Document:

Exhibit 10.3

 

 

 

FORM OF

SECURITY
AGREEMENT

By

GRANITE BROADCASTING CORPORATION,

as Issuer

and

THE GUARANTORS PARTY HERETO

and

The Bank of New York,

as Collateral Agent

 

 

Dated as of                 

 

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  PREAMBLE

  	
  1

  
	
   

  	
   

  
	
  RECITALS

  	
  1

  
	
   

  	
   

  
	
  AGREEMENT

  	
  1

  
	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS AND INTERPRETATION

  	
   

  
	
   

  	
   

  
	
  SECTION 1.1.

  	
  Definitions

  	
  2

  
	
  SECTION 1.2.

  	
  Interpretation

  	
  9

  
	
  SECTION 1.3.

  	
  Perfection
  Certificate

  	
  9

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  GRANT OF SECURITY AND SECURED OBLIGATIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 2.1.

  	
  Grant of
  Security Interest

  	
  9

  
	
  SECTION 2.2.

  	
  FCC Licenses
  as Collateral

  	
  11

  
	
  SECTION 2.3.

  	
  Filings

  	
  11

  
	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

  	
   

  
	
  USE OF COLLATERAL

  	
   

  
	
   

  	
   

  
	
  SECTION 3.1.

  	
  Delivery of
  Certificated Securities Collateral

  	
  12

  
	
  SECTION 3.2.

  	
  Perfection
  of Uncertificated Securities Collateral

  	
  12

  
	
  SECTION 3.3.

  	
  Financing
  Statements and Other Filings; Maintenance of Perfected Security Interest

  	
  12

  
	
  SECTION 3.4.

  	
  Other
  Actions

  	
  13

  
	
  SECTION 3.5.

  	
  Joinder of
  Additional Guarantors

  	
  17

  
	
  SECTION 3.6.

  	
  Supplements;
  Further Assurances

  	
  17

  
	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
   

  
	
   

  	
   

  
	
  SECTION 4.1.

  	
  Title

  	
  17

  
	
  SECTION 4.2.

  	
  Validity of
  Security Interest

  	
  18

  
	
  SECTION 4.3.

  	
  Defense of
  Claims; Transferability of Collateral

  	
  18

  
	
  SECTION 4.4.

  	
  Other
  Financing Statements

  	
  18

  

 

i

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  SECTION 4.5.

  	
  Chief
  Executive Office; Change of Name; Jurisdiction of Organization

  	
  18

  
	
  SECTION 4.6.

  	
  Location of
  Equipment.

  	
  19

  
	
  SECTION 4.7.

  	
  Due
  Authorization and Issuance

  	
  19

  
	
  SECTION 4.8.

  	
  Consents, etc.

  	
  19

  
	
  SECTION 4.9.

  	
  Collateral

  	
  19

  
	
  SECTION 4.10.

  	
  Insurance

  	
  20

  
	
  SECTION 4.11.

  	
  Payment of
  Taxes; Compliance with Laws; Contesting Liens; Claims

  	
  20

  
	
  SECTION 4.12.

  	
  Access to
  Collateral, Books and Records; Other Information

  	
  20

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

  	
   

  
	
   

  	
   

  
	
  SECTION 5.1.

  	
  Pledge of
  Additional Securities Collateral

  	
  20

  
	
  SECTION 5.2.

  	
  Voting
  Rights; Distributions; etc.

  	
  21

  
	
  SECTION 5.3.

  	
  Organizational
  Documents

  	
  22

  
	
  SECTION 5.4.

  	
  Certain Agreements
  of Pledgors As Issuers and Holders of Equity Interests

  	
  22

  
	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  
	
  CERTAIN PROVISIONS CONCERNING INTELLECTUAL

  	
   

  
	
  PROPERTY COLLATERAL

  	
   

  
	
   

  	
   

  
	
  SECTION 6.1.

  	
  Grant of
  License

  	
  22

  
	
  SECTION 6.2.

  	
  Protection
  of Collateral Agent’s Security

  	
  23

  
	
  SECTION 6.3.

  	
  After-Acquired
  Property

  	
  23

  
	
  SECTION 6.4.

  	
  Litigation

  	
  23

  
	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  
	
  CERTAIN PROVISIONS CONCERNING ACCOUNTS

  	
   

  
	
   

  	
   

  
	
  SECTION 7.1.

  	
  Maintenance
  of Records

  	
  24

  
	
  SECTION 7.2.

  	
  Legend

  	
  24

  
	
  SECTION 7.3.

  	
  Collection

  	
  24

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  
	
  TRANSFERS

  	
   

  
	
   

  	
   

  
	
  SECTION 8.1.

  	
  Transfers of
  Collateral

  	
  25

  

 

ii

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
   

  	
   

  
	
  REMEDIES

  	
   

  
	
   

  	
   

  
	
  SECTION 9.1.

  	
  Remedies

  	
  25

  
	
  SECTION 9.2.

  	
  Notice of
  Sale

  	
  27

  
	
  SECTION 9.3.

  	
  Waiver of
  Notice and Claims

  	
  27

  
	
  SECTION 9.4.

  	
  Certain
  Sales of Collateral

  	
  27

  
	
  SECTION 9.5.

  	
  No Waiver;
  Cumulative Remedies

  	
  29

  
	
  SECTION 9.6.

  	
  Certain
  Additional Actions Regarding Intellectual Property

  	
  29

  
	
  SECTION 9.7.

  	
  FCC Licenses
  and Regulatory Authorizations

  	
  29

  
	
   

  	
   

  
	
  ARTICLE X

  	
   

  
	
   

  	
   

  
	
  PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;

  	
   

  
	
  APPLICATION OF PROCEEDS

  	
   

  
	
   

  	
   

  
	
  SECTION 10.1.

  	
  Proceeds of
  Casualty Events and Collateral Dispositions

  	
  30

  
	
  SECTION 10.2.

  	
  Application
  of Proceeds

  	
  30

  
	
   

  	
   

  
	
  ARTICLE XI

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  SECTION 11.1.

  	
  Concerning
  Collateral Agent

  	
  30

  
	
  SECTION 11.2.

  	
  Collateral
  Agent Appointed Attorney-in-Fact

  	
  32

  
	
  SECTION 11.3.

  	
  Continuing
  Security Interest; Assignment

  	
  32

  
	
  SECTION 11.4.

  	
  Termination;
  Release

  	
  32

  
	
  SECTION 11.5.

  	
  Modification
  in Writing

  	
  33

  
	
  SECTION 11.6.

  	
  Notices

  	
  33

  
	
  SECTION 11.7.

  	
  Governing Law,
  Consent to Jurisdiction and Service of Process; Waiver of Jury Trial

  	
  33

  
	
  SECTION 11.8.

  	
  Severability
  of Provisions

  	
  33

  
	
  SECTION 11.9.

  	
  Execution in
  Counterparts

  	
  33

  
	
  SECTION 11.10.

  	
  Business
  Days

  	
  34

  
	
  SECTION 11.11.

  	
  Waiver of
  Stay

  	
  34

  
	
  SECTION 11.12.

  	
  No Credit
  for Payment of Taxes or Imposition

  	
  34

  
	
  SECTION 11.13.

  	
  No Claims
  Against Collateral Agent

  	
  34

  
	
  SECTION 11.14.

  	
  No Release

  	
  34

  
	
  SECTION 11.15.

  	
  Senior
  Secured Obligations Absolute

  	
  35

  
	
   

  	
   

  
	
  SIGNATURES

  	
  S-1

  
	
   

  	
   

  
	
  EXHIBIT 1

  	
  Form of
  Issuer’s Acknowledgment

  	
   

  
	
  EXHIBIT 2

  	
  Form of
  Securities Pledge Amendment

  	
   

  
	
  EXHIBIT 3

  	
  Form of
  Joinder Agreement

  	
   

  
				

 

iii

 

	
  EXHIBIT 4

  	
  Form of
  Control Agreement Concerning Securities Accounts

  	
   

  
	
  EXHIBIT 5

  	
  Form of
  Control Agreement Concerning Deposit Accounts

  	
   

  
	
  EXHIBIT 6

  	
  Form of
  Copyright Security Agreement

  	
   

  
	
  EXHIBIT 7

  	
  Form of
  Patent Security Agreement

  	
   

  
	
  EXHIBIT 8

  	
  Form of
  Trademark Security Agreement

  	
   

  

 

iv

 

SECURITY
AGREEMENT

 

SECURITY
AGREEMENT dated as of                 
(as amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with the provisions hereof, the “Agreement”) made
by GRANITE BROADCASTING CORPORATION, a Delaware corporation (the “Issuer”)
and THE GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO (the “Original
Guarantors”) OR FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A JOINDER
AGREEMENT (the “Additional Guarantors”), as pledgors, assignors and
debtors (the Issuer, together with the Guarantors, in such capacities and
together with any successors in such capacities, the “Pledgors,” and
each a “Pledgor”), in favor of The Bank of New York, a
New York banking corporation, in its capacity as collateral agent and
trustee pursuant to the Indenture (as hereinafter defined), as pledgee, assignee
and secured party.

 

R  E  C  I  T  A
L  S :

 

A.            The
Issuer and The Bank of New York, as Collateral Agent, have, in connection
with the execution and delivery of this Agreement, entered into that certain
Indenture, dated as of December 22, 2003 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Indenture”),
pursuant to which the Issuer has issued its 93⁄4% Senior Secured Notes due 2010
(the “Senior Secured Notes”) in the aggregate principal amount of
$405,000,000.

 

B.            It
is contemplated that the Issuer may, after the date hereof, issue Series B
Notes and Additional Notes (the Series B Notes and Additional Notes
together with the Senior Secured Notes, the “Notes”), pursuant to the
provisions of the Indenture.

 

C.            This
Agreement is given by each Pledgor in favor of the Collateral Agent for the
benefit of the Holders of the Notes (collectively, the “Senior Secured
Parties”) to secure the payment and performance of all the Senior Secured
Obligations.

 

D.            Each
Pledgor is or, as to Collateral acquired by such Pledgor after the date hereof
will be, the legal and/or beneficial owner of the Collateral pledged by it
hereunder.

 

A  G  R  E  E  M
E  N  T :

 

NOW THEREFORE,
in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each Pledgor and the Collateral Agent hereby agree as follows:

 

 

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

SECTION 1.1.        Definitions.

 

(a)           Unless
otherwise defined herein or in the Indenture, capitalized terms used herein
that are defined in the UCC shall have the meanings assigned to them in the
UCC.

 

(b)           Terms
used but not otherwise defined herein or in the UCC that are defined in the
Indenture shall have the meanings given to them in the Indenture.

 

(c)           The
following terms shall have the following meanings:

 

“Additional
Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.

 

“Additional
Pledged Interests” shall mean, collectively, with respect to each Pledgor,
(i) all options, warrants, rights, agreements, additional membership,
partnership or other equity interests of whatever class of any issuer that is
not a corporation of Initial Pledged Interests or any interest in any such
issuer, together with all rights, privileges, authority and powers of any such
Pledgor relating to such interests in each such issuer or under any
Organizational Document of any such issuer, and the certificates, instruments
and agreements representing such membership, partnership or other interests and
any and all interest of any such Pledgor in the entries on the books of any
financial intermediary pertaining to such membership, partnership or other
equity interests from time to time acquired by such Pledgor in any manner and
(ii) all membership, partnership or other equity interests, as applicable,
of each limited liability company, partnership or other entity (other than a
corporation) hereafter acquired or formed by such Pledgor and all options, warrants,
rights, agreements, additional membership, partnership or other equity interests
of whatever class of such limited liability company, partnership or other
entity, together with all rights, privileges, authority and powers of such
Pledgor relating to such interests or under any Organizational Document of any
such issuer, and the certificates, instruments and agreements representing such
membership, partnership or other equity interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other interests, from time to
time acquired by such Pledgor in any manner.

 

“Additional
Pledged Shares” shall mean, collectively, with respect to each Pledgor,
(i) all options, warrants, rights, agreements, additional shares of
capital stock of whatever class of any issuer that is a corporation of the
Initial Pledged Shares or any other equity interest in any such issuer,
together with all rights, privileges, authority and powers of any such Pledgor
relating to such interests issued by any such issuer under any Organizational
Document of any such issuer, and the certificates, instruments and agreements
representing such interests and any and all interest of such Pledgor in the entries
on the books of any financial intermediary pertaining to such interests, from
time to time acquired by such Pledgor in any manner and (ii) all the
issued and outstanding shares of capital stock of each corporation hereafter acquired
or formed by such Pledgor and all options, warrants, rights, agreements or
additional shares of

 

2

 

capital stock
of whatever class of such corporation, together with all rights, privileges, authority
and powers of such Pledgor relating to such shares or under any Organizational
Document of such corporation, and the certificates, instruments and agreements
representing such shares and any and all interest of such Pledgor in the
entries on the books of any financial intermediary pertaining to such shares,
from time to time acquired by such Pledgor in any manner.

 

“Agreement”
shall have the meaning assigned to such term in the Preamble hereof.

 

“Claims”
shall mean any and all property and other taxes, assessments and special
assessments, levies, fees and all governmental charges imposed upon or assessed
against, and landlords’, carriers’, mechanics’, workmen’s, repairmen’s,
laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims
arising by operation of law against, all or any portion of the Collateral.

 

“Collateral”
shall have the meaning assigned to such term in Section 2.1 hereof.

 

“Commodity
Account Control Agreement” shall mean a commodity account control agreement
in a form that is reasonably satisfactory to the Collateral Agent.

 

“Communications
Act” means the Communications Act of 1934, as amended, or any successor
statute or statues thereto, and all rules, regulations, written policies,
orders and decisions of the FCC thereunder, in each case as from time to time
in effect.

 

“Communications
Regulatory Authority” means any communications regulatory commission,
agency, department, board or authority (including, without limitation, the
FCC).

 

“Contested
Liens” shall mean, collectively, any Liens incurred in respect of any
Claims to the extent that the amounts owing in respect thereof are not yet
delinquent or are being contested and otherwise comply with the provisions of Section 4.11
hereof; provided, however, that such Liens shall in all respects
be subject and subordinate or pari passu in priority to the Lien and security
interest created by this Agreement, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien provides that such
Lien must be superior to the Lien and security interest created and evidenced
hereby.

 

“Contracts”
shall mean, collectively, with respect to each Pledgor, all sale, service,
performance, equipment or property lease contracts, agreements and grants and
all other contracts, agreements or grants (in each case, whether written or
oral, or third party or inter-company), between such Pledgor and third parties,
and all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof.

 

“Control”
shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, and (ii) in the case of
any Security Entitlement, “control,” as such term is defined in
Section 8-106 of the UCC and (iii) in the case of any Commodity
Contract, “control,” as such term is defined in Section 9-106 of the UCC.

 

“Control
Account” means a Commodity Account, Deposit Account or Securities Account
which account is the subject of an effective Control Agreement.

 

3

 

“Control
Agreements” shall mean, collectively, any Deposit Account Control
Agreements, any Securities Account Control Agreements and any Commodity Account
Control Agreements.

 

“Copyright Licenses” means
(a) any written agreement naming any Pledgor as licensor or licensee
granting any right under any Copyright, including the grant of rights to copy,
publicly perform, create derivative works, manufacture, distribute, exploit and
sell materials derived from any Copyright.

 

“Copyright
Security Agreement” shall mean an agreement substantially in the form
annexed hereto as Exhibit 6.

 

“Copyrights” means (a) all
copyrights arising under the laws of the United States, any other country or
any political subdivision thereof, whether registered or unregistered, whether
published or unpublished and whether acquired by or assigned to such Pledgor,
all registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof and
(b) the right to obtain all renewals thereof.

 

“Deposit
Account Control Agreement” shall mean an agreement substantially in the
form annexed hereto as Exhibit 5 or such other form that is
reasonably satisfactory to the Collateral Agent.

 

“Deposit
Accounts” shall mean, collectively, with respect to each Pledgor,
(i) all “deposit accounts” as such term is defined in the UCC and in any
event shall include the Collateral Account and all accounts and sub-accounts
relating to any of the foregoing accounts and (ii) all cash, funds,
checks, notes and instruments from time to time on deposit in any of the accounts
or sub-accounts described in clause (i) of this definition.

 

“Distributions”
shall mean, collectively, with respect to each Pledgor, all dividends, cash,
options, warrants, rights, instruments, distributions, returns of capital or
principal, income, interest, profits and other property, interests (debt or
equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from time to
time received, receivable or otherwise distributed to such Pledgor in respect
of or in exchange for any or all of the Pledged Securities.

 

“Excluded
Property” shall mean Special Property other than the following:

 

(a)           the
right to receive any payment of money (including Accounts, General Intangibles
and Payment Intangibles) or any other rights referred to in
Sections 9-406(f), 9-407(a) or 9-408(a) of the UCC to the extent
that such sections of the UCC are effective to limit the prohibitions which
make such property “Special Property”; and

 

(b)           any
Proceeds, substitutions or replacements of any Special Property (unless such
Proceeds, substitutions or replacements would constitute Special Property).

 

4

 

“FCC
Licenses” shall mean necessary licenses required under the Communications
Act to own and operate its properties and to carry on its business as now
conducted and proposed to be conducted.

 

“General
Intangibles” shall mean, collectively, with respect to each Pledgor, all
“general intangibles,” as such term is defined in the UCC of such Pledgor and
any Commercial Tort Claims of such Pledgor.

 

“Goodwill”
shall mean, collectively, with respect to each Pledgor, the goodwill connected
with such Pledgor’s business including (i) all goodwill connected with the
use of and symbolized by any Trademark or Trademark License in which such
Pledgor has any interest, (ii) all know-how, trade secrets, customer and
supplier lists, proprietary information, inventions, methods, procedures,
formulae, descriptions, compositions, technical data, drawings, specifications,
name plates, catalogs, confidential information and the right to limit the use
or disclosure thereof by any person, pricing and cost information, business and
marketing plans and proposals, consulting agreements, engineering contracts and
such other assets which relate to such goodwill and (iii) all product
lines of such Pledgor’s business.

 

“Indenture”
shall have the meaning assigned to such term in Recital A hereof.

 

“Initial
Pledged Interests” shall mean, with respect to each Pledgor, all
membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer described in Schedule 10
annexed to the Perfection Certificate, together with all rights, privileges,
authority and powers of such Pledgor in and to each such issuer or under any
Organizational Document of each such issuer, and the certificates, instruments
and agreements representing such membership, partnership or other interests and
any and all interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to such membership, partnership or other interests.

 

“Initial
Pledged Shares” shall mean, collectively, with respect to each Pledgor, the
issued and outstanding shares of capital stock of each issuer described in
Schedule 10 annexed to the Perfection Certificate together with all
rights, privileges, authority and powers of such Pledgor relating to such
interests in each such issuer or under any Organizational Document of each such
issuer, and the certificates, instruments and agreements representing such
shares of capital stock and any and all interest of such Pledgor in the entries
on the books of any financial intermediary pertaining to the Initial Pledged
Shares.

 

“Instruments”
shall mean, collectively, with respect to each Pledgor, all “instruments,” as
such term is defined in Article 9, rather than Article 3, of the UCC,
and shall include all promissory notes, drafts, bills of exchange or
acceptances.

 

“Intellectual
Property Collateral” shall mean, collectively, (i) the Patents,
Trademarks, Copyrights, Licenses and Goodwill (collectively, “Intellectual
Property”), (ii) income, fees, royalties, damages, claims and payments
now or hereafter due and/or payable with respect thereto, including damages and
payments for past, present or future infringements thereof and (iii) rights
to sue for past, present or future infringements thereof; provided such
Intellectual Property Collateral shall be material to the business of a
Pledgor.

 

5

 

“Investment
Property” shall mean a security, whether certificated or uncertificated,
Security Entitlement, Securities Account, Commodity Contract or Commodity
Account, excluding, however, the Securities Collateral.

 

“Joinder
Agreement” shall mean an agreement substantially in the form annexed hereto
as Exhibit 3.

 

“License
Co.” means any wholly-owned direct or indirect Subsidiary of the Issuer
established solely for the purpose of holding the FCC Licenses now or hereafter
acquired or owned by the Issuer or any of its Subsidiaries, including, without
limitation, any of KBWB License, Inc., WPTA-TV License, Inc., KBJR
License, Inc., WTVH License, Inc., KSEE License, Inc., WKBW-TV
License, Inc., WXON License, Inc., WEEK-TV License, Inc.,
Channel 11 License, Inc. and “License Cos.” means all such Subsidiaries collectively.

 

“Licenses”
shall mean, collectively, Copyright Licenses, Patent Licenses and Trademark
Licenses.

 

“Notes”
shall have the meaning assigned to the term in Recital A of this Agreement.

 

“Organizational
Document” shall mean (i) in the case of any limited liability company
or partnership or other non-corporate entity, any membership or partnership
agreement or other organizational agreement or document thereof and
(ii) in the case of any corporation, any charter or certificate of
incorporation and by-laws thereof.

 

“Parent”
has the meaning set forth in Rule 12b-2, promulgated under the Securities
and Exchange Act of 1934, as amended.

 

“Patent License” means all
agreements, whether written or oral, providing for the grant by or to any
Pledgor of any right to manufacture, use, import, sell or offer for sale any invention
covered in whole or in part by a Patent.

 

“Patent
Security Agreement” shall mean an agreement substantially in the form
annexed hereto as Exhibit 7.

 

“Patents” means (a) all
letters patent of the United States, any other country or any political
subdivision thereof and all reissues and extensions thereof, (b) all
applications for letters patent of the United States or any other country and
all divisions, continuations and continuations-in-part thereof, (c) all
provisionals, (d) inventions and improvements described and claimed
therein and (e) all rights to obtain any reissues or extensions of the
foregoing.

 

“Pledge
Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.

 

“Pledged
Interests” shall mean, collectively, the Initial Pledged Interests and the
Additional Pledged Interests.

 

6

 

“Pledged
Securities” shall mean, collectively, the Pledged Interests, the Pledged Shares
and the Successor Interests.

 

“Pledged
Shares” shall mean, collectively, the Initial Pledged Shares and the
Additional Pledged Shares, but shall exclude shares of LSAEs and shares of
foreign subsidiaries.

 

“Pledgor”
shall have the meaning assigned to such term in the Preamble hereof.

 

“Regulatory
Authorization” means all approvals, authorizations, licenses, franchises,
filings, notices, registrations, consents, permits, exemptions, registrations,
qualifications, designations, declarations, or other actions or undertakings
now or hereafter made by, to or in respect of any Governmental Authority or
Communications Regulatory Authority, including all grants, approvals, licenses,
filings and registrations from or to the FCC or under any applicable Requirement
of Law, including but not limited to the Communications Act, necessary in order
to enable the Pledgors to provide television services of the type presently
provided by the Issuer in connection with any of the Guarantor’s business or by
any such Guarantor in the ordinary course of its respective business.

 

“Requirement
of Law” shall mean, collectively, any and all requirements of any
Governmental Authority including, without limitation, any and all laws,
ordinances, rules, regulations or similar statutes or case law.

 

“Securities
Account Control Agreement” shall mean an agreement substantially in the
form annexed hereto as Exhibit 4 or such other form that is
reasonably satisfactory to the Collateral Agent.

 

“Securities
Collateral” shall mean, collectively, the Pledged Securities and the
Distributions.

 

“Senior
Secured Obligations” shall mean all obligations (whether or not
constituting future advances, obligatory or otherwise) of the Issuer and any
and all of the Guarantors from time to time arising under or in respect of this
Agreement, the Indenture, the Notes and/or the other Security Documents and all
other Senior Secured Indebtedness (including, without limitation, the
obligations to pay principal, interest and all other charges, fees, expenses,
commissions, reimbursements, premiums, indemnities and other payments related
to or in respect of the obligations contained in this Agreement, the Indenture,
the Notes and the other Security Documents), in each case whether (i) such
obligations are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due whether at stated maturity, by
acceleration or otherwise, (ii) for payment or performance and/or
(iii) now existing or hereafter arising (including, without limitation,
interest and other obligations arising or accruing after the commencement of
any bankruptcy, insolvency, reorganization or similar proceeding with respect
to any Pledgor or any other Person, or which would have arisen or accrued but
for the commencement of such proceeding, even if such obligation or the claim
therefor is not enforceable or allowable in such proceeding).

 

7

 

“Special
Property” shall mean:

 

(a)           programming
agreements or network affiliation agreements but only to the extent they
contain provisions precluding the grant of a Lien in favor of Senior Secured
Indebtedness; provided that in the event such
provisions are rendered ineffective by the Uniform Commercial Code or other
applicable law, such agreements shall not be excluded;

 

(b)           any
permit, lease or license held by any Pledgor to the extent that any Requirement
of Law applicable thereto prohibits the creation of a security interest therein
(such as with respect to broadcast licenses or permits issued by the FCC);

 

(c)           those
assets for which there has been incurred and remains outstanding permitted
Purchase Money Indebtedness or Acquired Indebtedness (and permitted
refinancings of either thereof) under the Indenture, or cash or Cash Equivalents
to the extent the Issuer is permitted under the Indenture to incur (and there
are outstanding) Liens on such cash or Cash Equivalents to finance, directly or
indirectly, Permitted Business Acquisitions, but only if (and for so long as)
the terms of any such Indebtedness described in this
clause (c) preclude those assets from being Collateral;

 

(d)           the
assets of an LSAE to the extent that the grant of a Lien in favor of holders of
Senior Secured Indebtedness would not be permitted under the terms of any
Indebtedness of such LSAE permitted to be outstanding under the Indenture; and

 

(e)           certain
daily balances of cash in accounts other than Control Accounts, provided
that there are in place standing instructions to sweep all such deposits, on a
daily basis, into a Control Account, and certain balances in payroll accounts;

 

but only if no
other holder of Indebtedness of the Issuer or its Restricted Subsidiaries
(other than those Liens specifically provided in clauses (1), (16) or (17)
of the definition of Permitted Liens in the Indenture) has a Lien on any such
asset.

 

“Successor
Interests” shall mean, collectively, with respect to each Guarantor, all
shares of each class of the capital stock of the successor corporation or
interests or certificates of the successor limited liability company,
partnership or other entity owned by such Guarantor (unless such successor is
such Guarantor itself or such successor is entitled to a release pursuant to
Section 11.4 of the Indenture) formed by or resulting from any consolidation
or merger in which any person listed in Schedule 1(a) annexed to the
Perfection Certificate is not the surviving entity; provided, however,
that to the extent applicable, Successor Interest shall not include any shares
or interests possessing more than 65% of the voting power or control of all
classes of capital stock or interests entitled to vote of any Guarantor which
is a first tier controlled foreign corporation (as defined in
Section 957(a) of the Internal Revenue Code (the “Code”)) and, in any
event, shall not include shares of stock or interests of any Guarantor
otherwise which are not required to be pledged pursuant to this Agreement to
the extent that such pledge would constitute an investment of earnings in
United States property under Section 956 (or a successor provision) of the
Code, which investment would trigger an increase in the gross income of a
United States shareholder of such Pledgor pursuant to Section 951 (or a
successor provision) of the Code.

 

8

 

“Trademark License” means any
agreement, whether written or oral, providing for the grant by or to any
Guarantor of any right to use any Trademark.

 

“Trademark
Security Agreement” shall mean an agreement substantially in the form annexed
hereto as Exhibit 8.

