Exhibit 10.18

Recording Requested By,

And After Recording, Return To:

WELLS FARGO BANK,

  NATIONAL ASSOCIATION

1700 Lincoln Street, 3rd Floor

MAC C7300-033

Denver, CO 80203

Prepared by: Loan Documentation

MORTGAGE

AND ASSIGNMENT OF RENTS AND LEASES

THIS MORTGAGE AND ASSIGNMENT OF RENTS AND LEASES (this “Mortgage”) is executed
as of October 24, 2013, by SIGMATRON INTERNATIONAL, INC. (“Mortgagor”), to WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Mortgagee”).

ARTICLE I. MORTGAGE

1.1 Grant. For the purposes and upon the terms and conditions in this Mortgage,
Mortgagor irrevocably mortgages, grants, conveys, assigns, bargains, sells,
releases, aliens, transfers and remises to Mortgagee and its successors and
assigns forever and hereby represents and warrants to Mortgagee with the right
of entry and possession, and grants to mortgagee and its successors and assigns
forever a continuing security interest in and to, Mortgagor’s interest in:
(a) all real property located in Kane County, Illinois, and described on
Exhibit A attached hereto; (b) all easements, rights-of-way and rights used in
connection with or as a means of access to any portion of said real property;
(c) all tenements, hereditaments and appurtenances thereof and thereto; (d) all
right, title and interest of Mortgagor, now owned or hereafter acquired, in and
to any land lying within the right-of-way of any street, open or proposed,
adjoining said real property, and any and all sidewalks, alleys and strips and
gores of land adjacent to or used in connection with said real property; (e) all
buildings, improvements and landscaping now or hereafter erected or located on
said real property; (f) all development rights, governmental or
quasi-governmental licenses, permits or approvals, zoning rights and other
similar rights or interests which relate to the development, use or operation
of, or that benefit or are appurtenant to, said real property; (g) all mineral
rights, oil and gas rights, air rights, water or water rights, including without
limitation, all wells, canals, ditches and reservoirs of any nature and all
rights thereto, appurtenant to or associated with said real property, whether
decreed or undecreed, tributary or non-tributary, surface or underground,
appropriated or unappropriated, and all shares of stock in any water, canal,
ditch or reservoir company, and all well permits, water service contracts,
drainage rights and other evidences of any such rights; and (h) all interest or
estate which Mortgagor now has or may hereafter acquire in said real property
and all additions and accretions thereto, and all awards or payments made for
the taking of all or any portion of said real property by eminent domain or any
proceeding or purchase in lieu thereof, or any damage to any portion of said
real property (collectively, the “Subject Property”). The listing of specific
rights or property shall not be interpreted as a limitation of general terms.

TO HAVE AND TO HOLD the Subject Property unto Mortgagee, its successors and
assigns forever, for the purposes and uses set forth in this Mortgage, and
Mortgagor covenants with and warrants to Mortgagee that, at the execution and
delivery of this Mortgage, Mortgagor holds fee simple title to, or if permitted
in writing, a valid leasehold estate in, the Subject Property and has a good and
marketable indefeasible estate therein and that the Subject Property is free
from all encumbrances and claim of any other person. Mortgagor does under this
Mortgage bind itself, its successors and assigns, to WARRANT AND FOREVER DEFEND
the Subject Property against all claims and demands whatsoever, except as
disclosed to Mortgagee prior to the date hereof in a writing that refers to this
warranty.

 

Mortgage and Assignment of Rents and Leases

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PROVIDED, HOWEVER, that if and when Mortgagor has paid all of the Secured
Obligations (defined below) and performed and observed all of the agreements,
terms, conditions, provisions, and warranties relating to the Secured
Obligations, this Mortgage and the estate, right, and interest of Mortgagee in
and to the Subject Property shall cease and be released at the cost of
Mortgagor, but otherwise, shall remain in full force and effect. Mortgagee shall
be entitled to charge a reasonable release fee.

1.2 Address. The address of the Subject Property (if known) is: 1901 South
Street, Elgin, IL 60123. Neither the failure to designate an address nor any
inaccuracy in the address designated shall affect the validity or priority of
the lien of this Mortgage on the Subject Property as described on Exhibit A. In
the event of any conflict between the provisions of Exhibit A and said address,
Exhibit A shall control.

ARTICLE II. OBLIGATIONS SECURED

2.1 Obligations Secured. Mortgagor makes this grant and assignment for the
purpose of securing the following obligations (each, a “Secured Obligation” and
collectively, the “Secured Obligations”):

(a) payment to Mortgagee of all sums at any time owing and performance of all
other obligations arising under or in connection with that certain promissory
note (“Note”) dated as of October 24, 2013, in the maximum principal amount of
One Million Two Hundred and Seventy Five Thousand Dollars ($1,275,000.00), with
interest as provided therein, executed by SIGMATRON INTERNATIONAL, INC. and
payable to Mortgagee or its order on or before October 24, 2018, together with
the payment and performance of any other indebtedness or obligations incurred in
connection with the credit accommodation evidenced by the Note, whether or not
specifically referenced therein; and

(b) payment and performance of all obligations of Mortgagor under this Mortgage,
together with all advances, payments or other expenditures made by Mortgagee as
or for the payment or performance of any such obligations of Mortgagor; and

(c) payment and performance of all obligations, if any, and the contracts under
which they arise, which any rider attached to and recorded with this Mortgage
recites are secured hereby; and

(d) payment to Mortgagee of all liability, whether liquidated or unliquidated,
defined, contingent, conditional or of any other nature whatsoever, and
performance of all other obligations, arising under any swap, derivative,
foreign exchange or hedge transaction or arrangement (or other similar
transaction or arrangement howsoever described or defined) at any time entered
into with Mortgagee in connection with any Secured Obligation; and

(e) payment and performance of all future advances (whether obligatory or to be
made at the option of Mortgagee, or otherwise) made by Mortgagee, to the same
extent as if such future advances were made on the date of execution of this
Mortgage, and other obligations that the then record owner of the Subject
Property may agree to pay and/or perform (whether as principal, surety or
guarantor) for the benefit of Mortgagee, when any such advance or other
obligation is evidenced by a writing which recites that it is secured by this
Mortgage; and

(f) all modifications, extensions and renewals of any of the Secured Obligations
(including without limitation, (i) modifications, extensions or renewals at a
different rate of interest, or (ii) deferrals or accelerations of the required
principal payment dates or interest payment dates or both, in whole or in part),
however evidenced, whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes.

