Exhibit 10.178
Recording Requested by
and when recorded return to:
▇▇▇▇▇ FARGO BANK, N.A.
Commercial Mortgage ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ # ▇▇▇▇▇-▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: CMO Loan Admin.
Loan No. : 31-0900141A
LEASEHOLD DEED OF TRUST
AND
ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND
SECURITY AGREEMENT
(AND FIXTURE FILING)
The parties to this LEASEHOLD DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND
LEASES AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust"), dated as
of November____, 2002 are PLAZA SANTA FE 11 LLC, a New Mexico limited liability
company ("Trustor"), with a mailing address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, LAWYERS TITLE INSURANCE CORPORATION ("Trustee"),
with a mailing address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ("Beneficiary"), with a mailing
address at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
THIS DOCUMENT IS INTENDED TO BE A "LINE OF CREDIT MORTGAGE" AS
PROVIDED IN ▇▇▇▇ ▇▇▇▇, Section 48-7-4(1991).
RECITALS
A. PLAZA SANTA ▇▇ ▇▇ LLC, a New Mexico limited liability company
("Borrower") proposes to borrow from Beneficiary, and Beneficiary
proposes to lend to Borrower the principal sum OF EIGHTEEN MILLION AND
NO/100THS DOLLARS ($18,000,000.00) ("Loan"). The Loan is evidenced by a
promissory note ("Note") executed by Borrower, dated the date of this
Deed of Trust, payable to the order of Beneficiary in the principal
amount of the Loan. The maturity date of the Loan is December 1, 2012.
B. The loan documents include this Deed of Trust, the Note and the other
documents described in the Note as Loan Documents ("Loan Documents").
ARTICLE 1. DEED OF TRUST
1.1 GRANT. For the purposes of and upon the terms and conditions of this
Deed of Trust, Trustor irrevocably grants, conveys and assigns to
Trustee, in trust for the benefit of Beneficiary, with power of sale and
right of
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entry and possession, all estate, right, title and interest which
Trustor now has or may hereafter acquire in, to, under or derived from
any or all of the following:
a. That certain Unsubordinated Ground Lease, dated October 31, 1995
("Original Ground Lease"), by and between Roadrunner Trailer
Lodge Partnership, a New Mexico general partnership ("Original
Landlord"), predecessor in interest to Truzaf Limited
Partnership, a New Mexico limited partnership, as landlord
("Landlord") and Mid-West Acquisitions, Inc., an Illinois
corporation, as tenant ("Original Tenant"), as assigned pursuant
to: (i) that certain Assignment and Assumption Agreement, dated
effective as of October 31, 1995, between Original Tenant, as
assignor, and Chamisa Development Corporation, Ltd., an Illinois
corporation, as assignee ("Chamisa"), such assignment being
consented to pursuant to that certain Consent to Assignment
dated October 31, 1995, among Original Landlord, Original Tenant
and Chamisa; (ii) that certain Assignment and Assumption
Agreement, dated July 1, 1999, between Chamisa, as assignor, and
Statewide Investments LLC, as assignee ("Statewide"), such
assignment being consented to pursuant to that certain Consent
to Assignment dated July 1, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and
Statewide; and (iii) that certain Assignment and Assumption
Agreement, dated October 5, 1999, between Statewide, as
assignor, and Trustor, as assignee, such assignment being
consented to pursuant to that certain Consent to Assignment
dated October 5, 1999, among Landlord, Statewide and Trustor,
and evidenced further by that certain Memorandum of Assignment
of Lease dated October 5, 1999 and recorded on January 4, 2000
as Document No. 1723423 in the records of Santa Fe County, New
Mexico (the foregoing instruments described in items (i) through
(iii) above are collectively referred to herein as the
"Assignments"), and as amended by: (i) that certain First
Amendment to Unsubordinated Ground Lease, dated February 28,
1997, between Original Landlord and Chamisa ("First Amendment");
(ii) that certain Second Amendment to Unsubordinated Ground
Lease, dated June 30, 1998, between Original Landlord and
Chamisa ("Second Amendment"); (iii) that certain Third Amendment
to Unsubordinated Ground Lease, dated July 31, 2000, between
Landlord and Trustor ("Third Amendment"); (iv) that certain
Fourth Amendment to Unsubordinated Ground Lease dated February
28, 2001, between Landlord and Trustor ("Fourth Amendment"); and
(v) those certain letter agreements, dated October 31, 1995,
October 28, 1997, January 5, 1998, February 6, 1998, March 9,
1998, March 27, 1998 and April 29, 1998, respectively
(collectively, "Letter Agreements") (the Original Ground Lease,
as assigned pursuant to the Assignments and as amended pursuant
to the First Amendment, the Second Amendment, the Third
Amendment, the Fourth Amendment, the Letter Agreements and any
other amendments, modifications, extensions and assignments
heretofore, now, or hereafter entered into are hereinafter
collectively referred to as the "Ground Lease"), with respect to
property located on those certain lots, pieces, tracts and
parcels of land located in the County of Santa Fe, State of New
Mexico, and more particularly described on Exhibit A attached
hereto ("Land");
b. All appurtenances, easements, rights of way, water and water
rights, pumps, pipes, flumes and ditches and ditch rights, water
stock, ditch and/or reservoir stock or interests, royalties,
development rights and credits, air rights, minerals, oil
rights, and gas rights, now or later used or useful in
connection with, appurtenant to or related to the Land;
c. All buildings, structures, facilities, other improvements and
fixtures now or hereafter located on the Land;
d. All apparatus, equipment, machinery and appliances and all
accessions thereto and renewals and replacements thereof and
substitutions therefor used in the operation or occupancy of the
Land, it being intended by the parties that all such items shall
be conclusively considered to be a part of the Land, whether or
not attached or affixed to the Land;
e. All land lying in the right-of-way of any street, road, avenue,
alley or right-of-way opened, proposed or vacated, and all
sidewalks, strips and gores of land adjacent to or used in
connection with the Land;
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f. All additions and accretions to the property described above;
g. All licenses, authorizations, certificates, variances, consents,
approvals and other permits now or hereafter pertaining to the
Land and all estate, right, title and interest of Trustor in,
to, under or derived from all tradenames or business names
relating to the Land or the present or future development,
construction, operation or use of the Land; and
h. All proceeds of any of the foregoing.
All of the rights and property described above are hereinafter
collectively defined as the "Property". The listing of specific rights
or property shall not be interpreted as a limitation of general terms.
Trustor agrees that the Property shall be subject to the terms of the
New Mexico Deed of Trust Act, ▇▇▇▇ ▇▇▇▇, Sections 48-10-1 ▇▇ ▇▇-▇▇-▇▇
(1987).
ARTICLE 2. OBLIGATIONS SECURED
2.1 OBLIGATIONS SECURED. Trustor makes the foregoing grant and assignment
for the purpose of securing the following obligations ("Secured
Obligations"):
a. Full and punctual payment to Beneficiary of all sums at any time
owing under the Note;
b. Payment and performance of all covenants and obligations of
Trustor under this Deed of Trust including, without limitation,
indemnification obligations and advances made to protect the
Property;
c. Payment and performance of all additional covenants and
obligations of Borrower and Trustor under the Loan Documents;
d. Payment and performance of all covenants and obligations, if
any, which any rider attached as an exhibitor this Deed of Trust
recites are secured hereby;
e. Payment and performance of all future advances and other
obligations that the then record owner of all or part of the
Property may agree to pay and/or perform (whether as principal,
surety or guarantor) for the benefit of Beneficiary, when the
obligation is evidenced by a writing which recites that it is
secured by this Deed of Trust;
f. All interest and charges on all obligations secured hereby
including, without limitation, prepayment charges, late charges
and loan fees;
g. All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including,
without limitation: (i) modifications of the required principal
payment dates or interest payment dates or both, as the case may
be, deferring or accelerating payment dates wholly or partly;
and (ii) modifications, extensions or renewals at a different
rate of interest whether or not any such modification, extension
or renewal is evidenced by a new or additional promissory note
or notes; and
h. Payment and performance of any other obligations which are
defined as "Secured Obligations" in the Note.
The maximum amount secured by this Deed of Trust at any one time shall
not exceed three times the original principal amount of the Note.
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2.2 OBLIGATIONS. The term "obligations" is used herein in its broadest and
most comprehensive sense and shall be deemed to include, without
limitation, all interest and charges, prepayment charges, late charges
and loan fees at any time accruing or assessed on any of the Secured
Obligations.
2.3 INCORPORATION. All terms and conditions of the documents, which evidence
any of the Secured Obligations are incorporated herein by this
reference. All persons who may have or acquire an interest in the
Property shall be deemed to have notice of the terms of the Secured
Obligations and to have notice that the rate of interest on one or more
Secured Obligation may vary from time to time.
ARTICLE 3. ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
3.1 ASSIGNMENT. Trustor irrevocably assigns to Beneficiary all of Trustor's
right, title and interest in, to and under: (a) all present and future
leases and subleases of the Property or any portion thereof, all
licenses and agreements relating to the management, leasing or operation
of the Property or any portion thereof, and all other agreements of any
kind relating to the use or occupancy of the Property or any portion
thereof, whether such leases, subleases, licenses and agreements are now
existing or entered into after the date hereof, (collectively,
"Leases"); and (b) the rents, issues, deposits and profits of the
Property, including, without limitation, all amounts payable and all
rights and benefits accruing to Trustor under the Leases ("Payments").
The term "Leases" shall also include all guarantees of and security for
the tenants' performance thereunder, and all amendments, extensions,
renewals or modifications thereto which are permitted hereunder. This is
a present and absolute assignment, not an assignment for security
purposes only, and Beneficiary's right to the Leases and Payments is not
contingent upon, and may be exercised without possession of, the
Property.
3.2 GRANT OF LICENSE. Beneficiary confers upon Trustor a revocable license
("License") to collect and retain the Payments as they become due and
payable, until the occurrence of a Default (as hereinafter defined).
Upon a Default, the License shall be automatically revoked and
Beneficiary may collect and apply the Payments pursuant to the terms
hereof without notice and without taking possession of the Property. All
Payments thereafter collected by Trustor shall be held by Trustor as
trustee under a constructive trust for the benefit of Beneficiary.
Trustor hereby irrevocably authorizes and directs the tenants under the
Leases to rely upon and comply with any notice or demand by Beneficiary
for the payment to Beneficiary of any rental or other sums which may at
any time become due under the Leases, or for the performance of any of
the tenants' undertakings under the Leases, and the tenants shall have
no right or duty to inquire as to whether any Default has actually
occurred or is then existing. Trustor hereby relieves the tenants from
any liability to Trustor by reason of relying upon and complying with
any such notice or demand by Beneficiary. Beneficiary may apply, in its
sole discretion, any Payments so collected by Beneficiary against any
Secured Obligation or any other obligation of Borrower, Trustor or any
other person or entity, under any document or instrument related to or
executed in connection with the Loan Documents, whether existing on the
date hereof or hereafter arising. Collection of any Payments by
Beneficiary shall not cure or waive any Default or notice of Default or
invalidate any acts done pursuant to such notice. If and when no Default
exists, Beneficiary shall re-confer the License upon Trustor until the
occurrence of another Default.
3.3 EFFECT OF ASSIGNMENT. The foregoing irrevocable assignment shall not
cause Beneficiary to be: (a) mortgagee in possession; (b) responsible or
liable for the control, care, management or repair of the Property or
for performing any of the terms, agreements, undertakings, obligations,
representations, warranties, covenants and conditions of the Leases; (c)
responsible or liable for any waste committed on the Property by the
tenants under any of the Leases or by any other parties; for any
dangerous or defective condition of the Property; or for any negligence
in the management, upkeep, repair or control of the Property resulting
in loss or injury or death to any tenant, licensee, employee, invitee or
other person; or (d) responsible for or impose upon Beneficiary any duty
to produce rents or profits. Beneficiary shall not directly or
indirectly be liable to Trustor or any other person as a consequence of;
(e) the exercise or failure to exercise any of the rights, remedies or
powers granted to Beneficiary hereunder; or (f) the failure or refusal
of Beneficiary to perform or discharge any obligation, duty or liability
of Trustor arising under the Leases.
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3.4 COVENANTS-LONG TERM LEASES.
a. ALL LEASES. Trustor shall, at Trustor's sole cost and expense:
(i) perform all obligations of the landlord under the Leases
and use reasonable efforts to enforce performance by the
tenants of all obligations of the tenants under the
Leases;
(ii) use reasonable efforts to keep the Property leased at
all times to tenants which Trustor reasonably and in
good faith believes are creditworthy at rents not less
than the fair market rental value (including, but not
limited to, tree or discounted rents to the extent the
market so requires);
(iii) promptly upon Beneficiary's request, deliver to
Beneficiary a copy of each requested Lease and all
amendments thereto and waivers thereof; and
(iv) promptly upon Beneficiary's request, execute and record
any additional assignments of landlord's interest under
any Lease to Beneficiary and specific subordinations of
any Lease to this Deed of Trust, in form and substance
satisfactory to Beneficiary.
Unless consented to in writing by Beneficiary or otherwise
permitted under any other provision of the Loan Documents,
Trustor shall not:
(v) grant any tenant under any Lease any option, right of
first refusal or other right to purchase all or any
portion of the Property under any circumstances;
(vi) grant any tenant under any Lease any right to prepay
rent more than 1 month in advance;
(vii) except upon Beneficiary's request, execute any
assignment of landlord's interest in any Lease; or
(viii) collect rent or other sums due under any Lease in
advance, other than to collect rent 1 month in advance
of the time when it becomes due.
Any such attempted action in violation of the provisions of this
Section shall be null and void.
Trustor shall deposit with Beneficiary any sums received by
Trustor in consideration of any termination, modification or
amendment of any Lease or any release or discharge of any tenant
under any Lease from any obligation thereunder and any such sums
received by Trustor shall be held in trust by Trustor for such
purpose. Notwithstanding the foregoing, so long as no Default
exists, the portion of any such sum received by Trustor with
respect to any Lease which is less than $50,000 shall be payable
to Trustor. All such sums received by Beneficiary with respect
to any Lease shall be deemed "Impounds" (as defined in Section
6.12b) and shall be deposited by Beneficiary into a pledged
account in accordance with Section 6.l2b. If no Default exists.
