EXHIBIT 10.62
LAUGHLIN OUTLET CENTER LLC,
a Delaware limited liability company, as grantor
(Borrower)
to
FIDELITY NATIONAL TITLE INSURANCE COMPANY, as trustee
(Trustee)
for the benefit of
UBS WARBURG REAL ESTATE INVESTMENTS INC., as beneficiary
(Lender)
GUARANTOR DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND GUARANTY
Dated: As of July ___, 2002
Location: 1955 S. Casino Drive, Xxxxxxxx, Nevada
County: Xxxxx
Assessor's Parcel No: 264-13-201-003
264-13-601-003
264-13-601-004
PREPARED BY AND UPON
RECORDATION RETURN TO:
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
4194/68
225
GUARANTOR DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND GUARANTY
THIS GUARANTOR DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND GUARANTY (this "DEED OF TRUST") is made as of this ____ day of
July 2002 by LAUGHLIN OUTLET CENTER LLC, a Delaware limited liability company,
having its principal place of business at c/o Horizon Group Properties, Inc., 00
Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, as grantor ("BORROWER"),
to FIDELITY NATIONAL TITLE INSURANCE COMPANY, having an address at 000 X.
Xxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000, as trustee ("TRUSTEE"), for
the benefit of UBS WARBURG REAL ESTATE INVESTMENTS INC., having an address at
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as
beneficiary ("LENDER").
W I T N E S S E T H:
A. This Deed of Trust is given pursuant to that certain Loan Agreement
dated as of the date hereof by and among Borrower, Medford Outlet Center LLC, a
Delaware limited liability company ("HORIZON MEDFORD"), and Warrenton Outlet
Center LLC, a Delaware limited liability company ("HORIZON WARRENTON"; and
Horizon Warrenton, together with Horizon Medford, each an "AFFILIATE BORROWER"
and collectively, the "AFFILIATE BORROWERS") and Lender (as the same may be
amended, restated, replaced, supplemented or otherwise modified from time to
time, the "LOAN AGREEMENT"). Capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Loan Agreement.
B. Borrower is the owner of the fee estate in certain real property
located at 1955 S. Casino Drive, City of Xxxxxxxx, Xxxxx County, Nevada, as more
particularly described in EXHIBIT A attached hereto and made a part hereof (the
"LAND").
C. Simultaneously with the execution of this Deed of Trust, Lender made
the following additional loans to Horizon Medford and Horizon Warrenton:
(a) MEDFORD. Lender made a loan in the principal amount of
$11,000,000.00 (the "MEDFORD LOAN") to Horizon Medford, evidenced by a
certain Promissory Note dated of even date herewith made by Horizon Medford
to Lender (the "MEDFORD NOTE") and secured by a certain Mortgage,
Assignment of Leases and Rents and Security Agreement dated of even date
herewith made by Horizon Medford in favor of Lender (the "MEDFORD
MORTGAGE") and any and all of the Loan Documents executed in connection
with the Medford Loan (collectively, the "MEDFORD LOAN DOCUMENTS").
(b) WARRENTON. Lender made a loan in the principal amount of
$4,500,000.00 (the "WARRENTON LOAN") to Horizon Warrenton, evidenced by a
certain Promissory Note dated of even date herewith made by Horizon
Warrenton to Lender (the "WARRENTON NOTE"; and the Warrenton Note, together
with the Medford Note, each, an "AFFILIATE NOTE" and collectively, the
"AFFILIATE NOTES") and secured by a certain Deed of Trust, Assignment of
Leases and Rents and Security Agreement dated of even date herewith made by
Horizon
226
Warrenton in favor of Lender (the "WARRENTON MORTGAGE"; and the Warrenton
Mortgage, together with the Medford Mortgage, each an "AFFILIATE MORTGAGE"
and collectively, the "AFFILIATE MORTGAGES") and any and all of the Loan
Documents executed in connection with the Warrenton Loan (collectively, the
"WARRENTON LOAN DOCUMENTS"; and the Warrenton Loan Documents, together with
the Medford Loan Documents, collectively, the "AFFILIATE LOAN DOCUMENTS").
D. Each of Borrower and Affiliate Borrowers are Affiliates.
E. Lender has requested that Borrower guaranty each Affiliate Borrower's
respective obligations under each of the Affiliate Notes and the Affiliate Loan
Documents and the performance and observance of all of the provisions of the
Affiliate Loan Documents (collectively, the "DEBT") which guaranty shall be
evidenced by the Guaranty contained in ARTICLE 16 herein and secured by, among
other things, this Deed of Trust (the "GUARANTY").
F. Borrower acknowledges that, by reason of the foregoing, it will
receive substantial economic and other benefits from Lender making the Affiliate
Loans to the Affiliate Borrowers, and acknowledges that without this Deed of
Trust and the Guaranty contained herein, Lender would be unwilling to make the
Affiliate Loans to the Affiliate Borrowers.
NOW THEREFORE, to secure that Borrower shall pay when due and fully and
promptly perform all of the indebtedness, obligations, covenants, agreements and
liabilities of Borrower for the benefit of Lender under this Deed of Trust,
including, without limitation, the Guaranty contained in ARTICLE 16 hereof,
together with all interest and other charges thereon, whether direct or
indirect, existing, future, contingent or otherwise, due or to become due under
or arising out of or in connection with the Affiliate Notes, this Deed of Trust
or any of the Affiliate Loan Documents, any and all modifications, extensions
and renewals of any of the foregoing; and any and all expenses and costs of
collection or enforcement, including, without limitation, reasonable attorneys'
fees incurred by Lender in the collection or enforcement of any of the
foregoing, or in the exercise of any of the rights or remedies under this Deed
of Trust or applicable law:
ARTICLE 1
GRANTS OF SECURITY
Section 1.1 PROPERTY CONVEYED. Borrower does hereby irrevocably grant,
bargain, sell, pledge, assign, warrant, transfer and convey to Trustee and its
successors and assigns, in trust, with Power of Sale for the benefit of Lender
as beneficiary in trust, the following property, rights, interests and estates
now owned or hereafter acquired by Borrower (collectively, the "PROPERTY"):
(a) LAND. The Land described in EXHIBIT A attached hereto and
made a part hereof;
(b) ADDITIONAL LAND. All xxxxxxxxxx xxxxx, xxxxxxx and
development rights hereafter acquired by Borrower for use in connection with the
Land and the development of the Land
227
and all additional lands and estates therein which may, from time to time, by
supplemental mortgage or otherwise be expressly made subject to the lien of this
Deed of Trust;
(c) IMPROVEMENTS. The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Land (collectively, the
"IMPROVEMENTS");
(d) EASEMENTS. All easements, rights-of-way or use, rights,
strips and gores of land, streets, ways, alleys, passages, sewer rights, water,
water courses, water rights and powers, air rights and development rights, and
all estates, rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
now or hereafter belonging, relating or pertaining to the Land and the
Improvements and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;
(e) EQUIPMENT. All "equipment," as such term is defined in
Article 9 of the Uniform Commercial Code (as hereinafter defined), now owned or
hereafter acquired by Borrower, which is used at or in connection with the
Improvements or the Land or is located thereon or therein (including, but not
limited to, all machinery, equipment, furnishings, and electronic
data-processing and other office equipment now owned or hereafter acquired by
Borrower and any and all additions, substitutions and replacements of any of the
foregoing), together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto (collectively, the
"EQUIPMENT"). Notwithstanding the foregoing, Equipment shall not include any
property belonging to Tenants under Leases except to the extent that Borrower
shall have any right or interest therein;
(f) FIXTURES. All Equipment now owned, or the ownership of which
is hereafter acquired, by Borrower which is so related to the Land and
Improvements forming part of the Property that it is deemed fixtures or real
property under the law of the particular state in which the Equipment is
located, including, without limitation, all building or construction materials
intended for construction, reconstruction, alteration or repair of or
installation on the Property, construction equipment, appliances, machinery,
plant equipment, fittings, apparatuses, fixtures and other items now or
hereafter attached to, installed in or used in connection with (temporarily or
permanently) any of the Improvements or the Land, including, but not limited to,
engines, devices for the operation of pumps, pipes, plumbing, cleaning, call and
sprinkler systems, fire extinguishing apparatuses and equipment, heating,
ventilating, plumbing, laundry, incinerating, electrical, air conditioning and
air cooling equipment and systems, gas and electric machinery, appurtenances and
equipment, pollution control equipment, security systems, disposals,
dishwashers, refrigerators and ranges, recreational equipment and facilities of
all kinds, and water, gas, electrical, storm and sanitary sewer facilities,
utility lines and equipment (whether owned individually or jointly with others,
and, if owned jointly, to the extent of Borrower's interest therein) and all
other utilities whether or not situated in easements, all water tanks, water
supply, water power sites, fuel stations, fuel tanks, fuel supply, and all other
structures, together with all accessions, appurtenances, additions,
replacements, betterments and substitutions for any of the foregoing and the
proceeds thereof (collectively, the "FIXTURES").
