EXHIBIT 10.6
THIS DEED OF TRUST WAS PREPARED BY
AND WHEN RECORDED, RETURN TO:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Reference No.: 024819 0034
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
made by
LAKES GAMING-MISSISSIPPI, LLC
(TRUSTOR)
to
▇. ▇▇▇▇▇ TELLER, ESQ.
(TRUSTEE)
for the benefit of
BANK OF AMERICA, N.A.
(BENEFICIARY)
PROPERTY LOCATION:
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ County, Mississippi
DATED AS OF JUNE 22, 2006
THIS ALSO CONSTITUTES FINANCING STATEMENTS FILED AS A FIXTURE FILING AND
FINANCING STATEMENT PURSUANT TO SECTIONS 9501(A)(1) AND 9502(B) AND (C) OF THE
MISSISSIPPI UNIFORM COMMERCIAL CODE AND IS RECORDED AS A FIXTURE FILING
THIS DEED OF TRUST SECURES A LINE OF CREDIT TO BE ADVANCED AND USED FOR BUSINESS
AND COMMERCIAL PURPOSES
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS............................................................................................ 2
SECTION 1.01 Terms Defined Above................................................................... 2
SECTION 1.02 Definitions........................................................................... 2
SECTION 1.03 Terminology........................................................................... 5
SECTION 1.04 Other Defined Terms................................................................... 6
ARTICLE II GRANT OF LIEN AND SECURITY INTEREST................................................................... 6
SECTION 2.01 Grant of Lien......................................................................... 6
SECTION 2.02 Grant of Security Interest............................................................ 6
SECTION 2.03 No Obligation of Beneficiary.......................................................... 7
SECTION 2.04 Fixture Filing........................................................................ 7
SECTION 2.05 Future Advances....................................................................... 7
SECTION 2.06 Intentionally Omitted................................................................. 7
ARTICLE III ASSIGNMENT OF LEASES AND RENTS....................................................................... 7
SECTION 3.01 Assignment............................................................................ 7
SECTION 3.02 Revocable License..................................................................... 8
SECTION 3.03 Enforcement of Leases................................................................. 8
SECTION 3.04 Direction to Tenants.................................................................. 9
SECTION 3.05 Appointment of Attorney-in-Fact....................................................... 9
SECTION 3.06 No Liability of Beneficiary........................................................... 10
SECTION 3.07 Trustor's Indemnities................................................................. 10
SECTION 3.08 No Modification of Trustor's Obligations.............................................. 10
SECTION 3.09 Rights in Bankruptcy.................................................................. 11
SECTION 3.10 Right to Enforce Under California Civil Code Section 2938............................. 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................ 11
SECTION 4.01 Title to Trust Property and Lien of this Deed of Trust................................ 11
SECTION 4.02 Taxes and Other Payments.............................................................. 12
SECTION 4.03 Power to Create Lien and Security..................................................... 12
SECTION 4.04 Loan and Credit Agreements............................................................ 12
SECTION 4.05 Compliance with Laws.................................................................. 12
SECTION 4.06 No Condemnation....................................................................... 12
SECTION 4.07 Flood Zone............................................................................ 13
SECTION 4.08 Additional Environmental Representation............................................... 13
ARTICLE V AFFIRMATIVE COVENANTS.................................................................................. 13
SECTION 5.01 Lien Status........................................................................... 13
SECTION 5.02 Payment of Impositions................................................................ 13
SECTION 5.03 Repair................................................................................ 14
SECTION 5.04 Insurance and Application of Insurance Proceeds....................................... 14
SECTION 5.05 Condemnation and Application of Condemnation Proceeds................................. 16
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SECTION 5.06 Maintenance of Rights of Way, Easements, Licenses and Other Rights.................... 17
SECTION 5.07 Payment and Performance of Obligations................................................ 17
SECTION 5.08 Compliance with Permitted Liens and Other Obligations................................. 17
SECTION 5.09 Additional Affirmative Covenants...................................................... 18
ARTICLE VI NEGATIVE COVENANTS.................................................................................... 18
SECTION 6.01 Use Violations........................................................................ 18
SECTION 6.02 Waste................................................................................. 18
SECTION 6.03 Alterations........................................................................... 18
SECTION 6.04 No Further Encumbrances............................................................... 18
SECTION 6.05 Transfer Restrictions................................................................. 18
SECTION 6.06 Loan and Credit Agreements; Additional Negative Covenants............................. 18
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES....................................................................... 19
SECTION 7.01 Event of Default...................................................................... 19
SECTION 7.02 Acceleration.......................................................................... 19
SECTION 7.03 Foreclosure and Sale.................................................................. 19
SECTION 7.04 Trustee's Successors, Substitutes and Agents.......................................... 20
SECTION 7.05 Receivership.......................................................................... 20
SECTION 7.06 Judicial Foreclosure.................................................................. 21
SECTION 7.07 Separate Sales........................................................................ 21
SECTION 7.08 Possession of Trust Property.......................................................... 21
SECTION 7.09 Occupancy After Foreclosure........................................................... 22
SECTION 7.10 Remedies Cumulative, Concurrent and Nonexclusive...................................... 22
SECTION 7.11 No Release of Obligations............................................................. 22
SECTION 7.12 Release of and Resort to Collateral................................................... 23
SECTION 7.13 Waiver of Redemption, Notice and Marshalling of Assets................................ 23
SECTION 7.14 Discontinuance of Proceedings......................................................... 23
SECTION 7.15 Application of Proceeds............................................................... 23
SECTION 7.16 Uniform Commercial Code Remedies...................................................... 24
SECTION 7.17 Indemnity............................................................................. 24
SECTION 7.18 Waiver of Lien........................................................................ 24
SECTION 7.19 Action for Environmental Claims....................................................... 24
ARTICLE VIII TRUSTEE............................................................................................. 25
SECTION 8.01 Duties, Rights, and Powers of Trustee................................................. 25
SECTION 8.02 Successor Trustee..................................................................... 25
SECTION 8.03 Retention of Moneys................................................................... 26
SECTION 8.04 Reconveyance.......................................................................... 26
ARTICLE IX MISCELLANEOUS......................................................................................... 26
SECTION 9.01 Instrument Construed as Deed of Trust, Etc............................................ 26
SECTION 9.02 Performance at Trustor's Expense...................................................... 26
SECTION 9.03 Survival of Obligations............................................................... 26
SECTION 9.04 Further Assurances.................................................................... 26
SECTION 9.05 Notices............................................................................... 26
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SECTION 9.06 No Waiver............................................................................. 27
SECTION 9.07 Beneficiary's Right to Perform; Beneficiary's Expenditures............................ 27
SECTION 9.08 Successors and Assigns................................................................ 28
SECTION 9.09 Severability.......................................................................... 28
SECTION 9.10 Subrogation of Trustee................................................................ 28
SECTION 9.11 Entire Agreement and Modification..................................................... 28
SECTION 9.12 Applicable Law........................................................................ 28
SECTION 9.13 Satisfaction of Prior Encumbrance..................................................... 29
SECTION 9.14 No Partnership........................................................................ 29
SECTION 9.15 Headings.............................................................................. 30
SECTION 9.16 Release of Deed of Trust.............................................................. 30
SECTION 9.17 Limitation of Obligations with Respect to Trust Property.............................. 30
SECTION 9.18 Inconsistency with Credit Agreement................................................... 30
SECTION 9.19 Limitation on Interest Payable........................................................ 31
SECTION 9.20 Covenants To Run With the Land........................................................ 31
SECTION 9.21 Amount Secured; Last Dollar........................................................... 31
SECTION 9.22 Defense of Claims..................................................................... 31
SECTION 9.23 Exculpation Provisions................................................................ 32
SECTION 9.24 No Merger of Estates.................................................................. 32
SECTION 9.25 Suretyship Waivers.................................................................... 32
SECTION 9.26 Beneficiary Statement................................................................. 32
SECTION 9.27 Request for Notice.................................................................... 32
SECTION 9.28 Release and Reconveyance.............................................................. 32
EXHIBIT A - LEGAL DESCRIPTION
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DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (hereinafter, together with any and all amendments, supplements,
modifications or restatements of any kind, referred to as this "Deed of Trust"),
is made as of June 22, 2006, by LAKES GAMING-MISSISSIPPI, LLC, a Minnesota
limited liability company ("Trustor"), having its principal place of business at
c/o Lakes Entertainment, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., to ▇. ▇▇▇▇▇ Teller, Esq., an
individual, with an address at c/o Teller, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP,
Nogales Building, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (including any
successor trustee at the time acting as such hereunder, "Trustee"), for the
benefit of BANK OF AMERICA, N.A., having its principal place of business at ▇▇▇
▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
(in such capacity, together with its successors and assigns, "Beneficiary"), for
itself and in its capacity of Administrative Agent ("Administrative Agent") for
each of the financial institutions and their respective successors and assigns
which from time to time shall be a "Lender" under the Credit Agreement (as
hereinafter defined).
R E C I T A L S:
WHEREAS, Trustor, a subsidiary of Parent, as hereinafter defined, is
the owner and holder of fee simple title in and to the Land (as hereinafter
defined) described on Exhibit A attached hereto and made a part hereof;
WHEREAS, on the date hereof, Trustor, Lakes Entertainment, Inc.
("Parent"), Lakes Gaming and Resorts, LLC ("Borrower") and the Guarantors (as
defined in the Credit Agreement) entered into that certain Credit Agreement with
Beneficiary, the Lenders party thereto and Banc of America Securities LLC, as
sole lead arranger and sole book manager (as the same may be amended, modified
or otherwise supplemented and in effect from time to time, the "Credit
Agreement"), pursuant to which the Lenders agreed to extend to Borrower a
certain senior secured term loan facility in the aggregate original principal
amount of up to ONE HUNDRED AND FIVE MILLION and 00/100 Dollars
($105,000,000.00) (the "Loan");
WHEREAS, Trustor will derive direct economic benefit from the Loan;
WHEREAS, as a condition to Beneficiary executing the Credit
Agreement, Beneficiary is requiring that Trustor grant to Beneficiary, on behalf
of the Lenders, a security interest in and a first deed of trust lien upon the
Trust Property (as hereinafter defined), to secure (a) the payment of all of the
obligations of Trustor under the Credit Agreement, this Deed of Trust, and the
other Loan Documents (as hereinafter defined), and (b) the performance by
Trustor of all terms, covenants, conditions, provisions, agreements and
liabilities contained in the Credit Agreement, this Deed of Trust, and the other
Loan Documents.
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NOW, THEREFORE, in order to comply with the terms and conditions of
the Credit Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Trustor hereby agrees with
Beneficiary as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Terms Defined Above. As used in this Deed of Trust, the
terms defined in the introductory paragraph to this Deed of Trust and in the
Recitals set forth above shall have the meanings respectively assigned to them
above.
SECTION 1.02 Definitions. As used herein, the following terms shall
have the following meanings:
"Applicable UCC" means the Uniform Commercial Code as presently in
effect in the State or Commonwealth where the Trust Property is located.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.
Section. 101, et. seq.), as amended, and any successor statute.
"Buildings" means any and all buildings, structures, garages,
utility sheds, workrooms, air conditioning towers, open parking areas and other
improvements, and any and all additions, alterations, betterments or
appurtenances thereto, now or at any time hereafter situated, placed or
constructed upon the Land or any part thereof.
"Default" has the meaning assigned to such term in the Credit
Agreement.
"Default Rate" has the meaning assigned to such term in the Credit
Agreement.
"Event of Default" has the meaning assigned to such term in Section
7.01 hereof.
"Fixtures" means all materials, supplies, equipment, apparatus and
other items now or hereafter acquired by Trustor and incorporated into the Trust
Property so as to constitute fixtures under the laws of the state in which such
items are located.
"Governmental Authority" has the meaning assigned to such term in
the Credit Agreement.
"Governmental Requirements" means any and all present and future
judicial decisions, statutes, rulings, rules, regulations, permits, certificates
or ordinances of any Governmental Authority in any way applicable to Trustor or
the Trust Property, including the ownership, use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction thereof.
"Impositions" means any and all real estate and personal property
taxes; water, gas, sewer, electricity and other utility rates and charges;
charges for any easement, license or agreement maintained for the benefit of the
Trust Property; any and all other taxes, charges and
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assessments, whether general or special, ordinary or extraordinary, foreseen or
unforeseen, of any kind and nature whatsoever which at any time prior to or
after the execution hereof may be assessed, levied or imposed upon the Trust
Property or the ownership, use, occupancy, benefit or enjoyment thereof,
together with any interest, costs or penalties that may become payable in
connection therewith.
