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EXHIBIT 10.24
Re:
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
A Professional Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
DEED OF TRUST AND SECURITY AGREEMENT
AND FIXTURE FILING WITH ASSIGNMENT OF LEASES AND RENTS
Cover Sheet
Dated as of April 20, 2000
Trustor: FELCOR/MM S-7 HOLDINGS, L.P., a Delaware
limited partnership
(Hereinafter sometimes "Borrower")
Trustor's c/o FelCor Lodging Trust Incorporated
Notice Address: ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trustee:
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Trustee's
Notice Address: -------------------------------
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Beneficiary: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY,
a Massachusetts corporation, and TEACHERS
INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA, a New York corporation
(Hereinafter sometimes
collectively "Lender")
MassMutual c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and Company Incorporated
Notice Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Senior Managing Director
Mortgage Portfolio Department
Real Estate Investment Group
TIAA Notice Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Director Portfolio Management
Mortgage and Real Estate
Loan Amount: $____________ evidenced by two (2) promissory
notes, each in the original principal amount of
$____________
Maturity Date: May 1, ▇▇▇▇
▇▇▇▇▇:
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Record Owner of the Land FELCOR/MM S-7 HOLDINGS, L.P., a Delaware limited
(as defined herein): partnership
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DEED OF TRUST AND SECURITY AGREEMENT
AND FIXTURE FILING WITH ASSIGNMENT OF LEASES AND RENTS
TABLE OF CONTENTS
PAGE
----
GRANTING CLAUSES..................................................................................................1
ARTICLE I - Definition of Terms...................................................................................4
ARTICLE II - Covenants of Borrower...............................................................................16
Section 2.01. - Payment of the Indebtedness......................................................................16
Section 2.02. - Title to the Mortgaged Property..................................................................16
Section 2.03. - Maintenance of the Mortgaged Property............................................................17
Section 2.04. - Insurance; Restoration...........................................................................17
Section 2.05. - Condemnation.....................................................................................23
Section 2.06. - Impositions......................................................................................23
Section 2.07. - Deposits.........................................................................................24
Section 2.08. - Mortgage Taxes...................................................................................25
Section 2.09. - Loan Documents Authorized........................................................................25
Section 2.10. - Maintenance of Existence.........................................................................26
Section 2.11. - Payment of Liens.................................................................................26
Section 2.12. - Costs of Defending and Upholding the Lien........................................................27
Section 2.13. - Costs of Enforcement.............................................................................27
Section 2.14. - Interest on Advances and Expenses................................................................27
Section 2.15. - Indemnification..................................................................................28
Section 2.16. - Financial Statements; Records....................................................................28
Section 2.17. - Prohibition Against Conveyances and Encumbrances.................................................29
Section 2.18. - Estoppel Certificates............................................................................31
Section 2.19. - Assignment of Leases and Property Income.........................................................32
Section 2.20. - Environmental Matters; Warranties; Notice; Indemnity.............................................33
Section 2.21. - Environmental Matters; Remedial Work.............................................................36
Section 2.22. - Environmental Matters; Inspection................................................................36
Section 2.23. - Management.......................................................................................37
Section 2.24. - ERISA............................................................................................37
Section 2.25. - Operating Agreements.............................................................................38
Section 2.26. - Single-Purpose Entity............................................................................38
ARTICLE III - Security Agreement.................................................................................38
Section 3.01. - Warranties, Representations and Covenants of Borrower............................................38
Section 3.02. - Financing Statements.............................................................................40
Section 3.03. - Addresses........................................................................................40
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ARTICLE IV - Default and Remedies................................................................................40
Section 4.01. - Events of Default................................................................................40
Section 4.02. - Remedies.........................................................................................42
Section 4.03. - General Provisions Regarding Remedies............................................................44
ARTICLE V - Trustee..............................................................................................53
Section 5.01. - Certain Actions of Trustee.......................................................................53
Section 5.02. - Reconveyance.....................................................................................53
Section 5.03. - Trustee's Covenants and Compensation.............................................................53
Section 5.04. - Substitution of Trustee..........................................................................53
Section 5.05. - Resignation of Trustee...........................................................................53
Section 5.06. - Ratification of Acts of Trustee..................................................................53
ARTICLE VI - Miscellaneous.......................................................................................54
Section 6.01. - Notices..........................................................................................54
Section 6.02. - Binding Obligations; Joint and Several...........................................................54
Section 6.03. - Captions.........................................................................................54
Section 6.04. - Further Assurances...............................................................................54
Section 6.05. - Severability.....................................................................................55
Section 6.06. - Borrower's Obligations Absolute..................................................................55
Section 6.07. - Amendments.......................................................................................55
Section 6.08. - Other Loan Documents and Schedules...............................................................55
Section 6.09. - Legal Construction...............................................................................56
Section 6.10. - Merger...........................................................................................56
Section 6.11. - Time of the Essence..............................................................................56
Section 6.12. - Transfer of Loan.................................................................................56
Section 6.13. - Satisfaction.....................................................................................56
Section 6.14. - Defeasance Requirements..........................................................................57
Section 6.15. - Partial Release..................................................................................58
Section 6.16. - Substitution of Collateral.......................................................................59
Signature Page...................................................................................................62
Schedule A - Description of Land
Schedule B - Permitted Encumbrances
Exhibit A - Example for Debt Service Coverage Ratio - Mortgaged Properties
Exhibit B - Example for Debt Service Coverage Ratio - Remaining Properties
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DEED OF TRUST AND SECURITY AGREEMENT
AND FIXTURE FILING WITH ASSIGNMENT OF LEASES AND RENTS
THIS DEED OF TRUST AND SECURITY AGREEMENT AND FIXTURE FILING WITH ASSIGNMENT OF
LEASES AND RENTS (this "Deed of Trust") is made as of April 20, 2000, by and
between FELCOR/MM S-7 HOLDINGS, L.P., a Delaware limited partnership having an
office at c/o FelCor Lodging Trust Incorporated, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Trustor" and "Borrower"), in favor of
___________________, having an office at ___________________________________
("Trustee"), for the use and benefit of MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, a Massachusetts corporation having an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("MassMutual") and TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA, a New York corporation having an office at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("TIAA") (MassMutual and TIAA are
collectively referred to herein as "Beneficiary" and "Lender").
GRANTING CLAUSES
For good and valuable consideration and to secure and enforce pari passu an
indebtedness in the principal sum of _________________________________
($_____________) lawful money of the United States, to be paid according to (i)
that certain Promissory Note of even date herewith from Borrower to MassMutual
in the principal sum of $_______________ and by this reference made a part
hereof (said Promissory Note, as the same may hereafter be amended, modified,
consolidated or extended, the "MassMutual Note"), and (ii) that certain
Promissory Note of even date herewith from Borrower to TIAA in the principal sum
of $______________ and by this reference made a part hereof (said Promissory
Note as the same may hereafter be amended, modified, consolidated or extended,
the "TIAA Note") (the MassMutual Note and the TIAA Note being hereinafter
collectively referred to as the "Note"), together with all other obligations and
liabilities due or becoming due to Lender pursuant to the Loan Documents
(hereinafter defined) and, all amounts, sums and expenses paid hereunder by or
payable to Lender according to the terms hereof, and all other covenants,
obligations and liabilities of Borrower under the Note, this Deed of Trust, the
Assignment (hereinafter defined) and any other instrument evidencing, securing
or executed in connection with the loan evidenced by the Note (all of the
foregoing instruments, collectively, the "Loan Documents"), and together with
all interest on said indebtedness, obligations, liabilities, amounts, sums,
Advances (as hereinafter defined) and expenses (all of the foregoing,
collectively, the "Indebtedness"), Borrower has created in favor of Lender a
security interest in and mortgaged, warranted, granted, bargained, sold,
conveyed, assigned, pledged,
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transferred and set over, and does by these presents create a security interest
in and MORTGAGE, WARRANT, GRANT, BARGAIN, SELL, CONVEY, ASSIGN, PLEDGE, TRANSFER
AND SET OVER unto Trustee, as trustee for the benefit of Lender, to its
successors in the trust created by this Deed of Trust, and to its or their
respective assigns forever, in trust, with all POWERS OF SALE and RIGHTS OF
ENTRY AND POSSESSION and all STATUTORY RIGHTS AND COVENANTS in the State
(hereinafter defined), the following property:
The parcel or parcels of land described in Schedule A attached hereto and by
this reference made a part hereof (the "Land");
TOGETHER with the buildings, foundations, structures and improvements (including
fixtures) now or hereafter located on or in the Land (collectively, the
"Improvements");
TOGETHER with all right, title and interest, if any, of Borrower in and to the
streets and roads, opened or proposed, abutting the Land, all strips and gores
within or adjoining the Land, the air space and right to use the air space above
the Land, all rights of ingress and egress to and from the Land, all easements,
rights of way, reversions, remainders, estates, rights, titles, interests,
privileges, servitudes, tenements, hereditaments, and appurtenances now or
hereafter affecting the Land or the Improvements, all royalties and rights and
privileges appertaining to the use and enjoyment of the Land or the
Improvements, including all air, lateral support, streets, alleys, passages,
vaults, drainage, water, oil, gas and mineral rights, development rights, all
options to purchase or lease, and all other interests, estates or claims, in law
or in equity, which Borrower now has or hereafter may acquire in or with respect
to the Land or the Improvements (collectively, the "Appurtenances");
The Land, the Improvements and the Appurtenances are hereinafter sometimes
collectively referred to as the "Premises";
TOGETHER with all of Borrower's possessory or title interest in and to all
equipment, fittings, furniture, furnishings, appliances, apparatus, and
machinery now or hereafter installed in or located upon the Premises and all
building materials, supplies and equipment now or hereafter delivered to the
Premises and intended to be installed therein or located thereon; all of
Borrower's possessory or title interest in and to all fixtures, other goods and
personal property of whatever kind and nature now contained on or in or
hereafter placed on or in the Premises and used or to be used in connection with
the letting or operation thereof (but specifically excluding inventory and other
personal property owned by any lessee under a Lease) and all renewals or
replacements of any of the foregoing property or articles in substitution
thereof (collectively, the "Equipment");
TOGETHER with all right, title and interest of Borrower in and under all present
or future accounts, (including trade accounts, accounts receivables, credit card
receivables, and rights to payments for goods and services, including food,
beverages and other items sold or leased, whether or not
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earned by performance), escrows, documents, instruments, chattel paper, and
general intangibles, as the foregoing terms are defined in the Code (hereinafter
defined), and all contract rights, including, without limitation, casualty
insurance policies and liability insurance policies (irrespective of whether
such policies are required to be obtained or maintained in force pursuant to
this Deed of Trust or other Loan Documents), trade names, trademarks,
servicemarks, logos, copyrights, goodwill, franchises, books, records, plans,
specifications, permits, licenses, approvals, actions and causes of action which
now or hereafter relate to, are derived from or are used in connection with the
Premises or the use, operation, maintenance, occupancy or enjoyment thereof or
the conduct of any business or activities thereon (collectively, the
"Intangibles");
TOGETHER with all right, title and interest of Borrower in and under all leases,
lettings, tenancies, franchises and licenses of the Premises or any part thereof
now or hereafter entered into and all amendments, extensions, renewals and
guaranties thereof, all security therefor, and all moneys payable thereunder
(collectively, the "Leases");
TOGETHER with all room rentals and charges of room rentals, room deposits,
rents, income, accounts, receivables, issues, profits, security deposits and
other benefits to which Borrower may now or hereafter be entitled from the
Premises, the Equipment or the Intangibles or under or in connection with the
Leases (collectively, the "Property Income"); and
TOGETHER with all proceeds, judgments, claims, compensation, awards of damages
and settlements pertaining to or resulting from or in lieu of any condemnation
or taking of the Premises by eminent domain or any casualty loss or damage to
any of the Premises, the Equipment, the Intangibles, the Leases or the Property
Income, and including also, without limitation, the right to assert, prosecute
and settle claims arising out of or pertaining to such condemnation or taking or
such casualty loss under insurance policies constituting an Intangible and to
apply for and receive payments of proceeds under such insurance policies and in
any condemnation or taking, the right to apply for and receive all refunds with
respect to the payment of property taxes and assessments and all other proceeds
from the conversion, voluntary or involuntary, of the Premises, the Equipment,
the Intangibles, the Leases or the Property Income, or any part thereof, into
cash or liquidated claims. Collectively, all of the foregoing, are herein
referred to as the "Proceeds."
The Equipment, the Intangibles, the Leases, the Property Income and the Proceeds
are hereinafter sometimes collectively referred to as the "Collateral." The
Premises and the Collateral are hereinafter sometimes collectively referred to
as the "Mortgaged Property."
TO HAVE AND TO HOLD the Mortgaged Property, with all the privileges and
appurtenances to the same belonging, and with the possession and right of
possession thereof, unto Trustee, as trustee for the benefit of Lender as
beneficiary, to its successors in the trust created by this Deed of Trust, and
to its or their successors and assigns forever, in trust, upon the terms and
conditions set forth herein.
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ARTICLE I
Definition of Terms
As used in this Deed of Trust, the terms set forth below shall have the
following meanings:
"Advances" - All sums, amounts or expenses advanced or paid and all
costs reasonable incurred by Lender, as provided in this Deed of Trust or in any
other Loan Document, upon failure of Borrower to pay or perform any obligation
or covenant contained herein or in such other Loan Document.
"Agreement Concerning Primary Lease Agreement" - means that certain
Agreement Concerning Primary Lease Agreement of even date herewith between
[FCH/SH Leasing] [FCH/SH Leasing II] and Lender and consented to by Borrower.
"Allocated Loan Amount" - means the loan amount allocated to each of
the Mortgaged Properties as follows:
Property Loan Amount
-------- -----------
Arizona $27,000,000.00
Florida $13,000,000.00
Georgia $18,000,000.00
Illinois $25,000,000.00
Kentucky $ 7,000,000.00
Pennsylvania $34,000,000.00
Vermont $21,000,000.00
"Annual Debt Service" - means all principal, interest and other
payments due under the Note and any Related Note for any calendar year.
"Application" - means that certain MassMutual Application for Real
Estate Loan dated February 23, 2000 executed by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"Appurtenances" - See Granting Clauses.
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["Arizona Loan Documents" - means the Arizona Note, the Arizona
Mortgage and any other instrument evidencing, securing or executed in connection
with the loan evidenced by the Arizona Note.
"Arizona Mortgage" - means that certain Deed of Trust and Security
Agreement and Fixture Filing With Assignment of Leases and Rents of even date
herewith securing the Arizona Note, executed by Borrower for the benefit of
Mortgagee.
"Arizona Note" - means collectively (i) that certain promissory note of
even date herewith in the original principal amount of $13,500,000.00 executed
by Borrower and payable to the order of MassMutual, and (ii) that certain
promissory note of even date herewith in the original principal amount of
$13,500,000.00 executed by Borrower and payable to the order of TIAA.]
"Assignment" - The Assignment of Leases and Rents from Borrower to
Lender of even date herewith.
"Bank"- has the meaning provided in Section 6.17.
"Bankruptcy Proceeding" - Any proceeding, action, petition or filing
under the Federal Bankruptcy Code or any similar state or federal law now or
hereafter in effect relating to bankruptcy, reorganization or insolvency, or the
arrangement or adjustment of debts.
"Beneficiary" - Massachusetts Mutual Life Insurance Company and
Teachers Insurance and Annuity Association of America and their respective
successors and assigns (including any other holders from time to time of the
Note), and also herein called "Lender."
"Borrower" - The party identified and defined as Trustor and Borrower
on the Cover Sheet and in the preamble of this Deed of Trust, any subsequent
owner of the Mortgaged Property, and its successors and assigns.
"Business Day" - Any day other than a Saturday, Sunday or other day on
which national banks in the State are not open for business.
"Closing Date" - means the date of this Deed of Trust.
"Code" - The Uniform Commercial Code of the State.
"Collateral" - See Granting Clauses.
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"Debt Service Coverage Ratio - Mortgaged Properties" - means (i) the
amount of cash flow generated from the Mortgaged Properties available for
payment of principal, interest, escrow deposits and other amounts, if any, due
under the Note and each Related Note, after payment in cash of all other costs,
fees and expenses attributable on an annual basis to the ownership, operation
and maintenance of the Mortgaged Properties (including Impositions, insurance,
and an FF&E reserve equal to four percent (4%) of the aggregate room and suite
income), divided by (ii) the aggregate amount of principal, interest, escrow
deposits and other amounts, if any, due on an annual basis under the Note and
each Related Note; an example of the calculation of which is attached hereto as
Exhibit A.
"Debt Service Coverage Ratio - Remaining Properties" - means (i) the
amount of cash flow generated from the Remaining Properties available for
payment of principal, interest, escrow deposits and other amounts, if any, due
under each remaining Related Note, after payment in cash of all other costs,
fees and expenses attributable on an annual basis to the ownership, operation
and maintenance of the Remaining Properties (including Impositions, insurance,
and an FF&E reserve equal to four percent (4%) of the aggregate room and suite
income), divided by (ii) the aggregate amount of principal, interest, escrow
deposits and other amounts, if any, due on an annual basis under each remaining
Related Note; an example of the calculation of which is attached hereto as
Exhibit B.
"Default" - means the occurrence of any event which, but for the giving
of notice or the passage of time, or both, would be an Event of Default.
"Default Rate" - The per annum interest rate equal to the sum of three
percent (3%) plus the Contract Rate (as defined in the Note).
"Defeasance Deposit" - means the amount that will be sufficient to
purchase U.S. Obligations (A) having maturity dates on or prior to, but as close
as possible to, successive scheduled Payment Dates (after the Defeasance Release
Date) upon which Payment Dates interest and principal payments would be required
under the Note and the Related Notes and (B) in amounts sufficient to pay all
scheduled principal and interest payments on the Note and the Related Notes.
"Defeasance Release Date" - has the meaning provided in Section
6.14(b).
"Defeasance Security Agreement" - has the meaning provided in Section
6.14(d).
"Entity" - means a (i) corporation, if Borrower is listed as a
corporation in the preamble to this Deed of Trust, (ii) limited partnership, if
Borrower is listed as a limited partnership in the preamble to this Deed of
Trust or (iii) limited liability company, if Borrower is listed as a limited
liability company in the preamble to this Deed of Trust.
