Exhibit 4.9
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AMENDED AND RESTATED
MORTGAGE, ASSIGNMENT OF LEASES,
SECURITY AGREEMENT AND FIXTURE FILING
BY
REPUBLIC ENGINEERED PRODUCTS LLC
Mortgagor
TO
LASALLE BANK NATIONAL ASSOCIATION,
Mortgagee;
Securing Principal Indebtedness of: $25,200,000;
Relating to Premises in:
ERIE COUNTY, NEW YORK
Dated as of: August 16, 2002
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After recording,
please return to:
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
TABLE OF CONTENTS
ARTICLE I WARRANTIES, REPRESENTATIONS AND COVENANTS OF
MORTGAGOR.............................................. 6
SECTION 1.1. Payment and Performance ............................... 6
SECTION 1.2. Authority and Validity ................................ 6
SECTION 1.3. Good Title. ........................................... 6
SECTION 1.4. Recording Documentation To Assure Security Interest;
Fees and Expenses. .................................... 7
SECTION 1.5. Payment of Taxes, Insurance Premiums, Assessments;
Compliance with Law and Insurance Requirements. ....... 8
SECTION 1.6. Certain Tax Law Changes ............................... 10
SECTION 1.7. Required Insurance Policies. .......................... 10
SECTION 1.8. Failure To Perform Covenants or To Make Certain
Payments .............................................. 13
SECTION 1.9. Inspection ............................................ 13
SECTION 1.10. Mortgagor To Maintain Improvements .................... 13
SECTION 1.11. Mortgagor's Obligations with Respect to Leases. ....... 14
SECTION 1.12. Transfer Restrictions ................................. 16
SECTION 1.13. Destruction; Condemnation. ............................ 17
SECTION 1.14. Alterations ........................................... 17
SECTION 1.15. Compliance with Applicable Laws and Regulations ....... 18
SECTION 1.16. Asbestos .............................................. 20
SECTION 1.17. Books and Records; Reports ............................ 21
SECTION 1.18. No Claims Against Mortgagee ........................... 21
SECTION 1.19. Utility Services ...................................... 21
ARTICLE II ASSIGNMENT OF RENTS; SECURITY AGREEMENT ............... 22
SECTION 2.1. Assignment of Leases, Rents, Issues and Profits. ...... 22
SECTION 2.2. Security Interest in Personal Property. ............... 24
ARTICLE III EVENTS OF DEFAULT AND REMEDIES ........................ 24
SECTION 3.1. Remedies in Case of an Occurrence of an Event of
Default ............................................... 24
SECTION 3.2. Sale of Mortgaged Property If Event of Default
Occurs; Proceeds of Sale. ............................. 26
SECTION 3.3. Additional Remedies in Case of an Event of Default. ... 27
SECTION 3.4. Legal Proceedings After an Event of Default. .......... 28
SECTION 3.5. Remedies Not Exclusive ................................ 29
ARTICLE IV CERTAIN DEFINITIONS ................................... 29
ARTICLE V MISCELLANEOUS ......................................... 30
SECTION 5.1. Severability .......................................... 30
SECTION 5.2. Notices ............................................... 31
SECTION 5.3. Covenants To Run with the Land ........................ 31
SECTION 5.4. Captions; Gender and Number ........................... 31
SECTION 5.5. Limitation on Interest Payable ........................ 31
SECTION 5.6. Indemnification; Reimbursement ........................
SECTION 5.7. Choice of Law ......................................... 32
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SECTION 5.8. Changes in Writing .................................... 32
SECTION 5.9. No Merger ............................................. 32
SECTION 5.10. Concerning Mortgagee. ................................. 32
SECTION 5.11. Mortgagee's Right To Sever Indebtedness. .............. 33
SECTION 5.12. Waiver of Stay. ....................................... 34
SECTION 5.13. No Credit for Payment of Taxes or Impositions ......... 34
SECTION 5.14. Stamp and Other Taxes ................................. 34
SECTION 5.15. Estoppel Certificates ................................. 35
SECTION 5.16. Additional Security ................................... 35
SECTION 5.17. Release ............................................... 35
SECTION 5.18. Expenses of Collection ................................ 35
SECTION 5.19. Business Days ......................................... 35
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AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES,
SECURITY AGREEMENT AND FIXTURE FILING
AMENDED AND RESTATED MORTGAGE, ASSIGNMENT OF LEASES, SECURITY
AGREEMENT AND FIXTURE FILING ("Mortgage"), dated as of August 16, 2002 made by
REPUBLIC ENGINEERED PRODUCTS LLC, a Delaware limited liability company having an
office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as mortgagor, assignor and
debtor (together with any successors or assigns, "Mortgagor"), in favor of
LASALLE BANK NATIONAL ASSOCIATION, a national banking association having an
office at ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as trustee and
collateral agent pursuant to the Indenture (as hereinafter defined), as
mortgagee, assignee and secured party (in such capacity and together with any
successors or assigns in such capacity, "Mortgagee").
R E C I T A L S :
1. Mortgagor is the owner of the land described in Schedule A
annexed hereto and made a part hereof and all the improvements situated thereon.
2. Republic Engineered Products LLC ("Republic Engineered") and Blue
Steel Capital Corp. ("Blue Steel," together with Republic Engineered, the
"Issuers"), Mortgagor, Mortgagee and certain other affiliates of the Issuers
have, in connection with the execution and delivery of this Mortgage, entered
into a certain indenture (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Indenture"; capitalized terms used
herein and not otherwise defined shall have the meanings assigned thereto in the
Indenture), dated as of the date hereof, pursuant to which the Issuers are
issuing their 10% senior secured notes due 2009 (the "Notes") in the aggregate
principal amount of $80,000,000; provided, however, the maximum principal
indebtedness secured by this instrument shall be limited to $25,200,000.
3. This Mortgage is given by Mortgagor in favor of Mortgagee to
secure the payment and performance in full when due, whether at stated maturity,
by acceleration or otherwise (including, without limitation, the payment of
interest and other amounts which would accrue and become due but for the filing
of a petition in bankruptcy or the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. (S) 362(a)), of (i) all obligations of
the Issuers now or hereafter existing under or in respect of the Indenture and
the Notes (including, without limitation, the obligations of the Issuers to pay
principal of, premium, if any, and interest on the Notes when due and payable)
and all other charges, fees, premiums, indemnities and other amounts due or to
become due under or in connection with the Indenture and the Notes and (ii)
without duplication of the amounts described in clause (i), all obligations,
indebtedness and liabilities of Mortgagor pursuant to the terms of this
Mortgage, in each case whether now existing or hereafter arising, and whether in
the regular course of business or otherwise (collectively, the "Secured
Obligations"). The final maturity date of the Secured Obligations is August 16,
2009.
4. On April 2, 2001, Republic Technologies International ("RTI") and
certain of its subsidiaries commenced cases in the United States Bankruptcy
Court for the
Northern District of Ohio, Eastern Division (the "Bankruptcy Court"), under
Chapter 11 of the Bankruptcy Code. On the date hereof, Republic Engineered is
acquiring a substantial portion of the assets of RTI and its subsidiaries
pursuant to the following:
(i) an Asset Purchase Agreement, dated June 7, 2002 (as amended,
supplemented or otherwise modified from time to time, the "RTI Asset Purchase
Agreement"), among RTI and certain of its subsidiaries, and Republic Engineered;
and
(ii) an order of the Bankruptcy Court, dated July 23, 2002 (the
"Sale Order"), entitled "Amended Order Superseding Order (A) Approving Sale of
Certain Assets Free and Clear Of Liens And Stamp or Transfer Taxes Pursuant to
Bankruptcy Code Sections 363(f) and 1146(c), (B) Approving Assumption and
Assignment of Executory Contracts and Unexpired Leases Subject to the Sale
Pursuant to Bankruptcy Code Section 364 and, (C) Approving Settlement Agreement
with USWA, and (D) Waiving the Requirements of Local Bankruptcy Rule 9013-1(a)
and the Ten Day Stay Period Provided by Bankruptcy Rule 6004(g), to which is
attached and made a part thereof the Stipulation Settling Disputes between
Republic Technologies International, LLC, RT Acquisition LLC, Fleet Capital
Corporation, as Agent, and the Majority Noteholders of Senior Secured 13-3/4%
Notes (the "RTI Notes"), dated July 11, 2002 (the "Stipulation").
Pursuant to the Sale Order, and in exchange for the issuance of the
Notes, all Liens on the property and assets to be purchased pursuant to the RTI
Asset Purchase Agreement and the Sale Order which constitutes Collateral
securing the RTI Notes ("Specified Noteholder Collateral") that is subject to
the jurisdiction of the Bankruptcy Court are to be released at the time of the
purchase and the Notes will replace the RTI Notes and are to be secured by a
first lien on the Specified Noteholder Collateral which includes the Mortgaged
Property as defined hereinbelow, certain personal property collateral and the
equity interests in Republic Engineered and its Subsidiaries, all of which
Collateral (other than the equity interests in the Republic Engineered) was part
of the collateral securing the RTI Notes prior to the acquisition contemplated
by the RTI Asset Purchase Agreement and the Sale Order.
Mortgagor has duly authorized the execution and delivery of this
Mortgage and the other Security Documents pursuant to which Mortgagor, Parent
and certain Subsidiaries, as applicable, are granting the aforementioned new
Liens in favor of the Trustee and/or the Collateral Agent, as the case may be,
in the Specified Noteholder Collateral.
The rights, claims and interests of the RTI Notes, the holders thereof
and the relevant Indenture Trustee as to the collateral of the RTI Notes that
are not being purchased by Republic Engineered as purchaser pursuant to the RTI
Asset Purchase Agreement and Sale Order shall not be subject to this Mortgage in
any respect and the rights of the holders of the RTI Notes and the Indenture
Trustee are preserved and are not adversely affected hereby.
This Mortgage is meant to supercede any mortgage instrument, deed of
trust, assignment of leases, security agreement or fixture filing relating to
the same assets.
5. Mortgagee is the assignee of that certain Mortgage, Assignment Of
Leases, Security Agreement and Fixture Filing made by Republic Technologies
International
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LLC to United States Trust Company of New York. Mortgagee is restating such
mortgage as set forth herein.
6. Mortgagor agreed in that certain Security Agreement entered into
between Mortgagor and Mortgagee as of the date hereof that, to the fullest
extent permitted by applicable law, all equipment, machinery, facilities,
installations, apparatus and other items listed in the definition of Equipment
therein, including Equipment at the Mortgaged Property shall constitute personal
property and not fixtures or real property.
