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EXHIBIT 10.6
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MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND
FIXTURE FINANCING STATEMENT
by
SIMCALA, INC.
and
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MONTGOMERY
and
to
NATIONSBANK, N.A.,
as Agent for the Lenders party to
the Credit Agreement (herein defined)
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Dated
March 31, 1998
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THIS INSTRUMENT WAS PREPARED BY,
AND WHEN RECORDED SHOULD BE
RETURNED TO:
Moore & Van Allen PLLC
100 North Tryon Street, Floor 47
Charlotte, North Carolina 28202
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS
AND FIXTURE FINANCING STATEMENT
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND
FIXTURE FINANCING STATEMENT (this "Mortgage") is given as of March 31, 1998, by
SIMCALA, INC., a Delaware corporation (the "Borrower"), having its principal
offices at Ohio Ferro Alloys Road, Mt. Meigs, Alabama 36057, and THE INDUSTRIAL
DEVELOPMENT BOARD OF THE CITY OF MONTGOMERY (the "IDB"), a public corporation
organized and existing under the laws of the State of Alabama, and in particular
Article 4, Chapter 54, Title 11 of the Code of Alabama of 1975, as amended, in
favor of NATIONSBANK, N.A., a national banking association, as agent for the
lenders party to the Credit Agreement hereinafter defined (in such capacity, the
"Agent"), having its principal offices at 101 North Tryon Street, 15th Floor,
Charlotte, North Carolina 28255.
RECITALS
A. The IDB is the owner of the real property situated in Montgomery
County, Alabama, legally described on Exhibit A attached hereto and made a part
hereof (the "Real Property");
B. Pursuant to that certain Consolidated, Amended and Restated Lease
Agreement dated as of January 1, 1995, by and between the IDB and the Borrower
and recorded in Book 1542 at Page 870 in the Montgomery County Public Registry
(as amended, modified, supplemented, extended or renewed from time to time, the
"IDB Lease"), entered into in connection with those certain $6,000,000 Taxable
Industrial Revenue Bonds (SIMCALA, Inc. Project), Series 1995, issued by the
State Industrial Development Authority, an Alabama public corporation (the
"Bonds"), the Borrower leased from the IDB the Real Property and the
improvements, fixtures and equipment located thereon;
C. The Agent, as agent for the Lenders, and the Lenders have agreed to
establish a $15,000,000 credit facility in favor of the Borrower pursuant to the
terms of that certain Credit Agreement dated as of the date hereof among the
Borrower, the guarantors party thereto, the lenders party thereto (the
"Lenders") and the Agent (as amended, modified, supplemented, extended, renewed
or replaced from time to time, the "Credit Agreement"; terms used but not
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otherwise defined herein shall have the meanings provided in the Credit
Agreement) and as evidenced by (i) the revolving credit promissory notes of the
Borrower (as amended, modified, supplemented, extended, renewed or replaced from
time to time, the "Notes"); and (ii) those letters of credit for the account of
the Borrower or any other Credit Party (as referenced in the Credit Agreement,
as amended, modified, supplemented, extended, renewed or replaced from time to
time, the "Letters of Credit"). Hereinafter, the loans and extensions of credit
under the Credit Agreement may be called the "Loan".
D. It is a condition precedent to the obligation of the Lenders to make
the Loan pursuant to the terms of the Credit Agreement that this Mortgage be
executed and delivered by the Borrower and the IDB.
E. In order to secure the payment and performance of the Obligations
(as hereinafter defined), the Borrower and the IDB have agreed to execute and
deliver this Mortgage.
F. The obligations secured by this Mortgage (the "Obligations") are as
follows:
(i) the prompt performance and observance by the Borrower of
all obligations of the Borrower under the Credit Agreement, the Notes
(as defined in the Credit Agreement), this Mortgage and the other
Credit Documents; and
(ii) all other indebtedness, liabilities and obligations of
any kind or nature, now existing or hereafter arising pursuant to the
Credit Documents, owing from the Borrower to any Lender or the Agent,
howsoever evidenced, created, incurred or acquired, whether primary,
secondary, direct, contingent, or joint and several, including, without
limitation, all liabilities arising under Hedging Agreements (as
defined in the Credit Agreement) and all obligations and liabilities
incurred in connection with collecting and enforcing the Obligations.
G. The maximum principal indebtedness secured hereby is $15,000,000,
plus amounts which may be advanced by the Agent or the Lenders in protection of
the Mortgaged Property (as hereinafter defined) or this Mortgage.
H. The Obligations shall mature on or before December 1, 2019 (the
"Maturity Date").
