EXHIBIT 10.10
This Mortgage was prepared by, This document is intended
and when recorded should be returned to: to be recorded in
Cherokee County, South Carolina
Jeffrey J. Temple, Esq.
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
(212) 819-8729
1107993-0083
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS AND PROFITS, FINANCING
STATEMENT AND FIXTURE FILING
made by
R. J. REYNOLDS TOBACCO COMPANY,
as the Mortgagor,
to
JPMorgan Chase Bank,
as Administrative Agent and Collateral Agent for Various Lending Institutions,
as the Mortgagee
THIS MORTGAGE CONSTITUTES A FIXTURE FINANCING STATEMENT FILING PURSUANT TO
SECTION 36-9-402 OF THE SOUTH CAROLINA CODE OF LAWS
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS AND PROFITS, FINANCING
STATEMENT AND FIXTURE FILING
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS
AND PROFITS, FINANCING STATEMENT AND FIXTURE FILING dated as of July 30, 2004
(as amended, modified or supplemented from time to time, this "Mortgage") made
by R. J. Reynolds Tobacco Company, a North Carolina Corporation (the
"Mortgagor"), having an address at 401 North Main Street, Winston-Salem, North
Carolina 27102 as the Mortgagor to JPMorgan Chase Bank, (together with any
successor Mortgagee, the "Mortgagee"), having an address at 270 Park Avenue, New
York, NY 10017, as Administrative Agent and Collateral Agent for the benefit of
the Secured Creditors (as defined below).
All capitalized terms used but not otherwise defined herein
shall have the same meanings ascribed to such terms in the Credit Agreement
described below.
WITNESSETH:
WHEREAS, Reynolds American Inc. (the "Parent"). R.J. Reynolds
Tobacco Holdings, Inc. (the "Borrower"), the various lending institutions from
time to time party thereto (the "Lenders") and the Mortgagee, as Administrative
Agent, have entered into a Credit Agreement, dated as of May 7, 1999, as amended
and restated as of November 17, 2000, as further amended and restated as of May
10, 2002, and further amended and restated as of July 30, 2004, providing for
the making of Loans to the Borrower and the issuance of, and participation in,
Letters of Credit for the account of the Borrower, in the aggregate principal
amount of up to $486,250,000, all as contemplated therein (with the Lenders,
each Letter of Credit Issuer, the Administrative Agent, the Senior Managing
Agents, and the Collateral Agent being herein collectively called the "Lender
Creditors")(as the same may be further amended, modified, extended, renewed,
replaced, restated, supplemented and/or refinanced from time to time, and
including any agreement extending the maturity of, or refinancing or
restructuring (including, but not limited to, the inclusion of additional
borrowers or guarantors thereunder or any increase in the amount borrowed) all
or any portion of, the indebtedness under such agreement or any successor
agreement, whether or not with the same agent, trustee, representative, lender
or holders, the "Credit Agreement"; provided that, with respect to any agreement
providing for the refinancing or replacement of indebtedness under the Credit
Agreement, such agreement shall only be treated as, or as part of, the Credit
Agreement hereunder if (x) either (A) all obligations under the Credit Agreement
being refinanced or replaced shall be paid in full at the time of such
refinancing or replacement, and all commitments and letters of credit issued
pursuant to the refinanced or replaced Credit Agreement shall have terminated in
accordance with their terms or (B) the Required Lenders shall have consented in
writing to the refinancing or replacement indebtedness being treated as
indebtedness pursuant to the Credit Agreement, and (y) a notice to the effect
that the refinancing or replacement indebtedness shall be treated as issued
under the Credit Agreement shall be delivered by the Borrower to the Collateral
Agent);
WHEREAS, the Parent and/or one or more of its Subsidiaries has
from time to time entered into, and/or may in the future from time to time enter
into, one or more (i) interest
rate protection agreements (including, without limitation, interest rate swaps,
caps, floors, collars and similar agreements), (ii) foreign exchange contracts,
currency swap agreements, commodity agreements or other similar agreements or
arrangements designed to protect against the fluctuations in currency values
and/or (iii) other types of hedging agreements from time to time (each such
agreement or arrangement with a Hedging Creditor (as hereinafter defined),
together with the Existing Interest Rate Swap Agreement, a "Secured Hedging
Agreement"), with any Lender or any affiliate thereof or a syndicate of
financial institutions organized by a Lender or an affiliate of a Lender (even
if any such Lender ceases to be a Lender under the Credit Agreement for any
reason) (any such Lender, affiliate or other financial institution that
participates therein, together with Calyon (as counterparty to the Existing
Interest Rate swap Agreement), and in each case their subsequent successors and
assigns collectively, the "Hedging Creditors", and together with the Lender
Creditors, the "Lender Secured Creditors");
WHEREAS, the Borrower and the trustee thereunder (the
"Existing Senior Notes Trustee"), on behalf of the holders of the Existing
Senior Notes (such holders, together with the Existing Senior Notes Trustee, the
"Existing Senior Notes Creditors"), have from time to time entered into, and may
in the future from time to time enter into, one or more Indentures
(collectively, as amended, modified or supplemented from time to time, the
"Existing Senior Notes Indenture" and, together with the Existing Senior Notes,
the "Existing Senior Notes Documents") providing for the issuance of Existing
Senior Notes by the Borrower in the original principal amount of $700,000,000;
WHEREAS, the Borrower and the trustee or trustees thereunder
(collectively, the "Refinancing Senior Notes Trustee"), on behalf of the holders
of the Refinancing Senior Notes (such holders, together with the Refinancing
Senior Notes Trustee, the "Refinancing Senior Notes Creditors", and together
with the Lender Secured Creditors and the Existing Senior Notes Creditors, the
"Secured Creditors"), may from time to time enter into one or more Indentures
(collectively, as amended, modified or supplemented from time to time, the
"Refinancing Senior Notes Indenture" and, together with the Refinancing Senior
Notes, the "Refinancing Senior Notes Documents") providing for the issuance of
Refinancing Senior Notes by the Borrower, in the original principal amount of
$750,000,000;
WHEREAS, pursuant to the Subsidiary Guaranty, the Mortgagor
has (together with the other Subsidiaries of the Borrower party thereto) jointly
and severally guaranteed to the Lender Secured Creditors the payment when due of
the Guaranteed Obligations (as and to the extent defined in the Subsidiary
Guaranty);
WHEREAS, the Mortgagor has guaranteed to the Existing Senior
Notes Creditors the payment when due of principal, premium (if any) and interest
on the Existing Senior Notes;
WHEREAS, the Mortgagor has guaranteed to the Refinancing
Senior Notes Creditors the payment when due of principal, premium (if any) and
interest on the Refinancing Senior Notes;
WHEREAS, the Mortgagor is owner of the fee simple title to the
Property (as hereinafter defined), subject to Permitted Liens;
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WHEREAS, the Credit Agreement requires this Mortgage be
executed and delivered to the Mortgagee by the Mortgagor and the Secured Hedging
Agreements, the Existing Senior Notes Indenture and the Refinancing Senior Notes
Indenture, require that this Mortgage secure the respective Obligations as
provided herein; and
WHEREAS, the Mortgagor desires to enter into this Mortgage to
satisfy the condition in the preceding paragraph and to secure (and this
Mortgage shall secure) the following:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities of the
Mortgagor, now existing or hereafter incurred under, arising out of or
in connection with any Credit Document to which the Mortgagor is a
party (including, without limitation, indemnities, fees and interest
(including all interest that accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy,
insolvency, reorganization or similar proceeding of the Borrower or any
other Credit Party at the rate provided for in the respective
documentation, whether or not a claim for post-petition interest is
allowed in any such proceeding)), as described in Schedule I hereto and
the due performance of and compliance by the Mortgagor with the terms
of each such Credit Document (all such obligations and liabilities
under this clause (i), except to the extent consisting of obligations
or liabilities with respect to Secured Hedging Agreements, being herein
collectively called the "Credit Document Obligations");
(ii) in accordance with Section 29-3-50 of the South
Carolina Code of Laws (1976), as amended, all future advances and
re-advances that may subsequently be made to the Mortgagor under the
Credit Agreement and evidenced by the Notes, Loans, commitments or
other notes or instruments, and all modifications, renewals, or
extensions thereof, the maximum amount of all Credit Document
Obligations outstanding at one time secured by this Mortgage not to
exceed $486,250,000, plus interest thereon, attorneys' fees and court
costs;
(iii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities of the
Mortgagor, now existing or hereafter incurred under, arising out of or
in connection with any Secured Hedging Agreement (including, all
obligations, if any, of the Mortgagor under the Subsidiary Guaranty in
respect of Secured Hedging Agreements), and all interest that accrues
after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganization or similar proceeding of
the Borrower or any other Credit Party at the rate provided for in the
respective documentation, whether or not a claim for post-petition
interest is allowed in any such proceeding, and the due performance and
compliance by the Mortgagor with all of the terms, conditions and
agreements contained therein (all such obligations and liabilities
under this clause (ii) being herein collectively called the "Hedging
Obligations");
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(iv) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities of the
Mortgagor owing to the Existing Senior Notes Creditors (including,
without limitation, indemnities, fees and interest (including all
interest that accrues after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency, reorganization or
similar proceeding of the Borrower or any other Credit Party at the
rate provided for in the respective documentation, whether or not a
claim for post-petition interest is allowed in any such proceeding)),
now existing or hereafter incurred under, arising out of or in
connection with any Existing Senior Notes Document, including, all
obligations, if any, of the Mortgagor under any guaranty in respect of
the Existing Senior Notes and the due performance and compliance by the
Mortagor with the terms of each such Existing Senior Notes Document
(all such obligations and liabilities under this clause (iii) being
herein collectively called the "Existing Senior Notes Obligations");
(v) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations
(including obligations which, but for the automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities of the
Mortgagor owing to the Refinancing Senior Notes Creditors (including,
without limitation, indemnities, fees and interest (including all
interest that accrues after the commencement of any case, proceeding or
other action relating to the bankruptcy, insolvency, reorganization or
similar proceeding of the Borrower or any other Credit Party at the
rate provided for in the respective documentation, whether or not a
claim for post-petition interest is allowed in any such proceeding)),
now existing or hereafter incurred under, arising out of or in
connection with any Refinancing Senior Notes Document, including, all
obligations, if any, of the Mortgagor under a guaranty in respect of
the Refinancing Senior Notes and the due performance and compliance by
the Mortgagor with the terms of each such Refinancing Senior Notes
Document (all such obligations and liabilities under this clause (iv)
being herein collectively called the "Refinancing Senior Notes
Obligations");
(vi) any and all sums advanced by the Mortgagee in order
to preserve or protect its lien and security interest in the Property;
(vii) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of the
Mortgagor and/or the Borrower referred to above after an Event of
Default (as hereinafter defined) shall have occurred and be continuing,
all expenses of re-taking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Property, or of
any exercise by the Mortgagee of its rights hereunder, together with
reasonable attorneys' fees and disbursements (as set forth in Section
4.09 hereof) and court costs;
(viii) any and all other indebtedness now owing or which may
hereafter be owing by the Mortgagor to the Mortgagee, however and
whenever incurred or evidenced, whether express or implied, direct or
indirect, absolute or contingent, or due or to become due; and
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(ix) any and all renewals, extensions and modifications of
any of the obligations and liabilities referred to in clauses (i)
through (vii) above;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (viii) above being herein collectively called the "Obligations",
provided that notwithstanding the foregoing, (i) the Existing Senior Notes
Obligations shall be excluded from the Obligations to the extent the Existing
Senior Notes Documents do not require the Existing Senior Notes Obligations to
be secured pursuant to this Mortgage, and (ii) the Refinancing Senior Notes
Obligations shall be excluded from the Obligations to the extent the Refinancing
Senior Notes Documents do not require the Refinancing Senior Notes Obligations
to be secured pursuant to this Mortgage. The maximum amount of all Obligations
outstanding at one time secured by this Mortgage shall not exceed
$1,936,250,000, plus interest thereon, attorneys' fees and court costs. The
stated last maturity date of the Obligations, if not sooner paid or hereafter
extended, is no later than February 13, 2006 (or, if the Existing Senior Notes
due on May 15, 2006 have been refinanced in full with the proceeds of a new
issuance or issuances of Refinancing Senior Notes in an aggregate principal
amount equal to at least the aggregate principal amount of such Existing Senior
Notes so refinanced on or prior to February 13, 2006, January 30, 2007), as such
date may be extended for such Lender pursuant to Section 1.13 of the Credit
Agreement.
