Exhibit 4.5
This document was prepared by, and[Virginia] after recording,
please return to:
Shearman & Sterling
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
DEED OF TRUST
from
BEAR ISLAND PAPER COMPANY, L.L.C.,
Grantor successor by merger
to BEAR ISLAND MERGERCO L.L.C.,
successor by conversion to BEAR
ISLAND PAPER COMPANY, L.P.
to
SOUTHERN TITLE SERVICES CORPORATION, Trustee
for the use and
benefit of
CRESTAR BANK,
As Indenture Trustee, Beneficiary
DATED AS OF DECEMBER 1, 1997
This document was prepared by, and after
recording, please return to:
Shearman & Sterling
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
DEED OF TRUST
THIS DEED OF TRUST, dated as of December 1, 1997 is made by
BEAR ISLAND PAPER COMPANY, L.L.C., a Virginia limited liability
company ("GRANTOR"), successor by merger to BEAR ISLAND MERGERCO,
L.L.C., successor by conversion to BEAR ISLAND PAPER COMPANY, L.P.,
whose address is P.O. Box 2119, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇. (▇▇▇▇▇ ▇▇▇),
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to SOUTHERN TITLE SERVICES CORPORATION, a
Virginia corporation, ("TRUSTEE") whose address is ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇, One ▇▇▇▇▇ Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, for the use and benefit of CRESTAR BANK, as Indenture
Trustee for the Holders of the Notes referred to below (in such
capacity, together with its successors and assigns, "BENEFICIARY"),
whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
References to this "DEED OF TRUST" shall mean this instrument and any
and all renewals, modifications, amendments, supplements, extensions,
consolidations, substitutions, spreaders and replacements of this
instrument.
Background
A. Grantor has executed and delivered those certain 10%
Senior Secured Notes due 2007 (such Initial Notes, together with the
Exchange Notes, and any notes issued pursuant to the Indenture to
replace previously issued Initial Notes or Exchange Notes that have
been lost, stolen, mutilated or destroyed, in each case as they may
be further amended, supplemented, replaced, exchanged or otherwise
modified from time to time pursuant to the Indenture, being,
collectively, the "Notes") all of which shall be payable to the
Holders of the Notes in the aggregate principal amount of
$100,000,000 or, if less, the aggregate principal amount of the Notes
outstanding under the Indenture, providing for payment of principal,
premium, if any, and interest at the rate set forth in the Notes and
all other terms and conditions set forth therein. Capitalized terms
not otherwise defined herein shall have the meanings ascribed thereto
in the Indenture, dated as of December 1, 1997, among the Grantor and
Bear Island Finance Company II, as Issuers, Bear Island Timberlands
Company, L.L.C., F.F. ▇▇▇▇▇, Inc. and ▇▇▇▇▇ ▇▇▇▇▇ Industries, Inc.
and Crestar Bank, as Indenture Trustee. References in this Deed of
Trust to the "DEFAULT RATE" shall mean such rate of interest per
annum as shall be required by the provisions of the Indenture upon
the occurrence of certain events described therein.
B. Grantor is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with
all of the buildings, improvements, structures and fixtures now or
subsequently located thereon (the "IMPROVEMENTS") and growing timber
now or subsequently thereon, being collectively referred to as the
"REAL ESTATE").
C. Pursuant to the terms and conditions of the purchase
agreement, dated as of November 21, 1997, between the Issuers and the
purchasers named therein (the "Initial Purchasers"), the Initial
Purchasers have agreed to purchase the Initial Notes.
D. It is a condition precedent, among others, to the
obligations of such Initial Purchasers to purchase the Initial Notes
that Grantor execute and deliver this Deed of Trust.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor agrees that to
secure:
repayment of the principal of and payment of interest
(including, without limitation, interest
accruing after the maturity of the Notes
and interest accruing after the filing of
any petition in bankruptcy, or the
commencement of any insolvency,
reorganization or like proceeding, relating
to Grantor, whether or not a claim for
post-filing or post-petition interest is
allowed in such proceeding) on the Notes
held by each Holder;
payment of all other obligations and
liabilities of Grantor to
Beneficiary and the Holders,
whether direct or indirect,
absolute or contingent, due or to
become due, or now existing or
hereafter incurred, which may
arise under, out of, or in
connection with, the Indenture,
the Notes, this Deed of Trust,
the other Collateral Documents or
any other document made,
delivered or given in connection
herewith or therewith, in each
case whether on account of
principal, interest,
reimbursement obligations,
fees, indemnities, costs,
expenses or otherwise (including,
without limitation, all
reasonable fees and disbursements
of counsel to Beneficiary that
are required to be paid by
Grantor pursuant to the terms of
the Indenture, this Deed of Trust
or any other Collateral
Documents) (the items set forth
in clauses (a) through (c) being
referred to herein collectively
as the "INDEBTEDNESS"); and
the performance and observance of
each obligation, term, covenant
and condition to be performed or
observed by Grantor (the
"OBLIGATIONS") under, in
connection with or pursuant to
the provisions of the Indenture,
the Notes, this Deed of Trust and
any of the other Collateral
Documents;
GRANTOR HEREBY CONVEYS TO TRUSTEE FOR THE BENEFIT OF THE BENEFICIARY
AND THE HOLDERS OF THE NOTES AND HEREBY GRANTS, ASSIGNS, TRANSFERS
AND SETS OVER TO TRUSTEE FOR THE BENEFIT OF THE BENEFICIARY AND THE
HOLDERS OF THE NOTES, IN TRUST FOREVER, WITH GENERAL WARRANTY AND
ENGLISH COVENANTS OF TITLE AND WITH POWER OF SALE AND RIGHT OF ENTRY
AND POSSESSION, AND GRANTS BENEFICIARY AND TRUSTEE A SECURITY
INTEREST IN:
(A) the Real Estate; all (i) trees and timber, including,
without limitation, standing timber and crops, now located
on or hereafter planted or growing in the soil of, or
otherwise attributable to, any of the Premises (as
hereinafter defined), or any part or parcel thereof, and
all additions, substitutions and replacements thereof and
(ii) any and all trees and timber which have been severed,
cut or harvested from the Premises or any part or parcel
thereof ("HARVESTED TIMBER"; all of the foregoing in
clauses (i) and (ii) of this paragraph (A) being referred
to as "TIMBER");
(B) all the estate, right, title, claim or demand
whatsoever of Grantor, in possession or expectancy, in and
to the Real Estate or any part thereof;
(C) all right, title and interest of Grantor in, to and
under all easements, rights of way, gores of land, streets,
ways, alleys, passages, sewer rights, waters, water
courses, water and riparian rights, development rights, air
rights, mineral rights and all estates, rights, titles,
interests, privileges, licenses, tenements, hereditaments
and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents,
issues, profits and revenue thereof and all land lying in
the bed of any street, road or avenue, in front of or
adjoining the Real Estate to the center line thereof;
(D) all right, title and interest of Grantor in, to and under
all of the fixtures, chattels, business machines, machinery,
apparatus, equipment, furnishings, fittings and articles of personal
property of every kind and nature whatsoever, and all appurtenances
and additions thereto and substitutions or replacements thereof
(together with, in each case, attachments, components, parts and
accessories) currently owned or subsequently acquired by Grantor and
now or subsequently attached to, or contained in or used or usable in
any way in connection with any operation or letting of the Real
Estate, including but without limiting the generality of the
foregoing, all screens, awnings, shades, blinds, curtains, draperies,
artwork, carpets, rugs, storm doors and windows, furniture and
furnishings, heating, electrical, and mechanical equipment, lighting,
switchboards, plumbing, ventilating, air conditioning and air-cooling
apparatus, refrigerating, and incinerating equipment, escalators,
elevators, loading and unloading equipment and systems, stoves,
ranges, laundry equipment, cleaning systems (including window
cleaning apparatus), telephones, communication systems (including
satellite dishes and antennae), televisions, computers, sprinkler
systems and other fire prevention and extinguishing apparatus and
materials, security systems, motors, engines, machinery, pipes,
pumps, tanks, conduits, appliances, data processing equipment,
fittings and fixtures of every kind and description (all of the
foregoing in this paragraph (D) being referred to as the
"EQUIPMENT");
(E) all right, title and interest of Grantor in and to all
substitutes and replacements of, and all additions and improvements
to, the Real Estate and the Equipment, subsequently acquired by or
released to Grantor or constructed, assembled or placed by Grantor on
the Real Estate, immediately upon such acquisition, release,
construction, assembling or placement, including, without limitation,
any and all building materials whether stored at the Real Estate or
offsite, and, in each such case, without any further mortgage,
conveyance, assignment or other act by Grantor;
(F) all right, title and interest of Grantor in, to and under
all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Grantor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "LEASES"), and
