DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING 777 SOUTH FIG, LLC, Trustor to NEW YORK LIFE INSURANCE COMPANY, Beneficiary and Chicago Title Insurance Company Trustee Dated as of: August 23, 2004 Premises: 777...
RECORDING
REQUESTED BY AND WHEN
RECORDED MAIL TO:
Xxxxx
& Xxxxx LLP
000
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxx X. Xxxxxxxxxxxx, Esq.
Loan No.
372-8499 and 372-8501
DEED OF
TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY
AGREEMENT AND FIXTURE FILING
777 SOUTH
FIG, LLC,
Trustor
to
NEW YORK
LIFE INSURANCE COMPANY,
Beneficiary
and
Chicago
Title Insurance Company
Trustee
Dated as
of: August 23, 2004
Premises:
777 Tower
000 Xxxxx
Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
TABLE OF
CONTENTS
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING |
1 |
GRANTING CLAUSES |
1 |
DEFINITIONS |
4 |
ARTICLE I COVENANTS AND AGREEMENTS |
10 |
1.01 Payment, Performance and Security |
10 |
l.02 Payment of Taxes, Assessments, etc |
10 |
A. Impositions |
10 |
B. Installments |
11 |
C. Receipts |
11 |
D. Evidence of Payment |
11 |
E. Payment by Beneficiary |
11 |
F. Change in Law |
11 |
G. Joint Assessment |
12 |
H. Permitted Contests |
12 |
I. No Lease Default |
13 |
1.03 All Risk Insurance |
13 |
A. Special Form Coverage |
13 |
B. Additional Coverage |
13 |
C. Separate Insurance |
14 |
D. Insurers; Policies |
14 |
E. Beneficiary's Right to Secure Coverage |
14 |
F. Damage or Destruction |
15 |
G. Transfer of Interest in Policies |
15 |
H. Trustor's Use of Proceeds |
16 |
1.04 Escrow Payments |
18 |
i
1.05 Care and Use of the Premises ...... |
18 |
A. Maintenance and Repairs |
19 |
B. Standard of Repairs |
19 |
C. Removal of Equipment |
19 |
D. Compliance With Laws and Insurance |
19 |
E. Hazardous Materials |
19 |
F. Compliance With Instruments of Record |
22 |
G. Alteration of Secured Property |
22 |
H. Parking |
22 |
I. Entry on Secured Property |
23 |
J. No Consent to Alterations or Repairs |
23 |
K. Preservation of Lien; Mechanic's Liens |
23 |
L. Use of Secured Property by Trustor |
23 |
M. Use of Secured Property by Public |
23 |
N. Management |
23 |
O. Permitted Contests |
24 |
1.06 Financial Information |
24 |
A. Financial Statements |
24 |
B. Right to Inspect Books and Records |
25 |
1.07 Condemnation |
25 |
A. Beneficiary's Right to Participate in Proceedings |
25 |
B. Application of Condemnation Award |
25 |
C. Reimbursement of Costs |
27 |
D. Existing Obligations |
27 |
1.08 Leases |
27 |
A. Performance of Lessor's Covenants |
27 |
B. Notice of Default |
28 |
C. Representations Regarding Leases |
28 |
D. Covenants Regarding Leases |
28 |
E. Application of Rents |
30 |
F. Indemnity Against Unapproved Lease Modifications and |
|
Amendments |
30 |
1.09 Assignment of Leases, Rents, Income, Profits and Cash Collateral |
30 |
Assignment; Discharge of Obligations |
31 |
A. Entry Onto Secured Property; Lease of Secured Property |
31 |
B. License to Manage Secured Property |
31 |
C. Delivery y of Assignments |
32 |
D. Indemnity |
3 2 |
ii
1.10. Further Assurances |
32 |
A. General; Appointment of Attorney-in-Fact |
32 |
B. Statement Regarding Obligations |
33 |
C. Additional Security Instruments |
33 |
D. Security Agreement |
33 |
E. Preservation of Trustor's Existence |
34 |
F. Further Indemnities |
35 |
G. Absence of Insurance |
35 |
H. Lost Note |
36 |
l.11 Transfer or Further Encumbrances |
36 |
A. Continuing Ownership and Management |
36 |
B. Transfer or Encumbrance of Secured Property |
36 |
C. Acceleration of Obligations |
37 |
1.12 Expenses |
37 |
ARTICLE II REPRESENTATIONS AND WARRANTIES |
40 |
2.01 Warranty of Title |
40 |
2.02 Ownership of Additional or Replacement Improvements and Personal Property |
41 |
2.03 No Pending Material Litigation or Proceeding; No Hazardous Materials |
41 |
A. Proceedings Affecting Trustor |
41 |
B. Proceedings Affecting Secured Property |
41 |
C. No Hazardous Material |
41 |
D. No Litigation Regarding Hazardous Material |
42 |
2.04 Valid Organization, Good Standing and Qualification of Trustor; Other Organizational Information |
42 |
2.05 Authorization; No Legal Restrictions on Performance |
43 |
2.06 Compliance With Laws |
43 |
iii
2.07 Tax Status |
43 |
2.08 Absence of Foreign or Enemy Status; Foreign Corrupt Practices Act |
44 |
|
|
2.09 Federal Reserve Board Regulations |
44 |
2.10 Investment Company Act and Public Utility Holding Company Act |
44 |
2.11 Exempt Status of Transactions Under Securities Act and Representations Relating Thereto |
44 |
2.12 ERISA Compliance |
44 |
2.13 Reciprocal Easement Agreement |
45 |
ARTICLE III DEFAULTS |
45 |
3.01 Events of Default .. |
45 |
ARTICLE IV REMEDIES |
47 |
4.01 Acceleration, Foreclosure, etc |
47 |
A. Foreclosure |
47 |
B. Partial Foreclosure |
48 |
C. Entry |
48 |
D. Collection of Rents, etc |
49 |
E. Receivership |
49 |
F. Specific Performance |
49 |
G. Recovery of Sums Required to be Paid |
49 |
H. Other Remedies |
50 |
I. Power of Sale |
50 |
4.02 No Election of Remedies |
52 |
4.03 Beneficiary's Right to Release, etc |
53 |
4.04 Beneficiary's Right to Remedy Defaults, etc |
53 |
4.05 Waivers |
54 |
4.06 Prepayment |
54 |
ARTICLE V MISCELLANEOUS |
55 |
5.01 Non-Waiver |
55 |
5.02 Sole Discretion of Beneficiary |
56 |
iv
5.03 Recovery of Sums Required to Be Paid |
56 |
5.04 Legal Tender |
56 |
5.05 No Merger or Termination |
56 |
5.06 Discontinuance of Actions |
57 |
5.07 Headings |
57 |
5.08 Notice to Parties |
57 |
5.09 Successors and Assigns Included In Parties |
58 |
5.10 Changes and Modifications |
58 |
5.11 Applicable Law |
58 |
5.12 Invalid Provisions to Affect No Others |
58 |
5.13 Usury Savings Clause |
58 |
5.14 No Statute of Limitations |
59 |
5.15 Late Charges |
59 |
5.16 Waiver of Jury Trial |
59 |
5.17 Continuing Effectiveness |
59 |
5.18 Time of Essence |
59 |
5.19 Non-Recourse |
59 |
5.20 Non-Business Days |
60 |
5.21 Joinder of Spouse |
61 |
5.22 Request for Notice |
61 |
5.23 Fixture Filing |
61 |
5.24 Provisions as to trustee; Trustee's Appointment |
61 |
5.25 Payment and Servicing Agent |
61 |
5.26 Exculpation |
61 |
v
DEED OF
TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY
AGREEMENT AND FIXTURE FILING
DEED OF
TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
("Deed
of Trust"), dated as
of August 23, 2004, by and among 777 SOUTH FIG, LLC ("Trustor"), a
Delaware limited liability company, having an office at c/o Commonwealth
Partners, 000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
NEW
YORK LIFE
INSURANCE COMPANY ("Beneficiary"), a New
York mutual insurance company, having an office at 00 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, as payment and servicing agent for itself and the other
Note Holders (as defined below), and Chicago
Title Insurance Company, having an
office at ("Trustee").
Trustor
has executed and delivered to Beneficiary a Promissory Note dated as of even
date herewith, payable to the order of Beneficiary in the original principal sum
of Ninety-Nine Million Dollars ($99,000,000.00), and has executed and delivered
to Massachusetts Mutual Life Insurance Company, a Massachusetts corporation
("MassMutual"), a
Promissory Note dated as of even date herewith, payable to the order of Mass
Mutual in the original principal sum of Fifty-Six Million Dollars
($56,000.000.00) (said Promissory Notes, as the same may hereafter be amended,
modified consolidated or extended, collectively, the "Note") in each
case in lawful money of the United States of America. Beneficiary and MassMutual
are collectively referred to herein as the "Note
Holders". The Note
is secured by this Deed of Trust and the terms, covenants and conditions of the
Note are hereby incorporated herein and made a part hereof.
Trustor
and Beneficiary have entered into that certain letter agreement of even date
herewith (the "Letter
Agreement"),
pertaining to certain rights which, as set forth in the Letter Agreement, are
personal to the Trustor including, among other matters, casualty and liability
insurance with respect to the Secured Property, sales or transfers of the
Secured Property and transfers of ownership interests in Trustor.
In
consideration of the sum of Ten Dollars ($10.00) paid and other good and lawful
consideration, the receipt and sufficiency of which are hereby acknowledged and
in order to secure the Obligations (as hereinafter defined), Trustor hereby
mortgages, grants, assigns, releases, transfers, pledges and sets over to unto
Trustee, in trust for Beneficiary, on behalf of the Note Holders, with power of
sale, and right of entry and possession to the extent provided herein or by law,
and confirms that this Deed of Trust constitutes a valid first lien upon all of
Trustor's right, title and interest in the following property whether now owned
or hereafter acquired:
GRANTING
CLAUSE ONE
All that
tract or parcel of land ("Land") more particularly described in Schedule
A hereto.
GRANTING CLAUSE TWO
All
buildings, structures and improvements (collectively, "Improvements") now or
hereafter located on the Land, including all machinery, apparatus, equipment and
fixtures attached to, or used or procured for use in connection with the
operation or maintenance of, any
7
Improvement,
all refrigerators, shades, awnings, venetian blinds, screens, screen doors,
storm doors, storm windows, stoves, ranges, curtain fixtures, partitions,
attached floor coverings and fixtures, apparatus, equipment or articles used to
supply sprinkler protection and waste removal, laundry equipment, furniture,
furnishings, appliances, office equipment, elevators, escalators, dynamos,
motors, generators, switchboards, communication equipment, electrical equipment,
television and radio systems, heating, plumbing, lifting and ventilating
apparatus, air-cooling and air conditioning apparatus, gas and electric
fixtures, fittings and machinery, xxxxx, tanks, pipes (whether located above or
below the surface of the Land) and all other personal property and equipment of
every kind and description, excluding trade fixtures and personal property of
any Lessee (as hereinafter defined), unless such trade fixtures or personal
property become the property of Trustor upon expiration or termination of the
term of the Lease in question, and all accessions, renewals and replacements
thereof and all articles in substitution therefor. Whether or not any of the
foregoing are attached to the Land or any of the Improvements in any manner, all
such items shall be deemed to be fixtures, part of the real estate and security
for the Obligations. The Land and Improvements are herein collectively called
"Premises". To the
extent any of the Improvements are not deemed real estate under the laws of the
State, they shall be deemed personal property and this grant shall include all
of Trustor's right, title and interest in, under and to such personal property
and all other personal property now or hereafter attached to or located upon the
Premises or used or useable in the management, maintenance or operation of the
Improvements or the activities conducted on the Premises, including all computer
hardware and software, but excluding trade fixtures and personal property of any
Lessee, unless such personal property becomes the property of Trustor upon
expiration or termination of the Lease in question, and all accessions, renewals
and replacements thereof and all articles in substitution therefor
(collectively, "Personal
Property") and this
Deed of Trust is and shall be deemed to be a Security Agreement for the purposes
of creating hereby a security interest under the Uniform Commercial Code of the
State of California in Beneficiary as Secured Party (on behalf of the Note
Holders) in the Personal Property as hereinafter provided.
GRANTING
CLAUSE THREE
All now
or hereafter existing easements and rights-of-way and all right, title and
interest of Trustor, in and to any land lying within the right-of-way of any
street, opened or proposed, adjoining the Premises, any and all sidewalks,
alleys and strips and gores of land, streets, ways, passages, sewer rights,
waters, water courses, water rights and powers, estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments, air rights,
development rights, covenants, conditions, restrictions, credits and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to, or above or below the Premises, whether now or hereafter
existing.
GRANTING
CLAUSE FOUR
All
intangible rights, interests and properties of Trustor relating to the Premises
or any part thereof, and necessary or desirable for the continued ownership,
use, operation, leasing or management thereof, whether now or hereafter
existing, including any trademarks, servicemarks, logos or trade names relating
to the Premises or by which the Premises or any part thereof may be known and
any other franchises or other agreements relating to services in connection
with
8
the use,
occupancy, or maintenance of the Premises, instruments, actions or rights in
action and all intangible property and rights relating to the
Premises.
GRANTING
CLAUSE FIVE
All
accounts receivable, insurance policies, contract rights, interests, rights
under all oil, gas and mineral leases and agreements and all benefits arising
therefrom, and all other claims, both at law and in equity, relating to the
Premises, which Trustor now has or may hereafter acquire.
GRANTING
CLAUSE SIX
All
estate, interest, right, title and other claim or demand which Trustor now has
or may hereafter acquire in any and all awards or payments relating to the
taking by eminent domain, or by any proceeding or purchase in lieu thereof, of
the whole or any part of the Premises, including all awards resulting from a
change of grade of any street and awards for severance damages, together, in all
cases, with all interest thereon.
GRANTING
CLAUSE SEVEN
All
proceeds of, and any unearned premiums on, insurance policies covering all or
any part of the Premises, including the right to receive and apply the proceeds
of all insurance or judgments related to the Premises, or settlements made in
lieu thereof.
GRANTING
CLAUSE EIGHT
All
estate, interest, right, title and other claim or demand which Trustor now has
or may hereafter acquire against anyone with respect to any damage to all or any
part of the Premises, including damage arising or resulting from any defect in
or with respect to the design or construction of all or any part of the
Improvements.
GRANTING
CLAUSE NINE
All
deposits or other security or advance payments, including rental payments, made
by or on behalf of Trustor to others in connection with the Obligations or the
ownership or operation of all or any part of the Premises, including any such
deposits or payments made with respect to (a) Impositions (as hereinafter
defined), (b) insurance policies, (c) utility service, (d) cleaning,
maintenance, repair or similar services, (e) refuse removal or sewer service,
(f) rental of equipment, if any, used by or on behalf of Trustor, and (g)
parking or similar services or rights.
GRANTING
CLAUSE TEN
All
remainders, reversions or other estates in the Premises or any part
thereof. GRANTING
CLAUSE ELEVEN
9
All
management contracts, permits, certificates, licenses, approvals, contracts,
entitlements and authorizations, however characterized, now or hereafter issued
or in any way furnished for the acquisition, construction, development,
operation and use of the Land, the Improvements or the Leases, including
building permits, environmental certificates, licenses, certificates of
operation or occupancy, warranties and guaranties, except, in each case, to the
extent that such mortgage, grant, assignment, transfer or pledge is restricted
by the terms of such management contract, permit, certificate, license,
approval, contract, entitlement or authorization and such restriction is
enforceable under applicable law.
GRANTING
CLAUSE TWELVE
All
right, title and interest of Trustor in and to all easements, roads, streets,
ways, sidewalks, alleys, passages, sewer rights, other utility rights,
encroachment rights, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments, air rights, and appurtenances of any nature
whatsoever, in any way belonging, relating or pertaining to, or arising under
that certain Amended and Restated Owners' Operating and Reciprocal Easement
Agreement (the "Reciprocal
Easement Agreement") by and
among Seventh Street Plaza Associates, the Community Redevelopment Agency of the
City of Los Angeles, California and PPLA Plaza Limited Partnership dated as of
June 20, 1986, and recorded in the Official Records of the Recorder's Office,
Los Angeles County, California on June 4, 1987 as instrument number 87-885291,
as amended by an amendment thereto dated as of December 5, 1990 and recorded in
the Official Records of the Recorder's Office, Los Angeles County, California on
December 21, 1990 as instrument number 00-0000000, and by an amendment thereto
dated as of January 1, 1993 and recorded in the Official Records of the
Recorder's Office, Los Angeles County, California on January 30, 1995 as
instrument number 95-150496 whether now or hereafter existing.
GRANTING
CLAUSE THIRTEEN
All
proceeds, products, replacements, additions, substitutions, renewals and
accessions of any of the foregoing, including personal property acquired with
cash proceeds.
DEFINITIONS
AND INTERPRETATION
As used
in this Deed of Trust, the following terms shall have the meanings specified
below:
"Assignment" shall
mean the Assignment of Leases, Rents, Income and Cash Collateral, dated as of
the date hereof, from Trustor, as assignor, to Beneficiary, as assignee (on
behalf of the Note Holders).
"Beneficiary's
Architect" shall
mean a licensed architect or registered engineer approved by Beneficiary and may
include Trustor's architect, if reasonably approved by Beneficiary.
"CalPERS" shall
mean the California Public Employees Retirement System.
10
"Code" shall
mean the Uniform Commercial Code of the State.
"CommonWealth
Pacific" shall
mean CommonWealth Pacific, LLC, a Delaware limited liability
company.
"Condemnation
Proceedings" shall
have the meaning set forth in Section
1.07A.
"Debt
Coverage Ratio" shall
mean, for any period, a fraction, the numerator of which shall equal the
projected net operating income of the Premises for such period, and the
denominator of which shall equal the aggregate of the principal and interest for
such period with respect to the indebtedness due pursuant to the Note (provided,
however, that such denominator shall not include the principal payment due in
respect of the Loan on the Maturity Date).
"Environmental
Claim" shall
mean any asserted claim or demand, of any kind or nature, by any Person, for any
actual or alleged Environmental Damage, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute, ordinance or
regulation, common law or otherwise.
"Environmental
Damage" shall
mean any and all claims, judgments, damages (including punitive damages and
consequential damages (other than lost opportunity costs arising from or related
to properties other than the Secured Property)), losses, penalties, interest,
fines, liabilities (including strict liability), obligations, responsibilities,
encumbrances, liens, costs and expenses, of whatever kind or nature, contingent
or otherwise, matured or unmatured, foreseeable or unforeseeable, including
attorneys', experts' and consultants' fees and disbursements,
including:
(a) |
those
relating to any investigation, defense or settlement of any claim, suit,
administrative proceeding or investigation of any kind or any directive of
any Governmental Agency (as hereinafter defined) related to Environmental
Claims or Environmental Requirements arising from or related to the
Secured Property; |
(b) |
those
relating to damages for personal injury, or injury to property including
natural resources, occurring in, on, under or about the Secured Property
arising from or related to Environmental Claims or Environmental Damages,
including lost profits and the cost of demolition and rebuilding of any
improvements on real property; |
(c) |
diminution
in the value of the Secured Property arising from or related to
Environmental Claims or Environmental Damages, and damages for the loss,
or restriction on the use or adverse impact on the marketing, of the
Secured Property or any part thereof arising from or related to
Environmental Claims or Environmental
Damages; |
11
(d) |
loss
of the priority of the lien of this Deed of Trust due to the imposition of
a lien against the Secured Property arising from or related to
Environmental Claims or Environmental Damages;
and |
(e) those
incurred in connection with the investigation, cleanup,
remediation,
removal, abatement, containment, closure, restoration, monitoring work or other
cure of any violation of an Environmental Requirement required by any
Governmental Agency arising from or related to the Secured Property or
reasonably necessary to make full economic use of the Secured Property or in
connection with any other property, including the performance of any
pre-remedial studies and investigations and post remedial monitoring and cure,
or any action to prevent a Release or threat of Release or to minimize the
further Release of any Hazardous Material so it does not migrate or endanger or
threaten to endanger public health or the environment.
"Environmental
Requirements" shall
mean any and all Legal Requirements (as hereinafter defined) relating to the
protection of the environment, health or safety, including:
(a) |
all
Legal Requirements pertaining to reporting, licensing, permitting,
investigation, remediation or removal of, or pertaining to Releases or
threatened Releases of, Hazardous Materials, chemical substances,
pollutants, contaminants or hazardous or toxic substances, materials or
wastes, whether solid, liquid or gaseous in nature, including Releases or
threatened Releases into the air, soil, surface water, ground water or
land; |
(b) |
all
Legal Requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, chemical substances, pollutants, contaminants or
hazardous or toxic substances, materials or wastes, whether solid, liquid
or gaseous in nature; and |
(c) all Legal
Requirements pertaining to the protection of the health and safety of employees
or the public.
"Environmental
Site Assessment" shall
mean that certain Phase I Environmental Site Assessment 777 Tower, 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx dated March 4, 2004, performed by URS
Corporation Americas as job number 29403093.10000.
"ERISA" shall
have the meaning set forth in Section
2.12.
"Event
of Default" shall
have the meaning set forth in Section
3.01.
00
"Xxxxx
Xxxxxx Properties" shall
mean Fifth Street Properties, LLC, a Delaware limited liability
company.
"Governmental
Agency" shall
mean any government, quasi-governmental or government
sponsored enterprise, legislative body, commission, board, regulatory authority,
bureau, administrative or other agency, court, arbitrator, grand jury or any
other public body or entity or instrumentality, whether domestic, foreign,
federal, state, county or municipal.
"Guaranty" shall
mean that certain Guaranty of even date herewith executed by Fifth Street
Properties in favor of the Note Holders.
"Hazardous
Materials" shall
mean any substance (other than deminimus amounts used in the
ordinary course of operating the Secured Property that are properly stored in
compliance with all
applicable Legal Requirements):
(a) |
the
presence of which requires notification, investigation or remediation
under any Environmental Requirement; |
(b) which is
or becomes designated, defined, classified or regulated as
"hazardous",
"toxic", "noxious", "waste", "pollutant", "contaminant"
or other similar term, or which requires remediation or is
regulated under any present or future Environmental Requirement, including the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
Section 9601 et
seq.), Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), Federal Clean Air Act (42 U.S.C. Section 7401 et seq.), Federal
Hazardous Materials Transportation Act (49 U.S.C. Section 5101 et seq.),
Federal Clean Water Act (33 U.S.C. Section
1251 et seq.),
Federal Environmental Pesticide Control Act (7
U.S.C. Section 136 et seq.),
Federal Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.),
Federal Safe Drinking Water Act (42
U.S.C. Sections 300(f), et seq.),
(vii) the California Integrated Waste Management Act (California Public
Resources Code Section 40000, et seq.); (viii) Title 7.3 of the California
Government Code Section 66758 et seq.; (ix)
Title 14, Division 7 of the California Code of Regulations; (x) Title 23,
Division 3, Chapter
15 of the California Code of Regulations; and (xi) all other applicable
provisions of the California Health and Safety Code, the
California Public Resources Code, the California Government Code and the
California Water Code and all regulations issued pursuant thereto and any
so-called "Superfund" or "Superlien" law, or any other federal, state or local
statute, law, ordinance, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any
hazardous,
toxic or dangerous waste, substance or material, as now or at
any time hereafter in effect.
13
(c) |
(e)
(f) (g) which
is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or
becomes regulated by
any Governmental
Agency; |
(d) the
presence of which on the Secured Property causes or threatens to cause a
nuisance relating to the Secured Property or adjacent properties or poses or
threatens to pose a hazard relating to the Secured
Property or adjacent properties or to the health or safety of Persons
on or about the Secured Property or adjacent properties;
which
contains asbestos, gasoline, diesel fuel or other petroleum hydrocarbons,
volatile organic compounds, polychlorinated biphenyls (PCBs) or urea
formaldehyde foam insulation;
which
contains or emits radioactive particles, waves or material, including radon gas;
or
which is
or constitutes a part of an underground storage tank. "Hazardous
Material Claims" shall
have the meaning set forth in Section
1.05E(4). "Impositions" shall
have the meaning set forth in Section
1.02A. "Improvements" shall
have the meaning set forth in Granting Clause Two. "Increased
Rate" shall
have the meaning set forth in the Note. "Indemnified
Claims" shall
have the meaning set forth in Section
1.05E(1). "Indemnitee" shall
have the meaning set forth in Section
1.05 E(1). "Land" shall
have the meaning set forth in Granting Clause One.
