Exhibit 4.28
--------------------------------------------------------------------------------
DISCOVERY ZONE, INC.
(Grantor),
to
THE PUBLIC TRUSTEE OF XXXXXXX COUNTY,
COLORADO, AS TRUSTEE
(Trustee)
for the benefit of
STATE STREET BANK AND TRUST COMPANY,
solely in its capacity as Trustee and Collateral Agent
(Beneficiary)
--------------------------------------------------------------------------------
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
--------------------------------------------------------------------------------
Dated as of July 29th, 1997
DOCUMENT PREPARED BY AND
AFTER RECORDING RETURN TO:
Xxxxxxxx Kill & Olick, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
--------------------------------------------------------------------------------
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (as the same may from time to time be extended,
renewed or modified, this "DEED OF TRUST"), made as of this 29th day of July,
1997, by DISCOVERY ZONE, INC., a Delaware corporation ("GRANTOR"), having its
principal place of business at One Corporate Center, 000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 to THE PUBLIC TRUSTEE OF XXXXXXX
COUNTY, COLORADO, AS TRUSTEE (and any subsequent substitutes or successors
thereof pursuant to Section 50 below, "TRUSTEE") to and for the benefit of
STATE STREET BANK AND TRUST COMPANY, solely in its capacity as trustee and
collateral agent under and pursuant to that certain Indenture, dated July 22,
1997, among Discovery Zone, Inc., State Street Bank and Trust Company, as
trustee, and the Subsidiary Guarantors named therein, its successors and
assigns ("BENEFICIARY"), having an address at Xxx Xxxxxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000.
W I T N E S S E T H:
--------------------
A. WHEREAS, Grantor has entered into the aforementioned Indenture,
dated as of July 22, 1997 (said Indenture, together with any supplements or
amendments thereto and any renewals, extensions, or replacements thereof, is
hereinafter referred to as the "INDENTURE") pursuant to which the Grantor has
issued (i) 13.50% Senior Secured Notes due August 1, 2002 ("Initial Notes"), and
(ii) 13.50% Senior Secured Notes due August 1, 2002, Series B to be issued in
exchange for the Initial Notes pursuant to a Registration Rights Agreement,
dated as of July 22, 1997, between Grantor and Xxxxxxxx & Company, Inc. (the
"Exchange Notes") in the aggregate principal amount of Eighty-Five Million
Dollars ($85,000,000.00). The Initial Notes, the Exchange Notes, and the
Private Exchange Notes (as defined in the Indenture) are hereinafter referred to
collectively as, the "Notes";
B. WHEREAS, pursuant to its obligations under the Indenture, and for
the purpose, among other things, of securing and providing for the repayment of
the Notes, Grantor and Beneficiary have entered into that certain Security
Agreement, Pledge Agreement, Escrow and Security Agreement, and Collateral
Assignment of Patents, Trademarks and Copyrights (Security Agreement), each
dated as of July 22, 1997, which aforementioned agreements and the Indenture,
together with any supplements or amendments thereto and any renewals, extensions
or replacements thereof are hereinafter collectively referred to as the
"RELEVANT DOCUMENTS";
C. WHEREAS, Grantor is entering into this Deed of Trust pursuant to
its obligations under the Indenture and for the purpose, among other things, of
further securing and providing for repayment of the Notes; and
D. WHEREAS, Grantor is the fee simple owner of the real estate
described in Exhibit A attached hereto commonly known as 0000 XXXXXXX XXXXX,
XXXXXXXXX, XXXXXXXX (the "LAND");
-1-
NOW THEREFORE, for and in consideration of One ($1) Dollar, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Grantor, and in order to secure, to the extent of principal
of EIGHTY-FIVE MILLION ($85,000,000) DOLLARS plus interest and other charges
thereon or disbursements in connection therewith, the prompt payment and
performance of the all of the obligations (the "OBLIGATIONS"), which Obligations
shall be due and payable in full on August 1, 2002 if not sooner paid, of
Grantor, including, without limitation, any and all obligations of Grantor under
this Deed of Trust, the Indenture, and the Notes, and all other documents
evidencing or securing any such Obligations including, without limitation, the
Relevant Documents, Grantor by these presents hereby GRANTS, BARGAINS, SELLS,
WARRANTS, PLEDGES, ASSIGNS AND CONVEYS to Trustee and its successors and assigns
forever in trust, WITH POWER OF SALE, for the benefit of Beneficiary, the Land
and the buildings, structures and improvements of every nature whatsoever now or
hereafter located thereon to the extent owned by Grantor (including, but not
limited to, all gas and electric fixtures, radiators, heaters, docks and docking
facilities, engines and machinery, boilers, elevators and motors, plumbing,
heating and air conditioning fixtures, carpeting and other floor coverings,
water heaters, awnings and storm sashes which are or shall be attached to the
Land or said buildings, structures or improvements) (the "IMPROVEMENTS");
TOGETHER WITH: all right, title, interest and estate of Grantor now
owned, or hereafter acquired, in and to the following property, rights, interest
and estates relating to the Land and the Improvements, together with Grantor's
interest in the following property, rights, interests and estates hereinafter
described (the Land, Improvements, and the following property, rights, interests
and estates being hereinafter collectively referred to as the "TRUST PROPERTY"):
(a) all easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, construction and equipment
warranties, and all estates, rights, titles, interests, privileges, liberties,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating to or pertaining to the Land and the Improvements and the
reversion and reversions, remainder and remainders, and all land lying in the
bed of any street, road or avenue, opened or proposed, in front of or adjoining
the Land, to the center line thereof and all the estates, rights, titles,
interests, dower and rights of dower, curtesy and rights of curtesy, property,
possession, claim and demand whatsoever, both at law and in equity, of Grantor
of, in and to the Land and the Improvements and every part and parcel thereof,
with the appurtenances thereto, and in and to any streets, ways, alleys,
passages, strips or gores of land adjoining the Land or any part thereof;
(b) all fixtures, attachments and other articles attached to the Land
or the Improvements constituting realty or real property now or hereafter owned
by Grantor or in which Grantor has or shall acquire an interest, now or
hereafter located on, attached to or contained in or used or usable in
connection with the Trust Property, and including, without limitation, all
building or construction materials intended for construction, reconstruction,
alteration or repair of or installation on or in the Trust Property, of every
kind and nature
-2-
whatsoever now owned or hereafter acquired by Grantor, and all proceeds thereof,
as well as all additions to, appurtenances, substitutions for, replacements of
or accessions to any of the items recited as aforesaid and all attachments,
components, parts (including spare parts) and accessories, whether installed
thereon or affixed thereto, now or hereafter owned by Grantor and used or
intended to be used in connection with, or with the operation of, the Trust
Property, to the extent constituting real property (collectively, the
"FIXTURES");
(c) all awards or payments, including interest thereon, which may
heretofore and hereafter be made with respect to the Trust Property, whether
from the exercise of the right of eminent domain (including, but not limited to,
any transfer made in lieu of or in anticipation of the exercise of said rights),
or for a change of grade, or for any other injury to or decrease in the value of
the Trust Property;
(d) to the extent assignable, leases, subleases (including
sub-subleases), and, to lettings, licenses, concessions, occupancy agreements
and other agreements which grant a possessory interest in, or the right to use
or occupy, all or any part of the Trust Property now or hereafter entered into,
and all amendments, extensions, renewals and guarantees thereof, and all
security therefor (collectively, the "LEASES") and all rents, issues, profits,
revenues (including all oil and gas or other mineral royalties and bonuses),
deposits (including, without limitation, security deposits) under the Leases
(including, without limitation, from the rental of any office space, retail
space or other space, halls, stores, and offices, and deposits securing
reservations of such space, exhibit or sales space of every kind, license,
lease, sublease fees and rentals, letters of credit or cash instruments securing
or evidencing obligations under Leases, service charges, vending machine sales
and proceeds, if any, from business interruption or other loss of income
insurance)) (collectively, the "RENTS") and all proceeds from the sale or other
disposition of the Leases and the right to receive and apply the Rents to the
payment of the Obligations;
(e) subject to the rights of Grantor hereunder, all proceeds of any
insurance policies covering the Trust Property (including, without limitation,
the right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Trust Property);
(f) all refundable, returnable or reimbursable fees deposits or other
funds or evidences of credit or indebtedness deposited by or on behalf of
Grantor with any governmental authorities, boards, corporations, providers of
utility services, public or private, including specifically, but without
limitation, all refundable, returnable or reimbursable tap fees, utility
deposits and development costs in connection with the Trust Property, and all of
the records and books of account now or hereafter maintained by or on behalf of
Grantor in connection with the operation of the Trust Property (collectively,
"SECURITY ACCOUNTS");
(g) all proceeds (as defined in the Uniform Commercial Code) of the
Trust Property which, in any event, shall include, without limitation, (i) cash,
instruments and other property received, receivable or otherwise distributed in
respect of or in exchange for any or all
-3-
of the Trust Property, (ii) the collection or other disposition of, or
realization upon, any item or portion of the Trust Property (including, without
limitation, all claims of Grantor against third parties for loss of, damage to,
destruction of, or for proceeds payable under, or unearned premiums with respect
to, policies of insurance in respect of, the Trust Property now existing or
hereafter arising), (iii) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Grantor from time to time with respect to damage
or loss of or to any of the Trust Property, (iv) any and all payments (in any
form whatsoever) made or due and payable to Grantor from time to time in
connection with the requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Trust Property by any Governmental
Authority (or any person acting under color of Governmental Authority), and (v)
any and all real estate tax refunds payable to Grantor with respect to the Trust
Property, and refunds or reimbursements payable with respect to bonds, escrow
accounts, or other sums payable in connection with the use, development or
ownership of the Trust Property (collectively, the "PROCEEDS");
(h) to the extent permitted under applicable law, all licenses,
permits, variances and certificates used in connection with the ownership,
operation, use or occupancy of the Trust Property (including, without
limitation, business licenses, state health department licenses, food service
licenses, liquor licenses, licenses to conduct business and all such other
permits, licenses and rights, obtained from any Governmental Authority or
private Person concerning ownership, operation, use or occupancy of the Trust
Property) (collectively, "PERMITS");
(i) all plans, specifications, shop drawings and other technical
descriptions prepared for construction, repair or alteration of the Improvements
(including diskettes containing any such data), and all amendments and
modifications thereof; and
(j) any and all replacements and renewals of or additions and
substitutions to any of the foregoing and all proceeds of any of the foregoing.