G R A N T I N G C L A U S E S :
For and in consideration of the sum of Ten Dollars ($10.00) and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Mortgagor hereby grants, mortgages, bargains, sells, assigns and
conveys to Mortgagee and hereby grants to Mortgagee a security interest in and
mortgage lien upon, all Mortgagor's right, title and interest in and to the
following property whether now owned or held or hereafter acquired
(collectively, the "Mortgaged Property"):
A. Any and all present estates or interests of Mortgagor in the land
described in Schedule A annexed hereto, together with all Mortgagor's
reversionary rights in and to any and all lots, parcels, alterations,
partitions, easements, rights-of-way, sidewalks, strips and gores of land,
drives, roads, curbs, streets, lanes, ways, alleys, passages, passageways, sewer
rights, waters, woods, watercourses, water rights, mineral, gas and oil rights,
power, air, light and other rights, estates, titles, interests, privileges,
liberties, servitudes, licenses, tenements, hereditaments and appurtenances
whatsoever, in any way belonging, relating or appertaining thereto, or any part
thereof, or which hereafter shall in any way belong, relate or be appurtenant
thereto (collectively, the "Land");
B. Any and all estates or interests of Mortgagor in the buildings,
structures and other improvements and any and all Alterations (as hereinafter
defined) now or hereafter located or erected on the Land, including, without
limitation, attachments, walks and ways (collectively, the "Improvements";
together with the Land, the "Premises");
C. Any and all interests of Mortgagor in all permits, licenses,
franchises, certificates, consents, approvals and authorizations, however
characterized, issued or in any way furnished in connection with the Premises,
whether necessary or not for the operation and use of the Premises, including,
without limitation, building permits, certificates of occupancy, environmental
certificates, industrial permits, or licenses and certificates of operation;
provided, however, that Mortgaged Property shall not include any items of
property described in this Granting Clause C to the extent that Mortgagor is
expressly prohibited from granting a Lien thereon or applicable law provides for
the involuntary forfeiture of the property in the event that a Lien is granted
thereon without the consent of the appropriate Person, governmental authority,
agency or instrumentality; provided, further, that in the event of the
termination or elimination of any prohibition or requirement for any consent
contained in any law, rule, regulation, license, franchise, certificate,
consent, approval, authorization or other document, or upon the granting of any
consent, the items of property so excluded from the definition of Mortgaged
Property by
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virtue of the immediately preceding proviso shall (without any act or delivery
by any Person) constitute Mortgaged Property hereunder;
D. Any and all interest of Mortgagor in all "equipment", as such
term is defined in Section 9-102(a)(33) of the Uniform Commercial Code (as in
effect in the state in which the Premises are located, the "UCC"), located at
the Premises, whether or not affixed to the Premises and whether now owned or
hereafter acquired, and shall specifically include, without limitation, (i)
goods which would be considered a "fixture" under Section 9-102(a)(41) of the
UCC or otherwise would be considered a "fixture" or a part of the Premises under
applicable law, except for Real Estate Fixtures, (ii) all machinery, facilities,
installations, apparatus, equipment, office machinery, electronic data
processing equipment, computers and computer hardware and software including,
without limitation, software embedded in the equipment (whether owned or
licensed), all indoor or outdoor furniture, tools, materials, automotive
equipment, motor vehicles, manufacturing, storage and handling equipment,
overhead cranes, cutting and bending machines and other equipment for the
fabrication of steel bars, rods and wire products, furnaces, electric arc
furnaces, ladle arc furnaces, billet ▇▇▇▇▇, reheat furnaces, rolling ▇▇▇▇▇,
conveyors, coilers, cooling beds and all other equipment of any kind or nature
and owned by Mortgagor or in which Mortgagor may have any interest (but only to
the extent of such interest), (iii) all modifications, renewals, improvements,
alterations, repairs, substitutions, attachments, additions, accessions and
other property now or hereafter affixed thereto or used in connection therewith
and (iv) all replacements and all parts therefor (collectively, the
"Equipment");
E. Any and all interest of Mortgagor in all "equipment", as such
term is defined in Section 9-102(a)(33) of the UCC and whether now owned or
hereafter acquired, which is (i) affixed to the Premises, (ii) considered a
fixture or a part of the Premises under applicable law and (iii) integral to the
occupancy or customarily used by occupants in connection with the occupancy of
the Land or the operation of the Improvements thereon as such, as opposed to
manufacturing or other business operations conducted therein or therefrom and,
in any event, shall include, without limitation, all switchboards, utility
systems, sprinkler and alarm systems or other fire prevention or extinguishing
apparatus and materials, HVAC equipment, boilers, oil boilers,
telecommunications equipment, refrigeration, electronic monitoring, water or
lighting systems, power, sanitation, waste removal, pollution abatement or
control, elevators, window cleaning, maintenance or other systems or equipment,
appliances or supplies, all heating apparatus, generators, plumbing, lighting
and gas fixtures, laundry, ventilating and air conditioning equipment, all
awnings, blinds, screens, storm sash, pumping equipment, electrical equipment,
including transformers, radiators and piping, coal stokers, plumbing and
bathroom fixtures, wash-tubs, sinks, stoves, ranges, window shades, motors,
generators, dynamos, kitchen cabinets, incinerators, plants and shrubbery and
all other articles used or useful in connection with the use, operation,
maintenance or repair of any part of the Premises, together with any and all
modifications, renewals, improvements, alterations, repairs, substitutions,
attachments, additions, accessions and other property now or hereafter affixed
thereto or used in connection therewith, all replacements and all parts
therefor, and all substitutes for any of the foregoing (collectively, the "Real
Estate Fixtures");
F. All Mortgagor's right, title and interest, as landlord,
franchisor, licensor or grantor, in all leases and subleases of space,
tenancies, lettings, franchise agreements, licenses,
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occupancy or concession agreements, all books and records which contain payments
under the leases, contracts and other agreements, written or otherwise, now
existing or hereafter entered into relating in any manner to the Premises, the
Equipment or the Real Estate Fixtures and any and all amendments, modifications,
supplements and renewals of any thereof (each such lease, license or agreement,
together with any such amendment, modification, supplement or renewal, a
"Lease"), whether now in effect or hereafter coming into effect including,
without limitation, all rents, additional rents, rental income, receipts,
management fees payable by tenants, cash, guarantees, letters of credit, bonds,
sureties or securities deposited thereunder to secure performance of the
lessee's, franchisee's, licensee's or obligee's obligations thereunder,
revenues, earnings, issues, profits and income, advance rental payments,
payments incident to assignment, sublease or surrender of a Lease, claims for
forfeited deposits, claims for damages and awards, now due or hereafter to
become due, with respect to any Lease (collectively, the "Rents");
G. All general intangibles and contract rights relating to the
Premises, the Equipment or the Real Estate Fixtures and all reserves, deferred
payments, deposits, refunds and claims of every kind or character relating
thereto (collectively, the "Contract Rights");
H. All surveys, title insurance policies, drawings, plans,
specifications, construction contracts, file materials, operating and
maintenance records, catalogues, tenant lists, correspondence, advertising
materials, operating manuals, warranties, guaranties, appraisals, studies and
data relating to the Premises, the Equipment or the Real Estate Fixtures or the
construction of any Alteration or the maintenance of any Permit (as hereinafter
defined);
I. All the estate, right, title, interest, claim, and demand
whatsoever, of Mortgagor, in law, equity, or otherwise howsoever, of, in, and to
the same and every part of the foregoing; and
J. All proceeds of the conversion, voluntary or involuntary, of any
of the foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance (and any unearned premiums thereon), condemnation or
eminent domain, judgment or other awards or payments with respect thereto or
settlement in lieu thereof (including, without limitation, any Net Proceeds or
Net Award (each as hereinafter defined)), including, without limitation,
interest thereon (collectively, "Proceeds").
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee and
Mortgagee's successors and assigns forever, for the purpose of securing the
payment and performance of the Secured Obligations.
C O V E N A N T S :
Mortgagor warrants, represents and covenants to and for the benefit of
Mortgagee as follows:
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ARTICLE I
WARRANTIES, REPRESENTATIONS AND
COVENANTS OF MORTGAGOR
SECTION 1.1. Payment and Performance. Mortgagor shall pay as and when
the same shall become due, whether at its stated maturity, by acceleration or
otherwise, each and every amount payable by Mortgagor in respect of the Secured
Obligations and shall perform, at or prior to the time such performance shall be
due, all other obligations of Mortgagor which constitute Secured Obligations.
SECTION 1.2. Authority and Validity. Mortgagor represents, warrants
and covenants that (i) Mortgagor is duly authorized to execute and deliver this
Mortgage, the Notes, the Indenture and the other documents evidencing or
securing the Secured Obligations (this Mortgage, the Notes, the Indenture and
such other documents, collectively, the "Indenture Documents"), and all
corporate and governmental actions, consents, authorizations and approvals
necessary or required therefor have been duly and effectively taken or obtained,
(ii) this Mortgage and the other Indenture Documents are valid, binding and
enforceable obligations of Mortgagor, except as the enforceability of such
obligations may be limited by bankruptcy, insolvency, reorganization, moratorium
and similar laws relating to or affecting creditors' rights generally or by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (iii) Mortgagor has the
requisite organizational power and lawful authority to execute and deliver this
Mortgage and the other Indenture Documents and to mortgage and grant a security
interest in the Mortgaged Property as contemplated herein.
SECTION 1.3. Good Title.
1.3.1 Mortgagor represents, warrants and covenants that (i)
Mortgagor has (a) good and legal title to the Premises, (b) valid leasehold
interest to the landlord's interest and estate under or in respect of the
Leases, and (c) good title to the interest it purports to own in and to each of
the Permits, the Equipment, the Real Estate Fixtures and the Contract Rights, in
each case subject to no Lien (as that term is defined in the Indenture), except
for those Liens identified on Schedule B annexed hereto (collectively, "Prior
Liens") and the Permitted Collateral Liens (as that term is defined in the
Indenture), (ii) Mortgagor will keep in effect all material rights and
appurtenances to or that constitute a part of the Mortgaged Property which are
necessary for the conduct of Mortgagor's business at the Mortgaged Property,
(iii) Mortgagor will protect, preserve and defend its interest in the Mortgaged
Property and title thereto, (iv) Mortgagor will comply in all material respects
with each of the terms, conditions and provisions of any obligation of Mortgagor
which is secured by the Mortgaged Property or the noncompliance with which could
reasonably be expected to result in the imposition of a Lien on the Mortgaged
Property, (v) Mortgagor will appear and defend the Lien and security interests
created and evidenced hereby and the validity and priority of this Mortgage in
any action or proceeding affecting or purporting to affect the Mortgaged
Property or any of the rights of Mortgagee hereunder, (vi) this Mortgage creates
and constitutes a valid and enforceable Lien on the Mortgaged Property, except
as the enforceability of such obligations may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or affecting
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creditors' rights generally or by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law),
and, to the extent any of the Mortgaged Property shall consist of personalty, a
security interest in the Mortgaged Property, which Lien and security interest
are and will be subject only to (a) Prior Liens (but not to extensions or
replacements of Prior Liens) and (b) Permitted Collateral Liens, (vii) there has
been issued and remain in effect (or applied for, as applicable) each and every
certificate of occupancy or use or other material Permit currently required for
the existing use and occupancy by Mortgagor and its tenants of the Premises and
(viii) the Premises comply in all material respects with all local zoning, land
use, setback or other development and use requirements of Governmental
Authorities (as hereinafter defined), except in the case of clause (vii) where
the failure to obtain such Permit and in the case of clause (viii) where the
failure to comply, could not reasonably be expected to have a Material Adverse
Effect. For purposes of this Mortgage, Material Adverse Effect shall mean, as
applicable: (i) material adverse effect in respect of all Real Property of
Mortgagor which serves as Collateral under the Indenture, and (ii) material
adverse effect in respect of the Mortgaged Property.
1.3.2 Mortgagor, immediately upon obtaining knowledge or
receiving notice, as the case may be, of the pendency of any proceedings for the
eviction of Mortgagor from the Mortgaged Property or any part thereof by
paramount title or otherwise questioning Mortgagor's title to the Mortgaged
Property as warranted in this Mortgage, or of any condition that might
reasonably be expected to give rise to any such proceeding, shall notify
Mortgagee in writing thereof. Mortgagee may participate in such proceedings, and
Mortgagor shall deliver or cause to be delivered to Mortgagee all instruments
reasonably requested by Mortgagee to permit such participation. In any such
proceedings Mortgagee may be represented by counsel reasonably satisfactory to
Mortgagee and the reasonable fees and disbursements of such counsel shall be at
the expense of Mortgagor. If, upon the resolution of such proceedings, Mortgagor
shall suffer a loss of the Mortgaged Property or any part thereof or interest
therein and title insurance proceeds shall be payable to Mortgagor in connection
therewith, such proceeds are hereby assigned to and shall be paid to Mortgagee
to be applied in the same manner as is applicable to proceeds of Asset Sales
pursuant to Section 4.13 of the Indenture.
1.3.3 Mortgagor represents and warrants that upon and after any
release from the lien of this Mortgage of any Released Mortgaged Property (as
each such term is defined in the Indenture) in accordance with Section 11.3(b)
of the Indenture (i) Mortgagor shall have in effect all material rights and
appurtenances that constitute a part of the Mortgaged Property which are
necessary for the conduct of Mortgagor's business at the Mortgaged Property
including, without limitation, any such rights and appurtenances derived from,
in part or whole, any property to be released and (ii) the Premises will comply
in all material respects with all local zoning, land use, setback or other
development and use requirements of Governmental Authorities.
SECTION 1.4. Recording Documentation To Assure Security Interest; Fees
and Expenses.
1.4.1 Mortgagor shall, forthwith after the execution and
delivery of this Mortgage and thereafter, from time to time, cause this Mortgage
and any financing statement, continuation statement or similar instrument
relating to any thereof or to any property intended to
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be subject to the Lien of this Mortgage to be filed, registered and recorded in
such manner and in such places as may be required by any present or future law
in order to publish notice of and fully to protect the validity and priority
thereof or the Lien hereof purported to be created upon the Mortgaged Property
and the interest and rights of Mortgagee therein. Mortgagor shall pay or cause
to be paid all taxes and fees incident to such filing, registration and
recording, and all expenses incident to the preparation, execution and
acknowledgement thereof, and of any instrument of further assurance, and all
Federal or state stamp taxes or other taxes, duties and charges arising out of
or in connection with the execution and delivery of such instruments.
1.4.2 Mortgagor shall, at the sole cost and expense of
Mortgagor, do, execute, acknowledge and deliver all and every such further acts,
deeds, conveyances, mortgages, assignments, notices of assignment, transfers,
financing statements, continuation statements and assurances as Mortgagee shall
from time to time reasonably request to assure, perfect, convey, assign,
mortgage, transfer and confirm unto Mortgagee the property and rights hereby
conveyed or assigned, or which Mortgagor may be or may hereafter become bound to
convey or assign to Mortgagee or which may facilitate the performance of the
terms of this Mortgage or the filing, registering or recording of this Mortgage.
In the event Mortgagor shall fail to execute any instrument required to be
executed by Mortgagor under this subsection 1.4.2 and if such failure shall
constitute an Event of Default, Mortgagee may execute the same as the
attorney-in-fact for Mortgagor, such power of attorney being coupled with an
interest and irrevocable.
SECTION 1.5. Payment of Taxes, Insurance Premiums, Assessments;
Compliance with Law and Insurance Requirements.
1.5.1 Unless contested in accordance with the provisions of
subsection 1.5.5 hereof, Mortgagor shall pay and discharge or cause to be paid
and discharged, from time to time before the same shall become delinquent, all
real estate and other taxes, special assessments, levies, permits, inspection
and license fees, all premiums for insurance, all water and sewer rents and
charges, and all other public charges imposed upon or assessed against the
Mortgaged Property or any part thereof or upon the revenues, rents, issues,
income and profits of the Mortgaged Property, including, without limitation,
those arising in respect of the occupancy, use or possession thereof. Except to
the extent contemplated in Section 1.6 hereof, this subsection 1.5.1 shall not
obligate Mortgagor to pay and discharge any charges imposed upon Mortgagee in
respect of franchise, income or other similar taxes.
1.5.2 Upon the occurrence and during the continuance of an Event
of Default, at the written request of Mortgagee, Mortgagor shall deposit with
Mortgagee, on the first day of each month, an amount reasonably estimated by
Mortgagor to be equal to one-twelfth (1/12th) of the annual taxes, assessments
and other items required to be discharged by Mortgagor under subsection 1.5.1
and amounts reasonably estimated by Mortgagor to be necessary to maintain the
insurance coverages contemplated in Section 1.7. Such amounts shall be held by
Mortgagee without interest to Mortgagor and applied to the payment of each
obligation in respect of which such amounts were deposited, in such order or
priority as Mortgagee shall determine, on or before the date on which such
obligation would become delinquent. If at any time the amounts so deposited by
Mortgagor shall, in Mortgagee's reasonable judgment, be insufficient (when added
to the installments anticipated to be paid thereafter) to discharge any of
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such obligations when due, Mortgagor shall, within five (5) Business Days after
demand, deposit with Mortgagee such additional amounts as may be requested by
Mortgagee. Nothing contained in this Section 1.5 shall affect any right or
remedy of Mortgagee under any provision of this Mortgage or of any statute or
rule of law to pay any such amount from its own funds and to add the amount so
paid, together with interest at a rate ("Default Rate") per annum equal to the
highest rate then payable under the Notes to the other amounts outstanding in
respect of the Secured Obligations or relieve Mortgagor of its obligations to
make or provide for the payment of the annual taxes, assessments and other
charges required to be discharged by Mortgagor under subsection 1.5.1. Mortgagor
hereby grants to Mortgagee a security interest in all sums held pursuant to this
subsection 1.5.2 to secure payment and performance of the Secured Obligations.