Beneficiary shall release such Impounds to Trustor from time to
time as necessary to pay or reimburse Trustor for such tenant
improvements, brokerage commissions and other leasing costs as
may be required to re-tenant the affected space; provided,
however. Beneficiary shall have received and approved each of
the following for each tenant for which such costs were
incurred: (1) Trustor's written request for such release,
including the name of the tenant, the location and net rentable
area of the space and a description and cost breakdown of the
tenant improvements or other leasing costs covered by the
request; (2) Trustor's certification that any tenant
improvements have been completed lien-free and in a workmanlike
manner; (3) a fully executed Lease, or extension or renewal of
the current Lease; (4) an estoppel certificate executed by the
tenant including its acknowledgment that all tenant improvements
have been satisfactorily completed; and (5) such other
information with respect to such costs as Beneficiary may
require. Following the re-tenanting of all affected space
(including without limitation, the completion of all tenant
improvements). and provided no Default exists.
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Beneficiary shall release any remaining such Impounds relating
to the affected space to Trustor. Trustor shall construct all
tenant improvements in a workmanlike manner and in accordance
with all applicable laws, ordinances, rules and regulations.
b. MAJOR LEASES. Trustor shall, at Trustor's sole cost and expense,
give Beneficiary prompt written notice of any material default
by landlord or tenant under any Major Lease (as defined below).
Unless consented to in writing by Beneficiary or otherwise
permitted under any other provision of the Loan, Documents,
Trustor shall not:
(i) enter into any Major Lease which (aa) is not on fair
market terms (which terms may include tree or discounted
rent to the extent the market so requires); (bb) does
not contain a provision requiring the tenant to execute
and deliver to the landlord an estoppel certificate in
form and substance satisfactory to the landlord promptly
upon the landlord's request; (cc) allows the tenant to
assign or sublet the premises without the landlord's
consent if any such assignment or sublease relieves the
original tenant from any liability under the lease; or
(dd) is with a tenant that is not acceptable to
Beneficiary (such determination to be made in
Beneficiary's reasonable discretion based upon
Beneficiary's then current underwriting guidelines,
which shall include, among other things, the financial
strength of the proposed tenant);
(ii) reduce any rent or other sums due from the tenant under
any Major Lease;
(iii) terminate or materially modify or amend any Major Lease;
or
(iv) release or discharge the tenant or any guarantor under
any Major Lease from any material obligation thereunder.
Any such attempted action in violation of the provisions of this
Section shall be null and void.
"Major Lease". as used herein, shall mean any Lease, which is,
at any time: (l) a Lease of more than 15,000 square feet of the
total rentable area of the Property; or (2) a Lease which
generates a gross base monthly rent exceeding 7% of the total
gross base monthly rent generated by all Leases (excluding all
Leases under which the tenant is then in default), as reasonably
determined by Beneficiary. Trustor's obligations with respect to
Major Leases shall be governed by the provisions of Section 3.4a
as well as by the provisions of this Section.
c. FAILURE TO DENY REQUEST. Beneficiary's failure to deny any
written request by Trustor for Beneficiary's consent under the
provisions of Sections 3.4a or 3.4b within 10 Business Days
after Beneficiary's receipt of such request (and all documents
and information reasonably related thereto) shall be deemed to
constitute Beneficiary's consent to such request.
3.5 ESTOPPEL CERTIFICATES. Within 30 days after request by Beneficiary,
Trustor shall deliver to Beneficiary and to any party designated by
Beneficiary, estoppel certificates relating to the Leases executed by
Trustor and by each of the tenants, in form and substance acceptable to
Beneficiary, it being understood that some of the estoppel certificates
will be provided in a form required pursuant to the terms of the
respective Leases, but in any event, shall be in substance acceptable to
Beneficiary, provided, however, if any tenant shall fail or refuse to so
execute and deliver any such estoppel certificate upon request. Trustor
shall use reasonable efforts to cause such tenant to execute and deliver
such, estoppel certificate but such tenant's continued failure or
refusal to do so, despite Trustor's reasonable efforts, shall not
constitute a default by Trustor under this Section.
3.6 RIGHT OF SUBORDINATION. Beneficiary may at any time and from time to
time by specific written instrument intended for the purpose
unilaterally subordinate the lien of this Deed of Trust to any Lease,
without joinder or consent of, or notice to, Trustor, any tenant or any
other person. Notice is hereby given to each tenant
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under a Lease of such right to subordinate. No subordination referred to
in this Section shall constitute a subordination to any lien or other
encumbrance, whenever arising, or improve the right of any junior
lienholder. Nothing herein shall be construed as subordinating this Deed
of Trust to any Lease.
3.7 SUBORDINATION. NONDISTURBANCE AND ATTORNMENT AGREEMENTS. Upon Trustor's
written request, Beneficiary will enter into subordination,
nondisturbance and attornment agreements, in form and substance
reasonably acceptable to Beneficiary, with future tenants at the
Property. Trustee shall pay Beneficiary's reasonable costs and expenses
(including reasonable attorney's fees) in connection with the
preparation and negotiation of such agreements.
ARTICLE 4. SECURITY AGREEMENT AND FIXTURE FILING
4.1 SECURITY INTEREST. Trustor grants and assigns to Beneficiary a security
interest to secure payment and performance of all of the Secured
Obligations, in all of the following described personal property in
which Trustor now or at any time hereafter has any interest
("Collateral"):
All goods, building and other materials, supplies, work in
process, equipment, machinery, fixtures, furniture, furnishings,
signs and other personal property, wherever situated, which are
or are to be incorporated into, used in connection with or
appropriated for use on the Property; all rents, issues,
deposits and profits of the Property (to the extent, if any,
they are not subject to the Absolute Assignment of Rents and
Leases); all inventory, accounts, cash receipts, deposit
accounts, impounds, accounts receivable, contract rights,
general intangibles, software, chattel paper, instruments,
documents, promissory notes, drafts, letters of credit, letter
of credit rights, supporting obligations, insurance policies,
insurance and condemnation awards and proceeds, any other rights
to the payment of money, trade names, trademarks and service
marks arising from or related to the Property or any business
now or hereafter conducted thereon by Trustor; all permits,
consents, approvals, licenses, authorizations and other rights
granted by, given by or obtained from, any governmental entity
with respect to the Property; all deposits or other security now
or hereafter made with or given to utility companies by Trustor
with respect to the Property; all advance payments of insurance
premiums made by Trustor with respect to the Property; all
plans, drawings and specifications relating to the Property; all
loan funds held by Beneficiary, whether or not disbursed; all
funds deposited with Beneficiary pursuant to any Loan Document,
all reserves, deferred payments, deposits, accounts, refunds,
cost savings and payments of any kind related to the Property or
any portion thereof, including, without limitation, all
"Impounds" as defined herein; and all rights of Trustor under
the Ground Lease and as lessee under all personal property
leases with respect to the Property; together with all
replacements and proceeds of, and additions and accessions to,
any of the foregoing, and all books, records and files relating
to any of the foregoing.
As to all of the above-described personal property which is or which
hereafter becomes a "fixture" under applicable law, this Deed of Trust
constitutes a fixture filing under the New Mexico Uniform Commercial
Code, as amended or recodified from time to time ("UCC").
4.2 COVENANTS. Trustor agrees: (a) to execute and deliver such documents as
Beneficiary deems necessary to create, perfect and continue the security
interests contemplated hereby; (b) not to change its name, and, as
applicable, its chief executive offices, its principal residence or the
jurisdiction in which it is organized without giving Beneficiary at
least 30 days' prior written notice thereof; and (c) to cooperate with
Beneficiary in perfecting all security interests granted herein and in
obtaining such agreements from third parties as Beneficiary deems
necessary, proper or convenient in connection with the preservation,
perfection or enforcement of any of Beneficiary's rights hereunder.
4.3 RIGHTS OF BENEFICIARY. In addition to Beneficiary's rights as a "Secured
Party" under the UCC, Beneficiary may, but shall not be obligated to, at
any time without notice and at the expense of Trustor:
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(a) give notice to any person of Beneficiary's rights hereunder and
enforce such rights at law or in equity; (b) insure, protect, defend and
preserve the Collateral or any rights or interests of Beneficiary
therein; and (c) inspect the Collateral. Notwithstanding the above, in
no event shall Beneficiary be deemed to have accepted any property other
than cash in satisfaction of any obligation of Trustor to Beneficiary
unless Beneficiary shall make an express written election of said remedy
under the UCC or other applicable law.
4.4 RIGHTS OF BENEFICIARY UPON DEFAULT. Upon the occurrence of a Default,
then in addition to all of Beneficiary's rights as a "Secured Party"
under the UCC or otherwise at law:
a. DISPOSITION OF COLLATERAL. Beneficiary may: (i) upon written
notice, require Trustor to assemble any or all of the Collateral
that is not available at the Property and make it available to
Beneficiary at the Property; (ii) without prior notice, enter
upon the Property or other place where the Collateral may be
located and take possession of, collect, sell, lease, license,
and otherwise dispose of the Collateral, and store the same at
locations acceptable to Beneficiary at Trustor's expense; or
(iii) sell, assign and deliver the Collateral at any place or in
any lawful manner and bid and become purchaser at any such
sales; and
b. OTHER RIGHTS. Beneficiary may, for the account of Trustor and at
Trustor's expense: (i) operate, use, consume, sell, lease,
license or otherwise dispose of the Collateral as Beneficiary
deems appropriate for the purpose of performing any or all of
the Secured Obligations; (ii) enter into any agreement,
compromise or settlement including insurance claims, which
Beneficiary may deem desirable or proper with respect to the
Collateral; and (iii) endorse and deliver evidences of title
for, and receive, enforce and collect by legal action or
otherwise, all indebtedness and obligations now or hereafter
owing to Trustor in connection with or on account of the
Collateral.
Trustor acknowledges and agrees that a disposition of the Collateral in
accordance with Beneficiary's rights and remedies as heretofore provided
is a disposition thereof in a commercially reasonable manner and that 5
days' prior notice of such disposition is commercially reasonable
notice. Beneficiary shall have no obligation to process or prepare the
Collateral for sale or other disposition. In disposing of the
Collateral, Beneficiary may disclaim all warranties of title,
possession, quiet enjoyment and the like. Any proceeds of any sale or
other disposition of the Collateral may be applied by Beneficiary first
to the reasonable expenses incurred by Beneficiary in connection
therewith, including, without limitations, reasonable attorneys' fees
and disbursements, and then to the payment of the Secured Obligations,
in such order of application as Beneficiary may from time to time elect.
4.5 POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary, as
Trustor's attorney-in-fact (such agency being coupled with an interest),
and as such attorney-in-fact, Beneficiary may, without the obligation to
do so, in Beneficiary's name or in the name of Trustor, prepare,
execute, file and record financing statements, continuation statements,
applications for registration and like papers necessary to create,
perfect or preserve any of Beneficiary's security interests and rights
in or to the Collateral, and upon a Default, take any other action
required of Trustor; PROVIDED, HOWEVER, that Beneficiary as such
attorney-in-fact shall be accountable only for such funds as are
actually received by Beneficiary.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES. Trustor represents and warrants to
Beneficiary that, to Trustor's current actual knowledge after reasonable
investigation and inquiry, the following statements are true and correct
as of the Effective Date:
a. LEGAL STATUS. Trustor and Borrower are duly organized and
existing and in good standing under the laws of the state(s) in
which Trustor and Borrower are organized. Trustor and Borrower
are qualified or licensed to do business in all jurisdictions in
which such qualification or licensing is required.
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b. PERMITS. Trustor and Borrower possess all permits, franchises
and licenses and all rights to all trademarks, trade names,
patents and fictitious names, if any, necessary to enable
Trustor and Borrower to conduct the business(es) in which
Trustor and Borrower are now engaged in compliance with
applicable law.
c. AUTHORIZATION AND VALIDITY. The execution and delivery of the
Loan Documents have been duly authorized and the Loan Documents
constitute valid and binding obligations of Trustor, Borrower or
the party which executed the same, enforceable in accordance
with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights, or by the
application of rules of equity.
d. VIOLATIONS. The execution, delivery and performance by Trustor
and Borrower of each of the Loan Documents do not violate any
provision of any law or regulation, or result in any breach or
default under any contract, obligation, indenture or other
instrument to which Trustor or Borrower is a party or by which
Trustor or Borrower is bound.
e. LITIGATION. There are no pending or threatened actions, claims,
investigations, suits or proceedings before any governmental
authority, court or administrative agency which may adversely
affect the financial condition or operations of Trustor or
Borrower other than those previously disclosed in writing by
Trustor or Borrower to Beneficiary.
f. FINANCIAL STATEMENTS. The financial statements of Trustor and
Borrower, of each general partner (if Trustor or Borrower is a
partnership), of each member (if Trustor or Borrower is a
limited liability company) and of each guarantor, if any,
previously delivered by Trustor or Borrower to Beneficiary: (i)
are materially complete and correct; (ii) present fairly the
financial condition of such party; and (iii) have been prepared
in accordance with the same accounting standard used by Trustor
or Borrower to prepare the financial statements delivered to and
approved by Beneficiary in connection with the making of the
Loan, or other accounting standards approved by Beneficiary.