228
Notwithstanding the foregoing, "Fixtures" shall not include any property which
Tenants are entitled to remove pursuant to Leases except to the extent that
Borrower shall have any right or interest therein;
(g) PERSONAL PROPERTY. All furniture, furnishings, objects of
art, machinery, goods, tools, supplies, appliances, general intangibles,
contract rights, accounts, accounts receivable, franchises, licenses,
certificates and permits, and all other personal property of any kind or
character whatsoever (as defined in and subject to the provisions of the Uniform
Commercial Code), other than Fixtures, which are now or hereafter owned by
Borrower and which are located within or about the Land and the Improvements,
together with all accessories, replacements and substitutions thereto or
therefor and the proceeds thereof (collectively, the "PERSONAL PROPERTY"), and
the right, title and interest of Borrower in and to any of the Personal Property
which may be subject to any security interests, as defined in the Uniform
Commercial Code, as adopted and enacted by the state or states where any of the
Property is located (as amended from time to time, the "UNIFORM COMMERCIAL
CODE"), superior in lien to the lien of this Deed of Trust, and all proceeds and
products of any of the above;
(h) LEASES AND RENTS. All leases and other agreements affecting
the use, enjoyment or occupancy of the Land and the Improvements heretofore or
hereafter entered into, whether before or after the filing by or against
Borrower of any petition for relief under 11 U.S.C. Section 101 ET SEQ., as the
same may be amended from time to time (the "BANKRUPTCY CODE") (collectively, the
"LEASES"), and all right, title and interest of Borrower, its successors and
assigns, therein and thereunder, including, without limitation, cash or
securities deposited thereunder to secure the performance by the lessees of
their obligations thereunder and all rents, additional rents, revenues, issues
and profits (including all oil and gas or other mineral royalties and bonuses)
from the Land and the Improvements, whether paid or accruing before or after the
filing by or against Borrower of any petition for relief under the Bankruptcy
Code (collectively, the "RENTS"), and all proceeds from the sale or other
disposition of the Leases and the right to receive and apply the Rents to the
payment and performance of the Obligations, including the payment of the Debt;
(i) CONDEMNATION AWARDS. All awards or payments, including
interest thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including,
but not limited to, any transfer made in lieu of or in anticipation of the
exercise of such right), or for a change of grade, or for any other injury to or
decrease in the value of the Property;
(j) INSURANCE PROCEEDS. All proceeds in respect of the Property
under any insurance policies covering the Property, including, without
limitation, the right to receive and apply the proceeds of any insurance,
judgments or settlements made in lieu thereof, for damage to the Property;
(k) TAX CERTIORARI. All refunds, rebates or credits in connection
with any reduction in real estate taxes and assessments charged against the
Property as a result of tax certiorari proceedings or any other applications or
proceedings for reduction;
229
(l) RIGHTS. The right, in the name and on behalf of Borrower, to
appear in and defend any action or proceeding brought with respect to the
Property and to commence any action or proceeding to protect the interest of
Lender in the Property;
(m) AGREEMENTS. All agreements, contracts, certificates,
instruments, franchises, permits, licenses, plans, specifications and other
documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements or respecting
any business or activity conducted on the Land and any part thereof and all
right, title and interest of Borrower therein and thereunder, including, without
limitation, the right, upon the happening of any default hereunder, to receive
and collect any sums payable to Borrower thereunder;
(n) TRADEMARKS. All tradenames, trademarks, servicemarks, logos,
copyrights, goodwill, books and records and all other general intangibles
relating to or used in connection with the operation of the Property;
(o) ACCOUNTS. All right, title and interest of Borrower in, to
and under all reserves, escrows and deposit accounts maintained by Borrower with
respect to the Property, including, without limitation, all accounts established
or maintained pursuant to the Loan Agreement, the Cash Management Agreement or
any other Loan Document, together with all deposits or wire transfers made to
such accounts, and all cash, checks, drafts, certificates, securities,
investment property, financial assets, instruments and other property held
therein from time to time, and all proceeds, products, distributions, dividends
and/or substitutions thereon and thereof;
(p) UNIFORM COMMERCIAL CODE PROPERTY. All documents, instruments,
chattel paper and intangibles, as the foregoing terms are defined in the Uniform
Commercial Code, and general intangibles of Borrower relating to the Property;
(q) PROCEEDS. All proceeds of any of the foregoing, including,
without limitation, proceeds of insurance and condemnation awards, whether in
cash or in liquidation or other claims, or otherwise; and
(r) OTHER RIGHTS. Any and all other rights of Borrower in and to
the items set forth in SUBSECTIONS (a) through (q) above.
AND, without limiting any of the other provisions of this Deed of Trust, to the
extent permitted by applicable law, Borrower expressly grants to Lender, as
secured party, a security interest in the portion of the Property which is or
may be subject to the provisions of the Uniform Commercial Code which are
applicable to secured transactions; it being understood and agreed that the
Improvements and Fixtures are part and parcel of the Land (the Land, the
Improvements and the Fixtures collectively referred to as the "REAL PROPERTY")
appropriated to the use thereof and, whether affixed or annexed to the Land or
not, shall for the purposes of this Deed of Trust be deemed conclusively to be
real estate and conveyed hereby.
Section 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely and
unconditionally assigns to Lender and Trustee all of Borrower's right, title and
interest in and to all current and future Leases
230
and Rents; it being intended by Borrower that this assignment constitutes a
present, absolute assignment and not an assignment for additional security only.
Nevertheless, subject to the terms of the Assignment of Leases and SECTION
7.1(h) of this Deed of Trust, Lender grants to Borrower a revocable license to
collect, receive, use and enjoy the Rents. Borrower shall hold the Rents, or a
portion thereof sufficient to discharge all current sums due on the Debt, for
use in the payment of such sums.
Section 1.3 SECURITY AGREEMENT. This Deed of Trust is both a real
property deed of trust and a "security agreement" within the meaning of the
Uniform Commercial Code. The Property includes both real and personal property
and all other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Deed of Trust,
Borrower hereby grants to Lender, as security for the Obligations, a security
interest in the Fixtures, the Equipment, the Personal Property and the other
property constituting the Property to the full extent that the Fixtures, the
Equipment, the Personal Property and such other property may be subject to the
Uniform Commercial Code (said portion of the Property so subject to the Uniform
Commercial Code being called the "Collateral"). If an Event of Default shall
occur and be continuing, Lender, in addition to any other rights and remedies
which it may have, shall have and may exercise immediately and without demand,
any and all rights and remedies granted to a secured party upon default under
the Uniform Commercial Code, including, without limiting the generality of the
foregoing, the right to take possession of the Collateral or any part thereof,
and to take such other measures as Lender may deem necessary for the care,
protection and preservation of the Collateral. Upon request or demand of Lender
after the occurrence and during the continuance of an Event of Default, Borrower
shall, at its expense, assemble the Collateral and make it available to Lender
at a convenient place (at the Land if tangible property) reasonably acceptable
to Lender. Borrower shall pay to Lender on demand any and all expenses,
including reasonable attorneys' fees and costs, incurred or paid by Lender in
protecting its interest in the Collateral and in enforcing its rights hereunder
with respect to the Collateral after the occurrence and during the continuance
of an Event of Default. Any notice of sale, disposition or other intended action
by Lender with respect to the Collateral sent to Borrower in accordance with the
provisions hereof at least ten (10) Business Days prior to such action, shall,
except as otherwise provided by applicable law, constitute reasonable notice to
Borrower. The proceeds of any disposition of the Collateral, or any part
thereof, may, except as otherwise required by applicable law, be applied by
Lender to the payment of the Debt in such priority and proportions as Lender in
its discretion shall deem proper. The principal place of business of Borrower
(Debtor) is as set forth on page one hereof and the address of Lender (Secured
Party) is as set forth on page one hereof.
Section 1.4 FIXTURE FILING. Certain of the Property is or will become
"fixtures" (as that term is defined in the Uniform Commercial Code) on the Land,
described or referred to in this Deed of Trust, and this Deed of Trust, upon
being filed for record in the real estate records of the city or county wherein
such fixtures are situated, shall operate also as a financing statement naming
Borrower as the Debtor and Lender as the Secured Party filed as a fixture filing
in accordance with the applicable provisions of said Uniform Commercial Code
upon such of the Property that is or may become fixtures.
Section 1.5 PLEDGES OF MONIES HELD. Borrower hereby pledges to Lender any
and all
231
monies now or hereafter held by Lender or on behalf of Lender in connection with
the Loan, including, without limitation, any sums deposited in the Accounts (as
defined in the Cash Management Agreement) and the Net Proceeds, as additional
security for the Obligations until expended or applied as provided in this Deed
of Trust.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto and to
the use and benefit of Trustee and its successors and assigns, forever;
IN TRUST, WITH POWER OF SALE, to secure Borrower's performance of the
Obligations, including the payment to Lender of the Debt, at the time and in the
manner provided for its payment in the Guaranty, the Affiliate Notes, the Loan
Agreement, this Deed of Trust and the other Affiliate Loan Documents.
PROVIDED, HOWEVER, these presents are upon the express condition that, if
Borrower shall well and truly pay and perform the Obligations (including the
payment of the Debt) at the time and in the manner provided in this Deed of
Trust, the Guaranty, the Affiliate Notes, the Loan Agreement and the other
Affiliate Loan Documents, and shall well and truly abide by and comply in all
material respects with each and every covenant and condition set forth herein
and in the Guaranty, the Affiliate Notes, the Loan Agreement and the other
Affiliate Loan Documents, these presents and the estate hereby granted shall
cease, terminate and be void; PROVIDED, HOWEVER, that Borrower's obligation to
indemnify and hold harmless Lender pursuant to the provisions hereof shall
survive any such payment or release.
ARTICLE 2
DEBT AND OBLIGATIONS SECURED
Section 2.1 OBLIGATIONS. This Deed of Trust and the grants, assignments
and transfers made in ARTICLE 1 are given for the purpose of securing the
Obligations, including, but not limited to, the Debt.
Section 2.2 OTHER OBLIGATIONS. This Deed of Trust and the grants,
assignments and transfers made in ARTICLE 1 are also given for the purpose of
securing the following (the "Other Obligations"):
(a) the performance of all other obligations of Borrower
contained herein, including, without limitation, the Guaranty;
(b) the performance of each obligation of Borrower contained in
the Loan Agreement and in each other Affiliate Loan Document; and
232
(c) the performance of each obligation of Borrower contained in
any renewal, extension, amendment, modification, consolidation, change of, or
substitution or replacement for, all or any part of the Affiliate Notes, the
Loan Agreement or any other Affiliate Loan Document.
Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations for the
payment of the Debt and the performance of the Other Obligations may sometimes
be referred to collectively herein as the "Obligations."
