Exhibit 2(a)(3)
FORM OF DEED OF TRUST AND SECURITY AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF
DEED OF TRUST AND SECURITY AGREEMENT
Between
Texfi Industries, Inc.
▇▇▇, Inc., Trustee
and
NationsBank, N.A., as Agent
and
NationsBanc Commercial Corporation, as Disbursing Agent
Dated as of March 15, 1996
This instrument was drawn by and mail to:
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
NationsBank Corporate Center, Suite 4200
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
TABLE OF CONTENTS
ARTICLE I - REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF GRANTOR................................................................ 4
Section 1.01 Payment of Secured Obligations.................................................. 4
Section 1.02 Title of Grantor................................................................ 4
Section 1.03 Maintenance, Repair, Alterations................................................ 4
Section 1.04 Required Insurance.............................................................. 5
Section 1.05 Delivery of Insurance Policies, etc............................................. 5
Section 1.06 Insurance Proceeds.............................................................. 6
Section 1.07 Assignment of Policies Upon Foreclosure......................................... 6
Section 1.08 Indemnification; Subrogation; Waiver of Offset.................................. 7
Section 1.09 Taxes and Impositions........................................................... 7
Section 1.10 Impound for Taxes............................................................... 8
Section 1.11 Utilities....................................................................... 9
Section 1.12 Actions Affecting Mortgaged Estate.............................................. 9
Section 1.13 Actions by Beneficiary As To Mortgaged Estate................................... 9
Section 1.14 Survival of Warranties.......................................................... 10
Section 1.15 Eminent Domain.................................................................. 10
Section 1.16 Additional Encumbrances......................................................... 10
Section 1.17 Inspection, Audits and Information Regarding Collateral......................... 11
Section 1.18 Liens........................................................................... 11
Section 1.19 Beneficiary's Powers............................................................ 11
Section 1.20 Restrictions Affecting Title.................................................... 12
Section 1.21 After-Acquired Property......................................................... 12
Section 1.22 Easements and Restrictions...................................................... 12
Section 1.23 Estoppel Certificate............................................................ 12
ARTICLE II - SECURITY AGREEMENT....................................................................... 13
Section 2.01 Creation of Security Interest................................................... 13
Section 2.02 Representations, Warranties and Covenants of Grantor............................ 14
ARTICLE III - EVENTS OF DEFAULT AND REMEDIES OF BENEFICIARY............................................ 15
Section 3.01 Events of Default............................................................... 15
Section 3.02 Receiver........................................................................ 18
Section 3.03 Waiver of Rights................................................................ 18
Section 3.04 Retention of Possession......................................................... 19
Section 3.05 Remedies not Exclusive.......................................................... 19
ARTICLE IV - MISCELLANEOUS............................................................................ 19
Section 4.01 Governing Law................................................................... 19
Section 4.02 Waiver of Rights................................................................ 19
Section 4.03 Notices......................................................................... 20
Section 4.04 Captions........................................................................ 20
Section 4.05 Invalidity of Certain Provisions................................................ 20
Section 4.06 Subrogation..................................................................... 20
Section 4.07 Trustee......................................................................... 20
Exhibits
A - Description of Land
B - Permitted Exceptions
C - Excluded Equipment
COLLATERAL IS OR INCLUDES FIXTURES
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Deed of Trust") dated
as of March 15, 1996 by and between TEXFI INDUSTRIES, INC., a Delaware
corporation, whose mailing address is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Grantor"), ▇▇▇, INC., whose address is ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Trustee"),
and NATIONSBANK, N.A., a national banking association organized under the laws
of the United States, as Agent (the "Beneficiary") for the benefit of itself and
the financial institutions (the "Lenders") as are, or may from time to time,
become parties to the Credit Agreement (as defined below) and NATIONSBANC
COMMERCIAL CORPORATION, as Disbursing Agent (the "Disbursing Agent").
STATEMENT OF PURPOSE
Pursuant to a Credit Agreement dated as of even date herewith (together
with all amendments and other modifications, if any, from time to time hereafter
made thereto, the "Credit Agreement") by and among the Grantor as Borrower
thereunder (the "Borrower"), the Lenders and the Beneficiary as Agent thereunder
and NationsBanc Commercial Corporation as Disbursing Agent thereunder, the
Lenders will extend Loans to and cause Letters of Credit to be issued on behalf
of the Borrower, as more particularly described in the Credit Agreement. To
induce the Lenders, the Agent and the Disbursing Agent to enter into the Credit
Agreement, and as a condition to the making of the Loans and the issuance of
Letters of Credit thereunder, the Lenders require that the Grantor execute and
deliver this Deed of Trust.
FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein
recited, the receipt of which is hereby acknowledged, Grantor hereby irrevocably
grants, bargains, sells, transfers, conveys and assigns to Trustee for the
benefit and security of Beneficiary, under and subject to the terms and
conditions hereinafter set forth, all right, title, interest and estate of
Grantor in and to the real property more particularly described in Exhibit A
attached hereto and by this reference incorporated herein (the "Land");
TOGETHER WITH all of the right, title, interest and estate of Grantor,
either at law or in equity, in and to:
Any and all buildings, improvements and structures now or hereafter
erected on the Land (the "Improvements") (the Land and the Improvements are
collectively referred to as the "Property");
All rights, privileges, tenements, hereditaments, rights-of-way,
easements, appendages, streets, alleys, passages, waters, watercourses,
covenants, rights and appurtenances of the Property belonging or in any way
appertaining thereto, or which hereafter shall in any way belong, relate or be
appurtenant thereto, whether now owned or hereafter acquired by Grantor, and all
right, title, and interest of Grantor in and to any streets, ways, watercourses,
alleys, easements, covenants and strips or gores of land now existing or
hereafter created for the benefit of Grantor, the Property or any subsequent
owner or tenant of the Property on or over land adjoining the Property or any
portion thereof and all rights to enforce the maintenance thereof;
All minerals, soil, flowers, crops, trees, timber and other emblements
now or hereafter on, under or above the Property;
All water, sanitary and storm sewer systems now or hereafter located
by, over and/or upon the Property or any part and parcel thereof, and which
water system includes all water mains, service laterals, hydrants, valves and
appurtenances, including, without limitation, all sanitary sewer lines,
including mains, laterals, manholes and appurtenances;
All paving for streets, roads, walkways or entranceways now or
hereafter located on the Property or any part or parcel thereof;
All fixtures located upon or within the Property or now or at any time
hereafter attached to or installed in, or used in connection with, any of the
Property, including, but not limited to, any and all partitions, dynamos,
screens, awnings, motors, engines, boilers, furnaces, pipes, plumbing,
escalators, elevators, sprinkler systems, fire prevention and extinguishing
apparatus and equipment, water tanks, heating, ventilating, air conditioning and
air-cooling equipment, heaters, condensers, compressors, ducts, machinery,
walks, fences, shrubbery, driveways, fittings and other fixtures of every kind
and character whatsoever (collectively, the "Fixtures");
Any award or awards heretofore made or hereafter to be made by any
