EXHIBIT 4(a)(xii)
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, AND SECURITY AGREEMENT,
dated as of the 23rd day of April, 2002 (the "Mortgage"), is executed and
delivered by BUFFALO CHINA, INC., a New York corporation ("Buffalo China"), and
THE ERIE COUNTY INDUSTRIAL DEVELOPMENT AGENCY, a public benefit corporation
existing under the laws of the State of New York (the "Agency"), (Buffalo China
and the Agency hereafter collectively referred to as "Mortgagor"), to JPMORGAN
CHASE BANK (formerly known as The Chase Manhattan Bank), as Collateral Agent
under the Collateral Agent Agreement (as defined below) (the "Mortgagee").
Recitals
A. Pursuant to a 2001 Amended and Restated Note Purchase Agreement,
dated as of May 1, 2001 (such agreement, as has been or hereafter may be
modified, amended, renewed or replaced, the "Note Agreement"), by and among
Oneida, Ltd. ("Oneida"), THC Systems, Inc. ("THC") and Allstate Life Insurance
Company, Allstate Insurance Company, and Pacific Life Insurance Company
(successor to Pacific Mutual Life Insurance Company (individually, a
"Noteholder" and collectively, the "Noteholders"), THC has issued and sold to
the Noteholders $35,000,000 aggregate principal amount of its Senior Secured
Notes due May 31, 2005 (the "THC Notes"). Payment of the THC Notes were
guaranteed by Oneida pursuant to the Note Agreement and by Buffalo China
pursuant to an Amended and Restated Subsidiary Guarantee Agreement, dated as of
April 27, 2001 (as may be modified, amended, renewed, or replaced, the "Note
Agreement Guarantee").
B. Pursuant to that certain Amended and Restated Credit Agreement,
dated as of April 27, 2001 (as has been or hereafter may be modified, amended,
renewed or replaced, the "Credit Agreement"), by and among Buffalo China,
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as the
Administrative Agent (in such capacity, the "Administrative Agent"), and the
financial institutions parties thereto (collectively, the "Lenders"), the
Lenders have made available to Oneida certain credit facilities, including,
without limitation, a loan in the aggregate amount of $40,000,000 (the "Bullet
Loan") evidenced by the following promissory notes, each dated January 4, 2002
(as may be modified, amended, renewed or replaced, collectively referred to as
the "Bullet Notes"):
(i) Promissory Note in the amount of $6,545,454.55 in favor of
JPMorgan Chase Bank;
(ii) Promissory Note in the amount of $5,090,909.09 in favor of
Bank of America, N.A.;
(iii) Promissory Note in the amount of $6,545,454.55 in favor of
Fleet National Bank;
(iv) Promissory Note in the amount of $6,545,454.55 in favor of
HSBC Bank, USA;
(v) Promissory Note in the amount of $5,818,181.82 in favor of
Manufacturers and Traders Trust Company;
(vi) Promissory Note in the amount $5,090,909.09 in favor of Bank
of Nova Scotia;
(vii) Promissory Note in the amount of $2,181,818.18 in favor of
European American Bank; and
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(viii) Promissory Note in the amount of $2,181,818.18 in favor of
Banca Nazionale Del Lavoro.
C. Payment of the Bullet Notes, together with payment of other
indebtedness owed by Oneida, was guaranteed by Buffalo China pursuant to an
Amended and Restated Subsidiary Guarantee Agreement, dated as of August 27, 2001
(as may be modified, amended, renewed, or replaced, the "Credit Agreement
Guarantee").
D. The Noteholders under the Note Agreement and the Lenders under the
Credit Agreement (collectively referred to as the "Secured Parties"), together
with certain other secured creditors of Buffalo China, have entered into an
Amended and Restated Collateral Agency and Intercreditor Agreement dated as of
the date hereof (as may be modified, amended, supplemented or replaced, the
"Collateral Agent Agreement"), appointing JPMorgan Chase Bank as their
Collateral Agent and establishing their relative rights with respect to certain
collateral, including the property mortgaged hereby.
E. Pursuant to the terms of the Note Agreement and the Credit Agreement
(collectively, together with the Note Agreement Guarantee, the Credit Agreement
Guarantee, and this Mortgage, referred to as the "Transaction Documents"),
Mortgagor is required to grant to the Collateral Agent a mortgage on certain
real estate owned and/or leased by Mortgagor in order to secure repayment of the
THC Notes and the Bullet Notes (collectively referred to as the "Notes"), and
Buffalo China's obligation to guarantee repayment thereof.
WITNESSETH, that to secure (a) payment of the Notes, with interest
thereon, (b) performance of Buffalo China's obligations under the Transaction
Documents insofar as they relate to the Notes or guarantee repayment of the
Notes, (c) payment by Buffalo China to Mortgagee of all sums expended or
advanced by Mortgagee pursuant to any covenant, term, or provision of this
Mortgage, and (d) performance of each covenant, term and provision by Buffalo
China to be performed pursuant to this Mortgage (clauses (a)-(d) hereafter
collectively referred to as the "Indebtedness"), and provided that the maximum
principal indebtedness secured hereby shall never exceed $4,216,000.00,
Mortgagor hereby mortgages, grants, conveys, warrants, pledges, assigns, and
hypothecates unto Mortgagee, its successors and assigns, WITH THE POWER OF SALE,
the real property described in Exhibit A attached hereto including, but not
limited to, Mortgagor's leasehold interests in the Premises, (the "Premises"),
and all of the buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements, and improvements now or
hereafter located thereon (the "Improvements");
TOGETHER WITH all right, title, interest, and estate of Mortgagor now
owned, or hereafter acquired, in and to the following property, rights,
interests and estates (the Premises, the Improvements, and such property,
rights, interests, and estates hereinafter described are collectively referred
to as the "Mortgaged Property"):
GRANTING CLAUSE ONE
All easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
air rights and development rights, all rights to oil, gas, minerals, coal and
other substances of any kind or character, and all estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments and appurtenances of
any nature whatsoever, in any way belonging, relating or pertaining to the
Premises and the Improvements and the reversion and reversions, remainder and
remainders, and all land lying in the bed of any street, road, highway, alley or
avenue, opened, vacated or proposed, in front of or adjoining the Premises, to
the center line thereof and all the estates, rights, titles, interests, dower
and rights of dower, curtsey and rights of curtsey, property, possession, claim
and demand whatsoever, both at law and in equity, of Mortgagor of, in and to the
Premises and the Improvements and every part and parcel thereof, with the
appurtenances thereto;
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GRANTING CLAUSE TWO
All machinery, furniture, furnishings, equipment, computer software and
hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature, whether tangible or intangible,
whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an
interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Premises and the Improvements and all building
equipment, materials and supplies of any nature whatsoever owned by Mortgagor,
or in which Mortgagor has or shall have an interest, now or hereafter located
upon the Premises and the Improvements, or appurtenant thereto, or usable in
connection with the present or future operation, enjoyment and occupancy of the
Premises and the Improvements (hereinafter collectively referred to as the
"Equipment"), including any leases of any of the foregoing, any deposits
existing at any time in connection with any of the foregoing, and the proceeds
of any sale or transfer of the foregoing, and the right, title and interest of
Mortgagor in and to any of the Equipment that may be subject to any "security
interests" as defined in New York's Uniform Commercial Code (the "Uniform
Commercial Code"), superior in lien to the lien of this Mortgage;
GRANTING CLAUSE THREE
Awards or payments, including interest thereon, that may heretofore and
hereafter be made with respect to the Premises and the Improvements, whether
from the exercise of the right of eminent domain or condemnation (including,
without limitation, any transfer made in lieu of or in anticipation of the
exercise of said rights), or for a change of grade, or for any other injury to
or decrease in the value of the Premises and Improvements;
GRANTING CLAUSE FOUR
All leases and other agreements or arrangements heretofore or hereafter
entered into affecting the use, enjoyment or occupancy of, or the conduct of any
activity upon or in, the Premises and the Improvements, including any
extensions, renewals, modifications or amendments thereof, but excluding the
exercise by the Agency of the Agency's Reserved Rights, as that term is
hereafter defined, under the Agency Lease Agreement, dated as of February 1,
2000 between the Agency and Buffalo China (the "Agency Lease Agreement") (the
"Leases") and all rents, rent equivalents, moneys payable as damages or in lieu
of rent or rent equivalents, royalties (including, without limitation, all oil
and gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for the
account of or benefit of Mortgagor or its agents or employees from any and all
sources arising from or attributable to the Premises and the Improvements,
excluding, however, any monies payable to the Agency pursuant to the Agency's
Reserved Rights (the "Rents"), together with all proceeds from the sale or other
disposition of the Leases and the right to receive and apply the Rents to the
payment of the Debt;
GRANTING CLAUSE FIVE
All proceeds of and any unearned premiums on any insurance policies
covering the Mortgaged Property, including, without limitation, the right to
receive and apply the proceeds of any insurance, judgments, or settlements made
in lieu thereof, for damage to the Mortgaged Property;
GRANTING CLAUSE SIX
The right, in the name and on behalf of Mortgagor, to appear in and
defend any action or proceeding brought with respect to the Mortgaged Property
and to commence any action or proceeding to protect the interest of Mortgagee in
the Mortgaged Property;
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GRANTING CLAUSE SEVEN
All proceeds, products, offspring, rents and profits from any of the
foregoing, including, without limitation, those from sale, exchange, transfer,
collection, loss, damage, disposition, substitution or replacement of any of the
foregoing.
TO HAVE AND TO HOLD the above granted and described Mortgaged Property,
WITH THE POWER OF SALE, unto and to the use and benefit of Mortgagee, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that,
if Buffalo China shall well and truly pay to Mortgagee the Indebtedness at the
time and in the manner provided in the Notes and this Mortgage and shall well
and truly abide by and comply with each and every covenant and condition set
forth herein, in the Notes and in the other Transaction Documents in a timely
manner, these presents and the estate hereby granted shall cease, terminate and
be void upon the full payment of the Indebtedness.
This Mortgage secures the payment of the Indebtedness in a principal
amount not to exceed $4,216,000.00 (the "Secured Principal Amount"), plus
interest and amounts that Mortgagee expends under this Mortgage in connection
with (i) any taxes, charges or assessments that may be imposed by law upon the
Mortgaged Property, (ii) premiums on insurance policies covering the Mortgaged
Property, and (iii) expenses incurred in upholding the lien of this Mortgage,
including the expenses of any litigation to prosecute or defend the rights and
lien created by this Mortgage, all of the foregoing indebtedness and
obligations, collectively, the "Secured Indebtedness." Notwithstanding any
provision in this Mortgage to the contrary, (a) until the Indebtedness is paid
in full, this Mortgage secures the entire Indebtedness provided the maximum
principal indebtedness secured hereby shall never exceed the Secured Principal
Amount; (b) this Mortgage shall secure only the Indebtedness, taxes, charges,
assessments, premiums, and expenses included within the foregoing definition of
"Secured Indebtedness". The lien of this Mortgage is subordinate to the lien of
that certain mortgage, dated as of the date hereof, in the amount of $6,600,000
given by Mortgagor to Mortgagee.