TO HAVE AND TO HOLD the above granted and described Trust Property
unto and to the use and benefit of Trustee, and the successors, substitutes and
assigns of Trustee forever, IN TRUST WITH POWER OF SALE, for the benefit of
Beneficiary, and its successors and assigns, and Grantor does hereby bind
itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to
the Trust Property unto Trustee and its successors, substitutes and assigns, for
the benefit of Beneficiary, and its successors and assigns;
AND, TO PROTECT THE SECURITY OF THIS DEED OF TRUST, Grantor represents
and warrants to and covenants and agrees with Beneficiary as follows:
1. Defined Terms. The following terms, when used herein, shall have
the meanings set forth below:
"ENVIRONMENTAL LAWS" means any and all present and future federal,
state or local laws, statutes, ordinances or regulations, any judicial or
administrative orders, decrees or
-4-
judgments thereunder, and any permits, approvals, licenses, registrations,
filings and authorizations, in each case as now or hereafter in effect, relating
to the protection of the environment, the impact of Hazardous Substances or the
generation, disposal or remediation thereof on human health or safety, or the
Release or threatened Release of Hazardous Substances or otherwise relating to
the Use of Hazardous Substances. For purposes of this definition, (A)
"HAZARDOUS SUBSTANCES" means collectively, (i) any petroleum or petroleum
products or waste oils, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBS"), and lead-based
paint, (ii) any chemicals or other materials or substances which are now or
hereafter become defined as or included in the definitions of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any Environmental
Law and (iii) any other chemical or any other material or substance, exposure to
which is now or hereafter prohibited, limited or regulated under any
Environmental Law; (B) "USE" means, with respect to any Hazardous Substance, the
generation, manufacture, processing, distribution, handling, use, treatment,
recycling or storage of such Hazardous Substance or transportation of such
Hazardous Substance; and (C) "RELEASE" means any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment (including, without
limitation, the movement of Hazardous Substances through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata).
"GOVERNMENTAL AUTHORITY" means any national or federal government, any
state, regional, local or other political subdivision thereof with jurisdiction
and any Person with jurisdiction exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government (including
without limitation any court).
"IMPOSITIONS" means all taxes (including, without limitation, all real
estate, ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible transaction privilege,
privilege or license or similar taxes), assessments (including, without
limitation, all assessments for public improvements or benefits, whether or not
commenced or completed within the term of this Deed of Trust), ground rents,
water, sewer or other rents and charges, excises, levies, fees (including,
without limitation, license, permit, inspection, authorization and similar
fees), and all other governmental impositions and other charges (including,
without limitation, vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Trust Property), in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, of every character
in respect of the Trust Property, which at any time prior to, during or in
respect of the term hereof may be assessed or imposed on or in respect of or be
a lien upon (i) Grantor (including, without limitation, all income, franchise,
single business or other taxes imposed on Grantor for the privilege of doing
business in the jurisdiction in which the Trust Property is located), (ii) the
Trust Property, or any part thereof or any revenues therefrom or any estate,
right, title or interest therein, or (iii) any occupancy, operation, use or
possession of, or sales from, or activity conducted on, or in connection with
the Trust Property by Grantor or the leasing or use of the Trust Property or any
part thereof by Grantor.
-5-
"LEGAL REQUIREMENTS" means (i) all governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and injunctions of
Governmental Authorities (including, without limitation, Environmental Laws)
affecting either the Borrower or any Property or any part thereof or the
construction, ownership, use, alteration or operation thereof, or any part
thereof (whether now or hereafter enacted and in force), (ii) all permits,
licenses and authorizations and regulations relating thereto, and (iii) all
covenants, conditions and restrictions contained in any instruments at any time
in force (whether or not involving Governmental Authorities) affecting the Trust
Property or any part thereof which, in the case of this clause (iii), require
repairs, modifications or alterations in or to the Trust Property or any part
thereof, or in any material way limit or restrict the existing use and enjoyment
thereof.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code, as
adopted, enacted and amended from time to time by the state or states where any
of the Trust Property is located.
2. PAYMENT OF OBLIGATIONS AND INCORPORATION OF COVENANTS, CONDITIONS
AND AGREEMENTS. Grantor will pay the Obligations at the time and in the manner
provided in the Relevant Documents and in this Deed of Trust. All the
representations, warranties, covenants, conditions and agreements of Grantor
contained in the Relevant Documents are hereby made a part of this Deed of Trust
to the same extent and with the same force as if fully set forth herein. If
there shall be any inconsistencies between the terms, covenants, conditions and
provisions set forth in this Deed of Trust and the terms, covenants, conditions
and provisions set forth in the Relevant Documents, then the terms, covenants,
conditions and provisions of the Relevant Documents shall prevail.
3. WARRANTY OF TITLE. Grantor warrants that Grantor has good,
marketable and insurable fee simple title to Land and the Improvements and has
good title to the remainder of the Trust Property and has the full power,
authority and right to execute, deliver and perform its obligations under this
Deed of Trust and to encumber, mortgage, give, grant, bargain, sell, alienate,
enfeoff, convey, confirm, warrant, pledge, assign and hypothecate the Trust
Property and that Grantor possesses an unencumbered fee estate in the Land and
the Improvements and that it owns the Trust Property free and clear of all
liens, encumbrances and charges whatsoever except for (x) those exceptions to
title which are existing on the date hereof and approved by Beneficiary and (y)
those exceptions of title that are permitted under the other terms and
conditions of this Deed of Trust (collectively, the "PERMITTED ENCUMBRANCES")
and that this Deed of Trust is and will remain a valid and enforceable first
lien on and security interest in the Trust Property, subject only to the
Permitted Encumbrances. Grantor shall forever warrant, defend and preserve such
title and the validity and priority of the lien of this Deed of Trust and shall
-6-
forever warrant and defend the same to Beneficiary against the claims of all
persons whomsoever.
4. TAXES. Grantor hereby warrants, covenants and agrees to pay
before any penalty attaches all real property taxes, general and special, and
all other taxes and assessments of any kind or nature whatsoever, against the
Trust Property when due and shall, upon written request, furnish to Beneficiary
duplicate receipts therefor, Grantor may, in good faith and with reasonable
diligence, contest the validity or amount of any such taxes or assessments
provided that such contest shall have the effect of preventing the collection of
the tax or assessment so contested and the sale or forfeiture of said Trust
Property or any part thereof, or any interest therein, to satisfy the same.
5. INDEMNIFICATION. Grantor shall indemnify, defend and hold
harmless Beneficiary from and against all of the following (collectively, and
individually referred to as a "LOSS"): claims, demands, causes of action,
judgments, costs, expenses, liabilities, losses and damages (including
consequential and punitive damages), reasonable attorneys' fees and expenses and
court costs, disbursements and court costs, and all risk of damage to property
and injury to persons in or upon the Trust Property, arising from: (i)
Grantor's use of the Property or from the conduct of its business in or about
the Trust Property; (ii) Grantor's default or breach of any term under this Deed
of Trust; and (iii) Grantor's violation or failure to comply with any Legal
Requirements, including Environmental Laws; provided that Grantor shall not be
liable for Loss arising from Beneficiary's or Trustee's negligence or willful
misconduct or from Beneficiary's or Trustee's breach of any of their obligations
hereunder.
6. TRANSFER OR ENCUMBRANCE OF THE TRUST PROPERTY. Subject to
Section 52 hereof and except as may otherwise be permitted hereunder or pursuant
to the Relevant Documents, Grantor shall not sell, convey, alienate, mortgage,
encumber, pledge or otherwise transfer the Trust Property or any part thereof or
any of its interest therein. Beneficiary shall not be required to demonstrate
any actual impairment of its security or any increased risk of default hereunder
in order to declare the Obligations immediately due and payable upon Grantor's
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Trust
Property in violation of this Deed of Trust or any other Relevant Document.
This provision shall apply to every sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Trust Property that is not permitted
pursuant to the Relevant Documents, regardless of whether voluntary or not, or
whether or not Beneficiary has consented to any previous sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Trust Property.
7. AMENDMENT TO LEGAL DESCRIPTION. If it becomes evident that the
legal description attached to any Relevant Document is inaccurate or does not
fully describe all of the real property which is reasonably connected to the
Land, Grantor hereby agrees to an amendment of such legal description and the
legal description contained on the corresponding title policy so that such error
is corrected and to execute and cause to be recorded, if applicable, such
document as may be appropriate for such purpose.