municipal, state or Federal authorities to the present or any subsequent owners
of the Property or the Fixtures, including any award or awards or settlements
hereafter made resulting from condemnation proceedings or the taking of the
Property or the Fixtures, or any part thereof, under the power of eminent
domain;
All proceeds from the conversion, voluntary or involuntary, of any of
the Property or the Fixtures into cash or liquidated claims including, without
limitation, the proceeds of insurance, subject to certain restoration rights of
Grantor as provided in Section 1.06 hereof;
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All existing and future leases, subleases, licenses and other
agreements for the use and occupancy of all or any portion of the Property or
the Fixtures, and any and all extensions, renewals and modifications thereof,
whether written or oral and whether for a definite term or month to month,
including without limitation (i) any and all cash or securities deposited
thereunder to secure performance by the lessees of their obligations thereunder,
(ii) the right to receive and collect all rents thereunder and (iii) any and all
guarantees of any lessee's obligations thereunder (collectively, the "Leases");
All earnings, revenues, rents, issues, profits, avails, general
intangibles, choses in action and other income of and from the Property or the
Fixtures including, without limitation, all rents and receipts from the Leases
(collectively, the "Rents and Profits");
All architectural, engineering and similar plans, specifications,
drawings, renderings, profiles, studies, shop drawings, reports, plats, permits,
surveys and similar documents relating to the Property; all sewer taps, permits
and allocations; and all agreements for utilities, bonds, sureties and the like,
relating to the Property or appurtenant facilities erected or to be erected upon
or about the Property;
All warranties and guarantees of contractors or subcontractors or of
suppliers or manufacturers of equipment or other property incorporated into the
Improvements or used with or otherwise constituting part of the Fixtures; and
All equipment (other than the equipment described on Exhibit C hereto)
and other personal property located on, and used or useable in connection with,
the Property, including without limitation any and all air conditioners,
antennae, appliances, apparatus, awnings, basins, bathtubs, beds, boilers,
bookcases, cabinets, carpets, coolers, curtains, dehumidifiers, disposals,
doors, drapes, dryers, ducts, dynamos, elevators, engines, equipment,
escalators, fans, fittings, floor coverings, furnaces, furnishings, furniture,
hardware, heaters, humidifiers, incinerators, lighting, machinery, motors,
ovens, pictures, pipes, plants and containers, plumbing, pumps, radiators,
ranges, recreational facilities, refrigerators, screens, security systems,
shades, shelving, sinks, sprinklers, stokers, stoves, telephone systems,
toilets, ventilators, wall coverings, washers, windows, window coverings, and
wiring, as the same are now and will hereafter be constituted, whether now owned
by Grantor or hereafter acquired, together with all appliances, instruments,
improvements, accessories, equipment, parts and appurtenances appertaining or
attached thereto, or from time to time incorporated therein or installed as part
thereof, and all substitutions, renewals and replacements of and additions,
improvements, accessions and accumulations to any and all thereof which are now
owned or hereafter acquired by Grantor, together with all the rents, issues,
incomes, profits, accounts, proceeds and avails thereof.
All of the above-described right, title, interest, estate, claim and
demand of Grantor together with all cash and noncash proceeds thereof, and all
substitutions, accessions and replacements thereto and therefor, are referred to
herein as the "Mortgaged Estate".
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TO HAVE AND TO HOLD the Mortgaged Estate hereby granted or mortgaged
unto the Trustee and the Trustee's successors and assigns, in fee simple
forever.
PROVIDED, HOWEVER, that these presents are upon the condition that, if
the Secured Obligations (as defined below) shall be paid when due, and if
Grantor shall keep, perform and observe all and singular the covenants,
agreements and provisions in this Deed of Trust expressed to be kept, performed
and observed by or on the part of Grantor, then this Deed of Trust and the
estate and rights hereby granted shall cease, determine and be void, but
otherwise shall be and remain in full force and effect.
THIS DEED OF TRUST SHALL SECURE THE FOLLOWING OBLIGATIONS
(collectively, the "Secured Obligations"):
(a) Payment of the Obligations (as defined in the Credit Agreement) and
any renewals or extensions of any of the Obligations;
(b) Payment of all sums advanced by or on behalf of Beneficiary to
protect the Mortgaged Estate, with interest thereon at the rate of interest
provided in Section 4.1(d) of the Credit Agreement (the "Default Rate") from the
date of advance by Beneficiary to the date of payment by Grantor; and
(c) Payment of all other sums from time to time owing to the
Beneficiary, the Lenders or the Disbursing Agent under the Loan Documents (as
defined in the Credit Agreement).
Capitalized terms used herein shall have the meanings set forth in this
Deed of Trust or, if not defined herein, shall have the meaning ascribed to such
term in the Credit Agreement.
ARTICLE I
REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF GRANTOR
Grantor hereby represents, warrants, covenants and agrees as follows:
SECTION 1.01 PAYMENT OF SECURED OBLIGATIONS. Grantor shall pay when due
all of the Obligations, and shall pay all other sums secured hereby at the time
and place and in the manner specified in the Loan Documents.
SECTION 1.02 TITLE OF GRANTOR. Grantor has, subject to the Permitted
Exceptions (as set forth on Exhibit B attached hereto and by this reference
incorporated herein (herein the "Permitted Exceptions")), in its own right, good
and indefeasible title in fee simple to the
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Mortgaged Estate which is free from all liens and encumbrances, except the
Permitted Exceptions, and has full right to make this conveyance and that it
will warrant and defend the title to such property, except for the Permitted
Exceptions, against the lawful claims of all Persons.
SECTION 1.03 MAINTENANCE, REPAIR, ALTERATIONS. Grantor shall: (i) keep
the Mortgaged Estate in good condition and repair, subject to reasonable wear
and tear and damage due to casualty which is subject to repair as hereinafter
required, (ii) except as permitted by the Credit Agreement or otherwise
permitted in writing by Beneficiary, not remove, demolish or alter any of the
Mortgaged Estate or the Fixtures, other than in the ordinary course of business,
(iii) complete promptly and in good and workmanlike manner any alteration
permitted hereunder and promptly restore in like manner any Improvement which
may be damaged or destroyed thereon or therein subject to the provisions of
Section 1.06 hereof and pay when due all claims for labor performed and
materials furnished therefor, and (iv) comply, and cause the Mortgaged Estate to
comply, with all laws, ordinances, regulations, covenants, conditions and
restrictions now or hereafter affecting the Mortgaged Estate or any part
thereof.
SECTION 1.04 REQUIRED INSURANCE. Grantor shall at all times keep, or
cause to be kept, the Improvements which now are or hereafter become a part of
the Mortgaged Estate insured under an "all risk" extended coverage form of
insurance policy containing both a replacement cost and an agreed amount
endorsement (and against all other hazards as reasonably may be required by
Beneficiary, which may include, without limitation, insurance against loss or
damage by flood and earthquake). All insurance shall be in form, content and
amounts approved by Beneficiary and written by an insurance company or companies
approved by Beneficiary. The policies for such insurance shall have attached
thereto standard mortgagee clauses in favor of and permitting Beneficiary to
collect any and all proceeds payable under all such insurance. All such policies
or certified copies thereof shall be delivered to and held by Beneficiary as
further security for the Secured Obligations, with evidence of renewal coverage
delivered to Beneficiary annually at least 10 days before the expiration date of
any policy. Grantor shall also carry public liability insurance protecting
Trustee and Beneficiary against liability for injuries to persons and property
occurring in, on or adjacent to the Mortgaged Estate, in forms, companies and
amounts satisfactory to Beneficiary with the policy or policies evidencing such
insurance to contain a 30 day notice of cancellation or of change in coverage
clause in favor of Beneficiary. Grantor shall not carry separate insurance,
concurrent in kind or form and contributing in the event of loss, with any
insurance required herein.
