Document:

mortgage.htm

 

 

EXHIBIT

 

 

 

 

Prepared by and after recording return to:

 

White & Case LLP

1155 Avenue of the Americas

New York, New York 10036

Attention: Leila Rachlin, Esq.

 

MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT

AND FIXTURE FINANCING STATEMENT

FROM

KANSAS STAR CASINO, LLC

TO

U.S. BANK NATIONAL ASSOCIATION, AS COLLATERAL AGENT

______________________

 

Dated as of May 19, 2011

 

Relating to Premises in:

Sumner County, Kansas

 

NOTICE:  THE AGGREGATE MAXIMUM PRINCIPAL AMOUNT OF INDEBTEDNESS THAT MAY BE SECURED BY THIS INSTRUMENT IS $21,125,000.00 AS SET FORTH IN SECTION 6.19 HEREOF.

 

	
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MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT

 

This Mortgage, Assignment of Rents, Security Agreement and Fixture Financing Statement (this “Mortgage”) is made as of May 19, 2011, by Kansas Star Casino, LLC, a Kansas limited liability company (the “Company”), in favor of U.S. Bank National Association, as collateral agent (the “Collateral Agent”) under the Indenture dated as of August 6, 2009 (as it may be amended, restated or otherwise supplemented from time to time, the “Indenture”) among Peninsula Gaming, LLC, a Delaware limited liability company (“PGL”), Peninsula Gaming Corp., a Delaware corporation (“PGC” and, together with PGL, the “Issuers”), each Subsidiary Guarantor (as defined therein) party thereto, and U.S. Bank National Association, as Trustee and Collateral Agent.

 

RECITALS

 

WHEREAS, the Company is the sole owner of a fee simple interest for certain premises located in Sumner County, Kansas and more particularly described on Exhibit A attached hereto (hereinafter referred to as the “Real Property”);

 

WHEREAS, pursuant to the Indenture the Issuers have issued their 8.375% Senior Secured Notes due 2015 (together with any replacements thereof provided in the Indenture, any other senior secured notes issued from time to time under the Indenture and as the same may be amended or supplemented from time to time hereafter, the “Notes”) in the aggregate principal amount of $320,000,000, subject to increase as provided in the Indenture and maturing on August 15, 2015;

 

WHEREAS, pursuant to the Third Supplemental Indenture dated as of January 31, 2011 among the Company, the Issuers and U.S. Bank National Association, as Trustee and Collateral Agent, the Company has become a “Subsidiary Guarantor” under the Indenture with the same force and effect as if originally named therein as a “Subsidiary Guarantor”; and

 

WHEREAS, the Indenture provides that to secure performance by the Company of its obligations under the Indenture, including the guarantee of payment of the Notes, the Company will execute and deliver this Mortgage to the Collateral Agent.  The Indenture, this Mortgage, the Security Documents and any other document referred to in or made with reference to the Notes are hereby incorporated by reference, and are sometimes collectively referred to as “Transaction Documents.”  Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Indenture.

 

GRANTING CLAUSES

 

NOW, THEREFORE, in consideration of ten dollars and other good and valuable consideration, the receipt of and sufficiency of which are hereby acknowledged, and to secure the Obligations, including, without limitation, the following:

 

(i) the Company’s guarantee of the prompt and complete payment or performance in full when due, whether at stated maturity, by required redemption, by

 

	
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(ii) prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Law, 11 U.S.C. §362(a) (and any successor provision thereof)), of all Obligations (as defined in the Indenture) under the Notes and all other present and future obligations, contingent or otherwise of the Company arising under or pursuant to the Indenture Documents (as defined in the Indenture);

 

(iii) the Company’s guarantee of payment if and when due of (a) the Change of Control Payment (as defined in the Indenture), in an amount not to exceed such amount calculated in accordance with Section 4.15 of the Indenture, and (b) amounts due in connection with an Excess Proceeds Offer (as defined in the Indenture) in an amount not to exceed such amount calculated in accordance with Section 4.13 of the Indenture, in either case together with interest thereon as set forth in the Indenture, and premiums and penalties, if any, thereon,

 

(iv) all other sums that may or shall become due hereunder, in connection with the Notes or under the other Transaction Documents, including the costs and expenses of enforcing any provision of any of the foregoing documents or any extensions or modifications of the Notes or any substitutions therefor,

 

(v) the reimbursement to the Collateral Agent of all monies which may be advanced as herein provided and of any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred or paid on account of any litigation at law or in equity that may arise in respect of this Mortgage or the obligations secured hereby or the lands and premises and other property herein mentioned or in obtaining possession of said lands and premises and other property after any sale that may be made as hereinafter provided,

 

(vi) the payment by the Company to the Collateral Agent of all sums, if any, as may be duly expended or advanced by the Collateral Agent in the performance of any obligation of the Company as provided hereunder,

 

(vii) the payment of any and all other indebtedness that this Mortgage by its terms secures and

 

(viii) the performance and observance of the covenants, agreements and obligations of the Company contained herein and in the other Transaction Documents

 

(all obligations and sums included in the foregoing clauses (i), (ii), (iii), (iv), (v), (vi) and (vii) being hereinafter collectively referred to as the “Secured Obligations”), and in order to charge with such performance and with such payments said lands and premises and other property hereinafter described and the rents, revenues, issues, income and profits thereof, the Company does hereby mortgage and warrant, affect, hypothecate, to inure to the use and benefit of the Collateral Agent (as collateral agent under the Indenture), and its successors and assigns, all right, title and interest of the Company now or hereafter owned or leased, in, to or under, or derived from each and all of the following properties, estates, rights, titles and interests (collectively, the “Mortgaged Property”):

 

 

	
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the Real Property and all tenements, hereditaments, appurtenances, estates and rights in and to any of the Real Property and all component parts of the Real Property;

 

(a) all buildings, improvements and other structures now or hereafter located on any of the Real Property (the “Improvements”);

 

(b) all of the Company’s right, title and interest in and to all servitudes, easements, rights-of-way, gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water rights and powers, and all estates, rights, title, interests, privileges, liberties, prescriptions, advantages and appurtenances of any nature whatsoever, in any way belonging, relating or pertaining to any of the Real Property or the Improvements;

 

(c) all of the Company’s right, title and interest in and to any right to purchase, or to use and occupy, any land adjacent to any of the Real Property and any land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining any of the Real Property;

 

(d) all of the Company’s right, title and interest, to all machinery, apparatus, equipment, fittings, fixtures and other property of every kind and nature whatsoever now or hereafter located upon any of the Real Property or the Improvements, and all component parts of any building or other construction located on any of the Real Property or appurtenances thereto, and used in connection with the operation and occupancy of any of the Real Property or the Improvements, and all building equipment, material and supplies of any nature whatsoever now or hereafter located in or upon any of the Real Property or the Improvements, including, without limitation, all metals, lumber and lumber products, bricks, stones, building blocks, sand, cement, roofing materials, paint, doors, windows, hardware, wires, wiring and other building materials and any building equipment, materials and supplies obtained for use in connection with any of the Real Property or the Improvements and all additions, replacements, modifications and alterations of any of the foregoing, including, but without limiting the generality of the foregoing, all heating, lighting incinerating and power equipment, engines, pipes, tanks, motors, conduits, switchboards, plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating, ventilating and communications apparatus, air cooling and air conditioning apparatus, elevators, ducts and compressors and all other equipment and fixtures (collectively, the “Fixtures”).  The Company acknowledges that all Fixtures are part and parcel of the real estate and appropriated to the use of the real estate and, whether or not affixed or annexed to the Improvements, shall for the purpose of this Mortgage be deemed conclusively to be real estate and mortgaged hereby;

 

(e) all of the Company’s right, title and interest to all plans and specifications for the Real Property and the Improvements, all contracts with architects and engineers responsible for the design of the Improvements, the preparation or evaluation of any of such plans and specifications or the supervision of the construction of any of the Improvements, all contracts to which

 

 

	
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(f) the Company is now or hereafter a party providing for the connection therewith or the furnishing or installation of any Fixtures or other personal property in connection therewith, all contracts to which the Company is now or hereafter a party providing for the management of the construction of any of the Improvements, all rights of the Company as a third party beneficiary under all contracts and subcontracts pertaining to the Real Property or the Improvements as to which the Company is not a party, all payment and performance bonds relating to the Real Property or the Improvements and all other contracts and agreements related to the design, management, construction, equipping and development of the Real Property or the Improvements (collectively, the “Construction Documents”);

 

(g) all of the Company’s right, title and interest to all awards or payments, and any interest paid or payable with respect thereto, that may be made with respect to all or any portion of the Real Property, the Improvements or the Fixtures, whether from the exercise of right of condemnation, eminent domain or similar proceedings (including any transfer made in lieu of the exercise of said right), or from any taking for public use, or for any other injury to or decrease in the value of all or any portion of the Real Property, the Improvements or the Fixtures, or as a result of the exercise by any governmental authority of any right or option to purchase any of the Real Property, all of the foregoing to be held, applied and paid in accordance with the provisions of this Mortgage (collectively, the “Eminent Domain Awards”);

 

(h) all of the Company’s right, title and interest to all proceeds of, and any unearned premiums on, any insurance policies covering all or any portion of the Real Property, the Improvements or the Rents (as hereinafter defined), including, without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to all or any portion of the Real Property or the Improvements and any interest actually paid with respect thereto, all of the foregoing to be held, applied and paid in accordance with the provisions of this Mortgage (collectively, the “Insurance Proceeds”);

 

(i) all of the Company’s right, title and interest as lessor or landlord to all leases and other agreements affecting the use or occupancy of any of the Real Property or the Improvements now in effect or hereafter entered into (including, without limitation, subleases (including licenses, concessions, tenancies and other occupancy agreements covering or encumbering all or any portion of the Real Property or the Improvements), but excluding any licenses and permits to the extent not assignable under applicable law, including without limitation, liquor and gaming licenses, together with any modifications, extensions or renewals of the same (collectively, the “Space Leases”) and the rents, revenues, issues, income, products and profits of the Real Property and the Improvements, including, without limitation, any security deposits or other funds deposited with the Company pursuant to the Space Leases (collectively, the “Rents”), together with any guarantees of the Space Leases or Rents delivered to the Company from

 

 

	
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(j) time to time, and any modifications, extensions and renewals of any such guarantees, together with the right, but not the obligation, to exercise options, to give consents and to collect, receive and receipt for the Rents and apply the Rents to the payment of the Secured Obligations and to demand, sue for and recover the Rents (when due and payable), subject to a license in favor of the Company in respect thereof prior to the occurrence of an Event of Default (as defined in Section 5.1 hereof); and

 

(k) any and all other, further or additional rights, title, estates and interests of the Company in and to any of the Real Property or the Improvements or the Fixtures, and all renewals, substitutions and replacements of and all additions and appurtenances to any of the Real Property or the Improvements or the Fixtures or constructed, assembled or placed on any of the Real Property or the Improvements, and all conversions of the assemblage, placement or conversion, as the case may be, and in each such case without any further mortgage, conveyance, assignment or other act by the Company, shall become subject to the lien of this Mortgage as fully and completely, and with the same effect, as though now owned by the Company, the Company expressly agreeing that if the Company shall at any time acquire any other right, title, estate or interest in and to any of the Real Property, the Improvements or the Fixtures, the lien of this Mortgage shall automatically attach to and encumber such other right, title, estate or interest as a lien thereon.

 

AND, as additional security, the Company hereby grants to the Collateral Agent a continuing security interest in (a) the Fixtures, (b) the Construction Documents, (c) the Insurance Proceeds, (d) the Eminent Domain Awards, (e) the Space Leases, (f) the Rents, (g) all proceeds of the foregoing, (h) all proceeds of any of the Real Property and the Improvements, and (i) the rights described in clauses “c” and “d” of the definition of Mortgaged Property herein ((a)-(i), collectively, the “Security Interests Property”) and this Mortgage shall be effective as a security agreement pursuant to the Uniform Commercial Code as enacted and in effect in the state in which any of the Real Property is located (the “Code”).

 

HABENDUM

 

TO HAVE AND TO HOLD the Mortgaged Property, the rights and privileges hereby conveyed or assigned, or intended so to be, unto the Collateral Agent (as collateral agent under the Indenture), its successors and assigns, forever for the uses and purposes and subject to the terms and conditions herein set forth.

 

SUBJECT, HOWEVER, to Permitted Liens.

 

PROVIDED NEVERTHELESS, should the Company pay and perform all the Secured Obligations in accordance with the Indenture and the Security Documents, then these presents will be of no further force and effect, and this Mortgage shall be satisfied by the Collateral Agent, at the expense of the Company.