-7-
8. ASSIGNMENT OF LEASES AND RENTS. Grantor does hereby absolutely
and unconditionally assign to Beneficiary, Grantor's right, title and interest
in all current and future Leases and Rents, it being intended by Grantor that
this assignment constitutes a present, absolute assignment and not an assignment
for additional security only. Such assignment to Beneficiary shall not be
construed to bind Beneficiary to the performance of any of the covenants,
conditions or provisions contained in any such Lease or otherwise impose any
obligation upon Beneficiary. Beneficiary shall have no responsibility on
account of this assignment for the control, care, maintenance, management or
repair of the Trust Property, for any dangerous or defective condition of the
Trust Property, or for any negligence in the management, upkeep, repair or
control of the Trust Property. Grantor agrees to execute and deliver to
Beneficiary such additional instruments, in form and substance satisfactory to
Beneficiary, as may hereafter be requested by Beneficiary to further evidence
and confirm such assignment. Nevertheless, subject to the terms of this
paragraph, Beneficiary grants to Grantor a revocable license to collect all of
the Rents and retain, use and enjoy the same and otherwise exercise all rights
of Grantor under any Lease, in each case, subject to the terms hereof and of the
Relevant Documents. Upon an Event of Default, the license granted to Grantor
herein shall immediately and automatically be revoked, and Beneficiary shall
immediately be entitled to possession of all Rents, whether or not Beneficiary
enters upon or takes control of the Trust Property, provided that if such Event
of Default ceases to exist, the license shall automatically be reinstated. In
addition, during the continuation of an Event of Default, Beneficiary may,
either in person or by agent, without bringing any action or proceeding, or by a
receiver appointed by a court, without the necessity of taking possession of the
Trust Property in its own name, and in addition to and without limiting any of
Beneficiary's rights and remedies hereunder, under the Notes and any other
Relevant Documents and as otherwise available at law or in equity, (a) notify
any lessee or other person that the Leases have been assigned to Beneficiary and
that all Rents are to be paid directly to Beneficiary, whether or not
Beneficiary has commenced or completed foreclosure or taken possession of the
Trust Property; (b) settle, compromise, release, extend the time of payment of,
and make allowances, adjustments and discounts of any Rents or other obligations
in, to and under the Leases; (c) demand, xxx for or otherwise collect, receive,
and enforce payment of Rents, including those past-due and unpaid and other
rights under the Leases, prosecute any action or proceeding, and defend against
any claim with respect to the Rents and Leases; (d) enter upon, take possession
of and operate the Trust Property; (e) lease all or any part of the Trust
Property; and/or (f) perform any and all obligations of Grantor under the Leases
and exercise any and all rights of Grantor therein contained to the full extent
of Grantor's rights and obligations thereunder, with or without the bringing of
any action or the appointment of a receiver and without need for any other
authorization or other action by Beneficiary or Grantor. At Beneficiary's
request, Grantor shall deliver a copy of this assignment to each tenant under a
Lease and to each manager and managing agent or operator of the Trust Property.
Grantor irrevocably directs any tenant, manager, managing agent, or operator of
the Property, without any requirement for notice to or consent by Grantor, to
comply with all demands of Beneficiary under this Section 8 and to turn over to
Beneficiary on demand all Rents which it receives. Grantor hereby acknowledges
and agrees that payment of any Rents by a person to Beneficiary as hereinabove
provided shall constitute payment by such person, as fully and with the same
effect as if such Rents had been
-8-
paid to Grantor. Beneficiary is hereby granted and assigned by Grantor the
right, at its option, upon revocation of the license granted herein, to enter
upon the Trust Property in person or by agent, without bringing any action or
proceeding, or by court-appointed receiver to collect the Rents. Any Rents
collected after the revocation of the license shall be applied towards the
payment of the Obligations. Neither the enforcement of any of the remedies
under this Section 8 nor any other remedies or security interests afforded to
Beneficiary under the Relevant Documents, at law or in equity shall cause
Beneficiary to be deemed or construed to be a Beneficiary in possession of the
Trust Property, to obligate Beneficiary to lease the Trust Property or attempt
to do so, or to take any action, incur any expense, or perform or discharge any
obligation, duty or liability whatsoever under any of the Leases or otherwise.
Grantor shall, and hereby agrees to indemnify Beneficiary for, and to hold
Beneficiary harmless from and against, any and all claims, liability, expenses,
losses or damages which may or might be asserted against or incurred by
Beneficiary solely by reason of Beneficiary's status as an assignee pursuant to
the assignment of Rents and Leases contained herein, but excluding any claim (a)
to the extent caused by Beneficiary's gross negligence or willful misconduct, or
(b) to the extent arising solely from Beneficiary's actions after Beneficiary
has taken possession of the Trust Property. Should Beneficiary incur any such
claim, liability, expense, loss or damage, the amount thereof, including all
actual expenses and reasonable fees of attorneys, shall constitute Obligations
secured hereby, and Grantor shall reimburse Beneficiary therefor immediately
upon demand. Grantor agrees that all Leases shall be subject to the prior
written approval of Beneficiary, such approval not to be unreasonably withheld.
9. MAINTENANCE OF TRUST PROPERTY. Grantor shall cause the Trust
Property to be maintained in a good and safe condition and repair (subject to
ordinary wear and tear), and shall otherwise operate and maintain the Trust
Property in a manner consistent with the manner in which it operates and
maintains the other properties on which it operates similar businesses ("SIMILAR
PROPERTIES"). Except as otherwise permitted by the Relevant Documents, the
Improvements, the Fixtures and the equipment located on the Land or the
Improvements shall not be removed, demolished or materially altered (except for
normal replacement of equipment) without the consent of Beneficiary which shall
not unreasonably be withheld or delayed. Grantor shall comply with all laws,
orders and ordinances affecting the Trust Property, or the use thereof. Except
to the extent that Beneficiary fails to turn over insurance proceeds, if any,
received by Beneficiary pursuant to Sections 10 and 11 with respect to the Trust
Property to Grantor, Grantor shall promptly repair, replace or rebuild any part
of the Trust Property that, following the date hereof, becomes damaged, worn or
dilapidated and Grantor shall complete and pay for any structure at any time in
the process of construction or repair on the Land. Notwithstanding anything to
the contrary contained herein, Grantor hereby confirms its obligation to comply
with all relevant Legal Requirements, including Environmental Laws, with respect
to the Trust Property. Grantor shall not initiate, join in, acquiesce in, or
consent to any change in any private restrictive covenant, zoning law or other
public or private restriction, limiting or defining the uses which may be made
of the Trust Property or any part thereof, unless Grantor shall have received
Beneficiary's prior written consent, such consent not to be unreasonably
withheld or delayed. If under applicable zoning provisions the use of all or
any portion of the Trust Property is or shall become a nonconforming use,
Grantor will not cause
-9-
such nonconforming use to be discontinued or abandoned without the express
written consent of Beneficiary, such consent not to be unreasonably withheld or
delayed. Grantor shall not (i) change the use of the Land in any material
respect or (ii) permit or suffer to occur any waste on or to the Trust Property
or to any portion thereof.
10. INSURANCE.
(a) Grantor shall maintain casualty, liability and other policies of
insurance relating to the Trust Property in form and substance, and with
insurers and coverages, reasonably satisfactory to Beneficiary and consistent
with insurance that it maintains on Similar Properties. Grantor shall keep the
Trust Property insured against loss by flood if the Trust Property is located in
an area identified by the Secretary of Housing and Urban Development as an area
having a special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Act of 1968 (or any successor act
thereto). All policies of insurance to be furnished hereunder (i) shall have
standard non-contributory mortgagee clauses attached to all policies in favor of
Beneficiary, without contribution, under a standard New York (or local
equivalent) mortgagee clause naming Beneficiary as the party to which all
payments made under such insurance policies in excess of $150,000 should be
paid, (ii) shall contain an endorsement providing that neither Grantor nor
Beneficiary nor any other party shall be a co-insurer under said policies and
shall contain a provision requiring that the coverage evidenced thereby shall
not be terminated or materially modified without ten (10) days prior written
notice to Beneficiary, (iii) shall provide that no act or thing done by Grantor
shall invalidate the policy as against Beneficiary, and (iv) with respect to
property insurance policies, shall contain a waiver of subrogation against
Beneficiary. Grantor shall deliver certificates evidencing additional and
renewal policies, together with evidence of payment of premiums thereon, to
Beneficiary, and in the case of all insurance about to expire, shall deliver
renewal policies or certificates evidencing such policies not less than ten (10)
days prior to their respective dates of expiration.
(b) Grantor shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained
hereunder unless Beneficiary is included thereon under a standard,
non-contributory mortgagee clause acceptable to Beneficiary. Grantor shall
promptly notify Beneficiary whenever any such separate insurance is taken out
and shall promptly deliver to Beneficiary the certificates evidencing the policy
or policies of such insurance.
(c) The insurance required by this Deed of Trust, at the option of
Grantor, may be effected by blanket and/or umbrella policies covering the Trust
Property and other properties, provided, however, that in each case, such
insurance policies otherwise comply with the provisions of this Deed of Trust
and allocate to the Trust Property, from time to time, the coverage specified in
this Deed of Trust without possibility of reduction or co-insurance by reason
of, or damage to, any other property named therein. If the insurance required
by this Deed of Trust shall be effected by any such blanket or umbrella
policies, Grantor shall furnish to Beneficiary certificates with respect to,
with schedules attached thereto showing the amount of the insurance provided
under such policies which is applicable to the Trust Property.
-10-
(d) If Grantor fails to maintain insurance in compliance with this
Section, Beneficiary may obtain such insurance and pay the premium therefor and
Grantor shall, on demand, reimburse Beneficiary for all expenses incurred in
connection therewith. Grantor shall deliver original certificates to Beneficiary
of all insurance policies maintained pursuant to this Section 10. Each property
insurance policy shall name Beneficiary as mortgagee, and loss payee with
respect to all casualty coverage and each liability policy shall name
Beneficiary as an additional insured thereunder.
11. CASUALTY. (a) Grantor shall give Beneficiary prompt notice of
any loss or damage to the Trust Property.
(b) In case of loss or damage to the Trust Property covered by any of
the insurance policies described in Section 10 above, Beneficiary (or, after a
trustee's sale or sheriff's sale under this Deed of Trust, the purchaser at such
sale) is hereby authorized at its option either (i) to settle and adjust any
claim under such insurance policies without the consent of Grantor or (ii) to
allow Grantor to settle and adjust such claim (either jointly with Beneficiary
or by Grantor alone, at Beneficiary's discretion); provided that in either case
Beneficiary shall, and is hereby authorized to, collect and receipt for any such
insurance proceeds. Notwithstanding anything in the preceding sentence to the
contrary, Beneficiary agrees that it will allow Grantor to settle and adjust any
claims under the insurance policies which are in an amount less than $150,000,
per incident of loss, up to an aggregate amount of no greater than $250,000.
