Recording Requested by and Recorded
Counterparts Should be Returned to:
Sony ▇▇▇-▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT
made by
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC,
a Delaware limited liability company,
as Trustor,
to
LAWYERS TITLE OF NEVADA, INC.
a Nevada corporation,
as Trustee,
for the benefit of
FIRST TRUST NATIONAL ASSOCIATION,
in its capacity as the Mortgage Notes Indenture
as Beneficiary
***************************************************************************
THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL ESTATE RECORDS AND
IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS OF ▇▇▇▇▇ COUNTY,
NEVADA UNDER THE NAMES OF GRAND CANAL SHOPS MALL CONSTRUCTION, LLC AS "DEBTOR"
AND FIRST TRUST NATIONAL ASSOCIATION, AS MORTGAGE NOTES INDENTURE TRUSTEE, AS
SECURED PARTY.
THIS INSTRUMENT IS A "CONSTRUCTION MORTGAGE" AS THAT TERM IS DEFINED IN
SECTION 104.9313(1)(C) OF THE NEVADA REVISED STATUTES AND SECURES AN OBLIGATION
INCURRED FOR THE CONSTRUCTION OF AN IMPROVEMENT UPON LAND.
LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT
THIS LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES AND SECURITY
AGREEMENT (hereinafter called "Leasehold Deed of Trust") is made effective as of
November 14, 1997, by GRAND CANAL SHOPS MALL CONSTRUCTION, LLC, a Delaware
limited liability company, and (together with all successors and assigns of the
Trust Estate (as hereinafter defined), "Trustor") whose address is 3355 Las
Vegas Boulevard South, Room 1G, Las Vegas, Nevada 89109, Attention: General
Counsel, to LAWYERS TITLE OF NEVADA, INC. a Nevada corporation, whose address is
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇ ▇▇▇▇▇▇,
as Trustee ("Trustee"), for the benefit of FIRST TRUST NATIONAL ASSOCIATION,
("Beneficiary"), in its capacity as the Mortgage Notes Indenture Trustee under
that certain Indenture, dated of even date herewith, among Venetian Casino
Resort, LLC, a Nevada limited liability company ("Venetian"), Las Vegas Sands,
Inc., a Nevada corporation ("LVSI"), Trustor, Beneficiary and the other parties
signatory thereto (as the same may be amended or modified from time to time, the
"Mortgage Notes Indenture") and pertaining to the 12.25% Mortgage Notes 2004
issued by Venetian and LVSI in the aggregate principal amount of $425,000,000.
DEFINITIONS - As used in this Leasehold Deed of Trust, the following
terms have the meanings hereinafter set forth:
"Accounts Receivable" shall have the meaning set forth in Section
9-106 (NRS 104.9106) of the UCC for the term "account."
"Appurtenant Rights" means all and singular tenements,
hereditaments, rights, reversions, remainders, development rights, privileges,
benefits, easements (in gross or appurtenant), rights-of-way, gores or strips of
land, streets, ways, alleys, passages, sewer rights, water courses, water rights
and powers, and all appurtenances whatsoever and claims or demands of Trustor at
law or in equity in any way belonging, benefitting, relating or appertaining to
the Leased Premises, the airspace over the Leased Premises, the Improvements or
any of the Trust Estate encumbered by this Leasehold Deed of Trust, or which
hereinafter shall in any way belong, relate or be appurtenant thereto, whether
now owned or hereafter acquired by Trustor.
"Bankruptcy" means, with respect to any Person that: (i) a court
having jurisdiction in the Trust Estate shall have entered a decree or order for
relief in respect of such Person in an involuntary case under the Bankruptcy Law
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order has not been stayed; or any other
similar relief shall have been granted under any applicable federal or state
law; or (ii) an involuntary case shall be commenced against such Person, under
the Bankruptcy Law or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the Trust Estate for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having
2
similar powers over such Person, or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of such Person,
for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of such Person, and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; or (iii) such
Person shall have an order for relief entered with respect to it or shall
commence a voluntary case under the Bankruptcy Law or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or such Person
shall make any assignment for the benefit of creditors or shall fail generally,
or shall admit in writing its inability, to pay its debts as such debts become
due and payable and a period of thirty days (30) shall have elapsed; or (iv)
such Person shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due and a period of 30 days
shall have elapsed; or the Board of Directors of such Person (or any committee
thereof) or the managing member of such Person shall, adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (iii) above or this clause (iv).
"Billboard Leased Premises" means the real property situated in the
County of ▇▇▇▇▇, State of Nevada described in the Billboard Master Lease and
more specifically described in Exhibit A-4 attached hereto and incorporated
herein by reference.
"Billboard Master Lease" means that certain lease dated effective as
of November 14, 1997 between Venetian, as lessor, and Trustor, as lessee, for
the Billboard Leased Premises, as more particularly described in Exhibit A-3
attached hereto.
"Default Rate" means the maximum interest rate due upon an Event of
Default pursuant under the Mortgage Notes Indenture pursuant to Section 4.01
thereof.
"Disbursement Agreement" means that certain Funding Agents'
Disbursement and Administration Agreement dated as of November 14, 1997 by and
among Trustor, LVSI, Venetian, The Bank of Nova Scotia, as the Bank Agent and
the Disbursement Agent, Beneficiary, as the Mortgage Notes Indenture Trustee,
the Interim Mall Lender and Atlantic- Pacific Las Vegas, LLC, a Delaware limited
liability company, as the HVAC Provider, as the same may hereafter be amended or
modified in accordance with its terms and the terms of the Mortgage Notes
Indenture.
"Event of Default" has the meaning set forth in Section 3.1 hereof.
"FF&E" means all furniture, fixtures, equipment, appurtenances and
personal property now or in the future contained in, used in connection with,
attached to, or otherwise useful or convenient to the use, operation, or
occupancy of, or placed on, but unattached to, any part of the Leased Premises
or Improvements whether or not the same constitutes real property or fixtures in
the State of Nevada, including all removable window and floor
3
coverings, all furniture and furnishings, heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, incinerating and elevator and
escalator plants, cooking facilities, vacuum cleaning systems, public address
and communications systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, motors, machinery, pipes, appliances,
equipment, fittings, fixtures, and building materials, all gaming and financial
equipment, computer equipment, calculators, adding machines, gaming tables,
video game and slot machines, and any other electronic equipment of every nature
used or located on any part of the Leased Premises or Improvements, together
with all venetian blinds, shades, draperies, drapery and curtain rods, brackets,
bulbs, cleaning apparatus, mirrors, lamps, ornaments, cooling apparatus and
equipment, ranges and ovens, garbage disposals, dishwashers, mantels, and any
and all such property which is at any time installed in, affixed to or placed
upon the Leased Premises or Improvements.
"FF&E Financing Agreement" means any financing agreement entered
into by Trustor (i) the proceeds of which are used by Trustor for the
acquisition or lease of FF&E, (ii) pursuant to which Trustor grants to the
lender or lessor thereunder a security interest in the FF&E so acquired or
leased and (iii) which is permitted by the Mortgage Notes Indenture.
"Imposition" means any taxes, assessments, water rates, sewer rates,
maintenance charges, other governmental impositions and other charges now or
hereafter levied or assessed or imposed against the Trust Estate or any part
thereof, and any amount payable with respect thereto under the Cooperation
Agreement.
"Improvements" means (1) all the buildings, structures, facilities
and improvements of every nature whatsoever now or hereafter situated on the
Leased Premises or any real property encumbered hereby, and (2) all fixtures,
machinery, appliances, goods, building or other materials, equipment, including
without limitation all gaming equipment and devices, and all machinery,
equipment, engines, appliances and fixtures for generating or distributing air,
water, heat, electricity, light, fuel or refrigeration, or for ventilating or
sanitary purposes, or for the exclusion of vermin or insects, or for the removal
of dust, refuse or garbage; all wall-beds, wall-safes, built-in furniture and
installations, shelving, lockers, partitions, doorstops, vaults, motors,
elevators, dumb-waiters, awnings, window shades, venetian blinds, light
fixtures, fire hoses and brackets and boxes for the same, fire sprinklers,
alarm, surveillance and security systems, computers, drapes, drapery rods and
brackets, mirrors, mantels, screens, linoleum, carpets and carpeting, plumbing,
bathtubs, sinks, basins, pipes, faucets, water closets, laundry equipment,
washers, dryers, ice-boxes and heating units; all kitchen and restaurant
equipment, including but not limited to silverware, dishes, menus, cooking
utensils, stoves, refrigerators, ovens, ranges, dishwashers, disposals, water
heaters, incinerators, furniture, fixtures and furnishings, communication
systems, and equipment; all cocktail lounge supplies, including but not limited
to bars, glassware, bottles and tables used in connection with the Leased
Premises; all chaise lounges, hot tubs, swimming pool heaters and equipment and
all other recreational equipment (computerized and otherwise), beauty and ▇▇▇▇▇▇
equipment, and maintenance supplies used in connection with the Leased Premises;
all amusement rides and attractions attached to the Leased Premises, all
specifically designed installations and furnishings, and all furniture,
furnishings and personal property of every nature whatsoever now or hereafter
owned or leased by Trustor or in which Trustor has any
4
rights or interest and located in or on, or attached to, or used or intended to
be used or which are now or may hereafter be appropriated for use on or in
connection with the operation of the Leased Premises or any real or personal
property encumbered hereby or any other Improvements, or in connection with any
construction being conducted or which may be conducted thereon, and all
extensions, additions, accessions, improvements, betterments, renewals,
substitutions, and replacements to any of the foregoing, and all of the right,
title and interest of Trustor in and to any such property, which, to the fullest
extent permitted by law, shall be conclusively deemed fixtures and improvements
and a part of the real property hereby encumbered.
"Insolvent" means with respect to any person or entity, that such
person or entity shall be deemed to be insolvent if he or it shall fail
generally, or shall admit in writing its inability to pay its debts as such
debts become due and payable and a period of thirty (30) days shall have
elapsed.
"Intangible Collateral" means (a) the rights to use all names and
all derivations thereof now or hereafter used by Trustor in connection with the
Leased Premises or Improvements, including, without limitation, the names
"Venetian," "Sands," "Grand Canal" and "Grand Canal Shoppes" including any
variations thereon, together with the goodwill associated therewith, and all
names, logos, and designs used by Trustor, or in connection with the Leased
Premises or in which Trustor has rights, with the exclusive right to use such
names, logos and designs wherever they are now or hereafter used in connection
with the Project (or in connection with the marketing of the Project together
with the "SECC Land" (as defined in the Cooperation Agreement) in accordance
with the terms of the Cooperation Agreement), and any and all other trade names,
trademarks or service marks, whether or not registered, now or hereafter used in
the operation of the Project, including, without limitation, any interest as a
lessee, licensee or franchisee, and, in each case, together with the goodwill
associated therewith; (b) subject to the absolute assignment contained herein,
the Rents; (c) any and all books, records, customer lists, concession
agreements, supply or service contracts, licenses, permits, governmental
approvals (to the extent such licenses, permits and approvals may be pledged
under applicable law), signs, goodwill, supplier lists, checking accounts, safe
deposit boxes (excluding the contents of such deposit boxes owned by persons
other than Trustor and its subsidiaries), cash, instruments, chattel papers,
including inter-company notes and pledges, documents, unearned premiums,
deposits, refunds, including but not limited to income tax refunds, prepaid
expenses, rebates, tax and insurance escrow and impound accounts, if any,
actions and rights in action, and all other claims, including without limitation
condemnation awards and insurance proceeds, and all other contract rights and
general intangibles resulting from or used in connection with the operation and
occupancy of the Trust Estate and the Improvements and in which Trustor now or
hereafter has rights; and (d) general intangibles, vacation license resort
agreements or other time share license or right to use agreements, including
without limitation all rents, issues, profits, income and maintenance fees
resulting therefrom, whether any of the foregoing is now owned or hereafter
acquired.
"Interim Mall Lender" means GMAC Commercial Mortgage Corporation, a
California corporation, and its permitted successors, assigns and replacements.
5
"Leasehold Deed of Trust" means this Leasehold Deed of Trust,
Assignment of Rents and Leases and Security Agreement as it may be amended,
increased or modified from time to time.
"Leasehold Estate" means, with respect to each Subject Lease, the
right, title and interest of the tenant or lessee thereunder.
"Legal Requirements" means all applicable restrictive covenants,
applicable zoning and subdivision ordinances and building codes, all applicable
health and Environmental Laws and regulations, all applicable gaming laws and
regulations, and all other applicable laws, ordinances, rules, regulations,
judicial decisions, administrative orders, and other requirements of any
Governmental Instrumentality having jurisdiction over Trustor, the Trust Estate
and/or any Affiliate of Trustor, in effect either at the time of execution of
this Leasehold Deed of Trust or at any time during the term hereof, including,
without limitation, all Environmental Laws and Nevada Gaming Laws.
"Mall Lease" means that certain Mall I Airspace/Ground Lease dated
effective as of the date hereof by and between Venetian, as lessor, and Trustor,
as lessee, for the Mall Leased Premises, as more particularly described in
Exhibit A-1 attached hereto.
"Mall Leased Premises" means the real property situated in the
County of ▇▇▇▇▇, State of Nevada, described in the Mall Lease and more
specifically described in Exhibit A-2 attached hereto and incorporated herein by
reference, including any after acquired title, estates, interests or rights
thereto.
"Notes" means collectively, those certain Mortgage Note(s) issued
pursuant to the Mortgage Notes Indenture, as the same may be amended or replaced
from time to time in accordance with its terms.
"NRS" means the Nevada Revised Statutes as in effect from time to
time.
"Obligations" means the payment and performance of each covenant and
agreement of Trustor contained in this Leasehold Deed of Trust, the Mortgage
Notes Indenture (including, without limitation, the guaranty provided therein by
Trustor of the obligations of LVSI and Venetian with respect to the Notes and
under the Mortgage Notes indenture), the Notes, the Mortgage Notes Indenture
Security Documents and the Disbursement Agreement.
"Permitted Dispositions" means (a) the sale, transfer, lease or
other disposition of assets in the Trust Estate, in the ordinary course of
business, or of inventory held in the ordinary course of business, (b) the
dispositions set forth in Section 1.10 hereof and (c) other sales, transfers,
leases or other dispositions of assets in the Trust Estate; provided that all
applicable provisions of the Mortgage Notes Indenture are complied with,
including Sections 4.10 and 4.24.
"Personal Property" has the meaning set forth in Section 1.12
hereof.
6
"Proceeds" has the meaning assigned to it under the UCC and, in any
event, shall include but not be limited to (i) any and all proceeds of any
insurance (including without limitation property casualty and title insurance),
indemnity, warranty or guaranty payable from time to time with respect to any of
the Trust Estate; (ii) any and all proceeds in the form of accounts, security
deposits, tax escrows (if any), down payments (to the extent the same may be
pledged under applicable law), collections, contract rights, documents,
instruments, chattel paper, liens and security instruments, guarantees or
general intangibles relating in whole or in part to the Project and all rights
and remedies of whatever kind or nature Trustor may hold or acquire for the
purpose of securing or enforcing any obligation due Trustor thereunder; (iii)
any and all payments in any form whatsoever made or due and payable from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Trust Estate by any Governmental
Instrumentality; (iv) subject to the absolute assignment contained herein, the
Rents or other benefits arising out of, in connection with or pursuant to any
Space Lease of the Trust Estate; and (v) any and all other amounts from time to
time paid or payable in connection with any of the Trust Estate; provided,
however, that the Trustor is not authorized to dispose of any of the Trust
Estate unless such disposition is a Permitted Disposition.
"Project" means the resort-hotel-casino-mall complex proposed to be
constructed in ▇▇▇▇▇ County, Nevada as described in the Plans and
Specifications, as such Plans and Specifications may be amended pursuant to the
Disbursement Agreement.
"Rents" means all rents, room revenues, income, receipts, issues,
profits, revenues and maintenance fees, room, food and beverage revenues,
license and concession fees, income, proceeds and other benefits to which
Trustor may now or hereafter be entitled from the Leased Premises, the
Improvements, the Space Leases or any property encumbered hereby or any business
or other activity conducted by Trustor at the Leased Premises or the
Improvements.