 

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2.2 Obligations. The term “obligations” is used herein in its most comprehensive
sense and includes any and all advances, debts, obligations and liabilities by
Mortgagor to Mortgagee heretofore, now or hereafter made, incurred or created,
whether voluntary or involuntary and however arising, whether due or not due,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
joint or several, relating to a Secured Obligation, including without
limitation, all principal, interest, charges, including prepayment charges and
late charges, and loan fees at any time accruing or assessed on any Secured
Obligation.

2.3 Incorporation. All terms of the Secured Obligations are incorporated herein
by this reference. All persons who may have or acquire an interest in the
Subject Property are hereby deemed to have notice of the terms of the Secured
Obligations and to have notice, if provided therein, that: (a) the Note or any
other Secured Obligation may permit borrowing, repayment and reborrowing; and
(b) the rate of interest on one or more of the Secured Obligations may vary from
time to time.

2.4 Maximum Secured Amount. The maximum amount secured by this Mortgage may
decrease or increase from time to time, but shall never exceed twice the
aggregate amount of the Note and each other instrument, agreement or obligation
specifically described herein or in any rider attached to and recorded with this
Mortgage, or otherwise incorporated herein by reference, including any of the
foregoing which is incorporated into this Mortgage by a modification or similar
document recorded subsequent to the date hereof. The maximum amount secured by
this Mortgage shall not in any way imply that Mortgagee shall be obligated to
advance any amount at any time. Advances of disbursements made by Mortgagee to
protect the security, under the terms hereof, shall not be deemed to be optional
advances.

ARTICLE III. ASSIGNMENT OF RENTS

3.1 Assignment. For the purposes and upon the terms and conditions set forth
herein, Mortgagor irrevocably assigns to Mortgagee all of Mortgagor’s right,
title and interest in, to and under all leases, licenses, rental agreements and
other agreements of any kind relating to the use or occupancy of any of the
Subject Property, whether existing as of the date hereof or at any time
hereafter entered into, together with all guarantees of and security for any
tenant’s or lessee’s performance thereunder, and all amendments, extensions,
renewals and modifications thereto (each, a “Lease” and collectively, the
“Leases”), together with any and all other rents, issues and profits of the
Subject Property (collectively, “Rents”). This assignment shall not impose upon
Mortgagee any duty to produce Rents from the Subject Property, nor cause
Mortgagee to be: (a) a “mortgagee in possession” for any purpose;
(b) responsible for performing any of the obligations of the lessor or landlord
under any Lease; or (c) responsible for any waste committed by any person or
entity at any time in possession of the Subject Property or any part thereof, or
for any dangerous or defective condition of the Subject Property, or for any
negligence in the management, upkeep, repair or control of the Subject Property.
This is an absolute assignment, not an assignment for security only, and
Mortgagee’s right to Rents is not contingent upon and may be exercised without
taking possession of the Subject Property. Mortgagor agrees to execute and
deliver to Mortgagee, within five (5) days of Mortgagee’s written request, such
additional documents as Mortgagee may reasonably request to further evidence the
assignment to Mortgagee of any and all Leases and Rents. Mortgagee, at
Mortgagee’s option and without notice, may notify any lessee or tenant of this
assignment of the Leases and Rents.

3.2 Protection of Security. To protect the security of this assignment,
Mortgagor agrees:

(a) At Mortgagor’s sole cost and expense: (i) to perform each obligation to be
performed by the lessor or landlord under each Lease and to enforce or secure
the performance of each obligation to be performed by the lessee or tenant under
each Lease; (ii) not to modify any Lease in any material respect, nor accept
surrender under or terminate the term of any Lease; (iii) not to anticipate the
Rents under any Lease; and (iv) not to waive or release any lessee or tenant of
or from any Lease obligations. Mortgagor

 

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assigns to Mortgagee all of Mortgagor’s right and power to modify the terms of
any Lease, to accept a surrender under or terminate the term of or anticipate
the Rents under any Lease, and to waive or release any lessee or tenant of or
from any Lease obligations, and any attempt on the part of Mortgagor to exercise
any such rights or powers without Mortgagee’s prior written consent shall be a
breach of the terms hereof.

(b) At Mortgagor’s sole cost and expense, to defend any action in any manner
connected with any Lease or the obligations thereunder, and to pay all costs of
Mortgagee, including reasonable attorneys’ fees, in any such action in which
Mortgagee may appear.

(c) That, should Mortgagor fail to do any act required to be done by Mortgagor
under a Lease, then Mortgagee, but without obligation to do so and without
notice to Mortgagor and without releasing Mortgagor from any obligation
hereunder, may make or do the same in such manner and to such extent as
Mortgagee deems necessary to protect the security hereof, and, in exercising
such powers, Mortgagee may employ attorneys and other agents, and Mortgagor
shall pay necessary costs and reasonable attorneys’ fees incurred by Mortgagee,
or its agents, in the exercise of the powers granted herein. Mortgagor shall
give prompt notice to Mortgagee of any default by any lessee or tenant under any
Lease, and of any notice of default on the part of Mortgagor under any Lease
received from a lessee or tenant thereunder, together with an accurate and
complete copy thereof.

(d) To pay to Mortgagee immediately upon demand all sums expended under the
authority hereof, including reasonable attorneys’ fees, together with interest
thereon at the highest rate per annum payable under any Secured Obligation, and
the same, at Mortgagee’s option, may be added to any Secured Obligation and
shall be secured hereby.

3.3 License. Mortgagee confers upon Mortgagor a license (“License”) to collect
and retain the Rents as, but not before, they come due and payable, until the
occurrence of any Default. Upon the occurrence of any Default, the License shall
be automatically revoked, and Mortgagee may, at Mortgagee’s option and without
notice, either in person or by agent, with or without bringing any action, or by
a receiver to be appointed by a court: (a) enter, take possession of, manage and
operate the Subject Property or any part thereof; (b) make, cancel, enforce or
modify any Lease; (c) obtain and evict tenants, fix or modify Rents, and do any
acts which Mortgagee deems proper to protect the security hereof; and (d) either
with or without taking possession of the Subject Property, in its own name, sue
for or otherwise collect and receive all Rents, including those past due and
unpaid, and apply the same in accordance with the provisions of this Mortgage.
The entering and taking possession of the Subject Property, the collection of
Rents and the application thereof as aforesaid, shall not cure or waive any
Default, nor waive, modify or affect any notice of default hereunder, nor
invalidate any act done pursuant to any such notice. The License shall not grant
to Mortgagee the right to possession, except as provided in this Mortgage.

