EXHIBIT 10.2
[___________________________________]
(Grantor)
to
(Trustee)
for the benefit of
NOMURA ASSET CAPITAL CORPORATION
(Beneficiary)
_______________________________________________
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT
_______________________________________________
Dated: As of June __, 1998
Property Location:
______________________________
______________________________
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
TABLE OF CONTENTS
Page
GENERAL PROVISIONS. . . . . . . . . . . . . . 4
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS
AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . . 4
3. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. PAYMENT OF TAXES, ETC. . . . . . . . . . . . . . . . . . . . . . . 4
5. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. ASSIGNMENT OF LEASES AND RENTS . . . . . . . . . . . . . . . . . . 4
7. MAINTENANCE OF PROPERTY. . . . . . . . . . . . . . . . . . . . . . 5
8. TRANSFER OR ENCUMBRANCE OF THE PROPERTY. . . . . . . . . . . . . . 6
9. CHANGES IN LAWS REGARDING TAXATION . . . . . . . . . . . . . . . . 7
10. NO CREDITS ON ACCOUNT OF THE DEBT. . . . . . . . . . . . . . . . . 7
11. DOCUMENTARY STAMPS . . . . . . . . . . . . . . . . . . . . . . . . 7
12. CONTROLLING AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 7
13. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . . 8
14. FURTHER ACTS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . 8
15. RECORDING OF DEED OF TRUST, ETC. . . . . . . . . . . . . . . . . . 8
16. REPORTING REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . 8
17. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . 8
18. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . . 9
19. RIGHT TO CURE DEFAULTS . . . . . . . . . . . . . . . . . . . . . . 10
20. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
21. RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . . . . . . . . . 13
22. SECURITY AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . 13
23. ACTIONS AND PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . 14
24. WAIVER OF SETOFF AND COUNTERCLAIM. . . . . . . . . . . . . . . . . 14
25. RECOVERY OF SUMS REQUIRED TO BE PAID . . . . . . . . . . . . . . . 14
26. MARSHALLING AND OTHER MATTERS. . . . . . . . . . . . . . . . . . . 14
27. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . . 15
28. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . . 15
29. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . . 15
30. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . . 15
31. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 15
32. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
33. AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
34. WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . 19
35. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . . . . . 19
36. SOLE DISCRETION OF BENEFICIARY AND TRUSTEE . . . . . . . . . . . . 19
37. NON-WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
38. NO ORAL CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . 20
39. LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
40. INAPPLICABLE PROVISIONS. . . . . . . . . . . . . . . . . . . . . . 20
41. HEADINGS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
42. DUPLICATE ORIGINALS. . . . . . . . . . . . . . . . . . . . . . . . 20
43. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
44. HOMESTEAD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
45. ASSIGNMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
46. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . 21
47. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
48. DEFEASANCE; RELEASE OF THIS DEED OF TRUST. . . . . . . . . . . . . 21
49. NO ELECTION OF REMEDIES. . . . . . . . . . . . . . . . . . . . . . 21
50. EXCULPATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
51. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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52. TRUSTEE; SUCCESSOR TRUSTEE . . . . . . . . . . . . . . . . . . . . 23
53. STATE SPECIFIC RIDER . . . . . . . . . . . . . . . . . . . . . . . 23
EXHIBIT A
EXHIBIT B
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THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (the "DEED OF TRUST"), made as of June __, 1998, by
[________________________________] a _______________________________________,
having an address c/o Horizon Group Properties, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("GRANTOR"), to ____________ ________________, having an
address at _______________, as trustee ("Trustee"), in trust for the benefit of
Nomura Asset Capital Corporation, a Delaware corporation (together with its
successors and assigns, shall hereafter be referred to as "BENEFICIARY"), having
its principal place of business at Two World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS:
A. Grantor is the owner of a fee simple title to that certain
parcel of real property (the "PREMISES") described in EXHIBIT A attached
hereto, and the buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and other improvements now
or hereafter located thereon (the "IMPROVEMENTS");
B. Beneficiary, Grantor and certain other entities affiliated with
Grantor (such affiliated entities and Grantor each being referred to
individually as a "BORROWER" and collectively as the "BORROWERS") have entered
into a certain Loan Agreement dated as of the date hereof (as amended, modified,
restated, consolidated or supplemented from time to time, the "LOAN AGREEMENT")
pursuant to which Beneficiary has agreed to make a secured mortgage loan to the
Borrowers. Capitalized terms used herein and not herein defined shall have the
meanings assigned to such terms in the Loan Agreement.
C. Pursuant to the Loan Agreement, Beneficiary is making a loan to
Borrowers in the aggregate original principal amount of
_____________________________________ (_______________) (the "LOAN") and
Borrowers have executed the Note in the principal amount of __________________
(as the same may be amended, modified, restated, severed, consolidated, renewed,
replaced, or supplemented from time to time, the "NOTE"). The Note is secured
by, INTER ALIA, this Deed of Trust and the other Loan Documents (as hereinafter
defined).
D. To induce Beneficiary to make the Loan and to secure payment of
the Note, together with interest thereon, Grantor has agreed to the execution
and delivery of this Deed of Trust.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and other good and valuable consideration, the receipt and legal
sufficiency whereof are hereby acknowledged, and as an inducement to Beneficiary
to enter into the Loan Agreement, and to secure the payment of all sums which
may or shall become due hereunder or under the Note or any of the other
documents executed and delivered by a Borrower or an Affiliate of a Borrower
evidencing or securing the Loan (such other documents, including, without
limitation, the Loan Agreement; that certain Assignment of Leases and Rents of
even date herewith given by Grantor to Beneficiary with respect to the Premises
(as such assignment may be amended from time to time, the "ASSIGNMENT OF
LEASES"); that certain Assignment of Agreements, Licenses, Permits and Contracts
of even date herewith given by Grantor to Beneficiary with respect to the
Premises (as such assignment may be amended from time to time, the "ASSIGNMENT
OF AGREEMENTS"); and this Deed of Trust (as any of the same may, from time to
time, be modified, amended or supplemented) being hereinafter collectively
referred to as the "LOAN DOCUMENTS"), and including (i) the payment of interest
and other amounts which would accrue and become due but for the filing of a
petition in bankruptcy (whether or not a claim is allowed against Grantor for
such interest or other amounts in any such bankruptcy proceeding) or the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a) and (ii) the costs and expenses of enforcing any provision
of the Note, this Deed of Trust or any of the other Loan Documents (all such
sums being hereinafter collectively referred to as the "DEBT"), and in order to
charge with such performance and with such payments the Premises and the
Improvements and other property hereinafter described and the rents, revenues,
issues, income and profits thereof, Grantor has given, granted, bargained, sold,
alienated, enfeoffed, conveyed, confirmed, warranted, pledged, assigned, and
hypothecated and by these presents does hereby irrevocably, give, alien,
enfeoff, confirm, warrant,
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pledge, assign, hypothecate, GRANT, BARGAIN, SELL AND CONVEY UNTO TRUSTEE, IN
TRUST, with power of sale, for the benefit of Beneficiary, the Premises and
Improvements.
TOGETHER WITH: all right, title, interest and estate of Grantor now
owned, or hereafter acquired, in and to the following property, rights,
interests and estates (the Premises, the Improvements, and the property, rights,
interests and estates hereinafter described are collectively referred to herein
as the "PROPERTY"):
(a) all easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, all rights to oil, gas, minerals,
coal and other substances of any kind or character, and all estates, rights,
titles, interests, privileges, liberties, tenements, hereditaments and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to the Premises and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in the bed of any
street, road, highway, alley or avenue, opened, vacated or proposed, in front of
or adjoining the Premises, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Grantor of, in and to the Premises and the Improvements and every
part and parcel thereof, with the appurtenances thereto;
(b) all machinery, furniture, furnishings, equipment, computer
software and hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures),
inventory and articles of personal property and accessions thereof and renewals,
replacements thereof and substitutions therefor, if any, and other property of
every kind and nature, whether tangible or intangible, whatsoever owned by
Grantor, or in which Grantor has or shall have an interest, now or hereafter
located upon the Premises and the Improvements, or appurtenant thereto, and
usable in connection with the present or future operation and occupancy of the
Premises and the Improvements and all building equipment, materials and supplies
of any nature whatsoever owned by Grantor, or in which Grantor has or shall have
an interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant thereto, or used in connection with the present or future operation,
enjoyment and occupancy of the Premises and the Improvements (hereinafter
collectively referred to as the "EQUIPMENT"), including any leases of any of the
foregoing, any deposits existing at any time in connection with any of the
foregoing, and the proceeds of any sale or transfer of the foregoing, and the
right, title and interest of Grantor in and to any of the Equipment that may be
subject to any "security interests" as defined in the Uniform Commercial Code,
as adopted and enacted by the State where the Property is located (the "UNIFORM
COMMERCIAL CODE"), superior in lien to the lien of this Deed of Trust;
(c) all awards or payments, including interest thereon, that may
heretofore and hereafter be made with respect to the Premises and the
Improvements, whether from the exercise of the right of eminent domain or
condemnation (including, without limitation, any transfer made in lieu of or in
anticipation of the exercise of said rights), or for a change of grade, or for
any other injury to or decrease in the value of the Premises and Improvements;
(d) all leases and other agreements or arrangements heretofore or
hereafter entered into pursuant to which any person is granted a possessory
interest in, or right to use or occupy all or any portion of any space in the
Premises and the Improvements, including any extensions, renewals, modifications
or amendments thereof (hereinafter collectively referred to as the "LEASES") and
all rents, rent equivalents, moneys payable as damages or in lieu of rent or
rent equivalents, royalties (including, without limitation, all oil and gas or
other mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Grantor or its agents or employees from any and all
sources arising from or attributable to the Premises and the Improvements,
including, without limitation, all receivables, customer obligations,
installment payment obligations and other obligations now existing or hereafter
arising or created out of the sale, lease, sublease, license, concession or
other grant of the right of the use and occupancy of property and proceeds, if
any, from business interruption or other loss of income insurance (hereinafter
collectively referred to as the "RENTS"), together with all
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proceeds from the sale or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the Debt;
(e) all proceeds (other than those payable to Grantor under any
liability insurance policy of Grantor) of and any unearned premiums on any
insurance policies covering the Property, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property;
(f) the right, in the name and on behalf of Grantor, to appear in and
defend any action or proceeding brought with respect to the Property and to
commence any action or proceeding to protect the interest of Beneficiary in the
Property;
(g) all accounts (including, without limitation, reserve accounts,
escrows, documents, instruments, chattel paper, claims, deposits and general
intangibles, as the foregoing terms are defined in the Uniform Commercial Code,
and all franchises, trade names, trademarks, symbols, service marks, books,
records, plans, specifications, designs, drawings, surveys, title insurance
policies, permits, consents, licenses, management agreements, contract rights
(including, without limitation, any contract with any architect or engineer or
with any other provider of goods or services for or in connection with any
construction, repair, or other work upon the Property), approvals, actions,
refunds of real estate taxes and assessments (and any other governmental
impositions related to the Property), and causes of action that now or hereafter
relate to, are derived from or are used in connection with the Property, or the
use, operation, maintenance, occupancy or enjoyment thereof or the conduct of
any business or activities thereon (hereinafter collectively referred to as the
"INTANGIBLES"); and
(h) all proceeds, products, offspring, rents and profits from any of
the foregoing, including, without limitation, those from sale, exchange,
transfer, collection, loss, damage, disposition, substitution or replacement of
any of the foregoing.