NOW, THEREFORE, in consideration of the Lenders making the Loan and of
the Issuing Lender issuing the Letters of Credit, and to secure the Loan and
payment and performance of the Obligations, including without limitation all
advances and readvances of principal under the Notes and all draws under the
Letters of Credit, together with all interest and other charges due thereon, and
also to secure the performance of all terms, conditions and agreements of the
Credit Agreement, the Notes, this Mortgage and the other Credit Documents, the
Borrower and the IDB do hereby grant, bargain, sell and convey to the Agent its
successors and assigns, forever, with power of sale, and grant to the Agent, its
successors and assigns, a security interest in, the following, all of which is
called the "Mortgaged Property":
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A. LAND AND IMPROVEMENTS
All of the IDB's and the Borrower's rights, title and interests in the
Real Property and all mineral rights, hereditaments, easements and appurtenances
thereto (collectively the "Land"), and all improvements and structures thereon
(the "Improvements"), and all of the Borrower's rights, title and interest in
the Mortgaged Property arising from and out of the IDB Lease; and
B. FIXTURES AND PERSONAL PROPERTY
All fixtures (the "Fixtures"), and all machinery, equipment and
personal property (collectively, the "Personal Property") now or hereafter
located on, in or under the Land and the Improvements, or usable in connection
with the Land or the Improvements, and which are owned by the IDB or the
Borrower or in which the IDB or the Borrower has an interest, including any
construction and building materials stored on and to be included in the
Improvements, plus any repairs, replacements and betterments to any of the
foregoing and the proceeds and products thereof; and
C. LEASES AND RENTS
All rights of the Borrower and the IDB with respect to the IDB Lease,
and all rights of the Borrower with respect to tenants or occupants now or
hereafter occupying any part of the Land or the Improvements, if any, including
all subleases and licenses and rights in connection therewith, whether oral or
written (collectively the "Subleases"), and all rents, income, both from
services and occupation, royalties, revenues and payments, including prepayments
and security deposits (collectively the "Rents"), which are now or hereafter due
or to be paid in connection with the Land, the Improvements, the Fixtures or the
Personal Property; and
D. INSURANCE AND CONDEMNATION PROCEEDS
All proceeds of insurance and condemnation or other conveyance of the
Land and the Improvements; and
E. AFTER-ACQUIRED PROPERTY AND PROCEEDS
All after-acquired property similar to the property herein described
and conveyed which may be subsequently acquired by the IDB or the Borrower and
used in connection with the Land, the Improvements, the Fixtures, the Personal
Property and other property; and all cash and non-cash proceeds and products of
all of the foregoing property (provided, however, that the inclusion of proceeds
and products shall not be deemed to permit any sale or other disposition of the
Mortgaged Property or any part thereof in violation of the terms and provisions
of this Mortgage).
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TO HAVE AND TO HOLD the same, and all estate therein, together with all
the rights, privileges and appurtenances thereunto belonging, to the use and
benefit of the Agent, its successors and assigns, forever.
BUT, THIS CONVEYANCE IS MADE UPON THE FOLLOWING CONDITIONS
NEVERTHELESS, that is to say: (a) the Borrower shall well and truly pay when and
as due the aggregate of all of the Obligations, including without limitation all
advances and re-advances of principal under the Notes and all draws under the
Letters of Credit, together with all interest and other charges due therein, (b)
the Borrower and the IDB shall have fulfilled and performed all of the terms,
conditions and agreements contained in the Credit Agreement, the Notes, this
Mortgage and the other Credit Documents, (c) the Notes shall have been satisfied
and terminated in accordance with their terms and the Lenders shall have no
obligation to extend any further credit under the Credit Agreement or the Notes,
and (d) an appropriate instrument in satisfaction of this Mortgage, executed by
a duly authorized officer of the Agent, shall have been duly recorded in the
Probate Office in which this Mortgage is originally recorded, then this
conveyance shall become void; otherwise, the same shall remain in full force and
effect.
This Mortgage constitutes (a) a real estate mortgage under the laws of
the State of Alabama, (b) a security agreement within the meaning of the Uniform
Commercial Code as in effect in the State of Alabama (the "UCC"), with respect
to all property described herein as to which a security interest may be granted
and/or perfected pursuant to the UCC (and is intended to afford the Agent, to
the fullest extend allowed by law, the rights and remedies of a secured party
under the UCC), and (c) a financing statement filed as a fixture filing for
purposes of Article 9 of the UCC.
The Notes evidence and this Mortgage secures an open-end revolving line
of credit under which the Borrower may borrow and repay, and reborrow and repay,
amounts from the Lenders from time to time up to a maximum principal amount to
any one time outstanding not exceeding $15,000,000. Advances under the Notes are
obligatory. The Notes do not require that the Borrower maintain any minimum
balance under the revolving line of credit and, therefore, at times there may be
no outstanding debt under the Notes. This Mortgage shall not be deemed satisfied
nor shall title to the Mortgaged Property be divested from the Agent by the
payment in full of all the debt at any one time evidenced by the Notes, since in
each case further borrowings can thereafter be made from time to time by the
Borrower under the terms of the Notes and all such borrowings are to be included
in the Obligations. The Borrower agrees to pay or reimburse the Agent and the
Lenders for any and all recording and mortgage taxes and fees which at any time
and from time to time may be paid or incurred by the Agent or the Lenders by
virtue of the recordation of this Mortgage or any advances or readvances of
principal under the Notes.
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BORROWER FURTHER agrees as follows:
ARTICLE I
AGREEMENTS
Section 1.1 Performance of Obligations; Incorporation by Reference. The
Borrower shall pay and perform the Obligations as provided in the Credit
Agreement and the other Credit Documents. Time is of the essence hereof. All of
the covenants, obligations, agreements, warranties and representations of the
Borrower contained in the Credit Agreement and the other Credit Documents and
all of the terms and provisions thereof, are hereby incorporated herein and made
a part hereof by reference as if fully set forth herein. If there is a conflict
or inconsistency between the Credit Agreement and this Mortgage, the provisions
of the Credit Agreement shall control and govern.
Section 1.2 Further Assurance. If the Agent requests, the Borrower and
the IDB shall sign and deliver and cause to be recorded as the Agent shall
direct any further mortgages, instruments of further assurances, certificates
and other documents as the Agent reasonably may consider necessary or desirable
in order to perfect, continue and preserve the Obligations and the Agent's
rights, title, estate, liens and interests under the Credit Documents. The
Borrower further agrees to pay to the Agent, upon demand, all costs and expenses
incurred by the Agent or the Lenders in connection with the preparation,
execution, recording, filing and refiling of any such documents, including
reasonable attorneys' fees and title insurance costs.