 

The Company FURTHER agrees as follows:

 

 

	
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COVENANTS

 

1.1. Performance of Obligations.  The Company shall pay and perform the Secured Obligations.  Time is of the essence hereof.

 

1.2. Further Assurances.  If the Collateral Agent requests, the Company shall sign and deliver and cause to be recorded as the Collateral Agent shall reasonably direct any further mortgages, instruments of further assurance, certificates and other documents as the Collateral Agent may consider reasonably necessary or desirable in order to perform, perfect, continue, and preserve the obligations of the Company under the Transaction Documents.  The Company further agrees to pay to the Collateral Agent, upon demand, all costs and expenses incurred by the Collateral Agent in connection with the preparation, execution, recording, filing and refiling of any such documents, including attorneys’ fees that are reasonable and title opinion or title insurance costs.

 

1.3. Operation and Maintenance; Compliance with Laws.  The Company shall cause the Mortgaged Property to be maintained in normal working order and condition, reasonable wear and tear excepted, and the Company shall make all necessary repairs, renewals, replacements, additions, betterments and improvements thereto, as shall be reasonably necessary for the proper conduct of the business of the Company.  The Company shall comply or cause compliance with all laws, ordinances and regulations of any governmental authority with reference to the Mortgaged Property and the manner of using or operating the same, including any Environmental Laws or Regulations and Accessibility Regulations, as hereafter defined, and with any restrictive covenants affecting the title to the Mortgaged Property, and with the terms of all insurance policies relating to the Mortgaged Property.

 

1.4. Payment of Utilities, Impositions, Liens.  The Company shall pay or cause to be paid when due all charges or fees for utilities and services supplied to the Mortgaged Property.  The Company, at least five (5) days before any penalty attaches thereto, shall pay and discharge, or cause to be paid and discharged, all taxes, assessments and governmental charges or levies (collectively, “Impositions”) imposed upon or against it, its income or profits, the Mortgaged Property or rents therefrom, or upon or against the Secured Obligations, or upon or against the interest of the Collateral Agent in the Mortgaged Property or the Secured Obligations, except Impositions measured by the income of the Collateral Agent.  The Company shall provide evidence of such payment at the Collateral Agent’s request.  This Mortgage is and shall be maintained by the Company as a valid mortgage lien and security interest in the Mortgaged Property, subject only to the Permitted Liens and such other matters as may be expressly permitted under the Indenture.  Except as otherwise provided in the Indenture, the Company shall not, directly or indirectly, create or suffer, or permit to be created or suffered, against the Mortgaged Property or any part thereof, and the Company will promptly discharge any Lien or other Imposition that may affect the Mortgaged Property or any part thereof, or any interest therein, except the Permitted Liens.  If any Lien not permitted hereunder is filed, the Company will cause the same to be discharged pursuant to the terms of the Indenture.

 

 

	
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Insurance.

 

(a) The Company shall maintain insurance on the Mortgaged Property as specified in Section 4.18 of the Indenture.

 

(b) In the event that the Company fails to keep the Real Property and the Improvements insured in compliance with this Section, the Collateral Agent may, but shall not be obligated to, obtain insurance and pay the premiums therefor, and the Company shall, on demand, reimburse the Collateral Agent for all sums advanced and expenses incurred in connection therewith.  Such sums and expenses, together with interest thereon at the Additional Interest Rate, shall be deemed part of the Secured Obligations and secured by the lien of this Mortgage.

 

(c) Subject to the provisions of Section 3.1 hereof, nothing contained in this Section or elsewhere in this Mortgage shall relieve the Company of its duty to maintain, repair, replace or restore the Improvements or the Fixtures or rebuild the Improvements, from time to time, in accordance with the applicable provisions of the Transaction Documents, and nothing in this Section or elsewhere in this Mortgage shall relieve the Company of its duty to pay the Secured Obligations, which shall be absolute, regardless of the occurrence of damage to, destruction of or condemnation of all or any portion of the Mortgaged Property.

 

1.5. Books and Records: Financial Information

 

.  The Company shall (i) keep complete and accurate books and records with respect to the Mortgaged Property; (ii) permit the Collateral Agent to inspect such books and records during normal business hours and make copies thereof at the Collateral Agent’s expense; and (iii) provide the Collateral Agent such information as the Collateral Agent may from time to time reasonably request concerning the operations and financial affairs of the Company and the Mortgaged Property, including, if requested, audited annual financial statements and quarterly operating statements.

 

1.6. Mortgage, Sale, Lease of the Mortgaged Property.

 

(a) Except as otherwise expressly permitted under the Transaction Documents or as otherwise expressly permitted hereunder, the Company will not, now or in the future, mortgage, pledge or encumber or place any Lien or encumbrance (or permit the same to exist) on the Mortgaged Property, or any part thereof, without the prior written consent of the Collateral Agent, except for Permitted Liens.

 

(b) Except as otherwise expressly permitted under the Transaction Documents or as otherwise expressly permitted hereunder, the Company shall not sell, convey, transfer or otherwise alienate in any manner, whether directly or indirectly, any right, title or interest in the Mortgaged Property, or any part thereof except as expressly permitted under the Indenture, without obtaining in each such instance the prior written consent of the Collateral Agent based upon a direction from a majority of Holders.

 

 

	
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(c) Except as otherwise expressly permitted under the Transaction Documents or as otherwise expressly permitted hereunder, the Company shall not, without the Collateral Agent’s prior consent (based upon a direction of a majority of Holders), enter into any agreement with or conveyance to any other person or entity permitting the use of any excess development rights that might otherwise be used by the Company in expanding, altering, reconstructing, replacing or otherwise improving the Improvements or making any other improvements on the Mortgaged Property, or otherwise permit or suffer any change of the zoning of the Mortgaged Property or the use that may be made thereof.

 

1.7. Environmental - ADA.  The Company agrees:

 

(a) Except for substances normally used for maintenance or operation of the Mortgaged Property which are used, stored and disposed of in compliance with all applicable Environmental Laws or Regulations (as defined below), the Company shall not, nor shall it permit others to, place, store, locate, generate, produce, create, process, treat, handle, transport, incorporate, discharge, emit, spill, release, deposit or dispose of any Hazardous Substance (as defined below) in, upon, under, over or from the Mortgaged Property.  The Company shall cause all Hazardous Substances found on or under the Mortgaged Property, which are not permitted under the foregoing sentence, and which exist in quantities or locations which violate applicable Environmental Laws or Regulations, to be properly removed therefrom and properly disposed of at another location at the Company’s cost and expense.  The Company shall not install or permit to be installed any underground storage tanks on or under the Mortgaged Property.  If the Collateral Agent shall reasonably request, the Company shall at its cost obtain and deliver to the Collateral Agent an environmental review, audit, assessment and/or report relating to the Mortgaged Property or shall have any previously delivered materials updated and/or amplified, by an engineer or scientist acceptable to the Collateral Agent; provided, however, that so long as no Default or Event of Default has occurred and is continuing, the Company shall not be required to obtain and deliver to the Collateral Agent such environmental review, audit, assessment and/or report relating to the Mortgaged Property or have any previously delivered materials updated and/or amplified more frequently than once per calendar year.

 

(b) The Company shall comply in all material respects with all Accessibility Regulations (as defined below) which are applicable to the Mortgaged Property.  If the Collateral Agent shall reasonably request (based upon a direction of a majority of Holders), the Company shall at its cost obtain and deliver to the Collateral Agent an Accessibility Regulation compliance report relating to the Mortgaged Property or shall have any previously delivered materials updated and/or amplified, by a qualified consultant acceptable to the Collateral Agent; provided, however, that so long as no Default or Event of Default has occurred and is continuing, the Company shall not be required to obtain and deliver to the Collateral Agent such Accessibility Regulation compliance report relating to the Mortgaged Property or have any previously

 

 

	
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(c) delivered materials updated and/or amplified more frequently than once per calendar year.

 

(d) The Company shall, promptly after obtaining actual knowledge thereof, give notice to the Collateral Agent of: (i) any activity in violation of any applicable Environmental Laws or Regulations on or relating to the Mortgaged Property, (ii) any governmental or regulatory actions instituted or threatened under any Environmental Laws or Regulations or any Accessibility Regulations affecting the Mortgaged Property, (iii) all claims made or threatened by any third party against the Mortgaged Property relating to any Hazardous Substance or a violation of any Environmental Laws or Regulations or any Accessibility Regulations, and (iv) any discovery by the Company of any occurrence or condition on or under the Mortgaged Property or on or under any real property adjoining or in the vicinity of the Mortgaged Property which could subject the Company, the Collateral Agent or the Mortgaged Property to a claim under any Environmental Laws or Regulations or Accessibility Regulations.  Any such notice shall include copies of any written materials received by the Company.

 

(e) Any investigation, remedial or corrective action taken with respect to the Mortgaged Property shall be done under the supervision of a qualified consultant, engineer or scientist acceptable to the Collateral Agent who shall, at the Company’s cost and expense and at the completion of such investigation or action, provide a written report of such investigation or action to the Collateral Agent.

 

(f) If the Mortgaged Property has, or is suspected to have, asbestos or asbestos containing materials (“ACM”) which, due to its condition, location and/or planned building renovation or demolition, is recommended to be abated by repair, encapsulation, removal or other action, the Company shall at its cost and expense promptly carry out the recommended abatement action.  If the recommended abatement includes removal of ACM, the Company shall cause the same to be removed and disposed of offsite by a licensed and experienced asbestos removal contractor, all in accordance with Environmental Laws or Regulations.  Upon completion of the recommended abatement action, the Company shall deliver to the Collateral Agent a certificate, signed by an officer of the Company and the consultant overseeing the abatement action, certifying to the Collateral Agent that the work has been completed in compliance with all applicable laws, ordinances, codes and regulations (including without limitation those regarding notification, removal and disposal) and that no airborne fibers beyond permissible exposure limits remain on site.  The Company shall develop and implement an Operations and Maintenance Program (as contemplated by Environmental Protection Agency guidance document entitled “Managing Asbestos In Place: A Building Owner’s Guide to Operations and Maintenance Programs for Asbestos—Containing Materials”) for managing in place any ACM in the Mortgaged Property.  The Company shall deliver a complete copy of such Operations and Maintenance Program to the Collateral Agent and certify to the Collateral Agent that such Program has been implemented.

 

 

	
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(g) After the occurrence and during the continuance of an Event of Default, or if at any time there is a reasonable basis to believe that a violation of Environmental Laws or Regulations may have occurred on the Mortgaged Property or pursuant to Section 1.8(a) of this Mortgage, the Collateral Agent shall have the right, but not the obligation, after ten (10) days’ prior written notice to the Company, to have an environmental review, audit, assessment, testing program and/or report with respect to the Mortgaged Property performed or prepared by an environmental engineering firm selected by the Collateral Agent.  The Company shall reimburse the Collateral Agent for the cost incurred for each such action within ten (10) days following demand therefor by the Collateral Agent.  The amount shall accrue interest at the Additional Interest Rate (as defined in Section 5.2) from and including the date of disbursement by the Collateral Agent through the date of payment by the Company.

 

For purposes of this Mortgage, the following definitions shall apply:

 

“Environmental Laws or Regulations” means and includes the Federal Comprehensive Environmental Response, Compensation and Liability Act as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Federal Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq.; the Clean Water Act, 33 U.S.C. §§ 1321 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent it regulates occupational exposure to Hazardous Substances); and the Clean Air Act, 42 U.S.C. §§ 7401 et seq., all as the same may be from time to time amended, and any other federal, state, county, municipal, local or other statute, code, law, ordinance, regulation, requirement or rule which may relate to or protect human health or the environment, including, without limitation, all regulations promulgated by a regulatory body pursuant to any such statute, code, law or ordinance, and all as previously and in the future to be amended.

 

“Hazardous Substances” means asbestos, asbestos containing materials, urea formaldehyde, polychlorinated biphenyls, nuclear fuel or materials, chemical waste, radioactive materials, explosives, known carcinogens, petroleum products including but not limited to crude oil or any fraction thereof, natural gas, natural gas liquids, gasoline or synthetic gas, and any other waste, material, substance, pollutant or contaminant which would subject the owner of the Mortgaged Property to any damages, penalties, liabilities, or obligations under any applicable Environmental Laws or Regulations.

 

“Accessibility Regulations” means any law ordinance or regulation relating to accessibility of a facility or property for disabled, handicapped and/or physically challenged persons, including, without limitation, the Americans With Disabilities Act of 1991, as amended.