NOW, THEREFORE, as security for the Obligations and in
consideration of the sum of ten dollars ($10.00) and the other benefits accruing
to the Mortgagor, the receipt and sufficiency of which are hereby acknowledged,
THE MORTGAGOR HEREBY MORTGAGES, GIVES, GRANTS, BARGAINS, SELLS, ASSIGNS,
TRANSFERS, CONVEYS AND CONFIRMS TO THE MORTGAGEE AND ITS SUCCESSORS AND ASSIGNS
FOREVER FOR THE BENEFIT OF THE SECURED CREDITORS, TOGETHER WITH POWER OF SALE
(subject to applicable law) all of the Mortgagor's estate, right, title and
interest, whether now owned or hereafter acquired, whether as lessor or lessee
and whether vested or contingent, in and to all of the following:
A. The land described in Exhibit A hereto, together with
all rights, privileges, franchises and powers related thereto which are
appurtenant to said land or its ownership, including all minerals, oil and gas
and other hydrocarbon substances thereon or therein; waters, water courses,
water stock, water rights (whether riparian, appropriative, or otherwise, and
whether or not appurtenant), sewer rights, shrubs, crops, trees, timber and
other emblements now or hereafter on, under or above the same or any part or
parcel thereof (the "Land");
B. All buildings, structures, tenant improvements and
other improvements of every kind and description now or hereafter located in or
on the Land, including, but not limited to all machine shops, structures,
improvements, rail spurs, dams, reservoirs, water, sanitary and storm sewers,
drainage, electricity, steam, gas, telephone and other utility facilities,
parking areas, roads, driveways, walks and other site improvements of every kind
and description now or hereafter erected or placed on the Land; and all
additions and betterments thereto and all renewals, alterations, substitutions
and replacements thereof (collectively, the "Improvements");
C. All fixtures, attachments, appliances, equipment,
machinery, building materials and supplies, and other tangible personal
property, now or hereafter attached to said Improvements or now or at any time
hereafter located on the Land and/or Improvements includ-
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ing, but not limited to, artwork, decorations, draperies, furnaces, boilers, oil
burners, piping, plumbing, refrigeration, air conditioning, lighting,
ventilation, disposal and sprinkler systems, elevators, motors, dynamos and all
other equipment and machinery, appliances, fittings and fixtures of every kind
located in or used in the operation of the Improvements, together with any and
all replacements or substitutions thereof and additions thereto, including the
proceeds of any sale or transfer of the foregoing (hereinafter sometimes
collectively referred to as the "Equipment");
D. All surface rights, appurtenant rights and easements,
rights of way, and other rights appurtenant to the use and enjoyment of or used
in connection with the Land and/or the Improvements;
E. All streets, roads and public places (whether open or
proposed) now or hereafter adjoining or otherwise providing access to the Land,
the land lying in the bed of such streets, roads and public places, and all
other sidewalks, alleys, ways, passages, vaults, water courses, strips and gores
of land now or hereafter adjoining or used or intended to be used in connection
with all or any part of the Land and/or the Improvements;
F. Any leases, lease guaranties and any other
agreements, relating to the use and occupancy of the Land and/or the
Improvements or any portion thereof, including but not limited to any use or
occupancy arrangements created pursuant to Section 365(h) of he Bankruptcy Code
or otherwise in connection with the commencement or continuance of any
bankruptcy, reorganization, arrangement, insolvency, dissolution, receivership
or similar proceedings, or any assignment for the benefit of creditors, in
respect of any tenant or occupant of any portion of the Land and/or the
Improvements (collectively, "Leases");
G. All revenues, rents, receipts, income, accounts
receivable, issues and profits of the Property (collectively, "Rents");
H. To the extent assignable, all permits, licenses and
rights relating to the use, occupation and operation of the Land and the
Improvements, any business conducted thereon or therein and any part thereof;
I. All real estate tax refunds payable to the Mortgagor
with respect to the Land and/or the Improvements, and refunds, credits or
reimbursements payable with respect to bonds, escrow accounts or other sums
payable in connection with the use, development, or ownership of the Land or
Improvements;
J. Any claims or demands with respect to any proceeds of
insurance in effect with respect to the Land and/or the Improvements, including
interest thereon, which the Mortgagor now has or may hereafter acquire and any
and all awards made for the taking by eminent domain, condemnation or by any
proceedings, transfer or purchase in lieu 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 whole or any part of the Property;
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K. Any zoning lot agreements and air rights and
development rights which may be vested in the Mortgagor together with any
additional air rights or development rights which have been or may hereafter be
conveyed to or become vested in the Mortgagor; and
L. All proceeds and products of the conversion,
voluntary or involuntary, including, without limitation, those from sale,
exchange, transfer, collection, loss, damage, disposition, substitution or
replacement of any of the foregoing; whether into cash, liquidated claims or
otherwise.
All of the foregoing estates, right, properties and interests
hereby conveyed to the Mortgagee may be referred to herein as the "Property".
Notwithstanding the foregoing, the Property that secures the Existing Senior
Notes Obligations and the Refinancing Senior Notes Obligations shall be limited
to Property consisting of any shares of stock, indebtedness or other obligations
of a Subsidiary of Parent or any Principal Property (as defined in the Existing
Senior Notes Indenture and the Refinancing Senior Notes Indenture (in each case
as in effect on the date hereof)) of the Mortgagor (the "Designated Trust
Property"), all of which Collateral shall also ratably secure all other
Obligations, and the Trust Property Proceeds (as defined in Section 4.04(a))
that are to be applied to the Existing Senior Notes Obligations and the
Refinancing Senior Notes Obligations shall be limited to Trust Property Proceeds
resulting from the sale of, and Rents and other amounts generated by the
holding, leasing, management, operation or other use pursuant to this Mortgage
of, the Designated Trust Property, with such Trust Property Proceeds to also be
applied ratably to all other Obligations.
TO HAVE AND TO HOLD the above granted and described Property
unto the Mortgagee and to its successors and assigns forever, and the Mortgagor
hereby covenants and agrees on behalf of itself and its successors and assigns
to warrant and defend the Property unto the Mortgagee; its successors and
assigns against the claim or claims of all persons and parties whatsoever.
PROVIDED, HOWEVER, that if Obligations shall have been paid in
cash at the time and in the manner stipulated therein and all other sums payable
hereunder and all other indebtedness secured hereby shall have been paid and all
other covenants contained in the Credit Documents shall have been performed,
then, in such case the Mortgagee shall, subject to the provisions of Section
6.19 of this Mortgage, at the request and expense of the Mortgagor, satisfy this
Mortgage (without recourse and without any representation or warranty) and the
estate, right, title and interest of the Mortgagee in the Property shall cease,
and upon payment to the Mortgagee of all reasonable costs and expenses incurred
for the preparation of the release hereinafter referenced and all recording
costs if allowed by law, the Mortgagee shall cancel and surrender the estate and
interest created by this Mortgage.
ARTICLE I
REPRESENTATIONS, WARRANTIES, COVENANTS
1.01 Title to this Property. The Mortgagor represents and
warrants: (a) it has good and marketable fee title to the Property, free and
clear of any liens and encumbrances, other
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than Liens permitted under Section 8.03 of the Credit Agreement and any other
easements, rights and claims of record (collectively "Permitted Liens"), and is
lawfully seized and possessed of the Property; (b) this Mortgage is a valid
first priority security interest and lien upon the Property subject to the
Permitted Liens; (c) it has full power and authority to encumber the Property in
the manner set forth herein; and (d) there are no defenses or offsets to this
Mortgage or to the Obligations which it secures. The Mortgagor shall preserve
such title and the validity and priority of this Mortgage and shall forever
warrant and defend the same to the Mortgagee and the Mortgagee's successors and
assigns against the claims of all persons and parties whatsoever. The Mortgagor
shall take no action nor shall it fail to take any action which could result in
an impairment of the lien of this Mortgage or which could form the basis for any
Person(s) to claim an interest in the Property (including, without limitation,
any claim for adverse use or possession or any implied dedication or easement by
prescription other than leases permitted under the Credit Agreement). If any
Lien (other than Permitted Liens) is asserted against the Property, the
Mortgagor shall promptly, at its expense: (a) provide the Mortgagee with written
notice of such Lien, including information relating to the amount of the Lien
asserted; and (b) pay the Lien in full or take such other action to cause the
Lien to be released, or, so long as the lien of this Mortgage is not
compromised, contest the same pursuant to the provisions of the Credit
Agreement. From and after the occurrence of an Event of Default, the Mortgagee
may, but shall not be obligated, to pay any such asserted Lien if not timely
paid by the Mortgagor.
1.02 Compliance with Law. The Mortgagor represents and
warrants that it possesses all material certificates, licenses, authorizations,
registrations, permits and/or approvals necessary for the ownership, operation,
leasing and management of the Property, including, without limitation, all
material environmental permits, all of which are in full force and effect and
not the subject of any revocation proceeding, undisclosed amendment, release,
suspension, forfeiture or the like. The present and contemplated use and
occupancy of the Property does not conflict with or violate any such
certificate, license, authorization, registration, permit or approval,
including, without limitation, any certificate of occupancy which may have been
issued for the Property. The Mortgagor will not take any action, or fail to take
any required action, so as to compromise or adversely affect the zoning
classification of the Property.
1.03 Payment and Performance of Obligations. Subject to the
terms of the Credit Agreement, the Mortgagor shall pay all of the Obligations
when due and payable without offset or counterclaim, and shall observe and
comply in all material respects with all of the terms, provisions, conditions,
covenants and agreements to be observed and performed by it under this Mortgage,
the other Credit Documents to which it is a party, the Secured Hedging
Agreements, the Existing Senior Notes Documents and the Refinancing Senior Notes
Documents (collectively, the "Secured Debt Agreements").
1.04 Maintenance, Repair, Alterations, Etc. The Mortgagor
will: (i) keep and maintain the Property, to the extent used in the Mortgagor's
day to day business, in good condition and repair (normal wear and tear
excepted); (ii) make or cause to be made, as and when necessary, all material
repairs, renewals and replacements, structural and nonstructural, exterior and
interior, ordinary and extraordinary, foreseen and unforeseen which are
necessary to so maintain the Property in the Mortgagor's reasonable business
judgment; (iii) restore any Improvement, to the extent used in Mortgagor's day
to day business, which may be damaged or destroyed so that the same shall be at
least substantially equal to its value, condition and
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character immediately prior to the damage or destruction; (iv) not commit or
permit any waste or deterioration (normal wear and tear excepted) of the
Property, to the extent used in the Mortgagor's day to day business; (v) not
permit any material Improvements, to the extent used in the Mortgagor's day to
day business, to be demolished or substantially altered in any manner that
substantially decreases the value thereof; (vi) promptly pay when due all claims
for labor performed and materials furnished therefor or contest such claim and;
(vii) comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental authorities having
jurisdiction over the Property, as well as comply with the provisions of any
lease, easement or other agreement affecting all or any part of the Property.