ARTICLE IV. RIGHTS AND DUTIES OF THE PARTIES

4.1 Title. Mortgagor warrants that, except as disclosed to Mortgagee prior to
the date hereof in a writing which refers to this warranty, Mortgagor lawfully
possesses and holds fee simple title to, or if permitted by Mortgagee in
writing, a leasehold interest in, the Subject Property without limitation on the
right to encumber, as herein provided, and that this Mortgage is a valid lien on
the Subject Property and all of Mortgagor’s interest therein.

4.2 Taxes and Assessments. Subject to the right, if any, of Mortgagor to contest
payment of the following pursuant to any other agreement between Mortgagor and
Mortgagee, Mortgagor shall pay prior to delinquency all taxes, assessments,
levies and charges imposed: (a) by any public or quasi-public authority or
utility company which are or which may become a lien upon or cause a loss in
value of the Subject Property or any interest therein; or (b) by any public
authority upon Mortgagee by reason of its

 

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interest in any Secured Obligation or in the Subject Property, or by reason of
any payment made to Mortgagee pursuant to any Secured Obligation; provided
however, that Mortgagor shall have no obligation to pay any income taxes of
Mortgagee. Promptly upon request by Mortgagee, Mortgagor shall furnish to
Mortgagee satisfactory evidence of the payment of all of the foregoing.
Mortgagee is hereby authorized to request and receive from the responsible
governmental and non-governmental personnel written statements with respect to
the accrual and payment of any of the foregoing.

4.3 Performance of Secured Obligations. Mortgagor shall promptly pay and perform
each Secured Obligation when due.

4.4 Liens, Encumbrances and Charges. Mortgagor shall immediately discharge any
lien on the Subject Property not approved by Mortgagee in writing. Except as
otherwise provided in any Secured Obligation or other agreement with Mortgagee,
Mortgagor shall pay when due all obligations secured by or reducible to liens
and encumbrances which shall now or hereafter encumber the Subject Property,
whether senior or subordinate hereto, including without limitation, any
mechanics’ liens.

4.5 Insurance. Mortgagor shall insure the Subject Property against loss or
damage by fire and such other risks as Mortgagee shall from time to time
require. Mortgagor shall carry public liability insurance, flood insurance as
required by applicable law and such other insurance as Mortgagee may reasonably
require, including without limitation, business interruption insurance or loss
of rental value insurance. Mortgagor shall maintain all required insurance at
Mortgagor’s expense, under policies issued by companies and in form and
substance satisfactory to Mortgagee. Mortgagee, by reason of accepting,
rejecting, approving or obtaining insurance, shall not incur any liability for:
(a) the existence, nonexistence, form or legal sufficiency thereof; (b) the
solvency of any insurer; or (c) the payment of losses. All policies and
certificates of insurance shall name Mortgagee as loss payee, and shall provide
that the insurance cannot be terminated as to Mortgagee except upon a minimum of
ten (10) days’ prior written notice to Mortgagee. Immediately upon any request
by Mortgagee, Mortgagor shall deliver to Mortgagee the original of all such
policies or certificates, with receipts evidencing annual prepayment of the
premiums.

4.6 Reserved

4.7 Damages; Insurance and Condemnation Proceeds.

(a) (i) All awards of damages and all other compensation payable directly or
indirectly by reason of a condemnation or proposed condemnation (or transfer in
lieu thereof) for public or private use affecting the Subject Property; (ii) all
other claims and awards for damages to or decrease in value of the Subject
Property; (iii) all proceeds of any insurance policies payable by reason of loss
sustained to the Subject Property; and (iv) all interest which may accrue on any
of the foregoing, may (so long as no Default shall have occurred and is
continuing) be paid to Mortgagor to acquire replacement property subject to this
Mortgage; otherwise such sums are all absolutely and irrevocably assigned to and
shall be paid to Mortgagee. Upon the occurrence of a Default and during the
continuation thereof, at the absolute discretion of Mortgagee, whether or not
its security is or may be impaired, but subject to applicable law if any, and
without regard to any requirement contained in any other Section hereof,
Mortgagee may apply all or any of the proceeds it receives to its expenses in
settling, prosecuting or defending any such claim and apply the balance to the
Secured Obligations in any order, and release all or any part of the proceeds to
Mortgagor upon any conditions Mortgagee may impose. In such case, Mortgagee may
commence, appear in, defend or prosecute any assigned claim or action, and may
adjust, compromise, settle and collect all claims and awards assigned to
Mortgagee; provided however, that in no event shall Mortgagee be responsible for
any failure to collect any claim or award, regardless of the cause of the
failure.

(b) If Mortgagor uses insurance or condemnation proceeds held by Mortgagee for
repair or restoration, Mortgagee may impose any conditions on such use as
Mortgagee deems necessary.

 

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4.8 Maintenance and Preservation of Subject Property. Subject to the provisions
of any Secured Obligation, Mortgagor covenants:

(a) to keep the Subject Property in good condition and repair;

(b) except with Mortgagee’s prior written consent, not to remove or demolish the
Subject Property, nor alter, restore or add to the Subject Property, nor
initiate or acquiesce in any change in any zoning or other land classification
which affects the Subject Property;

(c) to restore promptly and in good workmanlike manner any portion of the
Subject Property which may be damaged or destroyed, unless Mortgagee requires
that all of the insurance proceeds be used to reduce the Secured Obligations as
provided in the Section hereof entitled Damages; Insurance and Condemnation
Proceeds;

(d) to comply with and not to suffer violation of any or all of the following
which govern acts or conditions on, or otherwise affect the Subject Property:
(i) laws, ordinances, regulations, standards and judicial and administrative
rules and orders; (ii) covenants, conditions, restrictions and equitable
servitudes, whether public or private; and (iii) requirements of insurance
companies and any bureau or agency which establishes standards of insurability;

(e) not to commit or permit waste of the Subject Property; and

(f) to do all other acts which from the character or use of the Subject Property
may be reasonably necessary to maintain and preserve its value.

4.9 Hazardous Substances; Environmental Provisions. Mortgagor represents and
warrants to Mortgagee as follows:

(a) Except as disclosed to Mortgagee in writing prior to the date hereof, the
Subject Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, disposal, release or threatened release,
transportation or presence of any substances which are “hazardous substances,”
“hazardous wastes,” “hazardous materials” or “toxic substances” under the
Hazardous Materials Laws, as defined below, and/or other applicable
environmental laws, ordinances and regulations (collectively, the “Hazardous
Materials”).

