Exhibit 10.9
RECORDING REQUESTED BY
WHEN RECORDED MAIL TO
Name Michael Peskowitz, Esq.
Rosenman & Colin LLP
Mailing Address 575 Madison Avenue
City, State, New York, New York 10022
Zip Code
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SPACE ABOVE THIS LINE RESERVED FOR RECORDERS' USE
San Ramon Deed of Trust
(Second Deed of Trust)
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DEED OF TRUST, ASSIGNMENT OF LEASES, SECURITY AGREEMENT
AND FIXTURE FILING
MARRIOTT HOTEL PROPERTIES II LIMITED PARTNERSHIP ("Grantor")
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- to -
COMMONWEALTH LAND TITLE INSURANCE COMPANY OF CALIFORNIA
("Trustee"), as Trustee
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For the benefit of
NOMURA ASSET CAPITAL CORPORATION ("Beneficiary")
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Dated: As of September 23, 1996
in the amount of
$43,500,000
Relating to Premises located in
County of Contra Costa, State of California
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After recording return to:
ROSENMAN & COLIN LLP
575 Madison Avenue
New York, New York 10022
Attention: Michael Peskowitz, Esq.
DEED OF TRUST, ASSIGNMENT OF LEASES, SECURITY AGREEMENT
AND FIXTURE FILING
DEED OF TRUST, ASSIGNMENT OF LEASES, SECURITY AGREEMENT AND FIXTURE
FILING (this "Deed of Trust"), dated as of September 23, 1996, by MARRIOTT HOTEL
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PROPERTIES II LIMITED PARTNERSHIP, a Delaware limited partnership, having its
principal office at 10400 Fernwood Road, Bethesda, Maryland 20817 ("Grantor") in
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favor of COMMONWEALTH LAND TITLE INSURANCE COMPANY OF CALIFORNIA, a California
corporation, having an address at 1855 Gateway Boulevard, Suite 270, Concord,
California 94520 ("Trustee"), as trustee for the use and benefit of NOMURA ASSET
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CAPITAL CORPORATION, a Delaware corporation, having its principal office at Two
World Financial Center, Building B, 21st Floor, New York, New York 10281-1198
("Beneficiary").
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W I T N E S S E T H :
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WHEREAS:
A. Pursuant to that certain lease, dated June 30, 1986 between
Sunset Development Company, formerly known as Granada Sales, Inc., as landlord
(including any successors and assigns thereof, "Fee Owner"), and Grantor,
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successor in interest to Marriott Corporation, now known as Host Marriott
Corporation ("Host Marriott"), as tenant (such lease being more particularly
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described on Schedule 1 annexed hereto, and as the same may hereafter be
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modified, amended, restated, consolidated, replaced or supplemented from time to
time, the "Ground Lease"), Fee Owner demised and leased to Grantor all that
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certain parcel of real property (the "Land") located in the County of Contra
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Costa, State of California (the "State"), as more particularly described in
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Exhibit A annexed hereto;
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B. Host Marriott constructed on the Land a building and other
improvements that are currently operated as a Marriott hotel (which, together
with all other buildings and other improvements now or hereafter located on such
parcel of Land are hereinafter referred to as the "Improvements"; the Ground
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Lease and the leasehold estate created thereby, together with such Improvements,
being hereinafter collectively referred to as the "Premises");
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C. Pursuant to that certain Loan Agreement (the "Loan Agreement"),
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dated as of the date hereof between Santa Clara Marriott Hotel Limited
Partnership ("SCLP") and Beneficiary, Beneficiary is making a loan in the
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original principal amount of $43,500,000.00 to SCLP (the "SC Loan");
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D. Grantor is the owner of 50% of the limited partnership interests
in SCLP and derives substantial benefit from the SC Loan;
E. The SC Loan is evidenced by that certain Secured Promissory Note
dated as of the date hereof, made by Grantor and SCLP in favor of Beneficiary in
the original principal amount
of $43,500,000.00 (together with all extensions, renewals, substitutions,
restatements, severances, splitters, consolidations, amendments and
modifications thereof being hereinafter referred to as the "Note");
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F. The Note is secured by, inter alia, this Deed of Trust and certain
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other mortgages, deeds of trust and security deeds (collectively, the "Other SC
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Mortgages") on other real property owned or leased by Grantor or SCLP, which
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Other SC Mortgages are more particularly described in Exhibit B annexed hereto;
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G. The rights of Beneficiary and the obligations of Grantor under
this Deed of Trust are expressly subject to, and not in duplication of, the
rights and obligations of the parties to that certain Deed of Trust of even date
herewith given by Grantor to Trustee for the benefit of Beneficiary (the "MHP
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Mortgage") to secure the obligations of Grantor under those certain Secured
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Promissory Notes made to the order of Beneficiary in the original principal
amounts of $195,405,904 and $27,094,096 pursuant to that certain loan agreement
of even date herewith between Grantor, as borrower, and Beneficiary, as lender
(the "MHP Loan Agreement"). The MHP Mortgage is intended to be recorded in the
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official records of the County of Contra Costa, State of California immediately
prior to the recordation of this Deed of Trust. Beneficiary acknowledges that
there shall be no duplication of payment, collection or any other action
permitted to be taken by Beneficiary hereunder or under the other SC Transaction
Documents (as hereinafter defined) with any payment, collection or other action
permitted to be taken by the beneficiary from time to time under the MHP
Mortgage and the other MHP Transaction Documents (such term as used herein being
identical to the term "Transaction Documents" as used in the MHP Mortgage) with
respect to the Mortgaged Property (as hereinafter defined);
H. To induce Beneficiary to make the SC Loan and to secure payment of
the Note, together with interest thereon, Grantor has agreed to the execution
and delivery of this Deed of Trust; and
I. Beneficiary accepts the benefits of this Deed of Trust.
GRANTING CLAUSES
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained and other good and valuable consideration, the receipt
and legal sufficiency whereof are hereby acknowledged, and as an inducement to
Beneficiary to make the SC Loan, and to secure the payment of the aggregate
principal amount of the Note of FORTY THREE MILLION FIVE HUNDRED THOUSAND AND
00/100 DOLLARS ($43,500,000), or so much thereof as may have been advanced to
SCLP, together with all interest thereon, additional amounts payable under the
Loan Agreement, including without limitation, the Yield Maintenance Premium (as
such term is defined in the Loan Agreement), if any, and all other sums which
may or shall become due hereunder or under the Note or any of the other
documents evidencing, securing or executed in connection with the SC Loan (such
other documents, including, without limitation, the Loan Agreement, the Other SC
Mortgages and that certain Assignment of Leases, Rents and Profits of
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even date herewith given by Grantor to Beneficiary with respect to the Premises
(as such assignment may, from time to time, be modified, amended, extended,
restated, severed, split, consolidated or supplemented, the "Assignment") and
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similar Assignments of Leases, Rents and Profits given in connection with the
Other SC Mortgages, together with the Note and this Deed of Trust (as any of the
same may, from time to time, be modified, amended, extended, restated, severed,
split, consolidated or supplemented) being hereinafter collectively referred to
as the "SC Transaction Documents") and including the costs and expenses of
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enforcing any provision of the Note, this Deed of Trust or any of the other SC
Transaction Documents (all such sums being hereinafter collectively referred to
as the "Debt"), and in order to charge with such performance and with such
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payments the Premises and other property hereinafter described and the rents,
revenues, issues, income and profits thereof, Grantor has created a security
interest in and DOES HEREBY WARRANT, PLEDGE, TRANSFER, SET OVER, ASSIGN,
HYPOTHECATE, GIVE, GRANT, ALIEN, ENFEOFF, BARGAIN, SELL, CONVEY AND CONFIRM UNTO
TRUSTEE, AND ITS SUCCESSORS AND ASSIGNS, IN TRUST WITH POWER OF SALE, FOR THE
BENEFIT OF BENEFICIARY, all right, title, estate and interest of Grantor now
owned, or hereafter acquired, in and to the Premises,
TOGETHER WITH all right, title, estates and interest of Grantor, if
any, now owned, or hereafter acquired, in and to the following property, rights
and interests (the Premises, together with such property, rights and interests,
being hereinafter collectively referred to as the "Mortgaged Property"):
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(a) all easements, rights-of-way, strips and gores of land,
land, streets, ways, alleys, passages, sewer rights, waters, water
courses, water rights and powers, and all estates, rights, title,
interests, privileges, liberties, tenements, hereditaments, and
appurtenances of any nature whatsoever, in any way belonging, relating
or pertaining to the Premises (including, without limitation, gas, oil
and mineral rights, air rights, development rights and any other
rights, however denominated, to construct floor area on the Land), and
all right, title and interest of Grantor in, including any right to use
and occupy, any land adjacent to the Land, and any land lying in the
bed of any street, road or avenue, open, vacated or proposed, in front
of or adjoining the Land, and any and all sidewalks, drives, curbs,
passageways, streets, spaces and alleys adjacent to or used in
connection with the Premises;
(b) all machinery, apparatus, equipment, fittings, fixtures and
other property of every kind and nature whatsoever owned by Grantor, or
in which Grantor has or shall have an interest (to the extent same can
be mortgaged or an interest therein can be granted if not owned by
Grantor), now or hereafter located upon the Premises or any portion
thereof, or appurtenances thereto, and used in connection with the
present or future operation and occupancy of the Premises or any
portion thereof, and all building equipment, materials and supplies of
any nature whatsoever owned by Grantor, or in which Grantor has or
shall have an interest (to the extent same can be mortgaged or an
interest therein can be granted if not owned by Grantor), now or
hereafter located in or upon the Premises or any portion thereof, and
any building equipment, materials and supplies obtained for use in
connection with the Premises or any portion thereof, and all
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additions, replacements, modifications and alterations of any of the
foregoing, including, but without limiting the generality of the
foregoing, all heating, lighting, incinerating, waste removal and power
equipment, engines, pipes, tanks, motors, conduits, switchboards,
radio, television, security and alarm systems, plumbing, lifting,
cleaning, fire prevention, fire extinguishing, refrigerating,
ventilating, and communications apparatus, air cooling and air
conditioning apparatus, escalators, elevators, ducts and compressors
(collectively, the "Equipment"), which Equipment shall be deemed to be
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part and parcel of the real estate and appropriated to the use of the
real estate and, whether or not affixed or annexed to the Premises,
shall for the purpose of this Deed of Trust be deemed conclusively to
be real estate and mortgaged hereby;
(c) all other furniture, furnishings, decorations, fixtures and
equipment owned by Grantor and now or hereafter installed in, affixed
to, placed upon or used in connection with the Premises or the business
conducted by Grantor thereon, including, without limitation,
communication systems, computer systems, hardware and software,
furniture, carpeting, art work, lighting fixtures, millwork, draperies,
kitchen, restaurant, bar and lounge equipment, laundry equipment, cash
registers, safes, safety deposit boxes, office furniture, athletic and
pool equipment, gift shop equipment, employees' lockers, coat racks,
linens, blankets, pillows and uniforms (to the extent each of the
foregoing shall exist), all present and future "accounts", "equipment",
"inventory" and "general intangibles" (as such terms are defined in the
Uniform Commercial Code as enacted and in effect in the State (the
"Code") relating to the hotel and hotel operations at the Premises,
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excluding, however, (xx) all property subject to written leases between
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the owner/installer of such equipment, as lessor, and Grantor as
lessee, as permitted pursuant to the provisions of the Loan Agreement,
and (yy) to the extent not assignable or mortgageable under State or
local law, alcoholic beverages and licenses to serve alcoholic
beverages at the Premises (collectively, the "Personal Property");
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(d) all awards or payments, and any interest paid or payable
with respect thereto, which may be made with respect to all or any
portion of the Premises, whether from the exercise of right of
condemnation, eminent domain or similar proceedings (including any
transfer made in lieu of the exercise of said right), or from any
taking for public use, or for any other injury to or decrease in the
value of all or any portion of the Premises (including, without
limitation, any awards resulting from a change of grade of streets and
awards for severance damages), all of the foregoing to be held, applied
and paid in accordance with the provisions of this Deed of Trust
(collectively, the "Condemnation Proceeds");
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(e) all proceeds of, and any unearned premiums on, the Policies
(as hereinafter defined) and any other insurance policies covering all
or any portion of the Premises, the Equipment, the Personal Property
and/or the Rents (as hereinafter defined), including, without
limitation, the right to receive and apply the proceeds of any
insurance, judgments, or settlements made in lieu thereof, for damage
to all or any portion of the Premises, the Equipment and/or the
Personal Property, and any interest actually paid with
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respect thereto, all of the foregoing to be held, applied and paid in
accordance with the provisions of this Deed of Trust (collectively, the
"Insurance Proceeds");
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(f) all refunds or rebates of Impositions (as hereinafter
defined), and interest paid or payable with respect thereto
(collectively, the "Refunds");
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(g) all leases and other agreements, if any, affecting the use
or occupancy of all or any portion of the Premises now in effect or
hereafter entered into (including, without limitation, subleases,
licenses, concessions, tenancies and other occupancy agreements
covering or encumbering all or any portion of the Premises), together
with any guarantees, supplements, amendments, modifications, extensions
and renewals of the same, and all additional remainders, reversions,
and other rights and estates appurtenant thereto (collectively, the
"Leases") and absolutely and presently all rents, revenues which
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Grantor generates from the collection of room rates in the course of
its hotel operations, additional rents, percentage rents, revenues,
issues, profits, cash collateral, royalties, income, bonuses, rights
and benefits due and other benefits now or in the future payable under
the Leases, and all security deposits, advance rentals and payments of
similar nature (subject to the rights of lessees or depositors thereof)
held by Grantor in connection with the Leases, if any, and all proceeds
from any and all concessions and license agreements (including, without
limitation, receivables, revenues, rentals and receipts from guest
rooms, meeting rooms, other public facilities, food and beverage
facilities, vending machines, telephone systems, guest laundry and
other items of revenue, receipts, or income identified in the Uniform
Systems of Accounts for Hotels, 8th Revised Edition, International
Association of Hospitality Accountants and Hotel Association of New
York) and all other fees, charges, accounts, payments, income, issues,
proceeds, product, offspring, profits and benefits of any nature
arising from the possession, use, occupancy or enjoyment of the
Mortgaged Property as defined under Section 552(b) of the federal
bankruptcy code (as amended from time to time, and including any
successor legislation thereto, the "Bankruptcy Code"), of any nature
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arising from the possession, use, occupancy or enjoyment of the
Mortgaged Property (collectively, the "Rents"), together with the
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right, but not the obligation, following an Event of Default (as
hereinafter defined) by Grantor under this Deed of Trust or any of the
other SC Transaction Documents, to exercise options, to give consents
and to collect, receive and receipt for the Rents and apply the Rents
to the payment of the Debt and to demand, sue for and recover the Rents
when due and payable;
(h) all contract rights relating to the Mortgaged Property,
including, without limitation, and to the extent permitted by
applicable law, all permits, licenses, certificates, consents,
approvals, authorizations and other documents obtained or to be
obtained in connection with the demolition, construction, use,
operation or maintenance of the Premises or any portion thereof
(collectively, "Permits"), all reciprocal easement, restrictive
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covenants and similar agreements (collectively, "REAs"), all
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appurtenances and utility rights pertaining to the Premises or any
portion thereof, all zoning, land use, air rights and development
agreements, all operating contracts, management agreements, service
contracts, supply and maintenance contracts, equipment leases,
warranties,
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guaranties and all other agreements affecting the Premises or any part
thereof or used in connection with the management or operation thereof
(to the extent assignable pursuant to the provisions of the applicable
instrument or agreement creating or conferring such rights or benefits
or pursuant to applicable law) together with all of the rights,
reversions or equities now or hereafter appurtenant thereto (such
Permits, REAs and other appurtenances, rights, contracts and agreements
collectively, the "Agreements");
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(i) all of the right, title and interest of Grantor in and to
any other property, whether real or personal, tangible or intangible,
owned or held in connection with the Premises or the business conducted
by Grantor thereon, including, without limitation, appraisals,
architectural and engineering plans, specifications and studies
(subject to the proprietary rights of others therein), soil,
environmental and other reports relating to the Premises (subject to
the proprietary rights of others therein), license and contract rights,
accounts receivable, warranties, guaranties, catalogues, tenant lists
(but excluding proprietary guest list information), advertising
materials relating to the Premises or the business conducted by Grantor
thereon, telephone exchange numbers as identified in such materials,
trade names, trademarks and logos relating to the Premises or the
business conducted by Grantor thereon (subject to the rights of
franchisors or licensors) and goodwill relating to the Premises or the
business conducted by Grantor thereon;
(j) all rights of Grantor in and to the Management Agreement (as
defined in the Loan Agreement) applicable to the Premises and any other
similar agreement or license affecting the management or operation of
any part of the Premises, (subject in each case to the provisions
thereof and any limitations set forth therein);
(k) all rights of Grantor in any owner's or member's association
or similar group having responsibility for managing or operating any
part of the Premises;
(l) all claims against any person or entity with respect to any
damage to or loss of the Mortgaged Property, including, without
limitation, damage arising from any defect in or with respect to the
design or construction of the Improvements or the Equipment and any
damage resulting therefrom and all the right to appear in and defend
any action or proceeding brought with respect to the Mortgaged Property
and to commence any action or proceeding to protect the interest of
Beneficiary in the Mortgaged Property;
(m) all deposits or other security or advance payments,
including rental payments made by or on behalf of Grantor to others,
with respect to utility services, cleaning, maintenance, repair and
similar services, refuse removal and sewer service, parking and similar
services and rights, and rental of Equipment relating to or otherwise
used in the operation of the Mortgaged Property;
(n) all options in connection with the purchase, lease,
encumbrance or other disposition of the Mortgaged Property or any
interest therein; and
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(o) any and all other, further or additional rights, title,
estates and interests which Grantor may now own or hereafter acquire,
in and to the Premises and/or the Mortgaged Property, (including
without limitation any right, title , estate or interest Grantor may
now have or hereafter acquire in the fee title to the Land or the
lessor's interests under the Ground Lease) and all renewals,
substitutions and replacements of and all additions and appurtenances
to the Premises and/or the Mortgaged Property constructed, assembled or
placed by Grantor on the Premises, and all conversions of the security
constituted thereby which, immediately upon such acquisition,
construction, assembling, placement or conversion, as the case may be,
and in each such case without any further mortgage, conveyance,
assignment or other act by Grantor, shall become subject to the lien of
this Deed of Trust as fully and completely, and with the same effect,
as though now owned by Grantor, Grantor expressly agreeing that if
Grantor shall at any time acquire any other right, title, estate or
interest in and to the Premises and/or the Mortgaged Property
(including without limitation any right, title , estate or interest
Grantor may now have or hereafter acquire in the fee title to the Land
or the lessor's interests under the Ground Lease), the lien of this
Deed of Trust shall automatically attach to and encumber such other
right, title, estate or interest as a lien thereon.
(p) all appurtenances in respect of or otherwise relating to the
Ground Lease, including, but not limited to, renewal options and
expansion rights, and all the estates and rights of Grantor of, in and
to (i) all modifications, extensions and renewals of the Ground Lease
and all rights to renew or extend the term thereof, (ii) all credits to
and deposits of Grantor under the Ground Lease (other than tenant
security deposits), (iii) all other options, privileges and rights
granted and demised to Grantor under the Ground Lease, (iv) all the
right or privilege of Grantor to terminate, cancel, abridge, surrender,
merge, modify or amend the Ground Lease and (v) any and all possessory
rights of Grantor and other rights and/or privileges of possession,
including, without limitation, Grantor's right to elect to remain in
possession of the Premises and the leasehold estate created by the
Ground Lease pursuant to Section 365(h)(1) of the Bankruptcy Code;
(q) all of Grantor's claims and rights to damages and any other
remedies in connection with or arising from the rejection of the Ground
Lease by Fee Owner or any trustee, custodian or receiver pursuant to
the Bankruptcy Code in the event that there shall be filed by or
against Fee Owner any petition, action or proceeding under the
Bankruptcy Code or under any other similar federal or state law now or
hereafter in effect (collectively, "Fee Owner's Bankruptcy").
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AND, as additional security, Grantor hereby grants to Beneficiary a
security interest in (1) the Equipment, (2) the Personal Property, (3) the
Condemnation Proceeds, (4) the Insurance Proceeds, (5) the Refunds, (6) the
Leases, (7) the Rents, (8) the Agreements, and (9) to the extent mortgages may
lawfully grant the same, all other components of the Mortgaged Property,
described in clauses (a) through (q) immediately preceding, and (10) all
proceeds of the foregoing collateral described in clauses (1) through (9)
(collectively, the "Security Interest Property"), and this Deed of Trust shall
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be effective as a security agreement pursuant to the Code.
3054893.06 7
HABENDUM
TO HAVE AND TO HOLD the Mortgaged Property, the rights and privileges
hereby conveyed or assigned, or intended so to be, unto Trustee and its
successors and substitutes in trust hereunder for the benefit of Beneficiary,
its successors and assigns, and with the possession and right of possession
thereof, for the uses and purposes herein set forth.
PROVIDED ALWAYS, and these presents are upon the express condition,
that if Grantor and/or SCLP shall well and truly pay to Beneficiary the Debt and
shall well and truly abide by and comply with each and every covenant and
condition set forth herein, in the Note and in the other SC Transaction
Documents to which it is a party, then these presents and the estate hereby
granted shall cease, determine and be void.
PROVIDED FURTHER, that provided no Event of Default has occurred and is
continuing, if SCLP shall exercise the right pursuant to and in accordance with
the Loan Agreement, or Grantor shall exercise the right to release the Mortgaged
Property from the lien of the MHP Mortgage pursuant to the MHP Loan Agreement,
Grantor shall be entitled to obtain the release by Beneficiary of this Deed of
Trust and the Mortgaged Property and, upon the giving of such release, this Deed
of Trust and these presents and the estate hereby granted shall cease, determine
and be void.
This Deed of Trust is one of a number of mortgages and deeds of trust
(all of which mortgages and deeds of trust, including this Deed of Trust, are
referred to in Exhibit B) given pursuant to the Loan Agreement. Each and every
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term and provision of all of the SC Transaction Documents signed by Grantor
and/or SCLP, including the rights, remedies, obligations, covenants, conditions,
agreements, indemnities, representations and warranties of all parties thereto
are hereby incorporated by reference herein as though set forth in full and
shall be considered a part of this Deed of Trust. Terms used in this Deed of
Trust which are not defined herein or which are not defined by reference to the
Loan Agreement shall have the meanings assigned to them in the Loan Agreement.
REPRESENTATIONS, WARRANTIES, COVENANTS,
AGREEMENTS AND CONDITIONS
THIS DEED OF TRUST FURTHER WITNESSETH the following representations,
warranties, covenants, agreements and conditions:
1. Payment of Debt.
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(a) Grantor and SCLP shall punctually pay the Debt at the time
and in the manner provided for its payment in the Note. The maturity date of the
Note (the "Maturity Date") is the earliest to occur of:
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(i) October 11, 2017; and
3054893.06 8
(ii) such earlier date to which the maturity of the Debt
may be accelerated upon an Event of Default as otherwise provided in
any SC Transaction Document.
(b) All payments of principal and interest accrued thereon shall
be made without demand therefor, or presentation or surrender of the Note, to
the extent permitted by applicable law.
2. Warranty of Title; Provisions of Ground Lease.
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(a) Grantor specially warrants that it has good and marketable
title to the Mortgaged Property and owns the Mortgaged Property free and clear
of all liens, claims, charges, restrictions, encumbrances, security interests
and other matters, subject only to the lien of the MHP Mortgage and the MHP
Transaction Documents, this Deed of Trust and of the other SC Transaction
Documents, the matters set forth as exceptions to the policies of title
insurance (the "Title Policies") relating to the Mortgaged Property issued by
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Commonwealth Land Title Insurance Company and Lawyers Title Insurance
Corporation in connection with the Loan; easements and other rights in the
Mortgaged Property granted by Grantor in the ordinary course of business which
will not, individually or in the aggregate, violate the Ground Lease or
materially and adversely affect (xx) the Premises, (yy) Grantor's hotel
operations thereon, or (zz) the value or validity of Beneficiary's lien on and
security interest in the Mortgaged Property, (iv) any easements and other rights
in the Mortgaged Property granted by Fee Owner in accordance with the Ground
Lease, (v) any financing permitted pursuant to Paragraph 3 of the MHP Mortgage
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and this Deed of Trust, and (vi) such other matters to which Beneficiary shall
have consented to in writing (collectively, the "Permitted Exceptions"). All
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items set forth hereunder as Permitted Exceptions are subject to the additional
representations and warranties set forth in Paragraph 4(e) hereof. Grantor
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represents and warrants that no interest in all or any part of the development
rights appurtenant to the Premises have been granted, transferred or assigned by
Grantor.