Since the date of such financial statements, there has been no
material adverse change in such financial condition, nor have
any assets or properties reflected on such financial statements
been sold, transferred, assigned, mortgaged, pledged or
encumbered except as previously disclosed in writing by Trustor
or Borrower to Beneficiary and approved in writing by
Beneficiary.
g. REPORTS. All reports, documents, instruments and information
delivered to Beneficiary in connection with the Loan: (i) are
correct and sufficiently complete to give Beneficiary accurate
knowledge of their subject matter; and (ii) do not contain any
misrepresentation of a material fact or omission of a material
fact which omission makes the provided information misleading.
h. INCOME TAXES. There are no pending assessments or adjustments of
Trustor's or Borrower's income tax payable with respect to any
year.
i. SUBORDINATION. There is no agreement or instrument to which
Borrower is a party or by which Borrower is bound that would
require the subordination in right of payment of any of
Borrower's obligations under the Note to an obligation owed to
another party.
j. TITLE. Trustor lawfully holds and possesses the entire
unencumbered leasehold estate in the Land created by the Ground
Lease, and has good and marketable title to all of the other
Property, without limitation on the right to encumber same. A
true, correct and complete copy of the Ground Lease has been
delivered to Beneficiary by (or on behalf of) Trustor. This Deed
of Trust is a first lien on the Property except: (i) liens for
real estate taxes and assessments not yet due and payable; (ii)
senior exceptions previously approved by Beneficiary and shown
in the title insurance policy insuring the lien of this Deed of
Trust; and (iii) other matters, if any, previously disclosed to
Beneficiary by Trustor in a
9
writing specifically referring to this representation and
warranty. The Ground Lease is in full force and effect and has
not been modified or amended in any manner whatsoever. There are
no defaults under the Ground Lease by either party thereto, and
no event has occurred, which but for the passage of time, or
notice, or both, would constitute a default under the Ground
Lease. All rents, additional rents and other sums due and
payable under the Ground Lease have been paid in full. Neither
Trustor nor Landlord has commenced any action or given or
received any notice for the purpose of terminating the Ground
Lease. Except for the Ground Lease, there are no agreements
between Trustor and Landlord in any way concerning the subject
matter of the Ground Lease or the occupancy or use of the
Property. The interest of Trustor under the Ground Lease has not
been assigned. Subject to the matters set forth above, Trustor
shall forever warrant, defend and preserve such title and the
validity and priority of the lien of this Deed of Trust to
Beneficiary against the claims of all persons whomsoever.
k. MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to any
such liens) affecting the Property which are or may be prior to
or equal to the lien of this Deed of Trust.
l. ENCROACHMENTS. Except as shown in the survey, if any, previously
delivered to Beneficiary, none of the buildings or other
improvements which were included for the purpose of determining
the appraised value of the Property lies outside of the
boundaries or building restriction lines of the Property and no
buildings or other improvements located on adjoining properties
encroach upon the Property.
m. LEASES. All existing Leases are in full force and effect and are
enforceable in accordance with their respective terms. No
material breach or default by any party, or event which would
constitute a material breach or default by any party after
notice or the passage of time, or both, exists under any
existing Lease. None of the landlord's interests under any of
the Leases, including, but not limited to, rents, additional
rents, charges, issues or profits, has been transferred or
assigned. No rent or other payment under any existing Lease has
been paid by any tenant for more than 1 month in advance.
n. COLLATERAL. Trustor has good title to the existing Collateral,
free and clear of all liens and encumbrances except those, if
any, previously disclosed to Beneficiary by Trustor in writing
specifically referring to this representation and warranty.
Trustor's chief executive office (or principal residence, if
applicable) is located at the address shown on page one of this
Deed of Trust. Trustor is an organization organized solely under
the laws of the State of NEW MEXICO. All organizational
documents of Trustor delivered to Beneficiary are complete and
accurate in every respect. Trustor's legal name is exactly as
shown on page one of this Deed of Trust.
o. CONDITION OF PROPERTY. Except as shown in the property condition
survey or other engineering reports, if any, previously
delivered to or obtained by Beneficiary, the Property is in good
condition and repair and is free from any damage that would
materially and adversely affect the value of the Property as
security for the Loan or the intended use of the Property.
p. HAZARDOUS MATERIALS. Except as shown in the environmental
assessment report(s), if any, previously delivered to or
obtained by Beneficiary, the Property is not and has not been a
site for the use, generation, manufacture, storage, treatment,
release, threatened release, discharge, disposal transportation
or presence of Hazardous Materials (as hereinafter defined)
except as otherwise previously disclosed in writing by Trustor
to Beneficiary.
q. HAZARDOUS MATERIALS LAWS. The Property complies with ail
Hazardous Materials Laws (as hereinafter defined).
r. HAZARDOUS MATERIALS CLAIMS. There are no pending or threatened
Hazardous Materials Claims (as hereinafter defined).
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s. WETLANDS. No part of the Property consists of or is classified
as wetlands, tidelands or swamp and overflow lands.
t. COMPLIANCE WITH LAWS. All federal, state and local laws, rules
and regulations applicable to the Property, including, without
limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990, as
amended from time to time (42 U. S. C. Section 12101 et seq.)
have been satisfied or complied with. Trustor is in possession
of all certificates of occupancy and all other licenses, permits
and other authorizations required by applicable law for the
existing use of the Property. All such certificates of occupancy
and other licenses, permits and authorizations are valid and in
full force and effect.
u. PROPERTY TAXES AND OTHER LIABILITIES. All taxes, governmental
assessments, insurance premiums, water, sewer and municipal
charges, and ground rents, if any, which previously became due
and owing in respect of the Property have been paid.
v. CONDEMNATION. There is no proceeding pending or threatened for
the total or partial condemnation of the Property.
w. HOMESTEAD. There is no homestead or other exemption available to
Trustor which would materially interfere with the right to sell
the Property at a trustee's sale or the right to foreclose this
Deed of Trust.
x. SOLVENCY. None of the transactions contemplated by the Loan will
be or have been made with an actual intent to hinder, delay or
defraud any present or future creditors of Trustor, and Trustor,
on the Effective Date, will have received fair and reasonably
equivalent value in good faith for the grant of the liens or
security interests effected by the Loan Documents. On the
Effective Date, Trustor will be solvent and will not be rendered
insolvent by the transactions contemplated by the Loan
Documents. Trustor is able to pay its debts as they become due.
y. SEPARATE TAX PARCEL(S). The Property is assessed for the real
estate tax purposes as one or more wholly independent tax
parcels, separate from any other real property, and no other
real property is assessed and taxed together with the Property
or any portion thereof.
5.2 REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING STATUS (LEVEL III
SPE). Trustor hereby represents, warrants and covenants to Beneficiary
that with respect to both Trustor and PSF II Manager, Inc., a New Mexico
corporation., the managing member of Trustor:
a. each such entity was organized solely for the purpose of (i)
owning the Property; (ii) acting as a general partner of a
partnership which owns the Property; or (iii) acting as a
managing member of a limited liability company which owns the
Property;
b. each such entity has not and will not engage in any business
unrelated to (i) the ownership of the Property; (ii) acting as
general partner of a partnership which owns the Property; or
(iii) acting as managing member of a limited liability company
which owns the Property;
c. each such entity has not and will not have any assets other than
the Property (and personal property incidental to the ownership
and operation of the Property) or its partnership or membership
interest in the partnership or limited liability company which
owns the Property;
d. each such entity has not and will not engage in, seek or consent
to any dissolution, winding up, liquidation, consolidation,
merger, asset sale, transfer of partnership or membership
interest, or amendment of its articles of incorporation,
articles of organization, certificate of formation, operating
agreement or partnership agreement, as applicable;
11
e. if any such entity is a partnership, all of its general partners
are corporations that satisfy the requirements set forth in this
Section 5.2;
f. if any such entity is a limited liability company, it has at
least one managing member that is a corporation that satisfies
the requirements set forth in this Section 5.2;
g. each such entity, without the unanimous consent of all of its
general partners, directors or members, as applicable, shall not
file or consent to the filing of any bankruptcy or insolvency
petition or otherwise institute insolvency proceedings with
respect to itself or any other entity in which it has a direct
or indirect legal or beneficial ownership interest;
h. each such entity has no indebtedness (and will have no
indebtedness) other than (i) the Loan (to the extent it is
liable under the terms of the Loan Documents); and (ii)
unsecured trade debt not to exceed $450,000.00 in the aggregate
with respect to Trustor or $10,000 in (the aggregate with
respect to each such other entity, which is not evidenced by a
note and is incurred in the ordinary course of its business in
connection with owning, operating and maintaining the Property
(or its interest in Trustor, as applicable) and is paid within
30 days from the date incurred;
i. each such entity has not and will not fail to correct any known
misunderstanding regarding the separate identity of such entity;
j. each such entity will maintain its accounts, books and records
separate from any other person or entity;
k. each such entity has maintained and will maintain its books,
records, resolutions and agreements as official records;
l. each such entity (i) has not and will not commingle its funds or
assets with those of any other entity; and (ii) has held and
will hold its assets in its own name;
m. each such entity has conducted and will conduct its business in
its own name;
n. each such entity will maintain its accounting records and other
entity documents separate from any other person or entity;
o. each such entity will prepare separate tax returns and financial
statements, or if part of a consolidated group, is shown as a
separate member of such group;
p. each such entity will pay its own liabilities and expenses out
of its own funds and assets;
q. each such entity will hold regular meetings, as appropriate, to
conduct its business and has observed and will observe all
corporate, partnership or limited liability company formalities
and record keeping as applicable;
r. each such entity has not and will not assume or guarantee or
become obligated for the debts of any other entity or hold out
its credit as being available to satisfy the obligations of any
other entity;
s. each such entity has not and will not acquire obligations or
securities of its partners, members or shareholders;
12
t. each such entity will allocate fairly and reasonably the costs
associated with common employees and any overhead for shared
office space and each such entity will use separate stationery,
invoices and checks;
u. each such entity has not and will not pledge its assets for the
benefit of any other person or entity;
v. each such entity has held and identified itself and will hold
itself out and identify itself as a separate and distinct entity
under its own name and not as a division or part of any other
person or entity;
w. each such entity will not make loans to any person or entity;
x. each such entity will not identify its partners, members or
shareholders, or any affiliates of any of the foregoing, as a
division or part of it;
y. each such entity has not entered into and will not enter into or
be a party to, any transaction with its partners, members,
shareholders, or any affiliates of any of the foregoing, except
in the ordinary course of its business pursuant to written
agreements and on terms which are intrinsically fair and are no
less favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party;
z. if any such entity is a corporation, the directors of such
entity shall consider the interests of the creditors of such
entity in connection with all corporate action;
aa. each such entity will pay the salaries of its own employees, if
any, and if employees are necessary for its business operations,
will maintain a sufficient number of employees in light of its
contemplated business operations;
bb. each such entity will maintain adequate capital in light of its
contemplated business operations;
cc. if any such entity is a partnership with more than one general
partner, its partnership agreement requires the remaining
partners to continue the partnership as long as one solvent
general partner exists; and
dd. if any such entity is a limited liability company, its operating
agreement, if any such entity is a partnership, its partnership
agreement, and if any such entity is a corporation, to the full
extent permitted by applicable law, its articles of
incorporation, contain the provisions set forth in this Section
5.2 and any such entity shall conduct its business and
operations in strict compliance with the terms contained
therein.
ARTICLE 6. RIGHTS AND DUTIES OF THE PARTIES
6.1 MAINTENANCE AND PRESERVATION OF THE PROPERTY. Trustor shall: (a) keep
the Property in good condition and repair; (b) complete or restore
promptly and in workmanlike manner the Property or any part thereof
which may be damaged or destroyed; (c) comply and cause the Property to
comply with (i) all laws, ordinances, regulations and standards, (ii)
all covenants, conditions, restrictions and equitable servitudes,
whether public or private, of every kind and character and (iii) all
requirements of insurance companies and any bureau or agency which
establishes standards of insurability, which laws, covenants or
requirements affect the Property and pertain to acts committed or
conditions existing thereon, including, without limitation, any work of
alteration, improvement or demolition as such laws, covenants or
requirements mandate; (d) operate and manage the Property at all times
in a professional manner and do all other acts which from the character
or use of the Property may be reasonably necessary to maintain and
preserve its value; (e) promptly after execution, deliver to Beneficiary
a copy of any management agreement
13
concerning the Property and all amendments thereto and waivers thereof;
and (f) execute and acknowledge all further documents, instruments and
other papers as Beneficiary or Trustee deems necessary or appropriate to
preserve, continue, perfect and enjoy the benefits of this Deed of Trust
and perform Trustor's obligations, including, without limitation,
statements of the amount secured hereby then owing and statements of no
offset. Trustor shall not: (g) remove or demolish all or any material
part of the Property; (h) alter either (i) the exterior of the Property
in a manner which materially and adversely affects the value of the
Property or (ii) the roof or other structural elements of the Property
in a manner which requires a building permit except for tenant
improvements required under the Leases; (i) initiate or acquiesce in any
change in any zoning or other land classification which affects the
Property; (j) materially alter the type of occupancy or use of all or
any part of the Property; or (k) commit or permit waste of the Property.
6.2 HAZARDOUS MATERIALS. Without limiting any other provision of this Deed
of Trust, Trustor agrees as follows:
a. PROHIBITED ACTIVITIES. Trustor shall not cause or permit the
Property to be used as a site for the use, generation,
manufacture, storage, treatment, release, discharge, disposal,
transportation or presence of any oil or other petroleum
products, flammable explosives, asbestos, urea formaldehyde
insulation, radioactive materials, hazardous wastes, toxic or
contaminated substances or similar materials, including, without
limitation, any substances which are "hazardous substances,"
"hazardous wastes," "hazardous materials" or "toxic substances"
under the Hazardous Materials Laws (defined below) and/or other
applicable environmental laws, ordinances or regulations
("Hazardous Materials"). Nothing contained herein shall be
deemed to prohibit the use of a portion of the Property for a
retail gasoline station to be operated in compliance with all
applicable laws.
