EXHIBIT 10.3
FPR HOLDINGS LIMITED PARTNERSHIP
(Trustor)
to
Xxxxxxx X. Xxxxx, Xx.
(Trustee)
and
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
(Beneficiary)
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT
Dated: As of December 23, 1997
PROPERTY LOCATION:
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
CADWALADER, XXXXXXXXXX & XXXX
000 XXXXXX XXXX
XXX XXXX, XXX XXXX 00000
ATTENTION: XXXXXXXX X. XXXXXXXX, ESQ.
/s/ X. XXXXXX (STAMP)
---------------------
TABLE OF CONTENTS
GRANTING CLAUSE ONE ............................................................... 1
GRANTING CLAUSE TWO ............................................................... 2
GRANTING CLAUSE THREE ............................................................. 2
GRANTING CLAUSE FOUR .............................................................. 2
GRANTING CLAUSE FIVE .............................................................. 3
GRANTING CLAUSE SIX ............................................................... 3
GRANTING CLAUSE SEVEN ............................................................. 3
GRANTING CLAUSE EIGHT ............................................................. 3
PART I ............................................................................ 4
1. Payment of Debt and Incorporation of Covenants, Conditions and Agreements ... 4
2. Warranty of Title ........................................................... 4
3. Insurance ................................................................... 4
4. Casualty .................................................................... 7
5. Payment of Taxes, Etc ....................................................... 8
6. Tax and Insurance Impound Fund; Replacement Escrow Fund ..................... 9
7. Condemnation ................................................................ 11
8. Leases and Rents ............................................................ 13
9. Maintenance and Use of Trust Property ....................................... 15
10. Transfer or Encumbrance of the Trust Property .............................. 15
11. Representations and Covenants Concerning Loan .............................. 17
12. Single Purpose Entity/Separateness ......................................... 25
13. Estoppel Certificates and No Default Affidavits ............................ 27
14. Controlling Agreement ...................................................... 27
15. Changes in Laws Regarding Taxation ......................................... 28
16. No Credits on Account of the Debt .......................................... 28
17. Documentary Stamps ......................................................... 29
18. Books and Records .......................................................... 29
19. Performance of Other Agreements ............................................ 31
20. Further Acts, Etc. ......................................................... 31
21. Recording of Deed of Trust, Etc. ........................................... 31
22. Reporting Requirements ..................................................... 32
23. Events of Default .......................................................... 32
24. Late Payment Charge ........................................................ 33
25. Right To Cure Defaults ..................................................... 34
26. Additional Remedies ........................................................ 34
27. Right of Entry ............................................................. 37
28. Security Agreement ......................................................... 38
29. Actions and Proceedings .................................................... 39
30. Waiver of Setoff and Counterclaim .......................................... 39
31. Contest of Certain Claims .................................................. 39
32. Recovery of Sums Required to be Paid ....................................... 40
33. Marshalling and Other Matters .............................................. 40
34. Hazardous Substances ....................................................... 40
35 Asbestos.................................................................... 41
36. Environmental Monitoring.................................................... 42
37. Handicapped Access ......................................................... 43
38. Indemnification ............................................................ 43
39. Notices .................................................................... 44
40. Authority .................................................................. 44
41. Waiver of Notice ........................................................... 45
42. Remedies of Trustor ........................................................ 45
43. Sole Discretion of Beneficiary ............................................. 45
44. Non-Waiver ................................................................. 45
45. No Oral Change ............................................................. 46
46. Liability .................................................................. 46
47. Inapplicable Provisions .................................................... 46
48. Headings, Etc. ............................................................. 46
49. Duplicate Originals ........................................................ 46
50. Definitions ................................................................ 46
51. Homestead .................................................................. 47
52. Assignments ................................................................ 47
53. Waiver of Jury Trial ....................................................... 47
54. Trustee's Fees; Substitute Trustee ......................................... 47
55. Power of Sale .............................................................. 48
56. Recourse Provisions ........................................................ 49
57. Defeasance ................................................................. 51
58. Cash Management Agreement .................................................. 53
59. Miscellaneous .............................................................. 54
60. Management of the Trust Property ........................................... 56
61. Sale of Notes and Securitization ........................................... 56
62. Servicer ................................................................... 57
PART II ........................................................................... 58
63. Principles of Construction ................................................. 58
64. Maryland ................................................................... 58
65. Cross-Default; Cross-Collateralization; Waiver of Marshaling of Assets ..... 60
STATE SPECIFIC PROVISIONS ......................................................... 61
LEGAL DESCRIPTION ................................................................. 1
THIS
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (the "DEED OF TRUST"), made as of December 23, 1997, by FPR HOLDINGS
LIMITED PARTNERSHIP, a Delaware limited Partnership, having its principal place
of business at x/x Xxxxxxxxx & Xxxxx, Inc., 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, XX 00000 ("TRUSTOR"), to Xxxxxxx X. Xxxxx, Xx., the trustee hereunder,
having an address at 0000 00xx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, X.X. 00000
("TRUSTEE"), for the benefit of CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC,
a Delaware limited liability company ("BENEFICIARY"), having its principal
office at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
WITNESSETH:
To secure the payment of an indebtedness in the original principal sum
of Six Million Two Hundred Thirty-One Thousand Eight Hundred Seventy-Five and
no/100 Dollars ($6,231,875), lawful money of the United States of America, to be
paid with interest according to a certain deed of trust note of even date
herewith made by Trustor to Beneficiary (the deed of trust note together with
all extensions, renewals or modifications thereof being hereinafter collectively
called the "NOTE", and the loan evidenced by the Note hereinafter being referred
to as the "LOAN") and all other sums due hereunder, under the other Loan
Documents (hereinafter defined) and under the Note (said indebtedness and
interest due under the Note and all other sums due hereunder under the Note and
the other Loan Documents being hereinafter collectively referred to as the
"DEBT"), Trustor has deeded, mortgaged, given, granted, bargained, sold,
alienated, enfeoffed, conveyed, confirmed, warranted, pledged, assigned, and
hypothecated and by these presents does hereby deed, mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm, warrant, pledge, assign and
hypothecate unto Trustee (in trust), the real property described in Exhibit A
attached hereto (the "PREMISES") and the buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter located thereon (the IMPROVEMENTS");
TOGETHER WITH: all right, title, interest and estate of Trustor now
owned, or hereafter acquired, in and to the following property, rights,
interests and estates (the Premises, the Improvements and such property, rights,
interests and estates hereinafter described are collectively referred to herein
as the "TRUST PROPERTY"):
GRANTING CLAUSE ONE
All easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
air rights and development rights, all rights to oil, gas, minerals, coal and
other substances of any kind or character, and all estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments and appurtenances of
any nature whatsoever, in any way belonging, relating or pertaining to the
Premises and the Improvements and the reversion and reversions, remainder and
remainders, and all land lying in the bed of any street, road, highway, alley or
avenue.
opened, vacated or proposed, in front of or adjoining the Premises, to the
center line thereof and all the estates, rights, titles, interests, dower and
rights of dower, curtsey and rights of curtsey, property possessions claim and
demand whatsoever, both at law and in equity, of Trustor of, in and to the
Premises and the Improvements and every part and parcel thereof, with the
appurtenances thereto;
GRANTING CLAUSE TWO
All machinery, furniture, furnishings, equipment, computer software and
hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature, whether tangible or intangible,
whatsoever owned by Trustor, or in which Trustor has or shall have an interest,
now or hereafter located upon the Premises and the Improvements, or appurtenant
thereto, and usable in connection with the present or future operation and
occupancy of the Premises and the Improvements and all building equipment,
materials and supplies of any nature whatsoever owned by Trustor, or in which
Trustor has or shall have an interest, now or hereafter located upon the
Premises and the Improvements, or appurtenant thereto, or usable in connection
with the present or future operation, enjoyment and occupancy of the Premises
and the Improvements (hereinafter collectively referred to as the "EQUIPMENT"),
including any leases of any of the foregoing, any deposits existing at any time
in connection with any of the foregoing, and the proceeds of any sale or
transfer of the foregoing, and the right, title and interest of Trustor in and
to any of the Equipment that 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 Trust Property is located (the "UNIFORM COMMERCIAL
CODE"), superior in lien to the lien of this Deed of Trust;
GRANTING CLAUSE THREE
Awards or payments, including interest thereon, that may heretofore and
hereafter be made with respect to the Premises and the Improvements, whether
from the exercise of the right of eminent domain or condemnation (including,
without limitation, any transfer made in lieu of or in anticipation of the
exercise of said rights), or for a change of grade, or for any other injury to
or decrease in the value of the Premises and Improvements;
GRANTING CLAUSE FOUR
All leases and other agreements or arrangements heretofore or hereafter
entered into affecting the use, enjoyment or occupancy of, or the conduct of any
activity upon or in, the Premises and the Improvements, including any
extensions, renewals, modifications or amendments thereof (the "LEASES") and all
rents, rent equivalents, moneys payable as damages or in lieu of rent or rent
equivalents, royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Trustor or its agents or employees
-2-
from any and all sources arising from or attributable to the Premises and the
Improvements (the "RENTS"), together with all proceeds from the sale or other
disposition of the Leases and the right to receive and apply the Rents to the
payment of the Debt;
GRANTING CLAUSE FIVE
All proceeds of and any unearned premiums on any insurance policies
covering the Trust Property, including, without limitation, the right to receive
and apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Trust Property;
GRANTING CLAUSE SIX
The right, in the name and on behalf of Trustor, to appear in and
defend any action or proceeding brought with respect to the Trust Property and
to commence any action or proceeding to protect the interest of Beneficiary in
the Trust Property;
GRANTING CLAUSE SEVEN
All accounts, escrows, documents, instruments, chattel paper, claims,
deposits and general intangibles, as the foregoing terms are defined in the
Uniform Commercial Code, and all franchises, trade names, trademarks, symbols,
service marks, books, records, plans, specifications, designs, drawings,
permits, consents, licenses, management agreements, contract rights (including,
without limitation, any contract with any architect or engineer or with any
other provider of goods or services for or in connection with any construction,
repair, or other work upon the Trust Property), approvals, actions, refunds of
real estate taxes and assessments (and any other governmental impositions
related to the Trust Property), and causes of action that now or hereafter
relate to, are derived from or are used in connection with the Trust Property,
or the use, operation, maintenance, occupancy or enjoyment thereof or the
conduct of any business or activities thereon (hereinafter collectively referred
to as the "INTANGIBLES"); and
GRANTING CLAUSE EIGHT
All proceeds, products, offspring, rents and profits from any of the
foregoing, including, without limitation, those from sale, exchange, transfer,
collection, loss, damage, disposition, substitution or replacement of any of the
foregoing.
TO HAVE AND TO HOLD the above granted and described Trust Property unto
and to the use and benefit of Trustee and its successors and assigns, for the
benefit of Beneficiary, forever;
IN TRUST, WITH POWER OF SALE, to secure the payment to Beneficiary of
the Debt at the time and in the manner provided for its payment in the Note and
in this Deed of Trust;
-3-
PROVIDED, HOWEVER, these presents are upon the express condition that,
if Trustor shall well and truly pay to Beneficiary the Debt at the time and in
the manner provided in the Note and this Deed of Trust and shall well and truly
abide by and comply with each and every covenant and condition set forth herein,
in the Note and in the other Loan Documents (hereinafter defined) in a timely
manner, these presents and the estate hereby granted shall cease, terminate and
be void;
AND Trustor represents and warrants to and covenants and agrees with
Beneficiary and Trustee as follows:
PART I
GENERAL PROVISIONS
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS AND
AGREEMENT. Trustor shall pay the Debt at the time and in the manner provided in
the Note and in this Deed of Trust. All the covenants, conditions and agreements
contained in (a) the Note and (b) all and any of the documents including the
Note and this Deed of Trust now or hereafter executed by Trustor and/or others
and by or in favor of Beneficiary, which evidences, secures or guarantees all or
any portion of the payments due under the Note or otherwise is executed and/or
delivered in connection with the Note and this Deed of Trust (the "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.
2. WARRANTY OF TITLE. Trustor warrants that Trustor has good,
marketable and insurable title to the Trust Property and has the full power,
authority and right to execute, deliver and perform its obligations under this
Deed of Trust and to deed, encumber, mortgage, give, grant, bargain, sell,
alienate, enfeoff, convey, confirm, pledge, assign and hypothecate the same and
that Trustor possesses an unencumbered fee estate in the Premises and the
Improvements and that it owns the Trust Property free and clear of all liens,
encumbrances and charges whatsoever except for those exceptions shown in the
title insurance policy insuring the lien of this Deed of Trust (the "PERMITTED
EXCEPTIONS") and that this Deed of Trust is and will remain a valid and
enforceable first lien on and security interest in the Trust Property, subject
only to said exceptions. Trustor shall forever warrant, defend and preserve such
title and the validity and priority of the lien of this Deed of Trust and shall
forever warrant and defend the same to Beneficiary against the claims of all
persons whomsoever.
3. INSURANCE.
(a) Trustor, at its sole cost and expense, for the mutual
benefit of Trustor and Beneficiary, shall obtain and maintain during the entire
term of this Deed of Trust (the "TERM") policies of insurance against loss or
damage by fire, lightning and such other perils as are included in a standard
"all-risk" endorsement, and against loss or damage by all other risks and
hazards covered by a standard extended coverage insurance policy including,
without limitation, riot and civil commotion, vandalism, malicious mischief,
burglary and
-4-
theft. Such insurance shall be in an amount equal to the greatest of (i) the
then full replacement cost of the Improvements and Equipment, without deduction
for physical depreciation, (ii) the outstanding principal balance of the Loan,
and (iii) such amount that the insurer would not deem Trustor a co-insurer under
said policies. The policies of insurance carried in accordance with this
paragraph shall be paid annually in advance and shall contain a "REPLACEMENT
COST ENDORSEMENT" with a waiver of depreciation, and shall have a deductible no
greater than $25,000.00 unless so agreed by Beneficiary.
(b) Trustor, at its sole cost and expense, for the mutual
benefit of Trustor and Beneficiary, shall also obtain and maintain during the
Term the following policies of insurance:
(i) Flood insurance if any part of the Trust Property is
located in an area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Program in an amount at least equal
to the outstanding principal amount of the Loan or the maximum limit of coverage
available with respect to the Improvements and Equipment under said Program,
whichever is less.
(ii) Comprehensive public liability insurance, including
broad form property damage, blanket contractual and personal injuries (including
death resulting therefrom) coverages and containing minimum limits per
occurrence of $2,000,000 and $5,000,000 in the aggregate for any policy year. In
addition, at least $5,000,000 excess and/or umbrella liability insurance shall
be obtained and maintained for any and all claims, including all legal liability
imposed upon Trustor and all court costs and attorneys' fee incurred in
connection with the ownership, operation and maintenance of the Trust Property.
(iii) Rental loss and/or business interruption insurance
in an amount equal to the greater of (A) estimated gross revenues for twelve
(12) months from the operations of the Trust Property or (B) the projected
operating expenses (including debt service) for twelve (12) months for the
maintenance and operation of the Trust Property. The amount of such insurance
shall be increased from time to time during the Term as and when new Leases and
renewal Leases are entered into and the Rents increase or the estimate of (or
the actual) gross revenue, as may be applicable, increases
(iv) Insurance against loss or damage from (A) leakage of
sprinkler systems and (B) explosion of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure vessels or
similar apparatus now or hereafter installed in the Improvements (without
exclusion for explosions), to the extent that such items now or hereafter exist
upon the Trust Property, in an amount at least equal to the outstanding
principal amount of the Note or $2,000,000, whichever is less.
(v) If the Trust Property includes commercial property,
worker's compensation insurance with respect to any employees of Trustor, as
required by any governmental authority or legal requirement.
-5-
(vi) During any period of repair or restoration, builder's
"all risk" insurance in an amount equal to not less than the full insurable
value of the Trust Property insuring against such risks (including, without
limitation, fire and extended coverage and collapse of the Improvements to
agreed limits) as Beneficiary may request, in form and substance acceptable to
Beneficiary.
(vii) Ordinance or law coverage to compensate for the cost
of demolition and the increased cost of construction.
(viii) Such other insurance as may from time to time be
reasonably required by Beneficiary in order to protect its interests.
(c) All policies of insurance (the "POLICIES") required
pursuant to this paragraph: (i) shall be issued by companies approved by
Beneficiary and licensed to do business in the state where the Trust Property is
located, with a claims paying ability rating of "AA" or better by Standard &
Poor's Rating Services, a division of the McGraw Hill Companies, Inc.; (ii)
shall name Beneficiary and its successors and/or assigns as their interest may
appear as the beneficiary/mortgagee; (iii) shall contain a non-contributory
standard mortgagee clause and a lender's loss payable endorsement or their
equivalents, naming Beneficiary as the person to which all payments made by such
insurance company shall be paid; (iv) shall contain a waiver of subrogation
against Beneficiary; (v) shall be maintained throughout the Term without cost to
Beneficiary; (vi) shall be assigned and the originals delivered to Beneficiary;
(vii) shall contain such provisions as Beneficiary deems reasonably necessary or
desirable to protect its interest including, without limitation, endorsements
providing that neither Trustor, Beneficiary nor any other party shall be a
co-insurer under said Policies and that Beneficiary shall receive at least
thirty (30) days prior written notice of any modification, reduction or
cancellation; and (viii) shall be satisfactory in form and substance to
Beneficiary and shall be approved by Beneficiary as to amounts, form, risk
coverage, deductibles, loss payees and insureds. Trustor shall pay the premiums
for such Policies (the "INSURANCE PREMIUMS") as the same become due and payable
and shall furnish to Beneficiary evidence of the renewal of each of the Policies
with receipts for the payment of the Insurance Premiums or other evidence of
such payment reasonably satisfactory to Beneficiary (provided, however, that
Trustor is not required to furnish such evidence of payment to Beneficiary in
the event that such Insurance Premiums have been paid by Beneficiary pursuant to
Paragraph 5 hereof). If Trustor does not furnish such evidence and receipts at
least thirty (30) days prior to the expiration of any expiring Policy, then
Beneficiary may procure, but shall not be obligated to procure, such insurance
and pay the Insurance Premiums therefor, and Trustor agrees to reimburse
Beneficiary for the cost of such Insurance Premiums promptly on demand. Within
thirty (30) days after request by Beneficiary, Trustor shall obtain such
increases in the amounts of coverage required hereunder as may be reasonably
requested by Beneficiary, taking into consideration changes in the value of
money over time, changes in liability laws, changes in prudent customs and
practices.
-6-
4. CASUALTY.
(a) If the Trust Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (an "INSURED CASUALTY"), Trustor
shall give prompt notice, thereof to Beneficiary. Following the occurrence of an
Insured Casualty, Trustor, regardless of whether insurance proceeds are
available, shall promptly proceed to restore, repair, replace or rebuild the
same to be of at least equal value and of substantially the same character as
prior to such damage or destruction, all to be effected in accordance with
applicable law. The expenses incurred by Beneficiary in the adjustment and
collection of insurance proceeds shall become part of the Debt and be secured
hereby and shall be reimbursed by Trustor to Beneficiary upon demand.
(b) In case of loss or damages covered by any of the Policies,
the following provisions shall apply:
(i) In the event of an Insured Casualty that does not
exceed the lesser of (a) $250,000.00 or (b) ten percent (10%) of the then
outstanding principal balance of the Note, Trustor may settle and adjust any
claim without the consent of Beneficiary and agree with the insurance company or
companies on the amount to be paid upon the loss; provided that such adjustment
is carried out in a competent and timely manner. In such case, Trustor is hereby
authorized to collect and receipt for any such insurance proceeds.