 

 

	
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REPRESENTATIONS AND WARRANTIES

 

The Company makes the following representations and warranties:

 

1.8. Existence and Powers.  The Company is a limited liability company duly created and validly existing and in good standing under the laws of the State of Kansas.  The Company has the power to own its property, to carry on its business and to execute and perform the Transaction Documents.  The Company has obtained all licenses and permits necessary to conduct its business in the manner presently conducted.

 

1.9. Ownership, Liens, Compliance with Laws.  The Company owns the Mortgaged Property free from all Liens and encumbrances except for the Permitted Liens and except for defects in title that do not interfere in any material respect with its ability to conduct its business or to utilize the Mortgaged Property for its intended purpose.  All applicable zoning and environmental, land use, subdivision, building, fire, safety or health laws, ordinances and regulations affecting the Mortgaged Property permit the current use and occupancy thereof, and the Company has obtained all necessary consents, permits and licenses required for such use.  The Company will comply with and satisfy all applicable formalities and provisions of the laws and regulations of the United States of America and the laws of the State of Kansas in order to perfect, establish and maintain this Mortgage, and any supplement or amendment hereto.

 

1.10. Authority, Consents.  The execution, delivery and performance of the Transaction Documents have been duly authorized by all necessary action of the Company.  Except for consents and approvals previously obtained, no consent or approval of, or exemption by, any person or entity, governmental or private, is required to authorize the execution, delivery and performance of the Transaction Documents or the validity thereof.

 

1.11. Binding Agreement.  The Transaction Documents are the valid and legally binding obligations of the Company enforceable against the Company in accordance with their respective terms, except to the extent limited by equitable principles or bankruptcy, insolvency or similar laws affecting the rights of creditors generally.

 

1.12. No Conflict, Default.  The execution, delivery and performance by the Company of the Transaction Documents will not violate or cause default under or permit acceleration of any material agreement to which the Company is a party or by which it or the Mortgaged Property is bound.  To the Company’s knowledge, it is not in default (beyond any applicable grace period) in the performance of any agreement, order, writ, injunction, decree or demand to which it is a party or by which it is bound.

 

1.13. Litigation.  There is no litigation, arbitration or other proceeding in process or to the Company’s knowledge pending or threatened against the Mortgaged Property or the Company except for (a) matters that are fully covered by insurance (subject to customary deductibles), and (b) matters arising after the date hereof that if decided adversely to the Company, reasonably could not be expected to have a materially adverse effect on the ability of the Company to fulfill its obligations under the Transaction Documents or on the condition, financial or otherwise, of the Company’s business, properties or assets.

 

 

	
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Use.  The Mortgaged Property is not homestead property nor is it agricultural property in agricultural use.

 

1.14. Utilities.  The Mortgaged Property is serviced by all necessary public utilities, and all such utilities are operational and have sufficient capacity.

 

1.15. Environmental.  To the Company’s knowledge:

 

(a) There is not located on, in, about, or under the Mortgaged Property any Hazardous Substances except for Hazardous Substances of the type ordinarily used, stored, or manufactured in connection with the ownership or operation of the Mortgaged Property as it is presently operated and such existing Hazardous Substances have been used, stored and manufactured in compliance with all Environmental Laws or Regulations.

 

(b) The Mortgaged Property is not presently used, and has not in the past been used as a landfill, dump, disposal facility, gasoline station or for the storage, generation, production, manufacture, processing, treatment, disposal, handling, transportation, or deposit of any Hazardous Substances, where such production, storage, generation, manufacturing, processing, treatment, disposal, handling, transportation or deposit was in violation, in any material respect, of applicable Environmental Law.

 

(c) There has not in the past been, and no present threat now exists of, a spill, discharge, emission or release of a Hazardous Substance in, upon, under, over or from the Mortgaged Property or from any other property which would have an impact on the Mortgaged Property.

 

(d) There are no past or present investigations, administrative proceedings, litigation, regulatory hearings or other action completed, proposed, threatened or pending, alleging noncompliance with or violation of any Environmental Laws or Regulations respecting the Mortgaged Property, relating to Hazardous Materials on, in, about or under the Mortgaged Property, or relating to any required environmental permits covering the Mortgaged Property.

 

(e) The Company has disclosed to the Collateral Agent all reports and investigations commissioned by the Company and relating to Hazardous Substances and the Real Property and the Improvements.

 

(f) There are not now, nor have there ever been, any above ground or underground storage tanks located in or under the Mortgaged Property.  There are no wells on or under the Mortgaged Property.

 

1.16. Mortgage Lien.  This Mortgage constitutes a valid mortgage and, upon proper recording hereof, will constitute a valid and perfected mortgage lien, and security interest in the Mortgaged Property (subject only to the Permitted Liens), and there are no defenses or offsets to the Company’s obligations pursuant to this Mortgage or the other

 

 

	
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Transaction Documents, including without limitation, the Company’s applicable obligations to pay and perform the Secured Obligations.

 

1.17. Tax Liens; Bankruptcy.  There are no federal, state or local tax claims or liens assessed or filed against the Company or the Mortgaged Property for taxes which are due and payable, unsatisfied of record or docketed in any court of the state in which the Real Property is located or in any other court located in the United States, and no petition in bankruptcy has ever been filed by the Company, or, to the Company’s knowledge, against the Company, and the Company has never made any assignment for the benefit of creditors or taken advantage of any insolvency act or any act for the benefit of debtors.

 

1.18. Damage; Eminent Domain Proceedings.  The Mortgaged Property has not been damaged or destroyed by fire or other casualty, and no condemnation or eminent domain proceedings have been commenced and none are pending with respect to the Mortgaged Property, and, to the Company’s knowledge, no such condemnation or eminent domain proceedings are about to be commenced.

 

ARTICLE 2

 

CASUALTY — CONDEMNATION

 

2.1. Damage or Destruction

 

.  During the period the Secured Obligations remain outstanding, in the event that the Real Property, the Improvements, or the Fixtures shall be damaged or destroyed in whole or in part, by fire or other casualty covered by insurance, the Company shall give prompt written notice thereof to the Collateral Agent.  At such time as such damage, destruction or casualty shall occur, the Insurance Proceeds shall be treated as an Event of Loss and shall be payable to the Collateral Agent and shall be released, applied and/or distributed in accordance with Sections 4.13 and 10.4 of the Indenture.  Upon the occurrence of an Event of Default which has not been waived in writing by the Holders in accordance with Section 9.2 of the Indenture, the Collateral Agent shall have the right to apply such Insurance Proceeds in accordance with Section 6.10 of the Indenture.  The Collateral Agent shall have the right to participate in any insurance proceeding at the Company’s expense, including reasonable attorneys’ fees and disbursements.

 

2.2. Condemnation.

 

(a) During the period the Secured Obligations remain outstanding, in the event that the Mortgaged Property, or any part thereof, shall be taken in condemnation proceedings or by exercise of the right of eminent domain, or by conveyance in lieu of condemnation, or as a result of the exercise by any governmental authority of any right or option to purchase (hereinafter collectively called “Proceedings”), the Collateral Agent shall have the right to participate in any such Proceedings at the Company’s expense, including reasonable attorneys’ fees and disbursements, and any Eminent Domain Awards that may be made or any proceeds thereof shall be released, applied and/or distributed in accordance with the terms of the Indenture.  The parties agree to execute any and all further documents that may be required in order to facilitate collection of any Eminent Domain Award and the making of any such deposit.

 

 

	
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(b) During the period the Secured Obligations remain outstanding, if there occurs a Proceeding, any Eminent Domain Awards payable in connection therewith shall be considered an Asset Sale and shall be released, applied and/or distributed in accordance with Sections 4.13 and 10.4 of the Indenture.

 

(c) Upon the occurrence of an Event of Default which has not been waived in writing by the Holders in accordance with Section 9.2 of the Indenture, the Collateral Agent shall have the right to apply such Eminent Domain Awards in accordance with Section 6.10 of the Indenture.

 

ARTICLE 3

 

LEASES AND RENTS

 

3.1. Space Leases, Rents and Cash Collateral.

 

(a) As additional collateral security for payment of the Secured Obligations, and cumulative of any and all rights and remedies herein provided, the Company hereby bargains, sells, transfers, assigns and sets over to the Collateral Agent for the benefit of the Holders, any and all Space Leases and Rents and any and all cash collateral to be derived from the Mortgaged Property, or the use and occupation thereof, or under any contract or bond relating to the construction or reconstruction of the Mortgaged Property, including all Rents, royalties, revenues rights, deposits (including security deposits) and benefits accruing to the Company under all Space Leases, and the right to receive the same and apply them against the Secured Obligations or against the Company’s other obligations hereunder or the Company’s obligations under the Transaction Documents, together with all Space Leases, contracts, bonds, leases and other documents evidencing the same now or hereafter in effect and all right of the Company thereunder.  Nothing contained in the preceding sentence shall be construed to bind the Collateral Agent to the performance of any of the provisions of any such Space Lease, contract, bond, lease or other documents or otherwise impose any obligation upon the Collateral Agent, except that the Collateral Agent shall be accountable for any money actually received pursuant to such assignment to the extent of its disposition thereof in a manner inconsistent with this Mortgage or the Transaction Documents.  The Company shall deliver to the Collateral Agent upon the Collateral Agent’s request an executed counterpart of each such Space Lease, contract, bond or other documents.  The assignment of said Space Leases, Rents, income profits, proceeds and cash collateral, and any of the aforesaid rights with respect thereto and to the contracts, bonds, leases and other documents evidencing the same, is intended to be and is an absolute present assignment from the Company to the Collateral Agent and not merely the passing of a security interest.

 

(b) So long as there shall exist no Event of Default hereunder which has not been waived in writing by the Holders in accordance with the Indenture, the Company shall have the right and license to exercise all rights, options and privileges extended to the lessor under the terms of the Space Leases, including,

 

 

	
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(c) without limitation, the right to collect all Rents.  The Company agrees to hold the same in trust and to use the same, first, in payment of the Secured Obligations, second, the Taxes and insurance premiums payable hereunder and all other charges on or against the Mortgaged Property and, third, to the expenses of the Company’s business in or on the Mortgaged Property.

 

(d) In the event of any such Event of Default which has not been so waived, the right and license set forth in subparagraph (b) of this Section shall be automatically revoked, and, thereafter, the Collateral Agent shall have the right and authority to exercise any of the rights or remedies referred to or set forth herein.  In addition, upon such an Event of Default, the Company shall promptly pay to the Collateral Agent (i) all rent prepayments and security or other deposits paid to the Company pursuant to any Space Leases and (ii) all charges for services or facilities or for escalations which were paid pursuant to any Space Leases to the extent allocable to any period from and after such Event of Default and any such sums received by the Collateral Agent shall be applied by the Collateral Agent in accordance with Section 6.10 of the Indenture.

 

(e) If the Company is not required to surrender possession of the Mortgaged Property hereunder in the event of any such Event of Default which has not been so waived, the Company will pay monthly in advance to the Collateral Agent, or to any receiver appointed to collect the same, the income, profits or proceeds received by the Company under any of the Space Leases.

 

(f) The Company will, upon the Collateral Agent’s request, execute, acknowledge and deliver to the Collateral Agent, in form approved by the Collateral Agent, one or more general or specific assignments of the lessor’s interest under any Space Lease (which are consistent with the foregoing provisions).  The Company will, on demand, pay to the Collateral Agent, or reimburse the Collateral Agent for the payment of, all reasonable costs or expenses incurred in connection with the preparation or recording of any such assignment.

 

(g) The Company will (i) perform or cause to be performed the lessor’s obligations under any Space Lease, (ii) enforce the performance by the lessee under its respective Space Lease of all of said lessee’s material obligations thereunder and (iii) give the Collateral Agent prompt notice and a copy of any notice of default, event of default, termination or cancellation sent or received by the Company.

 

(h) Except to the extent expressly permitted herein or under the other Transaction Documents, the Company will not, without the Collateral Agent’s written consent (based upon a direction of a majority of Holders), (i) assign, mortgage, pledge or otherwise transfer, dispose of or encumber, whether by operation of law or otherwise, any Space Lease or the Rents or other income thereunder or therefrom, (ii) accept or permit the acceptance of a prepayment of any Rents for more than one month in advance of the due dates therefor, (iii)

 

 

	
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(i) amend, modify or otherwise alter any Space Lease or (iv) cancel, terminate or accept a surrender of any Space Lease.