"Indemnified Parties" means, with respect to any Person entitled to
the benefit of an indemnity, such Person's officers, directors, shareholders,
partners, members, managers, employees, agents, representatives, attorneys,
accountants and experts. The term "Indemnified Party" means any one of such
Persons.
"Indemnitees" has the meaning assigned to such term in the Credit
Agreement.
"Land" means the real property or interest therein described in
Exhibit A attached hereto, and all rights, titles and interests appurtenant
thereto.
"Leases" means any and all leases, master leases, subleases,
licenses, concessions or other agreements (whether written or oral, and whether
now or hereafter in effect) which grant to third Persons a possessory interest
in and to, or the right to use, all or any part of the Land, the Buildings, the
Fixtures and/or the Personalty, together with all security and other deposits
made in connection therewith and any guarantee of the obligations of the
landlord or the tenant thereunder.
"License" has the meaning assigned to such term in Section 3.02(a)
hereof.
"Lien" has the meaning assigned to such term in the Credit
Agreement.
"Loan Documents" means, collectively, the Credit Agreement, this
Deed of Trust, and all other instruments, agreements and other documents
executed and delivered pursuant hereto or thereto or otherwise included in the
definition of the term "Loan Documents" in the Credit Agreement.
"Losses" means all obligations, damages, claims, causes of action,
costs, fines, fees, charges, penalties, deficiencies, losses, diminutions in
value, expenses (including court costs, fees and expenses of attorneys,
accountants, consultants and other experts) and other liabilities, and, with
respect to any indemnity, includes all attorneys' fees, costs and expenses in
connection with the enforcement and collection of such indemnity. The term
"Loss" means any one of such Losses.
"Trust Property" means all of Trustor's right, title, interest and
estate, whether now owned or hereafter acquired, in and to the Land, the
Buildings, the Fixtures and the Personalty, together with:
(i) all rights, privileges, tenements, hereditaments,
rights-of-way, easements, air rights, development rights or
credits, zoning rights, appendages and appurtenances in
anywise appertaining thereto, and all right, title and
interest of Trustor in and to any streets, ways, alleys,
strips or gores of land adjoining the Land or any part
thereof, and all right, title and interest
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of Trustor, if any, in and to all rights, royalties and
profits with respect to all minerals, coal, oil, gas and other
substances of any kind or character on or underlying the Land,
together with all right, title and interest of Trustor in and
to all water and water rights (whether riparian, appropriative
or otherwise and whether or not appurtenant);
(ii) all rights of Trustor (but not its obligations) under any
contracts and agreements, including, without limitation,
construction contracts and architectural agreements, relating
to the Land, the Buildings, the Fixtures or the Personalty;
(iii) all of Trustor's right, title and interest in and to all
permits, licenses, franchises, certificates, authorizations,
consents, approvals and other rights and privileges (each, a
"Permit") obtained in connection with the Land, the Buildings,
the Fixtures or the Personalty or the use or operation
thereof;
(iv) all of Trustor's right, title and interest in and to all plans
and specifications, designs, schematics, drawings and other
information, materials and matters heretofore or hereafter
prepared relating to the Land, the Buildings, the Fixtures or
the Personalty;
(v) all of Trustor's right, title and interest in and to all
proceeds arising from or by virtue of the sale, lease or other
disposition of the Land, the Buildings, the Fixtures or the
Personalty or any part thereof or any interest therein or from
the operation thereof;
(vi) all of Trustor's right, title and interest in and to all
Leases now or hereafter in effect and all Rents, royalties,
bonuses, issues, profits, revenues or other benefits arising
from or attributable to the Land, the Buildings, the Fixtures
or the Personalty;
(vii) all of Trustor's right, title and interest in and to all
betterments, additions, alterations, appurtenances,
substitutions, replacements and revisions to the Land, the
Buildings, the Fixtures or the Personalty and all reversions
and remainders relating thereto;
(viii) all of Trustor's right, title and interest in and to any
awards, remuneration, settlements or compensation now or
hereafter made by any Governmental Authority pertaining to the
Land, the Buildings, the Fixtures or the Personalty, including
those arising from or attributable to any vacation of, or
change of grade in, any streets affecting the Land or the
Buildings;
(ix) all of Trustor's right, title and interest in and to any and
all other security and collateral of any nature whatsoever,
whether now or hereafter given, for the repayment, performance
and discharge of the Obligations (as hereinafter defined);
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(x) all of Trustor's right, title and interest in and to all
awards, payments and proceeds of conversion, whether voluntary
or involuntary, of any of the Land, the Buildings, the
Fixtures, the Personalty or any of the property and rights
described in the foregoing clauses (i) through (ix), including
without limitation, all insurance, condemnation and tort
claims, refunds of real estate taxes and assessments, rent
claims and other obligations dischargeable in cash or cash
equivalents; and
(xi) all other property and rights of Trustor of every kind and
character relating to and/or used or to be used in connection
with the foregoing, and all proceeds and products of any of
the foregoing.
As used in this Deed of Trust, the term "Trust Property" shall be expressly
defined as meaning all or, where the context permits or requires, any portion of
the above, and all or, where the context permits or requires, any interest
therein.
"Obligations" has the meaning assigned to such term in the Credit
Agreement.
"Permitted Liens" has the meaning assigned to such term in the
Credit Agreement.
"Person" has the meaning assigned to such term in the Credit
Agreement.
"Personalty" means all of Trustor's right, title and interest in and
to all furniture, furnishings, equipment, machinery, goods, general intangibles,
money, insurance proceeds, contract rights, option rights, inventory, together
with all refundable, returnable or reimbursable fees, deposits or other funds or
evidences of credit or indebtedness deposited by or on behalf of Trustor with
any Governmental Authority, boards, corporations, providers of utility services,
public or private, including all refundable, returnable or reimbursable tap
fees, utility deposits, commitment fees and development costs, and all other
personal property (other than Fixtures) of any kind or character), and including
such property that is now or hereafter located or to be located upon, within or
about the Land and the Buildings, or which are or may be used in or related to
the planning, development, financing or operation of the Trust Property,
together with all accessories, replacements and substitutions thereto or
therefor and the proceeds thereof.
"Principal Balance" has the meaning assigned to such term in Section
7.02 hereof.
"Rents" means all of the rents, revenues, income, proceeds, issues,
profits, security and other types of deposits (after Trustor acquires title
thereto), and other benefits paid or payable by parties (other than Trustor) for
using, leasing, licensing, possessing, operating from, residing in, benefiting
from or otherwise enjoying all or any part of the Land, the Buildings, the
Fixtures and/or the Personalty.
SECTION 1.03 Terminology. Except as otherwise provided herein:
(a) references to Articles and Sections shall mean the corresponding
Article or Section of this Deed of Trust;
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(b) words used herein in the singular, where the context so permits,
shall be deemed to include the plural and vice versa, and the definitions of
words used in the singular herein shall apply to such words when used in the
plural where the context so permits and vice versa;
(c) the words "herein," "hereof," "hereunder," and other words of
similar import when used in this Deed of Trust refer to this Deed of Trust as a
whole, and not to any particular Article or Section; and
(d) the words "includes" or "including" mean includes or including,
without limitation.
SECTION 1.04 Other Defined Terms. Any capitalized term used in this
Deed of Trust and not otherwise defined herein shall have the meaning assigned
to such term in the Credit Agreement.
ARTICLE II
GRANT OF LIEN AND SECURITY INTEREST
SECTION 2.01 Grant of Lien. To secure the full and timely payment,
performance and discharge of all of the Obligations, Trustor hereby irrevocably
GRANTS, BARGAINS, SELLS, ASSIGNS, TRANSFERS and CONVEYS unto Trustee and
Trustee's successors, assigns and substitutes in trust hereunder, WITH POWER OF
SALE and right of entry and possession, for the use and benefit of Beneficiary,
in its capacity as Administrative Agent for the Lenders, the real and personal
property, right, title, interest and estate in, to and under the Trust Property,
subject, however, to the Permitted Liens; TO HAVE AND TO HOLD the Trust Property
unto Trustee and Trustee's successors, assigns and substitutes in trust
hereunder, subject to the terms and conditions of this Deed of Trust, with POWER
OF SALE, forever, and Trustor does hereby bind itself, its successors and
assigns to WARRANT AND FOREVER DEFEND the title to the Trust Property unto
Beneficiary against every Person whomsoever lawfully claiming or to claim the
same or any part, subject, however, to the Permitted Liens; provided, however,
that if Trustor shall pay (or cause to be paid) and perform and discharge (or
cause to be performed and discharged) all of the Obligations on or before the
date on which the same are to be paid, performed and discharged, then the Liens
estates and rights granted by this Deed of Trust shall cease and terminate.
SECTION 2.02 Grant of Security Interest. This Deed of Trust shall
also constitute and serve as a "security agreement" within the meaning of, and
shall constitute a first and prior security interest under, the Applicable UCC
with respect to the Personalty and the Fixtures. To this end, Trustor by these
presents does GRANT, BARGAIN, CONVEY, ASSIGN, SELL, TRANSFER and SET OVER unto
Beneficiary, as Administrative Agent for the Lenders pursuant to the Credit
Agreement, a security interest in all of Trustor's right, title and interest in,
to and under the Personalty and the Fixtures, to secure the full and timely
payment, performance and discharge of the Obligations. Trustor hereby consents
to Beneficiary filing and recording financing statements (and continuations
thereof) with the appropriate filing and recording offices in order to perfect
(and maintain the perfection of) the security interests granted herein.
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SECTION 2.03 No Obligation of Beneficiary. The assignment and
security interest herein granted to Beneficiary shall not be deemed or construed
to constitute Beneficiary as a mortgagee-in-possession of the Trust Property,
obligate Beneficiary to lease the Trust Property or attempt to do the same, or
to take any action, incur any expense or perform or discharge any obligation,
duty or liability whatsoever.
SECTION 2.04 Fixture Filing. Without in any manner limiting the
generality of any of the other provisions of this Deed of Trust: (a) some
portions of the goods described or to which reference is made herein are or are
to become fixtures on the Land described or to which reference is made herein or
on Exhibit A attached to this Deed of Trust; (b) this Deed of Trust is to be
filed of record in the real estate records as a financing statement and shall
constitute a "fixture filing" for purposes of the Applicable UCC; and (c)
Trustor is the record owner of the real estate or interests in the real estate
constituting the Trust Property hereunder. Information concerning the security
interest herein granted may be obtained at the addresses set forth on the first
page hereof. The addresses of the Secured Party (Beneficiary) and of the Debtor
(Trustor) are set forth on the first page hereof. In that regard, the following
information is provided:
Name of Debtor: LAKES GAMING-MISSISSIPPI, LLC
Type of Organization: limited liability company
State: Minnesota
FEIN: ▇▇-▇▇▇▇▇▇▇
Organizational ID Number: 1011317-2
SECTION 2.05 Future Advances. It is the intention of Trustor and
Beneficiary that this Deed of Trust shall secure future advances and
readavances, and the lien and security interest created by this Deed of Trust
shall attach upon execution and have priority from the time of recording as to
all advances, whether obligatory or discretionary, until this Deed of Trust is
released of record.
ARTICLE III
ASSIGNMENT OF LEASES AND RENTS
SECTION 3.01 Assignment. For Ten Dollars ($10.00) and other good and
valuable consideration, including the indebtedness evidenced by the Credit
Agreement, the receipt and sufficiency of which are hereby acknowledged and
confessed, Trustor has presently, absolutely and irrevocably GRANTED, ASSIGNED,
TRANSFERRED and CONVEYED, and by these presents does presently, absolutely and
irrevocably GRANT, ASSIGN, TRANSFER and CONVEY, unto Beneficiary, as
Administrative Agent for the Lenders pursuant to the Credit Agreement, as
security for the payment, performance and discharge of the Obligations, all of
the Leases and Rents (if any), subject only to the Permitted Liens applicable
thereto and the License (as hereinafter defined); provided, however, that if
Trustor shall pay (or cause to be paid) and perform and discharge (or cause to
be performed and discharged) all of the Obligations on or before the date on
which the same are to be paid, performed and discharged, then this assignment
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shall terminate, and all rights, titles and interests conveyed pursuant to this
assignment shall become vested in Trustor.
