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EXHIBIT 10.52
Drawn By and Return To:
Moore & Van Allen, PLLC (JWG)
NationsBank Corporate Center
100 North Tryon Street, Floor 47
Charlotte, North Carolina 28202-4003
COMMONWEALTH OF PENNSYLVANIA THIS IS AN OPEN-END
MORTGAGE
SECURING FUTURE ADVANCES UP TO
COUNTY OF LANCASTER A MAXIMUM PRINCIPAL AMOUNT OF
$25,000,000 MILLION PLUS ACCRUED
INTEREST AND OTHER
INDEBTEDNESS AS DESCRIBED
IN 42 PA C.S.A. SECTION 8143
OPEN-ENDED MORTGAGE AND
SECURITY AGREEMENT
COLLATERAL IS OR INCLUDES FIXTURES
THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT (the "Mortgage") is made
and entered into as of the 18th day of May, 1999, by HERR MANUFACTURING COMPANY,
a Pennsylvania corporation (the "Grantor") and FIRST UNION NATIONAL BANK, a
national banking association, for itself and in its capacity as administrative
agent (in such capacity, the "Agent") the lenders from time to time party to the
Credit Agreement described herein (collectively, the "Lenders").
RECITALS:
WHEREAS, the Borrower (as hereinafter defined) and the Guarantors (as
hereinafter defined) have requested that the Lenders provide a credit facility
to the Borrower in an amount up to $25 million (collectively, the "Credit
Facilities");
WHEREAS, the Grantor is the owner of the fee simple interest in the
real property described on Exhibit A attached hereto and incorporated herein by
reference; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Grantor provided that, among other things, the Grantor executes
and delivers this Mortgage.
W I T N E S S E T H:
The Grantor, in consideration of the indebtedness herein recited and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, has irrevocably granted, released, sold, remised,
bargained, assigned, pledged, warranted,
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mortgaged, transferred and conveyed, and does hereby grant, release, sell,
remise, bargain, assign, pledge, warrant, mortgage, transfer and convey unto the
Agent and the Agent's successors and assigns for the benefit of the Lenders with
power of sale, forever, a continuing security interest in and to, all of
Grantor's right, title and interest in and to the following described land, real
property interests, buildings, improvements and fixtures:
(a) All that tract or parcel of land and other real property
interests in Lancaster County, Pennsylvania more particularly described
in Exhibit A attached hereto and made a part hereof (the "Land");
(b) All buildings and improvements of every kind and
description now or hereafter erected or placed on the aforesaid land
(the "Improvements") and all materials intended for construction,
reconstruction, alteration and repair of such Improvements now or
hereafter erected thereon, all of which materials shall be deemed to be
included within the premises hereby conveyed immediately upon the
delivery thereof to the aforesaid Land, and all fixtures now or
hereafter owned by the Grantor and attached to or contained in and used
in connection with the aforesaid Land and Improvements and all renewals
or replacements thereof or articles in substitution thereof, whether or
not the same are or shall be attached to the Land and Improvements in
any manner (the "Tangible Personalty") and all proceeds of the Tangible
Personalty (hereinafter, the Land, the Improvements and Tangible
Personalty may be collectively referred to as the "Premises"); and
(c) All appurtenances to the Premises together with all
proceeds thereof, including casualty and condemnation proceeds.
TO HAVE AND HOLD the same, together with all privileges, hereditaments,
easements and appurtenances thereunto belonging, subject to the Permitted Liens
(as defined in the hereinafter described Credit Agreement) and Permitted
Encumbrances (hereinafter defined) to the Agent and the Agent's successors and
assigns, to secure the indebtedness and other obligations herein recited;
provided that, should the indebtedness secured hereby be paid according to the
tenor and effect thereof when the same shall be due and payable and should the
Grantor timely and fully discharge its obligations secured hereby and satisfy
the obligations in full, then the Premises shall be reconveyed to the Grantor or
the title thereto shall be revested according to the provisions of law.
And, as additional security for said indebtedness, the Grantor hereby
conditionally assigns to the Agent all the security deposits, rents, issues,
profits and revenues of the Premises from time to time accruing (the "Rents and
Profits"), reserving only the right to the Grantor to collect and apply the same
as Grantor chooses as long as there shall exist no Event of Default (as defined
in Article III).
