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EXHIBIT 10.17
EXECUTION COPY
LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT,
AND ASSIGNMENT OF LEASES AND RENTS
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made by
D.J. Orthopedics, LLC,
as Grantor
to
FIRST AMERICAN TITLE INSURANCE COMPANY,
as Trustee
for the benefit of
FIRST UNION NATIONAL BANK,
as Collateral Agent, as Beneficiary
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Prepared Out of State by and,
When Recorded, Mail to:
▇▇▇ ▇▇▇▇▇▇▇, Esq.
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING
AND ASSIGNMENT OF LEASES AND RENTS
THIS LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT AND
ASSIGNMENT OF LEASES AND RENTS dated as of June 30, 1999 (this
"Deed of Trust"), by DJ Orthopedics, LLC, a Delaware limited
liability corporation, having an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ (the "Grantor"), to First American Title
Insurance Company, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ as trustee ("Trustee") for the benefit of FIRST UNION
NATIONAL BANK, a New York banking corporation ("First Union"),
having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as collateral agent (in such capacity, the
"Collateral Agent") for the benefit of the Secured Parties (as
defined below) (the "Beneficiary");
WITNESSETH THAT:
A. Reference is made to the Credit Agreement dated as of June 30,
1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Grantor, DonJoy, L.L.C. ("DonJoy"), a Delaware
limited liability company, the financial institutions party thereto as lenders
(together with the Swingline Lender (as defined below) the "Lenders"), First
Union, as administrative agent (in such capacity, the "Administrative Agent")
and as Collateral Agent and The Chase Manhattan Bank, as syndication agent, as
the issuing bank (in such capacity, the "Issuing Bank") and as swingline lender
(in such capacity, the "Swingline Lender"). As used herein, the term "Secured
Parties" shall mean (i) the Lenders, (ii) the Administrative Agent, (iii) the
Collateral Agent, (iv) the Issuing Bank, (v) each counterparty to a Hedging
Agreement entered into with the Borrower if such counterparty was a Lender (or
an Affiliate of a Lender) at the time the Hedging Agreement was entered into,
(vi) the beneficiaries of each indemnification obligation undertaken by the
Borrower under any Loan Document and (vii) the successors and permitted assigns
of each of the foregoing. Pursuant to the Credit Agreement, (i) the Lenders have
lent or agreed to lend to the Borrower (a) on a term basis, Term Loans (such
term and each other capitalized term used herein but not defined herein shall
have the meaning assigned to such term in the Credit Agreement) in an aggregate
principal amount not in excess of $28,500,000, and (b) on a revolving basis,
Revolving Loans, at any time after the
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Effective Date and from time to time prior to the Revolving Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of the
difference between $25,000,000 and the sum of (x) the aggregate principal amount
of the Swingline Loans outstanding at such time and (y) the L/C Exposure at such
time, (ii) the Issuing Bank has agreed to issue Letters of Credit at any time
and from time to time prior to the Revolving Maturity Date, in an aggregate
stated amount at any time outstanding not in excess of the lesser of (A)
$5,000,000 and (B) the difference between $25,000,000 and the sum of (x) the
aggregate principal amount of the Swingline Loans outstanding at such time and
(y) the L/C Exposure at such time and (iii) the Swingline Lender has agreed to
lend, on a revolving basis, Swingline Loans, at any time and from time to time
prior to the Revolving Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of the lesser of (A) $2,500,000 and (B) the
difference between $25,000,000 and the sum of (x) the aggregate principal amount
of the Swingline Loans outstanding at such time and (y) the L/C Exposure at such
time.
B. The obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit under the Credit Agreement are conditioned upon,
among other things, the execution and delivery by the Grantor of this Deed of
Trust in the form hereof, to secure the due and punctual payment of (a) the
principal of and premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, (b) each payment required to be made
by the Grantor under the Credit Agreement in respect of any Letter of Credit,
when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral, (c)
all other monetary obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Grantor to the Secured Parties under the
Credit Agreement, this Deed of Trust and the other Loan Documents to which the
Grantor is or is to be a party, (d) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Grantor under or
pursuant to the Credit Agreement, this Deed of Trust and the other Loan
Documents and (e) the due and punctual payment and performance of all
obligations of the Grantor under each Hedging Agreement entered into with a
counterparty that was a Lender (or an Affiliate of a Lender) at the time such
Hedging Agreement was entered into (all the obligations referred to in the
preceding clauses (a) through (e) being referred to collectively, as the
"Obligations").
C. Grantor is the subtenant under that certain sublease dated as of
June _, 1999, by and between, ▇▇▇▇▇ & Nephew, Inc. as sublessor, and Grantor as
sublessee (such lease as amended, supplemented or otherwise modified from time
to time, the "Subject Lease").
Granting Clauses
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NOW THEREFORE, IN CONSIDERATION OF the foregoing and in order to secure
(A) the due and punctual payment and performance of the Obligations, (B) the due
and punctual payment by the Grantor of all taxes and insurance premiums relating
to the Trust Property and (C) all disbursements made by Beneficiary for the
payment of taxes, common area charges or insurance premiums, all fees, expenses
or advances in connection with or relating to the Trust Property, and interest
on such disbursements and other amounts not timely paid in accordance with the
terms of the Credit Agreement, this Deed of Trust and the other Loan Documents,
Grantor hereby grants, conveys, mortgages, assigns and grants a security
interest in and pledges to the Trustee, IN TRUST FOREVER, with power of sale,
for the benefit of Beneficiary (for the ratable benefit of the Secured Parties),
a security interest in, all the following described property (the "Trust
Property") whether now owned or held or hereafter acquired:
(1) all Grantor's right, title and interest in the subleasehold
estate in the land more particularly described on Exhibit A hereto (the
"Land"), as created by the Subject Lease, including all rights of Grantor
under the Subject Lease, including the easements over certain other
adjoining land granted by any easement agreements, covenant or
restrictive agreements and all air rights, mineral rights, water rights,
oil and gas rights and development rights, if any, relating thereto, and
also together with all of the other easements, rights, privileges,
interests, hereditaments and appur tenances thereunto belonging or in
anyway appertaining and all of the estate, right, title, interest, claim
or demand whatsoever of Grantor therein and in the streets and ways
adjacent thereto, either in law or in equity, in possession or
expectancy, now or hereafter acquired (the "Premises");
(2) all Grantor's right, title and interest in all buildings,
improvements, structures, paving, parking areas, walkways and landscaping
now or hereafter erected or located upon the Land, and all fixtures of
every kind and type affixed to the Premises or attached to or forming
part of any structures, buildings or improvements and replacements
thereof now or hereafter erected or located upon the Land (the
"Improvements");
(3) all Grantor's right, title and interest in all apparatus,
movable appliances, building materials, equipment, fittings, furnishings,
furniture, machinery and other articles of tangible personal property of
every kind and nature, and replacements thereof, now or at any time
hereafter placed upon or used in any way in connection with the use,
enjoyment, occupancy or operation of the Improvements or the Premises,
including all of Grantor's books and records relating thereto and
including all pumps, tanks, goods, machinery, tools, equipment, lifts
(including fire sprinklers and alarm systems, fire prevention or control
systems, cleaning rigs, air conditioning, heating, boilers,
refrigerating, electronic monitoring, water, loading, unloading,
lighting, power, sanitation, waste removal, entertainment,
communications, computers, recreational, window or structural,
maintenance, truck or car repair and all other equipment of every kind),
restaurant, bar and all other indoor or outdoor furniture (including
tables, chairs, booths, serving stands, planters, desks, sofas, racks,
shelves, lockers and cabinets), bar equipment, glasses, cutlery,
uniforms, linens, memorabilia and other decorative items, furnishings,
appliances, supplies, inventory,
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rugs, carpets and other floor coverings, draperies, drapery rods and
brackets, awnings, venetian blinds, partitions, chandeliers and other
lighting fixtures, freezers, refrigerators, walk-in coolers, signs
(indoor and outdoor), computer sys tems, cash registers and inventory
control systems, and all other apparatus, equipment, furniture,
furnishings, and articles used in connection with the use or operation of
the Improvements or the Premises, it being understood that the
enumeration of any specific articles of property shall in no way result
in or be held to exclude any items of property not specifically
mentioned, provided that, to the extent inconsistent with the Loan
Documents, the definitions in the Loan Documents shall control (the
property referred to in this subparagraph (3), the "Personal Property");
(4) all Grantor's right, title and interest in all general
intangibles relating to design, development, operation, management and
use of the Premises or the Improvements, all certificates of occupancy,
zoning variances, building, use or other permits, approvals,
authorizations and consents obtained from and all materials prepared for
filing or filed with any governmental agency in connection with the
development, use, operation or management of the Premises and
Improvements, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Premises
and Improvements, all architectural drawings, plans, specifications, soil
tests, feasibility studies, appraisals, environmental studies, engi
neering reports and similar materials relating to any portion of or all
of the Premises and Improvements, and all payment and performance bonds
or warranties or guarantees relating to the Premises or the Improvements,
all to the extent assignable provided that, to the extent inconsistent
with the Loan Documents, the definitions in the Loan Documents shall
control (the "Permits, Plans and Warranties");
(5) Grantor's interest in and rights under any and all now or
hereafter existing leases or licenses (under which Grantor is landlord or
licensor) and subleases (subject to prohibitions therein) (under which
Grantor is sublandlord), concession, management, mineral or other
agreements of a similar kind that permit the use or occupancy of the
Premises or the Improvements for any purpose in return for any payment,
or the extraction or taking of any gas, oil, water or other minerals from
the Premises in return for payment of any fee, rent or royalty
(collectively, "Leases"), and all agreements or contracts for the sale or
other disposition of all or any part of the Premises or the Improvements,
now or hereafter entered into by Grantor, together with all charges,
fees, income, issues, profits, receipts, rents, revenues or royalties
payable thereunder ("Rents");
(6) Subject to Section 5.08 of the Credit Agreement, all Grantor's
right, title and interest in and to all real estate tax refunds and all
proceeds of the conversion, voluntary or involuntary, of any of the Trust
Property into cash or liquidated claims ("Proceeds"), including Proceeds
of insurance maintained by the Grantor and condemnation awards, any
awards that may become due by reason of the taking by eminent domain or
any transfer in lieu thereof of the whole or any part of the Premises or
Improvements or any rights appurtenant thereto, and any awards for change
of grade of streets, together with any and all moneys now or hereafter on
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deposit for the payment of real estate taxes, assessments or common area
charges levied against the Trust Property, unearned premiums on policies
of fire and other insurance maintained by the Grantor covering any
interest in the Trust Property or required by the Credit Agreement; and
(7) all Grantor's right, title and interest in and to all
extensions, improvements, betterments, renewals, substitutes and
replacements of and all additions and appurtenances to, the Land, the
Premises, the Improvements, the Personal Property, the Permits, Plans and
Warranties and the Leases, hereinafter acquired by or released to the
Grantor or constructed, assembled or placed by the Grantor on the Land,
the Premises or the Improvements, and all conversions of the security
constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be,
and in each such case, without any further mortgage, deed of trust,
conveyance, assignment or other act by the Grantor, all of which shall
become subject to the lien of this Deed of Trust as fully and completely,
and with the same effect, as though now owned by the Grantor and
specifically described herein.