Section 1.3 Sale, Transfer, Encumbrances. If the Borrower or the IDB
sells, conveys, transfers or otherwise disposes of, or encumbers, all or any
part of its interest in the Mortgaged Property, whether voluntarily,
involuntarily or by operation of law, without the prior written consent of the
Agent, the Agent shall have the option to declare the Obligations immediately
due and payable without notice, except as to Liens that are permitted by the
Credit Agreement. In addition, during the term of this Mortgage there shall not
be any change in the ownership, membership or control of the Borrower unless the
Agent in its sole discretion has given its approval, which approval shall not be
unreasonably withheld or delayed. Notwithstanding anything to the contrary
contained herein, Agent hereby consents to the sale of the Mortgaged Property
from the IDB to the Borrower pursuant to the purchase option contained in the
IDB Lease.
Section 1.4 Insurance.
(A) Types Required. The Borrower shall maintain insurance for
the Mortgaged Property as set forth in Section 7.6 of the Credit Agreement. In
addition to the requirements set forth in Section 7.6 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 insured
mortgagee must be submitted to the Agent. The policy must be in such amount,
covering such risks and liabilities and
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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
Borrower shall be applied as set forth in Section 7.6 of the Credit Agreement.
Section 1.5 Taxes and Fees. The Borrower will pay all taxes, including,
but not limited to, all ad valorem taxes, mortgage taxes, privilege taxes,
recording taxes and other taxes, general and special assessments, insurance
premiums, permit fees, inspection fees, license fees, water and sewer charges,
franchise fees and equipment rents and any other charges or fees against it or
the Mortgaged Property (and the Borrower, upon request of the Agent, will submit
to the Agent receipts evidencing said payments) in accordance with Section 7.5
of the Credit Agreement. The Borrower shall keep the Mortgaged Property free and
clear of all liens, encumbrances, easements, covenants, conditions, restrictions
and reservations except Permitted Liens.
Section 1.6 Escrow Payments. If requested by the Agent, which request
shall only be made after an Event of Default hereunder, the Borrower shall, for
so long as such Event of Default continues, deposit with the Agent on the same
date as payments are due under the Credit Agreement the amount reasonably
estimated by the Agent to be necessary to enable the Agent to pay, at least five
(5) days before they become due, all taxes, assessments and governmental charges
and levies of every kind or nature whatsoever ( collectively, the "Impositions")
against the Mortgaged Property and the premiums upon all insurance required
hereby to be maintained with respect to the Mortgaged Property. All funds so
deposited shall secure the Obligations. Such deposits shall be held by the
Agent, or its nominee, in a non-interest bearing account and may be commingled
with other funds. Such deposits shall be used to pay such Impositions and
insurance premiums when due. Any excess sums so deposited shall be retained by
the Agent and shall be applied to pay said items in the future, unless the
Obligations have been paid and performed in full, in which case all excess sums
so paid shall be refunded to the Borrower. Upon the occurrence and during the
continuation of an Event of Default, the Agent may apply any funds in said
account against the Obligations in such order as the Agent may determine.
Section 1.7 Maintenance and Repair; Compliance with Laws. Except as
provided otherwise in the Credit Agreement, the Borrower will abstain from and
will not permit the commission of waste in or about the Mortgaged Property and
will maintain the Mortgaged Property in good condition and repair, ordinary wear
and tear excepted. The Borrower will do, or cause to be done, all such things as
may be required by law in order fully to protect the security and all rights of
the Agent under this Mortgage. The Borrower shall not cause or permit the lien
of this Mortgage to be impaired in any way.
Section 1.8 Subleases.
(A) The Borrower represents that there is no existing
Sublease. The Borrower shall not enter into or amend any Sublease
without the Agent's prior written consent, and shall furnish to the
Agent, upon execution, a complete and fully executed copy of each
Sublease. The Borrower shall provide the Agent with a copy of each
proposed Sublease
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requiring the consent of the Agent and with any information requested
by the Agent regarding the proposed Tenant (as hereinafter defined)
thereunder. The Agent may declare each Sublease to be prior or
subordinate to this Mortgage, at the Agent's option.
(B) The Borrower shall, at its cost and expense, perform each
obligation to be performed by the landlord under each Sublease; not
borrow against, pledge or further assign any rents or other payments
due thereunder; not permit the prepayment of any rents or other
payments due for more than thirty (30) days in advance; and not permit
any Tenant to assign its Sublease or sublet the Mortgaged Property
covered by its Sublease, unless required to do so by the terms thereof
and then only if such assignment does not work to relieve the Tenant of
any liability for performance of its obligations thereunder.
(C) If any Tenant shall default under its Sublease, the
Borrower shall, in the ordinary course of business, exercise sound
business judgment with respect to such default, but may discount,
compromise, forgive or waive claims or discharge the Tenant from its
obligations under the Sublease or terminate or accept a surrender of
the Sublease.
(D) If the Borrower fails to perform any obligations of
landlord under any Sublease or if the Agent becomes aware of or is
notified by any Tenant of a failure on the part of the Borrower to so
perform, the Agent may, but shall not be obligated to, without waiving
or releasing the Borrower from any obligation in this Agreement or any
of the other Credit Documents, remedy such failure, and the Borrower
agrees to repay upon demand all sums incurred by the Agent or the
Lenders in remedying any such failure, together with interest thereon
from the date incurred at the rate of interest set forth in Section 3.1
of the Credit Agreement.
(E) For purposes of this Mortgage, the following terms shall
have the following meanings:
(I) "Sublease": Any lease or other document or
agreement, written or oral, permitting any Person to use or
occupy any part of the Mortgaged Property.
(II) "Person": Person shall have the meaning
assigned thereto in the Credit Agreement.
(III) "Tenant": Any person or party using or
occupying any part of the Mortgaged Property pursuant to a
Sublease.