(b) The Subject Property is in compliance with all laws, ordinances and
regulations relating to Hazardous Materials (collectively, the “Hazardous
Materials Laws”), including without limitation, the Clean Air Act, the Federal
Water Pollution Control Act, the Federal Resource Conservation and Recovery Act
of 1976, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the
Federal Toxic Substances Control Act and the Occupational Safety and Health Act,
as any of the same may be amended, modified or supplemented from time to time,
and any other applicable federal, state or local environmental laws, and any
rules or regulations adopted pursuant to any of the foregoing.

(c) There are no claims or actions pending or threatened against Mortgagor or
the Subject Property by any governmental entity or agency, or any other person
or entity, relating to any Hazardous Materials or pursuant to any Hazardous
Materials Laws.

(d) Mortgagor hereby agrees to defend, indemnify and hold harmless Mortgagee,
its directors, officers, employees, agents, successors and assigns, from and
against any and all losses, damages, liabilities, claims, actions, judgments,
court costs and legal or other expenses (including without limitation,
attorneys’ fees and expenses) which Mortgagee may incur as a direct or indirect
consequence of the use,

 

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generation, manufacture, storage, treatment, disposal, release or threatened
release, transportation or presence of Hazardous Materials in, on, under or
about the Subject Property. Mortgagor shall pay to Mortgagee immediately upon
demand any amounts owing under this indemnity, together with interest from the
date of demand until paid in full at the highest rate of interest applicable to
any Secured Obligation. MORTGAGOR’S DUTY AND OBLIGATION TO DEFEND, INDEMNIFY AND
HOLD HARMLESS MORTGAGEE SHALL SURVIVE THE CANCELLATION OF THE SECURED
OBLIGATIONS AND THE RELEASE OR PARTIAL RELEASE OF THIS MORTGAGE.

(e) Mortgagor shall immediately advise Mortgagee in writing upon Mortgagor’s
discovery of any occurrence or condition on the Subject Property, or on any real
property adjoining or in the vicinity of the Subject Property, that does or
could cause all or any part of the Subject Property to be contaminated with any
Hazardous Materials or otherwise be in violation of any Hazardous Materials
Laws, or cause the Subject Property to be subject to any restrictions on the
ownership, occupancy, transferability or use thereof under any Hazardous
Materials Laws.

4.10 Protection of Security. Mortgagor shall, at Mortgagor’s sole expense:
(a) protect, preserve and defend the Subject Property and Mortgagor’s title and
right to possession of the Subject Property against all adverse claims; (b) if
Mortgagor’s interest in the Subject Property is a leasehold interest or estate,
pay and perform in a timely manner all obligations to be paid and/or performed
by the lessee or tenant under the lease or other agreement creating such
leasehold interest or estate; and (c) protect, preserve and defend the security
of this Mortgage and the rights and powers of Mortgagee under this Mortgage
against all adverse claims. Mortgagor shall give Mortgagee prompt notice in
writing of the assertion of any claim, the filing of any action or proceeding,
or the occurrence of any damage, condemnation offer or other action relating to
or affecting the Subject Property and, if Mortgagor’s interest in the Subject
Property is a leasehold interest or estate, of any notice of default or demand
for performance under the lease or other agreement pursuant to which such
leasehold interest or estate was created or exists.

4.11 Powers and Duties of Mortgagee. Mortgagee may, upon written request,
without obligation to do so or liability therefor and without notice:
(a) release all or any part of the Subject Property from the lien of this
Mortgage; (b) consent to the making of any map or plat of the Subject Property;
and (c) join in any grant of easement or declaration of covenants and
restrictions with respect to the Subject Property, or any extension agreement or
any agreement subordinating the lien or charge of this Mortgage. Mortgagee may
from time to time apply to any court of competent jurisdiction for aid and
direction in the exercise or enforcement of its rights and remedies available
under this Mortgage, and may obtain orders or decrees directing, confirming or
approving acts in the exercise or enforcement of said rights and remedies.
Mortgagee has no obligation to notify any party of any pending sale or any
action or proceeding (including, but not limited to, actions in which Mortgagor
or Mortgagee shall be a party) unless held or commenced and maintained by
Mortgagee under this Mortgage.

4.12 Compensation; Exculpation; Indemnification.

(a) Mortgagor shall pay Mortgagee reasonable compensation for services rendered
concerning this Mortgage, including without limitation, the providing of any
statement of amounts owing under any Secured Obligation. Mortgagee shall not
directly or indirectly be liable to Mortgagor or any other person as a
consequence of: (i) the exercise of any rights, remedies or powers granted to
Mortgagee in this Mortgage; (ii) the failure or refusal of Mortgagee to perform
or discharge any obligation or liability of Mortgagor under this Mortgage or any
Lease or other agreement related to the Subject Property; or (iii) any loss
sustained by Mortgagor or any third party as a result of Mortgagee’s failure to
lease the Subject Property after any Default or from any other act or omission
of Mortgagee in managing the Subject Property after any Default unless such loss
is caused by the willful misconduct or gross negligence of Mortgagee; and no
such liability shall be asserted or enforced against Mortgagee, and all such
liability is hereby expressly waived and released by Mortgagor.

 

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(b) Mortgagor shall indemnify Mortgagee against, and hold Mortgagee harmless
from, any and all losses, damages, liabilities, claims, causes of action,
judgments, court costs, attorneys’ fees and other legal expenses, costs of
evidence of title, costs of evidence of value, and other expenses which
Mortgagee may suffer or incur: (i) by reason of this Mortgage; (ii) by reason of
the performance of any act required or permitted hereunder or by law; (iii) as a
result of any failure of Mortgagor to perform Mortgagor’s obligations; or
(iv) by reason of any alleged obligation or undertaking of Mortgagee to perform
or discharge any of the representations, warranties, conditions, covenants or
other obligations contained in any other document related to the Subject
Property, including without limitation, the payment of any taxes, assessments,
rents or other lease obligations, liens, encumbrances or other obligations of
Mortgagor under this Mortgage. Mortgagor’s duty to indemnify Mortgagee shall
survive the payment, discharge or cancellation of the Secured Obligations and
the release or satisfaction, in whole or in part, of this Mortgage.