TO HAVE AND TO HOLD the Trust Property unto the Trustee, its successors
and assigns, for the benefit of Beneficiary (for the ratable benefit of the
Secured Parties), forever, subject only to the Permitted Encumbrances (as
hereinafter defined) and to satisfaction and cancelation as provided in Section
3.04. IN TRUST NEVERTHELESS, upon the terms and trust herein set forth for the
benefit and security of the Beneficiary.
ARTICLE I
Representations, Warranties and Covenants of Grantor
Grantor agrees, covenants, represents and/or warrants as follows:
SECTION 1.01. Title. (a) Grantor is lawfully seized and possessed of, and
has a valid, subsisting leasehold estate in the Land and Improvements subject to
no lien, charge or encumbrance, and this Deed of Trust is and will remain a
valid and enforceable first and prior lien on the Premises, Improvements and the
Rents subject only to, in each case, Liens permitted by Section 6.02 of the
Credit Agreement and the exceptions and encumbrances referred to in Schedule B
to the title insurance policy being issued to insure the lien of this Deed of
Trust (collectively, the "Permitted Encumbrances").
(b) Grantor has good and marketable title to or a leasehold interest in
all the Personal Property subject to no lien, charge or encumbrance other than
this Deed of Trust and the Permitted Encumbrances and as otherwise permitted by
the Credit Agreement. Except as may be permitted under the Credit Agreement, the
Personal Property is not and will not become the subject matter of any lease or
other arrangement that is not a Permitted Encumbrance whereby the ownership of
any Personal Property will be held by any person or entity other than Grantor;
except as permitted under the Credit Agreement, none of the Personal Property
will be removed from the Premises or the Improvements unless the same is no
longer needed for the continued operation of the Premises and the Improvements
as
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currently operated (or as then operated, to the extent that any change from the
current manner of operation was permitted by the Credit Agreement) or is
replaced by other Personal Property of substantially equal or greater utility
and value; and Grantor will not create or cause to be created (other than
Permitted Encumbrances) any security interest covering any of the Personal
Property other than the security interest in the Personal Property created in
favor of Beneficiary by this Deed of Trust or any other agreement collateral
hereto. The Trust Property is served by water, gas, electric, septic storm and
sanitary sewage facilities, and such utilities serving the Premises and the
Improvements are located in and in the future will be located fully within the
Premises. There is vehicular access to the Premises and the Improvements which
is provided by, either a public right-of-way abutting and contiguous with the
Land or valid recorded unsubordinated easements.
(c) Except as set forth on Schedule A hereto, there are no leases
affecting a material portion of the Trust Property. Each Lease is in full force
and effect, and, except as set forth on Schedule A hereto, Grantor has not
given, nor to Grantor's knowledge has it received, any uncured or unwaived
notice of default with respect to any material obligation under any Lease. Each
Lease is subject to no lien, charge or encumbrance other than this Deed of Trust
and the Permitted Encumbrances. Grantor has not received any notice of, nor has
any knowledge of any pending or contemplated condemnation proceeding affecting
the Trust Property or any sale or disposition thereof in lieu of condemnation.
(d) All easement agreements, covenant or restrictive agreements,
supplemental agreements and any other instruments hereinabove referred to and
mortgaged hereby are and will remain valid, subsisting and in full force and
effect, unless the failure to remain valid, subsisting and in full force and
effect, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the Trust Property, and Grantor is not in
default thereunder and has fully performed the material terms thereof required
to be performed through the date hereof, and has no knowledge of any default
thereunder or failure to fully perform the terms thereof by any other party, nor
of the occurrence of any event that after notice or the passage of time or both
will constitute a default thereunder.
(e) Grantor has good and lawful right and full power and authority to
mortgage the Trust Property and will forever warrant and defend its title to the
Trust Property, the rights of Beneficiary therein under this Deed of Trust and
the validity and priority of the lien of this Deed of Trust thereon against the
claims of all persons and parties except those having rights under Permitted
Encumbrances to the extent of those rights.
(f) This Deed of Trust, when duly recorded in the appropriate public
records and when financing statements are duly filed in the appropriate public
records, will create a valid and enforceable lien upon and security interest in
all the Trust Property and there will be no defenses or offsets to this Deed of
Trust that will be asserted by Grantor or its Affiliates (or any third party
defense or offset now known to Grantor or its Affiliates) or to any of the
Obligations secured hereby for so long as any portion of the Obligations is
outstanding, other than payment of the Obligations.
SECTION 1.02. Credit Agreement; Certain Amounts. (a) This Deed of Trust
is given pursuant to the Credit Agreement. Each and every term and provision of
the Credit
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Agreement (excluding the governing law provisions thereof), including the
rights, remedies, obligations, covenants, conditions, agreements, indemnities,
representations and warranties of the parties thereto shall be considered as if
a part of this Deed of Trust and to the extent there is a specific conflict
between the terms hereof and the terms of the Credit Agreement (except with
respect to Section 1.01 hereof), the terms of the Credit Agreement shall
control.
(b) If any remedy or right of Trustee or Beneficiary pursuant hereto is
acted upon by Trustee or Beneficiary or if any actions or proceedings (including
any bankruptcy, insolvency or reorganization proceedings) are commenced in which
Trustee or Beneficiary is made a party and is obliged to defend or uphold or
enforce this Deed of Trust or the rights of Trustee or Beneficiary hereunder or
the terms of any Lease, or if a condemnation proceeding is instituted affecting
the Trust Property, Grantor will pay all reasonable sums, including reasonable
attorneys' fees and disbursements, incurred by Trustee or Beneficiary related to
the exercise of any remedy or right of Trustee or Beneficiary pursuant hereto or
for the reasonable expense of any such action or proceeding together with all
statutory or other costs, disbursements and allowances, interest thereon from
the date of demand for payment thereof at the rate specified in clause (b) of
Section 2.07 of the Credit Agreement (the "Default Interest Rate"), and such
sums and the interest thereon shall, to the extent permissible by law, be a lien
on the Trust Property prior to any right, title to, interest in or claim upon
the Trust Property attaching or accruing subsequent to the recording of this
Deed of Trust and shall be secured by this Deed of Trust to the extent permitted
by law. Any payment of amounts due to Trustee or Beneficiary under this Deed of
Trust not made on or before the due date for such payments shall accrue interest
daily without notice from the due date until paid at the Default Interest Rate,
and such interest at the Default Interest Rate shall be immediately due upon
demand by Trustee or Beneficiary.
SECTION 1.03. Payment of Taxes, Liens and Charges. (a) Except as may be
permitted by Section 5.03 of the Credit Agreement, Grantor will pay and
discharge from time to time prior to the time when the same shall become
delinquent, and before any interest or penalty accrues thereon or attaches
thereto, all taxes of every kind and nature, all general and special
assessments, levies, permits, inspection and license fees, all water and sewer
rents, all vault charges, and all other public charges, and all service charges,
common area charges, private maintenance charges, utility charges and all other
private charges, whether of a like or different nature, imposed upon or assessed
against the Trust Property or any part thereof or upon the Rents from the Trust
Property or arising in respect of the occupancy, use or possession thereof.
(b) At any time that an Event of Default shall occur hereunder and be
continuing, or if required by any law applicable to Grantor or to Beneficiary,
Beneficiary shall have the right to direct Grantor to make an initial deposit on
account of real estate taxes and assessments, insurance premiums and common area
charges, levied against or payable in respect of the Trust Property in advance
and thereafter semi-annually, each such deposit to be equal to one-half of any
such annual charges estimated in a reasonable manner by Beneficiary in order to
accumulate with Beneficiary sufficient funds to pay such taxes, assessments,
insurance premiums and charges.
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SECTION 1.04. Payment of Closing Costs. Grantor shall pay all costs in
connection with, relating to or arising out of the preparation, execution and
recording of this Deed of Trust, including title company premiums and charges,
inspection costs, survey costs, recording fees and taxes which are due,
reasonable attorneys', engineers', appraisers' and consultants' fees and
disbursements and all other similar reasonable expenses of every kind.
SECTION 1.05. Alterations and Waste; Plans. (a) Except as may be
permitted under the Credit Agreement, no Improvements will be materially altered
or demolished or removed in whole or in part by Grantor. Grantor will not erect
any additions to the existing Improvements or other structures on the Premises
which will materially interfere with the operation conducted thereon on the date
hereof, without the written consent of Beneficiary. Grantor will not commit any
waste on the Trust Property or make any alteration to, or change in the use of,
the Trust Property that will diminish the utility thereof for the operation of
the business except as may be permitted under the Credit Agreement or materially
in crease any ordinary fire or other hazard arising out of construction or
operation, but in no event shall any such alteration or change be contrary to
the terms of any insurance policy required to be kept pursuant to Section 1.06.
In accordance with the Credit Agreement, Grantor will maintain and operate the
Improvements and Personal Property in good repair, working order and condition,
reasonable wear and tear excepted.
(b) To the extent the same exist on the date hereof or are obtained in
connection with future permitted alterations, Grantor shall maintain a complete
set of final plans, specifications, blueprints and drawings for the Trust
Property either at the Trust Property or in a particular office at the
headquarters of Grantor to which Beneficiary shall have access upon reasonable
advance notice and at reasonable times.
SECTION 1.06. Insurance. Grantor will keep or cause to be kept the
Improvements and Personal Property insured against such risks, and in the
manner, required by Section 5.02 of the Credit Agreement.
