with its
commercial lending practices then in effect. Mortgagor
agrees that Mortgagee shall have no liability for the
withholding of such consent other than for bad faith or
willful disparate treatment of Mortgagor. Mortgagor
will operate the Mortgaged Premises at all times as a
facility for the imprinting and finishing of sportswear and
other clothing products. Mortgagor shall not acquire any
equipment or fixtures covered by this Mortgage or the Loan
Documents subject to any security interest or other charge
or lien having priority over the lien or security interest
granted under this Mortgage or the Loan Documents.
C. Mortgagor covenants and agrees that in the
ownership, operation and management of the Mortgaged
Premises, Mortgagor will observe and comply with all
applicable federal, state and local statutes, ordinances,
regulations, orders and restrictions, including, without
limitation, all zoning, building code, medical, health care,
environmental protection and equal employment opportunities
statutes, ordinances, regulations, orders aid restrictions.
D. Mortgagor covenants and agrees that Mortgagor will
not grant, consent to, or allow to remain unpaid any liens,
encumbrances, judgments, taxes, or other claims against the
Mortgaged Premises, whether prior or subordinate to the
rights of Mortgagee therein, without the prior written
consent of Mortgagee.
11. ESCROW DEPOSITS. Upon request by Mortgagee, Mortgagor
shall pay to Mortgagee, on dates upon which interest is payable,
such amounts as Mortgagee from time to time estimates as
necessary to create and maintain a reserve fund from which to pay
at least thirty (30) days before the same become due all rental
payments, real property taxes, personal property taxes,
assessments, liens and charges on or against the Mortgaged
Premises and the Chattel Property and premiums for insurance as
herein covenanted to be furnished by Mortgagor. Mortgagee
covenants such a request will be made in good faith in accordance
with its commercial lending practices then in effect. Payments
from such reserve fund for such purposes may be made by Mortgagee
in its discretion and any deficiency in such reserve fund shall
be immediately due and payable to Mortgagee by Mortgagor. Such
payments shall not be, nor deemed to be, trust funds but may be
commingled with the general funds of Mortgagee, and no interest
shall be payable in respect thereof. Mortgagor shall furnish
Mortgagee with all bills, statements and invoices with respect to
such taxes, insurance premiums and other items for the payment of
which the escrow is created, at least ten (10) days prior to the
due date thereof. Upon the occurrence of an Event of Default
under the terms of this Mortgage or the Loan Documents, any part
or all of the reserve fund may be applied to the Obligations
secured hereby and, in refunding any part of the reserve fund.
Mortgagee may deal with any person or party represented to be the
owner of the Mortgaged Premises at that time.
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12. ASSIGNMENT OF LEASES AND RENTS. Mortgagor hereby
assigns and transfers to Mortgagee all the rents and revenues of
the Mortgaged Premises, including those now due, or to become due
by virtue of any lease or other agreement for the occupancy or
use of all or any part of the Mortgaged Premises, regardless of
to whom the rents and revenues of the Mortgaged Premises are
payable. Mortgagor hereby authorizes Mortgagee or Mortgagee's
agents to collect the aforesaid rents and revenues and hereby
directs each tenant of the Mortgaged Premises to pay such rents
to Mortgagee or Mortgagee's agents; provided, however, that prior
to written notice given by Mortgagee to Mortgagor of the
occurrence of an Event of Default by Mortgagor of any covenant or
agreement in this Mortgage, Mortgagor may collect and receive all
rents and revenues of the Mortgaged Premises. Upon delivery of
written notice by Mortgagee to Mortgagor of the occurrence of an
Event of Default by Mortgagor of any covenant or agreement of
Mortgagor in this Mortgage, and without the necessity of
Mortgagee entering upon and taking and maintaining full control
of the Mortgaged Premises in person, by agent or by a court-
appointed receiver, Mortgagee shall immediately be entitled to
possession of all rents and revenues of the Mortgaged Premises as
specified in this Section 11 as the same become due and payable,
including, but not limited to, rents then due and unpaid, and all
such rents shall immediately upon delivery of such notice be held
by Mortgagor as trustee for the benefit of Mortgagee only;
provided however, that the written notice by Mortgagee to
Mortgagor of the breach by Mortgagor shall contain a statement
that Mortgagee exercises its rights to such rents. Mortgagor
agrees that commencing upon delivery by the Mortgagee of such
written notice of Mortgagor's breach, each tenant of the
Mortgaged Premises shall make such rents payable to and pay such
rents to Mortgagee or Mortgagee's agents on Mortgagee's written
demand to each tenant therefor, delivered to each tenant
personally or by mail, without any liability on the part of each
or any tenant to inquire further as to the existence of a default
by Mortgagor.