Without limiting the generality of any of the foregoing, in the event
that a proceeding under Title 11 of the United States Code (the "BANKRUPTCY
CODE") is commenced by or against Grantor, pursuant to Section 552(b)(2) of the
Bankruptcy Code, the security interest granted by this Deed of Trust shall
automatically extend to all Rents acquired by the Grantor after the commencement
of the case and shall constitute cash collateral under Section 363(a) of the
Bankruptcy Code.
TO HAVE AND TO HOLD the above granted and described Property unto and
to the use and benefit of Trustee and its successors and assigns, forever.
IN TRUST NEVERTHELESS to secure Beneficiary (i) the repayment of the
Debt; and (ii) any and all extensions, modifications and renewals of the Note,
or any part thereof, however changed in form, manner or amount.
PROVIDED, HOWEVER, these presents are upon the express condition that,
if the Borrowers shall well and truly pay to Beneficiary or defease the Debt at
the time and in the manner provided in the Note, the Loan Agreement and the
other Loan Documents and shall well and truly abide by and comply with each and
every covenant and condition set forth herein, in the Note, the Loan Agreement
and in the other Loan Documents in all material respects in a timely manner,
these presents and the estate hereby granted shall cease, terminate and be void;
AND Grantor represents and warrants to and covenants and agrees with
Trustee and Beneficiary as follows:
GENERAL PROVISIONS
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS AND
AGREEMENTS. Grantor shall pay the Debt at the time and in the manner provided
in the Note, the Loan
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Agreement and this Deed of Trust. All the covenants, conditions and
agreements contained in the Note, the Loan Agreement, or the other Loan
Documents are hereby made a part of this Deed of Trust to the same extent and
with the same force as if fully set forth herein.
2. INTENTIONALLY OMITTED.
3. INSURANCE. (a) Grantor, at its sole cost and expense, for the
mutual benefit of Grantor and Beneficiary, shall keep the Property insured and
obtain and maintain during the entire term of this Deed of Trust policies of
insurance against loss or damage by fire and lightning and against loss or
damage by all other risks and hazards as required and in accordance with the
terms and provisions of Section 7.1 of the Loan Agreement.
(b) If the Property shall be damaged or destroyed, in whole or
in part, by fire or other casualty (a "CASUALTY"), Grantor shall give prompt
notice thereof to Beneficiary. All amounts to be paid in connection with a
Casualty under such policies shall be governed by the terms and provisions of
the Loan Agreement.
4. PAYMENT OF TAXES, ETC. Grantor shall pay all real estate and
personal property taxes, assessments, fees or payments in lieu of real estate
taxes, water rates and sewer rents, now or hereafter levied or assessed or
imposed against the Property or any part thereof (the "TAXES") and all ground
rents, maintenance charges, impositions other than taxes, and other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Premises, now or hereafter levied
or assessed or imposed against the Property or any part thereof (the "OTHER
CHARGES") as the same become due and payable, in each case subject to Grantor's
right to contest the amount or validity or application in whole or in part any
taxes or other charges in accordance with Section 5.1(b) of the Loan Agreement.
5. CONDEMNATION. Grantor shall promptly give Beneficiary written
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding with respect to the Property (a "CONDEMNATION") and shall
deliver to Beneficiary copies of any and all papers served in connection with
such Condemnation. All amounts to be paid in connection with a Condemnation
shall be governed by the terms and provisions of the Loan Agreement.
6. ASSIGNMENT OF LEASES AND RENTS. Grantor does hereby absolutely
and unconditionally assign to Beneficiary, all of Grantor's right, title and
interest in all current and future Leases and Rents, it being intended by
Grantor that this assignment constitutes a present, absolute assignment and not
an assignment for additional security only. Such assignment to Beneficiary
shall not be construed to bind Beneficiary to the performance of any of the
covenants, conditions or provisions contained in any such Lease or otherwise
impose any obligation upon Beneficiary. Grantor agrees to execute and deliver
to Beneficiary such additional instruments, in form and substance satisfactory
to Beneficiary, as may hereafter be requested by Beneficiary to further evidence
and confirm such assignment. Nevertheless, subject to the terms of this
paragraph, Beneficiary grants to Grantor a revocable license to operate and
manage the Property and to collect the Rents. Grantor shall cause all Rents to
be deposited into the Collection Account in accordance with the terms of the
Loan Agreement. Upon the occurrence and continuance of an Event of Default (as
hereinafter defined), without the need for notice or demand, the license granted
to Grantor herein shall automatically be revoked, and Beneficiary shall
immediately be entitled to possession of all Rents, whether or not Beneficiary
enters upon or takes control of the Property. Beneficiary is hereby granted and
assigned by Grantor the right, at its option, upon revocation of the license
granted herein, to enter upon the Property in person, by agent or by
court-appointed receiver to collect the Rents. Any Rents collected after the
revocation of the license shall be applied in accordance with Section 2.6 of the
Loan Agreement.
7. MAINTENANCE OF PROPERTY. (a) Grantor shall not (i) desert or
abandon the Property, (ii) change the use of the Property or cause or permit the
use or occupancy of any part of the Property to be discontinued if such
discontinuance or use change would violate any zoning or other law, ordinance or
regulation; (iii) consent to or seek any lowering of the zoning classification,
or greater zoning restriction affecting the Property; or (iv) take any steps
whatsoever to convert the Property, or any
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portion thereof, to a condominium or cooperative form of ownership.
(b) Grantor shall, at its expense, (i) take good care of the
Property including grounds generally, and utility systems and sidewalks, roads,
alleys, and curbs therein, and shall keep the same in good, safe and insurable
condition and in compliance with all applicable Legal Requirements, (ii)
promptly make all repairs to the Property, above grade and below grade, interior
and exterior, structural and nonstructural, ordinary and extraordinary,
unforeseen and foreseen, and maintain the Property in a manner appropriate for
the facility and (iii) not commit or suffer to be committed any waste of the
Property or do or suffer to be done anything which will materially increase the
risk of fire or other hazard to the Property or materially impair the value
thereof. Grantor shall keep the sidewalks, vaults, gutters and curbs
comprising, or adjacent to, the Property, clean and free from dirt, snow, ice,
rubbish and obstructions. All repairs made by Grantor shall be made with
first-class materials, in a good and workmanlike manner, shall be equal or
better in quality and class to the original work and shall comply with all
applicable Legal Requirements and insurance requirements. To the extent any of
the above obligations are obligations of tenants under Leases or other Persons
under Property Agreements, Grantor may fulfill its obligations hereunder by
causing such tenants or other Persons, as the case may be, to perform their
obligations thereunder. As used herein, the terms "repair" and "repairs" shall
be deemed to include all necessary replacements.