(c) Mortgagor shall pay all indebtedness arising under this Section immediately
upon demand by Mortgagee, together with interest thereon from the date of demand
until paid in full at the highest rate per annum payable under any Secured
Obligation. Mortgagee may, at its option, add any such indebtedness to any
Secured Obligation.

4.13 Due on Sale or Encumbrance. Except as permitted by the provisions of any
Secured Obligation or applicable law, if the Subject Property or any interest
therein shall be sold, transferred (including without limitation, where
applicable, through sale or transfer of a majority or controlling interest of
the corporate stock, or any general partnership, limited liability company or
other similar interests, of Mortgagor), mortgaged, assigned, encumbered or
leased, whether voluntarily, involuntarily or by operation of law (each of which
actions and events is called a “Transfer”), without Mortgagee’s prior written
consent, THEN Mortgagee may, at its sole option, declare all Secured Obligations
immediately due and payable in full. Mortgagor shall notify Mortgagee in writing
of each Transfer within ten (10) business days of the date thereof.

4.14 Releases, Extensions, Modifications and Additional Security. Without notice
to or the consent, approval or agreement of any persons or entities having any
interest at any time in the Subject Property or in any manner obligated under
any Secured Obligation (each, an “Interested Party”), Mortgagee may, from time
to time, release any Interested Party from liability for the payment of any
Secured Obligation, take any action or make any agreement extending the maturity
or otherwise altering the terms or increasing the amount of any Secured
Obligation, accept additional security, and enforce, waive, subordinate or
release all or a portion of the Subject Property or any other security for any
Secured Obligation. None of the foregoing actions shall release or reduce the
personal liability of any Interested Party, nor release or impair the priority
of the lien of this Mortgage upon the Subject Property.

4.15 Release of Mortgage. Upon satisfaction in full of the Secured Obligations,
Mortgagee, without warranty, shall deliver for recording in the appropriate real
property records a satisfaction or release of Mortgage for the Subject Property,
or that portion thereof then covered hereby, from the lien of this Mortgage.

4.16 Subrogation. Mortgagee shall be subrogated to the lien of all encumbrances,
whether or not released of record, paid in whole or in part by Mortgagee
pursuant to this Mortgage or by the proceeds of any Secured Obligation.

4.17 Mortgagor Different From Obligor (“Third Party Mortgagor”). As used in this
Section, the term “Obligor” shall mean each person or entity obligated in any
manner under any of the Secured Obligations; and the term “Third Party
Mortgagor” shall mean (1) each person or entity included in the definition of
Mortgagor herein and which is not an Obligor under all of the Secured
Obligations, and (2) each person or entity included in the definition of
Mortgagor herein if any Obligor is not included in said definition.

 

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(a) Representations and Warranties. Each Third Party Mortgagor represents and
warrants to Mortgagee that: (i) this Mortgage is executed at an Obligor’s
request; (ii) this Mortgage complies with all agreements between each Third
Party Mortgagor and any Obligor regarding such Third Party Mortgagor’s execution
hereof; (iii) Mortgagee has made no representation to any Third Party Mortgagor
as to the creditworthiness of any Obligor; and (iv) each Third Party Mortgagor
has established adequate means of obtaining from each Obligor on a continuing
basis financial and other information pertaining to such Obligor’s financial
condition. Each Third Party Mortgagor agrees to keep adequately informed from
such means of any facts, events or circumstances which might in any way affect
such Third Party Mortgagor’s risks hereunder. Each Third Party Mortgagor further
agrees that Mortgagee shall have no obligation to disclose to any Third Party
Mortgagor any information or material about any Obligor which is acquired by
Mortgagee in any manner. The liability of each Third Party Mortgagor hereunder
shall be reinstated and revived, and the rights of Mortgagee shall continue if
and to the extent that for any reason any amount at any time paid on account of
any Secured Obligation is rescinded or must otherwise be restored by Mortgagee,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, all as though such amount had not been paid. The determination as to
whether any amount so paid must be rescinded or restored shall be made by
Mortgagee in its sole discretion; provided however, that if Mortgagee chooses to
contest any such matter at the request of any Third Party Mortgagor, each Third
Party Mortgagor agrees to indemnify and hold Mortgagee harmless from and against
all costs and expenses, including reasonable attorneys’ fees, expended or
incurred by Mortgagee in connection therewith, including without limitation, in
any litigation with respect thereto.

(b) Waivers.

(i) Each Third Party Mortgagor waives any right to require Mortgagee to:
(A) proceed against any Obligor or any other person; (B) marshal assets or
proceed against or exhaust any security held from any Obligor or any other
person; (C) give notice of the terms, time and place of any public or private
sale or other disposition of personal property security held from any Obligor or
any other person; (D) take any other action or pursue any other remedy in
Mortgagee’s power; or (E) make any presentment or demand for performance, or
give any notice of nonperformance, protest, notice of protest or notice of
dishonor hereunder or in connection with any obligations or evidences of
indebtedness held by Mortgagee as security for or which constitute in whole or
in part the Secured Obligations, or in connection with the creation of new or
additional obligations.

(ii) Each Third Party Mortgagor waives any defense to its obligations hereunder
based upon or arising by reason of: (A) any disability or other defense of any
Obligor or any other person; (B) the cessation or limitation from any cause
whatsoever, other than payment in full, of any Secured Obligation; (C) any lack
of authority of any officer, director, partner, agent or any other person acting
or purporting to act on behalf of any Obligor which is a corporation,
partnership or other type of entity, or any defect in the formation of any such
Obligor; (D) the application by any Obligor of the proceeds of any Secured
Obligation for purposes other than the purposes represented by any Obligor to,
or intended or understood by, Mortgagee or any Third Party Mortgagor; (E) any
act or omission by Mortgagee which directly or indirectly results in or aids the
discharge of any Obligor or any portion of any Secured Obligation by operation
of law or otherwise, or which in any way impairs or suspends any rights or
remedies of Mortgagee against any Obligor; (F) any impairment of the value of
any interest in any security for the Secured Obligations or any portion thereof,
including without limitation, the failure to obtain or maintain perfection or
recordation of any interest in any such security, the release of any such
security without substitution, and/or the failure to preserve the value of, or
to comply with applicable law in disposing of, any such security; (G) any
modification of any Secured Obligation, in any form whatsoever, including
without limitation the renewal, extension, acceleration or other change in time
for payment of, or other change in the terms of, any Secured Obligation or any
portion thereof, including increase or

 

