After Recording Return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
Tower I, Suite 1000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT AND
ASSIGNMENT OF RENTS AND REVENUES
[Arizona]
THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, AND
ASSIGNMENT OF RENTS AND REVENUES (this "Deed of Trust") is given as of the 7th
day of April, 2000 by the Trustor named below to the Trustee named below, for
the use and benefit of the Beneficiary named below.
ARTICLE 1
PARTIES, PROPERTY, AND DEFINITIONS
The following terms and references shall have the meanings indicated:
1.1 Trustor: AIOP Lost Dutchman Notes, L.L.C., a Delaware limited
liability company, whose mailing address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, together with any future owner of the Property or any
part thereof or interest therein.
1.2 Beneficiary: U.S. BANK NATIONAL ASSOCIATION, whose mailing address
is ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, together with
any legal holder of the Note.
1.3 Trustee: ▇▇▇▇▇▇▇ Title & Trust of Phoenix, Inc., a Delaware
corporation, whose mailing address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇.
1.4 Note: The Revolving Promissory Note of even date herewith, executed
by Trustor, Asset Investors Operating Partnership, L.P., a Delaware limited
partnership ("Operating Partnership") and Community Savanna Club Joint Venture
("Joint Venture") payable to the order of Beneficiary in the principal face
amount of $15,000,000.00, together with all renewals, extensions, and
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modifications of the Note. All terms and provisions of the Note are incorporated
by this reference in this Deed of Trust.
1.5 Loan Agreement: The Line of Credit Agreement of even date herewith
executed by Trustor, Operating Partnership, Joint Venture, AIOP Florida
Properties I, L.L.C., a Delaware limited liability company, AIOP Florida
Properties II, L.L.C., a Delaware limited liability company, and the
Beneficiary, and all renewals, extensions, modifications and amendments thereof.
All capitalized terms not otherwise defined herein shall bear the meaning given
to them in the Loan Agreement.
1.6 Real Property: The real property described in Exhibit A, attached
hereto and by this reference incorporated herein, together with all right, title
and interest of Trustor in the following with respect to the real property,
whether now owned or hereafter acquired by Trustor:
(a) All improvements now or hereafter located on such real property
(excluding manufactured homes and setup owned by third parties) and all
easements and appurtenances thereto;
(b) The land lying within any street or roadway adjoining the real
property; any vacated or hereafter vacated street or alley adjoining the real
property; and any strips and gores adjoining the real property;
(c) All and singular the passages, waters, water rights (whether
tributary or non-tributary or not non-tributary), water courses, riparian
rights, ▇▇▇▇▇, well permits, water stock, other rights, liberties and privileges
thereof or in any way now or hereafter appertaining to the real property,
including homestead and any other claim at law or in equity, as well as any
after-acquired title, franchise or license, and the reversion and reversions and
remainder and remainders thereof;
(d) All machinery, apparatus, equipment, fittings, fixtures
(whether actually or constructively attached or incorporated, and including all
trade, domestic, and ornamental fixtures, but excluding manufactured homes and
setups owned by third parties) now or hereafter located in, upon, or under such
real property or improvements and used or usable in connection with any present
or future operation thereof, including but not limited to all lighting, utility,
and power equipment; engines; pipes; pumps; tanks; motors; conduits; utility
systems, plumbing, lifting, cleaning, fire prevention, fire extinguishing,
signage, heating, air-conditioning; communication apparatus; water heaters;
ranges; furnaces; appliances, refrigerators, stoves; shades, awnings, screens,
storm doors and windows; attached cabinets; rugs, carpets and draperies and all
additions thereto and replacements therefor;
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1.7 Tangible Personalty: All right, titles and interests of the Trustor
in and to the following, with respect to the Real Property:
(a) All goods, trade fixtures, fixtures, inventory, furnishings,
fittings, machinery, apparatus, equipment, building and other construction
materials, supplies, and other tangible personal property of every nature now
owned or hereafter acquired by Trustor and used, intended for use, or reasonably
required in the development, construction, reconstruction, alteration, repair,
or operation of the Property and any improvements or infrastructure located
thereon, together with all accessions thereto, replacements and substitutions
therefor, and proceeds thereof, including, without limitation, to the extent not
deemed to be real property under this Deed of Trust, all apparatus, machinery,
motors, elevators, fittings, equipment, and other furnishings and all plumbing,
heating, lighting, cooking, laundry, ventilating, refrigerating, incinerating,
air-conditioning and sprinkler equipment and fixtures, all clubhouse and
swimming pool equipment, lockers, lifeguard equipment, lawn or deck chairs,
towels, swimming pool cleaning and maintenance equipment, recreational and
fitness equipment, including but not limited to rowing machines, stationery
bikes, nautilus equipment and appurtenances thereto.
1.8 Intangible Personalty: All right, title and interest of the Trustor
in and to the following, with respect to the Real Property:
(a) all of the rents, royalties, income (including, without
limitation, operating income), receipts, revenues, issues, and profits of and
from the use, operation, or enjoyment of such real property and improvements
(collectively, the "Income"), whether such Income is attributable to the period,
or is collected, prior to or subsequent to any default by Trustor and all causes
of action associated with the collection of such Income;
(b) all plans and specifications for the improvements on the real
property; soil, environmental, engineering, land planning maps, surveys and
other studies and reports concerning the real property or prepared for the
orderly planning and development of the real property, including all plans,
drawings and studies concerning the platting or replatting of the real property;
all contracts and subcontracts relating to the improvements on the real
property, or any thereof;
(c) all of Trustor's rights and prerogatives arising in connection
with or by virtue of Trustor's ownership of lots in the real property including,
without limitation, the right to vote as a member of any lot owners' association
and all rights arising under any declaration described in Exhibit B and under
the articles of incorporation and bylaws of such association;
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(d) all awards and payments, including interest thereon, resulting
from the exercise of any right of eminent domain or any other public or private
taking of, casualty or injury to, or decrease in the value of, any of such real
property, including without limitation all property insurance payments, proceeds
and policies related to such real property;
(e) all of the licenses, permits, franchises, and other
entitlements to use and all rights thereto which have been issued by or which
are pending before any governmental or quasi-governmental agency which are
necessary or appropriate for the Property;
(f) all accounts, accounts receivable, deposit accounts, escrow
accounts, monies, claims, causes of action, rights to payment, prepaid insurance
an d other prepaid items, contracts, contract rights, refunds and rebates,
maintenance contracts, maintenance warranties, continuing agreements, down
payment deposits, general intangibles associated with the Property and insurance
proceeds;
(g) all water taps, sewer taps, building permits, curb cut permits,
storm water discharge permits, refunds, rebates or deposits due or to become due
from any utility companies or Governmental Entity;
(h) the absolute right to Trustor's interest in any trade name used
by Trustor in connection with the Property and all of Trustor's rights in and to
contract rights, leases, concessions, trade names, trademarks, service marks,
logos, operating systems, trade secrets, technology and technical information,
copyrights, warranties, licenses, plans, drawings and other items of intangible
personal property relating to the ownership or operation of the Property; and
(i) all other and greater rights and interests of every nature in
such property and in the possession or use thereof and income therefrom, whether
now owned or subsequently acquired by Trustor.
1.9 Property: The Real Property, the Tangible Personalty and the
Intangible Personalty are sometimes collectively called the "Property." It is
specifically understood that the enumeration of any specific articles of the
Property, including Tangible Personalty and Intangible Personalty shall in no
way exclude or be held to exclude any items of property not specifically
mentioned. All of the Real Property, Tangible Personalty and Intangible
Personalty, whether affixed or annexed or not, and all rights hereby conveyed
and mortgaged are intended to be as a unit and are hereby understood and agreed
and declared to be appropriated to the use of the real estate, and shall for the
purposes of this Deed of Trust be deemed to be real estate and conveyed and
mortgaged hereby.
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Any capitalized terms not otherwise defined in Sections 1.6 through 1.9 of this
Deed of Trust and not defined in the Loan Agreement shall bear the meaning given
to them in Arizona Revised Statutes ("A.R.S.") Sections 47-1101 through
47-11107, as amended from time to time (the "Arizona Uniform Commercial Code").
1.10 The Secured Obligations: The Property is granted and shall be held
for the purpose of securing the following (the "Secured Obligations"):
(a) The payment of the indebtedness as evidenced in the Note;
(b) The performance and observance of all terms, covenants,
conditions, and provisions to be performed or observed by the Trustor pursuant
to the terms of:
(i) this Deed of Trust,
(ii) the Security Agreement executed by Trustor in connection
with the Project,
(iii) the Financing Statements on the Project,
(iv) the Loan Agreement,
(v) any and all pledge or other security agreements, loan
agreements, disbursement agreements, supplemental agreements, assignments (both
present and collateral), side letters, as the same may be amended, modified or
supplemented from time to time, being referred to hereinafter as "Related
Agreements" associated with the Project.
