COVER
UBS
EXHIBIT D-2
FORM OF SECOND DEED OF TRUST
State Site No.
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SECOND DEED OF TRUST,
LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
Trustor: PAYLESS CASHWAYS, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Beneficiary: CANADIAN IMPERIAL BANK OF COMMERCE,
as Coordinating and
Collateral Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Trustee:
Deed of Trust
Amount: $____________
Date: December 2, 1997
Premises:
Record and ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.
Return to: ▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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SECOND DEED OF TRUST, LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING, dated as of December 2, 1997,
by and among PAYLESS CASHWAYS, INC., a Delaware corporation, having an office at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Trustor"),
_______________________, a _____________ having an office at ____
_______________________ ("Trustee"), and CANADIAN IMPERIAL BANK OF COMMERCE, as
Coordinating and Collateral Agent under the Agreement (as hereinafter defined),
having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("Beneficiary").
DEFINITIONS
Trustor and Beneficiary agree that all capitalized terms used but not
defined herein are defined in or by reference to the Agreement and shall have
the same meanings herein as therein. Trustor and Beneficiary further agree that,
unless the context otherwise specifies or requires, the following terms shall
have the meanings herein specified, such definitions to be applicable equally to
the singular and the plural forms of such terms.
"Agreement" means that certain Amended and Restated Credit Agreement dated
on or about the date hereof by and among Payless Cashways, Inc., the Lenders
signatory thereto, the Underwriters, U.S. Bank National Association, as a
Fronting Bank, and Canadian Imperial Bank of Commerce, as Fronting Bank and as
Coordinating and Collateral Agent for the Lenders, the Fronting Banks, the
Underwriters and the other Secured Parties, together with any future amendments,
amendments and restatements, extensions, modifications or supplements thereto or
thereof.
"Bankruptcy Case" means In re Payless Cashways, Inc., Case No. 97-50543 in
the Bankruptcy Court.
"Bankruptcy Code" means 11 U.S.C. ss.101 et seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the Western
District of Missouri.
"Bankruptcy Reorganization Plan" means Payless' plan of reorganization in
the Bankruptcy Case, as confirmed by the Bankruptcy Court.
"Deed of Trust" means this Second Deed of Trust, Leasehold Deed of Trust,
Security Agreement, Assignment of Leases and Rents and Fixture Filing together
with any future amendments, amendments and restatements, extensions,
modifications or supplements hereto or hereof.
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"Deed of Trust Amount" means the principal sum of $_________________.
"Default" means Default, as that term is defined in the Agreement.
"Default Rate" means the rate of interest specified in Section 2.8(a) of
the Agreement.
"DIP Agent" means the DIP Agent, as that term is defined in the Agreement.
"DIP Credit Agreement" means the Revolving Credit Agreement, dated as
of July 21, 1997, among Payless, as a Debtor-in-Possession, the Lenders, the
Underwriters and the Fronting Banks party thereto and Canadian Imperial Bank of
Commerce, as Coordinating and Collateral Agent, together with any amendments,
amendments and restatements, extensions, modifications or supplements thereto or
thereof prior to the date of the Agreement.
"DIP Obligations" means the DIP Obligations, as that term is defined in the
Agreement.
"Event of Default" means the events and circumstances described as such
in Article II hereof.
"Fixtures" means all of Trustor's right, title and interest in all
furniture, furnishings, partitions, screens, awnings, venetian blinds, window
shades, draperies, carpeting, pipes, ducts, conduits, dynamos, motors, engines,
compressors, generators, boilers, stokers, furnaces, pumps, tanks, elevators,
escalators, vacuum cleaning systems, call systems, switchboards, sprinkler
systems, fire prevention and extinguishing apparatus, refrigerating, air
conditioning, heating, dishwashing, plumbing, ventilating, gas, steam,
electrical and lighting fittings and fixtures, licenses or permits of any kind
and all building materials, equipment and goods now or hereafter delivered to
the Premises (hereinafter defined) and intended to be installed therein, and all
other machinery, fixtures, tools, implements, apparatus, appliances, equipment,
goods, facilities and other personal property of similar character in which
Trustor now has, or at any time hereafter acquires, an interest and which are
now or hereafter affixed or attached to, or used in connection with the
enjoyment, occupancy and/or operation of, all or any portion of the Premises,
together with all renewals, replacements and substitutions thereof and additions
and accessions thereto and the proceeds of all of the foregoing items.
"Fronting Banks" means the Fronting Banks, as that term is defined in the
Agreement.
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"Improvements" means all buildings, structures and other improvements
presently existing or hereafter constructed on the land described in Exhibit A
attached hereto.
"Lease" has the meaning ascribed to such term in Section 3.01 hereof.
"Leasehold" has the meaning ascribed to such term in paragraph "F" of the
Granting Clause, below.
"Leasehold Interest" has the meaning ascribed to such term in paragraph "F"
of the Granting Clause, below.
"Lenders" means the Lenders, as that term is defined in the Agreement.
"Lessee" has the meaning ascribed to such term in Section 3.01 hereof.
"Loan Documents" means the Loan Documents, as that term is defined in the
Agreement.
"Loans" means the Loans, as that term is defined in the Agreement.
"Mortgaged Property" has the meaning ascribed to such term in the Granting
Clause, below.
"Notes" means the Notes, as that term is defined in the Agreement.
"Payless" means Payless Cashways, Inc., an Iowa corporation.
"Post-Petition Mortgage Liens" has the meaning ascribed to such term in the
fourth WHEREAS clause, below.
"Pre-Petition Agent" means the Pre-Petition Agent, as that term is defined
in the Agreement.
"Pre-Petition Credit Agreement" means the Amended and Restated Credit
Agreement dated as of October 3, 1996, by and among Payless, the lenders
signatory thereto, Canadian Imperial Bank of Commerce, as letter of credit bank
and as administrative and collateral agent, and The Bank of Nova Scotia,
NationsBank of Texas, N.A. and Bank of America National Trust and Savings, as
co-agents, together with any amendments, amendments and restatements,
extensions, modifications or supplements thereto or thereof prior to the date of
the Agreement.
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"Pre-Petition Obligations" means the Pre-Petition Obligations, as that term
is defined in the Agreement.
"Premises" means the land described in Exhibit A annexed hereto, together
with the Improvements thereon or to be constructed thereon or therein, and all
of the easements, rights, privileges and appurtenances thereunto belonging or in
anywise appertaining thereto including, but not limited to, all of the estate,
right, title, interest, claim or demand whatsoever of Trustor therein and in and
to the strips and gores, streets and ways adjacent thereto, whether in law or in
equity, in possession or expectancy, now or hereafter acquired and also any
other realty, Leaseholds (hereinafter defined), or Fixtures encompassed by the
term "Mortgaged Property", elsewhere herein defined.
"Prior Deed of Trust" means that Deed of Trust, Mortgage and Security
Agreement executed by Trustor to The Prudential Insurance Company of America,
dated [June 15, 1989] [_______________, 19__ and recorded on [________, 1989]
[____________, 19___], as assigned to Prior Beneficiary and amended by that
certain Amendment to Deed of Trust, Mortgage and Security Agreement dated
_________, 1997, as amended, amended and restated, supplemented or otherwise
modified to the extent permitted by the Agreement.
["Prior Beneficiary" means UBS Mortgage Finance, Inc., as beneficiary under
the Prior Deed of Trust.]
"Rents" has the meaning ascribed to such term in Section 3.01 hereof.
"Secured Obligations" has the meaning ascribed to such term in the
paragraph entitled "Secured Obligations" below.
"Secured Parties" means Secured Parties, as that term is defined in the
Agreement.
"UBS Collateral" means the real property listed on Schedule 1.1(c) to the
Agreement, together with improvements, fixtures and appurtenances relating
thereto, which is collateral pursuant to the relevant UBS Loan Documents.
"UBS Loan Agreement" means that certain ▇▇▇▇▇▇▇ and Restated Loan
Agreement, dated December 2, 1997, between Trustor and Prior Beneficiary, as the
same may be hereafter amended, amended and restated, supplemented or otherwise
modified to the extent permitted by Section 5.04 hereof.
"UBS Loan Documents" means the UBS Loan Agreement, each of the mortgages
and deeds of trust heretofore delivered by Trustor to Prior Beneficiary with
respect to UBS Collateral, as amended as of December 2, 1997 and any and all
documents, agreements
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and instruments related thereto, each as may be amended, amended and restated,
supplemented or otherwise modified to the extent permitted by Section 5.04
hereof.
"Underwriters" means Underwriters, as that term is defined in the
Agreement.
W I T N E S S E T H :
WHEREAS, on July 21, 1997, Payless filed a voluntary petition of bankruptcy
under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court; and
WHEREAS, prior to the commencement of the Bankruptcy Case, Payless was
obligated to the Lenders or their predecessors-in-interest pursuant to, among
other things, the Pre-Petition Credit Agreement; and
WHEREAS, during the Bankruptcy Case, Payless became obligated to certain of
the Lenders pursuant to the DIP Credit Agreement; and
WHEREAS, pursuant to the orders of the Bankruptcy Court entered on July 21,
1997 and August 20, 1997 in the Bankruptcy Case, the DIP Agent and the
Pre-Petition Agent were granted liens (the "Post-Petition Mortgage Liens") on
the Mortgaged Property to secure the Pre-Petition Obligations and the DIP
Obligations; and
WHEREAS, as contemplated by Payless' Bankruptcy Reorganization Plan,
Payless has merged with and into Trustor, with Trustor being the sole surviving
entity; and
WHEREAS, pursuant to the terms of the Bankruptcy Reorganization Plan and
the Agreement, the parties have agreed among other things, (i) to permit the
merger of Payless into Trustor, (ii) to secure various obligations of Payless
(as Trustor's predecessor) in respect of the Pre-Petition Obligations and the
DIP Obligations, and (iii) without duplication, to secure all obligations,
whether now existing or hereafter incurred or arising, of Trustor under the
Agreement, the Notes and/or the other Loan Documents, including, without
limitation, the Secured Obligations; in each case as more particularly set forth
in the Agreement and this Deed of Trust; and
WHEREAS, Trustor is the actual, record and beneficial owner of the Premises
or owns an actual beneficial interest therein; and
WHEREAS, Trustor has agreed pursuant to the terms of the Agreement, the
Notes, and/or the other Loan Documents evidencing the Secured Obligations to be
liable for the Secured Obligations; and
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WHEREAS, the parties intend that the Secured Obligations shall be secured
by this Deed of Trust.
GRANTING CLAUSE
NOW, THEREFORE, Trustor, in consideration of the premises, and in order to
secure the payment in full of the Deed of Trust Amount, the Secured Obligations,
all interest due thereon and all other costs and expenses and other amounts due
hereunder and in respect of the Secured Obligations, and the performance and
discharge of all the provisions hereof, of the Secured Obligations and all other
Loan Documents, hereby confirms the Post Petition Mortgage Liens and gives,
grants, bargains, sells, conveys, pledges and grants a security interest to
Trustee in trust, with power of sale for the benefit of Beneficiary, all of
Trustor's estate, right, title and interest in, to and under any and all of the
following described property whether now owned or hereafter acquired (all such
properties being collectively referred to as the "Mortgaged Property") subject,
however, to the Prior Deed of Trust:
A. All Trustor's right, title and interest in and to the Premises and all
right, title and interest of Trustor in and to the Improvements on the Premises
or to be constructed thereon and all Fixtures now or hereafter situated in, on
or about, or affixed or attached to the Improvements or the Premises or any
building, structure or other improvement now or hereafter standing, constructed
or placed upon or within the Premises, and all and singular the tenements,
hereditaments, easements, rights-of-way or use, rights, privileges and
appurtenances to the Premises, now or hereafter belonging or in anywise
appertaining thereto, including, without limitation, any such right, title,
interest, claim and demand in, to and under any agreement granting, conveying or
creating, for the benefit of the Premises, any easement, right or license in any
way affecting other property and in, to and under any streets, ways, alleys,
vaults, gores or strips of land adjoining the Premises, or any parcel thereof,
and all claims or demands either in law or in equity, in possession or
expectancy, of, in and to the Premises.