Section 1.9 Indemnity. The Borrower shall indemnify the Agent, the
Lenders, the IDB and their directors, officers, agents and employees
(collectively the "Indemnified Parties") against, and hold the Indemnified
Parties harmless from, all losses, damages, suits, claims, judgments, penalties,
fines, liabilities, costs and expenses by reason of, or on account of, or in
connection with the construction, reconstruction or alteration of the Mortgaged
Property, or any accident, injury, death or damage to any person or property
occurring in, on or about the Mortgaged Property or any street, drive, sidewalk,
curb or passageway adjacent thereto, except to the extent
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that such losses, damages, suits, claims, judgments, penalties, fines,
liabilities, costs and expenses are directly caused by the Indemnified Party's
negligence, wanton or willful misconduct. The indemnity contained in this
Section shall include costs of defense of any such claim asserted against an
Indemnified Party, including reasonably attorneys' fees. The indemnity contained
in this Section shall survive payment and performance of the Obligations and
satisfaction and release of this Mortgage and any foreclosure thereof or
acquisition of title by deed in lieu of foreclosure.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Ownership. The IDB covenants with the Agent, its successors
and assigns, that the IDB is lawfully seized in fee simple of the Real Property
and the IDB and the Borrower covenant with the Agent that they are the lawful
owners of the Improvements, Fixtures and Personal Property, and have good right
to sell and convey the Mortgaged Property as aforesaid; that the Mortgaged
Property is free of all encumbrances except for Permitted Liens, and that the
IDB and the Borrower will forever warrant and forever defend their respective
titles to the Mortgaged Property unto the Agent, its successors and assigns,
against the lawful claims and demands of all persons.
Section 2.2 Liens, Compliance with Laws. The Borrower makes the
following representations and warranties: that the Mortgaged Property is free
from any and all liens and encumbrances, except for Permitted Liens; and that if
the Borrower shall, at any time prior to payment in full of the Obligations,
acquire the fee title or any greater estate in any of the Mortgaged Property,
the lien of this Mortgage shall attach, extend to cover and be a lien upon such
fee simple title or other estate. All applicable zoning, environmental, land
use, subdivision, building, fire, safety and health laws, statutes, ordinances,
codes, rules, regulations and requirements affecting the Mortgaged Property
permit the current use and occupancy thereof, and the Borrower has obtained all
consents, permits and licenses required for such use. The Borrower has examined
and is familiar with all applicable laws, statutes, ordinances, codes and
governmental rules, regulations and requirements affecting the Mortgaged
Property, and the Mortgaged Property complies with all of the foregoing.
Section 2.3 Use. The Mortgaged Property is not homestead property nor
is it agricultural property or in agricultural use.
Section 2.4 Utilities; Services. The Mortgaged Property is serviced by
all necessary public utilities, and all such utilities are operational and have
sufficient capacity for current uses. There is no contract or agreement
providing for services to or maintenance of the Mortgaged Property which cannot
be canceled upon thirty (30) days' or less notice, except as approved by the
Agent, which approval shall not be reasonably withheld.
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Section 2.5 Compliance with IDB Lease.
(A) The Borrower covenants and agrees that it will at all
times fully perform and comply with all agreements, covenants, terms
and conditions imposed upon or assumed by it as tenant under the IDB
Lease, that it will not surrender its leasehold estate and interests,
nor exercise any right to terminate or cancel the IDB Lease (except in
the exercise of the Borrower's purchase option in the IDB Lease), and
that it will not, without the express written consent of the Agent,
modify, change, supplement, alter or amend the IDB Lease, and as
further security for the repayment of the Obligations and for the
performance of the covenants contained herein and in the IDB Lease, the
Borrower hereby assigns to the Agent all of its rights, privileges and
prerogatives as tenant under the IDB Lease to terminate, cancel,
modify, change, supplement, alter or amend the IDB Lease, and any such
termination, cancellation, modification, change, supplement,
alteration, or amendment of the IDB Lease without the prior written
consent thereto by the Agent, shall be void and of no force and effect;
provided that so long as no Event of Default exists, the Agent shall
have no right to terminate, cancel, modify, change, supplement, alter
or amend the IDB Lease.
(B) The Borrower covenants and agrees that no release or
forbearance of any of the Borrower's obligations under the IDB Lease,
pursuant to the IDB Lease or otherwise, shall release the Borrower from
any of its obligations under this Mortgage, including its obligations
with respect to the payment of rent as provided for in the IDB Lease
and the performance of all of the terms, provisions, covenants,
conditions and agreements contained in the IDB Lease to be kept,
performed and complied with by the Borrower.
(C) The Borrower shall not borrower against, pledge or further
assign its rights under the IDB Lease.
(D) The Borrower shall not waive or fail to exercise its
rights to renew and extend the term of the IDB Lease without the
Agent's prior written consent.
(E) If the Borrower fails to perform any covenants or
obligations of the Borrower under the IDB Lease, the Agent may (but
shall not be obligated to) take any action the Agent deems necessary or
desirable to prevent or to cure any such failure by the Borrower. Upon
receipt by the Agent from the IDB of any notice of default by the
Borrower under the IDB Lease, the Agent may rely thereon and take any
action as aforesaid to cure such default even though the existence of
such default or the nature thereof is questioned or denied by the
Borrower or by any party on behalf of the Borrower, unless such default
is being contested in a manner permitted by the Credit Agreement and
for which reserves or security has been provided. The Borrower hereby
expressly grants to the Agent, and agrees that the Agent shall have,
the absolute and immediate right to enter in and upon the Mortgaged
Property or any part thereof to such extent and as often as the Agent,
in its sole discretion, deems necessary or desirable in order to
prevent or to cure any such default by the Borrower. So long as no
Event of
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Default exists, the Agent shall give at least one Business Day's prior
notice of any such entry, but no prior notice shall be required with
respect to any entry during the continuance of an Event of Default. The
Agent may pay and expend such sums of money as the Agent in its sole
discretion deems necessary for any such purpose, and the Borrower
hereby agrees to pay to the Agent, immediately and without demand, all
such sums so paid and expended by the Agent or the Lenders, together
with interest thereon at the rate of interest set forth in Section 3.1
of the Credit Agreement. All sums so paid and expended by the Agent or
the Lenders, together with interest thereon, shall be added to and be
secured by the lien of this Mortgage.