SECTION 1.07. Casualty; Restoration of Casualty Damage. The Grantor
shall, in accordance with Section 5.12 of the Credit Agreement, give Beneficiary
prompt written notice of any Casualty to the Trust Property. Subject to the
limitations and provisions of Section 5.12 of the Credit Agreement, payment of
any loss will be made directly in its entirety to Beneficiary and any such
proceeds relating to a Casualty shall be held or applied by Beneficiary in
accordance with Section 5.12 of the Credit Agreement.
SECTION 1.08. Condemnation/Eminent Domain. The Grantor shall, in
accordance with Section 5.12 of the Credit Agreement, notify the Beneficiary
promptly upon obtaining knowledge of any pending or threatened Condemnation of
the Trust Property. All Condemnation Proceeds shall be held and applied by
Beneficiary in accordance with Section 5.12 of the Credit Agreement.
SECTION 1.09. Assignment of Leases and Rents. (a) Grantor hereby
irrevocably and absolutely grants, transfers and assigns to the Trustee for the
benefit of Beneficiary (for the ratable benefit of the Secured Parties), all of
its right title and interest in all Leases, together with any and all extensions
and renewals thereof for purposes of securing and discharging the
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performance by Grantor of the Obligations. Grantor has not assigned or executed
any assignment of, and will not assign or execute any assignment of, any other
Lease or their respective Rents to anyone other than Trustee for the benefit of
Beneficiary (for the ratable benefit of the Secured Parties).
(b) Without Beneficiary's prior written consent, Grantor will not (i)
modify, amend, terminate or consent to the cancelation or surrender of any Lease
if such modification, amendment, termination or consent would, in the reasonable
judgment of the Beneficiary, be adverse in any material respect to the interests
of the Lenders, the value of the Trust Property or the lien created by this Deed
of Trust or (ii) consent to an assignment of any tenant's interest in any Lease
or to a subletting thereof covering a material portion of the Trust Property.
(c) Subject to Section 1.09(d), Grantor has assigned and transferred to
Trustee for the benefit of Beneficiary (for the ratable benefit of the Secured
Parties) all of Grantor's right, title and interest in and to the Rents now or
hereafter arising from each Lease heretofore or hereafter made or agreed to by
Grantor, it being intended that this assignment establish, subject to Section
1.09(d), an absolute transfer and assignment of all Rents and all Leases to
Beneficiary and not merely to grant a security interest therein. Subject to
Section 1.09(d), Beneficiary may in Grantor's name and stead (with or without
first taking possession of any of the Trust Property personally or by receiver
as provided herein) operate the Trust Property and rent, lease or let all or any
portion of any of the Trust Property to any party or parties at such rental and
upon such terms as Beneficiary shall, in its sole discretion, determine, and may
collect and have the benefit of all of said Rents arising from or accruing at
any time thereafter or that may thereafter become due under any Lease.
(d) So long as an Event of Default shall not have occurred and be
continuing, Beneficiary will not exercise any of its rights under Section
1.09(c), and Grantor shall receive and collect the Rents accruing under any
Lease; but after the happening and during the continuance of any Event of
Default, Beneficiary may, at its option, receive and collect all Rents and enter
upon the Premises and Improvements through its officers, agents, employees or
attorneys for such purpose and for the operation and maintenance thereof.
Grantor hereby irrevocably authorizes and directs each tenant, if any, and each
successor, if any, to the interest of any tenant under any Lease, respectively,
to rely upon any notice of a claimed Event of Default sent by Beneficiary to any
such tenant or any of such tenant's successors in interest, and thereafter to
pay Rents to Beneficiary without any obligation or right to inquire as to
whether an Event of Default actually exists and even if some notice to the
contrary is received from the Grantor, who shall have no right or claim against
any such tenant or successor in interest for any such Rents so paid to
Beneficiary. Each tenant or any of such tenant's successors in interest from
whom Beneficiary or any officer, agent, attorney or employee of Beneficiary
shall have collected any Rents, shall be authorized to pay Rents to Grantor only
after such tenant or any of their successors in interest shall have received
written notice from Beneficiary that the Event of Default is no longer
continuing, unless and until a further notice of an Event of Default is given by
Beneficiary to such tenant or any of its successors in interest.
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(e) Beneficiary will not become a mortgagee in possession so long as it
does not enter or take actual possession of the Trust Property. In addition,
Beneficiary shall not be responsible or liable for performing any of the
obligations of the landlord under any Lease, for any waste by any tenant, or
others, for any dangerous or defective conditions of any of the Trust Property,
for negligence in the management, upkeep, repair or control of any of the Trust
Property or any other act or omission by any other person.
(f) Grantor shall furnish to Beneficiary, within 30 days after a request
by Beneficiary to do so, a written statement containing the names of all
tenants, subtenants and concessionaires of the Premises or Improvements, the
terms of any Lease, the space occupied and the rentals or license fees payable
thereunder.
SECTION 1.10. Restrictions on Transfers and Encumbrances. Except as
permitted by the Credit Agreement, Grantor shall not directly or indirectly
sell, convey, alienate, assign, lease, sublease, license, mortgage, pledge,
encumber or otherwise transfer, create, consent to or suffer the creation of any
lien, charges or any form of encumbrance upon any interest in or any part of the
Trust Property, or be divested of its title to the Trust Property or any
interest therein in any manner or way, whether voluntarily or involuntarily
(other than resulting from a Condemnation), or engage in any common,
cooperative, joint, time-sharing or other congregate ownership of all or part
thereof; provided, however, that Grantor may in the ordinary course of business
within reasonable commercial standards, enter into easement or covenant
agreements that relate to and/or benefit the operation of the Trust Property and
that do not materially or adversely affect the use and operation of the same
(except for customary utility easements that service the Trust Property, which
are permitted).
SECTION 1.11. Security Agreement. This Deed of Trust is both a mortgage
of real property and a grant of a security interest in personal property, and
shall constitute and serve as a "Security Agreement" within the meaning of the
uniform commercial code as adopted in the state wherein the Premises are located
("UCC"). Grantor has hereby granted unto Beneficiary a security interest in and
to all the Trust Property described in this Deed of Trust that is not real
property, and simultaneously with the recording of this Deed of Trust, Grantor
has filed or will file UCC financing statements, and will file continuation
statements prior to the lapse thereof, at the appropriate offices in the state
in which the Premises are located to perfect the security interest granted by
this Deed of Trust in all the Trust Property that is not real property. Grantor
hereby appoints Beneficiary as its true and lawful attorney-in-fact and agent,
for Grantor and in its name, place and stead, in any and all capacities, to
execute any document and to file the same in the appropriate offices (to the
extent it may lawfully do so), and to perform each and every act and thing
reasonably requisite and necessary to be done to perfect the security interest
contemplated by the preceding sentence. Beneficiary shall have all rights with
respect to the part of the Trust Property that is the subject of a security
interest afforded by the UCC in addition to, but not in limitation of, the other
rights afforded Beneficiary hereunder and under the Security Agreement.
SECTION 1.12. Filing and Recording. Grantor will cause this Deed of
Trust, any other security instrument creating a security interest in or
evidencing the lien hereof upon the Trust Property and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to
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publish notice of and fully to protect the lien hereof upon, and the security
interest of Beneficiary in, the Trust Property. Grantor will pay all filing,
registration or recording fees, and all reasonable expenses incidental to the
execution and acknowledgment of this Deed of Trust, any mortgage supplemental
hereto, any security instrument with respect to the Personal Property, and any
instrument of further assurance and all Federal, state, county and municipal
recording, documentary or intangible taxes and other taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution,
delivery and recording of this Deed of Trust, any mortgage supplemental hereto,
any security instrument with respect to the Personal Property or any instrument
of further assurance.
SECTION 1.13. Further Assurances. Upon demand by Beneficiary, Grantor
will, at the cost of Grantor and without expense to Trustee or Beneficiary, do,
execute, acknowledge and deliver all such further acts, deeds, conveyances,
mortgages, assignments, notices of assignment, transfers and assurances as
Beneficiary shall from time to time reasonably require for the better assuring,
conveying, assigning, transferring and confirming unto Beneficiary the property
and rights hereby conveyed or assigned or intended now or hereafter so to be, or
which Grantor may be or may hereafter become bound to convey or assign to
Beneficiary, or for carrying out the intention or facilitating the performance
of the terms of this Deed of Trust, or for filing, registering or recording this
Deed of Trust, and on demand, Grantor will also execute and deliver and hereby
appoints Beneficiary as its true and lawful attorney-in-fact and agent, for
Grantor and in its name, place and stead, in any and all capacities, to execute
and file to the extent it may lawfully do so, one or more financing statements,
chattel mortgages or comparable security instruments reasonably requested by
Beneficiary to evidence more effectively the lien hereof upon the Personal
Property and to perform each and every act and thing requisite and necessary to
be done to accomplish the same.
SECTION 1.14. Additions to Trust Property. All right, title and interest
of Grantor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Trust Property hereafter acquired by or released to Grantor or constructed,
assembled or placed by Grantor upon the Premises or the Improvements, and all
conversions of the security constituted thereby, immediately upon such
acquisition, release, construction, assembling, placement or conversion, as the
case may be, and in each such case without any further mortgage, conveyance,
assignment or other act by Grantor, shall become subject to the lien and
security interest of this Deed of Trust as fully and completely and with the
same effect as though now owned by Grantor and specif ically described in the
grant of the Trust Property above, but at any and all times Grantor will execute
and deliver to Beneficiary any and all such further assurances, mortgages,
conveyances or assignments thereof as Beneficiary may reasonably require for the
purpose of expressly and specifically subjecting the same to the lien and
security interest of this Deed of Trust.
SECTION 1.15. No Claims Against Trustee or Beneficiary. Nothing contained
in this Deed of Trust shall constitute any consent or request by Trustee or
Beneficiary, express or implied, for the performance of any labor or services or
the furnishing of any materials or other property in respect of the Trust
Property or any part thereof, nor as giving Grantor any right, power or
authority to contract for or permit the performance of any labor or services or
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the furnishing of any materials or other property in such fashion as would
permit the making of any claim against Trustee or Beneficiary in respect
thereof.
SECTION 1.16. Fixture Filing. Certain of the Trust Property is or will
become "fixtures" (as that term is defined in the UCC) on the Land, and this
Deed of Trust upon being filed for record in the real estate records of the
county wherein such fixtures are situated shall operate also as a financing
statement filed as a fixture filing in accordance with the applicable provisions
of said UCC upon such of the Trust Property that is or may become fixtures.