(b) Grantor, at its sole cost and expense, covenants and agrees
to defend its title to the Mortgaged Property and the priority of this Deed of
Trust against all claims and demands of parties claiming or to claim by, through
or under Grantor, subject to the Permitted Exceptions and will maintain and
preserve such priority as long as the Loan Agreement remains in effect or the
Debt (or any portion thereof) remains outstanding.
(c) With respect to the Ground Lease, Grantor represents and
and warrants as follows:
(i) Grantor is the sole owner and holder of the leasehold
estate created by the Ground Lease;
(ii) the Ground Lease or a memorandum thereof has been duly
recorded in the official records of the County of Contra Costa,
State of California and has not been materially amended or
modified since such recordation;
3054893.06 9
(iii) the Ground Lease is in full force and effect and no
default by Grantor or, to Grantor's knowledge, by Fee Owner has
occurred under the Ground Lease and to Grantor's knowledge there
is no existing condition which, but for the passage of time or the
giving of notice or both, would result in a default under the
Ground Lease;
(iv) the Ground Lease permits the interest of the tenant
thereunder to be encumbered by this Deed of Trust;
(v) the tenant's interest in the Ground Lease is assigned to
Beneficiary, without the consent of the Fee Owner, as security for
a leasehold mortgage pursuant to the Ground Lease, including
sections 6.01 and 11.06 thereof, and is further assignable by
Beneficiary and its successors and assigns by obtaining an
assignment of the Ground Lease in foreclosure or by deed in lieu
of foreclosure without the consent of the Fee Owner, subject to
the potential rights of the Fee Owner (x) to approve the Manager
of the Premises and (y) to exercise its rights of first
negotiation to purchase Grantor's leasehold interest in the Ground
Lease pursuant to section 11.08 of the Ground Lease;
(vi) the Ground Lease requires the Fee Owner to give written
notice of any default by Grantor or any exercise of any right to
terminate the Ground Lease to Beneficiary and provides that no
such notice delivered to Grantor will be effective against the
Beneficiary unless and until a copy of the notice has been
delivered to the Beneficiary;
(vii) the Ground Lease requires the Fee Owner to afford the
Beneficiary a reasonable opportunity to cure any default under the
Ground Lease, which is susceptible of being cured by Beneficiary
after the receipt of notice of any default before the Fee Owner
may terminate the Ground Lease;
(viii) the Ground Lease requires the Fee Owner to enter into
a new lease with the leasehold mortgagee with highest priority who
makes the request and its successors and assigns on the same terms
as the Ground Lease and having the same priority as the Ground
Lease, upon the termination of the Ground Lease for any reason,
including without limitation, the rejection of the Ground Lease in
a bankruptcy proceeding, provided that Beneficiary has cured all
defaults that are susceptible of being cured by Beneficiary;
(x) the Ground Lease has a term which extends not less than
ten (10) years beyond the Maturity Date;
(xi) the Ground Lease does not allow either the Fee Owner or
Borrower to cancel the Ground Lease while this Deed of Trust is
outstanding without the consent of Beneficiary, including
cancellation for damage or destruction of the Mortgaged Property,
and permits the Beneficiary, as first leasehold mortgagee
3054893.06 10
under the MHP Mortgage (as hereinafter defined), to participate in
the settlement of any Insurance Proceeds or Condemnation Proceeds
and to hold and disburse any Insurance Proceeds or Condemnation
Proceeds to be applied to the repair and restoration of the
Mortgaged Property or to the repayment of the Debt if Grantor is
in default under this Deed of Trust;
(xii) the Fee Owner has been, or promptly following the
execution and delivery of this Deed of Trust, will be, given the
required notice, together with a photocopy of the recorded Deed of
Trust, for Beneficiary to be recognized as the holder of a
leasehold mortgage entitled to the rights and privileges afforded
a leasehold mortgagee under the Ground Lease.
3. Further Mortgages and Liens.
---------------------------
This Deed of Trust is and will be maintained by Grantor as a valid
and enforceable mortgage lien on and security interest in the Mortgaged Property
subject only to the Permitted Exceptions. Except for (I) the MHP Mortgage and
(II) Permitted Subordinate Mortgages and FF&E Financings (as such terms are
defined in the MHP Mortgage), Grantor shall not, directly or indirectly, create
or suffer, or permit to be created or suffered, against the Mortgaged Property
or any part thereof, including, without limitation, the Rents or the Leases, and
Grantor will promptly discharge or bond over, any mortgage, lien (including the
liens of mechanics and materialmen), pledge, conditional sale or other title
retention agreement, easement or other covenant, attachment, security interest,
encumbrance or charge which may affect the Mortgaged Property or any part
thereof or interest therein, except (i) the Permitted Exceptions, (ii) Permitted
------
Subordinate Mortgages and (iii) matters being contested in good faith and by
appropriate proceedings in the manner permitted by Paragraph 16 of this Deed of
------------
Trust. If any mortgage, other lien or encumbrance not permitted hereunder is
filed, Grantor will cause the same to be discharged within thirty (30) days
after recordation thereof and will exhibit to Beneficiary, upon request,
evidence of discharge or other disposition satisfactory to Beneficiary.
4. Representations and Warranties. To induce Beneficiary to accept
------------------------------
the Note and this Deed of Trust, and to make the SC Loan evidenced by the Note
and secured by this Deed of Trust, Grantor represents and warrants to
Beneficiary that:
(a) The covenants in this Deed of Trust and in the other SC
Transaction Documents signed by Grantor have been observed and
performed in all material respects to the extent applicable on and as
of the date hereof. The representations and warranties in this Deed of
Trust and in the other SC Transaction Documents signed by Grantor are
true and correct in all material respects on and as of the date hereof.
All such covenants, representations and warranties are hereby
incorporated by reference.
(b) The granting of this Deed of Trust, the consummation
of the transactions herein contemplated and the execution and delivery
of, and the performance and observance of Grantor's obligations under
this Deed of Trust, the other SC Transaction Documents signed by
Grantor and other instruments herein mentioned to which Grantor
3054893.06 11
is a party and which have been executed and delivered in connection
with the transactions contemplated in the SC Transaction Documents have
been duly authorized by all necessary action on the part of Grantor and
its general partner and, to the Best Knowledge of Grantor (as such term
is defined in Paragraph 46(a) hereof), no other consent, license,
---------------
permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any Governmental
Authority (as hereinafter defined) (collectively, "Approvals") is
---------
required which has not been obtained by Grantor in connection with the
execution, delivery or performance by Grantor of this Deed of Trust,
the other SC Transaction Documents signed by Grantor and other
instruments herein mentioned to which Grantor is a party. For the
purposes hereof, "Governmental Authority" shall mean any court, agency,
----------------------
authority, board (including, without limitation, environmental
protection, planning and zoning), bureau, commission, department,
office or instrumentality of any nature whatsoever of any governmental
or quasi-governmental unit of the United States or the State or the
county or city where the Premises are located or any political
subdivision of any of the foregoing, whether now or hereafter in
existence, or any officer or official thereof, having jurisdiction over
Grantor or the Mortgaged Property or any portion thereof.
(c) This Deed of Trust and each of the other SC Transaction
Documents signed by Grantor have been duly authorized, executed and
delivered on behalf of Grantor by its general partner, and this Deed of
Trust constitutes, and each of the other SC Transaction Documents
signed by Grantor and other instruments mentioned herein to which
Grantor is a party constitute, a legal, valid and binding obligation of
Grantor, enforceable against Grantor in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
the enforcement of creditors' rights generally or by principles of
equity or public policy (whether asserted in equity or in proceedings
at law).
(d) This Deed of Trust constitutes a valid mortgage lien on,
and, to the extent permitted by applicable law, security interest in,
the Mortgaged Property, subject to no liens, charges or encumbrances
other than the Permitted Exceptions. There are no defenses,
counterclaims or offsets to Grantor's obligation to pay the Debt
pursuant to this Deed of Trust, the Note or any of the other SC
Transaction Documents signed by Grantor. To the Best Knowledge of
Grantor, there are no defenses, counterclaims or offsets to any of
Grantor's other obligations pursuant to this Deed of Trust, the Note or
any of the other SC Transaction Documents signed by Grantor.
(e) The Permitted Exceptions do not and will not materially and
adversely interfere with (i) the ability of Grantor and SCLP to pay in
full the Debt in the manner required by the Note or (ii) the use of the
Mortgaged Property for the use currently being made thereof, the
operation of the Mortgaged Property as currently being operated for
hotel purposes or the value of the Mortgaged Property.
(f) Except as set forth on the "Disclosure Schedule" (as defined
-------------------
in the MHP Loan Agreement) applicable to the Mortgaged Property and
approved by Beneficiary in
3054893.06 12
writing, there are no Leases (other than the Ground Lease) affecting
the Mortgaged Property. To the extent that the Disclosure Schedule
lists any leases affecting the Mortgaged Property, to the Best
Knowledge of Grantor, except as expressly disclosed on the Disclosure
Schedule (i) no tenant under any of the Leases is entitled to any rent
concession, (ii) Grantor has not accepted any prepayment of any rent,
additional rent or other sums due under any of the Leases, except a
payment of rent or additional rent one (1) month in advance or a
prepayment in the nature of security for the performance of obligations
of the tenant under any of the Leases and (iii) no tenant has any
defense, set-off or counterclaim against Grantor or to the payment of
any rent, additional rent or other sums payable pursuant to its Lease
or to the performance of any obligations of the tenant thereunder. No
tenant under any of the Leases has any right or option relating to the
sale or other disposition of any of the Mortgaged Property.
(g) The copies of the Leases, if any, previously delivered by
Grantor to Beneficiary are true, correct and complete copies of those
documents, and contain the entire agreement between the parties thereto
with respect to the subject matter thereof.
(h) Except as set forth in the Disclosure Schedule applicable to
the Mortgaged Property, Grantor has obtained or has caused Manager to
obtain where required by applicable law, a valid, permanent Certificate
of Occupancy for the Improvements which permits the uses to which the
Premises are put and the uses permitted under any applicable Lease, and
in such instances where relevant, such Certificate of Occupancy is in
full force and effect, and all Permits of all Governmental Authorities
required with respect to the use, operation, ownership and maintenance
of the Mortgaged Property, and all of the same are in full force and
effect and the Improvements comply in all material respects therewith.
(i) Grantor has all easements, appurtenances or other rights and
interests, including those for use, maintenance, and access (by
pedestrians, automobiles and trucks) necessary or appropriate for the
full and proper operation, repair, maintenance, occupancy and use of
every portion of the Mortgaged Property as a full-service, first-class
Marriott hotel and in compliance with the Loan Agreement. To the Best
Knowledge of Grantor, all utility services necessary for the operation
and occupancy of the Mortgaged Property for such purposes are available
at the Mortgaged Property and will continue to be operational and
adequate.
(j) Grantor's possession of the Premises has been peaceable and
undisturbed and Grantor's title thereto has never been disputed or
questioned and, except for the Permitted Exceptions Grantor does not
know of any facts by reason of which any adverse claim to any part of
the Mortgaged Property or to any undivided interest therein might be
made.
(k) Except as disclosed on the Title Policies or set forth on
the Disclosure Schedule applicable to the Premises and approved in
writing by Beneficiary, no condemnation or eminent
3054893.06 13
domain proceedings or other exercise of the right of eminent domain or
conveyance in lieu of condemnation (hereinafter collectively called
"Condemnation Proceedings") have been commenced and remain ongoing with
------------------------
respect to the Mortgaged Property or any portion thereof and, to the
Best Knowledge of Grantor, no Condemnation Proceedings are pending, nor
has Grantor received written notice of any threatened Condemnation
Proceedings.
(l) All costs arising from the construction of the Improvements
have been fully paid. All Equipment, Personal Property and all other
fixtures and articles of personalty attached to the Premises, or usable
in connection with the operation and maintenance thereof, have been
fully paid for except as described in the MHP Mortgage and are the
property of Grantor and are not subject to any conditional bills of
sale, chattel mortgages or any other title retention agreement of a
similar nature or to any other liens or encumbrances other than
permitted by the MHP Transaction Documents.
(m) Grantor is not a "national" of a "designated foreign
country" (or a person defined as a "designated foreign country") as
such quoted terms are defined in the Foreign or Cuban Assets Control
Regulations of the United States Treasury Department, 31 CFR, Subtitle
B, Chapter V, as amended, or any regulation or ruling issued
thereunder.
(n) Grantor, pursuant to the Title Policies, or an irrevocable
commitment therefor, effective as of the date of the closing of the SC
Loan has caused to be issued to Beneficiary an ALTA Lender's title
insurance policy insuring a valid lien on the Premises, subject only to
the Permitted Exceptions which Title Policies are in full force and
effect and are freely assignable to and will inure to the benefit of
any trustee or servicer selected by Beneficiary in connection with a
Securitization (as defined in the Loan Agreement).
(o) To the Best Knowledge of Grantor, no representation or
information contained herein or in any other SC Transaction Document,
nor any written statement or other instrument furnished, or to be
furnished, to Beneficiary or any other person entitled thereto under
the terms of the SC Transaction Documents executed by Grantor or its
general partner taken as a whole contains, or will contain, any untrue
statement of a material fact, or omits, or will omit, to state a
material fact necessary to make the statements contained herein or
therein not materially misleading.
5. Covenants of Grantor as to Performance and Other Matters.
--------------------------------------------------------
(a) Grantor shall duly perform and observe all of the
agreements, covenants, conditions and obligations imposed by the provisions of
this Deed of Trust, the Note, the other SC Transaction Documents signed by
Grantor or imposed upon or assumed by Grantor by virtue of the provisions of the
Permitted Exceptions or any deed, conveyance, agreement, statute or ordinance
pursuant to which Grantor or any predecessor in title of the Mortgaged Property
acquired the Mortgaged Property or any right or privileges appurtenant thereto
or for the benefit thereof.
3054893.06 14
(b) Grantor shall, so long as Grantor is the owner of the
Mortgaged Property, do all things necessary to preserve and keep in full force
and effect the existence, rights and privileges of Grantor under the laws of the
state of its incorporation and the State in which the Premises are located.
(c) Grantor shall not, without the prior written consent of
Beneficiary, which consent shall not be unreasonably withheld, conditioned or
delayed, institute, join in, execute or consent to any change in any covenant,
condition, restriction, easement, declaration, zoning ordinance, or other public
or private restriction limiting, defining or otherwise controlling construction
on or use(s) of all or any part of the Mortgaged Property.
(d) Except as expressly permitted in the Loan Agreement or any
other SC Transaction Document, Grantor shall not, without the prior written
consent of Beneficiary, which consent shall not be unreasonably withheld,
conditioned or delayed, enter into, amend or modify any agreements relating to
the management of the Mortgaged Property or the operation of the hotel or hotel
operations thereon.
(e) Except as expressly permitted in the Loan Agreement, Grantor
shall not, without the prior written consent of Beneficiary, enter into, amend
or modify any agreements relating to the Mortgaged Property or the operation of
the hotel or hotel operations thereon with any "Affiliate" (as defined in the
---------
Loan Agreement) of Grantor except on terms that are no less favorable to Grantor
than would be contained in similar arrangements on arms length terms with
independent third parties consistent with any provisions of the Loan Agreement.
All such agreements shall to the extent required under the SC Transaction
Documents be fully and expressly subject and subordinate in all respects to the
Debt, this Deed of Trust, and the SC Transaction Documents and to any and all
extensions, renewals, additions, modifications, increases, consolidations,
spreaders, amendments, replacements, restatements and substitutions hereof and
thereof.
(f) Grantor shall obtain all Approvals, if any, required in
connection with the execution, delivery or performance by Grantor of this Deed
of Trust, the other SC Transaction Documents and the other instruments herein
mentioned to which Grantor is a party.
(g) Grantor shall cause all Permits and Certificates of
Occupancy required with respect to the use, operation, ownership and maintenance
of the Mortgaged Property to remain in full force and effect at all times during
the term hereof, and Grantor shall not permit or suffer to exist a violation of
any such Permit or Certificate of Occupancy, or enter into any Lease which
causes or permits the violation thereof.
(h) Grantor shall, within five (5) business days after receipt
from or delivery to Fee Owner of any notice of default or any other material
notice, demand, complaint or request made by or given to Fee Owner with respect
to the Premises or the Ground Lease, deliver a true copy thereof to Beneficiary.
Beneficiary may, upon receipt by Beneficiary of any notice of default on the
part of Grantor under the Ground Lease, rely thereon and may, upon notice to
Grantor, take such action as Beneficiary shall deem necessary or desirable
notwithstanding that
15
the existence of such default or the nature thereof may be questioned or denied
by or on behalf of Grantor.
(i) Grantor shall pay the rent and other charges and all other
sums due or payable at any time and from time to time pursuant to the terms of
the Ground Lease as and when such sums shall become due or payable. If any
default shall be made in the payment of any sum when due or payable by Grantor
under the Ground Lease, Beneficiary shall have the right, but shall have no
obligation, to pay any such sum.
(j) Grantor shall give Beneficiary written notice of each and
every option to extend or renew the term of the Ground Lease, and notice of its
intention to exercise each such option, at least twenty (20) but not more than
sixty (60) days prior to the expiration of the time to exercise such option
under the terms of the Ground Lease. Grantor shall exercise any extension and/or
renewal option in respect of the Ground Lease upon Beneficiary's demand if
Beneficiary reasonably determines that the exercise of such option is necessary
to protect Beneficiary's security for the Loan. If Grantor intends to extend or
renew the term of the Ground Lease, Grantor shall deliver to Beneficiary,
together with the notice of such decision, a copy of the notice of extension or
renewal delivered to Fee Owner. If the term of the Ground Lease does not extend
at least ten (10) years beyond the Maturity Date, Beneficiary may, at its
option, exercise the option to extend or renew in the name and on behalf of
Grantor. For such limited and specific purpose, Grantor hereby irrevocably
appoints Beneficiary as its true and lawful attorney-in-fact (which appointment
shall be deemed coupled with an interest) to execute and deliver, for and in the
name of Grantor, all instruments and agreements necessary under the Ground Lease
or otherwise to cause such an extension of the term of the Ground Lease.
(k) Grantor shall not (i) terminate (or exercise any option it
may have to terminate) or cancel the Ground Lease, surrender all or any part of
the Premises to Fee Owner, modify, abridge or amend any material provision of
the Ground Lease, or suffer or permit any of the foregoing to occur, or (ii)
consent to the subordination of the Ground Lease or any amendment or
modification thereof to any mortgage encumbering the fee title to all or any
portion of the Premises.
(l) Grantor shall fully and timely observe, perform and comply
in all material respects with all of the terms, covenants and provisions
contained in the Ground Lease in such a manner so as to preserve and keep
unimpaired its rights under the Ground Lease and to prevent the occurrence of a
default thereunder.
(m) Grantor shall execute and deliver to Beneficiary, within
five (5) days after request, such instruments as may be required to permit
Beneficiary to cure any default under the Ground Lease or permit Beneficiary to
take such other action required to enable Beneficiary to cure or remedy the
matter in default and preserve the interest of Beneficiary in the Mortgaged
Property.
16
(n) Except as specifically provided in the Ground Lease, Grantor
shall first obtain the consent or approval of Fee Owner in all instances where
the consent or approval of Beneficiary under this Deed of Trust requires such
consent under the Ground Lease.
6. Due on Sale or Encumbrance.
--------------------------
(a) Grantor acknowledges that the continuous ownership,
operation and management of the Mortgaged Property by Grantor (directly, or
through the Manager) is of a material nature to this transaction and the making
of the SC Loan evidenced and secured by this Deed of Trust and the other SC
Transaction Documents. Grantor hereby covenants and agrees that Grantor shall
not, without the written consent of Beneficiary, directly or indirectly,
voluntarily or involuntarily or by operation of law, (i) dissolve, or terminate
or amend the terms of the existence of the Grantor or its general partner in any
respect that is not expressly permitted by the MHP Transaction Documents, or
(ii) sell, convey, assign, mortgage, encumber (except by the Permitted
Exceptions), hypothecate or otherwise transfer, alienate or dispose of,
including, without limitation, any lease of the Premises as a whole or
substantially as a whole, any interest in the Mortgaged Property or any legal or
beneficial interest in the Grantor or its general partner, except as expressly
permitted by the MHP Transaction Documents.
(b) If Beneficiary shall not consent in writing to a sale,
conveyance, assignment, mortgaging, encumbering or other transfer, alienation or
disposition prohibited by subparagraph 6.(a) hereof, and Grantor nevertheless
------------------
proceeds with such sale, conveyance, assignment, mortgaging, encumbering or
other transfer, alienation or disposition, then Beneficiary may, at its option,
and without limiting any other right or remedy available to Beneficiary
hereunder, at law or in equity, (but subject to Grantor's right pursuant to and
in accordance with the Loan Agreement to obtain the release by Beneficiary of
the Mortgaged Property) in its sole and absolute discretion and without regard
to the adequacy of its security, declare the Note, in whole or in part,
immediately due and payable.
(c) The giving of written consent by Beneficiary to the
transfer, alienation or disposition of all or any part of the Mortgaged Property
or any interest in the Mortgaged Property or Grantor or its general partner in
any one or more instances shall not limit or be deemed a waiver of the
requirement for such consent in any other or subsequent instances. Except as
otherwise expressly provided to the contrary in any MHP Transaction Document, if
any mortgage, encumbrance or other lien shall be placed on the Mortgaged
Property or any portion thereof (other than this Deed of Trust) without the
prior written consent of Beneficiary, such prohibited lien shall be deemed to be
null and void ab initio.
-- ------
7. Hazardous Substances.
--------------------
(a) As used herein:
(i) "Environment" shall mean soil, surface waters, ground
-----------
waters, land, stream, sediments, surface or subsurface strata and
ambient air.
17
(ii) "Environmental Laws" shall mean all Federal, state and
------------------
local environmental, health or safety laws, regulations, ordinances, orders,
actions, policies and rules of common law (whether now existing or hereafter
enacted or promulgated), of all Governmental Authorities and all applicable
judicial and administrative and regulatory decrees, judgments and orders,
including common law rulings and determinations, relating to injury to, or the
protection of, human health or the Environment, including, without limitation,
all requirements pertaining to reporting, licensing, permitting, investigation,
remediation and removal of emissions, discharges, releases or threatened
releases of Hazardous Substances, into the Environment, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
(iii) "Environmental Report" shall mean the environmental
--------------------
reports (described in the Disclosure Schedule) applicable to the Premises or any
update thereof or supplement thereto.
(iv) "Hazardous Substances" shall mean any chemical,
--------------------
material, gas, vapor, energy, radiation or substance (A) the presence of which
requires or may hereafter require notification, investigation or remediation
under any applicable Environmental Law, (B) which is or becomes defined as a
"hazardous waste", "hazardous material" or "hazardous substance" or "controlled
industrial waste" or "pollutant" or "contaminant" under any present or future
Environmental Laws, (C) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is
or becomes regulated by any Governmental Authority, (D) the presence of which on
the Mortgaged Property poses a hazard to the Mortgaged Property or to the health
or safety of persons or property on or about the Mortgaged Property, (E) without
limitation, which contains gasoline, diesel fuel or other petroleum hydrocarbons
or volatile organic compounds, (F) without limitation, which contains PCBs or
asbestos or urea formaldehyde foam insulation, or (G) without limitation, which
contains or emits radioactive particles, waves or material, including radon gas
in amounts the presence of which poses or threatens to pose a hazard to the
Mortgaged Property or to the health or safety of persons or property on or about
the Mortgaged Property.
(b) Grantor hereby represents and warrants as of the date hereof
as follows:
(i) Except as set forth in the applicable Environmental
Report:
(A) neither Grantor nor, to the Best Knowledge of
Grantor, any prior owner, occupant or user of the Mortgaged
Property nor any other person (each, a "Prior User") has engaged
----------
in or permitted any operations or activities upon, or any use or
occupancy of the Mortgaged Property, or any portion thereof, for
the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Substances (whether legal or
illegal, accidental or intentional) on, under, in or about the
Mortgaged Property, except to the extent commonly used
18
in the day-to-day operation of the Mortgaged Property and in such
case substantially in compliance with all Environmental Laws;
(B) neither Grantor nor, to the Best Knowledge of
Grantor, any Prior User, has transported any Hazardous Substances
to, from or across the Mortgaged Property, except substantially in
compliance with all Environmental Laws;
(C) to the Best Knowledge of Grantor, no Hazardous
Substances have migrated from other properties upon, about or
beneath the Mortgaged Property; and
(D) to the Best Knowledge of Grantor, there are no
Hazardous Substances presently deposited, stored, or otherwise
included in or located on, under, in or about the Mortgaged
Property, except Hazardous Substances stored and used in amounts
reasonably related to the normal operation of the Mortgaged
Property for hotel operations and in such case substantially in
compliance with all Environmental Laws.