all rights of Grantor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits
arising from the use and enjoyment of the Trust Property (as defined
below) (collectively, the "RENTS");
(G) all unearned premiums under insurance policies now or
subsequently obtained by Grantor relating to the Real Estate or
Equipment and Grantor's interest in and to all such insurance
policies and all proceeds of any such insurance policies (including
title insurance policies) including the right to collect and receive
such proceeds, subject to the provisions relating to insurance
generally set forth below; and all awards and other compensation,
including the interest payable thereon and the right to collect and
receive the same, made to the present or any subsequent owner of the
Real Estate or Equipment for the taking by eminent domain,
condemnation or otherwise, of all or any part of the Real Estate or
any easement or other right therein;
(H) all right, title and interest of Grantor in and to (i) all
contracts from time to time executed by Grantor or any manager or
agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the
Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate
or any property which is adjacent or peripheral to the Real Estate,
together with the right to exercise such options and all leases of
Equipment (collectively, the "CONTRACTS"), (ii) all consents,
licenses, building permits, documents, certificates of occupancy and
other governmental approvals relating to (a) the construction,
completion, occupancy, use or operation of the Real Estate or any
part thereof and (b) the harvesting, cutting, severing,
transportation, storage, processing or handling of the Timber
(collectively, the "PERMITS") and (iii) all drawings, plans,
engineering reports, specifications, land planning, maps, surveys and
information and any other reports and similar or related items
relating to the Real Estate (collectively, the "PLANS");
(I) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Beneficiary as provided in this Deed of Trust;
(J) all proceeds, both cash and noncash, of the
foregoing;
provided, however, that in each case with respect to all of the
foregoing such grant is made only to the extent the grant by such
Grantor of a security interest pursuant to this Deed of Trust in its
right, title and interest in such contract, agreement, instrument,
indenture or other general intangible is not prohibited by such
contract, agreement, instrument, indenture or other general
intangible without the consent of any party thereto, would not give
any other party to such contract, agreement, instrument, indenture or
other general intangible the right to terminate its obligations
thereunder, or is permitted with consent if all necessary consents to
such grant of a security interest have been obtained from the other
parties thereto (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents); provided
that the foregoing limitation shall not affect, limit, restrict or
impair the grant by such Grantor of a security interest pursuant to
this Deed of Trust in any amounts due or to become due under any such
contract, agreement, instrument, indenture or other general
intangible.
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Grantor and described in
the foregoing clauses (A) through (E) are collectively referred to as
the "PREMISES", and those described in the foregoing clauses (A)
through (J) are collectively referred to as the "TRUST PROPERTY").
TO HAVE AND TO HOLD the Trust Property and the rights and
privileges hereby granted unto Trustee and Beneficiary, their
respective successors and assigns IN TRUST FOREVER for the uses and
purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
Terms and Conditions
Grantor further represents, warrants, covenants and
agrees with Trustee and Beneficiary as follows:
1. Warranty of Title. GRANTOR WARRANTS ITS TITLE TO THE
TRUST PROPERTY GENERALLY AND WITH ENGLISH COVENANTS OF TITLE, subject
only to (i) the matters that are set forth in Schedule B of the title
insurance policy or policies being issued to Beneficiary to insure
the lien of this Deed of Trust, (ii) the security interest granted by
Grantor to Beneficiary pursuant to the Company Security and Pledge
Agreement, (iii) liens permitted by the Indenture and (iv) that
certain Deed of Trust, dated as of December 1, 1997, made by Grantor
to Southern Title Services Corporation, as trustee, for the use and
benefit of Toronto-Dominion (Texas), Inc., as Administrative Agent
(the "First Deed of Trust") (the "PERMITTED EXCEPTIONS").
2. Payment of Indebtedness. Grantor shall pay the
Indebtedness at the times and places and in the manner specified in
the Notes, the Indenture and in any other Collateral Document and
shall perform all the Obligations.
3. Requirements. (a) Grantor shall promptly comply with, or
cause to be complied with, and conform to all present and future
laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements, and irrespective of the nature of the
work to be done, of each of the United States of America, any State
and any municipality, local government or other political subdivision
thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently
created (collectively, "GOVERNMENTAL AUTHORITY") which has
jurisdiction over the Trust Property or relates to the harvesting,
cutting, severance, handling or transporting of Timber, and all
covenants, restrictions and conditions now or later of record which
may be applicable to any of the Trust Property, or to the use, manner
of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Trust Property, except to the
extent that failure to comply therewith could not, in the aggregate,
reasonably be expected to have a material adverse effect on the
business, assets, property, condition (financial or otherwise) or
prospects of the Grantor and its subsidiaries taken as a whole or the
validity or enforceability of this Deed of Trust, the Indenture or
the other Collateral Documents or the rights or remedies of the
Trustee, the Beneficiary or the Holders hereunder or thereunder. All
present and future laws, statutes, codes, ordinances, orders,
judgments, decrees, rules, regulations and requirements of every
governmental authority applicable to Grantor or to any of the Trust
Property and all covenants, restrictions, and conditions which now or
later may be applicable to any of the Trust Property are collectively
referred to as the "LEGAL REQUIREMENTS".
(b) From and after the date of this Deed of Trust, Grantor
shall not by act or omission permit any building or other improvement
on any premises not subject to the lien created by this Deed of Trust
to rely on the Premises or any part thereof or any interest therein
to fulfill any Legal Requirement, and Grantor hereby assigns to
Beneficiary any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used. Grantor shall
not by act or omission impair the integrity of any of the Real Estate
so as to constitute an illegal subdivision or to prohibit separately
described parcels of the Premises and Improvements from being
conveyed as separate zoning or tax lots. Grantor represents that the
Premises are not part of a larger tract of land owned by Grantor or
its affiliates or otherwise considered as part of one zoning or tax
lot, or, if they are that any authorization or variance required for
the subdivision of such larger tract which a sale of the Premises
would entail has been obtained from all appropriate Governmental
Authorities so that the Premises and Improvements constitute one
zoning or tax lot capable of being conveyed as such. Any act or
omission by Grantor which would result in a violation of any of the
provisions of this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Promptly
when due, Grantor shall pay and discharge all taxes of every kind and
nature (including, without limitation, all real and personal
property, income, franchise, withholding, transfer, gains, profits
and gross receipts taxes), all charges for any easement or agreement
maintained for the benefit of any of the Trust Property, all general
and special assessments, levies, permits, inspection and license
fees, all water and sewer rents and charges, vault taxes and all
other public charges even if unforeseen or extraordinary, imposed
upon or assessed against or which may, in each case, become a lien on
any of the Trust Property, or arising in respect of the occupancy,
use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred
to as the "IMPOSITIONS"). Grantor shall within 30 days after each due
date deliver to Beneficiary (i) original or copies of receipted bills
and cancelled checks evidencing payment of such Imposition if it is a
real estate tax or other public charge and (ii) evidence acceptable
to Beneficiary showing the payment of any other such Imposition. If
by law any Imposition, at Grantor's option, may be paid in
installments (whether or not interest shall accrue on the unpaid
balance of such Imposition), Grantor may elect to pay such Imposition
in such installments and shall be responsible for the payment of such
installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Trustee or Beneficiary under this Deed of Trust or otherwise, without
notice or demand to Grantor, to pay any Imposition after the date
such Imposition shall have become due. Any sums paid by Trustee or
Beneficiary in discharge of any Impositions shall be payable on
demand by Grantor to Trustee or Beneficiary, as the case may be,
together with interest at the Default Rate as set forth above.