"Security Agreements" means (i) that certain Mall Construction
Security Agreement dated as of November 14, 1997 by and between Trustor, as
debtor, and The Bank of Nova Scotia, a Canadian chartered bank through its New
York Agency, as Intercreditor Agent under the Intercreditor Agreement for and on
behalf of (a) each agent and each Bank Lender (as defined in the Bank Credit
Agreement) under the Bank Credit Agreement and any Interest Rate Exchangers (as
defined in the Bank Credit Agreement), (b) GMAC Commercial Mortgage Corporation,
a California corporation, (c) Beneficiary, for and on behalf of the Mortgage
Note Holders under the Mortgage Notes Indenture, and (d) the Intercreditor Agent
and the Disbursement Agent; and (ii) that certain Borrower Security Agreement
dated as of November 14, 1997 by and among Venetian, LVSI and Trustor,
collectively as debtor, and The Bank of Nova Scotia, a Canadian chartered bank
through its New York Agency, as Intercreditor Agent under the Intercreditor
Agreement for and on behalf of (a) each agent and each Bank Lender under the
Bank Credit Agreement and any Interest Rate Exchangers, (b) GMAC Commercial
Mortgage Corporation, a California corporation, (c) Beneficiary for and on
behalf of the Mortgage Note Holders under the Mortgage Notes indenture and (d)
the Intercreditor Agent and the Disbursement Agent (referred to herein as the
"Company Security Agreement").
7
"Space Leases" means any and all leases, subleases, lettings,
licenses, concessions, operating agreements, management agreements, and all
other agreements affecting the Trust Estate, other than the Subject Leases, that
Trustor has entered into, taken by assignment, taken subject to, or assumed, or
has otherwise become bound by, now or in the future, that give any person the
right to conduct its business on, or otherwise use, operate or occupy, all or
any portion of the Leased Premises or Improvements and any leases, agreements or
arrangements permitting anyone to enter upon or use any of the Trust Estate to
extract or remove natural resources of any kind, together with all amendments,
extensions, and renewals of the foregoing entered into in compliance with this
Leasehold Deed of Trust, together with all rental, occupancy, service,
maintenance or any other similar agreements pertaining to use or occupation of,
or the rendering of services at the Leased Premises, the Improvements or any
part thereof.
"Space Lessee(s)" means any and all tenants, licensees, or other
grantees of the Space Leases and any and all guarantors, sureties, endorsers or
others having primary or secondary liability with respect to such Space Leases.
"Subject Leases" means the Mall Lease and the Billboard Master
Lease.
"Subordinate Deed of Trust" shall have the meaning ascribed thereto
in Section 1.9(b) of this Leasehold Deed of Trust.
"Tangible Collateral" means all personal property, goods, equipment,
supplies, building and other materials of every nature whatsoever and all other
tangible personal property constituting a part or portion of the Project and/or
used in the operation of the retail complex, restaurants, stores, parking
facilities, observation tower and all other commercial operations on the Leased
Premises or Improvements, including but not limited to communication systems,
visual and electronic surveillance systems and transportation systems and not
constituting a part of the real property subject to the real property lien of
this Leasehold Deed of Trust and including all property and materials stored
therein in which Trustor has an interest and all tools, utensils, food and
beverage, liquor, uniforms, linens, housekeeping and maintenance supplies,
vehicles, fuel, advertising and promotional material, blueprints, surveys, plans
and other documents relating to the Leased Premises or Improvements, and all
construction materials and all furnishings, fixtures and equipment, including,
but not limited to, all FF&E and all equipment and devices which are or are to
be installed and used in connection with the operation of the Project, those
items of furniture, fixtures and equipment which are to be purchased or leased
by Trustor, machinery and any other item of personal property in which Trustor
now or hereafter own or acquire an interest or right, and which are used or
useful in the construction, operation, use and occupancy of the Project and all
present and future right and interest of Trustor in and to any casino operator's
agreement, license agreement or sublease agreement used in connection with the
Leased Premises or the Improvements.
"Title Insurer" means Lawyers Title of Nevada, Inc., a Nevada
corporation, or an Affiliate thereof.
8
"Trust Estate" means all of the property described in Granting
Clauses (A) through (O) below, inclusive, and each item of property therein
described, provided, however, that such term shall not include the property
described in Granting Clause (P) below.
"UCC" means the Uniform Commercial Code in effect in the State of
Nevada from time to time, NRS chapters 104 and 104A.
The following terms shall have the meaning assigned to such terms in
the Disbursement Agreement:
Affiliate
Bank Credit Agreement
Bank Leasehold Deed of Trust
Billboard Master Lease
Casino Lease
Cooperation Agreement
Environmental Laws
Financing Agreements
Funding Agents
GCCLLC Permitted Encumbrance
Governmental Instrumentality
HVAC Component
HVAC Ground Lease
Intercreditor Agreement
Interim Mall Leasehold Deed of Trust
Mortgage Note Holders
Mortgage Notes Indenture Trustee
Nevada Gaming Laws
Operative Documents
Permitted Liens
Person
Plans and Specifications
Pre-Development Agreement
Security Documents
Subsidiary
The following terms shall have the meaning assigned to such terms in
the Mortgage Notes Indenture:
Bankruptcy Law
Business Day
Gaming License
Issuance Date
Lien
9
In addition, any capitalized terms used in this Leasehold Deed of Trust which
are not otherwise defined herein shall have the meaning ascribed to such terms
in the Disbursement Agreement and, if not defined therein, the meaning ascribed
to such terms in the Mortgage Notes Indenture.
W I T N E S S E T H:
IN CONSIDERATION OF TEN DOLLARS AND OTHER GOOD AND VALUABLE
CONSIDERATION; THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, AND
FOR THE PURPOSE OF SECURING in favor of Beneficiary (1) the due and punctual
payment of the indebtedness evidenced by the Notes; (2) the performance of each
covenant and agreement of Trustor contained in the Mortgage Notes Indenture,
herein, in the Mortgage Notes Indenture Security Documents, each other Security
Document granting a security interest for the benefit of the Beneficiary is a
party and the Disbursement Agreement; (3) the payment of such additional loans
or advances as hereafter may be made to Trustor (individually or jointly and
severally with any other Person) or its successors or assigns, when evidenced by
a promissory note or notes reciting that they are secured by this Deed of Trust;
provided, however, that any and all future advances by Beneficiary to Trustor
made for the improvement, protection or preservation of the Trust Estate,
together with interest at the Default Rate, shall be automatically secured
hereby unless such a note or instrument evidencing such advances specifically
recites that it is not intended to be secured hereby and (4) the payment of all
sums expended or advanced by Beneficiary under or pursuant to the terms hereof
or to protect the security hereof (including Protective Advances as such term is
defined in Section 4.2 hereof), together with interest thereon as herein
provided, Trustor, in consideration of the premises, and for the purposes
aforesaid, does hereby ASSIGN, BARGAIN, CONVEY, PLEDGE, RELEASE, HYPOTHECATE,
WARRANT, AND TRANSFER WITH POWER OF SALE UNTO TRUSTEE IN TRUST FOR THE BENEFIT
OF BENEFICIARY, AND THE MORTGAGE NOTE HOLDER(S) each of the following:
(A) The Leasehold Estate;
(B) TOGETHER WITH all the estate, right, title and interest of
Trustor of, in and to the Improvements;
(C) TOGETHER WITH all Appurtenant Rights;
(D) TOGETHER WITH all the estate, right, title and interest of
Trustor of, in and to the Tangible Collateral to the extent permitted by, or not
prohibited by, Nevada Gaming Laws and other applicable law;
(E) TOGETHER WITH the Intangible Collateral to the extent permitted
by, or not prohibited by, Nevada Gaming Laws and other applicable law;
10
(F) TOGETHER WITH (i) all the estate, right, title and interest of
Trustor of, in and to all judgments and decrees, insurance proceeds, awards of
damages and settlements hereafter made resulting from condemnation proceedings
or the taking of any of the property described in Granting Clauses (A), (B),
(C), (D) and (E) hereof or any part thereof under the power of eminent domain,
or for any damage (whether caused by such taking or otherwise) to the property
described in Granting Clauses (A), (B), (C), (D) and (E) hereof or any part
thereof, or to any Appurtenant Rights thereto, and Beneficiary is hereby
authorized to collect and receive said awards and proceeds and to give proper
receipts and acquittance therefor, and (subject to the terms hereof) to apply
the same toward the payment of the indebtedness and other sums secured hereby,
notwithstanding the fact that the amount owing thereon may not then be due and
payable; (ii) all proceeds of any sales or other dispositions of the property or
rights described in Granting Clauses (A), (B), (C), (D) and (E) hereof or any
part thereof whether voluntary or involuntary, provided, however, that the
foregoing shall not be deemed to permit such sales, transfers, or other
dispositions except as specifically permitted herein; and (iii) whether arising
from any voluntary or involuntary disposition of the property described in
Granting Clauses (A), (B), (C), (D) and (E), all Proceeds, products,
replacements, additions, substitutions, renewals and accessions, remainders,
reversions and after-acquired interest in, of and to such property;
(G) TOGETHER WITH the absolute assignment of any Space Leases
(except with respect to the absolute assignment of the Casino Lease which may be
subject to Nevada Gaming Laws and other applicable law) or any part thereof that
Trustor has entered into, taken by assignment, taken subject to, or assumed, or
has otherwise become bound by, now or in the future, together with all of the
following (including all "Cash Collateral" within the meaning of the Bankruptcy
Law) arising from the Space Leases: (a) Rents (subject, however, to the
aforesaid absolute assignment to Trustee for the benefit of Beneficiary and the
conditional permission hereinbelow given to Trustor to collect the Rents), (b)
all guarantees, letters of credit, security deposits, collateral, cash deposits,
and other credit enhancement documents, arrangements and other measures with
respect to the Space Leases, (c) all of Trustor's right, title, and interest
under the Space Leases, including the following: (i) the right to receive and
collect the Rents from the lessee, sublessee or licensee, or their successor(s),
under any Space Lease(s) and (ii) the right to enforce against any tenants
thereunder and otherwise any and all remedies under the Space Leases, including
Trustor's right to evict from possession any tenant thereunder or to retain,
apply, use, draw upon, pursue, enforce or realize upon any guaranty of any Space
Lease; to terminate, modify, or amend the Space Leases; to obtain possession of,
use, or occupy, any of the real or personal property subject to the Space
Leases; and to enforce or exercise, whether at law or in equity or by any other
means, all provisions of the Space Leases and all obligations of the tenants
thereunder based upon (A) any breach by such tenant under the applicable Space
Lease (including any claim that Trustor may have by reason of a termination,
rejection, or disaffirmance of such Space Lease pursuant to the Bankruptcy Law)
and (B) the use and occupancy of the premises demised, whether or not pursuant
to the applicable Space Lease (including any claim for use and occupancy arising
under landlord- tenant law of the State of Nevada or the Bankruptcy Law).
Permission is hereby given to Trustor, so long as no Event of Default has
occurred and is continuing hereunder, to collect and use the Rents, as they
become due and payable, but not more than one (1) month in advance thereof. Upon
the occurrence of an Event of Default, the permission hereby given to
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Trustor to collect the Rents shall automatically terminate, but such permission
shall be reinstated upon a cure of such Event of Default. Beneficiary shall have
the right, at any time and from time to time, to notify any Space Lessee of the
rights of Beneficiary as provided by this section;
Notwithstanding anything to the contrary contained herein, the
foregoing provisions of this Paragraph (G) shall not constitute an assignment
for purposes of security constitute an absolute and present assignment of the
Rents to Beneficiary (except with respect to the absolute and present assignment
of the Rents from the Casino Lease, which may be subject to the Nevada Gaming
Laws and other applicable law), subject, however, to the conditional license
given to Trustor to collect and use the Rents as hereinabove provided; and the
existence or exercise of such right of Trustor shall not operate to subordinate
this assignment to any subsequent assignment, in whole or in part, by Trustor;
(H) TOGETHER WITH all of Trustor's right, title and interest in and
to any and all Plans and Specifications and all maps, plans, specifications,
surveys, studies, tests, reports, data and drawings relating to the development
of the Leased Premises or the Project and the construction of the Improvements,
including, without limitation, all marketing plans, feasibility studies, soils
tests, design contracts and all contracts and agreements of Trustor relating
thereto including, without limitation, architectural, structural, mechanical and
engineering plans and specifications, studies, data and drawings prepared for or
relating to the development of the Leased Premises or the Project or the
construction, renovation or restoration of any of the Improvements or the
extraction of minerals, sand, gravel or other valuable substances from the
Leased Premises and purchase contracts or any agreement granting Trustor a right
to acquire any land situated within ▇▇▇▇▇ County, Nevada;
(I) TOGETHER WITH, to the extent permitted by applicable law, all of
Trustor's right, title, and interest in and to any and all licenses, permits,
variances, special permits, franchises, certificates, rulings, certifications,
validations, exemptions, filings, registrations, authorizations, consents,
approvals, waivers, orders, rights and agreements (including, without
limitation, options, option rights, contract rights now or hereafter obtained by
Trustor from any Governmental Instrumentality having or claiming jurisdiction
over the Leased Premises, the FF&E, the Project, or any other element of the
Trust Estate or providing access thereto, or the operation of any business on,
at, or from the Leased Premises including, without limitation, any liquor or
Gaming Licenses, (except for any registrations, licenses, findings of
suitability or approvals issued by the Nevada Gaming Authorities or any other
liquor or gaming licenses which are non-assignable); provided, that upon an
Event of Default hereunder or under the Mortgage Notes Indenture, if Beneficiary
is not qualified under the Nevada Gaming Laws to hold such Gaming Licenses, then
Beneficiary may designate an appropriately qualified third party to which an
assignment of such Gaming Licenses can be made in compliance with the Nevada
Gaming Laws;
(J) TOGETHER WITH all water stock, water permits and other water
rights relating to the Leased Premises;
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(K) TOGETHER WITH all oil and gas and other mineral rights, if any,
in or pertaining to the Leased Premises and all royalty, leasehold and other
rights of Trustor pertaining thereto;
(L) TOGETHER WITH any and all monies and other property, real or
personal, which may from time to time be subjected to the lien hereof by Trustor
or by anyone on its behalf or with its consent, or which may come into the
possession or be subject to the control of Trustee or Beneficiary pursuant to
this Leasehold Deed of Trust, any Mortgage Notes Indenture Security Document or
any other Security Document granting a security interest to the Beneficiary,
including, without limitation, any Protective Advances under this Leasehold Deed
of Trust; and all of Trustor's right, title, and interest in and to all
extensions, improvements, betterments, renewals, substitutes for and
replacements of, and all additions, accessions, and appurtenances to, any of the
foregoing that Trustor may subsequently acquire or obtain by any means, or
construct, assemble, or otherwise place on any of the Trust Estate, and all
conversions of any of the foregoing; it being the intention of Trustor that all
property hereafter acquired by Trustor and required by this Leasehold Deed of
Trust, any Mortgage Notes Indenture Security Document or any other Security
Document granting a security interest to the Beneficiary that is to be subject
to the lien of this Leasehold Deed of Trust or intended so to be shall forthwith
upon the acquisition thereof by Trustor be subject to the lien of this Leasehold
Deed of Trust as if such property were now owned by Trustor and were
specifically described in this Leasehold Deed of Trust and granted hereby or
pursuant hereto, and Trustee and Beneficiary are hereby authorized, subject to
Nevada Gaming Laws and other applicable laws, to receive any and all such
property as and for additional security for the obligations secured or intended
to be secured hereby. Trustor agrees to take any action as may reasonably be
necessary to evidence and perfect such liens or security interests, including,
without limitation, the execution of any documents necessary to evidence and
perfect such liens or security interests;
(M) TOGETHER WITH, to the extent permitted by applicable laws, any
and all Accounts Receivable and all royalties, earnings, income, proceeds,
products, rents, revenues, reversions, remainders, issues, profits, avails,
production payments, and other benefits directly or indirectly derived or
otherwise arising from any of the foregoing, all of which are hereby assigned to
Beneficiary, who, except as otherwise expressly provided in this Leasehold Deed
of Trust, is authorized, subject to the provisions of Section 1.13 hereof, to
collect and receive the same, to give receipts and acquittances therefor and to
apply the same to the Obligations secured hereunder, whether or not then due and
payable;
(N) TOGETHER WITH Proceeds of the foregoing property described in
Granting Clauses (A) through (M);
(O) TOGETHER WITH Trustor's rights further to assign, sell, lease,
encumber or otherwise transfer or dispose of the property described in Granting
Clauses (A) through (N) inclusive, above, for debt or otherwise; and
(P) EXPRESSLY EXCLUDING, HOWEVER, (i) FF&E and items described in
clause (2) of the definition of Improvements (to the extent that such FF&E and
items
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described in clause (2) of the definition of Improvements were financed through
an FF&E Financing Agreement which together with all other FF&E Financing
Agreements shall be in an aggregate amount not to exceed $100,000,000 and such
FF&E Financing Agreement prohibits the Beneficiary and the Mortgage Note
Holder(s) under the Mortgage Notes Indenture from maintaining a security
interest in the FF&E and items described in clause (2) of the definition of
Improvements covered thereby; (ii) any other assets expressly excluded from the
definition of "Note Collateral" in the Mortgage Notes Indenture, and (iii) the
HVAC Component.