(ii) Except as set forth in the applicable Environmental
Report, the Mortgaged Property and the use, maintenance and operation of the
Mortgaged Property, and all activities and conduct of business related thereto,
substantially comply and to the Best Knowledge of Grantor have at all relevant
times substantially complied, with all Environmental Laws, and no activity on or
condition of the, Property has been alleged in writing to Grantor to be a
material nuisance with respect to any third party.
(iii) Grantor has obtained any or all permits, licenses and
authorizations necessary to Grantor's operation of the Mortgaged Property under
applicable Environmental Laws, including laws relating to emissions, discharges,
releases or threatened releases of Hazardous Substances into the Environment or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances. To the Best
Knowledge of Grantor, Grantor and the Mortgaged Property are substantially in
compliance with all terms and conditions of any required permits, licenses and
authorizations.
(iv) Except as set forth in the applicable Environmental
Report, neither Grantor nor, to the Best Knowledge of Grantor, any Prior User
has received notice or other communication from a Governmental Authority having
jurisdiction over the Grantor the Mortgaged Property or any such Prior User
concerning any alleged violation of or liability under any Environmental Laws
with respect to the Mortgaged Property. Additionally, Grantor has not received
notice or other communication from a Governmental Authority concerning any
alleged material violation or material liability under any Environmental Laws by
Grantor, or relating in whole or in part to the Mortgaged Property, or with
respect to the real property adjacent to the Mortgaged Property, it being
understood that the term "adjacent" shall refer to real property within
19
the relevant radius for the violation of applicable Environmental Laws
as set forth in the applicable Environmental Report. Except as set
forth in the applicable Environmental Report, there exists no writ,
injunction, decree, order or judgment outstanding, nor any lawsuit,
claim, proceeding, citation, directive, summons or investigation,
pending or, to the Best Knowledge of Grantor threatened, relating to
the ownership, use, maintenance or operation of the Mortgaged Property
by any person or entity, or related to any alleged violation of
Environmental Laws, or any suspected presence of Hazardous Substances
thereon.
(v) Except to the extent set forth in the applicable
Environmental Report, Grantor has not placed, nor to Grantor's Best
Knowledge has there been constructed, placed, deposited, stored,
disposed of or located on the Mortgaged Property any PCB nor
transformer, capacitor, ballast, or other equipment which contains
dielectric fluid containing PCBs in concentrations that exceed federal
standards, nor any asbestos or asbestos-containing materials nor any
insulating material containing urea formaldehyde or any radon gas in
amounts the presence of which poses or threatens to pose a hazard to
the Mortgaged Property or to the health or safety of persons or
property on or about the Mortgaged Property. To the Best Knowledge of
Grantor, except to the extent set forth in the Environmental Report or
as may have been removed in accordance with Environmental Laws, no
underground improvements, including, but not limited to, treatment or
storage tanks, or water, gas or oil wells, are located on the Mortgaged
Property.
(c) Grantor hereby covenants and agrees that Grantor shall not,
unless Beneficiary shall otherwise consent in writing:
(i) Cause or, to the best of Grantor's ability to prevent
such activity, permit or suffer any Hazardous Substance to be brought
upon, treated, kept, stored, disposed of, discharged, released,
produced, manufactured, generated, refined or used upon, about or
beneath the Mortgaged Property or any portion thereof by Grantor, its
agents, employees, contractors, invitees, tenants, or any other person,
except to the extent commonly used in the ordinary operation of the
Mortgaged Property or in any such contractor's ordinary course of
trade, and in each case in compliance with applicable Environmental
Laws. The foregoing shall not apply to any Hazardous Substances that
may have migrated or leached onto the Mortgaged Property from any other
property.
(ii) Cause, permit or suffer the existence or the commission
by Grantor, its agents, employees, or contractors of a violation of any
Environmental Laws upon, about or beneath the Mortgaged Property or any
portion thereof and Grantor shall use commercially reasonable efforts
to prevent any such violation of any Environmental Laws by any invitees
or any other person on the Mortgaged Property. Any removal or
encapsulation of or other remedial action taken by or on behalf of
Grantor in connection with any Hazardous Substance located on the
Mortgaged Property (including, without limitation, subsequent disposal
thereof) shall be performed in accordance with all
20
applicable Environmental Laws and other Legal Requirements (as defined
in Paragraph 15 hereof).
------------
(iii) Subject to the provisions of Paragraph 16 hereof
------------
relating to permitted contests, create, or to the best of Grantor's
ability to prevent such encumbrances, suffer to exist with respect to
the Mortgaged Property, or permit any of its agents to create or suffer
to exist, any lien, security interest or other charge or encumbrance of
any kind under any Environmental Laws, including, without limitation,
any lien imposed pursuant to section 107(l) of the Superfund Amendments
and Reauthorization Act of 1986 (42 U.S.C. Section 9607(1)) or any
similar state statute.
(d) Grantor hereby covenants and agrees that Grantor will at all
times comply with the following requirements:
(i) Grantor shall, at its sole cost and expense, but without
waiver or limitation of any rights or remedies Grantor may have against
anyone other than Beneficiary, promptly take all actions required of
Grantor or any Affiliate of Grantor by any Governmental Authority which
arise from the presence upon, about or beneath the Mortgaged Property
of a Hazardous Substance or a violation of Environmental Laws. Such
action shall include, but not be limited to, the investigation of the
environmental condition of the Mortgaged Property, the preparation of
any feasibility studies, reports or remedial plans, and the performance
of any clean-up, remediation, containment, operation, maintenance,
monitoring or restoration work, whether on or off the Mortgaged
Property, to the extent required by applicable Environmental Laws.
Grantor shall take all actions necessary to restore the Mortgaged
Property to a condition that complies with any standard of remediation
required under applicable Environmental Law. Grantor shall proceed
continuously and diligently with all such required investigatory and
remedial actions, provided that in all cases such actions shall be in
accordance with all applicable Environmental Laws. Any such actions
shall be performed in a good, safe and workmanlike manner and shall, to
the extent practicable, minimize any impact on the business conducted
at the Mortgaged Property. Grantor shall pay all costs in connection
with such investigatory and remedial activities, including, but not
limited to, all power and utility costs, and any and all taxes or fees
that may be applicable to such activities. Grantor shall promptly
provide to Beneficiary copies of testing results and reports that are
generated in connection with the above activities. If required by
applicable Environmental Law, promptly upon completion of such
investigation and remediation, Grantor shall permanently seal or cap
all monitoring wells and test holes in compliance with applicable Legal
Requirements and industry standards, remove all associated equipment,
and restore the applicable Property, which shall include, without
limitation, the repair of any surface damage, including paving, caused
by such investigation or remediation. Nothing in this subsection shall
preclude the performance of any action required by any Governmental
Authority, as described above, by anyone other than Grantor or
Beneficiary. In such event, Grantor shall take all appropriate measures
to ensure that such action is performed in accordance with all
applicable Environmental Laws, and is consistent with the terms of this
Deed of Trust.
21
(ii) If Grantor shall become aware of or receive actual
notice concerning any actual, alleged or suspected violation of or
liability under any Environmental Laws, or a substantial risk that any
such Environmental Law will be violated with respect to the Premises,
or that any representation of Grantor contained herein relating to
Hazardous Substance is not or is no longer accurate in any material
respect, including but not limited to actual notice or other written
communication concerning any actual or threatened investigation,
inquiry, lawsuit, claim, citation, directive, summons, proceeding,
complaint, notice, order, writ or injunction, relating to same, and
including without limitation any notice or other communication by
Grantor, then Grantor shall deliver to Beneficiary, (x) within ten (10)
days after receipt of such notice, a written description of said
violation, liability, investigation or actual or threatened event or
condition, together with copies of any documents evidencing same and
(y) within thirty (30) days after receipt of such notice, a written
description of the corrective action, if any, proposed by Grantor in
response thereto. Receipt of such notices by Beneficiary shall not be
deemed to create any obligation on the part of Beneficiary to defend or
otherwise respond to any such notification.
(iii) Beneficiary shall have the right (but not the
obligation) to enter upon the Mortgaged Property, from time to time at
reasonable times and upon reasonable notice, and in its sole and
absolute discretion, to conduct inspections of the Mortgaged Property
and the activities conducted thereon to determine compliance with all
Environmental Laws, the presence of Hazardous Substances and the
existence of any potential damages as a result of the condition of the
Mortgaged Property. In furtherance thereof, Grantor hereby grants to
Beneficiary, and its agents, employees, and qualified consultants and
contractors, the right to enter upon the Mortgaged Property and to
perform such tests on the Mortgaged Property as are reasonably
necessary to make such determination. Beneficiary shall conduct such
inspections and tests at reasonable times, shall use its best efforts
to minimize interference with the operation of the Mortgaged Property
and agrees to restore the condition of the Mortgaged Property to
substantially the same condition as existed immediately before such
tests were performed, and Beneficiary shall not be liable for any
interference caused thereby unless due to the gross negligence or
willful misconduct or omission of Beneficiary.
8. Insurance. (a) The insurance requirements set forth on Schedule X
--------- ----------
annexed hereto are incorporated by reference herein and are made a part of this
Deed of Trust. At Grantor's expense, Grantor shall maintain continuously during
the term of this Deed of Trust policies of insurance (collectively, the
"Policies") in form and in amounts and issued by companies, associations or
--------
organizations satisfactory to Beneficiary and meeting the requirements set forth
in Schedule X.
----------
(b) When and if required by the applicable insurance company,
Grantor shall furnish Beneficiary with an appraisal satisfactory to Beneficiary
showing the full replacement value of the Improvements, the Equipment and the
Personal Property.
22
(c) At the request of Beneficiary, Grantor shall assign the
Policies to Beneficiary for the benefit of Beneficiary as collateral and further
security for the payment of the Debt. In the event of a foreclosure of this Deed
of Trust, the purchaser of the Mortgaged Property shall succeed to all the
rights of Grantor to the extent permissible under the Policies and applicable
law, including any right to unearned premiums, in and to all Policies assigned
or delivered to Beneficiary pursuant to this Paragraph.
---------
(d) If Grantor fails to maintain the insurance required to be
maintained hereunder or on Schedule X or fails to deliver evidence of insurance,
----------
Beneficiary may, but shall not be obligated to on not less than five (5)
Business Days' written notice to Grantor (or sooner, if required to replace any
insurance before it expires), obtain insurance and pay the premiums therefor on
behalf of Grantor if Grantor does not immediately obtain such insurance, and
Grantor shall reimburse Beneficiary, on written demand, for all sums advanced
and expenses incurred in connection therewith. Such sums and expenses, together
with interest thereon at the Default Rate (as defined in Paragraph 20), shall be
------------
deemed part of the Debt and secured by the lien of this Deed of Trust.
(e) Nothing contained in this Paragraph 8 or elsewhere in this
-----------
Deed of Trust shall relieve Grantor of its duty to maintain, repair, replace or
restore the Improvements, the Equipment or the Personal Property or rebuild the
Improvements, from time to time, as required by the Transaction Documents,
following damage thereto or destruction thereof whether or not sufficient
proceeds of insurance are available to defray the cost of such repairs or
restoration, and following any condemnation of all or any portion of the
Mortgaged Property, and nothing contained in this Paragraph 8 or elsewhere in
-----------
this Deed of Trust shall relieve Grantor of its duty to pay the Debt, which
shall be absolute, regardless of the occurrence of damage to or destruction of
or condemnation of all or any portion of the Mortgaged Property.
(f) In the event that prior to payment in full of the Debt,
any claim under any Policy has not been paid and distributed in accordance with
the terms of this Deed of Trust, and any such claim shall be paid after
foreclosure of this Deed of Trust or other transfer of title to the Mortgaged
Property shall have resulted in extinguishing the Debt for an amount less than
the total of the unpaid principal balance together with accrued interest and the
Yield Maintenance Premium, plus costs and disbursements at the time of the
extinguishment of the Debt, and such insurance claim is thereafter paid, then
and in that event that portion of the payment in satisfaction of the claim which
is equal to the aforesaid deficiency shall belong to and be the property of
Beneficiary and shall be paid to Beneficiary, and Grantor hereby assigns,
transfers and sets over to Beneficiary all of Grantor's right, title and
interest in and to said sums. The balance, if any, shall be promptly paid to, or
as directed by, Grantor. Notwithstanding the above, Grantor shall retain an
interest in the Policies above described during any redemption period. The
provisions of this Paragraph 8(f) shall survive the termination of this Deed of
--------------
Trust by foreclosure or otherwise as a consequence of the exercise of any rights
and remedies of Beneficiary hereunder after an Event of Default.
23
9. Payment of Impositions and Utility Charges.
------------------------------------------
(a) Subject to the provisions of the cash management procedures
set forth in the MHP Loan Agreement or the Exhibits thereto (collectively, the
"MHP Cash Management Procedures"), the MHP Mortgage and the provisions of
- -------------------------------
Paragraph 16 hereof, Grantor shall pay or cause to be paid, before any interest
or penalty for non-payment attaches thereto, all taxes, assessments, water
rates, sewer rents, vault charges, permit fees, user fees, ground rents,
maintenance charges and other governmental charges, and other charges of any
kind or nature whatsoever, general or special, ordinary or extraordinary, now or
hereafter levied, assessed or imposed upon or which constitute a lien upon or
against the Mortgaged Property or any portion thereof, or upon the Rents derived
from the Mortgaged Property or arising in respect of the occupancy, use or
possession thereof (collectively, the "Impositions"). If Grantor shall fail to
-----------
pay or cause to be paid any Impositions before any interest or penalty for
non-payment attaches thereto, Beneficiary shall have the right, but shall not be
obligated (except as specifically provided under the MHP Cash Management
Procedures), to pay such Impositions upon not less than five (5) Business Days'
prior written notice to Grantor (subject to the provisions of the next
succeeding sentence), and Grantor shall repay to Beneficiary, within ten (10)
days after written demand, any amount so paid by Beneficiary, with interest
thereon (xx) at the regular Base Rate provided for in the Note from the date of
Beneficiary's payment up to the date of demand for repayment by Beneficiary, and
(yy) at the Default Rate from and including the date of such demand by
Beneficiary to the date of repayment by Grantor, and such amount, together with
such interest, shall constitute a portion of the Debt secured by the lien of
this Deed of Trust. If an Escrow Fund (as defined in Paragraph 10 of the MHP
------------
Mortgage) is in effect with respect to the SC Loan, Beneficiary shall not be
required to give Grantor prior written notice of payments from such Escrow Fund
with respect to Impositions and the provisions of Paragraph 10 of the MHP
------------
Mortgage and any collateral account agreement or similar agreement with respect
to such Escrow Funds shall apply. In the case of any assessment payable in
installments, each installment thereof shall be paid prior to or on the date on
which such installment becomes due and payable without imposition of any fine,
penalty, interest or cost. Grantor shall not be entitled to any credit on the
Note, or any other sums which may become payable under the terms thereof or
hereof, or otherwise, by reason of the payment of the Impositions.
(b) Grantor shall promptly deliver to Beneficiary, upon request,
receipted bills, canceled checks or other evidence reasonably satisfactory to
Beneficiary evidencing the payment of the Impositions. The certificate, advice
or bill of the appropriate official designated by law to make or issue the same
or to receive payment of such Imposition shall be prima facie evidence that such
Imposition is due and unpaid at the time of the making or issuance of such
certificate, advice or bill. If Grantor shall fail to provide Beneficiary with
such evidence evidencing the payment of Impositions within thirty (30) days
after notice, Grantor shall pay Beneficiary, on written demand, all charges,
payments, fees, costs or expenses reasonably incurred by Beneficiary in
connection with obtaining evidence satisfactory to Beneficiary that payment of
all Impositions is current and that there are no Impositions due and owing or
which have become a lien on the Mortgaged Property or any portion thereof or any
appurtenances thereto.
24
(c) Grantor shall timely pay or cause to be paid all charges for
electricity, power, gas, water and other utilities used in connection with the
Mortgaged Property and, upon the written request of Beneficiary, Grantor shall
promptly deliver to Beneficiary receipted bills, canceled checks or other
evidence reasonably satisfactory to Beneficiary evidencing the payment of such
charges.
10. Escrow Fund.
-----------
(a) Subject to the provisions of the MHP Mortgage and the MHP
Cash Management Procedures, Grantor shall, at the option of Beneficiary to be
exercised by written notice at any time after the occurrence of an Event of
Default, or as otherwise required by the MHP Cash Management Procedures, pay to
Beneficiary (or, if applicable, any servicer named in or named pursuant to the
MHP Loan Agreement for the benefit of Beneficiary) the amount required in
connection with the Escrow Fund under the MHP Cash Management Procedures, if
any, on or before the date required by the MHP Cash Management Procedures. If at
any time such Cash Management Procedures are not in effect, on the Debt Service
Payment Date (as defined in the Note), Grantor shall, at the option of
Beneficiary to be exercised by written notice after the occurrence of an Event
of Default deposit with Beneficiary an amount (hereinafter referred to as the
"Escrow Fund") which amount, at the option of Beneficiary, shall be the amount
-----------
which would have been required by the MHP Cash Management Procedures, if any,
including Paragraph 6.1 thereof, had the Cash Management Procedures been in
-------------
effect, or, at Beneficiary's option, an amount equal to one-twelfth (1/12th) of
the amount which would be sufficient to pay the Impositions and all premiums on
the Policies payable, or estimated by Beneficiary to be payable, during the
ensuing twelve (12) months. Such deposits shall not be, nor be deemed to be,
trust funds and shall be held by Beneficiary in a segregated subaccount of the
Cash Collateral Account (as defined in the Loan Agreement) (the "Tax and
-------
Insurance Account") and invested in Permitted Investments (as hereinafter
- -----------------
defined) (except as otherwise required by any Legal Requirement) which shall be
free of any liens or claims on the part of creditors of Grantor.
(b) Beneficiary will apply monies in the Escrow Fund, if any,
(and any earnings inuring thereon) to the payment when due of Impositions and
premiums on the Policies which are required to be paid by Grantor pursuant to
the provisions of the MHP Cash Management Procedures, or if such MHP Cash
Management Procedures are not in effect, this Deed of Trust. If the amount of
the Escrow Fund shall exceed the amount of the Impositions and premiums on the
Policies payable by Grantor pursuant to the provisions of this Deed of Trust,
Beneficiary shall, in its sole discretion (i) return any excess to Grantor or
(ii) credit such excess against future payments to be made to the Escrow Fund.
In allocating such excess, Beneficiary may deal with the person shown on the
records of Beneficiary to be the owner of the Mortgaged Property. If the Escrow
Fund is not sufficient to pay the Impositions and premiums on the Policies as
the same become due and payable, Grantor shall pay to Beneficiary an amount
which Beneficiary shall estimate as sufficient to make up the deficiency.
(c) Until expended or applied as above provided, any amounts in
the Escrow Fund shall constitute additional security for the Debt. If this Deed
of Trust is sold or assigned,
25
Beneficiary shall transfer to the assignee the amount then held by Beneficiary
under this Paragraph, and upon delivery to the Grantor of evidence of such
---------
assignment and transfers, together with a written acknowledgement of receipt by
the transferee, the transferring Beneficiary shall not have any further
obligation to Grantor with respect to such amount. If at any time Grantor
tenders to Beneficiary full payment of the entire Debt, including any applicable
premium or penalty, and Beneficiary has no further obligation under the Loan
Agreement to make Advances, Beneficiary shall credit to the account of Grantor
any balance remaining in the Escrow Fund accumulated by Beneficiary under this
Paragraph, including interest earned thereon. Upon the occurrence and during the
- ---------
continuation of an Event of Default, Beneficiary shall be authorized and
empowered (but not required) to apply the balance remaining in the Escrow Fund
in the manner set forth in Paragraph 23 hereof and shall give Grantor prompt
------------
notice thereof.
11. Leases and Rents.
----------------
(a) Grantor hereby grants and assigns to Beneficiary the right
to enter the Mortgaged Property for the purpose of enforcing its interest in the
Leases, if any, and collecting the Rents, this Deed of Trust constituting a
present, absolute assignment of the Leases and Rents. Notwithstanding the
foregoing, but subject to the provisions of the MHP Mortgage and the terms and
conditions of this Paragraph, Beneficiary hereby grants to Grantor a revocable
---------
license to operate and manage the Mortgaged Property and to collect the Rents.
Grantor shall hold the Rents, or an amount sufficient to discharge all current
sums due on the Debt, in trust for use in payment of the Debt. The license
herein granted to Grantor to collect the Rents and enforce its interests in the
Leases may be revoked by Beneficiary following an Event of Default by Grantor
under this Deed of Trust or any of the other SC Transaction Documents, by giving
written notice of such revocation to Grantor. Following such notice, Beneficiary
may collect, retain and apply the Rents toward payment of the Debt in such
priority and proportions as Beneficiary, in its sole discretion, shall deem
proper, or to the operation, maintenance and repair of the Mortgaged Property.
In addition to the rights which Beneficiary may have herein, Beneficiary, at its
option, may require Grantor to pay, monthly in advance, to Beneficiary, or any
receiver appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of such part of the Premises as may be in the
possession of Grantor for its own use (it being understood that for such purpose
Grantor shall not be deemed to be in possession of a hotel room unless Grantor
or its affiliates is using the same), other than such portions of the Premises
used for the operation of the Hotel. Upon default in any such payment, Grantor
will vacate and surrender possession of such portions of the Premises to
Beneficiary, or to such receiver and, in default thereof, Grantor may be evicted
from such portions of the Premises by summary proceedings or otherwise. Nothing
contained in this Paragraph shall be construed as imposing on Beneficiary any of
---------
the obligations of the lessor under the Leases. The provisions of this Paragraph
---------
shall be in addition to, and not in lieu of, the provisions of the Assignment,
and, if any conflict or inconsistency exists between the provisions of this Deed
of Trust and the provisions of the Assignment with respect to the Leases or
Rents, the provisions of the Assignment shall control, except to the extent that
this Deed of Trust shall impose greater burdens upon Grantor, shall further
restrict rights of Grantor or shall give Beneficiary greater rights. Beneficiary
shall be entitled to all the rights and benefits of the applicable laws of the
State. It shall never be necessary for Beneficiary to institute legal
proceedings of any kind whatsoever to enforce the
26
provisions of this Paragraph 11(a). The rights of Trustee hereunder in the
---------------
Leases and Rents shall be subject to (i) the rights of Beneficiary in the Leases
and Rents, and (ii) the rights of Beneficiary in the Leases and Rents and
revenues created under the Assignment.
(b) Except as otherwise provided in the Loan Agreement, Grantor
shall not, without the prior written consent of Beneficiary, enter into any
Material Lease with respect to the Premises. For purposes of this Deed of Trust
and all of the SC Transaction Documents, the term "Material Lease" shall mean
(xx) a lease demising 5% or more of the Floor Area of the Premises regardless of
the term of such lease or (yy) a lease demising any room or suite in the
Premises for a period in excess of 365 calendar days (including so-called
seasonal leases aggregating to a time period in excess of 365 days whether or
not such days run consecutively). All new Leases (including Material Leases)
shall be with tenants unaffiliated with Grantor, shall be on arms-length terms
and conditions and shall be at annual rents at least comparable to the market
rents then being paid for comparable premises in the vicinity of the Premises.
(c) Any Lease entered into by Grantor from and after the date
hereof and each renewal of an existing Lease (excluding, however, a renewal
pursuant to an option contained in an existing Lease) shall provide:
(i) that such Lease is and shall be subject and subordinate
in all respects to this Deed of Trust and the lien created hereby, and
to any renewals thereof, including any increase in the principal amount
secured by this Deed of Trust, and any increase in the interest rates
set forth in the Note and to each and all of the rights of Beneficiary
or any holder thereof;
(ii) that such provision shall be self-operative;
(iii) that, in confirmation of such subordination, each
tenant under a Lease (each, a "Tenant" and, collectively, the
------
"Tenants") shall promptly execute and deliver following Beneficiary's
-------
written request such commercially reasonable agreement of subordination
that Beneficiary may request; and
(iv) that the Tenant shall execute and deliver estoppel
certificates (each, a "Tenant Estoppel Certificate") addressed to
---------------------------
Beneficiary certifying as to the following information:
(A) an identification of the Lease and all
modifications by date, parties, and space;
(B) the commencement date and expiration dates of the
original term and any renewal periods of such Lease;
(C) the base rent and additional rent then payable
under such Lease;
27
(D) that such Lease is in full force and effect;
(E) that, to the best knowledge of such Tenant, Grantor
is not in default of any of the terms of such Lease (or, if in default,
specifying the default);
(F) that, to the best knowledge of such Tenant, it has
no rights of offset, defenses or counterclaims under the Lease (or, if
it has any, specifying the same); and
(G) the last day to which base rent under the Lease has
been paid.