 

“Trademarks” means (a) all
trademarks, registered or not, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos
and other source or business identifiers, and all Goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
and (b) the right to obtain all renewals or extensions thereof.

 

“UCC”
shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of New York; provided, however, that if by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of the Collateral Agent’s and the Secured Parties’ security interest
in any item or portion of the Collateral is governed by the Uniform Commercial
Code as in effect in a jurisdiction other than the State of New York, the
term “UCC” shall mean the Uniform Commercial Code as in effect on the date
hereof in such other jurisdiction for purposes of the provisions hereof
relating to such attachment, perfection or priority and for purposes of
definitions relating to such provisions.

 

“Vehicles”
shall mean all vehicles covered by a certificate of title law of any state.

 

SECTION 1.2.        Interpretation.  The rules of interpretation specified in
the Indenture shall be applicable to this Agreement.

 

SECTION 1.3.        Perfection
Certificate.  The Collateral Agent
and each Secured Party agree that the Perfection Certificate and all descriptions
of Collateral, schedules, amendments and supplements thereto are and shall at
all times remain a part of this Agreement.

 

ARTICLE II

 

GRANT OF SECURITY AND SECURED OBLIGATIONS

 

SECTION 2.1.        Grant
of Security Interest.  As collateral
security for the payment and performance in full of all the Senior Secured
Obligations, each Pledgor hereby pledges and grants to the Collateral Agent for
the benefit of the Secured Parties, a Lien on and security interest in and to
all of the right, title and interest of such Pledgor in, to and under the
following property, wherever located, whether now existing or hereafter arising
or acquired from time to time (collectively, the “Collateral”):

 

(i)            all
Accounts;

 

(ii)           all
Equipment, Goods, Inventory and Fixtures;

 

9

 

(iii)          all
Documents, Instruments and Chattel Paper;

 

(iv)          all
Letters of Credit and Letter-of-Credit Rights;

 

(v)           to
the extent permitted by applicable Requirement of Law in effect at any time,
all rights that such Pledgor may have at any time in any Regulatory
Authorization, including without limitation respective FCC licenses, from or by
any Governmental Authority or Communications Regulatory Authority, including
any rights to payment upon any transfer of any such Regulatory Authorization,
or any other transfer or transaction intended to result in a transfer of such a
Regulatory Authorization, or the obtaining of any applicable Regulatory
Authorization from or by any Governmental Authority or Communications Regulatory
Authority for another Person to operate a television station pursuant to a
Local Services Agreement instead of such Pledgor;

 

(vi)          all
Securities Collateral;

 

(vii)         all
Collateral Accounts;

 

(viii)        all
Investment Property;

 

(ix)           all
Intellectual Property Collateral;

 

(x)            the
Commercial Tort Claims described on Schedule 14 to the Perfection
Certificate;

 

(xi)           all
General Intangibles;

 

(xii)          all
Deposit Accounts;

 

(xiii)         all
Supporting Obligations;

 

(xiv)        all
books and records relating to the Collateral; and

 

(xv)         to
the extent not covered by clauses (i) through (xv) of this sentence,
all other personal property of such Pledgor, whether tangible or intangible and
all Proceeds and products of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and products of, each of
the foregoing, any and all Proceeds of any insurance, indemnity, warranty or
guaranty payable to such Pledgor from time to time with respect to any of the
foregoing.

 

Notwithstanding
anything to the contrary contained in clauses (i) through (xv) above,
the security interest created by this Agreement shall not extend to, and the
term “Collateral” shall not include, any Excluded Property and from and after
the Closing Date, no Pledgor shall permit to become effective in any document
creating, governing or providing for any permit, lease or license, a provision
that would prohibit the creation of a Lien on such permit, lease

 

10

 

or license in
favor of the Collateral Agent unless such Pledgor believes, in its reasonable
judgment, that such prohibition is usual and customary in transactions of such
type or, in the case of an FCC license, would be prohibited by any Requirement
of Law.

 

SECTION 2.2.        FCC
Licenses as Collateral.  For the
avoidance of doubt, the parties hereby agree that the term “Collateral” shall
not include any FCC licenses held by any Pledgor to the extent that any
Requirement of Law applicable thereto prohibits the creation of a security interest
therein but shall include:  (i) the
right to receive any payment of money (including, without limitation, general
intangibles for money due or to become due); and (ii) any proceeds,
products, offspring, accessions, rents, profits, income, benefits,
substitutions or replacements of any FCC License (unless such proceeds,
products, offspring, accessions, rents profits, income, benefits, substitutions
or replacements itself would constitute an FCC License to the extent that any
Requirements of Law applicable thereto prohibits the creation of a security interest
therein).

 

SECTION 2.3.        Filings.  (a)  Each Pledgor authorizes the Collateral
Agent to file for each such Pledgor and in each such jurisdiction listed on
Schedule 6 annexed to the Perfection Certificate, (i) an initial
financing statement, provided by such Pledgor, relating to the Collateral
described herein and containing information required by Article 9 of the
UCC, (ii) any amendment, continuation statement or other instruments of
further assurances, provided by such Pledgor, to continue, maintain or protect
the Collateral Agent’s lien on and security interests in such assets or
property and the first priority thereof (subject to Permitted Collateral Liens)
and, (iii) with respect to the fixture filings relating to Collateral at
any Mortgaged Property, a sufficient description of such property, provided by
such Pledgor, as applicable.  Each
Pledgor further agrees that concurrently with the acquisition by such Pledgor
of any assets or property of the type which constitutes Collateral with a fair
market value (as determined by the Board of Directors) in excess of $100,000
individually or in the aggregate) or as otherwise stated in this Agreement, it
authorizes the Collateral Agent to file UCC financing statements or take such
other actions as necessary or desirable to perfect and protect, or enable the
Collateral Agent to perfect and protect, the Collateral Agent’s lien on and
security interest in such assets or property and the first priority thereof
(subject only to Permitted Collateral Liens).

 

(b)           Each
Pledgor hereby ratifies its authorization for the Collateral Agent to file in
any relevant jurisdiction any initial financing statements or amendments
thereto relating to the Collateral if filed prior to the date hereof.

 

(c)           Each
Pledgor hereby authorizes the Collateral Agent to file, upon consummation of
this Agreement, the filings and relevant agreements attached as
Schedule 13(e) annexed to the Perfection Certificate with the United
States Patent and Trademark Office or United States Copyright Office (or any
successor office or any similar office in any other country) to preserve,
protect and perfect the security interests in the Copyrights, Trademarks and
Patents set forth on Schedule 13(c) and Schedule 13(d) annexed
to the Perfection Certificate.  Each
Pledgor further covenants that it will provide the Collateral Agent with and
authorizes the Collateral Agent to file with respect to any Intellectual
Property Collateral that the Pledgor, from time to time, after the date hereof,
shall be required to pledge pursuant to the Indenture, the appropriate form in
the United States Patent and Trademark Office or United States Copyright

 

11

 

office, as the case may be,
provided by the Pledgor, within 20 business days after the acquisition of such
Collateral.

 

ARTICLE III

 

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF COLLATERAL

 

SECTION 3.1.        Delivery
of Certificated Securities Collateral. 
Each Pledgor represents and warrants that all certificates, agreements
or instruments representing or evidencing the Securities Collateral in
existence on the date hereof have been delivered to the Collateral Agent in
suitable form for transfer by delivery or accompanied by duly executed instruments
of transfer or assignment in blank and that the Collateral Agent has a
perfected first priority security interest therein.  Each Pledgor hereby agrees that all
certificates, agreements or instruments representing or evidencing Securities
Collateral acquired by such Pledgor after the date hereof shall immediately
upon receipt thereof by such Pledgor be delivered to and held by or on behalf
of the Collateral Agent pursuant hereto. 
All certificated Securities Collateral shall be in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Collateral Agent.  The Collateral Agent
shall have the right, at any time upon the occurrence and during the
continuance of any Event of Default, to endorse, assign or otherwise transfer
to or to register in the name of the Collateral Agent or any of its nominees or
endorse for negotiation any or all of the Securities Collateral, without any
indication that such Securities Collateral is subject to the security interest
hereunder.  In addition, upon the
occurrence and during the continuance of an Event of Default, the Collateral
Agent shall have the right at any time to exchange certificates representing or
evidencing Securities Collateral for certificates of smaller or larger denominations.

 

SECTION 3.2.        Perfection
of Uncertificated Securities Collateral. 
Each Pledgor represents and warrants that the Collateral Agent has a perfected
first priority security interest in all uncertificated Pledged Securities
pledged by it hereunder that is in existence on the date hereof.  Each Pledgor hereby agrees that if any of the
Pledged Securities are at any time not evidenced by certificates of ownership,
then each applicable Pledgor shall, to the extent permitted by applicable law
if necessary or desirable to perfect a security interest in such Pledged Securities,
cause such pledge to be recorded on the equity holder register or the books of
the issuer, cause the issuer to execute and deliver to the Collateral Agent an
acknowledgment of the pledge of such Pledged Securities substantially in the
form of Exhibit 1 annexed hereto, execute any customary pledge
forms or other documents necessary or appropriate to complete the pledge and
give the Collateral Agent the right to transfer such Pledged Securities under
the terms hereof and provide to the Collateral Agent an opinion of counsel
confirming such pledge and perfection thereof, if the value of such Pledged
Securities exceeds $100,000.

 

SECTION 3.3.        Financing
Statements and Other Filings; Maintenance of Perfected Security Interest.  Each Pledgor represents and warrants that all
filings necessary to perfect the security interest granted by it to the Collateral
Agent in respect of the Collateral have been delivered to the Collateral Agent
in completed and, to the extent necessary or appropriate, duly executed form
for filing in each governmental, municipal or other office specified in
Schedule 6 annexed to the Perfection Certificate.  Each Pledgor agrees that at the sole cost and

 

12

 

expense of the Pledgors,
(i) such Pledgor will maintain the security interest created by this
Agreement in the Collateral as a perfected first priority security interest and
shall defend such security interest against the claims and demands of all
persons except Permitted Collateral Liens, which are permitted to be prior to
the Liens created by this Agreement and (ii) at any time and from time to
time the Pledgor shall promptly and duly execute and deliver, and file and have
recorded, such further instruments and documents and take such further action
as necessary for the purpose of obtaining the full benefits of this Agreement
and the rights and powers herein granted, including the filing of any financing
statements, continuation statements and other documents (including this
Agreement) under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interest created hereby and
the execution and delivery of Control Agreements, in such offices (including
the United States Patent and Trademark Office and the United States Copyright
Office) wherever required by law to perfect, continue and maintain a valid,
enforceable, security interest in the Collateral as provided herein and to
preserve the other rights and interests granted to the Collateral Agent hereunder,
as against third parties, with respect to the Collateral.

 

SECTION 3.4.        Other
Actions.  In order to further insure
the attachment, perfection and priority of, and the ability of the Collateral
Agent to enforce, the Collateral Agent’s security interest in the Collateral,
each Pledgor represents and warrants (as to itself) as follows and agrees, in
each case at such Pledgor’s own expense, to take the following actions with
respect to the following Collateral:

 

(a)           Instruments and
Tangible Chattel Paper. 
(i)  No amounts payable under or in connection with any of the
Collateral are evidenced by any Instrument or Tangible Chattel Paper other than
such Instruments and Tangible Chattel Paper listed in Schedule 11 annexed
to the Perfection Certificate and (ii) each Instrument and each item of
Tangible Chattel Paper listed in Schedule 11 annexed to the Perfection
Certificate has been properly endorsed, assigned and delivered to the
Collateral Agent, accompanied by instruments of transfer or assignment duly
executed in blank.  If any amount then payable
under or in connection with any of the Collateral shall be evidenced by any
Instrument or Tangible Chattel Paper, and such amount, together with all
amounts payable evidenced by any instrument or Tangible Chattel Paper not
previously delivered to the Collateral Agent has a fair market value (as
determined by the Board of Directors) of the Issuer in excess of $100,000 in
the aggregate for all Pledgors, the Pledgor acquiring such Instrument or
Tangible Chattel Paper shall forthwith endorse, assign and deliver the same to
the Collateral Agent, accompanied by such instruments of transfer or assignment
duly executed in blank as the Collateral Agent may from time to time specify.

 

(b)           Deposit Accounts.  (i)  Each Pledgor has neither
opened nor maintains any Deposit Accounts other than the accounts listed in
Schedule 15 annexed to the Perfection Certificate and (ii) the
Collateral Agent has a perfected first priority security interest in each
Deposit Account listed in Schedule 15 annexed to the Perfection
Certificate by Control.  No Pledgor shall
hereafter establish and maintain any Deposit Account (other than a Deposit
Account that is Special Property) unless (1) the applicable Pledgor shall
have given the Collateral Agent 30 days’ prior written notice of its
intention to establish such new Deposit Account with a Bank and (2) such
Bank and such Pledgor shall have duly executed and delivered to the Collateral
Agent a Deposit Account Control Agreement

 

13

 

with respect
to such Deposit Account.  Each Pledgor agrees
that at the time it establishes any additional Deposit Accounts (other than a
Deposit Account that constitutes Special Property) it shall enter into a duly
authorized, executed and delivered Deposit Account Control Agreement with
respect to such Deposit Account.  The
Collateral Agent agrees with each Pledgor that the Collateral Agent shall not
give any instructions directing the disposition of funds from time to time
credited to any Deposit Account or withhold any withdrawal rights from such
Pledgor with respect to funds from time to time credited to any Deposit Account
unless an Event of Default has occurred and is continuing.  Notwithstanding any other provision in this
Agreement, prior to an acceleration of the Notes by the Trustee or the Holders
thereof in accordance with the Indenture, the Issuer and the Guarantors shall
also be entitled, without any release or consent of the Collateral Agent, to
use cash or Cash Equivalents to pay operating expenses and to pay interest on
the Notes.  No Pledgor shall grant
Control of any Deposit Account constituting Collateral to any person other than
the Collateral Agent.

 

(c)           Investment Property.  (i)  Each Pledgor (1) has no
Securities Accounts or Commodity Accounts other than those listed in
Schedule 15 annexed to the Perfection Certificate and the Collateral Agent
has a perfected first priority security interest in such Securities Accounts
and Commodity Accounts by Control, (2) does not hold, own or have any
interest in any certificated securities or uncertificated securities other than
those constituting Pledged Securities and those maintained in Securities
Accounts or Commodity Accounts listed in Schedule 15 annexed to the
Perfection Certificate and (3) as of the date hereof, has entered into a
duly authorized, executed and delivered Securities Account Control Agreement or
a Commodity Account Control Agreement with respect to each Securities Account
or Commodity Account listed in Schedule 15 annexed to the Perfection
Certificate, as applicable.

 

(ii)           If any Pledgor shall at
any time hold or acquire any certificated securities constituting Investment
Property having a fair market value (as determined by the Board of Directors of
the Issuer) in excess of $100,000, such Pledgor shall promptly
(a) endorse, assign and deliver the same to the Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed in
blank, all in form and substance reasonably satisfactory to the Collateral
Agent or (b) deliver such securities into a Securities Account with
respect to which a Control Agreement is in effect in favor of the Collateral
Agent.  If any securities now or
hereafter acquired by any Pledgor constituting Investment Property are
uncertificated and are issued to such Pledgor or its nominee directly by the
issuer thereof, such Pledgor shall promptly notify the Collateral Agent thereof
and pursuant to an agreement in form and substance satisfactory to the
Collateral Agent, either (a) cause the issuer to agree to comply with
instructions from the Collateral Agent as to such securities, without further
consent of any Pledgor or such nominee, (b) cause a Security Entitlement
with respect to such uncertificated security to be held in a Securities Account
with respect to which the Collateral Agent has Control or (c) arrange for
the Collateral Agent to become the registered owner of the securities.  Pledgor shall not hereafter establish and
maintain any Securities Account or Commodity Account with any Securities Intermediary
or Commodity Intermediary unless (1) the applicable Pledgor shall have
given the Collateral Agent 30 days’ prior written notice of its intention
to establish such new Securities Account or Commodity Account with such
Securities Intermediary

 

14

 

or Commodity
Intermediary, (2) such Securities Intermediary or Commodity Intermediary
shall be reasonably acceptable to the Collateral Agent and (3) such
Securities Intermediary or Commodity Intermediary, as the case may be, and such
Pledgor shall have duly executed and delivered a Control Agreement with respect
to such Securities Account or Commodity Account, as the case may be.  Each Pledgor shall accept any cash and
Investment Property, other than Special Property, in trust for the benefit of
the Collateral Agent and within two (2) Business Days of actual
receipt thereof, deposit any cash or Investment Property, other than Special
Property, and any new securities, instruments, documents or other property by
reason of ownership of the Investment Property (other than payments of a kind
described in Section 7.4 hereof) received by it into a Controlled
Account.  The Collateral Agent agrees
with each Pledgor that the Collateral Agent shall not give any Entitlement
Orders or instructions or directions to any issuer of uncertificated
securities, Securities Intermediary or Commodity Intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing rights by
such Pledgor, unless an Event of Default has occurred and is continuing (or, in
the case of cash or Cash Equivalents, until the maturity of the Notes has been
accelerated by the holders thereof in accordance with the Indenture) or, after
giving effect to any such investment and withdrawal rights would occur.  The provisions of this Section 3.4(c) shall
not apply to any Financial Assets credited to a Securities Account for which
the Collateral Agent is the Securities Intermediary.  No Pledgor shall grant control over any
Investment Property other than Special Property to any person other than the
Collateral Agent.

 

(iii)          As between the
Collateral Agent and the Pledgors, the Pledgors shall bear the investment risk
with respect to the Investment Property and Pledged Securities, and the risk of
loss of, damage to, or the destruction of the Investment Property and Pledged
Securities, whether in the possession of, or maintained as a security
entitlement or deposit by, or subject to the control of, the Collateral Agent,
a Securities Intermediary, Commodity Intermediary, any Pledgor or any other person;
provided, however, that nothing contained in this Section 3.4(c) shall
release or relieve any Securities Intermediary or Commodity Intermediary of its
duties and obligations to the Pledgors or any other person under any Control
Agreement or under applicable law.  Each
Pledgor shall promptly pay all Claims and fees of whatever kind or nature with
respect to the Investment Property and Pledged Securities pledged by it under
this Agreement other than Contested Claims.

 

(d)           Electronic Chattel
Paper and Transferable Records.  No
amount under or in connection with any of the Collateral is evidenced by any
Electronic Chattel Paper or any “transferable record” (as that term is defined
in Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act
as in effect in any relevant jurisdiction) other than such Electronic Chattel
Paper and transferable records listed in Schedule 11 annexed to the
Perfection Certificate.  If any amount
payable under or in connection with any of the Collateral shall be evidenced by
any Electronic Chattel Paper or any transferable record, the Pledgor acquiring
such Electronic Chattel Paper or transferable record shall promptly notify the
Collateral Agent thereof and shall take such action within 5 business days as
necessary to vest in the Collateral Agent control under UCC Section 9-105
of such Electronic Chattel Paper or control under Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or, as the
case may be, Section 16 of the Uniform Electronic

 

15

 

Transactions
Act, as so in effect in such jurisdiction, of such transferable record.  The requirement in the preceding sentence
shall apply to the extent that such amount, together with all amounts payable
evidenced by Electronic Chattel Paper or any transferable record in which the
Collateral Agent has not been vested control within the meaning of the statutes
described in this sentence has a fair market value (as determined by the Board
of Directors of the Issuer) in excess of $100,000 in the aggregate for all
Pledgors.  The Collateral Agent agrees
with such Pledgor that the Collateral Agent will arrange, pursuant to procedures
satisfactory to the Collateral Agent and so long as such procedures will not
result in the Collateral Agent’s loss of control, for the Pledgor to make
alterations to the Electronic Chattel Paper or transferable record permitted
under UCC Section 9-105 or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or
Section 16 of the Uniform Electronic Transactions Act for a party in
control to allow without loss of control, unless an Event of Default has occurred
and is continuing or would occur after taking into account any action by such
Pledgor with respect to such Electronic Chattel Paper or transferable record.

 

(e)           Letter-of-Credit
Rights.  If any Pledgor is at any
time a beneficiary under a hereafter issued Letter of Credit in favor of such
Pledgor, such Pledgor shall using commercially reasonable efforts promptly
notify the Collateral Agent thereof and such Pledgor shall using commercially
reasonable efforts pursuant to an agreement in form and substance reasonably
satisfactory to the Collateral Agent, either (i) arrange for the issuer
and any confirmer of such Letter of Credit to consent to an assignment to the
Collateral Agent of the proceeds of any drawing under the Letter of Credit or
(ii) arrange for the Collateral Agent to become the transferee beneficiary
of such Letter of Credit, with the Collateral Agent agreeing, in each case,
that the proceeds of any drawing under the Letter of Credit are to be applied
as provided in the Indenture.  The actions
in the preceding sentence shall be taken to the extent that the amount under
such Letter of Credit, together with all amounts under Letters of Credit for
which the actions described above in clause (i) and (ii) have
not been taken, exceeds $100,000 in the aggregate for all Pledgors.

 

(f)            Commercial Tort
Claims.  As of the date hereof each
Pledgor hereby represents and warrants that it holds no Commercial Tort Claims
other than those listed in Schedule 14 annexed to the Perfection
Certificate.  If any Pledgor shall at any
time hold or acquire a Commercial Tort Claim having a value together with all
other Commercial Tort Claims of all Pledges in which the Collateral Agent does
not have a security interest in excess of $100,000 in the aggregate, such Pledgor
shall immediately notify the Collateral Agent in writing signed by such Pledgor
of the brief details thereof and grant to the Collateral Agent in such writing
a security interest therein and in the Proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Agent.

 

(g)           Vehicles.  In the event the aggregate value of Vehicles
(and any other Equipment covered by Certificates of Title or ownership) for
which there has been no lien perfected, exceeds $1,000,000 in the aggregate,
such Pledgor shall, within 30 days thereof, file all applications for
certificates of title/ownership indicating the Collateral Agent’s security
interest in such Vehicles (and any such other Equipment) covered by

 

16

 

such
certificate, and any other necessary documentation, in each office in each
jurisdiction necessary or desirable to perfect and protect the Collateral
Agent’s lien on and security interest in such Vehicles (and Equipment) and the
first priority thereof (subject only to Permitted Collateral Liens).

 

SECTION 3.5.        Joinder
of Additional Guarantors.  The
Pledgors shall cause each Restricted Subsidiary of the Issuer which, from time
to time, after the date hereof shall be required to pledge any assets to the
Collateral Agent for the benefit of the Secured Parties pursuant to the
provisions of the Indenture, (a) to execute and deliver to the Collateral
Agent (i) a Joinder Agreement substantially in the form of Exhibit 3
annexed hereto within thirty (30) Business Days on which it was acquired or
created and (ii) a Perfection Certificate, in each case, within
thirty (30) Business Days of the date on which it was acquired or created.  The execution and delivery of such Joinder
Agreement shall not require the consent of any Pledgor hereunder.  The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor and Pledgor as a party to this Agreement.

 

SECTION 3.6.        Supplements;
Further Assurances.  Each Pledgor
shall take such further actions, and to execute and deliver to the Collateral
Agent such additional assignments, agreements, supplements, powers and
instruments, wherever required by law, in order to perfect, preserve and
protect the security interest in the Collateral as provided herein and the
rights and interests granted to the Collateral Agent hereunder, to carry into
effect the purposes hereof or better to assure and confirm unto the Collateral
Agent the Collateral or permit the Collateral Agent to exercise and enforce its
rights, powers and remedies hereunder with respect to any Collateral.  Without limiting the generality of the
foregoing, each Pledgor shall make, execute, endorse, acknowledge, file or
refile and/or deliver to the Collateral Agent from time to time such lists,
descriptions and designations of the Collateral, copies of warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, supplements,
additional security agreements, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments as necessary to perfect, preserve and protect the security interest
in the Collateral as required by the UCC or as the Collateral Agent shall
reasonably request.  If an Event of
Default has occurred and is continuing, the Collateral Agent may institute and
maintain, in its own name or in the name of any Pledgor, such suits and
proceedings as necessary or expedient to prevent any impairment of the security
interest in or the perfection thereof in the Collateral.  All of the foregoing shall be at the sole
cost and expense of the Pledgors.

 

ARTICLE IV

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Each Pledgor
represents, warrants and covenants as follows after giving effect to the
issuance of the Senior Secured Notes and the application of the proceeds
thereof:

 

SECTION 4.1.        Title.  Except for the security interest granted to
the Collateral Agent for the ratable benefit of the Secured Parties pursuant to
this Agreement and Permitted Liens, such Pledgor owns and, as to Collateral acquired
by it from time to time after the date hereof, will own the rights in each item
of Collateral pledged by it hereunder free and clear of

 

17

 

any and all
Liens or claims of others other than Permitted Collateral Liens.  Such Pledgor has not filed, nor authorized
any third party to file a financing statement or other public notice with respect
to all or any part of the Collateral on file or of record in any public office,
except such as have been filed in favor of the Collateral Agent pursuant to
this Agreement or as are permitted by the Indenture or financing statements or
public notices relating to the termination statements listed on Schedule 8
to the Perfection Certificate.  No person
other than the Collateral Agent has control or possession of all or any part of
the Collateral, except as permitted by the Indenture.

 

SECTION 4.2.        Validity
of Security Interest.  The security
interest in and Lien on the Collateral granted to the Collateral Agent for the
benefit of the Secured Parties hereunder constitutes (a) a legal and valid
security interest in all the Collateral securing the payment and performance of
the Senior Secured Obligations, and (b) subject to the filings and other
actions described in Schedule 6 annexed to the Perfection Certificate, a
perfected security interest in all the Collateral.  The security interest and Lien granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement in and on the Collateral will at all times constitute a perfected,
continuing security interest therein, subject only to Permitted Collateral
Liens and subject to the provisions of Sections 10.5, 10.6, 10.7 and 11.4
of the Indenture.

 

SECTION 4.3.        Defense
of Claims; Transferability of Collateral. 
Each Pledgor shall, at its own cost and expense, defend title to the Collateral
pledged by it hereunder and the security interest therein and Lien thereon
granted to the Collateral Agent and the priority thereof against all claims and
demands of all persons, at its own cost and expense, at any time claiming any
interest therein adverse to the Collateral Agent or any other Secured Party
other than Permitted Collateral Liens (other than Contested Liens).

 

SECTION 4.4.        Other
Financing Statements.  It has not
filed, nor authorized any third party to file (nor will there be any) valid or
effective financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or purporting to cover
any interest of any kind in the Collateral other than financing statements and
other statements and instruments relating to Permitted Collateral Liens.  So long as any of the Senior Secured
Obligations remain unpaid, no Pledgor shall execute, authorize or permit to be
filed in any public office any financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) relating to any Collateral,
except financing statements and other statements and instruments filed or to be
filed in respect of and covering the security interests granted by such Pledgor
to the holders of the Permitted Collateral Liens.