Upon request by Mortgagee, Mortgagor will assign to
Mortgagee, as further security for the Obligations secured
hereby, its interest, as lessor, in any or all leases of all or
any portion of the Mortgaged Premises and in any licenses,
permits, agreements or contracts pertaining to the Mortgaged
Premises. Such assignments are to be made by instruments in form
satisfactory to Mortgagee, but no such assignment shall be
construed as a consent by Mortgagee to any lease, license,
permit, agreement or contract so assigned or impose upon
Mortgagee any obligations with respect thereto. Mortgagor will
not cancel any of the leases now or hereafter assigned to
Mortgagee nor terminate or accept a surrender thereof or reduce
the payment of the rent thereunder or modify any of the leases or
accept any prepayment of rent (except any amount which may be
required to be prepaid by the terms of any such lease) without
first obtaining, on each occasion, the prior written consent of
Mortgagee, which Mortgagee may give or withhold at its
discretion. Mortgagee convenants in giving or withholding such
consent, Mortgagee will act in good faith in accordance with its
commercial lending practices then in effect. Mortgagor will
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perform all of its obligations as lessor under all of the leases
now or hereafter assigned to Mortgagee.
13. SUBROGATION. If the proceeds of the Obligations
secured hereby, or any part thereof, or any amount paid out or
advanced by the Mortgagee, be used directly or indirectly to pay
off, discharge, or satisfy, in whole or in part, any prior lien
or encumbrance upon the Mortgaged Premises or any part thereof,
then the Mortgagee shall be subrogated to the rights of the
holder of such lien or encumbrance, although such lien or
encumbrance may have been released of record.
14. SECURITY INTEREST. Subject to the Intercreditor
Agreement, Mortgagor hereby grants and transfers to Mortgagee a
security interest in all fixtures, equipment, improvements,
furniture, and other intangible personal property now owned or
hereafter acquired by Mortgagor attached to, located on, forming
a part of, or used in connection with the Real Estate, in such
leasehold or other use rights which Mortgagor may in any such
property not owned by Mortgagor, and in all property of like kind
or type hereafter acquired by Mortgagor in substitution or
replacement thereof, together with all equipment and accessions
now in, attached to, or which may hereafter at any time be placed
in or added to the above-described property and owned by
Mortgagor or in which Mortgagor has any leasehold or other use
rights, including all after-acquired property, replacements, and
proceeds thereof (including tort claims and insurance) ("TANGIBLE
COLLATERAL"); and, subject to the Factoring Agreement and other
agreements between Mortgagee and either Signal or Mortgagor, all
of Mortgagor's present and future receivables; and all rents,
royalties, income, security deposits, funds, proceeds and/or
profits received or receivable by Mortgagor from all leases,
rental agreements, or occupancies of the Real Estate ("CASH
COLLATERAL") (said Tangible Collateral and Cash Collateral being
collectively referred to as the "CHATTEL PROPERTY"); to secure
the payment of the Obligations and any extensions or renewals
thereof and any other liabilities of the Mortgagor in favor of
Mortgagee, direct or indirect, absolute or contingent, now
existing or hereafter arising, all of which the Mortgagor agrees
to pay without relief from valuation or appraisement laws and
with reasonable attorneys fees; and the payment of any and all
future advances that may be made by Mortgagee to Mortgagor during
the term of this Mortgage shall likewise be secured by the
Chattel Property, equally with and to the same extent as monies
originally advanced under this Mortgage. The Chattel Property
has been or is being acquired for business use. Mortgagor now
has or will acquire clear and unencumbered title to the Chattel
Property now in its possession or to be acquired subject to prior
interests granted Mortgagee, and, except for such prior interests
and for the security interest granted herein, Mortgagor will at
all times keep the Chattel Property free from any adverse lien,
security interest, or encumbrance. The security interest hereby
granted stall continue until full performance by the Mortgagor of
all conditions and obligations of the Obligations and this
Mortgage. Mortgagor shall be entitled to possession of the
Chattel Property until default, but shall use the Chattel
Property in a careful and prudent manner, maintain the Chattel