(ii) In the event an Insured Casualty shall exceed the
lesser of (a) $250,000.00 or (b) ten percent (10%) of the then outstanding
principal balance of the Note, then and in that event, Beneficiary may settle
and adjust any claim without the consent of Trustor and agree with the insurance
company or companies on the amount to be paid on the loss and the proceeds of
any such policy shall be due and payable solely to Beneficiary and held in
escrow by Beneficiary in accordance with the terms of this Deed of Trust.
(iii) In the event of an Insured Casualty where the loss
is in an aggregate amount less than twenty-five percent (25%) of the original
principal balance of the Note, and if, in the reasonable judgment of
Beneficiary, the Trust Property can be restored within six (6) months and prior
to the Anticipated Repayment Date (as defined in the Note) to an economic unit
not materially less valuable (including an assessment of the impact of the
termination of any Leases due to such Insured Casualty) and not less useful than
the same was prior to the Insured Casualty, and after such restoration will
adequately secure the outstanding balance of the Debt, then, if no Event of
Default (as hereinafter defined) shall have occurred and be then continuing, the
proceeds of insurance (after reimbursement of any expenses incurred by
Beneficiary) shall be applied to reimburse Trustor for the cost of restoring,
repairing, replacing or rebuilding the Trust Property or part thereof subject to
the Insured Casualty, in the manner set forth below. Trustor hereby covenants
and agrees to commence and diligently to prosecute such restoring, repairing,
replacing or rebuilding; provided always, that Trustor shall pay all costs (and
if required by Beneficiary, Trustor shall deposit the total thereof with
Beneficiary in advance) of such restoring, repairing, replacing or rebuilding in
excess of the net proceeds of insurance made available pursuant to the terms
hereof.
-7-
(iv) Except as provided above, the proceeds of insurance
collected upon any Insured Casualty shall, at the option of Beneficiary in its
sole discretion, be applied to the payment of Debt or applied to reimburse
Trustor for the cost of restoring, repairing, replacing or rebuilding the Trust
Property or part thereof subject to the Insured Casualty, in the manner set
forth below. Any such application to the Debt shall be without any prepayment
consideration except that if an Event of Default, or an event with notice and/or
the passage of time would constitute an Event of Default, has occurred, then the
Trustor shall pay to Beneficiary an additional amount equal to the Yield
Maintenance Premium (hereinafter defined), if any, that would be required under
Paragraph 57 hereof if Defeasance Collateral (hereinafter defined) was to be
purchased by Trustor. Any such application to the Debt shall be applied to those
payments of principal and interest last due under the Note but shall not
postpone or reduce any payments otherwise required pursuant to the Note other
than such last due payments.
(v) In the event Trustor is entitled to reimbursement out
of insurance proceeds held by Beneficiary, such proceeds shall be disbursed from
time to time upon Beneficiary being furnished with (1) evidence satisfactory to
it of the estimated cost of completion of the restoration, repair, replacement
and rebuilding, (2) funds or, at Beneficiary's option, assurances satisfactory
to Beneficiary that such funds are available, sufficient in addition to the
proceeds of insurance to complete the proposed restoration, repair, replacement
and rebuilding, and (3) such architect's certificates, waivers of lien,
contractor's sworn statements, title insurance endorsements, bonds, plats of
survey and such other reasonable evidences of cost payment and performance as
Beneficiary may reasonably require and approve. Beneficiary may, in any event,
require that all plans and specifications for such restoration, repair,
replacement and rebuilding be submitted to and approved by Beneficiary prior to
commencement of work. No payment made prior to the final completion of the
restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the value of the work performed from time to time; funds other than
proceeds of insurance shall be disbursed prior to disbursement of such proceeds;
and at all times, the undisbursed balance of such proceeds remaining in the
hands of Beneficiary, together with funds deposited for that purpose or
irrevocably committed to the satisfaction of Beneficiary by or on behalf of
Trustor for that purpose, shall be at least sufficient in the reasonable
judgment of Beneficiary to pay for the cost of completion of the restoration,
repair, replacement or rebuilding, free and clear of all liens or claims for
lien. Any surplus which may remain out of insurance proceeds held by Beneficiary
after payment of such costs of restoration, repair, replacement or rebuilding
shall be paid to any party entitled thereto.
5. PAYMENT OF TAXES, ETC. Trustor shall pay all taxes,
assessments, water rates and sewer rents, now or hereafter levied or assessed or
imposed against the Trust Property or any part thereof (the "TAXES") and all
ground rents, maintenance charges, other impositions and other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Premises, now or hereafter levied
or assessed or imposed against the Trust Property or any part thereof (the
"OTHER CHARGES") as the same become due and payable. Trustor will deliver to
Beneficiary receipts for payment or other evidence satisfactory to Beneficiary
that the Taxes and Other Charges have been so
-8-
paid or are not then delinquent no later than thirty (30) days prior to the date
on which the Taxes and/or Other Charges would otherwise be delinquent if not
paid. Trustor shall not suffer and shall promptly cause to be paid and
discharged any lien or charge whatsoever which may be or become a lien or charge
against the Trust Property, and shall promptly pay for all utility services
provided to the Trust Property. Trustor shall furnish to Beneficiary receipts
for the payment of the Taxes and the Other Charges prior to the date the same
shall become delinquent (provided, however, that Trustor is not required to
furnish such receipts for payment of Taxes in the event that such Taxes have
been paid for by Beneficiary pursuant to Paragraph 6 hereof).
6. TAX AND INSURANCE IMPOUND FUND; REPLACEMENT ESCROW FUND; LEASING
ESCROW FUND.
(a) Trustor shall pay to Beneficiary on the eleventh day of each calendar month
(a) one-twelfth of the Taxes that Beneficiary estimates will be payable during
the next ensuing twelve (12) months in order to accumulate with Beneficiary
sufficient funds to pay all such Taxes at least thirty (30) days prior to their
respective due dates, and (b) one-twelfth of the Insurance Premiums that
Beneficiary estimates will be payable for the renewal of the coverage afforded
by the Policies upon the expiration thereof in order to accumulate with
Beneficiary sufficient funds to pay all such Insurance Premiums at least thirty
(30) days prior to the expiration of the Policies (said amounts in (a) and (b)
above hereinafter called the "TAX AND INSURANCE IMPOUND FUND"). The Tax and
Insurance Impound Fund and the payments of interest or principal or both,
payable pursuant to the Note, shall be added together and shall be paid as an
aggregate sum by Trustor to Beneficiary. Beneficiary will apply the Tax and
Insurance Impound Fund to payments of Taxes and Insurance Premiums required to
be made by Trustor pursuant to Paragraphs 4 and 5 hereof. In making any payment
relating to the Tax and Insurance Impound Fund, Beneficiary may do so according
to any xxxx, statement or estimate procured from the appropriate public office
(with respect to Taxes) or insurer or agent (with respect to Insurance
Premiums), without inquiry into the accuracy of such xxxx, statement or estimate
or into the validity of any tax, assessment, sale, forfeiture, tax lien or title
or claim thereof. If the amount of the Tax and Insurance Impound Fund shall
exceed the amounts due for Taxes and Insurance Premiums pursuant to Paragraphs 4
and 5 hereof, Beneficiary shall, in its sole discretion, return any excess to
Trustor or credit such excess against future payments to be made to the Tax and
Insurance Impound Fund. In allocating such excess, Beneficiary may deal with the
person shown on the records of Beneficiary to be the owner of the Trust
Property. If at any time Beneficiary determines that the Tax and Insurance
Impound Fund is not or will not be sufficient to pay the items set forth in
(a) and (b) above, Beneficiary shall notify Trustor of such determination and
Trustor shall increase its monthly payments to Beneficiary by the amount that
Beneficiary estimates is sufficient to make up the deficiency at least thirty
(30) days prior to delinquency of the Taxes and/or expiration of the Policies,
as the case may be. Until expended or applied as above provided, any amounts in
the Tax and Insurance Impound Fund shall constitute additional security for the
Debt. The Tax and Insurance impound Fund shall not constitute a trust fund and
may be commingled with other monies held by Beneficiary. No earnings or interest
on the Tax and Insurance Impound Fund shall be payable to Trustor. If
Beneficiary so elects at any time, Trustor shall provide, at
-9-
Trustor's expense, a tax service contract for the Term issued by a tax reporting
agency acceptable to Beneficiary. If Beneficiary does not so elect, Trustor
shall reimburse Beneficiary for the cost of making annual tax searches
throughout the Term.
(b) Trustor shall pay to Beneficiary on the eleventh day of each
calendar month the sum of Two Thousand One Hundred Fifty-Two and 50/100 Dollars
($2,152.50) which shall be deposited with and held by Beneficiary for
replacement and repairs required to be made to the Trust Property during the
calendar year and for any other work approved by Beneficiary ("REPLACEMENT
ESCROW FUND"). Beneficiary may in its reasonable discretion reassess its
estimate of the amount necessary for the Replacement Escrow Fund from time to
time and in its discretion, and may adjust the monthly amounts required to be
deposited into the Replacement Escrow Fund by thirty (30) days notice to
Trustor. Beneficiary shall make disbursements from the Replacement Escrow Fund
as requested by Trustor, and approved by Beneficiary in its sole discretion, no
more frequently than once in any thirty (30) day period of no less than
$5,000.00 upon delivery by Trustor of Beneficiary's standard form of draw
request accompanied by copies of paid invoices for the amounts requested and, if
required by Beneficiary for requests in excess of $10,000.00, lien waivers and
releases from all parties furnishing materials and/or services in connection
with the requested payment. Beneficiary may require an inspection of the Trust
Property at Trustor's expense prior to making a monthly disbursement in order to
verify completion of replacements and repairs of items in excess of $10,000.00
for which reimbursement is sought. The Replacement Escrow Fund shall be held in
an interest bearing account in Beneficiary's name at a financial institution
selected by Beneficiary in its sole discretion. All earnings or interest on the
Replacement Escrow Fund shall be and become part of such Replacement Escrow Fund
and shall be disbursed as provided in this Paragraph 6(b). Until expended or
applied as above provided, the Replacement Escrow Fund shall constitute
additional security for the Debt. The Replacement Escrow Fund shall not
constitute a trust fund and may be commingled with other monies held by
Beneficiary.
(c) Trustor shall pay to Beneficiary on the eleventh day of each
calendar month one-twelfth of $3,588.00, which shall be deposited with and held
by Beneficiary for tenant improvement and leasing commission obligations
incurred following the date hereof (the "LEASING ESCROW FUND"). In addition,
Trustor shall pay to Beneficiary for deposit in the Leasing Escrow Fund all
funds received by Trustor from tenants in connection with the cancellation of
any Leases, including, but not limited to, any cancellation fees, penalties,
tenant improvements, leasing commissions or other charges. Trustor hereby
pledges to Beneficiary any and all monies now or hereafter deposited in the
Leasing Escrow Fund as additional security for the payment of the Debt.
Beneficiary may reassess its estimate of the monthly amount necessary to be
deposited into the Leasing Escrow Fund and, upon notice to Trustor, Trustor
shall be required to deposit into the Leasing Escrow Fund each month such
reassessed amount. Beneficiary shall make disbursements from the Leasing Escrow
Fund for expenses reasonably incurred by Trustor for new Leases entered into by
Trustor in accordance with the provisions of Paragraph 8 below. All such
expenses shall be approved by Beneficiary in its sole discretion. Beneficiary
shall make disbursements as requested by Trustor on a quarterly basis in
increments of no less than $5,000.00 upon delivery by Trustor of
-10-
Beneficiary's standard form of draw request accompanied by copies of paid
invoices for the amounts requested for tenant improvements and leasing
commissions, the newly executed Lease, extension, renewal, or modification, with
terms commensurate with the expired Lease, and, if required by Beneficiary, lien
waivers and releases from all parties furnishing materials and/or services in
connection with the requested payment. Beneficiary may require an inspection of
the Trust Property at Trustor's expense prior to making a quarterly disbursement
in order to verify completion of improvements for which reimbursement is sought.
The Leasing Escrow Fund shall be held in an interest bearing account in
Beneficiary's name at a financial institution selected by Beneficiary in its
sole discretion. All earnings or interest on the Leasing Escrow Fund shall be
and become part of such Leasing Escrow Fund and shall be disbursed as provided
in this Paragraph 6(b). Until expended or applied as above provided, the Leasing
Escrow Fund shall constitute additional security for the Debt. The Leasing
Escrow Fund shall not constitute a trust fund and may be commingled with other
monies held by Beneficiary.
(d) Trustor hereby pledges to Beneficiary and grants to Beneficiary a
security interest in any and all monies now or hereafter deposited in the Tax
and Insurance Impound Fund, the Replacement Escrow Fund and the Leasing Escrow
Fund as additional security for the payment of the Debt. Upon the occurrence of
an Event of Default, Beneficiary may apply any sums then present in the Tax and
Insurance Impound Fund, the Replacement Escrow Fund and/or the Leasing Escrow
Fund to the payment of the Debt in any order in its sole discretion.
7. CONDEMNATION. Trustor shall promptly give Beneficiary written notice
of the actual or threatened commencement of any condemnation or eminent domain
proceeding (a "CONDEMNATION") and shall deliver to Beneficiary copies of any and
all papers served in connection with such Condemnation. Following the occurrence
of a Condemnation, Trustor, regardless of whether an Award (hereinafter defined)
is available, shall promptly proceed to restore, repair, replace or rebuild the
same to the extent practicable to be of at least equal value and of
substantially the same character as prior to such Condemnation, all to be
effected in accordance with applicable law.
(a) Beneficiary is hereby irrevocably appointed as Trustor's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment ("AWARD') for any taking accomplished
through a Condemnation (a "TAKING") and to make any compromise or settlement in
connection with such Condemnation, subject to the provisions of this Deed of
Trust. Notwithstanding any Taking by any public or quasi-public authority
(including, without limitation, any transfer made in lieu of or in anticipation
of such a Taking), Trustor shall continue to pay the Debt at the time and in the
manner provided for in the Note, in this Deed of Trust and the other Loan
Documents and the Debt shall not be reduced unless and until any Award shall
have been actually received and applied by Beneficiary to expenses of collecting
the Award and to discharge of the Debt. Beneficiary shall not be limited to the
interest paid on the Award by the condemning authority but shall be entitled to
receive out of the Award interest at the rate or rates provided in the Note.
Trustor shall cause any Award that is payable to Trustor to be paid directly to
Beneficiary.
-11-
(b) In the event of any Condemnation where the Award is in an
aggregate amount less than the lesser of (i) $250,000.00 or (ii) ten percent
(10%) of the then outstanding original principal balance of the Note, and if,
in the reasonable judgment of Beneficiary, the Trust Property can be restored
within six (6) months and prior to the Anticipated Repayment Date to an economic
unit not less valuable (including an assessment of the impact of the termination
of any Leases due to such Condemnation) and not less useful than the same was
prior to the Condemnation, and after such restoration will adequately secure the
outstanding balance of the Debt, then, if no Event of Default shall have
occurred and be then continuing, the proceeds of the Award (after reimbursement
of any expenses incurred by Beneficiary) shall be applied to reimburse Trustor
for the cost of restoring, repairing, replacing or rebuilding the Trust Property
or part thereof subject to Condemnation, in the manner set forth below. If
insurance proceeds are made available to Trustor or are sufficient for such
purposes, Trustor hereby covenants and agrees to commence and diligently to
prosecute such restoring, repairing, replacing or rebuilding; provided always,
that Trustor shall pay all costs (and if required by Beneficiary, Trustor shall
deposit the total thereof with Beneficiary in advance) of such restoring,
repairing, replacing or rebuilding in excess of the Award made available
pursuant to the terms hereof.
(c) Except as provided above, the Award collected upon any
Condemnation shall, at the option of Beneficiary in its sole discretion, be
applied to the payment of the Debt or applied to reimburse Trustor for the cost
of restoring, repairing, replacing or rebuilding the Trust Property or part
thereof subject to the Condemnation, in the manner set forth below. Any such
application to the Debt shall be without any prepayment consideration except
that if an Event of Default, or an event wit notice and/or the passage of time
would constitute an Event of Default, has occurred then the Trustor shall pay to
Beneficiary an additional amount equal to the Yield Maintenance Premium, if any,
that would be required under Paragraph 57 hereof if Defeasance Collateral was to
be purchased by Trustor. Any such application to the Debt shall be applied to
those payments of principal and interest last due under the Note but shall not
postpone or reduce any payments otherwise required pursuant to the Note other
than such last due payments. If the Trust Property is sold, through foreclosure
or otherwise, prior to the receipt by Beneficiary of such Award, Beneficiary
shall have the right, whether or not a deficiency judgment on the Note shall be
recoverable or shall have been sought, recovered or denied, to receive all or a
portion of said Award sufficient to pay the Debt.
(d) In the event Trustor is entitled to reimbursement out of the
Award received by Beneficiary, such proceeds shall be disbursed from time to
time upon Beneficiary being furnished with (1) evidence satisfactory to it of
the estimated cost of completion of the restoration, repair, replacement and
rebuilding resulting from such condemnation, (2) funds or, at Beneficiary's
option, assurances satisfactory to Beneficiary that such funds are available,
sufficient in addition to the proceeds of the Award to complete the proposed
restoration, repair, replacement and rebuilding, and (3) such architect's
certificates, waivers of lien, contractor's sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of costs, payment
and performance as Beneficiary may reasonably require and approve; and
Beneficiary may, in any event, require that all plans and
-12-
specifications for such restoration, repair, replacement and rebuilding be
submitted to and approved by Beneficiary prior to commencement of work. No
payment made prior to the final completion of the restoration, repair,
replacement and rebuilding shall exceed ninety percent (90%) of the value of the
work performed from time to time as such value shall be determined by
Beneficiary in its reasonable judgement; funds other than proceeds of the Award
shall be disbursed prior to disbursement of such proceeds; and at all times, the
undisbursed balance of such proceeds remaining in hands of Beneficiary, together
with funds deposited for that purpose or irrevocably committed to the
satisfaction of Beneficiary by or on behalf of Trustor for that purpose, shall
be at least sufficient in the reasonable judgment of Beneficiary to pay for the
costs of completion of the restoration, repair, replacement or rebuilding, free
and clear of all liens or claims for lien. Any surplus which may remain out of
the Award received by Beneficiary after payment of such costs of restoration,
repair, replacement or rebuilding shall, in the sole and absolute discretion of
Beneficiary, be retained by Beneficiary and applied to payment of the Debt.
8. LEASES AND RENTS.
(a) Trustor does hereby absolutely and unconditionally assign to
Beneficiary, all Trustor's right, title and interest in all current and future
Leases and Rents, it being intended by Trustor that this assignment constitutes
a present, absolute assignment and not an assignment for additional security
only. Such assignment to Beneficiary shall not be construed to bind Beneficiary
to the performance of any of the covenants, conditions or provisions contained
in any such Lease or otherwise impose any obligation upon Beneficiary. Trustor
agrees to execute and deliver to Beneficiary such additional instruments, in
form and substance satisfactory to Beneficiary, as may hereafter be requested by
Beneficiary to further evidence and confirm such assignment. Nevertheless,
subject to the terms of this paragraph, Beneficiary grants to Trustor a
revocable license to operate and manage the Trust Property and to collect the
Rents. Trustor shall hold the Rents, or a portion thereof, sufficient to
discharge all current sums due on the Debt, in trust for the benefit of
Beneficiary for use in the payment of such sums. Upon an Event of Default,
without the need for notice or demand, the license granted to Trustor herein
shall automatically be revoked, and Beneficiary shall immediately be entitled to
possession of all Rents, whether or not Beneficiary enters upon or takes control
of the Trust Property. Beneficiary and Trustee are hereby granted and assigned
by Trustor the right, at its option, upon revocation of the license granted
herein, to enter upon the Trust Property in person, by agent or by
court-appointed receiver to collect the Rents. Any Rents collected after the
revocation of the license may be applied toward payment of the Debt in such
priority and proportions as Beneficiary in its sole discretion shall deem
proper.