Mortgagor represents and warrants to and covenants and agrees with
Mortgagee as follows:
PART I
GENERAL PROVISIONS
1. Payment of Indebtedness and Incorporation of Covenants, Conditions
and Agreements. Buffalo China shall pay the Indebtedness at the time and in the
manner provided in the Notes and in the other Transaction Documents. All the
covenants, conditions and agreements contained in the Notes and any of the
Transaction Documents are hereby made a part of this Mortgage to the same extent
and with the same force as if fully set forth herein.
2. Warranty of Title. Buffalo China warrants that Mortgagor has good,
marketable and insurable title to the Mortgaged Property and has the full power,
authority and right to execute, deliver and perform its obligations under this
Mortgage and to deed, encumber, mortgage, give, grant, bargain, sell, alienate,
convey, confirm, pledge, assign and hypothecate the same and that Mortgagor
possesses an unencumbered fee estate in the Premises and the Improvements and
that it owns the Mortgaged Property free and clear of all liens, encumbrances
and charges whatsoever except for (i) that certain mortgage, dated as of the
date hereof, in the amount of $6,600,000.00 given by the Mortgagor to the
Mortgagee, which mortgage shall be recorded in the Erie County Clerk's office
prior to the recording of this Mortgage, and (ii) certain utility easements
which do not affect in any way Mortgagor's use of the Mortgaged Property (the
"Permitted Exceptions") and that this Mortgage is and will remain a valid and
enforceable first lien on and security interest in the Mortgaged Property,
subject only to said Permitted Exceptions, if any. Buffalo China shall forever
warrant, defend and preserve such title and the validity and priority of the
lien of this Mortgage and shall forever warrant and defend the same to Mortgagee
against the claims of all persons whomsoever.
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3. Insurance.
(a) Buffalo China, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall obtain and maintain during the entire
term of this Mortgage (the "Term") policies of insurance against loss or damage
by fire, lightning and such other perils as are included in a standard
"all-risk" endorsement, and against loss or damage by all other risks and
hazards covered by a standard extended coverage insurance policy including,
without limitation, riot, and civil commotion, vandalism, malicious mischief,
burglary and theft. Such insurance shall be in an amount equal to the greatest
of (i) the then full replacement cost of the Improvements and Equipment, without
deduction for physical depreciation, (ii) $50,000,000.00, and (iii) such amount
that the insurer would not deem Mortgagor a co-insurer under said policies. The
policies of insurance carried in accordance with this paragraph shall be paid
annually in advance and shall contain a "Replacement Cost Endorsement" with a
waiver of depreciation, and shall have a deductible no greater than $100,000
unless so agreed by Mortgagee.
(b) Buffalo China, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall also obtain and maintain during the
Term the following policies of insurance:
(i) Flood insurance if any part of the Mortgaged Property is
located in an area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Program in an amount equal to the
lesser of (a) the minimum amount required, under the terms of coverage, to
compensate for any damage or loss on a replacement basis (or the unpaid balance
of the Indebtedness secured hereby if replacement cost coverage is not available
for the type of building insured); or (b) the maximum insurance available under
the appropriate National Flood Insurance Program.
(ii) Comprehensive public liability insurance, including
broad form property damage, blanket contractual and personal injuries (including
death resulting therefrom) coverages and containing minimum limits per
occurrence of $1,000,000 and $2,000,000 in the aggregate for any policy year. In
addition, at least $5,000,000 excess and/or umbrella liability insurance shall
be obtained and maintained for any and all claims, including all legal liability
imposed upon Mortgagor and all court costs and attorneys' fee incurred in
connection with the ownership, operation and maintenance of the Mortgaged
Property.
(iii) During any period of repair or restoration, builder's
"all risk" insurance in an amount equal to not less than the full insurable
value of the Improvement being renovated, restored or reconstructed insuring
against such risks (including, without limitation, fire and extended coverage
and collapse of the Improvements to agreed limits) as Mortgagee may request, in
form and substance acceptable to Mortgagee.
(iv) Such other insurance as may be customary for properties
of the same type as the Mortgaged Property in the geographic area in which the
Mortgaged Property is located and as may from time to time be reasonably
required by Mortgagee in order to protect its interests.
(c) All policies of insurance (the "Policies") required pursuant
to this paragraph: (i) shall be issued by companies approved by Mortgagee and
licensed to do business in the state where the Mortgaged Property is located,
with a claims paying ability rating of AA or better by Standard & Poor's Rating
Services; (ii) shall name Mortgagee and its successors and/or assigns as their
interest may appear as the beneficiary/mortgagee; (iii) shall contain a
non-contributory standard mortgagee clause and a Mortgagee's loss payable
endorsement or their equivalents, naming Mortgagee as the person to which all
payments made by such insurance company shall be paid; (iv) shall contain a
waiver of subrogation against Mortgagee; (v) shall be maintained throughout the
Term without cost to Mortgagee; (vi) shall be assigned and the originals
delivered to Mortgagee; (vii) shall contain such provisions as Mortgagee deems
reasonably necessary or desirable to protect its interest including, without
limitation, endorsements providing that neither Mortgagor, Mortgagee nor any
other party shall be a co-insurer under said Policies and that Mortgagee shall
receive at least thirty (30) days prior written notice of any modification,
reduction or cancellation; and (viii) shall be satisfactory in form and
substance to Mortgagee and shall be approved by Mortgagee as to amounts, form,
risk coverage, deductibles, loss payees and
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insureds. Buffalo China shall pay the premiums for such Policies (the "Insurance
Premiums") as the same become due and payable and shall furnish to Mortgagee
evidence of the renewal of each of the Policies with receipts for the payment of
the Insurance Premiums or other evidence of such payment reasonably satisfactory
to Mortgagee. If Buffalo China does not furnish such evidence and receipts at
least thirty (30) days prior to the expiration of any expiring Policy, then
Mortgagee may procure, but shall not be obligated to procure, such insurance and
pay the Insurance Premiums therefor, and Buffalo China agrees to reimburse
Mortgagee for the cost of such Insurance Premiums promptly on demand. Within
thirty (30) days after request by Mortgagee, Buffalo China shall obtain such
increases in the amounts of coverage required hereunder as may be reasonably
requested by Mortgagee, taking into consideration changes in the value of money
over time, changes in liability laws, changes in prudent customs and practices.
4. Casualty.
(a) If the Mortgaged Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (an "Insured Casualty"), Buffalo
China shall give prompt notice thereof to Mortgagee. Following the occurrence of
an Insured Casualty, Buffalo China, regardless of whether insurance proceeds are
available, shall promptly proceed to restore, repair, replace or rebuild the
same to be of at least equal value and of substantially the same character as
prior to such damage or destruction, all to be effected in accordance with
applicable law. The expenses incurred by Mortgagee in the adjustment and
collection of insurance proceeds shall become part of the Indebtedness and be
secured hereby and shall be reimbursed by Buffalo China to Mortgagee upon
demand.
(b) In case of loss or damages covered by any of the Policies, the
following provisions shall apply:
(i) In the event of an Insured Casualty that does not exceed
$500,000, Mortgagor may settle and adjust any claim without the consent of
Mortgagee and agree with the insurance company or companies on the amount to be
paid upon the loss; provided that such adjustment is carried out in a competent
and timely manner. In such case, Mortgagor is hereby authorized to collect and
receipt for any such insurance proceeds.
(ii) In the event an Insured Casualty shall exceed $500,000,
then and in that event, Mortgagee may settle and adjust any claim without the
consent of Mortgagor and agree with the insurance company or companies on the
amount to be paid on the loss and the proceeds of any such policy shall be due
and payable solely to Mortgagee and held in escrow by Mortgagee in accordance
with the terms of this Mortgage.
(iii) In the event of an Insured Casualty where the loss is
in an aggregate amount less than $500,000 and if, in the reasonable judgment of
Mortgagee, the Mortgaged Property can be restored within six (6) months and
prior to the maturity of the Notes to an economic unit not materially less
valuable and not less useful than the same was prior to the Insured Casualty,
and after such restoration will adequately secure the outstanding balance of the
Indebtedness, then, if no Event of Default (as hereinafter defined) shall have
occurred and be then continuing, the proceeds of insurance (after reimbursement
of any expenses incurred by Mortgagee) shall be applied towards the cost of
restoring, repairing, replacing or rebuilding the Mortgaged Property or part
thereof subject to the Insured Casualty, in the manner set forth below. Buffalo
China hereby covenants and agrees to commence and diligently to prosecute such
restoring, repairing, replacing or rebuilding; provided always, that Buffalo
China shall pay all costs (and if required by Mortgagee, Buffalo China shall
deposit the total thereof with Mortgagee in advance) of such restoring,
repairing, replacing or rebuilding in excess of the net proceeds of insurance
made available pursuant to the terms hereof.
(iv) Except as provided above in clauses (ii) and (iii) of
this Paragraph 4, the proceeds of insurance collected upon any Insured Casualty
shall, at the option of Mortgagee in its sole discretion, be applied to the
payment of the Indebtedness or applied to reimburse Buffalo China for the cost
of
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restoring, repairing, replacing or rebuilding the Mortgaged Property or part
thereof subject to the Insured Casualty, in the manner set forth below.
(v) In the event Buffalo China is entitled to reimbursement
out of insurance proceeds held by Mortgagee, such proceeds shall be disbursed
from time to time upon Mortgagee being furnished with (1) evidence satisfactory
to it of the estimated cost of completion of the restoration, repair,
replacement and rebuilding, (2) funds or, at Mortgagee's option, assurances
satisfactory to Mortgagee that such funds are available, sufficient in addition
to the proceeds of insurance to complete the proposed restoration, repair,
replacement and rebuilding, and (3) such architect's certificates, waivers of
lien, contractor's sworn statements, title insurance endorsements, bonds, plats
of survey and such other reasonable evidences of cost, payment and performance
as Mortgagee may reasonably require and approve. Mortgagee may, in any event,
require that all plans and specifications for such restoration, repair,
replacement and rebuilding be submitted to and approved by Mortgagee prior to
commencement of work. No payment made prior to the final completion of the
restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the value of the work performed from time to time; funds other than
proceeds of insurance shall be disbursed prior to disbursement of such proceeds;
and at all times, the undisbursed balance of such proceeds remaining in the
hands of Mortgagee, together with funds deposited for that purpose or
irrevocably committed to the satisfaction of Mortgagee by or on behalf of
Buffalo China for that purpose, shall be at least sufficient, in the reasonable
judgment of Mortgagee, to pay for the cost of completion of the restoration,
repair, replacement or rebuilding, free and clear of all liens or claims for
lien. Any surplus which may remain out of insurance proceeds held by Mortgagee
after payment of such costs of restoration, repair, replacement or rebuilding
shall be paid to Buffalo China.