As additional collateral and further security for the indebtedness, the
Grantor does hereby assign to the Agent and grants to the Agent a security
interest in all of the right, title and the interest of the Grantor in and to
any and all insurance policies and proceeds thereof and any and all leases
(including equipment leases), rental agreements, management contracts, franchise
agreements, construction contracts, architects' contracts, technical services
agreements, or other
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contracts, licenses and permits to the extent now or hereafter relating the
Premises (the "Intangible Personalty") or any part thereof, and the Grantor
agrees to execute and deliver to the Agent such additional instruments, in form
and substance satisfactory to the Agent, as may hereafter be requested by the
Agent to evidence and confirm said assignment; provided, however, that
acceptance of any such assignment shall not be construed as a consent by the
Agent to any lease, rental agreement, management contract, franchise agreement,
construction contract, technical services agreement or other contract, license
or permit, or to impose upon the Agent any obligation with respect thereto.
Notwithstanding the foregoing provisions, such assignment and grant of security
interest contained herein shall not extend to, and the Intangible Personalty
shall not include, any personalty which is now or hereafter held by the Grantor
as licensee, lessee or otherwise, to the extent that (a) such personalty is not
assignable or capable of being encumbered as a matter of law or under the terms
of the license, lease or other agreement applicable thereto (but solely to the
extent that any such restriction shall be enforceable under applicable law),
without the consent of the licensor or lessor thereof or other applicable party
thereto and (b) such consent has not been obtained; provided, however, that the
foregoing assignment and grant of security interest shall extend to, and the
Intangible Personalty shall include, any and all proceeds of such personalty to
the extent that the assignment or encumbering of such proceeds is not so
restricted under the terms of the license, lease or other agreement applicable
thereto.
All the Tangible Personalty which comprise a part of the Premises
shall, as far as permitted by law, be deemed to be affixed to the aforesaid Land
and conveyed therewith. As to the balance of the Tangible Personalty and the
Intangible Personalty, this Mortgage shall be considered to be a security
agreement which creates a security interest in such items for the benefit of the
Agent. In that regard, the Grantor grants to the Agent all of the rights and
remedies of a secured party under the laws of the state in which the Premises
are located.
The Grantor and the Agent covenant, represent and agree as follows:
ARTICLE I
Indebtedness Secured
1.1 Indebtedness. The Agent and the Lenders have agreed to establish a
$25,000,000 senior secured credit facility (hereinafter the loans and extensions
of credit thereunder may be called the "Obligations") in favor of the
Sleepmaster L.L.C., a New Jersey limited liability company (the "Borrower")
pursuant to the terms of that certain Credit Agreement dated as of the date
hereof among the Borrower, Sleepmaster Holdings, L.L.C., as the Parent, the
domestic subsidiaries of the Borrower (including the Grantor) (individually a
"Guarantor" and collectively with the Grantor, the "Guarantors"), the Agent and
the Lenders (as amended, modified, extended, renewed or replaced from time to
time, the "Credit Agreement") and as evidenced by (i) those revolving credit
promissory notes of the Borrower, under which sums may be advanced, paid back or
readvanced (as referenced and defined in the Credit Agreement, as amended,
modified, supplemented, extended, renewed or replaced from time to time, the
"Revolving Notes") and (ii) those letters of credit for the account of the
Borrower or any other Credit Party
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(as referenced in the Credit Agreement, the "Letters of Credit"). The Revolving
Notes shall hereinafter collectively be called the "Notes." Capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to such
terms in the Credit Agreement. This Mortgage is given to secure the payment of
the Borrower and the Grantor under any Hedging Agreements (as defined in the
Credit Agreement) and all indebtedness and other obligations now or hereafter
owing under the Notes, the Letters of Credit, the Credit Agreement, this
Mortgage and the other Credit Documents (collectively, the "Indebtedness").
1.2 Open-End Mortgage. This Mortgage secures all existing and future
advances and readvances under the Loan Documents all of which shall be entitled
to the lien priority and benefits of an Open-End Mortgage under 42 Pa. C.S.A.
Section 8143 (the "Open-End Mortgage Statute"). Without limiting anything
contained in any provision of this Mortgage, this Mortgage secures the Grantor's
obligation to repay all advances and readvances of principal under the
Obligations made at closing or thereafter and all interest, late charges, fees,
and other amounts due under the Obligations or this Mortgage, and in addition
thereto: (i) all advances by the Lenders to the Grantor or any other person to
pay costs of erection, construction, alteration, repair, restoration, and
completion of any part of any improvements situated on the Premises; (ii) any
and all advances made or costs incurred by the Lenders for the payment of taxes,
assessments, maintenance charges, insurance premiums, and similar charges with
respect to the Premises; (iii) any and all costs incurred for the protection of
all or any part of the Premises or the lien of this Mortgage; and (iv) any and
all legal fees, costs, and other expenses incurred by the Lenders by reason of
any default or otherwise in connection with the Obligations.