 

SECTION 4.5.        Chief
Executive Office; Change of Name; Jurisdiction of Organization.  (a)  Such Pledgor shall not change (i) its
corporate name, (ii) its identity or type of organization or corporate
structure, (iii) its Federal Taxpayer Identification Number or
organizational identification number, if any, or (iv) its jurisdiction of
organization (in each case, including, without limitation, by merging with or
into any other entity, reorganizing, dissolving, liquidating, reincorporating
or incorporating in any other jurisdiction) until (A) it shall have given
the Collateral Agent not less than 30 days’ prior written notice (in the
form of an Officers’ Certificate) of its intention so to do, clearly describing
such change and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (B) with respect to such
change, such Pledgor shall have taken all action necessary to maintain the
perfection and priority of the security interest of the Collateral Agent for
the benefit of the Secured Parties in

 

18

 

the Collateral
intended to be granted hereunder including, without limitation, using commercially
reasonable efforts to obtain waivers of landlord’s or warehousemen’s Liens, if
over $100,000, with respect to such new location, if applicable.  Each Pledgor agrees to promptly provide the Collateral
Agent with certified organizational documents reflecting any of the changes
described in the preceding sentence.  Such
Pledgor also agrees to promptly notify the Collateral Agent of any change in
the location of its chief executive office, its principal place of business,
any office in which it maintains books or records relating to Collateral owned
by it or any office or facility at which Collateral owned by it is located
(including the establishment of any such new office or facility).

 

(b)           The Collateral Agent
may rely on opinions of counsel as to whether any or all UCC financing
statements of the Pledgors need to be amended as a result of any of the changes
described in Section 4.5(a). 
If any Pledgor fails to provide information to the Collateral Agent
about such changes on a timely basis, the Collateral Agent shall not be liable
or responsible to any party for any failure to maintain a perfected security
interest in such Pledgor’s property constituting Collateral, for which the Collateral
Agent needed to have information relating to such changes.  The Collateral Agent shall have no duty to
inquire about such changes if any Pledgor does not inform the Collateral Agent
of such changes, the parties acknowledging and agreeing that it would not be
feasible or practical for the Collateral Agent to search for information on
such changes if such information is not provided by any Pledgor.

 

SECTION 4.6.        Location
of Equipment.  It shall not move any
Equipment (excluding mobile goods) to any location other than one within the
United States until, with respect to such new location, such Pledgor shall have
taken all action necessary to maintain the perfection and priority of the
security interest of the Collateral Agent for the benefit of the Senior Secured
Parties in the Pledged Collateral intended to be granted hereby, including
using commercially reasonable efforts to obtain waivers of landlord’s or
warehousemen’s and/or bailee’s liens if over $100,000 with respect to such new
location, if applicable; provided, that this Section 4.6 shall not
apply to mobile goods.

 

SECTION 4.7.        Due
Authorization and Issuance.  All of
the Initial Pledged Shares have been, and to the extent any Pledged Shares are
hereafter issued, such Pledged Shares will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable.  All of the Initial Pledged Interests have
been fully paid for, and there is no amount or other obligation owing by any
Pledgor to any issuer of the Initial Pledged Interests in exchange for or in
connection with the issuance of the Initial Pledged Interests.

 

SECTION 4.8.        Consents,
etc.  In the event that the Collateral
Agent desires to exercise any remedies, voting or consensual rights or attorney-in-fact
powers set forth in this Agreement and determines it necessary to obtain any
approvals or consents of any Governmental Authority or any other person
therefor, then, upon the reasonable request of the Collateral Agent, such
Pledgor agrees to use its best efforts to assist and aid the Collateral Agent
to obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.

 

SECTION 4.9.        Collateral.  All information set forth herein, including
the schedules annexed hereto, and all information contained in any documents,
schedules and lists

 

19

 

heretofore
delivered to any Secured Party, including the Perfection Certificate and the
schedules thereto, in connection with this Agreement, in each case, relating to
the Collateral, is accurate and complete in all material respects.

 

SECTION 4.10.      Insurance.  In the event that the proceeds of any
insurance claim are paid after the Collateral Agent has exercised its right to
foreclose after an Event of Default, such Net Cash Proceeds shall be paid to
the Collateral Agent to satisfy any deficiency remaining after such foreclosure.

 

SECTION 4.11.      Payment
of Taxes; Compliance with Laws; Contesting Liens; Claims.  Each Pledgor represents and warrants that all
Claims imposed upon or assessed against the Collateral have been paid and
discharged except to the extent such Claims constitute a Lien not yet due and
payable which is a Contested Lien or a Permitted Collateral Lien.  Each Pledgor shall comply with all
Requirements of Law applicable to the Collateral the failure to comply with
which would, individually or in the aggregate, have a Material Adverse Effect.  Each Pledgor may at its own expense contest
the validity, amount or applicability of any Claims so long as the contest
thereof shall be conducted in accordance with, and permitted pursuant to the
provisions of, the Indenture.  Notwithstanding
the foregoing provisions of this Section 4.11, if at any time payment
or performance of any obligation contested by such Pledgor pursuant to this Section 4.11
shall become necessary to prevent the imposition of remedies because of non-payment,
such Pledgor shall pay or perform the same in sufficient time to prevent the imposition
of remedies in respect of such default or prospective default.

 

SECTION 4.12.      Access
to Collateral, Books and Records; Other Information.  Upon reasonable request to each Pledgor, the Collateral
Agent, its agents, accountants and attorneys shall have full and free access to
visit and inspect, as applicable, during normal business hours and such other
reasonable times as may be requested by the Collateral Agent all of the Collateral
and Mortgaged Property including all of the books, correspondence and records
of such Pledgor relating thereto.  The Collateral
Agent and its representatives may examine the same, take extracts therefrom and
make photocopies thereof, and such Pledgor agrees to render to the Collateral
Agent, at such Pledgor’s cost and expense, such clerical and other assistance
as may be reasonably requested by the Collateral Agent with regard thereto.  Such Pledgor shall, at any and all times,
within a reasonable time after written request by the Collateral Agent, furnish
or cause to be furnished to the Collateral Agent, in such manner and in such
detail as may be reasonably requested by the Collateral Agent, additional information
with respect to the Collateral.

 

ARTICLE V

 

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

 

SECTION 5.1.        Pledge
of Additional Securities Collateral. 
Each Pledgor shall, upon obtaining any Pledged Securities of any person,
accept the same in trust for the benefit of the Collateral Agent and forthwith
deliver to the Collateral Agent a pledge amendment, duly executed by such
Pledgor, in substantially the form of Exhibit 2 annexed hereto
(each, a “Pledge Amendment”), and the certificates and other documents
required under Section 3.1 and Section 3.2 hereof in
respect of the additional Pledged Securities which are to be pledged pursuant
to this Agreement, and confirming the attachment of the Lien hereby created on
and in respect of

 

20

 

such additional
Pledged Securities.  Each Pledgor hereby
authorizes the Collateral Agent to attach each Pledge Amendment to this
Agreement and agrees that all Pledged Securities listed on any Pledge Amendment
delivered to the Collateral Agent shall for all purposes hereunder be
considered Collateral.

 

SECTION 5.2.        Voting
Rights; Distributions; etc.  (i)  Unless
and until a payment Default or Event of Default shall have occurred and be
continuing or the maturity of the Notes has been accelerated or the Notes are
otherwise due and payable:

 

(A)          Each
Pledgor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Securities Collateral or any part thereof for any
purpose not inconsistent with the terms or purposes hereof, the Indenture or
any other document evidencing the Senior Secured Obligations;

 

(B)           Each
Pledgor shall be entitled to receive and retain, and to utilize free and clear
of the Lien hereof, any and all Distributions, but only if and to the extent
made in accordance with the provisions of the Indenture; provided, however,
that any and all such Distributions consisting of rights or interests in the
form of securities shall be forthwith delivered to the Collateral Agent to hold
as Collateral and shall, if received by any Pledgor, be received in trust for
the benefit of the Collateral Agent, be segregated from the other property or
funds of such Pledgor and be forthwith delivered to the Collateral Agent as Collateral
in the same form as so received (with any necessary endorsement).

 

(ii)           The Collateral Agent
shall be deemed without further action or formality to have granted to each
Pledgor all necessary consents relating to voting rights and shall, if necessary,
upon written request of any Pledgor and at the sole cost and expense of the
Pledgors, from time to time execute and deliver (or cause to be executed and
delivered) to such Pledgor all such instruments as such Pledgor may reasonably
request in order to permit such Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to Section 5.2(i)(A) hereof
and to receive the Distributions which it is authorized to receive and retain
pursuant to Section 5.2(i)(B) hereof.

 

(iii)          Upon the occurrence and
continuance of a payment Default or Event of Default or the maturity of the
Notes has been accelerated or the Notes are otherwise due and payable:

 

(A)          All
rights of each Pledgor to exercise the voting and other consensual rights it
would otherwise be entitled to exercise pursuant to Section 5.2(i)(A) hereof
shall cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall thereupon have the sole right to exercise such voting and
other consensual rights.

 

(B)           All
rights of each Pledgor to receive Distributions which it would otherwise be
authorized to receive and retain pursuant to Section 5.2(i)(B) hereof
shall cease and all such rights shall thereupon become vested in the Collateral
Agent, which shall thereupon have the sole right to receive and hold as Collateral
such Distributions, subject to releases in accordance with the terms and conditions
of the Indenture.

 

21

 

(iv)          Each Pledgor shall, at
its sole cost and expense, from time to time execute and deliver to the Collateral
Agent appropriate instruments as the Collateral Agent may request in order to
permit the Collateral Agent to exercise the voting and other rights which it
may be entitled to exercise pursuant to Section 5.2(iii)(A) hereof
and to receive all Distributions which it may be entitled to receive under Section 5.2(iii)(B) hereof.

 

(v)           All Distributions which
are received by any Pledgor contrary to the provisions of Section 5.2(iii)(B) hereof
shall be received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Pledgor and shall immediately be paid over
to the Collateral Agent as Collateral in the same form as so received (with any
necessary endorsement).

 

SECTION 5.3.        Organizational
Documents.  Each Pledgor has
delivered to the Collateral Agent true, correct and complete copies of the
Organizational Documents.  The Organizational
Documents are in full force and effect, have not as of the date hereof been
amended or modified except as disclosed to the Collateral Agent, and there is
no existing default by any party thereunder or any event which, with the giving
of notice of passage of time or both, would constitute a default by any party
thereunder.

 

SECTION 5.4.        Certain
Agreements of Pledgors As Issuers and Holders of Equity Interests.  (i)  In the case of each Pledgor
which is an issuer of Securities Collateral, such Pledgor agrees to be bound by
the terms of this Agreement relating to the Securities Collateral issued by it
and will comply with such terms insofar as such terms are applicable to it.

 

(ii)           In the case of each
Pledgor which is a partner in a partnership, limited liability company or other
entity, such Pledgor hereby consents to the extent required by the applicable Organizational
Document to the pledge by each other Pledgor, pursuant to the terms hereof, of
the Pledged Interests in such partnership, limited liability company or other
entity and, upon the occurrence and during the continuance of an Event of
Default, to the transfer of such Pledged Interests to the Collateral Agent or
its nominee and to the substitution of the Collateral Agent or its nominee as a
substituted partner or member in such partnership, limited liability company or
other entity with all the rights, powers and duties of a general partner or a
limited partner or member, as the case may be.

 

ARTICLE VI

 

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

 

SECTION 6.1.        Grant
of License.  For the purpose of
enabling the Collateral Agent, during the continuance of an Event of Default,
to exercise rights and remedies under Article IX hereof at such time
as the Collateral Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Pledgor hereby grants to the Collateral
Agent, to the extent assignable, an irrevocable, non-exclusive, paid-up license
to use, assign, license or sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Pledgor, wherever the same
may be located.  Such license shall
include access to all

 

22

 

media in which
any of the licensed items may be recorded or stored and to all computer
programs used for the compilation or printout hereof.

 

SECTION 6.2.        Protection
of Collateral Agent’s Security.  On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i) diligently
keep adequate records respecting the Intellectual Property Collateral.

 

SECTION 6.3.        After-Acquired
Property.  If any Pledgor shall, at
any time before the Senior Secured Obligations have been paid in full (other
than contingent indemnification Obligations which, pursuant to the provisions
of the Indenture or the Security Documents, survive the termination thereof) (i) obtain
any rights to any additional Intellectual Property or (ii) become entitled
to the benefit of any additional Intellectual Property or any renewal or
extension thereof, including any reissue, division, continuation, or
continuation-in-part of any Intellectual Property, or any improvement on any Intellectual
Property, the provisions hereof shall automatically apply thereto and any such
item enumerated in clause (i) or (ii) of this Section 6.3
with respect to such Pledgor shall automatically constitute Intellectual
Property Collateral if such would have constituted Intellectual Property
Collateral at the time of execution hereof and be subject to the Lien and
security interest created by this Agreement without further action by any party
and if such Intellectual Property has a fair market value (as determined by the
Board of Directors of the Issuer) in excess of $100,000.  Each Pledgor shall promptly (i) provide
to the Collateral Agent written notice of any of the foregoing and (ii) confirm
the attachment of the Lien and security interest created by this Agreement to
any rights described in clauses (i) and (ii) of the immediately
preceding sentence of this Section 6.3 by execution of an
instrument in form reasonably acceptable to the Collateral Agent and the filing
of any instruments or statements as shall be reasonably necessary to preserve,
protect or perfect the Collateral Agent’s security interest in such
Intellectual Property Collateral.  Further,
each Pledgor authorizes the Collateral Agent to modify this Agreement by
amending Schedules 13(c) and 13(d) annexed to the Perfection
Certificate to include any Intellectual Property Collateral acquired or arising
after the date hereof of such Pledgor.

 

SECTION 6.4.        Litigation.  Each Pledgor shall have the right to commence
and prosecute in its own name, as the party in interest, for its own benefit
and at the sole cost and expense of the Pledgors, such applications for
protection of the Intellectual Property Collateral and suits, proceedings or
other actions to prevent the infringement, counterfeiting, unfair competition,
dilution, diminution in value or other damage as are necessary to protect the
Intellectual Property Collateral.  Upon
the occurrence and during the continuance of any Event of Default, the Collateral
Agent shall have the right but shall in no way be obligated to file applications
for protection of the Intellectual Property Collateral and/or bring suit in the
name of any Pledgor, the Collateral Agent or the Secured Parties to enforce the
Intellectual Property Collateral and any license thereunder.  In the event of such suit, each Pledgor shall
do any and all lawful acts and execute any and all documents requested by the Collateral
Agent in aid of such enforcement and the Pledgors shall promptly reimburse and
indemnify the Collateral Agent for all costs and expenses incurred by the Collateral
Agent in the exercise of its rights under this Section 6.4 in
accordance with Section 7.7 of the Indenture.

 

23

 

ARTICLE VII

 

CERTAIN PROVISIONS CONCERNING ACCOUNTS

 

SECTION 7.1.        Maintenance
of Records.  Each Pledgor shall keep
and maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and
all other documentation relating thereto. 
Each Pledgor shall, at such Pledgor’s sole cost and expense, upon the Collateral
Agent’s demand made at any time after the occurrence and during the continuance
of any Event of Default, deliver all tangible evidence of Accounts, including
all documents evidencing Accounts and any books and records relating thereto to
the Collateral Agent or to its representatives (copies of which evidence and
books and records may be retained by such Pledgor).  Upon the occurrence and during the continuance
of any Event of Default, the Collateral Agent may transfer a full and complete
copy of any Pledgor’s books, records, credit information, reports, memoranda
and all other writings relating to the Accounts to and for the use by any person
that has acquired or is contemplating acquisition of an interest in the
Accounts or the Collateral Agent’s security interest therein without the consent
of any Pledgor.

 

SECTION 7.2.        Legend.  Each Pledgor shall legend, at the request of
the Collateral Agent and in form and manner satisfactory to the Collateral
Agent, the Accounts and the other books, records and documents of such Pledgor
evidencing or pertaining to the Accounts with an appropriate reference to the
fact that the Accounts have been assigned to the Collateral Agent for the
benefit of the Secured Parties and that the Collateral Agent has a security
interest therein.

 

SECTION 7.3.        Collection.  Each Pledgor shall cause to be collected from
the Account Debtor of each of the Accounts, as and when due in the ordinary
course of business and consistent with prudent business practice (including Accounts
that are delinquent, such Accounts to be collected in accordance with generally
accepted commercial collection procedures), any and all amounts owing under or
on account of such Account, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Account, except
that any Pledgor may, with respect to an Account, allow in the ordinary course
of business (i) a refund or credit due as a result of returned or damaged
or defective merchandise and (ii) such extensions of time to pay amounts
due in respect of Accounts and such other modifications of payment terms or
settlements in respect of Accounts as shall be commercially reasonable in the
circumstances, all in accordance with such Pledgor’s ordinary course of business
consistent with its collection practices as in effect from time to time.  The costs and expenses (including attorneys’
fees) of collection, in any case, whether incurred by any Pledgor, the Collateral
Agent or any Secured Party, shall be paid by the Pledgors.

 

24

 

ARTICLE VIII

 

TRANSFERS

 

SECTION 8.1.        Transfers
of Collateral.  No Pledgor shall
sell, convey, assign or otherwise dispose of, or grant any option with respect
to, any of the Collateral pledged by it hereunder except as permitted by the Indenture.

 

ARTICLE IX

 

REMEDIES

 

SECTION 9.1.        Remedies.
Upon the occurrence and continuance of a payment Default or Event of Default or
the maturity of the Notes has been accelerated or the Notes are otherwise due
and payable the Collateral Agent may from time to time exercise in respect of
the Collateral, in addition to the other rights and remedies provided for
herein or otherwise available to it, the following remedies:

 

(i)            Personally, or by
agents or attorneys, immediately take possession of the Collateral or any part
thereof, from any Pledgor or any other person who then has possession of any
part thereof with or without notice or process of law, and for that purpose may
enter upon any Pledgor’s premises where any of the Collateral is located,
remove such Collateral, remain present at such premises to receive copies of
all communications and remittances relating to the Collateral and use in
connection with such removal and possession any and all services, supplies,
aids and other facilities of any Pledgor;

 

(ii)           Demand, sue for,
collect or receive any money or property at any time payable or receivable in
respect of the Collateral including instructing the obligor or obligors on any
agreement, instrument or other obligation constituting part of the Collateral
to make any payment required by the terms of such agreement, instrument or
other obligation directly to the Collateral Agent, and in connection with any
of the foregoing, compromise, settle, extend the time for payment and make
other is with respect thereto; provided, however, that in the
event that any such payments are made directly to any Pledgor, prior to receipt
by any such obligor of such instruction, such Pledgor shall segregate all
amounts received pursuant thereto in trust for the benefit of the Collateral
Agent and shall promptly (but in no event later than two (2) Business
Days after receipt thereof) pay such amounts to the Collateral Agent;

 

(iii)          Sell, assign, grant a
license to use or otherwise liquidate, or direct any Pledgor to sell, assign,
grant a license to use or otherwise liquidate, any and all investments made in
whole or in part with the Collateral or any part thereof, and take possession
of the proceeds of any such sale, assignment, license or liquidation;

 

(iv)          Take possession of the Collateral
or any part thereof, by directing any Pledgor in writing to deliver the same to
the Collateral Agent at any place or places so designated by the Collateral
Agent, in which event such Pledgor shall at its own expense:  (A) forthwith cause the same to be moved
to the place or places designated by the Collateral Agent and therewith
delivered to the Collateral Agent, (B) store and keep any Collateral so

 

25

 

delivered to
the Collateral Agent at such place or places pending further action by the Collateral
Agent and (C) while the Collateral shall be so stored and kept, provide
such security and maintenance services as shall be necessary to protect the
same and to preserve and maintain them in good condition.  Each Pledgor’s obligation to deliver the Collateral
as contemplated in this Section 9.1(iv) is of the essence
hereof.  Upon application to a court of
equity having jurisdiction, the Collateral Agent shall be entitled to a decree
requiring specific performance by any Pledgor of such obligation;

 

(v)           Withdraw all moneys,
instruments, securities and other property in any bank, financial securities,
deposit or other account of any Pledgor constituting Collateral for application
to the Senior Secured Obligations as provided in Article X hereof;

 

(vi)          Retain and apply the
Distributions to the Senior Secured Obligations as provided in Article X
hereof;

 

(vii)         Exercise any and all
rights as beneficial and legal owner of the Collateral, including perfecting
assignment of and exercising any and all voting, consensual and other rights
and powers with respect to any Collateral; and

 

(viii)        All the rights and
remedies of a secured party on default under the UCC, and the Collateral Agent
may also in its sole discretion, without notice except as specified in Section 9.2
hereof, sell, assign or grant a license to use the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker’s board or at any of the Collateral Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and at such price or prices and upon
such other terms as the Collateral Agent may deem commercially reasonable.  The Collateral Agent or any other Secured
Party or any of their respective Affiliates may be the purchaser, licensee,
assignee or recipient of any or all of the Collateral at any such sale and shall
be entitled, for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral sold, assigned or
licensed at such sale, to use and apply any of the Senior Secured Obligations owed
to such person as a credit on account of the purchase price of any Collateral
payable by such person at such sale.  Each
purchaser, assignee, licensee or recipient at any such sale shall acquire the
property sold, assigned or licensed absolutely free from any claim or right on
the part of any Pledgor, and each Pledgor hereby waives, to the fullest extent
permitted by law, all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.  The Collateral
Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given.  The Collateral
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.  Each Pledgor hereby waives, to the fullest
extent permitted by law, any claims against the Collateral Agent arising by
reason of the fact that the price at which any Collateral may have been sold,
assigned or licensed at such a private sale was less than the price which might
have been obtained at a public sale, even if the Collateral Agent accepts the
first offer received and does not offer such Collateral to more than one offeree;

 

provided,
however, that in each case prior to the deliver of an Acceleration
Notice in accordance with Section 6.2 of the Indenture, the Pledgor shall
be entitled to obtain a release of the

 

26

 

Collateral Account to use cash
or Cash Equivalents, including cash or Cash Equivalents held in the Collateral
Account, to pay operating expenses and to pay interest on the Notes.

 

SECTION 9.2.        Notice
of Sale.  Each Pledgor acknowledges
and agrees that, to the extent notice of sale or other disposition of Collateral
shall be required by law, ten (10) days’ prior notice to such Pledgor
of the time and place of any public sale or of the time after which any private
sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. 
No notification need be given to any Pledgor if it has signed, after the
occurrence of an Event of Default, a statement renouncing or modifying any
right to notification of sale or other intended disposition.

 

SECTION 9.3.        Waiver
of Notice and Claims.  Each Pledgor
hereby waives, to the fullest extent permitted by applicable law, notice or
judicial hearing in connection with the Collateral Agent’s taking possession or
the Collateral Agent’s disposition of any of the Collateral, including any and
all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law:  (i) all damages occasioned by such
taking of possession, (ii) all other requirements as to the time, place
and terms of sale or other requirements with respect to the enforcement of the Collateral
Agent’s rights hereunder and (iii) all rights of redemption, appraisal,
valuation, stay, extension or moratorium now or hereafter in force under any
applicable law.  The Collateral Agent
shall not be liable for any incorrect or improper payment made pursuant to this
Article IX in the absence of negligence or willful misconduct.  Any sale of, or the grant of options to
purchase, or any other realization upon, any Collateral shall operate to divest
all right, title, interest, claim and demand, either at law or in equity, of
the applicable Pledgor therein and thereto, and shall be a perpetual bar both
at law and in equity against such Pledgor and against any and all persons
claiming or attempting to claim the Collateral so sold, optioned or realized
upon, or any part thereof, from, through or under such Pledgor.

 

SECTION 9.4.        Certain
Sales of Collateral.  (i)  Each
Pledgor recognizes that, by reason of certain prohibitions contained in law,
rules, regulations or orders of any Governmental Authority, the Collateral
Agent may be compelled, with respect to any sale of all or any part of the Collateral,
to limit purchasers to those who meet the requirements of such Governmental Authority.  Each Pledgor acknowledges that any such sales
may be at prices and on terms less favorable to the Collateral Agent than those
obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such restricted sale shall
be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales.

 

(ii)           Each Pledgor recognizes
that, by reason of certain prohibitions contained in the Securities Act, and
applicable state securities laws, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Securities Collateral and
Investment Property, to limit purchasers to persons who will agree, among other
things, to acquire such Securities Collateral or Investment Property for their
own account, for investment and not with a view to the distribution or resale
thereof.  Each Pledgor acknowledges that
any such private sales may be at prices and on terms less favorable to the Collateral
Agent than those obtainable

 

27

 

through a
public sale without such restrictions (including a public offering made
pursuant to a registration statement under the Securities Act), and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the Collateral
Agent shall have no obligation to engage in public sales and no obligation to
delay the sale of any Securities Collateral or Investment Property for the
period of time necessary to permit the issuer thereof to register it for a form
of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would agree to do so.

 

(iii)          Notwithstanding the
foregoing, each Pledgor shall, upon the occurrence and during the continuance
of any Event of Default, at the reasonable request of the Collateral Agent, for
the benefit of the Collateral Agent, cause any registration, qualification
under or compliance with any Federal or state securities law or laws to be
effected with respect to all or any part of the Securities Collateral as soon
as practicable and at the sole cost and expense of the Pledgors.  Each Pledgor will use its commercially
reasonable efforts to cause such registration to be effected (and be kept
effective) and will use its commercially reasonable efforts to cause such
qualification and compliance to be effected (and be kept effective) as may be
so requested and as would permit or facilitate the sale and distribution of
such Securities Collateral including registration under the Securities Act (or
any similar statute then in effect), appropriate qualifications under
applicable blue sky or other state securities laws and appropriate compliance
with all other requirements of any Governmental Authority.  Each Pledgor shall use its commercially
reasonable efforts to cause the Collateral Agent to be kept advised in writing
as to the progress of each such registration, qualification or compliance and
as to the completion thereof, shall furnish to the Collateral Agent such number
of prospectuses, offering circulars or other documents incident thereto as the Collateral
Agent from time to time may request, and shall indemnify and shall cause the
issuer of the Securities Collateral to indemnify the Collateral Agent and all
others participating in the distribution of such Securities Collateral against
all claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission
(or alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading.

 

(iv)          If the Collateral Agent
determines to exercise its right to sell any or all of the Securities
Collateral or Investment Property, upon written request, the applicable Pledgor
shall from time to time furnish to the Collateral Agent all such information as
the Collateral Agent may request in order to determine the number of securities
included in the Securities Collateral or Investment Property which may be sold
by the Collateral Agent as exempt transactions under the Securities Act and the
rules of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.

 

(v)           Each Pledgor further
agrees that a breach of any of the covenants contained in this Section 9.4
will cause irreparable injury to the Collateral Agent and other Secured
Parties, that the Collateral Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 9.4 shall be
specifically enforceable against such Pledgor, and such Pledgor hereby

 

28

 

waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred and
is continuing.

 

SECTION 9.5.        No
Waiver; Cumulative Remedies.  (i)  No
failure on the part of the Collateral Agent to exercise, no course of dealing
with respect to, and no delay on the part of the Collateral Agent in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy; nor shall the Collateral Agent be required
to look first to, enforce or exhaust any other security, collateral or
guaranties.  The remedies herein provided
are cumulative and are not exclusive of any remedies provided by law.

 

(ii)           In the event that the Collateral
Agent shall have instituted any proceeding to enforce any right, power or
remedy under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case, the Pledgors, the Collateral Agent and each other Secured Party shall be
restored to their respective former positions and rights hereunder with respect
to the Collateral, and all rights, remedies and powers of the Collateral Agent
and the other Secured Parties shall continue as if no such proceeding had been
instituted.