(c) The payment of all sums expended or advanced by Beneficiary
pursuant to the terms hereof.
(d) The payment and performance of all Obligations under the Loan
Agreement and any Loan Documents executed in connection therewith.
(e) The payment of all future advances under the Note and Loan
Agreement, made pursuant to the terms of the Note, Loan Agreement and other Loan
Documents.
The Note, this Deed of Trust, the Security Agreement, Financing Statements,
Related Agreements, Loan Agreement and any and all other documents or
instruments executed in connection with the foregoing to evidence or secure the
Note, specifically excluding, however, the Environmental Indemnity Agreement,
shall be hereinafter collectively called the "Loan Documents".
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ARTICLE 2
GRANTING CLAUSE
2.1 Grant to Trustee. As security for the Secured Obligations, Trustor
hereby grants, bargains, sells, and conveys the Property to Trustee, in trust
forever, with power of sale, for the use and benefit of Beneficiary, and subject
to all provisions hereof.
2.2 Security Interest to Beneficiary. As additional security for the
Secured Obligations, Trustor hereby grants to Beneficiary a security interest in
the Tangible Personalty and in the Intangible Personalty and in such of the Real
Property as may be deemed personalty (collectively, the "Collateral"). To the
extent any of the Collateral may be or has been acquired with funds advanced by
Beneficiary under the Loan Documents, this security interest is a purchase money
security interest. This Deed of Trust constitutes a Security Agreement under the
Arizona Uniform Commercial Code (the "Code") with respect to any part of the
Property and Collateral that may or might now or hereafter be or be deemed to be
personal property, fixtures or property other than real estate; all of the
terms, provisions, conditions and agreements contained in this Deed of Trust
pertain and apply to the Collateral as fully and to the same extent as to any
other property comprising the Property, and the following provisions of this
section shall not limit the generality or applicability of any other provision
of this Deed of Trust but shall be in addition thereto:
(a) The Collateral is not used or bought for personal, family or
household purposes;
(b) The Tangible Personalty shall be kept at the real estate
comprising a part of the Property, and shall not be removed therefrom (unless
contemporaneously replaced with similar items of equal or greater value) without
the consent of Beneficiary and the Tangible Personalty may be affixed to such
real estate but shall not be affixed to any other real estate;
(c) No financing statement covering any of the Collateral or any
proceeds thereof is on file in any public office; and Trustor will, at its cost
and expense, upon demand, furnish to Beneficiary such further information and
will execute and deliver to Beneficiary such financing statements and other
documents in form reasonably satisfactory to Beneficiary and will do all such
acts and things as Beneficiary may at any time or from time to time reasonably
request or as may be reasonably necessary or appropriate to establish and
maintain a perfected security interest in the Collateral as security for the
Secured Obligations, subject to no adverse liens or encumbrances; and Trustor
will pay the cost of filing the same or filing or recording such financing
statements or other documents and this instrument in all public offices wherever
filing or recording is deemed by Beneficiary to be reasonably necessary or
desirable;
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(d) The terms and provisions contained in this section and in
Section 7.5 (Enforcement of Security Interests) of this Deed of Trust shall,
unless the context otherwise requires, have the meanings and be construed as
provided in the Code; and
(e) This Deed of Trust constitutes a security agreement and
financing statement under the Code with respect to the Collateral. As such, this
Deed of Trust covers all items of the Collateral that are personal property
including all items which are to become fixtures. Trustor is the "Debtor" and
Beneficiary is the "Secured Party" (as those terms are defined and used in the
Code) insofar as this Deed of Trust constitutes a financing statement.
(f) Upon its recording in the real property records, this Deed of
Trust shall be effective as a financing statement filed as a fixture filing. In
addition, a carbon, photographic or other reproduced copy of this Deed of Trust
and/or any financing statement relating hereto shall be sufficient for filing
and/or recording as a financing statement. The filing of any other financing
statement relating to any personal property, rights or interests described
herein shall not be construed to diminish any right or priority hereunder.
ARTICLE 3
TRUSTOR'S TITLE AND AUTHORITY
3.1 Warranty of Title. Trustor represents and warrants to Beneficiary
that Trustor has good and marketable title to the Property in fee simple
absolute, subject only to the lien of general taxes for the current year,
payable the following year, and those additional matters, if any, set forth in
Exhibit B, attached hereto and by this reference incorporated herein ("Permitted
Exceptions"). Trustor further represents and warrants to Beneficiary that
Trustor is the absolute owner of the Collateral, free of any liens,
encumbrances, security interests, and other claims whatsoever, except insofar as
the Collateral may be encumbered by the lien of general taxes for the current
year, payable the following year. Trustor, for itself and its successors and
assigns, hereby agrees to warrant and forever defend, all and singular, all of
the Property and property interest granted and conveyed in trust pursuant to
this Deed of Trust, against every person whomsoever lawfully claiming, or to
claim, the same or any part thereof, subject to the Permitted Exceptions. The
warranties contained in this section shall survive foreclosure of this Deed of
Trust, and shall inure to the benefit of and be enforceable by any person who
may acquire title to the Property or the Collateral pursuant to any such
foreclosure.
3.2 Waiver of Homestead and Other Exemptions. To the extent permitted
by law, Trustor hereby waives all rights to any homestead or other exemption to
which Trustor would otherwise be entitled under any present or future
constitutional, statutory, or other provision of applicable state or federal
law.
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3.3 Due Authorization. If Trustor is other than a natural person, then
each individual who executes this document on behalf of Trustor represents and
warrants to Beneficiary that such execution has been duly authorized by all
necessary corporate, partnership, or other action on the part of Trustor.
ARTICLE 4
TRUSTOR'S AFFIRMATIVE COVENANTS
4.1 Payment of Note. Trustor will pay all principal, interest, and
other sums payable under the Note, the Loan Agreement or this Deed of Trust or
the Loan Documents, on the date when such payments are due, without notice or
demand.
4.2 Performance of Other Obligations. Trustor will, in all material
respects, perform and comply with all other covenants, conditions, and
prohibitions required of Trustor by the terms of the Loan Documents.
4.3 Other Encumbrances. Trustor will, in all material respects, perform
and comply with all covenants, conditions, and prohibitions required of Trustor
in connection with any other encumbrance affecting the Property or the
Collateral, or any part thereof, or any interest therein, regardless of whether
such other encumbrance is superior or subordinate to the lien hereof. This
paragraph does not authorize any lien or encumbrance against the Property or the
Collateral except as permitted by Section 3.1 or with the prior written consent
of the Beneficiary as provided in this Deed of Trust.
4.4 Payment of Taxes.
(a) Property Taxes. Trustor will pay, before delinquency, all taxes
and assessments, including without limitation, general, special and metropolitan
district taxes, water charges, sewer service charges (collectively, the
"Impositions"), which may be levied or imposed at any time against Trustor's
interest and estate in the Property or the Collateral. Within ten days after
request by Beneficiary, Trustor will deliver to Beneficiary an official receipt
for such payment or other evidence that such payment has been made.
(b) Deposit for Taxes. If required by the Beneficiary, concurrently
with the delivery of this Deed of Trust, Trustor has deposited with Beneficiary
an amount equal to 1/12th of the amount which Beneficiary estimates will be
required to make the next annual payment of Impositions, multiplied by the
number of whole and partial months which have elapsed since March 31 of the
current year. With each monthly payment under the Note, Trustor will deposit
with Beneficiary an amount equal to 1/12th of the amount which Beneficiary
estimates will be required to pay the next required installment or payment of
Impositions. The purpose of these provisions is to provide Beneficiary with
8
sufficient funds on hand to pay all such Imposition charges 30 days before the
date on which they become past due. Provided no default exists hereunder,
Beneficiary will apply the amounts so deposited to the payment of such
Imposition when due, but in no event will Beneficiary be liable for any interest
on any amount so deposited, and the money so received may be held and commingled
with Beneficiary's own funds. If the funds so deposited are insufficient to the
Impositions for any year when the same shall become due and payable, the Trustor
shall, within ten (10) days after receipt of demand therefor, deposit such
additional funds as may be necessary to pay such Impositions in full.