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"Environmental Law" - Any present or future federal, state or local
law, statute, regulation or ordinance, and any judicial or administrative order
or judgment thereunder, pertaining to health, industrial hygiene or the
environmental or ecological conditions on, under or about the Premises,
including, without limitation, each of the following as to date or hereafter
amended: the Comprehensive Environmental Response, Compensation and Liability
Act; the Resource Conservation and Recovery Act; the Toxic Substances Control
Act; the Federal Water Pollution Control Act (also known as the Clean Water
Act); the Clean Air Act; and the Hazardous Materials Transportation Act; the
Solid Waste Disposal Act; the Safe Drinking Water Act; the Occupational Safety
and Health Act; the Federal Water Pollution Control Act; the Emergency Planning
and Community Right-To-Know Act; the Federal Insecticide, Fungicide and
Rodenticide Act; the National Environmental Policy Act; and, the Rivers and
Harbors Appropriation Act, and all ___________ environmental laws, including
without limitation, those contained in ________________.
"Equipment" - See Granting Clauses; provided, however, the term
"Equipment" shall not include the following personal property owned by [FCH/SH
Leasing] [FCH/SH Leasing II]: all inventories, supplies, and consumables,
including without limitation, food and beverage inventories, inventories of
stationery, forms and office supplies, cleaning and maintenance supplies, guest
room supplies and other operating supplies, and supplies of linens, ▇▇▇▇▇,
uniforms, chinaware, glassware, silverware and serving utensils located at the
Premises.
"ERISA" - The Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" - Any one or more of the events described in Section
4.01 and includes any one or more Monetary Events of Default and/or Non-Monetary
Events of Default.
"FCH/PSH" - means FCH/PSH, L.P., a Pennsylvania limited partnership.
["FCH/SH Leasing" - means FCH/SH Leasing, L.L.C., a Delaware limited
liability company.]
["FCH/SH Leasing II" - means FCH/SH Leasing II, L.L.C., a Delaware
limited liability company.]
"FF&E" - means furnishings, fixtures and equipment.
"Fiscal Year" - The 12 month period commencing on January 1 and ending
on December 31 during each year of the term of this Deed of Trust, or such other
fiscal year of Borrower as Borrower may select from time to time with the prior
consent of Lender. During the first year of the term hereof, Borrower's Fiscal
Year shall be deemed to have commenced on the date of this Deed of Trust and
shall end on the regular Fiscal Year ending date as indicated in the immediately
preceding sentence.
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["Florida Loan Documents" - means the Florida Note, the Florida
Mortgage and any other instrument evidencing, securing or executed in connection
with the loan evidenced by the Florida Note.
"Florida Mortgage" - means that certain Mortgage and Security Agreement
of even date herewith securing the Florida Note, executed by Borrower and
Guarantor for the benefit of Beneficiary.
"Florida Note" - means collectively (i) that certain promissory note of
even date herewith in the original principal amount of $6,500,000.00 executed by
Borrower and payable to the order of MassMutual, and (ii) that certain
promissory note of even date herewith in the original principal amount of
$6,500,000.00 executed by Borrower and payable to the order of TIAA.]
["Georgia Loan Documents" - means the Georgia Note, the Georgia
Mortgage and any other instrument evidencing, securing or executed in connection
with the loan evidenced by the Georgia Note.
"Georgia Mortgage" - means that certain Deed to Secure Debt and
Security Agreement of even date herewith securing the Georgia Note, executed by
Borrower for the benefit of Beneficiary.
"Georgia Note" - means collectively (i) that certain promissory note of
even date herewith in the original principal amount of $9,000,000.00 executed by
Borrower and payable to the order of MassMutual, and (ii) that certain
promissory note of even date herewith in the original principal amount of
$9,000,000.00 executed by Borrower and payable to the order of TIAA.]
"Guarantor" - means FelCor Lodging Limited Partnership, a Delaware
limited partnership, formerly known as FelCor Suites Limited Partnership.
"Hazardous Substance" - Any material, waste or substances (other than
cleaning solvents and other materials used in the ordinary course of hotel
operations and present in normal quantities) which is:
(i) included within the definitions of "hazardous substances,"
"hazardous materials," "toxic substances" or "solid waste" in
or pursuant to any Environmental Law, or subject to regulation
under any Environmental Law;
(ii) listed in the United States Department of Transportation
Optional Hazardous Materials Table, 49 C.F.R. Section 172.101,
as to date or hereafter amended, or in the United States
Environmental Protection Agency List of Hazardous Substances
and Reportable Quantities, 40 C.F.R. Part 302, as to date or
hereafter amended; or
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(iii) explosive, radioactive, asbestos, a polychlorinated biphenyl,
oil or a petroleum product.
["Illinois Loan Documents" - means the Illinois Note, the Illinois
Mortgage and any other instrument evidencing, securing or executed in connection
with the loan evidenced by the Illinois Note.
"Illinois Mortgage" - means that certain Mortgage and Security
Agreement of even date herewith securing the Illinois Note, executed by Borrower
and Guarantor for the benefit of Beneficiary.
"Illinois Note" - means collectively (i) that certain promissory note
of even date herewith in the original principal amount of $12,500,000.00
executed by Borrower and payable to the order of MassMutual, and (ii) that
certain promissory note of even date herewith in the original principal amount
of $12,500,000.00 executed by Borrower and payable to the order of TIAA.]
"Impositions" - All taxes of every kind and nature, sewer rents,
charges for water, for setting or repairing meters and for all other utilities
serving the Premises, and assessments, levies, inspection and license fees and
all other charges imposed upon or assessed against the Mortgaged Property or any
portion thereof (including the Property Income), and any stamp or other taxes
which might be required to be paid, or with respect to any of the Loan
Documents, any of which might, if unpaid, affect the enforceability of any of
the remedies provided in this Deed of Trust or result in a lien on the Mortgaged
Property or any portion thereof, regardless of to whom assessed.
"Indebtedness" - See Granting Clauses.
"Intangibles" - See Granting Clauses.
"Interest Accrual Period" - means each calendar month, provided the
actual number of days elapsed in the calendar month in which the Closing Date
occurs shall also be an Interest Accrual Period.
["Kentucky Loan Documents" - means the Kentucky Note, the Kentucky
Mortgage and any other instrument evidencing, securing or executed in connection
with the loan evidenced by the Kentucky Note.
"Kentucky Mortgage" - means that certain Mortgage and Security
Agreement of even date herewith securing the Kentucky Note, executed by Borrower
and Guarantor for the benefit of Beneficiary.
"Kentucky Note" - means collectively (i) that certain promissory note
of even date herewith in the original principal amount of $3,500,000.00 executed
by Borrower and payable to the order of
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MassMutual, and (ii) that certain promissory note of even date herewith in the
original principal amount of $3,500,000.00 executed by Borrower and payable to
the order of TIAA.]
"Land" - See Granting Clauses.
"Late Charge" - Any charge designated as such and payable by Borrower
for tardy performance by Borrower under the Note, this Deed of Trust or any
other Loan Document.
"Leases" - See Granting Clauses.
"Lender" - Massachusetts Mutual Life Insurance Company and Teachers
Insurance and Annuity Association of America, the Beneficiary and Lender
identified as such on the Cover Sheet and in the preamble of this Deed of Trust,
and their respective successors and assigns (including any other holders from
time to time of the Note).
"Lien" - means any mortgage, deed of trust, deed to secure debt, lien
(statutory or other), pledge, easement, restrictive covenant, hypothecation,
assignment, preference, priority, security interest, or any other encumbrance or
charge on or affecting the Mortgaged Property or any portion thereof or any
Collateral or the Borrower, or any interest in any of the foregoing, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement or similar instrument under the
UCC or comparable law of any other jurisdiction, domestic or foreign, and
mechanic's, materialman's and other similar liens and encumbrances.
"Loan" - means the loan from Lender to Borrower and evidenced by the
Note and the Loan Documents.
"Loan Documents" - See Granting Clauses.
"Losses" - claims, suits, liabilities (including without limitation,
strict liabilities), actions, proceedings, obligations, debts, damages, losses,
costs, fines, penalties, charges, fees, expenses, judgments, awards, amounts
paid in settlement, punitive damages, foreseeable and unforeseeable
consequential damages of whatever kind or nature (including but not limited to
reasonable attorneys' fees and other costs of defense).
"Management Agreement" - means that certain Management Agreement dated
_________, by and between [FCH/SH Leasing] [FCH/SH Leasing II], as owner, and
Sheraton, [as operator, as amended by that certain ________________ dated
_____________, by and between [FCH/SH Leasing] [FCH/SH Leasing II] and
Sheraton].
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"Material Lease" - as to the Mortgaged Property, none.
"Monetary Event of Default" - has the meaning provided in Section 6 of
the Note.
"Mortgaged Property" - See Granting Clauses.
"Mortgaged Properties" - means collectively the Mortgaged Property and
the properties secured by the [Arizona Mortgage, Florida Mortgage, the Georgia
Mortgage, the Illinois Mortgage, the Kentucky Mortgage, the Pennsylvania
Mortgage, the Vermont Mortgage] or any mortgage, deed of trust or deed to secure
debt securing any Substitute Property.
"Net Operating Income" - means (a) all payments made under the Primary
Lease and any Related Primary Lease less (b) all expenses payable by Borrower
under the Primary Lease and any Related Primary Lease or with respect to the
ownership and operation of the Mortgaged Properties (i) including Impositions,
insurance, and an FF&E reserve equal to four percent (4%) of the aggregate room
and suite income, but (ii) excluding deductions for federal, state and other
income taxes, debt service expense, depreciation and amortization and other
non-cash expenses.
"Non-Material Lease" - means any Lease other than the Primary Lease or
the Material Lease.
"Non-Monetary Event of Default" - has the meaning provided in Section 6
of the Note.
"Note" - See Granting Clauses.
"Operating Agreements" - means collectively, the Primary Lease and the
Management Agreement.
"Operating Period" - means each calendar quarter during the term of the
Loan.
["Pennsylvania Loan Documents" - means the Pennsylvania Note, the
Pennsylvania Mortgage and any other instrument evidencing, securing or executed
in connection with the loan evidenced by the Pennsylvania Note.
"Pennsylvania Mortgage" - means that certain Mortgage and Security
Agreement of even date herewith securing the Pennsylvania Note, executed by
Borrower and FCH/PSH for the benefit of Beneficiary.
"Pennsylvania Note" - means collectively (i) that certain promissory
note of even date herewith in the original principal amount of $17,000,000.00
executed by Borrower and payable to the order of
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MassMutual, and (ii) that certain promissory note of even date herewith in the
original principal amount of $17,000,000.00 executed by Borrower and payable to
the order of TIAA.]
"Permitted Encumbrances" - The liens and security interest created by
this Deed of Trust and the other Loan Documents and those exceptions to title
set forth in Schedule B to this Deed of Trust.
"Person" - means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization, and any other form of
entity, as the context may require.
"Premises" - See Granting Clauses.
"Primary Lease" - means that certain Lease Agreement dated ___________,
by and between _____________, as lessor, and [FCH/SH Leasing] [FCH/SH Leasing
II], as lessee, [as amended by that certain Omnibus Lease Amendment Agreement
dated June 30, 1998, by and among FelCor Lodging Trust Incorporated, Guarantor,
[FCH/SH Leasing] [FCH/SH Leasing II] and certain other lessors and lessees under
separate lease agreements].
"Proceeds" - See Granting Clauses.
"Property Income" - See Granting Clauses.
"Qualified Hotel Operator" - means any reputable Person domiciled in
the United States of America which has the greater of the financial strength,
qualifications and creditworthiness of [FCH/SH Leasing] [FCH/SH Leasing II] or
in Beneficiary's sole determination, a minimum net worth of $30,000,000.00 and
liquid assets of not less than $3,000,000.00, all as of a date which is 30 days
prior to the date of the transfer. Additionally, neither the proposed purchaser
nor any principal of the proposed purchaser, whether on the date for the closing
of the transfer of title to the Mortgaged Property or at any time prior thereto,
may be (i) in default on any indebtedness or loan from Beneficiary or any
affiliate of Beneficiary, (ii) involved as a debtor in any bankruptcy,
reorganization or insolvency proceeding, (iii) the subject of any criminal
charges or proceedings, or (iv) an entity or individual who is or has been
involved in litigation which is in good faith deemed significant by Beneficiary.
"Qualified Real Estate Investor" - means any reputable Person domiciled
in the United States of America which has equal the financial strength,
qualifications and creditworthiness of Borrower at the time of the disbursement
of the Note, evaluated as of a date which is 30 days prior to the date of the
proposed closing of the transfer of title to the Mortgaged Property and on the
day after the proposed closing of the transfer. Additionally, neither the
proposed purchaser nor any principal of the proposed purchaser, whether on the
date for the closing of the transfer of title to the Mortgaged Property or at
any time prior thereto, may be (i) in default on any indebtedness or loan from
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Beneficiary or any affiliate of Beneficiary, (ii) involved as a debtor in any
bankruptcy, reorganization or insolvency proceeding, (iii) the subject of any
criminal charges or proceeding, or (iv) an entity or individual who is or has
been involved in litigation which is in good faith deemed significant by Lender.
"Related Loan Documents" - means collectively the Related Notes, the
Related Mortgages and any other instrument evidencing, securing or executed in
connection with the loans evidenced by the Related Notes.
"Related Loans" - means collectively the loans from Lender to Borrower
and evidenced by each Related Note and the Related Loan Documents.
"Related Mortgage" - means collectively the [Arizona Mortgage, Florida
Mortgage, the Georgia Mortgage, the Illinois Mortgage, the Kentucky Mortgage,
the Pennsylvania Mortgage, the Vermont Mortgage] or any mortgage or deed of
trust or deed to secure debt securing any Substitute Property.
"Related Note" - means collectively the [Arizona Note, Florida Note,
the Georgia Note, the Illinois Note, the Kentucky Note, the Pennsylvania Note,
the Vermont Note] or any promissory note executed in connection with any
Substitute Property.
"Related Primary Lease" - means collectively any primary lease under
the Related Loan Documents.
"Release" - Release means and includes the following: the release,
deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting,
pumping, pouring, emptying, escaping, dumping, disposing or other movement of a
Hazardous Substance no matter how or by whom or what caused.
"Released Property" has the meaning provided in Section 6.16.
"Remaining Properties" - means the properties securing the [Arizona
Note, Florida Note, the Georgia Note, the Illinois Note, the Kentucky Note, the
Pennsylvania Note, the Vermont Note] or any promissory note executed in
connection with any Substitute Property.
"Remediation" - Remediation means and includes the following: any
response, remedial, removal or corrective action, any activity to cleanup,
detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance,
any actions to prevent, cure or mitigate any Release of a Hazardous Substance,
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto, any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or evaluation
relating to any Hazardous Substances and to anything referred to in Section
2.20.
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"Sheraton" - means ____________________________________.
"Single-Purpose Entity" - means a corporation, limited partnership, or
limited liability company which, at all times since its formation and thereafter
(i) was and will be organized solely for the purpose of (x) owning the Mortgaged
Properties or (y) acting as the managing member of the limited liability company
or the general partner of a limited partnership which owns the Mortgaged
Properties, (ii) has not and will not engage in any business unrelated to the
(x) the ownership of the Mortgaged Properties or (y) acting as a member of a
limited liability company or general partner of a limited partnership which owns
the Mortgaged Properties, (iii) has not and will not have any assets other than
(x) those related to the Mortgaged Properties or (y) its member interest in the
limited liability company or its general partnership interest in the limited
partnership which owns the Mortgaged Properties, as applicable, (iv) has not and
will not engage in, seek or consent to any dissolution, winding up, liquidation,
consolidation or merger, and, except as otherwise expressly permitted by this
Deed of Trust, has not and will not engage in, seek or consent to any asset
sale, transfer of partnership or membership or shareholder interests, or
amendment of its limited partnership agreement, articles of incorporation,
articles of organization, certificate of formation or operating agreement (as
applicable), (v) if such entity is a limited partnership, has and will have as a
general partner, a general partner which is and will be a Single-Purpose Entity,
(vi) has not and will not fail to correct any known misunderstanding regarding
the separate identity of such entity, (vii) without the unanimous consent of all
of the partners, directors or members, as applicable, has not and will not with
respect to itself or to any other entity in which it has a direct or indirect
legal or beneficial ownership interest (a) file a bankruptcy, insolvency or
reorganization petition or otherwise institute insolvency proceedings or
otherwise seek any relief under any laws relating to the relief from debts or
the protection of debtors generally; (b) seek or consent to the appointment of a
receiver, liquidator, trustee, sequestrator, custodian or any similar official
for such entity or all or any portion of such entity's properties; (c) make any
assignment for the benefit of such entity's creditors; or (d) take any action
that might cause such entity to become insolvent, (x) has maintained and will
maintain its accounts, books and records separate from any other person or
entity, (xi) has maintained and will maintain its books, records, resolutions
and agreements as official records, (xii) has not commingled and will not
commingle its funds or assets with those of any other entity, (xiii) has held
and will hold its assets in its own name, (xiv) has conducted and will conduct
its business in its name, (xv) has maintained and will maintain its financial
statements, accounting records and other entity documents separate from any
other person or entity, (xvi) has paid and will pay its own liabilities out of
its own funds and assets, (xvii) has observed and will observe all partnership,
corporate or limited liability company formalities, as applicable, (xviii) has
maintained and will maintain an arms-length relationship with its affiliates
other than the leases transferred to Borrower and its general partner as part of
their initial capital contributions, (xix) (a) if such entity owns the Mortgaged
Properties, has and will have no indebtedness other than the Indebtedness,
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equipment leases permitted by this Deed of Trust and unsecured trade payables in
the ordinary course of business relating to the ownership and operation of the
Mortgaged Properties which trade payables (1) do not exceed, at any time, a
maximum amount of one percent (1%) of the Loan Amount and (2) are paid within
thirty (30) days of the date incurred, or (b) if such entity acts as the general
partner of a limited partnership or managing member of a limited liability
company which owns the Mortgaged Properties, has and will have no indebtedness
other than unsecured trade payables in the ordinary course of business relating
to acting as general partner or managing member which owns the Mortgaged
Properties which (1 ) do not exceed, at any time, Ten Thousand Dollars
($10,000.00) and (2) are paid within thirty (30) days of the date incurred, (xx)
has not and will not assume or guarantee or become obligated for the debts of
any other entity or hold out its credit as being available to satisfy the
obligations of any other entity except for the Indebtedness, (xxi) has not
acquired and will not acquire obligations or securities of its partners, members
or shareholders, (xxii) has allocated and will allocate fairly and reasonably
shared expenses, including, without limitation, shared office space and uses
separate stationery, invoices and checks, (xxiii) has not and will not pledge
its assets for the benefit of any other person or entity, (xxiv) has held and
identified itself and will hold itself out and identify itself as a separate and
distinct entity under its own name and not as a division or part of any other
person or entity, (xxv) has not made and will not make loans to any person or
entity, (xxvi) has not and will not identify its partners, members or
shareholders, or any affiliates of any of them as a division or part of it,
(xxvii) other than the leases transferred to Borrower and its general partner as
part of their initial capital contributions has not entered and will not enter
into or be a party to, any transaction with its partners, members, shareholders
or its affiliates except in the ordinary course of its business and on terms
which are intrinsically fair and are no less favorable to it than would be
obtained in a comparable arms-length transaction with an unrelated third party,
(xxviii) has paid and will pay the salaries of its own employees from its own
funds, (xix) has maintained and will maintain adequate capital in light of its
contemplated business operations and (xxx) if such entity is a limited liability
company or limited partnership, then such entity shall continue (and not
dissolve) for so long as a solvent managing member or general partner, as
applicable, exists and such entity's organizational documents shall contain such
provision.