The foregoing to the contrary notwithstanding, (i) Trustor may
store, maintain and use on the Property janitorial and
maintenance supplies, paint and other Hazardous Materials of a
type and in a quantity readily available for purchase by the
general public and normally stored, maintained and used by
owners and managers of properties of a type similar to the
Property; and (ii) tenants of the Property may store, maintain
and use on the Property (and, if any tenant is a retail
business, hold in inventory and sell in the ordinary course of
such tenant's business") Hazardous Materials of a type and
quantity readily available for purchase by the general public
and normally stored, maintained and used (and, if tenant is a
retail business, sold) by tenants in similar lines of business
on properties similar to the Property.
b. HAZARDOUS MATERIALS LAWS. Trustor shall comply and cause the
Property to comply with all federal, state and local laws,
ordinances and regulations relating to Hazardous Materials
("Hazardous Materials Laws"), including, without limitation: the
Clean Air Act, as amended, 42 U.S.C. Section 7401 ET SEQ.; the
Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 ET SEQ.; the Resource Conservation and Recovery Act
of 1976, as amended, 42 U.S.C. Section 6901 ET SEQ.; the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (including the Superfund Amendments and
Reauthorization Act of 1986, "CERCLA"), 42 U.S.C. Section 9601
ET SEQ.; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 2601 ET SEQ.; the Occupational Safety and Health Act, as
amended, 29 U.S.C. Section 651; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 ET
SEQ.; the Mine Safety and Health Act of 1977, as amended, 30
U.S.C. Section 801 ET SEQ.; the Safe Drinking Water Act, 42
U.S.C. Section 300f ET SEQ.; and all comparable state and local
laws, laws of other jurisdictions or orders and regulations.
c. NOTICES. Trustor shall immediately notify Beneficiary in writing
of: (i) the discovery of any Hazardous Materials on, under or
about the Property (other than Hazardous Materials permitted
under Section 6.2(a)); (ii) any knowledge by Trustor that the
Property does not comply with any Hazardous Materials Laws;
(iii) any claims or actions ("Hazardous Materials Claims")
pending or threatened against Trustor or the Property by any
governmental entity or agency or any other person or entity
relating to Hazardous Materials or pursuant to the Hazardous
Materials Laws; and (iv) the discovery of
14
any occurrence or condition on any real property adjoining or in
the vicinity of the Property that could cause the Property or
any part thereof to become contaminated with Hazardous
Materials.
d. REMEDIAL ACTION. In response to the presence of any Hazardous
Materials on, under or about the Property, Trustor shall
immediately take, at Trustor's sole expense, all remedial action
required by any Hazardous Materials Laws or any judgment,
consent decree, settlement or compromise in respect to any
Hazardous Materials Claims.
e. INSPECTION BY BENEFICIARY. Upon reasonable prior notice to
Trustor, Beneficiary, its employees and agents, may from time to
time (whether before or after the commencement of a nonjudicial
or judicial foreclosure proceeding), enter and inspect the
Property for the purpose of determining the existence, location,
nature and magnitude of any past or present release or
threatened release of any Hazardous Materials into, onto,
beneath or from the Property.
f. LEGAL EFFECT OF SECTION. Trustor and Beneficiary agree that: (i)
this Hazardous Materials Section is intended as Beneficiary's
written request for information (and Trustor's response)
concerning the environmental condition of the real property
security as required by California Code of Civil Procedure
Section 726.5; and (ii) each representation and warranty and
covenant in this Section (together with any indemnity applicable
to a breach of any such representation and warranty) with
respect to the environmental condition of the Property is
intended by Beneficiary and Trustor to be an "environmental
provision" for purposes of California Code of Civil Procedure
Section 736.
6.3 COMPLIANCE WITH LAWS. Trustor shall comply with all federal, state and
local laws, rules and regulations applicable to the Property, including,
without limitation, all zoning and building requirements and all
requirements of the Americans With Disabilities Act of 1990 (42 U.S.C.
Section 12101 et seq.), as amended from time to time. Trustor shall
possess and maintain or cause Borrower to possess and maintain in full
force and effect at all times (a) all certificates of occupancy and
other licenses, permits and authorizations required by applicable law
for the existing use of the Property and (b) all permits, franchises and
licenses and all rights to all trademarks, trade names, patents and
fictitious names, if any, required by applicable law for Trustor and
Borrower to conduct the business(es) in which Trustor and Borrower are
now engaged.
6.4 LITIGATION. Trustor shall promptly notify Beneficiary in writing of any
litigation pending or threatened against Trustor or Borrower claiming
damages in excess of $50,000 and of all pending or threatened litigation
against Trustor or Borrower if the aggregate damage claims against
Trustor or Borrower exceed $100,000.
6.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Trustor shall not: (a) merge
or consolidate with any other entity or permit Borrower to merge or
consolidate with any other entity; (b) make any substantial change in
the nature of Trustor's business or structure or permit Borrower to make
any substantial change in the nature of Borrower's business or
structure; (c) acquire all or substantially all of the assets of any
other entity or permit Borrower to acquire all or substantially all of
the assets of any other entity; or (d) sell, lease, assign, transfer or
otherwise dispose of a material part of Trustor's assets except in the
ordinary course of Trustor's business or permit Borrower to sell, lease,
assign, transfer or otherwise dispose of a material part of Borrower's
assets except in the ordinary course of Borrower's business.
6.6 ACCOUNTING RECORDS. Trustor shall maintain and cause Borrower to
maintain adequate books and records in accordance with the same
accounting standard used by Trustor or Borrower to prepare the financial
statements delivered to and approved by Beneficiary in connection with
the making of the Loan or other accounting standards approved by
Beneficiary. Trustor shall permit and shall cause Borrower to permit any
representative of Beneficiary, at any reasonable time and from time to
time, to inspect, audit and examine such books and records and make
copies of same.
15
6.7 COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor shall pay to Beneficiary
the full amount of all costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses of Beneficiary's
in-house or outside counsel, incurred by Beneficiary in connection with:
(a) appraisals and inspections of the Property or Collateral required by
Beneficiary as a result of (i) a Transfer or proposed Transfer (as
defined below), or (ii) a Default; (b) appraisals and inspections of the
Property or Collateral required by applicable law, including, without
limitation, federal or state regulatory reporting requirements; and (c)
any acts performed by Beneficiary at Trustor's request or wholly or
partially for the benefit of Trustor (including, without limitation, the
preparation or review of amendments, assumptions, waivers, releases,
reconveyances, estoppel certificates or statements of amounts owing
under any Secured Obligation). In connection with appraisals and
inspections, Trustor specifically (but not by way of limitation)
acknowledges that: (aa) a formal written appraisal of the Property by a
state certified or licensed appraiser may be required by federal
regulatory reporting requirements on an annual or more frequent basis;
and (bb) Beneficiary may require inspection of the Property by an
independent supervising architect, a cost engineering specialist, or
both, Trustor shall pay all indebtedness arising under this Section
immediately upon demand by Beneficiary together with interest thereon
commencing ten (10) days following notice of such indebtedness unless
sooner paid at the rate of interest then applicable to the principal
balance of the Note as specified therein.
6.8 LIENS, ENCUMBRANCES AND CHARGES. Trustor shall immediately discharge by
bonding or otherwise any lien, charge or other encumbrance which
attaches to the Property in violation of Section 6.15. Subject to
Trustor's right to contest such matters under this Deed of Trust or as
expressly permitted in the Loan Documents, Trustor shall pay when due
all obligations 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, including, without limitation, all claims for work or labor
performed, or materials or supplies furnished, in connection with any
work of demolition, alteration, repair, improvement or construction of
or upon the Property, except such as Trustor may in good faith contest
or as to which a bona fide dispute may arise (provided provision is made
to the satisfaction of Beneficiary for eventual payment thereof in the
event that Trustor is obligated to make such payment and that any
recorded claim of lien, charge or other encumbrance against the Property
is immediately discharged by bonding or otherwise).
6.9 TAXES AND OTHER LIABILITIES. Trustor shall pay and discharge when due
any and all indebtedness, obligations, assessments and taxes, both real
and personal and including federal and state income taxes and state and
local property taxes and assessments. Trustor shall promptly provide to
Beneficiary copies of all tax and assessment notices pertaining to the
Property. Trustor hereby authorizes Beneficiary to obtain, at Trustor's
expense, a tax service contract which shall provide tax information on
the Property to Beneficiary for the term of the Loan and any extensions
or renewals of the Loan.
6.10 INSURANCE COVERAGE. Trustor shall insure the Property against loss or
damage by fire and such other hazards as Beneficiary shall from time to
time require; provided, however, (a) Beneficiary may not require flood
insurance unless all or a portion of the improvements located on the
Land is or becomes located in federally designated "special flood hazard
area" and (b) Beneficiary may not require earthquake insurance unless
the seismic probable maximum loss (PML) for the Property, as determined
by Beneficiary, is 20% or more, Trustor shall also carry public
liability insurance and such other insurance as Beneficiary may require,
including, without limitation, business interruption insurance or loss
of rents insurance. Such policies shall contain a standard mortgage
clause naming Beneficiary and its successors in interest as a loss payee
and requiring at least 30 days prior notice to the holder at termination
or cancellation. Trustor shall maintain all required insurance
throughout the term of the Loan and while any liabilities of Borrower or
Trustor to Beneficiary under any of the Loan Documents remain
outstanding at Trustor's expense, with companies, and in substance and
form satisfactory to Beneficiary, Neither Beneficiary nor Trustee, by
reason of accepting, rejecting, approving or obtaining insurance shall
incur any liability for; (c) the existence, nonexistence, form or legal
sufficiency of any insurance; (d) the solvency of any insurer; or (e)
the payment of claims. Trustor may carry additional insurance so long as
Beneficiary's insurance requirements and minimum coverages are
maintained.
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6.11 CONDEMNATION AND INSURANCE PROCEEDS.
a. ASSIGNMENT OF CLAIMS. Trustor absolutely and irrevocably assigns
to Beneficiary all of the following rights, claims and amounts
(collectively, "Claims"), all of which shall be paid 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. Trustor
shall give Beneficiary prompt written notice of the occurrence
of any casualty affecting, or the institution of any proceedings
for eminent domain or for the condemnation of, the Property or
any portion thereof. So long as no Default has occurred and is
continuing at the time, (i) Trustor shall have the right to
adjust, compromise and settle any Claim or group of related
Claims of S100,000 or less without the participation or consent
of Beneficiary and (ii) Beneficiary shall have the right to
participate in and consent to any adjustment, compromise or
settlement of any Claim or group of related Claims exceeding
$100,000. If a Default has occurred and is continuing at the
time, Trustor hereby irrevocably empowers Beneficiary, in the
name of Trustor, as Trustor's true and lawful attorney in fact,
to commence, appear in, defend, prosecute, adjust, compromise
and settle all Claims; provided, however, Beneficiary shall not
be responsible for any failure to undertake any or all of such
actions regardless of the cause of the failure. All awards,
proceeds and other sums described herein shall, in all cases, be
payable to Beneficiary.
b. APPLICATION OF PROCEEDS; NO DEFAULT. So long as no Default has
occurred and is continuing at the time of Beneficiary's receipt
of the proceeds of the Claims ("Proceeds") and no Default occurs
thereafter, the following provisions shall apply:
(i) CONDEMNATION. If the Proceeds are the result of Claims
described in clauses 6.11.a (i) or (ii) above, or
interest accrued thereon, Beneficiary shall apply the
Proceeds in the following order of priority: First, to
Beneficiary's expenses in settling, prosecuting or
defending the Claims; Second, to the repair or
restoration of the portion of the Property, if any, not
condemned or proposed for condemnation and not otherwise
the subject of a claim or award; and Third, to the
Secured Obligations in any order without suspending,
extending or reducing any obligation of Trustor to make
installment payments.
(ii) INSURANCE. If the Proceeds are the result of Claims
described in clause 6.11.a (iii) above or interest
accrued thereon, Beneficiary shall apply the Proceeds in
the following order of priority: First, to Beneficiary's
expenses in settling, prosecuting or defending the
Claims; Second, to the repair or restoration of the
Property; and Third, (aa) if the repair or restoration
of the Property has been completed and all costs
incurred in connection with the repair or restoration
have been paid in full, to Trustor or (bb) in all other
circumstances, to the Secured Obligations in any order
without suspending, extending or reducing any obligation
of Trustor to make installment payments.
(iii) RESTORATION. Notwithstanding the foregoing Sections
6.1l.b (i) and (ii), Beneficiary shall have no
obligation to make any Proceeds available for the repair
or restoration of all or any portion of the Property
unless and until all the following conditions have been
satisfied: (aa) delivery to Beneficiary of the Proceeds
plus any additional amount which is needed to pay all
costs of the repair or restoration (including, without
limitation, taxes, financing charges, insurance and rent
during the repair period); (bb) establishment of an
arrangement for lien releases and disbursement of funds
acceptable to Beneficiary; (cc) delivery to Beneficiary
in form and content acceptable to Beneficiary of all of
the following: (1) plans and specifications for the
work; (2) a contract for the work, signed by a
contractor acceptable to Beneficiary; (3) a cost
breakdown for the work; (4) if required by Beneficiary,
a payment and performance bond for
17
the work; (5) evidence of the continuation of all Leases
(or replacement leases approved by Beficiary) unless
consented to in writing by Beneficiary; (6) evidence
that, upon completion of the work, the size, capacity,
value, and income coverage ratios for the Property will
be at least as great as those which existed immediately
before the damage or condemnation occurred; (7) evidence
that the work can reasonably be completed on or before
that date which is 6 months prior to the Maturity Date;
and (8) evidence of the satisfaction of any additional
conditions that Beneficiary may reasonably establish to
protect Beneficiary's security. Trustor acknowledges
that the specific conditions described above are
reasonable.
c. APPLICATION OF PROCEEDS; DEFAULT. If a Default has occurred and
is continuing at the time of Beneficiary's receipt of the
Proceeds or if a Default occurs and remains incured thereafter,
Beneficiary may, at Beneficiary's absolute discretion and
regardless of any impairment of security or lack of impairment
of security, but subject to applicable law governing use of the
Proceeds, if any, apply all or any of the Proceeds to
Beneficiary's expenses in settling, prosecuting or defending the
Claims and then apply the balance to the Secured Obligations in
any order without suspending, extending or reducing any
obligation of Trustor to make installment payments, and may
release all or any part of the Proceeds to Trustor upon any
conditions Beneficiary chooses.
6.12 IMPOUNDS.
a. POST-DEFAULT IMPOUNDS. If required by Beneficiary at any time
after a Default occurs (and regardless of whether such Default
is thereafter cured), Trustor shall deposit with Beneficiary
such amounts ("Post-Default Impounds") on such dates (determined
by Beneficiary as provided below) as will be sufficient to pay
any or all "Costs" (as defined below) specified by Beneficiary.