During the continuance of an Event of Default, Mortgagee may apply all or any
part of the sums held pursuant to this subsection 1.5.2 to payment and
performance of the Secured Obligations in accordance with Section 6.10 of the
Indenture.
1.5.3 Unless contested in accordance with the provisions of
subsection 1.5.5, Mortgagor shall timely pay, or cause to be paid, all lawful
claims and demands of mechanics, materialmen, laborers, employees, suppliers,
government agencies administering worker's compensation insurance, old age
pensions and social security benefits and all other claims, judgments, demands
or amounts of any nature which, if unpaid, or not bonded, would be likely to
result in the creation of a Lien on the Mortgaged Property or any part thereof
or the Rents arising therefrom, or which would be likely to result in forfeiture
of all or any part of the Mortgaged Property.
1.5.4 Mortgagor shall maintain, or cause to be maintained, in
full force and effect, all material permits, certificates, authorizations,
consents, approvals, licenses, franchises or other instruments now or hereafter
required to be maintained by any federal, state, municipal or local government
or quasi-governmental agency or authority (each of the foregoing, a
"Governmental Authority") to operate or use and occupy the Premises, the Real
Estate Fixtures and the Equipment for their intended uses (collectively, the
"Permits"; each, a "Permit"), except where the failure to maintain or cause to
be maintained would not have a Material Adverse Effect. Mortgagor represents
that none of the Permits will be subject to cancellation, forfeiture or any
limitation on the scope thereof solely by virtue of the execution of this
Mortgage or the foreclosure of the Lien hereof. Unless contested in accordance
with the provisions of subsection 1.5.5, Mortgagor shall comply promptly with,
or cause prompt compliance in all material respects with, (i) all requirements
set forth in the Permits and (ii) all requirements of any law, ordinance, rule,
regulation or similar statute or case law (collectively, "Legal Requirements")
of any Governmental Authority applicable to all or any part of the Mortgaged
Property or the condition, use or occupancy of all or any part thereof or any
recorded deed of restriction, declaration, covenant running with the land or
otherwise, now or hereafter in force, except where the failure to comply would
not have a Material Adverse Effect. Mortgagor shall not initiate or consent to
any change in the zoning, subdivision or any other use classification of the
Land, if such action would be likely to diminish the value of the Mortgaged
Property or impair Mortgagee's rights or benefits hereunder, without the prior
written consent of Mortgagee.
1.5.5 Mortgagor may at its own expense contest the amount or
applicability of any of the obligations described in subsections 1.5.1, 1.5.3
and 1.5.4 by
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appropriate legal proceedings, prosecution of which operates to prevent the
collection or enforcement thereof and the sale or forfeiture of the Mortgaged
Property or any part thereof to satisfy such obligations; provided, however,
that in connection with such contest, Mortgagor shall have made provision for
the payment or performance of such contested obligation on Mortgagor's books if
and to the extent required by generally accepted accounting principles, or shall
have deposited with Mortgagee a sum sufficient to pay and discharge such
obligation and Mortgagee's reasonable estimate of all interest and penalties
related thereto. Notwithstanding the foregoing provisions of this subsection
1.5.5, (i) no contest of any such obligations may be pursued by Mortgagor if
such contest would expose Mortgagee or any holder of Notes to any possible
criminal liability or, unless Mortgagor shall have furnished an Additional
Undertaking (as hereinafter defined) therefor reasonably satisfactory to
Mortgagee, any additional civil liability for failure to comply with such
obligations and (ii) if at any time payment or performance of any obligation
contested by Mortgagor pursuant to this subsection 1.5.5 shall become necessary
to prevent the delivery of a tax or similar deed conveying the Mortgaged
Property or any portion thereof because of nonpayment or nonperformance,
Mortgagor shall pay or perform the same in sufficient time to prevent the
delivery of such tax or similar deed.
1.5.6 Mortgagor shall not in its use and occupancy of the
Premises, the Real Estate Fixtures or the Equipment (including, without
limitation, in the making of any Alteration) take any action that could
reasonably be expected to be the basis for termination, revocation or denial of
any insurance coverage required to be maintained under this Mortgage or that
could reasonably be expected to be the basis for a defense to any claim under
any insurance policy maintained in respect of the Premises, the Real Estate
Fixtures or the Equipment (unless Mortgagor shall have obtained in substitution
for any such insurance an insurance policy or policies complying with the
provisions of Section 1.7 hereof such that there would not result any period of
time during which the insurance coverage required to be maintained hereunder
would not be so maintained) and Mortgagor shall otherwise comply in all respects
with the requirements of any insurer that issues a policy of insurance in
respect of the Premises, the Real Estate Fixtures or the Equipment.
1.5.7 Mortgagor shall, promptly upon receipt of any written
notice regarding any failure by Mortgagor to pay or discharge any of the
obligations described in subsection 1.5.1, 1.5.3, 1.5.4 or 1.5.6, furnish a copy
of such notice to Mortgagee.
SECTION 1.6. Certain Tax Law Changes. In the event of the passage
after the date of this Mortgage of any law deducting from the value of real
property, for the purpose of taxation, amounts in respect of any Lien thereon or
changing in any way the laws for the taxation of mortgages or debts secured by
mortgages for state or local purposes or the manner of the collection of any
such taxes, and imposing a new tax, either directly or indirectly, on this
Mortgage, Mortgagee, any Indenture Document to which Mortgagor is a party or any
other document relating to the Secured Obligations, Mortgagor shall promptly pay
to Mortgagee such amount or amounts as may be necessary from time to time to pay
such tax.
SECTION 1.7. Required Insurance Policies.
1.7.1 Mortgagor shall maintain in respect of the Premises the
following insurance coverages:
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(i) Physical hazard insurance on an "all risk" basis covering,
without limitation, hazards commonly covered by fire and extended
coverage, lightning, windstorm, civil commotion, hail, riot, strike,
water damage, sprinkler leakage, collapse and malicious mischief, in
an amount equal to the full replacement cost of the Improvements, the
Real Estate Fixtures and all Equipment, with such deductibles as would
be maintained by a prudent operator of property similar in use and
configuration to the Premises and located in the locality where the
Premises are located. "Full replacement cost" means the Cost of
Construction (as hereinafter defined) to replace the Improvements, the
Real Estate Fixtures and the Equipment, exclusive of depreciation,
excavation, foundation and footings, as determined from time to time
(but not less frequently than once every twelve (12) months) by any
Person selected by Mortgagor in consultation with its insurance
company or insurance agent, as appropriate;
(ii) Comprehensive general liability insurance against claims
for bodily injury, death or property damage occurring on, in or about
the Premises and any adjoining streets, sidewalks and passageways and
covering any and all claims, including, without limitation, all legal
liability, subject to customary exclusions, to the extent insurable,
imposed upon Mortgagee and all court costs and attorneys' fees,
arising out of or connected with the possession, use, leasing,
operation or condition of the Premises, with policy limits and
deductibles in such amounts as would be maintained by a prudent
operator of property similar in use and configuration to the Premises
and located in the locality where the Premises are located;
(iii) Workers' compensation insurance as required by the laws of
the state in which the Premises are located to protect Mortgagor
against claims for injuries sustained in the course of employment at
the Premises;
(iv) Explosion insurance in respect of any boilers and similar
apparatus located on the Premises or comprising any Real Estate
Fixtures or Equipment, with policy limits and deductibles in such
amounts as would be maintained by a prudent operator of property
similar in use and configuration to the Premises, the Real Estate
Fixtures and the Equipment and located in the locality where the
Premises, the Real Estate Fixtures and the Equipment are located;
(v) To the extent available, during the performance of any
alterations, renovations, repairs, restorations or construction, broad
form builders risk insurance on an all-risk completed value basis;
(vi) Such other insurance, against such risks and with policy
limits and deductibles in such amounts as would be maintained by a
prudent operator of property similar in use and configuration to the
Premises and located in the locality in which the Premises are
located; and
(vii) If the Premises are located in an area designated by the
Secretary of Housing and Urban Development as an area having special
flood hazards and
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in which flood insurance has been made available under the National
Flood Insurance Act of 1968, as amended, flood insurance in such
amounts as would be maintained by a prudent operator of property
similar in use and configuration to the Premises and located in the
locality where the Premises are located.
1.7.2 Mortgagor may maintain the coverages required by this
Section 1.7 under blanket policies covering the Premises and other locations
owned or operated by Mortgagor if the terms of such blanket policies otherwise
comply with the provisions of this Section 1.7 and contain specific coverage
allocations in respect of the Premises determined in accordance with the
provisions of this Section 1.7. All insurance policies required by this Section
1.7 shall be in form customarily maintained by a prudent operator of property
similar in use and configuration to the Premises and located in the locality in
which the Premises are located. All insurance policies in respect of the
coverages required by subsections 1.7.1(i), 1.7.1(iv), 1.7.1(v) and, if
applicable, 1.7.1(vi) shall be in amounts at least sufficient to prevent
coinsurance liability and all losses thereunder shall be payable to Mortgagee,
as loss payee pursuant to a standard noncontributory New York mortgagee
endorsement or local equivalent, and each such policy shall (i) to the extent
available on a commercially reasonable basis, include effective waivers (whether
under the terms of such policy or otherwise) by the insurer of all claims for
insurance premiums against all loss payees and named insureds other than
Mortgagor and all rights of subrogation against any named insured, and (ii)
provide that any losses thereunder shall be payable notwithstanding (a) any act,
failure to act, negligence of, or violation or breach of warranties,
declarations or conditions contained in such policy by Mortgagor or Mortgagee or
any other named insured or loss payee, (b) the occupation or use of the Premises
for purposes more hazardous than permitted by the terms of the policy, (c) any
foreclosure or other proceeding or notice of sale relating to the Premises, the
Real Estate Fixtures or the Equipment or (d) any change in the title to or
ownership or possession of the Premises, the Real Estate Fixtures or the
Equipment; provided, however, that (with respect to items contemplated in
clauses (c) and (d) above) any notice requirements of the applicable policies
are satisfied. All insurance policies in respect of the coverages required by
subsections 1.7.1(ii) and, if applicable, 1.7.1(vi) and 1.7.1(vii), shall name
Mortgagee as an additional insured. Each policy of insurance required under this
Section 1.7 shall provide that it may not be canceled or otherwise terminated
without at least thirty (30) days' prior written notice to Mortgagee and shall
permit Mortgagee to pay any premium therefor within thirty (30) days after
receipt of any notice stating that such premium has not been paid when due. The
policy or policies of such insurance or certificates of insurance evidencing the
required coverages and all renewals or extensions thereof shall be delivered to
Mortgagee. Prior to the occurrence of an Event of Default, settlement of any
claim in an amount in excess of $500,000 under any of the insurance policies
referred to in this Section 1.7 shall require the prior approval of Mortgagee,
which shall not be unreasonably withheld or delayed, and Mortgagor shall use its
best efforts to cause each such insurance policy to contain a provision to such
effect; provided, however, that Mortgagor shall not settle any such claim which
in Mortgagor's reasonable judgment involves loss in an amount greater than
$250,000 but less than $500,000 unless Mortgagor shall have delivered to
Mortgagee, prior to such settlement, an Officers' Certificate (i) describing the
incident giving rise to such claim, (ii) setting forth the amount of the
proposed settlement in respect of such claim and (iii) stating that such
settlement amount constitutes a reasonable settlement in respect of such claim.
During the continuance of any Event of Default, Mortgagor shall not settle any
claim under any of the insurance policies referred to in this Section 1.7
without the prior approval of Mortgagee.
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1.7.3 At least thirty (30) days prior to the expiration of any
insurance policy required by subsection 1.7.1, a policy or policies renewing or
extending such expiring policy or renewal or extension certificates or other
evidence of renewal or extension shall be delivered to Mortgagee.
1.7.4 Mortgagor shall not purchase separate insurance policies
concurrent in form or contributing in the event of loss with those policies
required to be maintained under this Section 1.7, unless Mortgagee is included
thereon as an additional insured and, if applicable, with loss payable to
Mortgagee under an endorsement containing the provisions described in subsection
1.7.2. Mortgagor promptly shall notify Mortgagee whenever any such separate
insurance policy is obtained and promptly shall deliver to Mortgagee the policy
or certificate evidencing such insurance.
1.7.5 Mortgagor shall, immediately upon receipt of any written
notice of any failure by Mortgagor to pay any insurance premium in respect of
any insurance policy required to be maintained under this Section 1.7, furnish a
copy of such notice to Mortgagee.
1.7.6 Mortgagor shall maintain, or cause to be maintained, the
insurance described in this Section 1.7 with primary insurers rated (for claims
paying purposes) in one of the two highest generic categories by each Rating
Agency (as hereinafter defined). All insurers under policies required hereunder
shall be licensed and authorized to issue insurance in the state in which the
Land is located.
SECTION 1.8. Failure To Perform Covenants or To Make Certain
Payments. If Mortgagor shall fail to perform any of the covenants contained in
this Mortgage (including, without limitation, Mortgagor's covenants to (i) pay
the premiums in respect of all required insurance coverages, (ii) pay taxes and
assessments, (iii) make repairs, (iv) discharge Liens, (v) pay or perform any
obligations of Mortgagor under the Leases, or (vi) fail to maintain the
Premises, the Real Property Fixtures and the Equipment as required in Section
1.10), and such failure shall constitute an Event of Default, Mortgagee may, but
shall not be obligated to, make advances to perform such covenant on Mortgagor's
behalf and all sums so advanced shall be included in the Secured Obligations and
shall be secured hereby. Mortgagor shall repay within five Business Days after
demand therefor all sums so advanced by Mortgagee on behalf of Mortgagor, with
interest at the Default Rate. Neither the provisions of this Section 1.8 nor any
action taken by Mortgagee pursuant to the provisions of this Section 1.8 shall
prevent any such failure to observe any covenant contained in this Mortgage from
constituting an Event of Default.