(b) All Leases shall provide that they are subordinate to this Deed
of Trust and that the tenant agrees to attorn to Beneficiary. None of the Leases
shall contain any option to purchase, any right of first refusal to lease or
purchase or any right to terminate the lease term (except in the event of the
destruction of all or substantially all of the Trust Property). Leases executed
after the date hereof shall not contain any provisions which adversely affect
the Trust Property or which might adversely affect the rights of any holder of
the Loan without the prior written consent of Beneficiary. Each tenant shall
conduct business
-13-
only in that portion of the Trust Property covered by its lease. Upon request,
Trustor shall furnish Beneficiary with executed copies of all Leases.
(c) Trustor shall not, without the prior consent of Beneficiary
(i) enter into any Lease of all or any part of the Trust Property in excess of
15,000 rentable square feet (a "Major Lease"), (ii) cancel, terminate, abridge
or otherwise modify the terms of any Major Lease, or accept a surrender thereof,
(iii) consent to any assignment of or subletting under any Major Lease not in
accordance with its terms, (iv) cancel, terminate, abridge or otherwise modify
any guaranty of any Major Lease or the terms thereof, (v) accept prepayments of
installments of Rents for a period of more than one (1) month in advance or (vi)
further assign the whole or any part of the Leases or the Rents. In addition to
the foregoing, Trustor shall not (A) lease all or any part of the Trust
Property, (B) cancel, terminate, abridge or otherwise modify the terms of any
Lease, or accept a surrender thereof, (C) consent to any assignment of or
subletting under any Lease not in accordance with its terms or (D) cancel,
terminate, abridge or otherwise modify any guaranty of any Lease or the terms
thereof unless such actions are exercised for a commercially reasonable purpose
in arms-length transactions for market rate terms.
(d) Trustor (i) shall observe and perform all the obligations
imposed upon the lessor under the Leases and shall not do or permit to be done
anything to impair the value of the Leases as security for the Debt; (ii) shall
promptly send copies to Beneficiary of all notices of default which Trustor
shall send or receive thereunder; (iii) shall enforce all the terms, covenants
and conditions contained in the Leases upon the part of the lessee thereunder to
be observed or performed, short of termination thereof; (iv) shall not collect
any of the Rents more than one (1) month in advance; (v) shall not execute any
other assignment of the lessor's interest in the Leases or the Rents; (vi) shall
deliver to Beneficiary, upon request, tenant estoppel certificates from each
commercial tenant at the Trust Property in form and substance reasonably
satisfactory to Beneficiary, provided that Trustor shall not be required to
deliver such certificates more frequently than two (2) times in any calendar
year; and (vii) shall execute and deliver at the request of Beneficiary all such
further assurances, confirmations and assignments in connection with the Trust
Property as Beneficiary shall from time to time require.
(e) All security deposits of tenants, whether held in cash or any
other form, shall not be commingled with any other funds of Trustor and, if
cash, shall be deposited by Trustor at such commercial or savings bank or banks,
or otherwise held in compliance with applicable law, as may be reasonably
satisfactory to Beneficiary. Any bond or other instrument which Trustor is
permitted to hold in lieu of cash security deposits under any applicable legal
requirements shall be maintained in full force and effect in the full amount of
such deposits unless replaced by cash deposits as hereinabove described, shall
be issued by an institution reasonably satisfactory to Beneficiary, shall, if
permitted pursuant to any legal requirements, name Beneficiary as payee or
mortgagee thereunder (or at Beneficiary's option, be fully assignable to
Beneficiary) and shall, in all respects, comply with any applicable legal
requirements and otherwise be reasonably satisfactory to Beneficiary. Trustor
shall, upon request, provide Beneficiary with evidence reasonably satisfactory
to Beneficiary of Trustor's
-14-
compliance with the foregoing. Following the occurrence and during the
continuance of any Event of Default, Trustor shall, upon Beneficiary's request,
if permitted by any applicable legal requirements, turn over to Beneficiary
the security deposits (and any interest theretofore earned thereon) with
respect to all or any portion of the Trust Property, to be held by Beneficiary
subject to the terms of the Leases.
9. MAINTENANCE AND USE OF TRUST PROPERTY. Trustor shall cause the Trust
Property to be maintained in a good and safe condition and repair. The
Improvements and the Equipment shall not be removed, demolished or materially
altered (except for normal replacement of the Equipment) without the consent of
Beneficiary. Trustor shall promptly comply with all laws, orders and ordinances
affecting the Trust Property, or the use thereof. Trustor shall promptly repair,
replace or rebuild any part of the Trust Property that is destroyed by any
casualty, or becomes damaged, worn or dilapidated or that is affected by any
proceeding of the character referred to in Paragraph 7 hereof and shall complete
and pay for any structure at any time in the process of construction or repair
on the Premises. Trustor shall not initiate, join in, acquiesce in, or consent
to any change in any private restrictive covenant, zoning law or other public or
private restriction, limiting or defining the uses which may be made of the
Trust Property or any part thereof. If under applicable zoning provisions the
use of all or any portion of the Trust Property is or shall become a
nonconforming use, Trustor will not cause or permit such nonconforming use to be
discontinued or abandoned without the express written consent of Beneficiary.
Trustor shall not (i) change the use of the Trust Property, (ii) permit or
suffer to occur any waste on or to the Trust Property or to any portion thereof
or (iii) take any steps whatsoever to convert the Trust Property, or any portion
thereof, to a condominium or cooperative form of management. Trustor will not
install or permit to be installed on the Premises any underground storage tank.
10. TRANSFER OR ENCUMBRANCE OF THE TRUST PROPERTY.
(a) Trustor acknowledges that Beneficiary has examined and relied
on the creditworthiness and experience of Trustor in owning and operating
properties such as the Trust Property in agreeing to make the Loan, and that
Beneficiary will continue to rely on Trustor's ownership of the Trust Property
as a means of maintaining the value of the Trust Property as security for
repayment of the Debt. Trustor acknowledges that Beneficiary has a valid
interest in maintaining the value of the Trust Property so as to ensure that,
should Trustor default in the repayment of the Debt, Beneficiary can recover the
Debt by a sale of the Trust Property. Trustor shall not, without the prior
written consent of Beneficiary, sell, convey, alienate, mortgage, encumber,
pledge or otherwise transfer the Trust Property or any part thereof or any
interest therein, or permit the Trust Property or any part thereof or any
interest therein to be sold, conveyed, alienated, mortgaged, encumbered, pledged
or otherwise transferred.
(b) A sale, conveyance, alienation, mortgage, encumbrance, pledge
or transfer within the meaning of this Paragraph 10 shall be deemed to include
(i) an installment sales agreement wherein Trustor agrees to sell the Trust
Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Trustor leasing all or a
-15-
substantial part of the Trust Property for other than actual occupancy by a
space tenant thereunder or a sale, assignment or other transfer of, or the grant
of a security interest in, Trustor's right, title and interest in and to any
Leases or any Rents; (iii) if Trustor, Guarantor or any partner or managing
member of Trustor or Guarantor is a corporation, the voluntary or involuntary
sale, conveyance or transfer of such corporation's stock (or the stock of any
corporation directly or indirectly controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock in one or a series of
transactions by which an aggregate of more than 10% of such corporation's stock
shall be vested in a party or parties who are not now stockholders or any change
in the control of such corporation; (iv) if Trustor, any Guarantor or any
partner of Trustor or any Guarantor or any partner is a limited or general
partnership, joint venture or limited liability company, the change, removal,
resignation or addition of a general partner, managing partner or joint venturer
or the transfer, assignment or pledge of any ownership interest of any general
partner, managing partner or joint venturer in Trustor or the transfer,
assignment or pledge of any ownership interest in any general partner, managing
partner or joint venturer; or (v) if Trustor or any Guarantor or any partner is
a limited partnership or limited liability company, the voluntary or involuntary
sale, conveyance, transfer or pledge of any limited partnership interests or
membership interests or the creation or issuance of new limited partnership
interests or membership interests, by which an aggregate of more than 20% of
such limited partnership interests or membership interests are held by, or
pledged to, parties who are not currently limited partners or members.
(c) Beneficiary shall not be required to demonstrate any
actual impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon Trustor's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the Trust
Property without Beneficiary's consent. This provision shall apply to every
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Trust Property regardless of whether voluntary or not, or whether or not
Beneficiary has consented to any previous sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Trust Property.
(d) Beneficiary's consent to one sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Trust Property shall not be
deemed to be a waiver of Beneficiary's right to require such consent to any
future occurrence of same. Any sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Trust Property made in contravention of
this paragraph shall be null and void and of no force and effect.
(e) Trustor agrees to bear and shall pay or reimburse
Beneficiary on demand for all reasonable expenses (including, without
limitation, reasonable attorneys' fees and disbursements, title search costs and
title insurance endorsement premiums) incurred by Beneficiary in connection with
the review, approval and documentation of any such sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer.
(f) Beneficiary's consent to the sale or transfer of the Trust
Property will not be unreasonably withheld after consideration of all relevant
factors, provided that:
-16-
(i) no Event of Default or event which with the giving of
notice or the passage of time would constitute an
Event of Default shall have occurred and remain
uncured;
(ii) the proposed transferee ("TRANSFEREE") shall be a
reputable entity or person of good character,
creditworthy, with sufficient financial worth
considering the obligations assumed and undertaken,
as evidenced by financial statements and other
information reasonably requested by Beneficiary;
(iii) the Transferee and its property manager shall have
sufficient experience in the ownership and management
of properties similar to the Trust Property, and
Beneficiary shall be provided with reasonable
evidence thereof (and Beneficiary reserves the right
to approve the Transferee without approving the
substitution of the property manager);
(iv) Beneficiary shall have recommendations in writing
from the Rating Agencies to the effect that such
transfer will not result in a requalification,
reduction or withdrawal of any current securities
rating assigned in a Securitization. The term "RATING
AGENCIES" as used herein shall mean each of Standard
& Poor's Ratings Group, a division of the XxXxxx-Xxxx
Companies, Inc., Xxxxx'x Investors Service, Inc.,
Duff and Xxxxxx Credit Rating Co. and Fitch Investors
Service, L.P., or any other nationally-recognized
statistical rating agency which has been approved by
Beneficiary;
(v) the Transferee shall have executed and delivered to
Beneficiary an assumption agreement in form and
substance acceptable to Beneficiary, evidencing such
Transferee's agreement to abide and be bound by the
terms of the Note, this Deed of Trust and the other
Loan Documents, together with such legal opinions and
title insurance endorsements as may be reasonably
requested by Beneficiary; and
(vi) Beneficiary shall have received an assumption fee
equal to one percent (1%) of the Debt on the date of
such assumption and the payment of, or reimbursement
for, all costs and expenses incurred by Beneficiary
in connection with such assumption (including
reasonable attorneys' fees and costs).
11. REPRESENTATIONS AND COVENANTS CONCERNING THE TRUSTOR AND PROPERTY.
Trustor represents, warrants and covenants as follows:
-17
(a) Organization and Existence. Trustor is duly organized and
validly existing as a limited partnership in good standing
under the laws of Delaware and in all other jurisdictions in
which Trustor is transacting business. Trustor has the power
and authority to execute, deliver and perform the obligations
imposed on it under the Loan Documents and to consummate the
transactions contemplated by the Loan Documents.
(b) Authorization. Trustor has taken all necessary actions for the
authorization of the borrowing on account of the Loan and for
the execution and delivery of the Loan Documents, including,
without limitation, that those partners of Trustor whose
approval is required by the terms of Trustor's organizational
documents have duly approved the transactions contemplated by
the Loan Documents and have authorized execution and delivery
thereof by the respective signatories. To the best of
Trustor's knowledge, no other consent by any local, state or
federal agency is required in connection with the execution
and delivery of the Loan Documents.
(c) Valid Execution and Delivery. All of the Loan Documents
requiring execution by Trustor have been duly and validly
executed and delivered by Trustor.
(d) Enforceability. All of the Loan Documents constitute valid,
legal and binding obligations of Trustor and are fully
enforceable against Trustor in accordance with their terms by
Beneficiary and its successors, transferees and assigns,
subject only to bankruptcy laws and general principles of
equity.
(e) No Defenses. The Note, this Deed of Trust and the other Loan
Documents are not subject to any right of rescission, set-off,
counterclaim or defense, nor would the operation of any of the
terms of the Note, this Deed of Trust or any of the other Loan
Documents, or the exercise of any right thereunder, render
this Deed of Trust unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury.
(f) Defense of Usury. Trustor knows of no facts that would support
a claim of usury to defeat or avoid its obligation to repay
the principal of, interest on, and other sums or amounts due
and payable under, the Loan Documents.
(g) No Conflict/Violation of Law. The execution, delivery and
performance of the Loan Documents by the Trustor will not
cause or constitute a default under or conflict with the
organizational documents of Trustor, any Guarantor or any
general partner or managing member of Trustor or any
Guarantor. The execution, delivery and performance of the
-18-
obligations imposed on Trustor under the Loan Documents will
not cause Trustor to be in default, including after due notice
or lapse of time or both, under the provisions of any
agreement, judgment or order to which Trustor is a party or
by which Trustor is bound.
(h) Compliance with Applicable Laws and Regulations. All of the
Improvements and the use of the Trust Property comply with,
and shall remain in compliance with, all applicable statutes,
rules, regulations and private covenants now or hereafter
relating to the ownership, construction, use or operation of
the Trust Property, including all applicable statutes, rules
and regulations pertaining to requirements for equal
opportunity, anti-discrimination, fair housing, environmental
protection, zoning and land use. The Improvements comply with,
and shall remain in compliance with, applicable health, fire
and building codes. There is no evidence of any illegal
activities relating to controlled substances on the Trust
Property. All certifications, permits, licenses and approvals,
including, without limitation, certificates of completion and
occupancy permits required for the legal use, occupancy and
operation of the Trust Property as an office and commercial
facility have been obtained and are in full force and effect.
All of the Improvements comply with all material requirements
of any applicable zoning and subdivision laws and ordinances.
(i) Consents Obtained. All consents, approvals, authorizations,
orders or filings with any court or governmental agency or
body, if any, required for the execution, delivery and
performance of the Loan Documents by Trustor have been
obtained or made.
(j) No Litigation. There are no pending actions, suits or
proceedings, arbitrations or governmental investigations
against the Trust Property, an adverse outcome of which would
materially affect the Trustor's performance under the Note,
the Deed of Trust or the other Loan Documents.
(k) Title. The Trustor has good and marketable fee simple title to
the Trust Property, and good title to the Equipment, subject
to no liens, charges or encumbrances other than the Permitted
Exceptions. The possession of the Trust Property has been
peaceful and undisturbed and title thereto has not been
disputed or questioned to the best of Trustor's knowledge.
(l) Permitted Exceptions. The Permitted Exceptions do not and will
not materially and adversely affect (1) the ability of the
Trustor to pay in full the principal and interest on the Note
in a timely manner or (2) the use of the Trust Property for
the use currently being made thereof, the
-19-
operation of the Trust Property as currently being operated or
the value of the Trust Property
(m) First Lien. Upon the execution by the Trustor and the
recording of this Deed of Trust, and upon the execution and
filing of UCC-1 financing statements or amendments thereto,
the Beneficiary will have a valid first lien on the Trust
Property and a valid security interest in the Equipment
subject to no liens, charges or encumbrances other than the
Permitted Exceptions.
(n) ERISA. The Trustor has made and shall continue to make all
required contributions to all employee benefit plans, if any,
and the Trustor has no knowledge of any material liability
which has been incurred by the Trustor which remains
unsatisfied for any taxes or penalties with respect to any
employee benefit plan or any multi-employer plan, and each
such plan has been administered in compliance with its terms
and the applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and any
other federal or state law.
(o) Contingent Liabilities. The Trustor has no known material
contingent liabilities.
(p) No Other Obligations. The Trustor has no material financial
obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the
Trustor is a party or by which the Trustor or the Trust
Property is otherwise bound, other than obligations incurred
in the ordinary course of the operation of the Trust Property
and other than obligations under this mortgage and the other
Loan Documents.
(q) No Other Debt. The Trustor has not borrowed or received other
debt financing that has not been heretofore repaid in full.
(r) Fraudulent Conveyance. The Trustor (1) has not entered into
the Loan or any Loan Document with the actual intent to
hinder, delay, or defraud any creditor and (2) received
reasonably equivalent value in exchange for its obligations
under the Loan Documents. Giving effect to the Loans
contemplated by the Loan Documents, the fair saleable value of
the Trustor's assets exceed and will, immediately following
the execution and delivery of the Loan Documents, exceed the
Trustor's total liabilities, including, without limitation,
subordinated, unliquidated, disputed or contingent
liabilities. The fair saleable value of the Trustor's assets
is and will, immediately following the execution and delivery
of the Loan Documents, be greater than the Trustor's probable
liabilities, including the maximum amount of its contingent
liabilities or
-20-
its debts as such debts become absolute and matured. The
Trustor's assets do not and, immediately following the
execution and delivery of the Loan Documents will not,
constitute unreasonably small capital to carry out its
business as conducted or as proposed to be conducted. The
Trustor does not intend to, and does not believe that it will,
incur debts and liabilities (including, without limitation,
contingent liabilities and other commitments) beyond its
ability to pay such debts as they mature (taking into account
the timing and amounts to be payable on or in respect of
obligations of the Trustor).
(s) Investment Company Act. The Trustor is not (1) an "investment
company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as
amended; (2) a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of either a "holding
company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended; or (3)
subject to any other federal or state law or regulation which
purports to restrict or regulate its ability to borrow money.
(t) Access/Utilities. The Trust Property has adequate rights of
access to public ways and is served by adequate water, sewer,
sanitary sewer and storm drain facilities. All public
utilities necessary to the continued use and enjoyment of the
mortgaged property as presently used and enjoyed are located
in the public right-of-way abutting the mortgaged property,
and all such utilities are connected so as to serve the
mortgaged property without passing over other property. All
roads necessary for the full utilization of the mortgaged
property for its current purpose have been completed and
dedicated to public use and accepted by all governmental
authorities or are the subject of access easements for the
benefit of the mortgaged property.
(u) Taxes Paid. Trustor has filed all federal, state, county and
municipal tax returns required to have been filed by Trustor,
and has paid all taxes which have become due pursuant to such
returns or to any notice of assessment received by Trustor,
and Trustor has no knowledge of any basis for additional
assessment with respect to such taxes.
(v) Single Tax Lot. The Premises consists of a single lot or
multiple tax lots; no portion of said tax lot(s) covers
property other than the Premises or a portion of the Premises
and no portion of the Premises lies in any other tax lot.
(w) Special Assessments. Except as disclosed in the title
insurance policy, there are no pending or, to the knowledge of
the Trustor, proposed
-21-
special or other assessments for public improvements or
otherwise affecting the Trust Property, nor, to the knowledge
of the Trustor, are there any contemplated improvements to the
Trust Property that may result in such special or other
assessments.
(x) Flood Zone. The Trust Property is not located in a flood
hazard area as defined by the Federal Insurance
Administration.
(y) Seismic Exposure. The Premises are not located Zone 3 or Zone
4 of the "Seismic Zone Map of the U.S.".
(z) Misstatements of Fact. No statement of fact made in the Loan
Documents contains any untrue statement of a material fact or
omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no fact
presently known to the Trustor which has not been disclosed
which adversely affects, nor as far as the Trustor can
foresee, might adversely affect the business, operations or
condition (financial or otherwise) of the representing party.
(aa) Condition of Improvements. The Trust Property has not been
damaged by fire, water, wind or other cause of loss or any
previous damage to the Trust Property has been fully restored.