(c) Grantor shall not demolish, remove, construct, or, except as
otherwise expressly provided herein, restore, or alter the Property or any
portion thereof nor consent to or permit any such demolition, removal,
construction, restoration, addition or alteration (each a "RENOVATION") which
would, for a period in excess of one year and in Grantor's best judgment at the
time of such demolition, removal, construction, restoration or alteration,
diminish the value of the Property or materially diminish the Total GLA without
Beneficiary's prior written consent in each instance, which consent shall not be
unreasonably withheld or delayed, provided, however, that for any Renovation
which would temporarily diminish the value of the Property or temporarily would
materially diminish the Total GLA, Grantor shall be permitted to perform same
provided (a) no Event of Default has occurred and is continuing at the time of
the proposed Renovation, (b) Grantor shall have entered into one or more Leases
with respect to the leasing of all or a portion of the space demised under the
Leases which were terminated in connection with the Renovation (the "AFFECTED
LEASES") which are in form and substance substantially similar to the Affected
Leases and which provide for rental and other payments thereunder, net of any
rebates, credits and other concessions granted by Grantor thereunder, equal to
not less than eighty-five percent (85%) of the Rent due under the Affected
Leases and Grantor shall have delivered a copy of such lease or leases to
Beneficiary, (c) Grantor shall have delivered to Beneficiary cash collateral or
an unconditional, irrevocable, clean sight draft letter of credit in form and
substance, and issued by a bank, acceptable to Beneficiary, in an amount equal
to the Rent that would have been payable pursuant to the Affected Leases during
(I) the anticipated term of the Renovation, as reasonably determined by
Beneficiary, plus (II) an additional six (6) month period (which cash collateral
or letter of credit are hereinafter referred to as the "RENOVATION FUNDS") and
(d) all Renovations shall be performed in compliance with Legal Requirements.
Grantor hereby grants to Beneficiary a security interest in all of Grantor's
right, title and interest in the Renovation Funds and irrevocably authorizes
Beneficiary, following an Event of Default, to apply any or all of the
Renovation Funds to cure any Event of Default or, following the acceleration of
the Debt in accordance with Article VIII hereof, toward the payment of the Debt,
as Beneficiary shall, in its sole discretion, determine, but without obligation
to do so. Following (X) delivery to Beneficiary of copies of any and all final
certificates of occupancy or other certificates, licenses and permits required
for the ownership, occupancy and operation of the Property as so renovated and
(Z) commencement of the payment of Rent payable under the lease or leases which
replaced the Affected Leases without rebate, credit or other concession granted
by Grantor thereunder, Beneficiary shall return the balance of the Renovation
Funds not applied in accordance with the immediately preceding sentence, if any,
to Grantor.
(d) Grantor represents and warrants to Beneficiary that (i)
there are no fixtures, machinery, apparatus, tools, equipment or articles of
personal property attached or appurtenant to, or located on, or used in
connection with the management, operation or maintenance of the Property, except
for the Equipment and equipment leased by Grantor for the management, operation
or maintenance of the Property in accordance with the Loan Documents; (ii) the
Equipment and the leased equipment constitutes all of the fixtures, machinery,
apparatus, tools, equipment and articles of personal property
5
necessary to the proper operation and maintenance of the Property; and (iii)
all of the Equipment is free and clear of all liens, except for the lien of
this Deed of Trust and the Permitted Encumbrances. All rights, title and
interest of Grantor in and to all extensions, improvements, betterment,
renewals, appurtenances to, the Property hereafter acquired by, or released
to, Grantor or constructed, assembled or placed by Grantor in the Property,
and all changes and substitutions of the security constituted thereby, shall
be and, in each such case, without any further mortgage, conveyance,
assignment or other act by Beneficiary or Grantor, shall become subject to
the lien and security interest of this Deed of Trust as fully and completely,
and with the same effect, as though now owned by Grantor and specifically
described in this Deed of Trust, but at any and all times Grantor shall
execute and deliver to Beneficiary any documents Beneficiary may reasonably
deem necessary or appropriate for the purpose of specifically subjecting the
same to the lien and security interest of this Deed of Trust.
(e) Notwithstanding the provisions of this Deed of Trust to the
contrary, Grantor shall have the right, at any time and from time to time, to
remove and dispose of Equipment which may have become obsolete or unfit for use
or which is no longer useful in the management, operation or maintenance of the
Property. Grantor shall promptly replace any such Equipment so disposed of or
removed with other Equipment of equal value and utility, free of any security
interest or superior title, liens or claims; except that, if by reason of
technological or other developments, replacement of the Equipment so removed or
disposed of is not necessary or desirable for the proper management, operation
or maintenance of the Property, Grantor shall not be required to replace the
same. All such replacements or additional equipment shall ne deemed to
constitute "Equipment" and shall be covered by the security interest herein
granted.
8. TRANSFER OR ENCUMBRANCE OF THE PROPERTY. (a) Except as
permitted under the terms and provisions of the Loan Agreement, Grantor shall
not, without the prior written consent of Beneficiary, sell, convey, alienate,
mortgage, encumber, pledge or otherwise transfer the Property or any part
thereof, or permit the Property or any part thereof to be sold, conveyed,
alienated, mortgaged, encumbered, pledged or otherwise transferred other than in
connection with a release of the Property pursuant to Section 2.4 of the Loan
Agreement.
(b) Beneficiary shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Grantor's sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Property without
Beneficiary's consent in instances where Beneficiary's consent is required.
This provision shall apply to every such sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Property regardless of whether voluntary
or not, or whether or not Beneficiary has consented to any previous sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property.
(c) Beneficiary's consent to one sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Property shall not be deemed to
be a waiver of Beneficiary's right to require such consent to any future
occurrence of same. Any sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Property made in contravention of this paragraph shall
be null and void and of no force and effect.
(d) Grantor agrees to bear and shall pay or reimburse
Beneficiary promptly following demand for all reasonable expenses (including,
without limitation, reasonable attorneys' fees and disbursements, title search
costs and title insurance endorsement premiums) incurred by Beneficiary in
connection with the review, approval and documentation of any such sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer which requires
Beneficiary's consent under the Loan Documents.
9. CHANGES IN LAWS REGARDING TAXATION. If any law is enacted or
adopted or amended after the date of this Deed of Trust which deducts the
Debt from the value of the Property for the purpose of taxation or which
imposes a tax, either directly or indirectly, on the Debt or Beneficiary's
interest in the Property, Grantor will pay such tax, with interest and
penalties thereon, if any. In the event Beneficiary is advised by counsel
chosen by it that the payment of such tax or interest and penalties
6
by Grantor would be unlawful or taxable to Beneficiary or unenforceable or
provide the basis for a defense of usury, then in any such event, Beneficiary
shall have the option, by written notice of not less than ninety (90) days,
to declare the Debt immediately due and payable.
10. NO CREDITS ON ACCOUNT OF THE DEBT. Grantor will not claim or
demand or be entitled to any credit or credits against the outstanding balance
of the Debt on account of Taxes or Other Charges assessed against the Property,
or any part thereof, and no deduction shall otherwise be made or claimed from
the assessed value of the Property, or any part thereof, by Grantor for real
estate tax purposes by reason of this Deed of Trust or the Debt. In the event
such claim, credit or deduction shall be required by law, Beneficiary shall have
the option, by written notice of not less than ninety (90) days, to declare the
Debt immediately due and payable.
11. DOCUMENTARY STAMPS. If at any time the United States of America,
any State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Deed of Trust, or impose any
other tax or charge on the same, Grantor will pay for the same, with interest
and penalties thereon, if any.
12. CONTROLLING AGREEMENT. It is expressly stipulated and agreed to
be the intent of Grantor and Beneficiary at all times to comply with applicable
state law or applicable United States federal law (to the extent that it permits
Beneficiary to contract for, charge, take, reserve, or receive a greater amount
of interest than under state law) and that this PARAGRAPH 12 shall control every
other covenant and agreement in this Deed of Trust and the other Loan Documents.
If the applicable law (state or federal) is ever judicially interpreted so as to
render usurious any amount called for under the Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved, or received with
respect to the Debt, or if Beneficiary's exercise of the option to accelerate
the maturity of the Note, or if any prepayment by Grantor results in Grantor
having paid any interest in excess of that permitted by applicable law, then it
is Grantor's and Beneficiary's express intent that all excess amounts
theretofore collected by Beneficiary shall be credited on the principal balance
of the Note and all other Debt (or, if the Note and all other Debt have been or
would thereby be paid in full, refunded to Grantor), and the provisions of the
Note, this Deed of Trust and the other Loan Documents immediately be deemed
reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new documents, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder or thereunder. All sums paid or agreed to
be paid to Beneficiary for the use, forbearance, or detention of the Debt shall,
to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full stated term of the Debt until payment in full so
that the rate or amount of interest on account of the Debt does not exceed the
maximum lawful rate from time to time in effect and applicable to the Debt for
so long as the Debt is outstanding. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, it is not the intention
of Beneficiary to accelerate the maturity of any interest that has not accrued
at the time of such acceleration or to collect unearned interest at the time of
such acceleration.
13. INTENTIONALLY OMITTED.
14. FURTHER ACTS, ETC. Upon foreclosure, the appointment of a
receiver or any other relevant action, Grantor will, at the cost of Grantor and
without expense to Beneficiary, cooperate fully and completely to effect the
assignment or transfer of any license, permit, agreement or any other right
necessary or useful to the operation of the Property. Grantor grants to
Beneficiary an irrevocable power of attorney coupled with an interest for the
purpose of exercising and perfecting any and all rights and remedies available
to Beneficiary at law and in equity, including, without limitation, such rights
and remedies available to Beneficiary pursuant to this paragraph.
15. RECORDING OF DEED OF TRUST, ETC. Grantor forthwith upon the
execution and delivery of this Deed of Trust and thereafter, from time to time,
will cause this Deed of Trust, and any security instrument creating a lien or
security interest or evidencing the lien hereof upon the Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Beneficiary in, the Property. Grantor will pay
all
7
filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Deed of Trust, any mortgage
supplemental hereto, any security instrument with respect to the Property and
any instrument of further assurance, and all federal, state, county and
municipal, taxes, duties, imposts, assessments and charges arising out of or
in connection with the execution and delivery of this Deed of Trust, any
mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, except where prohibited by
law so to do. Grantor shall hold harmless and indemnify Beneficiary, its
successors and assigns, against any liability incurred by reason of the
imposition of any tax on the making and recording of this Deed of Trust.