1.05 Required Insurance; Use of Proceeds. The Mortgagor will,
at its expense, at all times provide, maintain and keep in force policies of
property, hazard and liability insurance in accordance with Section 7.03 of the
Credit Agreement with respect to the Property, together with statutory workers'
compensation insurance with respect to any work to be performed on or about the
Property. To the extent required under the Credit Agreement, the Mortgagor shall
give prompt written notice to the Mortgagee of the occurrence of any material
damage to or material destruction of the Improvements or the Equipment. In the
event of any damage to or destruction of the Property or any part thereof, so
long as a Noticed Event of Default has not occurred and is not continuing the
Mortgagee will release any interest they have in the proceeds of any insurance
to the Mortgagor on account of such damage or destruction and the Mortgagor may
use such proceeds for repair restoration replacement or other business purposes
as the Mortgagor may reasonably determine. In the event of foreclosure of the
lien and interest of this Mortgage or other transfer of title or assignment of
the Property in extinguishment, in whole or in part, of the Obligations, all
right, title and interest of the Mortgagor in and to all proceeds then payable
under any policy of insurance required by this Mortgage shall inure to the
benefit of and pass to the successor in interest of the Mortgagor, or the
purchaser or mortgagor of the Property. After the occurrence of an Event of
Default, the Mortgagee shall be afforded the right to participate in and approve
the settlement of any claim made by the Mortgagor against the insurance company.
1.06 Preservation of Property. The Mortgagor agrees to pay for
any and all reasonable and actual fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Mortgagee's liens on, and security interest in, the Property, including,
without limitation, all fees and taxes in connection with the recording or
filing of instruments and documents in public offices (including stamp and
mortgage or intangible recording taxes or other taxes imposed on the Mortgagee
by virtue of its ownership of this Mortgage), which are imposed upon the
recording of this Mortgage or thereafter, all reasonable attorneys' fees,
payment or discharge of any taxes or Liens upon or in respect of the Property,
premiums for insurance with respect to the Property and all other reasonable
fees, costs and expenses in connection with protecting, maintaining or
preserving the Property and the Mortgagee's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Property.
1.07 Condemnation. Should the Mortgagor receive any notice
that a material portion of the Property or interest therein may be taken or
damaged by reason of any public improvements or condemnation proceeding or in
any other similar manner (a "Condemnation"), the Mortgagor, to the extent
required under the Credit Agreement, shall give prompt written notice thereof to
the Mortgagee. In the event of any Condemnation, after the occurrence and
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during the continuation of any Event of Default, the Mortgagee shall have the
right to participate in any negotiations or litigation and shall have the right
to approve any settlement. So long as no Noticed Event of Default has occurred
and is continuing, the Mortgagee will release any interest they have in any and
all compensation, awards, damages and proceeds paid to the Mortgagor or the
Borrower on account of such Condemnation and the Mortgagor may use such
compensation awards, damages and proceeds for repair, restoration, replacement
or other business purposes as the Mortgagor may reasonably determine.
1.08 Inspections. The Mortgagor hereby authorizes the
Mortgagee, its agents, employees and representatives, upon reasonable prior
written notice to the Mortgagor (except in an emergency or following the
occurrence and during the continuance of any Event of Default, in which case
notice shall not be required) to visit and inspect the Property or any
portion(s) thereof, all at such reasonable times and as often as the Mortgagee
may reasonably request.
1.09 Transfers. Except as otherwise permitted in accordance
with the terms of the Credit Agreement, no part of the Property or of any legal
or beneficial interest in the Property shall be sold, assigned, conveyed,
transferred or otherwise disposed of (whether voluntarily or involuntarily,
directly or indirectly, by sale of stock or any interest in the Mortgagor, or by
operation of law or otherwise).
1.10 After Acquired Property Interests. Subject to applicable
law, all right, title and interest of the Mortgagor in and to all extensions,
improvements, betterments, renewals, substitutes and replacements of, and all
additions and appurtenances to, the Property, hereafter acquired by, or released
to, the Mortgagor or constructed, assembled or placed by the Mortgagor on the
Land, and all conversions of the security constituted thereby (collectively,
"After Acquired Property Interests"), immediately upon such acquisition,
release, construction, assembling, placement or conversion, as the case may be,
and in each such case, without any further mortgage, conveyance, assignment or
other act by the Mortgagor, shall become subject to the lien of this Mortgage as
fully and completely, and with the same effect, as though now owned by the
Mortgagor and specifically described in the granting clauses hereof. The
Mortgagor shall execute and deliver to the Mortgagee all such other assurances,
mortgages, conveyances or assignments thereof as the Mortgagee may reasonably
require for the purpose of expressly and specifically subjecting such After
Acquired Property Interests to the lien of this Mortgage. The Mortgagor hereby
irrevocably authorizes and appoints the Mortgagee as the agent and
attorney-in-fact of the Mortgagor to execute all such documents and instruments
on behalf of the Mortgagor, which appointment shall be irrevocable and coupled
with an interest, if the Mortgagor fails or refuses to do so within ten (10)
days after a request therefor by the Mortgagee.
ARTICLE II
SECURITY AGREEMENT
2.01 Grant of Security; Incorporation by Reference. This
Mortgage shall, in addition to constituting a mortgage lien on and security
interest in those portions of the Property classified as real property
(including fixtures to the extent they are real property), constitute a security
agreement within the meaning of the Uniform Commercial Code or within the
meaning
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of the common law with respect to those parts of the Property classified as
personal property (including fixtures to the extent they are personal property)
to the extent a security interest therein can be created by this Mortgage. The
Mortgagor hereby grants to the Mortgagee a security interest in and to the
following property whether now owned or hereafter acquired (collectively, the
"Secured Property") for the benefit of the Mortgagee to further secure the
payment and performance of the Obligations:
(a) Those parts of the Property classified as personal
property (including (i) fixtures to the extent they are personal
property and (ii) personal property and fixtures that are leased, but
only to the extent the Mortgagor can grant to the Mortgagee a security
interest therein without breaching the terms of such lease);
(b) All general intangibles, contract rights, accounts
and proceeds arising from all insurance policies required to be
maintained by the Mortgagor and related to the Property hereunder;
(c) All proceeds of any judgment, award or settlement in
any condemnation or eminent domain proceeding in connection with the
Property, together with all general intangibles, contract rights and
accounts arising therefrom;
(d) All permits, consents and other governmental
approvals in connection with the construction of the Improvements or
the operation of the Property, to the extent any of the same may be
assigned, transferred, pledged or subjected to a security interest;
(e) All plans and specifications, studies, tests or
design materials relating to the design, construction, repair,
alteration or leasing of the Property, to the extent any of the same
may be assigned, transferred, pledged or subjected to a security
interest; and
(f) All cash and non-cash proceeds of the above-mentioned
items.
The provisions contained in the Security Agreement are hereby
incorporated by reference into this Mortgage with the same effect as if set
forth in full herein. In the event of a conflict between the provisions of this
Article II and the Security Agreement, the Security Agreement shall control and
govern and the Mortgagor shall comply therewith.
2.02 Fixture Filing and Financing Statements. This Mortgage
constitutes a security agreement, fixture filing and financing statement as
those terms are used in the Uniform Commercial Code. For purposes of this
Section, this Mortgage is to be filed and recorded in, among other places, the
real estate records of the County in which the Land is located and the following
information is included: (1) the Mortgagor shall be deemed the "Debtor" with the
address set forth for the Mortgagor on the first page of this Deed of Trust
which the Mortgagor certifies is accurate; (2) the Mortgagee shall be deemed to
be the "Secured Party" with the address set forth for the Mortgagee on the first
page of this Mortgage and shall have all of the rights of a secured party under
the Uniform Commercial Code; (3) this Mortgage covers goods which are or are to
become fixtures on the real property described in Exhibit A attached hereto; (4)
the name of the record owner of the land is the Debtor; (5) the organizational
identification number of the Debtor is NC0711678 (6) the Debtor is a
corporation, organized under the laws of the State of North Carolina; and (7)
the legal name of the Debtor is R. J. Reynolds Tobacco
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Company. The Debtor hereby authorizes the Mortgagee to file any financing
statements and terminations thereof or amendments or modifications thereto
without the signature of the Debtor where permitted by law.
ARTICLE III
ASSIGNMENT OF LEASES, RENTS AND PROFITS
3.01 Assignment. The Mortgagor hereby absolutely, irrevocably
and unconditionally sells, assigns, transfers and conveys to the Mortgagee all
of the Mortgagor's right, title and interest in and to all current and future
Leases and Rents, including those now due, past due, or to become due by virtue
of any Lease or other agreement for the occupancy or use of all or any part of
the Property regardless of to whom the Rents are payable. The Mortgagor intends
that this assignment of Leases and Rents constitutes a present and absolute
assignment and not an assignment for additional security only. Such assignment
to the Mortgagee shall not be construed to bind the Mortgagee to the performance
of any of the covenants, conditions or provisions contained in any such Lease or
otherwise impose any obligation upon the Mortgagee. The Mortgagor covenants that
the Mortgagor will not hereafter collect or accept payment of any Rents more
than one month prior to the due dates of such Rents, and that no payment of any
of the Rents to accrue for any portion of the Property (other than a de minimis
amount) will be waived, released, reduced, discounted or otherwise discharged or
compromised by the Mortgagor, except as may be approved in writing by the
Mortgagee. The Mortgagor agrees that it will not assign any of the Leases or
Rents to any other Person. The Mortgagee shall have no liability for any loss
which may arise from a failure or inability to collect Rents, proceeds or other
payments. The Mortgagor shall maintain all security deposits in accordance with
applicable law.
3.02 Revocable License; Agent. Notwithstanding the foregoing,
subject to the terms of this Article III, the Mortgagee grants to the Mortgagor
a revocable license to operate and manage the Property and to collect the Rents
and hereby directs each tenant under a Lease to pay such Rents to, or at the
direction of, the Mortgagor, until such time as the Mortgagee provides notice to
the contrary to such tenants. The Mortgagor shall hold the Rents, or a portion
thereof sufficient to discharge all current sums due in respect of the
Obligations, in trust for the benefit of the Mortgagee for use in the payment of
such sums.
3.03 Rents. (a) Upon the occurrence and during the continuance
of a Noticed Event of Default, without the need for notice or demand, the
license granted pursuant to this Article III shall immediately and automatically
be revoked and the Mortgagee shall immediately be entitled to possession of all
Rents, whether or not the Mortgagee enters upon or takes control of the
Property. Upon the revocation of such license, the Mortgagor grants to the
Mortgagee the right, at its option, to exercise all the rights granted in
Section 4.02(a). Nothing herein contained shall be construed as constituting the
Mortgagee a lender in possession in the absence of the taking of actual
possession of the Property by the Mortgagee pursuant to Section 4.02(a). As used
herein, a "Noticed Event of Default" shall mean (i) an Event of Default with
respect to the Borrower under Section 9.05 of the Credit Agreement and (ii) any
other Event of Default in
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respect of which the Mortgagee has given the Borrower notice that such Event of
Default constitutes a "Noticed Event of Default".