 

(j) The Company will from time to time, promptly upon the Collateral Agent’s request, prepare and deliver to the Collateral Agent such information concerning the Space Leases as the Collateral Agent shall request.

 

ARTICLE 4

 

DEFAULTS AND REMEDIES

 

4.1. Events of Default.  Each of the following shall constitute an Event of Default hereunder:

 

(a) the occurrence of an “Event of Default” as defined in Section 6.1 of the Indenture; or

 

(b) the failure of the Company to observe and perform any covenant, condition or agreement on its part to be observed or performed in this Mortgage (other than an occurrence which may sooner constitute an “Event of Default” under the Indenture) including, without limitation, the covenants contained in Article I herein for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied, given to the Company by the Collateral Agent.

 

4.2. Remedies.  Upon the occurrence of an Event of Default, all Secured Obligations, at the option of the Collateral Agent, shall be accelerated and become immediately due and payable upon notice to the Company.  The outstanding principal amount and the interest accrued thereon of the Secured Obligations shall be due and payable without presentment, demand or further notice of any kind, all of which are hereby expressly waived by the Company.  The Company will pay to the Collateral Agent the entire Secured Obligations or portions thereof, as applicable, and to the extent permitted by law, the premiums and penalties, if any, provided in this Mortgage and each other Transaction Document, as applicable, and such payment shall be applied in accordance with Section 6.10 of the Indenture.

 

In the event of any Event of Default, whether or not an acceleration shall occur, the Collateral Agent shall have the right to proceed to protect and enforce its rights by one or more of the following remedies:

 

(a) THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO BRING SUIT either for damages, specific performance of any agreement contained in any Transaction Document, or for the foreclosure of this Mortgage, or for the enforcement of any other appropriate legal or equitable remedy.

 

(b) THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO OBTAIN A RECEIVER at any time after an Event of Default, whether or not an action for foreclosure has been commenced.  Any court having jurisdiction shall at the request of the Collateral Agent following an Event of Default appoint a receiver to take immediate possession of the Mortgaged Property and to rent or

 

 

	
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(c) operate the same as he may deem best for the interest of all parties concerned, and such receiver shall be liable to account to the Company only for the net profits, after application of rents, issues and profits upon the costs and expenses of the receivership and upon the Secured Obligations.

 

The Collateral Agent shall have the right, at any time to advance money to the receiver to pay any part or all of the items which the receiver should otherwise pay if cash were available from the Mortgaged Property and sums so advanced, with interest (“Additional Interest”) at the per annum rate equal to the interest rate then borne by the Notes (the “Additional Interest Rate”), shall be secured hereby, or if advanced during the period of redemption shall be a part of the sum required to be paid to redeem from the sale.

 

(d) THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO COLLECT THE RENTS from the Mortgaged Property and apply the same in the manner hereinbefore provided with respect to a receiver.  For that purpose, the Collateral Agent may enter and take possession of the Mortgaged Property and manage and operate the same and take any action which, in the Collateral Agent’s judgment, is necessary or proper to collect the Rents and to conserve the value of the Mortgaged Property.  The Collateral Agent may also take possession of, and for these purposes use, any and all of the Security Interests Property.  The expense (including any receiver’s fees, attorneys’ fees, costs and agent’s compensation) incurred pursuant to the powers herein contained shall be secured by this Mortgage.  The Collateral Agent shall not be liable to account to the Company for any action taken pursuant hereto other than to account for any Rents actually received by the Collateral Agent.  Enforcement hereof shall not cause the Collateral Agent to be deemed a Collateral Agent in possession unless the Collateral Agent elects in writing to be a Collateral Agent in possession.

 

(e) THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO ENTER AND TAKE POSSESSION of the Mortgaged Property and manage and operate the same in conformity with all applicable laws and take any action which, in the Collateral Agent’s judgment, is necessary or proper to conserve the value of the Mortgaged Property.

 

(f) THE COLLATERAL AGENT SHALL HAVE ALL OF THE RIGHTS AND REMEDIES PROVIDED IN THE KANSAS UNIFORM COMMERCIAL CODE, including Kansas Code Chapter 84, including the right to proceed under the Kansas Uniform Commercial Code provisions governing default as to any Security Interests Property separately from the real estate included within the Mortgaged Property, or to proceed as to all of the Mortgaged Property in accordance with its rights and remedies in respect of said real estate.  If the Collateral Agent should elect to proceed separately as to such Security Interests Property, the Company agrees to make such Security Interests Property available to the Collateral Agent at a place or places acceptable to the Collateral Agent, and if any notification of intended disposition of any of such Security Interests Property is required by law, such notification shall be deemed reasonably

 

 

	
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(g) and properly given if given at least ten (10) days before such disposition in the manner hereinafter provided.

 

(h) THE COLLATERAL AGENT SHALL HAVE THE RIGHT TO FILE PROOF OF CLAIM and other documents as may be necessary or advisable in order to have its claims allowed in any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceedings affecting the Company, its creditors or its property, for the entire amount due and payable by the Company under the Secured Obligations, this Mortgage and any other instrument securing the Secured Obligations, at the date of the institution of such proceedings, and for any additional amounts which may become due and payable by the Company after such date.

 

Each remedy herein specifically given shall be in addition to every other right now or hereafter given or existing at law or in equity, and each and every right may be exercised from time to time and as often and in such order as may be deemed expedient by the Collateral Agent and the exercise or the beginning of the exercise of one right shall not be deemed a waiver of the right to exercise at the same time or thereafter any other right.  The Collateral Agent shall have all rights and remedies available under the law in effect now and/or at the time such rights and remedies are sought to be enforced, whether or not they are available under the law in effect on the date hereof.

 

4.3. Expenses of Exercising Rights, Powers and Remedies.  The reasonable expense (including any receiver’s fees, attorneys’ fees, appraisers’ fees, environmental engineers’ and/or consultants’ fees, costs incurred for documentary and expert evidence, stenographers’ charges, publication costs, costs (which may be estimated as to items to be expended after entry of the decree of foreclosure) of procuring all abstracts of title, continuations of abstracts of title, title searches and examinations, title insurance policies and commitments and extensions therefor, Torrens duplicate certificates of title, Uniform Commercial Code and chattel lien searches, and similar data and assurances with respect to title as the Collateral Agent may deem reasonably necessary either to prosecute any foreclosure action or to evidence to bidders at any sale which may be had pursuant to any foreclosure decree the true condition of the title to or the value of the Mortgaged Property, and agent’s compensation) incurred by the Collateral Agent after the occurrence of any Event of Default under this Mortgage and/or in pursuing the rights, powers and remedies contained in this Mortgage shall be immediately due and payable by the Company, with interest thereon at the Additional Interest Rate, and shall be added to the indebtedness secured by this Mortgage.

 

4.4. Restoration of Position.  In case the Collateral Agent shall have proceeded to enforce any right under this Mortgage by foreclosure, sale, entry or otherwise, and such proceedings shall have been discontinued or abandoned for any reason or shall have been determined adversely, then, and in every such case, the Company and the Collateral Agent shall be restored to their former positions and rights hereunder with respect to the Mortgaged Property subject to the lien hereof.

 

4.5. Marshalling.  The Company, for itself and on behalf of all persons, parties and entities which may claim under the Company, hereby waives all

 

 

	
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requirements of law relating to the marshalling of assets, if any, which would be applicable in connection with the enforcement by the Collateral Agent of its remedies for an Event of Default hereunder, absent this waiver.  The Collateral Agent shall not be required to sell or realize upon any portion of the Mortgaged Property before selling or realizing upon any other portion thereof.

 

4.6. Waivers.  No waiver of any provision hereof shall be implied from the conduct of the parties.  Any such waiver must be in writing and must be signed by the party against which such waiver is sought to be enforced.  The waiver or release of any breach of the provisions set forth herein to be kept and performed shall not be a waiver or release of any preceding or subsequent breach of the same or any other provision.  No receipt of partial payment after acceleration of any of the Secured Obligations shall waive the acceleration.  No payment by the Company or receipt by the Collateral Agent of a lesser amount than the full amount secured hereby shall be deemed to be other than on account of the sums due and payable hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment be deemed an accord and satisfaction, and the Collateral Agent may accept any check or payment without prejudice to the Collateral Agent’s right to recover the balance of such sums or to pursue any other remedy provided in this Mortgage.  The consent by the Collateral Agent to any matter or event requiring such consent shall not constitute a waiver of the necessity for such consent to any subsequent matter or event.

 

4.7. The Collateral Agent’s Right to Cure Defaults.  If the Company shall fail to comply with any of the terms hereof with respect to the procuring of insurance, the payment of taxes, assessments and other charges, the keeping of the Mortgaged Property in repair, the payment and satisfaction of Liens and encumbrances against the Mortgaged Property, the payment of any other sum or deposit required under this Mortgage, or any other term herein contained, the Collateral Agent may, but shall not be obligated to, make advances or take other actions to perform the same without releasing the Company from any Secured Obligations and may enter upon the Mortgaged Property for any such purpose and take all such action thereon as the Collateral Agent or any of its duly appointed agents may deem necessary or appropriate therefor.  The Company agrees to repay upon demand all sums so advanced and all sums expended by the Collateral Agent in connection with such performance, including without limitation reasonable attorneys’ fees, with Additional Interest at the Additional Interest Rate from the dates such advances are made, and all sums so advanced and/or expenses incurred, with Additional Interest at the Additional Interest Rate, shall be secured hereby as Secured Obligations, but no such advance and/or incurring of expense by the Collateral Agent, shall be deemed to relieve the Company from any default hereunder, or to release the Company from any Secured Obligations.  The Collateral Agent shall not be bound to inquire into the validity of any Imposition or Lien which the Company fails to pay as and when required by this Mortgage and which the Company does not contest in strict accordance with the terms of this Mortgage.

 

4.8. Suits and Proceedings.  The Collateral Agent shall have the power and authority, but shall not be obligated, upon prior notice to the Company to institute and maintain any suits and proceedings as the Collateral Agent may deem advisable to (i) prevent any impairment of the Mortgaged Property by any acts which may be unlawful or any violation of this Mortgage, (ii) preserve or protect its interest in the Mortgaged Property, or (iii) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or

 

 

	
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order that may be unconstitutional or otherwise invalid, if, in the sole opinion of the Collateral Agent, the enforcement of or compliance with such enactment, rule or order might impair the security hereunder or be prejudicial to the Collateral Agent’s interest.

 

4.9. Waiver of Redemption Rights.

 

The Company expressly waives the benefit of all laws now existing or hereafter enacted providing for redemption or a right of redemption from any sale made under this Mortgage, and releases all right of redemption to which the Company would otherwise be entitled if this Mortgage is at any time foreclosed.

 

4.10. Application of Proceeds.

 

The proceeds from the foreclosure, sale or lease hereunder shall be applied to the payment of the Secured Obligations in accordance with the Indenture if such Secured Obligations have been deemed due and payable upon the Event of Default.  Any surplus of the proceeds shall be paid to the Company.

 

4.11. Personal Property.

 

Any limitation on recovery contained in this Mortgage shall not be construed to extend to and shall not limit recovery under any other instrument or Transaction Document that grants a security interest in personal property that is also conveyed or encumbered pursuant to this Mortgage.

 

4.12. Kansas Foreclosure Proceedings.

 

Notwithstanding anything in this Mortgage that might be construed to the contrary, any and all foreclosure proceedings or sales hereunder shall be made pursuant to foreclosure proceedings under applicable Kansas law.

 

ARTICLE 5

 

MISCELLANEOUS

 

5.1. Binding Effect; Survival; Number; Gender.  This Mortgage shall be binding on and inure to the benefit of the parties hereto, their successors and assigns.  All representations and warranties contained herein or otherwise heretofore made by the Company to the Collateral Agent shall survive the execution, delivery and foreclosure hereof.  The singular of all terms used herein shall include the plural, the plural shall include the singular, and the use of any gender herein shall include all other genders, where the context so requires or permits.

 

5.2. Severability.  The unenforceability or invalidity of any provision of this Mortgage as to any persons or circumstances shall not render that provision unenforceable or invalid as to any other persons or circumstances and shall not affect the enforceability of the remaining provisions hereof.