SECTION 1.05 DELIVERY OF INSURANCE POLICIES, ETC. All policies of
insurance shall be issued by companies with a financial rating of at least A-X
as rated in the most recent edition of Best's Insurance Reports and in amounts
in each company as may be reasonably satisfactory to Beneficiary. All policies
of insurance shall have attached thereto a lender's loss payable and additional
insured endorsement for the benefit of Beneficiary in form reasonably
satisfactory to Beneficiary, shall contain a standard waiver of subrogation
clause and shall contain such other endorsements, terms and provisions as shall
be reasonably satis-
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factory to Beneficiary. If requested, Grantor shall furnish Beneficiary with a
certified copy of all policies of required insurance. At least ten (10) days
prior to the expiration of each such policy, Grantor shall furnish Beneficiary
with evidence satisfactory to Beneficiary of the reissuance of a policy
continuing insurance in force as required by this Deed of Trust. All such
policies shall contain a provision that such policies will not be canceled,
modified or amended (including any reduction in the scope or limits of
coverage), without thirty (30) days' prior written notice to Beneficiary.
Beneficiary shall not be responsible for the solvency of any company issuing any
policy of insurance pursuant hereto whether or not approved by it, or for the
collection of any amounts due under any such policy, and shall be responsible
and accountable only for such money as may be actually received by it, and then
only in accordance with the terms hereof. Nothing contained herein shall be
construed as making Beneficiary liable in any way for any loss, damage or injury
resulting from the failure to insure the Mortgaged Estate.
SECTION 1.06 INSURANCE PROCEEDS. After the occurrence of any casualty
to the Mortgaged Estate or any part thereof, Grantor shall give prompt written
notice thereof to Beneficiary and each insurer and submit a claim to insurer for
payment of insurance proceeds with a copy of such claim sent by Grantor to
Beneficiary. Such casualty shall not affect the lien of this Deed of Trust or
the obligations of Grantor hereunder, and Beneficiary is authorized at
Beneficiary's option to compromise and settle all loss claims if not adjusted
promptly by Grantor. All proceeds of insurance paid or payable under any
insurance policy (the "Insurance Proceeds") shall be paid to Beneficiary for the
benefit of Grantor and each insurer of all or any portion of the Mortgaged
Estate is hereby authorized and directed to make payment for any such loss
directly to Beneficiary for the benefit of Grantor; provided that so long as no
Event of Default shall have occurred and be continuing, Insurance Proceeds of
$100,000 or less shall be paid to Grantor. Any Insurance Proceeds shall be
applied first to the payment of all costs and expenses incurred by Beneficiary
in obtaining such proceeds. The balance of the proceeds, if any, shall be
applied (a) if Beneficiary determines in its reasonable judgment that (i) the
proceeds together with such other sums as Grantor shall deposit with Beneficiary
to pay the costs of alteration, restoration or rebuilding the Mortgaged Estate
or such portion thereof which may have been altered, damaged or destroyed, are
sufficient to pay such costs in full, (ii) no Event of Default shall have
occurred and be continuing hereunder, (iii) following completion of such
alteration, restoration or rebuilding, the Property will be substantially equal
in value and economic viability to its status prior to such casualty, (iv) such
alteration, restoration or rebuilding can be completed on or prior to the
Revolving Credit Termination Date under the Credit Agreement and (v) Grantor
will have sufficient income pending the completion of such, alteration,
restoration or rebuilding to pay all debt service due Beneficiary with respect
to the Loans, toward altering, restoring or rebuilding the Mortgaged Estate or
such portion thereof which may have been altered, damaged or destroyed, on the
same or similar conditions and requirements as are customarily required for
construction loans made by Beneficiary, or (b) otherwise, to the pro rata
payment of principal and interest due on the Loans based on the principal
balances then outstanding and to the payment of any other obligations due under
the other Loan Documents. Notwith standing the application of Insurance Proceeds
to the payment of a portion of the secured indebtedness, the unpaid portion of
the secured indebtedness shall remain in full force and
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effect, and Grantor shall not be excused in the payment thereof. Nothing
contained in this Deed of Trust shall be deemed to excuse Grantor from repairing
or maintaining the Mortgaged Estate as provided herein and in Section 1.03
hereof. The application or release by Beneficiary of any Insurance Proceeds
shall not cure or waive any Event of Default or notice of default under this
Deed of Trust or invalidate any act done pursuant to such notice.
SECTION 1.07 ASSIGNMENT OF POLICIES UPON FORECLOSURE. In the event of
foreclosure of this Deed of Trust or other transfer of title or assignment of
the Mortgaged Estate in extinguishment, in whole or in part, of the Secured
Obligations, all right, title and interest of Grantor in and to all policies of
insurance including any refundable premiums required by this Deed of Trust shall
inure to the benefit of and pass to the successor in interest of Grantor or the
purchaser or grantee of the Mortgaged Estate.
SECTION 1.08 INDEMNIFICATION; SUBROGATION; WAIVER OF OFFSET.
(a) Grantor shall indemnify, defend and hold Trustee and Beneficiary
harmless from any and all loss, costs, damages, expenses and liability incurred
by Beneficiary or Trustee in connection with this Deed of Trust, including all
attorneys' fees and expenses incurred by Trustee or Beneficiary, except to the
extent any such loss, cost, damage, expense or liability results from the gross
negligence or willful misconduct of the Trustee and/or Beneficiary. If
Beneficiary or Trustee commences an action against Grantor to enforce any of the
terms hereof or for the recovery of any sum secured hereby, Grantor shall pay
all attorneys' fees and expenses incurred by Beneficiary or Trustee in
connection therewith, and the right to such attorney's fees and expenses shall
be deemed to have accrued on the commencement of such action, and shall be
enforceable whether or not such action is prosecuted to judgment. Upon an Event
of Default, Beneficiary may employ an attorney or attorneys to protect its
rights hereunder, and in the event of such employment following an Event of
Default, Grantor shall pay all reasonable attorneys' fees and expenses incurred
by Beneficiary, whether or not an action is actually commenced against Grantor
by reason of an Event of Default.
(b) All sums payable by Grantor hereunder, under the Credit Agreement
and under the other Loan Documents shall be paid without notice, demand,
counterclaim, set-off, deduction or defense and without abatement, suspension,
deferment, diminution or reduction, and the obligations and liabilities of
Grantor hereunder shall in no way be released, discharged or otherwise affected
by reason of: (i) any damage to or destruction of or any condemnation or similar
taking of the Mortgaged Estate or any part thereof, (ii) any restriction or
prevention of or interference with any use of the Mortgaged Estate or any part
thereof unless caused unlawfully by Beneficiary, (iii) any title defect or
encumbrance or any eviction from the Mortgaged Estate or any part thereof by
title paramount or otherwise, (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Grantor, or any action taken with respect to this Deed of Trust by
any trustee or receiver of Grantor, or by any court, in any such proceeding, or
(v) any other occurrence whatsoever, whether similar or dissimilar to the
foregoing whether or not Grantor shall have notice or knowledge of any of the
foregoing. To the extent permitted
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by law, Grantor waives all rights now or hereafter conferred by statute or
otherwise to any abatement, suspension, deferment, diminution or reduction of
any sum secured hereby.
SECTION 1.09 TAXES AND IMPOSITIONS.
(a) Subject to the provisions of subsection (c) of this Section 1.09
and to the provisions of Section 1.10 hereof, Grantor shall pay or cause to be
paid and shall furnish evidence of payment thereof to Beneficiary, at least ten
(10) days prior to delinquency, all real property taxes and assessments, general
and special, and all other taxes and assessments of any kind or nature
whatsoever, including without limitation nongovernmental levies or assessments
such as maintenance charges, levies or charges resulting from covenants,
conditions and restrictions affecting the Mortgaged Estate, which are assessed
or imposed upon the Mortgaged Estate, or become due and payable, and which
create, may create or appear to create a lien upon the Mortgaged Estate, or any
part thereof (all of which taxes, assessments and other governmental and
nongovernmental charges of like nature are hereinafter referred to as
"Impositions"); provided that if, by law, any such Imposition is payable, or may
at the option of the taxpayer be paid, in installments, Grantor may pay the same
together with any accrued interest on the unpaid balance of such Imposition in
installments as the same become due and before any fine, penalty, interest or
cost may be added thereto for the nonpayment of any such installment and
interest.