SECTION 3.02 Revocable License.
(a) Beneficiary hereby grants to Trustor a revocable license (the
"License"), nonexclusive with the rights of Beneficiary reserved in Sections
3.02(b), 3.04, and 3.05 hereof, to exercise and enjoy all incidences of the
status of a lessor under the Leases and the Rents, including, without
limitation, the right to collect, demand, ▇▇▇ for, attach, levy, recover and
receive the Rents and to give proper receipts, releases and acquittances
therefor. Trustor hereby agrees to receive all Rents and hold the same as a
trust fund to be applied, and to apply the Rents so collected, except to the
extent otherwise provided in the Credit Agreement, first to the payment,
performance and discharge of the Obligations and then to the payment of the
Impositions. Thereafter, Trustor may use the balance of the Rents collected in
any manner not inconsistent with the Loan Documents.
(b) If an Event of Default shall occur and be continuing, the
License shall immediately and automatically terminate without the necessity of
any action by Beneficiary or any other Person, and Beneficiary shall have the
right in such event to exercise the rights and remedies provided under this Deed
of Trust or otherwise available to Beneficiary under applicable law. Upon demand
by Beneficiary at any time that an Event of Default shall have occurred, Trustor
shall promptly pay to Beneficiary all security deposits under the Leases and all
Rents allocable to any period commencing from and after the occurrence of such
Event of Default. Any Rents received hereunder by Beneficiary shall be applied
and disbursed to the payment, performance and discharge of the Obligations,
subject to the terms of the Credit Agreement; provided, however, that, subject
to any applicable requirement of law, any security deposits actually received by
Beneficiary shall be held, applied and disbursed as provided in the applicable
Leases.
SECTION 3.03 Enforcement of Leases. Trustor shall (a) submit any and
all proposed Leases (including subleases provided to Trustor for approval) to
Beneficiary for approval prior to the execution thereof or consent thereto, as
applicable; (b) duly and punctually perform and comply with any and all
representations, warranties, covenants and agreements expressed as binding upon
the lessor under any Lease; (c) maintain each Lease in full force and effect
during the term thereof; (d) provide Beneficiary with prompt notice of each
notice of default sent to a tenant under a Lease, provide Beneficiary with
prompt notice of each notice of default received from (or relating to) a tenant
under a Lease, and otherwise promptly reasonably indicate that a material
default or termination of a Lease may occur (other than by reason of the
expiration of the term of such Lease); (e) appear in and defend any action or
proceeding in any manner connected with any of the Leases; (f) deliver to
Beneficiary true and complete copies of all Leases; and (g) deliver to
Beneficiary all such further information, and execute and deliver to Beneficiary
such further assurances and assignments, with respect to the Leases as
Beneficiary may from time to time reasonably request. Without Beneficiary's
prior written consent, Trustor shall not (i) do or knowingly permit to be done
anything to materially impair the value of any of the Leases; (ii) except for
security or similar deposits, collect any of the Rent more than one (1) month in
advance of the time when the same becomes due under the terms of any Lease;
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(iii) discount any future accruing Rents; (iv) amend, modify, accept the
surrender of or terminate any of the Leases; or (v) assign or grant a security
interest in or to any of the Leases or Rents.
SECTION 3.04 Direction to Tenants. Upon the occurrence and during
the continuance of an Event of Default, Trustor hereby authorizes and directs,
and shall, at the direction of Beneficiary, further authorize and direct, in
writing, the tenant under each Lease to pay directly to, or as directed by,
Beneficiary all Rents accruing or due under its Lease without proof to the
tenant of the occurrence and continuance of such Event of Default. Trustor
hereby authorizes the tenant under each Lease to rely upon and comply with any
notice or demand from Beneficiary for payment of Rents to Beneficiary, and
Trustor shall have no claim against any tenant for Rents paid by such tenant to
Beneficiary pursuant to such notice or demand. All Rents actually collected by
Beneficiary pursuant to this Section 3.04 shall be applied in accordance with
the Credit Agreement.
SECTION 3.05 Appointment of Attorney-in-Fact.
(a) Trustor hereby constitutes and appoints Beneficiary the true and
lawful attorney-in-fact, coupled with an interest, of Trustor and Trustor hereby
confers upon Beneficiary the right, in the name, place and stead of Trustor, to,
upon the occurrence and during the continuance of an Event of Default, demand,
▇▇▇ for, attach, levy, recover and receive any of the Rents and any premium or
penalty payable upon the exercise by any third Person under any Lease of a
privilege of cancellation originally provided in such Lease and to give proper
receipts, releases and acquittances therefor and, after deducting expenses of
collection, to apply the net proceeds as provided in the Credit Agreement.
Trustor hereby authorizes and directs any such third Person to deliver such
payment to Beneficiary in accordance with this Article III, and Trustor hereby
ratifies and confirms all that its said attorney-in-fact, the Beneficiary, shall
do or cause to be done in accordance with this Deed of Trust and by virtue of
the powers granted hereby. The foregoing appointment is irrevocable and
continuing, and such rights, powers and privileges shall be exclusive in
Beneficiary, and its successors and assigns, so long as any part of the
Obligations remains unpaid or unperformed and undischarged.
(b) Trustor hereby constitutes and appoints Beneficiary the true and
lawful attorney-in-fact, coupled with an interest, of Trustor and Trustor hereby
confers upon Beneficiary the right, in the name, place and stead of Trustor, to
subject and subordinate at any time and from time to time any Lease or any part
thereof to the lien, assignment and security interest of this Deed of Trust and
to the terms hereof, or to any other mortgage, deed of trust, assignment or
security agreement, or to any ground lease or surface lease, with respect to all
or a portion of the Trust Property, or to request or require such subordination,
where such reservation, option or authority was reserved to Trustor under any
such Lease, or in any case where Trustor otherwise would have the right, power
or privilege so to do. The foregoing appointment is irrevocable and continuing,
and such rights, powers and privileges shall be exclusive in Beneficiary, and
its successors and assigns, so long as any part of the Obligations remains
unpaid or unperformed and undischarged. Trustor hereby represents and warrants
that it has not at any time prior to the date hereof exercised (or appointed any
Person as attorney-in-fact to exercise) any of the rights described in this
Section 3.05(b), and Trustor hereby covenants not to exercise (or appoint any
other Person as attorney-in-fact to exercise) any such right, nor (except at
Beneficiary's written request) to subordinate any such Lease to the lien of this
Deed of Trust or
9
to any other mortgage, deed of trust, assignment or security agreement or to any
ground lease or surface lease.
SECTION 3.06 No Liability of Beneficiary. Neither the acceptance
hereof nor the exercise of the rights and remedies hereunder nor any other
action on the part of Beneficiary or any Person exercising the rights of
Beneficiary or any Lender hereunder shall be construed to: (a) be an assumption
by Beneficiary or any such Person or to otherwise make Beneficiary or such
Person liable or responsible for the performance of any of the obligations of
Trustor under or with respect to the Leases or for any Rent, security deposit or
other amount delivered to Trustor, provided that Beneficiary or any such Person
exercising the rights of Beneficiary shall be accountable for any Rents,
security deposits or other amounts actually received by Beneficiary or such
Person, as the case may be; or (b) obligate Beneficiary or any such Person to
take any action under or with respect to the Leases or with respect to the Trust
Property, to incur any expense or perform or discharge any duty or obligation
under or with respect to the Leases or with respect to the Trust Property, to
appear in or defend any action or proceeding relating to the Leases or the Trust
Property, to constitute Beneficiary as a mortgagee-in-possession (unless
Beneficiary actually enters and takes possession of the Trust Property), or to
be liable in any way for any injury or damage to Persons or property sustained
by any Person in or about the Trust Property, other than to the extent caused by
the willful misconduct or gross negligence of Beneficiary or any Person
exercising the rights of Beneficiary hereunder.
SECTION 3.07 Trustor's Indemnities. Trustor hereby agrees to
protect, indemnify and hold harmless Beneficiary and each of the other
Indemnitees and each Indemnified Party related to Beneficiary or such other
Indemnitees from and against any and all Losses which Beneficiary or any such
other Indemnitees or Indemnified Party may incur under or by reason of this
Article III, or for any action taken by Beneficiary or any such other Lender or
Indemnified Party hereunder, or by reason or in defense of any and all claims
and demands whatsoever which may be asserted against Beneficiary or any such
other Indemnitees or Indemnified Party arising out of the Leases, including,
without limitation, any claim by any third Person for credit on account of Rents
paid to and received by Trustor, but not delivered to Beneficiary or its agents,
representatives or employees, for any period under any Lease more than one (1)
month in advance of the due date thereof. The foregoing indemnity shall include,
in any case, such Loss as may result from the ordinary negligence of Beneficiary
or such other Indemnitees or Indemnified Party, but not any such Loss that is
caused by the gross negligence or willful misconduct of Beneficiary or any such
other Indemnitees or Indemnified Party. In the event that Beneficiary or any of
the other Lenders or any Indemnified Party incurs any Losses covered by the
indemnity set forth in this Section 3.07, the amount thereof, including
reasonable attorneys' fees, with interest thereon at the Default Rate, shall be
payable by Trustor to Beneficiary within ten (10) days after demand therefor,
and shall be secured hereby and by all other security for the payment and
performance of the Obligations, including, without limitation, the lien and
security interest of this Deed of Trust. The liabilities of Trustor as set forth
in this Section 3.07 shall survive the termination of this Deed of Trust and the
repayment of the Obligations.
SECTION 3.08 No Modification of Trustor's Obligations. Nothing
herein contained shall modify or otherwise alter the obligation of Trustor to
make prompt payment of all Obligations as and when the same become due,
regardless of whether the Rents described in this Article III are sufficient to
pay the Obligations, and the security provided to Beneficiary
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pursuant to this Article III shall be cumulative of all other security of any
and every character now or hereafter existing to secure payment of the
Obligations.
SECTION 3.09 Rights in Bankruptcy. Upon execution of this Deed of
Trust, Beneficiary, and not Trustor, shall be the creditor of any Tenant in
respect of assignments for the benefit of creditors and bankruptcy,
reorganization, insolvency, dissolution or receivership proceedings affecting
any such Tenant; provided, however, that Trustor shall be the party obligated to
make timely filings of claims in such proceedings or to otherwise pursue
creditor's rights therein. Notwithstanding the foregoing, Beneficiary shall have
the right, but not the obligation, to file such claims instead of Trustor and if
Beneficiary does file a claim, Trustor agrees that Beneficiary (a) is entitled
to all distributions on such claim to the exclusion of Trustor and (b) has the
exclusive right to vote such claim and otherwise to participate in the
administration of the estate in connection with such claim. Beneficiary shall
have the option to apply any monies received by it as such creditor to any of
the obligations of Trustor under the Loan Documents the order set forth in the
Loan Documents. If a petition is filed under the Bankruptcy Code by or against
Trustor, and Trustor, as landlord under any Lease, decides to reject such Lease
pursuant to Section 365(a) of the Bankruptcy Code, then Trustor shall give
Beneficiary at least ten (10) days' prior written notice of the date when
Trustor shall apply to the bankruptcy court for authority to reject the Lease.
Beneficiary may, but shall not be obligated to, send Trustor within such ten-day
period a written notice stating that (a) Beneficiary demands that Trustor assume
and assign the Lease to Beneficiary pursuant to Section 365 of the Bankruptcy
Code, and (b) Beneficiary covenants to cure or provide adequate assurance of
future performance under the Lease. If Beneficiary sends such notice, Trustor
shall not reject the Lease provided Beneficiary complies with clause (b) of the
preceding sentence.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Trustor hereby unconditionally represents and warrants to Beneficiary (but to
the extent any representation or warranty in this Article IV is substantively
the same as a representation or warranty contained in Article V of the Credit
Agreement and such representation or warranty is qualified by a materiality or
other qualifier in the Credit Agreement, such representation or warranty herein
shall be subject to the same materiality or other qualifier as in Article V of
the Credit Agreement) as follows:
:
SECTION 4.01 Title to Trust Property and Lien of this Deed of Trust.
Trustor has good, marketable and indefeasible fee simple title to the Land and
the Buildings, and has good, marketable and indefeasible title to the Fixtures,
the Personalty and the other Trust Property. The Trust Property is free and
clear of any and all Liens, charges, encumbrances, security interests and
adverse claims whatsoever, except for (i) all Liens, charges, encumbrances,
security interests and adverse claims specifically identified as exceptions on
Schedule B of the policy of title insurance accepted by Beneficiary in
connection herewith or (ii) those Liens set forth in Section 5.08 of the Credit
Agreement.