The expenses incurred by Beneficiary in the adjustment and collection of
insurance proceeds shall be included in the Obligations, and shall be reimbursed
to Beneficiary upon demand or may be deducted by Beneficiary from said insurance
proceeds prior to another application thereof. Interest on such amount shall
accrue at the at the rate of thirteen and one-half percent (13.5%) per annum,
beginning ten (10) days after Grantor receives notice of a request for payment
of such amount from Beneficiary, until such amount, plus interest, is paid in
full.
(c) Beneficiary shall permit Grantor to apply the proceeds of
insurance policies received in connection with any casualty to pay for the cost
of restoring, repairing, replacing or rebuilding the loss or damage to the Trust
Property resulting from the casualty ("RESTORATION") if: (i) there is no Event
of Default hereunder at the time of such application; (ii) restoration can, in
the reasonable judgment of Beneficiary, be completed no later than two (2) years
prior to the maturity of the Obligations; and (iii) restoration can, in the
reasonable judgment of Beneficiary, be effected in such a manner so that the
Trust Property will be of at least equal or greater value to the value than the
Trust Property prior to such casualty. Otherwise, Beneficiary may elect in its
sole discretion to apply such proceeds either (x) towards payment of the
Obligations, notwithstanding the fact that the Obligations, or a portion
thereof, may not then be due and payable, or (y) to pay for the cost of
Restoration. In all events, disbursement of insurance proceeds by Beneficiary
(or at Beneficiary's election by a disbursing or escrow agent who shall be
selected by Beneficiary and whose fees shall be paid by Grantor), to pay the
cost of restoration shall require (i) evidence reasonably satisfactory to
Beneficiary of the estimated costs of Restoration, (ii) funds (or assurances
reasonably satisfactory to Beneficiary
-11-
that such funds are available) sufficient in addition to the proceeds of
insurance to complete and fully pay for Restoration; and (iii) such architect's
certificates, waivers of lien, contractor's sworn statements, title insurance
endorsements, plats of surveys and such other evidences of cost, payment and
performance as Beneficiary may reasonably require and approve. Except to the
extent Beneficiary fails to turn over insurance proceeds, if any, received by
Beneficiary hereunder with respect to such casualty to Grantor, Grantor hereby
covenants to restore, repair, replace or rebuild the Improvements, to be of at
least equal value, and of substantially the same character as prior to such loss
or damage, all to be effected in accordance with plans, specifications and
procedures to be first submitted to and reasonably approved by Beneficiary, and
Grantor shall pay all costs of such restoring, repairing, replacing or
rebuilding.
12. EMINENT DOMAIN. Grantor warrants, covenants and agrees that
should the Trust Property, or any part thereof or interest therein, be taken or
damaged by reason of any public improvement or condemnation proceeding, or in
any other manner, or should Grantor receive any notice of other information
regarding such proceeding, Grantor shall give written notice thereof within five
(5) business days to Beneficiary. Without Beneficiary's prior consent, Grantor
(1) shall not agree to any compensation or award, and (2) shall not take any
action or fail to take any action which would cause the compensation to be
determined. Beneficiary shall be entitled to: (1) all compensation awards and
other payments or relief therefor, (2) to commence, appear in and prosecute in
its own name any action or proceedings, and (3) to make any compromise or
settlement in connection with such taking or damage. Grantor authorizes
Beneficiary to collect and receive such awards and compensation, to give proper
receipts and acquittances therefor and in Beneficiary's discretion to apply the
same toward the payment of the Obligations, notwithstanding the fact that the
Obligations, or a portion thereof, may not then be due and payable, or to the
restoration of the Trust Property in accordance with the provisions set forth in
the penultimate sentence of Section 11(c) above. Grantor further agrees to make,
execute, and deliver to Beneficiary, at any time upon request, free and clear of
any encumbrance of any kind whatsoever, any and all further assignments and
other instruments deemed necessary by Beneficiary for the purpose of validly and
sufficiently assigning all compensations and awards made to Grantor for any
taking, either permanent or temporary, under any such proceeding.
13. RELEASE OF DEED OF TRUST. Beneficiary agrees to promptly and
unconditionally release this Deed of Trust as follows:
a. in the event of a bona fide sale (other than a "sale leaseback"
or other similar financing transaction) of the Trust Property to a third party
that is not affiliated with Grantor, provided that the following conditions are
satisfied: (i) neither Grantor nor any of its respective affiliates continue to
use or occupy the Trust Property or any part thereof; (ii) Grantor shall consult
with Beneficiary prior to such sale and shall obtain Beneficiary's prior written
consent with respect to such sale and the sales price (such consent not to be
unreasonably withheld); and (iii) all of the proceeds of such sale are applied
towards repayment of the Obligations, notwithstanding the fact that the
Obligations, or a portion thereof, may not then be due and payable.
-12-
b. in the event that Beneficiary is paid in full for all amounts
owing to Beneficiary by Grantor and any of its former affiliated debtors,
including the indefeasible payment in full of the Obligations, and no amount is
then owing by one or more of the foregoing to Beneficiary pursuant to the
Indenture, the Notes or any other Relevant Documents.
14. CHANGES IN THE LAWS REGARDING TAXATION. If any law is enacted or
adopted or amended after the date of this Deed of Trust which imposes a tax,
either directly or indirectly, on the Obligations or Beneficiary's interest in
the Trust Property, Grantor will pay such tax, with interest and penalties
thereon, if any, provided, however, that Grantor shall not be obligated to pay
any tax which is imposed on the net income of Beneficiary or franchise taxes or
doing business taxes imposed on Beneficiary. In the event that the payment of
such tax or interest and penalties by Grantor would be unlawful or taxable to
Beneficiary or unenforceable or provide the basis for a defense of usury, then
in any such event, Beneficiary shall have the option, by written notice of not
less than ninety (90) days, to declare the Obligations immediately due and
payable.
15. NO CREDITS ON ACCOUNT OF THE OBLIGATIONS. (i) Grantor will not
claim or demand or be entitled to any credit or credits on account of the
Obligations for any part of the Impositions assessed against the Trust Property,
or any part thereof, and (ii) no deduction shall otherwise be made or claimed
from the assessed value of the Trust Property, or any part hereof, for real
estate tax purposes by reason of this Deed of Trust or the Obligations if the
effect of such deduction would impose on Beneficiary a tax, either directly or
indirectly, for which it otherwise would not have been liable.
16. DOCUMENTARY STAMPS. If at any time the United States of America,
any State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Notes or this Deed of Trust, or impose any
other tax or charge on the same, Grantor will pay for the same, with interest
and penalties thereon, if any.
17. CONTROLLING AGREEMENT. It is expressly stipulated and agreed to
be the intent of Grantor and Beneficiary at all times to comply with applicable
state law or applicable United States federal law (to the extent that it permits
Beneficiary to contract for, charge, take, reserve, or receive a greater amount
of interest than under state law) and that this Section shall control every
other covenant and agreement in this Deed of Trust and the other Relevant
Documents. If the applicable law (state or federal) is ever judicially
interpreted so as to render usurious any amount called for under the Notes or
under any of the other Relevant Documents, or contracted for, charged, taken,
reserved, or received with respect to the Obligations, or if Beneficiary's
exercise of the option to accelerate the maturity of the Notes, or if any
prepayment by Grantor results in Grantor having paid any interest in excess of
that permitted by applicable law, then it is Grantor's and Beneficiary's express
intent that all excess amounts theretofore collected by Beneficiary shall be
credited on the principal balance of the Notes and all other Obligations (or, if
the Notes and all other Obligations have been or would thereby be paid in full,
refunded to Grantor), and the provisions of the Notes and the other Relevant
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and
-13-
thereunder reduced, without the necessity of the execution of any new documents,
so as to comply with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder or thereunder. All sums paid or
agreed to be paid to Beneficiary for the use, forbearance, or detention of the
Obligations shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the
Obligations until payment in full so that the rate or amount of interest on
account of the Obligations does not exceed the maximum rate of interest
permitted by law from time to time in effect and applicable to the Obligations
for so long as the Obligations are outstanding.
18. PERFORMANCE OF OTHER AGREEMENTS. Grantor shall observe and
perform in all respects the terms to be observed or performed by Grantor under
any agreement or recorded instrument affecting or pertaining to the Trust
Property.
19. RIGHT TO PERFORM THE OBLIGATIONS. Subject to the terms of the
Relevant Documents, if any default exists, Beneficiary shall have the right, but
not the obligation, to cure such default in the name and on behalf of Grantor.
All sums advanced and expenses incurred at any time by Beneficiary under this
Section 19, or otherwise under this Deed of Trust or any of the other Relevant
Documents or applicable law (including, without limitation, the costs and
expenses of Beneficiary and its agents incurred in connection with the
preservation, collection and enforcement of this Deed of Trust or of the liens
created hereby), shall bear interest from the date that such sum is advanced or
expense incurred, to and including the date of reimbursement, computed at the
rate of thirteen and one-half percent (13.5%) per annum, and all such sums,
together with interest thereon, shall constitute additions to the Obligations
and shall be secured by this Deed of Trust and Grantor covenants and agrees to
pay them to the order of the Beneficiary promptly upon demand.
20. FURTHER ACTS, ETC. Grantor will, at the cost of Grantor, and
without expense to Beneficiary, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, deeds of trust,
assignments, notices of assignment, Uniform Commercial Code financing statements
or continuation statements, 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
mortgaged, given, granted, bargained, sold, alienated, enfeoffed, conveyed,
confirmed, warranted, pledged, assigned and hypothecated (including, without
limitation, the assignment of leases and rents contained in Section 8 hereof) 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. Grantor, on demand,
will execute and deliver and, Grantor hereby authorizes Beneficiary to execute
in the name of Grantor or without the signature of Grantor to the extent
Beneficiary may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Beneficiary in the Trust Property. Notwithstanding anything to the
contrary contained herein, Grantor shall not be obligated to execute, deliver,
file or record any additional documents which increase Grantor's obligations
under this Deed of Trust or the Relevant
-14-
Documents. Grantor grants to Beneficiary an irrevocable power of attorney
coupled with an interest for the purpose of exercising the rights provided for
in Section 19 and this Section 20.