(c) Grantor shall have the right before any delinquency
occurs to contest or object in good faith to the amount or validity
of any Imposition by appropriate legal proceedings, but such right
shall not be deemed or construed in any way as relieving, modifying,
or extending Grantor's covenant to pay any such Imposition at the
time and in the manner provided in this Section unless (i) Grantor
has given prior written notice to Beneficiary of Grantor's intent so
to contest or object to an Imposition, (ii) Grantor shall demonstrate
to Beneficiary's satisfaction that the legal proceedings shall
operate conclusively to prevent the sale of the Trust Property, or
any part thereof, to satisfy such Imposition prior to final
determination of such proceedings and (iii) Grantor shall furnish a
good and sufficient bond or surety as requested by and reasonably
satisfactory to Beneficiary in the amount of the Impositions which
are being contested plus any interest and penalty which may be
imposed thereon and which could become a charge against the Real
Estate or any part of the Trust Property.
5. Insurance. (a) Grantor shall maintain or cause to be
maintained on all of the Premises:
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may
be covered by an "all risk" policy or a fire policy covering
"special" causes of loss, and the policy limits shall be
automatically reinstated after each loss (provided that Grantor shall
not be obligated to maintain the insurance coverage required by this
subparagraph (i) with respect to any portion of the Premises that
consists of a separate tract or parcel containing 75 or more acres on
which (and only for so long as) the average capitalized cost of the
Improvements is less than $50.00 (Fifty Dollars) per acre net of
depreciation (collectively, "UNIMPROVED LANDS"));
(ii) commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), covering all claims for personal
injury, bodily injury or death, or property damage occurring on, in
or about the Premises in an amount not less than $10,000,000 or such
other amount as may be approved by Beneficiary (such $10,000,000
coverage may be satisfied by a combination of primary and excess
limit or umbrella coverage totalling not less than $10,000,000)
combined single limit with respect to injury and property damage
relating to any one occurrence plus such excess limits as Beneficiary
shall request from time to time;
(iii) insurance against rent loss, extra expense or business
interruption in amounts satisfactory to Beneficiary, but not less
than one year's gross rent or gross income (provided that Grantor
shall not be obligated to maintain the insurance coverage required by
this subparagraph (iii) with respect to any Unimproved Lands);
(iv) if any portion of the Premises upon which any Improvements
are located are in an area identified as a special flood hazard area
by the Federal Emergency Management Agency or other applicable
agency, flood insurance in an amount satisfactory to Beneficiary, but
in no event less than the maximum limit of coverage available under
the National Flood Insurance Act of 1968, as amended; and
(v) such other insurance in such amounts as Beneficiary may
reasonably request from time to time against loss or damage by any
other risk commonly insured against by persons occupying or using
like properties in the locality or localities in which the Real
Estate is situated.
(b) Each insurance policy (other than flood insurance)
shall (i) provide that it shall not be cancelled without 30-days'
prior written notice to Beneficiary, and (ii) with respect to all
property insurance, provide for deductibles in an amount reasonably
satisfactory to Beneficiary, contain a "Replacement Cost Endorsement"
(or attaching an agreed amount endorsement satisfactory to
Beneficiary), with loss payable to Beneficiary as its interest may
appear and subject to the provisions of the Intercreditor Agreement,
without contribution, under a "standard" or "New York" mortgagee
clause acceptable to Beneficiary. Each policy shall expressly provide
that any proceeds which are payable to Beneficiary shall be paid by
check payable to the order of Beneficiary only and requiring the
endorsement of Beneficiary. In lieu thereof, the Grantor may satisfy
the foregoing by delivering an irrevocable power of attorney to
Beneficiary authorizing Beneficiary to endorse any check payable
under such policy which is made out to Grantor.
(c) Grantor shall deliver to Beneficiary an original of
each insurance policy required to be maintained, or a certificate of
such insurance acceptable to Beneficiary, together with a copy of the
declaration page for each such policy. Grantor shall (i) pay as they
become due all premiums for such insurance and (ii) not later than 15
days prior to the expiration of each policy to be furnished pursuant
to the provisions of this Section, deliver a renewed policy or
policies, or duplicate original or originals thereof, marked "premium
paid," or accompanied by such other evidence of payment satisfactory
to Beneficiary.
(d) If Grantor is in default of its obligations to insure
or deliver any such prepaid policy or policies, then Beneficiary, at
its option and without notice, may effect such insurance from year to
year, and pay the premium or premiums therefor, and Grantor shall pay
to Beneficiary on demand such premium or premiums so paid by
Beneficiary with interest from the time of payment at the Default
Rate.
(e) Grantor promptly shall comply with and conform to (i)
all provisions of each such insurance policy, and (ii) all
requirements of the insurers applicable to Grantor or to any of the
Trust Property or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the Trust
Property. Grantor shall not use or permit the use of the Trust
Property in any manner which would permit any insurer to cancel any
insurance policy or void coverage required to be maintained by this
Deed of Trust. Grantor shall give Beneficiary 30 days' prior notice
of any non-renewal or material amendment of each insurance policy
(other than flood insurance) required under this Section 5 of this
Deed of Trust.
(f) If the Trust Property, or any part thereof, shall be
destroyed or damaged, Grantor shall give immediate notice thereof to
Beneficiary. All insurance proceeds shall be paid to Beneficiary to
be held by Beneficiary as collateral to secure the payment and
performance of the Indebtedness and the Obligations. Notwithstanding
the preceding sentence, provided that no Event of Default shall have
occurred and be continuing, Grantor shall have the right to adjust
such loss, and the insurance proceeds relating to such loss shall be
paid over promptly to Grantor; provided that if such insurance
proceeds are received, then Grantor shall either (i) apply such
proceeds promptly after any such damage to repair all such damage
regardless of whether such proceeds are sufficient to pay for the
costs of repair, or (ii) apply such proceeds in any other manner that
complies with Section 1022 of the Indenture.
(g) In the event of foreclosure of this Deed of Trust or
other transfer of title to the Trust Property, all right, title and
interest of Grantor in and to any insurance policies then in force
shall pass to the purchaser or grantee.
(h) Grantor may maintain insurance required under this Deed
of Trust by means of one or more blanket insurance policies
maintained by Grantor; provided, however, that (i) any such policy
shall specify, or Grantor shall furnish to Beneficiary a written
statement from the insurer so specifying, the maximum amount of the
total insurance afforded by such blanket policy that is allocated to
the Premises and the other Trust Property and any sublimits in such
blanket policy applicable to the Premises and the other Trust
Property, (ii) each such blanket policy shall include an endorsement
providing that, in the event of a loss resulting from an insured
peril, insurance proceeds shall be allocated to the Trust Property in
an amount equal to the coverages required to be maintained by Grantor
as provided above and (iii) the protection afforded under any such
blanket policy shall be no less than that which would have been
afforded under a separate policy or policies relating only to the
Trust Property.
(i) Notwithstanding anything to the contrary in this
section, Beneficiary agrees that the types, terms and amounts of
insurance that Grantor maintains as of the date of this Deed of Trust
satisfies the requirements of this Section 5 of this Deed of Trust.
6. Restrictions on Liens and Encumbrances. Except for the
lien of this Deed of Trust, the Permitted Exceptions and any lien
that is permitted by the terms of the Indenture, and except as
expressly permitted under the Indenture, Grantor shall not further
mortgage, nor otherwise encumber the Trust Property nor create or
suffer to exist any lien, charge or encumbrance on the Trust
Property, or any part thereof, whether superior or subordinate to the
lien created by this Deed of Trust and whether recourse or
non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as
expressly permitted under the Indenture, Grantor shall not sell,
transfer, convey or assign all or any portion of, or any interest in,
the Trust Property.
8. Maintenance; No Alteration; Inspection; Utilities. (a)
Grantor shall maintain or cause to be maintained all the Improvements
in good condition and repair (ordinary wear and tear excepted) and
shall not commit or suffer any waste of the Improvements.
Notwithstanding any other provision of this Deed of Trust, with
respect to Unimproved Lands, the harvesting of Timber and forest
management practices may be carried out in accordance with Best
Management Practices prevailing in the Commonwealth of Virginia with
respect to similarly situated land, which Best Management Practices
are more particularly set forth in the Loggers Guide published by the
Virginia Department of Forestry (December 1988), as the same may be
revised from time to time. Grantor shall repair, restore, replace or
rebuild promptly any part of the Premises which may be damaged or
destroyed by any casualty whatsoever if, as a result of which
casualty, no insurance or condemnation proceeds are received. The
Improvements shall not be demolished or materially altered, nor any
material additions built, without the prior written consent of
Beneficiary.