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SECTION 4.02 Taxes and Other Payments. Trustor has filed all
federal, state, commonwealth, county, municipal and city income and other
material tax returns required to have been filed by it and has paid all taxes
and other Impositions which have become due pursuant to such returns or pursuant
to any assessments or charges received by it, and Trustor does not know of any
basis for any additional assessment or charge in respect of any such taxes or
other Impositions. Trustor has paid in full all sums owing or claimed for labor,
material, supplies, personal property (whether or not forming a Fixture
hereunder) and services of every kind and character used, furnished or installed
in or on the Trust Property that are now due and owing and no claim for same
exists or will be permitted to be created, except such claims as may arise in
the ordinary course of business and that are not yet past due.
SECTION 4.03 Power to Create Lien and Security. Trustor has full
power and lawful authority to grant, bargain, sell, assign, transfer, mortgage
and convey a Lien and security interest in all of the Trust Property in the
manner and form herein provided and without obtaining the authorization,
approval, consent or waiver of any grantor, lessor, sublessor, Governmental
Authority or other Person whomsoever.
SECTION 4.04 Loan and Credit Agreements. Trustor has received a copy
of and is fully familiar with the terms and provisions of the Credit Agreement
and the other Loan Documents. All representations and warranties made by Trustor
in the Credit Agreement and the other Loan Documents are incorporated herein by
reference and are hereby made by Trustor as to itself and the Trust Property as
though such representations and warranties were set forth at length herein as
the representations and warranties of Trustor.
SECTION 4.05 Compliance with Laws. All of the improvements on the
Land (i) comply with all material requirements of all applicable laws and
ordinances with respect to zoning, subdivision, construction, building and land
use, including, without limitation, requirements with respect to parking, access
and certificates of occupancy (and similar certificates), and (ii) comply with,
and shall remain in compliance with, applicable health, fire and building codes.
All of the Buildings lie wholly within the boundaries and building restriction
lines of the Land. No improvements on adjoining properties encroach upon the
Land, and no easements or other encumbrances upon the Land encroach upon or
under any of the Buildings or any portion of the Trust Property. All of the
Buildings and the use of the Trust Property materially comply with, and shall
remain in material compliance with, all applicable statutes, rules, regulations
and private covenants now or hereafter relating to the ownership, construction,
use or operation of the Trust Property, including all applicable statutes, rules
and regulations pertaining to requirements for equal opportunity,
anti-discrimination, fair housing, environmental protection, zoning and land
use. All certifications, permits, licenses and approvals, including, without
limitation, certificates of completion and occupancy permits required for the
legal use, occupancy and operation of the Trust Property have been obtained and
are in full force and effect. Trustor has not received any notice of, or other
communication with respect to, an alleged violation with respect to any of the
foregoing.
SECTION 4.06 No Condemnation. No part of any property subject to
this Deed of Trust has been taken in condemnation or other like proceeding nor
is any proceeding pending, threatened or known to be contemplated for the
partial or total condemnation or taking of the Trust Property.
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SECTION 4.07 Flood Zone. The Trust Property is not located in an
area identified by the Federal Emergency Management Agency ("FEMA") as having
special flood hazards or if the Land or any part thereof is identified by the
Federal Emergency Management Agency as an area having special flood hazards
(including, without limitation, those areas designated as Zone A or Zone V),
then Trustor has obtained the insurance required under Section 5.04(a)(v) of
this Deed of Trust.
ARTICLE V
AFFIRMATIVE COVENANTS
Trustor hereby unconditionally covenants and agrees with Beneficiary
as follows:
SECTION 5.01 Lien Status. Except as otherwise expressly provided in
the Credit Agreement, Trustor shall not place, or permit to be placed, or
otherwise mortgage, hypothecate or encumber the Trust Property, or any portion
thereof or interest therein, with any other Lien or security interest of any
nature whatsoever (statutory, constitutional or contractual), other than
Permitted Liens, regardless of whether such Lien or security interest is
inferior to the Lien and security interest created by this Deed of Trust, and,
if any such Lien or security interest is asserted against the Trust Property,
Trustor shall promptly, at its own cost and expense, (a) pay the underlying
claim in full (except for so long as such claim is being contested by Trustor in
good faith and in accordance with the terms of the Credit Agreement) or take
such other action as may be necessary to cause the same to be released of record
and otherwise, and (b) within ten (10) days after the date on which Mortgagor
receives notice of such Lien or security interest. Such notice shall specify who
is asserting such Lien or security interest and shall detail the origin and
nature of the underlying claim giving rise to such asserted Lien or security
interest.
SECTION 5.02 Payment of Impositions. Trustor shall duly pay and
discharge, or cause to be paid and discharged, all Impositions not later than
the due date thereof, or the day on which any fine, penalty, interest or cost
may be added thereto or imposed, or the day on which any Lien may be filed for
the nonpayment thereof (if such day is used to determine the due date of the
respective item); provided, however, that Trustor may, if permitted by
applicable law and if such installment payment would not create or permit the
filing of a Lien against the Trust Property, pay the Impositions in
installments. Notwithstanding the foregoing, Trustor may in good faith, by
appropriate proceedings and upon notice to Beneficiary, contest the validity,
applicability or amount of any asserted tax or assessment, subject to any more
restrictive provisions applicable to any such contest contained in the Credit
Agreement and (without limiting the foregoing) so long as (a) such contest is
diligently pursued, (b) Beneficiary determines, in its opinion reasonably
exercised, that such contest suspends the obligation to pay the tax and that
nonpayment of such tax or assessment will not result in the sale, loss,
forfeiture or diminution of the Trust Property or any part thereof or any
interest of Beneficiary therein, and (c) unless expressly provided to the
contrary in the Credit Agreement, prior to the earlier of the commencement of
such contest or the delinquency date of the asserted tax or assessment, Trustor
deposits with Beneficiary an amount determined by Beneficiary to be adequate to
cover the payment of such tax or assessment and a reasonable additional sum to
cover possible interest, costs and penalties; provided, however, that Trustor
shall promptly cause to be paid any amount adjudged by a court of competent
jurisdiction to be due, with all interest, costs and penalties
13
thereon, promptly after such judgment becomes final (and, subject to
Beneficiary's rights and remedies during an Event of Default, Beneficiary shall
make any sum deposited pursuant to clause (c) above available for such payment);
and provided, further, that in any event each such contest shall be concluded,
the taxes, assessments, interest, costs and penalties shall be paid prior to the
date any writ or order is issued under which the Trust Property may be sold,
lost or forfeited.
SECTION 5.03 Repair. Trustor shall keep the Trust Property in good
order and condition (reasonable wear and tear excepted) and shall make all
repairs, replacements and improvements thereof and thereto, interior and
exterior, structural and non-structural, ordinary and extraordinary, which are
necessary to keep the same in such order and condition. Trustor shall also use
reasonable efforts to prevent any act or occurrence which might impair the value
or usefulness of the Trust Property for its intended usage.
SECTION 5.04 Insurance and Application of Insurance Proceeds.
(a) During the term of this Deed of Trust, Trustor, at its sole cost
and expense, shall maintain, or cause to be maintained the following policies of
insurance, with respect to the Trust Property:
(i) If applicable or appropriate, Casualty (property)
insurance against loss or damage by fire, lightning and such other perils
as are included in a standard "special form" policy (formerly known as an
"all-risk" endorsement policy), and against loss or damage by all other
risks and hazards covered by a standard extended coverage insurance policy
including, without limitation, riot and civil commotion, terrorist
actions, vandalism, malicious mischief, burglary and theft, in an amount
equal to the greater of (A) the then full replacement cost of the
improvements, without deduction for physical depreciation and (B) such
amount that the insurer would not deem Trustor a co-insurer under said
policies. The policies of insurance required under this Section 5.04 shall
contain a "Replacement Cost" endorsement with a waiver of depreciation and
an "Agreed Amount" or "No Coinsurance" endorsement and shall otherwise
comply with the Credit Agreement.
(ii) Commercial General Liability insurance to the extent
required under the Credit Agreement, including a broad form comprehensive
general liability endorsement and coverages for broad form property
damage, contractual damages and personal injuries (including death
resulting therefrom) and containing minimum limits per occurrence of
$1,000,000.00 and $2,000,000.00 in the aggregate for any policy year with
no deductible.
(iii) Rental loss and/or business interruption insurance in an
amount equal to the estimated gross revenues from the operations of the
Trust Property for a period of twelve (12) months, if applicable or
appropriate.
(iv) Insurance against loss or damage from (A) leakage of
sprinkler systems and (B) explosion of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure vessels
or similar apparatus now or hereafter
14
installed on the improvements (without exclusion for explosions), if
applicable or appropriate.
(v) Flood insurance if all or any portion of the Trust
Property is located in an area now or hereafter designated by the Federal
Emergency Management Agency as an area having special flood hazards
(including, without limitation, those areas designated as Zone A or Zone
V), and in which flood insurance has been made available under the U.S.
National Flood Insurance Program, in an amount equal to the full
replacement cost of the Buildings, Fixtures and Personalty now or
hereafter located on the Trust Property or such other amount as may be
agreed to by Beneficiary in writing, if applicable or appropriate.
(vi) If the Trust Property is or ever becomes non-conforming
with respect to zoning, ordinance or law coverage to compensate for loss
of value or property resulting from operation of law and the cost of
demolition and the increased cost of construction in such amounts as may
be requested by Beneficiary.
(vii) Any other insurance with respect to the Trust Property
that may be required under the Credit Agreement.
(viii) Such other insurance as may from time to time be
reasonably required by Beneficiary in order to protect its interests.
All such insurance policies with respect to the Trust Property shall
contain a standard, non-contributory mortgagee clause naming Beneficiary, and
its successors and assigns, as an additional insured under all liability
insurance policies, as the first mortgagee and loss payee on all property
insurance policies, and as the sole loss payee on all rental loss or business
interruption insurance policies. Trustor shall not take out separate insurance
with respect to the Trust Property concurrent in form or contributing in the
event of loss with that required to be maintained hereunder or under the Credit
Agreement unless Beneficiary is named as an additional insured thereon under a
standard mortgagee clause acceptable to Beneficiary and each such policy is
otherwise in form and substance acceptable to Beneficiary.
(b) In the event of the foreclosure of this Deed of Trust, or in the
event of any transfer of title to the Trust Property, or any part thereof, by
foreclosure sale or by power of sale or deed in lieu of foreclosure, the
purchaser of the Trust Property, or such part thereof, shall succeed to all of
Trustor's rights with respect to the Trust Property, including any rights to
unexpired, unearned or returnable insurance premiums, subject to limitations on
the assignment of blanket policies, but limited to such rights as relate to the
Trust Property or such part thereof. If Beneficiary acquires title to the Trust
Property, or any part thereof, in any manner, Beneficiary shall thereupon (as
between Trustor and Beneficiary) become the sole and absolute owner of the
insurance policies with respect to the Trust Property, and all insurance
proceeds payable thereunder with respect to the Trust Property, with the sole
right to collect and retain all unearned or returnable premiums thereon with
respect to the Trust Property, or such part thereof, if any.
15
(c) If any damage to, destruction or loss of or other casualty with
respect to any of the Trust Property shall occur, Trustor shall file and
prosecute its claim or claims for any insurance proceeds in good faith and with
due diligence and cause the same to be collected and paid over to Beneficiary,
and Trustor hereby irrevocably authorizes and empowers Beneficiary, in the name
of Trustor or otherwise, to collect and receipt for any such insurance proceeds
and to adjust any insurance claims and to file and prosecute such claim or
claims, and although it is hereby expressly agreed that the same shall not be
necessary in any event, Trustor shall, upon demand of Beneficiary, make, execute
and deliver any and all assignments and other instruments sufficient for the
purpose of assigning any such insurance proceeds to Beneficiary, free and clear
of any Liens whatsoever. Trustor hereby irrevocably appoints Beneficiary as
Trustor's attorney-in-fact for each such purpose (which appointment is coupled
with an interest) and authorizes any Person to act upon the foregoing
appointment.