21. RECORDING OF DEED OF TRUST, ETC. Grantor forthwith upon the
execution and delivery of this Deed of Trust and thereafter, from time to time,
will cause this Deed of Trust, and any security instrument creating a lien or
security interest 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 publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Beneficiary in, the Trust Property. Grantor
will pay all filing, registration or recording fees, the costs and fees of local
counsel for Beneficiary including, without limitation, costs and fees for local
counsel review of this Deed of Trust and the Subordination Agreement
(hereinafter defined) and the preparation of opinion letters in connection
therewith, and all expenses incident to the preparation, execution and
acknowledgment of this Deed of Trust, any deed of trust or mortgage supplemental
hereto, any security instrument with respect to the Trust Property and any
instrument of further assurance, and all federal, state, county and municipal,
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of this Deed of Trust, any deed of trust or
mortgage supplemental hereto, any security instrument with respect to the Trust
Property or any instrument of further assurance (other than income or franchise
taxes imposed on Beneficiary), except where prohibited by law so to do. Grantor
shall hold harmless and indemnify Beneficiary, its successors and assigns,
against any liability incurred by reason of the imposition of any tax on the
making and recording of this Deed of Trust. Grantor shall pay all title costs
and premiums in connection with the ALTA lender's title insurance policy issued
by Chicago Title Insurance Company for the benefit of Beneficiary in connection
with this Deed of Trust (including payment for the cost of any property surveys
("Surveys") prepared in connection therewith), which title insurance policy
shall be in form and substance satisfactory to Beneficiary containing such
endorsements as Beneficiary may reasonably request, including, without
limitation, the deletion of any creditor's rights exception and (to the extent
available) a variable rate endorsement; survey endorsement; comprehensive
endorsement; first loss endorsement; last dollar endorsement; tie-in
endorsement; future advances endorsement; access coverage; tax parcel coverage;
contiguity (if applicable) coverage; and such other endorsements as Beneficiary
shall reasonably require. In the event that any Survey with respect to the
Trust Property reveals any encumbrances, restrictions, building code or zoning
violations or other matters which in Beneficiary's reasonable judgment
materially impair Beneficiary's security interest in the Trust Property, Grantor
agrees to cooperate with Beneficiary in performing any acts reasonably requested
by Beneficiary to cause such encumbrances, restrictions, violations or other
matters to be removed or remedied as appropriate.
22. REPORTING REQUIREMENTS. Grantor agrees to give prompt notice to
Beneficiary of the insolvency or bankruptcy filing of Grantor. In addition,
Grantor will give notice to Beneficiary in writing not later than ten (10) days
after: (i) the occurrence of any Event of Default with respect to Grantor
hereunder, or (ii) notice to Grantor of any action, litigation or proceeding
instituted to recover possession of the Trust Property from Grantor or for any
-15-
other purpose affecting this Deed of Trust or of any other action, litigation or
proceeding instituted against Grantor or judgment rendered against Grantor; and
such notice to Beneficiary shall include a true copy of any notice of default,
or if any action is then proceeding, copies of any pleadings and papers received
by Grantor.
23. EVENTS OF DEFAULT. The term "EVENT OF DEFAULT" as used herein
shall mean the occurrence or happening, at any time and from time to time, of
one or more of the following events:
(a) a default or event of default under any of the Notes or any of
the other Relevant Documents, which remains uncured following the expiration of
any applicable cure periods;
(b) Grantor (i) shall fail to perform when due any payment obligation
under the terms of this Deed of Trust within ten days after such amount becomes
due, or (ii) shall be in violation of any of the obligations or covenants
contained herein and such default shall continued unremedied for a period of
thirty (30) days, provided that if such default is not readily susceptible of
cure in such thirty (30) day period, and provided that Grantor proceeds in a
diligent manner to cure such default, Grantor shall have such additional time to
effect such cure as shall be reasonably necessary to effect such cure;
(c) Failure by Grantor to maintain insurance and deliver evidence
thereof pursuant to Section 10;
(d) a default under any other mortgage, deed of trust or other
security instrument covering the Trust Property or a portion thereof which
remains uncured following the expiration of any applicable cure periods; or
(e) the occurrence of an Event of Default under the Indenture.
24. REMEDIES. (a) Upon the occurrence of any Event of Default,
Beneficiary may take such action or cause Trustee to take such action permitted
in law or at equity, without notice or demand, as it deems advisable to protect
and enforce its rights against Grantor and in and to the Trust Property, by
Beneficiary itself, or through Trustee or otherwise, including, but not limited
to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Beneficiary may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Beneficiary:
(i) declare the entire principal amount of the indebtedness and
Obligations secured hereby with interest accrued thereon to be immediately
due and payable;
(ii) institute a proceeding or proceedings, judicial or nonjudicial, by
advertisement or otherwise, for the complete foreclosure of this Deed of
Trust in which case the Trust Property or any interest therein may be sold
for cash or upon credit in one or more
-16-
parcels or in several interests or portions and in any order or manner in
accordance with the laws of the jurisdiction in which such Trust Property
is located;
(iii) with or without entry, to the extent permitted, and pursuant to the
procedures provided by, applicable law, institute proceedings for the
foreclosure of this Deed of Trust for the Obligations then due and payable
subject to the continuing lien of this Deed of Trust, in accordance with
the laws of the jurisdiction in which such Trust Property is located, for
the balance of the Obligations not then due;
(iv) sell for cash or upon credit the Trust Property or any part thereof
and all estate, claim, demand, right, title and interest of Grantor therein
and rights of redemption thereof, pursuant to power of sale or otherwise,
at one or more sales, as an entirety or in parcels, at such time and place,
upon such terms and after such notice thereof as may be required or
permitted by the laws of the jurisdiction in which such Trust Property is
located;
(v) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein or in
the other Relevant Documents;
(vi) recover judgment on the Notes either before, during or after any
proceedings for the enforcement of this Deed of Trust;
(vii) prior to, concurrently with, or subsequent to the institution of
foreclosure proceedings, apply for the appointment of a trustee, receiver,
liquidator or conservator of the Trust Property, as a matter of strict
right, EX PARTE and without notice and without regard for the adequacy of
the security for the Obligations or the interest of the Grantor therein and
without regard for the solvency of the Grantor or of any person, firm or
other entity liable for the payment of the Obligations, and Grantor hereby
consents to such appointment;
(viii) prior to, concurrently with or subsequent to the institution of
foreclosure proceedings, enforce Beneficiary's interest in the Leases and
Rents and enter into or upon the Trust Property and take exclusive
possession thereof, either personally or by its agents, nominees or
attorneys and dispossess Grantor and its agents and servants therefrom, and
thereupon Beneficiary may (whether or not a receiver has been appointed) as
attorney-in-fact or agent of Grantor, or in its own name and under the
powers herein granted,(A) use, operate, manage, control, insure, maintain,
repair, restore and otherwise deal with all and every part of the Trust
Property and conduct the business thereat; (B) complete any construction on
the Trust Property in such manner and form as Beneficiary deems advisable;
(C) make alterations, additions, renewals, replacements and improvements to
or on the Trust Property; (D) exercise all rights and powers of Grantor
with respect to the Trust Property, whether in the name of Grantor or
otherwise (including, without limitation, the right to make, cancel,
enforce or modify Leases, obtain and evict tenants, and demand, xxx for,
collect and receive all earnings, revenues,
-17-
rents, issues, profits and other income of the Trust Property and every
part thereof); and (E) apply the receipts from the Trust Property to the
payment of the Obligations, after deducting therefrom all reasonable
expenses (including, without limitation, reasonable attorneys' fees)
incurred in connection with the aforesaid operations and all amounts
necessary to pay the taxes, assessments, insurance and other charges in
connection with the Trust Property, it being agreed that should Beneficiary
incur any liability, loss or damage in the defense of any claims or
demands, the amount thereof, including costs, expenses and reasonable
attorneys' fees shall be secured hereby, and Grantor shall reimburse
Beneficiary therefor immediately upon demand;
(ix) require Grantor to pay monthly in advance to Beneficiary, or any
receiver appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of any portion of the Trust Property
occupied by Grantor and require Grantor to vacate and surrender possession
to Beneficiary of the Trust Property or to such receiver and, in default
thereof, evict Grantor by summary proceedings or otherwise;
(x) sell the property under the Deed of Trust's power of sale or foreclose
this Deed of Trust as a mortgage; and
(xi) pursue such other rights and remedies as may be available under the
Relevant Documents or otherwise at law or in equity or under the Uniform
Commercial Code including the right to establish a lock box for all Rents
and other receivables of Grantor relating to the Trust Property.
In the event of a sale, by foreclosure or otherwise, of less than all of the
Trust Property, this Deed of Trust shall continue as a lien on the remaining
portions of the Trust Property.
The proceeds of any sale made under or by virtue of this Section 24,
together with any other sums which then may be held by Beneficiary under this
Deed of Trust, whether under the provisions of this Section or otherwise, shall
be applied by Beneficiary in the following order of priority: first, on account
of all reasonable costs and expenses incident to the foreclosure proceedings,
including all such items as are mentioned in this Section 24; second, all other
items which under the terms hereof constitute secured indebtedness, which are
any amounts due under this Deed of Trust, or under the other Relevant Documents;
third, any surplus to Grantor, its successors or assigns, as their rights may
appear.
(b) Upon any sale made under or by virtue of this Section 24, whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Beneficiary may
bid for and acquire the Trust Property or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
Obligations the net sales price after deducting therefrom the expenses of the
sale and costs of the action and any other sums which Beneficiary is authorized
to deduct under this Deed of Trust.