ARTICLE II
Defaults and Remedies
SECTION 2.01. Events of Default. It shall be an Event of Default under
this Deed of Trust if any Event of Default (as therein defined) shall exist
pursuant to the Credit Agreement.
SECTION 2.02. Demand for Payment. If an Event of Default shall occur and
be continuing, then, upon written demand of Beneficiary, Grantor will pay to
Beneficiary all amounts due hereunder and such further amount as shall be
sufficient to cover the costs and expenses of collection, including attorneys'
fees, disbursements and expenses incurred by Trustee or Beneficiary and Trustee
or Beneficiary shall be entitled and empowered to institute an action or
proceedings at law or in equity for the collection of the sums so due and
unpaid, to prosecute any such action or proceedings to judgment or final decree,
to enforce any such judgment or final decree against Grantor and to collect, in
any manner provided by law, all moneys adjudged or decreed to be payable.
SECTION 2.03. Rights To Take Possession, Operate and Apply Revenues. (a)
If an Event of Default shall occur and be continuing, Grantor shall, upon demand
of Beneficiary, forthwith surrender to Beneficiary actual possession of the
Trust Property and, if and to the extent permitted by law, Beneficiary itself,
or by such officers or agents as it may appoint, may then enter and take
possession of all the Trust Property without the appointment of a receiver or an
application therefor, exclude Grantor and its agents and employees wholly
therefrom, and have access to the books, papers and accounts of Grantor.
(b) If Grantor shall for any reason fail to surrender or deliver the
Trust Property or any part thereof after such demand by Beneficiary, Beneficiary
may obtain a judgment or decree conferring upon Beneficiary the right to
immediate possession or requiring Grantor to deliver immediate possession of the
Trust Property to Beneficiary, to the entry of which judgment or decree Grantor
hereby specifically consents. Grantor will pay to Beneficiary, upon demand, all
reasonable expenses of obtaining such judgment or decree, including reasonable
compensation to Beneficiary's attorneys and agents with interest thereon at the
Default Interest Rate; and all such expenses and compensation shall, until paid,
be secured by this Deed of Trust.
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(c) Upon every such entry or taking of possession, Beneficiary may hold,
store, use, operate, manage and control the Trust Property, conduct the business
thereof and, from time to time, (i) make all necessary and proper maintenance,
repairs, renewals, replacements, additions, betterments and improvements thereto
and thereon, (ii) purchase or otherwise acquire additional fixtures, personalty
and other property, (iii) insure or keep the Trust Property insured, (iv) manage
and operate the Trust Property and exercise all the rights and powers of Grantor
to the same extent as Grantor could in its own name or otherwise with respect to
the same, or (v) enter into any and all agreements with respect to the exercise
by others of any of the powers herein granted Beneficiary, all as may from time
to time be directed or determined by Beneficiary to be in its best interest and
Grantor hereby appoints Beneficiary as its true and lawful attorney-in-fact and
agent, for Grantor and in its name, place and stead, in any and all capacities,
to perform any of the foregoing acts. Beneficiary may collect and receive all
the Rents, issues, profits and revenues from the Trust Property, including those
past due as well as those accruing thereafter, and, after deducting (i) all
expenses of taking, holding, managing and operating the Trust Property
(including compensation for the services of all persons employed for such
purposes), (ii) the costs of all such maintenance, repairs, renewals,
replacements, additions, betterments, improvements, purchases and acquisitions,
(iii) the costs of insurance, (iv) such taxes, assessments and other similar
charges as Beneficiary may at its option pay, (v) other proper charges upon the
Trust Property or any part thereof and (vi) the compensation, expenses and
disbursements of the attorneys and agents of Beneficiary, Beneficiary shall
apply the remainder of the moneys and proceeds so received first to the payment
of the Beneficiary for the satisfaction of the Obligations, and second, if there
is any surplus, to Grantor, subject to the entitlement of others thereto under
applicable law.
(d) Whenever, before any sale of the Trust Property under Section 2.06,
all Obligations that are then due shall have been paid and all Events of Default
fully cured, Beneficiary will surrender possession of the Trust Property back to
Grantor, its successors or assigns. The same right of taking possession shall,
however, arise again if any subsequent Event of Default shall occur and be
continuing.
SECTION 2.04. Right To Cure Grantor's Failure to Perform. If an Event of
Default has occurred and is continuing, should Grantor fail in the payment,
performance or observance of any term, covenant or condition required by this
Deed of Trust or the Credit Agreement (with respect to the Trust Property),
Beneficiary may pay, perform or observe the same, and all payments made or costs
or expenses incurred by Beneficiary in connection therewith shall be secured
hereby and shall be, without demand, immediately repaid by Grantor to
Beneficiary with interest thereon at the Default Interest Rate. Beneficiary
shall be the judge using reasonable discretion of the necessity for any such
actions and of the amounts to be paid. Beneficiary is hereby empowered to enter
and to authorize others to enter upon the Premises or the Improvements or any
part thereof for the purpose of performing or observing any such defaulted term,
covenant or condition without having any obligation to so perform or observe and
without thereby becoming liable to Grantor, to any person in possession holding
under Grantor or to any other person.
SECTION 2.05. Right to a Receiver. If an Event of Default shall occur and
be continuing, Beneficiary, upon application to a court of competent
jurisdiction, shall be
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entitled as a matter of right to the appointment of a receiver to take
possession of and to operate the Trust Property and to collect and apply the
Rents. The receiver shall have all of the rights and powers permitted under the
laws of the state wherein the Trust Property is located. Grantor shall pay to
Beneficiary upon demand all reasonable expenses, including receiver's fees,
reasonable attorney's fees and disbursements, costs and agent's compensation
incurred pursuant to the provisions of this Section 2.05; and all such expenses
shall be secured by this Deed of Trust and shall be, without demand, immediately
repaid by Grantor to Beneficiary with interest thereon at the Default Interest
Rate.
SECTION 2.06. Foreclosure and Sale. (a) If an Event of Default shall
occur and be continuing, Beneficiary may elect to sell or to cause and direct
the Trustee to sell the Trust Property or any part of the Trust Property by
exercise of the power of foreclosure or of sale granted to Trustee and/or
Beneficiary by applicable law or this Deed of Trust. In such case, Trustee or
Beneficiary may commence a civil action to foreclose this Deed of Trust, or
Trustee may proceed and sell the Trust Property to satisfy any Obligation.
Trustee or Beneficiary or an officer appointed by a judgment of foreclosure to
sell the Trust Property, may sell all or such parts of the Trust Property as may
be chosen by Trustee or Beneficiary at the time and place of sale fixed by it in
a notice of sale, either as a whole or in separate lots, parcels or items as
Trustee or Beneficiary shall deem expedient, and in such order as it may
determine, at public auction to the highest bidder. Trustee or Beneficiary or an
officer appointed by a judgment of foreclosure to sell the Trust Property may
postpone any fore closure or other sale of all or any portion of the Trust
Property by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement or subsequently
noticed sale. Without further notice, Trustee or Beneficiary or an officer
appointed to sell the Trust Property may make such sale at the time fixed by the
last postponement, or may, in its discretion, give a new notice of sale. Any
person, including Grantor or Beneficiary or any designee or affiliate thereof,
may purchase at such sale.
(b) The Trust Property may be sold subject to unpaid taxes and Permitted
Encumbrances, and, after deducting all costs, fees and expenses of Trustee and
Beneficiary (including costs of evidence of title in connection with the sale),
Trustee or Beneficiary or an officer that makes any sale shall apply the
proceeds of sale in the manner set forth in Section 2.08.
(c) Any foreclosure or other sale of less than the whole of the Trust
Property or any defective or irregular sale made hereunder shall not exhaust the
power of foreclosure provided for herein; and subsequent sales may be made
hereunder until the Obligations have been satisfied, or the entirety of the
Trust Property has been sold.
(d) If an Event of Default shall occur and be continuing, Trustee or
Beneficiary may instead of, or in addition to, exercising the rights described
in Section 2.06(a) above and either with or without entry or taking possession
as herein permitted, proceed by a suit or suits in law or in equity or by any
other appropriate proceeding or remedy (i) to specifically enforce payment of
some or all of the Obligations, or the performance of any term, covenant,
condition or agreement of this Deed of Trust or any other Loan Document or any
other right,
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or (ii) to pursue any other remedy available to Trustee or Beneficiary, all as
Trustee or Beneficiary shall determine most effectual for such purposes.
SECTION 2.07. Other Remedies. (a) In case an Event of Default shall occur
and be continuing, Beneficiary may also exercise, to the extent not prohibited
by law, any or all of the remedies available to a secured party under the UCC.
(b) In connection with a sale of the Trust Property or any Personal
Property and the application of the proceeds of sale as provided in Section
2.08, Beneficiary shall be entitled to enforce payment of and to receive up to
the principal amount of the Obligations, plus all other charges, payments and
costs due under this Deed of Trust, and to recover a deficiency judgment for any
portion of the aggregate principal amount of the Obligations remaining unpaid,
with interest.
SECTION 2.08. Application of Sale Proceeds and Rents. After any
foreclosure sale of all or any of the Trust Property, Trustee or Beneficiary
shall receive the proceeds of sale, no purchaser shall be required to see to the
application of the proceeds and Trustee or Beneficiary shall apply the proceeds
of the sale together with any Rents that may have been collected and any other
sums that then may be held by Trustee or Beneficiary under this Deed of Trust as
follows:
FIRST, to the payment of the costs and expenses of such sale,
including compensation to Trustee or Beneficiary's attorneys and agents,
and of any judicial proceedings wherein the same may be made, and of all
expenses, liabilities and advances made or incurred by Beneficiary under
this Deed of Trust, together with interest at the Default Interest Rate
on all advances made by Beneficiary, including all taxes or assessments
(except any taxes, assessments or other charges subject to which the
Trust Property shall have been sold) and the cost of removing any
Permitted Encumbrance (except any Permitted Encumbrance subject to which
the Trust Property was sold);
SECOND, to the Beneficiary for the distribution to the Secured
Parties for the satisfaction of the Obligations owed to the Secured
Parties; and
THIRD, to the Grantor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Beneficiary shall have absolute discretion as to the time of application of
any such proceeds, moneys or balances in accordance with this Deed of Trust.