(b) Beneficiary and any persons authorized by Beneficiary
shall have the right upon reasonable notice and at any reasonable
time to enter and inspect the Premises and all work done, labor
performed and materials furnished in and about the Improvements and
to inspect and make copies of all books, contracts and records of
Grantor relating to the Trust Property.
(c) Grantor shall pay or cause to be paid when due all
utility charges which are incurred for gas, electricity, water or
sewer services furnished to the Premises and all other assessments or
charges of a similar nature, whether public or private, affecting the
Premises or any portion thereof, whether or not such assessments or
charges are liens thereon.
9. Condemnation/Eminent Domain. Immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation
of the Trust Property, or any portion thereof, Grantor will notify
Beneficiary of the pendency of such proceedings. Beneficiary is
hereby authorized and empowered by Grantor to settle or compromise
any claim in connection with such condemnation and to receive all
awards and proceeds thereof to be held by Beneficiary as collateral
to secure the payment and performance of the Indebtedness and the
Obligations. Notwithstanding the preceding sentence, provided no
Event of Default shall have occurred and be continuing, Grantor
shall, at its expense, diligently prosecute any proceeding relating
to such condemnation, settle or compromise any claims in connection
therewith and receive any awards or proceeds thereof, provided that
if any such awards or proceeds thereof are received, then Grantor
shall either (i) apply such proceeds promptly to repair and restore
the Trust Property to its condition prior to such condemnation
regardless of whether such award is sufficient to pay for the costs
of such repair and restoration, or (ii) apply such proceeds in any
other manner that complies with Section 1022 of the Indenture.
10. Restoration. Grantor shall use all insurance proceeds
and all condemnation proceeds and awards received by Grantor to
either (i) promptly restore the Trust Property to its condition prior
to such casualty or condemnation (giving effect to the remaining
configuration of the Premises after such condemnation), and in
compliance with all Legal Requirements, or (ii) in any other manner
which complies with the Indenture.
11. Leases. (a) Except as expressly permitted under the
Bank Credit Agreement or the Indenture, Grantor shall not (i) execute
an assignment or pledge of any Lease relating to all or any portion
of the Trust Property other than in favor of Beneficiary, or (ii)
without the prior written consent of Beneficiary, execute or permit
to exist any Lease of any of the Trust Property, provided that
Grantor may enter into leases having an aggregate term of less than
twelve months (including all extension or renewal terms) which are
primarily for agricultural or recreational hunting purposes
without the prior written consent of Beneficiary.
(b) As to any Lease consented to by
Beneficiary, Granor shall:
(i) promptly perform all of the provisions of the Lease on the
part of the lessor thereunder to be performed;
(ii) promptly enforce all of the provisions of the Lease on the
part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Grantor as lessor or of the lessee thereunder;
(iv) exercise, within 5 Business Days after a request by
Beneficiary, any right to request from the lessee a certificate with
respect to the status thereof;
(v) simultaneously deliver to Beneficiary copies of any notices
of default which Grantor may at any time forward to or receive from
the lessee;
(vi) promptly deliver to Beneficiary a fully executed
counterpart of the Lease; and
(vii) promptly deliver to Beneficiary, upon Beneficiary's
request, an assignment of the Grantor's interest under such Lease.
(c) Grantor shall deliver to Beneficiary, within 10
Business Days after a request by Beneficiary, a written statement,
certified by Grantor as being true, correct and complete, containing
the names of all lessees and other occupants of the Trust Property,
the terms of all Leases and the spaces occupied and rentals payable
thereunder, and a list of all Leases which are then in default,
including the nature and magnitude of the default; such statement
shall be accompanied by credit information with respect to the
lessees and such other information as Beneficiary may request.
(d) All Leases entered into by Grantor after the date
hereof, if any, and all rights of any lessees thereunder shall be
subject and subordinate in all respects to the lien and provisions of
this Deed of Trust unless Beneficiary shall otherwise elect in
writing.
(e) As to any Lease now in existence or subsequently
consented to by Beneficiary, except as expressly permitted under the
Credit Agreement, Grantor shall not accept a surrender or terminate,
cancel, rescind, supplement, alter, revise, modify or amend such
Lease or permit any such action to be taken nor shall Grantor accept
the payment of rent more than thirty (30) days in advance of its due
date.
12. Further Assurances. To further assure Beneficiary's and
Trustee's rights under this Deed of Trust, Grantor agrees upon demand
of Beneficiary or Trustee to do any act or execute any additional
documents (including, but not limited to, security agreements on any
personalty included or to be included in the Trust Property and a
separate assignment of each Lease in recordable form) as may be
required by Beneficiary or Trustee to confirm the lien of this Deed
of Trust and all other rights or benefits conferred on Beneficiary or
Trustee by this Deed of Trust.
13. Beneficiary's Right to Perform. If Grantor fails to
perform any of the covenants or agreements of Grantor, Beneficiary or
Trustee, without waiving or releasing Grantor from any obligation or
default under this Deed of Trust, may, at any time (but shall be
under no obligation to) pay or perform the same, and the amount or
cost thereof, with interest at the Default Rate, shall immediately be
due from Grantor to Beneficiary or Trustee (as the case may be) and
the same shall be secured by this Deed of Trust and shall be an
encumbrance on the Trust Property prior to any right, title to,
interest in or claim upon the Trust Property attaching subsequent to
the date of this Deed of Trust. No payment or advance of money by
Beneficiary or Trustee under this Section shall be deemed or
construed to cure Grantor's default or waive any right or remedy of
Beneficiary or Trustee.
14. Hazardous Material. In the event Grantor fails to
comply with the terms of Sections 5.8(a) or 5.8(b) of the Bank Credit
Agreement (whether or not the Bank Credit Agreement is still in
effect), after notice to Grantor and the expiration of the earlier of
(i) any applicable cure period, or (ii) the cure period permitted
under the applicable legal requirement, Beneficiary may declare such
failure an Event of Default or arrange to have compliance with the
terms of Sections 5.8(a) or 5.8(b), as the case may be, of the Bank
Credit Agreement (whether or not the Bank Credit Agreement is still
in effect) implemented and the cost of such implementation with
interest at the Default Rate shall immediately be due from Grantor to
Beneficiary. Beneficiary shall have the right to conduct an
environmental assessment of the Premises at Grantor's sole cost and
expense, if any Event of Default has occurred or any event has
occurred that, if it continues would constitute an Event of Default
(such Event of Default, or event, a "Default"), or at any other time
at Beneficiary's sole cost and expense, provided: (i) Beneficiary
provides Grantor with at least five business days' notice of its
intent to conduct said environmental assessment, which notice shall
include Beneficiary's proposed scope of work for the environmental
assessment; (ii) Beneficiary allows Grantor to have Grantor's
personnel and outside representatives, including attorneys or
environmental professionals, be present during any inspection of the
Trust Property that may be a part of the environmental assessment;
(iii) with respect to any environmental sampling to be performed: (A)
it is recommended and supervised by a reputable independent
environmental consultant selected by the Beneficiary, subject to the
approval of the Grantor (such approval not to be unreasonably
withheld or delayed), (B) Beneficiary provides Grantor with the
opportunity to collect split samples, and (C) at Grantor's reasonable
request, Beneficiary restores the Premises in all material respects
to its presampling condition, the cost of such restoration with
interest at the Default Rate immediately due from Grantor to the
Beneficiary if there has been a Default; and (iv) Beneficiary
provides to Grantor copies of all final reports prepared in
connection with any environmental assessment conducted hereunder.
Grantor shall cooperate with Beneficiary with respect to the conduct
of said environmental audits consistent with the terms of this
Section.
15. Events of Default. The occurrence of an Event of
Default under the Indenture shall constitute an
Event of Default hereunder.