ARTICLE 3
BORROWER COVENANTS
Borrower covenants and agrees that throughout the term of the Loan:
Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the time and
in the manner provided in the Loan Agreement, the Affiliate Notes and this Deed
of Trust, including, without limitation, the Guaranty.
Section 3.2 INCORPORATION BY REFERENCE. All the covenants, conditions and
agreements contained in (a) the Loan Agreement, (b) the Affiliate Notes, and (c)
all and any of the other Affiliate Loan Documents, are hereby made a part of
this Deed of Trust to the same extent and with the same force as if fully set
forth herein.
Section 3.3 INSURANCE. Borrower shall obtain and maintain, or cause to be
maintained, in full force and effect at all times insurance with respect to
Borrower and the Property as required pursuant to the Loan Agreement.
Section 3.4 MAINTENANCE OF PROPERTY. Borrower shall cause the Property to
be maintained in a good and safe condition and repair. The Improvements, the
Fixtures, the Equipment and the Personal Property shall not be removed,
demolished or materially altered (except for normal replacement of the Fixtures,
the Equipment or the Personal Property, tenant finish and refurbishment of the
Improvements) without the consent of Lender which consent shall not be
unreasonably withheld. Borrower shall promptly repair, replace or rebuild any
part of the Property which may be destroyed by any Casualty, or become damaged,
worn or dilapidated or which may be affected by any Condemnation, in accordance
with Section 5.2 of the Loan Agreement and shall complete and pay for any
structure at any time in the process of construction or repair on the Land.
Section 3.5 WASTE. Borrower shall not commit or suffer any waste of the
Property, or make any change in the use of the Property which will in any way
materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or allow the
cancellation of any Policy, or do or permit to be done thereon anything that may
in any way materially adversely impair the value of the Property or the security
of this Deed of Trust. Borrower will not, without the prior written consent of
Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.
233
Section 3.6 PAYMENT FOR LABOR AND MATERIALS.
(a) Subject to SECTION 3.6(b) hereof, Borrower (i) will promptly
pay when due all bills and costs for labor, materials and specifically
fabricated materials ("LABOR AND MATERIAL COSTS") incurred in connection with
the Property, (ii) never permit to exist beyond the due date thereof in respect
of the Property, or any part thereof, any Lien or security interest, even though
inferior to the Liens and security interests created hereby and by the other
Loan Documents, and (iii) never permit to be created or exist in respect of the
Property or any part thereof any other or additional Lien or security interest
other than the Liens or security interests created hereby and by the other Loan
Documents, except for the Permitted Encumbrances.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any of the Labor and Material Costs, provided
that: (i) no Event of Default has occurred and is continuing under the Loan
Agreement, either or both Affiliate Notes, this Deed of Trust or any of the
other Affiliate Loan Documents; (ii) Borrower is permitted to do so under the
provisions of any other mortgage, deed of trust or deed to secure debt affecting
the Property; (iii) such proceeding shall suspend the collection of the Labor
and Material Costs from Borrower and from the Property or Borrower shall have
paid all of the Labor and Material Costs under protest; (iv) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower is subject and shall not constitute a
default thereunder; (v) neither the Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, canceled or
lost; and (vi) if such Lien is equal to or greater than $25,000.00, Borrower
shall have furnished to Lender either (A) a cash deposit equal to 125% of the
amount of such contested Labor and Material Costs, or (B) an indemnity bond
reasonably satisfactory to Lender with a surety reasonably satisfactory to
Lender, in the amount of such Labor and Material Costs, plus in either of the
foregoing cases a reasonable additional sum to pay all costs, interest and
penalties that may be imposed or incurred in connection therewith.
(c) Notwithstanding the foregoing, it shall not be a default
under the terms and conditions of this SECTION 3.6 if, in respect of a
mechanic's or materialman's lien asserted against the Property for Labor and
Material Costs (each, a "MECHANIC'S LIEN"): (i) Borrower shall have provided
Lender with written notice of such Mechanic's Lien within five (5) days of
obtaining knowledge thereof; (ii) within five (5) days of obtaining knowledge of
the filing of any Mechanic's Lien, if such Mechanic's Lien is equal to or
greater than $25,000 Borrower shall have furnished to Lender either (A) a cash
deposit equal to 125% of the amount of the Labor and Material Costs which are
the subject of such Mechanic's Lien, or (B) an indemnity bond reasonably
satisfactory to Lender with a surety reasonably satisfactory to Lender, in the
amount of the Labor and Material Costs which are the subject of such Mechanic's
Lien, plus in each instance a reasonable additional sum to pay all costs,
interest and penalties that may be imposed or incurred in connection therewith;
(iii) no Event of Default shall have occurred and be continuing under the Loan
Agreement, either or both Affiliate Notes, this Deed of Trust or any of the
other Affiliate Loan Documents; (iv) Borrower shall at all times diligently
prosecute the discharge of such Mechanic's Lien; and (v) neither the Property
nor
234
any part thereof nor any interest therein shall be in danger of being sold,
forfeited, terminated, canceled or lost.
Section 3.7 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe and
perform in all material respects each and every term, covenant and provision to
be observed or performed by Borrower pursuant to the Loan Agreement, any other
Loan Document and any other agreement or recorded instrument affecting or
pertaining to the Property, and any amendments, modifications or changes
thereto.
ARTICLE 4
OBLIGATIONS AND RELIANCES
Section 4.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship between
Borrower and Lender is solely that of debtor and creditor, and Lender has no
fiduciary or other special relationship with Borrower, and no term or condition
of any of the Loan Agreement, this Deed of Trust or the other Loan Documents
shall be construed so as to deem the relationship between Borrower and Lender to
be other than that of debtor and creditor.
Section 4.2 NO RELIANCE ON LENDER. The general partners, members,
principals and (if Borrower is a trust) beneficial owners of Borrower, as
applicable, are experienced in the ownership and operation of properties similar
to the Property, and Borrower and Lender are relying solely upon such expertise
and business plan in connection with the ownership and operation of the
Property. Borrower is not relying on Lender's expertise, business acumen or
advice in connection with the Property.
Section 4.3 NO LENDER OBLIGATIONS.
(a) Notwithstanding the provisions of SUBSECTIONS 1.1(h) and (m)
or SECTION 1.2, Lender is not undertaking the performance of (i) any obligations
under the Leases, or (ii) any obligations with respect to any other agreements,
contracts, certificates, instruments, franchises, permits, trademarks, licenses
or other documents.
(b) By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Deed of Trust,
the Loan Agreement, the Affiliate Notes or the other Affiliate Loan Documents,
including, without limitation, any officer's certificate, balance sheet,
statement of profit and loss or other financial statement, survey, appraisal or
insurance policy, Lender shall not be deemed to have warranted, consented to, or
affirmed the sufficiency, legality or effectiveness of same, and such acceptance
or approval thereof shall not constitute any warranty or affirmation with
respect thereto by Lender.
Section 4.4 RELIANCE. Borrower recognizes and acknowledges that in
accepting the Loan Agreement, the Affiliate Notes, this Deed of Trust, the other
Affiliate Loan Documents, and the Loan Documents relating to the Property,
Lender is expressly and primarily relying on the truth and accuracy of the
warranties and representations set forth in Article 3 of the Loan Agreement
without any obligation to investigate the Property and notwithstanding any
investigation of the Property by
235
Lender; that such reliance existed on the part of Lender prior to the date
hereof; that the warranties and representations are a material inducement to
Lender in making the Loan; and that Lender would not be willing to make the Loan
and accept this Deed of Trust in the absence of the warranties and
representations as set forth in Article 3 of the Loan Agreement.
ARTICLE 5
FURTHER ASSURANCES
Section 5.1 RECORDING OF DEED OF TRUST, ETC. Borrower forthwith upon the
execution and delivery of this Deed of Trust and the Guaranty and thereafter,
from time to time, will cause this Deed of Trust, the Guaranty and any of the
other Loan Documents relating to the Property or any of the Affiliate Loan
Documents creating a Lien or security interest or evidencing the Lien hereof
upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect and
perfect the Lien or security interest hereof upon, and the interest of Lender
in, the Property. Borrower will pay all taxes, filing, registration or recording
fees, and all expenses incident to the preparation, execution, acknowledgment
and/or recording of the Affiliate Notes, this Deed of Trust, the Guaranty, the
Loan Documents relating to the Property and the Affiliate Loan Documents, any
note, deed of trust or mortgage supplemental hereto and any instrument of
further assurance, and any modification or amendment of any of the foregoing
documents, and all federal, state, county and municipal taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Deed of Trust, the Guaranty, any deed of trust or mortgage
supplemental hereto or any instrument of further assurance, and any modification
or amendment of any of the foregoing documents, except where prohibited by law
so to do.
Section 5.2 FURTHER ACTS, ETC. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, deeds of trust, assignments,
notices of assignments, transfers and assurances as Lender shall, from time to
time, reasonably require, for the better assuring, conveying, assigning,
transferring, and confirming unto Lender and Trustee the property and rights
hereby deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned,
warranted and transferred or intended now or hereafter so to be, or which
Borrower may be or may hereafter become bound to convey or assign to Trustee or
Lender, or for carrying out the intention or facilitating the performance of the
terms of this Deed of Trust and the Guaranty contained herein or for filing,
registering or recording this Deed of Trust, or for complying with all Legal
Requirements. Borrower, on demand, will execute and deliver, and in the event it
shall fail to so execute and deliver, hereby authorizes Lender to execute in the
name of Borrower or without the signature of Borrower to the extent Lender may
lawfully do so, one or more financing statements to evidence more effectively
the security interest of Lender in the Property. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender at
law and in equity, including, without limitation, such rights and remedies
available to Lender pursuant to this SECTION 5.2.
Section 5.3 CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS.