10
Property in good repair, pay all taxes and other charges thereon
when due, and defend the Chattel Property at all times against
any claims during the duration of this Mortgage. Except for
removal to repair the Chattel Property, Mortgagor shall not
permit the Chattel Property to be removed from the Mortgaged
Premises without the prior written consent of Mortgagee. Upon
any default, Mortgagee, at its option and without notice or
demand, shall be entitled to enter upon the Mortgaged Premises to
take immediate possession of the Chattel Property or to render
the same unusable. Upon request, Mortgagor shall assemble and
make the Chattel Property available to Mortgagee at a place to be
designated by Mortgagee which is reasonably convenient to both
parties. Upon repossession, Mortgagee may propose to retain the
Chattel Property in partial satisfaction of the Obligations of
Mortgagor secured hereby or sell all or any portion of the
Chattel Property at public or private sale in accordance with the
Uniform Commercial Code as adopted in Indiana or and other
applicable statute. In the further event that Mortgagee shall
dispose of any or all of the Chattel Property after default, the
proceeds of disposition shall be first applied in the following
order: (a) to the reasonable expenses of retaking, holding,
preparing for sale, selling and the like, (b) to the reasonable
attorneys' fees and legal expenses incurred by Mortgagee, and (c)
to the satisfaction of the Obligations secured hereby. Mortgagor
agrees to release and hold harmless Mortgagee and its employees,
agents, officers and directors from and against any and all
claims arising out of the repossession of the Chattel Property so
long as such repossession is lawfully exercised. Mortgagor
hereby authorizes Mortgagee to execute and file financing
statements and any construction statements or other filings
signed only by a representative of Mortgagee covering the
security interest of Mortgagee in the Chattel Property.
15. EXPENSES OF MORTGAGEE. Mortgagor hereby indemnities
Mortgagee and agrees to save it harmless from any and all loss,
damage or expense, including reasonable attorneys' fees and
disbursements, resulting from or arising out of the execution and
delivery of this Mortgage and the terms hereof and the same is
made a part of the Obligations secured hereby. All sums paid by
Mortgagee, including reasonable attorneys' fees and
disbursements, to cure default by Mortgagor hereunder, to amend
or otherwise modify this Mortgage, or the expense of any
litigation or threatened litigation action (or any settlement,
arbitration, or other actions or dispute resolution mechanism) to
prosecute or defend the rights and lien created hereby in any
action or proceeding to which Mortgagee is made a party by reason
of this Mortgage or the Loan Documents, or in which it becomes
necessary to defend or uphold the lien of this Mortgage or the
Loan Documents, shall be paid by Mortgagor to Mortgagee, together
with interest thereon from date of payment at a per annum rate
equal to the highest default rate of interest under the Loan
Documents, and any such sums and interest thereon shall be
immediately due and payable and secured hereby, having the
benefit of the lien hereby created as a part thereof and with its
priority, all without relief from valuation or appraisement laws.
11
16. CHANGE OF LAWS. In the event of the enactment after
the date hereof of any law of the State in which the Mortgaged
Premises are located imposing upon Mortgagee the payment of the
whole or any part of the taxes or assessments for charges and
liens herein required to be paid by Mortgagor, or the passing or
creation of any law deducting from the value of the Mortgaged
Premises any lien thereon for the purpose of taxation of
Mortgagee, or changing in any way the laws now in force for the
taxation of mortgages, or the Obligations secured hereby, or
changing the manner of collection of any such taxation from
Mortgagor so as to affect this Mortgage or the Obligations
secured hereby, then in such event Mortgagor, upon demand by
Mortgagee, shall pay such taxes or assessments or reimburse
Mortgagee therefor; provided, however, that if it is unlawful for
Mortgagor to make such payment, or the making of such payment
would impose a rate of interest beyond the maximum permitted by
law, then and in such event, such payments by the Mortgagor shall
be delayed until the earliest interest payment dates under the
Loan Documents on which the receipt thereof would be permissible
under the laws applicable to the Mortgagee limiting rates of
interest which may be charged or collected by the Mortgagee.