 

SECTION 9.6.        Certain
Additional Actions Regarding Intellectual Property.  If any Event of Default shall have occurred
and be continuing, upon the written demand of Collateral Agent, each Pledgor
shall execute and deliver to Collateral Agent an assignment or assignments of
the registered Patents, Trademarks and/or Copyrights and Goodwill and such
other documents as are necessary or appropriate to carry out the intent and
purposes hereof.  Within five (5) Business
Days of written notice thereafter from Collateral Agent, each Pledgor shall
make available to Collateral Agent, to the extent within such Pledgor’s power
and authority, such personnel in such Pledgor’s employ on the date of the Event
of Default as Collateral Agent may reasonably designate to permit such Pledgor
to continue, directly or indirectly, to produce, advertise and sell the
products and services sold by such Pledgor under the registered Patents,
Trademarks and/or Copyrights, and such persons shall be available to perform
their prior functions on Collateral Agent’s behalf.

 

SECTION 9.7.        FCC
Licenses and Regulatory Authorizations. 
(i)  Notwithstanding anything to the contrary contained
herein, the Collateral Agent will not take any action pursuant to this
Agreement which would constitute or result in an assignment of any FCC License,
construction permit or other authorization or a change of control of any Guarantor
that is a License Co. or a Parent of a License Co. if such assignment of FCC
License, construction permit or other authorization or change of control would
require under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC, without
first obtaining such approval of the FCC.

 

(ii)           The Collateral Agent
specifically agrees that (a) voting rights in the Stock of each Guarantor
that is a License Co. or a Parent of a License Co. will remain with the holders
of such voting rights upon and following the occurrence of an Event of Default
unless any required prior approvals of the FCC to the transfer of such voting
rights shall have been obtained;

 

29

 

and (b) prior
to the exercise of voting rights by a purchaser of such Pledged Stock at a
private or public sale, the prior consent of the FCC pursuant to 47 U.S.C. § 310(d) or
any successor provision or applicable law will, if required, be obtained.

 

(iii)          Each Pledgor agrees
after the occurrence of any Event of Default to take any action which the Collateral
Agent may reasonably request in order to obtain and enjoy the full rights and
benefits granted to the Collateral Agent by this Agreement and each other
agreement, instrument and document delivered to the Collateral Agent in
connection herewith, including specifically, at the Pledgor’s own cost and
expense, the use of Pledgor’s best efforts to assist in obtaining approval of
the FCC or any action or transaction contemplated by this Agreement which is
then required by law, and specifically, without limitation, upon request, to
prepare, sign and file with the FCC the assignor’s or transferor’s and licensee’s
portions of any application or applications for consent to assignment of
license, construction permit or other authorization or transfer of control
necessary or appropriate under the FCC’s rules and regulations.  Each Pledgor further consents to the
assignment or transfer of control of any FCC license, construction permit, or
other authorization to a receiver, trustee, or similar official or to any
purchaser of the pledged securities pursuant to any public or private sale, judicial
sale, foreclosure, or exercise of other remedies available to Collateral Agent
as permitted by applicable law.

 

ARTICLE X

 

PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;

APPLICATION OF PROCEEDS

 

SECTION 10.1.      Proceeds
of Casualty Events and Collateral Dispositions.  The Pledgors shall take all actions required
by the Indenture with respect to any Net Loss Proceeds of any Casualty Event or
Net Cash Proceeds from the sale or disposition of any Collateral.

 

SECTION 10.2.      Application
of Proceeds.  The proceeds received
by the Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral pursuant to the exercise by
the Collateral Agent of its remedies shall be applied, together with any other
sums then held by the Collateral Agent pursuant to this Agreement, in accordance
with the Indenture.

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.1.      Concerning
Collateral Agent.  (i)  The
Collateral Agent has been appointed as Trustee pursuant to the Indenture.  In connection with its appointment and acting
hereunder and under all agreements (including the Security Documents)
contemplated herein, the Trustee is entitled to all rights, privileges,
protections, immunities and indemnities provided to it under the Indenture.  The Collateral Agent shall have the right
hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including the
release or substitution of the Collateral), in accordance with this Agreement
and the Indenture.  The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
liable for the negligence or misconduct of any such agents

 

30

 

or attorneys-in-fact
selected by it in good faith.  The Collateral
Agent may resign and a successor Collateral Agent may be appointed in the
manner provided for in the Indenture.  Upon
the acceptance of any appointment as the Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Collateral
Agent under this Agreement, and the retiring Collateral Agent shall thereupon
be discharged from its duties and obligations under this Agreement.  After any retiring Collateral Agent’s
resignation, the provisions hereof shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the Collateral
Agent.

 

(ii)           The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if such Collateral is accorded
treatment substantially equivalent to that which the Collateral Agent, in its
individual capacity, accords its own property consisting of similar instruments
or interests, it being understood that neither the Collateral Agent nor any of
the Secured Parties shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Securities Collateral, whether or not the Collateral
Agent or any other Secured Party has or is deemed to have knowledge of such
matters or (ii) taking any necessary steps to preserve rights against any person
with respect to any Collateral, except as otherwise provided in this Section 11.1.

 

(iii)          The Collateral Agent
shall be entitled to rely upon any written notice, statement, certificate, order
or other document or any telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person, and, with
respect to all matters pertaining to this Agreement and its duties hereunder,
upon advice of counsel selected by it.

 

(iv)          If any item of Collateral
also constitutes collateral granted to Collateral Agent under any other deed of
trust, mortgage, security agreement, pledge or instrument of any type, in the
event of any conflict between the provisions hereof and the provisions of such
other deed of trust, mortgage, security agreement, pledge or instrument of any
type in respect of such collateral, Collateral Agent, in its sole discretion,
shall select which provision or provisions shall control.

 

(v)           Beyond the exercise of
reasonable care in the custody thereof, the Collateral Agent shall have no duty
as to any Collateral in its possession or control or in the possession or
control of any agent or bailee or any income thereon or as to preservation of
rights against prior parties or any other rights pertaining thereto and the Collateral
Agent shall not be responsible for filing any financing or continuation
statements or recording any documents or instruments in any public office at
any time or times otherwise perfecting or maintaining the perfection of any
security interest in the Collateral, except to the extent duly instructed to do
so in writing by a Pledgor or Holder of the Notes, having been provided with
all necessary documentation by such Pledgor or Holder of the Notes, and at the
expense of such Pledgor or Holder of the Notes. 
The Collateral Agent shall be deemed to have exercised reasonable care
in the custody of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which it accords its own
property and shall not be liable or responsible for any loss or diminution

 

31

 

in the value
of any of the Collateral, by reason of the act or omission of any carrier, forwarding
agency or other agent or bailee selected by the Collateral Agent in good faith.

 

(vi)          The Collateral Agent
shall not be responsible for the existence, genuineness or value of any of the
Collateral or for its validity, perfection, priority or enforceability of the Liens
in any of the Collateral, whether impaired by operation of law or by reason of
any of any action or omission to act on its part hereunder, except to the
extent such action or omission constitutes negligence, bad faith, or willful
misconduct on the part of the Collateral Agent, for the validity or sufficiency
of the Collateral or any agreement or assignment contained therein, for the
validity of the title of the Company to the Collateral, for insuring the
Collateral or for the payment of taxes, charges, assessments or Liens upon the
Collateral located in a jurisdiction other than the United States (“Foreign
Collateral”) but shall at the specific request of Holders holding a majority in
aggregate principal amount of the Notes then Outstanding appoint a Person or
Persons to act behalf of the Trustee and the Holders of Senior Secured
Indebtedness with respect to such Foreign Collateral.  Such qualified Person or Person and the
Collateral Agent shall, provided the same are reasonably acceptable to the
Collateral Agent, enter into a collateral assignment pledge agreement,
mortgage, enforcing document or other security agreement purporting to relate
to the Lien or security interest in such item of Foreign Collateral pursuant to
which such Person or Persons shall exercise the rights and remedies of the
Collateral Agent and Noteholders in the Collateral for their respective benefit.  The duties and responsibilities of the
Collateral Agent with respect to any Person or Persons and any Collateral are
limited to those set forth in Article Seven.

 

SECTION 11.2.      Collateral
Agent Appointed Attorney-in-Fact.  Each
Pledgor hereby appoints the Collateral Agent its attorney-in-fact, with full
authority in the place and stead of such Pledgor and in the name of such
Pledgor, or otherwise, from time to time in the Collateral Agent’s discretion
to take any action and to execute any instrument consistent with the terms of
the Indenture, this Agreement and the other Security Documents which are
necessary or advisable or which the Collateral Agent may deem necessary or
advisable to accomplish the purposes hereof. 
The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof.  Each Pledgor hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof.

 

SECTION 11.3.      Continuing
Security Interest; Assignment.  This
Agreement shall create a continuing security interest in the Collateral and
shall (i) be binding upon the Pledgors, their respective successors and
assigns and (ii) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and the other Secured
Parties and each of their respective successors, transferees and assigns.  No other persons (including any other
creditor of any Pledgor) shall have any interest herein or any right or benefit
with respect hereto.  Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign
or otherwise transfer any indebtedness held by it secured by this Agreement to
any other person, and such other person shall thereupon become vested with all
the benefits in respect thereof granted to such Secured Party, herein or
otherwise, subject however, to the provisions of the Indenture.

 

SECTION 11.4.      Termination;
Release.  The Collateral shall be
released from the Lien of this Agreement in accordance with the provisions of
the Indenture.  Upon termination

 

32

 

hereof or any
release of Collateral in accordance with the provisions of the Indenture, the Collateral
Agent shall, upon the request and at the sole cost and expense of the Pledgors,
assign, transfer and deliver to Pledgor, against receipt and without recourse
to or warranty by the Collateral Agent except as to the fact that the Collateral
Agent has not encumbered the released assets, such of the Collateral to be
released (in the case of a release) as may be in possession of the Collateral
Agent and as shall not have been sold or otherwise applied pursuant to the
terms hereof, and, with respect to any other Collateral, proper documents and
instruments (including UCC-3 termination statements or releases) acknowledging
the termination hereof or the release of such Collateral, as the case may be.  The Collateral Agent may conclusively rely on
any certificate delivered to it by the Pledgors stating that the execution of
such documents and release of the Collateral is in accordance with and permitted
by the terms of this Agreement and the Indenture.

 

SECTION 11.5.      Modification
in Writing.  This Agreement may be
amended, modified or waived and Collateral released from the Liens created
hereby, in accordance with the terms of the Indenture, including Sections 9.1,
9.2, 10.5, 10.6, 10.7 and 11.4 of the Indenture.  No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any
departure by any Pledgor therefrom, shall be effective unless the same shall be
made in accordance with the terms of the Indenture and unless in writing and
signed by the Collateral Agent.  Any
amendment, modification or supplement of or to any provision hereof, any waiver
of any provision hereof and any consent to any departure by any Pledgor from
the terms of any provision hereof shall be effective only in the specific
instance and for the specific purpose for which made or given.  Except where notice is specifically required
by this Agreement or any other document evidencing the Senior Secured
Obligations, no notice to or demand on any Pledgor in any case shall entitle
any Pledgor to any other or further notice or demand in similar or other circumstances.

 

SECTION 11.6.      Notices.  Unless otherwise provided herein or in the Indenture,
any notice or other communication herein required or permitted to be given
shall be given in the manner and become effective as set forth in the Indenture,
as to any Pledgor, addressed to it at the address of the Issuer set forth in
the Indenture and as to the Collateral Agent, addressed to it at the address
set forth in the Indenture, or in each case at such other address as shall be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section 11.6.

 

SECTION 11.7.      Governing
Law, Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.  Section 15.8 of the Indenture is
incorporated herein, mutatis mutandis,
as if a part hereof.

 

SECTION 11.8.      Severability
of Provisions.  Any provision hereof
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 

SECTION 11.9.      Execution
in Counterparts.  This Agreement and
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and

 

33

 

delivered
shall be deemed to be an original, but all such counterparts together shall
constitute one and the same agreement.

 

SECTION 11.10.    Business
Days.  In the event any time period
or any date provided in this Agreement ends or falls on a day other than a
Business Day, then such time period shall be deemed to end and such date shall
be deemed to fall on the next succeeding Business Day, and performance herein
may be made on such Business Day, with the same force and effect as if made on
such other day.

 

SECTION 11.11.    Waiver
of Stay.  Each Pledgor covenants (to
the extent it may lawfully do so) that in the event that such Pledgor or any
property or assets of such Pledgor shall hereafter become the subject of a
voluntary or involuntary proceeding under the Code or such Pledgor shall
otherwise be a party to any federal or state bankruptcy, insolvency, moratorium
or similar proceeding to which the provisions relating to the automatic stay
under Section 362 of the Code or any similar provision in any such law is
applicable, then, in any such case, whether or not the Collateral Agent has
commenced foreclosure proceedings under this Agreement, such Pledgor shall not,
and each Pledgor hereby expressly waives their right to (to the extent it may
lawfully do so) at any time insist upon, plead or in any whatsoever, claim or
take the benefit or advantage of any such automatic stay or such similar
provision as it relates to the exercise of any of the rights and remedies (including
any foreclosure proceedings) available to the Collateral Agent as provided in
this Agreement, in any other Collateral Document or any other document
evidencing the Senior Secured Obligations.  Each Pledgor further covenants (to the extent
it may lawfully do so) that it will not hinder, delay or impede the execution
of any power granted herein to the Collateral Agent, but will suffer and permit
the execution of every such power as though no law relating to any stay or
similar provision had been enacted.

 

SECTION 11.12.    No
Credit for Payment of Taxes or Imposition. 
Such Pledgor shall not be entitled to any credit against the principal,
premium, if any, or interest payable under the Indenture, and such Pledgor
shall not be entitled to any credit against any other sums which may become
payable under the terms thereof or hereof, by reason of the payment of any Tax
on the Collateral or any part thereof.

 

SECTION 11.13.    No
Claims Against Collateral Agent.  Nothing
contained in this Agreement shall constitute any consent or request by the Collateral
Agent, express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Collateral or any
part thereof, nor as giving any Pledgor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against the Collateral Agent in respect thereof or any
claim that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the Lien hereof.

 

SECTION 11.14.    No
Release.  Nothing set forth in this
Agreement shall relieve any Pledgor from the performance of any term, covenant,
condition or agreement on such Pledgor’s part to be performed or observed under
or in respect of any of the Collateral or from any liability to any person
under or in respect of any of the Collateral or shall impose any obligation on
the Collateral Agent or any other Secured Party to perform or observe any such
term,

 

34

 

covenant,
condition or agreement on such Pledgor’s part to be so performed or observed or
shall impose any liability on the Collateral Agent or any other Secured Party
for any act or omission on the part of such Pledgor relating thereto or for any
breach of any representation or warranty on the part of such Pledgor contained
in this Agreement or the Indenture, or under or in respect of the Collateral or
made in connection herewith or therewith. 
The obligations of each Pledgor contained in this Section 11.14
shall survive the termination hereof and the discharge of such Pledgor’s other obligations
under this Agreement and the Indenture.

 

SECTION 11.15.    Senior
Secured Obligations Absolute.  All Senior
Secured Obligations of each Pledgor hereunder shall be absolute and
unconditional irrespective of:

 

(i)            any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any Pledgor;

 

(ii)           any
lack of validity or enforceability of the Indenture or any other agreement or
instrument relating thereto;

 

(iii)          any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Senior Secured Obligations, or any other amendment or waiver of
or any consent to any departure from the Indenture or any other agreement or
instrument relating thereto;

 

(iv)          any
pledge, exchange, release or non-perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Senior Secured Obligations;

 

(v)           any
exercise, non-exercise or waiver of any right, remedy, power or privilege under
or in respect hereof the Indenture, except as specifically set forth in a
waiver granted pursuant to the provisions of Section 11.5 hereof;
or

 

(vi)          any
other circumstances which might otherwise constitute a defense available to, or
a discharge of, any Pledgor.

 

35

 

IN WITNESS
WHEREOF, the Pledgors and the Collateral Agent have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first above written.

 

	
   

  	
  GRANITE
  BROADCASTING CORPORATION,

  
	
   

  	
  as Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Lawrence I. Wills

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHANNEL 11
  LICENSE, INC.

  
	
   

  	
  GRANITE
  RESPONSE TELEVISION, INC.

  
	
   

  	
  KBJR
  LICENSE, INC.

  
	
   

  	
  KBJR, INC.

  
	
   

  	
  KBWB
  LICENSE, INC.

  
	
   

  	
  KBWB, INC.

  
	
   

  	
  KSEE
  LICENSE, INC.

  
	
   

  	
  KSEE
  TELEVISION, INC.

  
	
   

  	
  QUEEN CITY
  BROADCASTING OF

  
	
   

  	
  NEW YORK,
  INC.

  
	
   

  	
  WEEK-TV
  LICENSE, INC.

  
	
   

  	
  WKBW-TV
  LICENSE, INC.

  
	
   

  	
  WPTA-TV
  LICENSE, INC.

  
	
   

  	
  WPTA-TV,
  INC.

  
	
   

  	
  WTVH
  LICENSE, INC.

  
	
   

  	
  WXON LICENSE,
  INC.

  
	
   

  	
  WXON, Inc.,

  
	
   

  	
  as Original
  Guarantors

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  Lawrence I. Wills

  
	
   

  	
   

  	
  Title: Vice
  President

  

 

 

	
   

  	
  WTVH, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GRANITE
  BROADCASTING

  CORPORATION,

  
	
   

  	
   

  	
  the Sole
  Member of WTVH, LLC,      

  as Original Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:
  Lawrence I. Wills

  
	
   

  	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

S-2

 

	
   

  	
  THE BANK OF
  NEW YORK,

  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Julie
  Salovitch-Miller

  
	
   

  	
   

  	
  Title: Vice
  President

  

 

S-3Exhibit
10.4

 

 

 

FORM OF

MORTGAGE,
ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

 

BY

 

[                                                       ],

 

Mortgagor,

 

TO

 

[                                                  ],

as Trustee and Collateral
Agent,

 

Mortgagee

 

Securing Principal
Indebtedness of $300,000,000;

 

Dated as of [                 ],
2003

 

 

Relating to
Premises in:

 

[                   ]
County, [                   ]

 

 

 

 

After recording,
please return to:

 

Athy A. Mobilia,
Esq.

Cahill Gordon & Reindel LLP

80 Pine Street

New York, NY  10005

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  PREAMBLE

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  RECITALS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  AGREEMENT

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND INTERPRETATION

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
  Definitions

  	
  2

  
	
  SECTION 1.2

  	
  Interpretation

  	
  7

  
	
  SECTION 1.3

  	
  Resolution of Drafting Ambiguities

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  GRANTS AND SECURED OBLIGATIONS

  
	
   

  
	
  SECTION 2.1

  	
  Grant of Mortgaged Property

  	
  8

  
	
  SECTION 2.2

  	
  Assignment of Leases and Rents

  	
  9

  
	
  SECTION 2.3

  	
  Secured Obligations

  	
  9

  
	
  SECTION 2.4

  	
  Future Advances

  	
  9

  
	
  SECTION 2.5

  	
  No Release

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  REPRESENTATIONS AND WARRANTIES OF MORTGAGOR

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
  Authority and Validity

  	
  10

  
	
  SECTION 3.2

  	
  Warranty of Title

  	
  10

  
	
  SECTION 3.3

  	
  Condition of Mortgaged Property

  	
  11

  
	
  SECTION 3.4

  	
  Leases

  	
  12

  
	
  SECTION 3.5

  	
  Insurance

  	
  12

  
	
  SECTION 3.6

  	
  Charges

  	
  12

  
	
  SECTION 3.7

  	
  Environmental

  	
  12

  
	
  SECTION 3.8

  	
  No Conflicts, Consents, etc

  	
  13

  
	
  [SECTION 3.9

  	
  Benefit to the Mortgagor]

  	
  13

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  CERTAIN COVENANTS OF MORTGAGOR

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
  Preservation of Corporate Existence

  	
  13

  
	
  SECTION 4.2

  	
  Title

  	
  14

  
	
  SECTION 4.3

  	
  Maintenance and Use of Mortgaged Property;
  Alterations

  	
  14

  
	
  SECTION 4.4

  	
  Notices Regarding Certain Defaults

  	
  15

  
	
  SECTION 4.5

  	
  Access to Mortgaged Property, Books and Records;
  Other Information

  	
  15

  
	
  SECTION 4.6

  	
  Limitation on Liens; Transfer Restrictions

  	
  15

  
	
  SECTION 4.7

  	
  Environmental

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  	
   

  
	
  LEASES

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
  Mortgagor’s Affirmative Covenants with Respect to
  Leases

  	
  17

  
	
  SECTION 5.2

  	
  Mortgagor’s Negative Covenants with Respect to
  Leases

  	
  17

  
	
  SECTION 5.3

  	
  Additional Requirements with Respect to New Leases

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  	
   

  
	
  CONCERNING ASSIGNMENT OF LEASES AND RENTS

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
  Present Assignment; License to the Mortgagor

  	
  18

  
	
  SECTION 6.2

  	
  Collection of Rents by the Mortgagee

  	
  18

  
	
  SECTION 6.3

  	
  No Release

  	
  19

  
	
  SECTION 6.4

  	
  Irrevocable Interest

  	
  19

  
	
  SECTION 6.5

  	
  Amendment to Leases

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  	
   

  
	
  TAXES AND CERTAIN STATUTORY LIENS

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
  Payment of Charges

  	
  19

  
	
  SECTION 7.2

  	
  Escrow of Taxes

  	
  19

  
	
  SECTION 7.3

  	
  Certain Statutory Liens

  	
  20

  
	
  SECTION 7.4

  	
  Stamp and Other Taxes

  	
  20

  
	
  SECTION 7.5

  	
  Certain Tax Law Changes

  	
  20

  
	
  SECTION 7.6

  	
   

  	
  Proceeds of Tax Claim

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  	
   

  
	
  INSURANCE

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
  Required Insurance Policies and Coverages

  	
  20

  
	
  SECTION 8.2

  	
  Required Form of Insurance Policies

  	
  22

  
				

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 8.3

  	
  Settlements

  	
  22

  
	
  SECTION 8.4

  	
  Renewals

  	
  22

  
	
  SECTION 8.5

  	
  Additional Insurance

  	
  22

  
	
  SECTION 8.6

  	
  Blanket Coverage

  	
  22

  
	
  SECTION 8.7

  	
  Delivery After Foreclosure

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  	
   

  	
   

  
	
  CONTESTING OF PAYMENTS

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1

  	
  Contesting of Taxes and Certain Statutory Liens

  	
  23

  
	
  SECTION 9.2

  	
  Contesting of Insurance

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
   

  	
   

  	
   

  
	
  DESTRUCTION, CONDEMNATION AND RESTORATION

  
	
   

  	
   

  	
   

  
	
  SECTION 10.1

  	
  Casualty

  	
  23

  
	
  SECTION 10.2

  	
  Condemnation

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT AND REMEDIES

  
	
   

  	
   

  	
   

  
	
  SECTION 11.1

  	
  Events of Default

  	
  24

  
	
  SECTION 11.2

  	
  Remedies in Case of an Event of Default

  	
  24

  
	
  SECTION 11.3

  	
  Sale of Mortgaged Property if Event of Default
  Occurs; Proceeds of Sale

  	
  25

  
	
  SECTION 11.4

  	
  Additional Remedies in Case of an Event of Default

  	
  26

  
	
  SECTION 11.5

  	
  Legal Proceedings After an Event of Default

  	
  26

  
	
  SECTION 11.6

  	
  Remedies Not Exclusive

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  
	
   

  	
   

  	
   

  
	
  SECURITY AGREEMENT AND FIXTURE FILING

  
	
   

  	
   

  	
   

  
	
  SECTION 12.1

  	
  Security Agreement

  	
  28

  
	
  SECTION 12.2

  	
  Fixture Filing

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  
	
   

  	
   

  	
   

  
	
  FURTHER ASSURANCES

  
	
   

  	
   

  	
   

  
	
  SECTION 13.1

  	
  Recording Documentation To Assure Security

  	
  29

  
	
  SECTION 13.2

  	
  Further Acts

  	
  29

  
	
  SECTION 13.3

  	
  Additional Security

  	
  29

  

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  
	
  SECTION 14.1

  	
  Covenants To Run with the Land

  	
  30

  
	
  SECTION 14.2

  	
  No Merger

  	
  30

  
	
  SECTION 14.3

  	
  Concerning Mortgagee

  	
  30

  
	
  SECTION 14.4

  	
  Mortgagee May Perform; Mortgagee Appointed
  Attorney-in-Fact

  	
  31

  
	
  SECTION 14.5

  	
  Expenses

  	
  31

  
	
  SECTION 14.6

  	
  Indemnity

  	
  31

  
	
  SECTION 14.7

  	
  Continuing Security Interest; Assignment

  	
  32

  
	
  SECTION 14.8

  	
  Termination; Release

  	
  32

  
	
  SECTION 14.9

  	
  Modification in Writing

  	
  32

  
	
  SECTION 14.10

  	
  Notices

  	
  33

  
	
  SECTION 14.11

  	
  GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF JURY
  TRIAL

  	
  33

  
	
  SECTION 14.12

  	
  Severability of Provisions

  	
  33

  
	
  SECTION 14.13

  	
  Limitation on Interest Payable

  	
  33

  
	
  SECTION 14.14

  	
  Business Days

  	
  34

  
	
  SECTION 14.15

  	
  Relationship

  	
  34

  
	
  SECTION 14.16

  	
  Waiver of Stay

  	
  34

  
	
  SECTION 14.17

  	
  No Credit for Payment of Taxes or Impositions

  	
  34

  
	
  SECTION 14.18

  	
  No Claims Against the Mortgagee

  	
  35

  
	
  SECTION 14.19

  	
  Obligations Absolute

  	
  35

  
	
  SECTION 14.20

  	
  Last Dollars Secured

  	
  35

  
	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
   

  

 

	
  ACKNOWLEDGMENTS

  	
   

  
	
   

  	
   

  
	
  SCHEDULE A

  	
  Legal Description

  	
   

  
	
  SCHEDULE B

  	
  Prior Liens

  	
   

  
	
  SCHEDULE C

  	
  Leases

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 1

  	
  Form of Subordination,
  Non-Disturbance and Attornment Agreement

  	
   

  

 

iv

 

MORTGAGE, ASSIGNMENT OF
LEASES AND RENTS, SECURITY

AGREEMENT AND FIXTURE FILING

 

MORTGAGE, ASSIGNMENT OF
LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING (as amended, amended
and restated, supplemented, or otherwise modified from time to time, the “Mortgage”),
dated as of [                
              
         ], 2003, made by [       
                        
        ], a [jurisdiction and type of
entity] having an office at [             
                
           ], as
mortgagor, assignor and debtor (in such capacities and together with any successors
in such capacities, the “Mortgagor”), in favor of The Bank of New York,
a [jurisdiction and type of entity] having an office at [                                                ],
in its capacity as Collateral Agent and Trustee pursuant to the Indenture (as
hereinafter defined), as mortgagee, assignee and secured party (in such
capacities and together with any successors in such capacities, the “Mortgagee”).

