<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) February 16, 1999
ADVANCED LIGHTING TECHNOLOGIES, INC.
- ---------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
OHIO 0-27202 34-1803229
- ---------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
32000 AURORA ROAD, SOLON, OHIO 44139
- ---------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code 440 / 519-0500
-------------------------
NOT APPLICABLE
- ---------------------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE> 2
ITEM 5. OTHER EVENTS.
In February 1999, the Company's revolving credit facility ("Credit Facility")
provided by several North American financial institutions (the "Lenders")
was amended to provide for future borrowing under an arrangement pursuant to
which the availability of borrowing is determined by the Company's eligible
accounts receivable, eligible inventories and certain other assets and amend
the financial covenants to reflect the Company's current financial condition.
Borrowings under the Credit Facility are limited to $55 million with additional
borrowings subject to the approval of all Lenders. Based on the amended terms
of the Credit Facility, the Company would have had $6.4 million in available
borrowings as of December 31, 1998. On February 12, 1999, the availability
under the Credit Facility was $1 million based on the $55 million limitation
with an additional $4.8 million availability subject to approval of all Lenders.
The Credit Facility has a term expiring April 1, 2000. The Company is actively
seeking alternative financing sources and intends to replace the existing
Credit Facility, although the Company can provide no assurance as to whether,
when and upon what terms it will obtain such financing. If the Company is
unable to obtain alternative financing and replace the Credit Facility prior to
July 1, 1999, the Company is required to pay the Lenders a substantial
additional fee.
Interest rates on loans outstanding are based on the agent bank's prime rate
plus 1% to May 31, 1999 and plus 2% thereafter. The Company is also obligated
to pay a facility fee of .375% on the amount of the facility and certain other
fees. The facility contains certain affirmative and negative covenants
customary for this type of agreement, prohibits cash dividends, and includes
financial covenants with respect to income levels, cash availability and net
worth. The principal security for the facility is substantially all of the
personal property of the Company and each of its North American and United
Kingdom subsidiaries, certain real estate and a pledge of stock of each of the
Company's principal subsidiaries.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit No. Description of Exhibits
- ----------- -----------------------
99.1 Consolidated Amendment No. 2 to Credit Agreement, dated as of
February 12, 1999, amending the Credit Agreement dated January
2, 1998, among Advanced Lighting Technologies, Inc., National
City Bank, and other financial institutions.
99.2 Fee Letter in connection with Consolidated Amendment No. 2
dated February 16, 1999 from Advanced Lighting Technologies,
Inc. to the Administrative Agent and the Lenders.
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVANCED LIGHTING TECHNOLOGIES, INC.
(Registrant)
Date: February 23, 1999 By: /s/ Wayne R. Hellman
-------------------------------
Wayne R. Hellman
Chief Executive Officer
4
<PAGE> 5
EXHIBIT INDEX
-------------
Exhibit No. Description of Exhibits
- ----------- -----------------------
99.1 Consolidated Amendment No. 2 to Credit Agreement, dated as of
February 12, 1999, amending the Credit Agreement dated January
2, 1998, among Advanced Lighting Technologies, Inc., National
City Bank, and other financial institutions.
99.2 Fee Letter in connection with Consolidated Amendment No. 2
dated February 16, 1999 from Advanced Lighting Technologies,
Inc. to the Administrative Agent and the Lenders.
5
<PAGE> 1
Exhibit 99.1
===============================================================================
ADVANCED LIGHTING TECHNOLOGIES, INC.
AS THE BORROWER
AND
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AS LENDERS
AND
NATIONAL CITY BANK
AS ADMINISTRATIVE AGENT
---------------------
CONSOLIDATED AMENDMENT NO. 2
DATED AS OF
FEBRUARY 12, 1999
TO
CREDIT AGREEMENT
DATED AS OF
JANUARY 2, 1998
---------------------
===============================================================================
<PAGE> 2
CONSOLIDATED AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS CONSOLIDATED AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of
February 12, 1999 ("THIS AMENDMENT"), among:
(i) ADVANCED LIGHTING TECHNOLOGIES, INC., an Ohio
corporation (herein, together with its successors and assigns, the
"BORROWER");
(ii) the financial institutions listed on the signature pages
hereof (the "LENDERS"); and
(iii) NATIONAL CITY BANK, a national banking association, as
Administrative Agent (the "ADMINISTRATIVE AGENT") for the Lenders under
the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders named therein, and the
Administrative Agent entered into the Credit Agreement, dated as of January 2,
1998, as amended by Amendment No. 1 thereto ("AMENDMENT NO. 1"), dated as of
February 26, 1998, Amendment No. 2 thereto ("AMENDMENT NO. 2"), dated as of May
13, 1998, Consolidated Amendment No. 1 thereto ("CONSOLIDATED AMENDMENT NO. 1"),
dated as of September 10, 1998, letter amendment ("LETTER AMENDMENT NO. 1"),
dated as of September 1, 1998, and letter amendment ("LETTER AMENDMENT NO. 2"),
dated as of December 22, 1998 (as so amended, the "CREDIT AGREEMENT"; with the
terms defined therein, or the definitions of which are incorporated therein,
being used herein as so defined).
(2) The Borrower has requested the Lenders and the Administrative
Agent to modify certain of the provisions of the Credit Agreement, and the
Lenders and the Administrative Agent are willing to so modify the provisions of
the Credit Agreement, all as more fully set forth below.
(3) This Amendment also consolidates the provisions of Amendment
No. 1, Amendment No. 2, Consolidated Amendment No. 1, Letter Amendment No. 1 and
Letter Amendment No. 2 which are of continuing effect.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. AMENDMENTS.
1.1. COMMITMENTS; MATURITY DATE. (a) For the avoidance of doubt,
the Borrower confirms that the Total Commitment has been permanently reduced
from $85,000,000 to $65,000,000, effective in October 1998, with the result that
the existing Commitments of the Lenders are as follows:
<TABLE>
<CAPTION>
NAME OF LENDER COMMITMENT
<S> <C>
National City Bank $19,100,000
NBD Bank $17,200,000
PNC Bank, National Association $17,200,000
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
NAME OF LENDER COMMITMENT
<S> <C>
National Bank of Canada, $11,500,000
a Canadian Chartered Bank,
Cleveland Representative
Office
Total $65,000,000
</TABLE>
(b) The date "December 31, 2000", which appears in the definition
of the term "MATURITY DATE" in section 1.1 of the Credit Agreement, is changed
to "April 1, 2000".
1.2. INTEREST MARGIN AND RELATED CHANGES. (a) OUTSTANDING
EUROCURRENCY LOANS DENOMINATED IN DOLLARS TO BE CONVERTED TO PRIME RATE LOANS,
ETC. Section 2.7(b) of the Credit Agreement is amended by adding language at the
end thereof, with the result that as so amended, section 2.7(b) of the Credit
Agreement reads in its entirety as follows:
(b) The unpaid principal amount of each Loan which is a
Eurocurrency Loan shall bear interest from the date of the Borrowing
thereof until maturity (whether by acceleration or otherwise) at a rate
per annum which shall at all times be the Applicable Eurocurrency
Margin (as defined below) for such Loan PLUS the relevant Eurocurrency
Rate.
Notwithstanding anything to the contrary contained in any
other provisions of this Agreement, effective on February 16, 1999, (i)
all outstanding Eurocurrency Loans denominated in Dollars shall be
automatically and retroactively converted to Prime Rate Loans as of the
date of the Borrowing thereof, but without any obligation to reimburse
any Lender under section 2.10 hereof for any breakage compensation
otherwise payable because such conversion did not occur on the last day
of an Interest Period, (ii) the Borrower shall, on and after February
16, 1999, have no right to incur any Eurocurrency Loan denominated in
Dollars, to convert any Prime Rate Loan into a Eurocurrency Loan, to
Redenominate any Eurocurrency Loan denominated in an Alternative
Currency into a Eurocurrency Loan denominated in Dollars, or to
designate an Interest Period for any Eurocurrency Loan longer than one
month, (iii) the Borrower shall have no right to incur any Loan
denominated in Dollars except as a Prime Rate Loan, and (iv) the
Borrower shall have no right to incur any Loan denominated in an
Alternative Currency except as a Eurocurrency Loan.
(b) APPLICABLE MARGINS. Section 2.7(g) of the Credit Agreement is
amended to read in its entirety as follows:
(g) As used herein, the term "APPLICABLE PRIME RATE MARGIN",
as applied to any Loan which is a Prime Rate Loan, means (i) 100 basis
points per annum at any time prior to May 31, 1999, and (ii) 200 basis
points per annum on May 31, 1999 and thereafter, and the term
"APPLICABLE EUROCURRENCY MARGIN", as applied to any Loan which is a
Eurocurrency Loan, means (i) 300 basis points per annum at any time
prior to May 31, 1999, and (ii) 400 basis points per annum on May 31,
1999 and thereafter.
(c) EFFECTIVENESS OF CHANGES. The conversions of Eurocurrency
Loans denominated in Dollars and changes in the interest margins effected by the
above provisions of this section 1.2 shall be
2
<PAGE> 4
effective from and after January 1, 1999, as to all Loans then or thereafter
outstanding, with the result that all Loans outstanding on or after January 1,
1999 which are denominated in Dollars shall be considered Prime Rate Loans, and
the change in the Applicable Prime Rate Margin and Applicable Eurocurrency
Margin effected by section 1.2(b) hereof shall be applicable to all Loans
outstanding from and after January 1, 1999. On the Effective Date of this
Amendment, the Borrower shall pay any and all interest accrued on the Loans, to
the extent not theretofore paid.
(d) LETTER OF CREDIT FEES. Section 4.1(b) of the Credit Agreement
is amended to read in its entirety as follows:
(b) The Borrower agrees to pay to the Administrative Agent,
for the account of each Non-Defaulting Lender, PRO RATA on the basis of
its Percentage, on or prior to the date of issuance of any Letter of
Credit (an increase in the amount of a Letter of Credit, or an
extension of the expiration date thereof, shall be considered an
issuance to the extent of the increase or extension), a fee in respect
of such Letter of Credit (the "LETTER OF CREDIT FEE"), computed at a
rate per annum equal to (i) 375 basis points per annum, for any period
prior to May 31, 1999, or (ii) 475 basis points per annum, for any
period on or after May 31, 1999, on the daily Stated Amount of such
Letter of Credit, for the period from and including the date of
issuance to but excluding the date of expiration date thereof (assuming
exercise of any renewal rights applicable thereto).
(e) MONTHLY PAYMENT OF INTEREST ON PRIME RATE LOANS. Section
2.7(d) of the Credit Agreement is amended to read in its entirety as follows:
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any prepayment or repayment
thereof and shall be payable (i) in respect of each Prime Rate Loan,
monthly in arrears on the last Business Day of each calendar month,
(ii) in respect of each Eurocurrency Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on the dates which are successively
three months after the commencement of such Interest Period, and (iii)
in respect of each Loan, on any prepayment or conversion (on the amount
prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(f) DEFAULT RATE. Section 2.7(c) of the Credit Agreement is
amended to change the two references therein to "2%" to "4%".
1.3. CHANGE FROM COMMITMENT FEE TO FACILITY FEE. Section 4.1(a) of
the Credit Agreement is amended to read in its entirety as follows:
(a) The Borrower agrees to pay to the Administrative Agent a
Facility Fee ("FACILITY FEE"), for the account of each Non-Defaulting
Lender, for the period from and including January 1, 1999 to, but not
including, the Maturity Date or, if later, the date upon which the
Total Commitment has been terminated and no Loans, Letters of Credit
or Unpaid Drawings are outstanding, computed at a rate per annum equal
to the Applicable Facility Fee Rate on the respective Commitment
of each such Non-Defaulting Lender, whether used or unused, and
regardless of the existence of any limitations on the availability of
such Commitments arising because of the then amount of the Borrowing
Base, the impact of any financial or other covenants or otherwise .
Such Facility Fee shall be due and payable in arrears on the last
Business Day of each June, September, December and March and on the
Maturity Date and, if later, on the date
3
<PAGE> 5
upon which the Total Commitment has been terminated and no Loans,
Letters of Credit or Unpaid Drawings are outstanding. As used herein,
the term "APPLICABLE FACILITY FEE RATE" means 37.50 basis points per
annum.
The change from the Commitment Fee to the Facility Fee effected by such
amendment shall be effective from and after January 1, 1999. On the Effective
Date of this Amendment, the Borrower will pay to the Administrative Agent, for
distribution to the Lenders, any Commitment Fee accrued and unpaid under the
Credit Agreement for the period ending December 31, 1998.
1.4. ADDITION OF BORROWING BASE PROVISIONS. (a) AMENDMENT TO
SECTION 2.1 OF THE CREDIT AGREEMENT. A new sentence is added at the end of
section 2.1 of the Credit Agreement, with the result that, as so amended,
section 2.1 of the Credit Agreement reads in its entirety as follows:
2.1. COMMITMENTS FOR LOANS. (a) Subject to and upon the terms
and conditions set forth in this Agreement, each Lender severally
agrees to make a loan or loans (each a "LOAN" and, collectively, the
"LOANS") to the Borrower, which Loans shall be drawn, in accordance
with the following provisions: (i) Loans may be made pursuant to a
Borrowing by the Borrower at any time and from time to time on and
after the Initial Borrowing Date and prior to the Maturity Date; (ii)
Loans may, except as otherwise provided, at the option of the Borrower,
be incurred and maintained as, or converted or Redenominated into,
Loans which are Prime Rate Loans or Eurocurrency Loans, denominated in
Dollars or an Alternative Currency, PROVIDED that all Loans made as
part of the same Borrowing by the Borrower shall, unless otherwise
specifically provided herein, consist of Loans of the same Type and
currency; and PROVIDED, FURTHER, that the aggregate outstanding
principal amount of Loans to the Borrower denominated in any
Alternative Currency shall not exceed $8,000,000 at any time
outstanding; (iii) Loans may be repaid or prepaid and reborrowed in
accordance with the provisions hereof; and (iv Loans shall not exceed
for any Lender at any time outstanding that aggregate principal amount
which, when added to the product at such time of (x) such Lender's
Percentage, TIMES (y) the aggregate Letter of Credit Outstandings,
equals the Commitment of such Lender at such time. In addition, no
Loans shall be incurred at any time if after giving effect thereto the
Borrower would be required to prepay Loans in accordance with section
5.2(a).
(b) Notwithstanding the foregoing or anything to the contrary
contained in this Agreement, unless each Lender, acting in its sole,
complete and unfettered discretion, otherwise consents in writing, no
Loans shall be made or Letters of Credit issued or increased in amount
if after giving effect thereto the sum of (x) the aggregate principal
amount of all Loans outstanding, and (y) the Letter of Credit
Outstandings, would exceed $55,000,000.
(c) Notwithstanding anything to the contrary contained in this
Agreement, no term or provision of this section 2.1 (or any of the
definitions of the terms used in this section 2.1) may be changed,
amended or otherwise modified, nor may performance thereof be waived,
EXCEPT pursuant to a written instrument signed by the Borrower and all
of the Lenders.
(b) AMENDMENT TO SECTION 3.1(b) OF THE CREDIT AGREEMENT.
References to the Borrowing Base are added to section 3.1(b) of the Credit
Agreement, with the result that, as so amended, section 3.1(b) of the Credit
Agreement reads in its entirety as follows:
4
<PAGE> 6
(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of
Credit Outstandings at such time, would exceed either (x) $15,000,000
or (y) when added to the aggregate principal amount of all Loans then
outstanding, an amount equal to lesser of (x) the Total Commitment then
in effect, or (y) the Borrowing Base then in effect; (ii) no Letter of
Credit shall be issued for any of the purposes specified in clause (i)
or (ii) of section 3.1(a) if after giving effect thereto the Letter of
Credit Outstandings at such time in respect of all Letters of Credit
issued for the purposes specified in clauses (i) of section 3.1(a)
would exceed $5,000,000; (iii) no Letter of Credit shall be issued in
support of Indebtedness of any Foreign Subsidiary of the Borrower if
after giving effect thereto the Letter of Credit Outstandings at such
time in respect of all Letters of Credit issued to support any
Indebtedness of the Foreign Subsidiaries of the Borrower would exceed
$10,500,000; and (iv) each Letter of Credit shall have an expiry date
(including any renewal periods) occurring not later than the earlier of
(A) one year from the date of issuance thereof, unless a longer period
is approved by the relevant Letter of Credit Issuer and Lenders (other
than any Defaulting Lender) holding a majority of the Total Commitment,
and (B) 15 Business Days prior to the Maturity Date, in each case on
terms acceptable to the Administrative Agent and the relevant Letter of
Credit Issuer.
(c) AMENDMENT TO SECTION 5.2(a) OF THE CREDIT AGREEMENT.
References to the Borrowing Base are added to section 5.2(a) of the Credit
Agreement, with the result that, as so amended, section 5.2(a) of the Credit
Agreement reads in its entirety as follows:
(A) IF OUTSTANDING LOANS AND LETTER OF CREDIT OUTSTANDINGS
EXCEED TOTAL COMMITMENT OR BORROWING BASE. If on any date (after giving
effect to any other payments on such date) the sum of (i) the aggregate
outstanding principal amount of Loans PLUS (ii) the aggregate amount of
Letter of Credit Outstandings, exceeds the lesser of (x) the Total
Commitment as then in effect, or (y) the Borrowing Base as then in
effect, the Borrower shall prepay on such date that principal amount of
Loans and, after Loans have been paid in full, Unpaid Drawings, in an
aggregate amount, conforming to the requirements of section 5.1 as to
the amount of any partial prepayments provided for therein, at least
equal to such excess. If, after giving effect to the prepayment of
Loans and Unpaid Drawings, the aggregate amount of Letter of Credit
Outstandings exceeds the lesser of (x) the Total Commitment as then in
effect, or (y) the Borrowing Base as then in effect, the Borrower shall
pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to such excess and the Administrative Agent shall
hold such payment as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in
form and substance reasonably satisfactory to the Administrative Agent
and the Borrower (which shall permit certain investments in Cash
Equivalents satisfactory to the Administrative Agent and the Borrower
until the proceeds are applied to the secured obligations).
(d) AMENDMENT TO SECTION 5.2(b) OF THE CREDIT AGREEMENT.
Section 5.2(b) of the Credit Agreement is amended by changing the dollar amount
specified therein from "$1,000,000" to "$100,000", and by adding the following
at the end thereof:
With reference to the promissory note in the principal amount
of $9,000,000 of Wayne Hellman (the "PLEDGED NOTE") pledged by the
Borrower under the Pledge Agreement, all payments of principal and
interest on the Pledged Note received by the Collateral Agent shall
immediately be applied to the prepayment of the principal of the Loans
and accrued interest on the amount of the prepayment of the Loans.
5
<PAGE> 7
(e) BORROWING BASE CERTIFICATES. Section 8.1 of the Credit
Agreement is amended by adding a new section 8.1(l) thereto, reading as follows:
(l) BORROWING BASE CERTIFICATES. As soon as practicable and in
any event within 20 days after the end of each calendar month, (i) a
written report, reasonably satisfactory in form and scope to the
Administrative Agent, as to the equipment, inventory and accounts
receivable of the Borrower and its Subsidiaries, setting forth the
type, amount, value, location and aging (in the case of receivables) of
the Borrower's and such Subsidiaries' equipment, inventory and accounts
receivable as of the end of such month, (ii) a borrowing base
certificate as to such equipment, inventory and accounts receivable in
a form reasonably satisfactory in scope and form to the Administrative
Agent relating to the calendar month just ended (any such monthly
certificate, or any weekly certificate as to receivables as referred to
below, a "BORROWING BASE CERTIFICATE"), (iii) such other financial
information related to the foregoing as the Administrative Agent may
reasonably request, and (iv) monthly consolidated financial statements
and/or reports (including "flash reports"), in the form customarily
prepared by the Borrower for review by its chief financial or
accounting officers, or if required by the Administrative Agent or any
Lender, in such more detailed form or method of presentation as may
reasonably be delivered within such time period. In addition to the
foregoing, commencing with the first full week in March 1999, the
Borrower will also deliver Borrowing Base Certificates on a weekly
basis as to receivables (including detailed information as to the
calculation of the amount of contras which are ineligible), containing
the appropriate information as of the most recent week, with such
Borrowing Base Certificates to be delivered within two working days
following the end of the week covered thereby.
(f) ADDITIONAL DEFINED TERMS. The following additional defined
terms are added to section 1.1 of the Credit Agreement in appropriate alphabetic
order:
"ADDITIONAL RATABLE SECURITY COLLATERAL DOCUMENTS" shall mean
all mortgages, deeds of trust, security agreements, and similar
instruments which may from time to time be granted by the Borrower or
any of its Domestic Subsidiaries in favor of the Collateral Agent (or a
trustee appointed by it) as equal and ratable security for (i) the
Obligations, (ii) the Designated Hedge Agreements, and (iii) the
Borrower's $100,000,000 aggregate original principal amount of 8%
Senior Notes due 2008 and all other obligations under the Indenture
relating to such Senior Notes.
"BORROWING BASE" shall mean as of any date an amount equal to
the sum of
(i) 80% of Eligible Receivables,
(ii) 50% of Eligible Inventory,
(iii) $20,000,000, representing the agreed
collateral value of machinery, equipment and furnishings
subject to the security interest created under the Security
Agreement, and
(iv) an amount, not in excess of $10,500,000
(which amount shall be automatically be reduced by $600,000 on
the last day of each calendar month, commencing with the last
day of September 1999), representing the agreed collateral
value of the property subject to the Ruud First Mortgage,
6
<PAGE> 8
each as determined from time to time by the Administrative Agent and
notified to the Borrower and the Lenders on the basis of the
information shown in the most recent monthly and weekly Borrowing Base
Certificates delivered to the Administrative Agent pursuant hereto,
PROVIDED that if a Borrowing Base Certificate has not been timely
delivered to the Administrative Agent as required by section 8.1(l)
with respect to the preceding calendar month or week, the
Administrative Agent may, in its sole discretion, upon notice to the
Borrower and the Lenders, reduce any of the above percentages until the
Business Day following the date such Borrowing Base Certificate is
actually delivered to the Administrative Agent.
"BORROWING BASE CERTIFICATE" shall have the meaning specified
in section 8.1(l).
"CONSOLIDATED NET WORTH" shall mean at any time for the
determination thereof all amounts which, in conformity with GAAP, would
be included under the caption "total stockholders' equity" (or like
caption) on a consolidated balance sheet of the Borrower as at such
date; PROVIDED, that in no event shall Consolidated Net Worth reflect
any amount representing the write-up or upward valuation of assets made
at any time after December 31, 1998.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary organized
under the laws of the United States of America, any State thereof, the
District of Columbia, or any United States possession, the chief
executive office and principal place of business of which is located
in, and which conducts the majority of its business within, the United
States of America and its territories and possessions.
"ELIGIBLE INVENTORY" shall mean the lesser of the fair market
value, or the gross book value, less any applicable reserves for
shrinkage, obsolescence or slow-moving goods (determined in accordance
with GAAP), of the raw materials and finished goods inventory owned by
the Borrower or any of its Wholly-Owned Subsidiaries which is a North
American Subsidiary (specifically excluding work in process inventory),
valued on a first-in-first-out basis, PROVIDED that no inventory shall
be considered Eligible Inventory, UNLESS it is:
(1) in the case of the Borrower or a Domestic
Subsidiary, subject to a first priority perfected security
interest in favor of the Collateral Agent created pursuant to
any of the Security Documents;
(2) in the case of any other North American
Subsidiary, subject to a first priority perfected security
interest securing Indebtedness of such other North American
Subsidiary (and any other North American Subsidiaries) which
is supported by a Letter of Credit issued under this
Agreement;
(3) in good and saleable condition (as
determined in accordance with GAAP and any applicable legal
requirements;
(4) in the case of the Borrower or a Domestic
Subsidiary and if the Collateral Agent so requires, located on
real property owned by the Borrower or any such Domestic
Subsidiary in which the Collateral Agent holds a mortgage
Lien, or located on property leased by the Borrower or any of
such Domestic Subsidiaries as to which the Collateral Agent
has obtained a landlord waiver satisfactory to the Collateral
Agent;
7
<PAGE> 9
(5) in the case of any other North American
Subsidiary and if the Collateral Agent so requires, located on
real property owned by such North American Subsidiary which is
subject to a mortgage lien securing Indebtedness of such North
American Subsidiary (and any other North American Subsidiary)
supported by a Letter of Credit issued hereunder, or located
on property leased by such North American Subsidiary as to
which the holder of such Indebtedness (or a trustee or agent
therefor) has obtained a landlord waiver satisfactory to the
Collateral Agent; and
(6) not subject to any claim which a supplier or
other creditor of the Borrower or any Subsidiary has asserted
which might have priority over (A) in the case of the Borrower
or any Domestic Subsidiary, the security interests of the
Collateral Agent granted pursuant to any of the Security
Documents, or (B) in the case of any other North American
Subsidiary, the security interests securing the Indebtedness
of such North American Subsidiary (and any other North
American Subsidiary) supported by a Letter of Credit issued
under this Agreement.
"ELIGIBLE RECEIVABLES" shall mean the gross outstanding
balance, LESS all financial charges, late fees and other fees which are
unearned, and LESS reserves for doubtful accounts determined in
accordance with GAAP, of trade accounts receivable arising out of
sales, in the ordinary course of business, of finished goods, PROVIDED
that no account will be treated as an Eligible Receivable if:
(1) in the case of the Borrower or a Domestic
Subsidiary, it is not subject to a first priority perfected
security interest in favor of the Collateral Agent created
pursuant to any of the Security Documents;
(2) in the case of any other North American, it is
not subject to a first priority perfected security interest
securing Indebtedness of such other North American Subsidiary
(and any other North American Subsidiaries) which is supported
by a Letter of Credit issued under this Agreement;
(3) the account debtor has disputed liability or made
any claim with respect to any other account due from such
account debtor to the Borrower or any of its Subsidiaries, to
the extent of the amount of the claim or the amount in
dispute;
(4) 10% or more in dollar amount of the Eligible
Receivables due from the account debtor have become, or been
determined by the Collateral Agent to be, ineligible;
(5) the accounts of such account debtor and its
Affiliates represent more than 10% of the Eligible
Receivables, to the extent of such excess;
(6) it has remained unpaid for a period exceeding 90
days after the date of the invoice therefor, or the date the
related goods are shipped or delivered, if earlier;
(7) the account debtor has filed a petition for
relief under the Bankruptcy Code (or similar action under any
successor law), made a general assignment for the benefit of
creditors, had filed against it any petition or other
application for relief under the Bankruptcy Code (or similar
action under any successor law), failed, suspended business
8
<PAGE> 10
operations, become insolvent, called a meeting of its
creditors for the purpose of obtaining any financial
concession or accommodation, or had or suffered a receiver or
a trustee to be appointed for all or a significant portion of
its assets or affairs;
(8) the account debtor is a supplier or creditor of
the Borrower or any of its Subsidiaries, to the extent of the
amounts owed to such supplier or creditor;
(9) in the case of the Borrower and its Domestic
Subsidiaries, the account is denominated in other than United
States Dollars, payable outside the United States or payable
by an account debtor located outside the United States, UNLESS
such account is (x) fully backed by an irrevocable letter of
credit on terms, and issued by a financial institution,
acceptable to the Collateral Agent, and such irrevocable
letter of credit has been assigned to and is in the possession
of the Collateral Agent, or (y) fully backed by an export
receivables insurance policy providing coverage on terms, and
issued by an insurance carrier, acceptable to the Collateral
Agent, and such policy has been assigned to and is in the
possession of the Collateral Agent;
(10) in the case of any other North American
Subsidiary, the account is denominated in other than United
States Dollars or Canadian dollars, payable outside Canada or
the United States or payable by an account debtor located
outside Canada or the United States, UNLESS such account is
fully backed by an irrevocable letter of credit on terms, and
issued by a financial institution, acceptable to the
Collateral Agent, and such irrevocable letter of credit has
been assigned to and is in the possession of the holder of the
Indebtedness (or an agent or trustee therefor) of such North
American Subsidiary which is supported by a Letter of Credit
issued hereunder;
(11) the account debtor is an Affiliate of the
Borrower or any of its Subsidiaries;
(12) the Collateral Agent believes, in its reasonable
business judgment that collection of such account is insecure;
(13) it is subject to any material claim by the
account debtor;
(14) it is subject to any set-off by the account
debtor which is asserted or which pursuant to any applicable
contract could be asserted, to the extent of the set-off;
(15) the Borrower or any of its North American
Subsidiaries, in order to be entitled to collect the account,
is required to perform any additional substantial service for,
or perform or incur any additional obligation to, the account
debtor; or
(16) in the case of the Borrower or any Domestic
Subsidiary, the account is an account of the United States
Government, the government of any state of the United States
or any political subdivision thereof, or any agency or
instrumentality of any of the foregoing, UNLESS (i) the
Collateral Agent has perfected a first priority security
interest in such account; and (ii) compliance with the
Assignment of Claims Act of 1940, as amended, or other similar
applicable laws or regulations, has been achieved (EXCEPT that
the Collateral Agent in its discretion may waive such required
compliance with such Act
9
<PAGE> 11
or other regulations if the aggregate amount of accounts as
to which such compliance is waived does not exceed
$2,000,000).
"NORTH AMERICAN SUBSIDIARY" shall mean (i) any Domestic
Subsidiary; and (ii) any Subsidiary of the Borrower organized under the
laws of Canada (or one of its Provinces) substantially all of whose
accounts receivable, inventory and equipment are subject to a first
priority perfected security interest or other Lien securing
Indebtedness supported by a Letter of Credit issued under this
Agreement. The existence of an approximately $200,000 mortgage in favor
of Royal Bank of Canada shall not be considered to disqualify
Ballastronix or any of its Affiliates from status as a North American
Subsidiary under this definition.
"RUUD FIRST MORTGAGE" shall mean the First Mortgage,
Assignment of Leases and Security Agreement, dated as of February 1,
1999, from Ruud Lighting, Inc. to the Collateral Agent.
1.5. ACQUISITIONS. The following sentence is added at the end of
section 9.2 of the Credit Agreement: "Notwithstanding anything to the contrary
contained above in this section 9.2, commencing November 1, 1998, the Borrower
will not directly or indirectly effect any Acquisition."
1.6. LIENS. Section 9.3 of the Credit Agreement is amended to read
in its entirety as follows:
9.3. LIENS. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon or with respect to any property or assets of any kind (real
or personal, tangible or intangible) of the Borrower or any such
Subsidiary whether now owned or hereafter acquired, or sell any such
property or assets subject to an understanding or agreement, contingent
or otherwise, to repurchase such property or assets (including sales of
accounts receivable or notes with or without recourse to the Borrower
or any of its Subsidiaries, other than for purposes of collection in
the ordinary course of business) or assign any right to receive income,
or file or permit the filing of any financing statement under the UCC
or any other similar notice of Lien under any similar recording or
notice statute, EXCEPT that the foregoing restrictions shall not apply
to:
(a) Liens for taxes not yet delinquent or Liens for
taxes being contested in good faith and by appropriate
proceedings for which adequate reserves (in the good faith
judgment of the management of the Borrower) have been
established;
(b) Liens in respect of property or assets imposed by
law which were incurred in the ordinary course of business,
such as carriers', warehousemen's, materialmen's and
mechanics' Liens and other similar Liens arising in the
ordinary course of business, which do not in the aggregate
materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the
business of the Borrower or any Subsidiary;
(c) Liens created by this Agreement or the other
Credit Documents (including, without limitation, the Ruud
First Mortgage and the Additional Ratable Security Collateral
Documents);
(d) Liens (i) in existence on the Initial Borrowing
Date which are listed, and the Indebtedness secured thereby
and the property subject thereto on the Initial Borrowing
10
<PAGE> 12
Date described, in Annex IV, (ii) consisting of cash
collateral for letters of credit issued by other financial
institutions which are outstanding on the Initial Borrowing
Date in an aggregate undrawn amount not in excess of
$1,000,000, PROVIDED such letters of credit are replaced or
supported within 60 days following the Initial Borrowing Date
with Letters of Credit issued hereunder and such cash
collateral is released in connection with such replacement or
support, or (iii) arising out of the refinancing, extension,
renewal or refunding of any Indebtedness referred to in the
preceding clause (i) which is secured by any such Liens,
PROVIDED that the principal amount of such Indebtedness is
not increased and such Indebtedness is not secured by any
additional assets, and PROVIDED, FURTHER, that the
Indebtedness referred to in section 6.1(k) may only be
refinanced by Loans made, Letters of Credit issued and
collateral granted pursuant to the Credit Documents;
(e) Liens arising from judgments, decrees or
attachments in circumstances not constituting an Event of
Default under section 10.1(f);
(f) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment
insurance and other types of social security; and mechanic's
Liens, carrier's Liens, and other Liens to secure the
performance of tenders, statutory obligations, contract bids,
government contracts, performance and return-of-money bonds
and other similar obligations, incurred in the ordinary course
of business (exclusive of obligations in respect of the
payment for borrowed money), whether pursuant to statutory
requirements, common law or consensual arrangements;
(g) Leases or subleases granted to others not
interfering in any material respect with the business of the
Borrower or any of its Subsidiaries and any interest or title
of a lessor under any lease not in violation of this
Agreement;
(h) easements, rights-of-way, zoning or deed
restrictions, minor defects or irregularities in title and
other similar charges or encumbrances not interfering in any
material respect with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries considered as an
entirety;
(i) Liens arising from financing statements
regarding property subject to leases not in violation of the
requirements of this Agreement, PROVIDED that such Liens are
only in respect of the property subject to, and secure only,
the respective lease (and any other lease with the same or an
affiliated lessor);
(j) Liens which
(i) are placed upon equipment or machinery
used in the ordinary course of business of the
Borrower or any Subsidiary at the time of (or within
180 days after) the acquisition thereof by the
Borrower or any such Subsidiary to secure
Indebtedness incurred to pay or finance all or a
portion of the purchase price thereof, PROVIDED that
the Lien encumbering the equipment or machinery so
acquired does not encumber any other asset of the
Borrower or any such Subsidiary; or
11
<PAGE> 13
(ii) are existing on property or other
assets at the time acquired by the Borrower or any
Subsidiary or on assets of a person at the time such
person first becomes a Subsidiary of the Borrower;
PROVIDED that (A) any such Liens were not created at
the time of or in contemplation of the acquisition of
such assets or person by the Borrower or any of its
Subsidiaries; (B) in the case of any such acquisition
of a person, any such Lien attaches only to the
property and assets of such person; and (C) in the
case of any such acquisition of property or assets by
the Borrower or any Subsidiary, any such Lien
attaches only to the property and assets so acquired
and not to any other property or assets of the
Borrower or any Subsidiary;
PROVIDED that (1) the Indebtedness secured by any such Lien
does not exceed 100% of the fair market value of the property
and assets to which such Lien attaches, determined at the time
of the acquisition of such property or asset or the time at
which such person becomes a Subsidiary of the Borrower (except
in the circumstances described in clause (ii) above to the
extent such Liens constituted customary purchase money Liens
at the time of incurrence and were entered into in the
ordinary course of business), and (2) the Indebtedness secured
thereby is permitted by section 9.4(c); and
(k) Liens on any property of any Subsidiary
organized under the laws of Canada, or any Province thereof,
substantially all of whose property (exclusive of any
consigned inventory) is located in Canada, securing
Indebtedness permitted by section 9.4(b).
If any specifically identifiable Collateral is subjected to a Lien
contemplated by clause (i), (j) or (k) of this section 9.3, the
Administrative Agent and the Collateral Agent shall be authorized to
release such specifically identifiable Collateral from the Lien of any
Security Document and to take any related actions deemed appropriate by
them in connection therewith.
Notwithstanding anything to the contrary contained above in
this section 9.3, commencing November 1, 1998, the Borrower will not,
and will not permit any of its Subsidiaries to, create any mortgage
Lien on any Real Property or interests therein securing Indebtedness
then or thereafter outstanding, OTHER than (x) any such Liens in favor
of the Collateral Agent securing the Obligations, and (y) any such
Liens in favor of the Collateral Agent securing the Obligations (and
any other obligations on a PARI PASSU basis which may be acceptable to
the Required Lenders).
