Exhibit 10.4
MORTGAGE, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS, AND FIXTURE FILING
from
AMERICAN ROCK SALT COMPANY LLC, a New York
limited liability company
and
XXXXXXXXXX COUNTY INDUSTRIAL DEVELOPMENT AGENCY, a New York
public benefit corporation, collectively,
Mortgagor
to
MANUFACTURERS AND TRADERS TRUST COMPANY, a
New York corporation, Mortgagee
DATED AS OF MARCH 17, 2004
After recording, please return to:
Xxxxx Xxxxxx Xxxxxx LLP
000 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: W. Xxxxxxx Xxxxxxx, Esq.
"THE MINERAL INTERESTS INCLUDED IN THE MORTGAGED PROPERTY WILL BE FINANCED AT
THE MINES LOCATED ON THE PROPERTIES DESCRIBED IN SCHEDULE A-I AND SCHEDULE A-II
HERETO, AND THIS INSTRUMENT IS TO BE FILED FOR RECORD AS A FINANCING STATEMENT,
AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS."
MORTGAGE, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT,
ASSIGNMENT
OF LEASES AND RENTS, AND FIXTURE FILING
THIS MORTGAGE, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT, ASSIGNMENT OF
LEASES AND RENTS, AND FIXTURE FILING (this "Mortgage"), dated as of March 17,
2004 is made by AMERICAN ROCK SALT COMPANY LLC, a New York limited liability
company (the "Company") whose address is 0000 Xxxxxx Xxxx, Xxxxxx, Xxx Xxxx
00000, and XXXXXXXXXX COUNTY INDUSTRIAL DEVELOPMENT AGENCY, a public benefit
corporation of the state of New York (the "XXX"; the Company and the XXX are
collectively referred to herein as "Mortgagor"), whose address is Xxxxxxxxxx
County Government Center, 0 Xxxxx Xxxxxx, Xxxx 000, Xxxxxxx, Xxx Xxxx
00000-0000, to MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation, as the Letters of Credit Issuer, arranger for the credit
facilities, as administrative agent for the Lenders (as defined below), and as
collateral agent for the Lenders, whose address is One M&T Plaza, Buffalo, New
York 14240 (in such capacity, "Mortgagee"). References to this "Mortgage" shall
mean this instrument and any and all renewals, modifications, amendments,
supplements, extensions, consolidations, substitutions, spreaders and
replacements of this instrument.
Background
A. The Company has entered into the Credit Agreement dated as of the date
hereof (as the same may be amended, supplemented, restated, or otherwise
modified from time to time, the "Credit Agreement") with Mortgagee and the
several banks and other financial institutions from time to time parties thereto
(the "Lenders"). The terms of the Credit Agreement are incorporated by reference
in this Mortgage as if the terms were fully set forth herein. Capitalized terms
not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement.
B. The XXX is the owner of the parcel(s) of real property described on
Schedule A-I attached hereto (the "Leased Land"; such Land, together with all of
the buildings, improvements, structures and fixtures now or subsequently located
thereon (the "Improvements"), being collectively referred to as the "Leased
Premises").
C. The Company is the owner of a leasehold interest in the Leased Premises
pursuant that Lease Agreement with the XXX dated September 1, 1998, as amended
by Amendment No. 1 to Lease Agreement dated even date herewith ("Mortgaged
Lease").
D. The Company is the owner of certain mineral rights and interests in the
real property described on Schedule A-II attached hereto (the "Salt Premises",
the Leased Premises and the Salt Premises, collectively, the "Real Estate").
E. Pursuant to the terms and conditions of the Credit Agreement, the
Lenders have agreed to make extensions of credit to the Borrower upon the terms
and conditions set forth therein in an amount not to exceed $62,141,113.50
(together with each obligation, term, covenant and condition to be performed or
observed by the Company, any Subsidiary and/or Guarantor and/or the XXX under or
in connection with the Credit Agreement or any other Loan Document, the
"Obligations").
F. It is a condition precedent to the obligations of the Lenders to make
the various extensions of credit under the Credit Agreement that the Mortgagor
secure repayment of the Obligations by executing and delivering this Mortgage.
Granting Clauses
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Mortgagor agrees that to secure the Obligations:
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE ALL OF
MORTGAGOR'S RIGHT, TITLE AND INTEREST, NOW HAD OR HEREAFTER ACQUIRED, IN AND TO:
(A) the Real Estate;
(B) the leasehold estate created under and by virtue of the Mortgaged
Lease, any interest in any fee, greater or lesser title to the Leased Land
and Improvements located thereon that Mortgagor may own or hereafter
acquire (whether acquired pursuant to a right or option contained in the
Mortgaged Lease or otherwise) and all credits, deposits, options,
privileges and rights of Mortgagor under the Mortgaged Lease (including all
rights of use, occupancy and enjoyment) and under any amendments,
supplements, extensions, renewals, restatements, replacements and
modifications thereof (including, without limitation, (i) the right to give
consents, (ii) the right to receive moneys payable to Mortgagor, (iii) the
right, if any, to renew or extend the Mortgaged Lease for a succeeding term
or terms, (iv) the right, if any, to purchase the Leased Land and
Improvements located thereon and (v) the right to terminate or modify the
Mortgaged Lease); all of Mortgagor's claims and rights to the payment of
damages arising under the Bankruptcy Code (as defined below) from any
rejection of the Mortgaged Lease by the lessor thereunder or any other
party;
(C) the Improvements or any part thereof (whether owned in fee by
Mortgagor or held pursuant to the Mortgaged Lease or otherwise) and all the
estate, right, title, claim or demand whatsoever of Mortgagor, in
possession or expectancy, in and to the Real Estate or any part thereof;
(D) all options to acquire right, title and interest of Mortgagor in,
to and under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and riparian
rights, development rights, air rights, mineral rights and all estates,
rights, titles, interests, privileges, licenses, tenements, hereditaments
and appurtenances belonging, relating or appertaining to the Real Estate,
and any reversions, remainders, rents, issues, profits and revenue thereof
and all land lying in the bed of any street, road or avenue, in front of or
adjoining the Real Estate to the center line thereof;
(E) all of the fixtures, chattels, business machines, machinery,
apparatus, equipment, furnishings, fittings and articles of personal
property of every kind and nature whatsoever, and all appurtenances and
additions thereto and substitutions or replacements thereof (together with,
in each case, attachments, components, parts and accessories) currently
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owned or subsequently acquired by Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in connection
with any operation or letting of the Real Estate, including but without
limiting the generality of the foregoing, all screens, awnings, shades,
blinds, curtains, draperies, artwork, carpets, rugs, storm doors and
windows, furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air conditioning
and air-cooling apparatus, refrigerating, and incinerating equipment,
escalators, elevators, loading and unloading equipment and systems, stoves,
ranges, laundry equipment, cleaning systems (including window cleaning
apparatus), telephones, communication systems (including satellite dishes
and antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems,
motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description (all of the foregoing
in this paragraph being referred to as the "Equipment");
(F) the Real Estate and the Equipment, subsequently acquired by or
released to Mortgagor or constructed, assembled or placed by Mortgagor on
the Real Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials whether stored at the Real Estate or offsite, and, in
each such case, without any further mortgage, conveyance, assignment or
other act by Mortgagor;
(G) all leases, subleases, underlettings, partnerships (including
mining partnerships), exploration agreements, surface use and damage
agreements, subsidence agreements, concession agreements, management
agreements, licenses and other agreements relating to the use or occupancy
of the Real Estate or the Equipment or any part thereof, now existing or
subsequently entered into by Mortgagor and whether written or oral and all
guarantees of any of the foregoing (collectively, as any of the foregoing
may be amended, restated, extended, renewed or modified from time to time,
the "Agreements"), and all rights of Mortgagor in respect of cash and
securities deposited thereunder and the right to receive and collect the
revenues, income, rents, issues and profits thereof, together with all
other rents, royalties, issues, profits, revenue, income and other benefits
arising from the use and enjoyment of the Mortgaged Property (as defined
below) (collectively, the "Rents");
(H) all trade names, trade marks, logos, copyrights, good will and
books and records relating to or used in connection with the operation of
the Real Estate or the Equipment or any part thereof; all general
intangibles related to the operation of the Improvements now existing or
hereafter arising;
(I) all unearned premiums under insurance policies now or subsequently
obtained by Mortgagor relating to the Real Estate or Equipment and
Mortgagor's interest in and to all proceeds of any such insurance policies
(including title insurance policies) including the right to collect and
receive such proceeds, subject to the provisions relating to insurance
generally set forth below; and all awards and other compensation, including
the interest payable thereon and the right to collect and receive the same,
made to the present or any subsequent owner of the Real Estate or Equipment
for the taking by eminent domain,
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condemnation or otherwise, of all or any part of the Real Estate or any
easement or other right therein;
(J) (i) all contracts from time to time executed by Mortgagor or any
manager or agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the Real
Estate or Equipment or any part thereof and all agreements relating to the
purchase or lease of any portion of the Real Estate or any property which
is adjacent or peripheral to the Real Estate, together with the right to
exercise such options and all leases of Equipment (collectively, the
"Contracts"), (ii) all consents, licenses, building permits, certificates
of occupancy and other governmental approvals relating to construction,
completion, occupancy, use or operation of the Real Estate or any part
thereof (collectively, the "Permits") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "Plans");
(K) any and all monies now or subsequently on deposit for the payment
of real estate taxes or special assessments against the Real Estate or for
the payment of premiums on insurance policies covering the foregoing
property or otherwise on deposit with or held by Mortgagee as provided in
this Mortgage; all capital, operating, reserve or similar accounts held by
or on behalf of Mortgagor and related to the operation of the Mortgaged
Property, whether now existing or hereafter arising and all monies held in
any of the foregoing accounts and any certificates or instruments related
to or evidencing such accounts;
(L) all accounts and revenues arising from the operation of the
Improvements including, without limitation, any right to payment now
existing or hereafter arising for rental of space or for goods sold or
leased or for services rendered, whether or not yet earned by performance,
arising from the operation of the Improvements or any other facility on the
Mortgaged Property; and
(M) the Mines. "Mine or "Mines" shall mean all tangible property
(whether now or hereafter existing or acquired, and whether real, personal,
or mixed) located or found now or hereafter on, in, or under all or any
part of the Real Estate (or any other lands any production from which, or
profits or proceeds from such production, is attributed to any interest in
the Real Estate) that now or hereafter is (together with all substitutions
and replacements for, and all accessions, additions, and attachments to any
thereof) used or useful in connection with mining salt or Other Minerals
(which as used herein shall include ores and concentrates bearing the same)
or in connection with any related activities, including, without
limitation:
(i) exploration for and evaluation of deposits of salt or Other
Minerals;
(ii) development, operation, shutdown, and closure (temporary and
permanent) of a mine (whether an underground or a surface
mine);
(iii) handling, processing, refining and beneficiation of salt or
Other Minerals, including, without limitation, crushing,
screening, non-screen classifying, grinding, flotation,
washing, gravity separation,
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magnetic separation, chemical leaching, thickening,
filtration, drying, calcining;
(iv) storage of salt or Other Minerals;
(v) transportation of salt or Other Minerals by any means,
including, without limitation, haulage within a mine and
from a mine to a mill or to any other handling, processing,
beneficiation, storage, or marketing location, haulage
between any of the foregoing locations, haulage of mine
waste (including, without limitation, waste rock and
overburden) and tailings, slag, and other wastes resulting
from handling, processing, and beneficiation, and loading in
connection with any haulage;
(vi) marketing, and readying for market, salt or Other Minerals;
(vii) disposal (temporary and permanent) of mine waste
(including, without limitation, waste rock and overburden)
and tailings, slag, and other wastes from handling,
processing, and beneficiation;
(viii) monitoring, maintaining, restoring, and improving
environmental quality, including, without limitation,
elimination, treatment, and mitigation of air and water
pollution; and
(ix) reclamation of lands and other natural resources affected by
any of the foregoing activities.