"State" - The State or Commonwealth in which the Land is situated.
"Substitute Property" has the meaning provided in Section 6.16.
"Trustee" - The party or parties identified and defined as Trustee on
the Cover Sheet and in the preamble of this Deed of Trust, and its or their
respective successors in the trust created by this Deed of Trust, and its or
their respective assigns.
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"Trustor" - The party identified as such on the Cover Sheet and in the
preamble of this Deed of Trust, any subsequent owner of the Mortgaged Property,
and its successors and assigns. The Trustor is also herein called "Borrower."
"U.S. Obligations" - means obligations or securities not subject to
prepayment, call or early redemption which are direct obligations of, or
obligations fully guaranteed as to timely payment by, the United States of
America or any agency or instrumentality of the United States of America, the
obligations of which are backed by the full faith and credit of the United
States of America.
["Vermont Loan Documents" - means the Vermont Note, the Vermont
Mortgage and any other instrument evidencing, securing or executed in connection
with the loan evidenced by the Vermont Note.
"Vermont Mortgage" - means that certain Mortgage and Security Agreement
of even date herewith securing the Vermont Note, executed by Borrower for the
benefit of Beneficiary.
"Vermont Note" - means collectively (i) that certain promissory note of
even date herewith in the original principal amount of $10,500,000.00 executed
by Borrower and payable to the order of MassMutual, and (ii) that certain
promissory note of even date herewith in the original principal amount of
$10,500,000.00 executed by Borrower and payable to the order of TIAA.]
ARTICLE II
Covenants of Borrower
Borrower covenants, warrants, represents and agrees with and to Trustee
and Lender as follows:
Section 2.01. Payment of the Indebtedness. Borrower shall punctually
pay the Indebtedness at the times and in the manner provided in the Note and the
other Loan Documents, all in lawful money of the United States of America.
Section 2.02. Title to the Mortgaged Property.
(a) Borrower has fee simple title (or such lesser estate therein as may be
specified in Schedule A) to the Premises and good indefeasible title to
the balance of the Mortgaged Property, free and clear of liens and
encumbrances except Permitted Encumbrances.
(b) Borrower has full power and lawful authority to encumber the Mortgaged
Property in the manner and form herein set forth.
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(c) This Deed of Trust is and will remain a valid and enforceable lien on
and security interest in the Mortgaged Property.
(d) Borrower will preserve such title and will forever warrant and defend
the same and the validity and priority of the lien hereof to Trustee
and Lender against all claims whatsoever.
(e) The Mortgaged Property is in material compliance with all provisions of
all zoning, subdivision, land use, environmental, traffic, fire,
building, and occupational safety and health rules, regulations, codes,
acts and statutes to which it is subject.
Section 2.03. Maintenance of the Mortgaged Property. Borrower shall (or
shall enforce its rights under the Primary Lease to cause [FCH/SH Leasing]
[FCH/SH Leasing II] to) maintain the Mortgaged Property in good and safe
condition, working order and repair, and comply with all existing and future
federal, state and local laws, ordinances, rules and regulations and court
orders affecting or which may be interpreted as affecting the Mortgaged
Property. Borrower shall permit Lender to enter upon and inspect the Mortgaged
Property (without prior notice in the event of an emergency) at all reasonable
hours; provided, Lender makes an appointment through the general manager of the
hotel after reasonable notice and in a manner that does not affect normal
business operations. Borrower shall not, without the prior consent of Lender,
(a) change the use of the Premises or cause or permit the use or occupancy of
any part of the Premises to be discontinued if such discontinuance would violate
any zoning or other law, ordinance or regulation; (b) consent to any zoning
reclassification, modification or restriction affecting the Premises; (c)
threaten, commit or permit any waste, structural or material alteration,
demolition or removal of the Mortgaged Property or any portion thereof (provided
that the Equipment included within the Collateral may be removed if replaced
with similar items of equal or greater value); or (d) take any steps whatsoever
to convert the Mortgaged Property, or any portion thereof, to a condominium or
cooperative form of ownership. No provision of this Section 2.03 shall prohibit
Borrower from undertaking and completing tenant improvement work authorized
under Leases previously approved by Lender or not requiring Lender's prior
approval. Notwithstanding the foregoing, Borrower shall enforce its rights under
the Primary Lease to cause [FCH/SH Leasing] [FCH/SH Leasing II] to operate the
Mortgaged Property in a first class manner and at all times during the term of
the Loan as a "Sheraton, Westin or Luxury Collection " hotel or under another
flag acceptable to Lender.
Section 2.04. Insurance; Restoration.
(a) Borrower shall keep the Improvements and the Equipment insured against
damage by fire and the other hazards covered by a comprehensive all
risk coverage insurance policy in an amount equal to 100% of the full
insurable value thereof (which shall mean the full repair and actual
replacement value thereof providing for no deductible in excess of
$25,000.00, without reduction for depreciation or co-insurance) as
approved by Lender, and against loss of rents in
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an amount not less than 12 months' rental income from all Leases.
Borrower shall also carry such other insurance, and in such amounts, as
Lender may from time to time reasonably require, against insurable
risks which at the time are commonly insured against in the case of
premises similarly situated, due regard being given to the availability
of insurance and to the type of construction, location, utilities, use
and occupancy of the Premises or any replacements or substitutions
therefor. Such additional insurance may include workers' compensation,
boiler and machinery, flood, earthquake, demolition and contingent
liability from the operation of "non-conforming" improvements on the
Premises, and shall be obtained within 20 days after demand by Lender.
Notwithstanding the foregoing, in the event Borrower obtains an
umbrella or a blanket insurance policy or a separate policy or any
other insurance policy affecting the Mortgaged Property hereunder,
Borrower shall notify Lender of the same and shall cause certified
copies of each insurance policy to be delivered as required under
Section 2.04(c) below. Any umbrella or blanket insurance policy shall
specifically allocate to the Mortgaged Property the amount of coverage
from time to time required hereunder and shall otherwise provide the
same protection as would a separate policy insuring only the Mortgage
Property in compliance with the provisions of Section 2.04(c), giving
Lender all of the rights set forth in this Section 2.04. The Proceeds
of insurance paid on account of any damage to or destruction of the
Premises or any portion thereof shall be paid over to Lender to be
applied as hereinafter provided.
(b) Borrower shall also maintain or cause to be maintained by [FCH/SH
Leasing] [FCH/SH Leasing II] pursuant to the terms of the Primary Lease
general liability insurance with respect to the Premises against
personal injury, death and property damage, with limits of liability in
amounts reasonably satisfactory to Lender.
(c) All insurance policies and endorsements required pursuant to this Deed
of Trust shall (i) be endorsed to name Lender as an insured thereunder,
as its interest may appear, with loss payable to Lender, without
contribution, under a long-form, non-contributory mortgagee clause, or
otherwise endorsed as Lender may reasonably require; (ii) be fully paid
for and contain such provisions and expiration dates and be in such
form and issued by such insurance companies licensed to do business in
the State, with a rating of "A- VIII" or better as established by
Best's Rating Guide or an equivalent rating with such other publication
of a similar nature as shall be in current use, as shall be approved by
Lender; (iii) without limiting the foregoing, provide that such policy
or endorsement may not be canceled or materially changed except upon 30
days prior written notice of intention of non-renewal, cancellation or
material change to Lender, and that no act or thing done by Borrower or
Lender shall invalidate the policy as against Lender; and (iv) be in
form and content reasonably satisfactory to Lender. Borrower shall
deliver all original policies including all endorsements and renewals
thereof, or copies thereof certified by the insurance company or
authorized agent as being true copies, to Lender together with all
endorsements required hereunder, on the date of this Deed of Trust and
thereafter at least 10
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days prior to the expiration date of such policies. Borrower may
request an extension of time not exceeding 120 days to deliver the
foregoing policies, endorsements and renewals or certified copies
thereof if Borrower has done all things necessary to obtain the
issuance of the policies, endorsements and renewals including, without
limitation, the payment of all premiums therefor, and Borrower has
delivered to Lender within the above 10 day period an insurance binder
reasonably satisfactory to Lender issued by the approved insurer
showing all required coverage to be in full force and effect for the
succeeding 12 month period along with evidence reasonably satisfactory
to Lender of payment in full of all premiums. If Borrower fails to
maintain insurance in compliance with this Deed of Trust, Lender may
(but shall not be obligated to) obtain such insurance and pay the
premium therefor and Borrower shall reimburse Lender on demand for all
such Advances. Notwithstanding anything to the contrary contained
herein or in any provision of law, the Proceeds of insurance policies
coming into the possession of Lender shall not be deemed trust funds
and Lender shall be entitled to dispose of such Proceeds as hereinafter
provided.
(d) In the event of any damage to or destruction of the Premises and/or
Equipment, Borrower shall give prompt written notice to Lender and
shall promptly commence and diligently continue to completion the
repair, restoration and rebuilding of the Premises and/or Equipment so
damaged or destroyed in full compliance with all legal requirements and
with the provisions of Section 2.04(h)(i) below, and free and clear
from any and all liens and claims. Such repair, restoration and
rebuilding of the Premises are sometimes hereinafter collectively
referred to as the "Work." If any Event of Default is then existing or
if in Lender's reasonable judgment the cost of the Work is $1,000,000
or more, then Borrower shall not adjust, compromise or settle any claim
for insurance proceeds without the prior consent of Lender. Subject to
Section 2.04(g), Lender shall have the option in its sole discretion to
apply any insurance Proceeds it may receive pursuant to this Deed of
Trust (less any cost to Lender of recovering and paying out such
Proceeds, including reasonable attorneys' fees) to the payment of the
Indebtedness or to allow all or a portion of such Proceeds to be used
for the Work. If any insurance Proceeds are applied to reduce the
Indebtedness, provided no Event of Default shall have occurred and be
continuing, Lender shall apply the same, without any prepayment fee, in
the following order:
(i) first, to the payment of interest due on any Advances;
(ii) next, to the principal amount of any Advances;
(iii) next, to any Late Charges, attorney's fees or any other amount
due hereunder or under a Loan Document save for the amounts
described in (iv) and (v) immediately below;
(iv) next, to accrued interest then due under the Note; and
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(v) finally, to the unpaid principal balance of the Note (in the
inverse order of maturity of principal installments thereof).
If an Event of Default shall have occurred and be continuing, however,
Lender, at its option, may apply any insurance Proceeds to the
foregoing items in such order and priority as Lender deems appropriate
in its sole discretion.
(e) In the event of the foreclosure of this Deed of Trust or other transfer
of title to or assignment of the Mortgaged Property in extinguishment
of the Indebtedness in whole or in part, all right, title and interest
of Borrower in and to all policies of insurance required by this Deed
of Trust and any insurance Proceeds shall inure to the benefit of and
pass to Lender or any purchaser or transferee at the foreclosure sale
of the Mortgaged Property.
(f) Borrower hereby irrevocably appoints Lender its attorney-in-fact,
coupled with an interest, to apply and make claims for insurance
Proceeds under all insurance policies constituting Intangibles, to
prosecute and settle such claims and to endorse any checks, drafts or
other instruments representing any insurance Proceeds whether payable
by reason of loss thereunder or otherwise. Additionally, Lender may
notify any and all insurers under casualty and liability insurance
policies constituting part of the Intangibles that Lender has a
security interest pursuant to the provisions of this Deed of Trust in
and to such insurance policies and any proceeds thereof, and that any
payments under those insurance policies are to be made directly to
Lender. Lender's rights under this Section 2.04(f) may be exercised by
Lender or a court appointed receiver appointed upon the request of
Lender and irrespective of whether or not a default shall have occurred
under this Deed of Trust.
(g) Notwithstanding the provisions of Section 2.04(d) above, if in Lender's
reasonable judgment the cost of the Work shall not exceed 50 percent of
the then outstanding principal balance of the Note, then Lender shall,
upon request by Borrower, permit Borrower to use the Proceeds for the
Work (subject to the provisions of, and less Lender's costs described
in, Section 2.04(h) below), so long as:
(i) no Event of Default shall then exist nor any matter(s) exist
which, after notice of default or passage of time or both,
would constitute an Event of Default;
(ii) the original Borrower named herein continues to be the owner
of the Mortgaged Property;
(iii) the Work can be completed within 12 months from the date of
the damage to or destruction of the Premises;
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(iv) none of the Operating Agreements in effect immediately prior
to the damage or destruction shall have been canceled or
terminated and not replaced with substitute agreements
reasonably acceptable to Lender;
(v) all sums necessary to effect the Work over and above any
available Proceeds shall be at the sole cost and expense of
the Borrower and, at Lender's request, Borrower shall deposit
such additional amounts, as reasonably estimated by Lender,
with Lender prior to commencing any Work and at all times
thereafter;
(vi) at all times during any such Work Borrower shall maintain, at
its sole cost and expense, workers' compensation, builders
risk and public liability insurance in amounts reasonably
satisfactory to Lender and in accordance with the provisions
of this Section 2.04; and
(vii) any unexpended Proceeds, at the sole option of the Lender,
shall either be paid over to the Borrower or shall be applied
to the reduction of the Indebtedness. If the Proceeds are used
to reduce the Indebtedness, they shall be applied in the order
provided in Section 2.04(d), without any prepayment fee.
(h) If any insurance Proceeds are used for the Work, then such Proceeds
shall be held by Lender and shall be paid out from time to time to
Borrower as the Work progresses (less any cost to Lender of recovering
and paying out such Proceeds, including reasonable attorneys' fees and
costs allocable to inspecting the Work and the plans and specifications
therefor), subject to each of the following conditions:
(i) If the Work is structural or if the cost of the Work is
reasonably estimated to exceed Two Hundred Thousand Dollars
($200,000.00), the Work shall be conducted under the
supervision of a certified and registered architect or
engineer reasonably satisfactory to Lender. Before Borrower
commences any Work, other than temporary work to protect
persons or property or prevent interference with business,
Lender shall have approved the plans and specifications for
the Work, which approval shall not be unreasonably withheld or
delayed, it being nevertheless understood that such plans and
specifications shall provide for Work so that, upon completion
thereof, the Premises shall be at least equal in value and
general utility to the Premises immediately prior to the
damage or destruction.
(ii) Each request for payment shall be made on not less than seven
Business Days prior notice to Lender and shall be accompanied
by a certificate of the architect or engineer in (i) above (or
a certificate given by Borrower if no architect or engineer is
so required) stating (A) that all of the Work completed has
been done in substantial
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compliance with the approved plans and specifications, if
required under (i) above, (B) that the sum requested is justly
required to reimburse the Borrower for payments by Borrower,
or is justly due to the contractor, subcontractors,
materialmen, laborers, engineers, architects or other persons
rendering services or materials for the Work (giving a brief
description of such services and materials), and that when
added to all sums previously paid out by Lender does not
exceed the value of the Work done to the date of such
certificate, (C) if the sum requested is to cover payment
relating to repair and restoration of Equipment required or
relating to the Premises, that title to the items of Equipment
covered by the request for payment is vested in Borrower, and
(D) that the amount of such Proceeds remaining in the hands of
Lender will be sufficient on completion of the Work to pay for
the same in full (giving in such reasonable detail as Lender
may require an estimate of the cost of such completion).
Additionally, each request for payment shall contain a
statement signed by Borrower approving both the Work done to
date and the Work covered by the request for payment in
question.
(iii) Each request for payment shall be accompanied by waivers of
lien satisfactory to Lender covering that part of the Work for
which payment or reimbursement is being requested and, if
required by Lender, a search prepared by a title company or
licensed abstractor, or by other evidence satisfactory to
Lender that there has not been filed with respect to the
Premises any mechanics' or other lien or instrument for the
retention of title relating to any part of the Work not
discharged of record. Additionally, as to any Equipment
covered by the request for payment, Lender shall be furnished
with evidence of payment therefor and such further evidence
satisfactory to assure Lender of its valid first lien on the
Equipment.
(iv) Lender shall have the right to inspect the Work at all
reasonable times and may condition any disbursement of
Proceeds upon the satisfactory completion, as determined in
Lender's reasonable discretion, of any portion of the Work for
which payment or reimbursement is being requested. Neither the
approval by Lender of the plans and specifications for the
Work nor the inspection by Lender of the Work shall make
Lender responsible for the preparation of such plans and
specifications or the compliance of such plans and
specifications, or of the Work, with any applicable law,
regulation, ordinance, covenant or agreement.
(v) Proceeds shall not be disbursed more frequently than every 30
days.