17. EVENTS OF DEFAULT. The occurrence of any one or more
of the following events shall be deemed to be an Event of Default
under this Mortgage notwithstanding any applicable grace period
or notice and cure period:
(a) Failure to pay the Note according to its terms;
(b) Failure to pay any other amounts payable under this
Mortgage;
(c) Failure to comply with any of the terms or covenants of
this Mortgage (other than as covered by subparagraphs
(a) and (b) of this Section 16);
(d) The occurrence of an Event of Default under the
Factoring Agreement or any of the Loan Documents or any
other writing executed by Mortgagor in connection with
the Obligations secured hereby;
(e) The breach of any covenant or agreement contained
herein, or if any representation or warranty contained
herein should prove to have been false or misleading in
any material respect at the time made or deemed to be
made;
(f) The filing by Mortgagor of a petition in voluntary
bankruptcy or under any chapter of the Federal
Bankruptcy Law or other similar law, state or federal,
whether now or hereafter existing, or an answer
admitting insolvency or inability to pay its debts;
(g) The adjudication of Mortgagor as a bankrupt, or the
appointment of a trustee or receiver for Mortgagor or
for all or a major portion of its property in any
involuntary proceeding, or the
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taking of jurisdiction by any court over the property of
Mortgagor or of the major part thereof in any involuntary
proceeding for the reorganization, dissolution, liquidation
or winding up of Mortgagor and the failure to discharge such
trustee or receiver or relinquish such jurisdiction or
vacate or stay on appeal;
(h) The making by Mortgagor of an assignment for the
benefit of creditors or the admitting by Mortgagor in
writing of its inability to pay its debts generally as
they become due, or the consent by Mortgagor to the
appointment of a receiver or trustee or liquidator of
all of its properties or the major part thereof;
(i) Default, including foreclosure and/or sale of any
collateral or other security, under or with respect to
any other obligations secured by all or any part of the
Mortgaged Premises or Chattel Property, whether or not
such obligation has been consented to by Mortgagee
prior to such default; or
(j) Abandonment of the Mortgaged Premises or Chattel
Property by the Mortgagor.
18. REMEDIES FOLLOWING A DEFAULT. (a) A "DEFAULT" under
this Mortgage shall mean the continued existence of an Event of
Default beyond the expiration of any applicable grace period or
notice and cure period.
(b) In the event of the occurrence of a Default, Mortgagee
may, in its sole discretion:
(i) Withhold Disbursement of any undisbursed loan
proceeds; and/or
(ii) Declare all of the Obligations secured hereby to
be immediately due and payable, without notice or
demand; provided, however, if the Event of
Default, the continued existence of which has
created the Default, is the result of a default by
Mortgagor of its obligations under Paragraphs 3,
4, 5, 6, 8, 9, or 23 hereof, Mortgagee may only
accelerate the Note, unless such Event of Default
shall also be a default under the terms of the
documents creating the other debts and obligations
included in the Obligations; and/or
(iii) Foreclose this Mortgage without relief under
valuation and appraisement laws; and/or
(iv) Apply for and be entitled to the appointment of a
receiver and such receiver is hereby authorized to
take possession of the Mortgaged Premises, collect
any rental, accrued or to accrue, whether in money
or in kind, for the use or
13
occupancy of the Mortgaged Premises by any persons,
firm or corporation, and may let or lease the Mortgaged
Premises or any part thereof, receive the rents,
income and profits therefrom, and hold the
proceeds subject to the orders of the court, or
the judge thereof, for the benefit of the
Mortgagee, pending the final decree in the
proceedings pursuant to which the receiver has
been appointed, and during any period allowed by
law for the redemption from any sale ordered in
foreclosure proceedings, and such receiver may be
appointed irrespective of the value of the
Mortgaged Premises or its adequacy to secure or
discharge the Obligations due or to become due or
the solvency of the Mortgagor; and/or
(v) Take possession of and hold the Mortgaged Promises
with or without process of law and collect the
rents and profits therefrom, applying same to the
charges and payments due under the conditions of
this Mortgage so long as default shall continue
which such taking of possession shall in no way
waive the right of Mortgagee to exercise the other
remedies set forth herein because of a default.