"Lease"
and "Leases" shall
have the respective meanings set forth in Section
1.08A. "Lease
Termination Proceeds" shall
have the meaning set forth in the Assignment.
"Legal
Requirements" shall
mean all present or future laws, statutes, permits, approvals, plans,
authorizations, guidelines, franchises, ordinances, restrictions, orders, rules,
codes, regulations, judgments, decrees, injunctions or requirements of all
Governmental Agencies or any officers thereof, including any Board of Fire
Underwriters.
"Lessee" shall
have the meaning set forth in Section
l.08A.
"Limited
Guarantor" shall
have the meaning set forth in Section
5.19.
14
"Loan" shall
mean the mortgage loan made by the Note Holders to Trustor evidenced by the Note
and secured by this Deed of Trust.
"Loan
Instruments" shall
mean the Note, this Deed of Trust, the Assignment and each other instrument now
or hereafter given to evidence, secure, indemnify, guaranty or otherwise assure
or provide for the payment or performance of the Obligations or otherwise
executed by Trustor in connection with the Loan, but shall not include the
Guaranty.
"Major
Tenant" shall
have the meaning set forth in the Assignment. "Make-Whole
Amount" shall
have the meaning set forth in the Note. "Maturity
Date" shall
have the meaning set forth in the Note.
"Non-Recourse
Exceptions" shall
have the meaning set forth in Section
5.19.
"Note" shall
have the meaning set forth in the second introductory paragraph of this
Deed of
Trust.
"Note
Holders" shall
have the meaning set forth in the second introductory paragraph of this Deed of
Trust.
"Obligations" shall
mean and include all indebtedness, obligations, covenants, agreements
and liabilities of Trustor to the Note Holders, including all obligations to pay
interest, the
Make-Whole Amount and all charges and advances, whether direct or indirect,
existing, future, contingent or otherwise, due or to become due, pursuant to or
arising out of or in connection with the Note, this Deed of Trust, the
Assignment or any other Loan Instrument, all modifications, extensions and
renewals of any of the foregoing and all expenses and costs of collection or
enforcement, including attorneys' fees (which attorney's fees shall be
reasonable with respect to any modification, extension or renewal of any Loan
Instrument) and disbursements incurred by the Note Holders in the collection or
enforcement of any of the Loan Instruments or in the exercise of any rights or
remedies pursuant to the Loan Instruments or applicable law.
"Other
Guarantor" shall
have the meaning set forth in Section
5.19. "Partial
Foreclosure" shall
have the meaning set forth in Section
4.0lB.
"Person" shall
mean a corporation, a limited or general partnership, a limited liability
company or partnership, a joint stock company, a joint venture, a trust, an
unincorporated association, a Governmental Agency, an individual or any other
entity similar to any of the foregoing.
"Personal
Property" shall
have the meaning set forth in Granting Clause Two.
15
"Premises" shall
have the meaning set forth in Granting Clause Two. "Proceeds" shall
have the meaning set forth in Section
1.03F(2).
"Reciprocal
Easement Agreement" shall
have the meaning set forth in Granting Clause Twelve.
"Rents" shall
mean all rents, issues, profits, cash collateral, royalties, income and other
benefits derived from the Secured Property or any part thereof (including
benefits accruing from all present or future leases and agreements, including
oil, gas and mineral leases and agreements).
"Release" shall
mean any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration into the
environment.
"Secured
Property" shall
mean the Premises, the Personal Property and all other rights and interests
described in the Granting Clauses of this Deed of Trust.
"State" shall
mean the State, Commonwealth or territory in which the Secured Property is
located.
"Transfer" shall
have the meaning set forth in Section
l.11B.
As used
in this Deed of Trust (a) words such as "herein", "hereof', "hereto",
"hereunder" and "hereby" or similar terms refer to this Deed of Trust as a whole
and not to any specific Section or provision hereof; (b) wherever the singular
or plural number or the masculine, feminine or neuter gender is used, it shall
include each other number or gender; and (c) the word "including" shall mean
"including, without limitation," and the word "includes" shall mean "includes,
without limitation."
ARTICLE I
COVENANTS
AND AGREEMENTS Trustor
hereby covenants and agrees as follows:
1.01 Payment,
Performance and Security. Trustor
shall pay when due the amount of, and otherwise timely perform, all
Obligations.
This Deed
of Trust shall secure all Obligations.
1.02
Payment
of Taxes, Assessments, etc.
1.02A.
Impositions. Subject
to Trustor's right to contest the same in accordance with Section
1.02H, Trustor
shall pay when due and payable, before any fine, penalty, interest
or
16
cost for
the nonpayment thereof may be added thereto, and without any right of offset or
credit against any interest or other amounts payable to Beneficiary pursuant to
this Deed of Trust or on the Note, all property taxes, assessments, water and
sewer rents, rates and charges, transit taxes, charges for public utilities,
excises, levies, vault taxes or charges, license and permit fees and other
governmental charges, general and special, ordinary and extraordinary,
unforeseen and foreseen, of any kind and nature whatsoever (including penalties,
interest costs and charges accrued
or accumulated thereon), which at any time may be assessed, levied, confirmed,
imposed upon, or
become due and payable out of or in respect to, or become a lien on, the Secured
Property or any part thereof, or any appurtenance thereto prior to or on a
parity with the Obligations or the lien of this Deed of Trust, as the case may
be, (all of the foregoing collectively, "Impositions" and
individually, an "Imposition").
1.02B.
Installments.
Notwithstanding anything to the contrary contained in Section
1.02A , if by
law any Imposition, at the option of the taxpayer, may be paid in installments,
and provided interest shall not accrue on the unpaid balance of such
Impositions, Trustor
may exercise the option to pay the same in installments and, in such event,
shall pay such
installments as the same become due and before any fine, penalty, interest or
cost may be added thereto.
1.02C.
Receipts. Trustor,
upon request of Beneficiary, will furnish to Beneficiary within three (3) days
before the date when any property taxes, assessments and insurance premiums
relating to the Secured Property would become delinquent, official receipts of
the appropriate taxing authority, or other evidence reasonably satisfactory to
Beneficiary, evidencing the payment thereof.
l.02D.
Evidence
of Payment. The
xxxx, certificate or advice of nonpayment, issued by the appropriate official
(designated by law either to make or issue the same or to receive payment of any
Imposition), of the nonpayment of any property taxes, assessments and insurance
premiums relating to the Secured Property shall be prima facie evidence that
such Imposition is due and unpaid at the time of the making or issuance of such
certificate, advice or xxxx. Trustor shall pay Beneficiary, on demand, all
charges, costs and expenses of every kind including each tax service search fee
or charge incurred by Beneficiary at any time or times during the term of this
Deed of Trust in connection with obtaining evidence reasonably satisfactory to
Beneficiary that the payment of all Impositions is current and that there is no
Imposition
due and owing or which has become or given rise to a lien on the Secured
Property or any part
thereof or any appurtenance thereto.
l.02E.
Payment
by Beneficiary. If
Trustor shall fail to pay any property taxes, assessments and insurance premiums
relating to the Secured Property in accordance with the provisions of this
Section
1.02,
Beneficiary, at its option and at such time as it may elect, may pay any such
property taxes, assessments and insurance premiums relating to the Secured
Property,
but shall be under no obligation to do so. Trustor will repay to Beneficiary, on
demand, any
amount so paid by Beneficiary, with interest thereon at the Increased Rate from
the date of such payment by Beneficiary to the date of repayment by Trustor.
This Deed of Trust shall secure each such amount and such interest.
17
1.02F.
Change
in Law. In the
event of the passage after the date of this Deed of Trust of any law deducting
the Obligations from the value of the Secured Property or any part thereof for
the purpose of taxation or resulting in any lien thereon, or changing in any way
the laws now in force for the taxation of this Deed of Trust or the Obligations
for state or local purposes, or the manner of the operation of any such taxes so
as to affect the interest of Beneficiary, then, and in such event, Trustor shall
bear and pay the full amount of such taxes, provided that if for any reason
payment by Trustor of any such new or additional taxes would be unlawful or if
the payment thereof would constitute usury or render the Loan or the Obligations
wholly or partially usurious under any of the terms or provisions of the Note,
this Deed of Trust or otherwise, Beneficiary may, at its option, declare all
Obligations secured by this Deed of Trust, with interest thereon, to be
immediately due and payable (provided, however, that Trustor shall not be liable
for any penalty or premium and no Make-Whole Amount shall be due as a result
thereof), or Beneficiary may, at its option, pay that amount or portion of such
taxes as renders the Loan or the Obligations unlawful or usurious, in which
event Trustor shall concurrently therewith pay the remaining lawful and
non-usurious portion or balance of such taxes.
l.02G.
Joint
Assessment. Trustor
shall not suffer, permit or initiate the joint assessment of the Premises and
the Personal Property, or any other procedure whereby personal property taxes
and real property taxes shall be assessed, levied or charged to the Secured
Property as a single lien.
1.02H.
Permitted
Contests.
Notwithstanding anything herein to the contrary, if, and for so long as, no
Event of Default has occurred under any of the Loan Instruments that has not
been waived by Beneficiary in writing, or as to which Beneficiary has not agreed
to extend the applicable cure period, Trustor shall have the right to contest
the amount or the validity, in whole or in part, of any Imposition, by
appropriate proceedings diligently conducted in good faith and without cost or
expense to Beneficiary. Subject to the provisions of Section
1.02I and
provided
Trustor is in compliance with the provisions of the next sentence, Trustor may
postpone or defer
payment of such Imposition if Trustor, on or before the due date thereof, shall
(1) deposit or cause to be deposited with Beneficiary a surety bond issued by a
surety company of recognized responsibility acceptable to Beneficiary,
guaranteeing and securing the payment in full of such Imposition, pending the
determination of such contest, except that provided the Imposition cannot result
in a lien against the Secured Property, a deposit shall be required only if the
contested amount shall be in excess of $50,000, (2) deposit or cause to be
deposited with Beneficiary an amount equal to one hundred (100%) percent of such
Imposition or any balance thereof remaining unpaid, and from time to time, but
not more frequently than quarterly, deposit amounts in order to keep on deposit
at all such times an amount equal to one hundred (100%) percent
of the Imposition remaining unpaid, or (3) furnish or cause to be furnished to
Beneficiary other
security reasonably satisfactory to Beneficiary. If such deposit is made or such
security furnished and Trustor continues in good faith to contest the validity
of such Imposition by appropriate legal proceedings which shall operate to
prevent the collection of such Imposition so contested, the imposition of
interest, fines or other penalties with respect to such Imposition and the sale
of the Secured Property or any part thereof to satisfy such Imposition, Trustor
shall have no obligation to pay such Imposition until such time as it has been
finally determined to be a valid, due and payable Imposition. Until such time as
such proceedings have been terminated, or
18
at any
earlier time that Trustor shall have been adjudicated liable for the payment of
such Imposition, (i) Trustor shall pay in full the amount of such Imposition or
part thereof as shall have been finally determined in such proceeding, together
with all liabilities in connection therewith, and (ii) Beneficiary shall not
apply or require the application of any amounts that may have been deposited
pursuant to this Section
l.02H to
payment of any unpaid Imposition. However, Beneficiary shall not have any
liability for application of, or failure to apply, any amount so deposited,
except for Beneficiary's intentional and willful failure to apply a deposited
amount after Trustor shall have notified Beneficiary of such final decision and
Trustor or the Person making such deposit shall have requested in writing the
application of such amount to the payment of the particular Imposition with
respect to which it was deposited. Beneficiary shall repay to Trustor, or as
directed by Trustor, the remainder of any such deposit after payment in full of
the related Imposition unless an Event of Default has occurred under any of the
Loan Instruments that has not been waived by Beneficiary in writing. If an Event
of Default has occurred that has not been waived by Beneficiary in writing,
Beneficiary may, in its discretion, apply all or any part of such remainder to
such Event of Default. After such application (and the payment in full of all
then due and payable Impositions), Beneficiary shall pay the remainder of such
surplus, if any, to Trustor.
1.02I.
No
Lease Default.. If
contesting the validity or amount of any Imposition shall cause a breach of any
of the terms, conditions or covenants required to be performed by Trustor as
lessor under any Lease, Trustor shall not have the right to contest the same as
provided in Section
l.02H, and
Trustor shall pay such Imposition pursuant to Section
1.02A.
l.03
Insurance.
1.03A.
All
Risk Coverage. Trustor,
at its sole cost and expense, shall keep the Improvements and the Personal
Property insured against loss or damage by fire and against loss or damage by
other risks now covered by "All Risk" insurance, submitting evidence thereof on
Accord form 27 or equivalent Accord form and otherwise in form and substance
satisfactory to Beneficiary, and in an amount equal to at least one hundred
percent (100%) of the full replacement cost of the Improvements and the Personal
Property, including work performed for tenants, without deduction for
depreciation and with such other deductibles, if any, as are satisfactory to
Beneficiary, in its discretion. Such insurance shall include an endorsement for
demolition and increased cost of construction and an agreed amount endorsement
for the estimated replacement cost. Trustor's "All Risk" insurance policy shall
not exclude from coverage any loss arising from the perils of terrorist acts or,
in the alternative, Trustor shall maintain a separate insurance policy covering
terrorist acts and, in either case, the coverage for damage caused by terrorist
acts shall be on a 100% replacement cost basis with a deductible of not more
than Five Hundred Thousand Dollars ($500,000.00) (such insurance coverage shall
be referred to herein as "Terrorism
Insurance").
Trustor's Terrorism Insurance coverage may be part of a blanket insurance policy
provided that the blanket coverage (i) is acceptable to Beneficiary, in its
discretion, (ii) names Beneficiary as a certificate holder and additional
insured and (iii) contains a specific allocation of value and deductible related
to the coverage on the property to be encumbered by this Deed of Trust and
provides that such value and deductible may not be affected by any claims or
other matters related to the other properties covered by the blanket policy. If
Terrorism Insurance is not commercially available as determined in
19
accordance
with Section
1.03I, then in
lieu of providing Terrorism Insurance as provided in this Section
l.03A, Trustor
may comply with the provisions of Section
l.031.
l.03B.
Additional
Coverage. Trustor,
at its sole cost and expense, shall at all times also maintain:
(1) Commercial
general liability insurance against claims for bodily injury, personal injury or
property damage, occurring in, on, under or about the Secured Property or in,
on, under or about the adjoining streets, sidewalks and passageways, to the
extent such streets are owned, controlled or maintained by Trustor; such
insurance to be in amounts and in form and substance satisfactory to
Beneficiary;
(2) Rent
and/or business income insurance in an amount not less than one year's aggregate
rentals, including minimum rentals, escalation charges, percentage rents (based
on sales projections reasonably acceptable to Beneficiary) and other additional
rentals, and any other amounts payable by tenants and other occupants at the
Secured Property pursuant to Leases or otherwise, which amount shall be
increased from time to time upon the leasing of space at the Secured Property or
upon each increase in such aggregate rentals;
(3) If the
Improvements are located in a flood hazard area, flood insurance on the
Improvements in an amount equal to the lesser of full replacement cost thereof
or the maximum amount of insurance obtainable;
(4) In the
extent such equipment is located at the Secured Property, insurance, in such
amounts as Beneficiary shall from time to time require, against loss or damage
from leakage or explosion of steam boilers, air conditioning equipment, pressure
vessels or similar apparatus, now or hereafter installed in or on the Secured
Property;
(5) Earthquake
insurance, in such amounts as Beneficiary shall from time to time
require;
(6) Such
other insurance and any replacements, substitutions or additions thereto as
shall at any time be required by Beneficiary against other insurable hazards,
including, if available at commercially reasonable premiums, war risk, nuclear
reaction or radioactive contamination, each in such amount as Beneficiary shall
determine.
1.03C.
Separate
Insurance. Trustor
shall not carry separate insurance, concurrent in kind or form and contributing
in the event of loss with any insurance required hereunder. Trustor may,
however, effect for its own account any insurance not required pursuant to the
provisions of this Deed of Trust, but any such insurance effected by Trustor on
the Secured Property, whether or not required pursuant to this Section
1.03, shall be
for the mutual benefit of Trustor and the Note Holders, as their respective
interests may appear, and shall be subject to all other provisions of this
Section
1.03.
1.03D.
Insurers;
Policies. All
insurance provided for in this Section
1.03 shall be
effected under valid and enforceable policies issued by financially responsible
insurers, rated by
20
A.M. Best
as "A" or better and as having a class size of at least "X(10)" and authorized
to do business in the State, with deductibles acceptable to Beneficiary and
otherwise in form and substance acceptable to Beneficiary. An original copy of
all such policies shall be deposited with and held by Beneficiary and shall
contain the standard non-contributory mortgagee clause in favor of the Note
Holders and a waiver of subrogation endorsement, all in form and content
satisfactory to Beneficiary. All such policies shall contain a provision that
such policies will not be
cancelled or materially amended (including any reduction in the scope or limits
of coverage), without at least thirty (30) days' prior written notice to
Beneficiary. Not less than thirty (30) days prior to the expiration dates of the
expiring policies theretofore furnished pursuant to this Section
1.03,
originals of the policies or copies of original policies certified by Trustor as
true and correct bearing notations evidencing the full payment of the annual
premium or accompanied by other evidence satisfactory to Beneficiary of such
payment shall be delivered by Trustor to Beneficiary.
1.03E.
Beneficiary's
Right to Secure Coverage. If
Trustor fails to furnish to Beneficiary and keep in force the original policies
of insurance required by this Section
1.03,
Beneficiary, at its option, may, on behalf of the Note Holders, procure such
insurance, which procurement, at Beneficiary's further option, may be by the
purchase of insurance policies or by the addition of the Secured Property to
Beneficiary's blanket policy. In the event that Beneficiary has exercised either
of such options, promptly upon demand by Beneficiary, Trustor (i) will reimburse
Beneficiary for all premiums on the policies purchased by Beneficiary or (ii) in
the event Beneficiary has added the Secured Property to its blanket policy, will
pay to Beneficiary an amount equal to the estimated cost of the insurance
coverage which Beneficiary has added to its blanket policy had such coverage
been obtained under a separately policy and not under a blanket policy, in
either case, with interest thereon at the Increased Rate from the date
Beneficiary pays such premiums to the date Trustor repays such premiums to
Beneficiary in full. Until they are so repaid, this Deed of Trust shall secure
the amount of such premiums and interest.
1.03F.
Damage
or Destruction. Subject
to the provisions of Section
1.03H, upon the
occurrence of any damage or casualty to the Secured Property or any part
thereof, the following shall apply:
(1) Trustor
shall give Beneficiary written notice of such damage or casualty as soon as
possible, but not later than seven (7) business days from the date such damage
or casualty occurs.
(2) Subject
to Section
1.03H(5), all
proceeds of insurance ("Proceeds") paid or
to be paid pursuant to any of the policies maintained pursuant to this Deed of
Trust shall be payable to Beneficiary. Trustor hereby authorizes and directs any
affected insurer to make such payment of the Proceeds directly to Beneficiary.
Beneficiary may commin-gle, with other monies in Beneficiary's possession, all
Proceeds received by Beneficiary. All such Proceeds shall constitute additional
security for the Obligations and Trustor shall not be entitled to the payment of
interest thereon. Beneficiary 'may settle, adjust or compromise all claims for
loss, damage or destruction pursuant to any policy or policies of insurance;
provided, however, that unless an Event of Default has occurred that has not
been waived in writing by
21
Beneficiary
or as to which Beneficiary has not agreed in writing to extend the applicable
cure period, Beneficiary shall not settle any such claim without Trustor's
participation therein.
(3)
Subject to the provisions of Section
l.03H,
Beneficiary shall have the option, in its reasonable discretion, and without
regard to the adequacy of its security hereunder, of applying all or part of the
Proceeds to (a) the Obligations, whether or not then due, in such order as
Beneficiary shall determine, (b) the repair or restoration of the Secured
Property,
(c) reimburse
Beneficiary for its costs and expenses in connection with the recovery of
the
Proceeds, or (d) any combination of the foregoing.
(4)
Nothing herein contained shall be deemed to excuse Trustor from repairing or
maintaining the Secured Property as provided in Section
1.05 or
restoring all damage or destruction to the Secured Property, regardless of
whether there are Proceeds available or whether the Proceeds are sufficient in
amount, and the application or release by Beneficiary of any Proceeds shall not
cure or waive any Event of Default or notice of default pursuant to this Deed of
Trust or invalidate any act done pursuant to such notice.
1.03G.
Transfer
of Interest in Policies. In the
event of the foreclosure of this Deed of Trust or other transfer of title or
assignment of the Secured Property in payment and performance, in whole or in
part, of the Obligations, all right, title and interest of Trustor in and to all
policies of insurance required by this Section
1.03 shall
inure to the benefit of, and pass to the purchaser or grantee of the Secured
Property. If, prior to Beneficiary's receipt of the Proceeds, the Secured
Property shall have been sold through the foreclosure of this Deed of Trust or
other similar proceeding, Beneficiary shall have the right to receive the
Proceeds to the extent that any portion of the Obligations are still unpaid
after application of the proceeds of the foreclosure sale or similar proceeding,
together with interest thereon at the Increased Rate, plus attorney's fees and
other costs and disbursements incurred by Beneficiary in connection with the
collection of the Proceeds and in establishing the amount of and collecting the
deficiency. Trustor hereby assigns, transfers and sets over to Beneficiary (on
behalf of the Note Holders) all of the Trustor's right, title and interest in
and to said sum. The balance, if any, shall be paid to Trustor, or as otherwise
required by law.
1.03H.
Trustor's
Use of Proceeds.
(1)
Notwithstanding any provision herein to the contrary, but subject to the
provisions of Section
1.03(H1 4), in the
event of any destruction to the Secured Property by fire or other casualty of
not more than thirty-five percent (35%) of the leasable area of the
Improvements, the Proceeds shall be made available to Trustor for repair and
restoration, after deducting therefrom and payment to Beneficiary of an amount
equal to Beneficiary's costs in connection with collection, review and
disbursement of the Proceeds of such damage or casualty, provided
that:
(a) The
Proceeds are deposited with Beneficiary;
(b) No Event
of Default shall have occurred and be continuing under the terms of any of the
Loan Instruments;
22
(c) The
insurer does not deny liability to any named insured or, if the insurer does
deny liability, Beneficiary shall hold the Proceeds and not apply them to the
Obligations while Trustor and such insurer resolve any dispute regarding such
insurer's liability; provided, however, if such dispute is not resolved within
ninety (90) days from the date the Proceeds are deposited with Beneficiary, and
further provided that Trustor is, in Lender's reasonable discretion, diligently
pursuing settlement of such dispute, Trustor shall not be entitled to receive
the Proceeds and Beneficiary may apply them to the Obligations.
(d) Beneficiary
is furnished with, and has approved (i) a complete, final set of plans and
specifications for the work to be performed in connection with the repair or
restoration, (ii) an estimate of the cost of repair and restoration, and (iii) a
certificate of Beneficiary's Architect as to such costs; provided, however, that
Beneficiary will not unreasonably withhold its consent to a request from Trustor
for a disbursement of the Proceeds to Trustor notwithstanding Trustor's failure
to comply with the requirements of this subsection (d) and/or subsection (f) of
this Section
1.03H(1) provided
that Trustor has complied with all of the other requirements of this
Section
1.03H(1) and the
sum of all such disbursements made by Beneficiary pursuant to this proviso and
the proviso in subsection (f) does not exceed Two Million Dollars
($2,000,000.00).
(e) The
value, quality and condition of the Secured Property as so
repaired or restored shall be at least equal to that of the Secured Property
prior to such damage or
casualty;
(f) Trustor
furnishes Beneficiary with evidence reasonably satisfactory to Beneficiary that
all Improvements so repaired or restored and their use shall fully comply with
all applicable (i) easements, covenants, conditions, restrictions or other
private agreements or instruments of record affecting the Secured Property and
(ii) Legal Requirements; provided, however, that Beneficiary will not
unreasonably withhold its consent to a request from Trustor for a disbursement
of the Proceeds to Trustor notwithstanding Trustor's failure to comply with the
requirements of subsection (d) and/or this subsection (1) of this Section
1.03H(1) provided
that Trustor has complied with all of the other requirements of this
Section
1.03H(1) and the
sum of all such disbursements made by Beneficiary pursuant to this proviso and
the proviso in subsection (d) does not exceed Two Million Dollars
($2,000,000.00).