Beneficiary in its sole discretion shall estimate the amount of
such Costs that will be payable or required during any period
selected by Beneficiary not exceeding 1 year and shall determine
the fractional portion thereof that Trustor shall deposit with
Beneficiary on each date specified by Beneficiary during such
period. If the Post-Default Impounds paid by Trustor are not
sufficient to pay the related Costs, Trustor shall deposit with
Beneficiary upon demand an amount equal to the deficiency. All
Post-Default Impounds shall be payable by Trustor in addition to
(but without duplication of) any other Impounds (as defined
below).
b. ALL IMPOUNDS. Post-Default Impounds and any other impounds that
may be payable by Borrower under the Note are collectively
called "Impounds". All Impounds shall be deposited into one or
more segregated or commingled accounts maintained by Beneficiary
or its servicing agent. Except as otherwise provided in the
Note, such account(s) shall not bear interest. Beneficiary shall
not be a trustee, special depository or other fiduciary for
Trustor with respect to such account, and the existence of such
account shall not limit Beneficiary's rights under this Deed of
Trust, any other agreement or any provision of law. If no
Default exists, Beneficiary shall apply all Impounds to the
payment of the related Costs, or in Beneficiary's sole
discretion may release any or all Impounds to Trustor for
application to and payment of such Costs. If a Default exists,
Beneficiary may apply any or all Impounds to any Secured
Obligation and/or to cure such Default, whereupon Trustor shall
restore all Impounds so applied and cure all Defaults not cured
by such application. The obligations of Trustor hereunder shall
not be diminished by deposits of Impounds made by Trustor,
except to the extent that such obligations have actually been
met by application of such Impounds. Upon any assignment of this
Deed of Trust Beneficiary may assign all Impounds in its
possession to Beneficiary's assignee, whereupon Beneficiary and
Trustee shall be released from all liability with respect to
such Impounds. Within 60 days following full repayment of the
Secured Obligations (other than as a consequence of foreclosure
or conveyance in lieu of foreclosure) or at such earlier time as
Beneficiary may elect, Beneficiary shall pay to Trustor all
Impounds in its possession, and no other party shall have any
right or claim thereto. "Costs" means (i) all taxes and other
liabilities payable by Trustor under Section 6.9, (ii) all
insurance premiums payable by Trustor under Section 6.10, (iii)
all other costs and expenses for which Impounds are required
under the Note, and/or (iv) all other amounts that will be
required to preserve the value of the
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Property. Trustor shall deliver to Beneficiary, promptly upon
receipt, all bills for Costs for which Beneficiary has required
Post-Default Impounds.
6.13 DEFENSE AND NOTICE OF LOSSES, CLAIMS AND ACTIONS. Trustor shall protect,
preserve and defend the Property and title to and right of possession of
the Property, the security of this Deed of Trust and the rights and
powers of Beneficiary and Trustee hereunder at Trustor's sole expense
against all adverse claims, whether the claim: (a) is against a
possessory or non-possessory interest; (b) arose prior or subsequent to
the Effective Date; or (c) is senior or junior to Trustor's or
Beneficiary's rights. Trustor shall give Beneficiary and Trustee prompt
notice in writing of the assertion of any claim, of the filing of any
action or proceeding, of the occurrence of any damage to the Property
and of any condemnation offer or action.
6.14 RIGHT OF INSPECTION. Beneficiary and its independent contractors, agents
and employees may, subject to the rights of tenants under their
respective Leases, enter the Property from time to time at any
reasonable time for the purpose of inspecting the Property and
ascertaining Trustor's compliance with the terms of this Deed of Trust.
Beneficiary shall use reasonable efforts to assure that Beneficiary's
entry upon and inspection of the Property shall not materially and
unreasonably interfere with the business or operations of Trustor or
Trustor's tenants on the Property.
6.15 PROHIBITION OF TRANSFER OF PROPERTY OR INTERESTS IN TRUSTOR. Except as
otherwise expressly permitted in the Note, Trustor shall not: (a) cause
or permit any sale, exchange, mortgage, pledge, hypothecation,
assignment, encumbrance or other transfer, conveyance or disposition,
whether voluntarily, involuntarily or by operation of law ("Transfer")
of all or any part of, or all or any direct or indirect interest in, the
Property or the Collateral (except for equipment and inventory in the
ordinary course of its business); or (b) cause or permit a Transfer of
any direct or indirect interest in any partnership, limited liability
company, corporation, trust, or other entity comprising all or any
portion of or holding any direct or indirect interest in Trustor or
Borrower (other than the sale or exchange of a limited partnership
interest or a non-managing membership interest). If any Transfer occurs
and such Transfer is not expressly permitted in the Note or this Deed of
Trust, Beneficiary shall have the absolute right at its option, without
prior demand or notice, to declare all of the Secured Obligations
immediately due and payable, except to the extent prohibited by law, and
pursue its rights and remedies under Section 7.3 herein. Trustor agrees
to pay the prepayment charge as set forth in the Note if the Secured
Obligations are accelerated pursuant to the terms of this Section.
6.16 ACCEPTANCE OF TRUST; POWERS AND DUTIES OF TRUSTEE. Trustee accepts this
trust when this Deed of Trust is recorded. From time to time upon
written request of Beneficiary and presentation of this Deed of Trust,
or a certified copy thereof, for endorsement, and without affecting the
personal liability of any person for payment of any indebtedness or
performance of any Secured Obligation, Trustee may, without liability
therefor and without notice: (a) reconvey all or any part of the
Property; (b) consent to the making of any map or plat of the Property;
(c) join in granting any easement on the Property; (d) join in any
declaration of covenants and restrictions; or (e) join in any extension
agreement or any agreement subordinating the lien or charge of this Deed
of Trust. Nothing contained in this Section 6.16 shall be construed to
limit, impair or otherwise affect the rights of Trustor in any respect.
Except as may otherwise be required by applicable law, Trustee or
Beneficiary may from time to time apply to any court of competent
jurisdiction for aid and direction in the execution of the trusts
hereunder and the enforcement of the rights and remedies available
hereunder, and Trustee or Beneficiary may obtain orders or decrees
directing or confirming or approving acts in the execution of said
trusts and the enforcement of said remedies. Trustee has no obligation
to notify any party of any pending sale or any action or proceeding
(including, without limitation, actions in which Trustor, Beneficiary or
Trustee shall be a party) unless held or commenced and maintained by
Trustee under this Deed of Trust. Trustee shall not be obligated to
perform any act required of it hereunder unless the performance of the
act is requested in writing and Trustee is reasonably indemnified and
held harmless against loss, cost, liability and expense.
6.17 COMPENSATION OF TRUSTEE. Trustor shall pay to Trustee reasonable
compensation and reimbursement for services and expenses in the
administration of this trust, including, without limitation, reasonable
19
attorneys' fees. Trustor shall pay all indebtedness arising under this
Section immediately upon demand by Trustee or Beneficiary together 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.
6.18 EXCULPATION. Beneficiary shall not directly or indirectly be liable to
Trustor or any other person as a consequence of: (a) the exercise of the
rights, remedies or powers granted to Beneficiary in this Deed of Trust;
(b) the failure or refusal of Beneficiary to perform or discharge any
obligation or liability of Trustor under any agreement related to the
Property or under this Deed of Trust; or (c) any loss sustained by
Trustor or any third party resulting from Beneficiary's failure to lease
the Property after a Default (hereafter defined) or from any other act
or omission of Beneficiary in managing the Property after a Default
unless the loss is caused by the willful misconduct and bad faith of
Beneficiary and no such liability shall be asserted or enforced against
Beneficiary, all such liability being expressly waived and released by
Trustor.
6.19 INDEMNITY. Without in any way limiting any other indemnity contained in
this Deed of Trust, Trustor agrees to defend, indemnify and hold
harmless Trustee and the Beneficiary Group from and against any claim,
loss, damage, cost, expense or liability directly or indirectly arising
out of: (a) the making of the Loan, except for violations of banking
laws or regulations by the Beneficiary Group; (b) this Deed of Trust;
(c) the execution of this trust or the performance of any act required
or permitted hereunder or by law; (d) any failure of Trustor to perform
Trustor's obligations under this Deed of Trust or the other Loan
Documents; (e) any alleged obligation or undertaking on the Beneficiary
Group's part to perform or discharge any of the representations,
warranties, conditions, covenants or other obligations contained in any
other document related to the Property; (f) any act or omission by
Trustor or any contractor, agent, employee or representative of Trustor
with respect to the Property; or (g) any claim, loss, damage, cost,
expense or liability directly or indirectly arising out of: (i) the use,
generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any
Hazardous Materials which are found in, on, under or about the Property
(including, without limitation, underground contamination); or (ii) the
breach of any covenant, representation or warranty of Trustor under
Sections 5.l.p, 5.l.q, 5.1.r, or 6.2 above. The foregoing to the
contrary notwithstanding, this indemnity shall not include any claim,
loss, damage, cost, expense or liability directly or indirectly arising
out of the gross negligence or willful misconduct of any member of the
Beneficiary Group or Trustee, or any violation of law or the Loan
Documents by any member of the Beneficiary Group or Trustee, or any
claim, loss, damage, cost, expense or liability incurred by the
Beneficiary Group or Trustee arising from any act or incident on the
Property occurring after the full reconveyance and release of the lien
of this Deed of Trust on the Property, or with respect to the matters
set forth in clause (g) above, any claim, loss, damage, cost, expense or
liability incurred by the Beneficiary Group resulting from the
introduction and initial release of Hazardous Materials on the Property
occurring after the transfer of title to the Property at a foreclosure
sale under this Deed of Trust, either pursuant to judicial decree or the
power of sale, or by deed in lieu of such foreclosure. This indemnity
shall include, without limitation: (aa) all consequential damages
(including, without limitation, any third party tort claims or
governmental claims, fines or penalties against Trustee or the
Beneficiary Group); (bb) all court costs and reasonable attorneys' fees
(including, without limitation, expert witness fees) paid or incurred by
Trustee or the Beneficiary Group; and (cc) the costs, whether
foreseeable or unforeseeable, of any investigation, repair, cleanup or
detoxification of the Property which is required by any governmental
entity or is otherwise necessary to render the Property in compliance
with all laws and regulations pertaining to Hazardous Materials.
"Beneficiary Group", as used herein, shall mean (1) Beneficiary
(including, without limitation, any participant in the Loan), (2) any
entity controlling, controlled by or under common control with
Beneficiary, (3) the directors, officers, employees and agents of
Beneficiary and such other entities, and (4) the successors, heirs and
assigns of the entities and persons described in foregoing clauses (1)
through (3). Trustor shall pay immediately upon Trustee's or
Beneficiary's demand any amounts owing under this indemnity together
with interest from the date the indebtedness arises until paid at the
rate of interest applicable to the principal balance of the Note as
specified therein. Trustor agrees to use legal counsel reasonably
acceptable to Trustee and the Beneficiary Group in any action or
proceeding arising under this indemnity.
20
To the extent, if at all, that Section 56-7-1 New Mexico Statutes
Annotated 1978 applies to any agreement to indemnify contained herein,
such agreement to indemnify shall not extend to liability, claims,
damages, losses or expenses, including attorney's fees, arising out of:
a. The preparation or approval of maps, drawings, opinions,
reports, surveys, change orders, designs or specifications by
the indemnitee, or the agents or employees of the indemnitee; or
b. The giving of or the failure to give directions or instructions
by the indemnitee, or the agents or employees of the indemnitee,
where such giving or failure to give directions or instructions
is the primary cause of bodily injury to persons or damage to
property.
THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE TERMINATION AND
RECONVEYANCE OF THIS DEED OF TRUST, BUT TRUSTOR'S LIABILITY UNDER THIS
INDEMNITY SHALL BE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
ENTITLED "BORROWER'S LIABILITY."
6.20 SUBSTITUTION OF TRUSTEE. From time to time, by a writing signed and
acknowledged by Beneficiary and recorded in the Office of the County
Clerk of the County in which the Property is situated, Beneficiary may
appoint another trustee to act in the place and stead of Trustee or any
successor. Such writing shall set forth any information required by law.
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 shall be
conclusive proof of the proper substitution of such new trustee.
6.21 RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY. Without
notice to or the consent, approval or agreement of any persons or
entities having any interest at any time in the Property or in any
manner obligated under the Secured Obligations ("Interested Parties"),
Beneficiary may, from time to time: (a) fully or partially release any
person or entity from liability for the payment or performance of any
Secured Obligation; (b) extend the maturity of any Secured Obligation;
(c) make any agreement with Borrower increasing the amount or otherwise
altering the terms of any Secured Obligation; (d) accept additional
security for any Secured Obligation; or (e) release all or any portion
of the Property, Collateral and other security for any Secured
Obligation. None of the foregoing actions shall release or reduce the
personal liability of any of said Interested Parties, or release or
impair the priority of the lien of this Deed of Trust upon the Property.
6.22 SALE OR PARTICIPATION OF LOAN. Beneficiary may at any time sell, assign,
participate or securitize all or any portion of Beneficiary's rights and
obligations under the Loan Documents, and that any such sale,
assignment, participation or securitization may be to one or more
financial institutions or other entities, to private investors, or into
the public securities market, in Beneficiary's sole discretion. Trustor
further agrees that Beneficiary may disseminate to any such actual or
potential purchaser(s), assignee(s) or participant(s) (and to any
investment banking firms, rating agencies, accounting firms, law firms
and other third party advisory firms and investors involved with the
Loan and the Loan Documents or the applicable sale, assignment,
participation or securitization) all documents and financial and other
information heretofore or hereafter provided to or known to Beneficiary
with respect to: (a) the Property and its operation; (b) any party
connected with the Loan (including,-without limitation, Trustor, any
partner or member of Trustor, any constituent partner or member of
Trustor, any guarantor and any nonborrower trustor). In the event of any
such sale, assignment, participation or securitization, Beneficiary and
the other parties to the same shall share in the rights and obligations
of Beneficiary set forth in the Loan Documents as and to the extent they
shall agree among themselves. In connection with any such sale,
assignment, participation or securitization, Trustor further agrees that
the Loan Documents shall be sufficient evidence of the obligations of
Trustor to each purchaser, assignee or participant, and Trustor shall,
within 15 days after request by Beneficiary; (c) deliver to Beneficiary
such information and documents relating to Trustor, the Property and its
operation and any party connected with the Loan as Beneficiary or any
rating agency may request; (d) deliver to Beneficiary an estoppel
certificate for the benefit of Beneficiary and any other party
designated by
21
Beneficiary verifying the status and terms of the Loan, in form and
content satisfactory to Beneficiary; (e) enter into such amendments to
the Loan Documents as may be requested in order to facilitate any such
-sale, assignment, participation or securitization without impairing
Trustor's rights or increasing Trustor's obligations; (f) if, as a
condition to the closing of the Loan, Trustor was required to be a
special-purpose bankruptcy-remote entity, enter into such amendments to
the organizational documents of Trustor as any rating agency may request
to preserve or enhance Trustor's special-purpose bankruptcy-remote
status; and (g) if, as a condition to the closing of the Loan, Trustor
was required to provide Beneficiary with any nonconsolidation opinions,
provide Beneficiary with such amendments and restatements of such
opinions as any rating agency may request. The indemnity obligations of
Trustor under the Loan Documents shall also apply with respect to any
purchaser, assignee or participant.