5. Representations. Buffalo China hereby represents and warrants to
Mortgagee as follows:
(a) This Mortgage is in all respects a valid and legally binding
obligation of Buffalo China, enforceable in accordance with its terms.
(b) The execution and delivery of this Mortgage and the
performance and observance by Buffalo China of its obligations hereunder will
not contravene or result in a breach of (i) Buffalo China's certificate of
incorporation or by-laws, (ii) any governmental requirements, (iii) any decree
or judgement binding on Mortgagor, or (iv) any agreement or instrument binding
on Mortgagor or any of its properties, nor will the same result in the creation
of any lien or security interest under any such agreement or instrument.
(c) All utility services necessary and sufficient for the
construction, development and operation of the Mortgaged Property for its
intended purposes are presently available to the Premises through dedicated
public rights of way or through perpetual private easements, approved by
Mortgagee, with respect to which the Mortgage creates a valid, binding and
enforceable lien, including, but not limited to, water supply, storm and
sanitary sewer, gas, electric and telephone facilities, and drainage.
(d) Neither the Mortgaged Property nor any portion thereof is now
damaged or injured as result of any fire, explosion, accident, flood or other
casualty or has been the subject of any taking, and, to the knowledge of Buffalo
China, no taking is pending or contemplated.
(e) All federal, state and other tax returns of Buffalo China with
respect to the Mortgaged Property required by law to be filed have been filed;
all federal, state and other taxes, assessments and other governmental charges
upon Buffalo China with respect to the Mortgaged Property which are due and
payable have been paid; and Buffalo China has set aside on its books provisions
reasonably adequate for the payment of all such taxes for periods subsequent to
the periods for which such returns have been filed.
(f) Buffalo China has made no contract or arrangement of any kind
or type whatsoever (whether oral or written, formal or informal), the
performance of which by the other party thereto could give rise to a lien or
encumbrance on the Mortgaged Property, except for contracts (all of which have
been
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disclosed in writing to Mortgagee) made by Mortgagor with parties who have
executed and delivered lien waivers to Buffalo China, and which, in the opinion
of Mortgagee's counsel, will not create rights in existing or future lien
claimants which may be superior to the lien of the Mortgage.
(g) The rights of way for all roads necessary for the full
utilization of the Improvements for their intended purposes have either been
acquired by the Mortgagor, the appropriate governmental authority or have been
dedicated to public use and accepted by such governmental authority, and all
such roads shall have been completed, or all necessary steps shall have been
taken by Buffalo China and such governmental authority to assure the complete
construction and installation thereof prior to the date upon which access to the
Mortgaged Property via such roads will be necessary. All curb cuts, driveway
permits and traffic signals necessary for access to the Mortgaged Property after
completion of the Improvements are existing or have been fully approved by the
appropriate governmental authority.
(h) No Event of Default (hereinbelow defined) exists and no event
which but for the passage of time, the giving of notice or both would constitute
an Event of Default has occurred.
(i) The Permitted Exceptions do not and will not materially and
adversely affect (1) the ability of Buffalo China to pay in full the principal
and interest on the Notes in a timely manner or (2) the use of the Mortgaged
Property for the use currently being made thereof, the operation of the
Mortgaged Property as currently being operated or the value of the Mortgaged
Property.
(j) Upon the execution by Mortgagor and the recording of this
Mortgage, and upon the execution and filing of UCC-1 financing statements or
amendments thereto, Mortgagee will have a valid first lien on the Mortgaged
Property and a valid security interest in the Equipment subject to no liens,
charges or encumbrances other than the Permitted Exceptions.
(k) Buffalo China (1) has not executed the Notes, this Mortgage,
or any other Transaction Document with the actual intent to hinder, delay, or
defraud any creditor and (2) has received reasonably equivalent value in
exchange for its obligations under the Notes, this Mortgage, and the Transaction
Documents. The fair saleable value of Mortgagor's assets exceed and will,
immediately following the execution and delivery of this Mortgage, exceed
Mortgagor's total liabilities, including, without limitation, subordinated,
unliquidated, disputed or contingent liabilities. The fair saleable value of
Mortgagor's assets is and will, immediately following the execution and delivery
of this Mortgage, be greater than Mortgagor's probable liabilities, including
the maximum amount of its contingent liabilities or its debts as such debts
become absolute and matured. Mortgagor's assets do not and, immediately
following the execution and delivery of this Mortgage will not, constitute
unreasonably small capital to carry out its business as conducted or as proposed
to be conducted. Mortgagor does not intend to, and does not believe that it
will, incur debts and liabilities (including, without limitation, contingent
liabilities and other commitments) beyond its ability to pay such debts as they
mature (taking into account the timing and amounts to be payable on or in
respect of obligations of Mortgagor).
(l) Mortgagor has full power, authority and right to execute,
deliver and perform its obligations pursuant to this Mortgage, and to deed,
mortgage, give, grant, bargain, sell, alien, convey, confirm, warrant, pledge,
hypothecate and assign the Mortgaged Property pursuant to the terms hereof and
to keep and observe all of the terms of this Mortgage on Mortgagor's part to be
performed.
(m) Buffalo China is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended and the
related Treasury Department regulations, including temporary regulations.
6. Appointment of Receiver. In any action to foreclose this Mortgage,
Mortgagee shall be entitled, without notice and as a matter of right and without
regard to the adequacy of any security of the indebtedness or the solvency of
Mortgagor, upon application to any court having jurisdiction, to the appointment
of a receiver of the rents, income and profits of the Mortgaged Property. If an
Event of Default occurs under this Mortgage, Buffalo China, upon demand of
Mortgagee, shall surrender the possession of, and it shall be lawful for
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Mortgagee, by such officer or agent as it may appoint, to take possession of,
all or any part of the Mortgaged Property together with the books, papers, and
accounts of Buffalo China pertaining thereto, and to hold, operate and manage
the same, and from time to time to make all needed repairs and improvements as
Mortgagee shall deem wise; and, if Mortgagee deems it necessary or desirable, to
complete construction and equipping of any Improvements and in the course of
such construction or equipping to make such changes to the same as it may deem
desirable; and Mortgagee may sell the Mortgaged Property or any part thereof, or
institute proceedings for the complete or partial foreclosure of the lien of
this Mortgage on the Mortgaged Property, or lease the Premises or any part
thereof in the name and for the account of Mortgagor or Mortgagee and collect,
receive and sequester the rents, revenues, earnings, income, products and
profits therefrom, and out of the same and any other monies received hereunder
pay or provide for the payment of, all proper costs and expenses of taking,
holding, leasing, selling and managing the same, including reasonable
compensation to Mortgagee, its agents and counsel, and any charges of Mortgagee
hereunder, and any taxes and other charges prior to the lien of this Mortgage
which Mortgagee may deem it wise to pay. The Receiver shall also be authorized
to collect from Buffalo China, and Buffalo China agrees to pay, the fair rental
value of Buffalo China's use and occupancy of the Mortgaged Property.
7. Payment of Real Estate Taxes. Buffalo China shall pay all taxes,
assessments, sewer rents or water rates or sums due under any payment in lieu of
tax agreement ("Pilot Agreement") and in default thereof, Mortgagee may pay the
same. In the event that Mortgagee shall pay any such tax, assessment, sewer
rent, water rate or sums due under any Pilot Agreement, Mortgagee shall have the
right, among other rights, to declare the amount so paid with interest thereon
immediately due and payable, and upon default of Buffalo China in paying any
such amount with interest thereon, Mortgagee shall have the right, subject to
the limitations contained in the definition of Secured Indebtedness hereinabove
set forth, to foreclose for such amount as well as any amounts due under the
Notes.
In the event that Buffalo China should fail to pay any sum Buffalo
China has agreed to pay pursuant to this covenant for a period in excess of
sixty (60) days after the same is due and payable, in addition to any other
remedies available to Mortgagee hereunder, Mortgagee may, at its option, require
that Buffalo China deposit with Mortgagee, monthly, one-twelfth (1/12th) of the
annual charges for taxes and any other sums Buffalo China is obligated to pay
pursuant to this covenant and Buffalo China shall make such deposits with
Mortgagee. Buffalo China shall simultaneously therewith deposit with Mortgagee a
sum of money which together with the monthly installments aforementioned will be
sufficient to make payment of all sums required to be paid hereunder at least
thirty (30) days prior to the due date of such payments, it being understood
that Mortgagee shall calculate the amount of such deposits and notify Buffalo
China of the sum due. Should an Event of Default (hereinbelow defined) occur,
the funds deposited with Mortgagee pursuant to this provision may be applied in
payment of the charges for which said funds shall have been deposited or to the
payment of any other sums secured by this Mortgage as Mortgagee sees fit.
8. Payment of Mortgage Taxes. Buffalo China shall pay all taxes, if
any, imposed pursuant to Article 11 of the New York Tax Law or any other
statute, order or regulation, whether said tax is imposed at the time of
recording or subsequent thereto. This obligation shall survive the satisfaction
or other termination of this Mortgage.
9. Sale in One Parcel. In the event of a foreclosure of this Mortgage
or any mortgage at any time consolidated with this Mortgage, Mortgagor agrees
that Mortgagee shall be entitled to a judgment directing the referee appointed
in the foreclosure proceeding to sell all of the parcels constituting the
Premises at one foreclosure sale, either as a group or separately and that the
Mortgagor expressly waives any right that it may now have or hereafter acquire
to (i) request or require that the parcels be sold separately or (ii) request,
if Mortgagee has elected to sell parcels separately, that there be a
determination of any deficiency amount after any such separate sale or otherwise
require a calculation of whether said parcel or parcels separately sold were
conveyed for their "fair market value".
10. Condemnation. (a) Buffalo China shall promptly give Mortgagee
written notice of the actual or threatened commencement of any condemnation or
eminent domain proceeding (a "Condemnation") and
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shall deliver to Mortgagee copies of any and all papers served in connection
with such Condemnation. Following the occurrence of a Condemnation, Buffalo
China, regardless of whether an Award (hereinafter defined) is available, shall
promptly proceed to restore, repair, replace or rebuild the same to the extent
practicable to be of at least equal value and of substantially the same
character as prior to such Condemnation, all to be effected in accordance with
applicable law.
(b) Mortgagee is hereby irrevocably appointed as Mortgagor's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment ("Award") for any taking accomplished
through a Condemnation (a "Taking") and to make any compromise or settlement in
connection with such Condemnation, subject to the provisions of this Mortgage.
Notwithstanding any Taking by any public or quasi-public authority (including,
without limitation, any transfer made in lieu of or in anticipation of such a
Taking), Buffalo China shall continue to pay the Indebtedness at the time and in
the manner provided for in the Notes, and the Indebtedness shall not be reduced
unless and until any Award shall have been actually received and applied by
Mortgagee to expenses of collecting the Award and by Secured Parties to the
discharge of the Indebtedness. Mortgagor shall cause any Award that is payable
to Mortgagor to be paid directly to Mortgagee.