16. Remedies. (a) Upon the occurrence of any Event of
Default, in addition to any other rights and remedies Beneficiary may
have pursuant to the Indenture or the other Collateral Documents, or
as provided by law, and without limitation, (1) if such event is an
Event of Default specified in clause (9) or (10) of Section 501 of
the Indenture with respect to Grantor, automatically the Notes (with
accrued interest thereon) and all other amounts owing under the
Indenture and the other Collateral Documents shall immediately become
due and payable, and (2) if such event is any other Event of Default,
the Beneficiary may, or upon the request of the Holders of not less
than 25 percent in aggregate principal amount of the outstanding
Notes, Beneficiary shall, by notice to Grantor declare the Notes
(with accrued interest thereon) and all other amounts owing under the
Indenture to be due and payable forthwith, whereupon the same shall
immediately become due and payable unless such declaration shall have
been rescinded by the Holders of a majority in aggregate principal
amount of the outstanding Notes. Except as expressly provided above
in this Section or in the Indenture, presentment, demand, protest and
all other notices of any kind are hereby expressly waived. In
addition, upon the occurrence and during the continuance of any Event
of Default, Beneficiary may immediately take such action, without
notice or demand (except to the extent required by applicable law),
as it deems advisable to protect and enforce its rights against
Grantor and in and to the Trust Property, including, but not limited
to, the following actions, each of which may be pursued concurrently
or otherwise, at such time and in such manner as Beneficiary may
determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Beneficiary:
(i) Beneficiary may elect to cause the Trust Property or
any part thereof to be sold as follows:
(A) Beneficiary may proceed as if all of the
Trust Property were real property in accordance with
subparagraph (C) below, or Beneficiary may elect to treat
any of the Trust Property which consists of a right in
action or which is property that can be severed from the
Real Estate without causing structural damage thereto as if
the same were personal property, and dispose of the same in
accordance with the provisions of this Deed of Trust which
relate to the exercise of remedies with respect to that
portion of the Trust Property which is personal property,
separate and apart from the sale of real property.
(B) Beneficiary may direct the Trustee to cause any such
sale or other disposition to be conducted immediately
following the expiration of any grace period, if any,
herein provided, and any advertisement required by law or
herein and the notice required by Section 55-59.1 of the
Code of Virginia (1950) (1995 Replacement Volume), as the
same may be amended from time to time (hereinafter, "CODE
OF VIRGINIA"), or Beneficiary and Trustee may delay any
such sale or other disposition for such period of time as
Trustee or Beneficiary deems to be appropriate. Should
Beneficiary desire that more than one (1) such sale or
other disposition be conducted, Beneficiary may, at its
option, cause the same to be conducted simultaneously, or
successively, on the same day, or at such different days or
times and in such order as Beneficiary and Trustee may deem
to be appropriate.
(C) Should Beneficiary elect to direct the Trustee to sell
the Trust Property or any part thereof which is real
property or which Beneficiary has elected to treat as real
property, upon such election, the Trustee shall give such
notice of default and election to sell as may then be
required by law. Thereafter, upon the expiration of such
time and the giving of the notice of sale required by
Section 55-59.1 of the Code of Virginia, and after having
advertised the sale once a week for four weeks in a
newspaper having general circulation in the jurisdiction
wherein the Real Estate lies, and without the necessity of
any demand on Grantor, Trustee, at the time and place
specified in the notice of sale, shall sell the Trust
Property or any portion thereof specified by Beneficiary,
at public auction to the highest bidder for cash in lawful
money of the United States. Trustee may, and upon request
of Beneficiary shall, from time to time, postpone the sale
by public announcement thereof at the time and place
noticed therefor. If the Trust Property consists of several
lots or parcels, Trustee may designate the order in which
such lots or parcels shall be offered for sale or sold. Any
person, including Grantor or Beneficiary, may purchase at
the sale. Upon any sale, Trustee shall execute and deliver
to the purchaser or purchasers a deed or deeds conveying
the property so sold, but without any covenant or warranty
whatsoever, express or implied, whereupon such purchaser or
purchasers shall be let into immediate possession.
(D) In the event of a sale or other disposition of the
Trust Property, or any part thereof, and the execution of a
deed or other conveyance pursuant thereto, the recitals
therein of facts, such as default, the giving of notice of
default and notice of sale, demand that such sale should be
made, postponement of sale, terms of sale, sale, purchase,
payment of purchase money and other facts affecting the
regularity or validity of such sale or disposition, shall
be conclusive proof of the truth of such facts; any such
deed or conveyance shall be conclusive against all persons
as to such facts recited therein.
(E) The acknowledgment of the receipt of the purchase
money, contained in any deed or conveyance executed as
aforesaid, shall be sufficient discharge to the grantee
thereof from all obligations to see to the proper
application of the consideration therefor as hereinafter
provided.
(ii) Beneficiary may, to the extent permitted by applicable law,
(A) institute and maintain an action of judicial foreclosure against
all or any part of the Trust Property, (B) institute and maintain an
action on the Indebtedness, or (C) take such other action at law or
in equity for the enforcement of this Deed of Trust or any of the
Loan Documents as the law may allow. Beneficiary may proceed in any
such action to final judgment and execution thereon for all sums due
hereunder, together with interest thereon at the Default Rate and all
costs of suit, including, without limitation, reasonable attorneys'
fees and disbursements. Interest at the Default Rate shall be due on
any judgment obtained by Beneficiary from the date of judgment until
actual payment is made of the full amount of the judgment.
(iii) Upon the completion of any sale or sales made by Trustee
or Beneficiary, as the case may be, under or by virtue of this
subsection (a), Trustee or any officer of any court empowered to do
so, shall execute and deliver as aforesaid, to the accepted purchaser
or purchasers a good and sufficient instrument, or good and
sufficient instruments, conveying, assigning and transferring all
estate, right, title and interest in and to the property and rights
sold. Trustee is hereby appointed irrevocably the true and lawful
attorney of Grantor in its name and stead to make all necessary
conveyances, assignments, transfers and deliveries of the Trust
Property or any part thereof and the rights so sold and for that
purpose, Trustee may execute all necessary instruments of conveyance,
assignment and transfer, Grantor hereby ratifying and confirming all
that its attorney shall lawfully do by virtue hereof. Nevertheless,
Grantor, if so requested by Trustee or Beneficiary, shall ratify and
confirm any such sale or sales by executing and delivering to Trustee
or to such purchaser or purchasers all such instruments as may be
advisable, in the judgment of Trustee or Beneficiary, for the purpose
as may be designated in such request. Any such sale or sales made
under or by virtue of this subsection (a), whether made under the
power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale or
under or by virtue of Sections 55-59 and 55-59.1 through 55-59.4 of the
Code of Virginia, shall operate to divest all of the estate, right,
title, interest, claim and demand whatsoever, whether at law or in
equity, of Grantor in and to the properties and rights so sold, and
shall be a perpetual bar, both at law and in equity against Grantor
and any and all persons claiming or who may claim the same, or any
part thereof, from, through or under Grantor.
(iv) Grantor hereby expressly waives any right which it
may have to direct the order in which any of the Trust Property
shall be sold in the event of any sale or sales pursuant
hereto.
(v) The purchase money proceeds or avails of any sale made
pursuant to Sections 55-59 and 55-59.1 through 55- 59.4 of the Code
of Virginia and under or by virtue of this subsection (a), together
with all other sums which then may be held by Trustee or Beneficiary
under this Deed of Trust, whether under the provisions of this
subsection (a), or otherwise, shall be distributed pursuant to
applicable law as set forth in Sections 55-59.4 of the Code of Virginia.
(vi) Beneficiary may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the
Trust Property or any other collateral as security for the
Indebtedness and Obligations enter into and upon the Trust Property
and each and every part thereof and exclude Grantor and its agents
and employees therefrom without liability for trespass, damage or
otherwise (Grantor hereby agreeing to surrender possession of the
Trust Property to Beneficiary upon demand at any such time) and use,
operate, manage, maintain and control the Trust Property and every
part thereof. Following such entry and taking of possession,
Beneficiary shall be entitled, without limitation, (x) to lease all
or any part or parts of the Trust Property for such periods of time
and upon such conditions as Beneficiary may, in its discretion, deem
proper, (y) to enforce, cancel or modify any Lease and (z) generally
to execute, do and perform any other act, deed, matter or thing
concerning the Trust Property as Beneficiary shall deem appropriate
as fully as Grantor might do.