(c) In the event Mortgagee elects one or more of the above
remedies upon default, Mortgagor agrees to pay all of the costs
and expenses of Mortgagee incurred in pursuance of such remedy or
remedies, including, without limiting the generality thereof,
reasonable attorneys' fees, all costs of collection, late payment
penalties, abstracts of title or title insurance, hazard
insurance on the Mortgaged Premises and Chattel Property, real
property taxes on the Mortgaged Premises and personal property
taxes on the Chattel Property which are paid or incurred by
Mortgagee, repairs, maintenance, and replacements of the
Mortgaged Premises and Chattel Property which are paid or
incurred by Mortgagee, repairs, maintenance and replacements of
the Mortgaged Premises and Chattel Property which are advanced by
the Mortgagee, payments by Mortgagee to holders of liens or
encumbrances on the Mortgaged Premises and/or Chattel Property
which are then due and payable, and all costs and expenses of
preparing the Real Estate, the Mortgaged Premises or the Chattel
Property for sale, including, without limitation, appraisals,
surveys and environmental site assessments, and interest
commencing with the date of default, calculated at the then
applicable rate of interest under the Note plus two hundred (200)
basis points, compounded monthly, on the sum of the above costs
and expenses plus the unpaid principal balance of the Obligations
secured hereby, and interest unpaid prior to the date of default,
which shall become a part of the Obligations secured hereby and
collectible as such. In the event of the foreclosure of this
Mortgage, the abstracts of title or title insurance policies and
the policies of hazard insurance shall become the absolute
property of the Mortgagee.
(d) In the event the Mortgaged Premises and/or Chattel
Property are sold under foreclosure and the proceeds together
with the rents, issues,
14
income and profits collected by Mortgagee are insufficient to pay the
total Obligations evidenced and secured by this Mortgage, the Mortgagee
shall be entitled to a deficiency judgment against the Mortgagor.
19. NON-WAIVER OF DEFAULT. No failure by Mortgagee in the
exercise of any of its rights under this Mortgage shall preclude
Mortgagee from the exercise thereof in the event of subsequent
default by Mortgagor hereunder, and no delay by Mortgagee in the
exercise of its rights under this Mortgage shall preclude the
Mortgagee from the exercise thereof so long as Mortgagor is in
default hereunder. Mortgagee may enforce any one or more of its
rights or remedies hereunder successively or concurrently.
20. MODIFICATION OF OBLIGATIONS AND RELEASE OF COLLATERAL.
Mortgagee at its option may extend, change, or modify the time
for the payment of the Obligations or release all or part of the
Mortgaged Premises and Chattel Property without the consent of
any junior lienholder or the Mortgagor if Mortgagor has then
parted with title to the Mortgaged Premises and no sale of the
Mortgaged Premises or forbearance on the part of the Mortgagee or
its assigns, or extension of the time for the payment of the
Obligations hereby secured or reduction in payments, or
acceptance of renewals or release of all or part of the Mortgaged
Premises and Chattel Property shall affect the priority of this
Mortgage or Loan Documents or the security hereof or shall
operate to release, modify, change or affect the original
liability of the Mortgagor herein or a subsequent mortgagor,
surety or guarantor, either in whole or in part, nor shall the
full force and effect of the security of this Mortgage and Loan
Documents be altered thereby.
21. RIGHTS OF SUCCESSORS. The covenants herein contained
shall bind, and the benefits and advantages shall inure to, the
respective heirs, executors, administrators, successors and
assigns of the parties hereto.
22. INTERPRETATION. In the event this Mortgage is executed
by more than one person, firm or corporation, the liability of
the undersigned parties shall be joint and several. Whenever
used, the singular shall include the plural, the plural the
singular, and the use of any gender shall include all genders.
The term "MORTGAGEE" shall include any payee of the Obligations
hereby secured or any transferee thereof whether by operation of
law or otherwise. Descriptive readings are for convenience only
and shall be deemed to not affect the meaning of or construction
of any provision hereof. This Mortgage is being executed as part
of the credit facilities contemplated by the Loan Documents and
is to be construed consistent therewith. To the extent of any
conflict between the terms hereof and of any other Loan Document,
this Mortgage shall control as to any matters affecting the Real
Estate.
23. MORTGAGOR. The Mortgagor represents and warrants that
(i) the Mortgagor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, being the jurisdiction of its incorporation, and is
duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the conduct of
15
its business requires it to be so qualified, (ii) the Mortgagor has
full power, authority and legal right to execute, deliver and
perform this Mortgage and the transactions contemplated hereby,
(iii) the execution, delivery and performance of this Mortgage
and the transactions contemplated hereby by Mortgagor have been
duly authorized by all necessary corporate action, (iv) this
Mortgage has been duly executed and delivered on behalf of the
Mortgagor by its duly authorized officers, (v) this Mortgage
constitutes the legal, valid and binding obligations of the
Mortgagor enforceable against it in accordance with their terms,
(vi) the execution, delivery and performance of this Mortgage by
the Mortgagor do not and will not violate, conflict with, or
result in the breach of, any term, condition or provision of, or
require the consent of any other person under, (a) any existing
law or governmental regulation to which the Mortgagor is subject,
(b) any judgment, order, injunction. decree or award of any
court, arbitrator or governmental official, body or authority
which is applicable to the Mortgagor, (c) the Articles of
Incorporation or By-laws of the Mortgagor or (d) any mortgage,
agreement, commitment, lease, or other instrument, document or
understanding to which the Mortgagor is a party or by which it
may be bound or affected, or give any party with rights
thereunder the right to terminate, modify, accelerate or
otherwise change the existing rights or obligations of the
Mortgagor, and (vii) no other authorization, approval or consent
of, and no filing with any governmental official or authority is
required in connection with the execution, delivery or
performance of this Mortgage by the Mortgagor. The
representative of Mortgagor executing this mortgage on its behalf
hereby represents that he is such representative and that he has
been duly authorized and empowered by appropriate resolutions
duly adopted by Mortgagor to execute and deliver this Mortgage
and the Guaranty secured thereby for and on behalf of Mortgagor.