(b) From and after the termination of such license, the
Mortgagor may, at the Mortgagee's direction, be the agent for the Mortgagee in
collection of the Rents and all of the Rents so collected by the Mortgagor shall
be held in trust by the Mortgagor for the sole and exclusive benefit of the
Mortgagee and the Mortgagor shall, within one (1) business day after receipt of
any Rents, pay the same to the Mortgagee to be applied by the Mortgagee as
provided for herein. All Rents collected shall be applied against all expenses
of collection, including, without limitation, attorneys' fees, against costs of
operation and management of the Property and against the Obligations, in
whatever order or priority as to any of the items so mentioned as the Mortgagee
directs in its sole and absolute discretion and without regard to the adequacy
of its security. Neither the demand for or collection of Rents by the Mortgagee
shall constitute any assumption by the Mortgagee of any obligations under any
Lease or agreement relating thereto.
(c) Any reasonable funds expended by the Mortgagee to
take control of and manage the Property and collect the Rents shall become part
of the Obligations secured hereby. Such amounts shall be payable from the
Mortgagor to the Mortgagee upon the Mortgagee's demand therefor and shall bear
interest from the date of disbursement at the interest rate set forth in Section
1.08(c) of the Credit Agreement unless payment of interest at such rate would be
contrary to applicable law, in which event such amounts shall bear interest at
the highest rate which may be collected from the Mortgagor under applicable law.
3.04 Sale of Property. (a) Upon any sale of any portion of the
Property by or for the benefit of the Mortgagee pursuant to this Mortgage, the
Rents attributable to the part of the Property so sold shall be included in such
sale and shall pass to the purchaser free and clear of any rights granted herein
to the Mortgagor.
(b) The Mortgagor acknowledges and agrees that, upon
recordation of this Mortgage, the Mortgagee's interest in the Rents shall be
deemed to be fully perfected, "choate" and enforceable against the Mortgagor and
all third parties, including, without limitation, any debtor in possession or
trustee in any case under title 11 of the United States Code, without the
necessity of (i) commencing a foreclosure action with respect to this Mortgage,
(ii) furnishing notice to the Mortgagor or tenants under the Leases, (iii)
making formal demand for the Rents, (iv) taking possession of the Property as a
lender-in-possession, (v) obtaining the appointment of a receiver of the Rents,
(vi) sequestering or impounding the Rents or (vii) taking any other affirmative
action.
3.05 Bankruptcy Provisions. Without limiting the provisions of
Article III hereof or the absolute nature of the assignment of the Rents
hereunder, the Mortgagor and the Mortgagee agree that, to the extent that the
assignment of the Rents hereunder is deemed to be other than an absolute
assignment, (a) this Mortgage shall constitute a "security agreement" for
purposes of Section 552(b) of the Bankruptcy Code, (b) the security interest
created by this Mortgage extends to property of the Mortgagor acquired before
the commencement of a bankruptcy case and to all amounts paid as Rents and (c)
such security interest shall extend to all Rents acquired by the estate after
the commencement of any bankruptcy case. Without limitation of the absolute
nature of the assignment of the Rents hereunder, to the extent the
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Mortgagor (or the Mortgagor's bankruptcy estate) shall be deemed to hold any
interest in the Rents after the commencement of a voluntary or involuntary
bankruptcy case, the Mortgagor hereby acknowledges and agrees that such Rents
are and shall be deemed to be "cash collateral" under Section 363 of the
Bankruptcy Code.
ARTICLE IV
EVENTS OF DEFAULT AND REMEDIES
4.01 Events of Default. The occurrence of (i) an "Event of
Default" under and as defined in any of the Credit Documents, (ii) any "event of
default" under the Existing Senior Notes Documents or the Refinancing Senior
Notes Documents and (iii) any payment default, after any applicable grace
period, under any Secured Hedging Agreement shall constitute an Event of Default
(each, an "Event of Default") hereunder.
4.02 Remedies Upon Default. Upon the occurrence of a Noticed
Event of Default, the Mortgagee may, in the Mortgagee's sole discretion, either
itself or by or through one or more trustees, agents, nominees, assignees or
otherwise, to the fullest extent permitted by law, exercise any or all of the
following rights and remedies individually, collectively or cumulatively:
(a) either in person or by its agent, with or without
bringing any action or proceeding, or by a receiver appointed by a
court and without regard to the adequacy of its security, (i) enter
upon and take possession of the Property or any part thereof and of all
books, records and accounts relating thereto or located thereon, in its
own name or in the name of the Mortgagor, and do or cause to be done
any acts which it deems necessary or desirable to preserve the value of
the Property or any part thereof or interest therein, collect the
income therefrom or protect the security hereof; (ii) with or without
taking possession of the Property make such repairs, alterations,
additions and improvements as the Mortgagee deems necessary or
desirable and do any and all acts and perform any and all work which
the Mortgagee deems necessary or desirable to complete any unfinished
construction on the Property; (iii) make, cancel or modify Leases and
sue for or otherwise collect the Rents thereof, including those past
due and unpaid; (iv) make any payment or perform any act which the
Mortgagor has failed to make or perform hereunder; (v) appear in and
defend any action or proceeding purporting to affect the security
hereof or the rights or powers of the Mortgagee; (vi) pay, purchase,
contest or compromise any encumbrance, charge or Lien on the Property;
and (vii) take such other actions as the Mortgagee deems necessary or
desirable;
(b) commence and maintain one or more actions at law or
in equity or by any other appropriate remedy (i) to protect and enforce
the rights of the Mortgagee hereunder, including for the specific
performance of any covenant or agreement herein contained (which
covenants and agreements the Mortgagor agrees shall be specifically
enforceable by injunctive or other appropriate equitable remedy), (ii)
to collect any sum then due hereunder, (iii) to aid in the execution of
any power herein granted, or (iv) to foreclose this Mortgage in
accordance with Section 4.03 hereof;
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(c) exercise any or all of the remedies available to a
secured party under the Uniform Commercial Code;
(d) by notice to the Mortgagor (to the extent such notice
is required to be given under the Credit Documents), but without formal
demand, presentment, notice of intention to accelerate or of
acceleration, protest or notice of protest, all of which are hereby
waived by the Mortgagor, declare all of the indebtedness secured hereby
to be immediately due and payable, and upon such declaration all of
such indebtedness shall become and be immediately due and payable,
anything in this Mortgage or the other Credit Documents to the contrary
notwithstanding; and
(e) exercise any other right or remedy available to the
Mortgagee under the Secured Debt Agreements.
4.03 Right of Foreclosure. (a) Upon the occurrence of a
Noticed Event of Default, the Mortgagee shall have the right, in its sole
discretion, to proceed at law or in equity to foreclose this Mortgage with
respect to all or any portion of the Property by judicial sale under the
judgment of a Court of competent jurisdiction, in accordance with the applicable
laws of jurisdiction in which the Property is located. If the Property consists
of several lots, parcels or items of Property, the Mortgagee may, in its sole
discretion: (i) designate the order in which such lots, parcels or items shall
be offered for sale or sold, or (ii) elect to sell such lots, parcels or items
through a single sale, or through two or more successive sales, or in any other
manner the Mortgagee deems in its best interest. Should the Mortgagee desire
that more than one sale or other disposition of the Property be conducted, the
Mortgagee may, at its option, cause the same to be conducted simultaneously, or
successively, on the same day, or at such different days or times and in such
order as the Mortgagee may deem to be in its best interests, and no such sale
shall terminate or otherwise affect the lien of this Mortgage on any part of the
Property not sold until all Obligations have been fully paid and performed. The
Mortgagee may elect to sell the Property for cash or credit. The Mortgagee may,
to the extent permitted by law, 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 an applicable provision of law, the Mortgagee may make
such sale at the time and place to which the same shall be so adjourned. With
respect to all components of the Property and to the extent allowable by
applicable law, the Mortgagee is hereby irrevocably appointed the true and
lawful attorney-in-fact of the Mortgagor (coupled with an interest), in its name
and stead, to make all necessary conveyances, assignments, transfers and
deliveries of the Property in connection with any foreclosure of this Mortgage,
and for that purpose the Mortgagee may execute all necessary instruments of
conveyance, assignment, transfer and delivery, and may substitute one or more
persons with such power, the Mortgagor hereby ratifying and confirming all that
its said attorney-in-fact or such substitute or substitutes shall lawfully do by
virtue hereof. Notwithstanding the foregoing, the Mortgagor, if so requested by
the Mortgagee, shall ratify and confirm any such sale or sales by executing and
delivering to the Mortgagee or to such purchaser or purchasers all such
instruments as may be advisable, in the judgment of the Mortgagee, for such
purpose, and as may be designated in such request. To the extent permitted by
law, any such sale or sales made under or by virtue of this Article IV shall
operate to divest all the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of the Mortgagor in and to the
properties and rights so sold, and shall be a perpetual
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bar both at law and in equity against the Mortgagor and against any and all
persons claiming or who may claim the same, or any part thereof, from, through
or under the Mortgagor. Upon any sale made under or by virtue of this Article
IV, the Mortgagee may, to the extent permitted by law, bid for and acquire the
Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the Obligations secured
hereby the net sales price after deducting therefrom the expenses of the sale
and the cost of the action and any other sums which the Mortgagee is authorized
to deduct by law or under this Mortgage.
(b) Any foreclosure of this Mortgage and any other
transfer of all or any part of the Property in extinguishment of all or any part
of the Obligations may, at the Mortgagee's option, be subject to any or all
Leases of all or any part of the Property and the rights of tenants under such
Leases. No failure to make any such tenant a defendant in any foreclosure
proceedings or to foreclose or otherwise terminate any such Lease and the rights
of any such tenant in connection with any such foreclosure or transfer shall be,
or be asserted to be, a defense or hindrance to any such foreclosure or transfer
or to any proceedings seeking collection of all or any part of the Obligations
(including, without limitation, any deficiency remaining unpaid after completion
of any such foreclosure or transfer).
(c) If the Mortgagor retains possession of the Property
or any part thereof subsequent to a sale, the Mortgagor will be considered a
tenant at sufferance of the purchaser, and will, if the Mortgagor remains in
possession after demand to remove, be guilty of forcible detainer and will be
subject to eviction and removal, forcible or otherwise, with or without process
of law, and all damages to the Mortgagor by reason thereof are hereby expressly
waived by the Mortgagor.
(d) It is agreed and understood that (x) this Mortgage
may be enforced only by the action of the Mortgagee acting upon the instructions
of the Required Lenders or, if the CA Termination Date (as defined below) has
occurred, the holders of a majority of the outstanding principal amount of all
remaining Obligations, provided that if prior to the CA Termination Date a
payment default with respect to at least $300,000,000 principal amount in the
aggregate of Existing Senior Notes and/or Refinancing Senior Notes has continued
for at least 180 days (and such defaulted payment has not been received pursuant
to a drawing under any letter of credit), the holders of a majority of the
outstanding principal amount of the Indebtedness subject to such payment default
or defaults can direct the Mortgagee to commence and continue enforcement of the
Liens created hereunder, which the Mortgagee shall comply with subject to
receiving any indemnity which it reasonably requests, provided further, that the
Mortgagee shall thereafter comply only with the directions of the Required
Lenders as to carrying out such enforcement so long as such directions are not
adverse to the aforesaid directions of the holders of Indebtedness subject to
such payment default or defaults, and (y) no other Secured Creditor shall have
any right individually to seek to enforce or to enforce this Mortgage or to
realize upon the security to be granted hereby, it being understood and agreed
that such rights and remedies shall be exercised exclusively by the Mortgagee
for the benefit of the Secured Creditors as their interest may appear upon the
terms of this Mortgage.