(b) Beneficiary, in any action to foreclose this Deed of Trust
in a judicial procedure or in connection with the exercise of any
non-judicial power of sale by Trustee, shall be entitled to the
appointment of a receiver. In case of a trustee's sale or foreclosure
sale, the Real Estate may be sold, at Beneficiary's election, in one
parcel or in more than one parcel and Beneficiary is specifically
empowered (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the
Trust Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Deed of Trust which
is not cured after the giving of any applicable notice and the
expiration of any applicable cure period, Beneficiary or Trustee
shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and
Beneficiary and Trustee shall have the right to invoke any equitable
right or remedy as though other remedies were not provided for in
this Deed of Trust.
17. Right of Beneficiary to Credit Sale. Upon the
occurrence of any sale made under this Deed of Trust, whether
made under the power of sale or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale
or under or by virtue of Sections 55-59 and 55-59.1 through 55-59.4
of the Code of Virginia, Beneficiary may bid for and acquire
the Trust Property or any part thereof. In lieu of paying cash
therefor, Beneficiary may make settlement for the purchase
price by crediting upon the Indebtedness or other sums secured
by this Deed of Trust the net sales price after deducting
therefrom the expenses of sale and the cost of the action and
any other sums which Beneficiary is authorized to deduct under
this Deed of Trust. In such event, this Deed of Trust, the
Indenture, the Notes, the other Collateral Documents and any
documents evidencing expenditures secured hereby may be
presented to the person or persons conducting the sale in order
that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
18. Appointment of Receiver. If an Event of Default
shall have occurred and be continuing, Beneficiary as a matter
of right and without notice to Grantor, unless otherwise
required by applicable law, and without regard to the adequacy
or inadequacy of the Trust Property or any other collateral as
security for the Indebtedness and Obligations or the interest
of Grantor therein, shall have the right to apply to any court
having jurisdiction to appoint a receiver or receivers or other
manager of the Trust Property, and Grantor hereby irrevocably
consents to such appointment and waives notice of any
application therefor (except as may be required by law). Any
such receiver or receivers shall have all the usual powers and
duties of receivers in like or similar cases and all the powers
and duties of Beneficiary in case of entry as provided in this
Deed of Trust, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any
part of the Trust Property, and shall continue as such and
exercise all such powers until the date of confirmation of sale
of the Trust Property unless such receivership is sooner
terminated.
19. Extension, Release, etc. (a) Without
affecting the lien or charge of this Deed of Trust upon
any portion of the Trust Property not then or theretofore
released as security for the full amount of the
Indebtedness, Beneficiary may, from time to time and
without notice, agree to (i) release any person liable for the
Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant
other indulgences, (iv) release or reconvey, or cause to be
released or reconveyed at any time at Beneficiary's option any
parcel, portion or all of the Trust Property, (v) take or
release any other or additional security for any obligation
herein mentioned, or (vi) make compositions or other
arrangements with debtors in relation thereto. If at any time
this Deed of Trust shall secure less than all of the principal
amount of the Indebtedness, it is expressly agreed that any
repayments of the principal amount of the Indebtedness shall
not reduce the amount of the lien created by this Deed of Trust
until the lien amount shall equal the principal amount of the
Indebtedness outstanding.
(b) No recovery of any judgment by Beneficiary and no
levy of an execution under any judgment upon the Trust Property
or upon any other property of Grantor shall affect the lien
created by this Deed of Trust or any liens, rights, powers or
remedies of Beneficiary or Trustee hereunder, and such liens,
rights, powers and remedies shall continue unimpaired.
(c) If Beneficiary shall have the right to foreclose
this Deed of Trust or to direct the Trustee to exercise its
power of sale, Grantor authorizes Beneficiary at its option to
foreclose the lien of this Deed of Trust (or direct the Trustee
to sell the Trust Property, as the case may be) subject to the
rights of any tenants of the Trust Property. The failure to
make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights, or to provide notice
to such tenants as required in any statutory procedure
governing a sale of the Trust Property by Trustee, or to
terminate such tenant's rights in such sale will not be
asserted by Grantor as a defense to any proceeding instituted
by Beneficiary to collect the Indebtedness or to foreclose the
lien created by this Deed of Trust.
(d) Unless expressly provided otherwise, in the event
that Beneficiary's interest in this Deed of Trust and title to
the Trust Property or any estate therein shall become vested in
the same person or entity, this Deed of Trust shall not merge
in such title but shall continue as a valid lien on the Trust
Property for the amount secured hereby.
20. Security Agreement under Uniform Commercial Code.
(a) It is the intention of the parties hereto that this Deed of
Trust shall constitute a Security Agreement within the meaning
of the Uniform Commercial Code of the Commonwealth of Virginia
(the "CODE"). If an Event of Default shall occur and be
continuing under this Deed of Trust, then in addition to having
any other right or remedy available at law or in equity,
Beneficiary shall have the option of either (i) proceeding
under the Code and exercising such rights and remedies as may
be provided to a secured party by the Code with respect to all
or any portion of the Trust Property which is personal property
(including, without limitation, taking possession of and selling
such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property
constituting the Trust Property in accordance with
Beneficiary's rights, powers and remedies with respect to the
real property (in which event the default provisions of the
Code shall not apply). If Beneficiary shall elect to proceed
under the Code, then 10 days' notice of sale of the personal
property shall be deemed reasonable notice and the reasonable
expenses of retaking, holding, preparing for sale, selling and
the like incurred by Beneficiary shall include, but not be
limited to, reasonable attorneys' fees and legal expenses. At
Beneficiary's request, Grantor shall assemble the personal
property and make it available to Beneficiary at a place
designated by Beneficiary which is reasonably convenient to
both parties.
(b) Grantor and Beneficiary agree, to the extent
permitted by law, that: (i) all of the goods described within
the definition of the word "Equipment" and all Timber to be cut
are or are to become fixtures on the Real Estate; (ii) this
Deed of Trust upon recording or registration in the real estate
records of the proper office shall constitute a financing
statement filed as a "fixture filing" within the meaning of
Sections 8.9-313 and 8.9-402 of the Code; (iii) Grantor is the
record owner of the Real Estate; and (iv) the addresses of
Grantor and Beneficiary are as set forth on the first page of
this Deed of Trust. This Deed of Trust covers Timber to be cut
and Harvested Timber, as well as accounts resulting from the
sale thereof, and this Deed of Trust upon being recorded in the
real estate records shall operate also as a financing statement
upon such of the Trust Property as constitute or may constitute
Timber to be cut and Harvested Timber, as well as accounts
resulting from the sale thereof, in accordance with Sections
8.9-402 and 8.9-403 of the Code. Grantor has an interest of
record in the land upon which the Timber is being grown and was
grown, which land is more particularly described in Schedule A
to this Deed of Trust.
(c) Grantor, upon request by Beneficiary from time to
time, shall execute, acknowledge and deliver to Beneficiary one
or more separate security agreements, in form reasonably
satisfactory to Beneficiary, covering all or any part of the
Trust Property and will further execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered,
any financing statement, affidavit, continuation statement or
certificate or other document as Beneficiary may request in
order to perfect, preserve, maintain, continue or extend the
security interest under and the priority of this Deed of Trust
and such security instrument. Grantor further agrees to pay to
Beneficiary on demand all costs and expenses incurred by
Beneficiary in connection with the preparation, execution,
recording, filing and refiling of any such document and all
reasonable costs and expenses of any record searches for
financing statements Beneficiary shall reasonably require.
Grantor shall from time to time, on request of Beneficiary,
deliver to Beneficiary an inventory in reasonable detail of any
of the Trust Property which constitutes personal property.
If Grantor shall fail to furnish any financing or continuation
statement within 10 Business Days after request by Beneficiary,
then pursuant to the provisions of the Code, Grantor hereby
authorizes Beneficiary, without the signature of Grantor, to
execute and file any such financing and continuation
statements. The filing of any financing or continuation
statements in the records relating to personal property or
chattels shall not be construed as in any way impairing the
right of Beneficiary to proceed against any personal property
encumbered by this Deed of Trust as real property, as set forth
above.
21. Assignment of Rents. Grantor hereby assigns to
Trustee, for the benefit of Beneficiary, the Rents as further
security for the payment of the Indebtedness and performance of
the Obligations, and Grantor grants to Trustee and Beneficiary
the right to enter the Trust Property for the purpose of
collecting the same and to let the Trust Property or any part
thereof, and to apply the Rents on account of the Indebtedness.