(b) If at any time after the date hereof there shall be assessed or
imposed (i) a tax or assessment on the Mortgaged Estate in lieu of or in
addition to the Impositions payable by Grantor pursuant to subsection (a) above,
or (ii) a license fee, tax or assessment imposed on Beneficiary and measured by
or based in whole or in part upon the amount of the outstanding obligations
secured hereby (excluding income, franchise or capital taxes imposed on the
income of Beneficiary), then all such taxes, assessments or fees shall be deemed
to be included within the term Impositions, and Grantor shall pay and discharge
the same as herein provided with respect to the payment of Impositions. At the
option of Beneficiary, all obligations secured hereby together with all accrued
interest thereon, shall become due and payable in the event that Grantor shall
not be permitted to pay such fees, taxes or assessments on behalf of
Beneficiary.
(c) Grantor shall have the right before any delinquency occurs to
contest or object to the amount or validity of any Imposition by appropriate
legal proceedings, but such right shall not be deemed or construed in any way as
relieving, modifying, or extending Grantor's covenant to pay any such Imposition
at the time and in the manner provided in this Section 1.09, unless Grantor has
given prior written notice to Beneficiary of Grantor's intent to so contest or
object to an Imposition, and unless, at Beneficiary's sole option, (i) Grantor
shall demonstrate to Beneficiary's reasonable satisfaction that the legal
proceedings shall conclu sively operate to prevent the sale of the Mortgaged
Estate, or any part thereof, to satisfy such Imposition prior to final
determination of such proceedings, (ii) Grantor shall furnish a good and
sufficient bond or surety as requested by and reasonably satisfactory to
Beneficiary or (iii) Grantor shall have provided a good and sufficient
undertaking as may be required or permitted by law to accomplish a stay of such
proceedings.
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SECTION 1.10 IMPOUND FOR TAXES. Upon demand by Beneficiary after an
Event of Default (as defined in Section 3.01 hereof) has occurred and during the
continuance thereof, Grantor shall pay to Beneficiary, on the first day of each
and every calendar month, until the Secured Obligations are paid in full, an
amount equal to one-twelfth of the annual Impositions reasonably estimated by
Beneficiary necessary to pay the installments of Impositions next due on the
Mortgaged Estate. All such amounts paid under the terms of this Section 1.10
shall be held by Beneficiary in a non-interest bearing account. Grantor shall
cause all bills, statements or other documents relating to Impositions to be
sent or mailed directly to Beneficiary. Upon receipt of such bills, statements
or other documents, and provided Grantor has deposited sufficient funds pursuant
to this Section 1.10, Beneficiary shall pay such amounts as may be due
thereunder out of the funds so deposited. If at any time and for any reason the
funds so deposited are or will be insufficient to pay such amounts as may then
or subsequently be due, Beneficiary shall notify Grantor, and Grantor shall
promptly deposit an amount equal to such deficiency with Beneficiary.
Notwithstanding the foregoing, nothing contained herein shall cause Beneficiary
to be deemed a trustee of such funds or to be obligated to pay any amounts in
excess of the amount of funds so deposited pursuant to this Section 1.10.
Beneficiary may impound or reserve for future payment of Impositions such
portion of such payments as Beneficiary may in its reasonable discretion deem
proper, applying the balance to the principal of or interest on the indebtedness
secured hereby which may then be due and payable. If Grantor fails to deposit
sums sufficient to fully pay such Impositions at least thirty (30) days before
delinquency thereof, Beneficiary may, at Beneficiary's election and with prior
notice to Grantor, but without any obligation so to do, advance any amounts
required to make up the deficiency. All amounts so advanced, if any, shall bear
interest at the Default Rate from the date of such payment to the date of
repayment thereof in full to Beneficiary, shall be secured hereby and shall be
part of the Secured Obligations and shall be repayable to Beneficiary upon
demand.
SECTION 1.11 UTILITIES. Grantor shall pay or cause to be paid when due
all utility charges which are incurred by or on behalf of Grantor for the
benefit of the Mortgaged Estate or which may become a charge or lien against the
Mortgaged Estate for gas, electricity, water or sewer services or solid waste
removal services furnished to the Mortgaged Estate and all other assessments or
charges of a similar nature, whether public or private, affecting the Mortgaged
Estate or any portion thereof, whether or not such taxes, assessments or charges
are liens thereon and shall, upon request of Beneficiary, provide evidence of
the payment thereof in accordance with this Section 1.11.
SECTION 1.12 ACTIONS AFFECTING MORTGAGED ESTATE. Grantor shall appear
in and contest any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary and shall pay all costs and expenses,
including cost of evidence of title and reasonable attorneys' fees, in any such
action or proceeding in which Beneficiary may appear. Grantor shall give written
notice of any claim asserted or legal action filed against Grantor or the
Mortgaged Estate within five (5) Business Days after Grantor's first knowledge
thereof. Nothing in this Section 1.12 shall be deemed to prevent Beneficiary
from appearing in and contesting such actions and Grantor shall reimburse
Beneficiary for any costs and expenses in accordance with Section 1.08 above.
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SECTION 1.13 ACTIONS BY BENEFICIARY AS TO MORTGAGED ESTATE. Upon the
occurrence and during the continuance of an Event of Default, Beneficiary, in
its sole discretion, without obligation so to do and without notice to or demand
upon Grantor and without releasing Grantor from any obligation, may take any
action in respect of the Mortgaged Estate in such manner and to such extent as
Beneficiary may deem necessary to protect the security hereof. In connection
therewith (without limiting its general powers), Beneficiary shall have and is
hereby given the right, but not the obligation to: (a) enter upon and take
possession of the Mortgaged Estate, (b) direct Grantor to terminate any
management agent employed by Grantor with the prior written consent of
Beneficiary and to employ such management agent as Beneficiary may determine in
its sole and absolute discretion, (c) make additions, alterations, repairs and
improvements to the Mortgaged Estate which it may consider to be necessary or
proper to keep the Mortgaged Estate in good condition and repair, subject to
normal wear and tear, (d) appear and participate in any action or proceeding
affecting or which may affect the security hereof or the rights or powers of
Beneficiary, (e) pay, purchase, contest or compromise any encumbrance, claim,
charge, lien or debt which in the reasonable judgment of Beneficiary may affect
or appears to affect the security of this Deed of Trust or be prior or superior
hereto, (f) take or perform all actions or pay all amounts from time to time,
which this Deed of Trust permits or requires Grantor to take or perform, and (g)
in exercising such powers, pay necessary expenses, including employment of
counsel or other necessary or desirable consultants. Grantor shall immediately
upon demand therefor by Beneficiary pay all costs and expenses incurred by
Beneficiary in connection with the exercise by Beneficiary of the foregoing
rights, including without limitation costs of evidence of title, court costs,
appraisals, surveys and reasonable attorneys' fees, and any such costs and
expenses from the date so paid until the date repaid in full, shall bear
interest at the Default Rate, and shall be secured hereby as part of the Secured
Obligations.