6.23 RECONVEYANCE. Upon Beneficiary's written request, and upon surrender of
this Deed of Trust or certified copy thereof and any note, instrument or
instruments setting forth all obligations secured hereby to Trustee for
cancellation, Trustee shall reconvey, without warranty, the Property or
that portion thereof then held hereunder. The recitals of any matters or
facts in any reconveyance executed hereunder shall be conclusive proof
of the truthfulness thereof. To the extent permitted by law, the
reconveyance may describe the grantee as "the person or persons legally
entitled thereto". Neither Beneficiary nor Trustee shall have any duty
to determine the rights of persons claiming to be rightful grantees of
any reconveyance. When the Property has been fully reconveyed, the last
such reconveyance shall operate as a reassignment of all future rents,
issues and profits of the Property to the person or persons legally
entitled thereto and as a release of any filings made in connection with
the Loan; provided, however, that if required by applicable law, Trustee
and/or Beneficiary (as the case may be) shall release any such filing by
appropriate instrument.
6.24 YEAR 2000 COMPLIANCE. Trustor shall timely ensure that all software,
hardware, equipment, goods and systems used in the operation of Trustor
or the Property will properly perform date-sensitive functions before,
during and after the year 2000.
6.25 GROUND LEASE. With respect to the Ground Lease, Trustor agrees:
a. To perform all obligations of the tenant under the Ground Lease
and any statute, ordinance, rule or regulation relating thereto,
and not to cause or permit any breach thereof. If Trustor shall
default under the Ground Lease, or if Beneficiary shall receive
notice of any default under the Ground Lease, Beneficiary may,
at its option but without any obligation to do so, take any
action necessary or desirable to cure any such default,
Beneficiary being authorized to enter upon the Land for such
purposes with or without notice and without becoming a mortgagee
in possession. Trustor shall, immediately on demand, pay to
Beneficiary all costs of Beneficiary incurred in curing any such
default, together with interest on such costs from the date of
expenditure until said sums have been paid, at the rate of
interest applicable to the principal balance of the Note as
specified therein.
b. To give prompt notice to Beneficiary of any default by any party
under the Ground Lease (which shall include, but not be limited
to, copies of any default notices sent to Landlord or received
by Trustor), to give prompt notice to Beneficiary of any
litigation or arbitration with respect to the Ground Lease, and
to furnish to Beneficiary all information that it may reasonably
request concerning the performance by Trustor of Trustor's
obligations under the Ground Lease.
c. That the provisions hereof shall be deemed to be obligations of
Trustor in addition to Trustor's obligations as tenant with
respect to similar matters contained in the Ground Lease;
provided, however, the inclusion herein of any obligations
relating to similar matters as to which Trustor is obligated
under the Ground Lease shall not restrict or limit Trustor's
obligations to perform promptly all of its obligations as tenant
under the Ground Lease, and nothing in this Deed of Trust shall
be construed as requiring Trustor or Beneficiary to take or omit
to take any action which would cause a default under the Ground
Lease.
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d. That so long as this Deed of Trust is in effect, there shall be
no merger of the Ground Lease, nor of the leasehold estate or
other estate created thereby, with the fee estate in the Land by
reason of the fact that the Ground Lease, or the leasehold
estate or other estate created thereby, may be held directly or
indirectly by or for the account of any person or entity who or
which also holds the fee estate in the Land. If Trustor acquires
the fee title or any other estate, title or interest in the
Land, this Deed of Trust shall attach to and be a lien upon the
fee title or such other estate so acquired, and such fee title
or other estate shall, without further assignment, mortgage or
conveyance, become and remain subject to the lien of and covered
by this Deed of Trust. Trustor shall notify Beneficiary of any
such acquisition by Trustor and, on written request by
Beneficiary, shall cause to be executed and recorded all such
documents and instruments as may in the reasonable opinion of
Beneficiary be required to carry out the intent and meaning
hereof.
e. That, so long as this Deed of Trust is in effect, no termination
or surrender by Trustor as tenant under the Ground Lease to
Landlord thereunder, shall be valid or effective. The terms of
the Ground Lease may not be modified or terminated or
subordinated to any mortgage, deed of trust, lease or other
interest, either orally or in writing, other than as a result of
the action or inaction of Beneficiary, without the prior written
consent of Beneficiary. If requested in writing, Beneficiary
agrees to cooperate with Trustor. at Trustor's sole cost and
expense, to preserve Beneficiary's interest in the Ground Lease
and avoid a default under the Ground Lease.
f. That if the Ground Lease is for any reason whatsoever terminated
prior to the expiration of its term and Trustor is unwilling or
unable to reinstate the Ground Lease or enter into a new ground
lease, then if pursuant to any provision of the Ground Lease or
otherwise, Beneficiary or its designee shall acquire from
Landlord a new lease or other agreement for the use of the Land,
Trustor shall have no right, title or interest in or to such new
lease or other agreement or the estate created thereby. If
Beneficiary acquires any such new lease or other agreement, the
termination of the Ground Lease shall be deemed to have been
consented to by Beneficiary.
g. That, so long as this Deed of Trust is in effect. Trustor shall
timely exercise all renewal and extension options under the
Ground Lease and comply with all conditions precedent to the
exercise thereof.
h. That from time to time upon the written request of Beneficiary,
Trustor shall deliver to Beneficiary estoppel certificates from
Landlord in form and substance acceptable to Beneficiary to the
extent Landlord is obligated to deliver such certificates
pursuant to the terms of the Ground Lease.
6.26 LANDLORD'S BANKRUPTCY.
a. Trustor acknowledges that pursuant to Section 365 of the
Bankruptcy Reform Act of 1978 (as the same may be amended from
time to time, "Bankruptcy Act") it is possible that a trustee in
bankruptcy of Landlord or Landlord as a debtor-in-possession
could reject the Ground Lease, in which case Trustor, as tenant,
would have the election described in Section 365(h) of the
Bankruptcy Act (which election, as the same may be amended from
time to time, and together with any comparable right under any
other state or federal law relating to bankruptcy,
reorganization or other relief for debtors, whether now or
hereafter in effect, is herein called the "Election") to treat
the Ground Lease as terminated by such rejection or, in the
alternative, to remain in possession for the balance of the term
of the Ground Lease and any renewal or extension thereof that is
enforceable by the tenant under applicable nonbankruptcy law.
Trustor shall not permit the termination of the Ground Lease by
exercise of the Election or otherwise without the prior written
consent of Beneficiary, which consent may be withheld,
conditioned or delayed for any reason in Beneficiary's sole and
absolute discretion. Trustor acknowledges that since the
23
Ground Lease is a primary part of the security for the Secured
Obligations, it is not anticipated that Beneficiary would
consent to termination of the Ground Lease.
b. In order to secure the covenant made in this Section 6.26 and as
security for the other Secured Obligations, Trustor assigns the
Election and all rights related thereto to Beneficiary. Trustor
acknowledges and agrees that the foregoing assignment of the
Election and related rights is one of the rights which
Beneficiary may use at any time in order to protect and preserve
the other rights and interests of Beneficiary under this Deed of
Trust, since exercise of the Election in favor of terminating
the Ground Lease would constitute waste hereunder. Trustor
agrees that exercise of the Election in favor of preserving the
right to possession under the Ground Lease shall not be deemed
to constitute a taking or sale of the Property by Beneficiary
and shall not entitle Trustor to any credit against the Secured
Obligations. Beneficiary agrees to exercise the Election in
favor of preserving the right to possession under the Ground
Lease.
c. Trustor acknowledges and agrees that in the event the Election
is exercised in favor of Trustor remaining in possession,
Trustor's resulting rights under the Ground Lease, as adjusted
by the effect of Section 365 of the Bankruptcy Act, shall then
be part of the Property and shall be subject to the lien created
by this Deed of Trust.
6.27 TRUSTOR'S (TENANT'S BANKRUPTCY).
a. If there shall be filed by or against Trustor a petition under
the Bankruptcy Act, and Trustor, as the tenant under the Ground
Lease, shall determine to reject the Ground Lease pursuant to
Section 365(a) of the Bankruptcy Act, then Trustor shall give
Beneficiary not less than ten (10) days' prior notice of the
date on which Trustor shall apply to the bankruptcy court for
authority to reject the Ground Lease. Beneficiary shall have the
right, but not the obligation, to serve upon Trustor within such
10-day period a notice stating that (i) Beneficiary demands that
Trustor assume and assign the Ground Lease to Beneficiary
pursuant to Section 365 of the Bankruptcy Act and (ii)
Beneficiary agrees to cure or provide adequate assurance of
prompt cure of all defaults and provide adequate assurance of
future performance under the Ground Lease. If Beneficiary serves
upon Trustor the notice described in the preceding sentence,
Trustor shall not seek to reject the Ground Lease and shall
comply with the demand provided for in clause (i) of the
preceding sentence within thirty (30) days after the notice
shall have been given, subject to the performance by Beneficiary
of the agreement provided for in clause (ii) of the preceding
sentence.
b. Effective upon the entry of an order for relief in respect of
Trustor under the Bankruptcy Act, Trustor hereby assigns and
transfers to Beneficiary a non-exclusive right to apply to the
bankruptcy court under Section 265(d)(4) of the Bankruptcy Act
for an order extending the period during which the Ground Lease
may be rejected or assumed.
ARTICLE 7. DEFAULT
7.1 DEFAULT. For all purposes hereof, "Default" shall mean either an
"Optional Default" (as defined below) or an "Automatic Default" (as
defined below).
a. OPTIONAL DEFAULT. An "Optional Default" shall occur, at
Beneficiary's option, upon the occurrence of any of the
following events:
(i) MONETARY. Borrower or Trustor shall fail to (aa) pay
when due any sums which by their express terms require
immediate payment without any grace period or sums which
are payable on the Maturity Date, or (bb) pay within 5
days when due any other sums payable under the
24
Note, this Deed of Trust or any of the other Loan
Documents, including without limitation, any monthly
payment due under the Note.
(ii) FAILURE TO PERFORM. Borrower or Trustor shall fail to
observe, perform or discharge any of Borrower's or
Trustor's obligations, covenants, conditions or
agreements, other than Borrower's or Trustor's payment
obligations, under the Note, this Deed of Trust or any
of the other Loan Documents, and (aa) such failure shall
remain uncured for 30 days after written notice thereof
shall have been given to Borrower or Trustor, as the
case may be, by Beneficiary or (bb) if such failure is
of such a nature that it cannot be cured within such 30
day period, Borrower or Trustor shall fail to commence
to cure such failure within such 30 day period or shall
fail to diligently prosecute such curative action
thereafter.
(iii) REPRESENTATIONS AND WARRANTIES. Any representation,
warranty, certificate or other statement (financial or
otherwise) made or furnished by or on behalf of
Borrower, Trustor, or a guarantor, if any, to
Beneficiary or in connection with any of the Loan
Documents, or as an inducement to Beneficiary to make
the Loan, shall be willfully false, incorrect,
incomplete or misleading in any material respect when
made or furnished.
(iv) ATTACHMENT. The sequestration or attachment of, or levy
or execution upon any of the Property, the Collateral or
any other collateral provided by Borrower or Trustor
under any of the Loan Documents, or any material portion
of the other assets of Borrower or Trustor, which
sequestration, attachment, levy or execution is not
released or dismissed within 90 days after its
occurrence; or the sale of any assets affected by any of
the foregoing.
(v) UNINSURED CASUALTY. The occurrence of an uninsured
casualty with respect to any material portion (as
reasonably determined by Beneficiary) of the Property
unless: (aa) no other Default has occurred and is
continuing at the time of such casualty or occurs
thereafter; (bb) Trustor promptly notifies Beneficiary
of the occurrence of such casualty; and (cc) not more
than 45 days after the occurrence of such casualty,
Trustor delivers to Beneficiary immediately available
funds in an amount sufficient, in Beneficiary's
reasonable opinion, to pay all costs of the repair or
restoration (including, without limitation, taxes,
financing charges, insurance and rent during the repair
period). So long as no Default has occurred and is
continuing at the time of Beneficiary's receipt of such
funds and no Default occurs thereafter, Beneficiary
shall make such funds available for the repair or
restoration of the Property. Notwithstanding the
foregoing, Beneficiary shall have no obligation to make
any funds available for repair or restoration of the
Property unless and until all the conditions set forth
in clauses (ii) and (iii) of the second sentence of
Section 6.11(b) of this Deed of Trust have been
satisfied. Trustor acknowledges that the specific
conditions described above are reasonable.
(vi) ADVERSE FINANCIAL CHANGE. Any material adverse change in
the financial condition of Borrower or any general
partner or managing member of Borrower or any guarantor
from the condition shown on the financial statement(s)
submitted to Beneficiary and relied upon by Beneficiary
in making the Loan, and which change Beneficiary
reasonably determines will have a material adverse
effect on (aa) the business, operations or condition of
the Property; or (bb) the ability of Borrower or Trustor
to pay or perform Borrower's or Trustor's obligations in
accordance with the terms of the Note, this Deed of
Trust, and the other Loan Documents.
(vii) KEY PERSON OR ENTITY. The retirement, death, incapacity
or material reduction in current management authority or
duties, if any, of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇ and Trustor's failure to provide a
substitute or replacement acceptable to Beneficiary
within 30 days after the occurrence of any such event.
25
(viii) GROUND LEASE. If at any time (aa) the Ground Lease is
modified, surrendered or terminated, other than as a
result of the action or inaction of Beneficiary, without
Beneficiary's prior written consent; or (bb) a default
shall occur under the Ground Lease that is not cured
upon the earlier to occur of fifteen (15) days after the
occurrence of the default or one-half of the time
provided for cure for such default in the Ground Lease
taking into consideration extensions to the cure period
obtained from the Landlord.
b. AUTOMATIC DEFAULT. An "Automatic Default" shall occur
automatically upon the occurrence of any of the following
events:
(i) VOLUNTARY BANKRUPTCY, INSOLVENCY, DISSOLUTION. (aa)
Borrower's filing a petition for relief under the
Bankruptcy Reform Act of 1978, as amended or recodified
("Bankruptcy Code"), or under any other present or
future state or federal law regarding bankruptcy,
reorganization or other relief to debtors (collectively,
"Debtor Relief Law"); or (bb) Borrower's filing any
pleading in any involuntary proceeding under the
Bankruptcy Code or other Debtor Relief Law which admits
the jurisdiction of a court to regulate Borrower or the
Property or the petition's material allegations
regarding Borrower's insolvency; or (cc) Borrower's
making a general assignment for the benefit of
creditors; or (dd) Borrower's applying for, or the
appointment of, a receiver, trustee, custodian or
liquidation of Borrower or any of its property; or (ee)
the filing by Borrower of a petition seeking the
liquidation or dissolution of Borrower or the
commencement of any other procedure to liquidate or
dissolve Borrower.