1.3 Confession of Judgment for Possession. FOR THE PURPOSE OF OBTAINING
POSSESSION OF THE PREMISES UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT, GRANTOR
HEREBY AUTHORIZES AND EMPOWERS ANY ATTORNEY OF ANY COURT OR RECORD, IN THE
COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY FOR GRANTOR, AS WELL AS
FOR THE PERSONS CLAIMING UNDER, BY, OR THROUGH GRANTOR, TO APPEAR FOR AND
CONFESS JUDGMENT AGAINST GRANTOR AND ALL PERSONS CLAIMING UNDER, BY, OR THROUGH
GRANTOR, IN FAVOR OF THE LENDERS FOR THE RECOVERY BY THE LENDERS OF POSSESSION
OF THE PREMISES, FOR WHICH THIS MORTGAGE (OR A COPY THEREOF VERIFIED BY
AFFIDAVIT) SHALL BE A SUFFICIENT WARRANT; WHEREUPON A WRIT OF POSSESSION OF THE
PREMISES MAY BE ISSUED FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDING
WHATSOEVER AND WITHOUT STAY OF EXECUTION, GRANTOR HEREBY RELEASING AND AGREEING
TO RELEASE THE LENDERS AND ANY SUCH ATTORNEY FROM ALL PROCEDURAL ERRORS AND
DEFECTS WHATSOEVER IN ENTERING SUCH ACTION OR JUDGMENT OR IN CAUSING SUCH WRIT
OR PROCESS TO BE ISSUED OR IN ANY PROCEEDING THEREON OR CONCERNING THE SAME,
PROVIDED THAT THE LENDERS SHALL HAVE FILED IN SUCH ACTION AN AFFIDAVIT MADE ON
THE LENDER'S BEHALF SETTING FORTH THE FACTS NECESSARY TO AUTHORIZE THE ENTRY OF
SUCH JUDGMENT ACCORDING TO THE TERMS OF THIS INSTRUMENT, OF WHICH FACTS SUCH
AFFIDAVIT SHALL BE PRIMA FACIE EVIDENCE. IT IS HEREBY EXPRESSLY AGREED THAT IF
FOR ANY REASON AFTER ANY SUCH ACTION HAS BEEN COMMENCED, THE SAME SHALL BE
DISCONTINUED, MARKED SATISFIED OF
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RECORD, OR BE TERMINATED, OR POSSESSION OF THE PREMISES REMAIN IN OR BE RESTORED
TO GRANTOR OR ANYONE CLAIMING UNDER, BY, OR THROUGH GRANTOR, THE LENDERS MAY,
WHENEVER AND AS OFTEN AS THE LENDERS SHALL HAVE THE RIGHT TO TAKE POSSESSION
AGAIN OF THE PREMISES, BRING ONE OR MORE FURTHER ACTIONS IN THE MANNER
HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE PREMISES AND TO CONFESS
JUDGMENT THEREIN AS HEREINABOVE PROVIDED, AND THE AUTHORITY AND POWER ABOVE
GIVEN TO ANY SUCH ATTORNEY SHALL EXTEND TO ALL SUCH FURTHER ACTIONS IN EJECTMENT
AND CONFESSION OF JUDGMENT THEREIN AS HEREINABOVE PROVIDED WHETHER BEFORE OR
AFTER AN ACTION OF MORTGAGE FORECLOSURE IS BROUGHT OR OTHER PROCEEDINGS IN
EXECUTION ARE INSTITUTED UPON THIS MORTGAGE OR ANY INSTRUMENT THEN EVIDENCING
ANY OF THE LIABILITIES, AND AFTER JUDGMENT THEREON OR THEREIN AND AFTER A
JUDICIAL SALE OF THE MORTGAGED PROPERTY.
ARTICLE II
Grantor's Covenants, Representations and Agreements
2.1 Title to Property. The Grantor represents and warrants to the Agent
(i) that it is seized of the Land, the Improvements (and any fixtures) and the
Tangible Personalty in fee to the extent such Tangible Personalty does not
constitute fixtures and has the right to encumber and convey the same, (ii) as
of the date hereof, that title to the Tangible Personalty is free and clear of
all liens and encumbrances except for the Permitted Liens and title to all such
other property is free and clear of all encumbrances except for the matters
shown on the title policy accepted by the Agent in connection with this Mortgage
(the "Permitted Encumbrances"), and (iii) that it will warrant and defend the
title to such property except for the Permitted Encumbrances and Permitted Liens
against the claims of all Persons. As to the balance of the Premises, the Rents
and Profits and the Intangible Personalty, the Grantor represents and warrants
that it has title to such property, that it has the right to encumber and convey
such property and that it will warrant and defend such property against the
claims of all Persons subject to the Permitted Encumbrances and the Permitted
Liens.