SECTION 1.14 SURVIVAL OF WARRANTIES. Grantor shall fully and faithfully
satisfy and perform the obligations of Grantor contained in the Credit
Agreement. All representations, warranties and covenants of Grantor contained
therein shall remain continuing representations, warranties and covenants of
Grantor during any time when any portion of the Secured Obligations remains
outstanding.
SECTION 1.15 EMINENT DOMAIN. Should the Mortgaged Estate, or any part
thereof or interest therein, be taken or damaged by reason of any public
improvement, condemnation or eminent domain proceeding or in any other manner
(collectively, "Condemnation"), or should Grantor receive any notice or other
information regarding such proceeding, Grantor shall give prompt written notice
thereof to Beneficiary. Beneficiary may participate in any such Condemnation
proceedings, and Grantor shall from time to time deliver to Beneficiary all
instruments requested by Beneficiary to permit such participation. Grantor
shall, at its expense, diligently prosecute in a reasonable manner any such
proceedings and shall consult with Beneficiary and its attorneys and experts,
and cooperate in a reasonable manner with them in the carrying on or defense of
any such proceedings. All proceeds of Condemnation awards or proceeds of sale in
lieu of Condemnation with respect to the Mortgaged Estate and all judgments,
decrees and awards for injury or damage to the Mortgaged Estate shall be paid to
Beneficiary for the benefit of Grantor and shall be applied in the manner in
which
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Insurance Proceeds are to be applied pursuant to Section 1.06 hereof. Grantor
hereby assigns and transfers all such proceeds, judgments, decrees and awards to
the Beneficiary and agrees to execute such further assignments of all such
proceeds, judgments, decrees and awards, as Beneficiary may request. Beneficiary
is hereby authorized, in the name of Grantor, to execute and deliver valid
acquittances for, and to appeal from, any such judgment, decree or award.
Beneficiary shall not be, in any event or circumstance, liable or responsible
for failure to collect or exercise diligence in the collection of any proceeds,
judgments, decrees or awards.
SECTION 1.16 ADDITIONAL ENCUMBRANCES. Grantor shall not further
encumber the Mortgaged Estate or any portion thereof.
SECTION 1.17 INSPECTION, AUDITS AND INFORMATION REGARDING
COLLATERAL.
(a) Grantor shall permit Beneficiary, its representatives and agents,
to enter upon the Mortgaged Estate at all reasonable times and during normal
business hours and to inspect the Mortgaged Estate, and shall cooperate with
Beneficiary, its representatives and agents, during such inspections, including
making available to Beneficiary working copies of all plans and specifications
together with all related supplementary materials.
(b) Grantor shall also permit Beneficiary, its representatives and
agents, to examine, copy and make extracts of the books, records, accounting
data and other documents of Grantor that relate in any way to the Mortgaged
Estate, including, without limitation, all permits, licenses, consents and
approvals of all governmental authorities having jurisdiction over Grantor and
the Mortgaged Estate. All such books, records and documents shall be made
available to Beneficiary promptly upon written demand therefor and, at the
request of Beneficiary, Grantor shall furnish Beneficiary with convenient
facilities for the foregoing purposes.
SECTION 1.18 LIENS. Grantor shall, within thirty (30) days after
Grantor receives notice thereof, pay and discharge, at Grantor's cost and
expense, all liens, encumbrances and charges upon the Mortgaged Estate, or any
part thereof or interest therein, except for Permitted Exceptions. Grantor shall
have the right to contest in good faith the validity of any such lien,
encumbrance or charge; provided that (a) Grantor shall first deposit with
Beneficiary or Beneficiary's title company a bond or other security satisfactory
to Beneficiary in such amounts as Beneficiary and the title company shall
require, and (b) Grantor shall thereafter diligently proceed to cause such lien,
encumbrance or charge to be removed and discharged. If Grantor shall fail to
discharge any such lien, encumbrance or charge, then, in addition to any other
right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to,
discharge the same, either by paying the amount claimed to be due, or by
procuring the discharge of such lien by depositing in court a bond or the amount
claimed or otherwise giving security for such claim, or in such manner as is or
may be prescribed by law and such amount paid or expended by Beneficiary shall
bear interest at the Default Rate, shall be part of the Secured Obligations and
secured hereby and shall be repaid to Beneficiary on demand.
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SECTION 1.19 BENEFICIARY'S POWERS. At any time, or from time to time,
without notice and without liability therefor, and without affecting the
personal liability, if any, of any Person for payment of the Secured Obligations
or the effect of this Deed of Trust upon the remainder of the Mortgaged Estate,
Beneficiary with the consent of the Required Lenders (as defined in the Credit
Agreement) may, without notice, (a) release any part of the Mortgaged Estate,
(b) consent in writing to the making of any map or plat thereof, (c) join in
granting any easement thereon, (d) join in any extension agreement or any
agreement subordinating the lien or charge hereof, (e) release any person liable
for payment of the indebtedness secured hereby, (f) extend the maturity or alter
any of the terms of any such obligations, (g) grant other indulgences, (h) take
or release any other or additional security for any obligation herein mentioned,
(i) make compositions or other arrangements with debtors in relation thereto, or
(j) advance additional funds to protect the security hereof and pay or discharge
the obligations of Grantor hereunder or under the Loan Documents, and all
amounts so advanced, with interest thereon at the Default Rate, shall be part of
the Secured Obligations and secured hereby and such amount paid or expended by
Beneficiary shall bear interest at the Default Rate, and shall be repaid to
Beneficiary on demand.
SECTION 1.20 RESTRICTIONS AFFECTING TITLE. Grantor shall perform when
due all obligations required to be performed by Grantor by the provisions of any
agreement affecting title to the Mortgaged Estate.
SECTION 1.21 AFTER-ACQUIRED PROPERTY. All right, title and interest of
Grantor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Estate, hereafter acquired by, or released to, Grantor or constructed,
assembled or placed by Grantor on the Land, and all conversions of the security
constituted thereby, immediately upon such acquisition, release, construction,
assembling, placement or conversion, as the case may be, and in each such case,
without any further mortgage, conveyance, assignment, or other act by Grantor,
shall become subject to the lien of this Deed of Trust as fully and completely,
and with the same effect, as though now owned by Grantor and specifically
described in the granting clauses hereof, but at any and all times Grantor will
execute and deliver to Beneficiary any and all such further assurances,
mortgages, conveyances, or assignments thereof as Beneficiary may reasonably
require for the purpose of expressly and specifically subjecting the same to the
lien of this Deed of Trust.
SECTION 1.22 EASEMENTS AND RESTRICTIONS. All proposed easements,
permits, licenses, plans, tract maps and other instruments which would or might
affect the title to the Mortgaged Estate shall be submitted to Beneficiary for
Beneficiary's approval (and execution solely as lienholder if Beneficiary so
desires) prior to the execution thereof by Grantor, accompanied by a survey
showing the exact proposed location thereof and such other information as
Beneficiary shall reasonably require. Grantor shall not subject the Mortgaged
Estate or any part thereof to any easements, permits, licenses, plans, tract
maps or other instruments which would or might affect the title to the Mortgaged
Estate (other than a Permitted Exception) without the prior written consent of
Beneficiary.