 

5.3. Notices.  All notices and demands required or permitted to be given to or made upon any party hereto under any Transaction Document shall be in writing and shall be personally delivered or sent by certified mail, postage prepaid, return receipt requested or by a nationally recognized courier, or by telecopier, and shall be deemed to be given for purposes of this Mortgage on the day that such writing is delivered or sent to the intended recipient thereof in accordance with the provisions of this Section.  Notices shall be given to or made upon the respective parties hereto at their respective addresses set forth below:

 

 

	
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If to the Company:

 

Kansas Star Casino, LLC

 

600 Star Brewery Drive, Suite 110

Dubuque, IA 52001

 

Attention:  Natalie Schramm

 

Fax:  (563) 690-1394

 

With a copy to:

 

White & Case LLP

1155 Avenue of the Americas

New York, NY 10036

Attention:  Nazim Zilkha, Esq.

 

Fax:  (212) 354-8113

 

If to the Collateral Agent:

 

 

U.S. Bank National Association

60 Livingston Avenue

St. Paul, Minnesota  55107

 

Attention:  Corporate Trust Department

 

Either party may change the address for notices by a notice given not less than five (5) business days prior to the effective date of the change.

 

5.4. Survival of Warranties, Etc.  All agreements, representations and warranties made herein shall survive the execution and delivery of this Mortgage.

 

5.5. Applicable Law.  The Company and the Collateral Agent agree that the rights and obligations under this Mortgage regarding the creation, perfection and enforcement of the liens and security interests herein granted shall be governed and construed and interpreted in accordance with the internal laws of the State of Kansas. All other provisions of this Mortgage shall be governed by the laws of the State of New York, without regard to principles of conflict of laws. In the event that any provisions or clause of this Mortgage conflict with applicable laws, such conflict shall not affect other provisions of this Mortgage which can be given effect without the conflicting provision, and to this end the provisions of this Mortgage are declared to be severable.

 

5.6. Waiver of Jury Trial.  EACH OF THE COMPANY AND THE COLLATERAL AGENT, BY ITS ACCEPTANCE OF THIS MORTGAGE, IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS MORTGAGE AND ANY OF THE OTHER SECURITY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

 

	
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Effect.  This Mortgage is in addition to and not in substitution for any other guaranties, covenants, obligations or other rights now or hereafter held by the Collateral Agent from any other person or entity in connection with the Secured Obligations.

 

5.7. Assignability.  The Collateral Agent shall have the right to assign this Mortgage, in whole or in part or sell participation interests herein, to any person obtaining an interest in the Secured Obligations.

 

5.8. Headings.  Headings of the Sections of this Mortgage are inserted for convenience only and shall not be deemed to constitute a part hereof.

 

5.9. Security Interest.

 

(a) An express security interest is hereby granted to the Collateral Agent in respect to any part of the Mortgaged Property which under Kansas law might now or hereafter be construed or considered as personal property or fixtures, or otherwise be considered collateral subject to the Kansas Uniform Commercial Code, including, without limitation, the collateral described in granting clauses (e) hereof, and this Mortgage shall constitute a security agreement in respect thereto.

 

(b) Upon the occurrence of an Event of Default hereunder in addition to the other rights and remedies available to it, the Collateral Agent may exercise all other rights and remedies with respect to such property that are available to a secured party under the Kansas Uniform Commercial Code.  The Company agrees to pay any reasonable attorney fees and legal expenses incurred by the Collateral Agent in enforcing or protecting its rights under the security interest created hereunder.  In the event notice of intended disposition of such property is required by law in any particular instance, the Company agrees that notice given in the manner and place provided in Section 6.3 hereof and sent ten (10) days prior to a disposition of collateral is commercially reasonable notification within the meaning of the Kansas Uniform Commercial Code.  Information concerning the security interests may be obtained from the Secured Party (the Collateral Agent) at the address set forth in Section 6.3 hereof and the mailing address of the Debtor (Company) is also set forth in Section 6.3 hereof.

 

(c) The Company warrants and agrees that no financing statement or security agreement covering any of the Mortgaged Property is or will be placed on file in any public office or delivered to any secured party except pursuant hereto, except for Permitted Liens.

 

5.10. Fixture Filing.

 

From the date of its recording, this Mortgage shall be effective as a financing statement filed as a fixture filing with respect to the collateral described in the Granting Clauses hereof which are fixtures within the meaning of the Kansas Uniform Commercial Code, and for this purpose the name and address of the Debtor is the name and address of the Company, as set out in Section 6.3 hereof, the organizational identification number of the Debtor is 6489132 and the name and address of the Secured Party is the name and address of the Collateral Agent, as set out in Section 6.3 hereof.  Pursuant to the provisions of the Kansas Code, such fixture filing remains in effect until this Mortgage is released or satisfied of record or its effectiveness otherwise terminates as to the Land.

 

 

	
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Defined Terms.  All capitalized terms used in this Mortgage and not defined herein shall have the meanings ascribed to them in the Indenture.

 

5.11. Discharge of Lien.  In accordance with Section 10.4 of the Indenture and upon the observance and performance of each and every covenant and condition set forth herein and in the Indenture and the Notes, then and in that case all property, rights and interest hereby conveyed or assigned or pledged shall revert to the Company, and the estate, right, title and interest of the Collateral Agent therein shall thereupon cease, terminate and become void; and this Mortgage, and the covenants of the Company contained herein, shall be discharged and the Collateral Agent in such case on demand of the Company and at the Company’s cost and expense, shall execute and deliver to the Company a proper instrument or proper instruments acknowledging the satisfaction and termination of this Mortgage, and shall convey, assign and transfer or cause to be conveyed, assigned or transferred, and shall deliver or cause to be delivered, to the Company, all property, including money, then held by the Collateral Agent hereunder.

 

5.12. Conflicts with Security Agreement.  In the event of a conflict between the provisions of the Security Agreement and the provisions of this Mortgage, the Mortgage shall govern in all matters relating to the validity and enforceability of the Lien created hereby on the Real Property, the Improvements, the Fixtures, and the Rents and (except as expressly set forth to the contrary herein or in the Security Agreement), the Security Agreement shall govern in all other respects.

 

5.13. Mortgage Absolute.  The obligations of the Company under this Mortgage are independent of the obligations of Company under the other Transaction Documents, and a separate action or actions may be brought and prosecuted against Company to enforce this Mortgage, irrespective of whether any action is brought against Company under such other Transaction Documents.  All rights of Collateral Agent and the mortgage, assignment and security interest hereunder, and all obligations of Company hereunder, shall be absolute and unconditional, irrespective of:

 

(a) any lack of validity or enforceability of any other Transaction Document or any other agreement or instrument relating thereto;

 

(b) any change in the time, manner or place of payment of, or in any other term of, all or any of the obligations of the Company under the other Transaction Documents or any other amendment or waiver of or any consent to any departure from the other Transaction Documents, including, without limitation, any increase in such obligations resulting from the extension of additional credit to the Company or otherwise;

 

(c) any taking, exchange, release or non-perfection of any other collateral, or any taking, release or amendment or waiver of or consent to departure from any guaranty, for all or any other of the obligations of the Company under the other Transaction Documents;

 

 

	
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(d) any manner of application of collateral, or proceeds thereof, to all or any of the obligations of the Company under the other Transaction Documents, or any manner of sale or other disposition of any collateral for all or any of such obligations or any other assets of the Company;

 

(e) any change, restructuring or termination of the corporate restructure or existence of the Company; or

 

(f) any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Company or a third party of a security interest or mortgage.

 

5.14. Interaction with Indenture.  All terms, covenants, conditions, provisions and requirements of the Indenture are incorporated by reference in this Mortgage.  Notwithstanding any other provision of this Mortgage, the terms and provisions of this Mortgage shall be subject and subordinate to the terms of the Indenture.  To the extent that the Indenture provides the Company with a particular cure or notice period, or establishes any limitations or conditions on the Collateral Agent’s actions with regard to a particular set of facts, the Company shall be entitled to the same cure periods and notice periods, and Collateral Agent shall be subject to the same limitations and conditions, under this Mortgage, as under the Indenture, in place of the cure periods, notice periods, limitations and conditions provided for under this Mortgage; provided, however, that such cure periods, notice periods, limitations and conditions shall not be cumulative as between the Indenture and this Mortgage.  In the event of any conflict or inconsistency between the provisions of this Mortgage and those of the Indenture, including, without limitation, any conflicts or inconsistencies in any definitions herein or therein, the provisions or definitions of the Indenture shall govern.

 

5.15. Excluded Assets.  Notwithstanding anything to the contrary contained herein, if a portion of the Mortgaged Property becomes an Excluded Asset after the Issue Date, the Collateral Agent shall, simultaneous with the granting of the applicable Permitted Lien, without the payment of any partial release for, or any other prepayment with respect to, the Notes, release the Lien in favor of the Collateral Agent in such Excluded Asset in accordance with the provisions of Section 10.4 of the Indenture.  Once any Excluded Asset is released, such Excluded Asset shall be expressly excluded from and shall no longer be deemed Mortgaged Property under this Mortgage and shall not be subject to any of the representations, covenants or obligations under this Mortgage.

 

5.16. Indemnity.  The Company hereby agrees to indemnify, defend and hold the Collateral Agent (and its directors, officers, agents and employees) and each Holder harmless from and against any and all loss, liability, damage, claim, judgment or expense (including reasonable attorneys’ fees and expenses, bond expenses, printing and automated document preparation and retention expenses and other ordinary litigation expenses) incurred by it (or such director, officer, agent or employee) in connection with the acceptance or administration of the Collateral Agent’s duties under this Mortgage, any action or proceeding to foreclose this Mortgage or in or to which the Collateral Agent or any Holder may be made a party due to the existence of this Mortgage or the other Transaction Documents or to which action or proceeding the Collateral Agent or any Holder may become a party for the purpose of

 

 

	
NEWYORK 8137532 v6 (2K)

	  	  

  

24

  

protecting the lien of this Mortgage.  All sums paid by the Collateral Agent or any Holder to prosecute or defend the rights herein set forth shall be deemed a part of the Secured Obligations and shall be paid by the Company to the Collateral Agent or such Holder within ten (10) days after written demand, and if not paid within that period, shall accrue interest from and including the date of disbursement or advance by the Collateral Agent or such Holder to and including the date of payment by the Company at the Additional Interest Rate.

 

5.17. Maximum Amount of Indebtedness.

(a) The maximum aggregate amount of all indebtedness that is, or under any contingency may be secured at the date hereof or at any time hereafter by this Mortgage is $21,125,000.00 (the “Secured Amount”), plus, to the extent permitted by applicable law and the Indenture, collection costs, sums advanced for the payment of taxes, assessments, maintenance and repair charges, insurance premiums and any other costs incurred to protect the security encumbered hereby or the lien hereof, expenses incurred by the Collateral Agent by reason of any default by the Company under the terms hereof, together with interest thereon, all of which amounts shall be secured hereby; provided, however, that the foregoing limitation shall not operate to limit or diminish the extent of the Collateral Agent’s security interests created pursuant to, or limit the recovery by Agent under, any other security instruments, or limit or diminish the Collateral Agent’s security interests in any other collateral, all as held by the Collateral Agent as security for the Secured Obligations or any portion thereof, it being understood and agreed that the limitation on recovery contained in this Section 6.19 shall apply only to the Mortgaged Property and no other collateral or security held by Agent.

 

(b) The Collateral Agent shall have the right but not the obligation to obtain an appraisal of the Mortgaged Property, at the Company’s sole cost and expense, at any time following the date of this Mortgage, and in the event that one hundred twenty-five percent (125%) of the fair market value of the Mortgaged Property as established by such appraisal shall be greater than $21,125,000.00. The Company shall, upon the Collateral Agent’s request, execute and deliver a modification to this Mortgage increasing the maximum aggregate amount of all indebtedness secured by this Mortgage to an amount equal to one hundred twenty-five percent (125%) of the fair market value of the Mortgaged Property as established by such appraisal, and any mortgage taxes due upon the recordation of such mortgage modification shall be payable by the Company at its sole cost and expense.

 

[Signature Page Follows.]

 

 

	
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25

  

IN WITNESS WHEREOF, the Company has executed this Mortgage as of the date first written above.

 

IMPORTANT:  READ BEFORE SIGNING.  THE TERMS OF THIS MORTGAGE SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.  NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.  YOU MAY CHANGE THE TERMS OF THIS MORTGAGE ONLY BY ANOTHER WRITTEN AGREEMENT.  THIS NOTICE APPLIES TO ALL AGREEMENTS ENTERED INTO TO WHICH THE COMPANY AND THE COLLATERAL AGENT ARE PARTIES.