B. All right, title and interest of Trustor in and to all awards heretofore
made or hereafter to be made for the taking by eminent domain of the whole or
any part of the above described premises, or any estate or easement therein,
including any awards for change of grade of streets, all of which awards are
hereby assigned to Trustee and Beneficiary, which Trustee and Beneficiary are
hereby authorized to collect (unless provided otherwise in the Agreement) and
receive the proceeds of such awards and to give proper receipts and acquittances
therefor and Trustee and Beneficiary shall have the right and option to apply
such excess towards the payment of any sum owing on account of this Deed of
Trust and the Secured Obligations secured thereby, notwithstanding the fact that
such sum may not then be due and payable.
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C. The Fixtures and the products and proceeds thereof.
D. All present and future leases, subleases and licenses and any guarantees
thereof, rents, issues and profits and additional rents now or at any time
hereafter covering or affecting all or any portion of the Mortgaged Property and
all proceeds of, and all privileges and appurtenances belonging or in any way
appertaining to, the Mortgaged Property, or any part thereof, and all other
property subjected or required to be subjected to the lien and/or security
interest of or conveyed pursuant to the terms of this Deed of Trust, including,
without limitation, all of the income, revenues, earnings, rents, maintenance
payments, tolls, issues, awards (including, without limitation, condemnation
awards and insurance proceeds), products and profits thereof, which income,
revenues, earnings, rents, maintenance payments, tolls, issues, awards, products
and profits are hereby expressly assigned with the right to take and collect the
same upon the terms hereinafter set forth; and all the estate, right, title,
interest and claim whatsoever, at law and in equity, which Trustor now has or
may hereafter acquire in and to the aforementioned property and every part
thereof; provided, that so long as no Event of Default (as hereinafter defined)
shall have occurred and be continuing, all such income, revenues, earnings,
rents, maintenance payments, tolls, issues, awards, products and profits shall
remain with and under the control of Trustor except as otherwise expressly
provided herein or in any other written agreement between Trustor and
Beneficiary.
E. All right, title and interest of Trustor in and to all agreements, or
contracts, now or hereafter entered into for the sale, leasing, brokerage,
development, construction, renovation, management, maintenance and/or operation
of the Premises (or any part thereof), including all moneys due and to become
due thereunder, and all permits, licenses, bonds, insurance policies, plans and
specifications relative to the construction and/or operation of the Improvements
upon the Mortgaged Property.
F. All right, title and interest (including, without limitation, all
present and future rights to possession and use, and all present and future
options and other rights to renew and to purchase) of Trustor, as lessee or
sublessee, under any leases, subleases, licenses, occupancy agreements or
concessions now in effect or to be entered into hereafter (collectively, the
"Leasehold Instruments") whereby Trustor has any right to the use, possession or
occupancy of the Premises or any part thereof (collectively, the "Leaseholds").
G. All of Trustor's claims and rights to the payment of damages arising
from any rejection of a Leasehold or a Lease under or pursuant to the Bankruptcy
Code.
H. All of Trustor's rights and remedies at any time arising under or
pursuant to Subsection 365(h) of the Bankruptcy Code, 11 U.S.C. ss.365(h),
including, without limitation, all of Trustor's rights to remain in possession
of the Premises.
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I. Any other property and rights which are, by the provisions of the
Agreement or any other Loan Document, required to be subject to the lien hereof
or conveyed pursuant to the terms hereof, and any additional property and rights
that may from time to time hereafter by installation in or on the Mortgaged
Property, or by writing of any kind, or otherwise, be subjected to the lien
hereof by Trustor or by anyone on its behalf.
J. All proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims, including, without limitation,
proceeds of insurance and condemnation awards, and all right, title and interest
of Trustor in and to all unearned premiums accrued, accruing and to accrue under
any or all insurance policies obtained by Trustor.
TO HAVE AND TO HOLD the Mortgaged Property, subject to the Prior Deed of
Trust, unto Trustee for the benefit of Beneficiary and its successors and
assigns, upon the terms, provisions and conditions herein set forth, forever,
and Trustor does hereby bind itself and its successors, legal representatives,
and assigns to warrant and forever defend all and singular the Mortgaged
Property unto Beneficiary and Trustee and their successors and assigns, against
every person whomsoever lawfully claiming or to claim the same or any part
thereof, subject to the rights of the Prior Beneficiary.
IN TRUST, to secure the payment and performance of the Secured Obligations,
whereupon this Deed of Trust shall cease and be void and the Mortgaged Property
shall be released at the cost of Trustor.
SECURED OBLIGATIONS
This Deed of Trust, and all rights, titles, interests, liens, security
interests, powers, privileges and remedies created hereby or arising hereunder
or by virtue hereof, are given to secure the payment and performance of all
indebtedness, obligations and liabilities arising under the Notes, the
Agreement, this Deed of Trust and any other Loan Document, and any renewals,
extensions, amendments, amendments and restatements, supplements or
modifications thereof or thereto, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing or
due or to become due, and any and all fees, costs or expenses incurred by
Beneficiary or Trustee or the other Secured Parties, including, but not limited
to, interest accruing at the then applicable rate provided in the Agreement
after the maturity of the Loans and interest accruing at the then applicable
rate provided in the Agreement or other applicable agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Trustor on the Loans and on
all other obligations of the Trustor to the Secured Parties, taxes, recording
expenses and attorneys' fees in connection with the execution and delivery of
any of the aforesaid and the consummation of the transactions contemplated
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thereby, the administration thereof, and, after default, the administration and
collection thereof, all costs incurred of whatever nature by Beneficiary and
Trustee in the exercise of any rights hereunder or under any Loan Document and
all other amounts payable by Trustor under this Deed of Trust (all of the
foregoing indebtedness, obligations and liabilities being referred to herein as
the "Secured Obligations").
ARTICLE I
PARTICULAR WARRANTIES, REPRESENTATIONS
AND COVENANTS OF TRUSTOR
Section 1.01 Warranties and Representations. Trustor hereby warrants and
represents as follows:
(a) Trustor is the actual, record and beneficial owner of the Premises
and holder of a good and marketable title to an indefeasible leasehold estate in
the Leaseholds or owns an actual beneficial interest therein and fee estate in
the rest of the Mortgaged Property, subject only to such exceptions to title as
are listed in the title policy insuring the lien of this Deed of Trust and
approved by Beneficiary and the Prior Beneficiary as permitted exceptions.
Trustor is the owner of all of the remaining Mortgaged Property; Trustor will
own the Fixtures free and clear of liens and claims except the Prior Deed of
Trust and liens and claims in favor of Beneficiary; and this Deed of Trust is
and will remain a valid and enforceable lien on the Mortgaged Property subject
only to the permitted exceptions referred to above.
(b) Trustor has full power and lawful authority, and has obtained the
written consent of the Prior Beneficiary, to convey, pledge and encumber the
Mortgaged Property in the manner and form herein done or intended hereafter to
be done. Trustor will preserve such title, and will forever warrant and defend
the validity and priority of the lien hereof, against the claims of all persons
and parties whomsoever.
(c) Except as otherwise specified in the Title Policy (as defined in
the Agreement) or in the Survey (as defined in the Agreement), the Premises is
not located in an area identified by the Secretary of Housing and Urban
Development as an area having special flood hazards or if it so located, flood
insurance acceptable to Beneficiary has been obtained.
Section 1.02 Further Assurances. Trustor will, at its sole expense, do,
execute, acknowledge and deliver every further act, deed, conveyance, mortgage,
assignment, notice of assignment, transfer or assurance as Beneficiary shall
from time to time reasonably require, for the better assuring, conveying,
assigning, transferring and confirming unto Ben-
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eficiary the property and rights hereby conveyed, mortgaged or assigned or
intended now or hereafter so to be, or which Trustor may be or may hereafter
become bound to convey, mortgage or assign to Trustee or Beneficiary or for
carrying out the intention or facilitating the performance of the terms of this
Deed of Trust, and for filing, registering or recording this Deed of Trust and,
on demand, will execute and deliver, and hereby authorizes Beneficiary or
Trustee to execute in the name of Trustor to the extent it may lawfully do so,
one or more financing statements, chattel mortgages or comparable security
instruments, and renewals thereof, to evidence more effectively the lien hereof
upon the Fixtures.
Section 1.03 Filings, Recordings and Payments. (a) Trustor forthwith upon
the execution of this Deed of Trust, and thereafter from time to time, will, at
its expense, cause this Deed of Trust and any security instrument creating a
lien or evidencing the lien hereof upon the Fixtures and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and fully to protect the lien hereof upon, and the interest of Trustee
and Beneficiary in, the Mortgaged Property.
(b) Trustor will pay all taxes, filing, registration and recording
fees, and all expenses incident to the execution and acknowledgment of this Deed
of Trust, any supplemental deed of trust, any other Loan Document, and any
security instrument with respect to the Fixtures, and any instrument of further
assurance, and all federal, state, county and municipal stamp taxes and other
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of the Agreement, this Deed of Trust, any
supplemental deed of trust, any other Loan Document, any security instrument
with respect to the Fixtures or any instrument or further assurance, other than
income, franchise or other similar taxes imposed on Beneficiary in respect of
income derived by Beneficiary under the Secured Obligations.
Section 1.04 Payment of Sums Due. Trustor will punctually pay the principal
and interest and all other sums to become due in respect of the Agreement and
any other Loan Document at the time and place and in the manner specified in the
Agreement and any other Loan Document, according to the true intent and meaning
thereof and without offset, counterclaim, defense or cause of action of any kind
whatsoever, and without deduction or credit for any amount payable for taxes,
all in immediately available funds in Dollars.
Section 1.05 After Acquired Property. All right, title and interest of
Trustor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Property, hereafter acquired by or released to Trustor or constructed,
assembled or placed by Trustor on the Premises, and all conversions of the
security constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and in
each such
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case, without any further mortgage, conveyance, assignment or other act by
Trustor, shall become subject to the lien of this Deed of Trust as fully and
completely, and with the same effect, as though now owned by Trustor and
specifically described in the granting clauses hereof (subject to the rights of
the Prior Beneficiary),but at any and all times Trustor will execute and deliver
to Beneficiary any and all such further assurances, mortgages, deeds of trust,
conveyances or assignments thereof as Beneficiary may reasonably require for the
purpose of expressing and specifically subjecting the same to the lien of this
Deed of Trust.
Section 1.06 Taxes, Fees and Other Charges. (a) Trustor, from time to time
when the same shall become due, and prior to the date of imposition of interest
or penalty (except as otherwise permitted in the Agreement), will pay and
discharge, or cause to be paid and discharged, all taxes of every kind and
nature (including real and personal property taxes and income, franchise,
withholding, transfer or recordation taxes, profits and gross receipt taxes),
all general and special assessments, levies, permits, inspection and license
fees, all water and sewer rents and charges, and all other public charges,
whether of a like or different nature, imposed upon or assessed against it or
the Mortgaged Property or any part thereof or upon the revenues, rents, issues,
income and profits of the Premises or arising in respect of the occupancy, use
or possession thereof. Trustor will, at any time upon request by Beneficiary,
promptly deliver to Beneficiary receipts evidencing the payment of same.