 

R  E
C  I  T  A  L  S :

 

A.  [Granite Broadcasting Corporation (the “Issuer”),
certain of its Subsidiaries (as hereinafter defined), the Mortgagor and the
Mortgagee have, in connection with the execution and delivery of this Mortgage,
entered into that certain indenture, dated as of the date hereof (as amended,
amended and restated, supplemented, or otherwise modified from time to time,
the “Indenture”), pursuant to which the Issuer has issued its [       ]%
senior secured notes due [       , 2010]
(the “Series A Notes”) in the aggregate principal amount of $300,000,000.  It is contemplated that the Issuer may, after
the date hereof, issue Additional Notes (as defined in the Indenture) and Series
B Notes (as defined in the Indenture); the Series A Notes, together with the
Additional Notes and the Series B Notes, the “Notes”), in each case,
pursuant to the provisions of the Indenture.]

 

[B.  The Issuer owns, directly
or through its Subsidiaries, all of the issued and outstanding shares of the
Mortgagor.]

 

[C.  The Mortgagor has,
pursuant to the Indenture, among other things, unconditionally guaranteed (the “Guarantee”)
the obligations of the Issuer under the Indenture and the Notes.]

 

[D.  The Mortgagor will
receive substantial benefits from the execution and delivery of, and the
performance of the obligations under, the Indenture and the Notes, and is
therefore willing to enter into this Mortgage.]

 

E.  The Mortgagor is or will be the legal owner
of the Mortgaged Property (as hereinafter defined).

 

F.  This Mortgage is given by the Mortgagor in
favor of the Mortgagee for its benefit and the benefit of the Holders of the
Notes (collectively, the “Secured Parties”) to secure the payment and
performance of all of the Secured Obligations (as hereinafter defined).

 

 

A
G  R  E  E  M  E  N  T:

 

NOW THEREFORE, in
consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Mortgagor hereby covenants and agrees with the Mortgagee as follows:

 

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

SECTION 1.1  Definitions.  Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the
Indenture.  The following terms used in
this Mortgage shall have the following meanings:

 

“ACM” shall have
the meaning assigned to such term in Section 4.7(ii) hereof.

 

“Affiliate” shall
have the meaning assigned to such term in the Indenture.

 

“Alteration” shall
mean any and all alterations, installations, improvements, additions, modifications
or changes of a structural nature of or to the Premises.

 

“Business Day”
shall have the meaning assigned to such term in the Indenture.

 

“Casualty” shall
have the meaning assigned to such term in the Indenture.

 

“Charges” shall
mean any and all real estate, property and other taxes, assessments and special
assessments, levies, fees, all water and sewer rents and charges and all other
governmental charges or Liens imposed upon or assessed against, and all claims
(including, without limitation, landlords’, carriers’, mechanics’, workmen’s,
repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and
other claims arising by operation of law) against, all or any portion of the
Mortgaged Property.

 

“Collateral Account”
shall have the meaning assigned to such term in the Indenture.

 

“Condemnation”
shall have the meaning assigned to such term in the Indenture.

 

“Contested Liens”
shall mean, collectively, any Liens incurred in respect of any Charges to the
extent that the amounts owing in respect thereof are not yet delinquent or are
being contested and otherwise comply with the provisions of Section 9.1
hereof.

 

“Contracts” shall
mean, collectively, any and all right, title and interest of the Mortgagor in
and to any and all contracts and other general intangibles relating to the
Mortgaged Property (including, without limitation, all reciprocal easements
and/or operating agreements, covenants, conditions and restrictions and similar
agreements affecting all or any portion of the Mortgaged Property) and all
reserves, deferred payments, deposits, refunds and claims of every kind, nature
or character relating thereto.

 

2

 

“Default Rate”
shall mean the rate per annum equal to the highest rate then payable under the
Indenture.

 

“Environmental Law”
shall have the meaning assigned to such term in the Indenture.

 

“Event of Default”
shall have the meaning assigned to such term in the Indenture.

 

“Fixture” shall
mean all machinery, apparatus, equipment, fittings, fixtures, improvements and
articles of personal property of every kind, description and nature whatsoever
now or hereafter attached or affixed to the Land or any other Improvement or
used in connection with the use and enjoyment of the Land or any other
Improvement or the maintenance or preservation thereof, which by the nature of
their location thereon or attachment thereto are fixtures under the UCC or any
other applicable law including, without limitation, all utility systems, fire
sprinkler and security systems, drainage facilities, lighting facilities, all
water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone
and other utility equipment and facilities, pipes, fittings and other items of
every kind and description now or hereafter attached to or located on the Land
which by the nature of their location thereon or attachment thereto are real
property under applicable law, HVAC equipment, boilers, electronic data
processing, telecommunications or computer equipment, refrigeration, electronic
monitoring, water or lighting systems, power, sanitation, waste removal,
elevators, maintenance or other systems or equipment and all additions thereto
and betterments, renewals, substitutions and replacements thereof.

 

“GAAP” shall have
the meaning assigned to such term in the Indenture.

 

“Governmental
Authority” shall mean any federal, state, local, foreign or other
governmental, quasi-governmental or administrative (including self-regulatory)
body, instrumentality, department, agency, authority, board, bureau,
commission, office of any nature whatsoever or other subdivision thereof, or
any court, tribunal, administrative hearing body, arbitration panel or other
similar dispute-resolving body, whether now or hereafter in existence, or any
officer or official thereof, having jurisdiction over the Mortgagor or the Mortgaged
Property or any portion thereof.

 

[“Guarantee” shall
have the meaning assigned to such term in Recital [C] hereof.]

 

[“Guarantor” shall
have the meaning assigned to such term in the Indenture.]

 

“Hazardous Materials”
shall mean the following:  hazardous
substances; hazardous wastes; polychlorinated biphenyls (“PCBs”)
or any substance or compound containing PCBs; asbestos or any
asbestos-containing materials in any form or condition; radon or any other
radioactive materials including any source, special nuclear or by-product
material; petroleum, crude oil or any fraction thereof; and any other pollutant
or contaminant or chemicals, wastes, materials, compounds, constituents or
substances, subject to regulation or which can give rise to liability under any
Environmental Laws.

 

“Holders” shall
have the meaning assigned to such term in the Indenture.

 

“Improvements”
shall mean all buildings, structures and other improvements of every kind or
description and any and all Alterations now or hereafter located, attached or
erected on the Land including, without limitation, (i) all Fixtures,
(ii) all attachments, railroad tracks, foundations, sidewalks, drives,
roads, curbs, streets, ways, alleys, passages, passageways, sewer rights,
parking areas, driveways, 

 

3

 

fences and walls and (iii) all materials now or
hereafter located on the Land intended for the construction, reconstruction,
repair, replacement, alteration, addition or improvement of or to such
buildings, Fixtures, structures and improvements, all of which materials shall
be deemed to be part of the Improvements immediately upon delivery thereof on the
Land and to be part of the Improvements immediately upon their incorporation
therein.

 

“Indebtedness”
shall have the meaning assigned to such term in the Indenture.

 

“Indemnified
Liabilities” shall have the meaning assigned to such term in Section
14.6(i) hereof.

 

“Indemnitees”
shall have the meaning assigned to such term in Section 14.6(i) hereof.

 

“Indenture” shall
have the meaning assigned to such term in Recital A hereof.

 

“Insurance Certificate”
shall mean a certificate evidencing the Insurance Requirements in form and
substance reasonably satisfactory to the Mortgagee.

 

“Insurance Policies”
means the insurance policies and coverages required to be maintained by the
Mortgagor with respect to the Mortgaged Property pursuant to Article VIII
hereof and all renewals and extensions thereof.

 

“Insurance
Requirements” means, collectively, all provisions of the Insurance
Policies, all requirements of the issuer of any of the Insurance Policies and
all orders, rules, regulations and any other requirements of the National Board
of Fire Underwriters (or any other body exercising similar functions) binding
upon the Mortgagor and applicable to the Mortgaged Property or any use or
condition thereof.

 

“Issuer” shall
have the meaning assigned to such term in Recital A hereof.

 

“Land” shall mean
those certain tracts or parcels of land described in Schedule A annexed
to this Mortgage, together with all of the Mortgagor’s reversionary rights
therein and all of the Mortgagor’s rights in and to any and all easements,
rights-of-way, strips and gores of land, waters, water courses, water rights,
mineral, gas and oil rights and all power, air, light and other rights, estates,
titles, interests, privileges, liberties, servitudes, licenses, tenements,
hereditaments and appurtenances whatsoever, in any way belonging, relating or
appertaining thereto, or any part thereof, or which hereafter shall in any way
belong, relate or be appurtenant thereto.

 

“Landlord” shall
mean any landlord, lessor, franchisor, licensor or grantor, as applicable.

 

“Leases” shall
mean, collectively, any and all interests of the Mortgagor, as Landlord, in all
leases and subleases of space, tenancies, franchise agreements, licenses,
occupancy, rental, access or concession agreements and any other agreements
pursuant to which any Person is granted a possessory interest in or right to
use or occupy all or any portion of the Mortgaged Property, in each case
whether now existing or hereafter entered into, whether or not of record,
relating in any manner to the Premises or the use or occupancy thereof and any
and all amendments, modifications, supplements, replacements, extensions,
renewals and/or guarantees, if any thereof, whether now in effect or hereafter
coming into effect.

 

4

 

“Liability Insurance”
shall mean, collectively, the insurance policies and coverages described in
clauses (ii) and, to the extent applicable, (vi) and (vii) of Section
8.1 hereof.

 

“Lien” shall have
the meaning assigned to such term in the Indenture.

 

“Mortgage” shall
have the meaning assigned to such term in the Preamble hereof.

 

“Mortgaged Property”
shall have the meaning assigned to such term in Section 2.1 hereof.

 

“Mortgagee” shall
have the meaning assigned to such term in the Preamble hereof.

 

“Mortgagor” shall
have the meaning assigned to such term in the Preamble hereof.

 

“Mortgagor’s Interest”
shall have the meaning assigned to such term in Section 2.2 hereof.

 

“Net Loss Proceeds”
shall have the meaning assigned to such term in the Indenture.

 

“Notes” shall have
the meaning assigned to such term in Recital A hereof.

 

“Officers’ Certificate”
shall have the meaning assigned to such term in the Indenture.

 

“Permit” shall
mean any and all permits, certificates, approvals, authorizations, consents,
licenses, variances, franchises or other instruments, however characterized, of
any Governmental Authority (or any Person acting on behalf of a Governmental
Authority) now or hereafter acquired or held, together with all amendments,
modifications, extensions, renewals and replacements of any thereof issued or
in any way furnished in connection with the Mortgaged Property including, without
limitation, building permits, certificates of occupancy, environmental
certificates, industrial permits or licenses and certificates of operation, but
excluding all FCC permits and/or licenses.

 

“Permitted Collateral
Liens” shall have the meaning assigned to such term in the Indenture.

 

“Permitted Liens”
shall have the meaning assigned to such term in the Indenture.

 

“Permitted Real
Property Liens” shall have the meaning assigned to such term in Section
4.6 hereof.

 

“Person” shall
have the meaning assigned to such term in the Indenture.

 

“Premises” shall
mean, collectively, the Land and the Improvements.

 

“Prior Liens”
shall mean, collectively, the Liens identified in Schedule B annexed to
this Mortgage.

 

5

 

“Proceeds” shall
mean, collectively, any and all cash proceeds and noncash proceeds and shall
include, without limitation, all (i) proceeds of the conversion, voluntary
or involuntary, of any of the Mortgaged Property or any portion thereof into
cash or liquidated claims, (ii) proceeds of any insurance (except payments
made to a Person which is not a party to this Mortgage), indemnity, warranty,
guaranty or claim payable to the Mortgagee or to the Mortgagor from time to
time with respect to any of the Mortgaged Property including, without
limitation, all Net Loss Proceeds resulting from a Casualty,
(iii) payments (in any form whatsoever) made or due and payable to the
Mortgagor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any portion of the Mortgaged
Property by any Governmental Authority (or any Person acting on behalf of a
Governmental Authority) including, without limitation, all Net Loss Proceeds
resulting from a Condemnation or any settlement in lieu thereof,
(iv) products of the Mortgaged Property and (v) other amounts from
time to time paid or payable under or in connection with any of the Mortgaged
Property including, without limitation, refunds of real estate taxes and
assessments, including interest thereon.

 

“Property Insurance”
shall mean, collectively, the insurance policies and coverages described in
clauses (i), (iii), (iv), (v) and, to the extent applicable, (vii) of
Section 8.1 hereof.

 

“Property Material
Adverse Effect” shall mean, as of any date of determination and whether
individually or in the aggregate, (a) any event, circumstance, occurrence or
condition which has caused or resulted in (or would reasonably be expected to
cause or result in) a material adverse effect on the business or operations of
the Mortgagor as presently conducted at the Mortgaged Property; (b) any event,
circumstance, occurrence or condition which has caused or resulted in (or would
reasonably be expected to cause or result in) a material adverse effect on the
value or utility of the Mortgaged Property; or (c) any event, circumstance,
occurrence or condition which has caused or resulted in (or would reasonably be
expected to cause or result in) a material adverse effect on the legality,
priority or enforceability of the Lien created by this Mortgage or the rights
and remedies of the Mortgagee hereunder.

 

“Prudent Operator”
shall mean the standard of care taken by a prudent operator of property similar
in use and configuration to the Premises and located in the locality where the
Premises are located..

 

“Records” shall
mean, collectively, any and all right, title and interest of the Mortgagor in
and to any and all drawings, plans, specifications, file materials, operating
and maintenance records, catalogues, tenant lists, correspondence, advertising
materials, operating manuals, warranties, guarantees, appraisals, studies and
data relating to the Mortgaged Property or the construction of any Alteration
or the maintenance of any Permit.

 

“Rents” shall mean,
collectively, any and all rents, additional rents, royalties, issues, cash,
guaranties, letters of credit, bonds, sureties or securities deposited under
any Lease to secure performance of the Tenant’s obligations thereunder,
revenues, earnings, profits and income, advance rental payments, payments
incident to assignment, sublease or surrender of a Lease, claims for forfeited
deposits and claims for damages, now due or hereafter to become due, with
respect to any Lease, any indemnification against, or reimbursement for, sums
paid and costs and expenses incurred by the Mortgagor under any Lease or otherwise,
and any award in the event of the bankruptcy of any Tenant under or guarantor
of a Lease.

 

6

 

“Requirements of Law”
shall mean, collectively, any and all requirements of any Governmental
Authority including, without limitation, any and all orders, decrees,
determinations, laws, treaties, ordinances, rules, regulations or similar
statutes or case law.

 

“Secured Obligations”
shall mean [all obligations (whether or not constituting future advances,
obligatory or otherwise) of the Issuer and any and all of the Guarantors from
time to time arising under or in respect of this Mortgage, the Indenture, the
Notes and the other Security Documents (including, without limitation, the
obligations to pay principal, interest and all other charges, fees, expenses,
commissions, reimbursements, premiums, indemnities and other payments related
to or in respect of the obligations contained in this Mortgage, the Indenture,
the Notes and the other Security Documents), in each case whether (i) such
obligations are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due whether at stated maturity, by
acceleration or otherwise, (ii) arising in the regular course of business or
otherwise, (iii) for payment or performance and/or (iv) now existing or
hereafter arising (including, without limitation, interest and other
obligations arising or accruing after the commencement of any bankruptcy,
insolvency, reorganization or similar proceeding with respect to the Issuer,
any Guarantor or any other Person, or which would have arisen or accrued but
for the commencement of such proceeding, even if such obligation or the claim
therefor is not enforceable or allowable in such proceeding).]

 

“Secured Parties”
shall have the meaning assigned to such term in Recital [F] hereof.

 

“Security Documents”
shall have the meaning assigned to such term in the Indenture.

 

“Series A Notes”
shall have the meaning assigned to such term in Recital A hereof.

 

“Subordination
Agreement” shall mean a subordination, nondisturbance and attornment
agreement substantially in the form of Exhibit 1 annexed to this
Mortgage.

 

“Subsidiaries”
shall have the meaning assigned to such term in the Indenture.

 

“Tax Escrow Fund”
shall have the meaning assigned to such term in Section 7.2 hereof.

 

“Tenant” shall
mean any tenant, lessee, sublessee, franchisee, licensee, grantee or obligee, as
applicable.

 

“UCC” shall mean
the Uniform Commercial Code as in effect on the date hereof in the jurisdiction
in which the Premises are located; provided, however, that if by
reason of mandatory provisions of law, the perfection or the effect of perfection
or non-perfection of the security interest in any item or portion of the
Mortgaged Property is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the jurisdiction in which the Premises are located, “UCC”
shall also mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection.

 

SECTION 1.2  Interpretation.  In this Mortgage, unless otherwise specified,
(i) singular words include the plural and plural words include the singular,
(ii) words importing any gender include the other gender, (iii) references to
any Person include such Person’s successors and assigns and in the case of an
individual, the word “successors” includes such Person’s heirs, devisees, legatees,
executors, administrators 

 

7

 

and personal representatives, (iv) references to any
statute or other law include all applicable rules, regulations and orders
adopted or made thereunder and all statutes or other laws amending,
consolidating or replacing the statute or law referred to, (v) the words “consent,”
“approve” and “agree,” and derivations thereof or words of similar import, mean
the prior written consent, approval or agreement of the Person in question not
to be unreasonably withheld, (vi) the words “include” and “including,” and
words of similar import, shall be deemed to be followed by the words “without
limitation,” (vii) the words “hereto,” “herein,” “hereof” and “hereunder,” and
words of similar import, refer to this Mortgage in its entirety, (viii)
references to Articles, Sections, Schedules, Exhibits, subsections, paragraphs
and clauses are to the Articles, Sections, Schedules, Exhibits, subsections,
paragraphs and clauses hereof, (ix) the Schedules and Exhibits to this
Mortgage, in each case as amended, amended and restated, supplemented or
otherwise modified from time to time in accordance with the provisions hereof,
are incorporated herein by reference, (x) the titles and headings of Articles,
Sections, Schedules, Exhibits, subsections, paragraphs and clauses are inserted
as a matter of convenience only and shall not affect the constructions of any
provisions hereof and (xi) all obligations of the Mortgagor hereunder shall be
satisfied by the Mortgagor at the Mortgagor’s sole cost and expense..

 

SECTION 1.3  Resolution
of Drafting Ambiguities.  The
Mortgagor acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery hereof, that it and its counsel
reviewed and participated in the preparation and negotiation hereof and that
any rule of construction to the effect that ambiguities are to be resolved
against the drafting party (i.e., Mortgagee) shall not be employed in
the interpretation hereof.

 

ARTICLE II

 

GRANTS AND SECURED OBLIGATIONS

 

SECTION 2.1  Grant
of Mortgaged Property.  The Mortgagor
hereby grants, mortgages, bargains, sells, assigns and conveys to the Mortgagee
(for its benefit and for the benefit of the other Secured Parties), and hereby
grants to the Mortgagee (for its benefit and for the benefit of the other
Secured Parties), a security interest in and upon all of the Mortgagor’s
estate, right, title and interest in, to and under the following property,
whether now owned or held or hereafter acquired from time to time
(collectively, the “Mortgaged Property”):

 

(i)      Land;

 

(ii)     Improvements;

 

(iii)    Leases;

 

(iv)    Rents;

 

(v)     Permits;

 

(vi)    Contracts;

 

(vii)   Records; and

 

8

 

(viii)  Proceeds;

 

TO HAVE AND TO HOLD the
Mortgaged Property, together with all estate, right, title and interest of the
Mortgagor and anyone claiming by, through or under the Mortgagor in and to the
Mortgaged Property and all rights and appurtenances relating thereto, unto the
Mortgagee, its successors and assigns, for the purpose of securing the payment
and performance in full of all the Secured Obligations.

 

SECTION 2.2  Assignment of Leases and Rents.  During the term hereof, the Mortgagor
absolutely, presently, unconditionally and irrevocably pledges, grants, sells,
conveys, delivers, hypothecates, assigns, transfers and sets over to the Mortgagee
(for its benefit and for the benefit of the other Secured Parties), and grants
to the Mortgagee (for its benefit and for the benefit of the other Secured
Parties), subject to the terms of Article VI hereof, all of the Mortgagor’s
estate, right, title, interest, claim and demand, as Landlord, under any and
all of the Leases including, without limitation, the following (such assigned
rights, the “Mortgagor’s Interest”):

 

(i)      the immediate and continuing
right to receive and collect Rents payable by the Tenants pursuant to the
Leases;

 

 (ii)     all
claims, rights, powers, privileges and remedies of the Mortgagor, whether provided
for in the Leases or arising by statute or at law or in equity or otherwise,
consequent on any failure on the part of the Tenants to perform or comply with
any term of the Leases including damages or other amounts payable to the
Mortgagor as a result of such failure;

 

 (iii)    all
rights to take all actions upon the happening of a default under the Leases as
shall be permitted by the Leases or by law including, without limitation, the
commencement, conduct and consummation of proceeding at law or in equity; and

 

 (iv)    the
full power and authority, in the name of the Mortgagor or otherwise, to
enforce, collect, receive and receipt for any and all of the foregoing and to
take all other actions whatsoever which the Mortgagor, as Landlord, is or may
be entitled to take under the Leases.

 

SECTION 2.3  Secured
Obligations.  This Mortgage secures,
and the Mortgaged Property is collateral security for, the payment and
performance in full when due of the Secured Obligations.

 

SECTION 2.4  Future Advances.  This Mortgage shall secure future
advances.  The maximum aggregate amount
of all advances of principal under the Indenture (which advances are obligatory
to the extent the conditions set forth in the Indenture relating thereto are
satisfied) that may be outstanding hereunder at any time is $[300,000,000],
plus interest thereon, 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 Mortgagee by reason of any default by the
Mortgagor under the terms hereof, together with all other sums secured hereby,
plus the principal amount of any Additional Notes, plus interest thereon and
any collection costs.

 

SECTION 2.5  No
Release.  Nothing set forth in this
Mortgage shall relieve the Mortgagor from the performance of any term,
covenant, condition or agreement on the Mortgagor’s part to be performed or
observed under or in respect of any of the Mortgaged Property or from any
liability to any 

 

9

 

Person under or in respect of any of the Mortgaged
Property or shall impose any obligation on the Mortgagee or any other Secured
Party to perform or observe any such term, covenant, condition or agreement on
the Mortgagor’s part to be so performed or observed or shall impose any
liability on the Mortgagee or any other Secured Party for any act or omission
on the part of the Mortgagor relating thereto or for any breach of any
representation or warranty on the part of the Mortgagor contained in this
Mortgage, the Indenture, the Notes or the Security Documents, or under or in
respect of the Mortgaged Property or made in connection herewith or
therewith.  The obligations of the
Mortgagor contained in this Section 2.5 shall survive the
termination hereof and the discharge of the Mortgagor’s other obligations under
this Mortgage and the Indenture, the Notes and the Security Documents.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF MORTGAGOR

 

SECTION 3.1  Authority
and Validity.

 

The Mortgagor represents and warrants that as of the
date hereof:

 

 (i)      it
is duly organized or formed, validly existing and, if applicable, in good standing
under the laws of the jurisdiction of its organization;

 

 (ii)     it
is duly qualified to transact business and is in good standing in the state in
which the Mortgaged Property is located;

 

 (iii)    it
has full corporate or other organizational power and lawful authority to
execute and deliver this Mortgage and to mortgage and grant a Lien on and
security interest in the Mortgaged Property and otherwise assign the Mortgagor’s
Interest and otherwise perform its obligations as contemplated herein, and all
corporate and governmental actions, consents, authorizations and approvals
necessary or required therefor have been duly and effectively taken or
obtained; and

 

 (iv)    this
Mortgage is a legal, valid and binding obligation of the Mortgagor, enforceable
against the Mortgagor in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability.

 

SECTION 3.2  Warranty of Title.  The Mortgagor represents and warrants that as
of the date hereof:

 

 (i)      it
has good and marketable fee simple title to the Premises and the Landlord’s
interest and estate under or in respect of the Leases and good title to the
interest it purports to own or hold in and to each of the Permits, the
Contracts and the Records, in each case subject to no Liens, except for Prior
Liens;

 

 (ii)     it
has good title to the interest it purports to own or hold in and to all rights
and appurtenances to or that constitute a portion of the Mortgaged Property,
except for Prior Liens;

 

10

 

 (iii)    it
is in compliance with each term, condition and provision of any obligation of
the Mortgagor which is secured by the Mortgaged Property or the noncompliance
with which may result in the imposition of a Lien on the Mortgaged Property;
and

 

 (iv)    this
Mortgage creates and constitutes a valid and enforceable first priority Lien on
the Mortgaged Property subject to Prior Liens, and, to the extent any of the
Mortgaged Property shall consist of Fixtures, a first priority security interest
in the Fixtures, which first priority Lien and first priority security interest
are subject only to Prior Liens.

 

SECTION 3.3  Condition of Mortgaged Property.  The Mortgagor represents and warrants that:

 

 (i)      there
has been issued and there remains in full force and effect subject to no revocation,
suspension, forfeiture or modification, each and every material Permit
necessary for the present and contemplated use, operation and occupancy of the
Premises by the Mortgagor and its Tenants and the conduct of their respective
businesses and all required zoning, building code, land use, environmental and
other similar Permits;

 

 (ii)     to
the best of its knowledge, without independent investigation, the Premises and
the present and contemplated use and occupancy thereof comply with all
applicable zoning ordinances, building codes, land use laws, set back or other
development and/or use requirements of Governmental Authorities;

 

 (iii)    the
Premises are served by all utilities (including, without limitation, public
water and sewer systems) necessary for the present and contemplated use
thereof, and all utility services are provided by public utilities and the
Premises have accepted or are equipped to accept such utility services and the
Mortgagor has not received notice of termination of such utility service;

 

 (iv)    to
the best of its knowledge, without independent investigation, all public roads
and streets necessary for service of and access to the Premises for the present
and contemplated use thereof have been completed and have been dedicated and accepted
as such by the appropriate Governmental Authorities;

 

 (v)     the
Mortgagor has access to the Premises (i) from public roads and, to the extent
applicable, public or private rail or waterway, or (ii) by virtue of private
agreements for access described in Schedule A and insured in the title
insurance policy insuring this Mortgage, sufficient to allow the Mortgagor and
its Tenants and invitees to conduct their respective businesses at the Premises
in accordance with sound commercial practices and the Mortgagor has not
received notice of termination of such access;

 

 (vi)    the
Mortgagor has not received notice of any Condemnation or the commencement or
pendency of any action or proceeding therefor;

 

 (vii)   there
has not occurred any Casualty of the Premises or any portion thereof as a
result of any fire or other casualty that, as of the date hereof, has not been
repaired in all material respects;

 

11

 

 (viii)  there
are no disputes regarding boundary lines, location, encroachments or possession
of any portions of the Mortgaged Property and, to the best of its knowledge,
without independent investigation, no state of facts exists which could give
rise to any such claim;

 

 (ix)     to
the best of its knowledge, without independent investigation, all liquid and
solid waste disposal, septic and sewer systems located on the Premises are in a
good and safe condition and repair and in compliance with all Requirements of
Law;

 

 (x)      to
the best of its knowledge, without independent investigation, no portion of the
Premises is located in an area identified by the Federal Emergency Management
Agency or any successor thereto as an area having special flood hazards
pursuant to the Flood Insurance Acts or, if any portion of the Premises is
located within such area, the Mortgagor has obtained the insurance prescribed
in Article VIII hereof; and

 

 (xi)     there
are no options or rights of first refusal to purchase or acquire all or any
portion of the Mortgaged Property.