1.7. INDEBTEDNESS. Section 9.4 of the Credit Agreement is amended
to read in its entirety as follows:
9.4. INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, contract, create, incur, assume or
suffer to exist any Indebtedness of the Borrower or any of its
Subsidiaries, EXCEPT:
(a) Indebtedness incurred under this Agreement and
the other Credit Documents;
(b) Indebtedness of Subsidiaries of the Borrower
organized under the laws of Canada, or any Province thereof,
substantially all of whose property (exclusive of any
12
<PAGE> 14
consigned inventory) is located in Canada, not in excess of
$10,000,000 (or the equivalent amount thereof in any other
applicable currency) at any time outstanding, and any guaranty
by the Borrower or any Subsidiary of any such Indebtedness,
PROVIDED that if any such Indebtedness is supported by a
Letter of Credit, such Indebtedness so supported is secured by
substantially all of the otherwise unencumbered property of
the Subsidiary which has incurred such Indebtedness;
(c) Indebtedness of the Borrower or any Subsidiary in
respect of Capital Leases or secured by purchase money and
similar Liens permitted by section 9.3(j), including
guarantees by the Borrower of any such indebtedness of its
Subsidiaries; PROVIDED that (i) the aggregate Capitalized
Lease Obligations of the Borrower and its Subsidiaries, plus
the aggregate outstanding principal amount of Indebtedness
secured by purchase money and similar Liens permitted by
section 9.3(j), shall not exceed $2,000,000 in the aggregate
at any time outstanding, and (ii) at the time of any
incurrence thereof after the date hereof, and after giving
effect thereto, no Event of Default shall have occurred and be
continuing or would result therefrom;
(d) Indebtedness of Foreign Subsidiaries of the
Borrower, and Indebtedness of branches of the Borrower that
are incorporated under the laws of a country other than the
United States, not otherwise permitted by the foregoing
clauses, PROVIDED that (i) the aggregate principal amount of
such Indebtedness outstanding at any time is not in excess of
$1,000,000 (or the equivalent in any applicable currency or
currencies), and (ii) at the time of incurrence thereof, and
after giving effect thereto, no Event of Default shall have
occurred and be continuing or would result therefrom;
(e) Existing Indebtedness, to the extent not
otherwise permitted pursuant to the foregoing clauses; and any
refinancing, extension, renewal or refunding of any such
Existing Indebtedness not involving an increase in the
principal amount thereof or a reduction of more than 10% in
the remaining weighted average life to maturity thereof
(computed in accordance with standard financial practice);
(f) Indebtedness of the Borrower or any Subsidiary
under Hedge Agreements;
(g) Indebtedness of the Borrower to any of its
Subsidiaries, and Indebtedness of any of the Borrower's
Subsidiaries to the Borrower or to another Subsidiary of the
Borrower, in each case to the extent permitted under section
9.5; and
(h) Guaranty Obligations permitted under section 9.5.
1.8. INVESTMENTS, ETC. Section 9.5 of the Credit Agreement is
amended to read in its entirety as follows:
9.5. ADVANCES, INVESTMENTS, LOANS AND GUARANTY
OBLIGATIONS. The Borrower will not, and will not permit any of its
Subsidiaries to, (1) lend money or credit or make advances to any
person, (2) purchase or acquire any stock, obligations or securities
of, or any other interest in, or make any capital contribution to, or
other investment in, any person, (3) create, acquire or hold any
Subsidiary, (4) be or become a party to any joint venture or
partnership, or (5) be or
13
<PAGE> 15
become obligated under any Guaranty Obligations (other than those
created in favor of the Lenders pursuant to the Credit Documents),
EXCEPT:
(a) the Borrower or any of its Subsidiaries may
invest in cash and Cash Equivalents;
(b) any endorsement of a check or other medium of
payment for deposit or collection, or any similar transaction
in the normal course of business;
(c) the Borrower and its Subsidiaries may acquire and
hold receivables owing to them in the ordinary course of
business and payable or dischargeable in accordance with
customary trade terms;
(d) investments acquired by the Borrower or any of
its Subsidiaries (i) in exchange for any other investment held
by the Borrower or any such Subsidiary in connection with or
as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other investment, or
(ii) as a result of a foreclosure by the Borrower or any of
its Subsidiaries with respect to any secured investment or
other transfer of title with respect to any secured investment
in default;
(e) loans and advances to employees for
business-related travel expenses, moving expenses, costs of
replacement homes and other similar expenses, in each case
incurred in the ordinary course of business, shall be
permitted;
(f) investments in the capital of any Wholly-Owned
Subsidiary which is (i) a Subsidiary Guarantor, and (ii) not a
Foreign Subsidiary;
(g) to the extent not permitted by the foregoing
clauses, existing investments in any Subsidiaries (and any
increases thereof attributable to increases in retained
earnings);
(h) to the extent not permitted by the foregoing
clauses, the existing loans, advances, investments and
guarantees described on Annex V hereto;
(i) any unsecured guaranty by the Borrower of any
Indebtedness of a Subsidiary permitted by section 9.4, and any
guaranty by any Subsidiary described in section 9.4;
(j) investments of the Borrower and its Subsidiaries
in Hedge Agreements;
(k) loans and advances by any Subsidiary of the
Borrower to the Borrower, PROVIDED that the Indebtedness
represented thereby constitutes Subordinated Indebtedness;
(l) loans and advances by the Borrower or by any
Subsidiary of the Borrower to, or other investments in, any
Subsidiary of the Borrower which is (i) a Subsidiary
Guarantor, (ii) a Wholly-Owned Subsidiary, and (iii) not a
Foreign Subsidiary;
14
<PAGE> 16
(m) loans and advances by any Subsidiary of the
Borrower which is not a Subsidiary Guarantor to, or other
investments by any such Subsidiary in, any other Subsidiary of
the Borrower which is a Wholly-Owned Subsidiary;
(n) loans, advances and investments by the Borrower
or any Subsidiary in or to any Foreign Subsidiary made after
September 30, 1997, PROVIDED that (i) at the time of making
any such loan, advance or investment no Event of Default shall
have occurred or would result therefrom, and (ii) taking into
account any repayment of any such loans or advances or return
of such investments, the aggregate amount so expended does not
exceed $10,000,000;
(o) Guaranty Obligations, not otherwise permitted by
the foregoing clauses, of (i) the Borrower or any Subsidiary
in respect of leases of the Borrower or any Subsidiary the
entry into which is not prohibited by this Agreement, (ii) the
Borrower or any Subsidiary in respect of any other person
(other than in respect of (x) Indebtedness for borrowed money
or represented by bonds, notes, debentures or similar
securities, or (y) Indebtedness constituting Capital Leases)
arising as a matter of applicable law because the Borrower or
such Subsidiary is or is deemed to be a general partner of
such other person, or (iii) the Borrower or any Subsidiary in
respect of any other person (other than in respect of (x)
Indebtedness for borrowed money or represented by bonds,
notes, debentures or similar securities, or (y) Indebtedness
constituting Capital Leases) arising in the ordinary course of
business;
(p) any other loans, advances and investments
(whether in the form of cash or contribution of property, and
if in the form of a contribution of property, such property
shall be valued for purposes of this clause (p) at the fair
value thereof as reasonably determined by the Borrower) and
Guaranty Obligations, including, without limitation, in or to
or for the benefit of Subsidiaries, joint ventures or other
persons, not otherwise permitted by the foregoing clauses,
which are (A) made after November 1, 1998, up to an aggregate
of $1,000,000, (B) made in joint venture or similar
arrangements with Rohm & Haas or any of its Affiliates up to
an aggregate of $2,000,000 to the extent made after
January 1, 1998, or (C) constitute Guarantees covering up
to $1,000,000 aggregate principal amount of Indebtedness
outstanding at any time; and
(q) a loan in the amount of $9,000,000 made to Wayne
Hellman in October 1998, with a maturity of not more than one
year.
1.9. TOTAL LIABILITIES/CONSOLIDATED NET WORTH RATIO, ETC. Section 9.7
of the Credit Agreement is amended, effective as of December 31, 1998, to read
in its entirety as follows:
9.7. TOTAL LIABILITIES/CONSOLIDATED NET WORTH RATIO;
MINIMUM AMOUNT OF AVAILABILITY AND CASH ON DEPOSIT WITH THE COLLATERAL
AGENT. The Borrower will not, at and as of the end of any fiscal
quarter, permit the ratio of (i) the amount of Total Liabilities at
such time to (ii) its Consolidated Net Worth as of the end of such
fiscal quarter, to exceed the ratio for such fiscal quarter specified
below:
15
<PAGE> 17
<TABLE>
<CAPTION>
==================================================================
FISCAL QUARTER ENDED
ON OR NEAREST TO RATIO
=================================================================
<S> <C>
3/31/99 1.70 to 1.00
- -------------------------------------- ---------------------------
6/30/99 1.67 to 1.00
- -------------------------------------- ---------------------------
9/30/99 1.66 to 1.00
- -------------------------------------- ---------------------------
Each fiscal quarter thereafter 1.47 to 1.00
==================================================================
</TABLE>
In addition, the Borrower will not at any time permit the sum of (i)
its cash on deposit with the Collateral Agent, plus (ii) the amount
which the Borrower would then be entitled to incur as additional Loans
hereunder, taking into account the then amount of the Borrowing Base
and other restrictions and limitations contained in this Agreement, to
be less than $10,000,000, at any time on or prior to March 12, 1999, or
less than $5,000,000 at any time thereafter.
1.10. MINIMUM EBITDA. Section 9.8 of the Credit Agreement is
amended, effective as of December 31, 1998, to read in its entirety as follows:
9.8. MINIMUM EBITDA. The Borrower will not at any time
permit its EBITDA for its most recently ended fiscal quarter to be less
than the amount shown below for such fiscal quarter:
<TABLE>
<CAPTION>
=======================================================================
FISCAL QUARTER ENDED
ON OR NEAREST TO MINIMUM EBITDA
=======================================================================
<S> <C>
3/31/99 $4,546,000
- --------------------------------------- -------------------------------
6/30/99 $5,419,000
- --------------------------------------- -------------------------------
9/30/99 $7,672,000
- --------------------------------------- -------------------------------
12/31/99 $10,133,000
- --------------------------------------- -------------------------------
</TABLE>
<TABLE>
<CAPTION>
=======================================================================
FISCAL QUARTER ENDED
ON OR NEAREST TO MINIMUM EBITDA
=======================================================================
<S> <C>
3/31/2000 $10,574,000
- --------------------------------------- -------------------------------
Any Fiscal Quarter thereafter $12,214,000
- --------------------------------------- -------------------------------
</TABLE>
1.11. CAPITAL EXPENDITURES. Section 9.9 of the Credit Agreement is
amended, effective as of December 31, 1998, to read in its entirety as follows:
9.9. CAPITAL EXPENDITURES. The Borrower will not, and will not
permit any of its Subsidiaries to, make or incur Consolidated Capital
Expenditures during any fiscal period of the Borrower described below
which exceed the aggregate amount set forth for such fiscal period:
16
<PAGE> 18
<TABLE>
<CAPTION>
=====================================================================
FISCAL PERIOD AMOUNT
=====================================================================
<S> <C>
Fiscal Quarter ended 3/31/98 [SIC] $6,500,000
- --------------------------------------- -----------------------------
Fiscal Quarter ended 6/30/98 [SIC] $6,500,000
- --------------------------------------- -----------------------------
Fiscal Year ended 6/30/99 $21,500,000
- --------------------------------------- -----------------------------
Fiscal Year ended 6/30/2000 $11,000,000
- --------------------------------------- -----------------------------
Any Fiscal Year thereafter $10,000,000
=====================================================================
</TABLE>
1.12. MINIMUM CONSOLIDATED NET WORTH. Section 9.11 of the Credit
Agreement is amended, effective as of December 31, 1998, to read in its entirety
as follows:
9.11. MINIMUM CONSOLIDATED NET WORTH. The Borrower will not
permit its Consolidated Net Worth at any time to be less than the
amount shown below for the applicable date:
<TABLE>
<CAPTION>
=====================================================================
FISCAL QUARTER ENDED AMOUNT
ON OR NEAREST TO
=====================================================================
<S> <C>
3/31/99 $121,669,000
- ------------------------------------- ---------------------------------
6/30/99 $121,693,000
- ------------------------------------- ---------------------------------
9/30/99 $121,326,000
- ------------------------------------- ---------------------------------
12/31/99 $135,134,000
- ------------------------------------- ---------------------------------
Any Fiscal Quarter thereafter $140,506,000
- ------------------------------------- ---------------------------------
</TABLE>
1.13. SALE AND LEASE-BACK TRANSACTIONS. Section 9.15 of the Credit
Agreement is amended to read in its entirety as follows:
9.15. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. The
Borrower will not, nor will it permit any Subsidiary to, enter into any
Sale and Lease-Back Transaction, regardless of the amount involved.
1.14. DEFINITION OF EBITDA. The definition of the term EBITDA
contained in section 1.1 of the Credit Agreement is amended to read in its
entirety as follows:
"EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, plus
(ii) to the extent deducted in determining such Consolidated
Net Income, the sum of the following: (A) Total Interest
Expense,, (B) provisions for taxes based on income, (C)
depreciation and amortization, LESS (B) gains on sales of
assets (excluding sales in the ordinary course of business)
and extraordinary gains,
17
<PAGE> 19
all as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP; PROVIDED that,
notwithstanding anything to the contrary contained herein,
the Borrower's EBITDA for any period shall (x) include the
appropriate financial items for any person or business unit
which has been acquired by the Borrower on a going concern
basis, for any portion of such period prior to the date of
acquisition, and (y) exclude the appropriate financial items
for any person or business unit which has been disposed of by
the Borrower, for the portion of such period prior to the
date of disposition.
1.15. ADDITIONAL SECURITY, ETC. Without limitation of the covenants
contained in section 8.11 of the Credit Agreement, the Borrower will
(a) RUUD SECOND MORTGAGE: within 10 days following the
Effective Date of this Amendment, cause Ruud Lighting, Inc. to execute,
acknowledge and deliver to the Collateral Agent a second mortgage,
assignment of leases and security agreement, substantially in the form
attached to this Amendment as Exhibit B;
(b) OTHER MORTGAGES AND DEEDS OF TRUST EQUALLY AND
RATABLY SECURING THE BORROWER'S 8% SENIOR NOTES DUE 2008: commencing
immediately upon the Effective Date of this Amendment and continuing
thereafter for a period of at least 60 days, (i) use all reasonable
efforts to obtain any consents or waivers which may be required to be
obtained from the holders of existing mortgages on the properties
described below in order to permit a second mortgage to be placed
thereon, and (ii) if and to the extent that any such consent or waiver
is so obtained, execute, acknowledge and deliver, or cause an
appropriate Subsidiary to execute, acknowledge and deliver, to the
Collateral Agent a second priority mortgage, deed of trust or similar
instrument, substantially in the form attached to this Amendment as
Exhibit B, covering the appropriate property, equally and ratably
securing the Obligations, any Designated Hedge Agreements, the
Borrower's $100,000,000 aggregate original principal amount of 8%
Senior Notes due 2008 and any other obligations under the Indenture
relating to such Senior Notes, covering each of the following
properties:
(1) 330,000 square feet ADLT facility located at
Solon, Ohio, including any unimproved acreage associated
therewith;
(2) 30,000 square feet APL Engineered Materials
facility located at Urbana, Illinois, including any unimproved
acreage associated therewith;
(3) Building 1 (7830 square feet), Building 2
(4,212 square feet), Building 3 (5,093 square feet), and
Building 4 (6,446 square feet), comprising the Deposition
Sciences facilities located at Santa Rosa, California,
including any unimproved acreage associated therewith; and
(4) 39,400 square feet Kramer Lighting facility
located at Middletown, Rhode Island, including any unimproved
acreage associated therewith;
(c) ENVIRONMENTAL ASSESSMENTS, TITLE POLICIES, SURVEYS,
ETC.: within 90 days following the Effective Date of this Amendment,
deliver to the Lenders and the Collateral Agent (i) a Phase I
environmental assessment covering each property referred to in the
foregoing clauses (a) and (b), satisfactory in form and substance to
the Collateral Agent; (ii) a title insurance policy
18
<PAGE> 20
or policies issued in favor of the Collateral Agent, insuring the Lien
of the Ruud First Mortgage and each other mortgage or deed of trust
referred to in the preceding clauses (a) and (b), satisfactory in form
and substance to the Collateral Agent and containing such endorsements
and affirmative insurance as the Collateral Agent may reasonably
request; (iii) an opinion of local counsel, addressed to the
Collateral Agent, satisfactory in form and substance to the Collateral
Agent, as to the validity and enforceability of the Ruud First
Mortgage and each other mortgage or deed of trust referred to in the
preceding clauses (a) and (b), and covering such other legal matters
incident thereto as may reasonably be requested by the Collateral
Agent; and (iv) an American Land Title Association form survey
covering each property subject to the Ruud First Mortgage or any of
the other mortgages or deeds of trust referred to in the foregoing
clauses (a) and (b), dated no more than 30 days before the Effective
Date, certified to the Collateral Agent and the issuer of the title
insurance policy in a manner satisfactory to the Collateral Agent by a
land surveyor duly registered and licensed in the state in which the
property described in such survey is located and acceptable to the
Collateral Agent, showing all buildings and other improvements, any
off-site improvements, the location of any easements, parking spaces,
rights of way, building set back lines and other dimensional
regulations and the absence of encroachments, either by such
improvements or on such property, and other defects, other than
encroachments and other defects acceptable to the Collateral Agent;
(d) APPRAISALS: within 90 days following the Effective
Date of this Amendment, deliver to the Lenders and the Administrative
Agent appraisals, satisfactory in form and substance to the
Administrative Agent and each Lender, dated not more than 60 days prior
to the Effective Date of this Amendment and addressed to the
Administrative Agent and the Lenders or accompanied by separate letter
indicating that the Administrative Agent and the Lenders may rely
thereon, from one or more nationally recognized appraisal firms,
satisfactory to the Administrative Agent, covering (i) all Real
Properties subjected or to be subjected to the Liens of any of the
Security Documents, and (ii) all other tangible property, plant and
equipment and fixed assets owned by the Borrower and its Subsidiaries
that has been or is to be subjected to the Lien of any of the Security
Documents and is located at each plant owned or leased by the Borrower
and its Subsidiaries in the United States of America, which appraisals
shall set forth (A) the "fair market value" of such property (i.e., the
amount at which such property would equitably exchange between a
willing buyer and a willing seller, neither being under a compulsion
and both having reasonable knowledge of all relevant facts on the
premise that such property will continue in its present use as part of
an ongoing business enterprise), (B) the "orderly disposal value" of
such property (i.e., the amount which may be realized through a forced
sale disposal of such property when a reasonable time to find a buyer
is allowed), and (C) the "forced liquidation value" of such property
(i.e., the amount which may be realized through an immediate forced
sale disposal of such property), in each case as determined in
accordance with sound appraisal standards;
(e) LOCKBOX ARRANGEMENTS:
(i) on or before February 26, 1999, establish
deposit accounts with, and enter into lockbox agreements with,
the Collateral Agent, and cause each of its Domestic
Subsidiaries to do likewise, all of which arrangements shall
be satisfactory in form and substance to the Collateral Agent;
19
<PAGE> 21
(ii) on or before March 31, 1999, cause all funds to
be paid to the Borrower and its Domestic Subsidiaries by
customers, account debtors and others to be paid to said
lockboxes and deposited in said accounts with the Collateral
Agent;
(iii) no later than March 31, 1999, cease using
deposit accounts and any lockbox arrangements with any
financial institution other than the Collateral Agent, and
cause each of its Domestic Subsidiaries to do likewise, it
being understood that the Borrower and its Domestic
Subsidiaries may continue using controlled disbursement
accounts with other financial institutions as and to the
extent permitted by the Collateral Agent, acting in its
reasonable discretion;
(iv) such lockbox agreements with the Collateral
Agent shall provide, among other things, that once the
Borrower and its Domestic Subsidiaries shall have so
established such lockbox agreements and deposit accounts with
the Collateral Agent, and funds shall be received by the
Collateral Agent as contemplated thereby, (A) if no Default
under section 10.1(a) or Event of Default shall have occurred
and be continuing, the Collateral Agent will immediately
release such funds so received by it to or as directed by the
Borrower, or (B) if a Default under section 10.1(a) or Event
of Default shall have occurred and be continuing, the
Collateral Agent shall have sole and complete dominion over
all funds so received and shall, on a daily or similar
frequent basis, promptly apply such funds to the Loans and
other obligations secured by the Security Agreement, and after
all Loans and other obligations secured by the Security
Agreement have been satisfied and the Total Commitment has
been terminated, release any surplus remaining to the Borrower
or to whomsoever shall be lawfully entitled thereto;
(f) ESTABLISHMENT OF SPECIAL DEPOSIT ACCOUNT WITH
COLLATERAL AGENT: within five Business Days following the Effective
Date of this Amendment, the Borrower will convert to cash the entire
cash and money market fund balances currently held by the Borrower in
its accounts with Prudential Securities and other investment firms, the
current value of which accounts has been disclosed to the Lenders, and
transfer such resulting cash balances, by wire transfer of immediately
available funds, to a special deposit account established with the
Collateral Agent from which the Borrower may make such payments as it
may elect, PROVIDED that the Collateral Agent reserves the right, at
any time, to require the Borrower to, and the Borrower agrees that it
will, if the Collateral Agent so exercises such right, pledge such
special deposit account and all proceeds thereof to the Collateral
Agent, and grant the Collateral Agent sole dominion and control
thereof, as collateral for the equal and ratable security of (i) the
Obligations, (ii) the Designated Hedge Agreements, and (iii) the
Borrower's $100,000,000 aggregate original principal amount of 8%
Senior Notes due 2008 and all other obligations under the Indenture
relating to such Senior Notes;
(g) U. K. SUBSIDIARIES: the Borrower will, within 45 days
following written request from the Administrative Agent (which shall
give such request upon instructions from the Required Lenders), cause
Venture Lighting International, Ltd. and Parry Power Systems Limited,
its United Kingdom Subsidiaries, to join in the Subsidiary Guaranty and
the Security Agreement, and/or execute and deliver such additional
documents, as may be necessary to guarantee, and create security
interests and liens on all their assets as security for, the
Obligations (and equally and ratably guaranteeing and securing the
Borrower's 8% Senior Notes due 2008, if required by the terms of the
Indenture relating to such Senior Notes), all such documents to be in
form and substance to the Administrative Agent, PROVIDED that if to do
so would subject the Borrower to
20
<PAGE> 22
liability for additional United States income taxes by virtue of
section 956 of the Code in an amount the Borrower considers material,
and the Borrower shall have delivered to the Administrative Agent such
documentation, including computations prepared by the Borrower's
internal tax officer, its independent accountants or its tax counsel,
acceptable to the Required Lenders, demonstrating that the Borrower
would be subject to additional United States income taxes in an amount
considered material by the Borrower, THEN the Required Lenders will
give appropriate consideration to relieving the Borrower of its
obligations under this clause (g);
(h) FIRST MONTHLY BORROWING BASE CERTIFICATE: on or
before February 26, 1999, deliver a Borrowing Base Certificate with
respect to the month of January 1999; and
(i) LIEN SEARCHES, ETC.: promptly and in any event within
45 days following the Effective Date of this Amendment, cause its
counsel to deliver to the Lenders and the Administrative Agent complete
UCC, judgment and lien (including tax liens) searches, including copies
of all pertinent filings, in all jurisdictions in the United States in
which the Borrower or any of its Domestic Subsidiaries maintains an
office or owns or leases property, together a chart summarizing in
reasonable detail all such filings, including the name of the secured
party, the filing office, filing number and filing date, and the
collateral covered.
Section 8.11 of the Credit Agreement shall be considered amended to include the
above requirements and covenants.
1.16. FIELD AUDIT AND COLLATERAL MONITORING EXPENSES. Section 4.1(e)
of the Credit Agreement is amended by adding the following at the end thereof:
The Borrower will pay to the Collateral Agent such fees as the
Collateral Agent may from time to time invoice at its standard rates
for field audit and other examinations and reviews conducted from time
to time which are related to the Borrowing Base, the components
thereof, and other aspects of the Borrower's assets, liabilities and
operations, and the Borrower will also reimburse the Collateral Agent
for all out-of-pocket costs and expenses incurred by the Collateral
Agent in connection therewith, including, without limitation, fees,
costs and expenses of independent auditors, appraisers, equipment
brokers, and other professionals employed by the Collateral Agent
in connection therewith. Such invoices shall be paid promptly and in
any event within 20 days after the date of submission to the Borrower.
1.17. INCORPORATION OF PRIOR AMENDMENTS. (a) AMENDMENT NO. 1. For
the convenience of the parties to the Credit Agreement and the avoidance of
doubt, the parties confirm that pursuant to Amendment No. 1:
(i) the Lenders consented to the incurrence by the Borrower
of additional Indebtedness consisting of up to $100,000,000 aggregate
principal amount of its Senior Notes due 2008 offered and sold as
contemplated by the Company's offering memorandum relating thereto, as
furnished by the Company to the Lenders prior to the execution and
delivery of Amendment No. 1 by any Lender; and
(ii) in order to give full effect to the foregoing consent,
Annex III to the Credit Agreement was amended by adding thereto a
reference to such aggregate principal amount of the Company's Senior
Notes due 2008.
21
<PAGE> 23
The parties also confirm that the pricing changes provided in Amendment No. 1
have, as provided in this Amendment, been superseded by the pricing changes
effected pursuant to this Amendment.
(b) AMENDMENT NO. 2. For the convenience of the parties to the
Credit Agreement and the avoidance of doubt, the parties confirm that Amendment
No. 2 shall be of no further force or effect.
(c) LETTER AMENDMENT NO. 1. The requirement contained in section
8.1(d) of the Credit Agreement for the delivery of monthly financial statements
is eliminated and shall be of no force or effect, retroactive to the effective
date of the Credit Agreement.
(d) CONSOLIDATED AMENDMENT NO. 1. Consolidated Amendment No. 1 is
completely superceded by this Amendment.
(e) LETTER AMENDMENT NO. 2. Letter Amendment No. 2 is completely
superceded by this Amendment.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants as follows:
2.1. AUTHORIZATION, VALIDITY AND BINDING EFFECT. This Amendment has
been duly authorized by all necessary corporate action on the part of the
Borrower, has been duly executed and delivered by a duly authorized officer or
officers of the Borrower, and constitutes the valid and binding agreement of the
Borrower, enforceable against the Borrower in accordance with its terms.
2.2. REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The
representations and warranties of the Borrower contained in the Credit
Agreement, as amended hereby, are true and correct on and as of the date hereof
as though made on and as of the date hereof, EXCEPT to the extent that such
representations and warranties expressly relate to a specified date, in which
case such representations and warranties are hereby reaffirmed as true and
correct when made. Without limitation of the foregoing, (i) the execution,
delivery and performance by the Borrower and the other Credit Parties of the
Credit Agreement, as amended by this Amendment, as well as the other Credit
Documents, including, without limitation, the Ruud First Mortgage and the other
mortgages, deeds of trust and similar instruments referred to in section 1.15
of this Amendment, will not contravene any of the terms or provisions of the
Indenture relating to the Borrower's 8% Senior Notes due 2008, or result (with
or without the passage of time or notice or both) in any Event of Default under
such Indenture, as presently in effect; and (ii) the Borrower is in compliance
with all of the terms and provisions of such Indenture, as presently in effect,
and no Event of Default is in existence thereunder.
2.3. NO EVENT OF DEFAULT, ETC. No condition or event has occurred or
exists which constitutes or which, after notice or lapse of time or both, would
constitute an Event of Default.
2.4. COMPLIANCE. The Borrower is in full compliance with all covenants
and agreements contained in the Credit Agreement, as amended hereby.
2.5. RECENT FINANCIAL STATEMENTS. The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of the
unaudited condensed consolidated balance sheets
22
<PAGE> 24
of the Borrower and its consolidated subsidiaries as of December 31, 1998, and
the related unaudited condensed consolidated statements of income and of cash
flows of the Borrower and its consolidated subsidiaries for the fiscal period
then ended. All such financial statements have been prepared in accordance with
GAAP, consistently applied (except as stated therein), and fairly present the
financial position of the Borrower and its consolidated subsidiaries as of the
respective dates indicated and the consolidated results of their operations and
cash flows for the respective periods indicated, subject to normal audit
adjustments, none of which will involve a Material Adverse Effect.
SECTION 3. EFFECTIVENESS.
This Amendment shall become effective on and as of the date (the
"EFFECTIVE DATE"), on or before February 16, 1999, on which the following
conditions are satisfied:
(a) this Amendment shall have been executed by the Borrower
and the Administrative Agent, and counterparts hereof as so executed
shall have been delivered to the Administrative Agent;
(b) the Acknowledgment and Consent appended hereto shall
have been executed by the Credit Parties named therein, and
counterparts hereof as so executed shall have been delivered to the
Administrative Agent;
(c) the Administrative Agent shall have been notified by
all of the Lenders that such Lenders have executed this Amendment
(which notification may be by facsimile or other written confirmation
of such execution);
(d) the Borrower shall have delivered the promissory note
of Wayne Hellman in the original principal amount of $9,000,000 to the
Collateral Agent, duly assigned and pledged under the Pledge Agreement;
(e) the Borrower shall have paid to the Administrative
Agent, in immediately available funds, for the PRO RATA account of and
for immediate distribution to the Lenders, all interest on the Loans
and all Facility Fees, in each as accrued through the Effective Date
and after giving effect to this Amendment, to the extent not
theretofore paid;
(f) the Borrower shall have paid to the Administrative
Agent, in immediately available funds, for the PRO RATA account of and
for immediate distribution to the Lenders in accordance with their
Commitments, a nonrefundable amendment fee as consideration for the
execution and delivery of this Amendment, in the aggregate amount
specified in the fee letter entered into contemporaneously herewith as
being payable on the Effective Date; and
(g) Ruud Lighting, Inc. shall have duly executed and
delivered to the Collateral Agent, and there shall be in full force and
effect, the Ruud First Mortgage, substantially in the form attached
hereto as Exhibit A; such Mortgage and any related UCC financing
statements shall have been submitted to a title company for recording
and filing, the Borrower shall have made arrangements satisfactory to
the Collateral Agent for the payment of all fees and taxes in
connection with such recordings and filings, and the Collateral Agent
shall have received such certifications as it may require as to the
location of the property subject thereto in any Flood Hazard Zone.
23
<PAGE> 25
The Administrative Agent shall notify the Borrower and each Lender in writing
of the effectiveness hereof.
SECTION 4. RATIFICATIONS.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
SECTION 5. CERTAIN ADDITIONAL PROVISIONS;
RELEASE OF ANY CLAIMS BY BORROWER
AND OTHER CREDIT PARTIES.
5.1. CONFIRMATION OF CERTAIN OUTSTANDING AMOUNTS. The Borrower, the
Administrative Agent and the Lenders hereby acknowledge and agree that:
(a) as of February 11, 1999, $45,200,000 aggregate
principal amount of Loans denominated in Dollars and ,1,500,000
aggregate principal amount of Loans denominated in Pounds Sterling were
outstanding under the Credit Agreement, and the Letter of Credit
Outstandings consisted of $848,000 denominated in Dollars and
$10,000,000 denominated in Canadian Dollars;
(b) after giving effect to this Amendment and the change in
the interest rate or rates applicable to the Loans and the conversion
of all Eurocurrency Loans denominated in Dollars to Prime Rate Loans as
of January 1, 1999, as of on February 11, 1999, there was $391,585.12
accrued and unpaid interest on the Loans denominated in Dollars and
(pound) 11,743.13 accrued and unpaid interest on the Loans denominated
in Pounds Sterling (which were the only Loans denominated in an
Alternative Currency); and
(c) after giving effect to this Amendment and the change
from a Commitment Fee to a Facility Fee, as of February 11, 1999, there
was $27,931.08 accrued and unpaid Facility Fees and Commitment Fees on
such date.
5.2. CIRCUMSTANCES OF AMENDMENT; NO DURESS, ETC. The Borrower and
each other Credit Party each hereby represents and warrants to, and stipulates,
covenants and agrees with, the Administrative Agent and the Lenders that: (i) no
representations, warranties, statements, promises or inducements, oral or
written, have been made by the Administrative Agent, any Lender, or any of their
respective officers, directors, employees, agents, representatives, consultants,
advisors, counsel or Affiliates, to any Credit Party (or any of its officers,
directors, employees, agents, representatives, consultants, advisors, counsel or
Affiliates) concerning the existence or absence of any Default or Event of
Default under the Credit Agreement, as amended by this Amendment, or the
likelihood that the Borrower will be able to remain in compliance with the
financial and other covenants contained in the Credit Agreement, as amended by
this Amendment, for any period of time or under any particular set of
circumstances, forseen or unforseen, or concerning any future willingness or
unwillingness of the Lenders to hereafter grant any waivers under the Credit
Agreement or to hereafter enter into any further or subsequent amendments,
supplements or other modifications thereof or of any of the other Credit
Documents or any agreements or instruments referred
24
<PAGE> 26
to therein; (ii) the Borrower and the other Credit Parties are aware that,
under the present circumstances, it would be prudent for them to approach other
sources of financing, with the objective of arranging alternative financing to
expeditiously replace and permanently retire the Indebtedness incurred under
the Credit Agreement; (iii) this Amendment, the other Credit Documents, and all
of the other agreements, instruments, certificates and documents to which any
Credit Party is a party or which have been delivered on its behalf in
connection herewith, have been executed and delivered voluntarily after due
deliberation by officers of the Borrower and the other Credit Parties,
consultations by the Borrower and the other Credit Parties with Cowden,
Humphrey & Sarlson, counsel for the Borrower and the other Credit Parties, and
negotiations between the Borrower and the other Credit Parties, on the one
hand, and the Administrative Agent and the Lenders on the other hand; (iv)
neither the Administrative Agent, nor any Lender, nor any of their respective
officers, directors, employees, agents, representatives, consultants, advisors,
counsel or Affiliates, has exerted or attempted to exert any improper or
unlawful pressure, or has in any way induced or attempted to induce, through
coercion, threats, unreasonable demands or requirements, or other improper or
unlawful means, any particular or general conduct or course of action on the
part of the Borrower or any of the other Credit Parties (including the
execution and delivery of this Amendment and the other agreements, instruments,
certificates and documents contemplated hereby) , which the Borrower and the
other Credit Parties had not freely and independently determined to be prudent,
proper and appropriate under the circumstances; and (v) without limitation of
the foregoing, the Borrower and each of the other Credit Parties has, to the
extent deemed necessary or advisable in its or their sole discretion, been
advised and assisted by its or their counsel, Cowden, Humphrey & Sarlson, in
connection with the negotiation of this Amendment and the consideration of any
and all legal matters related hereto or to the other Credit Documents or the
transactions and circumstances related thereto.
5.3. RELEASE. In order to induce the Lenders to enter into this
Amendment, effective as of the Effective Date of this Amendment, the Borrower
and each of the other Credit Parties each hereby agrees to release, and does
hereby release and discharge, and further agrees not to make any claim for, or
assert in any proceeding, by way of claim or counterclaim, or by way of defense
or set-off or otherwise, any and all claims, damages, losses, expenses,
liabilities, obligations, defenses, objections, actions and causes of action,
that any Credit Party may now or as of such Effective Date have, whether known
or unknown, of every nature and to all extent whatsoever, whether based on
negligence, fraud, misrepresentation, undue or improper influence, or
interference in business operations, opportunities or other contracts, or tort,
strict liability, contract or other conduct or action or failure to act,
against the Administrative Agent, any Lender, or any of their respective
officers, directors, employees, agents, representatives, consultants, advisors,
counsel or Affiliates, on account of or in any way, directly or indirectly,
touching, concerning, arising out of or founded upon or related to, the Credit
Documents or the transactions contemplated thereby, or the lending or other
banking relationships related thereto, or any actions or failure to act in
connection therewith; PROVIDED that the foregoing release will not extend to
any claim arising after the Effective Date of this Amendment to the extent that
such claim is based on conduct of the Administrative Agent or any Lender
occurring after such date. The Credit Parties acknowledge and agree that they
understand that the Administrative Agent and the Lenders would not have entered
into this Amendment but for, among other things, the provisions of this section
5.3. The Borrower and each of the other Credit Parties hereby confirms that it
has agreed to the provisions of this section 5.3 freely and of its own
volition, with full knowledge of the effect and extent of the various releases,
waivers and agreements herein contained and of the importance to the
Administrative Agent and the Lenders thereof, and after having had an
opportunity to discuss this matter with its own counsel, freely selected by it.