(g) If the
estimated cost of such repair or restoration exceeds the Proceeds available,
Trustor shall (i) furnish a bond of completion or provide other evidence
satisfactory to Beneficiary of Trustor's ability to pay such excess costs, or
(ii) deposit with Beneficiary additional funds equal to such
excess;
(h) Beneficiary
shall have received written notice of damage or casualty from Trustor within
seven (7) business days from the date of such damage or casualty, which notice
shall state the date of such damage or casualty, and shall contain a request to
Beneficiary to make the Proceeds available to Trustor;
23
(i) Beneficiary
shall have received a report or proof of claim from the insurer describing the
damage or casualty and the insurer's payment therefor;
(j) During
and after the repair and restoration period, the aggregate monthly net income
pursuant to rent or business income insurance and/or pursuant to all Leases
remaining in full force and effect shall be in an amount sufficient to pay the
monthly installments of principal and interest required to be paid on the
Obligations, as well as all payments
for property taxes, assessments and insurance required pursuant to Section
1.04, if
any, as
estimated by Beneficiary.
(2) Beneficiary
shall disburse the Proceeds during the course of repair or
restoration upon (a) the certification of Beneficiary's Architect as to the cost
of the work done, (b) the
conformity, as determined by Beneficiary, of the work to plans and
specifications approved by Beneficiary, and (c) receipt of evidence of a title
insurance company acceptable to Beneficiary that there are no liens arising out
of the repair or restoration or otherwise which are not
bonded in accordance with all applicable Legal Requirements in an amount and
with a surety
satisfactory to Beneficiary. Notwithstanding the above, a portion of the
Proceeds may be released prior to the commencement of repair or restoration to
pay for items approved by Beneficiary in its discretion. Subject to satisfaction
of the foregoing conditions, Beneficiary shall make such disbursements within
ten (10) business days after a written request by Trustor. No payment made prior
to the final completion of work shall exceed ninety percent (90%) of the value
of the work performed from time to time, and at all times the undisbursed
balance of the Proceeds remaining with Beneficiary must be at least sufficient
to pay for the cost of completion of the work (as estimated by Beneficiary in
its discretion), free and clear of liens. Beneficiary shall make final payment
after receipt of a certification of Beneficiary's Architect confirming the
completion of the work in accordance with plans and specifications reasonably
approved by Beneficiary.
(3) Beneficiary
shall (a) return to Trustor the balance of the Proceeds after full disbursement
in accordance with Sections
1.03H(1) and (2), or (b)
if an Event of Default has occurred that has not been waived in writing by
Beneficiary, apply such balance to the Obligations, whether or not then due, in
such order as Beneficiary shall determine, in which event Trustor shall not be
liable for the Make-Whole Amount on any portion of the Obligations that are
prepaid by such application of the Proceeds.
(4) In all
cases in which any destruction of the Secured Property by fire or other casualty
occurs during the last twelve (12) months prior to the Maturity Date, or in
Beneficiary's
reasonable judgment, Trustor is not proceeding with the repair or restoration in
a manner that would entitle Trustor to have the Proceeds disbursed to it,
Beneficiary shall have the options set forth in Section
1.03 F(3). In the
event Beneficiary elects to apply the Proceeds to the Obligations pursuant
to-clause (a) of Section
1.03 F(3) Trustor
shall not be liable for the Make-Whole Amount on any portion of the Obligations
that are prepaid by such application of the Proceeds.
(5) Notwithstanding
any provision herein to the contrary including without limitation the foregoing
provisions regarding Trustor's use of the Proceeds where
24
destruction
to the Secured Property by fire or other casualty is not more than thirty-five
percent (35%) of the leasable area of the Improvements, but subject to the
provisions of Section
1.03(H)(4), in the
event of any destruction to the Secured Property by fire or other casualty
resulting in damage or destruction to the Secured Property (as determined by
Beneficiary) of not more than $2,000,000.00, the Proceeds shall be payable to
Trustor for repair and restoration, after deducting therefrom and payment to
Beneficiary of an amount equal to Beneficiary's costs in connection with such
damage or casualty, provided
that:
(a) No Event
of Default shall have occurred and be continuing under the terms of any of the
Loan lnstruments;
(b) The
value, quality and condition of the Secured Property as so repaired or restored
shall be at least equal to that of the Secured Property prior to such damage or
casualty;
(c) All
Improvements so repaired or restored and their use shall fully comply with all
applicable (i) easements, covenants, conditions, restrictions or other private
agreements or instruments of record affecting the Secured Property and (ii)
Legal Requirements; provided, however, that Beneficiary will not unreasonably
withhold its consent to a request from Trustor for a disbursement of the
Proceeds to Trustor notwithstanding Trustor's failure to comply with the
requirements of this subsection (c) provided that Trustor has complied with all
of the other requirements of this Section
1.03H(5) and the
sum of all such disbursements made by Beneficiary pursuant to this proviso does
not exceed Five Hundred Thousand Dollars ($500,000.00);
(d) During
and after the repair and restoration period, the aggregate monthly net income
pursuant to rent or business income insurance and/or pursuant to all Leases
remaining in full force and effect shall be in an amount sufficient to pay the
monthly installments of principal and interest required to be paid on the
Obligations, as well as all payments for property taxes, assessments and
insurance required pursuant to Section
1.04, if any,
as estimated by Beneficiary.
(6) Under
no circumstances shall Beneficiary become personally liable for the fulfillment
of the terms, covenants and conditions contained in any of the Leases or
obligated to take any action to repair or restore the Secured
Property.
1.03I. Amendment
as a Result of Commercial Unavailability of Insurance Against
Terrorist Acts.
(1) If any
insurance required to be maintained against loss arising from the
perils of terrorist acts (other than insurance required to be maintained under
applicable law) pursuant to Section
1.03A or,
subject to the terms thereof, the Letter Agreement, if applicable, (including
the limits or deductibles or any other terms under policies for such insurance)
ceases to be commercially available in the commercial insurance market, Trustor
shall provide written notice to Beneficiary, accompanied by a certificate from
an independent insurance advisor of recognized national standing selected by
Trustor and reasonably satisfactory to Beneficiary
25
("Insurance
Advisor"), stating
that such insurance against loss arising from the perils of terrorist acts is
not commercially available in the commercial insurance market for buildings of
similar type and geographic location, and explaining in detail the basis for
such conclusions and recommending any waivers or modification of such insurance
requirement (which recommendation shall include the amount and type of insurance
which is commercially available, if any).
(2) Following
receipt of such notice, certificate and recommendation of the Insurance Advisor,
Beneficiary shall not unreasonably withhold, delay or condition its approval of
the recommended waiver or modification of such insurance requirement (any such
approval to be evidenced by a writing to such effect) but in this regard,
Beneficiary may at, Beneficiary's expense, seek the advice of another insurance
advisor of its choosing, and factor such advice into its decision. Beneficiary
shall advise Trustor in writing of its decision concerning the recommended
waiver or modification, including any alternative requirements it may reasonably
establish, and Trustor shall, prior to the expiration of the insurance against
loss arising from the perils of terrorist acts then in effect, obtain such
insurance that is approved by Beneficiary.
(3) In the
event that such insurance requirement has been waived or modified pursuant to
Section
1.03I(2), Trustor
shall, from time to time upon request of Beneficiary but not more than once in
any calendar year unless Beneficiary has reasonably determined that there has
been a change in the availability of insurance against loss arising from the
perils of terrorist acts, in which event the foregoing limitation shall not
apply, provide to Beneficiary a written supplemental report from the Insurance
Advisor that provided the certificate referred to in Section 1.03I(1) (or such
other independent insurance advisor reasonably acceptable to Beneficiary),
updating such prior certificate and reaffirming the conclusions stated therein,
including as to the insurance against loss arising from the perils of terrorist
acts which is then commercially available. Such supplemental report shall be
provided within thirty (30) days after a request from Beneficiary in accordance
with this paragraph. In the event that the Insurance Advisor (or such other
insurance advisor engaged by Beneficiary at Trustor's expense), states that a
different level of insurance is then commercially available, as compared to the
insurance that was commercially available in the prior certificate and
recommendation, Trustor shall promptly (and in any event within thirty (30) days
after receipt of such updated report) obtain the then specified level of
insurance that is then commercially available, subject to Beneficiary's
approval, in the same manner as provided in Section
1.03A or
Section
1.03I(2) above,
as applicable.
(4) Any
waiver or modification approved pursuant to Section 1.03I(2) shall be
effective for only as long as the originally required insurance is not
commercially available. Failure by Trustor to provide the supplemental report
referred to in Section
1.03I(3) within
the period required shall give rise to a rebuttable presumption that the
originally required insurance is then commercially available. In the event of
such failure, any insurance waiver or modification approved pursuant to
Section
1.03I(2) shall
cease to satisfy the requirements of this Deed of Trust at the expiration of the
thirty (30) day period referred to in the second sentence of Section
1.03I(3). For the
avoidance of doubt, Beneficiary, at Trustor's expense, may establish that
insurance coverage against loss arising from the perils of terrorist acts is
commercially
26
available
independent of, and without first, requesting Trustor to provide a
supplemental
report pursuant to Section
1.03I(3).
(5) For the
purpose of this Section
1.03I,
insurance against loss arising from the perils of terrorist acts will be
considered not "commercially available" only if (A) the material provisions of
The Terrorism Risk Act of 2002 (Pub. L. 107-297, 116 Stat. 232 (2002)) are no
longer in effect, or (B) it is not obtainable or is obtainable only at excessive
costs which are not justified in terms of the risk to be insured and it is not
being carried by or applicable to properties or operations similar to and in the
same geographic area as the Property because of such excessive costs.
Notwithstanding any other provision of this Section
1.03I to the
contrary, the annual costs of insurance providing coverage against loss arising
from the perils of terrorist acts shall be deemed "excessive" to the extent such
annual costs are in excess of two hundred percent (200%) of the cost of
Trustor's "All Risk" insurance policy as described in Section 1.03A or
subject to the terms thereof, the Letter Agreement, if applicable ("Terrorist
Insurance Cost"). In the
event the costs of maintaining coverage against loss arising from the perils of
terrorist
acts are in excess of the Terrorist Insurance Cost (as determined by Beneficiary
based on the
advice of the Insurance Advisor), then Trustor shall maintain the maximum amount
of coverage as may be obtained by the expenditure of the Terrorist Insurance
Cost.
(6) Notwithstanding
anything to the contrary contained in Section
1.04 and in
addition to the payments required thereunder, Trustor agrees if the cost of the
insurance providing coverage against loss arising from the perils of terrorists
acts is deemed excessive as provided in Section
1.03I(2) and
Trustor is not otherwise required to maintain insurance against terrorist acts,
until such time as Trustor obtains insurance against loss arising from the
perils of terrorists acts as provided in Section
l.03, Trustor
will immediately deposit with Beneficiary, or its designee, a sum equal to the
Terrorist Insurance Cost (the "Terrorism
Insurance Deposit").
Beneficiary or its designee shall hold all payments without any obligation for
the payment of interest thereon to Trustor and free of all liens or claims on
the part of the creditors of Trustor and as
part of the Secured Property. Such payments shall not be, nor be deemed to be
trust funds, but may
be commingled with the general funds of Beneficiary, or its designee. Upon
receipt by Beneficiary from Trustor of an insurance policy or an endorsement to
an existing insurance policy providing coverage against loss arising from the
perils of terrorist acts in accordance with the provisions of Section
1.03 together
with satisfactory evidence that such insurance has been paid for in full,
Beneficiary will reimburse Trustor from the Terrorism Insurance Deposit to the
extent same has not been applied in accordance with the provisions of the next
sentence. If an Event of Default has occurred under any Loan Instrument that has
not been waived by Beneficiary in writing, Beneficiary may, at its discretion
and without regard to the adequacy of its security hereunder, apply any unused
portion of the Terrorism Insurance Deposit to the payment of the Obligations in
such manner as it may elect. Transfer of legal title to the Secured Property
shall automatically transfer to the new owner any then remaining rights of
Trustor in the Terrorism Insurance Deposit held by Beneficiary pursuant to this
Section
1.03I(6). Upon
indefeasible payment in full of all of the Obligations, Beneficiary shall return
to Trustor the remaining portion, if any, of the Terrorism Insurance Deposit
then held by Beneficiary pursuant to this Section
1.03I(6). At such
time as Trustor obtains insurance against loss arising from the perils of
terrorist acts in accordance with the provisions of Section
l.03A or
subject to the terms thereof, the Letter Agreement, if applicable Beneficiary
shall return the unused portion of the Terrorism Insurance Deposit, if any, to
Trustor
27
l.04
Escrow
Payments. To
further secure the Obligations as to payment of the property taxes, assessments
and insurance premiums related to the Secured Property (as set forth in
Section
l.02) and
premiums for insurance (as set forth in Section
l.03), Trustor
will pay to Beneficiary, or its designee, on the due date of each monthly
installment of principal and/or interest pursuant to the Note, a sum equal to
the property taxes, assessments and insurance premiums next due on the Secured
Property, all as estimated by Beneficiary, less all sums already paid with
respect to the property taxes, assessments and insurance premiums related to the
Secured Property for such period, divided by the number of months to elapse
before one month
prior to the date when such property taxes, assessments and insurance premiums
related to the
Secured Property shall become due and payable. Beneficiary or its designee shall
hold all payments without any obligation for the payment of interest thereon to
Trustor and free of all liens or claims on the part of creditors of Trustor and
as a part of the Secured Property. Beneficiary or its designee shall use such
payments to pay current property taxes, assessments and insurance premiums
related to the Secured Property, as the same accrue and are payable. Such
payments shall not be, nor be deemed to be, trust funds, but may be commingled
with the general funds of Beneficiary, or its designee. If at any time and for
any reason Beneficiary reasonably determines that such payments are insufficient
to pay the property taxes, assessments and insurance premiums related to the
Secured Property in full as they become payable, Trustor will pay to Beneficiary
or its designee, within ten (10) days after demand therefor, such additional
sum or sums as may be required in order for Beneficiary or its designee to so
pay such property
taxes, assessments and insurance premiums related to the Secured Property in
full. Trustor shall furnish Beneficiary with the bills therefor within
sufficient time to enable Beneficiary or its designee to pay the property taxes,
assessments and insurance premiums related to the Secured Property before any
penalty attaches and before any policy lapses. If an Event of Default has
occurred under any Loan Instrument that has not been waived in writing by
Beneficiary, Beneficiary may, at its discretion and without regard to the
adequacy of its security hereunder, apply any unused portion of such payments to
the payment of the Obligations in such manner as it may elect. Transfer of legal
title to the Secured Property shall automatically transfer to the new owner any
then remaining rights of Trustor in all sums held by Beneficiary pursuant to
this Section
l.04.
Notwithstanding
anything to the contrary set forth in this Section
1.04,
Beneficiary agrees to waive
the obligations and requirements imposed upon Trustor by this Section
1.04 for the
payment
to Beneficiary each month of property taxes, assessments and insurance deposits
related to the
Secured Property as well as any Late Charge (as defined in the Note) for any
such payment not
received when due, on the condition that (a) Trustor pays all property taxes,
assessments and similar charges as they become due or before they become
delinquent, (b) Trustor pays all insurance premiums at least five (5) business
days before the cancellation date of any policy or policies required under this
Deed of Trust, (c) Trustor promptly submits to Beneficiary's real estate
department official receipts evidencing the timely payment of such property
taxes, assessments and similar charges and receipts evidencing the timely
payment of insurance premiums, (d) no Event of Default has occurred and is
continuing beyond any applicable cure periods, if any, under any of the Loan
Instruments, (e) the Secured Property (or any portion thereof) has not been
conveyed or alienated by Trustor except as permitted under the partial transfer
of ownership provisions as set forth in Section III of the Letter Agreement, (f)
if the
28
Secured
Property is transferred in conjunction with a sale or transfer of the Secured
Property to a third party, as described in Section II of the Letter Agreement,
the Debt Coverage Ratio is at least 1.50, and (g) Trustor pays to Beneficiary on
the date this Deed of Trust is recorded in the official records of Los Angeles
County, California, a one-time administrative fee of $5,000.00 for monitoring
Trustor's compliance with its obligation to pay property taxes, assessments and
similar charges and insurance premiums.
l.05
Care
and Use of the Premises.
l.05A.
Maintenance
and Repairs. Trustor,
at its sole cost and expense, if not prohibited from doing so by any Legal
Requirement, shall (l) take good care of the Secured Property and the sidewalks
and curbs adjoining the Secured Property and keep the same in good order and
condition, (2) make all necessary repairs thereto, interior and exterior,
structural and nonstructural, ordinary and extraordinary, foreseen and
unforeseen, (3) not commit or suffer to be committed any waste of the Secured
Property, and (4) not do or suffer to be done anything which will increase the
risk of fire or other hazard to the Secured Property or any part
thereof.
1.05B.
Standard
of Repairs. The
necessity for and adequacy of repairs to the Secured Property pursuant to
Section
l.05A shall be
measured by the standard which is appropriate for a first class office building
and related facilities of similar construction and type located in the Los
Angeles area. Further, Trustor shall make all repairs necessary to avoid any
structural damage to the Improvements and to keep the Secured Property in a
proper condition for its intended use. When used in this Section 1.05, the terms
"repair" and.
"repairs" shall include all necessary renewals and replacements. Trustor shall
make all repairs with first-class materials and in a good, substantial and
workerlike manner which shall be equal or better in quality and-class to the
original work.
1.05C.
Removal
of Equipment. Trustor
shall have the right, at any time and from time to time, to remove and dispose
of equipment which may have become obsolete or unfit for use or which is no
longer useful in the operation of the Secured Property. To the extent necessary
for the proper operation, maintenance and repair of the Secured Property,
Trustor will promptly replace all equipment so disposed of or removed with other
equipment of a value and serviceability equal to or greater than the original
value and serviceability of the equipment so removed or disposed of, free of all
liens, claims or other encumbrances. If by reason of technological or other
developments in the operation and maintenance of buildings of the general
character of the Improvements, no replacement of the building equipment so
removed or disposed of is necessary or desirable in the proper operation or
maintenance of the Improvements, Trustor shall not be required to replace same.
The security interest of this Deed of Trust shall cover all such replacement
equipment.
l.05D.
Compliance
With Laws and Insurance. Trustor
shall promptly comply with any and all applicable Legal Requirements including
maintaining the Secured Property in compliance with all Legal Requirements.
Trustor shall not bring or keep any article upon the Secured Property or cause
or permit any condition to exist thereon which would be prohibited by or could
invalidate any insurance coverage maintained, or required hereunder to be
maintained, by Trustor on or with respect to any part of the Secured Property.
Trustor shall do all other acts
29
which
from the character or use of the Secured Property may be necessary to protect
the Secured Property.
Upon request of Beneficiary, Trustor shall furnish to Beneficiary a copy of any
license, permit
or approval required by any Governmental Agency with respect to the Secured
Property and/or the operations conducted thereon.
l.05E.
Hazardous
Materials.
(l) Trustor
hereby unconditionally and irrevocably agrees to indemnify, reimburse, defend,
exonerate, pay and hold harmless the Note Holders, and their respective
directors, officers, policyholders, shareholders, employees, successors
(including any successor to any Note Holder's interest in the chain of title),
assigns, agents, attorneys, contractors, subcontractors, experts, licensees,
visitors, affiliates, lessees, mortgagees, trustees and invitees (each an
"Indemnitee" and
collectively, the "Indemnitees"), from and
against any and all of the following (referred to collectively as the
"Indemnified
Claims"): all
Environmental Damages and Environmental Claims that may be incurred by, imposed
upon, or asserted against, any Person indemnified hereunder, arising out of,
related to, or in connection with:
(a) the
presence of Hazardous Materials in, on, under or about or the Release or
threatened Release of any Hazardous Materials to or from the Secured Property
regardless of whether or not the presence of such Hazardous Materials arose
prior to the present ownership or operation of the property in question or as a
result of the acts or omissions of Trustor or any other Person,
(b) the
violation or alleged violation of any Environmental Requirement affecting or
applicable to the Secured Property or any activities thereon, regardless of
whether or not the violation of such Environmental Requirement arose prior to
the present ownership or operation of the property in question or as a result of
the acts or omissions of Trustor or any other Person,
(c) the
breach of any warranty or covenant or the inaccuracy of any representation
contained in the Loan Instruments pertaining to Hazardous Materials or other
environmental matters, including the covenants contained in Sections
1.05E(2), (3), (4) and (5) and the
representations and warranties contained in Sections
l.05E(4) and 2.03C and D,
(d) the
transport, treatment, recycling, storage or disposal or arrangement therefor, of
any Hazardous Material to, at or from the Secured Property, or
(e) the
enforcement or attempted enforcement of this indemnity.
Trustor's
obligations pursuant to the foregoing indemnity shall include the burden and
expense of (x)
defending against all Indemnified Claims, even if such Indemnified Claims are
groundless, false or
fraudulent, (y) conducting all negotiations of any description with respect to
the Indemnified Claims, and (z) paying and discharging any and all Indemnified
Claims, when and as the same become due, against or from the Note Holders or any
other Person indemnified pursuant to this Section
1.05E(1).
Trustor's obligations under this Section
1.05E(1) shall
survive (i) the repayment of all sums due under the Note; (ii) the release of
the Secured Property or any
30
portion
thereof from the lien of this Deed of Trust; (iii) the reconveyance of or
foreclosure under this Deed of Trust (notwithstanding that all or a portion of
the obligations secured by this Deed of Trust shall have been discharged
thereby);. (iv) the
acquisition of the Secured Property by Beneficiary; and/or (v) the transfer of
all of the Note Holder's rights in and to the Note and/or the Secured Property.
Trustor's obligations pursuant to the foregoing indemnity shall not extend to
Environmental Damages or Environmental Claims that (i) are caused solely by an
Indemnitee's gross negligence or willful misconduct, or (ii) which arise solely
from acts first occurring after the date Beneficiary forecloses the lien of this
Deed of Trust or accepts a deed in lieu of foreclosure. Indemnitors shall have
the burden of proving that Environmental Damages or Environmental Claims were
caused solely by an Indemnitee's gross negligence or willful misconduct or arose
from acts first occurring after the date Beneficiary foreclosed the lien of this
Deed of Trust or accepted a deed in lieu of foreclosure.
(2)
Trustor shall maintain the Secured Property in compliance with, and shall not
cause or permit the Secured Property to be in violation of, any applicable
Environmental Requirements. Trustor shall not, and shall use its best efforts to
not permit any lessee or occupant of the Secured Property to, use, generate,
manufacture, store, maintain, dispose of or permit to exist in, on, under or
about the Secured Property any Hazardous Materials. Trustor shall, at all times,
comply fully and in a timely manner, and cause all of its employees, agents,
contractors and subcontractors and any other Persons occupying or present on the
Secured Property to so comply, with all applicable Environmental
Requirements.
(3)
Provided that Beneficiary has a reasonable basis for determining that an adverse
change has occurred regarding the presence of Hazardous Materials on the Secured
Property, then promptly, upon the written request of Beneficiary, Trustor shall
provide Beneficiary, at Beneficiary's expense; with an environmental site
assessment or environmental audit report prepared by an environmental
engineering firm acceptable to Beneficiary and in a form acceptable to
Beneficiary, assessing the presence or absence of any Hazardous Materials and
the potential costs in connection with the abatement, cleanup or removal of any
Hazardous Materials found in, on, under or about the Secured Property; provided,
however, that if such environmental site assessment or environmental audit
report discloses an adverse change in the presence of Hazardous Materials on the
Secured Property, then such environmental site assessment or environmental audit
report shall be at Trustor's expense; provided, further, if an Event of Default
has occurred and Beneficiary has commenced foreclosure proceedings pursuant to
Section
4.01 hereof
then, upon Beneficiary's request (whether or not Beneficiary has a reasonable
basis for determining that an adverse change has occurred regarding the presence
of Hazardous Materials on the Secured Property) Trustor shall provide
Beneficiary, at Trustor's expense, such an environmental site assessment or
environmental audit report. Trustor shall cooperate in the conduct of such
environmental site assessment or environmental audit.