Trustor, for itself and its successors and assigns, covenants and
agrees to and with Trustee that, at the time or times of the execution of and
delivery of these presents or any instrument of further assurance with respect
thereto, Trustor has good right, full power and lawful authority to assign,
grant, convey, warrant, transfer, bargain or sell its interests in the Trust
Estate in the manner and form as aforesaid, and that the Trust Estate is free
and clear of all liens and encumbrances whatsoever, except the Permitted Liens,
and Trustor shall warrant and forever defend the above-bargained property in the
quiet and peaceable possession of Trustee and its successors and assigns against
all and every person or persons lawfully or otherwise claiming or to claim the
whole or any part thereof, except for Permitted Liens. Trustor agrees that any
greater title to the Trust Estate hereafter acquired by Trustor during the term
hereof shall be automatically subject hereto.
ARTICLE ONE
COVENANTS OF TRUSTOR
The Mortgage Note Holder(s) have been induced to purchase the Notes on the
basis of the following material covenants, all agreed to by Trustor
1.1 Performance of Financing Agreements. Trustor shall perform, observe
and comply with each and every provision hereof, and with each and every
provision contained in the Financing Agreements and shall promptly pay to the
respective Funding Agents, when payment shall become due, the principal with
interest thereon and all other sums required to be paid by Trustor under this
Leasehold Deed of Trust and the other Financing Agreements.
1.2 Leasehold Estate. Trustor represents, covenants and warrants: (a) that
the Subject Leases are in full force and effect and unmodified; (b) Trustor will
defend the Leasehold Estate under each Subject Lease for the entire remainder of
the term set forth in each of the said Subject Leases against all and every
Person or Persons lawfully claiming, or who may claim the same or any part
thereof, subject to the payment of the rents in the Subject Lease reserved and
subject to the performance and observance of all of the terms, covenants,
conditions and warranties thereof; (c) that there is no uncured default under
any Subject Lease or in the performance of any of the terms, covenants,
conditions or warranties thereof on the part of the lessee to be observed and
performed and that no state of facts exist under a Subject Lease which, with the
lapse of time or giving of notice or both would constitute a default thereunder;
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1.3 General Representations, Covenants and Warranties. Trustor represents,
covenants and warrants that: (a) Trustor has a valid leasehold interest in the
Leased Premises, free and clear of all encumbrances except GCCLLC Permitted
Encumbrances, and that it has the right to hold, occupy and enjoy its interest
in the Trust Estate, and has good right, full power and lawful authority to
subject the Trust Estate to the Lien of this Leasehold Deed of Trust and pledge
the same as provided herein and Beneficiary may at all times peaceably and
quietly enter upon, hold, occupy and enjoy the entire Trust Estate in accordance
with the terms hereof; (b) Trustor is not Insolvent and no bankruptcy or
insolvency proceedings are pending or contemplated by or, to the best of
Trustor's knowledge, threatened against Trustor; (c) all costs arising from
construction of any Improvements, the performance of any labor and the purchase
of all Tangible Collateral and Improvements have been or shall be paid when due
(subject to the provisions of the Disbursement Agreement, the Mortgage Notes
Indenture and this Leasehold Deed of Trust); (d) the Leased Premises has
frontage on, and direct access for ingress and egress to dedicated street(s);
(e) Trustor shall at all times conduct and operate the Trust Estate in a manner
so as not to lose, or permit its affiliate to lose the right to conduct gaming
activities at the Project; (f) no material part of the Trust Estate has been
damaged, destroyed, condemned or abandoned, other than those portions of the
Trust Estate that have been the subject of condemnation proceedings that have
resulted in the conveyance of such portion of the Trust Estate to the Trustor;
(g) no part of the Trust Estate is the subject of condemnation proceedings,
other than condemnation proceedings to convey Leased Premises to the Trustor,
and Trustor has no knowledge of any contemplated or pending condemnation
proceeding with respect to any portion of the Trust Estate other than
condemnation proceedings to convey Leased Premises to the Trustor and other than
those proceedings set forth in Exhibit B attached hereto; and (h) Trustor
acknowledges and agrees that it presently uses, and has in the past used,
certain trade or fictitious names in connection with the operation of the
business at the Trust Estate, including the names listed on Exhibit C attached
hereto (all of the foregoing, collectively, the "Enumerated Names"). For all
purposes under this Leasehold Deed of Trust it shall be deemed that the term
"Trustor" includes, in addition to "Grand Canal Shops Mall Construction, LLC"
all trade or fictitious, names that Grand Canal Mall Shops Construction, LLC (or
any successor or assign thereof) now or hereafter uses, or has in the past used,
including, without limitation, the Enumerated Names, with the same force and
effect as if this Leasehold Deed of Trust had been executed in all such names
(in addition to "Grand Canal Mall Shops Construction, LLC").
1.4 Payment of Expenses of the Subject Leases. The Trustor shall pay or
cause to be paid on or prior to the date due all rents, additional rents and
other Impositions payable by the lessee under the Subject Leases for which
provision has not been made hereinbefore, when and as often as the same shall
become due and payable and the share of all amounts payable under the
Cooperation Agreement allocable to the Leased Premises. Trustor will in every
case deliver, or cause to be delivered, proper receipts for any such item so
paid and will within ten (10) days after the time when such payment shall be due
and payable deliver to the Beneficiary, a copy of the receipts for any such
payments.
1.5 Trustor's Covenants with Respect to the Subject Leases.
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a. The Trustor shall at all times promptly and faithfully keep and
perform, or cause to be kept and performed, all the covenants and conditions
contained in the Subject Leases to be kept and performed by the lessee under the
Subject Leases and in all respects conform to and comply with the terms and
conditions of the Subject Leases. The Trustor further covenants that it shall
not do or permit anything to occur or omit to occur which will impair or tend to
impair the security of this Leasehold Deed of Trust or will be grounds for
declaring a forfeiture of either Subject Lease, and upon any such failure
aforesaid, Trustor shall be subject to all of the rights and remedies granted
Beneficiary in this Leasehold Deed of Trust.
b. Trustor shall not modify, extend or in any way alter the terms of the
Subject Leases or cancel or surrender said Subject Leases, or waive, execute,
condone or in any way release or discharge the applicable lessor thereunder of
or from the obligations, covenants, conditions and agreements by the applicable
lessor to be done and performed; and Trustor does expressly release, relinquish
and surrender unto Beneficiary all of its rights, power and authority to cancel,
surrender, amend, modify or alter in any way the terms and provisions of the
Subject Leases and any attempt on the part of Trustor to exercise any such right
without the written approval and consent of Beneficiary thereto being first had
and obtained shall constitute an Event of Default under the terms hereof and the
Notes and all indebtedness or sums secured hereby shall, at the option of
Beneficiary, become due and payable forthwith and without notice.
c. The Notes and all indebtedness of Trustor to Beneficiary secured hereby
shall immediately become due and payable at the option of Beneficiary, if
Trustor fails to give Beneficiary immediate notice of any default under the
Subject Leases or of the receipt by it of any notice of default from the lessor
thereunder, or if Trustor fails to furnish to Beneficiary immediately any and
all information which it may request concerning the performance by Trustor of
the covenants of the Subject Leases, or if Trustor fails to permit Beneficiary
or its representative at all reasonable times to make investigation or
examination concerning the performance by Beneficiary of the covenants of the
Subject Leases, or if Trustor fails to permit Beneficiary or its representative
at all reasonable times to make investigation or examination concerning such
performance. Trustor shall deliver to Beneficiary an original executed copy of
each Subject Lease, an estoppel certificate from the applicable lessor within
ten (10) days of request by Beneficiary and in such form and content as shall be
satisfactory to Beneficiary, as well as any and all documentary evidence
received by it showing compliance by Trustor with the provisions of the Subject
Leases.
d. In the event of any failure by Trustor to perform any covenant on the
part of lessee to be observed and performed under the Subject Leases, the
performance by Beneficiary on behalf of Trustor of the applicable Subject Lease
covenant shall not remove or waive, as between Trustor and Beneficiary, the
corresponding Event of Default under the terms hereof and any amount so advanced
by Beneficiary or any costs incurred in connection therewith, with interest
thereon at the Default Rate shall constitute additional indebtedness secured
hereby and be immediately due and payable.
e. To the extent permitted by law, the price payable by Trustor, or by any
other party so entitled, in the exercise of the right of redemption, if any,
shall include all rents paid
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and other sums advanced by Beneficiary, on behalf of Trustor, as lessee under
the Subject Leases.
1.6 Compliance with Legal Requirements. Trustor shall promptly, fully, and
faithfully comply in all material respects with all Legal Requirements and shall
cause all portions of the Trust Estate and its use and occupancy to fully comply
in all material respects with Legal Requirements at all times, whether or not
such compliance requires work or remedial measures that are ordinary or
extraordinary, foreseen or unforeseen, structural or nonstructural, or that
interfere with the use or enjoyment of the Trust Estate.
1.7 Taxes. Except as otherwise permitted by Section 4.05 of the Mortgage
Notes Indenture and Section 4.10 of the Disbursement Agreement, (a) Trustor
shall pay all Impositions as they become due and payable and shall deliver to
Beneficiary promptly upon Beneficiary's request, evidence satisfactory to
Beneficiary that the Impositions have been paid or are not delinquent; (b)
Trustor shall not suffer to exist, permit or initiate the joint assessment of
the real and personal property, or any other procedure whereby the lien of the
real property taxes and the lien of the personal property taxes shall be
assessed, levied or charged to the Leased Premises as a single lien, except as
may be required by law; and (c) in the event of the passage of any law deducting
from the value of real property for the purposes of taxation any lien thereon,
or changing in any way the taxation of deeds of trust or obligations secured
thereby for state or local purposes, or the manner of collecting such taxes and
imposing a tax, either directly or indirectly, on this Leasehold Deed of Trust
or the Notes, Trustor shall pay all such taxes and all payments required with
respect to taxes pursuant to the terms of the Cooperation Agreement (including,
without limitation, Article VI thereof).
1.8 Insurance.
(a) Hazard Insurance Requirements and Proceeds.
(1) Hazard Insurance. Trustor shall at its sole expense obtain
for, deliver to, assign and maintain for the benefit of Beneficiary, during the
term of this Leasehold Deed of Trust, insurance policies insuring the Trust
Estate and liability insurance policies, all in accordance with the requirements
of Section 4.20 of the Mortgage Notes Indenture, Section 5.19 of the
Disbursement Agreement, while in effect, and Article X of the Cooperation
Agreement. Trustor shall pay promptly when due any premiums on such insurance
policies and on any renewals thereof and all payments required with respect to
the procurement of insurance pursuant to the terms of the Cooperation Agreement
(including, without limitation, Article VI thereof). In the event of the
foreclosure of this Leasehold Deed of Trust or any other transfer of title to
the Trust Estate in partial or complete extinguishment of the indebtedness and
other sums secured hereby, all right, title and interest of Beneficiary in and
to all insurance policies and renewals thereof then in force shall pass to the
purchaser or grantee.
(2) Handling of Proceeds. All Proceeds from any insurance
policies shall be collected, held, handled and disbursed in accordance with the
provisions of Section 5.20 of the Disbursement Agreement, while in effect, and
thereafter in accordance with Articles X and
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XI of the Cooperation Agreement. Beneficiary shall have the right to apply
toward payment of all Obligations (to the extent then due and payable) any
insurance proceeds which (a) arise out of damage to property of the Trustor
(including without limitation any insurance proceeds recovered under the
policies of insurance maintained pursuant to Article X Section 2(A)(iv), (v) or
(vi) or Article X Section 2(B)(v) or (vi) of the Cooperation Agreement), (b) are
allocable to Trustor, and (c) are not required to be applied toward restoration
of the improvements on the Leased Premises pursuant to the terms of the
Cooperation Agreement. All proceeds of insurance allocable to Trustor, as lessee
of the Leased Premises and owner of the Improvements, and attributable to
business interruption insurance shall be collected, held, handled and disbursed
in accordance with the provisions of Section 5.20 of the Disbursement Agreement,
while in effect, and thereafter, in accordance with the Cooperation Agreement.
Any such proceeds disbursed to Beneficiary shall be applied to pay amounts then
due and payable under this Leasehold Deed of Trust. The balance shall be
retained by Beneficiary or its designee in an interest bearing or other
investment account approved by Beneficiary, which account Trustor hereby pledges
to Beneficiary to secure the Obligations. Disbursements shall be permitted from
such account to pay expenses reasonably incurred by Trustor in owning and
operating the Trust Estate, as reasonably approved by Beneficiary.
(b) Compliance with Insurance Policies. Trustor shall not violate or
permit to be violated any of the conditions or provisions of any policy of
insurance required by the Mortgage Notes Indenture, the Disbursement Agreement
(while in effect), the Cooperation Agreement or this Leasehold Deed of Trust and
Trustor shall so perform and satisfy the requirements of the companies writing
such policies that, at all times, companies of good standing shall be willing to
write and/or continue such insurance. Trustor further covenants to promptly send
to Beneficiary all notices relating to any violation of such policies or
otherwise affecting Trustor's insurance coverage or ability to obtain and
maintain such insurance coverage.
1.9 Condemnation. Beneficiary is hereby authorized, at its option, to
commence, appear in and prosecute in its own or Trustor's name any action or
proceeding relating to any condemnation and, subject to Article XII of the
Cooperation Agreement, to settle or compromise any claim in connection
therewith, and Trustor hereby appoints Beneficiary as its attorney-in-fact to
take any action in Trustor's name pursuant to Beneficiary's rights hereunder.
Immediately upon obtaining knowledge of the institution of any proceedings for
the condemnation of the Trust Estate, or any portion thereof, Trustor shall
notify the Trustee and Beneficiary of the pendency of such proceedings. Trustor
from time to time shall execute and deliver to Beneficiary all instruments
requested by it to permit such participation; provided, however, that such
instruments shall be deemed as supplemental to the foregoing grant of permission
to Trustee and Beneficiary, and unless otherwise required, the foregoing
permission shall, without more, be deemed sufficient to permit Trustee and/or
Beneficiary to participate in such proceedings on behalf of Trustor. All such
compensation awards, damages, claims, rights of action and Proceeds, and any
other payments or relief, and the right thereto, are, whether paid to
Beneficiary or Trustor or a third party trustee, included in the Trust Estate.
Beneficiary, after deducting therefrom all its expenses, including reasonable
attorneys fees, shall apply all Proceeds paid directly to it in accordance with
the provisions of Section 4.11 of the Mortgage Notes Indenture. All such
Proceeds paid directly to the Trustor shall be
18
applied by Trustor in accordance with Section 5.20 of the Disbursement
Agreement, while in effect, and thereafter in accordance with Article XII of the
Cooperation Agreement. To the extent that any condemnation proceeds are not
required to be applied towards restoration of the Improvements, then Beneficiary
shall have the right to apply said condemnation proceeds to the Obligations.
Trustor hereby waives any rights it may have under NRS 37.115, as amended or
recodified from time to time.
1.10 Care of Trust Estate.
(a) Trustor shall preserve and maintain the Trust Estate in good
condition and repair. Trustor shall not permit, commit or suffer to exist any
waste, impairment or deterioration of the Trust Estate or of any part thereof
that in any manner materially impairs Beneficiary's security hereunder and shall
not take any action which will materially increase the risk of fire or other
hazard to the Trust Estate or to any part thereof.
(b) Except for Permitted Dispositions, no material part of the
Improvements or Tangible Collateral that are part of the Trust Estate shall be
removed, demolished or materially altered, without the prior written consent of
Beneficiary, which consent shall not be unreasonably withheld or delayed.
Trustor shall have the right, without such consent, to remove and dispose of
free from the lien of this Leasehold Deed of Trust any part of the Improvements
or Tangible Collateral that are part of the Trust Estate as from time to time
may become worn out or obsolete or otherwise not useful in connection with the
operation of the Trust Estate, provided that either (i) such removal or
disposition does not materially affect the value of the Trust Estate or (ii)
prior to or promptly following such removal, any such property shall be replaced
with other property of substantially equal utility and of a value at least
substantially equal to that of the replaced property when first acquired and
free from any security interest of any other person (subject only to Permitted
Liens), and by such removal and replacement Trustor shall be deemed to have
subjected such replacement property to the lien of this Leasehold Deed of Trust.