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decrease of the rate of interest thereon; or (H) any requirement that Mortgagee
give any notice of acceptance of this Mortgage. Until all Secured Obligations
shall have been paid in full, no Third Party Mortgagor shall have any right of
subrogation, and each Third Party Mortgagor waives any right to enforce any
remedy which Mortgagee now has or may hereafter have against any Obligor or any
other person, and waives any benefit of, or any right to participate in, any
security now or hereafter held by Mortgagee. Each Third Party Mortgagor further
waives all rights and defenses it may have arising out of: (1) any election of
remedies by Mortgagee, even though that election of remedies, such as a
non-judicial foreclosure with respect to any security for any portion of the
Secured Obligations, destroys such Third Party Mortgagor’s rights of subrogation
or such Third Party Mortgagor’s rights to proceed against any Obligor for
reimbursement; or (2) any loss of rights any Third Party Mortgagor may suffer by
reason of any rights, powers or remedies of any Obligor in connection with any
anti-deficiency laws or any other laws limiting, qualifying or discharging any
Obligor’s obligations.

(iii) If any of said waivers is determined to be contrary to any applicable law
or public policy, such waiver shall be effective to the extent permitted by
applicable law or public policy.

ARTICLE V. DEFAULT PROVISIONS

5.1 Default. The occurrence of any of the following shall constitute a “Default”
under this Mortgage: (a) Mortgagor shall fail to observe or perform any
obligation or agreement contained herein for a period of twenty (20) days after
notice from Mortgagee; (b) any representation or warranty of Mortgagor herein
shall prove to be incorrect, false or misleading in any material respect when
made; or (c) any default in the payment or performance of any obligation, or any
defined event of default, under any provisions of the Note or any other
contract, instrument or document executed in connection with, or with respect
to, any Secured Obligation.

5.2 Rights and Remedies. Upon the occurrence of any Default, and at any time
thereafter, Mortgagee shall have all the following rights and remedies:

(a) With or without notice, to declare all Secured Obligations immediately due
and payable in full.

(b) With or without notice, without releasing Mortgagor from any Secured
Obligation and without becoming a mortgagee in possession, to cure any Default
of Mortgagor and, in connection therewith: (i) to enter upon the Subject
Property and to do such acts and things as Mortgagee deems necessary or
desirable to protect the security of this Mortgage, including without
limitation, to appear in and defend any action or proceeding purporting to
affect the security of this Mortgage or the rights or powers of Mortgagee
hereunder; (ii) to pay, purchase, contest or compromise any encumbrance, charge,
lien or claim of lien which, in the judgment of Mortgagee, is senior in priority
to this Mortgage, the judgment of Mortgagee being conclusive as between the
parties hereto; (iii) to obtain, and to pay any premiums or charges with respect
to, any insurance required to be carried hereunder; and (iv) to employ counsel,
accountants, contractors and other appropriate persons to assist Mortgagee.

(c) To commence and maintain an action or actions in any court of competent
jurisdiction to foreclose this Mortgage or to obtain specific enforcement of the
covenants of Mortgagor under this Mortgage, and Mortgagor agrees that such
covenants shall be specifically enforceable by injunction or any other
appropriate equitable remedy. For the purposes of any suit brought under this
subsection, Mortgagor waives the defenses of laches and any applicable statute
of limitations.

(d) To apply to a court of competent jurisdiction for and obtain appointment of
a receiver of the Subject Property as a matter of strict right and without
regard to: (i) the adequacy of the security for the repayment of the Secured
Obligations; (ii) the existence of a declaration that the Secured Obligations
are immediately due and payable; or (iii) the filing of a notice of default; and
Mortgagor consents to such appointment.

 

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(e) To take and possess all documents, books, records, papers and accounts of
Mortgagor or the then owner of the Subject Property; to make or modify Leases
of, and other agreements with respect to, the Subject Property upon such terms
and conditions as Mortgagee deems proper; and to make repairs, alterations and
improvements to the Subject Property deemed necessary, in Mortgagee’s judgment,
to protect or enhance the security hereof.

(f) To resort to and realize upon the security hereunder and any other security
now or later held by Mortgagee concurrently or successively and in one or
several consolidated or independent judicial actions or lawfully taken
non-judicial proceedings, or both, and to apply the proceeds received in
accordance with the Section hereof entitled Application of Foreclosure Sale
Proceeds, all in such order and manner as Mortgagee shall determine in its sole
discretion.

(g) Upon sale of the Subject Property at any judicial foreclosure, Mortgagee may
credit bid (as determined by Mortgagee in its sole discretion) all or any
portion of the Secured Obligations. In determining such credit bid, Mortgagee
may, but is not obligated to, take into account all or any of the following:
(i) appraisals of the Subject Property as such appraisals may be discounted or
adjusted by Mortgagee in its sole underwriting discretion; (ii) expenses and
costs incurred by Mortgagee with respect to the Subject Property prior to
foreclosure; (iii) expenses and costs which Mortgagee anticipates will be
incurred with respect to the Subject Property after foreclosure, but prior to
resale, including without limitation, costs of structural reports and other due
diligence, costs to carry the Subject Property prior to resale, costs of resale
(e.g., commissions, attorneys’ fees, and taxes), Hazardous Materials clean-up
and monitoring, deferred maintenance, repair, refurbishment and retrofit, and
costs of defending or settling litigation affecting the Subject Property;
(iv) declining trends in real property values generally and with respect to
properties similar to the Subject Property; (v) anticipated discounts upon
resale of the Subject Property as a distressed or foreclosed property; (vi) the
existence of additional collateral, if any, for the Secured Obligations; and
(vii) such other factors or matters that Mortgagee deems appropriate. Mortgagor
acknowledges and agrees that: (A) Mortgagee is not required to use any or all of
the foregoing factors to determine the amount of its credit bid; (B) this
Section does not impose upon Mortgagee any additional obligations that are not
imposed by law at the time the credit bid is made; (C) the amount of Mortgagee’s
credit bid need not have any relation to any loan-to-value ratios specified in
any agreement between Mortgagor and Mortgagee or previously discussed by
Mortgagor and Mortgagee; and (D) Mortgagee’s credit bid may be, at Mortgagee’s
sole discretion, higher or lower than any appraised value of the Subject
Property.

(h) Mortgagor acknowledges that the transaction of which this Mortgage is a part
is a transaction that does not include either agricultural real estate (as
defined in 735 ILCS 5/15-1201), or residential real estate, and to the fullest
extent permitted by law, Mortgagor hereby voluntarily and knowingly waives its
rights to reinstatement and redemption as allowed under 735 ILCS 5/15-1601(b)
and the benefits of all present and future valuation, appraisement, homestead,
exemption, stay, redemption and moratorium law under any state or federal law.