236
(a) If any law is enacted or adopted or amended after the date of
this Deed of Trust which deducts the Debt from the value of the Property for the
purpose of taxation or which imposes a tax, either directly or indirectly, on
the Debt or Lender's interest in the Property, Borrower will pay the tax, with
interest and penalties thereon, if any. If Lender is advised by counsel chosen
by it that the payment of tax by Borrower would be unlawful or taxable to Lender
or unenforceable or provide the basis for a defense of usury, then Lender shall
have the option by written notice of not less than one hundred twenty (120) days
to declare the Debt immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any
credit or credits on account of the Debt for any part of the Taxes or Other
Charges assessed against the Property, or any part thereof, and no deduction
shall otherwise be made or claimed from the assessed value of the Property, or
any part thereof, for real estate tax purposes by reason of this Deed of Trust
or the Debt. If such claim, credit or deduction shall be required by law, Lender
shall have the option, by written notice of not less than one hundred twenty
(120) days, to declare the Debt immediately due and payable.
(c) If at any time the United States of America, any State
thereof or any subdivision of any such State shall require revenue or other
stamps to be affixed to the Affiliate Notes, this Deed of Trust, any of the Loan
Documents relating to the Property or any of the Affiliate Loan Documents or
shall impose any other tax or charge on the same, Borrower will pay for the
same, with interest and penalties thereon, if any.
Section 5.4 SPLITTING OF DEED OF TRUST. This Deed of Trust and the
Affiliate Notes may, at any time until the same shall be fully paid and
satisfied, at the sole election of Lender, be split or divided into two or more
notes and two or more deeds of trust, in such denominations as Lender shall
determine in its sole discretion (subject to the following sentence), each of
which shall cover all or a portion of the Property to be more particularly
described therein. To that end, Borrower, upon written request of Lender, shall
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered by the then owner of the Property, to Lender and/or its designee or
designees, substitute notes and deeds of trust in such principal amounts,
aggregating not more than the then unpaid principal amount of the Affiliate
Notes, and containing terms, provisions and clauses substantially similar to
those contained herein and in the Affiliate Notes, and such other documents and
instruments as may be reasonably required by Lender.
Section 5.5 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of either or
both Affiliate Notes or any other Affiliate Loan Document which is not of public
record, and, in the case of any such mutilation, upon surrender and cancellation
of either or both Affiliate Notes or such other Affiliate Loan Document,
Borrower will issue, in lieu thereof, or will cause the applicable Affiliate
Borrower to issue, a replacement Affiliate Note or a replacement of such other
Affiliate Loan Document, dated the date of such lost, stolen, destroyed or
mutilated Affiliate Note or other Affiliate Loan Document in the same principal
amount thereof and otherwise of like tenor.
ARTICLE 6
DUE ON SALE/ENCUMBRANCE
237
Section 6.1 LENDER RELIANCE. Borrower acknowledges that Lender has
examined and relied on the experience of Borrower and its general partners,
members, principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Property in agreeing to make the Loan, and will
continue to rely on Borrower's ownership of the Property as a means of
maintaining the value of the Property as security for the payment and
performance of the Obligations, including the repayment of the Debt. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the
Property so as to ensure that, should Borrower default in the payment and/or
performance of the Obligations, including the repayment of the Debt, Lender can
recover the Debt by a sale of the Property.
Section 6.2 NO TRANSFER. Borrower shall not permit or suffer any
Transfer, other than a Permitted Transfer, to occur. Additionally, Borrower
acknowledges and agrees that, pursuant to Section 8.2 of the Loan Agreement,
Lender shall not withhold its consent to the one-time conveyance of the
Property, the Medford Property and the Warrenton Property to one or more
Permitted Transferees provided that, among other things, Borrowers pay to Lender
a transfer fee equal to one percent (1.0%) of the original principal amount of
the Loan (as such term is defined in the Loan Agreement).
ARTICLE 7
RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1 REMEDIES. To the extent permitted by law, upon the occurrence
and during the continuance of any Event of Default, Borrower agrees that Lender
or Trustee, or both, may take such action, without notice or demand, as it deems
advisable to protect and enforce its rights against Borrower and in and to the
Property, including, but not limited to, the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such order as
Lender or Trustee may determine, in their sole discretion, without impairing or
otherwise affecting the other rights and remedies of Lender or Trustee:
(a) declare the entire unpaid Debt to be immediately due and
payable;
(b) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Deed of Trust under any applicable provision of
law, in which case the Property or any interest therein may be sold for cash or
upon credit in one or more parcels or in several interests or portions and in
any order or manner;
(c) with or without entry, to the extent permitted and pursuant
to the procedures provided by applicable law, institute proceedings for the
partial foreclosure of this Deed of Trust for the portion of the Debt then due
and payable, subject to the continuing lien and security interest of this Deed
of Trust for the balance of the Obligations not then due, unimpaired and without
loss of priority;
(d) sell for cash or upon credit the Property or any part thereof
and all estate, claim, demand, right, title and interest of Borrower therein and
rights of redemption thereof, pursuant
238
to power of sale or otherwise, at one or more sales, as an entirety or in
parcels, at such time and place, upon such terms and after such notice thereof,
all as may be required or permitted by law; and, without limiting the foregoing:
(i) In connection with any sale or sales hereunder, Lender or
the Trustee shall be entitled to elect to treat any of the Property which
consists of (x) a right in action, or (y) property that can be severed from
the Real Property covered hereby, or (z) any improvements (without causing
structural damage thereto), as if the same were personal property, and
dispose of the same in accordance with applicable law, separate and apart
from the sale of the Real Property. Where the Property consists of Real
Property, Personal Property, Equipment or Fixtures, whether or not such
Personal Property or Equipment is located on or within the Real Property,
Lender and/or the Trustee shall be entitled to elect to exercise its rights
and remedies against any or all of the Real Property, Personal Property,
Equipment and Fixtures in such order and manner as is now or hereafter
permitted by applicable law;
(ii) Lender and/or the Trustee shall be entitled to elect to
proceed against any or all of the Real Property, Personal Property,
Equipment and Fixtures in any manner permitted under applicable law; and if
Lender and/or the Trustee so elects pursuant to applicable law, the power
of sale herein granted shall be exercisable with respect to all or any of
the Real Property, Personal Property, Equipment and Fixtures covered
hereby, as designated by Lender and/or the Trustee and Trustee is hereby
authorized and empowered to conduct any such sale of any Real Property,
Personal Property, Equipment and Fixtures in accordance with the procedures
applicable to Real Property;
(iii) Should Lender and/or the Trustee elect to sell any portion
of the Property which is Real Property or which is Personal Property,
Equipment or Fixtures that the Lender and/or the Trustee has elected under
applicable law to sell together with Real Property in accordance with the
laws governing a sale of the Real Property, Lender and/or the Trustee shall
give such notice of the occurrence and continuance of an Event of Default,
if any, and its election to sell such Property, each as may then be
required by law. Thereafter, upon the expiration of such time and the
giving of such notice of sale as may then be required by law, subject to
the terms hereof and of the other Loan Documents, and without the necessity
of any demand on Borrower, Lender and/or the Trustee at the time and place
specified in the notice of sale, shall sell such Real Property or part
thereof at public auction to the highest bidder for cash in lawful money of
the United States. Lender or the Trustee may from time to time postpone any
sale hereunder by public announcement thereof at the time and place noticed
for any such sale; and
(iv) If the Property consists of several lots, parcels or items
of property, Lender or the Trustee shall, subject to applicable law, (A)
designate the order in which such lots, parcels or items shall be offered
for sale or sold, or (B) elect to sell such lots, parcels or items through
a single sale, or through two or more successive sales, or in any other
manner Lender or the Trustee designates. Any Person, other than the
Trustee, including Borrower or Lender, may purchase at any sale hereunder.