Without restricting the foregoing, "Mine" and/or "Mines" shall
include, without limitation, the Real Estate and the following
property (together with all substitutions and replacements for, and
all accessions, additions and attachments to any thereof) now or
hereafter used or useful in connection with mining salt or Other
Minerals or in connection with related activities:
(a) generally -- buildings; fixtures; equipment; facilities;
machinery; tools; vehicles; goods; supplies; and inventory.
specifically -- headframes; mine offices; maintenance and equipment
repair shops; carpentry, tool, and electrical shops; parts and
supplies warehouses; change houses; laboratory and assay facilities;
ore bins; air compressors; electrical generators and buildings for
same; dynamos; staff, workers', and families' living and eating
facilities; ventilation shafts and ducts; fans; refrigeration units;
underground workings (including, without limitation, adits, shafts,
tunnels, crosscuts, laterals, drifts, raises, winzes, stopes,
longwalls, and other openings to ore); pump rooms; underground hoist
rooms; level stations; underground equipment and machinery storage and
repair areas; escape shafts; ore storage areas; storehouses; hoist
houses, drums, controls, and motors; wire rope for hoists; ore skips
and man cars; timber; roof supports; track (including, without
limitation, branch, cut-off, spur, industrial, switch, connecting,
storage, yard, terminal, and
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other railroad tracks); roads and haulage ways; conveyor belts;
electrical wire, apparatus, and controls (including, without
limitation, transformers and switch boxes); pipe; water and fuel
supply tanks and pumps; rolling stock, including locomotives and cars;
mine vehicles; drills and related equipment; explosives and explosives
storage facilities; continuous miner machines; mucking equipment;
loaders and loading equipment; tipples; dewatering facilities,
including pumps; sewage facilities; waste water treatment and disposal
facilities; ditches, water drainage courses, dams, and silt ponds;
xxxxx for the extraction or injection of water or for the monitoring
of water supply or quality; telephones and other communications
equipment; pipelines (including, without limitation, slurry and
pneumatic pipelines); tractors; scrapers; power shovels; backhoes;
bucket-wheel excavators; draglines; dredges; haulage and water and
maintenance trucks; inclined skips; graders; electrical power lines;
mill or processing plants; loading docks; sluices; xxxxx; augers;
overburden, waste rock or spoil, and other mine wastes; load-haul-dump
vehicles; conveyors (including, without limitation, screw and bucket
conveyors); crushers (including, without limitation, jaw crushers,
gyratory crushers, wire crushers, impact crushers, roll crushers,
hammer xxxxx, shredders, and roller xxxxx); screens (including,
without limitation, grizzlies); grinding xxxxx (including, without
limitation, ball xxxxx, xxx xxxxx, autogenous xxxxx and
semi-autogenous xxxxx); flotation circuits (including, without
limitation, flotation cells, collection troughs and launders and
flumes); washers (including, without limitation, hydrocyclones);
gravity separation devices (including, without limitation, jigs,
sluices, shaking tables, cones, spirals, vanners, and heavy liquids);
magnets; leaching circuits; thickening tanks; filters (including,
without limitation, drum, disk, belt, and plate filters); driers;
kilns; converters; slag; tailings; and tailings ponds.
(N) the Operating Equipment and Facilities. "Operating Equipment and
Facilities" shall mean all surface or subsurface machinery, equipment,
facilities, supplies or other property of whatsoever kind or nature now or
hereafter located on or under any of the Real Estate which are useful for
the production, processing, preparation, storage or transportation of salt
or Other Minerals, including, but not by way of limitation, all items of
personal property or fixtures comprising each Mine.
(O) the Production Sale Contracts. "Production Sale Contracts" shall
mean contracts, if any, now in effect, or hereafter entered into by
Mortgagor, or entered into by Mortgagor's predecessors in interest, for the
sale, purchase, exchange, supply, handling, processing, refining,
beneficiation, marketing and/or transportation of salt or Other Minerals
(i) produced from all or any part of the Real Estate or from any other
lands any production from which, or profits or proceeds from such
production, is attributable to any interest in the Real Estate or (ii)
produced from other lands not encumbered by this Mortgage.
(P) the Water Rights. "Water Rights" shall mean all now or hereafter
existing or acquired water and water rights, reservoirs and reservoir
rights, ditches and ditch rights, xxxxx and well rights, whether evidenced
or initiated by permit, decree, well
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registration, appropriation not decreed, water court application, shares of
stock or other interests in mutual ditch or reservoir companies or carrier
ditch or reservoir companies or otherwise, appertaining or appurtenant to
or beneficially used or useful in connection with the Real Estate and/or
each Mine, together with all pumps, well casings, wellheads, electrical
installations, pumphouses, meters, monitoring systems, xxxxxxxx flumes or
other measuring devices, pipes, pipelines, and other structures or personal
property which are or may be used to produce, regulate, measure,
distribute, store, or use water from the said water and water rights,
reservoirs and reservoir rights, ditches and ditch rights, xxxxx and well
rights.
(Q) the salt and Other Minerals that are:
(i) on, in, or under, extending from or into--
(ii) produced or to be produced from--
(iii) stored, handled, processed, refined or beneficiated or to
be stored, handled, processed, refined or beneficiated
on--and/or
(iv) transported or marketed or to be transported or marketed on
or from--
all or any part of the Lands or any other lands any production
from which (or profits or proceeds from such production) is
attributed to any interest in Lands or any interest described in
Exhibit A-II;
(R) and, in any event, all general intangibles, accounts, as-extracted
collateral, contract rights, chattel paper, documents, goods, equipment,
fixtures, inventory, instruments and proceeds, all as defined in the
Uniform Commercial Code as in effect in New York State from time to time,
together with any and all corrections or amendments to, or renewals,
extensions or ratifications of, or replacements or substitutions for, any
of the same, or any instrument relating thereto, and all contracts,
contract rights, title instruments, title opinions, land status reports,
title abstracts, title materials and information, files, records, writings,
data bases, information, systems, maps, plats, surveys, geological and
geophysical (including, without limitation, electrical, electromagnetic,
gravity, and seismic), geochemical, and radiometric data and information,
drilling data, test data, mineral samples (including, without limitation,
drill cores), mineral assay reports, interpretative and analytical reports
of any kind or nature (including, without limitation, reserve or deposit
studies or evaluations), mine feasibility reports, mine development studies
and plans, information concerning exploration and development of deposits
of salt and Other Minerals (including information concerning mine
operation, shutdown, and closure and concerning reclamation of lands and
other resources affected by mining), environmental data and related
information and reports and studies, computer hardware and software and all
documentation therefor or relating thereto (including, without limitation,
all licenses relating to or covering such computer hardware, software
and/or documentation), trade secrets, business names and the goodwill
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of the business relating thereto, unpatented inventions, lease records
(including rental and royalty payment records), the Permits and records and
information concerning compliance with the Permits, mine development
programs and budgets, financial statements and audits, reclamation plans
and related data and reports, insurance policies, information and data and
reports regarding the products and proceeds of mine operations (including,
without limitation, quantities produced, proceeds from sale or other
disposition, and disbursement of proceeds to persons entitled to a share
thereof), information and data and reports regarding all aspects of any and
all Mines (including, without limitation, transportation and marketing of
mine products), rights-of-way, franchises, easements, servitudes, permits,
licenses, tenements, hereditaments, appurtenances, condemnation awards,
rents, royalties, overriding royalties, revenues, income, returns, issues,
profits, products and proceeds, whether now or hereafter existing or
arising, used or useful in connection with, covering, relating to, or
arising from or in connection with, any of the aforesaid in this granting
clause referenced, and all other things of value and incident thereto which
Mortgagor might at any time have or be entitled to (including, without
limitation, any and all liens, lien rights and security interests, and all
properties, rights and interests, whether now or hereafter existing or
arising, that may be used or useful in connection with mining salt or Other
Minerals from all or any part of the Lands, or any other lands any
production from which, or the profits or proceeds from such production, is
attributed to any interest in the Lands or to any interest described in
Schedule A-II, or in connection with any related activities),.
(S) all proceeds, both cash and noncash, of the foregoing;
All of the foregoing property and rights and interests now owned or held or
subsequently acquired by Mortgagor and described in the foregoing clauses (A)
through (E) are collectively referred to as the "Premises", and those described
in the foregoing clauses (A) through (S) are collectively referred to as the
"Mortgaged Property".
TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges
hereby mortgaged unto Mortgagee, its successors and assigns for the uses and
purposes set forth, until the Obligations are fully paid and fully performed.
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees with Mortgagee
as follows:
1. Warranty of Title. Mortgagor warrants that it has good record title in
fee simple to, or a valid leasehold interest in, the Real Estate, and good title
to, or a valid leasehold interest in, the rest of the Mortgaged Property,
subject only to the matters that are set forth in Schedule B of the title
insurance policy being issued to Mortgagee to insure the lien of this Mortgage
(the "Permitted Exceptions"). Mortgagor shall warrant, defend and preserve such
title and the lien of this Mortgage against all claims of all persons and
entities. Mortgagor represents and warrants that (i) it has the right to
mortgage the Mortgaged Property; (ii) the Mortgaged Lease is in full force and
effect and Mortgagor is the holder of the lessee's or tenant's interest
thereunder; (iii) the Mortgaged Lease has not been amended, supplemented or
otherwise modified; (iv) Mortgagor has
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paid all rents and other charges to the extent due and payable under the
Mortgaged Lease, is not in default under the Mortgaged Lease, has received no
notice of default thereunder and knows of no material default thereunder; and
(v) the granting of this Mortgage does not violate the terms of the Mortgaged
Lease nor is any consent under the Mortgaged Lease required to be obtained in
connection with the granting of this Mortgage unless such consent has been
obtained.
2. Payment of Indebtedness. Mortgagor shall pay the indebtedness at the
times and places and in the manner specified in the Credit Agreement and shall
perform all the Obligations.
3. Requirements. (a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall not by
act or omission permit any building or other improvement on any premises not
subject to the lien of this Mortgage to rely on the Premises or any part thereof
or any interest therein to fulfill any Legal Requirement, and Mortgagor hereby
assigns to Mortgagee any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used. Mortgagor shall not by
act or omission impair the integrity of any of the Real Estate as a single
zoning lot separate and apart from all other premises. Mortgagor represents that
each parcel of the Leased Land constitutes a legally subdivided lot, in
compliance with all subdivision laws and similar Legal Requirements. Any act or
omission by Mortgagor which would result in a violation of any of the provisions
of this subsection shall be void.
(c) Do or cause to be done all things necessary to keep unimpaired
Mortgagor's rights in the Real Estate and not, except in the ordinary course of
Company's business or except as may be permitted under the terms of the Credit
Agreement, abandon any Mine or forfeit, surrender or release any interest in any
Mine or any rights in the Real Estate , without the prior written consent of
Mortgagee, which consent shall not be unreasonably withheld, conditioned or
delayed;
(d) Cause each Mine and each mine opened hereafter to be regularly
operated, maintained, developed and mined for salt and Other Minerals (to the
extent of Mortgagor's interest therein) in a good and workmanlike manner as
would a prudent salt mine operator and processor, and in accordance with
generally accepted mining practices and applicable operating agreements, and, in
all material respects, all applicable Permits, and federal, tribal, state and
local
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laws, rules and regulations, excepting those laws, rules and regulations being
promptly contested in good faith and by appropriate proceedings promptly
initiated and diligently conducted and as to which adequate reserves in
accordance with generally accepted accounting principles have been set aside in
the event that such proceedings are unsuccessful and Mortgagor must comply with
such laws, rules and regulations;
(e) With respect to each Production Sale Contract,
(1) Take, or cause to be taken, all actions (A) required by the
terms thereof in order to maintain the continuing existence and validity thereof
and the interests and rights created thereby and (B) necessary to prevent any
default thereunder, unless such action would have an adverse effect on the
business operations of the Company; and
(2) Not enter into any amendments, modifications, waivers or
consents with respect thereto which would substantially impair the value of such
Production Sale Contracts to Mortgagor;
(f) Cause to be paid, promptly as and when due and payable, all
rentals and royalties payable in respect of the Real Estate, and all expenses
incurred in or arising from the operation or development of the Real Estate;
(g) Do all things necessary to maintain, preserve, protect and keep
the Operating Equipment and Facilities and other personal property comprising a
portion of a Mine in good repair, working order and condition (allowing, in the
case of equipment, for ordinary wear and tear to the extent not preventable by
regular maintenance) and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times;
(h) Obtain and keep in full force and effect all Agreements and
Permits necessary to use, own, develop, occupy, operate and conduct exploration
and production operations on the Real Estate;
(i) Make all payments required by and substantially perform and comply
with all material terms, provisions, covenants, conditions and agreements
imposed upon or assumed by Mortgagor under any of the Agreements, including any
amendments or supplements thereto, in order that the Agreements shall remain in
full force and effect;
(j) Not surrender, terminate or cancel, or suffer any termination or
cancellation of, or consent to any material alteration, modification, amendment,
supplement or change to or in, (1) any Agreement then being used in mining
operations, or (2) any other Agreement, except as may be permitted under the
terms of the Credit Agreement, without first obtaining Mortgagee's prior written
consent which consent shall not be unreasonably withheld, conditioned or
delayed;
(k) Do or cause to be done all acts necessary to ensure that at all
times while any of the Obligations are outstanding the Real Estate contain or
have the benefit of, whether through
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the ownership or assignment of Water Rights, sufficient water for the use,
development, operation, exploration, production and processing on or in
connection with the Real Estate.