(c) In the event of any Condemnation where the Award is in an
aggregate amount less than $500,000, and if, in the reasonable judgment of
Mortgagee, the Mortgaged Property can be restored within six (6) months and
prior to the maturity of the Notes to an economic unit not less valuable and not
less useful than the same was prior to the Condemnation, and after such
restoration will adequately secure the outstanding balance of the Indebtedness,
then, if no Event of Default shall have occurred and be then continuing, the
proceeds of the Award (after reimbursement of any expenses incurred by
Mortgagee) shall be applied to reimburse Buffalo China for the cost of
restoring, repairing, replacing or rebuilding the Mortgaged Property or part
thereof subject to Condemnation, in the manner set forth below. Buffalo China
hereby covenants and agrees to commence and diligently to prosecute such
restoring, repairing, replacing or rebuilding; provided always, that Buffalo
China shall pay all costs (and if required by Mortgagee, Buffalo China shall
deposit the total thereof with Mortgagee in advance) of such restoring,
repairing, replacing or rebuilding in excess of the Award made available
pursuant to the terms hereof.
(d) Except as provided above, the Award collected upon any
Condemnation shall, at the option of Mortgagee in its sole discretion, be
applied to the payment of the Indebtedness or applied towards the cost of
restoring, repairing, replacing or rebuilding the Mortgaged Property or part
thereof subject to the Condemnation, in the manner set forth below. If the
Mortgaged Property is sold, through foreclosure or otherwise, prior to the
receipt by Mortgagee of such Award, Mortgagee shall have the right, whether or
not a deficiency judgment shall be recoverable or shall have been sought,
recovered or denied, to receive all or a portion of said Award sufficient to pay
the Indebtedness.
(e) In the event Buffalo China is entitled to payment of the Award
received by Mortgagee, such proceeds shall be disbursed from time to time upon
Mortgagee being furnished with (1) evidence satisfactory to it of the estimated
cost of completion of the restoration, repair, replacement and rebuilding
resulting from such condemnation, (2) funds or, at Mortgagee's option,
assurances satisfactory to Mortgagee that such funds are available, sufficient
in addition to the proceeds of the Award to complete the proposed restoration,
repair, replacement and rebuilding, and (3) such architect's certificates,
waivers of lien, contractor's sworn statements, title insurance endorsements,
bonds, plats of survey and such other evidences of costs, payment and
performance as Mortgagee may reasonably require and approve; and Mortgagee may,
in any event, require that all plans and specifications for such restoration,
repair, replacement and rebuilding be submitted to and approved by Mortgagee
prior to commencement of work. No payment made prior to the final completion of
the restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the value of the work performed from time to time; funds other than
proceeds of the Award shall be disbursed prior to disbursement of such proceeds;
and at all times, the undisbursed balance of such proceeds remaining in hands of
Mortgagee, together with funds deposited for that purpose or irrevocably
committed to the satisfaction of Mortgagee by or on behalf of Mortgagor for that
purpose, shall be at least sufficient in the reasonable judgment of Mortgagee to
pay for the costs of completion of the restoration, repair, replacement
or rebuilding, free and clear of all liens or claims for lien. Any surplus which
may remain out of the Award received by Mortgagee after payment of such costs of
restoration, repair, replacement
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or rebuilding shall, in the sole and absolute discretion of Mortgagee, be
retained by Mortgagee and applied to payment of the Indebtedness.
11. Maintenance and Use of Mortgaged Property. Buffalo China shall
cause the Mortgaged Property to be maintained in a good and safe condition and
repair. The Improvements and the Equipment shall not be removed, demolished or
materially altered (except for normal replacement of the Equipment in the
ordinary course of business) without the consent of Mortgagee. Buffalo China
shall promptly comply with all laws, orders and ordinances affecting the
Mortgaged Property, or its use of the Mortgaged Property. Buffalo China shall
not initiate, join in, acquiesce in, or consent to any change in any private
restrictive covenant, zoning law or other public or private restriction,
limiting or defining the uses which may be made of the Mortgaged Property or any
part thereof. If under applicable zoning provisions the use of all or any
portion of the Mortgaged Property is or shall become a nonconforming use,
Buffalo China will not cause or permit such nonconforming use to be discontinued
or abandoned without the express written consent of Buffalo China. Buffalo China
shall not (i) change the use of the Mortgaged Property, (ii) permit or suffer to
occur any waste on or to the Mortgaged Property or to any portion thereof or
(iii) take any steps whatsoever to convert the Mortgaged Property, or any
portion thereof, to a condominium or cooperative form of management. Buffalo
China will not install or permit to be installed on the Premises any underground
storage tank.
12. Transfer or Encumbrance of the Mortgaged Property.
(a) Mortgagor shall not, without the prior written consent of
Mortgagee, sell, convey, alienate, mortgage, encumber, pledge or otherwise
transfer the Mortgaged Property or any part thereof, or permit the Mortgaged
Property or any part thereof to be sold, conveyed, alienated, mortgaged,
encumbered, pledged or otherwise transferred, provided, however, that the Agency
may convey the Mortgaged Property to Buffalo China, subject to this Mortgage, in
accordance with the Agency Lease Agreement without the Mortgagee's prior written
consent.
(b) A sale, conveyance, alienation, mortgage, encumbrance, pledge
or transfer within the meaning of this Paragraph 12 shall be deemed to include
(i) an installment sales agreement wherein Mortgagor agrees to sell the
Mortgaged Property or any part thereof for a price to be paid in installments;
(ii) an agreement by Mortgagor leasing all or a substantial part of the
Mortgaged Property; and (iii) a sale, assignment or other transfer of, or the
grant of a security interest in, Mortgagor's right, title and interest in and to
any leases or any rents.
(c) Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Indebtedness immediately due and payable upon Mortgagor's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property without Mortgagee's consent. This provision shall apply to
every sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of
the Mortgaged Property regardless of whether voluntary or not, or whether or not
Mortgagee has consented to any previous sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property.
(d) Mortgagee's consent to one sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Mortgaged Property shall not be
deemed to be a waiver of Mortgagee's right to require such consent to any future
occurrence of same. Any sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Mortgaged Property made in contravention of this
paragraph shall be null and void and of no force and effect.
(e) Mortgagee may withhold its consent in its sole discretion.
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13. Books and Records. Buffalo China shall keep and maintain at all
times at Buffalo China's address stated in this Mortgage, or such other place as
Mortgagee may approve in writing, complete and accurate books of accounts and
records adequate to reflect correctly the results of the operation of the
Mortgaged Property and copies of all written contracts, leases and other
instruments which affect the Mortgaged Property. Such books, records, contracts,
leases and other instruments shall be subject to examination and inspection at
any reasonable time by Mortgagee, at Mortgagee's expense upon five (5) days
prior notice, at Buffalo China's office.
14. Estoppel Certificates and No Default Affidavits. After request by
Mortgagee, Buffalo China shall within ten (10) days furnish Mortgagee with a
statement, duly acknowledged and certified, setting forth (i) the amount of the
original principal amount of the Notes, (ii) the unpaid principal amount of the
Notes, (iii) the rate of interest of the Notes, (iv) the date installments of
interest and/or principal were last paid, (v) any offsets or defenses to the
payment of the Indebtedness, if any, (vi) that the Notes, this Mortgage and the
other Transaction Documents are valid, legal and binding obligations and have
not been modified or if modified, giving particulars of such modification; and
(vii) reaffirming all representations and warranties of Mortgagor set forth
herein and in the other Transaction Documents as of the date requested by
Mortgagee or, to the extent of any changes to any such representations and
warranties, so stating such changes.
15. Usury. It is expressly stipulated and agreed to be the intent of
Buffalo China, and Mortgagee at all times to comply with applicable state usury
law or applicable United States federal usury law (to the extent that it permits
Mortgagee to contract for, charge, take, reserve, or receive a greater amount of
interest than under state law). If the applicable law (state or federal) is ever
judicially interpreted so as to render usurious any amount called for under the
Notes or under any of the other Transaction Documents, or contracted for,
charged, taken, reserved, or received with respect to the Indebtedness, or if
Secured Parties' exercise of the option to accelerate the maturity of the Notes,
or if any prepayment by Buffalo China results in Buffalo China having paid any
interest in excess of that permitted by applicable law, then it is Buffalo
China's and Mortgagee's express intent that all excess amounts theretofore
collected shall be credited on the principal balance of the Notes and all other
Indebtedness (or, if the Notes and all other Indebtedness have been or would
thereby be paid in full, refunded to Buffalo China), and the provisions of the
Notes and the other Transaction Documents immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new documents, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder or thereunder.
16. Performance of Other Agreements. Buffalo China shall observe and
perform each and every term to be observed or performed by Mortgagor pursuant to
the terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property.
17. Further Acts, Etc. Mortgagor will, at the cost of Buffalo China,
and without expense to Mortgagee, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, Uniform Commercial Code financing statements or continuation
statements, transfers and assurances as Mortgagee shall, from time to time,
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Mortgagee the property and rights hereby deeded, mortgaged,
given, granted, bargained, sold, alienated, conveyed, confirmed, pledged,
assigned and hypothecated or intended now or hereafter so to be, or which
Mortgagor may be or may hereafter become bound to convey or assign to Mortgagee,
or for carrying out the intention or facilitating the performance of the terms
of this Mortgage or for filing, registering or recording this Mortgage.
Mortgagor, on demand, will execute and deliver and hereby authorizes Mortgagee
to execute in the name of Mortgagor or without the signature of Mortgagor to the
extent Mortgagee may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Mortgagee in the Mortgaged Property. Upon foreclosure, the
appointment of a receiver or any other relevant action, Mortgagor will, at the
cost of Buffalo China and without expense to Mortgagee, cooperate fully and
completely to effect the assignment or transfer of any license, permit,
agreement or any other right necessary or useful to the operation of or the
Mortgaged Property. Mortgagor grants to Mortgagee an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
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any and all rights and remedies available to Mortgagee at law and in equity,
including, without limitation, such rights and remedies available to Mortgagee
pursuant to this paragraph.
18. Recording of Mortgage, Etc. Buffalo China forthwith upon the
execution and delivery of this Mortgage and thereafter, from time to time, will
cause this Mortgage, and any security instrument creating a lien or security
interest or evidencing the lien hereof upon the Mortgaged Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Mortgagee in, the Mortgaged Property. Buffalo
China will pay all filing, registration or recording fees, and all expenses
incident to the preparation, execution and acknowledgment of this Mortgage, any
mortgage supplemental hereto, any security instrument with respect to the
Mortgaged Property and any instrument of further assurance, and all federal,
state, county and municipal, taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of this
Mortgage, any mortgage supplemental hereto, any security instrument with respect
to the Mortgaged Property or any instrument of further assurance, except where
prohibited by law so to do. Buffalo China shall hold harmless and indemnify
Mortgagee, its successors and assigns, against any liability incurred by reason
of the imposition of any tax on the making and recording of this Mortgage.