24. HAZARDOUS WASTE. (a) Mortgagor warrants, represents
and covenants:
(i) Subject to all matters disclosed to Mortgagee in the
Phase I Site Assessment No. 54898.01 performed by Clayton
Environmental Consultants, Inc., dated May 20, 1994, copies of
which have been furnished Mortgagee, the Mortgagor, and those
holding the Mortgaged Premises under Mortgagor, are in compliance
with all laws and regulations relating to pollution and
environmental control applicable to the Mortgaged Premises except
where any non-compliance is immaterial and would have no adverse
affect upon the Mortgaged Premises. The Mortgagor will comply
with all such laws and regulations which may be imposed in the
future other than for any non-compliance which is immaterial and
would have no adverse affect upon the Mortgaged Premises and
those which would not have a material adverse effect on the
business, assets, properties or condition (financial or
otherwise) of the Mortgagor. Without limiting the generality of
the foregoing, the Mortgaged Premises are free from "HAZARDOUS
SUBSTANCES," which for purposes of this Mortgage includes,
without limitation, any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous or
toxic substances or related materials defined in the
Comprehensive
16
Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Section 9601, ET SEQ.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C.
Section 1801, ET SEQ.), the Resource, Conservation and Recovery
Act, as amended (42 U.S.C. Section 6901, ET SEQ.), and the Clean
Air Act, as amended (42 U.S.C. Section 7401, ET SEQ.) and
includes oil, waste oil, and used oil as those terms are defined
in the Clean Water Act, as amended (33 U.S.C. 1251 ET SEQ.), and
the Oil Pollution Act of 1990, as amended (33 U.S.C. 2701 ET
SEQ.) and in the rules and regulations adopted and publications
promulgated pursuant thereto and shall include any other
pollutant or contaminant designated as such by Congress or the
United States Environmental Protection Agency (EPA), or defined
by any other federal, state or local governmental law, ordinance,
rule or regulation having jurisdiction over the Mortgaged
Premises regulating, relating to, or imposing liability or
standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, as now or at any time in effect
("HAZARDOUS SUBSTANCES") (other than Hazardous Substances used by
the Mortgagor in the normal and ordinary course of business and
reported to agencies in the normal and ordinary course of
business in material safety data sheets or the like); no portion
of the Mortgaged Premises is subject to federal, state, or local
regulation or liability because of the presence of stored, leaked
or spilled Hazardous Substances, including without limitation
petroleum products, waste materials or debris, "PCB's" or PCB
items (as defined in 40 C.F.R. 763.63), underground storage
tanks, "ASBESTOS" (as defined in 40 C.F.R. 763.63) or the past or
present accumulation, spillage or leakage of any such substances;
and the Mortgagor is in compliance with all federal, state and
local requirements relating to protection of health or the
environment in connection with the operation of their business[,
except where any non-compliance is immaterial and would have no
adverse affect upon the Mortgaged Premises]: and the Mortgagor
has received no complaint regarding the Mortgaged Premises, has
received no notice of any investigation regarding the Mortgaged
Premises, and has no knowledge of any facts or conditions that
could serve as the basis for any such complaint or investigation.