(vi) Any request for payment made after the Work has been completed
shall be accompanied by a copy or copies of any certificate or
certificates required by law to render occupancy and full
operation of the Premises legal.
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(vii) Upon any failure on the part of Borrower to promptly commence
the Work or to proceed diligently and continuously to
completion of the Work, Lender may apply any such Proceeds it
then or thereafter holds to the payment of the Indebtedness;
provided, however, that Lender, at its sole option, shall be
entitled to apply at any time all or any portion of insurance
Proceeds it then holds to the curing of any Event of Default
under this Deed of Trust, the Note or any other Loan Document.
(i) Notwithstanding any other provision of this Section 2.04, if no Event
of Default shall exist or be continuing (nor any matters have occurred
which, after notice or passage of time or both, would constitute an
Event of Default) and in Lender's reasonable judgment the cost of the
Work is less than $1,000,000 and the Work can be completed in less than
180 days, then Lender shall have no rights to apply for or receive the
insurance Proceeds, provided that Borrower shall apply such insurance
Proceeds solely to the prompt and diligent commencement and completion
of such Work and notify Lender as to the foregoing.
Section 2.05. Condemnation. Borrower shall notify Lender immediately of
the actual or threatened commencement of any proceedings for the condemnation or
taking of the Premises or any portion thereof and shall deliver to Lender copies
of any and all papers served in connection with such proceedings. Lender may
participate in such proceedings and Borrower shall deliver to Lender all
instruments requested by Lender to permit such participation. Lender is hereby
irrevocably appointed as Borrower's attorney-in-fact, coupled with an interest,
with exclusive power to collect, receive and retain the Proceeds of any such
condemnation and to make any compromise or settlement in connection with such
proceedings, subject to the provisions of this Deed of Trust. Borrower shall not
adjust, compromise, settle or enter into any agreement with respect to such
proceedings without the prior consent of Lender. All Proceeds of any
condemnation, or purchase in lieu thereof, of the Premises or any portion
thereof are hereby assigned to and shall be paid to Lender. Borrower hereby
authorizes Lender to collect and receive such Proceeds, to give proper receipts
and acquittances therefor and, in Lender's sole discretion, to apply such
Proceeds (less any cost to Lender of recovering and paying out such Proceeds,
including reasonable attorneys' fees and costs allocable to inspecting any
repair, restoration or rebuilding work and the plans and specifications
therefor) toward the payment of the Indebtedness or to the repair, restoration
or rebuilding of the Premises in the manner and subject to the conditions set
forth in Section 2.04(h). If the Proceeds are used to reduce the Indebtedness,
they shall be applied in the order provided in Section 2.04(d), without any
prepayment fee. Borrower shall promptly execute and deliver all instruments
requested by Lender for the purpose of confirming the assignment of the
condemnation Proceeds to Lender.
Section 2.06. Impositions.
(a) Borrower shall pay and discharge all Impositions prior to delinquency
and shall furnish to Lender validated receipts or other evidence
satisfactory to Lender showing the payment of
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such Impositions within 15 days after the same would otherwise have
become delinquent. Borrower's obligation to pay Impositions pursuant to
this Deed of Trust shall include, to the extent permitted by applicable
law, taxes resulting from future changes in law which impose upon
Trustee or Lender an obligation to pay any property taxes or other
Impositions or which otherwise adversely affect Trustee's or Lender's
interests. Should Borrower default in the payment of any Impositions,
Lender may (but shall not be obligated to) pay such Impositions or any
portion thereof and Borrower shall reimburse Lender on demand for all
such Advances.
(b) Borrower shall not be required to pay, discharge or remove any
Imposition so long as Borrower contests in good faith such Imposition
or the validity, applicability or amount thereof by an appropriate
legal proceeding which operates to prevent the collection of such
amounts and the sale of the Mortgaged Property or any portion thereof;
provided, however, that prior to the date on which such Imposition
would otherwise have become delinquent Borrower shall have (i) given
Lender prior notice of such contest and (ii) deposited with Lender, and
shall deposit such additional amounts as are necessary to keep on
deposit at all times, an amount equal to at least 110 per cent of the
total of (A) the balance of such Imposition then remaining unpaid and
(B) all interest, penalties, costs and charges accrued or accumulated
thereon. Any such contest shall be prosecuted with due diligence, and
Borrower shall promptly pay the amount of such Imposition as finally
determined, together with all interest and penalties payable in
connection therewith. Lender shall have full power and authority to
apply any amount deposited with Lender under this Section 2.06(b) to
the payment of any unpaid Imposition to prevent the sale or forfeiture
of the Mortgaged Property for non-payment thereof. Lender shall have no
liability, however, for failure to so apply any amount deposited unless
Borrower requests the application of such amount to the payment of the
particular Imposition for which such amount was deposited. Any surplus
retained by Lender after payment of the Imposition for which a deposit
was made shall be repaid to Borrower unless an Event of Default shall
have occurred under the provisions of this Deed of Trust, in which case
said surplus may be retained by Lender to be applied to the
Indebtedness. Notwithstanding any provision of this Section 2.06(b) to
the contrary, Borrower shall pay any Imposition which it might
otherwise be entitled to contest if, in the reasonable opinion of
Lender, the Mortgaged Property is in jeopardy or in danger of being
forfeited or foreclosed. If Borrower refuses to pay any such
Imposition, Lender may (but shall not be obligated to) make such
payment and Borrower shall reimburse Lender on demand for all such
Advances. Additionally, in such event, if Lender is prevented by law or
judicial or administrative order from paying such Imposition, then
Lender, at its option, may declare the entire Indebtedness immediately
due and payable.
Section 2.07. Deposits. Borrower shall deposit with Lender, monthly, on
the due date of each monthly installment under the Note, 1/12th of the annual
charges (as estimated by Lender) for Impositions, and, if required by Lender,
1/12th of the annual charges for rent (if Borrower is lessee of an interest in
the Mortgaged Property). If required by Lender, Borrower shall also deposit with
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Lender, simultaneously with such monthly deposits and/or the execution of this
Deed of Trust, a sum of money which together with such monthly deposits will be
sufficient to make the payment of each such charge at least 30 days prior to the
date initially due. Should such charges not be ascertainable at the time any
deposit is required to be made, the deposit shall be made on the basis of the
charges for the prior year or payment period, as reasonably estimated by Lender.
When the charges are fixed for the then current year or period, Borrower shall
deposit any deficiency on demand. All funds deposited with Lender shall be held
without interest (unless the payment of interest thereon is required under
applicable law), may be commingled with Lender's other funds, and shall be
applied in payment of the foregoing charges when and as payable provided that no
Event of Default shall have occurred. Should an Event of Default occur, the
funds so deposited may be applied in payment of the charges for which such funds
shall have been deposited or to the payment of the Indebtedness or any other
charges affecting the Mortgaged Property, as Lender in its sole discretion may
determine, but no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.
Borrower shall furnish Lender with bills and all other documents necessary for
the payment of the foregoing charges at least 15 days prior to the date on which
each payment thereof shall first become due.
Section 2.08. Mortgage Taxes. Borrower shall pay any and all taxes,
charges, filing, registration and recording fees, excises and levies imposed
upon Lender by reason of its ownership of, or measured by amounts payable under,
the Note, this Deed of Trust or any other Loan Document (other than income,
franchise and doing business taxes), and shall pay all stamp taxes and other
taxes required to be paid on the Note or the other Loan Documents. If Borrower
fails to make such payment within five days after notice thereof from Lender,
Lender may (but shall not be obligated to) pay the amount due, and Borrower
shall reimburse Lender on demand for all such Advances. If applicable law
prohibits Borrower from paying such taxes, charges, filing, registration and
recording fees, excises, levies, stamp taxes or other taxes, then Lender may
declare the Indebtedness then unpaid to be immediately due and payable. In such
event, no prepayment fee shall be charged.
Section 2.09. Loan Documents Authorized.
(a) The execution and delivery of this Deed of Trust, the Note and the
other Loan Documents have been duly authorized and there is no
provision in Borrower's organizational documents, as amended, requiring
further consent for such action by any other person or entity.
(b) Borrower is duly organized, validly existing and in good standing under
the laws of the state of its formation.
(c) Borrower has all necessary franchises, licenses, authorizations,
registrations, permits and approvals and full power and authority to
own and lease its properties, including the
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Mortgaged Property, and carry on its business as now conducted in each
jurisdiction where Borrower conducts its business.
(d) The execution and delivery of and performance of its obligations under
the Loan Documents (i) will not result in Borrower being in default
under any provision of its organizational documents, as amended, any
court order, or any mortgage, deed of trust or other agreement to which
it is a party and (ii) do not require the consent of or any filing with
any governmental authority.
(e) All necessary and required actions have been duly taken by and on
behalf of Borrower to make and constitute the Loan Documents, and the
Loan Documents constitute, legal, valid and binding obligations
enforceable in accordance with their respective terms, subject only to
the application of bankruptcy and other laws affecting the rights of
creditors generally.
Section 2.10. Maintenance of Existence. So long as it owns the
Mortgaged Property, Borrower shall (or shall enforce its rights under the
Primary Lease to cause [FCH/SH Leasing] [FCH/SH Leasing II] to) do all things
necessary to preserve and keep in full force and effect its existence,
franchises, licenses, authorizations, registrations, permits and approvals under
the laws of the state of its formation and the State, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any governmental
authority or court now or hereafter applicable to Borrower or, to the Mortgaged
Property or any portion thereof.
Section 2.11. Payment of Liens. Borrower shall pay when due all
payments and charges due under or in connection with any liens and encumbrances
on and security interests in the Mortgaged Property or any portion thereof, all
rents and charges under any ground leases and other leases forming a part of the
Mortgaged Property, and all claims and demands of mechanics, materialmen,
laborers and others which, if unpaid, might result in or permit the creation of
a lien on the Mortgaged Property or any portion thereof, and shall cause the
prompt (but in no event later than 30 days after imposition), full and
unconditional discharge of all liens imposed on or against the Mortgaged
Property or any portion thereof. Borrower shall do or cause to be done, at the
sole cost of Borrower, everything necessary to fully preserve the initial
priority of the lien of this Deed of Trust. If Borrower fails to make any such
payment or if a lien attaches to the Mortgaged Property or any portion thereof,
Lender may (but shall not be obligated to) make such payment or discharge such
lien and Borrower shall reimburse Lender on demand for all such Advances.
Notwithstanding the foregoing, Borrower shall not be in default for failure to
pay or discharge a mechanic's or materialman's lien asserted against the
Mortgaged Property if, and so long as, (a) Borrower shall have notified Lender
of same within five (5) days of obtaining actual knowledge thereof; (b) Borrower
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 Mortgaged Property or any part thereof, to satisfy the
same; (c) Borrower shall have furnished to Lender a cash deposit, or an
indemnity bond satisfactory to Lender with a surety
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satisfactory to Lender, in the amount of the 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 Mortgaged
Property or any part thereof; (d) Borrower shall promptly upon final
determination thereof pay the amount of any such claim so determined, together
with all costs, interest and penalties which may be payable in connection
therewith; (e) the failure to pay the 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 Mortgaged Property; and
(f) notwithstanding the foregoing, Borrower shall immediately upon request of
Lender pay any such claim notwithstanding such contest, if in the opinion of
Lender, the Mortgaged Property or any part thereof or interest therein may be in
danger of being sold, forfeited, foreclosed, terminated, canceled or lost.
Section 2.12. Costs of Defending and Upholding the Lien. Lender and, to
the extent authorized by Lender, Trustee may, after notice to Borrower, (a)
appear in and defend any action or proceeding, in the name and on behalf of
either Lender or Borrower, in which Trustee or Lender is named or which Lender
in its sole discretion determines may adversely affect the Mortgaged Property,
this Deed of Trust, the lien hereof or any other Loan Document; and (b)
institute any action or proceeding which Lender in its sole discretion
determines should be instituted to protect the interest or rights of Lender or
Trustee's interest in the Mortgaged Property or under this Deed of Trust or any
other Loan Document, including, without limitation, foreclosure proceedings.
Borrower agrees to bear and shall pay or reimburse Trustee and Lender on demand
for all Advances and expenses (including reasonable attorneys' fees) relating to
or incurred by Lender in connection with any such action or proceeding.
Section 2.13. Costs of Enforcement. Borrower agrees to bear and shall
pay or reimburse Trustee and Lender on demand for all Advances and expenses
(including reasonable attorneys' and appraisers' fees and the expenses and
reasonable fees of any receiver or similar official) of or incidental to the
collection of the Indebtedness, any foreclosure of this Deed of Trust or any
other Loan Document, any enforcement, compromise or settlement of this Deed of
Trust, any other Loan Document or the Indebtedness, or any defense or assertion
of the rights or claims of Trustee or Lender in respect of any thereof, by
litigation or otherwise.
Section 2.14. Interest on Advances and Expenses. All Advances made and
any reasonable expenses incurred at any time by Trustee or Lender pursuant to
the provisions of this Deed of Trust or the other Loan Documents or under
applicable law shall be secured by this Deed of Trust as part of the
Indebtedness, with equal rank and priority. All such Advances and expenses shall
bear interest at the Default Rate from the date that each such Advance or
expenses is made or incurred to the date of repayment and all such Advances and
expenses with interest thereon shall be payable to Lender on demand.
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Section 2.15. Indemnification. Borrower shall indemnify and hold
Trustee and Lender and their respective directors, officers, employees and
agents harmless from and against and reimburse them for all Losses which may be
imposed upon, asserted against, or incurred or paid by any of them (a) by reason
of, on account of or in connection with any act or occurrence relating to the
Mortgaged Property or any bodily injury, death, other personal injury or
property damage occurring in, upon or in the vicinity of the Premises from any
cause whatsoever, (b) as a result of the failure of Borrower to perform any of
its obligations under any of the Loan Documents, or (c) on account of any
transaction otherwise arising out of or in any way connected with the Mortgaged
Property, this Deed of Trust or the Indebtedness.
Section 2.16. Financial Statements; Records. Borrower shall keep
adequate books and records of account in accordance with generally accepted
accounting principles ("GAAP"), or in accordance with other methods acceptable
to Lender in its reasonable discretion, consistently applied, and shall furnish
to Lender:
(a) all annual operating statements of the Premises received from [FCH/SH
Leasing] [FCH/SH Leasing II] or Sheraton detailing the total revenues
received, total expenses incurred, total cost of all capital
improvements, total debt service and total cash flow, and certified by
[FCH/SH Leasing] [FCH/SH Leasing II] or Sheraton, as appropriate, in
the form received by Borrower, or if requested by Lender and to the
extent available, an audited annual operating statement prepared and
certified by an independent certified public accountant acceptable to
Lender, within 120 days after the close of each Fiscal Year of
Borrower;
(b) an annual balance sheet and profit and loss statement of Borrower and
Guarantor, in a form reasonably approved by Lender, prepared and
certified by Borrower or Guarantor as applicable, and, such statements,
if requested by Lender and to the extent available, shall be audited
financial statements prepared and certified by an independent certified
public accountant acceptable to Lender. All statements shall be
delivered to Lender within 120 days after the close of each Fiscal Year
of Borrower;
(c) annual operating budgets and management plans presented on a monthly
basis consistent with the annual operating statements described above
for the Premises, including cash flow projections for the upcoming
year, and all proposed capital replacements and improvements on or
before February 1 of each Fiscal Year;
(d) an annual occupancy and average daily rate statement detailing the
occupancy rates and average daily room rates to be prepared and
certified by Borrower in a form approved by Lender, within 120 days
after the end of each Fiscal Year of Borrower;
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(e) an annual FF&E budget which will be submitted by Borrower to Lender, no
later than December 30 of each loan year; and
(f) upon request from Lender, the following:
(i) such other financial or management information as may, from
time to time, be reasonably required by Lender and in form and
substance reasonably satisfactory to Lender; and,
(ii) Borrower's books and records regarding the Premises for
examination, review, copying and audit by Lender or its
auditors during normal business hours and convenient
facilities for such examination review, copying and audit of
Borrower's books and records of account.
(g) Borrower's agreements as set forth in this Section 2.16 constitute
material inducements to Lender in making the loan secured by this Deed
of Trust. Accordingly, in the event Borrower fails to furnish any
financial report or tax return required by this section as and when
required, time being of the essence, then, in addition to all other
remedies available to Lender under this Deed of Trust, Borrower agrees
to pay Lender a late charge of $100.00 for each day or part thereof
that any such financial report or tax return shall be overdue. The
foregoing late charges and the costs and expenses of the auditor shall
be due and payable to Lender upon demand and shall constitute a part of
the Indebtedness.
Section 2.17. Prohibition Against Conveyances and Encumbrances. Except
with the prior consent of Lender or as permitted by Section 3.01(b), Borrower
shall not and shall not permit others to convey, assign, sell, mortgage,
encumber, pledge, hypothecate, grant a security interest in, grant options with
respect to, or otherwise dispose of (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for
consideration or of record) all or any portion of any legal or beneficial
interest (a) in all or any portion of the Mortgaged Property (other than the
sale of goods used in the operation of a hotel business or replacement of
Equipment in the ordinary course of business) including the Leases; or (b) in
Borrower. All requests for Lender's consent under this Section 2.17 shall be on
a form previously approved by Lender and shall be accompanied by the payment of
Lender's standard processing fee for such transactions then in effect not to
exceed one percent (1%) of the then outstanding balance of the Loan. Lender's
consent to any of the foregoing actions, if given (in Lender's sole discretion),
may be conditioned upon a change in the interest rate, maturity date,
amortization period or other terms under the Note, the payment of a transfer fee
not to exceed one percent (1%) of the then outstanding balance of the Loan
and/or any other requirements of Lender. In addition to the standard processing
fee and the transfer fee referred to in this Section 2.17, Borrower agrees to
bear and shall pay or reimburse Lender on demand for all reasonable expenses
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(including reasonable attorneys' fees, title search costs, and title insurance
endorsement premiums) incurred by Lender in connection with the review, approval
and documentation of any such transaction.