(ii) INVOLUNTARY BANKRUPTCY. Borrower's failure to effect a
full dismissal of any involuntary petition under the
Bankruptcy Code or other Debtor Relief Law that is filed
against Borrower or in any way restrains or limits
Borrower or Beneficiary regarding the Loan or the
Property, prior to the earlier of the entry of any order
granting relief sought in the involuntary petition or 60
days after the date of filing of the petition.
(iii) PARTNERS, GUARANTORS. The occurrence of an event
specified in Sections (i) or (ii) as to Trustor, any
general partner or managing member of Borrower or
Trustor, or any guarantor or other person or entity in
any manner obligated to Beneficiary under the Loan
Documents; provided, however, in the case of an event
specified in Section (i) or (ii) as to any guarantor,
Beneficiary may cure such Default by replacing such
guarantor within thirty (30) days after the occurrence
of such event with a substitute guarantor whose
creditworthiness and real estate experience and skills
are comparable to those of the original guarantor
(measured as of the date of this Deed of Trust) and who
is otherwise acceptable to Beneficiary, provided that
such substitute guarantor executes and delivers a
Limited Guaranty in form and substance similar to the
existing Limited Guaranty executed by the applicable
guarantor within such thirty (30) day time period.
7.2 ACCELERATION. Upon the occurrence of an Optional Default, Beneficiary
may, at its option, declare all sums owing to Beneficiary under the Note
and the other Loan Documents immediately due and payable. Upon the
occurrence of an Automatic Default, all sums owing to Beneficiary under
the Note and the other Loan Documents shall automatically become
immediately due and payable.
7.3 RIGHTS AND REMEDIES. In addition to the rights and remedies in Section
7.2 above, at any time after a Default, Beneficiary shall have all of
the following rights and remedies:
a. ENTRY ON PROPERTY. With or without notice, and without releasing
Trustor from any Secured Obligation, and without becoming a
mortgagee in possession, to enter upon the Property from time to
time and to do such acts and things as Beneficiary or Trustee
deem necessary or desirable in order to inspect, investigate,
assess and protect the security hereof or to cure any Default,
including, without
26
limitation: (i) to take and possess all documents, books,
records, papers and accounts of Trustor, Borrower or the then
owner of the Property which relate to the Property; (ii) to
make, terminate, enforce or modify leases of the Property upon
such terms and conditions as Beneficiary deems proper; (iii) to
make repairs, alterations and improvements to the Property
necessary, in Trustee's or Beneficiary's sole judgment, to
protect or enhance the security hereof; (iv) to appear in and
defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or
Trustee hereunder; (v) to pay, purchase, contest or compromise
any encumbrance, charge, lien or claim of lien which, in the
sole judgment of either Beneficiary or Trustee, is or may be
senior in priority hereto, the judgment of Beneficiary or
Trustee being conclusive as between the parties hereto; (vi) to
obtain insurance; (vii) to pay any premiums or charges with
respect to insurance required to be carried hereunder; (viii) to
obtain a court order to enforce Beneficiary's right to enter and
inspect the Property for Hazardous Materials, in which regard
the decision of Beneficiary as to whether there exists a release
or threatened release of Hazardous Materials onto the Property
shall be deemed reasonable and conclusive as between the parties
hereto; (ix) to have a receiver appointed pursuant to applicable
law to enforce Beneficiary's rights to enter and inspect the
Property for Hazardous Materials; and/or (x) to employ legal
counsel, accountants, engineers, consultants, contractors and
other appropriate persons to assist them;
b. APPOINTMENT OF RECEIVER. With or without notice or hearing, to
apply to a court of competent jurisdiction for and obtain
appointment of a receiver, trustee, liquidator or conservator of
the Property, for any purpose, including, without limitation, to
enforce Beneficiary's right to collect Payments and to enter on
and inspect the Property for Hazardous Materials, as a matter of
strict right and without regard to: (i) the adequacy of the
security for the repayment of the Secured Obligations; (ii) the
existence of a declaration that the Secured Obligations are
immediately due and payable; (iii) the filing of a notice of
default; or (iv) the solvency of Trustor, Borrower or any
guarantor or other person or entity in any manner obligated to
Beneficiary under the Loan Documents;
c. JUDICIAL FORECLOSURE; INJUNCTION. To commence and maintain an
action or actions in any court of competent jurisdiction to
foreclose this instrument as a mortgage or to obtain specific
enforcement of the covenants of Trustor hereunder, and Trustor
agrees that such covenants shall be specifically enforceable by
injunction or any other appropriate equitable remedy and that
for the purposes of any suit brought under this subparagraph,
Trustor waives the defense of laches and any applicable statute
of limitations and agrees that in the event of sale of the
Property by judicial foreclosure, the redemption period after
sale shall be one month in lieu of nine months;
d. NONJUDICIAL FORECLOSURE. To execute a written notice of such
Default and of the election to cause the Property to be sold to
satisfy the Secured Obligations, Trustee shall give and record
such notice as the law then requires as a condition precedent to
a trustee's sale. When the minimum period of time required by
law after such notice has elapsed, Trustee, without notice to or
demand upon Trustor except as required by law, shall sell the
Property at the time and place of sale fixed by it in the notice
of sale, at one or several sales, either as a whole or in
separate parcels and in such manner and order, all as
Beneficiary in its sole discretion may determine, at public
auction to the highest bidder for cash, in lawful money of the
United States, payable at time of sale. Neither Trustor nor any
other person or entity other than Beneficiary shall have the
right to direct the order in which the Property is sold. Subject
to requirements and limits imposed by law, Trustee may, from
time to time postpone sale of all or any portion of the Property
by public announcement at such time and place of sale, and from
time to time may postpone the sale by public announcement at the
time and place fixed by the preceding postponement. A sale of
less than the whole of the Property or any defective or
irregular sale made hereunder shall not exhaust the power of
sale provided for herein. Trustee shall deliver to the purchaser
at such sale a deed conveying the Property or portion thereof so
sold, but without any covenant or warranty, express or implied.
The recitals in the deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. The only right of
redemption from the Trustee's sale proceeding is that an omitted
junior encumbrance without actual notice or knowledge of the
Trustee's sale may redeem the
27
trust real estate by petitioning the district court in the
county where the Trustee's sale was held and obtaining a
judgement authorizing redemption and setting the terms thereof
in compliance with ▇▇▇▇ ▇▇▇▇, Section 39-5-18 (1987), provided
that such redemption is then completed within 1 month after
entry of judgement authorizing such redemption. Any person,
including Trustee, Trustor or Beneficiary may purchase at the
sale;
Upon sale of the Property at any judicial or nonjudicial
foreclosure, Beneficiary may credit bid (as determined by
Beneficiary in its sole and absolute discretion) all or any
portion of the Secured Obligations. In determining such credit
bid, Beneficiary may, but is not obligated to, take into account
all or any of the following: (i) appraisals of the Property as
such appraisals may be discounted or adjusted by Beneficiary in
its sole and absolute underwriting discretion; (ii) expenses and
costs incurred by Beneficiary with respect to the Property prior
to foreclosure; (iii) expenses and costs which Beneficiary
anticipates will be incurred with respect to the Property after
foreclosure, but prior to resale, including, without limitation,
costs of structural reports and other due diligence, costs to
carry the Property prior to resale, costs of resale (e.g.
commissions, attorneys' fees, and taxes), costs of any Hazardous
Materials clean-up and monitoring, costs of deferred
maintenance, repair, refurbishment and retrofit, costs of
defending or settling litigation affecting the Property, and
lost opportunity costs (if any), including the time value of
money during any anticipated holding period by Beneficiary; (iv)
declining trends in real property values generally and with
respect to properties similar to the Property; (v) anticipated
discounts upon resale of the Property as a distressed or
foreclosed property; (vi) the fact of additional collateral (if
any), for the Secured Obligations; AND (vii) such other factors
or matters that Beneficiary (in its sole and absolute
discretion) deems appropriate. In regard to the above, Trustor
acknowledges and agrees that: (viii) Beneficiary is not required
to use any or all of the foregoing factors to determine the
amount of its credit bid; (ix) this paragraph does not impose
upon Beneficiary any additional obligations that are not imposed
by law at the time the credit bid is made; (x) the amount of
Beneficiary's credit bid need not have any relation to any
loan-to-value ratios specified in the Loan Documents or
previously discussed between Trustor and Beneficiary; and (xi)
Beneficiary's credit bid may be (at Beneficiary's sole and
absolute discretion) higher or lower than any appraised value of
the Property;
e. MULTIPLE FORECLOSURES. To resort to and realize upon the
security hereunder and any other security now or later held by
Beneficiary concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken
nonjudicial proceedings, or both, and to apply the proceeds
received upon the Secured Obligations all in such order and
manner as Trustee and Beneficiary or either of them determine in
their sole discretion;
f. RIGHTS TO COLLATERAL. To exercise all rights Trustee or
Beneficiary may have with respect to the Collateral under this
Deed of Trust, the UCC or otherwise at law; and
g. OTHER RIGHTS. To exercise such other rights as Trustee or
Beneficiary may have at law or in equity or pursuant to the
terms and conditions of this Deed of Trust or any of the other
Loan Documents.
In connection with any sale or sales hereunder, Beneficiary may elect to
treat any of the Property which consists of a right in action or which
is property that can be severed from the Property (including, without
limitation, any improvements forming a part thereof) without causing
structural damage thereto as if the same were personal property or a
fixture, as the case may be, and dispose of the same in accordance with
applicable law, separate and apart from the sale of the Property. Any
sale of Collateral hereunder shall be conducted in any manner permitted
by the UCC.
7.4 APPLICATION OF FORECLOSURE SALE PROCEEDS. If any foreclosure sale is
effected, Trustee shall apply the proceeds of such sale in the following
order of priority: FIRST, to the costs, fees and expenses of sale;
SECOND, to the payment of the Secured Obligations which are secured by
this Deed of Trust, in such order as Beneficiary shall determine in its
sole discretion; THIRD, to satisfy the outstanding balance of
28
obligations secured by any junior liens or encumbrances in the order of
their priority; and FOURTH, to the Trustor or the Trustor's successor in
interest, or in the event the Property has been sold or transferred to
another, to the vested owner of record at the time of the Trustee's
sale.
7.5 WAIVER OF MARSHALING RIGHTS. Trustor, for itself and for all parties
claiming through or under Trustor, and for all parties who may acquire a
lien on or interest in the Property, hereby waives all rights to have
the Property and/or any other property, including, without limitation,
the Collateral, which is now or later may be security for any Secured
Obligation, marshaled upon any foreclosure of this Deed of Trust or on a
foreclosure of any other security for any of the Secured Obligations.
7.6 NO CURE OR WAIVER. Neither Beneficiary's nor Trustee's nor any
receiver's entry upon and taking possession of all or any part of the
Property, nor any collection of rents, issues, profits, insurance
proceeds, condemnation proceeds or damages, other security or proceeds
of other security, or other sums, nor the application of any collected
sum to any Secured Obligation, nor the exercise of any other right or
remedy by Beneficiary or Trustee or any receiver shall cure or waive any
Default or notice of default under this Deed of Trust, or nullify the
effect of any notice of default or sale (unless all Secured Obligations
then due have been paid or performed and Trustor has cured all other
Defaults hereunder), or impair the status of the security, or prejudice
Beneficiary or Trustee in the exercise of any right or remedy, or be
construed as an affirmation by Beneficiary of any tenancy, lease or
option or a subordination of the lien of this Deed of Trust.
7.7 PAYMENT OF COSTS, EXPENSES AND ATTORNEYS' FEES. Trustor agrees to pay to
Beneficiary immediately and upon demand all costs and expenses incurred
by Trustee and Beneficiary in the enforcement of the terms and
conditions of this Deed of Trust (including, without limitation,
statutory trustee's fees, court costs and attorneys' fees, whether
incurred in litigation or not) with interest from the date of
expenditure until said sums have been paid at the rate of interest
applicable to the principal balance of the Note as specified therein.
7.8 POWER TO FILE NOTICES AND CURE DEFAULTS. Trustor hereby irrevocably
appoints Beneficiary and its successors and assigns, as its
attorney-in-fact, which agency is coupled with an interest, to perform
any obligation of Trustor hereunder (to the extent Trustor has not
performed the same) upon the occurrence of an event, act or omission
which, with notice or passage of time or both, would constitute a
Default, PROVIDED, HOWEVER, that: (a) Beneficiary as such
attorney-in-fact shall only be accountable for such funds as are
actually received by Beneficiary; and (b) Beneficiary shall not be
liable to Trustor or any other person or entity for any failure to act
under this Section.
7.9 REMEDIES CUMULATIVE. All rights and remedies of Beneficiary and Trustee
under this Deed of Trust and the other Loan Documents are cumulative and
are in addition to all rights and remedies provided by applicable law
(including specifically that of foreclosure of this Deed of Trust as
though it were a mortgage). Beneficiary may enforce any one or more
remedies or rights under the Loan Documents either successively or
concurrently.
ARTICLE 8. MISCELLANEOUS PROVISIONS
8.1 ADDITIONAL PROVISIONS. The Loan Documents contain or incorporate by
reference the entire agreement of the parties with respect to matters
contemplated herein and supersede all prior negotiations. The Loan
Documents grant further rights to Beneficiary and contain further
agreements and affirmative and negative covenants by Trustor which apply
to this Deed of Trust and to the Property and such further rights and
agreements are incorporated herein by this reference. THE OBLIGATIONS
AND LIABILITIES OF TRUSTOR UNDER THIS DEED OF TRUST AND THE OTHER LOAN
DOCUMENTS ARE SUBJECT TO THE PROVISIONS OF THE SECTION IN THE NOTE
ENTITLED "BORROWER'S LIABILITY."