Upon any sale of the Trust Property by the Trustee or Beneficiary (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Trustee or Beneficiary or of the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Trust
Property so sold and such purchaser or purchasers shall not be obligated to see
to the application of any part of the purchase money paid over to the Trustee
or Beneficiary or such officer or be answerable in any way for the
misapplication thereof.
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SECTION 2.09. Grantor as Tenant Holding Over. If Grantor remains in
possession of any of the Trust Property after any foreclosure sale by Trustee or
Beneficiary, at Beneficiary's election Grantor shall be deemed a tenant holding
over and shall forthwith surrender possession to the purchaser or purchasers at
such sale or be summarily dispossessed or evicted according to provisions of law
applicable to tenants holding over.
SECTION 2.10. Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws. Grantor waives, to the extent not prohibited by law, (i) the
benefit of all laws now existing or that hereafter may be enacted providing for
any appraisement of any portion of the Trust Property, (ii) the benefit of all
laws now existing or that may be hereafter enacted in any way extending the time
for the enforcement or the collection of amounts due under any of the
Obligations or creating or extending a period of redemption from any sale made
in collecting said debt or any other amounts due Beneficiary, (iii) any right to
at any time insist upon, plead, claim or take the benefit or advantage of any
law now or hereafter in force providing for any appraisement, homestead
exemption valuation, stay, statute of limitations extension or redemption, or
sale of the Trust Property as separate tracts, units or estates or as a single
parcel in the event of foreclosure or notice of deficiency, and (iv) all rights
of redemption, valuation, appraisement, stay of execution, notice of election to
mature or declare due the whole of or each of the Obligations and marshaling in
the event of foreclosure of this Deed of Trust.
SECTION 2.11. Discontinuance of Proceedings. In case Trustee or
Beneficiary shall proceed to enforce any right, power or remedy under this Deed
of Trust by foreclosure, entry or otherwise, and such proceedings shall be
discontinued or abandoned for any reason, or shall be determined adversely to
Trustee or Beneficiary, then and in every such case Grantor, Trustee and
Beneficiary shall be restored to their former positions and rights hereunder,
and all rights, powers and remedies of Trustee or Beneficiary shall continue as
if no such proceeding had been taken.
SECTION 2.12. Suits To Protect the Trust Property. Trustee and/or
Beneficiary shall have power (a) to institute and maintain suits and proceedings
to prevent any impairment of the Trust Property by any acts that may be unlawful
or in violation of this Deed of Trust, (b) to preserve or protect its interest
in the Trust Property and in the Rents arising therefrom and (c) to restrain the
enforcement of or compliance with any legislation or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of or compliance with such enactment, rule or order would impair
the security or be prejudicial to the interest of Trustee or Beneficiary
hereunder.
SECTION 2.13. Filing Proofs of Claim. In case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting Grantor, Beneficiary shall, to the extent permitted
by law, be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of Beneficiary allowed in
such proceedings for the Obligations secured by this Deed of Trust at the date
of the institution of such proceedings and for any interest accrued, late
charges and additional interest or other amounts due or that may become due and
payable hereunder after such date.
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SECTION 2.14. Possession by Beneficiary. Notwithstanding the appointment
of any receiver, liquidator or trustee of Grantor, any of its property or the
Trust Property, Beneficiary shall be entitled, to the extent not prohibited by
law, to remain in possession and control of all parts of the Trust Property now
or hereafter granted under this Deed of Trust to Beneficiary in accordance with
the terms hereof and applicable law.
SECTION 2.15. Waiver. (a) No delay or failure by Trustee or Beneficiary
to exercise any right, power or remedy accruing upon any breach or Event of
Default shall exhaust or impair any such right, power or remedy or be construed
to be a waiver of any such breach or Event of Default or acquiescence therein;
and every right, power and remedy given by this Deed of Trust to Trustee or
Beneficiary may be exercised from time to time and as often as may be deemed
expedient by Trustee or Beneficiary. No consent or waiver by Beneficiary to or
of any breach or default by Grantor in the performance of the Obligations shall
be deemed or construed to be a consent or waiver to or of any other breach or
Event of Default in the performance of the same or any other Obligations by
Grantor hereunder. No failure on the part of Beneficiary to complain of any act
or failure to act or to declare an Event of Default, irrespective of how long
such failure continues, shall constitute a waiver by Beneficiary of its rights
hereunder or impair any rights, powers or remedies consequent on any future
Event of Default by Grantor.
(b) Even if Beneficiary (i) grants some forbearance or an extension of
time for the payment of any sums secured hereby, (ii) takes other or additional
security for the payment of any sums secured hereby, (iii) waives or does not
exercise some right granted herein or under the Loan Documents, (iv) releases a
part of the Trust Property from this Deed of Trust, (v) agrees to change some of
the terms, covenants, conditions or agreements of any of the Loan Documents,
(vi) consents to the filing of a map, plat or replat affecting the Premises
(vii) consents to the granting of an easement or other right affecting the
Premises or (viii) makes or consents to an agreement subordinating Beneficiary's
lien on the Trust Property hereunder; no such act or omission shall preclude
Beneficiary from exercising any other right, power or privilege herein granted
or intended to be granted in the event of any breach or Event of Default then
made or of any subsequent default; nor, except as otherwise expressly provided
in an instrument executed by Trustee and Beneficiary, shall this Deed of Trust
be altered thereby. In the event of the sale or transfer by operation of law or
otherwise of all or part of the Trust Property, Beneficiary is hereby authorized
and empowered to deal with any vendee or transferee with reference to the Trust
Property secured hereby, or with reference to any of the terms, covenants,
conditions or agreements hereof, as fully and to the same extent as it might
deal with the original parties hereto and without in any way releasing or
discharging any liabilities, obligations or undertakings.
SECTION 2.16. Remedies Cumulative. No right, power or remedy conferred
upon or reserved to Trustee or Beneficiary by this Deed of Trust is intended to
be exclusive of any other right, power or remedy, and each and every such
right, power and remedy shall be cumulative and concurrent and in addition to
any other right, power and remedy given hereunder or now or hereafter existing
at law or in equity or by statute.
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ARTICLE III
Miscellaneous
SECTION 3.01. Partial Invalidity. In the event any one or more of the
provisions contained in this Deed of Trust shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such validity, illegality or
unenforceability shall, at the option of Beneficiary, not affect any other
provision of this Deed of Trust, and this Deed of Trust shall be construed as if
such invalid, illegal or unenforceable provision had never been contained herein
or therein.
SECTION 3.02. Notices. All communications and notices hereunder shall be
in writing and given to Trustee in accordance with the terms of the Credit
Agreement at the address set forth on the first page of this Deed of Trust and
to Grantor or the Collateral Agent, as provided in the Credit Agreement.
SECTION 3.03. Successors and Assigns. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the permitted
successors and assigns of Grantor and the successors and assigns of Beneficiary.
SECTION 3.04. Satisfaction and Cancelation. (a) The conveyance to Trustee
of the Trust Property for the benefit of Beneficiary (for the ratable benefit of
the Secured Parties) created and consummated by this Deed of Trust shall be null
and void when all the Obligations have been indefeasibly paid in full in
accordance with the terms of the Loan Documents and the Lenders have no further
commitment to make Loans under the Credit Agreement, no Letters of Credit are
outstanding and the Issuing Bank has no further obligation to issue Letters of
Credit under the Credit Agreement.
(b) The lien of this mortgage shall be released from such portion of the
Trust Property as is required pursuant to and in accordance with the operative
provisions of Section 6.05 of the Credit Agreement.
(c) In connection with any termination or release pursuant to paragraph
(a), the Deed of Trust shall be marked "satisfied" by the Beneficiary and/or
Trustee, and this Deed of Trust shall be canceled of record at the request and
at the expense of the Grantor. Beneficiary and Trustee shall execute any
documents reasonably requested by Grantor to accomplish the foregoing or to
accomplish any release contemplated by paragraph (a) and Grantor will pay all
costs and expenses, including reasonable attorneys' fees, disbursements and
other charges, incurred by Beneficiary and Trustee in connection with the
preparation and execution of such documents.
SECTION 3.05. Definitions. As used in this Deed of Trust, the singular
shall include the plural as the context requires and the following words and
phrases shall have the following meanings: (a) "including" shall mean "including
but not limited to"; (b) "provisions" shall mean "provisions, terms, covenants
and/or conditions"; (c) "lien" shall mean "lien, charge, encumbrance, security
interest, mortgage or deed of trust";
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(d) "obligation" shall mean "obligation, duty, covenant and/or condition"; and
(e) "any of the Trust Property" shall mean "the Trust Property or any part
thereof or interest therein". Any act that Trustee or Beneficiary is permitted
to perform hereunder may be performed at any time and from time to time by
Trustee Beneficiary or any person or entity designated by Trustee or
Beneficiary. Any act that is prohibited to Grantor hereunder is also prohibited
to all lessees of any of the Trust Property. Each appointment of Trustee or
Beneficiary as attorney-in-fact for Grantor under the Deed of Trust is
irrevocable, with power of substitution and coupled with an interest. Subject to
the applicable provisions hereof, Beneficiary has the right to refuse to grant
its consent, approval or acceptance or to indicate its satisfaction, in its sole
discretion, whenever such consent, approval, acceptance or satisfaction is
required hereunder.
SECTION 3.06. Multisite Real Estate Transaction. Grantor acknowledges
that this Deed of Trust is one of a number of Security Documents that secure the
Obligations. Grantor agrees that the lien of this Deed of Trust shall be
absolute and unconditional and shall not in any manner be affected or impaired
by any acts or omissions whatsoever of Trustee or Beneficiary and without
limiting the generality of the foregoing, the lien hereof shall not be impaired
by any acceptance by the Trustee or Beneficiary of any security for or
guarantees of any of the Obligations hereby secured, or by any failure, neglect
or omission on the part of Trustee or Beneficiary to realize upon or protect any
Obligation or indebtedness hereby secured or any collateral security therefor
including other Security Documents, except as otherwise provided by the laws of
the State of California. The lien hereof shall not in any manner be impaired or
affected by any release (except as to the property released), sale, pledge,
surrender, compromise, settlement, renewal, extension, indulgence, alteration,
changing, modification or disposition of any of the Obligations secured or of
any of the collateral security therefor, including other Security Documents or
of any guarantee thereof, and Trustee or Beneficiary may at its discretion
foreclose, exercise any power of sale, or exercise any other remedy available to
it under any or all of the other Security Documents without first exercising or
enforcing any of its rights and remedies hereunder. Such exercise of Trustee's
or Beneficiary's rights and remedies under any or all of the other Security
Documents shall not in any manner impair the indebtedness hereby secured or the
lien of this Deed of Trust and any exercise of the rights or remedies of Trustee
or Beneficiary hereunder shall not impair the lien of any other Security
Documents or any of Trustee's or Beneficiary's rights and remedies thereunder.