Subject to the Prior Deed of Trust, upon the occurrence of an Event of
Default under the Agreement, Beneficiary may, at any time and from time to time,
at its option, to be exercised by written notice to Trustor, require the deposit
by Trustor at the time of each payment of an installment of interest or
principal under the Agreement of an additional amount sufficient to discharge
the obligations under this subsection (a) when they become due. The
determination of the amount so payable and of the fractional part thereof to be
deposited with Beneficiary, so that the aggregate of such deposit shall be
sufficient for this purpose, shall be made by Beneficiary in its sole
discretion. Such amounts shall be held by Beneficiary without interest in an
account acceptable to Beneficiary and applied to the payment of the obligations
in respect to which such amounts were deposited or, at the option of Beneficiary
and subject to applicable law, to the payment of the Secured Obligations in such
order or priority as Beneficiary shall determine consistent with the Agreement,
on or before the respective dates on which the same or any of them would become
delinquent. If one month prior to the due date of any of the obligations under
this subsection (a) the amounts then on deposit therefor shall be insufficient
for the payment of such obligations in full, subject to the Prior Deed of Trust,
Trustor within ten (10) days after demand, shall deposit the amount of the
deficiency with Beneficiary. Nothing herein contained shall be deemed to affect
any right or remedy of Beneficiary under the provisions of this Deed of Trust or
of any statute or rule of law to pay any such amount and to add the amount so
paid together with interest at the Default Rate to the indebtedness hereby
secured.
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(b) Except as otherwise permitted in the Agreement, Trustor will pay,
from time to time when the same shall become due, all lawful 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 part
thereof, or on the revenues, rents, issues, income and profits arising therefrom
and in general will do or cause to be done everything necessary so that the lien
hereof shall be fully preserved, at the cost of Trustor, without expense to
Beneficiary.
Section 1.07 Intentionally Deleted.
Section 1.08 Insurance. (a) Trustor agrees to at all times provide,
maintain and keep in force the policies of insurance required to the maintained
pursuant to the terms of the Agreement.
(b) In the event Trustor fails to provide, maintain, keep in force or
deliver and furnish to Beneficiary the policies of insurance required by the
Agreement or this Deed of Trust, Beneficiary may procure such insurance or
single-interest insurance for such risks covering Beneficiary's interest, and
Trustor will pay all premiums thereon promptly upon demand by Beneficiary, and
until such payment is made by Trustor the amount of all such premiums, together
with interest thereon at the Default Rate shall be secured by this Deed of
Trust.
(c) After the happening of any casualty to the Mortgaged Property or
any part thereof, Trustor shall give prompt written notice thereof to
Beneficiary, and Beneficiary may make proof of loss if not made promptly by
Trustor. In the event of such loss or damage, all proceeds of insurance shall be
payable in the manner provided for in the Agreement (subject to the Prior Deed
of Trust). Unless otherwise provided in the Agreement, nothing herein contained
shall be deemed to excuse Trustor from repairing or maintaining the Premises as
provided in Section 1.12 hereof or restoring all damage or destruction to the
Mortgaged Property, regardless of whether or not there are insurance proceeds
available or whether any such proceeds are sufficient in amount, and the
application or release by Beneficiary of any insurance proceeds shall not cure
or waive any Default or notice of Default under this Deed of Trust or invalidate
any act done pursuant to such notice. Any monies received as payment for loss
under any insurance shall be applied pursuant to the terms of the Agreement
(subject to the Prior Deed of Trust).
(d) In the event of foreclosure of this Deed of Trust or other
transfer of title or assignment of the Premises in extinguishment, in whole or
in part, of the debt secured hereby, all right, title and interest of Trustor in
and to all policies of insurance required by this Section 1.08 shall inure to
the benefit of and pass to the successor in interest to Trustor or the purchaser
or grantee of the Premises.
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(e) Trustor shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained under
this Section 1.08, unless Beneficiary has approved the insurance company and the
form and content of the insurance policy, including, without limitation, the
naming thereon of Beneficiary as a named insured with loss, subject to the
rights of the Prior Beneficiary, payable to Beneficiary under a standard
mortgagee endorsement of the character above described and the inclusion of a
provision therein obligating said insurance company to provide Beneficiary with
notice thirty (30) days prior to cancellation, lapse or amendment of any policy.
Trustor shall immediately notify Beneficiary whenever any such separate
insurance is taken out and shall promptly deliver to Beneficiary the policy or
policies of such insurance.
(f) Subject to the Prior Deed of Trust, Beneficiary may, at any time
following the occurrence of an Event of Default under the Agreement, at its
option, to be exercised by written notice to Trustor, require the deposit by
Trustor, at the time of each payment of an installment of interest or principal
under the Agreement, of an additional amount sufficient to discharge the
obligations under this Section 1.08 when they become due. The determination of
the amount so payable and of the fractional part thereof to be deposited with
Beneficiary with each installment, so that the aggregate of such deposit shall
be sufficient for this purpose, shall be made by Beneficiary in its sole
discretion. Such amounts shall be held by Beneficiary without interest in an
account acceptable to Beneficiary and applied to the payment of the obligations
in respect of which such amounts were deposited on or before the respective
dates on which the same or any of them would become delinquent or, at the option
of Beneficiary, to the payment of the Secured Obligations in such order or
priority as Beneficiary shall determine consistent with the Agreement. If one
month prior to the due date of any of the aforementioned obligations the amounts
then on deposit therefor shall be insufficient for the payment of such
obligations in full, Trustor within five (5) days after demand shall deposit the
amount of the deficiency with Beneficiary. Nothing herein contained shall be
deemed to affect any right or remedy of Beneficiary under the provisions of this
Deed of Trust or of any statute or rule of law to pay any such amount and to add
the amount so paid together with interest at the Default Rate to the
indebtedness hereby secured.
Section 1.09 Condemnation. (a) In the event the Mortgaged Property or any
part thereof or interest therein, shall be taken or damaged by eminent domain,
alteration of the grade of any street, or there shall occur any other injury to
or decrease in the value of the Mortgaged Property, by reason of any public or
quasi-public improvement or condemnation proceeding, or in any other similar
manner ("Condemnation"), or should Trustor receive any notice or other
information regarding such Condemnation or a proposed Condemnation, Trustor
shall give prompt written notice thereof to Beneficiary.
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(b) Subject to the Prior Deed of Trust, all compensation, awards and
other payments or relief payable as a result of any such Condemnation, shall be
payable in the manner provided for in the Agreement. Subject to the Prior Deed
of Trust, all such compensation, awards, damages, rights of action and proceeds
awarded to Trustor (the "Proceeds") are hereby assigned to Beneficiary and
Trustor agrees to execute such further assignments of the Proceeds as
Beneficiary may require. Beneficiary shall be under no obligation to question
the amount of any such award or compensation and may accept the same in the
amount paid. Subject to the Prior Deed of Trust, all Proceeds may be applied
either against the Secured Obligations (in such order and priority as
Beneficiary shall determine consistent with the Agreement) or to restore the
Premises, at the discretion of Beneficiary, except as may be otherwise provided
in the Agreement.
(c) Unless otherwise provided in the Agreement, nothing herein
contained shall be deemed to excuse Trustor from repairing or maintaining the
Premises as provided in Section 1.12 hereof or restoring all damage or
destruction to the Mortgaged Property, regardless of whether or not there are
proceeds available or whether any such Proceeds are sufficient in amount, and
the application or release by Beneficiary of any Proceeds shall not cure or
waive any default or notice of default under this Deed of Trust or invalidate
any act done pursuant to such notice.
(d) Receipt by Beneficiary and application in reduction of
indebtedness of any Proceeds less than the full amount of the then outstanding
Secured Obligations shall not defer, alter or modify Trustor's obligation to
continue to pay the regular installments of principal, interest on the
outstanding principal balance and other charges owed in respect of the Secured
Obligations and herein.
(e) Subject to the Prior Deed of Trust, if prior to the receipt of the
Proceeds by Beneficiary the condemned Premises shall have been sold on
foreclosure of this Deed of Trust, Beneficiary shall, nevertheless, have the
right to receive the Proceeds and to retain, for its own account, (i) an amount
equal to the counsel fees, costs and disbursements incurred by Beneficiary in
connection with collection of the Proceeds and not repaid by Trustor and (ii)
the full amount of all such Proceeds, if Beneficiary is the successful purchaser
at the foreclosure sale, to the extent of amounts owed in respect of the Secured
Obligations.
Section 1.10 Beneficiary's Performance of Trustor's Obligations. If Trustor
shall fail to perform any of the covenants contained herein or any covenant
contained in the Agreement or any other Loan Document, Beneficiary may, but
shall not be obligated to, make advances and/or disbursements to perform the
same. Trustor will repay on demand all sums so advanced and/or disbursed with
interest at the Default Rate from the date of making such advance and/or
disbursement until such sums have been repaid and all sums so
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advanced and/or disbursed, together with interest thereon at the Default Rate,
shall be a lien upon the Mortgaged Property and shall be secured hereby. The
provisions of this Section 1.10 shall not prevent any default in the observance
of any covenant contained herein or with respect to the Secured Obligations or
in any other Loan Document from constituting an Event of Default.
Section 1.11 Financial Records. Trustor will provide the financial
statements to Beneficiary required pursuant to the terms of the Agreement.
Section 1.12 Waste and Maintenance. Trustor will not threaten, commit,
permit or suffer any waste to occur on or to the Mortgaged Property or any part
thereof or alter or demolish the Mortgaged Property or any part thereof in any
manner or make any change in its use (except as provided in the Agreement or the
Prior Deed of Trust) or any change which will in any way increase any fire or
other hazards arising out of construction or operation of the Mortgaged
Property. Trustor will, at all times, maintain the Mortgaged Property as
required pursuant to the terms of the Agreement and the Prior Deed of Trust.
Section 1.13 Enforcement Expenses. Except where inconsistent with the laws
of the state in which the Mortgaged Property is located, Trustor agrees that if
any action or proceeding be commenced, including an action to foreclose this
Deed of Trust or to collect the indebtedness hereby secured, to which action or
proceeding Beneficiary is made a party by reason of the execution of this Deed
of Trust or the other Loan Documents which it secures, or in which it becomes
necessary to defend or uphold the lien of this Deed of Trust, all sums paid by
Beneficiary for the expense of any litigation to prosecute or defend or
participate in the transaction and the rights and liens created hereby
(including reasonable attorneys' fees) shall be paid by Trustor together with
interest thereon from date of payment by Beneficiary at the Default Rate. All
such sums paid and the interest thereon shall be immediately due and payable,
shall be a lien upon the Mortgaged Property, and shall be secured hereby as
shall be all such sums incurred in connection with enforcement by Beneficiary of
its rights hereunder or under any other Loan Document.
Section 1.14 Defense of Beneficiary's Interests. If the interest of
Beneficiary in the Mortgaged Property or any part thereof or the lien or
security interest of this Deed of Trust thereon shall be attacked, directly or
indirectly, or if legal proceedings shall be instituted against Trustee, Trustor
or Beneficiary with respect thereto or against Trustor, Trustor upon its
learning thereof, will promptly give written notice thereof to Beneficiary and
Trustor will, at Trustor's cost and expense, exert itself diligently to cure, or
will cause to be cured, any defect that may have developed or be claimed to
exist, and will take all necessary and proper steps for the protection and
defense thereof and will take, or will cause to be taken, such action as is
appropriate to the defense of any such legal proceedings, including, but not
limited to, the employment of counsel and the prosecution and defense of
litigation.
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Section 1.15 No Impairment of Security. In no event shall Trustor do or
permit to be done, or omit to do or permit the omission of, any act or thing,
the doing, or omission, of which would materially impair the security of this
Deed of Trust or materially impair the value of the Mortgaged Property or any
part thereof.