Should Lender or the Trustee desire that more than one sale or other
disposition of the Property be conducted, Lender or the Trustee shall,
239
subject to applicable law, cause such sales or dispositions to be conducted
simultaneously, or successively, on the same day, or at such different days
or times and in such order as Lender or the Trustee may designate, and no
such sale shall terminate or otherwise affect the Lien of this Deed of
Trust on any part of the Property not sold until all the Obligations have
been satisfied in full. In the event Lender or the Trustee elects to
dispose of the Property through more than one sale, except as otherwise
provided by applicable law, Borrower agrees to pay the costs and expenses
of each such sale and of any judicial proceedings wherein such sale may be
made;
(e) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained herein,
in either or both Affiliate Notes, in the Loan Agreement or in the other Loan
Documents (including, without limitation, the Affiliate Loan Documents);
(f) recover judgment on each of the Affiliate Notes either
before, during or after any proceedings for the enforcement of this Deed of
Trust or the other Loan Documents (including, without limitation, the Affiliate
Loan Documents);
(g) apply for the appointment of a receiver, trustee, liquidator
or conservator of the Property, without notice and without regard for the
adequacy of the security for the Debt and without regard for the solvency of
Borrower, any guarantor or indemnitor with respect to the Loan or any Person
otherwise liable for the payment of the Debt or any part thereof;
(h) the license granted to Borrower under SECTION 1.2 hereof
shall automatically be revoked and Lender may enter into or upon the Property,
either personally or by its agents, nominees or attorneys and dispossess
Borrower and its agents and servants therefrom, without liability for trespass,
damages or otherwise and exclude Borrower and its agents or servants wholly
therefrom, and take possession of all books, records and accounts relating
thereto and Borrower agrees to surrender possession of the Property and of such
books, records and accounts to Lender upon demand, and thereupon Lender may (i)
use, operate, manage, control, insure, maintain, repair, restore and otherwise
deal with all and every part of the Property and conduct the business thereat;
(ii) complete any construction on the Property in such manner and form as Lender
deems advisable; (iii) make alterations, additions, renewals, replacements and
improvements to or on the Property; (iv) exercise all rights and powers of
Borrower with respect to the Property, whether in the name of Borrower or
otherwise, including, without limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants and demand, xxx for, collect and receive
all Rents of the Property and every part thereof; (v) require Borrower to pay
monthly in advance to Lender, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupation of such part of
the Property as may be occupied by Borrower; (vi) require Borrower to vacate and
surrender possession of the Property to Lender or to such receiver and, in
default thereof, Borrower may be evicted by summary proceedings or otherwise;
and (vii) apply the receipts from the Property to the payment and performance of
the Obligations (including, without limitation, the payment of the Debt), in
such order, priority and proportions as Lender shall deem appropriate in its
sole discretion after deducting therefrom all expenses (including reasonable
attorneys' fees and costs) incurred in connection with the aforesaid operations
and all amounts necessary to pay the Taxes, Other Charges,
240
insurance and other expenses in connection with the Property, as well as just
and reasonable compensation for the services of Lender, its counsel, agents and
employees;
(i) exercise any and all rights and remedies granted to a secured
party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing: (i) the right to take possession of
the Fixtures, the Equipment and/or the Personal Property, or any part thereof,
and to take such other measures as Lender may deem necessary for the care,
protection and preservation of the Fixtures, the Equipment and the Personal
Property, and (ii) request Borrower, at its sole cost and expense, to assemble
the Fixtures, the Equipment and/or the Personal Property and make it available
to Lender at a convenient place acceptable to Lender. Any notice of sale,
disposition or other intended action by Lender with respect to the Fixtures, the
Equipment and/or the Personal Property sent to Borrower in accordance with the
provisions hereof at least ten (10) days prior to such action, shall constitute
commercially reasonable notice to Borrower;
(j) apply any sums then deposited or held in escrow or otherwise
by or on behalf of Lender in accordance with the terms of the Loan Agreement,
this Deed of Trust or any other Loan Document (including, without limitation,
the Affiliate Loan Documents) to the payment of the following items in any order
in its sole discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal balance of either or
both of the Affiliate Notes (in such order and priority as Lender shall
determine in its sole discretion);
(iv) Amortization of the unpaid principal balance of
either or both of the Affiliate Notes (in such order and priority as Lender
shall determine in its sole discretion); and/or
(v) All other sums payable pursuant to the Affiliate
Notes, the Loan Agreement, this Deed of Trust and the other Loan Documents
(including, without limitation, the Affiliate Loan Documents), including,
without limitation, the Prepayment Fee, if applicable, and advances made by
Lender pursuant to the terms of this Deed of Trust;
(k) pursue such other remedies as Lender may have under
applicable law; and/or
(l) apply the undisbursed balance of any Net Proceeds Deficiency
deposit, together with interest thereon, to the payment of the Debt in such
order, priority and proportions as Lender shall deem to be appropriate in its
sole discretion.
In the event of a sale, by foreclosure, power of sale or otherwise, of less
than all of Property, this Deed of Trust shall continue as a Lien and security
interest on the remaining portion of the Property unimpaired and without loss of
priority.
Section 7.2 APPLICATION OF PROCEEDS. The purchase money proceeds and
avails of any
241
disposition of the Property or any part thereof, or any other sums
collected by Lender pursuant to either or both of the Affiliate Notes, this Deed
of Trust or the other Loan Documents (including, without limitation, the
Affiliate Loan Documents), may be applied by Lender to the payment of the
Obligations in such priority and proportions as Lender in its discretion shall
deem proper, to the extent consistent with law.
Section 7.3 RIGHT TO CURE DEFAULTS. Upon the occurrence and during the
continuance of any Event of Default or if Borrower fails to make any payment or
to do any act as herein provided, Lender (i) may, but without any obligation to
do so and without notice to or demand on Borrower, and without releasing
Borrower from any obligation hereunder, make or do the same in such manner and
to such extent as Lender may deem reasonably necessary to protect the security
hereof and (ii) is authorized to enter upon the Property for such purposes, or
appear in, defend or bring any action or proceeding to protect its interest in
the Property or to foreclose this Deed of Trust or to collect the Debt, and the
cost and expense thereof (including reasonable attorneys' fees and expenses, to
the extent permitted by law), with interest as provided in this SECTION 7.3,
shall constitute a portion of the Debt and shall be due and payable to Lender
upon demand. All such costs and expenses incurred by Lender in remedying any
Default or Event of Default or in appearing in, defending or bringing any action
or proceeding, as hereinabove provided, shall bear interest at the Default Rate,
for the period beginning on the first day after notice from Lender that such
cost or expense was incurred and continuing until the date of payment to Lender.
All such costs and expenses incurred by Lender together with interest thereon
calculated at the Default Rate shall be deemed to constitute a portion of the
Debt and to be secured by this Deed of Trust and the other Loan Documents
(including, without limitation, the Affiliate Loan Documents) and shall be
immediately due and payable upon demand by Lender therefor.
Section 7.4 ACTIONS AND PROCEEDINGS. Lender and/or Trustee shall have the
right to appear in and defend any action or proceeding brought with respect to
the Property and to bring any action or proceeding, in the name and on behalf of
Borrower, which Lender, in its reasonable discretion, decides should be brought
to protect its interest in the Property.
Section 7.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender or Trustee thereafter to bring an action of foreclosure, or any other
action, for any Event of Default by Borrower existing at the time such earlier
action was commenced.
Section 7.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable times and
upon reasonable written notice, Lender, its agents, accountants and attorneys,
shall have the right to examine the records, books and management and other
papers of Borrower which reflect upon its financial condition, either at the
Property or at any office regularly maintained by Borrower where such books and
records are located. Lender and its agents shall have the right to make copies
and extracts from the foregoing records and other papers. In addition, at
reasonable times and upon reasonable written notice, Lender, its agents,
accountants and attorneys shall have the right to examine and audit the books
and records of Borrower pertaining to the income, expenses and operation of the
Property during reasonable business hours at any office of Borrower where the
books and records are located.
242
This SECTION 7.6 shall apply throughout the terms of the Affiliate Notes and
without regard to whether an Event of Default has occurred or is continuing.
Section 7.7 OTHER RIGHTS, ETC.
(a) The failure of Lender or Trustee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Deed of Trust. Borrower shall not be relieved of Borrower's obligations
hereunder by reason of (i) the failure of Lender or Trustee to comply with any
request of Borrower or any guarantor or indemnitor with respect to the Loan to
take any action to foreclose this Deed of Trust or otherwise enforce any of the
provisions hereof or of the Affiliate Notes or the other Loan Documents
(including, without limitation, the Affiliate Loan Documents), (ii) the release,
regardless of consideration, of the whole or any part of the Property, or of any
Person liable for the Obligations or any portion thereof, or (iii) any agreement
or stipulation by Lender extending the time of payment or otherwise modifying or
supplementing the terms of the Affiliate Notes, this Deed of Trust or the other
Loan Documents (including, without limitation, the Affiliate Loan Documents).
(b) It is agreed that the risk of loss or damage to the Property
is on Borrower, and Lender shall have no liability whatsoever for any decline in
value of the Property, for failure to maintain the Policies, or for failure to
determine whether insurance in force is adequate as to the amount of risks
insured unless due to Lender's gross negligence or intentional misconduct.
Possession by Lender shall not be deemed an election of judicial relief, if any
such possession is requested or obtained, with respect to any Property or
collateral not in Lender's possession.
(c) Lender may resort for the payment and performance of the
Obligations (including, but not limited to, the payment of the Debt) to any
other security held by Lender in such order and manner as Lender, in its
discretion, may elect. Lender or Trustee may take action to recover the Debt, or
any portion thereof, or to enforce the Other Obligations or any covenant hereof,
without prejudice to the right of Lender or Trustee thereafter to foreclose this
Deed of Trust. The rights of Lender or Trustee under this Deed of Trust shall be
separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Lender or Trustee shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision. Neither Lender nor Trustee shall be limited exclusively to the rights
and remedies herein stated but shall be entitled to every right and remedy now
or hereafter afforded at law or in equity.
Section 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the Lien or priority of this Deed of Trust, or improving the position of any
subordinate lienholder with respect thereto, except to the extent that the Debt
shall have been reduced by the actual monetary consideration, if any, received
by Lender for such release, and Lender may accept by assignment, pledge or
otherwise any other property in place thereof as Lender may require without
being accountable for so doing to any other lienholder. This Deed of Trust shall
continue as a Lien and security interest in the remaining portion of the
Property.
Section 7.9 VIOLATION OF LAWS. If the Property is not in compliance with
all Legal
243
Requirements, Lender may reasonably impose additional requirements upon Borrower
in connection herewith, including, without limitation, monetary reserves or
financial equivalents.
Section 7.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding any other
provision of this Deed of Trust or the Loan Agreement, including, without
limitation, Section 11.22 of the Loan Agreement, and to the extent permitted by
law, Lender and the other Indemnified Parties (as hereinafter defined) are
entitled to enforce the obligations of Borrower and any guarantor or indemnitor
of the Loan contained in SECTIONS 8.1, 8.2 and 8.3 herein and SECTION 9.2 of the
Loan Agreement without first resorting to or exhausting any security or
collateral and without first having recourse to either or both Affiliate Notes
or any of the Property, through foreclosure, exercise of a power of sale or
acceptance of a deed in lieu of foreclosure or otherwise, and in the event
Lender commences a foreclosure action against the Property, or otherwise causes
Trustee to exercise the power of sale pursuant to this Deed of Trust, Lender
shall be entitled to pursue a deficiency judgment with respect to such
obligations against Borrower and any guarantor or indemnitor with respect to the
Loan. The provisions of SECTIONS 8.1, 8.2 and 8.3 herein and SECTION 9.2 of the
Loan Agreement are exceptions to any non-recourse or exculpation provisions in
the Loan Agreement, the Affiliate Notes, this Deed of Trust and/or the other
Loan Documents (including, without limitation, the Affiliate Loan Documents),
and Borrower and any guarantor or indemnitor with respect to the Loan are fully
and personally liable for the Obligations set forth in said SECTIONS 8.1, 8.2
and 8.3 herein and SECTION 9.2 of the Loan Agreement. The liability of Borrower
and any guarantor or indemnitor with respect to the Obligations set forth in
SECTIONS 8.1, 8.2 and 8.3 herein and SECTION 9.2 of the Loan Agreement is not
limited to the original principal amount of each of the Affiliate Notes.