SECTION 1.9. Inspection. Mortgagor shall permit Mortgagee, by its
agents, representatives, accountants and attorneys, to visit and inspect the
Premises, the Real Estate Fixtures and the Equipment at such reasonable times
and upon reasonable notice to Mortgagor as may be reasonably requested by
Mortgagee, subject to Section 4.5(e) of the Indenture. To the extent
practicable, such inspection shall not unreasonably interfere with the normal
operation or business conducted by Mortgagor.
SECTION 1.10. Mortgagor To Maintain Improvements. Mortgagor shall
not commit any waste on the Premises or with respect to any Real Estate Fixtures
or Equipment.
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Mortgagor represents and warrants that (i) the Premises are served by all
utilities required or necessary for the current use thereof, (ii) all streets
necessary to serve the Premises are completed and serviceable and have been
dedicated and accepted as such by the appropriate Governmental Authorities and
(iii) Mortgagor has access to the Premises from public roads sufficient to allow
Mortgagor and its tenants and invitees to conduct its and their businesses at
the Premises in the manner in which a prudent operator of property similar in
use and configuration to the Premises and located in the locality where the
Premises are located would conduct its business. Mortgagor shall, at all times,
maintain the Premises, the Real Estate Fixtures and the Equipment (other than
any portion thereof which shall be obsolete and/or disposed of in accordance
with the provisions of the Indenture) in good operating order, condition and
repair as is customary in the industry and shall make all repairs necessary,
structural or nonstructural, for the operation of Mortgagor's business.
Mortgagor shall (a) not alter the occupancy or use of all or any part of the
Premises, or any Real Estate Fixtures or Equipment, if such action would be
reasonably likely to diminish the value of the Mortgaged Property or impair
Mortgagee's rights and benefits hereunder, without the prior written consent of
Mortgagee, and (b) do all other acts which from the character or use of the
Premises, the Real Estate Fixtures and the Equipment may be reasonably necessary
or appropriate to maintain and preserve their value. The Mortgaged Property
cannot be sold, abandoned or disposed of except as expressly set forth in
Sections 4.13, 11.3 and 11.4 of the Indenture.
SECTION 1.11. Mortgagor's Obligations with Respect to Leases.
1.11.1 Mortgagor shall manage and operate the Mortgaged Property
or cause the Mortgaged Property to be managed and operated in a reasonably
prudent manner and will not, without the written consent of Mortgagee, enter
into any Lease (or any amendment or modification thereof) with any Person other
than Leases permitted under Section 11.3 of the Indenture.
1.11.2 Mortgagor shall not in respect of any Leases:
(i) receive or collect, or permit the receipt or collection
of, any rental or other payments under any Lease more than one (1)
month in advance of the respective period in respect of which they
are to accrue, except that (a) in connection with the execution and
delivery of any Lease or of any amendment to any Lease, rental
payments thereunder may be collected and received in advance in an
amount not in excess of one (1) month's rent and (b) Mortgagor may
receive and collect escalation and other charges in accordance with
the terms of each Lease;
(ii) assign, transfer or hypothecate (other than to Mortgagee
hereunder or as otherwise permitted under Section 1.12 of this
Mortgage) any rental or other payment under any Lease whether then
due or to accrue in the future, the interest of Mortgagor as lessor
under any Lease or the rents, issues, revenues, profits or other
income of the Mortgaged Property;
(iii) enter into any Lease substantially satisfactory to
Mortgagee after the date hereof that does not contain terms
substantially to the effect as follows:
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(a) such Lease and the rights of the tenant thereunder shall
be subject and subordinate to the rights of Mortgagee under and the
Lien of this Mortgage;
(b) such Lease has been assigned as collateral security by
Mortgagor as landlord thereunder to Mortgagee under this Mortgage;
(c) in the case of any foreclosure hereunder, the rights and
remedies of the tenant in respect of any obligations of any
successor landlord thereunder shall be limited to the equity
interest of such successor landlord in the Premises and any
successor landlord shall not (1) be liable for any act, omission or
default of any prior landlord under the Lease or (2) be required to
make or complete any tenant improvements or capital improvements or
repair, restore, rebuild or replace the demised premises or any part
thereof in the event of damage, casualty or condemnation or (3) be
required to pay any amounts to tenant arising under the Lease prior
to such successor landlord taking possession;
(d) the tenant's obligation to pay rent and any additional
rent shall not be subject to any abatement, deduction, counterclaim
or setoff as against any mortgagee or purchaser upon the foreclosure
of any of the Premises for the period prior to such foreclosure or
the giving or granting of a deed in lieu thereof by reason of a
landlord default occurring prior to such foreclosure and such
mortgagee or purchaser will not be bound by any advance payments of
rent in excess of one month or any security deposits unless such
security was actually received; and
(e) subject to Mortgagee's agreement not to disturb the
tenant, the tenant agrees to attorn, upon a foreclosure of the
Premises or the giving or granting of a deed in lieu thereof; or
(iv) terminate or permit the termination of any Lease of space,
accept surrender of all or any portion of the space demised under any
Lease prior to the end of the term thereof or accept assignment of any
Lease to Mortgagor unless:
(a) the tenant under such Lease has not paid the equivalent of
two months' rent and Mortgagor has made reasonable efforts to
collect such rent; or
(b) Mortgagor shall deliver to Mortgagee an Officers'
Certificate to the effect that Mortgagor has entered into a new
Lease (or Leases) for the space covered by the terminated or
assigned Lease with a term (or terms) which expire(s) no earlier
than the date on which the terminated or assigned Lease was to
expire (excluding renewal options), and with a tenant (or tenants)
having a creditworthiness (as reasonably determined by Mortgagor)
sufficient to pay the rent and other charges due under the new Lease
(or Leases), and the tenant(s) shall have commenced
15
paying rent, including, without limitation, all operating
expenses and other amounts payable under the new Lease (or
Leases) without any abatement or concession in an amount at
least equal to the amount which would have then been payable
under the terminated or assigned Lease; or
(c) otherwise permitted under Section 11.3 of the
Indenture.
1.11.3 Mortgagor shall, in all material respects, timely
perform and observe all the terms, covenants and conditions required to be
performed and observed by Mortgagor under each Lease. Mortgagor promptly shall
notify Mortgagee of the receipt of any notice from any lessee under any material
Lease claiming that Mortgagor is in default in the performance or observance of
any of the terms, covenants or conditions thereof to be performed or observed by
Mortgagor and will cause a copy of each such notice to be delivered promptly to
Mortgagee.
1.11.4 Mortgagor shall deliver to Mortgagee, within thirty
(30) days after request thereof (but not more than once in each calendar year),
an Officers' Certificate, (i) containing a list of names of all tenants under
Leases, if any, and the net square footage leased and the annual rental
currently payable by each of them, (ii) stating for which, if any, Leases then
in force Mortgagor has issued a notice of default which default has not been
cured and the nature of such default and (iii) stating that, to the best of such
officers' knowledge, each Lease complies with the provisions of this Mortgage.
Mortgagor shall deliver to Mortgagee within thirty (30) days after request
thereof copies, certified by an officer of Mortgagor, of all Leases not
theretofore delivered to Mortgagee.
SECTION 1.12. Transfer Restrictions. Except as permitted by the
Indenture and under Section 1.11.1 of this Mortgage, Mortgagor shall not sell,
convey, assign or otherwise dispose of, or grant any option with respect to, any
of the Mortgaged Property. Mortgagor shall not create or permit to exist any
Lien upon or with respect to any of the Mortgaged Property other than the
following Liens:
(i) Liens in respect of amounts payable by Mortgagor
pursuant to Section 1.5 if and to the extent such amounts are not
yet due and payable or are being bonded (to the extent required) in
accordance with the provisions of subsection 1.5.3 or are being
contested in accordance with the provisions of subsection 1.5.5;
provided, however, that such Liens shall in all respects be subject
and subordinate in priority to the Lien and security interest
created and evidenced by this Mortgage except to the extent the law
or regulation creating or authorizing such Lien provides that such
Lien must be superior to the Lien and security interest created and
evidenced by this Mortgage.
(ii) Permitted Collateral Liens, provided, however, that the
reference to Existing Liens in clause (ii) of the definition of
Permitted Collateral Liens shall be deemed to include the Prior
Liens; and
(iii) The Lien and security interest granted to Mortgagee
pursuant to this Mortgage.
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SECTION 1.13. Destruction; Condemnation.
1.13.1 Destruction; Insurance Proceeds. If there shall occur any
damage to, or loss or destruction of, the Improvements, Real Estate Fixtures and
Equipment, or any part of any thereof (each, a "Destruction"), Mortgagor shall
promptly send to Mortgagee a notice setting forth the nature and extent of such
Destruction; provided, however, that Mortgagor shall not be required to deliver
the notice contemplated in this sentence in the event that any Destruction would
give rise to insurance proceeds in an amount less than or equal to $500,000. The
proceeds of any insurance payable in respect of any such Destruction shall
constitute Trust Moneys and are hereby assigned and shall be paid to Mortgagee.
All such proceeds, less the amount of any expenses incurred in litigating,
arbitrating, compromising or settling any claim arising out of such Destruction
(the "Net Proceeds"), shall constitute Trust Moneys and be applied in accordance
with the provisions of this Mortgage and/or the Indenture. Mortgagee is hereby
authorized and directed to pay from Trust Moneys any and all such expenses
deemed reasonably necessary by Mortgagee in connection with the foregoing.
1.13.2 Condemnation; Assignment of Award. If there shall occur
any taking of the Mortgaged Property or any part thereof, in or by condemnation
or other eminent domain proceedings pursuant to any law, general or special, or
by reason of the temporary requisition of the use or occupancy of the Mortgaged
Property or any part thereof, by any governmental authority, civil or military
(each, a "Taking"), Mortgagor promptly shall notify Mortgagee upon receiving
notice of such Taking or commencement of proceedings therefor; provided,
however, that Mortgagor shall not be required to deliver the notice contemplated
in this sentence in the event that any Taking would give rise to a loss in an
amount less than or equal to $500,000. Mortgagee may participate in any
proceedings or negotiations which might result in any Taking. Mortgagee may be
represented by counsel reasonably satisfactory to it at the expense of
Mortgagor. Mortgagor shall deliver or cause to be delivered to Mortgagee all
instruments reasonably requested by it to permit such participation. Mortgagor
shall in good faith and with due diligence file and prosecute what would
otherwise be Mortgagor's claim for any such award or payment and cause the same
to be collected and paid over to Mortgagee, and hereby irrevocably authorizes
and empowers Mortgagee, in the name of Mortgagor as its true and lawful
attorney-in-fact or otherwise, to collect and to receipt for any such award or
payment, and, in the event Mortgagor fails so to act or is otherwise in default
hereunder beyond any applicable notice and grace period set forth herein or in
the Indenture, to file and prosecute such claim. Mortgagor shall pay all costs,
fees and expenses reasonably incurred by Mortgagee in connection with any Taking
and seeking and obtaining any award or payment on account thereof. Any proceeds,
award or payment in respect of any Taking shall constitute Trust Moneys and are
hereby assigned and shall be paid to Mortgagee. Mortgagor shall take all steps
necessary to notify the condemning authority of such assignment. Such award or
payment, less the amount of any expenses incurred in litigating, arbitrating,
compromising or settling any claim arising out of such Taking ("Net Award"),
shall be applied in accordance with the provisions of the Indenture. Mortgagee
is hereby authorized and directed to pay from Trust Moneys any and all such
expenses deemed necessary and reasonable by Mortgagee in connection with the
foregoing.
SECTION 1.14. Alterations. Mortgagor shall not make any structural
addition, modification or change (each, an "Alteration") to the Premises, the
Real Estate Fixtures or the Equipment except as permitted by Section 11.3 of the
Indenture. Mortgagor shall (a) complete
17
each Alteration promptly (provided, however, that in the event of the occurrence
of any Force Majeure, Mortgagor shall exercise all reasonable efforts to
complete the Alteration affected thereby as promptly as practicable), in a good
and workmanlike manner and, in all material respects, in compliance with all
applicable local laws, ordinances and requirements and (b) pay when due all
lawful claims for labor performed and materials furnished in connection with
such Alteration, unless contested in accordance with the provisions of
subsection 1.5.5.
SECTION 1.15. Compliance with Applicable Laws and Regulations.
1.15.1 General. Except as set forth on Schedule 1.15.1, to
Mortgagor's knowledge, Mortgagor is in compliance in all material respects with
all laws that are material to the operation of the business at the Mortgaged
Property (the "Business").
1.15.2 Environmental Matters. To Mortgagor's knowledge, except as
set forth on Schedule 1.15.2, (a) the Business and the Mortgaged Property are
and for the last five (5) years have been in compliance in all material respects
with Environmental Laws; (b) there have not been and there are no actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, emission, discharge, presence or disposal of any
Hazardous Substance on any of the Mortgaged Property, that could reasonably be
expected to prevent, hinder or limit continued compliance in all material
respects with Environmental Laws or could reasonably be expected to form the
basis of a material environmental claim against Mortgagor or against any Person
whose liability for any environmental claim Mortgagor has or may have retained
or assumed either contractually or by operation of law; (c) none of the
following exists at any of the Mortgaged Property: (i) under- or above-ground
storage tanks, (ii) friable asbestos containing material, (iii) transformers
containing polychlorinated biphenyls at concentrations greater than 500 parts
per million, or (iv) landfills, surface impoundments, or disposal areas (except
as could not reasonably be expected to form the basis of a material claim); (d)
Mortgagor has provided true and accurate copies of (i) all material reports,
studies and analyses of the cost for the Business as conducted to maintain or
achieve compliance with proposed future requirements of Environmental Law, and
(ii) Environmental Reports, and (e) Mortgagor is in substantial compliance with
all terms and conditions of all Permits or material representations made in such
Permit applications as they relate to the Mortgaged Property.