Section 1.16 Restrictions on Transfers and Mortgages. Unless otherwise
permitted pursuant to the terms of the Agreement, Trustor will not directly or
indirectly, by transfer, mortgage, conveyance, or sale of an interest in Trustor
permit, do or suffer the assignment, lease, transfer, sale, conveyance or
encumbrance of the Mortgaged Property, or any part thereof or any interest
therein, without the express prior written consent of Beneficiary unless
otherwise permitted pursuant to the terms of the Agreement and the Prior Deed of
Trust. While the Secured Obligations are outstanding, neither the structure nor
the ownership of Trustor may be changed without the express prior written
consent of Beneficiary unless otherwise permitted pursuant to the terms of the
Agreement and, while the Prior Deed of Trust is in effect, the Prior Deed of
Trust.
Section 1.17 Beneficiary's Defense. Beneficiary or Trustee may appear in
and defend any action or proceeding at law or in equity or in bankruptcy
purporting to affect the Premises or the security hereof or the rights and
powers of Beneficiary or Trustee, and any appellate proceedings, and in such
event Trustor shall pay all of Beneficiary's and Trustee's costs, charges and
expenses, including cost of evidence of title and attorneys' fees incurred in
such action or proceeding. All costs, charges and expenses so incurred, together
with interest thereon at the Default Rate from the date of payment of same by
Beneficiary or Trustee as aforesaid, shall be secured by the lien of this Deed
of Trust and shall be due and payable upon demand.
Section 1.18 Environmental Compliance. Trustor will perform and comply
promptly with, and cause the Premises to be maintained, used and operated in
accordance with, all applicable federal, state and local laws pertaining to air
and water quality, hazardous waste, waste disposal, air emissions and other
environmental matters, as set forth in the Agreement.
Section 1.19 Zoning Changes. Trustor will not consent to, join in, permit
or allow any change in the zoning laws or ordinances relating to or affecting
the Premises which could reasonably be expected to materially adversely affect
the Premises and will promptly notify Beneficiary of any changes to the zoning
laws.
Section 1.20 Grant of Security Interest. Trustor, as further security for
the payment of said indebtedness and in addition to all the rights and remedies
otherwise available to Beneficiary or Trustee under this Deed of Trust and the
other Loan Documents, grants to Beneficiary and Trustee a security interest,
under the Uniform Commercial Code
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as now in effect in the state where all or any of the Fixtures are located, in
and to the Fixtures, and all proceeds thereof. Upon an Event of Default,
Beneficiary and Trustee shall have, in addition to all the other rights and
remedies allowed by law, the rights and remedies of a secured party under the
Uniform Commercial Code as in effect at that time. Trustor further agrees that
the security interest created hereby also secures all expenses of Beneficiary
and Trustee (including reasonable expenses for legal services of every kind, and
cost of any insurance, and payment of taxes or other charges) incurred in or
incidental to, the custody, care, sale or collection of, or realization upon,
any of the property secured hereby or in any way relating to the enforcement or
protection of the rights of Beneficiary or Trustee hereunder, together with
interest thereon at the Default Rate until paid.
Section 1.21 Compliance with Laws and ADA Compliance.
(a) Trustor warrants and covenants that the Premises are and will
continue to be substantially in compliance with all applicable local, county,
state and federal laws and regulations and all building, housing and fire codes,
rules and regulations.
(b) Without limiting the provisions of subsection (a) of this Section
1.21: (i) Trustor represents and warrants to Beneficiary that Trustor is
substantially in compliance with the Americans with Disabilities Act of 1990 (42
U.S.C.A. sec. 12101 et. seq.), as the same may be amended from time to time (the
"ADA") and all other federal, state and local laws pertaining to the
accessibility of the Premises by persons with disabilities (the ADA and such
other laws are, collectively, the "Accessibility Laws"); (ii) Trustor covenants
to ensure that the Premises will at all times substantially comply with all
applicable Accessibility Laws and, upon the request of Beneficiary, Trustor will
conduct such surveys of the Premises as Beneficiary shall require to ascertain
such compliance; (iii) Trustor will maintain accurate records of all
expenditures made in connection with any alterations to the Premises and will
deliver copies thereof to Beneficiary upon Beneficiary's request; and (iv)
Trustor shall defend, indemnify and hold harmless Beneficiary, its employees,
agents, officers and directors, attorneys and any parent or affiliate of
Beneficiary, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, cost or expenses of whatever kind or nature,
known or unknown, contingent or otherwise, arising out or in any way related to
any violations of the Accessibility Laws (including, without limitation, any
costs incurred by Beneficiary in complying with any Accessibility Laws). Neither
payment of the indebtedness secured hereby nor foreclosure shall operate as a
discharge of Trustor's obligations under this subsection (b). In the event
Trustor tenders a deed in lieu of foreclosure, Trustor shall deliver the
Premises to Beneficiary (or its designee) substantially free of any violations
of the Accessibility Laws. In the event Trustor does not timely perform any of
the above obligations, Beneficiary after 30 days notice to Trustor may perform
said obligations at the expense of Trustor and Trustor shall, upon written
demand from Beneficiary, reimburse Beneficiary for all costs, including
attorney's fees and out-of-
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pocket expenses, and all liabilities incurred by Beneficiary by reason of the
foregoing, with interest thereon at the Default Rate from the date of such
payment by Beneficiary to the date of repayment. Until paid, said costs and
expenses shall be secured by this Deed of Trust.
Section 1.22 Other Multistate Mortgages. The indebtedness secured in part
by this Deed of Trust is secured by mortgages and/or deeds of trust encumbering
and conveying lands and other property and/or leasehold interests therein in
other states as more particularly described in the Agreement, all of which
mortgages and/or deeds of trust, including this instrument, being hereafter
referred to as "the mortgage instruments."
It is understood and agreed that all of the properties of all kinds
conveyed or encumbered by the mortgage instruments are security for the Secured
Obligations without allocation of any one or more of the parcels or portions
thereof to any portion of the Secured Obligations less than the whole amount
thereof unless so stated in said mortgage instruments.
Subject to the Prior Deed of Trust, it is specifically covenanted and
agreed that Beneficiary or Trustee may proceed, at the same or at different
times, to foreclose said mortgage instruments, or any of them, by any
proceedings appropriate in the state where any of the land lies, and that no
event of enforcement taking place in any state including, without limiting the
generality of the foregoing, any pending foreclosure, judgment or decree of the
foreclosure, foreclosure sale, rents received, possession taken, deficiency
judgment or decree, or judgment taken on the Secured Obligations, shall in any
way stay, preclude or bar enforcement of the mortgage instruments or any of them
in any other state, and that, Beneficiary or Trustee may pursue any or all its
remedies to the maximum extent permitted by state law until all of the Secured
Obligations now or hereafter secured by any or all of the mortgage instruments
has been paid and discharged in full.
Neither Trustor, nor any person claiming under Trustor, shall have or enjoy
any right to marshaling of assets, all such right being hereby expressly waived
as to Trustor and all persons claiming under it, including junior lienors. No
release of personal liability of any person whatever and no release of any
portion of the property now or hereafter subject to the lien of any of the
mortgage instruments shall have any effect whatever by way of impairment or
disturbance of the lien or priority of any of said mortgage instruments. Any
foreclosure or other appropriate remedy brought in any of the states aforesaid
may be brought and prosecuted as to any part of the mortgaged security, wherever
located, without regard to the fact that foreclosure proceedings or other
appropriate remedies have or have not been instituted elsewhere on any other
land subject to the lien of said mortgage instruments or any of them.
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Section 1.23 Leasehold and Leasehold Instruments.
(a) Trustor covenants and agrees to faithfully comply with and perform
all of its obligations under the Leasehold Instruments and to promptly cure any
default by it under the Leasehold Instruments.
(b) Trustor may modify, amend or terminate any Leasehold Instrument
without the prior written consent provided such action is consistent with the
terms of the Agreement and the Prior Deed of Trust.
(c) Trustor will promptly give Beneficiary a copy of any default
notice given to Trustor with respect to any Leasehold Instrument.
ARTICLE II
EVENTS OF DEFAULT AND REMEDIES
Section 2.01 Events of Default. The following shall constitute defaults
hereunder and, after the giving of notice and the passage of time, if any, as
provided herein, shall constitute "Events of Default" hereunder:
(a) If Trustor shall fail to pay when due any Secured Obligation after
the passage of any applicable notice or grace period, if any; or
(b) If an Event of Default, as defined in the Agreement, shall occur
under the Agreement.
Section 2.02 Beneficiary's Remedies. (a) During the continuance of any
Event of Default, Beneficiary, without notice or presentment, each of which are
hereby waived by Trustor, may, subject to the provisions of the Agreement,
declare the entire principal of the Secured Obligations then outstanding and all
accrued and unpaid interest thereon and all other amounts owing in respect
thereof (if not then due and payable, whether by acceleration or otherwise), to
be due and payable immediately, and upon any such declaration the principal of
the Secured Obligations and said accrued and unpaid interest shall become and be
immediately due and payable, anything in the instruments evidencing the Secured
Obligations or in this Deed of Trust to the contrary notwithstanding;
(b) During the continuance of any Event of Default, Beneficiary or
Trustee may, subject to the Prior Deed of Trust, enter into and upon all or any
part of the Premises, and, having and holding the same, may use, operate, manage
and control the Mortgaged
20
Property or any part thereof and conduct the business thereof, either personally
or by its superintendents, managers, agents, servants, attorneys or receivers;
and likewise, from time to time, at the expense of Trustor, Beneficiary and/or
Trustee may make all necessary or proper repairs, renewals and replacements and
such useful alterations, additions, betterments and improvements thereto and
thereon as to it may deem advisable in its sole judgment; and in every such case
Beneficiary and/or Trustee shall have the right to manage and operate the
Mortgaged Property and to carry on the business thereof and exercise all rights
and powers of Trustor with respect thereto either in the name of Trustor or
otherwise as Beneficiary or Trustee shall deem best; and Beneficiary or Trustee
shall be entitled, subject to the Prior Deed of Trust with or without entering
into or upon the Premises, to collect and receive all gross receipts, earnings,
revenues, rents, maintenance payments, issues, profits and income of the
Mortgaged Property and every part thereof, all of which shall for all purposes
constitute property of Beneficiary; and, after deducting the expenses of
conducting the business thereof and of all maintenance, repairs, renewals,
replacement, alterations, additions, betterments and improvements and amounts
necessary to pay taxes, assessments, insurance and prior or other proper charges
upon the Mortgaged Property or any part thereof, as well as just and reasonable
compensation for the services of Beneficiary and/or Trustee and for all
attorneys, counsel, agents, clerks, servants and other employees by it properly
engaged and employed, Beneficiary may apply the moneys arising as aforesaid in
such manner and at such times as Beneficiary shall determine in its discretion
consistent with the Agreement to the payment of the Secured Obligations and the
interest thereon, when and as the same shall become payable and/or to the
payment of any other sums required to be paid by Trustor under this Deed of
Trust;
(c) During the continuance of any such Event of Default, Trustor
covenants and agrees as follows (subject, in each case, to the Prior Deed of
Trust and Sections 5.05 and 5.06 of this Deed of Trust):
(1) Trustee or Beneficiary may, with or without entry, personally or
by their agents or attorneys, insofar as applicable, sell the Mortgaged
Property or any part thereof and pursuant to the procedures provided by
law, and all estate, right, title, interest, claim and demand therein, and
right of redemption thereof, at one or more sales as an entity or in
parcels, and at such time and place upon such terms and after such notice
thereof as may be required or permitted by law; or
(2) Trustee or Beneficiary may institute an action of mortgage
foreclosure or institute other proceedings according to law for the
foreclosure hereof, and may prosecute the same to judgment, execution and
sale for the collection of the Secured Obligations secured hereby, and all
interest with respect thereto, together with all taxes and insurance
premiums advanced by
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Beneficiary or Trustee and other sums payable by Trustor hereunder, and all
fees, costs and expenses of such proceedings, including attorneys' fees and
expenses; or
(3) Trustee or Beneficiary may, if default be made in the payment of
any part of the Secured Obligations, proceed with foreclosure of the liens
evidenced hereby in satisfaction of such item either through the courts or
by conducting the sale as herein provided, and proceed with foreclosure of
the security interest created hereby, all without declaring the whole of
the Secured Obligations due, and provided that if sale of the Mortgaged
Property, or any portion thereof, is made because of default in payment of
a part of the Secured Obligations, such sale may be made subject to the
unmatured part of the Secured Obligations, but as to such unmatured part of
the Secured Obligations (and it is agreed that such sale, if so made, shall
not in any manner affect the unmatured part of the Secured Obligations)
this Deed of Trust shall remain in full force and effect just as though no
sale had been made under the provisions of this paragraph. And it is
further agreed that several sales may be made hereunder without exhausting
the right of sale for any unmatured part of the Secured Obligations, it
being the purpose to provide for a foreclosure and sale of the Mortgaged
Property, or any part thereof, for any matured portion of the Secured
Obligations without exhausting the power to foreclose and to sell the
Mortgaged Property, or any part thereof, for any other part of the Secured
Obligations whether matured at the time or subsequently maturing; or
(4) Trustee or Beneficiary may take such steps to protect and enforce
its rights whether by action, suit or proceeding in equity or at law for
the specific performance of any covenant, condition or agreement in the
Loan Documents or in aid of the execution of any power herein granted, or
for any foreclosure hereunder, or for the enforcement of any other
appropriate legal or equitable remedy or otherwise as Beneficiary or
Trustee shall elect; or
(5) Beneficiary or Trustee may exercise in respect of the Mortgaged
Property consisting of Fixtures, all of the rights and remedies available
to a secured party upon default under the applicable provisions of the
Uniform Commercial Code as then in effect in the state where the Mortgaged
Property is located; or
(6) Beneficiary or Trustee may apply any proceeds or amounts held in
escrow pursuant to the terms of this Deed of Trust to payment of any part
of the Secured Obligations in such order of priority as Beneficiary may
determine consistent with the Agreement; or
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(7) Any sale as aforesaid may be subject to such existing tenancies as
Beneficiary, in its sole discretion, may elect.