Notwithstanding the foregoing, nothing herein shall inhibit or prevent Lender or
Trustee from foreclosing or exercising a power of sale pursuant to this Deed of
Trust or exercising any other rights and remedies pursuant to the Loan
Agreement, the Affiliate Notes, this Deed of Trust and/or the other Loan
Documents (including, without limitation, the Affiliate Loan Documents), whether
simultaneously with foreclosure proceedings or in any other sequence. A separate
action or actions may be brought and prosecuted against Borrower with respect to
the Obligations set forth in SECTIONS 8.1, 8.2 and 8.3 herein and SECTION 9.2 of
the Loan Agreement, whether or not an action is brought against any other Person
and whether or not any other Person is joined in such action or actions. In
addition, Lender shall have the right but not the obligation to join and
participate in, as a party if it so elects, any administrative or judicial
proceedings or actions initiated in connection with any matter addressed in the
Environmental Indemnity.
Section 7.11 RIGHT OF ENTRY. Upon reasonable notice (which may be given
verbally) to Borrower, Lender and its agents shall have the right to enter and
inspect the Property at all reasonable times.
ARTICLE 8
INDEMNIFICATION
Section 8.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges,
244
fees, expenses, judgments, awards, amounts paid in settlement, punitive damages,
foreseeable and unforeseeable consequential damages, of whatever kind or nature
(including, but not limited to, reasonable attorneys' fees and other costs of
defense) (collectively, the "LOSSES"), imposed upon or incurred by or asserted
against any Indemnified Parties and directly or indirectly arising out of or in
any way relating to any one or more of the following: (a) ownership of this Deed
of Trust, the Property or any interest therein or receipt of any Rents; (b) any
amendment to, or restructuring of, the Obligations (including, but not limited
to, the Debt) and either or both Affiliate Notes, the Loan Agreement, this Deed
of Trust and/or any other Loan Document (including, without limitation, the
Affiliate Loan Documents); (c) any and all lawful action that may be taken by
Lender in connection with the enforcement of the provisions of this Deed of
Trust or the Loan Agreement or either or both Affiliate Notes or any of the
other Loan Documents (including, without limitation, the Affiliate Loan
Documents), whether or not suit is filed in connection with same, or in
connection with Borrower, any guarantor or indemnitor and/or any partner,
member, joint venturer or shareholder thereof becoming a party to a voluntary or
involuntary federal or state bankruptcy, insolvency or similar proceeding; (d)
any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways
not attributable to Lender's gross negligence or intentional misconduct; (e) any
use, non-use or condition in, on or about the Property or any part thereof or on
the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (f) any failure on the part of Borrower to perform or to be in
compliance in any material respect with any of the terms of this Deed of Trust;
(g) performance of any labor or services or the furnishing of any materials or
other property in respect of the Property or any part thereof; (h) the failure
of any Person to file timely with the Internal Revenue Service an accurate Form
0000-X, Xxxxxxxxx for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with this Deed of
Trust, or to supply a copy thereof in a timely fashion to the recipient of the
proceeds of the transaction in connection with which this Deed of Trust is made;
(i) any failure of the Property to be in compliance in any material respect with
any Legal Requirements; (j) the enforcement by any of the Indemnified Parties of
the provisions of this ARTICLE 8; (k) any and all claims and demands whatsoever
which may be asserted against Lender by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants or
agreements contained in any Lease not attributable to Lender's gross negligence
or intentional misconduct; (1) the payment of any commission, charge or
brokerage fee to anyone claiming through Borrower (or any affiliate thereof)
which may be payable in connection with the funding of the Loan; or (m) any
misrepresentation of a material fact made by Borrower in this Deed of Trust or
in any other Loan Document. Any amounts payable to Lender by reason of the
application of this SECTION 8.1 shall become immediately due and payable and
shall bear interest at the Default Rate from the date any Loss is sustained by
Lender until such amounts and any applicable interest are paid. For purposes of
this ARTICLE 8, the term "INDEMNIFIED PARTIES" means (A) Lender and any Person
who is or will have been involved in the origination of the Loan, (B) any Person
who is or will have been involved in the servicing of the Loan secured hereby,
(C) any Person in whose name the encumbrance created by this Deed of Trust is or
will have been recorded, (D) Persons who may hold or acquire or will have held a
full or partial interest in the Loan (including, but not limited to, investors
or prospective investors in the Securities, as well as custodians, trustees and
other fiduciaries who hold, have held or may hold a full or partial interest in
the Loan secured hereby for the benefit of third parties), and (E) the
respective directors, officers, shareholders,
245
partners, members, employees, agents, servants, representatives, contractors,
subcontractors, affiliates, subsidiaries, participants, successors and assigns
of any and all of the foregoing (including, but not limited to, any other Person
who holds or acquires or will have held a participation or other full or partial
interest in the Loan, whether during the term of the Loan or as a part of or
following a foreclosure of the Loan, and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of Lender's assets and business).
Section 8.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of this Deed of Trust, either or both Affiliate Notes or any of the other Loan
Documents (including, without limitation, the Affiliate Loan Documents), but
excluding any income, franchise or other similar taxes.
Section 8.3 ERISA INDEMNIFICATION. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses (including, without limitation,
reasonable attorneys' fees and costs incurred in the investigation, defense
and/or settlement of Losses incurred in correcting any prohibited transaction or
in the sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender's reasonable
discretion) that Lender may incur, directly or indirectly, as a result of a
default under Section 4.2.13 of the Loan Agreement.
Section 8.4 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND EXPENSES.
Upon written request by any Indemnified Party, Borrower shall defend such
Indemnified Party (if requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals reasonably approved by
the Indemnified Parties. Notwithstanding the foregoing, if the defendants in any
such claim or proceeding include both Borrower and any Indemnified Party and
Borrower and such Indemnified Party shall have reasonably concluded that there
are any legal defenses available to it and/or other Indemnified Parties that are
different from or in addition to those available to Borrower, such Indemnified
Party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Party, PROVIDED that no compromise or settlement shall be
entered without Borrower's consent, which consent shall not be unreasonably
withheld or delayed. Upon demand, Borrower shall pay or, in the sole and
absolute discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of the reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith.
ARTICLE 9
WAIVERS
Section 9.1 WAIVER OF COUNTERCLAIM. To the extent permitted by applicable
law, Borrower hereby waives the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Lender arising out of or in any way connected with this Deed of
Trust, the Loan Agreement, either or both Affiliate Notes, any of the other Loan
246
Documents (including, without limitation, the Affiliate Loan Documents) or the
Obligations.
Section 9.2 MARSHALLING AND OTHER MATTERS. To the extent permitted by
applicable law, Borrower hereby waives the benefit of all appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, to the extent
permitted by applicable law, Borrower hereby expressly waives any and all rights
of redemption from sale under any order or decree of foreclosure of this Deed of
Trust on behalf of Borrower, and on behalf of each and every Person acquiring
any interest in or title to the Property subsequent to the date of this Deed of
Trust.
Section 9.3 WAIVER OF NOTICE. To the extent permitted by applicable law,
Borrower shall not be entitled to any notices of any nature whatsoever from
Lender or Trustee, except with respect to matters for which this Deed of Trust
or the Loan Documents (including, without limitation, the Affiliate Loan
Documents) specifically and expressly provide for the giving of notice by Lender
or Trustee to Borrower, and except with respect to matters for which Lender or
Trustee is required by applicable law to give notice, and Borrower hereby
expressly waives the right to receive any notice from Lender or Trustee with
respect to any matter for which this Deed of Trust does not specifically and
expressly provide for the giving of notice by Lender or Trustee to Borrower.
Section 9.4 WAIVER OF STATUTE OF LIMITATIONS. To the extent permitted by
applicable law, Borrower hereby expressly waives and releases its right to plead
any statute of limitations as a defense to the payment and performance of the
Obligations (including, without limitation, the payment of the Debt).
Section 9.5 WAIVER OF JURY TRIAL. BORROWER HEREBY AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND FOREVER WAIVES ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST, WITH REGARD TO EITHER OR BOTH AFFILIATE NOTES, THIS DEED OF
TRUST OR THE OTHER LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, THE AFFILIATE
LOAN DOCUMENTS), OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN
CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY BORROWER AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE
ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.
Section 9.6 SURVIVAL. The indemnifications made pursuant to ARTICLE 8
herein and the representations and warranties, covenants, and other obligations
arising under the Environmental Indemnity, shall continue indefinitely in full
force and effect and shall survive and shall in no way be impaired by (a) any
satisfaction, release or other termination of this Deed of Trust or any other
Loan Document (including, without
247
limitation, the Affiliate Loan Documents), (b) any assignment or other transfer
of all or any portion of this Deed of Trust or any other Loan Document
(including, without limitation, the Affiliate Loan Documents) or Lender's
interest in the Property (but, in such case, such indemnifications shall benefit
both the Indemnified Parties and any such assignee or transferee), (c) any
exercise of Lender's rights and remedies pursuant hereto, including, but not
limited to, foreclosure or acceptance of a deed in lieu of foreclosure, any
exercise of any rights and remedies pursuant to the Loan Agreement, either or
both Affiliate Notes or any of the other Loan Documents (including, without
limitation, the Affiliate Loan Documents), any transfer of all or any portion of
the Property (whether by Borrower or by Lender following foreclosure or
acceptance of a deed in lieu of foreclosure or at any other time), (d) any
amendment to this Deed of Trust, the Loan Agreement, either or both Affiliate
Notes or any other Loan Document (including, without limitation, the Affiliate
Loan Documents), and/or (e) any act or omission that might otherwise be
construed as a release or discharge of Borrower from the Obligations or any
portion thereof.