2.2 Taxes and Fees. The Grantor will pay prior to delinquency all
taxes, general and special assessments, insurance premiums, permit fees,
inspection fees, user fees, license fees, water and sewer charges, franchise
fees and equipment rents against it or the Premises as required by the terms and
conditions of Section 5.3 of the Credit Agreement (and the Grantor, upon request
of the Agent, will submit to the Agent receipts evidencing said payments).
2.3 Reimbursement. The Grantor agrees that if it shall fail to pay on
or before the date that the same become delinquent any tax, assessment or charge
levied or assessed against the Premises or any utility charge, whether public or
private, or any insurance premium, or if it shall fail to procure the insurance
coverage and the delivery of the insurance certificates required hereunder, or
if it shall fail to pay any other charge or fee described in Section 2.3 hereof,
then (unless such obligations are being contested in the manner set forth in
Section 5.3 of the Credit
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Agreement) the Agent, at its option, may pay or procure the same and will give
the Grantor prompt notice of any such expenditures. The Grantor will reimburse
the Agent upon demand for any sums of money paid by the Agent pursuant to this
Section, together with interest on each such payment at the default rate of
interest provided in Section 2.7 of the Credit Agreement for Loans, and all such
sums and interest thereon shall be secured hereby.
2.4 Additional Documents. The Grantor agrees to execute and deliver to
the Agent, concurrently with the execution of this Mortgage and upon the request
of the Agent from time to time hereafter, all financing statements and other
documents reasonably required to perfect and maintain the security interest
created hereby. The Grantor hereby irrevocably (as long as the Loans remain
unpaid) makes, constitutes and appoints the Agent as the true and lawful
attorney of the Grantor (such appointment being coupled with an interest) to
sign the name of the Grantor (after the Grantor has failed or refused to timely
execute such documents upon request of the Agent) on any financing statement,
continuation of financing statement or similar document required to perfect or
continue such security interests but only in the event the Grantor refuses to do
so after receipt of written notice.
2.5 Sale or Encumbrance. Except as otherwise permitted in the Credit
Agreement, the Grantor will not sell, encumber or otherwise dispose of any of
the Tangible Personalty except to incorporate such into the Improvements or
replace such with goods of quality and value at least equal to that replaced.
Provided, however, in the event the Grantor sells or otherwise disposes of any
of the Tangible Personalty except to the extent permitted by the Credit
Agreement, the Agent's security interest in the proceeds of the Tangible
Personalty shall continue pursuant to this Mortgage.
2.6 Fees and Expenses. The Grantor will promptly pay upon demand any
and all reasonable costs and expenses of the Agent, (a) as required under
Section 9.5 of the Credit Agreement and (b) as necessary to protect the
Premises, the Rents and Profits or the Intangible Personalty, or incurred in
connection with the exercise of any rights or remedies under this Mortgage or
with respect to the Premises, Rents and Profits or the Intangible Personalty.
All of the foregoing costs and expenses shall be secured hereby.
2.7 Leases and Other Agreements. Without first obtaining on each
occasion the written approval of the Agent, the Grantor shall not, except as
permitted by the Credit Agreement, enter into, cancel, surrender or materially
modify or permit the cancellation of any material lease (including any equipment
lease), rental agreement, management contract, franchise agreement, construction
contract, technical services agreement or other material contract, license or
permit now or hereafter affecting the Premises, or materially modify any of said
instruments, or accept or permit to be made, any prepayment (more than one
month) of any installment of rent or fees thereunder. Certified copies of each
such approved material lease or other material agreement not previously
delivered to the Agent shall be submitted to the Agent as soon as possible. The
Grantor shall faithfully keep and perform, or cause to be kept and performed, in
all material respects, all of the covenants, conditions, and agreements
contained in each of said agreements, now or hereafter existing, on the part of
the Grantor to be kept and performed (including performance of all covenants to
be performed under any and all leases of the Premises or any part thereof) and
shall at all times use commercially reasonable efforts to
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enforce, with respect to each other party to said agreements, all obligations,
covenants and agreements by such other party to be performed thereunder.
2.8 Maintenance of Premises. The Grantor will abstain from and will not
permit the commission of waste in or about the Premises and will maintain, or
cause to be maintained, the Premises in reasonable condition and repair,
ordinary wear and tear and obsolescence excepted.
2.9 Insurance.
(a) Types Required. The Grantor shall maintain insurance for
the Premises as set forth in Section 5.5 of the Credit Agreement. In
addition to the requirements set forth in Section 5.5 of the Credit
Agreement, if any part of the Improvements is located in an area having
"special flood hazards" as defined in the Federal Flood Disaster
Protection Act of 1973, a flood insurance policy as may be required by
law naming the Agent as mortgagee must be submitted to the Agent. The
policy must be in such amount, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance
with normal industry practice.