4.04 Application of Proceeds. (a) To the fullest extent
permitted by law, the proceeds of any sale of, and the Rents and other amounts
generated by the holding, leasing, management, operation or other use of, each
item of the Property pursuant to this Mortgage (the
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"Trust Property Proceeds") shall be applied by the Mortgagee (or the receiver,
if one is appointed) as follows:
(i) first, to the payment of all Obligations owing to
the Mortgagee of the type described in clauses (v), (vi) and (vii) of
the definition of Obligations herein;
(ii) second, to the extent Trust Property Proceeds of
Property remain after the application pursuant to preceding clause (i),
an amount equal to the outstanding Obligations secured by such item of
Property shall be paid to the Secured Creditors in the manner provided
below as their interests may appear, with each Secured Creditor
receiving an amount equal to its outstanding Obligations secured by
such item of Property or, if the proceeds are insufficient to pay in
full all such Obligations, its Pro Rate Share of the amount so
remaining to be distributed, with any such amount to be applied in the
case of the Credit Document Obligations, the Existing Senior Notes
Obligations and the Refinancing Senior Notes Obligations, first to the
payment of interest in respect of the unpaid principal amount of Loans,
Existing Senior Notes or Refinancing Senior Notes, as the case may be,
second to the payment of principal of Loans, Existing Senior Notes or
Refinancing Senior Notes, as the case may be, and finally to the other
Credit Document Obligations, Existing Senior Notes Obligations or
Refinancing Senior Notes Obligations, as the case may be; and
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii) to the
Mortgagor or, to the extent directed by the Mortgagor or a court of
competent jurisdiction, to whomever may be lawfully entitled to receive
such surplus.
(b) For purposes of this Agreement, "Pro Rate Share"
shall mean when calculating a Secured Creditor's portion of any distribution or
amount pursuant to clause (a) above, the amount (expressed as a percentage)
equal to a fraction the numerator of which is the then outstanding amount of the
relevant Obligations secured by the relevant item of Property owed such Secured
Creditor and the denominator of which is the then outstanding amount of all
relevant Obligations secured by the relevant item of Property.
(c) All payments required to be made to the (i) Lender
Creditors hereunder shall be made to the Administrative Agent for the account of
the respective Lender Creditors, (ii) Hedging Creditors hereunder shall be made
to the paying agent under the applicable Secured Hedging Agreement or, in the
case of Secured Hedging Agreements without a paying agent, directly to the
applicable Hedging Creditors, (iii) Existing Senior Notes Creditors hereunder
shall be made to the Existing Senior Notes Trustee for the account of the
respective Existing Senior Notes Creditors, and (iv) Refinancing Senior Notes
Creditors hereunder shall be made to the Refinancing Senior Notes Trustee for
the account of the respective Refinancing Senior Notes Creditors.
(d) For purposes of applying payments received in
accordance with this Section, the Mortgagee shall be entitled to rely upon (i)
the Administrative Agent for a determination of the outstanding Credit Document
Obligations, (ii) upon any Hedging Creditor for a determination of the
outstanding Hedging Obligations owed to such Hedging Creditor, (iii) the
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Existing Senior Notes Trustee for a determination of the outstanding Existing
Senior Notes Obligations, and (iv) the Refinancing Senior Notes Trustee for a
determination of the outstanding Refinancing Senior Notes Obligations. Unless it
has actual knowledge (including by way of written notice from a Secured
Creditor) to the contrary, the Administrative Agent under the Credit Agreement,
in furnishing information pursuant to the preceding sentence, and the Mortgagee,
in acting hereunder, shall be entitled to assume that no Credit Document
Obligations other than principal, interest and regularly accruing fees are owing
to any Lender Creditor.
(e) It is understood and agreed that the Mortgagor shall
remain liable to the extent of any deficiency between (x) the amount of the
Obligations for which it is responsible directly or as a guarantor that are
satisfied with proceeds of the Property and (y) the aggregate outstanding amount
of such Obligations.
4.05 Appointment of Receiver. Upon the occurrence and during
the continuance of a Noticed Event of Default, the Mortgagee as a matter of
strict right and without notice to the Mortgagor or anyone claiming under the
Mortgagor, and without regard to the adequacy or the then value of the Property
or the interest of the Mortgagor therein or the solvency of any party bound for
payment of the Obligations, shall have the right to apply to any court having
jurisdiction to appoint a receiver or receivers of the Property, and the
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor. Any such receiver or receivers shall have all the
usual rights, powers and duties of receivers in like or similar cases and all
the rights, powers and duties of the Mortgagee in case of entry as provided in
Section 4.02 hereof, including but not limited to the full power to rent,
maintain and otherwise operate the Property upon such terms as are approved by
the court and shall continue as such and exercise all such powers until the date
of confirmation of sale of the Property unless such receivership is sooner
terminated.
4.06 Exercise of Rights and Remedies. The entering upon and
taking possession of the Property, the collection of any Rents and the exercise
of any of the rights contained in this Article IV, shall not, alone, cure or
waive any Event of Default or notice of default hereunder or invalidate any act
done in response to such Event of Default or pursuant to such notice of default
and, notwithstanding the continuance in possession of the Property or the
collection, receipt and application of Rents, the Mortgagee shall be entitled to
exercise every right provided for herein or in the Credit Documents, the
Existing Senior Notes Documents or the Refinancing Senior Notes Documents, or at
law or in equity upon the occurrence of any Event of Default.
4.07 Remedies Not Exclusive. The Mortgagee shall be entitled
to enforce payment and performance of the Obligations and to exercise all
rights and powers under this Mortgage or other agreement or any laws now or
hereafter in force, notwithstanding that some or all of the Obligations may now
or hereafter be otherwise secured, whether by mortgage, deed of trust, security
deed, pledge, lien, assignment or otherwise. Neither the acceptance of this
Mortgage nor its enforcement, whether by court action or pursuant to the powers
herein contained, shall prejudice or in any manner affect the Mortgagee's right
to realize upon or enforce any other security now or hereafter held by the
Mortgagee, it being agreed that the Mortgagee shall be entitled to enforce this
Mortgage and any other security now or hereafter held by the Mortgagee in such
order and manner as it may in its absolute and sole discretion and election
determine. No remedy herein conferred upon or reserved to the Mortgagee is
intended
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to be exclusive of any other remedy herein or in any of the other Secured Debt
Agreements or by law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy to which the
Mortgagee is entitled may be exercised, concurrently or independently, from time
to time and as often as may be deemed expedient by the Mortgagee, and the
Mortgagee may pursue inconsistent remedies. No delay or omission of the
Mortgagee to, exercise any right or power accruing upon any Event of Default
shall impair any right or power or shall be construed as a waiver of any Event
of Default or any acquiescence therein. If the Mortgagee shall have proceeded to
invoke any right or remedy hereunder or under any other Secured Debt Agreement,
and shall thereafter elect to discontinue or abandon it for any reason, the
Mortgagee shall have the unqualified right to do so and, in such an event, the
rights and remedies of the Mortgagee shall continue as if such right or remedy
had never been invoked, but no such discontinuance or abandonment shall waive
any Event of Default which may then exist or the right of the Mortgagee
thereafter to exercise any right or remedy under the Secured Debt Agreements for
such Event of Default.
4.08 WAIVER OF REDEMPTION. NOTICE. MARSHALLING, ETC.
NOTWITHSTANDING ANYTHING HEREIN CONTAINED TO THE CONTRARY, TO THE EXTENT
PERMITTED BY LAW, THE MORTGAGOR ACKNOWLEDGING THAT IT IS AWARE OF AND HAS HAD
THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS HEREUNDER; (A)
WILL NOT (I) AT ANY TIME INSIST UPON, OR PLEAD, OR IN ANY MANNER WHATSOEVER,
CLAIM OR TAKE ANY BENEFIT OR ADVANTAGE OF ANY STAY OR EXTENSION OR MORATORIUM
LAW, PRESENT OR FUTURE STATUTE OF LIMITATIONS, ANY LAW RELATING TO THE
ADMINISTRATION OF ESTATES OF DECEDENTS, APPRAISEMENT, VALUATION, REDEMPTION,
STATUTORY RIGHT OF REDEMPTION, OR THE MATURING OR DECLARING DUE OF THE WHOLE OR
ANY PART OF THE OBLIGATIONS, NOTICE OF INTENTION OF SUCH MATURING OR DECLARING
DUE, OTHER NOTICE (WHETHER OF DEFAULTS, ADVANCES, THE CREATION, EXISTENCE,
EXTENSION OR RENEWAL OF ANY OF THE OBLIGATIONS OR OTHERWISE, EXCEPT FOR RIGHTS
TO NOTICES EXPRESSLY GRANTED HEREIN OR IN THE CREDIT DOCUMENTS), SUBROGATION,
ANY SET-OFF RIGHTS, HOMESTEAD OR ANY OTHER EXEMPTIONS FROM EXECUTION OR SALE OF
THE PROPERTY OR ANY PART THEREOF, WHEREVER ENACTED, NOW OR AT ANY TIME HEREAFTER
IN FORCE, WHICH MAY AFFECT THE COVENANTS AND TERMS OF PERFORMANCE OF THIS
MORTGAGE, OR (II) CLAIM, TAKE OR INSIST UPON ANY BENEFIT OR ADVANTAGE OR ANY LAW
NOW OR HEREAFTER IN FORCE PROVIDING FOR THE VALUATION OR APPRAISAL OF THE
PROPERTY OR ANY PART THEREOF, PRIOR TO ANY SALE OR SALES THEREOF WHICH MAY BE
MADE PURSUANT TO ANY PROVISION HEREOF, OR PURSUANT TO THE DECREE, JUDGMENT OR
ORDER OF ANY COURT OF COMPETENT JURISDICTION; OR (III) AFTER ANY SUCH SALE OR
SALES, CLAIM OR EXERCISE ANY RIGHT UNDER ANY STATUTE HERETOFORE OR HEREAFTER
ENACTED TO REDEEM THE PROPERTY SO SOLD OR ANY PART THEREOF; AND (B) COVENANTS
NOT TO HINDER, DELAY OR IMPEDE THE EXECUTION OF ANY POWER HEREIN GRANTED OR
DELEGATED TO THE MORTGAGEE, BUT TO SUFFER AND PERMIT THE EXECUTION OF EVERY
POWER AS THOUGH NO SUCH LAW OR LAWS HAD BEEN MADE OR ENACTED. THE MORTGAGOR, FOR
ITSELF AND ALL
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WHO MAY CLAIM UNDER IT, WAIVES, TO THE EXTENT THAT IT LAWFULLY MAY, ALL RIGHT TO
HAVE THE PROPERTY MARSHALLED UPON ANY FORECLOSURE HEREOF.
4.09 Expenses of Enforcement. In connection with any action to
enforce any remedy of the Mortgagee under this Mortgage, the Mortgagor agrees to
pay all costs and expenses which may be paid or incurred by or on behalf of the
Mortgagee, including, without limitation, reasonable attorneys' fees, receiver's
fees, appraiser's fees, outlays for documentary and expert evidence,
stenographer's charges, publication costs, and costs (which may be estimated as
to items to be expended after entry of the decree) of procuring all such
abstracts of title, title searches and examinations, title insurance policies
and similar data and assurances with respect to title and value as the Mortgagee
may deem necessary or desirable, and neither the Mortgagee nor any other Person
shall be required to accept tender of any portion of the Obligations unless the
same be accompanied by a tender of all such expenses, costs and commissions. All
of the costs and expenses described in this Section 4.09, and such expenses and
fees as may be incurred in the protection of the Property and the maintenance of
the Lien of this Mortgage, including the reasonable fees of any attorney
employed by the Mortgagee in any litigation or proceeding, including appellate
proceedings, affecting this Mortgage or the Property (including, without
limitation, the occupancy thereof or any construction work performed thereon),
including probate and bankruptcy proceedings, or in preparation for the
commencement or defense of any proceeding or threatened suit or proceeding
whether or not an action is actually commenced, shall be immediately due and
payable by the Mortgagor, with interest thereon at the rate of interest set
forth in the Credit Documents and shall be part of the Obligations secured by
this Mortgage.