(d) Grantor, promptly after obtaining actual knowledge thereof,
shall notify Beneficiary of the termination of any Material Lease, the receipt
of any notice of default under any Material Lease, and of any notice, action or
proceeding regarding any Material Lease which may, in Grantor's reasonable
judgment, materially and adversely affect the Mortgaged Property.
(e) Grantor shall at all times perform and comply with, or cause
to be performed and complied with in all material respects, all of the terms,
covenants and conditions of the Leases to be performed or complied with by
Grantor thereunder.
(f) Upon written notice, but not more frequently than annually,
Grantor shall deliver to Beneficiary, on request, if applicable, a rent roll and
schedule of the Leases then in existence, certified by Grantor to be true and
complete, together with a counterpart original or a copy of every Lease and any
amendments with respect to which a counterpart original or copy has not
previously been furnished to Beneficiary, and containing such other information
as Beneficiary may reasonably request. In addition, Grantor, upon Beneficiary's
reasonable request, shall use reasonable efforts to obtain from each tenant at
the Premises a Tenant Estoppel Certificate.
(g) All security or other deposits, if any, of Tenants held by
Grantor (collectively, "Security Deposits") shall be treated as trust funds of
-----------------
Grantor and shall be deposited in a tenant's security account maintained by
Grantor at a commercial bank, savings bank or savings and loan association,
identified to Beneficiary.
(h) The provisions in subparagraphs 11(b), (c) and (f) of this
--------------------------------
Paragraph shall not apply to any nightly rentals or other arrangements for
- ---------
occupancy of individual hotel rooms or suites at the Premises in the ordinary
course of the operation of Grantor's hotel business, provided that any such
nightly rentals or other arrangements for occupancy are not effected pursuant to
Material Leases.
28
12. Maintenance of the Mortgaged Property; Changes.
----------------------------------------------
(a) Grantor agrees to keep, operate and maintain the Mortgaged
Property as a full-service, first-class Marriott hotel and in compliance in all
material respects with the Ground Lease, the Loan Agreement and the Management
Agreement, subject to Uncontrollable Circumstances (as defined in the Loan
Agreement), Temporary Takings (as defined in Paragraph 14(d) hereof) and
---------------
temporary closures for repairs in the ordinary course of Grantor's business
(provided that such temporary closures shall not in any event affect the entire
hotel or a material part thereof and shall not last longer than thirty (30)
consecutive days) and subject to the effects of casualty and condemnation
provided that Grantor is using diligent efforts to mitigate the effects of any
such event to the extent required by, and in compliance with, the provisions of
Paragraph 13 hereof, with respect to the effects of casualty, and Paragraph 14
- ------------ ------------
hereof, with respect to the effects of any Condemnation Proceedings. Without
limitation, Grantor agrees:
(i) not to desert or abandon all or any portion of the
Mortgaged Property;
(ii) to keep, or cause to be kept, the Mortgaged Property,
the sidewalks and the curbs adjoining the Mortgaged Property in good,
safe and insurable condition and as required by Legal Requirements
(whether or not a violation has been noted or issued therefor);
(iii) to maintain, or cause to be maintained or replaced,
all Improvements, Equipment and Personal Property in substantially the
same or better condition as they exist on the date hereof;
(iv) not to commit or suffer waste;
(v) not to make or permit to be made, except as permitted
by the Transaction Documents, any structural or non-structural
alterations in or additions to the Improvements (collectively,
"Changes") or demolish the Improvements or any portion thereof, except
-------
in accordance with the provisions of the Ground Lease and the
Transaction Documents and with the prior written consent of
Beneficiary, which consent shall not be unreasonably conditioned,
withheld or delayed, except (x) as may otherwise be permitted by the
provisions of this Deed of Trust (including the provisions of Paragraph
---------
12(b)), or (y) as may be required by any Governmental Authority,
-----
subject to the provisions of Paragraph 13 hereof;
------------
(vi) except as otherwise provided in Paragraph 13 hereof, to
------------
promptly repair, replace, restore or rebuild, or cause to be promptly
repaired, replaced, restored or rebuilt, all Improvements now or
hereafter constituting a part of the Mortgaged Property which may
become damaged or destroyed, with materials and workmanship of as good
quality as existed before such damage or destruction;
29
(vii) to refrain from impairing or diminishing the value of
the Mortgaged Property or the security value of this Deed of Trust; and
(viii) not to remove any of the Equipment or Personal
Property without the prior written consent of Beneficiary, except for
substitution or replacement in the ordinary course of business of any
component of Equipment or Personal Property with items of equivalent
value and utility, provided, however, that Grantor shall not be
-------- -------
required to replace any Personal Property or Equipment if the same
shall be obsolete or if Grantor shall no longer have any use for any
such Equipment or Personal Property.
Notwithstanding anything to the contrary contained in this Paragraph 12(a),
---------------
nothing herein shall preclude Grantor's right to decide, in the exercise of its
good business judgment, the manner, methodology and extent of Grantor's
maintenance or repair of the Mortgaged Property, provided that the Mortgaged
Property and Grantor shall at all times comply with all Legal Requirements, and
that the Premises continuously (except during periods of Uncontrollable
Circumstances, restoration or repair) operates as a full-service, first-class
Marriott hotel and at all times in compliance in all material respects with the
Ground Lease, the Loan Agreement and the Management Agreement.
(b) Notwithstanding anything to the contrary contained in
Paragraph 12(a), the prior consent of Beneficiary shall not be required with
- ---------------
respect to those Changes which are either (i) approved by Beneficiary pursuant
to the MHP Loan Agreement, including any amounts disbursed from any account
provided for in the MHP Loan Agreement or the MHP Cash Management Procedures or
disbursed pursuant to any applicable budget described in the MHP Loan Agreement
or (ii) which (xx) are non-structural, (yy) will not adversely affect any
building system and (zz) which in the good faith estimate of Grantor will not,
with respect to any single Change or related set of Changes, cost in excess of
$50,000.00.
(c) In giving consent to any Changes or other demolitions or
alterations to the Improvements, Beneficiary, in the exercise of its reasonable
consent right as set forth in Paragraph 12(a) shall take into account evidence
---------------
provided by Grantor that the completion of such Changes, demolition or other
alterations will not adversely affect Grantor's financial condition, the value
of the Mortgaged Property or the Net Operating Income (as defined in the MHP
Loan Agreement) therefrom. If the cost of any proposed Changes is in excess of
the amount provided in Paragraph 12(b), Beneficiary, in the exercise of its
---------------
reasonable consent right, may require the Grantor to post collateral in the
amount of the estimated cost of any such Change or to take such other steps to
ensure completion of the Changes as may be prudent for a mortgage lender in
similar circumstances considering all of the factors of Grantor's operation of
the Premises and the continuation of Net Operating Income therefrom.
(d) All Changes shall be performed lien-free (subject to the
provisions for bonding of liens and contests set forth in Paragraph 16 hereof),
------------
in a good and workmanlike manner, and in compliance with all Legal Requirements.
No material part of the Improvements shall be demolished in connection with any
Changes and the hotel operations at the Premises shall not be suspended as a
consequence thereof. Promptly upon completion of any material structural
30
Changes, as-built plans and evidence reasonably satisfactory to Beneficiary of
lien-free construction shall be delivered to Beneficiary.
(e) Beneficiary, and its agents or designated representatives,
shall, upon reasonable prior notice to Grantor and at reasonable times, have the
right of entry and free access to the Mortgaged Property to inspect any work
authorized by Beneficiary and the work done, labor performed, materials
furnished or Changes to the Mortgaged Property. Grantor shall make the officers
and directors of the general partner of Grantor and such regional supervisors as
are primarily charged with responsibility over such matters available for
Beneficiary to discuss Grantor's affairs, finances and accounts relating to any
work done, labor performed, materials furnished or Changes to the Mortgaged
Property and will cooperate with, and request that its contractors and any
subcontractors cooperate with, Beneficiary or any of its designated
representatives to enable them to perform these functions, at all reasonable
times and as often as Beneficiary may reasonably request.
(f) Grantor, in connection with its obligations hereunder to
maintain the Mortgaged Property as a full-service, first-class Marriott hotel,
represents and warrants to Beneficiary that: the Mortgaged Property has adequate
rights of access to public ways and is served by adequate water, sewer, sanitary
sewer and storm drain facilities; all public utilities necessary to the
continued use and enjoyment of the Mortgaged Property as presently used and
enjoyed are located in the public right-of-way abutting the Mortgaged Property
or in easements benefitting the Premises, and all such utilities are connected
so as to serve the Mortgaged Property without passing over other real property
(except as covered by such easement benefitting the Premises); all roads
necessary for the full utilization of the Mortgaged Property for its current
purpose have been completed and dedicated to public use and accepted by all
Governmental Authorities or are the subject of access easements for the benefit
of the Mortgaged Property; except as described in the Disclosure Schedule the
Mortgaged Property is not located in a flood hazard area as defined by the
Federal Insurance Administration; and except as disclosed in the Title Policies
with respect to the Premises, there are no pending or, to the Best Knowledge of
Grantor, proposed special or other assessments for public improvements or
otherwise affecting the Mortgaged Property, nor, to the Best Knowledge of
Grantor, are there any contemplated improvements to the Mortgaged Property that
may result in such special or other assessments.
13. Damage to and Destruction of the Mortgaged Property.
---------------------------------------------------
(a) In the event that the Mortgaged Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty, whether insured or
uninsured, Grantor shall give prompt written notice thereof to Beneficiary,
together with Grantor's best estimate of the cost of restoration (the
"Restoration Cost"). Subject to the provisions of the MHP Mortgage and this
----------------
Paragraph 13, Grantor shall restore the Premises to the standard required by
- ------------
Paragraph 12(a)(vi) of this Deed of Trust. Grantor shall timely file all claims
- -------------------
or proofs of claim so as not to prejudice any claim and, if the Restoration Cost
is equal to or greater than an amount (the "Restoration Benchmark") equal to the
---------------------
lesser of (xx) $500,000.00 and (yy) 5% of the Release Price attributed to the
Premises in the MHP Loan Agreement, or, irrespective of the Restoration Cost, if
an Event of Default and until the Debt has been paid in full exists as of the
date of
31
submission of any claims or proofs of claim, and until the Debt has been paid in
full, Grantor shall submit all claims or proofs of claim and other submissions
to Beneficiary for the written approval of Beneficiary prior to any such filing,
which approval shall not be unreasonably withheld, conditioned or delayed.
(b) Provided that no Event of Default exists at the time of
settlement, Grantor shall have the right to settle any insurance claim with
respect to any casualty where the Restoration Cost is less than the Restoration
Benchmark, but shall give prompt written notice of any such claim and settlement
to Beneficiary. In such event, Grantor shall apply the Insurance Proceeds
relating to such casualty to restoration, replacement, rebuilding or repair
(hereinafter collectively referred to as "Restoration") of the damage to the
-----------
standard required by Paragraph 12(a)(vi) hereof.
-------------------
(c) Subject to the provisions of the MHP Mortgage, if the
Restoration Cost equals or exceeds the Restoration Benchmark, and unless Grantor
has obtained the release of this Deed of Trust as a Casualty Event Release (as
hereinafter defined) in accordance with the Loan Agreement, Beneficiary shall
have the right to participate in the settlement of all insurance claims relating
to such casualty, and all Insurance Pro ceeds relating to such casualty shall be
paid directly to Beneficiary, and, after settlement of the claim(s) and subject
to Paragraph 13(d) hereof, such Insurance Proceeds shall be deposited in the
---------------
subaccount for Insurance Proceeds (as defined in Section 4.2 of the MHP Cash
Management Procedures) of the Cash Collateral Account (as defined in the MHP
Loan Agreement) and advanced to Grantor from time to time (subject to the
conditions set forth below) in reimbursement for amounts expended by Grantor or
as direct payments to contractors in Restoration of the Mortgaged Property. Upon
completion of the entire Restoration and provided no uncured Event of Default
exists at the time of payment, Beneficiary shall pay the remaining amount of the
Insurance Proceeds, if any, to Grantor; provided, however, that nothing herein
-------- -------
contained shall prevent Beneficiary from applying at any time the whole or any
part of the Insurance Proceeds to the curing of any default under any SC
Transaction Document or to the payment of the Debt in the circumstances set
forth in Paragraph 13(d). Advances of Insurance Proceeds shall be made available
---------------
to Grantor, no less frequently than monthly, in accordance with the general
procedures employed at the time by Beneficiary in connection with the
disbursement of loan proceeds in general by Beneficiary (including, without
limitation, an endorsement to the title insurance policy of Beneficiary as to
the Premises insuring the continued priority of the lien of this Deed of Trust
against mechanics' liens that may arise out of the Restoration and appro priate
certifications from a licensed architect or engineer selected by Grantor subject
to the reasonable approval of Beneficiary (each, an "Architect") that the
---------
requested payment is for work completed in accordance with plans and
specifications approved by Beneficiary and that the balance of funds held on
deposit after such payment will be sufficient to pay the cost of completing the
Restoration (provided, however, that if the cost of the Restoration is or is
estimated to be less than $250,000.00, Beneficiary will accept a certificate of
the officer of the general partner of Grantor certifying to this effect), and
evidence satisfactory to Bene ficiary that no liens have been filed for the
labor and materials used in connection therewith and that the requested payment
will be received in trust, to be applied first to the payment for such labor and
materials in amounts which are equal to the percentage of completion attained at
the time of such advance, less, in the case of any Restoration in which the
original
32
estimated cost or actual cost is $250,000.00 or more, all amounts previously
advanced and a holdback of 10% (or such lesser amount as may be customary in the
trade in such location or as may be required under the applicable restoration
contract, but in no event less than 5% for any contact where a holdback is
required), which remaining amounts will be advanced upon full completion of the
Restoration as due under the applicable Restoration contract. All Insurance
Proceeds and other sums deposited with Beneficiary pursuant to this Paragraph,
---------
until expended or applied as provided in this Paragraph, shall constitute
---------
additional security for the Debt and shall be invested in Permitted Investments
(as such term is defined in the MHP Loan Agreement) with income thereon inuring
to the benefit of Grantor in accordance with the MHP Loan Agreement.
(d) Notwithstanding the foregoing, if an Event of Default exists
or if, in Beneficiary's reasonable judgment based on professional consultation:
(i) the Restoration of the Improvements cannot be completed
(A) so as to constitute an economically viable building or (B) at least
six (6) months prior to the Maturity Date; or
(ii) the amount of business interruption insurance is
insufficient to cover all fixed and operating expenses of the Premises,
including such portion of debt service on the Loan as is reasonably
allocable to the Premises, during Restoration and until the operation
of Grantor's business at the Premises is resumed; or
(iii) the amount of Insurance Proceeds equals or exceeds the
amount of the outstanding principal balance of the MHP Loan and the SC
Loan; or
(iv) Restoration of the Mortgaged Property cannot be
completed except at a cost which exceeds the amount of available
Insurance Proceeds and Grantor shall not have deposited with
Beneficiary, within ninety (90) days following Beneficiary's receipt of
such Insurance Proceeds and delivery to Grantor of notice of a
deficiency, an amount, in cash or cash equivalent, equal to the excess
of the estimated cost of the Restoration as determined by an Architect
over the amount of such Insurance Proceeds;
then Beneficiary shall have the option to apply Insurance Proceeds to the
payment of the Note, interest accrued and unpaid thereon, and the Yield
Maintenance Premium, if any, and other unpaid amounts of the Debt, all in such
order as Beneficiary shall designate in accordance with the MHP Transaction
Documents, provided, however, that except as otherwise provided in the Loan
-------- -------
Agreement, any such application shall in no event affect the payments to be made
in respect of the Note.
(e) Grantor shall, promptly after the occurrence of a casualty,
commence and thereafter with reasonable diligence prosecute to completion any
Restoration of the Mortgaged Property or part thereof to the standard required
by Paragraph 12(a)(vi) hereof. Any such Restoration shall be undertaken and
-------------------
completed in accordance with this Paragraph 13, subject to the final provision
------------
of this Paragraph 13(e). All Restoration shall be in a good and workmanlike
---------------
manner with reasonable diligence, and in compliance with all Legal Requirements.
Seasonality
33
or weather permitting, if Grantor fails to commence Restoration within thirty
(30) days following Beneficiary's receipt of Insurance Proceeds or fails to
prosecute the Restoration to completion, Beneficiary may upon ten (10) days'
notice to Grantor, but shall not be obligated to, perform the Restoration, and
may use any of the Insurance Proceeds and Grantor's funds deposited pursuant to
Paragraph 13(c) or 13(d) of this Paragraph in payment therefor. Grantor shall
- ------------------------ ---------
pay to Beneficiary, within ten (10) days after written demand, the amount of any
deficiency between funds available for the Restoration and the cost thereof
(including funds deposited by Grantor pursuant to Paragraph 13(c) or 13(d) of
------------------------
this Paragraph) together with interest thereon at the Default Rate from such
---------
tenth (10th) day through and including the date of payment to Beneficiary.
Notwithstanding the foregoing provisions of this Paragraph 13(e) or anything
---------------
else contained in this Paragraph 13, if Grantor has obtained the release of the
------------
Premises from the lien of this Deed of Trust and the MHP Mortgage in accordance
with the MHP Loan Agreement and the Loan Agreement by payment of the applicable
Release Price and other amounts due, if any, to obtain a release under the MHP
Loan Agreement and the Loan Agreement, and the taking of any other actions
required by the MHP Loan Agreement and the Loan Agreement with respect thereto
(the payment of such amounts and the taking of such actions being collectively
called a "Casualty Event Release"), then Grantor shall not be required to
----------------------
undertake the Restoration described herein. As set forth in the MHP Loan
Agreement and the Loan Agreement, the payment of amounts with respect to a
Casualty Event Release shall not require the payment of a Yield Maintenance
Premium, and any Insurance Proceeds paid to Beneficiary shall be credited
against payments of the Release Price and any other amounts due with respect to
a Casualty Event Release required to be paid by the provisions of the MHP Loan
Agreement and/or the Loan Agreement.
(f) It is intended that, anything contained herein to the
contrary notwithstanding, no trust or fiduciary relationship shall be created by
the receipt by Beneficiary of any Insurance Proceeds, but only a debtor-creditor
relationship between Beneficiary, on the one hand, and Grantor, on the other,
and only to the extent of the Insurance Proceeds.
(g) If any Insurance Proceeds are not paid until after the
extinguishment of the Debt, whether by foreclosure or otherwise, and Beneficiary
shall not have received the entire amount of the Debt outstanding at the time of
such extinguishment, then such Insurance Proceeds, to the extent of the amount
of the Debt not so received, shall be paid to Beneficiary and be the property of
Beneficiary; and Grantor hereby assigns, transfers and sets over to Beneficiary
all of Grantor's right, title and interest in and to such proceeds. The balance
of such Insurance Proceeds, if any, shall be paid to and be the property of
Grantor. The provisions of this Paragraph shall survive the termination of this
---------
Deed of Trust by foreclosure or otherwise as a consequence of the rights and
remedies of Beneficiary hereunder after an Event of Default.
(h) Subject to the provisions of Paragraph 13(d) or 13(e), as
------------------------
applicable, nothing herein contained shall be deemed to excuse Grantor from
repairing or maintaining the Mortgaged Property as provided in this Deed of
Trust or restoring all damage or destruction to the Mortgaged Property,
regardless of the sufficiency or availability of Insurance Proceeds, and the
application or release by Beneficiary of Insurance Proceeds shall not be deemed,
in and of itself, to cure or waive any default or Event of Default or notice of
default. Notwithstanding any
34
casualty, Grantor and SCLP shall continue to pay the Debt at the time and in the
manner provided for its payment in this Deed of Trust and the Note and the Debt
shall not be reduced until any Insurance Proceeds shall have been actually
received by Beneficiary and applied to the discharge of the Debt or payments
with respect to a Casualty Event Release.
(i) Beneficiary, to the extent that Beneficiary has not been
reimbursed therefor by Grantor, shall be entitled as a first priority out of any
Insurance Proceeds, to reimbursement for all actual costs, fees, reimbursements
and expenses of Beneficiary incurred in the determination and collection of any
such proceeds.
14. Condemnation Proceedings.
------------------------
(a) Subject to the provisions of the MHP Mortgage, in the event
that the Mortgaged Property, or any part thereof, shall be taken pursuant to
Condemnation Proceedings, Beneficiary shall, as hereinafter set forth, have
certain consent rights with respect to settlement of any such Condemnation
Proceedings, but shall not participate in any such Condemnation Proceedings
except as expressly provided herein, and any Condemnation Proceedings that may
be made or any proceeds thereof are hereby assigned to Beneficiary and shall be
received and deposited into the subaccount for Condemnation Proceeds (as defined
in Section 4.2 of the MHP Cash Management Procedures) of the Cash Collateral
Account and held and distributed by Beneficiary in the manner herein set forth.
Grantor will give Beneficiary prompt notice of the actual commencement of any
Condemnation Proceedings affecting the Mortgaged Property or of any threatened
condemnation of which Grantor becomes aware, including proceedings for severance
and change in grade of streets, and will deliver to Beneficiary copies of any
and all papers served in connection with any Condemnation Proceedings.
Beneficiary is hereby authorized to commence, appear in, and prosecute in its
own name or Grantor's name any action or proceeding relating to any Condemnation
Proceedings, upon not less than ten (10) Business Days' prior written notice to
Grantor, if Grantor has not commenced any such action or proceeding. Grantor may
not settle or compromise any claim in connection with any Condemnation
Proceeding, whether involving a Total Taking, Partial Taking or Temporary
Taking, which claim equals or exceeds, or, at the outset of any such
Condemnation Proceedings, appears to involve a sum which is likely to equal or
exceed, in Beneficiary's reasonable judgment based on professional consultation,
the Restoration Benchmark, without the prior written consent of Beneficiary in
each instance, which consent shall not be unreasonably withheld, conditioned or
delayed, and Beneficiary shall have the right to settle or compromise any claim
in connection therewith (irrespective of amount), without the consent of Grantor
after the occurrence of an Event of Default. Grantor agrees to execute any and
all further documents that may be reasonably required in order to facilitate the
collection of any Condemnation Proceeds and the making of any such deposit and
Grantor hereby appoints Beneficiary its attorney-in-fact for the limited purpose
of executing any such documents after the occurrence of an Event of Default,
such power being coupled with an interest and irrevocable.
(b) Subject to the provisions of the MHP Mortgage, if, at any
time during the term of the SC Loan, there occurs a Total Taking (as hereinafter
defined), Beneficiary shall collect any Condemnation Proceeds, and apply the
same, after payment of Beneficiary's
35
reasonable costs of collection thereof, including reasonable attorneys' fees and
disbursements, to payment of the Debt (but no Yield Maintenance Premium shall be
due), all in such order as Beneficiary shall designate, provided, however, that
-------- -------
except as otherwise provided in the Loan Agreement any such application shall in
no event affect the payments to be made in respect of the Note. Any portion of
any Condemnation Proceeds remaining after the payment in full of the Debt shall
be released by Beneficiary to Grantor. For the purposes of this Paragraph, a
---------
"Total Taking" shall mean any taking or any constructive taking of Grantor's
------------
title to the Premises in Condemnation Proceedings or by agreement by Grantor
which shall, in the reasonable opinion of Beneficiary, render it impracticable
to restore, within six (6) months prior to the Maturity Date, the portion of the
Premises not subject to such taking to a complete architectural unit of
substantially the same economic viability and for the same purposes and uses as
existed immediately prior to the date of the commencement of the Condemnation
Proceedings.