Section 2.03 Sale, Foreclosure, etc. (a) Beneficiary or Trustee may adjourn
from time to time any sale by it to be made under or by virtue of this Deed of
Trust by announcement at the time and place appointed for such sale or for such
adjourned sale or sales; and, except as otherwise provided by any applicable
provision of law, Beneficiary or Trustee, without further notice or publication,
may make such sale at the time and place to which the same shall be so
adjourned.
(b) Upon the completion of any sale or sales made by Beneficiary or
Trustee under or by virtue of this Article II, Beneficiary or Trustee, or any
officer of any court empowered to do so, shall execute and deliver to the
accepted purchaser or purchasers a good and sufficient instrument, or good and
sufficient instruments, conveying, assigning and transferring all estate, right,
title and interest in and to the properties, interests and rights sold. Subject
to the Prior Deed of Trust, Beneficiary and Trustee are each hereby irrevocably
appointed the true and lawful attorney of Trustor, in its name and stead, to
make all the necessary conveyances, assignments, transfers and deliveries of any
part of the Mortgaged Property and rights so sold, and for that purpose
Beneficiary or Trustee may execute all necessary instruments of conveyance,
assignment and transfer and may substitute one or more persons with like power,
Trustor hereby ratifying and confirming all that its said attorney or such
substitute or substitutes shall lawfully do by virtue hereof. Nevertheless,
Trustor, if so requested by Beneficiary or Trustee, shall ratify and confirm any
such sale or sales by executing and delivering to Beneficiary or Trustee or to
such purchaser or purchasers all such instruments as may be advisable, in the
reasonable judgment of Beneficiary or Trustee, for the purpose and as may be
designated in such request.
(c) Upon any sale, whether under the power of sale hereby given or by
virtue of judicial proceedings, it shall not be necessary for Beneficiary or
Trustee, or any public officer acting under execution or order of court, to have
present or constructive possession of any of the Mortgaged Property.
(d) The recitals contained in any conveyance made by Beneficiary or
Trustee to any purchaser at any sale made pursuant hereto or under applicable
law shall be full evidence of the matters therein stated, and all prerequisites
to such sale shall be presumed to have been satisfied and performed.
(e) Any such sale or sales made under or by virtue of this Deed of
Trust, whether under the power of sale hereby granted and conferred, or under or
by virtue of any judicial proceedings, shall operate to divest all right, title,
interest, claim and demand whatsoever, either by law or in equity, of Trustor in
and to the premises and property sold,
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and shall be a perpetual bar, both at law and in equity, against Trustor, its
successors and assigns, and (subject to the Prior Deed of Trust) against any and
all persons or entities claiming the premises and property sold, or any part
thereof, from through or under Trustor and its successors or assigns.
(f) The receipt given by Beneficiary or Trustee for the purchase money
paid at any such sale, or the receipt given by any other person authorized to
receive the same, shall be sufficient discharge therefor to any purchaser of the
property, or any part thereof, sold as aforesaid, and no such purchaser, or his
representatives, grantees or assigns, after paying such purchase money and
receiving such receipt, shall be bound (i) to see to the application of such
purchase money or any part thereof upon or for any trust or purpose of this Deed
of Trust, (ii) by the misapplication or nonapplication of any such purchase
money, or any part thereof, or (iii) to inquire as to the authorization,
necessity, expediency or regularity of any such sale.
(g) In case the liens or security interests hereunder, or by the
exercise of any other right or power, shall be foreclosed by Beneficiary's or
Trustee's sale or by other judicial or non-judicial action, the purchaser at any
such sale shall receive, as an incident to its ownership, immediate possession
of the property purchased, and if Trustor or Trustor's successors shall hold
possession of said property, or any part thereof, subsequent to foreclosure,
Trustor or Trustor's successors shall be considered as tenants at sufferance of
the purchaser at foreclosure sale, and anyone occupying the property after
demand made for possession thereof shall be guilty of forcible detainer and
shall be subject to eviction and removal, forcible or otherwise, with or without
process of law, and all damages by reason thereof are hereby expressly waived.
(h) In the event a foreclosure hereunder shall be commenced by
Beneficiary or Trustee, Beneficiary or Trustee may at any time before the sale
abandon the suit, and may then institute suit for the collection of the Secured
Obligations and for the foreclosure of the liens and security interest hereof.
If Beneficiary or Trustee should institute a suit for the collection of the
Secured Obligations and for a foreclosure of the liens and security interest
hereof, it may at any time before the entry of a final judgment in said suit
dismiss the same and proceed to sell the Mortgaged Property, or any part
thereof, in accordance with provisions of this Deed of Trust.
(i) Any reasonable expenses incurred by Beneficiary or Trustee in
prosecuting, resetting or settling the claim of Beneficiary shall become an
additional Secured Obligation of Trustor hereunder.
(j) In the event of any sale made under or by virtue of this Article
II (whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale), the
entire principal of, and interest on, the
24
Secured Obligations, if not previously due and payable, and all other sums
required to be paid by Trustor pursuant to this Deed of Trust, immediately
thereupon shall, anything in the Secured Obligations or in this Deed of Trust to
the contrary notwithstanding, become due and payable.
(k) The purchase money proceeds or avails of any sale made under or by
virtue of this Article II, together with any other sums which then may be held
by Beneficiary under this Deed of Trust, whether under the provisions of this
Article II or otherwise, shall be applied in accordance with the laws of the
state where the Mortgaged Property is located, and to the extent not
inconsistent, first to the payment of the costs and expenses of such sale,
including reasonable compensation to Beneficiary or Trustee and their agents and
counsel, second to the payment of the amounts due and owing under or in respect
of the Secured Obligations for principal and interest and any other amounts
including (without limitation) any other sums required to be paid by Trustor
pursuant to any provision of this Deed of Trust or any other Loan Document, with
interest at the Default Rate from and after the happening of any Event of
Default in the order set forth in Section 7.2 of the Agreement, all with
interest at the Default Rate from the date such sums were or are required to be
paid under this Deed of Trust, and third to the payment of the surplus, if any,
to whomsoever may be lawfully entitled to receive the same.
(l) Upon any sale made under or by virtue of this Article II, whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Beneficiary and
any other Secured Party or Trustee may bid for and acquire the Mortgaged
Property or any part thereof and Beneficiary and any other Secured Party in lieu
of paying cash therefor may make settlement for the purchase price by crediting
some or all of the indebtedness of Trustor secured by this Deed of Trust owing
to such Secured Party (or, in the case of Beneficiary, owing to all Secured
Parties) the net sales price after deducting therefrom the expenses of the sale
and the costs of the action and any other sums which Beneficiary or Trustee is
authorized to deduct under this Deed of Trust.
Section 2.04 Payments, Judgment, etc. (a) In case an Event of Default under
the Agreement and the acceleration of the obligations thereunder shall have
occurred, then Trustor will in accordance with the Agreement pay to Beneficiary
the whole amount which then shall have become due and payable on the Secured
Obligations, whether for principal and interest or both or otherwise, as the
case may be, which interest shall then accrue at the Default Rate on the then
unpaid principal of or other amounts constituting the Secured Obligations, and
the sums required to be paid by Trustor pursuant to any provision of this Deed
of Trust, and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including compensation to
Beneficiary and/or Trustee, their agents and counsel and any expenses incurred
by Beneficiary or Trustee hereunder. In the event Trustor shall fail forthwith
to pay such amounts upon demand, Beneficiary and/or Trustee shall be entitled
and empowered to institute such action or proceedings at law or in equity as may
be advised by its counsel for the
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collection of the sums so due and unpaid, and may prosecute any such action or
proceedings to judgment or final decree.
(b) Beneficiary and/or Trustee shall be entitled to recover judgment
as aforesaid either before or after or during the pendency of any proceedings
for the enforcement of the provisions of this Deed of Trust and the right of
Beneficiary and/or Trustee to recover such judgment shall not be affected by any
entry or sale hereunder, or by the exercise of any other right, power or remedy
for the enforcement of the provisions of this Deed of Trust or the foreclosure
of the lien hereof; and in the event of a sale of the Mortgaged Property or any
part thereof and of the application of the proceeds of sale, as provided in this
Deed of Trust, to the payment of the indebtedness hereby secured, Beneficiary
and/or Trustee shall be entitled to enforce payment of, and to receive all
amounts then remaining due and unpaid upon, the Secured Obligations, and to
enforce payment of all other charges, payments and costs due under this Deed of
Trust and shall be entitled to recover judgment for any portion of the debt
remaining unpaid, with interest thereon at the Default Rate. In case of
proceedings against Trustor in insolvency or bankruptcy or any proceedings for
its reorganization or involving the liquidation of its assets, then Beneficiary
and/or Trustee shall be entitled to prove the whole amount of principal and
interest due upon the Secured Obligations to the full amount thereof, and all
other payments, charges and costs due under this Deed of Trust without deducting
therefrom any proceeds obtained from the sale of the whole or any part of the
Mortgaged Property.
(c) No recovery of any judgment by Beneficiary or Trustee and no levy
of an execution under any judgment upon the Mortgaged Property or upon any other
property of Trustor shall affect, in any manner or to any extent, the lien of
this Deed of Trust upon the Mortgaged Property or any part thereof, or any
liens, rights, powers or remedies of Beneficiary or Trustee hereunder, but such
liens, rights, powers and remedies of Beneficiary or Trustee shall continue
unimpaired as before.