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SECTION 1.23 ESTOPPEL CERTIFICATE. Grantor shall, at any time and from
time to time upon not less than ten (10) days' prior written notice from
Beneficiary execute, acknowledge and deliver to Beneficiary a statement (i)
certifying that this Deed of Trust and the Secured Obligations are unmodified
and in full force and effect or, if modified, stating the nature thereof and
certifying that this Deed of Trust and the Secured Obligations, as so modified,
are in full force and effect and the date to which principal, interest and other
sums secured hereby have been paid and (ii) acknowledging that there are no
uncured defaults or circumstances which, with the passage of time, or the giving
of notice, or both, would constitute an Event of Default under this Deed of
Trust or under the Secured Obligations or specifying such defaults if any are
claimed. Any such certificate may be conclusively relied upon by Beneficiary and
any prospective purchaser or assignee of the Secured Obligations. Grantor's
failure to deliver such certificate within such time shall be conclusive upon
Grantor that (A) the Secured Obligations are in full force and effect, without
modification, except as may be represented by Beneficiary, and (B) there are no
uncured defaults hereunder or circumstances which, with the passage of time, or
the giving of notice, or both, would constitute an Event of Default.
SECTION 1.24 FUTURE ADVANCES. It is the intention of the parties hereto
that this Deed of Trust is made and executed to comply with the provisions of
N.C.G.S. Section 45-67 et seq. and shall secure any and all present and future
Obligations (but in no event incurred more than fifteen (15) years after the
date hereof), including, without limitation, all future loans, advances and
readvances on a revolving basis which may be made from time to time by the
Lenders to the Grantor pursuant to the Credit Agreement, and any and all
amendments or modifications to the Credit Agreement, or any other instrument,
document or agreement referred to or contemplated thereby, which may hereafter
be entered into from time to time between the parties thereto. Although the
amount, including present and future Obligations, may decrease or increase from
time to time, it is understood and agreed by the parties hereto that all such
future loans, advances and readvances shall be secured to the same extent as the
original obligations hereunder, up to a maximum aggregate amount of principal
indebtedness outstanding at any one time of Seventy-four Million and 00/100
Dollars ($74,000,000), plus interest, costs and advances made by Beneficiary to
protect or preserve the Property or for taxes or insurance premiums as provided
in this Deed of Trust. The principal amount of present Obligations secured
hereby is Fifty Four Million Seven Hundred Eighty Two Thousand and 00/100
Dollars ($54,782,000.00) as of the date hereof. Pursuant to N.C.G.S. Section
45-68(2), the Grantor and Beneficiary agree that at the time each obligation is
incurred it shall not be necessary for each obligation to be evidenced by any
written instrument or notation signed by the Grantor and stipulate that such
obligation is secured by this Deed of Trust.
ARTICLE II
SECURITY AGREEMENT
SECTION 2.01 CREATION OF SECURITY INTEREST. This Deed of Trust shall
constitute a security agreement between Grantor as the Debtor and Beneficiary as
the Secured Party, and
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Grantor hereby grants to Beneficiary a security interest in such of the
Mortgaged Estate as may, in accordance with the Uniform Commercial Code of the
State of North Carolina (the "UCC"), be subject to a security interest
thereunder (herein, the "UCC Property"). Cumulative of all other rights of
Beneficiary hereunder, Beneficiary shall have all of the rights conferred upon
secured parties by the UCC. Grantor will execute and deliver to Beneficiary all
financing statements that may from time to time be reasonably required by
Beneficiary to establish and maintain the validity and priority of the security
interest of Beneficiary and pay all costs and expenses of any searches
reasonably required by Beneficiary. Beneficiary may exercise any or all of the
remedies of a secured party available to it under the UCC with respect to the
UCC Property, and it is expressly agreed that if upon an Event of Default
Beneficiary should proceed to dispose of the UCC Property in accordance with the
provisions of the UCC, five (5) days' notice by Beneficiary to Grantor shall be
deemed to be reasonable notice under any provision of the UCC requiring such
notice; provided, that, to the extent permitted by applicable law, Beneficiary
may at its option dispose of the UCC Property in accordance with Beneficiary's
rights and remedies with respect to the Mortgaged Estate pursuant to the
provisions of this Deed of Trust in lieu of proceeding under the UCC.
Grantor shall give advance notice in writing to Beneficiary of any
proposed change in Grantor's name, identity, or business form or structure and
will execute and deliver to Beneficiary, prior to or concurrently with the
occurrence of any such change, all additional financing statements that
Beneficiary may require to establish and maintain the validity and priority of
Beneficiary's security interest with respect to any of the UCC Property. Grantor
hereby appoints Beneficiary as its attorney-in-fact to execute and file on its
behalf any financing statements, continuation statements or other statements in
connection therewith which Beneficiary deems necessary or reasonably advised, to
preserve and maintain the priority of the lien hereof, or to extend the
effectiveness hereof, under the UCC or any other laws that may hereafter become
applicable. This power, being coupled with an interest, shall be irrevocable so
long as any of the Secured Obligations remains unpaid.
This Deed of Trust shall be effective as a financing statement filed as
a fixture filing from the date of its filing for record in the real estate
records of the county in which the UCC Property is situated. Information
concerning the security interest created by this Deed of Trust may be obtained
from Beneficiary, as secured party, at the address of Beneficiary stated above.
The mailing address of Grantor, as debtor, is as stated in the introductory
paragraph of this Deed of Trust.
SECTION 2.02 REPRESENTATIONS, WARRANTIES AND COVENANTS OF GRANTOR.
Grantor hereby represents, warrants and covenants, with respect to the UCC
Property as follows:
(a) except for the security interest granted hereby, Grantor
is, and as to portions of the UCC Property to be acquired by Grantor
after the date hereof will be, the sole owner of the UCC Property, free
from any adverse lien, security interest, encumbrance or adverse claims
thereon of any kind whatsoever except for Permitted Exceptions. Grantor
will notify Beneficiary of, and will defend such property against,
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all claims and demands of all persons at any time claiming the same or
any interest therein;
(b) except as otherwise provided herein or in the other Loan
Documents, Grantor will not lease, sell, convey, remove, alter or in
any manner transfer the UCC Property without the prior written consent
of Beneficiary, other than in the ordinary course of business and
except as permitted by the Credit Agreement; and
(c) the UCC Property will be kept on or at the Property and
Grantor will not remove the UCC Property from the Property unless it is
replaced with replacement property satisfactory to Beneficiary, without
the prior written consent of Beneficiary, except as otherwise provided
herein or in the Credit Agreement.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES OF BENEFICIARY
SECTION 3.01 EVENTS OF DEFAULT. If
(a) An Event of Default shall occur and be continuing under the
Credit Agreement;
or
(b) Grantor shall fail to perform or observe any of its covenants or
agreements set forth herein and such failure shall continue for more than three
(3) Business Days from the date due if the event or condition is a failure to
pay money to or on behalf of the Beneficiary as and when due or for more than
thirty (30) days after written notice from Beneficiary to Grantor of such
failure if the event or condition is other than a failure to pay money; or
(c) Grantor shall, without the prior written consent of Beneficiary,
sell, transfer, assign or further encumber the Mortgaged Estate or any part
thereof or any interest therein, or shall be divested of its title or any
interest therein, in any manner, whether voluntarily or involuntarily;
then and in each and every such case ("Event of Default" or "Default"), and at
any time thereafter while such Event of Default is continuing, Beneficiary shall
have, in addition to any rights at law or in equity, each and all of the
following rights and remedies, which may be exercised individually, collectively
or cumulatively:
(i) Beneficiary may, at its option, by written notice to
Grantor, declare immediately due and payable the Secured Obligations
(any notice of intent to accelerate such Secured Obligations prior to
the notice of acceleration being expressly waived by Grantor), and upon
any such declaration, the principal of accrued and unpaid interest and
all other Secured Obligations shall
15
become and be immediately due and payable. Anything to the contrary
contained in this Deed of Trust notwithstanding, the principal debt
and, to the extent permitted by applicable law, accrued and unpaid
interest to that date shall thereafter bear interest at the Default
Rate until paid.