 

SECTION 3.4  Leases.  The Mortgagor represents and warrants that
there are no Leases affecting the Premises as of the date hereof.

 

SECTION 3.5  Insurance.  The Mortgagor represents and warrants that
(i) the Premises and the use, occupancy and operation thereof comply with all
Insurance Requirements and there exists no default under any Insurance
Requirement, (ii) all premiums due and payable with respect to the Insurance
Policies have been paid, (iii) all Insurance Policies are in full force
and effect and the Mortgagor has not received notice of violation or
cancellation thereof and (iv) all Insurance Policies or Insurance
Certificates have been delivered to the Mortgagee in form satisfactory to the
Mortgagee.

 

SECTION 3.6  Charges.  The Mortgagor represents and warrants that
all Charges imposed upon or assessed against the Mortgaged Property have been
paid and discharged except to the extent such Charges constitute a Lien not yet
due and payable or to the extent such Charges are being contested in accordance
with Section 9.1 hereof.

 

SECTION 3.7  Environmental.  The Mortgagor represents and warrants that:

 

 (i)      it
has obtained all material Permits which are necessary with respect to the ownership
and operation of its business and the Mortgaged Property under any and all
applicable Environmental Laws and is in compliance with all terms and
conditions thereof;

 

 (ii)     it
is in compliance in all material respects with any and all applicable
Environmental Laws including, without limitation, all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws;

 

 (iii)    there
is no civil, criminal or administrative action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice of demand letter pending
or threatened against it or any Affiliate under the Environmental Laws which could
result in a fine, penalty or other cost or expense; and

 

12

 

 (iv)    to
the best of its knowledge, without independent investigation, there are no past
or present events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent compliance with the Environmental
Laws, or which may give rise to any common law or legal liability including,
without limitation, liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or any other Environmental
Law or related common law theory or otherwise form the basis of any claim,
action, demand, suit, proceeding, hearing or notice of violation, study or investigation,
based on or related to the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling, or the
emission, discharge, release or threatened release into the environment, of any
Hazardous Materials which could result in a fine, penalty or other cost or expense.

 

SECTION 3.8  No Conflicts, Consents, etc.  Neither the execution and delivery hereof by
the Mortgagor nor the consummation of the transactions herein contemplated nor
the fulfillment of the terms hereof (i) violates the terms of any agreement,
indenture, mortgage, deed of trust, equipment lease, instrument or other
document to which the Mortgagor is a party, or by which it may be bound or to
which any of its properties or assets may be subject, (ii) conflicts with any
Requirement of Law applicable to the Mortgagor or its property or (iii) results
in or requires the creation or imposition of any Lien (other than the Lien
contemplated hereby) upon or with respect to any of the Mortgaged
Property.  No consent of any party
(including, without limitation, equityholders or creditors of the Mortgagor)
and no consent, authorization, approval, license or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body or
other Person is required for (i) the granting of a mortgage Lien on and
security interest in the Mortgaged Property by the Mortgagor granted by it pursuant
to this Mortgage or for the execution, delivery or performance hereof by the
Mortgagor except for the filing of this Mortgage and the other filings
contemplated hereby or (ii) the exercise by the Mortgagee of the remedies
in respect of the Mortgaged Property pursuant to this Mortgage.

 

[SECTION 3.9  Benefit
to the Mortgagor.  The Mortgagor represents
and warrants that it will receive substantial benefit as a result of the
execution, delivery, and performance of the Indenture, the Notes and the
Security Documents.] (a)

 

ARTICLE IV

 

CERTAIN COVENANTS OF MORTGAGOR

 

SECTION 4.1  Preservation
of Corporate Existence.  The
Mortgagor shall:

 

 (i)      preserve
and maintain in full force and effect its existence and good standing under the
laws of the jurisdiction of its organization;

 

(a)           Delete Section 3.9 if
the Mortgagor is the Issuer.

 

13

 

 (ii)     preserve
and maintain in full force and effect its qualification to transact business
and good standing in the state in which the Mortgaged Property is located; and

 

(iii)          preserve and maintain in
full force and effect all consents, authorizations and approvals necessary or required
of any Governmental Authority or any other Person relating to the execution,
delivery and performance hereof.

 

SECTION 4.2  Title. 
The Mortgagor shall:

 

 (i)      (A)
keep in effect all rights and appurtenances to or that constitute a part of the
Mortgaged Property and (B) protect, preserve and defend its interest in the
Mortgaged Property and title thereto, except against Permitted Real Property
Liens (other than the Lien created by this Mortgage);

 

 (ii)     (A)
comply with each of the terms, conditions and provisions of any obligation of
the Mortgagor which is secured by the Mortgaged Property or the noncompliance
with which may result in the imposition of a Lien on the Mortgaged Property, (B) forever
warrant and defend to the Mortgagee the Lien and security interests created and
evidenced hereby and the validity and priority hereof in any action or
proceeding against the claims of any and all Persons whomsoever affecting or
purporting to affect the Mortgaged Property or any of the rights of the
Mortgagee hereunder, except against Permitted Real Property Liens (other than
the Lien created by this Mortgage) and (C) maintain a valid and
enforceable first priority Lien, except against Permitted Real Property Liens
(other than the Lien created by this Mortgage) on the Mortgaged Property and,
to the extent any of the Mortgaged Property shall consist of Fixtures, a first
priority security interest in the Mortgaged Property, which first priority Lien
and security interest shall be subject only to Permitted Real Property Liens;
and

 

 (iii)    immediately
upon obtaining knowledge of the pendency of any proceedings for the eviction of
the Mortgagor from the Mortgaged Property or any part thereof by paramount title
or otherwise questioning the Mortgagor’s right, title and interest in, to and
under the Mortgaged Property as warranted in this Mortgage, or of any condition
that could give rise to any such proceedings, notify the Mortgagee
thereof.  The Mortgagee may participate
in such proceedings and the Mortgagor will deliver or cause to be delivered to
the Mortgagee all instruments requested by the Mortgagee to permit such
participation.  In any such proceedings,
the Mortgagee may be represented by counsel satisfactory to the Mortgagee at
the expense of the Mortgagor.  If, upon
the resolution of such proceedings, the Mortgagor shall suffer a loss of the
Mortgaged Property or any part thereof or interest therein and title insurance
proceeds shall be payable in connection therewith, such proceeds are hereby
assigned to and shall be paid to the Mortgagee for deposit into the Collateral
Account and shall be applied in the manner applicable to Net Loss Proceeds in
accordance with the provisions of Section 4.10 of the Indenture.

 

SECTION 4.3   Maintenance and Use of Mortgaged Property;
Alterations.

 

 (i)      Maintenance.  The Mortgagor shall cause the representations
and warranties set forth in Section 3.3 hereof to continue to be true in
each and every material respect and shall pay or cause to be paid when due all
Charges, costs and expenses relating thereto, other than such Charges being
contested in accordance with Section 9.1 hereof.

 

14

 

 (ii)     Maintenance
of Premises.  The Mortgagor shall not
commit or suffer any waste on the Premises. 
The Mortgagor shall, at all times, maintain the Premises in good working
order, condition and repair, reasonable wear and tear excepted, and shall as
promptly as practicable make or cause to be made all repairs, structural or
nonstructural, which are necessary or appropriate in the conduct of the
Mortgagor’s business.  The Mortgagor
shall not remove, demolish or alter the design or structural character of any Improvement
now or hereafter erected upon all or any portion of the Premises, or permit any
such removal, demolition or alteration, without the prior written consent of
the Mortgagee.

 

 (iiiii)  Permits.  The Mortgagor shall maintain, or cause to be
maintained, in full force and effect all material Permits contemplated by and
subject to Section 3.3(i) hereof. 
Unless and to the extent contested by the Mortgagor in accordance with
the provisions of Article IX hereof, the Mortgagor shall comply, in
all material respects, with all requirements set forth in the Permits and all
Requirements of Law applicable to all or any portion of the Mortgaged Property
or the condition, use or occupancy of all or any portion thereof or any recorded
deed of restriction, declaration, covenant running with the land or otherwise,
now or hereafter in force, subject to the provisions of Section 3.3
hereof.

 

 (iv)    Zoning.  The Mortgagor shall not initiate, join in, or
consent to any change in the zoning or any other permitted use classification
of the Premises that would have a Property Material Adverse Effect without the
prior written consent of the Mortgagee.

 

SECTION 4.4  Notices Regarding Certain Defaults.  The Mortgagor shall, promptly upon receipt of
any written notice regarding (i) any default by the Mortgagor relating to
the Mortgaged Property or any portion thereof or (ii) the failure to
discharge any of Mortgagor’s obligations with respect to the Mortgaged Property
or any portion thereof described herein, furnish a copy of such notice to the
Mortgagee.

 

SECTION 4.5  Access to Mortgaged Property, Books and
Records; Other Information.  Upon
request to the Mortgagor, the Mortgagee, its agents, accountants and attorneys
shall have full and free access to visit and inspect, as applicable, during
normal business hours and such other reasonable time as may be requested by the
Mortgagee to all of the Mortgaged Property including, without limitation, all
of the books, correspondence and records of the Mortgagor relating
thereto.  The Mortgagee and its representatives
may examine the same, take extracts therefrom and make photocopies thereof, and
the Mortgagor agrees to render to the Mortgagee at the Mortgagor’s cost and
expense, such clerical and other assistance as may be requested by the
Mortgagee with regard thereto.  The
Mortgagor shall, at any and all times, within a reasonable time after written
request by the Mortgagee, furnish or cause to be furnished to the Mortgagee, in
such manner and in such detail as may be reasonably requested by the Mortgagee,
additional information with respect to the Mortgaged Property.

 

SECTION 4.6  Limitation on Liens; Transfer Restrictions.  The Mortgagor may not, without the prior
written consent of the Mortgagee, further mortgage, encumber, hypothecate or
permit any Lien against all or any part of the Mortgaged Property or suffer or
allow any of the foregoing to occur by operation of law or otherwise; provided,
however, that the Mortgagor shall have the right to suffer to exist the
following Liens in respect of the Mortgaged Property: (i) Prior Liens (but
not extensions, amendments, supplements or replacements of Prior Liens unless
consented to by the Mortgagee) and (ii) Liens described in clause (iii) of the
definition of Permitted Collateral Liens (the Liens described in clauses (i) and
(ii) of this sentence, collectively, “Permitted Real Property Liens”).  The Mortgagor may 

 

15

 

not sell, convey or assign all or any portion of the
Mortgaged Property other than in accordance with the applicable provisions of
the Indenture.

 

SECTION 4.7  Environmental.

 

 (i)      Hazardous
Materials.  The Mortgagor shall
(A) comply with any and all present and future Environmental Laws,
(B) not release, store, treat, handle, generate, discharge or dispose of
any Hazardous Materials at, on, under or from the Mortgaged Property in
violation of or in a manner that could result in any material liability under
any present and future Environmental Law and (C) take all necessary steps
to initiate and expeditiously complete all remedial, corrective and other
action to eliminate any such effect.  In
the event the Mortgagor fails to comply with the covenants in the preceding
sentence, the Mortgagee may, in addition to any other remedies set forth
herein, as agent for and at the Mortgagor’s sole cost and expense, cause any
necessary remediation, removal or response action relating to Hazardous
Materials to be taken and the Mortgagor shall provide to the Mortgagee and its
agents and employees access to the Mortgaged Property for such purpose.  Any costs or expenses incurred by the
Mortgagee for such purpose shall be immediately due and payable by the
Mortgagor and shall bear interest at the Default Rate.  The Mortgagee shall have the right at any
time that the Secured Obligations are outstanding, at the sole cost and expense
of the Mortgagor, to conduct an environmental audit of the Mortgaged Property
by such persons or firms appointed by the Mortgagee, and the Mortgagor shall
cooperate in all respects in the conduct of such environmental audit, including,
without limitation, by providing access to the Mortgaged Property and to all
records relating thereto.  To the extent
that any environmental audit identifies conditions which violate, or could be expected
to give rise to liability or obligations under Environmental Laws, the
Mortgagor agrees to expeditiously correct any such violation or respond to
conditions giving rise to such liability or obligations in a manner which
complies with the Environmental Laws and mitigates associated health and
environmental risks.  The Mortgagor shall
indemnify and hold the Mortgagee and each Holder harmless from and against all
loss, cost, damage (including, without limitation, consequential damages) or
expense (including, without limitation, reasonable attorneys’ and consultants’
fees and disbursements and the allocated costs of staff counsel) that the
Mortgagee or the Holders may sustain by reason of the assertion against the Mortgagee
or the Holders by any party of any claim relating to such Hazardous Materials
on, under or from the Mortgaged Property or actions taken with respect thereto
as authorized hereunder.  The foregoing
indemnification shall survive repayment of all Secured Obligations and any
release or assignment hereof; and

 

 (ii)     Asbestos.  The Mortgagor shall not install nor permit to
be installed in or removed from the Mortgaged Property, asbestos or any
asbestos-containing material (collectively, “ACM”) except in compliance
with all applicable Environmental Laws, and with respect to any ACM currently
present in the Mortgaged Property, the Mortgagor shall promptly either
(A) remove any ACM which such Environmental Laws require to be removed or
(B) otherwise comply with such Environmental Laws with respect to such
ACM, all at the Mortgagor’s sole cost and expense.  If the Mortgagor shall fail so to remove any
ACM or otherwise comply with such laws or regulations, the Mortgagee may, in
addition to any other remedies set forth herein, take reasonable or necessary
steps to eliminate any ACM from the Mortgaged Property or otherwise comply with
applicable law, regulations or orders and the Mortgagor shall provide to the
Mortgagee and its agents and employees access to the Mortgaged Property for
such purpose.  Any costs or expenses
incurred by the Mortgagee for such purpose shall be immediately due and payable
by the Mortgagor and bear interest at the Default Rate.  The Mortgagor shall indemnify and hold the
Mortgagee and the Holders harmless from and against all loss, cost, damage
(including, without limitation, consequential damages) and expense (including,
without limitation, reasonable attorneys’ and consultants’ fees 

 

16

 

and disbursements and the allocated costs of staff
counsel) that the Mortgagee or the Holders may sustain, as a result of the
presence of any ACM and any removal thereof or compliance with all applicable
Environmental Laws.  The foregoing
indemnification shall survive repayment of all Secured Obligations and any
release or assignment hereof.

 

ARTICLE V

 

LEASES

 

SECTION 5.1  Mortgagor’s
Affirmative Covenants with Respect to Leases.  With respect to each Lease, the Mortgagor
shall:

 

 (i)      observe
and perform all the material obligations imposed upon the Landlord under such
Lease; and

 

 (ii)     enforce all of the terms,
covenants and conditions contained in such Lease upon the part of the Tenant
thereunder to be observed or performed to the extent it would be commercially
reasonable to do so.

 

SECTION 5.2  Mortgagor’s
Negative Covenants with Respect to Leases. 
With respect to each Lease, the Mortgagor shall not, without the prior
written consent of the Mortgagee:

 

 (i)      receive
or collect, or permit the receipt or collection of, any Rent under such Lease
more than one (1) month in advance of the respective period in respect of which
such Rent is to accrue, except:

 

(A)      in
connection with the execution and delivery of such Lease (or of any amendment
to such Lease), Rent thereunder may be collected and received in advance in an
amount not in excess of one (1) month’s Rent;

 

(B)       the
amount held by Landlord as a reasonable security deposit thereunder; and

 

(C)       any
amount received and collected for escalation and other charges in accordance
with the terms of such Lease;

 

 (ii)     assign,
transfer or hypothecate (other than to the Mortgagee hereunder) any Rent under
such Lease whether then due or to accrue in the future or the interest of the
Mortgagor as Landlord under such Lease;

 

 (iii)    enter
into any amendment or modification of such Lease which would violate clause
(12) of the definition of Permitted Liens or impair the value or utility of the
Mortgaged Property or the security provided by this Mortgage, unless the same
would not cause a Property Material Adverse Effect;

 

17

 

 (iv)    terminate
(whether by exercising any contractual right of the Mortgagor to recapture
leased space or otherwise) or permit the termination of such Lease or accept
surrender of all or any portion of the space demised under such Lease prior to
the end of the term thereof or accept assignment of such Lease to the Mortgagor,
unless the same would not cause a Property Material Adverse Effect; or

 

 (v)     waive,
excuse, condone or in any manner discharge or release any Tenants of or from
the obligations of such Tenants under their respective Leases or guarantors of
Tenants from obligations under any guarantees of the Leases, unless the same
would not cause a Property Material Adverse Effect.

 

SECTION 5.3  Additional
Requirements with Respect to New Leases. 
In addition to the requirements of Sections 5.1 and 5.2
hereof, the Mortgagor shall not enter into any Lease after the date hereof
unless the Tenant under such Lease has entered into a Subordination Agreement
and such Lease does not violate clause (12) of the definition of Permitted Collateral
Liens.

 

ARTICLE VI

 

CONCERNING ASSIGNMENT OF LEASES AND RENTS

 

SECTION 6.1  Present
Assignment; License to the Mortgagor. 
Section 2.2 of this Mortgage constitutes a present, absolute, effective,
irrevocable and complete assignment by Mortgagor to the Mortgagee of the Leases
and Rents and the right, subject to applicable law, to collect all sums payable
to Mortgagor thereunder and apply the same as Mortgagee may, in its sole
discretion, determine to be appropriate (including the payment of costs and
expenses in connection with the maintenance, operation, improvement, insurance,
taxes and upkeep of the Mortgaged Property), which is not conditioned upon
Mortgagee being in possession of the Premises. 
The Mortgagee hereby grants to the Mortgagor, however, a license to
collect and apply the Rents and to enforce the obligations of Tenants under the
Leases.  Immediately upon the occurrence
and during the continuance of any Event of Default, the license granted in the
immediately preceding sentence shall cease and terminate, with or without any
notice, action or proceeding or the intervention of a receiver appointed by a
court.

 

SECTION 6.2  Collection
of Rents by the Mortgagee.

 

 (i)      After
the occurrence of an Event of Default, and during its continuance, any Rents
receivable by the Mortgagee hereunder, after payment of all proper costs and
charges as Mortgagee may, in its sole discretion, determine to be appropriate
(including the payment of costs and expenses in connection with the
maintenance, operation, improvement, insurance, taxes and upkeep of the
Mortgaged Property), shall be applied to the Secured Obligations or, at the
option of the Mortgagee, shall be held by the Mortgagee as additional collateral
to secure the performance by the Mortgagor of the Secured Obligations.  The Mortgagee shall be accountable to the
Mortgagor only for Rents actually received by the Mortgagee.  The collection of such Rents and the application
thereof shall not cure or waive any Event of Default or waive, modify or affect
notice of Event of Default or invalidate any act done pursuant to such notice.

 

 (ii)     The
Mortgagor hereby irrevocably authorizes and directs Tenant under each Lease to
rely upon and comply with any and all notices or demands from the Mortgagee for
payment of Rents to 

 

18

 

the Mortgagee and the Mortgagor shall have no claim
against Tenant for Rents paid by Tenant to the Mortgagee pursuant to such notice
or demand.

 

SECTION 6.3  No
Release.  Neither this Mortgage nor
any action or inaction on the part of the Mortgagee shall release Tenant under
any Lease, any guarantor of any Lease or the Mortgagor from any of their
respective obligations under such Leases or constitute an assumption of any
such obligation on the part of the Mortgagee. 
No action or failure to act on the part of the Mortgagor shall adversely
affect or limit the rights of the Mortgagee under this Mortgage or, through
this Mortgage, under such Leases. 
Nothing contained herein shall operate or be construed to
(i) obligate the Mortgagee to perform any of the terms, covenants or conditions
contained in any Lease or otherwise to impose any obligation upon the Mortgagee
with respect to such Lease (including, without limitation, any obligation
arising out of any covenant of quiet enjoyment contained in such Lease in the
event that Tenant under such Lease shall have been joined as a party defendant
in any action by which the estate of such Tenant shall be terminated) or
(ii) place upon the Mortgagee any obligation for the operation, control,
care, management or repair of the Premises.

 

SECTION 6.4  Irrevocable
Interest.  All rights, powers and
privileges of the Mortgagee herein set forth are coupled with an interest and
are irrevocable, subject to the terms and conditions hereof, and the Mortgagor
shall not take any action under the Leases or otherwise which is inconsistent
with this Mortgage or any of the terms hereof and any such action inconsistent herewith
or therewith shall be void.

 

SECTION 6.5  Amendment
to Leases.  Each Lease, including,
without limitation, all amendments, modifications, supplements, replacements,
extensions and renewals thereof, shall continue to be subject to the provisions
hereof without the necessity of any further act by any of the parties hereto.

 

ARTICLE VII

 

TAXES AND CERTAIN STATUTORY LIENS

 

SECTION 7.1  Payment
of Charges.  Unless and to the extent
contested by the Mortgagor in accordance with the provisions of Article IX
hereof, the Mortgagor shall pay and discharge, or cause to be paid and
discharged, from time to time when the same shall become due, all Charges.  The Mortgagor shall, upon the Mortgagee’s
request, deliver to the Mortgagee receipts evidencing the payment of all such
Charges.

 

SECTION 7.2  Escrow
of Taxes.  From and after the
occurrence of an Event of Default, and during its continuance, at the option
and upon the request of the Mortgagee, the Mortgagor shall deposit with the
Mortgagee in an account maintained by the Mortgagee (the “Tax Escrow Fund”),
on the first day of each month, an amount estimated by the Mortgagee to be
equal to one-twelfth of the annual real property taxes and other annual Charges
required to be discharged by the Mortgagor under Section 7.1
hereof.  Such amounts shall be held by
the Mortgagee without interest to the Mortgagor and applied to the payment of
the obligations in respect of which such amounts were deposited, in such
priority as the Mortgagee shall determine, on or before the respective dates on
which such obligations or any part thereof would become delinquent.  Nothing contained in this Article VII
shall (i) affect any right or remedy of the Mortgagee under any provision
hereof or of any statute or rule of law to pay any such amount as provided
above from its own funds and to add the amount so paid, together with interest
at the Default 

 

19

 

Rate during such time that any amount remains
outstanding, to the Secured Obligations or (ii) relieve the Mortgagor of
its obligations to make or provide for the payment of the annual real property
taxes and other annual Charges required to be discharged by the Mortgagor under
Section 7.1 hereof.  During
the continuance of any Event of Default, the Mortgagee may, at its option,
apply all or any part of the sums held pursuant to this Section 7.2
to payment and performance of the Secured Obligations.  The Mortgagor shall redeposit with the Mortgagee
an amount equal to all amounts so applied as a condition to the cure, if any,
of such Event of Default in addition to fulfillment of any other required conditions.

 

SECTION 7.3  Certain
Statutory Liens.  Unless and to the
extent contested by the Mortgagor in accordance with the provisions of Article IX
hereof, the Mortgagor shall timely pay, or cause to be paid, all lawful claims
and demands of mechanics, materialmen, laborers, government agencies
administering worker’s compensation insurance, old age pensions and social
security benefits and all other claims, judgments, demands or amounts of any
nature which, if unpaid, might result in, or permit the creation of, a Lien on
the Mortgaged Property or any part thereof, or which might result in forfeiture
of all or any part of the Mortgaged Property.

 

SECTION 7.4  Stamp
and Other Taxes.  Unless and to the
extent contested by the Mortgagor in accordance with the provisions of Article IX
hereof, the Mortgagor shall pay any United States documentary stamp taxes, with
interest and fines and penalties, and any mortgage recording taxes, with
interest and fines and penalties, that may hereafter be levied, imposed or
assessed under or upon or by reason hereof or the Secured Obligations or any instrument
or transaction affecting or relating to either thereof and in default thereof
the Mortgagee may advance the same and the amount so advanced shall be payable
by the Mortgagor to the Mortgagee in accordance with the provisions of Section 14.5
hereof.

 

SECTION 7.5  Certain
Tax Law Changes.  In the event of the
passage after the date hereof of any law deducting from the value of real
property, for the purpose of taxation, amounts in respect of any Lien thereon
or changing in any way the laws for the taxation of mortgages or debts secured
by mortgages for state or local purposes or the manner of the collection of any
Charges, and imposing any Charges, either directly or indirectly, on this
Mortgage, the Indenture or any other Security Document, the Mortgagor shall
promptly pay to the Mortgagee such amount or amounts as may be necessary from
time to time to pay any such Charges.

 

SECTION 7.6  Proceeds of Tax Claim.  In the event that the proceeds of any tax
claim are paid after the Mortgagee has exercised its right to foreclose the
Lien hereof, such proceeds shall be paid to the Mortgagee to satisfy any
deficiency remaining after such foreclosure. 
The Mortgagee shall retain its interest in the proceeds of any tax claim
during any redemption period.  The amount
of any such proceeds in excess of any deficiency claim of the Mortgagee shall
in a reasonably prompt manner be released to the Mortgagor.

 

ARTICLE VIII

 

INSURANCE

 

SECTION 8.1  Required Insurance Policies and Coverages.  The Mortgagor shall maintain in respect of
the Premises the following insurance policies and coverages:

 

20

 

 (i)      Physical
hazard insurance on an “all risk” basis covering, without limitation, hazards
commonly covered by fire and extended coverage, lightning, windstorm, civil
commotion, hail, riot, strike, water damage, sprinkler leakage, collapse and
malicious mischief, in an amount equal to the full replacement cost of the
Improvements, with policy limits and deductibles in such amounts as the
Mortgagee may from time to time require and, if the Mortgagee shall not have imposed
any such requirements, as would be maintained by a Prudent Operator;

 

 (iii)    Commercial
general liability insurance containing minimum limits per occurrence of Five
Million Dollars ($5,000,000) against claims for bodily injury, death or
property damage occurring on, in or about the Premises and any other adjoining
streets, sidewalks and passageways, and covering any and all claims, including,
without limitation, all legal liability to the extent insurable imposed upon
the Mortgagee and all court costs and attorneys’ fees, arising out of or
connected with the possession, use, leasing, operation or condition of the
Premises with policy limits and deductibles in such amounts as the Mortgagee
may from time to time require and, if the Mortgagee shall not have imposed such
requirements, in such amounts as would be maintained by a Prudent Operator;

 

 (iii)    Explosion insurance in respect
of any boilers, machinery and similar apparatus located on or comprising the
Premises, with policy limits and deductibles in such amounts as the Mortgagee
may from time to time require, and, if the Mortgagee shall not have imposed any
such requirements, in such amounts as would be maintained by a Prudent Operator;

 

 (iii)    Business
interruption insurance and/or loss of “rental value” insurance covering one (1)
year of loss, the term “rental value” to mean the sum of (x) the total
estimated gross rental income from tenant occupancy of the Improvements as
furnished and equipped under Leases and (y) the total amount of all other
charges which are the legal obligation of the Tenants of the Premises under
Leases;

 

 (v)     If the Premises are located
in an area identified by the Federal Emergency Management Agency as an area
having special flood hazards pursuant to the National Flood Insurance Act of
1968 or the Flood Disaster Protection Act of 1973, each as amended, or any
successor laws, flood insurance with policy limits and deductibles in such
amounts as the Mortgagee may from time to time reasonably require and, if the Mortgagee
shall not have imposed any such requirements, in such amounts as would be
maintained by a Prudent Operator;

 

 (vi)    Worker’s compensation
insurance as required by the laws of the state where the Premises are located
to protect the Mortgagor and the Mortgagee against claims for injuries
sustained in the course of employment at the Premises;

 

 (vii)   such other insurance, against
risks and with such policy limits and deductibles in such amounts as the Mortgagee
may from time to time require, and, if no such requirements shall have been
imposed, in such amounts as would be maintained by a Prudent Operator; and

 

(viii)  Automobile liability
insurance on all vehicles owned, leased, hired, operated or licensed by or in
the name of the Mortgagor for bodily injury, death or property damage, including
loss of use thereof.