 

	 	KANSAS STAR CASINO, LLC, a Kansas limited liability company	 
	 	 	 	 
	
 

	
By: 

	/s/ Natalie Schramm	 
	 	 	Name: Natalie Schramm	 
	 	 	Title:   Chief Financial Officer	 
	 	 	 	 

 

                                                                

 

ACKNOWLEDGMENT

 

STATE OF  IOWA               )

COUNTY OF DUBUQUE    )

This instrument was acknowledged before me on  August 4, 2011, by Natalie Schramm, as CFO of KANSAS STAR CASINO, LLC, a Kansas limited liability company.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.

	 	 	 
	 	 	 	 
	
 

	 	/s/ Karen M. Beetem	 
	 	 	Print/Type Name:  Karen M. Beetem	 
	 	 	Notary Public	 
	 	 	 	 

My commission expires:

10/20/13

 

(Notarial Seal, if any)

 

           

	
NEWYORK 8137532 v6 (2K)

	  	  

  

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EXHIBIT A

 

Legal Description

 

 

 

 

 

 

	
NEWYORK 8137532 v6 (2K)

	  	  

  

27aaxii8kex101_8152011.htm

EXIBIT 10.1

LICENSING AGREEMENT

THIS AGREEMENT (“Agreement”) is dated August 15, 2011 among Real Hip-Hop Network Broadcast Corporation (RHN) a C-Corporation, established pursuant to the laws of the State of Delaware, having an address of 1455 Pennsylvania Avenue NW, Washington, DC 20004 (“Licensor”), and Accelerated Acquisitions XII, Inc., a company incorporated pursuant to the laws of the State of Delaware, with an address of 1840 Gateway Drive, Suite 200, Foster City, CA 94404 (“Licensee”).

WHEREAS:

 

	
A.   Except as provided herein, Licensor holds all rights, title and interest to a certain media content, distribution platforms and distribution contracts  entitled “RHN Technology” as further described in Schedule "A" attached hereto (“Technology”);

	
B.   Licensor wishes to enter into a formal licensing agreement with Licensee on the terms set forth below;

THIS AGREEMENT WITNESSES THAT in consideration of US$10.00 (the receipt and sufficiency of which is hereby acknowledged), the parties agree as follows:

 

ARTICLE 1

INTERPRETATION

1 .1 Construction and Interpretation. In this Agreement, unless inconsistent with or excluded by the context:

          

	
  

	
(a) Any heading, index, table of contents or marginal note used in this Agreement is for convenience only and will not limit or affect the interpretation or construction of this Agreement;

 

	
  

	
(b) Singular words will include the plural and plural words will include the singular;

 

	
  

	
(c) A reference to a person will include a company or other corporation and a reference to a company or other corporation will include a person;

	
  

	 

	
  

	
(d) A word importing a particular gender will include each other gender; and

	
  

	
     

	
  

	
(e) A reference to a party to this Agreement includes that party's heirs, executors, administrators, successors and permitted assigns.

1.2     Definitions. In this Agreement, unless inconsistent with or excluded by the context:

 

	
  

	
(a)   “Affiliate” means, with respect to any entity, any other entity which directly or indirectly controls or is controlled by or is under direct or indirect common control with such first mentioned entity;

 

(b)     “Improvements” means all improvements to the Technology developed within or by Licensee;

(c)     “Intellectual Property” includes the Technology and any intellectual property relating to the Technology, including any media content, distribution content, distribution contracts, patent, patent application, copyright, industrial design, trademark, any rights to media content, distribution content, distribution contracts, patent, copyright, industrial design or trademark in any country, engineering designs, concepts, models, trade secrets, know-how and show how, and includes any new technology or the products as may hereafter be developed or acquired by Licensee or any of its subsidiaries;

(d)     “License” means an exclusive, non-transferable, license (with a limited right of sublicense) to allow Licensee to make, use and apply the Technology and conduct its business in the Territory;

(e)     “Licensed Products” means products which, in the absence of the License, would infringe the Licensor’s intellectual property rights in the Technology;

(f)     “Original Invention” means a certain invention entitled “RHN Technology” as further described in Schedule "A" attached hereto;

(g)      “Technology” means certain technology known as “RHN Technology” and includes the Original Invention, any improvements thereof and any products which embodies the RHN Technology and any improvements thereof or thereto;

     

  

 

 

  

  

  

 

 

	
  

	
 
(h)     “Territory” means worldwide; and

(i)     “Trade-Mark” means and trade-mark or trade-name as may be adopted for use on the Licensed Products from time to time.

     

 

1.3 Variation of Agreement. Any variation or modification or waiver of the terms or conditions of this Agreement must be in writing, duly executed by Licensor and Licensee, respectively.

1.4  Severance. Each word, phrase, sentence, paragraph and section of this Agreement is severable and if a court in any jurisdiction determines that any such provision is unenforceable, illegal or void in that jurisdiction the court may sever that provision which becomes inoperative and such severance will not affect the operation of any other provisions of this Agreement nor the operation of that provision in any other jurisdiction.

1.5  Waiver. The failure of either party hereto at any time to enforce any provision of this Agreement will not affect its rights thereafter to require complete performance by the other party, nor will the waiver of any breach of any provision be taken or held to be a waiver of any subsequent breach of any such provision or be a waiver of the provision itself. In order for any waiver to be effective, it must be in writing and signed by an authorized officer of the party.

1.6Law. This Agreement will be governed by, and construed in accordance with, the laws of the State of Delaware, and both parties agree to submit to the exclusive jurisdiction of the courts of the State of Delaware.

ARTICLE 2

LICENSE

2.1     Grant of License:

 

	
  

	
 
     (a)    Licensor hereby grants to Licensee an exclusive, non-transferable, license for use in the Territory, with a limited right of sublicense, as set forth in Section 2.1(e) below, to allow the Licensee to use the Intellectual Property to make, use, and apply the Technology in the course of Licensee’s business, which, in the absence of the License, would infringe Licensor’s intellectual property;

 

 

     (b)   Except for the rights granted pursuant to the License, Licensor shall retain all rights, title and interest to the Technology;

 

 

     (c)   Licensee shall be responsible for all of the testing and improvements to the Technology;

 

 

     (d)   Licensor shall retain all rights to the Improvements, but such Improvements shall also be a part of the License;

     

      (e)  Licensee shall have the right to offer limited royalty-bearing sublicenses to third parties where such third parties are in a position to commercialize the Technology in ways that Licensee cannot accomplish in a competitive manner.  Licensee shall pay Licensor one percent (1.0%) of all royalties and fees received from such third parties. If Licensee receives any non-cash consideration as part of the sublicense consideration (including equity in sublicensee or other entities), Licensor shall have the option to take its portion of the sublicense consideration in kind or in cash based on the fair market value of the non-cash consideration as of the date of receipt by Licensee wherein the fair market value as determined by Licensee’s independent accounting advisors shall equal the cash consideration an unaffiliated, unrelated buyer would pay in an arm’s length sale of a substantially identical item sold in the same quantity, under the same terms, and at the same time and place. Such right to sublicense is subject to the following conditions:

     

	
  

	
(i)  In each sublicense agreement, the sublicensee will be subject to the terms   and conditions of the license granted to Licensee under this Agreement, and the sublicensee will be prohibited from either assigning its sublicense or granting further sublicenses, without first obtaining approval from Licensor; provided, however, that in the event that such further sublicense is approved, any fee or other consideration paid to sublicensee in consideration of such sub-sublicense will be treated as sublicense consideration as if the sub-sublicensee were a sublicensee. Nevertheless, Licensee may set royalty or other payments at its discretion for its sublicensees, as long as the applicable royalties or other payments of its sublicensees are not more favorable to the sublicensee than the corresponding terms of this Agreement.

 

	
  

	
(ii)   Licensee will forward to Licensor, within thirty (30) days following its execution, a fully executed, complete, and accurate copy written in the English language of each sublicense agreement granted under this Agreement. Licensor’s receipt of such sublicense agreement will not constitute a waiver of any of Licensor’s rights or Licensee’s obligations under the Agreement.

 

 

  

2

  

	
  

	
 (iii)    Notwithstanding any such sublicense agreement, Licensee will remain primarily liable to Licensor for all of Licensee’s duties and obligations contained in the Agreement, and any act or omission of a sublicensee that would be a breach of the Agreement if performed by Licensee will be deemed to be a breach by Licensee of the Agreement. Each sublicense agreement will contain a right of termination by Licensee in the event that the sublicensee breaches the payment obligations affecting Licensor or any other material terms and conditions of the sublicense agreement that would constitute a breach of the terms and conditions of the Agreement if such acts were performed by Licensee. In the event of such sublicensee breach, and if after a reasonable opportunity to cure as provided in any such sublicense agreement, such sublicensee fails to cure such sublicensee breach, then Licensee will terminate the sublicense agreement unless Licensor agrees in writing that such sublicense agreement need not be terminated.

	
  

	
(iv)    Upon termination of the Agreement for any reason, all sublicense agreements will, at Licensor’s option, be (i) assigned to and assumed by Licensor, or (ii) terminated.

	
  

	
 

          (f)   Licensee shall pay Licensor a royalty of one quarter of one percent (.025%) of all gross revenues resulting from the use of the Technology by Licensee, except as otherwise modified in writing.

2.2   Exclusive Rights. The rights of Licensee to the License in accordance with Section

 

	
  

	
2.1 will be sole and exclusive, and Licensor will not directly or indirectly compete with Licensee, nor the license, authorize or permit any third party to compete with Licensee with respect to the use of the Technology.

2.3  Assignment of Rights. Licensor and Licensee acknowledge that the respective rights and obligations pursuant to this Agreement are personal to the parties and that Licensee, except in the event of the acquisition of Licensee, by any means, or the sale or merger of substantially all of Licensee’s assets to or with a third party, will not assign this Agreement or assign or delegate any or all rights, duties, or obligations under this Agreement without the prior consent in writing of Licensor, which consent Licensor may not withhold unreasonably.  If Licensor consents to such assignment or delegation, Licensee will remain jointly and severally liable with the assignee or delegate for the obligations of Licensor under this Agreement.  Subject to the limitations hereinbefore expressed, this Agreement will inure to the benefit of and be binding upon the parties and their respective successors and assigns.

2.4  Reorganization of Rights. Licensor may choose to reorganize its worldwide licensing strategy, including delegation of certain commercialization rights to a separate entity, with the prior written consent of Licensee, which may not be unreasonably withheld, provided that the full beneficial terms to Licensee embodied in the Agreement shall not be diminished due to such actions.

2.5  Effect of Assignment. Unless otherwise agreed upon between the parties, no assignment of this Agreement, the benefit of this Agreement or any rights, licenses or authorities pursuant to this Agreement will relieve the assigning party from any liability under this Agreement, whether absolute, contingent, due or accruing, which exists as of the date of assignment.

2.6  No Sublicense. Except pursuant to Section 2.1(e), Licensee will not sublicense the benefit of this Agreement or any rights, licenses or authorities pursuant to this Agreement and any attempted violation of this section, whether voluntarily or by operation of law, will be void and of no force and effect.

2.7  Confidential Information. Licensee acknowledges that its entire knowledge of the Technology and the business of Licensor, including, without limitation, the contents of any Documents (defined as all media content, distribution platforms , distribution contracts, drawings, specifications, blueprints, programs and other material in electronic form or otherwise relating in any manner to the Intellectual Property or the Technology) and periodic updates or revisions, in effect from time to time and the designs, plans, prototypes, specifications, standards and operating procedures for the Technology, will be derived from information disclosed to Licensee by Licensor in confidence and that the Documents and such other information are confidential information and/or trade secrets of the Licensor (all of which is herein collectively called the "Licensor Confidential Information") except where such information is in the public domain or is information describing generally accepted business, engineering or manufacturing practices. Accordingly, Licensee agrees that it will maintain the absolute confidentiality of the Intellectual Property, the Documents and such other information, both during and after the term of this Agreement, disclosing same to other employees of Licensee only to the extent necessary for compliance with this Agreement.

All Licensor Confidential Information obtained by Licensee shall be considered confidential and will not be disclosed by Licensee to any person without the prior written consent of Licensor. Licensor will provide reasonable confidentiality agreements in the form attached hereto as Schedule C to be signed by Licensee and all employees or sub-contractors of Licensee to whom any Licensor Confidential Information will be disclosed, and Licensee will provide or obtain signatures of such confidentiality agreements as the case may be.

 

 

 

 

  

3

  

During the course of its relationship with Licensor, Licensee or its subsidiaries or associates or their employees, agents or consultants may disclose certain proprietary or confidential information to Licensor or its subsidiaries or associates or their employees, agents or consultants. The proprietary or confidential information may be oral or written, may be of a technical or commercial nature, may take the form of plans, drawings, processes, formulae, schedules, reports, projections, analyses, programs, prints, recordings, lists or other compilations of information, and may relate to Licensee, its vendors, employees, stockholders or customers. All of such proprietary information and confidential information is herein collectively called the “Licensee Confidential Information”.