(c) Intangible Taxes. If by reason of any statutory or
constitutional amendment or judicial decision adopted or rendered after the date
hereof, any tax, assessment, or similar charge is imposed against the Note,
against Beneficiary arising directly from Beneficiary's interests in the Loan
Documents (other than a tax based on Beneficiary's income), or against any
security interest of Beneficiary in the Property, Trustor will pay such tax,
assessment, or other charge before delinquency and will indemnify Beneficiary
against all loss, expense, or diminution of income in connection therewith. In
the event Trustor is unable to do so, either for economic reasons or because the
legal provisions or decisions creating such tax, assessment or charge forbid
Trustor from doing so, then the Note will, at Beneficiary's option, become due
and payable in full upon 30 days' notice to Trustor.
(d) Right to Contest. Notwithstanding any other provision of this
section, Trustor will not be deemed to be in default solely by reason of
Trustor's failure to pay any Impositions so long as, in Beneficiary's reasonable
judgment, each of the following conditions is satisfied:
(i) Trustor is engaged in and diligently pursuing in good faith
administrative or judicial proceedings appropriate to contest the validity or
amount of such Impositions; and:
(ii) Nonpayment of such Impositions will not result in the loss
or forfeiture of any Property encumbered hereby or any interest of Beneficiary
therein.
If Beneficiary reasonably determines that any one or more of such conditions is
not satisfied or is no longer satisfied, Trustor will pay the Impositions in
question, together with any interest and penalties thereon, within ten days
after Beneficiary gives notice of such determination.
4.5 Maintenance of Insurance. Trustor shall provide and maintain
policies of insurance on the Property in accordance with the Loan Agreement.
(a) Deposit for Premiums. If required by Beneficiary, concurrently
with the delivery of this Deed of Trust, Trustor has deposited with Beneficiary
an amount equal to 1/12th of the amount which Beneficiary estimates will be
9
required to make the next annual payments of the premium for the policies of
insurance referred to in this section, multiplied by the number of whole and
partial months which have elapsed since the most recent policy anniversary date
for each such policy ("Insurance Premium"). With each monthly payment under the
Note, Trustor will deposit an amount equal to 1/12th of the amount which
Beneficiary estimates will be required to pay the next required annual premium
for each insurance policy referred to in this section. The purpose of these
provisions is to provide Beneficiary with sufficient funds on hand to pay all
such Insurance Premiums thirty (30) days before the date on which they become
past due. Trustor shall, within ten (10) days after receipt of demand therefor,
deposit such additional funds as are necessary to make up any deficiencies in
amounts necessary to pay such Insurance Premiums when due. Provided no default
exists hereunder, Beneficiary will apply the amounts so deposited to the payment
of such Insurance Premiums when due, but in no event will Beneficiary be liable
for any interest on any amount so deposited, and the money so received may be
held and commingled with Beneficiary's own funds.
(b) Renewal Policies. Not less than thirty (30) days prior to the
expiration date of each insurance policy required pursuant to the Loan
Agreement, Trustor will deliver to Beneficiary a copy of an appropriate renewal
policy certified by Trustor as complete and accurate, together with evidence
reasonably satisfactory to Beneficiary that the applicable premium has been
prepaid.
(c) Successor's Rights. Any person who acquires title to the
Property or the Collateral upon foreclosure hereunder will succeed to all of
Trustor's rights under all policies of insurance maintained pursuant to this
section, including, without limitation, all rights to all claims under all such
insurance policies regardless of the nature of such claim or when such claim
arose.
4.6 Damages; Insurance and Condemnation Proceeds.
(a) The following (whether now existing or hereafter arising) are
all absolutely and irrevocably assigned by Trustor to Beneficiary and, at the
request of Beneficiary, shall be paid directly to Beneficiary: (i) all awards of
damages and all other compensation payable directly or indirectly by reason of a
condemnation or proposed condemnation for public or private use affecting all or
any part of, or any interest in, the Property; (ii) all other claims and awards
for damages to, or decrease in value of, all or any part of, or any interest in,
the Property; (iii) all proceeds of any insurance policies payable by reason of
loss sustained to all or any part of the Property; and (iv) all interest which
may accrue on any of the foregoing. Subject to applicable law, and without
regard to any requirement contained in Section 4.8(d) Beneficiary may at its
discretion apply all or any of the proceeds it receives to its expenses in
settling, prosecuting or defending any claim and may apply the balance to the
Secured Obligations in any order, and/or Beneficiary may release all or any part
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of the proceeds to Trustor upon any conditions Beneficiary may impose.
Beneficiary may commence, appear in, defend or prosecute any assigned claim or
action and may adjust, compromise, settle and collect all claims and awards
assigned to Beneficiary; provided, however, in no event shall Beneficiary be
responsible for any failure to collect any claim or award, unless such failure
is due to the gross negligence of Beneficiary.
(b) So long as no Default exists and is continuing, Beneficiary may
permit insurance or condemnation proceeds held by Beneficiary to be used for
repair or restoration but may condition such application upon reasonable
conditions, including, without limitation: (i) the deposit with Beneficiary of
such additional funds which Beneficiary determines are needed to pay all costs
of the repair or restoration, (including, without limitation, taxes, financing
charges, insurance and rent during the repair period); (ii) the establishment of
an arrangement for lien releases and disbursement of funds acceptable to
Beneficiary; (iii) the delivery to Beneficiary of plans and specifications for
the work, a contract for the work signed by a contractor acceptable to
Beneficiary, a cost breakdown for the work and a payment and performance bond
for the work, all of which shall be acceptable to Beneficiary; and (iv) the
delivery to Beneficiary of evidence acceptable to Beneficiary (aa) that after
completion of the work, and sufficient time has elapsed to re-lease the Property
(but in no event longer than six months after completion of the work), the
income from the Property will be sufficient to pay all expenses and debt service
for the Property; (bb) of the continuation of Leases acceptable to and required
by Beneficiary; (cc) that upon completion of the work, the size, capacity and
total value of the Property will be at least as great as it was before the
damage or condemnation occurred; (dd) that there has been no material adverse
change in the financial condition or credit of Trustor since the date of this
Deed of Trust; and (ee) of the satisfaction of any additional conditions that
Beneficiary may reasonably establish to protect its security. Trustor hereby
acknowledges that the conditions described above are reasonable, and, if such
conditions have not been satisfied or progress satisfactory to the Beneficiary
made by Trustor in achieving satisfaction of the conditions within ninety (90)
days of receipt by Beneficiary of such insurance or condemnation proceeds, then
Beneficiary may apply such insurance or condemnation proceeds to pay down
principal of the Secured Obligations in such order and amounts as Beneficiary in
its sole discretion may choose.
4.7 Performance of Lease Obligations. Trustor will use commercially
reasonable efforts to keep the Property fully leased at rental rates prevailing
in the market and to perform, in all material respects, all of Trustor's
obligations under or in connection with each present and future lease of all or
any part of the Property ("Leases").
4.8 Liens, Encumbrances and Charges. Trustor shall immediately
discharge any lien not approved by Beneficiary in writing that has or may attain
priority over this Deed of Trust. Subject to the provisions of the Loan
Agreement regarding mechanics' liens, Trustor shall pay when due all obligations
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secured by or reducible to liens and encumbrances which shall now or hereafter
encumber or appear to encumber all or any part of the Property or any interest
therein, whether senior or subordinate hereto.
4.9 Management. The Trustor will provide and maintain good and
efficient management of the Property satisfactory to Beneficiary. Trustor shall
obtain Beneficiary's advance written approval of any management provided, and of
any contract therefor or assignment thereof, which written approval shall not be
unreasonably withheld, conditioned or delayed.
4.10 Mechanics' Liens. Trustor will keep the Property free and clear of
all stop notices, liens and claims of liens by contractors, subcontractors,
mechanics, laborers, materialmen, and other such persons in the manner provided
in the Loan Agreement.
4.11 Defense of Actions. Trustor will defend, at Trustor's expense, any
action, proceeding or claim which affects any Property encumbered hereby or any
interest of Beneficiary in such Property or in the Secured Obligations, and will
indemnify and hold Beneficiary harmless from all loss, damage, cost, or expense,
including attorneys' fees, which Beneficiary may incur in connection therewith.
4.12 Inventories; Assembly of Tangible Personalty. Trustor will, from
time to time at the request of Beneficiary, supply Beneficiary with a current
inventory of the Tangible Personalty, in such detail as Beneficiary may require.
Upon the occurrence of any Event of Default hereunder, Trustor will, at
Beneficiary's request assemble the Tangible Personalty and make the Tangible
Personalty available to Beneficiary at any place designated by Beneficiary which
is reasonably convenient to both parties.