The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in
full, but Beneficiary and Trustee hereby waive the right to
enter the Trust Property for the purpose of collecting the
Rents and Grantor shall be entitled to collect, receive, use
and retain the Rents until the occurrence and during the
continuance of an Event of Default under this Deed of Trust;
such right of Grantor to collect, receive, use and retain the
Rents may be revoked by Beneficiary upon the occurrence and
during the continuance of any Event of Default under this Deed
of Trust by giving not less than five Business Days' written
notice of such revocation to Grantor; in the event such notice
is given, Grantor shall pay over to Beneficiary, or to any
receiver appointed to collect the Rents, any lease security
deposits. Grantor shall not accept prepayments of installments
of Rent to become due for a period of more than one month in
advance (except for security deposits and estimated payments of
percentage rent, if any).
22. Trust Funds. All lease security deposits of the
Real Estate shall be treated as trust funds not to be
commingled with any other funds of Grantor. Within 10 Business
Days after request by Beneficiary, Grantor shall furnish
Beneficiary satisfactory evidence of compliance with this
subsection, together with a statement of all lease security
deposits by lessees and copies of all Leases not previously
delivered to Beneficiary, which statement shall be certified by
Grantor.
23. Additional Rights. The holder of any subordinate
lien or subordinate deed of trust on the Trust Property shall
have no right to terminate any Lease whether or not such Lease
is subordinate to this Deed of Trust nor shall any holder of
any subordinate lien or subordinate deed of trust join any
tenant under any Lease in any trustee's sale or action to
foreclose the lien or modify, interfere with, disturb or
terminate the rights of any tenant under any Lease. By
recordation of this Deed of Trust all subordinate lienholders
and the trustees and beneficiaries under subordinate deeds of
trust are subject to and notified of this provision, and any
action taken by any such lienholder or trustee or beneficiary
contrary to this provision shall be null and void. Upon the
occurrence and during the continuance of any Event of Default,
Beneficiary may, in its sole discretion and without regard to
the adequacy of its security under this Deed of Trust, apply
all or any part of any amounts on deposit with Beneficiary
under this Deed of Trust against all or any part of the
Indebtedness. Any such application shall not be construed to
cure or waive any default or Event of Default or invalidate any
act taken by Beneficiary on account of such default or Event of
Default.
24. Any notice from Beneficiary or Trustee to Grantor
hereunder shall be deemed to have been given by Beneficiary or
Grantor and received by Grantor when mailed to Grantor by
certified mail, personally delivered to Grantor, deposited with
a bonded air courier service for express delivery to Grantor or
telecopied to Grantor at the address set forth on the first
page hereof (if by telecopy to (▇▇▇) ▇▇▇-▇▇▇▇) or at such other
address or telecopier number as Grantor may designate in
writing. Any notice from Grantor to Beneficiary or Trustee
hereunder shall be deemed to have been given by Grantor and
received by Beneficiary or Trustee, as the case may be, when
received by such person at its address stated on the first page
hereof or at such other address as such person may have
designated to Grantor.
25. No Oral Modification. This Deed of Trust may not
be amended, supplemented or otherwise modified except in
accordance with the provisions of the Indenture. Any agreement
made by Grantor and Beneficiary after the date of this Deed of
Trust relating to this Deed of Trust shall be superior to the
rights of the holder of any intervening or subordinate deed of
trust, lien or encumbrance. Trustee's execution of any written
agreement between Grantor and Beneficiary shall not be required
for the effectiveness thereof as between Grantor and
Beneficiary.
26. Partial Invalidity. In the event any one or more
of the provisions contained in this Deed of Trust 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 hereof, but each shall be
construed as if such invalid, illegal or unenforceable
provision had never been included. Notwithstanding to the
contrary anything contained in this Deed of Trust or in any
provisions of the Indebtedness or Loan Documents, the
obligations of Grantor and of any other obligor under the
Indebtedness or Loan Documents shall be subject to the
limitation that Beneficiary shall not charge, take or receive,
nor shall Grantor or any other obligor be obligated to pay to
Beneficiary, any amounts constituting interest in excess of the
maximum rate permitted by law to be charged by Beneficiary.
27. Grantor's Waiver of Rights. To the
fullest extent permitted by law, Grantor waives the
benefit of all laws now existing or that may subsequently
be enacted providing for (i) any appraisement before sale of
any portion of the Trust Property, (ii) any extension of the
time for the enforcement of the collection of the Indebtedness
or the creation or extension of a period of redemption from any
sale made in collecting such debt and (iii) exemption of the
Trust Property from attachment, levy or sale under execution or
exemption from civil process. To the full extent Grantor may do
so, Grantor agrees that Grantor will not at any time insist
upon, plead, claim or take the benefit or advantage of any law
now or hereafter in force providing for any appraisement,
valuation, stay, exemption, extension or redemption, or
requiring foreclosure of this Deed of Trust before exercising
any other remedy granted hereunder and Grantor, for Grantor and
its successors and assigns, and for any and all persons ever
claiming any interest in the Trust Property, to the extent
permitted by law, hereby waives and releases all rights of
redemption, valuation, appraisement, stay of execution, notice
of election to mature or declare due the whole of the secured
indebtedness and marshalling in the event of exercise by
Trustee or Beneficiary of the power of sale or other rights
hereby created.
28. Remedies Not Exclusive. Beneficiary and Trustee
shall be entitled to enforce payment of the Indebtedness and
performance of the Obligations and to exercise all rights and
powers under this Deed of Trust or under any of the other
Collateral Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the
Indebtedness and Obligations may now or hereafter be otherwise
secured, whether by deed of trust, mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the
acceptance of this Deed of Trust nor its enforcement, shall
prejudice or in any manner affect Beneficiary's or Trustee's
right to realize upon or enforce any other security now or
hereafter held by Beneficiary or Trustee, it being agreed that
Beneficiary and Trustee shall be entitled to enforce this Deed
of Trust and any other security now or hereafter held by
Beneficiary or Trustee in such order and manner as Beneficiary
may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Trustee or Beneficiary is
intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall
be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Collateral Documents to
Beneficiary or Trustee or to which either may otherwise be
entitled, may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by
Beneficiary or Trustee, as the case may be. In no event shall
Beneficiary or Trustee, in the exercise of the remedies
provided in this Deed of Trust (including, without limitation,
in connection with the assignment of Rents, or the appointment
of a receiver and the entry of such receiver on to all or any
part of the Trust Property), be deemed a "mortgagee in
possession," and neither Beneficiary nor Trustee shall in any
way be made liable for any act, either of commission or
omission, in connection with the exercise of such remedies.
29. Multiple Security. If (a) the Premises shall
consist of one or more parcels, whether or not contiguous and
whether or not located in the same county, or (b) in addition
to this Deed of Trust, Beneficiary shall now or hereafter hold
or be the beneficiary of one or more additional mortgages,
liens, deeds of trust or other security (directly or
indirectly) for the Indebtedness upon other property in the
State in which the Premises are located (whether or not such
property is owned by Grantor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true,
then to the fullest extent permitted by law, Beneficiary may,
at its election, commence or consolidate in a single trustee's
sale or foreclosure action all trustee's sale or foreclosure
proceedings against all such collateral securing the
Indebtedness (including the Trust Property), which action may
be brought or consolidated in the courts of, or sale conducted
in, any city or county in which any of such collateral is
located. Grantor acknowledges that the right to maintain a
consolidated trustee's sale or foreclosure action is a specific
inducement to Beneficiary to extend the Indebtedness, and
Grantor expressly and irrevocably waives any objections to the
commencement or consolidation of the foreclosure proceedings in
a single action and any objections to the laying of venue or
based on the grounds of forum non conveniens which it may now
or hereafter have. Grantor further agrees that if Trustee or
Beneficiary shall be prosecuting one or more foreclosure or
other proceedings against a portion of the Trust Property or
against any collateral other than the Trust Property, which
collateral directly or indirectly secures the Indebtedness, or
if Beneficiary shall have obtained a judgment of foreclosure
and sale or similar judgment against such collateral (or, in
the case of a trustee's sale, shall have met the statutory
requirements therefor with respect to such collateral), then,
whether or not such proceedings are being maintained or
judgments were obtained in or outside the State in which the
Premises are located, Beneficiary may commence or continue any
trustee's sale or foreclosure proceedings and exercise its
other remedies granted in this Deed of Trust against all or any
part of the Trust Property and Grantor waives any objections to
the commencement or continuation of a foreclosure of this Deed
of Trust or exercise of any other remedies hereunder based on
such other proceedings or judgments, and waives any right to
seek to dismiss, stay, remove, transfer or consolidate either
any action under this Deed of Trust or such other proceedings
on such basis. The commencement or continuation of proceedings
to sell the Trust Property in a trustee's sale, to foreclose
this Deed of Trust or the exercise of any other rights
hereunder or the recovery of any judgment by Beneficiary or the
occurrence of any sale by the Trustee in any such proceedings
shall not prejudice, limit or preclude Beneficiary's right to
commence or continue one or more trustee's sales, foreclosure
or other proceedings or obtain a judgment against (or, in the
case of a trustee's sale, to meet the statutory requirements
for, any such sale of) any other collateral (either in or outside
the State in which the Real Estate is located) which directly or
indirectly secures the Indebtedness, and Grantor expressly waives
any objections to the commencement of, continuation of, or entry of
a judgment in such other sales or proceedings or exercise of
any remedies in such sales or proceedings based upon any action
or judgment connected to this Deed of Trust, and Grantor also
waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other sales or proceedings or any sale
or action under this Deed of Trust on such basis. It is
expressly understood and agreed that to the fullest extent
permitted by law, Beneficiary may, at its election, cause the
sale of all collateral which is the subject of a single
trustee's sale or foreclosure action at either a single sale or
at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of
the parties to dispose of and administer all collateral
securing the Indebtedness (directly or indirectly) in the most
economical and least time-consuming manner.