(i) Notwithstanding the provisions of this Section, any foreclosure of all or
any portion of the lien of this Mortgage shall be in accordance with the
Illinois Mortgage Foreclosure Act, 735 ILCS 5/15-1101 et seq., as from time to
time amended.

5.3 Application of Foreclosure Sale Proceeds. After deducting all reasonable
out-of-pocket costs, fees and expenses of sale, including costs of evidence of
title and attorneys’ fees in connection with a sale, all proceeds of any
foreclosure sale shall be applied first, to payment of all Secured Obligations
(including without limitation, all sums expended by Mortgagee under the terms
hereof and not then repaid, with accrued interest at the highest rate per annum
payable under any Secured Obligation), in such order and amounts as Mortgagee in
its sole discretion shall determine; and the remainder, if any, to the person or
persons legally entitled thereto.

 

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5.4 Application of Other Sums. All Rents or other sums received by Mortgagee or
any agent or receiver hereunder, less all costs and expenses incurred by
Mortgagee or such agent or receiver, including reasonable attorneys’ fees, shall
be applied to payment of the Secured Obligations in such order as Mortgagee
shall determine in its sole discretion; provided however, that Mortgagee shall
have no liability for funds not actually received by Mortgagee.

5.5 No Cure or Waiver. Neither Mortgagee’s or any receiver’s entry upon and
taking possession of the Subject Property, nor any collection of Rents,
insurance proceeds, condemnation proceeds or damages, other security or proceeds
of other security, or other sums, nor the application of any collected sum to
any Secured Obligation, nor the exercise of any other right or remedy by
Mortgagee or any receiver shall impair the status of the security of this
Mortgage, or cure or waive any breach, Default or notice of default under this
Mortgage, or nullify the effect of any notice of default or sale (unless all
Secured Obligations and any other sums then due hereunder have been paid in full
and Mortgagor has cured all other Defaults), or prejudice Mortgagee in the
exercise of any right or remedy, or be construed as an affirmation by Mortgagee
of any tenancy, lease or option of the Subject Property or a subordination of
the lien of this Mortgage.

5.6 Costs, Expenses and Attorneys’ Fees. Mortgagor agrees to pay to Mortgagee
immediately upon demand the full amount of all reasonable out-of-pocket
payments, advances, charges, costs and expenses, including court costs and
reasonable attorneys’ fees (to include outside counsel fees), expended or
incurred by Mortgagee pursuant to this Article V, whether incurred at the trial
or appellate level, in an arbitration proceeding that may be awarded in favor of
the Mortgagee or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Mortgagee or any
other person) relating to Mortgagor or in any way affecting any of the Subject
Property or Mortgagee’s ability to exercise any of its rights or remedies with
respect thereto. All of the foregoing shall be paid by Mortgagor with interest
from the date of demand until paid in full at the highest rate per annum payable
under any Secured Obligation.

5.7 Power to File Notices and Cure Defaults. Mortgagor hereby irrevocably
appoints Mortgagee and its successors and assigns as Mortgagor’s true
attorney-in-fact to perform any of the following powers, which agency is coupled
with an interest: (a) to execute and/or record any notices of completion,
cessation of labor, or any other notices that Mortgagee deems appropriate to
protect Mortgagee’s interest; and (b) upon the occurrence of any event, act or
omission which with the giving of notice or the passage of time, or both, would
constitute a Default, to perform any obligation of Mortgagor hereunder; provided
however, that Mortgagee, as such attorney-in-fact, shall only be accountable for
such funds as are actually received by Mortgagee, and Mortgagee shall not be
liable to Mortgagor or any other person or entity for any failure to act under
this Section.

5.8 Remedies Cumulative; No Waiver. All rights, powers and remedies of Mortgagee
hereunder are cumulative and are in addition to all rights, powers and remedies
provided by law or in any other agreements between Mortgagor and Mortgagee. No
delay, failure or discontinuance of Mortgagee in exercising any right, power or
remedy hereunder shall affect or operate as a waiver of such right, power or
remedy; nor shall any single or partial exercise of any such right, power or
remedy preclude, waive or otherwise affect any other or further exercise thereof
or the exercise of any other right, power or remedy.

5.9 Mortgagee’s Right to Procure Insurance. Mortgagor acknowledges receipt of
the following notice: “Unless you Mortgagor provide evidence of the insurance
coverage required by your agreement with us Mortgagee, we may purchase insurance
at your expense to protect our interests in your collateral. This insurance may,
but need not, protect your interests. The coverage that we purchase may not pay

 

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any claim that you make or any claim that is made against you in connection with
the collateral. You may later cancel any insurance purchased by us, but only
after providing evidence that you have obtained insurance as required by our
agreement. If we purchase insurance for the collateral, you will be responsible
for the costs of that insurance, including the insurance premium, interest and
any other charges we may impose in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to your total outstanding
balance or obligation. The costs of the insurance may be more than the cost of
insurance you may be able to obtain on your own.”

If Mortgagor fails to maintain any insurance required hereunder, Mortgagee may
after notice to Mortgagor, but shall not be obligated to, purchase such required
insurance at Mortgagor’s expense to protect Mortgagee’s interests in the Subject
Property. This insurance may, but need not, protect Mortgagor’s interests in the
Subject Property. The coverage that Mortgagee purchases shall not be required to
pay any claim that the Mortgagor makes or any claim that is made against
Mortgagor in connection with the Subject Property. Mortgagor may later cancel
any insurance purchased by Mortgagee, but only after providing evidence that
Mortgagor has obtained the insurance required hereunder. If Mortgagee purchases
insurance for the Subject Property, Mortgagor will be responsible for the costs
of the insurance, including the insurance premium, interest thereon from the
date of each such payment or expenditure at the then applicable rate under the
Note and any other charges Mortgagee may impose in connection with the placement
of the insurance, until the effective date of the cancellation or expiration of
the insurance. The costs of the insurance obtained by Mortgagee may be more than
the cost of insurance Mortgagor may be able to obtain on its own. Unless
Mortgagee otherwise agrees in writing, Mortgagor shall pay to Mortgagee the full
costs of such insurance, together with the accrued interest thereon and the
other charges in connection therewith, within thirty (30) days after “Notice of
Placement of Insurance” as required by applicable law.