19. Reporting Requirements. Buffalo China agrees to give prompt notice
to Mortgagee of the insolvency or bankruptcy filing of Buffalo China or the
insolvency or bankruptcy filing of any guarantor of the Indebtedness.
20. Events of Default. The Indebtedness under the Notes shall become
immediately due and payable at the option of Mortgagee upon the happening of any
one or more of the following events of default (each an "Event of Default"):
(a) an Event of Default shall have occurred under any of the Notes
or under any Transaction Document;
(b) if any of the taxes or other charges are not paid when the
same are due and payable;
(c) if the Insurance Policies are not kept in full force and
effect, or if the Insurance Policies are not delivered to Mortgagee upon
request;
(d) if Mortgagor transfers or encumbers any portion of the
Mortgaged Property without Mortgagee's prior written consent, except a transfer
by the Agency to Buffalo China, as permitted under Section 12 of this Mortgage;
(e) if any representation or warranty of Buffalo China made herein
or in any certificate, report, or other instrument or document furnished to
Buffalo China hereunder shall have been false or misleading in any material
respect when made;
(f) if Buffalo China shall be in default under any other mortgage
or security agreement covering any part of the Mortgaged Property whether it be
superior or junior in lien to this Mortgage;
(g) if the Mortgaged Property becomes subject to any mechanic's,
materialman's or other lien and such lien is not removed of record within thirty
(30) days of the filing or recording of such lien (except a lien for local real
estate taxes and assessments not then due and payable);
(h) if Buffalo China fails to cure properly any violations of laws
or ordinances affecting or which may be interpreted to affect the Mortgaged
Property within thirty (30) days after Buffalo China first receives notice of
any such violations;
13
(i) except as expressly permitted in this Mortgage, the
alteration, improvement, demolition or removal of any of the Improvements
without the prior consent of Mortgagee;
(j) if Buffalo China ceases to continuously use the Mortgaged
Property or any material portion thereof for any reason whatsoever (other than
temporary cessation in connection with any repair or renovation thereof
undertaken with the consent of Mortgagee);
(k) if Buffalo China fails to cure a default under any other term,
covenant or provision of this Mortgage within thirty (30) days after Mortgagee
gives notice of any such default;
(l) an Event of Default shall have occurred under that certain
mortgage, dated as of the date hereof, in the amount of $4,216,000.00 given by
the Mortgagor to the Mortgagee; or
(l) an Event of Default shall have occurred under that certain
mortgage, dated as of the date hereof, in the amount of $6,600,000.00 given by
the Mortgagor to the Mortgagee.
21. Right To Cure Defaults. Upon the occurrence of any Event of Default
or if Buffalo China fails to make any payment (including, without limitation,
any required payments for taxes, insurance or to discharge any liens with
respect to the Property) or to do any act as herein provided, Mortgagee may, but
without any obligation to do so and without notice to or demand on Buffalo China
and without releasing Buffalo China from any obligation hereunder, make or do
the same in such manner and to such extent as Mortgagee may deem necessary to
protect the security hereof. Mortgagee is authorized to enter upon the Mortgaged
Property for such purposes or appear in, defend, or bring any action or
proceeding to protect its interest in the Mortgaged Property or to foreclose
this Mortgage, and the cost and expense thereof (including reasonable attorneys'
fees and disbursements to the extent permitted by law), with interest at the
highest rate provided in the Notes for the period after notice from Mortgagee
that such cost or expense was incurred to the date of payment, shall constitute
a portion of the Indebtedness, subject to the limitations contained in the
definition of Secured Indebtedness hereinabove set forth, shall be secured by
this Mortgage and shall be due and payable upon demand.
22. Additional Remedies.
(a) Upon the occurrence of any Event of Default, Mortgagee may
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 by
Mortgagee itself or otherwise, and Mortgagee and the Secured Parties may take
the following additional actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as they may determine, in their sole
discretion, without impairing or otherwise affecting their other rights and
remedies:
(i) declare the entire Indebtedness to be immediately due and
payable;
(ii) institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the complete foreclosure of this
Mortgage in which case the Mortgaged Property or any interest therein may be
sold for cash or upon credit in one or more parcels or in several interests or
portions and in any order or manner, reserving Mortgagee's right to seek a
deficiency judgment against Buffalo China;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute proceedings for
the partial foreclosure of this Mortgage for the portion of the Indebtedness
then due and payable, subject to the continuing lien of this Mortgage for the
balance of the Indebtedness not then due;
(iv) sell for cash or upon credit the Mortgaged Property or
any part thereof and all estate, claim, demand, right, title and interest of
Mortgagor therein and rights of redemption thereof,
14
pursuant to the power of sale contained herein or otherwise, at one or more
sales, as an entirety or in parcels, at such time and place, upon such terms and
after such notice thereof as may be required or permitted by law;
(v) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained herein,
or in any of the other Transaction Documents;
(vi) recover judgment on the Notes either before, during or
after any proceedings for the enforcement of this Mortgage;
(vii) apply for the appointment of a trustee, receiver,
liquidator or conservator of the Mortgaged Property, without notice and without
regard for the adequacy of the security for the Debt and without regard for the
solvency of Buffalo China, any Guarantor or of any person, firm or other entity
liable for the payment of the Debt;
(viii) sell all or any portion of the Mortgaged Property
pursuant to Article 14 of New York's Real Property Actions and Proceedings Law;
and
(ix) pursue such other rights and remedies as may be
available at law or in equity or under the Uniform Commercial Code including
without limitation the right to receive Rents and any other receivables or
rights to payments of Buffalo China relating to the Mortgaged Property.
In the event of a sale, by foreclosure or otherwise, of less than all of the
Mortgaged Property, this Mortgage shall continue as a lien on the remaining
portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this paragraph or
otherwise, shall be applied by Mortgagee to the payment of the Indebtedness in
the manner set forth in the Collateral Agent Agreement.
(c) Mortgagee may adjourn from time to time any sale by it to be
made under or by virtue of this Mortgage by announcement at the time and place
appointed for such sale or for such adjourned sale or sales; and, except as
otherwise provided by any applicable provision of law, Mortgagee, without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.
(d) Upon the completion of any sale or sales pursuant hereto,
Mortgagee, or an officer of any court empowered to do so, shall execute and
deliver to the accepted purchaser or purchasers a good and sufficient
instrument, or good and sufficient instruments, conveying, assigning and
transferring all estate, right, title and interest in and to the property and
rights sold. Mortgagee is hereby irrevocably appointed the true and lawful
attorney of Mortgagor, in its name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the Mortgaged Property and rights so
sold and for that purpose Mortgagee may execute all necessary instruments of
conveyance, assignment and transfer, and may substitute one or more persons with
like power, Mortgagor hereby ratifying and confirming all that its said attorney
or such substitute or substitutes shall lawfully do by virtue hereof. Any sale
or sales made under or by virtue of this paragraph, whether made under the power
of sale herein granted or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, of Mortgagor in and to the properties and rights so sold, and shall
be a perpetual bar both at law and in equity against Mortgagor and against any
and all persons claiming or who may claim the same, or any part thereof from,
through or under Mortgagor.
(e) Upon any sale made under or by virtue of this paragraph,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the Indebtedness the net sales
15
price after deducting therefrom the expenses of the sale and costs of the action
and any other sums which Mortgagee is authorized to deduct under this Mortgage.
(f) 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 Buffalo China shall affect in any manner or to any extent the lien
of this Mortgage upon the Mortgaged Property or any part thereof, or any liens,
rights, powers or remedies of Mortgagee hereunder, but such liens, rights,
powers and remedies of Mortgagee shall continue unimpaired as before.
(g) Mortgagee may terminate or rescind any proceeding or other
action brought in connection with its exercise of the remedies provided in this
paragraph at any time before the conclusion thereof, as determined in
Mortgagee's sole discretion and without prejudice to Mortgagee.
(h) Mortgagee and the Secured Parties may resort to any remedies
and the security given by the Notes, this Mortgage or the Transaction Documents
in whole or in part, and in such portions and in such order as determined by
their sole discretion. No such action shall in any way be considered a waiver of
any rights, benefits or remedies evidenced or provided by the Notes, this
Mortgage or any of the other Transaction Documents. The failure to exercise any
right, remedy or option provided in the Notes, this Mortgage or any of the other
Transaction Documents shall not be deemed a waiver of such right, remedy or
option or of any covenant or obligation secured by the Notes, this Mortgage or
the other Transaction Documents. No acceptance by Secured Parties of any payment
after the occurrence of any Event of Default and no payment by Mortgagee of any
obligation for which Buffalo China is liable hereunder shall be deemed to waive
or cure any Event of Default with respect to Buffalo China, or Buffalo China's
liability to pay such obligation. No sale of all or any portion of the Mortgaged
Property, no forbearance on the part of Mortgagee, and no extension of time for
the payment of the whole or any portion of the Indebtedness or any other
indulgence given by Mortgagee to Buffalo China, shall operate to release or in
any manner affect the interest of Mortgagee in the remaining Mortgaged Property
or the liability of Buffalo China to pay the Indebtedness. No waiver by
Mortgagee shall be effective unless it is in writing and then only to the extent
specifically stated. All costs and expenses of Mortgagee in exercising the
rights and remedies under this Paragraph 22 (including reasonable attorneys'
fees and disbursements to the extent permitted by law), shall be paid by Buffalo
China immediately upon notice from Mortgagee, with interest at the highest rate
provided in any of the Notes for the period after notice from Mortgagee, subject
to the limitations contained in the definition of Secured Indebtedness
hereinabove set forth, and such costs and expenses shall constitute a portion of
the Indebtedness and shall be secured by this Mortgage.
(i) The interests and rights of Mortgagee under this Mortgage or
in any of the other Transaction Documents shall not be impaired by any
indulgence, including (i) any renewal, extension or modification which any
Secured Party may grant with respect to any of the Indebtedness, (ii) any
surrender, compromise, release, renewal, extension, exchange or substitution
which Mortgagee may grant with respect to the Mortgaged Property or any portion
thereof; or (iii) any release or indulgence granted to any maker, endorser,
guarantor or surety of any of the Indebtedness.
(j) The rights and remedies herein afforded to Mortgagee and the
Secured Parties shall be cumulative and supplementary to and not exclusive of
any other rights and remedies afforded the Mortgagee and Secured Parties.
23. Right of Entry. In addition to any other rights or remedies granted
under this Mortgage, Mortgagee, and its agents, during the Term, shall have the
right to enter and inspect the Mortgaged Property during normal business hours.
The cost of such inspections or audits shall be borne by Buffalo China,
including the cost of all follow up or additional investigations or inquiries
deemed reasonably necessary by Mortgagee. The cost of such inspections, if not
paid for by Buffalo China following demand, shall bear interest thereafter until
paid at the highest rate set forth in any of the Notes.