(c) Notwithstanding the foregoing provisions of this Section 1.7,
the Trustor may develop the Project in the manner contemplated by the Plans and
Specifications and in accordance with the Mortgage Notes indenture and the other
Financing Agreements and the Cooperation Agreement.
1.11 Leases
(a) Trustor represents and warrants that:
(i) Trustor has delivered to Beneficiary true, correct and
complete copies of all Space Leases, including all amendments and modifications,
written or oral existing as of the Issuance Date;
(ii) Trustor has not executed or entered into any
modifications or amendments of the Space Leases, either orally or in writing,
other than written amendments that have been disclosed to Beneficiary in
writing;
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(iii) to Trustor's knowledge, no default now exists under any
Space Lease;
(iv) to Trustor's knowledge, no event has occurred that, with
the giving of notice or the passage of time or both, would constitute such a
default or would entitle Trustor or any other party under such Space Lease to
cancel the same or otherwise avoid its obligations;
(v) Trustor has not accepted prepayments of installments of
Rent under any Space Leases, except for installment payments not in excess of
one month's Rent and security deposits;
(vi) except for the assignment effected hereby and in the
other Financing Agreements, Trustor has not executed any assignment or pledge of
any of Space Leases, the Rents, or of Trustor's right, title and interest in the
same; and
(vii) this Leasehold Deed of Trust does not constitute a
violation or default under any Space Lease, and is and shall at all times
constitute a valid lien on Trustor's interests in the Space Leases.
(b) Trustor shall not enter into any Lease Transaction unless such
Lease Transaction complies with the requirements of Section 4.24 of the Mortgage
Notes Indenture.
(c) After an Event of Default, Trustor shall deliver to Beneficiary
the executed originals of all Space Leases.
1.12 Further Encumbrance.
(a) Trustor covenants that at all times prior to the discharge of
the Mortgage Notes Indenture and the Notes, except for Permitted Liens and
Permitted Dispositions, Trustor shall neither make nor suffer to exist, nor
enter into any agreement for, any sale, assignment, exchange, mortgage,
transfer, Lien, hypothecation or encumbrance of all or any part of the Trust
Estate, including, without limitation, the Rents. As used herein, "transfer"
includes the actual transfer or other disposition, whether voluntary or
involuntary, by law, or otherwise, except those transfers specifically permitted
herein, provided, however, that "transfer" shall not include the granting of
utility or other beneficial easements with respect to the Trust Estate which
have been or are granted by Trustor and are reasonably necessary to the
construction, maintenance or operation of the Project.
(b) Any Permitted Lien consisting of the lien of a deed of trust
which is junior to the lien of the Mortgage Notes Indenture Security Documents,
or any other Security Document granting a security interest for the benefit of
the Mortgage Notes Indenture Trustee (a "Subordinate Deed of Trust") shall be
permitted hereunder so long as there shall have been delivered to Beneficiary,
not less than thirty (30) days prior to the date thereof, a copy thereof which
shall contain express covenants in form and substance satisfactory to
Beneficiary to the effect that: (i) the Subordinate Deed of Trust is in all
respects subject and subordinate
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to this Leasehold Deed of Trust; (ii) if any action or proceeding shall be
brought to foreclose the Subordinate Deed of Trust (regardless of whether the
same is a judicial proceeding or pursuant to a power of sale contained therein),
no tenant of any portion of the Trust Estate shall be named as a party defendant
nor shall any action be taken with respect to the Trust Estate which would
terminate any occupancy or tenancy of the Trust Estate, or any portion thereof,
without the consent of Beneficiary; (iii) any Rents, if collected through a
receiver or by the holder of the Subordinate Deed of Trust, shall be applied
first to the obligations secured by this Leasehold Deed of Trust, including
principal and interest due and owing on or to become due and owing on the Notes,
and then to the payment of maintenance expenses, operating charges, taxes,
assessments, and disbursements incurred in connection with the ownership,
operation, and maintenance of the Trust Estate; and (iv) if any action or
proceeding shall be brought to foreclose the Subordinate Deed of Trust, prompt
notice of the commencement thereof shall be given to Beneficiary.
(c) Trustor agrees that in the event the ownership of the Trust
Estate or any part thereof becomes vested in a person other than Trustor,
Beneficiary may, without notice to Trustor, deal in any way with such successor
or successors in interest with reference to this Leasehold Deed of Trust, the
Notes and other Obligations hereby secured without in any way vitiating or
discharging Trustor's or any guarantor's, surety's or endorser's liability
hereunder or upon the obligations hereby secured. No sale of the Trust Estate
and no forbearance to any person with respect to this Leasehold Deed of Trust
and no extension to any person of the time for payment of the Notes, and other
sums hereby secured given by Beneficiary shall operate to release, discharge,
modify, change or affect the original liability of Trustor, or such guarantor,
surety or endorser either in whole or in part.
(d) Trustor covenants and agrees to comply with all of the terms and
conditions set forth in any FF&E Financing Agreement. If Trustor shall fail to
make any payment required to be made by it under any FF&E Financing Agreement,
except where Trustor is contesting such payment in good faith, then the
Beneficiary shall be entitled to make such payment on Trustor's behalf and any
and all sums so expended by the Beneficiary shall be secured by this Leasehold
Deed of Trust and shall be repaid by Trustor upon demand, together with interest
thereon at the Default Rate from the date of advance.
1.13 Partial Releases of Trust Estate.
(a) Trustor may from time to time make a Permitted Disposition
including, but not limited to, (i) transferring a portion of the Trust Estate
(including any temporary taking) to any person legally empowered to exercise the
power of eminent domain, (ii) granting utility easements reasonably necessary or
desirable for the construction and/or operation of the Project, which grant or
transfer is for the benefit of the Trust Estate, or (iii) transferring a portion
of the Trust Estate as permitted pursuant to Sections 5.16 (b), (c) and (d) of
the Disbursement Agreement. In each such case, Beneficiary shall execute and
deliver any instruments necessary or appropriate to effectuate or confirm any
such transfer or grant, free from the lien of this Leasehold Deed of Trust,
provided, however, that Beneficiary shall execute a lien release or
subordination agreement, as appropriate, for matters described in clauses (i)
and (iii) above only if:
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(A) Beneficiary and Trustee shall have received an Officer's
Certificate if required by Section 4.10 of the Mortgage Notes Indenture;
(B) Such transfer, grant or release is not prohibited by the
Mortgage Notes Indenture and all conditions precedent contained in the
Mortgage Notes Indenture for such transfer, grant or release, if any,
shall have been satisfied;
(C) Beneficiary and Trustee shall have received a counterpart
of the instrument pursuant to which such transfer, grant or release is to
be made, and each instrument which Beneficiary or Trustee is requested to
execute in order to effectuate or confirm such transfer, grant or release;
(D) In the case of a transfer to a Person legally empowered to
exercise the power of eminent domain, which transfer involves property
whose value is greater than $5,000,000, Beneficiary and Trustee shall have
received an opinion of counsel, who may be counsel to Trustor, to the
effect that the assignee or grantee of the portion of the Trust Estate
being transferred is legally empowered to take such portion under the
power of eminent domain; and
(E) Beneficiary and Trustee shall have received such other
instruments, certificates (including evidence of authority) and opinions
as Beneficiary or Trustee may reasonably request, including, but not
limited to, opinions that the proposed release is permitted by this
Section 1.10.
(b) Any consideration received for a transfer to any person
empowered to exercise the right of eminent domain shall be subject to Section
1.9 hereof.
1.14 Further Assurances.
(a) At its sole cost and without expense to Trustee or Beneficiary,
and subject in all events to compliance with Nevada Gaming Laws and other
applicable Legal Requirements, Trustor shall do, execute, acknowledge and
deliver any and all such further acts, deeds, conveyances, notices, requests for
notices, financing statements, continuation statements, certificates,
assignments, notices of assignments, agreements, instruments and further
assurances, and shall ▇▇▇▇ any chattel paper, deliver any chattel paper or
instruments to Beneficiary and take any other actions that are necessary,
prudent, or reasonably requested by Beneficiary or Trustee to perfect or
continue the perfection and first priority of Beneficiary's security interest in
the Trust Estate, to protect the Trust Estate against the rights, claims, or
interests of third persons other than holders of Permitted Liens or to effect
the purposes of this Leasehold Deed of Trust, including the security agreement
and the absolute assignment of Rents contained herein, or for the filing,
registering or recording thereof.
(b) Trustor shall forthwith upon the execution and delivery of this
Leasehold Deed of Trust, and thereafter from time to time, cause this Leasehold
Deed of Trust and each instrument of further assurance to be filed, indexed,
registered, recorded, given or delivered in such manner and in such places as
may be required by any present or future law in order to
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publish notice of and fully to protect the lien hereof upon, and the title of
Trustee and/or Beneficiary to, the Trust Estate.
(c) Upon any modification of the boundaries of the leased premises
pursuant to the Cooperation Agreement, Trustor, at Trustor's expense, shall
notify Beneficiary and amend this Leasehold Deed of Trust to reflect an accurate
description of the Leased Premises. In connection therewith, Trustor shall
provide Beneficiary with such title insurance endorsements to Beneficiary's
title policy as Beneficiary may reasonably request.
1.15 Security Agreement and Financing Statements. Trustor (as debtor)
hereby grants to Beneficiary (as creditor and secured party) a present and
future security interest in all Tangible Collateral, Intangible Collateral, FF&E
(to the extent Beneficiary is not prohibited, in each applicable FF&E Financing
Agreement, to maintain a security interest therein), Improvements (to the
extent, in the case of Improvements described in clause (2) of the definition
thereof, that Beneficiary is not prohibited in each applicable FF&E Financing
Agreement covering such Improvements, to maintain a security interest therein),
all other personal property now or hereafter owned or leased by Trustor or in
which Trustor has or will have any interest, to the extent that such property
constitutes a part of the Trust Estate (whether or not such items are stored on
the premises or elsewhere), Proceeds of the foregoing comprising a portion of
the Trust Estate and all proceeds of insurance policies and consideration awards
arising therefrom and all proceeds, products, substitutions, and accessions
therefor and thereto, subject to Beneficiary's rights to treat such property as
real property as herein provided (collectively, the "Personal Property").
Trustor shall execute any and all documents and writings, including without
limitation financing statements pursuant to the UCC, as may be necessary or
prudent to preserve and maintain the priority of the security interest granted
hereby on property which may be deemed subject to the foregoing security
agreement or as Beneficiary may reasonably request, and shall pay to Beneficiary
on demand any reasonable expenses incurred by Beneficiary in connection with the
preparation, execution and filing of any such documents. Trustor hereby
authorizes and empowers Beneficiary to execute and file, on Trustor's behalf,
all financing statements and refiling and continuations thereof as advisable to
create, preserve and protect said security interest. This Leasehold Deed of
Trust constitutes both a real property deed of trust and a "security agreement,"
within the meaning of the UCC, and the Trust Estate includes both real and
personal property and all other rights and interests, whether tangible or
intangible in nature, of Trustor in the Trust Estate. Trustor by executing and
delivering this Leasehold Deed of Trust has granted to Beneficiary, as security
of the Obligations, a security interest in the Trust Estate.
(a) Fixture Filing. Without in any way limiting the generality of
the immediately preceding paragraph or of the definition of the Trust Estate,
this Leasehold Deed of Trust constitutes a fixture filing under Sections 9-313
and 9-402 of the UCC (NRS 104.9313 and NRS 104.9402). For such purposes, (i) the
"debtor" is Trustor and its address is the address given for it in the initial
paragraph of this Leasehold Deed of Trust; (ii) the "secured party" is
Beneficiary, and its address for the purpose of obtaining information is the
address given for it in Section 6.2 of this Leasehold Deed of Trust; (iii) the
real estate to which the fixtures are or are to become attached is Trustor's
interest in the Leased Premises; and (iv) the record owner of such real estate
is Venetian.
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(b) Remedies. This Leasehold Deed of Trust shall be deemed a
security agreement as defined in the UCC and the remedies for any violation of
the covenants, terms and conditions of the agreements herein contained shall
include any or all of (i) those prescribed herein, and (ii) those available
under applicable law, and (iii) those available under the UCC, all at
Beneficiary's sole election. In addition, a photographic or other reproduction
of this Leasehold Deed of Trust shall be sufficient as a financing statement for
filing wherever filing may be necessary to perfect or continue the security
interest granted herein.
(c) Derogation of Real Property. It is the intention of the parties
that the filing of a financing statement in the records normally having to do
with personal property shall never be construed as in anyway derogating from or
impairing the express declaration and intention of the parties hereto as
hereinabove stated that everything used in connection with the production of
income from the Trust Estate and/or adapted for use therein and/or which is
described or reflected in this Leasehold Deed of Trust is, and at all times and
for all purposes and in all proceedings both legal or equitable, shall be
regarded as part of the real property encumbered by this Leasehold Deed of Trust
irrespective of whether (i) any such item is physically attached to the
Improvements, (ii) serial numbers are used for the better identification of
certain equipment items capable of being thus identified in a recital contained
herein or in any list filed with Beneficiary, or (iii) any such item is referred
to or reflected in any such financing statement so filed at any time. It is the
intention of the parties that the mention in any such financing statement of (1)
rights in or to the proceeds of any fire and/or hazard insurance policy, or (2)
any award in eminent domain proceedings for a taking or for loss of value, or
(3) Trustor's interest as lessors in any present or future Space Lease or rights
to Rents, shall never be construed as in anyway altering any of the rights of
Beneficiary as determined by this Leasehold Deed of Trust or impugning the
priority of Beneficiary's real property lien granted hereby or by any other
recorded document, but such mention in the financing statement is declared to be
for the protection of Beneficiary in the event any court or judge shall at any
time hold with respect to the matters set forth in the foregoing clauses (1),
(2) and (3) that notice of Beneficiary's priority of interest to be effective
against a particular class of persons, including but not limited to, the federal
government and any subdivisions or entity of the federal government, must be
filed in the UCC records.
(d) Priority; Permitted Financing of Tangible Collateral. All
Personal Property of any nature whatsoever which is subject to the provisions of
this security agreement shall be purchased or obtained by Trustor in its name
and free and clear of any lien or encumbrance, except for Permitted Liens and
the lien hereof, for use only in connection with the business and operation of
the Project, and shall be and at all times remain free and clear of any lease or
similar arrangement, chattel financing, installment sale agreement, security
agreement and any encumbrance of like kind, so that Beneficiary's security
interest shall attach to and vest in Trustor for the benefit of Beneficiary,
with the priority herein specified, immediately upon the installation or use of
the Personal Property at the Leased Premises and Trustor warrants and represents
that Beneficiary's security interest in the Personal Property is a validly
attached and binding security interest, properly perfected and prior to all
other security interests therein except as otherwise permitted in this Leasehold
Deed of Trust. The foregoing shall not be construed as limiting Trustor's rights
to transfer Personal Property
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pursuant to Permitted Dispositions or to obtain releases of Personal Property
from the Lien of this Leasehold Deed of Trust pursuant to Section 1.13 hereof.
(e) Preservation of Contractual Rights of Collateral. Trustor shall,
prior to delinquency, default, or forfeiture, perform all obligations and
satisfy all material conditions required on its part to be satisfied to preserve
its rights and privileges under any contract, lease, license, permit, or other
authorization (i) under which it holds any Tangible Collateral or (ii) which
constitutes part of the Intangible Collateral, except where Trustor is
contesting such obligations in good faith.
(f) Removal of Collateral. Except as permitted in the Disbursement
Agreement (while in effect), and except for damaged or obsolete Tangible
Collateral which is either no longer usable or which is removed temporarily for
repair or improvement or removed for replacement on the Trust Estate with
Tangible Collateral of similar function or as otherwise permitted herein, none
of the Tangible Collateral shall be removed from the Trust Estate without
Beneficiary's prior written consent.
(g) Change of Name. Trustor shall not change its corporate or
business name, or do business within the State of Nevada under any name other
than such name, or any trade name(s) other than those as to which Trustor gives
prior written notice to Beneficiary of its intent to use such trade names, or
any other business names (if any) specified in the financing statements
delivered to Beneficiary for filing in connection with the execution hereof,
without providing Beneficiary with the additional financing statement(s) and any
other similar documents deemed reasonably necessary by Beneficiary to assure
that its security interest remains perfected and of undiminished priority in all
such Personal Property notwithstanding such name change.