ARTICLE V
ADDITIONAL COLLATERAL
5.01 Additional Collateral. (a) The Mortgagor acknowledges and
agrees that the Obligations are secured by the Property and various other
collateral including, without limitation, at the time of execution of this
Mortgage certain personal property of the Mortgagor described in the Credit
Documents. The Mortgagor specifically acknowledges and agrees that the Property,
in and of itself, if foreclosed or realized upon would not be sufficient to
satisfy the outstanding amount of the Obligations. Accordingly, the Mortgagor
acknowledges that it is in the Mortgagor's contemplation that the other
collateral pledged to secure the Obligations may be pursued by the Mortgagee in
separate proceedings in the various States, counties and other countries where
such collateral may be located and additionally that the Mortgagor liable for
payment of the Obligations will remain liable for any deficiency judgments in
addition to any amounts the Mortgagee may realize on sales of other property or
any other collateral given as security for the Obligations. Specifically, and
without limitation of the foregoing, it is agreed that it is the intent of the
parties hereto that in the event of a foreclosure of this Mortgage, the
Indebtedness evidencing the Obligations shall not be deemed merged into any
judgment of foreclosure, but rather shall remain outstanding. It is the further
intent and understanding of the parties that the Mortgagee, following a Noticed
Event of Default, may pursue all of its collateral
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with the Obligations remaining outstanding and in full force and effect
notwithstanding any judgment of foreclosure or any other judgment which the
Mortgagee may obtain.
(b) The Mortgagor acknowledges and agrees that the
Property and the property which may from time to time be encumbered by the other
Credit Documents may be located in more than one State or country and therefore
the Mortgagor waives and relinquishes any and all rights it may have, whether at
law or equity, to require the Mortgagee to proceed to enforce or exercise any
rights, powers and remedies it may have under the Credit Documents in any
particular manner, in any particular order, or in any particular State or other
jurisdiction. Furthermore, the Mortgagor acknowledges and agrees that the
Mortgagee shall be allowed to enforce payment and performance of the Obligations
and to exercise all rights and powers provided under this Mortgage, or the other
Credit Documents or under any provision of law, by one or more proceedings,
whether contemporaneous, consecutive or both in any one or more States in which
the security is located. Neither the acceptance of this Mortgage, or any Credit
Document nor its enforcement in one State, whether by court action, power of
sale, or otherwise, shall prejudice or in any way limit or preclude enforcement
of the Credit Documents through one or more additional proceedings, in that
State or in any other State or country.
(c) The Mortgagor further agrees that any particular
remedy or proceeding, including, without limitation, foreclosure through court
action (in a state or federal court) or power of sale, may be brought and
prosecuted in the local or federal courts of any one or more States as to all or
any part of the Property or the property encumbered by the Credit Documents,
wherever located, without regard to the fact that any one or more prior or
contemporaneous proceedings have been situated elsewhere with respect to the
same or any other part of the Property and the property encumbered by the Credit
Documents.
(d) The Mortgagee may resort to any other security held
by the Mortgagee for the payment of the Obligations in such order and manner as
the Mortgagee may elect.
(e) Notwithstanding anything contained herein to the
contrary, the Mortgagee shall be under no duty to the Mortgagor or others,
including, without limitation, the holder of any junior, senior or subordinate
mortgage on the Property or any part thereof or on any other security held by
the Mortgagee, to exercise or exhaust all or any of the rights, powers and
remedies available to the Mortgagee.
ARTICLE VI
MISCELLANEOUS
6.01 Governing Law. The provisions of this Mortgage regarding
the creation, perfection and enforcement of the liens, security title and
security interests herein granted shall be governed by and construed under the
laws of the state in which the Property is located. All other provisions of this
Mortgage shall be governed by the laws of the State of New York (including,
without limitation, Section 5-1401 of the General Obligations Law of the State
of New York), without regard to choice of laws provisions.
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6.02 Limitation on Interest. It is the intent of the Mortgagor
and the Mortgagee in the execution of this Mortgage and all other instruments
evidencing or securing the Obligations to contract in strict compliance with
applicable usury laws. In furtherance thereof, the Mortgagee and the Mortgagor
stipulate and agree that none of the terms and provisions contained in this
Mortgage shall ever be construed to create a contract for the use, forbearance
or retention of money requiring payment of interest at a rate in excess of the
maximum interest rate permitted to be charged by relevant law. If this Mortgage
or any other instrument evidencing or securing the Obligations violates any
applicable usury law, then the interest rate payable in respect of the Loans
shall be the highest rate permissible by law.
6.03 Notices. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telex, facsimile
transmission or cable communications) and mailed, telegraphed, telexed,
telecopied, cabled or delivered (including by way of overnight courier):
(i) if to the Mortgagor, at;
R J. Reynolds Tobacco Company
401 North Main Street,
Winston-Salem, North Carolina 27102
(ii) if to the Mortgagee, at:
JPMorgan Chase Bank
270 Park Avenue
New York, New York 10017
Attn.: Raju Nanoo
Tel. No.: 212-270-2272
Fax. No.: 212-270-5120
(iii) if to any Lender (other than the Mortgagee), at such
address as such Lender shall have specified in the Credit Agreement;
(iv) if to any Hedging Creditor, at such address as such
Hedging Creditor shall have specified in writing to the Mortgagor and
the Mortgagee;
(v) if to any Existing Senior Notes Creditor, at such
address of the Existing Senior Notes Trustee as the Existing Senior
Notes Trustee shall have specified in writing to the Mortgagor and the
Mortgagee;
(vi) if to any Refinancing Senior Notes Creditor, at such
address of the Refinancing Senior Notes Trustee as the Refinancing
Senior Notes Trustee shall have specified in writing to the Mortgagor
and the Mortgagee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. Except as
otherwise expressly provided herein, all such notices and communications shall
be deemed to have been duly given or made (i) in the
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case of any Secured Creditor, when received and (ii) in the case of the
Mortgagor, when delivered to the Mortgagor in any manner required or permitted
hereunder.
6.04 Captions. The captions or headings at the beginning of
each Article and Section hereof are for the convenience of the parties and are
not a part of this Mortgage.
6.05 Amendment. None of the terms and conditions of this
Mortgage may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Mortgagor and the Mortgagee (with the
consent of (x) if prior to the CA Termination Date, the Required Lenders or, to
the extent required by Section 12.12 of the Credit Agreement, all of the Lenders
and (y) if on and after the CA Termination Date, the holders of at least a
majority of the outstanding principal amount of the Obligations remaining
outstanding), provided that (i) no such change, waiver, modification or variance
shall be made to Section 4.04 hereof or this Section 6.05 without the consent of
each Secured Creditor adversely affected thereby and (ii) that any change,
waiver, modification or variance affecting the rights and benefits of a single
Class of Secured Creditors (and not all Secured Creditors in a like or similar
manner) shall require the written consent of the Requisite Creditors of such
Class of Secured Creditors. For the purpose of this Agreement, the term "Class"
shall mean each class of Secured Creditors, i.e., whether (w) the Lender
Creditors as holders of the Credit Document Obligations, (x) the Hedging
Creditors as holders of the Hedging Obligations, (y) the Existing Senior Notes
Creditors as holders of the Existing Senior Notes Obligations, and (z) the
Refinancing Senior Notes Creditors as holders of the Refinancing Senior Notes
Obligations. For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of (w) with respect to each of the Credit Document
Obligations, the Required Lenders, (x) with respect to the Hedging Obligations,
the holders of at least a majority of all Secured Hedging Obligations
outstanding from time to time, (y) with respect to the Existing Senior Notes
Obligations, the holders of at least a majority of the outstanding principal
amount of the Existing Senior Notes, (z) with respect to the Refinancing Senior
Notes Obligations, the holders of at least a majority of the outstanding
principal amount of the Refinancing Senior Notes.
6.06 Obligations Absolute. The Obligations of the Mortgagor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of the Mortgagor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Mortgage, any other Credit Document, any
Secured Hedging Agreement, any Existing Senior Notes Document or any Refinancing
Senior Notes Document; or (c) any amendment to or modification of any Credit
Document, any Secured Hedging Agreement, any Existing Senior Notes Document or
any Refinancing Senior Notes Document or any security for any of the
Obligations; whether or not the Mortgagor shall have notice or knowledge of any
of the foregoing.
6.07 Further Assurances. The Mortgagor shall, upon the request
of the Mortgagee and at the expense of the Mortgagor: (a) promptly correct any
defect, error or omission which may be discovered in the contents of this
Mortgage or any UCC financing statements filed in connection herewith; (b)
promptly execute, acknowledge, deliver and record or file such further
instruments (including, without limitation, further mortgages, deeds to secure
debt, security deeds, security agreements, financing statements, continuation
statements and
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assignments of rents or leases) and promptly do such further acts as may be
necessary, desirable or proper to carry out more effectively the purposes of
this Mortgage and to subject to the liens and security interests hereof any
property intended by the terms hereof to be covered hereby, including
specifically, but without limitation, any renewals, additions, substitutions,
replacements or appurtenances to the Property; and (c) promptly execute,
acknowledge, deliver, procure and record or file any document or instrument
(including specifically any financing statement) deemed advisable by the
Mortgagee to protect, continue or perfect the liens or security interests
hereunder against the rights or interests of third persons.
6.08 Partial Invalidity. If any of the provisions of this
Mortgage or the application thereof to any person, party or circumstances shall
to any extent be invalid or unenforceable, the remainder of this Mortgage, or
the application of such provision or provisions to persons, parties or
circumstances other than those as to whom or which it is held invalid or
unenforceable, shall not be affected thereby, and every provision of this
Mortgage shall be valid and enforceable to the fullest extent permitted by law.
6.09 Partial Releases. No release from the Lien of this
Mortgage of any part of the Property by the Mortgagee shall in any way alter,
vary or diminish the force or effect of this Mortgage on the balance of the
Property or the priority of the Lien of this Mortgage on the balance of the
Property.
6.10 Priority. This Mortgage is intended to and shall be valid
and have priority over all subsequent liens and encumbrances, including
statutory liens, excepting solely taxes and assessments levied on the real
estate, to the extent of the maximum amount secured hereby.
6.11 Covenants Running with the Land. All Obligations are
intended by the Mortgagor and the Mortgagee to be, and shall be construed as,
covenants running with the Property. As used herein, the "Mortgagor" shall refer
to the party named in the first paragraph of this Mortgage and to any subsequent
owner of all or any portion of the Property. All persons who may have or acquire
an interest in the Property shall be deemed to have notice of, and be bound by,
the terms of the Credit Agreement and the other Credit Documents; provided,
however, that no such party shall be entitled to any rights thereunder without
prior written consent of the Mortgagee.
6.12 Successors and Assigns. This Mortgage shall be binding
upon and inure to the benefit of the Mortgagee and the Mortgagor and their
respective successors and assigns. Except as otherwise permitted by Credit
Agreement, the Mortgagor shall not, without the prior written consent of the
Mortgagee, assign any rights, duties, or obligations hereunder.