25
<PAGE> 27
SECTION 6. MISCELLANEOUS.
6.1. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the Borrower, each Lender and the Administrative Agent
and their respective permitted successors and assigns.
6.2. AMENDMENTS, WAIVERS. No term or provision included in this
Amendment (including specifically, but without limitation, this section 6.2 and
the amendments to the Credit Agreement effected by this Amendment), nor any term
or provision of the Credit Agreement or any of the other Credit Documents, as
from time to time in effect, nor any term or provision of any of the other
agreements or instruments related to any of the foregoing, may be changed,
amended or otherwise modified, nor may performance thereof be waived, EXCEPT
pursuant to a written instrument signed by the Borrower and all of the Lenders.
6.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and no investigation by the Administrative Agent or any
Lender or any subsequent Loan or issuance of a Letter of Credit shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.
6.4. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and
all other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
6.5. EXPENSES. Without limiting any terms or provisions of the Credit
Agreement, the Borrower agrees to pay on demand all costs and expenses incurred
by the Administrative Agent and the Lenders (including, without limitation,
allocated internal costs of any internal counsel for the Administrative Agent or
any Lender and out-of-pocket costs and expenses of any special counsel for the
Administrative Agent or any individual Lender; and costs and expenses of
appraisers, consultants, surveyors, independent accountants, financial advisors,
and lien and title searches and policies of title insurance), in connection with
(i) the preparation, negotiation, and execution of this Amendment and any
subsequent proposed amendments to, or waivers of, the Credit Agreement, (ii) the
enforcement or preservation of any rights under the Credit Agreement and/or the
other Credit Documents, as the same may from time to time be in effect, (iii)
any analysis of the financial condition of the Borrower and its Subsidiaries,
their properties, assets, operations, and/or the collateral position of the
Lenders, and/or (iv) the administration of the Credit Agreement and the other
Credit Documents, as the same may from time to time be in effect.
6.6. SEVERABILITY. Any term or provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
6.7. APPLICABLE LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of Ohio.
6.8. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
26
<PAGE> 28
6.9. ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.
6.10. FURTHER ASSURANCES. Without limitation of any of the obligations
of the Borrower or any of its Subsidiaries under this Amendment or any of the
Credit Documents, the Borrower will, and will cause each of its Subsidiaries to,
at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Administrative Agent, the Collateral Agent and/or the Lenders,
from time to time, all such agreements, mortgages, deeds of trust, trust deeds,
security agreements, pledge agreements, collateral assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
and other assurances or instruments, and take such further lawful steps and
actions, as the Administrative Agent may consider reasonably necessary or
appropriate in order to give full effect to the intent and provisions of this
Amendment and the other Credit Documents.
6.11. JURY TRIAL WAIVER, LIMITATIONS OF LIABILITY, ETC. For the
avoidance of doubt, the parties confirm that the provisions of section 13.8(c),
section 13.17, 13.18, 13.19 and 13.20 of the Credit Agreement apply to this
Amendment and the transactions contemplated hereby as fully as if such
provisions had been set forth in full in this Amendment.
6.12. COUNTERPARTS. This Amendment may be executed by the parties
hereto separately in one or more counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
27
<PAGE> 29
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
ADVANCED LIGHTING TECHNOLOGIES, INC.
By: /s/ Nicholas R. Sucic
----------------------------------------
Chief Financial Officer & Treasurer
NATIONAL CITY BANK,
individually and as Administrative Agent
By: /s/
----------------------------------------
Vice President
NBD BANK
By: /s/
----------------------------------------
Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/
----------------------------------------
Vice President
NATIONAL BANK OF CANADA,
a Canadian Chartered Bank,
Cleveland Representative Office
By: /s/
----------------------------------------
Assistant Vice President
28
<PAGE> 30
ACKNOWLEDGMENT AND CONSENT
For the avoidance of doubt, and without limitation of the intent and
effect of sections 6 and 10 of the Subsidiary Guaranty (as such term is defined
in the Credit Agreement referred to in the Consolidated Amendment No. 2 to
Credit Agreement (the "AMENDMENT"), to which this Acknowledgment and Consent is
appended), each of the undersigned hereby unconditionally and irrevocably (i)
acknowledges receipt of a copy of the Credit Agreement and the Amendment, (ii)
consents to all of the terms and provisions of the Credit Agreement as amended
by the Amendment, and (iii) makes all of the representations, warranties,
agreements and covenants of Credit Parties other than the Borrower which are
contained in section 5.2 and 5.3 of the Amendment.
Capitalized terms which are used herein without definition shall have
the respective meanings ascribed thereto in the Credit Agreement referred to
herein. This Acknowledgment and Consent is for the benefit of the Lenders and
the Administrative Agent, any other person who is a third party beneficiary of
the Subsidiary Guaranty, and their respective successors and assigns. No term or
provision of this Acknowledgment and Consent may be modified or otherwise
changed without the prior written consent of the Administrative Agent, given as
provided in the Credit Agreement. This Acknowledgment and Consent shall be
binding upon the successors and assigns of each of the undersigned. This
Acknowledgment and Consent may be executed by any of the undersigned in separate
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has duly executed and
delivered this Acknowledgment and Consent as of the date of the Amendment
referred to herein.
<TABLE>
<S> <C>
APL ENGINEERED MATERIALS, INC. LIGHTING RESOURCES INTERNATIONAL, INC.
VENTURE LIGHTING INTERNATIONAL, INC. BALLASTRONIX (DELAWARE), INC.
SPECIALTY DISCHARGE LIGHTING, INC. ADVANCED LIGHTING SYSTEMS, INC.
METAL HALIDE TECHNOLOGIES, INC.
THE LIGHT SOURCE, INC.
ENERGY-WISE LIGHTING, INC. By: /s/ Louis S. Fisi
HID DIRECT, INC. -------------------------------
BRIGHT IDEAS ADVERTISING AND DESIGN, INC. Louis S. Fisi, Secretary,
METAL HALIDE CONTROLS, INC. on behalf of each of the above corporations
a/k/a Current Industries, Inc.
HID RECYCLING, INC.
MICROSUN TECHNOLOGIES, INC.
ENERGY EFFICIENT PRODUCTS, INC. RUUD LIGHTING, INC.
BIO LIGHT, INC.
ADLT SERVICES, INC.
ADVANCED ACQUISITIONS, INC. By: /s/ Alan J. Ruud
--------------------------------
Alan J. Ruud, President
By: /s/ Nicholas R. Sucic
---------------------------------------
Nicholas R. Sucic, Vice President,
on behalf of each of the above corporations
</TABLE>
<PAGE> 31
EXHIBIT A
FORM OF
RUUD FIRST MORTGAGE
<PAGE> 32
Exhibit A
DOCUMENT NO.
PARCEL IDENTIFICATION NUMBER:
================================================================================
================================================================================
RUUD LIGHTING, INC.
AS THE MORTGAGOR
TO
NATIONAL CITY BANK
AS THE COLLATERAL AGENT
----------------------------
FIRST MORTGAGE,
ASSIGNMENT OF LEASES
AND
SECURITY AGREEMENT
(TOTAL SECURED OBLIGATIONS NOT TO EXCEED $10,500,000)
DATED AS OF
FEBRUARY 1, 1999
---------------------------
Relating to Property Located at 9201 Washington Avenue, Racine, Wisconsin
================================================================================
================================================================================
<PAGE> 33
FIRST MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(TOTAL SECURED OBLIGATIONS NOT TO EXCEED $10,500,000)
THIS FIRST MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT, dated
as of February 1, 1999 (as amended, modified, or supplemented from time to time,
"THIS MORTGAGE"), by (i) RUUD LIGHTING, INC., a Wisconsin corporation
(hereinafter, together with its successors and assigns, called the "MORTGAGOR")
which is duly qualified to transact business in the jurisdiction in which the
real property referred to below is located, whose address is 9201 Washington
Avenue, Racine, Wisconsin 54406, in favor of (ii) NATIONAL CITY BANK, a national
banking association, as collateral agent under the Credit Agreement referred to
below (herein, together with its successors and assigns in such capacity, the
"COLLATERAL AGENT"), whose address is 1900 East Ninth Street, Cleveland, Ohio
44114, for the benefit of the Secured Creditors (as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement (as defined below) shall be used herein as therein
defined.
(B) This Mortgage is made pursuant to the Credit Agreement, dated as of
January 2, 1998, as amended (herein, as heretofore and hereafter amended or
otherwise modified, restated or replaced from time to time, the "CREDIT
AGREEMENT"), among Advanced Lighting Technologies, Inc., an Ohio corporation
(herein, together with its successors and assigns, the "BORROWER"), the
financial institutions named as lenders therein (herein, together with their
successors and assigns, the "LENDERS"), and National City Bank, as the
Administrative Agent for the Lenders under the Credit Agreement, providing,
among other things, for loans or advances or other extensions of credit to or
for the benefit of the Borrower of up to $85,000,000, with such loans or
advances being evidenced by promissory notes (the "NOTES", such term to include
all notes and other securities issued in exchange therefor or in replacement
thereof).
(C) The Mortgagor is a Subsidiary of the Borrower and will derive
financial benefit from the loans or advances or other extensions of credit made
to the Borrower pursuant to the Credit Agreement.
(D) The Borrower or any of its Subsidiaries may from time to time be
party to one or more Designated Hedge Agreements (as defined in the Credit
Agreement). Any institution that participates, and in each case their subsequent
assigns, as a counterparty to any Designated Hedge Agreement (collectively, the
"DESIGNATED HEDGE CREDITORS"; and the Designated Hedge Creditors together with
the Administrative Agent, the Collateral Agent and the Lenders, collectively the
"SECURED CREDITORS"), shall benefit hereunder as herein provided. The Credit
Documents and the Designated Hedge Agreements are herein sometimes referred to
collectively as the "SECURED DEBT DOCUMENTS" and individually as a "SECURED DEBT
DOCUMENT".
(E) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor
(including the Mortgagor, as one of the Subsidiary Guarantors) has jointly and
severally guaranteed to the Secured Creditors the payment when due of the
Guaranteed Obligations (as defined in the Subsidiary Guaranty).
(F) Because of certain contractual restrictions presently binding on
the Borrower and affecting the ability of the Borrower and its Subsidiaries to
grant liens on real property and certain other assets, the total unpaid balance
of the Secured Obligations which are secured at any one time by this Mortgage is
contractually limited by this Mortgage to a maximum of $10,500,000.
(G) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
<PAGE> 34
(H) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(I) The execution and delivery of this Mortgage has been duly
authorized by the Mortgagor, and all things necessary to make this Mortgage a
valid, binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good
and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction from the
Collateral Agent, and in consideration of the payments or loans or advances or
other credit facilities made or to be made hereafter to or for the benefit of
the Borrower by the Lenders, the Mortgagor DOES HEREBY grant, bargain, sell,
MORTGAGE, WARRANT, CONVEY, alien, remise, release, assign, transfer, grant a
security interest in, set over, deliver, confirm and convey unto the Collateral
Agent, its successors and assigns, upon the terms and conditions of this
Mortgage, with power of sale, each and all of the real properties and interests
in real properties, and DOES HEREBY FURTHER grant to the Collateral Agent, its
successors and assigns, a security interest in and to all other property and
interests, described in the following Granting Clauses (all of such property and
interests hereinafter collectively called the "MORTGAGED PROPERTY"):
GRANTING CLAUSES
All the estate, right, title and interest of the Mortgagor in, to and
under, or derived from:
GRANTING CLAUSE FIRST
LAND
All those certain lot(s), piece(s) or parcel(s) of land more
particularly described in Exhibit 1 attached hereto and made a part
hereof, as the description of the same may be amended or supplemented
from time to time and all and the reversions or remainders in and to
said land and the tenements, hereditaments, easements, rights-of-way or
use, rights (including alley, drainage, crop, timber and cutting,
agricultural, horticultural, mineral, water, oil and gas rights),
privileges, royalties and appurtenances to said land, now or hereafter
belonging or in anywise appertaining thereto, including any such right,
title, interest in, to or under any agreement or right granting,
conveying or creating, for the benefit of said land, any easement,
right or license in any way affecting other property and in, to or
under any streets, ways, alleys, vaults, gores or strips of land
adjoining said land or any parcel thereof, or in or to the air space
over said land, all rights of ingress and egress by motor vehicles to
parking facilities on or within said land, and all claims or demands of
the Mortgagor, either at law or in equity, in possession or expectancy,
of, in or to the same (all of the foregoing hereinafter collectively
called the "LAND").
GRANTING CLAUSE SECOND
IMPROVEMENTS
All buildings, structures and other improvements now or
hereafter located on the Land, and all appurtenances and additions
thereto and betterments, renewals, substitutions and replacements
thereof, owned by the Mortgagor or in which the Mortgagor has or shall
acquire an interest (all of the foregoing hereinafter collectively
called the "IMPROVEMENTS").
GRANTING CLAUSE THIRD
2
<PAGE> 35
FIXTURES AND EQUIPMENT
Without limitation of the foregoing Granting Clauses, (i) all
"FIXTURES" (as defined in the Uniform Commercial Code of the State in
which the Land is located), (ii) all "EQUIPMENT" (as defined in the
Uniform Commercial Code of the State in which the Land is located),
(iii) all other fixtures, chattels and articles of personal property
(other than "inventory", as defined in the Uniform Commercial Code of
the State in which the Land is located), and (iv) all additions,
betterments, improvements, modifications, renewals, alterations,
repairs, attachments, parts, accessories, appurtenances, substitutions
and replacements of or to any of the foregoing, in each case now or
hereafter owned or otherwise acquired by the Mortgagor or in which the
Mortgagor now has or shall hereafter acquire an interest, wherever
situated, and now or hereafter located on, attached or affixed to,
contained in or used in connection with, the properties referred to in
Granting Clause First or Granting Clause Second, or placed on any part
thereof, though not attached or affixed thereto, including, without
limitation, all of the following: (1) all automobiles, trucks and
trailers, and all other automotive or transportation vehicles and
equipment; (2) all machines and machinery and other apparatus; (3) all
engines and motors; (4) all lathes; (5) all drill presses, punch
presses and other presses; (6) all sorting, assembly, installation and
production line equipment; (7) all robotic equipment, devices and
systems; (8) all boilers, turbines, stokers, smelters, electric arc
furnaces, ladle arc furnaces, reheat furnaces and/or other furnaces and
related equipment; (9) all rolling mills, coilers and cooling beds;
(10) all stamping, cutting, drilling, jigging, bending, shaping,
fitting, molding, milling, injection, sizing, patterning, fastening,
connecting, heat treating, galvanizing, painting, embossing, coloring,
identification, measuring, monitoring, quality assurance, finishing
and/or processing machines, equipment and systems; (11) all fabrication
equipment and systems; (12) all packaging, receiving and shipping
equipment and systems; (13) all scales; (14) all counting, measurement,
testing, monitoring, calibration and analytical devices, equipment and
systems; (15) all design and quality assurance or control equipment
(including robotics); (16) all welding equipment and systems; (17) all
soldering equipment and systems; (18) all hydraulic equipment and
hydraulics; (19) all tooling, dies, jigs, casts, molds, patterns,
models, stencils and drawings; (20) all generators, transformers,
switches, substations, pumps, compressors, dynamos and batteries; (21)
all cranes and hoists; (22) all conveyors; (23) all computers; (24) all
computer monitors, drives, servers, and other hardware and software
(whether owned, leased or licensed); (25) all computing equipment; (26)
all electronic data processing equipment; (27) all operating and
maintenance manuals, as well as all plans, specifications and operating
instructions, for all equipment and fixtures; (28) all gas, oil
kerosene and other fuels; (29) all industrial gases and containers
therefor; (30) all consumable supplies; (31) all spare parts,
replacement parts, appliances, utensils, tools, implements and
fittings; (32) all repair and maintenance equipment; (33) all tanks
(whether free standing, anchored or otherwise installed in place,
readily movable, above or below ground, or otherwise), drums, vessels,
containers, racks, pallets, skids, bins and shelves or shelving; (34)
all forklifts, liftrucks, pallet movers, dollies, carts, and other
materials handling equipment; (35) all shipping containers; (36) all
rail cars; (37) all pipelines, pipes, ducts and conduits; (38) all
wiring and all electric or other power surge or interruption protection
equipment; (39) all water and other towers; (40) all call systems,
dispatch systems, public address systems, switchboards, telephones,
mobile phones, beepers, two-way (or more) radios, aerials, antennas and
other telecommunication, teleconferencing (including video) and other
communication equipment; (41) all desks, tables, cabinets, bureaus,
credenzas, chairs, benches, couches, coat racks, safes and vaults,
photocopy machines, facsimile, telex and cable machines, postage
meters, televisions, video machines, radios, coffee, soft drink,
beverage and fast food machines, lockers, bulletin boards, photographs,
works of art and other decorations, lawn ornaments, signs, plants and
shrubbery (both indoor and outdoor), sinks, basins, stoves, ranges,
microwaves, ovens, dishwashers, refrigerators, ice makers, cafeteria
equipment and supplies, wash tubs, showers, partitions, screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture
and furnishings; (42) all heating, lighting, power, plumbing, water,
ventilating, cooling, air conditioning, refrigerating, gas, oil,
3
<PAGE> 36
steam, electrical, solar, waste, incinerating and/or compacting plants,
systems, fixtures and equipment; (43) all elevators and escalators;
(44) all vacuum and other cleaning systems including window washing
equipment; (45) all lawn, parking and sidewalk maintenance equipment,
including lawn mowers, leaf blowers, snow blowers, plows and vacuums;
(46) all dust and noise suppression systems and equipment; (47) all
air, water and other pollution control systems and equipment; (48) all
safety systems and equipment; (49) all office supplies; (50) all
industrial hygiene equipment and supplies; (51) all security alarms and
cameras, and all identification, timekeeping, access and surveillance
systems and equipment; and (52) all sprinkler systems and other fire
detection, prevention and extinguishing apparatus. If the Lien of this
Mortgage in any item of Fixtures and Equipment is subject to a purchase
money or other security interest therein which is permitted under this
Mortgage, then all of the right, title and interest of the Mortgagor in
and to such item is hereby assigned to the Collateral Agent, together
with the benefits of all deposits and payments now or hereafter made
thereon by or on behalf of the Mortgagor (all of the foregoing
property, rights and interests described in this Granting Clause Third,
collectively the "FIXTURES AND EQUIPMENT").
GRANTING CLAUSE FOURTH
PERMITS, LICENSES AND FRANCHISES AND GENERAL INTANGIBLES
Without limitation of the foregoing Granting Clauses, all
permits, licenses, franchises, privileges, grants, consents,
exemptions, concession agreements, development rights, building
variances, certificates of occupancy or operation, and other
authorizations or approvals, now or hereafter issued or granted by any
governmental authority with respect to the ownership of the Mortgaged
Property, or with respect to the ownership, construction or operation
of the Mortgaged Property, and all "GENERAL INTANGIBLES" (as defined in
the Uniform Commercial Code of the State in which the Land is located)
relating in any way to the Mortgaged Property or the use or operation
thereof, together with and any renewals or extensions of any of the
foregoing, PROVIDED that the lien of this Mortgage shall not apply to,
and there shall be excluded from the ambit of this Granting Clause
Fourth, any of the foregoing permits, licenses, franchises, privileges,
grants, consents, exemptions, concession agreements, development
rights, building variances, certificates of occupancy or operation, and
other authorizations or approvals and any other "general intangibles",
which, by their express terms or by reason of applicable law would
become void or voidable if mortgaged, pledged or assigned by the
Mortgagor hereunder.
GRANTING CLAUSE FIFTH
LEASEHOLD AND OTHER CONTRACTUAL INTERESTS
All the leases, lettings and licenses of, and all other
contracts and agreements affecting, the Land, the Improvements, the
Fixtures and Equipment and/or any other property or rights mortgaged or
otherwise conveyed or encumbered hereby, or any part thereof, now or
hereafter entered into, and all amendments, modifications, supplements,
additions, extensions and renewals thereof, and all right, title and
interest of the Mortgagor thereunder, including cash and securities
deposited thereunder, the right to receive and collect the rents,
income, proceeds, issues and profits payable thereunder and the rights
to enforce, whether at law or in equity or by any other means, all
provisions and options thereof.
4
<PAGE> 37
GRANTING CLAUSE SIXTH
ASSIGNMENT OF RENTS, INCOME AND PROFITS
All rents, income, profits, proceeds and any and all cash
collateral to be derived from the Mortgaged Property, or the use and
occupation thereof, or under any contract or bond relating to the
construction or reconstruction of the Mortgaged Property, including all
rents, royalties, revenue, rights, deposits (including security
deposits) and benefits accruing to the Mortgagor under all leases now
or hereafter covering the Mortgaged Property, whether before or after
foreclosure or during the full period of redemption, if any, and the
right to receive the same and apply them against the Secured
Obligations or against the Mortgagor's other obligations hereunder,
together with all contracts, bonds, leases and other documents
evidencing the same now or hereafter in effect and all rights of the
Mortgagor thereunder. Nothing contained in the preceding sentence shall
be construed to bind the Collateral Agent to the performance of any of
the provisions of any such contract, bond, lease or other document or
otherwise impose any obligation upon the Collateral Agent (including
any liability under a covenant of quiet enjoyment contained in any
lease or under applicable law in the event that any tenant shall have
been joined as a party defendant in any action to foreclose this
Mortgage and shall have been foreclosed of all right, title and
interest and all equity of redemption in the Mortgaged Property),
except that the Collateral Agent shall be accountable for any money
actually received pursuant to such assignment. The assignment of said
rents, income, profits, proceeds and cash collateral, and of the
aforesaid rights with respect thereto and to the contracts, bonds,
leases and other documents evidencing the same is intended to be and is
an absolute present assignment from the Mortgagor to the Collateral
Agent and not merely the passing of a security interest.
GRANTING CLAUSE SEVENTH
OTHER AND AFTER ACQUIRED PROPERTY
Any and all moneys and other property, of every kind and
nature, which may from time to time be subjected to the lien hereof by
the Mortgagor, through a supplement to this Mortgage or otherwise, or
by any other person or entity, or which may come into the possession of
or be subject to the control of the Collateral Agent, it being the
intention and agreement of the Mortgagor that all property hereafter
acquired or constructed by the Mortgagor shall forthwith upon
acquisition or construction thereof by the Mortgagor and without any
act or deed by the Mortgagor be subject to the lien and security
interest of this Mortgage as if such property were now owned by the
Mortgagor and were specifically described in this Mortgage and conveyed
or encumbered hereby or pursuant hereto, and the Collateral Agent is
hereby authorized to receive any and all such property as and for
additional security hereunder.
GRANTING CLAUSE EIGHTH
PROCEEDS AND AWARDS
All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor, all
proceeds of the conversion, voluntary or involuntary, of any of the
property described in these Granting Clauses into cash or other
liquidated claims, including proceeds of hazard, title and other
insurance, and all claims, entitlements, judgments, damages, awards,
settlements and compensation (including interest thereon) heretofore or
hereafter accruing or made to or for the benefit of the present and all
subsequent owners of the Land, the Improvements, the Fixtures and
Equipment and/or any other property or rights encumbered or conveyed
hereby for any injury to or decrease in the value thereof for any
reason, or by any
5
<PAGE> 38
governmental or other lawful authority for the taking by eminent
domain, condemnation or otherwise of all or any part thereof,
including awards for any change of grade of streets.
TO HAVE AND TO HOLD the Mortgaged Property unto the Collateral Agent,
its successors and assigns, forever, for the purposes and uses herein set forth,
until such time as all of the Secured Obligations which are secured hereby shall
have been paid in full.
The property, interests and rights hereinabove mentioned, whether owned
in fee or held under lease, is hereinafter referred to as the "REAL PROPERTY
COLLATERAL" to the extent that the same is realty, and as the "PERSONAL PROPERTY
COLLATERAL" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral collectively constitute the Mortgaged Property.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code, this Mortgage shall constitute a security agreement and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Collateral Agent may require
from time to time to perfect or renew such security interest under the Uniform
Commercial Code. This Mortgage shall be effective as a financing statement filed
as a fixture filing with respect to all fixtures included within the Mortgaged
Property and is to be filed for record in the Office of the County Recorder or
County Clerk where the Land (including such fixtures) is situated. The mailing
address of the Mortgagor is set forth at the beginning of this Mortgage and the
address of the Collateral Agent from which information concerning the security
interest may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
If the Mortgagor hereafter acquires any real property, or any interest
in real property, in addition to the Real Property Collateral, which is adjacent
to, or contiguous with, the Land, or otherwise is intended or required to be
subjected to the lien of this Mortgage, the Mortgagor will subject the same to
the lien of this Mortgage by instrument supplemental hereto, satisfactory in
form and substance to the Collateral Agent.
The conditions of this Mortgage are such that the Mortgagor has
executed and delivered this Mortgage for the purpose of securing the performance
of its covenants and agreements contained herein and in any agreement or
instrument made with respect to any Secured Obligations secured hereby and to
secure the payment when due (whether at the stated maturity, by acceleration or
otherwise) of the following indebtedness, liabilities and obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due), now existing or hereafter arising
(collectively, the "SECURED OBLIGATIONS"), not exceeding in the aggregate
$10,500,000, for the benefit of the Secured Creditors, although not necessarily
in the order of priority set forth below:
(a) up to $85,000,000 aggregate principal amount of Loans made or
to be made to the Borrower under the Credit Agreement,
maturing on or before December 31, 2000, with interest thereon
as provided in the Credit Agreement, as guaranteed by the
Mortgagor pursuant to the Subsidiary Guaranty;
(b) all reimbursement obligations in respect of Letters of Credit
issued under the Credit Agreement in an aggregate amount not
exceeding $15,000,000, as guaranteed by the Mortgagor pursuant
to the Subsidiary Guaranty;
(c) all obligations and liabilities of the Borrower or any
Subsidiary of the Borrower under or in connection with any
Designated Hedge Agreement, now or hereafter entered into with
or assigned to any of the Secured Creditors (all such
obligations and liabilities described in this clause (e) being
herein collectively called the "DESIGNATED HEDGE
OBLIGATIONS"), as guaranteed by the Mortgagor pursuant to the
Subsidiary Guaranty;
(d) all advances or disbursements of the Collateral Agent or any
Secured Creditor with respect to the Mortgaged Property for
the payment of taxes, levies, assessments, insurance,
insurance premiums
6
<PAGE> 39
or costs incurred in the protection of the Mortgaged Property,
and without limitation of the preceding provisions of this
clause (d), all other sums expended or advanced by or on
behalf of the Collateral Agent pursuant to any term or
provision of this Mortgage or any other agreement or
instrument relating to or securing any of the foregoing for
the purpose of protecting or preserving the Mortgaged Property
or the priority of the Lien of this Mortgage, including, all
advances or disbursements of the Collateral Agent for the
payment of taxes, levies, assessments, insurance, insurance
premiums or costs incurred in the protection of the Mortgaged
Property; and
(e) all other liabilities, obligations and indebtedness of the
Borrower, its Subsidiaries and Affiliates, and/or any other
Credit Party, including, without limitation, the Mortgagor,
incurred under or arising out of or in connection with the
Credit Agreement, the Notes, and the other Secured Debt
Documents, and the due performance and compliance by the
Borrower, its Subsidiaries and Affiliates, and any other
Credit Party, including, without limitation, the Mortgagor,
with all of the terms, conditions, covenants and agreements
contained in the Credit Agreement, the Notes, and such other
Secured Debt Documents;
BUT ONLY TO THE EXTENT THAT the total unpaid balance of the Secured Obligations
which are secured at any one time by this Mortgage, shall not exceed
$10,500,000.
In accordance with the provisions of the Notes, the whole of the
principal sum of the Loans which are then unpaid may be declared and become due
and payable upon the occurrence of an Event of Default under the Credit
Agreement. This Mortgage is given for the purpose of creating a lien on the
Mortgaged Property and expressly is to secure the Secured Obligations, for the
benefit of the Secured Creditors, including but not limited to future advances
and other extensions of credit, whether such advances or other extensions of
credit are obligatory or to be made at the option of the Secured Creditors (or
any of them) or otherwise, to the same extent as if such future advances or
other extensions of credit were made on the date of the execution of this
Mortgage. The total amount of the Secured Obligations may decrease or increase
from time to time and the Lenders or other Secured Creditors may hereafter, as
described in this Mortgage, at any time after this Mortgage is delivered to the
county recorder or county clerk for record, make additional loans, advances or
other extensions of credit to or for the benefit of the Borrower or any of its
Subsidiaries or Affiliates; PROVIDED, HOWEVER, that notwithstanding anything to
the contrary contained in this Mortgage, the total unpaid balance of the Secured
Obligations which are secured at any one time by this Mortgage, shall not exceed
$10,500,000.
PROVIDED, NEVERTHELESS, that if the Secured Obligations which are
secured hereby shall be paid in full when due, and if all of the provisions of
the Credit Agreement, the Notes, and the other Secured Debt Documents shall be
timely performed and observed, then the lien of this Mortgage and the interest
of the Collateral Agent in the Mortgaged Property shall be released at the cost
of the Mortgagor, but this Mortgage shall otherwise, except as specifically
provided herein, remain in full force and effect.
The Mortgagor, intending to bind its successors and assigns, hereby
covenants and agrees with the Collateral Agent, its successors and assigns, for
its benefit and for the benefit of the Secured Creditors, as follows:
SECTION 1. PAYMENT OF SECURED OBLIGATIONS,
PERFORMANCE OF OBLIGATIONS, ETC.
(a) PAYMENT OF SECURED OBLIGATIONS. The Mortgagor shall pay or cause to
be paid all amounts payable by it under the Subsidiary Guaranty and the other
Secured Debt Documents to which it is a party.
(b) PERFORMANCE OF OTHER OBLIGATIONS. The Mortgagor will keep and
perform or cause to be kept and performed all other covenants, agreements,
conditions and stipulations contained in the other Secured Debt Documents which
are binding on or otherwise applicable to the Mortgagor.
7
<PAGE> 40
(c) WAIVER OF ACCEPTANCE, ETC. The Mortgagor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations and this Mortgage and any requirement that the Collateral
Agent or any Secured Creditor protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or any other Secured Creditor.
SECTION 2. TITLE TO PREMISES, PROTECTION
OF LIEN OF MORTGAGE, ETC.
(a) TITLE TO MORTGAGED PROPERTY, ETC. The Mortgagor represents to and
covenants with the Collateral Agent, its successors and assigns, that (i) the
Mortgagor has and will have good, marketable and insurable fee simple title to
the Land, free and clear of all liens, charges and encumbrances of every kind
and character, SUBJECT ONLY to Permitted Encumbrances; (ii) the Mortgagor has
and will have full corporate power and lawful authority to encumber and convey
the Mortgaged Property as provided herein; (iii) the Mortgagor owns and will own
all of the Fixtures and Equipment, free and clear of all liens, charges and
encumbrances of every kind and character, SUBJECT ONLY to Permitted
Encumbrances; (iv) this Mortgage is and will remain a valid and enforceable
first priority lien on, and first priority security interest in, the Mortgaged
Property, SUBJECT ONLY to Permitted Encumbrances; and (v) the Mortgagor hereby
warrants and will forever warrant and defend such title and the validity,
enforceability and priority of the lien and security interest hereof against the
claims of all persons and parties whomsoever.
(b) PROTECTION OF LIEN; DEFENSE OF ACTION. If the lien, security
interest, validity or priority of this Mortgage, or if title or any of the
rights of the Mortgagor or the Collateral Agent in or to the Mortgaged Property,
shall be endangered or questioned, or shall be attacked directly or indirectly,
or if any action or proceeding is commenced, to which action or proceeding the
Collateral Agent is made a party by reason of the execution of this Mortgage, or
in which it becomes necessary to defend or uphold the lien of this Mortgage, or
the priority thereof or possession of the Mortgaged Property, or otherwise to
perfect the security hereunder, or if any suit, action, legal proceeding or
dispute of any kind is commenced in which the Collateral Agent is made a party
or appears as party plaintiff or defendant, affecting the interest created
herein, or the Mortgaged Property, including, but not limited to, bankruptcy,
probate and administration proceedings, other foreclosure proceedings or any
condemnation action involving the Mortgaged Property, then the Mortgagor will
promptly notify the Collateral Agent thereof (unless the Collateral Agent has
initiated or been served with process in respect thereof) and the Mortgagor will
diligently endeavor to cure any defect which may be developed or claimed, and
will take all necessary and proper steps for the defense of such action or
proceeding, including the employment of counsel, the prosecution or defense of
litigation and, subject to the Collateral Agent's approval, the compromise,
release or discharge of any and all adverse claims. The Collateral Agent
(whether or not named as a party to such actions or proceedings), is hereby
authorized and empowered (but shall not be obligated) to take such additional
steps as it may deem necessary or proper for the prosecution, defense and
control of any such action or proceeding or the protection of the lien, security
interest, validity or priority of this Mortgage or of such title or rights,
including the employment of counsel, the prosecution or defense of litigation,
the compromise, release or discharge of such adverse claims, the purchase of any
tax title and the removal of prior liens and security interests. The Mortgagor
shall, on demand, reimburse the Collateral Agent for all expenses (including
attorneys' fees and disbursements) incurred by it in connection with the
foregoing matters, and the person incurring such expenses shall be subrogated to
all rights of the person receiving such payment. All such costs and expenses of
the Collateral Agent, until reimbursed by the Mortgagor, shall be part of the
Secured Obligations and shall be deemed to be secured by this Mortgage.
SECTION 3. TAXES AND IMPOSITIONS.
(a) TAXES ON THE MORTGAGED PROPERTY. The Mortgagor will pay when due,
and before any penalty, interest or cost for non-payment thereof may be added
thereto, all taxes, assessments, vault, water and sewer rents, rates, charges
and assessments, levies, permits, inspection and license fees and other
governmental and
8
<PAGE> 41
quasi-governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, heretofore or hereafter assessed, levied or otherwise
imposed against or upon, or which may become a Lien upon, the Mortgaged Property
or any part thereof or any appurtenance thereto, or the revenues, rents, issues,
income and profits of the Mortgaged Property or arising in respect of the
occupancy, use or possession thereof (collectively, "IMPOSITIONS"). The
Mortgagor will also pay any penalty, interest or cost for non-payment of
Impositions which may become due and payable, and such penalties, interest or
cost shall be included within the term Impositions.
(b) RECEIPTS. Unless the Mortgagor is making monthly deposits with the
Collateral Agent pursuant to section 4, or unless the Collateral Agent otherwise
directs, the Mortgagor will furnish to the Collateral Agent, upon its request,
proof of payment at the time same is made, and thereafter, upon receipt,
validated receipts showing payment in full of all Impositions.
(c) INCOME AND OTHER TAXES. The Mortgagor will promptly pay all income,
franchise and other taxes owing by the Mortgagor, and any stamp taxes which may
be required to be paid in connection with the Secured Obligations, this Mortgage
or any other Secured Debt Document, together with any interest or penalties
thereon, and the Mortgagor will pay any and all taxes, charges, filing,
registration and recording fees, excises and levies imposed upon the Collateral
Agent, the Administrative Agent or the Secured Creditors by reason of execution
of the Credit Agreement, the Notes, this Mortgage, or any of the other Secured
Debt Documents, or ownership of this Mortgage or any mortgage supplemental
hereto, any security instrument with respect to any Fixtures and Equipment or
any instrument of further assurance.