1.16 Assignment of Rents and Leases. The assignment of Rents and Leases
set out above in Granting Clause (G) shall constitute an absolute and present
assignment to Beneficiary, subject to the license herein given to Trustor to
collect the Rents, and shall be fully operative without any further action on
the part of any party, and specifically Beneficiary shall be entitled upon the
occurrence of an Event of Default hereunder to all Rents and to enter into the
Leased Premises and the Improvements to collect all such Rents, provided,
however, that Beneficiary shall not be obligated to take possession of the Trust
Estate, or any portion thereof. The absolute assignment contained in Granting
Clause (G) shall not be deemed to impose upon Beneficiary any of the obligations
or duties of Trustor provided in any such Space Lease (including, without
limitation, any liability under the covenant of quiet enjoyment contained in any
lease in the event that any lessee shall have been joined as a party defendant
in any action to foreclose this Leasehold Deed of Trust and shall have been
barred and foreclosed thereby of all right, title and interest and equity of
redemption in the Trust Estate or any part thereof).
1.17 Expenses.
(a) Trustor shall pay when due and payable all costs, including
without limitation, those reasonable appraisal fees, recording fees, taxes,
abstract fees, title policy fees,
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escrow fees, attorneys' and paralegal fees, travel expenses, fees for inspecting
architect(s) and engineer(s) and all other reasonable costs and expenses of
every character which may hereafter be incurred by Beneficiary or any assignee
of Beneficiary in connection with the preparation and execution of amendments to
the Mortgage Notes Indenture and the Mortgage Notes Indenture Security
Documents, amendments thereto or instruments, agreements or documents of further
assurance, the funding of the indebtedness secured hereby, and the enforcement
of any Mortgage Notes Indenture Security Document; and
(b) Trustor shall, upon demand by Beneficiary, reimburse Beneficiary
or any assignee of Beneficiary for all such reasonable expenses which have been
incurred or which shall be incurred by it; and
(c) Trustor shall indemnify Beneficiary with respect to any
transaction or matter in any way connected with any portion of the Trust Estate,
this Leasehold Deed of Trust, including any occurrence at, in, on, upon or about
the Trust Estate (including any personal injury, loss of life, or property
damage), or Trustor's use, occupancy, or operation of the Trust Estate, or the
filing or enforcement of any mechanic's lien, or otherwise caused in whole or in
part by any act, omission or negligence occurring on or at the Trust Estate,
including failure to comply with any Legal Requirement or with any requirement
of this Leasehold Deed of Trust that applies to Trustor, except to the extent
resulting from the gross negligence, fraud or willful misconduct of Trustee or
Beneficiary. If Beneficiary is a party to any litigation as to which either
Trustor is required to indemnify Beneficiary (or is made a defendant in any
action of any kind against Trustor or relating directly or indirectly to any
portion of the Trust Estate) then, at Beneficiary's option, Trustor shall
undertake Beneficiary's defense, using counsel reasonably satisfactory to
Beneficiary (and any settlement shall be subject to Beneficiary's consent, which
consent shall not be unreasonably withheld) and in any case shall indemnify
Beneficiary against such litigation. Trustor shall pay all reasonable costs and
expenses, including reasonable legal costs, that Beneficiary pays or incurs in
connection with any such litigation. Any amount payable under any indemnity in
this Leasehold Deed of Trust shall be a demand obligation, shall be added to,
and become a part of, the secured obligations under this Leasehold Deed of
Trust, shall be secured by this Leasehold Deed of Trust, and shall bear interest
at the interest rate specified in the Mortgage Notes Indenture. Such indemnity
shall survive any release of this Leasehold Deed of Trust and any foreclosure.
1.18 Beneficiary's Cure of Trustor's Default. If Trustor defaults
hereunder in the payment of any tax, assessment, lien, encumbrance or other
Imposition, in its obligation to furnish insurance hereunder, or in the
performance or observance of any other covenant, condition or term of this
Leasehold Deed of Trust or any other Financing Agreement or the Cooperation
Agreement or any FF&E Financing Agreement, Beneficiary may, but is not obligated
to, to preserve its interest in the Trust Estate, perform or observe the same,
and all payments made (whether such payments are regular or accelerated
payments) and reasonable costs and expenses incurred or paid by Beneficiary in
connection therewith shall become due and payable immediately. The amounts so
incurred or paid by Beneficiary, together with interest thereon at the Default
Rate from the date incurred until paid by Trustor, shall be added to the
indebtedness and secured by the lien of this Leasehold Deed of Trust.
Beneficiary is hereby empowered to enter and to authorize others to enter upon
the Leased Premises or any
26
part thereof for the purpose of performing or observing any such defaulted
covenant, condition or term, without thereby becoming liable to Trustor or any
person in possession holding under Trustor. No exercise of any rights under this
Section 1.18 by Beneficiary shall cure or waive any Event of Default or notice
of default hereunder or invalidate any act done pursuant hereto or to any such
notice, but shall be cumulative of all other rights and remedies.
1.19 Use of Leased Premises. Trustor covenants that the Trust Estate shall
be (i) used and operated in a manner reasonably consistent with the description
of the Project in the Cooperation Agreement and (ii) open during such days and
hours as are customarily observed by retail shopping malls located in Las Vegas,
Nevada, reasonably consistent with the provisions of the Cooperation Agreement
(including those provisions thereof that permit the Project not to be opened).
1.20 Compliance with Permitted Lien Agreements. Trustor or any Affiliate
of Trustor shall comply with each and every material obligation contained in any
agreement pertaining to a material Permitted Lien, including, without
limitation, any obligations set forth in the Cooperation Agreement, the HVAC
Ground Lease or the Mall Lease, to the extent applying to the owner of all or
any part of the Trust Estate.
1.21 Defense of Actions. Trustor shall appear in and defend any action or
proceeding affecting or purporting to affect the security hereof or the rights
or powers of Beneficiary or Trustee, and shall pay all costs and expenses,
including cost of title search and insurance or other evidence of title,
preparation of survey, and reasonable attorneys' fees in any such action or
proceeding in which Beneficiary or Trustee may appear or may be joined as a
party and in any suit brought by Beneficiary based upon or in connection with
this Leasehold Deed of Trust or any Mortgage Notes Indenture Security Document.
Nothing contained in this section shall, however, limit the right of Beneficiary
to appear in such action or proceeding with counsel of its own choice, either on
its own behalf or on behalf of Trustor.
1.22 Affiliates.
(a) Subject to Trust Deed. Subject to compliance with requirements
of applicable Nevada Gaming Laws, Trustor shall cause all of its Affiliates in
any way involved with the operation of the Trust Estate or the Project to
observe the covenants and conditions of this Leasehold Deed of Trust to the
extent necessary to give the full intended effect to such covenants and
conditions and to protect and preserve the security of Beneficiary hereunder.
Trustor shall, at Beneficiary's request, cause any such Affiliate to execute and
deliver to Beneficiary or Trustee such further instruments or documents as
Beneficiary may reasonably deem necessary to effectuate the terms of this
Section 1.22.
(b) Restriction on Use of Subsidiary or Affiliate. Except as
permitted under the Mortgage Notes Indenture, the Notes, the Mortgage Notes
Indenture Security Documents or any other Security Document granting a security
interest to or for the benefit of Beneficiary, Trustor shall not use any
Affiliate in the operation of the Trust Estate or the Project if such use would
in any way impair the security for the Notes and the Mortgage Notes Indenture or
circumvent any covenant or condition of this Leasehold Deed of Trust, the
27
Mortgage Notes Indenture, the Mortgage Notes Indenture Security Documents or any
other Security Documents granting a security interest to Beneficiary.
1.23 Title Insurance. Promptly after the execution and delivery of this
Leasehold Deed of Trust, Trustor shall cause to be delivered to Beneficiary at
Trustor's expense, one or more ALTA extended coverage Lender's Policies of Title
Insurance showing a leasehold interest in the property described in the Subject
Leases, vested in Trustor, and the lien of this Leasehold Deed of Trust to be a
perfected lien, prior to any and all encumbrances other than Permitted Liens
(except for encumbrances which Title Insurer has agreed to provide an
endorsement or affirmative coverage protecting the lien of this Leasehold Deed
of Trust against irrevocably).
1.24 Merger. So long as any of the indebtedness secured hereby shall
remain unpaid, unless Beneficiary shall otherwise in writing consent, the fee
title and the Leasehold Estate shall not merge but shall always be kept separate
and distinct, notwithstanding the union of said estates either in the lessor or
in the lessee, or in a third party, by purchase or otherwise; and the Trustor
covenants and agrees that, if it shall acquire the fee title, or any other
estate, title or interest in the Leased Premises covered by the Subject Leases,
this Leasehold Deed of Trust shall be considered as mortgaged, assigned or
conveyed to the Beneficiary and the lien hereof spread to cover such estate with
the same force and effect as though specifically herein mortgaged, assigned or
conveyed and spread. The provisions of this paragraph shall not apply if
Beneficiary shall so elect.
ARTICLE TWO
CORPORATE LOAN PROVISIONS
2.1 Interaction with Mortgage Notes Indenture.
(a) Incorporation by Reference. All terms, covenants, conditions,
provisions and requirements of the Mortgage Notes Indenture are incorporated by
reference in this Leasehold Deed of Trust.
(b) Conflicts. In the event of any conflict or inconsistency between
the provisions of this Leasehold Deed of Trust and those of the Mortgage Notes
Indenture or the Disbursement Agreement, the provisions of the Mortgage Notes
Indenture or the Disbursement Agreement, as applicable, shall govern.
2.2 Other Collateral. This Leasehold Deed of Trust is one of a number of
security agreements to secure the debt delivered by or on behalf of Trustor
pursuant to the Mortgage Notes Indenture and the other Mortgage Notes Indenture
Security Documents and securing the Obligations secured hereunder. All potential
junior Lien claimants are placed on notice that, under any of the Mortgage Notes
Indenture Security Documents and each other Security Document granting a
security interest to the Beneficiary or otherwise (such as by separate future
unrecorded agreement between Trustor and Beneficiary), other collateral for the
Obligations secured hereunder (i.e., collateral other than the Trust Estate)
may, under certain
28
circumstances, be released without a corresponding reduction in the total
principal amount secured by this Leasehold Deed of Trust. Such a release would
decrease the amount of collateral securing the same indebtedness, thereby
increasing the burden on the remaining Trust Estate created and continued by
this Leasehold Deed of Trust. No such release shall impair the priority of the
lien of this Leasehold Deed of Trust. By accepting its interest in the Trust
Estate, each and every junior Lien claimant shall be deemed to have acknowledged
the possibility of, and consented to, any such release. Nothing in this
paragraph shall impose any obligation upon Beneficiary.
2.3 Subordination to the Interim Mall Leasehold Deed of Trust and the Bank
Leasehold Deed of Trust. Notwithstanding any other provision hereof, this Deed
of Trust, including, without limitation, the security interest granted herein,
the rights, powers and remedies of the Trustee and the Beneficiary and the
obligations of Trustor set forth herein, shall, to the extent provided for in
the Intercreditor Agreement, be subject and subordinate to the Interim Mall
Leasehold Deed of Trust and the Bank Leasehold Deed of Trust.
2.4 Subordination to Cooperation Agreement and HVAC Ground Lease.
Beneficiary hereby (a) subordinates this Leasehold Deed of Trust and the lien
hereof to the Cooperation Agreement and the HVAC Ground Lease (as in effect as
of the date hereof) and to the rights, interest, obligations, duties,
conditions, covenants and agreements granted pursuant to the Cooperation
Agreement and the HVAC Ground Lease (as in effect as of the date hereof) and (b)
agrees to be bound by the terms and conditions of the Cooperation Agreement and
the HVAC Ground Lease (as in effect as of the date hereof) upon its taking title
to the Trust Estate.
ARTICLE THREE
DEFAULTS
3.1 Event of Default. The term "Event of Default," wherever used in this
Leasehold Deed of Trust, shall mean any of (i) one or more of the events of
default listed in Section 6.01 of the Mortgage Notes Indenture or (ii) so long
as the Disbursement Agreement is in effect, one or more of the events of default
listed in Section 7.1 of the Disbursement Agreement (whether any such event
shall be voluntary or involuntary or come about or be effected by operation of
law or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body).
ARTICLE FOUR
REMEDIES
4.1 Acceleration of Maturity. If an Event of Default occurs, Beneficiary
may (except that such acceleration shall be automatic if the Event of Default is
caused by reason of an Event of Default under Section 6.01(h) or (i) of the
Mortgage Notes Indenture), in accordance with Section 6.02 of the Mortgage Notes
Indenture, declare the Notes and all indebtedness or sums secured hereby, to be
due and payable immediately, and upon such declaration such
29
principal and interest and other sums shall immediately become due and payable
without demand, presentment, notice or other requirements of any kind (all of
which Trustor waives) notwithstanding anything in this Leasehold Deed of Trust
or any Mortgage Notes Indenture Security Document or applicable law to the
contrary.
4.2 Protective Advances. If Trustor fails to make any payment or perform
any other obligation under the Notes or any other Financing Agreement, then
without thereby limiting Beneficiary's other rights or remedies, waiving or
releasing any of Trustor's obligations, or imposing any obligation on
Beneficiary, Beneficiary may either advance any amount owing or perform any or
all actions that Beneficiary considers necessary or appropriate to cure such
default. All such advances shall constitute "Protective Advances." No sums
advanced or performance rendered by Beneficiary shall cure, or be deemed a
waiver of any Event of Default.
4.3 Institution of Equity Proceedings. If an Event of Default occurs,
Beneficiary may institute an action, suit or proceeding in equity for specific
performance of this Leasehold Deed of Trust, the Notes, any Mortgage Notes
Indenture Security Documents or any other Security Document which grants a
security interest for the benefit of the Beneficiary, all of which shall be
specifically enforceable by injunction or other equitable remedy. Trustor waives
any defense based on laches or any applicable statute of limitations.
4.4 Beneficiary's Power of Enforcement.
(a) If an Event of Default occurs, Beneficiary shall be entitled, at
its option and in its sole and absolute discretion, to prepare and record on its
own behalf, or to deliver to Trustee for recording, if appropriate, written
declaration of default and demand for sale and written Notice of Breach and
Election to Sell (NRS 107.080(3) (or other statutory notice) to cause the Trust
Estate to be sold to satisfy the obligations hereof, and in the case of delivery
to Trustee, Trustee shall cause said notice to be filed for record.
(b) After the lapse of such time as may then be required by law
following the recordation of said Notice of Breach and Election to Sell, and
notice of sale having been given as then required by law, including compliance
with all applicable Nevada Gaming Laws, Trustee without demand on Trustor, shall
sell the Trust Estate or any portion thereof at the time and place fixed by it
in said notice, either as a whole or in separate parcels, and in such order as
it may determine, at public auction to the highest bidder, of cash in lawful
money of the United States payable at the time of sale. Trustee may, for any
cause it deems expedient, postpone the sale of all or any portion of said
property until it shall be completed and, in every case, notice of postponement
shall be given by public announcement thereof at the time and place last
appointed for the sale and from time to time thereafter Trustee may postpone
such sale by public announcement at the time fixed by the preceding
postponement. Trustee shall execute and deliver to the purchaser its Deed, ▇▇▇▇
of Sale, or other instrument conveying said property so sold, but without any
covenant or warranty, express or implied. The recitals in such instrument of
conveyance of any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Beneficiary, may bid at the sale.
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(c) After deducting all costs, fees and expenses of Trustee and of
this Leasehold Deed of Trust, including, without limitation, costs of evidence
of title and reasonable attorneys' fees of Trustee or Beneficiary in connection
with a sale, Trustee shall apply the proceeds of such sale to payment of all
sums expended under the terms hereof not then repaid, with accrued interest at
the Default Rate to the payment of all other sums then secured hereby and the
remainder, if any, to the person or persons legally entitled thereto as provided
in NRS 40.462.
(d) Subject to compliance with applicable Nevada Gaming Laws, if any
Event of Default occurs, Beneficiary may, either with or without entry or taking
possession of the Trust Estate, and without regard to whether or not the
indebtedness and other sums secured hereby shall be due and without prejudice to
the right of Beneficiary thereafter to bring an action or proceeding to
foreclose or any other action for any default existing at the time such earlier
action was commenced, proceed by any appropriate action or proceeding: (1) to
enforce payment of the Notes, to the extent permitted by law, or the performance
of any term hereof or any other right; (2) to foreclose this Leasehold Deed of
Trust in any manner provided by law for the foreclosure of mortgages or deeds of
trust on real property and to sell, as an entirety or in separate lots or
parcels, the Trust Estate or any portion thereof pursuant to the laws of the
State of Nevada or under the judgment or decree of a court or courts of
competent jurisdiction, and Beneficiary shall be entitled to recover in any such
proceeding all costs and expenses incident thereto, including reasonable
attorneys' fees in such amount as shall be awarded by the court; (3) to exercise
any or all of the rights and remedies available to it under the Mortgage Notes
Indenture; and (4) to pursue any other remedy available to it. Beneficiary shall
take action either by such proceedings or by the exercise of its powers with
respect to entry or taking possession, or both, as Beneficiary may determine.
