RIDER TO DEED OF TRUST WITH ASSIGNMENT OF RENTS
Exhibit 10.4
This
Rider to Deed of Trust with Assignment of Rents is hereby attached to and made a
part of that certain Deed of Trust with Assignment of Rents (Long Form) (the
“Trust
Deed”) dated for reference purposes August 30, 2010, by and between SPT-LAKE ELSINORE HOLDING CO.,
LLC, a Delaware limited liability company (“Trustor”),
CARDINAL INVESTMENT
PROPERTIES-XXXXXXXXX, X.X., a California limited partnership (“Beneficiary”),
and FIRST AMERICAN TITLE
INSURANCE COMPANY, a California corporation (“Trustee”),
with reference to the following matters:
RECITALS:
A. Trustor has executed that
certain Promissory Note Secured by Deed of Trust dated concurrently with the
Trust Deed (the “Note”),
and pursuant to which Trustor has borrowed from Beneficiary the principal sum of
One Million and No/100 Dollars ($1,000,000.00) (the “Loan”).
The Note, the Trust Deed and such other agreements and/or instruments as may
have been entered into or made by Trustor for the benefit of Beneficiary in
connection with the Loan may hereinafter be referred to as the “Loan
Documents”.
B. The
lien of the Trust Deed is a monetary encumbrance upon and against the property
more particularly described on Exhibit “A” to the Trust Deed and by this
reference incorporated herein (the “Property”).
C.
Trustor intends this Rider to supplement and supersede, where applicable, the
terms and provisions of the Trust Deed.
Now,
therefore, in consideration of the above Recitals, and other good and valuable
consideration, receipt of which is hereby acknowledged, Trustor hereby agrees to
be bound by, and further supplement and modify the Trust Deed with the following
provisions which shall supersede any provision addressing (or silence
concerning) the same issue in the Trust Deed:
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1.
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Due on
Sale/Encumbrance: Trustor shall not sell, transfer, assign, further
encumber, hypothecate, or in any way dispose of or use as collateral for
another loan or obligation of Trustor, the Property or any interest
therein without first obtaining the prior written consent of Beneficiary,
which consent may be granted, conditioned or withheld in the sole
discretion of Beneficiary. Any violation of the restrictions set forth
herein, whether by act, omission or by virtue of law, shall be considered
a default in the performance of the obligations of Trustor under the Trust
Deed and Beneficiary shall have the same rights with respect thereto as
are provided to Beneficiary under the Trust Deed with respect to any
default by Trustor in the payment of any indebtedness secured under the
Trust Deed or in Trustor’s performance of any agreement
thereunder.
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2.
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Assignment of Leases
and Rents: The following provisions supersede the provisions of
Paragraph
B(5) of the Trust Deed:
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a. Assignment. Trustor
hereby irrevocably assigns to Beneficiary all of Trustor’s right, title and
interest in, to and under: (a) all leases and/or subleases of the Property, all
licenses and agreements relating to the management, leasing or operation of the
Property and all other agreements of any kind relating to the use or occupancy
of the Property, whether now existing or entered into after the date hereof
(collectively, the “Leases”);
and (b) the rents, issues and profits of the Property, including, without
limitation, all amounts payable and all rights and benefits accruing to Trustor
under the Leases (collectively, the “Payments”).
The term “Leases” shall also include all guarantees of and security for the
lessees’ performance thereunder, and all amendments, extensions, renewals or
modifications thereto which are permitted hereunder. This is a present and
absolute assignment, not an assignment for security purposes only, and
Beneficiary’s right to the Leases and Payments is not contingent upon, and may
be exercised without possession of, the Property.
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x. Xxxxx of License. By
acceptance of this Rider, Beneficiary shall be deemed to have conferred upon
Trustor a license (the “License”)
to collect and retain the Payments as they become due and payable, until the
occurrence of a default under any of the Loan Documents. Upon a default and the
passage of the applicable cure period, the License shall be automatically
revoked and Beneficiary may collect and apply the Payments without notice and
without taking possession of the Property. Trustor hereby irrevocably authorizes
and directs the lessees under the Leases to rely upon and comply with any notice
or demand by Beneficiary for the payment to Beneficiary of any rental or other
sums which may at any time become due under the Leases, or for the performance
of any of the lessees’ undertakings under the Leases, and the lessees shall have
no right or duty to inquire as to whether any Default has actually occurred or
is then existing hereunder. Trustor hereby relieves the lessees from any
liability to Trustor by reason of relying upon and complying with any such
notice or demand by Beneficiary.
c. Effect of Assignment.
The foregoing irrevocable assignment shall not cause Beneficiary to be: (a) a
mortgagee in possession; (b) responsible or liable for the control, care,
management or repair of the Property or for performing any of the terms,
agreements, undertakings, obligations, representations, warranties, covenants
and conditions of the leases; or (c) responsible or liable for any waste
committed on the Property by the lessees or any other parties; for any dangerous
or defective condition of the Property; or for any negligence in the management,
upkeep, repair or control of the Property resulting in loss or injury or death
to any Lessee, licensee, employee, invitee or other person. Beneficiary shall
not directly or indirectly be liable to Trustor or any other person as a
consequence of: (i) the exercise or failure to exercise any of the rights,
remedies or powers granted to Beneficiary hereunder; (Ii) the failure or refusal
of Beneficiary to perform or discharge any obligation, duty or liability of
Trustor arising under the Leases.
d. Representations and
Warranties. Trustor represents and warrants that: (a) all existing
Leases, if any, are in full force and effect and are enforceable in accordance
with their respective terms, and no breach or default, or event which would
constitute a breach or default after notice or the passage of time, or both,
exists under any existing Leases; and (b) no rent or other payment under any
existing Lease has been paid by any lessee for more than one (1) month in
advance; and (c) none of the lessor’s interests under any of the Leases has been
transferred or assigned.