1.15.3 Definitions. For purposes of this Mortgage:
(i) "Hazardous Substance" means any material, substance,
or waste, or combination thereof which is classified as
hazardous, toxic, pollutant or contaminant or words of similar
meaning, whether solid, liquid or gaseous in nature, under
Environmental Laws, including without limitation petroleum
(including crude oil or any fraction thereof), polychlorinated
biphenyls (PCBs), asbestos and radioactive materials;
(ii) "Environmental Law" means any and all applicable
federal, state, and local statutes, laws, regulations,
ordinances, orders, common law, and similar provisions currently
in existence and applicable and having the force or effect of
law, concerning public health or safety, worker health or safety,
pollution or protection of the environment,
18
including, but not limited to, the Clean Air Act, 42 U.S.C.
(S)7401 et seq. (the "Clean Air Act"), the Clean ▇▇▇▇▇ ▇▇▇, ▇▇
▇.▇.▇. (▇)▇▇▇▇ et seq., the Resource Conservation Recovery Act,
42 U.S.C. 6901 et seq. ("RCRA"), the Toxic Substances Control
Act, 15 U.S.C. (S)2601 et seq., the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. (S)9601 et
seq. ("CERCLA"), the Occupational Safety and Health Act of 1970
(but only to the extent it regulates occupational exposure to
Hazardous Substances), all as amended, and any and all other
applicable laws, all as amended, which govern: (i) the existence,
cleanup, removal and/or remedy of contamination or threat of
contamination at, on or under owned or leased real property; (ii)
the release, threatened release, emission or discharge of
Hazardous Substances into the environment; (iii) the control of
Hazardous Substances; or (iv) the presence, use, manufacturing,
refining production, generation, transport, treatment, storage,
disposal, distribution, importing, labeling, testing, processing,
removal, recycling, handling or recovery of Hazardous Substances;
and
(iii) "Environmental Reports" means any and all
environmental review and assessment reports that Republic
Engineered, its corporate predecessors, or any Subsidiary of
Republic Engineered has ever caused to be prepared or has ever
received within the last five (5) years with respect to the
Mortgaged Property.
1.15.4 Compliance. Subject to Mortgagor's right to contest set
forth in Section 1.5.5 of this Mortgage, and except where failure to comply with
clauses (i), (ii) and (iii) below would not have a Material Adverse Effect,
Mortgagor shall (i) comply or cause compliance in all material respects with any
and all applicable present and future Environmental Laws relating to the
Mortgaged Property and all operations conducted thereat; (ii) conduct or cause
to be conducted and/or pay or cause to be paid, as required, the cost of any
investigation, remediation, removal, response or corrective action
(collectively, "Response Action") relating to any Hazardous Materials on, at,
under or emanating from the Mortgaged Property required by any applicable
present and future Environmental Laws; (iii) not release, discharge or dispose
of any Hazardous Materials on, at, under or from the Mortgaged Property except
in material compliance with any applicable present and future Environmental
Laws; and (iv) apply any insurance proceeds or other sums received by it in
respect of any Response Action relating to any Hazardous Materials to any unpaid
costs or expenses of such Response Action, if any, or to reimbursement for such
costs previously paid by Mortgagee, if any. In the event Mortgagor fails to
comply with the covenants in the preceding sentence and such failure shall
constitute an Event of Default, Mortgagee may (upon receipt of an indemnity or
other security reasonably satisfactory to Mortgagee), in addition to any other
remedies set forth herein, but shall not be obligated to, as trustee for and at
Mortgagor's sole cost and expense cause to be taken, any reasonable Response
Action relating to Hazardous Materials and required by any and all applicable
present and future Environmental Laws. Any reasonable costs or expenses incurred
by Mortgagee for such purpose shall be due within ten (10) days after demand and
payable by Mortgagor and shall bear interest at the Default Rate. Mortgagor
shall provide to Mortgagee and its agents and employees reasonable access to the
Mortgaged Property and upon the occurrence and during the continuation of an
Event of Default, specifically grants to Mortgagee a license, at
19
the sole reasonable cost and expense of Mortgagor, in substantial compliance
with any and all applicable present and future Environmental Laws, to
investigate, remove or otherwise remediate any Hazardous Material located
thereon, or to take any reasonable action with respect to any and all applicable
present and future Environmental Laws or in connection with any Hazardous
Materials that could reasonably be expected to result in a material diminution
in the value of the Mortgaged Property, or in the incurrence of any material
obligation or liability of the holders of the Notes or Mortgagee if Mortgagor
fails to so act and such investigation, removal, remediation or other action is
required under any applicable present and future Environmental Laws; provided,
however, that nothing contained herein shall obligate Mortgagee to exercise any
rights under such license. Upon written demand by Mortgagee, which shall include
a reasonably specific statement of the basis thereof (which shall be specific to
the condition of the Mortgaged Property) and which shall be made not more
frequently than once in any twelve-month period or at any time that Mortgagee is
exercising its remedies under this Mortgage during the continuation of an Event
of Default, Mortgagee shall have the right, but shall not be obligated, at the
sole reasonable cost and expense of Mortgagor, to conduct an environmental audit
or update thereof or other review of the Mortgaged Property, relating to those
items specified in writing or relating to the remedy that the Mortgagee is
exercising under this Mortgage, by such persons or firms appointed by Mortgagee
and reasonably acceptable to Mortgagor, and Mortgagor shall cooperate in all
respects in the conduct of such environmental audit or review, including,
without limitation, by providing reasonable access to the Mortgaged Property and
to all relevant records relating thereto. Mortgagor shall indemnify and hold
Mortgagee harmless from and against all loss, cost, damage or expense
(including, without limitation, reasonable attorneys' and consultants' fees)
that Mortgagee may sustain by reason of the assertion against Mortgagee by any
party of any claim relating to Hazardous Materials or reasonable actions taken
with respect thereto as authorized hereunder other than such loss, cost, damage
or expense, if any, to the extent it is caused solely by the gross negligence or
willful misconduct of Mortgagee or its agents, contractors and subcontractors in
performing any act or exercising its remedies under this Mortgage. It is the
express intention of the parties to this Mortgage that nothing contained herein
or in any other Document shall result in Mortgagee being deemed an "owner" or
"operator" under applicable present and future Environmental Laws.
SECTION 1.16. Asbestos. Mortgagor shall not install nor permit to be
installed in the Mortgaged Property asbestos or any asbestos-containing material
(collectively, "ACM") except in compliance with any and all applicable present
and future Environmental Laws respecting ACM. With respect to any ACM (including
friable or non-friable asbestos or asbestos-containing materials regulated under
any Environmental Law) discovered to be present in the Mortgaged Property at any
time during the operation of this Mortgage, Mortgagor shall comply in all
material respects with any and all applicable present and future Environmental
Laws, all at Mortgagor's sole cost and expense Upon the occurrence and during
the continuation of an Event of Default, Mortgagee may, but shall not be
obligated to, in addition to any other remedies set forth herein, take, in
substantial compliance with any applicable present and future Environmental
Laws, whatever steps it deems reasonably necessary or appropriate to comply with
any and all applicable present and future Environmental Laws. Any costs or
expenses reasonably incurred by Mortgagee for such purpose shall be due within
ten (10) days after demand and payable by Mortgagor and shall bear interest at
the Default Rate. Mortgagor shall provide to Mortgagee and its agents and
employees reasonable access to the Mortgaged Property and hereby specifically
grants to Mortgagee a license to remove or encapsulate such
20
ACM in substantial compliance with any applicable present and future
Environmental Law if Mortgagor fails to do so and removal or encapsulation is
required under any applicable present and future Environmental Law; provided,
however, that nothing contained herein shall obligate Mortgagee to exercise any
rights under such license. Mortgagor shall indemnify and hold Mortgagee harmless
from and against all loss, cost, damage and expense (including, without
limitation, reasonable attorneys' and consultants' fees) that Mortgagee may
sustain as a result of the presence of any ACM and any removal or encapsulation
thereof or compliance with any and all applicable present and future
Environmental Laws other than such loss, cost, damage or expense, if any, to the
extent it is caused solely by the gross negligence or willful misconduct of
Mortgagee or its agents, contractors and subcontractors in performing any act or
exercising its remedies under this Mortgage.
SECTION 1.17. Books and Records; Reports. Mortgagor shall keep proper
books of record and account, which shall accurately represent the financial
condition of the Mortgaged Property. Mortgagee and its authorized
representatives shall have the right upon reasonable advance notice, and at
reasonable times, from time to time, to examine the books and records of
Mortgagor relating to the operation of the Mortgaged Property including, but not
limited to, title and survey information. As a condition to any such inspection,
Mortgagee shall execute and deliver in favor of Mortgagor a confidentiality
agreement which, in the good faith determination of both Mortgagor and
Mortgagee, is in form and substance reasonably satisfactory to Mortgagor and
Mortgagee, provided that (i) during the period prior to any foreclosure of the
Mortgaged Property, the following information concerning the Mortgaged Property
shall be deemed not to be confidential information for purposes of such
confidentiality agreement: title and ownership information as to property and
equipment, property survey information, equipment operating logs, equipment
maintenance logs, and equipment warranty records, and any other information
available in public records and (ii) during the period after any foreclosure of
the Mortgaged Property, only the following shall be deemed to be confidential
information for purposes of such confidentiality agreement: pricing information,
production costs information, customer information. Mortgagee shall agree to
comply, and cause its representatives to comply, with all occupational health
and safety rules and regulations governing the operation of the Mortgaged
Property.
SECTION 1.18. No Claims Against Mortgagee. Nothing contained in this
Mortgage shall constitute any consent or request by Mortgagee, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Premises or any part thereof, nor
as giving Mortgagor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or other
property in such fashion as would permit the making of any claim against
Mortgagee in respect thereof or any claim that any Lien based on the performance
of such labor or services or the furnishing of any such materials or other
property is prior to the Lien of this Mortgage.
SECTION 1.19. Utility Services. Mortgagor shall pay, or cause to be
paid, when due all charges for all public or private utility services, all
public or private rail and highway services, all public or private communication
services, all sprinkler systems, and all protective services, any other services
of whatever kind or nature at any time rendered to or in connection with the
Premises or any part thereof, shall comply in all material respects with all
21
contracts relating to any such services, and shall do all other things required
for the maintenance and continuance of all such services to the extent required
to fulfill the obligations set forth in Section 1.10.
ARTICLE II
ASSIGNMENT OF RENTS; SECURITY AGREEMENT
SECTION 2.1. Assignment of Leases, Rents, Issues and Profits.
2.1.1 Mortgagor absolutely, presently and irrevocably assigns,
transfers and sets over to Mortgagee and grants to Mortgagee, subject to the
terms and conditions hereof, all Mortgagor's estate, right, title, interest,
claim and demand as landlord to collect rent and other sums due under all
existing Leases and any other Leases, including, without limitation, all
extensions of the terms of the Leases (such assigned rights, "Mortgagor's
Interest"), as follows:
(i) the immediate and continuing right to receive and collect
Rents payable by all tenants or other parties pursuant to the Leases;
(ii) all claims, rights, powers, privileges and remedies of
Mortgagor, whether provided for in any Lease or arising by statute or
at law or in equity or otherwise, consequent on any failure on the part
of any tenant to perform or comply with any term of any Lease;
(iii) all rights to take all actions upon the happening of a
default under any Lease as shall be permitted by such Lease or by law,
including, without limitation, the commencement, conduct and
consummation of proceedings at law or in equity; and
(iv) the full power and authority, in the name of Mortgagor or
otherwise, to enforce, collect, receive and receipt for any and all of
the foregoing and to do any and all other acts and things whatsoever
which Mortgagor or any landlord is or may be entitled to do under the
Leases.
2.1.2 Any Rents receivable by Mortgagee hereunder, after payment
of all proper costs and charges, shall be applied to all amounts due and owing
under and as provided in this Mortgage and/or the Indenture. Mortgagee shall be
accountable to Mortgagor only for Rents actually received by Mortgagee pursuant
to this assignment. The collection of such Rents and the application thereof
shall not cure or waive any Event of Default or waive, modify or affect notice
of Event of Default or invalidate any act done pursuant to such notice.
2.1.3 So long as no Event of Default shall have occurred and be
continuing, Mortgagor shall have a license to collect and apply the Rents and to
enforce the obligations of tenants under the Leases; provided, however, that
Mortgagor shall, at any time upon Mortgagee's request, establish a lock box
arrangement with Mortgagee and notify all applicable tenants to make payment of
all amounts due under any Lease to the appropriate lock box account. Immediately
upon the occurrence of any Event of Default, the license granted in the
immediately preceding sentence shall cease and terminate, with or without any
notice, action
22
or proceeding. Upon such Event of Default and during the continuance thereof,
Mortgagee may, to the fullest extent permitted by the Leases (i) exercise any of
Mortgagor's rights under the Leases, (ii) enforce the Leases, (iii) demand,
collect, ▇▇▇ for, attach, levy, recover, receive, compromise and adjust, and
make, execute and deliver receipts and releases for all Rents or other payments
that may then be or may thereafter become due, owing or payable with respect to
the Leases and (iv) generally do, execute and perform any other act, deed,
matter or thing whatsoever that ought to be done, executed and performed in and
about or with respect to the Leases, as fully as allowed or authorized by
Mortgagor's Interest. At such time as any Event of Default which shall have
caused Mortgagor's rights described in the first sentence of this subsection
2.1.3 to cease shall have been cured, Mortgagor shall thereafter be entitled to
exercise the rights described in the first sentence of this subsection 2.1.3
until such time as any other Event of Default shall have occurred and be
continuing.