(c) If, at any time during the term of the Loan, there occurs a
taking which is less than a Total Taking (a "Partial Taking"), then, provided
--------------
that no Event of Default exists as of the date of submission of Grantor's claim
in the Condemnation Proceeding with respect to such Partial Taking, Grantor
shall have the right to settle any such claim with respect to any Partial Taking
where the Restoration Cost is less than the Restoration Benchmark, but shall
give prompt written notice of any such claim and settlement to Beneficiary. If
the Restoration Cost equals or exceeds, or, at the outset of such Condemnation
Proceedings, appears to involve a sum which is likely to equal or exceed, in
Beneficiary's reasonable judgment based on professional consultation, the
Restoration Benchmark, then, unless Grantor has obtained the release of this
Deed of Trust as a Condemnation Event Release (as hereinafter defined) in
accordance with the MHP Loan Agreement and/or the Loan Agreement, Beneficiary
shall have the right to participate in the settlement of such claim and all
Condemnation Proceeds relating to such Partial Taking shall be held by
Beneficiary and shall be released to pay the costs of restoration of the
Improvements (a "Condemnation Restoration") subject to and upon satisfaction of
------------------------
the conditions set forth in Paragraphs 13(c) and 13(d) hereof as if such
--------------------------
Condemnation Proceeds constituted Insurance Proceeds and the balance, if any,
shall be paid to Grantor; unless, in Beneficiary's reasonable judgment based on
------
professional consultation, the Condemnation Restoration cannot be completed in
accordance with the conditions of Paragraphs 13(c) and 13(d). In the event that
--------------------------
there exists an Event of Default, or (xx) any of such conditions shall not have
been met, or (yy) the Condemnation Restoration cannot be completed, in
Beneficiary's reasonable judgment based on professional consultation, prior to a
date which is at least six (6) months prior to the Maturity Date, regardless of
compliance with all of the other conditions of Paragraphs 13(c) and 13(d), or
--------------------------
(zz) if the Condemnation Proceeds exceed the cost of the Condemnation
Restoration, Beneficiary, at the discretion of Beneficiary, shall apply the
Condemnation Proceeds, or balance thereof, to payment of the Debt, (but no Yield
Maintenance Premium shall be due), all in such order as Beneficiary shall
designate, provided, however, that except as otherwise provided in the Loan
-------- -------
Agreement, any such application shall in no event affect the schedule of
payments to be made in respect of the Note. If there is any balance of any
Condemnation Proceeds remaining in the hands of Beneficiary after any payment of
the Debt in full, such balance shall be released to Grantor. In the event that
the costs of any permitted Condemnation Restoration, as estimated reasonably by
Beneficiary at any time, shall exceed the net Condemnation Proceeds received by
Beneficiary, Grantor shall deposit such deficiency with Beneficiary.
36
(d) In the event of any taking of all or any portion of the
Mortgaged Property for temporary use or occupancy ("Temporary Taking"), any
----------------
Condemnation Proceeds with respect to such Temporary Taking shall be treated as
Gross Revenues (as defined in the MHP Loan Agreement) and shall be distributed
and applied in the manner contemplated in the MHP Loan Agreement (but only to
the extent that any such Condemnation Proceeds have not been used for
Condemnation Restoration).
(e) Except as otherwise provided in this Paragraph 14(e),
---------------
nothing contained in this Paragraph 14 shall relieve Grantor of its duty to
------------
maintain, repair, replace or restore the Improvements or the Equipment or
rebuild the Improvements, from time to time, following any Condemnation
Proceedings with respect to a Partial Taking or Temporary Taking and nothing in
this Paragraph 14 shall relieve Grantor of its duty to pay the Debt, which shall
------------
be absolute, regardless of any such occurrence with respect to all or any
portion of the Mortgaged Property. Notwithstanding any taking, whether a Total
Taking, a Partial Taking or a Temporary Taking, Grantor and SCLP shall continue
to pay the Debt at the time and in the manner provided for its payment in this
Deed of Trust and the Note, and the Debt shall not be reduced until any award or
payment therefor shall have been actually received by Beneficiary and applied to
the discharge of the Debt. Notwithstanding the foregoing provisions of this
Paragraph 14(e) or anything else contained in this Paragraph 14, if Grantor has
- --------------- ------------
obtained the release of the Premises and the lien of this Deed of Trust and the
MHP Mortgage in accordance with the MHP Loan Agreement and the Loan Agreement by
payment of the applicable Release Price and other amounts, if any, due to obtain
a release under the MHP Loan Agreement and the Loan Agreement, and the taking of
any other actions required by the MHP Loan Agreement and the Loan Agreement with
respect thereto (the payment of such amounts and the taking of such actions
being, with respect to any Condemnation Proceeding(s), being collectively called
a "Condemnation Event Release"), then Grantor shall not be required to undertake
--------------------------
the Condemnation Restoration described herein. As set forth in the MHP Loan
Agreement and the Loan Agreement, the payment of amounts with respect to a
Condemnation Event Release shall not require the payment of a Yield Maintenance
Premium, and any Condemnation Proceeds paid to Beneficiary shall be credited
against payments of the Release Price and any other amounts due with respect to
a Condemnation Event Release required to be paid by the provisions of the MHP
Loan Agreement and the Loan Agreement. It is recognized that, with respect to a
Partial Taking or a Total Taking, depending on the amount of the award from the
Governmental Authority available to pay the Release Price and any other amounts
due under the MHP Loan Agreement and/or the Loan Agreement, that Grantor may
have to pay to Beneficiary monies in addition to the total available amount of
the Condemnation Proceeds to obtain a Condemnation Event Release.
(f) If a claim under any Condemnation Proceedings arising during
the term of this Deed of Trust is not paid until after the extinguishment of the
Debt, whether by foreclosure or otherwise, and Beneficiary shall not have
received the entire amount of the Debt outstanding at the time of such
extinguishment, then the Condemnation Proceeds relating to any such Condemnation
Proceedings, to the extent of the amount of the Debt not so received, shall be
paid to Beneficiary and be the property of Beneficiary; and Grantor hereby
assigns, transfers and sets over to Beneficiary all of Grantor's right, title
and interest in and to such Condemnation Proceeds. The balance of such
Condemnation Proceeds, if any, shall be paid to and be the
37
property of Grantor. The provisions of this Paragraph shall survive the
---------
termination of this Deed of Trust by foreclosure or otherwise as a consequence
of the rights and remedies of Beneficiary hereunder after an Event of Default.
(g) All Condemnation Proceeds and other sums deposited with
Beneficiary pursuant to this Paragraph, until expended or applied as provided in
---------
this Paragraph, shall constitute additional security for the Debt and shall be
---------
invested in Permitted Investments with income thereon inuring to the benefit of
Grantor.
15. Compliance With Agreements, Laws, etc. Subject to the provisions
--------------------------------------
of Paragraph 16 hereof relating to permitted contests, Grantor agrees to perform
------------
and comply, and instruct the tenants under any Leases to comply, with all
covenants, agreements and restrictions affecting Grantor, the Mortgaged Property
or any portion thereof, the nonperformance of which would materially impair
Grantor's ability to meet its obligations under any of the SC Transaction
Documents executed by Grantor or would impair the substantial realization by
Beneficiary of the benefits and rights conferred hereunder or under any of the
SC Transaction Documents executed by Grantor, and with all Legal Requirements,
whether the same be directed to the erection, repair, manner of use or
structural alteration of the Improvements or otherwise and to procure and
maintain all licenses or other authorizations required for the proper use,
maintenance and operation of the Mortgaged Property. For the purposes hereof,
"Legal Requirements" shall mean all of the following, whether or not a note or
------------------
notice of violation has been entered, issued or received as a consequence of
non-compliance therewith:
(a) statutes, laws, rules, rulings, orders, regulations,
ordinances, judgments, decrees and injunctions of any Governmental
Authority (including, without limitation, Environmental Laws, the
Americans with Disabilities Act (P.L. 101-336, 42 U.S.C. ss. 12,101
et seq.), and fire, health, handicapped access, sanitation, ecological,
-- ---
historic, landmark, zoning, wetlands and building laws and codes) in
any way applicable to Grantor or the Mortgaged Property or any portion
thereof, or to the ownership, use, development, improvement, occupancy,
possession, operation or maintenance of the Improvements;
(b) requirements of the local Board of Fire Underwriters or
similar body acting in and for the locality in which the Premises are
situated;
(c) requirements of each insurance policy covering or applicable
to all or any portion of the Mortgaged Property or the ownership, use,
development, improvement, occupancy, possession, operation or
maintenance thereof and all requirements of the issuer of each such
policy;
(d) requirements of each Permit; and
(e) the Ground Lease, all REAs and all covenants, agreements,
regulations, restrictions and other encumbrances contained in any
instrument either of record or known to Grantor at any time affecting
the Mortgaged Property or any portion thereof or the
38
ownership, use, development, improvement, occupancy, possession,
operation or maintenance thereof, in each case whether now or hereafter
enacted or in force. Grantor agrees to enforce all material provisions
of the Ground Lease and all REAs in accordance with their terms and to
comply with all reasonable requests from Beneficiary with respect to
such enforcement.
16. Contest of Impositions, Legal Requirements and Liens.
----------------------------------------------------
Notwithstanding anything to the contrary contained in this Deed of Trust,
Grantor shall have the right to contest, at its own expense, by appropriate
legal proceedings conducted in good faith and with due diligence, the amount or
validity (or the applicability to Grantor or the Mortgaged Property or to the
Note or this Deed of Trust) of any Impositions or encumbrances referred to
herein (other than this Deed of Trust and the other SC Transaction Documents) or
any Legal Requirements, provided that (a) Grantor gives Beneficiary timely
-------- ----
notice of its intention to contest the same and keeps Beneficiary regularly
advised as to the status of such proceedings, (b) the commencement of such
proceedings shall suspend the collection or enforcement of the matter under
contest, (c) there shall be no impairment of the lien of this Deed of Trust or
undue interference with the normal conduct of business at the Mortgaged
Property, (d) neither the Mortgaged Property, nor any Rents therefrom, nor any
part thereof or interest therein, would be in any immediate danger of being
sold, forfeited, attached, condemned, vacated or lost, (e) neither Grantor nor
Beneficiary would be potentially subject to criminal liability or be in imminent
danger of civil liability for failure to comply therewith pending the outcome of
such proceedings, (f) in the case of an Imposition, Grantor shall have either
(i) paid the amount in dispute prior to instituting such contest, in which event
the notice requirement of clause (a) of this Paragraph shall be satisfied by
---------- ---------
giving notice prior to initiating such contest rather than prior to making
payment, (ii) set aside on its books such reserves with respect thereto as may
be required by sound accounting principles or, at Beneficiary's request,
furnished security in an amount equal to 125% of the disputed amount, in rated
securities, cash or bond, to Beneficiary during the pendency of such
proceedings, and (g) if such contest be finally resolved against Grantor,
Grantor shall promptly pay the amount required to be paid, together with all
interest and penalties accrued thereon, and otherwise comply with the applicable
requirement, which payment may be made from the security furnished to
Beneficiary pursuant to clause (ii), and any excess thereof following payment in
full of the applicable imposition shall be returned to Grantor. Grantor shall
indemnify and save Beneficiary harmless from and against any liability, loss,
damage, cost or expense of any kind that may be imposed upon Beneficiary in
connection with any such contest and any determination resulting therefrom. If
an Event of Default under this Deed of Trust or any other Transaction Document
shall occur and be continuing during any such proceeding, Grantor shall pay or
cause to be paid to Beneficiary all refunds resulting from such proceeding which
shall be applied to the payment of the Debt in such order and priority as
Beneficiary shall determine in its sole discretion consistent with the SC
Transaction Documents. Following the occurrence of an Event of Default and until
the Debt has been paid in full, and on five (5) days' prior written notice to
Grantor (so long as no time period for seeking reductions passes or lapses in
such 5-day period, but otherwise on such shorter notices as will not allow any
such time period to pass or lapse) Grantor hereby appoints Beneficiary as its
attorney-in-fact to seek reductions in the assessed valuation of the Mortgaged
Property for real property tax purposes or for other purposes and to prosecute
any
39
action or proceeding in connection therewith. This power of attorney is a
power coupled with an interest and is irrevocable.
17. Cure of Defaults by Beneficiary. If Grantor shall:
-------------------------------
(a) default in the payment of any Impositions as herein required
(subject to the provisions of Paragraph 16 relating to permitted
------------
contests);
(b) fail to keep in any material respect the Improvements,
Equipment and Personal Property in good repair and such failure shall
not be cured within any applicable grace period;
(c) fail or refuse to insure the Mortgaged Property as herein
required;
(d) fail to pay and satisfy liens or encumbrances against the
Mortgaged Property in accordance with the terms of this Deed of Trust
(subject to the provisions of Paragraph 16 relating to permitted
------------
contests);
(e) fail to pay any other sum or make any other deposit
elsewhere in this Deed of Trust required to be paid or deposited and
such failure shall not be cured within any applicable grace period; or
(f) otherwise fail to make any payment or fail in any material
respect to perform any act required to be made or performed hereunder,
and such failure shall not be cured within any applicable grace period;
then Beneficiary, following not less than five (5) Business Days' prior
written notice to Grantor (or such shorter notice as shall be
reasonable under the circumstances, including no notice in the case of
an emergency in which no notice may feasibly be given) and without
waiving or releasing Grantor from any obligation or default hereunder,
may (without having any obligation to do so):
(i) pay such Impositions or redeem the Mortgaged Property
from any tax sale or forfeiture or purchase any tax title
obtained, or that shall be obtained, thereon without inquiring
into the validity or invalidity of any such Impositions or tax
deed;
(ii) make repairs to the Mortgaged Property;
(iii) procure such insurance and pay such insurance premium
charges; it being agreed that the power of attorney granted by
---------------
Grantor to Beneficiary pursuant to the final clause of this
Paragraph 17 shall apply to the matters set forth in the
------------
immediately preceding sub-clauses (i), (ii) and (iii);
and, additionally, in accordance with and consistent with the
provisions of this Paragraph 17 and the contractual agreements between
------------
Grantor and Beneficiary set forth in the
40
SC Transaction Documents generally, but without the right to utilize
the power of attorney set forth in the final clause of this
Paragraph 17, Beneficiary may:
------------
(iv) pay or settle any and all suits or claims for such
liens or satisfy any such encumbrances or any other claims that
may be made against the Mortgaged Property or any part thereof;
(v) pay any other sum or make any other deposit herein
required to be paid or made by Grantor; or
(vi) pay any such sum or perform any such act for the
account and at the expense of Grantor, and enter upon the
Mortgaged Property upon reasonable notice and at reasonable times
for any such purpose and take all such action thereon as, in the
reasonable opinion of Beneficiary, may be necessary or appropriate
therefor.
All monies paid for any of the purposes set forth in this Deed of Trust
and all expenses paid or incurred in connection therewith, including
reasonable attorneys' fees and disbursements and any other monies
disbursed or advanced by Beneficiary to protect the lien of this Deed
of Trust, or expended pursuant to any of sub-clause (i) through (vi)
above, shall be due and payable by Grantor to Beneficiary within ten
(10) days after written demand therefor and, if not paid within such
ten (10) day period, shall bear inter est, from and including the date
of disbursement or advance to and including the date of repayment by
Grantor, at the Default Rate, and to the extent that such amounts and
costs paid by Beneficiary shall constitute payment of (A) Impositions,
(B) insurance premiums, (C) expenses incurred in connection with
upholding the lien of this Deed of Trust, includ ing, without
limitation, the expenses of any litigation to prosecute or defend the
rights and liens created by this Deed of Trust, or (D) any amounts,
costs or charges to which Bene ficiary becomes subrogated, upon
payment, whether under recognized principles of law or equity or
express statutory authority; then, and in each such event, such
amounts, costs and charges and interest thereon shall be added to the
Debt and be secured by this Deed of Trust and the Other SC Mortgages.
For the purpose of carrying out the provisions and exercising the
rights, powers and privileges granted by sub-clauses (i) or (ii) or
(iii) of this Paragraph, Grantor hereby irrevocably constitutes and
---------
appoints Beneficiary, following an Event of Default, its true and
lawful attorney-in-fact to execute, acknowledge and deliver any
instruments and do and perform any acts such as are referred to in this
Paragraph, in the name and on behalf of Grantor, with full power of
---------
substitution vested in Beneficiary to designate another entity or
entities to exercise any power and perform any function which
Beneficiary could perform pursuant to the foregoing grant. This power
of attorney is a power coupled with an interest and is irrevocable.
18. Indemnity. Subject to the Non-Recourse provisions of the final
---------
sentence of this Paragraph 18, Grantor hereby indemnifies Beneficiary and its
------------
directors, officers, agents and employees (collectively the "Indemnified
-----------
Parties"), and saves each of them harmless from and against all liabilities
- -------
(other than tax liability imposed on Beneficiary for any income earned by
41
reason of the Note or any other SC Transaction Document) claims, demands,
actions, proceedings, suits, causes of action, injuries, obligations, loss,
actual damages (including, without limitation, Beneficiary's costs and expenses
related thereto and any applicable Yield Maintenance Premium), fines, penalties,
judgments, costs, expenses (including, without limitation, reasonable
architects', engineers', accountants', consultants' and attorneys' fees and
disbursements) expenses of bonding liens, and other litigation expenses,
incurred by, imposed upon or asserted against the Indemnified Parties (except as
a result of the willful, wrongful acts or omissions or gross negligence of the
applicable Indemnified Party) in connection with or arising out of:
(a) Beneficiary's or Trustee's interest in this Deed of Trust,
the Assignment, the Note, any other SC Transaction Document, or any
other document or instrument hereafter executed by Grantor and
delivered to Beneficiary in connection with the Debt or any
restructuring thereof;
(b) any acts or omissions of Beneficiary or Trustee in
connection with the reasonable exercise by Beneficiary or Trustee of
any right, power or remedy available to Beneficiary or Trustee under
this Deed of Trust or any other SC Transaction Document, including,
without limitation, any action or proceeding to protect the lien of
this Deed of Trust or to foreclose this Deed of Trust;
(c) any failure by Grantor to comply with any terms, conditions
or other provisions set forth in this Deed of Trust or any other SC
Transaction Document;
(d) any use, non-use, possession, occupancy, alteration, repair,
condition (patent or latent), operation, maintenance, or management of
the Mortgaged Property or any portion thereof;
(e) any accident, injury (including death), or damage to any
person or property occurring in, on or about the Mortgaged Property or
any part thereof, whether resulting from any act, omission or
negligence of Grantor, its agents, employees, contractors, lessees,
sublessees, licensees, invitees, or otherwise;
(f) any misrepresentation by Grantor, or its general partner
contained in this Deed of Trust or in any other SC Transaction
Document;
(g) any claim for any premium or other charge or any brokerage
commission or other compensation by any person acting as such with
respect to the SC Loan and this Deed of Trust and claiming through
Grantor but not through Beneficiary;
(h) any capital improvements or other work or thing done in, on
or about the Mortgaged Property or any part thereof (except any of the
foregoing that are directed by Beneficiary);
42
(i) any past, current and/or future offer for the purchase or
sale of equity interests in Grantor, including, without limitation,
liabilities under any applicable securities or blue sky laws; or
(j) any tax attributable to the ownership, assignment,
execution, delivery, filing, recording or enforcement of any of the SC
Transaction Documents.
Nothing contained in this Paragraph 18, however, shall impose upon Grantor the
------------
costs of the Securitization which are, pursuant to the Loan Agreement, to be
paid by Beneficiary. All sums payable to any of the Indemnified Parties under
this Paragraph 18 shall be deemed a part of the Debt, shall be paid by Grantor
------------
to the applicable Indemnified Party within ten (10) days after written demand
(unless another period is expressly set forth in this Deed of Trust or another
SC Transaction Document) and, if not paid within such ten (10) day or other
specified period, shall accrue interest at the Default Rate from and including
the date of disbursement or advance by the applicable Indemnified Party to and
including the date of repayment by Grantor. Grantor's obligations under this
Paragraph 18 shall, until the expiration of all applicable statutes and periods
- ------------
of limitation, if any, survive payment in full of the Note and any discharge,
release or satisfaction of this Deed of Trust, any complete or partial
foreclosure of this Deed of Trust and/or the delivery of one or more deeds in
lieu of any such foreclosure. Grantor's obligations under this Paragraph 18
------------
shall be Non-Recourse (as such term is defined in the Loan Agreement); provided
that nothing contained herein shall be deemed to be in derogation of any right
or remedy of Beneficiary and/or Trustee under any SC Transaction Document which,
by its express terms, is a right or remedy which is not Non-Recourse as to
Grantor.
19. Events of Default.
-----------------
(a) Each of the following events shall constitute an "Event of
--------
Default" hereunder:
- -------
(i) an "Event of Default", as such term is defined in the
Loan Agreement;
(ii) failure of Grantor to pay on the due date any payment
due under the Note;
(iii) failure by Grantor to perform or observe in any
material respect any other covenant, obligation, condition or provision
hereunder or under any of the Other SC Mortgages which failure
continues unremedied for a period of thirty (30) days after writ ten
notice thereof to Grantor requiring the same to be remedied; provided,
--------
however, that if such failure is susceptible of cure but cannot be
-------
cured within such thirty (30) day period and provided Grantor has
within such thirty (30) day period commenced and is diligently
prosecuting such cure, such thirty (30) day period shall be extended to
not later than one hundred eighty (180) days after the date on which
Grantor received such written notice;
43
(iv) any default beyond any applicable grace period under
any lien or deed of trust encumbering any part of the Mortgaged
Property, whether senior or junior in lien to this Deed of Trust and
whether now or hereafter held by Beneficiary or any other party;
(v) if a default beyond any applicable notice and/or grace
period occurs under any fee mortgage in respect of the Land and if
Beneficiary shall be made a party in any action or proceeding in
connection with any such fee mortgage, including, without limitation, a
foreclosure or similar proceeding, unless the holder of such fee
mortgage has agreed not to disturb Grantor or Grantor provides evidence
to the satisfaction of Beneficiary that such fee mortgage is
subordinate to the Ground Lease and this Deed of Trust and the MHP
Mortgage in accordance with applicable local law;
(vi) if an event of default or an event which with the
giving of notice or passage of time or both would constitute an event
of default occurs under the Ground Lease or if the Ground Lease
terminates for any reason whatsoever;
(vii) if any provision of this Deed of Trust or any other
SC Transaction Documents conflicts with any provision of the Ground
Lease and the Fee Owner or any other party having rights under the
Ground Lease materially hinders or prevents Trustee or Beneficiary from
exercising its rights, remedies and privileges under this Deed of Trust
or other SC Transaction Documents, including, without limitation, its
rights under Paragraph 13(d) and Paragraph 14(c) hereof; or
--------------- ---------------
(viii) an Event of Default under the MHP Loan Agreement
and/or MHP Mortgage.
(b) Upon the occurrence of an Event of Default, Beneficiary
may, at its option, declare the entire unpaid balance of the Debt to be
forthwith due and payable, and thereupon such balance shall become so due and
payable without presentment, protest or further demand or notice of any kind,
all of which are hereby expressly waived, and Grantor or SCLP will forthwith pay
to Beneficiary the entire Debt, including principal of and interest accrued on
the Note and, to the extent permitted by law, the Yield Maintenance Premium, and
all other premiums and charges, if any, provided in the Note, this Deed of Trust
and the other SC Transaction Documents; provided, however, that if at any time
-------- -------
prior to the Maturity Date the balance of the Debt shall become so due and
payable, and all arrears of interest and other charges of any kind due as part
of the Debt (with interest so far as may be lawful on any overdue installments
of interest at the Default Rate) shall be paid, and all defaults (other than the
payment of principal hereunder which has been so declared due and payable) shall
have been cured or the cure thereof secured to the sole satisfaction of
Beneficiary or other provision deemed by Beneficiary to be adequate shall be
made therefor, then and in such case Beneficiary, in its sole discretion, and by
written notice delivered to Grantor, may waive such Event of Default and its
consequences and rescind or annul such declaration, but no such waiver shall
extend to or affect any subsequent default, or impair any right consequent
thereon.
44
(c) To the extent that a default under this Deed of Trust, any
of the Other SC Mortgages or any of the other SC Transaction Documents is not
cured within the applicable notice and cure period, if any, specified herein or
therein, the same shall not constitute an Event of Default hereunder or
thereunder, as the case may be, if such default is subsequently cured and such
cure is accepted in writing by Beneficiary or if such default is subsequently
waived in writing by Beneficiary and any rights or remedies available to
Beneficiary or Trustee hereunder or under any of the other SC Transaction
Documents on account of any such Event of Default so cured and accepted or
waived shall thereupon terminate (but such remedies shall continue to be
available in connection with any subsequent or other Events of Default, whether
of like or unlike nature).
20. Default Rate. Upon an Event of Default, Beneficiary shall be
------------
entitled to receive and Grantor and SCLP shall pay interest on the entire unpaid
principal sum (including, without limitation and to the extent permitted by law,
any accrued and unpaid interest thereon) at the "Default Rate" (as defined in
------------
the Note) for the duration of such default (unless Beneficiary has, at its
option, declared the entire unpaid balance of the Debt to be forthwith due and
payable in which case interest shall continue to be paid at the Default Rate
until the Debt has been paid in full). In no event shall the Default Rate exceed
the maximum rate allowed by law. Any interest that accrues under any of the SC
Transaction Documents at the Default Rate shall be payable whether accruing
before or after entry of any judgment.