4. Payment of Taxes and Other Impositions. (a) Promptly when due, Mortgagor
shall pay and discharge all Taxes of every kind and nature (including, without
limitation, all taxes, payments in lieu of taxes, and fees), all charges for any
easement or agreement maintained for the benefit of any of the Mortgaged
Property, all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and charges, vault taxes, and all other
public charges even if unforeseen or extraordinary, imposed upon or assessed
against or which may become a lien on any of the Mortgaged Property, or arising
in respect of the occupancy, use or possession thereof, together with any
penalties or interest on any of the foregoing (all of the foregoing are
collectively referred to as the "Impositions"). Upon request by Mortgagee,
Mortgagor shall deliver to Mortgagee (i) original or copies of receipted bills
and canceled checks evidencing payment of such Imposition if it is a real estate
tax or other public charge and (ii) evidence acceptable to Mortgagee showing the
payment of any other such Imposition. If by law any Imposition, at Mortgagor's
option, may be paid in installments (whether or not interest shall accrue on the
unpaid balance of such Imposition), Mortgagor may elect to pay such Imposition
in such installments and shall be responsible for the payment of such
installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of Mortgagee under
this Mortgage or otherwise, without notice or demand to Mortgagor, to pay any
Imposition after the date such Imposition shall have become due. Any sums paid
by Mortgagee in discharge of any Impositions shall be payable on demand by
Mortgagor to Mortgagee together with interest at the Default Rate.
(c) Mortgagor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Mortgage or on any interest
payable thereon for any taxes assessed against the Mortgaged Property or any
part thereof, and shall not claim any deduction from the taxable value of the
Mortgaged Property by reason of this Mortgage.
(d) Mortgagor shall have the right before any delinquency occurs to
contest or object in good faith to the amount or validity of any Imposition.
(e) Upon written notice to Mortgagor, Mortgagee after and during the
occurrence of an Event of Default (as defined below) shall be entitled to
require Mortgagor to pay monthly in advance to Mortgagee the equivalent of
1/12th of the estimated annual Impositions. Mortgagee may commingle such funds
with its own funds and Mortgagor shall not be entitled to interest thereon.
5. Insurance. Mortgagor shall maintain or cause to be maintained on all of
the Premises such insurance as set forth in the Credit Agreement. In addition,
if any portion of the Premises are located in an area identified as a special
flood hazard area by the Federal Emergency Management Agency or other applicable
agency, flood insurance in amounts as are commonly carried by persons occupying
or using like properties in the locality or localities in
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which the Real Estate is situated, but in no event less than the maximum limit
of coverage available under the National Flood Insurance Act of 1968, as
amended.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be canceled, non-renewed or materially
amended without 30-days' prior written notice to Mortgagee, and (ii) with
respect to all property insurance, provide for deductibles not to exceed
$250,000.00, contain a "Replacement Cost Endorsement" without any deduction made
for depreciation and with no co-insurance penalty (or attaching an agreed amount
endorsement satisfactory to Mortgagee), with loss payable solely to Mortgagee
(modified, if necessary, to provide that proceeds in the amount of replacement
cost may be retained by Mortgagee without the obligation to rebuild) as its
interest may appear, without contribution, under a "standard" or "New York"
mortgagee clause acceptable to Mortgagee and be written by insurance companies
having an A.M. Best Company, Inc. rating of A minus or higher and a financial
size category as set forth in the Credit Agreement. Liability insurance policies
shall name Mortgagee as additional insured and contain a waiver of subrogation
against Mortgagee; all such policies shall indemnify and hold Mortgagee harmless
form all liability claims occurring on, in or about the Premises and the
adjoining streets, sidewalks and passageways. The amounts of each insurance
policy and the form of each insurance policy shall at all times be satisfactory
to Mortgagee. Each policy shall expressly provide that any proceeds which are
payable to Mortgagee shall be paid by check payable to the order of Mortgagee
only and requiring the endorsement of Mortgagee only. If any required insurance
shall expire, be withdrawn, become void by breach of any condition thereof by
Mortgagor or by any lessee of any part of the Mortgaged Property or become void
or unsafe by reason of the failure or impairment of the capital of any insurer,
or if for any other reasons whatsoever such insurance shall become
unsatisfactory to Mortgagee, Mortgagor shall immediately obtain new or
additional insurance satisfactory to Mortgagee. Mortgagor shall not take out any
separate or additional insurance which is contributing in the event of loss
unless it is properly endorsed and otherwise satisfactory to Mortgagee in all
respects.
(b) Mortgagor shall deliver to Mortgagee a copy of each insurance policy
required to be maintained, or a certificate of such insurance acceptable to
Mortgagee, together with a copy of the declaration page for each such policy.
Mortgagor shall (i) pay as they become due all premiums for such insurance, (ii)
not later than 15 days prior to the expiration of each policy to be furnished
pursuant to the provisions of this Section, deliver a renewed policy or
policies, or duplicate original or originals thereof, marked "premium paid", or
accompanied by such other evidence of payment satisfactory to Mortgagee with
standard non-contributory mortgage clauses in favor of and acceptable to
Mortgagee. Mortgagor shall cause its insurance underwriter or broker to certify
to Mortgagee in writing that all the requirements of this Mortgage governing
insurance have been satisfied.
(c) If Mortgagor is in default of its obligations to insure or deliver any
such prepaid policy or policies, then Mortgagee, at its option and without
notice, may effect such insurance from year to year, and pay the premium or
premiums therefor, and Mortgagor shall pay to Mortgagee on demand such premium
or premiums so paid by Mortgagee with interest from the time of payment at the
Default Rate.
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(d) Mortgagor promptly shall comply with and conform to (i) all provisions
of each such insurance policy, and (ii) all requirements of the insurers
applicable to Mortgagor or to any of the Mortgaged Property or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. Mortgagor shall not use or permit the
use of the Mortgaged Property in any manner which would permit any insurer to
cancel any insurance policy or void coverage required to be maintained by this
Mortgage.
(e) If the Mortgaged Property, or any part thereof, shall be destroyed or
damaged by fire or any other casualty, whether insured or uninsured, or in the
event any claim is made against Mortgagor for any personal injury, bodily injury
or property damage incurred on or about the Premises, Mortgagor shall give
immediate notice thereof to Mortgagee. Provided that no Event of Default shall
have occurred and be continuing, Mortgagor shall have the right to adjust such
loss, and the insurance proceeds relating to such loss may be paid over to
Mortgagor pursuant to the Credit Agreement.
(f) In the event of foreclosure of this Mortgage or other transfer of title
to the Mortgaged Property in extinguishment of the Obligations, all right, title
and interest of Mortgagor in and to any insurance policies then in force shall
pass to the purchaser or grantee and Mortgagor hereby appoints Mortgagee its
attorney-in-fact, in Mortgagor's name, to assign and transfer all such policies
and proceeds to such purchaser or grantee.
(g) Upon written notice to Mortgagor, Mortgagee after an Event of Default
shall be entitled to require Mortgagor to pay monthly in advance to Mortgagee
the equivalent of 1/12th of the estimated annual premiums due on such insurance.
Mortgagee may commingle such funds with its own funds and Mortgagor shall not be
entitled to interest thereon.
(h) Mortgagor may maintain insurance required under this Mortgage by means
of one or more blanket insurance policies maintained by Mortgagor; provided,
however, that (A) any such policy shall specify, or Mortgagor shall furnish to
Mortgagee a written statement from the insurer so specifying, the maximum amount
of the total insurance afforded by such blanket policy that is allocated to the
Premises and the other Mortgaged Property and any sublimits in such blanket
policy applicable to the Premises and the other Mortgaged Property, (B) each
such blanket policy shall include an endorsement providing that, in the event of
a loss resulting from an insured peril, insurance proceeds shall be allocated to
the Mortgaged Property in an amount equal to the coverages required to be
maintained by Mortgagor as provided above and (C) the protection afforded under
any such blanket policy shall be no less than that which would have been
afforded under a separate policy or policies relating only to the Mortgaged
Property.
6. Restrictions on Liens and Encumbrances. Except for the lien of this
Mortgage, the Permitted Exceptions, and except as permitted by the Credit
Agreement, Mortgagor shall not further mortgage, nor otherwise encumber the
Mortgaged Property nor create or suffer to exist any lien, charge or encumbrance
on the Mortgaged Property, or any part thereof, whether superior or subordinate
to the lien of this Mortgage and whether recourse or non-recourse.
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7. Due on Sale. Except as provided in the Credit Agreement, Mortgagor shall
not, without the prior written consent of Mortgagee, sell, transfer, convey or
assign all or any portion of, or any interest in, the Mortgaged Property.
8. Maintenance; No Alteration: Inspection; Utilities. (a) Mortgagor shall
maintain or cause to be maintained all the Improvements in good condition and
repair and shall not commit or suffer any waste of the Improvements. Mortgagor
shall repair, restore, replace or rebuild promptly any part of the Premises
which may be damaged or destroyed by any casualty whatsoever. The Improvements
shall not be demolished or materially altered, nor any material additions built,
without the prior written consent of Mortgagee, which consent shall not be
unreasonably withheld, conditioned or delayed.
(b) Mortgagee and any persons authorized by Mortgagee shall have the
right to enter and inspect the Premises and the right to inspect all work done,
labor performed and materials furnished in and about the Improvements and the
right to inspect and make copies of all books, contracts and records of
Mortgagor relating to the Mortgaged Property.
(c) Mortgagor shall pay or cause to be paid when due all utility
charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
9. Condemnation/Eminent Domain. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Mortgaged Property,
or any portion thereof, Mortgagor will notify Mortgagee of the pendency of such
proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's option and in
Mortgagee's sole discretion, as attorney-in-fact for Mortgagor, to commence,
appear in and prosecute, in Mortgagee's or Mortgagor's name, any action or
proceeding relating to any condemnation of the Mortgaged Property, or any
portion thereof, and to settle or compromise any claim in connection with such
condemnation. If Mortgagee elects not to participate in such condemnation
proceeding, then Mortgagor shall, at its expense, diligently prosecute any such
proceeding and shall consult with Mortgagee, its attorneys and experts and
cooperate with them in any defense of any such proceedings. All awards and
proceeds of condemnation shall be assigned to Mortgagee to be applied in the
same manner as insurance proceeds, as provided above, and Mortgagor agrees to
execute any such assignments of all such awards as Mortgagee may request.
10. Restoration. If, in accordance with the terms and provisions of the
Credit Agreement, Mortgagee elects to release funds to Mortgagor for restoration
of any of the Mortgaged Property, then such restoration shall be performed in
accordance with the following conditions:
(i) prior to the commencement of any restoration, the plans and
specifications for such restoration, and the budgeted costs,
shall be submitted to and approved by Mortgagee;
(ii) prior to making any advance of restoration funds, Mortgagee shall
be satisfied that the remaining restoration funds are sufficient
to complete the
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restoration and to pay all related expenses, including interest
on the Obligations and real estate taxes on the Premises, during
restoration;
(iii) at the time of any disbursement of the restoration funds, (A) no
Default (as defined below) shall then exist, (B) no mechanics' or
materialmen's liens shall have been filed and remain
undischarged, except those discharged by the disbursement of the
requested restoration funds and (C) a satisfactory title search
or "bring-down" certificate on the Premises shall be delivered to
Mortgagee;
(iv) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last
disbursement, upon receipt of satisfactory evidence of the stage
of completion and of performance of the work in a good and
workmanlike manner and in accordance with the contracts, plans
and specifications acceptable to Mortgagee;
(v) with respect to each advance of restoration funds, Mortgagee may
retain 10% of the amount of such advance as a holdback until the
restoration is fully completed;
(vi) the restoration funds shall bear no interest and may be
commingled with Mortgagee's other funds; and
(vii) any restoration funds remaining shall be retained by Mortgagee
and may be applied by Mortgagee, in its sole discretion, to the
Obligations in the inverse order of maturity.
11. Leases. Except as permitted in the Credit Agreement, Mortgagor shall
not (i) execute an assignment or pledge of any lease relating to all or any
portion of the Mortgaged Property other than in favor of Mortgagee, or (ii)
without the prior written consent of Mortgagee, execute or permit to exist any
lease of any of the Mortgaged Property. As to any lease now in existence or
subsequently consented to by Mortgagee, Mortgagor, except in the ordinary course
of its business, shall not accept a surrender or terminate, cancel, rescind,
supplement, alter, revise, modify or amend such lease or permit any such action
to be taken nor shall Mortgagor accept the payment of rent more than thirty (30)
days in advance of its due date. The provisions of this subsection are made with
reference to Section 291-f of the Real Property Law of the State of New York.
12. Further Assurances/Estoppel Certificates. To further assure Mortgagee's
rights under this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any
act or execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property necessary to confirm the lien of this Mortgage and all other rights or
benefits conferred on Mortgagee. Mortgagor, within 5 business days after
request, shall deliver, in form and substance satisfactory to Mortgagee, a
written statement, duly acknowledged, setting forth the amount of the
Obligations, and whether any
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offsets, claims, counterclaims or defenses exist against the Obligations and
certifying as to such other matters as Mortgagee shall reasonably request.