(d) Any moneys thus collected by Beneficiary or Trustee under this
Section 2.04 shall be applied by Beneficiary in accordance with the provisions
of paragraph (k) of Section 2.03.
Section 2.05 Receiver, Waiver. After the happening of any Event of Default
and immediately upon the commencement of any action, suit or other legal
proceedings by Beneficiary or Trustee to obtain judgment for the principal of,
or interest on, and any other amounts constituting the Secured Obligations,
including (without limitation) all other sums required to be paid by Trustor
pursuant to any provision of this Deed of Trust or of any nature in aid of the
enforcement of the Secured Obligations or of this Deed of Trust, Trustor will
(a) waive the issuance and service of process and submit to a voluntary
appearance in such action, suit or proceeding and (b) subject to the Prior Deed
of Trust, if required by Beneficiary or
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Trustee, consent to the appointment of a receiver or receivers of the Mortgaged
Property or any part thereof and of all the earnings, revenues, rents,
maintenance payments, issues, profits and income thereof in accordance with
Section 2.11 hereof. After the happening of any Event of Default and during its
continuance, or upon the commencement of any proceedings to foreclose this Deed
of Trust or to enforce the specific performance hereof or in aid thereof or upon
the commencement of any other judicial proceeding to enforce any right of
Beneficiary or Trustee, subject to the Prior Deed of Trust, Beneficiary or
Trustee shall be entitled, as a matter of right, if it shall so elect, without
the giving of notice to any other party and without regard to the adequacy or
inadequacy of any security for the Deed of Trust indebtedness, forthwith either
before or after declaring the unpaid principal of the Secured Obligations to be
due and payable, to the appointment of such a receiver or receivers.
Section 2.06 Beneficiary's Possession. Notwithstanding the appointment of
any receiver, liquidator or trustee of Trustor or of any of its property, or of
the Mortgaged Property or any part thereof, Beneficiary and Trustee shall,
subject to the Prior Deed of Trust, be entitled to retain possession and control
of the Mortgaged Property.
Section 2.07 Remedies Cumulative. No remedy herein conferred upon or
reserved to Beneficiary or Trustee is intended to be exclusive of any other
remedy or remedies which Beneficiary or Trustee may be entitled to exercise
against Trustor and each and every such remedy shall be cumulative, and shall be
in addition to every other remedy given hereunder or in the Agreement or in any
other Loan Document now or hereafter existing at law or in equity or by statute.
No delay by or omission of Beneficiary or Trustee to exercise any right or power
shall be construed to be a waiver of any Event of Default or any acquiescence
therein; and every power and remedy given in this Deed of Trust or in the
Agreement or in any other Loan Document to Beneficiary or Trustee may be
exercised from time to time as often as may be deemed expedient by Beneficiary
or Trustee. The resort to any remedy provided hereunder or in the Agreement or
in any other Loan Document or provided by law or at equity shall not prevent the
concurrent or subsequent employment of any other appropriate remedy or remedies
against Trustor. By the acceptance of payment of principal of or interest on or
any other amount due in respect of any of the Secured Obligations after its due
date, Beneficiary and Trustee do not waive the right either to require prompt
payment when due of all other amounts secured hereby or to regard as an Event of
Default the failure to pay any other such amounts. Nothing in this Deed of Trust
or in the Agreement or in any instrument evidencing the Secured Obligations
shall affect the obligation of Trustor to pay (i) the principal of, and interest
on, the Secured Obligations in the manner and at the time and place therein or
in the Agreement expressed or (ii) the other Secured Obligations in the manner
and at the time herein expressed.
Section 2.08 Agreement by Trustor. Trustor will not at any time insist
upon, or plead, or in any manner whatever claim or take any benefit or advantage
of any stay or extension or moratorium law, any exemption from execution or sale
of the Mortgaged Property or
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any part thereof, wherever enacted, now or at any time hereafter in force, which
may affect the covenants and terms of performance of this Deed of Trust or any
other Loan Document, or claim, take or insist upon any benefit or advantage of
any law now or hereafter in force providing for the valuation or appraisal of
the Mortgaged Property, or any part thereof, prior to any sale or sales thereof
which may be made pursuant to any provision herein, or pursuant to the decree,
judgment or order of any court of competent jurisdiction, or, after any such
sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted to redeem the property so sold or any part thereof; and
Trustor hereby expressly waives all benefit or advantage of any such law or laws
and covenants not to hinder, delay or impede the execution of any power herein
granted or delegated to Beneficiary or Trustee, but to suffer and permit the
execution of every power as though no such law or laws had been made or enacted.
Trustor, waives, to the extent that it lawfully may, all right to have the
Mortgaged Property or any part thereof marshaled upon any foreclosure hereof.
Section 2.09 Use and Occupancy Payments. During the continuance of any
Event of Default and pending the exercise by Beneficiary and Trustee of their
rights to exclude Trustor from all or any part of the Premises, unless Trustor
is legally entitled to continue possession of the Premises, Trustor agrees to
pay to Beneficiary the fair and reasonable rental value, which amount shall be
determined by the Beneficiary in its reasonable judgment, for the use and
occupancy of the Premises or any portion thereof which are in its possession for
such period and, upon default of any such payment, will, subject to the Prior
Deed of Trust, vacate and surrender possession of the Premises to Beneficiary or
Trustee or to a receiver, if any, and in default thereof may be evicted by any
summary action or proceeding for the recovery of possession of the Premises for
non-payment of rent, however designated. Any payments received under this
Section 2.09 by Beneficiary shall be applied in accordance with Section 2.03(k)
of this Deed of Trust.
Section 2.10 Beneficiary's Right to Purchase. In case of any sale under the
foregoing provisions of this Article II, whether made under the power of sale
hereby given or pursuant to judicial proceedings, Beneficiary or Trustee may bid
for and purchase any property, and may make payment therefor as hereinafter set
forth or as set forth in Section 2.03(l) above, and, upon compliance with the
terms of said sale, may hold, retain and dispose of such property without
further accountability therefor. For the purpose of making settlement or payment
for the property or properties purchased, Beneficiary and Trustee shall be
entitled to use and apply such of the Secured Obligations held by it or the
other Secured Parties, including (without limitation) any accrued and unpaid
interest thereon, as it may elect, or as may be otherwise provided for in
Section 2.03(l) above.
Section 2.11 Appointment of Receiver. Upon application of Beneficiary or
Trustee to any court of competent jurisdiction, if any Event of Default shall
have occurred and so long as it shall be continuing, to the extent permitted by
law, and subject to the Prior Deed of Trust,
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a receiver may be appointed to take possession of and to operate, maintain,
develop and manage the Mortgaged Property or any part thereof. In every case
when a receiver of the whole or any part of the Mortgaged Property shall be
appointed under this Section 2.11 or otherwise, the net income and profits of
the Mortgaged Property shall, subject to the order of any court of competent
jurisdiction, and subject to the Prior Deed of Trust, be paid over to, and shall
be received by, Beneficiary or Trustee to be applied as provided in Section
2.03(k) hereof.
Section 2.12 No Waiver. Beneficiary and/or Trustee may resort to any
security given by this Deed of Trust or to any other security now existing or
hereafter given to secure the payment of any of the Secured Obligations secured
hereby, in whole or in part, and in such portions and in such order as may seem
best to Beneficiary or Trustee in its reasonable discretion, and any such action
shall not in any way be considered as a waiver of any of the rights, benefits,
liens or security interest created by this Deed of Trust.
ARTICLE III
ASSIGNMENT OF LEASES AND RENTS
Section 3.01 Lease Related Definitions. As used in this Deed of Trust: (a)
"Lease" means any lease, sublease, or other similar agreement, now or hereafter
existing, under the terms of which any person other than Trustor has or acquires
any right to occupancy or use of the Mortgaged Property, or any part thereof, or
interest therein; (b) "Lessee" means the lessee, sublessee, licensee, tenant or
other person having the right to occupy or use all or any part of the Mortgaged
Property under a Lease; and (c) "Rent" means the rents, additional rents and
other consideration payable to Trustor by the Lessee under the terms of a Lease.
Whenever reference is made in this Deed of Trust to a lease, license, lessee,
licensee, tenancy or tenant, such reference shall be deemed to include a
sublease, sublessee, license, licensee, subtenancy or subtenant, as the case may
be.
Section 3.02 Assignment of Leases and Rents. Trustor hereby assigns to
Beneficiary and to Trustee for the benefit of Beneficiary all Leases, together
with all Rents payable under the Leases, now or at any time hereafter existing,
such assignment being subject to the Prior Deed of Trust and upon the following
terms: (a) until receipt from Beneficiary of notice of the occurrence of an
Event of Default, each Lessee may pay rent directly to Trustor, (b) upon receipt
from Beneficiary of notice that an Event of Default exists, each Lessee shall,
and is hereby authorized and directed to, pay directly to Beneficiary or Trustee
(as therein specified) all Rent thereafter accruing, and the receipt of such
Rent by Beneficiary or Trustee shall be a release of such Lessee to the extent
of all amounts so paid, (c) Rent so received by Beneficiary or Trustee shall be
applied by Beneficiary or Trustee first to the expenses, if any, of collection
and then in accordance with Article II hereof, (d) without impairing its rights
hereunder, Beneficiary or Trustee may, at its option, at any time and from time
to time, release to Trustor
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Rent so received by Beneficiary or Trustee, or any part thereof, (e) Beneficiary
and Trustee shall not be liable for their failure to collect, or their failure
to exercise diligence in the collection of, Rent, but shall be accountable only
for Rent that they shall actually receive. As among Beneficiary, Trustee,
Trustor and any person claiming through or under Trustor, the assignment
contained in this Section 3.02 is intended to be absolute, unconditional and
presently effective, and the provisions of subsection 3.02(a) are intended for
the benefit of each Lessee and shall never inure to the benefit of Trustor or
any person claiming through or under Trustor. It shall never be necessary for
Beneficiary or Trustee to institute legal proceedings of any kind whatsoever to
enforce the provisions of this Section 3.02. Notwithstanding anything herein to
the contrary, Trustor may collect such Rent until such time as an Event of
Default shall occur hereunder.
Section 3.03 Beneficiary's Consent. Nothing in this Article III shall ever
be construed as (a) allowing any Lease without Beneficiary's prior written
consent unless otherwise permitted under the Agreement, or (b) subordinating
this Deed of Trust to any Lease.
Section 3.04 Lease Related Covenants. Trustor covenants to: (a) upon demand
by Beneficiary and subject to the Prior Deed of Trust, assign to Beneficiary or
Trustee, by separate instrument in form and substance satisfactory to
Beneficiary, any and all Leases, and/or all Rents payable thereunder, including,
but not limited to, any Lease which is now in existence or which may be executed
after the date hereof; (b) not accept from any Lessee, nor permit any Lessee to
pay, Rent for more than one month in advance except for payment in the nature of
security for performance of Lessee's obligations unless otherwise provided for
in the Lease; (c) comply with the terms and provisions of each Lease including,
without limitation, the payment of all sums required to be paid by Trustor or
which any Lessor has an option to pay under any Lease in order to prevent any
reduction in or offset against any Rent payable under any Lease or any default
thereunder; (d) not amend, extend, cancel, abridge, or otherwise modify, or
accept surrender of, or renew, any Lease without the written consent of
Beneficiary other than in the ordinary course of business, (e) not assign,
transfer or mortgage any Lease without the written consent of Beneficiary; (f)
not assign, transfer, pledge or mortgage any Rent; (g) not waive, excuse,
release or condone any nonperformance of any covenant of any Lease by any Lessee
other than in the ordinary course of business; (h) give to Beneficiary and
Trustee duplicate notice of each material default by each Lessee; (i) on all
Leases executed after the date hereof, cause each Lessee to agree (and each
Lessee under each Lease executed after the date hereof does so agree) to give to
Beneficiary and Trustee written notice of each and every material default by
Trustor under its Lease and not exercise any remedies under such Lease unless
Beneficiary or Trustee fails to cure such material default within a reasonable
period after Beneficiary and Trustee have received such notice; provided, that
Beneficiary or Trustee shall never have any obligation or duty to cure any such
material default; (j) enforce its rights with regard to all Leases in the
ordinary course of business; and (k) not enter into any Lease affecting
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the Mortgaged Property or any part thereof unless otherwise permitted under the
Agreement and the Prior Deed of Trust without the prior approval of Beneficiary.