 

 

Any Licensee Confidential Information obtained by Licensor will be considered confidential and will not be disclosed by Licensor to any person without the prior written consent of Licensee. Licensee agrees that the Licensor Confidential Information, and all rights to the Licensor Confidential Information, which has been or will be disclosed to Licensee, as well any improvement or technology using, relating to or incorporating the Licensor Confidential Information shall remain the exclusive property of Licensor, and shall be held in trust for the benefit of Licensor.  Licensee agrees that it will not, directly or indirectly, deal with, use, or exploit the Licensor Confidential Information without Licensor's prior written consent. With regard to any improvement or new technology using, relating to or incorporating the Licensor Confidential Information, Licensee agrees to assign to Licensor all right, title and interest in such improvements or technology, any copyright, trademark, industrial design, patent applications and copyrights, trademarks, industrial designs, patents granted thereto, the sole right to file such applications and Licensee agrees to assist Licensor in obtaining reissues, divisions, renewals or extensions of any such applications and to do any act required to aid Licensor in obtaining and enforcing proper intellectual property protection.

               

The foregoing restrictions do not apply to information which:

(a)     at the time of disclosure was in the public domain as evidenced by a printed publication or otherwise;

(b)     after disclosure becomes part of the public domain by publication or otherwise, other than by action of the disclosing party;

(c)     was in the possession of the disclosing party at the time of disclosure by the disclosing party and was not acquired, directly or indirectly, from the non-disclosing party; or

(d)     the disclosing party rightfully receives from an independent third party who did not receive such information, directly or indirectly, from the other party with limitation or restriction on its use.

 

The obligations contained in this Article will continue notwithstanding the termination of this Agreement or any confidentiality agreements.

The products or proceeds of the services performed by Licensee under this Agreement including, but not limited to, documents, written materials, programs, documentation, designs, discs and tapes shall be and remain the property of Licensor and Licensee shall be able to use such written materials, programs, documentation, designs, discs and tapes for the purposes of carrying out its obligations under this Agreement while the Agreement is in effect.

Licensee will, however, notify Licensor immediately of any alleged, possible, or suspected infringement, passing off, or challenge to the use of any of the Intellectual Property or claim by any person to any rights in any similar trademarks or names of which Licensee is or becomes aware. Licensor agrees to execute any and all instruments and documents, render such assistance and do such acts and things as may be, in the opinion of Licensee, acting reasonably, necessary or advisable to protect and maintain the interests of Licensor in any such litigation or proceedings or to otherwise protect and maintain the interest of Licensor in the Intellectual Property.

 

 

Licensee will have the right, but not the obligation, to prosecute infringement of any of the intellectual property related to the Technology at its own expense. Licensee will not settle or compromise any such suit in a manner that imposes any obligations or restrictions on Licensor or grants any rights to any intellectual property of the Technology, without Licensor’s prior written consent. At the time of filing any infringement enforcement action against a third party, Licensor and Licensee will determine how any damages awarded will be distributed between Licensor and Licensee; provided, however, that in no event will Licensor’s distribution be less than an amount that would have been due to Licensor as sublicense fees as if the litigation recovery had been sublicense consideration. In such a situation Licensee will recoup 100% of its entire litigation expenses first before any calculation is made with regard to the division of damages awarded. In the event that Licensee is not successful in winning a litigation case, Licensee may deduct from future royalty and sublicense fees fifty percent of such litigation costs.

2.8  No Agency or Joint Venture. Nothing in this Agreement constitutes or deems the parties to be partners or joint ventures in relation to the distribution or marketing of the Products, nor to create the relationship of principal and agent or master and servant between the parties, or any other form of legal association which would impose liability upon one party for any act or failure to act by the other party.

 

 

  

4

  

2.9  Term. The term ("Term") of this Agreement and of the rights, authorities and licenses granted to the Licensee pursuant to this Agreement for (i) the Technology, (ii) any improvements of or to the Technology, or (iii) any product which embodies the Technology or such improvements shall commence upon execution of this Agreement and continue for thirty (30) years, provided that the Licensee is not in breach or default of any of the terms or conditions contained in this Agreement.

2.10  Renewal. Subject to written mutual agreement between Licensor and Licensee, this Agreement may be renewed.

  ARTICLE 3

  DISTRIBUTION AND COMMERCIALIZATION

  FUNDING REQUIREMENTS

3.1  Effective Dates.  The License shall become effective upon execution hereof and continue until the end of the Term provided Licensee has generated revenues net of expenses incurred in the normal course of operations, or has funded, a minimum of US $2,000,000 for "distribution and commercialization expenses" in accordance with the following schedule:

     

	
  (a)  

	
    a minimum of US $500,000 during the period commencing from the date of execution of this Agreement by all parties ("Execution Date") and ending on the first anniversary of the Execution Date; or

	
(b)  

	
    a minimum of US $500,000 during the period commencing upon the Execution Date and ending on the second anniversary of the Execution Date; or

	
(c)  

	
    a minimum of US $1,000,000 during the period commencing upon the Execution Date and ending on the third anniversary of the Execution Date.

 

 

It is understood and agreed that any funding in excess of the minimum funding requirement for a particular period shall be automatically credited against the minimum funding requirement for the following funding period.  For clarity, "qualifying research, development and commercialization expenses" shall be those expenses that have been pre-approved by the parties hereof as contributing to the distribution and commercialization of the Technology, improvements and platform embodying the Technology and improvements thereof as mutually agreed upon by the parties to this Agreement.

 

Distribution and commercialization funding may be extended under terms and conditions mutually agreed between the parties.

ARTICLE 4

LICENSEE’S COMMERCIALIZATION OBLIGATIONS

4.1     Responsibilities.  Licensee shall perform as follows:

             (a)     Licensee shall fund payments immediately as they become due for:

     

       (i) reasonable relocation and resettlement costs of a Licensor platform advisor and other necessary personnel agreed upon between the two parties, to the testing and development locale including the acquisition and transport of prototype materials and required documents or plans;

       (ii)       legal expenses to a patent attorney firm, mutually agreed upon among the parties, who will provide necessary assistance in due diligence for the patentability of the technology;

   

       (iii)      fund the ongoing distribution and commercialization of the Technology and the research, development and commercialization of devices using the Technology;

All of the above expenditures shall be credited to the funding requirements set out in Article 3 and are to be considered immediately available upon need.

 

 

 

  

5

  

(b)   Provide assistance to the Licensor with the procurement of patent protection, including cooperating in registered user application of such other applications or filings as are required to effect necessary patent protection with respect to the Technology. Licensee shall pay patent costs and expenses related to United States and foreign filings, including patent filing, translation, search, prosecution and maintenance costs and fees. Licensee will be billed and will pay directly to patent counsel all documented costs and fees and other charges incident to the preparation, prosecution, and maintenance of any patents, copyrights or trademarks related to the Technology within thirty (30) days after receipt of invoice.  Licensee at its option may register this Agreement with any patent office having jurisdiction.  Licensor will work closely with Licensee to develop a suitable strategy for the prosecution and maintenance of all patents, industrial design, trademarks and copyrights. It is intended that Licensee may interact directly with the selected patent counsel in all phases of patent prosecution, such as preparation, office action responses, filing strategies for continuation or divisional applications, and other related activities. Licensor will provide copies of all documents prepared by the selected patent counsel to Licensee for review and comment prior to filing, to the extent practicable under the circumstances.  Licensor will maintain final authority in all decisions regarding the prosecution and maintenance of any patent, industrial design, trademark or copyright applications. All new patent applications and patents will be in the name of Licensee and owned by Licensee.

     

(c)   Licensee will use diligent and commercially reasonable efforts to actively   commercialize the Technology.  “Actively commercialize” means having a commercially effective, reasonably funded ongoing and active research, development, manufacturing, marketing and/or sales program directed toward obtaining regulatory approval, production and/or sales of products embodying the Technology in applicable markets.

	
  

	
     

(d)  All payments to Licensor will be made in United States dollars by check payable to the name of Licensor and sent to:

Real Hip-Hop Network Broadcast Corp.

   1455 Pennsylvania Avenue NW, Suite 400

Washington, D.C. 20004

All payments shall be subject to applicable withholding taxes, if any.

	
  

	
     

(e)                   Licensee will maintain, and cause its sublicensees to maintain, complete and accurate books and records that enable all royalties payable under the Agreement to be verified. The records for each calendar quarter will be maintained for three (3) years after the submission of each quarterly activity report of Licensor. Each quarterly activity report shall be delivered to Licensor within forty-five (45) days after March 31, June 30, September 30, and December 31, beginning immediately after September 30, 2011 and detail the gross sales revenues for the fiscal quarters ending on the foregoing dates, which report shall be certified by the chief financial officer or similar officer of Licensee even if no payments are due Licensor, giving the particulars of the business conducted by Licensee its sublicensee. In addition, Licensor shall have the right, on an annual basis to request and receive technical information from Licensee sufficient to evidence whether and to what extent Licensee is practicing the claims of the Licensed Patents. Licensor shall have the right to make an enquiry in regard of such reports within 30 days following the receipt of such report and upon the expiry of 30 calendar days from the receipt of such report or 10 calendar days from the receipt of the explanation of any enquiry, such report or explanation shall be deemed to be acceptable and final.

         

 (f)                  Upon prior notice to Licensee and its sublicensees, and at Licensor’s expense, Licensor or its representatives or its appointed accountants will have access to such books and records relating to gross sales as necessary to conduct a review or audit of gross sales and verify all royalty reports submitted and royalty payments. Such access will be available to Licensor upon not less than ten (10) days’ written notice to Licensee and its sublicensees, not more than once each calendar year of the Term, during normal business hours, and once a year for three years after the expiration or termination of the Agreement. If an audit of Licensee’s records indicates that Licensee has underpaid royalties by more than (i) three percent (3%), or (ii) five thousand dollars ($5,000), whichever is greater, for the records so audited, Licensee will pay the reasonable costs and expenses incurred by Licensor and its representatives and accountants, if any, in connection with the review or audit, and Licensee will immediately remit such royalties and any accrued interest to Licensor. Further, whenever Licensee and its sublicensees has its books and records audited by an independent certified public accountant, Licensee and its sublicensees will, within thirty (30) days of the conclusion of such audit, provide Licensor with a written statement, certified by said auditor, setting forth the calculation of royalties due to Licensor over the time period audited as determined from the books and records of Licensee.

 

 

  

6

  

	
  

	
ARTICLE 5

	
  

	
PROTECTION OF THE LICENSOR’S

	
  

	
INTELLECTUAL PROPERTY

5.1  Licensee hereby acknowledges Licensor’s right, title and interest in the Intellectual Property relating to the Technology.

5.2  Licensee hereby acknowledges that all right, title, interest and goodwill relating to the Intellectual Property inure to Licensor.

5.3  Licensee hereby acknowledges that any rights subsequently acquired with respect to Licensor’s Intellectual Property or similar property is assigned to Licensor.

5.4  Licensee undertakes not to contest the validity of Licensor’s rights in the Intellectual Property.

5.5  Licensee agrees to take no actions which might impair or interfere with Licensor’s rights in the Intellectual Property.

5.6  Licensee agrees not to seek, independently of Licensor, any trade mark, copyright, patent, or industrial design registrations anywhere in connection with the Intellectual Property or similar property.

5.7  Licensee agrees not to adopt or use any property similar to the Intellectual Property during the Term of this Agreement and thereafter.

5.8  Licensee shall not associate or commingle the Intellectual Property with other intellectual property without the Licensor’s prior consent.

5.9   Licensee agrees not to use the Intellectual Property in an unauthorized manner and, in particular, not to use it in Licensee’s name or as a name or part of a name of any other corporate legal entity, except that Licensee, may elect to use the company name or part of the company name of Licensor in Licensee’s name, with the prior written consent of Licensor, which consent will not be unreasonably withheld.

5.10  Licensee acknowledges that the grant of License is subject to the terms of this Agreement, and a breach of this Agreement constitutes an infringement of the Licensor’s Intellectual Property.

5.11  Licensee agrees to affix notices indicating Licensor's ownership of Licensor's Intellectual Property on licensed products and all packaging, advertising, promotional and other materials bearing Licensor's Intellectual Property in such form as is requested by Licensor.