(e) The remedies described in this Section 4.4 may be exercised with
respect to all or any portion of the Personal Property, either simultaneously
with the sale of any real property encumbered hereby or independent thereof.
Beneficiary shall at any time be permitted to proceed with respect to all or any
portion of the Personal Property in any manner permitted by the UCC. Trustor
agrees that Beneficiary's inclusion of all or any portion of the Personal
Property (and all personal property that is subject to a security interest in
favor, or for the benefit, of Beneficiary) in a sale or other remedy exercised
with respect to the real property encumbered hereby, as permitted by the UCC, is
a commercially reasonable disposition of such property.
4.5 Beneficiary's Right to Enter and Take Possession, Operate and Apply
Income.
(a) Subject to compliance with applicable Nevada Gaming Laws, if an
Event of Default occurs, (i) Trustor, upon demand of Beneficiary, shall
forthwith surrender to Beneficiary the actual possession and, if and to the
extent permitted by law, Beneficiary itself, or by such officers or agents as it
may appoint, may enter and take possession of all the Trust Estate including the
Personal Property, without liability for trespass, damages or otherwise, and may
exclude Trustor and its agents and employees wholly therefrom and may have joint
access with Trustor to the books, papers and accounts of Trustor; and (ii)
Trustor shall pay monthly
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in advance to Beneficiary on Beneficiary's entry into possession, or to any
receiver appointed to collect the Rents, all Rents then due and payable.
(b) If Trustor shall for any reason fail to surrender or deliver the
Trust Estate, the Personal Property or any part thereof after Beneficiary's
demand, Beneficiary may obtain a judgment or decree conferring on Beneficiary or
Trustee the right to immediate possession or requiring Trustor to deliver
immediate possession of all or part of such property to Beneficiary or Trustee
and Trustor hereby specifically consents to the entry of such judgment or
decree. Trustor shall pay to Beneficiary or Trustee, upon demand, all reasonable
costs and expenses of obtaining such judgment or decree and reasonable
compensation to Beneficiary or Trustee, their attorneys and agents, and all such
costs, expenses and compensation shall, until paid, be secured by the lien of
this Leasehold Deed of Trust.
(c) Subject to compliance with applicable Nevada Gaming Laws, upon
every such entering upon or taking of possession, Beneficiary or Trustee may
hold, store, use, operate, manage and control the Trust Estate and conduct the
business thereof, and, from time to time in its sole and absolute discretion and
without being under any duty to so act:
(1) make all necessary and proper maintenance, repairs,
renewals, replacements, additions, betterments and improvements thereto and
thereon and purchase or otherwise acquire additional fixtures, personalty and
other property;
(2) insure or keep the Trust Estate insured;
(3) manage and operate the Trust Estate and exercise all the
rights and ▇▇▇▇▇▇ of Trustor in their name or otherwise with respect to the
same;
(4) enter into agreements with others to exercise the powers
herein granted Beneficiary or Trustee, all as Beneficiary or Trustee from time
to time may determine; and, subject to the absolute assignment of the Rents and
Leases to Beneficiary, Beneficiary or Trustee may collect and receive all the
Rents, including those past due as well as those accruing thereafter; and shall
apply the monies so received by Beneficiary or Trustee in such priority as
Beneficiary may determine to (1) the payment of interest and principal due and
payable on the Notes, (2) the deposits for taxes and assessments and insurance
premiums due, (3) the cost of insurance, taxes, assessments and other proper
charges upon the Trust Estate or any part thereof; (4) the compensation,
expenses and disbursements of the agents, attorneys and other representatives of
Beneficiary or Trustee; and (5) any other charges or costs required to be paid
by Trustor under the terms hereof; and
(5) rent or sublet the Trust Estate or any portion thereof for
any purpose permitted by this Leasehold Deed of Trust.
Beneficiary or Trustee shall surrender possession of the Trust
Estate and the Personal Property to Trustor only when all that is due upon such
interest and principal, tax and insurance deposits, and all amounts under any of
the terms of the Mortgage Notes Indenture or this Leasehold Deed of Trust, shall
have been paid and all defaults made good. The same
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right of taking possession, however, shall exist if any subsequent Event of
Default shall occur and be continuing.
4.6 Leases. Beneficiary is authorized to foreclose this Leasehold Deed of
Trust subject to the rights of any tenants of the Trust Estate, and the failure
to make any such tenants parties defendant to any such foreclosure proceedings
and to foreclose their rights shall not be, nor be asserted by Trustor to be, a
defense to any proceedings instituted by Beneficiary to collect the sums secured
hereby or to collect any deficiency remaining unpaid after the foreclosure sale
of the Trust Estate, or any portion thereof. Unless otherwise agreed by
Beneficiary in writing, all Space Leases executed subsequent to the date hereof,
or any part thereof, shall be subordinate and inferior to the lien of this
Leasehold Deed of Trust; provided, however that (i) in accordance with the terms
of Section 4.24 of the Mortgage Notes Indenture, Beneficiary may be required to
execute a non-disturbance and attornment agreement in connection with certain
Space Leases; and (ii) from time to time Beneficiary may execute and record
among the land records of the jurisdiction where this Leasehold Deed of Trust is
recorded, subordination statements with respect to such of said Space Leases as
Beneficiary may designate in its sole discretion, whereby the Space Leases so
designated by Beneficiary shall be made superior to the lien of this Leasehold
Deed of Trust for the term set forth in such subordination statement. From and
after the recordation of such subordination statements, and for the respective
periods as may be set forth therein, the Space Leases therein referred to shall
be superior to the lien of this Leasehold Deed of Trust and shall not be
affected by any foreclosure hereof. All such Space Leases shall contain a
provision to the effect that the Trustor and Space Lessee recognize the right of
Beneficiary to elect and to effect such subordination of this Leasehold Deed of
Trust and consents thereto.
4.7 Purchase by Beneficiary. Upon any foreclosure sale (whether judicial
or nonjudicial), Beneficiary may bid for and purchase the property subject to
such sale and, upon compliance with the terms of sale, may hold, retain and
possess and dispose of such property in its own absolute right without further
accountability.
4.8 Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws. Trustor agrees to the full extent permitted by law that if an Event of
Default occurs, neither Trustor nor anyone claiming through or under it shall or
will set up, claim or seek to take advantage of any appraisement, valuation,
stay, extension or redemption laws now or hereafter in force, in order to
prevent or hinder the enforcement or foreclosure of this Leasehold Deed of Trust
or the absolute sale of the Trust Estate or any portion thereof or the final and
absolute putting into possession thereof, immediately after such sale, of the
purchasers thereof, and Trustor for itself and all who may at any time claim
through or under it, hereby waives, to the full extent that it may lawfully so
do, the benefit of all such laws, and any and all right to have the assets
comprising the Trust Estate marshalled upon any foreclosure of the lien hereof
and agrees that Trustee or any court having jurisdiction to foreclose such lien
may sell the Trust Estate in part or as an entirety.
4.9 Receiver. If an Event of Default occurs, Beneficiary, to the extent
permitted by law and subject to compliance with all applicable Nevada Gaming
Laws, and without regard to the value, adequacy or occupancy of the security for
the indebtedness and other sums
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secured hereby, shall be entitled as a matter of right if it so elects to the
appointment of a receiver to enter upon and take possession of the Trust Estate
and to collect all Rents and apply the same as the court may direct, and such
receiver may be appointed by any court of competent jurisdiction upon
application by Beneficiary. Beneficiary may have a receiver appointed without
notice to Trustor or any third party, and Beneficiary may waive any requirement
that the receiver post a bond. Beneficiary shall have the power to designate and
select the Person who shall serve as the receiver and to negotiate all terms and
conditions under which such receiver shall serve. Any receiver appointed on
Beneficiary's behalf may be an Affiliate of Beneficiary. The expenses, including
receiver's fees, attorneys' fees, costs and agent's compensation, incurred
pursuant to the powers herein contained shall be secured by this Leasehold Deed
of Trust. The right to enter and take possession of and to manage and operate
the Trust Estate and to collect all Rents, whether by a receiver or otherwise,
shall be cumulative to any other right or remedy available to Beneficiary under
this Leasehold Deed of Trust, the Mortgage Notes Indenture or otherwise
available to Beneficiary and may be exercised concurrently therewith or
independently thereof. Beneficiary shall be liable to account only for such
Rents (including, without limitation, security deposits) actually received by
Beneficiary, whether received pursuant to this section or any other provision
hereof. Notwithstanding the appointment of any receiver or other custodian,
Beneficiary shall be entitled as pledgee to the possession and control of any
cash, deposits, or instruments at the time held by, or payable or deliverable
under the terms of this Leasehold Deed of Trust to, Beneficiary.
4.10 Suits to Protect the Trust Estate. Beneficiary shall have the power
and authority to institute and maintain any suits and proceedings as
Beneficiary, in its sole and absolute discretion, may deem advisable (a) to
prevent any impairment of the Trust Estate by any acts which may be unlawful or
in violation of this Leasehold Deed of Trust, (b) to preserve or protect its
interest in the Trust Estate, or (c) to restrain the enforcement of or
compliance with any legislation or other Legal Requirement that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, rule or order might impair the security hereunder or be
prejudicial to Beneficiary's interest.
4.11 Proofs of Claim. In the case of any receivership, Insolvency,
Bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting Trustor, or, to the extent the same would result
in an Event of Default hereunder, any Subsidiary, or any guarantor, co-maker or
endorser of any of Trustor's obligations, its creditors or its property,
Beneficiary, to the extent permitted by law, shall be entitled to file such
proofs of claim or other documents as it may deem to be necessary or advisable
in order to have its claims allowed in such proceedings for the entire amount
due and payable by Trustor under the Notes, any other Mortgage Notes Indenture
Security Document or any other Security Document, at the date of the institution
of such proceedings, and for any additional amounts which may become due and
payable by Trustor after such date.
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4.12 Trustor to Pay the Notes on Any Default in Payment; Application of
Monies by Beneficiary.
(a) In case of a foreclosure sale of all or any part of the Trust
Estate and of the application of the proceeds of sale to the payment of the sums
secured hereby, Beneficiary shall be entitled to enforce payment from Trustor of
any additional amounts then remaining due and unpaid and to recover judgment
against Trustor for any portion thereof remaining unpaid, with interest at the
Default Rate.
(b) Trustor hereby agrees to the extent permitted by law, that no
recovery of any such judgment by Beneficiary or other action by Beneficiary and
no attachment or levy of any execution upon any of the Trust Estate or any other
property shall in any way affect the Lien and security interest of this
Leasehold Deed of Trust upon the Trust Estate or any part thereof or any Lien,
rights, powers or remedies of Beneficiary hereunder, but such Lien, rights,
powers and remedies shall continue unimpaired as before.
(c) Any monies collected or received by Beneficiary under this
Section 4.12 shall be first applied to the payment of reasonable compensation,
expenses and disbursements of the agents, attorneys and other representatives of
Beneficiary, and the balance remaining shall be applied to the payment of
amounts due and unpaid under the Notes.
(d) The provisions of this section shall not be deemed to limit or
otherwise modify the provisions of any guaranty of the indebtedness evidenced by
the Notes.
4.13 Delay or Omission; No Waiver. No delay or omission of Beneficiary to
exercise any right, power or remedy upon any Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to waive any such
Event of Default or to constitute acquiescence therein. Every right, power and
remedy given to Beneficiary whether contained herein or in the Mortgage Notes
Indenture or otherwise available to Beneficiary may be exercised from time to
time and as often as may be deemed expedient by Beneficiary.
4.14 No Waiver of One Default to Affect Another. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other Event of
Default then existing, or impair any rights, powers or remedies consequent
thereon. If Beneficiary or a majority of the Mortgage Notes Holder(s), to the
extent applicable under the Mortgage Notes Indenture, (a) grants forbearance or
an extension of time for the payment of any sums secured hereby; (b) takes other
or additional security for the payment thereof; (c) waives or does not exercise
any right granted in the Notes, the Mortgage Notes Indenture, this Leasehold
Deed of Trust, the Disbursement Agreement or any other Mortgage Notes Indenture
Security Document; (d) releases any part of the Trust Estate from the lien or
security interest of this Leasehold Deed of Trust or any other instrument
securing the Notes; (e) consents to the filing of any map, plat or replat of the
Leased Premises (to the extent such consent is required); (f) consents to the
granting of any easement on the Leased Premises (to the extent such consent is
required); or (g) makes or consents to any agreement changing the terms of this
Leasehold Deed of Trust or any Mortgage Notes Indenture Security Document or
other Security Document for the benefit of Beneficiary subordinating the lien or
any charge hereof, no such
35
act or omission shall release, discharge, modify, change or affect the original
liability under the Notes, this Leasehold Deed of Trust or any Mortgage Notes
Indenture Security Document or any other Security Document for the benefit of
Beneficiary or otherwise of Trustor, or any subsequent purchaser of the Trust
Estate or any part thereof or any maker, co-signer, surety or guarantor. No such
act or omission shall preclude Beneficiary from exercising any right, power or
privilege herein granted or intended to be granted in case of any Event of
Default then existing or of any subsequent Event of Default, nor, except as
otherwise expressly provided in an instrument or instruments executed by
Beneficiary, shall the lien or security interest of this Leasehold Deed of Trust
be altered thereby, except to the extent expressly provided in any releases,
maps, easements or subordinations described in clause (d), (e), (f) or (g) above
of this Section 4.14. In the event of the sale or transfer by operation of law
or otherwise of all or any part of the Trust Estate, Beneficiary, without notice
to any person, firm or corporation, is hereby authorized and empowered to deal
with any such vendee or transferee with reference to the Trust Estate or the
indebtedness secured hereby, or with reference to any of the terms or conditions
hereof, as fully and to the same extent as it might deal with the original
parties hereto and without in any way releasing or discharging any of the
liabilities or undertakings hereunder, or waiving its right to declare such sale
or transfer an Event of Default as provided herein. Notwithstanding anything to
the contrary contained in this Leasehold Deed of Trust or the Mortgage Notes
Indenture Security Documents or any other Security Documents, (i) in the case of
any non-monetary Event of Default, Beneficiary may continue to accept payments
due hereunder without thereby waiving the existence of such or any other Event
of Default and (ii) in the case of any monetary Event of Default, Beneficiary
may accept partial payments of any sums due hereunder without thereby waiving
the existence of such Event of Default if the partial payment is not sufficient
to completely cure such Event of Default.
4.15 Discontinuance of Proceedings; Position of Parties Restored. If
Beneficiary shall have proceeded to enforce any right or remedy under this
Leasehold Deed of Trust by foreclosure, entry of judgement or otherwise and such
proceedings shall have been discontinued or abandoned for any reason, or such
proceedings shall have resulted in a final determination adverse to Beneficiary,
then and in every such case Trustor and Beneficiary shall be restored to their
former positions and rights hereunder, and all rights, powers and remedies of
Beneficiary shall continue as if no such proceedings had occurred or had been
taken.
4.16 Remedies Cumulative. No right, power or remedy, including without
limitation remedies with respect to any security for the Notes, conferred upon
or reserved to Beneficiary by this Leasehold Deed of Trust or any other Mortgage
Notes Indenture Security Document or any other Security Document is exclusive of
any other right, power or remedy, but each and every such right, power and
remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under any Mortgage Notes Indenture
Security Document or any other Security Document, now or hereafter existing at
law, in equity or by statute, and Beneficiary shall be entitled to resort to
such rights, powers, remedies or security as Beneficiary shall in its sole and
absolute discretion deem advisable.
4.17 Interest After Event of Default. If an Event of Default shall have
occurred and is continuing, all sums outstanding and unpaid under the Notes and
this Leasehold Deed of
36
Trust shall, at Beneficiary's option, bear interest at the Default Rate until
such Event of Default has been cured. Trustor's obligation to pay such interest
shall be secured by this Leasehold Deed of Trust.