16. REPORTING REQUIREMENTS. Grantor agrees to give prompt notice to
Beneficiary of the insolvency or bankruptcy filing of Grantor.
17. EVENTS OF DEFAULT. Each of the following events shall constitute
an event of default hereunder (each an "EVENT OF DEFAULT"):
(a) if any portion of the Debt is not paid when due;
(b) if any of the Taxes or Other Charges are not paid prior to
delinquency, subject to Grantor's right to contest same in accordance with
Section 5.1(b) of the Loan Agreement;
(c) if the Policies are not kept in full force and effect;
(d) if, without Beneficiary's prior written consent, except as
permitted under the terms and provisions of the Loan Agreement, (A) Grantor
transfers or encumbers any portion of the Property or (B) any direct or indirect
interest in Grantor is transferred or assigned except as expressly permitted
under Section 6.1(j) of the Loan Agreement;
(e) if any representation or warranty of Grantor made herein or
in any other Loan Document or in any certificate, report, financial statement or
other instrument, agreement or document furnished by Grantor to Beneficiary in
connection with this Deed of Trust or any other Loan Document shall have been
false or misleading in any material respect as of the date the representation or
warranty was made;
(f) if Grantor shall make an assignment for the benefit of
creditors, or if Grantor shall generally not be paying its debts as they become
due;
(g) if a receiver, liquidator or trustee of Grantor shall be
appointed or if Grantor shall be adjudicated a bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Grantor or if any proceeding for the
dissolution or liquidation of Grantor shall be instituted; provided, however, if
such appointment, adjudication, petition or proceeding was involuntary and not
consented to by Grantor, upon the same not being discharged, stayed or dismissed
within sixty (60) days;
(h) if Grantor shall be in default beyond any notice or grace
period, if any, under any other mortgage or security agreement covering any part
of the Property whether it be superior or junior in lien to this Deed of Trust;
(i) if the Property becomes subject to any mechanic's,
materialman's or other lien and such lien is not discharged (by payment,
bonding, or otherwise) for ten (10) days, except a lien for real estate taxes
and assessments not then due and payable and liens contested in accordance with
the Loan Agreement;
(j) except as permitted in this Deed of Trust, if Grantor
performs or permits the performance of any material demolition or removal of any
of the Improvements without the
8
prior consent of Beneficiary;
(k) if any Borrower shall default under any term, covenant, or
provision of the Note, the Loan Agreement, or any of the other Loan Documents,
and such default shall continue beyond any applicable cure periods contained in
such documents;
(l) if Grantor fails to cure a default under any other term,
covenant or provision of this Deed of Trust within ten (10) days after notice to
Grantor, in the case of any default which can be cured by the payment of a sum
of money, or for thirty (30) days after notice in the case of any other default;
PROVIDED, HOWEVER, that if such non-monetary default is susceptible of cure but
cannot reasonably be cured within such 30-day period and provided further that
Grantor shall have commenced to cure such Default within such 30-day period and
thereafter diligently and expeditiously proceed to cure the same, such 30-day
period shall be extended for an additional period of time as is reasonably
necessary for Grantor in the exercise of due diligence to cure such default,
such additional period not to exceed ninety (90) days;
(m) if an Event of Default as defined or described in any of the
other Loan Documents occurs, whether as to a Borrower or a Property.
18. INTENTIONALLY OMITTED.
19. RIGHT TO CURE DEFAULTS. Upon the occurrence and during the
continuance of any Event of Default, Beneficiary may, but without any obligation
to do so and without notice to or demand on Grantor and without releasing
Grantor from any obligation hereunder, make or do the same in such manner and to
such extent as Beneficiary may deem necessary to protect the security hereof.
Beneficiary is authorized to enter upon the Property for such purposes or appear
in, defend, or bring any action or proceeding to protect its interest in the
Property or to foreclose this Deed of Trust or collect the Debt, and the cost
and expense thereof (including reasonable attorneys' fees and disbursements to
the extent permitted by law), with interest thereon at the Default Rate for the
period after notice from Beneficiary that such cost or expense was incurred to
the date of payment to Beneficiary, shall constitute a portion of the Debt,
shall be secured by this Deed of Trust and the other Loan Documents and shall be
due and payable to Beneficiary upon demand.
20. REMEDIES. (a) Upon the occurrence of any Event of Default,
Beneficiary or Trustee, as the case may be, may take such action, without notice
or demand, as Beneficiary deems advisable to protect and enforce Beneficiary's
rights against Grantor and in and to the Property by Beneficiary or Trustee, as
the case may be, including, without limitation, the following actions, each of
which may be pursued concurrently or otherwise, at such time and in such order
as Beneficiary may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Beneficiary:
(i) declare the entire Debt to be immediately due and
payable;
(ii) institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the
complete foreclosure of this Deed of Trust in which
case the Property or any interest therein may be sold
for cash or upon credit in one or more parcels or in
several interests or portions and in any order or
manner;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law,
institute proceedings for the partial foreclosure of
this Deed of Trust for the portion of the Debt then due
and payable, subject to the continuing lien of this
Deed of Trust for the balance of the Debt not then due;
(iv) execute a written notice of such Event of Default and
of the election to cause the Property to be sold to
satisfy the Debt. Trustee shall give
9
and record such notice as the law then requires
as a condition precedent to a trustee's sale.
When the minimum period of time required by
law after such notice has elapsed, Trustee,
without notice to or demand upon Grantor except
as required by law, shall sell the Property at
the time and place of sale fixed by it in the notice of
sale, at one or several sales, either as a whole or in
separate parcels and in such manner and order, all as
Beneficiary in its sole discretion may determine, at
public auction to the highest bidder for cash, in
lawful money of the United States, payable at time of
sale. Neither Grantor nor any other person or entity
other than Beneficiary shall have the right to direct
the order in which the Property is sold. Subject to
requirements and limits imposed by law, Trustee may,
from time to time postpone sale of all or any portion
of the Property by public announcement at such time and
place of sale, and from time to time may postpone the
sale by public announcement at the time and place fixed
by the preceding postponement. The power of sale under
this Deed of Trust shall not be exhausted by any one or
more sales (or attempts to sell) as to all or any
portion of the Property remaining unsold, but shall
continue unimpaired until all of the Property has been
sold by exercise of the power of sale in this Deed of
Trust and all of the Debt has been paid and discharged
in full. Trustee shall deliver to the purchaser at
such sale a deed conveying the Property or portion
thereof so sold, but without any covenant or warranty,
express or implied. The recitals in the deed of any
matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including Trustee,
Grantor or Beneficiary may purchase at the sale;
(v) institute an action, suit or proceeding in equity for
the specific performance of any covenant, condition or
agreement contained herein, or in any of the other Loan
Documents;
(vi) to the extent permitted by applicable law, recover
judgment on the Note either before, during or after any
proceedings for the enforcement of this Deed of Trust;
(vii) apply for the appointment of a trustee, receiver,
liquidator or conservator of the Property, without
notice and without regard for the adequacy of the
security for the Debt and without regard for the
solvency of the Grantor or of any person, firm or other
entity liable for the payment of the Debt;
(viii) enforce Beneficiary's interest in the Leases and Rents
and enter into or upon the Property, either personally
or by its agents, nominees or attorneys and dispossess
Grantor and its agents and servants therefrom, and
thereupon Beneficiary may (A) use, operate, manage,
control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property
and conduct the business thereat; (B) complete any
construction on the Property in such manner and form as
Beneficiary deems advisable; (C) make alterations,
additions, renewals, replacements and improvements to
or on the Property; (D) exercise all rights and powers
of Grantor with respect to the Property, whether in the
name of Grantor or otherwise, including, without
limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand,
▇▇▇ for, collect and receive all Rents; and (E) apply
the receipts from the Property to the payment of the
Debt, after deducting therefrom all expenses (including
reasonable attorneys' fees and disbursements) incurred
in connection with the aforesaid operations and all
amounts necessary to pay the Taxes,
10
insurance and other charges in connection with
the Property, as well as just and reasonable
compensation for the services of Beneficiary,
its counsel, agents and employees;
(ix) require Grantor to vacate and surrender possession to
Beneficiary of the Property or to such receiver and, in
default thereof, evict Grantor by summary proceedings
or otherwise or require Grantor to pay monthly in
advance to Beneficiary, or any receiver appointed to
collect the Rents, the fair and reasonable rental value
for the use and occupation of any portion of the
Property occupied by Grantor; or
(x) pursue such other rights and remedies as may be
available at law or in equity or under the Uniform
Commercial Code, including, without limitation, the
right to receive and/or establish a lock box for all
Rents and proceeds from the Intangibles and any other
receivables or rights to payments of Grantor relating
to the Property.
In the event of a sale, by foreclosure or otherwise, of less than all of the
Property, this Deed of Trust shall continue as a lien on the remaining portion
of the Property.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Beneficiary or
Trustee, as the case may be, under this Deed of Trust, whether under the
provisions of this paragraph or otherwise, shall be applied by Beneficiary to
the payment of the Debt in such priority and proportion as Beneficiary in its
sole discretion shall deem proper, except as otherwise required by law.
(c) Beneficiary or Trustee at the direction of Beneficiary, may
adjourn from time to time any sale by it to be made under or by virtue of this
Deed of Trust by announcement at the time and place appointed for such sale or
for such adjourned sale or sales; and, except as otherwise provided by any
applicable provision of law, Beneficiary or Trustee, without further notice or
publication, may make such sale at the time and place to which the same shall be
so adjourned.