(4)
Trustor represents and warrants to the Note Holders that, except as disclosed by
the Environmental Site Assessment, (a) no enforcement, cleanup, removal or other
governmental or regulatory action has, at any time, been instituted,
contemplated or threatened against Trustor, or to its best knowledge, the
Secured Property, pursuant to any Environmental Requirements; (b) to the best of
its knowledge, no violation or noncompliance with any Environmental Requirements
has occurred with respect to the Secured Property at any time; (c)
31
no claims
have, at any time, been made or threatened by any third party against Trustor
with respect to the Secured Property or, to the best of Trustor's knowledge,
against the Secured Property, relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials and (d) to
the best of Trustor's knowledge, neither the Secured Property nor any part
thereof has been classified as "border zone property" under the provisions of
California Health and Safety Code Sections 25220, et seq., (the matters set
forth in this Section
l.05E(4) (a), (b), (c) and (d) are
herein referred to as "Hazardous
Materials Claims"). Trustor
shall promptly advise Beneficiary, in writing, if any Hazardous Materials Claims
are hereafter asserted, or if Trustor obtains knowledge of any Release of any
Hazardous Materials in, on, under or about the Secured Property, or that any of
the conditions described in clause (d) above has occurred.
(5)
Without Beneficiary's prior written consent, which consent shall not be
unreasonably withheld or delayed, Trustor shall not (a) take any remedial action
in response to the presence of any Hazardous Materials in, on, under or about
the Secured Property, or (b) enter into any settlement agreement, consent decree
or other compromise in respect of any such Hazardous Materials or any Hazardous
Material Claims. However, Beneficiary's prior consent shall not be necessary in
the event that the presence of any Hazardous Materials in, on, under or about
the Secured Property either poses an immediate threat to the health, safety or
welfare of any individual or is of such a nature that an immediate remedial
response is necessary and it is not possible to obtain Beneficiary's consent
before taking such action. In such event, Trustor shall notify Beneficiary as
soon as practical of any action so taken. Beneficiary shall not withhold its
consent, where such consent is required hereunder, if either (a) a particular
remedial action is ordered by a court of competent jurisdiction, or (b) Trustor
establishes to the satisfaction of Beneficiary that there is no reasonable
alternative to such remedial action which would result in less impairment to the
Secured Property.
(6)
Beneficiary, if it so elects, shall have the right to join and participate as a
party in any legal proceedings or actions initiated by any Person in connection
with any Hazardous Materials Claim and, in such case, Trustor shall pay all of
Beneficiary's attorneys' fees and expenses incurred in connection
therewith.
1.05F.
Compliance
With Instruments of Record. Trustor
shall promptly perform and observe, or cause to be performed and observed, all
terms, covenants and conditions of all instruments of record affecting the
Secured Property, non-compliance with which may affect the priority of the lien
of this Deed of Trust, or which may impose any duty or obligation upon Trustor
or any lessee or other occupant of the Secured Property or any part thereof.
Trustor shall do or cause to be done all things necessary to preserve intact and
unimpaired all easements, appurtenances and other interests and rights in favor,
or constituting any part, of the Secured Property.
1.05G.
Alteration
of Secured Property. Trustor
shall not demolish, remove, construct, restore, add to or alter any portion of
the Secured Property or any extension thereof, or consent to or permit any such
demolition, removal, construction, restoration, addition or alteration without
Beneficiary's prior written consent, except for (l) tenant improvement work
provided for in any Lease in effect on the date hereof and in any other current
or future Lease
32
approved
or deemed approved by Beneficiary in writing, and (2) ordinary, non-structural
maintenance and repair work.
1.05H.
Parking. Trustor
shall comply with all Legal Requirements for parking and shall
grant no parking rights in the Secured Property other than those provided for in
existing Leases
and in new Leases so long as any parking rights granted in such new Leases will
not impair Trustor's ability to fulfill its obligations under existing Leases,
except with Beneficiary's prior written consent. The Secured Property shall
contain at all times not less than one thousand seventy (1070) regular and
handicap parking spaces for compact and standard automobiles, of which one
hundred thirty-seven (137) parking spaces shall be located upon the Land in a
subterranean executive parking structure and of which nine hundred thirty-three
(933) parking spaces, to which Trustor has use and access rights pursuant to the
Reciprocal Easement Agreement, shall be located in the Parking Structure (as
defined in the Reciprocal Easement Agreement). If any part of the automobile
parking areas included within the Secured Property is taken by condemnation or
such areas are otherwise reduced, Trustor shall provide alternative parking
facilities in kind, size and location as required to comply with (i) all Leases
and with the parking requirements set forth herein, or (ii) all Leases and all
Legal Requirements for parking, and Beneficiary reasonably determines, taking
into consideration such alternative parking facilities, that the taking of any
parking spaces will not have a material adverse effect on the marketability of
the Secured Property. Any lease or other contract for such facilities must be
assignable and must be otherwise in form and substance satisfactory to
Beneficiary. Within a reasonable period of time after entering into any such
lease or other contract, Trustor will furnish to Beneficiary satisfactory
assurance of the availability of such alternative parking facilities in
conformity with all Leases and Legal Requirements.
1.05I.
Entry
on Secured Property. Upon not
less than two (2) business days prior written notice (except in case of an
emergency or after an Event of Default has occurred, in which
event no prior notice shall be necessary), Beneficiary or its representatives
may enter upon and
inspect the Secured Property at all reasonable times.
l.05J.
No
Consent to Alterations or Repairs. Nothing
contained in this Deed of Trust shall in any way constitute the consent or
request of Beneficiary, expressed or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of any materials for any specific improvement,
alteration or repair of the Secured Property or any part thereof.
1.05K.
Preservation
of Lien; Mechanic's Liens. Trustor
shall do or cause to be done everything necessary so that the lien of this Deed
of Trust shall be fully preserved, at the sole cost of Trustor. Trustor shall
discharge, pay or bond, or cause to be discharged, paid or bonded, from time to
time when the same shall become due, all lawful claims and demands of mechanics,
material men, laborers and others which, if unpaid, might result in, or permit
the creation of, a lien on the Secured Property or any part thereof, or on the
revenues, rents, issues, income or profits arising therefrom.
1.05L.
Use of
Secured Property by Trustor. Trustor
shall use, or cause to be used, the Secured Property principally and
continuously as and for a first-class office building.
33
Trustor
shall not use, or permit the use of, the Secured Property or any part thereof,
for any other principal use without the prior written consent of Beneficiary.
Trustor shall not initiate or acquiesce to any change in any zoning or other
land use classification now or hereafter in effect and affecting the Secured
Property or any part thereof without in each case obtaining Beneficiary's prior
written consent thereto.
l.05M.
Use of
Secured Property by Public. Trustor
shall not suffer or permit the Secured Property, or any part thereof, to be used
by the public as such, without restriction or in such manner as might impair
Trustor's title to the Secured Property or any part thereof, or in such manner
as might make possible a claim or claims of adverse usage or adverse possession,
or of any implied dedication to the public of the Secured Property or any part
thereof.
1.05N.
Management.
Management of the Premises shall be reasonably satisfactory to Beneficiary and
shall be performed by Trustor or a management company approved in writing by
Beneficiary and under a management contract satisfactory to Beneficiary, which
management contract shall be subject and subordinate to the rights and title of
Beneficiary under this instrument. By its acceptance of this Deed of Trust,
Beneficiary acknowledges that it has consented to the management of the Secured
Property by Commonwealth Partners Management Services, L.P.
1.050.
Permitted
Contests. If, and
for so long as, Trustor is not in default pursuant to any of the Loan
Instruments, Trustor shall have the right, after prior notice to Beneficiary, to
contest, by appropriate legal proceedings, diligently conducted in good faith
and without cost or expense to Beneficiary, the validity or application of any
Legal Requirement, subject to the following:
(1) Such
contest shall not subject Beneficiary or Trustor to any civil or criminal
liability;
(2) By the
terms of any such Legal Requirement, compliance therewith pending the
prosecution of any such legal proceedings may legally be delayed without
incurring (or increasing the risk of incurring) any damage or injury of any kind
to the Secured Property or any Person or property and without incurring any lien
or charge of any kind against the Secured Property or any fine or penalty
against Trustor, Trustor may delay compliance therewith until the final
determination of such legal proceedings; and;
(3) Such
contest shall not cause a breach of any of the terms, conditions or covenants of
any Lease or other agreement on Trustor's part to be performed.
1.06
Financial
Information.
l.06A.
Financial
Statements. Trustor
shall keep and maintain complete and accurate books and records of the earnings
and expenses of the Secured Property and, without expense to Beneficiary,
furnish to Beneficiary, within one hundred twenty (120) days after the end of
each fiscal year of Trustor, including the fiscal year during which the Loan is
closed, an annual financial statement prepared by Trustor and certified by an
independent certified public
34
accountant
reasonably satisfactory to Beneficiary, in accordance with generally accepted
and/or fair market value accounting principles relating to real estate
consistently applied, which shall include: (1) a balance sheet with respect to
the Secured Property, (2) a statement of cash flows by Trustor with respect to
the Secured Property, and (3) a detailed operating statement relating to the
ownership and operation of the Secured Property, including, all rents and other
income derived therefrom and all operating and depreciated or amortized portion
of capital expenses paid or incurred in connection therewith. Together with the
annual financial statements, Trustor shall furnish to Beneficiary a certified
rent roll with respect to the Secured Property and other pertinent information
regarding the leasing of the Secured Property as may be reasonably required by
Beneficiary. In addition to such annual financial statements and rent roll,
Trustor shall furnish to Beneficiary such interim financial statements,
including any of the information described in the foregoing clauses (1) through
(3), and such interim rent rolls as Beneficiary shall require, provided,
however, that Trustor shall not be required to furnish such interim financial
statements and such interim rent rolls more frequently than quarterly. Trustor
shall also furnish, or cause to be furnished, to Beneficiary, within one hundred
twenty (120) days after the end of each fiscal year of each Other Guarantor, if
any, including the fiscal year during which the Loan is closed, an annual
audited financial statement for each Other Guarantor, prepared and certified by
an independent, certified public accountant, reasonably satisfactory to
Beneficiary, in accordance with generally accepted accounting principles,
consistently applied, which shall include a balance sheet, a statement of cash
flows and statement of profit and loss.
l.06B.
Right
to Inspect Books and Records.
Beneficiary or its representatives shall have the right to examine and make
copies of all books and records and all supporting vouchers and data related to
the Secured Property. Such examination may occur at the Secured Property or at
Trustor's principal place of business and shall be at Trustor's sole cost and
expense.
1.07
Condemnation.
1.07A.
Beneficiary's
Right to Participate in Proceedings. If the
Secured Property, or any part thereof, shall be taken in condemnation
proceedings or by exercise of any right of eminent domain (collectively,
"Condemnation
Proceedings"),
Beneficiary shall have the right to participate in any such Condemnation
Proceedings and all awards or payments (collectively, "Award") that may
be made in any such Condemnation Proceedings are hereby assigned to Beneficiary
(on behalf of the Note Holders), and shall be deposited with Beneficiary and
applied in the manner set forth in this Section
1.07. Trustor
shall give Beneficiary immediate notice of the actual or threatened commencement
of any Condemnation Proceedings affecting all or any part of the Secured
Property, including all such Condemnation Proceedings as to severance and
consequential damage and change in grade in streets, and will deliver to
Beneficiary copies of any and all papers served or received in connection with
any Condemnation Proceedings. Notwithstanding the foregoing, Beneficiary is
hereby authorized, at its option, to commence, appear in and prosecute in its
own or Trustor's name any action or proceeding relating to any Condemnation
Proceedings and to settle or compromise any claim in connection therewith,
provided, however, that unless an Event of Default has occurred that has not
been waived in writing by Beneficiary or as to which Beneficiary has not agreed
in writing to extend the applicable cure period, Beneficiary shall not settle
any such claim without Trustor's participation
35
therein.
Trustor and Beneficiary shall cooperate with each other in connection with any
such Condemnation Proceedings, including negotiations for a possible settlement.
No settlement for the damages sustained in connection with any Condemnation
Proceedings shall be made by Trustor without Beneficiary's prior written
approval. Trustor shall execute any and all further documents that may be
required in order to facilitate the collection of each Award.
1.07B.
Application
of Condemnation Award. (l) If
at any time title or temporary possession of the whole or any part of the
Secured Property shall be taken in any Condemnation Proceeding or pursuant to
any agreement among Trustor, Beneficiary and/or those authorized to exercise the
right of condemnation, subject to Section
1.07B(2),
Beneficiary, in its discretion and without regard to the adequacy of its
security hereunder, shall have the right to apply any Award received to payment
of the Obligations whether or not due, in such order as Beneficiary shall
determine, in which event Trustor shall not be liable for the Make-Whole Amount
on any portion of the Obligations that are prepaid by such application of the
Award. If all or substantially all of the Secured Property is taken and the
amount of the Award received by Beneficiary is not sufficient to pay the then
unpaid balance of the Obligations, the balance of the Obligations shall, at the
option of Beneficiary, become immediately due and payable and Trustor shall,
within ten (10) days after notice to Trustor that Beneficiary has so applied the
Award, pay the difference between such balance and the amount of the Award.
"Substantially all of the Secured Property" shall be deemed to have been taken
if the balance of the Secured Property, in the opinion of Beneficiary, (a)
cannot be restored to a self-contained and architecturally complete unit or
units or (b) the balance of the Secured Property as restored will not be
economically viable and capable of supporting all carrying charges and operating
and maintenance expenses.
(2)
Notwithstanding any provision contained herein to the contrary, but subject to
the provisions of Section
l.07B(3), if less
than substantially all of the Secured Property shall be taken in a Condemnation
Proceeding (except for a taking (a) of more than thirty-five percent (35%) of
the leaseable area of the Improvements, (b) of parking spaces that would prevent
Trustor from complying with (i) all Leases and the parking requirements set
forth in Section
1.05H, or (ii)
all Leases and all Legal Requirements and Beneficiary reasonably determines that
the taking of any parking spaces will not have a material adverse effect on the
marketability of the Secured Property, provided, however, that
Beneficiary may consider evidence of alternative off-site parking in lieu of the
foregoing provided that such parking (w) is pursuant to a long term agreement,
which agreement and the rights thereunder shall be assignable to Beneficiary,
(x) is located within two blocks of the Secured Property, or, if not located
within two blocks of the Secured Property, is located within two miles of the
Secured Property and shuttle van service is provided in accordance with the
terms of the Leases, (y) is equal to or greater than the number of parking
spaces taken in a Condemnation Proceeding, and (z) shall not trigger any Lease
termination, and/or (c) that affects access to the Premises or any part thereof
from a public right of way), Beneficiary shall, after deducting Beneficiary's
costs in connection with collection, review and disbursement related to the
Award and the Condemnation Proceeding, apply the balance of the Award to the
cost of restoring, repairing or altering the remaining portion of the Secured
Property, subject to the provisions of Section
1.03(H) (which
provisions shall apply in all respects except that any reference therein to
Proceeds shall be deemed to refer to the Award, provided that Trustor shall
comply with the requirements of Section
1.03H(1)(e) to the
extent reasonably practicable given the nature and extent of the
36
taking),
and Trustor will promptly restore, repair or alter the remaining Secured
Property, subject to the provisions of Section
1.03(H). The
provisions of this Section
1.07(B)(2) shall
not apply unless Trustor shall furnish to Beneficiary evidence reasonably
satisfactory to Beneficiary that the Secured Property, as so restored,
reconstructed or altered, and its use would fully comply with all Legal
Requirements. The balance of the Award so deposited with Beneficiary, after
disbursement in accordance with this Section
1.07(B)(2), shall be
applied to the payment of the Obligations, whether or not due, in such order as
Beneficiary shall determine, in which event Trustor
shall riot be liable for the Make-Whole Amount on any portion of the Obligations
that are prepaid
by such application of the Award. The Award and other sums deposited with
Beneficiary, until disbursed or applied as provided in this Section
1.07)B)(2), may be
commingled with the general funds of Beneficiary, shall constitute additional
security for the Obligations, and shall not bear interest.
(3) In
all cases in which any taking occurs during the last twelve (12) months prior to
the Maturity Date or in Beneficiary's judgment, Trustor is not proceeding with
the repair or restoration in a manner that would entitle Trustor to have the
Award disbursed to it, Beneficiary, without regard to the adequacy of its
security hereunder, shall have the right to apply the Award to payment of the
Obligations, whether or not due, in such order as Beneficiary shall
determine.
l.07C.
Reimbursement
of Costs. In the
case of any taking covered by the provisions of this Section
l.07,
Beneficiary (to the extent that Beneficiary has not been reimbursed therefor by
Trustor) shall be entitled, as a first priority, to reimbursement out of any
Award for all reasonable costs, fees, and expenses incurred in the determination
and collection of the Award.
1.07D.
Existing
Obligations.
Notwithstanding any taking by Condemnation Proceedings or any application of the
Award to the Obligations, Trustor shall continue to pay the monthly installments
due pursuant to the Note, as well as all other sums secured by this Deed of
Trust. If prior to Beneficiary's receipt of the Award, the Secured Property
shall have been sold through foreclosure of this Deed of Trust or other similar
proceeding, Beneficiary shall have the right to receive the Award to the extent
that any portion of the Obligations are still unpaid after application of the
proceeds of the foreclosure sale or similar proceeding, with interest thereon at
the Increased Rate, plus attorneys' fees and other costs and disbursements
incurred by Beneficiary in connection with the collection of the Award and in
establishing the amount of, and collecting, any deficiency. The application of
the Award to the Obligations, whether or not then due or payable, shall not
postpone, xxxxx or reduce any of the periodic installments of interest or
principal thereafter to become due pursuant to the Note or this Deed of Trust
until the Obligations are paid and performed in full.
1.08 Leases.
1.08A.
Performance
of Lessor's Covenants. Trustor,
as lessor, has entered and will enter into leases or licenses with tenants, as
lessees or licensees, respectively, for parts or all of the Secured Property
(all such leases and licenses are hereinafter referred to individually as a
"Lease" and
collectively as "Leases" and the
lessees or licensees under such Leases are
37
hereinafter
referred to individually as a "Lessee" and
collectively as "Lessees"). Trustor
shall faithfully perform the lessor's covenants under the Leases. Trustor shall
neither do, nor neglect to do, nor permit to be done (other than enforcing the
terms of such Leases and exercising the lessor's remedies thereunder following a
default or event of default on the part of any Lessee in the performance of its
obligations pursuant to the Lease), anything which may cause the modification or
termination of any of the Leases, except as permitted hereunder, or of the
obligations of any Lessee or any other person claiming through such Lessee, or
which may diminish or impair the value of any Lease or the rents provided for
therein, or the interest of the lessor or of Beneficiary therein or thereunder.
Each Lease shall make provision for the attornment of the Lessee thereunder to
any person succeeding to the interest of Trustor as the result of any judicial
or nonjudicial foreclosure or transfer in lieu of foreclosure hereunder, such
provision to be in form and substance approved by Beneficiary.
1.08B.
Notice
of Default. Trustor
shall, within five (5) business days after the occurrence thereof, give
Beneficiary notice of any notice of a material default or of any Event of
Default, given to or received from any Lessee or from any other Person with
respect to any Lease and shall furnish Beneficiary with a copy of each such
notice.
l.08C.
Representations
Regarding Leases. Trustor
represents and warrants to the Note Holders that, except as disclosed in the
rent roll for the Secured Property or in the schedule attached to the Rent Roll
Certification delivered by Trustor to Beneficiary as a condition precedent to
the making of the Loan (1) all representations made by it in the Leases are
true; (2) all Improvements and the leased space demised and let, other than on
going build-outs, pursuant to each Lease have been completed to the satisfaction
of the applicable Lessee; (3) each Lessee is in possession of its leased space,
has opened for business and has commenced payment of Rent under its Lease except
as set forth in the respective tenant estoppel certificate delivered to
Beneficiary prior to the date hereof; (4) all Rents and other charges due and
payable under the Leases have been paid; (5) no Rent has been prepaid more than
one (l) month in advance, except as expressly provided pursuant to the
applicable Lease; (6) there is no existing default or breach of any covenant or
condition on the part of any lessor under any Lease or, to the best of Trustor's
knowledge, any Lessee; (7) there are no options to purchase all or any portion
of the Secured Property contained in any Lease; (8) there are no options to
renew, cancel, extend or expand by any Lessee except as stated in the Leases;
(9) there are no amendments of or modifications to any Leases except as
disclosed in writing to Beneficiary; (10) Trustor is the absolute owner of each
Lease with full right and title to assign the same and the Rents thereunder to
Beneficiary (on behalf of the Note Holders); (11) each Lease is valid and in
full force and effect; (12) there is no outstanding assignment or pledge thereof
or of the Rents due or to become due; (13) to the best of Trustor's knowledge,
no Lessee has any defense, set-off or counterclaim against Trustor; (14) no
Rents payable pursuant to any Lease have been or will be anticipated,
discounted, released, waived, compromised or otherwise discharged, except as may
be expressly permitted by such Lease; and (15) subject to the terms of such
Leases as modified, if applicable, by a subordination, non-disturbance and
attornment agreement executed by the Lessee thereunder and Beneficiary, all
Leases are subject and subordinate to this Deed of Trust.
108D.
Covenants
Regarding Leases. (I) All
future Leases, amendments, modifications, renewals and terminations shall be
subject to Beneficiary's approval.
38
(e)
(f) (g)
(i) (j)
Furthermore,
unless Beneficiary provides its prior written consent in each instance, which
consent shall not be unreasonably withheld, delayed or conditioned, Trustor
shall not:
(a) |
cancel,
terminate or accept a surrender, or suffer or permit any cancellation,
termination or surrender, of any Lease or any guaranty of any
Lease; |
(b) modify or
amend any Lease so as to (i) reduce the term thereof or the Rents payable
thereunder, (ii) change any renewal provision contained therein, (iii) otherwise
materially increase any obligation of Trustor thereunder, or (iv) materially
reduce any obligation of any Lessee thereunder;
(c)
commence any summary proceeding or other action to recover possession of any
space demised pursuant to any Lease, other than a proceeding brought in good
faith by reason of a default of any Lessee of which Trustor has provided written
notice to Beneficiary;
(d) receive
or collect, or permit the receipt or collection of, any Rents for more than one
month in advance of the payment due dates;
take any
other action with respect to any Lease which would materially impair the
security of Beneficiary pursuant to the Assignment or this Deed of
Trust;
extend
any Lease term other than substantially in accordance with the terms presently
provided for therein;
execute
any agreement or instrument, or create or permit a lien, which may be superior
to any Lease;
(h) suffer or
permit to occur any release of liability of any Lessee or the accrual of any
right in any Lessee to withhold payment of any Rent;
sell,
assign, transfer, deed of trust, pledge or otherwise dispose of or encumber,
whether by merger, consolidation, operation of law or otherwise, any Lease or
any Rents;
alter,
modify or change the material terms of any guaranty of any Lease or consent to
the release of any party thereto;
(k)
request, consent, agree to, or accept the subordination of any Lease to any deed
of trust (other than the Deed of Trust) or other encumbrance now or hereafter
affecting the Premises; or
(l)
consent to the assignment of any Lease or any subletting of the Premises demised
pursuant to any Lease, except as expressly permitted in such Lease, as may be
modified or amended in accordance with the provisions of this
Section.