Further, the Mortgagor is unaware of any investigation, threat or
concern by any entity regarding environmental issues involving
the Mortgaged Premises. There are not now any outstanding
citations, notices or orders of violation or noncompliance issued
to Mortgagor or relating to its business assets, property or
leaseholds under any such laws, rules or regulations, nor any
conditions which, if known by the proper authorities, could
result in any of the foregoing. Mortgagor shall permit no
release of Hazardous Substances on, to or from the Mortgaged
Premises, shall not use any Hazardous Substances on the Mortgaged
Premises (other than Hazardous Substances used by the Mortgagor
in the normal and ordinary course of business and reported to
agencies in the normal and ordinary course of business in
material safety data sheets or the like), and, without limiting
any other provision of this Mortgage, shall keep the Mortgaged
Premises free and clear from any liens or other encumbrances
imposed pursuant to any applicable environmental laws or other
rights or claims relating to the environmental condition of the
Mortgaged Premises or
17
the conduct of the Mortgagor's business
thereon with respect to any air, water, noise or other pollution
or contamination.
(ii) If Mortgagor receives any notice of (a) the happening
of an event involving the use, spill, discharge, release or
cleanup of any Hazardous Substance or known hazardous or toxic
waste, including, but not limited to any oil or pesticide, on or
about any property of Mortgagor or caused by the Mortgagor (a
"HAZARDOUS DISCHARGE") or (b) any complaint, order, citation or
notice with regard to air emissions, water discharges, noise
emissions or any other environmental, health or safety matter
affecting the Mortgagor or the Mortgaged Premises or Mortgagor's
operations or the operations of any person holding the Mortgaged
Premises by or through Mortgagor (an "ENVIRONMENTAL COMPLAINT")
from any person or entity, including without limitation the
Department of Environmental Management of the State of Indiana
("DEM"), the United States Environmental Protection Agency
("EPA"), the United States Army Corps of Engineers (the "CORPS"),
or the United States Coast Guard (the "COAST GUARD"), then
Mortgagor will give prompt written notice of same to Mortgagee
(but not later than five (5) days of receipt thereof) and shall
promptly comply with its obligations under law with regard to
such Hazardous Discharge or Environmental Complaint, which
compliance shall include at a minimum the immediate commencement,
and the diligent pursuit, of any remedial action required
thereby. Such remedial action shall be completed within the
requirements established by any order or other directive binding
on the Mortgagor or, if no such requirements are set forth
therein, then within sixty (60) days of the Mortgagor's receipt
thereof or such longer time as may be necessary and appropriate
to effectuate such remediation in a diligent manner.
(iii) Mortgagor and those holding the Mortgaged Premises
under Mortgagor have, and will continue to have, all necessary
federal, state and local licenses, certificates and permits
relating to the Mortgagor and the persons holding the Mortgaged
Premises and to the Mortgaged Premises and the operations
conducted thereon, and they are in compliance with all applicable
federal, state and local laws, rules and regulations relating to
air emissions, water discharges, noise emissions, solid or liquid
storage and disposal, hazardous or toxic waste or substances and
other environmental, health and safety matters, other than for
any non-compliance which is immaterial and would have no adverse
affect upon the Mortgaged Premises and those which would not have
a material adverse effect on the business, assets properties or
condition (financial or otherwise) of the Mortgagor.
(iv) The Mortgagor shall conduct and complete all
investigations, including a comprehensive environmental audit,
studies, sampling and testing, and all remedial, removal and
other actions necessary to clean up and remove all Hazardous
Substances on, under, from or affecting the Real Estate and the
Mortgaged Premises as required by all applicable federal, state
and local laws, ordinances, rules, regulations and policies (all
of the foregoing herein referred to as "ENVIRONMENTAL AUDIT
ACTIVITIES"), to the satisfaction of the Mortgagee, and in
accordance with the orders and
18
directives of all federal, state
and local governmental authorities and at such time, or from time
to time, as the Mortgagee may reasonably request. If the
Mortgagor fails to conduct such Environmental Audit Activities
required by such laws, ordinances, rules, regulations or policies
or by the Mortgagee, then the Mortgagee may at its option and at
the expense of the Mortgagor, conduct such audit and shall give
prior notice thereof to Mortgagor.
(v) In the event this Mortgage is foreclosed or the
Mortgagor tenders a deed in lieu of foreclosure, the Mortgagor
shall deliver the Real Estate and the Mortgaged Premises to the
Mortgagee free of any and all Hazardous Substances which are then
required to be removed (whether over time or immediately)
pursuant to applicable federal, state and local laws, ordinances,
rules or regulations affecting the Real Estate and the Mortgaged
Premises.