Section 3.05 Beneficiary Not Liable. Beneficiary and/or Trustee shall not
be obligated to perform or discharge, nor does it hereby undertake to perform or
discharge, any obligation, duty or liability under any Lease, or under or by
reason of this assignment, and Trustor shall and does hereby agree to indemnify
and to hold Beneficiary and Trustee harmless from and against any and all
liability, loss or damage which Beneficiary or Trustee may or might incur under
any Lease or under or by reason of this assignment and from and against any and
all claims and demands whatsoever which may be asserted against Beneficiary or
Trustee by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants or agreements contained in any
Lease. Should Beneficiary or Trustee incur any such liability, loss or damage
under any Lease or under or by reason of this assignment, or in the defense of
any such claims or demands, the amount thereof, including all costs, expenses
and attorneys' fees, shall be secured hereby and constitute part of the Secured
Obligations, and Trustor shall reimburse Beneficiary therefore immediately upon
demand, and upon the failure of Trustor to do so, Beneficiary may declare all
sums secured by this Deed of Trust immediately due and payable.
Section 3.06 Estoppel Certificates. On all Leases executed after the date
hereof, all Leases shall provide for the giving by the Lessee of certificates
with respect to the status of such Leases, and Trustor shall exercise its right
to request such certificates within ten (10) days of any demand therefor by
Beneficiary. Trustor shall furnish to Beneficiary or Trustee, within ten (10)
days after a request by Beneficiary or Trustee to do so, an executed counterpart
of all Leases.
Section 3.07 Lease Approval Requirements. On all Leases executed after the
date hereof, all Leases and Lessees of the Premises, or any part thereof, must
be acceptable to and approved by Beneficiary unless otherwise provided under the
Agreement; and all Lessees shall execute such estoppel certificates,
subordinations, attornments and other agreements as Beneficiary may require.
Under no circumstances shall Beneficiary or Trustee be liable for any obligation
to pay any leasing commission, brokerage fee or similar fee or charge in
connection with any Lease nor shall Beneficiary or Trustee be obligated to
complete any Improvements for the benefit of any Lessee.
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ARTICLE IV
MISCELLANEOUS
Section 4.01 Benefit of Beneficiary. All of the grants, covenants, terms,
provisions and conditions of this Deed of Trust shall run with the land and
shall apply to, bind and inure to the benefit of the successors and assigns of
the respective parties hereto; provided, that Trustor may not assign its
obligations hereunder without the prior written consent of Beneficiary.
Section 4.02 Savings Clause. In the event 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, at the option of Beneficiary, 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
or therein.
Section 4.03 Notices. All notices hereunder shall be given pursuant to the
terms of Section 9.1 of the Agreement, and supplementing such provisions,
notices required to be given to Trustee shall be given at Trustee's address set
forth herein.
Section 4.04 Governing Law. This Deed of Trust shall, without regard to
place of contract or payment, be construed and enforced according to the laws of
the state where the Mortgaged Property is located, all without regard to
principles of conflict of laws.
Section 4.05 No Change. Neither this Deed of Trust nor any provision hereof
may be changed, waived, discharged or terminated, except by an instrument in
writing, signed by Beneficiary and Trustor.
Section 4.06 Security Agreement and Fixture Filing. This Deed of Trust
shall be deemed to be a security agreement and fixture filing pursuant to the
Uniform Commercial Code of the state where the Mortgaged Property is located.
Section 4.07 No Usury. In the event that Beneficiary, in enforcing its
rights hereunder, determines that charges and fees incurred in connection with
the Secured Obligations may, under the applicable usury laws, cause the interest
rate herein to exceed the maximum allowed by law, then such interest shall be
recalculated and any excess over the maximum interest permitted by said laws
shall be credited to the then principal outstanding balance to reduce said
balance by that amount. It is the intent of the parties hereto that Trustor
under no circumstances shall be required to pay, nor shall Beneficiary be
entitled to collect, any interest which is in excess of the maximum legal rate
permitted under the applicable usury laws.
32
Section 4.08 Effect of Partial Release. No release of any part of the
Mortgaged Property or of any other property conveyed to secure the Secured
Obligations shall in any way alter, vary or diminish the force, effect or lien
or security interest of this Deed of Trust on the Mortgaged Property or portion
thereof remaining subject to the lien and security interest created hereby.
Section 4.09 Beneficiary's Dealing with Successors and Lessees. Subject to
the Prior Deed of Trust, in the event Trustor or any of Trustor's successors
conveys or leases without the prior approval of Beneficiary (except as otherwise
permitted herein or in the Agreement or the Prior Deed of Trust) any interest in
the Mortgaged Property, or any part thereof, to any other party, Beneficiary and
Trustee may deal with any owner or lessee of any part of the Mortgaged Property
with reference to this Deed of Trust and to the Secured Obligations, either by
forbearance on the part of Beneficiary or release of all or any part of the
Mortgaged Property or of any other property securing payment of any Secured
Obligations, without in any way modifying or affecting Beneficiary's and
Trustee's rights, remedies, liens or security interests hereunder (including the
right to exercise any one or more of the remedies described or referred to in
Article I, Article II, Article III or Article IV hereof in the event such
conveyance is made in contravention of the provisions of this Deed of Trust) or
the liability of Trustor or any other party liable for the payment of the
Secured Obligations, in whole or in part. This shall not be construed to allow
any such conveyance or leasing by Trustor, except as permitted herein or in the
Agreement.
Section 4.10 No Waiver by Beneficiary. All options and rights of election
herein provided for the benefit of Beneficiary and/or Trustee are continuing,
and the failure to exercise any such option or right or election upon a
particular default or breach or upon any subsequent default or breach shall not
be construed as waiving the right to exercise such option or election at any
later date. By the acceptance of payment of principal or interest after its due
date, Beneficiary and/or Trustee does not waive the right either to require
prompt payment when due of all other amounts secured hereby or to regard as an
Event of Default the failure to pay any other such amounts. No exercise of the
rights and powers herein granted and no delay or omission in the exercise of
such rights and powers shall be held to exhaust the same or be construed as a
waiver thereof, and every such right and power may be exercised at any time and
from time to time. All grants, covenants, terms and conditions hereof shall bind
Trustor and all successive owners of the Premises.
Section 4.11 Headings Descriptive. The headings of the several sections and
subsections of this Deed of Trust are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this Deed
of Trust.
SECTION 4.12 WAIVER OF TRIAL BY JURY. THE TRUSTOR, TRUSTEE AND BENEFICIARY
WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
33
PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY CONNECTED TO THIS DEED OF
TRUST.
Section 4.13 Indemnification. The Trustor agrees to pay, and to save,
indemnify and keep the Beneficiary and its respective directors, officers,
employees, attorneys, experts, and agents harmless from, any and all
liabilities, costs and expenses (including, without limitation, legal fees and
expenses), losses or damages (i) with respect to, or resulting from, any delay
in paying, any and all excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Mortgaged Property, (ii)
with respect to, or resulting from, any delay in complying with any requirement
of law applicable to any of the Mortgaged Property or (iii) in connection with
any of the transactions contemplated by this Deed of Trust, including the fees
and disbursements of counsel and of any other experts, which Beneficiary or its
respective directors, officers, employees, attorneys, experts or agents may
incur in connection with (w) the administration or enforcement of this Deed of
Trust, including such expenses as are incurred to preserve the value of the
Mortgaged Property and the validity, perfection, rank and value of any liens
granted hereunder, (x) the collection, sale or other disposition of any of the
Mortgaged Property, (y) the exercise by the Beneficiary of any of the rights
conferred upon it hereunder or (z) any Default or Event of Default, but
excluding any such liabilities, costs and expenses, losses or damages incurred
solely by reason of the gross negligence or willful misconduct of the party
seeking to be indemnified as determined by a final order or judgment of a court
of competent jurisdiction.
Any amount due hereunder which is not paid on demand shall bear interest at
a rate equal to the Default Rate and shall be a lien upon the Mortgaged Property
and shall be secured hereby.
The agreements of the Trustor contained in this Section 4.13 shall survive
the payment and performance of the Secured Obligations and the termination of
the liens and security interests granted hereby. All of the Trustor's
obligations to indemnify Beneficiary and its directors, officers, employees,
attorneys, experts and agents hereunder shall (without duplication) be in
addition to, and shall not limit in any way, the Trustor's indemnification
obligations contained in the Agreement or in any other Loan Document.
Section 4.14 Advances under the Agreement. It is understood and agreed that
the funds to be advanced under this Deed of Trust are to be advanced subject to
and in accordance with the provisions of the Agreement and the other Loan
Documents, and that all sums advanced thereunder or hereunder are included
within the Secured Obligations secured hereby.
Section 4.15 Limitation of Trustee's Liability. Trustee shall be protected
in acting upon any notice, request, consent, demand, statement, note or other
paper or document believed by Trustee to be genuine and to have been signed by
the party or parties purporting to sign the
34
same. Trustee shall not be liable for any error of judgment, nor for any act
done or step taken or omitted, nor for any mistakes of law or fact, nor for
anything which Trustee may do or refrain from doing in good faith, nor generally
shall Trustee have any accountability hereunder except for willful misconduct or
gross negligence. Trustee may act hereunder and may sell or otherwise dispose of
the Mortgaged Property or any part thereof as herein provided, although Trustee
has been, may now or may hereafter be, attorneys, officers, agents or employees
of Beneficiary, in respect of any matter of business whatsoever. Beneficiary and
Trustee shall not be liable for any loss to any Chattels in their possession,
provided that they shall use reasonable care with respect thereto; and any such
loss shall not diminish the debt due.
Section 4.16 Substitution of Trustee. Beneficiary shall have, and is hereby
granted with warranty of further assurances, the irrevocable power to remove a
Trustee or successor Trustee and to appoint a substitute Trustee or Trustees
hereunder (including, in case of death or refusal to act of a Trustee or
Trustees or their nonacceptance of, or dissatisfaction with, Trustee, absence or
any other reason), to appoint a new or replacement substitute Trustee or
Trustees, to be exercised at any time without notice and without specifying any
reason therefor, by filing for record in the office where this instrument is
recorded a Deed of Appointment or Notice of Substitution of Trustee. The power
of appointment of a successor Trustee or Trustees may be exercised as often as
and whenever Beneficiary may choose, and the exercise of the power of
appointment, no matter how often, shall not be an exhaustion thereof. Upon the
recordation of such Deed or Deeds of Appointment or Notice or Notices of
Substitution of Trustee, Trustee or Trustees so appointed shall thereupon,
without any further act or deed of conveyance, become fully vested with
identically the same title and estate in and to the Mortgaged Property and with
all the rights, powers, trusts and duties of their, his or its predecessor in
the trust hereunder with like effect as if originally named as Trustee or as one
of Trustees hereunder. Whenever in this Deed of Trust reference is made to
Trustee, it shall be construed to mean Trustee or Trustees for the time being,
whether original or successors or successor in trust; and all title, estate,
rights, powers, trusts and duties hereunder given or appertaining to or
devolving upon Trustee shall be in each of Trustees so that any action hereunder
or purporting to be hereunder of any one of the original or any successor
Trustee shall for purposes be considered to be, and as effective as, the action
of all Trustees.