(b) Use of Proceeds. All insurance proceeds received by the
Grantor shall be applied as set forth in the Credit Agreement with
respect to a "Recovery Event."
2.10 Eminent Domain. Subject to the provisions of the Credit Agreement,
the Grantor assigns to the Agent any proceeds or awards which may become due by
reason of any condemnation or other taking for public use of the whole or any
part of the Premises or any rights appurtenant thereto to which the Grantor is
entitled, and such proceeds or awards shall be applied in the same manner the
insurance proceeds are applied as set forth in the Credit Agreement with respect
to a "Recovery Event." The Grantor agrees to execute such further assignments
and agreements as may be reasonably required by the Agent to assure the
effectiveness of this Section. In the event any Governmental Authority shall
require or commence any proceedings for the demolition of any buildings or
structures comprising a part of the Premises, or shall commence any proceedings
to condemn or otherwise take pursuant to the power of eminent domain a material
portion of the Premises, the Grantor shall promptly notify the Agent of such
requirements or commencement of proceeding (for demolition, condemnation of
other taking).
2.11 Releases and Waivers. The Grantor agrees that no release by the
Agent of any portion of the Premises, the Rents and Profits or the Intangible
Personalty, no subordination of lien, no forbearance on the part of the Agent to
collect on the Loans, or any part thereof, no waiver of any right granted or
remedy available to the Agent and no action taken or not taken by the Agent
shall, except to the extent expressly released, in any way have the effect of
releasing the Grantor from full responsibility to the Agent for the complete
discharge of each and every of the Grantor's obligations hereunder.
2.12 Transfer of Premises. Except as otherwise permitted in the Credit
Agreement, the Grantor covenants and agrees with the Agent that the Grantor
shall not sell, transfer, convey, mortgage, encumber or otherwise dispose of the
Premises, the Rents and Profits or the Intangible
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Personalty or any part thereof or any interest therein or engage in subordinate
financing with respect thereto during the term of this Mortgage without the
prior written consent of the Agent.
2.13 Compliance with Law. Except as otherwise permitted in the Credit
Agreement, the Grantor will comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
authorities in respect of the ownership of the Premises (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls).
2.14 Inspection. Except as otherwise permitted in the Credit Agreement,
the Grantor will permit the Agent, or its Agents, at all reasonable times during
regular business hours (per Section 5.6 of Credit Agreement) and with advance
prior notice to enter and pass through or over the Premises for the purpose of
inspecting same; provided, however, prior to an Event of Default inspections
shall be at reasonable times during the Grantor's normal business hours.
2.15 Security Agreement.
(a) Insofar as the fixtures and articles of personal property either
referred to or described in this Mortgage are in any way connected with the use
and enjoyment of the Premises, this Mortgage is hereby made and declared to be a
security agreement, encumbering each and every item of personal property
included herein, in compliance with the provisions of the Uniform Commercial
Code as enacted in the state where the Premises are located. A financing
statement or statements reciting this Mortgage to be a security agreement,
affecting all of said personal property aforementioned, shall be executed by the
Grantor and the Agent and appropriately filed. The remedies for any violation of
the covenants, terms and condition of the security agreement herein contained
shall be (i) as prescribed herein or (ii) as prescribed by general law or (iii)
as prescribed by the specific statutory consequences now or hereafter enacted
and specified in said Uniform Commercial Code, all at Agent's sole election. The
Grantor and the Agent agree that the filing of such financing statement(s) in
the records normally having to do with personal property shall never be
construed as in anywise derogating from or impairing this declaration and hereby
stated intention of the Grantor and the Agent that everything used in connection
with the production of income from the Premises or adapted for use therein or
which is described or reflected in this Mortgage, is, and at all times and for
all purposes and in all proceedings both legal or equitable shall be, regarded
as part of the real estate irrespective of whether (a) any such item is
physically attached to the improvements, (b) serial numbers are used for the
better identification of certain items capable of being thus identified in a
recital contained herein, or (c) any such item is referred to or reflected in
any such financing statement(s) so filed at any time. Similarly, the mention in
any such financing statement(s) of the rights in and to (aa) the proceeds of any
fire or hazard insurance policy of (bb) any award in eminent domain proceedings
for a taking or for loss of value or (cc) the Grantor's interest as lessor in
any present or future lease or rights to income growing out of the use or
occupancy of the Premises, whether pursuant to lease or otherwise, shall never
be construed as in anywise altering any of the rights of the Grantor or the
Agent as determined by this instrument or impugning the priority of the Agent's
lien granted hereby or by any other recorded document, but such mention in such
financing statement(s) is declared to be for the protection of the Agent in the
event any court shall at any time hold with respect to the foregoing (aa) or
(bb) or (cc),
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that notice of the Agent's priority of interest to be effective against a
particular class of persons, must be filed in the Uniform Commercial Code
records.