6.13 Purpose of Loans. The Mortgagor hereby represents and
agrees that the Loans, Existing Senior Notes and Refinancing Senior Notes are
being obtained or issued for business or commercial purposes, and the proceeds
thereof will not be used for personal, family, residential, household or
agricultural purposes.
6.14 No Joint Venture or Partnership. The relationship created
hereunder and under the other Credit Documents, the Secured Hedging Agreements,
the Existing Senior Notes Documents and the Refinancing Senior Notes Documents
is that of creditor/debtor. The
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Mortgagee does not owe any fiduciary or special obligation to the Mortgagor
and/or any of the Mortgagor's, officers, partners, agents, or representatives.
Nothing herein or in any other Credit Document, any Secured Hedging Agreement,
any Existing Senior Notes Document or any Refinancing Senior Notes Document is
intended to create a joint venture, partnership, tenancy-in-common or joint
tenancy relationship between the Mortgagor and the Mortgagee.
6.15 The Mortgagee as Collateral Agent for Secured Creditors.
It is expressly understood and agreed that the rights and obligations of the
Mortgagee as holder of this Mortgage and as Collateral Agent for the Secured
Creditors and otherwise under this Mortgage are only those expressly set forth
in this Mortgage and in the Credit Agreement. The Mortgagee shall act hereunder
pursuant to the terms and conditions set forth herein and in Annex M to the
Security Agreement, the terms of which shall be deemed incorporated herein by
reference as fully as if same were set forth herein in their entirety (for such
purpose, treating each reference to the "Security Agreement" as a reference to
this Agreement, each reference to the "Collateral Agent" as a reference to the
Mortgagee and each reference to an "Assignor" as a reference to a "Mortgagor").
6.16 Full Recourse. This Mortgage is made with full recourse
to the Mortgagor (including as to all assets of the Mortgagor, including the
Property and the Secured Property).
6.17 Reduction of Secured Amount. In the event the amount
secured by this Mortgage is less than the aggregate Obligations, then the amount
secured hereby shall be reduced only by the last and final sums that the
Mortgagor or the Borrower repays with respect to the Obligations and shall not
be reduced by any intervening repayments of the Obligations. So long as the
balance of the Obligations exceeds the amount secured hereby, any payments of
the Obligations shall not be deemed to be applied against, or to reduce, the
portion of the Obligations secured by this Mortgage. Such payments shall instead
be deemed to reduce only such portions of the Obligations as are secured by
other collateral located outside of the state in which the Property is located
or are unsecured.
6.18 Acknowledgment of Receipt. The Mortgagor hereby
acknowledges receipt of a true copy of this Mortgage.
6.19 Release Payment. (a) After the Termination Date (as
defined below), this Mortgage shall terminate (provided that all indemnities set
forth herein shall survive any such termination) and the Mortgagee, at the
request and expense of the Mortgagor, will execute and deliver to the Mortgagor
a proper instrument or instruments acknowledging the satisfaction and
termination of this Mortgage. As used in this Mortgage, (i) "CA Termination
Date" shall mean the date upon which the Total Commitment has been terminated,
no Letter of Credit or Note under the Credit Agreement is outstanding and all
other Credit Document Obligations have been paid in full in cash (other than
arising from indemnities for which no request for payment has been made) and
(ii) "Termination Date" shall mean the date upon which (x) the CA Termination
Date shall have occurred and (y) if (but only if) a Notified Non-Credit
Agreement Event of Default (as defined below) shall have occurred and be
continuing on the CA Termination Date (and after giving effect thereto), either
(I) such Notified Non-Credit Agreement Event of Default shall have been cured or
waived by the requisite holders of the relevant Obligations subject to such
Notified Non-Credit Agreement Event of Default or (II) all Secured Hedging
Agreements
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(if any) giving rise to a Notified Non-Credit Agreement Event of Default shall
have been terminated and all Obligations subject to such Notified Non-Credit
Agreement Event of Default shall have been paid in full (other than arising from
indemnities for which no request for payment has been made). As used herein
"Notified Non-Credit Agreement Event of Default" means (i) the acceleration of
the maturity of any Existing Senior Notes or Refinancing Senior Notes or the
failure to pay at maturity any Existing Senior Notes or Refinancing Senior
Notes, or the occurrence of any bankruptcy or insolvency Event of Default under
the Existing Senior Notes Indenture or the Refinancing Senior Notes Indenture,
or (ii) any Event of Default under a Secured Hedging Agreement, in the case of
any event described in clause (i) or (ii) to the extent the Existing Senior
Notes Trustee, the Refinancing Senior Notes Trustee or the relevant Hedging
Creditor, as the case may be, has given written notice to the Mortgagee that a
"Notified Non-Credit Agreement Event of Default" exists; provided that such
written notice may only be given if such Event of Default is continuing and,
provided further, that any such Notified Non-Credit Agreement Event of Default
shall cease to exist (I) once there is no longer any Event of Default under the
Existing Senior Notes Indenture, the Refinancing Senior Notes Indenture or the
respective Secured Hedging Agreement, as the case may be, in existence, (II) in
the case of an Event of Default under the Existing Senior Notes Indenture or the
Refinancing Senior Notes Indenture, after all Existing Senior Notes Obligations
or Refinancing Senior Notes Obligations, as the case may be, have been repaid in
full, (III) in the case of an Event of Default under a Secured Hedging
Agreement, such Secured Hedging Agreement has been terminated and all Hedging
Obligations thereunder repaid in full, (IV) in the case of an Event of Default
under the Existing Senior Notes Indenture or the Refinancing Senior Notes
Indenture, if the Existing Senior Notes Creditors or the Refinancing Senior
Notes Creditors, as the case may be, holding at least a majority of the
aggregate principal amount of the outstanding Existing Senior Notes or the
Refinancing Senior Notes, as the case may be, at such time have rescinded such
written notice and (V) in the case of an Event of Default under a Secured
Hedging Agreement, the requisite Hedging Creditors with Hedging Obligations
thereunder at such time have rescinded such written notice.
(b) So long as no Notified Non-Credit Agreement Event of
Default has occurred and is continuing, in the event that (x) prior to the CA
Termination Date, (i) any part of the Property is sold or otherwise disposed of
in connection with a sale or other disposition permitted by Section 8.02 of the
Credit Agreement (it being agreed for such purposes that a release will be
deemed "permitted by Section 8.02 of the Credit Agreement" if the proposed
transaction is not prohibited by the Credit Agreement) or (ii) all or any part
of the Property is otherwise released at the direction of the Required Lenders
(or all the Lenders if required by Section 12.12 of the Credit Agreement), and
the proceeds of such sale or disposition or from such release are applied in
accordance with the terms of the Credit Agreement to the extent required to be
so applied (it being understood and agreed by the Mortgagor and the Mortgagee
that so long as no Noticed Event of Default has occurred and is continuing, the
Mortgagor may use such proceeds as the Mortgagor may reasonably determine) or
(y) on and after the CA Termination Date, any part of the Property is sold or
otherwise disposed of without violating the Existing Senior Notes Documents, the
Refinancing Senior Notes Documents and the Secured Hedging Agreements, the
Mortgagee, at the request and expense of the Mortgagor, will release such
Property from this Mortgage in the manner provided in clause (a) above (it being
understood and agreed that upon the release of all or any portion of the
Property by the Mortgagee at the direction of the Lenders as provided above, the
Lien on the Property in favor of
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the Hedging Creditors, the Existing Senior Notes Creditors and the Refinancing
Senior Notes Creditors shall automatically be released).
(c) In addition to the foregoing, all Property shall be
automatically released (subject to reinstatement upon the occurrence of a new
Trigger Event) in accordance with the provisions of the last sentence of Section
7.10(b) of the Credit Agreement.
(d) At any time that the Mortgagor desires that the
Mortgagee take any action to give effect to any release of Property pursuant to
the foregoing Section 6.19(a), (b) or (c), it shall deliver to the Mortgagee a
certificate signed by an authorized officer describing the Property to be
released and certifying its entitlement to a release pursuant to the applicable
provisions of Sections 6.19(a), (b) or (c) and in such case the Mortgagee, at
the request and expense of the Mortgagor, will execute such documents (without
recourse and without any representation or warranty) as required to duly release
such Property. The Mortgagee shall have no liability whatsoever to any Secured
Creditor as the result of any release of Property by it as permitted by (or
which the Mortgagee in good faith believes to be permitted by) this Section
6.19. Upon any release of Property pursuant to Section 6.19(a), (b) or (c), so
long as no Noticed Event of Default is then in existence, none of the Secured
Creditors shall have any continuing right or interest in such Property, or the
proceeds thereof (subject to reinstatement rights upon the occurrence of a new
Trigger Event in the case of a release pursuant to Section 6.19(c)(i)).
6.20 Time of the Essence. Time is of the essence of this
Mortgage.
6.21 The Mortgagee's Powers. Without affecting the liability
of any other Person liable for the payment and performance of the Obligations
and without affecting the Lien of this Mortgage in any way, the Mortgagee
(acting at the direction of the requisite holders of the relevant Obligations
affected thereby) may, from time to time, regardless of consideration and
without notice to or consent by the holder of any subordinate Lien, right, title
or interest in or to the Property, (a) release any Persons liable for the
Obligations, (b) extend the maturity of, increase or otherwise alter any of the
terms of the Obligations, (c) modify the interest rate payable on the principal
balance of the Obligations, (d) release or reconvey, or cause to be released or
reconveyed, all or any portion of the Property, or (e) take or release any other
or additional security for the Obligations.
6.22 Rules of Usage. The following rules of usage shall apply
to this Mortgage unless otherwise required by the context:
(a) Singular words shall connote the plural as well as
the singular, and vice versa, as may be appropriate.
(b) The words "herein", "hereof and "hereunder" and words
of similar import appearing in each such document shall be construed to
refer to such document as a whole and not to any particular section,
paragraph or other subpart thereof unless expressly so stated.
(c) References to any Person shall include such Person
and its successors and permitted assigns.
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(d) Each of the parties hereto and their counsel have
reviewed and revised, or requested revisions to, such documents, and
the usual rule of construction that any ambiguities are to be resolved
against the drafting party shall be inapplicable in the construction
and interpretation of such documents and any amendments or exhibits
thereto.
(e) Unless an express provision requires otherwise, each
reference to "the Property" shall be deemed a reference to "the
Property or any part thereof", and each reference to "Secured Property"
shall be deemed a reference to "the Secured Property or any part
thereof".
6.23 No Off-Set. All sums payable by the Mortgagor shall be
paid without counterclaim, other compulsory counterclaims, set-off, or deduction
and without abatement, suspension, deferment, diminution or reduction, and the
Obligations shall in no way be released, discharged or otherwise affected
(except as expressly provided herein or in the Credit Agreement) by reason of:
(i) any damage or any condemnation of the Property or any part thereof; (ii) any
title defect or encumbrance or any eviction from the Property or any part
thereof by title paramount or otherwise; or (iii) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to the Mortgagee or the Mortgagor, or any action taken with
respect to this Mortgage by any agent or receiver of the Mortgagee. The
Mortgagor waives, to the extent permitted by law, all rights now or hereafter
conferred by statute or otherwise to any abatement, suspension, deferment,
diminution or reduction of any of the Obligations.