-18-
(c) No recovery of any judgment by Beneficiary and no levy of an
execution under any judgment upon the Trust Property or upon any other property
of Grantor shall affect in any manner or to any extent the lien of this Deed of
Trust upon the Trust Property or any part thereof, or any liens, rights, powers
or remedies of Beneficiary hereunder, but such liens, rights, powers and
remedies of Beneficiary shall continue unimpaired as before.
(d) Beneficiary may adjourn, terminate or rescind any proceeding or
other action brought in connection with its exercise of the remedies provided in
this Section 24 at any time before the conclusion thereof, as determined in
Beneficiary's sole discretion and without prejudice to Beneficiary.
(e) Beneficiary may resort to any remedies and the security given by
this Deed of Trust or the other Relevant Documents in whole or in part, and in
such portions and in such order as determined by Beneficiary's sole discretion.
No such action shall in any way be considered a waiver of any rights, benefits
or remedies evidenced or provided by this Deed of Trust or the other Relevant
Documents. The failure of Beneficiary to exercise any right, remedy or option
provided in this Deed of Trust or the other Relevant Documents shall not be
deemed a waiver of such right, remedy or option or of any covenant or obligation
secured by this Deed of Trust or the other Relevant Documents. Subject to the
provisions of the Relevant Documents, no acceptance by Beneficiary of any
payment after the occurrence of any Event of Default and no payment by
Beneficiary of any obligation for which Grantor is liable hereunder shall be
deemed to waive or cure any Event of Default with respect to Grantor, or
Grantor's liability to pay such obligation. No sale of all or any portion of
the Trust Property, no forbearance on the part of Beneficiary and no extension
of time for the payment of the whole or any portion of the Obligations or any
other indulgence given by Beneficiary to Grantor, shall operate to release or in
any manner affect the interest of Beneficiary in the remaining Trust Property or
the liability of Grantor to pay the Obligations. No waiver by Beneficiary shall
be effective, unless it is in writing and then only to the extent specifically
stated.
(f) The interests and rights of Beneficiary under this Deed of Trust
and the other Relevant Documents, and the liens and security interests created
and evidenced by this Deed of Trust and the other Relevant Documents, shall not
be impaired by any indulgence, including (i) any renewal, extension or
modification which Beneficiary may grant with respect to any of the Obligations,
(ii) any surrender, compromise, release, renewal, extension, exchange or
substitution which Beneficiary may grant with respect to the Trust Property or
any portion thereof; or (iii) any release or indulgence granted to any maker,
endorser, guarantor or surety of any of the Obligations.
(g) Upon the occurrence of any Event of Default under Section 23, in
any suit to foreclose the lien hereof or enforce any other remedy of Beneficiary
under this Deed of Trust, there shall be allowed and included as additional
indebtedness in the decree for sale or other judgment or decree all reasonable
expenditures and expenses which may be paid or incurred by or on behalf of
Beneficiary for attorneys' fees, appraiser's fees, outlays for documentary and
expert evidence, stenographers' charges, publication costs, and costs (which may
be estimated
-19-
as to items to be expended after entry of the decree) of procuring all such
abstracts of title, title searches and examinations, title insurance policies,
Torrens certificates, and similar data and assurances with respect to title as
Beneficiary may deem reasonably necessary either to prosecute such suit or to
evidence to bidders at any sale which may be had pursuant to such decree the
true condition of the title to or the value of the Trust Property. All such
reasonable expenditures and expenses which Beneficiary may incur as permitted by
this Section for the protection of the Trust Property and the maintenance of the
lien of this Deed of Trust, including, but not limited to, the fees and
out-of-pocket disbursements of any attorney employed by Beneficiary in any
litigation or proceeding affecting this Deed of Trust, including, but not
limited to, bankruptcy proceedings or preparations for the commencement or
defense of any proceeding or threatened suit or proceeding, shall be immediately
due and payable by Grantor and shall be secured by this Deed of Trust.
25. RIGHT OF ACCESS. Grantor shall permit agents, representatives
and employees of Beneficiary to (i) inspect the Trust Property or any part
thereof, provided that such inspection does not materially interfere with the
tenants of the Trust Property or violate the terms of any Lease, (ii) to examine
and make abstracts from any of Grantor's books and records and (iii) to discuss
the business, operations, properties and financial and other condition of
Grantor with officers of Grantor and with its independent certified public
accountants, at such reasonable times as may be requested by Beneficiary upon
reasonable advance notice.
26. SECURITY AGREEMENT. This Deed of Trust is both a real property
deed of trust and a "security agreement" within the meaning of the Uniform
Commercial Code. The Trust Property includes both real and personal property
and all other rights and interests, whether tangible or intangible in nature, of
Grantor in the Trust Property. Grantor by executing and delivering this Deed of
Trust has granted and hereby grants to Beneficiary, as security for the
Obligations, a security interest in the Trust Property to the full extent that
the Trust Property may be subject to the Uniform Commercial Code (said portion
of the Trust Property so subject to the Uniform Commercial Code being called in
this paragraph the "COLLATERAL"). Grantor hereby agrees with Beneficiary to
execute and deliver to Beneficiary, in form and substance satisfactory to
Beneficiary, such financing statements and such further assurances as
Beneficiary may from time to time, reasonably consider necessary to create,
perfect, and preserve Beneficiary's security interest herein granted. All or
part of the Trust Property is or is to become "fixtures" as defined in the
Uniform Commercial Code, and this Deed of Trust, upon being filed for record in
the real estate records of the city or county wherein such fixtures are
situated, shall also constitute a "fixture filing" for the purposes of the
Uniform Commercial Code upon such of the Trust Property that is or may become
fixtures. Information concerning the security interest herein granted may be
obtained from the parties at the addresses of the parties set forth in the first
paragraph of this Deed of Trust. Grantor's chief executive office and principal
place of business is the Grantor's address set forth in the first paragraph of
this Deed of Trust, and the place where Grantor's books and records in respect
of where the Trust Property is located are kept is the address of Grantor set
forth in the first paragraph of this Deed of Trust. If an Event of Default
shall occur which shall remain uncured, Beneficiary, in addition to any other
rights and remedies which it may have, shall have and may exercise immediately
-20-
and without demand, any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, (including, without limitation,
to the extent permitted by law, the right to take possession of the Collateral
or any part thereof, and to take such other measures as Beneficiary may deem
necessary for the care, protection and preservation of the Collateral). Upon
request or demand of Beneficiary or Trustee, Grantor shall at its expense
assemble the Collateral and make it available to Beneficiary at a convenient
place acceptable to Beneficiary. Grantor shall pay to Beneficiary on demand
therefor any and all reasonable expenses (including, without limitation,
reasonable legal expenses and attorneys' fees) incurred or paid by Beneficiary
in protecting the interest in the Collateral and in enforcing the rights
hereunder with respect to the Collateral. Any notice of sale, disposition or
other intended action by Beneficiary with respect to the Collateral sent to
Grantor at least ten (10) business days prior to such action or such notice as
is otherwise required by law or the Relevant Documents, shall constitute
commercially reasonable notice to Grantor. The proceeds of any disposition of
the Collateral, or any part thereof, may be applied by Beneficiary to the
payment of the Obligations in such priority and proportions as Beneficiary shall
determine in its sole discretion. In the event of any change in name, identity
or structure of Grantor, Grantor shall notify Beneficiary thereof and, promptly
after request, shall execute, file and record such Uniform Commercial Code forms
as are necessary to maintain the priority of Beneficiary's lien upon and
security interest in the Collateral, and shall pay all expenses and fees in
connection with the filing and recording thereof. If Beneficiary shall require
the filing or recording of additional Uniform Commercial Code forms or
continuation statements, Grantor shall, promptly after request, execute, file
and record such Uniform Commercial Code forms or continuation statements as
Beneficiary shall deem necessary, and shall pay all expenses and fees in
connection with the filing and recording thereof, it being understood and
agreed, however, that no such additional documents shall materially increase
Grantor's obligations under this Deed of Trust or the other Relevant Documents.
Grantor hereby irrevocably appoints Beneficiary as its attorney-in-fact, coupled
with an interest, to file with the appropriate public office on its behalf any
UCC financing statements (or related documents) signed only by Beneficiary, as
secured party, in connection with the Collateral covered by this Deed of Trust,
such appointment to terminate upon the release of this Deed of Trust.
27. ACTIONS AND PROCEEDINGS. Beneficiary has the right to appear in
and defend any action or proceeding brought with respect to the Trust Property
and to bring any action or proceeding, in the name and on behalf of Grantor,
which Beneficiary, in its reasonable discretion, decides should be brought to
protect its interest under this Deed of Trust or in the Trust Property. Subject
to the foregoing, Grantor shall appear in and contest any action or proceeding
purporting to affect the security hereof and shall pay all reasonable costs and
expenses including cost of evidence of title and attorney's fees, in any such
action or proceeding in which Beneficiary may appear. Beneficiary shall, at its
option, be subrogated to the lien of any mortgage or other security instrument
discharged in whole or in part by the Obligations, and any such subrogation
rights shall constitute additional security for the payment of the Obligations.
-21-
28. WAIVER OF SETOFF AND COUNTERCLAIM. Except as may be permitted
under the Relevant Documents, all amounts due under this Deed of Trust, the
Notes and the other Relevant Documents shall be payable without setoff or
counterclaim whatsoever.