4.13 Further Assurances; Estoppel Certificates. Trustor will execute
and deliver to Beneficiary upon demand, and pay the costs of preparation and
recording thereof, any further documents which Beneficiary may request to
confirm or perfect the liens and security interests created or intended to be
created hereby, or to confirm or perfect any evidence of the Secured
Obligations. Trustor will also, within ten (10) days after any request by
Beneficiary, deliver to Beneficiary a signed and acknowledged statement
certifying to Beneficiary, or to any proposed transferee of the Secured
Obligations, (a) the balance of principal, interest, and other sums then
outstanding under the Note, and (b) whether Trustor claims to have any offsets
or defenses with respect to the Secured Obligations and, if so, the nature of
such offsets or defenses.
4.14 Parking Requirements. Trustor shall maintain at all times
sufficient parking spaces to comply, in all material respects, with the parking
requirements of all Leases, zoning and other regulations affecting the Property.
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4.15 Financial Statements and Inspection of Records. Trustor, at
Trustor's expense, shall furnish to Beneficiary the financial and other reports
required by the Loan Agreement.
4.16 Security Deposits. Upon the occurrence of a Default and during its
continuance, required by the Beneficiary, Trustor shall keep and maintain in a
separate Beneficiary account with Beneficiary, any security deposits or advance
payments received from tenants in lieu of security deposits. Upon the
Beneficiary's request, the Beneficiary shall be named on the Beneficiary account
and no funds shall be withdrawn therefrom without the prior written consent of
the Beneficiary.
4.17 Acceptance of Trust; Powers and Duties of Trustee.
(a) Trustee accepts this trust when this Deed of Trust is delivered
by Trustor to Beneficiary. Except as may be required by applicable law, Trustee
may from time to time apply to any court of competent jurisdiction for aid and
direction in the execution of the trust hereunder and the enforcement of the
rights and remedies available hereunder, and may obtain orders or decrees
directing or confirming or approving acts in the execution of said trust and the
enforcement of said remedies.
(b) Trustee shall not be required to take any action toward the
execution and enforcement of the trust hereby created or to institute, appear
in, or defend any action, suit, or other proceeding in connection therewith
where, in his opinion, such action would be likely to involve him in expense or
liability, unless requested so to do by a written instrument signed by
Beneficiary and, if Trustee so requests, unless Trustee is tendered security and
indemnity satisfactory to Trustee against any and all cost, expense, and
liability arising therefrom. Trustee shall not be responsible for the execution,
acknowledgment, or validity of the Loan Documents, or for the proper
authorization thereof, or for the sufficiency of the lien and security interest
purported to be created hereby, and Trustee makes no representation in respect
thereof or in respect of the rights, remedies, and recourses of Beneficiary.
(c) With the approval of Beneficiary, Trustee shall have the right
to take any and all of the following actions: (i) to select, employ, and advise
with counsel (who may be, but need not be, counsel for Beneficiary) upon any
matters arising hereunder, including the preparation, execution, and
interpretation of the Loan Documents, and shall be fully protected in relying as
to legal matters on the advice of counsel, (ii) to execute any of the trusts and
powers hereof and to perform any duty hereunder either directly or through his
agents or attorneys, (iii) to select and employ, in and about the execution of
his duties hereunder, suitable accountants, engineers and other experts, agents
and attorneys-in-fact, either corporate or individual, not regularly in the
employ of Trustee, and Trustee shall not be answerable for any act, default,
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negligence, or misconduct of any such accountant, engineer or other expert,
agent or attorney-in-fact, if selected with reasonable care, or for any error of
judgment or act done by Trustee in good faith, or be otherwise responsible or
accountable under any circumstances whatsoever, except for Trustee's gross
negligence or bad faith, and (iv) any and all other lawful action as Beneficiary
may instruct Trustee to take to protect or enforce Beneficiary's rights
hereunder. Trustee shall not be personally liable in case of entry by Trustee,
or anyone entering by virtue of the powers herein granted to Trustee, upon the
Property for debts contracted for or liability or damages incurred in the
management or operation of the Property. Trustee shall have the right to rely on
any instrument, document, or signature authorizing or supporting any action
taken or proposed to be taken by Trustee hereunder, believed by Trustee in good
faith to be genuine. Trustee shall be entitled to reimbursement for expenses
incurred by Trustee in the performance of Trustee's duties hereunder and to
reasonable compensation for such of Trustee's services hereunder as shall be
rendered. TRUSTOR WILL, FROM TIME TO TIME, PAY THE REASONABLE COMPENSATION DUE
TO TRUSTEE HEREUNDER AND REIMBURSE TRUSTEE FOR, AND INDEMNIFY AND HOLD HARMLESS
TRUSTEE AGAINST, ANY AND ALL LIABILITY AND REASONABLE EXPENSES WHICH MAY BE
INCURRED BY TRUSTEE IN THE PERFORMANCE OF TRUSTEE'S DUTIES.
(d) 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 applicable law) and Trustee shall be under no liability for
interest on any moneys received by Trustee hereunder.
(e) Should any deed, conveyance, or instrument of any nature be
required from Trustor by any Trustee or substitute Trustee to more fully and
certainly vest in and confirm to the Trustee or substitute Trustee such estates,
rights, powers, and duties, then, upon request by the Trustee or substitute
Trustee, any and all such deeds, conveyances and instruments shall be made,
executed, acknowledged, and delivered and shall be caused to be recorded and/or
filed by Trustor.
(f) By accepting or approving anything required to be observed,
performed, or fulfilled or to be given to Trustee pursuant to the Loan
Documents, including without limitation, any deed, conveyance, instrument,
officer's certificate, balance sheet, statement of profit and loss or other
financial statement, survey, appraisal, or insurance policy, Trustee shall not
be deemed to have warranted, consented to, or affirmed the sufficiency,
legality, effectiveness, or legal effect of the same, or of any term, provision,
or condition thereof, and such acceptance or approval thereof shall not be or
constitute any warranty or affirmation with respect thereto by Trustee.
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4.18 Compensation; Exculpation; Indemnification.
(a) Trustor shall pay Trustee's reasonable fees and reimburse
Trustee for reasonable expenses in the administration of this trust, including
reasonable attorneys' fees. Trustor shall pay to Beneficiary reasonable
compensation for services rendered concerning this Deed of Trust, including
without limit any statement of amounts owing under any Secured Obligation.
Beneficiary shall not directly or indirectly be liable to Trustor or any other
person as a consequence of (i) the exercise of the rights, remedies or powers
granted to Beneficiary in this Deed of Trust; (ii) the failure or refusal of
Beneficiary to perform or discharge any obligation or liability of Trustor under
any agreement related to the Property or Collateral or under this Deed of Trust;
or (iii) any loss sustained by Trustor or any third party resulting from
Beneficiary's failure (whether by malfeasance, nonfeasance or refusal to act) to
lease the Property after a Default (defined in the Loan Agreement) or from any
other act or omission (regardless of whether same constitutes negligence) of
Beneficiary in managing the Property after a Default unless the loss is caused
by the gross negligence or willful misconduct of Beneficiary and no such
liability shall be asserted against or imposed upon Beneficiary, and all such
liability is hereby expressly waived and released by Trustor.
(b) TRUSTOR INDEMNIFIES TRUSTEE AND BENEFICIARY AGAINST, AND HOLDS
TRUSTEE AND BENEFICIARY HARMLESS FROM, ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS,
CAUSES OF ACTION, JUDGMENTS, COURT COSTS, ATTORNEYS' FEES AND OTHER LEGAL
EXPENSES, COST OF EVIDENCE OF TITLE, COST OF EVIDENCE OF VALUE, AND OTHER
EXPENSES WHICH EITHER MAY SUFFER OR INCUR: (i) BY REASON OF THIS DEED OF TRUST;
(ii) BY REASON OF THE EXECUTION OF THIS TRUST OR IN PERFORMANCE OF ANY ACT
REQUIRED OR PERMITTED HEREUNDER OR BY LAW; (iii) AS A RESULT OF ANY FAILURE OF
TRUSTOR TO PERFORM TRUSTOR'S OBLIGATIONS; OR (iv) BY REASON OF ANY ALLEGED
OBLIGATION OR UNDERTAKING ON BENEFICIARY'S PART TO PERFORM OR DISCHARGE ANY OF
THE REPRESENTATIONS, WARRANTIES, CONDITIONS, COVENANTS OR OTHER OBLIGATIONS
CONTAINED IN ANY OTHER DOCUMENT RELATED TO THE SUBJECT PROPERTY AND COLLATERAL.
THE ABOVE OBLIGATION OF TRUSTOR TO INDEMNIFY AND HOLD HARMLESS TRUSTEE AND
BENEFICIARY SHALL SURVIVE THE RELEASE AND CANCELLATION OF THE SECURED
OBLIGATIONS AND THE RELEASE OR PARTIAL RELEASE OF THE LIEN OF THIS DEED OF
TRUST.