(b) The Grantor warrants that the names of the "Debtor" and the
"Secured Party" (which are the Grantor and the Agent, respectively), the address
of the "Secured Party" from which information concerning the security interest
may be obtained, and the address of "Debtor", are as set forth in Section 6.2,
hereof; and a statement indicating the types, or describing the items, of
collateral is set forth hereinabove. The location of the collateral which is
Tangible Personalty is upon the Land. The Grantor agrees to furnish the Agent
with notice of any change in the name, identity, corporate structure, residence,
principal place of business or mailing address of the Grantor within ten (10)
days of the effective date of any such change and the Grantor will promptly
execute any financing statements or other instruments deemed necessary by the
Agent to prevent any filed financing statement from becoming misleading or
losing its perfected status.
ARTICLE III
Events of Default
An Event of Default shall exist under the terms of this Mortgage upon
the existence of an Event of Default under the terms of the Credit Agreement.
ARTICLE IV
Foreclosure
4.1 Acceleration of Secured Indebtedness; Foreclosure. Upon the
occurrence and during the continuance of an Event of Default, the entire balance
of the Obligations and any other obligations due under the Credit Documents,
including all accrued interest, shall, at the option of the Agent, become
immediately due and payable. Upon failure to pay the Obligations or reimburse
any other amounts due under the Credit Documents in full at any stated or
accelerated maturity and in addition to all other remedies available to the
Agent at law or in equity, the Agent may foreclose the lien of this Mortgage
pursuant to the power of sale hereby granted or by judicial proceeding. The
Grantor hereby waives any statutory right of redemption in connection with such
foreclosure proceeding.
4.2 Proceeds of Sale. Following a foreclosure sale, the proceeds of
such sale shall, subject to applicable law, be applied in accordance with
Section 10 of the Security Agreement.
ARTICLE V
Additional Rights and Remedies of the Agent
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5.1 Rights Upon an Event of Default. Upon the occurrence and during the
continuance of an Event of Default, but only after the Agent has exercised its
right to declare the entire balance of the Obligations due and payable, the
Agent, immediately and without additional notice and without liability therefor
to the Grantor, except for gross negligence, willful misconduct or unlawful
conduct, may do or cause to be done any or all of the following to the extent
permitted by applicable law: (a) take physical possession of the Premises; (b)
exercise its right to collect the Rents and Profits; (c) enter into contracts
for the completion, repair and maintenance of the Improvements thereon; (d)
expend Loan funds and any rents, income and profits derived from the Premises
for the payment of any taxes, insurance premiums, assessments and charges for
completion, repair and maintenance of the Improvements, preservation of the lien
of this Mortgage and satisfaction and fulfillment of any liabilities or
obligations of the Grantor arising out of or in any way connected with the
Premises whether or not such liabilities and obligations in any way affect, or
may affect, the lien of this Mortgage; (e) enter into leases demising the
Premises or any part thereof; (f) take such steps to protect and enforce the
specific performance of any covenant, condition or agreement in the Notes, this
Mortgage, the Credit Agreement or the other Credit Documents, or to aid the
execution of any power herein granted; and (g) generally, supervise, manage, and
contract with reference to the Premises as if the Agent were equitable owner of
the Premises. Notwithstanding the occurrence of an Event of Default or
acceleration of the Loans, the Agent shall continue to have the right to pay
money, whether or not Loan funds, for the purposes described in Sections 2.2,
2.6 and 2.8 hereof, and all such sums and interest thereon shall be secured
hereby. The Grantor also agrees that any of the foregoing rights and remedies of
the Agent may be exercised at any time independently of the exercise of any
other such rights and remedies, and the Agent may continue to exercise any or
all such rights and remedies until the Event(s) of Default are cured with the
consent of the Agent or until foreclosure and the conveyance of the Premises to
the high bidder or until the Credit Agreement is no longer in effect or the
Obligations are otherwise satisfied or paid in full.