(d) Upon the completion of any sale or sales pursuant hereto,
Beneficiary or Trustee, or an officer of any court empowered to do so, shall
execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument, or good and sufficient instruments, conveying, assigning
and transferring all estate, right, title and interest in and to the property
and rights sold. In addition to the powers granted to Trustee, Beneficiary is
hereby irrevocably appointed the true and lawful attorney of Grantor, in its
name and stead, to make all necessary conveyances, assignments, transfers and
deliveries of the Property and rights so sold and for that purpose Beneficiary
may execute all necessary instruments of conveyance, assignment and transfer,
and may substitute one or more persons with like power, Grantor hereby ratifying
and confirming all that its said attorney or such substitute or substitutes
shall lawfully do by virtue hereof. Any sale or sales made under or by virtue
of this paragraph, whether made under the power of sale herein granted or under
or by virtue of judicial proceedings or of a judgment or decree of foreclosure
and sale, shall operate to divest all the estate, right, title, interest, claim
and demand whatsoever, whether at law or in equity, of Grantor in and to the
properties and rights so sold, and shall be a perpetual bar both at law and in
equity against Grantor and against any and all persons claiming or who may claim
the same, or any part thereof from, through or under Grantor.
(e) Upon any sale made under or by virtue of this paragraph,
whether made under a power of sale or under or by virtue of judicial proceedings
or of a judgment or decree of foreclosure and sale, Beneficiary may bid for and
acquire the Property or any part thereof and in lieu of paying cash therefor may
make settlement for the purchase price by crediting upon the Debt the net sales
price after deducting therefrom the expenses of the sale and costs of the action
and any other sums which Beneficiary is authorized to deduct under this Deed of
Trust.
(f) No recovery of any judgment by Beneficiary and no levy of an
execution under any judgment upon the Property or upon any other property of any
Borrower shall affect in any manner or to any extent the lien of this Deed of
Trust upon the Property or any part thereof, or any
11
liens, rights, powers or remedies of Trustee or Beneficiary hereunder, but
such liens, rights, powers and remedies of Trustee or Beneficiary shall
continue unimpaired as before.
(g) Beneficiary may terminate or rescind any proceeding or other
action brought in connection with its exercise of the remedies provided in this
PARAGRAPH 20 at any time before the conclusion thereof, as determined in
Beneficiary's sole discretion and without prejudice to Beneficiary.
(h) Beneficiary may resort to any remedies and the security
given by the Note, this Deed of Trust or in any of the other Loan Documents in
whole or in part, and in such portions and in such order as determined by
Beneficiary's sole discretion. No such action shall in any way be considered a
waiver of any rights, benefits or remedies evidenced or provided by the Note,
this Deed of Trust or in any of the other Loan Documents. The failure of
Beneficiary to exercise any right, remedy or option provided in the Note, this
Deed of Trust or any of the other Loan Documents shall not be deemed a waiver of
such right, remedy or option or of any covenant or obligation secured by the
Note, this Deed of Trust or any of the other Loan Documents. No acceptance by
Beneficiary of any payment after the occurrence of any Event of Default and no
payment by Beneficiary of any obligation for which Grantor is liable hereunder
shall be deemed to waive or cure any Event of Default with respect to Grantor,
or Grantor's liability to pay such obligation. No sale of all or any portion of
the Property, no forbearance on the part of Beneficiary, and no extension of
time for the payment of the whole or any portion of the Debt or any other
indulgence given by Beneficiary to Grantor, shall operate to release or in any
manner affect the interest of Beneficiary in the remaining Property or the
liability of Grantor to pay the Debt. No waiver by Beneficiary shall be
effective unless it is in writing and then only to the extent specifically
stated. All costs and expenses of Beneficiary in exercising its rights and
remedies under this PARAGRAPH 20 (including reasonable attorneys' fees and
disbursements to the extent permitted by law), shall be paid by Grantor
immediately upon notice from Beneficiary, with interest at the Default Rate for
the period after notice from Beneficiary and such costs and expenses shall
constitute a portion of the Debt and shall be secured by this Deed of Trust.
(i) The interests and rights of Beneficiary under the Note, this
Deed of Trust or any of the other Loan Documents shall not be impaired by any
indulgence, including (i) any renewal, extension or modification which
Beneficiary may grant with respect to any of the Debt, (ii) any surrender,
compromise, release, renewal, extension, exchange or substitution which
Beneficiary may grant with respect to the Property or any portion thereof; or
(iii) any release or indulgence granted to any maker, endorser, guarantor or
surety of any of the Debt.
21. RIGHT OF ENTRY. In addition to any other rights or remedies
granted under this Deed of Trust, Beneficiary and its agents shall have the
right after reasonable prior notice to Grantor to enter and inspect the Property
at any reasonable time during the term of this Deed of Trust. The reasonable
cost of such inspections or audits shall be borne by Grantor should Beneficiary
reasonably determine that an Event of Default exists, including the cost of all
follow up or additional investigations or inquiries deemed reasonably necessary
by Beneficiary. The reasonable cost of such inspections, if not paid for by
Grantor following demand, may be added to the principal balance of the sums due
under the Note and this Deed of Trust and shall bear interest thereafter until
paid at the Default Rate.
22. SECURITY AGREEMENT. This Deed of Trust is both a real property
deed of trust and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of Grantor
in the Property. Grantor by executing and delivering this Deed of Trust has
granted and hereby grants to Beneficiary, as security for the Debt, a security
interest in the Property to the full extent that the Property may be subject to
the Uniform Commercial Code (said portion of the Property so subject to the
Uniform Commercial Code being called in this paragraph the "COLLATERAL").
Grantor hereby agrees with Beneficiary to execute and deliver to Beneficiary, in
form and substance satisfactory to Beneficiary, such financing statements and
such further assurances as Beneficiary may from time to time, reasonably
consider necessary to create, perfect, and preserve Beneficiary's security
interest herein granted. This Deed of Trust shall also constitute a "fixture
filing" for the purposes of the Uniform Commercial Code. As such, this Deed of
Trust covers all items of the Collateral that are or are to become fixtures.
12
Information concerning the security interest herein granted may be obtained from
the parties at the addresses of the parties set forth in the first paragraph of
this Deed of Trust. If an Event of Default shall occur, Beneficiary, in
addition to any other rights and remedies which it may have, shall have and may
exercise immediately and without demand, any and all rights and remedies granted
to a secured party upon default under the Uniform Commercial Code, including,
without limiting the generality of the foregoing, the right to take possession
of the Collateral or any part thereof, and to take such other measures as
Beneficiary may deem necessary for the care, protection and preservation of the
Collateral. Upon request or demand of Beneficiary, Grantor shall at its expense
assemble the Collateral and make it available to Beneficiary at a convenient
place acceptable to Beneficiary. Grantor shall pay to Beneficiary on demand any
and all expenses, including attorneys' fees and disbursements, incurred or paid
by Beneficiary in protecting the interest in the Collateral and in enforcing the
rights hereunder with respect to the Collateral. Any notice of sale,
disposition or other intended action by Beneficiary with respect to the
Collateral sent to Grantor in accordance with the provisions hereof at least ten
(10) days prior to such action, shall constitute commercially reasonable notice
to Grantor. The proceeds of any disposition of the Collateral, or any part
thereof, may be applied by Beneficiary to the payment of the Debt in such
priority and proportions as Beneficiary in its sole discretion shall deem
proper. In the event of any change in name, identity or structure of any
Grantor, such Grantor shall notify Beneficiary thereof and promptly after
request shall execute, file and record such Uniform Commercial Code forms as are
necessary to maintain the priority of Beneficiary's lien upon and security
interest in the Collateral, and shall pay all expenses and fees in connection
with the filing and recording thereof. If Beneficiary shall require the filing
or recording of additional Uniform Commercial Code forms or continuation
statements, Grantor shall, promptly after request, execute, file and record such
Uniform Commercial Code forms or continuation statements as Beneficiary shall
deem necessary, and shall pay all expenses and fees in connection with the
filing and recording thereof, it being understood and agreed, however, that no
such additional documents shall increase Grantor's obligations under the Note,
this Deed of Trust and the other Loan Documents. Grantor hereby irrevocably
appoints Beneficiary as its attorney-in-fact, coupled with an interest, to file
with the appropriate public office on its behalf any financing or other
statements signed only by Beneficiary, as secured party, in connection with the
Collateral covered by this Deed of Trust.
23. ACTIONS AND PROCEEDINGS. If Grantor fails to act within a
reasonable time, Beneficiary has the right to appear in and defend any action or
proceeding brought with respect to the Property and to bring any action or
proceeding, in Beneficiary's name or, if required by law, in the name and on
behalf of Grantor, which Beneficiary, in its reasonable discretion, decides
should be brought to protect their interest in the Property. Beneficiary shall,
at its option, be subrogated to the lien of any mortgage or other security
instrument discharged in whole or in part by the Debt, and any such subrogation
rights shall constitute additional security for the payment of the Debt.
24. WAIVER OF SETOFF AND COUNTERCLAIM. All amounts due under this
Deed of Trust, the Note and the other Loan Documents shall be payable without
setoff, counterclaim or any deduction whatsoever. Grantor hereby waives the
right to assert a setoff, counterclaim (other than a mandatory or compulsory
counterclaim) or deduction in any action or proceeding in which Beneficiary is a
participant, or arising out of or in any way connected with this Deed of Trust,
the Note, any of the other Loan Documents, or the Debt.