5.12  Licensee hereby acknowledges the uniqueness of the Intellectual Property, and the difficulty of assessing damages from the unauthorized use of the Intellectual Property and the propriety of injunctive relief.

5.13  Licensor represents and warrants to Licensee that it is the sole owner of the Intellectual Property and the Technology, that such Intellectual Property and Technology do not infringe on the intellectual property of any other person, and that all registrations with respect thereof are in good standing, valid and enforceable, and with support from Licensor, Licensee will, at its sole expense, take all reasonable steps to secure and protect the Intellectual Property and the Technology, including without limitation the defense of any claims against Licensee in relation to the Intellectual Property and the Technology, in accordance with agreement.

5.14  Licensee and Licensor shall cooperatively use their commercially reasonable efforts to achieve procurement of trade mark, copyright and industrial design protection with respect to the Intellectual Property, as applicable, including cooperating in registered user application of such other applications or filings as are required to effect necessary trade mark, copyright, patent and industrial design protection at Licensee’s expense.

5.15  Licensee and Licensor shall immediately notify each other of all unauthorized uses, infringements, imitations and any other claims against the interests of Licensor and Licensee and assist each other in the enforcement of trade-mark, copyright, patent and industrial design protection relating to the Intellectual Property.

5.16  Each of Licensor and Licensee shall have the right, but not the obligation, to decide whether to take action against infringements and imitations or defend against any action with respect to the Intellectual Property, and Licensee shall cooperate in any such action or defense.

5.17  Licensor represents and warrants that it has the right to grant the License to Licensee in accordance with the terms of this Agreement.

5.18  Licensor represents and warrants that entering into this Agreement does not violate any rights or obligations existing between Licensor and any other entity.

 

 

  

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5.19  Licensee and Licensor shall be required to use industry standard non-disclosure agreements or mutually acceptable non-disclosure agreements when dealing with third parties in order to safeguard and protect Intellectual Property.

ARTICLE 6

LICENSOR'S OBLIGATIONS

6.1  Licensor's Indemnity. Licensor will indemnify and save Licensee harmless from and against any and all reasonably foreseeable claims, causes of action, damages, awards, actions, suits, proceedings, demands, assessments, judgments, as well as any and all costs and legal and other expenses incidental to the foregoing, arising out of:

     

	
(a)  

	
Any act, default or breach on the part of Licensor or its officers, employees, servants, agents and representatives under the terms of this Agreement; and

	
  

	
     

	
  

	
        (b)  Any claims of intellectual property infringement arising out of the commercialization of the Technology to the extent that the potential for such specific claims were actually known by the Licensor or should have been known and were not disclosed to Licensee; or to the extent expressly waived by Licensee in writing if such claims were disclosed to Licensee.

6.2  Compliance with Laws. Licensee will at all times during the Term fully comply with all laws, bylaws, regulations of any competent authority that affect or are likely to affect the due performance and observance of Licensee's obligations in this Agreement in the sale, distribution and use of the Licensed Products.

ARTICLE 7

INTELLECTUAL PROPERTY

7.1  Ownership of Intellectual Property. Based on Licensor's representation and warranty provided in Section 10.1 as well as any future technology patents being granted, Licensee acknowledges that Licensor is the sole and beneficial proprietor of the Intellectual Property.

7.2  Use of Name. Use of name or other proprietary trade dress of Licensor or any of its subsidiaries by Licensee shall be subject to the prior written approval of Licensor or any of its subsidiaries.

7.3  No Copies. Except in furtherance of the research, development and commercialization of the Technology, Licensee shall not, and shall not authorize any sublicensee or third part to, copy, reverse engineer, decompile, disassemble, reconstruct, decrypt, modify, update, enhance, supplement, translate or adapt the Licensed Products and shall take all reasonable precautions so as not to allow other parties to do so.

7.4  Improvements. Any improvements to any Licensed Product or future products, regardless of the source, are the property of Licensor or any of its subsidiaries unless otherwise agreed in writing, and shall be communicated promptly to Licensor or any of its subsidiaries and will be licensed to Licensee for the Term of this Agreement as set forth in Section 2.9 hereof.

ARTICLE 8

REPRESENTATIONS, WARRANTIES AND COVENANTS

8.1  Licensor represents and warrants to Licensee that it is the sole owner of the Intellectual Property, that such Intellectual Property does not infringe on the Intellectual Property of any other person and at Licensee's expense, Licensee together with the cooperation of Licensor shall take all reasonable steps to secure and protect the Intellectual Property and the Technology, including without limitation the defense of any claims against the Licensee in relation to the Intellectual Property and the Technology.

8.2  To the knowledge of Licensor, there are no claims of any nature or description related to the Intellectual Property and all registrations with respect to the Intellectual Property are in good standing and are valid and enforceable.

8.3  Licensor agrees to use its best efforts to obtain all required patent and industrial design protection for the Intellectual Property not previously obtained.

8.4  Licensor will agree to maintain its intellectual property rights in the Technology free and clear of all liens and encumbrances and that no lien, encumbrance, mortgage or debt instrument of any kind, nature or description shall be incurred without the prior written consent of Licensee;

 

 

  

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8.5  To the extent it shall not adversely affect the attorney-client relationship, Licensor shall ensure that any retention arrangement with any patent agent shall provide that Licensee shall at all times be copied on any correspondence with any patent office and that Licensee shall have free and unfettered access to the working files of such patent agent and may make such enquiries with the patent agent as is necessary for the maintenance of its continuous disclosure record with its shareholders and the making of any decision by Licensee for any payments hereunder;

8.6  Licensor represents and warrants that it has the right to grant the License pursuant to the terms of this Agreement and that entering into this Agreement does not violate any rights or existing obligations between Licensor and any other entity.

8.7  Licensor represents and warrants that it is a limited liability company in good standing under the laws of the State of Delaware and has full authority to enter into this Agreement without any breach of its governing documents or any applicable law.

8.8  Licensee represents and warrants that it is a corporation in good standing under the laws of the State of Delaware and has full authority to enter into this Agreement without any breach of its governing documents or any applicable law.

ARTICLE 9

FORCE MAJEURE

9.1 Definition of Force Majeure. For the purpose of this Agreement, force majeure means any act, event or cause, except in relation to obligations to make payments under this Agreement, beyond the reasonable control of the party affected by that force majeure including, without limitation, any act of God or any public enemy, fire, flood, explosion, landslide, epidemic, breakdown of or damage to plant, equipment or facilities, inability to obtain or unavailability of or damage to materials, ingredients or supplies, strikes, labor disputes, war, sabotage, riot, insurrection, civil commotion, national emergency and martial law, expropriation, restraint, prohibition, embargo, decree or order of any government, governmental authority or court.

9.2 Notice of Force Majeure. A party (in this Agreement called the "Affected Party") will inform the other party in writing within seven days of becoming affected by any force majeure that has or is likely to have any substantial detrimental effect on the ability of the Affected Party to perform any or all of the terms and conditions contained in this Agreement and will give particulars of the force majeure and the likely duration of the force majeure and of any likely or resulting disability or effect of that force majeure.

9.3 Time for Performance. The time for performance of the obligations of an Affected Party will be extended for the period of the force majeure if appropriate.

                                                                          ARTICLE 10

TERMINATION

10.1  Termination on Default.  If any of the Parties are in breach or default of the terms or conditions contained in this Agreement and do not rectify or remedy that breach or default within 90 days from the date of receipt of notice by the other party requiring that default or breach to be remedied, then the other party may give to the party in default a notice in writing terminating this Agreement but without, in any way, limiting or affecting the rights or liabilities of the parties or either of them that have accrued to the date of termination.  However, the party to whom notice of default has been delivered shall have the right to contest the termination in a court of law and any such termination shall not become effective until a final decision has been rendered by a court of competent jurisdiction that the alleged breach is actual and that the party to which a notice of default has been delivered, has not effectively cured the default.

10.2  Optional Termination by Licensee. Licensee may, at its option, terminate this Agreement at anytime by doing the following:

    

	
  (a)  

	
by ceasing to use the Technology and offer the services facilitated by any Licensed     Products;

     

	
(b)  

	
by giving sixty (60) days prior written notice to Licensor of such cessation and of Licensee’s intent to terminate, and upon receipt of such notice, Licensor may immediately begin negotiations with other potential licensees and all other obligations of Licensee under this Agreement will continue to be in effect until the date of termination;

     

	
(c)  

	
tendering payment of all accrued royalties and other payments due to Licensor as of the date of the notice of termination; and

	
(d)  

	
evidencing to the Licensor that provision has been made for any prospective royalties and other payments to which Licensor may be entitled after the date of termination.

 

 

  

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10.3  Partial Termination by the Licensor.  Notwithstanding Section 10.1, if Licensee is in breach or default of the terms or conditions contained in this Agreement and does not rectify or remedy that breach or default within 90 days from the date of receipt of notice by Licensor requiring that default or breach to be remedied, then Licensor, may alter License granted by this Agreement with regards to its exclusivity, its territorial application and restrictions on its application.

10.4  Termination in Other Events.  Without in any way limiting any other provision of this Agreement, either Licensor or Licensee may terminate this Agreement by notice in writing to the other if an order is made by a court or other competent authority for the winding up or dissolution of Licensee.

10.5  Survival. Upon the termination of this Agreement:

	
(a)  

	
Licensee will immediately cease use of the Intellectual Property; provided however, after the effective date of termination, Licensee may sell all Licensed Products and parts thereof that it has on hand at the effective date of termination; provided, however, that Licensee’s royalty obligations will continue until all Licensed Products have been sold;

	
(b)  

	
 Nothing in this Agreement will be construed to release either party from any obligation that matured prior to the effective date of termination; and

	
(c)  

	
 The provisions of Articles 5, 6, 7 and 8 shall survive any termination or expiration of this Agreement

ARTICLE 11

GENERAL

11.1  Notices. All notices or other communications required or permitted to be given under this Agreement must be in writing and delivered by e-mail, courier or facsimile to the address for each party as specified above or in the case of delivery by facsimile, as follows:

 If to Licensee:

	
          

Accelerated Acquisitions XII, Inc.

1840 Gateway Drive, Suite 200

Foster City, CA 94404

Attention: Atonn Muhammad

Facsimile: 650-378-1232  

E-mail: muhammadatonn1@aol.com

If to Licensor:

Real Hip Hop Network Broadcast Corp.

1455 Pennsylvania Avenue NW

Washington, DC 20004

Attention: Alvin Butler, Jr.

Facsimile: 202.478.0832

E-mail: aj@rhn.tv                    

Any party may designate a substitute address for the purpose of this section by giving written notice in accordance with this section. Any notice delivered in this fashion will be deemed to have been given when it is actually received.

11.2  Time of Essence. Time is of the essence of this Agreement.

11.3  Further Assurances. Each of the parties hereby covenants and agrees that at any time and from time to time it will, upon the request of the other party, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be required for the better carrying out and performance of all the terms of this Agreement.

11.4  Each party recognizes that the employees of the other party, and such employees' loyalty and service to such party, constitute a valuable asset of such party. Accordingly, each party agrees not to make any offer of employment to, nor enter into a consulting relation with, any person who was employed by the other party within three years after the cessation of such person's employment by the other party.

 

 

  

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11.5  Subject to the limitations hereinbefore expressed, this Agreement will inure to the benefit of and be binding upon the parties and their respective successors and assigns.

11.6  There are no oral conditions, representations, warranties, undertakings or agreements between Licensor and Licensee. No modifications to this Agreement will be binding unless executed in writing by the parties. No waiver of any provision of this Agreement will be construed as a waiver of any other provision hereof nor shall such a waiver be construed as a continuing waiver. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together constitute one and the same instrument. This Agreement will be governed by the laws of the State of Florida. Unless otherwise stated, all dollar amounts referred herein shall be in the lawful currency of the United States. If any clause or provision of this Agreement is declared invalid or unenforceable, the remainder of this Agreement will remain in full force and effect. Headings used in this Agreement are for reference purposes only and will not be deemed to be a part of this Agreement. This Agreement will not be construed as creating a partnership, joint venture or agency relationship between the parties or any other form of legal association which would impose liability upon one party for any act or failure to act by the other party.

IN WITNESS WHEREOF the following parties have executed this Agreement:

 

ACCELERATED ACQUISITIONS XII, INC.

_____/s/ Atonn F Muhammad______________

   By:  Atonn F Muhammad, CEO/Director

 

 

REAL HIP-HOP NETWORK BROADCAST CORPORATION

____ /s/Alvin Butler, Jr. _____________________

   By: Alvin Butler, Jr. CFO

 

 

 

  

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