13. Mortgagee's Right to Perform. If Mortgagor fails to perform any of the
covenants or agreements of Mortgagor, Mortgagee, without waiving or releasing
Mortgagor from any obligation or default under this Mortgage, may, at any time
(but shall be under no obligation to) pay or perform the same, and the amount or
cost thereof, with interest at the Default Rate, shall immediately be due from
Mortgagor to Mortgagee. To the extent that any such amounts or costs paid by
Mortgagee shall constitute payment of (i) Impositions; (ii) premiums on
insurance policies covering the Premises; (iii) expenses incurred in upholding
or enforcing the lien of this Mortgage, including, but not limited to the
expenses of any litigation to prosecute or defend the rights and lien created by
this Mortgage; (iv) costs of removal of or otherwise related to Hazardous
Materials (as defined in Section 17 below) or asbestos; or (v) any amount, costs
or charge to which Mortgagee becomes subrogated, upon payment, whether under
recognized principles of law or equity, or under express statutory authority;
then, and in each such event, such amounts or costs, together with interest
thereon at the Default Rate, shall be added to the Obligations and shall be
secured by this Mortgage and shall be a lien on the Mortgaged Property prior to
any right, title to, interest in, or claim upon the Mortgaged Property attaching
subsequent to the lien of this Mortgage. No payment or advance of money by
Mortgagee under this Section shall be deemed or construed to cure Mortgagor's
default or waive any right or remedy of Mortgagee.
14. Mortgagor's Existence, etc. Mortgagor shall do all things necessary to
preserve and keep in full force and effect its existence, franchises, rights and
privileges under the laws of the state in which it was formed and its right to
own property and transact business in each state in which the Real Estate is
located. Mortgagor represents and warrants that Mortgagor is a duly organized
and validly existing limited liability company, in good standing, and this
Mortgage has been executed by a duly authorized member or officer thereof, as
applicable. This Mortgage constitutes the legal, valid and binding obligation of
Mortgagor, enforceable against Mortgagor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
15. Financial Statements; Certificates: Other Information. Mortgager shall
deliver such financial statements as is required by the Credit Agreement.
16. Notice of Certain Occurrences. Mortgagor shall give notice to Mortgagee
promptly upon the occurrence of:
(a) any Default or Event of Default;
(b) any (i) default or event of default under any provision of any
security issued by or any agreement, instrument or undertaking of Mortgagor or
which binds Mortgagor or any property thereof (collectively, "Contractual
Obligations") or (ii) litigation, investigation or proceeding which may exist at
any time between Mortgagor and any Governmental Authority,
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which, with respect to both clauses (i) and (ii), could have a material adverse
effect on the business, operations, property or financial or other condition of
Mortgagor;
(c) the commencement of any litigation or proceeding affecting
Mortgagor or the Mortgaged Property or any part thereof in which the amount
involved is $1,000,000 or more or in which injunctive or similar relief is
sought; and
(d) a Material Adverse Effect in the business, operations, property or
financial or other condition of Mortgagor or the Mortgaged Property or any part
thereof.
17. Hazardous Material. (a) Neither Mortgagor nor, to the current actual
knowledge of Mortgagor, any other person has ever caused or permitted any
Hazardous Material (as defined below) to be placed, held, located or disposed of
on, under or at the Premises, or any part thereof except in compliance with
applicable laws, and the Premises has never been used (whether by Mortgagor or,
to the current actual knowledge of Mortgagor, by any other person, including any
tenant) as a dump site or storage (whether permanent or temporary) site for any
Hazardous Material except in compliance with applicable laws.
(b) Mortgagor represents that (i) to the best of Mortgagor's
knowledge, without independent inquiry, and except as otherwise may be provided
in that certain Phase I Environmental Site Assessment dated March 11, 2004
prepared by LCS, Inc., the Premises is free of all Hazardous Material except as
such is in compliance with applicable environmental laws and (ii) the Premises
has not been adversely affected by any Hazardous Material or is in violation of
any applicable Legal Requirement of any Governmental Authority regulating,
relating to, or imposing liability or standards of conduct concerning Hazardous
Material.
(c) Mortgagor shall comply with any and all applicable Legal
Requirements governing the discharge and removal of Hazardous Material, shall
pay immediately when due the costs of removal of any Hazardous Material causing
a violation of applicable law, and shall keep the Premises free of any lien
imposed pursuant to such Legal Requirements. In the event Mortgagor fails to do
so, after notice to Mortgagor and the expiration of the earlier of (i)
applicable cure periods hereunder, or (ii) the cure period permitted under the
applicable Legal Requirement, Mortgagee may declare such failure an Event of
Default and cause the Premises to comply with applicable laws and the cost of
causing such compliance with interest at the Default Rate, shall immediately be
due from Mortgagor to Mortgagee. In addition, Mortgagor agrees not to allow the
manufacture, storage, transmission, presence or disposal of any Hazardous
Material over or upon the Premises except in accordance with applicable
environmental laws. Mortgagee shall have the right at any time to conduct an
environmental audit of the Premises and Mortgagor shall cooperate in the conduct
of such environmental audit. Mortgagor shall give Mortgagee and its agents and
employees access to the Premises to perform a response action to remove
Hazardous Material causing a violation of applicable law. Mortgagor agrees to
defend, indemnify and hold Mortgagee free and harmless from and against all
loss, costs, damage and expense (including attorneys' fees and costs and
consequential damages) Mortgagee may sustain by reason of (i) the imposition or
recording of a lien by any Governmental Authority pursuant to any Legal
Requirement relating to hazardous or toxic wastes or substances or the removal
thereof ("Hazardous Material Laws"); (ii) claims of any private parties
regarding violations of Hazardous Material Laws; (iii) costs and expenses
(including, without
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limitation, reasonable attorneys' fees and fees incidental to the securing of
repayment of such costs and expenses) incurred by Mortgagor or Mortgagee in
connection with the removal of any such lien or in connection with Mortgagor's
or Mortgagee's compliance with any Hazardous Material Laws; and (iv) the
assertion against Mortgagee by any party of any claim in connection with
Hazardous Material, except for Mortgagee's gross negligence.
(d) For the purposes of this Mortgage, "Hazardous Material" means and
includes any hazardous, nuclear, toxic or dangerous waste, substance or material
defined as such in (or for purposes of) the Comprehensive Environmental
Response, Compensation, and Liability Act, any so-called "Superfund" or
"Superlien" law, or any other Legal Requirement regulating, relating to, or
imposing liability or standards of conduct concerning, any hazardous, nuclear,
toxic or dangerous waste, substance or material, as now or at any time in
effect.
(e) The foregoing indemnification shall be a recourse obligation of
Mortgagor and shall survive repayment of the Obligations, notwithstanding any
limitations on recourse which may be contained herein or in any Loan Documents
or the delivery of any satisfaction, release or release deed, discharge or deed
of reconveyance, or the assignment of this Mortgage by Mortgagee.
18. Asbestos. Mortgagor shall not install or permit to be installed in the
Premises friable asbestos or any substance containing asbestos and deemed
hazardous by any Legal Requirement respecting such material, or any other
building material deemed to be harmful, hazardous or injurious by relevant Legal
Requirements and with respect to any such material currently present in the
Premises shall promptly either (a) remove any material which such Legal
Requirements deem harmful, hazardous or injurious and require to be removed or
(b) otherwise comply with such Legal Requirements, at Mortgagor's expense. If
Mortgagor shall fail to so remove or otherwise comply, Mortgagee may declare an
Event of Default and/or do whatever is necessary to eliminate such substances
from the Premises or otherwise comply with the applicable Legal Requirement, and
the costs thereof, with interest at the Default Rate, shall be immediately due
from Mortgagor to Mortgagee. Mortgagor shall give Mortgagee and its agents and
employees access to the Premises to remove such asbestos or substances.
Mortgagor shall defend, indemnify, and save Mortgagee harmless from all loss,
costs, damages and expense (including attorneys' fees and costs and
consequential damages) asserted or proven against Mortgagee by any party, as a
result of the presence of such substances or any removal or compliance with such
Legal Requirements. The foregoing indemnification shall be a recourse obligation
of Mortgagor and shall survive repayment of the Obligation, notwithstanding any
limitation on recourse which may be contained herein or in any of the Loan
Documents or the delivery of any satisfaction, release or release deed,
discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.
19. Events of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default hereunder:
(a) an Event of Default shall occur under the Credit Agreement;
(b) upon the actual waste, removal or demolition of, any part of the
Premises (other than necessary replacements of worn or obsolete Equipment or as
otherwise permitted in the Credit Agreement); or
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(c) if (i) Mortgagor shall sell, transfer, convey, lease or assign the
Mortgaged Property or any part thereof or any interest therein (by operation of
law or otherwise) other than in accordance with the Credit Agreement.
20. Remedies.
(a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Mortgagee may have pursuant to the Loan Documents, or
as provided by law, by notice to Mortgagor, Mortgagee may declare the
Obligations (together with accrued interest thereon) and all other amounts
payable under the Obligations, this Mortgage and the other Loan Documents to be
immediately due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived. In addition, upon the occurrence of any Event of Default,
Mortgagee may immediately take such action, without notice or demand, as it
deems advisable to protect and enforce its rights against Mortgagor and in and
to the Mortgaged Property, including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in such
manner as Mortgagee may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against
all or any part of the Mortgaged Property, (B) institute and
maintain an action on the Obligations, (C) sell all or part of
the Mortgaged Property (Mortgagor expressly granting to Mortgagee
the power of sale pursuant to Real Property Actions and
Proceedings Law Article 14), or (D) take such other action at law
or in equity for the enforcement of this Mortgage or any of the
Loan Documents as the law may allow. Mortgagee may proceed in any
such action to final judgment and execution thereon for all sums
due hereunder, together with interest thereon at the Default Rate
and all costs of suit, including, without limitation, reasonable
attorneys' fees and disbursements. Interest at the Default Rate
shall be due on any judgment obtained by Mortgagee from the date
of judgment until actual payment is made of the full amount of
the judgment.
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the
Mortgaged Property or any other collateral as security for the
Obligations enter into and upon the Mortgaged Property and each
and every part thereof and exclude Mortgagor and its agents and
employees therefrom without liability for trespass, damage or
otherwise (Mortgagor hereby agreeing to surrender possession of
the Mortgaged Property to Mortgagee upon demand at any such time)
and maintain business activities and operations on the Mortgaged
Property and every part thereof to preserve, protect or prepare
the Mortgaged Property for sale or disposition. Following such
entry and taking of possession, Mortgagee shall be entitled,
without limitation, (x) to lease all or any part or parts of the
Mortgaged Property for such periods of
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time and upon such conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any
lease and (z) generally to execute, do and perform any other act,
deed, matter or thing concerning the Mortgaged Property as
Mortgagee shall deem appropriate as fully as Mortgagor might do.
(b) The holder of this Mortgage, in any action to foreclose it, shall
be entitled to the appointment of a receiver. In case of a foreclosure sale, the
Real Estate may be sold, at Mortgagee's election, in one parcel or in more than
one parcel and Mortgagee is specifically empowered, (without being required to
do so, and in its sole and absolute discretion) to cause successive sales of
portions of the Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Mortgage, and notwithstanding to the
contrary any exculpatory or non-recourse language which may be contained herein,
Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other remedies
were not provided for in this Mortgage.
21. Right of Mortgagee to Credit Sale. Upon the occurrence of any sale made
under this Mortgage, whether made under the power of sale or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof. In
lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Obligations or other sums secured by this Mortgage
the net sales price after deducting therefrom the expenses of sale and the cost
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage. In such event, this Mortgage, the Obligations and documents
evidencing expenditures secured hereby may be presented to the person or persons
conducting the sale in order that the amount so used or applied may be credited
upon the Obligations as having been paid.
22. Appointment of Receiver. If an Event of Default shall have occurred and
be continuing, Mortgagee as a matter of right and without notice to Mortgagor,
unless otherwise required by applicable law, and without regard to the adequacy
or inadequacy of the Mortgaged Property or any other collateral as security for
the Obligations or the interest of Mortgagor therein, shall have the right to
apply to any court having jurisdiction to appoint a receiver or receivers or
other manager of the Mortgaged Property, and Mortgagor hereby irrevocably
consents to such appointment and waives notice of any application therefor
(except as may be required by law). Any such receiver or receivers shall have
all the usual powers and duties of receivers in like or similar cases and all
the powers and duties of Mortgagee in case of entry as provided in this
Mortgage, including, without limitation and to the extent permitted by law, the
right to enter into leases of all or any part of the Mortgaged Property, and
shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated.