29. LIENS. Grantor warrants, covenants and agrees to pay and
promptly discharge, at Grantor's cost and expense, all taxes, assessments and
governmental charges levied upon it, its income and assets as and when such
taxes, assessments and charges are due and payable (including, without
limitation, all Impositions), as well as all lawful claims for labor materials
and supplies or otherwise which could become a lien, and all liens, encumbrances
and charges upon the Trust Property, or any part thereof or interest therein;
provided that the existence of any mechanic's, laborer's, materialman's,
supplier's or vendor's lien or right thereto shall not constitute a violation of
this Section if payment is not yet due under the contract which is the
foundation thereof. Notwithstanding the foregoing, Grantor shall not be in
default for failure to pay or discharge Impositions or mechanic's or
materialman's or similar lien asserted against the Trust Property if, and so
long as, (a) Grantor shall have notified Beneficiary of same within seven (7)
days of obtaining knowledge thereof; (b) Grantor shall diligently and in good
faith contest the same by appropriate legal proceedings which shall operate to
prevent the enforcement or collection of the same and the sale of the Trust
Property or any part thereof, to satisfy the same; (c) unless funds are
otherwise reserved, Grantor shall furnish to Beneficiary such security as
Beneficiary may reasonably request to insure payment of such Impositions and to
secure and indemnify Beneficiary against any cost, expense, loss or damage in
connection with such contest or postponement of payment; (d) Grantor shall
timely upon final determination thereof pay the amount of any such Impositions,
claim, fine or penalty so determined, together with all costs, interest and
penalties which may be payable in connection therewith; (e) the failure to pay
the Impositions, or mechanic's or materialman's or similar lien claim does not
constitute a default under any other deed of trust, mortgage or security
interest covering or affecting any part of the Trust Property; and (f)
notwithstanding the foregoing, Grantor shall immediately upon request of
Beneficiary pay (and if Grantor shall fail so to do, Beneficiary may, but shall
not be required to, pay or cause to be discharged or bonded against) any such
Impositions, or claim notwithstanding such contest, if in the reasonable opinion
of Beneficiary, the Trust Property or any part thereof or interest therein may
be in imminent danger of being sold, forfeited, foreclosed, terminated, canceled
or lost.
30. RECOVERY OF SUMS REQUIRED TO BE PAID. Beneficiary shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Obligations as the same become due and owing, without
regard to whether or not the balance of the Obligations shall be due, and
without prejudice to the right of Beneficiary thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Grantor existing
at the time such earlier action was commenced.
31. MARSHALLING, WAIVER OF REDEMPTION AND OTHER MATTERS. Grantor
hereby waives, to the extent permitted by law, the benefit of all appraisement,
valuation, stay, extension, reinstatement, moratorium and redemption laws now or
hereafter in force and all rights of marshalling in the event of any sale
hereunder of the Trust Property or any part thereof
-22-
or any interest therein. Further, Grantor hereby expressly waives any and all
rights of redemption from sale under any order or decree of foreclosure of this
Deed of Trust on behalf of Grantor, and on behalf of each and every person
acquiring any interest in or title to the Trust Property subsequent to the date
of this Deed of Trust and on behalf of all persons to the extent permitted by
applicable law.
32. NOTICE. Any notice which either party hereto may desire or be
required to give to the other party shall be in writing and delivered by: (x) a
commercial courier or messenger service or (y) by U.S. registered or certified
mail with return receipt requested. Notice by commercial messenger or courier
service will be deemed to have been given on the day when delivered before 4:00
p.m. on a business day in the city in which notice is delivered, provided that
payment for the cost of delivery is not requested of the recipient. Notice by
mail shall be given by registered or certified U.S. Mail, return receipt
requested. Delivery of notice by commercial messenger or courier service or
mail shall be assumed if acceptance of delivery is refused. Notice may be given
by fax but will only be treated as delivered hereunder if: (x) sent between the
hours of 9:00 a.m. and 5:00 p.m. (based on local time at the destination); and
(y) receipt is acknowledged by fax and delivery will be deemed to have been
given on the date the fax acknowledgment is sent. Notices shall be delivered as
follows or at such other place as either party hereto may by notice in writing
given in accordance with this Section 32 designate:
To Grantor: Discovery Zone, Inc.
One Corporate Center
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: President
Telecopy Number: (000) 000-0000
To Beneficiary: State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Corporate Trust Department
Telecopy Number: (000) 000-0000
33. SOLE DISCRETION OF BENEFICIARY. Wherever pursuant to this Deed
of Trust, Beneficiary exercises any right given to it to approve or disapprove,
or any arrangement or term is to be satisfactory to Beneficiary, the decision of
Beneficiary to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Beneficiary
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
34. NON-WAIVER. The failure of Beneficiary to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Deed of Trust. Grantor shall not be relieved of Grantor's Obligations
hereunder by reason of (a) the failure of Beneficiary to comply with any request
of Grantor to take any action to foreclose this Deed of
-23-
Trust or otherwise enforce any of the provisions hereof or of the other Relevant
Documents, (b) the release, regardless of consideration, of the whole or any
part of the Trust Property, or of any person liable for the Obligations or any
portion thereof, or (c) any agreement or stipulation by Beneficiary extending
the time of payment or otherwise modifying or supplementing the terms of this
Deed of Trust or the other Relevant Documents. Beneficiary may resort for the
payment of the Obligations to any other security held by Beneficiary in such
order and manner as Beneficiary, in its discretion, may elect. Beneficiary may
take action to recover the Obligations, or any portion thereof, or to enforce
any covenant hereof without prejudice to the right of Beneficiary thereafter to
foreclosure this Deed of Trust. The rights and remedies of Beneficiary under
this Deed of Trust shall be separate, distinct and cumulative and none shall be
given effect to the exclusion of the others. No act of Beneficiary shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Beneficiary shall not be limited exclusively
to the rights and remedies herein stated but shall be entitled to every right
and remedy now or hereafter afforded at law or in equity.
35. NO ORAL CHANGE. This Deed of Trust and the other Relevant
Documents constitute the entire agreement among the parties pertaining to the
subject matter hereof and thereof and supersede all prior and contemporaneous
agreements, understanding, representations or other arrangements, whether
express or implied, written or oral, of the parties in connection herewith or
therewith except to the extent expressly incorporated or specifically referred
to herein or therein. This Deed of Trust, and any provisions hereof, may not be
modified, amended, waived, extended, changed, discharged or terminated orally or
by any act or failure to act on the part of Grantor or Beneficiary, but only by
an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
36. SUCCESSORS AND ASSIGNS. Subject to the provisions hereof
requiring Beneficiary's consent to any transfer of the Trust Property, this Deed
of Trust shall be binding upon and inure to the benefit of Grantor and
Beneficiary and their respective permitted successors and assigns forever.
37. SEVERABILITY. If any term, covenant or condition of this Deed of
Trust or the Relevant Documents is held to be invalid, illegal or unenforceable
in any respect, this Deed of Trust and any such other Relevant Document shall be
construed without such provision.
38. HEADINGS, ETC. The headings and captions of various paragraphs
of this Deed of Trust are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
39. DUPLICATE ORIGINALS. This Deed of Trust may be executed in any
number of duplicate originals and each such duplicate original shall be deemed
to be an original.
40. DEFINITIONS. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this Deed
of Trust may be used
-24-
interchangeably in singular or plural form and the word "Grantor" shall mean
"each Grantor and any subsequent owner or owners of the Trust Property or any
part thereof or any interest therein," the word "Beneficiary" shall mean
"Beneficiary and any subsequent holder(s) of the Notes," the word "person" shall
include an individual, corporation, partnership, trust, unincorporated
association, government, governmental authority, and any other entity, and the
words "Trust Property" shall include any portion of the Trust Property and any
interest therein and the words "attorneys' fees" shall include any and all
attorneys' fees, paralegal and law clerk fees (including, without limitation,
fees at the pre-trial, trial and appellate levels incurred or paid by
Beneficiary in protecting its interest in the Trust Property and Collateral and
enforcing its rights hereunder including, but not limited to, all such fees
incurred in connection with any bankruptcy or other insolvency proceedings).
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
41. HOMESTEAD. Grantor hereby waives and renounces all homestead and
exemption rights provided by the constitution and the laws of the United States
and of any state, in and to the Land as against the collection of the
Obligations, or any part hereof.
42. ASSIGNMENTS. Beneficiary shall have the right to assign or
transfer its rights under this Deed of Trust without limitation. Any
Beneficiary or transferee shall be entitled to all the benefits afforded
Beneficiary under this Deed of Trust.
43. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW EACH PARTY HERETO HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF
ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY
TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO
THE NOTES, THIS DEED OF TRUST, OR THE OTHER RELEVANT DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY SUCH PARTY, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. BENEFICIARY IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY GRANTOR.
44. CONSENT TO JURISDICTION. GRANTOR AND BENEFICIARY HERETO CONSENT
FOR THEMSELVES AND IN RESPECT OF THEIR PROPERTIES, GENERALLY, UNCONDITIONALLY
AND IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE
COURTS IN THE STATE OF NEW YORK WITH RESPECT TO ANY PROCEEDING RELATING TO ANY
MATTER, CLAIM OR DISPUTE ARISING UNDER THE RELEVANT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY. GRANTOR FURTHER CONSENTS, GENERALLY,
UNCONDITIONALLY AND IRREVOCABLY, TO THE NONEXCLUSIVE JURISDICTION OF THE STATE
AND FEDERAL COURTS OF THE STATE IN WHICH
-25-
ANY OF THE COLLATERAL IS LOCATED IN RESPECT OF ANY PROCEEDING RELATING TO ANY
MATTER, CLAIM OR DISPUTE ARISING WITH RESPECT TO SUCH COLLATERAL. GRANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS, GENERALLY,
UNCONDITIONALLY AND IRREVOCABLY, AT THE ADDRESSES SET FORTH IN THE FIRST
PARAGRAPH HEREOF IN CONNECTION WITH ANY OF THE AFORESAID PROCEEDINGS IN
ACCORDANCE WITH THE RULES APPLICABLE TO SUCH PROCEEDINGS. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW HAVE OR HAVE IN THE FUTURE TO THE LAYING OF VENUE IN RESPECT OF
ANY OF THE AFORESAID PROCEEDINGS BROUGHT IN THE COURTS REFERRED TO ABOVE AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF BENEFICIARY TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW OR TO COMMENCE PROCEEDINGS OR OTHERWISE PROCEED AGAINST
GRANTOR IN ANY JURISDICTION.