39
Notwithstanding
the foregoing, Trustor may execute renew, modify, amend, or terminate Leases
without Beneficiary's prior written consent provided that:
a. no Event
of Default has occurred under any of the Loan Instruments;
b. the
premises of such new Lease (or Lease renewal, modification, amendment,
termination as the case may be) does not demise more than the lesser of: (i) two
full floors,
or (ii) 41,600 square feet (including any contractual expansion options at
fixed rental
rates);
c. |
with
respect to the execution of a new Lease or renewal of an existing Lease,
the Lease fully-satisfies all of the New Lease Approval Conditions (as
hereinafter defined); |
d. |
with
respect to modifications, amendments and/or terminations of Leases, such
Lease modification,
amendment, or termination is not reasonably likely to have, or create,
a
material adverse impact on the value of the Secured Property;
and |
e. |
Beneficiary
receives a certified copy of the fully executed Lease, renewal, amendment,
modification or termination within ten (10) business days of it being
fully executed. |
(II) As used
herein, "New
Lease Approval Conditions" shall
mean each Lease that satisfies all of the following conditions:
(i) the Lease
term is not less than five (5) years (excluding any contractual termination
rights of Lessee) or more than fifteen (15) years (including any contractual
extension options in which the extension option rent: (A) if a fixed dollar
amount, remains unchanged and does not increase over the prior period, or
(B) if a
function of fair market rent, is less than 95% of fair market rent existing
at the time
the extension option is exercised), provided however, Trustor shall be permitted
to enter into Leases having terms less than five years provided that: (l) the
aggregate square footage of all such Leases in the Secured Property entered into
during the Loan term does not exceed 80,000 square feet, and (2) all of the
other New Lease Approval Conditions are otherwise satisfied;
the Lease
is based on terms which are not less than then-prevailing market terms
(including,
without limitation, base rent, additional rent, rent concession
amounts,
reimbursement amounts for taxes, insurance and operating expenses, and assuming
the payment of a market-based tenant improvement allowance and leasing
commission) for comparable quality office space in comparable quality office
properties in the financial district of downtown Los Angeles,
California;
(iii) the
Lease is on the standard form lease (including the form of subordination,
non-disturbance and attornment agreement) previously approved by Beneficiary
without material modification except modifications that are
commercially
40
reasonable
and are consistent with then-prevailing market terms and do not materially
adversely affect Trustor's or Beneficiary's rights and obligations;
(iv) |
the
Lease does not require the Trustor to pay for (or reimburse the Lessee
for) any tenant improvements or allowances in excess of $200,000 (with
respect to any one Lease) at any time after the first twelve (12) months
of the initial lease term; |
(v) the Lease
does not (l) grant the Lessee thereunder any purchase option, right of first
refusal or any other right to purchase all or any portion of the Secured
Property, (2) grant the Lessee thereunder any interest in the ownership of any
portion of the Secured Property or any incentives substantially equivalent to an
ownership interest in any purchase option, right of first refusal or any other
right to purchase all or any portion of the Secured Property, or (3) contain any
terms that could cause a material impairment of Beneficiary's security under any
of the Loan Instruments;
(vi) |
the
Lease is entered into on an arm's-length basis, with a bona fide
third-party Lessee not affiliated with the Trustor, or any creditor of
Trustor; |
(III)
With respect to all new Leases that require Beneficiary's approval, Beneficiary
will respond within five (5) business days of receipt of all of the following
items: (l) a copy of the final form of the lease, (2) a red-lined draft of the
Lease indicating any modifications between the final form lease approved by
Beneficiary and the draft of the Lease most recently provided to Beneficiary,
(3) a red-lined draft of the proposed Lease indicating any modifications to the
standard form lease, and (4) a summary of the economic terms of the Lease;
provided that Beneficiary shall have received, not less than ten (10) business
days earlier the most recent two (2) years of financial statements for the
proposed Lessee (if available), as well as a summary of: (a) the basic economic
terms of the Lease, and (b) a red-lined draft of the most current draft of the
proposed Lease indicating any modifications to the standard lease form. Further
provided, at the time of such request Trustor shall provide four (4) sets of
copies of the proposed Lease and the
accompanying documents described herein (one set of copies each to be sent to
the respective loan
administration offices and real estate field offices of both Beneficiary and
MassMutual with MassMutual's copies thereof delivered to c/o Babson Capital
Management Inc., 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000,
along with a cover letter clearly stating in bold, capital letters "DEEMED
APPROVED IF LENDER'S APPROVAL OR REJECTION IS NOT GIVEN WITHIN 5 BUSINESS DAYS".
If
Beneficiary fails to disapprove within the aforementioned time period, and
provided Trustor's cover letter clearly states that Beneficiary's failure to
timely respond results in a deemed approval, such Lease shall be deemed
approved. With regard to new Lease approvals and subordination, non-disturbance
and attornment agreements, Beneficiary agrees to use commercially reasonable
efforts to respond to Trustor as quickly as is commercially reasonably
possible.
1.08E.
Application
of Rents. Trustor
shall use and apply all Rents from the Secured Property first to the payment and
performance of the Obligations in accordance with the terms of the Loan
Instruments, and then to the payment of all Impositions and the costs and
expenses of management, operation, repair, maintenance, preservation,
reconstruction and
41
restoration
of the Secured Property in accordance with the requirements of this Deed of
Trust and the obligations of Trustor as the lessor under any Lease. Trustor
shall not use any Rents for purposes unrelated to the Secured Property unless
and until all current payments of the Obligations, Impositions and such costs
and expenses have been paid or provided for and adequate cash reserves have been
set aside; provided, however, that the foregoing shall not prohibit normal and
customary distributions to Trustor's members in accordance with Trustor's
operating agreement as in effect on the date hereof so long as no Event of
Default has occurred.
l.08F.
Indemnity
Against Unapproved Lease Modifications and Amendments. In the
event that Beneficiary (on behalf of the Note Holders) or any grantee or
assignee of Beneficiary takes title to, or otherwise comes into possession of,
the Secured Property and thereafter a Lessee under a Lease attorns to
Beneficiary or such other party pursuant to a Subordination, Non-Disturbance and
Attornment Agreement entered into by Beneficiary and such Lessee, Trustor hereby
indemnifies and holds Beneficiary and the other Note Holders harmless from and
against any and all claims, liabilities, costs and expenses of any kind or
nature against or incurred by Beneficiary or the other Note Holders arising out
of the enforcement by any Lessee against Beneficiary or any grantee or assignee
of Beneficiary or the other Note Holders, of any affirmative claim, cost or
expense, or any defense, abatement or right of set off under any modification or
amendment to a Lease which is binding upon Beneficiary or the other Note Holders
and which was entered into by Trustor after the date of this Deed of Trust in
violation of the requirements of Section
1.08D
hereof.
1.09 Assignment
of Leases, Rents, Income, Profits and Cash Collateral.
1.09A.
Assignment;
Discharge of Obligations. Trustor
hereby unconditionally, absolutely and presently bargains, sells, grants,
assigns, releases and sets over unto Beneficiary (on behalf of the Note Holders)
(1) all Leases and all other tenancies, occupancies, subleases, franchises and
concessions of the Land or Improvements or which in any way affect the use or
occupancy of all or any part of the Land or Improvements, and any other
agreements affecting the use and occupancy of all or any part of the Land or
Improvements, in each case, whether now or hereafter existing, and all right,
title and interest of Trustor thereunder, including all rights to all security
or other deposits, (2) all guarantees of the Obligations of any lessee, licensee
or other similar party under any of the foregoing, whether now or hereafter
existing, (3) all Lease Termination Proceeds, and (4) the Rents, regardless of
whether the Rents accrue before or after foreclosure or during the full period
of redemption. For the aforesaid purpose, Trustor does hereby irrevocably
constitute and appoint Beneficiary its attorney-in-fact, in its name, to receive
and collect all Rents, as the same accrue, and, out of the amount so collected,
Beneficiary, its successors and assigns, are hereby authorized (but not
obligated) to pay and discharge the Obligations (including any accelerated
Obligations) in such order as Beneficiary may determine and whether due or not,
and to pay the remainder, if any, to Trustor, or as otherwise required by law.
Neither this assignment nor any such action shall constitute Beneficiary as a
"mortgagee in possession" or
otherwise make Beneficiary responsible or liable in any manner with respect to
the Secured Property or the use, occupancy, enjoyment or operation of all or any
portion thereof, unless and until Beneficiary, in person or by agent, assumes
actual possession thereof. Nor shall appointment of a receiver for the Secured
Property by any court at the request of Beneficiary or by agreement with
Trustor, or the entering into possession of the Secured Property or any
part
42
thereof
by such receiver, be deemed to make Beneficiary a mortgagee-in-possession or
otherwise responsible or liable in any manner with respect to the Secured
Property or the use, occupancy, enjoyment or operation of all or any portion
thereof. The assignment of all Leases and Rents in this Section
1.09 is
intended to be an absolute, unconditional and present assignment from Trustor to
Beneficiary, on behalf of the Note Holders, and not merely the passing of a
security interest. Trustor shall, at any time or from time to time, upon request
of Beneficiary, execute
and deliver
any instrument as may be requested by Beneficiary to further evidence the
assignment and transfer to Beneficiary of Trustor's interest in any Lease or
Rents. Nothing herein shall in any way limit Beneficiary's remedies or Trustor's
Obligations under the Assignment.
1.09B.
Entry
Onto Secured Property; Lease of Secured Property. If an
Event of Default has occurred that has not been waived in writing by
Beneficiary, Beneficiary, at its option, may, on behalf of the Note Holders,
enter and take possession of the Secured Property and manage and operate the
same as provided in Section
4.01, such
management and operation to include the right to enter into Leases and new
agreements and to take any action which, in Beneficiary's judgment, is necessary
or proper to conserve the value of the Secured Property. The expenses (including
any receiver's fees, attorneys' fees and agent's compensation) incurred pursuant
to the powers herein contained shall be secured hereby. Beneficiary shall not be
liable to account to Trustor for any action taken pursuant hereto other than to
account for any Rents actually received by Beneficiary.
1.09C.
License
to Manage Secured Property.
Notwithstanding anything to the contrary contained in Section
1.09A or
Section
1.09B, so long
as there shall exist no Event of Default hereunder, Trustor shall have the
license to manage and operate the Secured Property, including the right to enter
into Leases, and collect all Rents as they accrue (but not more than one month
in advance).
l.09D.
Delivery
of Assignments. Trustor
shall execute such additional documents as may be reasonably requested from time
to time by Beneficiary, to evidence the assignment to Beneficiary, on behalf of
the Note Holders, or its nominee of any Leases now or hereafter made, such
assignment documents to be in form and content acceptable to Beneficiary.
Trustor shall deliver to Beneficiary, within forty-five (45) days after the end
of each calendar quarter or, if an Event of Default has occurred, within thirty
(30) days after Beneficiary's request a complete schedule, certified by Trustor,
of each Lease, showing the unit number, type, Lessee name, monthly rental, date
to which Rents have been paid, term of Lease, date of occupancy, date of
expiration, existing defaults, if any, and every special provision, concession
or inducement granted to such Lessee.
1.09E.
Indemnity. Trustor
shall assert no claim or liability related to Beneficiary's exercise of its
rights pursuant to this Section
l.09. Trustor
expressly waives all such claims and liabilities. Trustor hereby holds
Beneficiary and the other Note Holders harmless from and against any and all
claims, liabilities and expenses of any kind or nature (except to the extent
arising from Beneficiary's gross negligence or willful misconduct) against or
incurred by Beneficiary or the other Note Holders arising out of Beneficiary's
exercise of its rights pursuant to this Section
1.09,
including Beneficiary's management, operation or mainte-xxxxx of the Secured
Property or the collection and disposition of Rents.
43
1.10
Further
Assurances.
l.10A.
General;
Appointment of Attorney-in-Fact. Upon
request by Beneficiary, from time to time, Trustor shall prepare, execute and
deliver, or cause to be prepared, executed and delivered, to Beneficiary, all
instruments, certificates and other documents which may, in the opinion of
Beneficiary, be necessary or desirable in order to effectuate, complete, perfect
or continue and preserve the Obligations and the lien of this Deed of Trust.
Upon any failure by Trustor to do so, Beneficiary may prepare, execute and
record any such instruments, certificates and documents for and in the name of
Trustor and Trustor hereby appoints Beneficiary the agent and attorney-in-fact
of Trustor for such purposes. This power is coupled with an interest and shall
be irrevocable so long as any part of the Obligations remain unpaid or
unperformed. Trustor shall reimburse Beneficiary for all sums expended by
Beneficiary in preparing, executing and recording such instruments, certificates
and documents and such sums shall be secured by this Deed of Trust.
1.10B.
Statement
Regarding Obligations. Trustor
shall, within ten (10) business days after request by Beneficiary, furnish
Beneficiary with a written statement, duly acknowl-edged, setting forth (1) the
unpaid principal balance of the Loan and the accrued but unpaid interest
thereon, (2) whether or not any setoffs or defenses exist against the payment of
such principal or interest, and (3) if such setoffs or defenses exist, the
particulars thereof.
1.10C.
Additional
Security Instruments. Trustor,
from time to time and within fifteen (15) days after request by Beneficiary,
shall execute, acknowledge and deliver to Beneficiary such chattel mortgages,
security agreements or other similar security instruments, in form and substance
satisfactory to Beneficiary, covering all property of any kind whatsoever owned
by Trustor or in which Trustor may have any interest which, in the reasonable
opinion of Beneficiary, is necessary to the operation and maintenance of the
Secured Property or is otherwise a part of the Secured Property. Trustor, from
time to time and within fifteen (15) days after request by Beneficiary, shall
also execute, acknowledge and deliver any financing statement, renewal,
affidavit, certificate, continuation statement, supplementary mortgage or other
document as Beneficiary may request in order to perfect, preserve, continue,
extend or maintain the security interest under, and the priority of, this Deed
of Trust or such chattel mortgage or other security instrument, as a first lien.
Trustor shall pay to Beneficiary on demand all costs and expenses incurred by
Beneficiary in connection with the preparation, execution, recording, filing and
refiling of any such instrument or document, including charges for examining
title and reasonable attorneys' fees and expenses for rendering an opinion as to
the priority of this Deed of Trust and of each such chattel mortgage or other
security agreement or instrument as a valid and subsisting first lien on such
property. Neither a request so made by Beneficiary, nor the failure of
Beneficiary to make such a request, shall be construed as a release of such
property, or any part thereof, from the lien of this Deed of Trust. This
covenant and each such mortgage, chattel or other security agreement or
instrument, delivered to Beneficiary are cumulative and given as additional
security. Trustor shall pay all premiums and related costs in connection with
any title insurance policy or policies in full or partial replacement of the
title insurance policy now insuring or which will insure the lien of this Deed
of Trust.
44
l.10D.
Security
Agreement. This
Deed of Trust shall constitute a security agreement under Article 9 of the Code
with respect to the Personal Property covered by this Deed of Trust. Pursuant to
the applicable Granting Clauses hereof, Trustor has granted Beneficiary (on
behalf of the Note Holders) a security interest in the Personal Property and in
all additions and accessions thereto, substitutions therefor and proceeds
thereof for the purpose of securing all Obligations now or hereafter secured by
this Deed of Trust. The following provisions relate to such security
interest:
(1) The
Personal Property includes all now existing or hereafter acquired or arising
equipment, inventory, accounts, chattel paper, instruments, documents, deposit
accounts, investment property, letter-of-credit rights, commercial tort claims,
supporting obligations and general intangibles now or hereafter used or procured
for use on the Premises or otherwise relating to the Premises. If Trustor shall
at any time acquire a commercial tort claim relating to the Premises, Trustor
shall immediately notify Beneficiary in a writing signed by Trustor of the brief
details thereof and grant to Beneficiary (on behalf of the Note Holders) a
security interest therein and in the proceeds thereof.
(2) Trustor
hereby irrevocably authorizes Beneficiary at any time and from time to time to
file in any filing office in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (a) indicate the
collateral as "all assets used or procured for use or otherwise relating to" the
Premises or words of similar effect, or as being of equal or lesser scope or in
greater detail, and to indicate the Premises as defined, or in a manner
consistent with the term as defined, in this Deed of Trust and (b) contain any
other information required by part 5 of Article 9 of the Uniform Commercial Code
of the filing office for the sufficiency or filing office acceptance of any
initial financing statement or amendment, including whether Trustor is an
organization, the type of organization and any organizational identification
number issued to Trustor. Trustor agrees to provide any such information to
Beneficiary promptly upon request. Trustor also ratifies its authorization for
Beneficiary to have filed in any filing office in any Uniform Commercial Code
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof. Trustor shall pay to Beneficiary, from time to
time, upon demand, any and all costs and expenses incurred by Beneficiary in
connection with the filing of any such initial financing statements and
amendments, including reasonable attorney's fees and all disbursements. Such
costs and expenses shall bear interest at the Increased Rate from the date paid
by Beneficiary until the date repaid by Trustor and such costs and expenses
together with such interest, shall be part of the Obligations and shall be
secured by this Deed of Trust.
(3) Trustor
shall any time and from time to time take such steps as Beneficiary may
reasonably request for Beneficiary to obtain "control" of any Personal Property
for which
control is a permitted or required method to perfect or to insure priority of
the security interest
in such Personal Property granted hereby.
(4) Upon the
occurrence of an Event of Default, Beneficiary shall have the rights and
remedies of a secured party under the Code as well as all other rights and
remedies available at law or in equity or under this Deed of Trust.
45
(5) This Deed
of Trust constitutes a financing statement filed as a fixture filing in the
Official Records of the County Recorder of the county in which the Secured
Property is located with respect to any and all fixtures included within the
term "Secured Property"
as used herein and with respect to any goods or other personal property that may
now be or
hereafter become such fixtures.
(6) If
Trustor does not have an organizational identification number and later obtains
one, Trustor shall forthwith notify Beneficiary of such organizational
identification number.
(7) Terms
defined in the Code and not otherwise defined in this Deed of Trust have the
same meanings in this Section
l.10D as are
set forth in the Code. In the event that a term is
used in Article 9
of the
Code and also in another Article of the Code, the term used in this Section
1.10D is that
used in Article 9. The term "control", as used in this Paragraph, has the
meaning given in Section 9-104,
9-105, 9-106 or
9-107
of
Article 9
of the
Code, as applicable.
l.10E.
Preservation
of Trustor's Existence. Trustor
shall do all things necessary to preserve and keep in full force and effect its
existence, franchises, rights and privileges under the laws of the state of its
formation and of the State, and shall comply with all applicable Legal
Requirements.
1.10F.
Further
Indemnities. In
addition to any other indemnities contained in the Loan Instruments, Trustor
hereby agrees to indemnify and hold Beneficiary and the other Note Holders
harmless from and against all losses, liabilities, suits, obligations, fines,
damages, penalties, claims, costs, charges and expenses, including architects',
engineers' and attorneys' fees and disbursements which may be imposed upon,
incurred or asserted against Beneficiary or the other Note Holders by reason of:
(1) the construction of the Improvements, (2) any capital improvements,
other work or things, done in, on, under or about the Secured Property or any
part thereof,
(3) any use, nonuse, misuse, possession, occupation, alteration, repair,
condition, operation, maintenance or management of the Secured Property or any
part thereof or any street, drive, sidewalk, curb, passageway or space adjacent
thereto, except to the extent the same arise due to the gross negligence or
willful misconduct of Beneficiary, (4) any negligence or willful act or omission
on the part of Trustor, any Lessee or any agent, contractor, servant, employee,
licensee or invitee of any Lessee or of Trustor, (5)
any
accident, injury (including death) or damage to any person or property occurring
in, on, under or about the Secured Property or any part thereof or in, on, under
or about any street, drive, sidewalk, curb, passageway or space adjacent
thereto, except to the extent the same arise due to the gross negligence or
willful misconduct of Beneficiary, .(6) any default under any Loan Instrument or
any Event of Default, (7)
except as
set forth in Section II of the Letter Agreement, any lien or claim arising or
alleged to have
arisen on or against the Secured Property or any part thereof under any Legal
Requirement or any liability asserted against Beneficiary or the other Note
Holders with respect thereto, (8) any tax attributable to the execution,
delivery, filing or recording of any Loan Instrument,
(9) any contest permitted pursuant to the provisions of this Deed of Trust, or
(10) the
enforcement or attempted enforcement of this indemnity.
46
1.10G. Absence
of Insurance. The
obligations of Trustor under this Deed of Trust and the
other Loan Instruments shall not in any way be affected by (1) the absence, in
any case, of adequate insurance, (2) the amount of the insurance or (3) the
failure or refusal of any insurer to perform any obligation required to be
performed by it pursuant to any insurance policy affecting the Secured Property.
If any claim, action or proceeding is made or brought against Beneficiary or the
other Note Holders by reason of any event as to
which
Trustor
is
obligated
to indemnify Beneficiary and the other Note Holders, then, upon demand by
Beneficiary, Trustor, at Trustor's sole cost and expense, shall resist or defend
such claim, action or proceeding in Beneficiary's name, or such other Note
Holder's name, as the case may be, if necessary, by such attorneys as
Beneficiary and the other Note Holders shall approve. Notwithstanding the
foregoing, Beneficiary and the other Note Holders may engage their own
attorneys, in their discretion, to defend it or to assist in its defense, and
Trustor shall pay the fees and disbursements of such attorneys and, until so
paid, such amounts shall bear interest at the Increased Rate and shall be
secured by this Deed of Trust.
l.10H.
Lost
Note. Upon
Beneficiary furnishing to Trustor an affidavit stating that the Note has been
mutilated, destroyed, lost or stolen, Trustor shall deliver to Beneficiary, in
substitution therefor, a new note containing the same terms and conditions as
the Note, with a notation thereon of the unpaid principal balance and accrued
and unpaid interest thereon.
l.11
Transfer
or Further Encumbrances.
l.1lA.
Continuing
Ownership and Management. Trustor
acknowledges that the continuous ownership of the Secured Property and its
continuous management and operational control by Trustor are material to the
making of the Loan.
l.1lB.
Transfer
or Encumbrance of Secured Property. Trustor
shall not, without the prior written consent of Beneficiary, voluntarily or
involuntarily, by operation of law or otherwise, transfer or dispose of, or
suffer any third party to transfer or dispose of, all or any part of the Secured
Property, the Rents, or any interest therein or the management and operation by
Trustor of the Secured Property. Without limiting the generality of the
foregoing, for purposes of this Section
l.11, a
transfer or disposition of the Secured Property (or the Rents, as applicable)
or any part
thereof or interest therein shall include (1) the change of Trustor's type of
organization, jurisdiction of organization or other legal structure, (2) the
transfer of the Secured Property or any part thereof or interest therein to a
cooperative corporation or association, (3) the conversion of all or any part of
the Secured Property or interest therein to a condominium form of ownership, (4)
the execution of a contract to sell or option to purchase all or any part of the
Secured Property or any interest therein, (5) any lease for space in any
Improvements for purposes other than occupancy by the tenant, (6) any lease for
space in the Improvements containing an option to purchase, (7) except as set
forth in Section II of the Letter Agreement, any direct or indirect sale,
assignment, conveyance, transfer (including a transfer as a result of or in lieu
of condemnation) or other alienation of all or any part of the Rents or the
Secured Property or any interest therein, (8) the creation of a lien or other
encumbrance on the Secured Property or the Rents or any part thereof or interest
therein, (9) any assignment, pledge, hypothecation, grant of security interest
in, or the execution of a conditional sale or a title retention agreement with
regard to, all or any part of the Secured Property or the Rents,
(10)
47
unless
Trustor has provided Beneficiary with at least thirty (30) days prior written
notice thereof, any change of Trustor's name, place of business or, if Trustor
has more than one place of business, any change of its chief executive office,
or any change of Trustor's mailing address or organizational identification
number if it has one, (11) except as permitted in the Letter Agreement, any
sale, transfer, assignment, pledge or conversion of any ownership interest
whereby: (i) CalPERS or (ii) both CalPERS and CommonWealth Pacific no longer
directly or indirectly
retain the controlling ownership interest in Trustor, or (12) any mezzanine or
any other
financing, secured directly by any ownership interest in Trustor or any upstream
ownership interests in Trustor by the member(s) of Trustor. Any such action
described in this Section 1.1lB is
herein called a "Transfer" and all
Transfers are prohibited without the prior written consent of Beneficiary.