25. RECOVERY OF SUMS REQUIRED TO BE PAID. Beneficiary shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Beneficiary thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Grantor existing at the time such earlier
action was commenced.
26. MARSHALLING AND OTHER MATTERS. (a) Grantor hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein. Further, Grantor hereby expressly waives
any and all rights of redemption from sale under any order or decree of
foreclosure of this Deed of Trust on behalf of Grantor, and on behalf of each
and every person acquiring any interest in or title to the Property subsequent
to the date of this Deed of Trust and on behalf of all persons to the extent
permitted by applicable law.
13
(b) Grantor acknowledges that this Deed of Trust secures the Debt.
Grantor agrees that the lien of this Deed of Trust shall be absolute and
unconditional and shall not in any manner be affected or impaired by any acts or
omissions whatsoever of Beneficiary and, without limiting the generality of the
foregoing, the lien hereof shall not be impaired by any acceptance by
Beneficiary of any other security for any portion of the Debt, or by any
failure, neglect or omission on the part of Beneficiary to realize upon or
protect any portion of the Debt or any collateral security therefor. The lien
of this Deed of Trust shall not in any manner be impaired or affected by any
release (except as to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence, alteration, changing,
modification or disposition of any portion of the Debt or of any of the
collateral security therefor.
27. INTENTIONALLY OMITTED.
28. INTENTIONALLY OMITTED.
29. INTENTIONALLY OMITTED.
30. INTENTIONALLY OMITTED.
31. INDEMNIFICATION. (a) In addition, and without limitation, to
any other provision of this Deed of Trust or any other Loan Document, Grantor
shall protect, indemnify and save harmless Beneficiary, Trustee and their
successors and assigns, and their agents, employees, officers and directors,
from and against any and all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expense (including, without limitation,
reasonable attorneys' fees and disbursements, whether incurred within or outside
the judicial process), imposed upon or incurred by or asserted against
Beneficiary, Trustee and their assigns, or any of their agents, employees,
officers or directors, by reason of (a) ownership of this Deed of Trust, the
Assignment of Lease, the Property or any part thereof or any interest therein or
receipt of any Rents; (b) any accident, injury to or death of any person or loss
of or damage to property occurring in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, parking areas, streets or ways;
(c) any use, nonuse or condition in, on or about, or possession, alteration,
repair, operation, maintenance or management of, the Property or any part
thereof or on the adjoining sidewalks, curbs, parking areas, or ways; (d) any
failure on the part of Grantor to perform or comply with any of the terms of
this Deed of Trust or the Assignment of Lease; (e) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property or any part thereof; (f) any claim by brokers, finders or similar
Persons claiming to be entitled to a commission in connection with any Lease or
other transaction involving the Property or any part thereof; (g) any Taxes or
Other Charges including, without limitation, any Taxes or Other Charges
attributable to the execution, delivery, filing, or recording of any Loan
Document, Lease or memorandum thereof; (h) any lien or claim arising on or
against the Property or any part thereof under any Legal Requirement or any
liability asserted against Beneficiary or Trustee with respect thereto; or (i)
the claims of any lessee or any Person acting through or under any lessee or
otherwise arising under or as a consequence of any Lease. Notwithstanding the
foregoing provisions of this Section 31 to the contrary, Grantor shall have no
obligation to indemnify Beneficiary pursuant to this Section 31 for liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(1) which result from Beneficiary's, and its successors' or assigns' willful
misconduct or gross negligence or, (2) which are attributable to acts or events
which occur after the payment in full of the Debt or earlier termination of this
Deed of Trust (except to the extent fairly attributable to acts or events or
liabilities or damages occurring or accruing prior thereto and except as may be
provided in any other Loan Document), (3) resulting from a transfer by
Beneficiary of all or any part of its interest in this Deed of Trust, the Note,
the other Loan Documents or the Property, other than any such transfer either
required by this Deed of Trust or any other Loan Document or made while an Event
of Default shall have occurred and be continuing, (4) for Beneficiary's income
franchise, net revenue, capital levy, estate, inheritance or succession taxes
and (5) which arise under or are connected to the Securities Act or any other
securities laws, rules or regulations. Beneficiary shall credit against any
payments due under this Section 31 any insurance recoveries actually received by
beneficiary in respect of the related claim under or from insurance paid for by
Grantor or assigned to Beneficiary by Grantor.
14
(b) In the event that any action, suit or proceeding shall be
brought against Beneficiary for which Beneficiary is indemnified herein,
Beneficiary shall notify Grantor of the commencement thereof, and Grantor shall
be entitled, at its sole cost and expense, acting through counsel reasonably
acceptable to Beneficiary, to participate in, and, to the extent that Grantor
desires to, assume and control the defense thereof; provided, however, that
Grantor shall have acknowledged in writing its obligation to fully indemnify
Beneficiary hereunder in respect of such action, suit or proceeding, and,
provided further, that Grantor shall not be entitled to participate in the
defense of any such action, suit or proceeding if (i) in the reasonable opinion
of Beneficiary, (x) such action, suit or proceeding involves any risk of
imposition of criminal liability or any risk of civil liability on Beneficiary
or will involve a risk of the sale, forfeiture or loss of, or the creation of
any lien (other than a Permitted Encumbrance) on the Property or any part
thereof unless Grantor shall have posted a bond or other security satisfactory
to Beneficiary in respect to such risk except with respect to any risk of
imposition of criminal liability on Beneficiary as to which Grantor shall not be
entitled to so participate, (y) the control of such action, suit or proceeding
would involve a bona fide conflict of interest or (z) such action, suit or
proceeding involves claims, obligations, costs or expenses which exceed an
amount equal to the product of (A) $40,000,000 and (B) a fraction, the numerator
of which is (1) the aggregate Initial Allocated Loan Amounts less (2) the
aggregate Initial Allocated Loan Amounts of all Properties which have been
Released from the liens of the Mortgages as of the date of such determination,
and the denominator of which is the aggregate Initial Allocated Loan Amounts
(which amount is herein referred to as the "LITIGATION THRESHOLD"), (ii) such
proceeding involves claims, obligations, costs or expenses not fully indemnified
by Grantor which Grantor and Beneficiary have been unable to sever from the
indemnified claim(s), (iii) an Event of Default has occurred and is continuing,
(iv) such action, suit or proceeding involves matters which are unrelated to the
overall transaction contemplated by this Deed of Trust and the other Loan
Documents and if determined adversely could be detrimental to the interests of
Beneficiary notwithstanding indemnification by Grantor. Beneficiary may
participate in a reasonable manner at its own expense and with its own counsel
in any proceeding conducted by Grantor in accordance with the foregoing. The
party controlling any such action, suit or proceeding shall keep the other party
or parties hereto fully informed of the status of any such proceeding.
(c) In the event that, pursuant to Subsection (b)(i)(z) of this
Section 31, Grantor is not entitled to assume and control the defense of any
such action, suit or proceeding, Grantor shall be permitted to assume and
control such defense if Grantor either (i) delivers to Beneficiary an opinion
letter from counsel reasonably acceptable to Beneficiary or a certificate or
opinion from such other Person as shall be acceptable to Beneficiary that, in
such counsel's or other Person's opinion, there is no reasonable likelihood that
(A) the claimant would prevail on such action, suit or proceeding or (B)
Beneficiary's potential, uninsured liability would not exceed the Litigation
Threshold, which opinion or certificate shall be in form and substance
satisfactory to Beneficiary or (ii) Grantor executes and delivers an agreement
with Beneficiary, in form and substance satisfactory to Beneficiary, that
Grantor's liability for fully indemnifying Beneficiary in respect of such
action, suit or proceeding shall be a recourse obligation of Grantor not subject
to the provisions of Section 50 hereof.
(d) Each of Grantor and Beneficiary shall, at Grantor's sole
cost and expense, make available to the other party such information and
documents reasonably requested by the other party as are necessary or advisable
for the other party to participate in any action, suit or proceeding to the
extent permitted by this Section 31. Unless an Event of Default shall have
occurred and be continuing, Beneficiary shall not enter into any settlement or
other compromise with respect to any claim which is entitled to be indemnified
under this Section 31 without five (5) days' prior written notice to Grantor
unless Beneficiary waives its right to be indemnified under this Section 31 with
respect to such claim. Upon payment in full of any claim by Grantor pursuant to
this Section 31, to or on behalf of Beneficiary, Grantor, without any further
action, shall be subrogated to any and all claims that Beneficiary may have
relating thereto (other than claims in respect of insurance policies maintained
by Beneficiary at its own expense), and Beneficiary shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be reasonably necessary
to preserve any such claims and otherwise cooperate with Grantor and give such
further assurances as are reasonably necessary or advisable to enable Grantor to
pursue such claims vigorously. Any amount payable to Beneficiary pursuant to
this Section 31 shall be paid by Grantor to the indemnified party promptly upon
(i) the adverse determination of such action, suit or proceeding against the
indemnified party if, pursuant to this Section 31, Grantor assumed and
controlled the defense thereof,
15
or (ii) Grantor's receipt of a written demand therefor from Beneficiary,
accompanied by a written statement describing the basis for such indemnity
and the computation of the amount so payable.