(bb) No Insolvency or Judgment. Trustor's general partner is not
currently (a) the subject of or a party to any completed or
pending bankruptcy, reorganization or insolvency proceeding;
or (b) the subject of any judgment unsatisfied of record or
docketed in any court of the state in which the Trust Property
is located or in any other court located in the United States.
The purposed Loan will not render the Trustor nor its general
partner insolvent. As used in this Certificate, the term
"insolvent" means that the sum total of all of an entity's
liabilities (whether secured or unsecured, contingent or
fixed, or liquidated or unliquidated) is in excess of the
value of all such entity's non-exempt assets, i.e., all of the
assets of the entity that are available to satisfy claims of
creditors.
(cc) No Condemnation. No part of any property subject to the Deed
of Trust has been taken in condemnation or other like
proceeding to an extent which would impair the value of the
Trust Property, the Deed of Trust or the Loan or the
usefulness of such property for the purposes contemplated by
the loan application relating to the Loan (the "Loan
Application"), nor is any proceeding pending, threatened or
known to be contemplated for the partial or total condemnation
or taking of the Trust Property.
-22-
(dd) No Subordinate Financing. Except as otherwise expressly
approved by Beneficiary in writing, no part of any property
subject to the Deed of Trust is, or will become, subject to a
second mortgage, deed of trust or other type of subordinate
lien.
(ee) No Labor or Materialmen Claims. All parties furnishing labor
and materials have been paid in full and, except for such
liens or claims insured against by the policy of title
insurance to be issued in connection with the Loan, there are
no mechanics', laborers' or materialmens' liens or claims
outstanding for work, labor or materials affecting the Trust
Property, whether prior to, equal with or subordinate to the
lien of the Deed of Trust.
(ff) No Purchase Options. No tenant, person, party, firm,
corporation or other entity has an option to purchase the
Trust Property, any portion thereof or any interest therein.
(gg) Leases. The Trust Property is not subject to any Leases other
than the Leases described in the rent roll delivered to
Beneficiary in connection with this Deed of Trust. No person
has any possessory interest in the Trust Property or right to
occupy the same except under and pursuant to the provisions
of the Leases. As of the date hereof, (i) the Trustor is the
owner and holder of the landlord's interest under each Lease;
(ii) there are no prior assignments of any Lease or any
portion of Rents which are presently outstanding and have
priority over the Assignment of Leases and Rents (the
"ASSIGNMENT OF LEASES AND RENTS"), dated the date hereof,
given by Trustor to Beneficiary and intended to be duly
recorded; (iii) the Leases are on the standard form of lease
approved by Beneficiary and have not been modified or amended,
except as disclosed to Beneficiary in writing on the date
hereof; (iv) each Lease is in full force and effect; (v)
neither Trustor nor any tenant under any Lease is in default
under any of the terms, covenants or provisions of the Lease,
and Trustor knows of no event which, but for the passage of
time or the giving of notice or both, would constitute an
event of default under any Lease; (vi) there are no offsets or
defenses to the payment of any portion of the Rents; and (vii)
all Rents due and payable under each Lease have been paid in
full and no said Rents have been paid more than one (1) month
in advance of the due dates thereof.
(hh) Appraisal. All, requirements and conditions of the appraisal
of the Property submitted to Beneficiary as part of the Loan
Application, upon which the value of the Trust Property was
conditioned, have been fully satisfied.
-23-
(ii) Boundary Lines. All of the Improvements which were included in
determining the appraised value of the Trust Property lie
wholly within the boundaries and building restriction lines
of the Trust Property, and no improvements on adjoining
properties encroach upon the Trust Property, and no easements
or other encumbrances upon the Premises encroach upon any of
the Improvements, so as to affect the value or marketability
of the Trust Property except those which are insured against
by title insurance.
(jj) Survey. The survey of the Trust Property delivered to
Beneficiary in connection with this Deed of Trust, has been
performed by a duly licensed surveyor or registered
professional engineer in the jurisdiction in which the Trust
Property is situated, is certified to the Beneficiary, its
successors and assigns, and the title insurance company, and
is in accordance with the most current minimum standards for
title surveys as determined by the American Land Title
Association, with the signature and seal of a licensed
engineer or surveyor affixed thereto, and does not fail to
reflect any material matter affecting the Trust Property or
the title thereto.
(kk) Forfeiture. There has not been and shall never be committed by
Trustor or any other person in occupancy of or involved with
the operation or use of the Trust Property any act or omission
affording the federal government or any state or local
government the right of forfeiture as against the Trust
Property or any part thereof or any monies paid in performance
of Trustor's obligations under any of the Loan Documents.
(ll) Management Agreement. The Management Agreement dated December
23, 1997 (the "MANAGEMENT AGREEMENT") between Trustor and
First Potomac Management, Inc. ("MANAGER") pursuant to which
Manager operates the Trust Property is in full force and
effect and there is no default or violation by any party
thereunder. The fee due under the Management Agreement, and
the terms and provisions of the Management Agreement, are
subordinate to this Deed of Trust and Manager shall attorn to
Beneficiary. Trustor shall not terminate, cancel, modify,
renew or extend the Management Agreement, or enter into any
agreement relating to the management or operation of the Trust
Property with Manager or any other party without the express
written consent of Beneficiary, which consent shall not be
unreasonably withheld. If at any time Beneficiary consents to
the appointment of a new Manager, such new Manager and Trustor
shall, as a condition of Beneficiary's consent, execute a
Consent and Agreement of Manager in the form then used by
Beneficiary.
-24-
(mm) No Broker. No financial advisors, brokers, underwriters,
placement agents, agents or finders have been dealt with by
the Trustor in connection with the Loan.
12. SINGLE PURPOSE ENTITY/SEPARATENESS. Trustor represents, warrants
and covenants as follows:
(a) Trustor does not own and will not own any asset or
property other than (i) the Trust Property, and (ii) incidental personal
property necessary for the ownership or operation of the Trust Property.
(b) Trustor will not engage in any business other than the
ownership, management and operation of the Trust Property and Trustor will
conduct and operate its business as presently conducted and operated.
(c) Trustor will not enter into any contract or agreement with
any affiliate of the Trustor, any constituent party of Trustor, any guarantor (a
"GUARANTOR" of the Debt or any part thereof or any affiliate of any constituent
parry or Guarantor, except upon terms and conditions that are intrinsically fair
and substantially similar to those that would be available on an arms-length
basis with third panics other than any such party.
(d) Trustor has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than (i) the Debt, (ii) trade and
operational debt incurred in the ordinary course of business with trade
creditors and in amounts as are normal and reasonable under the circumstances,
and (iii) debt incurred in the financing of equipment and other personal
property used on the Premises. No indebtedness other than the Debt may be
secured (subordinate or pari passu) by the Trust Property.
(e) Trustor has not made and will not make any loans or
advances to any third party (including any affiliate or constituent party, any
Guarantor or any affiliate of any constituent party or Guarantor), and shall not
acquire obligations or securities of its affiliates.
(f) Trustor is and will remain solvent and Trustor will pay
its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
(g) Trustor has done or caused to be done and will do all
things necessary to observe organizational formalities and preserve its
existence, and Trustor will not, nor will Trustor permit any constituent party
or Guarantor to amend, modify or otherwise change the partnership certificate,
partnership agreement, articles of incorporation and bylaws, operating
agreement, certificate of organization, trust or other organizational documents
of Trustor or such constituent party or Guarantor without the prior written
consent of Beneficiary.
-25-
(h) Trustor will maintain all of its books, records, financial
statements and bank accounts separate from those of its affiliates and any
constituent party and Trustor will file its own tax returns unless required
otherwise by applicable law. Trustor shall maintain its books, records,
resolutions and agreements as official records.
(i) Trustor will be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any other entity
(including any affiliate of Trustor, any constituent party of Trustor, any
Guarantor or any affiliate of any constituent party or Guarantor), shall correct
any known misunderstanding regarding its status as a separate entity, shall
conduct business in its own name, shall not identify itself or any of its
affiliates as a division or part of the other and shall maintain and utilize a
separate telephone number and separate stationery, invoices and checks.
(j) Trustor is adequately capitalized and will maintain
adequate capital for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated business operations.
(k) Neither Trustor nor any constituent party will seek the
dissolution, winding up, liquidation, consolidation or merger in whole or in
part, of the Trustor.
(1) Trustor will not commingle the funds and other assets of
Trustor with those of any affiliate or constituent party, any Guarantor, or any
affiliate of any constituent party of Guarantor, or any other person.
(m) Trustor has and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any affiliate or constituent party, any
Guarantor, or any affiliate of any constituent party or Guarantor, or any other
person.
(n) Trustor does not and will not guarantee, become obligated
for, or hold itself out to be responsible for the debts or obligations of any
other person or entity or the decisions or actions respecting the daily business
or affairs of any other person or entity.
(o) If Trustor is a limited partnership or a limited liability
company, the general partner or managing member (the "SPC ENTITY") shall be a
corporation whose sole asset is its interest in Trustor and the SPC Entity will
at all times comply, and will cause Trustor to comply, with each of the
representations, warranties, and covenants contained in this Paragraph 12 as if
such representation, warranty or covenant was made directly by such general
partner or managing member.
(p) Trustor shall at all times cause there to be at least one
duly appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of
the SPC Entity reasonably satisfactory to Beneficiary who shall not have been at
the time of such individual's appointment, and may not have been at any time
during the preceding five years (i) a shareholder of, or an officer, director,
attorney, counsel, partner or employee of, Trustor or
-26-
any of its shareholders, subsidiaries or affiliates, (ii) a customer of, or
supplier to, Trustor or any of its shareholders, subsidiaries or affiliates,
(iii) a person or other entity controlling or under common control with any such
shareholder, partner, supplier or customer, or (iv) a member of the immediate
family of any such shareholder, officer, director, partner, employee, supplier
or customer of any other director of Trustor. As used herein, the term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a person or entity, whether
through ownership of voting securities, by contract or otherwise.
(q) Trustor shall not cause or permit the board of directors
of the SPC Entity to take any action which, under the terms of any certificate
of incorporation, bylaws or any voting trust agreement with respect to any
common stock, requires a vote of the board of directors of the SPC Entity unless
at the time of such action there shall be at least one member who is an
Independent Director.
(r) Trustor will not permit any affiliate or constituent party
independent access to its bank accounts.
(s) Trustor shall pay the salaries of its own employees and
maintain a sufficient number of employees in light of its contemplated business
operations.
(t) Trustor shall conduct its business so that the assumptions
made with respect to Trustor in that certain opinion letter dated the date
hereof (the "INSOLVENCY OPINION") delivered by Xxxxxx & Xxxxxx in connection
with the Loan shall be true and correct in all respects.
13. ESTOPPEL CERTIFICATES AND NO DEFAULT AFFIDAVITS.
(a) After request by Beneficiary, Trustor shall within ten
(10) days furnish Beneficiary with a statement, duly acknowledged and certified,
setting forth (i) the amount of the original principal amount of the Note, (ii)
the unpaid principal amount of the Note, (iii) the rate of interest of the Note,
(iv) the date installments of interest and/or principal were last paid, (v) any
offsets or defenses to the payment of the Debt, if any, (vi) that the Note, this
Deed of Trust and the other Loan Documents are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification; and (vii) reaffirming all representations and warranties of
Trustor set forth herein and in the other Loan Documents as of the date
requested by Beneficiary or, to the extent of any changes to any such
representations and warranties, so stating such changes.
(b) Trustor shall deliver to Beneficiary upon request, tenant
estoppel certificates from each commercial tenant at the Trust Property in form
and substance reasonably satisfactory to Beneficiary provided that Trustor shall
not be required to deliver such certificates more frequently than two (2) times
in any calendar year.
14. CONTROLLING AGREEMENT. It is expressly stipulated and agreed to be
the intent of Trustor, and Beneficiary at all times to comply with applicable
state law or applicable
-27-
United States federal law (to the extent that it permits Beneficiary to contract
for, charge, take, reserve, or receive a greater amount of interest than under
state law) and that this Paragraph 14 (and the similar paragraph contained in
the Note) shall control every other covenant and agreement in this Deed of Trust
and the other Loan Documents. If the applicable law (state or federal) is ever
judicially interpreted so as to render usurious any amount called for under the
Note or under any of the other Loan Documents, or contracted for, charged,
taken, reserved, or received with respect to the Debt, or if Beneficiary's
exercise of the option to accelerate the maturity of the Note, or if any
prepayment by Trustor results in Trustor having paid any interest in excess of
that permitted by applicable law, then it is Trustor's and Beneficiary's express
intent that all excess amounts theretofore collected by Beneficiary shall be
credited on the principal balance of the Note and all other Debt (or, if the
Note and all other Debt have been or would thereby be paid in full, refunded to
Trustor), and the provisions of the Note and the other Loan Documents
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Beneficiary for the use, forbearance, or
detention of the Debt shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Debt until payment in full so that the rate or amount of interest on account
of the Debt does not exceed the maximum lawful rate from time to time in effect
and applicable to the Debt for so long as the Debt is outstanding.
Notwithstanding anything to the contrary contained herein or in any of the other
Loan Documents, it is not the intention of Beneficiary to accelerate the
maturity of any interest that has not accrued at the time of such acceleration
or to collect unearned interest at the time of such acceleration.
15. CHANGES IN LAWS REGARDING TAXATION. 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 Trust Property for the purpose of taxation or which
imposes a tax, either directly or indirectly, on the Debt or Beneficiary's
interest in the Trust Property, Trustor will pay such tax, with interest and
penalties thereon, if any. In the event Beneficiary is advised by counsel chosen
by it that the payment of such tax or interest and penalties by Trustor would be
unlawful or taxable to Beneficiary or unenforceable or provide the basis for a
defense of usury, then in any such event, Beneficiary shall have the option, by
written notice of not less than one hundred twenty (120) days, to declare the
Debt immediately due and payable.
16. NO CREDITS ON ACCOUNT OF THE DEBT. Trustor 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 Trust Property, or any part
thereof, and no deduction shall otherwise be made or claimed from the assessed
value of the Trust Property, or any part thereof, for real estate tax purposes
by reason of this Deed of Trust or the Debt. In the event such claim, credit or
deduction shall be required by law, Beneficiary shall have the option, by
written notice of not less than one hundred twenty (120) days, to declare the
Debt immediately due and payable.
-28-
17. DOCUMENTARY STAMPS. If at any time the United States of America,
any State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Deed of Trust, or impose any
other tax or charge on the same, Trustor will pay for the same, with interest
and penalties thereon, if any.
18. BOOKS AND RECORDS.
(a) The financial statements heretofore furnished to
Beneficiary are, as of the dates specified therein, complete and correct and
fairly present the financial condition of the Trustor and any other persons or
entities that are the subject of such financial statements, and are prepared in
accordance with generally accepted accounting principles. Trustor does not have
any contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments
that are known to Trustor and reasonably likely to have a materially adverse
effect on the Trust Property or the operation thereof as a
commercial/office/industrial property, except as referred to or reflected in
said financial statements. Since the date of such financial statements, there
has been no materially adverse change in the financial condition, operation or
business of Trustor from that set forth in said financial statements.
(b) Trustor will maintain full and accurate books of accounts
and other records reflecting the results of the operations of the Trust Property
and will furnish to Beneficiary on or before forty-five (45) days after the end
of each calendar quarter the following items, each certified by Trustor as being
true and correct: (i) a written statement (rent roll) dated as of the last day
of each such calendar quarter identifying each of the Leases by the term, space
occupied, rental required to be paid, security deposit paid, any rental
concessions, and identifying any defaults or payment delinquencies thereunder;
(ii) monthly and year to date operating statements prepared for each calendar
month during each such calendar quarter, noting Net Operating Income (as
hereinafter defined), Gross Income from Operations (as hereinafter defined), and
Operating Expenses (as hereinafter defined), and including an itemization of
actual (not pro forma) capital and other information necessary and sufficient
under generally accepted accounting practices to fairly represent the financial
position and results of operation of the Trust Property during such calendar
month, all in form satisfactory to Beneficiary; (iii) a property balance sheet
for each such calendar quarter; (iv) a comparison of the budgeted income and
expenses and the actual income and expenses for each calendar quarter and year
to date together with a detailed explanation of any variances of five percent
(5%) or more between budgeted and actual amounts for such quarterly periods and
year to date; and (v) a calculation reflecting the Debt Service Coverage Ratio
(as hereinafter defined) as of the last day of each such calendar quarter. Until
a Securitization has occurred, the Trustor shall furnish monthly each of the
items listed in the immediately preceding sentence within twenty (20) days after
the end of such month. Within one hundred twenty (120) days following the end of
each calendar year, Trustor shall furnish statements of its financial affairs
and condition including a balance sheet and a statement of profit and loss for
the Trustor in such detail as Beneficiary may request, and setting forth the
financial condition and the income and expenses for the Trust Property for the
immediately preceding calendar year, which statements shall be prepared by
Trustor. Trustor's annual financial statements
-29-
shall include (i) a list of the tenants, if any, occupying more than twenty
(20%) percent of the total floor area of the Improvements, and (ii) a breakdown
showing the year in which each Lease then in effect expires and the percentage
of total floor area of the Improvements and the percentage of base rent with
respect to which Leases shall expire in each such year, each such percentage to
be expressed on both a per year and a cumulative basis. Trustor's annual
financial statements shall be accompanied by a certificate executed by the chief
financial officer of Trustor or the general partner of Trustor, as applicable,
stating that each such annual financial statement presents fairly the financial
condition of the Trust Property being reported upon and shall be audited by a
"Big Six" accounting firm or other independent certified public account
acceptable to Beneficiary.] Each such annual financial statement shall be
prepared in accordance with generally accepted accounting principles
consistently applied. At any time and from time to time Trustor shall deliver to
Beneficiary or its agents such other financial data as Beneficiary or its agents
shall reasonably request with respect to the ownership, maintenance, use and
operation of the Trust Property.
(c) For the purposes of this Deed of Trust, the following
terms shall have the following meanings:
(i) The term "NET OPERATING INCOME" shall mean the amount
obtained by subtracting Operating Expenses from Gross Income from Operations.
(ii) The term "OPERATING EXPENSES" shall mean the total of
all expenditures, computed in accordance with generally accepted accounting
principles, of whatever kind relating to the operation, maintenance and
management of the Trust Property that are incurred on a regular monthly or other
periodic basis, including without limitation, utilities, ordinary repairs and
maintenance, insurance, license fees, property taxes and assessments,
advertising expenses, management fees, payroll and related taxes, computer
processing charges, operational equipment or other lease payments as approved by
Beneficiary, and other similar costs, but excluding depreciation, debt service,
capital expenditures, and contributions to the Replacement Escrow Fund, the Tax
and Insurance Impound Fund, and any other reserves required under the Loan
Documents.
(iii) The term "GROSS INCOME FROM OPERATIONS" shall mean
all income, computed in accordance with generally accepted accounting
principles, derived from the ownership and operation of the Trust Property from
whatever source, including, but not limited to, Rents, utility charges,
escalations, forfeited security deposits, interest on credit accounts, service
fees or charges, license fees, parking fees, rent concessions or credits, and
other pass-through or reimbursements paid by tenants under the Leases of any
nature but excluding sales, use and occupancy or other taxes on receipts
required to be accounted for by Trustor to any government or governmental
agency, refunds and uncollectible accounts, sales of furniture, fixtures and
equipment, proceeds of casualty insurance and condemnation awards (other than
business interruption or other loss of income insurance), and any disbursements
to the Trustor from the Tax and Insurance Impound Fund, the Replacement Escrow
Fund, the Rollover Escrow Fund, or any other escrow fund established by the Loan
Documents.