30. Successors and Assigns. All covenants of Grantor
contained in this Deed of Trust are imposed solely and
exclusively for the benefit of Beneficiary and Trustee and
their respective successors and assigns, and no other person or
entity shall have standing to require compliance with such
covenants or be deemed, under any circumstances, to be a
beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Beneficiary or Trustee at
any time if in the sole discretion of either of them such
waiver is deemed advisable. All such covenants of Grantor shall
run with the land and bind Grantor, the successors and assigns
of Grantor (and each of them) and all subsequent owners,
encumbrancers and tenants of the Trust Property, and shall
inure to the benefit of Beneficiary, Trustee and their
respective successors and assigns. Without limiting the
generality of the foregoing, any successor to Trustee appointed
by Beneficiary shall succeed to all rights of Trustee as if
such successor had been originally named as Trustee hereunder.
The word "Grantor" shall be construed as if it read "Grantors"
whenever the sense of this Deed of Trust so requires and if
there shall be more than one Grantor, the obligations of the
Grantors shall be joint and several.
31. No Waivers, etc. Any failure by Beneficiary to
insist upon the strict performance by Grantor of any of the
terms and provisions of this Deed of Trust shall not be deemed
to be a waiver of any of the terms and provisions hereof, and
Beneficiary or Trustee, notwithstanding any such failure, shall
have the right thereafter to insist upon the strict performance
by Grantor of any and all of the terms and provisions of this
Deed of Trust to be performed by Grantor. Beneficiary may
release, regardless of consideration and without the necessity
for any notice to or consent by the beneficiary of any
subordinate deed of trust or the holder of any subordinate lien
on the Trust Property, any part of the security held for the
obligations secured by this Deed of Trust without, as to the
remainder of the security, in any way impairing or affecting
this Deed of Trust or the priority of this Deed of Trust over
any subordinate lien or deed of trust.
32. Governing Law, etc. This Deed of Trust
shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia.
33. WAIVER OF TRIAL BY JURY. GRANTOR, TRUSTEE AND
BENEFICIARY EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY ACTION, CLAIM, SUIT OR PROCEEDING RELATING
TO THIS DEED OF TRUST AND FOR ANY COUNTERCLAIM BROUGHT THEREIN.
Grantor hereby waives all rights to interpose any counterclaim
in any suit brought by Beneficiary or Trustee hereunder and all
rights to have any such suit consolidated with any separate
suit, action or proceeding.
34. Incorporation by Reference. Grantor agrees that
in addition to all other remedies and rights provided for in
this Deed of Trust, this Deed of Trust shall be construed to
impose and confer upon the parties hereto, and the Beneficiary
hereunder, all duties, rights and obligations prescribed in
Section 55-59 and 55-59.1 through 55-59.4 of the Code of
Virginia, as amended and in effect as of the date of the
acknowledgement hereof, and further to incorporate herein the
following provisions, by the short-term references below, of
Sections 55-59 and 55-60 of the Code of Virginia:
(a) EXEMPTIONS WAIVED
(b) RENEWAL OR EXTENSIONS PERMITTED
(c) REINSTATEMENT PERMITTED
(d) SUBJECT TO ALL UPON DEFAULT
35. Certain Definitions. Unless the context clearly
indicates a contrary intent or unless otherwise specifically
provided herein, words used in this Deed of Trust shall be used
interchangeably in singular or plural form and the word
"Grantor" shall mean "each Grantor or any subsequent owner or
owners of the Trust Property or any part thereof or interest
therein," the word "Beneficiary" shall mean "Beneficiary or any
successor Indenture Trustee," the word "Trustee" shall mean
"Trustee and any successor trustee hereunder," the word "Notes"
shall mean "the Notes, the Indenture or any other evidence of
indebtedness secured by this Deed of Trust," the word "person"
shall include any individual, corporation, partnership, trust,
unincorporated association, government, governmental authority,
or other entity, and the words "Trust Property" shall include
any portion of the Trust Property or interest therein. Whenever
the context may require, any pronouns used herein shall include
the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural
and vice versa. The captions in this Deed of Trust are for
convenience or reference only and in no way limit or amplify
the provisions hereof.
36. Reconveyance by Trustee. Upon written request of
Beneficiary stating that all sums secured hereby have been
paid, and upon payment by Grantor of a Trustee's fees, Trustee
shall reconvey to Grantor, or the person or persons legally
entitled thereto, without warranty, any portion of the Trust
Property then held hereunder. The recitals in such reconveyance
of any matters or facts shall be conclusive proof of the
truthfulness thereof. The grantee in any reconveyance may be
described as "the person or persons legally entitled thereto."
37. To the extent that (i) this Deed of Trust
creates a lien on, or contains covenants with respect to,
Equipment (other than fixtures), or Leases, Rents or
Contracts in respect of such Equipment, and (ii) the Company
Security and Pledge Agreement creates a security interest which
is perfected, in such Equipment, Leases, Rents or Contracts,
the provisions of the Company Security and Pledge Agreement
will control with respect to such Equipment, Leases, Rents or
Contracts.
38. Intercreditor Agreement. Anything to the contrary
set forth herein notwithstanding, this Deed of Trust shall be
subject to and governed by the terms and conditions of that
certain Intercreditor Agreement, dated of even date herewith,
by and among Beneficiary, Toronto- Dominion (Texas), Inc., as
Administrative Agent under the BIPCO Credit Agreement (as such
term is defined in the Intercreditor Agreement),
Toronto-Dominion (Texas), Inc., as Administrative Agent under
the BAI Credit Agreement (as such term is defined in the
Intercreditor Agreement), Grantor and ▇▇▇▇▇-▇▇▇▇▇ Industries,
Inc.
39. First Deed of Trust. The lien and all terms and
provisions of this Deed of Trust are subordinate and subject to
the lien and all terms and provisions of the First Deed of
Trust. To the extent the Grantor's performance of any
obligations under this Deed of Trust would result in a default
or breach by Grantor under the First Deed of Trust, then
Grantor shall have no duty to perform such obligation under the
Deed of Trust to the extent such performance would constitute a
default or breach under the First Deed of Trust. This Deed of
Trust has been duly executed by Grantor on December 1, 1997 and
is intended to be effective as of December 1, 1997.
BEAR ISLAND PAPER COMPANY, L.L.C.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President of Finance
STATE OF NEW YORK )
: ss.:
CITY/COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me
this 1st day of December, 1997, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as Vice
President and Director of BEAR ISLAND PAPER COMPANY, L.L.C., a
Virginia limited liability company, on behalf of the company.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public
[Notarial Stamp]
My Commission expires: September 29, 1999
Schedule A
Description of the Premises
[Virginia]