ARTICLE 10
EXCULPATION
The provisions of Section 11.22 of the Loan Agreement are hereby
incorporated by reference into this Deed of Trust to the same extent and with
the same force as if fully set forth herein.
ARTICLE 11
NOTICES
All notices or other written communications hereunder shall be delivered in
accordance with Section 11.6 of the Loan Agreement.
ARTICLE 12
APPLICABLE LAW
Section 12.1 GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS. (a) THIS
DEED OF TRUST WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY BORROWER AND
ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE AFFILIATE
NOTES SECURED HEREBY WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS DEED OF TRUST AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, THE
AFFILIATE LOAN DOCUMENTS) WITH RESPECT TO THE PROPERTY SHALL BE GOVERNED BY, AND
248
CONSTRUED ACCORDING TO, THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED,
IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH
STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY
AND ENFORCEABILITY OF ALL LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, THE
AFFILIATE LOAN DOCUMENTS) AND ALL OF THE OBLIGATIONS ARISING HEREUNDER AND
THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS DEED OF TRUST AND/OR THE OTHER LOAN DOCUMENTS
(INCLUDING, WITHOUT LIMITATION, THE AFFILIATE LOAN DOCUMENTS), AND THIS DEED OF
TRUST AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS DEED OF TRUST MAY, AT LENDER'S OPTION, BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX
XXXX, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT
XXXXXX XXXXXX & XXXXX
000 XXXX 00XX XXXXXX
XXXXX 0000
XXX XXXX, XX 00000
ATTENTION: XXXXX XXXXXXXXX, ESQ. (CHICAGO OFFICE)
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
249
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER OR TRUSTEE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION.
Section 12.2 USURY LAWS. Notwithstanding anything to the contrary, (a) all
agreements and communications between Borrower and Lender are hereby and shall
automatically be limited so that, after taking into account all amounts deemed
to constitute interest, the interest contracted for, charged or received by
Lender shall never exceed the Maximum Legal Rate, (b) in calculating whether any
interest exceeds the Maximum Legal Rate, all such interest shall be amortized,
prorated, allocated and spread over the full amount and term of all principal
indebtedness of Borrower to Lender, and (c) if through any contingency or event,
Lender receives or is deemed to receive interest in excess of the Maximum Legal
Rate, any such excess shall be deemed to have been applied toward payment of the
principal of any and all then outstanding indebtedness of Borrower to Lender, or
if there is no such indebtedness, shall immediately be returned to Borrower.
Section 12.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and
remedies provided in this Deed of Trust may be exercised only to the extent that
the exercise thereof does not violate any applicable provisions of law and are
intended to be limited to the extent necessary so that they will not render this
Deed of Trust invalid, unenforceable or not entitled to be recorded, registered
or filed under the provisions of any applicable law. If any term of this Deed of
Trust or any application thereof shall be invalid or unenforceable, the
remainder of this Deed of Trust and any other application of the term shall not
be affected thereby.
ARTICLE 13
DEFINITIONS
Unless the context clearly indicates a contrary intent or unless otherwise
specifically provided herein, words used in this Deed of Trust may be used
interchangeably in the singular or plural form and the word "Borrower" shall
mean "each Borrower and any subsequent owner or owners of the Property or any
part thereof or any interest therein," the word "Lender" shall mean "Lender and
any subsequent holder of each of the Affiliate Notes," the term "Affiliate
Notes" shall mean "the Affiliate Notes and any other evidence of indebtedness
secured by this Deed of Trust," the word "Property" shall include any portion of
the Property and any interest therein, and the phrases "attorneys' fees", "legal
fees" and "counsel fees" shall include any and all attorneys', paralegal and law
clerk fees and disbursements, including, but not limited to, fees and
disbursements at the pre-trial, trial and appellate levels, incurred or paid by
Lender in protecting its interest in the Property, the Leases and/or the Rents
and/or in enforcing its rights hereunder. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms.
ARTICLE 14
250
MISCELLANEOUS PROVISIONS
Section 14.1 NO ORAL CHANGE. This Deed of Trust, and any provisions
hereof, may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party(ies) against
whom enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.
Section 14.2 SUCCESSORS AND ASSIGNS. This Deed of Trust shall be binding
upon, and shall inure to the benefit of, Borrower and Lender and their
respective successors and permitted assigns, as set forth in the Loan Agreement.
Section 14.3 INAPPLICABLE PROVISIONS. If any provision of this Deed of
Trust is held to be illegal, invalid or unenforceable under present or future
laws effective during the term of this Deed of Trust, such provision shall be
fully severable and this Deed of Trust shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part of
this Deed of Trust, and the remaining provisions of this Deed of Trust shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance from this Deed of Trust,
unless such continued effectiveness of this Deed of Trust, as modified, would be
contrary to the basic understandings and intentions of the parties as expressed
herein.
Section 14.4 HEADINGS, ETC. The headings and captions of the various
Sections of this Deed of Trust are for convenience of reference only and are not
to be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
Section 14.5 SUBROGATION. If any or all of the proceeds of either or both
Affiliate Notes have been used to extinguish, extend or renew any indebtedness
heretofore existing against the Property, then, to the extent of the funds so
used, Lender shall be subrogated to all of the rights, claims, liens, titles and
interests existing against the Property heretofore held by, or in favor of, the
holder of such indebtedness and such former rights, claims, liens, titles and
interests, if any, are not waived, but rather are continued in full force and
effect in favor of Lender and are merged with the Lien and security interest
created herein as cumulative security for the payment, performance and discharge
of the Obligations (including, but not limited to, the payment of the Debt).
Section 14.6 ENTIRE AGREEMENT. The Affiliate Notes, the Loan Agreement,
this Deed of Trust and the other Loan Documents (including, without limitation,
the Affiliate Loan Documents) constitute the entire understanding and agreement
between Borrower and Lender with respect to the transactions arising in
connection with the Obligations and supersede all prior written or oral
understandings and agreements between Borrower and Lender with respect thereto.
Borrower hereby acknowledges that, except as incorporated in writing in the
Affiliate Notes, the Loan Agreement, this Deed of Trust and the other Loan
Documents (including, without limitation, the Affiliate Loan Documents), there
are not, and were not, and no Persons are or were authorized by Lender to make,
any representations, understandings, stipulations, agreements or promises, oral
or written, with respect to the transaction which is the subject of the
Affiliate Notes, the Loan Agreement, this Deed of Trust and the other Loan
Documents (including, without limitation, the Affiliate Loan
251
Documents).
Section 14.7 LIMITATION ON LENDER'S RESPONSIBILITY. No provision of this
Deed of Trust shall operate to place any obligation or liability for the
control, care, management or repair of the Property upon Lender, nor shall it
operate to make Lender responsible or liable for any waste committed on the
Property by the Tenants or any other Person, or for any dangerous or defective
condition of the Property, or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
Tenant, licensee, employee or stranger unless arising by, through or under
Lender's gross negligence or intentional misconduct. Nothing herein contained
shall be construed as constituting Lender a "mortgagee in possession."
Section 14.8 RECITALS. The recitals hereof are a part hereof, form a basis
for this Deed of Trust and shall be considered PRIMA FACIE evidence of the facts
and documents referred to therein.
ARTICLE 15
DEED OF TRUST PROVISIONS
Section 15.1 CONCERNING THE TRUSTEE. Trustee shall be under no duty to
take any action hereunder except as expressly required hereunder or by law, or
to perform any act which would involve Trustee in any expense or liability or to
institute or defend any suit in respect hereof, unless properly indemnified to
Trustee's reasonable satisfaction. Trustee, by acceptance of this Deed of Trust,
covenants to perform and fulfill the trusts herein created, being liable,
however, only for willful negligence or misconduct, and hereby waives any
statutory fee and agrees to accept reasonable compensation, in lieu thereof, for
any services rendered by Trustee in accordance with the terms hereof. Trustee
may resign at any time upon giving thirty (30) days' notice to Borrower and to
Lender. Lender may remove Trustee at any time or from time to time and select a
successor trustee. In the event of the death, removal, resignation, refusal to
act or inability to act of Trustee, or in Lender's sole discretion for any
reason whatsoever, Lender may, without notice and without specifying any reason
therefor and without applying to any court, select and appoint a successor
trustee, by an instrument recorded wherever this Deed of Trust is recorded, and
all powers, rights, duties and authority of Trustee, as aforesaid, shall
thereupon become vested in such successor. Such substitute trustee shall not be
required to give bond for the faithful performance of the duties of Trustee
hereunder unless required by Lender. The procedure provided for in this
paragraph for substitution of Trustee shall be in addition to and not in
exclusion of any other provisions for substitution, by law or otherwise.
Section 15.2 TRUSTEE'S FEES. Borrower shall pay all reasonable costs, fees
and expenses incurred by Trustee and Trustee's agents and counsel in connection
with the performance by Trustee of Trustee's duties hereunder and all such
costs, fees and expenses shall be secured by this Deed of Trust.
Section 15.3 CERTAIN RIGHTS. With the approval of Lender, Trustee shall
have the right to take any and all of the following actions: (i) to select,
employ and advise with counsel (who may be, but need not be, counsel for Lender)
upon any matters arising hereunder, including the preparation, execution and
interpretation of the Loan Agreement, the Affiliate Notes, this Deed of Trust or
the
252
other Loan Documents (including, without limitation, the Affiliate Loan
Documents), and shall be fully protected in relying as to legal matters on the
advice of counsel, (ii) to execute any of the trusts and powers hereof and to
perform any duty hereunder either directly or through its agents or attorneys,
(iii) to select and employ, in and about the execution of his duties hereunder,
suitable accountants, engineers and other experts, agents and attorneys-in-fact,
either corporate or individual, not regularly in the employ of Trustee, and
Trustee shall not be answerable for any act, default, negligence or misconduct
of any such accountant, engineer or other expert, agent or attorney-in-fact, if
selected with reasonable care, or for any error of judgment or act done by
Trustee in good faith, or be otherwise responsible or accountable under any
circumstances whatsoever, except for Trustee's gross negligence or bad faith,
and (iv) to take any and all other lawful action as Lender may instruct Trustee
to take to protect or enforce Lender's rights hereunder. Trustee shall not be
personally liable in case of entry by Trustee, or anyone entering by virtue of
the powers herein granted to Trustee, upon the Property for debts contracted for
or liability or damages incurred in the management or operation of the Property.