-30-
(iv) The term "DEBT SERVICE COVERAGE RATIO" shall mean a
ratio for the applicable period in which: (A) the numerator is the Net Operating
Income (excluding interest on credit accounts) for such period as set forth in
the statements required hereunder; and (B) the denominator is the aggregate
amount of principal and interest due and payable on the Note.
19. PERFORMANCE OF OTHER AGREEMENTS. Trustor shall observe and perform
each and every term to be observed or performed by Trustor pursuant to the
terms of any agreement or recorded instrument affecting or pertaining to the
Trust Property.
20. FURTHER ACTS, ETC. Trustor will, at the cost of Trustor, and
without expense to Beneficiary, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, Uniform Commercial Code financing statements or continuation
statements, transfers and assurances as Beneficiary shall, from time to time,
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Beneficiary the property and rights hereby deeded, mortgaged,
given, granted bargained, sold, alienated, enfeoffed, conveyed, confirmed,
pledged, assigned and hypothecated or intended now or hereafter so to be, or
which Trustor may be or may hereafter become bound to convey or assign to
Beneficiary, or for carrying out the intention or facilitating the performance
of the terms of this Deed of Trust or for filing, registering or recording this
Deed of Trust or for facilitating the sale of the Loan and the Loan Documents as
described in Paragraph 20(b) below. Trustor, on demand, will execute and deliver
and hereby authorizes Beneficiary to execute in the name of Trustor or without
the signature of Trustor to the extent Beneficiary may lawfully do so, one or
more financing statements, chattel mortgages or other instruments, to evidence
more effectively the security interest of Beneficiary in the Trust Property.
Upon foreclosure, the appointment of a receiver or any other relevant action,
Trustor will, at the cost of Trustor and without expense to Beneficiary,
cooperate fully and completely to effect the assignment or transfer of any
license, permit, agreement or any other right necessary or useful to the
operation of or the Trust Property. Trustor grants to Beneficiary and Trustee an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to
Beneficiary and Trustee at law and in equity, including, without limitation,
such rights and remedies available to Beneficiary and Trustee pursuant to this
paragraph.
21. RECORDING OF DEED OF TRUST, ETC. Trustor forthwith upon the
execution and delivery of this Deed of Trust and thereafter, from time to time,
will cause this Deed of Trust, and any security instrument creating a lien or
security interest or evidencing the lien hereof upon the Trust Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Beneficiary in, the Trust Property. Trustor
will pay all filing, registration or recording fees, and all expenses incident
to the preparation, execution and acknowledgment of this Deed of Trust, any
deed of trust supplemental hereto, any security instrument with respect to the
Trust Property and any instrument of further assurance, and all federal, state,
county and municipal, taxes, duties, imposts, assessments and charges arising
out of or in connection
-31-
with the execution and delivery of this Deed of Trust, any deed of trust
supplemental hereto, any security instrument with respect to The Trust Property
or any instrument of further assurance, except where prohibited by law so to
do. Trustor shall hold harmless and indemnify Beneficiary, its successors and
assigns, against any liability incurred by reason of the imposition of any tax
on the making and recording of this Deed of Trust.
22. REPORTING REQUIREMENTS. Trustor agrees to give prompt notice to
Beneficiary of the insolvency or bankruptcy filing of Trustor or the death,
insolvency or bankruptcy filing of any Guarantor.
23. EVENTS OF DEFAULT. The Debt shall become immediately due and
payable at the option of Beneficiary upon the happening of any one or more of
the following events of default (each an "EVENT OF DEFAULT"):
(a) if any portion of the Debt is not paid on or before the related
Payment Date or, for any payment other than a Monthly Payment Amount, the date
on which such payment is due;
(b) subject to Trustor's right to contest as provided herein, if
any of the Taxes or Other Charges are not paid when the same are due and payable
(unless sums equaling the amount of Taxes and Other Charges then due and payable
have been delivered to Beneficiary in accordance with Paragraph 6 hereof);
(c) if the Policies are not kept in full force and effect, or if
the Policies are not delivered to Beneficiary upon request;
(d) if Trustor transfers or encumbers any portion of the Trust
Property without Beneficiary's prior written consent;
(e) if any representation or warranty of Trustor, or of any
Guarantor, made herein or in any other Loan Document or in any certificate,
report, financial statement or other instrument or document furnished to
Beneficiary shall have been false or misleading in any material respect when
made;
(f) if Trustor or any Guarantor shall make an assignment for the
benefit of creditors or if Trustor shall generally not be paying its debts as
they become due;
(g) if a receiver, liquidator or trustee of Trustor or of any
Guarantor shall be appointed or if Trustor or any Guarantor shall be adjudicated
a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by, Trustor or
any Guarantor or if any proceeding for the dissolution or liquidation of Trustor
or of any Guarantor shall be instituted; however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Trustor or such Guarantor, upon the same not being discharged, stayed or
dismissed within sixty (60) days;
-32-
(h) if Trustor shall be in default under any other deed of trust
or security agreement covering any part of the Trust Property whether it be
superior or junior in lien to this Deed of Trust;
(i) subject to Trustor's right to contest as provided herein, if
the Trust Property becomes subject to any mechanic's, materialman's or other
lien and such lien is not removed of record within thirty (30) days of the
filing or recording of such lien (except a lien for local real estate taxes and
assessments not then due and payable);
(j) if Trustor fails to cure properly any violations of laws or
ordinances affecting or which may be interpreted to affect the Trust Property
within thirty (30) days after Trustor first receives notice of any such
violations;
(k) except as permitted in this Deed of Trust, the material
alteration, improvement, demolition or removal of any of the Improvements
without the prior consent of Beneficiary;
(l) if Trustor shall continue to be in default under any term,
covenant, or provision of the Note or any of the other Loan Documents, beyond
applicable cure periods contained in those documents;
(m) if Trustor fails to cure a default under any other term,
covenant or provision of this Deed of Trust within thirty (30) days after
Trustor first receives notice of any such default; provided, however, if such
default is reasonably susceptible of cure, but not within such thirty (30) day
period, then Trustor may be permitted up to an additional sixty (60) days to
cure such default provided that Trustor diligently and continuously pursues such
cure;
(n) if without Beneficiary's prior written consent, (i) the
Management Agreement is terminated, (ii) the ownership, management or control of
Manager is transferred, (iii) there is a material change in the Management
Agreement, or (iv) if there shall be a material default by Trustor under the
Management Agreement; or
(o) if Trustor ceases to continuously operate the Trust Property or
any material portion thereof as a shopping center for any reason whatsoever
(other than temporary cessation in connection with any repair or renovation
thereof undertaken with the consent of Beneficiary).
24. LATE PAYMENT CHARGE. If any portion of the Debt is not paid on or
before the date on which such payment is due, Trustor shall pay to Beneficiary
upon demand an amount equal to the lesser of three percent (3%) of such unpaid
portion of the Debt or the maximum amount permitted by applicable law in order
to defray a portion of the expenses incurred by Beneficiary in handling and
processing such delinquent payment and to compensate Beneficiary for the loss of
the use of such delinquent payment, and such amount shall be secured by this
Deed of Trust.
-33-
25. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of Default
or if Trustor fails to make any payment (including, without limitation, any
required payments for taxes, insurance or to discharge any liens with respect to
the Property) or to do any act as herein provided, Beneficiary may, but
without any obligation to do so and without notice to or demand on Trustor and
without releasing Trustor from any obligation hereunder, make or do the same in
such manner and to such extent as Beneficiary may deem necessary to protect the
security hereof. Beneficiary is authorized to enter upon the Trust Property for
such purposes or appear in, defend, or bring any action or proceeding to protect
its interest in the Trust Property or to foreclose this Deed of Trust or collect
the Debt, and the cost and expense thereof (including reasonable attorneys' fees
and disbursements to the extent permitted by law), with interest at the Default
Rate (as defined in the Note) for the period after notice from Beneficiary that
such cost or expense was incurred to the date of payment to Beneficiary, shall
constitute a portion of the Debt, shall be secured by this Deed of Trust and the
other Loan Documents and shall be due and payable to Beneficiary upon demand.
26. ADDITIONAL REMEDIES.
(a) Upon the occurrence of any Event of Default, Beneficiary or
Trustee may take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Trustor and in and to the Trust Property
by Beneficiary itself or through Trustee or otherwise, including, without
limitation, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Beneficiary may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Beneficiary:
(i) declare the entire Debt to be immediately due and payable;
(ii) institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the complete foreclosure of this
Deed of Trust in which case the Trust Property or any interest therein may be
sold for cash or upon credit in one or more parcels or in several interests or
portions and in any order or manner;
(iii) 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 of this Deed of Trust for the
balance of the Debt not then due;
(iv) sell for cash or upon credit the Trust Property or any
part thereof and all estate, claim, demand, right, title and interest of Trustor
therein and rights of redemption thereof, pursuant to the power of sale
contained herein or otherwise, at one or more sales, as an entirety or in
parcels, at such time and place, upon such terms and after such notice thereof
as may be required or permitted by law;
-34-
(v) institute an action, suite or proceeding in
equity for the specific performance of any covenant, condition or agreement
contained herein, or in any of the other Loan Documents;
(vi) recover judgment on the Note either before,
during of after any proceedings for the enforcement of this Deed of Trust;
(vii) apply for the appointment of a trustee,
receiver, liquidator or conservator of the Trust Property, without notice and
without regard for the adequacy of the security for the Debt and without regard
for the solvency of the Trustor, any Guarantor or of any person, firm or other
entity liable for the payment of the Debt;
(viii) enforce Beneficiary's interest in the Leases
and Rents and enter into or upon the Trust Property, either personally or by its
agents, nominees or attorneys and dispossess Trustor and its agents and servants
therefrom, and thereupon Beneficiary may (A) use, operate, manager, control,
insure, maintain, repair, restore and otherwise deal with all and every part of
the Trust Property and conduct the business thereat; (B) complete any
construction on the Trust Property in such manner and form as Beneficiary deems
advisable; (C) make alterations, additions, renewals, replacements and
improvements to or on the Trust Property; (D) exercise all rights and powers of
Trustor with respect to the Trust Property, whether in the name of Trustor 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; and (E) apply the receipts from the Trust Property to the
payment of Debt, after deducting therefrom all expenses (including reasonable
attorneys' fees and disbursements) incurred in connection with the aforesaid
operations and all amounts necessary to pay the taxes, assessments insurance and
other charges in connection with the Trust Property, as well as just and
reasonable compensation for the services of Beneficiary, its counsel, agents and
employees;
(ix) require Trustor to pay monthly in advance to
Beneficiary, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of any portion of the Trust
Property occupied by Trustor and require Trustor to vacate and surrender
possession to Beneficiary of the Trust Property or to such receiver and, in
default thereof, evict Trustor by summary proceedings or otherwise; or
(x) pursue such other rights and remedies as may be
available at law or in equity or under the Uniform Commercial Code including
without limitation the right to receive and/or establish a lock box for all
Rents proceeds from the Intangibles and any other receivables or rights to
payments of Trustor relating to the Trust Property.
In the event of a sale, by foreclosure or otherwise, of less than all of the
Trust Property, this Deed of Trust shall continue as a lien on the remaining
portion of the Trust Property.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Beneficiary
under this Deed of Trust, whether under the provisions of this paragraph or
otherwise, shall be applied
-35-
by Beneficiary to the payment of the Debt in such priority and proportion as
Beneficiary in its sole discretion shall deem proper.
(c) Beneficiary or Trustee may adjourn from time to time any
sale by it to be made under or by virtue of this Deed of Trust by announcement
at the time and place appointed for such sale or for such adjourned sale or
sales; and, except as otherwise provided by any applicable provision of law,
Beneficiary or Trustee, without further notice or publication, may make such
sale at the time and place to which the same shall be so adjourned.
(d) Upon the completion of any sale or sales pursuant hereto,
Beneficiary, or an officer of any court empowered to do so, shall execute and
deliver to the accepted purchaser or purchasers a good and sufficient
instrument, or good and sufficient instruments, conveying, assigning and
transferring all estate, right, title and interest in and to the property and
rights sold. Beneficiary and Trustee are hereby irrevocably appointed the true
and lawful attorney of Trustor, in its name and stead, to make all necessary
conveyances, assignments, transfers and deliveries of the Trust Property and
rights so sold and for that purpose Beneficiary and Trustee may execute all
necessary instruments of conveyance, assignment and transfer, and may substitute
one or more persons with like power, Trustor hereby ratifying and confirming all
that its said attorney or such substitute or substitutes shall lawfully do by
virtue hereof. Any sale or sales made under or by virtue of this paragraph,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, shall
operate to divest all the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of Trustor in and to the properties and
rights so sold, and shall be a perpetual bar both at law and in equity against
Trustor and against any and all persons claiming or who may claim the same, or
any part thereof from, through or under Trustor.
(e) Upon any sale made under or by virtue of this paragraph,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Beneficiary may bid for and acquire the Trust Property or any part thereof and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the Debt the net sales price after deducting therefrom the
expenses of the sale and costs of the action and any other sums which
Beneficiary is authorized to deduct under this Deed of Trust.
(f) No recovery of any judgment by Beneficiary and no levy of
an execution under any judgment upon the Trust Property or upon any other
property of Trustor shall affect in any manner or to any extent the lien of this
Deed of Trust upon the Trust Property or any part thereof, or any liens, rights,
powers or remedies of Beneficiary hereunder, but such liens, rights, powers and
remedies of Beneficiary shall continue unimpaired as before.
(g) Beneficiary may terminate or rescind any proceeding or
other action brought in connection with its exercise of the remedies provided in
this paragraph at any
-36-
time before the conclusion thereof, as determined in Beneficiary's sole
discretion and without prejudice to Beneficiary.
(h) Beneficiary or Trustee may resort to any remedies and the
security given by the Note, this Deed of Trust or the Loan Documents in whole or
in part, and in such portions and in such order as determined by Beneficiary's
sole discretion. No such action shall in any way be considered a waiver of any
rights, benefits or remedies evidenced or provided by the Note, this Deed of
Trust or any of the other Loan Documents. The failure of Beneficiary or Trustee
to exercise any right, remedy or option provided in the Note, this Deed of Trust
or any of the other Loan Documents shall not be deemed a waiver of such right,
remedy or option or of any covenant or obligation secured by the Note, this Deed
of Trust or the other Loan Documents. No acceptance by Beneficiary of any
payment after the occurrence of any Event of Default and no payment by
Beneficiary of any obligation for which Trustor is liable hereunder shall be
deemed to waive or cure any Event of Default with respect to Trustor, or
Trustor's liability to pay such obligation. No sale of all or any portion of the
Trust Property, no forbearance on the pan of Beneficiary or Trustee, and no
extension of time for the payment of the whole or any portion of the Debt or any
other indulgence given by Beneficiary or Trustee to Trustor, shall operate to
release or in any manner affect the interest of Beneficiary in the remaining
Trust Property or the liability of Trustor to pay the Debt. No waiver by
Beneficiary or Trustee shall be effective unless it is in writing and then only
to the extent specifically stated. All costs and expenses of Beneficiary and
Trustee in exercising the rights and remedies under this Paragraph 26 (including
reasonable attorneys' fees and disbursements to the extent permitted by law),
shall be paid by Trustor immediately upon notice from Beneficiary or Trustee,
with interest at the Default Rate for the period after notice from Beneficiary
or Trustee and such casts and expenses shall constitute a portion of the Debt
and shall be secured by this Deed of Trust.
(i) The interests and rights of Beneficiary under the Note,
this Deed of Trust or in any of the other Loan Documents shall not be impaired
by any indulgence, including (i) any renewal, extension or modification which
Beneficiary may grunt with respect to any of the Debt, (ii) any surrender,
compromise, release, renewal, extension, exchange or substitution which
Beneficiary may grant with respect to the Trust Property or any portion thereof;
or (iii) any release or indulgence granted to any maker, endorser, Guarantor or
surety of any of the Debt.
27. RIGHT OF ENTRY. In addition to any other rights or remedies granted
under this Deed of Trust, Beneficiary, Trustee and their agents, during the
Term, shall have the right to enter and inspect the Trust Property during normal
business hours. The cost of such inspections or audits shall be borne by Trustor
should Beneficiary determine that an Event of Default exists, including the cost
of all follow up or additional investigations or inquiries deemed reasonably
necessary by Beneficiary. The cost of such inspections, if not paid for by
Trustor following demand, may be added to the principal balance of the sums due
under the Note and this Deed of Trust and shall bear interest thereafter until
paid at the Default Rate.
-37-
28. SECURITY AGREEMENT
(a) This Deed of Trust is both a real property deed of trust
and a "security agreement" within the meaning of the Uniform Commercial Code.
The Trust Property includes both real and personal property and all other rights
and interests, whether tangible or intangible in nature, of Trustor in the Trust
Property. Trustor by executing and delivering this Deed of Trust has granted and
hereby grants to Beneficiary and Trustee, as security for the Debt, a security
interest in the Trust Property to the full extent that the Trust Property may be
subject to the Uniform Commercial Code (said portion of the Trust Property so
subject to the Uniform Commercial Code being called in this paragraph the
"COLLATERAL"). Trustor hereby agrees with Beneficiary to execute and deliver to
Beneficiary, in form and substance satisfactory to Beneficiary, such financing
statements and such further assurances as Beneficiary may from time to time,
reasonably consider necessary to create, perfect, and preserve Beneficiary's
security interest herein granted. This Deed of Trust shall also constitute a
"fixture filing" for the purposes of the Uniform Commercial Code. As such, this
Deed of Trust covers all items of the Collateral that are or are to become
fixtures. Information concerning the security interest herein granted may be
obtained from the parties at the addresses of the parties set forth in the first
paragraph of this Deed of Trust.
(b) If an Event of Default shall occur, Beneficiary and
Trustee, 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 Beneficiary or Trustee may deem necessary for the care, protection
and preservation of the Collateral. Upon request or demand of Beneficiary or
Trustee, Trustor shall at its expense assemble the Collateral and make it
available to Beneficiary and Trustee at a convenient place acceptable to
Beneficiary. Trustor shall pay to Beneficiary and Trustee on demand any and all
expenses, including attorneys' fees and disbursements, incurred or paid by
Beneficiary and Trustee in protecting the interest in the Collateral and in
enforcing the rights hereunder with respect to the Collateral. Any notice of
sale, disposition or other intended action by Beneficiary and Trustee with
respect to the Collateral sent to Trustor in accordance with the provisions
hereof at least five (5) days prior to such action, shall constitute
commercially reasonable notice to Trustor. The proceeds of any disposition of
the Collateral, or any part thereof, may be applied by Beneficiary to the
payment of the Debt in such priority and proportions as Beneficiary in its sole
discretion shall deem proper. In the event of any change in name, identity or
structure of any Trustor, such Trustor shall notify Beneficiary and Trustee
thereof and promptly after request shall execute, file and record such Uniform
Commercial Code forms as are necessary to maintain the priority of Beneficiary's
lien upon and security interest in the Collateral, and shall pay all expenses
and fees in connection with the filing and recording thereof. If Beneficiary
shall require the filing or recording of additional Uniform Commercial Code
forms or continuation statements, Trustor shall, promptly after request,
execute, file and record such Uniform Commercial Code forms or continuation
statements as Beneficiary shall deem necessary, and shall pay all expenses and
fees in connection with the filing and recording thereof, it being understood
and agreed,
-38-
however, that no such additional documents shall increase Trustor's obligations
under the Note, this Deed of Trust and any of the other Loan Documents. Trustor
hereby irrevocably appoints Beneficiary as its attorney-in-fact, coupled with
an interest, to file with the appropriate public office on its behalf any
financing or other statements signed only by Beneficiary, as secured party, in
connection with the Collateral covered by this Deed of Trust.