Notwithstanding the prohibition against conveyances and encumbrances
set forth in this Section 2.17, Lender will permit Borrower the right to a
one-time sale, transfer or assignment in whole (but not in part) of its interest
in the Mortgaged Property, without modification of the terms of the Loan,
provided each and every one of the following conditions is satisfied:
(a) At least thirty (30) days prior to such transfer, Borrower shall have
provided Lender with written notice of the proposed transfer along with
the name(s), address(es) and organizational documents of the proposed
purchaser and principals of the proposed purchaser. Additionally,
Borrower shall furnish to Lender along with such notice the following:
(i) detailed and complete financial statements of the proposed
purchaser and principals of proposed purchaser, (ii) information with
respect to the business and business experience of the proposed
purchaser and the proposed purchaser's principals' experience in the
ownership and operation of properties similar to the Mortgaged Property
and other commercial real estate, (iii) evidence that the Mortgaged
Property as of the proposed date of transfer of title and thereafter
will be managed by a hotel management company and under a hotel
management agreement meeting the requirements of Section 2.17(d) below,
(iv) the terms and conditions of the proposed sale and a copy of the
purchase and sales agreement, and (v) such other information as Lender
may request to permit it to determine the creditworthiness and
management abilities of the proposed transferee, its management plan
for the Mortgaged Property and the proposed transferee's status as a
"Qualified Real Estate Investor".
(b) The Loan must be current in all respects and may not be in default
either as of the date of the notice given Lender under subparagraph (a)
above or thereafter through the date of transfer of title to the
Mortgaged Property nor may any event have occurred which, after notice
or passage of time or both, would constitute an Event of Default under
the Loan.
(c) The purchaser is a "Qualified Real Estate Investor".
(d) The Mortgaged Property as of the date of transfer and thereafter must
be managed by Sheraton or another hotel management company reasonably
approved by Lender under the Management Agreement or another hotel
management agreement reasonably satisfactory to Lender. The flag under
which the Mortgaged Property is operated shall remain the same or, if
changed, be satisfactory to Lender.
(e) The proposed purchaser of the Mortgaged Property shall assume the Loan
under documents in form and substance satisfactory to Lender, subject
to the non-recourse provisions of the Loan Documents existing as of the
date of the closing of the sale of the Mortgaged Property.
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Additionally, at the time of the assumption of the Loan, the proposed
purchaser shall furnish to Lender an environmental indemnity in form
and substance satisfactory to Lender from a financially responsible
person or entity approved by the Lender. Borrower and the proposed
purchaser and any other person as reasonably required by Lender's
counsel shall also execute financing statements and such other
documents as Lender's counsel shall reasonably require in order to
effectuate the transaction as contemplated by this Section 2.17 and
shall furnish evidence of fire and extended coverage insurance as
required by the Loan Documents.
(f) Along with the notice of transfer under subparagraph (a) above,
Borrower shall pay to Lender a fee in the amount of one percent (1%) of
the then outstanding balance of the Loan in cash or certified funds.
Such fee shall be retained by Lender whether or not the transfer occurs
except in the situation described in the succeeding sentence and is
being paid in order to induce Lender to allow the proposed purchaser to
assume the obligations of the Borrower under the Loan Documents and to
release Borrower from liability thereunder for all periods from and
after the transfer in accordance with these provisions. Such fee shall
be returned to Borrower only if Lender disapproves of such transfer as
not meeting the requirements of this Section 2.17.
(g) The cash flow from the Mortgaged Property (i.e., gross rents received
less property taxes, insurance and a reasonable reserve for capital
improvements, but excluding principal and interest payments on the
Loan, depreciation and other non-cash charges and proceeds from
casualty policies) for the 12 month period ending on the last day of
the month which is two months prior to the month of the anticipated
date of such transfer of title shall be not less than 1.65X times the
required payments of principal and interest on the Loan for the same
twelve month period as determined by Lender in its sole discretion from
financial statements for the Mortgaged Property in form and substance
satisfactory to Lender and submitted to Lender.
(h) The unpaid principal balance of the Loan shall be not more than sixty
percent (60%) of the appraised value of the Mortgaged Property
according to a current appraisal furnished to and satisfactory to
Lender and prepared by an MAI appraiser acceptable to Lender.
(i) Borrower shall pay all of Lender's reasonable outside costs and
expenses incurred in connection with the proposed sale of the Mortgaged
Property whether or not the sale actually occurs including, without
limitations, attorneys' fees, recording charges, title charges and any
endorsement to Lender's title policy that Lender's counsel may require.
Section 2.18. Estoppel Certificates. Within 10 Business Days of a
request by Lender, Borrower shall furnish to Lender a duly acknowledged written
statement confirming the amount of the outstanding Indebtedness, the terms of
payment and maturity date of the Note, the date to which interest has been paid,
and whether any offsets or defenses exist against the Indebtedness. If any such
offsets or defenses are alleged to exist, the nature thereof shall be set forth
in detail. Borrower shall
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also furnish to Lender within 30 days of its request therefor tenant estoppel
letters from such tenants of the Premises as Lender may require, but such
requests as to any one tenant shall not be made more often than once in a
calendar year period.
Section 2.19. Assignment of Leases and Property Income.
(a) Borrower hereby absolutely and unconditionally assigns and transfers to
Lender the Leases and the Property Income. Borrower shall not otherwise
assign, transfer or encumber in any manner the Leases or the Property
Income or any portion thereof. Borrower shall have a license to collect
and use the Property Income as the same becomes due and payable,
revocable by Lender, so long as no Event of Default has occurred, but
may not collect any Property Income more than 30 days in advance of the
date the same becomes due. The assignment in this Section 2.19 shall
constitute an absolute and present assignment of the Leases and the
Property Income, and not an additional assignment for security, and the
existence or exercise of the Borrower's revocable license to collect
Property Income shall not operate to subordinate this assignment to any
subsequent assignment. The exercise by Lender of any of its rights or
remedies under this Section 2.19 shall not be deemed or construed to
make Lender a mortgagee-in-possession. The assignments contained in
this Section 2.19(a) shall automatically terminate and be null and void
ab initio upon the repayment of the Indebtedness or the release of this
Deed of Trust.
(b) Borrower shall furnish Lender with executed copies of all Leases within
10 days after execution thereof. All proposed Leases and renewals of
existing Leases shall be at rental rates and on terms comparable to
existing local market rates and terms and shall be arms-length
transactions with bona fide, independent third party tenants; provided,
however, that renewals of existing Leases may be made with the existing
parties thereto and upon substantially the same terms as such existing
Leases. All new Leases shall provide that they are subordinate to this
Deed of Trust and that the lessee agrees to attorn to Lender. All
proposed Leases and renewals of existing Leases (other than Leases
described in Subsection 2.19(d)) shall be subject to the prior review
and reasonable approval of Lender and its counsel, at Borrower's
expense.
(c) Borrower shall perform all obligations as lessor under all Leases and
shall enforce all of the terms, covenants and conditions contained in
upon the part of the lessee thereunder to be performed or observed.
Additionally, Borrower shall not take any action which would cause any
Lease to cease to be in full force and effect. Except with the prior
consent of Lender, not to be unreasonably withheld, Borrower shall not
(i) cancel, terminate (other than exercising Borrower's rights to
terminate any Lease upon a lessee's default thereunder and subject to
the terms of Section 2.25(d) hereof), surrender, sublet or assign any
Lease or consent to any cancellation, termination, surrender,
subletting or assignment thereof; (ii) amend, modify or subordinate any
Lease to any mortgage, deed of trust or other security interest that is
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subordinate to this Deed of Trust; (iii) enter into any new Lease
(except as permitted in Section 2.19(d) below); (iv) waive any default
under or breach of any Lease; (v) consent to or accept any prepayment
or discount of rent or advance rent under any Lease; (vi) other than
exercising Borrower's rights to terminate any Lease upon a lessee's
default thereunder (and subject to the terms of Section 2.25(d)
hereof), take any other action in connection with any Lease which may
impair or jeopardize the validity of such Lease or the Lender's
interest therein; or (vii) alter, modify or change the terms of any
guaranty, letter of credit or other credit support with respect to any
of the Leases or cancel or terminate such guaranty, letter of credit or
other credit support without the prior written consent of Lender.
(d) Notwithstanding Section 2.19(b), Lender's prior consent shall not be
required for entering into any new Lease covering 1,000 square feet of
net rentable area or less, or renewals thereof, provided that (i) the
Lease or renewal thereof represents an arm's-length transaction and
provides for the payment of market rents, and (ii) neither the Lease
nor renewal thereof nor the activity of the lessee will violate any
provision of any other Lease or restriction or covenant affecting the
Premises or this Deed of Trust or any other Loan Document, including
Section 2.20(b) hereof. Except for Leases to which Lender's consent is
not required, notice and copies of which shall be furnished only upon
request, Borrower shall give Lender notice of any Lease or renewal
thereof described in this Section 2.19(d), together with a
fully-executed and complete copy of such Lease, not later than 10 days
after the execution thereof.
(e) In addition to the foregoing, Borrower shall comply with all terms and
provisions of the Assignment.
Section 2.20. Environmental Matters; Warranties; Notice; Indemnity.
(a) Borrower represents and warrants to Lender, based upon an environmental
assessment of the Premises and the Equipment and information that
Borrower knows, as follows:
(i) Borrower has not installed, used, generated, manufactured,
produced, stored, released, discharged or disposed of in, on,
under or about the Premises, or transported to or from any
portion of the Premises, any Hazardous Substance or allowed
any other person or entity to do so, except under conditions
permitted by applicable Environmental Laws;
(ii) there are no Hazardous Substances or underground storage tanks
in, on, or under or about the Premises, except those that are
both (A) in compliance with Environmental Laws and with
permits issued pursuant thereto, if necessary, and (B) fully
disclosed to Lender in writing pursuant to the written reports
resulting from environmental
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assessments of the Mortgaged Property delivered to Lender (the
"Environmental Report");
(iii) there are no past, present or threatened Releases of any
Hazardous Substance in, on, under or about the Premises except
as defined in the Environmental Report;
(iv) there is no condition known to Borrower which is expected to
result in any Release of Hazardous Substances migrating to the
Premises except as described in the Environmental Report;
(v) there is no past or present non-compliance with Environmental
Laws, or with permits issued pursuant thereto, in connection
with the Premises or the Equipment except as described in the
Environmental Report;
(vi) Borrower does not know of, and has not received, any written
or oral notice or other communication from any person or
entity (including, but not limited to, a governmental entity)
relating to Hazardous Substances or Remediation thereof, of
possible liability of any person or entity pursuant to any
Environmental Law, other environmental conditions in
connection with the Premises or Equipment, or any actual or
potential administrative or judicial proceedings in connection
with any of the foregoing; and,
(vii) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to any presence or
Release of Hazardous Materials in, on, under and about the
Premises that is known by Borrower and that is contained in
Borrower's files and records, including but not limited to any
reports relating to Hazardous Substances in, on, under or
about the Premises and/or to the environmental condition of
the Premises.
(b) Borrower shall not install, use, generate, manufacture, produce, store,
Release, discharge or dispose of on, under or about the Premises, or
transport to or from any portion of the Premises, any Hazardous
Substance or allow any other person or entity to do so, except under
conditions permitted by applicable Environmental Laws. Additionally,
except with the prior written consent of Lender, no portion of the
Premises shall be leased, used or occupied for dry cleaning operations
(except for drop off dry cleaning operations in the ordinary course of
business) or the storage of any chemicals used in the dry cleaning
process.
(c) Borrower shall keep and maintain the Premises in compliance with, and
shall not cause or permit the Premises to be in violation of,
applicable Environmental Laws.
(d) Borrower shall promptly provide notice to Lender of:
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(i) any proceeding, investigation or inquiry commenced by any
governmental authority with respect to the presence of any
Hazardous Substance on, under or about the Premises or the
migration of any Hazardous Substance to or from adjoining
property to which Borrower has knowledge or has received
notice;
(ii) all claims made or threatened by any person or entity against
Borrower, or to Borrower's knowledge, any other party
occupying the Premises or any portion thereof, or the
Premises, relating to any loss or injury allegedly resulting
from any Hazardous Substance; and
(iii) the discovery of any occurrence or condition on the Premises
or on any real property adjoining or in the vicinity of the
Premises, of which Borrower becomes aware, which might cause
the Premises or any portion thereof to be in violation of any
Environmental Law or subject to any restriction on ownership,
occupancy, transferability or use under any Environmental Law
(collectively, an "Environmental Violation").
(e) Lender and, to the extent authorized by Lender, Trustee may join and
participate in, as a party if Lender so determines, any legal or
administrative proceeding or action concerning the Premises or
Equipment under any Environmental Law. Borrower agrees to bear and
shall pay or reimburse Lender on demand for all Advances and expenses
(including reasonable attorneys' fees) relating to or incurred by
Lender in connection with any such action or proceeding.
(f) Borrower shall indemnify and hold Trustee and Lender and their
respective directors, officers, employees and agents harmless from and
against any and all claims, demands, liabilities, losses, damages,
judgments, penalties, costs and expenses (including reasonable
attorneys' fees) directly or indirectly arising out of or attributable
to a breach of any warranty, representation or other provision
contained in this Section 2.20 including, without limitation, (i) all
actual and consequential damages, (ii) the costs of any required
Remediation, and (iii) the costs of the preparation and implementation
of any plans for Remediation, closure or other required plans. This
indemnity shall survive the satisfaction, release or extinguishment of
the lien of this Deed of Trust including any extinguishment of such
lien by foreclosure or deed in lieu thereof. Notwithstanding anything
to the contrary contained herein, the indemnification provided for
herein shall survive payment of the Note, but shall become null and
void and of no further force and effect in the event Lender or any
other party obtains title to the Mortgaged Property through foreclosure
or exercise of power of sale under this Deed of Trust or deed-in-lieu
of foreclosure or exercise of power of sale.
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Section 2.21. Environmental Matters; Remedial Work.
(a) If any investigation, site monitoring, containment, cleanup, removal,
restoration or other Remediation of any kind or nature (collectively,
the "Remedial Work") is required to be performed by Borrower under any
applicable Environmental Law because of or in connection with the
current or future presence, suspected presence, release or suspected
release of a Hazardous Substance into the air, soil, ground water,
surface water, or soil vapor on, under or about the Premises or any
portion thereof, Borrower shall promptly commence and diligently
prosecute to completion all such Remedial Work. In all events, such
Remedial Work shall be commenced within 45 days after any demand
therefor by Lender or such shorter period as may be required under any
applicable Environmental Law.
(b) All Remedial Work shall be performed by contractors, and under the
supervision of a consulting engineer, each approved in advance by
Lender. All costs and expenses of such Remedial Work and Lender's
monitoring or review of such Remedial Work (including reasonable
attorneys' fees) shall be paid by Borrower. If Borrower does not timely
commence and diligently prosecute to completion the Remedial Work,
Lender may (but shall not be obligated to) cause such Remedial Work to
be performed. Borrower agrees to bear and shall pay or reimburse Lender
on demand for all Advances and expenses (including reasonable
attorneys' fees) relating to or incurred by Lender in connection with
monitoring, reviewing or performing any Remedial Work.
(c) Except with Lender's prior consent (not to be unreasonably withheld),
Borrower shall not commence any Remedial Work or enter into any
settlement agreement, consent decree or other compromise relating to
any Hazardous Substances or Environmental Laws which might, in Lender's
sole judgment, impair the value of Lender's security hereunder.
Lender's prior consent shall not be required, however, if the presence
or threatened presence of Hazardous Substances on, under or about the
Premises poses an immediate threat to the health, safety or welfare of
any person or is of such a nature that an immediate remedial response
is necessary, and it is not possible to obtain Lender's prior consent.
In such event Borrower shall notify Lender as soon as practicable of
any action taken.
Section 2.22. Environmental Matters; Inspection.
(a) Lender shall have the right at all reasonable times to enter upon and
inspect all or any portion of the Premises, provided that Lender makes
an appointment through the general manager of the hotel after
reasonable notice and that such inspections shall not unreasonably
interfere with the normal business operations of the Premises. Lender
may select a consulting engineer to conduct and prepare reports of such
inspections. The inspection rights granted to Lender in this Section
2.22 shall be in addition to, and not in limitation of, any other
inspection rights granted to Lender in this Deed of Trust, and shall
expressly include the right to conduct
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reasonable soil borings and other customary environmental tests,
assessments and audits, so long as Lender restores the Mortgaged
Property to its previous condition.
(b) Borrower agrees to bear and shall pay or reimburse Lender on demand for
all Advances and expenses (including reasonable attorneys' fees)
relating to or incurred by Lender in connection with the inspections
and reports described in this Section 2.22 in the following situations:
(i) If Lender has reasonable grounds to believe, at the time any
such inspection is ordered, that there exists an Environmental
Violation or that a Hazardous Substance is present on, under
or about the Premises or is migrating to or from adjoining
property, except under conditions permitted by applicable
Environmental Laws and not prohibited by any Loan Document;
(ii) if any such inspection reveals an Environmental Violation or
that a Hazardous Substance is present on, under or about the
Premises or is migrating to or from adjoining property, except
under conditions permitted by applicable Environmental Laws
and not prohibited by any Loan Document; or
(iii) if an Event of Default exists at the time any such inspection
is ordered.
Section 2.23. Management. At all times prior to the payment in full of
the Indebtedness, the Mortgaged Property shall be managed by Sheraton or another
management company satisfactory to Lender, and pursuant to the Management
Agreement or another management agreement reasonably satisfactory to Lender.
Such management agreement, and any leasing commissions agreement affecting the
Mortgaged Property, shall be subordinate to this Deed of Trust.
Section 2.24. ERISA. As of the date hereof and throughout the term of
this Deed of Trust, (i) Borrower is not and will not be an "employee benefit
plan" as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA:
(ii) the assets of Borrower do not and will not constitute "plan assets" of one
or more such plans for purposes of Title I of ERISA: (iii) Borrower is not and
will not be a "governmental plan" within the meaning of Section 3(3) of ERISA;
(iv) transactions by or with Borrower are not and will not be subject to state
statutes applicable to Borrower regulating investments of fiduciaries with
respect to governmental plans; and (v) Borrower shall not engage in any
transaction which would cause any obligation, or action taken or to be taken,
hereunder (or the exercise by Lender of any of its rights under this Deed of
Trust, the Note, or the other Loan Documents) to be a non-exempt (under a
statutory or administrative class exemption) prohibited transaction under ERISA.