(d) BRUNDAGE CLAUSE. In the event of the enactment after the date
hereof of any law in the State in which the Land is located or any other
governmental entity deducting from the value of the Mortgaged Property for the
purpose of taxation any lien or security interest thereon, or changing in any
way the laws for the taxation of mortgages, deeds of trust or other liens or
debts secured thereby, or the manner of collection of such taxes, so as to
affect this Mortgage, the Secured Obligations, the Collateral Agent, the
Administrative Agent or any of the Secured Creditors, THEN, and in such event,
the Mortgagor shall, on demand, pay to (or reimburse) the Collateral Agent, the
Administrative Agent or such Secured Creditors, the amount of all taxes,
assessments, charges or liens for which the Collateral Agent, the Administrative
Agent or any of the Secured Creditors is or may be liable as a result thereof,
PROVIDED that if any such payment or reimbursement shall be unlawful or would
constitute usury or render the Secured Obligations wholly or partially usurious
under applicable law, then the Collateral Agent may, at its option, declare the
Secured Obligations immediately due and payable or require the Mortgagor to pay
or reimburse the Collateral Agent, the Administrative Agent or any of the
Secured Creditors for payment of the lawful and non-usurious portion thereof.
(e) RIGHT TO CONTEST IMPOSITIONS. Notwithstanding anything to the
contrary contained in this section 3, the Mortgagor shall have the right to
protest and/or contest any Imposition imposed upon the Mortgaged Property or any
part thereof, PROVIDED THAT AND SO LONG AS (1) the same is done by the Mortgagor
upon prior written notice to the Collateral Agent and at the Mortgagor's sole
cost and expense and with due diligence and continuity so as to resolve such
protest and/or contest as promptly as possible; (2) neither the Mortgaged
Property nor any part thereof is or will be in immediate danger of being
forfeited or lost by reason of such protest or contest; (3) if required by the
Collateral Agent, the Mortgagor shall establish a reserve or other security with
the Collateral Agent in an amount and in form and substance satisfactory to the
Collateral Agent for application to the cost of curing or removing the same from
record pursuant to clause (4) below; (4) in any event, each such contest shall
be concluded and the tax assessment, penalties, interest and costs shall be paid
prior to the date such judgment becomes final or any writ or order is issued
under which the Mortgaged Property may be sold pursuant to such judgment; and
(5) the Mortgagor agrees in writing to indemnify and hold harmless the
Collateral Agent and the Secured Creditors from and against any and all
expenses, claims, demands, obligations, liabilities, suits, actions and
penalties upon or arising out of such protest and/or contest. Pending the
determination of any such protest or contest, the Mortgagor shall not be
obligated to pay any such Imposition unless nonpayment of such Imposition will
subject the Mortgaged Property or any part thereof to sale or other liability or
forfeit by reason of non-payment. In addition, to the extent that the same may
be permitted by law, the Mortgagor shall have the right to apply for the
conversion of any Imposition to make the same payable in annual
9
<PAGE> 42
installments over a period of years, and upon such conversion the Mortgagor
shall be obligated only to pay and discharge said periodic installments as
required by this section 3.
SECTION 4. TAX AND INSURANCE DEPOSITS.
(a) AMOUNT OF DEPOSITS. To further secure the Mortgagor's obligations
under sections 3 and 10, but not in lieu thereof, the Collateral Agent, at its
option, following the occurrence and during the continuance of an Event of
Default, may require that the Mortgagor deposit with the Collateral Agent,
monthly on the first day of each month, a sum equal to one-twelfth (1/12) of the
estimated annual cost of all Impositions levied on the Mortgaged Property, and a
sum equal to one-twelfth (1/12) of the estimated annual insurance premiums
required to keep the Improvements and the Fixtures and Equipment insured as
required by section 10 hereof, and the Mortgagor shall, accordingly, make such
deposits. In addition, if required by the Collateral Agent, the Mortgagor shall
also deposit with the Collateral Agent a sum of money which, together with the
aforesaid monthly installments, will be sufficient to make each of said payments
of Impositions and premiums, at least 10 days before such payments are due. If
the amount of any such payments is not ascertainable at the time any such
deposit is required to be made, the deposit shall be made on the basis of the
Collateral Agent's estimate thereof, and, when such amount is fixed for the
then-current year, the Mortgagor shall promptly deposit any deficiency with the
Collateral Agent.
(b) USE OF DEPOSITS. All funds so deposited shall, until so applied,
constitute additional security for the Secured Obligations, shall be held by the
Collateral Agent in a separate account, without interest (except to the extent
required under applicable law), may be commingled with other funds of the
Collateral Agent and, PROVIDED that no Event of Default shall have occurred and
be continuing hereunder, shall be applied in payment of the aforesaid amounts
prior to their becoming delinquent, to the extent that Collateral Agent shall
have such funds on hand, and PROVIDED, FURTHER, that the Collateral Agent shall
have no obligation to use said funds to pay any installment of Impositions prior
to the last day on which payment thereof may be made without penalty or interest
or to pay an insurance premium prior to the due date thereof. It shall be the
Mortgagor's responsibility to furnish the Collateral Agent with bills or
invoices therefor in sufficient time to pay the same before any penalty or
interest attaches and before said policies of insurance lapse, and the
Collateral Agent shall have no responsibility for payment of the same in the
absence of such bills or invoices. If an Event of Default hereunder shall have
occurred and be continuing, or if any of the Secured Obligations shall have been
accelerated as provided in the Credit Agreement or any Designated Hedge
Agreement, all funds so deposited may, at the Collateral Agent's option, be
applied to the Secured Obligations in the order determined by the Collateral
Agent or to cure said Event of Default or as provided in this section.
(c) TRANSFER OF MORTGAGE. Upon an assignment or other transfer of this
Mortgage, the Collateral Agent shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Collateral Agent shall thereupon be completely released from all liability with
respect to such deposits and the Mortgagor or the owner of the Mortgaged
Property shall look solely to the assignee or transferee with respect thereto.
This provision shall apply to every transfer of such deposits to a new assignee
or transferee.
(d) TRANSFER OF MORTGAGED PROPERTY. A permissible transfer of record
title to the Mortgaged Property shall automatically transfer to the new owner
the beneficial interest in any deposits under this section. Upon full payment
and satisfaction of this Mortgage or, at the Collateral Agent's option, at any
prior time, the balance of amounts deposited in the Collateral Agent's
possession shall be paid over to the record owner of the Mortgaged Property, and
no other person shall have any right or claim thereto in any event.
(e) DEPOSITORY. The Mortgagor agrees, at the Collateral Agent's request
and at the Mortgagor's expense, to make the aforesaid deposits with the
Collateral Agent or such service or financial institution as the Collateral
Agent may from time to time designate in lieu of the Collateral Agent.
10
<PAGE> 43
SECTION 5. LIENS AND LIABILITIES.
(a) DISCHARGE OF MECHANIC'S LIENS, ETC. The Mortgagor will pay, bond or
otherwise discharge, from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of, a lien on the Mortgaged
Property, or on the revenues, rents, issues, income or profits arising therefrom
and, in general, the Mortgagor shall do, or cause to be done, at the Mortgagor's
sole cost and expense, everything necessary to fully preserve the lien, security
interest and priority of this Mortgage.
(b) CREATION OF LIENS. The Mortgagor will not, without the Collateral
Agent's consent, create, place or permit to be created or placed, or through any
act or failure to act acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Mortgaged Property, prior to, on a parity with or subordinate to the lien of
this Mortgage, OTHER than the following ("PERMITTED ENCUMBRANCES"): (i) the lien
of this Mortgage; (ii) the lien of a mortgage on the Mortgaged Property which is
junior and subordinate in all respects to this mortgage and the Lien hereof,
securing ratably the Secured Obligations secured hereby together with
$100,000,000 aggregate original principal amount of the Borrower's 8% Senior
Notes due 2008 and all other liabilities and obligations related thereto; (iii)
the Permitted Liens (as defined in the Credit Agreement); and (iv) such other
matters of record as may be described in Exhibit 2 or as to which the Collateral
Agent has otherwise specifically consented in writing. If any of the foregoing,
other than Permitted Encumbrances, becomes attached to the Mortgaged Property
without such consent, the Mortgagor will promptly cause the same to be
discharged and released.
(c) NO CONSENT OF COLLATERAL AGENT TO LIENS TO BE IMPLIED. Nothing in
the Credit Agreement, the Notes, this Mortgage, or the other Secured Debt
Documents shall be deemed or construed in any way as constituting the consent or
request by the Collateral Agent, express or implied, to any contractor,
subcontractor, laborer, mechanic or materialman for the performance of any labor
or the furnishing of any material for any improvement, construction, alteration
or repair of the Mortgaged Property.
(d) RIGHT TO CONTEST. Notwithstanding anything to the contrary
contained in this section 5, the Mortgagor shall have the right to contest in
good faith the validity of any such lien, encumbrance, charge or security
interests, PROVIDED THAT AND SO LONG AS (1) the same is done by the Mortgagor
upon prior written notice to the Collateral Agent and at the Mortgagor's sole
cost and expense and with due diligence and continuity so as to resolve as
promptly as possible such question of validity; (2) neither the Mortgaged
Property nor any part thereof will be in immediate danger of being forfeited or
lost by reason of such contest; (3) such contest shall not subject the
Collateral Agent to prosecution for a criminal offense or a claim for civil
liability; (4) if required by the Collateral Agent, the Mortgagor shall either
bond such lien, encumbrance, charge or security interest or establish a reserve
or other security with the Collateral Agent in an amount and in form and
substance satisfactory to the Collateral Agent for application towards the cost
of curing or removing the same from record pursuant to clause (5) below; (5) the
Mortgagor shall thereafter diligently proceed to cause such lien, encumbrance or
charge to be removed and discharged prior to the date the Mortgaged Property is
listed for an IN REM action with respect to such lien, encumbrance or charge or
any writ or order is issued under which the Mortgaged Property may be sold
pursuant to a final judgment; (6) the Mortgagor agrees in writing to indemnify
and hold harmless the Collateral Agent and the Secured Creditors from and
against any and all expenses, claims, demands, obligations, liabilities, suits,
actions and penalties upon or arising out of such contest and (7) no Event of
Default hereunder shall have occurred and be continuing.
SECTION 6. TRANSFERS AND MERGERS; LEASES, ETC.
The Mortgagor shall not (i) sell, assign, transfer or otherwise dispose
of the Mortgaged Property or any part thereof or interest therein, or (ii) merge
or consolidate with any other person, or (iii) lease all or any portion of the
Mortgaged Property to any other person, except pursuant to a lease which is
subject and subordinate in all respects
11
<PAGE> 44
to this Mortgage, or (iv) enter into any contract or agreement to do any of the
foregoing, expressly including, without limitation, any land contract,
lease/purchase, lease/option or option agreement, EXCEPT to the extent permitted
by, and in compliance with the requirements of, section 9.2 of the Credit
Agreement.
SECTION 7. MAINTENANCE; ALTERATIONS; REPAIR
OR RESTORATION OF LOSS OR DAMAGE
CAUSED BY CASUALTY;
PREPAYMENT UPON EVENT OF LOSS.
(a) REPAIR AND MAINTENANCE. The Mortgagor will operate and maintain the
Mortgaged Property in good order, repair and operating condition, ordinary wear
and tear excepted, and will promptly make all necessary repairs, renewals,
replacements, additions and improvements to the Mortgaged Property, interior and
exterior, structural and nonstructural, foreseen and unforeseen, required by law
or any restrictive covenant affecting the Mortgaged Property or otherwise
necessary so that the Mortgaged Property will at all times be in good operating
condition, ordinary wear and tear excepted, and fit and proper for the purposes
for which it is used and operated at the date hereof. The Mortgagor shall not in
any event commit waste upon the Mortgaged Property or suffer waste to be
committed thereon.
(b) REPLACEMENT OF FIXTURES AND EQUIPMENT. The Mortgagor will keep the
Mortgaged Property fully equipped and will replace all worn-out or obsolete
Fixtures and Equipment with Fixtures and Equipment comparable thereto when new,
and will not, without the Collateral Agent's consent, remove from the Mortgaged
Property any item of the Fixtures and Equipment covered by this Mortgage UNLESS
(i) the same is replaced by the Mortgagor with an item of equal suitability and
value when new, owned by the Mortgagor and subject to the lien and security
interest of this Mortgage, free and clear of any lien or security interest
(other than Permitted Encumbrances), or (ii) in the case of any such Fixtures
and Equipment which is obsolete and surplus to its needs, the same is disposed
of in the ordinary course of business and in compliance with section 9.2 of the
Credit Agreement.
(c) ALTERATIONS OF IMPROVEMENTS, ETC. No buildings, structures or other
substantial Improvements on the Mortgaged Property shall be altered in any
material respect or demolished or removed by the Mortgagor, PROVIDED that the
Mortgagor may make alterations and additions (including structural alterations)
to the Improvements if (i) such alterations do not materially reduce the value
or marketability of the Mortgaged Property or the uses or utility of the
Mortgaged Property; or (ii) such alterations are required by applicable law,
rule or regulation.
(d) EVENT OF LOSS, ETC. If the Improvements or the Fixtures and
Equipment suffer any damage or loss or are destroyed by fire, rain, storm,
flood, earthquake, or any other casualty, whether or not covered by insurance,
the Mortgagor will replace and restore the Mortgaged Property to a condition
satisfactory to the Collateral Agent, UNLESS the proceeds of insurance are
applied to the Secured Obligations as provided in section 10(b) hereof.
SECTION 8. COMPLIANCE WITH LAWS AND
INSURANCE REQUIREMENTS, ETC.
(a) COMPLIANCE WITH LAWS, ETC. The Mortgagor covenants that the
Mortgaged Property will at all times be constructed, installed, maintained and
operated in compliance with all applicable requirements of:
(i) all laws, rules, regulations, orders, authorizations,
permits and licenses of all governmental authorities, federal, state
and local, having jurisdiction over the Mortgagor, the Mortgaged
Property or any part thereof, including, without limitation, (w) all
Environmental Laws, (x) the Occupational Safety and Health Act, 29
U.S.C. Section 651 ET Seq., (y) the Americans with Disabilities Act of
1990, and (z) all state and local laws and ordinances related to
handicapped access and all rules, regulations, and orders issued
pursuant
12
<PAGE> 45
thereto including, without limitation, the Americans with Disabilities
Act Accessibility Guidelines for Buildings and Facilities (collectively
as referred to in clause (y) and this clause (z), "ACCESS LAWS"); and
(ii) all restrictive covenants affecting any portion or all of
the Real Property Collateral;
OTHER than those requirements (A) being contested in good faith by appropriate
proceedings, as to which adequate reserves are established to the extent
required under GAAP, and (B) the noncompliance with which would not have, and
which would not be reasonably expected to have, a Material Adverse Effect.
(b) ALTERATIONS AFFECTING COMPLIANCE WITH ACCESS LAWS. Notwithstanding
any provisions set forth herein or in any other document regarding the
Collateral Agent's approval of alterations of the Real Property Collateral, the
Mortgagor shall not alter the Real Property Collateral in any manner which would
increase in any material respect the responsibilities of the Mortgagor for
compliance with the applicable Access Laws without the prior written approval of
the Collateral Agent. The foregoing shall apply to tenant improvements
constructed by the Mortgagor or by any of its tenants. The Collateral Agent may
condition any such approval upon receipt of a certificate of Access Law
compliance from an architect, engineer, or other person acceptable to the
Collateral Agent.
(c) NOTICE OF VIOLATION OF ACCESS LAWS. The Mortgagor does hereby agree
to give prompt notice to the Collateral Agent of the receipt by the Mortgagor of
any complaints related to violation of any Access Laws and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
(d) LICENSES AND PERMITS, ETC. The Mortgagor shall (i) observe and
comply with all conditions and requirements necessary to preserve and extend any
and all rights, licenses, permits (including but not limited to zoning
variances, special exceptions and non-conforming uses), privileges, franchises
and concessions which are applicable to the Mortgaged Property or any part
thereof or which have been granted to or contracted for by the Mortgagor in
connection with any existing or presently contemplated use of the Mortgaged
Property, and (ii) obtain and keep in full force and effect all necessary
governmental and municipal approvals as may be necessary from time to time to
comply in all material respects with all Environmental Laws, all Access Laws and
other statutory or regulatory requirements; EXCEPT in any such case referred to
in clause (i) or (ii) above where the noncompliance would not have, and would
not be reasonably expected to have, a Material Adverse Effect.
(e) FLOOD HAZARDS; UTILITIES; STREETS. The Mortgagor represents and
warrants that (i) the Mortgaged Property are not located in an area identified
by the Secretary of Housing and Urban Development or a successor thereto as an
area having special flood hazards pursuant to the terms of the National Flood
Disaster Protection Act of 1973, as amended; (ii) the Mortgaged Property are
served by all utilities required for the present use thereof; and (iii) all
streets necessary to serve the Mortgaged Property for the use thereof as herein
contemplated have been completed and are serviceable and have been dedicated or
accepted by the appropriate governmental entities.
(f) ZONING; TITLE MATTERS. The Mortgagor will not (i) initiate or
support any zoning reclassification of the Mortgaged Property, seek any variance
under existing zoning ordinances applicable to the Mortgaged Property or use or
permit the use of the Mortgaged Property in a manner which would result in such
use becoming a non-conforming use under applicable zoning ordinances, (ii)
modify, amend or supplement any Permitted Encumbrances, (iii) impose any
restrictive covenants or encumbrances upon the Mortgaged Property, execute or
file any subdivision plat affecting the Mortgaged Property or consent to the
annexation of the Mortgaged Property to any municipality or (iv) permit or
suffer the Mortgaged Property to be used by the public or any person in such
manner as might make possible a claim of adverse usage or possession or of any
implied dedication or easement.
(g) INSURANCE REQUIREMENTS. The Mortgagor shall observe and comply with
any and all conditions and requirements attached to or made a part of the
insurance relating to the Mortgaged Property which is maintained in accordance
with section 10.
13
<PAGE> 46
SECTION 9. ENVIRONMENTAL MATTERS.
(a) Without limitation of the provisions of section 8 hereof, the
Mortgagor hereby (i) affirms that the representations contained in section 7.13
of the Credit Agreement are true and correct insofar as it and the Mortgaged
Property are concerned, (ii) insofar as it and/or the Mortgaged Property are
concerned, covenants to perform and observe all of the terms and provisions of
the Credit Agreement relating to compliance by the Borrower and/or its
Subsidiaries with Environmental Laws, including without limitation, notice by it
and indemnification by it of Environmental Claims, as provided in section 8.8
and 13.1 of the Credit Agreement, as fully as if the Mortgagor were named in
such terms and provisions in the place and stead of the Borrower; and (iii)
agrees that all of the Secured Creditors shall be considered Indemnitees as
defined in section 13.1 of the Credit Agreement.
(b) Any costs or expenses reasonably incurred by a person to be
indemnified hereunder for which the Mortgagor is responsible shall be paid to
the person to be indemnified on demand, and failing prompt reimbursement, shall
be added to the Secured Obligations and earn interest at the interest rate
provided in the last sentence of section 2.7(c) of the Credit Agreement, or such
lesser rate as is the maximum legally permissible rate of interest (the "DEFAULT
RATE"), until paid in full.
(c) The Mortgagor's representations, warranties, and obligations under
this section shall not be terminated, released, discharged, extinguished, or
otherwise affected by any foreclosure of any lien, indebtedness or obligation,
any satisfaction of the Secured Obligations or the release or discharge of the
Mortgaged Property or any part thereof or any other action or thing, except and
unless such representations, warranties, and obligations are expressly released
in writing by the Collateral Agent, which writing shall refer particularly to
this section. The provisions of this section may be enforced at any time by any
of the Secured Creditors, the Collateral Agent or any other person entitled to
be indemnified hereunder and, without limiting the foregoing, shall survive the
payment or other satisfaction by any means of the obligations evidenced by the
Notes and the release and discharge of this Mortgage, except in the case of a
specific written release by the Collateral Agent as to this section, as referred
to above.
SECTION 10. INSURANCE.
(a) REQUIRED INSURANCE. The Mortgagor will maintain or cause to be
maintained insurance with responsible companies in such amounts and against such
risks as is usually carried by owners of similar businesses and properties (and
with such deductibles and levels of self-insurance as are usually maintained by
owners of similar businesses and properties and as are consistent with the
Mortgagor's practices as of the date of the execution and delivery hereof),
PROVIDED that in any event the Mortgagor will maintain:
(i) ALL RISK EXTENDED COVERAGE INSURANCE: insurance against
loss or damage covering the Improvements, the Fixtures and Equipment
and all other tangible personal property of the Mortgagor located on
the Mortgaged Property by reason of any loss or damage by fire, storms,
and other hazards, perils, casualties and risks, including without
limitation risks usually covered by extended coverage policies issued
in the jurisdiction in which the Improvements are located, which
insurance shall:
(A) name National City Bank, as Collateral Agent as
an additional insured and as loss payee,
(B) provide coverage in an amount not less than the
greater of (x) 100% of the replacement costs of the
Improvements and the Fixtures and Equipment, (y) the full
insurable value of the Improvements and the Fixtures and
Equipment, and (z) the amount applicable to the Improvements
and the Fixtures and Equipment necessary so that neither the
Mortgagor (or any of
14
<PAGE> 47
its Affiliates) or the Collateral Agent shall be considered or
shall become a co-insurer of any loss under such policy, and
(C) provide for a deductible or self-insurance
retention in an amount consistent with the Mortgagor's current
practices or such greater amount as is reasonably acceptable
to the Collateral Agent;
(ii) FLOOD INSURANCE: if the area in which the Real Property
Collateral is located has been designated as flood prone or a flood
risk area, as defined by the Flood Disaster Protection Act of 1973, as
amended, flood insurance, which insurance shall:
(A) name National City Bank, as Collateral Agent as
an additional insured and as loss payee,
(B) provide coverage in an amount not less than the
greater of (x) 100% of the replacement costs of the
Improvements and the Fixtures and Equipment, (y) the full
insurable value of the Improvements and the Fixtures and
Equipment, and (z) the amount applicable to the Improvements
and the Fixtures and Equipment necessary so that neither the
Mortgagor (or any of its Affiliates) or the Collateral Agent
shall be considered or shall become a co-insurer of any loss
under such policy; PROVIDED that if flood insurance in the
required amount is not available, flood insurance shall be
maintained in the maximum amount available;
(C) provide for a deductible or self-insurance
retention of an amount reasonably acceptable to the Collateral
Agent; and
(D) comply with any additional requirements of the
National Flood Insurance Program as set forth in such Act;
(iii) COMMERCIAL GENERAL LIABILITY INSURANCE: insurance
against claims for bodily injury, death or property damage occurring
on, in or about the Mortgaged Property and any other facilities owned,
leased or used by the Mortgagor (including adjoining streets, sidewalks
and waterways), which insurance shall:
(A) name National City Bank, as Collateral Agent as
an additional insured,
(B) provide coverage in an amount not less than
$______ per occurrence and $______ in the aggregate, PLUS
umbrella coverage of not less than $_______; and
(C) provide for a deductible or self-insurance
retention in an amount consistent with the Mortgagor's current
practices or such greater amount as is reasonably acceptable
to the Collateral Agent;
(iv) WORKERS' COMPENSATION INSURANCE: insurance against claims
for injuries to or death of employees (including Employers' Liability
Insurance) to the extent required by applicable law;
(v) BUSINESS INTERRUPTION INSURANCE: insurance against loss of
operating income for a period of at least six months, occasioned by
reason of any peril affecting the operations of the Mortgagor; and
(vi) OTHER INSURANCE: such other and additional insurance, in
such amounts and with such coverages as are then customary for property
similar in use and located in the same state in which the Mortgaged
Property is located.
15
<PAGE> 48
Such insurance shall be written by financially responsible companies selected by
the Mortgagor and having an A.M. Best rating of "A-" or better and being in a
financial size category of "VII" or larger, or by other companies acceptable to
the Collateral Agent, and (other than workers' compensation insurance) shall
name the Collateral Agent, as loss payee (in the case of insurance described in
items (i) and (ii)) or as an additional named insured (in the case of the
insurance described in items (iii), (v) and (vi) above), in each case as its
interests may appear. Each policy referred to in this section shall provide that
it will not be canceled or reduced or expire except after not less than 30 days'
written notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent shall not be invalidated by an act or negligence of the
Mortgagor or any person having an interest in any facility owned, leased or used
by the Mortgagor nor by occupancy or use of any facility owned, leased or used
by the Mortgagor for purposes more hazardous than permitted by such policy nor
by any foreclosure or other proceedings relating to any facility owned, leased
or used by the Mortgagor. The Mortgagor will advise the Collateral Agent
promptly of any policy cancellation, reduction or amendment. All of such
insurance shall be primary and non-contributing with any insurance which may be
carried by the Collateral Agent. All insurance policies, to the extent of its
interest, are to be for the benefit of and first payable in case of loss to the
Collateral Agent as first mortgagee without contribution. At or prior to the
time of the initial Borrowing by the Mortgagor, it will provide to the
Collateral Agent (x) certificates or endorsements naming the Collateral Agent as
an additional insured or loss payee with respect to the casualty and liability
insurance maintained as required hereby with respect to the Mortgaged Property,
and (y) if requested to do so, copies of all insurance policies maintained by it
as required hereby. The Mortgagor shall deliver to the Collateral Agent
contemporaneously with the expiration or replacement of any policy of insurance
required to be maintained hereunder a certificate as to the new or renewal
policy.
(b) PROCEEDS OF INSURANCE. All amounts recoverable under any policy of
casualty insurance are hereby assigned to the Collateral Agent. In the event of
a loss, the Collateral Agent is authorized and empowered, at its option, to
adjust or compromise any loss covered by any insurance policies on the Mortgaged
Property, to collect and receive the proceeds therefrom and, after deducting
from such proceeds any expenses incurred by it in the collection or handling
thereof, to use and apply the net proceeds or any part thereof in any one or
more of the following ways: (i) application of the net proceeds to the total
unpaid balance of the Secured Obligations up to a maximum amount of $10,500,000,
INCLUDING WITHIN SUCH AMOUNT (A) interest on such Secured Obligations, and (B)
any advances or disbursements made for the payment of taxes, levies or insurance
on the Mortgaged Property with interest on such advances and disbursements,
which payment shall reduce the remaining maximum amount of this Mortgage, and if
and to the extent that the total unpaid balance of the Secured Obligations
exceeds such amount, the remaining net proceeds shall be applied as provided in
any of the following clauses, which payment shall reduce the remaining maximum
amount of this Mortgage; (ii) use the same or any part thereof to fulfill any of
the covenants contained herein as the Collateral Agent may determine; (iii) use
the same or any part thereof to replace and restore the Mortgaged Property to a
condition satisfactory to the Collateral Agent; or (iv) release the same or any
part thereof to the Mortgagor to cover the cost of repair or restoration of the
Improvements.
(c) POWER OF ATTORNEY. The Collateral Agent is hereby irrevocably
appointed by the Mortgagor as attorney for the Mortgagor to assign any policy to
itself or its nominees in the event of the foreclosure of this Mortgage. In the
event of foreclosure of this Mortgage, or other transfer of title of the
Mortgaged Property in lieu of foreclosure, all right, title and interest of the
Mortgagor in and to any insurance policies then in force shall pass to the
purchaser or grantee thereof.
SECTION 11. CONDEMNATION.
(a) CONDEMNATION. The Mortgagor will give the Collateral Agent
immediate notice of the actual or threatened commencement of any proceedings
under eminent domain affecting all or any part of the Mortgaged Property or any
easement therein or appurtenance thereof, including severance and consequential
damage and change in grade of streets, and will deliver to the Collateral Agent
copies of any and all papers served in connection with any such proceedings. The
Mortgagor agrees that all awards heretofore or hereafter made by any public or
quasi-public authority to the present and all subsequent owners of the Mortgaged
Property by virtue of an exercise of the right of
16
<PAGE> 49
eminent domain by such authority, including any award for taking of title,
possession or right of access to a public way, or for any change of grade or
streets affecting the Mortgaged Property, are hereby assigned to the Collateral
Agent. In case of any such proceedings, the Collateral Agent is authorized and
empowered, at its option, to collect and receive the proceeds of any such awards
from the authorities making the same and to give proper receipts therefor, and
after deducting from such proceeds any expenses incurred by the Collateral Agent
in the collection or handling thereof, to use and apply the net proceeds or any
part thereof in any one or more of the following ways: (i) application of the
net proceeds to the total unpaid balance of the Secured Obligations up to a
maximum amount of $10,500,000, INCLUDING WITHIN SUCH AMOUNT (A) interest on such
Secured Obligations, and (B) any advances or disbursements made for the payment
of taxes, levies or insurance on the Mortgaged Property with interest on such
advances and disbursements, which payment shall reduce the remaining maximum
amount of this Mortgage, and if and to the extent that the total unpaid balance
of the Secured Obligations exceeds such amount, the remaining net proceeds shall
be applied as provided in any of the following clauses, which payment shall
reduce the remaining maximum amount of this Mortgage; (ii) use the same or any
part thereof to fulfill any of the covenants contained herein as the Collateral
Agent may determine; (iii) use the same or any part thereof to replace and
restore the Mortgaged Property to a condition satisfactory to the Collateral
Agent; or (iv) release the same or any part thereof to the Mortgagor to cover
the cost of repair or restoration of the Improvements.
(b) FURTHER ASSURANCES. The Mortgagor hereby covenants and agrees to
and with the Collateral Agent, upon the request of the Collateral Agent to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning all such awards to the Collateral Agent, free and clear
and discharged of any and all encumbrances of any kind or nature whatsoever
except as above stated.
(c) INSTALLMENT PAYMENT OF SECURED OBLIGATIONS NOT IMPAIRED.
Notwithstanding any taking under the power of eminent domain, alteration of the
grade of any street, or other injury to or decrease in value of the Mortgaged
Property by any public or quasi-public authority or corporation, the obligation
of the Borrower to pay installments on the Secured Obligations owed by it shall
not be impaired and any reduction in the principal sum resulting from the
application by the Collateral Agent of such award or payment as hereinafter set
forth shall be deemed to take effect only on the date of such receipt.
SECTION 12. RIGHT OF COLLATERAL AGENT
TO MAKE PAYMENTS ON BEHALF
OF MORTGAGOR, ETC.
(a) RIGHT OF COLLATERAL AGENT TO MAKE PAYMENTS, ETC. In the event the
Mortgagor shall fail to comply with any or all of its covenants, agreements,
conditions and stipulations herein set forth, then the Collateral Agent shall
after notice to the Mortgagor be and hereby is authorized and empowered at its
option, but without legal obligation to do so, to pay or perform the same
without waiver of any other remedy. In addition, the Collateral Agent is
authorized and empowered at its option, but without legal obligation to do so,
upon not less than two Business Days' prior notice to the Chief Financial
Officer of the Mortgagor, to enter, or have its agents enter, the Mortgaged
Property whenever necessary for the purpose of inspecting the Mortgaged Property
and curing any default hereunder. The Mortgagor agrees that the Collateral Agent
shall thereupon have a claim against the Mortgagor for all sums paid by the
Collateral Agent for such defaults so cured, together with a lien upon the
Mortgaged Property for the sum so paid plus interest at the Default Rate.
(b) COLLATERAL AGENT PROTECTED; FURTHER RIGHTS, ETC. The Collateral
Agent, in making any payment herein and hereby authorized in the place and stead
of the Mortgagor (i) relating to taxes, assessments, water rates, sewer rentals
and other governmental or municipal charges, fines, impositions or liens
asserted against the Mortgaged Property, may do so according to any bill,
statement or estimate procured from the appropriate public authority without
inquiry into the validity thereof; or (ii) relating to any adverse title, lien,
statement of lien, encumbrance, claim or charge, shall be the sole judge of the
validity of same; or (iii) otherwise relating to any purpose herein and hereby
authorized, but not enumerated in this section, may do so whenever, in its good
faith judgment and discretion,
17
<PAGE> 50
such payment shall seem necessary or desirable to protect the full security
intended to be created by this Mortgage. In connection with any such payment,
the Collateral Agent, at its option, may and is hereby authorized to obtain a
continuation report of title prepared by a title insurance company, the cost and
expenses of which shall be repayable by the Mortgagor upon demand and shall be
secured hereby; PROVIDED, HOWEVER, that under no circumstances shall this
Mortgage secure any sum greater than $10,500,000 in the aggregate.
SECTION 13. SECURITY AGREEMENT PROVISIONS.
This Mortgage is hereby deemed to be as well a security agreement for
the purpose of creating hereby a security interest securing the Secured
Obligations in and to the Personal Property Collateral. Without derogating any
of the provisions of this Mortgage, the Mortgagor by this Mortgage:
(a) grants to the Collateral Agent a security interest in all of
the Mortgagor's right, title and interest in and to all
Personal Property Collateral, including, but not limited to,
the items referred to above, together with all additions,
accessions and substitutions and all similar property
hereafter acquired and used or obtained for use on, or in
connection with, the Real Property Collateral; the proceeds of
the Personal Property Collateral are intended to be secured
hereby; PROVIDED, HOWEVER, that such intent shall never
constitute an expressed or implied consent on the part of the
Collateral Agent to the sale of any or all Personal Property
Collateral except as specifically permitted under any of the
applicable provisions of this Mortgage or any of the other
Credit Documents;
(b) agrees that the security interest hereby granted by this
Mortgage shall secure the payment of the Secured Obligations;
(c) agrees not to sell, convey, mortgage or grant a security
interest in, or otherwise dispose of or encumber, any of the
Personal Property Collateral or any of the Mortgagor's right,
title or interest therein, EXCEPT in compliance with the
requirements of section 9.2 of the Credit Agreement;
(d) agrees that if any of the Mortgagor's rights in the Personal
Property Collateral are voluntarily or involuntarily
transferred, whether by sale, creation of a security interest,
attachment, levy, garnishment or other judicial process,
without the written consent of the Collateral Agent, such
transfer shall constitute a default by the Mortgagor under the
terms of this Mortgage;
(e) authorizes the Collateral Agent to file, in the jurisdiction
where this Mortgage will be given effect, financing statements
covering the Personal Property Collateral and at the request
of the Collateral Agent, the Mortgagor shall join the
Collateral Agent in executing one or more of such financing
statements pursuant to the Uniform Commercial Code in a form
satisfactory to the Collateral Agent and the Mortgagor shall
pay the cost of filing the same in all public offices at any
time and from time to time wherever the Collateral Agent deems
filing or recording of any financing statements or of this
Mortgage to be desirable or necessary; and
(f) acknowledges that the Mortgagor, as of the date hereof, has
joined the Collateral Agent in the execution of one or more
Uniform Commercial Code financing statements to be filed to
perfect the security interest in the Personal Property created
by this Mortgage.
SECTION 14. FILINGS AND RECORDINGS.
The Mortgagor agrees at all time to cause this Mortgage, and each
amendment or modification hereof or supplement hereto, and financing statements
covering personal property (and continuation statements in respect thereof), if
necessary or appropriate under the Uniform Commercial Code, as in effect in the
jurisdiction in which
18
<PAGE> 51
the Real Property Collateral is located, and all assignments of leases, to be
recorded, registered and filed, and kept recorded, registered and filed, in such
manner and in such places as appropriate, and shall comply with all applicable
statutes and regulations in order to establish, preserve and protect the
security and priority of this Mortgage, and such assignments and the rights of
the Collateral Agent thereunder. The Mortgagor shall pay, or cause to be paid,
all taxes, fees and other charges incurred in connection with such recording,
registration, filing and compliance.
SECTION 15. RIGHT OF SETOFF.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default, each Secured
Creditor is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Mortgagor or to
any other person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Secured Creditor (including,
without limitation, by branches and agencies of such Secured Creditor wherever
located) to or for the credit or the account of the Mortgagor against and on
account of the obligations and liabilities of the Mortgagor to such Secured
Creditor under the Notes, or any other Secured Debt Documents, including,
without limitation, all interests in Loans purchased by such Secured Creditor
pursuant to section 13.4(b) of the Credit Agreement, and all other claims of any
nature or description arising out of or connected with the Notes or any other
Secured Debt Document, irrespective of whether or not such Secured Creditor
shall have made any demand hereunder and although said Loans, liabilities or
claims, or any of them, shall be contingent or unmatured.
SECTION 16. EVENTS OF DEFAULT.