Notwithstanding the foregoing, reasonable and customary trade payables incurred
by Trustor that will be satisfied within sixty (60) days of incurrence shall not
constitute a Transfer. A Transfer shall also include any of the following
events, whether made directly or through an intermediary, and whether made in
one transaction or effected in more than one transaction:
(a) If
Trustor or any partner or member of Trustor is a corporation, a transfer or
disposition of any of the outstanding voting stock of Trustor or such partner or
member of Trustor or of any other corporation directly or indirectly owning or
controlling 50% or more of the voting stock of Trustor or such partner or
member, except to the extent that any such stock is publicly traded on any
generally recognized exchange such as the New York Stock Exchange, the American
Stock Exchange or NASDAQ;
(b) If
Trustor or any partner or member of Trustor is a partnership, a transfer or
disposition of any general partnership interest in Trustor or in such partner or
member of Trustor, provided, however, that the transfer of a limited partnership
interest in Trustor or in such partner or member shall not constitute a
Transfer;
(c) If
Trustor or any partner or member of Trustor is a limited liability company, a
transfer or disposition of any membership or manager interest in Trustor or in
such partner or member of Trustor, provided, however, that the transfer of up to
forty-nine percent (49%) of the non-controlling, non-manager membership
interests, in the aggregate, in Trustor or in such partner or member of Trustor
shall not constitute a Transfer; or
(d) If
Trustor or any partner or member of Trustor is a trust or other entity, a
transfer or disposition of any of the beneficial interests in Trustor or such
partner or member of Trustor.
For
purposes of the preceding sentence a Transfer shall include any direct or
indirect sale, any execution of a contract or other agreement to sell or option
to purchase such stock or such partnership, membership or other beneficial
interests, or any assignment or pledge of such stock or such
partnership, membership or other beneficial interests, including any assignment
or pledge for
security purposes. Notwithstanding the foregoing, regardless of whether or not
any transfer of (i) any
interest in Trustor or in any of its constituent entities or (ii) any voting
stock in any corporation directly or indirectly owning 50% or more of the voting
stock of Trustor or of any of its constituent entities (the "Related
Corporation"), is prohibited or not by this Section
1.11,
no
48
shareholder,
partner, member or other beneficial owner of Trustor or of any of its
constituent entities and no shareholder of any Related Corporation may pledge or
assign for security purposes any of their respective interest(s) in Trustor. Any
pledge or assignment prohibited by the previous sentence shall be included in
the term Transfer.
l.11C.
Acceleration
of Obligations. In the
event of a Transfer without the prior written consent of Beneficiary,
Beneficiary may, without limiting any other right or remedy available to
Beneficiary at law, in equity or by agreement with Trustor, and in Beneficiary's
discretion, and without regard to the adequacy of its security, accelerate the
maturity of the Note and require the payment of all then existing Obligations,
including the Make-Whole Amount provided in Section
4.06. The
giving of consent by Beneficiary to a Transfer in any one or more instances
shall not limit or waive the need for such consent in any other or subsequent
instances.
1.12
Expenses. Promptly
after Beneficiary's demand therefor, Trustor shall pay Beneficiary and the other
Note Holders for all costs and expenses, including attorneys' fees and expenses
and costs of obtaining evidence of title, incurred by Beneficiary and the other
Note Holders in connection with any action, suit, legal proceeding, claim or
dispute (a) arising under or in connection with the performance of any rights or
obligations under any Loan Instrument or affecting the Obligations or the
Secured Property, (b) involving any insurance proceeds or condemnation awards
with respect to the Secured Property, (c) to protect the security hereof, (d) as
to any concern of Beneficiary and the other Note Holders with the condition of
the Secured Property, or (e) of any other kind or nature in which Beneficiary or
the other Note Holders are made a party relating to the Secured Property or the
Loan, or appears as a party, including those related to the estate of an
insolvent or decedent or any bankruptcy, receivership, or other insolvency under
any chapter of the Bankruptcy Code (Title 11 of the United States Code), as
amended, or any other insolvency proceeding or any exercise of the power of sale
or judicial foreclosure as set forth in this Deed of Trust. If the Obligations
are referred to attorneys for collection, foreclosure or any cause set forth in
Article III, Trustor shall pay all costs and expenses incurred by Beneficiary
and the other Note Holders, including attorneys' fees and expenses, all costs of
collection, litigation costs and costs (which may be estimated as to items to be
expended after completion of any foreclosure or other action) of procuring title
insurance policies, whether or not obtained, Torrens certificates and similar
assurances with respect to title and value as Beneficiary and the other Note
Holders may deem necessary together with all statutory costs, with or without
the institution of an action or proceeding. All costs and expenses described in
this Section
1.12, with
interest thereon at the Increased Rate from the date paid by Beneficiary or the
other Note Holders to the date paid by Trustor, shall be paid by Trustor on
demand, and shall be secured by this Deed of Trust.
49
Beneficiary
upon recordation of this Deed of Trust, (b) has full power and lawful authority
to grant, bargain, sell, convey, assign, release, pledge, set over, transfer and
mortgage the Secured Property as set forth herein, (c) lawfully owns and holds
title to the Personal Property subject to no mortgage, lien, charge or other
encumbrance, and (d) does warrant and will defend the title to the Secured
Property against all claims and demands whatsoever.
2.02
Ownership
of Additional or Replacement Improvements and Personal Property. All
Improvements and Personal Property hereafter affixed, placed or used by Trustor
on the Secured Property shall be owned by Trustor free from all mortgages,
liens, charges or other encumbrances.
2.03No
Pending Material Litigation or Proceeding; No Hazardous
Materials.
2.03A.
Proceedings
Affecting Trustor. There
are no actions, suits, investigations or proceedings of any kind pending, or, to
the best knowledge and belief of Trustor, threatened, against or affecting
Trustor, or any Other Guarantor, if any, or against any shareholder, general
partner or member of Trustor or any Other Guarantor, if any, or the business,
operations, properties or assets of Trustor or any shareholder, general partner
or member of Trustor or any Other Guarantor, if any, or before or by any
Governmental Agency, which may result in any material adverse change in the
business, operations, properties or assets or in the condition, financial or
otherwise, of Trustor or any Other Guarantor, if any or any general partner or
member of Trustor or any Other Guarantor, if any, or in the ability of Trustor
to pay or otherwise perform the Obligations. To the best knowledge and belief of
Trustor, no default exists with respect to any judgment, order, writ,
injunction, decree, demand, rule or regulation of any Governmental Agency, which
might materially and adversely affect the business, operations, properties or
assets or the condition, financial or otherwise, of Trustor or any Other
Guarantor, if any, or any general partner or member of Trustor or the ability of
Trustor to pay or otherwise perform the Obligations. The foregoing
representations and warranties, to the extent they pertain to Trustor's
shareholders, general partners or members, shall not apply to
CalPERS.
2.03B.
Proceedings
Affecting Secured Property. There
are no actions, suits, investigations or proceedings of any kind pending, or, to
the best knowledge and belief of Trustor, threatened, against or affecting the
Secured Property (including any attempt or threat by any Governmental Agency to
condemn or rezone all or any portion of the Secured Property), or involving the
validity, enforceability or priority of the Loan Instruments or enjoining or
preventing or threatening to enjoin or prevent the use and occupancy of the
Secured Property or the performance by Beneficiary of the Obligations, and there
are no rent controls, governmental moratoria or environmental controls (other
than those generally imposed by federal or state law) presently in existence or,
to the best knowledge and belief of Trustor, threatened, affecting the Secured
Property.
2.03C.
No
Hazardous Material. Neither
Trustor nor, to the best knowledge and belief of Trustor and except as disclosed
in the Environmental Site Assessment, any other Person has ever:
50
(1) caused or
knowingly permitted any Hazardous Material to be placed, held, located or
disposed of, in, on, under or about the Secured Property or any part thereof or
caused or knowingly permitted, in violation of any Legal Requirement, any
Hazardous Material to be
placed, held, located or disposed of, in, on, under or about any other real
property legally or
beneficially owned (or any interest or estate which is so owned) by Trustor in
any jurisdiction now or hereafter having in effect a so-called "superlien" law
or ordinance (the effect of which superlien law or ordinance would be to permit
the creation of a lien on the Secured Property to secure any obligation), and
neither the Secured Property, nor any part thereof, nor any other real property
legally or beneficially owned (or any interest or estate therein which is so
owned) by Trustor in any jurisdiction now or hereafter having in effect a
so-called "superlien" law or ordinance or any part thereof, has ever been used
(whether by Trustor or, to the best knowledge or belief of Trustor, by any other
Person) as a dump site, storage (whether permanent or temporary) site or
transfer site for any Hazardous Material; or
(2) caused or
knowingly permitted any asbestos or underground fuel storage facility to be
located in, on, under or about the Secured Property; or
(3) discovered
any occurrence or condition on any real property adjoining the Secured Property
that could cause the Secured Property or any part thereof to be subject to any
remediation requirements or any restrictions on the ownership, occupancy,
transferability or use of the Secured Property under any Environmental
Requirement.
2.03D.
No
Litigation Regarding Hazardous Material. To the
best knowledge and belief of Trustor, no Person has brought, settled or,
threatened any litigation or administrative action or proceeding alleging the
presence, Release or threatened Release of any Hazardous Material in, on, under
or about the Secured Property.
2.04
Valid
Organization, Good Standing and Qualification of Trustor;Other
Organizational
Information. Trustor
is a duly and validly organized and existing limited liability company in good
standing under the laws of the jurisdiction of its organization, and is duly
licensed or qualified and in good standing in all other jurisdictions where its
ownership or leasing of property or the nature of the business transacted by it
makes such qualification necessary, and is entitled to own its properties and
assets and to carry on its business, all
as, and
in the places where, such properties and assets are now owned or operated or
such business is now conducted. Trustor has paid all franchise and similar taxes
in the jurisdiction in which the Secured Property is located and in all of the
jurisdictions in which it is so qualified, insofar as such taxes are due and
payable at the date of this Deed of Trust. Trustor's exact legal name is that
indicated on the signature page hereof. Trustor is an organization of the type,
and is organized in the jurisdiction, as set forth in the first paragraph of
this Deed of Trust. Trustor's organizational identification number is
00-0000000. Section
5.08
accurately sets forth Trustor's place of business or, if Trustor has more than
one place of business, its chief executive office as well as Trustor's mailing
address if different.
2.05
Authorization;
No Legal Restrictions on Performance. The
execution and delivery by Trustor of the Loan Instruments and its compliance
with the terms and conditions of the Loan Instruments have been duly and validly
authorized by all necessary corporate,
51
partnership,
membership or other applicable action by Trustor and its constituent entities
and the Loan Instruments are valid and enforceable obligations of Trustor in
accordance with the terms thereof. Neither the execution and delivery by Trustor
of the Loan Instruments, nor the consummation of the transactions contemplated
by the Loan Instruments, nor compliance with the terms and conditions thereof
will, to the best knowledge and belief of Trustor, (A) conflict with or result
in a breach of, or constitute a default under, any of the terms, obligations,
covenants or conditions or provisions of (l) any corporate charter or bylaws,
partnership agreement, limited liability company operating agreement, or other
organizational or qualification document, restriction, indenture, mortgage, deed
of trust, pledge, bank loan or credit agreement, or any other agreement or
instrument to which Trustor is now a party or by which Trustor or its properties
may be bound or affected, or (2) any judgment, order, writ, injunction, decree
or demand of any Governmental Agency, or (B) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
property or asset of Trustor pursuant to the terms or provisions of any of the
foregoing. Trustor is not in default in the performance, observance or
fulfillment of any of the terms, obligations, covenants or conditions contained
in any indenture or other agreement creating, evidencing or securing the
Obligations or pursuant to which Trustor is a party or by which the Trustor or
its properties may be bound or affected.
2.06
Compliance
With Laws. Trustor
has, to the best knowledge and belief of Trustor, complied with all applicable
Legal Requirements with respect to the conduct of its business and ownership of
its properties. No governmental orders, permissions, consents, approvals or
authorizations are required to be obtained, and no registrations or declarations
are required to be filed in connection with the execution, delivery or
performance by Trustor of its obligations under the Loan
Instruments.
2.07
Tax
Status. Trustor
has filed all United States income tax returns and all state and municipal tax
returns which are required to be filed, and has paid, or made provision for the
payment of, all taxes which have become due pursuant to such returns or pursuant
to any assessment received by Trustor. The United States income tax liability of
Trustor has been finally determined by the Internal Revenue Service and
satisfied for all taxable years up to and including the taxable year ending
2003.
2.08
Absence
of Foreign or Enemy Status; Foreign Corrupt Practices Act. Neither
the Loan, nor Trustor's use of the proceeds thereof, will violate the Trading
with the Enemy Act, as amended, or any of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto.
Without limiting the generality of the foregoing, neither Trustor, nor any
subsidiary or affiliate of Trustor, nor any member, partner or shareholder or
other beneficial owner of Mortgagor or of any such subsidiary, affiliate,
member, partner, shareholder or other beneficial owner (A) is or will become a
"blocked person" described in Section 1 of Executive Order 13224 of September
23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or (B)
knowingly engages or will engage in any dealings or transactions, or is or will
be otherwise associated, with any such blocked person. No part of the proceeds
of the Loan will be used, directly or indirectly, for any payments to any
governmental official or
52
employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the Foreign
Corrupt Practices Act of 1977, as amended.
2.09
Federal
Reserve Board Regulations. No part
of the proceeds of the Loan will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for
the purpose of buying or carrying or trading in any securities under such
circumstances as to involve Trustor in a violation of Regulation X of said Board
(12 CFR 224) or to involve any broker or dealer in a violation of Regulation T
of said Board (12 CFR 220). Margin stock does not constitute more than 0% of the
value of the consolidated assets of Trustor and its subsidiaries, if any, and
Trustor does not have any present intention that margin stock will constitute
more than 0% of the value of such assets. As used in this Section, the terms
"margin stock" and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation U.
2.10
Investment
Company Act and Public Utility Holding Company Act. Neither
Trustor, nor any subsidiary of Trustor, if any, is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act as amended.
2.11
Exempt
Status of Transactions Under Securities Act and Representations
Relating Thereto. Neither
Trustor, nor anyone acting on its behalf, has (a) solicited offers to make all
or any part of the Loan, from more than fifty (50) Persons or (b) otherwise
approached, negotiated or communicated with more than fifty (50) Persons
regarding the making of all or any part of the Loan by such Person(s). The
number of Persons solicited approached, negotiated or communicated with by
Trustor or anyone acting on its behalf under clauses (a) or (b) shall not cause
the Loan to be deemed a "security" under any state or federal law applicable to
any party to this Deed of Trust. Neither Trustor, nor anyone acting on its
behalf has taken, or will take, any action that would subject the making of the
Loan to the registration requirements of Section 5 of the Securities Act of
1933, as amended.
2.12 ERISA
Compliance.
2.12A.
Neither Trustor nor any of its Covered Constituent Entities (as hereinafter
defined) is or will be an "employee benefit plan" as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 ("ERISA") that is
subject to Title I of ERISA or a "plan" as defined in Section 4975(e)(1)
of the
Internal Revenue Code of 1986 ("IRC") that is subject to Section 4975 of the
IRC, and neither the assets of Trustor nor the assets of any of its Covered
Constituent Entities are or will constitute "plan assets" of one or more such
plans for purposes of Title I of ERISA or Section 4975 of the IRC. As used in
this Deed of Trust, the term "Covered
Constituent Entity" shall
mean any entity that holds a direct or indirect interest in Trustor apart from
any such entity (l) which is a publicly offered security within the meaning of
29 CFR §2510.3-101(b)(2), (2) whose interest in Trustor does not constitute part
of a significant equity participation by benefit plan investors within the
meaning of 29 CFR §2510.3-101(f), or (3) whose interest in Trustor is an
"operating company," "venture capital operating company" or
53
"real
estate operating company" within
the meaning of 29 CFR §2510.3-101(c), (d) or (e), respectively.
2.12B.
Trustor is not and will continue not to be a "governmental plan" within the
meaning of Section 3(32) of ERISA. and transactions by or with Trustor are not
and will not be subject to any Legal Requirements regulating investments of and
fiduciary obligations with respect to governmental plans.
2.12C.
Trustor will not engage in any transaction which would cause any obligation or
any action under the Loan Instruments, including Beneficiary's exercise of the
remedies available to Beneficiary pursuant to the Loan Instruments or at law or
equity, to be a non-exempt prohibited transaction under ERISA.
2.12D.
Trustor represents and warrants to the Note Holders that any liability that
Trustor (or any of its affiliates) may have in respect of an employee benefit
plan as defined in Section 3(3) of ERISA has been and shall continue to be
satisfied in full.
2.13
Reciprocal
Easement Agreement. The
Reciprocal Easement Agreement is in full force and effect. Trustor is not in
default in the performance of its obligations under the Reciprocal Easement
Agreement, and, except with respect to the parking rights granted by EYP
Realty,
LLC to the Government Services Agency on levels 12 and 13 of the Parking
Structure, as
disclosed in that certain Estoppel Certificate dated as of June 30, 2004
executed by 777 Tower Associates addressed to Trustor, to Trustor's knowledge,
no other party thereto is in default in the performance of its obligations under
the Reciprocal Easement Agreement. South Xxxxxxxx Plaza Associates, a California
general partnership, Trustor's predecessor in interest with respect to the
Secured Property, has assigned to Trustor all of its right, title and interest
in and to the Reciprocal Easement Agreement and all consents and approvals
necessary for such assignment have been obtained. Trustor's interest in the
Reciprocal Easement Agreement is not subordinate to any mortgage, deed of trust
or other encumbrance.
ARTICLE
III DEFAULTS
3.01
Events
of Default. The
existence of any of the following circumstances shall be deemed an
"Event of Default" pursuant to this Deed of Trust, without cure or grace period
unless
expressly otherwise provided herein:
3.01A. if
Trustor fails to pay any portion of the Obligations as and when the same shall
become due and payable as provided in the Loan Instruments or, if no date is
specified for the payment of any such Obligation in the Loan Instruments,
Trustor fails to pay such Obligation within ten (10) days after written notice
from Beneficiary; or
3.01B. if
Trustor fails to perform or observe any other term, provision, covenant or
agreement in the Loan Instruments other than as described in the other clauses
of this Section
54
3.01 and
such failure continues for thirty (30) days following written notice from
Beneficiary; provided, however, if such failure is susceptible of cure but can
not be reasonably cured within such thirty (30) day period, Trustor shall have
an additional sixty (60) days in which to complete such cure provided Trustor
commences such cure during such initial thirty (30) day period and diligently
prosecutes the same to completion; or
3.01C. if
any representation, warranty, certification, financial statement or other
information made or furnished at any time pursuant to the terms of the Loan
Instruments or otherwise, by or on behalf of Trustor, any Other Guarantor, if
any or any Person liable for the Obligations, shall prove to be materially
false; or
3.01D. if
Trustor shall:
(l) apply
for, consent to or acquiesce in the appointment of a receiver, trustee or
liquidator of Trustor or of all or any part of Trustor's assets or the Secured
Property or any interest in any part thereof (the term "acquiesce" includes the
failure to file a petition or motion to vacate or discharge any order, judgment
or decree providing for such appointment within twenty (20) days after the
appointment); or
(2)
commence a voluntary case or other proceeding in bankruptcy, or admit in writing
its inability to pay its debts as they come due; or
(3) make
a general assignment for the benefit of creditors; or
(4) file a
petition or an answer seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief for itself under any
present or future bankruptcy code or any other statute or law relating to
bankruptcy, insolvency or other relief for debtors; or
(5) file an
answer admitting the material allegations of, or consent to, or default in
answering, a petition filed against it in any bankruptcy, reorganization or
insolvency case or proceeding; or
3.01E. if
a court of competent jurisdiction enters an order for relief against Trustor
under any present or future bankruptcy code or any other statute or law relating
to bankruptcy, insolvency or other relief for debtors, which order shall
continue unstayed and in effect for any period of ninety (90) consecutive days;
or
3.01F. if
a court of competent jurisdiction enters an order, judgment or decree
adjudicating Trustor insolvent, approving a petition seeking reorganization or
arrangement of Trustor or appointing a receiver, custodian, trustee or
liquidator of Trustor or of all or any part of Trustor's assets or the Secured
Property or any interest in any part thereof, and such order, judgment or decree
shall continue unstayed and in effect for any period of ninety (90) consecutive
days; or
55
3.01G. if
Trustor assigns or purports to assign the whole or any part of the Rents arising
from the Secured Property or any part thereof without the prior written consent
of Beneficiary; or
3.01H. if
a Transfer shall occur without the prior written consent of Beneficiary;
or
3.01I. if
Trustor shall be in default beyond any applicable grace period pursuant to any
other mortgage, security instrument or other agreement affecting Trustor or any
substantial part of its assets or all or any part of the Secured Property;
or
3.01J. if
any mechanic's, laborer's or materialman's lien, federal tax lien, broker's lien
or other lien not permitted hereunder and affecting the Secured Property or any
part thereof is not discharged, by payment, bonding, order of a court of
competent jurisdiction or otherwise, within thirty (30) days after Trustor
receives notice thereof from the lienor or from Beneficiary.
3.01K. if
any of the events described in Section
3.01(D), Section
3.01(E) and/or
Section
3.01(F) shall
occur in respect of any Other Guarantor, if any; or
3.01L. if
a default by any Other Guarantor shall occur under any guaranty, specifically
excluding the Guaranty, indemnity agreement, letter of credit or other type of
credit enhancement or other instrument which it has executed in connection with
the Loan other than a monetary default or a default pursuant to Section
3.01(K) or
Section
3.01(M) and such
default continues for thirty (30) days following written notice from
Beneficiary; provided, however, if such failure is susceptible of cure but can
not be reasonably cured within such thirty (30) day period, Trustor shall have
an additional sixty (60) days in which to complete such cure provided Trustor
commences such cure during such initial thirty (30) day period and diligently
prosecutes the same to completion;
3.0lM. if
any Other Guarantor shall contest, repudiate or purport to revoke any guaranty,
indemnity agreement or other instrument which it has executed in connection with
the Loan for any reason or if any such guaranty, indemnity or other instrument
shall cease to be in full force and effect as to the Other Guarantor or shall be
judicially declared null and void as to the Other Guarantor, if any, or if any
Other Guarantor shall be liquidated, dissolved or wound-up; or
3.0lN. if
an event of default shall occur and continue beyond any applicable notice or
cure period by Trustor under the Reciprocal Easement Agreement or the Reciprocal
Easement Agreement shall cease to be in full force and effect for any
reason.
ARTICLE
IV
REMEDIES
56
4.01
Acceleration,
Foreclosure, etc. Upon the
happening of any Event of Default, Beneficiary may (on behalf of the Note
Holders), at its sole option, declare the entire unpaid balance of the
Obligations, including, the Make-Whole Amount and any other prepayment charges,
if any, due pursuant to any Loan Instrument, immediately due and payable without
notice or demand, provided, however, simultaneously with the occurrence of an
Event of Default under Section
3.01D, 3.01E or
3.0lF,and without
the necessity of any notice or other action by the Beneficiary, all Obligations
shall automatically become and be due and payable, without notice or demand. In
addition, upon the happening of any Event of Default, Beneficiary may (on behalf
of the Note Holders), at its sole option, without further delay, undertake any
one or more of the following or exercise any other remedies available to it
under applicable law or equity:
4.01A.
Foreclosure.
Institute an action, judicial or otherwise, to foreclose this Deed of Trust, or
take such other action as may be allowed at law or in equity, for the
enforcement hereof and realization on the Secured Property or any other security
which is herein or elsewhere provided for, or proceed thereon through power of
sale or to final judgment and execution thereon for the entire unpaid balance of
the Obligations, including interest at the rate specified in the Loan
Instruments to the date of the Event of Default and thereafter at the Increased
Rate, and all other sums secured by this Deed of Trust, including all attorneys'
fees and expenses, costs of suit and other collection costs, interest at the
Increased Rate on any judgment obtained by Beneficiary from and after the date
of any sale of the Secured Property (which may be sold in one parcel or in such
parcels, manner or order as Beneficiary shall elect) until actual payment is
made of the full amount due Beneficiary pursuant to the Loan Instruments, any
law, usage or custom to the contrary notwithstanding.
4.01B.
Partial
Judicial Foreclosure.