(f) The IDB agrees that: (i) the Agent's lien upon or security
interest in the Personal Property owned by the Borrower is prior and
superior to any interest, lien or claim of any nature the IDB may now
have or hereafter obtain in such Personal Property whether by operation
of law, contract or otherwise; (ii) either the Borrower or the Agent
may remove such Personal Property from the Land at any time without
hindrance on the part of the IDB, and, upon request, the IDB will grant
the Agent (or its representatives) access to the Land so that the Agent
(or its representatives) may remove such Personal Property; and (iii)
such Personal Property shall remain personal property (to the extent
such Personal Property is not already a fixture as of the date hereof)
and shall not become fixtures, notwithstanding the manner or mode of
the attachment of the Personal Property to the Land. The IDB hereby
waives any rights it may now or hereafter have in such Personal
Property, including without limitation, any lien rights available under
applicable law. Agent will repair, at its expense, any material damage
to the Mortgaged Property resulting from Agent's removal of such
Personal Property.
ARTICLE III
EMINENT DOMAIN
Section 3.1 Eminent Domain. The Borrower 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 Mortgaged Property or any
rights appurtenant thereto to which the Borrower is entitled, and such proceeds
or awards shall be applied in the same manner the insurance proceeds are applied
pursuant to Section 7.6 of the Credit Agreement. The Borrower 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 Mortgaged Property, or shall
commence any proceedings to condemn or otherwise take pursuant to the power of
eminent domain a material portion of the Mortgaged Property, the Borrower shall
promptly notify the Agent of such requirement or commencement of proceeding (for
demolition, condemnation or other taking).
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ARTICLE IV
DEFAULTS AND REMEDIES
Section 4.1 Events of Default. An Event of Default, as defined in the
Credit Agreement, shall constitute an Event of Default hereunder, as shall
failure of the Borrower to comply with any term, covenant or condition of the
IDB Lease, if such failure is not cured within the grace period provided for in
the IDB Lease, if any.
Section 4.2 Remedies. Upon the occurrence of an Event of Default, all
of the Obligations shall, at the option of the Agent, be accelerated and become
immediately due and payable without notice or declaration to the Borrower. The
Obligations shall be due and payable without presentment, demand or further
notice of any kind. The Agent shall have the right to proceed to protect and
enforce its rights by one or more of the following remedies:
(A) Bring a court action at law or in equity to foreclose this
Mortgage or to enforce its provisions or any of the obligations secured
by this Mortgage, either or both, concurrently or otherwise, and one
action or suit shall not abate or be a bar to or waiver of the Agent's
right to institute or maintain the other, provided that the Agent shall
have only one payment and satisfaction of the Obligations;
(B) Cause any or all of the Mortgaged Property to be sold
under the power of sale granted hereby in any manner permitted by
applicable law;
(c) Take physical possession of the Mortgaged Property;
(d) Exercise its right to collect the Rents;
(e) Enter into contracts for the completion, repair and
maintenance of the Improvements thereon;
(f) Expend Loan funds and any rents, income and profits
derived from the Mortgaged Property for 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 Borrower arising out of or in any way connected with
the construction of Improvements on the Mortgaged Property whether or
not such liabilities and obligations in any way affect, or may affect,
the lien of this Mortgage;
(g) Enter into leases demising the Mortgaged Property or any
part thereof;
(h) 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;
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(i) Generally, supervise, manage, and contract with reference
to the Mortgaged Property as if the Agent were equitable owner of the
Mortgaged Property. The Borrower 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 or waived with the
consent of the Required Lenders or the Lenders (as required by the
Credit Agreement) or until foreclosure and the conveyance of the
Mortgaged Property or until the Loans and Letters of Credit and other
indebtedness secured hereby are otherwise satisfied or paid in full and
the Commitments are terminated;
(j) Sell the Mortgaged Property at public outcry to the
highest bidder for cash in front of the front or main door of the court
house of the county where said Mortgaged Property, or a substantial and
material part thereof, if located, either in person or by auctioneer,
after having first given notice of the time, place and terms of sale,
together with a description of the Mortgaged Property, by publication
once a week for three (3) successive weeks prior to said sale in some
newspaper published in the county (or all counties, if more than one)
in which the Mortgaged Property is located (but if no newspaper is
published in any such county, the notice shall be published in a
newspaper published in an adjoining county for three successive weeks),
and upon payment of the purchase money, the Agent or any person
conducting the sale for the Agent is authorized to execute to the
purchaser at said sale a deed to the Mortgaged Property so purchased.
Any such sale shall be held between the hours of 11:00 a.m.. and 4:00
p.m. on the day designated for the exercise of the power of sale
hereunder. The Agent may bid at said sale and purchase said Mortgaged
Property, or any part thereof, if the highest bidder therefor. The
purchaser at any such sale shall be under no obligation to see to the
proper allocation of the purchase money. At the foreclosure sale, the
Mortgaged Property may be offered for sale and sold as a whole without
first offering it in any other manner or may be offered for sale and
sold in any other manner the Agent may elect in its sole discretion.