Any Event of Default under the Credit Agreement, any payment default by
the Borrower or any of its Subsidiaries under any Designated Hedge Agreement,
and/or any Event of Default relating to the Borrower or any of its Subsidiaries
under any Designated Hedge Agreement, shall constitute an Event of Default
("EVENT OF DEFAULT") under this Mortgage.
SECTION 17. REMEDIES.
If an Event of Default, under and as defined in section 16 of this
Mortgage, shall have occurred and be continuing:
(a) The Collateral Agent, the Administrative Agent and the
Secured Creditors may exercise any one or more of the remedies
specified in section 10.2 of the Credit Agreement or otherwise
available at law or in equity, and the Mortgagor hereby grants the
Collateral Agent all remedies which may be available under applicable
law or equity in connection with the enforcement of this Mortgage,
whether or not any such remedies are specifically or generally
enumerated or otherwise referred to herein. Without limitation of any
of the provisions of this section 17, the Mortgagor agrees that, to the
extent permitted by law, this Mortgage may be foreclosed by the
Collateral Agent, at its option, pursuant to the provisions of section
846.103 of the Wisconsin Statutes of 1981-82, or any successor thereof.
(b) To the extent permitted by applicable law, the Collateral
Agent may enter upon the Mortgaged Property or any portion thereof and
may exclude the Mortgagor therefrom; and having and holding the same,
may use, operate, manage, and control the Mortgaged Property and
conduct business in connection therewith, including, without limitation
the continuation of the construction of the Improvements if not
previously completed, either personally or by its superintendents,
managers, agents, servants, attorneys or receivers; and upon every such
entry, the Collateral Agent, at the expense of the Mortgagor and from
time to time, may maintain the Mortgaged Property and may insure and
reinsure the same, as may seem to the
19
<PAGE> 52
Collateral Agent to be necessary or advisable; and, at the expense of
the Mortgagor and from time to time, the Collateral Agent may make all
repairs, renewals, replacements, alterations, additions, betterments
and improvements thereto and thereon, as to the Collateral Agent may
seem necessary or advisable, and if the construction of the
Improvements has not been completed, may cause such construction to be
continued to completion or to such stage of completion as the
Collateral Agent considers necessary or advisable; and in every such
case the Collateral Agent shall have the right to carry on the
construction thereof, enter into, terminate, cancel and/or enforce
contracts or leases related thereto, manage and operate the Mortgaged
Property and carry on the business thereof, and otherwise exercise all
rights which the Mortgagor might otherwise have with respect thereto,
in the name of the Mortgagor or otherwise, as the Collateral Agent
shall deem best or advisable; and the Collateral Agent shall be
entitled to collect all rents, earnings, revenues, issues, profits and
income of the Mortgaged Property, awards made for the taking of or
injury to the Mortgaged Property through eminent domain or otherwise,
including awards or damages for change of grade, and also return
premiums or other payments upon insurance, and said rents, earnings,
revenues, issues, profits and income, awards, damages, premiums and
payments are hereby assigned to the Collateral Agent, and after
deducting the expenses and costs of conducting the business thereof and
of all betterments, additions, alterations, replacements, repairs and
for taxes, assessments, insurance and prior or other charges upon or
with respect to the Mortgaged Property or any portion thereof, as well
as just and reasonable compensations for the services of all counsel,
agents, employees, receivers and other persons properly engaged or
employed, the Collateral Agent shall apply the proceeds as provided in
section 18.
(c) To the extent permitted by applicable law, the Collateral
Agent is hereby authorized and empowered by the Mortgagor to sell the
Mortgaged Property in such manner as may be prescribed by law, by
advertisement and public sale as provided by the laws of the
jurisdiction in which the Real Property Collateral is located, or to
foreclose this Mortgage by judicial proceedings and sell the Mortgaged
Property pursuant to such proceedings as permitted by applicable law.
The Mortgagor does hereby authorize the Collateral Agent to sell the
Mortgaged Property together or in lots or parcels, as to the Collateral
Agent shall seem expedient, and to execute and deliver to the purchaser
or purchasers of such property good and sufficient deeds thereof with
covenants of general, special or limited warranty or such other
instruments of conveyance, assignment or transfer as the Collateral
Agent may deem appropriate. Payment of the purchase price to the
Collateral Agent shall satisfy the obligation of the purchaser at any
such sale therefor, and he shall not be bound to look after the
application thereof. The Collateral Agent shall cause notice of any
such sale to be mailed to the Mortgagor; but, except as otherwise
provided by any applicable provision of law, failure so to mail any
such notice shall not affect the validity of any such sale. If the
Collateral Agent, acting on behalf of any or all of the holders of the
Notes or other Secured Obligations, or any or all such holders acting
on their own behalf, is the highest bidder, the Collateral Agent or
such holders, as the case may be, may purchase at any sale or sales
(whether statutory foreclosure or public sale or sales conducted as
hereinabove authorized) and may, in paying the purchase price, turn in
any of the Notes or other Secured Obligations held by them, in lieu of
cash, up to the entire amount owing thereunder, whether for principal,
interest or other amounts, which amount as so designated as being
turned over shall be considered distribution of the proceeds of such
sale. The provisions set forth above as to public sale or sales in lieu
of statutory foreclosure are not intended as an exclusive method of
foreclosure hereunder or to deprive the Collateral Agent of any other
legal or equitable remedy available under applicable law. Accordingly,
it is specifically agreed that the remedy of foreclosure by the
Collateral Agent's sale as hereinabove provided for shall be cumulative
and shall not in any wise be construed as an exclusive remedy, and the
Collateral Agent shall be fully entitled to a statutory court
foreclosure and to avail itself of any and all other legal or equitable
remedies available under the laws of the jurisdiction in which the Real
Property Collateral is located.
(d) The Mortgagor hereby authorizes the Collateral Agent to
demand and receive, in the place and stead of the Mortgagor, all
amounts that may become due under any and each lease, rental, contract,
easement and other right of the Mortgagor pertaining or in any way
relating to the Mortgaged Property or any part thereof, and, when
received, to apply the same to the costs and expenses incurred by the
Collateral Agent incurred hereunder and to the Secured Obligations. No
demand for, and no receipt or application of
20
<PAGE> 53
any such amount shall be deemed to minimize, subordinate or affect in
any way the lien hereof and rights hereunder of the Collateral Agent or
any rights of a purchaser of any portion of the Mortgaged Property at
any foreclosure or other sale hereunder, as against the person from
whom the amount was demanded or received, or his executors,
administrators, successors or assigns, or anyone claiming under such
Tenant Lease, rental, contract or other right.
(e) The Collateral Agent may exercise all rights and remedies
granted by law and more particularly the Uniform Commercial Code,
including, but not limited to, the right to take possession of the
Personal Property Collateral, and for this purpose may peaceably enter
upon any premises on which any or all of the Personal Property
Collateral is situated, without being deemed guilty of trespass and
without liability for damages thereby occasioned, and take possession
of and operate the Personal Property Collateral or remove it therefrom;
the Collateral Agent shall have the further right to take any action it
deems necessary, appropriate or desirable, at its option and in its
discretion, to repair, refurbish or otherwise prepare the Personal
Property Collateral for sale, lease or other use or disposition and to
sell at public or private sales or otherwise dispose of, lease or
utilize the Personal Property Collateral and any part thereof in any
manner authorized or permitted by law and to apply the proceeds thereof
toward payment of any costs and expenses, including reasonable
attorneys' fees and legal expenses, to the extent permitted by law,
thereby incurred by the Collateral Agent and toward payment of the
Secured Obligations and all other indebtedness described in this
Mortgage, in such order and manner as may be provided in the Credit
Agreement or this Mortgage or in the event such provisions are not
applicable in such order and manner as the Collateral Agent may elect.
The Mortgagor hereby agrees to the provisions of section 846.103, Wisconsin
Stats., as the same may be amended or renumbered from time to time, permitting
the Collateral Agent, upon waiving the right to judgment for deficiency, to hold
the foreclosure sale of the Mortgaged Property three months after a foreclosure
judgment is entered.
SECTION 18. COSTS OF ENFORCEMENT; APPLICATION OF
PROCEEDS; MORTGAGOR NOT LIABLE FOR
DEFICIENCY, ETC.
(a) COSTS OF ENFORCEMENT; APPLICATION OF PROCEEDS. In case of (i)
foreclosure of this Mortgage in any court of law or equity, whether or not any
order or decree shall have been entered therein, and to the extent permitted by
law, a reasonable sum shall be allowed for attorney's fees of the Collateral
Agent in such proceedings, for stenographer's fees and for all moneys expended
for documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
hereunder, and, to the extent permitted by law, there shall be included in any
judgment or decree foreclosing this Mortgage and be paid out of such rents,
issues and profits or out of the proceeds of any sale made in pursuance of any
such judgment or decree, or (ii) any other realization by the Collateral Agent
upon or with respect to the Mortgaged Property or any part or portion thereof,
the proceeds thereof shall be applied as follows:
(1) FIRST, to the payment or reimbursement of the Collateral
Agent for all costs and expenses of such suit or suits or other
enforcement activities of the Collateral Agent, including, but not
limited to, the costs of advertising, sale and conveyance, including
attorneys', solicitors' and stenographers' fees, if permitted by law,
outlays for documentary evidence and the cost of such abstract,
examination of title and title report;
(2) SECOND, to the extent proceeds remain after the
application pursuant to preceding clause (1), to reimburse the
Collateral Agent for all moneys advanced or disbursed by the Collateral
Agent, if any, for the payment of taxes, levies or insurance on the
Mortgaged Property with interest on such advances and disbursements at
the Default Rate;
21
<PAGE> 54
(3) THIRD, to the extent proceeds remain after the application
pursuant to preceding clause (2), such proceeds shall be applied to (i)
the total unpaid balance of the Secured Obligations, up to a maximum
amount of $10,500,000, including sums paid in accordance with clauses
(1) and (2) above, in such amounts and order of priority as may be
provided in section 10.3 of the Credit Agreement; and
(4) FOURTH, to the extent remaining after the application
pursuant to the preceding clauses (1), (2) and (3), to the Mortgagor or
to whomever may be lawfully entitled to receive such payment.
Notwithstanding anything contained in this section 18(a) to the contrary, the
sums secured by, and recoverable under, this Mortgage, shall not exceed
$10,500,000 in the aggregate including, without limitation, those items set
forth in clauses (1) through (3) above.
(b) MORTGAGOR NOT LIABLE FOR DEFICIENCY. It is understood that the
Mortgagor shall not be liable to the extent of any deficiency between (x) the
amount of the proceeds of the Mortgaged Property applied as provided in the
foregoing clauses (1), (2) and (3), and (y) any remaining outstanding amount of
the Secured Obligations.
SECTION 19. RECEIVER.
In the event an action shall be instituted to foreclose this Mortgage,
or prior to foreclosure but after default, the Collateral Agent shall be
entitled to the appointment of a receiver of the rents, issues and profits of
the Mortgaged Property as a matter of right, with power to collect the rents,
issues and profits of the Mortgaged Property due and becoming due during the
period of default and/or the pendency of such foreclosure suit to and including
the date of confirmation of the sale under such foreclosure and during the
redemption period, if any, after such confirmation, such rents, issues and
profits being hereby expressly assigned and pledged as security for the payment
of the Secured Obligations secured by this Mortgage without regard to the value
of the Mortgaged Property or the solvency of any person or persons liable for
the payment of the Secured Obligations and regardless of whether the Collateral
Agent has an adequate remedy at law. The Mortgagor for itself and for any
subsequent owner hereby waives any and all defenses to the application for a
receiver as above provided and hereby specifically consents to such appointment,
but nothing herein contained is to be construed to deprive the holder of this
Mortgage of any other right or remedy or privilege it may now have under the law
to have a receiver appointed. The provision for the appointment of a receiver
and the assignment of such rents, issues and profits is made an express
condition upon which the Loans hereby secured are made. In such event, the court
shall at once on application of the Collateral Agent or its attorney in such
action, appoint a receiver to take immediate possession of, manage and control
the Mortgaged Property, for the benefit of the holder or holders of the Secured
Obligations and of any other parties in interest, with power to collect the
rents, issues and profits of the Mortgaged Property during the pendency of such
action, and to apply the same toward the payment of the several obligations
herein mentioned and described, notwithstanding that the same or any part
thereof is occupied by the Mortgagor or any other person. The rights and
remedies herein provided for shall be deemed to be cumulative and in addition to
and not in limitation of those provided by law and if there be no receiver so
appointed, the Collateral Agent itself may proceed to collect the rents, issues
and profits from the Mortgaged Property. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Mortgaged Property, including but not limited to
real estate commissions, receiver's fee and the reasonable fees of its attorney,
if any, and the Collateral Agent's attorney's fees, if permitted by law, and
court costs, the remainder to be applied against the Secured Obligations. In the
event the rents, issues and profits are not adequate to pay all tax and other
expenses of operation, the Collateral Agent may, but is not obligated to,
advance to any receiver the amounts necessary to operate, maintain and repair,
if necessary, the Mortgaged Property and any such amounts so advanced, together
with interest thereon at the Default Rate from and after the date of
advancement, shall be secured by this Mortgage and have the same priority of
collection as the principal of the Secured Obligations.
22
<PAGE> 55
SECTION 20. LIABILITY OF MORTGAGOR NOT AFFECTED.
No sale of the Mortgaged Property, no forbearance on the part of the
Collateral Agent, no extension of the time for the payment of the Secured
Obligations and no change in the terms of the payment thereof consented to by
the Collateral Agent shall in any way whatsoever operate to release, discharge,
modify, change or affect the original liability of the Mortgagor hereunder or
the original liability of the Mortgagor or any other obligor under any of the
Secured Obligations, either in whole or in part. No waiver by the Collateral
Agent of any breach of any covenant of the Mortgagor herein contained shall be
construed as a waiver of any subsequent breach of the same or any other covenant
herein contained. The failure of the Collateral Agent and/or the Secured
Creditors to exercise the option for acceleration of maturity and/or foreclosure
(including sale under power of sale hereunder) following any default as
aforesaid or to exercise any other option granted to the Collateral Agent
hereunder in any one or more instances, or the acceptance by the Collateral
Agent and/or the Secured Creditors of partial payments hereunder shall not
constitute a waiver of any such default, nor extend or affect the grace period,
if any, but such option shall remain continuously in force with respect to any
unremedied or uncured default. Acceleration of maturity once claimed hereunder
by the Collateral Agent may, at the option of the Collateral Agent, be rescinded
by written acknowledgment to that effect by the Collateral Agent, but the tender
and acceptance of partial payments alone shall not in any way affect or rescind
such acceleration of maturity, or extend or affect the grace period, if any. the
Collateral Agent may pursue any of its rights without first exhausting its
rights hereunder and all rights, powers and remedies conferred upon the
Collateral Agent herein are in addition to each and every right which the
Collateral Agent may have hereunder at law or equity and may be enforced
concurrently therewith.
SECTION 21. REMEDIES CUMULATIVE.
Each remedy or right of the Collateral Agent shall not be exclusive of
but shall be in addition to every other remedy or right now or hereafter
existing at law or in equity. No delay in the exercise or omission to exercise
any remedy or right accruing on any default shall impair any such remedy or
right or be construed to be a waiver of any such default or acquiescence
therein, nor shall it affect any subsequent default of the same or of a
different nature. Every such remedy or right may be exercised concurrently or
independently and when and as often as may be deemed expedient by the Collateral
Agent.
SECTION 22. COLLATERAL AGENT SUBROGATED
TO PRIOR LIENS PAID OUT OF LOAN PROCEEDS.
Should the proceeds of any Loans made by any Lender to the Mortgagor,
the repayment of which is hereby secured, or any part thereof, or any amount
paid out or advanced by the Collateral Agent or any Lender, be used directly or
indirectly to pay off, discharge or satisfy, in whole or in part, any prior lien
or encumbrance upon the Mortgaged Property or any part thereof, then the
Collateral Agent shall be subrogated to such other liens or encumbrances and
upon any additional security held by the holder thereof and shall have the
benefit of the priority of all of the same.
SECTION 23. FURTHER ASSURANCES.
The Mortgagor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the Collateral
Agent may reasonably require for accomplishing the purpose hereof forthwith upon
the request of the Collateral Agent, whether in writing or otherwise. The
Mortgagor, within 10 days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Mortgage and the Secured
Obligations (both unpaid principal and accrued interest and all other items
included in the Secured Obligations) and whether any offset or defenses exist
against the Secured Obligations, and any other information which might
reasonably be requested in connection with the sale of the Secured Obligations,
or any
23
<PAGE> 56
portion thereof or interest therein, to any third party, or an audit of the
Collateral Agent, and which may be relied on for such purposes.
SECTION 24. MORTGAGOR'S OBLIGATIONS ABSOLUTE.
The lien of this Mortgage and the obligations of the Mortgagor
hereunder shall be absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever,
including, without limitation:
(a) any lack of validity or enforceability of the Credit
Agreement, the Notes, any other Secured Debt Document, or any other
agreement or instrument relating thereto;
(b) any renewal, extension, amendment or modification of, or
addition or supplement to, or any waiver, consent, extension,
indulgence or other action or inaction under or in respect of, the
Credit Agreement, the Notes, any other Secured Debt Document, or any
other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Borrower or any of its
Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Secured Obligations or any other assets of the Borrower or any of its
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries;
(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to the Borrower or any of its Subsidiaries or Affiliates, or any action
taken with respect to this Mortgage by any trustee or receiver, or by
any court, in any such proceeding, whether or not the Mortgagor shall
have notice or knowledge of any of the foregoing; or
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Mortgagor as a guarantor
or surety for the Secured Obligations.
This Mortgage shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent or any Secured Creditor upon
the insolvency, bankruptcy or reorganization of the Borrower or any of its
Subsidiaries or Affiliates or otherwise, all as though such payment had not been
made.
SECTION 25. NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Mortgagor, at
9201 Washington Avenue, Racine, Wisconsin 54406, attention: Chief Financial
Officer (facsimile: ___________) , with a copy to the Borrower at 32000 Aurora
Road, Solon, Ohio 44139, attention: Chief Financial Officer (facsimile: (440)
519-0501); if to the Collateral Agent, at 1900 East Ninth Street, Cleveland,
Ohio 44114, attention Agent Services (facsimile: (216) 575-2481; or
24
<PAGE> 57
at such other address as shall be designated by any such person in a written
notice to the other person. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and
shall be effective when received.
SECTION 26. DISCHARGE OF MORTGAGE; RELEASE OF PROPERTY.
(a) DISCHARGE OF MORTGAGE. After the termination of the Total
Commitment and all Designated Hedge Agreements and when all Loans and other
Secured Obligations have been paid in full, this Mortgage shall terminate, and
the Collateral Agent, at the request and expense of the Mortgagor, will execute
and deliver to the Mortgagor a proper instrument or instruments (including
Uniform Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Mortgage, and will duly assign, transfer
and deliver to the Mortgagor (without recourse and without any representation or
warranty) such of the Personal Property Collateral as may be in the possession
of the Collateral Agent and as has not theretofore been sold or otherwise
applied or released pursuant to this Mortgage. In case of failure of the
Collateral Agent to promptly so release this Mortgage, all claims for statutory
penalties and damages are hereby waived.
(b) RELEASE OF COLLATERAL. So long as no payment default on any of the
Secured Obligations is in existence or would exist after the application of
proceeds as provided below, the Collateral Agent shall, at the request of the
Mortgagor, release any or all of the Real Property Collateral and/or Personal
Property Collateral, PROVIDED that (x) such release is permitted by the terms of
section 9.2 of the Credit Agreement) or otherwise has been approved in writing
by the Required Lenders (or all of the Lenders, if required by section 13.12 of
the Credit Agreement) and (y) if required pursuant to the provisions of section
5.2 of the Credit Agreement, the proceeds of such Collateral are applied to the
prepayment of the Loans.
(c) REQUEST FOR RELEASE; EFFECT OF RELEASE. At any time that the
Mortgagor desires that the Collateral Agent take any action to give effect to
any release of any or all of the Mortgaged Property pursuant to the foregoing
paragraph (a) or (b), it shall deliver to the Collateral Agent a certificate
signed by a principal executive officer stating that the release of the
respective portion of or all of the Real Property Collateral and/or Personal
Property Collateral is permitted pursuant to paragraph (a) or (b). In the event
that any part of the Mortgaged Property is released as provided in paragraph
(a), the Collateral Agent, at the request and expense of the Mortgagor, will
duly release such part of the Mortgaged Property and assign, transfer and
deliver to the Mortgagor (without recourse and without any representation or
warranty) such of the part of the Mortgaged Property as is then being (or has
been) so sold and as may be in the possession of the Collateral Agent and has
not theretofore been released pursuant to this Mortgage. The Collateral Agent
shall have no liability whatsoever to any Secured Creditor as the result of any
release of all or any part of the Mortgaged Property by it as permitted by this
section. Upon any release of all or any part of the Mortgaged Property pursuant
to paragraph (a) or (b), none of the Collateral Agent or any of the Secured
Creditors shall have any continuing right or interest in the same, or the
proceeds thereof.
SECTION 27. MISCELLANEOUS.
(a) ACKNOWLEDGMENT OF RECEIPT OF COPIES OF SECURED DEBT DOCUMENTS. The
Mortgagor acknowledges that it has received from the Collateral Agent without
charge a true and correct copy of this Mortgage and each other Secured Debt
Document executed and delivered on or prior to the date hereof.
(b) INDEMNIFICATION. The Collateral Agent and its successors and
assigns shall be entitled to all of the benefits of the indemnification
provisions of the Credit Agreement and the other Credit Documents. All of the
terms and provisions of section 13.1 of the Credit Agreement (including any
defined terms used therein) are by this reference thereto hereby incorporated
into this Mortgage for the benefit of the Collateral Agent and its successors
and assigns as fully as if written out at length herein, and any references in
such section of the Credit Agreement to the "Borrower" shall be deemed to refer
to, and constitute obligations of, the Mortgagor.
25
<PAGE> 58
(c) SUBSEQUENT SERVICES OF COUNSEL TO COLLATERAL AGENT. To the extent
services are required of the Collateral Agent's counsel and/or special counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Mortgage, and all provisions herein
contained, the Mortgagor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Mortgagor.
(d) NO PARTNERSHIP OR JOINT VENTURE. Neither this Mortgage, the Credit
Agreement, the Notes, or any other Secured Debt Documents, are intended or shall
be construed as creating a partnership or joint venture between the Mortgagor,
on the one hand, and the Collateral Agent or any other holder of any of the
Secured Obligations, on the other hand; and the relationship of the Mortgagor
and the Collateral Agent hereunder shall solely be that of Mortgagor and
collateral agent for the holders of the Secured Obligations.
(e) ELECTION OF COLLATERAL AGENT TO SUBORDINATE. At the option of the
Collateral Agent (acting on instructions from all of the Lenders), this Mortgage
shall become subject and subordinate in whole or in part (but not in respect to
the priority of entitlement to insurance proceeds or any award in condemnation)
to any or all leases and/or subleases of all or any part of the Mortgaged
Property upon the execution by the Collateral Agent and recording thereof, at
any time hereafter, in the appropriate recorder's office, a unilateral
declaration to that effect.
(f) WAIVER OF HOMESTEAD AND EXEMPTION RIGHTS, ETC. To the extent
permitted by law with respect to the Secured Obligations or any renewals or
extensions thereof, the Mortgagor waives and renounces any and all homestead and
exemption rights, as well as the benefit of all valuation and appraisement
privileges, and also moratoriums under or by virtue of the constitution and laws
of the jurisdiction in which the Real Property Collateral is located or any
other state or of the United States, now existing or hereafter enacted.
(g) COVENANTS RUN WITH THE LAND. All the covenants of the Mortgagor
contained in this Mortgage shall run with the Land.
(h) USURY SAVINGS CLAUSE. All agreements in the Credit Agreement, in
the Notes, in this Mortgage, or in any other Secured Debt Document are expressly
limited so that in no contingency or event whatsoever, whether by reason of
advancement or acceleration of maturity of any of the Secured Obligations, or
otherwise, shall the amount paid or agreed to be paid hereunder or thereunder
for interest or for the use, forbearance or detention of money exceed the
highest lawful rate permitted under applicable usury laws. If, from any
circumstance whatsoever, fulfillment of any provision of the Credit Agreement,
of the Notes, of this Mortgage, or of any other Secured Debt Document, at the
time performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by applicable usury laws which a court of competent
jurisdiction may deem applicable hereto, then, IPSO FACTO, the obligation to be
fulfilled shall be reduced to the limit of such validity and if, from any
circumstance whatsoever, the Collateral Agent or any Secured Creditor shall ever
receive hereunder or under the other Secured Debt Documents as interest, or for
the use, forbearance or detention of money, an amount which would exceed the
highest lawful rate, the receipt of such excess shall be deemed a mistake and
shall be canceled automatically or, if theretofore paid, such excess shall be
credited against the principal amount of the Secured Obligations or any fees or
other amounts included in the Secured Obligations to which the same may lawfully
be credited, and any portion of such excess not capable of being so credited
shall be rebated to the Mortgagor.
(i) GOVERNING LAW; SUCCESSORS AND ASSIGNS; SEVERABILITY, ETC. This
Mortgage shall be construed and enforced according to the laws of the
jurisdiction in which the Real Property Collateral is located, and shall be
binding upon the Mortgagor, its successors and assigns, any subsequent owners of
the Mortgaged Property, and shall inure to the benefit of the Collateral Agent,
its successors and assigns. Any provision of this Mortgage which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
26
<PAGE> 59
(j) NO MODIFICATION. None of the terms and conditions of this Mortgage
may be changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Mortgagor and the Collateral Agent (with the consent
of the Required Lenders or, to the extent required by section 13.12 of the
Credit Agreement, all of the Lenders), PROVIDED, HOWEVER, that no such change,
waiver, modification or variance shall be made to this section 27(j) without the
consent of each Secured Creditor adversely affected thereby, PROVIDED FURTHER
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors of such Class of Secured Creditors. For the purpose of this Mortgage,
the term "Class" shall mean each class of Secured Creditors, I.E., whether (x)
the Lenders as holders of the Credit Document Obligations or (y) the Designated
Hedge Creditors as holders of the Designated Hedge Obligations; and the term
"REQUISITE CREDITORS" when used with reference to any Class of Secured Creditors
shall mean (x) with respect to the Lenders as holders of the Credit Document
Obligations, the Required Lenders, and (y) with respect to the Designated Hedge
Creditors as holders of the Designated Hedge Obligations, the holders of at
least 51% of all outstanding Designated Hedge Obligations.
(k) AGENCY PROVISIONS. By accepting the benefits of this Mortgage, each
Secured Creditor acknowledges and agrees that the rights and obligations of the
Collateral Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in of this Mortgage, the
duties and obligations of the Collateral Agent set forth or incorporated into
the provisions of this Mortgage may not be amended or modified without the
consent of the Collateral Agent.
(l) COLLATERAL AGENT TO ACT ON BEHALF OF SECURED CREDITORS. The Secured
Creditors agree by their acceptance of the benefits hereof that this Mortgage
may be enforced on their behalf only by the action of the Collateral Agent,
acting upon the instructions of the Required Lenders (or, after all Credit
Document Obligations have been paid in full, instructions of the holders of at
least the majority of the outstanding Designated Hedge Obligations) and that no
other Secured Creditor shall have any right individually to seek to enforce or
to enforce this Mortgage or to realize upon the security to be granted hereby,
it being understood and agreed that such rights and remedies may be exercised by
the Collateral Agent, for the benefit of the Secured Creditors, upon the terms
of this Mortgage.
(m) WAIVER OF TRIAL BY JURY. THE MORTGAGOR AND THE COLLATERAL AGENT
EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
(n) TIME OF ESSENCE. It is specifically agreed that time is of the
essence with respect to this Mortgage and that the waiver of the rights or
options, or obligations secured hereby, shall not at any time thereafter be held
to be abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Secured Obligations, is not
required to be given.
(o) COUNTERPARTS. This Mortgage may be executed by the Mortgagor in
counterparts, each of which shall be an original and all of which collectively
shall constitute one and the same instrument.
27
<PAGE> 60
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed and delivered as of the date first set forth above.
SIGNED AND ACKNOWLEDGED IN THE PRESENCE OF: RUUD LIGHTING, INC.,
AS THE MORTGAGOR
- --------------------------------------
PRINT NAME:
BY:
-------------------------
NAME:
______________________________________ TITLE:
PRINT NAME:
28
<PAGE> 61
STATE OF WISCONSIN )
) SS.:
COUNTY OF RACINE )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named RUUD LIGHTING, INC., a Wisconsin corporation, by
____________________, its ________________, who acknowledged that he did sign
the foregoing instrument and that the same is his free act and deed personally
and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Racine, Wisconsin, this ______ day of February, 1999.
--------------------------
Notary Public
[Notarial Seal]
This Instrument Prepared By:
John W. Sager, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: (216) 586-7228
Facsimile: (216) 579-0212
29
<PAGE> 62
EXHIBIT 1
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
The following described real estate, to-wit:
PARCEL I: That part of the West 1/2 of the Southeast 1/4 of Section 16, Township
3 North, Range 22 East, bounded and described as follows: Commence at the South
1/4 corner of said Section; thence South 89(Degree) 57' 16" East along the South
line of said 1/4 Section for a distance of 1331.33 feet, to a point; thence
North 01(Degree) 27' 21" West along the East line of the West 1/2 of said 1/4
Section for a distance of 1098.55 feet, to the point of beginning, thence
continuing along said East line, North 01(Degree) 27' 21" West for a distance of
733.61 feet, to a point; thence North 99(Degree) 41' 02" West for a distance of
632.40 feet, to a point; thence South 01(Degree) 26' 43" East for a distance of
736.59 feet, to a point; thence South 88(Degree) 57' 16" East for a distance of
632.45 feet, to the point of beginning. Said land being in the Village of
Sturtevant, County of Racine, State of Wisconsin.
Tax Key No.: Part of 51-181-03-22-16-420-300
(Tax Key No. for 1996: 51-181-03-22-16-420-320)
PARCEL II: Parcel 1, Certified Survey Map No. 1126, recorded in the office of
the Register of Deeds for Racine County, Wisconsin, on April 18, 1986 in Volume
3 of Certified Survey Maps, at Page 314, as Document No. 1191396, being a part
of the Northeast 1/4 of the Southeast 1/4 of Section 16, Township 3 North, Range
22 East. Said land being in the Village of Sturtevant, County of Racine, State
of Wisconsin.
Tax Key No.: 51-181-03-22-16-002-050.
[End of Exhibit 1]
<PAGE> 63
EXHIBIT 2
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
PERMITTED ENCUMBRANCES
1. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
2. Any matters of record affecting the premises on the date this Mortgage
is recorded.
3. Zoning ordinances, if any.
[End of Exhibit 2]
<PAGE> 64
EXHIBIT B
FORM OF
RUUD SECOND MORTGAGE
<PAGE> 65
Exhibit B
DOCUMENT NO.
PARCEL IDENTIFICATION NUMBER:
================================================================================
================================================================================
RUUD LIGHTING, INC.
AS THE MORTGAGOR
TO
NATIONAL CITY BANK
AS THE COLLATERAL AGENT
--------------------------------
SECOND MORTGAGE,
ASSIGNMENT OF LEASES
AND
SECURITY AGREEMENT
(TOTAL SECURED OBLIGATIONS NOT TO EXCEED $185,000,000,
PLUS CERTAIN OTHER AMOUNTS REFERRED TO HEREIN)
DATED AS OF
FEBRUARY 16, 1999
--------------------------------
Relating to Property Located at 9201 Washington Avenue, Racine, Wisconsin
================================================================================
================================================================================
<PAGE> 66
SECOND MORTGAGE, ASSIGNMENT OF LEASES AND
SECURITY AGREEMENT
(TOTAL SECURED OBLIGATIONS NOT TO EXCEED $185,000,000.
PLUS CERTAIN OTHER AMOUNTS REFERRED TO HEREIN)
THIS SECOND MORTGAGE, ASSIGNMENT OF LEASES AND SECURITY AGREEMENT,
dated as of February 16, 1999 (as amended, modified, or supplemented from time
to time, "THIS MORTGAGE"), by (i) RUUD LIGHTING, INC., a Wisconsin corporation
(hereinafter, together with its successors and assigns, called the "MORTGAGOR")
which is duly qualified to transact business in the jurisdiction in which the
real property referred to below is located, whose address is 9201 Washington
Avenue, Racine, Wisconsin 54406, in favor of (ii) NATIONAL CITY BANK, a national
banking association, as collateral agent under the Credit Agreement referred to
below (herein, together with its successors and assigns in such capacity, the
"COLLATERAL AGENT"), whose address is 1900 East Ninth Street, Cleveland, Ohio
44114, for the benefit of the Secured Creditors (as defined below):
PRELIMINARY STATEMENTS:
(A) Except as otherwise defined herein, terms used herein and defined
in the Credit Agreement (as defined below) shall be used herein as therein
defined.
(B) This Mortgage is made pursuant to the Credit Agreement, dated as
of January 2, 1998, as amended (herein, as heretofore and hereafter amended
or otherwise modified, restated or replaced from time to time, the "CREDIT
AGREEMENT"), among Advanced Lighting Technologies, Inc., an Ohio corporation
(herein, together with its successors and assigns, the "BORROWER"), the
financial institutions named as lenders therein (herein, together with their
successors and assigns, the "LENDERS"), and National City Bank, as the
Administrative Agent for the Lenders under the Credit Agreement, providing,
among other things, for loans or advances or other extensions of credit to or
for the benefit of the Borrower of up to $85,000,000, with such loans or
advances being evidenced by promissory notes (the "CREDIT FACILITY NOTES",
such term to include all notes and other securities issued in exchange
therefor or in replacement thereof).
(C) The Mortgagor is a Subsidiary of the Borrower and will derive
financial benefit from the loans or advances or other extensions of credit made
to the Borrower pursuant to the Credit Agreement.
(D) The Borrower or any of its Subsidiaries may from time to time be
party to one or more Designated Hedge Agreements (as defined in the Credit
Agreement). Any institution that participates, and in each case their subsequent
assigns, as a counterparty to any Designated Hedge Agreement (collectively, the
"DESIGNATED HEDGE CREDITORS").
(E) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor
(including the Mortgagor, as one of the Subsidiary Guarantors) has jointly and
severally guaranteed to the Administrative Agent, the Lenders and the Designated
Hedge Creditors the payment when due of the Guaranteed Obligations (as defined
in the Subsidiary Guaranty).
(F) The Mortgagor has heretofore entered into a First Mortgage,
Assignment of Leases and Security Agreement, dated as of February 1, 1999, with
the Collateral Agent (as from time to time, amended, supplemented, modified or
replaced, the "FIRST MORTGAGE"), as security for a portion of the amounts from
time to time owed to the Administrative Agent, the Lenders and the Designated
Hedge Creditors under the Credit Agreement, the Credit Facility Notes, the
Designated Hedge Agreements and certain other agreements and instruments
referred to therein, which First Mortgage covers the same properties, rights and
interests of the Mortgagor which are subject to this Mortgage. This Mortgage is
subject, junior and subordinate in all respects to the First Mortgage, all as
herein provided.
<PAGE> 67
(G) The Borrower has entered into an Indenture, dated as of March 18,
1998, as heretofore supplemented by First Supplemental Indenture, dated as of
September 25, 1998 (such Indenture, as so supplemented and as hereafter amended,
supplemented, modified or replaced, the "SENIOR NOTE INDENTURE"), with The Bank
of New York, as Trustee (herein, together with its successors and assigns in
such capacity, the "SENIOR NOTE TRUSTEE"), pursuant to which the Borrower has
issued $100,000,000 aggregate original principal amount of its 8% Senior Notes
due 2008 (the "SENIOR NOTES", such term to include all notes and other
securities issued in exchange therefor or in replacement thereof). The holders
from time to time of the Borrower's Senior Notes are referred to herein as the
"SENIOR NOTE CREDITORS", and the Senior Notes, the Senior Note Indenture, and
any other supplemental indenture, guaranty or other agreement or instrument
related thereto are herein referred to individually as a "SENIOR NOTE DOCUMENT"
and collectively as the "SENIOR NOTE DOCUMENTS".