23. Extension, Release, etc. (a) Without affecting the lien or charge of
this Mortgage upon any portion of the Mortgaged Property not then or theretofore
released as security for the full amount of the Obligations, Mortgagee may, from
time to time and without notice, agree to (i)
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release any person liable for the Obligations, (ii) extend the maturity or alter
any of the terms of the Obligations or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure less
than all of the principal amount of the Obligations, it is expressly agreed that
any repayments of the principal amount of the Obligations shall not reduce the
amount of the lien of this Mortgage until the lien amount shall equal the
principal amount of the Obligations outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Obligations or
to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that ownership
of this Mortgage and title to the Mortgaged Property or any estate therein shall
become vested in the same person or entity, this Mortgage shall not merge in
such title but shall continue as a valid lien on the Mortgaged Property for the
amount secured hereby.
24. Security Agreement under Uniform Commercial Code. (a) It is the
intention of the parties hereto that this Mortgage shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code (the "Code") of the
State of New York. If an Event of Default shall occur under this Mortgage, then
in addition to having any other right or remedy available at law or in equity,
Mortgagee shall have the option of either (i) proceeding under the Code and
exercising such rights and remedies as may be provided to a secured party by the
Code with respect to all or any portion of the Real Estate/Mortgaged Property
which is personal property (including, without limitation, taking possession of
and selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting the
Mortgaged Property in accordance with Mortgagee's rights, powers and remedies
with respect to the real property (in which event the default provisions of the
Code shall not apply). If Mortgagee shall elect to proceed under the Code, then
five days' notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited to,
attorneys' fees and legal expenses. At Mortgagee's request, Mortgagor shall
assemble the personal property and make it available to Mortgagee at a place
designated by Mortgagee which is reasonably convenient to both parties. This
Mortgage shall likewise be a Financing Statement. This Mortgage shall be filed
for record, among other places, in the real estate records of each county in
which any portion of the Real Estate is situated, and, when filed in such
counties, shall be effective as a financing statement covering fixtures located
on salt and other
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mineral properties, which salt and other mineral properties (and accounts
arising therefrom) and other as-extracted collateral are to be financed at the
mines located on the Real Estate. At the option of Mortgagee, a carbon,
photographic or other reproduction of this Mortgage or of any financing
statement covering the Mortgaged Property or any portion thereof shall be
sufficient as a financing statement and may be filed as such.
(b) Mortgagor and Mortgagee agree, to the extent permitted by law,
that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of the Code; (iii) Mortgagor is the record owner of the Real Estate; and
(iv) the addresses of Mortgagor and Mortgagee are as set forth on the first page
of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form satisfactory to Mortgagee, covering all or any part of the
Mortgaged Property and will further execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered, any financing statement, affidavit,
continuation statement or certificate or other document as Mortgagee may request
in order to perfect, preserve, maintain, continue or extend the security
interest under and the priority of this Mortgage and such security instrument.
Mortgagor further agrees to pay to Mortgagee on demand all costs and expenses
incurred by Mortgagee in connection with the preparation, execution, recording,
filing and re-filing of any such document and all reasonable costs and expenses
of any record searches for financing statements Mortgagee shall reasonably
require. Mortgagor shall from time to time, on request of Mortgagee, deliver to
Mortgagee an inventory in reasonable detail of any of the Mortgaged Property
which constitutes personal property. If Mortgagor shall fail to furnish any
financing or continuation statement within 10 days after request by Mortgagee,
then pursuant to the provisions of the Code, Mortgagor hereby authorizes
Mortgagee, without the signature of Mortgagor, to execute and file any such
financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property, as
set forth above.
25. Assignment of Rents. Mortgagor hereby assigns to Mortgagee the Rents as
further security for the payment of the Obligations and performance of the
Obligations, and Mortgagor grants to Mortgagee the right to enter the Mortgaged
Property for the purpose of collecting the same and to let the Mortgaged
Property or any part thereof, and to apply the Rents on account of the
Obligations. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Obligations are paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents and Mortgagor shall be entitled to collect, receive, use
and retain the Rents until the occurrence of an Event of Default under this
Mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and
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occupancy of the Mortgaged Property or of such part thereof as may be in the
possession of Mortgagor or any affiliate of Mortgagor, and upon default in any
such payment Mortgagor and any such affiliate will vacate and surrender the
possession of the Mortgaged Property to Mortgagee or to such receiver, and in
default thereof may be evicted by summary proceedings or otherwise. Mortgagor
shall not accept prepayments of installments of Rent to become due for a period
of more than one month in advance (except for security deposits and estimated
payments of percentage rent, if any). The agreement contained in this Section
has been made with reference to section 291-f of the Real Property Law of the
State of New York.
26. Trust Funds. (a) Mortgagor shall receive the advances secured hereby
subject to the trust fund provisions of Section 13 of the Lien Law of the State
of New York.
(b) All lease security deposits of the Real Estate shall be treated as
trust funds not to be commingled with any other funds of Mortgagor. Within 10
days after request by Mortgagee, Mortgagor shall furnish Mortgagee satisfactory
evidence of compliance with this subsection, together with a statement of all
lease security deposits by lessees and copies of all Agreements not previously
delivered to Mortgagee, which statement shall be certified by Mortgagor.
27. Additional Rights. (a) The clauses and covenants contained in this
Mortgage that are construed by Section 254 of the Real Property Law of the State
of New York shall be construed as provided in those sections, except that the
provisions of subsection 4 of such Section 254 shall not in any manner apply to
or construe the provisions of this Mortgage; the additional clauses and
covenants contained herein shall afford rights supplemental to and not exclusive
of the rights conferred by the clauses and covenants construed by such Section
254 and shall not impair, modify, alter or defeat such rights (except that the
provisions of this Mortgage governing insurance shall be exclusive of and shall
be in substitution for the rights which would be conferred by the clauses and
covenants construed by such subsection 4 of such Section 254), notwithstanding
that such additional clauses and covenants may relate to the same subject matter
or provide for different or additional rights in the same or similar
contingencies as the clauses and covenants construed by such Section 254; the
rights of Mortgagee arising under clauses and covenants contained in this
Mortgage shall be separate, distinct and cumulative and none of them shall be in
exclusion of the others; no act of Mortgagee shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision, anything herein or otherwise to the contrary notwithstanding, and in
the event of any inconsistencies between the provisions of such Section 254 and
the provisions of this Mortgage, the provisions of this Mortgage shall prevail.
(b) The holder of any subordinate lien on the Mortgaged Property shall
have no right to terminate any lease whether or not such lease is subordinate to
this Mortgage nor shall any holder of any subordinate lien join any tenant under
any lease in any action to foreclose the lien or modify, interfere with, disturb
or terminate the rights of any tenant under any lease. By recordation of this
Mortgage all subordinate lienholders are subject to and notified of this
provision, and any action taken by any such lienholder contrary to this
provision shall be null and void. Upon the occurrence of any Event of Default,
Mortgagee may, in its sole discretion and without regard to the adequacy of its
security under this Mortgage, apply all or any part of any amounts on deposit
with Mortgagee under this Mortgage against all or any part of the
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Obligations. Any such application shall not be construed to cure or waive any
Default or Event of Default or invalidate any act taken by Mortgagee on account
of such Default or Event of Default.
28. Changes in Method of Taxation. In the event of the passage after the
date hereof of any law of any Governmental Authority deducting from the value of
the Premises for the purposes of taxation any lien thereon, or changing in any
way the laws for the taxation of mortgages or debts secured thereby for federal,
state or local purposes, or the manner of collection of any such taxes, and
imposing a tax, either directly or indirectly, on mortgages or debts secured
thereby, the holder of this Mortgage shall have the right to declare the
Obligations due on a date to be specified by not less than 30 days' written
notice to be given to Mortgagor unless within such 30-day period Mortgagor shall
assume as an Obligation hereunder the payment of any tax so imposed until full
payment of the Obligations and such assumption shall be permitted by law.
29. Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been sufficiently given or served when given
or served in accordance with the terms of the Credit Agreement.
30. No Oral Modification. This Mortgage may not be changed or terminated
orally. Any agreement made by Mortgagor and Mortgagee after the date of this
Mortgage relating to this Mortgage shall be superior to the rights of the holder
of any intervening or subordinate lien or encumbrance.
31. Partial Invalidity. In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included.
Notwithstanding to the contrary anything contained in this Mortgage or in any
provisions of the Obligations or Loan Documents, the obligations of Mortgagor
and of any other obligor under the Obligations or Loan Documents shall be
subject to the limitation that Mortgagee shall not charge, take or receive, nor
shall Mortgagor or any other obligor be obligated to pay to Mortgagee, any
amounts constituting interest in excess of the maximum rate permitted by law to
be charged by Mortgagee.
32. Mortgagor's Waiver of Rights. To the fullest extent permitted by law,
Mortgagor waives the benefit of all laws now existing or that may subsequently
be enacted providing for (i) any appraisement before sale of any portion of the
Mortgaged Property, (ii) any extension of the time for the enforcement of the
collection of the Obligations or the creation or extension of a period of
redemption from any sale made in collecting such debt and (iii) exemption of the
Mortgaged Property from attachment, levy or sale under execution or exemption
from civil process. To the full extent Mortgagor may do so, Mortgagor agrees
that Mortgagor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Mortgage before exercising any other remedy granted
hereunder and Mortgagor, for Mortgagor and its successors and assigns, and for
any and all persons ever claiming any interest in the Mortgaged Property, to the
extent permitted by law, hereby waives
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and releases all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the whole of the secured
indebtedness and marshalling in the event of foreclosure of the liens hereby
created.
33. Remedies Not Exclusive. Mortgagee shall be entitled to enforce payment
and performance of the Obligations and to exercise all rights and powers under
this Mortgage or under any of the other Loan Documents or other agreement or any
laws now or hereafter in force, notwithstanding some or all of the Obligations
may now or hereafter be otherwise secured, whether by mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this
Mortgage nor its enforcement, shall prejudice or in any manner affect
Mortgagee's right to realize upon or enforce any other security now or hereafter
held by Mortgagee, it being agreed that Mortgagee shall be entitled to enforce
this Mortgage and any other security now or hereafter held by Mortgagee in such
order and manner as Mortgagee may determine in its absolute discretion. No
remedy herein conferred upon or reserved to Mortgagee is intended to be
exclusive of any other remedy herein or by law provided or permitted, but each
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Mortgagee or to which it
may otherwise be entitled, may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by Mortgagee. In no event
shall Mortgagee, in the exercise of the remedies provided in this Mortgage
(including, without limitation, in connection with the assignment of Rents to
Mortgagee, or the appointment of a receiver and the entry of such receiver on to
all or any part of the Mortgaged Property), be deemed a "mortgagee in
possession," and Mortgagee shall not in any way be made liable for any act,
either of commission or omission, in connection with the exercise of such
remedies.
34. Multiple Security. If (a) the Premises shall consist of one or more
parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter
hold one or more additional mortgages, liens, deeds of trust or other security
(directly or indirectly) for the Obligations upon other property in the State in
which the Premises are located (whether or not such property is owned by
Mortgagor or by others) or (c) both the circumstances described in clauses (a)
and (b) shall be true, then to the fullest extent permitted by law, Mortgagee
may, at its election, commence or consolidate in a single foreclosure action all
foreclosure proceedings against all such collateral securing the Obligations
(including the Mortgaged Property), which action may be brought or consolidated
in the courts of any county in which any of such collateral is located.
Mortgagor acknowledges that the right to maintain a consolidated foreclosure
action is a specific inducement to Mortgagee to extend credit, and Mortgagor
expressly and irrevocably waives any objections to the commencement or
consolidation of the foreclosure proceedings in a single action and any
objections to the laying of venue or based on the grounds of forum non conveniem
which it may now or hereafter have. Mortgagor further agrees that if Mortgagee
shall be prosecuting one or more foreclosure or other proceedings against a
portion of the Mortgaged Property or against any collateral other than the
Mortgaged Property, which collateral directly or indirectly secures the
Obligations, or if Mortgagee shall have obtained a judgment of foreclosure and
sale or similar judgment against such collateral, then, whether or not such
proceedings are being maintained or judgments were obtained in or outside the
State in which the Premises are located, Mortgagee may commence or continue
foreclosure proceedings and exercise its other remedies granted in
-25-
this Mortgage against all or any part of the Mortgaged Property and Mortgagor
waives any objections to the commencement or continuation of a foreclosure of
this Mortgage or exercise of any other remedies hereunder based on such other
proceedings or judgments, and waives any right to seek to dismiss, stay, remove,
transfer or consolidate either any action under this Mortgage or such other
proceedings on such basis. Neither the commencement nor continuation of
proceedings to foreclose this Mortgage nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee's right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Premises are located)
which directly or indirectly secures the Obligations, and Mortgagor expressly
waives any objections to the commencement of, continuation of, or entry of a
judgment in such other proceedings or exercise of any remedies in such
proceedings based upon any action or judgment connected to this Mortgage, and
Mortgagor also waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other proceedings or any action under this Mortgage on
such basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Mortgagee may, at its election, cause the sale of all
collateral which is the subject of a single foreclosure action at either a
single sale or at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of the parties to
dispose of and administer all collateral securing the Obligations (directly or
indirectly) in the most economical and least time-consuming manner.