(c) Trustor shall pay all amounts and indebtedness arising under
this Section 4.18 immediately upon demand by Trustee or Beneficiary together
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with interest thereon from the date the indebtedness arises at the rate of
interest then applicable to the principal balance of the Note as specified
therein.
4.19 Substitution of Trustees. Beneficiary may, from time to time, by a
written instrument executed and acknowledged by Beneficiary, mailed to Trustor
and recorded in the county in which the Property is located and by otherwise
complying with the provisions of applicable law, substitute a successor or
successors to any Trustee named herein or acting hereunder, and such
successor(s) shall, without conveyance from the Trustee predecessor, succeed to
all title, estate, rights, powers and duties of such predecessor.
ARTICLE 5
TRUSTOR'S NEGATIVE COVENANTS
5.1 Waste. Trustor will not commit or permit any waste with respect to
the Property or the Collateral.
5.2 Zoning and Private Covenants. Except as specifically provided in
the Loan Agreement, if at all, Trustor will not initiate, join in, or consent to
any change in any zoning ordinance or classification, any change in the "zone
lot" or "zone lots" (or similar zoning unit or units) presently comprising the
Property, any change in any private restrictive covenant, or any change in any
other public or private restriction limiting or defining the uses which may be
made of the Property or any part thereof, without the express written consent of
Beneficiary, which consent shall not be unreasonably withheld, conditioned or
delayed. If under applicable zoning provisions the use of all or any part of the
Property is or becomes a nonconforming use, Trustor will not cause such use to
be discontinued or abandoned without the express written consent of Beneficiary.
5.3 Due on Sale or Encumbrance. Except as provided in the Loan
Agreement, if the Property or any interest therein shall be sold, transferred
(including, without limitation, through sale or transfer of a majority or
controlling interest of the corporate stock or general partnership interests or
limited liability company interests of Trustor), mortgaged, assigned, further
encumbered or leased, whether directly or indirectly, whether voluntarily,
involuntarily or by operation of law, without the prior written consent of
Beneficiary, then Beneficiary, in its sole discretion, may declare all Secured
Obligations immediately due and payable.
5.4 Transfer or Removal of Tangible Personalty. Trustor will not sell,
transfer or remove from the Property all or any material part of the Tangible
Personalty, unless the items sold, transferred, or removed are contemporaneously
replaced with similar items of equal or greater value.
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5.5 Further Encumbrance of Collateral. Trustor will not make any
purchase or conditional sale, lease or agreement under which title is reserved
in the vendor of any Collateral to be placed in or upon any of the buildings or
improvements on the said Property; nor create or permit any junior lien,
security interest or other encumbrance against the Collateral without the prior
written consent of Beneficiary.
5.6 Change of Name. Trustor will not change the name under which
Trustor does business, or adopt or begin doing business under any other name or
assumed or trade name, without first notifying Beneficiary of Trustor's
intention to do so and delivering to Beneficiary such executed modifications or
supplements of this Deed of Trust (and to any financing statement which may be
filed in connection herewith) as Beneficiary may require, except as specifically
permitted in the Loan Agreement.
5.7 Improper Use of Property or Collateral. Trustor will not use the
Property or the Collateral for any purpose or in any manner, or take any action
with respect to the Property which violates any applicable law, ordinance, or
other governmental requirement, the requirements or conditions of any insurance
policy, or any private covenant.
5.8 Right Of Inspection. Beneficiary, its agents and employees, may
enter the Property at any reasonable time for the purpose of inspecting the
Property and ascertaining Trustor's compliance with the terms hereof.
ARTICLE 6
EVENTS OF DEFAULT
Each of the following events will constitute a default (an "Event of
Default") under this Deed of Trust and under each of the other Loan Documents:
6.1 Failure to Pay. Default shall be made in the payment of any
installment of principal or interest on the Note or any other sum under the Loan
Documents when due (after giving consideration to (a) any grace period which may
be applicable under such document and (b) any notice which may be required under
such document).
6.2 Loan Agreement. The occurrence of an Event of Default under the
Loan Agreement.
6.3 Cross Default. A default under that certain Mortgage, Security
Agreement, Financing Statement and Absolute Assignment of Rents and Revenues,
dated of even date herewith, executed by the Community Savanna Club Joint
Venture, which secures the Note and encumbers property situated in the County of
St. Lucie, State of Florida, and such default is not cured within the applicable
cure periods, if any.
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6.4 Superior Lien Against the Property. The assertion of any claim of
priority over this Deed of Trust, by title, lien, or otherwise in any legal,
administrative, or equitable proceeding, unless such assertion be withdrawn, or
effective action satisfactory to Beneficiary commenced (and thereafter
diligently prosecuted) and Beneficiary is secured against any loss or damage
therefrom, within 30 days of the assertion of such claim.
6.5 Abandonment. The actual or constructive abandonment of all or a
substantial portion of the Property or the Collateral (such abandonment
constituting an assignment to Beneficiary, at Beneficiary's option, of Trustor's
interest in any lease or contract now or hereafter affecting the abandoned
property).
6.6 Valid First Lien. The failure of Beneficiary to have a valid first
lien against the entire Property and Collateral as to all advances made now or
at any time in the future pursuant to the Note, this Deed of Trust, or any other
Loan Documents.
6.7 Breach of Covenant. Trustor's failure to keep, observe, perform,
carry out, and execute in all material respects the covenants, agreements,
obligations, and conditions (other than those set out in Sections 6.1 through
6.2, above) set out in this Deed of Trust, the Note, the Loan Agreement, and any
other Loan Document executed by Trustor in connection with or as security for
the Note, unless such failure is cured to Beneficiary's satisfaction following
written notice by Beneficiary to Trustor of such failure. Such notice shall be
titled "Notice of Default" and shall specify the default and, if curable, the
time for cure of such default set forth in the Loan Documents, and if no time
for cure is specified in the Loan Documents, the time for cure shall be 30 days;
provided, however, an Event of Default shall not be deemed to have occurred if
the Default is not curable within the applicable cure period so long as the
Trustor promptly gives written notice to the Beneficiary describing the
Trustor's plan of cure and schedule to cure and commences such cure within
thirty (30) days of notice of Default, and diligently pursues the cure to
completion within ninety (90) days of the notice of Default. The Notice of
Default may be sent simultaneously with or in lieu of any other default notice
necessary to initiate a grace or cure period under this Deed of Trust or any
other Loan Document.
ARTICLE 7
BENEFICIARY'S REMEDIES
Immediately upon or any time after the occurrence of any Event of
Default hereunder, Beneficiary may exercise any remedy available at law or in
equity, including but not limited to those listed below and those listed in the
other Loan Documents, in such sequence or combination as Beneficiary may
determine in Beneficiary's sole discretion:
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7.1 Performance of Defaulted Obligations. Beneficiary may make any
payment or perform any other obligation under the Loan Documents which Trustor
has failed to make or perform, and Trustor hereby irrevocably appoints
Beneficiary as the true and lawful attorney-in-fact for Trustor to make any such
payment and perform any such obligation in the name of Trustor, which
appointment is coupled with Beneficiary's interest in the Property and the
Collateral. All payments made and expenses (including reasonable attorneys' fees
and legal assistant's fees) incurred by Beneficiary in this connection, together
with interest thereon at the Default Rate, as set forth in the Note, from the
date paid or incurred until repaid, will be part of the Secured Obligations and
will be immediately due and payable by Trustor to Beneficiary.
7.2 Specific Performance and Injunctive Relief. Notwithstanding the
availability of legal remedies, Beneficiary will be entitled to obtain specific
performance, mandatory or prohibitory injunctive relief, or other equitable
relief requiring Trustor to cure or refrain from repeating any default.
7.3 Acceleration of Secured Obligations. Beneficiary may, without
notice or demand, declare all of the Secured Obligations immediately due and
payable in full.
7.4 Possession of Property. Beneficiary may enter and take possession
of the Property without seeking or obtaining the appointment of a receiver, may
employ a managing agent for the Property, with respect to all or any part of the
Property, either in Beneficiary's name or in the name of Trustor; provided,
however, it is not the intention of the parties hereto that an entry by
Beneficiary or a managing agent upon the Real Property under the terms of this
Deed of Trust shall make Beneficiary a party in possession in contemplation of
the law, except at the option of Beneficiary.
7.5 Enforcement of Security Interests. Beneficiary may exercise all
rights of a secured party under the Code with respect to the Collateral,
including but not limited to taking possession of, holding, and selling the
Collateral and enforcing or otherwise realizing upon any accounts and general
intangibles. Any requirement for reasonable notice of the time and place of any
public sale, or of the time after which any private sale or other disposition is
to be made, will be satisfied by Beneficiary's giving of such notice to Trustor
at least 15 days prior to the time of any public sale or the time after which
any private sale or other intended disposition is to be made. The Collateral may
be sold by the Trustee as part of the foreclosure sale of the Property as
specifically permitted by A.R.S. Section 47-9501.D.