(ii) To the extent permitted by applicable law, Beneficiary
personally, or by the agents or attorneys of Beneficiary, may take
immediate possession of the Mortgaged Estate hereby conveyed and
operate or lease the same and collect all income and rents arising
therefrom then due or that may thereafter become due, and pay the
proceeds so collected therefrom to Beneficiary for application in
accordance with the Credit Agreement.
(iii) In the event of the noncompliance with any duty or
duties required of Grantor under the terms of this Deed of Trust,
Beneficiary reserves the right, at its own election, to advance
sufficient funds to perform or maintain such duty or duties. Such
funds, on notice from Beneficiary, shall be immediately paid by Grantor
to Beneficiary, and if not so paid shall bear interest at the Default
Rate from the date of demand for payment to the date of their payment
in full to Beneficiary and shall be secured by this Deed of Trust.
(iv) Upon request of Beneficiary at any time when an Event of
Default shall have occurred, it shall be lawful for and the duty of
Trustee, and Trustee is hereby authorized and empowered to sell and
dispose of the Mortgaged Estate, or any portion thereof requested by
Beneficiary in accor dance with N. C. Gen. Stat. Sec. 45-21.1 et seq.,
or any subsequently enacted statute governing foreclosure and sale
under power of sale, at the place that Trustee so designates; and
Trustee may thereupon execute and deliver to the purchaser at said sale
a sufficient conveyance of the Mortgaged Estate in fee simple, which
conveyance may contain recitals as to the happening of the Default upon
which the execution of the power of sale, herein granted, depends, and
said recitals shall be presumptive evidence that all preliminary acts
prerequisite to said sale and deed were in all things duly complied
with; and Beneficiary, its agents, representatives, successors or
assigns, may bid and purchase at such sale. Grantor hereby constitutes
and appoints Trustee or any Substitute Trustee, agent and
attorney-in-fact to make such sale, recitals, and conveyance, and all
of the acts of such attorney-in-fact are hereby ratified. Such recitals
shall be binding and conclusive (except as to existence of an Event of
Default on Grantor's part) upon Grantor, and the conveyance to be made
by Trustee or Substitute Trustee (and in the event of a deed in lieu of
foreclosure, then as to such conveyance) shall be effectual to bar all
right, title and interest, equity of redemption (including all
statutory redemption), homestead, dower, curtesy and all other
exemptions that Grantor possesses, in and to the Mortgaged Estate.
Grantor does hereby authorize and empower the herein named Trustee, and
each and all of such Trustee's successors in this
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Deed of Trust, to sell said Mortgaged Estate together or in lots or
parcels, as such Trustee shall deem expedient, and to execute and
deliver to the purchaser or purchasers of such Mortgaged Estate good
and sufficient deeds of conveyance thereof by fee simple title and to
receive and pay over the proceeds of such sale or sales to the
following payments and in the following order: (A) all expenses
incurred in making such sale or sales; (B) one percent (1%) of the
amount collected (or such other reasonable amount not to exceed $20,000
as may be agreed upon by Trustee and Beneficiary) to Trustee as
compensation for executing this Deed of Trust; and (C) to the
Beneficiary for application in accordance with the Credit Agreement.
(v) The purchaser under any trustee's or foreclosure sale
hereunder may disaffirm any easement granted or lease contract made
without the approval of Beneficiary subsequent to the execution of this
Deed of Trust, and may take immediate possession of the Mortgaged
Estate free from, and despite the terms of, such grant of easement or
lease contract. In the event of a foreclosure of the lien of this Deed
of Trust, any owner in possession of the Mortgaged Estate shall
thereupon become the tenant at will of the purchaser at such
foreclosure sale and should such tenant or any person claiming
possession under or through him refuse to surrender possession of the
Mortgaged Estate upon demand, the purchaser shall thereupon be entitled
to institute and maintain the statutory action for forcible detainer
and procure a writ of possession thereunder. Beneficiary, or any other
holder of the Secured Obligations being the highest bidder for cash,
may purchase at any foreclosure sale or sales made by the Trustee
hereunder.
(vi) The provisions hereinabove set forth relating to
foreclosure of the lien of this Deed of Trust by public sale to be
conducted by Trustee, or any Substitute Trustee (as hereinafter
provided), are not intended as an exclusive method of foreclosure
hereunder or to deprive Beneficiary of any other legal or equitable
remedies available to it. Accordingly, it is specifically agreed that
the remedy of foreclosure by trustee's sale hereinabove provided for
shall be cumulative and shall not in any way be construed as an
exclusive remedy, and Beneficiary shall be fully entitled to a court
foreclosure and to avail itself of any and all other legal or equitable
remedies at any time available under the laws of the State of North
Carolina.
(vii) It is agreed that the power of sale above conferred upon
the Trustee is conferred upon the above named Trustee and upon any
Substitute Trustee, as herein provided, and in the event Trustee
advertises the Mortgaged Estate or any portion thereof for sale under
this Deed of Trust, Trustee, or any Substitute Trustee thereafter
appointed, may complete the sale whether advertised by Trustee or any
Substitute Trustee, and deeds may be executed accordingly by Trustee or
any Substitute Trustee actually making the sale.
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(viii) It is agreed that Beneficiary may, at any time or times
and at the pleasure of Beneficiary, appoint a successor or Substitute
Trustee in the place of said Trustee or any Substitute Trustee
theretofore appointed, by an instrument in writing, and any person so
appointed shall have all powers conferred herein upon the Trustee above
named, and it is agreed that said power of substitution may be
exercised as frequently and at such times as Beneficiary or then holder
of the Secured Obligations may desire.
(ix) Grantor does hereby ratify all acts which Trustee, or his
successors or substitute, may undertake respecting the Mortgaged Estate
by virtue hereof and agrees that all recitals contained in any deed
executed by Trustee or Substitute Trustee under this Deed of Trust
shall conclusively be presumed to be true in all courts of law and
equity and shall be conclusive proof that all prerequisites to any such
sale or sales have been regularly performed, and conclusive proof of
the regularity of the appointment of said Trustee or Substitute
Trustee, and of the authority of said Trustee or Substitute Trustee to
make said sale, and such sale or sales shall forever bar Grantor and
all persons claiming under it from all rights, title and interests to
the Mortgaged Estate sold, whether in law or in equity.
(x) Beneficiary may exercise any or all of the remedies of a
secured party available to it under the UCC with respect to the
Mortgaged Estate as set forth in Article II hereof; provided, however,
that Beneficiary may, at its option, dispose of the collateral in
accordance with Beneficiary's rights and remedies in respect of the
Mortgaged Estate pursuant to the provisions of this Deed of Trust, in
lieu of proceeding under the UCC.
(xi) To the extent permitted in the Credit Agreement,
Beneficiary may offset and apply, to any or all of the Secured
Obligations, all monies, credits and other property of any nature
whatsoever, and the proceeds thereof, of Grantor now or at any time
hereafter in the possession of, in transit to or from, under the
custody or control of, or on deposit with, Beneficiary.