4.18 Foreclosure; Expenses of Litigation. If Trustee forecloses,
reasonable attorneys' fees for services in the supervision of said foreclosure
proceeding shall be allowed to the Trustee and Beneficiary as part of the
foreclosure costs. In the event of foreclosure of the lien hereof, there shall
be allowed and included as additional indebtedness all reasonable expenditures
and expenses which may be paid or incurred by or on behalf of Beneficiary for
attorneys' fees, appraiser's fees, outlays for documentary and expert evidence,
stenographers' charges, publication costs, and costs (which may be estimated as
to items to be expended after foreclosure sale or entry of the decree) of
procuring all such abstracts of title, title searches and examinations, title
insurance policies and guarantees, and similar data and assurances with respect
to title as Beneficiary may deem reasonably advisable either to prosecute such
suit or to evidence to a bidder at any sale which may be had pursuant to such
decree the true condition of the title to or the value of the Trust Estate or
any portion thereof. All expenditures and expenses of the nature in this section
mentioned, and such expenses and fees as may be incurred in the protection of
the Trust Estate and the maintenance of the lien and security interest of this
Leasehold Deed of Trust, including the fees of any attorney employed by
Beneficiary in any litigation or proceeding affecting this Leasehold Deed of
Trust or any Mortgage Notes Indenture Security Document, the Trust Estate or any
portion thereof, including, without limitation, civil, probate, appellate and
bankruptcy proceedings, or in preparation for the commencement or defense of any
proceeding or threatened suit or proceeding, shall be immediately due and
payable by Trustor, with interest thereon at the Default Rate, and shall be
secured by this Leasehold Deed of Trust. Trustee waives its right to any
statutory fee in connection with any judicial or nonjudicial foreclosure of the
lien hereof and agrees to accept a reasonable fee for such services.
4.19 Deficiency Judgments. If after foreclosure of this Leasehold Deed of
Trust or Trustee's sale hereunder, there shall remain any deficiency with
respect to any amounts payable under the Notes or hereunder or any amounts
secured hereby, and Beneficiary shall institute any proceedings to recover such
deficiency or deficiencies, all such amounts shall continue to bear interest at
the Default Rate. Trustor waives any defense to Beneficiary's recovery against
Trustor of any deficiency after any foreclosure sale of the Trust Estate.
Trustor expressly waives any defense or benefits that may be derived from any
statute granting Trustor any defense to any such recovery by Beneficiary. In
addition, Beneficiary and Trustee shall be entitled to recovery of all of their
reasonable costs and expenditures (including without limitation any court
imposed costs) in connection with such proceedings, including their reasonable
attorneys' fees, appraisal fees and the other costs, fees and expenditures
referred to in Section 4.18 above. This provision shall survive any foreclosure
or sale of the Trust Estate, any portion thereof and/or the extinguishment of
the lien hereof.
37
4.20 Waiver of Jury Trial. Beneficiary and Trustor each waive any right to
have a jury participate in resolving any dispute whether sounding in contract,
tort or otherwise arising out of, connected with, related to or incidental to
the relationship established between them in connection with the Notes, this
Leasehold Deed of Trust or any other Mortgage Notes Indenture Security Document
or any other Security Document. Any such disputes shall be resolved in a bench
trial without a jury.
4.21 Exculpation of Beneficiary. The acceptance by Beneficiary of the
assignment contained herein with all of the rights, powers, privileges and
authority created hereby shall not, prior to entry upon and taking possession of
the Trust Estate by Beneficiary, be deemed or construed to make Beneficiary a
"mortgagee in possession"; nor thereafter or at any time or in any event
obligate Beneficiary to appear in or defend any action or proceeding relating to
the Space Leases, the Rents or the Trust Estate, or to take any action hereunder
or to expend any money or incur any expenses or perform or discharge any
obligation, duty or liability under any Space Lease or to assume any obligation
or responsibility for any security deposits or other deposits except to the
extent such deposits are actually received by Beneficiary, nor shall
Beneficiary, prior to such entry and taking, be liable in any way for any injury
or damage to person or property sustained by any Person in or about the Trust
Estate.
ARTICLE FIVE
RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE
Notwithstanding anything to the contrary in this Leasehold Deed of Trust,
Trustor and Beneficiary agree as follows.
5.1 Exercise of Remedies by Trustee. To the extent that this Leasehold
Deed of Trust or applicable law, including all applicable Nevada Gaming Laws,
authorizes or empowers, or does not require approval for, Beneficiary to
exercise any remedies set forth in Article Four hereof or otherwise, or perform
any acts in connection therewith, Trustee (but not to the exclusion of
Beneficiary unless so required under the law of the State of Nevada) shall have
the power to exercise any or all such remedies, and to perform any acts provided
for in this Leasehold Deed of Trust in connection therewith, all for the benefit
of Beneficiary and on Beneficiary's behalf in accordance with applicable law of
the State of Nevada. In connection therewith, Trustee: (a) shall not exercise,
or waive the exercise of, any Beneficiary's remedies (other than any rights of
Trustee to any indemnity or reimbursement), except at Beneficiary's request, and
(b) shall exercise, or waive the exercise of, any or all of Beneficiary's
remedies at Beneficiary's request, and in accordance with Beneficiary's
directions as to the manner of such exercise or waiver. Trustee may, however,
decline to follow Beneficiary's request or direction if Trustee shall be advised
by counsel that the action or proceeding, or manner thereof, so directed may not
lawfully be taken or waived.
5.2 Rights and Privileges of Trustee. To the extent that this Leasehold
Deed of Trust requires Trustor to indemnify Beneficiary or reimburse Beneficiary
for any expenditures
38
Beneficiary may incur, Trustee shall be entitled to the same indemnity and the
same rights to reimbursement of expenses as Beneficiary, subject to such
limitations and conditions as would apply in the case of Beneficiary. To the
extent that this Leasehold Deed of Trust negates or limits Beneficiary's
liability as to any matter, Trustee shall be entitled to the same negation or
limitation of liability. To the extent that Trustor, pursuant to this Leasehold
Deed of Trust, appoints Beneficiary as Trustor's attorney in fact for any
purpose, Beneficiary or (when so instructed by Beneficiary) Trustee shall be
entitled to act on Trustor's behalf without joinder or confirmation by the
other.
5.3 Resignation or Replacement of Trustee. Trustee may resign by an
instrument in writing addressed to Beneficiary, and Trustee may be removed at
any time with or without cause (i.e., in Beneficiary's sole and absolute
discretion) by an instrument in writing executed by Beneficiary. In case of the
death, resignation, removal or disqualification of Trustee or if for any reason
Beneficiary shall deem it desirable to appoint a substitute, successor or
replacement Trustee to act instead of Trustee originally named (or in place of
any substitute, successor or replacement Trustee), then Beneficiary shall have
the right and is hereby authorized and empowered to appoint a successor,
substitute or replacement Trustee, without any formality other than appointment
and designation in writing executed by Beneficiary, which instrument shall be
recorded if required by the law of the State of Nevada. The laws of the State of
Nevada (including, without limitation, the Nevada Gaming Laws) shall govern the
qualifications of any Trustee. The authority conferred upon Trustee by this
Leasehold Deed of Trust shall automatically extend to any and all other
successor, substitute and replacement Trustee(s) successively until the
obligations secured hereunder have been paid in full or the Trust Estate has
been sold hereunder or released in accordance with the provisions of the
Mortgage Notes Indenture Security Documents and each other Security Document to
which the Beneficiary is a party or which grants a security for the benefit of
the Beneficiary. Beneficiary's written appointment and designation of any
Trustee shall be full evidence of Beneficiary's right and authority to make the
same and of all facts therein recited. No confirmation, authorization, approval
or other action by Trustor shall be required in connection with any resignation
or other replacement of Trustee.
5.4 Authority of Beneficiary. If Beneficiary is a banking corporation,
state banking corporation or a national banking association and the instrument
of appointment of any successor or replacement Trustee is executed on
Beneficiary's behalf by an officer of such corporation, state banking
corporation or national banking association, then such appointment shall be
conclusively presumed to be executed with authority and shall be valid and
sufficient without proof of any action by the board of directors or any superior
officer of Beneficiary.
5.5 Effect of Appointment of Successor Trustee. Upon the appointment and
designation of any successor, substitute or replacement Trustee, and subject to
compliance with applicable Nevada Gaming Laws and other applicable laws,
Trustee's entire estate and title in the Trust Estate shall vest in the
designated successor, substitute or replacement Trustee. Such successor,
substitute or replacement Trustee shall thereupon succeed to and shall hold,
possess and execute all the rights, powers, privileges, immunities and duties
herein conferred upon Trustee. All references herein to Trustee shall be deemed
to refer to Trustee (including any
39
successor or substitute appointed and designated as herein provided) from time
to time acting hereunder.
5.6 Confirmation of Transfer and Succession. Upon the written request of
Beneficiary or of any successor, substitute or replacement Trustee, any former
Trustee ceasing to act shall execute and deliver an instrument transferring to
such successor, substitute or replacement Trustee all of the right, title,
estate and interest in the Trust Estate of Trustee so ceasing to act, together
with all the rights, powers, privileges, immunities and duties herein conferred
upon Trustee, and shall duly assign, transfer and deliver all properties and
moneys held by said Trustee hereunder to said successor, substitute or
replacement Trustee.
5.7 Exculpation. Trustee shall not be liable for any error of judgment or
act done by Trustee in good faith, or otherwise be responsible or accountable
under any circumstances whatsoever, except for Trustee's gross negligence,
willful misconduct or knowing violation of law. 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 it hereunder, believed by it in good
faith to be genuine. All moneys received by Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated in any manner from any other moneys (except
to the extent required by law). Trustee shall be under no liability for interest
on any moneys received by it hereunder.
5.8 Endorsement and Execution of Documents. Upon Beneficiary's written
request, Trustee shall, without liability or notice to Trustor, execute, consent
to, or join in any instrument or agreement in connection with or necessary to
effectuate the purposes of the Mortgage Notes Indenture Security Documents and
each other Security Document to which the Beneficiary is a party or which grants
a security interest for the benefit of the Beneficiary. Trustor hereby
irrevocably designates Trustee as its attorney in fact to execute, acknowledge
and deliver, on Trustor's behalf and in Trustor's name, all instruments or
agreements necessary to implement any provision(s) of this Leasehold Deed of
Trust or to further perfect the lien created by this Leasehold Deed of Trust on
the Trust Estate. This power of attorney shall be deemed to be coupled with an
interest and shall survive any disability of Trustor.
5.9 Multiple Trustees. If Beneficiary appoints multiple trustees, then any
Trustee, individually, may exercise all powers granted to Trustee under this
instrument, without the need for action by any other Trustee(s).
5.10 Terms of Trustee's Acceptance. Trustee accepts the trust created by
this Leasehold Deed of Trust upon the following terms and conditions:
(a) Delegation. Trustee may exercise any of its powers through
appointment of attorney(s) in fact or agents.
(b) Counsel. Trustee may select and employ legal counsel (including
any law firm representing Beneficiary). Trustor shall reimburse all reasonable
legal fees and expenses that Trustee may thereby incur.
40
(c) Security. Trustee shall be under no obligation to take any
action upon any Event of Default unless furnished security or indemnity, in form
satisfactory to Trustee, against costs, expenses, and liabilities that Trustee
may incur.
(d) Costs and Expenses. Trustor shall reimburse Trustee, as part of
the Obligations secured hereunder, for all reasonable disbursements and expenses
(including reasonable legal fees and expenses and any expenses incurred by
Trustee in complying with the Nevada Gaming Laws and Gaming Licenses) incurred
by reason of and as provided for in this Leasehold Deed of Trust, including any
of the foregoing incurred in Trustee's administering and executing the trust
created by this Leasehold Deed of Trust and performing Trustee's duties and
exercising Trustee's powers under this Leasehold Deed of Trust.
(e) Release. Upon satisfaction of the conditions for reconveyance
contained in Section 6.11 hereof, Beneficiary shall request that Trustee release
this Leasehold Deed of Trust and Trustee shall release this Leasehold Deed of
Trust and reconvey the Trust Estate in accordance with Section 6.11 hereof,
provided, however, that Trustor shall pay all costs of recordation, if any, and
all of Trustee's and Beneficiary's costs and expenses in connection with such
release, including, but not limited to, reasonable attorneys' fees.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
6.1 Heirs, Successors and Assigns Included in Parties. Whenever one of the
parties hereto is named or referred to herein, the heirs, successors and assigns
of such party shall be included, and subject to the limitations set forth in
Section 1.9, all covenants and agreements contained in this Leasehold Deed of
Trust, by or on behalf of Trustor or Beneficiary shall bind and inure to the
benefit of its heirs, successors and assigns, whether so expressed or not.
6.2 Addresses for Notices, Etc. Any notice, report, demand or other
instrument authorized or required to be given or furnished under this Leasehold
Deed of Trust to Trustor or Beneficiary shall be deemed given or furnished (i)
when addressed to the party intended to receive the same, at the address of such
party set forth below, and delivered by hand at such address or (ii) three (3)
days after the same is deposited in the United States mail as first class
certified mail, return receipt requested, postage paid, whether or not the same
is actually received by such party:
Beneficiary: First Trust National Association
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇.▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
41
Trustor: Grand Canal Shops Construction, LLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Trustee: Lawyers Title of Nevada, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
6.3 Change of Notice Address. Any Person may change the address to which
any such notice, report, demand or other instrument is to be delivered or mailed
to that person, by furnishing written notice of such change to the other
parties, but no such notice of change shall be effective unless and until
received by such other parties.
6.4 Headings. The headings of the articles, sections, paragraphs and
subdivisions of this Leasehold Deed of Trust are for convenience of reference
only, are not to be considered a part hereof, and shall not limit or expand or
otherwise affect any of the terms hereof.
6.5 Invalid Provisions to Affect No Others. In the event that any of the
covenants, agreements, terms or provisions contained herein or in the Notes, the
Mortgage Notes Indenture any Mortgage Notes Indenture Security Document or any
other Security Document shall be invalid, illegal or unenforceable in any
respect, the validity of the lien hereof and the remaining covenants,
agreements, terms or provisions contained herein or in the Notes, the Mortgage
Notes Indenture, any other Mortgage Notes Indenture Security Document or any
other Security Document shall be in no way affected, prejudiced or disturbed
thereby. To the extent permitted by law, Trustor waives any provision of law
which renders any provision hereof prohibited or unenforceable in any respect.
6.6 Changes and Priority Over Intervening Liens. Neither this Leasehold
Deed of Trust nor any term hereof may be changed, waived, discharged or
terminated orally, or by any action or inaction, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. Any agreement hereafter made by Trustor and
Beneficiary relating to this Leasehold Deed of Trust or, if Trustor should
subsequent to the date hereof obtain a fee interest in the Leased Premises, any
fee deed of trust recorded hereafter which secures the Obligations shall be
superior to the rights of the holder of any intervening lien or encumbrance.
6.7 Estoppel Certificates. Within ten (10) Business Days after
Beneficiary's written request, Trustor shall from time to time execute a
certificate, in recordable form (an "Estoppel Certificate"), stating, except to
the extent it would be inaccurate to so state: (a) the current amount of the
Obligations secured hereunder and all elements thereof, including principal,
interest, and all other elements; (b) that Trustor has no defense, offset,
claim, counterclaim, right of recoupment, deduction, or reduction against any of
the Obligations secured hereunder; (c) that none of the Bank Security Documents
and each other Security Document to which the
42
Beneficiary is a party or which grants a security interest for the benefit of
the Beneficiary have been amended, whether orally or in writing; (d) that
Trustor has no claims against Beneficiary of any kind; (e) that any Power of
Attorney granted to Beneficiary is in full force and effect; and (f) such other
matters relating to this Leasehold Deed of Trust, any Bank Security Document and
each other Security Document to which the Beneficiary is a party or which grants
a security interest for the benefit of the Beneficiary and the relationship of
Trustor and Beneficiary as Beneficiary shall request. In addition, the Estoppel
Certificate shall set forth the reasons why it would be inaccurate to make any
of the foregoing assurances ("a" through "f").
6.8 Waiver of Setoff and Counterclaim. All amounts due under this
Leasehold Deed of Trust, the Notes, the other Mortgage Notes Indenture Security
Documents and each other Security Document to which the Beneficiary is a party
or which grants a security interest for the benefit of the Beneficiary shall be
payable without setoff, counterclaim or any deduction whatsoever. Trustor hereby
waives the right to assert a counterclaim (other than a compulsory counterclaim)
in any action or proceeding brought against it by Beneficiary or arising out of
or in any way connected with this Leasehold Deed of Trust, the other Mortgage
Notes Indenture Security Documents, each other Security Document to which the
Beneficiary is a party or which grants a security interest for the benefit of
the Beneficiary or the Obligations.