(H) The Indenture permits the Mortgagor to enter into this Mortgage if
the Senior Notes and all other amounts due under the Senior Note Indenture are
directly secured equally and ratably with all other obligations and liabilities
secured hereby.
(I) The Administrative Agent, the Collateral Agent, the Lenders, the
Designated Hedge Creditors, the Senior Note Trustee and the Senior Note
Creditors (collectively the "SECURED CREDITORS"), shall benefit hereunder as
herein provided.
(J) The Credit Documents, the Designated Hedge Agreements and the
Senior Note Documents are herein sometimes referred to collectively as the
"SECURED DEBT DOCUMENTS" and individually as a "SECURED DEBT DOCUMENT".
(K) It is a condition precedent to the making of Loans and the issuance
of, and participation in, Letters of Credit under the Credit Agreement that the
Mortgagor shall have executed and delivered to the Collateral Agent this
Mortgage.
(L) The Mortgagor desires to execute this Mortgage to satisfy the
condition described in the preceding paragraph.
(M) The execution and delivery of this Mortgage has been duly
authorized by the Mortgagor, and all things necessary to make this Mortgage a
valid, binding and legal instrument according to its terms, have been done and
performed.
NOW, THEREFORE, in consideration of the sum of $1.00, and other good
and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, received to the Mortgagor's full satisfaction from the
Collateral Agent, and in consideration of the payments or loans or advances or
other credit facilities made or to be made hereafter to or for the benefit of
the Borrower by the Lenders, the Mortgagor DOES HEREBY grant, bargain, sell,
MORTGAGE, WARRANT, CONVEY, alien, remise, release, assign, transfer, grant a
security interest in, set over, deliver, confirm and convey unto the Collateral
Agent, its successors and assigns, for the benefit of the Secured Creditors,
equally and ratably, upon the terms and conditions of this Mortgage, with power
of sale, each and all of the real properties and interests in real properties,
and DOES HEREBY FURTHER grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Creditors, equally and ratably, a
security interest in and to all other property and interests, described in the
following Granting Clauses (all of such property and interests hereinafter
collectively called the "MORTGAGED PROPERTY"):
GRANTING CLAUSES
All the estate, right, title and interest of the Mortgagor in,
to and under, or derived from:
2
<PAGE> 68
GRANTING CLAUSE FIRST
LAND
All those certain lot(s), piece(s) or parcel(s) of land more
particularly described in Exhibit 1 attached hereto and made a part
hereof, as the description of the same may be amended or supplemented
from time to time and all and the reversions or remainders in and to
said land and the tenements, hereditaments, easements, rights-of-way or
use, rights (including alley, drainage, crop, timber and cutting,
agricultural, horticultural, mineral, water, oil and gas rights),
privileges, royalties and appurtenances to said land, now or hereafter
belonging or in anywise appertaining thereto, including any such right,
title, interest in, to or under any agreement or right granting,
conveying or creating, for the benefit of said land, any easement,
right or license in any way affecting other property and in, to or
under any streets, ways, alleys, vaults, gores or strips of land
adjoining said land or any parcel thereof, or in or to the air space
over said land, all rights of ingress and egress by motor vehicles to
parking facilities on or within said land, and all claims or demands of
the Mortgagor, either at law or in equity, in possession or expectancy,
of in or to the same (all of the foregoing hereinafter collectively
called the "LAND").
GRANTING CLAUSE SECOND
IMPROVEMENTS
All buildings, structures and other improvements now or
hereafter located on the Land, and all appurtenances and additions
thereto and betterments, renewals, substitutions and replacements
thereof, owned by the Mortgagor or in which the Mortgagor has or shall
acquire an interest (all of the foregoing hereinafter collectively
called the "IMPROVEMENTS").
GRANTING CLAUSE THIRD
FIXTURES AND EQUIPMENT
Without limitation of the foregoing Granting Clauses, (i) all
"FIXTURES" (as defined in the Uniform Commercial Code of the State in
which the Land is located), (ii) all "EQUIPMENT" (as defined in the
Uniform Commercial Code of the State in which the Land is located),
(iii) all other fixtures, chattels and articles of personal property
(other than "inventory", as defined in the Uniform Commercial Code of
the State in which the Land is located), and (iv) all additions,
betterments, improvements, modifications, renewals, alterations,
repairs, attachments, parts, accessories, appurtenances, substitutions
and replacements of or to any of the foregoing, in each case now or
hereafter owned or otherwise acquired by the Mortgagor or in which the
Mortgagor now has or shall hereafter acquire an interest, wherever
situated, and now or hereafter located on, attached or affixed to,
contained in or used in connection with, the properties referred to in
Granting Clause First or Granting Clause Second, or placed on any part
thereof, though not attached or affixed thereto, including, without
limitation, all of the following: (1) all automobiles, trucks and
trailers, and all other automotive or transportation vehicles and
equipment; (2) all machines and machinery and other apparatus; (3) all
engines and motors; (4) all lathes; (5) all drill presses, punch
presses and other presses; (6) all sorting, assembly, installation and
production line equipment; (7) all robotic equipment, devices and
systems; (8) all boilers, turbines, stokers, smelters, electric arc
furnaces, ladle arc furnaces, reheat furnaces and/or other furnaces and
related equipment; (9) all rolling mills, coilers and cooling beds;
(10) all stamping, cutting, drilling, jigging, bending, shaping,
fitting, molding, milling, injection, sizing, patterning, fastening,
connecting, heat treating, galvanizing, painting, embossing, coloring,
identification, measuring, monitoring, quality assurance, finishing
and/or processing machines, equipment and systems; (11) all fabrication
equipment and systems; (12) all packaging, receiving and shipping
equipment and systems; (13) all scales; (14) all
3
<PAGE> 69
counting, measurement, testing, monitoring, calibration and analytical
devices, equipment and systems; (15) all design and quality assurance
or control equipment (including robotics); (16) all welding equipment
and systems; (17) all soldering equipment and systems; (18) all
hydraulic equipment and hydraulics; (19) all tooling, dies, jigs,
casts, molds, patterns, models, stencils and drawings; (20) all
generators, transformers, switches, substations, pumps, compressors,
dynamos and batteries; (21) all cranes and hoists; (22) all conveyors;
(23) all computers; (24) all computer monitors, drives, servers, and
other hardware and software (whether owned, leased or licensed); (25)
all computing equipment; (26) all electronic data processing equipment;
(27) all operating and maintenance manuals, as well as all plans,
specifications and operating instructions, for all equipment and
fixtures; (28) all gas, oil kerosene and other fuels; (29) all
industrial gases and containers therefor; (30) all consumable supplies;
(31) all spare parts, replacement parts, appliances, utensils, tools,
implements and fittings; (32) all repair and maintenance equipment;
(33) all tanks (whether free standing, anchored or otherwise installed
in place, readily movable, above or below ground, or otherwise), drums,
vessels, containers, racks, pallets, skids, bins and shelves or
shelving; (34) all forklifts, liftrucks, pallet movers, dollies, carts,
and other materials handling equipment; (35) all shipping containers;
(36) all rail cars; (37) all pipelines, pipes, ducts and conduits; (38)
all wiring and all electric or other power surge or interruption
protection equipment; (39) all water and other towers; (40) all call
systems, dispatch systems, public address systems, switchboards,
telephones, mobile phones, beepers, two-way (or more) radios, aerials,
antennas and other telecommunication, teleconferencing (including
video) and other communication equipment; (41) all desks, tables,
cabinets, bureaus, credenzas, chairs, benches, couches, coat racks,
safes and vaults, photocopy machines, facsimile, telex and cable
machines, postage meters, televisions, video machines, radios, coffee,
soft drink, beverage and fast food machines, lockers, bulletin boards,
photographs, works of art and other decorations, lawn ornaments, signs,
plants and shrubbery (both indoor and outdoor), sinks, basins, stoves,
ranges, microwaves, ovens, dishwashers, refrigerators, ice makers,
cafeteria equipment and supplies, wash tubs, showers, partitions,
screens, awnings, shades, blinds, curtains, draperies, carpets, rugs,
furniture and furnishings; (42) all heating, lighting, power, plumbing,
water, ventilating, cooling, air conditioning, refrigerating, gas, oil,
steam, electrical, solar, waste, incinerating and/or compacting plants,
systems, fixtures and equipment; (43) all elevators and escalators;
(44) all vacuum and other cleaning systems including window washing
equipment; (45) all lawn, parking and sidewalk maintenance equipment,
including lawn mowers, leaf blowers, snow blowers, plows and vacuums;
(46) all dust and noise suppression systems and equipment; (47) all
air, water and other pollution control systems and equipment; (48) all
safety systems and equipment; (49) all office supplies; (50) all
industrial hygiene equipment and supplies; (51) all security alarms and
cameras, and all identification, timekeeping, access and surveillance
systems and equipment; and (52) all sprinkler systems and other fire
detection, prevention and extinguishing apparatus. If the Lien of this
Mortgage in any item of Fixtures and Equipment is subject to a purchase
money or other security interest therein which is permitted under this
Mortgage, then all of the right, title and interest of the Mortgagor in
and to such item is hereby assigned to the Collateral Agent, together
with the benefits of all deposits and payments now or hereafter made
thereon by or on behalf of the Mortgagor (all of the foregoing
property, rights and interests described in this Granting Clause Third,
collectively the "FIXTURES AND EQUIPMENT").
GRANTING CLAUSE FOURTH
PERMITS, LICENSES AND FRANCHISES AND GENERAL INTANGIBLES
Without limitation of the foregoing Granting Clauses, all
permits, licenses, franchises, privileges, grants, consents,
exemptions, concession agreements, development rights, building
variances, certificates of occupancy or operation, and other
authorizations or approvals, now or hereafter issued or granted by any
governmental authority with respect to the ownership of the Mortgaged
Property, or with respect to the ownership, construction or operation
of the Mortgaged
4
<PAGE> 70
Property, and all "GENERAL INTANGIBLES" (as defined in the Uniform
Commercial Code of the State in which the Land is located) relating in
any way to the Mortgaged Property or the use or operation thereof,
together with and any renewals or extensions of any of the foregoing,
provided that the lien of this Mortgage shall not apply to, and there
shall be excluded from the ambit of this Granting Clause Fourth, any of
the foregoing permits, licenses, franchises, privileges, grants,
consents, exemptions, concession agreements, development rights,
building variances, certificates of occupancy or operation, and other
authorizations or approvals and any other "general intangibles", which,
by their express terms or by reason of applicable law would become void
or voidable if mortgaged, pledged or assigned by the Mortgagor
hereunder.
GRANTING CLAUSE FIFTH
LEASEHOLD AND OTHER CONTRACTUAL INTERESTS
All the leases, lettings and licenses of, and all other
contracts and agreements affecting, the Land, the Improvements, the
Fixtures and Equipment and/or any other property or rights mortgaged or
otherwise conveyed or encumbered hereby, or any part thereof, now or
hereafter entered into, and all amendments, modifications, supplements,
additions, extensions and renewals thereof, and all right, title and
interest of the Mortgagor thereunder, including cash and securities
deposited thereunder, the right to receive and collect the rents,
income, proceeds, issues and profits payable thereunder and the rights
to enforce, whether at law or in equity or by any other means, all
provisions and options thereof.
GRANTING CLAUSE SIXTH
ASSIGNMENT OF RENTS, INCOME AND PROFITS
All rents, income, profits, proceeds and any and all cash
collateral to be derived from the Mortgaged Property, or the use and
occupation thereof, or under any contract or bond relating to the
construction or reconstruction of the Mortgaged Property, including all
rents, royalties, revenue, rights, deposits (including security
deposits) and benefits accruing to the Mortgagor under all leases now
or hereafter covering the Mortgaged Property, whether before or after
foreclosure or during the full period of redemption, if any, and the
right to receive the same and apply them against the Secured
Obligations or against the Mortgagor's other obligations hereunder,
together with all contracts, bonds, leases and other documents
evidencing the same now or hereafter in effect and all rights of the
Mortgagor thereunder. Nothing contained in the preceding sentence shall
be construed to bind the Collateral Agent to the performance of any of
the provisions of any such contract, bond, lease or other document or
otherwise impose any obligation upon the Collateral Agent (including
any liability under a covenant of quiet enjoyment contained in any
lease or under applicable law in the event that any tenant shall have
been joined as a party defendant in any action to foreclose this
Mortgage and shall have been foreclosed of all right, title and
interest and all equity of redemption in the Mortgaged Property),
except that the Collateral Agent shall be accountable for any money
actually received pursuant to such assignment. The assignment of said
rents, income, profits, proceeds and cash collateral, and of the
aforesaid rights with respect thereto and to the contracts, bonds,
leases and other documents evidencing the same is intended to be and is
an absolute present assignment from the Mortgagor to the Collateral
Agent and not merely the passing of a security interest.
5
<PAGE> 71
GRANTING CLAUSE SEVENTH
OTHER AND AFTER ACQUIRED PROPERTY
Any and all moneys and other property, of every kind and
nature, which may from time to time be subjected to the lien hereof by
the Mortgagor, through a supplement to this Mortgage or otherwise, or
by any other person or entity, or which may come into the possession of
or be subject to the control of the Collateral Agent, it being the
intention and agreement of the Mortgagor that all property hereafter
acquired or constructed by the Mortgagor shall forthwith upon
acquisition or construction thereof by the Mortgagor and without any
act or deed by the Mortgagor be subject to the lien and security
interest of this Mortgage as if such property were now owned by the
Mortgagor and were specifically described in this Mortgage and conveyed
or encumbered hereby or pursuant hereto, and the Collateral Agent is
hereby authorized to receive any and all such property as and for
additional security hereunder.
GRANTING CLAUSE EIGHTH
PROCEEDS AND AWARDS
All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by the Mortgagor, all
proceeds of the conversion, voluntary or involuntary, of any of the
property described in these Granting Clauses into cash or other
liquidated claims, including proceeds of hazard, title and other
insurance, and all claims, entitlements, judgments, damages, awards,
settlements and compensation (including interest thereon) heretofore or
hereafter accruing or made to or for the benefit of the present and all
subsequent owners of the Land, the Improvements, the Fixtures and
Equipment and/or any other property or rights encumbered or conveyed
hereby for any injury to or decrease in the value thereof for any
reason, or by any governmental or other lawful authority for the taking
by eminent domain, condemnation or otherwise of all or any part
thereof, including awards for any change of grade of streets.
TO HAVE AND TO HOLD the Mortgaged Property unto the Collateral Agent,
its successors and assigns, for the benefit of the Secured Creditors, equally
and ratably, forever, for the purposes and uses herein set forth, until such
time as all of the Secured Obligations which are secured hereby shall have been
paid in full.
The property, interests and rights hereinabove mentioned, whether owned
in fee or held under lease, is hereinafter referred to as the "REAL PROPERTY
COLLATERAL" to the extent that the same is realty, and as the "PERSONAL PROPERTY
COLLATERAL" to the extent that the same is personalty. The Real Property and the
Personal Property Collateral collectively constitute the Mortgaged Property.
It is also agreed that if any of the property herein mortgaged is of a
nature so that a security interest therein can be perfected under the Uniform
Commercial Code, this Mortgage shall constitute a security agreement and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Collateral Agent may require
from time to time to perfect or renew such security interest under the Uniform
Commercial Code. This Mortgage shall be effective as a financing statement filed
as a fixture filing with respect to all fixtures included within the Mortgaged
Property and is to be filed for record in the Office of the County Recorder or
County Clerk where the Land (including such fixtures) is situated. The mailing
address of the Mortgagor is set forth at the beginning of this Mortgage and the
address of the Collateral Agent from which information concerning the security
interest may be obtained is the address of the Collateral Agent set forth at the
beginning of this Mortgage.
If the Mortgagor hereafter acquires any real property, or any interest
in real property, in addition to the Real Property Collateral, which is adjacent
to, or contiguous with, the Land, or otherwise is intended or required to be
6
<PAGE> 72
subjected to the lien of this Mortgage, the Mortgagor will subject the same to
the lien of this Mortgage by instrument supplemental hereto, satisfactory in
form and substance to the Collateral Agent.
The conditions of this Mortgage are such that the Mortgagor has
executed and delivered this Mortgage for the purpose of securing the performance
of its covenants and agreements contained herein and in any agreement or
instrument made with respect to any Secured Obligations secured hereby and to
secure the payment when due (whether at the stated maturity, by acceleration or
otherwise) of the following indebtedness, liabilities and obligations (including
obligations which, but for the automatic stay under section 362(a) of the
Bankruptcy Code, would become due), now existing or hereafter arising
(collectively, the "SECURED OBLIGATIONS"), for the benefit of the Secured
Creditors, equally and ratably:
(a) all of the following obligations and liabilities
(collectively, the "CREDIT DOCUMENT OBLIGATIONS"): (i) up to
$85,000,000 aggregate principal amount of Loans made or to be made to
the Borrower under the Credit Agreement, maturing on or before December
31, 2000, with interest thereon as provided in the Credit Agreement, as
guaranteed by the Mortgagor pursuant to the Subsidiary Guaranty; (ii)
all reimbursement obligations in respect of Letters of Credit issued
under the Credit Agreement in an aggregate amount not exceeding
$15,000,000, as guaranteed by the Mortgagor pursuant to the Subsidiary
Guaranty; and (iii) all other liabilities, obligations and indebtedness
of the Borrower, its Subsidiaries and Affiliates, and/or any other
Credit Party, including, without limitation, the Mortgagor, incurred
under or arising out of or in connection with the Credit Agreement, the
Credit Facility Notes, and the other Credit Documents, and the due
performance and compliance by the Borrower, its Subsidiaries and
Affiliates, and any other Credit Party, including, without limitation,
the Mortgagor, with all of the terms, conditions, covenants and
agreements contained in the Credit Agreement, the Credit Facility
Notes, and such other Credit Documents;
(b) all obligations and liabilities of the Borrower or any
Subsidiary of the Borrower under or in connection with any Designated
Hedge Agreement, now or hereafter entered into with or assigned to any
of the Secured Creditors (all such obligations and liabilities
described in this clause (b) being herein collectively called the
"DESIGNATED HEDGE OBLIGATIONS"), as guaranteed by the Mortgagor
pursuant to the Subsidiary Guaranty;
(c) all of the following obligations and liabilities
(collectively, the "SENIOR NOTE DOCUMENT OBLIGATIONS"): (i)
$100,000,000 aggregate original principal amount of Senior Notes issued
by the Borrower under the Senior Note Indenture, maturing on or before
September 15, 2008, with interest thereon as provided in the Senior
Notes and the Senior Note Indenture, as the same may be guaranteed by
the Mortgagor; and (ii) all other liabilities, obligations and
indebtedness of the Borrower, its Subsidiaries and Affiliates,
including, without limitation, the Mortgagor, incurred under or arising
out of or in connection with the Senior Note Indenture, the Senior
Notes, and the other Senior Note Documents, and the due performance and
compliance by the Borrower, its Subsidiaries and Affiliates, including,
without limitation, the Mortgagor, with all of the terms, conditions,
covenants and agreements contained in the Senior Note Indenture, the
Senior Notes, and such other Senior Note Documents;
(d) all advances or disbursements of the Collateral Agent or
any Secured Creditor with respect to the Mortgaged Property for the
payment of taxes, levies, assessments, insurance, insurance premiums or
costs incurred in the protection of the Mortgaged Property, and without
limitation of the preceding provisions of this clause (d), all other
sums expended or advanced by or on behalf of the Collateral Agent
pursuant to any term or provision of this Mortgage or any other
agreement or instrument relating to or securing any of the foregoing
for the purpose of protecting or preserving the Mortgaged Property or
the priority of the Lien of this Mortgage, including, all advances or
disbursements of the Collateral Agent for the payment of taxes, levies,
assessments, insurance, insurance premiums or costs incurred in the
protection of the Mortgaged Property;
7
<PAGE> 73
BUT ONLY TO THE EXTENT THAT the total unpaid balance of the Secured Obligations
which are secured at any one time by this Mortgage, shall not exceed
$185,000,000, PLUS (i) interest thereon, (ii) any advances or disbursements made
for the payment of taxes, levies or insurance on the Mortgaged Property with
interest on such advances and disbursements, and (iii) costs and expenses of
enforcement of this Mortgage.
In accordance with the provisions of the Credit Facility Notes, the
whole of the principal sum of the Loans which are then unpaid may be declared
and become due and payable upon the occurrence of an Event of Default under and
as defined in the Credit Agreement.
In accordance with the provisions of the Senior Note Indenture, the
whole of the principal sum of the Senior Notes which is then unpaid may be
declared and become due and payable upon the occurrence of an Event of Default
under and as defined in the Senior Note Indenture.
This Mortgage is given for the purpose of creating a lien on the
Mortgaged Property and expressly is to secure the Secured Obligations, for the
benefit of the Secured Creditors, including but not limited to future advances
and other extensions of credit, whether such advances or other extensions of
credit are obligatory or to be made at the option of the Secured Creditors (or
any of them) or otherwise, to the same extent as if such future advances or
other extensions of credit were made on the date of the execution of this
Mortgage. The total amount of the Secured Obligations may decrease or increase
from time to time and the Lenders or other Secured Creditors may hereafter, as
described in this Mortgage, at any time after this Mortgage is delivered to the
county recorder or county clerk for record, make additional loans, advances or
other extensions of credit to or for the benefit of the Borrower or any of its
Subsidiaries or Affiliates; PROVIDED, HOWEVER, that notwithstanding anything to
the contrary contained in this Mortgage, the total unpaid balance of the Secured
Obligations which are secured at any one time by this Mortgage, shall not exceed
$185,000,000, PLUS (i) interest thereon, (ii) any advances or disbursements made
for the payment of taxes, levies or insurance on the Mortgaged Property with
interest on such advances and disbursements, and (iii) costs and expenses of
enforcement of this Mortgage.
PROVIDED, NEVERTHELESS, that if the Secured Obligations which are
secured hereby shall be paid in full when due, and if all of the provisions of
the Credit Agreement, the Credit Facility Notes, the Senior Notes and the other
Secured Debt Documents shall be timely performed and observed, then the lien of
this Mortgage and the interest of the Collateral Agent in the Mortgaged Property
shall be released at the cost of the Mortgagor, but this Mortgage shall
otherwise, except as specifically provided herein, remain in full force and
effect.
The Mortgagor, intending to bind its successors and assigns, hereby
covenants and agrees with the Collateral Agent, its successors and assigns, for
its benefit and for the benefit of the Secured Creditors, as follows:
SECTION 1. PAYMENT OF SECURED OBLIGATIONS,
PERFORMANCE OF OBLIGATIONS, ETC.
(a) PAYMENT OF SECURED OBLIGATIONS. The Mortgagor shall pay or cause to
be paid all amounts payable by it under each other Secured Debt Document to
which it is a party.
(b) PERFORMANCE OF OTHER OBLIGATIONS. The Mortgagor will keep and
perform or cause to be kept and performed all other covenants, agreements,
conditions and stipulations contained in the other Secured Debt Documents which
are binding on or otherwise applicable to the Mortgagor.
(c) WAIVER OF ACCEPTANCE, ETC. The Mortgagor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations and this Mortgage and any requirement that the Collateral
Agent or any Secured Creditor protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against any other person, or any collateral, or pursue any other
remedy in the power of the Collateral Agent or any other Secured Creditor.
8
<PAGE> 74
SECTION 2. TITLE TO PREMISES, PROTECTION
OF LIEN OF MORTGAGE, ETC.
(a) TITLE TO MORTGAGED PROPERTY, ETC. The Mortgagor represents to and
covenants with the Collateral Agent, its successors and assigns, that (i) the
Mortgagor has and will have good, marketable and insurable fee simple title to
the Land, free and clear of all liens, charges and encumbrances of every kind
and character, SUBJECT ONLY to Permitted Encumbrances; (ii) the Mortgagor has
and will have full corporate power and lawful authority to encumber and convey
the Mortgaged Property as provided herein; (iii) the Mortgagor owns and will own
all of the Fixtures and Equipment, free and clear of all liens, charges and
encumbrances of every kind and character, SUBJECT ONLY to Permitted
Encumbrances; (iv) this Mortgage is and will remain a valid and enforceable
first priority lien on, and first priority security interest in, the Mortgaged
Property, SUBJECT ONLY to Permitted Encumbrances; and (v) the Mortgagor hereby
warrants and will forever warrant and defend such title and the validity,
enforceability and priority of the lien and security interest hereof against the
claims of all persons and parties whomsoever.
(b) PROTECTION OF LIEN; DEFENSE OF ACTION. If the lien, security
interest, validity or priority of this Mortgage, or if title or any of the
rights of the Mortgagor or the Collateral Agent in or to the Mortgaged Property,
shall be endangered or questioned, or shall be attacked directly or indirectly,
or if any action or proceeding is commenced, to which action or proceeding the
Collateral Agent is made a party by reason of the execution of this Mortgage, or
in which it becomes necessary to defend or uphold the lien of this Mortgage, or
the priority thereof or possession of the Mortgaged Property, or otherwise to
perfect the security hereunder, or if any suit, action, legal proceeding or
dispute of any kind is commenced in which the Collateral Agent is made a party
or appears as party plaintiff or defendant, affecting the interest created
herein, or the Mortgaged Property, including, but not limited to, bankruptcy,
probate and administration proceedings, other foreclosure proceedings or any
condemnation action involving the Mortgaged Property, then the Mortgagor will
promptly notify the Collateral Agent thereof (unless the Collateral Agent has
initiated or been served with process in respect thereof) and the Mortgagor will
diligently endeavor to cure any defect which may be developed or claimed, and
will take all necessary and proper steps for the defense of such action or
proceeding, including the employment of counsel, the prosecution or defense of
litigation and, subject to the Collateral Agent's approval, the compromise,
release or discharge of any and all adverse claims. The Collateral Agent
(whether or not named as a party to such actions or proceedings), is hereby
authorized and empowered (but shall not be obligated) to take such additional
steps as it may deem necessary or proper for the prosecution, defense and
control of any such action or proceeding or the protection of the lien, security
interest, validity or priority of this Mortgage or of such title or rights,
including the employment of counsel, the prosecution or defense of litigation,
the compromise, release or discharge of such adverse claims, the purchase of any
tax title and the removal of prior liens and security interests. The Mortgagor
shall, on demand, reimburse the Collateral Agent for all expenses (including
attorneys' fees and disbursements) incurred by it in connection with the
foregoing matters, and the person incurring such expenses shall be subrogated to
all rights of the person receiving such payment. All such costs and expenses of
the Collateral Agent, until reimbursed by the Mortgagor, shall be part of the
Secured Obligations and shall be deemed to be secured by this Mortgage.
SECTION 3. TAXES AND IMPOSITIONS.
(a) TAXES ON THE MORTGAGED PROPERTY. The Mortgagor will pay when due,
and before any penalty, interest or cost for non-payment thereof may be added
thereto, all taxes, assessments, vault, water and sewer rents, rates, charges
and assessments, levies, permits, inspection and license fees and other
governmental and quasi-governmental charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, heretofore or hereafter assessed, levied
or otherwise imposed against or upon, or which may become a Lien upon, the
Mortgaged Property or any part thereof or any appurtenance thereto, or the
revenues, rents, issues, income and profits of the Mortgaged Property or arising
in respect of the occupancy, use or possession thereof (collectively,
"IMPOSITIONS"). The Mortgagor will also pay any penalty, interest or cost for
non-payment of Impositions which may become due and payable, and such penalties,
interest or cost shall be included within the term Impositions.
9
<PAGE> 75
(b) RECEIPTS. Unless the Mortgagor is making monthly deposits with the
Collateral Agent pursuant to section 4, or unless the Collateral Agent otherwise
directs, the Mortgagor will furnish to the Collateral Agent, upon its request,
proof of payment at the time same is made, and thereafter, upon receipt,
validated receipts showing payment in full of all Impositions.
(c) INCOME AND OTHER TAXES. The Mortgagor will promptly pay all income,
franchise and other taxes owing by the Mortgagor, and any stamp taxes which may
be required to be paid in connection with the Secured Obligations, this Mortgage
or any other Secured Debt Document, together with any interest or penalties
thereon, and the Mortgagor will pay any and all taxes, charges, filing,
registration and recording fees, excises and levies imposed upon the Collateral
Agent, the Administrative Agent or the Secured Creditors by reason of execution
of the Credit Agreement, the Notes, this Mortgage, or any of the other Secured
Debt Documents, or ownership of this Mortgage or any mortgage supplemental
hereto, any security instrument with respect to any Fixtures and Equipment or
any instrument of further assurance.
(d) BRUNDAGE CLAUSE. In the event of the enactment after the date
hereof of any law in the State in which the Land is located or any other
governmental entity deducting from the value of the Mortgaged Property for the
purpose of taxation any lien or security interest thereon, or changing in any
way the laws for the taxation of mortgages, deeds of trust or other liens or
debts secured thereby, or the manner of collection of such taxes, so as to
affect this Mortgage, the Secured Obligations, the Collateral Agent, the
Administrative Agent or any of the Secured Creditors, THEN, and in such event,
the Mortgagor shall, on demand, pay to (or reimburse) the Collateral Agent, the
Administrative Agent or such Secured Creditors, the amount of all taxes,
assessments, charges or liens for which the Collateral Agent, the Administrative
Agent or any of the Secured Creditors is or may be liable as a result thereof,
PROVIDED that if any such payment or reimbursement shall be unlawful or would
constitute usury or render the Secured Obligations wholly or partially usurious
under applicable law, then the Collateral Agent may, at its option, declare the
Secured Obligations immediately due and payable or require the Mortgagor to pay
or reimburse the Collateral Agent, the Administrative Agent or any of the
Secured Creditors for payment of the lawful and non-usurious portion thereof.
(e) RIGHT TO CONTEST IMPOSITIONS. Notwithstanding anything to the
contrary contained in this section 3, the Mortgagor shall have the right to
protest and/or contest any Imposition imposed upon the Mortgaged Property or any
part thereof, PROVIDED THAT AND SO LONG AS (1) the same is done by the Mortgagor
upon prior written notice to the Collateral Agent and at the Mortgagor's sole
cost and expense and with due diligence and continuity so as to resolve such
protest and/or contest as promptly as possible; (2) neither the Mortgaged
Property nor any part thereof is or will be in immediate danger of being
forfeited or lost by reason of such protest or contest; (3) if required by the
Collateral Agent, the Mortgagor shall establish a reserve or other security with
the Collateral Agent in an amount and in form and substance satisfactory to the
Collateral Agent for application to the cost of curing or removing the same from
record pursuant to clause (4) below; (4) in any event, each such contest shall
be concluded and the tax assessment, penalties, interest and costs shall be paid
prior to the date such judgment becomes final or any writ or order is issued
under which the Mortgaged Property may be sold pursuant to such judgment; and
(5) the Mortgagor agrees in writing to indemnify and hold harmless the
Collateral Agent and the Secured Creditors from and against any and all
expenses, claims, demands, obligations, liabilities, suits, actions and
penalties upon or arising out of such protest and/or contest. Pending the
determination of any such protest or contest, the Mortgagor shall not be
obligated to pay any such Imposition unless nonpayment of such Imposition will
subject the Mortgaged Property or any part thereof to sale or other liability or
forfeit by reason of non-payment. In addition, to the extent that the same may
be permitted by law, the Mortgagor shall have the right to apply for the
conversion of any Imposition to make the same payable in annual installments
over a period of years, and upon such conversion the Mortgagor shall be
obligated only to pay and discharge said periodic installments as required by
this section 3.
10
<PAGE> 76
SECTION 4. TAX AND INSURANCE DEPOSITS.
(a) AMOUNT OF DEPOSITS. To further secure the Mortgagor's obligations
under sections 3 and 10, but not in lieu thereof, the Collateral Agent, at its
option, following the occurrence and during the continuance of an Event of
Default, may at any time after the Lien of the First Mortgage has been
terminated and discharged, require that the Mortgagor deposit with the
Collateral Agent, monthly on the first day of each month, a sum equal to
one-twelfth (1/12) of the estimated annual cost of all Impositions levied on the
Mortgaged Property, and a sum equal to one-twelfth (1/12) of the estimated
annual insurance premiums required to keep the Improvements and the Fixtures and
Equipment insured as required by section 10 hereof, and the Mortgagor shall,
accordingly, make such deposits. In addition, if so required by the Collateral
Agent, the Mortgagor shall also deposit with the Collateral Agent a sum of money
which, together with the aforesaid monthly installments, will be sufficient to
make each of said payments of Impositions and premiums, at least 10 days before
such payments are due. If the amount of any such payments is not ascertainable
at the time any such deposit is required to be made, the deposit shall be made
on the basis of the Collateral Agent's estimate thereof, and, when such amount
is fixed for the then-current year, the Mortgagor shall promptly deposit any
deficiency with the Collateral Agent.
(b) USE OF DEPOSITS. All funds so deposited shall, until so applied,
constitute additional security for the Secured Obligations, shall be held by the
Collateral Agent in a separate account, without interest (except to the extent
required under applicable law), may be commingled with other funds of the
Collateral Agent and, PROVIDED that no Event of Default shall have occurred and
be continuing hereunder, shall be applied in payment of the aforesaid amounts
prior to their becoming delinquent, to the extent that Collateral Agent shall
have such funds on hand, and PROVIDED, FURTHER, that the Collateral Agent shall
have no obligation to use said funds to pay any installment of Impositions prior
to the last day on which payment thereof may be made without penalty or interest
or to pay an insurance premium prior to the due date thereof. It shall be the
Mortgagor's responsibility to furnish the Collateral Agent with bills or
invoices therefor in sufficient time to pay the same before any penalty or
interest attaches and before said policies of insurance lapse, and the
Collateral Agent shall have no responsibility for payment of the same in the
absence of such bills or invoices. If an Event of Default hereunder shall have
occurred and be continuing, or if any of the Secured Obligations shall have been
accelerated as provided in the Credit Agreement or any Designated Hedge
Agreement, all funds so deposited may, at the Collateral Agent's option, be
applied to the Secured Obligations in the order determined by the Collateral
Agent or to cure said Event of Default or as provided in this section.
(c) TRANSFER OF MORTGAGE. Upon an assignment or other transfer of this
Mortgage, the Collateral Agent shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Collateral Agent shall thereupon be completely released from all liability with
respect to such deposits and the Mortgagor or the owner of the Mortgaged
Property shall look solely to the assignee or transferee with respect thereto.
This provision shall apply to every transfer of such deposits to a new assignee
or transferee.
(d) TRANSFER OF MORTGAGED PROPERTY. A permissible transfer of record
title to the Mortgaged Property shall automatically transfer to the new owner
the beneficial interest in any deposits under this section. Upon full payment
and satisfaction of this Mortgage or, at the Collateral Agent's option, at any
prior time, the balance of amounts deposited in the Collateral Agent's
possession shall be paid over to the record owner of the Mortgaged Property, and
no other person shall have any right or claim thereto in any event.
(e) DEPOSITORY. The Mortgagor agrees, at the Collateral Agent's request
and at the Mortgagor's expense, to make the aforesaid deposits with the
Collateral Agent or such service or financial institution as the Collateral
Agent may from time to time designate in lieu of the Collateral Agent.
11
<PAGE> 77
SECTION 5. LIENS AND LIABILITIES.
(a) DISCHARGE OF MECHANIC'S LIENS, ETC. The Mortgagor will pay, bond or
otherwise discharge, from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others which,
if unpaid, might result in, or permit the creation of, a lien on the Mortgaged
Property, or on the revenues, rents, issues, income or profits arising therefrom
and, in general, the Mortgagor shall do, or cause to be done, at the Mortgagor's
sole cost and expense, everything necessary to fully preserve the lien, security
interest and priority of this Mortgage.
(b) CREATION OF LIENS. The Mortgagor will not, without the Collateral
Agent's consent, create, place or permit to be created or placed, or through any
act or failure to act acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Mortgaged Property, prior to, on a parity with or subordinate to the lien of
this Mortgage, OTHER than the following ("PERMITTED ENCUMBRANCES"): (i) the lien
of this Mortgage; (ii) the lien of the First Mortgage; (iii) the Permitted Liens
(as defined in the Credit Agreement); and (iv) such other matters of record as
may be described in Exhibit 2 or as to which the Collateral Agent has otherwise
specifically consented in writing. If any of the foregoing, other than Permitted
Encumbrances, becomes attached to the Mortgaged Property without such consent,
the Mortgagor will promptly cause the same to be discharged and released.