SECTION 3.02 RECEIVER. In addition to any other rights and powers
conferred herein, Beneficiary shall have the right after the happening of any
Event of Default as hereinabove defined to apply for the appointment of a
receiver of rents and profits of any part or the whole of the Mortgaged Estate
without notice, and Beneficiary shall be entitled, as a matter of right, without
regard to the value of the Mortgaged Estate as security for the amount due or to
the solvency of Grantor or any other party or parties liable for the payment of
such amount, to the appointment of such a receiver of rents and profits with
power to lease the Mortgaged Estate, or such part thereof as may not then be
under lease, and with such other powers as may be deemed necessary, who, after
deducting all proper charges and expenses attending the execution of his trust
as receiver shall apply the residue of the Rents and Profits to the payment and
satisfaction of the Secured Obligations, or to any deficiency which may exist
after applying the proceeds of the sale of the Mortgaged Estate to the payment
of the Secured
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Obligations, including interest and the costs of any reasonable attorneys' fees
for the foreclosure and sale in such order of priority as Beneficiary shall
elect.
SECTION 3.03 WAIVER OF RIGHTS. Neither Grantor nor its successors or
assigns, ever shall have or assert any right, under any statute or rule of law
pertaining to the marshaling of assets, the exemption of homestead, the
administration of estates of decedents, or in any manner whatever, to defeat,
reduce or affect the right of the holder of the Secured Obligations, under the
terms of this Deed of Trust, to a sale of the Mortgaged Estate for the
collection of the Secured Obligations (without any prior or different resort for
collection), or the right of the holder, under the terms of this Deed of Trust,
to the payment of the Secured Obligations out of the proceeds of sale of the
conveyed Mortgaged Estate in preference to every other person and claimant
whatever (only reasonable expenses as aforesaid being first deducted); and
Grantor, to the extent that it lawfully may, expressly waives any right now or
hereafter existing to redeem the Mortgaged Estate or any portion thereof so
sold.
SECTION 3.04 RETENTION OF POSSESSION. Notwithstanding the appointment
of any receiver, liquidator or trustee of Grantor, or the then owner of the
Mortgaged Estate, or of any of Grantor's or then owners' other property,
Beneficiary and Trustee, or either of them, shall be entitled to retain
possession and control of the Mortgaged Estate now or hereafter granted to or
held by Beneficiary or Trustee hereunder.
SECTION 3.05 REMEDIES NOT EXCLUSIVE. The cumulative rights of
Beneficiary arising under the clauses and covenants contained in this Deed of
Trust shall be separate, distinct and cumulative and none of them shall be
construed to be exclusive or an election to proceed under any one provision
herein to the exclusion of any other provision, anything herein or otherwise to
the contrary notwithstanding. In addition to any remedies provided herein for an
Event of Default hereunder, Beneficiary shall have all other remedies allowed
under the laws of the State of North Carolina, and the laws of the United
States. No failure on the part of Beneficiary to exercise any of its rights
hereunder arising upon any Default shall be construed to prejudice its rights in
the event of any other or subsequent Default. No delay on the part of
Beneficiary in exercising any of such rights shall be construed to preclude it
from the exercise thereof at any time during the continuance of such Default.
Beneficiary may enforce any one or more remedies or rights hereunder in such
order and manner as it may determine, successively or concurrently at its
option. By accepting payment or partial payment of any sums secured hereby after
its due date, Beneficiary shall not make an accommodation or thereby waive the
agreement herein contained that time is of the essence, nor shall Beneficiary
waive either any of its remedies or options or its right to require prompt
payment when due of all Secured Obligations or to consider failure so to pay a
Default hereunder. Neither the acceptance of this Deed of Trust nor its
enforcement, whether by court action or pursuant to other powers herein
contained, shall prejudice or in any manner affect Beneficiary's right to
realize upon or enforce any other security now or hereafter held by Beneficiary.
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ARTICLE IV
MISCELLANEOUS
SECTION 4.01 GOVERNING LAW. This Deed of Trust shall be governed by and
construed and enforced in accordance with the law of the State of North Carolina
applicable to contracts made and to be performed in the State of North Carolina
without reference to conflicts of laws principles.
SECTION 4.02 WAIVER OF RIGHTS. To the extent permitted by law, Grantor
waives the benefit of all laws now existing or that hereafter may be enacted (a)
providing for any appraisement before sale of any portion of the Mortgaged
Estate, and (b) in any way extending the time for the enforcement of the
collection of the Secured Obligations or creating or extending a period of
redemption from any sale made in collecting the Secured Obligations. To the full
extent Grantor may do so, Grantor agrees that Grantor will not at any time
insist upon, plea, claim or take the benefit or advantage of any law now or
hereafter in force providing for any appraisement, valuation, stay, extension or
redemption, and Grantor, for itself and its successors and assigns, and for any
and all persons ever claiming any interest in the Mortgaged Estate by, through
or under Grantor, to the extent permitted by law, hereby waives and releases all
rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the Secured Obligations and
marshal ling in the event of foreclosure of the liens hereby created. If any law
referred to in this Section and now in force, of which Grantor, Grantor's
successors and assigns or other person might take advantage despite this
Section, shall hereafter be repealed or cease to be in force, such law shall not
thereafter be deemed to preclude the application of this Section. To the extent
permitted by law, Grantor expressly waives and relinquishes any and all rights
and remedies which Grantor may have or be able to assert by reason of the laws
of the State of North Carolina pertaining to the rights and remedies of
sureties.
SECTION 4.03 NOTICES. Whenever Beneficiary or Grantor shall desire to
give or serve any notice, demand, request or other communication with respect to
this Deed of Trust, each such notice, demand, request or other communication
shall be in writing and shall be effective only if the same is delivered in the
manner set forth in the Credit Agreement, addressed to the addresses therein set
forth. Any party may at any time change its address for such notices by
delivering or mailing to the other parties hereto, as aforesaid, a notice of
such change.
SECTION 4.04 CAPTIONS. The captions or headings at the beginning of
each Section hereof are for the convenience of the parties and are not a part of
this Deed of Trust.
SECTION 4.05 INVALIDITY OF CERTAIN PROVISIONS. If the lien of this Deed
of Trust is invalid or unenforceable as to any part of the Secured Obligations,
or if the lien is invalid or unenforceable as to any part of the Mortgaged
Estate, the unsecured or partially secured portion of the debt shall be
completely paid prior to the payment of the remaining and secured portion of the
Secured Obligations, and all payments made on the debt, whether voluntary or
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under foreclosure or other enforcement action or procedure, shall be considered
to have been first paid on and applied to the full payment of that portion of
the Secured Obligations which is not secured or fully secured by the lien of
this Deed of Trust.
SECTION 4.06 SUBROGATION. To the extent that proceeds of the Secured
Obligations are used to pay any outstanding lien, charge or prior encumbrance
against the Mortgaged Estate and such proceeds or advances have been or will be
advanced by Beneficiary, Beneficiary shall be subrogated to any and all rights
and liens held by any owner or holder of such outstanding liens, charges and
prior encumbrances, irrespective of whether said liens, charges or encumbrances
are released of record.
SECTION 4.07 TRUSTEE. Trustee shall be under no duty to take any action
hereunder except as expressly required, or to perform any act which would
involve Trustee in expense or liability or to institute or defend any suit in
respect hereof, unless properly indemnified to its satisfaction.
IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be
executed under seal on its behalf by its duly authorized officers as of the day
and year first above written.
TEXFI INDUSTRIES, INC.
By:
Name:
Title:
[CORPORATE SEAL]
ATTEST:
Secretary
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This ____ day of March, 1996, personally came before me, a Notary
Public in and for said County and State, __________________________________ who,
being by me duly sworn, says that he is _________ President of TEXFI INDUSTRIES,
INC., that the seal affixed to the foregoing instrument in writing is the
corporate seal of said Corporation and that said instrument was signed and
sealed by him on behalf of said Corporation by its authority duly given, and the
said ______________________________ acknowledged said instrument in writing to
be the act and deed of said Corporation.
Notary Public
My Commission Expires:
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