Borrower further agrees to deliver to Lender such certifications or other
evidence of compliance with the provisions of this Section 2.24 as Lender may
from time to time request.
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Section 2.25. Operating Agreements. In connection with the Operating
Agreements, Trustor acknowledges and agrees as follows:
(a) no Operating Agreement shall be amended, modified, supplemented,
restated or otherwise altered by Trustor, nor shall Trustor consent or
otherwise acquiesce in any of the foregoing, without in each instance
Beneficiary's prior written consent, which consent shall not be
unreasonably withheld;
(b) no Operating Agreement shall be terminated by Trustor unless such
terminated Operating Agreement is replaced with a similar agreement
upon terms and conditions, and with such third parties, as are
reasonably acceptable to Lender;
(c) Trustor will deliver to Beneficiary, at the same time received or sent
by Trustor, copies of all notices, demands or requests sent or
otherwise made by Trustor or any other Person under or pursuant to any
Operating Agreement;
(d) the term of any Operating Agreement shall not be extended or otherwise
renewed by Trustor (unless pursuant to a right currently afforded
Trustor thereunder) without in each instance Beneficiary's prior
written approval, such approval not to be unreasonably withheld;
(e) Trustor agrees to observe, perform and discharge all obligations,
covenants and warranties required to be kept and performed by Trustor
under the Operating Agreements; and
(f) Trustor shall use best efforts to enforce or secure the performance of
each and every material obligation, term, covenant, condition and
agreement to be performed by any other party to any of the Operating
Agreements.
Section 2.26. Single-Purpose Entity. Borrower shall at all times be a
Single-Purpose Entity.
ARTICLE III
Security Agreement
Section 3.01. Warranties, Representations and Covenants of Borrower.
Borrower covenants, warrants, represents and agrees with and to Trustee and
Lender as follows:
(a) This Deed of Trust constitutes a security agreement under the Code and
serves as a fixture filing in accordance with the Code. This Deed of
Trust creates a security interest in favor of Lender as secured party
under the Code with respect to all property (specifically including the
Collateral) included in the Mortgaged Property which is covered by the
Code. The mention of
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any portion of the Mortgaged Property in a financing statement filed in
the records normally pertaining to personal property shall not derogate
from or impair in any manner the intention of Borrower and Lender
hereby declared that all items of Collateral described in this Deed of
Trust are part of the real property encumbered hereby to the fullest
extent permitted by law, regardless of whether any such item is
physically attached to the Improvements or whether serial numbers are
used for the better identification of certain items. Specifically, the
mention in any such financing statement of (i) the rights in or the
Proceeds of any policy of insurance, (ii) any condemnation Proceeds,
(iii) Borrower's interest in any Leases or Property Income, or (iv) any
other item included in the Mortgaged Property, shall not be construed
to alter, impair or impugn any rights of Lender as determined by this
Deed of Trust or the priority of Lender's lien upon and security
interest in the Mortgaged Property. Any such mention shall be for the
protection of Lender in the event that notice of Lender's priority of
interest as to any portion of the Mortgaged Property is required to be
filed in accordance with the Code to be effective against or take
priority over the interest of any particular class of persons,
including the federal government or any subdivision or instrumentality
thereof.
(b) Except for the security interest granted by the Loan Documents,
Borrower is and, as to portions of the Collateral to be acquired after
the date hereof, will be the sole owner of the Collateral, free from
any lien, security interest, encumbrance or adverse claim thereon of
any kind whatsoever except Permitted Encumbrances. Borrower shall
notify Lender of, and shall defend the Collateral against, all claims
and demands of all persons at any time claiming the same or any
interest therein. Notwithstanding anything to the contrary contained in
the Loan Documents, Borrower shall have the right during the term of
the Loan to secure the purchase of up to $300,000 of Equipment for the
Mortgaged Property with secondary financing including equipment leases.
(c) Except as otherwise provided in this Deed of Trust, Borrower shall not
lease, sell, convey or in any manner transfer the Collateral without
the prior consent of Lender.
(d) The Collateral is not used or bought for personal, family or household
purposes.
(e) The Collateral shall be kept on or at the Premises, and Borrower shall
not remove the Collateral from the Premises without the prior consent
of Lender, except such portions or items of the Collateral as are
consumed or worn out in ordinary usage, all of which shall be promptly
replaced by Borrower with items of equal or greater value.
(f) In the event of any change in name, identity or structure of Borrower,
Borrower shall notify Lender thereof and promptly after request shall
execute, file and record such Code forms as are necessary to maintain
the priority of Lender's lien upon and security interest in the
Collateral, and shall pay all reasonable expenses and fees in
connection with the filing and recording
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thereof. If Lender shall require the filing or recording of additional
Code forms or continuation statements, Borrower shall, promptly after
request, execute, file and record such Code forms or continuation
statements as Lender shall deem necessary (subject to Lender's right to
sign such statements on behalf of Borrower as provided in Subsection
3.01(g)), and shall pay all reasonable expenses and fees in connection
with the filing and recording thereof. If Lender shall initially pay
such expenses, Borrower shall promptly reimburse Lender for the
expenses.
(g) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to execute in the name of and on behalf of
Borrower any and all financing statements and continuations thereof and
to file with the appropriate public office on its behalf and at its
expense any financing or other statements signed only by Lender, as
secured party, in connection with the Collateral covered by this Deed
of Trust.
Section 3.02. Financing Statements. A CARBON, PHOTOGRAPHIC OR OTHER
REPRODUCTION OF THIS DEED OF TRUST OR ANY FINANCING STATEMENT RELATING TO THIS
DEED OF TRUST SHALL BE SUFFICIENT AS A FINANCING STATEMENT.
Section 3.03. Addresses. The mailing address of Borrower and the
address of Lender from which information concerning the security interest
granted hereby may be obtained are set forth on the Cover Sheet of this Deed of
Trust. Borrower maintains its sole place of business or its chief executive
office at the address shown on said Cover Sheet, and Borrower shall immediately
notify Lender in writing of any change in said place of business or chief
executive office.
ARTICLE IV
Default and Remedies
Section 4.01. Events of Default. Each of the following shall, after the
expiration of any notice and cure period provided for in the Note, constitute an
Event of Default under this Deed of Trust, the Note and the other Loan
Documents:
(a) failure in the payment of any amount due as and when due under this
Deed of Trust, the Note or any other Loan Document;
(b) failure to pay any Imposition as and when due or to maintain insurance
as required by this Deed of Trust;
(c) default in the due observance or performance of any term, covenant or
condition contained in this Deed of Trust, the Note or any other Loan
Document;
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(d) if any representation made herein or in any other Loan Document shall
prove to be untrue in any material respect;
(e) violation of any of the covenants set forth in Section 2.17 with
respect to conveyances, sales, encumbrances or other prohibited
dispositions of the Mortgaged Property or Borrower or any portion
thereof or any interest therein;
(f) violation of any of the covenants set forth in Section 2.19(a) with
respect to the further assignment, transfer or encumbrance by Borrower
of the Leases or the Property Income or any portion thereof;
(g) violation of any of the covenants set forth as items (i) through (vi)
of Section 2.19(c) with respect to certain actions concerning Leases
which shall not be taken by Borrower without the prior consent of
Lender;
(h) if Borrower, any general partner of Borrower or Guarantor consents to
the filing of, or commences or consents to the commencement of, any
Bankruptcy Proceeding with respect to Borrower or Guarantor;
(i) if any Bankruptcy Proceeding shall have been filed against Borrower,
any general partner of Borrower or Guarantor and the same is not
withdrawn, dismissed, canceled or terminated within 90 days of such
filing;
(j) if Borrower, any general partner of Borrower or Guarantor is
adjudicated bankrupt or insolvent or a petition for reorganization of
Borrower or any such general partner or Guarantor is granted;
(k) if a receiver, liquidator or trustee of Borrower, any general partner
of Borrower or Guarantor or of any of the properties of Borrower or any
such general partner or Guarantor shall be appointed;
(l) if Borrower, any general partner of Borrower or Guarantor shall make an
assignment for the benefit of its creditors or shall admit in writing
the inability to pay its debts generally as they become due;
(m) except as otherwise permitted herein, if Borrower, any general partner
of Borrower, or Guarantor shall die or shall institute or cause to be
instituted any proceeding for the termination or dissolution of
Borrower or any such general partner or Guarantor;
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(n) if a default or event of default shall occur under any mortgage, deed
of trust, encumbrance, lien or security agreement (except for equipment
leases) encumbering all or any portion of the Mortgaged Property which
is subordinate or superior to the lien of this Deed of Trust or if any
party under any such instrument shall commence a foreclosure or other
collection or enforcement action in connection therewith, provided,
however, that this provision shall not be deemed to be a waiver of the
provisions of Section 2.17 prohibiting further encumbrances or of any
other provision of this Deed of Trust, it being understood that it is
an event of default under this Deed of Trust to permit any further
mortgage, encumbrance, lien or security agreement to encumber all or
any portion of the Mortgaged Property except as expressly permitted
herein;
(o) except as permitted in this Deed of Trust, the actual or threatened
alteration, demolition or removal of any of the Improvements without
the prior consent of Lender, which shall not be unreasonably withheld;
(p) damage to any of the Mortgaged Property in any manner which is not
covered by insurance as a result of Borrower's failure to maintain
insurance required in accordance with this Deed of Trust;
(q) default by [FCH/SH Leasing] [FCH/SH Leasing II] in the due observance
or performance of any term, covenant or condition contained in any
Operating Agreement or the Agreement Concerning Primary Lease Agreement
without Borrower timely curing such default pursuant to its contractual
rights to do so; or
(r) default by Guarantor in the due observance or performance of any term,
covenant or condition contained in any separate guaranty or separate
indemnity agreement executed by Guarantor in connection with the Loan.
In the event of a conflict between the provisions of this Section
4.01., and the provisions of the Note, the provisions of the Note shall control.
Section 4.02. Remedies. Upon the occurrence of any Event of Default,
Lender may take such actions against Borrower and/or the Mortgaged Property or
any portion thereof as it deems advisable, subject to Section 11 of the Note, to
protect and enforce its rights against Borrower and in and to the Mortgaged
Property, without notice or demand except as set forth below. Any such actions
taken by Lender shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at such time and in
such order as Lender may determine in its sole discretion, to the fullest extent
permitted by law, without impairing or otherwise affecting the other rights and
remedies of Lender permitted by law, equity or contract or as set forth herein
or in the other Loan Documents. All actions shall be subject to Section 11 of
the Note and may include the following:
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(a) Subject to any applicable provisions of the Note, Lender may declare
the entire principal balance under the Note then unpaid, together with
all accrued and unpaid interest thereon, and all other unpaid
Indebtedness, to be immediately due and payable.
(b) Lender may enter into or upon the Mortgaged Property, personally or by
its agents, nominees or attorneys, and may dispossess Borrower and its
agents and servants therefrom, and thereupon Lender at its sole
discretion may: (i) use, operate, manage, control, insure, maintain,
repair, restore and otherwise deal with all and every portion of the
Mortgaged Property and conduct business thereon, in any case either in
the name of Lender or in such other name as Lender shall deem best;
(ii) complete any construction on the Mortgaged Property in such manner
and form as Lender deems advisable; (iii) make alterations, additions,
renewals, replacements and improvements to or on the Mortgaged
Property; (iv) exercise all rights and powers of Borrower with respect
to the Mortgaged Property, whether in the name of Borrower or
otherwise, including the right to make, cancel, enforce or modify
Leases, obtain and evict tenants, and demand, ▇▇▇ for, collect and
receive all Property Income; and (v) apply the receipts of Property
Income to the payment of the Indebtedness (including any prepayment fee
payable under the Note) in such order as Lender shall determine in its
sole discretion, after deducting therefrom all expenses (including
reasonable attorneys' fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the Impositions, insurance
and other charges in connection with the Mortgaged Property, as well as
just and reasonable compensation for the services of Lender, its
agents, nominees and attorneys.
(c) Subject to any applicable provisions of the Note, with or without
entry, personally or by its agents, nominees or attorneys, Lender may
require Trustee to sell all or any portion of the Mortgaged Property
and all or any portion of Borrower's estate, right, title, interest,
claim and demand therein and right of redemption thereof at one or more
private or public sales in the manner and to the extent permitted by
law, as an entirety or in parcels or portions, and Trustee shall have
any statutory power of sale as may be provided by law in the State.
(d) Subject to any applicable provisions of the Note, Lender may institute
proceedings for the complete foreclosure of this Deed of Trust, in
which case the Mortgaged Property may be sold for cash or upon credit,
as an entirety or in parcels or portions.
(e) Subject to any applicable provisions of the Note, Lender may institute,
or require Trustee to institute, proceedings for the partial
foreclosure of this Deed of Trust for the portion of the Indebtedness
then due and payable, subject to the continuing lien of this Deed of
Trust for the balance of the Indebtedness not then due.
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(f) Lender may institute, or require Trustee to institute, an action, suit
or proceeding at law or in equity for the specific performance of any
covenant, condition or agreement contained herein or in the Note or any
other Loan Document, or in aid of the execution of any power granted
hereunder or for the enforcement of any other appropriate legal or
equitable remedy.
(g) Lender and Trustee shall have the rights and may take such actions as
are permitted by the laws of the State.
(h) Subject to any applicable provisions of the Note, Lender may recover
judgment on the Note, either before, during or after any proceedings
for the foreclosure or enforcement of this Deed of Trust.
(i) Lender may secure the appointment of a receiver, trustee, liquidator or
similar official of the Mortgaged Property or any portion thereof, and
Borrower hereby consents and agrees to such appointment, without notice
to Borrower and without regard to the adequacy of the security for the
Indebtedness and without regard to the solvency of Borrower or any
other person, firm or entity liable for the payment of the
Indebtedness, and such receiver or other official shall have all rights
and powers permitted by applicable law and such other rights and powers
as the court making such appointment may confer, but the appointment of
such receiver or other official shall not impair or in any manner
prejudice the rights of Lender to receive the Property Income pursuant
to this Deed of Trust or the Assignment.
(j) Lender may exercise any or all of the remedies available to a secured
party under the Code, but any sale of the Equipment shall be subject to
any applicable provisions of the Note.
(k) Lender may pursue, or require Trustee to pursue, any other rights and
remedies of Lender permitted by law, equity or contract or as set forth
herein or in the other Loan Documents.
(l) Lender may apply any funds then on deposit with Lender for payment of
Impositions, ground rent or insurance premiums in the manner provided
for in Section 2.07.
(m) Lender in its sole discretion may surrender any insurance policies and
collect the unearned premiums and apply such sums against the
Indebtedness.
Section 4.03. General Provisions Regarding Remedies.
(a) Effect of Judgment. No recovery of any judgment by Lender or Trustee
and no levy of an execution under any judgment upon the Mortgaged
Property or upon any other property of Borrower shall affect in any
manner or to any extent the lien of this Deed of Trust upon the
Mortgaged Property or any portion thereof, or any rights, powers or
remedies of Lender or
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Trustee hereunder. Such lien, rights, powers and remedies of Lender and
Trustee shall continue unimpaired as before.
(b) Continuing Power of Sale. The power of sale conferred upon Lender in
this Deed of Trust shall not be exhausted by any one or more sales as
to any portion of the Mortgaged Property remaining unsold, but shall
continue unimpaired until all of the Mortgaged Property is sold or all
of the Indebtedness is paid.
(c) Right to Purchase. At any sale of the Mortgaged Property or any portion
thereof pursuant to the provisions of this Deed of Trust, Lender or
Trustee shall have the right to purchase the Mortgaged Property being
sold, and in such case shall have the right to credit against the
amount of the bid made therefor (to the extent necessary) all or any
portion of the Indebtedness then due.
(d) Right to Terminate Proceedings. Lender or Trustee may terminate or
rescind any proceeding or other action brought in connection with its
exercise of the remedies provided in Section 4.02 at any time before
the conclusion thereof, as determined in Lender's sole discretion and
without prejudice to Lender.
(e) No Waiver or Release. Lender may resort, or require Trustee to resort,
to any remedies and the security given by the Loan Documents, in whole
or in part, and in such portions and in such order as determined in
Lender'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 Loan Documents. The failure of Lender or Trustee to exercise any
right, remedy or option provided in the Loan Documents shall not be
deemed a waiver of such right, remedy or option or of any covenant or
obligation secured by the Loan Documents. No acceptance by Lender or
Trustee of any payment after the occurrence of an Event of Default and
no payment by Lender or Trustee of any Advance or obligation for which
Borrower is liable hereunder shall be deemed to waive or cure such
Event of Default or Borrower's liability to pay such obligation. No
sale of all or any portion of the Mortgaged Property, no forbearance on
the part of Lender or Trustee, and no extension of time for the payment
of the whole or any portion of the Indebtedness or any other indulgence
given by Lender or Trustee to Borrower or any other person or entity,
shall operate to release or in any manner affect Lender's or Trustee's
interest in the Mortgaged Property or the liability of Borrower to pay
the Indebtedness, except to the extent that such liability shall be
reduced by Proceeds of the sale of all or any portion of the Mortgaged
Property received by Lender. No waiver by Lender or Trustee shall be
effective unless it is in writing and then only to the extent
specifically stated.
(f) No Impairment; No Release. The interests and rights of Lender or
Trustee under the Loan Documents shall not be impaired by any
indulgence, including (i) any renewal, extension or
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modification which Lender may grant with respect to any of the
Indebtedness; (ii) any surrender, compromise, release, renewal,
extension, exchange or substitution which Lender or Trustee may grant
with respect to the Mortgaged Property or any portion thereof; or (iii)
any release or indulgence granted to any maker, endorser, guarantor or
surety of any of the Indebtedness. Subject to Section 11 of the Note,
if the Mortgaged Property is sold and Lender enters into any agreement
with the then owner of the Mortgaged Property extending the time of
payment of the Indebtedness, or otherwise modifying the terms hereof or
of any other Loan Document, Borrower shall continue to be liable to pay
the Indebtedness according to the tenor of any such agreement unless
expressly released and discharged in writing by Lender.