7.6 Judicial Foreclosure. Commence an action to foreclose the lien of
this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce
any of the covenants hereof;
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7.7 Power of Sale. Exercise the power of sale herein contained and
deliver to Trustee a written statement of breach, notice of default and election
to cause Trustor's interest in the Property to be sold; or
7.8 Other Rights and Remedies. Exercise all other rights and remedies
provided herein, in any Loan Document or other document or agreement now or
hereafter securing or guaranteeing all or any portion of the Secured
Obligations, or by law, including, without limitation, the rights and remedies
provided in A.R.S. Section 33-702.B.
7.9 Exercise of Power of Sale. If Beneficiary elects to exercise the
power of sale herein contained, Beneficiary shall notify Trustee and shall
deposit with Trustee this Deed of Trust and the Note and such receipts and
evidence of expenditures made and secured hereby as Trustee may require.
(a) Upon receipt of such statement and notice from Beneficiary,
Trustee shall cause to be recorded, published and delivered to Trustor such
Notice of Sale as then required by law. Trustee shall, without demand on
Trustor, after lapse of such time as may then be required by law and after
recordation of such Notice of Sale and Notice of Sale having been given as
required by law, sell the Property at the time and place of sale fixed by it in
said Notice of Sale, either as a whole, or in separate lots or parcels or items
as Trustee shall deem expedient, and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale. Trustee shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the property
so sold, but without any covenant or warranty, express or implied. The recitals
in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including, without limitation, Trustor,
Trustee or Beneficiary, may purchase at such sale and Trustor hereby covenants
to warrant and defend the title of such purchaser or purchasers.
(b) After deducting all costs, fees and expenses of Trustee and of
this Deed of Trust, including, without limitation, Trustee's fees and reasonable
attorneys' fees, and costs of evidence of title in connection with sale, Trustee
shall apply the proceeds of sale in the following priority, to payment of: (i)
first, all sums expended under the terms of the Loan Documents, not then repaid,
with accrued interest at the Default Rate (as defined in the Note); (ii) second,
all sums due under the Note, (iii) all other sums, then secured hereby; and (iv)
the remainder, if any, to the person or persons legally entitled thereto or as
provided in A.R.S. Section 33-812 or any similar or successor statute.
(c) Subject to A.R.S. Section 33-810.B., Trustee may postpone sale
of all or any portion of the Property by public announcement at such time and
place of sale, and from time to time thereafter may postpone such sale by public
20
announcement or subsequently noticed sale, and without further notice make such
sale at the time fixed by the last postponement, or may, in it discretion, give
a new notice of sale.
7.10 Enforcement of Security Interests. Beneficiary may exercise all
rights of a secured party under the Uniform Commercial Code with respect to the
Collateral, including but not limited to taking possession of, holding, and
selling the Collateral and enforcing or otherwise realizing upon any accounts
and general intangibles. Any requirement for reasonable notice of the time and
place of any public sale, or of the time after which any private sale or other
disposition is to be made, will be satisfied by Beneficiary's giving of such
notice to Trustor at least 15 days prior to the time of any public sale or the
time after which any private sale or other intended disposition is to be made.
If permitted by statute or court decision, the Collateral may be sold by the
Beneficiary as part of the foreclosure sale of the Property.
7.11 Appointment of Receiver. Beneficiary shall be entitled, as a
matter of absolute right and without regard to the value of any security for the
Secured Obligations or the solvency of any person liable therefor, to the
appointment of a receiver for the Property, the Leases and the Rents and
Revenues upon ex parte application to any court of competent jurisdiction.
Trustor waives any right to any hearing or notice of hearing prior to the
appointment of a receiver.
7.12 Right to Make Repairs, Improvements. Should any part of the
Property come into the possession of Beneficiary or a receiver, whether before
or after an Event of Default, Beneficiary or the receiver and receiver's agents
shall be empowered:
(a) To take possession of the Property, Leases, Rents and Revenues
and any business conducted by Trustor or any other person thereon and any
business assets used in connection therewith and any Property in which
Beneficiary has a security interest granted by Trustor and, if the receiver
deems it appropriate, to operate the same;
(b) To exclude Trustor and Trustor's agents, servants, and
employees from the Property;
(c) With or without taking possession of the Property, to collect
the Rents and Revenues, including those past due and unpaid;
(d) To rent, lease or let all or any portion of the Property to any
party or parties at such rental and upon such terms as the Beneficiary shall,
and to pay any leasing or rental commissions associated therewith in its
discretion, determine;
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(e) To continue the development, marketing and sale of the Property
or any portion thereof;
(f) To complete any construction or development which may be in
progress;
(g) To do such maintenance and make such repairs and alterations as
the receiver deems necessary;
(h) To use all stores of materials, supplies and maintenance
equipment on the Property and to replace and replenish such items at the expense
of the receivership estate;
(i) To pay the operating expenses of the Property, including costs
of management and leasing or marketing thereof (which shall include lease
commissions, sale commissions), payments under contracts and agreements for
development and construction;
(j) To pay all taxes and assessments against the Property and any
property which is collateral for the Secured Obligations, all premiums for
insurance thereon, all utility and other operating expenses, and all sums due
under any prior or subsequent encumbrance;
(k) To borrow from the Beneficiary such funds as may be reasonably
necessary to the effective exercise of the receiver's powers, on such terms as
may be agreed upon by the receiver and the Beneficiary, but not in excess of the
Default Rate under the Note; and
(l) Generally do anything which Trustor could legally do if Trustor
were in possession of the Property.
All reasonable expenses incurred by the receiver or the receiver's agent shall
constitute part of the Secured Obligations. Any revenues collected by the
receiver shall be applied first to the expenses of the receivership (including
reasonable attorneys' fees incurred by the receiver and by Beneficiary), to
expenses of the Property, and to preserve, protect, maintain and operate the
Property and any other collateral which is security for the Secured Obligations,
and the balance shall be applied toward the Secured Obligations or any
deficiency which may result from any foreclosure sale, and then in such other
manner as the court may direct. Unless sooner terminated with the express
consent of the Beneficiary, any such receivership will continue until all
amounts remaining due under the Note have been discharged in full, or until
title to the Property has passed after foreclosure sale and all applicable
periods of redemption have expired, and in either case, the court has discharged
the receiver. Trustor covenants to promptly reimburse and pay to Beneficiary or
such receiver, at the place where the Note is payable, or at such other place as
may be designated in writing, the amount of all reasonable expenses (including
the cost of any insurance, taxes, or other charges) incurred by Beneficiary or
22
such receiver in connection with its custody, preservation, use or operation of
the Property, together with interest thereon from the date incurred by
Beneficiary or such receiver at the Default Rate, as set forth in the Note, and
all such expenses, costs, taxes, interest, and other charges shall be part of
the Secured Obligations. It is agreed, however, that the risk of accidental loss
or damage to the Property is undertaken by Trustor and, except for Beneficiary's
or such receiver's willful misconduct or gross negligence, Beneficiary or such
receiver shall have no liability whatsoever for decline in value of the
Property, for failure to obtain or maintain insurance, or for failure to
determine whether any insurance ever in force is adequate as to amount or as to
the risks insured, or to complete development.
7.13 Further Assurances. Upon issuance of a deed or deeds pursuant to
foreclosure of this Deed of Trust, all right, title, and interest of the Trustor
in and to the Leases shall, by virtue of this instrument, thereupon vest in and
become the absolute property of the grantee or grantees in such deed or deeds
without any further act or assignment by the Trustor. Trustor hereby agrees to
execute all instruments of assignment or further assurance in favor of such
grantee or grantees in such deed or deeds, as may be reasonably necessary or
desirable for such purpose. But nothing contained herein shall prevent
Beneficiary from terminating any subordinated Lease or Contract not approved by
the Beneficiary through such foreclosure.