Any such sale shall operate as a foreclosure of this Mortgage only as
to the Mortgaged Property sold, and if the Obligations and all other
sums secured hereby are not thereby satisfied in full, the other
Mortgaged Property shall continue as security therefor and there may be
a further foreclosure of this Mortgage, either by sale under power of
sale or by judicial foreclosure;
(k) Exercise any other right or remedy available under law or
in equity or under the Credit Documents
Section 4.3 Appointment of Receiver. If upon the maturity of any of the
Loan or any other amounts or obligations under the Credit Documents, the same
remain unpaid, or upon the occurrence and continuance of an Event of Default,
the Agent as a matter of right shall be entitled to the appointment of a
receiver or receivers for all or any part of the Mortgaged Property, to take
possession of and to operate the Mortgaged Property, and to collect the rents,
issues, profits, and income thereof, all expenses of which shall be added to the
indebtedness secured hereby, whether such receivership be incident to a proposed
sale (or sales) of such property or otherwise, and without regard to the value
of the Mortgaged Property or the solvency of any Person or
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14
Persons liable for the payment of the indebtedness secured hereby, and the
Borrower does hereby irrevocably consent to the appointment of such receiver or
receivers, waives any and all defenses to such appointment, and agrees not to
oppose any application therefor by Agent. Nothing herein is to be construed to
deprive the Agent of any other right, remedy or privilege it may have under the
law to have a receiver appointed. Any money advanced by the Agent in connection
with any such receivership shall be a demand obligation (which obligation the
Borrower hereby promises to pay) owing by the Borrower to the Agent pursuant to
this Mortgage.
Section 4.4 Proceeds. The proceeds of any sale under this Mortgage will
be applied in accordance with Section 3.15(b) of the Credit Agreement.
Section 4.5 The Agent's Option on Foreclosure. At the option of the
Agent, this Mortgage may be foreclosed as provided by law or in equity, in which
event the Agent's attorneys' fees shall, among other costs and expenses, be
allowed and paid out the proceeds of the sale. In the event the Agent exercises
its option to foreclose the Mortgage in equity, the Agent may, at its option,
foreclose this Mortgage subject to the rights of any tenants of the Mortgaged
Property, and the failure to make any such tenants parties defendants to any
such foreclosure proceeding and to foreclose their rights will not be, nor be
asserted by the Borrower to be a defense to any proceedings instituted by the
Agent to collect the sums secured hereby, or any deficiency remaining unpaid
after the foreclosure sale of the Mortgaged Property.
Section 4.6 Expenses of Exercising Rights Powers and Remedies. The
reasonable expenses (including any receiver's fees, attorneys' fees, appraisers'
fees, environmental engineers' and/or consultant's fees, costs incurred for
documentary and expert evidence, stenographers' charges, publication costs,
costs (which may be estimated as to items to be expended after entry of the
decree of foreclosure) of procuring all abstracts of title, continuations of
abstracts of title, title searches and examinations, title insurance policies
and commitments and extensions therefor, UCC and chattel lien searches, and
similar data and assurances with respect to title as the Agent may deem
reasonably necessary either to prosecute any foreclosure action or to evidence
to bidders at any sale which may be had pursuant to any foreclosure decree the
true condition of the title to or the value of the Mortgaged Property, and
agent's compensation) incurred by the Agent or the Lenders after the occurrence
of any Event of Default and/or in pursuing the rights, powers and remedies
contained in this Mortgage shall be immediately due and payable by the Borrower,
with interest thereon from the date incurred at the rate of interest set forth
in Section 3.1 of the Credit Agreement, and shall be added to the indebtedness
secured by this Mortgage.
Section 4.7 Restoration of Position. In case the Agent shall have
proceeded to enforce any right under this Mortgage by foreclosure, sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then, and in every such
case, the Borrower and the Agent shall be restored to their former positions and
rights hereunder with respect to the Mortgaged Property subject to the lien
hereof.
Section 4.8 Waivers. The Borrower and the IDB waive all rights to
direct the order or manner in which any of the Mortgaged Property will be sold
in the event of any sale under this Mortgage, and also any right to have any of
the Mortgaged Property marshalled upon any sale.
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15
The Agent may in its discretion sell all the personal and real property together
or in parts, in one or more sales, and in any sequence the Agent selects. No
waiver of any provision hereof shall be implied from the conduct of the parties.
Any such waiver much be in writing and must be signed by the party against which
such waiver is sought to be enforced. The waiver or release of any breach of the
provisions set forth herein to be kept and performed shall not be a waiver or
release of any preceding or subsequent breach of the same or any other
provision. No receipt of partial payment after acceleration of any of the
Obligations shall waive the acceleration. No payment by the Borrower or receipt
by the Agent of a lesser amount than the full amount secured hereby shall be
deemed to be other than on account of the sums due and payable hereunder, nor
shall any endorsement or statement on any check or any letter accompanying any
check or payment be deemed an accord and satisfaction, and the Agent may accept
any check or payment without prejudice to the Agent's right to recover the
balance of such sums or to pursue any other remedy provided in this Mortgage.
The consent by the Agent to any matter or event requiring such consent shall not
constitute a waiver of the necessity for such consent to any subsequent matter
or event. 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 Credit
Agreement, the Notes, this Mortgage 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 the Credit Agreement, the Notes,
this Mortgage 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.
Section 4.9 The Agent's Right to Cure Defaults. If the Borrower shall
fail to comply with any of the terms of the Credit Documents with respect to the
procuring of insurance, the payment of taxes, assessments and other charges, the
keeping of the Mortgaged Property in repair, or any other term contained herein
or in any of the other Credit Documents, the Agent may make advances to perform
the same without releasing the Borrower from any of the Obligations. The
Borrower agrees to repay upon demand all sums so advanced and all sums expended
by the Agent or the Lenders in connection with such performance, including
without limitation attorneys' fees, with interest at the rate of interest set
forth in Section 3.1 of the Credit Agreement from the dates such advances are
made, and all sums so advanced and/or expenses incurred, with interest, shall be
secured hereby, but no such advance and/or incurring of expense by the Agent or
the Lenders, shall be deemed to relieve the Borrower from any default hereunder
or under any of the other Loan Documents, or to release the Borrower from any of
the Obligations.