(g) WAIVERS AND AGREEMENTS REGARDING REMEDIES. TO THE FULLEST EXTENT THAT
BORROWER MAY LEGALLY DO SO, BORROWER:
(i) AGREES THAT BORROWER WILL NOT AT ANY TIME INSIST UPON, PLEAD,
CLAIM OR TAKE THE BENEFIT OR ADVANTAGE OF ANY LAWS NOW OR
HEREAFTER IN FORCE PROVIDING FOR ANY APPRAISAL OR
APPRAISEMENT, VALUATION, STAY, EXTENSION OR REDEMPTION, AND
WAIVES AND RELEASES ALL RIGHTS OF REDEMPTION, VALUATION,
APPRAISAL OR APPRAISEMENT, STAY OF EXECUTION, EXTENSION AND
NOTICE OF ELECTION TO ACCELERATE OR DECLARE DUE THE WHOLE OF
THE INDEBTEDNESS;
(ii) WAIVES ALL RIGHTS TO A MARSHALING OF THE ASSETS OF BORROWER,
BORROWER'S PARTNERS, IF ANY, AND OTHERS WITH INTERESTS IN
BORROWER, INCLUDING THE MORTGAGED PROPERTY, OR TO A SALE IN
INVERSE ORDER OF ALIENATION IN THE EVENT OF FORECLOSURE OF THE
INTERESTS HEREBY CREATED, 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 LENDER
UNDER THE LOAN DOCUMENTS TO A SALE OF THE MORTGAGED PROPERTY
FOR THE COLLECTION OF THE INDEBTEDNESS WITHOUT ANY PRIOR OR
DIFFERENT RESORT FOR COLLECTION, OR THE RIGHT OF LENDER OR
TRUSTEE TO THE PAYMENT OF THE INDEBTEDNESS OUT OF THE PROCEEDS
OF SALE OF THE MORTGAGED PROPERTY IN PREFERENCE TO EVERY OTHER
CLAIMANT WHATSOEVER;
(iii) WAIVES ANY RIGHT TO BRING OR UTILIZE ANY DEFENSE, COUNTERCLAIM
OR SETOFF, OTHER THAN ONE IN GOOD FAITH, WHICH DENIES THE
EXISTENCE OR SUFFICIENCY OF THE FACTS UPON WHICH THE
FORECLOSURE ACTION IS GROUNDED OR WHICH IS BASED ON LENDER'S
OR TRUSTEE'S WRONGFUL ACTIONS. IF ANY DEFENSE, COUNTERCLAIM OR
SETOFF (OTHER THAN ONE PERMITTED BY THE PRECEDING SENTENCE) IS
RAISED BY BORROWER IN SUCH FORECLOSURE ACTION, SUCH DEFENSE,
COUNTERCLAIM OR SETOFF SHALL BE DISMISSED. IF SUCH DEFENSE,
COUNTERCLAIM OR SETOFF IS BASED ON A CLAIM WHICH COULD BE
TRIED IN AN ACTION FOR MONEY DAMAGES, THE FOREGOING WAIVER
SHALL NOT BAR A SEPARATE
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ACTION FOR SUCH DAMAGE (UNLESS SUCH CLAIM IS REQUIRED BY LAW
OR APPLICABLE RULES OF PROCEDURE TO BE PLEADED IN OR
CONSOLIDATED WITH THE ACTION INITIATED BY LENDER OR TRUSTEE),
BUT SUCH SEPARATE ACTION SHALL NOT THEREAFTER BE CONSOLIDATED
WITH LENDER'S OR TRUSTEE'S FORECLOSURE ACTION. THE BRINGING OF
SUCH SEPARATE ACTION FOR MONEY DAMAGES SHALL NOT BE DEEMED TO
AFFORD ANY GROUNDS FOR STAYING ANY SUCH FORECLOSURE ACTION;
(iv) WAIVES AND RELINQUISHES ANY AND ALL RIGHTS AND REMEDIES WHICH
BORROWER MAY HAVE OR BE ABLE TO ASSERT BY REASON OF THE
PROVISIONS OF ANY LAWS PERTAINING TO THE RIGHTS AND REMEDIES
OF SURETIES, INCLUDING WITHOUT LIMITATION,
_________________________, OR ANY CORRESPONDING FUTURE STATUTE
OR RULE OF LAW;
(v) WAIVES THE DEFENSE OF LACHES AND ANY APPLICABLE STATUTES OF
LIMITATION; AND
(vi) WAIVES ANY RIGHT TO HAVE ANY TRIAL, ACTION OR PROCEEDING TRIED
BY A JURY.
(h) Lender's Discretion. Lender may exercise its rights, options and
remedies and may make all decisions, judgments and determinations under
this Deed of Trust and the other Loan Documents in its sole unfettered
discretion.
(i) Recitals of Facts. Intentionally Deleted.
(j) Lender's Right to Waive, Consent or Release. Lender may at any time, in
writing, (i) waive compliance by Borrower with any covenant herein made
by Borrower to the extent and in the manner specified in such writing;
(ii) consent to Borrower's doing any act which Borrower is prohibited
hereunder from doing, or consent to Borrower's failing to do any act
which Borrower is required hereunder to do, to the extent and in the
manner specified in such writing; or (iii) release or require Trustee
to release any portion of the Mortgaged Property, or any interest
therein, from this Deed of Trust and the lien of the other Loan
Documents. No such act shall in any way impair the rights of Lender or
Trustee hereunder except to the extent specified by Lender in such
writing.
(k) Possession of the Mortgaged Property. Upon the occurrence of any Event
of Default hereunder and demand by Lender at its option, Borrower shall
immediately surrender or cause the surrender of possession of the
Premises to Lender subject to the Permitted Encumbrances. Except as
expressly provided in any separate written agreement between Lender and
any other occupant of the Premises, if Borrower or such occupant is
permitted to remain in possession, such possession shall be as tenant
of Lender and such occupant (i) shall on demand pay to Lender monthly,
in advance, reasonable use and occupancy charges for the space so
occupied, and (ii) in default thereof, may be dispossessed by the usual
summary proceedings. Upon
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demand, Borrower shall assemble the Collateral and make it available at
the Premises to allow Lender to take possession and/or dispose of the
Collateral. The covenants herein contained may be enforced by a
receiver of the Mortgaged Property or any portion thereof. Nothing in
this Section 4.03(k) shall be deemed a waiver of the provisions of this
Deed of Trust prohibiting the sale or other disposition of the
Mortgaged Property without Lender's consent except as and to the extent
expressly permitted in the Loan Documents.
(l) Limitations on Liability
(i) Notwithstanding anything to the contrary contained in any of
the Loan Documents or the Related Loan Documents but subject
to the provisions of this Section 4.03(l), in any action or
proceedings brought on this Deed of Trust, the Note or on any
of the Loan Documents in which a money judgment is sought,
Lender and Trustee will look solely to the Mortgaged Property
(including the Property Income) for payment of the
Indebtedness and, specifically and without limitation, Lender
and Trustee agree to waive any right to seek or obtain a
deficiency judgment against Borrower.
(ii) The provisions of Section 4.03(1)(i) shall not
(u) constitute a waiver, release or impairment of any
obligation evidenced or secured by this Deed of Trust, the
Note or any other Loan Document by either Lender or Trustee to
the extent of the Mortgaged Property securing such obligation;
(v) be deemed to be a waiver of any right which Lender or
Trustee may have under Sections 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 Indebtedness secured by this Deed
of Trust or to require that all Collateral shall continue to
secure all of the Indebtedness owing to Lender in accordance
with the Note, this Deed of Trust and the Loan Documents;
(w) impair the right of the Lender or Trustee to name the
Borrower or any principals of Borrower or any guarantor of the
Note as a party or parties defendant in any action or suit for
judicial foreclosure and sale under this Deed of Trust;
(x) affect the validity or enforceability of, or limit
recovery under, any separate indemnity agreement (including
the environmental indemnity set forth in any separate
environmental indemnity agreement, however designated), or
guaranty made in connection with this Deed of Trust, the Note
or the Loan Documents;
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(y) impair the right of the Lender or Trustee to obtain the
appointment of a receiver; or,
(z) impair Lender's or Trustee's rights and remedies under
Section 2.19 of this Deed of Trust regarding the assignment of
Leases and Property Income to Lender or under the Assignment.
(iii) Notwithstanding any provisions of this Subsection 4.03(l),
nothing herein shall be deemed to impair or prejudice in any
way the right of Lender or Trustee (which right is
specifically reserved) to pursue or obtain personal recourse
liability against Borrower, or Guarantor to recover Losses
incurred by Lender or Trustee arising out of or resulting
from:
(u) obligations and liabilities under any separate guaranty or
separate indemnity agreement;
(v) fraud or material misrepresentation in connection with the
Application or the making of the Loan;
(w) insurance and/or condemnation proceeds received but not
paid over or applied in accordance with the Loan Documents;
(x) misappropriation of any security deposits, advances or
prepaid rents, cancellation or termination payments or other
similar sums received by Borrower from any tenants or other
occupants of the Premises;
(y) personal property covered by Lender's security interest
obtained in connection with the Loan which is taken from the
Mortgaged Property by or on behalf of Borrower and not
replaced in the ordinary course of business with personal
property of the same utility and of the same or greater value;
(z) any act of arson, malicious destruction or material waste
by Borrower, any principal, affiliate, member or general or
limited partner of Borrower, or by any guarantor or indemnitor
under any of the Loan Documents given to Lender in connection
with the making of the Loan;
(aa) revenues of the Mortgaged Property which are not applied
to payments due under the Loan or to operating expenses of the
Mortgaged Property (including, without limitation, any
reserves or escrows required by any Loan Document) thereby
resulting in, or contributing materially to, a default under
the
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Loan Documents. Lender, however, shall have no right to
recover distributions from the revenues of the Mortgaged
Property to Borrower or Guarantor or any principal of Borrower
or Guarantor made in good faith (after determining the
sufficiency of revenues to cover the payments on the Loan and
the foregoing operating and capital expenses) more than ninety
(90) days prior to a default occurring under any Loan
Document;
(bb) [FCH/SH Leasing] [FCH/SH Leasing II]'s pledge in
violation of the Loan Documents of the revenues or operating
accounts relating to the Mortgaged Property, Lessee's Personal
Property (as defined in the Primary Lease) or any other rights
of [FCH/SH Leasing] [FCH/SH Leasing II] under the Primary
Lease or [FCH/SH Leasing] [FCH/SH Leasing II]'s failure to
keep all of the foregoing lien free in violation of the Loan
Documents;
(cc) any fraudulent conveyance or transfer (or claim of any
fraudulent conveyance or transfer) of any of the Mortgaged
Properties (or any interest therein) to Borrower;
(dd) the bankruptcy or insolvency of any fee owner of any of
the Mortgaged Properties other than Borrower; or
(ee) any transfer or mortgage tax (or claim of any transfer or
mortgage tax) arising from the transfer to Borrower or
mortgage by the fee owner or Borrower of any of the Mortgaged
Properties or any interest therein.
(iv) Notwithstanding the foregoing and subject to the last sentence
of this paragraph, the agreement of Lender and Trustee not to
pursue recourse liability as set forth in Section 4.03(l)(i)
above SHALL AUTOMATICALLY BECOME NULL AND VOID and be of no
further force and effect in the event (x) Borrower, any
general partner or member (if Borrower shall be a limited
liability company) of Borrower or any guarantor of the
Indebtedness files or consents to the filing of any petition
under the U.S. Bankruptcy Code respecting its or their debts,
or (y) any such petition shall have been filed against any of
the foregoing which is not dismissed within 90 days of such
filing; except for an involuntary bankruptcy filed by Lender
and provided further, that if: (1) after ninety (90) days
following the filing of an involuntary bankruptcy proceeding,
such proceeding is dismissed with prejudice and without
adversely affecting the enforceability or priority of any of
the Loan Documents; and (2) such dismissal occurs prior to the
occurrence of any of the following: (v) the entry of any order
that adversely affects the enforceability or priority of any
of the Loan Documents (other than solely by reason of the
automatic stay), (w) the entry of
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any order granting any person relief from the automatic stay
to foreclose against, enforce any lien or security interest,
levy upon, or repossess any material assets of Borrower that
constitute a part of, or that relate to the Mortgaged
Properties, or to terminate any Management Agreement or
Primary Lease, (x) the liquidation of any material assets of
Borrower that constitute a part of, or that relate to, the
Mortgaged Properties, (y) the entry of any order approving the
rejection or termination of any Primary Lease or any
Management Agreement, or (z) the entry of any order approving
any plan of reorganization for Borrower; and (3) throughout
the period following the filing of such bankruptcy proceeding,
Borrower or one or more of Borrower and persons or entities
having an interest in Borrower have continued to make regular
payments of debt service on a timely basis in accordance with
the provisions of the Loan Documents. Borrower or one or more
of Borrower and Guarantor shall be personally liable only for
the actual damages, losses, costs, and expenses (including
attorneys' fees) incurred by Lender (expressly including any
diminution, loss or damage to the Collateral) as a result of
such bankruptcy filing.
(m) Subrogation. If all or any portion of the proceeds of the Note or any
Advance shall be used directly or indirectly to pay off, discharge or
satisfy, in whole or in part, any prior lien or encumbrance upon the
Mortgaged Property or any portion thereof, then Lender and Trustee
shall be subrogated to, and shall have the benefit of the priority of,
such other lien or encumbrance and any additional security held by the
holder thereof.
(n) Additional Provisions Regarding Remedies.
(i) Should Lender elect to foreclose by exercise of power of sale
set forth in this Deed of Trust, then upon receipt of such
notice from Lender, Trustee shall cause to be recorded,
published, posted and mailed to Borrower and other persons as
required by law a Notice of Trustee's Sale in the manner
required by law. Without further notice to Borrower and after
the lapse of such time as may then be required by law, Trustee
shall sell the Mortgaged Property at the time and place of
sale fixed by it in said Notice of Trustee's Sale or as
otherwise provided by law. The Mortgaged Property may be sold
as a whole or in such separate lots, parcels or items as
Trustee shall deem expedient, and such order as Trustee may
determine, at public auction in the manner provided by law.
Trustee shall deliver to the purchaser or purchasers its good
and sufficient deed or deeds conveying the property so sold,
but without any covenant or warranty, express or implied. Any
person, including Borrower, Trustee or Lender, may purchase at
such sale.
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(ii) After deducting all costs, fees and expenses of Trustee and of
this Deed of Trust, including reasonable attorneys' fees and
all costs of title reports and other evidence of title and any
appraisals, environmental and other professional reports
obtained by Lender or Trustee in connection with the sale,
Trustee shall apply the proceeds of sale to payment of the
Indebtedness and the remainder, if any, to the person or
persons legally entitled thereto, or as provided in
_________________.
(iii) Trustee may postpone the sale of all or any portion of the
Mortgaged Property or change the place of sale in the manner
provided by law.
(iv) The power of sale under this Deed of Trust shall not be
exhausted by any one or more sales (or attempted sales) as to
all or any portion of the Mortgaged Property remaining unsold,
but shall continue unimpaired until all of the Mortgaged
Property has been sold and all of the Indebtedness has been
paid in full.
(o) Additional Remedies. Subject to the provisions of Section 4.03(l)
hereof, Lender shall have, in addition to all other rights and remedies
provided herein and in the Loan Documents and at law or in equity, the
rights and remedies afforded by _________________, without regard to
the adequacy of the security or to the solvency of Borrower or to
whether Trustee or Lender has commenced to exercise any other right or
remedy herein or in any other Loan Document or at law or in equity.
(p) Accurate Reflection. Borrower hereby acknowledges and agrees that the
Loan Documents accurately reflect the agreements and understandings of
the parties thereto with respect to the subject matter thereof, and
hereby waives any claims against Lender that Borrower may now have or
may hereafter acquire to the effect that the actual agreements and
understandings of the parties to the Loan Documents, with respect to
the subject matter thereof, may not be accurately set forth in the Loan
Documents.
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ARTICLE V
Trustee
Section 5.01. Certain Actions of Trustee. Upon the written request of
Lender, Trustee may at any time (a) reconvey all or any portion of the Mortgaged
Property, (b) consent to the making of any map or plat thereof, (c) join in
granting any easement thereon or in creating any covenants or conditions
restricting the use or occupancy thereof, or (d) join in any extension agreement
or in any agreement subordinating the lien or charge hereof. Any such action may
be taken by Trustee without notice, and shall not affect the personal liability
of any person for the payment of the Indebtedness or the lien of this Deed of
Trust upon the Mortgaged Property for the full amount of the Indebtedness.
Section 5.02. Reconveyance. Upon the written request of Lender stating
that all sums secured hereby have been paid, and upon payment of its fees,
Trustee shall reconvey without warranty the Mortgaged Property then held by
Trustee hereunder.
Section 5.03. Trustee's Covenants and Compensation. Trustee, by its
acceptance hereof, covenants faithfully to perform and fulfill the trust herein
created, being liable, however, only for negligence or willful misconduct.
Trustee hereby waives any statutory fee and shall be entitled to, and hereby
agrees to accept, reasonable compensation in lieu thereof for all services
rendered or expenses incurred in the administration or execution of the trust
hereby created. Borrower hereby agrees to pay such compensation subject to any
applicable legal limitations.
Section 5.04. Substitution of Trustee. Lender at any time in its sole
discretion may select and appoint a successor or substitute Trustee hereunder by
instrument in writing in any manner now or hereafter provided by law. Such
writing, upon recordation in the county where the Land is located, shall be
conclusive proof of proper substitution of such successor or substitute Trustee
which shall thereupon and without conveyance from the predecessor Trustee
succeed to all its title, estate rights, powers and duties.
Section 5.05. Resignation of Trustee. Trustee may resign at any time
upon giving 30 days' notice to Borrower and to Lender.
Section 5.06. Ratification of Acts of Trustee. Borrower hereby ratifies
and confirms any and all acts which Trustee named herein or its successors or
assigns in this trust shall do lawfully by virtue hereof.
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ARTICLE VI
Miscellaneous
Section 6.01. Notices.