e. Covenants. Trustor
covenants and agrees at Trustor’s sole cost and expense to: (a) perform the
obligations of lessor contained in the Leases and enforce by all available
remedies in a commercially reasonable manner performance by the lessees of the
obligations of the lessees contained in the Leases; (b) give Beneficiary prompt
written notice of any default which occurs with respect to any of the Leases,
whether the default be that of the lessee or of the lessor; (c) exercise
commercially reasonable efforts to keep all portions of the Property leased at
all times at rentals not less than the fair market rental value; (d) deliver to
Beneficiary fully executed, counterpart original(s) of each and every Lease if
requested to do so; and (e) execute and record such additional assignments of
any Lease or specific subordinations of any Lease to the Trust Deed, in form and
substance acceptable to Beneficiary, as Beneficiary may reasonably request.
Except with Beneficiary’s prior written consent, which consent shall not be
unreasonably withheld or delayed, Trustor shall not: (i) enter into any Leases
after the date hereof (except for leases executed by Trustor in the ordinary
course of Trustor’s business); (ii) execute any other assignment relating to any
of the Leases; (iii) discount any rent or other sums due under the Leases or
collect the same in advance, other than to collect rent one (1) month in advance
of the time when it becomes due; (iv) terminate, modify or amend any of the
terms of the Leases or in any manner release or discharge the lessees from any
obligations thereunder; (v) consent to any assignment or subletting by any
lessee; or (vi) subordinate or agree to subordinate any of the Leases to any
other deed of trust or encumbrance. Any such attempted action in violation of
the provisions hereof shall be null and void.
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f. Estoppel
Certificates. Within thirty (30) days after request by Beneficiary,
Trustor shall deliver to Beneficiary and to any party designated by Beneficiary,
estoppel certificates executed by Trustor for any existing Lease (and shall use
commercially reasonable efforts to cause such certificates to be executed by
each of the lessees), in recordable form, certifying (if such be the case): (i)
that the foregoing assignment and the Leases are in full force and effect; (ii)
the date of each lessee’s most recent payment of rent; (iii) that there are no defenses
or offsets outstanding, or stating those claimed by Trustor or lessees under the
foregoing assignment or the Leases, as the case may be; and (iv) any other
information reasonably requested by Beneficiary.
3. Reinstatement of
Lien. Beneficiary’s rights hereunder shall be reinstated and revived, and
the enforceability of this Trust Deed shall continue, with respect to any amount
at any time paid on account of any obligations secured hereby which Beneficiary
is thereafter required to restore or return in connection with a bankruptcy,
insolvency, reorganization or similar proceeding with respect to any
Borrower.
4. Insurance. In
addition to the obligations of Trustor pursuant to Paragraph A(2) of
the Trust Deed, Trustor shall maintain in effect at all times prior to the full
release and reconveyance of the Trust Deed, the following insurance naming
Beneficiary as an additional insured and containing a waiver of subrogation: (a)
commercial general public liability insurance covering claims for bodily injury,
personal injury and property damage with single limit coverage of not less than
$1,000,000 per occurrence and (b) if reasonably requested in writing by
Beneficiary, all risk course of construction insurance in an amount not less
than the full replacement value of the improvements to the
Property.
5. No Amendment. Neither
this Rider nor the Trust Deed shall be amended without the written consent of
Trustor and Beneficiary.
6. Notices. Unless
otherwise directed by Trustor in writing, any notices required to be delivered
to Trustor hereunder shall be delivered: c/x Xxxxxxx Advisors, L.P., 0000
Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxx. Unless
otherwise directed by Beneficiary in writing, any notices required to be
delivered to Beneficiary hereunder shall be delivered to:
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c/o
Cardinal Development
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000
Xxxxxxx Xxxxxx, Xxxxx 00
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Xxxxx
Xxxx, Xxxxxxxxxx 00000
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Attention: Xxxxx
X.
Xxxxxxx
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7. Attorneys Fees. In
addition to the obligations of Trustor pursuant to Paragraph A(3) of the
Trust Deed, Trustor shall pay a reasonable sum as and for the attorneys fees and
legal costs incurred by Beneficiary in connection with any dispute arising
between the parties hereto or their legal representatives, successors and
assigns, concerning any provision of this Rider or the Trust Deed, or the rights
and duties of any person in relation thereto, if Beneficiary is the prevailing
party in such dispute.
8. Governing Law. The
validity, interpretation and performance of this Rider or the Trust Deed shall
be controlled by and construed under the laws of the State of California. The
parties hereto hereby consent to the jurisdiction of the California courts with
venue in Orange County in the event any dispute arises in conjunction
herewith.
9. Time of Essence. Time
is of the essence. As used herein, the word “days” shall mean and refer to
calendar days; provided, however, in the event a payment date or deadline falls
on a Saturday, Sunday or federal holiday, such payment date or deadline shall be
extended to the next following calendar day that is not a Saturday, Sunday or
federal holiday.
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END OF
RIDER
Dated as
of the date first written above.
“Trustor”
SPT-LAKE ELSINORE HOLDING CO.,
LLC, a Delaware limited liability company
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By:
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Xxxxxxx
Partners, L.P., a Delaware limited
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partnership,
sole member
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By:
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Xxxxxxx
General Partner, LLC, a Delaware limited
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liability
company, general partner
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By:
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Xxxxxxx
Properties Trust, Inc.,
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a
Maryland corporation, manager
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By:
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/s/ Xxxxxxx X. Xxxxxxx | |||
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Xxxxxxx
X. Xxxxxxx, President
and CEO
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