The Grantor specifically consents and agrees that Beneficiary may exercise its
rights and remedies hereunder and under the other Security Documents separately
or concurrently and in any order that it may deem appropriate and waives any
rights of subrogation.
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ARTICLE IV
Particular Provisions
This Deed of Trust is subject to the following provisions relating to the
particular laws of the state wherein the Premises are located:
SECTION 4.01. Applicable Law; Certain Particular Provisions. This Deed of
Trust shall be governed by and construed in accordance with the internal law of
the State of New York; provided, however, that the provisions of this Deed of
Trust relating to the creation, perfection and enforcement of the lien and
security interest created by this Deed of Trust in respect of the Trust Property
and the exercise of each remedy provided hereby, including the power of
foreclosure or power of sale procedures set forth in this Deed of Trust, shall
be governed by and construed in accordance with the internal law of the state
where the Trust Property is located, and Grantor and Beneficiary agrees to
submit to jurisdiction and the laying of venue for any suit on this Deed of
Trust in such state. The terms and provisions set forth in Appendix A attached
hereto are hereby incorporated by reference as though fully set forth herein. In
the event of any conflict between the terms and provisions contained in the body
of this Deed of Trust and the terms and provisions set forth in Appendix A, the
terms and provisions set forth in Appendix A shall govern and control.
SECTION 4.02. Trustee's Powers and Liabilities. (a) Trustee, by
acceptance hereof, covenants faithfully to perform and fulfill the trusts herein
created, being liable, however, only for gross negligence, bad faith or wilful
misconduct, and hereby waives any statutory fee and agrees to accept reasonable
compensation, in lieu thereof, for any services rendered by it in accordance
with the terms hereof. All authorities, powers and discretions given in this
Deed of Trust to Trustee and/or Beneficiary may be exercised by either, without
the other, with the same effect as if exercised jointly.
(b) Trustee may resign at any time upon giving 30 days' notice in writing
to Grantor and to Beneficiary.
(c) Beneficiary may remove Trustee at any time or from time to time and
select a successor trustee. In the event of the death, removal, resignation,
refusal to act, inability to act or absence of Trustee from the state in which
the premises are located, or in its sole discretion for any reason whatsoever,
Beneficiary may, upon notice to the Grantor and without specifying the reason
therefor and without applying to any court, select and appoint a successor
trustee, and all powers, rights, duties and authority of the former Trustee, as
aforesaid, shall thereupon become vested in such successor. Such substitute
trustee shall not be required to give bond for the faithful performance of his
duties unless required by Beneficiary. Such substitute trustee shall be
appointed by written instrument duly recorded in the county where the Land is
located. Grantor hereby ratifies and confirms any and all acts that the herein
named Trustee, or his successor or successors in this trust, shall do lawfully
by virtue hereof. Grantor hereby agrees, on behalf of itself and its heirs,
executors, administrators and assigns, that the recitals contained in any deed
or deeds executed in due form by any Trustee or substitute trustee, acting under
the provisions of this instrument, shall be prima facie evidence of the facts
recited, and that it shall not be necessary to prove in any
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court, otherwise than by such recitals, the existence of the facts essential to
authorize the execution and delivery of such deed or deeds and the passing of
title thereby.
(d) Trustee shall not be required to see that this Deed of Trust is
recorded, nor liable for its validity or its priority as a first deed of trust,
or otherwise, nor shall Trustee be answerable or responsible for performance or
observance of the covenants and agreements imposed upon Grantor or Beneficiary
by this Deed of Trust or any other agreement. Trustee, as well as Beneficiary,
shall have authority in their respective discretion to employ agents and
attorneys in the execution of this trust and to protect the interest of the
Beneficiary hereunder, and to the extent permitted by law they shall be
compensated and all expenses relating to the employment of such agents and/or
attorneys, including expenses of litigations, shall be paid out of the proceeds
of the sale of the Trust Property conveyed hereby should a sale be had, but if
no such sale be had, all sums so paid out shall be recoverable to the extent
permitted by law by all remedies at law or in equity.
(e) At any time, or from time to time, without liability therefor and
with 10 days' prior written notice to Grantor, upon written request of
Beneficiary and without affecting the effect of this Deed of Trust upon the
remainder of the Trust Property, Trustee may (i) reconvey any part of the Trust
Property, (ii) consent in writing to the making of any map or plat thereof, so
long as Grantor has consented thereto, (iii) join in granting any easement
thereon, so long as Grantor has consented thereto, or (iv) join in any extension
agreement or any agreement subordinating the lien or charge hereof.
ARTICLE V
Subject Lease
SECTION 5.01. The Subject Lease. (a) The Subject Lease is a valid and
subsisting lease of that portion of the Premises demised thereunder for the term
therein set forth, is in full force and effect in accordance with the terms
thereof, and has not been modified except as expressly set forth herein. Grantor
has delivered to Beneficiary a true, correct and complete copy of the Subject
Lease. No material default exists, and to the Grantor's actual knowledge, no
event or act has occurred and no condition exists which with the passage of time
or the giving of notice or both would constitute a default, under the Subject
Lease.
(b) Without the prior written consent of Beneficiary, Grantor will not
modify, amend, or in any way alter the terms of the Subject Lease if such
modification, amendment or alteration would increase the monetary obligations,
except to a de minimis extent, of the Grantor under the Subject Lease or
otherwise be adverse in any respect to the interests of Beneficiary or the value
of the Trust Property. Except to the extent permitted under the Credit
Agreement, without the prior written consent of Beneficiary, Grantor will not
(i) in any way cancel, release, terminate, surrender or reduce the term of the
Subject Lease, (ii) waive, excuse, condone or in any way release or discharge
landlord of or from the obligations, covenants, conditions and agreements by
said landlord to be done and performed and (iv) consent to the subordination of
the Subject Lease to any mortgage except if Grantor and Beneficiary receive a
nondisturbance agreement reasonably acceptable to Beneficiary.
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Any attempt on the part of Grantor to do any of the foregoing without such
written consent of Beneficiary shall be null and void and of no effect and shall
constitute a Default hereunder.
(c) Grantor shall at all times promptly and faithfully keep and perform
in all material respects, or cause to be kept and performed in all material
respects, all the covenants and conditions contained in the Subject Lease by the
lessee therein to be kept and performed and shall in all material respects
conform to and comply with the terms and conditions of the Subject Lease and
Grantor further covenants that it will not knowingly do or permit anything to be
done, the doing of which, or refrain from doing anything, the omission of which,
will impair the security of this Deed of Trust or will be reason for declaring a
default under the Subject Lease.
(d) Grantor shall give Trustee and Beneficiary prompt notice in writing
of any default on the part of the landlord under the Subject Lease or of the
receipt by Grantor of any notice of default from the landlord thereunder by
providing to Trustee and Beneficiary a copy of any such notice received by
Grantor from such landlord and this shall be done without regard to the fact
that Trustee or Beneficiary may be entitled to such notice directly from the
landlord. Grantor shall promptly notify Trustee and Beneficiary of any default
under the Subject Lease by landlord or giving of any notice by the landlord to
Grantor of such landlord's intention to end the term thereof. Grantor shall
furnish to Trustee or Beneficiary promptly upon Trustee's or Beneficiary's
request any and all information concerning the performance by Grantor of the
covenants of the Subject Lease and shall permit Trustee or Beneficiary or its
representative at all reasonable times, upon reasonable notice, to make
investigation or examination concerning the performance by Grantor of the
covenants of the Subject Lease. Grantor shall deposit with Trustee and
Beneficiary an exact copy of any notice, communication, plan, specification or
other instrument or document received or given by Grantor in any way relating to
or affecting the Subject Lease which may concern or affect the estate of the
landlord or the lessee in or under the Subject Lease or the property leased
thereby.
(e) If an Event of Default has occurred and is continuing, Trustee or
Beneficiary may (but shall not be obligated to) take any such action Trustee or
Beneficiary deems necessary or desirable to cure, in whole or in part, any
failure of compliance by Grantor under the Subject Lease; and upon the receipt
by Trustee or Beneficiary from Grantor or the landlord under the Subject Lease
of any written notice of default by Grantor as the lessee thereunder, Grantor
may rely thereon, and such notice shall constitute full authority and protection
to Trustee or Beneficiary for any action taken or omitted to be taken in good
faith reliance thereon. All sums, including reasonable attorneys' fees, so
expended by the Trustee or Beneficiary to cure or prevent any such default, or
expended to sustain the lien of this Deed of Trust or its priority, shall be
deemed secured by this Deed of Trust and shall be paid by the Grantor on demand,
with interest accruing thereon at the Default Interest Rate. Grantor hereby
expressly grants to Trustee for the benefit of Beneficiary (subject to the terms
of the Subject Lease), and agrees that Trustee, for the benefit of Beneficiary
shall have, the absolute and immediate right to enter in and upon the Land and
the Improvements or any part thereof to such extent and as often as Trustee or
Beneficiary, in its discretion, deems necessary or desirable in order to cure
any such default or alleged default by Grantor.
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(f) Except as required by Section 5.01(g), Grantor shall not make any
election or exercise any option or right or give any consent or approval for
which a right to do so is expressly conferred upon Grantor as lessee under the
Subject Lease without Beneficiary's prior written consent unless such election,
exercise consent or approval would be adverse in any material respect to the
interests of Beneficiary. Upon the occurrence and continuance of any Event of
Default hereunder, all such rights, together with the right of termination,
cancelation, modification, change, supplement, alteration or amendment of the
Subject Lease, all of which have been assigned for collateral purposes to
Beneficiary, shall automatically vest exclusively in and be exercisable solely
by Beneficiary.