(a) All notices, consents, approvals and requests required or permitted
hereunder or under any other Loan Document shall be given in writing
and shall be effective for all purposes if hand delivered or sent by
(i) certified or registered United States mail, postage prepaid, or
(ii) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, addressed in
either case to any party hereto at its address as stated on the Cover
Sheet of this Deed of Trust, or at such other address and person as
shall be designated from time to time by Lender or Borrower, as the
case may be, in a written notice to the other party in the manner
provided for in this Section 6.01. A notice shall be deemed to have
been given: in the case of hand delivery, at the time of delivery; in
the case of registered or certified mail, three Business Days after
deposit in the United States mail; or in the case of expedited prepaid
delivery, upon the first attempted delivery on a Business Day. A party
receiving a notice which does not comply with the technical
requirements for notice under this Section 6.01 may elect to waive any
deficiencies and treat the notice as having been properly given.
(b) Borrower shall notify Lender promptly of the occurrence of any of the
following: (i) receipt of notice from any governmental authority of
material violations of applicable law relating to the Mortgaged
Property; (ii) receipt of any notice from the holder of any other lien
or security interest in the Mortgaged Property; or (iii) commencement
of any judicial or administrative proceedings by, against or otherwise
materially adversely affecting Borrower or Guarantor, the Mortgaged
Property, or any other action by any creditor thereof as a result of
any default under the terms of any loan.
Section 6.02. Binding Obligations; Joint and Several. The provisions
and covenants of this Deed of Trust shall run with the land, shall be binding
upon Borrower, its successors and assigns, and shall inure to the benefit of
Lender and Trustee and their respective successors and assigns. If there is more
than one Borrower, all their obligations and undertakings hereunder are and
shall be joint and several.
Section 6.03. Captions. The captions of the sections and subsections of
this Deed of Trust are for convenience only and are not intended to be a part of
this Deed of Trust and shall not be deemed to modify, explain, enlarge or
restrict any of the provisions hereof.
Section 6.04. Further Assurances. Borrower shall do, execute,
acknowledge and deliver, at its sole cost and expense, such further acts,
instruments or documentation, including additional title insurance policies or
endorsements, as Lender or Trustee may reasonably require from time to time to
better assure, transfer and confirm unto Lender the rights now or hereafter
intended to be granted to Lender and/or Trustee under this Deed of Trust or any
other Loan Document.
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Section 6.05. Severability. If any one or more of the provisions
contained in this Deed of Trust shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Deed of Trust, but
this Deed of Trust shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
Section 6.06. Borrower's Obligations Absolute. Except as expressly
permitted by the Loan Documents, all sums payable by Borrower hereunder shall be
paid without notice, demand, counterclaim, setoff, deduction or defense and
without abatement, suspension, deferment, diminution or reduction, and the
obligations and liabilities of Borrower hereunder shall in no way be released,
discharged, or otherwise affected (except as expressly provided herein) by
reason of: (a) any damage to or destruction of or any condemnation or similar
taking of the Mortgaged Property or any portion thereof; (b) any restriction or
prevention of or interference with any use of the Mortgaged Property or any
portion thereof; (c) any title defect or encumbrance or any eviction from the
Premises or any portion thereof by title paramount or otherwise; (d) any
Bankruptcy Proceeding relating to Borrower, any general partner of Borrower, or
any guarantor or indemnitor, or any action taken with respect to this Deed of
Trust or any other Loan Document by any trustee or receiver of Borrower or any
such general partner, guarantor or indemnitor, or by any court, in any such
proceeding; (e) any claim presently known to Borrower which Borrower has or
might have against Lender or Trustee; (f) any default or failure on the part of
Lender or Trustee prior to the date hereof to perform or comply with any of the
terms hereof or of any other agreement with Borrower; or (g) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing. Except as
expressly provided herein, Borrower waives all rights now or hereafter conferred
by statute or otherwise to any abatement, suspension, deferment, diminution or
reduction of any sum secured hereby and payable by Borrower.
Section 6.07. Amendments. This Deed of Trust cannot be altered,
amended, modified or discharged orally and no executory agreement shall be
effective to modify or discharge it in whole or in part, unless in writing and
signed by the party against which enforcement is sought.
Section 6.08. Other Loan Documents and Schedules. All of the
agreements, conditions, covenants, provisions and stipulations contained in the
Note and the other Loan Documents, and each of them, which are to be kept and
performed by Borrower are hereby made a part of this Deed of Trust to the same
extent and with the same force and effect as if they were fully set forth in
this Deed of Trust, and Borrower shall keep and perform the same, or cause them
to be kept and performed, strictly in accordance with their respective terms.
The Cover Sheet and each schedule attached to this Deed of Trust are integral
parts of this Deed of Trust and are incorporated herein by this reference. In
the event of any conflict between the provisions of any such schedule and the
remainder of this Deed of Trust, the provisions of such schedule or rider shall
prevail.
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Section 6.09. Legal Construction.
(a) The enforcement of this Deed of Trust shall be governed by, and
construed and interpreted in accordance with, the laws of the State.
(b) All terms contained herein shall be construed, whenever the context of
this Deed of Trust so requires, so that the singular number shall
include the plural, and the plural the singular, and the use of any
gender shall include all genders.
(c) The terms "include" and "including" as used in this Deed of Trust shall
be construed as if followed by the phrase "without limitation".
(d) Any provision of this Deed of Trust permitting the recovery of
attorneys' fees and costs shall be deemed to include such fees and
costs incurred in all appellate proceedings.
Section 6.10. Merger. So long as any Indebtedness shall remain unpaid,
fee title to and any other estate in the Mortgaged Property shall not merge, but
shall be kept separate and distinct, notwithstanding the union of such estates
in any person or entity.
Section 6.11. Time of the Essence. Time shall be of the essence in the
performance of all obligations of Borrower under this Deed of Trust.
Section 6.12. Transfer of Loan. Lender, in the management of its
investments or for any other reason, may, at any time, sell, transfer or assign
the Note, the Deed of Trust and the other Loan Documents and the servicing
rights with respect thereto or grant participations therein or issue mortgage
pass-through certificates or other securities evidencing a beneficial interest
in the Note, Deed of Trust and other Loan Documents (collectively, a
"Transfer"). As part of a Transfer, Lender may forward to each transferee,
assignee, servicer, participant or investor all documents and information which
Lender now has or may hereafter acquire relating to the Indebtedness, the Loan
Documents and the Mortgaged Property. Borrower agrees to cooperate with Lender
at no cost to Borrower in connection with a Transfer including, without
limitation, the delivery of any estoppel certificates required under Section
2.18 and such other documents as may be reasonably be requested by Lender.
Section 6.13. Satisfaction. If all of the Indebtedness is paid in full
in accordance with the Note and the other Loan Documents, then in that event
only all rights of Lender and Trustee under this Deed of Trust and the other
Loan Documents shall terminate and the Mortgaged Property shall become wholly
clear of the liens, grants, security interests, conveyances and assignments
evidenced hereby and thereby, and Lender shall release or cause to be released
such liens, grants, assignments, conveyances and security interests in due form
at Borrower's cost (to the extent permitted by the law of the State), and this
Deed of Trust shall be void; provided, however, that no provision of this Deed
of
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Trust or any other Loan Document which, by its own terms, is intended to survive
such payment and release (nor the rights of Lender or Trustee under any such
provision) shall be affected in any manner thereby and such provision shall, in
fact, survive. Recitals of any matters or facts in any release instrument
executed by Lender or Trustee under this Section 6.13 shall be prima facie
evidence of the truthfulness thereof. To the extent permitted by law, such an
instrument may describe the grantee or releasee as "the person or persons
legally entitled thereto" and Lender and Trustee shall not have any duty to
determine the rights of persons claiming to be rightful grantees or releasees of
any of the Mortgaged Property. When this Deed of Trust has been fully released
or discharged by Lender and/or Trustee, the release or discharge hereof shall
operate as a release and discharge of the Assignment and as a reassignment of
all future Leases and Property Income with respect to the Mortgaged Property to
the person or persons legally entitled thereto, unless such release expressly
provides to the contrary.
Section 6.14. Defeasance Requirements.
(a) Five (5) years after the Closing Date, Borrower may voluntarily defease
all of the Loan and the Related Loans.
(b) Any defeasance of the Loan and the Related Loans by Borrower shall be
made on a Payment Date.
(c) Borrower shall not be permitted at any time to defease all or any part
of the Loan or the Related Loans except as expressly provided in this
Section 6.14.
(d) Subject to the terms and conditions of this Deed of Trust, Borrower may
defease the Loan and the Related Loans if Borrower: (i) has provided
not less than thirty (30) days prior written notice to Lender
specifying a Payment Date (the "Defeasance Release Date") on which the
payments provided in clauses (ii) and (iii) below are to be made and
the deposit provided in clause (iv) below is to be made, (ii) pays all
interest accrued and unpaid on the outstanding principal amount of the
Loan and the Related Loans to and including the Defeasance Release
Date, (iii) pays all other sums then due and payable under the Loan
Documents and the Related Loan Documents, (iv) deposits with Lender an
amount equal to the Defeasance Deposit, (v) delivers to Lender (A) a
security agreement, in form and substance satisfactory to Lender and
Borrower, creating a first priority perfected Lien on the deposits
required pursuant to this Section 6.14 and the U.S. Obligations
purchased on behalf of Borrower in accordance with this Section 6.14
(the "Defeasance Security Agreement"), (B) a release of the Mortgaged
Property from the lien of the Deed of Trust in a form appropriate for
the jurisdiction in which the Mortgaged Property is located, to be
executed by Lender, (C) an officer's certificate of Borrower certifying
that the requirements set forth in this Section 6.14 have been
satisfied, and (D) such other certificates, documents or instruments as
Lender may reasonably request, and (vi) assigns to such other entity or
entities established or designated by Lender (the "Successor
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Obligor") all of Borrower's rights, interests and obligations under the
Note, each Related Note, the other Loan Documents and the other Related
Loan Documents and the Defeasance Security Agreement together with the
pledged U.S. Obligations. The Successor Obligor shall assume, in a
writing or writings reasonably satisfactory to Lender in Lender's
discretion, all of Borrower's obligations under the Note, each Related
Note, the other Loan Documents and the other Related Loan Documents and
the Defeasance Security Agreement and, upon such assignment Borrower
and Guarantor shall, except as set forth herein, be relieved of its
obligation under all the Loan Documents and all of the Related Loan
Documents.
(e) The U.S. Obligations shall mature on or be redeemable, or provide for
payment thereon, on or prior to the Business Day immediately preceding
the date on which payments under the Note and each Related Note are due
and payable and the proceeds thereof shall be payable directly to
Lender. In connection with the foregoing, Borrower appoints Lender as
Borrower's agent for the purpose of applying the amounts delivered
pursuant to clause (d)(iv) above to purchase U.S. Obligations.
(f) If any notice of defeasance is given, Borrower shall be required to
defease the Loan and the Related Loans on the specified Payment Date
(unless such notice is revoked in writing by Borrower prior to the date
specified therein in which event Borrower shall immediately reimburse
Lender for any costs incurred by Lender in connection with Borrower's
giving of such notice and revocation).
(g) Upon defeasance of the Loan and the Related Loans in accordance with
the requirements of this Section 6.14, the Mortgaged Property shall be
released from the lien of the Deed of Trust and the Remaining
Properties shall be released from the liens of the Related Mortgages.
Notwithstanding the foregoing, Borrower acknowledges that Borrower only
has the right to simultaneously defease the Loan and the Related Loans
and shall have no right to defease any such loan in and of itself.
(h) Nothing in this Section 6.14 shall release Borrower from any liability
or obligation relating to any environmental matters arising under
Sections 2.20 through 2.22 hereof.
Section 6.15. Partial Release. Borrower shall be entitled at any time
to a release of the lien of this Deed of Trust (but not any other Related
Mortgage) only if each of the following conditions has been satisfied:
(a) A release under this Section 6.15 and Section 5.15 of each Related
Mortgage may not take place more than three (3) times (in the
aggregate) during the term of this Loan and the Related Loans;
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(b) No more than a total of three (3) of the Mortgaged Properties may be
released under this Section 6.15 and Section 5.15 of each Related
Mortgage, and no more than a total of three (3) of the Mortgaged
Properties may be released under (i) this Section 6.15 and Section 5.15
of each Related Mortgage, and (ii) Section 6.16 of this Deed of Trust
and Section 5.16 of each Related Mortgage;
(c) After the proposed release, the Debt Service Coverage Ratio - Remaining
Properties for the twelve (12) months prior to the release and
projected twelve (12) months following the release must be at least
equal to or greater than the greater of (x) 1.65, or (y) the current
Debt Service Coverage Ratio - Mortgaged Properties calculated for the
twelve (12) month period prior to the release;
(d) After the proposed release, the loan to value ratio of the remaining
Related Loans must be less than or equal to 60% as calculated
immediately prior to the release based upon appraisals furnished to
Lender in form and substance reasonably satisfactory to Lender and
prepared by an MAI appraiser approved by Lender at Borrower's cost or
as determined by Lender;
(e) Borrower shall pay Lender in reduction of the principal balance of the
Loan a sum equal to 115% of the original Allocated Loan Amount for the
Mortgaged Property, plus Borrower shall in addition pay to Lender a
"prepayment premium" applied to said sum and computed in the manner
specified in the Note;
(f) Neither the Loan nor the Related Loans shall be in Default at the time
such request for release is made through the completion of the release;
(g) Borrower must pay all of Lender's costs associated with the partial
release plus a fee of .5% of the original Allocated Loan Amount for the
Mortgaged Property to be released;
(h) The original Borrower named in the Loan Documents and the Related Loan
Documents continues to be the owner of the Remaining Mortgaged
Properties; and
(i) All documents relating to the release shall be in form and substance
satisfactory to Lender.
Section 6.16. Substitution of Collateral. Borrower shall be entitled to
substitute a property (being defined as releasing a property that then
constitutes security for the Loan (the "Released Property")) and substituting
another property owned in fee by Borrower (the "Substitute Property") in its
place on the following terms and conditions:
(a) A substitution may not take place more than three (3) times during the
term of the Loan and the Related Loans;
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(b) No more than three (3) properties (in the aggregate) may be released
under this Section 6.16 and Section 5.16 of each Related Mortgage, and
no more than a total of three (3) of the Mortgaged Properties may be
released under (i) Section 6.15 above and Section 5.15 of each Related
Mortgage, and (ii) this Section 6.16 and Section 5.16 of each Related
Mortgage;
(c) After the proposed substitution, the Debt Service Coverage Ratio -
Remaining Properties for the twelve (12) months prior to the
substitution and projected twelve (12) months following the
substitution must be at least equal to or greater than the greater of
(i) 1.65, or (ii) the current Debt Service Coverage Ratio - Mortgaged
Properties calculated for the twelve (12) month period prior to the
substitution;
(d) After the proposed substitution, the loan to value ratio of the
remaining Related Loans must be less than or equal to the lesser of (i)
60%, or (ii) the current loan to value ratio of the existing Loan and
Related Loans calculated immediately prior to the substitution based
upon appraisals furnished to Lender in form and substance reasonably
satisfactory to Lender and prepared by an MAI appraiser approved by
Lender at Borrower's cost;
(e) The net operating income and/or RevPar (as reported by ▇▇▇▇▇ Travel) of
the Substitute Property must not show a downward trend for any of the
three (3) years prior to the substitution;
(f) The appraised value (based upon appraisals furnished to Lender in form
and substance reasonably satisfactory to Lender and prepared by an MAI
appraiser approved by Lender at Borrower's cost), the net operating
income and current debt service coverage ratio of the Substitute
Property must be 120% greater than the appraised value, net operating
income and the debt service coverage ratio of the Released Property;
(g) Lender may at its sole discretion reject any property substitution that
in Lender's sole determination would not be in compliance with the
terms and provisions of the Loan Application, would be detrimental to
the overall quality and/or value of the Mortgaged Properties, or would
not be in compliance with Lender's then existing underwriting standards
and criteria;
(h) The Substitute Property must be franchised as a "Sheraton or Sheraton
Suites", or other franchise reasonably acceptable to Lender, and
managed by the manager under the Management Agreement or another a
nationally recognized hotel management company with a franchise and
hotel agreement similar to the Management Agreement or otherwise
reasonably acceptable to Lender;
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(i) Borrower must pay (i) all of Lender's costs (all of which must be paid,
whether or not such substitution is actually approved or completed)
associated with the substitution including but not limited to legal
fees, appraised fees, market studies and expenses, title insurance
premiums on the new property, engineering fees and expenses, recording
fees and transfer taxes, and (ii) a fee of 1% of the original Allocated
Loan Amount for the Released Property;
(j) The Loan and any Related Loan shall not be in Default at the time such
request for substitution is made through the completion of the
substitution;
(k) The original Borrower named in the Loan Documents and Related Loan
Documents continues to be the owner of the Remaining Mortgaged
Properties; and
(l) In order to substitute one property for another as security for the
Loan or any Related Loan, Borrower acknowledges that such substitute
property shall be subject to all of Lender's underwriting and due
diligence requirements and criteria, including, without limitation,
environmental assessment, review of leases, receipt of tenant
subordination letters, title policy endorsements, etc. Borrower agrees
that the Substitute Property shall be subject to all the terms and
conditions of the Loan Application.
[SEE FOLLOWING PAGE FOR SIGNATURES]
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IN WITNESS WHEREOF, this Deed of Trust has been duly executed and delivered as
of the day and year first above written.
BORROWER
FELCOR/MM S-7 HOLDINGS, L.P., a Delaware
limited partnership
By: FelCor/MM S-7 Hotels, L.L.C., a
Delaware limited liability company,
its general partner
By:
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President
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▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
)
COUNTY OF DALLAS )
This instrument was acknowledged before me on this _____ day of April,
2000, by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Vice President of FelCor/MM S-7 Hotels, L.L.C., a
Delaware limited liability company, which is the general partner of FelCor/MM
S-7 Holdings, L.P., a Delaware limited partnership, on behalf of said entities.
My Commission expires: -------------------------------------------
Notary Public in and for the State of Texas
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Printed/Typed Name of Notary
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SCHEDULE A
DESCRIPTION OF LAND
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SCHEDULE B
PERMITTED ENCUMBRANCES