(c) NO CONSENT OF COLLATERAL AGENT TO LIENS TO BE IMPLIED. Nothing in
the Credit Agreement, the Notes, this Mortgage, or the other Secured Debt
Documents shall be deemed or construed in any way as constituting the consent or
request by the Collateral Agent, express or implied, to any contractor,
subcontractor, laborer, mechanic or materialman for the performance of any labor
or the furnishing of any material for any improvement, construction, alteration
or repair of the Mortgaged Property.
(d) RIGHT TO CONTEST. Notwithstanding anything to the contrary
contained in this section 5, the Mortgagor shall have the right to contest in
good faith the validity of any such lien, encumbrance, charge or security
interests, PROVIDED THAT AND SO LONG AS (1) the same is done by the Mortgagor
upon prior written notice to the Collateral Agent and at the Mortgagor's sole
cost and expense and with due diligence and continuity so as to resolve as
promptly as possible such question of validity; (2) neither the Mortgaged
Property nor any part thereof will be in immediate danger of being forfeited or
lost by reason of such contest; (3) such contest shall not subject the
Collateral Agent to prosecution for a criminal offense or a claim for civil
liability; (4) if required by the Collateral Agent, the Mortgagor shall either
bond such lien, encumbrance, charge or security interest or establish a reserve
or other security with the Collateral Agent in an amount and in form and
substance satisfactory to the Collateral Agent for application towards the cost
of curing or removing the same from record pursuant to clause (5) below; (5) the
Mortgagor shall thereafter diligently proceed to cause such lien, encumbrance or
charge to be removed and discharged prior to the date the Mortgaged Property is
listed for an IN REM action with respect to such lien, encumbrance or charge or
any writ or order is issued under which the Mortgaged Property may be sold
pursuant to a final judgment; (6) the Mortgagor agrees in writing to indemnify
and hold harmless the Collateral Agent and the Secured Creditors from and
against any and all expenses, claims, demands, obligations, liabilities, suits,
actions and penalties upon or arising out of such contest and (7) no Event of
Default hereunder shall have occurred and be continuing.
SECTION 6. TRANSFERS AND MERGERS; LEASES, ETC.
The Mortgagor shall not (i) sell, assign, transfer or otherwise dispose
of the Mortgaged Property or any part thereof or interest therein, or (ii) merge
or consolidate with any other person, or (iii) lease all or any portion of the
Mortgaged Property to any other person, except pursuant to a lease which is
subject and subordinate in all respects to this Mortgage, or (iv) enter into any
contract or agreement to do any of the foregoing, expressly including, without
limitation, any land contract, lease/purchase, lease/option or option agreement,
EXCEPT to the extent permitted by, and in compliance with the requirements of,
section 9.2 of the Credit Agreement.
12
<PAGE> 78
SECTION 7. MAINTENANCE; ALTERATIONS; REPAIR
OR RESTORATION OF LOSS OR DAMAGE
CAUSED BY CASUALTY;
PREPAYMENT UPON EVENT OF LOSS.
(a) REPAIR AND MAINTENANCE. The Mortgagor will operate and maintain the
Mortgaged Property in good order, repair and operating condition, ordinary wear
and tear excepted, and will promptly make all necessary repairs, renewals,
replacements, additions and improvements to the Mortgaged Property, interior and
exterior, structural and nonstructural, foreseen and unforeseen, required by law
or any restrictive covenant affecting the Mortgaged Property or otherwise
necessary so that the Mortgaged Property will at all times be in good operating
condition, ordinary wear and tear excepted, and fit and proper for the purposes
for which it is used and operated at the date hereof. The Mortgagor shall not in
any event commit waste upon the Mortgaged Property or suffer waste to be
committed thereon.
(b) REPLACEMENT OF FIXTURES AND EQUIPMENT. The Mortgagor will keep the
Mortgaged Property fully equipped and will replace all worn-out or obsolete
Fixtures and Equipment with Fixtures and Equipment comparable thereto when new,
and will not, without the Collateral Agent's consent, remove from the Mortgaged
Property any item of the Fixtures and Equipment covered by this Mortgage UNLESS
(i) the same is replaced by the Mortgagor with an item of equal suitability and
value when new, owned by the Mortgagor and subject to the lien and security
interest of this Mortgage, free and clear of any lien or security interest
(other than Permitted Encumbrances), or (ii) in the case of any such Fixtures
and Equipment which is obsolete and surplus to its needs, the same is disposed
of in the ordinary course of business and in compliance with section 9.2 of the
Credit Agreement.
(c) ALTERATIONS OF IMPROVEMENTS, ETC. No buildings, structures or other
substantial Improvements on the Mortgaged Property shall be altered in any
material respect or demolished or removed by the Mortgagor, PROVIDED that the
Mortgagor may make alterations and additions (including structural alterations)
to the Improvements if (i) such alterations do not materially reduce the value
or marketability of the Mortgaged Property or the uses or utility of the
Mortgaged Property; or (ii) such alterations are required by applicable law,
rule or regulation.
(d) EVENT OF LOSS, ETC. If the Improvements or the Fixtures and
Equipment suffer any damage or loss or are destroyed by fire, rain, storm,
flood, earthquake, or any other casualty, whether or not covered by insurance,
the Mortgagor will replace and restore the Mortgaged Property to a condition
satisfactory to the Collateral Agent, UNLESS the proceeds of insurance are
applied (i) to the Secured Obligations under and as defined in the First
Mortgage, as provided in section 10(b) of the First Mortgage, or (ii) to the
Secured Obligations, as provided in section 10(b) hereof.
SECTION 8. COMPLIANCE WITH LAWS AND
INSURANCE REQUIREMENTS, ETC.
(a) COMPLIANCE WITH LAWS, ETC. The Mortgagor covenants that the
Mortgaged Property will at all times be constructed, installed, maintained and
operated in compliance with all applicable requirements of:
(i) all laws, rules, regulations, orders, authorizations,
permits and licenses of all governmental authorities, federal, state
and local, having jurisdiction over the Mortgagor, the Mortgaged
Property or any part thereof, including, without limitation, (w) all
Environmental Laws, (x) the Occupational Safety and Health Act, 29 U.S.
C. section 651 ET SEQ., (y) the Americans with Disabilities Act of
1990, and (z) all state and local laws and ordinances related to
handicapped access and all rules, regulations, and orders issued
pursuant thereto including, without limitation, the Americans with
Disabilities Act Accessibility Guidelines for Buildings and Facilities
(collectively as referred to in clause (y) and this clause (z), "ACCESS
LAWS"); and
13
<PAGE> 79
(ii) all restrictive covenants affecting any portion or all of
the Real Property Collateral;
OTHER than those requirements (A) being contested in good faith by appropriate
proceedings, as to which adequate reserves are established to the extent
required under GAAP, and (B) the noncompliance with which would not have, and
which would not be reasonably expected to have, a Material Adverse Effect.
(b) ALTERATIONS AFFECTING COMPLIANCE WITH ACCESS LAWS. Notwithstanding
any provisions set forth herein or in any other document regarding the
Collateral Agent's approval of alterations of the Real Property Collateral, the
Mortgagor shall not alter the Real Property Collateral in any manner which would
increase in any material respect the responsibilities of the Mortgagor for
compliance with the applicable Access Laws without the prior written approval of
the Collateral Agent. The foregoing shall apply to tenant improvements
constructed by the Mortgagor or by any of its tenants. The Collateral Agent may
condition any such approval upon receipt of a certificate of Access Law
compliance from an architect, engineer, or other person acceptable to the
Collateral Agent.
(c) NOTICE OF VIOLATION OF ACCESS LAWS. The Mortgagor does hereby agree
to give prompt notice to the Collateral Agent of the receipt by the Mortgagor of
any complaints related to violation of any Access Laws and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
(d) LICENSES AND PERMITS, ETC. The Mortgagor shall (i) observe and
comply with all conditions and requirements necessary to preserve and extend any
and all rights, licenses, permits (including but not limited to zoning
variances, special exceptions and non-conforming uses), privileges, franchises
and concessions which are applicable to the Mortgaged Property or any part
thereof or which have been granted to or contracted for by the Mortgagor in
connection with any existing or presently contemplated use of the Mortgaged
Property, and (ii) obtain and keep in full force and effect all necessary
governmental and municipal approvals as may be necessary from time to time to
comply in all material respects with all Environmental Laws, all Access Laws and
other statutory or regulatory requirements; except in any such case referred to
in clause (i) or (ii) above where the noncompliance would not have, and would
not be reasonably expected to have, a Material Adverse Effect.
(e) FLOOD HAZARDS; UTILITIES; STREETS. The Mortgagor represents and
warrants that (i) the Mortgaged Property are not located in an area identified
by the Secretary of Housing and Urban Development or a successor thereto as an
area having special flood hazards pursuant to the terms of the National Flood
Disaster Protection Act of 1973, as amended; (ii) the Mortgaged Property are
served by all utilities required for the present use thereof; and (iii) all
streets necessary to serve the Mortgaged Property for the use thereof as herein
contemplated have been completed and are serviceable and have been dedicated or
accepted by the appropriate governmental entities.
(f) ZONING; TITLE MATTERS. The Mortgagor will not (i) initiate or
support any zoning reclassification of the Mortgaged Property, seek any
variance under existing zoning ordinances applicable to the Mortgaged Property
or use or permit the use of the Mortgaged Property in a manner which would
result in such use becoming a non-conforming use under applicable zoning
ordinances, (ii) modify, amend or supplement any Permitted Encumbrances, (iii)
impose any restrictive covenants or encumbrances upon the Mortgaged Property,
execute or file any subdivision plat affecting the Mortgaged Property or consent
to the annexation of the Mortgaged Property to any municipality or (iv) permit
or suffer the Mortgaged Property to be used by the public or any person in such
manner as might make possible a claim of adverse usage or possession or of any
implied dedication or easement.
(g) INSURANCE REQUIREMENTS. The Mortgagor shall observe and comply with
any and all conditions and requirements attached to or made a part of the
insurance relating to the Mortgaged Property which is maintained in accordance
with section 10.
14
<PAGE> 80
SECTION 9. ENVIRONMENTAL MATTERS.
(a) Without limitation of the provisions of section 8 hereof, the
Mortgagor hereby (i) affirms that the representations contained in section 7.13
of the Credit Agreement are true and correct insofar as it and the Mortgaged
Property are concerned, (ii) insofar as it and/or the Mortgaged Property are
concerned, covenants to perform and observe all of the terms and provisions of
the Credit Agreement relating to compliance by the Borrower and/or its
Subsidiaries with Environmental Laws, including without limitation, notice by it
and indemnification by it of Environmental Claims, as provided in section 8.8
and 13.1 of the Credit Agreement, as fully as if the Mortgagor were named in
such terms and provisions in the place and stead of the Borrower; and (iii)
agrees that all of the Secured Creditors shall be considered Indemnitees as
defined in section 13.1 of the Credit Agreement.
(b) Any costs or expenses reasonably incurred by a person to be
indemnified hereunder for which the Mortgagor is responsible shall be paid to
the person to be indemnified on demand, and failing prompt reimbursement, shall
be added to the Secured Obligations and earn interest at the interest rate
provided in the last sentence of section 2.7(c) of the Credit Agreement, or such
lesser rate as is the maximum legally permissible rate of interest (the "DEFAULT
RATE"), until paid in full.
(c) The Mortgagor's representations, warranties, and obligations under
this section shall not be terminated, released, discharged, extinguished, or
otherwise affected by any foreclosure of any lien, indebtedness or obligation,
any satisfaction of the Secured Obligations or the release or discharge of the
Mortgaged Property or any part thereof or any other action or thing, except and
unless such representations, warranties, and obligations are expressly released
in writing by the Collateral Agent, which writing shall refer particularly to
this section. The provisions of this section may be enforced at any time by any
of the Secured Creditors, the Collateral Agent or any other person entitled to
be indemnified hereunder and, without limiting the foregoing, shall survive the
payment or other satisfaction by any means of the obligations evidenced by the
Notes and the release and discharge of this Mortgage, except in the case of a
specific written release by the Collateral Agent as to this section, as referred
to above.
SECTION 10. INSURANCE.
(a) REQUIRED INSURANCE. The Mortgagor will maintain or cause to be
maintained insurance with responsible companies in such amounts and against such
risks as is usually carried by owners of similar businesses and properties (and
with such deductibles and levels of self-insurance as are usually maintained by
owners of similar businesses and properties and as are consistent with the
Mortgagor's practices as of the date of the execution and delivery hereof),
PROVIDED that in any event the Mortgagor will maintain:
(i) ALL RISK EXTENDED COVERAGE INSURANCE: insurance against
loss or damage covering the Improvements, the Fixtures and Equipment
and all other tangible personal property of the Mortgagor located on
the Mortgaged Property by reason of any loss or damage by fire, storms,
and other hazards, perils, casualties and risks, including without
limitation risks usually covered by extended coverage policies issued
in the jurisdiction in which the Improvements are located, which
insurance shall:
(A) name National City Bank, as Collateral Agent as
an additional insured and as loss payee,
(B) provide coverage in an amount not less than the
greater of (x) 100% of the replacement costs of the
Improvements and the Fixtures and Equipment, (y) the full
insurable value of the Improvements and the Fixtures and
Equipment, and (z) the amount applicable to the Improvements
and the Fixtures and Equipment necessary so that neither the
Mortgagor (or any of
15
<PAGE> 81
its Affiliates) or the Collateral Agent shall be considered or
shall become a co-insurer of any loss under such policy, and
(C) provide for a deductible or self-insurance
retention in an amount consistent with the Mortgagor's current
practices or such greater amount as is reasonably acceptable
to the Collateral Agent;
(ii) FLOOD INSURANCE: if the area in which the Real Property
Collateral is located has been designated as flood prone or a flood
risk area, as defined by the Flood Disaster Protection Act of 1973, as
amended, flood insurance, which insurance shall:
(A) name National City Bank, as Collateral Agent as
an additional insured and as loss payee,
(B) provide coverage in an amount not less than the
greater of (x) 100% of the replacement costs of the
Improvements and the Fixtures and Equipment, (y) the full
insurable value of the Improvements and the Fixtures and
Equipment, and (z) the amount applicable to the Improvements
and the Fixtures and Equipment necessary so that neither the
Mortgagor (or any of its Affiliates) or the Collateral Agent
shall be considered or shall become a co-insurer of any loss
under such policy; PROVIDED that if flood insurance in the
required amount is not available, flood insurance shall be
maintained in the maximum amount available;
(C) provide for a deductible or self-insurance
retention of an amount reasonably acceptable to the Collateral
Agent; and
(D) comply with any additional requirements of the
National Flood Insurance Program as set forth in such Act;
(iii) COMMERCIAL GENERAL LIABILITY INSURANCE: insurance
against claims for bodily injury, death or property damage occurring
on, in or about the Mortgaged Property and any other facilities owned,
leased or used by the Mortgagor (including adjoining streets, sidewalks
and waterways), which insurance shall:
(A) name National City Bank, as Collateral Agent as
an additional insured,
(B) provide coverage in an amount not less than
$______ per occurrence and $______ in the aggregate, PLUS
umbrella coverage of not less than $______; and
(C) provide for a deductible or self-insurance
retention in an amount consistent with the Mortgagor's current
practices or such greater amount as is reasonably acceptable
to the Collateral Agent;
(iv) WORKERS' COMPENSATION INSURANCE: insurance against claims
for injuries to or death of employees (including Employers' Liability
Insurance) to the extent required by applicable law;
(v) BUSINESS INTERRUPTION INSURANCE: insurance against loss of
operating income for a period of at least six months, occasioned by
reason of any peril affecting the operations of the Mortgagor; and
(vi) OTHER INSURANCE: such other and additional insurance, in
such amounts and with such coverages as are then customary for property
similar in use and located in the same state in which the Mortgaged
Property is located.
16
<PAGE> 82
Such insurance shall be written by financially responsible companies selected by
the Mortgagor and having an A.M. Best rating of "A-" or better and being in a
financial size category of "VII" or larger, or by other companies acceptable to
the Collateral Agent, and (other than workers' compensation insurance) shall
name the Collateral Agent, as loss payee (in the case of insurance described in
items (i) and (ii)) or as an additional named insured (in the case of the
insurance described in items (iii), (v) and (vi) above), in each case as its
interests may appear. Each policy referred to in this section shall provide that
it will not be canceled or reduced or expire except after not less than 30 days'
written notice to the Collateral Agent and shall also provide that the interests
of the Collateral Agent shall not be invalidated by an act or negligence of the
Mortgagor or any person having an interest in any facility owned, leased or used
by the Mortgagor nor by occupancy or use of any facility owned, leased or used
by the Mortgagor for purposes more hazardous than permitted by such policy nor
by any foreclosure or other proceedings relating to any facility owned, leased
or used by the Mortgagor. The Mortgagor will advise the Collateral Agent
promptly of any policy cancellation, reduction or amendment. All of such
insurance shall be primary and non-contributing with any insurance which may be
carried by the Collateral Agent. All insurance policies, to the extent of its
interest, are to be for the benefit of and first payable in case of loss to the
Collateral Agent as first mortgagee without contribution. At or prior to the
time of the initial Borrowing by the Mortgagor, it will provide to the
Collateral Agent (x) certificates or endorsements naming the Collateral Agent as
an additional insured or loss payee with respect to the casualty and liability
insurance maintained as required hereby with respect to the Mortgaged Property,
and (y) if requested to do so, copies of all insurance policies maintained by it
as required hereby. The Mortgagor shall deliver to the Collateral Agent
contemporaneously with the expiration or replacement of any policy of insurance
required to be maintained hereunder a certificate as to the new or renewal
policy.
(b) PROCEEDS OF INSURANCE. All amounts recoverable under any policy of
casualty insurance are hereby assigned to the Collateral Agent, SUBJECT to the
prior rights of the Collateral Agent under the First Mortgage. In the event the
Mortgagor or the Collateral Agent receives any proceeds of insurance from any
loss covered by any insurance policies on the Mortgaged Property, the same shall
be immediately paid over to the Collateral Agent under the First Mortgage, for
application as therein provided; PROVIDED, HOWEVER, that if the First Mortgage
has at the time been terminated and discharged, THEN in the event of a loss, the
Collateral Agent is authorized and empowered, at its option, to adjust or
compromise any loss covered by any insurance policies on the Mortgaged Property,
to collect and receive the proceeds therefrom and, after deducting from such
proceeds any expenses incurred by it in the collection or handling thereof, to
use and apply the net proceeds or any part thereof in any one or more of the
following ways: (i) application of the net proceeds to the ratable payment or
prepayment of the Secured Obligations; (ii) use the same or any part thereof to
fulfill any of the covenants contained herein as the Collateral Agent may
determine; (iii) use the same or any part thereof to replace and restore the
Mortgaged Property to a condition satisfactory to the Collateral Agent; or (iv)
release the same or any part thereof to the Mortgagor to cover the cost of
repair or restoration of the Improvements.
(c) POWER OF ATTORNEY. The Collateral Agent is hereby irrevocably
appointed by the Mortgagor as attorney for the Mortgagor to assign any policy to
itself or its nominees in the event of the foreclosure of this Mortgage. In the
event of foreclosure of this Mortgage, or other transfer of title of the
Mortgaged Property in lieu of foreclosure, all right, title and interest of the
Mortgagor in and to any insurance policies then in force shall pass to the
purchaser or grantee thereof.
SECTION 11. CONDEMNATION.
(a) CONDEMNATION. The Mortgagor will give the Collateral Agent
immediate notice of the actual or threatened commencement of any proceedings
under eminent domain affecting all or any part of the Mortgaged Property or any
easement therein or appurtenance thereof, including severance and consequential
damage and change in grade of streets, and will deliver to the Collateral Agent
copies of any and all papers served in connection with any such proceedings. The
Mortgagor agrees that all awards heretofore or hereafter made by any public or
quasi-public authority to the present and all subsequent owners of the Mortgaged
Property by virtue of an exercise of the right of eminent domain by such
authority, including any award for taking of title, possession or right of
access to a public
17
<PAGE> 83
way, or for any change of grade or streets affecting the Mortgaged Property, are
hereby assigned to the Collateral Agent, SUBJECT to the prior rights of the
Collateral Agent under the First Mortgage. In case of any such proceedings and
the receipt by the Mortgagor or the Collateral Agent of the proceeds of any such
awards from the authorities, the same shall be immediately paid over to the
Collateral Agent under the First Mortgage, for application as therein provided;
PROVIDED, HOWEVER, that if the First Mortgage has at the time been terminated
and discharged, THEN in the event of any such proceedings, the Collateral Agent
is authorized and empowered, at its option, to appear in and participate in such
proceedings (or direct the Mortgagor to do so), to compromise or settle the
amount of the awards in such proceedings, to collect and receive the proceeds of
any such awards from the authorities making the same and to give proper receipts
therefor, and after deducting from such proceeds any expenses incurred by the
Collateral Agent in the collection or handling thereof, to use and apply the net
proceeds or any part thereof in any one or more of the following ways: (i)
application of the net proceeds to the ratable payment or prepayment of the
Secured Obligations; (ii) use the same or any part thereof to fulfill any of the
covenants contained herein as the Collateral Agent may determine; (iii) use the
same or any part thereof to replace and restore the Mortgaged Property to a
condition satisfactory to the Collateral Agent; or (iv) release the same or any
part thereof to the Mortgagor to cover the cost of repair or restoration of the
Improvements.
(b) FURTHER ASSURANCES. The Mortgagor hereby covenants and agrees to
and with the Collateral Agent, upon the request of the Collateral Agent to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning all such awards to the Collateral Agent, free and clear
and discharged of any and all encumbrances of any kind or nature whatsoever
except as above stated.
(c) INSTALLMENT PAYMENT OF SECURED OBLIGATIONS NOT IMPAIRED.
Notwithstanding any taking under the power of eminent domain, alteration of the
grade of any street, or other injury to or decrease in value of the Mortgaged
Property by any public or quasi-public authority or corporation, the obligation
of the Borrower to pay installments on the Secured Obligations owed by it shall
not be impaired and any reduction in the principal sum resulting from the
application by the Collateral Agent of such award or payment as hereinafter set
forth shall be deemed to take effect only on the date of such receipt.
SECTION 12. RIGHT OF COLLATERAL AGENT
TO MAKE PAYMENTS ON BEHALF
OF MORTGAGOR, ETC.
(a) RIGHT OF COLLATERAL AGENT TO MAKE PAYMENTS, ETC. In the event the
Mortgagor shall fail to comply with any or all of its covenants, agreements,
conditions and stipulations herein set forth, then the Collateral Agent shall
after notice to the Mortgagor be and hereby is authorized and empowered at its
option, but without legal obligation to do so, to pay or perform the same
without waiver of any other remedy. In addition, the Collateral Agent is
authorized and empowered at its option, but without legal obligation to do so,
upon not less than two Business Days' prior notice to the Chief Financial
Officer of the Mortgagor, to enter, or have its agents enter, the Mortgaged
Property whenever necessary for the purpose of inspecting the Mortgaged Property
and curing any default hereunder. The Mortgagor agrees that the Collateral Agent
shall thereupon have a claim against the Mortgagor for all sums paid by the
Collateral Agent for such defaults so cured, together with a lien upon the
Mortgaged Property for the sum so paid plus interest at the Default Rate.
(b) COLLATERAL AGENT PROTECTED; FURTHER RIGHTS, ETC. The Collateral
Agent, in making any payment herein and hereby authorized in the place and stead
of the Mortgagor (i) relating to taxes, assessments, water rates, sewer rentals
and other governmental or municipal charges, fees, impositions or liens asserted
against the Mortgaged Property, may do so according to any bill, statement or
estimate procured from the appropriate public authority without inquiry into the
validity thereof; or (ii) relating to any adverse title, lien, statement of
lien, encumbrance, claim or charge, shall be the sole judge of the validity of
same; or (iii) otherwise relating to any purpose herein and hereby authorized,
but not enumerated in this section, may do so whenever, in its good faith
judgment and discretion, such payment shall seem necessary or desirable to
protect the full security intended to be created by this Mortgage.
18
<PAGE> 84
In connection with any such payment, the Collateral Agent, at its option, may
and is hereby authorized to obtain a continuation report of title prepared by a
title insurance company, the cost and expenses of which shall be repayable by
the Mortgagor upon demand and shall be secured hereby.
SECTION 13. SECURITY AGREEMENT PROVISIONS.
This Mortgage is hereby deemed to be as well a security agreement for
the purpose of creating hereby a security interest securing the Secured
Obligations in and to the Personal Property Collateral. Without derogating any
of the provisions of this Mortgage, the Mortgagor by this Mortgage:
(a) grants to the Collateral Agent a security interest in all of
the Mortgagor's right, title and interest in and to all
Personal Property Collateral, including, but not limited to,
the items referred to above, together with all additions,
accessions and substitutions and all similar property
hereafter acquired and used or obtained for use on, or in
connection with, the Real Property Collateral; the proceeds of
the Personal Property Collateral are intended to be secured
hereby; PROVIDED, HOWEVER, that such intent shall never
constitute an expressed or implied consent on the part of the
Collateral Agent to the sale of any or all Personal Property
Collateral except as specifically permitted under any of the
applicable provisions of this Mortgage or any of the other
Credit Documents;
(b) agrees that the security interest hereby granted by this
Mortgage shall secure the payment of the Secured Obligations;
(c) agrees not to sell, convey, mortgage or grant a security
interest in, or otherwise dispose of or encumber, any of the
Personal Property Collateral or any of the Mortgagor's right,
title or interest therein, EXCEPT in compliance with the
requirements of section 9.2 of the Credit Agreement;
(d) agrees that if any of the Mortgagor's rights in the Personal
Property Collateral are voluntarily or involuntarily
transferred, whether by sale, creation of a security interest,
attachment, levy, garnishment or other judicial process,
without the written consent of the Collateral Agent, such
transfer shall constitute a default by the Mortgagor under the
terms of this Mortgage;
(e) authorizes the Collateral Agent to file, in the jurisdiction
where this Mortgage will be given effect, financing statements
covering the Personal Property Collateral and at the request
of the Collateral Agent, the Mortgagor shall join the
Collateral Agent in executing one or more of such financing
statements pursuant to the Uniform Commercial Code in a form
satisfactory to the Collateral Agent and the Mortgagor shall
pay the cost of filing the same in all public offices at any
time and from time to time wherever the Collateral Agent deems
filing or recording of any financing statements or of this
Mortgage to be desirable or necessary; and
(f) acknowledges that the Mortgagor, as of the date hereof, has
joined the Collateral Agent in the execution of one or more
Uniform Commercial Code financing statements to be filed to
perfect the security interest in the Personal Property created
by this Mortgage.
SECTION 14. FILINGS AND RECORDINGS.
The Mortgagor agrees at all time to cause this Mortgage, and each
amendment or modification hereof or supplement hereto, and financing statements
covering personal property (and continuation statements in respect thereof), if
necessary or appropriate under the Uniform Commercial Code, as in effect in the
jurisdiction in which the Real Property Collateral is located, and all
assignments of leases, to be recorded, registered and filed, and kept recorded,
registered and filed, in such manner and in such places as appropriate, and
shall comply with all applicable
19
<PAGE> 85
statutes and regulations in order to establish, preserve and protect the
security and priority of this Mortgage, and such assignments and the rights of
the Collateral Agent thereunder. The Mortgagor shall pay, or cause to be paid,
all taxes, fees and other charges incurred in connection with such recording,
registration, filing and compliance.
SECTION 15. RIGHT OF SETOFF.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default, each Secured
Creditor is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Mortgagor or to
any other person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Secured Creditor (including,
without limitation, by branches and agencies of such Secured Creditor wherever
located) to or for the credit or the account of the Mortgagor against and on
account of the obligations and liabilities of the Mortgagor to such Secured
Creditor under the Notes, or any other Secured Debt Documents, including,
without limitation, all interests in Leans purchased by such Secured Creditor
pursuant to section 13.4(b) of the Credit Agreement, and all other claims of any
nature or description arising out of or connected with the Notes or any other
Secured Debt Document, irrespective of whether or not such Secured Creditor
shall have made any demand hereunder and although said Leans, liabilities or
claims, or any of them, shall be contingent or unmatured.
SECTION 16. EVENTS OF DEFAULT.
Any Event of Default under the Credit Agreement, any payment default by
the Borrower or any of its Subsidiaries under any Designated Hedge Agreement,
any Event of Default relating to the Borrower or any of its Subsidiaries under
any Designated Hedge Agreement, and/or any Event of Default under the Senior
Note Indenture, shall constitute an Event of Default ("EVENT OF DEFAULT") under
this Mortgage.
SECTION 17. REMEDIES.
If an Event of Default, under and as defined in section 16 of this
Mortgage, shall have occurred and be continuing, then, subject to the prior
rights of the Collateral Agent under the First Mortgage:
(a) The Collateral Agent, the Administrative Agent and the
Secured Creditors may exercise any one or more of the remedies
specified in section 10.2 of the Credit Agreement or otherwise
available at law or in equity, and the Mortgagor hereby grants the
Collateral Agent all remedies which may be available under applicable
law or equity in connection with the enforcement of this Mortgage,
whether or not any such remedies are specifically or generally
enumerated or otherwise referred to herein. Without limitation of any
of the provisions of this section 17, the Mortgagor agrees that, to the
extent permitted by law, this Mortgage may be foreclosed by the
Collateral Agent, at its option, pursuant to the provisions of section
846.103 of the Wisconsin Statutes of 1981-82, or any successor thereof.
(b) To the extent permitted by applicable law, the Collateral
Agent may enter upon the Mortgaged Property or any portion thereof and
may exclude the Mortgagor therefrom; and having and holding the same,
may use, operate, manage, and control the Mortgaged Property and
conduct business in connection therewith, including, without limitation
the continuation of the construction of the Improvements if not
previously completed, either personally or by its superintendents,
managers, agents, servants, attorneys or receivers; and upon every such
entry, the Collateral Agent, at the expense of the Mortgagor and from
time to time, may maintain the Mortgaged Property and may insure and
reinsure the same, as may seem to the Collateral Agent to be necessary
or advisable; and, at the expense of the Mortgagor and from time to
time, the Collateral Agent may make all repairs, renewals,
replacements, alterations, additions, betterments and
20
<PAGE> 86
improvements thereto and thereon, as to the Collateral Agent may seem
necessary or advisable, and if the construction of the Improvements has
not been completed, may cause such construction to be continued to
completion or to such stage of completion as the Collateral Agent
considers necessary or advisable; and in every such case the Collateral
Agent shall have the right to carry on the construction thereof, enter
into, terminate, cancel and/or enforce contracts or leases related
thereto, manage and operate the Mortgaged Property and carry on the
business thereof, and otherwise exercise all rights which the Mortgagor
might otherwise have with respect thereto, in the name of the Mortgagor
or otherwise, as the Collateral Agent shall deem best or advisable; and
the Collateral Agent shall be entitled to collect all rents, earnings,
revenues, issues, profits and income of the Mortgaged Property, awards
made for the taking of or injury to the Mortgaged Property through
eminent domain or otherwise, including awards or damages for change of
grade, and also return premiums or other payments upon insurance, and
said rents, earnings, revenues, issues, profits and income, awards,
damages, premiums and payments are hereby assigned to the Collateral
Agent, and after deducting the expenses and costs of conducting the
business thereof and of all betterments, additions, alterations,
replacements, repairs and for taxes, assessments, insurance and prior
or other charges upon or with respect to the Mortgaged Property or any
portion thereof, as well as just and reasonable compensations for the
services of all counsel, agents, employees, receivers and other persons
properly engaged or employed, the Collateral Agent shall apply the
proceeds as provided in section 18.
(c) To the extent permitted by applicable law, the Collateral
Agent is hereby authorized and empowered by the Mortgagor to sell the
Mortgaged Property in such manner as may be prescribed by law, by
advertisement and public sale as provided by the laws of the
jurisdiction in which the Real Property Collateral is located, or to
foreclose this Mortgage by judicial proceedings and sell the Mortgaged
Property pursuant to such proceedings as permitted by applicable law.
The Mortgagor does hereby authorize the Collateral Agent to sell the
Mortgaged Property together or in lots or parcels, as to the Collateral
Agent shall seem expedient, and to execute and deliver to the purchaser
or purchasers of such property good and sufficient deeds thereof with
covenants of general, special or limited warranty or such other
instruments of conveyance, assignment or transfer as the Collateral
Agent may deem appropriate. Payment of the purchase price to the
Collateral Agent shall satisfy the obligation of the purchaser at any
such sale therefor, and he shall not be bound to look after the
application thereof. The Collateral Agent shall cause notice of any
such sale to be mailed to the Mortgagor; but, except as otherwise
provided by any applicable provision of law, failure so to mail any
such notice shall not affect the validity of any such sale. If the
Collateral Agent, acting on behalf of any or all of the holders of the
Notes or other Secured Obligations, or any or all such holders acting
on their own behalf, is the highest bidder, the Collateral Agent or
such holders, as the case may be, may purchase at any sale or sales
(whether statutory foreclosure or public sale or sales conducted as
hereinabove authorized) and may, in paying the purchase price, turn in
any of the Notes or other Secured Obligations held by them, in lieu of
cash, up to the entire amount owing thereunder, whether for principal,
interest or other amounts, which amount as so designated as being
turned over shall be considered distribution of the proceeds of such
sale. The provisions set forth above as to public sale or sales in lieu
of statutory foreclosure are not intended as an exclusive method of
foreclosure hereunder or to deprive the Collateral Agent of any other
legal or equitable remedy available under applicable law. Accordingly,
it is specifically agreed that the remedy of foreclosure by the
Collateral Agent's sale as hereinabove provided for shall be cumulative
and shall not in any wise be construed as an exclusive remedy, and the
Collateral Agent shall be fully entitled to a statutory court
foreclosure and to avail itself of any and all other legal or equitable
remedies available under the laws of the jurisdiction in which the Real
Property Collateral is located.
(d) The Mortgagor hereby authorizes the Collateral Agent to
demand and receive, in the place and stead of the Mortgagor, all
amounts that may become due under any and each lease, rental, contract,
easement and other right of the Mortgagor pertaining or in any way
relating to the Mortgaged Property or any part thereof, and, when
received, to apply the same to the costs and expenses incurred by the
Collateral Agent incurred hereunder and to the Secured Obligations. No
demand for, and no receipt or application of any such amount shall be
deemed to minimize, subordinate or affect in any way the lien hereof
and rights hereunder of the Collateral Agent or any rights of a
purchaser of any portion of the Mortgaged Property at
21
<PAGE> 87
any foreclosure or other sale hereunder, as against the person from
whom the amount was demanded or received, or his executors,
administrators, successors or assigns, or anyone claiming under such
Tenant Lease, rental, contract or other right.
(e) The Collateral Agent may exercise all rights and remedies
granted by law and more particularly the Uniform Commercial Code,
including, but not limited to, the right to take possession of the
Personal Property Collateral, and for this purpose may peaceably enter
upon any premises on which any or all of the Personal Property
Collateral is situated, without being deemed guilty of trespass and
without liability for damages thereby occasioned, and take possession
of and operate the Personal Property Collateral or remove it therefrom;
the Collateral Agent shall have the further right to take any action it
deems necessary, appropriate or desirable, at its option and in its
discretion, to repair, refurbish or otherwise prepare the Personal
Property Collateral for sale, lease or other use or disposition and to
sell at public or private sales or otherwise dispose of, lease or
utilize the Personal Property Collateral and any part thereof in any
manner authorized or permitted by law and to apply the proceeds thereof
toward payment of any costs and expenses, including reasonable
attorneys' fees and legal expenses, to the extent permitted by law,
thereby incurred by the Collateral Agent and toward payment of the
Secured Obligations and all other indebtedness described in this
Mortgage, in such order and manner as may be provided in the Credit
Agreement or this Mortgage or in the event such provisions are not
applicable in such order and manner as the Collateral Agent may elect.