45. GOVERNING LAW. This Deed of Trust shall be governed by and
construed in accordance with the laws of the State of New York including,
without limitation, Section 5-1401 of the General Obligations Law, but otherwise
without regard to conflict of law principles; provided, however, that with
respect to the creation, attachment, perfection, priority and procedures
relating to the enforcement of the liens and security interests created by or
pursuant to this Deed of Trust and relating to real property, this Deed of Trust
shall be governed by and construed in accordance with the laws of the state in
which the Land is located.
46. LIEN ABSOLUTE, MULTI-SITE REAL ESTATE AND MULTIPLE COLLATERAL
TRANSACTION. Grantor acknowledges that this Deed of Trust and a number of other
Relevant Documents and those documents required by the Relevant Documents
together secure the Obligations. Grantor agrees that the lien of this Deed of
Trust and all obligations of the Grantor hereunder shall be absolute and
unconditional and shall not in any manner be affected or impaired by:
(a) any lack of validity or enforceability of the Notes or any other
Relevant Document, any agreement with respect to any of the Obligations or any
other agreement or instrument relating to any of the foregoing;
(b) any acceptance by Beneficiary of any security for or guarantees of any
of the indebtedness hereby secured;
(c) any failure, neglect or omission on the part of Beneficiary to realize
upon or protect any of the indebtedness hereby secured or any of the collateral
security therefor, including the Relevant Documents, or due to any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Grantor in respect of the Obligations hereby secured or any
collateral security therefor, including the Relevant Documents, or due to any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, the
-26-
Grantor in respect of the Obligations or this Deed of Trust (other than the
indefeasible payment in full in cash of all the Obligations hereby secured);
(d) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations;
(e) any release (except as to the property or obligation released), sale,
pledge, surrender, compromise, settlement, non-perfection, renewal extension,
indulgence, alteration, exchange, modification or disposition of any of the
Obligations hereby secured or of any of the collateral security therefor;
(f) any amendment or waiver of or any consent to any departure from the
Notes or any other Relevant Documents or of any guaranty thereof (except to the
extent of such amendment, waiver or consent in writing by Beneficiary), if any,
and Beneficiary may in its discretion foreclose, exercise any power of sale, or
exercise any other remedy available to it under any or all of the Relevant
Documents without first exercising or enforcing any of its rights and remedies
hereunder; and
(g) any exercise of the rights or remedies of Beneficiary hereunder or
under any or all of the Relevant Documents.
Grantor specifically consents and agrees that Beneficiary may exercise its
rights and remedies hereunder and under the other Relevant Documents separately
or concurrently and in any order that Beneficiary may deem appropriate.
47. FUTURE ADVANCES. This Deed of Trust shall secure not only
existing indebtedness, but also such future advances, whether such advances are
obligatory or are to be made at the option of Beneficiary, or otherwise, as are
made by Beneficiary to Grantor after the date hereof, to the same extent as if
such future advances were made on the date of the execution of this Deed of
Trust. Nothing in this Deed of Trust shall be deemed an obligation on the part
of the Beneficiary to make any future advances.
48. STATE SPECIFIC PROVISIONS. The provisions of Exhibit B are
hereby incorporated by reference as though set forth in full herein.
49. NO MERGER OF ESTATES. It is the intention and agreement of
Grantor and Beneficiary that there shall be no merger of any leasehold estate in
the Trust Property with the fee interest in the Trust Property or any other
estate or interest in the Trust Property, and there shall be no merger of this
Deed of Trust and any estate in the Trust Property, by reason of the fact that
the same person may own or hold (a) any leasehold interest in the Trust
Property, and/or (b) this Deed of Trust, and/or (c) the fee interest in the
Trust Property or any other estate or interest in the Trust Property.
-27-
50. CONCERNING THE TRUSTEE. Trustee shall be under no duty to take
any action hereunder except as expressly required hereunder or by law, or to
perform any act which would involve Trustee in any expense or liability or to
institute or defend any suit in respect hereof, unless properly indemnified to
Trustee's reasonable satisfaction. Trustee, by acceptance of this Deed of
Trust, covenants to perform and fulfill the trusts herein created, being liable,
however, only for willful negligence or misconduct.
51. TRUSTEE'S FEES. Grantor shall pay all reasonable costs, fees and
expenses incurred by Trustee and Trustee's agents and counsel in connection with
the performance by Trustee of Trustee's duties hereunder and all such costs,
fees and expenses shall be secured by this Deed of Trust. TRUSTEE SHALL BE
INDEMNIFIED, HELD HARMLESS AND REIMBURSED BY GRANTOR FOR ANY LIABILITY, DAMAGE
OR EXPENSE, INCLUDING REASONABLE ATTORNEYS' FEES AND AMOUNTS PAID IN SETTLEMENT,
WHICH TRUSTEE MAY INCUR OR SUSTAIN IN CONNECTION WITH THIS DEED OF TRUST OR IN
THE DOING OF ANY ACT WHICH TRUSTEE IS REQUIRED OR PERMITTED TO DO BY THE TERMS
HEREOF OR BY LAW (EXCEPT TO THE EXTENT ARISING FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF TRUSTEE), AND SHALL BE REIMBURSED THEREFOR UPON DEMAND.
52. SUBORDINATION. Notwithstanding anything to the contrary
contained herein, this Deed of Trust shall be subject and subordinate to that
certain amended and restated deed of trust, assignment of leases and rents,
security agreement and fixture filing, dated as of the date hereof, made by
Grantor in favor of XxXxxxxx'x Corporation, including any extension,
modification, replacement or renewal thereof, in accordance with the provisions
of that certain Subordination Agreement, dated as of the date hereof, by and
among Grantor, Beneficiary and XxXxxxxx'x Corporation (the "SUBORDINATION
AGREEMENT"), including any extension, modification, replacement or renewal
thereof.
53. GOOD STANDING. Grantor is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization. Grantor
is qualified to do business and in good standing in the State in which the
Trust Property is located, and to the extent that Grantor is not so qualified
or in good standing in such State, Grantor shall promptly qualify to do
business and become in good standing in such State and shall promptly present
evidence of such qualification to do business and good standing to
Beneficiary, and shall in any event take such steps as are necessary to
insure the enforceability of the Notes and this Deed of Trust.
-28-
Grantor has executed this instrument as of the day and year first
above written.
GRANTOR:
DISCOVERY ZONE, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Its: Senior Vice President
STATE OF NEW YORK )
COUNTY OF WESTCHESTER )
This instrument was acknowledged before me this 28th day of July,
1997, by Xxxxxx X. Xxxxxx, as Senior Vice President of Discovery Zone, Inc., a
Delaware corporation, on behalf of said corporation.
WITNESS my hand and official seal.
My Commission Expires:
/s/ Xxxx X. Xxxxxxxx
--------------- -----------------------------
Notary Public
[Xxxx X. Xxxxxxxx]
[Notary Public State of New York]
[Notary Seal]
EXHIBIT A
---------
LEGAL DESCRIPTION
XXX 0, XXXXX 0,
XXXXXXX SUBDIVISION FILING XX. 0,
XXXXXX XX XXXXXXX
XXXXX XX XXXXXXXX
XXXXXXX X
STATE SPECIFIC PROVISIONS
The following provisions are incorporated by reference into
Section 24 of the attached Deed of Trust. If any conflict or inconsistency
exists between this Exhibit B and the remainder of the attached Deed of Trust,
this Exhibit B shall govern.
A. SPECIAL FORECLOSURE PROVISIONS. Notwithstanding anything to the
contrary contained in Section 24 hereof, Beneficiary may foreclose this Deed of
Trust either by judicial action or through Trustee. Foreclosure through Trustee
will be initiated by Beneficiary's filing of its notice of election and demand
for sale with Trustee. Upon the filing of such notice of election and demand
for sale, Trustee shall promptly comply with all notice and other requirements
of the laws of Colorado then in force with respect to such sales, and shall give
four weeks' public notice of the time and place of such sale by advertisement
weekly in some newspaper of general circulation then published in the county or
city and county in which the Land is located. Any sale conducted by Trustee
pursuant to this paragraph shall be held at the front door of the county
courthouse for such county or city and county, or on the Land, or at such other
place as similar sales are then customarily held in such county or city and
county, provided that the actual place of sale shall be specified in the notice
of sale. In any such sale, it shall and may be lawful for the Trustee to sell
and dispose of the Trust Property en masse or in separate parcels, as the
Trustee may think best.
All fees, costs and expenses of any kind incurred by Beneficiary
in connection with foreclosure of this Deed of Trust, including, without
limitation, the costs of any appraisals of the Land obtained by Beneficiary, all
costs of any receivership for the Land advanced by Beneficiary, all costs of any
environmental audits or tests incurred by Beneficiary and all attorneys' and
consultants' fees incurred by Beneficiary, shall constitute a part of the
Obligations and may be included as part of the amount owing from Grantor to
Beneficiary at any foreclosure sale. The proceeds of any sale under this
paragraph shall be applied first to the fees and expenses of the officer
conducting the sale, and then as set forth in Section 24(a) of this Deed of
Trust. At the conclusion of any foreclosure sale, the officer conducting the
sale shall execute and deliver to the purchaser at the sale a certificate of
purchase which shall describe the property sold to such purchaser and shall
state that upon the expiration of the applicable periods for redemption, the
holder of such certificate will be entitled to a deed to the property described
in the certificate. After the expiration of all applicable periods of
redemption, unless the property sold has been redeemed by Grantor, the officer
who conducted such sale shall, upon request, execute and deliver an appropriate
deed to the holder of the certificate of purchase or the last certificate of
redemption, as the case may be. Nothing in this paragraph dealing with
foreclosure procedures or specifying
B-1
particular actions to be taken by Beneficiary or by Trustee or any similar
officer shall be deemed to contradict or add to the requirements and procedures
now or hereafter specified by Colorado law, and any such inconsistency shall be
resolved in favor of Colorado law applicable at the time of foreclosure.
B. NON-AGRICULTURAL USE. The Land encumbered by this Deed of Trust
is not used principally or primarily for agricultural or farming purposes.
B-2