(b) Mortgagee shall have the right but not the obligation,
prior or subsequent to an Event of Default, without limiting
Mortgagee's other rights and remedies under this Mortgage, to
enter onto the Mortgaged Premises or to take such other actions
as it deems necessary or advisable to clean up, move, resolve or
minimize the impact of, or otherwise deal with, any Hazardous
Substances on the Mortgaged Premises following receipt of any
notice from any person or entity asserting the existence of any
Hazardous Substance pertaining to the Mortgaged Premises or any
part thereof which, if true, could result in an order, suit,
imposition of a lien on the Mortgaged Premises, or other action
and/or which, in Mortgagee's sole opinion, could jeopardize
Mortgagee's security under this Mortgage. All reasonable costs
and expenses paid or incurred by Mortgagee in the exercise of any
such rights shall be Indebtedness secured by this Mortgage and
shall be payable by Mortgagor upon demand.
(c) Mortgagor hereby agrees to defend, indemnify and hold
the Mortgagee harmless from and against any and all claims,
losses, liabilities, damages and expenses (including, without
limitation, cleanup costs and reasonable attorney's fees,
including those arising by reason of any of the aforesaid or an
action against the Lender under this indemnity) arising directly
or indirectly from, out of, or by reason of any Hazardous
Discharge, Environmental Complaint, or any environmental, health
or safety law governing the Mortgagor, their operations or the
Mortgaged Premises or from any inaccuracy in the representations
and warranties given herein relating to environmental matters.
This indemnification shall survive the repayment of the
Indebtedness and satisfaction or release of this Mortgage.
(d) All warranties and representations above shall be
deemed to be continuing and shall remain true and correct in all
material respects until all of the Indebtedness has been paid in
full and any limitations period expires. Mortgagor's covenants
above shall survive any exercise of any remedy by Mortgagee under
the Loan Agreement or Note, or this Mortgage, including
Foreclosure of this Mortgage (or deed in lieu thereof), even if,
as a part of such foreclosure or deed in lieu of foreclosure, the
19
Indebtedness is satisfied in full and/or this Mortgage shall have
been released.
25. GOVERNING LAW; WAIVERS. THE VALIDITY OF THIS
AGREEMENT, ITS CONSTRUCTION, INTERPRETATION AND ENFORCEMENT AND
THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF INDIANA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW. MORTGAGOR AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT, THE GUARANTY AND THE LOAN
DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS
LOCATED IN THE COUNTY OF MARION, STATE OF INDIANA, OR THE FEDERAL
COURTS WHOSE VENUE INCLUDES THE COUNTY OF MARION, STATE OF
INDIANA, THE STATE COURTS LOCATED IN THE COUNTY OF NEW YORK,
STATE OF NEW YORK, OR THE FEDERAL COURTS WHOSE VENUE INCLUDES THE
COUNTY OF NEW YORK, STATE OF NEW YORK, OR, AT THE SOLE OPTION OF
LENDER, IN ANY OTHER COURT IN WHICH LENDER SHALL INITIATE LEGAL
OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. MORTGAGOR WAIVES,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE RIGHT TO A
TRIAL BY JURY AND ANY RIGHT MORTGAGOR MAY HAVE TO ASSERT THE
DOCTRINE 0F "FORUM NON CONVENIENS" OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
20
IN WITNESS WHEREOF, Mortgagor has executed this instrument
this 31st day of March, 1995.
THE SHIRT SHED, INC.
By: /s/ William H. Watts
By: /s/ Robert J. Powell_
STATE OF TENNESSEE
COUNTY OF HAMILTON
Personally appeared before me, a Notary Public in and for
the county aforesaid, William Watts, with whom I am personally
acquainted (or proved to me on the basis of satisfactory
evidence), and who upon oath acknowledged such person to be the
President of The Shirt Shed, Inc., the within named bargainer, a
Delaware corporation, and that he executed the within instrument
for the purposes therein contained by personally signing on
behalf of such corporation as Vice President.
Witness my hand, at office, this the 31st day of March, 1995.
/s/ Geoffrey G. Young
Notary Public
My Commission Expires: 7/26/95
This Instrument Prepared By: Geoffrey G. Young, Witt, Gaither &
Whitaker, P.C., 1100 American National Bank Building,
Chattanooga, TN 37402
Exhibit: A: Legal Description of the Mortgaged Premises
21
LIST OF OMITTED EXHIBITS AND SCHEDULES
Exhibit A Property Description
The Registrant hereby agrees to furnish a copy of any of such omitted Schedules
or Exhibits supplementally upon request of the Comission's staff.