29. ACTIONS AND PROCEEDINGS. Beneficiary or Trustee has the right to
appear in and defend any action or proceeding brought with respect to the Trust
Property and to bring any action or proceeding, in the name and on behalf of
Trustor, which Beneficiary, in its sole discretion, decides should be brought to
protect its interest in the Trust Property. Beneficiary shall, at its option, be
subrogated to the lien of any deed of trust or other security instrument
discharged in whole or in part by the Debt, and any such subrogation rights
shall constitute additional security for the payment of the Debt.
30. WAIVER OF SETOFF AND COUNTERCLAIM. All amounts due under this Deed
of Trust, the Note and the other Loan Documents shall be payable without setoff,
counterclaim or any deduction whatsoever. Trustor hereby waives the right to
assert a setoff, counterclaim (other than a mandatory or compulsory
counterclaim) or deduction in any action or proceeding in which Beneficiary or
Trustee is a participant, or arising out of or in any way connected with this
Deed of Trust, the Note, any of the other Loan Documents, or the Debt.
31. CONTEST OF CERTAIN CLAIMS. Notwithstanding the provisions of
Paragraphs 5 and 23 hereof, Trustor shall not be in default for failure to pay
or discharge Taxes, Other Charges or mechanic's or materialman's lien asserted
against the Trust Property if, and so long as, (a) Trustor shall have notified
Beneficiary of same within five (5) days of obtaining knowledge thereof; (b)
Trustor shall diligently and in good faith contest the same by appropriate legal
proceedings which shall operate to prevent the enforcement or collection of the
same and the sale of the Trust Property or any part thereof, to satisfy the
same; (c) Trustor shall have furnished to Beneficiary a cash deposit, or an
indemnity bond satisfactory to Beneficiary with a surety reasonably satisfactory
to Beneficiary, in an amount equal to 125% of the amount of the Taxes, Other
Charges or mechanic's or materialman's lien claim, plus a reasonable additional
sum to pay all costs, interest and penalties that may be imposed or incurred in
connection therewith, to assure payment of the matters under contest and to
prevent any sale or forfeiture of the Trust Property or any part thereof; (d)
Trustor shall promptly upon final determination thereof pay the amount of any
such Taxes, Other Charges or claim so determined, together with all costs,
interest and penalties which may be payable in connection therewith; (e) the
failure to pay the Taxes, Other Charges or mechanic's or materialman's lien
claim does not constitute a default under any other deed of trust, mortgage or
security interest covering or affecting any part of the Trust Property; and (f)
notwithstanding the foregoing, Trustor shall immediately upon request of
Beneficiary pay (and if Trustor shall fail so to do, Beneficiary may, but shall
not be required to, pay or cause to be discharged or bonded against) any such
Taxes, Other Charges or claim notwithstanding such contest, if in the opinion of
Beneficiary, the Trust Property or any part thereof or interest therein may be
in danger of being sold, forfeited, foreclosed, terminated, cancelled or lost.
Beneficiary may pay over any such cash deposit or part thereof to the claimant
entitled thereto
-39-
at any time when, in the judgment of Beneficiary, the entitlement of such
claimant is established.
32. RECOVERY OF SUMS REQUIRED TO BE PAID. Beneficiary shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the 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 Beneficiary or Trustee thereafter to bring an action of foreclosure, or any
other action, for a default or defaults by Trustor existing at the time such
earlier action was commenced.
33. MARSHALLING AND OTHER MATTERS. Trustor hereby waives, to the extent
permitted by law, 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 Trust Property or any part
thereof or any interest therein. Further, Trustor 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 Trustor, and on behalf of each and every
person acquiring any interest in or title to the Trust Property subsequent to
the date of this Deed of Trust and on behalf of all persons to the extent
permitted by applicable law.
34. HAZARDOUS SUBSTANCES. Trustor hereby represents and warrants to
Beneficiary that, to the best of Trustor's knowledge, after due inquiry and
investigation except as disclosed in the report dated December 19, 1997,
prepared by KTR Environmental Services, Inc. (the "PHASE I REPORT") and
delivered to Beneficiary in connection with the Loan: (a) the Trust Property is
not in direct or indirect violation of any local, state, federal or other
governmental authority, statute, ordinance, code, order, decree, law, rule or
regulation pertaining to or imposing liability or standards of conduct
concerning environmental regulation, contamination or clean-up including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended ("CERCLA"), the Resource Conservation and Recovery
Act, as amended ("RCRA"), the Emergency Planning and Community Right-to-Know Act
of 1986, as amended, the Hazardous Substances Transportation Act, as amended,
the Solid Waste Disposal Act, as amended, the Clean Water Act, as amended, the
Clean Air Act, as amended, the Toxic Substance Control Act, as amended, the Safe
Drinking Water Act, as amended, the Occupational Safety and Health Act, as
amended, any state super-lien and environmental clean-up statutes and all rules
and regulations adopted in respect to the foregoing laws whether presently in
force or coming into being and/or effectiveness hereafter (collectively,
"ENVIRONMENTAL LAWS"); (b) the Trust Property is not subject to any private or
governmental lien or judicial or administrative notice or action or inquiry,
investigation or claim relating to hazardous and/or toxic, dangerous and/or
regulated, substances, wastes, materials, raw materials which include hazardous
constituents, pollutants or contaminants including without limitation,
petroleum, tremolite, anthlophylie, actinolite or polychlorinated biphenyls and
any other substances or materials which are included under or regulated by
Environmental Laws or which are considered by scientific opinion to be otherwise
dangerous in terms of the health, safety and welfare of humans (collectively,
"HAZARDOUS SUBSTANCES"); (c) no Hazardous Substances are or have been (including
the period prior to Trustor's acquisition of the Trust Property) discharged,
-40-
generated, treated, disposed of or stored on, incorporated in, or removed or
transported from the Trust Property other than in compliance with all
Environmental Laws; (d) no Hazardous Substances are present in, on or under any
nearby real property which could migrate to or otherwise affect the Trust
Property; and (e) no underground storage tanks exist on any of the Trust
Property. So long as Trustor owns or is in possession of the Trust Property,
Trustor (i) shall keep or cause the Trust Property to be kept free from
Hazardous Substances and in compliance with all Environmental Laws, (ii) shall
promptly notify Beneficiary if Trustor shall become aware of any Hazardous
Substances on or near the Trust Property and/or if Trustor shall become aware
that the Trust Property is in direct or indirect violation of any Environmental
Laws and/or if Trustor shall become aware of any condition on or near the Trust
Property which shall pose a threat to the health, safety or welfare of humans,
and (iii) Trustor shall remove such Hazardous Substances and/or cure such
violations and/or remove such threats, as applicable, as required by law (or as
shall be required by Beneficiary in the case of removal which is not required by
law, but in response to the opinion of a licensed hydrogeologist, licensed
environmental engineer or other qualified consultant engaged by Beneficiary
("BENEFICIARY'S CONSULTANT")), promptly after Trustor becomes aware of same, at
Trustor's sole expense. Notwithstanding anything to the contrary in this
paragraph, the Trustor may use and store immaterial amounts of Hazardous
Substances at the Trust Property if such use or storage is in connection with
the ordinary cleaning and maintenance of the Trust Property so long as such use
and storage (A) does not violate any applicable Environmental Laws and (B) is
not the subject of any specific recommendations in the Phase I Report. Nothing
herein shall prevent Trustor from recovering such expenses from any other party
that may be liable for such removal or cure. The obligations and liabilities of
Trustor under this Paragraph 34 shall survive any termination, satisfaction, or
assignment of this Deed of Trust and the exercise by Beneficiary of any of its
rights or remedies hereunder, including, without limitation, the acquisition of
the Trust Property by foreclosure or a conveyance in lieu of foreclosure.
35. ASBESTOS. Trustor represents and warrants that, to the best of
Trustor's knowledge, after due inquiry and investigation, no asbestos or any
substance or material containing asbestos ("ASBESTOS") is located on the Trust
Property except as may have been disclosed in the Phase I Report delivered to
Beneficiary in connection with the Loan. Trustor shall not install in the Trust
Property, nor permit to be installed in the Trust Property, Asbestos and shall
remove any Asbestos promptly upon discovery to the satisfaction of Beneficiary,
at Trustor's sole expense. Trustor shall in all instances comply with, and
ensure compliance by all occupants of the Trust Property with, all applicable
federal, state and local laws, ordinances, rules and regulations with respect
to Asbestos, and shall keep the Trust Property free and clear of any liens
imposed pursuant to such laws, ordinances, rules or regulations. In the event
that Trustor receives any notice or advice from any governmental agency or any
source whatsoever with respect to Asbestos on, affecting or installed on the
Trust Property, Trustor shall immediately notify Beneficiary. The obligations
and liabilities of Trustor under this Paragraph 35 shall survive any
termination, satisfaction, or assignment of this Deed of Trust and the exercise
by Beneficiary of any of its rights or remedies hereunder, including but not
limited to, the acquisition of the Trust Property by foreclosure or a conveyance
in lieu of foreclosure.
-41-
36. ENVIRONMENTAL MONITORING. Trustor shall give prompt written notices
to Beneficiary of: (a) any proceeding or inquiry by any party with respect to
the presence of any Hazardous Substance or Asbestos on, under, from or about the
Trust Property, (b) all claims made or threatened by any third party against
Trustor or the Trust Property relating to any loss or injury resulting from any
Hazardous Substance or Asbestos, and (c) Trustor's discovery of any occurrence
or condition on any real property adjoining or in the vicinity of the Trust
Property that could cause the Trust Property to be subject to any investigation
or cleanup pursuant to any Environmental Law. Trustor shall permit Beneficiary
to join and participate in, as a party if it so elects, any legal proceedings or
actions initiated with respect to the Trust Property in connection with any
Environmental Law or Hazardous Substance, and Trustor shall pay all attorneys'
fees and disbursements incurred by Beneficiary in connection therewith. Upon
Beneficiary's request, at any time and from time to time while this Deed of
Trust is in effect but not more frequently than once per calendar year, unless
Beneficiary has determined (in the exercise of its good faith judgment) that
reasonable cause exists for the performance of an environmental inspection or
audit of the Trust Property, Trustor shall provide at Trustor's sole expense,
(i) an inspection or audit of the Trust Property prepared by a licensed
hydrogeologist or licensed environmental engineer approved by Beneficiary
indicating the presence or absence of Hazardous Substances on, in or near the
Trust Property, and (ii) an inspection or audit of the Trust Property prepared
by a duly qualified engineering or consulting firm approved by Beneficiary,
indicating the presence or absence of Asbestos on the Trust Property; provided,
however, any such inspection or audit requested by Beneficiary, during the Term,
in excess of one (1) inspection during each five (5) year period commencing upon
the date hereof, shall be performed at Beneficiary's expense unless an Event of
Default exists or Beneficiary has determined (in the exercise of its good faith
and judgment) that reasonable cause exists for the performance of an
environmental inspection or audit. If Trustor fails to provide such inspection
or audit within thirty (30) days after such request Beneficiary may order same,
and Trustor hereby grants to Beneficiary and its employees and agents access to
the Trust Property and a license to undertake such inspection or audit. The cost
of such inspection or audit may be added to the Debt and shall bear interest
thereafter until paid at the Default Rate. In the event that any environmental
site assessment report prepared in connection with such inspection or audit
recommends that an operations and maintenance plan be implemented for Asbestos
or any Hazardous Substance, Trustor shall cause such operations and maintenance
plan to be prepared and implemented at Trustor's expense upon request of
Beneficiary. In the event that any investigation, site monitoring, containment
cleanup, removal, restoration, or other work of any kind is reasonably necessary
or desirable under an applicable Environmental Law (the "REMEDIAL WORK"),
Trustor shall commence and thereafter diligently prosecute to completion all
such Remedial Work within thirty (30) days after written demand by Beneficiary
for performance thereof (or any such shorter period of time as may be required
under applicable law.) All Remedial Work shall be performed by contractors
approved in advance by Beneficiary, and under the supervision of a consulting
engineer approved by Beneficiary. All costs and expenses of such Remedial Work
shall be paid by Trustor including, without limitation, Beneficiary's reasonable
attorneys' fees and disbursements incurred in connection with monitoring or
review of such Remedial Work. In the event Trustor shall fail to timely
commence, or cause to be commenced, or fail to
-42-
diligently prosecute to completion, such Remedial Work, Beneficiary may, but
shall not be required to, cause such Remedial Work to be performed, and all
costs and expenses thereof, or incurred in connection therewith, may be added to
the Debt and shall bear interest thereafter until paid at the Default Rate.
37. HANDICAPPED ACCESS.
(a) Trustor agrees that the Trust Property shall at all times
strictly comply to the extent applicable with the requirements of the Americans
with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988 (if
applicable), all state and local laws and ordinances related to handicapped
access and all rules, regulations, and orders issued pursuant thereto including,
without limitation, the Americans with Disabilities Act Accessibility Guidelines
for Buildings and Facilities (collectively "ACCESS LAWS").
(b) Notwithstanding any provisions set forth herein or in any
other document regarding Beneficiary's approval of alterations of the Trust
Property, Trustor shall not alter the Trust Property in any manner which would
increase Trustor's responsibilities for compliance with the applicable Access
Laws without the prior written approval of Beneficiary. The foregoing shall
apply to tenant improvements constructed by Trustor or by any of its tenants.
Beneficiary may condition any such approval upon receipt of a certificate of
Access Law compliance from an architect, engineer, or other person acceptable to
Beneficiary.
(c) Trustor agrees to give prompt notice to Beneficiary of the
receipt by Trustor of any complaints related to violation of any Access Laws and
of the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws.
38. INDEMNIFICATION. In addition to any other indemnifications
provided herein or in the other Loan Documents, Trustor shall protect, defend,
indemnify and save harmless Beneficiary and Trustee from and against all
liabilities, obligations, claims, demands, damages, penalties, causes of action,
losses, fines, costs and expenses (including, without limitation, reasonable
attorneys' fees and disbursements), imposed upon or incurred by or asserted
against Beneficiary or Trustee by reason of (a) ownership of this Deed of
Trust, the Trust Property or any interest therein or receipt of any Rents; (b)
any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Trust Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (c) any use, nonuse or condition in, on or about the Trust Property or
any part thereof or on adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (d) any failure on the part of Trustor or
Trustee to perform or comply with any of the terms of this Deed of Trust; (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Trust Property or any part thereof; (f) the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release, or
threatened release of any Hazardous Substance or Asbestos on, from, or affecting
the Trust Property; (g) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such Hazardous
Substance or Asbestos; (h) any
-43-
lawsuit brought or threatened, settlement reached, or government order relating
to such Hazardous Substance or Asbestos; (i) any violation of the Environmental
Laws, which are based upon or in any way related to such Hazardous Substance or
Asbestos including, without limitation, the costs and expenses of any Remedial
Work, attorney and consultant fees and disbursements, investigation and
laboratory fees, court costs, and litigation expenses; (j) any failure of the
Trust Property to comply with any Access Laws; (k) any representation or
warranty made in the Note, this Deed of Trust or any of the other Loan Documents
being false or misleading in any material respect as of the date such
representation or warranty was made; (l) any claim by brokers, finders or
similar persons claiming to be entitled to a commission in connection with the
Loan, any Lease or other transaction involving the Trust Property or any part
thereof under any legal requirement or any liability asserted against
Beneficiary with respect thereto; and (m) the claims of any lessee of any or any
portion of the Trust Property or any person acting through or under any lessee
or otherwise arising under or as a consequence of any Lease. Any amounts payable
to Beneficiary or Trustee by reason of the application of this paragraph shall
be secured by this Deed of Trust and shall become immediately due and payable
and shall bear interest at the Default Rate from the date loss or damage is
sustained by Beneficiary or Trustee until paid. The obligations and liabilities
of Trustor under this Paragraph 38 shall survive and termination, satisfaction,
or assignment of this Deed of Trust and the exercise by Beneficiary of any of
its rights or remedies hereunder, including, but not limited to, the acquisition
of the Trust Property by foreclosure or a conveyance in lieu of foreclosure.
39. NOTICES. Any notice, demand, statement, request or consent made
hereunder shall be in writing, addressed to the address, as set forth above, of
the party to whom such notice is to be given, or to such other address as
Trustor, Beneficiary or Trustee, as the case may be, shall designate in writing,
and shall be deemed to be received by the addressee on (i) the day such notice
is personally delivered to such addressee, (ii) the third (3rd) day following
the day such notice is deposited with the United States postal service first
class certified mail, return receipt requested, (iii) the day following the day
on which such notice is delivered to a nationally recognized overnight courier
delivery service, or (iv) the day facsimile transmission is confirmed after
transmission of such notice by telecopy to such telecopier number as Trustor,
Trustee or Beneficiary, as the case may be, shall have previously designated in
writing.
40. AUTHORITY.
(a) Trustor (and the undersigned representative of Trustor, if
any) represent and warrant that it (or they, as the case may be) has full power,
authority and right to execute, deliver and perform its obligations pursuant to
this Deed of Trust, and to deed, mortgage, give, grant, bargain, sell, alien,
enfeoff, convey, confirm, warrant, pledge, hypothecate and assign the Trust
Property pursuant to the terms hereof and to keep and observe all of the terms
of this Deed of Trust on Trustor's part to be performed.
-44-
(b) Trustor represents and warrants that Trustor is not a
"foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code of 1986, as amended and the related Treasury Department
regulations, including temporary regulations.
41. WAIVER OF NOTICE. Trustor shall not be entitled to any notices of
any nature whatsoever from Beneficiary or Trustee except with respect to matters
for which this Deed of Trust specifically and expressly provides for the giving
of notice by Beneficiary or Trustee to Trustor and except with respect to
matters for which Beneficiary or Trustee is required by applicable law to give
notice, and Trustor hereby expressly waives the right to receive any notice from
Beneficiary 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
Beneficiary or Trustee to Trustor.
42. REMEDIES OF TRUSTOR. In the event that a claim or adjudication is
made that Beneficiary has acted unreasonably or unreasonably delayed acting in
any case where by law or under the Note, this Deed of Trust or any of the other
Loan Documents, it has an obligation to act reasonably or promptly, neither
Beneficiary nor Trustee shall be liable for any monetary damages, and Trustor's
remedies shall be limited to injunctive relief or declaratory judgment.
43. SOLE DISCRETION OF BENEFICIARY. Wherever pursuant to this Deed of
Trust, Beneficiary exercises any right given to it to consent or not consent or
approve or disapprove, or any arrangement or term is to be satisfactory to
Beneficiary, the decision of Beneficiary to consent or not consent, to approve
or disapprove or to decide that arrangements or terms are satisfactory or not
satisfactory shall be in the sole discretion of Beneficiary and shall be final
and conclusive, except as may be otherwise expressly and specifically provided
herein.
44. NON-WAIVER. The failure of Beneficiary 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. Trustor shall not be relieved of Trustor's
obligations hereunder by reason of (a) the failure of Beneficiary or Trustee to
comply with any request of Trustor or Guarantor to take any action to foreclose
this Deed of Trust or otherwise enforce any of the provisions hereof or of the
Note, or the other Loan Documents, (b) the release, regardless of consideration,
of the whole or any part of the Trust Property, or of any person liable for the
Debt or any portion thereof, or (c) any agreement or stipulation by Beneficiary
extending the time of payment or otherwise modifying or supplementing the terms
of the Note, this Deed of Trust or any of the other Loan Documents. Beneficiary
may resort for the payment of the Debt to any other security held by Beneficiary
in such order and manner as Beneficiary, in its sole discretion, may elect.
Beneficiary or Trustee may take action to recover the Debt, or any portion
thereof, or to enforce any covenant hereof without prejudice to the right of
Beneficiary or Trustee thereafter to foreclosure this Deed of Trust. The rights
and remedies of Beneficiary 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 Beneficiary or Trustee shall be construed as
an election to proceed under any one provision herein to the exclusion of any
other provision.