2.1.4 Mortgagor hereby irrevocably authorizes and directs the
tenant under each Lease to pay directly to, or as directed by, Mortgagee all
Rents accruing or due under its Lease upon receipt of a notice from Mortgagee to
the effect that an Event of Default exists hereunder and requesting such
payment. Mortgagor hereby authorizes the tenant under each Lease to rely upon
and comply with any notice or demand from Mortgagee for payment of Rents to
Mortgagee and Mortgagor shall have no claim against any tenant for Rents paid by
such tenant to Mortgagee pursuant to such notice or demand.
2.1.5 Subject to the provisions of Section 1.11 of this Mortgage,
Mortgagor at its sole cost and expense shall use commercially reasonable efforts
to enforce the Leases in accordance with their terms. Neither this Mortgage nor
any action or inaction on the part of Mortgagee shall release any tenant under
any Lease, any guarantor of any Lease or Mortgagor from any of their respective
obligations under the Leases or constitute an assumption of any such obligation
on the part of Mortgagee. No action or failure to act on the part of Mortgagor
shall adversely affect or limit the rights of Mortgagee under this Mortgage or,
through this Mortgage, under the Leases.
2.1.6 All rights, powers and privileges of Mortgagee herein set
forth are coupled with an interest and are irrevocable, subject to the terms and
conditions hereof, and Mortgagor shall not take any action under the Leases or
otherwise which is inconsistent with this Mortgage or any of the terms hereof
and any such action inconsistent herewith or therewith shall be void. Mortgagor
shall, from time to time, upon request of Mortgagee, execute all instruments and
further assurances and all supplemental instruments and take all such action as
Mortgagee from time to time may reasonably request in order to perfect, preserve
and protect the interests intended to be assigned to Mortgagee hereby.
2.1.7 Subject to the provisions of Section 1.11 of this Mortgage,
Mortgagor shall not, unilaterally or by agreement, subordinate, amend, modify,
extend, discharge, terminate, surrender, waive or otherwise change any term of
any of the Leases in any manner which would (i) materially increase landlord's
obligations thereunder, (ii) reduce landlord's rights thereunder, (iii)
materially decrease tenant's obligations thereunder, (iv) impair the value or
utility of the Mortgaged Property or the Lien of this Mortgage or (v) otherwise
violate this Mortgage. If the Leases shall be amended as permitted hereby, they
shall continue to
23
be subject to the provisions hereof without the necessity of any further act by
any of the parties hereto.
2.1.8 Nothing contained herein shall operate or be construed to
(i) obligate Mortgagee to perform any of the terms, covenants or conditions
contained in the Leases or otherwise to impose any obligation upon Mortgagee
with respect to the Leases (including, without limitation, any obligation
arising out of any covenant of quiet enjoyment contained in the Leases in the
event that any tenant under a Lease shall have been joined as a party defendant
in any action by which the estate of such tenant shall be terminated) or (ii)
place upon Mortgagee any responsibility for the operation, control, care,
management or repair of the Premises.
SECTION 2.2. Security Interest in Personal Property.
2.2.1 This Mortgage shall constitute a security agreement and
shall create and evidence a security interest or common law Lien in all the
Equipment and in all the other items of Mortgaged Property in which a security
interest may be granted or a common law pledge created pursuant to the UCC or
under the common law in such state (collectively, "Personal Property").
2.2.2 Upon the occurrence and during the continuation of any
Event of Default, in addition to the remedies set forth in Article III,
Mortgagee shall have the power to sell the Personal Property in accordance with
the UCC or under other applicable law. It shall not be necessary that any
Personal Property offered be physically present at any such sale or
constructively in the possession of Mortgagee or the person conducting the sale.
2.2.3 Upon the occurrence and during the continuance of any
Event of Default, Mortgagee may sell the Personal Property or any part thereof
at public or private sale with notice to Mortgagor as hereinafter provided. The
Proceeds of any such sale, after deducting all expenses of Mortgagee in taking,
storing, repairing and selling the Personal Property (including, without
limitation, attorneys' fees) shall be applied in the manner set forth in
subsection 3.2.3. At any sale, public or private, of the Personal Property or
any part thereof, Mortgagee may purchase any or all of the Personal Property
offered at such sale.
2.2.4 Mortgagee shall give Mortgagor reasonable notice of any
sale of any of the Personal Property pursuant to the provisions of this Section
2.2. Notwithstanding the provisions of Section 5.2, any such notice shall
conclusively be deemed to be reasonable and effective if such notice is mailed
at least ten (10) days prior to any sale, by first class or certified mail,
postage prepaid to Mortgagor at its address determined in accordance with the
provisions of Section 5.2.
ARTICLE III
EVENTS OF DEFAULT AND REMEDIES
SECTION 3.1. Remedies in Case of an Occurrence of an Event of Default
The occurrence of any event, or the existence of any condition, that is
specified as an "Event of Default" under the Indenture or any other Security
Document shall constitute an "Event of
24
Default" hereunder. An Event of Default shall be deemed to occur if the
Collateral Agent should receive at any time following the closing of the
transaction a Secretary of State's Report indicating that the Collateral Agent's
security interest is not prior to all other security interests or other
interests reflected in the report, other than Permitted Collateral Liens. If an
Event of Default shall have occurred and be continuing, Mortgagee may, but shall
not be obligated to, in addition to any other action permitted by law (and not
limited in any manner by the remedies contained in the Notes and the Indenture),
take one or more of the following actions, to the greatest extent permitted by
applicable local law:
3.1.1 By written notice to Mortgagor, the Mortgagee may, and
shall, upon the request of the holders of not less than 25% in aggregate
principal amount of the outstanding Notes, declare the principal of and accrued
interest on, all the Secured Obligations to be due and payable immediately;
3.1.2 Personally, or by its agents or attorneys, (i) enter into
and upon all or any part of the Mortgaged Property and exclude Mortgagor, its
agents and servants wholly therefrom, (ii) use, operate, manage and control the
Premises, the Real Estate Fixtures and the Equipment and conduct the business
7thereof, (iii) maintain and restore the Mortgaged Property, (iv) make all
reasonably necessary or proper repairs, renewals and replacements and such
useful Alterations thereto and thereon as Mortgagee may deem advisable, (v)
manage, lease and operate the Mortgaged Property and carry on the business
thereof and exercise all rights and powers of Mortgagor with respect thereto
either in the name of Mortgagor or otherwise, or (vi) collect and receive all
earnings, revenues, rents, issues, profits and income of the Mortgaged Property
and any or every part thereof;
3.1.3 With or without entry, personally or by its agents or
attorneys, (i) sell the Mortgaged Property and all estate, right, title and
interest, claim and demand therein at one or more sales in one or more parcels,
in accordance with the provisions of Section 3.2 or (ii) institute and prosecute
proceedings for the complete or partial foreclosure of the Lien and security
interests created and evidenced hereby; or
3.1.4 Take such steps to protect and enforce its rights whether
by action, suit or proceeding at law or in equity for the specific performance
of any covenant, condition or agreement in the Indenture, the Notes and any
other document evidencing or securing the Secured Obligations or in aid of the
execution of any power granted in this Mortgage, or for any foreclosure
hereunder, or for the enforcement of any other appropriate legal or equitable
remedy or otherwise as Mortgagee shall elect.
Notwithstanding anything to the contrary in this Mortgage, if Mortgagor is in
breach of a covenant, obligation or representation qualified by a Material
Adverse Effect, then (i) if such breach is due to the existence of a Material
Adverse Effect of the type referred to in clause (i) of the definition of such
term, then Mortgagee shall be entitled to those remedies set forth in this
Article III upon the occurrence of an Event of Default resulting from such
breach, and (ii) if such breach is due to the existence of a Material Adverse
Effect of the type referred to in clause (ii) of the definition of such term,
then (x) Mortgagee's remedies under this Mortgage shall be limited to an action
for specific performance with respect to the performance of such covenant or
25
obligation and (y) such breach shall be deemed not to be and not to give rise to
an Event of Default.
SECTION 3.2. Sale of Mortgaged Property If Event of Default Occurs;
Proceeds of Sale.
3.2.1 If an Event of Default shall have occurred and be
continuing, Mortgagee may institute an action to foreclose this Mortgage or take
such other action as may be permitted and available to Mortgagee at law or in
equity for the enforcement of the Indenture and the Notes and realization on the
Mortgaged Property and proceeds thereon through power of sale or to final
judgment and execution thereof for the Secured Obligations, and in furtherance
thereof Mortgagee may sell the Mortgaged Property at one or more sales, as an
entirety or in parcels, at such time and place, upon such terms and after such
notice thereof as may be required or permitted by law or statute or in equity.
Mortgagee may execute and deliver to the purchaser at such sale a conveyance of
the Mortgaged Property in fee simple and an assignment or conveyance of all
Mortgagor's interest in the Leases and the Mortgaged Property, each of which
conveyances and assignments shall contain recitals as to the Event of Default
upon which the execution of the power of sale herein granted depends and
Mortgagor hereby constitutes and appoints Mortgagee the true and lawful
attorney-in-fact of Mortgagor to make any such recitals, sale, assignment and
conveyance, and all of the acts of Mortgagee as such attorney-in-fact are hereby
ratified and confirmed. Mortgagor agrees that such recitals shall be binding and
conclusive upon Mortgagor and that any assignment or conveyance to be made by
Mortgagee shall divest Mortgagor of all right, title, interest, equity and right
of redemption, including any statutory redemption, in and to the Mortgaged
Property. The power and agency hereby granted are coupled with an interest and
are irrevocable by death or dissolution, or otherwise, and are in addition to
any and all other remedies which Mortgagee may have hereunder, at law or in
equity. So long as the Secured Obligations, or any part thereof, remain unpaid,
Mortgagor agrees that possession of the Mortgaged Property by Mortgagor, or any
person claiming under Mortgagor, shall be as tenant and, in case of a sale under
power or upon foreclosure as provided in this Mortgage, Mortgagor and any person
in possession under Mortgagor, as to whose interest such sale was not made
subject, shall, at the option of the purchaser at such sale, then become and be
tenants holding over, and shall forthwith deliver possession to such purchaser,
or be summarily dispossessed in accordance with the laws applicable to tenants
holding over. In case of any sale under this Mortgage by virtue of the exercise
of the powers herein granted, or pursuant to any order in any judicial
proceeding or otherwise, the Mortgaged Property may be sold as an entirety or in
separate parcels in such manner or order as Mortgagee in its sole discretion may
elect. One or more exercises of powers herein granted shall not extinguish or
exhaust such powers, until the entire Mortgaged Property is sold or all amounts
secured hereby are paid in full.
3.2.2 In the event of any sale made under or by virtue of this
Article III, the entire principal of and accrued interest in respect of the
Secured Obligations, if not previously due and payable, may, at the option of
Mortgagee, and shall upon the request of the holders of not less than 25% in
aggregate principal amount of the outstanding Notes, immediately become due and
payable, anything in this Mortgage to the contrary notwithstanding.
3.2.3 The proceeds of any sale made under or by virtue of this
Article III, together with any other sums which then may be held by Mortgagee
under this
26
Mortgage, whether under the provisions of this Article III or otherwise, shall,
except as otherwise required by law, be applied in accordance with the
provisions of the Indenture.
3.2.4 Mortgagee may bid for and acquire the Mortgaged Property
or any part thereof at any sale made under or by virtue of this Article III and,
in lieu of paying cash therefor, may make settlement for the purchase price by
crediting against the purchase price the unpaid amounts outstanding to Mortgagee
whether or not then due and owing in respect of the Secured Obligations, after,
to the extent permitted by applicable law, deducting from the sales price the
expense of the sale and the reasonable costs of the action or proceedings and
any other sums that Mortgagee is authorized to deduct under this Mortgage.
3.2.5 To the extent permitted by applicable law, Mortgagee may
adjourn from time to time any sale by it to be made under or by virtue of this
Mortgage by announcement at the time and place appointed for such sale or for
such adjourned sale or sales and Mortgagee, without further notice or
publication, may make such sale at the time and place to which the same shall be
so adjourned.
SECTION 3.3. Additional Remedies in Case of an Event of Default.
3.3.1 Mortgagee shall be entitled to recover judgment as
aforesaid either before, after or during the pendency of any proceedings for the
enforcement of the provisions of this Mortgage, and the right of Mortgagee to
recover such judgment shall not be affected by any entry or sale hereunder, or
by the exercise of any other right, power or remedy for the enforcement of the
provisions of this Mortgage, or the foreclosure of, or absolute conveyance
pursuant to, this Mortgage. In case of proceedings against Mortgagor in
insolvency or bankruptcy or any proceedings for its reorganization or involving
the liquidation of its assets, Mortgagee shall be entitled to prove the whole
amount of principal and interest and other payments, charges and costs due in
respect of the Secured Obligations to the full amount thereof without deducting
therefrom any proceeds obtained from the sale of the whole or any part of the
Mortgaged Property; provided, however, that in no case shall Mortgagee receive a
greater amount than the aggregate of such principal, interest and such other
payments, charges and costs (with interest at the Default Rate) from the
proceeds of the sale of the Mortgaged Property and the distribution from the
estate of Mortgagor.
3.3.2 Any recovery of any judgment by Mortgagee and any levy of
any execution under any judgment upon the Mortgaged Property shall not affect in
any manner or to any extent the Lien and security interest created and evidenced
hereby upon the Mortgaged Property or any part thereof, or any conveyances,
powers, rights and remedies of Mortgagee hereunder, but such conveyances,
powers, rights and remedies shall continue unimpaired as before.
3.3.3 Any moneys collected by Mortgagee under this Section 3.3
shall be applied in accordance with the provisions of subsection 3.2.3.
3.3.4 Mortgagee shall be entitled to exercise all other remedies
permitted by law or equity that Mortgagee is entitled to take with respect to
the Mortgaged Property, including the right to receive payment with respect
thereto.