6.9 Governing Law. The Mortgage Notes Indenture and the Notes provide that
they are governed by, and construed and enforced in accordance with, the laws of
the State of New York. This Leasehold Deed of Trust shall also be construed
under and governed by the laws of the State of New York; provided, however, that
(i) the terms and provisions of this Leasehold Deed of Trust pertaining to the
priority, perfection, enforcement or realization by Beneficiary of its
respective rights and remedies under this Leasehold Deed of Trust with respect
to the Trust Estate shall be governed and construed and enforced in accordance
with the internal laws of the State of Nevada (the "State") without giving
effect to the conflicts-of- law rules and principles of the State; (ii) Trustor
agrees that to the extent deficiency judgments are available under the laws of
the State after a foreclosure (judicial or nonjudicial) of the Trust Estate, or
any portion thereof, or any other realization thereon by Beneficiary,
Beneficiary shall have the right to seek such a deficiency judgment against
Trustor in the State; and (iii) Trustor agrees that if Beneficiary obtains a
deficiency judgment in another state against Trustor, then Beneficiary shall
have the right to enforce such judgment in the State to the extent permitted
under the laws of the State, as well as in other states. Nothing contained in
this Section 6.9 shall be deemed to expand the limitations set forth in Section
12.08 of the Mortgage Notes Indenture.
6.10 Required Notices. Trustor shall notify Beneficiary promptly of the
occurrence of any of the following and shall immediately provide Beneficiary a
copy of the notice or documents referred to: (i) receipt of notice from any
Governmental Instrumentality relating to all or any material part of the Trust
Estate if such notice relates to a default or act, omission or circumstance
which would result in a default after notice or passage of time or both; (ii)
receipt of any notice from any tenant leasing all or any material portion of the
Trust Estate if such notice relates to a default or act, omission or
circumstance which would result in a default after notice or passage of time or
both; (iii) receipt of notice from the holder of any GCCLLC
43
Permitted Encumbrance relating to a default or act, omission or circumstance
which would result in a default after notice or passage of time or both; (iv)
the commencement of any proceedings or the entry of any judgment, decree or
order materially affecting all or any portion of the Trust Estate or which
involve the potential liability of Trustor or its Affiliates in an amount in
excess of $25,000,000 (other than for personal injury actions and related
property damage suits which are covered by such insurance); or (v) commencement
of any judicial or administrative proceedings or the entry of any judgment,
decree or order by or against or otherwise affecting Trustor or any Affiliate of
Trustor, a material portion of the Trust Estate, or a material portion of the
Personal Property, or any other action by any creditor or lessor thereof as a
result of any default under the terms of any lease.
6.11 Reconveyance. Upon written request of Trustor after the Obligations
secured hereby have been satisfied in full, Beneficiary shall cause Trustee to
reconvey, without warranty, the property then held hereunder. The recitals in
such reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof. The grantee in such reconveyance may be described as "the
person or persons legally entitled thereto."
6.12 Attorneys' Fees. Without limiting any other provision contained
herein, Trustor agrees to pay all costs of Beneficiary or Trustee incurred in
connection with the enforcement of this Leasehold Deed of Trust of the Notes,
including without limitation all reasonable attorneys' fees whether or not suit
is commenced, and including, without limitation, fees incurred in connection
with any probate, appellate, bankruptcy, deficiency or any other litigation
proceedings, all of which sums shall be secured hereby.
6.13 Late Charges. By accepting payment of any sum secured hereby after
its due date, Beneficiary does not waive its right to collect any late charge
thereon or interest thereon at the interest rate on the Notes, if so provided,
not then paid or its right either to require prompt payment when due of all
other sums so secured or to declare default for failure to pay any amounts not
so paid.
6.14 Cost of Accounting. Trustor shall pay to Beneficiary, for and on
account of the preparation and rendition of any accounting, which Trustor may be
entitled to require under any law or statute now or hereafter providing
therefor, the reasonable costs thereof.
6.15 Right of Entry. Subject to compliance with applicable Nevada Gaming
Laws, Beneficiary may at any reasonable time or times and on reasonable prior
written notice to Trustor make or cause to be made entry upon and inspections of
the Trust Estate or any part thereof in person or by agent.
6.16 Corrections. Trustor shall, upon request of Beneficiary or Trustee,
promptly correct any defect, error or omission which may be discovered in the
contents of this Leasehold Deed of Trust (including, but not limited to, in the
exhibits and schedules attached hereto) or in the execution or acknowledgement
hereof, and shall execute, acknowledge and deliver such further instruments and
do such further acts as may be necessary or as may be reasonably requested by
Trustee to carry out more effectively the purposes of this Leasehold Deed of
Trust, to subject to the lien and security interest hereby created any of
Trustor's properties,
44
rights or interest covered or intended to be covered hereby, and to perfect and
maintain such lien and security interest.
6.17 Statute of Limitations. To the fullest extent allowed by the law, the
right to plead, use or assert any statute of limitations as a plea or defense or
bar of any kind, or for any purpose, to any debt, demand or obligation secured
or to be secured hereby, or to any complaint or other pleading or proceeding
filed, instituted or maintained for the purpose of enforcing this Leasehold Deed
of Trust or any rights hereunder, is hereby waived by Trustor.
6.18 Subrogation. Should the proceeds of any loan or advance made by
Beneficiary to Trustor, repayment of which is hereby secured, or any part
thereof, or any amount paid out or advanced by Beneficiary, be used directly or
indirectly to pay off, discharge, or satisfy, in whole or in part, any prior or
superior lien or encumbrance upon the Trust Estate, or any part thereof, then,
as additional security hereunder, Trustee, on behalf of Beneficiary, shall be
subrogated to any and all rights, superior titles, liens, and equities owned or
claimed by any owner or holder of said outstanding liens, charges, and
indebtedness, however remote, regardless of whether said liens, charges, and
indebtedness are acquired by assignment or have been released of record by the
holder thereof upon payment.
6.19 Joint and Several Liability. All obligations of Trustor hereunder, if
more than one, are joint and several. Recourse for deficiency after sale
hereunder may be had against the property of Trustor, without, however, creating
a present or other lien or charge thereon.
6.20 Homestead. Trustor hereby waives and renounces all homestead and
exemption rights provided by the constitution and the laws of the United States
and of any state, in and to the Trust Estate as against the collection of the
Obligations, or any part hereof.
6.21 Context. In this Leasehold Deed of Trust, whenever the context so
requires, the neuter includes the masculine and feminine, and the singular
including the plural, and vice versa.
6.22 Time. Time is of the essence of each and every term, covenant and
condition hereof. Unless otherwise specified herein, any reference to "days" in
this Leasehold Deed of Trust shall be deemed to mean "calendar days."
6.23 Interpretation. As used in this Leasehold Deed of Trust unless the
context clearly requires otherwise: The terms "herein" or "hereunder" and
similar terms without reference to a particular section shall refer to the
entire Leasehold Deed of Trust and not just to the section in which such terms
appear; the term "lien" shall also mean a security interest, and the term
"security interest" shall also mean a lien.
6.24 Effect of NRS ss. 107.030. To the extent not inconsistent herewith,
the provisions of NRS ss. 107.030 are included herein by reference.
6.25 Amendments. This Leasehold Deed of Trust cannot be waived, changed,
discharged or terminated orally, but only by an instrument in writing signed by
the party
45
against whom enforcement of any waiver, change, discharge or termination is
sought and only as permitted by the provisions of the Mortgage Notes Indenture.
6.26 No Conflicts. In the event that any of the provisions contained
herein conflict with the Security Agreement, then the provisions contained in
the Security Agreement shall prevail.
ARTICLE SEVEN
POWER OF ATTORNEY
7.1 Grant of Power. Subject to compliance with applicable Nevada Gaming
Laws, Trustor irrevocably appoints Beneficiary and any successor thereto as its
attorney-in-fact, with full power and authority, including the power of
substitution, exercisable only during the continuance of an Event of Default to
act for Trustor in its name, place and stead as hereinafter provided:
7.1.1 Possession and Completion. To take possession of the Leased
Premises and the Project, remove all employees, contractors and agents of
Trustor therefrom, complete or attempt to complete the work of construction, and
market, sell or lease the Leased Premises and the Project.
7.1.2 Plans. To make such additions, changes and corrections in the
current Plans and Specifications as may be necessary or desirable, in
Beneficiary's reasonable discretion, or as it deems proper to complete the
Project.
7.1.3 Employment of Others. To employ such contractors,
subcontractors, suppliers, architects, inspectors, consultants, property
managers and other agents as Beneficiary, in its discretion, deems proper for
the completion of the Project, for the protection or clearance of title to the
Leased Premises or Personal Property, or for the protection of Beneficiary's
interests with respect thereto.
7.1.4 Security Guards. To employ watchmen to protect the Leased
Premises and the Project from injury.
7.1.5 Compromise Claims. To pay, settle or compromise all bills and
claims then existing or thereafter arising against Trustor, which Beneficiary,
in its discretion, deems proper for the protection or clearance of title to the
Leased Premises or Personal Property, or for the protection of Beneficiary's
interests with respect thereto.
7.1.6 Legal Proceedings. To prosecute and defend all actions and
proceedings in connection with the Leased Premises or the Project.
46
7.1.7 Other Acts. To execute, acknowledge and deliver all other
instruments and documents in the name of Trustor that are necessary or
desirable, to exercise Trustor's rights under all contracts concerning the
Leased Premises or the Project, including, without limitation, under any Space
Leases, and to do all other acts with respect to the Leased Premises or the
Project that Trustor might do on its own behalf, as Beneficiary, in its
reasonable discretion, deems proper.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
47
IN WITNESS WHEREOF, Trustor has executed this Leasehold Deed of Trust,
Assignment of Rents and Leases and Security Agreement to be effective as of the
day and year first above written.
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC,
a Delaware limited liability company, as Trustor
BY: VENETIAN CASINO RESORT, LLC,
a Nevada limited liability company,
its member
BY: LAS VEGAS SANDS, INC.,
a Nevada corporation,
its managing member
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss:
COUNTY OF NEW YORK )
This instrument was acknowledged before me on November 14, 1997 by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the President of Las Vegas Sands, Inc., the managing
member of Venetian Casino Resort, LLC, the member of Grand Canal Shops Mall
Construction, LLC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
NOTARY PUBLIC
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of New York
No. 01MO5086188
Qualified in New York County
Commission Expires Oct. 6, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss:
COUNTY OF NEW YORK )
This instrument was acknowledged before me on November 14, 1997 by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the President of Las Vegas Sands, Inc., the managing
member of Venetian Casino Resort, LLC, the member of Grand Canal Shops Mall
Construction, LLC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
NOTARY PUBLIC
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public, State of New York
No. 01MO5086188
Qualified in New York County
Commission Expires Oct. 6, 1999
1
TABLE OF CONTENTS
ARTICLE ONE
COVENANTS OF TRUSTOR........................... 14
1.1 Performance of Financing Agreements................................ 14
1.2 Leasehold Estate................................................... 14
1.3 General Representations, Covenants and Warranties.................. 15
1.4 Payment of Expenses of the Subject Leases.......................... 15
1.5 Trustor's Covenants with Respect to the Subject Leases............. 15
1.6 Compliance with Legal Requirements................................. 17
1.7 Taxes.............................................................. 17
1.8 Insurance.......................................................... 17
1.9 Condemnation....................................................... 18
1.10 Care of Trust Estate............................................... 19
1.11 Leases............................................................. 19
1.12 Further Encumbrance................................................ 20
1.13 Partial Releases of Trust Estate................................... 21
1.14 Further Assurances................................................. 22
1.15 Security Agreement and Financing Statements........................ 23
1.16 Assignment of Rents and Leases..................................... 25
1.17 Expenses........................................................... 25
1.18 Beneficiary's Cure of Trustor's Default............................ 26
1.19 Use of Leased Premises............................................. 27
1.20 Compliance with Permitted Lien Agreements.......................... 27
1.21 Defense of Actions................................................. 27
1.22 Affiliates......................................................... 27
1.23 Title Insurance.................................................... 28
ARTICLE TWO
CORPORATE LOAN PROVISIONS........................ 28
2.1 Interaction with Mortgage Notes Indenture.......................... 28
2.2 Other Collateral................................................... 28
2.4 Subordination to Cooperation Agreement and HVAC Ground Lease....... 29
ARTICLE THREE
DEFAULTS............................... 29
3.1 Event of Default................................................... 29
ARTICLE FOUR
REMEDIES................................. 29
i
4.1 Acceleration of Maturity........................................... 29
4.2 Protective Advances................................................ 30
4.3 Institution of Equity Proceedings.................................. 30
4.4 Beneficiary's Power of Enforcement................................. 30
4.5 Beneficiary's Right to Enter and Take Possession, Operate and Apply
Income............................................................. 31
4.6 Leases............................................................. 33
4.7 Purchase by Beneficiary............................................ 33
4.8 Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws................................................................33
4.9 Receiver........................................................... 33
4.10 Suits to Protect the Trust Estate.................................. 34
4.11 Proofs of Claim.................................................... 34
4.12 Trustor to Pay the Notes on Any Default in Payment; Application of
Monies by Beneficiary.............................................. 35
4.13 Delay or Omission; No Waiver....................................... 35
4.14 No Waiver of One Default to Affect Another......................... 35
4.15 Discontinuance of Proceedings; Position of Parties Restored........ 36
4.16 Remedies Cumulative................................................ 36
4.17 Interest After Event of Default.................................... 36
4.18 Foreclosure; Expenses of Litigation................................ 37
4.19 Deficiency Judgments............................................... 37
4.20 Waiver of Jury Trial............................................... 38
4.21 Exculpation of Beneficiary......................................... 38
ARTICLE FIVE
RIGHTS AND RESPONSIBILITIES OF TRUSTEE;
OTHER PROVISIONS RELATING TO TRUSTEE.................. 38
5.1 Exercise of Remedies by Trustee..................................... 38
5.2 Rights and Privileges of Trustee.................................... 38
5.3 Resignation or Replacement of Trustee............................... 39
5.4 Authority of Beneficiary............................................ 39
5.5 Effect of Appointment of Successor Trustee.......................... 39
5.6 Confirmation of Transfer and Succession............................. 40
5.7 Exculpation......................................................... 40
5.8 Endorsement and Execution of Documents.............................. 40
5.9 Multiple Trustees................................................... 40
5.10 Terms of Trustee's Acceptance....................................... 40
ARTICLE SIX
MISCELLANEOUS PROVISIONS......................... 41
6.1 Heirs, Successors and Assigns Included in Parties................... 41
6.2 Addresses for Notices, Etc.......................................... 41
6.3 Change of Notice Address............................................ 42
6.4 Headings............................................................ 42
6.5 Invalid Provisions to Affect No Others.............................. 42
ii
6.6 Changes and Priority Over Intervening Liens......................... 42
6.7 Estoppel Certificates............................................... 42
6.8 Waiver of Setoff and Counterclaim................................... 43
6.9 Governing Law....................................................... 43
6.10 Required Notices.................................................... 43
6.11 Reconveyance........................................................ 44
6.12 Attorneys' Fees..................................................... 44
6.13 Late Charges........................................................ 44
6.14 Cost of Accounting.................................................. 44
6.15 Right of Entry...................................................... 44
6.16 Corrections......................................................... 44
6.17 Statute of Limitations.............................................. 45
6.18 Subrogation......................................................... 45
6.19 Joint and Several Liability......................................... 45
6.20 Homestead........................................................... 45
6.21 Context............................................................. 45
6.22 Time................................................................ 45
6.23 Interpretation...................................................... 45
6.24 Effect of NRS ss. 107.030........................................... 45
6.25 Amendments.......................................................... 46
6.26 No Conflicts........................................................ 46
ARTICLE SEVEN
POWER OF ATTORNEY............................ 46
7.1 Grant of Power...................................................... 46
7.1.1 Possession and Completion........................................... 46
7.1.2 Plans............................................................... 46
7.1.3 Employment of Others................................................ 46
7.1.4 Security Guards..................................................... 46
7.1.5 Compromise Claims................................................... 46
7.1.6 Legal Proceedings................................................... 46
7.1.7 Other Acts.......................................................... 47
Exhibit A-1 (MALL LEASE)
Exhibit A-2 LEGAL DESCRIPTION (MALL LEASED PREMISES)
Exhibit A-3 (BILLBOARD MASTER LEASE)
Exhibit A-4 LEGAL DESCRIPTION (BILLBOARD LEASED PREMISES)
Exhibit B CONTEMPLATED CONDEMNATION
Exhibit C ENUMERATED NAMES
iii