The Mortgagor hereby agrees to the provisions of section 846.103, Wisconsin
Stats., as the same may be amended or renumbered from time to time, permitting
the Collateral Agent, upon waiving the right to judgment for deficiency, to hold
the foreclosure sale of the Mortgaged Property three months after a foreclosure
judgment is entered.
SECTION 18. COSTS OF ENFORCEMENT; APPLICATION OF
PROCEEDS; MORTGAGOR NOT LIABLE FOR
DEFICIENCY, ETC.
(a) COSTS OF ENFORCEMENT; APPLICATION OF PROCEEDS. In case of (i)
foreclosure of this Mortgage in any court of law or equity, whether or not any
order or decree shall have been entered therein, and to the extent permitted by
law, a reasonable sum shall be allowed for attorney's fees of the Collateral
Agent in such proceedings, for stenographer's fees and for all moneys expended
for documentary evidence and the cost of a complete abstract of title and title
report for the purpose of such foreclosure, such sums to be secured by the lien
hereunder, and, to the extent permitted by law, there shall be included in any
judgment or decree foreclosing this Mortgage and be paid out of such rents,
issues and profits or out of the proceeds of any sale made in pursuance of any
such judgment or decree, or (ii) any other realization by the Collateral Agent
upon or with respect to the Mortgaged Property or any part or portion thereof,
THEN the proceeds thereof shall be turned over to the Collateral Agent under the
First Mortgage, for application as provided in the First Mortgage, PROVIDED
HOWEVER, that if at the time the First Mortgage shall have been terminated and
discharged, or the Collateral Agent shall have returned any excess proceeds to
the Collateral Agent hereunder, THEN such proceeds shall be applied as follows:
(1) FIRST, to the payment or reimbursement of the Collateral
Agent for all costs and expenses of such suit or suits or other
enforcement activities of the Collateral Agent, including, but not
limited to, the costs of advertising, sale and conveyance, including
attorneys', solicitors' and stenographers' fees, if permitted by law,
outlays for documentary evidence and the cost of such abstract,
examination of title and title report;
(2) SECOND, to the extent proceeds remain after the
application pursuant to preceding clause (1), to reimburse the
Collateral Agent for all moneys advanced or disbursed by the Collateral
Agent, if any, for the payment of taxes, levies or insurance on the
Mortgaged Property with interest on such advances and disbursements at
the Default Rate;
22
<PAGE> 88
(3) THIRD, to the Secured Creditors in the amount of any
unpaid accrued interest on the Secured Obligations, PRO RATA in
proportion to the respective amounts of such unpaid accrued interest
owed to each Secured Creditor;
(4) FOURTH, to the extent proceeds remain, to the Secured
Creditors in the amount of the remaining Secured Obligations, PRO RATA
in proportion to the respective amounts thereof owed to each Secured
Creditor, including, without limitation, (A) the outstanding principal
amount of the Secured Obligations, (B) the amount of any unpaid
reimbursement obligations with respect to any drawings made on any
Letters of Credit, and the amount of the Outstanding Letters of Credit
Exposure, (C) the amount of any termination or other payments due under
the designated hedge Agreements (calculated in accordance with
customary financial practice acceptable to the Collateral Agent), (D)
the amount of any premium or make-whole amount payable under the
Senior Note Documents, and (E) any other unpaid accrued fees,
indemnities and other amounts payable under the Credit Documents and
the Senior Note Documents, SUBJECT in the case of the Outstanding
Letters of Credit Exposure, to the provisions of section 18(b) hereof;
and
(5) FINALLY, to the extent proceeds remain after all Secured
Obligations owed to the Secured Creditors has been paid in full, to the
Mortgagor or such other person or persons as shall be lawfully entitled
thereto.
(b) DISTRIBUTABLE AMOUNTS IN RESPECT OF OUTSTANDING LETTERS OF CREDIT
EXPOSURE. If at any time any Lender is entitled pursuant to clause (4) of
section 18(a) hereof to have any amount (a "DISTRIBUTABLE AMOUNT") distributed
to it as a consequence of the inclusion in Outstanding Letters of Credit
Exposure of the aggregate amount available for drawing under any Letter of
Credit issued by or participated in by such Lender, such Distributable Amount
shall not be so distributed to such Lender but shall instead be distributed to
the Administrative Agent and deposited by the Administrative Agent in a special
interest bearing account (the "LETTER OF CREDIT RESERVE ACCOUNT") under the sole
dominion and control of the Administrative Agent, and shall be applied and
distributed to such Lender if and to the extent that such Letter of Credit is
honored. If such Letter of Credit is not honored (or is not honored in the full
amount thereof) the balance of the funds in the Letter of Credit Reserve
Account in respect of such Letter of Credit and not distributed pursuant to the
immediately preceding sentence shall be distributed to the Secured Creditors
pursuant to clause (4) of section 18(a) hereof, or, in the event no Secured
Obligations are outstanding, to whomsoever shall be lawfully entitled thereto.
For purposes of determining the amount of the Outstanding Letters of Credit
Exposure under clause (4) of section 18(a) hereof with respect to any Letter of
Credit, the undrawn face amount of such Letter of Credit shall be reduced by the
then amount, if any, held in the Letter of Credit Reserve Account with respect
to such Letter of Credit. As used herein the term "OUTSTANDING LETTERS OF CREDIT
EXPOSURE" shall mean at any time the undrawn face amount of all outstanding
Letters of Credit issued under the Credit Agreement at such time (assuming
compliance with all requirements for drawing).
(c) CERTAIN LIMITATIONS. Notwithstanding section 18(a),
(i) if any payment by the Collateral Agent to a Secured
Creditor pursuant to section 18(a) would cause any amount recovered by
the Collateral Agent from or in respect of the Collateral to be
invalidated, declared fraudulent or preferential, set aside or required
to be repaid, returned or restored to a trustee, receiver, or any other
person under any bankruptcy, reorganization, insolvency, or liquidation
statute, state or federal law, common law or equitable cause (an
"AVOIDED PAYMENT"), such Secured Creditor shall not participate in the
distribution of any portion of the Avoided Payment; instead the Avoided
Payment shall be distributable PRO RATA to the remaining Secured
Creditors as to whom no such repayment, return or restoration would be
applicable;
(ii) the Collateral Agent may condition a payment to a Secured
Creditor pursuant to section 18(a) of its portion of any amount
recovered by the Collateral Agent from or in respect of the Collateral,
on the specific condition that, in the event such amount is
subsequently determined to be an Avoided Payment, such Secured Creditor
will be required to promptly, upon written demand, return to the
Collateral
23
<PAGE> 89
Agent all or its ratable part, as the case may be, of the Avoided
Payment (and any interest thereon to the extent the same is required to
be paid in respect of the return or restoration of the Avoided
Payment), for distribution pro rata to the remaining Secured Creditors
as to whom no such repayment, return or restoration would be
applicable, or to the applicable obligor, as the case may be; and
(iii) the Collateral Agent, in making any payments to the
Secured Creditors under section 18(a) may require the Secured Creditors
to agree that if any amounts are not distributed to a particular
Secured Creditor pursuant to clause (i) above or are returned by a
Secured Creditor under clause (ii) above, the Secured Creditors will
make such adjustments or arrangements among themselves, whether by
purchasing undivided interests in the Secured Obligations or otherwise,
in order to equitably adjust for any non-pro rata distribution under
clause (i) above and/or the return of all or part of any payment or
amount under clause (ii) above, and to give effect to the intended
equal and ratable benefits of this Agreement as security for the
Secured Obligations.
(d) PAYMENTS TO SECURED CREDITORS. All payments required to be made to
(i) the Lenders hereunder shall be made to the Administrative Agent for the
account of the respective Lenders, (ii) the Senior Note Creditors hereunder
shall be made directly to the Senior Note Trustee for the account of the Senior
Note Creditors, and (iii) the Designated Hedge Creditors hereunder shall be made
directly to the Designated Hedge Creditors (or any paying agents therefor).
(e) DETERMINATION OF OUTSTANDING SECURED OBLIGATIONS. For purposes of
applying payments received in accordance with this section 18, the Collateral
Agent shall be entitled to rely upon (i) the Administrative Agent for a
determination (which the Administrative Agent agrees to provide upon request to
the Collateral Agent) of the outstanding Credit Document Obligations, (ii) the
Senior Note Trustee for determinations of the outstanding Senior Note Document
Obligations owed to the Senior Note Creditors, and (iii) the Designated Hedge
Creditors (or any paying agents therefor) for determinations of the amounts owed
to the Designated Hedge Creditors. In the absence of written notice from the
Senior Note Trustee of the amount of the Senior Note Document Obligations, the
Collateral Agent shall be entitled to assume that the only Senior Note Document
Obligations which are outstanding are principal amount of the Senior Notes and
accrued interest thereon, as notified to the Collateral Agent by the Borrower or
the Mortgagor.
(f) MORTGAGOR LIABLE FOR DEFICIENCY. It is understood and agreed that
the Mortgagor shall remain liable to the extent of any deficiency between (i)
the amount of the proceeds of the Collateral applied pursuant to section 18(a)
and (ii) the aggregate outstanding amount of the Secured Obligations.
SECTION 19. RECEIVER.
In the event an action shall be instituted to foreclose this Mortgage,
or prior to foreclosure but after default, the Collateral Agent shall be
entitled to the appointment of a receiver of the rents, issues and profits of
the Mortgaged Property as a matter of right, with power to collect the rents,
issues and profits of the Mortgaged Property due and becoming due during the
period of default and/or the pendency of such foreclosure suit to and including
the date of confirmation of the sale under such foreclosure and during the
redemption period, if any, after such confirmation, such rents, issues and
profits being hereby expressly assigned and pledged as security for the payment
of the Secured Obligations secured by this Mortgage without regard to the value
of the Mortgaged Property or the solvency of any person or persons liable for
the payment of the Secured Obligations and regardless of whether the Collateral
Agent has an adequate remedy at law. The Mortgagor for itself and for any
subsequent owner hereby waives any and all defenses to the application for a
receiver as above provided and hereby specifically consents to such appointment,
but nothing herein contained is to be construed to deprive the holder of this
Mortgage of any other right or remedy or privilege it may now have under the law
to have a receiver appointed. The provision for the appointment of a receiver
and the assignment of such rents, issues and profits is made an express
condition upon which the Leans hereby secured are made. In such event, the court
shall at once on application of the Collateral Agent or its attorney in such
action,
24
<PAGE> 90
appoint a receiver to take immediate possession of, manage and control the
Mortgaged Property, for the benefit of the holder or holders of the Secured
Obligations and of any other parties in interest, with power to collect the
rents, issues and profits of the Mortgaged Property during the pendency of such
action, and to apply the same toward the payment of the several obligations
herein mentioned and described, notwithstanding that the same or any part
thereof is occupied by the Mortgagor or any other person. The rights and
remedies herein provided for shall be deemed to be cumulative and in addition to
and not in limitation of those provided by law and if there be no receiver so
appointed, the Collateral Agent itself may proceed to collect the rents, issues
and profits from the Mortgaged Property. From any such rents, issues, and
profits collected by the receiver or by the Collateral Agent prior to a
foreclosure sale, there shall be deducted the cost of collection thereof and the
expenses of operation of the Mortgaged Property, including but not limited to
real estate commissions, receiver's fee and the reasonable fees of its attorney,
if any, and the Collateral Agent's attorney's fees, if permitted by law, and
court costs, the remainder to be applied against the Secured Obligations. In the
event the rents, issues and profits are not adequate to pay all tax and other
expenses of operation, the Collateral Agent may, but is not obligated to,
advance to any receiver the amounts necessary to operate, maintain and repair,
if necessary, the Mortgaged Property and any such amounts so advanced, together
with interest thereon at the Default Rate from and after the date of
advancement, shall be secured by this Mortgage and have the same priority of
collection as the principal of the Secured Obligations.
SECTION 20. LIABILITY OF MORTGAGOR NOT AFFECTED.
No sale of the Mortgaged Property, no forbearance on the part of the
Collateral Agent, no extension of the time for the payment of the Secured
Obligations and no change in the terms of the payment thereof consented to by
the Collateral Agent shall in any way whatsoever operate to release, discharge,
modify, change or affect the original liability of the Mortgagor hereunder or
the original liability of the Mortgagor or any other obligor under any of the
Secured Obligations, either in whole or in part. No waiver by the Collateral
Agent of any breach of any covenant of the Mortgagor herein contained shall be
construed as a waiver of any subsequent breach of the same or any other covenant
herein contained. The failure of the Collateral Agent and/or the Secured
Creditors to exercise the option for acceleration of maturity and/or foreclosure
(including sale under power of sale hereunder) following any default as
aforesaid or to exercise any other option granted to the Collateral Agent
hereunder in any one or more instances, or the acceptance by the Collateral
Agent and/or the Secured Creditors of partial payments hereunder shall not
constitute a waiver of any such default, nor extend or affect the grace period,
if any, but such option shall remain continuously in force with respect to any
unremedied or uncured default. Acceleration of maturity once claimed hereunder
by the Collateral Agent may, at the option of the Collateral Agent, be rescinded
by written acknowledgment to that effect by the Collateral Agent, but the tender
and acceptance of partial payments alone shall not in any way affect or rescind
such acceleration of maturity, or extend or affect the grace period, if any. The
Collateral Agent may pursue any of its rights without first exhausting its
rights hereunder and all rights, powers and remedies conferred upon the
Collateral Agent herein are in addition to each and every right which the
Collateral Agent may have hereunder at law or equity and may be enforced
concurrently therewith.
SECTION 21. REMEDIES CUMULATIVE.
Each remedy or right of the Collateral Agent shall not be exclusive of
but shall be in addition to every other remedy or right now or hereafter
existing at law or in equity. No delay in the exercise or omission to exercise
any remedy or right accruing on any default shall impair any such remedy or
right or be construed to be a waiver of any such default or acquiescence
therein, nor shall it affect any subsequent default of the same or of a
different nature. Every such remedy or right may be exercised concurrently or
independently and when and as often as may be deemed expedient by the Collateral
Agent.
25
<PAGE> 91
SECTION 22. COLLATERAL AGENT SUBROGATED
TO PRIOR LIENS PAID OUT OF LOAN PROCEEDS.
Should the proceeds of any Loans made by any Lender to the Mortgagor,
the repayment of which is hereby secured, or any part thereof, or any amount
paid out or advanced by the Collateral Agent or any Lender, be used directly or
indirectly to pay off, discharge or satisfy, in whole or in part, any prior lien
or encumbrance upon the Mortgaged Property or any part thereof, then the
Collateral Agent shall be subrogated to such other liens or encumbrances and
upon any additional security held by the holder thereof and shall have the
benefit of the priority of all of the same.
SECTION 23. FURTHER ASSURANCES.
The Mortgagor shall execute, acknowledge and deliver any and all such
further acts, conveyances, documents, mortgages and assurances as the Collateral
Agent may reasonably require for accomplishing the purpose hereof forthwith upon
the request of the Collateral Agent, whether in writing or otherwise. The
Mortgagor, within 10 days upon request by mail, shall furnish a written
statement duly acknowledged of the amount due upon this Mortgage and the Secured
Obligations (both unpaid principal and accrued interest and all other items
included in the Secured Obligations) and whether any offset or defenses exist
against the Secured Obligations, and any other information which might
reasonably be requested in connection with the sale of the Secured Obligations,
or any portion thereof or interest therein, to any third party, or an audit of
the Collateral Agent, and which may be relied on for such purposes.
SECTION 24. MORTGAGOR'S OBLIGATIONS ABSOLUTE.
The lien of this Mortgage and the obligations of the Mortgagor
hereunder shall be absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by, any circumstance or occurrence whatsoever,
including, without limitation:
(a) any lack of validity or enforceability of the Credit
Agreement, the Notes, any other Secured Debt Document, or any other
agreement or instrument relating thereto;
(b) any renewal, extension, amendment or modification of, or
addition or supplement to, or any waiver, consent, extension,
indulgence or other action or inaction under or in respect of, the
Credit Agreement, the Notes, any other Secured Debt Document, or any
other agreement or instrument relating thereto, including, without
limitation, any increase in the Secured Obligations resulting from the
extension of additional credit to the Borrower or any of its
Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Secured
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Secured Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Secured Obligations or any other assets of the Borrower or any of its
Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries;
(f) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating
to the Borrower or any of its Subsidiaries or Affiliates, or any
26
<PAGE> 92
action taken with respect to this Mortgage by any trustee or receiver,
or by any court, in any such proceeding, whether or not the Mortgagor
shall have notice or knowledge of any of the foregoing; or
(i) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Mortgagor as a guarantor
or surety for the Secured Obligations.
This Mortgage shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by the Collateral Agent or any Secured Creditor upon
the insolvency, bankruptcy or reorganization of the Borrower or any of its
Subsidiaries or Affiliates or otherwise, all as though such payment had not been
made.
SECTION 25. NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to the Mortgagor, at
9201 Washington Avenue, Racine, Wisconsin 54406, attention: Chief Financial
Officer (facsimile: ____________), with a copy to the Borrower at 32000 Aurora
Road, Solon, Ohio 44139, attention: Chief Financial Officer (facsimile:
(440) 519-0501); if to the Collateral Agent, at 1900 East Ninth Street,
Cleveland, Ohio 44114, attention Agent Services (facsimile: (216) 575-2481;
or at such other address as shall be designated by any such person in a written
notice to the other person. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and
shall be effective when received.
26. SUBORDINATION TO FIRST MORTGAGE.
The Mortgagor, and the Collateral Agent and each Secured Creditor by
their acceptance of the benefits hereof, hereby agree that:
(a) the liens, security interests and other rights granted by
this Mortgage shall be unconditionally subordinate and junior in all
respects to the liens, security interests and other rights granted by
the First Mortgage;
(b) unless the First Mortgage shall previously been terminated
and discharged, no action (whether judicial or pursuant to a power of
sale or otherwise) shall be instituted to foreclose or otherwise
enforce this Mortgage prior to the commencement of foreclosure or
similar proceedings under the First Mortgage, and then if any such
proceedings shall have been commenced under the First Mortgage, the
Collateral Agent may thereafter commence foreclosure proceedings
hereunder, but subject in any and all events to the overall control and
direction of the Collateral Agent under the First Mortgage;
(c) if any action (whether judicial or pursuant to a power of
sale) shall be instituted to foreclose or otherwise enforce this
Mortgage, no tenant of any of the leases affecting the Mortgaged
Property shall be named as a party defendant, and no action shall be
taken that would terminate any occupancy or tenancy without the prior
written consent of the Collateral Agent under the First Mortgage;
(d) rents, if collected by or for the Collateral Agent under
this Mortgage, shall be applied first to the payment of the Secured
Obligations secured by the First Mortgage and expenses incurred in the
ownership, operation and maintenance of the Mortgaged Property in such
order as the Collateral Agent under the First Mortgage may determine,
prior to being applied to any Secured Obligations secured by this
Mortgage;
27
<PAGE> 93
(e) a copy of any notice of default or Event of Default under
this Mortgage and of any written notice of the commencement of any
action (whether judicial or pursuant to a power of sale) to foreclose
or otherwise enforce this Mortgage shall be contemporaneously given to
the Collateral Agent under the First Mortgage; and
(f) the Collateral Agent under this Mortgage will execute such
intercreditor agreements and standstill agreements as the Collateral
Agent under the First Mortgage shall require and shall execute such
subordination, recognition, attornment and nondisturbance agreements as
the Collateral Agent under the First Mortgage or any existing or future
tenant of the Mortgaged Property may require.
27. DISCHARGE OF MORTGAGE; RELEASE.
(a) DISCHARGE OF MORTGAGE. After the Termination Date, this Mortgage
shall terminate (PROVIDED that all indemnities set forth herein shall survive
any such termination) and the Collateral Agent, at the request and expense of
the Mortgagor, will execute and deliver to the Mortgagor a proper instrument or
instruments acknowledging the satisfaction, discharge and termination of this
Mortgage as provided above, and will duly assign, transfer and deliver to the
Mortgagor (without recourse and without any representation or warranty) such of
the Collateral as may be in the possession of the Collateral Agent and as has
not theretofore been sold or otherwise applied or released pursuant to this
Mortgage, together with any monies at the time held by the Collateral Agent
hereunder.
As used herein, the term "TERMINATION DATE" shall mean the date when
(A) the Total Commitment under the Credit Agreement shall have
been terminated,
(B) no Credit Facility Note shall be outstanding under the
Credit Agreement,
(C) no Letter of Credit shall be outstanding under the Credit
Agreement (except for any Letter of Credit which is completely secured
by collateral consisting of cash or Cash Equivalents or is supported by
a letter of credit issued by another financial institution acceptable
to the Administrative Agent), and
(D) no other amounts are then payable by the Borrower to the
Administrative Agent or any Lender under the Credit Agreement,
UNLESS at such time either:
(x) an Event of Default under the Senior Note Indenture,
relating to a default in the payment when due of principal of or
interest on the Senior Notes, shall have occurred and be continuing,
the maturity of the Senior Notes shall have been accelerated, and the
Collateral Agent shall have received written notice from the Senior
Note Trustee to such effect, or
(y) an Event of Default under any Designated Hedge Agreement,
relating to a default in the payment when due by the Borrower or any of
its Subsidiaries or Affiliates of any amount thereunder shall have
occurred and be continuing, the Designated Hedge Creditor shall have
exercised termination of default rights as a result thereof, and the
Collateral Agent shall have received written notice from such
Designated Hedge Creditor to such effect.
(b) RELEASE OF COLLATERAL. In the event that any part of the Collateral
is sold in connection with a sale permitted by section 9.2 of the Credit
Agreement or is otherwise released at the direction of the Required Lenders (or
all the Lenders if required by section 13.12 of the Credit Agreement), and the
proceeds of such sale or sales or from such release are to be applied in
accordance with the terms of the Credit Agreement and the Senior Note
28
<PAGE> 94
Indenture to the extent required to be so applied, the Collateral Agent, at the
request and expense of the Mortgagor will release such Collateral from this
Mortgage, and will duly assign, transfer and deliver to the Mortgagor (without
recourse and without any representation or warranty) such of the Collateral as
is then being (or has been) so sold or released and as may be in possession of
the Collateral Agent and has not theretofore been released pursuant to this
Mortgage.
(c) Request for Release. At any time that the Mortgagor desires that
Collateral be released as provided in the foregoing section 27(a) or (b), it
shall deliver to the Collateral Agent a certificate signed by an executive
officer stating that the release of the respective Collateral is permitted
pursuant to section 27(a) or (b). The Collateral Agent shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this section 27.
28. WAIVER; AMENDMENT.
None of the terms and conditions of this Mortgage may be changed,
waived, modified or varied in any manner whatsoever unless in writing duly
signed by the Mortgagor and the Collateral Agent (with the consent of the
Required Lenders or, to the extent required by section 13.12 of the Credit
Agreement, all of the Lenders); PROVIDED, HOWEVER, that no such change, waiver,
modification or variance shall be made to this section 28 without the consent of
each Secured Creditor adversely affected thereby, PROVIDED FURTHER, that any
change, waiver, modification or variance affecting the rights and benefits of a
single Class of Secured Creditors (and not all Secured Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors of
such Class of Secured Creditors. For the purpose of this Mortgage, the term
"CLASS" shall mean each class of Secured Creditors, I.E., (x) the Lenders as
holders of the Credit Document Obligations, (y) the Senior Note Creditors as
holders of the Senior Note Document Obligations, or (z) the Designated Hedge
Creditors as holders of the Designated Hedge Obligations; and the term
"REQUISITE CREDITORS" of any Class shall mean (x) with respect to the Lenders as
holders of the Credit Document Obligations, the Required Lenders, (y) with
respect to the Senior Note Creditors as holders of the Senior Note Document
Obligations, the holders of at least a majority in aggregate principal amount of
the outstanding Senior Notes, and (z) with respect to the Designated Hedge
Creditors as holders of the Designated Hedge Obligations, the holders of at
least 51% of all outstanding Designated Hedge Obligations.
29. THE COLLATERAL AGENT.
The Collateral Agent will hold in accordance with this Mortgage all
items of the Collateral at any time received under this Mortgage. It is
expressly understood and agreed that the obligations of the Collateral Agent as
holder of the Collateral and interests therein and with respect to the
disposition thereof, and otherwise under this Mortgage, are only those expressly
set forth in this Mortgage. The Collateral Agent shall act hereunder on the
terms and conditions set forth herein and in section 11 of the Credit Agreement.
Unless the Collateral Agent has received written notice from the Senior Note
Trustee to the effect that an Event of Default has occurred and is continuing
under the Senior Note Indenture, the Collateral Agent may assume that no such
Event of Default is in existence; and unless the Collateral Agent has received
written notice from a Designated Hedge Creditor to the effect that an Event of
Default has occurred and is continuing under a Designated Hedge Agreement, the
Collateral Agent may assume that no such Event of Default is in existence.
29
<PAGE> 95
SECTION 30. MISCELLANEOUS.
(a) ACKNOWLEDGMENT OF RECEIPT OF COPIES OF SECURED DEBT DOCUMENTS. The
Mortgagor acknowledges that it has received from the Collateral Agent without
charge a true and correct copy of this Mortgage and each other Secured Debt
Document executed and delivered on or prior to the date hereof.
(b) INDEMNIFICATION. The Collateral Agent and its successors and
assigns shall be entitled to all of the benefits of the indemnification
provisions of the Credit Agreement and the other Credit Documents. All of the
terms and provisions of section 13.1 of the Credit Agreement (including any
defined terms used therein) are by this reference thereto hereby incorporated
into this Mortgage for the benefit of the Collateral Agent and its successors
and assigns as fully as if written out at length herein, and any references in
such section of the Credit Agreement to the "Borrower" shall be deemed to refer
to, and constitute obligations of, the Mortgagor.
(c) SUBSEQUENT SERVICES OF COUNSEL TO COLLATERAL AGENT. To the extent
services are required of the Collateral Agent's counsel and/or special counsel
after the date hereof, which are normally incident to the closing, amendment,
alteration, and enforcement of this Mortgage, and all provisions herein
contained, the Mortgagor shall, to the extent permitted by law, pay the
reasonable fees therefor, promptly upon the rendering of such a bill and
delivery thereof to the Mortgagor.
(d) NO PARTNERSHIP OR JOINT VENTURE. Neither this Mortgage, the Credit
Agreement, the Notes, or any other Secured Debt Documents, are intended or shall
be construed as creating a partnership or joint venture between the Mortgagor,
on the one hand, and the Collateral Agent or any other holder of any of the
Secured Obligations, on the other hand; and the relationship of the Mortgagor
and the Collateral Agent hereunder shall solely be that of Mortgagor and
collateral agent for the holders of the Secured Obligations.
(e) ELECTION OF COLLATERAL AGENT TO SUBORDINATE. At the option of the
Collateral Agent (acting on instructions from all of the Lenders), this Mortgage
shall become subject and subordinate in whole or in part (but not in respect to
the priority of entitlement to insurance proceeds or any award in condemnation)
to any or all leases and/or subleases of all or any part of the Mortgaged
Property upon the execution by the Collateral Agent and recording thereof, at
any time hereafter, in the appropriate recorder's office, a unilateral
declaration to that effect.
(f) WAIVER OF HOMESTEAD AND EXEMPTION RIGHTS, ETC. To the extent
permitted by law with respect to the Secured Obligations or any renewals or
extensions thereof, the Mortgagor waives and renounces any and all homestead and
exemption rights, as well as the benefit of all valuation and appraisement
privileges, and also moratoriums under or by virtue of the constitution and laws
of the jurisdiction in which the Real Property Collateral is located or any
other state or of the United States, now existing or hereafter enacted.
(g) COVENANTS RUN WITH THE LAND. All the covenants of the Mortgagor
contained in this Mortgage shall run with the Land.
(h) USURY SAVINGS CLAUSE. All agreements in the Credit Agreement, in
the Notes, in this Mortgage, or in any other Secured Debt Document are expressly
limited so that in no contingency or event whatsoever, whether by reason of
advancement or acceleration of maturity of any of the Secured Obligations, or
otherwise, shall the amount paid or agreed to be paid hereunder or thereunder
for interest or for the use, forbearance or detention of money exceed the
highest lawful rate permitted under applicable usury laws. If, from any
circumstance whatsoever, fulfillment of any provision of the Credit Agreement,
of the Notes, of this Mortgage, or of any other Secured Debt Document, at the
time performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by applicable usury laws which a court of competent
jurisdiction may deem applicable hereto, then, IPSO FACTO, the obligation to be
fulfilled shall be reduced to the limit of such validity and if, from any
circumstance whatsoever, the Collateral Agent or any Secured Creditor shall ever
receive hereunder or under the other Secured Debt Documents as interest, or for
the use, forbearance or detention of money, an amount which would exceed the
highest lawful rate, the receipt of such excess shall be deemed a mistake and
shall be canceled automatically or, if
30
<PAGE> 96
theretofore paid, such excess shall be credited against the principal amount of
the Secured Obligations or any fees or other amounts included in the Secured
Obligations to which the same may lawfully be credited, and any portion of such
excess not capable of being so credited shall be rebated to the Mortgagor.
(i) GOVERNING LAW; SUCCESSORS AND ASSIGNS; SEVERABILITY, ETC. This
Mortgage shall be construed and enforced according to the laws of the
jurisdiction in which the Real Property Collateral is located, and shall be
binding upon the Mortgagor, its successors and assigns, any subsequent owners of
the Mortgaged Property, and shall inure to the benefit of the Collateral Agent,
its successors and assigns. Any provision of this Mortgage which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(j) AGENCY PROVISIONS. By accepting the benefits of this Mortgage, each
Secured Creditor acknowledges and agrees that the rights and obligations of the
Collateral Agent shall be as set forth in section 11 of the Credit Agreement.
Notwithstanding anything to the contrary contained in of this Mortgage, the
duties and obligations of the Collateral Agent set forth or incorporated into
the provisions of this Mortgage may not be amended or modified without the
consent of the Collateral Agent.
(k) COLLATERAL AGENT TO ACT ON BEHALF OF SECURED CREDITORS. The Secured
Creditors agree by their acceptance of the benefits hereof that this Mortgage
may be enforced on their behalf only by the action of the Collateral Agent,
acting for the benefit of the Secured Creditors, equally and ratably, and that
no other Secured Creditor shall have any right individually to seek to enforce
or to enforce this Mortgage or to realize upon the security to be granted
hereby, it being understood and agreed that such rights and remedies may be
exercised by the Collateral Agent, for the benefit of the Secured Creditors,
upon the terms of this Mortgage. The Collateral Agent, in the exercise of any
such rights or remedies, may, but shall not be required to, rely upon the
instructions of the Requisite Creditors of each Class of Creditors whose Secured
Obligations remain outstanding at the time of instructions.
(l) WAIVER OF TRIAL BY JURY. THE MORTGAGOR AND THE COLLATERAL AGENT
EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
(m) TIME OF ESSENCE. It is specifically agreed that time is of the
essence with respect to this Mortgage and that the waiver of the rights or
options, or obligations secured hereby, shall not at any time thereafter be held
to be abandonment of such rights. Notice of the exercise of any right or option
granted to the Collateral Agent herein, or in the Secured Obligations, is not
required to be given.
(n) COUNTERPARTS. This Mortgage may be executed by the Mortgagor in
counterparts, each of which shall be an original and all of which collectively
shall constitute one and the same instrument.
31
<PAGE> 97
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed and delivered as of the date first set forth above.
SIGNED AND ACKNOWLEDGED IN THE PRESENCE OF: RUUD LIGHTING, INC.,
AS THE MORTGAGOR
- ----------------------------------------
PRINT NAME:
By:
--------------------------
ALAN J. RUUD, PRESIDENT
- ----------------------------------------
PRINT NAME:
32
<PAGE> 98
STATE OF WISCONSIN )
) SS.:
COUNTY OF RACINE )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared the above named RUUD LIGHTING, INC., a Wisconsin corporation, by ALAN
J. RUUD, its President, who acknowledged that he did sign the foregoing
instrument and that the same is his free act and deed personally and as such
officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at
Racine, Wisconsin, this ______ day of February, 1999.
-------------------------------
Notary Public
[Notarial Seal]
This Instrument Prepared By:
John W. Sager, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: (216) 586-7228
Facsimile: (216) 579-0212
33
<PAGE> 99
EXHIBIT 1
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
The following described real estate, to-wit:
PARCEL I: That part of the West 1/2 of the Southeast 1/4 of Section 16, Township
3 North, Range 22 East, bounded and described as follows: Commence at the South
1/4 corner of said Section; thence South 890 57' 16" East along the South line
of said 1/4 Section for a distance of 1331.33 feet, to a point; thence North 01
degrees 27' 21" West along the East line of the West 1/2 of said 1/4 Section for
a distance of 1098.55 feet, to the point of beginning, thence continuing along
said East line, North 01 degrees 27' 21" West for a distance of 733.61 feet, to
a point; thence North 99 degrees 41' 02" West for a distance of 632.40 feet, to
a point; thence South 01 degrees 26' 43" East for a distance of 736.59 feet, to
a point; thence South 88 degrees 57' 16" East for a distance of 632.45 feet, to
the point of beginning. Said land being in the Village of Sturtevant, County of
Racine, State of Wisconsin.
Tax Key No.: Part of 51-181-03-22-16-420-300
(Tax Key No. for 1996: 51-181-03-22-16-420-320)
PARCEL II: Parcel 1, Certified Survey Map No. 1126, recorded in the office of
the Register of Deeds for Racine County, Wisconsin, on April 18, 1986 in Volume
3 of Certified Survey Maps, at Page 314, as Document No. 1191396, being a part
of the Northeast 1/4 of the Southeast 1/4 of Section 16, Township 3 North,
Range 22 East. Said land being in the Village of Sturtevant, County of Racine,
State of Wisconsin.
Tax Key No.: 51-181-03-22-16-002-050.
[End of Exhibit 1]
<PAGE> 100
EXHIBIT 2
TO
OPEN-END FIRST MORTGAGE, ASSIGNMENT OF LEASES
AND SECURITY AGREEMENT
PERMITTED ENCUMBRANCES
1. Any liens thereon for taxes, assessments, charges, excises, levies and
other governmental charges which are not due and payable.
2. Any matters of record affecting the premises on the date this Mortgage
is recorded.
3. Zoning ordinances, if any.
[End of Exhibit 2]
<PAGE> 1
Exhibit 99.2
ADVANCED LIGHTING TECHNOLOGIES, INC.
32000 AURORA ROAD
SOLON, OHIO 44139
February 16, 1999
To the Administrative Agent
and each of the Lenders under
the Credit Agreement
referred to below
RE: FEE LETTER IN CONNECTION WITH CONSOLIDATED
AMENDMENT NO. 2 TO CREDIT AGREEMENT
------------------------------------------
Ladies and Gentlemen:
Referring to the Consolidated Amendment No. 2 to Credit Agreement,
dated as of February 12, 1999, among Advanced Lighting Technologies, Inc. (the
"BORROWER"), the Lenders named therein, and National City Bank, as the
Administrative Agent (the "ADMINISTRATIVE AGENT"), and to the Credit Agreement
referred to therein, as from time to time in effect (the "CREDIT AGREEMENT"),
this letter will confirm that the amount of the amendment fee referred to in
section 4(f) of such Consolidated Amendment No 2, is $200,000, which amount
shall be payable on February 16, 1999 (or in any event in immediately available
funds on the next Business Day). Such fee shall be nonrefundable.
This letter will also confirm the Borrower's unconditional obligation
to pay to the Administrative Agent, in immediately available funds, for
distribution among the Lenders in proportion to their respective Commitments, an
additional fee in the amount of $750,000, on June 30, 1999, in the event that,
for any reason, at and as of such date, any Loans or Letters of Credit or
Commitments then remain outstanding under the Credit Agreement.
This letter is for the benefit of the Administrative Agent and the
Lenders and shall be a binding agreement of the Borrower upon execution and
delivery hereof.
Very truly yours,
ADVANCED LIGHTING
TECHNOLOGIES, INC.
By: /s/ Nicholas R. Sucic
------------------------
Chief Financial Officer