Section 4.10 Suits and Proceedings. The Agent shall have the power and
authority, upon prior notice to the Borrower, to institute and maintain any
suits and proceedings as the Agent may deem advisable to (i) prevent any
impairment of the Mortgaged Property by any act which may be unlawful or by any
violation of this Mortgage, (ii) preserve or protect its interest in the
Mortgaged Property, or (iii) restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid, if, in the sole opinion of the Agent, the
enforcement of or compliance with such enactment, rule or order might impair the
security hereunder or be prejudicial to the Agent's interest.
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Section 4.11 Delivery of Possession After Foreclosure. In the event
there is a foreclosure sale hereunder and at the time of such sale, the Borrower
or the Borrower's heirs, devises, representatives, successors or assigns are
occupying or using the Mortgaged Property, 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.
ARTICLE V
MISCELLANEOUS
Section 5.1 Binding Effect; Survival; Number; Gender. This Mortgage
shall be binding on and inure to the benefit of the parties hereto, and their
respective heirs, legal representatives, successors and assigns. All agreements,
representations and warranties contained herein or otherwise heretofore made by
the IDB or the Borrower to the Agent shall survive the execution, delivery and
foreclosure hereof. The singular of all terms used herein shall include the
plural, the plural shall include the singular, and the use of any gender herein
shall include all other genders, where the context so requires or permits.
Section 5.2 Severability. The unenforceability or invalidity of any
provision of this Mortgage as to any person or circumstance shall not render
that provision unenforceable or invalid as to any other person or circumstance.
Section 5.3 Notices. Any notice or other communication to any party in
connection with this Mortgage shall be in writing and shall be sent by manual
delivery, telegram, telex, facsimile transmission, overnight courier or United
States mail (postage prepaid) addressed to such party at the address specified
below, or at such other address as such party shall have specified to the other
party hereto in writing. All periods of notice shall be measured from the date
of delivery thereof if manually delivered, from the date of sending thereof if
sent by telegram, telex or facsimile transmission, from the first Business Day
after the date of sending if sent by overnight courier, or from three Business
Days after the date of mailing if mailed. Notices shall be given to or made upon
the respective parties hereto at their respective addresses set forth below:
If to the Borrower: Simcala, Inc.
Ohio Ferro Alloys Road
Mt. Meigs, Alabama 36057
Attention: Chief Financial Officer
Telecopy No. (334)215-7560
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If to the IDB: The Industrial Development Board of
The City of Montgomery
P.O. Box 79
Montgomery, Alabama 36101
If to the Agent: NationsBank, N.A.
101 North Tryon Street, Floor 15
Charlotte, NC 28255
Attn: Agency Services
Telecopy No. (704) 388-3916
Either party may change its address for notices by a notice given not less than
five (5) Business Days prior to the effective date of the change.
Section 5.4 Applicable 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 11.10 of the Credit Agreement; provided, however, that the
provisions of this Mortgage relating to the creation, perfection and enforcement
of the lien and security interest created by this Mortgage in respect of the
Mortgaged Property 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 Mortgaged Property is located. In the event of a conflict
between the laws of the State of North Carolina and the internal law of the
state in which the Mortgaged Property is located 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 Mortgaged Property is located shall
govern.
Section 5.5 Effect. This Mortgage is in addition and not in
substitution for any other guarantees, covenants, obligations or other rights
now or hereafter held by the Agent from any other person or entity in connection
with the Obligations.
Section 5.6 Assignability. The Agent shall have the right to assign
this Mortgage, in whole or in part, or sell participation interests herein, to
any person obtaining an interest in the Obligations.
Section 5.7 Headings. Headings of the Sections of this Mortgage are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
Section 5.8 Fixture Filing. This instrument shall be deemed to be a
Fixture Filing within the meaning of the Alabama Uniform Commercial Codes, and
for such purpose, the following information is given:
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(A) Name and address of Debtors: Simcala, Inc.
Ohio Ferro Alloys Road
Mt Meigs, Alabama 36057
Attention: Chief Financial Officer
Federal Tax I.D. No.: 34-0438210
The Industrial Development Board of
The City of Montgomery
P. 0. Box 79
Montgomery, Alabama 36101
Federal Tax I.D. No.: 63-6083264
(B) Name and address of NationsBank, N.A.
Secured Party: 101 North Tryon Street, 15th Floor
Charlotte, NC 28255
(C) Description of the types (or
items) of property covered
by this Fixture Filing: See granting clause on pages 2 and
3 hereof.
(D) Description of real estate
to which the collateral is
attached or upon which it
is or will be located: See Exhibit A hereto.
Some of the above-described collateral is or is to become Fixtures upon the
above described real estate, and shall be deemed part of said real estate and
this Fixture Filing is to be filed for record and indexed in the public real
estate records. IDB is the record owner of said real estate.
Section 5.9 The IDB. It is expressly understood and agreed that the
IDB's liability hereunder is limited solely to its interest in the Mortgaged
Property and the revenues and receipts derived from the leasing of the Mortgage
Property under the IDB Lease (except for Unassigned Rights as therein defined)
or under any other Leases or Subleases of all or any part or parts of the
Mortgaged Property. No agreement, covenant or representation herein contained
shall ever constitute or give rise to any pecuniary liability or charge,
including environmental obligations, against the general credit of the IDB or
against the servants, agents or employees of the IDB. Further, none of the
directors, officers, employees or agents of the IDB shall have any personal
liability hereunder whatsoever for the breach by the IDB of any of the
representations, covenants or agreements on its part herein contained.