35. Expenses; Indemnification. (a) Mortgagor shall pay or reimburse
Mortgagee for all expenses incurred by Mortgagee before and after the date of
this Mortgage with respect to any and all transactions contemplated by this
Mortgage including without limitation, the preparation of any document
reasonably required hereunder or any amendment, modification, restatement or
supplement to this Mortgage, the delivery of any consent, non-disturbance
agreement or similar document in connection with this Mortgage or the
enforcement of any of Mortgagee's rights. Such expenses shall include, without
limitation, all title and conveyancing charges, recording and filing fees and
taxes, mortgage taxes, intangible personal property taxes, escrow fees, revenue
and tax stamp expenses, insurance premiums (including title insurance premiums),
title search and title rundown charges, brokerage commissions, finders' fees,
placement fees, court costs, surveyors', photographers', appraisers',
architects', engineers', consulting professional's, accountants' and attorneys'
fees and disbursements. Mortgagor acknowledges that from time to time Mortgagor
may receive statements for such expenses, including without limitation
attorneys' fees and disbursements. Mortgagor shall pay such statements promptly
upon receipt.
(b) If (i) any action or proceeding shall be commenced by Mortgagee
(including but not limited to any action to foreclose this Mortgage or to
collect the Obligations ), or any action or proceeding is commenced to which
Mortgagee is made a party, or in which it becomes necessary to defend or uphold
the lien of this Mortgage (including, without limitation, any proceeding or
other action relating to the bankruptcy, insolvency or reorganization of the
Company), or in which Mortgagee is served with any legal process, discovery
notice or subpoena and (ii) in each of the foregoing instances such action or
proceeding in any manner relates to or arises out of this Mortgage or
Mortgagee's lending to Mortgagor or acceptance of a guaranty from any Guarantor
of the Obligations or any of the transactions contemplated by this Mortgage,
then Mortgagor will immediately reimburse or pay to Mortgagee all of the
expenses which have been or may be incurred by Mortgagee with respect to the
foregoing (including reasonable
-26-
counsel fees and disbursements), together with interest thereon at the Default
Rate, and following the occurrence of a Default any such sum and the interest
thereon shall be a lien on the Mortgaged Property, prior to any right, or title
to, interest in or claim upon the Mortgaged Property attaching or accruing
subsequent to the lien of this Mortgage, and shall be deemed to be secured by
this Mortgage. In any action or proceeding to foreclose this Mortgage, or to
recover or collect the Obligations, the provisions of law respecting the
recovering of costs, disbursements and allowances shall prevail unaffected by
this covenant.
(c) Mortgagor shall indemnify and hold harmless Mortgagee and
Mortgagee's affiliates, and the respective directors, officers, agents and
employees of Mortgagee and its affiliates from and against all claims, damages,
losses and liabilities (including, without limitation, reasonable attorneys'
fees and expenses) arising out of or based upon any matter related to this
Mortgage, the Mortgaged Property or the occupancy, ownership, maintenance or
management of the Mortgaged Property by Mortgagor, including, without
limitation, any claims based on the alleged acts or omissions of any employee or
agent of Mortgagor. This indemnification shall be in addition to any other
liability which Mortgagor may otherwise have to Mortgagee.
36. Successors and Assigns. All covenants of Mortgagor contained in this
Mortgage are imposed solely and exclusively for the benefit of Mortgagee and its
successors and assigns, and no other person or entity shall have standing to
require compliance with such covenants or be deemed, under any circumstances, to
be a beneficiary of such covenants, any or all of which may be freely waived in
whole or in part by Mortgagee at any time if in its sole discretion it deems
such waiver advisable. All such covenants of Mortgagor shall run with the land
and bind Mortgagor, the successors and assigns of Mortgagor (and each of them)
and all subsequent owners, encumbrancers and tenants of the Mortgaged Property,
and shall inure to the benefit of Mortgagee, its successors and assigns. The
word "Mortgagor" shall be construed as if it read "Mortgagors" whenever the
sense of this Mortgage so requires and if there shall be more than one
Mortgagor, the obligations of the Mortgagors shall be joint and several.
37. No Waivers, etc. Any failure by Mortgagee to insist upon the strict
performance by Mortgagor of any of the terms and provisions of this Mortgage
shall not be deemed to be a waiver of any of the terms and provisions hereof,
and Mortgagee, notwithstanding any such failure, shall have the right thereafter
to insist upon the strict performance by Mortgagor of any and all of the terms
and provisions of this Mortgage to be performed by Mortgagor. Mortgagee may
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the security held for the obligations secured by this Mortgage without,
as to the remainder of the security, in anywise impairing or affecting the lien
of this Mortgage or the priority of such lien over any subordinate lien.
38. Governing Law, etc. This Mortgage shall be governed by and construed
and interpreted in accordance with the laws of the State of New York. Mortgagor
hereby irrevocably agrees that any legal action, suit, or proceeding against it
with respect to its obligations, liabilities or any other matter under or
arising out of or in connection with this Mortgage or the other Loan Documents
or for recognition or enforcement of any judgment rendered in any such action,
suit or proceeding may be brought in the United States Courts for the Xxxxxxx
Xxxxxxxx xx Xxx Xxxx,
-00-
or in the courts of the State of New York, as Mortgagee may elect, and, by
execution and delivery of this Mortgage, Mortgagor hereby irrevocably accepts
and submits to the nonexclusive jurisdiction of each of the aforesaid courts in
personam, generally and unconditionally with respect to any such action, suit or
proceeding for itself and in respect of its property. Mortgagor further agrees
that final judgment against it in any action, suit, or proceeding referred to
herein shall be conclusive and may be enforced in any other jurisdiction, by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the fact and of the amount of its indebtedness.
39. Waiver of Trial by Jury. Mortgagor and Mortgagee each hereby
irrevocably and unconditionally waive trial by jury in any action, claim, suit
or proceeding relating to this Mortgage and for any counterclaim brought
therein. Mortgagor hereby waives all rights to interpose any counterclaim in any
suit brought by Mortgagee hereunder and all rights to have any such suit
consolidated with any separate suit, action or proceeding.
40. Certain Definitions. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage shall be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean "each Mortgagor or any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein," the word
"Mortgagee" shall mean "Mortgagee or any subsequent holder of the instrument
evidencing any of the Obligations," the word "person" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Mortgaged
Property" shall include any portion of the Mortgaged Property or interest
therein. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa. The captions
in this Mortgage are for convenience or reference only and in no way limit or
amplify the provisions hereof.
41. Limitation of Liability. (a) No recourse shall be had for the
enforcement of any obligation, promise or agreement of the XXX contained herein
or contemplated hereby or in or contemplated by the other documents or executed
in connection herewith or for any claim based hereon or thereon or otherwise in
respect hereof or thereof against any director, officer, agent (other than the
Company), attorney or employee, as such, in his individual capacity, past,
present or future, of the XXX or of any successor entity, either directly or
through the XXX or any successor entity whether by virtue of any constitutional
provision, statute or rule of any constitutional provision, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise. No
personal liability whatsoever shall attach to, or be incurred by, any director,
officer, agent (other than the Company), attorney or employee as such, past,
present or future, of the XXX or any successor entity, either directly or
through the XXX or any successor entity, under or by reason of any of the
obligations, promises or agreements entered into between the XXX and the
Mortgagee, whether herein contained or to be implied herefrom as being
supplemental hereto; and all personal liability of that character against every
such director, officer, agent (other than the Company), attorney and employee
is, by the execution of this Mortgage and as a condition of, and as part of the
consideration for, the execution of this Mortgage, expressly waived and
released.
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(b) Notwithstanding any representation or statement to the contrary
contained herein or in any of the other documents executed in connection
herewith, the obligations and agreements of the XXX contained herein or
contemplated hereby and in or contemplated by any other document executed in
connection herewith, and any other instrument or document supplemental thereto
shall be deemed the obligations and agreements of the XXX, and not of any
member, officer, agent (other than the Company) or employee of the XXX in his
individual capacity, and the members, officers, agents (other than the Company)
and employees shall not be liable personally hereof or thereon or be subject to
any personal liability or accountability based upon or in respect hereof or
thereof or of any transaction contemplated hereby or thereby. The obligations
and agreements of the XXX contained herein shall not constitute or give rise to
an obligation of the State of New York or the County of Xxxxxxxxxx, New York and
neither the State of New York nor the County of Xxxxxxxxxx, New York shall be
liable thereon, and further, such obligations and agreements shall not
constitute or give rise to a general obligation of the XXX, but rather shall
constitute limited obligations of the XXX payable solely from the revenues of
the XXX derived and to be derived from the sale or other disposition of the
Mortgaged Property (except for revenues derived by the XXX with respect to the
Unassigned Rights). The XXX shall not be obligated to take any action pursuant
to any provision hereof and no order or decree of specific performance with
respect to any of the obligations of the XXX hereunder shall be sought or
enforced against the XXX unless (1) the party seeking such order or decree shall
first have requested the XXX in writing to take the action sought in such order
or decree of specific performance, and 10 days shall have elapsed from the date
of receipt of such request, and the XXX shall have refused to comply with such
request (or if compliance therewith would reasonably be expected to take longer
than 10 days, shall have failed to institute and diligently pursue action to
cause compliance with such request) or failed to respond within such notice
period, and (2) if the XXX refused to comply with such request and the IDA's
refusal to comply is based on its reasonable expectation that it will incur fees
and expenses, the party seeking such order or decree shall have placed in an
account with the XXX an amount or undertaking sufficient to cover such
reasonable fees and expenses, and (3) if the XXX refuses to comply with such
request and the IDA's refusal to comply is based on its reasonable expectation
that it or any of its members, officers, agents (other than the Company) or
employees shall be subject to potential liability, the party seeking such order
or decree shall (a) agree to indemnify and hold harmless the XXX and its
members, officers, agents (other than the Company) and employees against any
liability incurred as a result of its compliance with such demand and (b) if
requested by the XXX shall furnish to the XXX satisfactory security to protect
the XXX and its members, officers, agents (other than the Company) and employees
against all liability, expected to be incurred as a result of compliance with
such request.
(c) The XXX covenants that it will record or cause this Mortgage to be
duly recorded in all offices where recordation thereof is necessary.
42. Option Premises Provisions. (a) Mortgagor shall pay or cause to be paid
all charges, fees, or payments arising in connection with the acquisition of or
required under the Option Agreements listed on Schedule A-II attached hereto
(the "Options") as and when the same are due and shall promptly and faithfully
perform or cause to be performed all other material terms, obligations,
covenants, conditions, agreements, indemnities, representations, warranties or
liabilities of the optionee under the Options. Mortgagor shall not (i) in any
manner, cancel,
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terminate or surrender, or permit the cancellation, termination or surrender of
any of the Options, in whole or in part, (ii) either orally or in writing,
modify, amend or permit any modification or amendment of any of the terms of the
Options or (iii) permit the subordination of the Options to any mortgage and any
attempt to do any of the foregoing shall be null and void and of no effect and
shall constitute an Event of Default hereunder.
(b) Mortgagor does hereby authorize and irrevocably appoint and
constitute Mortgagee as its true and lawful attorney-in-fact, which appointment
is coupled with an interest, in its name, place and stead, to take any and all
actions deemed necessary or desirable by Mortgagee to perform and comply with
all the obligations of the Mortgagor under the Options, and to do and take, but
without any obligation so to do, any action which Mortgagee deems necessary or
desirable to prevent or cure any default by the Mortgagor under the Options. All
sums so expended by Mortgagee, with interest thereon at the Default Rate from
the date of each such expenditure, shall be paid by Mortgagor to Mortgagee
promptly upon demand by Mortgagee. Mortgagor shall, within five (5) Business
Days (as defined in the Credit Agreement) after written request by Mortgagee,
execute and deliver to Mortgagee, or to any person designated by Mortgagee, such
further instruments, agreements, powers, assignments, conveyances or the like as
may be necessary to complete or perfect the interest, rights or powers of
Mortgagee pursuant to this paragraph.
(c) If any action or proceeding shall be instituted to cancel or
terminate the Options or any part thereof or interest therein or any action or
proceeding otherwise affecting the Options or this Mortgage shall be instituted,
then Mortgagor shall, immediately after receipt deliver to Mortgagee a true and
complete copy of each petition, summons, complaint, notice of motion, order to
show cause and all other pleadings and papers, however designated, served in any
such action or proceeding.