24. Security Agreement.
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(a) This Mortgage is both a real property mortgage and a "security
agreement" within the meaning of the Uniform Commercial Code. The Mortgaged
Property includes both real and personal property and all other rights and
interests, whether tangible or intangible in nature, of Mortgagor in the
Mortgaged Property. Mortgagor, by executing and delivering this Mortgage, has
granted and hereby grants to Mortgagee, as security for the Indebtedness, a
security interest in the Mortgaged Property to the full extent that the
Mortgaged Property may be subject to the Uniform Commercial Code (said portion
of the Mortgaged Property so subject to the Uniform Commercial Code being called
in this paragraph the "Collateral"). This Mortgage shall also constitute a
"fixture filing" for the purposes of the Uniform Commercial Code. As such, this
Mortgage covers all items of the Collateral that are or are to become fixtures.
Information concerning the security interest herein granted may be obtained from
the parties at the addresses of the parties set forth in the first paragraph of
this Mortgage.
(b) If an Event of Default shall occur, Mortgagee, in addition to
any other rights and remedies which it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing, the right to take possession of the
Collateral or any part thereof, and to take such other measures as Mortgagee may
deem necessary for the care, protection and preservation of the Collateral. Upon
request or demand of Mortgagee, Buffalo China shall at its expense assemble the
Collateral and make it available to Mortgagee at a convenient place acceptable
to Mortgagee. Buffalo China shall pay to Mortgagee on demand any and all
expenses, including attorneys' fees and disbursements, incurred or paid by
Mortgagee in protecting the interest in the Collateral and in enforcing the
rights hereunder with respect to the Collateral. Any notice of sale, disposition
or other intended action by Mortgagee with respect to the Collateral sent to
Mortgagor in accordance with the provisions hereof at least ten (10) days prior
to such action, shall constitute commercially reasonable notice to Buffalo
China. The proceeds of any disposition of the Collateral, or any part thereof,
shall be applied by Mortgagee to the payment of the Indebtedness in such manner
as may be provided in the Collateral Agency Agreement. In the event of any
change in name, identity or structure of any Mortgagor, such Mortgagor shall
notify Mortgagee thereof and promptly after request shall file and record such
Uniform Commercial Code forms as are necessary to maintain the priority of
Mortgagee's lien upon and security interest in the Collateral, and Buffalo China
shall pay all expenses and fees in connection with the filing and recording
thereof. If Mortgagee shall require the filing or recording of additional
Uniform Commercial Code forms or continuation statements, Mortgagor shall, at
Buffalo China's expense, promptly after request, file and record such Uniform
Commercial Code forms or continuation statements as Mortgagee shall deem
necessary, and Buffalo China shall pay all expenses and fees in connection with
the filing and recording thereof. Mortgagor hereby irrevocably appoints
Mortgagee as its attorney-in-fact, coupled with an interest, to file with the
appropriate public office on its behalf any financing or other statements signed
only by Mortgagee, as secured party, in connection with the Collateral covered
by this Mortgage.
25. Waiver of Setoff and Counterclaim. All amounts due under this
Mortgage, the Notes and the other Transaction Documents shall be payable without
setoff, counterclaim or any deduction whatsoever. Mortgagor hereby waives the
right to assert a setoff, counterclaim (other than a mandatory or compulsory
counterclaim) or deduction in any action or proceeding in which Mortgagee is a
participant, or arising out of or in any way connected with this Mortgage, the
Notes, any of the other Transaction Documents or the Indebtedness.
26. Recovery of Sums Required to be Paid. The Secured Parties shall
have the right from time to time to take action to recover any sum or sums which
constitute a part of the Indebtedness as the same become due, without regard to
whether or not the balance of the Indebtedness shall be due, and without
prejudice to the right of Mortgagee thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Mortgagor
existing at the time such earlier action was commenced.
27. Marshalling and Other Matters. Mortgagor hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Mortgaged
Property or any part thereof or any interest therein. Further, Mortgagor hereby
expressly waives any and all rights of redemption from
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sale under any order or decree of foreclosure of this Mortgage on behalf of
Mortgagor, and on behalf of each and every person acquiring any interest in or
title to the Mortgaged Property subsequent to the date of this Mortgage and on
behalf of all persons to the extent permitted by applicable law.
28. Hazardous Substances. Buffalo China hereby represents and warrants
to Mortgagee that, to the best of Buffalo China's knowledge, after due inquiry
and investigation except as disclosed on Exhibit B annexed hereto: (a) the
Mortgaged Property is not in direct or indirect violation of any local, state,
federal or other governmental authority, statute, ordinance, code, order,
decree, law, rule or regulation pertaining to or imposing liability or standards
of conduct concerning environmental regulation, contamination or clean-up
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended ("CERCLA"), the Resource Conservation
and Recovery Act, as amended ("RCRA"), the Emergency Planning and Community
Right-to-Know Act of 1986, as amended, the Hazardous Substances Transportation
Act, as amended, the Solid Waste Disposal Act, as amended, the Clean Water Act,
as amended, the Clean Air Act, as amended, the Toxic Substance Control Act, as
amended, the Safe Drinking Water Act, as amended, the Occupational Safety and
Health Act, as amended, New York's Navigation Law, and any state super-lien and
environmental clean-up statutes and all rules and regulations adopted in respect
to the foregoing laws whether presently in force or coming into being and/or
effectiveness hereafter (collectively, "Environmental Laws"); (b) the Mortgaged
Property is not subject to any private or governmental lien or judicial or
administrative notice or action or inquiry, investigation or claim relating to
hazardous and/or toxic, dangerous and/or regulated, substances, wastes,
materials, raw materials which include hazardous constituents, pollutants or
contaminants including without limitation, petroleum, tremolite, anthlophylie,
actinolite or polychlorinated biphenyls and any other substances or materials
which are included under or regulated by Environmental Laws or which are
considered by scientific opinion to be otherwise dangerous in terms of the
health, safety and welfare of humans (collectively, "Hazardous Substances"); (c)
no Hazardous Substances are or have been (including the period prior to Buffalo
China's acquisition of the Mortgaged Property) discharged, generated, treated,
disposed of or stored on, incorporated in, or removed or transported from the
Mortgaged Property other than in compliance with all Environmental Laws and
other than releases of Hazardous Substances which have been remediated in
compliance with applicable Environmental Laws; (d) no Hazardous Substances are
present in, on or under any nearby real property which could migrate to or
otherwise affect the Mortgaged Property; and (e) no underground storage tanks
exist on any of the Mortgaged Property. So long as Buffalo China owns any
interest in or is in possession of the Mortgaged Property, Buffalo China (i)
shall keep or cause the Mortgaged Property to be kept free from Hazardous
Substances and in compliance with all Environmental Laws, (ii) shall promptly
notify Mortgagee if Buffalo China shall become aware of any Hazardous Substances
on or near the Mortgaged Property and/or if Buffalo China shall become aware
that the Mortgaged Property is in direct or indirect violation of any
Environmental Laws and/or if Buffalo China shall become aware of any condition
on or near the Mortgaged Property which shall pose a threat to the health,
safety or welfare of humans, and (iii) Buffalo China shall remove such Hazardous
Substances and/or cure such violations and/or remove such threats, as
applicable, as required by law (or as shall be required by Buffalo China in the
case of removal which is not required by law, but in response to the opinion of
a licensed hydrogeologist, licensed environmental engineer or other qualified
consultant engaged by Mortgagee ("Mortgagee's Consultant")), promptly after
Buffalo China becomes aware of same, at Buffalo China's sole expense.
Notwithstanding anything to the contrary in this paragraph, Buffalo China and/or
tenants on the Mortgaged Property may use and store immaterial amounts of
Hazardous Substances at the Mortgaged Property if such use or storage is in
connection with the ordinary cleaning and maintenance of the Mortgaged Property
so long as such use and storage does not violate any applicable Environmental
Laws. Nothing herein shall prevent Buffalo China from recovering such expenses
from any other party that may be liable for such removal or cure. The
obligations and liabilities of Buffalo China under this Paragraph 28 shall
survive any termination, satisfaction, or assignment of this Mortgage and the
exercise by Mortgagee of any of its rights or remedies hereunder, including,
without limitation, the acquisition of the Mortgaged Property by foreclosure or
a conveyance in lieu of foreclosure.
29. Asbestos. Buffalo China represents and warrants that, to the best
of Buffalo China's knowledge, after due inquiry and investigation, no asbestos
or any substance or material containing asbestos ("Asbestos") is located on the
Mortgaged Property except as may have been disclosed on Exhibit B. Buffalo China
shall not install in the Mortgaged Property, nor permit to be installed in the
Mortgaged Property, Asbestos and
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shall remove any Asbestos promptly upon discovery to the satisfaction of
Mortgagee, at Buffalo China's sole expense. Buffalo China shall in all instances
comply with, and ensure compliance by all occupants of the Mortgaged Property
with, all applicable federal, state and local laws, ordinances, rules and
regulations with respect to Asbestos, and shall keep the Mortgaged Property free
and clear of any liens imposed pursuant to such laws, ordinances, rules or
regulations. In the event that Buffalo China receives any notice or advice from
any governmental agency or any source whatsoever with respect to Asbestos on,
affecting or installed on the Mortgaged Property, Buffalo China shall
immediately notify Mortgagee. The obligations and liabilities of Buffalo China
under this Paragraph 29 shall survive any termination, satisfaction, or
assignment of this Mortgage and the exercise by Mortgagee of any of its rights
or remedies hereunder, including but not limited to, the acquisition of the
Mortgaged Property by foreclosure or a conveyance in lieu of foreclosure.
30. Environmental Monitoring. Buffalo China shall give prompt written
notices to Mortgagee of: (a) any proceeding or inquiry by any party with respect
to the presence of any Hazardous Substance or Asbestos on, under, from or about
the Mortgaged Property, (b) all claims made or threatened by any third party
against Buffalo China or the Mortgaged Property relating to any loss or injury
resulting from any Hazardous Substance or Asbestos, and (c) Buffalo China's
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Mortgaged Property that could cause the Mortgaged Property
to be subject to any investigation or cleanup pursuant to any Environmental Law.
Buffalo China shall permit Mortgagee to join and participate in, as a party if
it so elects, any legal proceedings or actions initiated with respect to the
Mortgaged Property in connection with any Environmental Law or Hazardous
Substance, and Buffalo China shall pay all attorneys' fees and disbursements
incurred by Mortgagee in connection therewith. Upon Mortgagee's request, at any
time after the occurrence of an Event of Default or at such other time Mortgagee
has determined (in the exercise of its good faith judgment) that reasonable
cause exists for the performance of an environmental inspection or audit of the
Mortgaged Property, Buffalo China shall provide at Buffalo China's sole expense,
(i) an inspection or audit of the Mortgaged Property prepared by a licensed
hydrogeologist or licensed environmental engineer approved by Mortgagee
indicating the presence or absence of Hazardous Substances on, in or near the
Mortgaged Property, and (ii) an inspection or audit of the Mortgaged Property
prepared by a duly qualified engineering or consulting firm approved by
Mortgagee, indicating the presence or absence of Asbestos on the Mortgaged
Property. If Buffalo China fails to provide such inspection or audit within
thirty (30) days after such request Mortgagee may order same, and Buffalo China
hereby grants to Mortgagee and its employees and agents access to the Mortgaged
Property and a license to undertake such inspection or audit. The cost of such
inspection or audit shall be paid by Buffalo China on demand and shall bear
interest thereafter until paid at the highest rate provided in any of the Notes.