Any amounts payable to Beneficiary by reason of the application
of this Section 31 shall constitute a part of the Debt secured by the Mortgages
and other Loan Documents and shall become immediately due and payable and shall
bear interest at the Default Rate from the date the liability, obligation,
claim, cost or expense is sustained by the indemnified party, until paid. The
provisions of this Section 31 shall survive the termination of this Deed of
Trust and the other Loan Documents whether by repayment of the Debt, foreclosure
or delivery of a deed in lieu thereof, assignment or otherwise.
32. NOTICES. All notices, consents, approvals and requests required
or permitted hereunder or under any other Loan Document shall be given in
writing and shall be effective for all purposes if hand delivered or sent by (a)
certified or registered United States mail, postage prepaid, or (b) expedited
prepaid delivery service, either commercial or United States Postal Service,
with proof of attempted delivery, addressed as follows (or at such other address
and person as shall be designated from time to time by any party hereto, as the
case may be, in a written notice to the other parties hereto in the manner
provided for in this Section):
If to Beneficiary:
Nomura Asset Capital Corporation
Two World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
with copies to:
Nomura Asset Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
and:
Nomura Asset Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
If to Grantor:
c/o Horizon Group Properties, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
with copies to:
c/o Horizon Group Properties, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive
and
▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to Trustee:
__________________________
__________________________
__________________________
A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery, upon the first attempted delivery on a Business Day.
All notices to Trustee shall be deemed to have been properly given if personally
delivered or sent by U.S. registered or certified mail, return receipt
requested, postage prepaid, addressed to Trustee at the address of Trustee
hereinabove set forth or to such other address as Trustee shall have last
designated by written notice to Grantor and Beneficiary given as herein
required.
33. AUTHORITY. (a) Grantor (and the undersigned representative of
Grantor, if any) represent and warrant that it (or they, as the case may be) has
full power, authority and right to execute, deliver and perform its obligations
pursuant to this Deed of Trust, and to mortgage, give, grant, bargain, sell,
alien, enfeoff, convey, confirm, warrant, pledge, hypothecate and assign the
Property pursuant to the terms hereof and to keep and observe all of the terms
of this Deed of Trust on Grantor's part to be performed; and (b) Grantor
represents and warrants that Grantor is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended
and the related Treasury Department regulations, including temporary
regulations.
34. WAIVER OF NOTICE. Grantor shall not be entitled to any notices
of any nature whatsoever from Beneficiary except with respect to matters for
which this Deed of Trust or any other Loan Document specifically and expressly
provides for the giving of notice by Beneficiary to Grantor and except with
respect to matters for which Beneficiary is required by applicable law to give
notice. To the extent permitted by applicable law, Grantor hereby expressly
waives the right to receive any notice from Beneficiary with respect to any
matter for which this Deed of Trust or other Loan Document does not specifically
and expressly provide for the giving of notice by Beneficiary to Grantor.
35. INTENTIONALLY OMITTED.
36. SOLE DISCRETION OF BENEFICIARY AND TRUSTEE. Wherever pursuant to
this Deed of Trust, Beneficiary or Trustee exercise any right given to it to
consent or not consent or approve or disapprove, or any arrangement or term is
to be satisfactory to Beneficiary or Trustee, the decision of Beneficiary or
Trustee to consent or not consent, to approve or disapprove or to decide that
arrangements or terms are satisfactory or not satisfactory shall be in the sole
discretion of Beneficiary and Trustee and shall be final and conclusive, except
as may be otherwise expressly and specifically provided herein.
37. NON-WAIVER. The failure of Beneficiary to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Deed of Trust. Grantor shall not be relieved of Grantor's obligations
hereunder by reason of (a) the failure of Beneficiary to comply with any request
of Grantor to take any action to foreclose this Deed of Trust or otherwise
enforce any of the provisions hereof or of the Note, or any of the other Loan
Documents, (b) except in connection with the release of this Deed of Trust or
the full repayment (or complete defeasance) of the Debt, the release, regardless
of consideration, any collateral securing the Debt or of any person other than
Grantor liable for the Debt or any portion thereof, or (c) any agreement or
stipulation by Beneficiary extending the time of payment or otherwise modifying
or supplementing the terms of the Note, this Deed of Trust or any of the other
Loan Documents. Beneficiary may resort for the payment of the Debt to any other
security held by Beneficiary in such order and manner as Beneficiary, in its
sole discretion, may elect. Beneficiary may take action to recover the Debt, or
any portion thereof, or to enforce any covenant hereof without
17
prejudice to the right of Trustee thereafter to foreclose this Deed of Trust.
The rights and remedies of Beneficiary or Trustee, as the case may be, under
this Deed of Trust shall be separate, distinct and cumulative and none shall
be given effect to the exclusion of the others. No act of Beneficiary or
Trustee, as the case may be, shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision.
Beneficiary shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or
hereafter afforded at law or in equity except as such rights may be expressly
limited herein or in the other Loan Documents.
38. NO ORAL CHANGE. This Deed of Trust, and any provisions hereof,
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Grantor,
Trustee or Beneficiary, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
39. LIABILITY. If Grantor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. Subject to the provisions hereof requiring Beneficiary's consent to
any transfer of the Property, this Deed of Trust shall be binding upon and inure
to the benefit of Grantor and Beneficiary and their respective successors and
assigns forever.
40. INAPPLICABLE PROVISIONS. If any term, covenant or condition of
the Note or this Deed of Trust is held to be invalid, illegal or unenforceable
in any respect, the Note and this Deed of Trust shall be construed without such
provision.
41. HEADINGS, ETC. The headings and captions of various paragraphs
of this Deed of Trust are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
42. DUPLICATE ORIGINALS. This Deed of Trust may be executed in any
number of duplicate originals and each such duplicate original shall be deemed
to be an original.
43. DEFINITIONS. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this Deed
of Trust may be used interchangeably in singular or plural form and the word
"GRANTOR" shall mean "each Grantor and any subsequent owner or owners of the
Property or any part thereof or any interest therein," the word "BENEFICIARY"
shall mean "Beneficiary and any subsequent holder of the Note," the word
"TRUSTEE" shall mean "Trustee and any substitute Trustee," the word "NOTE" shall
mean "the Note and any other evidence of indebtedness secured by this Deed of
Trust," the word "PERSON" shall include an individual, corporation, partnership,
trust, unincorporated association, government, governmental authority, and any
other entity, the words "PROPERTY" shall include any portion of the Property and
any interest therein which has not been released from the lien of this Deed of
Trust and the words "ATTORNEYS' FEES" shall include any and all recorded
attorneys' fees, paralegal and law clerk fees, including, without limitation,
fees at the pre-trial, trial and appellate levels incurred or paid by
Beneficiary in protecting its interest in the Property and Collateral and
enforcing its rights hereunder. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and vice
versa.
44. HOMESTEAD. Grantor hereby waives and renounces all homestead and
exemption rights provided by the Constitution and the laws of the United States
and of any state, in and to the Property as against the collection of the Debt,
or any part hereof.
45. ASSIGNMENTS. Beneficiary shall have the right to assign or
transfer its rights under this Deed of Trust provided that no such assignment or
transfer shall increase, decrease or otherwise affect Grantor's obligations
under this Deed of Trust or the other Loan Documents. Any assignee or
transferee shall be entitled to all the benefits afforded Beneficiary under this
Deed of Trust.
46. WAIVER OF JURY TRIAL. GRANTOR AND, BY ITS ACCEPTANCE HEREOF,
BENEFICIARY, EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF
18
ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE NOTE, THIS DEED OF TRUST, OR THE OTHER LOAN DOCUMENTS, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY
GRANTOR AND BENEFICIARY, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD
OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE
OTHER PARTY.
47. MISCELLANEOUS. (a) Any consent or approval by Beneficiary in
any single instance shall not be deemed or construed to be Beneficiary's consent
or approval in any like matter arising at a subsequent date, and the failure of
Beneficiary to promptly exercise any right, power, remedy, consent or approval
provided herein or at law or in equity shall not constitute or be construed as a
waiver of the same nor shall Beneficiary be estopped from exercising such right,
power, remedy, consent or approval at a later date. Any consent or approval
requested of and granted by Beneficiary pursuant hereto shall be narrowly
construed to be applicable only to the Person and the matter identified in such
consent or approval and no third party shall claim any benefit by reason
thereof, and any such consent or approval shall not be deemed to constitute
Beneficiary a venturer or partner with Grantor nor shall privity of contract be
presumed to have been established with any such third party. If Beneficiary
deems reasonably necessary to retain assistance of persons, firms or
corporations (including, without limitation, attorneys, title insurance
companies, appraisers, engineers and surveyors) with respect to a request for
consent or approval, Grantor shall reimburse Beneficiary for all costs
reasonably incurred in connection with the employment of such persons, firms or
corporations.
(b) Grantor covenants and agrees that during the term of this
Deed of Trust, unless Beneficiary shall have previously consented in writing,
(i) Grantor will take no action that would cause it to become an "EMPLOYEE
BENEFIT PLAN" as defined in 29 C.F.R. Section 2510.3-101, or "ASSETS OF A
GOVERNMENTAL PLAN" subject to regulation under the state statutes, and
(ii) Grantor will not sell, assign or transfer the Property, or any portion
thereof or interest therein, to any transferee that does not execute and deliver
to Beneficiary its written assumption of the obligations of this covenant.
(c) The Loan Documents contain the entire agreement between
Grantor and Beneficiary relating to or connected with the Loan. Any other
agreements relating to or connected with the Loan not expressly set forth in the
Loan Documents are null and void and superseded in their entirety by the
provisions of the Loan Documents.