(g) Grantor shall (i) exercise any option to renew or extend the term of
the Subject Lease in such manner as will cause the term of the Subject Lease
effectively to be renewed or extended for the period provided by such option and
(ii) give immediate written notice thereof to Beneficiary; provided that in the
event of failure of Grantor so to do, Beneficiary shall have, and is hereby
granted, the irrevocable right to exercise any such option, whether in its own
name and behalf or in the name and behalf of its designee or nominee or in the
name and behalf of Grantor or in any other manner authorized under the Subject
Lease as Beneficiary shall in its sole discretion determine.
(h) Grantor will give Beneficiary prompt written notice of the
commencement of any arbitration or appraisal proceeding under and pursuant to
the provisions of the Subject Lease. Following the occurrence and during the
continuance of an Event of Default, Beneficiary shall have the right, but not
the obligation, to participate in any such proceeding and Grantor shall confer
with Beneficiary to the extent which Beneficiary deems necessary for the
protection of Beneficiary. Grantor may compromise any dispute or approval which
is the subject of an arbitration or appraisal proceeding with the prior written
consent of Beneficiary which approval will not be unreasonably withheld or
delayed.
(i) So long as this Deed of Trust is in effect, there shall be no merger
of the Subject Lease or any interest therein, or of the leasehold estate created
thereby, with the fee estate in the Land or any portion thereof by reason of the
fact that the Subject Lease or such interest therein may be held directly or
indirectly by or for the account of any person who shall hold the landlord's
leasehold estate or fee estate in the Land or any portion thereof or any
interest of the landlord under the Subject Lease. In case the Grantor acquires
fee title to the Land, this Deed of Trust shall attach to and cover and be a
lien upon the fee title or such other estate so acquired, and such fee title or
other estate shall, without further assignment, mortgage or conveyance, become
and be subject to the lien of and covered by this Deed of Trust. Grantor shall
notify Beneficiary of any such acquisition and, on written request by
Beneficiary, shall cause to be executed and recorded all such other and further
assurances or other instruments in writing as may in the reasonable opinion of
Beneficiary be necessary or appropriate to effect the intent and meaning hereof
and shall deliver to Beneficiary an endorsement to Beneficiary's loan title
insurance policy insuring that such fee title or other estate is subject to the
lien of this Deed of Trust.
(j) In the event that the Subject Lease is terminated and Grantor obtains
a new lease directly from the owner of the Trust Property, this Deed of Trust
shall attach to and cover and be a lien upon the leasehold estate so acquired
and such leasehold estate shall become and be
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subject to the lien of and covered by this Deed of Trust. Grantor shall notify
Beneficiary of any such lease and, on written request by Beneficiary, shall
cause to be executed and recorded all such other and further assurances or other
instruments in writing as may in the reasonable opinion of Beneficiary be
necessary or appropriate, to effect the intent and meaning hereof and shall
deliver to Beneficiary an endorsement to Beneficiary's loan title insurance
policy insuring that such leasehold estate is subject to the lien of this Deed
of Trust.
(k) In the event that the Grantor as lessee under the Subject Lease
exercises any option or right to purchase any parcel of land which option or
right is granted under said Subject Lease, then upon the vesting of the title of
such parcel in the Grantor, this Deed of Trust shall attach to and cover and be
a lien upon the fee title or such other estate so acquired, and such fee title
or other estate shall, without further assignment, mortgage or conveyance,
become and be subject to the lien of and covered by this Deed of Trust.
(l) If any action or proceeding shall be instituted to evict Grantor or
to recover possession of any leasehold parcel or any part thereof or interest
therein or any action or proceeding otherwise affecting the Subject Lease or
this Deed of Trust shall be instituted, then Grantor will, immediately upon
service thereof on or to Grantor, deliver to Beneficiary a notice of motion,
order to show cause and of all other provisions, pleadings, and papers, however
designated, served in any such action or proceeding.
(m) The lien of this Deed of Trust shall attach to all of Grantor's
rights and remedies at any time arising under or pursuant to Subsection 365(h)
of the Bankruptcy Code, 11 U.S.C. 365(h), as the same may hereafter be amended
(the "Bankruptcy Code"), including, without limitation, all of Grantor's rights
to remain in possession of each leasehold parcel.
(n) Grantor hereby unconditionally assigns, transfers and sets over to
Trustee for the benefit of Beneficiary all of Grantor's claims and rights to the
payment of damages arising from any rejection of the Subject Lease by the lessor
or any other fee owner of any leasehold parcel or any portion thereof under the
Bankruptcy Code. Notwithstanding the foregoing, provided that no Event of
Default shall have occurred and be continuing, Grantor shall have the right to
collect such damages. Beneficiary shall have the right to proceed in its own
name or in the name of Grantor in respect of any claim, suit, action or
proceeding relating to the rejection of the Subject Lease, including, without
limitation, the right to file and prosecute, without joining or the joinder of
Grantor, any proofs of claim, complaints, motions, applications, notices and
other documents, in any case with respect to the lessor or any fee owner of all
or a portion of any leasehold parcel under the Bankruptcy Code. This assignment
constitutes a present, irrevocable and unconditional assignment of the foregoing
claims, rights and remedies, and shall continue in effect until all of the
Obligations shall have been satisfied and discharged in full. Any amounts
received by Beneficiary as damages arising out of the rejection of the Subject
Lease as aforesaid shall be applied first to all costs and expenses of Trustee
or Beneficiary (including, without limitation, reasonable attorneys' fees)
incurred in connection with the exercise of any of its rights or remedies under
this paragraph. Grantor shall promptly make, execute, acknowledge and deliver,
in form and substance satisfactory to Beneficiary, a UCC financing statement
(Form UCC-1) and all such additional instruments, agreements and other
documents, as may at any time hereafter be
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reasonably required by Beneficiary to effectuate and carry out the assignment
pursuant to this paragraph.
(o) If pursuant to Subsection 365(h)(2) of the Bankruptcy Code, 11 U.S.C.
Section 365(h)(2), Grantor shall seek to offset against the rent reserved in the
Subject Lease the amount of any damages caused by the nonperformance by the
lessor or any fee owner of any of their respective obligations under such
Subject Lease after the rejection by the lessor or any fee owner of such Subject
Lease under the Bankruptcy Code, then Grantor shall, prior to effecting such
offset, notify Beneficiary of its intent to do so, setting forth the amount
proposed to be so offset and the basis therefor. Beneficiary shall have the
right to object to all or any part of such offset that, in the reasonable
judgment of Beneficiary, would constitute a breach of such Subject Lease, and in
the event of such objection, Grantor shall not effect any offset of the amounts
so objected to by Beneficiary. Neither Beneficiary's failure to object as
aforesaid nor any objection relating to such offset shall constitute an approval
of any such offset by Beneficiary.
(p) If an Event of Default shall occur and be continuing, if any action,
proceeding, motion or notice shall be commenced or filed in respect of the
lessor or any fee owner of any leasehold parcel, or any portion thereof or
interest therein, or the Subject Lease in connection with any case under the
Bankruptcy Code, then Beneficiary shall have the option, exercisable upon
written notice from Beneficiary to Grantor, to conduct and control any such
litigation with counsel of Beneficiary's choice. Beneficiary may proceed in its
own name or in the name of Grantor in connection with any such litigation, and
Grantor agrees to execute any and all powers, authorizations, consents or other
documents required by Beneficiary in connection therewith. Grantor shall, upon
demand, pay to Beneficiary all reasonable costs and expenses (including
attorneys' fees) paid or incurred by Beneficiary in connection with the
prosecution or conduct of any such proceedings. Grantor shall not commence any
action, suit, proceeding or case, or file any application or make any motion, in
respect of the Subject Lease in any such case under Bankruptcy Code without the
prior written consent of Beneficiary which consent shall not be unreasonably
withheld or delayed.
(q) Grantor shall, after obtaining actual knowledge thereof, promptly
notify Beneficiary of any filing by or against the lessor or fee owner of any
leasehold parcel of a petition under the Bankruptcy Code. Grantor shall promptly
deliver to Trustee and Beneficiary, following receipt, copies of any and all
notices, summonses, pleadings, applications and other documents received by
Grantor in connection with any such petition and any proceedings relating
thereto.
(r) If there shall be filed by or against Grantor a petition under the
Bankruptcy Code and Grantor, as lessee under a Subject Lease, shall determine to
reject such Subject Lease pursuant to Section 365(a) of the Bankruptcy Code,
then Grantor shall give Beneficiary not less than twenty days' prior notice of
the date on which Grantor shall apply to the Bankruptcy Court for authority to
reject such Subject Lease. Beneficiary shall have the right, but not the
obligation, to serve upon Grantor within such twenty day period a notice stating
that Beneficiary demands that Grantor assume and assign such Subject Lease to
Beneficiary pursuant to Section 365 of the Bankruptcy Code. If Beneficiary shall
serve upon Grantor the
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notice described in the preceding sentence, Grantor shall not seek to reject
such Subject Lease and shall comply with the demand provided for in the
preceding sentence.
(s) Effective upon the entry of an order for relief with respect to
Grantor under the Bankruptcy Code, Grantor hereby assigns and transfers to
Beneficiary a non-exclusive right to apply to the Bankruptcy Court under
subsection 365(d)(4) of the Bankruptcy Code for an order extending the period
during which the Subject Lease may be rejected or assumed.
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IN WITNESS WHEREOF, this Deed of Trust has been duly authorized and has
been executed and delivered to Trustee and Beneficiary by Grantor on the date
first written above.
D.J. ORTHOPEDICS, LLC,
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ III
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ III
Title: V.P., CFO and Secretary
Attest:
by /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Witness
[CORPORATE SEAL]
27
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇ this 25th day of June 1999, before me, the undersigned officer,
personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇ III, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that his/her signature on the instrument the
person, or entity upon behalf of which the person acted, executed the
instrument.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Notary Public
[SEAL]
30
Exhibit A
to the Deed of Trust
Legal Description
31
Schedule A
to the Deed of Trust
Leases of Trust Property
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Appendix A
Deed of Trust, Security Agreement and
Assignment of Leases and Rents
1. The following provision is hereby added to the end of Section 1.11
of this Deed of Trust:
"This Deed of Trust shall also constitute a financing statement, filed as a
fixture filing in the real estate records of the County of the State in which
the Premises is located, with respect to any and all fixtures included within
the terms "Improvements" under this Deed of Trust and to any goods or other
personal property that are now or hereafter become a part of the Trust Property
as fixtures."