(d) Mortgagor covenants and agrees that the fee title to the Option
Premises and the real property interest created under the Options shall not
merge but shall always remain separate and distinct, notwithstanding the union
of said estates either in Mortgagor or a third party by purchase or otherwise;
and in case Mortgagor acquires the fee title or any other estate, title or
interest in and to the Option Premises or to the mineral rights and interests
thereto, the lien of this Mortgage shall, without further conveyance,
simultaneously with such acquisition, be spread to cover and attach to such
acquired estate and as so spread and attached shall be prior to the lien of any
mortgage placed on the acquired estate after the date of this Mortgage.
(e) Mortgagor shall, within ten (10) days after written demand from
Mortgagee, deliver to Mortgagee proof of payment of all items or performance of
all actions that are required to be paid or performed under the Options,
including, without limitation, any expenses or charges incurred in connection
with removing construction debris and restoring the Option Premises.
43. Nonresidential. THIS MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY
IMPROVED BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN SIX
RESIDENTIAL DWELLING UNITS, EACH HAVING ITS OWN SEPARATE COOKING FACILITIES.
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44. Assignment of Production. (a) Mortgagor hereby (a) transfers, assigns,
warrants and conveys to Mortgagee, effective as of the date hereof, at 7:00
A.M., local time, all salt and Other Minerals (to the extent of Mortgagor's
interest therein) which are thereafter produced from and which accrue to, the
Mortgaged Property, and all proceeds therefrom, and (b) gives to and confers
upon Mortgagee the right, power and authority to collect such salt and Other
Minerals and proceeds. Mortgagor irrevocably appoints Mortgagee its true and
lawful attorney-in-fact, at the option of Mortgagee at any time and from time to
time, to demand, receive and enforce payment, to give receipts, releases and
satisfactions, and to xxx, in the name of Mortgagor or Mortgagee, for all such
salt and Other Minerals and proceeds and apply the same to the payment of the
Obligations; provided, however, that Mortgagor shall have the right to collect
such salt and Other Minerals and proceeds (but not more than one month in
advance) prior to or at any time there is not occurring a Default or an Event of
Default. Subject to the foregoing, all parties producing, purchasing or
receiving any such salt or Other Minerals, or having such, or proceeds
therefrom, in their possession for which they or others are accountable to
Mortgagee by virtue of the provisions of this Article, are authorized and
directed to treat and regard Mortgagee as the assignee and transferee of
Mortgagor and entitled in Mortgagor's place and stead to receive such salt and
Other Minerals and all proceeds therefrom; and said parties and each of them
shall be fully protected in so treating and regarding Mortgagee and shall be
under no obligation to see to the application by Mortgagee of any such proceeds
or payments received by it. The assignment of the salt and Other Minerals, and
proceeds in this section is intended to be an absolute assignment from Mortgagor
to Mortgagee and not merely the granting or passing of a security interest. Such
salt and Other Minerals and proceeds are hereby assigned absolutely by Mortgagor
to Mortgagee contingent with respect to collection only upon the occurrence of
an Event of Default.
(b) Upon the occurrence of any Default or Event of Default, Mortgagee
may, at any time without notice, either in person, by agent or by a receiver
appointed by a court, and without regard to the adequacy of any security for the
Obligations, enter upon and take possession of the Mortgaged Property, or any
part thereof, and in its own name xxx for or otherwise collect such salt and
Other Minerals and proceeds, including those past due and unpaid and apply the
same, less costs and expenses of operation and collection, including reasonable
attorneys' fees, upon any of the Obligations, and in such order as Mortgagee may
determine. The collection of such salt and Other Minerals and proceeds, or the
entering upon and taking possession of the Mortgaged Property, or the
application thereof as aforesaid, shall not cure or waive any default or notice
of default hereunder or invalidate any act done in response to such default or
pursuant to notice of default.
(c) All payments of proceeds received by Mortgagee pursuant to this
section shall be applied as provided in the Credit Agreement and Loan Documents.
(d) Mortgagee is hereby absolved from all liability for failure to
enforce collection of any proceeds so assigned (and no such failure shall be
deemed to be a waiver of any right of Mortgagee under this section) and from all
other responsibility in connection therewith, except for liability arising out
of Mortgagee's gross negligence or willful misconduct following Mortgagee's
commencement of collection efforts and except for the responsibility to account
to Mortgagor for funds actually received.
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(e) Nothing herein contained shall detract from or limit the absolute
obligation of Mortgagor to make payment of the Obligations regardless of whether
the proceeds assigned by this section are sufficient to pay the same, and the
rights under this section shall be in addition to all other security now or
hereafter existing to secure the payment and performance of the Obligations.
(f) Notwithstanding the other provisions of this section, and in
addition to the other rights hereunder, Mortgagee or any receiver appointed in
judicial proceedings for the enforcement of this Mortgage shall have the right
to receive all salt and Other Minerals herein assigned and the proceeds
therefrom after any item of Obligations has been declared due and payable in
accordance with the provisions of this Mortgage and the Credit Agreement and to
apply all of said proceeds as provided therein.
(g) Mortgagor shall indemnify Mortgagee against all claims, actions,
liabilities, judgments, costs, attorneys' fees or other charges of whatsoever
kind or nature (all hereinafter in this section called "claims") made against or
incurred by them or any of them as a consequence of or in any way related to any
of the Loan Documents, or the assertion, either before or after the payment in
full of the Obligations, that they or any of them received the salt and Other
Minerals herein assigned or the proceeds thereof claimed by third persons, and
Mortgagee shall have the right to defend against any such claims, employing
attorneys therefor, and unless furnished with reasonable indemnity, they or any
of them shall have the right to pay or compromise and adjust all such claims.
Mortgagor will indemnify and pay to Mortgagee any and all such amounts as may be
paid in respect thereof or as may be successfully adjudged against Mortgagee. If
and to the extent that the foregoing undertaking may be unenforceable for any
reason, Mortgagor hereby agrees to make the maximum contribution to the payment
and satisfaction of the claims which is permissible under applicable law. The
obligations of Mortgagor as hereinabove set forth in this section shall survive
the release, termination, foreclosure or assignment of this Mortgage or any sale
hereunder.
45. Mortgaged Lease Provisions. (a) Mortgagor shall pay or cause to be paid
all rent and other charges required under the Mortgaged Lease as and when the
same are due and shall promptly and faithfully perform or cause to be performed
all other material terms, obligations, covenants, conditions, agreements,
indemnities, representations, warranties or liabilities of the lessee under the
Mortgaged Lease. Mortgagor shall not (i) in any manner, cancel, terminate or
surrender, or permit the cancellation, termination or surrender, of the
Mortgaged Lease, in whole or in part, (ii) either orally or in writing, modify,
amend or permit any modification or amendment of any of the terms of the
Mortgaged Lease without the prior written consent of Mortgagee, which consent
shall not be unreasonably withheld, or (iii) after the date hereof, permit the
subordination of the Mortgaged Lease to any mortgage and any attempt to do any
of the foregoing shall be null and void and of no effect and shall constitute an
Event of Default hereunder.
(b) Mortgagor shall do, or cause to be done, all things necessary to
preserve and keep unimpaired all rights of Mortgagor as lessee under the
Mortgaged Lease, and to prevent any default under the Mortgaged Lease, or any
termination, surrender, cancellation, forfeiture, subordination or impairment
thereof. Mortgagor does hereby authorize and irrevocably appoint
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and constitute Mortgagee as its true and lawful attorney-in-fact, which
appointment is coupled with an interest, in its name, place and stead, to take
any and all actions deemed necessary or desirable by Mortgagee to perform and
comply with all the obligations of Mortgagor under the Mortgaged Lease, and to
do and take, but without any obligation so to do, after ten (10) days' notice to
Mortgagor, any action which Mortgagee deems necessary or desirable to prevent or
cure any default by Mortgagor under the Mortgaged Lease, to enter into and upon
the Premises or any part thereof to such extent and as often as Mortgagee, in
its sole discretion, deems necessary or desirable in order to prevent or cure
any default of Mortgagor pursuant thereto, to the end that the rights of
Mortgagor in and to the leasehold estate created by the Mortgaged Lease shall be
kept unimpaired and free from default All sums so expended by Mortgagee, with
interest thereon at the Default Rate from the date of each such expenditure,
shall be paid by Mortgagor to Mortgagee promptly upon demand by Mortgagee.
Mortgagor shall, within five (5) business days after written request by
Mortgagee, execute and deliver to Mortgagee, or to any person designated by
Mortgagee, such further instruments, agreements, powers, assignments,
conveyances or the like as may be necessary to complete or perfect the interest,
rights or powers of Mortgagee pursuant to this paragraph.
(c) Mortgagor shall enforce the obligations of the lessor under the
Mortgaged Lease and shall promptly notify Mortgagee in writing of any material
default by either the lessor or Mortgagor in the performance or observance of
any of the terms, covenants and conditions contained in the Mortgaged Lease.
Mortgagor shall deliver to Mortgagee, within ten (10) business days after
receipt, a copy of any material notice, demand, complaint or request for
compliance made by the lessor under the Mortgaged Lease. If the lessor shall
deliver to Mortgagee a copy of any notice of default given to Mortgagor, such
notice shall constitute full authority and protection to Mortgagee for any
actions taken or omitted to be taken in good faith by Mortgagee on such notice.
(d) If any action or proceeding shall be instituted to evict Mortgagor
or to recover possession of the Mortgaged Property from Mortgagor or any part
thereof or interest therein or any action or proceeding otherwise affecting the
Mortgaged Lease or this Mortgage shall be instituted, then Mortgagor shall,
immediately after receipt deliver to Mortgagee a true and complete copy of each
petition, summons, complaint, notice of motion, order to show cause and all
other pleadings and papers, however designated, served in any such action or
proceeding.
(e) Mortgagor covenants and agrees that the fee title to the Leased
Land and the leasehold estate created under the Mortgaged Lease shall not merge
but shall always remain separate and distinct, notwithstanding the union of said
estates either in Mortgagor or a third party by purchase or otherwise; and in
case Mortgagor acquires the fee title or any other estate, title or interest in
and to the Leased Land, the lien of this Mortgage shall, without further
conveyance, simultaneously with such acquisition, be spread to cover and attach
to such acquired estate and as so spread and attached shall be prior to the lien
of any mortgage placed on the acquired estate after the date of this Mortgage.
(f) No release or forbearance of any of Mortgagor's obligations under
the Mortgaged Lease, pursuant to the Mortgaged Lease or otherwise, shall release
Mortgagor from any of its obligations under this Mortgage, including its
obligations to pay rent and to perform all
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of the terms, provisions, covenants, conditions and agreements of the lessee
under the Mortgaged Lease.
(g) Except as required below with respect to renewals and extensions
of the Mortgaged Lease, Mortgagor shall not make any election or give any
consent or approval under the Mortgaged Lease without the prior written consent
of Mortgagee, which consent shall not be unreasonably withheld. Upon the
occurrence of any Event of Default hereunder, all such rights, together with the
right to terminate or to modify the Mortgaged Lease, which have been assigned
for collateral purposes to Mortgagee, shall automatically vest exclusively in
and be exercisable solely by Mortgagee.
(h) Mortgagor will give Mortgagee prompt written notice of the
commencement of any arbitration or appraisal proceeding under and pursuant to
the provisions of the Mortgaged Lease involving amounts in excess of $250,000 on
a present value basis. So long as no Event of Default shall have occurred and be
continuing hereunder, Mortgagor may conduct such proceeding provided that (i)
Mortgagee shall have the right to intervene and participate in any such
proceeding, (ii) Mortgagor shall confer with Mortgagee, and (iii) Mortgagor
shall exercise all rights of arbitration conferred upon it by the Mortgaged
Lease; provided, however, that automatically upon the occurrence of an Event of
Default and for so long as it shall be continuing Mortgagee shall have the sole
authority to conduct the proceeding. Nothing contained herein shall obligate
Mortgagee to participate in such proceeding.
(i) Mortgagor shall, within ten (10) days after written demand from
Mortgagee, deliver to Mortgagee proof of payment of all items that are required
to be paid by Mortgagor under the Mortgaged Lease, including, without
limitation, rent, taxes, operating expenses and other charges.
(j) To the fullest extent permitted by law, the lien of this Mortgage
shall attach to all of Mortgagor's rights and remedies at any time arising under
or pursuant to Subsection 365(h) of the Bankruptcy Code, 11 U.S.C. (S) 365(h),
as the same may hereafter be amended (the "Bankruptcy Code"), including, without
limitation, all of Mortgagor's rights to remain in possession of the Leased
Land. Mortgagor shall not, without Mortgagee's prior written consent, elect to
treat the Mortgaged Lease as terminated under Subsection 365(h)(1) of the
Bankruptcy Code. Any such election made without Mortgagee's consent shall be
void.