5.2 Appointment of Receiver. Upon the occurrence of an Event of
Default, the Agent shall be entitled, without additional notice and without
regard to the adequacy of any security for the indebtedness secured hereby
whether the same shall then be occupied as a homestead or not or the solvency of
any party bound for its payment, to make application for the appointment of a
receiver to take possession of and to operate the Premises, and to collect the
rents, issues, profits, and income thereof, all expenses of which shall be added
to the Obligations and secured hereby. The receiver shall have all the rights
and powers provided for under the laws of the state in which the Premises are
located, including without limitation, the power to execute leases, and the
power to collect the rents, sales proceeds, issues, profits and proceeds of the
Premises during the pendency of such foreclosure suit, as well as during any
further times when the Grantor, its successors or assigns, except for the
intervention of such receiver, would be entitled to collect such rents, sales
proceeds, issues, proceeds and profits, and all other powers which may be
necessary or are usual in such cases for the protection, possession, control,
management and operation of the Premises during the whole of said period. All
costs and expenses (including receiver's fees, attorney's fees and costs
incurred in connection with the appointment of a receiver) shall be secured by
this Mortgage. Notwithstanding the appointment of any receiver, trustee or other
custodian, the Agent shall be entitled, to retain possession and control of any
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cash or other instruments, at the time held by or payable or deliverable under
the terms of the Mortgage to the Agent to the fullest extent permitted by law.
5.3 Waivers. No waiver of any Event of Default shall at any time
thereafter be held to be a waiver of any rights of the Agent stated anywhere in
the Notes, this Mortgage, the Credit Agreement or any of the other Credit
Documents, nor shall any waiver of a prior Event of Default operate to waive any
subsequent Event(s) of Default. All remedies provided in this Mortgage, the
Notes, the Credit Agreement or any of the other Credit Documents are cumulative
and may, at the election of the Agent, be exercised alternatively, successively,
or in any manner and are in addition to any other rights provided by law.
5.4 Delivery of Possession After Foreclosure. In the event there is a
foreclosure sale hereunder and at the time of such sale, the Grantor or the
Grantor's heirs, devises, representatives, successors or assigns are occupying
or using the Premises, or any part thereof, each and all immediately shall
become the tenant of the purchaser at such sale, which tenancy shall be a
tenancy from day to day, terminable at the will of either landlord or tenant, at
a reasonable rental per day based upon the value of the property occupied, such
rental to be due daily to the purchaser; and to the extent permitted by
applicable law, the purchaser at such sale, notwithstanding any language herein
apparently to the contrary, shall have the sole option to demand possession
immediately following the sale or to permit the occupants to remain as tenants
at will. In the event the tenant fails to surrender possession of said property
upon demand, the purchaser shall be entitled to institute and maintain a summary
action for possession of the property (such as an action for forcible detainer)
in any court having jurisdiction.
5.5 Marshalling. The Grantor hereby waives, in the event of foreclosure
of this Mortgage or the enforcement by the Agent of any other rights and
remedies hereunder, any right otherwise available in respect to marshalling of
assets which secure the Loans and Letters of Credit and any other indebtedness
secured hereby or to require the Agent to pursue its remedies against any other
such assets.
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ARTICLE VI
General Conditions
6.1 Terms. The singular used herein shall be deemed to include the
plural; the masculine deemed to include the feminine and neuter; and the named
parties deemed to include their heirs, successors and assigns. The term "Agent"
shall include any payee of the indebtedness hereby secured or any transferee
thereof whether by operation of law or otherwise.
6.2 Notices. All notices and other communications required to be given
hereunder shall be in writing (including by telecopy) and shall have been duly
given and shall be effective (i) when delivered by hand, (ii) when transmitted
via telecopy (or other facsimile device) to the number set out below, (iii) the
Business Day following the day on which the same has been delivered prepaid to a
reputable national overnight air courier service, or (iv) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case to the respective parties at the address or
telecopy numbers set forth below, or at such other address as such party may
specify by written notice to the other parties hereto or to such other address
as may hereafter be given by notice in accordance with this paragraph.
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to the Grantor:
Herr Manufacturing Company
c/o Sleepmaster L.L.C.
2001 Lower Road
Linden, New Jersey 07036-6520
Telephone: 732-453-5019
Facsimile: 732-381-3925
with a copy to:
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, New York 1002-4675
Attn: Kimberly Taylor
Telephone: 212-446-4915
Facsimile: 212-446-4900
to the Agent:
First Union National Bank
One First Union Center, TW10
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
Telecopier: (704) 383-0288
Telephone: (704) 374-2698
6.3 Severability. If any provision of this Mortgage is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
6.4 Headings. The captions and headings herein are inserted only as a
matter of convenience and for reference and in no way define, limit, or describe
the scope of this Mortgage nor the intent of any provision hereof.
6.5 Conflicting Terms. In the event the terms and conditions of this
Mortgage conflict with the terms and conditions of the Credit Agreement, the
terms and conditions of the Credit Agreement shall control and supersede the
provisions of this Mortgage with respect to such conflicts.