 

21

 

SECTION 8.2  Required
Form of Insurance Policies.  Each
Insurance Policy described in Section 8.1 hereof shall provide that:

 

 (i)      it
may not be modified, reduced, canceled or otherwise terminated without at least
thirty (30) days’ prior written notice to the Mortgagee;

 

 (ii)     the
Mortgagee is permitted to pay any premium therefor within thirty (30) days
after receipt of any notice stating that such premium has not been paid when
due;

 

 (iii)    all
losses thereunder shall be payable notwithstanding any act or negligence of the
Mortgagor or its agents or employees which otherwise might have resulted in a
forfeiture of all or a part of such insurance payments;

 

 (ivv)  to
the extent such Insurance Policy constitutes Property Insurance, all losses
payable thereunder shall be payable to the Mortgagee, as loss payee, pursuant
to a standard non-contributory New York mortgagee endorsement and shall be in an
amount at least sufficient to prevent coinsurance liability; and

 

 (v)     with respect to Liability
Insurance, the Mortgagee shall be named as an additional insured.

 

SECTION 8.3  Settlements.  Settlement or adjustment of any claim under
any of the Insurance Policies, if such claim involves any loss in excess of
$200,000 (in the judgment of the Mortgagee), shall require the prior written
approval of the Mortgagee (which approval shall not be unreasonably withheld),
and the Mortgagor shall cause each such policy to contain a provision to such effect.

 

SECTION 8.4  Renewals.  At least ten (10) days prior to the expiration
of any Insurance Policy, the Mortgagor shall deliver to the Mortgagee an
Insurance Policy or Policies renewing or extending such expiring Insurance
Policy or Policies renewal or extension Insurance Certificates or other
reasonable evidence of renewal or extension providing that the Insurance
Policies are in full force and effect.

 

SECTION 8.5  Additional
Insurance.  The Mortgagor shall not
purchase separate insurance policies concurrent in form or contributing in the
event of loss with those Insurance Policies required to be maintained under
this Article VIII unless the Mortgagee is included thereon as an
additional insured and, if applicable, with loss payable to the Mortgagee under
an endorsement containing the provisions described in Section 8.2
hereof.  The Mortgagor shall immediately
notify the Mortgagee whenever any such separate insurance policy is obtained
and shall promptly deliver to the Mortgagee the Insurance Policy or Insurance
Certificate evidencing such insurance.

 

SECTION 8.6  Blanket
Coverage.  The Mortgagor may maintain
the coverages required by Section 8.1 hereof under blanket policies
covering the Premises and other locations owned or operated by the Mortgagor or
an Affiliate of the Mortgagor if the terms of such blanket policies otherwise
comply with the provisions of Section 8.1 hereof and contain
specific coverage allocations in respect of the Premises complying with the provisions
of Section 8.1 hereof.

 

SECTION 8.7  Delivery After Foreclosure.  In the event that the proceeds of any insurance
claim are paid after the Mortgagee has exercised its right to foreclose the
Lien hereof, such proceeds

 

22

 

shall be paid to the Mortgagee to satisfy any
deficiency remaining after such foreclosure. 
Mortgagee shall retain its interest in the Insurance Policies required
to be maintained pursuant to this Mortgage during any redemption period.

 

ARTICLE IX

 

CONTESTING
OF PAYMENTS

 

SECTION 9.1  Contesting
of Taxes and Certain Statutory Liens. 
The Mortgagor may at its own expense contest the validity, amount or
applicability of any Charges as long as the contest thereof shall be conducted
in accordance with, and permitted pursuant to the provisions of, the Indenture.

 

SECTION 9.2  Contesting
of Insurance.  The Mortgagor shall
not take any action that could be the basis for termination, revocation or denial
of any insurance coverage required to be maintained under this Mortgage or that
could be the basis for a defense to any claim under any Insurance Policy
maintained in respect of the Premises and the Mortgagor shall otherwise comply
in all respects with all Insurance Requirements in respect of the Premises; provided,
however, that the Mortgagor may, at its own expense and after written
notice to the Mortgagee, (i) contest the applicability or enforceability
of any such Insurance Requirements by appropriate legal proceedings,
prosecution of which does not constitute a basis for cancellation or revocation
of any insurance coverage required under Article VIII hereof or (ii) cause
the Insurance Policy containing any such Insurance Requirement to be replaced
by a new policy complying with the provisions of Article VIII hereof.

 

ARTICLE X

 

DESTRUCTION,
CONDEMNATION AND RESTORATION

 

SECTION 10.1  Casualty.  If there shall occur any Casualty,
individually or in the aggregate, in excess of $100,000, the Mortgagor shall
promptly send to the Mortgagee a written notice setting forth the nature and
extent of such Casualty.  The proceeds of
any insurance payable in respect of such Casualty are hereby assigned and shall
be paid to the Mortgagee.  The Net Loss
Proceeds arising out of such Casualty shall be applied in accordance with the
provisions of Sections 4.19 and 10.3(b) of the Indenture.

 

SECTION 10.2  Condemnation.  If there shall occur any Condemnation or the
commencement of any proceeding thereof, the Mortgagor shall immediately notify
the Mortgagee upon receiving notice of such Condemnation or commencement of
proceedings therefor.  The Mortgagee may,
at its option, participate in any proceedings or negotiations which might
result in any Condemnation, and the Mortgagor shall deliver or cause to be
delivered to the Mortgagee all instruments requested by it to permit such
participation.  The Mortgagee may be
represented by counsel reasonably satisfactory to it at the reasonable expense
of the Mortgagor in connection with any such participation.  The Mortgagor shall pay all reasonable fees,
costs and expenses incurred by the Mortgagee in connection with any Condemnation
and in seeking and obtaining any award or payment on account thereof.  Any proceeds, award or payment in respect of
any Condemnation, or any settlement in lieu thereof, are hereby assigned and
shall be paid to the Mortgagee.  The
Mortgagor shall take all steps necessary to notify the condemning authority of
such

 

23

 

assignment.  The
Net Loss Proceeds arising out of such Condemnation shall be applied in
accordance with the provisions of Sections 4.19 and 10.3(b) of
the Indenture.

 

ARTICLE XI

 

EVENTS
OF DEFAULT AND REMEDIES

 

SECTION 11.1  Events
of Default.  It shall be an Event of
Default hereunder if there shall have occurred and be continuing an Event of Default
under the Indenture.

 

SECTION 11.2  Remedies
in Case of an Event of Default.  If
any Event of Default shall have occurred and be continuing, the Mortgagee may
at its option, in addition to any other action permitted under this Mortgage or
the Indenture or by law, statute or in equity, take one or more of the
following actions to the greatest extent permitted by local law:

 

(i)            by
written notice to the Mortgagor, declare the entire unpaid amount of the
Secured Obligations to be due and payable immediately;

 

(ii)           personally,
or by its agents or attorneys, (A) enter into and upon and take possession
of all or any part of the Premises together with the books, records and
accounts of the Mortgagor relating thereto and, exclude the Mortgagor, its
agents and servants wholly therefrom, (B) use, operate, manage and control
the Premises and conduct the business thereof, (C) maintain and restore
the Premises, (D) make all necessary or proper repairs, renewals and
replacements and such useful Alterations thereto and thereon as the Mortgagee
may deem advisable, (E) manage, lease and operate the Premises and carry
on the business thereof and exercise all rights and powers of the Mortgagor
with respect thereto either in the name of the Mortgagor or otherwise to the
extent permitted by applicable law or (F) collect and receive all Rents.  The Mortgagee shall be under no liability for
or by reason of any such taking of possession, entry, removal or holding,
operation or management except that any amounts so received by the Mortgagee
shall be applied in accordance with the provisions of the Indenture;

 

(iii)          with
or without entry, personally or by its agents or attorneys, (A) sell the
Mortgaged Property and all estate, right, title and interest, claim and demand
therein at one or more sales in one or more parcels, in accordance with the
provisions of Section 11.3 or (B) institute and prosecute
proceedings for the complete or partial foreclosure of the Lien and security
interests created and evidenced hereby; or

 

(iv)          take
such steps to protect and enforce its rights whether by action, suit or
proceeding at law or in equity for the specific performance of any covenant,
condition or agreement in the Indenture, the Notes and the Security Documents,
or in aid of the execution of any power granted in this Mortgage, or for any
foreclosure hereunder, or for the enforcement of any other appropriate legal or
equitable remedy or otherwise as the Mortgagee shall elect.

 

24

 

SECTION 11.3  Sale
of Mortgaged Property if Event of Default Occurs; Proceeds of Sale.

 

(i)            If
any Event of Default shall have occurred and be continuing, the Mortgagee may
institute an action to foreclose this Mortgage or take such other action as may
be permitted and available to the Mortgagee at law or in equity for the
enforcement of the Indenture and the Notes and realization on the Mortgaged
Property and proceeds thereon through power of sale or to final judgment and
execution thereof for the Secured Obligations, and in furtherance thereof the
Mortgagee may sell the Mortgaged Property at one or more sales, as an entirety
or in parcels, at such time and place, upon such terms and after such notice
thereof as may be required or permitted by law or statute or in equity.  The Mortgagee may execute and deliver to the
purchaser at such sale a conveyance of the Mortgaged Property in fee simple and
an assignment or conveyance of all the Mortgagor’s Interest in the Leases and
the Mortgaged Property, each of which conveyances and assignments shall contain
recitals as to the Event of Default upon which the execution of the power of
sale herein granted depends, and the Mortgagor hereby constitutes and appoints
the Mortgagee the true and lawful attorney in fact of the Mortgagor to make any
such recitals, sale, assignment and conveyance, and all of the acts of the
Mortgagee as such attorney in fact are hereby ratified and confirmed.  The Mortgagor agrees that such recitals shall
be binding and conclusive upon the Mortgagor and that any assignment or
conveyance to be made by the Mortgagee shall divest the Mortgagor of all right,
title, interest, equity and right of redemption, including any statutory
redemption, in and to the Mortgaged Property. 
The power and agency hereby granted are coupled with an interest and are
irrevocable by death or dissolution, or otherwise, and are in addition to any
and all other remedies which the Mortgagee may have hereunder, at law or in
equity.  So long as the Secured
Obligations, or any part thereof, remain unpaid, the Mortgagor agrees that
possession of the Mortgaged Property by the Mortgagor, or any person claiming
under the Mortgagor, shall be as tenant, and, in case of a sale under power or
upon foreclosure as provided in this Mortgage, the Mortgagor and any person in
possession under the Mortgagor, as to whose interest such sale was not made
subject, shall, at the option of the purchaser at such sale, then become and be
tenants holding over, and shall forthwith deliver possession to such purchaser,
or be summarily dispossessed in accordance with the laws applicable to tenants
holding over.  In case of any sale under
this Mortgage by virtue of the exercise of the powers herein granted, or
pursuant to any order in any judicial proceeding or otherwise, the Mortgaged
Property may be sold as an entirety or in separate parcels in such manner or
order as the Mortgagee in its sole discretion may elect.  One or more exercises of powers herein
granted shall not extinguish or exhaust such powers, until the entire Mortgaged
Property is sold or all amounts secured hereby are paid in full.

 

(ii)           In
the event of any sale made under or by virtue of this Article XI,
the entire principal of, and interest in respect of the Secured Obligations, if
not previously due and payable, shall, at the option of the Mortgagee,
immediately become due and payable, anything in this Mortgage to the contrary
notwithstanding.

 

(iii)          The
proceeds of any sale made under or by virtue of this Article XI, together
with any other sums which then may be held by the Mortgagee under this
Mortgage, whether under the provisions of this Article XI or
otherwise, shall be applied in accordance with the provisions of the Indenture.

 

(iv)          The
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof at
any sale made under or by virtue of this Article XI and, in lieu of
paying cash therefor, may make settlement for the purchase price by crediting
against the purchase price the unpaid amounts (whether or not then due and
owing) in respect of the Secured Obligations, after deducting from the sales
price the 

 

25

 

expense of the sale and the reasonable costs of the
action or proceedings and any other sums that the Mortgagee is authorized to
deduct under this Mortgage.

 

(v)           The
Mortgagee may adjourn from time to time any sale by it to be made under or by
virtue hereof by announcement at the time and place appointed for such sale or
for such adjourned sale or sales, and, the Mortgagee, without further notice or
publication, may make such sale at the time and place to which the same shall
be so adjourned.

 

(vi)          If
the Premises is comprised of more than one parcel of land, the Mortgagee may
take any of the actions authorized by this Section 11.3 in respect
of any or a number of individual parcels.

 

SECTION 11.4  Additional
Remedies in Case of an Event of Default.

 

(i)            The
Mortgagee shall be entitled to recover judgment as aforesaid either before,
after or during the pendency of any proceedings for the enforcement of the
provisions hereof, and the right of the Mortgagee to recover such judgment
shall not be affected by any entry or sale hereunder, or by the exercise of any
other right, power or remedy for the enforcement of the provisions hereof, or
the foreclosure of, or absolute conveyance pursuant to, this Mortgage.  In case of proceedings against the Mortgagor
in insolvency or bankruptcy or any proceedings for its reorganization or
involving the liquidation of its assets, the Mortgagee shall be entitled to
prove the whole amount of principal and interest and other payments, charges
and costs due in respect of the Secured Obligations to the full amount thereof
without deducting therefrom any proceeds obtained from the sale of the whole or
any part of the Mortgaged Property; provided, however, that in no
case shall the Mortgagee receive a greater amount than the aggregate of such
principal, interest and such other payments, charges and costs (with interest
at the Default Rate) from the proceeds of the sale of the Mortgaged Property
and the distribution from the estate of the Mortgagor.

 

(ii)           Any
recovery of any judgment by the Mortgagee and any levy of any execution under
any judgment upon the Mortgaged Property shall not affect in any manner or to
any extent the Lien and security interests created and evidenced hereby upon
the Mortgaged Property or any part thereof, or any conveyances, powers, rights
and remedies of the Mortgagee hereunder, but such conveyances, powers, rights
and remedies shall continue unimpaired as before.

 

(iii)          Any
monies collected by the Mortgagee under this Section 11.4 shall be
applied in accordance with the provisions of Section 11.3(iii).

 

SECTION 11.5  Legal
Proceedings After an Event of Default.

 

(i)            After
the occurrence of any Event of Default and immediately upon the commencement of
any action, suit or legal proceedings to obtain judgment for the Secured
Obligations or any part thereof, or of any proceedings to foreclose the Lien
and security interest created and evidenced hereby or otherwise enforce the
provisions hereof or of any other proceedings in aid of the enforcement hereof,
the Mortgagor shall enter its voluntary appearance in such action, suit or proceeding.

 

(ii)           Upon
the occurrence and during the continuance of an Event of Default, the Mortgagee
shall be entitled forthwith as a matter of right, concurrently or independently
of any other right or remedy hereunder either before or after declaring the
Secured Obligations or any part thereof to be due 

 

26

 

and payable, to the appointment of a receiver without
giving notice to any party and without regard to the adequacy or inadequacy of
any security for the Secured Obligations or the solvency or insolvency of any
person or entity then legally or equitably liable for the Secured Obligations
or any portion thereof.  The Mortgagor
hereby consents to the appointment of such receiver.  Notwithstanding the appointment of any
receiver, the Mortgagee shall be entitled as pledgee to the possession and
control of any cash, deposits or instruments at the time held by or payable or
deliverable under the terms of the Indenture to the Mortgagee.

 

(iii)          The
Mortgagor shall not (A) at any time insist upon, or plead, or in any
manner whatsoever claim or take any benefit or advantage of any stay or
extension or moratorium law, any exemption from execution or sale of the
Mortgaged Property or any part thereof, wherever enacted, now or at any time
hereafter in force, which may affect the covenants and terms of performance
hereof, (B) claim, take or insist on any benefit or advantage of any law
now or hereafter in force providing for the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior to any sale or sales of the
Mortgaged Property which may be made pursuant to this Mortgage, or pursuant to
any decree, judgment or order of any court of competent jurisdiction or (C) after
any such sale or sales, claim or exercise any right under any statute
heretofore or hereafter enacted to redeem the property so sold or any part
thereof.  To the extent permitted by
applicable law, the Mortgagor hereby expressly (A) waives all benefit or
advantage of any such law or laws, including, without limitation, any statute
of limitations applicable to this Mortgage, (B) waives all rights to have
the Mortgaged Property marshalled on any foreclosure of this Mortgage, (C) waives
any and all rights to trial by jury in any action or proceeding related to the
enforcement hereof, (D) waives any objection which it may now or hereafter
have to the laying of venue of any action, suit or proceeding brought in
connection with this Mortgage and further waives and agrees not to plead that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum and (E) covenants not to hinder, delay or impede
the execution of any power granted or delegated to the Mortgagee by this
Mortgage but to suffer and permit the execution of every such power as though
no such law or laws had been made or enacted. 
The Mortgagee shall not be liable for any incorrect or improper payment
made pursuant to this Article XI in the absence of negligence or
willful misconduct.

 

SECTION 11.6  Remedies
Not Exclusive.  No remedy conferred
upon or reserved to the Mortgagee by this Mortgage is intended to be exclusive
of any other remedy or remedies, and each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Mortgage or now
or hereafter existing at law or in equity. 
Any delay or omission of the Mortgagee to exercise any right or power
accruing on any Event of Default shall not impair any such right or power and
shall not be construed to be a waiver of or acquiescence in any such Event of
Default.  Every power and remedy given by
this Mortgage may be exercised from time to time concurrently or independently,
when and as often as may be deemed expedient by the Mortgagee in such order and
manner as the Mortgagee, in its sole discretion, may elect.  If the Mortgagee accepts any monies required
to be paid by the Mortgagor under this Mortgage after the same become due, such
acceptance shall not constitute a waiver of the right either to require prompt
payment, when due, of all other sums secured by this Mortgage or to declare an
Event of Default with regard to subsequent defaults.  If the Mortgagee accepts any monies required
to be paid by the Mortgagor under this Mortgage in an amount less than the sum
then due, such acceptance shall be deemed an acceptance on account only and on
the condition that it shall not constitute a waiver of the obligation of the
Mortgagor to pay the entire sum then due, and the Mortgagor’s failure to pay
the entire sum then due shall be and continue to be a default hereunder
notwithstanding acceptance of such amount on account.

 

27

 

ARTICLE XII

 

SECURITY
AGREEMENT AND FIXTURE FILING

 

SECTION 12.1  Security
Agreement.  To the extent that the
Mortgaged Property includes personal property or items of personal property
which are or are to become fixtures under applicable law, this Mortgage shall
also be construed as a security agreement under the UCC; and, upon and during
the continuance of an Event of Default, the Mortgagee shall be entitled with
respect to such personal property to exercise all remedies hereunder, all remedies
available under the UCC with respect to fixtures and all other remedies
available under applicable law.  Without
limiting the foregoing, such personal property may, at the Mortgagee’s option, (i) be
sold hereunder together with any sale of any portion of the Mortgaged Property
or otherwise, (ii) be sold pursuant to the UCC, or (iii) be dealt
with by the Mortgagee in any other manner permitted under applicable law.  The Mortgagee may require the Mortgagor to assemble
such personal property and make it available to the Mortgagee at a place to be
designated by the Mortgagee.  The
Mortgagor acknowledges and agrees that a disposition of the personal property
in accordance with the Mortgagee’s rights and remedies in respect to the
Mortgaged Property as heretofore provided is a commercially reasonable
disposition thereof; provided, however, that the Mortgagee shall
give the Mortgagor not less than ten (10) days’ prior notice of the time
and place of any intended disposition.

 

SECTION 12.2  Fixture
Filing.  To the extent that the
Mortgaged Property includes items of personal property which are or are to
become fixtures under applicable law, and to the extent permitted under
applicable law, the filing hereof in the real estate records of the county in
which such Mortgaged Property is located shall also operate from the time of
filing as a fixture filing with respect to such Mortgaged Property, and the following
information is applicable for the purpose of such fixture filing, to wit:

 

Name and Address of the debtor:

 

The Mortgagor having the address described in the
Preamble hereof.

 

Name and Address of the secured
party:

 

The Mortgagee having the address described in the
Preamble hereof.

 

This Financing Statement covers
the following types or items of property:

 

The Mortgaged Property.

 

This instrument covers
goods or items of personal property which are or are to become fixtures upon
the real property described in Schedule A attached hereto.

 

The name of the record
owner of the Property on which such fixtures are or are to be located is the
Mortgagor.

 

In addition, Mortgagor
authorizes the Mortgagee to file appropriate financing and continuation statements
under the UCC in effect in the jurisdiction in which the Mortgaged Property is
located as may be required by law in order to establish, preserve and protect
the liens and security interests intended to be granted to the Mortgagee
pursuant to this Mortgage in the Mortgaged Property.

 

28

 

ARTICLE XIII

 

FURTHER
ASSURANCES

 

SECTION 13.1  Recording
Documentation To Assure Security. 
The Mortgagor shall, forthwith after the execution and delivery hereof
and thereafter, from time to time, cause this Mortgage and any financing
statement, continuation statement or similar instrument relating to any thereof
or to any property intended to be subject to the Lien hereof to be filed,
registered and recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect
the validity and priority thereof or the Lien hereof purported to be created
upon the Mortgaged Property and the interest and rights of the Mortgagee
therein.  The Mortgagor shall pay or
cause to be paid all taxes and fees incident to such filing, registration and
recording, and all reasonable expenses incident to the preparation, execution
and acknowledgment thereof, and of any instrument of further assurance, and all
Federal or state stamp taxes or other taxes, duties and charges arising out of
or in connection with the execution and delivery of such instruments.

 

SECTION 13.2  Further
Acts.  The Mortgagor shall, at the
sole cost and expense of the Mortgagor, do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, mortgages, assignments,
notices of assignment, transfers, financing statements, continuation
statements, instruments and assurances as the Mortgagee shall from time to time
reasonably request, which may be necessary in the judgment of the Mortgagee
from time to time to assure, perfect, convey, assign, mortgage, transfer and
confirm unto the Mortgagee, the property and rights hereby conveyed or assigned
or which the Mortgagor may be or may hereafter become bound to convey or assign
to the Mortgagee or for carrying out the intention or facilitating the
performance of the terms hereof or the filing, registering or recording hereof.  Without limiting the generality of the foregoing,
in the event that the Mortgagee desires to exercise any remedies, consensual
rights or attorney-in-fact powers set forth in this Mortgage and determines it
necessary to obtain any approvals or consents of any Governmental Authority or
any other Person therefor, then, upon the reasonable request of the Mortgagee,
the Mortgagor agrees to use its best efforts to assist and aid the Mortgagee to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.  In the event the Mortgagor shall fail after
demand to execute any instrument or take any action required to be executed or
taken by the Mortgagor under this Section 13.2, the Mortgagee may
execute or take the same as the attorney-in-fact for the Mortgagor, such power
of attorney being coupled with an interest and is irrevocable.

 

SECTION 13.3  Additional
Security.  Without notice to or
consent of the Mortgagor and without impairment of the Lien and rights created
by this Mortgage, the Mortgagee may accept (but the Mortgagor shall not be
obligated to furnish) from the Mortgagor or from any other Person, additional
security for the Secured Obligations. 
Neither the giving hereof nor the acceptance of any such additional security
shall prevent the Mortgagee from resorting, first, to such additional security,
and, second, to the security created by this Mortgage without affecting the
Mortgagee’s Lien and rights under this Mortgage.

 

29

 

ARTICLE XIV

 

MISCELLANEOUS

 

SECTION 14.1  Covenants
To Run with the Land.  All of the
grants, covenants, terms, provisions and conditions in this Mortgage shall run
with the Land and shall apply to, and bind the successors and assigns of, the
Mortgagor.  If there shall be more than
one mortgagor with respect to the Mortgaged Property, the covenants and
warranties hereof shall be joint and several.

 

SECTION 14.2  No
Merger.  The rights and estate
created by this Mortgage shall not, under any circumstances, be held to have
merged into any other estate or interest now owned or hereafter acquired by the
Mortgagee unless the Mortgagee shall have consented to such merger in writing.

 

SECTION 14.3  Concerning
Mortgagee.

 

(i)            The
Mortgagee has been appointed as trustee pursuant to the Indenture.  The actions of the Mortgagee hereunder are
subject to the provisions of the Indenture. 
The Mortgagee shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or
refrain from taking action (including, without limitation, the release or
substitution of the Mortgaged Property), in accordance with this Mortgage and
the Indenture.  The Mortgagee may employ
agents and attorneys-in-fact in connection herewith and shall not be liable for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it in good faith.  The Mortgagee may
resign and a successor Mortgagee may be appointed in the manner provided in the
Indenture.  Upon the acceptance of any
appointment as the Mortgagee by a successor Mortgagee, that successor Mortgagee
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Mortgagee under this Mortgage, and the
retiring Mortgagee shall thereupon be discharged from its duties and
obligations under this Mortgage.  After
any retiring Mortgagee’s resignation, the provisions hereof shall inure to its
benefit as to any actions taken or omitted to be taken by it under this Mortgage
while it was the Mortgagee.

 

(ii)           The
Mortgagee shall be deemed to have exercised reasonable care in the custody and
preservation of the Mortgaged Property in its possession if such Mortgaged
Property is accorded treatment substantially equivalent to that which the
Mortgagee, in its individual capacity, accords its own property consisting of
similar instruments or interests, it being understood that neither the Mortgagee
nor any of the Secured Parties shall have responsibility for taking any
necessary steps to preserve rights against any Person with respect to any
Mortgaged Property.

 

(iii)          The
Mortgagee shall be entitled to rely upon any written notice, statement,
certificate, order or other document or any telephone message believed by it to
be genuine and correct and to have been signed, sent or made by the proper
person, and, with respect to all matters pertaining to this Mortgage and its
duties hereunder, upon advice of counsel selected by it.

 

(iv)          If
any portion of the Mortgaged Property also constitutes collateral granted to
the Mortgagee under any other deed of trust, mortgage, security agreement,
pledge or instrument of any type, in the event of any conflict between the
provisions hereof and the provisions of such other deed of trust, mortgage, security
agreement, pledge or instrument of any type in respect of such collateral, the
Mortgagee, in its sole discretion, shall select which provision or provisions
shall control.