48. DEFEASANCE; RELEASE OF THIS DEED OF TRUST. This Deed of Trust
will be satisfied and discharged of record by Beneficiary or Trustee, as the
case may be in accordance with the terms and provisions set forth in Sections
2.3 and 2.4 of the Loan Agreement.
49. NO ELECTION OF REMEDIES. (a) Without limiting any other right
or remedy provided to Beneficiary in this Deed of Trust or the other Loan
Documents, in the case of an Event of Default (i) Beneficiary shall have the
right to pursue all of its rights and remedies under this Deed of Trust and the
Loan Documents, at law and/or in equity, in one proceeding, or separately and
independently in separate proceedings from time to time, as Beneficiary, in its
sole and absolute discretion, shall determine from time to time, (ii)
Beneficiary shall not be required to either ▇▇▇▇▇▇▇▇ assets, sell the Property
in any particular order of alienation (and may sell the same simultaneously and
together or separately), or be subject to any "one action" or "election of
remedies" law or rule with respect to the Property, (iii) the exercise by
Beneficiary or Trustee, as the case may be, of any remedies against any one item
of Property will not impede Beneficiary from subsequently or simultaneously
exercising remedies against any other item of Property, (iv) all liens and other
rights, remedies or privileges provided to Beneficiary herein shall remain in
full force and effect until Beneficiary has exhausted all of its remedies
against the Property and all Property has been foreclosed, sold and/or otherwise
realized upon in satisfaction of the Debt, and (v) Beneficiary may resort for
the payment of the Debt to any security held by Beneficiary in such order and
manner as Beneficiary, in its discretion, may
19
elect and Beneficiary may take action to recover the Debt, or any portion
thereof, or to enforce any covenant hereof without prejudice to the right of
Beneficiary thereafter to foreclose this Deed of Trust.
(b) Without notice to or consent of Grantor and without
impairment of the lien and rights created by this Deed of Trust, Beneficiary
may, at any time (in its sole and absolute discretion, but Beneficiary shall
have no obligation to), execute and deliver to Grantor a written instrument
releasing and reconveying all or a portion of the lien of this Deed of Trust as
security for any or all of the obligations of Grantor now existing or hereafter
arising under or in respect of the Note, the Loan Agreement and each of the
other Loan Documents, whereupon following the execution and delivery by
Beneficiary or Trustee, at the direction of Beneficiary, to Grantor of any such
written instrument of release, this Deed of Trust shall no longer secure such
obligations of Grantor so released.
50. EXCULPATION. [Notwithstanding anything herein to the contrary,
Beneficiary shall not enforce the liability and obligations contained in the
Note, the Loan Agreement, this Deed of Trust or the other Loan Documents except
as provided in Section 9.4 of the Loan Agreement.][THIS PARAGRAPH WILL BE
DELETED FOR BRIDGE LOAN MORTGAGES]
51. GOVERNING LAW. WITH RESPECT TO MATTERS RELATING TO THE CREATION,
PERFECTION AND PROCEDURES RELATING TO THE ENFORCEMENT (INCLUDING NON-JUDICIAL
FORECLOSURE OF LIENS) OF THIS DEED OF TRUST, THIS DEED OF TRUST SHALL BE
GOVERNED BY, AND BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH
THE PROPERTY IS LOCATED WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
IT IS UNDERSTOOD THAT, EXCEPT AS EXPRESSLY SET FORTH ABOVE IN THIS PARAGRAPH AND
TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE
OF ILLINOIS SHALL GOVERN ALL MATTERS RELATING TO THIS DEED OF TRUST AND THE
OTHER LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. GRANTOR, AND, BY ITS ACCEPTANCE HEREOF, BENEFICIARY,
EACH HEREBY SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF ILLINOIS AND THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF ILLINOIS
(AND ANY APPELLATE COURTS TAKING APPEALS THEREFROM) FOR THE ENFORCEMENT OF SUCH
PARTY'S OBLIGATIONS HEREUNDER AND WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE
LAW OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN SUCH STATE FOR THE
PURPOSES OF SUCH ACTION, SUIT, PROCEEDING OR LITIGATION TO ENFORCE SUCH
OBLIGATIONS OF SUCH PARTY. GRANTOR, AND, BY ITS ACCEPTANCE HEREOF, BENEFICIARY,
EACH HEREBY WAIVES AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS DEED OF TRUST (A) THAT IT IS NOT
SUBJECT TO SUCH JURISDICTION OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE
BROUGHT OR IS NOT MAINTAINABLE IN THOSE COURTS OR THAT THIS DEED OF TRUST MAY
NOT BE ENFORCED IN OR BY THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM
EXECUTION, (B) THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR (C) THAT THE VENUE OF THE ACTION, SUIT OR PROCEEDING IS IMPROPER. IN
THE EVENT ANY SUCH ACTION, SUIT, PROCEEDING OR LITIGATION IS COMMENCED, GRANTOR,
AND, BY ITS ACCEPTANCE HEREOF, BENEFICIARY, EACH AGREES THAT SERVICE OF PROCESS
MAY BE MADE, AND PERSONAL JURISDICTION OVER SUCH PARTY OBTAINED, BY SERVICE OF A
COPY OF THE SUMMONS, COMPLAINT AND OTHER PLEADINGS REQUIRED TO COMMENCE SUCH
LITIGATION BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED UPON SUCH PARTY AT THE
APPLICABLE ADDRESS SET FORTH IN SECTION 32 ABOVE. GRANTOR, AND, BY ITS
ACCEPTANCE HEREOF, BENEFICIARY, EACH HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATED TO THE ENFORCEMENT OF THIS
DEED OF TRUST.
52. TRUSTEE; SUCCESSOR TRUSTEE. Trustee shall not be liable for any
error of judgment or act done by Trustee, or be otherwise responsible or
accountable under any circumstances whatsoever, except if the result of
Trustee's gross negligence or willful misconduct. Trustee shall not be
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personally liable in case of entry by him or anyone acting by virtue of the
powers herein granted him upon the Property for debts contracted or liability or
damages or damages incurred in the management or operation of the Property.
Trustee shall have the right to rely on any instrument, document or signature
authorizing or supporting any action taken or proposed to be taken by him
hereunder or believed by him to be genuine. Trustee shall be entitled to
reimbursement for actual expenses incurred by him in the performance of his
duties hereunder. Grantor will, from time to time, reimburse Trustee for and
save and hold him harmless from and against any and all loss, cost, liability,
damage and reasonable expense whatsoever incurred by him in the performance of
his duties. All monies received by Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated in any manner from any other monies (except to the
extent required by law) and Trustee shall be under no liability for interest on
any monies received by him hereunder. Trustee may resign by giving of notice of
such resignation in writing to Beneficiary. If Trustee shall die, resign or
become disqualified from acting in the execution of this trust or shall fail or
refuse to exercise the same when requested by Beneficiary or if for any or no
reason and without cause Beneficiary shall prefer to appoint a substitute
trustee to act instead of the original Trustee named herein, or any prior
successor or substitute trustee, Beneficiary shall, without any formality or
notice to Grantor or any other person, have full power to appoint a substitute
trustee and, if Beneficiary so elects, several substitute trustees in succession
who shall succeed to all the estate, rights, powers and duties of the aforenamed
Trustee. Each appointment and substitution shall be evidenced by an instrument
in writing which shall recite the parties to, and the book and page of record
of, this Deed of Trust, and the description of the real property herein
described, which instrument, executed and acknowledged by Beneficiary and
recorded in the Official Records of the county in which this Deed of Trust is
recorded, shall (i) be conclusive proof of the proper substitution and
appointment of such successor Trustee or Trustees, (ii) duly assign and transfer
all the estates, properties, rights, powers and trusts of Trustee so ceasing to
act and (iii) be notice of such proper substitution and appointment to all
parties in interest. In addition, such Trustee ceasing to act shall duly
assign, transfer, and deliver any of the property and monies held by Trustee to
the successor Trustee so appointed in its or his place. The Trustee may act in
the execution of this trust and may authorize one or more parties to act on his
behalf to perform the ministerial functions required of him hereunder, including
without limitation, the transmittal and posting of any notices and it shall not
be necessary for any Trustee to be present in person at any foreclosure sale.
53. DECLARATION OF SUBORDINATION. At the option of Beneficiary, this
Deed of Trust shall become subject and subordinate, in whole or in part (but not
with respect to priority of entitlement to insurance proceeds or any
condemnation proceeds), to any and all leases of all or any part of the Property
upon the execution by Beneficiary or Trustee and recording thereof, at any time
hereafter in the appropriate official records of the County wherein the Property
are situated, of a unilateral declaration to that effect.
54. STATE SPECIFIC RIDER. The provisions of the State Specific Rider
attached hereto as EXHIBIT B are hereby incorporated herein by reference.
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IN WITNESS WHEREOF, Grantor has executed this instrument the day and
year first above written.
[_________________________], a Delaware [____________]
By: Horizon Group Properties, L.P., a Delaware limited
partnership, its [_________]
By: Horizon Group Properties, Inc., a Maryland
corporation, its general partner
By:________________________________
Name:
Title:
22
STATE OF )
) ss.:
COUNTY OF )
This instrument has been acknowledged before me on this _____ day
of , 1998, by ____________, the __________ of Horizon Group
Properties, Inc., a Maryland corporation, in its capacity as the general
partner of Horizon Group Properties, L.P., a Delaware limited partnership, in
its capacity as _______________ of _____________________ on behalf of such
entity.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal of
office this ____ day of , 1998.
_____________________________
Notary Public
[Notarial Seal]
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EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B
RIDER