6.6 Governing Law. This Mortgage shall be governed by and construed in
accordance with the internal law of the State of North Carolina as provided in
Section 9.13 of the Credit Agreement; provided, however, that the provisions of
this Mortgage relating to the
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creation, perfection and enforcement of the lien and security interest created
by this Mortgage in respect of the Premises and the exercise of each remedy
provided hereby, including the power of foreclosure or power of sale procedures
set forth in this Mortgage, shall be governed by and construed in accordance
with the internal law of the state where the Premises is located. In the event
of a conflict between the laws of the State of North Carolina and the internal
law with respect to creation, perfection and enforcement of the lien and
security interest created by this Mortgage, the laws of the state in which the
Premises is located shall govern.
6.7 Application of the Foreclosure Law. If any provision in this
Mortgage shall be inconsistent with any provision of the foreclosure laws of the
state where the Premises are located, the provisions of such laws shall take
precedence over the provisions of this Mortgage, but shall not invalidate or
render unenforceable any other provision of this Mortgage that can be construed
in a manner consistent with such laws.
6.8 WRITTEN AGREEMENT.
(a) THE RIGHTS AND OBLIGATIONS OF THE GRANTOR AND THE AGENT SHALL BE
DETERMINED SOLELY FROM THIS WRITTEN MORTGAGE AND THE OTHER LOAN DOCUMENTS, AND
ANY PRIOR ORAL OR WRITTEN AGREEMENTS BETWEEN THE AGENT AND THE GRANTOR
CONCERNING THE SUBJECT MATTER HEREOF AND OF THE OTHER LOAN DOCUMENTS ARE
SUPERSEDED BY AND MERGED INTO THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS.
(b) THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS MAY NOT BE VARIED BY ANY
ORAL AGREEMENTS OR DISCUSSIONS THAT OCCUR BEFORE, CONTEMPORANEOUSLY WITH, OR
SUBSEQUENT TO THE EXECUTION OF THIS MORTGAGE OR THE OTHER LOAN DOCUMENTS.
(c) THIS WRITTEN MORTGAGE AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
6.9 WAIVER OF JURY TRIAL. THE AGENT AND THE GRANTOR HEREBY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS
MORTGAGE. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY THE
AGENT AND THE GRANTOR, AND THE AGENT AND THE GRANTOR ACKNOWLEDGE THAT NO PERSON
ACTING ON BEHALF OF ANOTHER PARTY TO THIS AGREEMENT HAS MADE ANY REPRESENTATIONS
OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR
NULLIFY ITS EFFECT. THE AGENT AND THE GRANTOR FURTHER ACKNOWLEDGE THAT THEY HAVE
BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING
OF THIS MORTGAGE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
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SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.
6.10 Request for Notice. The Grantor requests a copy of any statutory
notice of default and a copy of any statutory notice of sale hereunder be mailed
to the Grantor at the address specified in Section 6.2 of this Mortgage.
6.11 Loan Charges. If the law of Pennsylvania is finally adjudicated to
govern the interest chargeable under the Credit Documents (notwithstanding the
choice of law provisions in the Credit Documents), and the law of Pennsylvania
is finally interpreted so that the interest or other loan charges collected or
to be collected in connection with the loans evidenced by the Credit Agreement
exceed the permitted limits under Pennsylvania law, then (a) any such loan
charge shall be reduced by the amount necessary to reduce the charge to the
permitted limit under Pennsylvania law; and (b) any sums already collected from
Grantor which exceeded permitted limits under Pennsylvania law will be refunded
to Grantor. The Agent may choose to make this refund by reducing the principal
owed under the Notes or by making a direct payment to Grantor. If a refund
reduces principal, the reduction will be treated as a partial prepayment without
any prepayment charge under the Notes.
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IN WITNESS WHEREOF, the Grantor has executed this Mortgage under seal
as of the above written date.
HERR MANUFACTURING COMPANY
By:
Name:
Title:
I certify that the address of the within Lenders is:
c/o First Union National Bank
One First Union Center, TW10
Charlotte, North Carolina 28288-0608
Attention: Syndication Agency Services
On behalf of the within Lenders
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COMMONWEALTH OF PENNSYLVANIA :
:
COUNTY OF__________________________ :
ON THIS, the _______ day of _________________, 19__, before me, a
Notary Public in and for the said Commonwealth, the undersigned officer,
personally appeared _________________________, who acknowledged himself to be
the _________________ of _________________________, a corporation, and that he
as such officer, being authorized to so do, executed the within instrument for
the purposes therein contained by signing the name of the corporation by himself
as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
______________________________
Notary Public
My Commission Expires:
______________________________
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EXHIBIT A
Lancaster County, PA
WRITTEN DESCRIPTION