21. Remedies. If any one or more of the Events of Default shall
--------
occur, then and in any such event Beneficiary shall have the right of
acceleration and all other remedies provided in this Deed of Trust or in the
Note or otherwise provided in any SC Transaction Document, by law or statute or
in equity, all of which rights and remedies shall, to the fullest extent
permitted by law, be cumulative. To the extent the laws of the State limit or
deny (i) the availability of the exercise of any of the remedies set forth
below, including without limitation, the remedies involving a power of sale on
the part of the Beneficiary and terms of this Deed of Trust, or (ii) the
enforcement of waivers and indemnities made by Grantor, such remedies, waivers
or indemnities shall be exercisable or enforceable, any provisions in this Deed
of Trust to the contrary notwithstanding, if, and only to the extent, permitted
by the laws of the State in force at the time of the exercise of such remedies
or the enforcement of such waivers or indemnities without regard to the
enforceability of such remedies, waivers or indemnities at the time of execution
and delivery of this Deed of Trust. Such rights and remedies of Beneficiary and
Trustee shall include, without limitation, the following:
(a) Possession, Management and Income. Grantor, upon written
---------------------------------
demand of Beneficiary, shall forthwith surrender to Beneficiary or
Trustee, or both of them, the actual possession of the Mortgaged
Property, and Beneficiary or Trustee and such officers or agents as
either may appoint, (i) may enter and take possession of the Mortgaged
Property together with the books, papers and accounts of Grantor
relating thereto, (ii) may dispossess Grantor, its agents and servants
and all other persons therefrom (excluding bona fide hotel guests),
(iii) may hold, operate and manage the Mortgaged Property and from time
to time make all necessary repairs and such alterations, additions,
advances and improvements as Beneficiary shall deem prudent, (iv) may
receive the Rents thereof and
45
exercise all rights and powers of Grantor with respect to the Mortgaged
Property and the Improvements, whether in the name of Grantor or
otherwise, including, without limitation, the right to make, cancel,
enforce or modify Leases, obtain and evict tenants (in accordance with
applicable law), and demand, sue for, collect and receive all Rents and
may pay therefrom all costs and expenses of so taking, holding and
managing the Mortgaged Property, including, without limitation,
reasonable compensation to Beneficiary's or Trustee's, or both's,
agents and attorneys, all prior or coordinate liens and encumbrances,
all Impositions and other assessments and other charges then due or
thereafter accruing, and all expenses of such repairs, alterations,
additions, improvements and other disbursements made by Beneficiary or
Trustee pursuant to the terms hereof, and Beneficiary may apply the
remainder of the monies so received by it to the payment of the unpaid
principal of, and interest on, the Note, the Yield Maintenance Premium
and other items of the Debt then due and payable, and (v) may succeed
to all the rights of Grantor, including any rights to unearned
premiums, in and to any insurance policies covering all or any portion
of the Premises, the Improvements, the Personal Property and/or the
Equipment, including the right to receive Refunds, Insurance Proceeds
and Condemnation Proceeds which would otherwise be payable to Grantor
pursuant to this Deed of Trust. Beneficiary and Trustee shall not be
subject to any liability for, or by reason of, any such entry, taking
possession, exclusion, holding, operation or management, except for
willful, wrongful acts or omissions or gross negligence of Beneficiary
or Trustee or their officers, directors, agents, contractors or
employees;
(b) Partial Foreclosure. Beneficiary, at its option, may upon
-------------------
five (5) days' notice or such longer notice period as may be required
by statute institute proceedings for the complete or partial
foreclosure of this Deed of Trust or take such steps to protect and
enforce its rights whether by action, suit or proceeding in equity or
at law for the specific performance of any covenant, condition or
agreement in the Note or in this Deed of Trust (without being required
to foreclose this Deed of Trust), or in aid of the execution of any
power herein granted, or for any foreclosure hereunder, or for the
enforcement of any other appropriate legal or equitable remedy or
otherwise as Beneficiary shall elect, including, without limitation, to
direct Trustee to foreclose this Deed of Trust for any portion of the
Debt which is then due and payable; provided, however, that if a
-------- -------
partial foreclosure sale is made, such sale shall be subject to the
continuing lien of the SC Transaction Documents for the unmatured part
of the Debt; and such sale shall not in any manner affect the unmatured
part of the Debt, but as to such unmatured part thereof, and the lien
thereon, the same shall remain in full force and effect as though no
foreclosure had occurred. Several foreclosure sales may be made
pursuant to partial foreclosures without exhausting the right of full
or partial foreclosure sale for any unmatured part of the Debt, it
being the purpose to provide for a partial foreclosure sale of the Debt
for any matured portion of the Debt without exhausting the power to
foreclose and to sell the Mortgaged Property pursuant to such partial
foreclosure for any other part of the Debt, whether matured at the time
or subsequently maturing, and without exhausting any right of
acceleration and full foreclosure. Notwithstanding the filing of any
partial foreclosure or entry of a decree of sale therein, Beneficiary
may elect at any time prior to a foreclosure sale pursuant to such
decree to discontinue such partial
46
foreclosure and to accelerate the Debt by reason of any uncured Event
of Default upon which such partial foreclosure was predicated or by
reason of any other Events of Default and proceed with full foreclosure
proceedings;
(c) Suits. To the extent permitted by law, Beneficiary, at its
-----
option, may, either with or without first taking possession, direct
Trustee to proceed by suit or suits in equity and/or at law, or by any
other appropriate remedy or proceeding, to protect and enforce
Beneficiary's and/or Trustee's rights hereunder whether for the
specific performance (to the extent permitted by law) of any covenant
or agreement contained herein or in the Note or for an injunction
against the violation of any of the terms hereof or thereof or in aid
of the exercise of any right, power or remedy granted to Beneficiary
herein or therein, or to enforce the payment of the Note, or to
foreclose the lien and security interest of this Deed of Trust against
the Mortgaged Property or any part thereof and to have all of the
Mortgaged Property or any part thereof sold in one or more sales (as an
entirety or in parcels) under the judgment or decree of a court of
competent jurisdiction or otherwise. All rights of action under this
Deed of Trust or in respect of the Note may be enforced by Beneficiary
or Trustee, without the production of the Note and without the
possession thereof (to the extent Beneficiary or its agent gives a bona
----
fide lost note affidavit in compliance with local law) at any trial or
----
other proceeding relative thereto to the extent permitted by law;
(d) Receiver. Subject to the provisions of the MHP Mortgage, to
--------
the extent permitted by law and without the necessity to prove the
value or occupancy of the security or the solvency or insolvency of any
person then legally or equitably liable for payment of the Debt,
Beneficiary shall be entitled as a matter of right, ex parte and
without notice, to the appointment of a receiver to enter upon and take
possession of the Mortgaged Property, perform all acts necessary or
useful for the operation, use and maintenance of the Mortgaged Property
and to collect all Rents thereof and apply the same and to exercise
such other powers as are permitted by applicable law and the court
making such appointment may direct and Grantor hereby consents to the
appointment of such receiver. The expenses, including receiver's fees,
reasonable attorneys' fees, costs and disbursements and agent's
compensation, incurred pursuant to the powers herein contained shall be
secured by this Deed of Trust. The right to enter and take possession
of and to manage and operate the Mortgaged Property, and to collect the
Rents, whether by a receiver or otherwise, shall be cumulative to any
other right or remedy hereunder or afforded by law, and may be
exercised concurrently therewith or independently thereof. Beneficiary
shall be liable to account only for such Rents actually received by
Beneficiary, whether received pursuant to this subparagraph 21(d) or
------------------
subparagraph 21(a). Notwithstanding the appointment of any receiver or
------------------
other custodian, Beneficiary shall be entitled as pledgee to the
possession and control of any cash, deposits, or instruments at the
time held by or payable or deliverable under the terms of this Deed of
Trust to Beneficiary. Without limiting any of Beneficiary's rights
hereunder, but subject to the rights of the holder of the MHP Mortgage,
Beneficiary or Trustee shall be entitled, as a matter of strict right,
without notice and upon ex parte application, and without regard to the
-- -----
value or occupancy of the security, or the solvency of Grantor, or the
adequacy of the
47
Mortgaged Property or other collateral as security for the Note, to
have a receiver appointed to enter upon and take possession of the
Mortgaged Property, collect the Rents and revenues and apply the same
as the court may direct, such receiver to have all the rights and
powers permitted under the laws of the jurisdiction in which the
Mortgaged Property is located. Grantor hereby waives any requirements
on the receiver or Beneficiary to post any surety or other bond.
Beneficiary or the receiver may also take possession of, and for these
purposes use, any and all personalty which is a part of the Mortgaged
Property and used by Grantor in the rental or leasing thereof or any
part thereof. The expense (including the receivers fees, counsel fees,
costs and agents compensation) incurred pursuant to the powers herein
contained shall be secured by this Deed of Trust. To the extent not
prohibited by applicable law, Beneficiary shall (after payment of all
costs and expenses incurred) apply such Rents and revenues received by
it in the order set forth in Paragraph 23 of this Deed of Trust. The
------------
right to enter and take possession of the Mortgaged Property, to manage
and operate the same, and to collect the Rents and revenues, whether by
receiver or otherwise, shall be cumulative to any other right or remedy
hereunder or afforded by law, and may be exercised concurrently
therewith or independently thereof. Beneficiary shall be liable to
account only for such Rents and revenues actually received by
Beneficiary.
(e) Sale in One Parcel. In the event of a sale, the Mortgaged
------------------
Property may be sold in one parcel. Grantor hereby waives its rights,
if any, to require that the Mortgaged Property be sold as separate
units, tracts or estates;
(f) Security Interest. In addition to the rights and remedies of
-----------------
Beneficiary and Trustee set forth herein and in the Note and the other
SC Transaction Documents, and not in lieu thereof, Beneficiary shall
have all of the rights and remedies of a holder of a security interest
under the Code, or under other applicable law with respect to the
Security Interest Property and all rights and remedies provided or
referred to herein and therein, shall, to the fullest extent permitted
by applicable law, be cumulative;
(g) Foreclosure. Beneficiary, at its option, may direct Trustee
-----------
to institute an action to foreclose this Deed of Trust upon five (5)
days' notice or such longer period for notice required by statute, or
take such other action as may be permitted and available to
Beneficiary, at law or in equity, for the enforcement of the SC
Transaction Documents and the realization on the Mortgaged Property or
any other security held by Beneficiary, and proceed thereon through to
final judgment and execution thereon for the Debt, including, without
limitation, the Yield Maintenance Premium, all accrued and unpaid
interest and all costs of enforcement. In furtherance thereof, to the
extent permitted by applicable law, Beneficiary and/or Trustee shall
have the full power and right to sell the Mortgaged Property and all
estate, claim, demand, right, title and interest of Grantor therein and
right of redemption thereof pursuant to an assent to a decree or
otherwise, at one or more sales, as an entirety or in parcels, at such
time and place, upon such terms and after such notice thereof as may be
required or permitted by law or statute or in equity, it being agreed
that in the event of a sale, by foreclosure or otherwise, of less than
all of the Mortgaged Property, the SC Transaction Documents shall
continue as a lien on
48
the remaining portion of the Mortgaged Property. Grantor hereby assents
to the passage of a decree for the sale of the Mortgaged Property upon
the occurrence of an Event of Default by any court having jurisdiction;
and
(h) Power of Sale. To the extent permitted by applicable law,
-------------
Trustee may sell, release and convey the Premises at public sale and
execute and deliver to the purchasers at such sale, good and sufficient
deeds of the conveyance and shall render any surplus funds, after
payment in full of the Debt and the expenses of such sale, including
reasonable attorneys' fees as provided by law, to Grantor. Without
limiting any of Beneficiary's rights hereunder, Beneficiary or Trustee
may cause the Mortgaged Property and all estate, right, title and
interest, claim and demand therein, or any part thereof to be sold as
follows:
(i) Beneficiary may proceed as if all of the Mortgaged
Property were real property, in accordance with (iv) below, or
Beneficiary may elect to treat any of the Mortgaged Property which
consists of a right in action or which is property that can be
severed from the Premises without causing structural damage
thereto as if the same were personal property, and dispose of the
same in accordance with (iii) below, separate and apart from the
sale of real property, with the remainder of the Mortgaged
Property being treated as real property;
(ii) Beneficiary may cause any such sale or other
disposition to be conducted immediately following the expiration
of any grace period, if any, herein provided (or required by law)
or Beneficiary may delay any such sale or other disposition for
such period of time as Beneficiary deems to be in its best
interest. Should Beneficiary desire that more than one such sale
or other disposition be conducted, Beneficiary may, at its option,
cause the same to be conducted simultaneously, or successively on
the same day, or at such different days or times and in such order
as Beneficiary may deem to be in its best interest;
(iii) should Beneficiary elect to cause any of the Mortgaged
Property to be disposed of as personal property as permitted by
(i) above, it may dispose of any part thereof in any manner now or
hereafter permitted by Division 9 of the Code or in accordance
with any other remedy provided by law. Both Grantor and
Beneficiary shall be eligible to purchase any part or all of such
property at any such disposition. Any such disposition may be
either public or private as Beneficiary may so elect, subject to
the provisions of the Code. Beneficiary shall give Grantor at
least five (5) days' prior written notice of the time and place of
any public sale or other disposition of such property or of the
time at or after which any private sale or any other intended
disposition is to be made, and if such notice is sent to Grantor
it shall constitute reasonable notice to Grantor;
(iv) should Beneficiary elect to sell the Mortgaged Property
which is real property or which Beneficiary has elected to treat
as real property, upon such election Beneficiary or Trustee shall
give such notice of default and election to sell
49
as may then be required by law. Thereafter, upon the expiration of
such time and the giving of such notice of sale as may then be
required by law, Trustee, at the time and place specified in the
notice of sale, shall sell such Mortgaged Property, or any portion
thereof specified by Beneficiary, at public auction to the highest
bidder for cash in lawful money of the United States, subject,
however, to the provisions of (v) below. Beneficiary may, from
time to time, postpone the sale by public announcement thereof at
the time and place noticed therefor. If the Mortgaged Property
consists of several lots or parcels, Beneficiary may designate the
order in which such lots or parcels may be offered for sale or
sold, and may direct that such property be sold in one parcel, as
an entirety, or in such parcels as Beneficiary, in its sole
discretion, may elect. Grantor expressly waives any right which it
may have to direct the order in which any of the Mortgaged
Property shall be sold, and its rights, if any, to require that
the Mortgaged Property be sold as separate tracts, lots, units or
parcels. Any person, including Grantor, Trustee or Beneficiary,
may purchase at the sale. Upon any sale, Trustee shall execute and
deliver to the purchaser or purchasers a deed or deeds conveying
the property so sold, but without any covenant or warranty
whatsoever, express or implied, whereupon such purchaser or
purchasers shall be let into immediate possession;
(v) upon any sale of the Mortgaged Property, whether made
under a power of sale herein granted or pursuant to judicial
proceedings, if the holder of the Note is a purchaser at such
sale, it shall be entitled to use and apply all or any portion of
the indebtedness then secured hereby for or in settlement or
payment of all or any portion of the purchase price of the
property purchased; and
(vi) in the event of a sale or other disposition of any such
Mortgaged Property or any part thereof, and the execution of a
deed or other conveyance pursuant thereto, the recitals in the
deed or deeds of facts (such as of a default, the giving of notice
of default and notice of sale, demand that such sale should be
made, postponement of sale, terms of sale, sale, purchaser,
payment of purchase money, and any other fact affecting the
regularity or validity of such sale or disposition) shall be
conclusive proof of the truth of such facts; and any such deed or
conveyance shall be conclusive against all persons as to such
facts recited therein.
Trustee shall be entitled, in its sole discretion, to exercise all or
any of the rights and remedies provided herein or in any of the other
SC Transaction Documents or which may be given by statute, at law or in
equity, or otherwise in such order and manner as Trustee shall elect,
without impairing Beneficiary's or Trustee's rights under any of the SC
Transaction Documents and without affecting the liability of any
person, firm, corporation, or other entity for the sums secured by the
SC Transaction Documents.
50
22. Authorization to Execute Deeds; Adjournments.
--------------------------------------------
(a) Grantor irrevocably appoints Beneficiary as its true and
lawful attorney-in-fact, which appointment is coupled with an interest, for the
purpose, following an Event of Default and the establishment of the maturity of
the Debt (in accordance with the provisions of this Deed of Trust or by a court
of competent jurisdiction), of effectuating, to the extent permitted by
applicable law of the State, any sale, assignment, transfer or delivery of the
Mortgaged Property or any part thereof or any interest therein for the
enforcement of this Deed of Trust as Beneficiary may consider reasonably
necessary or appropriate, with full power of substitution.
(b) Beneficiary may adjourn, or direct Trustee to adjourn, from
time to time, in accordance with applicable law, any sale to be made by it under
or by virtue of this Deed of Trust by announcement at the time and place
appointed for such sale or for such adjourned sale or sales and, except as
otherwise provided by any applicable provision of law, Beneficiary, without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.
(c) In the event that Beneficiary has proceeded with the
enforcement of any right under this Deed of Trust by foreclosure sale or
otherwise and such proceedings shall have been discontinued or abandoned for any
reason or shall have been determined adversely, then, in every such case,
Grantor and Beneficiary shall be restored to their respective former positions
and rights hereunder with respect to the Mortgaged Property, subject to the lien
hereof.
23. Proceeds of Foreclosure Sale. In any foreclosure of this Deed of
----------------------------
Trust there shall be allowed and included in the decree of sale, to be paid, in
the following order, out of the rents, revenues, issues, income, products and
profits derived from the Mortgaged Property or the proceeds of such sale:
First: All court costs, allowances authorized or permitted by
-----
statute or a court, Trustee's fees and charges, fees and expenses of
receivers, reasonable attorneys' fees and disbursements (which may
include reasonable, actual billed costs, if any, of any attorney in the
employ of Beneficiary or Trustee and fees for services performed by
legal assistants and other non-lawyers), appraisers' fees, costs of
environmental audits and reports, expenditures for documentary and
expert evidence, stenographers' charges, publication costs and costs of
procuring all abstracts of title, title searches and examinations,
title policies and similar data with respect to title which Beneficiary
or Trustee may reasonably incur and any other expenses of the
foreclosure proceeding (all of which may be estimated as to items to be
expended after the entry of the decree), with interest thereon (to the
extent permitted by law), from the date of any such advance until paid
to Beneficiary, computed at the Default Rate;
Second: All other amounts (including, without limitation, all
------
Impositions other than taxes subject to which the Mortgaged Property
was sold and all direct and indirect costs and expenses incurred by or
on behalf of Beneficiary in the operation and
51
maintenance of the Mortgaged Property, the collection of Rents and the
enforcement of any of their remedies under the SC Transaction Documents
or by applicable law) advanced or paid by Beneficiary pursuant to the
Note, this Deed of Trust or any other SC Transaction Document, with
interest thereon (to the extent permitted by law), from the date of any
such advance until paid to Beneficiary, computed at the Default Rate;
Third: Any indebtedness secured by this Deed of Trust and at the
-----
time due and payable (whether by acceleration or otherwise), including
all principal amounts, the Yield Maintenance Premium, if any, and
interest at the time due and payable under the Note, and interest (to
the extent permitted by law) at the Default Rate on any overdue
principal and (to the extent permitted by law) any other sum
constituting a portion of the Debt in such order and priority as
Beneficiary shall in its sole discretion determine; and
Fourth: All other amounts required to be paid by Grantor pursuant
------
to any provision of any SC Transaction Document.
Subject to the provisions of Paragraph 39 hereof, any surplus of the proceeds of
------------
such sale shall be paid promptly to the person or entity legally entitled
thereto. In the event Trustee cannot determine the person or persons to whom the
surplus should be paid or Trustee concludes that a controversy exists with
respect to the surplus, Trustee may pay the surplus into a court of competent
jurisdiction in an interpleader action and all expenses of such action,
including legal fees incurred by Beneficiary and Trustee, shall be paid from the
surplus or, if the surplus is insufficient, by Grantor.
24. Purchase of the Mortgaged Property by Beneficiary. Beneficiary
-------------------------------------------------
may be a purchaser of the Mortgaged Property or any part thereof or any interest
therein at any sale thereof, whether pursuant to foreclosure or power of sale or
otherwise, and may apply the amount of the Debt outstanding (or such portion
thereof as the Beneficiary or Trustee shall determine in its sole discretion),
and the expenses of the sale and costs of the action and any other sums which
Beneficiary or Trustee is authorized to charge under this Deed of Trust or under
applicable law toward the purchase price thereof.
25. Security Agreement; Uniform Commercial Code.
-------------------------------------------
(a) This Deed of Trust constitutes a security agreement under
the Code and a fixture filing for the purposes of Division 9 of the Code and a
security interest shall be deemed, and hereby is, granted by Grantor to
Beneficiary and attached to the Security Interest Property for the benefit of
Beneficiary as additional security for the Debt.
(b) To the extent permitted by law, Grantor hereby authorizes
Beneficiary to file financing and continuation statements to continue such lien
with respect to the Security Interest Property without the signature of Grantor
and, upon reasonable request, Grantor shall promptly execute financing and
continuation statements in form satisfactory to Beneficiary to secure
Beneficiary's interest in the Security Interest Property. Grantor shall further,
from time to time, upon the written demand of Beneficiary, execute, acknowledge
and deliver any financing
52
statement, renewal, affidavit, certificate, continuation statement or other
document as Beneficiary may request in order to perfect, preserve, continue,
extend or maintain the security interest and priority of this Deed of Trust or
such other security instrument as a valid lien subject to the Permitted
Exceptions. Grantor hereby irrevocably appoints Beneficiary as attorney-in-fact
(which appointment shall be deemed to be coupled with an interest) for the
limited purpose of executing and filing such financing and continuation
statements. Grantor agrees to pay to Beneficiary, on written demand, all costs
and expenses (including reasonable attorneys' fees and disbursements) incurred
by Beneficiary in connection with the preparation, execution, acknowledgment,
recording, filing and refiling of any such instrument or document, including,
without limitation, the charges for examining title which amounts, as well as
any other amounts required to be paid to Beneficiary pursuant to this Paragraph,
---------
together with interest thereon at the Default Rate from the date of any such
expenditure by Beneficiary until repayment, and such sum, together with such
interest, shall constitute a portion of the Debt secured by the lien of this
Deed of Trust. Neither a request of Beneficiary hereunder nor the failure of
Beneficiary to make such a request shall be construed as a release of any
portion of the Mortgaged Property from the lien of this Deed of Trust, this
covenant and any such security agreement or other similar security instrument
delivered to Beneficiary being cumulative and additional security for payment of
the Debt.
(c) Upon the occurrence of any Event of Default, Beneficiary
shall have all of the rights and remedies of a secured party under the Code with
respect to the Security Interest Property, or other applicable law, and all
rights and remedies provided for herein and in the Note, all of which rights and
remedies are cumulative to those provided elsewhere in this Deed of Trust or
otherwise available to Beneficiary. Upon the occurrence and continuance of any
Event of Default, Beneficiary shall have the option of directing Trustee to
proceed as to both real and personal property in accordance with its rights and
remedies in respect of the real property, in which event the default provisions
of the Code shall not apply. The parties agree that in the event Beneficiary
elects to proceed with respect to the Security Interest Property separately from
the real property, Grantor will assemble the Security Interest Property (other
than those items of Equipment which are affixed to the Improvements and not
removable without material damage to such items or the Improvements) and make
the Security Interest Property available to Beneficiary at a place or places
reasonably convenient to Beneficiary. Any notice of sale, disposition or other
intended action by Beneficiary, sent to Grantor at the address of Grantor
specified for notices herein at least fifteen (15) days prior to such action,
shall constitute reasonable notice to Grantor and the method of sale or
disposition or other intended action set forth in such notice shall conclusively
be deemed to be commercially reasonable within the meaning of the Code unless
objected to in writing by Grantor within ten (10) days after receipt by Grantor
of such notice.
(d) All replacements, renewals and additions to the Equipment
and the Personal Property shall become and be immediately subject to the
security interest herein of Beneficiary and be covered by this Deed of Trust as
part of the Mortgaged Property. Grantor warrants and represents that all
Security Interest Property now is, and that all replacements thereof,
substitutions therefor and additions thereto, will be, owned by Grantor free and
clear of liens, encumbrances or security interests of others except for the
Permitted Exceptions.
53
(e) Neither the provisions of this Paragraph nor the filing of
---------
any separate security agreement or financing statement, with respect to
Beneficiary's security interest in the Security Interest Property, shall be
construed as in any way derogating or impairing the intention of the parties
hereto that the Security Interest Property shall, at all times and for all
purposes and in all proceedings, both legal and equitable, be regarded as a part
of the Mortgaged Property. A CARBON, PHOTOGRAPHIC OR OTHER REPRODUCTION OF THIS
DEED OF TRUST OR ANY FINANCING STATEMENT RELATING TO THIS DEED OF TRUST SHALL BE
SUFFICIENT AS A FINANCING STATEMENT.