(d) Following any damage to, destruction or loss of or other
casualty with respect to any of the Trust Property, Beneficiary shall apply the
entire amount of any insurance proceeds in accordance with the provisions of the
Credit Agreement or, if there is no provision contained in the Credit Agreement
governing how the same are to be applied, then Beneficiary shall apply the
entire amount thereof to the payment of the Obligations, whether or not then due
and payable, in such manner and order as Beneficiary may elect. In all events,
unless expressly provided to the contrary in the Credit Agreement, Trustor
hereby covenants and agrees to promptly commence and to diligently prosecute the
restoration of the Trust Property upon the occurrence of any casualty loss
affecting the Trust Property, without regard to the availability or adequacy of
insurance proceeds, but in all events in a manner approved by Beneficiary.
Notwithstanding any damage to, destruction or loss of or other casualty with
respect to any of the Trust Property, Trustor shall continue to pay the
Obligations at the time and in the manner provided for in the Credit Agreement
and the other Loan Documents until the Obligations have been paid in full. If
the Trust Property is sold, through foreclosure or otherwise, prior to the
receipt by Beneficiary of such insurance proceeds, Beneficiary shall have the
right, whether or not a deficiency judgment on any Loan Document shall have been
sought, recovered or denied, to receive such insurance proceeds, or a portion
thereof sufficient to pay the then unpaid Obligations, whichever is less.
SECTION 5.05 Condemnation and Application of Condemnation Proceeds.
(a) Promptly upon its obtaining knowledge of the institution or the
threatened institution of any proceeding for the condemnation or other taking of
the Trust Property, or any portion thereof or interest therein, Trustor shall
notify Beneficiary of such proceeding. Trustor shall then, if requested by
Beneficiary, file or defend its claim thereunder and prosecute same with due
diligence to its final disposition and shall, subject to the terms of the Credit
Agreement, cause any awards or settlements to be paid over to Beneficiary for
disposition pursuant to the terms of this Deed of Trust. Beneficiary shall be
entitled to participate in any such proceeding, at Trustor's sole cost and
expense, and Trustor shall deliver or cause to be delivered to Beneficiary such
instruments as may be requested by Beneficiary from time to time to permit such
participation.
(b) If the Trust Property or any part thereof is taken or diminished
in value, or if a consent settlement is entered by or under threat of such
proceeding, the award or settlement
16
payable to Trustor by virtue of its interest in the Trust Property shall be, and
by these presents is, assigned, transferred and set over unto Beneficiary to be
held by Beneficiary, subject to the Lien and security interest of this Deed of
Trust, and disbursed in accordance with the provisions of the Credit Agreement
or, if there is no provision contained in the Credit Agreement governing how the
same is to be disbursed, then Beneficiary shall apply the entire amount thereof
to the payment of the Obligations, whether or not then due and payable, in such
manner and order as Beneficiary may elect. In all events, unless otherwise
expressly provided to the contrary in the Credit Agreement, Trustor hereby
covenants and agrees to commence and diligently to prosecute the restoration of
the Trust Property upon the occurrence of any condemnation or other taking
affecting the Trust Property, without regard to the availability or adequacy of
any award or settlement. Notwithstanding any condemnation or other taking of any
of the Trust Property, Trustor shall continue to pay the Obligations at the time
and in the manner provided for in the Credit Agreement and the other Loan
Documents, and the Obligations shall not be reduced until, and then only to the
extent that, any condemnation award or settlement shall have been actually
received and applied by Beneficiary to the discharge of the Obligations. If the
Trust Property is sold, through foreclosure or otherwise, prior to the receipt
by Beneficiary of such condemnation award or settlement, Beneficiary shall have
the right, whether or not a deficiency judgment on any Loan Document shall have
been sought, recovered or denied, to receive such condemnation award or
settlement, or a portion thereof sufficient to pay the Obligations, whichever is
less.
SECTION 5.06 Maintenance of Rights of Way, Easements, Licenses and
Other Rights. Trustor shall maintain, preserve and renew all rights of way,
easements, tenements, hereditaments, development rights and credits, zoning
rights, grants, privileges, appurtenances, licenses, franchises and other rights
reasonably necessary for the use or operation of the Trust Property from time to
time, or otherwise relevant to the value thereof, and Trustor shall not, without
the prior written consent of Beneficiary, initiate, join in or consent to any
private restrictive covenant or other public or private restriction as to the
present or future use or operation of the Trust Property. Trustor shall,
however, comply with all restrictive covenants which may at any time affect the
Trust Property, all applicable zoning ordinances and all other public or private
restrictions relating to the use of the Trust Property.
SECTION 5.07 Payment and Performance of Obligations. Trustor shall
duly and punctually pay and perform all of the Obligations.
SECTION 5.08 Compliance with Permitted Liens and Other Obligations.
Trustor shall comply in all material respects with any and all obligations,
restrictions and requirements that may be set forth in each and every document
constituting a Permitted Lien. In addition, Trustor shall comply in all material
respects each and every obligation legally imposed upon it and/or relating to
the Trust Property pursuant to applicable law (including, without limitation,
all matters described in Section 4.05 hereof), contract or other agreement. It
is hereby acknowledged that Beneficiary's consent to a Permitted Lien as of the
date hereof shall in no way be deemed to constitute approval of any future Lien
which may be imposed upon any portion of the Trust Property, or any other
enforcement action affecting Trustor or the Trust Property, as a result of
Trustor's failure to perform or comply with its obligations under any document
constituting a Permitted Lien as of the date hereof.
17
SECTION 5.09 Additional Affirmative Covenants. All affirmative
covenants made by the Borrowers or Guarantors or any of them in the Credit
Agreement are incorporated herein by reference and are hereby also made by
Trustor as to itself and the Trust Property as though such covenants were set
forth at length herein as the covenants of Trustor.
ARTICLE VI
NEGATIVE COVENANTS
Trustor hereby covenants and agrees with Beneficiary that, until all
of the Obligations shall have been paid or performed in full and discharged:
SECTION 6.01 Use Violations. Trustor shall not use, maintain,
operate or occupy, or allow the use, maintenance, operation or occupancy of, the
Trust Property in any manner which (a) violates in any material respect any
Governmental Requirement, (b) may be dangerous unless safeguarded as required by
applicable law, (c) constitutes a public or private nuisance, or (d) makes void,
voidable or cancelable, or increases, substantially in excess of commercially
reasonably rates, the premium of, any insurance then in force with respect
thereto.
SECTION 6.02 Waste. Trustor shall not commit or permit any material
waste with respect to the Trust Property.
SECTION 6.03 Alterations. Trustor shall notify Beneficiary, in
writing and in advance, with respect to all proposed alterations, improvements
or additions to the Trust Property which are of a material nature, and, unless
and to the extent otherwise expressly provided in the Credit Agreement, Trustor
shall not effect any material alteration, improvement or addition to the Trust
Property without the prior written consent of Beneficiary.
SECTION 6.04 No Further Encumbrances. Trustor shall not, without the
prior written consent of Beneficiary, create, place or permit to be created or
placed, or through any act or failure to act, acquiesce in the placing of, or
allow to remain, any mortgage, pledge, Lien (statutory, constitutional or
contractual), security interest, encumbrance or charge on, or conditional sale
or other title retention agreement with respect to, the Trust Property, or any
portion thereof or interest therein, other than the Permitted Liens, regardless
of whether the same are subordinate to the Lien(s) and security interest(s)
created by this Deed of Trust.
SECTION 6.05 Transfer Restrictions. Trustor shall not sell, lease,
assign, transfer or otherwise dispose of or abandon all or any part of the Trust
Property (or any interest therein), except as expressly permitted by, and in
accordance with the terms of, the Credit Agreement.
SECTION 6.06 Loan and Credit Agreements; Additional Negative
Covenants. Trustor has received a copy of and is fully familiar with the terms
and provisions of the Credit Agreement and the other Loan Documents. All
negative covenants made by the Borrowers or Guarantors or any of them in the
Credit Agreement and the other Loan Documents are incorporated herein by
reference and are hereby also made by Trustor as to itself and the Trust
Property as though such negative covenants were set forth at length herein as
the negative covenants of Trustor.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.01 Event of Default. The "Events of Default" set forth in
Section 8.01 of the Credit Agreement are hereby incorporated herein as if fully
set forth herein, and, without limiting the generality of the foregoing, the
occurrence of an "Event of Default" under the Credit Agreement or any other Loan
Document shall constitute an "Event of Default" hereunder. All notices and cure
periods described herein or in the Credit Agreement or any other Loan Document
shall not be applicable to any "Potential Event of Default" (as hereinafter
defined) if such Potential Event of Default has occurred as of the date on which
Beneficiary commences a nonjudicial foreclosure proceeding with respect to
another Potential Event of Default or Event of Default. Such event shall
constitute an independent Event of Default hereunder. For purposes hereof,
"Potential Event of Default" shall mean any event, but for the passage of time
or giving of notice, would be an Event of Default.
SECTION 7.02 Acceleration. Upon the occurrence and during the
continuance of any Event of Default, in addition to any other rights, powers or
remedies conferred herein or by operation of law, Beneficiary, in its sole
judgment and discretion, may declare the then unpaid principal balance of the
Loan (the "Principal Balance"), the accrued interest thereon and any other
accrued but unpaid portion of the Obligations to be, and they shall thereupon
forthwith become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
Trustor.
SECTION 7.03 Foreclosure and Sale. If Beneficiary invokes the power
of sale contained herein and directs Trustee to foreclose on all or part of the
Trust Property, Trustee shall sell all or any part of the Trust Property
(including any part of the Trust Property that may be subject to the provisions
of the Uniform Commercial Code of the State of Mississippi which may then be
security for the debt hereby secured, which sale may be conducted in connection
with any sale of real property and fixtures and in accordance with the Uniform
Commercial Code of the State of Mississippi) at one or more public sales at the
courthouse of the county in which the Trust Property or any part of the Trust
Property is situated, at public outcry, to the highest bidder for cash, and in
bar of the right and equity of redemption, statutory right of redemption,
homestead, dower, appraisement, stay, elective share and all other rights and
exemptions of every kind, all of which are hereby expressly waived by Trustor,
in order to pay the Obligations and all expenses of sale and of all proceedings
in connection therewith, including reasonable attorney's fees, after advertising
the time, place and terms of sale at least once a week for three (3) consecutive
weeks preceding the date of such sale in some newspaper published in the county
in which the land is located, or if no newspaper is printed in such county, then
in a newspaper of general circulation therein, and by posting one notice of such
sale at the courthouse where such sale is to be held. If the Trust Property is
located in two or more counties or in two judicial districts of the same county,
whether the Trust Property consists of one parcel or more than one parcel, then
Trustee shall have full power to select in which county, or judicial district,
the sale of all or any part of the Trust Property shall be made and his
selection shall be binding upon Trustor and Beneficiary and all persons claiming
through or under them, whether by contract or by law, Trustee shall have full
power to fix the day, time, terms and place of sale and may sell the Trust
Property in parcels or as a whole as Trustee may deem best. Trustor waives the
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provisions of Section 89-1-55 of the Mississippi Code of 1972, as amended, and
any successor provisions, as far as said section restricts the right of Trustee
to offer at sale more than one hundred and sixty acres at a time, and Trustee
may offer the Trust Property as a whole or in part and in such order as Trustee
may deem best, regardless of the manner in which it may be described. Trustee
may appoint an agent to conduct foreclosure proceedings and any sale thereunder,
which appointment need not be recorded. Any foreclosure sale may be adjourned or
continued from time to time in the discretion of Trustee until such time as such
sale can be validly and legally completed. At any sale made to enforce the trust
herein given, Trustee shall execute a deed of conveyance or other appropriate
instrument conveying the Trust Property so sold, which conveyance shall be
without any covenant or warranty, express or implied, and shall vest full and
perfect title in such purchaser upon payment of the purchase price. The recitals
in such instrument shall be prima facie evidence of the truth of the statements
made therein, and failure to give any notice to Trustor as provided herein shall
not adversely affect any foreclosure sale or create any liability on the part of
Trustee or Beneficiary to Trustor. Trustee shall apply the proceeds of the sale
in the following order: (a) to all costs and expenses of the sale, including,
but not limited to, reasonable Trustee `s and attorney's fees and costs of title
evidence and any other costs incurred in connection with the sale; (b) to all
sums secured hereby; and (c) the excess, if any, to the person or persons
legally entitled thereto. Upon any sale pursuant to this paragraph, whether made
under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Beneficiary may
bid for and acquire the Trust Property or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
indebtedness of Trustor secured by this Deed of Trust the net sales price after
deducting therefrom the expenses of the sale and the costs of the action and any
other sums which Trustee or Beneficiary is authorized to deduct under this Deed
of Trust. If the Trust Property is sold pursuant to this paragraph, Trustor or
any person holding possession of the Trust Property through Trustor shall
immediately surrender possession of the Trust Property to the purchaser at such
sale. If possession is not surrendered, Trustor or such person shall be deemed
to be a tenant at sufferance and may be removed by writ of possession, or any
other lawful means.