-45-
Beneficiary and Trustee shall not be limited exclusively to the rights and
remedies herein stated but shall be entitled to every right and remedy now or
hereafter afforded at law or in equity.
45. 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 Trustor or Beneficiary,
but only by an agreement in writing signed by the party against whom enforcement
of any modification, amendment, waiver, extension, change, discharge or
termination is sought.
46. LIABILITY. If Trustor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. Subject to the provisions hereof requiring Beneficiary's consent to any
transfer of the Trust Property, this Deed of Trust shall be binding upon and
inure to the benefit of Trustor and Beneficiary and their respective successors
and assigns forever.
47. INAPPLICABLE PROVISIONS. If any term, covenant or condition of the
Note or this Deed of Trust is held to be invalid, illegal or unenforceable in
any respect, the Note and this Deed of Trust shall be construed without such
provision.
48. HEADINGS, ETC. The headings and captions of various paragraphs of
this Deed of Trust are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
49. DUPLICATE ORIGINALS. This Deed of Trust may be executed in any
number of duplicate originals and each such duplicate original shall be deemed
to be an original.
50. 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 singular or plural form and the word
"TRUSTOR" shall mean "each Trustor and any subsequent owner or owners of the
Trust Property or any part thereof or any interest therein," the xxxx
"BENEFICIARY" shall mean "Beneficiary and any subsequent holder of the Note,"
the word "TRUSTEE" shall mean "Trustee and any subsequent holder of this Deed of
Trust," the word "NOTE" shall mean "the Note and any other evidence of
indebtedness secured by this Deed of Trust," the word "PERSON" shall include an
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, and any other entity, and the words "TRUST
PROPERTY" shall include any portion of the Trust Property and any interest
therein and the words "ATTORNEYS' FEES" shall include any and all attorneys'
fees, paralegal and law clerk fees, including, without limitation, fees at the
pre-trial, trial and appellate levels incurred or paid by Beneficiary in
protecting its interest in the Trust Property and Collateral and enforcing its
rights hereunder. Whenever the context may require, any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural and vice versa.
-46-
51. HOMESTEAD. Trustor hereby waives and renounces all homestead and
exemption rights provided by the Constitution and the laws of the United States
and of any state, in and to the Trust Property as against the collection of the
Debt, or any part hereof.
52. ASSIGNMENTS. Beneficiary shall have the right to assign or transfer
its rights under this Deed of Trust without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded Beneficiary under this
Deed of Trust.
53. WAIVER OF JURY TRIAL. TRUSTOR HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE NOTE, THIS DEED OF TRUST, OR THE OTHER 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 TRUSTOR, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. BENEFICIARY IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY TRUSTOR.
54. TRUSTEE'S FEES; SUBSTITUTE TRUSTEE.
(a) Trustor shall pay all 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.
(b) 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 Trustor and to Beneficiary.
Beneficiary may remove Trustee at any time or from time to time and select a
successor trustee. In the event of the death, removal, resignation, refusal to
act, or inability to act of Trustee, or in its sole discretion for any reason
whatsoever, Beneficiary 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 Beneficiary. The procedure provided for in this
paragraph for substitution of Trustee shall be
-47-
in addition to and not in exclusion of any other provisions for substitution, by
law or otherwise.
55. POWER OF SALE.
(a) Upon the occurrence of an Event of Default, Trustee, or
the agent or successor of Trustee, at the request of Beneficiary, shall sell or
offer for sale the Trust Property in such portions, order and parcels as
Beneficiary may determine with or without having first taken possession of same,
to the highest bidder for cash at one or more public auctions in accordance with
the terms and provisions of the law of the State in which the Trust Property is
located. Such sale shall be made at the area within the courthouse of the county
in which the Trust Property (or any portion thereof to be sold) is situated
(whether the parts or parcels thereof, if any, in different counties are
contiguous or not, and without the necessity of having any personal property
hereby secured present at such sale) which is designated by the applicable court
of such County as the area in which public sales are to take place, or, if no
such area is designated, at the area at the courthouse designated in the notice
of sale as the area in which the sale will take place, on such day and at such
times as permitted under applicable law of the State where the Trust Property is
located, after advertising the time, place and terms of sale and that portion of
the Trust Property in accordance with such law, and after having served written
or printed notice of the proposed sale by certified mail on each Trustor
obligated to pay the Note and other secured indebtedness secured by this Deed of
Trust according to the records of Beneficiary in accordance with applicable law.
The affidavit of any person having knowledge of the facts to the effect that
such service was completed shall be prima facie evidence of the fact of service.
At any such public sale, Trustee may execute and deliver in
the name of Trustor to the purchaser a conveyance of the Trust Property or any
part of the Trust Property in fee simple. In the event of any sale under this
Deed of Trust by virtue of the exercise of the powers herein granted, or
pursuant to any order in any judicial proceeding or otherwise, the Trust
Property may be sold in its entirety or in separate parcels and in such manner
or order as Beneficiary in its sole discretion may elect, and if Beneficiary so
elects, Trustee may sell the personal property covered by this Deed of Trust at
one or more separate sales in any manner permitted by the Uniform Commercial
Code of the State in which the Trust Property is located, and one or more
exercises of the powers herein granted shall not extinguish or exhaust such
powers, until all the Trust Property is sold or the Note and other secured
indebtedness is paid in full. If the Note and other secured indebtedness is now
or hereafter further secured by any chattel Deed of Trusts, pledges, contracts
or guaranty, assignments of lease, or other security instruments, Beneficiary at
its option may exhaust the remedies granted under any of said security
instruments either concurrently or independently, and in such order as
Beneficiary may determine.
(b) Upon any foreclosure sale or sales of all or any portion
of the Trust Property under the power herein granted, Beneficiary may bid for
and purchase the Trust Property and shall be entitled to apply all or any part
of the Debt as a credit to the purchase price.
-48-
(c) In the event of a foreclosure or a sale of all or any
portion of the Trust Property under the power herein granted, the proceeds of
said sale shall be applied, in whatever order Beneficiary in its sole discretion
may decide, to the expenses of such sale and of all proceedings in connection
therewith (including, without limitation, attorneys' fees and expenses), to fees
and expenses of Trustee (including, without limitation, Trustee's attorneys'
fees and expenses), to insurance premiums, liens, assessments, taxes and charges
(including, without limitation, utility charges advanced by Beneficiary), to
payment of the outstanding principal balance of the Debt, and to the accrued
interest on all of the foregoing; and the remainder, if any, shall be paid to
Trustor, or to the person or entity lawfully entitled thereto.
56. RECOURSE PROVISIONS. Subject to the qualifications below,
Beneficiary shall not enforce the liability and obligation of Trustor, to
perform and observe the obligations contained in this Deed of Trust, the Note or
any of the other Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Trustor, except that Beneficiary may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Beneficiary to enforce and realize upon its
interests under the Note, this Deed of Trust or the other Loan Documents or in
the Trust Property, the Rents or any other collateral given to Beneficiary
pursuant to this Deed of Trust and the other Loan Documents; provided, however,
that, except as specifically provided herein, any judgment in any such action or
proceeding shall be enforceable against Trustor only to the extent of Trustor's
interest in the Trust Property, the Rents and in any other collateral given to
Beneficiary, and Beneficiary, by accepting this Deed of Trust, the Note and the
other Loan Documents, agrees that it shall not xxx for, seek or demand any
deficiency judgment against Trustor in any such action or proceeding under or by
reason of or in connection with this Deed of Trust, the Note or any of the other
Loan Documents. The provisions of this paragraph shall not, however, (i)
constitute a waiver, release or impairment of any obligation evidenced or
secured by this Deed of Trust, the Note or any of the other Loan Documents; (ii)
impair the right of Beneficiary to name Trustor, as a party defendant in any
action or suit for foreclosure and sale under this Deed of Trust; (iii) affect
the validity or enforceability of any guaranty made in connection with the Loan
or any rights and remedies of Beneficiary thereunder; (iv) impair the right of
Beneficiary to obtain the appointment of a receiver; (v) impair the enforcement
of the Assignment of Leases and Rents executed in connection herewith; or (vi)
constitute a waiver of the right of Beneficiary to enforce the liability and
obligation of Trustor, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Beneficiary (including attorneys' fees and costs reasonably incurred) arising
out of or in connection with the following:
(a) fraud or intentional misrepresentation by Trustor or any
Guarantor in connection with the Loan;
(b) the gross negligence or willful misconduct of Trustor;
(c) physical waste of the Trust Property;
-49-
(d) the breach of any representation, warranty, covenant or
indemnification provision in that certain Environmental and Hazardous Substance
Indemnification Agreement of even date herewith given by Trustor to Beneficiary
or in this Deed of Trust concerning Environmental Laws, Hazardous Substances and
Asbestos;
(e) the removal or disposal of any portion of the Trust
Property after an Event of Default;
(f) the misapplication or conversion by Trustor of (i) any
insurance proceeds paid by reason of any loss, damage or destruction to the
Trust Property, (ii) any awards or other amounts received in connection with the
condemnation of all or a portion of the Trust Property, (iii) any Rents
following an Event of Default or (iv) any Rents paid more than one month in
advance;
(g) failure to pay charges for labor or materials or taxes or
other charges that can create liens on any portion of the Trust Property; and
(h) any security deposits collected with respect to the Trust
Property which are not delivered to Beneficiary upon a foreclosure of the Trust
Property or action in lieu thereof, except to the extent any such security
deposits were applied in accordance with the terms and conditions of any of the
Leases prior to the occurrence of the Event of Default that gave rise to such
foreclosure or action in lieu thereof.
Notwithstanding anything to the contrary in any of the Loan Documents
(i) Beneficiary shall not be deemed to have waived any right which Beneficiary
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Debt secured by
this Deed of Trust or to require that all collateral shall continue to secure
all of the Debt owing to Beneficiary in accordance with the Loan Documents, and
(ii) the Debt shall become fully recourse to Trustor in the event that: (A) the
first full monthly payment of principal and interest under the Note is not paid
when due; (B) Trustor fails to maintain its status as a single purpose entity in
accordance with the provisions of this Deed of Trust; (C) Trustor fails to
obtain Beneficiary's prior written consent to any subordinate financing or other
voluntary lien encumbering the Trust Property; (D) Trustor fails to obtain
Beneficiary's prior written consent to any assignment, transfer, or conveyance
of the Trust Property or any interest therein as required by this Deed of Trust;
(E) a receiver, liquidator or trustee of Trustor or the Guarantor shall be
appointed or if Trustor or the Guarantor shall be adjudicated a bankrupt or
insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law, shall be filed by,
consented to, or acquiesced in by, Trustor or the Guarantor or if any proceeding
for the dissolution or liquidation of Trustor or the Guarantor shall be
instituted; or (F) Trustor, any guarantor or any of their respective affiliates
or agents hinders, delays or interferes with the exercise by Trustee or
Beneficiary of any of its rights or remedies under the Loan Documents after the
occurrence and continuance of an Event of Default.
-50-
57. DEFEASANCE.
(a) Provided no Event of Default has occurred and is
continuing, at any time after the date which (i) is two years after the "startup
day," within the meaning of Section 860G(a)(9) of the Internal Revenue Code of
1986, as amended from time to time or any successor statute (the "Code"), of a
"real estate mortgage investment conduit," within the meaning of Section 860D
of the Code, that holds the Note or (ii) is four years after the date hereof,
whichever shall first occur, and before the Anticipated Repayment Date, Trustor
may cause the release of the Trust Property from the lien of this Deed of Trust
and the other Loan Documents upon the satisfaction of the following conditions:
(i) not less than thirty (30) days prior written notice shall
be given to Trustee and Beneficiary specifying a date (the "RELEASE
DATE") on which the Defeasance Collateral (as hereinafter defined) is
to be delivered, such Release Date only to occur on a Payment Date (as
defined in the Note);
(ii) all accrued and unpaid interest and all other sums due
under the Note and under the other Loan Documents up to the Release
Date, including, without limitation, all costs and expenses incurred by
Beneficiary or its agents in connection with such release (including,
without limitation, the fees and expenses incurred by attorneys and
accountants in connection with the review of the proposed Defeasance
Collateral and the preparation of the Defeasance Security Agreement (as
hereinafter defined) and related documentation), shall be paid in full
on or prior to the Release Date; and
(iii) Trustor shall deliver to Beneficiary on or prior to the
Release Date:
(A) an amount equal to the remaining principal amount of
the Note and the Yield Maintenance Premium
(hereinafter defined), if any, sufficient to purchase
direct, non-callable obligations of the United States
of America that provide for payments prior, but as
close as possible, to all successive monthly Payment
Dates occurring after the Release Date and assuming
the Loan is paid in full on the Anticipated Repayment
Date, with each such payment being equal to or
greater than the amount of the corresponding
installment of principal, interest and, if
applicable, the fee of the Servicer required to be
paid hereunder and/or under the Note (the "DEFEASANCE
COLLATERAL"), each of which shall be duly endorsed by
the holder thereof as directed by Beneficiary or
accompanied by a written instrument of transfer in
form and substance wholly satisfactory to Beneficiary
(including, without limitation, such instruments as
may be required by the depository institution holding
such securities to effectuate book-entry transfers
and pledges through the book-entry facilities of such
institution) in order to create a first priority
security interest therein in favor of the Beneficiary
in conformity with all applicable state and federal
laws governing granting of such security interests;
-51-
(B) a pledge and security agreement, in form and
substance satisfactory to Beneficiary in its sole
discretion, creating a first priority security
interest in favor of Beneficiary in the Defeasance
Collateral (the "DEFEASANCE SECURITY AGREEMENT"),
which shall provide, among other things, that any
excess received by Beneficiary from the Defeasance
Collateral over the amounts payable by Trustor
hereunder shall be refunded to Trustor promptly after
each Payment Date;
(C) a certificate of Trustor certifying that all of the
requirements set forth in this Paragraph 57 have been
satisfied;
(D) an opinion of counsel for Trustor in form and
substance and delivered by counsel satisfactory to
Beneficiary in its sole discretion stating, among
other things, that (1) Beneficiary has a perfected
first priority security interest in the Defeasance
Collateral and that the Defeasance Security Agreement
is enforceable against Trustor in accordance with its
terms; and (2) that any REMIC Trust formed pursuant
to a securitization will not fail to maintain its
status as a "real estate mortgage investment conduit"
within the meaning of Section 860D of the Code as a
result of such defeasance;
(E) Trustor shall deliver evidence in writing from the
applicable Rating Agencies to the effect that the
collateral substitution will not result in a
downgrading, withdrawal or qualification of the
respective ratings in effect immediately prior to
such defeasance event for any securities issued in
connection with the securitization which are then
outstanding;
(F) a certificate from a firm of independent public
accountants acceptable to Beneficiary certifying that
the Defeasance Collateral is sufficient to satisfy
the provisions of paragraph A above; and
(G) such other certificates, documents or instruments as
Beneficiary may reasonably require.
(b) Upon compliance with the requirements of this paragraph,
the Trust Property shall be released from the lien of the this Deed of Trust and
the other Loan Documents, and the Defeasance Collateral shall constitute the
only collateral which shall secure the Note and all other obligations under the
Loan Documents. Beneficiary will, at Trustor's expense, execute and deliver any
agreements reasonably requested by Trustor to release the lien of the Deed of
Trust from the Trust Property. Trustor, pursuant to the Defeasance Security
-52-
Agreement, shall authorize and direct that the payments received from Defeasance
Collateral be made directly to Beneficiary and applied to satisfy the
obligations of the Trustor under the Note.
(c) Upon the release of the Trust Property in accordance with
this paragraph, Trustor may (or at the option of Beneficiary, shall) assign all
its obligations under the Note, together with the pledged Defeasance Collateral,
to a successor entity designated by Trustor and approved by Beneficiary in its
sole discretion. Such successor entity shall execute an assumption agreement in
form and substance satisfactory to Beneficiary in its sole discretion pursuant
to which it shall assume Trustor's obligations under the Note and the Defeasance
Security Agreement. As conditions to such assignment and assumption, Trustor
shall (i) deliver to Beneficiary an opinion of counsel in form and substance and
delivered by counsel satisfactory to Beneficiary in its sole discretion stating,
among other things, that such assumption agreement is enforceable against
Trustor and such successor entity in accordance with its terms and that the
Note, the Defeasance Security Agreement and the other Loan Documents, as so
assumed, are enforceable against such successor entity in accordance with their
respective terms, and (ii) pay all costs and expenses incurred by Beneficiary or
its agents in connection with such assignment and assumption (including, without
limitation, the review of the proposed transferee and the preparation of the
assumption agreement and related documentation). Upon such assumption, Trustor
shall be relieved of its obligations hereunder, under the other Loan Documents
and under the Defeasance Security Agreement other than those obligations which
are specifically intended to survive the termination; satisfaction or assignment
of this Deed of Trust or the exercise of Beneficiary's rights and remedies
hereunder.
(d) Upon the release of the Trust Property in accordance with
this paragraph, Trustor shall have no further right to prepay the Note pursuant
to the other provisions of this paragraph or otherwise. In connection with the
conditions set forth in subparagraph (a)(iii)(A) above, Trustor hereby appoints
Beneficiary as its agent and attorney-in-fact for the purpose of purchasing the
Defeasance Collateral with funds provided by the Trustor. Trustor shall pay any
and all expenses incurred in the purchase of the Defeasance Collateral and any
revenue, documentary stamp or intangible taxes or any other tax or charge due in
connection with the transfer of the Note or otherwise required to accomplish the
agreements of this paragraph.
(e) For purposes of this Deed of Trust the Note and the other
Loan Documents, the term "YIELD MAINTENANCE PREMIUM" shall mean the amount, if
any, which, when added to the remaining principal amount of the Note, will be
sufficient to purchase the Defeasance Collateral.
58. CASH MANAGEMENT AGREEMENT. On or before the date hereof Trustor
covenants and agrees to enter into one or more servicing account agreements and
lockbox servicing agreements acceptable to Beneficiary between Trustor, Manager,
Beneficiary and one or more certain financial institutions (together with any
modification, amendment, substitution or replacement thereof, hereinafter
collectively referred to as the "CASH MANAGEMENT AGREEMENT"). During any Sweep
Period, all Rents shall be applied as set forth in the Cash Management Agreement
and the escrows and reserves required hereunder shall be
-53-
funded as provided therein. The Trustor shall pay all costs and expenses
required under the Cash Management Agreement. Upon the occurrence of an Event of
Default, Beneficiary may apply any sums then held pursuant to the Cash
Management Agreement to the payment of the Debt in any order in its sole
discretion. Until expended or applied, amounts held pursuant to the Cash
Management Agreement shall constitute additional security for the Debt.
59. MISCELLANEOUS.
(a) Any consent or approval by Beneficiary in any single
instance shall not be deemed or construed to be Beneficiary's consent or
approval in any like matter arising at a subsequent date, and the failure of
Beneficiary to promptly exercise any right, power, remedy, consent or approval
provided herein or at law or in equity shall not constitute or be construed as a
waiver of the same nor shall Beneficiary be estopped from exercising such right,
power, remedy, consent or approval at a later date. Any consent or approval
requested of and granted by Beneficiary pursuant hereto shall be narrowly
construed to be applicable only to Trustor and the matter identified in such
consent or approval and no third parry shall claim any benefit by reason
thereof, and any such consent or approval shall not be deemed to constitute
Beneficiary a venturer or partner with Trustor nor shall privity, of contract be
presumed to have been established with any such third party. If Beneficiary
deems it to be in its best interest to retain assistance of persons, firms or
corporations (including, without limitation, attorneys, title insurance
companies, appraisers, engineers and surveyors) with respect to a request for
consent or approval, Trustor shall reimburse Beneficiary for all costs
reasonably incurred in connection with the employment of such persons, firms or
corporations.