8.2 NON-WAIVER. By accepting payment of any amount secured hereby after its
due date or late performance of any other Secured Obligation,
Beneficiary shall not waive its right against any person obligated
directly or
29
indirectly hereunder or on any Secured Obligation, either to require
prompt payment or performance when due of all other sums and obligations
so secured or to declare default for failure to make such prompt payment
or performance. No exercise of any right or remedy by Beneficiary or
Trustee hereunder shall constitute a waiver of any other right or remedy
herein contained or provided by law. No failure by Beneficiary or
Trustee to exercise any right or remedy hereunder arising upon any
Default shall be construed to prejudice Beneficiary's or Trustee's
rights or remedies upon the occurrence of any other or subsequent
Default. No delay by Beneficiary or Trustee in exercising any such right
or remedy shall be construed to preclude Beneficiary or Trustee from the
exercise thereof at any time while that Default is continuing. No notice
to nor demand on Trustor shall of itself entitle Trustor to any other or
further notice or demand in similar or other circumstances.
8.3 CONSENTS AND APPROVALS. Wherever Beneficiary's consent, approval,
acceptance or satisfaction is required under any provision of this Deed
of Trust or any of the other Loan Documents, such consent, approval,
acceptance or satisfaction shall not be unreasonably withheld,
conditioned or delayed by Beneficiary unless such provision expressly so
provides.
8.4 PERMITTED CONTESTS. After prior written notice to Beneficiary, Trustor
may contest, by appropriate legal or other proceedings conducted in good
faith and with due diligence, the amount, validity or application, in
whole or in part, of any lien, levy, tax or assessment, or any lien of
any laborer, mechanic, materialman, supplier or vendor, or the
application to Trustor or the Property of any law or the validity
thereof, the assertion or imposition of which, or the failure to pay
when due, would constitute a Default; PROVIDED that (a) Trustor pursues
the contest diligently, in a manner which Beneficiary determines is not
prejudicial to Beneficiary, and does not impair the lien of this Deed of
Trust; (b) the Property, or any part hereof or estate or interest
therein, shall not be in any danger of being sold, forfeited or lost by
reason of such proceedings; (c) in the case of the contest of any law or
other legal requirement, Beneficiary shall not be in any danger of any
civil or criminal liability; and (d) if required by Beneficiary, Trustor
deposits with Beneficiary any funds or other forms of assurance
(including a bond or letter of credit) satisfactory to Beneficiary to
protect Beneficiary from the consequences of the contest being
unsuccessful. Trustor's right to contest pursuant to the terms of this
provision shall in no way relieve Trustor or Borrower of its obligations
under the Loan or to make payments to Beneficiary as and when due.
8.5 FURTHER ASSURANCES. Trustor shall, upon demand by Beneficiary or
Trustee, execute, acknowledge (if appropriate) and deliver any and all
documents and instruments and do or cause to be done all further acts
reasonably necessary or appropriate to effectuate the purposes of the
Loan Documents and to perfect any assignments contained therein.
8.6 ATTORNEYS' FEES. If any legal action, suit or proceeding is commenced
between Trustor and Beneficiary regarding their respective rights and
obligations under this Deed of Trust or any of the other Loan Documents,
the prevailing party shall be entitled to recover, in addition to
damages or other relief, costs and expenses, reasonable attorneys' fees
and court costs (including, without limitation, expert witness fees). As
used herein the term "prevailing party" shall mean the party which
obtains the principal relief it has sought, whether by compromise
settlement or judgment. If the party which commenced or instituted the
action, suit or proceeding shall dismiss or discontinue it without the
concurrence of the other party, such other party shall be deemed the
prevailing party.
8.7 TRUSTOR AND BENEFICIARY DEFINED. The term "Trustor" includes both the
original Trustor and any subsequent owner or owners of any of the
Property, and the term "Beneficiary" includes the original Beneficiary
and any future owner or holder, including assignees, pledges and
participants, of the Note or any interest therein.
8.8 DISCLAIMERS.
a. RELATIONSHIP. The relationship of Trustor and Beneficiary under
this Deed of Trust and the other Loan Documents is, and shall at
all times remain, solely that of borrower and lender; and
Beneficiary
30
neither undertakes nor assumes any responsibility or duty to
Trustor or to any third party with respect to the Property.
Notwithstanding any other provisions of this Deed of Trust and
the other Loan Documents: (i) Beneficiary is not, and shall not
be construed to be, a partner, joint venturer, member, alter
ego, manager, controlling person or other business associate or
participant of any kind of Trustor, and Beneficiary does not
intend to ever assume such status; (ii) Beneficiary's activities
in connection with this Deed of Trust and the other Loan
Documents shall not be "outside the scope of activities of a
lender of money" within the meaning of California Civil Code
Section 3434, as amended or recodified from time to time, and
Beneficiary does not intend to ever assume any responsibility to
any person for the quality, suitability, safety or condition of
the Property; and (iii) Beneficiary shall not be deemed
responsible for or a participant in any acts, omissions or
decisions of Trustor.
b. NO LIABILITY. Beneficiary shall not be directly or indirectly
liable or responsible for any loss, claim, cause of action,
liability, indebtedness, damage or injury of any kind or
character to any person or property arising from any
construction on, or occupancy or use of, the Property, whether
caused by or arising from: (i) any defect in any building,
structure, grading, fill, landscaping or other improvements
thereon or in any on-site or off-site improvement or other
facility therein or thereon; (ii) any act or omission of Trustor
or any of Trustor's agents, employees, independent contractors,
licensees or invitees; (iii) any accident in or on the Property
or any fire, flood or other casualty or hazard thereon; (iv) the
failure of Trustor or any of Trustor's licensees, employees,
invitees, agents, independent contractors or other
representatives to maintain the Property in a safe condition; or
(v) any nuisance made or suffered on any part of the Property.
8.9 SEVERABILITY. If any term of this Deed of Trust or any other Loan
Document, or the application thereof to any person or circumstances,
shall, to any extent, be invalid or unenforceable, the remainder of this
Deed of Trust or such other Loan Document, or the application of such
term to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each term
of this Deed of Trust or such other Loan Document shall be valid and
enforceable to the fullest extent permitted by law.
8.10 RELATIONSHIP OF ARTICLES. The rights, remedies and interests of
Beneficiary under the deed of trust established by Article 1 and the
security agreement established by Article 4 are independent and
cumulative, and there shall be no merger of any lien created by the deed
of trust with any security interest created by the security agreement.
Beneficiary may elect to exercise or enforce any of its rights, remedies
or interests under either or both the deed of trust or the security
agreement as Beneficiary may from time to time deem appropriate. The
absolute assignment of rents and leases established by Article 3 is
similarly independent of and separate from the deed of trust and the
security agreement.
8.11 MERGER. No merger shall occur as a result of Beneficiary's acquiring any
other estate in, or any other lien on, the Property unless Beneficiary
consents to a merger in writing.
8.12 OBLIGATIONS OF TRUSTOR, JOINT AND SEVERAL. If more than one person has
executed this Deed of Trust as "Trustor", the obligations of all such
persons hereunder shall be joint and several.
8.13 SEPARATE AND COMMUNITY PROPERTY. Any married person who executes this
Deed of Trust as a "Trustor" agrees that any money judgment which
Beneficiary or Trustee obtains pursuant to the terms of this Deed of
Trust or any other obligation of that married person secured by this
Deed of Trust may be collected by execution upon any separate property
or community property of that person.
8.14 INTEGRATION; INTERPRETATION. The Loan Documents contain or expressly
incorporate by reference the entire agreement of the parties with
respect to the matters contemplated therein and supersede all prior
negotiations or agreements, written or oral. The Loan Documents shall
not be modified except by written instrument executed by all parties.
Any reference in any of the Loan Documents to the Land, the Ground
Lease, the Property or the Collateral shall include all or any part of,
or interest in, the Land, the
31
Ground Lease, the Property or the Collateral. Any reference to the Loan
Documents includes any amendments, renewals or extensions now or
hereafter approved by Beneficiary in writing. When the identity of the
parties or other circumstances make it appropriate, the masculine gender
includes the feminine and/or neuter, and the singular number includes
the plural.
8.15 CAPITALIZED TERMS. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Note.
8.16 SUCCESSORS IN INTEREST. The terms, covenants, and conditions contained
herein and in the other Loan Documents shall be binding upon and inure
to the benefit of the heirs, successors and assigns of the parties. The
foregoing sentence shall not be construed to permit Trustor to assign
the Loan except as otherwise permitted under the Note or the other Loan
Documents.
8.17 GOVERNING LAW. This Deed of Trust was accepted by Beneficiary in the
state of California and the proceeds of the Note secured hereby were
disbursed from the state of California, which state the parties agree
has a substantial relationship to the parties and to the underlying
transaction embodied hereby. Accordingly, in all respects, including,
without limiting the generality of the foregoing, matters of
construction, validity, enforceability and performance, this Deed of
Trust, the Note and the other Loan Documents and the obligations arising
hereunder and thereunder shall be governed by, and construed in
accordance with, the laws of the state of California applicable to
contracts made and performed in such state and any applicable law of the
United States of America, except that at all times the provisions for
enforcement of Beneficiary's STATUTORY POWER OF SALE and all other
remedies granted hereunder and the creation, perfection and enforcement
of the security interests created pursuant hereto and pursuant to the
other Loan Documents in any Collateral which is located in the state
where the Property is located shall be governed by and construed
according to the law of the state where the Property is located. Except
as provided in the immediately preceding sentence, Trustor hereby
unconditionally and irrevocably waives, to the fullest extent permitted
by law, any claim to assert that the law of any jurisdiction other than
California governs this Deed of Trust, the Note and other Loan
Documents.
8.18 CONSENT TO JURISDICTION. Trustor irrevocably submits to the jurisdiction
of: (a) any state or federal court sitting in the state of California
over any suit, action, or proceeding, brought by Trustor against
Beneficiary, arising out of or relating to this Deed of Trust, the Note
or the Loan; (b) any state or federal court sitting in the state where
the Property is located or the state in which Trustor's principal place
of business is located over any suit, action or proceeding, brought by
Beneficiary against Trustor, arising out of or relating to this Deed of
Trust, the Note or the Loan; and (c) any state court sitting in the
county of the state where the Property is located over any suit, action,
or proceeding, brought by Beneficiary to exercise its STATUTORY POWER OF
SALE under this Deed of Trust or any action brought by Beneficiary to
enforce its rights with respect to the Collateral. Trustor irrevocably
waives, to the fullest extent permitted by law, any objection that
Trustor may now or hereafter have to the laying of venue of any such
suit, action, or proceeding brought in any such court and any claim that
any such suit, action, or proceeding brought in any such court has been
brought in an inconvenient forum.
8.19 EXHIBITS. EXHIBIT A is incorporated into this Deed of Trust by this
reference.
8.20 ADDRESSES: REQUEST FOR NOTICE. All notices and other communications that
are required or permitted to be given to a party under this Deed of
Trust or the other Loan Documents shall be in writing, refer to the Loan
number, and shall be sent to such party, either by personal delivery, by
overnight delivery service, by certified first class mail, return
receipt requested, or by facsimile transmission to the addressee or
facsimile number below. All such notices and communications shall be
effective upon receipt of such delivery or facsimile transmission. The
addresses of the parties are set forth on page 1 of this Deed of Trust
and the facsimile numbers for the parties are as follows:
32
BENEFICIARY: TRUSTEE:
▇▇▇▇▇ FARGO BANK, N.A. LAWYERS TITLE INSURANCE CORPORATION
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇ FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
TRUSTOR:
PLAZA SANTA ▇▇ ▇▇ LLC
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
Trustor's principal place of business is at the address set forth on
page 1 of this Deed of Trust.
Any Trustor whose address is set forth on page 1 of this Deed of Trust
hereby requests that a copy of notice of default and notice of sale be
delivered to it at that address. Failure to insert an address shall
constitute a designation of Trustor's last known address as the address
for such notice. Any party shall have the right to change its address
for notice hereunder to any other location within the continental United
States by giving 30 days notice to the other parties in the manner set
forth above.
8.21 COUNTERPARTS. This Deed of Trust may be executed in any number of
counterparts, each of which, when executed and delivered, will be deemed
an original and all of which taken together, will be deemed to be one
and the same instrument.
8.22 WAIVER OF JURY TRIAL. BENEFICIARY AND TRUSTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS DEED OF TRUST OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF BENEFICIARY OR TRUSTOR. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO ENTER INTO THIS
DEED OF TRUST.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and
year set forth above.
"TRUSTOR"
PLAZA SANTA ▇▇ ▇▇ LLC, a New Mexico
limited liability company
By: PSF II Manager, Inc., a New Mexico
corporation, its managing member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------
Title: President
---------------------------
(ALL SIGNATURES MUST BE ACKNOWLEDGED) - See attached
33
STATE OF ILLINOIS )
) ss.
COUNTY OF ▇▇▇▇ )
On this 18 day of November, 2002, before me, a Notary Public in and for the
State and County aforesaid, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, who is to me
known to be the person and who, being duly sworn, acknowledged to me that he is
the President of PSF II Manager, Inc., a New Mexico corporation, and that he is
authorized to and has signed the foregoing document on behalf of said
corporation.
Subscribed and sworn to before me on the day, month and year first above
set forth above.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Notary Public
My Commission Expires:
03/01/06
---------------------
OFFICIAL SEAL
▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES: 03/01/06
Loan No. 31-0900141A
EXHIBIT A
DESCRIPTION OF LAND
Exhibit A to LEASEHOLD DEED OF TRUST AND ABSOLUTE ASSIGNMENT OF RENTS AND LEASES
AND SECURITY AGREEMENT (AND FIXTURE FILING) ("Deed of Trust") between PLAZA
SANTA ▇▇ ▇▇, LLC, a New Mexico limited liability company, as "Trustor", LAWYERS
TITLE INSURANCE CORPORATION, as "Trustee", and ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as "Beneficiary".
DESCRIPTION OF LAND. The Land referred to in this Deed of Trust is situated in
the county of Santa Fe, state of New Mexico and is described as follows:
Tracts A-l and A-2, all as shown on plat of survey entitled "Dedication
Plat & Land Split Tracts A-1 and ▇-▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇, March 2000" recorded July 20, 2000 in Plat Book 449, page 27
as Document No. 1123,597, records of Santa Fe County, New Mexico.
EXHIBIT A
1