ARTICLE VI. MISCELLANEOUS PROVISIONS

6.1 No Merger. No merger shall occur as a result of Mortgagee’s acquiring any
other estate in, or any other lien on, the Subject Property unless Mortgagee
specifically consents to a merger in writing.

6.2 Execution of Documents. Mortgagor agrees, upon demand by Mortgagee, to
execute any and all documents and instruments required to effectuate the
provisions hereof.

6.3 Right of Inspection. Mortgagee or its agents or employees may enter onto the
Subject Property at any reasonable time, during regular business hours, with
reasonable prior notice for the purpose of inspecting the Subject Property and
ascertaining Mortgagor’s compliance with the terms hereof.

6.4 Notices. All notices, requests and demands which Mortgagor or Mortgagee is
required or may desire to give to the other party must be in writing, delivered
to Mortgagee at the following address:

WELLS FARGO BANK, NATIONAL ASSOCIATION

10 South Wacker Drive, 17th Floor

Chicago, IL 60606

and to Mortgagor at the following address:

SIGMATRON INTERNATIONAL, INC.

2201 Landmeier Road

Elk Grove Village, IL 60007

Attn: Linda K. Frauendorfer, CFO

 

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With a copy to:   

Henry J. Underwood

Howard and Howard Attorneys PLLC

200 South Michigan Avenue

Suite 1100

Chicago, IL 60604

  

or at such other address as either party shall designate by written notice to
the other party in accordance with the provisions hereof.

6.5 Successors; Assignment. This Mortgage shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties hereto; provided however, that this
Section does not waive the provisions of the Section hereof entitled Due on Sale
or Encumbrance. Mortgagee reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in,
Mortgagee’s rights and benefits under the Note, any and all other Secured
Obligations and this Mortgage. In connection therewith, Mortgagee may disclose
all documents and information which Mortgagee now has or hereafter acquires
relating to the Subject Property, all or any of the Secured Obligations and/or
Mortgagor and, as applicable, any partners, joint venturers or members of
Mortgagor, whether furnished by any Mortgagor or otherwise; provided that any
information provided to the Mortgagee by the Mortgagor and indentified by the
Mortgagor as material non-public information shall not be disclosed to the
prospective assignee or participant unless and until the prospective assignee or
participant has agreed in writing for the benefit of the Mortgagor to maintain
the confidentiality of such non-public information.

6.6 Rules of Construction. (a) When appropriate based on the identity of the
parties or other circumstances, the masculine gender includes the feminine or
neuter or both, and the singular number includes the plural; (b) the term
“Subject Property” means all and any part of or interest in the Subject
Property; (c) all Section headings herein are for convenience of reference only,
are not a part of this Mortgage, and shall be disregarded in the interpretation
of any portion of this Mortgage; (d) if more than one person or entity has
executed this Mortgage as “Mortgagor,” the obligations of all such Mortgagors
hereunder shall be joint and several; and (e) all terms of Exhibit A, and each
other exhibit and/or rider attached hereto and recorded herewith, are hereby
incorporated into this Mortgage by this reference.

6.7 Severability of Provisions. If any provision of this Mortgage shall be held
to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Mortgage.

6.8 Governing Law. This Mortgage shall be governed by and construed in
accordance with the laws of the State of Illinois, but giving effect to federal
laws applicable to national banks.

6.9 Arbitration.

(a) Arbitration. The parties hereto agree, upon demand by any party, to submit
to binding arbitration all claims, disputes and controversies between or among
them (and their respective employees, officers, directors, attorneys, and other
agents), whether in tort, contract or otherwise in any way arising out of or
relating to this Mortgage and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation,
inducement, enforcement, default or termination.

(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location
in Chicago, Illinois selected by the American Arbitration Association (“AAA”);
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the

 

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documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA’s commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in accordance with the
AAA’s optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to herein, as applicable, as the “Rules”). If
there is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. §91 or any
similar applicable state law.

(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise of
the actions detailed in sections (i), (ii) and (iii) of this paragraph.

(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which
the amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award of
greater than $5,000,000.00. Any dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Illinois or a neutral retired judge of the
state or federal judiciary of Illinois, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator’s discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Illinois and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Illinois Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

(e) Discovery. In any arbitration proceeding, discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party’s presentation and that no alternative means for
obtaining information is available.

(f) Class Proceedings and Consolidations. No party hereto shall be entitled to
join or consolidate disputes by or against others in any arbitration, except
parties who have executed this Mortgage or any other contract, instrument or
document relating to any Secured Obligation, or to include in any arbitration
any dispute as a representative or member of a class, or to act in any
arbitration in the interest of the general public or in a private attorney
general capacity.

 

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(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs
and expenses of the arbitration proceeding.

(h) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators
and the parties shall take all action required to conclude any arbitration
proceeding within 180 days of the filing of the dispute with the AAA. No
arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the documents between the parties or the subject matter of the
dispute shall control. This arbitration provision shall survive termination,
amendment or expiration of any of the documents or any relationship between the
parties.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as of the date first
set forth above.

 

Mortgagor(s)    Address(es)    SIGMATRON INTERNATIONAL, INC.    1901 South
Street         Elgin, IL 60123   

By:  

/s/ Gary R. Fairhead

     

Name:   Gary R. Fairhead      

Title:   President / CEO      

 

  STATE OF ILLINOIS    )            )    SS.      COUNTY OF COOK    )      

On October, 2013 before me, Nancy B. Geiser, a Notary Public in and for the
State of Illinois, appeared Gary R. Fairhead, personally known to me to be the
duly elected President / CEO of SigmaTron International, Inc. and the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her indicated capacity.

 

/s/ Nancy B. Geiser NOTARY PUBLIC My commission expires:4-30-17

[SEAL]

 

Mortgage and Assignment of Rents and Leases

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EXHIBIT A

(Description of Property)

Exhibit A to Mortgage and Assignment of Rents and Leases executed by SIGMATRON
INTERNATIONAL, INC., as Mortgagor, to WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Mortgagee, dated as of October 24, 2013.

LOTS 1 AND 2 OF BURNIDGE BROS INDUSTRIAL PARK, UNIT NO. 4; IN THE CITY OF ELGIN,
KANE COUNTY, ILLINOIS.

Commonly known as: 1901 South Street, Elgin, IL 60123

P.I.N.: 06-21-277-001 & 06-21-277-002

 

Mortgage and Assignment of Rents and Leases

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