(b) Trustor covenants and agrees that during the Term, unless
Beneficiary shall have previously consented in writing, (a) Trustor will take no
action that would cause it to become an "EMPLOYEE BENEFIT PLAN" as defined in 29
C.F.R. Section 2510.3-101, or "ASSETS OF A GOVERNMENTAL PLAN" subject to
regulation under the state statutes, and (b) Trustor will not sell, assign or
transfer the Trust Property, or any portion thereof or interest therein, to any
transferee that does not execute and deliver to Beneficiary its written
assumption of the obligations of this covenant. Trustor further covenants and
agrees to protect, defend, indemnify and hold Beneficiary harmless from and
against all loss, cost, damage and expense (including without limitation, all
attorneys' fees and excise taxes, costs of correcting any prohibited transaction
or obtaining an appropriate exemption) that Beneficiary may incur as a result of
Trustor's breach of this covenant. This covenant and indemnity shall survive the
extinguishment of the lien of this Deed of Trust by foreclosure or action in
lieu thereof; furthermore, the foregoing indemnity shall supersede any
limitations on Trustor's liability under any of the Loan Documents.
(c) If there is more than one party comprising Trustor then
the obligations and liabilities of each party under this Deed of Trust shall be
joint and several.
(d) The Loan Documents contain the entire agreement between
Trustor and Beneficiary relating to or connected with the Loan. Any other
agreements relating
-54-
to or connected with the Loan not expressly set forth in the Loan Documents are
null and void and superseded in their entirety by the provisions of the Loan
Documents.
(e) Trustor hereby covenants and agrees not to commit, permit
or suffer to exist any act, omission or circumstance affording such right of
forfeiture. In furtherance thereof, Trustor hereby indemnifies Beneficiary and
agrees to defend and hold Beneficiary harmless from and against any loss, damage
or injury by reason of the breach of the covenants and agreements or the
representations and warranties set forth in this paragraph. Without limiting the
generality of the foregoing, the filing of formal charges or the commencement of
proceedings against Trustor or all or any part of the Trust Property under any
federal or state law for which forfeiture of the Trust Property or any part
thereof or of any monies paid in performance of Trustor's obligations under the
Loan Documents is a potential result, shall, at the election of Beneficiary,
constitute an Event of Default hereunder without notice or opportunity to cure.
(f) Trustor acknowledges that, with respect to the Loan,
Trustor is relying solely on its own judgment and advisors in entering into the
Loan without relying in any manner on any statements, representations or
recommendations of Beneficiary or any parent, subsidiary or affiliate of
Beneficiary. Trustor acknowledges that Beneficiary engages in the business of
real estate financings and other real estate transactions and investments which
may be viewed as adverse to or competitive with the business of the Trustor or
its affiliates. Trustor acknowledges that it is represented by competent counsel
and has consulted counsel before executing the Loan Documents.
(g) Trustor covenants and agrees to pay Beneficiary upon
receipt of written notice from Beneficiary, all reasonable costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by Beneficiary
in connection with (i) the preparation, negotiation, execution and delivery of
this Deed of Trust and the other Loan Documents; (ii) Trustor's performance of
and compliance with Trustor's respective agreements and covenants contained in
this Deed of Trust and the other Loan Documents on its part to be performed or
complied with after the date hereof; (iii) Beneficiary's performance and
compliance with all agreements and conditions contained in this Deed of Trust
and the other Loan Documents on its part to be performed or complied with after
the date hereof; (iv) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Deed of Trust and the other Loan Documents; and (v) the filing and
recording fees and expenses, title insurance fees and expenses, and other
similar expenses incurred in creating and perfecting the lien in favor of
Beneficiary pursuant to this Deed of Trust and the other Loan Documents.
(h) This Deed of Trust shall be governed by and construed in
accordance with the laws of the State in which the Premises are located and the
applicable laws of the United States of America.
-55-
60. MANAGEMENT OF THE TRUST PROPERTY.
Trustor shall maintain the Management Agreement for the
operation of the Trust Property in full force and effect and timely perform all
of Trustor's obligations thereunder and enforce performance of all obligations
of the Manager thereunder, and not permit the termination or amendment of such
Management Agreement unless the prior written consent of Beneficiary is first
obtained. Trustor will enter into and cause the Manager to enter into an
assignment and subordination of such Management Agreement in form satisfactory
to Beneficiary, assigning and subordinating the Manager's interest in the Trust
Property and all fees and other rights of the manager pursuant to such
Management Agreement to the rights of Beneficiary. Upon an Event of Default,
Trustor at Beneficiary's request made at any time while such Event of Default
continues, shall terminate the Management Agreement and replace the Manager with
a Manager approved by Beneficiary. In addition, if within forty-five (45) days
before the end of each calendar quarter the Trustor does not provide evidence of
the achievement of a Debt Service Coverage Ratio of not less than 1.15 to 1 (the
"REQUIRED DSCR") Trustor, at Beneficiary's request made at any time such
Required DSCR is not maintained, shall terminate the Management Agreement and
replace the Manager with Manager approved by Beneficiary.
61. SALE OF NOTES AND SECURITIZATION.
Trustor acknowledges that Beneficiary and its successors and
assigns may (i) sell this Deed of Trust, the Note and other Loan Documents to
one or more investors as a whole loan, (ii) participate the Loan secured by this
Deed of Trust to one or more investors, (iii) deposit this Deed of Trust, the
Note and other Loan Documents with a trust, which trust may sell certificates to
investors evidencing an ownership interest in the trust assets, or (iv)
otherwise sell the Loan or interest therein to investors (the transactions
referred to in clauses (i) through (iv) are hereinafter each referred to as
"SECONDARY MARKET TRANSACTION"). Trustor shall cooperate with Beneficiary in
effecting any such Secondary Market Transaction and shall cooperate to implement
all requirements imposed by any Rating Agency involved in any Secondary Market
Transaction. Trustor, however, shall not be required to modify any documents
evidencing or securing the Loan which would modify (A) the interest rate payable
under the Note, (B) the stated maturity of the Note, (C) the amortization of
principal of the Note, (D) the non-recourse provisions of the Loan or (E) any
other material economic term of the Loan. Trustor shall provide such
information, legal opinions and documents relating to Trustor, Guarantor, if
any, the Trust Property and any tenants of the Improvements as Beneficiary may
reasonably request in connection with such Secondary Market Transaction. In
addition, Trustor shall make available to Beneficiary all information
concerning its business and operations that Beneficiary may reasonably request.
Beneficiary shall be permitted to share all such information with the investment
banking firms, Rating Agencies, accounting firms, law firms and other
third-party advisory firms involved with the Loan and the Loan Documents or the
applicable Secondary Market Transaction. It is understood that the information
provided by Trustor to Beneficiary may ultimately be incorporated into the
offering documents for the Secondary Market Transaction and thus various
investors may also see some or all of the information. Beneficiary and all of
the
-56-
aforesaid third-party advisors and professional firms shall be entitled to rely
on the information supplied by, or on behalf of, Trustor and Trustor indemnifies
Beneficiary as to any losses, claims, damages or liabilities that arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such information or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated in such information or necessary in order to make the statements in such
information, or in light of the circumstances under which they were made, not
misleading. Beneficiary may publicize the existence of the Loan in connection
with its marketing for a Secondary Market Transaction or otherwise as part of
its business development.
62. SERVICER. At the option of Beneficiary, the Loan may be
serviced by a servicer/trustee (the "SERVICER") selected by Beneficiary and
Beneficiary may delegate all or any portion of its responsibilities under this
Deed of Trust and the other Loan Documents to the Servicer pursuant to a
servicing agreement (the "SERVICING AGREEMENT") between Beneficiary and
Servicer. Trustor shall be responsible for any reasonable set-up fees or any
other initial costs relating to or arising under the Servicing Agreement and
shall be responsible for payment of the set-up costs and monthly servicing fee
due to the Servicer under the Servicing Agreement, not to exceed 10 basis points
per annum on the outstanding principal balance of the Loan.
-57-
PART II
MARYLAND SPECIFIC PROVISIONS
63. PRINCIPLES OF CONSTRUCTION. In the event of any inconsistencies
between the terms and provisions of Part I and Part II of this Deed of Trust,
the terms and provisions of Part II shall govern and control.
64. MARYLAND.
(a) Financing Statement. This Deed of Trust shall also be
effective as a financing statement covering minerals or the like (including oil
and gas) and accounts subject to Subsection (3) of Section 9-103 of the Maryland
Uniform Commercial Code, as amended, and similar provisions (if any) of the
Uniform Commercial Code as enacted in any other state where the Trust Estate is
situated which will be financed at the wellhead or minehead of the xxxxx or
mines located on the Trust Estate and is to be filed for record in the real
estate records of each county where any part of the Trust Estate is situated.
This Deed of Trust shall also be effective as a financing statement covering any
other property and may be filed in any other appropriate filing or recording
office.
(b) Release. If and when Grantor has paid all of the
Obligations, as the same becomes due and payable, and all of the covenants,
warranties, undertakings and agreements in this Deed of Trust are kept and
performed, and all obligations, if any, of Beneficiary for future advances have
been terminated, then, and in that event only, all rights under this Deed of
Trust shall terminate (except to the extent expressly provided herein with
respect to indemnifications, representations and warranties and other rights
which are to continue following the release hereof), and the Trustee, upon
request by Beneficiary, will provide a release of this Deed of Trust to Grantor.
Grantor shall be responsible for the recordation of such release and payment of
any recording costs associated therewith.
(c) Rights and Remedies of Trustee.
(i) In addition to any other rights available at law or in
equity, following an Event of Default hereunder, Trustee may take
possession of and sell the Trust Estate, or any part thereof requested
by Beneficiary to be sold, and in connection therewith Grantor hereby
(A) assents to the passage of a decree for the sale of the Trust Estate
by the equity court having jurisdiction, and (B) authorizes and
empowers Trustee to take possession of and sell (or in case of the
default of any purchaser to resell) the Trust Estate, or any part
thereof, all in accordance with the laws or rules of court of the State
of Maryland relating to deeds of trust, including any amendments
thereof, or additions thereto, which do not materially change or impair
the remedy. In connection with any foreclosure, Beneficiary and/or
Trustee may (y) procure such title reports, surveys, tax histories and
appraisals as they deem necessary, and (z) make such repairs and
additions to the Trust Estate as they deem advisable, subject to the
terms and provisions contained in the Lease, all of which shall
constitute Expenses (hereinafter defined). In the case of any sale
under this Deed of Trust, by virtue of judicial
-58-
proceedings or otherwise, the Trust Estate may be sold as an entirety
or in parcels, by one sale or by several sales, and any fixtures or
collateral encumbered by this Deed of Trust may be sold at the same
sale as the Trust Estate or in one or more sales, as may be deemed by
Trustee to be appropriate and without regard to any right of Grantor
any other person to the marshalling of assets, for cash, on credit or
for other property, for immediate or future delivery, and for such
price or prices and on such terms having first given such notice prior
to the sale of such time, place and terms by publication in at least
one newspaper published or having general circulation in the county or
counties in which the Trust Estate is located or at such time or times
as may be required by the laws of the State of Maryland or rule of
court of the State of Maryland, and such other times and by such other
methods, if any, as Trustee, in its sole discretion, shall deem
advantageous and proper. "Expenses" means all costs and expenses of any
nature whatsoever incurred at any time and from time to time (whether
before or after an Event of Default) by Beneficiary or Trustee in
exercising or enforcing any rights, powers and remedies provided in
this Deed of Trust or any of the other Loan Documents, including,
without limitation, attorneys' fees, court costs, receivers' fees,
management fees and costs incurred in the repair, maintenance and
operation of, or taking possession of the Trust Estate, subject to the
terms and provisions contained in the Lease as to the costs for
maintenance and repair, or selling, the Trust Estate.
(ii) Any sale hereunder may be made at public auction, at such
time or times, at such place or places, and upon such terms and
conditions and after such previous public notice as Trustee shall deem
appropriate and advantageous and as required by the laws of the State
of Maryland.
(iii) Upon the terms of such sale being complied with, Trustee
shall convey to, and at the cost of, the purchaser or purchasers the
interest of Grantor in the Trust Estate so sold, free and discharged of
and from all estate, title or interest of Grantor, at law or in equity,
such purchaser or purchasers being hereby discharged from all liability
to see to the application of the purchase money.
(iv) Beneficiary and any affiliate thereof may be a purchaser
of the Trust Estate or of any part thereof or of any interest therein
at any public sale thereof, whether pursuant to foreclosure or power of
sale or otherwise hereunder, without forfeiting its right to collect
any deficiency from Grantor; and Beneficiary may apply upon the
purchase price the Obligations secured hereby owing to Beneficiary.
Beneficiary, upon any such purchase, shall acquire good title to the
properties so purchased, free of the lien of this Deed of Trust and
free of all rights of redemption in Grantor and free of all liens and
encumbrances subordinate to this Deed of Trust.
(d) Application of Foreclosure Sale Proceeds. The proceeds of such
sale or sales under this Deed of Trust, whether under the assent to a decree,
the power of sale, or by equitable foreclosure, shall be held by Trustee and
applied as follows: FIRST (A) all Expenses incurred in connection with such sale
or in preparing the Trust Estate for such sale and of obtaining possession
including, among other things, counsel fees reasonably incurred
-59-
shall be allowed and paid out of the proceeds of such sale or sales as
the court having jurisdiction may deem proper, (B) the Trustee's
Commission (hereinafter defined) and expenses and (C) all taxes levies,
assessments or other charges relating to the Trust Estate which have or
in the opinion of Trustee may have, priority over the lien of this Deed
of Trust, including the pro rata portion thereof applicable to the
taxable period during which any payment is made pursuant to this
subsection; SECOND, to pay all of the Obligations and all interest then
due and accrued thereon, which shall include interest through the date
of ratification of the auditor's account; THIRD, to pay the amount of
any liens of record inferior to this Deed of Trust, together with
lawful interest, and lawful claims of third parties against the
proceeds of any sale; and LASTLY, to pay the surplus, if any, to
Grantor or any person or entity entitled thereto unless otherwise
required by law or directed by a court of competent jurisdiction. In
the event that the proceeds of any such sale or sales, together with
all other monies at the time held by Trustee under this Deed of Trust,
are insufficient to pay the foregoing costs and expenses, Beneficiary
may, at its sole option, advance such sums as Beneficiary in its sole
and absolute discretion shall determine for the purpose of paying all
or any part of such costs and expenses, and all such sums so advanced
shall be (A) a lien against the Trust Estate, (B) added to the amount
due under the Note and secured by this Deed of Trust, and (C) payable
on demand with interest at the rate of interest applicable to the
principal balance of the Note, from and including the date each such
advance is made. In any event, Grantor shall be liable to Beneficiary
for any deficiency if the proceeds of any such sale or sales are
insufficient to pay, in full, all amounts to be distributed pursuant to
the FIRST clause above. Grantor shall pay to Trustee a commission in
the amount of two and one half percent (2.5%) of the then-outstanding
debt secured hereby if the Trust Estate is advertised for sale under
the provisions of this Deed of Trust and is not sold, and the Grantor
shall also pay or reimburse Trustee for all of Trustee's expenses and
disbursements hereunder regardless of whether the Trust Estate is sold
(the "Trustee's Commission").
65. CROSS-DEFAULT; CROSS-COLLATERALIZATION; WAIVER OF MARSHALING OF
ASSETS.
(a) Trustor acknowledges that Beneficiary has made the Loan to
Trustor upon the security of its collective interest in the Trust Property and
in various other "Trust Properties" described in the three other Deeds of Trust
(collectively the "Deeds of Trust" and all of the Trust Property described in
the Deeds of Trust is hereinafter the "Properties") simultaneously delivered by
Trustor to or for the benefit of Beneficiary and in reliance upon the aggregate
of the Properties taken together being of greater value as collateral security
than the sum of such Properties taken separately. Trustor agrees that the Deeds
of Trust are and will be cross-collateralized and cross-defaulted with each
other so that (i) an Event of Default under any of the Deeds of Trust shall
constitute an Event of Default under each of the other Deeds of Trust which
together secure the Note; (ii) an Event of Default under the Note shall
constitute an Event of Default under each Deed of Trust; and (iii) each Deed of
Trust shall constitute security for the Note as if a single blanket lien were
placed on all of the Properties as security for the Note.
-60-
(b) To the fullest extent permitted by law, Trustor, for itself and
its successors and assigns, waives all rights to a marshaling of the assets of
Trustor, Trustor's partners and others with interests in Trustor, and of the
Properties, or to a sale in inverse order of alienation in the event of
foreclosure of all or any of the Deeds of Trust, and agrees not to assert any
right under any laws pertaining to the marshaling of assets, the sale in inverse
order of alienation, homestead exemption, the administration of estates of
decedents, or any other matters whatsoever to defeat, reduce or affect the
right of Beneficiary under the Loan Documents to a sale of the Properties for
the collection of the Indebtedness without any prior or different resort for
collection or of the right of Beneficiary to the payment of the Indebtedness out
of the net proceeds of the Properties in preference to every other claimant
whatsoever. In addition, Trustor, for itself and its successors and assigns,
waives (to the extent permitted by law) in the event of foreclosure of any or
all of the Deeds of Trust, any equitable right otherwise available to Trustor
which would require the separate sale of the Properties or require Beneficiary
to exhaust its remedies against any individual Property or any combination of
the Properties before proceeding against any other individual Property or
combination of Properties; and further in the event of such foreclosure Trustor
does hereby expressly consent to and authorize, at the option of the
Beneficiary, the foreclosure and sale either separately or together of any
combination of the Properties.
-61-
IN WITNESS WHEREOF, Trustor has executed this instrument the day
and year first above written.
TRUSTOR:
FPR HOLDINGS LIMITED PARTNERSHIP,
a Delaware limited partnership
By: FPR-GP HOLDINGS. Inc.,
a Delaware corporation,
General Partner
By: /s/ XXXXXXX X. XXXXXXXXX
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
ACKNOWLEDGMENT
STATE OF NEW YORK )
) TO WIT:
COUNTY OF NEW YORK )
I, Xxxxx X. Xxxxxxx, a Notary Public in and for the State and County
aforesaid, do hereby certify that Xxxxxxx X. Xxxxxxxxx, the President of
FPR-GP HOLDINGS, INC., a Delaware corporation, the general partner of
FPR HOLDINGS LIMITED PARTNERSHIP, a Delaware limited partnership, being
authorized to do so, has executed the foregoing and annexed document on behalf
of the limited partnership as the act and deed of said general partnership for
the purposes therein contained by signing the name of said corporation as the
authorized general partner thereof.
GIVEN UNDER MY HAND AND OFFICIAL SEAL this 22nd day of December, 1997.
/s/ XXXXX X. XXXXXXX
-------------------------------------
Notary Public
Xxxxx X. Xxxxxxx
Notary Public, State of New York
No. 00-0000000
Qualified in Richmond County
Certificate filed New York County
Commission Expires March 30, 1998
EXHIBIT A
All that certain lot or parcel of land situate and lying in Xxxxxx County,
Maryland, and more particularly described as follows:
Parcel M-1 as shown on plat entitled "Revision Plat Meadowridge Business Park,
Parcels K-1 and M-1; A Resubdivision of Parcels K, M and O Meadowridge Business
Park Sheet 4 of 7 record plat 9044" which Plat is recorded among the Land
Records of Xxxxxx County as Plat No. 9179.
Tax ID. No.: 01-233645
ATTORNEY'S CERTIFICATE
I HEREBY CERTIFY that the within instrument was prepared by or under
the supervision of the undersigned, an attorney duly admitted to practice before
the Court of Appeals of Maryland.
/s/ XXXXXXX X. XXXXX, XX.
-------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