Each remedy provided in this instrument is distinct from and
cumulative with all other rights and remedies provided hereunder or afforded by
applicable law or equity, and may be exercised concurrently, independently or
successively, in any order whatsoever.
SECTION 7.04 Trustee's Successors, Substitutes and Agents. Trustee
or any successor to or substitute for Trustee may appoint or delegate any one or
more persons as agent to perform any act or acts necessary or incident to any
sale held by Trustee, including the posting of notices and the conduct of sale,
but in the name and on behalf of Beneficiary. If Trustee or any successor to or
substitute for Trustee shall have given notice of sale hereunder, any successor
or substitute trustee thereafter appointed may complete the sale and the
conveyance of the Trust Property pursuant thereto as if such notice had been
given by the successor to or substitute for Trustee conducting the sale.
SECTION 7.05 Receivership. If any of the Obligations shall become
due and payable and shall not be promptly paid, Beneficiary shall have the right
and power to proceed by a suit or suits in equity or at law, whether for the
specific performance of Beneficiary which Trustee may apply for and obtain as a
matter of right and without notice to Trustor, which notice
20
is hereby expressly waived by Trustor, the appointment of a receiver to collect
the Rents of the Trust Property and to preserve the security hereof, either
before or after any foreclosure sale or the sale of the Trust Property under the
order of a court or courts of competent jurisdiction or under executory or other
legal process, without regard to the value of the Trust Property as security for
the amount then due to Beneficiary, or the solvency of any entity or entities,
person or persons primarily or secondarily liable for the payment of such
amounts; the Rents of the Trust Property, in any such event, having heretofore
been assigned to Beneficiary pursuant to Section 3.01 hereof as additional
security for the payment of the Obligations secured hereby.
SECTION 7.06 Judicial Foreclosure. If an Event of Default shall
occur and be continuing, Trustee or Beneficiary shall have the right and power
to proceed by a suit or suits in equity or at law, whether for the specific
performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, or for any foreclosure hereunder or for
the sale of the Trust Property under the judgment or decree of any court or
courts of competent jurisdiction, or for the appointment of a receiver pending
any foreclosure hereunder or the sale of the Trust Property under the order of a
court or courts of competent jurisdiction or under executory or other legal
process, or for the enforcement of any other appropriate legal or equitable
remedy. Any money advanced by Trustee and/or Beneficiary in connection with any
such receivership shall be a demand obligation (which obligation Trustor hereby
expressly promises to pay) owing by Trustor to Trustee and/or Beneficiary and
shall bear interest from the date of such advance by Trustee and/or Beneficiary
until paid at the Default Rate.
SECTION 7.07 Separate Sales. To the extent allowed by applicable
law, the Trust Property may be sold in one or more parcels and in such manner
and order as Beneficiary, in its sole discretion, may elect, it being expressly
understood and agreed that the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.
SECTION 7.08 Possession of Trust Property. Trustor agrees to the
full extent that it lawfully may, that, in case one or more of the Events of
Default shall have occurred and be continuing, then, and in every such case,
Trustee or Beneficiary shall have the right and power to enter into and upon and
take possession of all or any part of the Trust Property in the possession of
Trustor, its successors or assigns, or its or their agents or servants, and may
exclude Trustor, its successors or assigns, and all Persons claiming by, through
or under Trustor, and its or their agents or servants wholly or partly
therefrom; and, holding the same, Trustee or Beneficiary may use, administer,
manage, operate and control the Trust Property and conduct the business thereof
to the same extent as Trustor, its successors or assigns, might at the time do
and may exercise all rights and powers of Trustor, in the name, place and stead
of Trustor, or otherwise as Trustee or Beneficiary shall deem best. All costs,
expenses and liabilities of every character incurred by Trustee and/or
Beneficiary in administering, managing, operating and controlling the Trust
Property shall constitute a demand obligation (which obligation Trustor hereby
expressly promises to pay) owing by Trustor to Trustee and/or Beneficiary and
shall bear interest from the date of expenditure until paid at the Default Rate,
all of which shall constitute a portion of the Obligations and shall be secured
by this Deed of Trust and all of the other Loan Documents. Trustor hereby
irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact
(coupled with an interest) to perform such acts and execute such documents as
Beneficiary, in its sole discretion, shall deem appropriate, including
endorsement of Trustor's name on any
21
instruments. Regardless of any provision of this Deed of Trust, the Credit
Agreement or any other Loan Document, Beneficiary shall not be considered to
have accepted any property other than cash or immediately available funds in
satisfaction of any obligation of Trustor to Beneficiary, unless Beneficiary
shall have given express written notice of Beneficiary's election to the
contrary.
SECTION 7.09 Occupancy After Foreclosure. In the event that there is
a foreclosure sale hereunder and at the time of such sale Trustor or Trustor's
representatives, successors or assigns or any other person claiming any interest
in the Trust Property by, through or under Trustor, are occupying or using the
Trust Property or any part thereof, each and all shall immediately become the
tenant of the purchaser at such sale, which tenancy shall be a tenancy from day
to day, terminable at the will of either the landlord or tenant, at a reasonable
rental per day based upon the value of the property occupied, such rental to be
due daily to the purchaser. To the extent permitted by applicable law, the
purchaser at such sale shall, notwithstanding any language herein to the
contrary, have the sole option to demand immediate possession following the sale
or to permit the occupants to remain as tenants at will. In the event that the
tenant fails to surrender possession of said property upon demand, the purchaser
shall be entitled to institute and maintain a summary action for possession of
the Trust Property (such as an action for forcible entry and detainer) in any
court having appropriate jurisdiction.
SECTION 7.10 Remedies Cumulative, Concurrent and Nonexclusive. Every
right, power and remedy herein given to Trustee or Beneficiary shall be
cumulative and in addition to every other right, power and remedy herein
specifically given or now or hereafter existing in equity, at law or by statute
(including specifically those granted by the Applicable UCC). Each such right,
power and remedy, whether specifically herein given or otherwise existing, may
be exercised from time to time and so often and in such order as may be deemed
expedient by Trustee or Beneficiary, and the exercise, or the beginning of the
exercise, of any such right, power or remedy shall not be deemed a waiver of the
right to exercise, at the same time or thereafter, any other right, power or
remedy. Beneficiary shall be entitled to collect all costs and expenses incurred
in pursuing such remedies. No delay or omission by Trustee or Beneficiary in the
exercise of any such right, power or remedy shall impair any such right, power
or remedy or operate as a waiver thereof or of any other right, power or remedy
then or thereafter existing.
SECTION 7.11 No Release of Obligations. Neither Trustor, any other
Borrower, nor any other Person now or hereafter obligated for the payment or
performance of all or any part of the Obligations shall be relieved of any such
obligation by reason of (a) the failure of Trustee or Beneficiary to comply with
any request of Trustor, any other Borrower or any other Person so obligated to
foreclose the Lien of this Deed of Trust to enforce any provision hereunder or
under the Credit Agreement; (b) the release, regardless of consideration, of the
Trust Property or any portion thereof or interest therein or the addition of any
other property to the Trust Property; (c) any agreement or stipulation between
any subsequent owner of the Trust Property and Beneficiary extending, renewing,
rearranging or in any other way modifying the terms of this Deed of Trust
without first having obtained the consent of, given notice to or paid any
consideration to Trustor , any other Borrower or any other Person, and in any
such event Trustor, all other Borrowers and all such other Persons shall
continue to be liable to make payment according to the terms of any such
extension or modification agreement unless
22
expressly released and discharged in writing by Beneficiary; or (d) any other
act or occurrence save and except the complete payment and performance of all of
the Obligations.
SECTION 7.12 Release of and Resort to Collateral. Beneficiary may
release, regardless of consideration, any part of the Trust Property without, as
to the remainder, in any way impairing, affecting, subordinating or releasing
the Lien or security interest created in or evidenced by this Deed of Trust or
its stature as a first and prior Lien and security interest in and to the Trust
Property, and without in any way releasing or diminishing the liability of any
Person liable for the payment or performance of the Obligations. Beneficiary may
resort to any other security for the Obligations held by Trustee or Beneficiary
in such manner and order as Beneficiary may elect.
SECTION 7.13 Waiver of Redemption, Notice and Marshalling of Assets.
To the fullest extent permitted by applicable law, Trustor hereby irrevocably
and unconditionally waives and releases (a) all benefits that might accrue to
Trustor by virtue of any present or future moratorium law or other law exempting
the Trust Property from attachment, levy or sale on execution or providing for
any appraisement, valuation, stay of execution, exemption from civil process,
redemption or extension of time for payment; (b) except for notices expressly
provided for herein or in the Credit Agreement, all notices of any Event of
Default or of Beneficiary's intention to accelerate maturity of the Obligations
or of Trustee's or Beneficiary's election to exercise or actual exercise of any
right, remedy or recourse provided for hereunder or under the Credit Agreement;
and (c) any right to a marshalling of assets, a sale in inverse order of
alienation and (d) any and all conflicts with any provisions of any of the Loan
Documents. If any law referred to in this Deed of Trust and now in force, of
which Trustor or its successor or successors might take advantage despite the
provisions hereof, shall hereafter be repealed or cease to be in force, such law
shall thereafter be deemed not to constitute any part of the contract herein
contained or to preclude the operation or application of the provisions hereof.
Beneficiary shall have the right to determine the order in which any or all of
the Trust Property shall be subjected to the remedies provided herein.
SECTION 7.14 Discontinuance of Proceedings. In case Beneficiary
shall have proceeded to invoke any right, remedy or recourse permitted hereunder
or under the Credit Agreement and shall thereafter elect to discontinue or
abandon same for any reason, Beneficiary shall have the unqualified right so to
do and, in such an event, Trustor and Beneficiary shall be restored to their
former positions with respect to the Obligations, this Deed of Trust, the Credit
Agreement, the Trust Property and otherwise, and the rights, remedies, recourses
and powers of Beneficiary shall continue as if same had never been invoked.
SECTION 7.15 Application of Proceeds. After the occurrence and
during the continuance of an Event of Default, the proceeds of any sale of and
any other amounts generated by the holding, leasing, operating or other use of
the Trust Property shall be applied by Beneficiary (or the receiver, if one is
appointed), to the extent that funds are so available therefrom, in accordance
with the provisions of the Credit Agreement or if not so provided, then in the
following order of priority, except to the extent otherwise required by
applicable law:
(a) first, to the payment of the reasonable and necessary costs and
expenses of taking possession of the Trust Property and of holding, using,
leasing, repairing, improving the
23
same, including reasonable (i) receivers' fees, (ii) court costs, (iii)
attorneys' and accountants' fees, (iv) costs of advertisement and title search
fees, and (v) the payment of any and all Impositions, Liens, security interests
or other rights, titles or interests equal or superior to the Lien and security
interest of this Deed of Trust (except those to which the Trust Property has
been sold subject to and without in any way implying Beneficiary's prior consent
to the creation thereof);
(b) second, to the payment of all amounts other than the Principal
Balance and accrued but unpaid interest which may be due to Beneficiary
hereunder or under the other Loan Documents, together with interest thereon as
provided herein;
(c) third, to the payment of the Obligations in such order and
manner as Beneficiary determines in its sole discretion; and
(d) fourth, to Trustor or as otherwise required by any Governmental
Requirement. Trustor shall be liable for any deficiency remaining.
SECTION 7.16 Uniform Commercial Code Remedies. Beneficiary shall
have all of the rights, remedies and recourses with respect to the Personalty
and the Fixtures afforded to it by the Applicable UCC, including, without
limitation, (i) the right to conduct a unified sale of such Personalty and
Fixtures in connection with a judicial or power of sale foreclosure of any
portion of the Trust Property that constitutes real property, (ii) any the right
to take possession of the Personalty and the Fixtures or any part thereof, and
(iii) to take such other measures as Beneficiary may deem necessary for the
care, protection and preservation of the Personalty and the Fixtures, in
addition to, and not in limitation of, the other rights, remedies and recourses
afforded by this Deed of Trust and the other Loan Documents.