ARTICLE 8
ASSIGNMENT OF RENTS AND REVENUES
8.1 Assignment of Rents and Revenues. To further secure the Secured
Obligations, Trustor does hereby sell, assign and transfer unto the Beneficiary
all rents, issues, profits, revenue, and income now due and which may hereafter
become due under or by virtue of any leases, tenancies or agreements for
occupancy "Leases" (collectively "Rents and Revenues"), whether written or
verbal, or any letting of, or of any agreement for the use or occupancy of the
Property or any part thereof, and all proceeds from, evidence of, and benefits
and advantages to be derived therefrom, now or hereafter existing, whether or
not with the Beneficiary's approval. The Trustor does hereby appoint irrevocably
the Beneficiary its true and lawful attorney in its name and stead (with or
without taking possession of the Property) to rent, lease or let any
improvements located on the Property, to perform any obligations under Leases
upon such terms as said Beneficiary shall, in its reasonable discretion,
determine, and to collect all of said Rents and Revenues arising from or
accruing at any time hereafter, and all now due or that may hereafter become due
under each and every of the Leases or other agreements, written or verbal, or
which may hereafter exist on the Property, on the condition that Beneficiary
hereby grants to Trustor a license to collect and retain such Rents and Revenues
prior to the occurrence of any Event of Default under the Loan Agreement.
Trustor expressly covenants to apply the Rents and Revenue received, after
application for operating expenses permitted hereunder, to payment of the
Secured Obligations as and when the same become due and in compliance with the
23
Loan Documents. Such license shall be revocable by Beneficiary without notice to
Trustor at any time upon or after an Event of Default under the Loan Documents,
and immediately upon any such revocation, Beneficiary shall be entitled to
receive, and Trustor shall deliver to Beneficiary, any and all Rents and
Revenues theretofore collected by Trustor which remain in the possession or
control of Trustor and all Leases and other such agreements. It is the intention
of the Trustor to create and grant, and it is the intention of Beneficiary to
create and receive, a present and absolute assignment of all of the Leases,
similar agreements, Rents and Revenue now due or which may hereafter become due,
but it is agreed that the Beneficiary's right to collect the Rents and Revenues
is conditioned upon the existence of an Event of Default under the Loan
Documents. Failure of Beneficiary at any time or from time to time to enforce
its rights under this ARTICLE 8 shall not in any manner prevent its subsequent
enforcement, and Beneficiary is not obligated to collect anything hereunder, but
is accountable only for sums collected. Nothing contained herein shall be
construed as constituting the Beneficiary a mortgagee in possession in the
absence of the taking of actual possession of the Property by the Beneficiary
pursuant to Section 8.6 (Beneficiary's Right of Possession In Case of Default)
hereof. In the exercise of the powers herein granted to the Beneficiary, no
liability shall be asserted or enforced against the Beneficiary, all such
liability being expressly waived and released by Trustor.
8.2 Covenants Regarding Leases. Trustor agrees:
(a) Not to execute any Leases affecting the Property or any part
thereof except on residential lease forms reasonably approved by the Beneficiary
and upon rental terms prevailing in the market, without the prior written
consent of Beneficiary, which consent shall not be unreasonably withheld,
conditioned or delayed;
(b) Not to execute any other assignments of said Leases or any
interest therein or any of the Rents and Revenues thereunder;
(c) That notwithstanding any variation of the terms of the Deed of
Trust or any extension of time for payment thereunder or any release of part or
parts of the Property, the Leases, Rents and Revenues hereby assigned, insofar
as they relate to the unreleased Property, shall continue as additional security
in accordance with the terms hereof;
(d) To hold and account for all security deposits in the manner
provided for under any state or local laws or ordinances applicable to the
Property or under the Loan Documents; and
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(e) To perform all of the Trustor's covenants and agreements under
the Leases and not to suffer or permit to occur any release of liability of the
lessees except in the exercise of its business judgment as a prudent landlord.
8.3 Representations Regarding Leases. Trustor represents and warrants
(a) that, the Leases, if any, are in full force and effect; (b) that the Leases
and the Rents and Revenues thereunder have not been heretofore sold, assigned,
transferred, or set over by Trustor or by any person or persons whatsoever; (c)
that no material default exists on the part of the lessees thereunder, or the
Trustor as lessor; (d) that the payment of none of the rents have been or,
except to the extent otherwise prudent under customary commercial standards
exercised in the ordinary course of business, will be waived, released, reduced,
discounted or otherwise discharged or compromised by the Trustor directly or
indirectly by assuming any lessee's obligations with respect to other premises;
(e) Trustor has good right to sell, assign, transfer, and set over the same and
to grant to and confer upon Beneficiary the rights, interests, powers, and
authorities herein granted and conferred.
8.4 Further Assignments. Trustor shall give Beneficiary at any time
upon demand any further or additional forms of assignment of transfer of such
Rents and Revenues, leases and security as may be reasonably requested by
Beneficiary, and shall deliver to Beneficiary executed copies of all such leases
and security.
8.5 Authority of Beneficiary. Any tenants or occupants of any part of
the Property are hereby authorized to recognize the claims of Beneficiary
hereunder without investigating the reason for any action taken by Beneficiary,
or the validity or the amount of indebtedness owing to Beneficiary, or the
existence of a Default or Event of Default under any Loan Document, or the
application to be made by Beneficiary of any amounts to be paid to Beneficiary.
The sole signature of Beneficiary or a receiver shall be sufficient for the
exercise of any rights under this ARTICLE 8 and the sole receipt of Beneficiary
or a receiver for any sums received shall be a full discharge and release
therefor to any such tenant or occupant of the Property; and Trustor hereby
releases each such tenant and occupant or purchaser which makes payments to
Beneficiary under this ARTICLE 8 from any liability under the applicable Lease
or occupancy agreement. Checks for all or any part of the rentals collected
under this ARTICLE 8 shall be drawn to the exclusive order of Beneficiary or
such receiver.
8.6 Indemnification of Beneficiary. Nothing herein contained shall be
deemed to obligate Beneficiary to perform or discharge any obligation, duty, or
liability of lessor under any Lease of the Property, and Trustor shall and does
hereby indemnify and hold Beneficiary harmless from any and all liability, loss,
or damage which Beneficiary may or might incur under any Lease of the Property
or by reason of this assignment; and any and all such liability, loss, or damage
incurred by Beneficiary, together with the costs and expenses, including
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reasonable attorneys' fees, incurred by Beneficiary in defense of any claims or
demands therefor (whether successful or not), shall be additional Secured
Obligations, and Trustor shall reimburse Beneficiary therefor on demand.
8.7 Beneficiary's Right of Possession in Case of Event of Default. In
any case in which under the provision of this Deed of Trust, the Beneficiary has
a right to institute foreclosure proceedings, whether before or after the whole
principal sum secured hereby is declared to be immediately due, or whether
before or after the institution of legal proceedings to foreclose the lien
hereof or before or after sale thereunder, promptly upon demand of Beneficiary,
Trustor shall surrender to Beneficiary and Beneficiary shall be entitled to take
actual possession of the Property or any part thereof personally, or by its
agents or attorneys, as for condition broken, and Beneficiary in its discretion
may, with or without force and with or without process of law, enter upon and
take and maintain possession of all or any part of the Property, together with
all documents, books, records, papers and accounts of the Trustor or then owners
of the Property relating thereto, and may exclude the Trustor, its agents or
servants, wholly therefrom and may, as attorney-in-fact or agent of the Trustor,
or in its own name as Beneficiary and under the powers herein granted, hold,
operate, manage and control the Property and conduct the business, if any,
thereof, either personally or by its agents, and with full power to use such
measures, legal or equitable, as in its discretion or in the discretion of its
successors or assigns may be deemed proper or necessary to enforce the payment
or security of the rents, issues, revenues and profits of the Property.
8.8 Severability and Survival. The provisions of this ARTICLE 8 shall
survive the foreclosure of the lien of this Deed of Trust and the exercise of
the power of sale granted under this Deed of Trust until the expiration of all
periods of redemption following any such foreclosure or sale and thereafter with
respect to all Rents and Revenues arising prior to or attributable to the period
prior to the expiration of all such redemption periods.
ARTICLE 9
MISCELLANEOUS PROVISIONS
9.1 Time of the Essence. Time is of the essence with respect to all
provisions of this Deed of Trust.
9.2 Rights and Remedies Cumulative. Trustee and Beneficiary, and each
of them, shall be entitled to enforce payment and performance of any and all of
the Secured Obligations and to exercise all rights and powers under the Loan
Documents and under the law now or hereafter in effect, notwithstanding some or
all of the Secured Obligations may now or hereafter be otherwise secured or
guaranteed. Neither the acceptance of this Deed of Trust nor its enforcement,
whether by court action or pursuant to the power of sale or other rights herein
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contained, shall prejudice or in any manner affect Trustee's or Beneficiary's
right to realize upon or enforce any other security or guaranty now or hereafter
held by Trustee or Beneficiary, it being agreed that Trustee and Beneficiary,
and each of them shall be entitled to enforce this Deed of Trust and any other
security or any guaranty now or hereafter held by Beneficiary or Trustee in such
order and manner as they or either of them may in their absolute discretion
determine. No remedy herein conferred upon or reserved to Trustee or Beneficiary
is intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing under the law. Every power
or remedy given by any of the Loan Documents or by law to Trustee or Beneficiary
or to which either of them may be otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Trustee or Beneficiary and, to the extent permitted by law, either
of them may pursue inconsistent remedies
9.3 No Implied Waivers. Beneficiary shall not be deemed to have waived
any provision of this Deed of Trust unless such waiver is in writing and is
signed by Beneficiary. Without limiting the generality of the preceding
sentence, neither Beneficiary's acceptance of any payment with knowledge of a
default by Trustor, nor any failure by Beneficiary to exercise any remedy
following a default by Trustor shall be deemed a waiver of such default, and no
waiver by Beneficiary of any particular default on the part of Trustor shall be
deemed a waiver of any other default or of any similar default in the future.