26. Certificate as to No Default, etc.; Information.
-----------------------------------------------
(a) Grantor will deliver to Beneficiary, within thirty (30) days
after written request, a written statement duly acknowledged by an authorized
representative of Grantor stating (i) the outstanding amount of the Debt (ii)
whether to the Best Knowledge of Grantor any offsets or defenses exist against
the Debt, and (iii) whether to the Best Knowledge or Grantor, there exists no
default, condition or event which, with the giving of notice or lapse of time or
both, would constitute a default in the performance or observance of any of the
terms of this Deed of Trust or any of the other SC Transaction Documents, or if
any such default exists, specifying to the nature and period of existence
thereof and what action Grantor is taking or proposes to take with respect
thereto.
(b) In addition to the information provided for in paragraph (a)
above, (i) Grantor will deliver to Beneficiary, within thirty (30) days after
written request, such further information with respect to the Ground Lease and
Mortgaged Property as Beneficiary may, from time to time, reasonably request,
(ii) Grantor will direct all Tenants under the Leases and lessors under the
Equipment Leases (as defined in the Loan Agreement) to deliver to Beneficiary
such information requested by Beneficiary to the extent required to be furnished
under such Lease or Equipment Lease, and (iii) Grantor will use its reasonable
efforts to cause such Tenants or lessors to deliver to Beneficiary such
information to the extent not so required to be furnished under such Lease or
Equipment Lease. Each such request for additional information of Grantor or any
such Tenant or lessor may be made by Beneficiary, from time to time, for any
reasonable business purpose.
27. Books and Records; Financial Statements. Beneficiary or its
---------------------------------------
designated representatives shall, upon reasonable prior notice to Grantor, have
(a) the right of entry and free access to the Premises (subject to the rights of
hotel guests) during business hours to inspect the Mortgaged Property and (b)
the right at reasonable times and upon not less than five (5) Business Days'
notice, to inspect all books, contracts and records of Grantor relating to the
Mortgaged Property. Grantor shall make the officers, directors of its general
partners, and its regional supervisors and retained professionals knowledgeable
of such matters available for Beneficiary or its designated representatives to
discuss Grantor's affairs, finances and accounts relating to the Mortgaged
Property and Grantor will cooperate with, and request that each of the foregoing
individuals cooperate with, Beneficiary and its designated representative to
enable them to perform these functions, at all reasonable times and as often as
Beneficiary may reasonably request.
54
28. Application of Proceeds. Any sum which by the terms of this Deed
-----------------------
of Trust is to be applied to the SC Loan or the Note shall be applied by
Beneficiary in such order and priority as is set forth herein or in any other SC
Transaction Document.
29. Terms Subject to Applicable Law; Severability. All rights, powers
---------------------------------------------
and remedies provided herein are intended to be limited to the extent necessary
so that they will not render this Deed of Trust invalid, unenforceable or not
entitled to be recorded, registered or filed under any applicable law. If any
term of this Deed of Trust shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the other terms
hereof shall in no way be affected thereby.
30. Further Acts, etc. Grantor shall, at its sole cost and expense,
-----------------
and without expense to Beneficiary or Trustee, do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, mortgages,
assignments, notices of assignments, transfers, assurances as Beneficiary or
Trustee shall, from time to time, reasonably require for better assuring,
conveying, assigning, transferring and confirming unto Beneficiary the property
and rights hereby mortgaged or intended now or hereafter so to be, or which
Grantor may be or may hereafter become bound to convey or assign to Beneficiary,
or for carrying out the intention or facilitating the performance of the terms
of this Deed of Trust (including, without limitation, any severance, splitting,
restatement, replacement, amendment or modification to this Deed of Trust, the
Note or the other SC Transaction Documents deemed necessary by Beneficiary or
Trustee to effectuate or confirm the obligations of Beneficiary and Trustee
under Paragraph 61 hereof) or filing, registering or recording this Deed of
------------
Trust and, on written demand, will execute and deliver one or more financing
statements to evidence more effectively the lien hereof upon the Mortgaged
Property except that Grantor shall have no obligation to comply with the
foregoing if any such action would increase Grantor's liability hereunder or
increase Beneficiary's rights hereunder. Grantor will reimburse Beneficiary
and/or Trustee, on written demand, for any sums (including reasonable attorneys'
fees and disbursements) reasonably expended by Beneficiary or Trustee in
preparing, executing, acknowledging, filing, registering and recording such
instruments, certificates and documents.
31. Limitation of Liability of Beneficiary and Trustee. Neither this
--------------------------------------------------
Deed of Trust nor any action or inaction on the part of Beneficiary or Trustee
shall, without such party's written consent, constitute an assumption on such
party's part of any obligation under any of the Leases or any other agreement
affecting the Mortgaged Property, nor shall Beneficiary or Trustee have any
obligation to make any payment to be made by Grantor under the Leases or any
such other agreement, or to present or file any claim, or to take any other
action to collect or enforce the payment of any amounts which have been assigned
to Beneficiary and/or Trustee or to which Beneficiary and/or Trustee may be
entitled hereunder at any time or times. No action or inaction on the part of
Beneficiary or Trustee shall adversely affect or limit in any way the rights of
Beneficiary or Trustee hereunder or under the Leases or the Note or the
Assignment.
32. Documentary Stamps. If at any time any Governmental Authority
------------------
shall require revenue or other stamps to be affixed to the Note or this Deed of
Trust, Grantor will pay for the
55
same, with interest and penalties thereon, if any. The provisions of the final
sentence of Paragraph 34 shall apply to any failure of Grantor to make any such
------------
payment.
33. Cumulative Remedies of Beneficiary; No Waiver. No legal,
---------------------------------------------
equitable or contractual right, power or remedy of Beneficiary shall be
exclusive of any other, but rather, each right, power or remedy shall be
separate, cumulative and concurrent and shall be in addition to every right,
power or remedy now or hereafter existing at law or in equity. No delay in the
exercise of, or omission to exercise, any right, power or remedy accruing on any
default shall impair any such right, power or remedy or be construed to be a
waiver of any such default or acquiescence therein, nor shall it affect any
subsequent default of the same or a different nature. Every such right, power or
remedy may be exercised concurrently or independently, and when and as often as
may be deemed expedient, by Beneficiary. Beneficiary may resort for the payment
of the Debt to the Mortgaged Property and to any other security held by
Beneficiary in such order and manner as Beneficiary, in its sole discretion,
consistent with the SC Transaction Documents, may elect. Beneficiary may take
action to recover the Debt, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of Beneficiary thereafter to foreclose
this Deed of Trust or sell the Mortgaged Property pursuant to the power of sale,
if any, contained herein. No act of Beneficiary shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision.
34. Filing of Deed of Trust, etc. Grantor forthwith upon the execution
----------------------------
and delivery of this Deed of Trust and thereafter, from time to time, as
reasonably required or requested by Beneficiary, will cause this Deed of Trust,
the Assignment, and any security instrument or SC Transaction Document creating
a lien or evidencing the lien hereof upon the Mortgaged Property and each
instrument of further assurance, and each supplement to any of the foregoing and
each modification to any of the foregoing, to be filed, registered or recorded
in such manner and in such places as may be required by any present or future
law in order to publish notice of and fully to protect the lien hereof upon, and
the interests of Beneficiary in the Mortgaged Property. Grantor will pay all
filing, registration or recording fees, and all reasonable expenses incident to
the execution and acknowledgment of this Deed of Trust, any mortgage or deed of
trust supplemental hereto, any security instrument with respect to the Mortgaged
Property and any instrument of further assurance, and all Federal, state, county
and municipal taxes, duties, imposts, assessments and charges arising out of or
in connection with the execution and delivery of this Deed of Trust, any
mortgage or deed of trust supplemental hereto, any security instrument with
respect to the Mortgaged Property or any instrument of further assurance. In the
event that Grantor shall fail to make any such payment, Beneficiary shall have
the right, but not the obligation, to pay at the direction of Beneficiary the
amount due and shall notify Grantor of such payment and Grantor shall reimburse
Beneficiary therefor, upon written demand, with interest thereon at the Default
Rate from the date of demand by Beneficiary to the date of repayment, and such
amount, together with such interest, shall constitute a portion of the Debt
secured by the lien of this Deed of Trust.
35. Usury Laws. It is the intent of Grantor and Beneficiary to comply
----------
at all times with applicable usury laws. If at any time such laws would render
usurious any amounts called for under the Note or any of the SC Transaction
Documents, then it is Grantor's and
56
Beneficiary's express intention that such excess amount be immediately credited
on the principal balance of the Note (or, if the Note has been fully paid, and
Beneficiary has no further obligation under the Loan Agreement to make Advances,
refunded by Beneficiary to Grantor and Grantor shall accept such refund), and
the provisions hereof and thereof be immediately deemed to be reformed to comply
with the then applicable laws, without the necessity of the execution of any
further documents, but so as to permit the recovery of the fullest amount
otherwise called for hereunder and thereunder. Any such crediting or refund
shall not cure or waive any default by Grantor under the Note or under any of
the other SC Transaction Documents. If, at any time following any such reduction
in the interest rate payable by Grantor, there remains unpaid any principal
amounts under the Note and the maximum interest rate permitted by applicable law
is increased or eliminated, then the interest rate payable hereunder shall be
readjusted, to the extent permitted by applicable law, so that the total dollar
amount of interest payable hereunder shall be equal to the dollar amount of
interest which would have been paid by Grantor without giving effect to the
applicable usury laws theretofore in effect. Grantor agrees, however, that in
determining whether or not any interest payable under the Note or any of the
other SC Transaction Documents exceeds the highest rate permitted by law, any
non-principal payment (except payments specifically stated in the Note or in any
other SC Transaction Document to be "interest"), including, without limitation,
prepayment fees and late charges, shall be deemed, to the extent permitted by
law, to be an expense, fee or premium rather than interest.
36. Marshalling. Grantor waives and releases any right to have the
-----------
Mortgaged Property marshalled.
37. Waiver of Notice. Grantor shall not be entitled to any notices of
----------------
any nature whatsoever from Beneficiary or Trustee except with respect to matters
for which this Deed of Trust, the Loan Agreement or the Note specifically and
expressly provides for the giving of notices by Beneficiary or Trustee to
Grantor, and Grantor hereby expressly waives the right to receive any notice
from Beneficiary or Trustee with respect to any matter for which this Deed of
Trust, the Loan Agreement or the Note does not specifically and expressly
provide for the giving of notice by Beneficiary or Trustee to Grantor. Grantor
hereby requests that a copy of any notice of default and every notice of sale
hereunder be mailed to it as provided by law at Grantors address set forth in
Paragraph 41.
- ------------
38. Recovery of Sums Required To Be Paid. Beneficiary shall have the
------------------------------------
right from time to time to take action or direct Trustee to take action to
recover any sum or sums which constitute a part of the Debt as the same become
due, without regard to whether or not the balance of the Debt shall be due, and
without prejudice to the right of Beneficiary or Trustee to thereafter bring an
action of foreclosure, or any other action, for a default or defaults by Grantor
existing at the time such earlier action was commenced.
39. Other Mortgages; Cross Collateralization; Cross Default.
-------------------------------------------------------
(a) Grantor acknowledges that this Deed of Trust along with the
Other SC Mortgages secure the Debt. Grantor agrees that the lien of this Deed of
Trust shall be absolute and unconditional and shall not in any manner be
affected or impaired by any acts or
57
omissions whatsoever of Beneficiary or Trustee and, without limiting the
generality of the foregoing, the lien hereof shall not be impaired by any
acceptance by Beneficiary of any other security for any of the Debt, or by any
failure, neglect or omission on the part of Beneficiary or Trustee to realize
upon or protect any of the Debt or any collateral security therefor including,
without limitation, the Other SC Mortgages. The lien of this Deed of Trust shall
not in any manner be impaired or affected by any release (except as to the
property released), sale, pledge, surrender, compromise, settlement, renewal,
extension, indulgence, alteration, changing, modification or disposition of any
of the Debt or of any of the collateral security therefor, including, without
limitation, the Other SC Mortgages, and Beneficiary may foreclose, or direct
Trustee to foreclose, or exercise any other remedy available to Beneficiary
under the Other SC Mortgages without first exercising or enforcing any of its
remedies under this Deed of Trust and any exercise of the rights or remedies of
Beneficiary hereunder shall not in any manner impair the Debt or the lien of
this Deed of Trust or the liens of the Other Mortgages or any of Beneficiary's
rights and remedies thereunder.
(b) Grantor specifically consents and agrees that Beneficiary
or Trustee may exercise their rights and remedies hereunder and under the Other
SC Mortgages separately or concurrently and in any order that they may deem
appropriate and Grantor waives any rights of subrogation. Without limiting the
generality of the foregoing, Grantor agrees that if an Event of Default is
continuing (i) Beneficiary or Trustee shall have the right, to the extent
permitted by applicable law, to pursue all of its rights and remedies in one
proceeding, or separately and independently in separate proceedings from time to
time, as Beneficiary, in its sole and absolute discretion, shall determine from
time to time, (ii) neither Beneficiary nor Trustee is required to either
marshall assets, sell the Mortgaged Property or properties encumbered by the
Other SC Mortgages in any inverse order of alienation, or be subject to any "one
action" or "election of remedies" law or rule, (iii) the exercise by Beneficiary
or Trustee of any remedies against the Mortgaged Property or properties
encumbered by the Other SC Mortgages will not impede Beneficiary or Trustee from
subsequently or simultaneously exercising remedies against any other properties
encumbered by the Other SC Mortgages or this Deed of Trust, and (iv) all liens
and other rights, remedies or privileges provided to Beneficiary or Trustee
shall remain in full force and effect until Beneficiary and Trustee have
exhausted all of their remedies against the Mortgaged Property and all of the
properties encumbered by the Other SC Mortgages and this Deed of Trust have been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or
the Debt has been paid in full.
(c) It is the intent of the parties hereto that this Deed of
Trust be cross-defaulted and cross-collateralized with the Other SC Mortgages
only to the extent that this Deed of Trust and each of the Other SC Mortgages
continue to be held and owned by the same Person (as defined in the Loan
Agreement). Therefore, notwithstanding any provisions contained in this Deed of
Trust or the other SC Transaction Documents to the contrary, Grantor and
Beneficiary agree that the provisions of this Paragraph 39 and any other
------------
references in this Deed of Trust and the other SC Transaction Documents to the
"Other SC Mortgages" shall be automatically deleted and shall have no further
force and effect from and after the date this Deed of Trust is assigned to any
Person that is not concurrently the holder of all Other SC Mortgages, including
the Fee Owner pursuant to Paragraph 61 hereof. Grantor shall upon the written
------------
request of Beneficiary
58
or Trustee execute, acknowledge, deliver and record any modification, severance,
splitter, restatement or substitution of this Deed of Trust and the other SC
Transaction Documents deemed necessary by Beneficiary or Trustee to effectuate
or confirm that this Deed of Trust will, following such an assignment, no longer
be subject to the cross-default and cross-collateralization provisions contained
herein. Grantor hereby irrevocably appoints Beneficiary as its attorney-in-fact
(which appointment shall be deemed to be coupled with an interest) for the
purpose of executing and recording any such modification, severance, splitter,
restatement or substitution of this Deed of Trust and the other SC Transaction
Documents following the occurrence of an Event of Default. Grantor agrees to pay
to Beneficiary, on written demand, all costs and expenses (including reasonable
attorneys' fees and disbursements) incurred by Beneficiary in connection with
the preparation, execution, acknowledgment, recording and filing of such
documents and instruments, together with interest thereon at the then applicable
interest rate for the Debt, including the Default Rate as provided for herein,
from the date of such expenditure by Beneficiary until repayment and such sum,
together with such interest, shall constitute a portion of the Debt secured by
the lien of this Deed of Trust.
40. No Oral Change. This Deed of Trust may only be modified or amended
--------------
by an agreement in writing signed by Grantor and Beneficiary, and may only be
released, discharged or satisfied of record by an instrument in writing signed
by Beneficiary.
41. Notices. Except as otherwise specified herein, all notices,
-------
requests, demands, consents, reports or other communications, including, without
limitation, a tender of cure pursuant to Paragraph 19 (c), to or upon the
----------------
respective parties hereto shall be in writing and be deemed to have been duly
given or made when received, if personally delivered by messenger or national
overnight courier service, or if sent by registered or certified U.S. mail,
postage prepaid, return receipt requested, if sent by telecopier with electronic
confirmation of receipt (hard copy to be sent by regular mail), addressed to the
party to which such notice, request, demand, consent, report or other
communication is being given at its address set forth below, or at such other
address as any of the parties hereto may hereafter notify the others by notice
given hereunder:
Beneficiary: Nomura Asset Capital Corporation
Two World Financial Center
Bldg. B, 21st Floor
New York, New York 10281-1198
Att: Daniel S. Abrams, Director
Fax: (212) 667-1022
with a copy to: Rosenman & Colin LLP
575 Madison Avenue
New York, New York 10022
Att: Michael Peskowitz, Esq.
Fax: (212) 940-8776
59
Grantor: Marriott Hotel Properties II Limited Partnership
c/o Host Marriott Corporation
10400 Fernwood Road
Bethesda, Maryland 20817
Att: Law Department 923/Deputy General Counsel
Fax: (301) 380-6332
with a copy to: Marriott Hotel Properties II Limited Partnership
c/o Host Marriott Corporation
10400 Fernwood Road
Bethesda, Maryland 20817
Att: Asset Management Department 908
Fax: (301) 380-8260
Trustee: Commonwealth Land Title Insurance Company of California
1855 Gateway Boulevard
Suite 270
Concord, California 94520
Att: Office Manager
42. Joint and Several Liability. If Grantor consists of more than one
---------------------------
person, the obligations and liability of each such person hereunder shall be
joint and several.
43. Headings, etc. The headings and captions of the paragraphs of this
-------------
Deed of Trust are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.
44. Successors and Assigns. The provisions of this Deed of Trust shall
----------------------
be binding upon Grantor and Beneficiary, and their respective successors and
assigns, and all persons claiming under or through Grantor or Beneficiary or any
such successor or assign, and shall inure to the benefit of, and be enforceable
by, Beneficiary and its respective successors and assigns.
45. Survival of Assignment. Notwithstanding anything to the contrary
----------------------
contained in this Deed of Trust, the assignment, pledge and mortgaging of the
Condemnation Proceeds, the Insurance Proceeds and the Refunds, and the right to
apply any of the foregoing in accordance with the terms of this Deed of Trust,
shall survive any foreclosure of the lien of this Deed of Trust.
46. Construction; Counterparts.
--------------------------
(a) Unless the context clearly indicates a contrary intent or
unless otherwise specifically provided herein, words used in this Deed of Trust
shall be used interchangeably in
60
singular or plural form, the word "Grantor" shall mean each Grantor and any
subsequent owners of the Mortgaged Property or any part thereof or interest
therein, the word "Beneficiary" shall mean each Beneficiary and any subsequent
holder of the Note, the word "Trustee" shall mean Trustee and any Successor
Trustee (hereinafter defined), and the word "person" shall include an
individual, corporation, partnership, limited liability company, limited
liability partnership, trust, unincorporated association, government,
governmental authority, or other entity. References to "this Paragraph" shall
mean the paragraph commencing with an Arabic numeral in which the affected
phrase or sentence is contained. The phrase "Best Knowledge of Grantor" shall
mean knowledge after appropriate and proper inquiry obtained by Grantor or any
officer or director of Grantor or any regional supervisor of Grantor charged
with primary responsibility as to such matters in connection with operation of
the Mortgaged Property. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural and vice versa.
The terms "herein", "hereof" or "hereunder" or similar terms used in this Deed
of Trust refer to this entire Deed of Trust and not to the particular provision
in which the term is used.
(b) It is acknowledged and agreed that in the preparation of
this Deed of Trust and the other SC Transaction Documents indistinguishable
contributions were made by representatives of both Grantor and Beneficiary, and
that Grantor and Beneficiary each waives any and all rights, either at law or in
equity, to have the provisions of this Deed of Trust or any part thereof or the
provisions of any other SC Transaction Document interpreted in favor of one over
the other based on a claim that representatives of one or the other were the
principal draftsmen of any such document.
(c) In the event that the provisions of this Deed of Trust
directly conflict with any provision of the Loan Agreement, the provisions of
the Loan Agreement shall govern, except the provisions of the Deed of Trust with
respect to Beneficiary's perfection of a security interest or lien on the
Mortgaged Property, and the enforcement thereof shall be governed by the terms
and provisions of the Deed of Trust.
(d) This Deed of Trust may be executed in any number of
duplicate originals and each such duplicate original shall be deemed to
constitute but one and the same instrument.
47. Governing Law. IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION,
-------------
MATTERS OF CONSTRUCTION AND VALIDITY, THIS DEED OF TRUST AND THE OBLIGATIONS
ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE
STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS OR COMITY) AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. NOTWITHSTANDING THE FOREGOING,
THE NOTE AND LOAN AGREEMENT ARE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
48. Expenses of Enforcement. All reasonable costs and expenses of
-----------------------
Beneficiary or Trustee in the enforcement of any covenant of Grantor or any
right or remedy afforded
61
Beneficiary or Trustee pursuant to this Deed of Trust or any other SC
Transaction Document or in connection with any proceedings, including probate
and bankruptcy proceedings, to which Beneficiary shall be a party, either as
plaintiff, claimant or defendant, by reason of this Deed of Trust or any
indebtedness hereby secured or in connection with preparations for the
commencement of any suit for the foreclosure hereof after accrual of such right
to foreclose, whether or not actually commenced shall be paid by Grantor within
ten (10) days after written demand by Beneficiary and/or Trustee, and, to the
extent permitted by law, shall bear interest, at the Default Rate from ten (10)
days after the date of demand until the actual date of repayment by Grantor, and
shall be deemed a part of the Debt and secured by this Deed of Trust and the
Other SC Mortgages. As used herein, "reasonable costs and expenses" shall
include, without limitation, actual expenses incurred by Beneficiary, fees and
expenses of Beneficiary's and/or Trustee's agents, reasonable attorneys fees and
expenses (which may include reasonable, actual billed costs, if any, of any
attorney in the employ of Beneficiary and/or Trustee and fees for services
performed by legal assistants and other non-lawyers), court costs and filing
fees, allowances authorized or permitted by statute or of a court, fees and
expenses of receivers, appraisers fees, costs of environmental audits and
reports, expenditures for documentary and expert evidence, stenographers
charges, publication costs and the cost of procuring abstracts of title, title
searches and examinations, title policies and similar data with respect to title
which Beneficiary and/or Trustee may deem reasonably necessary and all other
expenses of the foreclosure or similar enforcement proceeding, all of which may
be estimated as to items to be expended after the entry of the decree.
49. Waivers; Sale Bar Against Foreclosure.
-------------------------------------
(a) Grantor hereby expressly waives the pleading of any statute
of limitations or other bar to an action based on the passage of time as a
defense to any obligations secured by this Deed of Trust and the SC Transaction
Documents to the full extent permitted by law.
(b) In any action to foreclose the lien or liens of this Deed of
Trust, including a partial foreclosure, no defense, counterclaim or setoff shall
be available to Grantor other than one which denies the existence or sufficiency
of the facts upon which the action is grounded or which raises an issue
concerning the priority of liens. If any defense, counterclaim or setoff, other
than one permitted by this Paragraph is timely raised in such foreclosure
---------
action, such defense, counterclaim or setoff shall be dismissed; provided,
--------
however, if such defense, counterclaim or setoff is based on a claim which could
- -------
be tried in an action for money damages, such claim may be brought in a separate
action which shall not thereafter be consolidated with such foreclosure action.
The bringing of such separate action for money damages shall not be deemed to
afford any grounds for staying the foreclosure action.
(c) Grantor hereby expressly waives for itself and all who may
claim through or under it, and to the fullest extent Grantor may do so under
applicable law, any and all rights of redemption in the event of a foreclosure
sale, and the sale of the Mortgaged Property, or any part thereof, or any
interest therein, whether pursuant to foreclosure or partial foreclosure or
otherwise, any such foreclosure or partial foreclosure sale under this Deed of
Trust shall be a perpetual bar against Grantor.
62
(d) Notwithstanding anything to the contrary contained in this
Deed of Trust, Grantor hereby agrees that, to the extent permitted by applicable
law, Grantor shall not at any time:
(i) insist upon, plead or in any manner whatever claim or
take any benefit or advantage of any stay, extension or moratorium law
or an exemption from execution or sale of the Mortgaged Property or any
part thereof, wherever enacted, now or at any time hereafter in force,
which may affect the covenants and terms of performance of this Deed of
Trust or any other SC Transaction Document;
(ii) claim, take or insist upon any benefit or advantage of
any law now or hereafter in force providing for the valuation or
appraisal of the Mortgaged Property, or any part thereof, prior to any
sale or sales thereof which may be made pursuant to any provision
hereof or pursuant to the decree, judgment or order of any court of
competent jurisdiction or upon execution of any judgment recovered for
all or any portion of the Debt; or
(iii) avail itself of any benefits that might accrue to it
by virtue of any present or future laws excepting the Mortgaged
Property, or any proceeds arising from the sale thereof, from
attachment, levy, or sale under execution from civil process, or
extension of time for payment.