SECTION 7.17 Indemnity. In connection with any action taken by
Trustee, Beneficiary and/or any Indemnitee pursuant to this Deed of Trust,
Trustee, Beneficiary, and/or any such Indemnitee and their respective
Indemnified Parties shall not be liable for any Loss sustained by Trustor
resulting from (a) an assertion that Beneficiary, or any such Indemnitee or an
Indemnified Party has received funds from the operations of the Trust Property
claimed by third Persons, or (b) any act or omission of Trustee, Beneficiary, or
any such Indemnitee or any such Indemnified Party in administering, managing,
operating or controlling the Trust Property, including in either case such Loss
as may result from the ordinary negligence of Trustee and/or Beneficiary or any
other Lender or an Indemnified Party, or which may result from strict liability,
whether under applicable law or otherwise, unless such Loss is caused by the
gross negligence, willful misconduct or bad faith of Trustee, Beneficiary and/or
such other Lender or such Indemnified Party, nor shall Trustee, Beneficiary
and/or any other Lender or an Indemnified Party be obligated to perform or
discharge any obligation, duty or liability of Trustor. Trustor shall and does
hereby agree to indemnify Trustee and/or Beneficiary and each of the other
Lenders and their respective Indemnified Parties for, and to hold Trustee,
Beneficiary and each such other Lender and each Indemnified Party harmless from,
any and all Losses which may or might be incurred by Trustee and/or Beneficiary
or any of such other Lenders or such Indemnified Parties by reason of this Deed
of Trust or the exercise of rights or
24
remedies hereunder, including such Losses as may result from the ordinary
negligence of Trustee, Beneficiary or any other Lender or an Indemnified Party,
or which may result from strict liability, whether under applicable law or
otherwise, unless such Loss is caused by the gross negligence, willful
misconduct or bad faith of Trustee, Beneficiary or such other Lender or such
Indemnified Party. Should Trustee, Beneficiary and/or any other Lender or an
Indemnified Party make any expenditure on account of any such Losses, the amount
thereof, including costs, expenses and reasonable attorneys' fees, shall be a
demand obligation (which obligation Trustor hereby expressly promises to pay)
owing by Trustor to Trustee and/or Beneficiary and shall bear interest from the
date expended until paid at the Default Rate, shall be a part of the Obligations
and shall be secured by this Deed of Trust and the other Loan Documents. Trustor
hereby assents to, ratifies and confirms any and all actions of Trustee and/or
Beneficiary with respect to the Trust Property taken under this Deed of Trust.
The liabilities of Trustor, as set forth in this Section 7.17, shall survive the
termination of this Deed of Trust and the payment and performance of the
Obligations.
ARTICLE VIII
TRUSTEE
SECTION 8.01 Duties, Rights, and Powers of Trustee. It shall be no
part of the duty of Trustee to see to any recording, filing or registration of
this Deed of Trust or any other instrument in addition or supplemental thereto,
or to give any notice thereof, or to see to the payment of or be under any duty
in respect of any tax or assessment or other governmental charge which may be
levied or assessed on the Trust Property, or any part thereof, or against
Trustee, or to see to the performance or observance by Trustee of any of the
covenants and agreements contained herein. Trustee shall not be responsible for
the execution, acknowledgment or validity of this Deed of Trust or of any
instrument in addition or supplemental hereto or for the sufficiency of the
security purported to be created hereby, and makes no representation in respect
thereof or in respect of the rights of Beneficiary. Trustee shall have the right
to confer with counsel upon any matters arising hereunder and shall be fully
protected in relying as to legal matters on the advice of counsel. Trustee shall
not incur any personal liability hereunder except for Trustee's own gross
negligence or willful misconduct, and 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 Trustee hereunder, believed by Trustee in good faith
to be genuine.
SECTION 8.02 Successor Trustee. From time to time, by a writing
signed and acknowledged by Beneficiary and filed for record in the office of the
recorder of the County in which the Land is situated, Beneficiary may appoint
another trustee to act in the place and stead of Trustee or any successor. Such
writing shall refer to this Deed of Trust and set forth the date, book and page
of its recordation. The recordation of such instrument of substitution shall
discharge Trustee herein named and shall appoint the new trustee as the trustee
hereunder with the same effect as if originally named Trustee herein. A writing
recorded pursuant to the provisions of this Section 8.02 shall be conclusive
proof of the proper substitution of such new trustee.
25
SECTION 8.03 Retention of Moneys. 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), and Trustee shall
be under no liability for interest on any moneys received by Trustee hereunder.
SECTION 8.04 Reconveyance. Upon written request of Beneficiary
stating all of the Obligations have been paid, performed and discharged, and the
Credit Agreement is terminated, and payment of its fees, Trustee shall reconvey,
without warranty, the Trust Property. 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 hereto" or such other description as required by law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Instrument Construed as Deed of Trust, Etc. This Deed
of Trust may be construed as a deed of trust, chattel mortgage, conveyance,
assignment, security agreement, pledge, financing statement, hypothecation or
contract, or any one or more of them, in order to fully effectuate the liens and
security interests created hereby and the purposes and agreements set forth
herein.
SECTION 9.02 Performance at Trustor's Expense. The cost and expense
of performing or complying with any and all of the Obligations shall be borne
solely by Trustor, and no portion of such cost and expense shall be, in any way
or to any extent, credited against any installment on or portion of the
Obligations.
SECTION 9.03 Survival of Obligations. Each and all of the
Obligations shall survive the execution and delivery of this Deed of Trust and
shall continue in full force and effect until all of the Obligations shall have
been fully satisfied.
SECTION 9.04 Further Assurances. Trustor, upon the request of
Beneficiary, shall execute, acknowledge, deliver and record and/or file such
further instruments, including financing statements, and do such further acts as
may be reasonably necessary, desirable or proper to carry out more effectively
the purpose of this Deed of Trust and to subject to the Liens and security
interests hereof any property intended by the terms hereof to be covered hereby,
including any renewals, additions, substitutions, replacements, betterments or
appurtenances to the then Trust Property.
SECTION 9.05 Notices. All notices or other communications required
or permitted to be given pursuant to this Deed of Trust shall be in writing and
shall be considered properly given if given in the manner and to the addresses
prescribed by Section 11.02 of the Credit Agreement to the parties and at the
addresses set forth in the first paragraph hereof, and to the parties and at the
addresses set forth in Section 11.02 of the Credit Agreement; provided, however,
that (a) service of notice as required by the laws of any State or Commonwealth
in which portions of the Trust Property may be situated shall for all purposes
be deemed
26
appropriate and sufficient with the giving of such notice thereunder, and (b)
any party shall have the right to change its address for notice hereunder to any
other location within the continental United States by the giving of ten (10)
days' notice to the other party in the manner set forth above.
SECTION 9.06 No Waiver. Any failure by Beneficiary to insist, or any
election by Beneficiary not to insist, upon strict performance by Trustor of any
of the terms, provisions or conditions of this Deed of Trust shall not be deemed
to be a waiver of the same or of any other terms, provision or condition hereof,
and Beneficiary shall have the right, at any time or times thereafter, to insist
upon strict performance by Trustor of any and all of such terms, provisions and
conditions. Beneficiary may, in Beneficiary's sole and absolute discretion, (i)
in the case of a Default, determine whether such Default has been cured, and
(ii) in the case of an Event of Default, accept or reject any proposed cure of
an Event of Default. In no event shall any provision of this Deed of Trust or
any other Loan Document which provides that Beneficiary shall have certain
rights and/or remedies only during the continuance of an Event of Default be
construed so as to require Beneficiary to accept a cure of any such Event of
Default. Unless and until Beneficiary accepts any proposed cure of an Event of
Default, such Event of Default shall be deemed to be continuing for purposes of
this Deed of Trust and the other Loan Documents.
SECTION 9.07 Beneficiary's Right to Perform; Beneficiary's
Expenditures
(a) Trustor agrees that if Trustor fails to perform any act or take
any action which Trustor is required to perform or take hereunder or under the
Credit Agreement or to pay any money which Trustor is required to pay hereunder
or under the Credit Agreement, Beneficiary may, but shall not be obligated to,
perform or cause to be performed such act or take such action or pay such money,
to the extent and only to the extent permitted under the Credit Agreement.
(b) All costs and expenses incurred by Beneficiary (or any
Indemnified Party), including, without limitation, attorneys fees, costs and
expenses, all monies paid by (or on behalf of) Beneficiary and the monetary
value of all services performed by (or on behalf of Beneficiary) in connection
with a Default or Event of Default hereunder or under any other Loan Document,
including, without limitation, the (i) the enforcement of any term or provision
of this Deed of Trust or any other Loan Document, (ii) the performance by
Beneficiary of any obligation of Trustor under this Deed of Trust or any other
Loan Document if Beneficiary elects to so perform, in its sole and absolute
discretion, and (iii) any action Beneficiary elects to take, in its sole and
absolute discretion, to protect its interest in or the value of the Trust
Property, shall be a demand obligation owing by Trustor to Beneficiary, as the
case may be, and to the extent any payment is made to a third Person,
Beneficiary, upon making such payment, shall be subrogated to all of the rights
of the Person receiving such payment. All such costs and expenses, monies and
the monetary value of such services performed shall (x) bear interest at the
Default Rate from the date of such incurrence, payment or performance, as
applicable, until paid, and (y) constitute (together with such interest) a
portion of the Obligations and shall be secured by this Deed of Trust and all of
the other Loan Documents. If Beneficiary shall elect to pay any Imposition or
other sums due with reference to the Trust Property, Beneficiary may do so in
reliance on any ▇▇▇▇, statement or assessment procured from the appropriate
Governmental Authority or other issuer thereof. Attorneys' fees, costs and
expenses as used herein shall
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include, without limitation, such fees, costs and expenses incurred in
litigation or not, whether before or after judgment and and consultants, court
costs, expert witness fees, document reproduction expenses, costs of exhibit
preparation, courier charges, postage and communication expenses. This provision
is separate and several, and shall survive merger into any judgment.
Trustor shall and does hereby agree that, if all or a portion of the
Obligations has prior to the maturity date fixed in the Credit Agreement, become
due or been declared due by reason of an Event of Default the entire amount then
due under the terms of this Deed of Trust and the Credit Agreement shall include
all attorneys' fees and costs and expenses which are actually incurred as stated
above.
SECTION 9.08 Successors and Assigns. All of the terms hereof shall
apply to, be binding upon and inure to the benefit of the parties hereto, their
successors, assigns, heirs and legal representatives, and all other Persons
claiming by, through or under them; provided, however, that nothing herein shall
be deemed to imply any right on behalf of Trustor to assign its interest in any
of the Trust Property except as may be expressly set forth in the Credit
Agreement.
SECTION 9.09 Severability. This Deed of Trust is intended to be
performed in accordance with, and only to the extent permitted by, all
applicable laws and regulations of applicable Governmental Authorities and the
provisions hereof are intended to be limited to the extent necessary that they
will not render this Deed of Trust invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law. If any
provision hereof or the application thereof to any Person or circumstance shall,
for any reason and to any extent, be invalid or unenforceable, neither the
remainder of this Deed of Trust nor the application of such provision to other
Persons or circumstances shall be affected thereby, but rather shall be enforced
to the greatest extent permitted by applicable law.
SECTION 9.10 Subrogation of Trustee. This Deed of Trust is made with
full substitution and subrogation of Trustee and successors in this trust to
Trustee and Trustee and such successors assigns in and to all covenants and
warranties by others heretofore given or made in respect of the Trust Property
or any part thereof.
SECTION 9.11 Entire Agreement and Modification. This Deed of Trust
may not be amended, revised, waived, discharged, released or terminated orally,
but only by a written instrument or instruments executed by the party against
which enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. Any alleged amendment, revision, waiver, discharge,
release or termination which is not so documented shall not be effective as to
any party.
SECTION 9.12 Applicable Law. THIS DEED OF TRUST, THE CREDIT
AGREEMENT AND THE LOAN DOCUMENTS HAVE BEEN DELIVERED IN THE STATE OF NEW YORK.