Beneficiary shall have the right to institute an action to foreclose the lien
hereof to satisfy payment and performance of any part of the Obligations from
time to time. If an Event of Default exists as to the payment of any part of the
Obligations, as an alternative to the right of foreclosure to satisfy payment of
the Obligations after acceleration thereof, to the extent permitted by
applicable law, Beneficiary may institute partial foreclosure proceedings
("Partial
Foreclosure") with
respect to the portion of the Obligations as to which the Event of Default
exists, as if under a full foreclosure, and without declaring the entire unpaid
balance of the Obligations due. If Beneficiary institutes a Partial Foreclosure,
Beneficiary may sell, from time to time, such part or parts of the Secured
Property as Beneficiary, in its discretion, deems appropriate, and may make each
such sale subject to the continuing lien of this Deed of Trust for the
remainder, from time to time, of the Obligations. No Partial Foreclosure, if so
made, shall in any manner affect the remainder, from time to time, of the
Obligations or the priority of this Deed of Trust. As to such remainder, this
Deed of Trust and the lien hereof shall remain in full force and effect as
though no foreclosure sale had been made pursuant to the provisions of this
Section 4.01B. Notwithstanding the filing of any Partial Foreclosure or the
entry of a decree of sale therein, Beneficiary may elect, at any time prior to
any Partial Foreclosure, to discontinue such Partial Foreclosure and the
acceleration of the Obligations by reason of any Event of Default upon which
such Partial Foreclosure was predicated, and to proceed with full foreclosure
proceedings. Beneficiary may commence a Partial Foreclosure, from time to time,
as to any part of the Obligations without exhausting the right of full
foreclosure or Partial Foreclosure for any other part of the Obligations as to
which such Partial Foreclosure shall not have occurred. It is further agreed
that several foreclosure sales
57
may be
made pursuant to partial foreclosures without exhausting the right of full or
partial foreclosure sale for any unmatured part of the Obligations, it being the
purpose to provide for a partial foreclosure sale of the Obligations for any
matured portion of the Obligations without exhausting the power to foreclose and
to sell the Secured Property pursuant to any such partial foreclosure for any
other part of the Obligations, whether matured at the time or subsequently
maturing, and without exhausting any right of acceleration and full
foreclosure.
4.01C.
Entry.
Beneficiary personally, or by its agents or attorneys, may enter all or any part
of the Secured Property, and may exclude Trustor, its agents and servants wholly
therefrom without liability for trespass, damages or otherwise. Trustor shall
surrender possession of the Secured Property to Beneficiary on demand after the
happening of any Event of Default. Thereafter, Beneficiary may use, operate,
manage and control the Secured Property and conduct the business thereof, either
personally or by its superintendents, managers, agents, servants, attorneys or
receivers. Upon each such entry, Beneficiary, at the expense of Trustor from
time to time, either by purchase, repairs or construction, may maintain and
restore the Secured Property, may complete the construction of the Improvements
and in the course of such completion may make such changes in the contemplated
or completed Improvements as Beneficiary may deem desirable and may insure the
same. At the expense of Trustor, Beneficiary may make, from time to time, all
necessary or desirable repairs, renewals and replacements and such alterations,
additions, betterments and improvements thereto and thereon as Beneficiary may
deem advisable. In each of the circumstances described in this Section 4.01C,
Beneficiary shall have the right to manage and operate the Secured Property and
to carry on the business thereof and exercise all rights and powers of Trustor
with respect thereto, either in the name of Trustor or otherwise as Beneficiary
shall deem best.
4.01D.
Collection
of Rents, etc.
Beneficiary may collect and receive all Rents. Beneficiary may deduct, from the
monies so collected and received, all expenses of conducting the business of the
Secured Property and of all maintenance, repairs, renewals, replacements,
alterations, additions, betterments and improvements and amounts necessary to
pay for Impositions, insurance, taxes and assessments, liens or other charges
upon the Secured Property or any part thereof, as well as reasonable
compensation for the services of Beneficiary and for all attorneys, agents,
clerks, servants, and other employees engaged and employed by Beneficiary. After
such deductions and the establishment of all reasonable reserves, Beneficiary
shall apply all such monies to the payment of the unpaid Obligations.
Beneficiary shall account only for Rents actually received by
Beneficiary.
4.01E.
Receivership.
Beneficiary may have a receiver appointed to enter into possession of the
Secured Property, collect the Rents therefrom and apply the same as the court
may approve. Beneficiary may have a receiver appointed, as a matter of right
without notice and without the necessity of proving either the inadequacy of the
security provided by this Deed of Trust or the insolvency of Trustor or any
other Person who may be .legally or equitably liable to pay the Obligations.
Trustor and each such Person, presently and prospectively, waive such proof and
consent to the appointment of such receiver. If Beneficiary or any receiver
collects the Rents, the monies so collected shall not be substituted for payment
of the Obligations, nor can they be used to cure an Event of Default, without
the prior written consent of Beneficiary. Beneficiary shall not be liable to
account for Rents not actually received by Beneficiary.
58
4.01F.
Specific
Performance.
Beneficiary may institute an action for specific performance of any covenant
contained herein or in aid of the execution of any power herein
granted.
4.01G.
Recovery
of Sums Required to be Paid.
Beneficiary may, from time to time, take action to recover any sum or sums which
constitute a part of the Obligations as such sums shall become due, without
regard to whether or not the remainder 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 each Event of Default existing from time to
time.
4.01H.
Other
Remedies.
Beneficiary may take all actions permitted under the Uniform Commercial Code
of
the State
and may take any other action, or pursue any other right or remedy, as
Beneficiary may have under applicable law,
and
Trustor does hereby grant such rights to Beneficiary.
4.01I.
Power
of Sale.
Beneficiary may cause any or all of the Secured Property to be sold under the
power of sale granted by this Deed of Trust or any of the other Loan Instruments
in any manner permitted by applicable law. For any sale under the power of sale
granted by this Deed of Trust, Trustee or Beneficiary must record and give all
notices required by law and then, upon the expiration of such time as is
required by law, may sell the Secured Property,
and all estate, right, title, interest, claim and demand of Trustor therein, and
all rights of
redemption thereof, at one or more sales, as an entirety or in parcels, with
such elements of real and/or personal property (and, to the extent permitted by
applicable law, may elect to deem all of the Secured Property to be real
property for purposes thereof), and at such time or place and upon such terms as
Trustee and Beneficiary may determine and shall execute and deliver to the
purchaser or purchasers thereof a deed or deeds conveying the property sold, but
without any covenant or warranty, express or implied, and the recitals in the
deed or deeds of any facts affecting the regularity or validity of the sale will
be conclusive against all persons. In the event of a sale, by foreclosure or
otherwise, of less than all of the Secured Property, this Deed of Trust shall
continue as a lien and security interest on the remaining portion of the Secured
Property.
(1)
Subject to the provisions or other requirements of law, the following provisions
shall apply to any sale or sales of the Secured Property under or by virtue of
this Section
4.01I whether
made under the power of sale herein granted or by virtue of judicial proceedings
or of a judgment or decree of foreclosure and sale:
(a) Trustee,
at the request of Beneficiary, may conduct any number of sales from time to
time. The power of sale set forth herein shall not be exhausted by any one or
more such sales as to any part of the Secured Property which shall not have been
sold, nor by any sale which is not completed or is defective in Trustee's or
Beneficiary's opinion, until the Obligations shall have been paid in
full.
(b) Any sale
may be postponed or adjourned by public announcement at the time and place
appointed for such sale or for such postponed or adjourned sale without further
notice.
59
(c) After
each sale, Trustee, or an officer of any court empowered to do so, shall execute
and deliver to the purchaser or purchasers at such sale a good and sufficient
instrument or instruments granting, conveying, assigning and transferring all
right, title and interest of Trustor in and to the property and rights sold and
shall receive the proceeds of said sale or sales and apply the same as herein
provided. Trustee is hereby appointed the true and lawful attorney-in-fact of
Trustor, which appointment is irrevocable and shall be deemed to be coupled with
an interest, in Trustor's name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the property and rights so sold, and
for that purpose Trustee may execute all necessary instruments of conveyance,
assignment, transfer and delivery, and may
substitute one or more persons with like power, Trustor hereby ratifying and
confirming all that
said attorney or such substitute or substitutes shall lawfully do by virtue
thereof. Nevertheless, Trustor, if requested by Trustee or Beneficiary, shall
ratify and confirm any such sale or sales by executing and delivering to Trustee
or such purchaser or purchasers all such instruments as may be advisable, in
Trustee's or Beneficiary's judgment, for the purposes as may be designated in
such request.
(d) Any and
all statements of fact or other recitals made in any of the instruments
referred to in subsection (c) of this Section given by Trustee and/or
Beneficiary as to
nonpayment of the Obligations, or as to the occurrence of any Event of Default,
or as to Beneficiary having declared all or any of the Obligations to be due and
payable, or as to the request to sell, or as to notice of time, place and terms
of sale and of the property or rights to be sold having been duly given, or as
to the refusal, failure or inability to act of Trustee, or as to the appointment
of any substitute or successor Trustee, or as to any other act or thing having
been duly done by Trustor, Beneficiary, or by such Trustee, shall be taken as
conclusive and binding against all persons as to evidence of the truth of the
facts so stated and recited. Trustee and/or Beneficiary may appoint or delegate
any one or more persons as agent to perform any act or acts necessary
or incident to any sale so held, including the posting of notices and the
conduct of sale, but in
the name and behalf of Trustee or Beneficiary, as applicable.
(e) The
receipt of Trustee for the purchase money paid at any such sale, or the receipt
of any other person authorized to receive the same, shall be sufficient
discharge therefor
to any purchaser of any property or rights sold as aforesaid, and no such
purchaser, or its
representatives, grantees or assigns, after paying such purchase price and
receiving such receipt, shall be
bound to see to the application of such purchase price of any part thereof upon
or for any trust or
purpose of this Deed of Trust or, in any manner whatsoever, be answerable for
any loss, misapplication or non-application of any such purchase money, or part
thereof, or be bound to inquire as to the authorization, necessity, expediency
or regularity of any such sale.
(f) Any such
sale or sales shall operate to divest all of the estate, right, title, interest,
claim and demand whatsoever, whether at law or in equity, of Trustor in and to
the properties and rights so sold, and shall be a perpetual bar both at law and
in equity against Trustor and any and all persons claiming or who may claim the
same, or any part thereof or any interest therein, by, through or under Trustor
to the fullest extent permitted by applicable law.
60
(g) Upon any
such sale or sales, Beneficiary may bid for and acquire the Secured Property
and, in lieu of paying cash therefor, may make settlement for the purchase price
by crediting against the Obligations the amount of the bid made therefor, after
deducting therefrom the expenses of the sale, the cost of any enforcement
proceeding hereunder and any other sums which Trustee or Beneficiary is
authorized to deduct under the terms hereof, to the extent necessary to satisfy
such bid.
(h) In the
event that Trustor, or any person claiming by, through or under Trustor, shall
transfer or refuse or fail to surrender possession of the Secured Property after
any sale thereof, then Trustor, or such person shall be deemed a tenant at
sufferance of the purchaser at such
sale, subject to eviction by means of forcible entry and detainer proceedings,
or subject to any
other right or remedy available hereunder or under applicable law.
(i) Upon any
such sale, it shall not be necessary for Trustee, Beneficiary or any public
officer acting under execution or order of court to have present or
constructively in its possession any of the Secured Property.
(J) In
the event of any sale referred to in this Section, the entire Obligations, if
not previously due and payable, immediately thereupon shall, notwithstanding
anything to the contrary herein or in the other Loan Instruments, become due and
payable.
(k) In
the event a foreclosure hereunder shall be commenced by Trustee at the request
of Beneficiary, Trustee or Beneficiary may at any time before the sale of the
Secured Property abandon the sale, and may institute suit for the collection of
the Obligations and for the foreclosure of this Deed of Trust, or in the event
that Trustee or Beneficiary should institute a suit for collection of the
Obligations, and for the foreclosure of this Deed of Trust, Beneficiary may at
any time before the entry of final judgment in said suit dismiss the same and
sell or require Trustee to sell the Secured Property in accordance with the
provisions of this Deed of Trust.
(l) In
the event that any portion of the Secured Property is determined to be
"environmentally impaired" (as "environmentally impaired" is defined in
California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected
parcel" (as "affected parcel" is defined in
California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise
limiting or in any way
affecting Beneficiary's or Trustee's rights and remedies under this Deed of
Trust, Beneficiary may elect to exercise its right under California Code of
Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally
impaired or affected portion of the Secured Property and (2) exercise (i) the
rights and remedies of an unsecured creditor, including reduction of its claim
against Trustor to judgment, and (ii) any other rights and remedies permitted by
law. For purposes of determining Beneficiary's right to proceed as an unsecured
creditor under California Code of Civil Procedure Section 726.5(a), Trustor
shall be deemed to have willfully permitted or acquiesced in a release or
threatened release of hazardous materials, within the meaning of California Code
of Civil Procedure Section 726.5(d)(1), if the release or threatened release of
hazardous materials was knowingly or negligently caused or contributed to by any
lessee, occupant or user of any portion of the Secured Property and Trustor knew
or should have known of the activity by such lessee, occupant or user which
caused or contributed
61
to the
release or threatened release. All costs and expenses, including, but not
limited to, attorneys' fees, incurred by Beneficiary in connection with any
action commenced under this subparagraph including any action required by
California Code of Civil Procedure Section 726.5(b) to determine the degree to
which the Secured Property is environmentally impaired, plus interest thereon at
the maximum rate allowed by law until paid, shall be added to the Obligations
secured by this Deed of Trust and shall be due and payable to Beneficiary upon
its demand made at any time following the conclusion of such
action.
4.02
No
Election of Remedies.
Beneficiary may, in its discretion, exercise all or any of the rights and
remedies provided herein or in the other Loan Instruments, or which may be
provided by statute, law, equity or otherwise, in such order and manner and from
time to time, as Beneficiary shall elect without impairing Beneficiary's lien,
or rights pursuant to any of the Loan Instruments and without affecting the
liability of any Person for the Obligations.
4.03
Beneficiary's
Right to Release, etc.
Beneficiary may, in its discretion, from time to time, release (for such
consideration as Beneficiary may require) any part of the Secured Property (A)
without notice to, or the consent, approval or agreement of any other party in
interest, (B) without, as to the remainder of the Secured Property, in any way
impairing or affecting the validity or the lien of this Deed of Trust or any of
the other Loan Instruments, or the priority thereof and (C) without releasing
Trustor from any liability for any of the Obligations. Beneficiary may accept,
by assignment, pledge or otherwise, any other property in place of any part of
the Secured Property as Beneficiary may require without being accountable for so
doing to any other lienor or other Person. To the extent permitted by law,
neither Trustor, nor the holder of any lien or encumbrance affecting the Secured
Property or any part thereof shall have the right to require Beneficiary to
xxxxxxxx assets.
4.04
Beneficiary's
Right to Remedy Defaults, etc. If an
Event of Default has occurred in the performance by Trustor of any of the
covenants or agreements contained in this Deed of Trust or any of its other
obligations under the other Loan Instruments, or if any action or proceeding is
commenced which affects Beneficiary's interest in the Secured Property or any
part thereof, including, but not limited to, eminent domain, code enforcement,
or proceedings of any nature whatsoever under any federal or state law, whether
now existing or hereafter enacted or amended, relating to bankruptcy,
insolvency, arrangement, reorganization or other form of debtor relief, then
Beneficiary may, but without obligation to do so and without releasing Trustor
from any obligation hereunder, cure such defaults, make such appearances,
disburse such sums and/or take such other action as Beneficiary deems necessary
or appropriate to protect Beneficiary's interest, including disbursement of
attorneys' fees, entry upon the Secured Property to make repairs, payment of
Impositions or insurance premiums or otherwise cure the default in question or
protect the security of the Secured Property, and payment, purchase, contest or
compromise of any encumbrance, charge or lien encumbering the Secured Property.
Trustor further agrees to pay all expenses incurred by Beneficiary (including
fees and disbursements of counsel) pursuant to this Section
4.04,
including those incident to the curing of any default and/or the protection of
the rights of Beneficiary hereunder, and enforcement or collection of payment of
the Note or any future advances whether by judicial or nonjudicial proceedings,
or in connection with any bankruptcy, insolvency, arrangement, reorganization or
other debtor relief proceeding of Trustor, or otherwise. Any amounts disbursed
by Beneficiary
62
pursuant
to this Section
4.04 shall be
additional indebtedness of Trustor secured by this Deed of Trust as of the date
of disbursement and shall bear interest at the Increased Rate from such date
until paid by Trustor in full. All such amounts shall be payable by Trustor
immediately without demand. Nothing contained in this Section
4.04 shall be
construed to require Beneficiary to incur any expense, make any appearance, or
take any other action and any action taken by Beneficiary pursuant to this
Section
4.04 shall be
without prejudice to any other rights or remedies available to Beneficiary
pursuant to any Loan Instrument or at law or in equity.
4.05
Waivers. Trustor
waives and releases (A) all benefits that might accrue to Trustor by virtue of
any present or future laws exempting the Secured Property, or any part of the
proceeds arising from any sale of the Secured Property, from attachment, levy or
sale under execution, or providing for any stay of execution, exemption from
civil process or extension of time; (B) all benefits that might accrue to
Trustor from requiring valuation or appraisal of any part of the Secured
Property levied or sold on execution of any judgment recovered for the
Obligations; (C) all notices not herein or in any other Loan Instrument
specifically required as a result of Trustor's default or of Beneficiary's or
any other Note Holder's exercise, or election to exercise, any option pursuant
to any of the Loan Instruments; and (D) all rights of redemption to the extent
that Trustor may lawfully waive same. At no time will Trustor insist upon, plead
or in any manner whatsoever claim or take any benefit or advantage of any stay
or extension or moratorium law
or any
exemption from execution or sale of the Secured Property or any part thereof,
whenever enacted, now or at any time hereafter in force, which may affect the
covenants or terms of performance of the Loan Instruments. Similarly, Trustor
will not claim, take or insist upon any benefit or advantage of any law now or
hereafter in force providing for the valuation or appraisal
of the Secured Property or any part thereof, prior to any sale or sales thereof
which may be made
pursuant to any provision hereof, or pursuant to the decree, judgment or order
of any court of competent jurisdiction. After any such sale or sales, to the
extent permitted by law, Trustor shall not claim or exercise any right under any
law or laws heretofore or hereafter enacted to redeem the property so sold or
any part thereof. Trustor waives all benefits or advantages of any such law or
laws, and covenants not to hinder, delay or impede the execution of any power
herein granted or delegated to Beneficiary. Trustor shall suffer and permit the
execution of every such power as though no such law or laws had been made or
enacted. To the extent permitted by law, the Secured Property may be sold in one
parcel, as an entirety, or in such
parcels, manner or order as Beneficiary in its discretion may decide. To the
extent permitted by law,
neither Trustor nor the holder of any lien or encumbrance affecting the Secured
Property or any part thereof may require Beneficiary to xxxxxxxx
assets.
4.06
Prepayment. Subject
to the terms of the Note, Trustor shall pay the charge provided in the Note for
prepayment of the Obligations if for any reason (including the acceleration of
the due date of the Obligations by Beneficiary following the occurrence of an
Event of Default) any of such Obligations shall be due and payable or paid prior
to the stated maturity date thereof, whether or not such payment is made prior
to or at any sale held pursuant to or by virtue of this Article
IV.
Beneficiary has relied on Trustor's creditworthiness and its agreement to repay
the Obligations in strict accordance with the terms set forth in the Loan
Instruments,
and would not make the Loan without the promises by Trustor to make all
payments due
pursuant to the Loan Instruments and not to prepay all or any part of the
principal balance of the Note prior to the final maturity date thereof, except
on the terms expressly set forth herein
63
and in
the Note. Therefore, any prepayment of the Note, whether occurring as a
voluntary prepayment by Trustor or occurring upon an acceleration of the Note by
Beneficiary or otherwise,
will prejudice Beneficiary's ability to meet its obligations and to earn the
return on the funds
advanced to Trustor, which Beneficiary intended and expected to earn when it
made the Loan, and will also result in other losses and additional expenses to
Beneficiary. In consideration of Beneficiary making the Loan at the interest
rate and for the term set forth in the Note, Trustor expressly waives all rights
it may have under applicable law to prepay, without charge or premium, all or
any part of the Note, either voluntarily or upon an acceleration of the Note by
Beneficiary, including an acceleration upon the making or suffering by Trustor
of any transfer or disposition prohibited by Section
1.11. If a
prepayment of all or any part of the principal balance of the Note is made by or
on behalf of Trustor, for any reason, whether due to the
voluntary acceptance by Beneficiary of a prepayment tendered by Trustor, or the
acceleration of the
Note by Beneficiary, or in connection with any reinstatement of the Loan
Instruments pursuant to any foreclosure proceedings, or any right of redemption
exercised by Trustor or any other party having the right to redeem or to prevent
any foreclosure of this Deed of Trust, or upon the
consummation of any foreclosure sale, or under any other circumstances, Trustor
or any other
Person making any such prepayment shall be obligated to pay, concurrently
therewith, the Make-Whole Amount, as defined and as set forth in the Note, and
the payment of the Make-Whole Amount shall be a condition to the making of such
prepayment, and the payment of the Make-Whole Amount shall be secured by this
Deed of Trust and the other Loan Instruments. Trustor shall pay the Make-Whole
Amount without prejudice to the right of Beneficiary to collect any other
amounts due pursuant hereto or to declare a default hereunder. Nothing herein
shall be construed as permitting any partial prepayment of the Obligations,
except with Beneficiary's prior written consent thereto obtained in each
instance. Trustor hereby acknowledges that the Note contains the following
language:
"MAKER
HEREBY EXPRESSLY (i) WAIVES ANY RIGHTS IT MAY HAVE UNDER CALIFORNlA LAW TO
PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT
PENALTY, UPON
ACCELERATION OF THE MATURITY DATE, AND (ii) AGREES THAT IF, FOR ANY REASON, A
PREPAYMENT OF ALL OR ANY PORTION OF THE PRINCIPAL AMOUNT OF THIS NOTE IS MADE
INCLUDING WITHOUT LIMITATION UPON OR FOLLOWING ANY ACCELERATION OF THE MATURITY
DATE BY HOLDER ON ACCOUNT OF ANY DEFAULT BY MAKER INCLUDING, WITHOUT LIMITATION,
ANY TRANSFER, DISPOSITION, OR FURTHER ENCUMBRANCE PROHIBITED OR RESTRICTED BY
THE DEED OF TRUST, THEN MAKER SHALL BE OBLIGATED TO PAY CONCURRENTLY WITH SUCH
PREPAYMENT THE PREPAYMENT PREMIUM SPECIFIED ABOVE. BY INITIALING THIS PROVISION
IN THE SPACE PROVlDED BELOW, MAKER HEREBY DECLARES THAT (1) EACH OF THE FACTUAL
MATTERS SET FORTH IN THIS PARAGRAPH IS TRUE AND CORRECT, (2) HOLDER'S AGREEMENT
TO MAKE THE LOAN EVIDENCED BY THIS NOTE AT THE INTEREST RATE AND FOR THE TERM
SET FORTH IN THIS NOTE CONSTITUTES ADEQUATE CONSlDERATION FOR THIS WAIVER AND
AGREEMENT, AND HAS BEEN GIVEN INDIVIDUAL WEIGHT BY MAKER AND HOLDER, (3) MAKER
IS A SOPHISTICATED AND KNOWLEDGEABLE REAL
ESTATE lNVESTOR WITH COMPETENT AND INDEPENDENT LEGAL COUNSEL AND (4)
MAKER FULLY UNDERSTANDS THE EFFECT OF THIS WAIVER AND AGREEMENT."