50. No Claim of Credit for Impositions. Grantor will not make
----------------------------------
deduction from or claim credit on the principal or interest secured by this Deed
of Trust by reason of any governmental taxes, assessments or charges. Grantor
will not claim any deduction from the taxable value of the Mortgaged Property by
reason of this Deed of Trust.
51. Sole Discretion of Beneficiary; Reasonableness.
----------------------------------------------
(a) Wherever pursuant to the provisions of this Deed of Trust,
Beneficiary exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Beneficiary, in Beneficiary's
opinion, judgment or discretion, then the decision of Beneficiary to approve or
disapprove or to decide that arrangements or terms are satisfactory or not
satisfactory shall be in Beneficiary's sole discretion, and shall be final and
conclusive.
(b) In the event the consent or approval of Beneficiary is
required to be reasonable under any provision in this Deed of Trust or any other
SC Transaction Document and Grantor believes that such consent or approval was
withheld or delayed in violation of such standard, then Grantor's sole remedy in
such case shall be either(i) to seek the release of the Mortgaged Property and
this Deed of Trust in accordance with the Loan Agreement, or(ii) to seek
injunctive relief or specific performance, and if the court determines, without
right to further appeal, that such approval or consent was withheld in violation
of the applicable standard, then(A) the consent or approval shall be deemed
granted,(B) Beneficiary shall deliver prompt written confirmation of such
consent or approval,(C) the granting of such consent or approval shall be the
only remedy available to Grantor,(D) neither Beneficiary nor its officers or
agents shall have
63
any liability for having withheld or delayed such consent or approval, and
Grantor's obligations under the SC Transaction Documents shall not be diminished
in any way.
52. Modification by Beneficiary. Grantor agrees that, without
---------------------------
affecting the liability of Grantor or any other person (except any person
expressly released in writing) liable for payment of the Debt or for performance
of any obligation contained herein or affecting the lien and security interest
of this Deed of Trust upon the Mortgaged Property or any part thereof,
Beneficiary may, at any time and from time to time, regardless of consideration,
without notice to or obtaining the consent of any person(a) release any person
liable for payment of any indebtedness secured hereby or for performance of any
obligation,(b) extend the time or agree to alter the terms of payment of any
such indebtedness, including, without limitation, modifying the interest rate,
the amortization period or any other provision of the Note,(c) modify or waive
any obligation (to the extent same does not increase Grantor's obligations),
(d)subordinate, modify or otherwise deal with the lien and security interest
hereof,(e) release the whole or any part of the Mortgaged Property or any other
security,(f) accept additional security of any kind,(g) consent to the making of
any map or plat of the Mortgaged Property, the creating of any easements thereon
or any covenants restricting use or occupancy thereof, or(h) exercise, refrain
from exercising or waive any right Beneficiary may have without in any manner
impairing or affecting the SC Transaction Documents, as so extended, modified
and supplemented, or the lien or priority thereof unless expressly released or
discharged from such obligation by Beneficiary in writing.
53. Assignment; Participations.
--------------------------
(a) Beneficiary shall have the right in its sole discretion and
at its sole cost and expense, except to the extent expressly provided to the
contrary in the Loan Agreement, at any time during the term of the SC Loan to
sell, assign, syndicate, securitize or otherwise transfer or dispose of its
interest in all or any portion of the SC Loan, provided, however, that all of
the provisions hereof shall continue in full force and effect following any such
sale, assignment, syndication, securitization or other transfer, except as
otherwise provided in Paragraph 39(c) hereof.
---------------
(b) Beneficiary may at any time grant to one or more banks, life
insurance companies or other financial institutions (each a "Participant")
-----------
participating interests in all or a portion of Beneficiary's interest in the SC
Loan, provided that, in the event of any such grant by Beneficiary of a
participating interest to a Participant, whether or not upon notice to Grantor,
Beneficiary shall remain responsible for the performance of its obligations
hereunder, and Grantor shall continue to deal solely and directly with the
Beneficiary named herein in connection with Beneficiary's rights and obligations
under this Deed of Trust. Beneficiary shall give Grantor written notice of any
such grant by Beneficiary of such a participating interest to a Participant.
54. No Merger. If both the landlord's and the tenant's estates under
---------
any Lease shall at any time become vested in one owner, or if Grantor's,
Beneficiary's and Trustee's estates under this Deed of Trust shall at any time
become vested in one owner, including, without limitation, upon the delivery of
a deed to Beneficiary in lieu of a foreclosure sale, or upon a
64
purchase of the Mortgaged Property by Beneficiary in a foreclosure sale, this
Deed of Trust and the lien created hereby shall not be destroyed or terminated
by the application of the doctrine of merger and in such event Beneficiary shall
continue to have and enjoy all of the rights and privileges of Beneficiary as to
the separate estates; and, as a consequence thereof, upon the foreclosure of the
lien created by this Deed of Trust any Leases or subleases then existing and
created by Grantor shall not be destroyed or terminated by application of the
law of merger or as a result of such foreclosure unless Beneficiary or any
purchaser at any such foreclosure sale shall so elect. No act by or on behalf of
Beneficiary or any such purchaser shall constitute a termination of any Lease or
sublease unless Beneficiary or such purchaser shall give written notice thereof
to the Tenant or sublessee thereunder. In the event Grantor acquires the estate
of Fee Owner under the Ground Lease (i) there shall be no merger between such
acquired estate and the estate of Grantor under the Ground Lease unless all
parties (including Beneficiary) having an interest in the Ground Lease shall
consent thereto in writing and (ii) the lien of this Deed of Trust shall, ipso
----
facto, without the necessity of any further conveyance, simultaneously with such
- -----
acquisition be spread to cover such acquired estate and as so spread shall be
prior to the lien of any mortgage placed on the acquired estate subsequent to
the date of this Deed of Trust.
55. Running with the Land. All covenants contained in this Deed of
---------------------
Trust shall run with the land of the Mortgaged Property.
56. True Copy. GRANTOR ACKNOWLEDGES HAVING RECEIVED A TRUE COPY OF
----------
THIS DEED OF TRUST WITHOUT CHARGE.
57. Waiver of Jury Trial. GRANTOR, AND BENEFICIARY BY ITS ACCEPTANCE
--------------------
OF THIS DEED OF TRUST, EACH HEREBY EXPRESSLY WAIVES TRIAL BY JURY IN ANY ACTION
OR PROCEEDING BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER, OR IN ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS DEED OF
TRUST, THE NOTE, THE ASSIGNMENT OR ANY OF THE OTHER SC TRANSACTION DOCUMENTS TO
THE FULL EXTENT PERMITTED BY LAW.
58. After-Acquired Property. If, after the date of this Deed of Trust,
-----------------------
Grantor acquires any property located on and used in connection with the
Mortgaged Property and that by the terms of this Deed of Trust is required or
intended to be encumbered by this Deed of Trust, the property shall become
subject to the lien and security interest of this Deed of Trust immediately upon
its acquisition by Grantor and without any further mortgage, conveyance,
assignment or transfer. Nevertheless, upon Beneficiary's reasonable request,
from time to time, Grantor will execute, acknowledge and deliver any additional
instruments and assurances of title and will do or cause to be done anything
further that is reasonably necessary for carrying out the intent of this Deed of
Trust.
59. Non-Recourse. The obligations of Grantor hereunder are
------------
"Non-Recourse" as such term is defined in the Loan Agreement.
------------
65
60. Regarding Trustee.
-----------------
(a) Trustee may resign by an instrument in writing addressed to
Beneficiary or be removed at any time with or without cause by instrument in
writing duly executed by Beneficiary. In case of the death, resignation or
removal of Trustee, a successor (each, a "Successor Trustee") may be appointed
-----------------
by Beneficiary by instrument of substitution complying with any applicable
requirements of law, and in the absence of any such requirement without other
formality than appointment and designation in writing recorded in the county in
which this Deed of Trust is recorded. Such appointment and designation shall be
full evidence of the right and authority to make the same and of all facts
therein recited, and upon the making of any such appointment and designation
this conveyance shall vest in the Successor Trustee all the estate and title of
its predecessor in all the Mortgaged Property, and such Successor Trustee shall
thereupon succeed to all the rights, powers, privileges, immunities and duties
hereby conferred upon the prior Trustee.
(b) Trustee may rely and shall be protected in acting upon any
notice, request, consent, demand, statement, note or other paper or document
believed by them to be genuine and to have been signed by the party or parties
purporting to sign same. Trustee shall not be liable for any error of judgment,
nor for any act done or step taken or omitted, nor for any mistakes of law or
fact, nor for anything which Trustee may do or refrain from doing in good faith,
nor generally shall Trustee have any liability except for gross negligence or
willful misconduct. Trustee may act and may sell or otherwise dispose of the
Mortgaged Property or any part hereof as herein provided, although Trustee has
been, may now be or may hereafter be, attorneys, officers, agents or employees
of Beneficiary, in respect of any matter of business whatsoever. In any event,
Trustee shall be indemnified and forever held harmless by Beneficiary for any
acts which Trustee may take pursuant to and in reliance upon the written
instructions of Beneficiary.
(c) All money received by Trustee shall, until used or applied
as herein provided, be held in trust, but need not be segregated (except to the
extent required by law and the other SC Transaction Documents), and Trustee
shall not be liable for interest thereon.
(d) If there be more than one Trustee, any Trustee,
individually, may exercise all powers granted to the Trustees collectively
without the necessity of the joinder of any other Trustee.
(e) Trustee shall be entitled to reasonable compensation for all
services rendered or expenses incurred in the administration or execution of the
trust hereby created and Grantor hereby agrees to pay same.
61. Right of Fee Owner to Purchase Deed of Trust.
--------------------------------------------
(a) In accordance with the provisions of Section 6.04 of the
Ground Lease, Beneficiary agrees as follows:
66
(i) If an Event of Default has occurred, Fee Owner shall
shall have thirty (30) days from the date on which Beneficiary
serves upon Fee Owner notice in writing, at the address specified
for Fee Owner in the Ground Lease or at such address as Fee Owner
has provided in written notice to Beneficiary ("Landlord's
----------
Notice") that the Beneficiary is proceeding to foreclose the Deed
------
of Trust, and stating the Purchase Price (as defined in subsection
(iii) below) during which thirty (30) day period Fee Owner shall
have the right and option ("Landlord's Option") to purchase from
-----------------
the Beneficiary its interest in Deed of Trust and the Landlord's
Note (as defined in subsection (iv) below) upon the terms and
subject to the conditions contained in this Paragraph 61. Provided
------------
that Beneficiary is concurrently proceeding to foreclose this Deed
of Trust and the MHP Mortgage, Landlord's Option hereunder is
contingent upon Fee Owner also exercising its similar option with
respect to the MHP Mortgage.
(ii) Landlord's Option must be exercised by written notice,
by certified mail, registered mail, or express mail service,
return receipt requested, served upon Grantor and Beneficiary
within such thirty (30) day period accompanied by Fee Owner's
forfeitable deposit on account of the purchase price to the
Beneficiary of the lesser of One Hundred Thousand Dollars
($100,000.00) or ten percent (10%) of the purchase price. Time
shall be of the essence as to the exercise of Landlord's Option.
If Landlord's Option is duly and timely exercised, Fee Owner shall
purchase and the Beneficiary shall assign the Deed of Trust and
the Landlord's Note to Fee Owner (or its designee), on the date
which is thirty (30) days after the date on which Fee Owner has
exercised Landlord's Option (or if such thirtieth (30th) day is
not a business day, on the next succeeding business day). The
closing shall take place at the Premises or such other location
mutually agreeable to Fee Owner and the Beneficiary.
(iii) The purchase price ("Purchase Price") payable by Fee
--------------
Owner shall be (x) if the Mortgaged Property is the sole security
for the SC Loan under the Loan Agreement, an amount equal to the
outstanding Debt secured by this Deed of Trust and (y) except as
otherwise provided in clause (x) above, an amount equal to the
difference between (A) Twenty-Seven Million Ninety Four Thousand
Ninety Six and no/100 Dollars ($27,094,096.00) ("Base Release
------------
Price") plus all accrued and unpaid interest on such Base Release
-----
Price and any advances made by Beneficiary or Trustee for the
protection of the Mortgaged Property and (B) the purchase price
paid by the Fee Owner to Beneficiary with respect to the MHP
Mortgage.
(iv) Immediately prior to Fee Owner's purchase of the Deed
of Trust, Beneficiary and Grantor shall, if necessary, amend the
Note to provide such separate note ("Landlord's Note") evidencing
---------------
solely the Purchase Price and shall, if necessary, amend the Deed
of Trust to secure solely the Landlord's Note. At the closing and
upon payment in full of the Purchase Price, the Beneficiary shall
67
assign this Deed of Trust and Landlord's Note to Fee Owner,
without recourse, representations, covenants or warranties of any
kind. Each such assignment shall be in form for recordation or
filing, as the case may be. Notwithstanding the foregoing, neither
the Beneficiary nor Grantor shall be responsible or liable to Fee
Owner for any other party's failure to complete its obligation to
perform the foregoing; however, Fee Owner's duty to purchase the
Deed of Trust after exercise of Landlord's Option is expressly
conditioned upon Fee Owner's receipt of the assignments and
amendments described in this Paragraph 61. Fee Owner shall be
------------
responsible for paying any taxes payable to any governmental
authority upon such assignments, and such assignments shall be
made subject to such state of title of the Mortgaged Property as
shall exist at the date of such assignment.
(v) Fee Owner shall not have the right to receive any
notices of default under this Deed of Trust, nor shall Fee Owner
have the right to cure any default under this Deed of Trust,
except to the extent provided in this Paragraph 61.
------------
(b) Grantor agrees and acknowledges that the Purchase Price set
forth in Paragraph 61 shall apply only to the assignment of this Deed of Trust
------------
to Fee Owner pursuant to this Paragraph 61 and shall not serve to describe,
------------
limit or restrict the amount of indebtedness secured by this Deed of Trust or to
describe, limit or restrict the rights, powers, benefits and privileges
otherwise granted to Beneficiary under this Deed of Trust and the other SC
Transaction Documents with respect to the Mortgaged Property. Grantor further
agrees and acknowledges that the assignment of this Deed of Trust to Fee Owner
pursuant to this Paragraph 61 shall not be deemed a cure or waiver of any Event
------------
of Default in the absence of a writing from Beneficiary expressly accepting a
cure or waiving such Event of Default. Beneficiary may, in its sole discretion,
exercise such rights and remedies available to Beneficiary under the Other SC
Mortgages and SC Transaction Documents in connection with such Event of Default
following the assignment of this Deed of Trust pursuant to Paragraph 61(a)
---------------
above.
(c) This Deed of Trust is expressly subject to all of Landlord's
rights under the provisions, covenants, conditions, exceptions and reservations
contained in the Ground Lease. Notwithstanding any provision contained herein to
the contrary, this Deed of Trust does not encumber the Fee Owner's fee simple
title or interest under the Ground Lease.
62. Additional Ground Lease Provisions.
----------------------------------
(a) In the event the Ground Lease shall be terminated by reason of a
default thereunder by Grantor and Beneficiary shall acquire from Fee Owner a new
ground lease, Grantor hereby waives any right, title or interest in and to such
new ground lease or the leasehold estate created thereby, waiving all rights of
redemption now or hereafter operable under any law.
(b) Grantor shall not elect to treat the Ground Lease as terminated,
canceled or surrendered pursuant to the applicable provisions of the Bankruptcy
Code (including, but not limited to, Section 365(h)(1) thereof) without
Beneficiary's prior written consent in the event of
68
Fee Owner's Bankruptcy. In addition, Grantor shall, in the event of Fee Owner's
Bankruptcy, reaffirm and ratify the legality, validity, binding effect and
enforceability of the Ground Lease and shall remain in possession of the
Premises and the leasehold estate created by the Ground Lease, notwithstanding
any rejection thereof by Fee Owner or any trustee, custodian or receiver.
(c) Grantor shall give Beneficiary not less than thirty (30) days
prior written notice of the date on which Grantor shall apply to any court or
other governmental authority for authority and permission to reject the Ground
Lease in the event that there shall be filed by or against Grantor any petition,
action or proceeding under the Bankruptcy Code or under any other similar
federal or state law now or hereafter in effect and if Grantor determines to
reject the Ground Lease, Beneficiary shall have the right, but not the
obligation, to serve upon Grantor within such thirty (30) day period a notice
stating that (i) Beneficiary demands that Grantor assume and assign the Ground
Lease to Beneficiary subject to and in accordance with the Bankruptcy Code and
(ii) Beneficiary covenants to cure or provide reasonably adequate assurance
thereof with respect to all defaults reasonably susceptible of being cured by
Beneficiary and of future performance under the Ground Lease. If Beneficiary
serves upon Grantor the notice described above, Grantor shall not seek to reject
the Ground Lease and shall comply with the demand provided for in clause (i)
above within fifteen (15) days after the notice shall have been given by
Beneficiary.
(d) To the extent permitted by law, Grantor hereby assigns to
Beneficiary all of Grantor's rights, powers or privileges with respect to
rejection of the Ground Lease as lessor or lessee thereunder, all pursuant to
Section 365 of the Bankruptcy Code.
(e) Beneficiary, upon notice to Grantor, shall have the right, but not
the obligation, to proceed in its own name or in the name of Grantor in respect
of any claim, suit, action or proceeding relating to the rejection of the Ground
Lease by Fee Owner as a result of Fee Owner's Bankruptcy, including, but not
limited to, the right to file and prosecute, to the exclusion of Grantor, any
and all proofs of claims, complaints, notices and other documents in any case in
respect of Fee Owner under and pursuant to the Bankruptcy Code.
(f) In the event of any arbitration under or pursuant to the Ground
Lease in which Beneficiary elects to participate, Grantor hereby irrevocably
appoints Beneficiary as its true and lawful attorney-in-fact (which appointment
shall be deemed coupled with an interest) to exercise all right, title and
interest of Grantor in connection with such arbitration, including, without
limitation, the right to appoint arbitrators and to conduct arbitration
proceedings on behalf of Grantor and Beneficiary. All costs and expenses
incurred by Beneficiary in connection with such arbitration and the settlement
thereof shall be borne solely by Grantor, including, without limitation,
reasonable attorneys' fees and disbursements. Nothing contained in this
Paragraph shall obligate Beneficiary to participate in any such arbitration.
63. Variable Rate on Interest; Additional Interest. On the Optional
----------------------------------------------
Prepayment Date (as such term is defined in the Loan Agreement) and on each
anniversary thereof the interest rate on the Note secured by this Deed of Trust
will be adjusted to be equivalent to the Adjusted
69
Rate (as such term is determined in accordance with the Note and the Loan
Agreement). During the period following the Optional Prepayment Date it is
possible that some or all of the additional interest may be unpaid and may be
accruing until the Maturity Date.
64. Right of Prior Lender.
---------------------
The recitals of this Deed of Trust, including without limitation
recital G, are incorporated by reference herein with the same effect as if they
were set forth in full among the operative provisions of this Deed of Trust. The
rights of Beneficiary under this Deed of Trust, including without limitation the
right to effect certain cures, to receive certain monies and to take certain
actions, including without limitation the rights of Beneficiary set forth in
Paragraphs 5, 9, 10, 11, 12, 13, 14, 16, 17, 18, 21, 22, 23, 25, 33 and 62 and
Schedule X of this Deed of Trust, are subject to the rights of the beneficiary
from time to time under the MHP Mortgage, and such rights may not be enforceable
by Beneficiary under this Deed of Trust if such rights are exercised by the
beneficiary under the MHP Mortgage.
GRANTOR HEREBY EXPRESSLY (i) WAIVES ANY RIGHTS IT MAY HAVE UNDER
CALIFORNIA LAW TO REPAY THE NOTE, IN WHOLE OR IN PART, WITHOUT PENALTY, UPON
------- -------
ACCELERATION OF THE NOTE, AND (II) AGREES THAT IF, FOR ANY REASON, A PREPAYMENT
OF ALL OR ANY PORTION OF THE PRINCIPAL AMOUNT OF THE NOTE IS MADE INCLUDING
WITHOUT LIMITATION UPON OR FOLLOWING ANY ACCELERATION OF THE NOTE BY BENEFICIARY
OR TRUSTEE ON ACCOUNT OF ANY DEFAULT BY GRANTOR INCLUDING, WITHOUT LIMITATION,
ANY TRANSFER, DISPOSITION, OR FURTHER ENCUMBRANCE PROHIBITED OR RESTRICTED BY
THIS DEED OF TRUST, THEN GRANTOR HEREBY DECLARES THAT (1) EACH OF THE FACTUAL
MATTERS SET FORTH IN THIS PARAGRAPH IS TRUE AND CORRECT, (2) BENEFICIARYS
AGREEMENT TO MAKE THE LOAN EVIDENCED BY THE NOTE CONSTITUTES ADEQUATE
CONSIDERATION FOR THIS WAIVER AND AGREEMENT, AND HAS BEEN GIVEN INDIVIDUAL
WEIGHT BY GRANTOR AND BENEFICIARY, (3) GRANTOR IS A SOPHISTICATED AND
KNOWLEDGEABLE REAL ESTATE INVESTOR WITH COMPETENT AND INDEPENDENT LEGAL COUNSEL
AND (4) GRANTOR FULLY UNDERSTANDS THE EFFECT OF THIS WAIVER AND AGREEMENT.
----------------
GRANTOR INITIALS
SIGNATURE PAGE FOLLOWS
70
IN WITNESS WHEREOF, Grantor has duly executed and sealed this Deed of
Trust as of the day and year first above written.
MARRIOTT HOTEL PROPERTIES II LIMITED
PARTNERSHIP
By: Marriott MHP Two Corporation, its sole general
partner
By: /s/ Douglas W. Henry
---------------------------------------
Name: Douglas W. Henry
Title: Vice President
71
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 23rd of September, in the year 1996, before me, Robert E. Zain,
a Notary Public of said State, duly commissioned and sworn, personally appeared
Dougals W. Henry, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person that executed the within instrument as
Vice President of Marriott MHP Two Corporation, a Delaware corporation, which is
the general partner of Marriott Hotel Properties II Limited Partnership, a
Delaware limited partnership, and acknowledged tome that he executed said
instrument on behalf of said limited partnership.
In Witness Whereof, I have hereunto set my hand and affixed my official
seal the day and year in this certificate above written.
/s/ Robert E. Zalin
--------------------------------------
Notary Public
My commission expires: April 15, 1998
------------------
Notary Seal
Print Name: Robert E. Zalin
-------------------------------------
EXHIBIT A
LEGAL DESCRIPTION
All of that certain tract or parcel of land and premises, situate,
lying and being in Contra Costa County, State of California, more particularly
described as follows:
A-1
EXHIBIT B
SCHEDULE OF OTHER SC MORTGAGES
1. Deed of Trust, Assignment of Leases, Security Agreements and Fixture
Filing of even date in the principal amount of $43,500,000.00 from
Santa Clara Marriott Hotel Limited Partnership, as Grantor, to
Commonwealth Land Title Insurance Company of California, as Trustee,
for the benefit of Nomura Asset Capital Corporation, as Beneficiary,
encumbering certain hotel premises in Santa Clara, California and
intended to be recorded simultaneously herewith in the official records
of Santa Clara County, State of California.
2. Deed of Trust, Assignment of Leases, Security Agreement and Fixture
Filing of even date in the principal amount of $43,500,000.00 from
Marriott Hotel Properties II Limited Partnership, as Grantor, to
Commonwealth Land Title Insurance Company, as Trustee, for the benefit
of Nomura Asset Capital Corporation, as Beneficiary encumbering certain
hotel premises in San Antonio, Texas and intended to be recorded
simultaneously herewith in the official records of County of Bexar,
State of Texas.
3. Act of Multiple Indebtedness, Mortgage, Security Agreement, Pledge
and Collateral Assignment of Leases and Rents and Insurance Proceeds of
even date in the principal amount of $43,500,000.00 from Marriott Hotel
Properties II Limited Partnership, as Mortgagor, to Nomura Asset
Capital Corporation, as Mortgagee encumbering certain hotel premises in
New Orleans, Louisiana and, intended to be recorded simultaneously
herewith in the official records of Orleans Parish, State of Louisiana.
B-1