TRUSTOR AND BENEFICIARY FURTHER AGREE AND STIPULATE THAT THIS DEED OF TRUST, THE
CREDIT AGREEMENT AND THE LOAN DOCUMENTS HAVE BEEN DELIVERED IN THE STATE OF NEW
YORK WERE NEGOTIATED, EXECUTED AND DELIVERED IN THE STATE OF NEW YORK, AND THAT
THE STATE OF NEW YORK HAS A SUBSTANTIAL
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RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION. IT IS THEREFORE
THE INTENT OF TRUSTOR AND BENEFICIARY THAT THIS DEED OF TRUST SHALL BE CONSTRUED
AND INTERPRETED WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO NEW YORK CHOICE OF LAW PRINCIPLES); PROVIDED,
HOWEVER, THAT THE LAWS OF THE STATE OF MISSISSIPPI SHALL APPLY TO THE CREATION,
PERFECTION AND PROCEDURES GOVERNING ENFORCEMENT OF ANY LIENS, SECURITY INTERESTS
AND ENCUMBRANCES GRANTED OR CREATED BY THIS DEED OF TRUST IN THE REAL OR
PERSONAL PROPERTY LOCATED IN (OR IN THE CASE OF INTANGIBLE PERSONAL PROPERTY,
HAVING A SITUS IN) THE STATE OF MISSISSIPPI, AND THE MANAGEMENT, OPERATION,
DISPOSITION AND REALIZATION OF THE SECURITY PROVIDED THEREBY. WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, THE LAWS OF THE STATE OF NEW YORK SHALL APPLY
TO (I) ALL MATTERS RELATING TO THE CHARGING AND COLLECTION OF INTEREST UNDER
THIS DEED OF TRUST AND WITH RESPECT TO THE OBLIGATIONS, (II) THE ENFORCEMENT OF
ALL RIGHTS UNDER THE CREDIT AGREEMENT, AND THE LOAN DOCUMENTS OTHER THAN THIS
DEED OF TRUST AND (III) THE RIGHT TO ▇▇▇ TRUSTOR OR ANY OTHER PERSON OBLIGATED
UNDER THE LOAN AGREEMENT AND THE LOAN DOCUMENTS TO COLLECT ANY OUTSTANDING
OBLIGATIONS OR TO OBTAIN A JUDGMENT FOR ANY DEFICIENCY FOLLOWING FORECLOSURE
UNDER ANY ONE ACTION AND ANTIDEFICIENCY RULES. TRUSTOR HEREBY AGREES THAT
BENEFICIARY MAY ENFORCE ITS RIGHTS UNDER THIS DEED OF TRUST AND ANY OF THE OTHER
LOAN DOCUMENTS, INCLUDING THE RIGHT TO ▇▇▇ TRUSTOR OR ANY PERSON OBLIGATED UNDER
THE LOAN DOCUMENTS TO COLLECT ANY OUTSTANDING OBLIGATIONS OR TO OBTAIN A
JUDGMENT FOR ANY DEFICIENCY FOLLOWING FORECLOSURE, IN ACCORDANCE WITH NEW YORK
LAW.
SECTION 9.13 Satisfaction of Prior Encumbrance. To the extent that
proceeds advanced pursuant to the Credit Agreement are used to pay indebtedness
secured by any outstanding Lien, security interest, charge or prior encumbrance
against the Trust Property, such proceeds shall be deemed to have been advanced
by Beneficiary at Trustor's request, and Beneficiary shall be subrogated to any
and all rights, security interests and Liens owned by any owner or holder of
such outstanding Liens, security interests, charges or encumbrances,
irrespective of whether said Liens, security interests, charges or encumbrances
are released, and it is expressly understood that, in consideration of the
payment of such other indebtedness by Beneficiary, Trustor hereby waives and
releases all demands and causes of action for offsets and payments to, upon and
in connection with the said indebtedness.
SECTION 9.14 No Partnership. Nothing contained in this Deed of Trust
is intended to, or shall be construed to, create to any extent and in any manner
whatsoever any partnership, joint venture, or association between Trustor and
Beneficiary, or in any way make Beneficiary a co-principal with Trustor with
reference to the Trust Property, and any inferences to the contrary are hereby
expressly negated.
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SECTION 9.15 Headings. The Article, Section and Subsection headings
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.
SECTION 9.16 Release of Deed of Trust. If all of the Obligations
shall be paid, performed and discharged and the Credit Agreement is terminated,
Beneficiary shall forthwith cause satisfaction and discharge of this Deed of
Trust to be entered upon the record, at the sole cost and expense of Trustor,
and shall execute and deliver (or cause to be executed and delivered) such
instruments of satisfaction and discharge as may be appropriate, such
instruments to be duly acknowledged and in form for recording, at the sole cost
and expense of Trustor.
SECTION 9.17 Limitation of Obligations with Respect to Trust
Property.
(a) Neither Trustee nor Beneficiary or any Lender shall have any
duty to protect or preserve, or any liability with respect to the protection or
preservation of, any Trust Property or to preserve rights pertaining thereto
other than the duty to use reasonable care in the custody and preservation of
any Trust Property in its actual possession. Beneficiary shall be deemed to have
exercised reasonable care in the custody and preservation of any Trust Property
in its possession if such Trust Property is accorded treatment substantially
equal to that which Beneficiary accords its own like property. Beneficiary shall
be relieved of all responsibility for any Trust Property in its possession upon
surrendering it, or tendering surrender of it, to Trustor or to such other
Person entitled thereto by applicable law.
(b) Nothing contained in this Deed of Trust shall be construed as
requiring or obligating Trustee, Beneficiary or any Lender, and neither Trustee
nor Beneficiary or any Lender shall be required or obligated, to (i) make any
demand or inquiry as to the nature or sufficiency of any payment received by it,
or present or file any claim or notice or take any action with respect to any
Trust Property or the monies due or to become due thereunder in connection
therewith, (ii) ascertain or take action with respect to calls, conversions,
exchanges, maturities, tenders, offers or other matters relating to any Trust
Property, whether or not Beneficiary or any of the other Lenders has or is
deemed to have knowledge or notice thereof, (iii) take any necessary steps to
preserve rights against any prior parties with respect to any Trust Property, or
(iv) notify Trustor or any other Person of any decline in the value of any Trust
Property.
SECTION 9.18 Inconsistency with Credit Agreement. To the fullest
extent possible, the terms and provisions of the Credit Agreement shall be read
together with the terms and provisions of this Deed of Trust such that the terms
and provisions of this Deed of Trust shall supplement, rather than conflict
with, the terms and provisions of the Credit Agreement; provided, however, that,
notwithstanding the foregoing, in the event any of the terms or provisions of
this Deed of Trust conflict with any of the terms or provisions of the Credit
Agreement, such that it is impractical for such terms or provisions to coexist,
the terms or provisions of the Credit Agreement shall govern and control for all
purposes; and, provided further, that the inclusion in this Deed of Trust of
terms and provisions, supplemental rights or remedies in favor of a secured
party but which are not addressed in the Credit Agreement shall not be deemed to
be a conflict with the Credit Agreement and all such additional terms,
provisions, supplemental rights or remedies contained herein shall be given full
force and effect.
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SECTION 9.19 Limitation on Interest Payable. It is the intention of
the parties to conform strictly to the usury laws, whether state or federal,
that are applicable to the transaction of which this Deed of Trust is a part.
All agreements between Trustor and Beneficiary, or any Lender, whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever shall the amount paid or
agreed to be paid by Trustor for the use, forbearance or detention of the money
to be loaned under the Credit Agreement or any other Loan Document, or for the
payment or performance of any covenant or obligation contained herein or in the
Credit Agreement or any other Loan Document, exceed the maximum amount
permissible under applicable federal or state usury laws. If, under any
circumstances, fulfillment of any such provision, at the time performance of
such provision shall be due, shall involve exceeding the limit of validity
prescribed by applicable law, then the obligation to be fulfilled shall be
reduced to the limit of such validity. If, under any circumstances, Trustor
shall have paid an amount of money which is deemed to be interest and such
interest would exceed the highest lawful rate, such amount that would be
excessive interest under applicable usury laws shall be applied to the reduction
of the principal amount owing in respect of the Obligations and not to the
payment of interest, or if such excessive interest exceeds the unpaid balance of
principal and any other amounts due hereunder, the excess shall be refunded to
Trustor. All sums paid or agreed to be paid for the use, forbearance or
detention of the principal under any extension of credit by Beneficiary (or
Lender) shall, to the extent permitted by applicable law, and to the extent
necessary to preclude exceeding the limit of validity prescribed by applicable
law, be amortized, prorated, allocated and spread from the date of this Deed of
Trust until payment in full of the Obligations so that the actual rate of
interest on account of such principal amounts is uniform throughout the term
hereof.
SECTION 9.20 Covenants To Run With the Land. All of the grants,
representations, warranties, undertakings, covenants, terms, provisions and
conditions in this Deed of Trust shall run with the Land and shall apply to and
bind the successors and assigns of Trustor. If there shall be more than one
trustor, the covenants, representations and warranties made herein shall be
deemed to be joint and several.
SECTION 9.21 Amount Secured; Last Dollar. So long as the balance of
the Obligations exceeds the portion of the Obligations secured by this Deed of
Trust, no payment on account of the Obligations shall be deemed to be applied
against or to reduce the portion of the Obligations secured by this Deed of
Trust, but shall, instead, be deemed to be applied against only such portions of
the Obligations that are not secured by this Deed of Trust.
SECTION 9.22 Defense of Claims. Trustor shall promptly notify
Beneficiary in writing of the commencement of any legal proceedings affecting
Trustor's title to the Trust Property or Beneficiary's Lien on or security
interest in the Trust Property, or any part thereof, and shall take all such
action, employing attorneys agreeable to Beneficiary, as may be necessary to
preserve Trustor's and Beneficiary's rights affected thereby. If Trustor fails
or refuses to adequately or vigorously, in the sole judgment of Beneficiary,
defend Trustor's or Beneficiary's rights to the Trust Property, Beneficiary may
take such action on behalf of and in the name of Trustor and at Trustor's
expense. Moreover, Beneficiary may take (or cause its agents to take) such
independent action in connection therewith as they may in their discretion deem
proper, including, without limitation, the right to employ independent counsel
and to intervene in any suit affecting the Trust Property. All costs, expenses
and attorneys' fees incurred by Beneficiary
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(or its agents) pursuant to this Section 9.22 or in connection with the defense
by Beneficiary of any claims, demands or litigation relating to Trustor, the
Trust Property or the transactions contemplated in this Deed of Trust shall be
paid by Trustor on demand, plus interest thereon from the date of the advance by
Beneficiary until reimbursement of Beneficiary at the Default Rate.
SECTION 9.23 Exculpation Provisions. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS DEED OF TRUST; AND AGREES
THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS DEED OF TRUST;
THAT IT HAS IN FACT READ THIS DEED OF TRUST AND IS FULLY INFORMED AND HAS FULL
NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS DEED OF TRUST;
THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE
THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS DEED OF TRUST AND
HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS DEED OF TRUST; AND
THAT IT RECOGNIZES THAT CERTAIN TERMS OF THIS DEED OF TRUST RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS DEED OF TRUST ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
SECTION 9.24 No Merger of Estates. So long as any part of the
Obligations remain unpaid, unperformed or undischarged, the fee, easement and
leasehold estates to the Trust Property shall not merge but rather shall remain
separate and distinct, notwithstanding the union of such estates either in
Trustor, Beneficiary, any lessee, any third-party purchaser or otherwise.
SECTION 9.25 Intentionally Deleted.
SECTION 9.26 Intentionally Deleted.
SECTION 9.27 Intentionally Deleted.
SECTION 9.28 Release and Reconveyance. Lender will release and
reconvey its interest under this Deed of Trust to the Trust Property as required
by Section 7.04 of the Credit Agreement.
[NO FURTHER TEXT ON THIS PAGE; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date
first above written.
TRUSTOR:
LAKES GAMING-MISSISSIPPI, LLC, a
Minnesota limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
its: President and Chief Financial Officer
-------------------------------------
33
STATE OF MISSISSIPPI )
) ss.
COUNTY OF )
Personally appeared before me, the undersigned authority in and for the said
county and state, on this ____ day of _________ , 2006, within my jurisdiction,
the within named _________, who acknowledged that he/she is _________ of Lakes
Gaming-Mississippi, LLC, a Minnesota limited liability company, and that for and
on behalf of the said limited liability company, and as its act and deed he/she
executed the above and foregoing instrument, after first having been duly
authorized by said limited liability company so to do.
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EXHIBIT A
LEGAL DESCRIPTION
Exhbit A-1