Section 5.10 Remedies Cumulative. All remedies contained in this
Mortgage are cumulative and not exclusive, and the Agent shall also have all
other remedies provided by law or equity or in any other agreement between the
Borrower and the Agent. No delay or failure by the Agent to exercise any right
or remedy under this Mortgage will be construed to be a waiver of that right or
remedy or of a default or Event of Default by the Borrower or the IDB. The Agent
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may exercise any one or more of its rights and remedies at its option without
regard to the adequacy of its security, and all of the Agent's rights and
remedies with respect to all collateral shall be cumulative and may be exercised
concurrently by the Agent.
Section 5.11 Releases and Waivers. The Borrower and the IDB agree that
no release by the Agent of any of the Borrower's or the IDB's successors in
title from liability on the Obligations, no release by the Agent of any portion
of the Mortgaged Property, the Rents or the Fixtures or Personal Property, no
subordination of lien, no forbearance on the part of the Agent or the Lenders to
collect on the Obligations, or any part thereof, no waiver of any right granted
or remedy available to the Agent or the Lenders and no action taken or not taken
by the Agent or the Lenders shall in any way diminish the Borrower's or the
IDB's obligations to the Agent or the Lenders or have the effect of releasing
the Borrower or the IDB, or any successor, from full responsibility to the Agent
or the Lenders for the complete discharge of each and every of the Borrower's or
the IDB's obligations hereunder or the Borrower's obligations pursuant to any
Credit Document.
[The remainder of this page is intentionally left blank.]
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IN WITNESS HEREOF, the Borrower and the IDB have executed this Mortgage
as of the date first written above.
SIMCALA, INC.
By: /s/ C. Edward Boardwine
----------------------------
Name: C. Edward Boardwine
Title: President
THE STATE OF ALABAMA )
) ss.
MONTGOMERY COUNTY )
I, Linda L. Kelley, a Notary Public in and for said County, in
said State, hereby certify that C. Edward Boardwine whose name as President of
SIMCALA, INC., a Delaware corporation, is signed to the foregoing Mortgage and
who is known to me, acknowledged before me on this day that, being informed of
the contents of the Mortgage, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand this the 26th day of March, 1998.
/s/
-----------------------------------
Notary Public
21
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MONTGOMERY
By: /s/
----------------------------
Name: R.E. Thornton, Jr.
Title: Chairman
THE STATE OF ALABAMA )
)ss
MONTGOMERY COUNTY )
I, Samantha Anne Wood, a Notary in and for said County, in
said State, hereby certify that R.E. Thornton, Jr., whose name as Chairman of
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF MONTGOMERY is signed to the
foregoing Mortgage and who is known to me, acknowledged before me on this day,
that being informed of the contents of said Mortgage, he, as such officer, and
with full authority, executed the same voluntarily for and as the act of said
corporation, acting in its capacity as Chairman as aforesaid.
Given under my hand this the 27th day of March, 1998
/s/
-----------------------------------
Notary Public
22
EXHIBIT A
Legal Description (Granting Clause A)
PARCEL 1:
Begin at the Southeast Corner of Section 5, T-16-N, R-20-E, Montgomery County,
Alabama; thence run along the South Line of said Section 5, S 87(0) 05' 57" W,
1818.81 feet to a point; thence run N 01(0) 53" 50" W, 1623.33 feet to an iron
pin; thence run N 03(0) 50' 08" E, 1038.55 feet to a concrete monument lying on
the North Line of the Southeast Quarter of said Section; thence run N 87(0) 34'
04" E, 1990.78 feet to a point at the Northeast Corner of the Southeast Quarter
of said Section 5; thence run along the East Line of said Section, S 04(0) 03'
41" W, 2657.77 feet to the point of beginning.
Said described property lying and being situated in the Southeast Quarter of
Section 5, T-16-N, R-20-E, Montgomery County, Alabama.
PARCEL 2:
Begin at the Northeast Corner of the Southeast Quarter of Section, 5, T-16-N,
R-20-E, Montgomery County, Alabama; thence run along the North Line of the
Southeast Quarter of said Section, S 87(0) 34; 04" W, 1990.78 feet to a concrete
monument; thence continue, S 87(0) 34' 04" W, 663.34 feet to a concrete monument
lying at the Northwest Corner of the Southeast Quarter of said Section 5; thence
run N 04(0) 03' 41" E, 90.10 feet to a point lying on the South right of way of
CSX Railroad (100' ROW); thence run along said South right of way, N 87(0) 00'
00" E, 2657.34 feet to a point lying on the East Line of said Section 5; thence
run along said East Line, S 04(0) 03' 41" W, 117.34 feet to the point of
beginning.
Said described property lying and being situated in the Northeast Quarter of
Section 5, T-16-N, R-20-E, Montgomery County, Alabama.
PARCEL 3:
Begin at a concrete monument at the Northwest Corner of the Southeast Quarter of
Section 5, T-16-N, R-20-E, Montgomery County, Alabama; thence run S 87(0) 33'
07" W, 661.96 feet to an iron pin; thence run S 87(0) 33' 21" W, 671.78 feet to
an iron pin; thence run N 04(0) 03' 41" E 76.74 feet to a point lying on the
South right of way of CSX Railroad; thence run along said South right of way, N
87(0) 00' 00" E, 1335.32 feet to a point; thence run S 04(0) 03' 41" W, 90.10
feet to the point of beginning.
Said described parcel lying and being situated in the Northwest Quarter of
Section 5, T-16-N, R-20-E, Montgomery County, Alabama.
23
TOGETHER WITH all of the Borrower's right, title and interest in and to the
lease agreement between the Borrower and the Department of Youth Services, dated
January 3, 1986, as amended by letter agreements dated August 7, 1995 and
September 14, 1995(as amended, the "Slurry Pond Lease") and the easements,
rights, interests and privileges granted to the Borrower under the provisions of
the Slurry Pond Lease.