Section 4.17 Particular State Provisions. There is attached hereto and made
a part hereof Exhibit B containing additional provisions that are necessary or
appropriate under the laws of the state in which the Mortgaged Property is
located or pursuant to the provisions of any permitted property liens.
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ARTICLE V
CERTAIN PROVISIONS CONCERNING THE PRIOR MORTGAGE
Section 5.01 Payment on Prior Deed of Trust. Trustor will promptly pay,
when due and payable, the interest, principal, and all other sums and charges
secured by and described in, the Prior Deed of Trust and the other UBS Loan
Documents.
Section 5.02 Performance of UBS Loan Documents. Trustor will promptly
perform and observe all of the terms, covenants, and conditions required to be
performed and observed by Trustor under the UBS Loan Documents, within the
periods (inclusive of grace periods) provided in the UBS Loan Documents, and
will do all things necessary to avoid the occurrence of any default with respect
to the UBS Loan Documents.
Section 5.03 Default on UBS Loan Documents. Any Event of Default under the
UBS Loan Documents shall be an Event of Default under Article II of this Deed of
Trust.
Section 5.04 No Modifications. Trustor will not directly or indirectly,
amend, modify, supplement, waive compliance with, or assent to noncompliance
with, any term, provision or condition of the UBS Loan Agreement or any of the
other UBS Loan Documents as in effect on December 2, 1997 (A) which the
Beneficiary or the Majority Revolving Lenders deem material (including, without
limitation, terms, provisions or conditions relating to events of default,
acceleration rights or other remedies, tenor, interest rates, substitution of
collateral, the non-recourse nature of such financing, covenants and
prohibitions against amending any of the Loan Documents) or (B) which the
Beneficiary reasonably determines would place any further material restrictions
on the Trustor or its Subsidiaries or materially increase the obligations of the
Trustor or any of its Subsidiaries thereunder or confer on the holders thereof
any material additional rights.
Section 5.05 Consent of Prior Beneficiary. Notwithstanding anything to the
contrary contained in this Deed of Trust, the rights of Beneficiary hereunder
will be limited in that, until all of the obligations secured by the Prior Deed
of Trust have been indefeasibly paid in full, Beneficiary shall not, without
obtaining the prior written consent of the Prior Beneficiary, which consent may
be withheld in Prior Beneficiary's sole and absolute discretion (a) modify,
amend, supplement or extend the terms and provisions of Article V of this Deed
of Trust, or (b) commence an enforcement action or other remedial proceeding, or
(c) exercise any remedies provided for under this Deed of Trust at law or in
equity with respect to the Mortgaged Property (including, without limitation,
the commencement of foreclosure proceedings or the appointment of a receiver),
or (d) seek to enforce any judgment against the Mortgaged Property in a manner
which is prohibited under this Article V, or (e) otherwise use its position as a
junior
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lienor to take any actions with respect to the Mortgaged Property, or to
interfere with or otherwise impede any actions that Prior Beneficiary may wish
to take with respect to the Mortgaged Property; provided, that notwithstanding
the provisions set forth in (a) through (e) above, Beneficiary may make
protective advances contemplated by this Deed of Trust, including without
limitation, for past due real estate taxes, insurance premiums, repair costs and
other amounts which could result in a lien or encumbrance upon the Mortgaged
Property and may join in any enforcement action or other remedial proceeding
that has been commenced by or on behalf of the Prior Beneficiary to assure that
Beneficiary's junior lien is not extinguished, diminished or otherwise adversely
affected; provided further that the Prior Beneficiary consents to Beneficiary
acting in Trustor's stead under this Deed of Trust, subject to all the
conditions and requirements hereunder, and under the UBS Loan Documents, if
Trustor is in default with respect to its obligations to Beneficiary (it being
understood that Beneficiary shall not, by the making of any protective advance,
acquire by subrogation or otherwise any lien, estate or interest in the
Mortgaged Property which may be prior to the lien, estate or interest of the
Prior Beneficiary, but the amount of any such advances shall be secured by the
lien of this Deed of Trust).
Section 5.06 Subject to the UBS Loan Documents. Beneficiary acknowledges
that the terms, conditions, provisions and lien of this Deed of Trust, any
Assignment of Leases and Rents hereafter delivered to Beneficiary with respect
to the Mortgaged Property and any documents hereafter delivered pursuant to
Sections 1.02 and 1.03 of this Deed of Trust and all of Beneficiary's rights
under this Deed of Trust, any Assignment of Leases and Rents hereafter delivered
to Beneficiary with respect to the Mortgaged Property and any documents
hereafter delivered pursuant to Section 1.02 and 1.03 are junior and subject to
the terms, conditions, provisions and lien of the Prior Deed of Trust and the
other UBS Loan Documents and all of Prior Beneficiary's rights thereunder.
Beneficiary further acknowledges that if Trustor's compliance with any of the
terms, covenants, conditions or other provisions of this Deed of Trust would be
inconsistent with or cause a default under the UBS Loan Documents, Trustor shall
not be obligated to comply with such term, covenant or condition or other
provision contained in this Deed of Trust. Notwithstanding the foregoing,
nothing herein shall preclude the operation of any term, covenant, provision, or
condition of, or right of Beneficiary under, this Deed of Trust which is not
inconsistent with, the terms, covenants, provisions and conditions of, and
rights of Prior Beneficiary under the Prior Deed of Trust and the other UBS Loan
Documents, and which would not cause a default under, the UBS Loan Documents.
Section 5.07 Third Party Beneficiary. It is expressly intended and agreed
by the parties to this Deed of Trust that (a) the Prior Beneficiary is a third
party beneficiary of this Deed of Trust and is relying upon the terms and
provisions of this Article V, (b) the Prior Deed of Trust shall be recorded
first, (c) the Prior Beneficiary shall have the right, in addition to all other
remedies, to specifically enforce the provisions of this Article V and shall be
entitled to injunctive and other equitable relief in connection therewith and
(d) Trustor and Beneficiary
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expressly agree that the rights of the parties hereunder are the same as they
would be if the Beneficiary and the Prior Beneficiary had executed a separate
intercreditor agreement.
Section 5.08 Consent to Non-Disturbance Agreement. Trustee and Beneficiary
hereby agree to give a non-disturbance agreement to any lessee or tenant with
respect to which the Prior Beneficiary shall have executed a similar
non-disturbance agreement and, if the Trustee and Beneficiary fail to give any
such non-disturbance agreement, the Trustee and Beneficiary nevertheless agree
not to disturb the possession or occupancy of any lessee or tenant of all or any
portion of the Mortgaged Property without the prior written consent of the Prior
Beneficiary in each instance.
Section 5.09 Release of Mortgaged Property. Subject to the terms and
provisions of Section 6.3(h) of the Agreement, in the event the Prior
Beneficiary releases all or any portion of the Mortgaged Property from the lien
of the Prior Deed of Trust, then Beneficiary hereby irrevocably appoints the
Prior Beneficiary as its attorney-in-fact (coupled with an interest) to execute
and deliver, in the name, and on behalf of Beneficiary, any and all documents
necessary to release the Mortgaged Property (or such portion thereof being
released from the lien of the Prior Deed of Trust) from the lien of this Deed of
Trust. Beneficiary hereby acknowledges that it shall not be entitled to receive
any payment in connection with the release of the Mortgaged Property (or any
portion thereof) from the lien of this Deed of Trust, including, without
limitation, the proceeds of any sale thereof, unless and until the Prior
Beneficiary is fully paid all sums due under the UBS Loan Documents. The Trustor
hereby agrees that it will provide the Beneficiary with written notice as to the
release of all or any portion of the Mortgaged Property from the lien of the
Prior Deed of Trust.
Section 5.10 Bankruptcy, Insolvency, etc. In the event of (a) any
insolvency, dissolution, winding up, liquidation, readjustment, composition,
reorganization or other similar proceedings relating to Trustor (whether
voluntary or involuntary, partial or complete, and whether in bankruptcy,
insolvency or receivership, or upon an assignment for the benefit of creditors,
or any other marshaling of the assets and liabilities of Trustor, or any sale of
all or substantially all of the Mortgaged Property, or otherwise ) or (b) any
receivership or other equivalent proceeding with respect to the Mortgaged
Property, all sums due under the UBS Loan Documents shall first be indefeasibly
paid in full before Beneficiary shall be entitled to retain any payment or
distribution received as proceeds of the Mortgaged Property of any kind or
character, whether in cash, property or securities. Beneficiary hereby
irrevocably authorizes and agrees that the Prior Beneficiary may, in its sole
discretion, in the name of Beneficiary, or otherwise, demand, sue for, collect,
receive and give receipt for any and all payments or distributions of any kind
or character, whether in cash, property or securities, which are proceeds of the
Mortgaged Property to which Beneficiary would be entitled if the Deed of Trust
were not subject to the Prior Deed of Trust pursuant to the terms hereof.
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Upon request, Beneficiary shall furnish to the Prior Beneficiary, as promptly as
practicable, all information in its possession relating to the Mortgaged
Property which the Prior Beneficiary considers reasonably necessary in
connection with any action by the Prior Beneficiary permitted under the
foregoing provisions of this Section 5.10. Beneficiary will not initiate any
proceedings to modify or lift the stay provided for in SECTION 362(a) of Title
11 of the United States Code in respect of the Mortgage or the Mortgaged
Property. Notwithstanding anything to the contrary contained herein, nothing
contained in this Section 5.10 shall preclude Beneficiary from asserting any
claim in any such proceeding with respect to all Secured Obligations secured
hereby as it pertains to any property, cash or securities of Borrower other than
the Mortgaged Property.
Section 5.11 Other Payments. In the event that the Beneficiary receives any
payment or other distribution of any kind or character from the Trustor or from
any other source whatsoever as proceeds of the Mortgaged Property, which it is
not entitled to retain pursuant to this Article V, Beneficiary shall immediately
deliver the same to the Prior Beneficiary, in the form received, together with
any necessary endorsements, in each case for application pursuant to the UBS
Loan Documents, but until so received by the Prior Beneficiary, the same shall
be held in trust by Beneficiary as the property of the Prior Beneficiary.
ARTICLE VI
RESTATEMENT OF POST-PETITION MORTGAGE LIENS
Section 6.01 Post-Petition Mortgage Liens. This Deed of Trust amends and
restates in their entirety the Post-Petition Mortgage Liens; provided that, to
the fullest extent permitted by law, (as) the priority of all liens, security
interests and other encumbrances evidenced hereby or arising hereunder shall
relate back to the date and time the Post-Petition Mortgage Liens were granted;
(b) nothing herein shall impair the creation, attachment, perfection or priority
of the Post-Petition Mortgage Liens; and (c) nothing herein shall constitute a
novation or discharge of the obligations secured by the Post-Petition Mortgage
Liens.
IN WITNESS WHEREOF, this Deed of Trust has been duly executed by Trustor
and Beneficiary as of the day and year first above written.
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TRUSTOR:
PAYLESS CASHWAYS, INC.
By:
--------------------------------
Name:
Title:
BENEFICIARY:
CANADIAN IMPERIAL BANK OF COMMERCE,
as Coordinating and Collateral Agent
By:
--------------------------------
Name:
Title:
CONSENTED AND AGREED TO:
[UBS MORTGAGE FINANCE, INC.]
By:
-------------------------------
Name:
Title:
[NOTARY BLOCK -- PAYLESS]
[NOTARY BLOCK -- CIBC]
[NOTARY BLOCK - PRIOR MORTGAGEE]
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EXHIBIT A
(DESCRIPTION OF LAND)
41
EXHIBIT B
(LOCAL LAW PROVISIONS)