9.4 Trustor Waiver of Rights. Trustor waives, to the extent permitted
by law, (a) the benefit of all laws now existing or that may hereafter be
enacted providing for any appraisement before sale of any portion of the
Property, and (b) all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the Secured Obligations
and marshaling in the event of foreclosure of the liens hereby created, and (c)
all rights and remedies that Trustor may have or be able to assert by reason of
the laws of the State of Arizona pertaining to the rights and remedies of
sureties including, without limitation, A.R.S. Sections 12-1641 through 12-1646,
and Arizona Rules of Civil Procedure 17(f).
9.5 No Third Party Rights. No person shall be a third party beneficiary
of any provision of this Deed of Trust. All provisions of this Deed of Trust
favoring Beneficiary are intended solely for the benefit of Beneficiary, and no
third party shall be entitled to assume or expect that Beneficiary will or will
not waive or consent to modification of any such provision in Beneficiary's sole
discretion.
9.6 Preservation of Liability and Priority. Without affecting the
liability of Trustor or of any other person (except a person expressly released
in writing) for payment and performance of all of the Secured Obligations, and
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without affecting the rights of Beneficiary with respect to any security not
expressly released in writing, and without impairing in any way the priority of
this Deed of Trust over the interests of any person acquired or first evidenced
by recording subsequent to the recording hereof, Beneficiary may, either before
or after the maturity of the Note, and without notice or consent: (a) release
any person liable for payment or performance of all or any part of the Secured
Obligations; (b) make any agreement altering the terms of payment or performance
of all or any of the Secured Obligations; (c) exercise or refrain from
exercising, or waive, any right or remedy which Beneficiary may have under any
of the Loan Documents; (d) accept additional security of any kind for any of the
Secured Obligations; or (e) release or otherwise deal with any real or personal
property securing the Secured Obligations. Any person acquiring or recording
evidence of any interest of any nature in the Property or the Collateral shall
be deemed, by acquiring such interest or recording any evidence thereof, to have
agreed and consented to any or all such actions by Beneficiary.
9.7 Subrogation of Beneficiary. Beneficiary shall be subrogated to the
lien of any previous encumbrance discharged with funds advanced by Beneficiary
under the Loan Documents, regardless of whether such previous encumbrance has
been released of record.
9.8 Notices. Any notice required or permitted to be given by Trustor or
Beneficiary under this Deed of Trust shall be in writing and will be deemed
given (a) upon personal delivery or upon confirmed transmission by telecopier or
similar facsimile transmission device, (b) on the first business day after
receipted delivery to a courier service which guarantees next-business-day
delivery, or (c) on the third business day after mailing, by registered or
certified United States mail, postage prepaid, in any case to the appropriate
party at its address set forth below:
If to Trustor:
Asset Investors Operating Partnership, L.P.
c/o Asset Investors Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Brandywine Real Estate Management Services Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to Beneficiary:
U.S. Bank National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇, Vice President
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
Tower I, Suite 1000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Any person may change such person's address for notices or copies of notices by
giving notice to the other party in accordance with this section.
9.9 Further Assurances. Upon issuance of a deed or deeds pursuant to
foreclosure of this Deed of Trust, all right, title, and interest of the Trustor
in and to the Leases shall, by virtue of this instrument, thereupon vest in and
become the absolute property of the grantee or grantees in such deed or deeds
without any further act or assignment by the Trustor. Trustor hereby agrees to
execute all instruments of assignment or further assurance in favor of such
grantee or grantees in such deed or deeds, as may be necessary or desirable for
such purpose.
9.10 Defeasance. Upon payment and performance in full of all the
Secured Obligations and all costs of releasing this Deed of Trust, Beneficiary
will execute and deliver to Trustor such documents as may be required to release
this Deed of Trust of record.
9.11 Illegality. If any provision of this Deed of Trust is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Deed of Trust, the legality, validity, and enforceability of
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the remaining provisions of this Deed of Trust shall not be affected thereby,
and in lieu of each such illegal, invalid or unenforceable provision there shall
be added automatically as a part of this Deed of Trust a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable. If the rights and liens created by this
Deed of Trust shall be invalid or unenforceable as to any part of the Secured
Obligations, then the unsecured portion of the Secured Obligations shall be
completely paid prior to the payment of the remaining and secured portion of the
Secured Obligations, and all payments made on the Secured Obligations shall be
considered to have been paid on and applied first to the complete payment of the
unsecured portion of the Secured Obligations.
9.12 Obligations Binding Upon Trustor's Successors. This Deed of Trust
is binding upon Trustor and Trustor's successors and assigns, including all
grantees and remote grantees of any interest of Trustor in the Property, and
shall inure to the benefit of Beneficiary, and its successors and assigns, and
the provisions hereof shall likewise be covenants running with the land. The
duties, covenants, conditions, obligations, and warranties of Trustor in this
Deed of Trust shall be joint and several obligations of Trustor and Trustor's
successors and assigns.
9.13 Further Assurances. Upon issuance of a deed or deeds pursuant to
foreclosure of this Deed of Trust, all right, title, and interest of the Trustor
in and to the Leases shall, by virtue of this instrument, thereupon vest in and
become the absolute property of the grantee or grantees in such deed or deeds
without any further act or assignment by the Trustor. Trustor hereby agrees to
execute all instruments of assignment or further assurance in favor of such
grantee or grantees in such deed or deeds, as may be necessary or desirable for
such purpose.
9.14 Governing Law. THIS AGREEMENT AND THE LOAN DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF COLORADO (WITHOUT GIVING EFFECT TO COLORADO'S PRINCIPLES OF
CONFLICTS OF LAW), EXCEPT TO THE EXTENT (A) OF PROCEDURAL AND SUBSTANTIVE
MATTERS RELATING ONLY TO THE CREATION, PERFECTION, FORECLOSURE AND ENFORCEMENT
OF RIGHTS AND REMEDIES AGAINST SPECIFIC COLLATERAL, WHICH MATTERS SHALL BE
GOVERNED BY THE LAWS OF THE STATE IN WHICH THE COLLATERAL IS LOCATED (THE
"COLLATERAL STATE"), AND (B) THAT THE LAWS OF THE UNITED STATES OF AMERICA AND
ANY RULES REGULATIONS, OR ORDERS ISSUED OR PROMULGATED THEREUNDER, APPLICABLE TO
THE AFFAIRS AND TRANSACTIONS ENTERED INTO BY THE BENEFICIARY, OTHERWISE PREEMPT
COLLATERAL STATE LAW OR COLORADO LAW; IN WHICH EVENT SUCH FEDERAL LAW SHALL
30
CONTROL. TRUSTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY COLORADO OR FEDERAL COURT SITTING IN DENVER, COLORADO (OR ANY STATE IN WHICH
THE PROPERTY IS LOCATED) OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS.
9.15 Survival. This Deed of Trust shall survive foreclosure of the
liens created hereby, to the extent necessary to fulfill its purposes.
9.16 Captions. The captions and headings of various paragraphs of this
Deed of Trust are for convenience only and are not to be construed as defining
or limiting, in any way, the scope or intent of the provisions hereof.
Signed and delivered as of the date first mentioned above.
TRUSTOR:
AIOP LOST DUTCHMAN NOTES, L.L.C., a
Delaware limited liability company
By: ASSET INVESTORS OPERATING
PARTNERSHIP, L.P., a Delaware
limited partnership, Sole Member
and Manager
By: ASSET INVESTORS CORPORATION,
a Delaware corporation,
General Partner
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer
31
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 7 day of
April, 2000, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as Chief Financial Officer of Asset Investors
Corporation, a Delaware corporation, as general partner of Asset Investors
Operating Partnership, L.P., a Delaware limited partnership, as Sole Member and
Manager of AIOP Lost Dutchman Notes, L.L.C., a Delaware limited liability
company.
Witness my hand and official seal.
My commission expires: 12/7/2000
/s/▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Notary Public
( S E A L )
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