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3.3.5 To the extent that it may lawfully so agree, the Mortgagor
will not at any time insist upon, plead, claim or take the benefit or advantage
of, any appraisement, valuation, stay, extension or redemption law now or
hereafter in force, in order to prevent or hinder the enforcement of this
Mortgage or the absolute sale of the Mortgaged Property, or any part thereof, or
the possession thereof by any purchaser at any sale under this Article III; and
the Mortgagor, for itself and all who may claim under it, so far as it or they
now or hereafter may lawfully do so, hereby waives the benefit of all such laws.
SECTION 3.4. Legal Proceedings After an Event of Default.
3.4.1 After the occurrence of any Event of Default and
immediately upon the commencement of any action, suit or legal proceedings to
obtain judgment for the Secured Obligations or any part thereof, or of any
proceedings to foreclose the Lien and security interest created and evidenced
hereby or otherwise enforce the provisions of this Mortgage or of any other
proceedings in aid of the enforcement of this Mortgage, Mortgagor shall enter
its voluntary appearance in such action, suit or proceeding.
3.4.2 Upon the occurrence of an Event of Default, Mortgagee
shall be entitled forthwith as a matter of right, concurrently or independently
of any other right or remedy hereunder either before or after declaring the
Secured Obligations or any part thereof to be due and payable, to the
appointment of a receiver or other custodian ex parte and without giving notice
to any party and without regard to the adequacy or inadequacy of any security
for the Secured Obligations or the solvency or insolvency of any person or
entity then legally or equitably liable for the Secured Obligations or any
portion thereof. Mortgagor hereby consents to the appointment of such receiver.
Notwithstanding the appointment of any receiver or other custodian, Mortgagee
shall be entitled as pledgee to the possession and control of any cash, deposits
or instruments at the time held by or payable or deliverable under the terms of
the Indenture to Mortgagee. The Mortgagor, for itself and all who may claim
under it, hereby waives, to the extent that it may lawfully do so, the benefits
of all laws that require the Mortgagee to post a bond in connection with the
appointment of a receiver or other custodian pursuant to this Section 3.4.2.
3.4.3 Mortgagor shall not (i) at any time insist upon or plead
or in any manner whatsoever claim or take any benefit or advantage of any stay
or extension or moratorium law, any exemption from execution or sale of the
Mortgaged Property or any part thereof, wherever enacted, now or at any time
hereafter in force, which may affect the covenants and terms of performance of
this Mortgage, (ii) claim, take or insist on any benefit or advantage of any law
now or hereafter in force providing for the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior to any sale or sales of the
Mortgaged Property which may be made pursuant to this Mortgage, or pursuant to
any decree, judgment or order of any court of competent jurisdiction or (iii)
after any such sale or sales, claim or exercise any right under any statute
heretofore or hereafter enacted to redeem the property so sold or any part
thereof. To the extent permitted by applicable law, Mortgagor hereby expressly
(i) waives all benefit or advantage of any such law or laws, including, without
limitation, any statute of limitations applicable to this Mortgage, (ii) waives
and Mortgagee by acceptance of this Mortgage waives any and all rights to trial
by jury in any action or proceeding related to the enforcement of this Mortgage,
(iii) waives any objection which it may now or hereafter have to the laying of
venue
28
of any action, suit or proceeding brought in connection with this Mortgage in
any jurisdiction to which it has consented under the Indenture or any Security
Document and further waives and agrees not to plead that any such action, suit
or proceeding brought in any such jurisdiction has been brought in an
inconvenient forum and (iv) covenants not to delay or impede the execution of
any power granted or delegated to Mortgagee by this Mortgage, but to suffer and
permit the execution of every such power as though no such law or laws had been
made or enacted. Mortgagor, for itself and all who may claim under it, waives
all rights to have the Mortgaged Property marshalled on any foreclosure of this
Mortgage.
SECTION 3.5. Remedies Not Exclusive
.. No remedy conferred upon or reserved to Mortgagee by this Mortgage is intended
to be exclusive of any other remedy or remedies, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under
this Mortgage or now or hereafter existing at law or in equity. Any delay or
omission of Mortgagee to exercise any right or power accruing upon the
occurrence of an Event of Default shall not impair any such right or power and
shall not be construed to be a waiver of or acquiescence in any such Event of
Default. Every power and remedy given by this Mortgage may be exercised from
time to time concurrently or independently, when and as often as may be deemed
expedient by Mortgagee in such order and manner as Mortgagee, in its sole
discretion, may elect. If Mortgagee accepts any moneys required to be paid by
Mortgagor under this Mortgage after the same become due, such acceptance shall
not constitute a waiver of the right either to require prompt payment, when due,
of all other sums secured by this Mortgage or to declare an Event of Default
with regard to subsequent defaults. If Mortgagee accepts any moneys required to
be paid by Mortgagor under this Mortgage in an amount less than the sum then
due, such acceptance shall be deemed an acceptance on account only and on the
condition that it shall not constitute a waiver of the obligation of Mortgagor
to pay the entire sum then due, and Mortgagor's failure to pay the entire sum
then due shall be and continue to be a default hereunder notwithstanding
acceptance of such amount on account.
ARTICLE IV
CERTAIN DEFINITIONS
The following terms shall have the following respective meanings:
"Additional Undertaking" means (a) cash or Cash Equivalents or (b) a
Surety Bond, Guaranty or Letter of Credit which is (i) provided by a Person,
(ii) whose long-term unsecured debt is rated at least AA (or equivalent) and
(iii) is otherwise satisfactory to Mortgagee. Additional Undertakings shall be
addressed directly to Mortgagee and shall name Mortgagee as the beneficiary
thereof and the party entitled to make claims thereunder.
"Cost of Construction" means the sum, so far as it relates to the
reconstructing, renewing, restoring or replacing of the Improvements, of (i)
obligations incurred or assumed by Mortgagor or undertaken by tenants pursuant
to the terms of the Leases for labor, materials and other expenses and to
contractors, builders and materialmen; (ii) the cost of contract bonds and of
insurance of all kinds that may reasonably be deemed by Mortgagor to be
necessary during the
29
course of construction; (iii) the expenses incurred or assumed by Mortgagor (or
tenant under the Lease performing such Restoration) for test borings, surveys,
estimates, permits, any Plans and Specifications and preliminary investigations
therefor, and for supervising construction, as well as for the performance of
all other duties required by or reasonably necessary for proper construction;
(iv) ad valorem property taxes levied upon the Premises during performance of
any Restoration; (v) any costs or other charges in connection with obtaining
title insurance and counsel opinions that may be required or necessary in
connection with a Restoration; and (vi) any costs or other charges in connection
with obtaining services (including legal counsel) that may reasonably be deemed
by Mortgagor to be necessary in connection with the construction.
"Force Majeure" means any acts of God, fires, explosions, floods,
epidemic, abnormal storms, acts of a public enemy, wars, blockades, riots,
rebellions, sabotage, insurrections, restraints of government or civil
disturbances, national, regional or local labor strikes, work stoppages,
boycotts, walkouts or other labor disputes, but only to the extent that any such
act, event or circumstances (i) is beyond the reasonable control of Mortgagor,
and (ii) is reasonably unforeseen.
"Letter of Credit" means a clean, irrevocable, unconditional letter of
credit in favor of Mortgagee and entitling Mortgagee to draw thereon in The City
of New York issued by a bank with a letter of credit evaluation determined by
each Rating Agency, at the time such letter of credit is delivered, in one of
the three highest generic rating categories of such Rating Agency.
"Rating Agency" means Standard & Poor's Rating Services, if such
Person shall then be rating corporate obligations, and ▇▇▇▇▇'▇ Investors
Service, Inc., if such Person shall then be rating corporate obligations, or, if
neither such Person shall be rating corporate obligations, then any other
organization of generally recognized standing, selected by Mortgagee.
"rated or rating" in connection with long-term unsecured debt, means
that the Person in question has, or has been determined to be qualified for, the
rating in question by the Rating Agency.
"Surety Bond" means a clean irrevocable surety bond or credit
insurance policy in favor of Mortgagee issued by an insurance company the claims
paying ability rating of which at the time such surety bond or credit insurance
policy is delivered is in one of the three highest generic rating categories of
each Rating Agency.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Severability. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Mortgage, but this
Mortgage shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein. The invalidity of any
provision of this
30
Mortgage in any one jurisdiction shall not affect or impair in any manner the
validity of such provision in any other jurisdiction.
SECTION 5.2. Notices. Unless otherwise provided herein or in the
Indenture, any notice or other communication herein shall be given in the manner
and at the address set forth in the Indenture, or as to any party at such other
address as shall be designated by such party in a written notice to the other
party.
SECTION 5.3. Covenants To Run with the Land. All of the grants,
covenants, terms, provisions and conditions in this Mortgage shall run with the
land and shall apply to and bind the successors and assigns of Mortgagor.
SECTION 5.4. Captions; Gender and Number. The captions and section
headings of this Mortgage are for convenience only and are not to be used to
define the provisions hereof. All terms contained herein shall be construed,
whenever the context of this Mortgage requires, so that the singular includes
the plural and so that the masculine includes the feminine.
SECTION 5.5. Limitation on Interest Payable. It is the intention of
the parties to conform strictly to the usury laws, whether state or federal,
that are applicable to the transaction of which this Mortgage is a part. All
agreements between Mortgagor and the Mortgagee, whether now existing or
hereafter arising and whether oral or written, are hereby expressly limited so
that in no contingency or event whatsoever shall the amount paid or agreed to be
paid by Mortgagor for the use, forbearance or detention of the money to be
loaned or advanced under the Indenture or any related document, or for the
payment or performance of any covenant or obligation contained herein or in the
Indenture, exceed the maximum amount permissible under applicable federal or
state usury laws. If under any circumstances whatsoever fulfillment of any such
provision, at the time performance of such provision shall be due, shall involve
exceeding the limit of validity prescribed by law, then the obligation to be
fulfilled shall be reduced to the limit of such validity. If under any
circumstances Mortgagor shall have paid an amount deemed interest by applicable
law, which would exceed the highest lawful rate, such amount that would be
excessive interest under applicable usury laws shall be applied to the reduction
of the principal amount owing in respect of the Secured Obligations and not to
the payment of interest, or if such excessive interest exceeds the unpaid
balance of principal and any other amounts due hereunder, the excess shall be
refunded to Mortgagor. All sums paid or agreed to be paid for the use,
forbearance or detention of the principal under any extension of credit or
advancement of funds by Mortgagee shall, to the extent permitted by applicable
law, and to the extent necessary to preclude exceeding the limit of validity
prescribed by law, be amortized, prorated, allocated and spread from the date of
this Mortgage until payment in full of the Secured Obligations so that the
actual rate of interest on account of such principal amounts is uniform
throughout the term hereof.
SECTION 5.6. Indemnification; Reimbursement. Each and every
obligation of Mortgagor to indemnify and hold harmless the Mortgagee, as
collateral agent under the Intercreditor Agreement, contained in Article III of
the Access Intercreditor Agreement is incorporated herein mutatis mutandis as an
obligation of Mortgagor hereunder to indemnify Mortgagee and the officers,
directors, employees, agents and affiliates of Mortgagee (each, an
31
"Indemnified Party"). In addition to the foregoing, Mortgagor shall reimburse
Mortgagee, within five (5) Business Days after demand, for all costs and
expenses reasonably incurred by Mortgagee in connection with the administration
and enforcement of this Mortgage, except to the extent any such costs or
expenses result from the gross negligence or willful misconduct of Mortgagee. If
any action or proceeding, including, without limitation, bankruptcy or
insolvency proceedings, is commenced to which action or proceeding Mortgagee is
made a party or in which it becomes necessary to defend or uphold the Lien or
validity of this Mortgage, Mortgagor shall, upon demand, reimburse Mortgagee for
all expenses (including, without limitation, attorneys' and agents' fees and
disbursements) reasonably incurred by Mortgagee in such action or proceeding. In
any action or proceeding to foreclose this Mortgage or to recover or collect the
Secured Obligations, the provisions of law relating to the recovery of costs,
disbursements and allowances shall prevail unaffected by this covenant.
Mortgagor's obligations under this Section 5.6 shall survive the satisfaction of
this Mortgage and the discharge of Mortgagor's other obligations hereunder.
SECTION 5.7. Choice of Law. The terms and provisions of this Mortgage
and the enforcement hereof shall be governed by and construed in accordance with
the laws of the state where the Land is located.
SECTION 5.8. Changes in Writing. This Mortgage may not be modified,
amended, discharged or waived in whole or in part except by an instrument in
writing executed in accordance with the Indenture and signed by (i) Mortgagor,
to the extent any modification, amendment, discharge or waiver is sought to be
enforced against Mortgagor, and (ii) Mortgagee, in accordance with the
provisions of the Indenture to the extent any modification, amendment, discharge
or waiver is sought to be enforced against Mortgagee.
SECTION 5.9. No Merger. The rights and estate created by this
Mortgage shall not, under any circumstances, be held to have merged into any
other estate or interest now owned or hereafter acquired by Mortgagee unless
Mortgagee shall have consented to such merger in writing.
SECTION 5.10. Concerning Mortgagee.
5.10.1 Mortgagee shall be entitled to rely upon any written
notice, statement, certificate, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper person,
and, with respect to all matters pertaining to this Mortgage and its duties
hereunder, upon advice of counsel selected by it.
5.10.2 Mortgagor shall recognize as the mortgagee under this
instrument any party who has succeeded to the interest of Mortgagee under the
Indenture.
5.10.3 If any item of Mortgaged Property also constitutes
collateral granted to Mortgagee under any other mortgage, security agreement,
pledge or instrument of any type, in the event of any conflict between the
provisions of this Mortgage and the provisions of such other mortgage, security
agreement, pledge or instrument of any type in respect of such collateral,
Mortgagee, in its sole discretion, shall select which provision or provisions
shall control.
32
5.10.4 Mortgagee may resign from the performance of all its
functions and duties hereunder at any time by giving ten (10) days' prior
written notice to Mortgagor. Such resignation shall take effect upon the
appointment of a successor Mortgagee pursuant to the provisions of the
Indenture.