64
ARTICLE
V
MISCELLANEOUS
5.01
Non-Waiver. The
failure of Beneficiary or any other Note Holder to insist upon strict
performance of any term of this Deed of Trust or any other Loan Instrument shall
not be deemed to be a waiver of any term of this Deed of Trust or any other Loan
Instrument. Trustor shall not be relieved of its obligation to pay and perform
the Obligations, at the time and in the manner provided in the Loan Instruments,
by reason of (A) a failure by Beneficiary or any other Note Holder to take any
action to foreclose this Deed of Trust or otherwise enforce any of the
provisions of this Deed of Trust or of any other Loan Instrument (regardless of
whether or not Trustor has requested Beneficiary or any other Note Holder to do
so), (B) the release, regardless of consideration, of the whole or any part of
the Secured Property or any other security for the Obligations, or (C) any
agreement or stipulation between Beneficiary or any other Note Holder and any
subsequent owner or owners of the Secured Property or any other Person extending
the time of payment or otherwise modifying or supplementing the terms of this
Deed of Trust or any other Loan Instrument, without first having obtained the
consent of Trustor. Trustor shall pay and perform the Obligations at the time
and in the manner provided in this Deed of Trust and the other Loan Instruments
as so extended, modified or supplemented, unless expressly released and
discharged by Beneficiary. Regardless of consideration, and without the
necessity for any notice to or consent by the holder of any subordinate lien,
encumbrance, right, title or interest in or to the Secured Property, Beneficiary
may release any Person at any time liable for the payment or performance of the
Obligations, or any part thereof, or any part of the security held for the
Obligations, and may extend the time of such payment or performance or otherwise
modify the terms of any Loan Instrument, including a modification of the
interest rate payable on the principal balance of the Note, without in any
manner impairing or affecting any of the Loan Instruments or the lien thereof or
the priority of this Deed of Trust, as so extended and modified, as security for
the Obligations over any such subordinate lien, encumbrance, right, title or
interest. Beneficiary may resort for the payment and performance 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
require payment and performance of the Obligations, or any part thereof, or to
enforce any term of this Deed of Trust, without prejudice to the right of
Beneficiary thereafter to foreclose this Deed of Trust. In addition to the
rights and remedies stated in this Deed of Trust, Beneficiary may, on behalf of
the Note Holders, exercise every additional right and remedy now or hereafter
afforded by law or in equity. Each right of Beneficiary pursuant to this Deed of
Trust shall be separate, distinct and cumulative, and no such right shall be
given effect to the exclusion of any other. No act of Beneficiary or any other
Note Holder shall be construed as an election to proceed pursuant to any one
provision of this Deed of Trust to the exclusion of any other
provision.
5.02
Sole
Discretion of Beneficiary. Whenever
pursuant to this Deed of Trust (A) Beneficiary exercises any right to approve or
disapprove or to give or withhold its consent, (B) any arrangement or term is to
be satisfactory to Beneficiary, or (C) any other decision or determination is to
be made by Beneficiary, Beneficiary may give or withhold such approval or
consent, determine whether or not such arrangement or term is satisfactory, and
make all other
65
decisions
or determinations, in Beneficiary's sole and absolute discretion, and
Beneficiary's decision shall be final and conclusive except where this Deed of
Trust expressly provides to the contrary. If Trustor shall seek the consent or
approval of Beneficiary pursuant to this Deed of Trust and Beneficiary shall
fail or refuse to give such consent or approval, Trustor shall not be entitled
to any damages for any withholding of such approval or consent by Beneficiary,
except, in instances where Beneficiary has expressly agreed not to unreasonably
withhold such approval or consent, to the extent that any withholding of such
approval or consent by Beneficiary constitutes willful and malicious misconduct.
Trustor's sole remedy shall be an action for injunctive or declaratory relief,
which remedy shall be available only in those cases where Beneficiary has
expressly agreed not to unreasonably withhold its consent or
approval.
5.03
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 such sums shall become
due, 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 Trustor
existing at the time such earlier action was commenced.
5.04
Legal
Tender. Trustor
shall pay all payments of principal, interest or other amounts required or
provided for herein in lawful money of the United States of America at the time
of payment, at the above described office of Beneficiary or at such other place
as Beneficiary may from time to time designate.
5.05
No
Merger or Termination. If both
the lessor's and Lessee's estates under any Lease or any portion thereof which
constitutes a part of the Secured Property shall at any time become vested in
one owner, this Deed of Trust and the lien created hereby shall not be destroyed
or terminated by the application of the doctrine of merger and in such event,
Beneficiary shall continue to have and enjoy all of its rights and privileges as
to the separate estates. In addition, the foreclosure of this Deed of Trust
shall not destroy or terminate any Lease or sublease then existing and created
by Trustor, whether by application of the law of merger or as a matter of law or
otherwise, unless Beneficiary or any purchaser at any sale related to such
foreclosure shall so elect. No act by or on behalf of Beneficiary or any such
purchaser shall constitute a termination of any Lease or sublease, unless
Beneficiary or such purchaser shall give written notice thereof to the related
Lessee or sublessee.
5.06
Discontinuance
of Actions. If
Beneficiary shall enforce any right pursuant to this Deed of Trust by
foreclosure, sale, entry or otherwise and discontinue or abandon such
enforcement for any reason or any such proceedings shall have been determined
adversely, then, in each such case, Trustor and Beneficiary shall be restored to
their former positions and rights hereunder, and the Secured Property shall
remain subject to the lien of this Deed of Trust.
5.07
Headings. The
headings of the Sections and other subdivisions of this Deed of Trust are for
the convenience of reference only, are not to be considered a part hereof, and
shall not limit or otherwise affect any of the terms hereof.
5.08
Notice, to
Parties. All
notices and demands or other communications hereunder shall be in writing, and
shall be deemed to have been sufficiently given or served for all
purposes
66
when
presented personally or sent by generally recognized overnight delivery service,
with postage prepaid, addressed to Trustor or Beneficiary, as applicable, at the
addresses stated below, or at such other address of which either Trustor or
Beneficiary may hereafter notify the other in writing:
Trustor: |
777
SOUTH FIG, LLC |
c/o
Commonwealth Partners | |
000
Xxxx Xxxxx Xxxxxx, 00xx
Xxxxx Xxx Xxxxxxx, Xxxxxxxxxx 00000 | |
Attn:
Xxxxxx Xxxxxxxx, Vice President | |
with
a copy to: |
Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP 000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000 |
Attn:
Xxxxxxx Xxxxxx, Esq. | |
Beneficiary:
|
NEW
YORK LIFE INSURANCE COMPANY c/o New York Life Insurance Management
LLC |
00
Xxxxxxx Xxxxxx | |
Xxx
Xxxx, Xxx Xxxx 00000-0000
Attn: Real Estate Group | |
Director
- Loan Administration Division
Loan Nos. 372-8499 and 372-8501 | |
With
a copy to: |
NEW
YORK LIFE INSURANCE COMPANY c/o
New York Life Insurance Management LLC 00
Xxxxxxx Xxxxxx |
Xxx
Xxxx, Xxx Xxxx 00000-0000 | |
Attn:
Office of the General Counsel | |
Managing
Director - Real Estate Section |
Each
notice or demand so given or served shall be deemed given and effective, (A) if
personally delivered, on the day of actual delivery or refusal and (B) if sent
by generally recognized overnight delivery service, on the next business day.
Notwithstanding the foregoing, service of any notice of default or notice of
sale provided or required by law shall, if mailed as required by law, be deemed
given and effective on the date of mailing.
5.09
Successors
and Assigns Included In Parties. Subject
to the provisions of Section 1.11, each
reference herein to Trustor or Beneficiary shall mean and include, the heirs,
legal representatives, successors and assigns of such Person. All covenants and
agreements contained in this Deed of Trust by or on behalf of Trustor shall bind
and inure to the benefit of Trustor's heirs, legal representatives, successors
and assigns, and all covenants and agreements by or on behalf of Beneficiary
shall bind and inure to the benefit of Beneficiary's and the other Note Holders'
respective successors and assigns.
67
5.10
Changes
and Modifications. This
Deed of Trust may only be changed or modified by an agreement in writing, signed
by both Trustor and Beneficiary.
5.11
Applicable
Law. This
Deed of Trust shall be construed and enforced according to the law of the State,
other than such law with respect to conflicts of laws.
5.12
Invalid
Provisions to Affect No Others. The
unenforceability or invalidity of any provision or provisions of this Deed of
Trust as to any Persons or circumstances shall not render that provision or
those provisions unenforceable or invalid as to any other Persons or
circumstances, and all provisions hereof, in all other respects, shall remain
valid and enforceable.
5.13
Usury
Savings Clause. Trustor
and Beneficiary intend to conform strictly to the usury laws now or hereafter in
force in the State and all interest payable pursuant to the Note, this Deed of
Trust or any other Loan Instrument, unless exempt from such laws, shall be
subject to reduction to the amount equal to the maximum non-usurious amount
allowed pursuant to such usury laws as now or hereafter construed by the courts
having jurisdiction over such matters. In the event the maturity of the Note is
accelerated by reason of any provision of this Deed of Trust including, without
limitation, an election by Beneficiary resulting from an Event of Default (or an
event permitting acceleration) under this Deed of Trust or any other Loan
Documents, voluntary prepayment of the Note, or otherwise, then earned interest
may never include more than the maximum amount permitted by law, computed from
the dates of each advance of the Obligations until payment, and any interest in
excess of the maximum amount permitted by law shall be canceled automatically
and, if theretofore paid, shall at the option of Beneficiary either be rebated
to Trustor or credited on the principal amount of the Note or if all principal
has been repaid, then the excess shall be rebated to Trustor. The aggregate of
all interest (whether designated as interest, service charges, points or
otherwise) contracted for, chargeable or receivable pursuant to the Note, this
Deed of Trust or any other Loan Instrument shall under no circumstances exceed
the maximum legal interest rate which Beneficiary may charge under applicable
law from time to time. Any interest in excess of the maximum amount permitted by
law shall be deemed a mistake and shall be canceled automatically and, if
theretofore paid, Beneficiary shall, at its option, either rebate such interest
to Trustor or credit such interest to the principal amount of the Obligations,
or if all such principal has been repaid, Beneficiary shall rebate such excess
to Trustor.
5.14
No
Statute of Limitations. To the
full extent permitted by law, Trustor hereby waives the pleading of any statute
of limitations as a defense to any or all of the Obligations.
5.15
Late
Charges. If
Trustor fails to pay, when due, without regard to any grace period, any
installment of interest or principal, subject to the provisions of the second
paragraph of Section
1.04 any
payment due pursuant to Section
1.04 or any
deposit or reserve due pursuant to this Deed of Trust or any other Loan
Instrument, Trustor shall pay to Beneficiary (unless waived by Beneficiary) the
Late Charge as defined and described in the Note. Each such Late Charge,
if not previously paid, shall, at the option of Beneficiary, be added to and
become part of the
succeeding monthly payment to be made pursuant to the Note, and shall be secured
by this Deed of Trust.
68
5.16
Waiver
of Jury Trial. Trustor
waives any right to trial by jury with respect to any action or proceeding (a)
brought by Trustor, Beneficiary or any other Person relating to (i) the
Obligations or any understandings or prior dealings between Trustor and
Beneficiary or (ii) the Loan Instruments, or (b) to which Beneficiary is a
party.
5.17
Continuing
Effectiveness. This
Deed of Trust shall secure all advances made pursuant to the Loan Instruments,
all rearrangements and renewals of the Obligations and all extensions as to the
time of payment thereof, whether or not such advances, rearrangements, renewals
or extensions are evidenced by new promissory notes or other instruments
hereafter executed and irrespective of whether filed or recorded. The execution
of this Deed of Trust shall not impair or affect any other security which may be
given to secure the payment of the Obligations, and all such additional security
shall be considered as cumulative. The taking of additional security, execution
from time to time of partial releases as to the Secured Property or any
extension of time of payment of the Obligations shall not diminish the force,
effect or lien of this Deed of Trust, and shall not affect or impair the
liability of any maker, surety or endorser for the payment of the
Obligations.
5.18
Time
of Essence._ Time is
of the essence as to Trustor's performance of each provision of this Deed of
Trust, the Note and the other Loan Instruments. Trustor agrees that where, by
the terms of this Deed of Trust, the Note or any other Loan Instrument, a day is
named or a time is fixed for the payment of any sum of money or the performance
of any obligation by Trustor, the day and/or time stated enters into the
consideration and is of the essence of the whole contract.
5.19
Non-Recourse. If an
Event of Default has occurred and has not been waived by Beneficiary in writing,
Beneficiary shall have all rights provided in the Note, this Deed of Trust or
any other Loan Instrument or at law or in equity, and shall have full recourse
to the Secured Property and to any other collateral given by Trustor to secure
any or all of the Obligations, provided that any judgment obtained by
Beneficiary in any proceeding to enforce such rights shall be enforced only
against the Secured Property and such other collateral. Notwithstanding the
foregoing, Beneficiary shall not in any way be prohibited from naming Trustor or
any of its successors or assigns or any Person holding under or through them as
parties to any actions, suits or other proceedings initiated by Beneficiary to
enforce such rights or to foreclose the lien of this Deed of Trust or to
otherwise realize upon any other lien or security interest created in any other
collateral given to secure the payment of the Obligations.
The
restriction contained in the first sentence of the immediately preceding
paragraph shall not apply to, and Trustor and such additional entity(ies), other
than Fifth Street Properties (collectively, "Limited
Guarantor") as
Beneficiary may reasonably require in conjunction with a sale or transfer of the
Secured Property to a third party, as described in Section II of the Letter
Agreement (provided such Limited Guarantor shall not be required to have a net
worth higher than the standards provided for a Qualified Transferee as defined
in Section II of the Letter Agreement) shall be personally liable for, all
losses, claims, damages, costs or expenses, including, without limitation,
attorneys' fees and expenses, incurred by Beneficiary (A) as a result of any
material misstatement of fact (1) by Trustor or any Person constituting
Trustor
69
made to
induce Beneficiary to advance the principal amount evidenced by the Note or (2)
contained in any Loan Instrument, (B) as a result of fraud committed by Trustor
or any Person constituting Trustor related to the making of the Loan or to the
Secured Property, (C) as a result of the misapplication of any insurance
proceeds, condemnation awards, trust funds or Rents in a manner which is not in
accordance with the provisions of the Loan Instruments, (D) as a result of the
breach of any representation or warranty contained in the Sections of this Deed
of Trust pertaining to environmental matters, including, without limitation,
Section
1.05E(4), 2.03C
or
2.03D, or any
default with respect to any covenant contained in the Sections of this Deed of
Trust pertaining to environmental matters including, without limitation,
Section
1.05E, (E) as a
result of any default with respect to Trustor's covenant to pay Impositions,
pursuant to Section 1.02 hereof,
or insurance premiums, pursuant to Section
1.03 hereof,
(F) arising from, in respect of, as a consequence of, or in connection with: (l)
the existence of any circumstance or the occurrence of any action described in
Section
1.05E(1), (2)
claims asserted by any Person (including, without limitation, any Governmental
Agency) in connection with, or in any way arising out of, the presence, storage,
use, disposal, generation, transportation or treatment of any Hazardous Material
in, on, or under or about the Secured Property, (3) the violation or claimed
violation of any law relating to any Hazardous Material or any other
Environmental Requirement in regard to the Secured Property, regardless of
whether or not such violation or claimed violation occurred prior to or after
the date of this Deed of Trust or whether or not such violation or claimed
violation occurred prior to or after the time that Trustor became the owner of
the Secured Property, or (4) the preparation of any environmental audit as to
the Secured Property, whether conducted or authorized by Trustor, Beneficiary or
any other Person or the implementation of any such environmental audit's
recommendations or (G) as a result of any intentional, bad faith waste of the
Secured Property committed by Trustor or its agents (such damages to include,
without limitation, all repair costs incurred by Trustor).
In
addition, and notwithstanding the restriction on enforcement contained in the
first sentence of the second immediately preceding paragraph of this
Section
5.19, Trustor
also shall be personally liable for and Beneficiary may seek judgment against
Trustor for all outstanding principal, interest and other Obligations including,
without limitation, the Make-Whole Amount (i) if there shall be a violation of
Section
l.11 of this
Deed of Trust, (ii) in the event that Trustor or any Limited Guarantor or any
other guarantor, but specifically excluding Fifth Street Properties, of all or
any of part of the obligations of Trustor under the Loan Instruments
("Other Guarantor") shall be
the subject of any petition or proceeding for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law that remains undismissed
for a period of ninety (90) days or more, and/or Trustor or any Limited
Guarantor or any
Other Guarantor shall become the subject of any liquidation, dissolution,
receivership or other
similar proceeding, and/or (iii) if the Secured Property is damaged or destroyed
in whole or in part
due to an act of terrorism and Trustor does not have the required Terrorism
Insurance and Trustor has not made the required Terrorism Insurance Deposit. The
restriction on enforcement contained in the first sentence of the second
immediately preceding paragraph of this Section 5.19 shall
not apply to the Environmental Indemnity Agreement of even date herewith
executed by Trustor and the other indemnitors, if any, in favor of Beneficiary
and/or to the obligations of any Limited Guarantor or any Other Guarantor. It is
expressly understood and agreed, however, that nothing contained in this
Section
5.19 shall
(x) in any manner or way constitute or be deemed to be a release of the
Obligations or otherwise affect or impair the enforceability of the
70
liens,
assignments, rights and security interests created by this Deed of Trust or any
of the other Loan Instruments or any future advance or any related agreements or
(y) preclude Beneficiary from foreclosing this Deed of Trust or from exercising
its other remedies set forth in this Deed of Trust or the Assignment, or from
enforcing any of its rights and remedies in law or in equity (including, without
limitation, injunctive and declaratory relief, restraining orders and
receivership proceedings), except as provided in the second immediately
preceding paragraph of this Section
5.19 or (z)
affect any rights Beneficiary may have to waive the lien created by this Deed of
Trust and exercise the rights of an unsecured creditor if the Secured Property
shall become environmentally impaired, all as provided in California Code of
Civil Procedure Section 726.5. All losses, claims, damages, costs, expenses,
liabilities, obligations and/or other amounts of any kind or nature, including,
attorneys' fees and expenses, as to which this Section
5.19 provides
that Trustor is personally liable shall be referred to herein as the
"Non-Recourse Exceptions".
5.20
Non-Business
Days. If any
payment required hereunder or under any other Loan Instrument becomes due on a
Saturday, Sunday, or legal holiday in the state in which the Premises are
located, then such payment shall be due and payable on the immediately preceding
business day.
5.21
Joinder
of Spouse. If the
Secured Property is owned by a married Person, the joinder herein by the spouse
of such Person shall be construed not only as binding such spouse individually,
but also as a quitclaim and release to Beneficiary of any interest of such
spouse in the Secured Property by way of dower, curtesy, community property or
otherwise.
5.22
Request
for Notice. Pursuant
to California Government Code Section 27321.5(b), Trustor hereby requests that a
copy of any notice of default and a copy of any notice of sale given pursuant to
this Deed of Trust be mailed to Trustor at the address set forth herein
above.
5.23
Fixture
Filing. Portions
of the Secured Property are goods which are or are to become fixtures relating
to the Land and/or the Premises, and Trustor covenants and agrees that the
filing of this Deed of Trust in the real estate records of the county where the
Premises are located shall also operate from the time of filing as a fixture
filing in accordance with Section 9313 of the California Uniform Commercial
Code.
5.24
Provisions
as to Trustee; Trustee's Appointment. Trustee
accepts this trust when this Deed
of Trust, duly executed and acknowledged, is made a public record as provided by
law. Trustee
may resign by an instrument in writing addressed to Beneficiary, or Trustee may
be removed at any time with or without cause by an instrument in writing
executed by Beneficiary and duly recorded. In case of the death, resignation,
removal or disqualification of Trustee or if for any reason Beneficiary shall
deem it desirable to appoint a substitute or successor trustee to act instead of
Trustee herein named or any substitute or successor Trustee, then Beneficiary
shall have the right and is hereby authorized and empowered to appoint a
successor Trustee, or a substitute Trustee, without other formality than
appointment and designation in writing executed and acknowledged by Beneficiary
and the recordation of such writing in the office where this Deed of Trust is
recorded, and the authority hereby conferred shall extend to the appointment of
other successor and substitute Trustees successively until the Obligations are
paid in full or until
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the
Secured Property is sold hereunder. Such appointment and designation by
Beneficiary shall be full evidence of the right and authority to make the same
and of all facts therein recited. If such appointment is executed on behalf of
Beneficiary by an officer of Beneficiary, such appointments shall be
conclusively presumed to be executed with authority and shall be valid and
sufficient without proof of any action by the Trustee or any superior officer of
Beneficiary. Upon the making of such appointment and designation, all of the
estate and title of Trustee in the Secured Property shall vest in the named
successor or substitute Trustee and it shall thereupon succeed to and shall
hold, possess and execute all the rights, powers, privileges, immunities and
duties herein conferred upon Trustee; but, nevertheless, upon the written
request of Beneficiary or of the successor or substitute Trustee, Trustee
ceasing to act shall execute and deliver an instrument transferring to such
successor or substitute Trustee all of the estate and title in the Secured
Property of Trustee so ceasing to act, together with all the rights, powers,
privileges, immunities and duties herein conferred upon Trustee, and shall duly
assign, transfer and deliver any of the properties and moneys held by said
Trustee hereunder to said successor or substitute Trustee. All references herein
to Trustee shall be deemed to refer to Trustee (including any successor or
substitute, appointed and designated, as herein provided) from time to time
acting hereunder. Trustor hereby ratifies and confirms any and all acts which
Trustee herein named or its successor or successors, substitute or substitutes,
in this Deed of Trust, shall do lawfully by virtue hereof.
5.25
Payment
and Servicing Agent. The Note
Holders have appointed, designated and authorized Beneficiary, as their payment
and servicing agent to take such action on behalf of the Note Holders under this
Deed of Trust and the other Loan Instruments and to exercise such powers and
perform such duties as are expressly delegated to "Beneficiary" by the terms of
this Deed of Trust and the other Loan Instruments, together with such powers as
are reasonably incidental thereto. Therefore, without limiting the generality of
the foregoing, (l) Trustor (a) is entitled to rely on Beneficiary for any
waiver, amendment, approval or consent given by "Beneficiary" hereunder or under
any of the other Loan Instruments and (b) shall adhere only to waivers,
amendments, approvals or consents given by Beneficiary hereunder and under the
other Loan Instruments and (2) Beneficiary is entitled, on behalf of the Note
Holders, to take all actions, including exercising all remedies, permitted to be
taken by "Beneficiary" under this Deed of Trust or under any of the other Loan
Instruments (either by law or pursuant to the terms of this Deed of Trust or the
other Loan Instruments). Until Trustor is otherwise notified by the Note
Holders, the "Beneficiary" is New York Life Insurance Company. Appointment of a
successor payment and servicing agent shall also constitute appointment of a
successor "Beneficiary" under this Deed of Trust and under the other Loan
lnstruments and such appointed successor payment and servicing agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring "Beneficiary" hereunder and under the other Loan
Instruments. The use of the term "agent" in this Deed of Trust and the other
Loan Instruments with reference to Beneficiary is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. All warranties,
certifications, indemnities, waivers, rights under insurance policies and other
terms, covenants and conditions inuring to the benefit Beneficiary under the
Loan Instruments shall also inure to the benefit and may be enforced by the Note
Holders.
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5.26
Exculpation.
Notwithstanding anything in this Deed of Trust to the contrary, no present or
future officer, director, employee, trustee, member, retirant, beneficiary,
internal investment contractor, manager, investment manager or agent of the
CalPERS or CommonWealth Pacific shall have any personal liability, directly or
indirectly, under this Deed of Trust and recourse shall not be had against any
such officer, director, employee, trustee, member, retirant, beneficiary,
internal investment contractor, investment manager or agent under or in
connection with this Deed of Trust or any other Loan Instrument heretofore or
hereafter executed in connection with the Loan. By its acceptance of this Deed
of Trust, Beneficiary hereby waives and releases, for itself and for each other
Note Holder, any and all such personal liability and recourse. The limitations
of liability provided in this Section
5.26 are in
addition to, and not in limitation of any limitation of liability applicable to
CalPERS or CommonWealth Pacific provided by law or in any other contract,
agreement or instrument. Such exculpation of liability shall be absolute and
without any exception whatsoever.
[There is
no further text. Signature page follows.]
73
IN
WITNESS WHEREOF, Trustor
has executed this Decd of Trust as of the date first above written.
TRUSTOR: | ||
777
SOUTH FIG, LLC,
A
Delaware limited liability company, | ||
By: |
CWP
Capital Management, LLC, | |
A
Delaware limited liability company | ||
its
manager | ||
By: |
/s/
Xxxxxxx X. Xxxxx | |
Name:
Xxxxxxx X. Xxxxx | ||
Title:
CEO | ||