2. The Trustee accepts this trust when this Deed of Trust, duly
executed and acknowledged, becomes a public record as provided by law. The
Trustee shall not be obligated to perform any act required of it hereunder
unless the performance of such act is requested in writing and the Trustee is
reasonably indemnified against loss, cost, liability and expense.
3. The Trustee (or Beneficiary) may from time to time apply in any
Court of competent jurisdiction for aid and direction in the execution of the
trusts and the enforcement of the rights and remedies available hereunder, and
the Trustee (or Beneficiary) may obtain orders or decrees directing, confirming
or approving acts in the execution of such trusts and the enforcement of such
remedies. All costs and expenses of any such proceeding (including reasonable
attorneys' fees) shall be borne by Grantor.
4. Upon an Event of Default which is continuing, Beneficiary shall
have the right, as more particularly set forth in the Credit Agreement, to
declare all or any portion of the Secured Obligations secured hereby immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived by Grantor, and exercise any or all of the
remedies provided for in Article II hereof.
5. Notwithstanding anything to the contrary contained herein,
Beneficiary's rights and remedies under California Code of Civil Procedure
Section 736 shall not be waived, limited or otherwise adversely affected by
virtue of a full or partial credit bid upon foreclosure of this Deed of Trust.
6. The Credit Agreement, the Loan Documents, the Senior Note
Documents or the Tranche A Exchange Note Purchase Agreements (with respect to
the Trust Property) may contain provisions imposing a late charge and past due
rate of interest if payments are not timely made, and prepayment restrictions
and premiums as more particularly described in such documents.
7. GRANTOR PLEASE NOTE: IN THE EVENT OF YOUR DEFAULT, THIS DEED OF
TRUST AND APPLICABLE LAW PERMITS THE TRUSTEE TO SELL
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THE TRUST PROPERTY AT A SALE HELD WITHOUT SUPERVISION BY ANY COURT AFTER
EXPIRATION OF A PERIOD PRESCRIBED BY LAW. SEE SECTION 2.06 FOR A DESCRIPTION OF
THIS PROCEDURE. UNLESS YOU PROVIDE AN ADDRESS FOR THE GIVING OF NOTICE, YOU MAY
NOT BE ENTITLED TO OTHER NOTICE OF THE COMMENCEMENT OF SALE PROCEEDINGS. BY
EXECUTION OF THIS DEED OF TRUST, YOU CONSENT TO THIS PROCEDURE. IF YOU HAVE ANY
QUESTIONS CONCERNING IT, YOU SHOULD CONSULT YOUR LEGAL ADVISOR. BENEFICIARY AND
TRUSTEE URGE YOU TO GIVE BENEFICIARY PROMPT NOTICE OF ANY CHANGE IN YOUR ADDRESS
SO THAT YOU MAY RECEIVE ANY NOTICE OF DEFAULT AND NOTICE OF SALE GIVEN PURSUANT
TO THIS DEED OF TRUST.
8. Grantor requests that a copy of any notice of default and notice
of sale hereunder be mailed to Grantor in the manner indicated in Section 3.02
of this Deed of Trust.
9. Suretyship Waivers. Insofar as this Deed of Trust has been
executed by Grantor to secure in part performance of the obligations of Borrower
as described hereinabove. Grantor acknowledges the possibility that this Deed of
Trust could be construed by a court of competent jurisdiction as a form of
disguised guaranty of such obligations, notwithstanding the express intent of
Grantor and Beneficiary that this Deed of Trust not be so construed as creating
a relationship of surety and principal. However, if and to the extent that his
Deed of Trust is construed by a court of competent jurisdiction to constitute a
form of disguised guaranty, Grantor hereby expressly acknowledges and agrees as
follows:
(a) Unconditional Obligation.
The obligations, covenants, agreements and duties of
Grantor shall in no way be affected or impaired by reason of the
happening from time to time of any of the following events, even
if such event takes place without notice to or the further consent
of Grantor: (i) the waiver by Beneficiary of the performance or
observance by Borrower, Grantor, or any other party of any of the
agreements, covenants, terms or conditions contained in any of the
Loan Documents; (ii) the extension, in whole or in part, of the
time for payment by Borrower or Grantor of any sums owing or
payable under any of the Loan Documents; (iii) the modification or
amendment, whether material or otherwise, of any of the
obligations of Borrower under the Loan Documents, whether the same
be in the form of a new agreement or the modification or amendment
of an existing Loan Document (any of the foregoing being a
"Modification"); provided, however, that unless such modification
is required by law or on account of bankruptcy or insolvency, no
Modification that has the effect of materially increasing the
obligations of Grantor hereunder shall be effective against
Grantor to the extent of such material increase unless Grantor
shall be a party to, or consent to, such Modification, which
consent Grantor agrees shall not be unreasonably withheld or
delayed; provided, further, that if any Modification is made
without such consent of Grantor, such Modification shall be
ineffective as against Grantor only to the extent
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that same shall materially increase the obligations of Grantor
under this Deed of Trust, it being expressly agreed that, even if
such Modification has the effect of increasing the likelihood of a
default by Borrower under the Loan Documents, Grantor shall remain
liable to the full extent of this Deed of Trust as if such
Modification had not been made; (iv) the doing or the omission of
any of the acts referred to in the Loan Documents; (v) any
failure, omission or delay on the part of Beneficiary to enforce,
assert or exercise any right, power or remedy conferred on or
available to Beneficiary in or by any of the Loan Documents or any
action on the part of Beneficiary granting indulgence or extension
in any form whatsoever; (vi) the voluntary or involuntary
liquidation, dissolution, sale of all or substantially all of the
assets, marshaling of assets and liabilities, receivership,
conservatorship, custodianship, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement,
composition or readjustment of, or other similar proceeding
affecting Borrower or Grantor or any of its assets; (vii) the
inability of Beneficiary or Borrower to enforce any provision of
the Loan Documents; (viii) any change in the relationship between
Borrower and Grantor or any termination of such relationship; (ix)
the inability of Borrower to perform, or the release of Borrow or
Grantor from the performance of, any obligation, agreement,
covenant, term or condition of Borrower under any of the Loan
Documents and this Deed of Trust by reason of any law, regulation
or decree, now or hereafter in effect; or (x) any action or
inaction by Beneficiary that results in any impairment or
destruction of any subrogation rights of Grantor or any rights of
Grantor to proceed against Borrower for reimbursement.
(b) Subrogation.
Grantor understands and acknowledges that Beneficiary's
exercise of certain rights and remedies in the Loan Documents may
affect or eliminate Grantor's right of subrogation against
Borrower, and as result, Grantor may succeed to a partially or
totally nonreimbursable liability under this Deed of Trust.
Grantor hereby authorizes and empowers Beneficiary to exercise, in
Beneficiary's own discretion, any rights and remedies or any
combination thereof, which may then be available since it is the
intent and purpose of Grantor that the obligations under this Deed
of Trust shall be absolute, independent and unconditional under
any and all circumstances. Until all of Borrower's obligations
have been performed under the Loan Documents, Grantor: (i) shall
have no right of subrogation against Borrower by reason of any
payments or acts of performance by Grantor in compliance with the
obligations of Grantor under this Deed of Trust; (ii) waives any
right to enforce any remedy that Grantor may have against Borrower
by reason of any one or more payments or acts of performance in
compliance with the obligations of Grantor under this Deed of
Trust; and (iii) subordinates any liability or indebtedness of
Borrower held by Grantor to the obligations of Borrower to
Beneficiary under any of the Loan Documents and any other
instruments of indebtedness.
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(c) Waivers.
Grantor hereby waives: (i) diligence and demand of payment
except as otherwise required hereunder; (ii) all notices to
Grantor, to Borrower, or to any other person, including, but not
limited to, notices of the creation, renewal, extension,
modification, or accrual, of any obligations contained in the Loan
Documents or notice of any other matters relating thereto not
expressly required under the Loan Documents or this Deed of Trust;
(iii) all demands whatsoever; (iv) any statute of limitations
affecting liability under this Deed of Trust or the enforcement of
this Deed of Trust; (v) any duty on the part of Beneficiary to
disclose to Grantor any facts that it may now or hereafter know
about Borrower, regardless of whether Beneficiary has reason to
believes that any such facts materially increase the risk beyond
that which Grantor intends to assume or has reason to believe that
such facts are unknown to Grantor or has reasonable opportunity to
communicate such facts to Grantor, it being understood and agreed
that Grantor is fully responsible for being and keeping informed
of the financial condition of Borrower and of all circumstances
bearing on the risk of nonpayment of any amount hereby secured;
(vi) all principal or provisions of law that conflict with the
terms of this Deed of Trust or any circumstances which would
otherwise constitute a legal or equitable discharge of Grantor
hereunder; (vii) any right Grantor may have to require Beneficiary
to proceed against Borrower or against any other party to
foreclose any lien on any real or personal property, to exercise
any right or remedy under the Loan Documents, or to pursue any
other remedy, or to enforce any other right; and (viii) any and
all benefits of California Civil Code Sections 2809, 2810, 2819,
2822, 2845, 2849, 2850 and 2855, and California Code of Civil
Procedure Sections 580a, 580b, 580d and 726.
(d) Acknowledgments.
Grantor specifically understands and agrees as follows: (i)
that all of Grantor's obligations under this Deed of Trust are
independent of the obligations of Borrower under the Loan
Documents, and that a separate action may be bought against
Grantor whether or not an action has commenced against Borrower
under any such Loan Documents or from exercising any rights
available to Beneficiary under the Loan Documents; (ii) nothing in
this Deed of Trust shall prevent Beneficiary from suing on the
Loan Documents; (iii) that the exercise of any of Beneficiary's
rights under this Deed of Trust shall not constitute a legal or
equitable discharge of Grantor; and (iv) that under certain
circumstances, if Beneficiary elects to nonjudicial foreclose on
real property (if any) owned by Borrower in the State of
California, Grantor's subrogation rights against Borrower will be
destroyed because California Code of Civil Procedure Section 580d
precludes anyone, including Grantor, from obtaining a deficiency
judgment after a nonjudicial foreclosure sale, and that Grantor
has waived any defense it may have based upon the loss of
Grantor's subrogation rights against Borrower resulting from
Beneficiary's
4
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election to nonjudicial foreclose on real property owned by
Borrower (if any) located in the State of California to the Deed
of Trust.
5