5.10.5 Mortgagee has been appointed as collateral agent pursuant
to the Indenture. The actions of Mortgagee hereunder are subject to the
provisions of the Indenture. Mortgagee shall have the right hereunder to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking action (including, without limitation, the
release or substitution of Mortgaged Property), in accordance with this Mortgage
and the Indenture.
SECTION 5.11. Mortgagee's Right To Sever Indebtedness.
5.11.1 Mortgagor acknowledges that (a) the Mortgaged Property
does not constitute the sole source of security for the payment and performance
of the Secured Obligations and that the Secured Obligations are also secured by
property of Mortgagor and its affiliates in other jurisdictions (all such
property, collectively, the "Collateral"), (b) the number of such jurisdictions
and the nature of the transaction of which this instrument is a part are such
that it would have been impracticable for the parties to allocate to each item
of Collateral a specific loan amount and to execute in respect of such item a
separate indenture and (c) Mortgagor intends that Mortgagee have the same rights
with respect to the Mortgaged Property, in foreclosure or otherwise, that
Mortgagee would have had if each item of Collateral had been mortgaged or
pledged pursuant to a separate indenture and mortgage or security document. In
furtherance of such intent, Mortgagor agrees that Mortgagee may at any time by
notice (an "Allocation Notice") to Mortgagor allocate a portion (the "Allocated
Indebtedness") of the Secured Obligations to the Mortgaged Property and sever
from the remaining Secured Obligations the Allocated Indebtedness. From and
after the giving of an Allocation Notice with respect to the Mortgaged Property,
the Secured Obligations hereunder shall be limited to the extent set forth in
the Allocation Notice and (as so limited) shall, for all purposes, be construed
as a separate loan obligation of Mortgagor unrelated to the other transactions
contemplated by the Indenture or any document related to either thereof. To the
extent that the proceeds on any foreclosure of the Mortgaged Property shall
exceed the Allocated Indebtedness, such proceeds shall belong to Mortgagor and
shall not be available hereunder to satisfy any Secured Obligations of Mortgagor
other than the Allocated Indebtedness. In any action or proceeding to foreclose
the Lien of this Mortgage or in connection with any power of sale foreclosure or
other remedy exercised under this Mortgage commenced after the giving by
Mortgagee of an Allocation Notice, the Allocation Notice shall be conclusive
proof of the limits of the Secured Obligations hereby secured, and Mortgagor may
introduce, by way of defense or counterclaim, evidence thereof in any such
action or proceeding.
5.11.2 Mortgagor hereby waives, to the greatest extent permitted
under law, the right to a discharge of any of the Secured Obligations under any
statute or rule of law now or hereafter in effect which provides that
foreclosure of the Lien of this Mortgage or other remedy exercised under this
Mortgage constitutes the exclusive means for satisfaction of the Secured
Obligations or which makes unavailable a deficiency judgment or any subsequent
remedy because Mortgagee elected to proceed with a power of sale foreclosure or
such other
33
remedy or because of any failure by Mortgagee to comply with laws that prescribe
conditions to the entitlement to a deficiency judgment. In the event that,
notwithstanding the foregoing waiver, any court shall for any reason hold that
Mortgagee is not entitled to a deficiency judgment, Mortgagor shall not (a)
introduce in any other jurisdiction such judgment as a defense to enforcement
against Mortgagor of any remedy in the Indenture, any Security Document or any
document related thereto or (b) seek to have such judgment recognized or entered
in any other jurisdiction, and any such judgment shall in all events be limited
in application only to the state or jurisdiction where rendered.
5.11.3 In the event any instrument in addition to the Allocation
Notice is necessary to effectuate the provisions of this Section 5.11,
including, without limitation, any amendment to this Mortgage, any substitute
promissory note or affidavit or certificate of any kind, Mortgagee may execute,
deliver or record such instrument as the attorney-in-fact of Mortgagor in the
event that Mortgagor fails to deliver such instrument within ten (10) days after
delivery to Mortgagor of a request therefor. Such power of attorney is coupled
with an interest and is irrevocable.
SECTION 5.12. Waiver of Stay.
5.12.1 Mortgagor agrees that in the event that Mortgagor or any
property or assets of Mortgagor shall hereafter become the subject of a
voluntary or involuntary proceeding under the Bankruptcy Code or Mortgagor shall
otherwise be a party to any federal or state bankruptcy, insolvency, moratorium
or similar proceeding to which the provisions relating to the automatic stay
under Section 362 of the Bankruptcy Code or any similar provision in any such
law is applicable, then, in any such case, whether or not Mortgagee has
commenced foreclosure proceedings under this Mortgage, Mortgagee shall be
entitled to relief from any such automatic stay as it relates to the exercise of
any of the rights and remedies (including, without limitation, any foreclosure
proceedings) available to Mortgagee as provided in this Mortgage or in any other
document evidencing or securing the Secured Obligations.
5.12.2 Mortgagee shall have the right to petition or move any
court having jurisdiction over any proceeding described in subsection 5.12.1 for
the purposes provided therein, and Mortgagor agrees, to the extent permitted by
law, (i) not to oppose any such petition or motion and, (ii) at Mortgagor's sole
cost and expense, to assist and cooperate with Mortgagee, as may be requested by
Mortgagee from time to time, in obtaining any relief requested by Mortgagee,
including, without limitation, by filing any such petitions, supplemental
petitions, requests for relief, documents, instruments or other items from time
to time requested by Mortgagee or any such court.
SECTION 5.13. No Credit for Payment of Taxes or Impositions.
Mortgagor shall not be entitled to any credit against the principal, premium, if
any, or interest payable on the Notes, and Mortgagor shall not be entitled to
any credit against any other sums which may become payable under the terms
thereof or hereof by reason of the payment of any tax or other impositions on
the Mortgaged Property or any part thereof.
SECTION 5.14. Stamp and Other Taxes. Subject to the provisions of
subsection 1.5.5 relating to permitted contests, Mortgagor shall pay any United
States
34
documentary stamp taxes, with interest and fines and penalties, and any mortgage
recording taxes or fees, with interest and fines and penalties, that may
hereafter be levied, imposed or assessed under or upon or by reason of this
Mortgage or the Secured Obligations or any instrument or transaction affecting
or relating to either thereof and in default thereof Mortgagee may advance the
same and the amount so advanced shall be payable by Mortgagor to Mortgagee
within ten (10) days after demand therefor, together with interest thereon at
the Default Rate.
SECTION 5.15. Estoppel Certificates. Each party hereto shall, from
time to time, upon twenty (20) days' prior written request by the other party,
execute, acknowledge and deliver to such other party a certificate signed by an
authorized officer or officers stating that this Mortgage and the other
Indenture Documents are unmodified and in full force and effect (or, if there
have been modifications, that this Mortgage and such other Indenture Documents,
as applicable, are in full force and effect as modified and setting forth such
modifications) and stating the date to which payments have been made in respect
of the Secured Obligations.
SECTION 5.16. Additional Security. Without notice to or consent of
Mortgagor and without impairment of the Lien and rights created by this
Mortgage, Mortgagee may accept (but Mortgagor shall not be obligated to furnish)
from Mortgagor or from any other Person or Persons, additional security for the
Secured Obligations. Neither the giving of this Mortgage nor the acceptance of
any such additional security shall prevent Mortgagee from resorting, first, to
such additional security, and, second, to the security created by this Mortgage
without affecting Mortgagee's Lien and rights under this Mortgage.
SECTION 5.17. Release. The Lien of this Mortgage shall be released
from the Mortgaged Property or any portion thereof in accordance with the
provisions of the Indenture, including, without limitation, Section 11.3(b)
thereof. Mortgagee, on the written request and at the expense of Mortgagor, will
execute and deliver such proper instruments of release and satisfaction or
assignment as may reasonably be requested to evidence such release or
assignment, and any such instrument, when duly executed by Mortgagee and duly
recorded by Mortgagor in the places where this Mortgage is recorded, shall
conclusively evidence the partial release, release or assignment of this
Mortgage.
SECTION 5.18. Expenses of Collection. In the event this Mortgage or
any other instrument evidencing the Secured Obligations is placed in the hands
of counsel for collection of any amount payable hereunder or thereunder or for
the enforcement of any of the provisions hereof or thereof, Mortgagor agrees to
pay all reasonable costs associated therewith incurred by Mortgagee, either with
or without the institution of an action, suit or other proceeding, in addition
to all costs, disbursements and allowances provided by law, all such costs to be
paid upon demand, together with interest thereon at the Default Rate from the
date of notice or incurring thereof, and the same shall be deemed to be secured
hereby.
SECTION 5.19. Business Days. In the event any time period or any date
provided in this Mortgage ends or falls on a day other than a Business Day, then
such time period shall be deemed to end and such date shall be deemed to fall on
the next succeeding Business Day, and performance herein may be made on such
Business Day, with the same force and effect as if made on such other day.
35
IN WITNESS WHEREOF, the undersigned has executed the foregoing on the day and
year first above written.
Signed and acknowledged REPUBLIC ENGINEERED PRODUCTS
in the presence of: LLC, a Delaware limited liability company
Sign: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------- --------------------------------------
Print: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------- Title: President
Sign: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Print: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇ the 16th of August, 2002, before me the undersigned, a Notary Public
in and for said state, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, personally known to
me or proved to me on the basis of satisfactory evidence to be the person whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity and that by his signature on the instrument,
the person or the entity upon behalf of which the person acted, executed the
instrument.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
SCHEDULE A
LEGAL DESCRIPTION
Exhibit A
ALL THAT TRACT OF LAND, situate partly in the Town of Hamburg and partly in
the Village of Blasdell, Erie County, New York, being parts of ▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ 8 of the Buffalo Creek Reservation and parts of ▇▇▇ ▇▇
▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ 8 of the ▇▇▇▇▇ ▇▇▇▇ Tract, and more particularly
bounded and described according to a plan of survey prepared by ▇▇▇▇▇▇▇▇
Associates of Tonawanda, New York, Drawing Number A-858, and dated June 30, 1994
(the "Plan"), as follows:
BEGINNING on the easterly line of the right of way of Lake Shore Road, a
road varying widths, at the northwesterly corner of a tract of land of that is
designated on the Plan as "PARCEL C", & TRUE POINT OF BEGINNING, the location of
which is ascertained as follows:
BEGINNING at the intersection of the northerly line of the right of way of
Lake Avenue, a street 49.5 feet in width and said easterly line of the right ▇▇
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇; thence along said easterly line of the right of way of
Lake Shore Road, N 04(degree) 35' 35" E, 903.04 feet to said TRUE POINT OF
BEGINNING; thence along said easterly line of the right of way of Lake Shore
Road, the following 5 courses and distances: (1) N 04(degree) 35' 35" E, 143.10
feet, (2) N 02(degree) 57' 00" E, 300.20 feet, (3) N 00(degree) 09' 58" W,
171.30 feet, (4) N 00(degree) 29' 24" E, 121.32 feet, and (5) N 04(degree) 35'
35" E, 146.90 feet to the southwesterly corner of a tract of land that is
designated on the Plan as "PARCEL D"; thence along said last mentioned tract of
land, the following 2 course and distances: (1) S 89(degree) 35' 02" E, 693.00
feet and (2) N 00(degree) 24' 58" E, 441.55 feet to a southwesterly corner of a
tract of land that is designated on the Plan as "PARCEL B", being also the
approximate center of the north branch of the Blasdell Creek; thence along said
last mentioned tract of land and being in and through said Blasdell Creek, the
following 7 courses and distances: (1) N 75(degree) 33' 43" E, 197.33 feet, (2)
N 78(degree) 47' 15" E, 200.00 feet, (3) N 68(degree) 15' 15" E, 290.00 feet,
(4) N 60(degree) 01' 37" E, 165.00 feet, (5) N 67(degree) 56' 43" E, 147.78
feet, (6) N 72(degree) 45' 15" E, 200.00 feet, and (7) N 58" 34' 15" E, 76.94
feet to the municipal boundary line between the Village of Blasdell and the City
of Lackawanna; thence continuing along said last mentioned tract of land, being
also said municipal boundary line and being in and across said north branch of
the Blasdell Creek, S 89(degree) 16' 45" E, 40.00 feet to the south bank of said
north branch of the Blasdell Creek; thence continuing along said last mentioned
tract of land, the following 7 courses and distances: (1) S 00(degree) 05' 15"
W, 100.29 feet, (2) S 89(degree) 54' 45" E, 130.00 feet, (3) S 00(degree) 05'
15" W, 36.00 feet, (4) S 89" 54' 45" E, 210.00 feet, (5) S 09(degree) 07' 37" E,
455.88 feet, (6) S 89(degree) 54' 45" E, 200.00 feet, and (7) S 59" 34' 19" E,
209.13 feet; thence continuing along said last mentioned tract of land, being
partly in and through the south branch of the Blasdell Creek, S 00(degree) 53'
45" W, 1030.00 feet to the northeasterly ▇▇▇▇▇ of the above mentioned tract of
land that is designated on the plan as "PARCEL C"; thence along said last
mentioned tract of land and being in and through said south branch of the
Blasdell Creek, the following 3 courses and distances: (1) N 89(degree) 41' 45"
W, 1860.00 feet, (2) S 79(degree) 45' 15" W, 250.00 feet, and (3) N 89(degree)
21' 16" W, 648.99 feet to said TRUE POINT OF BEGINNING.
SCHEDULE B
PRIOR LIENS
All those matters disclosed on Schedule B to Chicago Title Insurance Company
Policy No. 2213-25052 issued August 16, 2002 to LaSalle Bank National
Association.
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Schedule 1.15.1
Environmental Compliance
Items disclosed on Schedule 1.15.2 are incorporated herein by reference
3
Schedule 1.15.2
Environmental Compliance
Lackawanna Plant
1. An area used historically for mill scale storage is located on a small
portion of the Lackawanna Plant. This area was identified as requiring
corrective action by U.S. EPA pursuant to an administrative order on
consent issued to Bethlehem Steel Corporation in 1990 covering
Bethlehem's larger facility of which the Lackawanna was once a part.
4