6.24 Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial. (a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS MORTGAGE OR
ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, THE MORTGAGOR HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE MORTGAGOR HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS PRENTICE-HALL CORPORATION SYSTEM, INC., WITH
OFFICES ON THE DATE HEREOF AT 80 STATE STREET, ALBANY, NEW YORK 12207-2543 AS
ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON
ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL
PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION
OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE
TO BE AVAILABLE TO ACT AS SUCH, THE MORTGAGOR SHALL DESIGNATE A NEW DESIGNEE,
APPOINTEE AND AGENT IN THE STATE OF NEW YORK ON THE TERMS AND FOR THE PURPOSES
OF THIS PROVISION SATISFACTORY TO THIS MORTGAGE. THE MORTGAGOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE
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PREPAID, TO THE MORTGAGOR AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 6.03
HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE
MORTGAGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR ANY OTHER CREDIT DOCUMENT THAT SERVICE OF
PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT UNDER THE CREDIT AGREEMENT, ANY LENDER OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY
OTHER JURISDICTION INCLUDING, BUT NOT LIMITED TO THE JURISDICTION WHERE THE
PROPERTY IS LOCATED WITH RESPECT TO THE CREATION, PERFECTION AND ENFORCEMENT OF
THE LIEN AND SECURITY INTEREST GRANTED BY THIS MORTGAGE.
(b) THE MORTGAGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
MORTGAGE OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS MORTGAGE HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
6.25 Future Advances. This Mortgage is given to secure the
Mortgagor's obligations under, or in respect of, the Credit Documents, the
Existing Senior Notes Documents and the Refinancing Senior Notes Documents to
which the Mortgagor is "party" and shall secure not only obligations with
respect to presently existing indebtedness under the foregoing documents and
agreements but also any and all other indebtedness now owing or which may
hereafter be owing by the Mortgagor or the Borrower, as the case may be, to the
Secured Creditors, however incurred, whether interest, discount or otherwise,
and whether the same shall be deferred, accrued or capitalized, including future
advances and re-advances, pursuant to the Credit Agreement, whether such
advances are obligatory or to be made at the option of the Lenders, or
otherwise, to the same extent as if such future advances were made on the date
of the execution of this Mortgage. The lien of this Mortgage shall be valid as
to all indebtedness secured hereby, including future advances, from the time of
its filing for record in the recorder's office of the county in which the
Property is located. This Mortgage is intended to and shall be valid and have
priority over all subsequent liens and encumbrances, including statutory liens,
excepting
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solely taxes and assessments levied on the real estate, to the extent of the
maximum amount secured hereby, and Permitted Encumbrances. Although this
Mortgage is given wholly or partly to secure all future obligations which may be
incurred hereunder and under the other Secured Debt Agreements, whether
obligatory or optional, the Mortgagor and the Mortgagee hereby acknowledge and
agree that the Mortgagee and the other Secured Creditors are obligated by the
terms of the Secured Debt Agreements to make certain future advances, including
advances of a revolving nature, subject to the fulfillment of the relevant
conditions set forth in the Secured Debt Agreements.
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The laws of South Carolina provide that in any real estate
foreclosure proceeding a defendant against whom a personal judgment may be taken
or asked may within thirty days after the sale of the mortgaged property apply
to the court for an order of appraisal. The statutory appraisal value as
approved by the court would be substituted for the high bid and may decrease the
amount of any deficiency owing in connection with the transaction. THE
UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH
MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT
REGARDLESS OF ANY APPRAISED VALUE OF THE PROPERTY.
IN WITNESS WHEREOF, this Mortgage, Security Agreement,
Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing
has been duly executed by the Mortgagor as of the date first written above.
Signed, sealed, and delivered in R. J. REYNOLDS TOBACCO COMPANY,
presence of North Carolina corporation
/s/ Mr. Dara Folan
--------------------
Mr. Dara Folan, III By: /s/ Lynn L. Lane
-------------------
/s/ Alexandre Brodbeck Its: SVP and Treasurer
-----------------------
Alexandre Brodbeck
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STATE OF NEW YORK )
) ACKNOWLEDGMENT
COUNTY OF NEW YORK )
I, Jonathan J. Katz a Notary Public in and for the County and State aforesaid,
certify that Lynn L. Lane, the Senior Vice President and Treasurer of R. J.
Reynolds Tobacco Company, a North Carolina corporation, the Mortgagor,
personally appeared before me this day and acknowledged the execution of the
foregoing instrument by her on behalf of the Mortgagor.
WITNESS my hand and official stamp or seal this 30th day of July, 2004.
/s/ JONATHAN J KATZ
--------------------------------
Notary Public for New York
My Commission Expires: 8/11/2007
Jonathan J. Katz
Notary Public, State of New York
Commission # 0 1 KA6096856
Qualified In New York County
Commission Expires August 11, 2007
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EXHIBIT A
DESCRIPTION OF LAND
ALL that piece, parcel or tract of land with improvements thereon lying, situate
and being in the County of Cherokee, State of South Carolina, shown and
designated as Tracts No. 1, 2, 3, 4, 5, 6, 7, 8 and 10 on plat of property of
Daniel Construction Company prepared by Davis and Floyd Engrs., Inc., dated 27
September, 1962, recorded in the office of the Clerk of Court for Cherokee
County in Book 4X at page 244, and being more particularly described with
reference to said plat as follows:
BEGINNING at the northwestern corner of said tract at a point on the
southeasterly side of Frontage Road of Interstate Highway 85 and running thence
along the southeasterly side of said Frontage Road, N. 54-02 E. 784.81 feet to a
point; thence N. 54-02 E. 291.70 feet to a concrete monument; thence N. 54-12 E.
437.50 feet to a point; thence N. 54-12 E. 242.26 feet to a point; thence N.
54-12 E. 18.70 feet to a concrete monument; thence N. 48-07 E. 49.52 feet to a
point; thence N. 48-07 E. 47.10 feet to a concrete monument; thence N. 54-10 E.
602.86 feet to a concrete monument; thence S. 37-00 E. 10.21 feet to a concrete
monument; thence N. 54-29 E. 408.05 feet to a concrete monument; thence along
said Frontage Road in a curve the following courses and distances, to-wit: N.
61-47 E. 100.00 feet; N. 84-31 E. 100.00 feet; S. 81-14 E. 100.00 feet; and S.
78-54 E. 236.85 feet to a point; thence continuing along said road, S. 78-54 E.
22.20 feet to a concrete monument; thence N. 78-50 E. 61-58 feet to a point;
thence turning and running S. 58-44 E. 73.75 feet to a point on the westerly
side of South Carolina Highway 99; thence along the westerly side of said
highway, S. 16-16 E. 553.84 feet to a point; thence S. 15-38 E. 135.50 feet to a
point; thence S. 15-38 E. 31.71 feet to a point; thence S.13-42 E. 117.21 feet
to a point; thence S. 12-37 E. 125.75 feet to a point at the intersection of
said South Carolina Highway 99 and property of the Southern Railway System;
thence turning and running along the northwesterly side of said railway
property, S. 41-55 W. 275.02 feet to a point; thence S. 41-55 W. 400.21 feet to
a point; thence S. 41-39 W. 166.49 feet to a point; thence S. 41-39 W. 288.64
feet to a point; thence continuing along a curve in said railway property, the
chords of which are as follows: S. 34-25 W. 235.69 feet; S. 27-46 W. 300.00
feet; S. 16-55 W. 425.71 feet to a point; thence S. 4-56 W. 17.39 feet to a
point; thence S. 4-56 W. 116.09 feet to a point; thence turning and running S.
26-25 W. 493.00 feet to a point; thence turning and running S. 72-42 W. 538.43
feet to a point; thence N. 40-34 W. 1642.78 feet to a point; thence N. 56-09 W.
298.90 feet to a point; thence N. 15-51 E. 115.50 feet to a point; thence N.
21-10 W. 209.01 feet to the beginning corner, containing 133.26 acres, more or
less.
ALSO, ALL that piece, parcel or tract of land with improvements thereon lying,
situate and being in the County of Cherokee, State of South Carolina, shown and
designated as Tract No. 9 on plat above referred to, less two portions of said
tract heretofore conveyed by the grantor herein to Arail A. Thomas and Horace W.
Burgess, which portions conveyed out are shown and designated as Tracts A and C,
and the remaining portion conveyed herein is shown and designated as Tract B on
separate plat of property of Daniel Construction Company prepared by Davis and
Floyd Engrs., Inc., dated 29 September 1962, recorded in the office of the Clerk
of Court for Cherokee County in Book 4X at page 261, and being more particularly
described with reference to said latter plat as follows:
BEGINNING at an iron pin on the easterly side of the South Carolina Highway 99,
joint front corner of Tracts C and B, and running thence along the easterly side
of said highway, N. 16-18 W. 284.00 feet to an iron pin, joint front corner of
Tracts A and B; thence along the common line of said tracts, N. 73-42 E. 478.24
feet to iron pin in property line of Frank and Edwina D. Neal; thence S. 19-34
E. 284.44 feet to an iron pin joint rear corner of Tracts B and C; thence along
the common line of said tracts, S. 73-42 W. 494.45 feet to an iron pin, the
point of beginning, containing 3.17 acres, more or less.
TOGETHER with all the right, title and interest of the grantor in and to the
following properties: that property lying between the center line of Interstate
Highway 85 and the northwesterly boundary of property hereinabove described;
also that property lying between the center line of the Southern Railway System
and the southeasterly boundary of property herein-above described; and also that
property lying within the right of way of South Carolina Highway 99 adjoining
Tracts 7 and 8 on the east and Tract 9 on the west, less the right, title and
interest to portions of same granted to Arail A. Thomas and Horace W. Burgess in
deeds above referred to.
Continued
EXHIBIT "A" CONTINUED
TOGETHER with all right, title and interest in and to that certain lease of
water rights, and all other rights leased therein, executed by Arail A. Thomas
to C. C. Moorhead, Jr., dated March 27, 1961, recorded in the office of the
Clerk of Court for Cherokee County in Volume 4X at page 174 and later assigned
by deed of Columbus C. and Margaret O. Moorhead, Jr. dated September 28, 1962,
and recorded in Volume 5N at page 101.
This being the same property conveyed to the Brown & Williamson U.S.A., Inc. by
deed of Brown & Williamson Tobacco Corporation recorded
on___________________________, 2004 in the Office of the Register of Deeds for
Cherokee County in Deed Book____________at Page________. Brown & Williamson USA,
Inc., by merger and name change, is now known as R. J. Reynolds Tobacco Company,
the Mortgagor herein.
Tax Map Number 191-00-00-027.00
SCHEDULE 1
CREDIT AGREEMENT LOANS
The Credit Document Obligations secured by this Mortgage are evidenced by the
Credit Agreement (including the Mortgagor's obligations under the Subsidiary
Guaranty), which provides that the Mortgagor is obligated for the payment and
performance of, without limitation, the following: (i) Revolving Loans in the
original aggregate principal amount of up to $486,250,000 and having final
maturity dates no later than February 13, 2006 (or, if the Existing Senior Notes
due on May 15, 2006 have been refinanced in full with the proceeds of a new
issuance or issuances of Refinancing Senior Notes in an aggregate principal
amount equal to at least the aggregate principal amount of such Existing Senior
Notes so refinanced on or prior to February 13, 2006, January 30, 2007), as such
date may be extended for such Lender pursuant to Section 1.13 of the Credit
Agreement (the "Revolving Loan Maturity Date"); (ii) Swingline Loans in the
original aggregate principal amount of up to $60,000,000, and having a final
maturity date no later than five business days prior to the Revolving Loan
Maturity Date. The Parent and/or one or more of its Subsidiaries may enter into
Interest Rate Protection Agreements and Other Hedging Agreements (together with
the Existing Interest Rate Swap Agreement), and the Borrower may also request
Letters of Credit in accordance Section 2 of the Credit Agreement.
ii