Trustee shall have the right to rely on any instrument, document or signature
authorizing or supporting an action taken or proposed to be taken by Trustee
hereunder, believed by Trustee in good faith to be genuine. Trustee shall be
entitled to reimbursement for actual expenses incurred by Trustee in the
performance of Trustee's duties hereunder and to reasonable compensation for
such of Trustee's services hereunder as shall be rendered.
Section 15.4 RETENTION OF MONEY. All moneys received by Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by applicable law) and Trustee shall
be under no liability for interest on any moneys received by Trustee hereunder.
Section 15.5 PERFECTION OF APPOINTMENT. Should any deed, conveyance or
instrument of any nature be required from Borrower by any Trustee or substitute
trustee to more fully and certainly vest in and confirm to the Trustee or
substitute trustee such estates rights, powers and duties, then, upon request by
Trustee or any substitute trustee, any and all such deeds, conveyances and
instruments shall be made, executed, acknowledged and delivered and shall be
caused to be recorded and/or filed by Borrower.
Section 15.6 SUCCESSION INSTRUMENTS. Any substitute trustee appointed
pursuant to any of the provisions hereof shall, without any further act, deed or
conveyance, become vested with all the estates, properties, rights, powers and
trusts of its predecessor in the rights hereunder with like effect as if
originally named as Trustee herein; but nevertheless, upon the written request
of Lender or of the substitute trustee, the Trustee ceasing to act shall execute
and deliver any instrument transferring to such substitute trustee, upon the
trusts herein expressed, all the estates, properties, rights, powers and trusts
of the Trustee so ceasing to act, and shall duly assign, transfer and deliver
any of the property and moneys held by such Trustee to the substitute trustee so
appointed in the Trustee's place.
Section 15.7 SUBORDINATION TO FIRST MORTGAGE. This Deed of Trust is, to
the extent set forth herein, subject and subordinate to the First Mortgage
encumbering the Property. The present beneficiary of the First Mortgage is
Lender. To the extent that the claims of the present or any future
253
beneficiary of the First Mortgage are legally prior in right to the rights of
Lender hereunder, the rights of Lender hereunder are subject and subordinate to
the rights of such beneficiary or beneficiaries of the First Mortgage. Borrower
further agrees that the First Mortgage will not be amended, extended, increased,
readvanced or refinanced without the prior written consent of Lender and will
continue to be paid in accordance with the terms set forth in the copy of the
First Mortgage which was furnished to Lender immediately prior to the execution
of this Deed of Trust.
ARTICLE 16
GUARANTY
Section 16.1 UNCONDITIONAL GUARANTY. Borrower unconditionally guarantees
(i) payment and performance of the Obligations, (ii) payment of any additional
amounts advanced by Lender pursuant to the provisions of this Deed of Trust,
together with interest thereon at the rate provided therein, (iii) payment of
all expenses incurred by Lender and, to the extent reasonable, its counsel, in
connection with the administration or enforcement of each of the Affiliate
Loans, and (iv) any and all costs (including reasonable attorneys' fees)
incurred in enforcing the guaranty of the Obligations of Borrower hereunder.
Section 16.2 JOINT AND SEVERAL OBLIGATIONS. Borrower's obligations
hereunder are joint and several with any other guarantor now or hereafter
guaranteeing the Obligations under the documents evidencing and/or securing each
of the Affiliate Loans and are independent of the obligations of each Affiliate
Borrower under the documents evidencing and/or securing each of the Affiliate
Loans. A separate action or actions may be brought and prosecuted against
Borrower, whether or not action is brought against each Affiliate Borrower under
each of the Affiliate Notes, respectively, or any other guarantor or whether or
not the borrower thereunder or any other guarantor are joined in such action or
actions.
Section 16.3 NOT A COLLECTION GUARANTY. This guaranty is a guaranty of
payment and not of collection. Borrower waives any right to require Lender at
any time to (a) proceed against each Affiliate Borrower or any other guarantors
under each of the Affiliate Loans, (b) proceed against or exhaust any security
held from each of the Affiliate Borrowers under the Affiliate Loans, or (c)
pursue any other remedy in Lender's power whatsoever.
Section 16.4 CHANGE IN TERMS OF LOAN. Borrower authorizes Lender, without
notice or demand and without affecting Borrower's liability hereunder, from time
to time to renew,
254
compromise, extend, accelerate or otherwise change the time for payment or the
terms of each of the Affiliate Loans or any part thereof, including an increase
or decrease of the rate of interest thereon.
Section 16.5 CONSENT TO RELEASES. Borrower consents, without notice to
Borrower, (i) to the release of all or any part of the security for each of the
Affiliate Loans, (ii) to the release of any party liable for each of the
Affiliate Loans, and (iii) to the release of any other guarantor from the
obligations, or portions thereof, guaranteed hereby.
Section 16.6 BANKRUPTCY OF AN AFFILIATE BORROWER. Neither Borrower's
obligation to make payment in accordance with the terms of this guaranty nor any
remedy for the enforcement hereof shall be impaired, modified, changed, released
or limited in any manner whatsoever by the bankruptcy of an Affiliate Borrower
under each of the Affiliate Loans or by any impairment, modification, change,
release or limitation of (i) the liability of an Affiliate Borrower, any party
assuming the obligations of such borrower under each of the Affiliate Loans, or
such borrower's estate in bankruptcy, or (ii) any remedy for the enforcement of
each of the Affiliate Loans, either of which result from the operation of any
present or future provision of the Bankruptcy Reform Act of 1978 or other
statute, or from the decision of any court.
Section 16.7 VALID AND BINDING GUARANTY. Borrower's execution, delivery,
observance and performance of this guaranty do not and will not conflict with or
result in a breach of the terms or provisions of any existing rule, regulation
or order of any court or governmental body or of any indenture, agreement or
instrument to which Borrower is a party, or by which Borrower is bound, or to
which Borrower is subject, or constitute a default thereunder. This guaranty has
been duly executed and delivered by Borrower and constitutes a valid and binding
guaranty enforceable in accordance with its terms.
Section 16.8 WAIVER OF BORROWER'S DEFENSES. Borrower waives any defense
arising by reason of any disability or other defense whatsoever of the liability
of an Affiliate Borrower under each of the Affiliate Loans. Until all
indebtedness of each of the Affiliate Borrowers under each of the Affiliate
Loans to Lender shall have been paid in full, even though such indebtedness is
in excess of Borrower's liability hereunder, Borrower waives (a) any right of
subrogation, (b) any right to enforce any remedy which Lender now has or may
hereafter have against any Affiliate Borrower under each of the Affiliate Loans,
and (c) any benefit of, and any right to participate in, any security now or
hereafter held by Lender. Borrower also waives and renounces any and all
homestead exemption rights against the obligations hereunder and also waives all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance of this
guaranty.
Section 16.9 SUBORDINATION OF EACH AFFILIATE BORROWER'S INDEBTEDNESS. Any
indebtedness of each of the Affiliate Borrowers now or hereafter owed to or held
by Borrower is hereby subordinated to the indebtedness of such Affiliate
Borrower to Lender. Such indebtedness of each of the Affiliate Borrowers under
each of the Affiliate Loans, respectively, to Borrower shall, if Lender so
requests, be collected, enforced and received by Borrower as trustee for Lender
and be paid over to Lender on account of the indebtedness of such Affiliate
Borrower to Lender, but without reducing or affecting in any manner the
liability of Borrower under the other provisions of this guaranty.
255
Section 16.10 ACCELERATION UPON EVENT OF DEFAULT. At the option of Lender
and with or without demand or notice, all or any part of Borrower's Obligations
hereunder shall become due and payable immediately upon the occurrence and
during the continuance of an Event of Default, as such term is defined in this
Deed of Trust or any of the Affiliate Loan Documents.
Section 16.11 LENDER'S RIGHT TO ASSIGN. Lender may, without notice
whatsoever to anyone, sell, assign or transfer all of any Borrower's or any
Affiliate Borrower's indebtedness, obligations and liabilities or any part
thereof. In such event, each and every successive assignee, transferee or Lender
of all or any part of said indebtedness, obligation and liability shall have the
right to enforce this guaranty by suit or otherwise for the benefit of such
assignee, transferee or Lender as fully as if such assignee, transferee or
Lender were herein by name specifically given such rights, powers, and benefits;
provided, however, that Lender, shall have an unimpaired right to enforce this
guaranty for its benefit as to so much of said indebtedness, obligations and
liabilities that it has not sold, assigned or transferred.
Section 16.12 LIABILITY OF BORROWER. Borrower's liability under this Deed
of Trust, including this ARTICLE 16, shall be non-recourse.
ARTICLE 17
STATE-SPECIFIC PROVISIONS
Section 17.1 PRINCIPLES OF CONSTRUCTION. In the event of any
inconsistencies between the terms and conditions of this ARTICLE 17 and the
other terms and conditions of this Deed of Trust, the terms and conditions of
this ARTICLE 17 shall control and be binding.
[PROVISIONS TO BE INSERTED FOR STATE IN WHICH PROPERTY IS LOCATED]
[NO FURTHER TEXT ON THIS PAGE]
256
IN WITNESS WHEREOF, THIS DEED OF TRUST has been executed by Borrower as of
the day and year first above written.
XXXXXXXX OUTLET CENTER LLC,
a Delaware limited liability company
By:
---------------------------------
Name:
Title:
257
ACKNOWLEDGMENT
[INSERT STATE SPECIFIC ACKNOWLEDGMENT]
258
EXHIBIT A
LEGAL DESCRIPTION
(Attached hereto)
259