In the event that any environmental site assessment report prepared in
connection with such inspection or audit recommends that an operations and
maintenance plan be implemented for Asbestos or any Hazardous Substance, Buffalo
China shall cause such operations and maintenance plan to be prepared and
implemented at Buffalo China's expense upon request of Mortgagee. In the event
that any investigation, site monitoring, containment cleanup, removal,
restoration, or other work of any kind is reasonably necessary or desirable
under an applicable Environmental Law (the "Remedial Work"), Buffalo China shall
commence and thereafter diligently prosecute to completion all such Remedial
Work within thirty (30) days after written demand by Mortgagee for performance
thereof (or any such shorter period of time as may be required under applicable
law.) All Remedial Work shall be performed by contractors approved in advance by
Mortgagee, and under the supervision of a consulting engineer approved by
Mortgagee. All costs and expenses of such Remedial Work shall be paid by Buffalo
China including, without limitation, Mortgagee's reasonable attorneys' fees and
disbursements incurred in connection with monitoring or review of such Remedial
Work. In the event Buffalo China shall fail to timely commence, or cause to be
commenced, or fail to diligently prosecute to completion, such Remedial Work,
Mortgagee may, but shall not be required to, cause such Remedial Work to be
performed, and all costs and expenses thereof, or incurred in connection
therewith, shall be paid by Buffalo China on demand and shall bear interest
thereafter until paid at the highest rate provided in any of the Notes.
31. Indemnification. In addition to any other indemnifications provided
herein or in the other Transaction Documents, Buffalo China shall protect,
defend, indemnify and save harmless Mortgagee from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including, without limitation, reasonable attorneys'
fees and disbursements), imposed upon or
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incurred by or asserted against Mortgagee by reason of (a) this Mortgage, the
Mortgaged Property or any interest therein or receipt of any Rents; (b) any
accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Mortgaged Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (c) any use, nonuse or condition in, on or about the Mortgaged Property
or any part thereof or on adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (d) any failure on the part of Buffalo
China to perform or comply with any of the terms of this Mortgage; (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Mortgaged Property or any part thereof; (f) the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release, or threatened release of any Hazardous Substance or Asbestos on, from,
or affecting the Mortgaged Property; (g) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to such
Hazardous Substance or Asbestos; (h) any claim brought or threatened, settlement
reached, or government order relating to such Hazardous Substance or Asbestos;
(i) any violation of the Environmental Laws, which are based upon or in any way
related to such Hazardous Substance or Asbestos including, without limitation,
the costs and expenses of any Remedial Work, attorney and consultant fees and
disbursements, investigation and laboratory fees, court costs, and litigation
expenses; and (j) any representation or warranty made in the Notes, this
Mortgage or any of the other Transaction Documents being false or misleading in
any material respect as of the date such representation or warranty was made.
Subject to the limitations contained in the definition of Secured Indebtedness
hereinabove set forth, any amounts payable to Mortgagee by reason of the
application of this paragraph shall be secured by this Mortgage and shall become
immediately due and payable and shall bear interest at the highest rate provided
in any of the Notes from the date loss or damage is sustained by Mortgagee until
paid. The obligations and liabilities of Buffalo China under this Paragraph 31
shall survive and termination, satisfaction, or assignment of this Mortgage and
the exercise by Mortgagee of any of its rights or remedies hereunder, including,
but not limited to, the acquisition of the Mortgaged Property by foreclosure or
a conveyance in lieu of foreclosure.
A waiver of subrogation shall be obtained by Buffalo China from its
insurance carrier and, consequently, Buffalo China waives any and all right to
claim or recover against Mortgagee, its officers, employees, agents and
representatives, for loss of or damage to Buffalo China, the Mortgaged Property,
Buffalo China's property or the property of others under Buffalo China's control
from any cause insured against or required to be insured against by the
provisions of this Mortgage.
32. Notices. Any notice, report, demand or other instrument authorized
or required to be given or furnished ("Notices") shall be in writing and shall
be given as follows: (a) by hand delivery; (b) by deposit in the United States
mail as first class certified mail, return receipt requested, postage paid; (c)
by overnight nationwide commercial courier service; or (d) by telecopy
transmission (other than for notices of default) with a confirmation copy to be
delivered by duplicate notice in accordance with any of clauses (a)- (c) above,
in each case, addressed to the party intended to receive the same at the
following address(es):
Mortgagee: JPMorgan Chase Bank
Bridgewater Place
500 Plum Street
Syracuse, New York 13204
Attn: Joseph H. Oddo, Jr.
Telecopy No.: (315) 424-1898
Agency: Erie County Industrial Development Agency
275 Oak Street
Buffalo, New York 14203
Attn: Executive Director
Telecopy No.: (716) 856-6754
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With a copy to: Hurwitz & Fine, P.C.
1300 Liberty Building
Buffalo, New York 14202
Attn: Robert P. Fine, Esq.
Telecopy No.: (716) 855-0874
Buffalo China: Buffalo China, Inc.
c/o Oneida Ltd.
163-181 Kenwood Avenue
Oneida, New York 13241
Attn: Gregg R. Denny, Chief Financial Officer
Telecopy No.: (315) 361-3700
with a copy to: Oneida Ltd.
Legal Department
163-181 Kenwood Avenue
Oneida, New York 13421
Attn: Gregg R. Denny, Chief Financial Officer
Telecopy No.: (315) 361-3700
Any party may change the address to which any such Notice is to be
delivered, by furnishing ten (10) days written notice of such change to the
other parties in accordance with the provisions of this Paragraph 32. Notices
shall be deemed to have been given on the date they are actually received;
provided, that the inability to deliver Notices because of a changed address of
which no Notice was given, or rejection or refusal to accept any Notice offered
for delivery shall be deemed to be receipt of the Notice as of the date of such
inability to deliver or rejection or refusal to accept delivery. Notice for
either party may be given by its respective counsel.
33. Waiver of Notice. Mortgagor shall not be entitled to any notices of
any nature whatsoever from Mortgagee except with respect to matters for which
this Mortgage specifically and expressly provides for the giving of notice by
Mortgagee to Mortgagor and except with respect to matters for which Mortgagee is
required by applicable law to give notice, and Mortgagor hereby expressly waives
the right to receive any notice from Mortgagee with respect to any matter for
which this Mortgage does not specifically and expressly provide for the giving
of notice by Mortgagee to Mortgagor.
34. Sole Discretion of Mortgagee. Wherever pursuant to this Mortgage,
Mortgagee exercises any right given to it to consent or not consent or approve
or disapprove, or any arrangement or term is to be satisfactory to Mortgagee,
the decision of Mortgagee to consent or not consent, to approve or disapprove or
to decide that arrangements or terms are satisfactory or not satisfactory shall
be in the sole discretion of Mortgagee (subject to obtaining the consent of the
Secured Parties if required by the terms of the Collateral Agent Agreement or
any of the Transaction Documents) and shall be final and conclusive, except
as may be otherwise expressly and specifically provided herein.
35. Non-Waiver. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) the failure of Mortgagee or Secured Parties to comply
with any request of Mortgagor to take any action to foreclose this Mortgage or
otherwise enforce any of the provisions hereof or of the Notes, or the other
Transaction Documents, (b) the release, regardless of consideration, of the
whole or any part of the Mortgaged Property, or of any person liable for the
Indebtedness or any portion thereof, or (c) any agreement or stipulation by
Mortgagee or Secured Parties extending the time of payment or otherwise
modifying or supplementing the terms of the Notes, this Mortgage or any of the
other Transaction Documents. Mortgagee and the Secured Parties may resort for
the payment of the Indebtedness to any other security held by them in such order
and manner as they, in their sole discretion, may elect. Mortgagee and the
Secured Parties may take action to recover the Indebtedness, or any portion
thereof, or to enforce any covenant hereof without prejudice to the right of
21
Mortgagee thereafter to foreclosure this Mortgage. The rights and remedies of
Mortgagee under this Mortgage shall be separate, distinct and cumulative and
none shall be given effect to the exclusion of the others. No act of Mortgagee
or the Secured Parties shall be construed as an election to proceed under any
one provision herein to the exclusion of any other provision. Mortgagee and the
Secured Parties shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or hereafter
afforded at law or in equity.
36. No Oral Change. This Mortgage, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Mortgagor or Mortgagee, but only
by an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
37. Liability. Subject to the provisions contained in Paragraph 55 of
this Mortgage, if Mortgagor consists of more than one person, the obligations
and liabilities of each such person hereunder shall be joint and several.
Subject to the provisions hereof requiring Mortgagee's consent to any transfer
of the Mortgaged Property, this Mortgage shall be binding upon and inure to the
benefit of Mortgagor and Mortgagee and their respective successors and assigns
forever.
38. Inapplicable Provisions. If any term, covenant or condition of this
Mortgage is held to be invalid, illegal or unenforceable in any respect, this
Mortgage shall be construed without such provision.
39. Headings, Etc. The headings and captions of various paragraphs of
this Mortgage are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.
40. Definitions. Unless the context clearly indicates a contrary intent
or unless otherwise specifically provided herein, words used in this Mortgage
may be used interchangeably in singular or plural form and the word "Mortgagor"
shall mean "each Mortgagor and any subsequent owner or owners of the Mortgaged
Property or any part thereof or any interest therein," the word "Mortgagee"
shall mean "Mortgagee and any subsequent Collateral Agent under the Collateral
Agent Agreement," the word "Notes" shall mean "any of the Notes and any other
evidence of indebtedness secured by this Mortgage," the word "person" shall
include an individual, corporation, partnership, trust, unincorporated
association, government, governmental authority, and any other entity, and the
words "Mortgaged Property" shall include any portion of the Mortgaged Property
and any interest therein and the words "attorneys' fees" shall include any and
all attorneys' fees, paralegal and law clerk fees, including, without
limitation, fees at the pre-trial, trial and appellate levels incurred or paid
by Mortgagee in protecting its interest in the Mortgaged Property and Collateral
and enforcing its rights hereunder. 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.
41. Actions and Proceedings. If any action or proceeding be commenced
to which action or proceeding Mortgagee is made a party and in which it becomes
necessary in the opinion of Mortgagee to defend or uphold the lien of this
Mortgage, all sums paid by Mortgagee for the expense of any litigation to
prosecute and defend the rights and lien created by this Mortgage, including
reasonable counsel fees, costs and allowances, shall, together with interest
thereon be a lien on the Mortgaged Property and, subject to the limitations
contained in the definition of Secured Indebtedness hereinabove set forth,
secured by this Mortgage and shall be collectible in like manner as said
indebtedness and shall be paid by Buffalo China upon receipt of an invoice from
Mortgagee.