(k) Mortgagee shall have the right to proceed in its own name or in
the name of Mortgagor in respect of any claim, suit, action or proceeding
relating to the rejection of the Mortgaged Lease by the lessor or any other
party, including, without limitation, the right to file and prosecute under the
Bankruptcy Code, without joining or the joinder of Mortgagor, any proofs of
claim, complaints, motions, applications, notices and other documents. Any
amounts received by Mortgagee as damages arising out of the rejection of the
Mortgaged Lease as aforesaid shall be applied first to all costs and expenses of
Mortgagee (including, without limitation, attorneys' fees) incurred in
connection with the exercise of any of its rights or remedies under this
paragraph. Mortgagor acknowledges that the assignment of all claims and rights
to the payment of damages from the rejection of the Mortgaged Lease made under
the granting clauses of this Mortgage constitutes a present irreversible and
unconditional assignment
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and Mortgagor shall, at the request of Mortgagee, promptly make, execute,
acknowledge and deliver, in form and substance satisfactory to Mortgagee, a UCC
Financing Statement (Form UCC-1) and all such additional instruments, agreements
and other documents, as may at any time hereafter be required by Mortgagee to
carry out such assignment.
(l) If pursuant to Subsection 365(h)(2) of the Bankruptcy Code,
Mortgagor shall seek to offset against the rent reserved in the Mortgaged Lease
the amount of any damages caused by the nonperformance by the lessor or any
other party of any of their respective obligations under such Mortgaged Lease
after the rejection by the lessor or such other party of such Mortgaged Lease
under the Bankruptcy Code, then Mortgagor shall, prior to effecting such offset,
notify Mortgagee of its intent to do so, setting forth the amount proposed to be
so offset and the basis therefor. Mortgagee shall have the right to object to
all or any part of such offset that, in the reasonable judgment of Mortgagee,
would constitute a breach of such Mortgaged Lease, and in the event of such
objection, Mortgagor shall not effect any offset of the amounts found
objectionable by Mortgagee. Neither Mortgagee's failure to object as aforesaid
nor any objection relating to such offset shall constitute an approval of any
such offset by Mortgagee.
(m) If any action, proceeding, motion or notice shall be commenced or
filed in respect of the lessor under the Mortgaged Lease or any other party or
in respect of the Mortgaged Lease in connection with any case under the
Bankruptcy Code, then Mortgagee shall have the option, exercisable upon notice
from Mortgagee to Mortgagor, to conduct and control any such litigation with
counsel of Mortgagee's choice. Mortgagee may proceed in its own name or in the
name of Mortgagor in connection with any such litigation, and Mortgagor agrees
to execute any and all powers, authorizations, consents or other documents
required by Mortgagee in connection therewith. Mortgagor shall, upon demand, pay
to Mortgagee all costs and expenses (including attorneys' fees) paid or incurred
by Mortgagee in connection with the prosecution or conduct of any such
proceedings. Mortgagor shall not commence any action, suit, proceeding or case,
or file any application or make any motion, in respect of the Mortgaged Lease in
any such case under the Bankruptcy Code without the prior written consent of
Mortgagee.
(n) Mortgagor shall, after obtaining knowledge thereof, promptly
notify Mortgagee of any filing by or against the lessor or other party with an
interest in the Real Estate of a petition under the Bankruptcy Code. Mortgagor
shall promptly deliver to Mortgagee, following receipt, copies of any and all
notices, summonses, pleadings, applications and other documents received by
Mortgagor in connection with any such petition and any proceedings relating
thereto.
(o) If there shall be filed by or against Mortgagor a petition under
the Bankruptcy Code and Mortgagor, as lessee under the Mortgaged Lease, shall
determine to reject the Mortgaged Lease pursuant to Section 365(a) of the
Bankruptcy Code, then Mortgagor shall give Mortgagee not less than twenty (20)
days' prior notice of the date on which Mortgagor shall apply to the Bankruptcy
Court for authority to reject the Mortgaged Lease. Mortgagee shall have the
right, but not the obligation, to serve upon Mortgagor within such twenty (20)
day period a notice stating that Mortgagee demands that Mortgagor assume and
assign the Mortgaged Lease to Mortgagee pursuant to Section 365 of the
Bankruptcy Code. If Mortgagee shall serve upon Mortgagor the notice described in
the preceding sentence, Mortgagor shall not seek to reject such
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Mortgaged Lease and shall comply with the demand provided for in the preceding
sentence. In addition, effective upon the entry of an order for relief with
respect to Mortgagor under the Bankruptcy Code, Mortgagor hereby assigns and
transfers to Mortgagee a non-exclusive right to apply to the Bankruptcy Court
under subsection 365(d)(4) of the Bankruptcy Code for an order extending the
period during which the Mortgaged Lease may be rejected or assumed.
(p) Mortgagor shall request and use its best efforts to furnish to
Mortgagee, from time to time upon receipt of reasonable notice from Mortgagee,
in form and substance reasonably satisfactory to Mortgagee, estoppel certificate
from the lessor under the Mortgaged Lease with respect to such Mortgaged Lease.
(q) If the Mortgaged Lease shall be terminated prior to the natural
expiration of its term, and if, pursuant to any provision of the Mortgaged Lease
or otherwise, Mortgagee or its designee shall acquire from the lessor under such
Mortgaged Lease a new lease of the Real Estate or any part thereof, Mortgagor
shall have no right, title or interest in or to such new lease or the leasehold
estate created thereby, or renewal privileges therein contained.
46. Mortgagee Rights. (a) In connection with any foreclosure proceedings,
whether completed or not, Mortgagee may employ such attorneys or other
professionals as Mortgagee in its sole discretion determine to be necessary in
connection with the exercise of any powers hereunder or the discharge of any
duties hereunder. Additionally, Mortgagee may obtain such title reports,
surveys, appraisals, tax histories, assessments and reports as they reasonably
deem necessary. All costs and expenses in connection therewith shall be payable
as provided under the terms of this Mortgage.
(b) Mortgagee shall have no liability or responsibility for, and make
no warranties in connection with, the validity or enforceability of any document
evidencing the Obligations, or the description, value or status of title to the
Mortgaged Property. Mortgagee shall be protected in acting upon any notice,
request, consent, demand, statement, note or other paper or document which
Mortgagee believes to be genuine and to have been signed by the party or parties
purporting to sign the same. Mortgagee shall not be liable for any error of
judgment, nor any act done or step taken or admitted, nor for any mistakes of
law or fact, nor for anything which Mortgagee may do or refrain from doing in
good faith, nor shall Mortgagee have any accountability hereunder except for
willful misconduct or gross negligence. The powers and duties of Mortgagee
hereunder may be exercised through such attorneys, agents or servants as
Mortgagee may appoint and Mortgagee shall have no liability or responsibility
for any act, failure to act, negligence or willful misconduct of such attorney,
agent or servant so long as they were selected with reasonable care. In
addition, Mortgagee may consult with legal counsel selected by it and Mortgagee
shall have no liability or responsibility by reason of any act or failure to act
in accordance with the opinions of such counsel. Mortgagee may act hereunder and
may sell or otherwise dispose of the Mortgaged Property or any part thereof as
herein provided, although Mortgagee has been, may now be or may hereafter be, an
agent of the beneficial owners of this Mortgage, in respect of any matter of
business whatsoever. Mortgagee may act through its agent or attorney and it
shall not be necessary for Mortgagee to be present in person at any foreclosure
sale under this Mortgage.
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47. Article and Section Headings. The article and section headings in this
Mortgage are inserted for convenience of reference and shall not be considered a
part of this Mortgage or used in its interpretation.
48. Execution in Counterparts. This Mortgage may be executed in any number
of counterparts, each of which shall for all purposes be deemed to be an
original and all of which are identical, except that, to facilitate recordation
or filing, in any particular counterpart portions of Schedule A-I or A-II hereto
which describe properties situated in counties other than the county in which
such counterpart is to be recorded or filed may have been omitted.
49. Recording References in Schedule A-I and Schedule A-II. All recording
references in Schedule A-I and Schedule A-II hereto are to the official real
property records of the county in which the affected land is located. Unless
otherwise indicated herein (a) the leases, licenses or other instruments of
title described in Schedule A-I and Schedule A-II cover all salt in and under
the Real Estate; (b) Mortgagor owns all of the interest of the lessee under each
lease comprising the Mortgaged Property and (c) the leases, licenses or other
instruments provide for the payment of landowners' royalties with respect to all
salt and Other Minerals produced, saved and marketed from the Real Estate.
50. Conflicting Terms. When the terms and provisions contained herein in
any way conflict with the terms and provisions contained in the Credit
Agreement, the terms and provisions herein contained shall prevail, and, in the
event of any overlapping and consistent terms, covenants and conditions, insofar
as possible, the terms, covenants and conditions contained herein and in the
Credit Agreement shall both be applicable.
51. Subordinate Creditor. U.S. Bank National Association, not in its
individual capacity but solely as Trustee, (the "Trustee") is the holder of a
Mortgage, Assignment of Production, Security Agreement, Assignment of Leases and
Rents, and Fixture Filing in the original principal sum of $100,000,000 dated as
of March 17, 2004 (the "Subordinate Mortgage") executed and delivered by the
Mortgagor to the Trustee. Pursuant to the terms of an Intercreditor Agreement by
and between the Mortgagee and the Trustee dated as of March 17, 2004 (as the
same may be modified, amended, supplemented, restated or replaced), (i) the
Subordinate Mortgage and the security interests evidenced thereby are subject
to, and expressly subordinated to, this Mortgage and all liens in favor of
Mortgagee, its successors, successors in interest and assigns and (ii) certain
rights and obligations between Mortgagee and Trustee are set forth.
52. Special Filing as Financing Statement. This Mortgage shall likewise be
a Security Agreement and a Financing Statement. This Mortgage shall be filed for
record, among other places, in the real estate records of each county in which
any portion of the Real Estate is situated, and, when filed in such counties,
shall be effective as a financing statement covering any fixtures owned by
Mortgagor and located on, at or under the Salt Premises or the Leased Premises
(and accounts arising therefrom) from which salt, Other Minerals and other
As-Extracted Collateral are to mined by Mortgagor and financed. At the option of
Mortgagee, a carbon, photographic or other reproduction of this Mortgage or of
any financing statement covering the Mortgaged Property or any portion thereof
shall be sufficient as a financing statement and may be filed as such.
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53. Maximum Principal Amount. NOTWITHSTANDING ANY PROVISION SET FORTH
HEREIN TO THE CONTRARY, THE MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS, SECURED BY
THIS MORTGAGE AT EXECUTION, OR WHICH UNDER ANY CONTINGENCY MAY BECOME SECURED
HEREBY AT ANY TIME HEREAFTER, IS U.S. $62,141,113.50 PLUS ALL INTEREST PAYABLE
UNDER THE NOTES AND ALL AMOUNTS EXPENDED BY MORTGAGEE AFTER DEFAULT BY MORTGAGOR
(A) FOR THE PAYMENT OF TAXES, CHARGES OR ASSESSMENTS WHICH MAY BE IMPOSED BY LAW
UPON THE REAL ESTATE OR IMPROVEMENTS; (B) TO MAINTAIN THE INSURANCE REQUIRED
UNDER THIS MORTGAGE; (C) FOR ANY EXPENSES INCURRED IN MAINTAINING THE REAL
ESTATE OR IMPROVEMENTS AND UPHOLDING THE LIEN OF THIS MORTGAGE, INCLUDING, BUT
NOT LIMITED TO, THE EXPENSE OF ANY LITIGATION TO PROSECUTE OR DEFEND THE RIGHTS
AND LIEN CREATED BY THIS MORTGAGE, AND (D) FOR ANY AMOUNT, COST OR CHARGE TO
WHICH MORTGAGEE BECOMES SUBROGATED, UPON PAYMENT, WHETHER UNDER RECOGNIZED
PRINCIPLES OF LAW OR EQUITY, OR UNDER EXPRESS STATUTORY AUTHORITY.
This Mortgage has been duly executed by Mortgagor on the date first above
written.
[Remainder of Page Intentionally Left Blank]
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AMERICAN ROCK SALT COMPANY LLC,
a New York limited liability company
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Vice Chairman
STATE OF NEW YORK)
COUNTY OF MONROE) ss.:
On the 17th day of March in the year 2004 before me, the undersigned, a
Notary Public in and for said State, personally appeared Xxxx X. Xxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
/s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------
Notary Public
XXXXXXX X. XXXXXXXXXX, ESQ.
Notary Public, State of New York
Monroe County
Commission Expires August 15, 2006
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XXXXXXXXXX COUNTY INDUSTRIAL
DEVELOPMENT AGENCY, a New York public
benefit corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title:
STATE OF NEW YORK)
COUNTY OF Xxxxxxxxxx) ss.:
On the 17th day of March in the year 2004 before me, the undersigned, a
Notary Public in and for said State, personally appeared Xxxxxxx X. Xxxxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
/s/ Xxxxx X. Xxxxxxxx
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Notary Public
XXXXX X. XXXXXXXX
Notary Public, State of New York
Xxxxxxxxxx County
Commission Expires September 14, 06
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