 

30

 

SECTION 14.4  Mortgagee
May Perform; Mortgagee Appointed Attorney-in-Fact.  If the Mortgagor shall fail to perform any
covenants contained in this Mortgage, subject to any applicable grace periods
or contest rights permitted pursuant to Article IX hereof
(including, without limitation, the Mortgagor’s covenants to (i) pay the
premiums in respect of all required insurance policies hereunder, (ii) pay
Charges, (iii) make repairs, (iv) discharge Liens or (v) pay or
perform any obligations of the Mortgagor under any Mortgaged Property) or if
any warranty on the part of the Mortgagor contained herein shall be breached,
the Mortgagee may (but shall not be obligated to) do the same or cause it to be
done or remedy any such breach, and may expend funds for such purpose; provided,
however, that the Mortgagee shall in no event be bound to inquire into
the validity of any tax, Lien, imposition or other obligation which the Mortgagor
fails to pay or perform as and when required hereby and which the Mortgagor
does not contest in accordance with the provisions of Article IX
hereof.  Any and all amounts so expended
by the Mortgagee shall be paid by the Mortgagor in accordance with the provisions
of Section 14.5 hereof. 
Neither the provisions of this Section 14.4 nor any action
taken by the Mortgagee pursuant to the provisions of this Section 14.4
shall prevent any such failure to observe any covenant contained in this
Mortgage nor any breach of warranty from constituting an Event of Default.  Upon the occurrence of an Event of Default,
the Mortgagor hereby appoints the Mortgagee its attorney-in-fact, with full
authority in the place and stead of the Mortgagor and in the name of the
Mortgagor to take any action and to execute any instrument consistent with the
terms hereof and the other Security Documents which the Mortgagee may deem
necessary or advisable to accomplish the purposes hereof.  The foregoing grant of authority is a power
of attorney coupled with an interest and such appointment shall be irrevocable
for the term hereof.  The Mortgagor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.

 

SECTION 14.5  Expenses  The Mortgagor will upon demand pay to the
Mortgagee the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and the fees and expenses of any experts and
agents which the Mortgagee may incur in connection with (i) any action,
suit or other proceeding affecting the Mortgaged Property or any part thereof
commenced, in which action, suit or proceeding the Mortgagee is made a party or
participates or in which the right to use the Mortgaged Property or any part
thereof is threatened, or in which it becomes necessary in the judgment of the
Mortgagee to defend or uphold the Lien hereof (including, without limitation,
any action, suit or proceeding to establish or uphold the compliance of the
Mortgaged Property with any Requirements of Law), (ii) the collection of
the Secured Obligations, (iii) the enforcement and administration hereof, (iv) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Mortgaged Property, (v) the exercise or
enforcement of any of the rights of the Mortgagee or any Secured Party
hereunder or (vi) the failure by the Mortgagor to perform or observe any
of the provisions hereof.  All amounts
expended by the Mortgagee and payable by the Mortgagor under this Section 14.5
shall be due upon demand therefor (together with interest thereon accruing at
the Default Rate during the period from and including the date on which such
funds were so expended to the date of repayment) and shall be part of the
Secured Obligations.  The Mortgagor’s
obligations under this Section 14.5 shall survive the termination
hereof and the discharge of the Mortgagor’s other obligations under this Mortgage.

 

SECTION 14.6  Indemnity.

 

(i)            The
Mortgagor agrees to indemnify, pay and hold harmless the Mortgagee and each of
the other Secured Parties and the officers, directors, employees, agents and
Affiliates of the Mortgagee and each of the other Secured Parties
(collectively, the “Indemnitees”) from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs (including, without limitation, settlement costs),
expenses or disbursements of any kind or nature whatsoever (including,

 

31

 

without limitation, the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto), which may
be imposed on, incurred by or asserted against that Indemnitee, in any manner
relating to or arising out hereof, the Indenture, the Notes, any other Security
Document or any other document evidencing the Secured Obligations (including,
without limitation, any misrepresentation by the Mortgagor in this Mortgage,
the Indenture, the Notes, any other Security Document or any other document
evidencing the Secured Obligations (the “Indemnified Liabilities”); provided,
however, that the Mortgagor shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Liabilities if it has been determined by
a final decision (after all appeals and the expiration of time to appeal) by a
court of competent jurisdiction that such Indemnified Liabilities arose from
the negligence or willful misconduct of that Indemnitee.  To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the
Mortgagor shall contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.

 

(ii)           Survival.  The obligations of the Mortgagor contained in
this Section 14.6 shall survive the termination hereof and the
discharge of the Mortgagor’s other obligations under this Mortgage, the
Indenture and the other Security Documents.

 

(iii)          Reimbursement.  Any amount paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Mortgaged Property.

 

SECTION 14.7  Continuing
Security Interest; Assignment.  This
Mortgage shall create a continuing Lien on and security interest in the
Mortgaged Property and shall (i) be binding upon the Mortgagor, its
respective successors and assigns and (ii) inure, together with the rights
and remedies of the Mortgagee hereunder, to the benefit of the Mortgagee and
the other Secured Parties and each of their respective successors, transferees
and assigns.  No other Persons
(including, without limitation, any other creditor of Mortgagor) shall have any
interest herein or any right or benefit with respect hereto.  Without limiting the generality of the
foregoing clause (ii), any Holder of the Notes may assign or otherwise
transfer any indebtedness held by it secured by this Mortgage to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Holder, herein or otherwise,
subject however, to the provisions of the Indenture.

 

SECTION 14.8  Termination;
Release.  The Mortgaged Property
shall be released from the Lien of this Mortgage in accordance with the
provisions of Articles [X and XIII] of the Indenture.

 

SECTION 14.9  Modification
in Writing.  No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by the Mortgagor therefrom, shall be effective
unless the same shall be done in accordance with the terms of the Indenture and
unless in writing and signed by the Mortgagee and Mortgagor.  Any amendment, modification or supplement of
or to any provision hereof, any waiver of any provision hereof and any consent
to any departure by the Mortgagor from the terms of any provision hereof shall
be effective only in the specific instance and for the specific purpose for
which made or given.  Except where notice
is specifically required by this Mortgage or any other Security Document, no
notice to or demand on the Mortgagor in any case shall entitle the Mortgagor to
any other or further notice or demand in similar or other circumstances.

 

32

 

SECTION 14.10  Notices.  Unless otherwise provided herein or in the
Indenture, any notice or other communication herein required or permitted to be
given shall be given in the manner and become effective as set forth in the
Indenture, if to the Mortgagor, addressed to it at the address of the Issuer
set forth in the Indenture, and as to the Mortgagee, addressed to it at its
address set forth in the Indenture, or in each case at such other address as
shall be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section 14.10.

 

SECTION 14.11  GOVERNING
LAW; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.  THIS MORTGAGE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH
THE PREMISES ARE LOCATED, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR ITEM OR TYPE OF
MORTGAGED PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN SUCH
STATE.  MORTGAGOR AGREES THAT SERVICE OF
PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO THE ISSUER AT ITS ADDRESS SET FORTH IN THE INDENTURE OR AT
SUCH OTHER ADDRESS OF WHICH THE MORTGAGEE SHALL HAVE BEEN NOTIFIED PURSUANT THERETO.  IF ANY AGENT APPOINTED BY MORTGAGOR REFUSES
TO ACCEPT SERVICE, MORTGAGOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE.  NOTHING
HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT OF MORTGAGEE TO BRING PROCEEDINGS AGAINST
MORTGAGOR IN THE COURTS OF ANY OTHER JURISDICTION.  THE MORTGAGOR HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 14.12  Severability
of Provisions.  Any provision hereof
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other jurisdiction.

 

SECTION 14.13  Limitation
on Interest Payable.  It is the
intention of the parties to conform strictly to the usury laws, whether state
or Federal, that are applicable to the transaction of which this Mortgage is a
part.  All agreements between the
Mortgagor and the Mortgagee, whether now existing or hereafter arising and
whether oral or written, are hereby expressly limited so that in no contingency
or event whatsoever shall the amount paid or agreed to be paid by the Mortgagor
for the use, forbearance or detention of the money to be loaned or advanced
under the Indenture or any related document or for the payment or performance
of any covenant or obligation contained herein or in the Indenture or any
related document exceed the maximum amount permissible under applicable Federal
or state usury laws.  If under any
circumstances whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit
of validity prescribed by law, then the obligation to be fulfilled shall be
reduced to the limit of such validity. 
If under any circumstances the Mortgagor shall have paid an amount
deemed interest by applicable law, which would exceed the highest lawful rate,
such amount that would be excessive interest under applicable usury laws shall
be applied to the reduction of the principal amount owing in respect of the
Secured Obligations and not to the payment of interest, or if

 

33

 

such excessive interest exceeds the unpaid balance of
principal and any other amounts due hereunder, the excess shall be refunded to
the Mortgagor.  All sums paid or agreed
to be paid for the use, forbearance or detention of the principal under any
extension of credit by the Mortgagee shall, to the extent permitted by
applicable law, and to the extent necessary to preclude exceeding the limit of
validity prescribed by law, be amortized, prorated, allocated and spread from
the date hereof until payment in full of the Secured Obligations so that the
actual rate of interest on account of such principal amounts is uniform
throughout the term hereof.

 

SECTION 14.14  Business
Days.  In the event any time period
or any date provided in this Mortgage ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.

 

SECTION 14.15  Relationship.  The relationship of the Mortgagee to the
Mortgagor hereunder is strictly and solely that of lender and borrower and
mortgagor and mortgagee and nothing contained in the Indenture, the Notes, this
Mortgage or any other document or instrument now existing and delivered in
connection therewith or otherwise in connection with the Secured Obligations is
intended to create, or shall in any event or under any circumstance be
construed as creating a partnership, joint venture, tenancy-in-common, joint
tenancy or other relationship of any nature whatsoever between the Mortgagee and
the Mortgagor other than as lender and borrower and mortgagor and mortgagee.

 

SECTION 14.16  Waiver
of Stay.

 

(i)            The
Mortgagor agrees that in the event that the Mortgagor or any property or assets
of the Mortgagor shall hereafter become the subject of a voluntary or
involuntary proceeding under the Bankruptcy Code or the Mortgagor shall
otherwise be a party to any federal or state bankruptcy, insolvency, moratorium
or similar proceeding to which the provisions relating to the automatic stay
under Section 362 of the Bankruptcy Code or any similar provision in any
such law is applicable, then, in any such case, whether or not the Mortgagee
has commenced foreclosure proceedings under this Mortgage, the Mortgagee shall
be entitled to relief from any such automatic stay as it relates to the
exercise of any of the rights and remedies (including, without limitation, any
foreclosure proceedings) available to the Mortgagee as provided in this
Mortgage, in any other Security Document or any other document evidencing the
Secured Obligations.

 

(ii)           The
Mortgagee shall have the right to petition or move any court having
jurisdiction over any proceeding described in Section 14.16(i) hereof
for the purposes provided therein, and the Mortgagor agrees (i) not to
oppose any such petition or motion and (ii) at the Mortgagor’s sole cost
and expense, to assist and cooperate with the Mortgagee, as may be requested by
the Mortgagee from time to time, in obtaining any relief requested by the
Mortgagee, including, without limitation, by filing any such petitions,
supplemental petitions, requests for relief, documents, instruments or other
items from time to time requested by the Mortgagee or any such court.

 

SECTION 14.17  No
Credit for Payment of Taxes or Impositions. 
The Mortgagor shall not be entitled to any credit against the principal,
premium, if any, or interest payable under the Indenture or the Notes, and the
Mortgagor shall not be entitled to any credit against any other sums which may
become payable under the terms thereof or hereof, by reason of the payment of
any Charge on the Mortgaged Property or any part thereof.

 

34

 

SECTION 14.18  No
Claims Against the Mortgagee. 
Nothing contained in this Mortgage shall constitute any consent or
request by the Mortgagee, express or implied, for the performance of any labor
or services or the furnishing of any materials or other property in respect of
the Premises or any part thereof, nor as giving the Mortgagor any right, power
or authority to contract for or permit the performance of any labor or services
or the furnishing of any materials or other property in such fashion as would
permit the making of any claim against the Mortgagee in respect thereof or any
claim that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the Lien hereof.

 

SECTION 14.19  Obligations
Absolute.  All obligations of the
Mortgagor hereunder shall be absolute and unconditional irrespective of:

 

(i)            any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of the Mortgagor, the Issuer or any other Guarantor;

 

(ii)           any
lack of validity or enforceability of the Indenture, the Notes or any other
agreement or instrument relating thereto;

 

(iii)          any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Secured Obligations, or any other amendment or waiver of or any
consent to any departure from the Indenture, the Notes or any other agreement
or instrument relating thereto;

 

(iv)          any
exchange, release or non-perfection of any other collateral, or any release or
amendment or waiver of or consent to any departure from any guarantee, for all
or any of the Secured Obligations;

 

(v)           any
exercise or non-exercise, or any waiver of any right, remedy, power or
privilege under or in respect hereof, the Indenture, the Notes or any agreement
or instrument relating thereto except as specifically set forth in a waiver granted
pursuant to the provisions of Section 14.9 hereof; or

 

(vi)          any
other circumstances which might otherwise constitute a defense available to, or
a discharge of, the Mortgagor.

 

SECTION 14.20  Last
Dollars Secured.  This Mortgage
secures only a portion of the Indebtedness owing or which may become owing by
Mortgagor.  The parties agree that any
payments or repayments of such Indebtedness by Mortgagor shall be and be deemed
to be applied first to the portion of the Indebtedness that is not secured
hereby, it being the parties’ intent that the portion of the Indebtedness last
remaining unpaid shall be secured hereby.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

35

 

IN WITNESS WHEREOF, the Mortgagor has caused this
Mortgage to be duly executed and delivered under seal the day and year first
above written.

 

	
   

  	
  [

  	
   

  	
  ],

  
	
   

  	
  Mortgagor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

[local counsel to confirm
signature requirements]

 

 

ACKNOWLEDGMENT

 

	
  State of

  	
   

  	
  )

  
	
   

  	
  ) ss.:

  
	
  County of

  	
   

  	
  )

  
				

 

[Local counsel to provide appropriate acknowledgment]

 

 

Schedule A

 

[Legal Description]

 

 

[to come from title
policy]

 

 

Schedule B

 

Each of the liens and other encumbrances excepted as
being prior to the Lien hereof as set forth in [Schedule B] to the
marked title insurance commitment issued by [Title Insurance Company], dated as
of the date hereof and delivered to Trustee on the date hereof, bearing [Title
Insurance Company] reference number [Title Number] relating to the real
property described in Schedule A attached hereto.

 

 

Schedule C

 

Leases Affecting the Mortgaged Property

 

 

Exhibit 1

 

FORM OF SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT (the “Agreement”) is made and entered into as of the         
day of             ,
         by and between                                                           ,
as trustee, having an office at                                 
(in such capacity, “Trustee”), and                                  ,
having an office at                                                 
(“Tenant”).

 

R  E
C  I  T  A  L  S:

 

A.  Tenant is
the tenant under a certain lease dated                            ,
         between         
                      
                   
, as landlord (“Landlord”), and Tenant, as tenant (as amended through the date
hereof, the “Lease”), pursuant to which Tenant leased a portion (the “Leased
Premises”) of the property known as                                                 ,
located at                                                ,
as more particularly described in Schedule A attached hereto (the “Property”).

 

B.  Landlord has
or will grant a mortgage lien on and security interest in the Property to
Trustee (for its benefit and for the benefit of the holders of certain senior
secured notes and notes issued in exchange therefor pursuant to that certain
indenture dated as of [                       , 2003])
pursuant to one or more mortgages, deeds of trust, deeds to secure debt or
similar security instruments (collectively, the “Security Instruments”).

 

C.  Tenant has
agreed to subordinate the Lease to the Security Instruments and to the lien
thereof and Trustee has agreed not to disturb Tenant’s possessory rights in the
Leased Premises under the Lease on the terms and conditions hereinafter set
forth.

 

A  G  R  E  E
M  E  N  T:

 

NOW, THEREFORE, the parties hereto mutually agree as
follows:

 

1.  Subordination.  Notwithstanding anything to the contrary set
forth in the Lease, the Lease and the leasehold estate created thereby and all
of Tenant’s rights thereunder are and shall at all times be subject and
subordinate in all respects to the Security Instruments and the lien thereof,
and to all rights of Trustee thereunder, and to any and all advances to be made
thereunder, and to all renewals, modifications, consolidations, replacements
and extensions thereof.

 

2.  Nondisturbance.  So long as Tenant complies with the
provisions of this Agreement, pays all rents and other charges as specified in
the Lease and is not otherwise in default (beyond applicable notice and cure
periods) of any of its obligations and covenants pursuant to the Lease, Trustee
agrees for itself and its successors in interest and for any other person
acquiring title to the Property through a foreclosure (an “Acquiring Party”),
that Tenant’s possession of the Leased Premises as described in the Lease will
not be disturbed during the term of the Lease by reason of a foreclosure.  For purposes of this Agreement, a “foreclosure”
shall include (but not be limited to) a sheriff’s or trustee’s sale under the
power of sale 

 

 

contained in the Security Instruments, the termination
of any superior lease of the Property and any other transfer of the Landlord’s
interest in the Property under peril of foreclosure, including, without
limitation to the generality of the foregoing, an assignment or sale in lieu of
foreclosure.

 

3.  Attornment.  Tenant agrees to attorn to, accept and
recognize any Acquiring Party as the landlord under the Lease pursuant to the
provisions expressly set forth therein for the then remaining balance of the
term of the Lease, and any extensions thereof as made pursuant to the
Lease.  The foregoing provision shall be self-operative
and shall not require the execution of any further instrument or agreement by
Tenant as a condition to its effectiveness.

 

4.  No Liability.
Notwithstanding anything to the contrary contained herein or in the Lease, it
is specifically understood and agreed that neither the Trustee, any receiver
nor any Acquiring Party shall be:

 

(a)  liable for any act, omission, negligence or default of any
prior landlord (including Landlord); or

 

(b)  liable for any failure of any prior landlord (including
Landlord) to construct any improvements or bound by any covenant to construct
any improvement either at the commencement of the term of the Lease or upon any
renewal or extension thereof or upon the addition of additional space pursuant
to any expansion right contained in the Lease; or

 

(c)  subject to any offsets, credits, claims or defenses which
Tenant might have against any prior landlord (including Landlord); or

 

(d)  bound by any rent or additional rent which is payable on a
monthly basis and which Tenant might have paid for more than one (1) month
in advance to any prior landlord (including Landlord) or by any security
deposit or other prepaid charge which Tenant might have paid in advance to any
prior landlord (including Landlord); or

 

(e)  liable to Tenant hereunder or under the terms of the Lease
beyond its interest in the Property; or

 

(f)  bound by any assignment, subletting, renewal, extension or
any other agreement or modification of the Lease made without the written
consent of Trustee; or

 

(g)  bound by any consensual or negotiated surrender, cancellation
or termination of the Lease, in whole or in part, agreed upon between Landlord
and Tenant unless effected unilaterally by Tenant pursuant to the express terms
of the Lease.

 

Notwithstanding the foregoing, Tenant reserves its
right to any and all claims or causes of action (i) against such prior
landlord for prior losses or damages and (ii) against the successor
landlord for all losses or damages arising from and after the date that such
successor landlord takes title to the Property.

 

5.  Certain Acknowledgments
and Agreements by Tenant.  (a) Tenant
has notice that the Lease and the rents and all other sums due thereunder have
been assigned to Trustee as security for the notes secured by the Security
Instruments.  In the event Trustee
notifies Tenant of the occurrence of a 

 

2

 

default under the Security Instruments and demands
that Tenant pay its rents and all other sums due or to become due under the
Lease directly to Trustee, Tenant shall honor such demand and pay its rent and
all other sums due under the Lease directly to Trustee or as otherwise
authorized in writing by Trustee. 
Landlord irrevocably authorizes Tenant to make the foregoing payments to
Trustee upon such notice and demand.

 

(b)  Tenant shall send a copy of any and all
notices or statements under the Lease to Trustee at the same time such notices
or statements are sent to Landlord.

 

(c)  This Agreement satisfies any and all
conditions or requirements in the Lease relating to the granting of a
non-disturbance agreement.

 

6.  Trustee to Receive Default
Notices.  Tenant shall notify Trustee
of any default by Landlord under the Lease which would entitle Tenant to cancel
the Lease, and agrees that, notwithstanding any provisions of the Lease to the
contrary, no notice of cancellation thereof shall be effective unless Trustee
shall have received notice of default giving rise to such cancellation and
shall have failed within sixty (60) days after receipt of such notice to cure such
default or, if such default cannot be cured within sixty (60) days, shall have
failed within sixty (60) days after receipt of such notice to commence and
thereafter diligently pursue any action necessary to cure such default.

 

7.  Estoppel.  Tenant hereby certifies and represents to
Trustee that as of the date of this Agreement:

 

(a)  the Lease is in full force and effect;

 

(b)  all requirements for the commencement and validity of the
Lease have been satisfied and there are no unfulfilled conditions to Tenant’s
obligations under the Lease;

 

(c)  Tenant is not in default under the Lease and has not received
any uncured notice of any default by Tenant under the Lease; to the best of
Tenant’s knowledge, Landlord is not in default under the Lease; no act, event
or condition has occurred which with notice or the lapse of time, or both,
would constitute a default by Tenant or Landlord under the Lease; no claim by
Tenant of any nature exists against Landlord under the Lease; and all
obligations of Landlord have been fully performed;

 

(d)  there are no defenses, counterclaims or setoffs against rents
or charges due or which may become due under the Lease;

 

(e)  none of the rent which Tenant is required to pay under the
Lease has been prepaid, or will in the future be prepaid, more than one (1) month
in advance;

 

(f)  Tenant has no right or option contained in the Lease or in
any other document to purchase all or any portion of the Leased Premises;

 

(g)  the Lease has not been modified or amended and constitutes the
entire agreement between Landlord and Tenant relating to the Leased Premises;

 

3

 

(h)  Tenant has not assigned, mortgaged, sublet, encumbered,
conveyed or otherwise transferred any or all of its interest under the Lease;
and

 

(i)  Tenant has full authority to enter into this Agreement, which
has been duly authorized by all necessary action.

 

8.  Notices.  All notices or other written communications
hereunder shall be deemed to have been properly given (i) upon delivery,
if delivered in person with receipt acknowledged by the recipient thereof, (ii) one
(1) Business Day (hereinafter defined) after having been deposited for
overnight delivery with any reputable overnight courier service, or (iii) three
(3) Business Days after having been deposited in any post office or mail
depository regularly maintained by the United States Postal Service and sent by
registered or certified mail, postage prepaid, return receipt requested,
addressed to the receiving party at its address set forth above or addressed as
such party may from time to time designate by written notice to the other
parties.  For purposes of this Section 8,
the term “Business Day” shall mean any day other than Saturday, Sunday or any
other day on which banks are required or authorized to close in New York, New
York.  Either party by notice to the
other may designate additional or different addresses for subsequent notices or
communications.

 

9.  Successors.  The obligations and rights of the parties
pursuant to this Agreement shall bind and inure to the benefit of the
successors, assigns, heirs and legal representatives of the respective parties;
provided, however, that in the event of the assignment or
transfer of the interest of Trustee, all obligations and liabilities of Trustee
under this Agreement shall terminate, and thereupon all such obligations and
liabilities shall be the responsibility of the party to whom Trustee’s interest
is assigned or transferred; and provided, further, that the
interest of Tenant under this Agreement may not be assigned or transferred
without the prior written consent of Trustee. 
In addition, Tenant acknowledges that all references herein to Landlord
shall mean the owner of the landlord’s interest in the Lease, even if said
owner shall be different from the Landlord named in the Recitals.

 

10.  Duplicate Original;
Counterparts.  This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original.  This
Agreement may be executed in several counterparts, each of which counterparts
shall be deemed an original instrument and all of which together shall
constitute a single Agreement.

 

11.  Limitation of Trustee’s
Liability.  (a)  Trustee
shall have no obligations nor incur any liability with respect to any
warranties of any nature whatsoever, whether pursuant to the Lease or otherwise,
including, without limitation, any warranties respecting use, compliance with
zoning, Landlord’s title, Landlord’s authority, habitability, fitness for
purpose or possession.

 

(b)  In the event that Trustee shall acquire
title to the Leased Premises or the Property, Trustee shall have no obligation,
nor incur any liability, beyond Trustee’s then equity interest, if any, in the
Leased Premises, and Tenant shall look exclusively to such equity interest of
Trustee, if any, in the Leased Premises for the payment and discharge of any
obligations imposed upon Trustee hereunder or under the Lease, and Trustee is
hereby released and relieved of any other obligations hereunder and under the
Lease.

 

12.  Modification in Writing.  This Agreement may not be modified except by
an agreement in writing signed by the parties hereto or their respective
successors in interest.

 

4

 

13.  Lien of Security
Instruments.  Nothing contained in
this Agreement shall in any way impair or affect the lien created by the
Security Instruments or the provisions thereof.

 

14.  Compliance with Lease.  Tenant agrees that in the event there is any
inconsistency between the terms and provisions hereof and the terms and
provisions of the Lease, the terms and provisions hereof shall be controlling.

 

15.  Governing Law;
Severability.  This Agreement shall
be governed by the laws of the State of
[            ].  If any term of this Agreement or the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Agreement or the application of
such terms to any person or circumstances other than those as to which it is
invalid or unenforceable shall not be affected thereby, and each term of this
Agreement shall be valid and enforceable to the fullest extent permitted by
law.

 

16.  Further Actions.  Tenant agrees at its own expense to execute
and deliver, at any time and from time to time upon the request of Trustee or
any Acquiring Party, such documents and instruments (in recordable form, if
requested) as may be necessary or appropriate, in the opinion of Trustee or any
Acquiring Party, to fully implement or to further evidence the understandings
and agreements contained in this Agreement. 
Moreover, Tenant hereby irrevocably appoints and constitutes Trustee or
any Acquiring Party as its true and lawful attorney-in-fact to execute and deliver
any such documents or instruments which may be necessary or appropriate, in the
opinion of Trustee or any Acquiring Party, to implement or further evidence
such understandings and agreements and which Tenant, after thirty (30) days’
notice from Trustee or any Acquiring Party, has failed to execute and deliver.

 

5

 

IN WITNESS WHEREOF, Trustee and Tenant have duly
executed this Agreement as of the date first above written.

 

	
   

  	
   

  	
  ,

  
	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ,

  
	
   

  	
  as Tenant

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

The undersigned, as the Landlord named in the
Recitals, having duly executed this Agreement as of the date first written
above, and as mortgagor, pledgor, assignor or debtor under the Security Instruments,
hereby accepts and agrees for itself and its successors and assigns, (i) to
be bound by the provisions of Section 5 hereof, (ii) that nothing
contained in the foregoing Agreement (x) shall in any way be deemed to
constitute a waiver by Trustee of any of its rights or remedies under the
Security Instruments or (y) shall in any way be deemed to release Landlord
from its obligations to comply with the terms, provisions, conditions,
covenants and agreements set forth in the Security Instruments and (iii) that
the provisions of the Security Instruments remain in full force and effect and
must be complied with by Landlord.

 

	
   

  	
   

  	
  , a

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

ACKNOWLEDGMENT

 

	
  State of

  	
   

  	
  )

  
	
   

  	
   

  	
  ) ss.:

  
	
  County of

  	
   

  	
  )

  
				

 

[Local counsel to provide appropriate acknowledgment]

 

 

SCHEDULE A to EXHIBIT 1

 

Description of Real Property

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