42. Leases of the Mortgaged Property. Mortgagor will not enter into any
lease(s) for all or any portion of the Mortgaged Property other than the Agency
Lease Agreement without the prior written consent of Mortgagee.
22
43. Real Property Law. All covenants hereof, which are in addition to
those set forth in Sections 254 and 291-f of the Real Property Law, shall be
construed as affording to Mortgagee rights additional to, and not exclusive of,
the rights conferred under the provisions of said Sections 254 and 291-f.
44. Successors. All of the provisions of this Mortgage shall inure to
the benefit of Mortgagee and of any subsequent holder of this Mortgage and shall
be binding upon Mortgagor and each subsequent owner of the Mortgaged Property.
45. Effect of Releases. Mortgagee and the Secured Parties, without
notice, may release any part of the security described herein, or any person or
entity liable for any Indebtedness without in any way affecting the lien hereof
upon any part of the security not expressly released, and may agree with any
party obligated on said Indebtedness or having any interest in the security
described herein to extend the time for payment of any part or all of the
Indebtedness. Such agreement shall not in any way release or impair the lien
hereof, but shall extend the lien hereof as against the title of all parties
having any interest in said security, which interest is subject to said lien,
and no such release or agreement shall release any person or entity obligated to
pay any Indebtedness.
46. Mortgagee Not Obligated. Nothing herein contained shall be
construed as making the payment of any insurance premiums, taxes or assessments
obligatory upon Mortgagee, although Mortgagee may pay same, or as making
Mortgagee liable in any way for loss, damage or injury, resulting from the
non-payment of any such insurance premiums, taxes or assessments.
47. Lien Law. Buffalo China will, in compliance with Section 13 of the
Lien Law, receive the advances secured by this Mortgage and will hold the right
to receive such advances as a trust fund to be applied first for the purpose of
paying the cost of the improvement and will apply the same first to the payment
of the cost of the improvement before using any part of the total of the same
for any other purpose.
48. Costs, Expenses and Attorney's Fees. Should one or more Events of
Default occur hereunder, and should an action be commenced for the foreclosure
of this Mortgage, Mortgagee shall be entitled to recover all sums due hereunder,
statutory costs, and any additional allowances made pursuant to Section 8303(a)
of the Civil Practice Law and Rules of the State of New York, and in addition
thereto, reasonable attorneys' fees in such proceeding and in all proceedings
related thereto necessary to and related to the foreclosing proceeding, and such
amount shall be paid by Buffalo China on demand and shall be a lien on the
Mortgaged Property prior to any right or title to, interest in or claim upon the
Mortgaged Property attaching and accruing subsequent to the lien of this
Mortgage, and shall be deemed to be secured by this Mortgage and the
indebtedness which it secures.
49. Entire Agreement. This Mortgage constitutes the entire
understanding between Mortgagor and Mortgagee relative to the granting of a
mortgage lien on the Mortgaged Property and supersedes any prior writings or
oral statements or conversations at any time made or had with respect thereto.
50. Governing Law: Severability. This Mortgage shall be governed by the
law of the jurisdiction in which the Mortgaged Property is located. In the event
that any provision or clause of this Mortgage conflicts with applicable law,
such conflict shall not affect other provisions of this Mortgage which can be
given effect without the conflicting provision, and to this end, the provisions
of this Mortgage are declared to be severable.
51. Time of the Essence. Time is of the essence with respect to each
and every covenant, agreement and obligation of Mortgagor under this Mortgage.
52. WAIVER OF JURY TRIAL. MORTGAGOR AND MORTGAGEE HEREBY WAIVE TRIAL BY
JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR
ARISING OUT OF THIS MORTGAGE OR THE VALIDITY, PROTECTION, INTERPRETATION,
COLLECTION OR ENFORCEMENT HEREOF, OR THE RELATIONSHIP
23
BETWEEN MORTGAGOR AND MORTGAGEE OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING
BETWEEN MORTGAGOR AND MORTGAGEE ARISING UNDER THIS MORTGAGE.
53. Tax Law Section 253 Statement. This Mortgage does not cover real
property principally improved or to be improved by one or more structures
containing in the aggregate not more than six residential dwelling units, each
having their own separate cooking facilities.
54. Execution of Counterparts. This Agreement may be executed in one or
more counterparts, any one or all of which shall constitute but one agreement.
55. No Recourse; Special Obligation.
(a) The obligations and agreements of the Agency contained herein
and any other instrument or document executed in connection therewith or
herewith, and any other instrument or document supplemental thereto or hereto,
shall be deemed the obligations and agreements of the Agency, and not of any
member, officer, director, agent (other than Buffalo China) or employee of the
Agency in his individual capacity, and the members, officers, directors, agents
(other than Buffalo China) and employees of the Agency shall not be liable
personally hereon 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.
(b) The obligations and agreements of the Agency contained herein
and therein shall not constitute or give rise to an obligation of the State of
New York or Erie County, New York, and neither the State of New York nor Erie
County, New York shall be liable hereon or thereon, and, further, such
obligations and agreements shall not constitute or give rise to a general
obligation of the Agency, and Mortgagee shall have no recourse to the Agency
other than the Agency's interests in the Mortgaged Property, including, but not
limited to, the revenues derived and to be derived from the sale or other
disposition of the Real Property. This Mortgage is specifically subordinate to
the exercise by the Agency of the following rights (the "Agency's Reserved
Rights") under the Agency Lease Agreement: The right to (a) receive in its own
behalf all opinions of counsel, reports, statements, certificates, insurance
policies or binders or certificates, or other communications required to be
delivered by Buffalo China to the Agency; (b) grant or withhold any consents or
approvals required of the Agency; (c) to enforce or otherwise exercise in its
own behalf all agreements of Buffalo China with respect to ensuring that the
Mortgaged Property shall always constitute a qualified "project" as defined in
and as contemplated by the Act (as that term is defined in the Agency Lease
Agreement); (d) to amend with Buffalo China the provisions of the PILOT (as that
term is defined in the Agency Lease Agreement); (e) to enforce in its own behalf
(or on behalf of the appropriate taxing authorities) the provisions of, and
receive amounts payable under the PILOT and Article XIII of the Agency Lease
Agreement; (f) to be indemnified pursuant to Article XVIII of the Agency Lease
Agreement; (g) to terminate the Agency Lease Agreement in accordance with its
terms; and (h) to reconvey the Mortgaged Property to Borrower in accordance with
the terms of the Agency Lease Agreement. The Agency's Reserved Rights are not
pledged to the Mortgagee hereunder and are reserved to the Agency and the
contractual obligations of Buffalo China with respect to the Agency's Reserved
Rights shall survive a foreclosure of this Mortgage.
(c) No order or decree of specific performance with respect to any
of the obligations of the Agency hereunder shall be sought or enforced against
the Agency unless (1) the party seeking such order or decree shall first have
requested the Agency in writing to take the action sought in such order or
decree of specific performance, and thirty (30) days shall have elapsed from the
date of receipt of such request, and the Agency shall have refused to comply
with such request (or, if compliance therewith would reasonably be expected to
take longer than thirty (30) days, shall have failed to institute and diligently
pursue action to cause compliance with such request within such ten day period)
or failed to respond within such notice period, (2) if the Agency refuses to
comply with such request and the Agency'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 Agency an amount
or undertaking sufficient to cover such reasonable fees and expenses, and (3) if
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the Agency refuses to comply with such request and the Agency's refusal to
comply is based on its reasonable expectation that it or any of its members,
officers, agents (other than Buffalo China) or employees shall be subject to
potential liability, the party seeking such order or decree shall (a) agree to
indemnify, defend and hold harmless the Agency and its members, officers,
directors, agents (other than Buffalo China) and employees against any liability
incurred as a result of its compliance with such demand, and (b) if requested by
the Agency, furnish to the Agency satisfactory security to protect the Agency
and its members, officers, directors, agents (other than Buffalo China) and
employees against all liability expected to be incurred as a result of
compliance with such request. Any failure to provide the indemnity and/or
security required in this Section 55(C) shall not affect the full force and
effect of an Event of Default hereunder.
56. New York State Specific Provisions.
(a) Inconsistencies. In the event of any inconsistencies between
the terms and conditions of this Section 56 and the other provisions of this
Mortgage, the terms and conditions of this Section 56 shall control and be
binding.
(b) Insurance. The provisions of subsection 4 of Section 254 of
the New York Real Property Law covering the insurance of buildings against loss
by fire shall not apply to this Mortgage. In the event of any conflict,
inconsistency or ambiguity between the provisions of this Mortgage and the
provisions of subsection 4 of Section 254 of the New York Real Property Law
covering the insurance of buildings against loss by fire, the provisions of this
Mortgage shall control.
(c) Leases. Mortgagee shall have all of the rights against lessees
of the Mortgaged Property set forth in Section 291-f of the Real Property Law of
New York.
(d) Statutory Construction. The clauses and covenants contained in
this Mortgage that are construed by Section 254 of the New York Real Property
Law shall be construed as provided in those sections (except as provided in
Section 56(b)). The additional clauses and covenants contained in this Mortgage
shall afford rights supplemental to and not exclusive of the rights conferred by
the clauses and covenants construed by Section 254 and shall not impair, modify,
alter or defeat such rights (except as provided in Section 56(b)),
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 Section 254. The
rights of Mortgagee arising under the 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 or any of the Lenders 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. In the event of any inconsistencies between the provisions of
Section 254 and the provisions of this Mortgage, the provisions of this Mortgage
shall prevail.
(e) Power of Sale. Upon the occurrence of an Event of Default,
Mortgagee shall have the right to sell the Mortgaged Property, including,
without limitation, by exercise of any and all rights and remedies available
under Article 14 of the New York Real Property Actions and Proceedings Law (the
"RPAPL"). Any deed or deeds executed and delivered in connection with the sale
or sales of the Mortgaged Property pursuant to Article 14 of the RPAPL shall be
in the form provided in Article 14 of the RPAPL.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, this Mortgage has been duly executed as of the 23rd day of
April, 2002.
BUFFALO CHINA, INC.
By: /s/ GREGG R. DENNY
------------------
Gregg R. Denny
Vice President - Finance
ERIE COUNTY INDUSTRIAL DEVELOPMENT AGENCY
By: /s/ DAVID W. KERCHOFF
---------------------
David W. Kerchoff
Assistant Treasurer
STATE OF NEW YORK )
) SS.:
COUNTY OF MADISON )
On the 22nd day of April, in the year 2002, before me, the undersigned,
a notary public in and for said state, personally appeared Gregg R. Denny,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual or the person upon behalf of which
the individual acted, executed the instrument.
/s/ JOSEPH ZAGRANICZNY
-----------------------
Notary Public
STATE OF NEW YORK )
) SS.:
COUNTY OF ERIE )
On the _____ day of April, in the year 2002, before me, the
undersigned, a notary public in and for said state, personally appeared David W.
Kerchoff, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual or the person upon behalf of
which the individual acted, executed the instrument.
------------------------------------
Notary Public
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